Option Care Health Announces Third Quarter Results

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.

Transaction Highlights

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.

Conference Call

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 .

Investor s

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