Brightspring Health Services, Inc.(BTSGU) - 2024 Q2 - Quarterly Report

Revenue Growth - Revenue for Q2 2024 increased by $563.5 million, or 26.0$2.7 billion compared to Q2 2023[70] - Pharmacy Solutions segment revenue grew by $517.7 million, or 32.4$2.1 billion, while Provider Services segment revenue increased by $45.8 million, or 8.0$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$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$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$269.6 million, an increase of $4.9 million or 1.9$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$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$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]