Option Care Health Announces Financial Results for Fourth Quarter and Full Year 2020 and Provides Guidance for Full Year 2021

March 11, 2021 7:00 AM EST

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BANNOCKBURN, Ill., March 11, 2021 (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 fourth quarter and full year ended December 31, 2020.

Given the merger between Option Care Enterprises, Inc. ("Option Care") and BioScrip, Inc. (“BioScrip”) to form Option Care Health on August 6, 2019, comparisons to historical periods are relative to legacy Option Care only and incorporate BioScrip results from August 6, 2019 prospectively.

Fourth Quarter 2020 Financial Highlights

  • Net revenue of $804.7 million, up 11.6% compared to $720.8 million in the fourth quarter of 2019
  • Gross profit of $183.8 million, or 22.8% of revenue, up 4.6% compared to $175.6 million, or 24.4% of revenue, in the fourth quarter of 2019
  • Net income of $17.8 million, or $0.10 earnings per share, compared to net loss of $15.8 million, or $0.09 loss per share, in the fourth quarter of 2019
  • Adjusted EBITDA of $67.7 million, up 27.7% compared to $53.0 million in the fourth quarter of 2019
  • Cash flow from operations of $25.7 million, up 12.1% compared to $22.9 million in the fourth quarter of 2019
  • Cash balances of $99.3 million at the end of the fourth quarter and no outstanding borrowings on the Company’s $175.0 million revolver

Full Year 2020 Financial Highlights

  • Net revenue of $3,032.6 million, up 31.3% compared to $2,310.4 million in the full year 2019
  • Gross profit of $682.3 million, or 22.5% of revenue, up 33.0% compared to $513.0 million, or 22.2% of revenue, in full year 2019
  • Net loss of $8.1 million, or $0.04 loss per share, compared to net loss of $75.9 million, or $0.49 loss per share, in full year 2019
  • Adjusted EBITDA of $221.7 million, up 69.5% compared to $130.8 million in full year 2019
  • Cash flow from operations of $127.4 million, up 222.8% compared to $39.5 million in full year 2019

John C. Rademacher, Chief Executive Officer, commented, “I am incredibly proud of the effort and execution by the Option Care Health team in the face of an exceptionally challenging year. In addition to delivering strong financial results, the team continued to focus on integration efforts and laying the groundwork for future growth while always remaining focused on the thousands of patients relying on us for critical therapy every single day.”

Full Year 2021 Financial Guidance

For the full year 2021, Option Care Health expects to deliver the following financial results:

  • Net revenue of $3.20 billion to $3.25 billion
  • Adjusted EBITDA of $245.0 million to $258.0 million
  • Cash flow from operations of at least $140.0 million
  • Net debt to Adjusted EBITDA leverage ratio at December 31, 2021 below 4.0x

Conference Call

The conference call can be accessed by dialing (866) 360-3136 for U.S. participants or (602) 563-8603 for international participants, and referencing conference ID 1899337; or via a live audio webcast that will be available online at 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 5,000 teammates, including approximately 2,900 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
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: (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 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, 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. For a full reconciliation of Adjusted EBITDA to the most comparable GAAP financial measure, please see the attachment to this earnings release.

  Schedule 1

OPTION CARE HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)

 


    
 December 31,
 2020 2019
ASSETS   
CURRENT ASSETS:   
Cash and cash equivalents$99,265  $67,056 
Accounts receivable, net328,340  324,416 
Inventories158,601  115,876 
Prepaid expenses and other current assets70,806  51,306 
Total current assets657,012  558,654 
    
NONCURRENT ASSETS:   
Property and equipment, net121,149  133,198 
Intangible assets, net351,052  385,910 
Goodwill1,428,610  1,425,542 
Other noncurrent assets89,616  86,243 
Total noncurrent assets1,990,427  2,030,893 
TOTAL ASSETS$2,647,439  $2,589,547 
    
LIABILITIES AND STOCKHOLDERS’ EQUITY   
CURRENT LIABILITIES:   
Accounts payable$282,913  $221,060 
Other current liabilities151,110  108,944 
Total current liabilities434,023  330,004 
    
NONCURRENT LIABILITIES:   
Long-term debt, net of discount, deferred financing costs and current portion1,115,103  1,277,246 
Other noncurrent liabilities82,589  75,470 
Total noncurrent liabilities1,197,692  1,352,716 
Total liabilities1,631,715  1,682,720 
    
STOCKHOLDERS' EQUITY1,015,724  906,827 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY$2,647,439  $2,589,547 


Schedule 2

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

 


 Three Months Ended
December 31,
 Year Ended
December 31,
 2020 2019 2020 2019
NET REVENUE$804,713  $720,779  $3,032,610  $2,310,417 
COST OF REVENUE620,951  545,137  2,350,346  1,797,418 
GROSS PROFIT183,762  175,642  682,264  512,999 
        
OPERATING COSTS AND EXPENSES:       
Selling, general and administrative expenses123,001  144,121  500,199  459,628 
Depreciation and amortization expense16,418  17,548  71,310  53,690 
Total operating expenses139,419  161,669  571,509  513,318 
OPERATING INCOME (LOSS)44,343  13,973  110,755  (319)
        
OTHER INCOME (EXPENSE):       
Interest expense, net(23,668) (29,607) (107,770) (73,724)
Other, net(2,270) 818  (8,228) (4,151)
Total other expense(25,938) (28,789) (115,998) (77,875)
        
INCOME (LOSS) BEFORE INCOME TAXES18,405  (14,816) (5,243) (78,194)
        
INCOME TAX EXPENSE (BENEFIT)566  995  2,833  (2,274)
NET INCOME (LOSS)$17,839  $(15,811) $(8,076) $(75,920)
        
Earnings (loss) per share, basic and diluted$0.10  $(0.09) $(0.04) $(0.49)


Schedule 3

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

 


 Year Ended
December 31,
 2020 2019
CASH FLOWS FROM OPERATING ACTIVITIES:   
Net loss(8,076) (75,920)
Adjustments to reconcile net loss to net cash provided by operations:   
Depreciation and amortization expense77,896  57,869 
Paid-in-kind interest capitalized as principal7,525  12,256 
Other non-cash adjustments42,917  29,236 
Changes in operating assets and liabilities:   
Accounts receivable, net(3,924) 82,285 
Inventories(42,725) (12,853)
Accounts payable59,215  (30,856)
Other(5,436) (22,550)
Net cash provided by operating activities127,392  39,467 
    
CASH FLOWS FROM INVESTING ACTIVITIES:   
Acquisition of property and equipment(26,875) (28,292)
Other investing cash flows541  636 
Business acquisitions, net of cash acquired  (700,170)
Net cash used in investing activities(26,334) (727,826)
    
CASH FLOWS FROM FINANCING ACTIVITIES:   
Proceeds from debt  981,050 
Retirement of debt obligations(174,000) (226,738)
Net proceeds from issuance of common stock118,934   
Deferred financing costs(149) (30,022)
Other financing cash flows(13,634) (5,266)
Net cash (used in) provided by financing activities(68,849) 719,024 
NET INCREASE IN CASH AND CASH EQUIVALENTS32,209  30,665 
Cash and cash equivalents - beginning of the period67,056  36,391 
CASH AND CASH EQUIVALENTS - END OF PERIOD99,265  67,056 


Schedule 4

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

 


 Three Months Ended 
 December 31,
 Year Ended
December 31,
 2020 2019 2020 2019
Consolidated net income (loss)$17,839  $(15,811) $(8,076) $(75,920)
Interest expense, net23,668  29,607  107,770  73,724 
Income tax expense (benefit)566  995  2,833  (2,274)
Depreciation and amortization expense17,842  18,872  77,896  57,869 
Consolidated EBITDA59,915  33,663  180,423  53,399 
        
EBITDA adjustments       
Accounting principle changes and non-cash charges      8,535 
Stock-based incentive compensation332  272  2,920  4,170 
Loss on extinguishment of debt3,196    11,545  5,469 
Restructuring, acquisition, integration and other4,208  19,027  26,788  59,178 
Consolidated adjusted EBITDA$67,651  $52,962  $221,676  $130,751 



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