BANNOCKBURN, Ill., Nov 03, 2020 (GLOBE NEWSWIRE via COMTEX) -- Option Care Health, Inc. (the "Company" or "Option Care Health") /zigman2/quotes/204677417/composite OPCH -0.20% , the nation's largest independent provider of home and alternate site infusion services, announced today financial results for the third quarter ended September 30, 2020.
Given the merger between HC Group Holdings II, Inc. ("Option Care") and BioScrip, Inc. ("BioScrip") to form Option Care Health on August 6, 2019, comparisons to historical periods are relative to legacy Option Care only and incorporate BioScrip results from August 6, 2019 prospectively. Further, as reported on February 3, 2020, the Company completed a reverse 1-for-4 stock split in the first quarter and, as a result, all per share data below is reported incorporating the effect of the reverse stock split as if it was effective for all periods reported.
Third Quarter 2020 Financial Highlights
-- Net revenue of $781.6 million, up 27% compared to $615.9 million in the third quarter of 2019
-- Gross profit of $174.2 million, or 22.3% of net revenue, up 26% compared to $137.8 million, or 22.4% of revenue, in the third quarter of 2019
-- Net income of $1.7 million, or $0.01 per share, compared to net loss of $42.8 million, or $0.26 loss per share, in the third quarter of 2019
-- Adjusted EBITDA of $59.2 million, up 70% compared to $34.8 million in the third quarter of 2019
-- Cash flow from operations of $48.3 million compared to a cash outflow of $5.8 million in the third quarter of 2019
-- Cash balances of $140.0 million at the end of the third quarter and no outstanding borrowings on the Company's $175.0 million revolver
-- Subsequent to the third quarter, the Company entered into new, multi-year national provider contracts with both Centene and Cigna
Comparable revenue growth for the quarter is approximately 13% when considering the impact and timing of the merger as well as harmonization of accounting policies, with chronic therapies growth over prior year in the mid teens and acute therapies flat to prior year. Additionally, the Company continues to make significant progress on merger-related integration efforts and expects to be complete with integration efforts, other than technology harmonization, by the end of the year.
John C. Rademacher, Chief Executive Officer, commented, "The third quarter was very productive for Option Care Health as we continue to serve patients relying on us for critical infusion therapies while also laying the foundation for sustained organic growth. Despite a very challenging operating environment, the team continues to rise to the challenge and reinforce the reliability and dedication of the Option Care team."
Update on the Impact of the COVID-19 Pandemic
The COVID-19 pandemic continues to have a significant impact on the Company's operations. New patient referrals increased relative to the second quarter for both acute and chronic therapies and referral levels overall in the third quarter exceed pre-Covid levels. Chronic patient referrals showed the largest improvement in the quarter, as patient migrations to treatment in the home or alternate site continued and referrals for newer therapies also increased. Option Care Health continues to incur higher expenses related to both the procurement of personal protection equipment and medical supplies as well as with respect to its clinical labor.
As previously disclosed, as part of the Coronavirus Aid, Relief, and Economics Security Act (the "Cares Act"), the Company received approximately $11.7 million from the Public Health and Social Services Emergency Fund in the second quarter which it fully returned in the third quarter. The cash receipt was reflected in the second quarter results as a cash inflow from financing activities and subsequently as a cash outflow from financing activities in the third quarter. There was no impact on the Company's results from operations related to the receipt and return of the funds.
Full Year 2020 Guidance
For the full year, the Company expects to generate between $216 million and $220 million in Adjusted EBITDA and at least $80 million in free cash flow, defined by the Company as net change in ending cash balance compared to the cash balance at December 31, 2019.
The Company will host a conference call this morning at 8:30 a.m. E.T. which can be accessed by dialing (866) 360-3136 for U.S. participants, or (602) 563-8603 for international participants, and referencing conference ID 1576317; or via a live audio webcast that will be available online at https://investors.optioncarehealth.com . A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.
About Option Care Health
Option Care Health is the nation's largest independent provider of home and alternate site infusion services. With over 5,000 teammates, including approximately 2,900 clinicians, we work compassionately to elevate standards of care for patients with acute and chronic conditions in all 50 states. Through our clinical leadership, expertise and national scale, Option Care Health is reimagining the infusion care experience for patients, customers and teammates. To learn more, please visit our website at OptionCareHealth.com.
Mike Shapiro Bob East, Asher Dewhurst, Jordan Kohnstam Chief Financial Officer Westwicke T: (312) 940-2538 T: (413) 213-0500 email@example.com firstname.lastname@example.org
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