Option Care Health, Inc. Q4 FY2024 earnings call

• The fourth quarter was productive, marking the 20th consecutive quarter of delivering financial commitments. - IV solution supply chain challenges improved, and 2 new state-of-the-art compounding pharmacies were opened in New York City and Tampa. - Acquired Intramed Plus in late January, an infusion provider in the Southeastern US, with integration efforts underway. - Expanded the advanced practitioner model, with over 175 infusion locations and 15 sites with advanced practitioner capabilities. - Exhausted prior share repurchase authorization and Board approved a new $500 million authorization. - Intend to continue investing in pharmacy and infusion suite network, technology, and clinical capabilities in 2025 despite Stelara impact.

In the fourth quarter, revenue grew 19.7% compared to Q4 2023. There was balanced growth across the portfolio with considerable contribution from rare and orphan and limited distribution therapies. Acute therapy had high single-digit growth. Gross profit grew 8.6% over the prior year fourth quarter. SG&A as a percentage of revenue was 12.2% in the quarter. Q4 adjusted EBITDA was $121.6 million, growing almost 9%. Adjusted earnings per share in Q4 was $0.44, representing 15.8% growth over the prior year. For the full year, adjusted earnings per share was $1.58, representing more than 10% growth year-over-year.

• For full year 2025, expect revenue of $5.3 billion to $5.5 billion, adjusted EBITDA of $450 million to $470 million, and adjusted earnings per share of $1.59 to $1.69 a share. - Net interest expense projected to be $55 million to $60 million, effective tax rate expected to be 25% to 27%, and at least $320 million in cash flow from operations. - Revisions to guidance primarily include the impact of the Intramed Plus acquisition.

• Supply chain challenges that were an issue in prior quarters. - Competitive dynamics with shifts in the market and some competitors exiting. - Therapy portfolio dynamics, such as the less favorable economics for Stelara. - Natural disasters impacting operations in the third and fourth quarters.

Q: Matthew Larew asked about the expectation for acute side trends throughout the year vis-a-vis competition and supply chain.

A: John Rademacher responded that supply chain dynamics continued to improve, they were back to a strong position taking on new patients, and there were competitive shifts with some exiting, but they were well positioned to capture market demand.

Q: Brian Tanquilut asked about Q1 seasonality and Stelara impact.

A: Michael Shapiro responded that there would be a modest Q1 seasonality due to typical early Q1 disruptions, and they had targeted clinical programs for Stelara patients.

Q: Lisa Gill asked about margins at Intramed and acquisition targeting.

A: Michael Shapiro responded that Intramed had local presence and they aimed for low double-digit multiples, and they were disciplined in deploying capital for accretive acquisitions.

Q: Pito Chickering asked about biosimilars impact on Stelara and acute labor costs.

A: Michael Shapiro responded biosimilars had no material impact in 2025, and on labor, they were well positioned to recruit and retain talent.

Q: Constantine Davides asked about new pharmacies and suite utilization.

A: John Rademacher and Michael Shapiro responded about the advanced features of new pharmacies and that over 1/3 of nursing visits were in suites, with plans to expand advanced practitioner model.

Q: Joanna Gajuk asked about guidance raise and advanced practitioner model.

A: Michael Shapiro and John Rademacher responded about guidance raise being mainly from Intramed and details on advanced practitioner model.

Q: Sarah Conrad asked about SG&A investments and VYJUVEK traction.

A: Michael Shapiro responded about SG&A investments being in operational infrastructure and no fundamental change in VYJUVEK economics.