Option Care(US:OPCH)2023-02-22 16:00Financial Performance - Net revenue for the year ended December 31, 2022, was $3,944,735, representing a 14.7% increase from $3,438,640 in 2021[166] - Gross profit for 2022 was $866,918, an increase of 11.2% from $779,606 in 2021, with a gross profit margin of 22.0%[167] - Operating income rose to $240,231 in 2022, compared to $190,841 in 2021, reflecting an increase in operating margin from 5.5% to 6.1%[166] - Net income for 2022 was $150,556, compared to $139,898 in 2021, with a net income margin of 3.8%[166] - The company recorded a net income of $150.6 million for the year ended December 31, 2022, representing a 7.6% increase from $139.9 million in 2021[174] - Operating income for 2022 reached $240.2 million, a significant increase of 26% from $190.8 million in 2021[219] - The net income for 2022 was $150.6 million, compared to $139.9 million in 2021, marking an increase of approximately 7.5%[219] Expenses and Costs - Selling, general and administrative expenses increased by 7.7% to $566,122 in 2022, but decreased as a percentage of revenue from 15.3% in 2021 to 14.4%[169] - Total operating expenses for 2022 were $626,687, up 6.4% from $588,765 in 2021[169] - Interest expense decreased by 19.7% to $(53,806) in 2022, primarily due to debt refinancing activities[171] - The company reported a depreciation and amortization expense of $65,434,000 in 2022, a decrease from $68,804,000 in 2021[221] - Stock-based incentive compensation expense rose to $16,783,000 in 2022, compared to $9,575,000 in 2021, reflecting a 75.5% increase[221] - Cash paid for interest decreased to $50,372,000 in 2022 from $60,920,000 in 2021, a reduction of 17.5%[221] Cash Flow and Liquidity - Cash and cash equivalents increased to $294.2 million as of December 31, 2022, up from $119.4 million in 2021, marking a net increase of $174.8 million[186] - Net cash provided by operating activities rose to $267.5 million in 2022, an increase of $59.0 million from $208.6 million in 2021[186] - The company reported a net cash used in investing activities of $108.1 million in 2022, a slight decrease from $111.5 million in 2021[186] - The company had $168.3 million of net borrowing availability under its asset-based lending revolving credit facility as of December 31, 2022[181] Acquisitions and Growth Strategy - The company plans to pursue acquisitions as a key part of its growth strategy, requiring additional capital beyond current availability[179] - The company completed business acquisitions net of cash acquired totaling $87,364,000 in 2022, slightly up from $85,909,000 in 2021[221] - The company completed the acquisition of BioCure for a purchase price of $18.9 million, with $18.3 million allocated to intangible assets[266][267] - The acquisition of Infinity Infusion LLC was finalized for $59.6 million, with $25.4 million allocated to intangible assets and $32.5 million recognized as goodwill[268][269] - The company acquired Specialty Pharmacy Nursing Network, Inc. for $59.9 million, with $25.6 million allocated to intangible assets and $33.7 million recognized as goodwill[272][273] Taxation - The effective tax rate for 2022 was 26.8%, compared to a negative 20.1% in 2021, primarily due to the release of the federal valuation allowance in 2021[173] - The company recorded an income tax expense of $55.2 million for the year ended December 31, 2022, resulting in an effective tax rate of 26.8%[279] - The valuation allowance for deferred tax assets decreased to $13.056 million in 2022 from $13.151 million in 2021, reflecting a reduction in certain state net operating losses[284] Assets and Liabilities - As of December 31, 2022, the total assets of Option Care Health, Inc. amounted to $3,112.9 million, an increase from $2,790.9 million in 2021, reflecting a growth of approximately 11.5%[218] - The company had outstanding debt of $594.0 million under its First Lien Term Loan with a variable interest rate component as of December 31, 2022[203] - Long-term debt as of December 31, 2022, totaled $1,058.2 million, a slight decrease from $1,059.9 million in 2021[303] - The company’s total stockholders' equity increased to $1,386.1 million in 2022 from $1,175.9 million in 2021, reflecting a growth of approximately 18%[218] Market and Revenue Sources - The increase in net revenue was driven by organic growth in therapies, with chronic revenue growing in the mid-teens and acute revenue growth in the mid-single digits[168] - Approximately 12% of the Company's revenue for the years ended December 31, 2022, 2021, and 2020 was reimbursable through direct government healthcare programs such as Medicare and Medicaid[261] - Revenue from the Company's largest payer accounted for approximately 14%, 16%, and 15% of total revenue for the years ended December 31, 2022, 2021, and 2020, respectively[260] Legal and Compliance - The company is involved in legal proceedings that may have a material adverse effect on its results of operations, although it believes its defenses have merit[330] Stock and Compensation - The total stock options outstanding as of December 31, 2022, was 1,021,370, with a weighted average exercise price of $21.63[337] - Compensation expense related to restricted stock awards increased to $10.2 million in 2022 from $4.9 million in 2021 and $2.3 million in 2020[339] - The company recognized compensation expense of $2.4 million for performance stock units (PSUs) in 2022, with $5.9 million in unrecognized compensation expense related to unvested 2022 PSUs[344]