UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 29, 2024
BrightSpring Health Services, Inc.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-41938 | 82-2956404 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
805 N. Whittington Parkway
Louisville, Kentucky 40222
(Address of Principal Executive Offices) (Zip Code)
(502) 394-2100
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class |
Trading |
Name of each exchange | ||
| Common Stock, par value $0.01 per share | BTSG | The Nasdaq Stock Market LLC | ||
| 6.75% Tangible Equity Units | BTSGU | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operations and Financial Condition. |
On February 29, 2024, BrightSpring Health Services, Inc. issued a press release announcing its financial results for the quarter and year ended December 31, 2023. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and incorporated by reference in this Item 2.02.
The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that section and shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated by specific reference in any such filing.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| Exhibit |
Description | |
| 99.1 | Press Release of BrightSpring Health Services, Inc., dated February 29, 2024. | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BRIGHTSPRING HEALTH SERVICES, INC. | ||
| By: | /s/ Jennifer Phipps | |
| Name: | Jennifer Phipps | |
| Title: | Chief Accounting Officer | |
Date: February 29, 2024
Exhibit 99.1
BrightSpring Health Services, Inc. Reports Financial Results for Fourth Quarter and Full Year 2023 and Provides Full Year 2024 Guidance
LOUISVILLE, Ky., Feb. 29, 2024 (GLOBE NEWSWIRE) — BrightSpring Health Services, Inc. (“BrightSpring” or the “Company”) (NASDAQ: BTSG) announced today financial results for the fourth quarter and full year ended December 31, 2023.
Fourth Quarter 2023 Financial Highlights
| • | Net revenue of $2,375 million, up 20.5% compared to $1,971 million in the fourth quarter of 2022 |
| • | Net revenue growth was negatively impacted by 1.6% due to the Q4 2022 Workforce Solutions divestiture |
| • | Gross profit of $369 million, or 15.5% of revenue, up 9.2% compared to $338 million, or 17.1% of revenue, in the fourth quarter of 2022 |
| • | Gross profit growth was negatively impacted by 1.4% due to the Q4 2022 Workforce Solutions divestiture and by 5.2% due to a one-time Q4 2022 payer rate adjustment |
| • | Net loss of $7 million, or $(0.06) per diluted share, compared to net loss of $56 million, or $(0.48) per diluted share in the fourth quarter of 2022 |
| • | Adjusted EBITDAI of $143 million, up 2.5% compared to $139 million in the fourth quarter of 2022 |
| • | Adjusted EBITDAI growth was negatively impacted by 1.3% due to Q4 2022 Workforce Solutions divestiture and by 12.7% due to Q4 2022 payer rate adjustment |
| • | Cash flow from operations of $162 million |
Full Year 2023 Financial Highlights
| • | Net revenue of $8,826 million, up 14.3% compared to $7,721 million in full year 2022 |
| • | Net revenue growth was negatively impacted by 4.2% due to Q4 2022 Workforce Solutions divestiture |
| • | Gross profit of $1,434 million, or 16.2% of revenue, up 5.9% compared to $1,354 million, or 17.5% of revenue, in full year 2022 |
| • | Gross profit growth was negatively impacted by 2.8% due to Q4 2022 Workforce Solutions |
| • | Net loss of $155 million, or $(1.31) per diluted share, compared to net loss of $54 million, or $(0.46) per diluted share in full year 2022 |
| • | Adjusted EBITDAI of $538 million, up 2.9% compared to $523 million in full year 2022 |
| • | Adjusted EBITDA growth was negatively impacted by 4.1% due to Q4 2022 Workforce Solutions divestiture |
Jon Rousseau, Chief Executive Officer, stated, “I am proud to announce that we closed out a very successful 2023 with strong momentum in both the Pharmacy and Provider segments and am thankful for the efforts of dedicated employees across the country. We positively impact hundreds of thousands of individuals living with complex health conditions through our complementary and high-quality services that improve outcomes and reduce cost. Our consistent performance is reflective of our team’s ongoing
| I | Adjusted EBITDA is a non-GAAP financial measure. Please see “Non-GAAP Financial Information” and the end of this press release for a reconciliation of Adjusted EBITDA to net (loss) income, the most directly comparable financial measure prepared in accordance with GAAP. |
1
commitment to provide better care access, coordination, and results for patients. We have a proven track record of growth at scale and are confident in our ability to continue to deliver the multiple and comprehensive services that complex patients require. We are proud of the full year financial results we delivered in 2023 and are excited to build on the momentum in the years ahead as we continue to execute our differentiated strategy as a public company.”
Full Year 2024 Financial Guidance
For the full year 2024, BrightSpring is providing the below guidance, which excludes the effects of any future acquisitions.
| • | Net revenue of $9,350 million to $9,500 million, or 5.9% to 7.6% growth over 2023 |
| • | Pharmacy Segment Revenue of $6,950 million to $7,050 million, or 6.6% to 8.1% growth over full year 2023 |
| • | Provider Segment Revenue of $2,400 million to $2,450 million, or 4.2% to 6.3% growth over full year 2023 |
| • | Adjusted EBITDAII of $550 million to $564 million, or 2.3% to 4.9% growth over full year 2023 |
| • | 2024 Adjusted EBITDA guidance excludes certain quality incentive payments received in prior years, and, if received again, would result in potential upside |
Conference Call Details
BrightSpring will host a conference call to discuss its financial results later today at 8:30 a.m. EST. The conference call can be accessed via a live audio webcast that will be available online on the Company’s investor relations website at https://ir.brightspringhealth.com under the “Events & Presentations” section, where related presentation materials will be posted prior to the conference call.
The webcast may be accessed directly at https://edge.mediaserver.com/mmc/p/afv2jeob
Following the conference call, a replay of the webcast will be available on the Company’s investor relations website, https://ir.brightspringhealth.com/. The Company has posted supplemental financial information on the fourth quarter results that it will reference during the conference call. The supplemental information can be found under the “Events & Presentations” on the Company’s investor relations page.
About BrightSpring Health Services
BrightSpring Health Services is the parent company of leading healthcare service lines that provide complementary home- and community-based pharmacy and provider health solutions for complex populations in need of specialized and/or chronic care. Through the company’s high-quality and impactful pharmacy, primary care and home health care, and rehabilitation and behavioral health services, and through its skilled and dedicated employees, we provide comprehensive care and clinical solutions in all 50 states to over 400,000 customers, clients and patients daily. For more information, visit www.brightspringhealth.com.
| II | A reconciliation of the foregoing guidance for the non-GAAP metric of Adjusted EBITDA to GAAP net (loss) income cannot be provided without unreasonable effort because of the inherent difficulty of accurately forecasting the occurrence and financial impact of the various adjusting items necessary for such reconciliation that have not yet occurred, are out of our control, or cannot be reasonably predicted. For the same reasons, the Company is unable to assess the probable significance of the unavailable information, which could have a material impact on its future GAAP financial results. |
2
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect our current views with respect to, among other things, our operations and financial performance. Forward-looking statements include all statements that are not historical facts. These forward-looking statements relate to matters such as industries, business strategy, goals and expectations concerning our market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information. In some cases, you can identify these forward-looking statements by the use of words such as “anticipate,” “assume,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “future,” “will,” “seek,” “foreseeable,” “target,” “guidance,” the negative version of these words, or similar terms and phrases.
The forward-looking statements are based on management’s current expectations and are not guarantees of future performance. The forward-looking statements are subject to various risks, uncertainties, assumptions, or changes in circumstances that are difficult to predict or quantify. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, there can be no assurance that management’s expectations, beliefs, and projections will result or be achieved. Actual results may differ materially from these expectations due to changes in global, regional, or local economic, business, competitive, market, regulatory, and other factors, many of which are beyond our control. We believe that these factors include but are not limited to the following:
| • | our operation in a highly competitive industry; |
| • | our inability to maintain relationships with existing patient referral sources or establish new referral sources; |
| • | changes to Medicare and Medicaid rates or methods governing Medicare and Medicaid payments for our services; |
| • | cost containment initiatives of third-party payors, including post-payment audits; |
| • | the implementation of alternative payment models and the transition of Medicaid and Medicare beneficiaries to managed care organizations may limit our market share and could adversely affect our revenues; |
| • | changes in the case mix of patients, as well as payor mix and payment methodologies, and decisions and operations of third-party organizations; |
| • | our reliance on federal and state spending, budget decisions, and continuous governmental operations which may fluctuate under different political conditions; |
| • | changes in drug utilization and/or pricing, PBM contracts, and Medicare Part D/Medicaid reimbursement, which may negatively impact our profitability; |
| • | changes in our relationships with pharmaceutical suppliers, including changes in drug availability or pricing; |
| • | reliance on the continual recruitment and retention of nurses, pharmacists, therapists, caregivers, direct support professionals, and other qualified personnel, including senior management; |
3
| • | federal, state, and local laws and regulations that govern our employment practices, including minimum wage, living wage, and paid time-off requirements; |
| • | fluctuation of our results of operations on a quarterly basis; |
| • | labor relation matters; |
| • | limited ability to control reimbursement rates received for our services; |
| • | delays in collection or non-collection of our accounts receivable, particularly during the business integration process; |
| • | failure to manage our growth effectively may inhibit our ability to execute our business plan, maintain high levels of service and satisfaction or adequately address competitive challenges; |
| • | our ability to identify, successfully complete and manage acquisitions, joint ventures, and other strategic initiatives; |
| • | continuing to provide consistently high quality of care; |
| • | maintenance of our corporate reputation; |
| • | contract continuance, expansion and renewal with our existing customers; |
| • | effective investment in, improvements to and proper maintenance of the uninterrupted operation and data integrity of our information technology and other business systems; |
| • | security breaches, loss of data, and other disruptions, which could compromise sensitive business or patient information, cause a loss of confidential patient data, employee data, personal information, or prevent access to critical information and expose us to liability, litigation, and federal and state governmental inquiries and damage our reputation and brand; |
| • | risks related to credit card payments and other payment methods; |
| • | potential substantial malpractice or other similar claims; |
| • | various risks related to governmental inquiries, regulatory actions, and whistleblower and other lawsuits; |
| • | our current insurance program may expose us to unexpected costs, particularly if we incur losses not covered by our insurance or if claims or losses differ from our estimates; |
| • | factors outside of our control, including those listed, have required and could in the future require us to record an asset impairment of goodwill; |
| • | a pandemic, epidemic, or outbreak of an infectious disease, including the ongoing effects of COVID-19; |
| • | inclement weather, natural disasters, acts of terrorism, riots, civil insurrection or social unrest, looting, protests, strikes, or street demonstrations; and |
| • | our inability to adequately protect our intellectual property rights. |
4
The forward-looking statements included in this press release are made only as of the date of this press release, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law. These factors should not be construed as exhaustive, and should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, investments, or other strategic transactions we may make.
For additional information on these and other factors that could cause BrightSpring’s actual results to differ materially from expected results, please see our filings with the Securities and Exchange Commission (the “SEC”), which are accessible on the SEC’s website at www.sec.gov.
Non-GAAP Financial Information
This press release contains “non-GAAP financial measures,” including “EBITDA” and “Adjusted EBITDA,” which are financial measures that either exclude or include amounts that are not excluded or included in the most directly comparable measures calculated and presented in accordance with accounting principles generally accepted in the United States, or GAAP.
EBITDA and Adjusted EBITDA have been presented in this release as supplemental measures of financial performance that are not required by, or presented in accordance with, GAAP, because we believe they assist investors and analysts in comparing our operating performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. Management also believes that these measures are useful to investors in highlighting trends in our operating performance, while other measures can differ significantly depending on long-term strategic decisions regarding capital structure, the tax jurisdictions in which we operate and capital investments. Management uses EBITDA and Adjusted EBITDA to supplement GAAP measures of performance in the evaluation of the effectiveness of our business strategies, to make budgeting decisions, to establish and award discretionary annual incentive compensation, and to compare our performance against that of other peer companies using similar measures.
Management supplements GAAP results with non-GAAP financial measures to provide a more complete understanding of the factors and trends affecting the business than GAAP results alone. EBITDA and Adjusted EBITDA are not GAAP measures of our financial performance and should not be considered as an alternative to net (loss) income as a measure of financial performance or any other performance measures derived in accordance with GAAP. Additionally, these measures are not intended to be a measure of free cash flow available for management’s discretionary use as they do not consider certain cash requirements such as tax payments, debt service requirements, total capital expenditures, and certain other cash costs that may recur in the future.
Management defines EBITDA as net (loss) income before income tax expense (benefit), interest expense, and depreciation and amortization. Management also defines Adjusted EBITDA as EBITDA, further adjusted to exclude non-cash share-based compensation, acquisition, integration and transaction-related costs, restructuring and divestiture-related and other costs, goodwill impairment, legal costs associated with certain historical matters for PharMerica and settlement costs associated with the Silver matter, significant projects, management fees, and unreimbursed COVID-19 related costs.
5
The presentations of these measures have limitations as analytical tools and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Because not all companies use identical calculations, the presentations of these measures may not be comparable to other similarly titled measures of other companies and can differ significantly from company to company. Please see the end of this press release for reconciliations of non-GAAP financial measures to the most directly comparable financial measure prepared in accordance with GAAP.
Contact
Media Contact:
Leigh White
leigh.white@brightspringhealth.com
502.630.7412
6
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
December 31, 2023 and 2022
(In thousands, except share and per share data)
(unaudited)
| December 31, 2023 | December 31, 2022 | |||||||
| Assets |
||||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
$ | 13,071 | $ | 13,628 | ||||
| Accounts receivable, net of allowance for credit losses |
881,627 | 775,843 | ||||||
| Inventories |
402,776 | 430,517 | ||||||
| Prepaid expenses and other current assets |
159,167 | 124,268 | ||||||
|
|
|
|
|
|||||
| Total current assets |
1,456,641 | 1,344,256 | ||||||
|
|
|
|
|
|||||
| Property and equipment, net of accumulated depreciation of $368,089 and $296,039 at December 31, 2023 and 2022, respectively |
245,908 | 229,081 | ||||||
| Goodwill |
2,608,412 | 2,576,081 | ||||||
| Intangible assets, net of accumulated amortization |
881,476 | 975,862 | ||||||
| Operating lease right-of-use assets, net |
267,446 | 246,194 | ||||||
| Other assets |
72,838 | 69,664 | ||||||
|
|
|
|
|
|||||
| Total assets |
$ | 5,532,721 | $ | 5,441,138 | ||||
|
|
|
|
|
|||||
| Liabilities, Redeemable Noncontrolling Interests, and Equity | ||||||||
| Current liabilities: | ||||||||
| Trade accounts payable |
$ | 641,607 | $ | 526,916 | ||||
| Accrued expenses |
492,363 | 297,737 | ||||||
| Current portion of obligations under operating leases |
71,053 | 67,230 | ||||||
| Current portion of obligations under financing leases |
11,141 | 10,218 | ||||||
| Current portion of long-term debt |
32,273 | 30,407 | ||||||
|
|
|
|
|
|||||
| Total current liabilities |
1,248,437 | 932,508 | ||||||
|
|
|
|
|
|||||
| Obligations under operating leases, net of current portion |
201,655 | 184,609 | ||||||
| Obligations under financing leases, net of current portion |
22,528 | 20,303 | ||||||
| Long-term debt, net of current portion |
3,331,941 | 3,364,302 | ||||||
| Deferred income taxes, net |
23,668 | 79,391 | ||||||
| Long-term liabilities |
91,943 | 75,943 | ||||||
|
|
|
|
|
|||||
| Total liabilities |
4,920,172 | 4,657,056 | ||||||
|
|
|
|
|
|||||
| Redeemable noncontrolling interests |
27,139 | 29,306 | ||||||
| Shareholders’ equity: |
||||||||
| Common stock, $0.01 par value, 137,398,625 shares authorized, 117,857,055 and 117,860,839 shares issued and outstanding at December 31, 2023 and 2022, respectively |
1,179 | 1,179 | ||||||
| Additional paid-in capital |
771,336 | 778,121 | ||||||
| Accumulated deficit |
(200,319 | ) | (45,716 | ) | ||||
| Accumulated other comprehensive income |
12,544 | 21,192 | ||||||
|
|
|
|
|
|||||
| Total shareholders’ equity |
584,740 | 754,776 | ||||||
|
|
|
|
|
|||||
| Noncontrolling interest |
670 | — | ||||||
|
|
|
|
|
|||||
| Total equity |
585,410 | 754,776 | ||||||
|
|
|
|
|
|||||
| Total liabilities, redeemable noncontrolling interests, and equity |
$ | 5,532,721 | $ | 5,441,138 | ||||
|
|
|
|
|
|||||
7
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2023 and 2022
(In thousands, except per share amounts)
(unaudited)
| For the Year Ended December 31, |
||||||||
| 2023 | 2022 | |||||||
| Revenues: |
||||||||
| Products |
$ | 6,522,450 | $ | 5,264,423 | ||||
| Services |
2,303,725 | 2,456,137 | ||||||
|
|
|
|
|
|||||
| Total revenues |
8,826,175 | 7,720,560 | ||||||
| Cost of goods |
5,840,716 | 4,635,404 | ||||||
| Cost of services |
1,551,665 | 1,730,912 | ||||||
|
|
|
|
|
|||||
| Gross profit |
1,433,794 | 1,354,244 | ||||||
| Selling, general and administrative expenses |
1,286,614 | 1,125,558 | ||||||
| Goodwill impairment loss |
— | 40,856 | ||||||
|
|
|
|
|
|||||
| Operating income |
147,180 | 187,830 | ||||||
| Interest expense, net |
324,593 | 233,584 | ||||||
|
|
|
|
|
|||||
| Loss before income taxes |
(177,413 | ) | (45,754 | ) | ||||
| Income tax (benefit) expense |
(20,578 | ) | 8,465 | |||||
|
|
|
|
|
|||||
| Net loss |
(156,835 | ) | (54,219 | ) | ||||
| Net loss attributable to noncontrolling interests |
(2,232 | ) | (312 | ) | ||||
|
|
|
|
|
|||||
| Net loss attributable to BrightSpring Health Services, Inc. and subsidiaries |
$ | (154,603 | ) | $ | (53,907 | ) | ||
|
|
|
|
|
|||||
| Net loss per common share attributable to BrightSpring Health Services, Inc. and subsidiaries: |
||||||||
| Loss per share - basic: |
$ | (1.31 | ) | $ | (0.46 | ) | ||
| Loss per share - diluted: |
$ | (1.31 | ) | $ | (0.46 | ) | ||
| Weighted average shares outstanding: |
||||||||
| Basic |
117,868 | 117,840 | ||||||
| Diluted |
117,868 | 117,840 | ||||||
8
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended December 31, 2023 and 2022
(In thousands, except per share amounts)
(Unaudited)
| For the Three Months Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenues: |
||||||||
| Products |
$ | 1,785,457 | $ | 1,379,092 | ||||
| Services |
589,087 | 591,544 | ||||||
|
|
|
|
|
|||||
| Total revenues |
2,374,544 | 1,970,636 | ||||||
| Cost of goods |
1,614,641 | 1,218,697 | ||||||
| Cost of services |
391,188 | 414,294 | ||||||
|
|
|
|
|
|||||
| Gross profit |
368,715 | 337,645 | ||||||
| Selling, general and administrative expenses |
300,453 | 288,623 | ||||||
| Goodwill impairment loss |
— | 25,456 | ||||||
|
|
|
|
|
|||||
| Operating income |
68,262 | 23,566 | ||||||
| Interest expense, net |
83,054 | 75,719 | ||||||
|
|
|
|
|
|||||
| Loss before income taxes |
(14,792 | ) | (52,153 | ) | ||||
| Income tax (benefit) expense |
(7,591 | ) | 4,530 | |||||
|
|
|
|
|
|||||
| Net loss |
(7,201 | ) | (56,683 | ) | ||||
| Net loss attributable to noncontrolling interests |
(664 | ) | (525 | ) | ||||
|
|
|
|
|
|||||
| Net loss attributable to BrightSpring Health Services, Inc. and subsidiaries |
$ | (6,537 | ) | $ | (56,158 | ) | ||
|
|
|
|
|
|||||
| Net loss per common share attributable to BrightSpring Health Services, Inc. and subsidiaries: |
||||||||
| Loss per share - basic: |
$ | (0.06 | ) | $ | (0.48 | ) | ||
| Loss per share - diluted: |
$ | (0.06 | ) | $ | (0.48 | ) | ||
| Weighted average shares outstanding: |
||||||||
| Basic |
117,857 | 117,858 | ||||||
| Diluted |
117,857 | 117,858 | ||||||
9
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023 and 2022
(In thousands)
(unaudited)
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating activities: |
||||||||
| Net loss |
$ | (156,835 | ) | $ | (54,219 | ) | ||
| Adjustments to reconcile net loss to cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
202,336 | 203,970 | ||||||
| Impairment of long-lived assets |
10,631 | 10,821 | ||||||
| Goodwill impairment |
— | 40,856 | ||||||
| Provision for credit losses |
23,237 | 15,065 | ||||||
| Amortization of deferred debt issuance costs |
20,916 | 20,439 | ||||||
| Share-based compensation |
3,917 | 3,547 | ||||||
| Deferred income taxes, net |
(52,632 | ) | (27,962 | ) | ||||
| Loss on divestiture |
— | 5,502 | ||||||
| Loss (gain) on disposition of fixed assets |
349 | (903 | ) | |||||
| Other |
(572 | ) | 2,696 | |||||
| Change in operating assets and liabilities, net of acquisitions and dispositions: |
||||||||
| Accounts receivable |
(127,246 | ) | (150,466 | ) | ||||
| Prepaid expenses and other current assets |
(34,899 | ) | (24,280 | ) | ||||
| Inventories |
28,660 | (131,833 | ) | |||||
| Trade accounts payable |
105,649 | 133,466 | ||||||
| Accrued expenses |
193,633 | (46,035 | ) | |||||
| Other assets and liabilities |
(6,361 | ) | (5,317 | ) | ||||
|
|
|
|
|
|||||
| Net cash provided by (used in) operating activities |
$ | 210,783 | $ | (4,653 | ) | |||
|
|
|
|
|
|||||
10
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
For the years ended December 31, 2023 and 2022
(In thousands)
(unaudited)
| For the Years Ended | ||||||||
| December 31, | ||||||||
| 2023 | 2022 | |||||||
| Investing activities: |
||||||||
| Purchases of property and equipment |
$ | (73,527 | ) | $ | (70,113 | ) | ||
| Acquisitions of businesses, net of cash acquired |
(63,058 | ) | (42,459 | ) | ||||
| Proceeds from sale of business, net of cash divested |
— | 155,793 | ||||||
| Other |
2,152 | 2,135 | ||||||
|
|
|
|
|
|||||
| Net cash (used in) provided by investing activities |
$ | (134,433 | ) | $ | 45,356 | |||
|
|
|
|
|
|||||
| Financing activities: |
||||||||
| Long-term debt repayments |
(30,441 | ) | (40,721 | ) | ||||
| Repayments of swingline debt, net |
(24,100 | ) | (17,300 | ) | ||||
| Repurchase of shares of common stock |
(650 | ) | — | |||||
| Shares issued under share-based compensation plan, including tax effects |
598 | 234 | ||||||
| Repurchase of stock options |
(10,000 | ) | — | |||||
| Payment of acquisition earn-outs |
(1,453 | ) | (4,364 | ) | ||||
| Distributions to redeemable noncontrolling interests |
— | (750 | ) | |||||
| Investment in noncontrolling interests |
735 | — | ||||||
| Payment of financing lease obligations |
(11,596 | ) | (10,909 | ) | ||||
|
|
|
|
|
|||||
| Net cash used in financing activities |
$ | (76,907 | ) | $ | (73,810 | ) | ||
|
|
|
|
|
|||||
| Net decrease in cash and cash equivalents |
(557 | ) | (33,107 | ) | ||||
| Cash and cash equivalents at beginning of year |
13,628 | 46,735 | ||||||
|
|
|
|
|
|||||
| Cash and cash equivalents at end of year |
$ | 13,071 | $ | 13,628 | ||||
|
|
|
|
|
|||||
| Supplemental disclosures of cash flow information: |
||||||||
| Cash paid for: |
||||||||
| Interest |
$ | 303,530 | $ | 213,308 | ||||
| Income taxes, net of refunds |
$ | 37,499 | $ | 28,851 | ||||
| Supplemental schedule of non-cash investing and financing activitites: |
||||||||
| Notes issued and contingent liabilitites assumed in connection with acquisitions |
$ | 7,519 | $ | 5,134 | ||||
| Financing lease obligations |
$ | 11,562 | $ | 10,652 | ||||
| Repurchases of common stock in accounts payable |
$ | 650 | $ | — | ||||
| Purchases of property and equipment in accounts payable |
$ | 12,981 | $ | 4,597 | ||||
| Acquisition consideration in accounts payable |
$ | 2,500 | $ | — | ||||
11
BRIGHTSPRING HEALTH SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF EBITDA AND ADJUSTED EBITDA
For the years and quarters ended December 31, 2023 and 2022
(In thousands)
The following table reconciles net loss to EBITDA and Adjusted EBITDA:
| ($ in thousands) | Year Ended | Quarter Ended | ||||||||||||||
| December 31, | December 31, | December 31, | December 31, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net loss |
$ | (156,835 | ) | $ | (54,219 | ) | $ | (7,201 | ) | $ | (56,683 | ) | ||||
| Income tax (benefit) expense |
(20,578 | ) | 8,465 | (7,591 | ) | 4,530 | ||||||||||
| Interest expense, net |
324,593 | 233,584 | 83,054 | 75,719 | ||||||||||||
| Depreciation and amortization |
202,336 | 203,970 | 51,012 | 53,311 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| EBITDA |
$ | 349,516 | $ | 391,800 | $ | 119,274 | $ | 76,877 | ||||||||
| Non-cash share-based compensation |
3,917 | 3,547 | 1,817 | 1,297 | ||||||||||||
| Acquisition, integration, and transaction-related costs |
20,734 | 38,023 | 6,980 | 21,249 | ||||||||||||
| Restructuring and divestiture-related and other costs |
21,848 | 29,320 | 5,676 | 6,834 | ||||||||||||
| Goodwill impairment |
— | 40,856 | — | 25,456 | ||||||||||||
| Legal costs and settlements |
127,695 | 9,157 | 5,989 | 3,520 | ||||||||||||
| Significant projects |
8,379 | 3,570 | 1,480 | 1,477 | ||||||||||||
| Management fee |
5,631 | 4,922 | 1,383 | 1,433 | ||||||||||||
| Unreimbursed COVID-19 related costs |
88 | 1,348 | — | 951 | ||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Total adjustments |
$ | 188,292 | $ | 130,743 | $ | 23,325 | $ | 62,217 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Adjusted EBITDA |
$ | 537,808 | $ | 522,543 | $ | 142,599 | $ | 139,094 | ||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| Revenue |
8,826,175 | 7,720,560 | 2,374,544 | 1,970,636 | ||||||||||||
| Adjusted EBITDA Margin |
6.1 | % | 6.8 | % | 6.0 | % | 7.1 | % | ||||||||
12