bios-20231025
FALSE000101473900010147392023-10-252023-10-25

 
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)
October 25, 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 October 25, 2023, Option Care Health, Inc. issued a press release reporting its third 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:
October 25, 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 THIRD QUARTER ENDED SEPTEMBER 30, 2023
BANNOCKBURN, IL., October 25, 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 third quarter ended September 30, 2023.
Third Quarter 2023 Financial Results and Highlights
Net revenue of $1,093.0 million, up 7.1% compared to $1,020.9 million in the third quarter of 2022
Gross profit of $254.3 million, or 23.3% of net revenue, up 16.6% compared to $218.0 million, or 21.4% of net revenue, in the third quarter of 2022
Net income of $56.3 million, or $0.31 basic earnings per share, up 45.0% compared to net income of $38.8 million, or $0.21 basic earnings per share, in the third quarter of 2022
Adjusted EBITDA of $109.8 million, up 28.2% compared to $85.6 million in the third quarter of 2022
Cash flow from operations of $61.0 million compared to $87.0 million in the third quarter of 2022
Cash and cash equivalents balance was $386.5 million at the end of the third quarter of 2023

John C. Rademacher, Chief Executive Officer, commented, “The Option Care Health team continues to execute on outstanding clinical outcomes and extraordinary patient care, which helped translate into solid financial results in the third quarter. I am excited to build on this momentum as we close out the year and look forward to seeing the impact we believe the team will make in the post-acute and ambulatory setting in the years to come.”

Updated Full Year 2023 Financial Guidance
For the full year 2023, Option Care Health expects to generate:
Net revenue of $4.23 billion to $4.28 billion
Adjusted EBITDA of $420 million to $425 million
Cash flow from operations of at least $350 million, inclusive of the Amedisys merger termination fee net of merger-related expenses
Additionally, the Company anticipates an effective tax rate of approximately 27% and net interest expense of approximately $52.0 million to $54.0 million.






Conference Call
Option Care Health will host a conference call to discuss its third quarter 2023 financial results later today at 8:30 a.m. EDT. 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 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 periodic 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)
September 30, 2023December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$386,489 $294,186 
Accounts receivable, net382,957 377,542 
Inventories251,366 224,281 
Prepaid expenses and other current assets95,473 98,330 
Total current assets1,116,285 994,339 
NONCURRENT ASSETS:
Property and equipment, net107,960 108,321 
Intangible assets, net20,868 22,371 
Referral sources, net323,126 341,744 
Goodwill1,540,246 1,533,424 
Other noncurrent assets135,131 112,737 
Total noncurrent assets2,127,331 2,118,597 
TOTAL ASSETS $3,243,616 $3,112,936 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$429,536 $378,763 
Other current liabilities194,548 186,588 
Total current liabilities624,084 565,351 
NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion1,057,016 1,058,204 
Other noncurrent liabilities122,433 103,278 
Total noncurrent liabilities1,179,449 1,161,482 
Total liabilities1,803,533 1,726,833 
STOCKHOLDERS’ EQUITY1,440,083 1,386,103 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,243,616 $3,112,936 




Schedule 2

OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
NET REVENUE$1,093,014 $1,020,918 $3,177,934 $2,917,522 
COST OF REVENUE838,748 802,917 2,443,834 2,281,685 
GROSS PROFIT254,266 218,001 734,100 635,837 
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses158,214 142,015 459,644 417,771 
Depreciation and amortization expense15,005 15,268 44,417 46,027 
Total operating expenses173,219 157,283 504,061 463,798 
OPERATING INCOME81,047 60,718 230,039 172,039 
OTHER INCOME (EXPENSE):
Interest expense, net(11,786)(13,997)(38,816)(39,008)
Other, net824 5,360 88,594 7,956 
Total other (expense) income(10,962)(8,637)49,778 (31,052)
INCOME BEFORE INCOME TAXES70,085 52,081 279,817 140,987 
INCOME TAX EXPENSE13,783 13,258 69,904 37,960 
NET INCOME$56,302 $38,823 $209,913 $103,027 
Earnings per share, basic$0.31 $0.21 $1.17 $0.57 
Earnings per share, diluted$0.31 $0.21 $1.16 $0.57 
Weighted average common shares outstanding, basic178,826 181,884 179,956 180,829 
Weighted average common shares outstanding, diluted180,528 183,022 181,286 181,760 



Schedule 3

OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)(UNAUDITED)
Nine Months Ended September 30,
20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$209,913 $103,027 
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense46,423 49,723 
Other non-cash adjustments54,259 66,999 
Changes in operating assets and liabilities:
Accounts receivable, net(5,075)(23,153)
Inventories(28,362)(52,749)
Accounts payable50,726 129,859 
Other(7,558)(49,614)
Net cash provided by operating activities320,326 224,092 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment(21,981)(17,111)
Business acquisitions, net of cash acquired(12,855)(87,315)
Other investing activities(5,889)— 
Net cash used in investing activities(40,725)(104,426)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of company stock(175,108)— 
Proceeds from warrant exercises— 20,916 
Other financing cash flows(12,190)(4,537)
Net cash (used in) provided by financing activities(187,298)16,379 
NET INCREASE IN CASH AND CASH EQUIVALENTS92,303 136,045 
Cash and cash equivalents - beginning of the period294,186 119,423 
CASH AND CASH EQUIVALENTS - END OF PERIOD$386,489 $255,468 




Schedule 4
OPTION CARE HEALTH, INC.
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(IN THOUSANDS)(UNAUDITED)
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Net income$56,302 $38,823 $209,913 $103,027 
Interest expense, net11,786 13,997 38,816 39,008 
Income tax expense13,783 13,258 69,904 37,960 
Depreciation and amortization expense15,622 16,474 46,423 49,723 
EBITDA97,493 82,552 365,056 229,718 
EBITDA adjustments
Stock-based incentive compensation9,235 4,005 22,908 12,581 
Restructuring, acquisition, integration and other (1)3,029 (934)(74,383)6,282 
Adjusted EBITDA$109,757 $85,623 $313,581 $248,581 

(1) Restructuring, acquisition, integration and other for the nine months ended September 30, 2023 includes the Amedisys merger termination fee, net of merger-related expenses