BANNOCKBURN, Ill., Nov. 06, 2019 (GLOBE NEWSWIRE) — Option Care Health, Inc. (Nasdaq: BIOS), the nation’s largest independent provider of home and alternate site infusion services, today announced financial results for the third quarter ended September 30, 2019.
John C. Rademacher, Chief Executive Officer, commented, “I’m pleased to report solid third quarter results and the considerable progress we have made to integrate our two organizations since the transaction closed in early August. Our newly combined team has come together under the unified purpose to set the standard for infusion therapy in the alternate site setting. While we still have a significant amount of work ahead of us, I feel we are on plan and building momentum. Through the hard work of our teams across various functions, we have developed a comprehensive plan to deliver at least $60 million in net synergies and I’m excited about all the opportunities at hand for our combined company.”
Third Quarter 2019 Financial Highlights
Please note that all financial data disclosed below, as well as in the forthcoming 10-Q, is comprised of the results of legacy Option Care and its affiliates and incorporate BioScrip results from August 6, 2019 prospectively. Thus, comparisons to historical periods are relative to legacy Option Care and its affiliates only.
The conference call can be accessed by dialing for U.S. participants, or for international participants, and referencing conference ID 9661889; or via a live audio webcast that will be available online at . 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 (NASDAQ: BIOS), is the largest independent provider of home and alternate site infusion services in the United States. With over 6,000 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 employees. To learn more, please visit our website at .
Mike Shapiro Bob East, Asher Dewhurst, Jordan KohnstamChief Financial Officer WestwickeT: T:
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 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, acquisition, 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.
OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (unaudited) September 30, December 31, 2019 2018 ASSETS CURRENT ASSETS: Cash and cash equivalents$52,789 $36,391 Accounts receivable, net 336,303 310,169 Inventories 109,235 83,340 Prepaid expenses and other current assets 46,919 37,525 Total current assets 545,246 467,425 NONCURRENT ASSETS: Property and equipment, net 131,982 93,142 Intangible assets, net 395,078 219,713 Goodwill 1,419,373 632,469 Other noncurrent assets 90,246 15,462 Total noncurrent assets 2,036,679 960,786 TOTAL ASSETS$2,581,925 $1,428,211 LIABILITIES AND STOCKHOLDERS‘ EQUITY CURRENT LIABILITIES: Accounts payable$213,149 $187,886 Other current liabilities 106,519 52,111 Total current liabilities 319,668 239,997 NONCURRENT LIABILITIES: Long-term debt, net of discount, deferred financing costs, and current portion 1,259,460 535,225 Other noncurrent liabilities 81,115 50,164 Total noncurrent liabilities 1,340,575 585,389 Total liabilities 1,660,243 825,386 STOCKHOLDERS‘ EQUITY 921,682 602,825 TOTAL LIABILITIES AND STOCKHOLDERS‘ EQUITY$2,581,925 $1,428,211
OPTION CARE HEALTH, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 NET REVENUE $615,880 $493,928 $1,589,638 $1,434,061 COST OF REVENUE 478,107 385,683 1,252,281 1,122,846 GROSS PROFIT 137,773 108,245 337,357 311,215 OPERATING COSTS AND EXPENSES: Selling, general and administrative expenses 133,475 85,929 315,815 258,314 Depreciation and amortization expense 16,023 9,557 36,142 28,180 Total operating expenses 149,498 95,486 351,957 286,494 OPERATING (LOSS) INCOME (11,725) 12,759 (14,600) 24,721 OTHER INCOME (EXPENSE): Interest expense, net (21,509) (11,025) (44,117) (34,313)Other, net (5,984) 440 (4,661) (1,514)Total other expense (27,493) (10,585) (48,778) (35,827) (LOSS) INCOME BEFORE INCOME TAXES (39,218) 2,174 (63,378) (11,106) INCOME TAX EXPENSE (BENEFIT) 3,576 383 (3,269) (1,737)NET (LOSS) INCOME $(42,794) $1,791 $(60,109) $(9,369) Net (loss) income per share, basic and diluted $(0.07) $0.00 $(0.10) $(0.02)
OPTION CARE HEALTH, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) September 30, 2019 2018 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $(60,109) $(9,369) Adjustments to reconcile net loss to net cash provided by operations: Total depreciation and amortization expense 38,997 30,447 Other non-cash adjustments 21,446 1,922 Changes in operating assets and liabilities: Accounts receivable, net 71,029 (32,483) Inventories (6,212) 4,010 Accounts payable (36,157) 8,683 Other (12,424) 8,988 Net cash provided by operating activities 16,570 12,198 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment (13,150) (20,716) Other investing cash flows 636 – Business acquisitions, net of cash acquired (700,170) (9,917) Net cash used in investing activities (712,684) (30,633) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from debt 981,050 1,000 Retirement of debt obligations (226,738) – Deferred financing costs (36,538) – Other financing cash flows (5,262) (4,112) Net cash provided by (used in) financing activities 712,512 (3,112) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 16,398 (21,547) Cash and cash equivalents – beginning of the period 36,391 53,116 CASH AND CASH EQUIVALENTS – END OF PERIOD $52,789 $31,569
OPTION CARE HEALTH, INC. QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES (IN THOUSANDS)(UNAUDITED) Three Months Ended Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Consolidated net (loss) income $(42,794) $1,791 $(60,109) $(9,369)Interest expense, net 21,509 11,025 44,117 34,313 Income tax expense 3,576 383 (3,269) (1,737)Depreciation and amortization expense 17,407 10,304 38,997 30,447 Consolidated EBITDA (302) 23,503 19,736 53,654 EBITDA adjustments Accounting principle changes and non-cash charges 4,277 – 8,535 – Stock-based incentive compensation 2,745 564 3,898 1,671 Loss on extinguishment of debt 5,469 – 5,469 72 Restructuring, acquisition, integration and other 22,585 2,261 40,151 8,554 Consolidated adjusted EBITDA $34,774 $26,328 $77,789 $63,951