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Option Care Health Announces Financial Results for the First Quarter Ended March 31, 2022

BANNOCKBURN, Ill., April 28, 2022 (GLOBE NEWSWIRE) -- 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, today announced financial results for the first quarter ended March 31, 2022.

First Quarter 2022 Financial Highlights

  • Net revenue of $915.8 million, up 20.6% compared to $759.2 million in the first quarter of 2021
  • Gross profit of $200.9 million, or 21.9% of net revenue, up 21.4% compared to $165.5 million, or 21.8% of revenue, in the first quarter of 2021
  • Net income of $30.3 million, or $0.17 per share, compared to net loss of $2.9 million, or $0.02 loss per share, in the first quarter of 2021
  • Adjusted EBITDA of $77.8 million, up 48.9% compared to $52.2 million in the first quarter of 2021
  • Cash flow from operations of $32.7 million compared $18.4 million in the first quarter of 2021
  • Cash balances of $145.6 million at the end of the first quarter

John C. Rademacher, Chief Executive Officer, commented, “Despite a dynamic start to the year and ongoing pandemic disruption, the Option Care Health team executed exceptionally to ensure high quality patient care and solid financial results. Overall we expect 2022 to be a productive year as we continue to navigate a challenging environment and invest for future growth.”

Full Year 2022 Guidance

For the full year 2022, Option Care Health now expects to generate:

  • Net Revenue of $3.75 billion to $3.90 billion
  • Adjusted EBITDA of $320 million to $335 million
  • Cash Flow from Operations of at least $230 million

Conference Call

The conference call can be accessed by dialing (866) 360-3136 and referencing conference ID 5737323; or 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 7,000 teammates, including more than 4,000 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 teammates. 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
[email protected][email protected]

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, including, without limitation, statements concerning our full year 2022 guidance and our expectations regarding industry and macroeconomic trends and our operating performance. 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.

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: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; and (iv) the loss of one or more key payers. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our most recent Annual Report on Form 10-K 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, and restructuring, integration and other expenses. As part of restructuring, integration and other expenses, 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 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,
  2022   2021 
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$145,600  $119,423 
Accounts receivable, net 366,285   338,242 
Inventories 217,184   183,095 
Prepaid expenses and other current assets 76,643   69,496 
Total current assets 805,712   710,256 
    
NONCURRENT ASSETS:   
Property and equipment, net 109,066   111,535 
Intangible assets, net 20,669   21,433 
Referral sources 337,882   344,587 
Goodwill 1,478,500   1,477,564 
Other noncurrent assets 126,447   125,543 
Total noncurrent assets 2,072,564   2,080,662 
TOTAL ASSETS$2,878,276  $2,790,918 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY   
CURRENT LIABILITIES:   
Accounts payable$356,118  $279,246 
Other current liabilities 152,021   180,449 
Total current liabilities 508,139   459,695 
    
NONCURRENT LIABILITIES:   
Long-term debt, net of discount, deferred financing costs and current portion 1,059,449   1,059,900 
Other noncurrent liabilities 88,924   95,437 
Total noncurrent liabilities 1,148,373   1,155,337 
Total liabilities 1,656,512   1,615,032 
    
STOCKHOLDERS’ EQUITY 1,221,764   1,175,886 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$2,878,276  $2,790,918 



Schedule 2

OPTION CARE HEALTH, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

  
  
 Three Months Ended March 31,
  2022   2021 
NET REVENUE$915,784  $759,237 
COST OF REVENUE 714,848   593,764 
GROSS PROFIT 200,936   165,473 
    
OPERATING COSTS AND EXPENSES:   
Selling, general and administrative expenses 133,969   120,040 
Depreciation and amortization expense 14,722   16,339 
Total operating expenses 148,691   136,379 
OPERATING INCOME 52,245   29,094 
    
OTHER INCOME (EXPENSE):   
Interest expense, net (12,246)  (19,481)
Other, net 1,269   (11,196)
Total other expense (10,977)  (30,677)
    
INCOME (LOSS) BEFORE INCOME TAXES 41,268   (1,583)
INCOME TAX EXPENSE 10,993   1,278 
NET INCOME (LOSS)$30,275  $(2,861)
    
Earnings (loss) per share, basic and diluted$0.17  $(0.02)
    
Weighted average common shares outstanding, basic 179,961   179,808 
Weighted average common shares outstanding, diluted 181,681   179,808 



Schedule 3

OPTION CARE HEALTH, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

 


 
 
 Three Months Ended March 31,
  2022   2021 
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net income (loss)$30,275  $(2,861)
Adjustments to reconcile net income (loss) to net cash provided by operations:   
Depreciation and amortization expense 15,979   17,716 
Other non-cash adjustments 21,131   18,196 
Changes in operating assets and liabilities:   
Accounts receivable, net (28,766)  4,450 
Inventories (34,089)  (15,021)
Accounts payable 76,872   8,026 
Other (48,721)  (12,126)
Net cash provided by operating activities 32,681   18,380 
    
CASH FLOWS FROM INVESTING ACTIVITIES:   
Acquisition of property and equipment (5,359)  (3,123)
Net cash used in investing activities (5,359)  (3,123)
    
CASH FLOWS FROM FINANCING ACTIVITIES:   
Proceeds from debt    355,200 
Retirement of debt obligations    (352,009)
Other financing cash flows (1,145)  (8,351)
Net cash used in financing activities (1,145)  (5,160)
NET INCREASE IN CASH AND CASH EQUIVALENTS 26,177   10,097 
Cash and cash equivalents - beginning of the period 119,423   99,265 
CASH AND CASH EQUIVALENTS - END OF PERIOD$145,600  $109,362 



Schedule 4


OPTION CARE HEALTH, INC.
QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES
(IN THOUSANDS)
(UNAUDITED)

 
  
 Three Months Ended
March 31,
  2022   2021 
Consolidated net income (loss)$30,275  $(2,861)
Interest expense, net 12,246   19,481 
Income tax expense 10,993   1,278 
Depreciation and amortization expense 15,979   17,716 
Consolidated EBITDA 69,493   35,614 
    
EBITDA adjustments   
Stock-based incentive compensation 4,178   1,205 
Loss on extinguishment of debt    12,403 
Restructuring, acquisition, integration and other 4,111   3,008 
Consolidated adjusted EBITDA$77,782  $52,230