UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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 June 30, 2021 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: 001-11993 OPTION CARE HEALTH, INC. (Exact name of registrant as specified in its charter) (State of incorporation) (I.R.S. Employer ...

Option Care Health, Inc. (NASDAQ:OPCH) Q1 2021 Earnings Conference Call May 6, 2021 8:30 AM ET Company Participants John Rademacher - CEO Michael Shapiro - CFO Conference Call Participants David MacDonald - Truist Securities Matthew Larew - William Blair & Company Brooks O'Neil - Lake Street Capital Markets Michael Petusky - Barrington Research Associates Jamie Perse - Goldman Sachs Operator Hello, and welcome to the Option Care Health First Quarter 2021 Earnings Conference Call. My name is Michelle, and I ...

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Option Care Health reported a 7.6% increase in Q1 2021 net revenue to **$759.2 million**, reducing net loss to **$2.9 million** [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2021, total assets were **$2.64 billion**, with liabilities decreasing and equity slightly increasing Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $664,734 | $657,012 | | **Total Assets** | **$2,640,470** | **$2,647,439** | | **Total Current Liabilities** | $420,164 | $434,023 | | **Total Liabilities** | **$1,622,390** | **$1,631,715** | | **Total Stockholders' Equity** | **$1,018,080** | **$1,015,724** | [Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Q1 2021 net revenue increased 7.6% to **$759.2 million**, operating income surged, and net loss significantly improved Q1 2021 vs Q1 2020 Performance (in thousands, except per share data) | Metric | Q1 2021 | Q1 2020 | | :--- | :--- | :--- | | **Net Revenue** | $759,237 | $705,440 | | **Gross Profit** | $165,473 | $158,029 | | **Operating Income** | $29,094 | $8,648 | | **Net Loss** | $(2,861) | $(19,910) | | **Loss per Share (basic & diluted)** | $(0.02) | $(0.11) | [Unaudited Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was stable at **$18.4 million**, with decreased investing and increased financing outflows Cash Flow Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $18,380 | $18,403 | | **Net cash used in investing activities** | $(3,123) | $(5,353) | | **Net cash used in financing activities** | $(5,160) | $(2,862) | | **Cash and cash equivalents - end of period** | $109,362 | $77,244 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail infusion therapy business, revenue concentration, a **$12.4 million** debt extinguishment loss, and a subsequent acquisition - The company operates in a single segment, infusion services, through a national network of 98 full-service pharmacies[17](index=17&type=chunk) - Revenue from the company's largest payer was approximately **16%** for Q1 2021. Approximately **67%** of pharmaceutical and medical supply purchases were from three vendors[24](index=24&type=chunk)[27](index=27&type=chunk) - In January 2021, the company refinanced its debt, issuing an additional **$250.0 million** in First Lien Term Loan to prepay the remaining **$245.8 million** of Second Lien Notes, and reduced the interest rate on the First Lien Term Loan[43](index=43&type=chunk) - A loss on extinguishment of debt of **$12.4 million** was recognized in Q1 2021 related to the debt refinancing[45](index=45&type=chunk) - On April 7, 2021, the company acquired certain assets from BioCure, LLC for a purchase price of **$18.5 million**[66](index=66&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported a 7.6% increase in Q1 2021 net revenue to **$759.2 million**, with improved net loss from reduced expenses and stable cash flow [Update on the Impact of the COVID-19 Pandemic](index=20&type=section&id=Update%20on%20the%20Impact%20of%20the%20COVID-19%20Pandemic) COVID-19 impacted referrals, offset by transfers; acute revenues flat, chronic grew, with clinical labor cost inefficiencies - The pandemic negatively affected new patient referrals but was offset by an increase in patient transfers from hospitals[75](index=75&type=chunk) - In Q1 2021, acute revenues were flat YoY, while chronic revenue experienced low double-digit growth[75](index=75&type=chunk) - The company continued to face cost inefficiencies related to clinical labor and staffing challenges during the quarter[76](index=76&type=chunk) [Results of Operations](index=22&type=section&id=Results%20of%20Operations) Q1 2021 net revenue grew 7.6% to **$759.2 million**, operating expenses down 8.7%, improving net loss to **$2.9 million** Q1 2021 vs Q1 2020 Results of Operations (in thousands) | Metric | Q1 2021 | Q1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | **Net Revenue** | $759,237 | $705,440 | 7.6% | | **Gross Profit** | $165,473 | $158,029 | 4.7% | | **Total Operating Expenses** | $136,379 | $149,381 | (8.7)% | | **Operating Income** | $29,094 | $8,648 | 236.4% | | **Interest Expense, net** | $(19,481) | $(28,087) | (30.6)% | | **Net Loss** | $(2,861) | $(19,910) | (85.6)% | - The decrease in selling, general and administrative expenses was due to a full period of synergy realization from Merger integration activities[92](index=92&type=chunk) - Other expense increased significantly due to a **$12.4 million** loss on extinguishment of debt incurred in Q1 2021 from the debt refinancing[96](index=96&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2021, liquidity included **$109.4 million** cash and **$165.4 million** credit, with debt refinancing reducing rates - Primary liquidity sources as of March 31, 2021, were **$109.4 million** in cash and **$165.4 million** available under its credit facilities[101](index=101&type=chunk)[105](index=105&type=chunk) - In Q1 2021, the company used proceeds from an additional **$250.0 million** of First Lien Term Loan indebtedness to prepay the remaining **$245.8 million** balance of the Second Lien Notes[108](index=108&type=chunk) - The debt refinancing reduced the interest rate on all outstanding First Lien Term Loan indebtedness from LIBOR plus 4.25% to LIBOR plus 3.75%[108](index=108&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk exposure were reported since the year-end 2020 Form 10-K - No material changes to market risk exposure were reported since the year-end 2020 Form 10-K[121](index=121&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of March 31, 2021, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2021[122](index=122&type=chunk) - There were no changes in internal control over financial reporting during Q1 2021 that had a material effect[123](index=123&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in normal course legal proceedings, not expected to materially affect its financial condition - The company is involved in legal proceedings in the normal course of business but does not expect them to have a material adverse effect on its condensed consolidated balance sheets[58](index=58&type=chunk)[126](index=126&type=chunk) [Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2020 - No material changes to risk factors were reported since the Annual Report on Form 10-K for the year ended December 31, 2020[127](index=127&type=chunk) [Exhibits](index=30&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreement amendments and certifications - Exhibits filed include amendments to the First Lien Credit Agreement and ABL Credit Agreement, as well as Sarbanes-Oxley certifications[129](index=129&type=chunk)

Financial Data and Key Metrics Changes - Revenue in Q4 2020 was $805 million, growing more than 11% year-over-year, driven by mid-teens chronic therapy growth and modest single-digit acute revenue growth [15][20] - Adjusted EBITDA for the quarter was $67.7 million, representing 8.4% of net revenue, up approximately 28% over the prior year, with an EBITDA margin expansion of over 100 basis points year-over-year [17][20] - The company ended the year with a leverage ratio of 4.8 times, down from 6 times at the beginning of 2020, with a goal to reduce it below 4 times [11][21] Business Line Data and Key Metrics Changes - The chronic portfolio continued to grow in the mid-teens, with new therapies launched contributing to strong growth [9][15] - Acute therapies showed modest low single-digit growth in Q4, which was an improvement from being effectively flat year-over-year through the third quarter [9][15] Market Data and Key Metrics Changes - The company reported that IVIG constituted approximately 20% of revenue in Q4, with ongoing monitoring of supply constraints in plasma collections [26] - The acceptance of home care settings has increased, with referral sources embracing this model more than before the pandemic [33] Company Strategy and Development Direction - The company is focused on four key priorities: accelerating top line growth, providing consistent high-quality care, strengthening the balance sheet, and converting every claim to cash [8][12] - The strategy includes leveraging technology for operational efficiency and enhancing patient experience through data analytics and segmentation [64][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate the ongoing challenges posed by the pandemic and emphasized the importance of maintaining safety for team members and patients [11][12] - The company anticipates revenue growth of 6% to 7% for 2021, with adjusted EBITDA expected to be between $245 million and $258 million [20][21] Other Important Information - The company successfully retired its entire second lien debt in January 2021 and repriced its first lien debt, improving its capital structure [19] - The focus for 2021 will shift from integration to acceleration, with an emphasis on optimizing business performance and expanding referral sources [64][81] Q&A Session Summary Question: Update on IVIG and supply constraints - IVIG represents approximately 20% of revenue, and the company is monitoring plasma collection trends closely [26] Question: Gross margins and expectations for 2021 - The company expects gross margin expansion in 2021, although Q4's margin of 22.8% may not be the new baseline [28][29] Question: Home-based care trends post-COVID - There is a balanced approach to home care acceptance, with expectations of increased competition as hospitals resume outpatient services [33][34] Question: Guidance on acute vs chronic growth - Chronic growth is expected to be in the high single to low double digits, while acute growth is anticipated to remain in the low single digits [40][41] Question: Referral source changes and retention - The company generated a couple of hundred new referral sources in Q4 and is focused on expanding relationships with high prescribers [45] Question: Long-term capital allocation strategy - The company is considering opportunistic industry consolidations and enhancing service models to drive growth [92][94]

PART I [Item 1. Business](index=4&type=section&id=Item%201.%20Business) Option Care Health is the largest independent provider of home and alternate site infusion services in the U.S. through a national network - Option Care Health is the largest independent provider of home and alternate site infusion services, with **145 locations in 45 states** and approximately **2,900 clinicians**[16](index=16&type=chunk) - Services are primarily provided in patients' homes, also at clinics, physician offices, or ambulatory infusion suites, through **99 full-service pharmacies** and **46 stand-alone ambulatory infusion suites**[25](index=25&type=chunk) - Sales and marketing focus on building relationships with managed care organizations, patient referral sources, and pharmaceutical manufacturers for product distribution[28](index=28&type=chunk)[29](index=29&type=chunk) - United Health Group is the largest payer, accounting for approximately **15% of revenue in 2020**, with government programs (Medicare and Medicaid) also accounting for approximately **15% of revenue in 2020**[37](index=37&type=chunk) - As of December 31, 2020, the company employed **5,146 full-time** and **706 part-time personnel**, relying on attracting and retaining qualified nursing staff, pharmacists, and other professionals[54](index=54&type=chunk)[55](index=55&type=chunk) [Item 1A. Risk Factors](index=12&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from pharmaceutical industry changes, payer relationships, competition, and extensive regulations - Revenue and profitability are highly dependent on pharmaceutical manufacturers' ability to develop, supply, and market compatible pharmaceuticals; supply shortages, recalls, or FDA approval changes could have a material adverse effect[60](index=60&type=chunk)[61](index=61&type=chunk) - **85% of 2020 revenue** came from managed care organizations and other non-governmental payers; loss of these relationships or reduced pricing from competitive bidding could significantly impact revenue and net income[62](index=62&type=chunk) - Approximately **70% of pharmaceutical and medical supply purchases in 2020** were from three vendors, posing a risk of supply disruption or cost increases if relationships change or shortages occur[70](index=70&type=chunk) Outstanding Indebtedness as of December 31, 2020 | Debt Type | Amount (millions USD) | | :------------------ | :-------------------- | | First Lien Term Loan| $915.8 | | Second Lien Notes | $245.8 | | **Total** | **$1,161.5** | - The COVID-19 pandemic negatively affected new patient referrals for acute and chronic conditions, caused cost inefficiencies in clinical labor and PPE procurement, but also led to increased patient transfers from hospitals[121](index=121&type=chunk)[122](index=122&type=chunk) [Item 1B. Unresolved Staff Comments](index=28&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reported no unresolved staff comments from the SEC - No unresolved staff comments were reported[140](index=140&type=chunk) [Item 2. Properties](index=29&type=section&id=Item%202.%20Properties) The company leases all its properties, including its corporate headquarters and numerous infusion pharmacies, with terms extending through 2035 - All properties are leased from third parties, with terms extending through 2035[142](index=142&type=chunk) - Properties consist mainly of infusion pharmacies with clean room and compounding capabilities, some co-located with ambulatory infusion centers[142](index=142&type=chunk) [Item 3. Legal Proceedings](index=29&type=section&id=Item%203.%20Legal%20Proceedings) Information regarding material legal proceedings is incorporated by reference from Note 14 of the consolidated financial statements - Material legal proceedings are detailed in Note 14, Commitments and Contingencies, within Item 8 of the report[143](index=143&type=chunk) [Item 4. Mine Safety Disclosures](index=29&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Item 4, Mine Safety Disclosures, is not applicable[144](index=144&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=30&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq, has 142 stockholders, and has not paid cash dividends, with performance detailed - Common Stock symbol changed from 'BIOS' to 'OPCH' and moved to Nasdaq Global Select Market on February 3, 2020[146](index=146&type=chunk) - As of March 8, 2021, there were **142 stockholders of record**[147](index=147&type=chunk) - The company has never paid cash dividends and does not anticipate doing so in the foreseeable future[148](index=148&type=chunk) Stock Performance (2015-2020) | Years Ended December 31, | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | | :----------------------- | :------ | :---- | :------ | :------ | :------ | :------ | | Option Care Health, Inc. | $100.00 | $59.43 | $166.29 | $204.00 | $213.14 | $223.43 | | Nasdaq Composite Index | $100.00 | $107.50| $137.86 | $132.51 | $179.19 | $257.38 | | Nasdaq Health Services Index | $100.00 | $83.09 | $100.79 | $96.59 | $121.54 | $158.04 | [Item 6. Selected Financial Data](index=32&type=section&id=Item%206.%20Selected%20Financial%20Data) Selected consolidated financial data for 2016-2020 reflects new accounting standards and the BioScrip merger, impacting comparability Selected Consolidated Balance Sheets Data (thousands USD) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :---------------------- | :---------- | :---------- | :---------- | :---------- | :---------- | | Working capital | $222,989 | $228,650 | $227,428 | $226,535 | $227,763 | | Total assets | $2,647,439 | $2,589,547 | $1,428,211 | $1,429,542 | $1,405,285 | | Total debt, net | $1,124,353 | $1,286,496 | $539,375 | $540,346 | $541,500 | | Stockholders' equity | $1,015,724 | $906,827 | $602,825 | $606,105 | $600,770 | Selected Consolidated Statements of Comprehensive Income (Loss) (thousands USD, except EPS) | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :------------------------------ | :---------- | :---------- | :---------- | :---------- | :---------- | | Net revenue | $3,032,610 | $2,310,417 | $1,939,791 | $1,828,046 | $1,711,438 | | Gross profit | $682,264 | $512,999 | $422,215 | $445,999 | $449,307 | | Operating income (loss) | $110,755 | $(319) | $38,269 | $27,279 | $52,448 | | Net (loss) income | $(8,076) | $(75,920) | $(6,115) | $3,878 | $3,910 | | Net comprehensive (loss) income | $(12,053) | $(83,959) | $(5,341) | $3,936 | $3,910 | | Net (loss) earnings per share, basic and diluted | $(0.04) | $(0.49) | $(0.04) | $0.03 | $0.03 | | Weighted average common shares outstanding, basic and diluted | 180,971 | 156,280 | 142,614 | 142,614 | 142,614 | [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section reviews Option Care Health's business, COVID-19 impact, merger integration, financial performance, liquidity, and critical accounting policies - The Merger of Option Care and BioScrip on August 6, 2019, created an expanded national platform, driving cost synergies through procurement savings, facility rationalization, and administrative cost streamlining, achieving at least **$60 million in net cost synergies in 2020**[170](index=170&type=chunk) - The COVID-19 pandemic negatively impacted new patient referrals for acute and chronic conditions but saw an increase in patient transfers from hospital settings, with acute revenues flat year-over-year and chronic revenue growing in the mid-teens in 2020[167](index=167&type=chunk) - In January 2021, the company amended its First Lien Term Loan, issuing an additional **$250.0 million** to prepay the remaining **$245.8 million of Second Lien Notes**, reducing the interest rate on the First Lien Term Loan from LIBOR plus **4.25% to LIBOR plus 3.75%**[208](index=208&type=chunk)[401](index=401&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=46&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure on variable debt, mitigated by swaps, with inflation having no material effect - Primary market risk exposure is to changing LIBOR-based interest rates on variable rate debt[234](index=234&type=chunk) - To minimize interest rate risk, the company entered into two interest rate swap contracts: one for **$925.0 million notional** on the First Lien Term Loan (effective through August 2021) and another for **$400.0 million notional** on the Second Lien Notes (discontinued hedge accounting in May 2020 and matured in November 2020)[235](index=235&type=chunk) - A **100-basis point** increase or decrease in market interest rates would result in a **$6.4 million change** to interest expense over a twelve-month period[236](index=236&type=chunk) - Inflation has not had a material effect on operating results[237](index=237&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=47&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents audited consolidated financial statements for 2018-2020, including balance sheets, income statements, cash flows, and notes, with a critical audit matter on revenue recognition - KPMG LLP issued an unqualified opinion on the consolidated financial statements and the effectiveness of internal control over financial reporting as of December 31, 2020[240](index=240&type=chunk)[241](index=241&type=chunk) - A critical audit matter identified was the evaluation of transaction price adjustments related to revenue recognition, requiring subjective and complex auditor judgment[247](index=247&type=chunk)[248](index=248&type=chunk) Consolidated Balance Sheets Data (thousands USD) | ASSETS | December 31, 2020 | December 31, 2019 | | :------------------------------ | :---------------- | :---------------- | | Cash and cash equivalents | $99,265 | $67,056 | | Accounts receivable, net | $328,340 | $324,416 | | Inventories | $158,601 | $115,876 | | Prepaid expenses and other current assets | $70,806 | $51,306 | | Total current assets | $657,012 | $558,654 | | Property and equipment, net | $121,149 | $133,198 | | Operating lease right-of-use asset | $68,795 | $63,502 | | Intangible assets, net | $351,052 | $385,910 | | Goodwill | $1,428,610 | $1,425,542 | | Other noncurrent assets | $20,821 | $22,741 | | Total noncurrent assets | $1,990,427 | $2,030,893 | | **TOTAL ASSETS** | **$2,647,439** | **$2,589,547** | | LIABILITIES AND STOCKHOLDERS' EQUITY | | | | Accounts payable | $282,913 | $221,060 | | Accrued compensation and employee benefits | $58,899 | $45,765 | | Accrued expenses and other current liabilities | $64,075 | $33,538 | | Current portion of operating lease liability | $18,886 | $20,391 | | Current portion of long-term debt | $9,250 | $9,250 | | Total current liabilities | $434,023 | $330,004 | | Long-term debt, net | $1,115,103 | $1,277,246 | | Operating lease liability, net | $70,776 | $58,242 | | Deferred income taxes | $3,339 | $2,143 | | Other noncurrent liabilities | $8,474 | $15,085 | | Total noncurrent liabilities | $1,197,692 | $1,352,716 | | Total liabilities | $1,631,715 | $1,682,720 | | Total stockholders' equity | $1,015,724 | $906,827 | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$2,647,439** | **$2,589,547** | Consolidated Statements of Comprehensive Income (Loss) (thousands USD, except per share amounts) | Metric | 2020 | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | :---------- | | NET REVENUE | $3,032,610 | $2,310,417 | $1,939,791 | | COST OF REVENUE | $2,350,346 | $1,797,418 | $1,517,576 | | GROSS PROFIT | $682,264 | $512,999 | $422,215 | | Selling, general and administrative expenses | $500,199 | $459,628 | $345,884 | | Depreciation and amortization expense | $71,310 | $53,690 | $38,062 | | Total operating expenses | $571,509 | $513,318 | $383,946 | | OPERATING INCOME (LOSS) | $110,755 | $(319) | $38,269 | | Interest expense, net | $(107,770) | $(73,724) | $(45,824) | | Equity in earnings of joint ventures | $3,313 | $2,840 | $1,020 | | Other, net | $(11,541) | $(6,991) | $(2,233) | | Total other expense | $(115,998) | $(77,875) | $(47,037) | | LOSS BEFORE INCOME TAXES | $(5,243) | $(78,194) | $(8,768) | | INCOME TAX EXPENSE (BENEFIT) | $2,833 | $(2,274) | $(2,653) | | NET LOSS | $(8,076) | $(75,920) | $(6,115) | | OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX | $(3,977) | $(8,039) | $774 | | NET COMPREHENSIVE LOSS | $(12,053) | $(83,959) | $(5,341) | | Net loss per share, basic and diluted | $(0.04) | $(0.49) | $(0.04) | | Weighted average common shares outstanding, basic and diluted | 180,971 | 156,280 | 142,614 | Consolidated Statements of Cash Flows (thousands USD) | CASH FLOWS FROM... | 2020 | 2019 | 2018 | | :------------------------------ | :---------- | :---------- | :---------- | | Operating Activities | $127,392 | $39,467 | $24,428 | | Investing Activities | $(26,334) | $(727,826) | $(37,003) |\ | Financing Activities | $(68,849) | $719,024 | $(4,150) |\ | NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | $32,209 | $30,665 | $(16,725) |\ | Cash and cash equivalents - end of period | $99,265 | $67,056 | $36,391 | [Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=81&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with accountants on accounting and financial disclosure - No changes in or disagreements with accountants on accounting and financial disclosure were reported[403](index=403&type=chunk) [Item 9A. Controls and Procedures](index=81&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management assessed disclosure controls and internal control over financial reporting as effective, noting significant changes due to the BioScrip merger integration - Management concluded that disclosure controls and procedures were effective as of December 31, 2020[404](index=404&type=chunk) - Internal control over financial reporting was assessed as effective as of December 31, 2020, based on COSO criteria[406](index=406&type=chunk) - The merger with BioScrip in August 2019 led to significant changes and integration activities in internal controls, particularly in areas like business combinations, income taxes, treasury, and compensation[408](index=408&type=chunk) [Item 9B. Other Information](index=83&type=section&id=Item%209B.%20Other%20Information) The company reported no other information required by this item - No other information was reported[419](index=419&type=chunk) PART III [Item 10. Directors, Executive Officers and Corporate Governance](index=83&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company has a Code of Ethics for all personnel, with additional information incorporated by reference from the 2021 proxy statement - A Code of Ethics applies to all directors, officers, and employees, available on the company's website[421](index=421&type=chunk) - Additional information is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement[422](index=422&type=chunk) [Item 11. Executive Compensation](index=83&type=section&id=Item%2011.%20Executive%20Compensation) Information regarding executive compensation is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement - Information on executive compensation is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement[423](index=423&type=chunk) [Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=83&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information on security ownership and related stockholder matters is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement - Information on security ownership and related stockholder matters is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement[424](index=424&type=chunk) [Item 13. Certain Relationships and Related Transactions, and Director Independence](index=83&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information regarding certain relationships, related transactions, and director independence is incorporated by reference from the 2021 proxy statement - Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement[425](index=425&type=chunk) [Item 14. Principal Accounting Fees and Services](index=83&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information concerning principal accounting fees and services is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement - Information on principal accounting fees and services is incorporated by reference from the 2021 Annual Meeting of Stockholders proxy statement[426](index=426&type=chunk) PART IV [Item 15. Exhibits, Financial Statement Schedules](index=86&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists financial statements from Item 8 and provides an index of exhibits, including agreements and corporate governance documents - Financial statements are listed as appearing in Part II, Item 8, including the Report of Independent Registered Public Accounting Firm, Consolidated Balance Sheets, Statements of Comprehensive Income (Loss), Stockholders' Equity, Cash Flows, and Notes[429](index=429&type=chunk) - An index of exhibits is provided, detailing various agreements (e.g., merger, stock purchase, credit), corporate documents (e.g., certificate of incorporation, bylaws), and certifications (e.g., CEO/CFO certifications)[431](index=431&type=chunk)[432](index=432&type=chunk)[433](index=433&type=chunk) [Item 16. Form 10-K Summary](index=88&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reported no summary for Form 10-K - No Form 10-K Summary was provided[434](index=434&type=chunk) SIGNATURES [SIGNATURES](index=87&type=section&id=SIGNATURES) The report was duly signed on March 11, 2021, by authorized representatives of Option Care Health, Inc., affirming compliance with the Securities Exchange Act of 1934 - The report was signed on March 11, 2021, by the Chief Financial Officer, Chief Executive Officer, and other directors and officers[437](index=437&type=chunk)[438](index=438&type=chunk)[439](index=439&type=chunk)

Financial Data and Key Metrics Changes - Revenue in Q3 2020 was over $781 million, representing a comparable infusion revenue growth of approximately 13%, driven by mid-teens chronic therapy growth, offsetting relatively flat acute revenue [20][21] - Adjusted EBITDA was $59.2 million, representing 7.6% of net revenue, with an EBITDA margin expansion of 200 basis points from the previous year [22][11] - Free cash flow for the quarter was $22 million, with year-to-date free cash flow exceeding $70 million, and cash balances at the end of Q3 were $140 million [23][24] Business Line Data and Key Metrics Changes - The chronic therapy portfolio accounted for over two-thirds of revenue in Q3, benefiting from the transfer of patients from hospitals to home or infusion suites [21] - Acute referrals and revenue improved modestly over the second quarter, indicating a sequential recovery in most markets [21][9] Market Data and Key Metrics Changes - New patient referrals increased to pre-COVID levels for both acute and chronic therapy portfolios, with strong results in chronic therapy lines focused on specialty drugs [8][9] - Recovery trends varied by market, with some markets experiencing retraction due to COVID-19 spikes, impacting hospital procedures and physician visits [9][66] Company Strategy and Development Direction - The company aims to drive sustained profitable growth by integrating two industry leaders and establishing a unique platform for infusion therapy [6] - Key objectives include realizing over $60 million in net cost synergies, delivering organic revenue growth in the mid to high single digits, and improving claim to cash conversion to drive over $50 million in operating cash flow [6][11] - The company is focused on enhancing its technology ecosystem to improve operational efficiency and patient care delivery [12][41] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about continued momentum in sales effectiveness despite recent COVID-19 flare-ups [14][31] - The healthcare system is better equipped to handle both COVID and non-COVID related care compared to earlier in the pandemic [31] - The company is closely monitoring supply chain dynamics and is committed to maintaining operational discipline [12][14] Other Important Information - The company has entered into new multi-year relationships with Centene and Cigna, enhancing its collaboration with health plans [15][59] - The integration of the two organizations is expected to be completed by the end of 2020, unlocking operational leverage [11][17] Q&A Session Summary Question: Outlook for Q4 and 2021 - Management is cautiously optimistic about continuing organic revenue growth in the double-digit range for Q4, while acknowledging the uncertainty due to COVID-19 [29][31] Question: Share Gains in Home Infusion - The company is gaining share due to effective sales force realignment, improved technology integration, and strong payer relationships [37][40] Question: Working Capital Management - The company has improved its working capital management, reducing accounts receivable and bad debt provisions, particularly in chronic therapies [48][50] Question: Payer Conversations and Value-Based Care - Management noted productive conversations with payers regarding value-based care models and performance guarantees [51][52] Question: Ambulatory Infusion Suite Footprint - The company operates over 130 infusion centers and is looking for opportunities to expand based on local market demand [54] Question: Referral Growth Sources - Referral growth is balanced between new sources and increased depth within existing referral bases, with pent-up demand contributing to growth [55]

Option Care Health, Inc. (NASDAQ:OPCH) Q2 2020 Earnings Conference Call August 4, 2020 8:30 AM ET Company Participants Michael Shapiro - CFO John Rademacher - CEO, President & Director Conference Call Participants David MacDonald - SunTrust Robinson Humphrey Matthew Larew - William Blair & Company Kevin Fischbeck - Bank of America Merrill Lynch Brooks O'Neil - Lake Street Capital Markets Brian Hoffman - Canaccord Genuity Operator Ladies and gentlemen, thank you for standing by, and welcome to the Option Car ...

Option Care Health, Inc. (NASDAQ:OPCH) Q1 2020 Results Conference Call May 7, 2020 8:30 AM ET Company Participants Mike Shapiro - CFO John Rademacher - CEO Conference Call Participants Matt Larew - William Blair David MacDonald - SunTrust Brooks O'Neil - Lake Street Capital Mike Petusky - Barrington Research Richard Close - Canaccord Genuity Operator Good day, ladies and gentlemen, and welcome to Option Care Health First Quarter Earnings Conference Call. [Operator Instructions] As a reminder, this conferenc ...

| --- | --- | |-----------------------------------------------------|-------| | | | | | | | | | | Q1 2020 | | | First Quarter Supplemental Information NASDAQ: OPCH | | Disclaimer Forward Looking Statements This communication 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," "expec ...

Financial Data and Key Metrics Changes - The company reported its fourth quarter earnings, with specific financial performance metrics to be discussed later in the call [2][4]. Business Line Data and Key Metrics Changes - Detailed performance metrics for various business lines will be provided during the call, indicating a focus on operational performance [4][5]. Market Data and Key Metrics Changes - The company will address market conditions and performance metrics relevant to its operations, highlighting the importance of industry dynamics [4][5]. Company Strategy and Development Direction - The management will outline the company's strategic direction and competitive positioning within the industry, emphasizing future growth opportunities [4][5]. Management Comments on Operating Environment and Future Outlook - Management will provide insights into the current operating environment and future outlook, discussing potential risks and uncertainties that may impact performance [4][5]. Other Important Information - The call will include discussions on non-GAAP financial measures, which are essential for understanding the company's financial condition [5]. Q&A Session Summary Question: What are the expectations for future financial performance? - Management will address expectations regarding future financial performance, including potential growth areas and challenges [4][5].