To participate in the conference call, please register here before the 8:30 a.m. ET start. A live and archived webcast of the call will be available on the Company's investor relations website at https://ir.brightspringhealth.com under the "Events & Presentations" section, where related presentation materials will be posted prior to the conference call. The webcast may be accessed directly here. BrightSpring Health Services is the parent company of leading healthcare service lines that provide complementary ...

To participate in the conference call, please register here before the 8:30 a.m. ET start. A live and archived webcast of the call will be available on the Company's investor relations website at https://ir.brightspringhealth.com under the "Events & Presentations" section, where related presentation materials will be posted prior to the conference call. The webcast may be accessed directly here. BrightSpring Health Services is the parent company of leading healthcare service lines that provide complementary ...

BrightSpring Health Services, Inc. (NASDAQ:BTSG) Q1 2024 Earnings Conference Call May 2, 2024 8:30 AM ET Company Participants Jennifer Phipps - Chief Accounting Officer Jon Rousseau - President and CEO Jim Mattingly - CFO Conference Call Participants Jamie Perse - Goldman Sachs Brian Tanquilut - Jefferies Linda Bolduc - Morgan Stanley Whit Mayo - Leerink Partners Unidentified Analyst - Bank of America Ann Hynes - Mizuho Securities Jack Wallace - Guggenheim Securities Kieran Ryan - Deutsche Bank Operator Goo ...

BRIGHTSPRING HEALTH SERVICES 1 First Quarter 2024 Earnings Presentation May 2, 2024 Forward-Looking Statements; Non-GAAP Financial Information | --- | --- | |------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41938 BrightSpring Health Services, Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 82-2956404 | | --- | ...

LOUISVILLE, Ky., May 2, 2024 — BrightSpring Health Services, Inc. ("BrightSpring" or the "Company") (NASDAQ: BTSG), a leading provider of home and community-based health services for complex populations, today announced financial results for the first quarter ended March 31, 2024, and increases 2024 revenue and Adjusted EBITDA 1 guidance. Financial Highlights "We are pleased with the strong revenue and adjusted EBITDA growth in both our Pharmacy and Provider segments during the first quarter of 2024 and are ...

PART I [Business](index=8&type=section&id=Item%201.%20Business) BrightSpring Health Services is a leading US home and community-based healthcare platform, serving over 400,000 complex patients daily across two integrated segments - BrightSpring is a leading home and community-based healthcare services platform serving over **400,000 patients daily** across all 50 states, focusing on complex Senior and Specialty populations[26](index=26&type=chunk) - The company's integrated model combines pharmacy services (medication therapy management, infusion) and provider services (home health, hospice, rehab) to address multiple patient needs and reduce overall healthcare costs[28](index=28&type=chunk)[29](index=29&type=chunk) Segment Revenue and EBITDA (FY 2023) | Segment | Revenue (in millions) | % of Total Revenue | Segment EBITDA (in millions) | % of Total Segment EBITDA | | :--- | :--- | :--- | :--- | :--- | | **Pharmacy Solutions** | $6,522.5 | 73.9% | $371.0 | 54.7% | | **Provider Services** | $2,303.7 | 26.1% | $306.8 | 45.3% | Key Financial Performance (2021-2023) | Metric | 2021 | 2023 | | :--- | :--- | :--- | | **Revenue** | $6,698.1 million | $8,826.2 million | | **Net Income (Loss)** | $51.2 million | $(156.8) million | | **Adjusted EBITDA** | $493.1 million | $537.8 million | [Our Platform](index=16&type=section&id=Our%20Platform) The platform operates through Pharmacy Solutions and Provider Services segments across all 50 states, leveraging integrated care enablers for value-based models - The company operates through **two reportable segments**: Pharmacy Solutions and Provider Services, with a presence in **all 50 states** and co-location of services in **40 states**[68](index=68&type=chunk) - The integrated care model is built on **three enablers**: home-based primary care, a transitional care management program (CCRx), and a clinical care coordination hub[69](index=69&type=chunk) - Pharmacy Solutions filled over **37 million prescriptions** in 2023 from over **180 pharmacies**, serving approximately **6,000 customer locations** and over **350,000 patients**[70](index=70&type=chunk) - Provider Services delivers clinical and supportive care to over **34,000 Senior and Specialty patients**, with Home Health Care census and rehab hours served growing approximately **10%** from December 2022 to December 2023[79](index=79&type=chunk) [Our Growth Strategy](index=26&type=section&id=Our%20Growth%20Strategy) The growth strategy focuses on organic expansion, leveraging the integrated platform for value-based care, and strategic M&A, including at least 20 new locations annually - The company plans to drive organic growth through market penetration, favorable demographic trends, de novo expansions (targeting at least **20 new locations per year**), and a stable reimbursement environment[110](index=110&type=chunk)[111](index=111&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk) - A key strategy is to leverage complementary services and care management enablers (home-based primary care, CCRx, clinical hub) to increase **integrated and value-based care contracts** with payors[116](index=116&type=chunk)[117](index=117&type=chunk)[118](index=118&type=chunk) - The company will continue to execute strategic and accretive M&A, leveraging its experience as a proven consolidator in fragmented markets. Since 2018, it has completed **59 acquisitions**[123](index=123&type=chunk)[125](index=125&type=chunk) [Regulation](index=35&type=section&id=Regulation) The company operates under extensive federal and state healthcare regulations, including Anti-Kickback, Stark Law, False Claims Act, and HIPAA, with non-compliance risking severe penalties - The company is subject to the federal Anti-Kickback Statute, which prohibits offering or receiving remuneration to induce referrals for services paid by federal healthcare programs. Violations can lead to criminal penalties, fines up to **$100,000** per kickback, and exclusion from Medicare/Medicaid[161](index=161&type=chunk)[162](index=162&type=chunk) - The Stark Law prohibits physicians from referring Medicare or Medicaid patients to entities for designated health services if they have a financial relationship with the entity. It is a strict liability statute, and violations can result in denial of payment, refunds, and civil penalties up to **$27,750** per service[166](index=166&type=chunk)[167](index=167&type=chunk) - The False Claims Act imposes liability for knowingly submitting false claims to the government. Penalties range from **$13,508 to $27,081** per false claim, plus up to three times the government's damages[171](index=171&type=chunk)[172](index=172&type=chunk) - The company must comply with HIPAA, which governs the privacy and security of Protected Health Information (PHI). Violations can result in **significant civil or criminal penalties**, and the company must notify affected individuals of data breaches[186](index=186&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) [Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial business, regulatory, and financial risks, including intense competition, reimbursement changes, compliance issues, and high indebtedness [Risks Related to Our Business](index=46&type=section&id=Risks%20Related%20to%20Our%20Business) Business risks include intense competition, reliance on Medicare/Medicaid reimbursement, labor shortages, IT system failures, and cybersecurity threats, impacting operations and profitability - The company operates in a **highly competitive industry** and faces pressure on pricing, market share, and patient retention from competitors who may have greater resources or established local relationships[210](index=210&type=chunk)[211](index=211&type=chunk) - A **substantial portion of revenue** is derived from Medicare and Medicaid, making the business highly sensitive to changes in government reimbursement rates, payment methodologies, and program funding[216](index=216&type=chunk) - The business relies on the continual recruitment and retention of qualified personnel, such as nurses and pharmacists. **Labor shortages and increasing wage requirements** could adversely impact operations and profitability[246](index=246&type=chunk)[248](index=248&type=chunk) - Cybersecurity breaches and data loss pose a significant risk, potentially compromising sensitive patient information, leading to liability, litigation, and reputational damage. A ransomware attack in March 2023 resulted in a breach of over **6 million individuals' information**[277](index=277&type=chunk)[279](index=279&type=chunk) [Risks Related to Our Regulatory Framework](index=69&type=section&id=Risks%20Related%20to%20Our%20Regulatory%20Framework) Regulatory risks stem from complex federal and state healthcare laws, including Anti-Kickback, Stark Law, False Claims Act, and HIPAA, with non-compliance leading to severe penalties and operational impact - The business is subject to extensive federal and state regulations, and failure to comply can result in **severe sanctions**, including termination from Medicare/Medicaid programs, loss of licenses, and civil or criminal penalties[305](index=305&type=chunk)[306](index=306&type=chunk) - Key fraud and abuse laws, including the **Anti-Kickback Statute and Stark Law**, create risks related to relationships with physicians and other referral sources. Violations can lead to significant liability under the **False Claims Act**[309](index=309&type=chunk)[310](index=310&type=chunk) - State **Certificate of Need (CON) laws** may restrict the ability to expand into new markets or add services, thereby limiting growth opportunities[313](index=313&type=chunk)[314](index=314&type=chunk) - The company is subject to **governmental audits and investigations** (e.g., RAC, TPE, UPIC programs) which can result in demands for refunds of alleged overpayments and other sanctions[331](index=331&type=chunk)[333](index=333&type=chunk) [Risks Related to Our Indebtedness](index=78&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) High indebtedness of approximately $3.4 billion as of December 31, 2023, poses significant financial risk, consuming cash flow, imposing restrictive covenants, and exposing the company to variable interest rate fluctuations - As of December 31, 2023, the company had approximately **$3.4 billion** in total debt, requiring a substantial portion of cash flow for debt service payments[24](index=24&type=chunk)[337](index=337&type=chunk) - Debt agreements contain **restrictive covenants** that limit the company's ability to incur more debt, sell assets, make investments, and pay dividends, potentially hindering operational flexibility and growth[348](index=348&type=chunk)[350](index=350&type=chunk) - Borrowings under the First and Second Lien Facilities are at **variable interest rates**, exposing the company to risk from rising interest rates, which could significantly increase debt service obligations[352](index=352&type=chunk) [Cybersecurity](index=88&type=section&id=Item%201C.%20Cybersecurity) Cybersecurity risks are managed through an ERM program overseen by the Board and CDTO, incorporating technical safeguards, employee training, and third-party expertise - Cybersecurity is managed through an **Enterprise Risk Management (ERM)** approach with oversight from the Board of Directors and the Audit Committee[386](index=386&type=chunk)[392](index=392&type=chunk) - The program is led by the **Chief Digital & Technology Officer (CDTO)** and includes technical safeguards, employee training, and engagement with third-party cybersecurity experts for evaluation and support[389](index=389&type=chunk)[390](index=390&type=chunk)[393](index=393&type=chunk) - As of the report date, the company is **not aware of any cybersecurity incidents that have materially affected** or are reasonably likely to materially affect its business, strategy, or financial condition[391](index=391&type=chunk) [Legal Proceedings](index=90&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in various legal proceedings, notably agreeing to settle the Marc Silver v. PharMerica case for an estimated $115.0 million in November 2023 - In November 2023, the company agreed to settle the **Marc Silver v. PharMerica case**, which alleged violations of the False Claims Act and Anti-Kickback Statute[398](index=398&type=chunk)[399](index=399&type=chunk) - The estimated financial impact of the settlement is **$115.0 million**, which was accrued in 2023. The settlement is pending approval from the Department of Justice and the District Court[399](index=399&type=chunk) PART II [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=93&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In FY2023, revenue grew 14.3% to $8.8 billion, but a net loss of $156.8 million resulted from higher costs and interest, while Adjusted EBITDA increased 2.9% to $537.8 million [Results of Operations](index=106&type=section&id=Results%20of%20Operations) In 2023, total revenues increased 14.3% to $8.83 billion, but operating income decreased 21.6% to $147.2 million, leading to a net loss of $156.8 million due to higher costs and interest Consolidated Results of Operations (2023 vs. 2022) | Metric (in millions) | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | $8,826.2 | $7,720.6 | 14.3% | | **Gross Profit** | $1,433.8 | $1,354.2 | 5.9% | | **Operating Income** | $147.2 | $187.8 | (21.6)% | | **Interest Expense, net** | $324.6 | $233.6 | 39.0% | | **Net Loss** | $(156.8) | $(54.2) | n.m. | | **Adjusted EBITDA** | $537.8 | $522.5 | 2.9% | - The **14.3%** increase in SG&A expenses in 2023 was primarily driven by a **$118.5 million** increase in legal costs, mainly related to the Silver settlement[486](index=486&type=chunk) - Net interest expense increased by **$91.0 million (39.0%)** in 2023 due to higher variable interest rates on outstanding debt[488](index=488&type=chunk) [Segment Results of Operations](index=111&type=section&id=Segment%20Results%20of%20Operations) Pharmacy Solutions revenue grew 23.9% to $6.52 billion with 7.7% EBITDA growth, while Provider Services revenue increased 5.6% to $2.30 billion with 6.2% EBITDA growth Pharmacy Solutions Segment Performance (2023 vs. 2022) | Metric (in millions) | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $6,522.5 | $5,264.4 | 23.9% | | **Gross Profit** | $681.7 | $629.0 | 8.4% | | **Segment EBITDA** | $371.0 | $344.5 | 7.7% | Provider Services Segment Performance (2023 vs. 2022) | Metric (in millions) | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | **Revenues** | $2,303.7 | $2,181.5 | 5.6% | | **Gross Profit** | $752.1 | $689.5 | 9.1% | | **Segment EBITDA** | $306.8 | $288.8 | 6.2% | [Liquidity and Capital Resources](index=117&type=section&id=Liquidity%20and%20Capital%20Resources) Total liquidity increased to $431.5 million by December 31, 2023, with net cash from operations at $210.8 million, and IPO proceeds used to significantly reduce $3.4 billion in debt Total Liquidity | (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Revolving Credit & LC Facility Availability | $418,389 | $241,300 | | End of period cash balance | $13,071 | $13,628 | | **Total Liquidity, end of period** | **$431,460** | **$254,928** | Cash Flow Summary | (in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | $210,783 | $(4,653) | $270,165 | | **Net cash (used in) from investing activities** | $(134,433) | $45,356 | $(1,190,652) | | **Net cash (used in) from financing activities** | $(76,907) | $(73,810) | $705,217 | - Total debt outstanding was **$3.41 billion** as of December 31, 2023. Subsequent to year-end, IPO proceeds were used to repay **all Second Lien debt**, **all Revolver borrowings**, and **$343.3 million** of the First Lien facility[556](index=556&type=chunk)[563](index=563&type=chunk)[570](index=570&type=chunk) [Financial Statements and Supplementary Data](index=128&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for 2021-2023, including Balance Sheets, Statements of Operations, and Cash Flows, with accompanying notes [Consolidated Balance Sheets](index=131&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023, total assets were $5.53 billion, with total liabilities at $4.92 billion, and shareholders' equity decreased to $584.7 million due to the net loss Consolidated Balance Sheet Highlights (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $1,456,641 | $1,344,256 | | **Goodwill** | $2,608,412 | $2,576,081 | | **Total Assets** | **$5,532,721** | **$5,441,138** | | **Total Current Liabilities** | $1,248,437 | $932,508 | | **Long-term debt, net** | $3,331,941 | $3,364,302 | | **Total Liabilities** | **$4,920,172** | **$4,657,056** | | **Total Shareholders' Equity** | $584,740 | $754,776 | [Consolidated Statements of Operations](index=132&type=section&id=Consolidated%20Statements%20of%20Operations) In FY2023, total revenues reached $8.83 billion, but operating income declined to $147.2 million, resulting in a net loss of $156.8 million after $324.6 million in net interest expense Consolidated Statement of Operations (in thousands) | Line Item | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Total revenues** | $8,826,175 | $7,720,560 | $6,698,082 | | **Gross profit** | $1,433,794 | $1,354,244 | $1,248,211 | | **Operating income** | $147,180 | $187,830 | $234,184 | | **Net (loss) income** | $(156,835) | $(54,219) | $51,262 | | **(Loss) earnings per share - diluted** | $(1.31) | $(0.46) | $0.41 | PART III [Directors, Executive Officers and Corporate Governance](index=170&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section outlines the company's leadership, including CEO Jon Rousseau, its "controlled company" status under Nasdaq rules, and the structure of its Board committees - The company's executive team is led by **Jon Rousseau**, Chairman, President, and CEO, and **Jim Mattingly**, Executive Vice President and CFO[824](index=824&type=chunk)[825](index=825&type=chunk)[826](index=826&type=chunk) - The company is a **"controlled company"** under Nasdaq rules because KKR Stockholder and Walgreen Stockholder collectively own **more than 50% of the voting power**, allowing it to be exempt from certain governance requirements like having a majority-independent board[841](index=841&type=chunk) - The Board of Directors has **three standing committees**: Audit, Compensation, and Quality & Compliance and Governance[843](index=843&type=chunk) [Executive Compensation](index=176&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation for 2023 included base salaries, performance-based cash incentives, and equity awards, with the company transitioning to new public company compensation practices post-IPO 2023 Named Executive Officer Compensation Summary | Name | Title | 2023 Total Compensation ($) | | :--- | :--- | :--- | | **Jon Rousseau** | President and CEO | 18,348,831 | | **Jim Mattingly** | EVP and CFO | 908,957 | | **Steven Reed** | CLO and Corp. Secretary | 761,659 | | **Bob Barnes** | President, Community Living | 744,696 | | **Jennifer Yowler** | President, PharMerica | 733,956 | - The annual cash incentive program (BHS STIC) for 2023 was based on a **balanced scorecard** of performance goals, including EBITDA, quality, people, efficiency, and growth metrics[871](index=871&type=chunk)[873](index=873&type=chunk) - In November 2023, the Board approved the cancellation of **628,108 vested stock options** held by CEO Jon Rousseau in exchange for a cash payment of **$10 million**, and simultaneously granted him **628,108 new time-vesting stock options**[897](index=897&type=chunk) - In connection with the IPO, the company adopted a **new 2024 Equity Incentive Plan** and granted approximately **$63.3 million** in new equity awards to management and employees[463](index=463&type=chunk)[906](index=906&type=chunk)[907](index=907&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=197&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) As of March 1, 2024, KKR Stockholder and Walgreen Stockholder are major beneficial owners with 47.5% and 20.4% respectively, controlling a majority of voting power Beneficial Ownership (as of March 1, 2024) | Beneficial Owner | % Shares Beneficially Owned | | :--- | :--- | | **KKR Stockholder** | 47.5% | | **Walgreen Stockholder** | 20.4% | | **Jon Rousseau (CEO)** | 1.6% | | **All Directors and Executive Officers as a group** | 2.5% | [Certain Relationships and Related Transactions, and Director Independence](index=199&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engages in significant related party transactions with KKR and Walgreen Stockholder affiliates, including advisory fees, inventory purchases, and financing activities - A Monitoring Agreement with KKR and Walgreens required an annual advisory fee (1% of Consolidated EBITDA), which was **$5.6 million** in 2023. This agreement terminated upon the IPO, triggering a **$22.7 million** termination fee[973](index=973&type=chunk)[974](index=974&type=chunk) - The company purchases significant volumes of pharmaceutical inventory through agreements with affiliates of Walgreen Stockholder. In 2023, purchases under these agreements totaled approximately **$1.6 billion**[977](index=977&type=chunk)[978](index=978&type=chunk) - KKR Capital Markets, an affiliate of KKR, acted as an underwriter for the IPO and received **$7.4 million** in underwriting discounts and commissions. It also received fees for prior financing transactions[805](index=805&type=chunk)[975](index=975&type=chunk)[976](index=976&type=chunk) [Principal Accountant Fees and Services](index=201&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) In FY2023, KPMG LLP billed the company a total of $3.23 million for services, including $2.95 million for audit fees, all pre-approved by the audit committee Accountant Fees (Fiscal Years 2023 & 2022) | Fee Category | 2023 | 2022 | | :--- | :--- | :--- | | **Audit Fees** | $2,953,000 | $2,217,500 | | **Audit-Related Fees** | $50,000 | $40,000 | | **Tax Fees** | $222,000 | $726,003 | | **All Other Fees** | $3,650 | $3,650 | | **Total Fees** | **$3,228,650** | **$2,987,153** | PART IV [Exhibits and Financial Statement Schedules](index=203&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists financial statements from Item 8 and provides a comprehensive index of all exhibits filed, including corporate governance and debt agreements - This section provides an **index of all exhibits** filed with the Form 10-K, including the Second Amended and Restated Certificate of Incorporation, debt agreements, material contracts like the Stockholders' Agreement, and various employment agreements[995](index=995&type=chunk)[996](index=996&type=chunk)[997](index=997&type=chunk)

BrightSpring Health Services, Inc. (NASDAQ:BTSG) Q4 2023 Earnings Conference Call February 29, 2024 8:30 AM ET Corporate Participants Jennifer Phipps - Chief Accounting Officer Jon Rousseau - President and Chief Executive Officer Jim Mattingly - Chief Financial Officer Conference Call Participants Jamie Perse - Goldman Sachs Brian Tanquilut - Jefferies AJ Rice - UBS Joanna Gajuk - Bank of America Whit Mayo - Leerink Partners Stephen Baxter - Wells Fargo Ann Hynes - Mizuho Securities Jack Wallace - Guggenhe ...

Exhibit 99.1 BrightSpring Health Services, Inc. Reports Financial Results for Fourth Quarter and Full Year 2023 and Provides Full Year 2024 Guidance LOUISVILLE, Ky., Feb. 29, 2024 (GLOBE NEWSWIRE) — BrightSpring Health Services, Inc. ("BrightSpring" or the "Company") (NASDAQ: BTSG) announced today financial results for the fourth quarter and full year ended December 31, 2023. Fourth Quarter 2023 Financial Highlights Full Year 2023 Financial Highlights Jon Rousseau, Chief Executive Officer, stated, "I am pro ...