UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41938 BrightSpring Health Services, Inc. (Exact Name of Registrant as Specified in its Charter) | Delaware | 82-2956404 | | --- | ...

BrightSpring Health Services, Inc. Reports First Quarter 2025 Financial Results and Increases Full Year 2025 Guidance LOUISVILLE, Ky., May 2, 2025 — BrightSpring Health Services, Inc. ("BrightSpring" or the "Company") (NASDAQ: BTSG), a leading provider of home and community-based health services for complex populations, today announced financial results for the first quarter ended March 31, 2025, and increased Revenue and Adjusted EBITDA 1 guidance. Financial Highlights (note: all figures exclude the Commun ...

Acquisitions and Growth Strategy - The company acquired Abode Healthcare in April 2021, enhancing its service offerings in applied behavioral analysis[9] - The company’s growth strategy includes identifying and successfully completing acquisitions, which is critical for expanding market share[19] - The company acquired BrightSpring Health Holdings Corp. and its subsidiaries in March 2019, contributing to its growth strategy[150] Financial Performance and Indebtedness - The company reported a substantial indebtedness of approximately $2.7 billion as of December 31, 2024, which may impact future financial flexibility[20] - Approximately 47% of the company's revenue comes from 10 states, highlighting its geographic concentration and market presence[31] - The company is well-positioned for future growth, with significant opportunities in the $90 billion expected revenue from oncology drugs not yet launched by 2032[39] Patient Satisfaction and Quality of Care - The patient satisfaction survey from April 1, 2023, to June 30, 2023, indicated that a significant percentage of family members would recommend the company based on their experience[9] - The Net Promoter Score (NPS) is utilized to gauge patient satisfaction, with scores above 50 considered "excellent" and above 80 "world class"[11] - The overall rating of care reflects assessments based on eight quality measures, indicating the company's commitment to high-quality service delivery[11] - The company achieved 99.99% order accuracy and 98.63% order completeness in its pharmacy services, with a patient satisfaction rate of 97% in outpatient rehab services[28][35] - The outpatient rehab services received a 97% patient satisfaction score, with 97% of patients willing to recommend the services[51] Regulatory and Compliance Challenges - The company is subject to extensive federal, state, and local regulations that could materially affect its operations and financial condition[97] - The Stark Law prohibits physicians with financial relationships from making referrals for designated health services, with penalties including denial of payment and civil penalties up to $27,750 per service[105][108] - Violations of the Stark Law can lead to civil penalties, including refunds of amounts collected and potential exclusion from federal healthcare programs[108] - The False Claims Act allows for penalties ranging from $5,500 to $11,000 per false claim, with potential treble damages, impacting the company's financial condition[114] - The company must notify CMS of overpayments within 60 days, or risk liability under the False Claims Act, which could adversely affect its operations[113] Market and Competitive Landscape - The company operates in a highly competitive industry, which poses risks to maintaining patient referral sources and overall financial performance[17] - The company operates in a highly competitive U.S. healthcare industry, facing intense competition in both Pharmacy Solutions and Provider Services segments[155] - The company faces significant competition in attracting and retaining qualified pharmacy professionals, which could adversely affect its business[66] Operational Efficiency and Technology Investments - The company emphasizes operational excellence as a key driver for growth, focusing on continuous improvement in volume and cost efficiency[59] - The implementation of the PMO-led continuous improvement program has resulted in approximately $67.5 million of annual savings in 2024[60] - The company has invested over $200 million annually in quality, compliance, and safety initiatives as part of its "Quality First" framework[64] - The company is investing in technology resources and systems to improve operational efficiency and patient care[90] Healthcare Policy and Reimbursement Risks - Changes in Medicare and Medicaid payment methods could materially affect the company's business operations and financial results[17] - Legislative changes, including the ACA and Bipartisan Budget Act of 2018, continue to impact Medicare and Medicaid reimbursement rates, affecting revenue streams[142][143] - The implementation of the Patient-Driven Groupings Model (PDGM) for home health payments resulted in a 4.36% reduction to reimbursement rates[164] - The company faces risks related to maintaining relationships with patient referral sources, which are critical for growth and profitability[160] Employee Retention and Labor Relations - The company has seen a 50% increase in compensation over the last four years to attract and retain employees[95] - Approximately 68% retention rate for clinical positions in home health care, hospice care, and rehab care from December 31, 2023, to December 31, 2024[94] - The ability to attract and retain qualified healthcare professionals is critical; failure to do so may negatively impact service quality and financial performance[198] Billing and Collection Challenges - The complexity of billing and collection processes may lead to increased accounts receivable aging and working capital shortages[206] - The company experiences significant delays in reimbursement from Medicare and Medicaid programs, particularly under managed care, which pay claims slower than traditional programs[207] - The company's billing and collection processes are subject to complex regulations that are continuously evolving, increasing the risk of payment delays[206] Drug Pricing and Supply Chain Risks - Changes in drug utilization and pricing, as well as PBM contracts, may negatively impact profitability, particularly in the Pharmacy Solutions segment[184] - The company faces risks from potential supply shortages and changes in relationships with pharmaceutical suppliers, which could adversely affect financial results[191] - Increased scrutiny over drug pricing practices may lead to legislative changes that could impact the company's operations and profitability[190]

Financial Performance - Fourth quarter net revenue reached $3,053 million, a 28.6% increase from $2,375 million in Q4 2023[4] - Fourth quarter net income was $15.4 million, compared to a net loss of $7.2 million in Q4 2023[5] - Full year net revenue for 2024 was $11,266 million, up 27.6% from $8,826 million in 2023[6] - Full year Adjusted EBITDA for 2024 was $588 million, a 9.3% increase from $538 million in 2023[7] - Total revenues for the year ended December 31, 2024, increased to $11,266,472, up 27.8% from $8,826,175 in 2023[30] - The company reported an operating income of $206,374 for the year ended December 31, 2024, compared to $147,180 in 2023, marking a 40.2% increase[30] - EBITDA for the year ended December 31, 2024, was $398,130,000, an increase from $349,516,000 in 2023, reflecting a growth of approximately 13.9%[33] - Adjusted EBITDA for the three months ended December 31, 2024, was $167,418,000, up from $142,599,000 in 2023, representing a year-over-year increase of about 17.4%[33] Revenue Breakdown - Pharmacy Solutions revenue for 2024 was $8,754 million, a 34% increase from $6,522 million in 2023[8] - Provider Services revenue for 2024 was $2,512 million, a 9% increase from $2,304 million in 2023[8] Guidance and Projections - 2025 revenue guidance is set between $11,600 million and $12,100 million, reflecting a growth of 15.2% to 20.1% over 2024[9] - Adjusted EBITDA guidance for 2025 is projected to be between $545 million and $560 million, indicating an 18.4% to 21.7% growth over 2024[15] Divestiture and Strategic Moves - The company announced a divestiture of the Community Living business to Sevita for $835 million[5] - The company expects the divestiture to enhance capital flexibility and growth rates moving forward[3] Assets and Liabilities - Cash and cash equivalents increased significantly to $61,253 as of December 31, 2024, compared to $13,071 in 2023[28] - Accounts receivable rose to $1,028,654, up from $881,627 in 2023, indicating a 16.7% increase[28] - Total assets increased to $5,926,140 as of December 31, 2024, compared to $5,532,721 in 2023, reflecting a growth of 7.1%[28] - Long-term debt decreased to $2,561,858 as of December 31, 2024, down from $3,331,941 in 2023, a reduction of 23.1%[28] - The company reported a total of $2,566,000,000 in long-term debt borrowings for the year ended December 31, 2024, with repayments totaling $(3,396,334,000) during the same period[32] Expenses and Income - Selling, general, and administrative expenses for the year ended December 31, 2024, were $1,382,061, an increase from $1,286,614 in 2023[30] - The provision for credit losses increased to $33,998,000 for the year ended December 31, 2024, from $23,237,000 in 2023, marking a rise of approximately 46.3%[32] - The company incurred $54,866,000 in interest expense for the three months ended December 31, 2024, compared to $83,054,000 in 2023, reflecting a decrease of approximately 34.0%[33] Shareholder Information - The weighted average shares outstanding for basic shares increased to 192,997 for the year ended December 31, 2024, compared to 117,868 in 2023[30] - The company reported a diluted EPS of $0.08 for the three months ended December 31, 2024, compared to a diluted EPS of $(0.06) in the same period of 2023[36] Cash Flow - The net cash provided by operating activities for the three months ended December 31, 2024, was $90,612,000, a decrease from $162,400,000 in the same period of 2023[32]

Revenue Growth - Revenue for Q3 2024 increased by $650.3 million, or 28.8%, reaching $2.9 billion compared to Q3 2023[73] - Pharmacy Solutions segment revenue grew by $592.5 million, or 35.4%, totaling $2.3 billion[73] - Provider Services segment revenue increased by $57.7 million, or 9.9%, to $641.1 million[73] - Revenues for the three months ended September 30, 2024, were $2,906.8 million, an increase of $650.3 million or 28.8% compared to $2,256.5 million for the same period in 2023[92] - Revenues for the nine months ended September 30, 2024, were $8,213.7 million, an increase of $1,762.0 million or 27.3% compared to $6,451.6 million for the same period in 2023[97] - Product revenues increased by $1,620.2 million or 34.2% to $6,357.2 million for the nine months ended September 30, 2024, compared to $4,737.0 million in 2023[98] - Revenues for the Pharmacy Solutions segment for the three months ended September 30, 2024, were $2,265.7 million, an increase of $592.5 million or 35.4% from $1,673.2 million in 2023[105] - Revenues for the nine months ended September 30, 2024, were $6,357.2 million, an increase of $1,620.2 million or 34.2% compared to the same period in 2023[108] - Revenues for the Provider Services segment for the nine months ended September 30, 2024, were $1,856.4 million, an increase of $141.8 million or 8.3% year-over-year[120] Profitability and Loss - Net loss decreased by $121.1 million, from $130.1 million to $9.0 million[73] - Adjusted EBITDA rose by $20.5 million, or 15.7%, to $151.0 million[73] - Pharmacy Solutions segment EBITDA increased by $13.1 million, or 15.2%, to $99.2 million[73] - Provider Services segment EBITDA grew by $11.8 million, or 14.4%, to $93.2 million[73] - Loss per share decreased by $0.14, from $0.18 to $0.04[73] - Adjusted EPS improved by $0.19, from $(0.08) to $0.11[73] - Adjusted EBITDA for the three months ended September 30, 2024, was $151.0 million, an increase of $20.5 million or 15.7% from $130.5 million in the prior year[97] - Adjusted EBITDA for the nine months ended September 30, 2024, was $420.7 million, reflecting an increase of $25.4 million or 6.4% from $395.2 million in 2023[104] - The net loss for the nine months ended September 30, 2024, was $35.9 million, an improvement from a net loss of $149.6 million for the same period in 2023[127] Expenses and Costs - Cost of goods for the three months ended September 30, 2024, was $2,077.1 million, an increase of $567.3 million or 37.6% from $1,509.8 million in the prior year[95] - Cost of goods for the nine months ended September 30, 2024, was $5,816.0 million, an increase of $1,589.9 million or 37.6% from $4,226.1 million in the prior year[97] - Selling, general, and administrative expenses for the three months ended September 30, 2024, were $351.3 million, a decrease of $59.3 million or 14.4% from $410.5 million in the prior year[96] - Selling, general, and administrative expenses were $1,039.2 million for the nine months ended September 30, 2024, an increase of $53.1 million or 5.4% from $986.2 million in 2023[99] - Interest expense, net for the three months ended September 30, 2024, was $56.1 million, a decrease of $27.6 million or 33.0% from $83.7 million in the prior year[95] - Interest expense, net decreased by $68.0 million or 28.2% to $173.5 million for the nine months ended September 30, 2024, compared to $241.5 million in 2023[99] Acquisitions and Corporate Actions - The company completed three acquisitions within its Provider Services segment[73] - The company completed its IPO on January 30, 2024, raising net proceeds of $656.5 million from the sale of 53,333,334 shares at $13.00 each[86] - The company plans to use IPO proceeds to repay $343.3 million under the First Lien Facility and other debts, with remaining funds allocated for general corporate purposes[86] - The company has granted approximately $163.3 million in non-cash share-based compensation related to equity awards in connection with the IPO[87] Legal and Regulatory Matters - The total financial impact of a legal settlement reached in May 2024 is $120 million, concluding the Silver matter without admitting liability[89] - The company received a quality incentive payment of approximately $30 million for its Infusion and Specialty Pharmacy services during Q2 2023, but did not receive any QIP during the nine months ended September 30, 2024[88] Cash Flow and Liquidity - The principal sources of cash have historically been from operating activities, with future capital requirements dependent on acquisitions and operational results[130] - The company believes its operating cash flows and available cash will be sufficient to meet cash requirements for the next twelve months and beyond[130] - Total liquidity at the end of the period was $416.9 million, a decrease from $431.5 million at the end of 2023[132] - Net cash used in operating activities was $66.8 million for the nine months ended September 30, 2024, compared to net cash provided of $48.4 million in the same period of 2023, reflecting a variance of $115.2 million[133] - Net cash used in investing activities increased to $124.5 million in 2024 from $117.4 million in 2023, primarily due to an $8.9 million increase in property and equipment purchases[134] - Net cash provided by financing activities was $214.2 million for the nine months ended September 30, 2024, significantly higher than $67.0 million in 2023, driven by net proceeds from IPO offerings[135] Debt and Financing - Total debt as of September 30, 2024, was $2.73 billion, down from $3.41 billion at the end of 2023[140] - The company had $97.1 million of borrowings outstanding under the Revolving Credit Facility as of September 30, 2024, compared to $50.7 million at the end of 2023[138] - The company’s leverage ratio was 4.39x as of September 30, 2024, improved from 5.86x at the end of 2023[140] - The company incurred a loss on extinguishment of debt of $12.7 million related to the repayment of the Second Lien Facility[139] - The First Lien Credit Agreement was refinanced with a remaining balance of $2.57 billion at a rate of SOFR plus 3.25%[137] - The company issued 8 million Tangible Equity Units (TEUs) with a stated amount of $50.00 per unit, commencing quarterly cash installments in May 2024[139] - As of September 30, 2024, the company's outstanding debt was $2.7 billion, with three interest rate swaps totaling a notional value of $2.0 billion designated as cash flow hedges[143] - A hypothetical 1% increase in interest rates would result in an annual increase in net loss and a decrease in cash flows by $6.5 million based on the borrowing level as of September 30, 2024[143] Operational Challenges - The company faces significant challenges in managing labor costs due to inflation and a shortage of qualified caregivers, impacting the healthcare industry[142] - Rising healthcare costs, typically higher than inflation, continue to affect the company's employee benefit plans[142] - The company has implemented supply chain efforts to manage and mitigate inflationary impacts over recent years, although future cost increases remain unpredictable[142] Accounting and Reporting - There have been no material changes to the company's critical accounting policies and estimates from those disclosed in the Annual Report for the year ended December 31, 2023[141]

LOUISVILLE, Ky., November 1, 2024 — BrightSpring Health Services, Inc. ("BrightSpring" or the "Company") (NASDAQ: BTSG), a leading provider of home and community-based health services for complex populations, today announced financial results for the third quarter ended September 30, 2024, and increases 2024 revenue and Adjusted EBITDA 1 guidance. 1 BrightSpring Health Services, Inc. Reports Third Quarter 2024 Financial Results and Increases Full Year 2024 Guidance Financial Highlights • Net Revenue of $2,9 ...

Revenue Growth - Revenue for Q2 2024 increased by $563.5 million, or 26.0%, reaching $2.7 billion compared to Q2 2023[70] - Pharmacy Solutions segment revenue grew by $517.7 million, or 32.4%, to $2.1 billion, while Provider Services segment revenue increased by $45.8 million, or 8.0%, to $615.7 million[70] - Total revenues for the three months ended June 30, 2024, were $2,730.2 million, an increase of $563.5 million or 26.0% compared to $2,166.7 million for the same period in 2023[93] - Total revenues for the six months ended June 30, 2024, were $5,306.8 million, an increase of $1,111.7 million or 26.5% compared to $4,195.1 million for the same period in 2023[103] - Revenues for the Pharmacy Solutions segment for the three months ended June 30, 2024, were $2,114.5 million, an increase of $517.7 million or 32.4% compared to $1,596.8 million in 2023[111] - Revenues for the six months ended June 30, 2024, were $4,091.5 million, an increase of $1,027.7 million or 33.5% compared to the same period in 2023[117] Profitability and Income - Net income rose by $15.9 million to $19.9 million; excluding a $30 million quality incentive payment from Q2 2023, net income increased by $46.8 million[70] - Income per share increased from $0.03 to $0.10, reflecting a $0.07 increase[70] - Net income for the three months ended June 30, 2024, was $19.4 million, a significant increase of $16.7 million from $2.8 million in the same period of 2023[99] - Adjusted EBITDA decreased by $10.3 million, or 6.9%, to $139.1 million; excluding the $30 million quality incentive payment, it increased by $19.9 million, or 16.7%[70] - Adjusted EBITDA for the six months ended June 30, 2024, was $269.6 million, an increase of $4.9 million or 1.9% from $264.7 million in 2023[108] Costs and Expenses - Cost of goods for the three months ended June 30, 2024, was $1,931.8 million, reflecting an increase of $522.5 million or 37.1% from $1,409.2 million in the prior year[94] - Cost of services increased to $409.4 million for the three months ended June 30, 2024, up $24.0 million or 6.2% from $385.4 million in the same period of 2023[95] - Selling, general, and administrative expenses rose to $326.6 million for the three months ended June 30, 2024, an increase of $34.2 million or 11.7% compared to $292.5 million in 2023[96] - The cost of goods for the six months ended June 30, 2024, was $3,738.9 million, an increase of $1,022.6 million or 37.6% from $2,716.2 million in 2023[104] - Selling, general, and administrative expenses for the six months ended June 30, 2024, were $687.9 million, an increase of $112.3 million or 19.5% from $575.6 million in 2023[105] Acquisitions and Growth Initiatives - The company completed three acquisitions within its Pharmacy Solutions and Provider Services segments[70] - The company opened four de novo offices in the second fiscal quarter of 2024, expanding its geographic footprint in pharmacy and provider services[81] - The company serves over 400,000 patients daily through over 10,000 clinical providers and pharmacists across all 50 states[69] - The company serves approximately 20,000 patients today, with significant opportunities for delivering integrated care across its pharmacy and provider services[80] Debt and Financing - The initial public offering (IPO) raised net proceeds of $656.5 million from common stock and $389.0 million from tangible equity units, totaling $1.045 billion[83] - Approximately $343.3 million of the IPO proceeds were used to repay outstanding debt under the First Lien Facility[83] - Total long-term debt as of June 30, 2024, was $2,563.5 million, down from $3,331.9 million as of December 31, 2023, reflecting a leverage ratio of 4.51x[150] - The company incurred a loss on extinguishment of debt of $12.7 million related to the repayment of the Second Lien Facility using IPO proceeds[145] - The company issued 8,000,000 Tangible Equity Units (TEUs) with a stated amount of $50.00 per unit, which will yield quarterly cash installments equivalent to 6.75% per year[149] Operational Challenges - The company faces challenges in passing on increased costs associated with providing services to Medicare and Medicaid patients due to fixed reimbursement rates established by federal and state laws[152] - Labor shortages in the healthcare industry are expected to impact the company's operations, particularly in homecare services[153] - The company is experiencing rising costs in pharmaceutical drug prices, which are passed along from suppliers[153] - Inflationary impacts in the supply chain are anticipated, but the company cannot predict its ability to manage and mitigate future cost increases[153] - The company has limited ability to pass on increased costs to customers due to the nature of its service agreements[153] - Managing labor costs remains a significant priority for the company amid ongoing inflationary pressures[153] - The market risks associated with the company's debt obligations have not changed from those reported in the previous annual report[152] - The company continues to monitor the effects of inflation on its operations and financial performance[153]

Financial Performance - Net revenue for Q2 2024 was $2,730 million, representing a 26.0% increase from $2,167 million in Q2 2023[2] - Net income for Q2 2024 was $19.4 million, compared to $2.8 million in Q2 2023[2] - Adjusted EBITDA for Q2 2024 was $139 million, down 6.9% from $149 million in Q2 2023; however, excluding a $30 million Quality Incentive Payment in 2023, it increased by 16.7% compared to $119 million in Q2 2023[2][3] - The company reported a gross profit of $389 million for Q2 2024, up 4.6% from $372 million in Q2 2023; excluding the QIP, the growth rate was 13.8%[3] - Total revenues for Q2 2024 reached $2,730,210, a 26% increase from $2,166,724 in Q2 2023[33] - Product revenues were $2,114,491 in Q2 2024, up 32% from $1,596,839 in Q2 2023[33] - Gross profit for Q2 2024 was $389,033, compared to $372,070 in Q2 2023, reflecting a gross margin improvement[33] - Operating income decreased to $62,414 in Q2 2024 from $79,616 in Q2 2023, indicating challenges in managing operating expenses[33] - Net income for Q2 2024 was $19,441, a significant recovery from a net loss of $2,766 in Q2 2023[33] - Adjusted EBITDA for Q2 2024 was $139,142 thousand, compared to $149,427 thousand in Q2 2023[35] Revenue Guidance - Full year 2024 revenue guidance was increased to between $10,450 million and $10,900 million, indicating growth of 18.4% to 23.5% over 2023[7] - Adjusted EBITDA guidance for 2024 was raised to between $570 million and $580 million, reflecting a growth of 12.2% to 14.2% over 2023[7] - The Pharmacy Segment is expected to generate revenue between $8,000 million and $8,400 million, representing a growth of 22.7% to 28.8% over 2023[7] - The Provider Segment is projected to achieve revenue between $2,450 million and $2,500 million, indicating growth of 6.3% to 8.5% over 2023[7] Cash and Liquidity - Cash and cash equivalents increased to $25,027 as of June 30, 2024, from $13,071 at the end of 2023, indicating improved liquidity[28] - Cash and cash equivalents at the end of Q2 2024 were $25,027 thousand, compared to $11,256 thousand at the end of Q2 2023[34] - Cash used in operating activities for Q2 2024 was $(15,225) thousand, an improvement from $(25,204) thousand in Q2 2023[34] - The company experienced a net cash provided by financing activities of $39,907 thousand in Q2 2024, down from $70,581 thousand in Q2 2023[34] Debt Management - Long-term debt decreased to $2,563,536 as of June 30, 2024, down from $3,331,941 at the end of 2023, showing improved debt management[31] - Long-term debt borrowings in Q2 2024 were $2,566,000 thousand, with no new borrowings reported in Q2 2023[34] Earnings Per Share - The company reported a basic income per share of $0.10 for Q2 2024, compared to $0.03 in Q2 2023, indicating improved profitability per share[33] - For the three months ended June 30, 2024, the diluted EPS was $0.10, compared to $0.03 for the same period in 2023, representing a 233% increase[38] - The adjusted EPS for the six months ended June 30, 2024, was $0.22, compared to $0.04 for the same period in 2023, indicating a 450% increase[38] - The adjusted EPS for the six months ended June 30, 2024, was $0.22, reflecting a significant improvement compared to $(0.15) in 2023[38] Costs and Expenses - Total adjustments to reconcile net income to Adjusted EBITDA amounted to $26,657 thousand for Q2 2024[35] - The company incurred $5,022 thousand in acquisition-related costs during Q2 2024[35] - Depreciation and amortization expenses for Q2 2024 were $50,071 thousand, slightly down from $50,205 thousand in Q2 2023[35] - Ransomware attack response costs for the first half of 2023 amounted to $0.5 million for the three months and $2.5 million for the six months ended June 30, 2023[36] Shareholder Information - The weighted average common shares outstanding used in calculating diluted EPS for the three months ended June 30, 2024, was 208,987 thousand, up from 126,449 thousand in 2023[38] - The income tax impact on adjustments for the three months ended June 30, 2024, was $(0.12), compared to $(0.04) in 2023[39] - The total management fees resulting from the Monitoring Agreement were $22.7 million, which ceased following the completion of the IPO[36]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-41938 | --- | --- | --- | --- | --- | --- | --- | |----------------------------------------------------------------------|------- ...

Acquisitions and Market Expansion - The company acquired Abode Healthcare in April 2021, enhancing its service offerings in the healthcare sector[6]. - The company is actively expanding its market presence through new branch and facility openings, referred to as "de novo" locations[6]. - The company anticipates future growth driven by strategic acquisitions and market expansion initiatives[9]. - The company has completed 59 acquisitions since 2018, with a total purchase consideration exceeding $1.7 billion since January 2020, enhancing its market position[43]. - The company has expanded to 143 new locations since 2018, generating total revenue of $226.8 million in 2023, representing an 18.1% growth compared to the previous year[91]. Financial Performance and Metrics - Revenue grew from $6,698.1 million in 2021 to $8,826.2 million in 2023, primarily from organic growth and strategic acquisitions[24]. - Adjusted EBITDA increased from $493.1 million in 2021 to $537.8 million in 2023[24]. - Pharmacy Solutions segment revenue totaled $6,522.5 million in 2023, accounting for 73.9% of total revenue[23]. - Provider Services segment revenue totaled $2,303.7 million in 2023, accounting for 26.1% of total revenue[23]. - The company has a substantial indebtedness of approximately $3.4 billion as of December 31, 2023[13]. Patient Care and Satisfaction - The Medication Possession Ratio (MPR) is a key performance metric, with a compliance threshold set at over 80% under contracts with payors[7]. - The Net Promoter Score (NPS) is utilized to gauge patient satisfaction, with scores above 50 considered "excellent" and above 80 classified as "world class"[7]. - The overall patient satisfaction is measured through various quality metrics, reflecting the company's commitment to high standards of care[7]. - The company achieved 99.99% order accuracy and 98.20% order completeness across its pharmacies[27]. - The company has achieved a 98% satisfaction score for outpatient rehab services and 95% for home infusion patients, indicating strong customer satisfaction across its services[30]. Market Trends and Opportunities - The market for Senior and Specialty patients is over $1.0 trillion, with these patients accounting for 40% of total healthcare spending[17]. - The company is positioned for long-term growth due to its complementary pharmacy and provider services that address multiple patient needs[19]. - The total addressable market opportunity is estimated to be over $1.0 trillion, with complex populations driving the highest growth within healthcare services[85]. - Home health patient expenditures are expected to increase by approximately 7% over the next five years, while hospice patient expenditures are projected to grow by 8%[48]. - The U.S. population aged 65 and older is expected to grow by an average of 3% annually over the next five years, driving demand for the company's services[47]. Regulatory and Compliance Risks - The company is subject to various risks, including governmental inquiries and regulatory actions that could adversely affect operating results[13]. - The company must adhere to HIPAA regulations, which govern the security and confidentiality of personal health information, with potential penalties for violations[180]. - The company is subject to audits by federal, state, and commercial payors, which could lead to substantial repayments if overpayments are identified[176]. - The company faces increased competition due to local competitors developing strategic relationships with payors and referral sources, which may limit the ability to retain referrals and payors in local markets[202]. - The company is required to establish new policies to comply with proposed amendments to HIPAA regulations affecting the handling of personal health information[1]. Employee Relations and Workforce - The company has increased employee compensation by 50% over the last three years to attract and retain talent[145]. - As of December 31, 2023, the company employed over 35,000 full-time equivalent employees, with approximately 6,500 represented by labor unions[148]. - The company actively supports veterans and their families through various programs, including partnerships with Soldier's Angels[147]. - The company is committed to creating higher-paying jobs through career pathways and talent pipeline programs[145]. - The company has received numerous awards for its human resources and employee relations practices[148]. Technology and Innovation - Investments in technology and information systems have been made to improve overall efficiency and workflow, including new EMR and ERP systems[77]. - The company has developed innovative technology solutions that allow employees to access their pay daily[145]. - Significant investments have been made into technology resources and systems to drive continuous improvement and reflect leading infrastructure standards[141]. - The company maintains a 99.9% generic efficiency rate, saving an average of $58 per therapeutic interchange[63]. - The company’s integrated care management model is supported by home-based primary care, transitional care management, and clinical care coordination[105]. Strategic Partnerships and Relationships - The company currently has 360 formal strategic partnerships with health systems, including approximately 20 home health partnerships, enhancing its service delivery network[35]. - The company has a diversified payor mix, with 50% of revenues from Medicare, 23% from Medicaid, and 21% from commercial sources, positioning it well for evolving reimbursement models[41]. - The company has developed new relationships with healthcare stakeholders, focusing on patient experiences and quality, including ACOs and MCOs that contract with CMS and state programs[120]. - Maintaining strong relationships with pharmaceutical manufacturers, wholesalers, and distributors is crucial for the company's business and financial condition[205]. - The company provides services to pharmaceutical manufacturers for patient access to specialty pharmaceuticals, and failure to maintain optimal service levels could result in loss of access to products[205].