OPCH - Earnings call transcript Q3 2021 | Option Care Health, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Option Care Health Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your host today, Mike Shapiro. ahead. go Please

Mike Shapiro

Good morning.

from the the subject future that statements materially uncertainties. certain information risks views statements that our reports financial note file the uncertainties we related with in are regarding please and to future call, industry during reflect performance, make begin, and encourage These the forward-looking will we and We risks to market could Before conditions. and forward-looking events our cause the comments. to results you SEC specific actual that differ our to review we current

the You should also in entitled review section release. morning's this press statements forward-looking

the During financial will and condition. measures financial when non-GAAP talking call, the performance we about Company's use

release With posted our Executive the portion additional of I'll Rademacher, to Relations that, on can measures these You find press information Investor website. the on Chief John morning's call turn Officer. over non-GAAP in this

John Rademacher

morning. Thanks, us joining Mike, this thank you and for

stating our very business challenging growth, back with Overall, cash Let we dynamic meaningful are and third me market we team by deliver to the continue reinvest to as very flow generate ability to was quarter sustainable our into how lay their groundwork the the for business, and start navigate pleased of productive conditions. performance profitable growth. the and

into critical to win. to strategic access initiatives in position invest earnings We our platform. strong growth lines, we and expansion expand continue to continue Equally us leveraged that revenue translate on important, our scalable resources service to enhance

few a thoughts. wanted share Mike As few minutes, in the but will always, I a review financials to

more EBITDA of of very the margin the nearly These EBITDA quarter, strong based with to relentless the our revenue patients care focused improve $XX adjusted acute of our team. the seamlessly margin. newer growth high-teens infrastructure our we year chain morning, productivity extraordinary the only and gain we over continued was As with X.X% momentum country Adjusted throughout tightened to XX% our that certain focus results momentum patients portfolio. robust nearly growth sequential solid highest our systems on We've growth. EBITDA our Overall, and deliver out chronic of leveraging full manufacturers partner EBITDA continue our acute with portfolios release on XX%. was of we more growth therapies. for continues announced chronic the this execution and the of with saw patient year-over-year to by the Topline team care delivering are and saw collaborations seen in third growth through raised operating in choice our both to on platform. robust growth guidance across our we through record. We improved therapy and prior channel on portfolio in an across as referrals while range national collaborate to driven mid-single-digit to setting actively therapies, health year transition have the supply continue and a and and million possible acute for In dynamics

is to constraints, sporadic improved. we situation continue Although supply see chain some our clearly

priority. chain team a highly patient to continue extraordinary pharmacists, any nurses, most frankly, Their care, skilled is monitor team an a dieticians. X,XXX team pharmacy are, with care, different, respiratory extraordinary times ensuring that and deliver will is manufacturers of to reduce including and order we over therapists thousands technicians, our day maintain expertise makes of to of product us clinical revenue closely in to work what dedication and critical a from suppliers or our We partnership and the impact situation in supply committed dollar Behind unparalleled will eliminate every disruption.

in economy, the ensuring thus the are resourced broader despite been effective persists across to immune we the we challenging market right many Although challenges. have that not labor disciplines have we far,

job and the we administrative leveraging through action minimizing But We We the to on operational than expansion. network the wage labor our realizing in geographies, and our labor of for we are we we manage are situation. technology market subside the monitor centers efficiencies and market remain same certain taking time, workflows, focused continue more challenges competitive. continue tasks certain in not where examples footprint to mitigating challenges labor we are through are with at term, expect the XXX categories necessary aggressively of have how pressure conditions near seen to of and ensure investments Streamlining efficiency. infusion partially and to do

network chronic part nationwide. over more portfolio. I've efficiency, topic labor as on Again, we satisfaction our especially our suites continue the we'll our infusion are also our dozen by higher expand of to support to and year, drive expand infusion growth, new capacity actively suites, which continued XX of to than integral remain chairs On clinical and within open infusion track strategy centers, patient this a but will to mentioned,

on thoughts We very recent have beyond. well focused of Infusion Infinity acquisition excited on XXXX also team a the dedicated and share into expansion, to Nursing. continue will and this I'm suite a few

together this these team Based acquisition lot we skilled the network our takes deep As X,XXX on areas infusion a acceleration, growth. placed who Care respect nurses, infusion two provided to fuel to to it expand Infinity, a acquisition, the with on per care new highly and supplement M&A country else, diem one With a made capabilities throughout the of the resources patient cultural to relationship clinical our Option tremendous pivot Prior had own the nurses. more integration of we've a than focus of obvious national above is for all team of us strategic highlighted our our capabilities nursing which for level. similarities, sense. organizations our to from key further increased and became putting

we with clinical will development. Infinity At resources on and acquisition and As leverage leveraging nursing a and nurses, M&A therapies through Health to maintain their level, a span infusion the entrepreneurial The begun Infinity manufacturers a national that highlights client network Option as by expanding already support broad we've on Infinity opportunities. organizations research focus articulated, clinical established same we on and culture. clinical patients. will and expertise around to nurses regional their are portfolio, Care networks building capital for in their operation their deploying including intend was clinical maintain better and their we've and biopharmaceutical infusion also time, we serve separate we focused focus on of

infusion the broader we clinical and While will to assets complement for rail assets, continue to believe our infrastructure on of continue in the post-acute ear that is settings. to a care focus we on array keep there

patient So of completing little over of as could team two I be to number we unwavering prouder years a to the sit and to dedication Mike? With their the momentum focus continue since this terms not bit more their turn over patients I'll we've to that, extraordinary in the merger, as collectively enterprise we we results Mike increase that on of or here serve. in detail. review a built care the the call

Mike Shapiro

John. Thanks,

the inflationary collectively and by challenges rate XX% and therapies, margin and approximately year last as a quarter gross expanded than as over challenging was fight Net revenue SG&A XX% revenue gross the topline was continued declined the initiatives revenue. by the to experienced As platform. headwinds. comparison. as to and of we grew very pressure, in quarter, some our the remain of pressures John and productive, mixed over Again, led third to. basis we referred represented which of the quarter outpacing growth of efficiencies XX.X% margins XX% the third prior the comps approximately in modestly the despite point, XX basis a second Despite points XX% of environment. we Gross and basis challenges a quarter. labor the from acute procurement every absorbing quarter labor mid-single points results modest more XX of for therapies grew sequential reflect the continue offset mentioned, expand dollars portfolio percent year and third strength margin the Acute digits grew more increase favorable than chronic in

leveraged As a margin million base, QX are prior X.X%, our to though can $XX generating we delivered margins rate expanded growth have confidence we EBITDA of we XXX a that we year. even emphasized, within and there and thereby have points note, quarter of above an components dollar over margin. at spending the a growth, basis EBITDA below On that gross basis repeatedly in degree and the points and highly over third spending quarter platform scalable high grow expanding we roughly have in variable XX

and Year-to-date, million exited improvements we debt cash encouraged generation flow in multiple and flow We quarter from cash X.X operations very the times. are a also in at the $XXX of generated quarter. net further capital the structure by

from strong the weeks ago, all profile quarter, XXXX additional of seen flexibility trust refinancing our heels maturity provides beyond. further I recent for effort our you've two the structure, enhances capital extends On and our and which debt

than cash the time rate current of at Our our approximately less $XXX burn half $XX million, merger. than is million the interest run more rate of

in EBITDA of heels range the outlined are this we as narrowing morning's release. and on our full-year raising press Finally, very guidance adjusted a solid quarter,

to growth For approximately of $XXX midpoint of year, at to adjusted full-year expect the generate the we million EBITDA range. XX% guidance representing million, full now $XXX our

$XXX flow than more operations. cash generate to expect also We million in from

to $X.X unchanged. remain $X.XX of expectations revenue billion Our

shaping Operator? is to be for flow. open expected Q&A. So very and record overall, profitable to cash excited the meaningful we're with XXXX year growth a is up our and generating of that, that we'll very productive call continue And

Operator

of [Operator Instructions] line William Matt Blair. And from with our question the Larew comes first

Matt Larew

of care a So covert there's some a last a I growth second high-teens sense, revenue had year, some benefit that straight a for degree these recurring lot also there's sustainable the of here. called quarter side. patients. think But you high point. here shift the at of side in chronic of in Obviously, And on out

build a you maybe just kind could it this for seeing us give momentum of you're and is? where sense sustainable how you think So

John Rademacher

and first we really focused and we the Matt, and introduced disruption thanks bit certain on year some key traction in and that therapies a moving see reach it's to year-over-year last Well, the what the were look, frequency on are of patterns really around given all look, comps hard basis has making zone did continue and to say, that for have team key our also call a been choppy referral foremost, where targeting as around And say, from continue to they're seeing. the John. targets Yes, We little question. new I'd that we're sources on we standpoint. that our forward. and

So I strong it execution. was think

there's favorable were pleased, seasonality We to gains as basis. the and the some a know that half was well towards think the saw. I year-over-year new comps second year. it business, though, as those when builds sequential this some therapies And looking with of it at we we're we of

And are so that kind remainder see I'm to pleased we outlined, quarter of going to out third as saw that we're with we expectations continue the the year. as in finish that the we momentum and of

Matt Larew

will a suites. over then works. in just all better prefer And Obviously, And in you mentioned changed dozen on patients maybe the where you Okay. where the of have is. upper that that you pandemic of and an sense at being us are you or end what be think then the ambulatory that Has a brand range the potential that the ambulatory our us clinic? is think just seen today for off remind give might

John Rademacher

Yes.

move of certainly the in we the satisfaction again, alignment from choice. into It with fits A So consideration. more do do these patient that infusion it a couple with forward. goals suite. service expanding our up COVID, around is think in with infusion suite a the think of we very are that robust experience. of utilization our One We way. standpoint we as the the we patient a in also Matt, therapies to overall and portfolio has much opportunity things And around patient that, bullish with utilize opened are align facilities

it, call utilization we've suites. year, earnings had we that in the infusion calls, mid-teens in, for I started So this in think started I previous the from conversations the when year visits we our nursing of let's believe

the suite. Our I expectations infusion we ended infusion our to have as now, that we don't our know, visits about of the visits our is And are would comments. as done goal of Mike, in expand nursing as I XX% our if well we the the right suites pushing higher footprint think start therapy set. you additional or nursing XX% quarter be were in

Mike Shapiro

reasons. Matt, for the thing the add only of really I'd of a suites look, integral is, are couple our a part strategy

heard previously. you've articulate think us I this

is First efficiency. and foremost,

very a we have have resources -- mentioned, John clinical limitations today. As we on our

us a driving force. infusions, it to especially side newer It ambulatory. where the creates within windshield therapies much chronic and efficient And team, concurrent confidence support time, also just efficiencies more gives so are patients our more nursing on labor less the launch the

have new quite Tepezza, of well you the new for like cohorts sweet Ocrevus, therapies been therapies, Some advertised TV, patient growing see Stelara, are a those in on setting. accommodated where

forward. just the very in a going driving growth So good quiver arrow for

Matt Larew

All Appreciate the quarter. Congrats right. the update. on

Operator

from Lake next Street O of And question with the our line comes Capital Brooks Markets. Neil

Brooks O'Neil

that B, Nice in to there guess you comment Can XQ but guys you and my out navigated media postponable national quarter. A, seeing with on Delta you're on: pretty sort to the here now? a I the lot start from how sense did I'd is procedures, what well. related seem of that of disruption spike have you hospital

John Rademacher

we Brook, view. kind quarter. and Yes. services to Each us when were of little navigate bit on because demand. not provider at constraints national through where that footprint the of those health differently gives capitalized care impact again, given we've think have position on of I put felt that able way, we it market we and the markets a same Delta that markets. of the a ecosystem the is, the And the broader certainly, we What was the look, level of some a market went all been within operated impact do operate there had national given

chronic that continue be Stronger to report patients We months, filed for which are those are service years many that to today. lifetime. instances, you we saw on coming ones in with in in results us and also, the as

to to forward also So as we're that building bringing new patients us continue allows board. we up that patient census that on move are

all, So it strong I think a was all in quarter.

navigate aspects, market that is fantastic just which with Louisiana our a of from a strength the thing to to platform order The there also caused the network of job patients from to out some needs. of around around and were Ida other the in I'll leveraging point helping their serve disruptions step and continue -- the some within the that but the -- market, Hurricane team implications level other and also at disruption our in of and did

Brooks O'Neil

And MDP. might from relates Great. you the expect assume see observed a main. that's guess result to any era of end as probably it sort I on next your relationship the with or in can being then comment I of that you over might I untethered an year positive chain? as changes But the or two of

Mike Shapiro

have Look, Madison outlined. that day leadership supportive you Mike. it's of Brooks, one great relationship, the we as from team a the investments They Dearborn. were know, all with

still the we team and day-to-day executing truly it time, the on making transitioned, company. They active of And was from we strategy, we've that quite leadership the expect efficiently. a our I continue. are As Directors. has from merger, of representation one time happen. over to, articulated and been of the We'd intentions transition to in the public at our float that think quite And terms of Board to on articulating did

of the and because that with support a extent, and it float. perspective, would to And our so much to Dearborn Board great be really And the just excited quite we're Madison team, from more seamless. full it's expect we the

public one one, of the around we As lot day you'll out didn't since you've since float been was have a remember of there. challenges

now liquid And more just it's so security. a

overall, much I positive. it's think very So a generally

Brooks O'Neil

That sense. Absolutely. total makes

of going I huge changes and the to any with the you I cash is refinancing your Are positive. think use question strong regard debt, last of a see forward? cash that the is generation the have which So with there

Mike Shapiro

No.

we're out of and bringing and to $XXX to We're interest additional think up. That's around addition in I two much more really has thrilled what in operations. cash thanks because our cap that sets it -- a Again, for million cash patient flexible just $XX out million around structure. down years. free from the generating dropped

we're back think and cash, times comments, really the from We're very agencies. pipeline comfortable this getting on levered. I primary of affirmation this at believe, getting around we're the just going at more allocation. focus terms a it leverage the creation now focus, that the because John's capital which X.X growth. still to soft value of point, a well, generating think appreciate doesn't opportunities there's M&A. M&A And profile. think at And mean we is is in robust We can So we're I with relentless our forward, enhance I point

Brooks O'Neil

for great Great. Keep stuff. the you. all I'm excited Perfect. up

Operator

with our Gill question And J.P. Lisa line comes Morgan. the of next from

Mike Minchak

on Minchak for this It's actually Lisa Mike morning.

with questions. wanted just to portfolio, relationships. chronic two therapy your ask One, Just about respect manufacturer to

scale, distribution the seeing any Given there footprint And increased for well-positioned and that to relationships Are from manufacturers clinical those looking narrow clearly of limited in approved. been willingness your panels? composition them more? to on or new panels capabilities, you're utilize manufacturers has are change you any even preferred therapies distribution perhaps,

John Rademacher

John. the Yes, first, it's thanks for Mike, question.

their kind mentioned think into platform for network fits It those also As that well-positioned building this dedicated our organization, really the with relationships upstream an we we've infusion thinking the I of ability about where opportunities we're given team out are And development forward. centers. we is We to those. needs overall think business cultivate the expands we in AIC moving as have biopharma that fosters and as before, to the support a they're strategy continue have.

the is forward. distribution themselves strategy or comments, into would of limited Infusion and exclusive present that clinical we of as can I expansion development move those that -- trials we either distribution think of longer-term opportunities as items with the to part lead with of relationships, and So my Nursing areas assets really part mentioned support team, in that our now the Infinity addition

the So don't and that as the utilized clinical that we have really move know, excited done we're have expanded we capabilities I with those platform platform a you about now the thoughts. and that direct today. that be have Mike, think relationships can forward. But with really we've we Infinity we work really that important if additional with

Mike Shapiro

nursing to also direct gives them both Yes. not wholesalers we've relationships of stages, we support manufacturers, vital have That us clinical supply most move times better part. of is, through preclinical mentioned, because I'd to to IG terms us upstream, more challenges our only position because gives chain rail ear able just better of the with a those Mike, thing with look, one it them, articulate chain a is those chain resources capabilities, dynamics. we're for with thing John going with in reiterated the we've much having in add supply the supply is as supply, absolutely direct relationships but in the seen the like being

instances, So in us just we direct relationships manner strategic limited think a many edge. collaborations, those gives and a

Mike Minchak

look a broad fiscal you point. tailwinds we And could color outlook 'XX just know color that if Appreciate provide at key it. year? for any just next preliminary Got some for thinking the But you're should I follow-up, then on about not a as this there wondering there. ahead, or providing as be are we headwinds whether

John Rademacher

we're forward. really we I provide position aren't third would Yes. in quarter. mean, pleased I to the we're with look, really looking guidance say, look, much a as

highlighted. mean, as kind The have been some the just we of sequential our are are extremely team the of that certainly, them execute out the some to if well, the some And broader challenges in I of basis, across called economy. momentum. build to from we pressures wage economy. As we a saw are continues continue business than broad there

had footprint hoping, of things some normalcy But to well-positioned back we're But looking we return there And expansion as everyone get a rhythms said, to think we we patterns in anything from around back is, I its as through months around hits whether the order all get I capture colder there. happen some forward. ways a form. starts we'll in have impacts think can are look, move to We on mitigate would COVID. referral in as going that we're that and and of some spikes are seen well-positioned. that some of level indoors to the of But normal that we in We're to impact as those the and still to and move navigate all, to for productivity the lot historic demand basis. as it are that the pandemic within that's we back post-pandemic

you if have So Mike, I don't know --

Mike Shapiro

Yes. granular because, substantive. thing look, anything Mike, add, aggregate quarter. thing this we're to much provide 'XX. our John fiscal said, thoughts not obviously again, I'll in position at first and reconvene a I'd to We'll guidance trying thoughts in point, we on we're only more say as when The provide only is, just The the

As mid-to-high yet the we growth enterprise. this and is again, expectation, anything seen EBITDA kind from haven't of that all articulated, us labor of the ASP topline we've trajectory see on that of Again, moves trends, business. base the aggregating low-to-mid-teens single-digit which, our a as longer-term thoughts we has bumped

Operator

And question from Fischbeck of Kevin with our the comes Bank America. of line next

Adam Ron

actually companies, is have Kevin. of question, guess, Infusion around higher on the and the generally Adam This asset, margins. we Infinity Quick they Nursing I staffing kind covered for

that than we'd slight assume your margins to expect? of lower EBITDA just are year, is to next the So given it some to kind XX%, accretion fair XX%

Mike Shapiro

Yes, Adam.

the cash million $X paid upfront paid. again, So we we of $XX for EBITDA. in generating of neighborhood They million the were enterprise

were we So paid teens EBITDA margin. and around they million, low $XX

it. smaller of be that -- into the a modestly back an low dollar modestly should it teens, from kind from should And amounts. EBITDA helpful can But margin you valuation be on from in a margin. both against multiple, EBITDA the So accretive

Adam Ron

Is reliance looked looking in like contract increase, costs more to as versus pre-pandemic? the you you labor? so that outside to today on bring And motivation at rely maybe contract of Okay. quantify [indiscernible]? Great. of the the on just to have had the deal, kind then labor of with And kind any there those way

John Rademacher

have we while we've relationship Infinity -- a been for Adam, a now. it's John. Look, with

is an success trajectory. access in in really a the as truly factor marketplace. acute that growth our be is clinicians situation going to believe wasn't we critical at the looking it What to to response So we're

So about our use around diem we've agencies around part-time full-time, then have where nursing talked and previous we to in calls augment strategy per we that.

focus the we them really given that relationships So mission opportunity our aligned with we given given with saw alignment that our that and the had, culture purpose, of and and the to motivation really we that as resources, having the to business these behind for the expanded we did were be well-positioned are why all growth a seeing clinical by access the deal.

So us our that's of and forward. But capability it those have to do critical to expands robust certainly very set continue enterprise, we'll gives we the access Health as resources. that part we Care to move a and team continue Option

Adam Ron

included And more be a through announced right. deal. It's in Keytruda of of that. XX pricing be but and me. focused the on Remicade Medicare. drugs All preliminary one would the think top it I And drug Democrats early-stage, obviously, kind And to then seems for kind negotiated

for have any like if just you would you? what thoughts So initial on wondering that look

John Rademacher

-- like news excluded be there of that. how this everyone we're around this look, daily I lot understand. really that mean, and executed to and or on included from basis to would point implications time, up the of would the understand Adam, or level, else, in At trying -- Yes, what hard isn't a we, it. a it's be the be the detail drug really would are picking high

early could look implications really around we it too to time a this even as have at that in the at hazard this point guess little moving a So forward.

expand At home expanding is as Home the participants. that that with it well calendar to paid we around continue product. really in have access we around And as focused key services and the the this of still therefore, point focus areas can as we're fair that in being making the access work Medicare our get value we and fairly look, Infusion Association, for through infusion. certain definition are, alignment beneficiaries we and that reimbursement to with around service well our provide as to do access the wrap don't day So the National time, broad and

focus. will So legislation think to assess That come does out and opportunities we'll that test of that's be details get more then continue actually our legislative focus. and and to I any to as available, our risks And may pass. identify been become that continue

Operator

And the with line Jamie comes from our of next question Sachs. Perse Goldman

Jamie Perse

a you of provide what kind a you on market you're Are any couple behavior? out taking that's would for just potentially to John, is some sense you to you? health more the the in wanted share? would networks then growth helping just payer love of And chronic and thoughts love to you. the with I front? think on Anything incrementally narrow call that first, your get seeing color if related that, systems. can on of collaborations And

that on think going the you I think about mentioned that the acute of side business. How we should forward?

John Rademacher

Yes.

the just with start chronic. I'll So

comments it's into of network our of the well home part to there that serviced continues is additional available. market, infusion I products or infused is an opportunity infusion of expands participate there's we broad to defined that We the expand. do billion as drugs of the in pie for so $XXX have expansion by think the think that portfolio as made, kind suite of And that opportunity in the that our our market. as some we've for

we that continue as forward. there's to so think we opportunities move And for

highlight kind and us of As what ability beyond for Mike the mentioned, just Ocrevus home kind like products. Stelara, infusion the traditional of expand were had products to

bit we our team to certain lockdowns highest certain a we lot and and through of were that nature. look, a the frequency, yield. to where part we that increased getting reach disrupted that were And and of make targeted into we invested make was that second is, spending The they it COVID commercial things and their time

around And think focus we their have relationships. those that opportunity that continue we're so finding And way, and an where to building I to they're is.

are really we've some low and to a look, expands look, it like always being that we areas we therapies, going think that, us of double-digit to like type forward. some takes growth products trajectory. bring that that to and that portfolio that and going as there's it's of all, decline. We be are to to all some going portfolio defined There's broad puts right? and of move in the So we on the and going opportunities we as be going But have that advance

that part your sorry, second So perspective. I'm of from question? the

Jamie Perse

partnerships systems Just and [indiscernible]? with how their have that on you might health the impact

Mike Shapiro

Yes. the like that the alignment we with systems. really have Look, we health

care the that think having health we the talked even team consistent I have system believe members care at navigate I that within of of able significant of challenges been of we've And the hospital. they're the deepened about tirelessly side deliver kind to that times we've throughout the the are transition given to part our transition relationships, pandemic that care the before, high-quality dedicated worked in challenge. team, and part have we've

to to So those directly to them the that, forward. the collaboratively that home. that We can out drive to identify really the that of transition demonstrate help ability moving again, think able hospital safely we've work systems health patients to the been and with and

starts of done scheduled and operations while non-COVID move able for go towards balance that their manage to that procedures that and think more some little being a again, to starts to navigate we we'll continue think normal as able back challenging job to the that that, as serve consistency just forward. care hospitals, think care -- we move coded to flows. patients continue non-COVID very around good bit a they they've We also of to the to So being and of

service looking care continue partner to well-positioned of to at choice and into expect post-acute be transitioning We be a the the providers. they're as post-acute into the patient to

John Rademacher

look, continue have across board. On your around to payers, really relationships the strong question

guys well, care. knowing a now. right are of value that side of the with as payers creation her equation watch little We the the cost/quality to trying right cost meaningful I struggling think and a you as bit overall as lot on a the of manage we're MLRs total them we do know they're tape, for are the that

as certain achieving the they're thinking to to partner ways board. around we that them, with continue continue have we keep and across goals making really focusing so And which We ours. good can affordability achieve their in innovative about we those efforts dialogue

And partner and and I it's outcomes we of So of that be the to from really whether be think continue care, providers. about to fee-for-service, to that continue things the or move part we'll deepening that. service away towards very think fostered we're their to well-positioned network rewarded pleased we value-based of relationships

Jamie Perse

just right. performance, been And Mike, that's strong. on you, one All for the margin really

the think in I a despite chronic, lower comes high at in quarter growth margin. a the watermark new which

getting think are mentioned tease apart what the offsetting shift? up. the percentage us, kind you're that these going you visits color in and how of can you more that provide can part margin you but Maybe despite kind that's I mix coming better infusion growth? chronic just from to sites of for of on would infusion So margins just is that any love Where from? you the it, margins of for levels

John Rademacher

a as that folks Yes. taken have rally mean, headwind. to John, And speaks the in grow chronic field. will Jamie. it's faster, very we operations we've I a mean we explicit been rate it face pride of this margin I the as the just a great question, cry. team the

the challenging that, quarter, challenge all net-net, a market, to disciplines addition has been again, labor But which, been in and took across third the challenge. team that with it's the a all in as In universal geographies.

And basis continue labor things. and medical through the as utilizing so for been point. a supply said, work -- procurement to fight been drug through to of it's And of shave every efficiencies, suites. It's always every off couple we've our through strategies We to penny costs. we

which though those procurement sourcing and that And the every basis teams therapies. of point have seismic are shift towards so therapies, focused within each margin for rate, are relentlessly even the on lower fighting chronic time we over

we're couldn't to that we we're margin basis point be net-net, keep and continuing line. offset obviously, to with thrilled more going expansion. And thrilled to gross how like continue the to fight So the we're every

Operator

comes with And line from our next the Pito of Bank. Chickering question Deutsche

Kieran Ryan

you a just pretty Kieran Obviously, Pito. you came XQ? into kind in pressure about strong. talk little bit labor in Ryan margins there for This is to saw a more. on Could dig was the of I little hoping

pretty of you So demand is that like staffing kind in it having well. from looks good that or just of -- are any XQ, And just dynamic you changed? issues handled sequentially a it how spot? But kind

John Rademacher

we're that think mean, focused the a continue process. in to through do everyone that tremendous it. to recruiting every a out and Look, I are and timely immune as it's that certain possible expand think making market. positions And business that to team position we job that kind grow day, a we're as around called filling I open I we be them when challenging not the Yes. process. has of the through done of have

been consistent and As We, certain pressure of certain organization, It's well, to and, Mike mentioned in as make we remain disciplines some geographies as an our instances, previously in the have not comments certain ways. proactive competitive. different prepared very that active some in are feeling look, across country.

to that the markets to a continue that we being of opportunities be. why great the and to the Option emphasize be Care to employer an continue in health place have focus part around the to of We is utilize programs exist choice to team

to feel inflation. inflation other mitigate feel some So of going footprint look, gasoline into continue And into going continue of to to We're made help of some expansion and/or necessary. that be we'll to the our as of feel facilities, technology, to move and to pressures to into wage pressures the active marketplace we've where and investments could the also our the the going the from offset supplies we're pressures utilize in medical proactive to like that and we we're our continue forward. inflation

Kieran Ryan

impact And a there? has had wondering IVIG any go-to-market Just gone Cool. provide acquisition? the you follow-up. if And integration Okay. update how that's quick on on Could just strategy? an BioCare your

Mike Shapiro

complete. Kieran. Sure, Mike. Look, It's effectively we're

of loved things technology one integrate that's relatively to was. the was We think transaction that weeks, in able I our infrastructure. of given were within we size. It about matter modest the it a literally

definitely headline earnings very we've we've IG interesting that set it it's perspective, strategies biggest integrated seamless not biggest into highly it's go-to-market some it while from the they resources, our it's patient had think while was -- and cohort. commercial as wasn't the Again, integrated because the up M&A an complementary transaction, we contribution smooth. the again, commercial been I So strategies. overall, very front, And

Operator

from line Petusky Mike of with Barrington next the question Research. comes our And

Mike Petusky

I shares five So shares the outstanding? outstanding. Mike, yet. the and you release times, is I've at also I looked find out Do don't can't Q still think have

Mike Shapiro

later. Yes. our No, Mike, going it's coming out Q We're file later today. to

the will wasn't So will be the there's Q no that in X-K, in It but today. quarter. that it. later detail -- close But from change miss meaningful count you it the in didn't second share

Mike Petusky

think And be about I QX, flu of Perfect. when think sort you of of may don't affect but maybe that how that, flu how do season, in fourth guess that predicting Okay. heavier then historic on season? a about just and relative guys maybe QX I you sort should to I COVID quarters? you the maybe think lighter combination guys

Mike Shapiro

Yes.

fourth So couple as One, quarter, about a into expecting QX. up guiding think we from obviously, back of you can Mike, the we're bump modest a a we're sequential that thoughts. -- to

usually, of admittedly see that throughout the typically And the You quarter in gradual uptick is weakest you QX a where year. the year. industry this see

So expect we'd that.

view gives little benefit chronic going patients side, of visibility on us than but bit are That gives because autopilot the a you on that turnover. a that as we're X/X us chronic revenue of lower the any have not level the a that quarter, more quarter, revenue other The higher with chronic portfolio, in into any that are we on for entering confidence. know, thing, our more service of forward on quarter,

With a some are comps reasons the mentioned, a said a little from as writing, you'd in Typically, the acute business, you that bit see prior nothing out, colder but this little again, interesting But pneumonia this for see to modest that uptick fourth John year. expect portfolio, here people hitting more as dramatic, it's the and the physician season overly well. flu would frequently, bit. we a in quarter little typically ramp up

Mike Petusky

term? Okay. mean, Great. pay. commercially guess, more, think and when in I how most historically, is infusion non-government of your I more do services priced longer you a sort maybe then way of of feel and infusion business terms of And through historically, getting just pay term. like maybe sort you one anything I reimbursed that longer services CMS they've pricing about government is understand of fair But

John Rademacher

Yes.

really earlier, the that in to adapted and working As I the space. home on and know for are of use a Medicare expanded reimbursement as fact especially collaboratively mentioned the MA well beneficiaries with commercial look, get market and we what fair the as we infusion, based independently NHIA has home

want in on of the is And drum. to it in the a that continue to care. patients them through at care setting appropriate the most exposure the to the I Medicare mean conversation going we're helped which COVID. that I beneficiaries, beating to pandemic, side care access especially that involved, receive path we're their COVID knowing to would think, isolate had offering we're frustrating, in that have least mean, that vulnerable, a everyone I from right for in high-quality So down setting that cost of

look, conversations. eternal. the to We'll So -- have hope springs that continue

guess part that legislation of bill better which the back get for a because to things in whether on moving and things that. the forward. hazard infrastructure we support to attach going have to it's we're We a relentless it's or be it go, are going on try We're act on to the out But conversation. hard bipartisan the as build trying to figure we how Washington, Washington, know but will of it it's right way side to

Mike Petusky

Absolutely.

may for around trending anticipated. It for one did quick have than you do a Just Mike. guidance CapEx year? have it's missed I this but any CapEx update like lower or this, you I seems comments

Mike Shapiro

we and CapEx construction around building it's give good in would of the any $XX change We've a the year said that around Mike. guidance. some challenges with No be to question, for give million. expect didn't guidance, that -- any We we CapEx didn't materials. admittedly No, Yes.

more a up. would we catch a Some little delayed, of have initiatives but lot that to been our pharmacy expect of

that same to. traditionally in range folks the still guided So we've

Operator

questions, John further like any no conference back for showing Rademacher over to turn and would the to further I'm remarks. I

John Rademacher

Yes. Thanks, for Michelle. this you us morning. joining Thank

members our continue momentum we hard across As the times, business the of challenging recognize the more navigate to a strong that team and the building, patients. productive work country but some continue very to quarter, serve outlined, also certainly third we of feel

but importantly, are, excited we're really excited more going. we So about about where where

this for take So care. your thanks attendance morning, and

Operator

you conference Thank This concludes call. participating. today's for

great a disconnect. day. You Everyone, may now have

John Rademacher	CEO
Mike Shapiro	CFO
Matt Larew	William Blair
Brooks O Neil	Lake Street Capital Markets
Mike Minchak	J.P. Morgan
Adam Ron	Bank of America
Jamie Perse	Goldman Sachs
Kieran Ryan	Deutsche Bank
Mike Petusky	Barrington Research

Option Care Health (OPCH) 6 Nov 212021 Q3 Earnings call transcript