Option Care Health Announces Financial Results for the Third Quarter Ended September 30, 2023

About this update from Option Care Health, Inc.

BANNOCKBURN, Ill. , Oct. 25, 2023 (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 third quarter ended September 30, 2023 . Third Quarter 2023 Financial Results and Highlights Net revenue of $1,093.0 million , up 7.1% compared to $1,020.9 million in the third quarter of 2022 Gross profit of $254.3 million , or 23.3% of net revenue, up 16.6% compared to $218.0 million , or 21.4% of net revenue, in the third quarter of 2022 Net income of $56.3 million , or $0.31 basic earnings per share, up 45.0% compared to net income of $38.8 million , or $0.21 basic earnings per share, in the third quarter of 2022 Adjusted EBITDA of $109.8 million , up 28.2% compared to $85.6 million in the third quarter of 2022 Cash flow from operations of $61.0 million compared to $87.0 million in the third quarter of 2022 Cash and cash equivalents balance was $386.5 million at the end of the third quarter of 2023 John C. Rademacher , Chief Executive Officer, commented, “The Option Care Health team continues to execute on outstanding clinical outcomes and extraordinary patient care, which helped translate into solid financial results in the third quarter. I am excited to build on this momentum as we close out the year and look forward to seeing the impact we believe the team will make in the post-acute and ambulatory setting in the years to come.” Updated Full Year 2023 Financial Guidance For the full year 2023, Option Care Health expects to generate: Net revenue of $4.23 billion to $4.28 billion Adjusted EBITDA of $420 million to $425 million Cash flow from operations of at least $350 million , inclusive of the Amedisys merger termination fee net of merger-related expenses Additionally, the Company anticipates an effective tax rate of approximately 27% and net interest expense of approximately $52.0 million to $54.0 million . Conference Call Option Care Health will host a conference call to discuss its third quarter 2023 financial results later today at 8:30 a.m. EDT . 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 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: 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 periodic 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) September 30, 2023 December 31, 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 386,489 $ 294,186 Accounts receivable, net 382,957 377,542 Inventories 251,366 224,281 Prepaid expenses and other current assets 95,473 98,330 Total current assets 1,116,285 994,339 NONCURRENT ASSETS: Property and equipment, net 107,960 108,321 Intangible assets, net 20,868 22,371 Referral sources, net 323,126 341,744 Goodwill 1,540,246 1,533,424 Other noncurrent assets 135,131 112,737 Total noncurrent assets 2,127,331 2,118,597 TOTAL ASSETS $ 3,243,616 $ 3,112,936 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 429,536 $ 378,763 Other current liabilities 194,548 186,588 Total current liabilities 624,084 565,351 NONCURRENT LIABILITIES: Long-term debt, net of discount, deferred financing costs and current portion 1,057,016 1,058,204 Other noncurrent liabilities 122,433 103,278 Total noncurrent liabilities 1,179,449 1,161,482 Total liabilities 1,803,533 1,726,833 STOCKHOLDERS’ EQUITY 1,440,083 1,386,103 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,243,616 $ 3,112,936 Schedule 2 OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED) Three Months Ended September 30 , Nine Months Ended September 30 , 2023 2022 2023 2022 NET REVENUE $ 1,093,014 $ 1,020,918 $ 3,177,934 $ 2,917,522 COST OF REVENUE 838,748 802,917 2,443,834 2,281,685 GROSS PROFIT 254,266 218,001 734,100 635,837 OPERATING COSTS AND EXPENSES: Selling, general and administrative expenses 158,214 142,015 459,644 417,771 Depreciation and amortization expense 15,005 15,268 44,417 46,027 Total operating expenses 173,219 157,283 504,061 463,798 OPERATING INCOME 81,047 60,718 230,039 172,039 OTHER INCOME (EXPENSE): Interest expense, net (11,786 ) (13,997 ) (38,816 ) (39,008 ) Other, net 824 5,360 88,594 7,956 Total other (expense) income (10,962 ) (8,637 ) 49,778 (31,052 ) INCOME BEFORE INCOME TAXES 70,085 52,081 279,817 140,987 INCOME TAX EXPENSE 13,783 13,258 69,904 37,960 NET INCOME $ 56,302 $ 38,823 $ 209,913 $ 103,027 Earnings per share, basic $ 0.31 $ 0.21 $ 1.17 $ 0.57 Earnings per share, diluted $ 0.31 $ 0.21 $ 1.16 $ 0.57 Weighted average common shares outstanding, basic 178,826 181,884 179,956 180,829 Weighted average common shares outstanding, diluted 180,528 183,022 181,286 181,760 Schedule 3 OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)(UNAUDITED) Nine Months Ended September 30 , 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 209,913 $ 103,027 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization expense 46,423 49,723 Other non-cash adjustments 54,259 66,999 Changes in operating assets and liabilities: Accounts receivable, net (5,075 ) (23,153 ) Inventories (28,362 ) (52,749 ) Accounts payable 50,726 129,859 Other (7,558 ) (49,614 ) Net cash provided by operating activities 320,326 224,092 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment (21,981 ) (17,111 ) Business acquisitions, net of cash acquired (12,855 ) (87,315 ) Other investing activities (5,889 ) — Net cash used in investing activities (40,725 ) (104,426 ) CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of company stock (175,108 ) — Proceeds from warrant exercises — 20,916 Other financing cash flows (12,190 ) (4,537 ) Net cash (used in) provided by financing activities (187,298 ) 16,379 NET INCREASE IN CASH AND CASH EQUIVALENTS 92,303 136,045 Cash and cash equivalents - beginning of the period 294,186 119,423 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 386,489 $ 255,468 Schedule 4 OPTION CARE HEALTH, INC. QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES (IN THOUSANDS)(UNAUDITED) Three Months Ended September 30 , Nine Months Ended September 30 , 2023 2022 2023 2022 Net income $ 56,302 $ 38,823 $ 209,913 $ 103,027 Interest expense, net 11,786 13,997 38,816 39,008 Income tax expense 13,783 13,258 69,904 37,960 Depreciation and amortization expense 15,622 16,474 46,423 49,723 EBITDA 97,493 82,552 365,056 229,718 EBITDA adjustments Stock-based incentive compensation 9,235 4,005 22,908 12,581 Restructuring, acquisition, integration and other (1) 3,029 (934 ) (74,383 ) 6,282 Adjusted EBITDA $ 109,757 $ 85,623 $ 313,581 $ 248,581 (1) Restructuring, acquisition, integration and other for the nine months ended September 30, 2023 includes the Amedisys merger termination fee, net of merger-related expenses Source: Option Care Health, Inc.

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