Option Care Health Announces Financial Results for the Second Quarter Ended June 30, 2021

BANNOCKBURN, Ill., Aug. 03, 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 second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights

• Net revenue of $860.3 million, up 16.1% compared to $740.8 million in the second quarter of 2020
• Gross profit of $199.0 million, or 23.1% of net revenue, up 19.6% compared to $166.3 million, or 22.4% of revenue, in the second quarter of 2020
• Net income of $31.8 million, or $0.18 per share, compared to net loss of $7.7 million, or $0.04 loss per share, in the second quarter of 2020
• Adjusted EBITDA of $72.8 million, up 33.3% compared to $54.6 million in the second quarter of 2020
• Cash flow from operations of $73.7 million compared to a cash flow of $35.0 million in the second quarter of 2020
• Cash balances of $157.5 million at the end of the second quarter and no outstanding borrowings on the Company’s $175.0 million revolver
• Completed the acquisition of certain assets of BioCure for an acquisition price of $18.9 million

John C. Rademacher, Chief Executive Officer, commented, “The Option Care Health team delivered a very strong second quarter while continuing to invest for future growth. Most importantly, the team focused on extraordinary patient care as we continue to navigate a dynamic healthcare environment. Based on the momentum established in the first half, the Company is positioned very well heading into the second half of 2021.”

Full Year 2021 Guidance

For the full year 2021, Option Care Health is increasing its financial guidance as follows:

• Net Revenue of $3.35 billion to $3.50 billion
• Adjusted EBITDA of $275 million to $285 million
• Cash Flow from Operations of at least $170 million

Conference Call

The Company will host a conference call this morning at 8:30 a.m. E.T. which can be accessed by dialing (866) 360-3136 and referencing conference ID 4065104; 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 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 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: (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; (iv) the loss of one or more key payers; and (v) the spread and impact of the COVID-19 pandemic. 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, including, but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, 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)

	(unaudited)
	June 30,				December 31,
	2021				2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	157,526			$	99,265
Accounts receivable, net	338,206				328,340
Inventories	173,853				158,601
Prepaid expenses and other current assets	66,179				70,806
Total current assets	735,764				657,012
NONCURRENT ASSETS:
Property and equipment, net	110,662				121,149
Intangible assets, net	351,675				351,052
Goodwill	1,428,610				1,428,610
Other noncurrent assets	92,047				89,616
Total noncurrent assets	1,982,994				1,990,427
TOTAL ASSETS	$	2,718,758			$	2,647,439
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	309,445			$	282,913
Other current liabilities	150,071				151,110
Total current liabilities	459,516				434,023
NONCURRENT LIABILITIES:
Long-term debt, net of discount, deferred financing costs and current portion	1,119,458				1,115,103
Other noncurrent liabilities	83,173				82,589
Total noncurrent liabilities	1,202,631				1,197,692
Total liabilities	1,662,147				1,631,715
STOCKHOLDERS’ EQUITY	1,056,611				1,015,724
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	2,718,758			$	2,647,439

Schedule 2

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

	Three Months EndedJune 30,								Six Months EndedJune 30,
	2021				2020				2021				2020
NET REVENUE	$	860,272			$	740,848			$	1,619,509			$	1,446,288
COST OF REVENUE	661,304				574,528				1,255,068				1,121,939
GROSS PROFIT	198,968				166,320				364,441				324,349
OPERATING COSTS AND EXPENSES:
Selling, general and administrative expenses	134,257				124,918				254,297				254,198
Depreciation and amortization expense	16,619				18,194				32,958				38,295
Total operating expenses	150,876				143,112				287,255				292,493
OPERATING INCOME	48,092				23,208				77,186				31,856
OTHER INCOME (EXPENSE):
Interest expense, net	(17,236		)		(31,432		)		(36,717		)		(59,519		)
Other, net	1,691				1,026				(9,505		)		1,596
Total other expense	(15,545		)		(30,406		)		(46,222		)		(57,923		)
INCOME (LOSS) BEFORE INCOME TAXES	32,547				(7,198		)		30,964				(26,067		)
INCOME TAX EXPENSE	731				470				2,009				1,511
NET INCOME (LOSS)	$	31,816			$	(7,668	)		$	28,955			$	(27,578	)
Earnings (loss) per share, basic and diluted	$	0.18			$	(0.04	)		$	0.16			$	(0.16	)

Schedule 3

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

	Six Months Ended June 30,
	2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)	$	28,955			$	(27,578	)
Adjustments to reconcile net income (loss) to net cash provided by operations:
Depreciation and amortization expense	35,705				41,813
Other non-cash adjustments	22,688				17,423
Changes in operating assets and liabilities:
Accounts receivable, net	(9,866		)		4,194
Inventories	(14,651		)		(33,239		)
Accounts payable	26,532				36,422
Other	2,671				14,355
Net cash provided by operating activities	92,034				53,390
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	(6,808		)		(9,269		)
Other investing cash flows	—				541
Business acquisitions, net of cash acquired	(18,852		)		—
Net cash used in investing activities	(25,660		)		(8,728		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from debt	355,200				—
Retirement of debt obligations	(352,009		)		—
Deferred financing costs	(2,880		)		—
Other financing cash flows	(8,424		)		6,381
Net cash (used in) provided by financing activities	(8,113		)		6,381
NET INCREASE IN CASH AND CASH EQUIVALENTS	58,261				51,043
Cash and cash equivalents - beginning of the period	99,265				67,056
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	157,526			$	118,099

Schedule 4

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

	Three Months Ended  June 30,								Six Months EndedJune 30,
	2021				2020				2021				2020
Consolidated net income (loss)	$	31,816			$	(7,668	)		$	28,955			$	(27,578	)
Interest expense, net	17,236				31,432				36,717				59,519
Income tax expense	731				470				2,009				1,511
Depreciation and amortization expense	17,989				19,969				35,705				41,813
Consolidated EBITDA	67,772				44,203				103,386				75,265
EBITDA adjustments
Accounting principle changes and non-cash charges	—				—				—				—
Stock-based incentive compensation	2,525				661				3,730				1,418
Loss on extinguishment of debt	—				—				12,403				—
Restructuring, acquisition, integration and other	2,526				9,759				5,534				18,119
Consolidated adjusted EBITDA	$	72,823			$	54,623			$	125,053			$	94,802

Source: Option Care Health, Inc.

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