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]
Brightspring Health Services, Inc.(BTSGU) - 2024 Q3 - Quarterly Report