Option Care Health Reports Financial Results for Fourth Quarter and Full Year 2023

About this update from Option Care Health, Inc.

BANNOCKBURN, Ill. , Feb. 22, 2024 (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, 2023 . Fourth Quarter 2023 Financial Highlights Net revenue of $1,124.4 million , up 9.5% compared to $1,027.2 million in the fourth quarter of 2022 Gross profit of $247.1 million , or 22.0% of revenue, up 6.9% compared to $231.1 million , or 22.5% of revenue, in the fourth quarter of 2022 Net income of $57.2 million , or $0.32 earnings per share, inclusive of the impact from non-operating income, compared to net income of $47.5 million , or $0.26 earnings per share in the fourth quarter of 2022 Adjusted EBITDA of $111.6 million , up 18.4% compared to $94.3 million in the fourth quarter of 2022 Cash flow from operations of $51.0 million , and cash balances of $343.8 million at the end of the fourth quarter The Company announced that it fulfilled $250 million in share repurchases and the Board of Directors authorized an additional $250 million share repurchase authorization Full Year 2023 Financial Highlights Net revenue of $4,302.3 million , up 9.1% compared to $3,944.7 million in full year 2022 Gross profit of $981.2 million , or 22.8% of revenue, up 13.2% compared to $866.9 million , or 22.0% of revenue, in full year 2022 Net income of $267.1 million , or $1.48 diluted earnings per share, compared to net income of $150.6 million , or $0.83 earnings per share, in full year 2022 Adjusted EBITDA of $425.2 million , up 24.0% compared to $342.9 million in full year 2022 Cash flow from operations of $371.3 million , up 38.8% compared to $267.5 million in full year 2022 John C. Rademacher , Chief Executive Officer, commented, “The Option Care Health team delivered strong financial results in the fourth quarter and full year of 2023 and continued to execute on our commitment to clinical excellence by providing extraordinary patient care through our resilient national platform. The patient is at the center of everything we do, and I am excited to build on this momentum in 2024 to further our mission to provide innovative services that improve outcomes, reduce costs, and deliver hope for patients and families.” Full Year 2024 Financial Guidance For the full year 2024, Option Care Health expects to deliver the following financial results: Net revenue of $4.6 billion to $4.8 billion Adjusted EBITDA of $425 million to $450 million Cash flow from operations of at least $300 million Additionally, the Company anticipates an effective tax rate of 26% - 28% and net interest expense of approximately $55 million to $60 million. Conference Call Option Care Health will host a conference call to discuss its financial results later today at 8:30 a.m. EST . The conference call can be accessed 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 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 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: 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) December 31 , 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 343,849 $ 294,186 Accounts receivable, net 377,658 377,542 Inventories 274,004 224,281 Prepaid expenses and other current assets 98,744 98,330 Total current assets 1,094,255 994,339 NONCURRENT ASSETS: Property and equipment, net 120,630 108,321 Intangible assets, net 20,092 22,371 Referral sources, net 315,304 341,744 Goodwill 1,540,246 1,533,424 Other noncurrent assets 126,508 112,737 Total noncurrent assets 2,122,780 2,118,597 TOTAL ASSETS $ 3,217,035 $ 3,112,936 LIABILITIES AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 426,513 $ 378,763 Other current liabilities 191,796 186,588 Total current liabilities 618,309 565,351 NONCURRENT LIABILITIES: Long-term debt, net of discount, deferred financing costs and current portion 1,056,650 1,058,204 Other noncurrent liabilities 120,404 103,278 Total noncurrent liabilities 1,177,054 1,161,482 Total liabilities 1,795,363 1,726,833 STOCKHOLDERS' EQUITY 1,421,672 1,386,103 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 3,217,035 $ 3,112,936 Schedule 2 OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED) Three Months Ended December 31 , Year Ended December 31 , 2023 2022 2023 2022 NET REVENUE $ 1,124,390 $ 1,027,213 $ 4,302,324 $ 3,944,735 COST OF REVENUE 877,267 796,132 3,321,101 3,077,817 GROSS PROFIT 247,123 231,081 981,223 866,918 OPERATING COSTS AND EXPENSES: Selling, general and administrative expenses 147,783 148,351 607,427 566,122 Depreciation and amortization expense 14,784 14,538 59,201 60,565 Total operating expenses 162,567 162,889 666,628 626,687 OPERATING INCOME 84,556 68,192 314,595 240,231 OTHER INCOME (EXPENSE): Interest expense, net (12,432 ) (14,798 ) (51,248 ) (53,806 ) Other, net 6,801 11,387 95,395 19,343 Total other (expense) income (5,631 ) (3,411 ) 44,147 (34,463 ) INCOME BEFORE INCOME TAXES 78,925 64,781 358,742 205,768 INCOME TAX EXPENSE 21,748 17,252 91,652 55,212 NET INCOME $ 57,177 $ 47,529 $ 267,090 $ 150,556 Earnings per share, basic $ 0.32 $ 0.26 $ 1.49 $ 0.83 Earnings per share, diluted $ 0.32 $ 0.26 $ 1.48 $ 0.83 Weighted average common shares outstanding, basic 176,055 181,925 178,973 181,105 Weighted average common shares outstanding, diluted 177,743 183,086 180,375 182,075 Schedule 3 OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)(UNAUDITED) Year Ended December 31 , 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 267,090 $ 150,556 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization expense 62,200 65,434 Deferred income taxes - net 12,766 49,187 Other non-cash adjustments 50,684 32,147 Changes in operating assets and liabilities: Accounts receivable, net 224 (36,889 ) Inventories (51,000 ) (41,010 ) Accounts payable 47,703 98,885 Other (18,372 ) (50,763 ) Net cash provided by operating activities 371,295 267,547 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property and equipment (41,866 ) (35,358 ) Proceeds from sale of assets 3,743 14,670 Business acquisitions, net of cash acquired (12,494 ) (87,364 ) Other investing activities (5,889 ) — Net cash used in investing activities (56,506 ) (108,052 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from warrant exercises — 20,916 Purchase of company stock (250,261 ) — Other financing activities (14,865 ) (5,648 ) Net cash (used in) provided by financing activities (265,126 ) 15,268 NET INCREASE IN CASH AND CASH EQUIVALENTS 49,663 174,763 Cash and cash equivalents - beginning of the period 294,186 119,423 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 343,849 $ 294,186 Schedule 4 OPTION CARE HEALTH, INC. RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES (IN THOUSANDS)(UNAUDITED) Three Months Ended December 31, Year Ended December 31 , 2023 2022 2023 2022 Net income $ 57,177 $ 47,529 $ 267,090 $ 150,556 Interest expense, net 12,432 14,798 51,248 53,806 Income tax expense 21,748 17,252 91,652 55,212 Depreciation and amortization expense 15,777 15,711 62,200 65,434 EBITDA 107,134 95,290 472,190 325,008 EBITDA adjustments Stock-based incentive compensation expense 7,571 4,202 30,479 16,783 Gain on sale of assets — (10,325 ) — (10,325 ) Restructuring, acquisition, integration and other (1) (3,103 ) 5,105 (77,486 ) 11,387 Adjusted EBITDA $ 111,602 $ 94,272 $ 425,183 $ 342,853 (1) Restructuring, acquisition, integration and other for the year ended December 31, 2023 includes the Amedisys merger termination fee, net of merger-related expenses Source: Option Care Health, Inc.

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