(Mark One) | |||||
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
OR | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to |
(State of incorporation) | (I.R.S. Employer Identification No.) | ||||||||||||||||
| | ||||||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Page Number | ||||||||
PART I | ||||||||
PART II | ||||||||
(unaudited) | |||||||||||
June 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
CURRENT ASSETS: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable, net | |||||||||||
Inventories | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
NONCURRENT ASSETS: | |||||||||||
Property and equipment, net | |||||||||||
Operating lease right-of-use asset | |||||||||||
Intangible assets, net | |||||||||||
Referral sources | |||||||||||
Goodwill | |||||||||||
Deferred income taxes | |||||||||||
Other noncurrent assets | |||||||||||
Total noncurrent assets | |||||||||||
TOTAL ASSETS | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
CURRENT LIABILITIES: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued compensation and employee benefits | |||||||||||
Accrued expenses and other current liabilities | |||||||||||
Current portion of operating lease liability | |||||||||||
Current portion of long-term debt | |||||||||||
Total current liabilities | |||||||||||
NONCURRENT LIABILITIES: | |||||||||||
Long-term debt, net of discount, deferred financing costs and current portion | |||||||||||
Operating lease liability, net of current portion | |||||||||||
Other noncurrent liabilities | |||||||||||
Total noncurrent liabilities | |||||||||||
Total liabilities | |||||||||||
STOCKHOLDERS’ EQUITY: | |||||||||||
Preferred stock; $ | |||||||||||
Common stock; $ | |||||||||||
Treasury stock; | ( | ( | |||||||||
Paid-in capital | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive income (loss) | ( | ||||||||||
Total stockholders’ equity | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
NET REVENUE | $ | $ | $ | $ | |||||||||||||||||||
COST OF REVENUE | |||||||||||||||||||||||
GROSS PROFIT | |||||||||||||||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Depreciation and amortization expense | |||||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
OPERATING INCOME | |||||||||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Equity in earnings of joint ventures | |||||||||||||||||||||||
Other, net | ( | ||||||||||||||||||||||
Total other expense | ( | ( | ( | ( | |||||||||||||||||||
INCOME BEFORE INCOME TAXES | |||||||||||||||||||||||
INCOME TAX EXPENSE | |||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | |||||||||||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX: | |||||||||||||||||||||||
Change in unrealized gains on cash flow hedges, net of income tax expense of $ | |||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME | |||||||||||||||||||||||
NET COMPREHENSIVE INCOME | $ | $ | $ | $ | |||||||||||||||||||
EARNINGS PER COMMON SHARE: | |||||||||||||||||||||||
Earnings per share, basic | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share, diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average common shares outstanding, basic | |||||||||||||||||||||||
Weighted average common shares outstanding, diluted |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Depreciation and amortization expense | |||||||||||
Non-cash operating lease costs | |||||||||||
Deferred income taxes - net | |||||||||||
Loss on extinguishment of debt | |||||||||||
Amortization of deferred financing costs | |||||||||||
Equity in earnings of joint ventures | ( | ( | |||||||||
Stock-based incentive compensation expense | |||||||||||
Capital distribution from equity method investments | |||||||||||
Other adjustments | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable, net | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other current assets | ( | ||||||||||
Accounts payable | |||||||||||
Accrued compensation and employee benefits | ( | ( | |||||||||
Accrued expenses and other current liabilities | |||||||||||
Operating lease liabilities | ( | ( | |||||||||
Other noncurrent assets and liabilities | ( | ||||||||||
Net cash provided by operating activities | |||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||||
Acquisition of property and equipment | ( | ( | |||||||||
Business acquisitions, net of cash acquired | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||||
Exercise of stock options, vesting of restricted stock, and related tax withholdings | ( | ||||||||||
Proceeds from warrant exercises | |||||||||||
Proceeds from issuance of debt | |||||||||||
Repayments of debt | ( | ( | |||||||||
Retirement of debt | ( | ||||||||||
Deferred financing costs | ( | ||||||||||
Debt prepayment fees | ( | ||||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
NET INCREASE IN CASH AND CASH EQUIVALENTS | |||||||||||
Cash and cash equivalents - beginning of the period | |||||||||||
CASH AND CASH EQUIVALENTS - END OF PERIOD | $ | $ | |||||||||
Supplemental disclosure of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Cash paid for income taxes | $ | $ | |||||||||
Cash paid for operating leases | $ | $ |
Preferred Stock | Common Stock | Treasury Stock | Paid-in Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive (Loss) Income | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||
Balance - December 31, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Exercise of stock options, vesting of restricted stock, and related tax withholdings | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based incentive compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance - March 31, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Exercise of stock options, vesting of restricted stock, and related tax withholdings | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Stock-based incentive compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance at June 30, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Balance - December 31, 2021 | $ | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Exercise of stock options, vesting of restricted stock, and related tax withholdings | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based incentive compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance - March 31, 2022 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Exercise of stock options, vesting of restricted stock, and related tax withholdings | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Exercise of warrants | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Stock-based incentive compensation | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Balance - June 30, 2022 | $ | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Amount | ||||||||
Accounts receivable | $ | |||||||
Inventories | ||||||||
Intangible assets | ||||||||
Other assets | ||||||||
Accounts payable | ( | |||||||
Other assumed liabilities | ( | |||||||
Fair value Identifiable assets and liabilities | ||||||||
Goodwill (1) | ||||||||
Purchase Price | $ |
Amount | ||||||||
Accounts receivable | $ | |||||||
Intangible assets | ||||||||
Other assets | ||||||||
Accrued compensation | ( | |||||||
Accounts payable and other liabilities | ( | |||||||
Fair value identifiable assets and liabilities | ||||||||
Goodwill (1) | ||||||||
Cash acquired | ||||||||
Purchase Price | ||||||||
Less: cash acquired | ( | |||||||
Purchase price, net of cash acquired | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Commercial payers | $ | $ | $ | $ | |||||||||||||||||||
Government payers | |||||||||||||||||||||||
Patients | |||||||||||||||||||||||
Net revenue | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Earnings per common share, basic | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted average number of common shares outstanding | |||||||||||||||||||||||
Effect of dilutive securities | |||||||||||||||||||||||
Weighted average number of common shares outstanding, diluted | |||||||||||||||||||||||
Earnings per common share: | |||||||||||||||||||||||
Earnings per common share, diluted | $ | $ | $ | $ |
Fiscal Year Ended December 31, | Minimum Payments | |||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total lease payments | $ | |||||||
Less: Interest | ( | |||||||
Present value of lease liabilities | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Infusion pumps | $ | $ | |||||||||
Equipment, furniture and other | |||||||||||
Leasehold improvements | |||||||||||
Computer software, purchased and internally developed | |||||||||||
Assets under development | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||
Depreciation expense in cost of revenue | $ | $ | $ | $ | ||||||||||||||||||||||
Depreciation expense in operating expenses | ||||||||||||||||||||||||||
Total depreciation expense | $ | $ | $ | $ |
Balance at December 31, 2021 | $ | |||||||
Purchase accounting adjustments | ||||||||
Balance at March 31, 2022 | ||||||||
Acquisitions | ||||||||
Balance at June 30, 2022 | $ |
June 30, 2022 | December 31, 2021 | |||||||||||||
Gross intangible assets: | ||||||||||||||
Referral sources | $ | $ | ||||||||||||
Trademarks/names | ||||||||||||||
Other amortizable intangible assets | ||||||||||||||
Total gross intangible assets | ||||||||||||||
Accumulated amortization: | ||||||||||||||
Referral sources | ( | ( | ||||||||||||
Trademarks/names | ( | ( | ||||||||||||
Other amortizable intangible assets | ( | ( | ||||||||||||
Total accumulated amortization | ( | ( | ||||||||||||
Total intangible assets, net | $ | $ |
Principal Amount | Discount | Debt Issuance Costs | Net Balance | |||||||||||||||||||||||
Asset-based-lending (“ABL”) facility | $ | $ | $ | $ | ||||||||||||||||||||||
First Lien Term Loan | ( | ( | ||||||||||||||||||||||||
Senior Notes | ( | |||||||||||||||||||||||||
$ | $ | ( | $ | ( | ||||||||||||||||||||||
Less: current portion | ( | |||||||||||||||||||||||||
Total long-term debt | $ |
Principal Amount | Discount | Debt Issuance Costs | Net Balance | |||||||||||||||||||||||
ABL facility | $ | $ | $ | $ | ||||||||||||||||||||||
First Lien Term Loan | ( | ( | ||||||||||||||||||||||||
Senior Notes | ( | |||||||||||||||||||||||||
$ | $ | ( | $ | ( | ||||||||||||||||||||||
Less: current portion | ( | |||||||||||||||||||||||||
Total long-term debt | $ |
Fiscal Year Ended December 31, | Minimum Payments | |||||||
2022 | $ | |||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
Thereafter | ||||||||
Total | $ |
Financial Instrument | Carrying Value as of June 30, 2022 | Markets for Identical Item (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
First Lien Term Loan | $ | $ | $ | $ | ||||||||||||||||||||||
Senior Notes | ||||||||||||||||||||||||||
Total debt instruments | $ | $ | $ | $ |
Fair value - Derivatives in asset position | ||||||||||||||||||||
Derivative | Balance Sheet Caption | June 30, 2022 | December 31, 2021 | |||||||||||||||||
Interest rate cap designated as cash flow hedge | Prepaid expenses and other current assets | $ | $ | |||||||||||||||||
Interest rate cap designated as cash flow hedge | Other noncurrent assets |
Fair value - Derivatives in liability position | ||||||||||||||||||||
Derivative | Balance Sheet Caption | June 30, 2022 | December 31, 2021 | |||||||||||||||||
Interest rate cap designated as cash flow hedge | Accrued expenses and other current liabilities | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
Derivative | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||
Interest rate cap designated as cash flow hedge | $ | $ | $ | $ | ||||||||||||||||||||||
Interest rate swaps designated as cash flow hedges | ||||||||||||||||||||||||||
$ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||||||||
Derivative | Income Statement Caption | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||
Interest rate cap designated as cash flow hedge | Interest expense | $ | $ | $ | $ | |||||||||||||||||||||||||||
Interest rate swaps designated as cash flow hedges | Interest expense | ( | $ | $ | ( | |||||||||||||||||||||||||||
Interest rate swaps not designated as hedges | Interest expense | ( | ( | |||||||||||||||||||||||||||||
$ | $ | ( | $ | $ | ( |
For the three months ended | For the six months ended | ||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||||||||||||||||||||||||
Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | Amount | % of Revenue | ||||||||||||||||||||||||||||||||||||||||
NET REVENUE | $ | 980,820 | 100.0 | % | $ | 860,272 | 100.0 | % | $ | 1,896,604 | 100.0 | % | $ | 1,619,509 | 100.0 | % | |||||||||||||||||||||||||||||||
COST OF REVENUE | 763,920 | 77.9 | % | 661,304 | 76.9 | % | 1,478,768 | 78.0 | % | 1,255,068 | 77.5 | % | |||||||||||||||||||||||||||||||||||
GROSS PROFIT | 216,900 | 22.1 | % | 198,968 | 23.1 | % | 417,836 | 22.0 | % | 364,441 | 22.5 | % | |||||||||||||||||||||||||||||||||||
OPERATING COSTS AND EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 141,787 | 14.5 | % | 134,257 | 15.6 | % | 275,756 | 14.5 | % | 254,297 | 15.7 | % | |||||||||||||||||||||||||||||||||||
Depreciation and amortization expense | 16,037 | 1.6 | % | 16,619 | 1.9 | % | 30,759 | 1.6 | % | 32,958 | 2.0 | % | |||||||||||||||||||||||||||||||||||
Total operating expenses | 157,824 | 16.1 | % | 150,876 | 17.5 | % | 306,515 | 16.2 | % | 287,255 | 17.7 | % | |||||||||||||||||||||||||||||||||||
OPERATING INCOME | 59,076 | 6.0 | % | 48,092 | 5.6 | % | 111,321 | 5.9 | % | 77,186 | 4.8 | % | |||||||||||||||||||||||||||||||||||
OTHER INCOME (EXPENSE): | |||||||||||||||||||||||||||||||||||||||||||||||
Interest expense, net | (12,765) | (1.3) | % | (17,236) | (2.0) | % | (25,011) | (1.3) | % | (36,717) | (2.3) | % | |||||||||||||||||||||||||||||||||||
Equity in earnings of joint ventures | 1,326 | 0.1 | % | 1,686 | 0.2 | % | 2,593 | 0.1 | % | 2,891 | 0.2 | % | |||||||||||||||||||||||||||||||||||
Other, net | 1 | — | % | 5 | — | % | 3 | — | % | (12,396) | (0.8) | % | |||||||||||||||||||||||||||||||||||
Total other expense | (11,438) | (1.2) | % | (15,545) | (1.8) | % | (22,415) | (1.2) | % | (46,222) | (2.9) | % | |||||||||||||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | 47,638 | 4.9 | % | 32,547 | 3.8 | % | 88,906 | 4.7 | % | 30,964 | 1.9 | % | |||||||||||||||||||||||||||||||||||
INCOME TAX EXPENSE | 13,709 | 1.4 | % | 731 | 0.1 | % | 24,702 | 1.3 | % | 2,009 | 0.1 | % | |||||||||||||||||||||||||||||||||||
NET INCOME | $ | 33,929 | 3.5 | % | $ | 31,816 | 3.7 | % | $ | 64,204 | 3.4 | % | $ | 28,955 | 1.8 | % | |||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME, NET OF TAX: | |||||||||||||||||||||||||||||||||||||||||||||||
Change in unrealized gains on cash flow hedges, net of income tax expense of $756, $0, $4,519, and $0, respectively | $ | 4,637 | 0.5 | % | $ | 4,199 | 0.5 | % | $ | 15,707 | 0.8 | % | $ | 8,280 | 0.5 | % | |||||||||||||||||||||||||||||||
OTHER COMPREHENSIVE INCOME | $ | 4,637 | 0.5 | % | $ | 4,199 | 0.5 | % | $ | 15,707 | 0.8 | % | $ | 8,280 | 0.5 | % | |||||||||||||||||||||||||||||||
NET COMPREHENSIVE INCOME | $ | 38,566 | 3.9 | % | $ | 36,015 | 4.2 | % | $ | 79,911 | 4.2 | % | $ | 37,235 | 2.3 | % | |||||||||||||||||||||||||||||||
For the three months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Net revenue | $ | 980,820 | $ | 860,272 | $ | 120,548 | 14.0 | % | |||||||||||||||
Cost of revenue | 763,920 | 661,304 | 102,616 | 15.5 | % | ||||||||||||||||||
Gross profit | $ | 216,900 | $ | 198,968 | $ | 17,932 | 9.0 | % | |||||||||||||||
Gross profit margin | 22.1 | % | 23.1 | % |
For the three months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Selling, general and administrative expenses | $ | 141,787 | $ | 134,257 | $ | 7,530 | 5.6 | % | |||||||||||||||
Depreciation and amortization expense | 16,037 | 16,619 | (582) | (3.5) | % | ||||||||||||||||||
Total operating expenses | $ | 157,824 | $ | 150,876 | $ | 6,948 | 4.6 | % |
For the three months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Interest expense, net | $ | (12,765) | $ | (17,236) | $ | 4,471 | (25.9) | % | |||||||||||||||
Equity in earnings of joint ventures | 1,326 | 1,686 | (360) | (21.4) | % | ||||||||||||||||||
Other, net | 1 | 5 | (4) | (80.0) | % | ||||||||||||||||||
Total other expense | $ | (11,438) | $ | (15,545) | $ | 4,107 | (26.4) | % |
For the three months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Income tax expense | $ | 13,709 | $ | 731 | $ | 12,978 | 1,775.4 | % |
For the three months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Net income | $ | 33,929 | $ | 31,816 | $ | 2,113 | 6.6 | % | |||||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||||
Changes in unrealized gains on cash flow hedges, net of income taxes | 4,637 | 4,199 | 438 | 10.4 | % | ||||||||||||||||||
Other comprehensive income | $ | 4,637 | 4,199 | 438 | 10.4 | % | |||||||||||||||||
Net comprehensive income | $ | 38,566 | $ | 36,015 | $ | 2,551 | 7.1 | % |
For the six months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Net revenue | $ | 1,896,604 | $ | 1,619,509 | $ | 277,095 | 17.1 | % | |||||||||||||||
Cost of revenue | 1,478,768 | 1,255,068 | 223,700 | 17.8 | % | ||||||||||||||||||
Gross profit | $ | 417,836 | $ | 364,441 | $ | 53,395 | 14.7 | % | |||||||||||||||
Gross profit margin | 22.0 | % | 22.5 | % |
For the six months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Selling, general and administrative expenses | $ | 275,756 | $ | 254,297 | $ | 21,459 | 8.4 | % | |||||||||||||||
Depreciation and amortization expense | 30,759 | 32,958 | (2,199) | (6.7) | % | ||||||||||||||||||
Total operating expenses | $ | 306,515 | $ | 287,255 | $ | 19,260 | 6.7 | % |
For the six months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Interest expense, net | $ | (25,011) | $ | (36,717) | $ | 11,706 | (31.9) | % | |||||||||||||||
Equity in earnings of joint ventures | 2,593 | 2,891 | (298) | (10.3) | % | ||||||||||||||||||
Other, net | 3 | (12,396) | 12,399 | (100.0) | % | ||||||||||||||||||
Total other expense | $ | (22,415) | $ | (46,222) | $ | 23,807 | (51.5) | % |
For the six months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Income tax expense | $ | 24,702 | $ | 2,009 | $ | 22,693 | 1,129.6 | % |
For the six months ended | |||||||||||||||||||||||
June 30, 2022 | June 30, 2021 | ||||||||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||||||||
(in thousands, except for percentages) | |||||||||||||||||||||||
Net income | $ | 64,204 | $ | 28,955 | $ | 35,249 | 121.7 | % | |||||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||||
Changes in unrealized gains on cash flow hedges, net of income taxes | 15,707 | 8,280 | 7,427 | 89.7 | % | ||||||||||||||||||
Other comprehensive income | $ | 15,707 | 8,280 | 7,427 | 89.7 | % | |||||||||||||||||
Net comprehensive income | $ | 79,911 | $ | 37,235 | $ | 42,676 | 114.6 | % |
Six Months Ended June 30, | |||||||||||||||||
2022 | 2021 | ||||||||||||||||
(unaudited) | (unaudited) | Variance | |||||||||||||||
(in thousands) | |||||||||||||||||
Net cash provided by operating activities | $ | 136,954 | $ | 92,034 | $ | 44,920 | |||||||||||
Net cash used in investing activities | (69,952) | (25,660) | (44,292) | ||||||||||||||
Net cash provided by (used in) financing activities | 17,621 | (8,113) | 25,734 | ||||||||||||||
Net increase in cash and cash equivalents | 84,623 | 58,261 | 26,362 | ||||||||||||||
Cash and cash equivalents - beginning of period | 119,423 | 99,265 | 20,158 | ||||||||||||||
Cash and cash equivalents - end of period | $ | 204,046 | $ | 157,526 | $ | 46,520 |
Exhibit Number | Description | ||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
101.INS | XBRL Instance Document | ||||
101.SCH | XBRL Taxonomy Extension Schema Document | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
101.LAB | XBRL Taxonomy Extension Labels Linkbase Document | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104 | XBRL Formatted Cover Page |
OPTION CARE HEALTH, INC. | |||||
Date: July 27, 2022 | /s/ Michael Shapiro | ||||
Michael Shapiro | |||||
Chief Financial Officer (Principal Financial Officer and Duly Authorized Officer) |
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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 12,500,000 | 12,500,000 |
Preferred stock, shares, outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares, issued (in shares) | 182,213,292 | 180,309,637 |
Common stock, shares, outstanding (in shares) | 181,829,570 | 179,925,915 |
Treasury stock, at cost (in shares) | 383,722 | 383,722 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Statement [Abstract] | ||||
NET REVENUE | $ 980,820 | $ 860,272 | $ 1,896,604 | $ 1,619,509 |
COST OF REVENUE | 763,920 | 661,304 | 1,478,768 | 1,255,068 |
GROSS PROFIT | 216,900 | 198,968 | 417,836 | 364,441 |
OPERATING COSTS AND EXPENSES: | ||||
Selling, general and administrative expenses | 141,787 | 134,257 | 275,756 | 254,297 |
Depreciation and amortization expense | 16,037 | 16,619 | 30,759 | 32,958 |
Total operating expenses | 157,824 | 150,876 | 306,515 | 287,255 |
OPERATING INCOME | 59,076 | 48,092 | 111,321 | 77,186 |
OTHER INCOME (EXPENSE): | ||||
Interest expense, net | (12,765) | (17,236) | (25,011) | (36,717) |
Equity in earnings of joint ventures | 1,326 | 1,686 | 2,593 | 2,891 |
Other, net | 1 | 5 | 3 | (12,396) |
Total other expense | (11,438) | (15,545) | (22,415) | (46,222) |
INCOME BEFORE INCOME TAXES | 47,638 | 32,547 | 88,906 | 30,964 |
INCOME TAX EXPENSE | 13,709 | 731 | 24,702 | 2,009 |
NET INCOME | 33,929 | 31,816 | 64,204 | 28,955 |
OTHER COMPREHENSIVE INCOME, NET OF TAX: | ||||
Change in unrealized gains on cash flow hedges, net of income tax expense of $756, $0, $4,519, and $0, respectively | 4,637 | 4,199 | 15,707 | 8,280 |
OTHER COMPREHENSIVE INCOME | 4,637 | 4,199 | 15,707 | 8,280 |
NET COMPREHENSIVE INCOME | $ 38,566 | $ 36,015 | $ 79,911 | $ 37,235 |
EARNINGS PER COMMON SHARE: | ||||
Earnings per share, basic (in dollars per share) | $ 0.19 | $ 0.18 | $ 0.36 | $ 0.16 |
Earnings per share, diluted (in dollars per share) | $ 0.19 | $ 0.18 | $ 0.35 | $ 0.16 |
Weighted average common shares outstanding, basic (in shares) | 180,621 | 179,843 | 180,293 | 179,826 |
Weighted average common shares outstanding, diluted (in shares) | 181,618 | 181,037 | 181,176 | 180,975 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Statement [Abstract] | ||||
Unrealized gains (losses) on cash flow hedges, net of income tax expense | $ 756 | $ 0 | $ 4,519 | $ 0 |
NATURE OF OPERATIONS AND PRESENTATION OF FINANCIAL STATEMENTS |
6 Months Ended |
---|---|
Jun. 30, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations and Presentation of Financial Statements | NATURE OF OPERATIONS AND PRESENTATION OF FINANCIAL STATEMENTS Corporate Organization and Business — HC Group Holdings II, Inc. (“HC II”) was incorporated under the laws of the State of Delaware on January 7, 2015, with its sole shareholder being HC Group Holdings I, LLC (“HC I”). On April 7, 2015, HC I and HC II collectively acquired Walgreens Infusion Services, Inc. and its subsidiaries from Walgreen Co., and the business was rebranded as Option Care (“Option Care”). On March 14, 2019, HC I and HC II entered into a definitive agreement (the “Merger Agreement”) to merge with and into a wholly-owned subsidiary of BioScrip, Inc. (“BioScrip”), a national provider of infusion and home care management solutions, along with certain other subsidiaries of BioScrip and HC II. The merger contemplated by the Merger Agreement (the “Merger”) was completed on August 6, 2019 (the “Merger Date”). The Merger was accounted for as a reverse merger under the acquisition method of accounting for business combinations with Option Care being considered the accounting acquirer and BioScrip being considered the legal acquirer. Following the close of the transaction, BioScrip was rebranded as Option Care Health, Inc. (“Option Care Health”, or the “Company”). The combined Company’s stock is listed on the Nasdaq Global Select Market as of June 30, 2022. HC I holds approximately 20.5% of the common stock of the Company. Option Care Health, and its wholly-owned subsidiaries, provides infusion therapy and other ancillary health care services through a national network of 97 full service pharmacies and 60 stand-alone infusion suites. The Company contracts with managed care organizations, third-party payers, hospitals, physicians, and other referral sources to provide pharmaceuticals and complex compounded solutions to patients for intravenous delivery in the patients’ homes or other nonhospital settings. The Company operates in one segment, infusion services. Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States and contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for interim financial reporting. The results of operations for the interim periods presented are not necessarily indicative of the results of operations for the entire year. These unaudited condensed consolidated financial statements do not include all of the information and notes to the financial statements required by GAAP for complete financial statements and should be read in conjunction with the 2021 audited consolidated financial statements, including the notes thereto, as presented in our Form 10-K. Principles of Consolidation — The Company’s unaudited condensed consolidated financial statements include the accounts of Option Care Health, Inc. and its subsidiaries. All intercompany transactions and balances are eliminated in consolidation. The Company has investments in companies that are 50% owned and are accounted for as equity-method investments. The Company’s share of earnings from equity-method investments is included in the line entitled “Equity in earnings of joint ventures” in the unaudited condensed consolidated statements of comprehensive income. See Equity-Method Investments within Note 2, Summary of Significant Accounting Policies, for further discussion of the Company’s equity-method investments.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. Prepaid expenses and other current assets — Included in prepaid expenses and other current assets are rebates receivable from pharmaceutical and medical supply manufacturers of $47.0 million and $43.0 million as of June 30, 2022 and December 31, 2021, respectively. There were no other items included in prepaid expenses and other current assets that comprised 5% or more of total current assets. Equity Method Investments — The Company’s investments in certain unconsolidated entities are accounted for under the equity method. The balance of these investments is included in other noncurrent assets in the accompanying condensed consolidated balance sheets. As of June 30, 2022 and December 31, 2021, the balance of the investments were $21.7 million and $20.1 million, respectively. The balance of these investments is increased to reflect the Company’s capital contributions and equity in earnings of the investees. The balance of these investments is decreased to reflect the Company’s equity in losses of the investees and for distributions received that are not in excess of the carrying amount of the investments. The Company’s proportionate share of earnings or losses of the investees is recorded in equity in earnings of joint ventures in the accompanying unaudited condensed consolidated statements of comprehensive income. The Company’s proportionate share of earnings was $1.3 million and $2.6 million for the three and six months ended June 30, 2022, respectively. The Company’s proportionate share of earnings was $1.7 million and $2.9 million for the three and six months ended June 30, 2021, respectively. See Footnote 16, Related-Party Transactions, for discussion of related-party transactions with these investees. Concentrations of Business Risk — The Company generates revenue from managed care contracts and other agreements with commercial third-party payers. Revenue related to the Company’s largest payer was approximately 15% and 15%, respectively, for the three and six months ended June 30, 2022. Revenue related to the Company’s largest payer was approximately 16% and 16% for the three and six months ended June 30, 2021. There were no other managed care contracts that represent greater than 10% of revenue for the periods presented. For the three and six months ended June 30, 2022, approximately 12% and 12%, respectively, of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. For the three and six months ended June 30, 2021, approximately 12% and 12%, respectively of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. As of June 30, 2022 and December 31, 2021, approximately 11% and 11%, respectively, of the Company’s accounts receivable was related to these programs. Governmental programs pay for services based on fee schedules and rates that are determined by the related governmental agency. Laws and regulations pertaining to government programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change in the near term. The Company does not require its patients nor other payers to carry collateral for any amounts owed for goods or services provided. Other than as discussed above, concentration of credit risk relating to trade accounts receivable is limited due to the Company’s diversity of patients and payers. Further, the Company generally does not provide charity care; however, Option Care Health offers a financial assistance program for patients that meet certain defined hardship criteria. For the three and six months ended June 30, 2022, approximately 72% and 73%, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors. For the three and six months ended June 30, 2021 approximately 64% and 65%, respectively, 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. However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or operating results. Although there remains some uncertainty regarding the COVID-19 pandemic, as of June 30, 2022 the Company has been able to maintain adequate levels of supplies and pharmaceuticals to support its operations.
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BUSINESS COMBINATIONS AND ASSET ACQUISITIONS |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations and Asset Acquisitions | BUSINESS COMBINATIONS AND ASSET ACQUISITIONS Infinity Infusion Nursing LLC — In October 2021, pursuant to the equity purchase agreement dated October 1, 2021, the Company completed the acquisition of 100% of the equity interests in Infinity Infusion Nursing, LLC for a purchase price, net of cash acquired, of $59.6 million. The Company has finalized the purchase price allocation of the acquisition and no purchase accounting adjustments were made. Wasatch Infusion LLC Acquisition — In December 2021, pursuant to the executed asset purchase agreement on December 29, 2021, the Company completed the acquisition of Wasatch Infusion LLC for a purchase price of $19.5 million. As of March 31, 2022, the Company finalized the purchase price allocation of the acquisition. Certain adjustments were made to preliminary valuation amounts related to accounts receivable, other assets and other assumed liabilities. The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities (in thousands):
(1) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs. Specialty Pharmacy Nursing Network, Inc. — In April 2022, pursuant to the equity purchase agreement dated February 7, 2022, the Company completed the acquisition of 100% of the equity interests in Specialty Pharmacy Nursing Network, Inc. (“SPNN”) for a purchase price, net of cash acquired, of $59.9 million. The allocation of the purchase price of SPNN was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations, with the total purchase price being allocated to the assets and liabilities acquired based on the relative fair value of each asset and liability. The following is a preliminary estimate of the allocation of the consideration transferred, open for accounts receivable and accounts payable, to acquired identifiable assets and assumed liabilities, net of cash acquired, as of June 30, 2022 (in thousands):
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Business Combinations and Asset Acquisitions | BUSINESS COMBINATIONS AND ASSET ACQUISITIONS Infinity Infusion Nursing LLC — In October 2021, pursuant to the equity purchase agreement dated October 1, 2021, the Company completed the acquisition of 100% of the equity interests in Infinity Infusion Nursing, LLC for a purchase price, net of cash acquired, of $59.6 million. The Company has finalized the purchase price allocation of the acquisition and no purchase accounting adjustments were made. Wasatch Infusion LLC Acquisition — In December 2021, pursuant to the executed asset purchase agreement on December 29, 2021, the Company completed the acquisition of Wasatch Infusion LLC for a purchase price of $19.5 million. As of March 31, 2022, the Company finalized the purchase price allocation of the acquisition. Certain adjustments were made to preliminary valuation amounts related to accounts receivable, other assets and other assumed liabilities. The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities (in thousands):
(1) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs. Specialty Pharmacy Nursing Network, Inc. — In April 2022, pursuant to the equity purchase agreement dated February 7, 2022, the Company completed the acquisition of 100% of the equity interests in Specialty Pharmacy Nursing Network, Inc. (“SPNN”) for a purchase price, net of cash acquired, of $59.9 million. The allocation of the purchase price of SPNN was accounted for as a business combination in accordance with ASC Topic 805, Business Combinations, with the total purchase price being allocated to the assets and liabilities acquired based on the relative fair value of each asset and liability. The following is a preliminary estimate of the allocation of the consideration transferred, open for accounts receivable and accounts payable, to acquired identifiable assets and assumed liabilities, net of cash acquired, as of June 30, 2022 (in thousands):
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REVENUE |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | REVENUE The following table sets forth the net revenue earned by category of payer for the three and six months ended June 30, 2022 and 2021 (in thousands):
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INCOME TAXES |
6 Months Ended |
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Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES During the three and six months ended June 30, 2022, the Company recorded tax expense of $13.7 million and $24.7 million, respectively, which represents an effective tax rate of 28.8% and 27.8%, respectively. The variance in the Company’s effective tax rate of 28.8% and 27.8% for the three and six months ended June 30, 2022, respectively, compared to the federal statutory rate of 21% is primarily attributable to current and deferred state taxes as well as various non-deductible expenses. During the three and six months ended June 30, 2021, the Company recorded tax expense of $0.7 million and $2.0 million which represents an effective tax rate of 2.2% and 6.5%, respectively. The variance in the Company’s effective tax rate of 2.2% and 6.5% for the three and six months ended June 30, 2021, compared to the federal statutory rate of 21%, is primarily attributable to the Company only recognizing certain deferred federal and state tax expense and current state tax expense while any tax benefits that would have otherwise been recognized were offset by the Company’s tax valuation allowance in effect during that period. The Company maintains a valuation allowance of $13.0 million against certain state net operating losses. In assessing the realizability of deferred tax assets, the Company considers whether it is more likely than not that some or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets depends on the generation of future taxable income during the periods in which those temporary differences are deductible. The Company considers the scheduled reversal of deferred tax liabilities, including the effect in available carryback and carryforward periods, projected taxable income and tax-planning strategies, in making this assessment. On a quarterly basis, the Company evaluates all positive and negative evidence in determining if the valuation allowance is fairly stated. The Company’s tax expense for the three and six months ended June 30, 2022 of $13.7 million and $24.7 million, respectively, consists of quarterly tax liabilities attributable to specific state taxing authorities as well as recognized deferred federal and state tax expense. The Company’s tax expense for the three and six months ended June 30, 2021 of $0.7 million and $2.0 million, respectively, consists of quarterly tax liabilities attributed to specific state taxing authorities as well as recognized deferred tax expense. The Company has accumulated federal net operating loss carryovers that are subject to one or more Section 382 limitations. This may limit the Company’s ability to utilize its federal net operating losses.
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EARNINGS PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | EARNINGS PER SHARE The Company presents basic and diluted earnings per share for its common stock. Basic earnings per share is calculated by dividing the net income of the Company by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is determined by adjusting the profit or loss and the weighted average number of shares of common stock outstanding for the effects of all potentially dilutive securities. The earnings are used as the basis of determining whether the inclusion of common stock equivalents would be anti-dilutive. The computation of diluted shares for the three and six months ended June 30, 2022 and 2021 includes the effect of shares that would be issued in connection with warrants, stock options and restricted stock awards, as these common stock equivalents are dilutive to the earnings per share recorded in those periods. For the three months ended June 30, 2022, there were 900,378 stock option awards and 136,568 restricted stock awards outstanding that were excluded from the calculation of earnings per share as they would be anti-dilutive. For the six months ended June 30, 2022, there were 836,957 stock option awards and 389,831 restricted stock awards outstanding that were excluded from the calculation of earnings per share as they would be anti-dilutive. For the three months ended June 30, 2021, there were 915,507 warrants and 547,310 stock option awards outstanding that were excluded from the calculation of earnings per share as they would be anti-dilutive. For the six months ended June 30, 2021, there were 915,507 warrants and 433,440 stock option awards outstanding that were excluded from the calculation of earnings per share as they would be anti-dilutive. The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):
The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):
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LEASES |
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASES During the three and six months ended June 30, 2022, the Company incurred operating lease expenses of $7.4 million and $14.8 million, respectively, including short-term lease expense, which were included as a component of selling, general and administrative expense in the unaudited condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2021, the Company incurred operating lease expenses of $6.9 million and $14.5 million, respectively, including short-term lease expense, which were included as a component of selling, general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income. As of June 30, 2022, the weighted-average remaining lease term was 6.7 years and the weighted-average discount rate was 5.10%. Operating leases mature as follows (in thousands):
During the six months ended June 30, 2022, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the unaudited condensed consolidated statements of cash flow of $8.4 million related to increases in the operating lease right-of-use assets and operating lease liabilities, respectively. During the six months ended June 30, 2021, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the unaudited condensed consolidated statements of cash flow of $5.7 million related to increases in the operating lease right-of-use assets and operating lease liabilities, respectively. As of June 30, 2022, the Company did not have any significant operating or financing leases that had not yet commenced.
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Leases | LEASES During the three and six months ended June 30, 2022, the Company incurred operating lease expenses of $7.4 million and $14.8 million, respectively, including short-term lease expense, which were included as a component of selling, general and administrative expense in the unaudited condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2021, the Company incurred operating lease expenses of $6.9 million and $14.5 million, respectively, including short-term lease expense, which were included as a component of selling, general and administrative expenses in the unaudited condensed consolidated statements of comprehensive income. As of June 30, 2022, the weighted-average remaining lease term was 6.7 years and the weighted-average discount rate was 5.10%. Operating leases mature as follows (in thousands):
During the six months ended June 30, 2022, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the unaudited condensed consolidated statements of cash flow of $8.4 million related to increases in the operating lease right-of-use assets and operating lease liabilities, respectively. During the six months ended June 30, 2021, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the unaudited condensed consolidated statements of cash flow of $5.7 million related to increases in the operating lease right-of-use assets and operating lease liabilities, respectively. As of June 30, 2022, the Company did not have any significant operating or financing leases that had not yet commenced.
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PROPERTY AND EQUIPMENT |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment was as follows as of June 30, 2022 and December 31, 2021 (in thousands):
Depreciation expense is recorded within cost of revenue and operating expenses within the unaudited condensed consolidated statements of comprehensive income, depending on the nature of the underlying fixed assets. The depreciation expense included in cost of revenue relates to revenue-generating assets, such as infusion pumps. The depreciation expense included in operating expenses is related to infrastructure items, such as furniture, computer and office equipment, and leasehold improvements. The following table presents the amount of depreciation expense recorded in cost of revenue and operating expenses for the three and six months ended June 30, 2022 and 2021 (in thousands):
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GOODWILL AND OTHER INTANGIBLE ASSETS |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | GOODWILL AND OTHER INTANGIBLE ASSETS Changes in the carrying amount of goodwill consists of the following activity for the three and six months June 30, 2022 (in thousands):
There were no changes in the carrying amount of goodwill for the three or six months ended June 30, 2021. The carrying amount and accumulated amortization of intangible assets consists of the following as of June 30, 2022 and December 31, 2021 (in thousands):
Amortization expense for intangible assets was $8.7 million and $16.2 million for the three and six months ended June 30, 2022, respectively. Amortization expense for intangible assets was $9.0 million and $17.6 million for the three and six months ended June 30, 2021, respectively.
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INDEBTEDNESS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Indebtedness | INDEBTEDNESS Long-term debt consisted of the following as of June 30, 2022 (in thousands):
Long-term debt consisted of the following as of December 31, 2021 (in thousands):
The interest rate on the First Lien Term Loan was 3.81% and 3.25% as of June 30, 2022 and December 31, 2021, respectively. The weighted average interest rate incurred on the First Lien Term Loan was 3.52% and 3.39% for the three and six months ended June 30, 2022, respectively. The weighted average interest rate incurred on the First Lien Term Loan was 3.85% and 3.91% for the three and six months ended June 30, 2021, respectively. The interest rate on the Senior Notes was 4.375% as of both June 30, 2022 and December 31, 2021, respectively. The weighted average interest rate incurred on the Senior Secured Notes was 4.375% for both the three and six months ended June 30, 2022, respectively. Long-term debt matures as follows (in thousands):
During the three and six months ended June 30, 2022 and 2021, the Company engaged in hedging activities to limit its exposure to changes in interest rates. See Note 11, Derivative Instruments, for further discussion. The following table presents the estimated fair values of the Company’s debt obligations as of June 30, 2022 (in thousands):
See Note 12, Fair Value Measurements, for further discussion.
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DERIVATIVE INSTRUMENTS |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments | DERIVATIVE INSTRUMENTS The Company uses derivative financial instruments for hedging and non-trading purposes to limit the Company’s exposure to increases in interest rates related to its variable interest rate debt. Use of derivative financial instruments in hedging programs subjects the Company to certain risks, such as market and credit risks. Market risk represents the possibility that the value of the derivative financial instrument will change. In a hedging relationship, the change in the value of the derivative financial instrument is offset to a great extent by the change in the value of the underlying hedged item. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The notional, or contractual, amount of the Company’s derivative financial instruments is used to measure interest to be paid or received and does not represent the Company’s exposure due to credit risk. Credit risk is monitored through established approval procedures, including reviewing credit ratings when appropriate. In October 2021, the Company entered into an interest rate cap hedge with a notional amount of $300 million for a 5-year term beginning November 30, 2021. The hedge partially offsets risk associated with the First Lien Term Loan Facility’s variable interest rate. The interest rate cap instrument perfectly offsets the terms of the interest rates associated with the variable interest rate of the First Lien Term Loan. The following table summarizes the amount and location of the Company’s derivative instruments in the condensed consolidated balance sheets (in thousands):
The gain associated with the change in the fair value of the effective portion of the hedging instrument are recorded into other comprehensive income. The following table presents the pre-tax gains from derivative instruments recognized in other comprehensive income in the Company’s unaudited condensed consolidated statements of comprehensive income (in thousands):
The following table presents the amount and location of pre-tax income (loss) recognized in the Company’s unaudited condensed consolidated statements of comprehensive income related to the Company’s derivative instruments (in thousands):
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FAIR VALUE MEASURMENTS |
6 Months Ended |
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Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value measurements are determined by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurements) and gives the lowest priority to unobservable inputs (Level 3 measurements). The categories within the valuation hierarchy are described as follows: •Level 1 — Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities. •Level 2 — Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. •Level 3 — Inputs to the fair value measurement are unobservable inputs or valuation techniques. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. First Lien Term Loan: The fair value of the First Lien Term Loan is derived from a broker quote on the loans in the syndication (Level 2 inputs). See Note 10, Indebtedness, for further discussion of the carrying amount and fair value of the First Lien Term Loan. Senior Notes: The fair value of the Senior Notes is derived from a broker quote (Level 2 inputs). See Note 10, Indebtedness, for further discussion of the carrying amount and fair value of the Senior Notes. Interest rate cap: The fair value of the interest rate cap is derived from the interest rates prevalent in the market and future expectations of those interest rates (Level 2 inputs). The Company determines the fair value of the investments based on quoted prices from third-party brokers. See Note 11, Derivative Instruments, for further discussion of the fair value of the interest rate cap. There were no other assets or liabilities measured at fair value at June 30, 2022 and December 31, 2021.
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COMMITMENTS AND CONTINGENCIES |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIESThe Company is involved in legal proceedings and is subject to investigations, inspections, audits, inquiries, and similar actions by governmental authorities, arising in the normal course of the Company’s business. Some of these suits may purport or may be determined to be class actions and/or involve parties seeking large and/or indeterminate amounts, including punitive or exemplary damages, and may remain unresolved for several years. From time to time, the Company may also be involved in legal proceedings as a plaintiff involving antitrust, tax, contract, intellectual property, and other matters. Gain contingencies, if any, are recognized when they are realized. The results of legal proceedings are often uncertain and difficult to predict, and the costs incurred in litigation can be substantial, regardless of the outcome. The Company believes that its defenses and assertions in pending legal proceedings have merit and does not believe that any of these pending matters, after consideration of applicable reserves and rights to indemnification, will have a material adverse effect on the Company’s condensed consolidated balance sheets. However, substantial unanticipated verdicts, fines, and rulings may occur. As a result, the Company may from time to time incur judgments, enter into settlements, or revise expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on its results of operations in the period in which the amounts are accrued and/or its cash flows in the period in which the amounts are paid. |
STOCK-BASED INCENTIVE COMPENSATION |
6 Months Ended |
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Jun. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Incentive Compensation | STOCK-BASED INCENTIVE COMPENSATIONEquity Incentive Plans — Under the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), approved at the annual meeting by the BioScrip stockholders on May 3, 2018 and amended and restated on May 19, 2021, the Company may issue, among other things, incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, stock grants, and performance units to key employees and directors, resulting in a total of 9,101,734 shares of common stock are authorized for issuance. The 2018 plan is administered by the Company’s Compensation Committee, a standing committee of the Board of Directors. The Company had stock options, restricted stock and performance stock units outstanding related to the 2018 Plan as of June 30, 2022. During the three and six months ended June 30, 2022, total stock-based incentive compensation expense recognized by the Company related to these plans was $4.4 million and $8.6 million, respectively. During the three and six months ended June 30, 2021, total stock-based incentive compensation expense recognized by the Company related to these plans was $2.5 million and $3.7 million, respectively. |
STOCKHOLDERS' EQUITY |
6 Months Ended |
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Jun. 30, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY 2017 Warrants — During the three and six months ended June 30, 2022, warrant holders elected to exercise 1,130,089 warrants to purchase shares of common stock. During the three and six months ended June 30, 2021, warrant holders did not elect to exercise any warrants to purchase shares of common stock. As of June 30, 2022 and December 31, 2021, the remaining warrant holders are entitled to purchase 240,188 and 1,370,277 shares of common stock, respectively. 2015 Warrants — During the three and six months ended June 30, 2022, warrant holders elected to exercise 868,304 warrants to purchase shares of common stock. During the three and six months ended June 30, 2021, warrant holders did not elect to exercise any warrants to purchase shares of common stock. As of June 30, 2022 and December 31, 2021, the remaining warrant holders are entitled to purchase 47,199 and 915,503 shares of common stock, respectively.
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RELATED-PARTY TRANSACTIONS |
6 Months Ended |
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Jun. 30, 2022 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | RELATED-PARTY TRANSACTIONS Transactions with Equity-Method Investees — The Company provides management services to its joint ventures such as accounting, invoicing and collections in addition to day-to-day managerial support of the operations of the businesses. The Company recorded management fee income of $0.9 million and $1.8 million for the three and six months ended June 30, 2022, respectively. The Company recorded management fee income of $0.9 million and $1.7 million for the three and six months ended June 30, 2021, respectively. Management fees are recorded in net revenues in the accompanying unaudited condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2022, the Company received $1.0 million in distributions from the investees. During the three and six months ended June 30, 2021, the Company did not receive a distribution from the investees. The Company had amounts due to its joint ventures of $0.7 million as of June 30, 2022. Payables were included in accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheets. The Company also had amounts due to its joint ventures of $1.4 million as of December 31, 2021. These balances primarily relate to cash collections received by the Company on behalf of the joint ventures, offset by certain pharmaceutical inventories and other expenses paid for by the Company on behalf of the joint ventures.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation — The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles (“GAAP”) in the United States and contain all adjustments, including normal recurring adjustments, necessary to present fairly the Company’s financial position, results of operations and cash flows for interim financial reporting. The results of operations for the interim periods presented are not necessarily indicative of the results of operations for the entire year. These unaudited condensed consolidated financial statements do not include all of the information and notes to the financial statements required by GAAP for complete financial statements and should be read in conjunction with the 2021 audited consolidated financial statements, including the notes thereto, as presented in our Form 10-K. |
Principles of Consolidation | Principles of Consolidation — The Company’s unaudited condensed consolidated financial statements include the accounts of Option Care Health, Inc. and its subsidiaries. All intercompany transactions and balances are eliminated in consolidation. |
Cash and Cash Equivalents | Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents. |
Equity Method Investments | Equity Method Investments — The Company’s investments in certain unconsolidated entities are accounted for under the equity method. The balance of these investments is included in other noncurrent assets in the accompanying condensed consolidated balance sheets. As of June 30, 2022 and December 31, 2021, the balance of the investments were $21.7 million and $20.1 million, respectively. The balance of these investments is increased to reflect the Company’s capital contributions and equity in earnings of the investees. The balance of these investments is decreased to reflect the Company’s equity in losses of the investees and for distributions received that are not in excess of the carrying amount of the investments. The Company’s proportionate share of earnings or losses of the investees is recorded in equity in earnings of joint ventures in the accompanying unaudited condensed consolidated statements of comprehensive income. |
Concentrations of Business Risk | Concentrations of Business Risk — The Company generates revenue from managed care contracts and other agreements with commercial third-party payers. Revenue related to the Company’s largest payer was approximately 15% and 15%, respectively, for the three and six months ended June 30, 2022. Revenue related to the Company’s largest payer was approximately 16% and 16% for the three and six months ended June 30, 2021. There were no other managed care contracts that represent greater than 10% of revenue for the periods presented. For the three and six months ended June 30, 2022, approximately 12% and 12%, respectively, of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. For the three and six months ended June 30, 2021, approximately 12% and 12%, respectively of the Company’s revenue was reimbursable through direct government healthcare programs, such as Medicare and Medicaid. As of June 30, 2022 and December 31, 2021, approximately 11% and 11%, respectively, of the Company’s accounts receivable was related to these programs. Governmental programs pay for services based on fee schedules and rates that are determined by the related governmental agency. Laws and regulations pertaining to government programs are complex and subject to interpretation. As a result, there is at least a reasonable possibility that recorded estimates will change in the near term. The Company does not require its patients nor other payers to carry collateral for any amounts owed for goods or services provided. Other than as discussed above, concentration of credit risk relating to trade accounts receivable is limited due to the Company’s diversity of patients and payers. Further, the Company generally does not provide charity care; however, Option Care Health offers a financial assistance program for patients that meet certain defined hardship criteria. For the three and six months ended June 30, 2022, approximately 72% and 73%, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors. For the three and six months ended June 30, 2021 approximately 64% and 65%, respectively, 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. However, a change in suppliers could cause delays in service delivery and possible losses in revenue, which could adversely affect the Company’s financial condition or operating results.
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Fair Value Measurements | FAIR VALUE MEASUREMENTS Fair value measurements are determined by maximizing the use of observable inputs and minimizing the use of unobservable inputs. The hierarchy places the highest priority on unadjusted quoted market prices in active markets for identical assets or liabilities (Level 1 measurements) and gives the lowest priority to unobservable inputs (Level 3 measurements). The categories within the valuation hierarchy are described as follows: •Level 1 — Inputs to the fair value measurement are quoted prices in active markets for identical assets or liabilities. •Level 2 — Inputs to the fair value measurement include quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, and inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. •Level 3 — Inputs to the fair value measurement are unobservable inputs or valuation techniques. While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date. First Lien Term Loan: The fair value of the First Lien Term Loan is derived from a broker quote on the loans in the syndication (Level 2 inputs). See Note 10, Indebtedness, for further discussion of the carrying amount and fair value of the First Lien Term Loan. Senior Notes: The fair value of the Senior Notes is derived from a broker quote (Level 2 inputs). See Note 10, Indebtedness, for further discussion of the carrying amount and fair value of the Senior Notes. Interest rate cap: The fair value of the interest rate cap is derived from the interest rates prevalent in the market and future expectations of those interest rates (Level 2 inputs). The Company determines the fair value of the investments based on quoted prices from third-party brokers. See Note 11, Derivative Instruments, for further discussion of the fair value of the interest rate cap.
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BUSINESS COMBINATIONS AND ASSET ACQUISITIONS (Tables) |
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Identifiable Assets and Assumed Liabilities | The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities (in thousands):
(1) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs. The following is a preliminary estimate of the allocation of the consideration transferred, open for accounts receivable and accounts payable, to acquired identifiable assets and assumed liabilities, net of cash acquired, as of June 30, 2022 (in thousands):
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REVENUE (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Net Revenue Earned by Category of Payer | The following table sets forth the net revenue earned by category of payer for the three and six months ended June 30, 2022 and 2021 (in thousands):
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EARNINGS PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Basic and Diluted Earnings (Loss) Per Share | The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):
The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):
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LEASES (Tables) |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Maturities of Lease Liabilities, Operating | Operating leases mature as follows (in thousands):
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PROPERTY AND EQUIPMENT (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Property and Equipment | Property and equipment was as follows as of June 30, 2022 and December 31, 2021 (in thousands):
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GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Carrying Amount of Goodwill | Changes in the carrying amount of goodwill consists of the following activity for the three and six months June 30, 2022 (in thousands):
|
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Schedule of Carrying Amount and Accumulated Amortization of Intangible Assets | The carrying amount and accumulated amortization of intangible assets consists of the following as of June 30, 2022 and December 31, 2021 (in thousands):
|
INDEBTEDNESS (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Long-term debt consisted of the following as of June 30, 2022 (in thousands):
Long-term debt consisted of the following as of December 31, 2021 (in thousands):
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Schedule of Long-term Debt Maturities | Long-term debt matures as follows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Estimated Fair Values of Debt Obligations | The following table presents the estimated fair values of the Company’s debt obligations as of June 30, 2022 (in thousands):
|
DERIVATIVE INSTRUMENTS (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amount and Location of Derivatives in the Balance Sheet | The following table summarizes the amount and location of the Company’s derivative instruments in the condensed consolidated balance sheets (in thousands):
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Schedule of Pre-tax Gains (Losses) Recognized in the Statements of Comprehensive Income (Loss) | The following table presents the pre-tax gains from derivative instruments recognized in other comprehensive income in the Company’s unaudited condensed consolidated statements of comprehensive income (in thousands):
The following table presents the amount and location of pre-tax income (loss) recognized in the Company’s unaudited condensed consolidated statements of comprehensive income related to the Company’s derivative instruments (in thousands):
|
NATURE OF OPERATIONS AND PRESENTATION OF FINANCIAL STATEMENTS (Details) |
6 Months Ended |
---|---|
Jun. 30, 2022
segment
pharmacy
| |
Business Acquisition [Line Items] | |
Number of operating segments | segment | 1 |
Legacy Health Systems | |
Business Acquisition [Line Items] | |
Ownership interest | 50.00% |
OptionCare Enterprises, Inc. | |
Business Acquisition [Line Items] | |
Number of service locations | pharmacy | 97 |
HC Group Holdings I, LLC | |
Business Acquisition [Line Items] | |
Percentage of common stock | 0.205 |
BUSINESS COMBINATIONS AND ASSET ACQUISITIONS - Additional Information (Details) - USD ($) |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Dec. 29, 2021 |
Oct. 01, 2021 |
Apr. 30, 2022 |
Mar. 31, 2022 |
|
Infinity Infusion Nursing, LLC | ||||
Business Acquisition [Line Items] | ||||
Percentage of the combined company held | 100.00% | |||
Purchase price, net of cash acquired | $ 59,600,000 | |||
Other purchase price adjustments | $ 0 | |||
Wasatch Infusion LLC | ||||
Business Acquisition [Line Items] | ||||
Purchase Price | $ 19,455,000 | |||
SPNN | ||||
Business Acquisition [Line Items] | ||||
Percentage of the combined company held | 100.00% | |||
Purchase price, net of cash acquired | $ 59,900,000 | |||
Purchase Price | $ 60,558,000 |
REVENUE - Net Revenue Earned by Category of Payer (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 980,820 | $ 860,272 | $ 1,896,604 | $ 1,619,509 |
Commercial payers | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 851,915 | 746,647 | 1,638,192 | 1,395,154 |
Government payers | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | 119,385 | 102,581 | 234,590 | 200,422 |
Patients | ||||
Disaggregation of Revenue [Line Items] | ||||
Net revenue | $ 9,520 | $ 11,044 | $ 23,822 | $ 23,933 |
INCOME TAXES (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax (benefit) expense | $ 13,709 | $ 731 | $ 24,702 | $ 2,009 |
Effective tax rate | 28.80% | 2.20% | 27.80% | 6.50% |
Valuation allowance | $ 13,000 | $ 13,000 |
EARNINGS PER SHARE - Additional Information (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Warrant | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 915,507 | 915,507 | ||
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 900,378 | 547,310 | 836,957 | 433,440 |
Restricted Stock Award | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 136,568 | 389,831 |
EARNINGS PER SHARE - Schedule of Basic and Diluted Earnings (Loss) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Numerator: | ||||||
Net income | $ 33,929 | $ 30,275 | $ 31,816 | $ (2,861) | $ 64,204 | $ 28,955 |
Denominator: | ||||||
Weighted average number of common shares outstanding (in shares) | 180,621 | 179,843 | 180,293 | 179,826 | ||
Effect of dilutive securities (in shares) | 997 | 1,194 | 883 | 1,149 | ||
Weighted average number of common shares outstanding, diluted (in shares) | 181,618 | 181,037 | 181,176 | 180,975 | ||
Earnings per common share, basic | ||||||
Earnings per common share, basic (in dollars per share) | $ 0.19 | $ 0.18 | $ 0.36 | $ 0.16 | ||
Earnings per common share, diluted | ||||||
Earnings per common share, diluted (in dollars per share) | $ 0.19 | $ 0.18 | $ 0.35 | $ 0.16 |
LEASES - Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 7.4 | $ 6.9 | $ 14.8 | $ 14.5 |
Weighted-average remaining lease term, operating leases | 6 years 8 months 12 days | 6 years 8 months 12 days | ||
Weighted-average discount rate, operating leases | 5.10% | 5.10% | ||
Increase in operating lease right-of-use asset and lease liabilities | $ 8.4 | $ 5.7 |
LEASES - Maturities of Lease Liabilities (Details) $ in Thousands |
Jun. 30, 2022
USD ($)
|
---|---|
Minimum Payments | |
2022 | $ 14,539 |
2023 | 22,190 |
2024 | 16,215 |
2025 | 13,388 |
2026 | 10,416 |
Thereafter | 34,835 |
Total lease payments | 111,583 |
Less: Interest | (19,234) |
Present value of lease liabilities | $ 92,349 |
GOODWILL AND OTHER INTANGIBLE ASSETS - Carrying Amount of Goodwill (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Jun. 30, 2021 |
|
Goodwill [Roll Forward] | ||||
Goodwill - net book value, begging of period | $ 1,478,500,000 | $ 1,477,564,000 | ||
Goodwill, acquired during period | 33,746,000 | 936,000 | $ 0 | $ 0 |
Goodwill - net book value, end of period | 1,512,246,000 | 1,478,500,000 | ||
Change in the carrying amount | $ 33,746,000 | $ 936,000 | $ 0 | $ 0 |
INDEBTEDNESS - Debt (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Principal Amount | $ 1,097,000 | $ 1,100,000 |
Discount | (8,966) | (9,605) |
Debt Issuance Costs | (23,017) | (24,495) |
Net Balance | 1,065,017 | 1,065,900 |
Less: current portion | (6,000) | (6,000) |
Total long-term debt | 1,059,017 | 1,059,900 |
Senior Notes | First Lien Term Loan | ||
Debt Instrument [Line Items] | ||
Principal Amount | 597,000 | 600,000 |
Discount | (8,966) | (9,605) |
Debt Issuance Costs | (12,443) | (13,331) |
Net Balance | 575,591 | 577,064 |
Senior Notes | Senior Notes | ||
Debt Instrument [Line Items] | ||
Principal Amount | 500,000 | 500,000 |
Discount | 0 | 0 |
Debt Issuance Costs | (10,574) | (11,164) |
Net Balance | 489,426 | 488,836 |
Senior Notes | Asset-based-lending (“ABL”) facility | ||
Debt Instrument [Line Items] | ||
Principal Amount | 0 | 0 |
Discount | 0 | 0 |
Debt Issuance Costs | 0 | 0 |
Net Balance | $ 0 | $ 0 |
INDEBTEDNESS - Additional Information (Details) - Credit Agreements Amendment - Senior Notes |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
First Lien Term Loan | |||||
Debt Instrument [Line Items] | |||||
Effective rate on term loans at end of period | 3.81% | 3.81% | 3.25% | ||
Weighted average interest rate paid on term loans during period | 3.52% | 3.85% | 3.39% | 3.91% | |
Second Lien Term Loan | |||||
Debt Instrument [Line Items] | |||||
Effective rate on term loans at end of period | 4.375% | 4.375% | 4.375% | ||
Weighted average interest rate paid on term loans during period | 4.375% | 4.375% |
INDEBTEDNESS - Long Term Debt Maturities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Disclosure [Abstract] | ||
2022 | $ 3,000 | |
2023 | 6,000 | |
2024 | 6,000 | |
2025 | 6,000 | |
2026 | 6,000 | |
Thereafter | 1,070,000 | |
Total | $ 1,097,000 | $ 1,100,000 |
DERIVATIVE INSTRUMENTS - Additional Information (Details) - Interest Rate Cap - First Lien Term Loan - Designated as Hedging Instrument - Senior Notes |
1 Months Ended |
---|---|
Oct. 31, 2021
USD ($)
| |
Derivative [Line Items] | |
Notional amount of derivative | $ 300,000,000 |
Derivative, term of contract | 5 years |
DERIVATIVE INSTRUMENTS - Balance Sheet Location of Derivatives (Details) - Designated as Hedging Instrument - Interest Rate Cap - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Prepaid expenses and other current assets | ||
Fair value - Derivatives in liability position | ||
Derivative asset | $ 4,853 | $ 0 |
Other noncurrent assets | ||
Fair value - Derivatives in liability position | ||
Derivative asset | 14,771 | 0 |
Accrued expenses and other current liabilities | ||
Fair value - Derivatives in liability position | ||
Derivative liability | $ 0 | $ 601 |
DERIVATIVE INSTRUMENTS - Pre-tax Gain (Loss) on Derivative Instruments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Derivative [Line Items] | ||||
Pre-tax gains (losses) on interest rate derivatives recognized | $ 5,393 | $ 4,199 | $ 20,226 | $ 8,280 |
Total gain (loss) on derivatives | 491 | (4,247) | 1,184 | (8,397) |
Interest Rate Cap | ||||
Derivative [Line Items] | ||||
Pre-tax gains (losses) on interest rate derivatives recognized | 5,393 | 0 | 20,226 | 0 |
Interest Rate Cap | Interest expense | ||||
Derivative [Line Items] | ||||
Gain (loss) location of derivative instruments | 491 | 0 | 1,184 | 0 |
Interest Rate Swap | ||||
Derivative [Line Items] | ||||
Pre-tax gains (losses) on interest rate derivatives recognized | 0 | 4,199 | 0 | 8,280 |
Interest Rate Swap | Interest expense | ||||
Derivative [Line Items] | ||||
Gain (loss) location of derivative instruments | 0 | (4,246) | 0 | (8,395) |
Gain (loss) location of derivative instruments not designated | $ 0 | $ (1) | $ 0 | $ (2) |
STOCK-BASED INCENTIVE COMPENSATION (Details) - USD ($) $ in Millions |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
May 03, 2018 |
|
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||||
Number of shares authorized (in shares) | 9,101,734 | ||||
HC I Incentive Units | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |||||
Share-based compensation expense | $ 4.4 | $ 2.5 | $ 8.6 | $ 3.7 |
STOCKHOLDERS' EQUITY (Details) - Common Stock - shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
2017 Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Number of warrants exercisable (in shares) | 1,130,089 | 0 | 1,130,089 | 0 | |
Number of shares purchasable through warrants (in shares) | 240,188 | 240,188 | 1,370,277 | ||
2015 Warrants | |||||
Class of Warrant or Right [Line Items] | |||||
Number of warrants exercisable (in shares) | 868,304 | 0 | 868,304 | 0 | |
Number of shares purchasable through warrants (in shares) | 47,199 | 47,199 | 915,503 |
RELATED-PARTY TRANSACTIONS (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Related Party Transaction [Line Items] | |||||
Capital distribution from equity method investments | $ 1,000,000 | $ 0 | $ 1,000,000 | $ 0 | |
Joint Venture | |||||
Related Party Transaction [Line Items] | |||||
Management fee income | 900,000 | $ 900,000 | 1,800,000 | $ 1,700,000 | |
Due to joint ventures | $ 700,000 | $ 700,000 | $ 1,400,000 |
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