Option Care Health, Inc. (the “Company” or “Option Care Health”)
(Nasdaq: OPCH), the nation’s largest independent provider of home
and alternate site infusion services, announced today financial
results for the first quarter ended March 31, 2024.
First Quarter 2024 Financial Results and
Highlights
- Net revenue of $1,146.1 million, up 12.8% compared to $1,015.8
million in the first quarter of 2023
- Gross profit of $238.5 million, or 20.8% of net revenue, up
4.1% compared to $229.0 million, or 22.5% of net revenue, in the
first quarter of 2023
- Net income of $44.8 million, or $0.26 earnings per share, up
14.2% compared to net income of $39.2 million, or $0.21 diluted
earnings per share, in the first quarter of 2023
- Adjusted EBITDA of $98.3 million, up 4.8% compared to $93.8
million in the first quarter of 2023
- Cash flow from operations of $(68.8) million compared to $89.8
million in the first quarter of 2023, primarily driven by the
Change Healthcare cybersecurity incident
- Cash and cash equivalents balance was $219.5 million at the end
of the first quarter of 2024
- Completed stock repurchases of approximately $40.0 million
- Received the 2024 Gallup
Exceptional Workplace Award
John C. Rademacher, Chief Executive Officer, commented, “The
Option Care Health team delivered solid financial results while
navigating a disruptive environment. I am proud of the resilient
enterprise we have built and the team's unwavering commitment to
providing extraordinary patient care in the post-acute and
ambulatory setting.”
Updated Full Year 2024 Financial Guidance
For the full year 2024, Option Care Health expects to
generate:
- Net revenue of $4.65 billion to $4.8 billion
- Adjusted EBITDA of $430 million to $450 million
- Cash flow from operations of at least $300 million, consistent
with previous guidance
- Effective tax rate of 26% - 28%, consistent with previous
guidance
- Net interest expense of
approximately $55 million to $60 million, consistent with previous
guidance
Conference Call
Option Care Health will host a conference call to discuss its
first quarter 2024 financial results later today at 8:30 a.m. ET.
The conference call can be accessed via a live audio webcast that
will be available online at https://investors.optioncarehealth.com.
A replay of the call will be available via webcast for on-demand
listening shortly after the completion of the call, at the same web
link, and will remain available for approximately 90 days.
About Option Care Health
Option Care Health is the nation’s largest independent provider
of home and alternate site infusion services. With over 7,500 team
members including more than 4,500 clinicians, we work
compassionately to elevate standards of care for patients with
acute and chronic conditions in all 50 states. Through our clinical
leadership, expertise and national scale, Option Care Health is
reimagining the infusion care experience for patients, customers
and team members. To learn more, please visit our website at
OptionCareHealth.com.
Investor Contacts
Mike Shapiro |
Bob East, Asher Dewhurst, Jordan Kohnstam |
Chief Financial Officer |
Westwicke |
T: (312) 940-2538 |
T: (413) 213-0500 |
mike.shapiro@optioncare.com |
optioncarehealth@westwicke.com |
|
|
Forward-Looking Statements - Safe Harbor
This press release may contain “forward-looking statements”
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements can be identified by words such as: “anticipate,”
“intend,” “plan,” “believe,” “project,” “estimate,” “expect,”
“may,” “should,” “will” and similar references to future periods.
Examples of forward-looking statements include, among others,
statements we may make regarding future revenues, future earnings,
regulatory developments, market developments, new products and
growth strategies, integration activities and the effects of any of
the foregoing on our future results of operations or financial
conditions.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding the
future of our business, future plans and strategies, projections,
anticipated events and trends, the economy and other future
conditions. Because forward-looking statements relate to the
future, they are subject to inherent uncertainties, risks and
changes in circumstances that are difficult to predict and many of
which are outside of our control. Our actual results and financial
condition may differ materially from those indicated in the
forward-looking statements. Important factors that could cause our
actual results and financial condition to differ materially from
those indicated in the forward-looking statements include, among
others, the following: changes in laws and regulations applicable
to our business model; changes in market conditions and receptivity
to our services and offerings; pending and future litigation;
potential liability for claims not covered by insurance; and loss
of relationships with managed care organizations and other
non-governmental third party payers. For a detailed discussion of
the risk factors that could affect our actual results, please refer
to the risk factors identified in our SEC reports as filed with the
SEC.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. We undertake no obligation
to publicly update any forward-looking statement, whether written
or oral, that may be made from time to time, whether as a result of
new information, future developments or otherwise.
Note Regarding Use of Non-GAAP Financial
Measures
In addition to reporting financial information in accordance
with generally accepted accounting principles (GAAP), the Company
is also reporting Adjusted EBITDA, which is a non-GAAP financial
measure. Adjusted EBITDA is not a measurement of financial
performance under GAAP and should not be used in isolation or as a
substitute or alternative to net income, operating income or any
other performance measure derived in accordance with GAAP, or as a
substitute or alternative to cash flow from operating activities or
a measure of the Company’s liquidity. In addition, the Company's
definition of Adjusted EBITDA may not be comparable to similarly
titled non-GAAP financial measures reported by other companies.
Adjusted EBITDA, as defined by the Company, represents net income
before net interest expense, income tax expense, depreciation and
amortization, stock-based compensation expense, loss on
extinguishment of debt, and restructuring, acquisition, integration
and other. As part of restructuring, acquisition, integration and
other, the Company may incur significant charges such as the write
down of certain long‑lived assets, temporary redundant expenses,
professional fees, potential retention and severance costs and
potential accelerated payments or termination costs for certain of
its contractual obligations. Management believes that Adjusted
EBITDA provides useful supplemental information regarding the
performance of Option Care Health’s business operations and
facilitates comparisons to the Company’s historical operating
results. We have not reconciled Adjusted EBITDA guidance to net
income as management believes creation of this reconciliation would
not be practicable due to the uncertainty regarding, and potential
variability of, material reconciling items. For a full
reconciliation of Adjusted EBITDA to the most comparable GAAP
financial measure, please see below.
Schedule 1
OPTION CARE HEALTH, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS(IN
THOUSANDS)(UNAUDITED)
|
March 31, 2024 |
|
December 31, 2023 |
ASSETS |
|
|
|
CURRENT ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
219,513 |
|
$ |
343,849 |
Accounts receivable, net |
|
573,650 |
|
|
377,658 |
Inventories |
|
241,948 |
|
|
274,004 |
Prepaid expenses and other current assets |
|
94,603 |
|
|
98,744 |
Total current assets |
|
1,129,714 |
|
|
1,094,255 |
|
|
|
|
NONCURRENT ASSETS: |
|
|
|
Property and equipment, net |
|
120,969 |
|
|
120,630 |
Intangible assets, net |
|
19,317 |
|
|
20,092 |
Referral sources, net |
|
307,482 |
|
|
315,304 |
Goodwill |
|
1,540,246 |
|
|
1,540,246 |
Other noncurrent assets |
|
131,834 |
|
|
126,508 |
Total noncurrent assets |
|
2,119,848 |
|
|
2,122,780 |
TOTAL ASSETS |
$ |
3,249,562 |
|
$ |
3,217,035 |
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
CURRENT LIABILITIES: |
|
|
|
Accounts payable |
$ |
485,736 |
|
$ |
426,513 |
Other current liabilities |
|
151,216 |
|
|
191,796 |
Total current liabilities |
|
636,952 |
|
|
618,309 |
|
|
|
|
NONCURRENT LIABILITIES: |
|
|
|
Long-term debt, net of discount, deferred financing costs and
current portion |
|
1,056,282 |
|
|
1,056,650 |
Other noncurrent liabilities |
|
127,180 |
|
|
120,404 |
Total noncurrent liabilities |
|
1,183,462 |
|
|
1,177,054 |
Total liabilities |
|
1,820,414 |
|
|
1,795,363 |
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
1,429,148 |
|
|
1,421,672 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
3,249,562 |
|
$ |
3,217,035 |
Schedule 2
OPTION CARE HEALTH, INC. CONDENSED
CONSOLIDATED STATEMENTS OF EARNINGS(IN THOUSANDS,
EXCEPT PER SHARE AMOUNTS)(UNAUDITED)
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
NET
REVENUE |
$ |
1,146,052 |
|
|
$ |
1,015,848 |
|
COST OF REVENUE |
|
907,552 |
|
|
|
786,843 |
|
GROSS PROFIT |
|
238,500 |
|
|
|
229,005 |
|
|
|
|
|
OPERATING COSTS AND EXPENSES: |
|
|
|
Selling, general and administrative expenses |
|
154,742 |
|
|
|
147,866 |
|
Depreciation and amortization expense |
|
14,728 |
|
|
|
14,514 |
|
Total operating expenses |
|
169,470 |
|
|
|
162,380 |
|
OPERATING INCOME |
|
69,030 |
|
|
|
66,625 |
|
|
|
|
|
OTHER INCOME (EXPENSE): |
|
|
|
Interest expense, net |
|
(13,202 |
) |
|
|
(13,834 |
) |
Other, net |
|
1,127 |
|
|
|
1,438 |
|
Total other expense |
|
(12,075 |
) |
|
|
(12,396 |
) |
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
56,955 |
|
|
|
54,229 |
|
INCOME TAX EXPENSE |
|
12,164 |
|
|
|
15,021 |
|
NET
INCOME |
$ |
44,791 |
|
|
$ |
39,208 |
|
|
|
|
|
Earnings per share, basic |
$ |
0.26 |
|
|
$ |
0.22 |
|
Earnings per share, diluted |
$ |
0.26 |
|
|
$ |
0.21 |
|
|
|
|
|
Weighted average common shares outstanding, basic |
|
173,928 |
|
|
|
181,262 |
|
Weighted average common shares outstanding, diluted |
|
175,624 |
|
|
|
182,735 |
|
Schedule 3
OPTION CARE HEALTH, INC. CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS(IN
THOUSANDS)(UNAUDITED)
|
Three Months Ended March 31, |
|
|
2024 |
|
|
|
2023 |
|
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
Net income |
$ |
44,791 |
|
|
$ |
39,208 |
|
Adjustments to reconcile net income to net cash provided by
operations: |
|
|
|
Depreciation and amortization expense |
|
15,305 |
|
|
|
15,225 |
|
Other non-cash adjustments |
|
21,097 |
|
|
|
22,498 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable, net |
|
(195,992 |
) |
|
|
(17,812 |
) |
Inventories |
|
32,056 |
|
|
|
(25,362 |
) |
Accounts payable |
|
59,223 |
|
|
|
70,127 |
|
Other |
|
(45,264 |
) |
|
|
(14,132 |
) |
Net cash (used in) provided by operating activities |
|
(68,784 |
) |
|
|
89,752 |
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
Acquisition of property and equipment |
|
(5,820 |
) |
|
|
(5,760 |
) |
Net cash used in investing activities |
|
(5,820 |
) |
|
|
(5,760 |
) |
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
Purchase of company stock |
|
(40,050 |
) |
|
|
(75,000 |
) |
Other financing cash flows |
|
(9,682 |
) |
|
|
(5,402 |
) |
Net cash used in financing activities |
|
(49,732 |
) |
|
|
(80,402 |
) |
|
|
|
|
NET
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
(124,336 |
) |
|
|
3,590 |
|
Cash and cash equivalents - beginning of the period |
|
343,849 |
|
|
|
294,186 |
|
CASH AND CASH EQUIVALENTS - END OF PERIOD |
$ |
219,513 |
|
|
$ |
297,776 |
|
Schedule 4
OPTION CARE HEALTH, INC.
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP
MEASURES(IN THOUSANDS)(UNAUDITED)
|
Three Months Ended March 31, |
|
2024 |
|
2023 |
Net income |
$ |
44,791 |
|
$ |
39,208 |
Interest expense, net |
|
13,202 |
|
|
13,834 |
Income tax expense |
|
12,164 |
|
|
15,021 |
Depreciation and amortization expense |
|
15,305 |
|
|
15,225 |
EBITDA |
|
85,462 |
|
|
83,288 |
|
|
|
|
EBITDA adjustments |
|
|
|
Stock-based incentive compensation |
|
9,605 |
|
|
5,988 |
Restructuring, acquisition, integration and other |
|
3,223 |
|
|
4,496 |
Adjusted EBITDA |
$ |
98,290 |
|
$ |
93,772 |
Option Care Health (NASDAQ:OPCH)
Historical Stock Chart
From Jul 2024 to Aug 2024
Option Care Health (NASDAQ:OPCH)
Historical Stock Chart
From Aug 2023 to Aug 2024