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What changed in Option Care Health, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Option Care Health, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+157 added−149 removedSource: 10-K (2025-02-26) vs 10-K (2024-02-22)

Top changes in Option Care Health, Inc.'s 2024 10-K

157 paragraphs added · 149 removed · 132 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

23 edited+0 added−0 removed77 unchanged
Biggest changeIntellectual Property The Company owns a variety of trademarks, licenses, and service marks, including but not limited to: “Option Care Health”, “Option Care”, “Critical Care Systems”, “Clinical Specialties”, “BioScrip”, “BioScrip Infusion Services”, “BioScrip Nursing Services”, “BioScrip Pharmacy Services”, “CarePoint Partners”, “HomeChoice Partners”, “InfuScience”, “InfusionCare”, “Infusion Partners”, “Infusion Solutions”, “New England Home Therapies”, “Option Health”, “Professional Home Care Services”, “Wilcox Home Infusion”, “Home Solutions”, as well as several others. 7 Table of Contents Suppliers The Company purchases pharmaceuticals and medical supplies directly through pharmaceutical manufacturers, authorized distributors and group purchasing organizations.
Biggest changeIntellectual Property Option Care Health and its subsidiaries own a variety of trademarks, licenses, and service marks, including but not limited to: “Option Care Health”, “Option Care”, “Critical Care Systems”, “Clinical Specialties”, “BioScrip”, “BioScrip Infusion Services”, “HomeChoice Partners”, “InfuScience”, “InfusionCare”, “Infusion Partners”, “Infusion Solutions”, “New England Home Therapies”, “Professional Home Care Services”, “Wilcox Home Infusion”, “Home Solutions”, Home Solutions Infusion Therapy”, “Naven Health”, “Naven Connect”, “Restore+ by Option Care Health”, “IG Complete+”, “Care Nav+ by Option Care Health”, “BioCure”, “DP Diabetes in Pregnancy Program”, “HP Hypertension in Pregnancy Program”, “NV Nausea and Vomiting Hyperemesis Program”, “PM Prematurity Program”, “Factor Ape”, as well as several others. 7 Table of Contents Suppliers The Company purchases pharmaceuticals and medical supplies directly through pharmaceutical manufacturers, authorized distributors and group purchasing organizations.
The Company provides an array of treatments to manage the progression of neurological disorders such as Duchenne Muscular Dystrophy, Multiple Sclerosis, and other neurological disorders. • Bleeding Disorders Infusion. As a provider of home infusion therapy for hemophilia and von Willebrand disease, the Company streamlines the administrative burdens associated with infusion therapies for bleeding disorders.
The Company provides an array of treatments to manage the progression of neurological disorders such as Duchenne Muscular Dystrophy, Multiple Sclerosis, Alzheimer’s Disease, and other neurological disorders. • Bleeding Disorders Infusion. As a provider of home infusion therapy for hemophilia and von Willebrand disease, the Company streamlines the administrative burdens associated with infusion therapies for bleeding disorders.
The Company also provides nursing services to support the above therapies, comprised of its nursing team of approximately 2,800 employees, and through its network of sub-contracted nursing agencies. 6 Table of Contents Sales and Marketing The Company’s sales and marketing efforts focus on three primary objectives: (1) building new relationships and expanding existing contracts with managed care organizations; (2) establishing, maintaining and strengthening relationships with local and regional patient referral sources; and (3) maintaining existing and developing new relationships with pharmaceutical manufacturers to gain distribution access as they release new products.
The Company also provides nursing services to support the above therapies, comprised of its nursing team of approximately 2,900 employees, and through its network of sub-contracted nursing agencies. 6 Table of Contents Sales and Marketing The Company’s sales and marketing efforts focus on three primary objectives: (1) building new relationships and expanding existing contracts with managed care organizations; (2) establishing, maintaining and strengthening relationships with local and regional patient referral sources; and (3) maintaining existing and developing new relationships with pharmaceutical manufacturers to gain distribution access as they release new products.
Item 1. Business Overview Option Care Health, Inc. (“Option Care Health”, “we”, “us”, “our”, or the “Company”) is the largest independent provider of home and alternate site infusion services through its national network of 177 locations in 43 states. Option Care Health draws on over 40 years of clinical care experience to offer patient-centered, cost-effective infusion therapy.
Item 1. Business Overview Option Care Health, Inc. (“Option Care Health”, “we”, “us”, “our”, or the “Company”) is the largest independent provider of home and alternate site infusion services through its national network of 185 locations in 43 states. Option Care Health draws on over 40 years of clinical care experience to offer patient-centered, cost-effective infusion therapy.
The Company’s competitors within the home infusion market include Optum Infusion Pharmacy (a unit of the United Healthcare Insurance Company), Coram CVS/specialty infusion services (a division of CVS Health), Amerita Specialty Pharmacy (a division of BrightSpring Health), KabaFusion, Soleo Health and many smaller regional and local home infusion companies, ambulatory infusion centers, or specialty pharmacies including Accredo, CVS Caremark, Optum Rx, and Orsini.
The Company’s competitors within the home infusion market include Optum Infusion Pharmacy (a unit of the United Healthcare Insurance Company), Coram CVS/specialty infusion services (a division of CVS Health), Amerita Specialty Pharmacy (a division of BrightSpring Health), KabaFusion, Soleo Health, Vital Care and many smaller regional and local home infusion companies, ambulatory infusion centers, or specialty pharmacies including Accredo, CVS Caremark, Optum Rx, and Orsini.
No other single payer represented more than 10% of its revenue. The Company also provides services that are directly reimbursable through government healthcare programs such as Medicare and state Medicaid programs. For the year ended December 31, 2023, approximately 12% of the Company’s revenue was reimbursable through direct governmental programs, such as Medicare and Medicaid.
No other single payer represented more than 10% of its revenue. The Company also provides services that are directly reimbursable through government healthcare programs such as Medicare and state Medicaid programs. For the year ended December 31, 2024, approximately 12% of the Company’s revenue was reimbursable through direct governmental programs, such as Medicare and Medicaid.
As a national pharmacy provider with broad coverage and clinical expertise of its 93 full-service pharmacies, the Company provides pharmaceutical manufacturers with an extensive distribution channel for its existing and prospective pharmaceutical products.
As a national pharmacy provider with broad coverage and clinical expertise of its 92 full-service pharmacies, the Company provides pharmaceutical manufacturers with an extensive distribution channel for its existing and prospective pharmaceutical products.
This cross-utility enables the Company to market its services to numerous sources of patient referrals, including physicians, hospital discharge planners, hospital personnel, Health Maintenance Organizations (“HMOs”) and Preferred Provider Organizations (“PPOs”).
This cross-utilization enables the Company to market its services to numerous sources of patient referrals, including physicians, hospital discharge planners, hospital personnel, Health Maintenance Organizations (“HMOs”) and Preferred Provider Organizations (“PPOs”).
The Company provides a holistic range of resources and programs to our team members to address each person’s unique needs, including physical, mental and financial health and well-being with programs to support healthy lifestyles, specialized programs to help manage chronic conditions, behavioral health education, coaching, and counseling, and financial wellness resources. • Diversity, Equity, and Inclusion.
The Company provides a holistic range of resources and programs to our team members to address each person’s unique needs, including physical, mental and financial health and well-being with programs to support healthy lifestyles, specialized programs to help manage chronic conditions, behavioral health education, coaching, and counseling, and financial wellness resources. • Inclusion and Belonging.
Option Care Health’s infusion services include the clinical management of infusion therapy, nursing support and care coordination. Option Care Health’s multidisciplinary team of more than 4,500 clinicians, including pharmacists, pharmacy technicians, nurses and dietitians, are able to provide infusion service coverage for nearly all patients across the United States (“U.S.”) needing treatment for complex and chronic medical conditions.
Option Care Health’s infusion services include the clinical management of infusion therapy, nursing support and care coordination. Option Care Health’s multidisciplinary team of more than 5,000 clinicians, including pharmacists, pharmacy technicians, nurses and dietitians, are able to provide infusion service coverage for nearly all patients across the United States (“U.S.”) needing treatment for complex and chronic medical conditions.
The Company offers comprehensive services that align with specific healthcare provider needs and has demonstrated success in improving outcomes across a broad range of therapies through improved clinical-reported patient adherence rates and decreased rates of unplanned hospital re-admissions.
The Company offers comprehensive services that align with specific healthcare provider needs and has demonstrated success in improving outcomes across a broad range of therapies through improved clinical-reported patient adherence rates and decreased rates of unplanned hospital readmissions.
Nursing services are typically billed separately, while other patient support services, such as pharmacy compounding service, delivery service and ancillary medical supplies are reimbursed either separately or on a per diem basis, as applicable. The Company’s largest payer represented approximately 14% of its revenue for the year ended December 31, 2023.
Nursing services are typically billed separately, while other patient support services, such as pharmacy compounding service, delivery service and ancillary medical supplies are reimbursed either separately or on a per diem basis, as applicable. The Company’s largest payer represented approximately 15% of its revenue for the year ended December 31, 2024.
The Company provides a broad therapy portfolio through its network of 93 full-service pharmacies and 84 stand-alone ambulatory infusion suites.
The Company provides a broad therapy portfolio through its network of 92 full-service pharmacies and 93 stand-alone ambulatory infusion suites.
One of the most prominent of these laws is the federal False Claims Act, which may be enforced by the federal government directly or by a private plaintiff by filing a qui tam lawsuit on the government’s behalf.
One of the most prominent of these laws is the federal False Claims Act, which may be enforced by the federal government directly or by a private plaintiff by filing a whistleblower lawsuit on the government’s behalf.
A number of states, including states in which the Company operates, have adopted their own false claims statutes as well as statutes that allow individuals to bring qui tam actions.
A number of states, including states in which the Company operates, have adopted their own false claims statutes as well as statutes that allow individuals to bring whistleblower actions.
For the year ended December 31, 2023, approximately 72% of the Company’s pharmaceutical and medical supply purchases were from four vendors. Although there are a limited number of suppliers, the Company believes that other vendors could provide similar products on comparable terms.
For the year ended December 31, 2024, approximately 58% of the Company’s pharmaceutical and medical supply purchases were from three vendors. Although there are a limited number of suppliers, the Company believes that other vendors could provide similar products on comparable terms.
As of December 31, 2023, the Company employed 5,809 persons on a full-time basis and 1,993 persons on a part-time basis. The majority of its part-time employees are clinicians due to the nature and timing of the services the Company provides. Attracting and retaining a highly skilled and diverse team to deliver extraordinary care is a top priority.
As of December 31, 2024, the Company employed 6,015 persons on a full-time basis and 2,073 persons on a part-time basis. The majority of its part-time employees are clinicians due to the nature and timing of the services the Company provides. Attracting and retaining a highly skilled and diverse team to deliver extraordinary care is a top priority.
The Company’s ability to attract and retain personnel depends on several factors, including the ability to provide them with engaging assignments and competitive salaries and benefits. The Company is committed to empowering our people through specific initiatives in talent development, employee engagement, health and well-being, and DE&I.
The Company’s ability to attract and retain personnel depends on several factors, including the ability to provide them with engaging assignments and competitive salaries and benefits. The Company is committed to fostering a workplace where team members feel valued and supported through initiatives focused on professional development, employee engagement, and overall well-being.
The Company offers a range of other infusion therapies to treat a variety of conditions, including pain management, chemotherapy and respiratory medication.
The Company administers home infusion services to treat heart failure, either in anticipation of cardiac transplant or to provide palliation of heart failure symptoms. • Other. The Company offers a range of other infusion therapies to treat a variety of conditions, including pain management, chemotherapy and respiratory medication.
The Company works with medical specialists across the country to offer access to all approved factor products, a full range of therapies, and dedicated support services. • Women’s Health. The Company offers therapies that women need to survive and thrive through high-risk pregnancies.
The Company works with medical specialists across the country to offer access to all approved factor products, a full range of therapies, and dedicated support services. • Naven Health. The Company offers a nationwide home infusion nursing network and clinical platform. Naven Health focuses on delivering highly specialized, infusion care. • Women’s Health.
The Company leverages meaningful metrics to evaluate the effectiveness of our DE&I initiatives, including our efforts to eliminate bias in decision-making and build a diverse pipeline of leaders. 11 Table of Contents The Company relies on its ability to attract and retain nursing staff, pharmacists and other professionals who possess the skills, experience and licenses necessary to meet the requirements of their job responsibilities.
We assess the effectiveness of our inclusion efforts through qualitative and quantitative insights, ensuring that our workplace supports the development and success of all team members. 11 Table of Contents The Company relies on its ability to attract and retain nursing staff, pharmacists and other professionals who possess the skills, experience and licenses necessary to meet the requirements of their job responsibilities.
Personalized programs in prematurity, nausea and vomiting hyperemesis, diabetes in pregnancy, and hypertension help meet the needs of each mother. • Heart Failure. The Company administers home infusion services to treat heart failure, either in anticipation of cardiac transplant or to provide palliation of heart failure symptoms. • Other.
The Company offers therapies that women need to survive and thrive through high-risk pregnancies. Personalized programs in prematurity, nausea and vomiting hyperemesis, diabetes in pregnancy, and hypertension help meet the needs of each mother. • Heart Failure.
The Company believes that diversity, equity and inclusion (“DE&I”) makes us stronger, more innovative and better able to serve our patients. This requires people with different talents, backgrounds and perspectives, reflective of the communities we serve. The Company strives to develop a culture where everyone feels a sense of belonging and empowerment to share their experiences and ideas.
The Company believes that a workforce with a variety of backgrounds, experiences, and viewpoints makes us stronger, more innovative and better able to serve our patients. The Company strives to foster an inclusive workplace where team members feel valued, respected, and empowered to contribute their unique perspectives.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+9 added−6 removed128 unchanged
Biggest changeA shortage of qualified registered nursing staff, pharmacists and other professionals could adversely affect our ability to attract, train and retain qualified personnel and could increase operating costs.
Biggest changeIf tariffs, trade restrictions or trade barriers are expanded, increased or interpreted by a court or governmental agency to apply to more of our products, then our exposure to future taxes and duties on such imported products and components could be significant and could have a material effect on our financial results. 14 Table of Contents A shortage of qualified registered nursing staff, pharmacists and other professionals could adversely affect our ability to attract, train and retain qualified personnel and could increase operating costs.
The current economic environment has increased the budgetary pressures on many states, and these budgetary pressures have resulted, and likely will continue to result, in decreased spending, or decreased spending growth, for Medicaid programs and the Children’s Health Insurance Program in many states.
The current economic environment has increased the budgetary pressures on many states, and these budgetary pressures have resulted, and will likely continue to result, in decreased spending, or decreased spending growth, for Medicaid programs and the Children’s Health Insurance Program in many states.
We may not be able to successfully fully integrate the operations, personnel, services or products that we have acquired or may acquire in the future. Strategic investments may also entail some of the risks described above. If these investments are unsuccessful, we may need to incur charges against earnings. We may also pursue a number of strategic relationships.
We may not be able to successfully integrate the operations, personnel, services or products that we have acquired or may acquire in the future. Strategic investments may also entail some of the risks described above. If these investments are unsuccessful, we may need to incur charges against earnings. We may also pursue a number of strategic relationships.
We operate in complex, highly regulated environments and could be materially and adversely affected by changes to applicable legal requirements including the related interpretations and enforcement practices, new legal requirements and/or any failure to comply with applicable regulations.
We operate in complex, highly regulated environments and could be materially and adversely affected by changes to applicable legal requirements including related interpretations and enforcement practices, new legal requirements and/or any failure to comply with applicable regulations.
The repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value. 23 Table of Contents General Risk Factors Pending and future litigation could subject us to significant monetary damages and/or require us to change our business practices. We employ pharmacists, dieticians, nurses and other healthcare professionals.
The repurchase program may be suspended or terminated at any time and, even if fully implemented, may not enhance long-term stockholder value. 23 Table of Contents General Risk Factors Pending and future litigation could subject us to significant monetary damages and/or require us to change our business practices. We employ pharmacists, dietitians, nurses and other healthcare professionals.
For the year ended December 31, 2023, 88% of our revenue came from MCOs and other non-governmental payers, including Medicare Advantage plans, Managed Medicaid plans, pharmacy benefit managers (“PBMs”), and self-pay patients. Many payers seek to limit the number of providers that supply pharmaceuticals to their enrollees in order to build volume that justifies their discounted pricing.
For the year ended December 31, 2024, 88% of our revenue came from MCOs and other non-governmental payers, including Medicare Advantage plans, Managed Medicaid plans, pharmacy benefit managers (“PBMs”), and self-pay patients. Many payers seek to limit the number of providers that supply pharmaceuticals to their enrollees in order to build volume that justifies their discounted pricing.
In such an event, we may not have sufficient assets to repay all of our indebtedness. 21 Table of Contents Risks Relating to Our Common Stock Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if beneficial to our stockholders.
In such an event, we may not have sufficient assets to repay all of our indebtedness. 21 Table of Contents Risks Relating to Our Common Stock Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management, even if it is beneficial to our stockholders.
In addition, a security breach of our information technology systems could damage our reputation, subject us to liability claims or regulatory penalties for compromised personal information and could have a material adverse effect on our business, financial condition, and results of operations. 25 Table of Contents Our business is dependent on the services provided by third-party information technology vendors.
In addition, a security breach of our information technology systems could damage our reputation, subject us to liability claims or regulatory penalties for compromised personal information and could have a materially adverse effect on our business, financial condition, and results of operations. 25 Table of Contents Our business is dependent on the services provided by third-party information technology vendors.
If the fair value is more likely than not less than the carrying value, a quantitative assessment would be performed. When evaluating goodwill for potential impairment on a quantitative basis, we compare the fair value of our reporting units to their respective carrying amounts. We estimate the fair value of our reporting units using the income approach.
If the fair value is more likely than not less than the carrying value, a quantitative assessment will be performed. When evaluating goodwill for potential impairment on a quantitative basis, we compare the fair value of our reporting units to their respective carrying amounts. We estimate the fair value of our reporting units using the income approach.
Our acquisitions resulted in significant goodwill reported on our financial statements. Goodwill results when the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired. We may not realize the full value of this goodwill.
Our acquisitions resulted in significant goodwill reported on our financial statements. Goodwill results when the purchase price exceeds the fair value of the identifiable tangible and intangible assets and liabilities acquired. We may not realize the full value of this goodwill.
Our growth and profitability depends, in part, on our ability to establish and maintain close working relationships with these patient referral sources and to increase awareness and acceptance of the benefits of home infusion by our referral sources and their patients.
Our growth and profitability depend, in part, on our ability to establish and maintain close working relationships with these patient referral sources and to increase awareness and acceptance of the benefits of home infusion by our referral sources and their patients.
The sustained or continued rise of inflation may adversely impact our business operations, financial condition and results of operations. Acquisitions, strategic investments and strategic relationships involve certain risks. We may pursue acquisitions of strategic investments in, or strategic relationships with businesses and technologies.
The rise of inflation may adversely impact our business operations, financial condition and results of operations. Acquisitions, strategic investments and strategic relationships involve certain risks. We may pursue acquisitions of strategic investments in, or strategic relationships with businesses and technologies.
Because of the significance of our goodwill, any future impairment could result in material non-cash charges to our results of operations, which could have an adverse effect on our financial condition and results of operations. 15 Table of Contents A significant change in, or noncompliance with, governmental regulations and other legal requirements could have a material adverse effect on our reputation and profitability.
Because of the significance of our goodwill, any future impairment could result in material non-cash charges to our results of operations, which could have an adverse effect on our financial condition and results of operations. A significant change in, or noncompliance with, governmental regulations and other legal requirements could have a material adverse effect on our reputation and profitability.
These results could have a material adverse effect on our business and financial condition, results of operations and cash flows. If any of our pharmacies fail to comply with the conditions of participation in the Medicare program, that pharmacy could be terminated from Medicare, which could adversely affect our consolidated financial statements.
These results could have a material adverse effect on our business and financial condition, results of operations and cash flows. 18 Table of Contents If any of our pharmacies fail to comply with the conditions of participation in the Medicare program, that pharmacy could be terminated from Medicare, which could adversely affect our consolidated financial statements.
Our failure to anticipate or appropriately adapt to changes in the industry could negatively impact our competitive position and adversely affect our business and results of operations. Changes in future business conditions could cause business investments and/or recorded goodwill to become impaired, and our financial condition and results of operations could suffer if there is an impairment of goodwill.
Our failure to anticipate or appropriately adapt to changes in the industry could negatively impact our competitive position and adversely affect our business and results of operations. 15 Table of Contents Changes in future business conditions could cause business investments and/or recorded goodwill to become impaired, and our financial condition and results of operations could suffer if there is an impairment of goodwill.
These requirements included a 10-year timeline culminating in the building of "an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.” The law’s track and trace requirements are applicable to manufacturers, wholesalers, repackagers and dispensers (e.g., pharmacies) of prescription drugs.
These requirements included a 10-year timeline culminating in the building of "an electronic, interoperable system to identify and trace certain prescription drugs as they are distributed in the United States.” The law’s track and trace requirements are applicable to manufacturers, wholesalers, re-packagers and dispensers (e.g., pharmacies) of prescription drugs.
For example, a prescription drug dispensing error could result in a patient receiving the wrong or incorrect amount of medication, leading to personal injury or death. Our business and consolidated financial statements could suffer if we pay damages or defense costs in connection with a claim that is outside the scope of any applicable contractual indemnity or insurance coverage.
For example, a prescription drug dispensing error could result in a patient receiving the wrong amount of medication, which could lead to personal injury or death. Our business and consolidated financial statements could suffer if we pay damages or defense costs in connection with a claim that is outside the scope of any applicable contractual indemnity or insurance coverage.
These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for shareholders or potential acquirers to obtain control of our Board of Directors or initiate actions that are opposed by our then-current Board, including delay or impede a merger, tender offer or proxy contest involving the Company.
These and other provisions in our certificate of incorporation, bylaws and Delaware law could make it more difficult for shareholders or potential acquirers to obtain control of our Board of Directors or initiate actions that are opposed by our then-current Board, including delaying or impeding a merger, tender offer or proxy contest involving the Company.
Should state regulators or the FDA disagree, or should our business practices change to qualify us as an outsourcing facility, there is risk of regulatory action and/or increased resources required to comply with federal requirements imposed pursuant to the DQSA on outsourcing facilities that could significantly increase our costs or otherwise affect our results of operations.
Should state regulators or the FDA disagree, or should our business practices change to qualify us as an outsourcing facility, there is risk of regulatory action and/or increased resources required to comply with federal requirements imposed pursuant to the Drug Quality & Safety Act (“DQSA”) on outsourcing facilities that could significantly increase our costs or otherwise affect our results of operations.
Our insurance coverage also includes property liability, cyber liability, clinical trials liability, crime liability, auto liability, workers’ compensation, employers’ liability, executive liability policies (employment practices liability, fiduciary liability, directors’ and officers’ liability), umbrella/excess liability and general liability with varying limits.
Our insurance coverage also includes property and business interruption liability, cyber liability, clinical trials liability, crime liability, auto liability, intercompany transit liability, workers’ compensation, employers’ liability, executive liability policies (employment practices liability, fiduciary liability, directors’ and officers’ liability), umbrella/excess liability and general liability with varying limits.
For the year ended December 31, 2023, approximately 72% of our pharmaceutical and medical supply purchases were from four vendors. Most of the pharmaceuticals that we purchase are available from multiple sources, and we believe they are available in sufficient quantities to meet our needs and the needs of our patients.
For the year ended December 31, 2024, approximately 58% of our pharmaceutical and medical supply purchases were from three vendors. Most of the pharmaceuticals that we purchase are available from multiple sources, and we believe they are available in sufficient quantities to meet our needs and the needs of our patients.
Any termination of one or more of our pharmacies from the Medicare program for failure to satisfy the Medicare supplier standards could adversely affect our consolidated financial statements. 18 Table of Contents We cannot predict the impact of changing requirements on compounding pharmacies. Compounding pharmacies are closely monitored by federal and state governmental agencies.
Any termination of one or more of our pharmacies from the Medicare program for failure to satisfy the Medicare supplier standards could adversely affect our consolidated financial statements. We cannot predict the impact of changing requirements on compounding pharmacies. The operation of compounding pharmacies are regulated by federal and state governmental agencies.
We cannot guarantee that our stock repurchase program will be fully implemented or that it will enhance long-term stockholder value. In February 2023, the Board of Directors approved a new stock repurchase program authorizing the repurchase of up to $250 million of our common stock.
We cannot guarantee that our stock repurchase program will be fully implemented or that it will enhance long-term stockholder value. In January 2025, the Board of Directors approved a new stock repurchase program authorizing the repurchase of up to $500 million of our common stock.
As of December 31, 2023, we had $1,088.0 million of outstanding borrowings, including (i) $588.0 million under our First Lien Term Loan (as defined herein) and (ii) $500.0 million under our 4.375% Senior Unsecured Notes due 2029 (the “Senior Notes”).
As of December 31, 2024, we had $1,131.6 million of outstanding borrowings, including (i) $631.6 million under our First Lien Term Loan (as defined herein) and (ii) $500.0 million under our 4.375% Senior Unsecured Notes due 2029 (the “Senior Notes”).
We may not be successful in any of these areas. 14 Table of Contents In addition, where labor shortages arise in markets in which we operate, we have faced higher costs to attract personnel and we have had to provide them with more attractive benefit packages than originally anticipated or are being paid in other markets where such shortages do not exist at the time.
In addition, where labor shortages arise in markets in which we operate, we have faced higher costs to attract personnel and we have had to provide them with more attractive benefit packages than originally anticipated or are being paid in other markets where such shortages do not exist at the time.
As a result, we are often required to compete for personnel with other healthcare systems and our competitors. Our ability to attract, train and retain personnel depends on several factors, including our ability to provide them with engaging assignments and competitive salaries and benefits.
As a result, we are often required to compete for personnel with other healthcare systems and our competitors. Our ability to attract, train and retain personnel depends on several factors, including our ability to provide them with engaging assignments and competitive salaries and benefits. We may not be successful in any of these areas.
Current or future healthcare reform and deficit reduction efforts, changes in other laws or regulations affecting government healthcare programs, changes in the administration of government healthcare programs and changes in payment rates by Third-Party Payers could have a material, adverse effect on our financial position and results of operations.
Current or future healthcare reform and deficit reduction efforts, changes in other laws or regulations affecting government healthcare programs, changes in the administration of government healthcare programs and changes in payment rates by Third-Party Payers could have a material, adverse effect on our financial position and results of operations. 17 Table of Contents Delays in reimbursement may adversely affect our liquidity, cash flows and results of operations.
The Company relies on its information systems to provide security for processing, transmitting, and storing confidential information about patients, customers, and personnel, such as names, addresses and other individually identifiable information protected by HIPAA and other privacy laws. Cyber incidents can result from deliberate attacks or unintentional events.
The Company relies on its information systems to provide security for processing, transmitting, and storing confidential information about patients, customers, and personnel, such as names, addresses and other individually identifiable information protected by HIPAA and other privacy laws.
The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and changing requirements. Compliance with changes in privacy and information security laws and with rapidly evolving industry standards may result in the Company incurring significant expense due to increased investment in technology and the development of new operational processes.
Compliance with changes in privacy and information security laws and with rapidly evolving industry standards may result in the Company incurring significant expense due to increased investment in technology and the development of new operational processes.
After a major weather event, availability of electricity, clean water and transportation can impact our ability to provide service in patients’ homes. Similarly, such events could impact key suppliers or vendors, disrupting the services or materials they provide to us.
For example, in anticipation of major weather events, patients with impaired health may be moved to alternate sites. After a major weather event, availability of electricity, clean water and transportation can impact our ability to provide service in patients’ homes. Additionally, such events could impact key suppliers or vendors, disrupting the services or materials they provide to us.
Any changes to these relationships, including, but not limited to, the loss of a manufacturer relationship, drug shortages or changes in pricing, could have an adverse effect on our business and financial results. Some pharmaceutical manufacturers attempt to limit the number of preferred distributors that may market certain of their pharmaceutical products.
Any changes to these relationships, including, but not limited to, the loss of a manufacturer relationship, drug shortages or changes in pricing, could have an adverse effect on our business and financial results.
Pressures relating to downturns in the economy could adversely affect our business and consolidated financial statements. Medicare and other federal and state payers account for a portion of our revenues.
Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business. Pressures relating to downturns in the economy could adversely affect our business and consolidated financial statements. Medicare, and other federal and state payers, account for a portion of our revenues.
As a result of our participation in the Medicare and Medicaid programs, we are subject to various governmental reviews and audits to verify our compliance with these programs and applicable laws and regulations.
We face periodic reviews and billing audits by governmental and private payers, which could result in adverse findings that may negatively impact our business. As a result of our participation in the Medicare and Medicaid programs, we are subject to various governmental reviews and audits to verify our compliance with these programs and applicable laws and regulations.
We cannot provide assurance that we will be selected and retained as a preferred distributor or that we can remain a preferred distributor to market these products.
Some pharmaceutical manufacturers attempt to limit the number of preferred distributors that may market certain of their pharmaceutical products. We cannot provide assurance that we will be selected and retained as a preferred distributor or that we can remain a preferred distributor to market these products.
The Company is currently materially compliant with the DSCSA provisions currently in effect. The Company also expects to be materially compliant with the additional provisions of DSCSA, which requires the electronic receipt and exchange of transaction information (with specific product identifiers for each package) and transaction statements, by the November 2023 effective date.
The Company is currently materially compliant with the DSCSA provisions currently in effect. As an eligible trading partner, the Company believes it is materially compliant with the additional provisions of DSCSA, which requires the electronic receipt and exchange of transaction information (with specific product identifiers for each package) and transaction statements.
Changes in laws, regulations and policies and the related interpretations and enforcement practices may alter the landscape in which we do business and may significantly affect our cost of doing business, the impact of which generally cannot be predicted.
In addition, we could have significant exposure if we are found to have infringed another party’s intellectual property rights. 16 Table of Contents Changes in laws, regulations and policies and the related interpretations and enforcement practices may alter the landscape in which we do business and may significantly affect our cost of doing business, the impact of which generally cannot be predicted.
While management believes that our controls and processes are satisfactory, there can be no assurance that collections of accounts receivable will continue at historical rates. The risks associated with Third-Party Payers and the inability to collect outstanding accounts receivable could have a material adverse effect on our liquidity, cash flows and results of operations.
The risks associated with third-party payers and the inability to collect outstanding accounts receivable could have a material adverse effect on our liquidity, cash flows and results of operations.
In addition, we provide our employees with extensive training on best ways to protect our patient information, including, among others, avoiding phishing emails and sharing access to sensitive information on a need-only basis. However, these safeguards do not ensure that a significant cyber-attack could not occur.
We maintain our information technology systems with safeguards against cyber-attacks including passive intrusion protection, firewalls and virus detection software. In addition, we provide our employees with extensive training on best ways to protect our patient information, including, among others, avoiding phishing emails and sharing access to sensitive information on a need-only basis.
MCOs have continued to consolidate to enhance their ability to influence the delivery of healthcare services and to exert pressure to control healthcare costs.
MCOs have continued to consolidate to enhance their ability to influence the delivery of healthcare services and to exert pressure to control healthcare costs. A rapid concentration of revenue derived from individual managed care payers could harm our business.
In December 2023, the Board of Directors approved an increase to its stock repurchase program authorization from $250 million to $500 million. The repurchase program does not have an expiration date, and we are not obligated to repurchase a specified number or dollar value of shares, on any particular timetable or at all.
The repurchase program does not have an expiration date, and we are not obligated to repurchase a specified number or dollar value of shares, on any particular timetable or at all. There can be no assurance that we will repurchase stock at favorable prices.
Material violations of any such laws could have a material adverse effect on our patient base and revenue. In addition, we could have significant exposure if we are found to have infringed another party’s intellectual property rights.
Material violations of any such laws could have a material adverse effect on our patient base and revenue.
We do not believe that our current compounding practices qualify us as an outsourcing facility and, therefore, we continue to operate consistently with USP 797 standards and applicable state pharmacy laws.
We do not believe that our current compounding practices qualify us as an outsourcing facility because we only compound pursuant to a patient-specific prescription and do so in compliance with the applicable United States Pharmacopeia, Chapter 797 (“USP 797”) standards and applicable state pharmacy laws.
Delays in reimbursement may adversely affect our liquidity, cash flows and results of operations. The reimbursement process for the services we provide is complex, resulting in delays between the time we bill for a service and receipt of payment that can be significant.
The reimbursement process for the services we provide is complex, resulting in delays between the time we bill for a service and receipt of payment that can be significant. Reimbursement and procedural issues often require us to resubmit claims multiple times and respond to multiple administrative requests before payment is remitted.
Furthermore, we cannot predict the overall impact of increased scrutiny on compounding pharmacies. 19 Table of Contents Risks Relating to Our Indebtedness Our existing indebtedness could adversely affect our business and growth prospects.
Noncompliance with these regulations could have an adverse impact on our reputation and profitability. 19 Table of Contents Risks Relating to Our Indebtedness Our existing indebtedness could adversely affect our business and growth prospects.
Adverse economic conditions could also cause employers to stop offering, or limit, healthcare coverage, or modify program designs, shifting more costs to the individual and exposing us to greater credit risk from patients or the discontinuance of therapy.
Adverse economic conditions could also cause employers to stop offering, or limit, healthcare coverage, or modify program designs, shifting more costs to the individual and exposing us to greater credit risk from patients or the discontinuance of therapy. 24 Table of Contents General levels of inflation and specific inflationary pressures may impact areas such as labor, transportation and medical supplies and may persist due to events outside of our control, for example, potential pandemic events, supply chain disruptions, and the broader macroeconomic environment.
Government programs could also slow or temporarily suspend payments, negatively impacting our cash flow and increasing our working capital needs and interest payments.
Government programs could also slow or temporarily suspend payments, negatively impacting our cash flow and increasing our working capital needs and interest payments. We have seen, and believe we will continue to see, Medicare and state Medicaid programs institute measures aimed at controlling spending growth, including reductions in reimbursement rates.
These relationships may be important to our business and growth prospects. However, we may not be able to maintain these relationships or develop new strategic alliances. Cybersecurity risks could compromise our information and expose us to liability, which may harm our ability to operate effectively and may cause harm to our business and reputation.
These relationships may be important to our business and growth prospects. However, we may not be able to maintain these relationships or develop new strategic alliances. Our business depends on our information systems. A cyber-attack, security breach or our inability to effectively integrate, manage and keep our information systems secure and operational could disrupt our operations.
We have seen, and believe we will continue to see, Medicare and state Medicaid programs institute measures aimed at controlling spending growth, including reductions in reimbursement rates. 24 Table of Contents Higher unemployment rates and significant employment layoffs and downsizings may lead to lower numbers of patients enrolled in employer-provided plans.
Higher unemployment rates and significant employment layoffs and downsizings may lead to lower numbers of patients enrolled in employer-provided plans.
In addition, from time to time, CMS revises the reimbursement systems used to reimburse healthcare providers, which may result in reduced Medicare payments. 16 Table of Contents For the year ended December 31, 2023, 12% of our revenue was derived from reimbursement by direct federal and state programs such as Medicare and Medicaid.
The direct and indirect impact IRA-mandated price negotiations and future CMS determinations is expected to negatively impact our results of operations. For the year ended December 31, 2024, 12% of our revenue was derived from reimbursement by direct federal and state programs such as Medicare and Medicaid.
We operate in a network of prescribers, providers, patients and facilities that can be negatively impacted by local weather disturbances and other force majeure events. For example, in anticipation of major weather events, patients with impaired health may be moved to alternate sites.
Acts of God, such as major weather disturbances, natural disasters, or other force majeure events, could disrupt our operations, supply chain, and the services we provide to patient. Our business relies on a network of prescribers, providers, patients and facilities that can be negatively impacted by local weather disturbances and other force majeure events.
Reimbursement and procedural issues often require us to resubmit claims multiple times and respond to multiple administrative requests before payment is remitted. The collection of accounts receivable is challenging and requires constant focus and involvement by management and ongoing enhancements to information systems and billing center operating procedures.
The collection of accounts receivable is challenging and requires constant focus and involvement by management and ongoing enhancements to information systems and billing center operating procedures. While management believes that our controls and processes are satisfactory, there can be no assurance that collections of accounts receivable will continue at historical rates.
We believe that our compounding is performed in safe environments, and we have clinically appropriate policies and procedures in place. We only compound pursuant to a patient-specific prescription and do so in compliance with USP 797 standards. The DQSA amended the FDCA to grant the FDA additional authority to regulate and monitor the manufacturing of compounded pharmaceutical drugs .
We believe that our compounding is performed in safe environments, and we have clinically appropriate policies and procedures in place.
These regulatory measures, future DSCSA regulatory measures and the potential for increased DSCSA enforcement by the FDA could increase pharmacy costs. Noncompliance with these regulations could have an adverse impact on our reputation and profitability.
Please note that the FDA has issued an exemption from the enhanced drug distribution security requirements of section 582 of the FDCA for eligible trading partners until November 27, 2025. These regulatory measures, future DSCSA regulatory measures and the potential for increased DSCSA enforcement by the FDA could increase pharmacy costs.
We have not experienced any known attacks on our information technology systems that compromised any confidential information. We maintain our information technology systems with safeguard protections against cyber-attacks including passive intrusion protection, firewalls and virus detection software.
We may experience interruptions, delays and outages in service and availability from time to time, including infrastructure changes, human or software errors, upgrade disruptions and capacity constraints. We have not experienced any material known attacks on our information technology systems that compromised any confidential information.
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We have experienced a decrease in revenue and net income as a result of the withdrawal from the market of a drug related to the treatment of pre-term labor and the introduction of an oral alternative drug related to the treatment of ALS.
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For example, in October 2024, we received notice of a manufacturer’s intention to significantly reduce the spread at which we procure a certain therapy relative to drug reference prices beginning in early 2025, which is expected to negatively impact gross profit by approximately $60 million to $70 million dollars in 2025.
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A rapid concentration of revenue derived from individual managed care payers could harm our business. 17 Table of Contents We face periodic reviews and billing audits by governmental and private payers, which could result in adverse findings that may negatively impact our business.
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In addition, there is currently significant uncertainty with respect to trade policies, treaties, tariffs and customs duties and taxes.
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There can be no assurance that we will repurchase stock at favorable prices.
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In addition, from time to time, CMS revises the reimbursement systems used to reimburse healthcare providers, which may result in reduced Medicare payments. Most recently, the Inflation Reduction Act of 2022 (the “IRA”) granted CMS the authority to negotiate drug prices under Medicare Part D, with price controls taking effect in 2026.
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Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business. Our insurance coverage also includes fire, property damage and general liability with varying limits.
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In August 2024, CMS announced the results of its first round of drug price negotiations, which included a 66% reduction from 2023 list price for one therapy in our portfolio. The manufacturer of this therapy subsequently informed us in October 2024 of its intent to significantly reduce our procurement spread relative to drug reference prices beginning in early 2025.
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We cannot assure that the insurance we maintain will satisfy claims made against us or that insurance coverage will continue to be available to us at commercially reasonable rates, in adequate amounts or on satisfactory terms. Any claims made against us, regardless of their merit or eventual outcome, could damage our reputation and business.
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For example, in the first quarter of 2024, Change Healthcare, a subsidiary of UnitedHealth Group, experienced a cybersecurity incident that disrupted its operations, causing us to disconnect from certain Change Healthcare applications until the end of the quarter, preventing us from processing claims for services and reducing our cash flows from operations in the first quarter of 2024.
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The general levels of inflation and specific inflationary pressures that we have experienced in areas such as labor, transportation and medical supplies may continue to persist due to events outside of our control, for example, the COVID-19 pandemic and other potential pandemic events, supply chain disruptions, and the broader macro-economic environment.
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The majority of previously unprocessed claims were recognized in the second quarter of 2024. While we have substantially addressed the backlog and resumed normal billing operations as of the fourth quarter of 2024, we continue to evaluate the impact of the incident on our broader revenue cycle management processes.
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Furthermore, we cannot predict the overall impact of increased scrutiny on compounding pharmacies. The (“DQSA”) amended the Federal Drug & Cosmetic Act (“FDCA”) to grant the FDA additional authority to regulate and monitor the manufacturing of compounded pharmaceutical drugs.
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Cybersecurity risks could compromise our information and expose us to liability, which may harm our ability to operate effectively and may cause harm to our business and reputation. Cyber incidents can result from deliberate attacks or unintentional events. The regulatory environment surrounding information security and privacy is increasingly demanding, with the frequent imposition of new and changing requirements.
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However, these safeguards do not ensure that a significant cyber-attack could not occur.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us or our results of operations, cash flow or financial condition. However, the scope and impact of any future incident, or the identification of new information related to prior cybersecurity incidents, cannot be predicted. See “Item 1A.
Biggest changeOur Senior Vice President, Chief Information Security Officer (CISO) serves on the Enterprise Risk Committee that assesses our enterprise-wide risks and oversees risk mitigation activities. We have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected us or our results of operations, cash flow or financial condition.
Our CISO has over 20 years of experience in various security roles, which include managing information security, development cybersecurity strategy, and implementing cybersecurity programs. Our CISO collaborates with senior leaders and other members of our organization to identify and analyze cybersecurity risks and implement controls as appropriate and feasible to mitigate these risks.
Our CISO has over 20 years of experience in various security roles, which include managing information security, developing cybersecurity strategy, and implementing cybersecurity programs. Our CISO collaborates with senior leaders and other members of our organization to identify and analyze cybersecurity risks and implement controls as appropriate and feasible to mitigate these risks.
Item 1C. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity framework designed to evaluate, identify and manage risks stemming from threats to the security of our information, systems and network using a risk-based approach.
Item 1C. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity framework designed to identify, detect, protect, respond to and recover from risks stemming from threats to the security of our information, systems and network using a governance-led risk-based approach.
Our overarching approach to cybersecurity risk management centers on governance, people, processes, and technology. We provide security awareness training to help employees understand their information protection and cybersecurity responsibilities. This includes mandatory annual cybersecurity training and monthly phishing simulations. We also perform periodic tabletops or simulation exercises involving technical experts and business and functional leaders.
Our overarching approach to cybersecurity risk management centers on governance, people, processes, and technology. We provide security awareness training to help employees understand their information protection and cybersecurity responsibilities. This includes mandatory annual cybersecurity training and monthly phishing simulations.
Risk Factors” for more information about our cybersecurity-related risks. 27 Table of Contents Governance The Quality and Compliance Committee of our Board of Directors provides board-level oversight of cybersecurity risk.
However, the scope and impact of any future incident, or the identification of new information related to prior cybersecurity incidents, cannot be predicted. See “Item 1A. Risk Factors” for more information about our cybersecurity-related risks. 27 Table of Contents Governance The Quality and Compliance Committee of our Board of Directors provides board-level oversight of cybersecurity risk.
We leverage third party cybersecurity companies to periodically assess our cybersecurity program and procedures and reaffirm our compliance with SOC 2 standards. These assessments aid in continual improvement and help us identify and address risks from cybersecurity threats. We also consider cybersecurity, along with our other top risks, within our enterprise risk management framework.
These assessments aid in continual improvement and help us identify and address risks from cybersecurity threats. We also consider cybersecurity, along with our other top risks, within our enterprise risk management framework. This framework involves internal reporting at the business and enterprise levels, considering key risk indicators, trends and countermeasures.
We conduct third party assessments of potential new vendors who process, store or transmit our data, which include a formal security review. This can include the review of documentation related to a vendor’s security attestations, such as SOC 2 Type 2 or HITRUST certifications.
This can include the review of documentation related to a vendor’s security attestations, such as SOC 2 Type 2 or HITRUST certifications. We leverage third-party cybersecurity companies to assess our cybersecurity program and procedures and reaffirm our compliance with SOC 2 standards as well as the HIPAA Security Rule.
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This framework involves internal reporting at the business and enterprise levels, considering key risk indicators, trends and countermeasures. Our Senior Vice President, Chief Information Security Officer (CISO) serves on the Enterprise Risk Committee that assesses our enterprise-wide risks and oversees risk mitigation activities.
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We also perform periodic internal tabletops or simulation exercises involving technical experts, business and functional leaders, as well as separate exercises with select critical third-party service providers. We conduct third-party assessments of potential new vendors who process, store or transmit our data, which include a formal security review.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeOur other properties mainly consist of infusion pharmacies equipped with clean room and compounding capabilities. Some infusion pharmacies are co-located with an ambulatory infusion center where patients receive infusion treatments. As of December 31, 2023, we have 93 pharmacies and 84 stand-alone ambulatory infusion suites that support our infusion services business in 43 states.
Biggest changeOur other properties mainly consist of infusion pharmacies equipped with clean room and compounding capabilities. Some infusion pharmacies are co-located with an ambulatory infusion center where patients receive infusion treatments. As of December 31, 2024, we have 92 pharmacies and 93 stand-alone ambulatory infusion suites that support our infusion services business in 43 states.
Item 2. Properties We currently lease all of our properties from third parties under various lease terms expiring over periods extending through 2038, in addition to a number of non-material month-to-month leases. Our corporate headquarters is located at 3000 Lakeside Drive, Suite 300N, Bannockburn, IL 60015.
Item 2. Properties We currently lease all of our properties from third parties under various lease terms expiring over periods extending through 2039, in addition to a number of non-material month-to-month leases. Our corporate headquarters is located at 3000 Lakeside Drive, Suite 300N, Bannockburn, IL 60015.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe following table provides certain information with respect to the Company’s repurchases of common stock from October 1, 2023 through December 31, 2023: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2023 - October 31, 2023 — $ — — $ 75,000,067 November 1, 2023 - November 30, 2023 1,620,021 28.78 1,620,021 28,368,824 December 1, 2023 - December 31, 2023 937,594 30.26 937,594 250,000,103 2,557,615 $ 29.32 2,557,615 $ 250,000,103 29 Table of Contents Stock Performance Graph The following graph compares the total cumulative returns of BioScrip through August 6, 2019 and Option Care Health from August 7, 2019 through December 31, 2023 with the total cumulative returns of the Nasdaq Composite Index and the S&P Health Care Services Select Industry Index for the five-year period from December 31, 2018 through December 31, 2023.
Biggest changeThe following table provides certain information with respect to the Company’s repurchases of common stock from October 1, 2024 through December 31, 2024: Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs October 1, 2024 - October 31, 2024 — $ — — $ 90,004,547 November 1, 2024 - November 30, 2024 1,862,546 22.48 1,862,546 48,139,183 December 1, 2024 - December 31, 2024 2,075,862 23.19 2,075,862 — 3,938,408 $ 22.85 3,938,408 $ — In January 2025, the Board of Directors approved a new stock repurchase program authorizing the repurchase of up to $500 million of our common stock. 29 Table of Contents Stock Performance Graph The following graph compares the total cumulative returns of Option Care Health, the Nasdaq Composite Index and the S&P Health Care Services Select Industry Index for the five-year period from December 31, 2019 through December 31, 2024.
Recent Sale of Unregistered Securities and Use of Proceeds Issuer Purchases of Equity Securities On February 20, 2023, the Company’s Board of Directors approved a share repurchase program of up to an aggregate $250.0 million of common stock of the Company.
Recent Sale of Unregistered Securities and Use of Proceeds Issuer Purchases of Equity Securities On February 20, 2023, the Company’s Board of Directors approved a share repurchase program of up to an aggregate $250 million of common stock of the Company.
The graph shows the performance of a $100 investment in our Common Stock and each index as of December 31, 2018. * $100 invested on December 31, 2018 in stock or index, including reinvestment of dividends.
The graph shows the performance of a $100 investment in our Common Stock and each index as of December 31, 2019. * $100 invested on December 31, 2019 in stock or index, including reinvestment of dividends.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Our Common Stock, par value $0.0001 per share, is traded on the Nasdaq Global Select Market under the symbol “OPCH”. Holders of Record As of February 19, 2024, there were 96 stockholders of record of our Common Stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Common Stock Our Common Stock, par value $0.0001 per share, is traded on the Nasdaq Global Select Market under the symbol “OPCH”. Holders of Record As of February 21, 2025, there were 76 stockholders of record of our Common Stock.
On December 6, 2023, the Company’s Board of Directors approved an increase to its stock repurchase program authorization from $250.0 million to $500 million. This program has no specified expiration date.
On December 6, 2023, the Company’s Board of Directors approved an increase to its stock repurchase program authorization from $250 million to $500 million. This program was completed in December 2024.
Year Ended December 31, 2018 2019 2020 2021 2022 2023 Option Care Health, Inc. $ 100.00 $ 104.48 $ 109.52 $ 199.16 $ 210.71 $ 235.92 Nasdaq Composite Index $ 100.00 $ 135.23 $ 194.24 $ 235.78 $ 157.74 $ 226.24 S&P Health Care Services Select Industry Index $ 100.00 $ 118.40 $ 157.48 $ 172.35 $ 137.77 $ 144.10 30 Table of Contents Item 6.
Year Ended December 31, 2019 2020 2021 2022 2023 2024 Option Care Health, Inc. $ 100.00 $ 104.83 $ 190.62 $ 201.68 $ 225.80 $ 155.50 Nasdaq Composite Index $ 100.00 $ 143.64 $ 174.36 $ 116.65 $ 167.30 $ 215.22 S&P Health Care Services Select Industry Index $ 100.00 $ 133.00 $ 145.57 $ 116.36 $ 121.70 $ 123.45 30 Table of Contents Item 6.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOther Income (Expense) Year Ended December 31, 2023 2022 Variance (in thousands, except for percentages) Interest expense, net $ (51,248) $ (53,806) $ 2,558 (4.8) % Equity in earnings of joint ventures 5,530 5,125 405 7.9 % Other, net 89,865 14,218 75,647 532.1 % Total other income (expense) $ 44,147 $ (34,463) $ 78,610 (228.1) % The decrease in interest expense, net during the year ended December 31, 2023 was primarily attributable to an increase in interest income generated from our cash and cash equivalents, partially offset by increases in the First Lien Term Loan’s variable interest rate compared to the year ended December 31, 2022.
Biggest changeOperating Expenses Year Ended December 31, 2024 2023 Variance (in thousands, except for percentages) Selling, general and administrative expenses $ 630,251 $ 607,427 $ 22,824 3.8 % Depreciation and amortization expense 60,909 59,201 1,708 2.9 % Total operating expenses $ 691,160 $ 666,628 $ 24,532 3.7 % The increase in selling, general and administrative expenses during the year ended December 31, 2024 was primarily due to an increase in salaries, benefits, and general costs to support the business; however, these expenses have declined as a percentage of revenue to 12.6% for the year ended December 31, 2024 compared to 14.1% for the year ended December 31, 2023, due to the Company’s focus on leveraging existing infrastructure to control spending. 35 Table of Contents Other Income (Expense) Year Ended December 31, 2024 2023 Variance (in thousands, except for percentages) Interest expense, net $ (49,029) $ (51,248) $ 2,219 (4.3) % Equity in earnings of joint ventures 5,964 5,530 434 7.8 % Other, net 4,831 89,865 (85,034) (94.6) % Total other (expense) income $ (38,234) $ 44,147 $ (82,381) (186.6) % The decrease in interest expense, net during the year ended December 31, 2024 was primarily attributable to additional interest income generated from our cash and cash equivalents, partially offset by an increase in the Company’s First Lien Term Loan principal balance, compared to the year ended December 31, 2023.
Change in Unrealized Gain (Loss) on Cash Flow Hedge, Net of Income Tax Benefit (Expense) .
Change in Unrealized (Loss) Gain on Cash Flow Hedge, Net of Income Tax Benefit (Expense) .
Interest expense consists principally of interest payments on the Company’s outstanding borrowings under the ABL Facility, First Lien Term Loan, Revolver Facility, Senior Notes, amortization of discount and deferred financing fees, and payments associated with the interest rate cap, and interest income earned on cash and cash equivalents.
Interest expense consists principally of interest and fee payments on the Company’s outstanding borrowings under the ABL Facility, First Lien Term Loan, Revolver Facility, Senior Notes, amortization of discount and deferred financing fees, payments associated with the interest rate cap, and interest income earned on cash and cash equivalents.
Change in unrealized gain (loss) on cash flow hedge, net of income tax benefit (expense), consists of the gain (loss) associated with the changes in the fair value of hedging instruments related to the interest rate cap, net of income taxes. 33 Table of Contents Results of Operations The following table presents Option Care Health’s consolidated results of operations for the years ended December 31, 2023 and 2022 (in thousands, except for percentages).
Change in unrealized (loss) gain on cash flow hedge, net of income tax benefit (expense), consists of the (loss) gain associated with the changes in the fair value of hedging instruments related to the interest rate cap, net of income taxes. 33 Table of Contents Results of Operations The following table presents Option Care Health’s consolidated results of operations for the years ended December 31, 2024 and 2023 (in thousands, except for percentages).
Contractual allowance estimates are adjusted to actual amounts as cash is received and claims are settled. 40 Table of Contents Business Acquisitions The Company accounts for business acquisitions in accordance with ASC Topic 805, Business Combinations (“ASC 805”), with assets and liabilities being recorded at their acquisition date fair values and goodwill being calculated as the purchase price in excess of the net identifiable assets.
Contractual allowance estimates are adjusted to actual amounts as cash is received and claims are settled. 41 Table of Contents Business Acquisitions The Company accounts for business acquisitions in accordance with ASC Topic 805, Business Combinations (“ASC 805”), with assets and liabilities being recorded at their acquisition date fair values and goodwill being calculated as the purchase price in excess of the net identifiable assets.
After applying the criteria from ASC 606, an allowance for doubtful accounts is established only as a result of an adverse change in the payers’ ability to pay outstanding billings. As of December 31, 2023 and 2022, the Company had no allowance for doubtful accounts.
After applying the criteria from ASC 606, an allowance for doubtful accounts is established only as a result of an adverse change in the payers’ ability to pay outstanding billings. As of December 31, 2024 and 2023, the Company had no allowance for doubtful accounts.
On May 3, 2023, the Company entered into a definitive merger agreement (the “Amedisys Merger Agreement”) with Amedisys, Inc. (“Amedisys”), a leading provider of healthcare in home health and hospice settings. On June 26, 2023, the Company entered into an agreement to terminate the Amedisys Merger Agreement (the “Mutual Termination Agreement”).
On May 3, 2023, the Company entered into a definitive merger agreement (the “Amedisys Merger Agreement”) with Amedisys, a leading provider of healthcare in home health and hospice settings. On June 26, 2023, the Company entered into an agreement to terminate the Amedisys Merger Agreement (the “Mutual Termination Agreement”).
The principal balance of the First Lien Term Loan is repayable in quarterly installments of $1.5 million plus interest, with a final payment of all remaining outstanding principal due on October 27, 2028. The quarterly principal payments commenced in March 2022.
The principal balance of the First Lien Term Loan is repayable in quarterly installments of $1.6 million plus interest, with a final payment of all remaining outstanding principal due on October 27, 2028. The quarterly principal payments commenced in March 2022.
Business Overview Option Care Health and its wholly-owned subsidiaries provide infusion therapy and other ancillary healthcare services through a national network of 177 locations around the United States.
Business Overview Option Care Health and its wholly-owned subsidiaries provide infusion therapy and other ancillary healthcare services through a national network of 185 locations around the United States.
During the years ended December 31, 2023 and 2022, the Company’s positive cash flows from operations have enabled investments in pharmacy, infusion suites, and information technology infrastructure to support growth and create additional capacity in the future, as well as to pursue acquisitions and share repurchases.
During the year ended December 31, 2023, the Company’s positive cash flows from operations have enabled investments in pharmacy, infusion suites, and information technology infrastructure to support growth and create additional capacity in the future, as well as to pursue acquisitions and share repurchases.
For a discussion of Option Care Health’s consolidated results of operations for the year ended December 31, 2022 compared to the year ended December 31, 2021, refer to Part II, Item 7.
For a discussion of Option Care Health’s consolidated results of operations for the year ended December 31, 2023 compared to the year ended December 31, 2022, refer to Part II, Item 7.
There was no comparable activity during the year ended December 31, 2022. For the year ended December 31, 2023, the change in unrealized (loss) gain on cash flow hedge, net of income tax benefit (expense) was related to the change in fair market value of the $300.0 million interest rate cap hedge executed in October 2021.
There was no comparable activity during the year ended December 31, 2024. For the years ended December 31, 2024 and 2023, the change in unrealized (loss) gain on cash flow hedge, net of income tax benefit (expense) was related to the change in fair market value of the $300.0 million interest rate cap hedge executed in October 2021.
Borrowings under the Revolver Facility will bear interest at a rate equal to, at the option of the Company, either (i) the Term Secured Overnight Financing Rate (“SOFR”) applicable thereto plus the Applicable Rate or (ii) the then-applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the Amendment, (A) for Term SOFR Loans, 1.75%, (B) for Base Rate Loans, 0.75% and (ii) thereafter, the following percentages per annum, based upon the Total Net Leverage Ratio as set forth in the most recent compliance certificate received by the Administrative Agent pursuant to the terms of the Credit Agreement.
Borrowings under the Revolver Facility will bear interest at a rate equal to, at the option of the Company, either (i) the Term SOFR applicable thereto plus the Applicable Rate or (ii) the then-applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the Second Amendment, (A) for Term SOFR Loans, 1.75%, or (B) for Base Rate Loans, 0.75% and (ii) thereafter, the Applicable Rate for Term SOFR Loans and Base Rate Loans, based upon the Total Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to the terms of the Credit Agreement.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2022 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 23, 2023.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2023 Annual Report on Form 10-K filed with the Securities and Exchange Commission on February 22, 2024.
Interest on the First Lien Term Loan is payable monthly on either (i) SOFR (with a floor of 0.50% per annum) plus an applicable margin of 2.75% for Term SOFR Loans (as such term is defined in the First Lien Credit Agreement Amendment); or (ii) a base rate determined in accordance with the new First Lien Credit Agreement Amendment, plus 1.75% for Base Rate Loans (as such term is defined in the First Lien Credit Agreement Amendment).
Under the Third Amendment, interest on the First Lien Term Loan is payable monthly on either (i) SOFR (with a floor of 0.50% per annum) plus an applicable margin of 2.25% for Term SOFR Loans (as such term is defined in the Third Amendment); or (ii) a base rate determined in accordance with the Third Amendment, plus 1.25% for Base Rate Loans (as such term is defined in the Third Amendment).
The variance in the Company’s effective tax rate of 25.5% for the year ended December 31, 2023, compared to the federal statutory rate of 21%, is also primarily attributable to state taxes, various non-deductible expenses, and a change in state valuation allowance.
The variance in the Company’s effective tax rate of 25.3% for the year ended December 31, 2024, compared to the federal statutory rate of 21%, was also primarily attributable to state taxes, various non-deductible expenses, and a change in state valuation allowance.
Interest payments over the course of long-term debt obligations total an estimated $359.8 million based on final maturity dates of the Company’s credit facilities. Interest payments are calculated based on current rates as of December 31, 2023.
Interest payments over the course of long-term debt obligations total an estimated $271.1 million based on final maturity dates of the Company’s credit facilities. Interest payments are calculated based on current rates as of December 31, 2024.
The variance in the Company’s effective tax rate of 25.5% and 26.8% for the years ended December 31, 2023 and 2022, respectively, is primarily attributable to the difference in state taxes, various non-deductible expenses, and a change in state valuation allowance.
The variance in the Company’s effective tax rate of 25.3% and 25.5% for the years ended December 31, 2024 and 2023, respectively, was primarily attributable to the difference in state taxes, various non-deductible expenses, and a change in state valuation allowance.
See Note 3, Business Acquisitions and Divestitures , for further discussion of business acquisitions. 41 Table of Contents
See Note 3, Business Acquisitions and Divestitures , for further discussion of business acquisitions.
The Company may require additional capital in excess of current availability in order to complete future acquisitions. It is impossible to predict the amount of capital that may be required for acquisitions, and there is no assurance that sufficient financing for these activities will be available on acceptable terms.
It is impossible to predict the amount of capital that may be required for acquisitions, and there is no assurance that sufficient financing for these activities will be available on acceptable terms.
Cash Flows from Investing Activities The decrease in cash used in investing activities during the year ended December 31, 2023 is primarily due to a decrease in acquisition activity as compared to the year ended December 31, 2022. See Note 3, Business Acquisitions and Divestitures , of the consolidated financial statements for more information.
Cash Flows from Investing Activities The decrease in cash used in investing activities during the year ended December 31, 2024 was primarily due to prior year acquisition activity with no comparable activity during the year ended December 31, 2024. See Note 3, Business Acquisitions and Divestitures , of the consolidated financial statements for more information.
As of December 31, 2023, the Company had $394.7 million of borrowings available under its credit facilities (net of $5.3 million undrawn letters of credit issued and outstanding), described further below.
As of December 31, 2024, the Company had $395.9 million of borrowings available under its credit facilities (net of $4.1 million undrawn letters of credit issued and outstanding), described further below.
Selling, general and administrative expenses consist principally of salaries for administrative employees that directly and indirectly support the operations, occupancy costs, marketing expenditures, insurance, and professional fees. Depreciation and Amortization Expense. Depreciation within this caption includes infrastructure items such as intangibles amortization, computer hardware and software, office equipment and leasehold improvements.
Selling, general and administrative expenses consist principally of salaries for administrative employees that directly and indirectly support the operations, occupancy costs, marketing expenditures, insurance, and professional fees. Depreciation and Amortization Expense. Depreciation within this caption relates to property and equipment and amortization relates to intangibles.
As of December 31, 2023, the Company had $5.3 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $394.7 million.
As of December 31, 2024, the Company had $4.1 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $395.9 million.
Cash Flows from Financing Activities The cash used in financing activities is primarily related to the Company’s repurchase of common stock during the year ended December 31, 2023, whereas the cash provided by financing activities in the year ended December 31, 2022 was primarily related to the proceeds of warrant exercises. 39 Table of Contents Critical Accounting Estimates The Company prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”), which requires the Company to make estimates and assumptions.
Cash Flows from Financing Activities The decrease in cash used in financing activities was primarily related to the Company’s debt refinancing in May 2024, in which $50.0 million in proceeds from issuance of debt was received, which partially offset $250.0 million in repurchase of common stock during the year ended December 31, 2024, whereas the cash used in financing activities during the year ended December 31, 2023 was primarily related to the Company’s $250.0 million repurchase of common stock. 40 Table of Contents Critical Accounting Estimates The Company prepares its consolidated financial statements in accordance with United States generally accepted accounting principles (“GAAP”), which require the Company to make estimates and assumptions.
The Company’s primary uses of cash include supporting our ongoing business activities, investment in capital expenditures in both facilities and technology, and the pursuit of acquisitions and share repurchases. Ongoing operating cash outflows are associated with procuring and dispensing drugs, personnel and other costs associated with servicing patients, as well as paying cash interest on outstanding debt and cash taxes.
Ongoing operating cash outflows are associated with procuring and dispensing drugs, personnel and other costs associated with servicing patients, as well as paying cash interest on outstanding debt and cash taxes. Ongoing investing cash flows are primarily associated with capital projects and business acquisitions, the improvement and maintenance of our pharmacy facilities and investment in our information technology systems.
Year Ended December 31, 2023 2022 Amount % of Revenue Amount % of Revenue NET REVENUE $ 4,302,324 100.0 % $ 3,944,735 100.0 % COST OF REVENUE 3,321,101 77.2 % 3,077,817 78.0 % GROSS PROFIT 981,223 22.8 % 866,918 22.0 % OPERATING COSTS AND EXPENSES: Selling, general and administrative expenses 607,427 14.1 % 566,122 14.4 % Depreciation and amortization expense 59,201 1.4 % 60,565 1.5 % Total operating expenses 666,628 15.5 % 626,687 15.9 % OPERATING INCOME 314,595 7.3 % 240,231 6.1 % OTHER INCOME (EXPENSE): Interest expense, net (51,248) (1.2) % (53,806) (1.4) % Equity in earnings of joint ventures 5,530 0.1 % 5,125 0.1 % Other, net 89,865 2.1 % 14,218 0.4 % Total other income (expense) 44,147 1.0 % (34,463) (0.9) % INCOME BEFORE INCOME TAXES 358,742 8.3 % 205,768 5.2 % INCOME TAX EXPENSE 91,652 2.1 % 55,212 1.4 % NET INCOME $ 267,090 6.2 % $ 150,556 3.8 % OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX: Change in unrealized (loss) gain on cash flow hedge, net of income tax benefit (expense) of $2,158 and $(7,259), respectively (6,181) (0.1) % 21,610 0.5 % OTHER COMPREHENSIVE (LOSS) INCOME (6,181) (0.1) % 21,610 0.5 % NET COMPREHENSIVE INCOME $ 260,909 6.1 % $ 172,166 4.4 % 34 Table of Contents Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table presents selected consolidated comparative results of operations for the years ended December 31, 2023 and 2022: Gross Profit Year Ended December 31, 2023 2022 Variance (in thousands, except for percentages) Net revenue $ 4,302,324 $ 3,944,735 $ 357,589 9.1 % Cost of revenue 3,321,101 3,077,817 243,284 7.9 % Gross profit $ 981,223 $ 866,918 $ 114,305 13.2 % Gross profit margin 22.8% 22.0% The increase in net revenue during the year ended December 31, 2023 was primarily driven by organic growth in the Company’s portfolio of therapies, consisting of acute revenue that had mid-single-digit growth relative to the prior year while chronic revenue grew in the low-double-digits.
Year Ended December 31, 2024 2023 Amount % of Revenue Amount % of Revenue NET REVENUE $ 4,998,202 100.0 % $ 4,302,324 100.0 % COST OF REVENUE 3,985,209 79.7 % 3,321,101 77.2 % GROSS PROFIT 1,012,993 20.3 % 981,223 22.8 % OPERATING COSTS AND EXPENSES: Selling, general and administrative expenses 630,251 12.6 % 607,427 14.1 % Depreciation and amortization expense 60,909 1.2 % 59,201 1.4 % Total operating expenses 691,160 13.8 % 666,628 15.5 % OPERATING INCOME 321,833 6.4 % 314,595 7.3 % OTHER INCOME (EXPENSE): Interest expense, net (49,029) (1.0) % (51,248) (1.2) % Equity in earnings of joint ventures 5,964 0.1 % 5,530 0.1 % Other, net 4,831 0.1 % 89,865 2.1 % Total other (expense) income (38,234) (0.8) % 44,147 1.0 % INCOME BEFORE INCOME TAXES 283,599 5.7 % 358,742 8.3 % INCOME TAX EXPENSE 71,776 1.4 % 91,652 2.1 % NET INCOME $ 211,823 4.2 % $ 267,090 6.2 % OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX: Change in unrealized (loss) gain on cash flow hedges, net of income tax benefit (expense) of $1,284 and $2,158, respectively (3,931) (0.1) % (6,181) (0.1) % OTHER COMPREHENSIVE (LOSS) INCOME (3,931) (0.1) % (6,181) (0.1) % NET COMPREHENSIVE INCOME $ 207,892 4.2 % $ 260,909 6.1 % 34 Table of Contents Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents selected consolidated comparative results of operations for the years ended December 31, 2024 and 2023: Gross Profit Year Ended December 31, 2024 2023 Variance (in thousands, except for percentages) Net revenue $ 4,998,202 $ 4,302,324 $ 695,878 16.2 % Cost of revenue 3,985,209 3,321,101 664,108 20.0 % Gross profit $ 1,012,993 $ 981,223 $ 31,770 3.2 % Gross profit margin 20.3% 22.8% The increase in net revenue during the year ended December 31, 2024 was primarily driven by organic growth in the Company’s portfolio of therapies, consisting of acute revenue that had high single digits growth relative to the prior year while chronic revenue grew in the high teens.
Net comprehensive income increased to $260.9 million for the year ended December 31, 2023, compared to net comprehensive income of $172.2 million for the year ended December 31, 2022, primarily as a result of the changes in net income discussed above, partially offset by the impact of the change in fair market value of the interest rate cap hedge discussed above. 36 Table of Contents Liquidity and Capital Resources For the years ended December 31, 2023 and 2022, the Company’s primary sources of liquidity were cash on hand of $343.8 million and $294.2 million, respectively.
Net comprehensive income decreased to $207.9 million for the year ended December 31, 2024, compared to net comprehensive income of $260.9 million for the year ended December 31, 2023, primarily as a result of the changes in net income discussed above. 37 Table of Contents Liquidity and Capital Resources For the years ended December 31, 2024 and 2023, the Company’s primary sources of liquidity were cash and cash equivalents of $412.6 million and $343.8 million, respectively.
Actual payments are based on changes in SOFR and exclude the interest rate cap derivative instrument. 38 Table of Contents Cash Flows Year Ended December 31, 2023 Compared to Year Ended December 31, 2022 The following table presents selected data from Option Care Health’s consolidated statements of cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 Variance (in thousands) Net cash provided by operating activities $ 371,295 $ 267,547 $ 103,748 Net cash used in investing activities (56,506) (108,052) 51,546 Net cash (used in) provided by financing activities (265,126) 15,268 (280,394) Net increase in cash and cash equivalents 49,663 174,763 (125,100) Cash and cash equivalents - beginning of period 294,186 119,423 174,763 Cash and cash equivalents - end of period $ 343,849 $ 294,186 $ 49,663 Cash Flows from Operating Activities The increase in cash provided by operating activities is primarily due to higher net income, the Termination Fee received under the terms of the Mutual Termination Agreement, net of merger-related expenses and taxes, stock-based incentive compensation expense, changes in accrued compensation and employee benefits, timing of collections on accounts receivable, partially offset by cash paid for taxes, changes in inventory, and certain accruals and timing of vendor payments during the year ended December 31, 2023 as compared to the year ended December 31, 2022.
Actual payments are based on changes in SOFR and exclude the interest rate cap derivative instrument. 39 Table of Contents Cash Flows Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 The following table presents selected data from Option Care Health’s consolidated statements of cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 Variance (in thousands) Net cash provided by operating activities $ 323,392 $ 371,295 $ (47,903) Net cash used in investing activities (36,470) (56,506) 20,036 Net cash used in financing activities (218,206) (265,126) 46,920 Net increase in cash and cash equivalents 68,716 49,663 19,053 Cash and cash equivalents - beginning of period 343,849 294,186 49,663 Cash and cash equivalents - end of period $ 412,565 $ 343,849 $ 68,716 Cash Flows from Operating Activities The decrease in cash provided by operating activities during the year ended December 31, 2024 was primarily due to the $106.0 million payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses during the year ended December 31, 2023, changes in accounts receivable and accrued compensation and employee benefits.
Our business strategy includes the deployment of capital to pursue acquisitions that complement our existing operations. We continue to evaluate acquisition opportunities and view acquisitions as a key part of our growth strategy. The Company historically has funded its acquisitions with cash and cash equivalents with the exception of the Merger.
Ongoing financing cash flows are primarily associated with the quarterly principal payments on its outstanding debt, along with potential future share repurchases. Our business strategy includes the deployment of capital to pursue acquisitions that complement our existing operations. We continue to evaluate acquisition opportunities and view acquisitions as a key part of our growth strategy.
Our multidisciplinary team of clinicians, including pharmacists, nurses, dietitians and respiratory therapists, work with the physician to develop a plan of care suited to each patient’s specific needs.
Our multidisciplinary team of clinicians, including pharmacists, nurses, dietitians and respiratory therapists, work with the physician to develop a plan of care suited to each patient’s specific needs. We provide home infusion services consisting of anti-infectives, nutrition support, therapies for neurological disorders and chronic inflammatory disorders, immunoglobulin therapy, and other therapies for chronic and acute conditions.
Under the terms of the Mutual Termination Agreement, the Company received a payment of $106.0 million in cash on behalf of Amedisys (the “Termination Fee”). Other income (expense) primarily includes the termination fee, net of merger-related expenses, received on behalf of Amedisys during the year ended December 31, 2023.
See Note 11, Indebtedness , of the consolidated financial statements for further information. The decrease in other, net during the year ended December 31, 2024 was due to the $106.0 million payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses during the year ended December 31, 2023.
We may require additional borrowings under our credit facilities and alternative forms of financings or investments to achieve our longer-term strategic plans. 37 Table of Contents Credit Facilities On December 7, 2023, the Company amended its First Lien Credit Agreement to, among other things, create a Revolver Facility which provides for borrowings up to $400.0 million.
We may require additional borrowings under our credit facilities and alternative forms of financings or investments to achieve our longer-term strategic plans. 38 Table of Contents Credit Facilities On May 8, 2024, the Company entered into the third amendment to the amended and restated First Lien Credit Agreement dated as of October 27, 2021 (the “Third Amendment”).
The increase in other, net during the year ended December 31, 2023 is primarily attributable to the receipt of the Termination Fee, net of merger-related expenses.
During the year ended December 31, 2024, other income (expense) primarily includes activity related to non-operating income and expenses. During the year ended December 31, 2023, other income (expense) primarily includes the termination fee, net of merger-related expenses, received on behalf of Amedisys, Inc. (“Amedisys”).
Net Income and Other Comprehensive (Loss) Income Year Ended December 31, 2023 2022 Variance (in thousands, except for percentages) Net income $ 267,090 $ 150,556 $ 116,534 77.4 % Other comprehensive (loss) income, net of tax: Change in unrealized (loss) gain on cash flow hedge, net of income tax benefit (expense) (6,181) 21,610 (27,791) (128.6) % Other comprehensive (loss) income (6,181) 21,610 (27,791) (128.6) % Net comprehensive income $ 260,909 $ 172,166 $ 88,743 51.5 % The change in net income for the year ended December 31, 2023 was attributable to organic growth from additional revenue related to the factors described in the above sections and the Termination Fee received under the terms of the Mutual Termination Agreement, net of merger-related expenses.
The income tax expense for the year ended December 31, 2023 includes $21.8 million of tax expense related to the Termination Fee received, under the terms of the Mutual Termination Agreement, net of merger-related expenses, and the release of $5.8 million of state valuation allowance in September 2023. 36 Table of Contents Net Income and Other Comprehensive (Loss) Income Year Ended December 31, 2024 2023 Variance (in thousands, except for percentages) Net income $ 211,823 $ 267,090 $ (55,267) (20.7) % Other comprehensive (loss) income, net of tax: Change in unrealized (loss) gain on cash flow hedges, net of income tax benefit (expense) (3,931) (6,181) 2,250 (36.4) % Other comprehensive (loss) income (3,931) (6,181) 2,250 (36.4) % Net comprehensive income $ 207,892 $ 260,909 $ (53,017) (20.3) % The change in net income for the year ended December 31, 2024 was attributable to the $106.0 million payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses during the year ended December 31, 2023.
During the year ended December 31, 2022, the change in other, net is primarily due to a $10.3 million pre-tax gain from the sale of respiratory therapy assets (“Respiratory Therapy Asset Sale”), which closed in December 2022. 35 Table of Contents Income Tax Expense Year Ended December 31, 2023 2022 Variance (in thousands, except for percentages) Income tax expense $ 91,652 $ 55,212 $ 36,440 66.0 % The Company recorded income tax expense of $91.7 million and $55.2 million, which represents an effective tax rate of 25.5% and 26.8% for the years ended December 31, 2023 and 2022, respectively.
Income Tax Expense Year Ended December 31, 2024 2023 Variance (in thousands, except for percentages) Income tax expense $ 71,776 $ 91,652 $ (19,876) 21.7 % The Company recorded income tax expense of $71.8 million and $91.7 million, which represents an effective tax rate of 25.3% and 25.5% for the years ended December 31, 2024 and 2023, respectively.
During the year ended December 31, 2022, other income (expense) primarily includes the gain on the sale of respiratory therapy assets, which closed in December 2022. Income Tax Benefit Expense . The Company is subject to taxation in the United States and various states. The Company’s income tax expense is reflective of the current federal and state tax rates.
Under the terms of the Mutual Termination Agreement, the Company received a payment of $106.0 million in cash on behalf of Amedisys (the “Termination Fee”). Income Tax Expense . The Company is subject to taxation in the United States and various states. The Company’s income tax expense is reflective of the current federal and state tax rates.
Removed
We provide home infusion services consisting of anti-infectives, nutrition support, therapies for chronic inflammatory disorders and neurological disorders, immunoglobulin therapy, and other therapies for chronic and acute conditions. 31 Table of Contents Composition of Results of Operations The following results of operations include the accounts of Option Care Health and our subsidiaries for the years ended December 31, 2023 and 2022.
Added
The Company operates in one segment, infusion services. Update on the Impact of the Change Healthcare Cybersecurity Incident As previously disclosed, on February 21, 2024, Change Healthcare, a subsidiary of UnitedHealth Group, experienced an incident in which a cybersecurity threat actor gained access to some of its information technology systems (“Change Healthcare Cybersecurity Incident”).
Removed
The increase in net revenue was partially offset by the divestiture of respiratory therapy assets in December 2022 as well as therapies related to the treatment of ALS and pre-term labor.
Added
Since the time of the system disruption, Option Care Health has worked continuously to find alternative processes to help maintain patient care and overall operations. As of December 31, 2024, the Company has not identified any compromise or unauthorized access of its systems or networks due to this third party incident.
Removed
The increase in cost of revenue and gross profit was primarily driven by the growth in revenue, which outpaced the increase in cost of revenue primarily due to our disciplined procurement strategies, certain temporary favorable therapy pricing dynamics that emerged due to the timing in variances in reference prices that affects our costs relative to reimbursement, and efficient utilization of our clinical workforce and infusion suite network.
Added
As of the end of the second quarter of 2024, the Company reconnected to key applications maintained by Change Healthcare and as of the end of the fourth quarter of 2024, the Company has fully recovered.
Removed
Operating Expenses Year Ended December 31, 2023 2022 Variance (in thousands, except for percentages) Selling, general and administrative expenses $ 607,427 $ 566,122 $ 41,305 7.3 % Depreciation and amortization expense 59,201 60,565 (1,364) (2.3) % Total operating expenses $ 666,628 $ 626,687 $ 39,941 6.4 % The increase in selling, general and administrative expenses during the year ended December 31, 2023 is primarily due to an increase in salaries, benefits, and equity compensation as a result of expansion of team members to adjust to current volumes, however, these expenses have remained relatively consistent as a percentage of revenue at 14.1% and 14.4% for the years ended December 31, 2023 and 2022, respectively, due to the Company’s focus on controlling spending leverage.
Added
During the fourth quarter of 2024, the Company did not experience a material financial impact from the Change Healthcare Cybersecurity Incident on the financial results as reported.
Removed
The income tax expense for the year ended December 31, 2023 includes $21.8 million of tax expense related to the Termination Fee received, under the terms of the Mutual Termination Agreement, net of merger-related expenses, and the release of $5.8 million of state valuation allowance in September 2023.
Added
The Company continues to maintain strong liquidity and, having resumed submission of all claims to payers, has determined that the Change Healthcare Cybersecurity Incident did not materially impact the Company, including its business operations, financial condition or results of operations. 31 Table of Contents Composition of Results of Operations The following results of operations include the accounts of Option Care Health and our subsidiaries for the years ended December 31, 2024 and 2023.
Removed
Ongoing investing cash flows are primarily associated with capital projects and business acquisitions, the improvement and maintenance of our pharmacy facilities and investment in our information technology systems. Ongoing financing cash flows are primarily associated with the quarterly principal payments on our outstanding debt, along with potential future share repurchases.
Added
The increase in cost of revenue was primarily driven by the growth in revenue, therapy mix, and acute drug supply chain disruption, as well as the comparable impact of certain temporary favorable therapy procurement dynamics in the prior year.
Removed
The table below illustrates the aforementioned interest rate terms: Pricing Level Total Net Leverage Ratio Applicable Rate for Term SOFR Loans Applicable Rate for Base Rate Loans I Greater than or equal to 3.00x 2.25% 1.25% II Less than 3.00x, but greater than or equal to 2.25x 2.00% 1.00% III Less than 2.25x, but greater than or equal to 1.50x 1.75% 0.75% IV Less than 1.50x, but greater than or equal to 1.00x 1.50% 0.50% V Less than 1.00x 1.25% 0.25% Concurrently with the creation of the Revolver Facility, the Company terminated the asset-based-lending revolving credit facility, which provided for borrowings up to $225.0 million with a maturity date of October 27, 2026 (the “ABL Facility”).
Added
The decrease in gross profit margin was primarily due to the launch of certain new higher cost therapies included within chronic growth (including rare and orphan therapies) and to the same comparable impact of certain temporary favorable procurement dynamics in the prior year that did not continue into 2024.
Removed
The ABL Facility bore interest at a rate equal to, at the Company’s election, either (i) a base rate determined in accordance with the ABL Credit Agreement plus an applicable margin, which is equal to between 0.25% and 0.75% based on the historical excess availability as a percentage of the Line Cap (as such term is defined in the ABL Credit Agreement) and (ii) SOFR (with a floor of 0.00% per annum) plus an applicable margin, which is equal to between 1.25% and 1.75% based on the historical excess availability as a percentage of the Line Cap.
Added
Additionally, the Company received notice of a manufacturer’s intention to significantly reduce the spread at which the Company procures a certain therapy relative to drug reference prices beginning in early 2025, which is expected to negatively impact gross profit by approximately $60 million to $70 million in 2025.
Removed
As of December 31, 2023, the Company’s ABL Facility was terminated. Effective January 13, 2023, the Company entered into an agreement to amend the ABL Facility and increase the amount of borrowing availability by $50.0 million to $225.0 million total borrowing availability. As a result of the amended agreement, SOFR was established as the new reference rate, replacing LIBOR.
Added
There was no comparable activity during the year ended December 31, 2024.
Removed
Effective June 30, 2023, the Company entered into an agreement, dated as of June 8, 2023, to amend the First Lien Term Loan to replace LIBOR and related definitions and provisions with SOFR as the new reference rate.
Added
The Company’s primary uses of cash and cash equivalents include supporting our ongoing business activities, investment in capital expenditures in both facilities and technology, and the pursuit of acquisitions and share repurchases.
Added
The Company historically has funded its acquisitions with cash and cash equivalents with the exception of the Merger. The Company may require additional capital in excess of current availability in order to complete future acquisitions.
Added
The Third Amendment, among other things, (i) provides for an additional $50.0 million of incremental First Lien Term Loan indebtedness and (ii) reduces the interest rate on the First Lien Term Loan from Term Secured Overnight Financing Rate (“SOFR”) (including a credit spread adjustment) plus 2.75% to Term SOFR plus 2.25% and removes the credit spread adjustment with respect to such First Lien Term Loan.
Added
On December 7, 2023, the Company entered into the second amendment to the amended and restated First Lien Credit Agreement dated as of October 27, 2021 (the “Second Amendment”).
Added
The Second Amendment, among other things, provides for revolving credit commitments by the applicable Revolving Credit Lenders in an aggregate amount of $400.0 million (the “Revolver Facility”) pursuant to which such lenders have agreed to make Revolving Credit Loans to the Company.
Added
Additionally, changes in accounts payable and inventory were driven by organic growth in the Company as well as strategic supply chain purchases.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed1 unchanged
Biggest changeAt December 31, 2023, we had outstanding debt of $588.0 million under our First Lien Term Loan with a variable interest rate component. See Note 11, Indebtedness , of the consolidated financial statements for more information.
Biggest changeAt December 31, 2024, we had outstanding debt of $631.6 million under our First Lien Term Loan with a variable interest rate component. See Note 11, Indebtedness , of the consolidated financial statements for more information.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk The Company’s primary market risk exposure is changing SOFR‑based interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk The Company’s primary market risk exposure is to changing SOFR‑based interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.
See Note 12, Derivative Instruments , of the consolidated financial statements for more information. A hypothetical 100-basis point increase or decrease in market interest rates associated with the unhedged variable-rate debt over a 12-month period would result in a change to interest expense of approximately $2.9 million. 42 Table of Contents
See Note 12, Derivative Instruments , of the consolidated financial statements for more information. A hypothetical 100-basis point increase or decrease in market interest rates associated with the unhedged variable-rate debt over a 12-month period would result in a change to interest expense of approximately $3.3 million. 42 Table of Contents

Other OPCH 10-K year-over-year comparisons