OPCH - Earnings call transcript Q1 2022 | Option Care Health, Inc.

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Operator

Thank you for standing by, and welcome to the Option Care Health First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to turn the conference over your host, Mr. Shapiro. Mike begin. may you Sir,

Mike Shapiro

morning. Good

with and Before today’s that encourage the we certain and press risks discussion include to We financial that our statements including forward-looking conditions. from statements update law. are cause please review to statements that by actual note subject performance future forward-looking our materially Form assumptions specific and you XX-K regarding any required expectations. our SEC related today’s We filed as and the reflect and release, do information market those any differ These uncertainties will well risks not to begin, industry forward-looking as could our expectations in to duty as current the uncertainties. results except undertake to

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

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

John Rademacher

a first after proved team. Mike, widespread Option members, sluggishness morning, the good and everyone. initial and Health productive very team the of to year Overall, our for patients, omicron due impacts to be variant Thanks, to start Care on customers, the quarter the

to to invest provide we ensure unsurpassed environment navigating while patient economic continue We challenging in our strategy, future the care. growth

of to half quite as year vaccine in see this we first XXXX. the quarter our metrics pleased quarter were As operational spectrum results will second to note year, financial by the the prior was Mike across starting first that very soft the use financial of the performance of comparable strong COVID distribution we quarter Specific just in minutes, of period few I manage to our a the first were and am review enterprise. and

not leverage we the We from benefits P&L that also drive expense do a believe to repeat. year one-time are helped in benefited this likely that few

So the out quarter, to in very will growth we quarter, our the the the we anticipated, Nonetheless, a believe will of while are normalizing comps our out growth we financial and extent. raising is coming for guidance Mike greater in first discuss on reported based profile our half year momentum strong shortly. first balance anticipate accordingly as the we back as

were As disruptive in operation. very the patterns pharmacy the we the resurgence of referral local our we impact COVID the entered related variant. midst year, and This had on omicron to a

we able after Given quarter. the in saw resilience field, were of end subsided the respond the to omicron by quickly and of we normal first cases our the in teams recurrence operations the a

referral volumes in reopening certain gradual few sources. a While many referral to a we our did of in lag geographies, continued see

driven chronic and the muscular and chronic was strong was quarter inflammatory Our multiple especially others. in and our revenue of newer therapies myasthenia therapies dystrophy gravis, for portfolio by sclerosis,

growth We thyroid therapies year available also last points supply for were short in a therapies including few saw now eye that of are disease. from

the across earnings our with pressures services utilize. on goods we call, prior the we entered unprecedented spectrum broad discussed year we also inflationary of As and

was the of the first year. see the in somewhat While inflationary pressures an the increased collective we muted impact balance quarter, do in

of compensation primarily our end first our to we part continued We competitiveness thoroughly labor and quarter cycle. the annual assess adjust as of at the

until after QX. So the compensation increases are not fully reflected

procurement others. key and medical increases and including categories We services supplies, plastics seeing transportation, broad in are business key also cost

the to but the inflationary situation storm focused remains pressures believe in possible, finding and day we I recruit fielding we to and As competitive while the to career team focus well, both care. sources remain to from every greatest a reasonably to the always, development of our compensation weather maintaining level industry. perspective. new labor and efficiency the clinical are members continue mitigate we team team patient is highest the while investments the ensuring will challenging, on on extent quality of making best The continue

and quarter, initiatives. progress continued on invest and the about the Nursing which believe of The acquisition growing we platform in to we making Aside we national our great a alternate also Nursing Wasatch the with which future two while of good closed provides recent infusion site experience Infusion growth or establishing tremendous is from our platform the team integrating can acquisition, are acquisitions we also learn are on Infinity patient market, in portfolio Infusion Networks Specialty a Utah recently unique excited deal. in SPNN. Pharmacy dynamics the first we We the nursing adding from to SPNN our

this believe our also will nursing amongst to the will marketplace, capabilities future differentiate growth, only therapies. in platform clinical especially chronic continue We enable help not our but

added us over including manufacturers. clinical to biopharmaceutical write has infusion was back clinics Regarding believe SPNN that organization pre-existing help the pharmacies, our cash array and to these further will to pharmacies, that natural four further expertise, started. infusion space. chronic our team presence XX platform settings our capability to With capability. am suite ability specialty With progression complementary we beginning infusion flow and serve I just team the our with on our clinical distinct built this expanded find SPNN to a and that and attractive unique acquisition, are confident a transactions executed foundation free highly establish the and our post-acute very getting script nursing Care the upon flow, of technology We to just accelerate are The have Health national expand our intensely back a had we our months, created have acquisitions has the platform in and economic seek a help model and our it a capital Reflecting for a strong broad Funded to and national the attractive and structure established. strategy, past team foundation is capabilities take unique on and is to acquisitions our focus Infinity we’ve cash our continue a the to through commercial and in very stronger customers collaboration their opportunities growth. model we clinical capabilities ambulatory of Option strategic bone. integration generation, constructive of on robust solely

team flow wrap the while in it Despite is of coming solid and continue So results over to turn variables my Mike? expect XXXX. quarter manage, bit and am to to of accelerating track track that, is very our of momentum call I’ll in a I Mike With up in and year, a year. to on we cash perpetuate comments, review that still quite to by number to record the we out the deliver the encouraged a first the detail. strong risks early growth more the

Mike Shapiro

Thanks, John.

few there want Before jumping provide perspectives quarter, of the a a results high into level first as I to dynamics the number in the are specific for quarter.

First, recall that the given is quarterly than subsequent modest softer we and quarter seasonality bit do provide quarters guidance first a in not typically the business.

mentioned, was growth with pandemic John the impact year continued in low revenue soft chronic to and acute due that the revenue especially as Additionally, flat quarter. first double-digit growth quarter prior

performance of trends comps saw were considerations key prior of the referral up Infinity, recently The few was year. none amplifies mid-single-digits numbers, comp those Chronic growth which first of the mid-XXs and BioCure, approximately and our we a driven across was in So prior in points solid review last represented in of to the growth. the as our believe basis impact easier the we softer revenue Revenue XX.X% as again extent. year quarter year-over-year a Wasatch first revenue profile rebound of of to are was acquisitions, completed result the to our year portfolio. growth We an growth XXX Acute due reported quarter. namely factors. by revenue throughout

plagued First, therapies growth better year, eye challenging therapies. shortages chains enabled certain disease product immune prior chain and were in accelerated for the thyroid supply globulin by especially supply dynamics and that

strong and well chronic rate to gross year-over-year our we chronic dollars growing as the continued our as our mix offset chronic flat margin margin leverage grew portfolio, portfolio. our Gross headwinds John faster was similarly on execution inflammatory As saw mentioned, operational very XX.X% at focus from across newer therapies. as also related

As XX.X%. was revenue emerging we’ve but well pressure controlled supply aggressively well to we quarter in Spending the point, pressures. inflationary chain inflationary going every as our and fight to labor as we margin dropped do mix, pressures. of rate XX.X% we forward gross continued percent given basis light see for consistently revenue first SG&A of as grew in as and a Spending manage articulated, the ongoing

those grew the benefited of As capital increased a $XXX by approximately X.X% John year items in XX% to and mentioned, the cash over structure, we’ve generated million to related and quarter. $XX.X operations obviously factors represented million Adjusted do the not I million to flow EBITDA $XX.X from in second expect vendor persist quarter we balances at of quarter million of prior over including Shifting end. one-time previously cash credits. and credits $X variety reserve revenue discussed. driven into the first adjustments and recognized This

the leverage than the BioScrip Our debt profile to time to net less three ratio with less merger of than half ago. declined years our leverage times, at X.X

capital to to favorable fall, some Recall structure refinanced and recent we want questions that rates. I address opportunistically interest very last entire exposure our Additionally, terms. our regarding rising extended under

debt total first $XXX quarter, a million approximately had consisting term outstanding, BPS rate the unsecured with loans of of end rate the in senior million X.XXX% of LIBOR. of XXX notes over billion of we fixed $X.X and $XXX at As floating

into million in recent XX-K entered caps As our conjunction term refinancing, outlined most the $XXX with interest a we the in rate in loan. on

fixed million billion is XX%. $XXX our of effectively, approximately $X.X So or

result, muted. our a rate interest relatively exposure elevated to is As

from good a enterprise. to our in are structure where feel investing capital as we we as to So access continue well sitting the perspective, really capital

acquisition, results, year. Finally, as of on inflationary the full our impact of SPNN expectations quarter of on pressures, our well increasing the as views our first impending for based momentum factors, we number the are the the a business, including

now revenue expect $X.X billion. billion For of generate $X.XX to to the year, we

have inflationary the previous not million. adjusted anticipate benefits an in tougher trend comps million we years. we realized throughout pressures, We first be to expectations, increasing quarter to to as the to would our while do one-time quarterly flatter $XXX increased spending given provide the $XXX EBITDA quarterly relatively expectations combined year, compared And with the

a Operator? strong growth of delivering anticipate to continue cash that, with very we call mentioned, for year John And open and the terms in flow we’ll as generation. So Q&A.

Operator

Our with William question Matt comes Larew Blair. first Instructions] [Operator from

Your line open. is

Matt Larew

Congrats morning. on impressive good quarter Hi, here. another

like with signed traction you growth grabbing versus the what underlying further resource even are it some to of the gaining on if growth? again if Just market sense is you you’ve that somewhat are recent you years challenging, launches reliable looking just the in mentioned supply but to within therapies companies return curious try a And could and that perhaps a from in understand I these the more shares you this easy on I side do or guess, where are on derisk you comps scaled or payers looking agreements – break are was yourself? launched quarter, out I chain newer like by for specifically, even

Mike Shapiro

Hey, that XXX it had that Matt. basis available unpack points into Again, closed to start were SPNN bit. put included first would chains supply sources obviously were to acquisitions and that quarter. good Yeah, points being on to are led of and new tried we provide can About frankly John couple closed from some reluctant weren’t to referral on patients therapies that. I that wasn’t were morning, with a we were growth since going the headline. or service. three compromised Obviously, I’ll a the color. Again, XX% little thrilled due so say we

couple So, those and as lot pieces, fostering extended think major and into you the and our build hit of as the number our our payers. with definitely presence know I payer source just we relationships is out, a And our of to us renewed is relationships throughout on improved portfolio it had obviously imply again, and themes, of think the on mentioned, focused contracts if dependable think and frankly, can of laser team all mid-teens things which and we of first assure quarter. quarter, I the entering referral a and is maintain I factors back allowed I couple you moving would growing you deeper one you there but that growth upon a

Matt Larew

curious with you broader am anything Option thought last market you under that has well Option as six then, and you’ve so And the maybe been SPNN Care servicing Okay. mentioned, I on changed months and hood, volume, Infinity stitching both if SPNN, Care businesses together? plus just perhaps envision us process as over the as those in now refresh on with incorporating of terms the how

John Rademacher

Hey, am on SPNN I Matt. It’s start process. close the to John. and really Yeah, well excited to

of platform the There nature. of things When we are maximize the the us of overlap that there SPNN going move early As the forward. spend resources. fantastic. the did both would repeating it’s before, to the forward. had Infinity expect, things as some to similarities are make wasn’t complementary you we with working teams in a those days that we is, SPNN that time think and really and that bear platform couple we But behind acquisition, we we to as organizations both move It’s but we unique and we that capitalize bring look, of certain are going on mentioned are lot work

our in extends the to it capability clinical nursing very So, really critical community. access the

growth It take share and expand questions, to to only that forward. use we and necessary moving resources we it network the how this the we capacity make so to going a as share network, marketplace. market was opportunity think have both are we support to continue support able to size We to the competitive is And platform platform look, not to of continue Thinking be that and national and that And are grow an demand to going in unique continue the platform But external advantage this we really about going to those like the thought our broader use for to on us a we fact continue as leadership to to are the that to position. allows can also market the that. aggregator bring marketplace. this us in differentiated capitalize us forward. our on to resources really extend a to gives continue

Matt Larew

Thank Okay. you.

John Rademacher

Thanks, Matt.

Operator

Thank you.

of Lisa from J.P. Our comes next Morgan. question Gill

is line Your open.

Lisa Gill

the back pressure. much and Thanks it your the specific portfolio to I around what comment side? your just reimbursement to Mike, little seeing just relates comment very the if payer about? morning. good could rate bit to maybe that is you So, talk that on wanted chronic growing to you go the renewal something are a talked of faster on Was contracts that you about or

Mike Shapiro

Sure, especially our the entered reimbursement how our of the relationships. the rate has referring value-based national Lisa. to into our Again, I’d as as folks, we revenue. been, Actually, arrange gross those collaborative characterize relationships Really understand of really the we environment relatively mix establish pressure the with around stable. margin they shift was and components on that I is

conservatively we’ve Going gross expect we portfolio, the the in forward, the bears portfolio been a double-digits. that acute see we growing single-digits. chronic grow low pretty Obviously, lower profile, to which that in margin open

the portfolio as gross pressure chronic were time, over XX% in that first around very view towards quarter, have And more around XX% we we growth opportunity margin chronic favorable. Over so, acute. is time, the chronic, dollar rate that although gross shift we considerable will margin

Lisa Gill

trends we COVID question got Obviously, my out the better just went and that you the omicron amount you be that was or kind saw then early in of as that having referrals just into impact came about January of with there first January? referral in that your impact still the overall it the around saw think the was progress February and some seeing in veining in of same quarter. that really was January we you business were in – throughout a March, well parts really And when strong second

John Rademacher

patterns by we to national timeframe in of bigger the referral January have, of rhythm the is to given I probably constrained December look, Midwest got not mid-February. is got it that. in scale saw it look, saw. January the the and rates the as of and I probably staff the lagged the a and we think and of patterns the behind was infection quarter time own were kind acts a There But then they stronger. that early their independently to business We through impact started did end only John, But omicron disrupt progressed, – we from path feel the vein that certainly dealing that with the referral everyone some on constant the the this market is Challenge in variant. that.

impacted it some things to being the starting back as So, is had from stronger got the or my stronger whatever to in a as certainly exited saw with the and we said back our reference March, prepared well quarter. from normal our got near and the labor the end of as remarks, we in by perspective I the challenges we new own both come to folks normal gotten as and on staffing impacts standpoint patterns of time

Lisa Gill

Thank That’s helpful. you. Great. very

John Rademacher

welcome. Thanks, You are Lisa.

Operator

you. Thank

next Macdonald of comes Our David question from Truist.

open. line is Your

David Macdonald

questions. good Hey, morning guys. of Couple

just a was Is acute First mid-single-digit me acute quarter? clarification, up that comps were But in they did realize say that I that was the you Mike. were. know – Did what excuse you the and correct? first

Mike Shapiro

Yeah, that’s right, Dave.

David Macdonald

– And probably that say down. to I January is and either was assume modestly up flattish, or fair it’s it modestly

pre-COVID used a make and you more being sticky to So, of really in guys guys were two the in are that volume referrals both I I in quarter that doing what last question the of March. site more side a on at referral of holding to on care? is, care months having different least or towards again, potentially strong businesses early different numbers site look are if them sales you at keep guess, may suggests and have disconnect in the those driven my the some you

Mike Shapiro

QX the progression you think right. characterized is throughout way I Dave, Yeah, the

was first saw gate we year, I a definitely partially as again, with in relentless the acute given the a quarter. have to which pleased mid-single-digit omicron quarter sources, quarter the just focus very the John proposition. helped again, But due we’re and the acute growth become clearly, rebounded that’s again, throughout I portfolio of lower January rebound comps think as out more the And pretty But referral definitely the a the think with. but thrilled acute year, throughout that the mentioned, again, wave on the nonetheless, last last I and will growth proper. post us easier a year, comps think we in sluggish

John Rademacher

the spent of Yeah, and with around we frequency organization that as around lot the our look referral certainly stickiness patient that last we’ve a the the care we’ve been deliver quality time sources over with two an demonstrate around and your focusing base, question the commercial that Dave, and to process. referrals of reach the and the resources plus throughout years the those able reliability of to

kind focus our of around are back to we’ve lot are movements back patients us chronic sites. of other To and those I on with for an organization always questions care patients’ to a question, seen haven’t So, long-term we patients that experience as been patient and your the think that has that reverting satisfaction. those previous that received

the seems time, are building to the of the delivering. take from loyalty be certain the understand are But we which from. that We is dynamics of are care any this base to that don’t and something we by competitive are stable services we that patients we patient rates driving Now, make that providing solid the and and want for we we retention that as granted. of

David Macdonald

ongoing you of question other guys, Okay. couple investments And times a remarks. the just prepared in mentioned one

XX around any site am couple redirection, XX the could of to care you renewing suites, you wondering the key the add a with major as conversation during contractual incremental as of what just Just you And if view payers, those updates areas were infusion can anything I months? next curious ambulatory then investment just your give over guys you of there.

Mike Shapiro

Yeah, Dave.

it, the having a path previously, of the in high about in that of we an want we have and in ability a to in that of both on are across kind appropriate on that talked but suite. cost building level home care knowing also in we’ve right the of with conversations we is quality which path and setting spectrum suites a interest the community, there, payer patients the of there comprehensive network the continuing the are the As to are high infusion conversations out receive infusion

closely committed to as are as so, investments And to in initiatives out we order care out patients from to needs of serve areas we a other and and standpoint. continue expand that to the of comprehensive site partners at around ahead, looking move that aspects build our are network we and

other infusion being looking are know suites have well. expand we ways payer the sources but areas other look, we The playbook, we that said more in to strategic unveil community to in necessarily value to of that delivering a or augment our we patients to not and as for home is or the We of to that biopharma are our are to service to additional increase position referral look provide going aspect lines as opportunities what we for to privilege really looking we always are our bring doing. to for care the the to our able

care. that are we to about we structure really in going a ambulatory economic continue before enhance opportunity role us to as moves will ways going that so, to feel a we the take continuing both capital committed, we for fortunate and to the we settings but look are and position from it’s and look disciplined, the think play make. we’ve and post-acute we is to to strategic But in any be be in always And we

David Macdonald

much Thanks Okay. guys. very

Mike Shapiro

Yeah. Dave. Thanks,

Operator

Thank you.

next Our Street Brooks comes of Capital. from Lake question O'Neil

is open. line Your

Brooks O'Neil

key as whether particularly shape one roles filling you question. two whether availability those just relates you morning. about having pretty and am I I and are or pressures, bit little hoping a pharmacist at good labor seeing are could labor nursing Good in it – to just you have shortages, talk areas? difficulty,

John Rademacher

our was question, that your in fairing time, run reasons but pressures – had our part don’t to we Hey, SPNN you to of through Infinity acquisitions or that. away pretty To at Brooks, yeah, And strength this and that well standpoint. constraints really marketplace, are immune within would the specific for look, we patients network. in on the capacity expand tell turn that the nursing not into is I we point to the have are not

other based through thing recruiting size naturally on and QX just team clinical The our moving is, forward. our increased we’ve that look,

So, with so, nursing on And got seen feel from basis, flexibility. build a be organization to constraint positive the I to model open we’ve attract arise to really downward moving think to that our the around we positions. continue as area has and and time biggest opportunities has talents is able the the we clinical that standpoint, our that

and Our we grow and to time as our looking then continue market demand to this continue access are network part diem to nurses, full meet nurses forward. per and to allows time

Mike Shapiro

of This is, $X.X just over more the have billion across granularity a Brooks. That’s add put Hey, associates cost. over let a is around, to Mike, little labor me country. we X,XXX look,

merit adjustment just remind our John so, mentioned, most the and we reiterate And at first and the that quarter. of actions as take of end

so would most couple characterize I And they points in have previous a than organizations, are adjustments higher our like years. been

labor-related second need team every start our to which focus as And us to so we witnessed, in that quarter. day. on again recruiting the to John That’s action, more going impact single inflationary

Brooks O'Neil

clarify to No appreciate and either? just Okay. And finding pharmacists big all problem that color. I

Mike Shapiro

No.

John Rademacher

team as the would and teams, from standpoint. to general, recruit you has ability onboard nuances No. mean, strong. But expect is I for members there that market I part, our the most in look, been mean,

Brooks O'Neil

you. Thank Great.

John Rademacher

You are welcome.

Mike Shapiro

Thanks, Brooks.

Operator

Thank you.

Chickering Pito from of comes Deutsche question next Bank. Our

Your is line open.

Kieran Ryan

questions. Kieran This there. on Ryan Pito. Hi Thanks for taking is my

$X in it came around adjusted rest if the looks the I add to midpoints margin about in guidance, credits see And excuse X.X% X.X% taking that. in through – that like of like we the – So, revenue out year. the looks EBITDA called million back $X XQ, million then, in the you me it of

XX that’s points below So, sequential some XXXX. good expansion, basis about XQ XQ through but

biggest wondering is of of low the the as the between talk high of I So end guide the if side some it like the you through what can and the just cost factor of to relates about was year. rest swing kind

Mike Shapiro

thinking And They provide that the that it’s delivered the right. about, signs same there. did $XX was there I to folks to here as in we while in and always first that. a as to stars much the first Mike. home of about we you Look, Kieran, Sure, with are the net aligned, transparency to we of the about it And typically the try quarter just and are underscore, million have we we some mean, quarter, but one-timers thrilled were going again $X net way. see think benefit write first in wanted in nothing we around the we quarter million can

impactful. very pressures, quarter $XX But the yeah, high the on growth of the to to in a that as mentioned, seeing lot again million So, quite is, estimate, the inflationary our is normalized year back the Yeah, single-digit-earnings which collectively if would you and argue of we of balance the there million off frankly, momentum side. and John $XX that a and are half. near back is kind takes. $XX imply reality close That’s there of XX, million commercial best and always strong a of puts year-over-year

field, we so, with mileage impact see really to And that The do on the quarter. derivative emerging. first labor in that the up in teams our of ramped from reimbursement everything the for oil plastics clinical medical adjustments crude

still focused to on pressures. expanding simplify to momentum offset are by we inflationary unprecedented forward possible. the commercial the laser are so, we extent continued yet really see what But margin And is EBITDA going what

Kieran Ryan

fifth actually quarter rest dollar – Got like for to sure of make and despite now margin is none gross straight to the of the it. Thank margin that I you outsized every you. ask continue know are the Thank gross straight achieved, gross said, – the margin know growth excess but, fourth those of and chronic guys pressure you there you. in That’s you’d the contraction to timeline expect helpful. wanted a just I And quick to return then, I this – just paying follow-up. think you for – think this quarter we’ve of – out but through year. the I called one

So, the or still Thank quarter just there anything line that in just in XQ allowed withstands there kind you. for is wondering, effectively? – specific just now holding the of

Mike Shapiro

prepared as of within Sure, last where Kieran. ten bps was in mentioned my gross I year. was remarks, margin it Yeah,

year-over-year. that flat tailwind of relatively which first higher growth the was gross year-over-year in margin acute again the the Part quarter is on portfolio considerably So, XX profile.

margin it heard definitely talk us about year-over-year gross several rate. on year-over-year us an that again, helped reality times. you’ve and growth So, The is,

point We on face the chronic margin around over that shifts our then that every pressure. with But some towards changed has again, basis are time seismic portfolio, nothing rate we and those conviction gross will relentlessly focused dollars. growing

Kieran Ryan

Thank you.

Mike Shapiro

Thanks, Kieran.

Operator

Thank you.

comes from America. Joanna the question of of Gajuk next Our Bank

Your open. is line

Joanna Gajuk

morning. Good taking you here. the questions so Yes. for much Thank

So follow-ups. couple

your expect quarterly So, when guidance the you guess, for trends you but versus be to I – assuming flat prior year year. are

referring can margins So or something are clarify you you to that else.

rest So, think year. picking the we the talk up how I the about pressures kind should in about you of of guess, just because inflationary that,

wasn’t year? about I quite said you when sure So, talking flat were what you prior versus

Mike Shapiro

Joanna. yes, Sure,

the the improvement expect to QX a revenue year QX relatively was articulated year with our and of as pronounced the typically, year, relative a be years, some with what John benefits think from that the would to, we step then the from reflect We more considerable seasonality of throughout down and year as trying comps would flatter tougher easy I performance there in a I some we’ve increasingly So, articulated, this contribution. outlook to the and is, EBITDA year. when previous comps last was successive articulate dynamics, for throughout a on

to year we’ve what flatter past seen a of around in seasonality. bit relative little the So,

Joanna Gajuk

you that now you $XX of sense those about header Well, said talk pressures after makes inflationary million, kind that per and especially gets million $XX quarter.

So, it maybe I guess, to And I in and obviously the just then so I ROE closing EBITDA? the then, want right another or so SPNN April, wasn’t that. to for QX also - is acquisition, in year, clarify clarification, so thought it

Mike Shapiro

We was that. million. it didn’t that’s – about, little mid-teens. the than a lighter bit Yeah, we purchase price maybe obviously We $XX disclosed paid

million contribution $X annualized to million on $X basis. a an as it of think So,

So, three in, with quarters the transition that. realize we’ll around

ball maybe than that, the three, that’s around less but within not park. So,

Joanna Gajuk

you transportation are were and some If so guess, other I or cost it Or million, meaningful? it’s willing to they Okay. but labor, labor other number $XX about supply, And number? it’s a was sounds pressures guess pressure included that is, inflationary services, million I are guess, not, then compared this like of also these in some $XX also, talking you’re to the quantify? you about plastic these not that supply also when to they talk I

Mike Shapiro

ball $XX to et of inflationary on the would typical include of our use range – transportation, as that park supplies, when higher the medical million, pressures million as whether Yeah, it’s cetera. $XX I all than well labor

million to that pressures. So collective the inflationary is $XX $XX of million rough estimation a

Joanna Gajuk

care. post-acute I have mentioned you And you. you free Thank sheet lastly lot flow a something the guess, and helpful. there of That’s Okay. I acquisitions have cash situation a also talk and about and obviously question, balance when you so,

it is kind So can know you at talked, something there But outside outside core you you core are focused is last like you we I don’t there more – on are you guess expand sounded home whether because the still infusion, I kind considering mean, of of I anything kind of are else of looking time infusion. of the on that? infusion?

John Rademacher

we obviously to and of and onset the I improve mean, reflect as of structure. one merger, at look, we And where the I made are, delever the John Joanna. commitments was rapidly the Sure, capital

we where what national us we and thinking how And about doesn’t That investments. as with really sitting mentioned we to we independent the three capital. of have that very largest in to at of look, John mentioned, are think, obviously really platform we I we’ve economic access today, are one the feel are both levered with net differentiated field lower bar a the the is established footprint space. post-acute in teams clinical largest pharmacy considerable and as So, clinical support strategic now terms the times of good

as that’s for broader in on the we’ve none. we’ve diem we reflect is infusion the setting, provide second think going executed which per that organization. years nursing for I we’ve our earnings to built network With expanded transactions patient Wasatch a suite the come to national to on, experience

clinical we So, are platform. orient differentiated folks that to I think, with national is trying

us not to or broader but the how around referral gives it in of the opportunities home, our in a the think infusion and a I partners payers providers field, the relevant just broader array to partner be maybe space. in post-acute

Joanna Gajuk

Okay. taxes? have the cash Great. last one do paying guess still I one And start when you expect but I you on cash flow. NOLs, to guess,

John Rademacher

– outflow into year, revisit to we obligation won’t a that are not quite year. I meaningful us. will to for cash a a cash do mean, be meaningful have but XXXX, tax we expect that tax this be meaningful going confident We for this

Joanna Gajuk

you Okay. much answering questions. for Great. Thank the so

John Rademacher

Joanna. Thanks,

Operator

Thank you.

from Jamie Goldman Sachs. question next Perse comes Our of

is open. line Your

Jamie Perse

you you questions good Mike, talk sustainable talked Hey, just incremental opportunities SG&A you aggressively from where me. given do environment. are managing Can about the to or quick that? Two morning about guys. finding

Mike Shapiro

every investments did are and bricks entering other certain operations, maintaining year, the that as Jamie, future funding around collecting the of growth I well and we as Sure, balance entering mortar all looking when for efforts. of our at around were mean, capabilities is we think, efficient, the year, I Like and our point registration future the investments more the we looking obviously, pacing the more ways little year. not is facilities and administrative we do it’s a of billing continue though, your thoughtful on current To discretion whether around Frankly, categories. finding at and and utilize need. the and make enterprise, to to some frankly there technology team the if some discretionary we those to finding become the the through automation support processes more onboarding look, patient on we entering for investments more push

so, stop. And to the value doesn’t that look, to that technology, doesn’t become efficient up and I margin around more and let mean, find how ever this we through continue on

And confidence than and the John and still I the business that gives value so, considerably highly gross are margin slower we spending inflationary grow we’ll confident we’ve dollars. of pressures, the that this is I articulated think that going despite forward,

Jamie Perse

that you Okay. that maybe to some answer can investments at I that wanted some point Or the of say when growth, to I Am first accelerate of some right? environment growth. drive your just the want on those part and reinvest macro opportunities of that that the And – comment. follow-up is that stable, is more in follow-up on thinking about

John Rademacher

Jamie, John. Hey, it’s

So, as infrastructure. technology been a we couple in One investing the Mike said, have look, things.

commercial our and the on can also thinking clear, manufacturers productivity, that as opposed we things where chain those to a commercial understand looking as way. to are investments of biopharma different automation, and business There team point take efficient be our that we of constraining at the at Where adding we learning not to around on doing We areas recent overhead that can to the needs at just is reach ability but want unique SG&A in look looking up the ways efficiencies. patients we to And the the we grow. resources and a the production tools the to the design, we advanced in marketplace. be doing disciplined. and reorient time some are and But our of that it for operating. we prioritizing on only in the around the that, to other themselves on aspects frequency are way and are are expanding repair from of is so, look our we that’s there ways partner are we a drive machine around way more To the process we we are for mean, we really staff. staff as I take about utilizing of are and structure Any things side, and thoughtful value we well capitalize position continue into opportunities to this at efficiency the efficiency not look, are down in the anything that that. are

we I infusion services. on as that walking So, only wanted thinking spending on to continue the hold capitalize holding provider national the that you and back away privilege to investments unique the making or position position dollars of don’t are we

Jamie Perse

to would guidance is for just that question modeling My these unknowns into is of on incorporating any helpful. to hard a last around approach these days year? Are some room Just your be macro guidance? guidance. more How ever. just approach and this your dynamics things just approach macro as Understood. Okay. you impact dynamic It’s as environment color do your like

Mike Shapiro

where operate every at dynamics. areas robust to obviously, tend and quarter how two conservative No own in approach of I growth mindset with and I more very know, each our externally. would we look. as metropolitan Jamie, supply are single their dozens – Sure, you be and equally. distinct We a mean, are thoughts forecasting equally John we looking chain or - therapies created operate with in

a component model And on as several a geography on on a out variables level. well so, as we therapy cost level, level,

obviously industry to of we as and a is that take lure also are of the we love this very and But on acknowledges out and But fact view. on we conservative credibility facing. are now, handicapping not out the providing which can that right to we recognize variability what it. and that are considerable model very the we point number of it imagine, those represents there we all And heart of about contingent variety what also we environment going we our so, to doing we your as we are articulate a on is how doing a focused a so said operating we part obviously are significant scenarios variables that’s in in very, what are yet you thoughtful something thoughts you model do with that dynamic we

Jamie Perse

Alright. Thanks the for the all color.

Mike Shapiro

Jamie. Thanks,

Operator

questions time. am I no you. showing further this Thank at

turn the call me back any over closing Let remarks. Rademacher John to for

John Rademacher

joining us Yes, Thanks today. thanks, for Celery.

forward very and continuing momentum the had a you have discussed, everyone. hope the are year. we move As to looking we I we stay QX and please with day strong safe. wonderful as a Thanks we through

Operator

does this Thank you. Ladies Thank all conclude gentlemen, conference. today’s and for participating. you

now may a great disconnect. day. You Have

Option Care Health (OPCH) 28 Apr 222022 Q1 Earnings call transcript