Option Care Health Announces Financial Results for the Second Quarter Ended June 30, 2023

BANNOCKBURN, Ill., July 27, 2023 (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, announced today financial results for the second quarter ended June 30, 2023.

Second Quarter 2023 Financial Results and Highlights

• Net revenue of $1,069.1 million, up 9.0% compared to $980.8 million in the second quarter of 2022
• Gross profit of $250.8 million, or 23.5% of net revenue, up 15.6% compared to $216.9 million, or 22.1% of net revenue, in the second quarter of 2022
• Net income of $114.4 million, or $0.64 basic earnings per share, up 237.2% compared to net income of $33.9 million, or $0.19 basic earnings per share, in the second quarter of 2022
• Adjusted EBITDA of $110.1 million, up 29.2% compared to $85.2 million in the second quarter of 2022
• Cash flow from operations of $169.5 million compared to $104.4 million in the second quarter of 2022
• Cash and cash equivalents balance was $441.2 million at the end of the second quarter of 2023
• Entered into and subsequently terminated the Merger Agreement with Amedisys, Inc. and received a payment of $106.0 million in cash on behalf of Amedisys
  
  

John C. Rademacher, Chief Executive Officer, commented, "The Option Care Health team executed on another solid quarter of financial results. Our commitment to providing unparalleled care that produces superior clinical outcomes makes us confident in our continued growth trajectory as we head into the back half of the year."

Updated Full Year 2023 Financial Guidance

For the full year 2023, Option Care Health expects to generate:

• Net Revenue of $4.2 billion to $4.3 billion
• Adjusted EBITDA of $415 million to $425 million
• Cash Flow from Operations of at least $350 million, inclusive of Amedisys termination fee, net of expenses
  
  

Additionally, the Company continues to anticipate an effective tax rate of 27% to 29% and net interest expense of approximately $55.0 million to $59.0 million.

Conference Call

Option Care Health will host a conference call to discuss its second 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 Shapiro	Bob East, Asher Dewhurst, Jordan Kohnstam
Chief Financial Officer	Westwicke
T: (312) 940-2538	T: (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. 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)

	June 30, 2023			December 31, 2022
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	441,166		$	294,186
Accounts receivable, net		396,501			377,542
Inventories		262,924			224,281
Prepaid expenses and other current assets		97,629			98,330
Total current assets		1,198,220			994,339
NONCURRENT ASSETS:
Property and equipment, net		106,777			108,321
Intangible assets, net		21,645			22,371
Referral sources, net		330,948			341,744
Goodwill		1,540,567			1,533,424
Other noncurrent assets		122,741			112,737
Total noncurrent assets		2,122,678			2,118,597
TOTAL ASSETS	$	3,320,898		$	3,112,936
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	467,666		$	378,763
Other current liabilities		200,801			186,588
Total current liabilities		668,467			565,351
NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion		1,057,391			1,058,204
Other noncurrent liabilities		119,657			103,278
Total noncurrent liabilities		1,177,048			1,161,482
Total liabilities		1,845,515			1,726,833
STOCKHOLDERS' EQUITY		1,475,383			1,386,103
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	3,320,898		$	3,112,936

Schedule 2

OPTION CARE HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED)

	Three Months Ended June 30,								Six Months Ended June 30,
		2023				2022				2023				2022
NET REVENUE	$	1,069,072			$	980,820			$	2,084,920			$	1,896,604
COST OF REVENUE		818,243				763,920				1,605,086				1,478,768
GROSS PROFIT		250,829				216,900				479,834				417,836
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses		153,564				141,787				301,430				275,756
Depreciation and amortization expense		14,898				16,037				29,412				30,759
Total operating expenses		168,462				157,824				330,842				306,515
OPERATING INCOME		82,367				59,076				148,992				111,321
OTHER INCOME (EXPENSE):
Interest expense, net		(13,196	)			(12,765	)			(27,030	)			(25,011	)
Other, net		86,332				1,327				87,770				2,596
Total other income (expense)		73,136				(11,438	)			60,740				(22,415	)
INCOME BEFORE INCOME TAXES		155,503				47,638				209,732				88,906
INCOME TAX EXPENSE		41,100				13,709				56,121				24,702
NET INCOME	$	114,403			$	33,929			$	153,611			$	64,204
Earnings per share, basic	$	0.64			$	0.19			$	0.85			$	0.36
Earnings per share, diluted	$	0.63			$	0.19			$	0.84			$	0.35
Weighted average common shares outstanding, basic		179,807				180,621				180,531				180,293
Weighted average common shares outstanding, diluted		181,241				181,618				181,931				181,176

Schedule 3

OPTION CARE HEALTH, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(IN THOUSANDS)(UNAUDITED)

	Six Months Ended June 30,
		2023				2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	153,611			$	64,204
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense		30,801				33,249
Other non-cash adjustments		38,498				44,371
Changes in operating assets and liabilities:
Accounts receivable, net		(18,619	)			(22,950	)
Inventories		(38,643	)			(48,671	)
Accounts payable		88,896				100,924
Other		4,744				(34,173	)
Net cash provided by operating activities		259,288				136,954
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment		(13,554	)			(10,055	)
Business acquisitions, net of cash acquired		(12,855	)			(59,897	)
Net cash used in investing activities		(26,409	)			(69,952	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of company stock		(75,000	)			—
Proceeds from warrant exercises		—				20,098
Other financing cash flows		(10,899	)			(2,477	)
Net cash (used in) provided by financing activities		(85,899	)			17,621
NET INCREASE IN CASH AND CASH EQUIVALENTS		146,980				84,623
Cash and cash equivalents - beginning of the period		294,186				119,423
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	441,166			$	204,046

Schedule 4

OPTION CARE HEALTH, INC.

QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES

(IN THOUSANDS)(UNAUDITED)

	Three Months Ended June 30,							Six Months Ended June 30,
	2023				2022			2023				2022
Net income	$	114,403			$	33,929		$	153,611			$	64,204
Interest expense, net		13,196				12,765			27,030				25,011
Income tax expense		41,100				13,709			56,121				24,702
Depreciation and amortization expense		15,576				17,270			30,801				33,249
EBITDA		184,275				77,673			267,563				147,166
EBITDA adjustments
Stock-based incentive compensation		7,685				4,398			13,673				8,576
Restructuring, acquisition, integration and other (1)		(81,910	)			3,105			(77,412	)			7,216
Adjusted EBITDA	$	110,050			$	85,176		$	203,824			$	162,958

(1) Inclusive of Amedisys merger termination fee, net of merger-related expenses