Option Care Health Announces Financial Results for the Third Quarter Ended September 30, 2024
Option Care Health (OPCH) reported Q3 2024 financial results with net revenue of $1,278.5 million, up 17.0% year-over-year. However, gross profit margin decreased to 20.1% from 23.3% in Q3 2023. Net income declined 4.3% to $53.9 million. The company faced supply chain disruptions due to Hurricane Helene affecting IV solution bags availability. Updated 2024 guidance projects net revenue of $4.9-4.95 billion and Adjusted EBITDA of $438-443 million. Cash flow from operations significantly improved to $160.4 million compared to $61.0 million in Q3 2023.
Option Care Health (OPCH) ha riportato i risultati finanziari del Q3 2024 con un fatturato netto di 1.278,5 milioni di dollari, in aumento del 17,0% rispetto all'anno precedente. Tuttavia, il margine di profitto lordo è diminuito al 20,1% rispetto al 23,3% nel Q3 2023. L'utile netto è calato del 4,3% a 53,9 milioni di dollari. L'azienda ha affrontato interruzioni della catena di fornitura a causa dell'uragano Helene, che ha influito sulla disponibilità delle sacche per soluzioni IV. Le previsioni aggiornate per il 2024 prevedono un fatturato netto di 4,9-4,95 miliardi di dollari e un EBITDA rettificato di 438-443 milioni di dollari. Il flusso di cassa dalle operazioni è notevolmente migliorato, raggiungendo 160,4 milioni di dollari rispetto ai 61,0 milioni di dollari del Q3 2023.
Option Care Health (OPCH) reportó los resultados financieros del Q3 2024 con ingresos netos de 1.278,5 millones de dólares, un aumento del 17,0% en comparación con el año anterior. Sin embargo, el margen de utilidad bruta disminuyó al 20,1% desde el 23,3% en el Q3 2023. El ingreso neto se redujo un 4,3% a 53,9 millones de dólares. La empresa enfrentó interrupciones en la cadena de suministro debido al huracán Helene, que afectó la disponibilidad de bolsas de soluciones IV. Las proyecciones actualizadas para 2024 prevén ingresos netos de 4,9-4,95 mil millones de dólares y un EBITDA ajustado de 438-443 millones de dólares. El flujo de caja de las operaciones mejoró significativamente a 160,4 millones de dólares en comparación con los 61,0 millones de dólares del Q3 2023.
옵션 케어 헬스 (OPCH)는 2024년 3분기 재무 결과를 발표하며 순수익이 12억 7,850만 달러로, 전년 대비 17.0% 증가했다고 보고했습니다. 하지만 총이익률은 2023년 3분기 23.3%에서 20.1%로 감소했습니다. 순이익은 4.3% 감소하여 5,390만 달러에 달했습니다. 회사는 IV 용액 백의 가용성에 영향을 미친 허리케인 헬렌으로 인한 공급망 중단에 직면했습니다. 업데이트된 2024년 가이던스는 순수익을 49억-49억 5천만 달러, 조정된 EBITDA를 4억 3천 8백만-4억 4천 4백만 달러로 예상하고 있습니다. 운영으로 인한 현금 흐름은 2023년 3분기 6,100만 달러에 비해 1억 6,040만 달러로 크게 개선되었습니다.
Option Care Health (OPCH) a annoncé ses résultats financiers du T3 2024 avec un revenu net de 1,278.5 millions de dollars, soit une augmentation de 17,0 % par rapport à l'année précédente. Cependant, la marge brute a diminué à 20,1 % contre 23,3 % au T3 2023. Le bénéfice net a chuté de 4,3 % à 53,9 millions de dollars. L'entreprise a rencontré des perturbations de la chaîne d'approvisionnement dues à l'ouragan Helene, ce qui a affecté la disponibilité des sacs de solution IV. Les prévisions mises à jour pour 2024 projettent un revenu net de 4,9 à 4,95 milliards de dollars et un EBITDA ajusté de 438 à 443 millions de dollars. Le flux de trésorerie provenant des opérations s'est considérablement amélioré, atteignant 160,4 millions de dollars contre 61,0 millions de dollars au T3 2023.
Option Care Health (OPCH) hat die Finanzzahlen für das dritte Quartal 2024 veröffentlicht, mit einem Nettoumsatz von 1.278,5 Millionen Dollar, was einem Anstieg von 17,0% im Vergleich zum Vorjahr entspricht. Der Bruttogewinnmargen sank jedoch von 23,3% im dritten Quartal 2023 auf 20,1%. Der Nettogewinn fiel um 4,3% auf 53,9 Millionen Dollar. Das Unternehmen sah sich aufgrund des Hurrikans Helene, der die Verfügbarkeit von IV-Lösungsbeuteln beeinträchtigte, mit Störungen in der Lieferkette konfrontiert. Die aktualisierten Prognosen für 2024 sehen einen Nettoumsatz von 4,9-4,95 Milliarden Dollar und ein bereinigtes EBITDA von 438-443 Millionen Dollar vor. Der Cashflow aus dem operativen Geschäft verbesserte sich erheblich auf 160,4 Millionen Dollar im Vergleich zu 61,0 Millionen Dollar im dritten Quartal 2023.
- Net revenue increased 17.0% YoY to $1,278.5 million
- Adjusted EBITDA grew 5.3% to $115.6 million
- Cash flow from operations improved significantly to $160.4 million from $61.0 million
- Strong cash position with $483.0 million in cash and cash equivalents
- Gross profit margin declined from 23.3% to 20.1%
- Net income decreased 4.3% to $53.9 million
- Adjusted net income fell 3.2% to $70.7 million
- Supply chain disruptions due to Hurricane Helene expected to negatively impact Q4 results
Insights
Option Care Health's Q3 2024 results present a mixed picture. While revenue grew significantly by
The supply chain disruption from Hurricane Helene is particularly concerning, leading to downward guidance revisions. Strong cash flow generation of
The reduced guidance and ongoing supply chain issues could pressure the stock in the near term, though the company's market leadership and strong cash position provide stability for long-term operations.
The IV solution bag supply disruption following Hurricane Helene represents a significant operational challenge. This issue affects both existing patient care and new patient onboarding, particularly in acute therapies. The lack of clarity on resolution timing and the explicit acknowledgment of negative Q4 impact suggests this could be a multi-quarter challenge.
The industry-wide nature of this disruption may actually benefit Option Care Health's competitive position, as smaller providers might face even greater difficulties securing inventory. However, the company's scale and established manufacturer relationships will be important in navigating this shortage period. The situation requires careful inventory management and potential therapy prioritization strategies.
BANNOCKBURN, Ill., Oct. 30, 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 third quarter ended September 30, 2024.
Third Quarter 2024 Financial Results and Highlights
- Net revenue of
$1,278.5 million , up17.0% compared to$1,093.0 million in the third quarter of 2023 - Gross profit of
$256.7 million , or20.1% of net revenue, up1.0% compared to$254.3 million , or23.3% of net revenue, in the third quarter of 2023 - Net income of
$53.9 million , or$0.31 diluted earnings per share, down4.3% compared to net income of$56.3 million , or$0.31 diluted earnings per share, in the third quarter of 2023 - Adjusted net income of
$70.7 million , or$0.41 adjusted diluted earnings per share, down3.2% compared to adjusted net income of$73.1 million , or$0.40 adjusted diluted earnings per share, in the third quarter of 2023 - Adjusted EBITDA of
$115.6 million , up5.3% compared to$109.8 million in the third quarter of 2023 - Cash flow from operations of
$160.4 million , compared to$61.0 million in the third quarter of 2023 - Cash and cash equivalents balance of
$483.0 million at the end of the third quarter of 2024 - Repurchased approximately
$41.9 million of stock in the third quarter of 2024
John C. Rademacher, President and Chief Executive Officer, commented, “Once again, the Option Care Health team continued to perform and to focus on delivering extraordinary care to our patients in the face of several unique challenges in the third quarter as throughout 2024. I am proud of how our team responded to both natural disasters and recovery efforts, along with the strong third quarter financial results. The team remains resilient and focused on executing on our 2024 commitments by providing consistent high-quality care to our patients and reliable partnership to our referral sources.”
Option Care Health announced that it has experienced supply chain disruption related to the production of intravenous solution bags as a result of the aftermath of Hurricane Helene, which continues to impact its ability to support existing and new patients, primarily within its portfolio of acute therapies. The Company continues to monitor the situation closely and collaborate with manufacturers and distributors to secure available inventory. Based on current circumstances, the Company expects that the disruption will negatively impact the fourth quarter financial results and is considered in its updated 2024 guidance. At this point, Option Care Health is not in a position to provide specific expectations on the timing of ultimate resolution of this supply chain impact on its results.
Updated Full Year 2024 Financial Guidance
For the full year 2024, Option Care Health now expects to generate:
- Net revenue of
$4.9 billion to$4.95 billion - Adjusted EBITDA of
$438 million to$443 million - Cash flow from operations of at least
$300 million , consistent with previous guidance - Effective tax rate of
26% -28% , consistent with previous guidance - Net interest expense of approximately
$55 million to$60 million , consistent with previous guidance
Conference Call
Option Care Health will host a conference call to discuss its third quarter 2024 financial results later today at 8:30 a.m. ET. 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
Chief Financial Officer
T: (312) 940-2538
mike.shapiro@optioncare.com
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 SEC 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 net income, Adjusted EBITDA and Adjusted earnings per share ("Adjusted EPS"), which are non-GAAP financial measures. These adjusted measures are not measurements of financial performance under GAAP and should not be used in isolation or as a substitute or alternative to net income, earnings per share, 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 definitions of Adjusted net income, Adjusted EBITDA, and Adjusted EPS may not be comparable to similarly titled non-GAAP financial measures reported by other companies. As defined by the Company: (i) Adjusted net income represents net income before intangible asset amortization expense, stock-based compensation expense, and restructuring, acquisition, integration and other expenses, net of tax adjustments (ii) Adjusted EBITDA 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 expenses, and (iii) Adjusted earnings per share represents Adjusted net income divided by weighted average common shares outstanding, diluted. As part of restructuring, acquisition, 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, certain litigation expenses and reserves related to acquired businesses, potential retention and severance costs and potential accelerated payments or termination costs for certain of its contractual obligations. Management believes that these adjusted measures provide useful supplemental information regarding the performance of Option Care Health’s business operations and facilitate 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. Full reconciliations of each adjusted measure to the most comparable GAAP financial measure are set forth below.
Schedule 1
| OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS)(UNAUDITED) | |||||||
| September 30, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| CURRENT ASSETS: | |||||||
| Cash and cash equivalents | $ | 483,026 | $ | 343,849 | |||
| Accounts receivable, net | 428,951 | 377,658 | |||||
| Inventories | 310,599 | 274,004 | |||||
| Prepaid expenses and other current assets | 98,798 | 98,744 | |||||
| Total current assets | 1,321,374 | 1,094,255 | |||||
| NONCURRENT ASSETS: | |||||||
| Property and equipment, net | 125,911 | 120,630 | |||||
| Intangible assets, net | 17,768 | 20,092 | |||||
| Referral sources, net | 291,839 | 315,304 | |||||
| Goodwill | 1,540,246 | 1,540,246 | |||||
| Other noncurrent assets | 130,589 | 126,508 | |||||
| Total noncurrent assets | 2,106,353 | 2,122,780 | |||||
| TOTAL ASSETS | $ | 3,427,727 | $ | 3,217,035 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| CURRENT LIABILITIES: | |||||||
| Accounts payable | $ | 591,971 | $ | 426,513 | |||
| Other current liabilities | 171,253 | 191,796 | |||||
| Total current liabilities | 763,224 | 618,309 | |||||
| NONCURRENT LIABILITIES: | |||||||
| Long-term debt, net of discount, deferred financing costs and current portion | 1,105,106 | 1,056,650 | |||||
| Other noncurrent liabilities | 133,166 | 120,404 | |||||
| Total noncurrent liabilities | 1,238,272 | 1,177,054 | |||||
| Total liabilities | 2,001,496 | 1,795,363 | |||||
| STOCKHOLDERS’ EQUITY | 1,426,231 | 1,421,672 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 3,427,727 | $ | 3,217,035 | |||
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, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| NET REVENUE | $ | 1,278,546 | $ | 1,093,014 | $ | 3,651,784 | $ | 3,177,934 | |||||||
| COST OF REVENUE | 1,021,797 | 838,748 | 2,907,170 | 2,443,834 | |||||||||||
| GROSS PROFIT | 256,749 | 254,266 | 744,614 | 734,100 | |||||||||||
| OPERATING COSTS AND EXPENSES: | |||||||||||||||
| Selling, general and administrative expenses | 156,999 | 158,214 | 465,524 | 459,644 | |||||||||||
| Depreciation and amortization expense | 14,659 | 15,005 | 44,294 | 44,417 | |||||||||||
| Total operating expenses | 171,658 | 173,219 | 509,818 | 504,061 | |||||||||||
| OPERATING INCOME | 85,091 | 81,047 | 234,796 | 230,039 | |||||||||||
| OTHER INCOME (EXPENSE): | |||||||||||||||
| Interest expense, net | (12,345 | ) | (11,786 | ) | (38,150 | ) | (38,816 | ) | |||||||
| Other, net | 808 | 824 | 5,904 | 88,594 | |||||||||||
| Total other (expense) income | (11,537 | ) | (10,962 | ) | (32,246 | ) | 49,778 | ||||||||
| INCOME BEFORE INCOME TAXES | 73,554 | 70,085 | 202,550 | 279,817 | |||||||||||
| INCOME TAX EXPENSE | 19,698 | 13,783 | 50,860 | 69,904 | |||||||||||
| NET INCOME | $ | 53,856 | $ | 56,302 | $ | 151,690 | $ | 209,913 | |||||||
| Earnings per share, basic | $ | 0.32 | $ | 0.31 | $ | 0.88 | $ | 1.17 | |||||||
| Earnings per share, diluted | $ | 0.31 | $ | 0.31 | $ | 0.87 | $ | 1.16 | |||||||
| Weighted average common shares outstanding, basic | 170,636 | 178,826 | 172,490 | 179,956 | |||||||||||
| Weighted average common shares outstanding, diluted | 171,941 | 180,528 | 173,848 | 181,286 | |||||||||||
Schedule 3
| OPTION CARE HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)(UNAUDITED) | |||||||
| Nine Months Ended September 30, | |||||||
| 2024 | 2023 | ||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
| Net income | $ | 151,690 | $ | 209,913 | |||
| Adjustments to reconcile net income to net cash provided by operations: | |||||||
| Depreciation and amortization expense | 46,029 | 46,423 | |||||
| Other non-cash adjustments | 54,926 | 54,259 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | (51,293 | ) | (5,075 | ) | |||
| Inventories | (36,595 | ) | (28,362 | ) | |||
| Accounts payable | 164,754 | 50,726 | |||||
| Accrued compensation and employee benefits | (31,673 | ) | 4,197 | ||||
| Prepaid expenses and other current assets | (3,175 | ) | 3,197 | ||||
| Other | (7,393 | ) | (14,952 | ) | |||
| Net cash provided by operating activities | 287,270 | 320,326 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
| Acquisition of property and equipment | (25,266 | ) | (21,981 | ) | |||
| Business acquisitions, net of cash acquired | — | (12,855 | ) | ||||
| Other investing activities | — | (5,889 | ) | ||||
| Net cash used in investing activities | (25,266 | ) | (40,725 | ) | |||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
| Purchase of company stock | (160,122 | ) | (175,108 | ) | |||
| Proceeds from issuance of debt | 49,959 | — | |||||
| Other financing cash flows | (12,664 | ) | (12,190 | ) | |||
| Net cash used in financing activities | (122,827 | ) | (187,298 | ) | |||
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 139,177 | 92,303 | |||||
| Cash and cash equivalents - beginning of the period | 343,849 | 294,186 | |||||
| CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | 483,026 | $ | 386,489 | |||
Schedule 4
| OPTION CARE HEALTH, INC. QUARTERLY RECONCILIATION BETWEEN GAAP AND NON-GAAP MEASURES (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)(UNAUDITED) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net income | $ | 53,856 | $ | 56,302 | $ | 151,690 | $ | 209,913 | |||||||
| Interest expense, net | 12,345 | 11,786 | 38,150 | 38,816 | |||||||||||
| Income tax expense | 19,698 | 13,783 | 50,860 | 69,904 | |||||||||||
| Depreciation and amortization expense | 15,227 | 15,622 | 46,029 | 46,423 | |||||||||||
| EBITDA | 101,126 | 97,493 | 286,729 | 365,056 | |||||||||||
| EBITDA adjustments | |||||||||||||||
| Stock-based incentive compensation | 10,407 | 9,235 | 27,620 | 22,908 | |||||||||||
| Loss on extinguishment of debt | — | — | 377 | — | |||||||||||
| Restructuring, acquisition, integration and other (1) | 4,050 | 3,029 | 7,504 | (74,383 | ) | ||||||||||
| Adjusted EBITDA | $ | 115,583 | $ | 109,757 | $ | 322,230 | $ | 313,581 | |||||||
| Net income | $ | 53,856 | $ | 56,302 | $ | 151,690 | $ | 209,913 | |||||||
| Intangible asset amortization expense | 8,596 | 8,641 | 25,809 | 25,752 | |||||||||||
| Stock-based incentive compensation | 10,407 | 9,235 | 27,620 | 22,908 | |||||||||||
| Restructuring, acquisition, integration and other (1) | 4,050 | 3,029 | 7,504 | (74,383 | ) | ||||||||||
| Total pre-tax adjustments | 23,053 | 20,905 | 60,933 | (25,723 | ) | ||||||||||
| Tax adjustments (2) | (6,178 | ) | (4,118 | ) | (15,294 | ) | 6,431 | ||||||||
| Adjusted net income | $ | 70,731 | $ | 73,089 | $ | 197,329 | $ | 190,621 | |||||||
| Earnings per share, diluted | $ | 0.31 | $ | 0.31 | $ | 0.87 | $ | 1.16 | |||||||
| Adjusted earnings per share, diluted | $ | 0.41 | $ | 0.40 | $ | 1.14 | $ | 1.05 | |||||||
| Weighted average common shares outstanding, diluted | 171,941 | 180,528 | 173,848 | 181,286 | |||||||||||
(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
(2) Tax adjustments for the three and nine months ended September 30, 2024 and 2023 includes the estimated income tax effect on non-GAAP adjustments based on the effective tax rate
FAQ
What was Option Care Health's (OPCH) revenue growth in Q3 2024?
How did Hurricane Helene affect Option Care Health's (OPCH) operations?
What is Option Care Health's (OPCH) updated revenue guidance for 2024?
How much stock did Option Care Health (OPCH) repurchase in Q3 2024?
