Option Care(US:OPCH)2022-04-28 18:10Financial Data and Key Metrics Changes - Revenue growth of 20.6% was driven by solid performance across the portfolio, with acute revenue up in the mid-single digits and chronic revenue growth in the mid-20s [25][26] - Adjusted EBITDA of $77.8 million represented 8.5% of revenue, growing 49% over the prior year [28] - Cash flow from operations was $32.7 million, with cash balances increasing over $145 million at quarter end [29] Business Line Data and Key Metrics Changes - Chronic revenue growth was particularly strong, driven by improved supply chain dynamics and execution across chronic inflammatory therapies [26][13] - Acute revenue growth was modest, reflecting a rebound in referral trends throughout the first quarter [25][60] Market Data and Key Metrics Changes - Referral volumes lagged in certain geographies but showed gradual improvement as the quarter progressed, returning to near-normal levels by the end of March [12][55] - The company experienced unprecedented inflationary pressures across various goods and services, impacting operational costs [14][15] Company Strategy and Development Direction - The company is focused on integrating recent acquisitions, including Wasatch Infusion and Specialty Pharmacy Nursing Networks, to enhance its national clinical platform and expand its market presence [17][19] - Future growth initiatives include building a comprehensive network of infusion suites and enhancing relationships with payers [70][68] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the momentum coming out of the first quarter and raised financial guidance for the year, expecting revenue of $3.75 billion to $3.9 billion [32][34] - The company anticipates continued inflationary pressures impacting margins but remains focused on expanding EBITDA margins [94][95] Other Important Information - The company has a net debt to leverage ratio of 3.0 times, significantly improved from previous years [29] - Management highlighted the importance of maintaining a competitive labor force amidst ongoing labor challenges [16][82] Q&A Session Summary Question: Can you break out growth in the quarter regarding easy comps or supply chain returns? - Management noted that approximately 250 basis points of growth were attributed to recent acquisitions, with underlying growth implying mid-teens growth [38][39] Question: How do you envision incorporating SPNN and Infinity into your operations? - Management emphasized the complementary nature of the acquisitions and their potential to enhance clinical capabilities and market access [40][44] Question: What are the biggest factors affecting gross margin and cost side for the rest of the year? - Management indicated that inflationary pressures and a shift towards a lower gross margin chronic portfolio would impact margins moving forward [93][94] Question: How are you managing labor pressures, particularly in nursing and pharmacy? - Management reported that they have not faced significant capacity constraints and have successfully increased their clinical team size [78][81] Question: What are the key areas of investment over the next 12 to 18 months? - Management highlighted ongoing investments in building out infusion suites and enhancing service lines to meet market demand [70][71] Question: How does the macro environment impact your approach to guidance? - Management stated that they model various scenarios and maintain a conservative approach to guidance amidst a dynamic environment [126][128]