Full Press Release Details
BrightSpring Health Services, Inc. Reports Financial Results for Fourth Quarter and Full Year 2023 and Provides Full Year 2024 Guidance
LOUISVILLE, Ky., Feb. 29, 2024 (GLOBE NEWSWIRE) BrightSpring Health Services, Inc. ( BrightSpring or the Company ) (NASDAQ: BTSG)
announced today financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
Full Year 2023 Financial Highlights
Jon Rousseau, Chief Executive Officer, stated, I am proud to announce that we closed out a very successful 2023 with strong
momentum in both the Pharmacy and Provider segments and am thankful for the efforts of dedicated employees across the country. We positively impact hundreds of thousands of individuals living with complex health conditions through our complementary
and high-quality services that improve outcomes and reduce cost. Our consistent performance is reflective of our team s ongoing
commitment to provide better care access, coordination, and results for patients. We have a proven track record of growth at scale and are confident in our ability to continue to deliver the
multiple and comprehensive services that complex patients require. We are proud of the full year financial results we delivered in 2023 and are excited to build on the momentum in the years ahead as we continue to execute our differentiated strategy
as a public company.
Full Year 2024 Financial Guidance
For the full year 2024, BrightSpring is providing the below guidance, which excludes the effects of any future acquisitions.
Conference Call Details
BrightSpring will host a conference call to discuss its financial results later today at 8:30 a.m. EST. The conference call can be accessed via a live audio
webcast that will be available online on the Company s investor relations website at https://ir.brightspringhealth.com under the Events & Presentations section, where related presentation materials will be posted prior to
the conference call.
The webcast may be accessed directly at https://edge.mediaserver.com/mmc/p/afv2jeob
Following the conference call, a replay of the webcast will be available on the Company s investor relations website,
https://ir.brightspringhealth.com/. The Company has posted supplemental financial information on the fourth quarter results that it will reference during the conference call. The supplemental information can be found under the
Events & Presentations on the Company s investor relations page.
About BrightSpring Health Services
BrightSpring Health Services is the parent company of leading healthcare service lines that provide complementary home- and community-based pharmacy and
provider health solutions for complex populations in need of specialized and/or chronic care. Through the company s high-quality and impactful pharmacy, primary care and home health care, and rehabilitation and behavioral health services, and
through its skilled and dedicated employees, we provide comprehensive care and clinical solutions in all 50 states to over 400,000 customers, clients and patients daily. For more information, visit www.brightspringhealth.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements
relate to matters such as industries, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating
information. In some cases, you can identify these forward-looking statements by the use of words such as anticipate, assume, believe, continue, could, estimate,
expect, intend, may, plan, potential, predict, project, future, will, seek, foreseeable, target,
guidance, the negative version of these words, or similar terms and phrases.
The forward-looking statements are based on management s
current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations,
beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management s expectations, beliefs, and projections will result or be achieved. Actual results may
differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond our control. We believe that these factors include but are not
limited to the following:
The forward-looking statements included in this press release are made only as of the date of this press
release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law. These factors should not be construed as
exhaustive, and should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. Factors or
events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements
and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments, or other strategic
transactions we may make.
For additional information on these and other factors that could cause BrightSpring s actual results to differ materially
from expected results, please see our filings with the Securities and Exchange Commission (the SEC ), which are accessible on the SEC s website at www.sec.gov.
Non-GAAP Financial Information
This press release contains non-GAAP financial measures, including EBITDA and Adjusted
EBITDA, which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the
United States, or GAAP.
EBITDA and Adjusted EBITDA have been presented in this release as supplemental measures of financial performance that are not
required by, or presented in accordance with, GAAP, because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative
of our core operating performance. Management also believes that these measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions
regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses EBITDA and Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies,
to make budgeting decisions, to establish and award discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures.
Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the
factors and trends affecting the business than GAAP results alone. EBITDA and Adjusted EBITDA are not GAAP measures of our financial performance and should not be considered as an alternative to net (loss) income as a measure of financial
performance or any other performance measures derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management s discretionary use as they do not consider certain cash
requirements such as tax payments, debt service requirements, total capital expenditures, and certain other cash costs that may recur in the future.
Management defines EBITDA as net (loss) income before income tax expense (benefit), interest expense, and depreciation and amortization. Management also
defines Adjusted EBITDA as EBITDA, further adjusted to exclude non-cash share-based compensation, acquisition, integration and transaction-related costs, restructuring and divestiture-related and other costs,
goodwill impairment, legal costs associated with certain historical matters for PharMerica and settlement costs associated with the Silver matter, significant projects, management fees, and unreimbursed
COVID-19 related costs.
The presentations of these measures have limitations as analytical tools and should not be considered in
isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies
and can differ significantly from company to company. Please see the end of this press release for reconciliations of non-GAAP financial measures to the most directly comparable financial measure prepared in
accordance with GAAP.
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2023 and 2022
(In thousands, except share and per share data)
| December 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 13,071 | $ | 13,628 | ||||
| Accounts receivable, net of allowance for credit losses | 881,627 | 775,843 | ||||||
| Inventories | 402,776 | 430,517 | ||||||
| Prepaid expenses and other current assets | 159,167 | 124,268 | ||||||
| Total current assets | 1,456,641 | 1,344,256 | ||||||
| Property and equipment, net of accumulated depreciation of $368,089 and $296,039 at December 31, 2023 and 2022, respectively | 245,908 | 229,081 | ||||||
| Goodwill | 2,608,412 | 2,576,081 | ||||||
| Intangible assets, net of accumulated amortization | 881,476 | 975,862 | ||||||
| Operating lease right-of-use assets, net | 267,446 | 246,194 | ||||||
| Other assets | 72,838 | 69,664 | ||||||
| Total assets | $ | 5,532,721 | $ | 5,441,138 | ||||
| Liabilities, Redeemable Noncontrolling Interests, and Equity | ||||||||
| Current liabilities: | ||||||||
| Trade accounts payable | $ | 641,607 | $ | 526,916 | ||||
| Accrued expenses | 492,363 | 297,737 | ||||||
| Current portion of obligations under operating leases | 71,053 | 67,230 | ||||||
| Current portion of obligations under financing leases | 11,141 | 10,218 | ||||||
| Current portion of long-term debt | 32,273 | 30,407 | ||||||
| Total current liabilities | 1,248,437 | 932,508 | ||||||
| Obligations under operating leases, net of current portion | 201,655 | 184,609 | ||||||
| Obligations under financing leases, net of current portion | 22,528 | 20,303 | ||||||
| Long-term debt, net of current portion | 3,331,941 | 3,364,302 | ||||||
| Deferred income taxes, net | 23,668 | 79,391 | ||||||
| Long-term liabilities | 91,943 | 75,943 | ||||||
| Total liabilities | 4,920,172 | 4,657,056 | ||||||
| Redeemable noncontrolling interests | 27,139 | 29,306 | ||||||
| Shareholders equity: | ||||||||
| Common stock, $0.01 par value, 137,398,625 shares authorized, 117,857,055 and 117,860,839 shares issued and outstanding at December 31, 2023 and 2022, respectively | 1,179 | 1,179 | ||||||
| Additional paid-in capital | 771,336 | 778,121 | ||||||
| Accumulated deficit | (200,319 | ) | (45,716 | ) | ||||
| Accumulated other comprehensive income | 12,544 | 21,192 | ||||||
| Total shareholders equity | 584,740 | 754,776 | ||||||
| Noncontrolling interest | 670 | |||||||
| Total equity | 585,410 | 754,776 | ||||||
| Total liabilities, redeemable noncontrolling interests, and equity | $ | 5,532,721 | $ | 5,441,138 |
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2023 and 2022
(In thousands, except per share amounts)
| For the Year Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues: | ||||||||
| Products | $ | 6,522,450 | $ | 5,264,423 | ||||
| Services | 2,303,725 | 2,456,137 | ||||||
| Total revenues | 8,826,175 | 7,720,560 | ||||||
| Cost of goods | 5,840,716 | 4,635,404 | ||||||
| Cost of services | 1,551,665 | 1,730,912 | ||||||
| Gross profit | 1,433,794 | 1,354,244 | ||||||
| Selling, general and administrative expenses | 1,286,614 | 1,125,558 | ||||||
| Goodwill impairment loss | 40,856 | |||||||
| Operating income | 147,180 | 187,830 | ||||||
| Interest expense, net | 324,593 | 233,584 | ||||||
| Loss before income taxes | (177,413 | ) | (45,754 | ) | ||||
| Income tax (benefit) expense | (20,578 | ) | 8,465 | |||||
| Net loss | (156,835 | ) | (54,219 | ) | ||||
| Net loss attributable to noncontrolling interests | (2,232 | ) | (312 | ) | ||||
| Net loss attributable to BrightSpring Health Services, Inc. and subsidiaries | $ | (154,603 | ) | $ | (53,907 | ) | ||
| Net loss per common share attributable to BrightSpring Health Services, Inc. and subsidiaries: | ||||||||
| Loss per share - basic: | $ | (1.31 | ) | $ | (0.46 | ) | ||
| Loss per share - diluted: | $ | (1.31 | ) | $ | (0.46 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic | 117,868 | 117,840 | ||||||
| Diluted | 117,868 | 117,840 |
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended December 31, 2023 and 2022
(In thousands, except per share amounts)
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues: | ||||||||
| Products | $ | 1,785,457 | $ | 1,379,092 | ||||
| Services | 589,087 | 591,544 | ||||||
| Total revenues | 2,374,544 | 1,970,636 | ||||||
| Cost of goods | 1,614,641 | 1,218,697 | ||||||
| Cost of services | 391,188 | 414,294 | ||||||
| Gross profit | 368,715 | 337,645 | ||||||
| Selling, general and administrative expenses | 300,453 | 288,623 | ||||||
| Goodwill impairment loss | 25,456 | |||||||
| Operating income | 68,262 | 23,566 | ||||||
| Interest expense, net | 83,054 | 75,719 | ||||||
| Loss before income taxes | (14,792 | ) | (52,153 | ) | ||||
| Income tax (benefit) expense | (7,591 | ) | 4,530 | |||||
| Net loss | (7,201 | ) | (56,683 | ) | ||||
| Net loss attributable to noncontrolling interests | (664 | ) | (525 | ) | ||||
| Net loss attributable to BrightSpring Health Services, Inc. and subsidiaries | $ | (6,537 | ) | $ | (56,158 | ) | ||
| Net loss per common share attributable to BrightSpring Health Services, Inc. and subsidiaries: | ||||||||
| Loss per share - basic: | $ | (0.06 | ) | $ | (0.48 | ) | ||
| Loss per share - diluted: | $ | (0.06 | ) | $ | (0.48 | ) | ||
| Weighted average shares outstanding: | ||||||||
| Basic | 117,857 | 117,858 | ||||||
| Diluted | 117,857 | 117,858 |
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023 and 2022
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (156,835 | ) | $ | (54,219 | ) | ||
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 202,336 | 203,970 | ||||||
| Impairment of long-lived assets | 10,631 | 10,821 | ||||||
| Goodwill impairment | 40,856 | |||||||
| Provision for credit losses | 23,237 | 15,065 | ||||||
| Amortization of deferred debt issuance costs | 20,916 | 20,439 | ||||||
| Share-based compensation | 3,917 | 3,547 | ||||||
| Deferred income taxes, net | (52,632 | ) | (27,962 | ) | ||||
| Loss on divestiture | 5,502 | |||||||
| Loss (gain) on disposition of fixed assets | 349 | (903 | ) | |||||
| Other | (572 | ) | 2,696 | |||||
| Change in operating assets and liabilities, net of acquisitions and dispositions: | ||||||||
| Accounts receivable | (127,246 | ) | (150,466 | ) | ||||
| Prepaid expenses and other current assets | (34,899 | ) | (24,280 | ) | ||||
| Inventories | 28,660 | (131,833 | ) | |||||
| Trade accounts payable | 105,649 | 133,466 | ||||||
| Accrued expenses | 193,633 | (46,035 | ) | |||||
| Other assets and liabilities | (6,361 | ) | (5,317 | ) | ||||
| Net cash provided by (used in) operating activities | $ | 210,783 | $ | (4,653 | ) |
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the years ended December 31, 2023 and 2022
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Investing activities: | ||||||||
| Purchases of property and equipment | $ | (73,527 | ) | $ | (70,113 | ) | ||
| Acquisitions of businesses, net of cash acquired | (63,058 | ) | (42,459 | ) | ||||
| Proceeds from sale of business, net of cash divested | 155,793 | |||||||
| Other | 2,152 | 2,135 | ||||||
| Net cash (used in) provided by investing activities | $ | (134,433 | ) | $ | 45,356 | |||
| Financing activities: | ||||||||
| Long-term debt repayments | (30,441 | ) | (40,721 | ) | ||||
| Repayments of swingline debt, net | (24,100 | ) | (17,300 | ) | ||||
| Repurchase of shares of common stock | (650 | ) | ||||||
| Shares issued under share-based compensation plan, including tax effects | 598 | 234 | ||||||
| Repurchase of stock options | (10,000 | ) | ||||||
| Payment of acquisition earn-outs | (1,453 | ) | (4,364 | ) | ||||
| Distributions to redeemable noncontrolling interests | (750 | ) | ||||||
| Investment in noncontrolling interests | 735 | |||||||
| Payment of financing lease obligations | (11,596 | ) | (10,909 | ) | ||||
| Net cash used in financing activities | $ | (76,907 | ) | $ | (73,810 | ) | ||
| Net decrease in cash and cash equivalents | (557 | ) | (33,107 | ) | ||||
| Cash and cash equivalents at beginning of year | 13,628 | 46,735 | ||||||
| Cash and cash equivalents at end of year | $ | 13,071 | $ | 13,628 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | 303,530 | $ | 213,308 | ||||
| Income taxes, net of refunds | $ | 37,499 | $ | 28,851 | ||||
| Supplemental schedule of non-cash investing and financing activitites: | ||||||||
| Notes issued and contingent liabilitites assumed in connection with acquisitions | $ | 7,519 | $ | 5,134 | ||||
| Financing lease obligations | $ | 11,562 | $ | 10,652 | ||||
| Repurchases of common stock in accounts payable | $ | 650 | $ | |||||
| Purchases of property and equipment in accounts payable | $ | 12,981 | $ | 4,597 | ||||
| Acquisition consideration in accounts payable | $ | 2,500 | $ |
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
For the years and quarters ended December 31, 2023 and 2022
following table reconciles net loss to EBITDA and Adjusted EBITDA:
| ($ in thousands) | Year Ended | Quarter Ended | ||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net loss | $ | (156,835 | ) | $ | (54,219 | ) | $ | (7,201 | ) | $ | (56,683 | ) | ||||
| Income tax (benefit) expense | (20,578 | ) | 8,465 | (7,591 | ) | 4,530 | ||||||||||
| Interest expense, net | 324,593 | 233,584 | 83,054 | 75,719 | ||||||||||||
| Depreciation and amortization | 202,336 | 203,970 | 51,012 | 53,311 | ||||||||||||
| EBITDA | $ | 349,516 | $ | 391,800 | $ | 119,274 | $ | 76,877 | ||||||||
| Non-cash share-based compensation | 3,917 | 3,547 | 1,817 | 1,297 | ||||||||||||
| Acquisition, integration, and transaction-related costs | 20,734 | 38,023 | 6,980 | 21,249 | ||||||||||||
| Restructuring and divestiture-related and other costs | 21,848 | 29,320 | 5,676 | 6,834 | ||||||||||||
| Goodwill impairment | 40,856 | 25,456 | ||||||||||||||
| Legal costs and settlements | 127,695 | 9,157 | 5,989 | 3,520 | ||||||||||||
| Significant projects | 8,379 | 3,570 | 1,480 | 1,477 | ||||||||||||
| Management fee | 5,631 | 4,922 | 1,383 | 1,433 | ||||||||||||
| Unreimbursed COVID-19 related costs | 88 | 1,348 | 951 | |||||||||||||
| Total adjustments | $ | 188,292 | $ | 130,743 | $ | 23,325 | $ | 62,217 | ||||||||
| Adjusted EBITDA | $ | 537,808 | $ | 522,543 | $ | 142,599 | $ | 139,094 | ||||||||
| Revenue | 8,826,175 | 7,720,560 | 2,374,544 | 1,970,636 | ||||||||||||
| Adjusted EBITDA Margin | 6.1 | % | 6.8 | % | 6.0 | % | 7.1 | % |