bios-20230503
FALSE000101473900010147392023-05-032023-05-03

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  
FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported)
May 3, 2023
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OPTION CARE HEALTH, INC.
(Exact name of registrant as specified in its charter)
Delaware
001-11993
05-0489664
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification Number)
 
3000 Lakeside Dr. Suite 300N, Bannockburn, IL 60015
(Address of principal executive offices)
 
(312) 940-2443
(Registrant's telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company  
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange
Act. ¨

 Securities registered pursuant to Section 12(b) of the Act:
Title of each ClassTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareOPCHNasdaq Global Select Market


















 



Item 2.02. Results of Operations and Financial Condition.

On May 3, 2023, Option Care Health, Inc. issued a press release reporting its first quarter 2023 financial results. A copy of the press release is furnished with this Form 8-K and attached hereto as Exhibit 99.1.
 
The press release includes certain non-GAAP financial measures described therein. Reconciliation between any non-GAAP financial measures presented and the most directly comparable GAAP financial measures is also provided.

The information in this Form 8-K and the Exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
 
Item 9.01. Financial Statements and Exhibits
 
(d) Exhibits
 
Exhibit No.Description
 
   
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Option Care Health, Inc.
Date:
May 3, 2023
By:/s/ Michael Shapiro
Michael Shapiro
Chief Financial Officer

Document

 
Exhibit 99.1
 
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OPTION CARE HEALTH ANNOUNCES FINANCIAL RESULTS FOR THE FIRST QUARTER ENDED MARCH 31, 2023
BANNOCKBURN, IL., May 3, 2023 - 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, 2023.
First Quarter 2023 Financial Results and Highlights
Net revenue of $1,015.8 million, up 10.9% compared to $915.8 million in the first quarter of 2022
Gross profit of $229.0 million, or 22.5% of net revenue, up 14.0% compared to $200.9 million, or 21.9% of net revenue, in the first quarter of 2022
Net income of $39.2 million, or $0.22 basic earnings per share, up 29.5% compared to net income of $30.3 million, or $0.17 basics earnings per share, in the first quarter of 2022
Adjusted EBITDA of $93.8 million, up 20.6% compared to $77.8 million in the first quarter of 2022
Cash flow from operations of $89.8 million compared to $32.7 million in the first quarter of 2022
Cash and cash equivalents balance was $297.8 million at the end of the first quarter of 2023
Completed stock repurchase of approximately $75.0 million
Launched Naven Health, the national infusion nursing platform founded in the acquisitions of Infinity Infusion Nursing and Specialty Pharmacy Nursing Network
Received the 2023 Gallup Exceptional Workplace Award

John C. Rademacher, Chief Executive Officer, commented, “The Option Care Health team's commitment to providing extraordinary patient care in the post-acute and ambulatory setting delivered another quarter of strong financial results. As we look to the balance of the year, our focus is on continuing to execute on our mission to transform healthcare by providing innovative services that improve outcomes, reduce costs and deliver hope for patients and their families.”

Mike Shapiro, Chief Financial Officer, commented, “We are very pleased with the results we delivered in the first quarter. Based on this momentum, we are increasing our earnings outlook for the full year."

Mr. Shapiro continued, "Acute revenue continued to perform well this quarter as we build upon our reputation as a trusted and dependable partner to health systems. Our stable chronic patient census and double digit chronic revenue growth also contributed to outperformance in a quarter that is typically lower in consolidated revenue. In addition, we drove considerable clinical labor leverage as a result of efficient utilization of our infusion suite network, in which approximately 26% of our nursing visits occurred in the quarter. Moreover, our procurement strategies and disciplined cost management enabled us to expand Adjusted EBITDA margins to over nine percent in the quarter.”





Updated Full Year 2023 Financial Guidance
For the full year 2023, Option Care Health expects to generate:
Net Revenue of $4.15 billion to $4.375 billion
Adjusted EBITDA of $380 million to $395 million
Cash Flow from Operations of at least $240 million

Additionally, the Company continues to anticipate an effective tax rate of 27% - 29% and net interest expense of approximately $61.0 million to $65.0 million.

The foregoing full year 2023 financial guidance excludes the impact of the Company's pending combination with Amedisys, Inc. ("Amedisys").

Conference Call
In a separate press release issued today, Option Care Health announced it has entered into a definitive agreement to combine with Amedisys, a leading provider of healthcare in the home.
Option Care Health and Amedisys will host an investor conference call today at 5:30 p.m. EDT to discuss the details of the transaction. Details for such call are available in the separate press release issued today. In light of the transaction announcement, we will forego our previously scheduled first quarter of fiscal 2023 earnings conference call.

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 ShapiroBob East, Asher Dewhurst, Jordan Kohnstam
Chief Financial OfficerWestwicke
T: (312) 940-2538T: (413) 213-0500
mike.shapiro@optioncare.comoptioncarehealth@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,December 31,
20232022
ASSETS
CURRENT ASSETS:
   Cash and cash equivalents$297,776 $294,186 
   Accounts receivable, net
395,209 377,542 
   Inventories249,643 224,281 
   Prepaid expenses and other current assets86,908 98,330 
Total current assets1,029,536 994,339 
NONCURRENT ASSETS:
   Property and equipment, net
105,571 108,321 
   Intangible assets, net21,677 22,371 
   Referral sources, net334,001 341,744 
   Goodwill1,533,569 1,533,424 
   Other noncurrent assets106,048 112,737 
Total noncurrent assets2,100,866 2,118,597 
TOTAL ASSETS $3,130,402 $3,112,936 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$448,890 $378,763 
Other current liabilities169,676 186,588 
Total current liabilities618,566 565,351 
NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion1,057,787 1,058,204 
Other noncurrent liabilities103,830 103,278 
Total noncurrent liabilities1,161,617 1,161,482 
Total liabilities1,780,183 1,726,833 
STOCKHOLDERS’ EQUITY1,350,219 1,386,103 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,130,402 $3,112,936 




Schedule 2

OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED)
 
Three Months Ended March 31,
20232022
NET REVENUE$1,015,848 $915,784 
COST OF REVENUE786,843 714,848 
GROSS PROFIT229,005 200,936 
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses147,866 133,969 
Depreciation and amortization expense14,514 14,722 
Total operating expenses162,380 148,691 
OPERATING INCOME66,625 52,245 
OTHER INCOME (EXPENSE):
Interest expense, net(13,834)(12,246)
Other, net1,438 1,269 
Total other expense(12,396)(10,977)
INCOME BEFORE INCOME TAXES54,229 41,268 
INCOME TAX EXPENSE15,021 10,993 
NET INCOME$39,208 $30,275 
Earnings per share, basic$0.22 $0.17 
Earnings per share, diluted$0.21 $0.17 
Weighted average common shares outstanding, basic181,262 179,961 
Weighted average common shares outstanding, diluted182,735 181,681 



Schedule 3

OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)(UNAUDITED)
 
Three Months Ended March 31,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$39,208 $30,275 
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense15,225 15,979 
Other non-cash adjustments22,498 21,131 
Changes in operating assets and liabilities:
Accounts receivable, net(17,812)(28,766)
Inventories(25,362)(34,089)
Accounts payable70,127 76,872 
Other(14,132)(48,721)
Net cash provided by operating activities89,752 32,681 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment(5,760)(5,359)
Net cash used in investing activities(5,760)(5,359)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of company stock(75,000)— 
Other financing cash flows(5,402)(1,145)
Net cash used in financing activities(80,402)(1,145)
NET INCREASE IN CASH AND CASH EQUIVALENTS3,590 26,177 
Cash and cash equivalents - beginning of the period294,186 119,423 
CASH AND CASH EQUIVALENTS - END OF PERIOD$297,776 $145,600 




Schedule 4
OPTION CARE HEALTH, INC.
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(IN THOUSANDS)(UNAUDITED)
Three Months Ended March 31,
20232022
Net income$39,208 $30,275 
Interest expense, net13,834 12,246 
Income tax expense15,021 10,993 
Depreciation and amortization expense15,225 15,979 
EBITDA83,288 69,493 
EBITDA adjustments
Stock-based incentive compensation5,988 4,178 
Restructuring, acquisition, integration and other4,496 4,111 
Adjusted EBITDA$93,772 $77,782