BrightSpring Health Services, Inc. (“BrightSpring” or the
“Company”) (NASDAQ: BTSG), a leading provider of home and
community-based health services for complex populations, today
announced financial results for the second quarter ended June 30,
2024, and increases 2024 revenue and Adjusted EBITDA1 guidance.
Financial Highlights
- Net Revenue of $2,730 million, up 26.0% compared to $2,167
million in the second quarter of 2023.
- Net income of $19.4 million, compared to net income of $2.8
million in the second quarter of 2023.
- Adjusted EBITDA1 of $139 million, down 6.9% versus $149 million
in the second quarter of 2023
- When excluding a certain $30 million Quality Incentive Payment
in 2023, Adjusted EBITDA1 was up 16.7% compared to $119 million in
the second quarter of 2023. This certain vendor Quality Incentive
Payment (QIP) program has reached its conclusion, as previously
disclosed.
- Increased 2024 Revenue and Adjusted EBITDA Guidance:
- Revenue: $10,450 - $10,900 million
- Adjusted EBITDA1: $570 - $580 million
“We are very pleased to report another quarter
of strong revenue and earnings growth across both segments,” said
Jon Rousseau, Chairman, President and Chief Executive Officer of
the Company. “Our Pharmacy Solutions business delivered impressive
growth, while our Provider Services business saw margin expansion
and revenue growth afforded by our operational excellence, scale,
and efficiencies. We remain very confident in our ability execute
on driving the most compassionate, low-cost, and efficient care
right to our patients, and believe that BrightSpring remains in a
great position for the remainder of the year and as we enter
2025.”
Second Quarter 2024 Financial
Results
Net revenue of $2,730 million, up 26.0% compared
to $2,167 million in the second quarter of 2023. Net revenue growth
was driven by broad-based strength across both segments, with
particular strength in Specialty and Infusion Pharmacy.
Gross profit of $389 million, up 4.6% compared
to $372 million in the second quarter of 2023. Excluding a certain
$30 million receipt of QIP in 2023, gross profit growth rate was
13.8%.
Net income of $19.4 million, compared to net
income of $2.8 million in the second quarter of 2023.
Adjusted EBITDA1 of $139 million, down 6.9%
compared to $149 million in the second quarter of 2023.
- When excluding a certain $30
million Quality Incentive Payment in 2023, Adjusted EBITDA1 was up
16.7% compared to $119 million in the second quarter of 2023. This
certain vendor Quality Incentive Payment program has reached its
conclusion, as previously disclosed.
1Adjusted EBITDA is a non-GAAP financial measure. Please see
“Non-GAAP Financial Information” and the end of this press release
for a reconciliation of Adjusted EBITDA to net income (loss), the
most directly comparable financial measure prepared in accordance
with GAAP.
Key Financials:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
June 30, (Unaudited) |
|
|
|
|
|
2024 |
|
|
2023 |
|
|
% |
|
($ in millions) |
|
|
|
|
|
|
|
|
|
Pharmacy Solutions Revenue |
|
$ |
2,114 |
|
|
$ |
1,597 |
|
|
32 |
% |
|
Provider Services Revenue |
|
|
616 |
|
|
|
570 |
|
|
8 |
% |
|
Total
Revenue |
|
$ |
2,730 |
|
|
$ |
2,167 |
|
|
26 |
% |
|
|
|
Three Months Ended |
|
|
|
|
|
June 30, (Unaudited) |
|
|
|
|
|
2024 |
|
|
2023 |
|
|
% |
|
($ in millions) |
|
|
|
|
|
|
|
|
|
Pharmacy Solutions segment
EBITDA |
|
$ |
94 |
|
|
$ |
110 |
|
|
(14 |
%) |
|
Provider Services segment
EBITDA |
|
|
86 |
|
|
|
74 |
|
|
16 |
% |
|
Total Segment Adjusted
EBITDA |
|
$ |
180 |
|
|
$ |
184 |
|
|
(2 |
%) |
|
Corporate Costs |
|
|
(41 |
) |
|
|
(35 |
) |
|
- |
|
|
Total Company Adjusted
EBITDA |
|
$ |
139 |
|
|
$ |
149 |
|
|
(7 |
%) |
|
Full Year 2024 Financial
Guidance
For the full year 2024, BrightSpring is
increasing guidance, which excludes the effects of any future
closed acquisitions.
- Net revenue of $10,450 million to
$10,900 million, or 18.4% to 23.5% growth over 2023
- Pharmacy Segment Revenue of $8,000
million to $8,400 million, or 22.7% to 28.8% growth over full year
2023
- Provider Segment Revenue of $2,450
million to $2,500 million, or 6.3% to 8.5% growth over full year
2023
- Adjusted EBITDA2 of $570 million to
$580 million, or 12.2% to 14.2% growth over full year 2023,
excluding the impact from a certain QIP in 2023
A copy of the Company’s second quarter earnings
presentation is available on the company’s investor relations
website, https://ir.brightspringhealth.com/
2 A reconciliation of the foregoing guidance for
the non-GAAP metric of Adjusted EBITDA to GAAP net (loss) income
cannot be provided without unreasonable effort because of the
inherent difficulty of accurately forecasting the occurrence and
financial impact of the various adjusting items necessary for such
reconciliation that have not yet occurred, are out of our control,
or cannot be reasonably predicted. For the same reasons, the
Company is unable to assess the probable significance of the
unavailable information, which could have a material impact on its
future GAAP financial results.
Webcast and Conference Call
Details
BrightSpring will host a conference call today,
August 2, 2024, at 8:30 a.m. Eastern Time. Investors interested in
listening to the conference call are required to register
online.
A live and archived webcast of the event will be
available on the “Events & Presentations” section of the
BrightSpring website at https://ir.brightspringhealth.com/. The
Company has posted supplemental financial information on the second
quarter results that it will reference during the conference call.
The supplemental information can be found under the “Events &
Presentations” on the Company’s investor relations page.
About BrightSpring Health
Services
BrightSpring Health Services is the parent
company of leading healthcare service lines that provide
complementary home- and community-based pharmacy and provider
health solutions for complex populations in need of specialized
and/or chronic care. Through the Company’s high-quality and
impactful pharmacy, primary care and home health care, and
rehabilitation and behavioral health services, and through its
skilled and dedicated employees, we provide comprehensive care and
clinical solutions in all 50 states to over 400,000 customers,
clients and patients daily. For more information,
visit www.brightspringhealth.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of
1995. These forward-looking statements reflect our current views
with respect to, among other things, our operations and financial
performance. Forward-looking statements include all statements that
are not historical facts. These forward-looking statements may
relate to matters which include, but are not limited to,
industries, business strategy, goals and expectations concerning
our market position, future operations, margins, profitability,
capital expenditures, liquidity and capital resources and other
financial and operating information. In some cases, we have used
words such as “anticipate,” “assume,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intend,” “may,” “plan,”
“potential,” “predict,” “project,” “future,” “will,” “seek,”
“foreseeable,” “target,” “guidance,” the negative version of these
words, or similar terms and phrases to identify these
forward-looking statements.
The forward-looking statements are based on management’s current
expectations and are not historical facts or guarantees of future
performance. The forward-looking statements relate to the future
and are therefore subject to various risks, uncertainties,
assumptions, or changes in circumstances that are difficult to
predict or quantify. Our expectations, beliefs, and projections are
expressed in good faith and we believe there is a reasonable basis
for them. However, there can be no assurance that management’s
expectations, beliefs, and projections will result or be achieved.
Actual results may differ materially from these expectations due to
changes in global, regional, or local economic, business,
competitive, market, regulatory, and other factors, many of which
are beyond our control. We believe that these factors include but
are not limited to the following:
- our operation in a highly competitive industry;
- our inability to maintain relationships with existing patient
referral sources or establish new referral sources;
- changes to Medicare and Medicaid rates or methods governing
Medicare and Medicaid payments for our services;
- cost containment initiatives of third-party payors, including
post-payment audits;
- the implementation of alternative payment models and the
transition of Medicaid and Medicare beneficiaries to managed care
organizations may limit our market share and could adversely affect
our revenues;
- changes in the case mix of patients, as well as payor mix and
payment methodologies, and decisions and operations of third-party
organizations;
- our reliance on federal and state spending, budget decisions,
and continuous governmental operations which may fluctuate under
different political conditions;
- changes in drug utilization and/or pricing, PBM contracts, and
Medicare Part D/Medicaid reimbursement, which may negatively impact
our profitability;
- changes in our relationships with pharmaceutical suppliers,
including changes in drug availability or pricing;
- reliance on the continual recruitment and retention of nurses,
pharmacists, therapists, caregivers, direct support professionals,
and other qualified personnel, including senior management;
- compliance with or changes to federal, state, and local laws
and regulations that govern our employment practices, including
minimum wage, living wage, and paid time-off requirements;
- fluctuation of our results of operations on a quarterly
basis;
- harm caused by labor relation matters;
- limitations in our ability to control reimbursement rates
received for our services if we are unable to maintain or reduce
our costs to provide such services;
- delays in collection or non-collection of our accounts
receivable, particularly during the business integration
process;
- failure to manage our growth effectively, which may inhibit our
ability to execute our business plan, maintain high levels of
service and satisfaction or adequately address competitive
challenges;
- our ability to identify, successfully complete and manage
acquisitions, joint ventures, and other strategic initiatives;
- our ability to continue to provide consistently high quality of
care;
- maintenance of our corporate reputation or the emergence of
adverse publicity, including negative information on social media
or changes in public perception of our services;
- contract continuance, expansion and renewal with our existing
customers, including renewals at lower fee levels, customers
declining to purchase additional services from us, or reduction in
the services received from us pursuant to those contracts;
- effective investment in, implementation of improvements to and
proper maintenance of the uninterrupted operation and data
integrity of our information technology and other business
systems;
- security breaches, loss of data, and other disruptions, which
could compromise sensitive business or patient information; cause a
loss of confidential patient data, employee data or personal
information; or prevent access to critical information and thereby
expose us to liability, litigation, and federal and state
governmental inquiries and damage our reputation and brand;
- risks related to credit card payments and other payment methods
including adverse impacts from the cyber attack of Change
Healthcare, one of the largest providers of healthcare payment
systems in the United States;
- potential substantial malpractice or other similar claims;
- various risks related to governmental inquiries, regulatory
actions, and whistleblower and other lawsuits, which may not be
entirely covered by insurance;
- our current insurance program, which may expose us to
unexpected costs, particularly if we incur losses not covered by
our insurance or if claims or losses differ from our
estimates;
- factors outside of our control, including those listed, which
have required and could in the future require us to record an asset
impairment of goodwill;
- a pandemic, epidemic, or outbreak of an infectious disease,
including the ongoing effects of COVID-19;
- inclement weather, natural disasters, acts of terrorism, riots,
civil insurrection or social unrest, looting, protests, strikes, or
street demonstrations;
- our inability to adequately protect our intellectual property
rights
The forward-looking statements included in this press release
are made only as of the date of this press release, and we
undertake no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments, or otherwise, except as required by law. These
factors should not be construed as exhaustive, and should one or
more of these risks or uncertainties materialize, or should any of
our assumptions prove incorrect, our actual results may vary in
material respects from those projected in these forward-looking
statements. Factors or events that could cause our actual results
to differ may emerge from time to time, and it is not possible for
us to predict all of them. We may not actually achieve the plans,
intentions, or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our
forward-looking statements. Our forward- looking statements do not
reflect the potential impact of any future acquisitions, mergers,
dispositions, joint ventures, investments, or other strategic
transactions we may make.
For additional information on these and other factors that could
cause BrightSpring’s actual results to differ materially from
expected results, please see our filings with the Securities and
Exchange Commission (the “SEC”), which are accessible on the SEC’s
website at www.sec.gov.
Non-GAAP Financial Measures
This press release contains “non-GAAP financial measures,”
including “EBITDA” and “Adjusted EBITDA,” which are financial
measures that either exclude or include amounts that are not
excluded or included in the most directly comparable measures
calculated and presented in accordance with accounting principles
generally accepted in the United States, or GAAP.
EBITDA and Adjusted EBITDA have been presented in this release
as supplemental measures of financial performance that are not
required by, or presented in accordance with, GAAP, because we
believe they assist investors and analysts in comparing our
operating performance across reporting periods on a consistent
basis by excluding items that we do not believe are indicative of
our core operating performance. Management also believes that these
measures are useful to investors in highlighting trends in our
operating performance, while other measures can differ
significantly depending on long-term strategic decisions regarding
capital structure, the tax jurisdictions in which we operate and
capital investments. Management uses EBITDA and Adjusted EBITDA to
supplement GAAP measures of performance in the evaluation of the
effectiveness of our business strategies, to make budgeting
decisions, to establish and award discretionary annual incentive
compensation, and to compare our performance against that of other
peer companies using similar measures.
Management supplements GAAP results with non-GAAP financial
measures to provide a more complete understanding of the factors
and trends affecting the business than GAAP results alone. EBITDA
and Adjusted EBITDA are not GAAP measures of our financial
performance and should not be considered as an alternative to net
income (loss) as a measure of financial performance or any other
performance measures derived in accordance with GAAP. Additionally,
these measures are not intended to be a measure of free cash flow
available for management’s discretionary use as they do not
consider certain cash requirements such as tax payments, debt
service requirements, total capital expenditures, and certain other
cash costs that may recur in the future.
Management defines EBITDA as net income (loss) before income tax
benefit, interest expense, and depreciation and amortization.
Management also defines Adjusted EBITDA as EBITDA, further adjusted
to exclude non-cash share-based compensation, acquisition,
integration and transaction-related costs, restructuring and
divestiture-related and other costs, goodwill impairment, legal
costs associated with certain historical matters for PharMerica and
settlement costs, significant projects, management fees, and
unreimbursed COVID-19 related costs.
The presentations of these measures have limitations as
analytical tools and should not be considered in isolation, or as a
substitute for analysis of our results as reported under GAAP.
Because not all companies use identical calculations, the
presentations of these measures may not be comparable to other
similarly titled measures of other companies and can differ
significantly from company to company. Please see the end of this
press release for reconciliations of non-GAAP financial measures to
the most directly comparable financial measure prepared in
accordance with GAAP.
BrightSpring Contact:
Investor Relations:David Deuchler, CFAGilmartin
Group LLCir@brightspringhealth.com
Media Contact:Leigh
Whiteleigh.white@brightspringhealth.com502.630.7412
BrightSpring Health Services, Inc. and
SubsidiariesCondensed Consolidated Balance
SheetsJune 30, 2024 and December 31,
2023(In thousands, except share and per share
data)(Unaudited) |
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
|
|
(unaudited) |
|
|
|
|
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
25,027 |
|
|
$ |
13,071 |
|
Accounts receivable, net of allowance for credit losses |
|
|
984,758 |
|
|
|
881,627 |
|
Inventories |
|
|
374,289 |
|
|
|
402,776 |
|
Prepaid expenses and other current assets |
|
|
137,805 |
|
|
|
159,167 |
|
Total current assets |
|
|
1,521,879 |
|
|
|
1,456,641 |
|
Property and equipment, net of
accumulated depreciation of $406,233 and $368,089 atJune 30, 2024
and December 31, 2023, respectively |
|
|
245,569 |
|
|
|
245,908 |
|
Goodwill |
|
|
2,626,353 |
|
|
|
2,608,412 |
|
Intangible assets, net of
accumulated amortization |
|
|
851,297 |
|
|
|
881,476 |
|
Operating lease right-of-use
assets, net |
|
|
258,647 |
|
|
|
267,446 |
|
Deferred income taxes, net |
|
|
22,000 |
|
|
|
— |
|
Other assets |
|
|
79,336 |
|
|
|
72,838 |
|
Total assets |
|
$ |
5,605,081 |
|
|
$ |
5,532,721 |
|
Liabilities, Redeemable
Noncontrolling Interests, and Equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Trade accounts payable |
|
$ |
669,401 |
|
|
$ |
641,607 |
|
Accrued expenses |
|
|
346,740 |
|
|
|
492,363 |
|
Current portion of obligations under operating leases |
|
|
68,253 |
|
|
|
71,053 |
|
Current portion of obligations under financing leases |
|
|
11,972 |
|
|
|
11,141 |
|
Current portion of long-term debt |
|
|
48,670 |
|
|
|
32,273 |
|
Total current liabilities |
|
|
1,145,036 |
|
|
|
1,248,437 |
|
Obligations under operating
leases, net of current portion |
|
|
195,507 |
|
|
|
201,655 |
|
Obligations under financing
leases, net of current portion |
|
|
24,160 |
|
|
|
22,528 |
|
Long-term debt, net of current
portion |
|
|
2,563,536 |
|
|
|
3,331,941 |
|
Deferred income taxes, net |
|
|
— |
|
|
|
23,668 |
|
Long-term liabilities |
|
|
70,973 |
|
|
|
91,943 |
|
Total liabilities |
|
|
3,999,212 |
|
|
|
4,920,172 |
|
Redeemable noncontrolling
interests |
|
|
5,936 |
|
|
|
27,139 |
|
Shareholders'
equity: |
|
|
|
|
|
|
Common stock, $0.01 par value, 1,500,000,000 and 137,398,625 shares
authorized,171,397,030 and 117,857,055 shares issued and
outstanding at June 30, 2024 andDecember 31, 2023,
respectively |
|
|
1,714 |
|
|
|
1,179 |
|
Preferred stock, $0.01 par value, 250,000,000 authorized, no shares
issued andoutstanding at June 30, 2024; no shares authorized,
issued or outstanding atDecember 31, 2023 |
|
|
— |
|
|
|
— |
|
Additional paid-in capital |
|
|
1,804,965 |
|
|
|
771,336 |
|
Accumulated deficit |
|
|
(226,150 |
) |
|
|
(200,319 |
) |
Accumulated other comprehensive income |
|
|
19,025 |
|
|
|
12,544 |
|
Total shareholders' equity |
|
|
1,599,554 |
|
|
|
584,740 |
|
Noncontrolling interest |
|
|
379 |
|
|
|
670 |
|
Total equity |
|
|
1,599,933 |
|
|
|
585,410 |
|
Total liabilities, redeemable noncontrolling interests, and
equity |
|
$ |
5,605,081 |
|
|
$ |
5,532,721 |
|
BrightSpring Health Services, Inc. and
SubsidiariesCondensed Consolidated Statements of
OperationsFor the three months and six months
ended June 30, 2024 and 2023(In thousands, except per
share amounts) (Unaudited) |
|
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
Products |
|
$ |
2,114,491 |
|
|
$ |
1,596,839 |
|
|
$ |
4,091,526 |
|
|
$ |
3,063,841 |
|
Services |
|
|
615,719 |
|
|
|
569,885 |
|
|
|
1,215,322 |
|
|
|
1,131,261 |
|
Total revenues |
|
|
2,730,210 |
|
|
|
2,166,724 |
|
|
|
5,306,848 |
|
|
|
4,195,102 |
|
Cost of goods |
|
|
1,931,760 |
|
|
|
1,409,249 |
|
|
|
3,738,860 |
|
|
|
2,716,230 |
|
Cost of services |
|
|
409,417 |
|
|
|
385,405 |
|
|
|
809,564 |
|
|
|
772,089 |
|
Gross profit |
|
|
389,033 |
|
|
|
372,070 |
|
|
|
758,424 |
|
|
|
706,783 |
|
Selling, general, and
administrative expenses |
|
|
326,619 |
|
|
|
292,454 |
|
|
|
687,943 |
|
|
|
575,612 |
|
Operating income |
|
|
62,414 |
|
|
|
79,616 |
|
|
|
70,481 |
|
|
|
131,171 |
|
Loss on extinguishment of
debt |
|
|
— |
|
|
|
— |
|
|
|
12,726 |
|
|
|
— |
|
Interest expense, net |
|
|
52,439 |
|
|
|
79,684 |
|
|
|
117,459 |
|
|
|
157,861 |
|
Income (loss) before income
taxes |
|
|
9,975 |
|
|
|
(68 |
) |
|
|
(59,704 |
) |
|
|
(26,690 |
) |
Income tax benefit |
|
|
(9,466 |
) |
|
|
(2,834 |
) |
|
|
(32,760 |
) |
|
|
(7,180 |
) |
Net income (loss) |
|
|
19,441 |
|
|
|
2,766 |
|
|
|
(26,944 |
) |
|
|
(19,510 |
) |
Net loss attributable to
noncontrolling interests |
|
|
(478 |
) |
|
|
(1,222 |
) |
|
|
(1,113 |
) |
|
|
(2,116 |
) |
Net income (loss) attributable to
BrightSpring Health Services,Inc. and subsidiaries |
|
$ |
19,919 |
|
|
$ |
3,988 |
|
|
$ |
(25,831 |
) |
|
$ |
(17,394 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per common
share: |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) per share -
basic |
|
$ |
0.10 |
|
|
$ |
0.03 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
Income (loss) per share -
diluted |
|
$ |
0.10 |
|
|
$ |
0.03 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
197,515 |
|
|
|
117,883 |
|
|
|
186,523 |
|
|
|
117,875 |
|
Diluted |
|
|
208,987 |
|
|
|
126,449 |
|
|
|
186,523 |
|
|
|
117,875 |
|
BrightSpring Health Services, Inc. and
SubsidiariesCondensed Consolidated Statements of
Cash Flows For the three months and six months
ended June 30, 2024 and 2023(In thousands)(Unaudited) |
|
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Operating
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
19,441 |
|
|
$ |
2,766 |
|
|
$ |
(26,944 |
) |
|
$ |
(19,510 |
) |
Adjustments to reconcile net income (loss) to cash (used
in)provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
50,071 |
|
|
|
50,205 |
|
|
|
98,993 |
|
|
|
100,550 |
|
Impairment of long-lived assets |
|
|
211 |
|
|
|
3,905 |
|
|
|
1,980 |
|
|
|
6,114 |
|
Provision for credit losses |
|
|
6,496 |
|
|
|
5,958 |
|
|
|
13,118 |
|
|
|
12,174 |
|
Amortization of deferred debt issuance costs |
|
|
2,490 |
|
|
|
5,312 |
|
|
|
6,937 |
|
|
|
10,509 |
|
Share-based compensation |
|
|
15,136 |
|
|
|
825 |
|
|
|
39,984 |
|
|
|
1,275 |
|
Deferred income taxes, net |
|
|
(17,528 |
) |
|
|
(12,434 |
) |
|
|
(49,260 |
) |
|
|
(25,755 |
) |
Loss on extinguishment of debt |
|
|
— |
|
|
|
— |
|
|
|
12,726 |
|
|
|
— |
|
(Gain) loss on disposition of fixed assets |
|
|
(98 |
) |
|
|
(19 |
) |
|
|
24 |
|
|
|
519 |
|
Other |
|
|
(1,126 |
) |
|
|
(235 |
) |
|
|
(1,438 |
) |
|
|
372 |
|
Change in operating assets and liabilities, net of acquisitions and
dispositions: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
3,054 |
|
|
|
(51,367 |
) |
|
|
(112,522 |
) |
|
|
(105,402 |
) |
Prepaid expenses and other current assets |
|
|
12,821 |
|
|
|
(8,966 |
) |
|
|
21,737 |
|
|
|
22,110 |
|
Inventories |
|
|
(765 |
) |
|
|
(32,505 |
) |
|
|
29,720 |
|
|
|
36,708 |
|
Trade accounts payable |
|
|
19,724 |
|
|
|
(22,700 |
) |
|
|
41,329 |
|
|
|
(89,666 |
) |
Accrued expenses |
|
|
(110,462 |
) |
|
|
35,711 |
|
|
|
(153,892 |
) |
|
|
69,682 |
|
Other assets and liabilities |
|
|
(14,690 |
) |
|
|
(1,660 |
) |
|
|
(16,576 |
) |
|
|
(4,988 |
) |
Net cash (used in) provided by operating activities |
|
$ |
(15,225 |
) |
|
$ |
(25,204 |
) |
|
$ |
(94,084 |
) |
|
$ |
14,692 |
|
Investing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
$ |
(23,743 |
) |
|
$ |
(20,948 |
) |
|
$ |
(45,559 |
) |
|
$ |
(38,794 |
) |
Acquisitions of businesses, net of cash acquired |
|
|
(34,217 |
) |
|
|
(25,464 |
) |
|
|
(43,611 |
) |
|
|
(25,464 |
) |
Other |
|
|
268 |
|
|
|
1,111 |
|
|
|
540 |
|
|
|
1,494 |
|
Net cash used in investing activities |
|
$ |
(57,692 |
) |
|
$ |
(45,301 |
) |
|
$ |
(88,630 |
) |
|
$ |
(62,764 |
) |
Financing
activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt borrowings |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,566,000 |
|
|
$ |
— |
|
Long-term debt repayments |
|
|
(11,617 |
) |
|
|
(7,536 |
) |
|
|
(3,370,970 |
) |
|
|
(15,321 |
) |
Proceeds from issuance of common stock on initial public offering,
net |
|
|
— |
|
|
|
— |
|
|
|
656,485 |
|
|
|
— |
|
Proceeds from issuance of tangible equity units, net |
|
|
— |
|
|
|
— |
|
|
|
389,000 |
|
|
|
— |
|
Borrowings of the Revolving Credit Facility, net |
|
|
55,800 |
|
|
|
80,900 |
|
|
|
5,100 |
|
|
|
66,600 |
|
Payment of debt issuance costs |
|
|
(225 |
) |
|
|
— |
|
|
|
(43,188 |
) |
|
|
— |
|
Repurchase of shares of common stock |
|
|
(325 |
) |
|
|
— |
|
|
|
(650 |
) |
|
|
— |
|
Shares issued under share-based compensation plan, including tax
effects |
|
|
404 |
|
|
|
56 |
|
|
|
404 |
|
|
|
145 |
|
Shares issued for payment of acquisition |
|
|
1,081 |
|
|
|
— |
|
|
|
1,081 |
|
|
|
— |
|
Payment of acquisition earn-outs |
|
|
(2,656 |
) |
|
|
— |
|
|
|
(2,656 |
) |
|
|
— |
|
Purchase of redeemable noncontrolling interest |
|
|
— |
|
|
|
— |
|
|
|
(300 |
) |
|
|
— |
|
Payment of financing lease obligations |
|
|
(2,555 |
) |
|
|
(2,839 |
) |
|
|
(5,636 |
) |
|
|
(5,724 |
) |
Net cash provided by financing activities |
|
$ |
39,907 |
|
|
$ |
70,581 |
|
|
$ |
194,670 |
|
|
$ |
45,700 |
|
Net (decrease) increase in cash and cash equivalents |
|
|
(33,010 |
) |
|
|
76 |
|
|
|
11,956 |
|
|
|
(2,372 |
) |
Cash and cash equivalents at beginning of year |
|
|
58,037 |
|
|
|
11,180 |
|
|
|
13,071 |
|
|
|
13,628 |
|
Cash and cash equivalents at end of year |
|
$ |
25,027 |
|
|
$ |
11,256 |
|
|
$ |
25,027 |
|
|
$ |
11,256 |
|
BrightSpring Health Services, Inc. and
SubsidiariesReconciliation of EBITDA and Adjusted
EBITDAFor the three months and six months ended
June 30, 2024 and 2023(Unaudited) |
|
The following
table reconciles net income (loss) to EBITDA and Adjusted
EBITDA: |
|
($ in thousands) |
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net income (loss) |
|
$ |
19,441 |
|
|
$ |
2,766 |
|
|
$ |
(26,944 |
) |
|
$ |
(19,510 |
) |
Income tax benefit |
|
|
(9,466 |
) |
|
|
(2,834 |
) |
|
|
(32,760 |
) |
|
|
(7,180 |
) |
Interest expense, net |
|
|
52,439 |
|
|
|
79,684 |
|
|
|
117,459 |
|
|
|
157,861 |
|
Depreciation and
amortization |
|
|
50,071 |
|
|
|
50,205 |
|
|
|
98,993 |
|
|
|
100,550 |
|
EBITDA |
|
$ |
112,485 |
|
|
$ |
129,821 |
|
|
$ |
156,748 |
|
|
$ |
231,721 |
|
Non-cash share-based compensation
(1) |
|
|
15,136 |
|
|
|
825 |
|
|
|
39,984 |
|
|
|
1,275 |
|
Acquisition, integration, and
transaction-related costs (2) |
|
|
5,022 |
|
|
|
5,789 |
|
|
|
13,564 |
|
|
|
7,435 |
|
Restructuring and
divestiture-related and other costs (3) |
|
|
3,562 |
|
|
|
7,419 |
|
|
|
21,393 |
|
|
|
11,644 |
|
Legal costs and settlements
(4) |
|
|
2,493 |
|
|
|
2,626 |
|
|
|
12,966 |
|
|
|
4,664 |
|
Significant projects (5) |
|
|
444 |
|
|
|
1,248 |
|
|
|
1,604 |
|
|
|
4,964 |
|
Management fee (6) |
|
|
— |
|
|
|
1,432 |
|
|
|
23,381 |
|
|
|
2,865 |
|
Unreimbursed COVID-19 related
costs |
|
|
— |
|
|
|
266 |
|
|
|
— |
|
|
|
136 |
|
Total adjustments |
|
$ |
26,657 |
|
|
$ |
19,606 |
|
|
$ |
112,892 |
|
|
$ |
32,984 |
|
Adjusted EBITDA |
|
$ |
139,142 |
|
|
$ |
149,427 |
|
|
$ |
269,640 |
|
|
$ |
264,705 |
|
(1) Represents non-cash share-based compensation to certain
members of our management and full-time employees. The three and
six months ended June 30, 2024 includes $13.3 million and $21.4
million of costs, respectively, related to new equity awards
granted upon the completion of our IPO under the 2024 Equity
Incentive Plan. The six months ended June 30, 2024 includes $15.0
million of previously unrecognized share-based compensation expense
related to performance-vesting options under the 2017 Stock Plan,
which vested upon completion of the IPO.
(2) Represents transaction costs incurred in connection with
planned, completed, or terminated acquisitions, which include
investment banking fees, legal diligence and related documentation
costs, finance and accounting diligence and documentation, and
integration costs incurred including any facility consolidation,
integration travel, or severance associated with the integration of
an acquisition. These costs also included $1.1 million and $5.5
million of costs related to the IPO Offerings which were not
capitalizable for the three and six months ended June 30, 2024,
respectively, compared to $0.0 million and $0.2 million for the
three and six months ended June 30, 2023, respectively; and system
implementation costs associated with the integration of
acquisitions of $0.1 million and $0.2 million for the three and six
months ended June 30, 2024, respectively, compared to $0.5 million
and $1.5 million for the three and six months ended June 30, 2023,
respectively.
(3) Represents costs associated with restructuring-related
activities, including closure, and related license impairment, and
severance expenses associated with certain enterprise-wide or
significant business line cost-savings measures. These costs
included $12.7 million of unamortized debt issuance costs
associated with the extinguishment of our Second Lien Facility in
the six months ended June 30, 2024. These costs also included $0.1
million and $1.9 million of intangible asset and other investment
impairment for the three and six months ended June 30, 2024,
respectively, as compared to $3.8 million and $6.0 million for the
three and six months ended June 30, 2023, respectively.
(4) Represents settlement and defense costs associated with
certain PharMerica litigation matters associated with two
historical cases, which includes the Silver matter. For the six
months ended June 30, 2024, these costs included $5.0 million
associated with the settlement of the Silver matter due to a change
in estimate. See Note 10 within the unaudited condensed
consolidated financial statements and related notes in this
Quarterly Report on Form 10-Q for additional information.
(5) Represents costs associated with certain transformational
projects and for the periods presented. General ledger system
migration and related business intelligence system implementation
costs, which were capitalized as development costs and are
subsequently amortized in accordance with ASC 350-40, Internal Use
Software, were $0.2 million and $0.7 million for the three and six
months ended June 30, 2024, respectively, compared to $0.5 million
and $1.0 million for the three and six month ended June 30, 2023,
respectively. The general ledger system migration and related
business intelligence system project costs were completed during
the second fiscal quarter of 2024. Pharmacy billing system
implementation costs were $0.1 million and $0.7 million for the
three and six months ended June 30, 2024, respectively, compared to
$0.7 million and $1.1 million for the three and six months ended
June 30, 2023, respectively. The pharmacy billing system project
costs were completed in the second fiscal quarter of 2024.
Ransomware attack response costs associated with the ransomware
attack in the first half of 2023 were $0.5 million and $2.5 million
for the three and six months ended June 30, 2023.
(6) Represents annual management fees payable to the Managers
under the Monitoring Agreement through the date of the IPO, and
$22.7 million of termination fees resulting from the Monitoring
Agreement being terminated upon completion of the IPO Offerings.
All management fees have ceased following the completion of the
IPO.
BrightSpring Health Services, Inc. and
SubsidiariesReconciliation of Adjusted
EPSFor the three months and six months ended June
30, 2024 and 2023(Unaudited) |
|
The following
table reconciles diluted EPS to Adjusted EPS: |
|
(shares in thousands) |
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
June 30, |
|
|
June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Diluted EPS |
|
$ |
0.10 |
|
|
$ |
0.03 |
|
|
$ |
(0.14 |
) |
|
$ |
(0.15 |
) |
Non-cash share-based compensation
(1) |
|
|
0.07 |
|
|
|
0.01 |
|
|
|
0.20 |
|
|
|
0.01 |
|
Acquisition, integration, and
transaction-related costs (1) |
|
|
0.02 |
|
|
|
0.05 |
|
|
|
0.07 |
|
|
|
0.06 |
|
Restructuring and
divestiture-related and other costs (1) |
|
|
0.02 |
|
|
|
0.06 |
|
|
|
0.11 |
|
|
|
0.09 |
|
Legal costs and settlements
(1) |
|
|
0.01 |
|
|
|
0.02 |
|
|
|
0.07 |
|
|
|
0.04 |
|
Significant projects (1) |
|
0.00 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.04 |
|
Management fee (1) |
|
|
— |
|
|
|
0.01 |
|
|
|
0.12 |
|
|
|
0.02 |
|
Unreimbursed COVID-19 related
costs (1) |
|
|
— |
|
|
0.00 |
|
|
|
— |
|
|
0.00 |
|
Income tax impact on
adjustments (2)(3) |
|
|
(0.12 |
) |
|
|
(0.04 |
) |
|
|
(0.22 |
) |
|
|
(0.07 |
) |
Adjusted EPS |
|
$ |
0.10 |
|
|
$ |
0.15 |
|
|
$ |
0.22 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding used in calculating diluted U.S. GAAP net income (loss)
per common share |
|
|
208,987 |
|
|
|
126,449 |
|
|
|
186,523 |
|
|
|
117,875 |
|
Weighted average common shares
outstanding used in calculating diluted Non-GAAP net income (loss)
per common share |
|
|
208,987 |
|
|
|
126,449 |
|
|
|
197,360 |
|
|
|
126,485 |
|
(1) This adjustment reflects the per share impact of the
adjustment reflected within the definition of Adjusted EBITDA.
(2) The income tax impact of non-GAAP adjustments is calculated
using the estimated tax rate for the respective non-GAAP
adjustment.
(3) For the three and six months ended June 30, 2024, the income
tax impact on adjustments is inclusive of a discrete tax benefit
related to the Silver matter that was finalized in connection with
the signing of the settlement agreement during the second fiscal
quarter of 2024.
BrightSpring Health Serv... (NASDAQ:BTSG)
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