FALSE000101473900010147392024-07-312024-07-31

 
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)
July 31, 2024

OPCH_Logo.jpg

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 July 31, 2024, Option Care Health, Inc. issued a press release reporting its second quarter 2024 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
 
 
   
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:
July 31, 2024
By:/s/ Michael Shapiro
Michael Shapiro
Chief Financial Officer


 
Exhibit 99.1
 
 opch_logoa.jpg

OPTION CARE HEALTH ANNOUNCES FINANCIAL RESULTS FOR THE SECOND QUARTER ENDED JUNE 30, 2024
BANNOCKBURN, IL., July 31, 2024 - 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, 2024.
Second Quarter 2024 Financial Results and Highlights
•Net revenue of $1,227.2 million, up 14.8% compared to $1,069.1 million in the second quarter of 2023
•Gross profit of $249.4 million, or 20.3% of net revenue, down 0.6% compared to $250.8 million, or 23.5% of net revenue, in the second quarter of 2023
•Net income of $53.0 million, or $0.30 diluted earnings per share, down 53.6% compared to net income of $114.4 million, or $0.63 diluted earnings per share, in the second quarter of 2023
•Adjusted EBITDA of $108.4 million, down 1.5% compared to $110.1 million in the second quarter of 2023
•Cash flow from operations of $195.7 million, compared to $169.5 million in the second quarter of 2023
•Cash and cash equivalents balance of $376.9 million at the end of the second quarter of 2024
•Repurchased approximately $78.1 million of stock
•Amended the First Lien Credit Agreement reducing the interest rate to Term SOFR plus 2.25% and providing $50.0 million of additional liquidity
Note that the second quarter of 2023 net income and cash flow from operations includes $62.8 million related to the termination payment received on behalf of Amedisys, net of merger-related expenses and taxes.
John C. Rademacher, Chief Executive Officer, commented, “The Option Care Health team continued to demonstrate its resilience in a difficult environment while never losing focus on providing unparalleled care and delivering hope to patients and their families. I am proud of the financial results we executed on this quarter and we remain committed to delivering on our commitments for 2024.”
Updated Full Year 2024 Financial Guidance
For the full year 2024, Option Care Health expects to generate:
•Net revenue of $4.75 billion to $4.85 billion
•Adjusted EBITDA of $435 million to $450 million
•Cash flow from operations of at least $300 million, consistent with previous guidance
•Effective tax rate of 26% - 28%, consistent with previous guidance
•Net interest expense of approximately $55 million to $60 million, consistent with previous guidance


Conference Call
Option Care Health will host a conference call to discuss its second quarter 2024 financial results later today at 8:30 a.m. ET. 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 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)
June 30, 2024December 31, 2023
ASSETS
CURRENT ASSETS:
Cash and cash equivalents$376,872 $343,849 
Accounts receivable, net468,300 377,658 
Inventories281,421 274,004 
Prepaid expenses and other current assets100,820 98,744 
Total current assets1,227,413 1,094,255 
NONCURRENT ASSETS:
Property and equipment, net123,931 120,630 
Intangible assets, net18,542 20,092 
Referral sources, net299,660 315,304 
Goodwill1,540,246 1,540,246 
Other noncurrent assets138,800 126,508 
Total noncurrent assets2,121,179 2,122,780 
TOTAL ASSETS $3,348,592 $3,217,035 
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable$535,688 $426,513 
Other current liabilities159,719 191,796 
Total current liabilities695,407 618,309 
NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion1,105,575 1,056,650 
Other noncurrent liabilities136,179 120,404 
Total noncurrent liabilities1,241,754 1,177,054 
Total liabilities1,937,161 1,795,363 
STOCKHOLDERS’ EQUITY1,411,431 1,421,672 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$3,348,592 $3,217,035 



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,
2024202320242023
NET REVENUE$1,227,186 $1,069,072 $2,373,238 $2,084,920 
COST OF REVENUE977,821 818,243 1,885,373 1,605,086 
GROSS PROFIT249,365 250,829 487,865 479,834 
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses153,783 153,564 308,525 301,430 
Depreciation and amortization expense14,907 14,898 29,635 29,412 
Total operating expenses168,690 168,462 338,160 330,842 
OPERATING INCOME80,675 82,367 149,705 148,992 
OTHER INCOME (EXPENSE):
Interest expense, net(12,603)(13,196)(25,805)(27,030)
Other, net3,969 86,332 5,096 87,770 
Total other (expense) income(8,634)73,136 (20,709)60,740 
INCOME BEFORE INCOME TAXES72,041 155,503 128,996 209,732 
INCOME TAX EXPENSE18,998 41,100 31,162 56,121 
NET INCOME$53,043 $114,403 $97,834 $153,611 
Earnings per share, basic$0.31 $0.64 $0.56 $0.85 
Earnings per share, diluted$0.30 $0.63 $0.56 $0.84 
Weighted average common shares outstanding, basic172,927 179,807 173,428 180,531 
Weighted average common shares outstanding, diluted174,090 181,241 174,831 181,931 



Schedule 3

OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)(UNAUDITED)
Six Months Ended June 30,
20242023
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$97,834 $153,611 
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization expense30,802 30,801 
Other non-cash adjustments38,874 38,498 
Changes in operating assets and liabilities:
Accounts receivable, net(90,642)(18,619)
Inventories(7,417)(38,643)
Accounts payable107,558 88,896 
Accrued compensation and employee benefits(30,206)(3,949)
Prepaid expenses and other current assets(1,745)654 
Other(18,187)8,039 
Net cash provided by operating activities126,871 259,288 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment(15,597)(13,554)
Business acquisitions, net of cash acquired— (12,855)
Net cash used in investing activities(15,597)(26,409)
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of company stock(118,122)(75,000)
Proceeds from issuance of debt49,959 — 
Other financing cash flows(10,088)(10,899)
Net cash used in financing activities(78,251)(85,899)
NET INCREASE IN CASH AND CASH EQUIVALENTS33,023 146,980 
Cash and cash equivalents - beginning of the period343,849 294,186 
CASH AND CASH EQUIVALENTS - END OF PERIOD$376,872 $441,166 



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,
2024202320242023
Net income$53,043 $114,403 $97,834 $153,611 
Interest expense, net12,603 13,196 25,805 27,030 
Income tax expense18,998 41,100 31,162 56,121 
Depreciation and amortization expense15,497 15,576 30,802 30,801 
EBITDA100,141 184,275 185,603 267,563 
EBITDA adjustments
Stock-based incentive compensation7,608 7,685 17,213 13,673 
Loss on extinguishment of debt377 — 377 — 
Restructuring, acquisition, integration and other (1)231 (81,910)3,454 (77,412)
Adjusted EBITDA$108,357 $110,050 $206,647 $203,824 
(1) Restructuring, acquisition, integration and other for the three and six months ended June 30, 2023 includes the Amedisys merger termination fee, net of merger-related expenses

v3.24.2
Cover
Jul. 31, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 31, 2024
Entity Registrant Name OPTION CARE HEALTH, INC.
Entity Incorporation, State or Country Code DE
Entity File Number 001-11993
Entity Tax Identification Number 05-0489664
Entity Address, Address Line One 3000 Lakeside Dr.
Entity Address, Address Line Two Suite 300N
Entity Address, City or Town Bannockburn
Entity Address, State or Province IL
Entity Address, Postal Zip Code 60015
City Area Code 312
Local Phone Number 940-2443
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, $0.0001 par value per share
Trading Symbol OPCH
Security Exchange Name NASDAQ
Amendment Flag false
Entity Central Index Key 0001014739
Option Care Health (NASDAQ:OPCH)
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