Option Care(US:OPCH)2021-03-11 18:08Financial 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]