What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2025-02-26 compared with 2024-02-22 · 161 added, 197 removed, 710 unchanged (34% of the section changed)

25 unchanged sentences

Sufficiency of audit evidence over the evaluation of transaction price adjustments

As discussed in Notes 2 and 4 to the consolidated financial statements, net revenue is reported at the net realizable value amount that reflects the consideration the Company expects to receive in exchange for providing services.

Revenues are from commercial payers, government payers, and patients for infusion therapy and other ancillary health care services.

1 unchanged sentence

We identified the sufficiency of audit evidence over the evaluation of transaction price adjustments as a critical audit matter.

Complex auditor judgment was required to evaluate the sufficiency of audit evidence obtained due to the large volume of data and the information technology (IT) applications utilized in the transaction price adjustment process to capture and aggregate the data.

Complex auditor judgment was required to evaluate the sufficiency of audit evidence obtained due to the large volume of data and information technology (IT) applications utilized in the transaction price adjustment process to capture and aggregate the data.

The following are the primary procedures we performed to address this critical audit matter.

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Other, net 4,831 89,865 14,218

Total other income (expense) 44,147 ( 34,463 ) ( 74,347 )

Total other (expense) income ( 38,234 ) 44,147 ( 34,463 )

INCOME BEFORE INCOME TAXES 283,599 358,742 205,768

INCOME TAX EXPENSE (BENEFIT) 91,652 55,212 ( 23,404 )

INCOME TAX EXPENSE 71,776 91,652 55,212

NET INCOME $ 211,823 $ 267,090 $ 150,556

OTHER COMPREHENSIVE (LOSS) INCOME, NET OF TAX:

Change in unrealized (losses) gains on cash flow hedges, net of income tax benefit (expense) of $ 2,158 , $( 7,259 ) and $ 0 , respectively

Change in unrealized (loss) gain on cash flow hedges, net of income tax benefit (expense) of $ 1,284 , $ 2,158 and $( 7,259 ), respectively

$ ( 3,931 ) $ ( 6,181 ) $ 21,610

18 unchanged sentences

Deferred income taxes - net 12,656 12,766 49,187

(Gain)/loss on sale of assets — ( 9,403 ) 767

Gain on sale of assets — — ( 9,403 )

Loss on extinguishment of debt 377 — —

2 unchanged sentences

Stock-based incentive compensation expense 36,143 30,479 16,783

Capital distribution from equity method investments 4,000 5,875 2,900

Distribution from equity method investments 2,400 4,000 5,875

Other adjustments ( 4,504 ) ( 1,244 ) —

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CASH FLOWS FROM FINANCING ACTIVITIES:

Exercise of stock options, vesting of restricted stock, and related tax withholdings ( 3,115 ) 352 ( 32 )

Purchase of company stock ( 250,261 ) — —

Stock-based compensation tax withholdings ( 12,382 ) ( 3,115 ) 352

Purchase of company stock and related excise taxes ( 252,726 ) ( 250,261 ) —

Proceeds from warrant exercises — — 20,916

1 unchanged sentence

Repayments of debt principal ( 6,384 ) ( 6,000 ) ( 6,000 )

Retirement of debt obligations — — ( 910,345 )

Deferred financing costs ( 77 ) — —

Debt prepayment fees — — ( 2,458 )

Other financing activities 3,404 ( 5,750 ) —

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(IN THOUSANDS)

Preferred Stock Common Stock Treasury Stock Paid-in Capital Retained Earnings

(Accumulated Deficit) Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Preferred Stock Common Stock Treasury Stock Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity

Balance - December 31, 2021 $ — $ 18 $ ( 2,403 ) $ 1,138,855 $ 39,867 $ ( 451 ) $ 1,175,886

1 unchanged sentence

Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — 352 — — 352

Exercise of warrants — — — 20,916 — — 20,916

Net income — — — — 150,556 — 150,556

3 unchanged sentences

Exercise of stock options, vesting of restricted stock, and related tax withholdings — — — ( 3,115 ) — — ( 3,115 )

Exercise of warrants — — — 20,916 — — 20,916

Purchase of company stock, and related tax effects — — ( 252,704 ) — — — ( 252,704 )

Net income — — — — 267,090 — 267,090

Other comprehensive income — — — — — 21,610 21,610

Other comprehensive loss — — — — — ( 6,181 ) ( 6,181 )

Balance - December 31, 2023 $ — $ 18 $ ( 255,107 ) $ 1,204,270 $ 457,513 $ 14,978 $ 1,421,672

11 unchanged sentences

During the year ended December 31, 2023, HC Group Holdings I, LLC.

(“HC I”) completed sales of 23,771,926 shares of its Option Care common stock.

(“HC I”), a former affiliated shareholder, completed sales of 23,771,926 shares of its Option Care common stock which resulted in the full divestment by HC 1 at that time.

In addition, the Company repurchased 2,475,166 shares from HC I on March 3, 2023 under the Company’s share repurchase program.

See Note 16, Stockholders’ Equity , for further discussion of the Company’s share repurchase program.

As of December 31, 2023, HC I no longer holds shares of the Company’s common stock.

Option Care Health, and its wholly-owned subsidiaries, provides infusion therapy and other ancillary healthcare services through a national network of 92 full service pharmacies and 93 stand-alone ambulatory infusion sites.

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Cash and Cash Equivalents — The Company considers all highly liquid investments with original maturities of three months or less to be cash equivalents.

As of December 31, 2023, cash equivalents consisted of money market funds.

As of December 31, 2024 and 2023, cash equivalents consisted of money market funds.

Accounts Receivable — The Company’s accounts receivable are reported at the net realizable value amount that reflects the consideration the Company expects to receive in exchange for providing services, which is inclusive of adjustments for price concessions.

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In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), an allowance for doubtful accounts is established only as a result of an adverse change in the Company’s payers’ ability to pay outstanding billings.

The Company had no allowance for doubtful accounts as of December 31, 2023 and 2022.

In addition, the company assesses if there have been any changes to historical credit losses to determine if an allowance for credit losses is needed.

The Company had an immaterial allowance for doubtful accounts and credit losses as of December 31, 2024 and 2023.

Included in accounts receivable are earned but unbilled gross receivables of $ 105.3 million and $ 89.1 million as of December 31, 2024 and 2023, respectively.

1 unchanged sentence

See Revenue Recognition for a further discussion of the Company’s revenue recognition policy.

Inventories — Inventories, which consists primarily of pharmaceuticals, is stated at the lower of first‑in, first‑out cost or net realizable value basis, which the Company believes is reflective of the physical flow of inventories.

Inventories — Inventories, which consist primarily of pharmaceuticals, is stated at the lower of first‑in, first‑out cost or net realizable value basis, which the Company believes is reflective of the physical flow of inventories.

Prepaid Expenses and Other Current Assets — Included in prepaid expenses and other current assets are rebates receivable from pharmaceutical and medical supply manufacturers of $ 54.4 million and $ 52.0 million for the years ended December 31, 2024 and 2023, respectively.

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Tenant improvement allowances are recognized through the ROU asset as a reduction of expense over the term of the lease.

Leases may contain rent escalations, however the Company recognizes the lease expense on a straight-line basis over the expected lease term.

Leases may contain rent escalations;

however, the Company recognizes the lease expense on a straight-line basis over the expected lease term.

The Company reviews the terms of any lease renewal options to determine if it is reasonably certain that the renewal options will be exercised.

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The Company accounts for goodwill under ASC Topic 350, Intangibles - Goodwill and Other.

The Company tests goodwill for impairment annually, or more frequently whenever events or circumstances indicate impairment may exist.

The Company tests goodwill for impairment annually, or more frequently whenever events or circumstances indicate that impairment may exist.

Goodwill is stated at cost less accumulated impairment losses.

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The Company assesses long‑lived assets for impairment whenever events or circumstances indicate that a certain asset or asset group may be impaired.

If circumstances require a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.

If circumstances require that a long-lived asset or asset group be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount.

If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flows basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value.

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Interest and penalties related to unrecognized tax benefits are reported in income tax expense (benefit).

Tax related interest and penalties are classified as a component of income tax expense (benefit).

Concentrations of Business Risk — The Company generates revenue from managed care contracts and other agreements with commercial third-party payers.

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however, Option Care Health offers a financial assistance program for patients that meet certain defined hardship criteria.

For the year ended December 31, 2024, approximately 58 % of the Company’s pharmaceutical and medical supply purchases were from three vendors.

For the years ended December 31, 2023 and 2022, approximately 72 % and 73 %, respectively, of the Company’s pharmaceutical and medical supply purchases were from four vendors.

Although there are a limited number of suppliers, the Company believes that other vendors could provide similar products on comparable terms.

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.

However, a change in suppliers could cause delays in service delivery and possible losses in revenue or decreased gross profit, which could adversely affect the Company’s financial condition or operating results.

Fair Value Measurements — The fair value measurement accounting standard, ASC Topic 820, Fair Value Measurement (“ASC 820”), provides a framework for measuring fair value and defines fair value as the price that would be received to sell an asset or paid to transfer a liability.

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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.

Recently Issued Accounting Pronouncements — In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Recently Issued Accounting Pronouncements — In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses .

This ASU improves the disclosures around a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, SG&A, and research and development).

The amendments in this ASU do not change or remove current presentation requirements or current expense disclosure requirements.

However, the amendments affect where this information appears in the notes to financial statements because entities are required to include certain current disclosures in the same tabular format disclosure as the other disaggregation requirements in the amendments.

The Company is required to adopt this ASU for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of this ASU on its results of operations, cash flows, financial position, and disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

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The Company is required to adopt this ASU for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

Once adopted the Company will apply the ASU retrospectively to all prior periods presented in the financial statements.

The Company is currently evaluating the impact of this ASU on its results of operations, cash flows, financial position, and disclosures.

This ASU was adopted during the year ended December 31, 2024 and applied retrospectively to all prior periods presented in the financial statements.

The adoption did not have any material impact on the Company’s results of operations, cash flows, financial position, or disclosures.

See Note 18, Segment Reporting , for further discussion.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements:

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— On May 3, 2023, the Company entered into a definitive merger agreement with Amedisys.

Under the terms of the merger agreement, the Company would issue new shares of its common stock to Amedisys’s stockholders, which would result in the Company’s stockholders holding approximately 64.5 % of the combined company.

Under the terms of the merger agreement, the Company would issue new shares of its common stock to Amedisys stockholders, which would result in the Company’s stockholders holding approximately 64.5 % of the combined company.

On June 26, 2023, the Company entered into an agreement to terminate the Amedisys Merger Agreement.

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Revitalized, LLC — In May 2023, pursuant to the equity purchase agreement dated May 1, 2023, the Company completed the acquisition of 100 % of the membership interests in Revitalized, LLC for a purchase price, net of cash acquired, of $ 12.5 million, which primarily consisted of $ 6.7 million of goodwill and $ 5.5 million of intangible assets.

Respiratory Therapy Asset Sale — The Company closed the transaction in December 2022, for a sale price of $ 18.4 million comprised of $ 14.7 million in proceeds received at the time of closing and $ 3.7 million recorded as a current asset was paid in the year ended December 31, 2023.

Pursuant to the final transaction terms, $ 8.8 million of assets were sold, along with $ 0.7 million of liabilities that were previously classified as held for sale at the lower of their carrying amount or fair values less cost to sell.

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(“RHI”) for a purchase price, net of cash acquired, of $ 27.4 million.

The allocation of the purchase price of RHI 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 final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired (in thousands):

Accounts receivable $ 686

Intangible assets 5,449

Other assets 394

Accounts payable and other liabilities ( 434 )

Fair value identifiable assets and liabilities 6,095

Goodwill (1) 21,323

Cash acquired 201

Purchase price 27,619

cash acquired ( 201 )

Purchase price, net of cash acquired $ 27,418

(1) Goodwill is attributable to cost synergies from procurement and operational efficiencies and elimination of duplicative administrative costs.

Specialty Pharmacy Nursing Network, Inc.

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(“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.

As of December 31, 2022, the Company finalized the purchase price allocation of the acquisition.

Certain adjustments were made to preliminary valuation amounts related to accrued compensation.

The following is a final allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired, (in thousands):

Accounts receivable $ 2,303

Intangible assets 25,580

Other assets 600

Accrued compensation ( 1,115 )

Accounts payable and other liabilities ( 1,168 )

Fair value identifiable assets and liabilities 26,200

Goodwill (1) 33,746

Cash acquired 661

Purchase price 60,607

cash acquired ( 661 )

Purchase price, net of cash acquired $ 59,946

(1) Goodwill is attributable to cost synergies from operational efficiencies and establishing a more comprehensive clinical platform through the Company’s national infrastructure and SPNN’s nursing network.

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, which primarily consisted of $ 17.4 million of goodwill, $ 4.2 million of intangible assets, $ 2.7 million of accounts receivable, $ 2.0 million in inventories, and $( 6.7 ) million of accounts payable.

Infinity Infusion Nursing LLC — In October 2021, pursuant to the equity purchase agreement dated October 1, 2021, the Company completed the 100 % acquisition of the equity interest in Infinity Infusion LLC (“Infinity”) for a purchase price, net of cash acquired of $ 59.6 million, which is comprised of a $ 50.0 million cash payment, two contingent $ 5.0 million payments (included as a non-cash change in other noncurrent assets and liabilities within the consolidated statements of cash flows), and $( 0.4 ) million of other purchase price adjustments.

The allocation of the purchase price of Infinity 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 Company has finalized the purchase price allocation of the acquisition and no purchase accounting adjustments were made.

The following is an allocation of acquired identifiable assets and assumed liabilities, net of cash acquired, (in thousands):

Accounts receivable $ 2,219

Intangible assets 25,400

Accounts payable and other assumed liabilities ( 539 )

Fair value identifiable assets and liabilities 27,080

Goodwill (1) 32,524

Cash acquired 1,426

Purchase price 61,030

cash acquired ( 1,426 )

Purchase price, net of cash acquired $ 59,604

BioCure Asset Acquisition — In April 2021, pursuant to the asset purchase agreement dated April 7, 2021, the Company completed the acquisition of certain assets of BioCure, LLC for a purchase price of $ 18.9 million, which is comprised of $ 18.3 million of intangible assets, net and $ 0.6 million of inventories.

The following table sets forth the net revenue earned by category of payer for the years ended December 31, 2024, 2023 and 2022 (in thousands):

16 unchanged sentences

63,635 75,213 42,913

State income tax expense:

State income tax expense (benefit):

Current 10,597 20,253 9,182

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State and local income taxes net of federal tax benefit 3.5 % 4.8 % 5.0 %

Non-deductible expenses 0.1 % 0.2 % 0.3 %

Valuation allowance ( 0.8 ) % ( 1.5 ) % 0.0 %

Non-deductible and stock-based compensation 0.7 % 0.4 % 0.0 %

Share based compensation impacts 1.2 % 0.7 % 0.4 %

Other, net 0.4 % 0.5 % 0.4 %

Effective income tax rate 25.3 % 25.5 % 26.8 %

The Company recorded income tax expense of $ 91.7 million and $ 55.2 million, which represents an effective tax rate of 25.5 % and 26.8 % for the years ended December 31, 2023 and 2022, respectively.

The Company recorded income tax expense of $ 71.8 million, $ 91.7 million, and $ 55.2 million, which represents an effective tax rate of 25.3 %, 25.5 %, and 26.8 % for the years ended December 31, 2024, 2023, and 2022, respectively.

In March 2024, the Company released $ 2.2 million of state valuation allowance.

The variance in the Company’s effective tax rate of 25.3 % for the year ended December 31, 2024 compared to the federal statutory rate of 21% is primarily attributable to the difference in state taxes, various non-deductible expenses, and a change in state valuation allowance.

The variance in the Company’s effective tax rate of 25.3 % and 25.5 % for the years ended December 31, 2024 and 2023, respectively, is also primarily attributable to the difference in state taxes, various non-deductible expenses, and a change in state valuation allowance.

The income tax expense for the year ended December 31, 2023 includes $ 21.8 million of tax expense related to the Termination Fee payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses.

In September 2023, the Company released $ 5.8 million of state valuation allowance.

The variance in the Company’s effective tax rate of 25.5 % and 26.8 % for the years ended December 31, 2023 and 2022, respectively, is primarily attributable to the difference in state taxes, various non-deductible expenses, and a change in state valuation allowance.

The variance in the Company’s effective tax rate of 25.5 % for the year ended December 31, 2023 compared to the federal statutory rate of 21% is also primarily attributable to state taxes, various non-deductible expenses, and a change in state valuation allowance.

The variance in the Company’s effective tax rate of 26.8 % and negative 20.1 % for the years ended December 31, 2022 and 2021, respectively, is primarily attributable to the release of the Company’s federal valuation allowance for the year ended December 31, 2021.

The variance in the Company’s effective tax rate of 25.5 % and 26.8 % for the years ended December 31, 2023 and 2022, respectively, is primarily attributable to the difference in state taxes, various nondeductible expenses, and a change in state valuation allowance.

The components of deferred income tax assets and liabilities were as follows as of December 31, 2024 and 2023 (in thousands):

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On a quarterly basis, the Company evaluates all positive and negative evidence in determining if the valuation allowance is fairly stated.

The Company is subject to taxation in the United States and various states.

At December 31, 2024, the Company had $ 35.6 million of tax-effected federal NOL carryforwards all of which are currently available to offset future taxable income in the United States and reflected as a deferred tax asset of the company.

Tax-effected federal NOL carryforwards of $ 24.6 million expire beginning in 2028 through 2036, and $ 11.0 million of tax-effected federal NOLs have an indefinite carryforward period.

At December 31, 2022, the Company had $ 42.3 million of tax-effected federal NOLs.

At December 31, 2023 and 2022, the Company had $ 13.8 million and $ 29.4 million tax-effected amounts of interest limitation carryforwards which have an indefinite carryforward period.

At December 31, 2023 and 2022, the Company also had $ 17.7 million and $ 19.5 million tax-effected amounts of cumulative state NOL carryforwards available to offset future taxable income in various states.

At December 31, 2024, the Company had $ 5.8 million tax-effected amounts of interest limitation carryforwards which have an indefinite carryforward period.

At December 31, 2024, the Company also had $ 15.3 million tax-effected amounts of cumulative state NOL carryforwards available to offset future taxable income in various states.

These state NOL carryforwards will begin to expire beginning in 2025 through 2043, with some having an indefinite carryforward period.

At December 31, 2024, 2023 and 2022, there were no unrecognized tax benefits for uncertain tax positions.

Tax related interest and penalties are classified as a component of income tax expense.

The following table presents the valuation allowance for deferred tax assets for the years ended December 31, 2024, 2023 and 2022 (in thousands):

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Valuation allowance for deferred tax assets $ 6,371 $ ( 3,034 ) $ — $ 3,337

Currently, the Company is not subject to any U.S.

Federal income tax audits.

The Company is subject to various state tax audits and believes that the outcome of these audits will not have a material impact on the Company.

The company files income tax returns in the U.S.

and various state and local jurisdictions.

There are no ongoing Federal or state income tax audits as of December 31, 2024.

The statute remains open for examination by the Internal Revenue Service beginning with year 2021 in state jurisdictions for periods beginning in 2020.

EARNINGS PER SHARE

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Performance stock unit awards 286,881 — —

The following table presents the Company’s basic earnings per share and shares outstanding (in thousands, except per share data):

The following tables present the Company’s basic and diluted earnings per share and shares outstanding (in thousands, except per share data):

Year Ended December 31,

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Earnings per common share, basic $ 1.23 $ 1.49 $ 0.83

(1) Net income for the year ended December 31, 2023 includes $ 63.1 million related to the termination payment received on behalf of Amedisys, under the terms of the Mutual Termination Agreement, net of merger-related expenses and taxes.

See Note 3, Business Acquisitions and Divestitures , for further discussion.

In addition, net income includes approximately $ 5.3 million of other non-operating income.

(2) Net income for the year ended December 31, 2022 includes the impact of the Company’s Respiratory Therapy Asset Sale.

See Note 3, Business Acquisitions and Divestitures , for further discussion.

(3) Net income for the year ended December 31, 2021 includes the impact of the Company’s release of its valuation allowance.

The following table presents the Company’s diluted earnings per share and shares outstanding (in thousands, except per share data):

Year Ended December 31,

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See Note 3, Business Acquisitions and Divestitures , for further discussion.

In addition, net income includes approximately $ 5.3 million of other non-operating income.

(2) Net income for the year ended December 31, 2022 includes the impact of the Company’s Respiratory Therapy Asset Sale.

See Note 3, Business Acquisitions and Divestitures , for further discussion.

(3) Net income for the year ended December 31, 2021 includes the impact of the Company’s release of its valuation allowance.

During the years ended December 31, 2024, 2023 and 2022, the Company incurred operating lease expenses of $ 32.7 million, $ 30.6 million, and $ 29.1 million, respectively, including short-term lease expenses, which were included as a component of selling, general and administrative expenses in the consolidated statements of comprehensive income.

As of December 31, 2023, the weighted-average remaining lease term was 6.8 years, and the weighted-average discount rate was 6.16 %.

As of December 31, 2024 and December 31, 2023, the weighted-average remaining lease term was 6.5 years and 6.8 years, respectively, and the weighted-average discount rate was 6.56 % and 6.16 %, respectively.

Operating leases mature as follows (in thousands):

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Present value of lease liabilities $ 106,820

During the year ended December 31, 2023, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the consolidated statements of cash flows of $ 30.5 million related to the increases in the operating lease ROU asset and operating lease liabilities.

During the years ended December 31, 2024, 2023 and 2022, the Company commenced new leases, extensions and amendments, resulting in non-cash operating activities in the consolidated statements of cash flows of $ 25.0 million, $ 30.5 million, and $ 17.2 million, respectively, related to the increases in the operating lease ROU asset and operating lease liabilities.

As of December 31, 2024, the Company did not have any significant operating or financing leases that had not yet commenced.

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and the results of testing for recoverability of a significant asset group within a reporting unit.

A qualitative impairment analysis was performed in the fourth quarter of 2023, 2022 and 2021, to assess whether it is more likely than not that the fair value of the Company’s reporting unit is less than its carrying value.

A qualitative impairment analysis was performed in the fourth quarter of 2024, 2023 and 2022, to assess whether it is more likely than not that the fair value of the Company’s reporting units are less than their carrying value.

The Company assessed relevant events and circumstances including macroeconomic conditions, industry and market considerations, overall financial performance, entity-specific events, and changes in the Company’s stock price.

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Acquisitions 54,543

Purchase accounting adjustments 1,317

Balance at December 31, 2022 $ 1,533,424

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Principal Amount Discount Debt Issuance Costs Net Balance

ABL Facility $ — $ — $ — $ —

Revolver Facility $ — $ — $ — $ —

First Lien Term Loan 588,000 ( 6,974 ) ( 9,678 ) 571,348

3 unchanged sentences

Total long-term debt $ 1,056,650

On December 7, 2023, the Company entered into the second amendment (the “Amendment”) to the amended and restated First Lien Credit Agreement dated as of October 27, 2021.

The Amendment, among other things, provides for revolving credit commitments by the applicable Revolving Credit Lenders in an aggregate amount of $ 400.0 million (the “Revolver Facility”) pursuant to which such lenders have agreed to make Revolving Credit Loans to the Company.

On May 8, 2024, the Company entered into the Third Amendment to the amended and restated First Lien Credit Agreement dated as of October 27, 2021.

The Third Amendment, among other things, (i) increases borrowings by $ 50.0 million and (ii) reduces the interest rate on the First Lien Term Loan from Term SOFR (including a credit spread adjustment) plus 2.75 % to Term SOFR plus 2.25 % and removes the credit spread adjustment with respect to such First Lien Term Loan.

The principal balance of the First Lien Term Loan is repayable in quarterly installments of $ 1.6 million plus interest, with a final payment of all remaining outstanding principal due on October 27, 2028.

The quarterly principal payments commenced in March 2022.

Under the Third Amendment, interest on the First Lien Term Loan is payable monthly on either (i) SOFR (with a floor of 0.50 % per annum) plus an applicable margin of 2.25 % for Term SOFR Loans (as such term is defined in the Third Amendment);

or (ii) a base rate determined in accordance with the Third Amendment, plus 1.25 % for Base Rate Loans (as such term is defined in the Third Amendment).

The interest rate on the First Lien Term Loan was 6.82 % and 8.21 % as of December 31, 2024 and 2023, respectively.

The weighted average interest rate incurred on the First Lien Term Loan was 7.61 % and 7.83 % for the years ended December 31, 2024 and 2023, respectively.

The Company assessed whether the repayment of the First Lien Term Loan indebtedness resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping lenders as follows:

(i) Lenders participating in both the First Lien Term Loan and Senior Notes;

(ii) previous lenders that exited;

and (iii) new lenders.

The Company determined that $ 0.4 million of the First Lien Term Loan were extinguished.

The First Lien Term Loan had insubstantial modifications for lenders that participated in both debt instruments, which resulted in a cash inflow from financing activities of $ 50.0 million in the consolidated statements of cash flows.

The Company incurred $ 1.6 million in fees, of which $ 0.1 million was capitalized, relative to the First Lien Term Loan and an immaterial amount of the total fees incurred was netted against the $ 50.0 million of debt proceeds as financing activities within the consolidated statements of cash flows.

The Company recognized a loss on extinguishment of debt of $ 0.4 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income.

Effective June 30, 2023, the Company entered into an agreement, dated as of June 8, 2023, to amend the First Lien Term Loan to replace LIBOR and related definitions and provisions with SOFR as the new reference rate.

The Company entered into the First Lien Term Loan Agreement (the “First Lien Credit Agreement Amendment”), which commenced in October 2021 (the “October 2021 Refinancing”) to provide $ 600.0 million of refinanced borrowings.

On December 7, 2023, the Company entered into the Second Amendment to the amended and restated First Lien Credit Agreement dated as of October 27, 2021.

The Second Amendment, among other things, creates a Revolver Facility which provides for borrowings up to $ 400.0 million.

As of December 31, 2024, the Company had $ 4.1 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $ 395.9 million.

As of December 31, 2023, the Company had $ 5.3 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the Revolver Facility of $ 394.7 million.

The Revolver Facility matures on the date that is the earlier of (i) December 7, 2028 and (ii) the date that is 91 days prior to the stated maturity date applicable to any Term B Loans.

Borrowings under the Revolver Facility bear interest at a rate equal to, at the option of the Company, either (i) the Term Secured Overnight Financing Rate (“SOFR”) applicable thereto plus the Applicable Rate or (ii) the then applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the Amendment, (A) for Term SOFR Loans, 1.75 %, (B) for Base Rate Loans, 0.75 % and (ii) thereafter, the following percentages per annum, based upon the Total Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to the terms of the Credit Agreement.

The table below illustrates the aforementioned interest rate terms:

Pricing Level Total Net Leverage Ratio Applicable Rate for Term SOFR Loans Applicable Rate for Base Rate Loans

I Greater than or equal to 3.00x 2.25 % 1.25 %

II Less than 3.00x, but greater than or equal to 2.25x 2.00 % 1.00 %

III Less than 2.25x, but greater than or equal to 1.50x 1.75 % 0.75 %

IV Less than 1.50x, but greater than or equal to 1.00x 1.50 % 0.50 %

V Less than 1.00x 1.25 % 0.25 %

Concurrently with the creation of the Revolver Facility, the Company terminated the ABL Credit Agreement.

Borrowings under the Revolver Facility bear interest at a rate equal to, at the option of the Company, either (i) the Term SOFR applicable thereto plus the Applicable Rate or (ii) the then-applicable Base Rate plus the Applicable Rate, which Applicable Rate shall be, subject to certain caveats thereto, as follows (i) until delivery of financial statements and related Compliance Certificate for the first full fiscal quarter ending after the effective date of the Second Amendment, (A) for Term SOFR Loans, 1.75 %, or (B) for Base Rate Loans, 0.75 % and (ii) thereafter, the Applicable Rate for Term SOFR Loans and Base Rate Loans, based upon the Total Net Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to the terms of the Credit Agreement.

Concurrently with the creation of the Revolver Facility, the Company terminated the asset-based lending revolving credit facility (the “ABL Facility”) with a maturity date of October 27, 2026.

Prior to the transition to the Revolver Facility, the ABL Facility had been in effect from August 6, 2019 to December 7, 2023.

As of December 31, 2022, the Company’s ABL Facility provided for borrowings up to $ 175.0 million and had a maturity date of October 27, 2026.

Effective January 13, 2023, the Company entered into an agreement to amend the ABL Facility and increase the amount of borrowing availability by $ 50.0 million to $ 225.0 million total borrowing availability.

Effective January 13, 2023, the Company entered into an agreement to amend the ABL Facility and increase the amount of borrowing availability from $ 175.0 million by $ 50.0 million to $ 225.0 million total borrowing availability.

As a result of the amended agreement, SOFR was established as the new reference rate, replacing LIBOR.

Prior to the termination of the ABL Facility in December 2023, the ABL Facility bore interest at a rate equal to, at the Company’s election, either (i) a base rate determined in accordance with the ABL Credit Agreement plus an applicable margin, which is equal to between 0.25 % and 0.75 % based on the historical excess availability as a percentage of the Line Cap (as such term is defined in the ABL Credit Agreement);

and (ii) SOFR plus an applicable margin, which is equal to between 1.25 % and 1.75 % based on the historical excess availability as a percentage of the Line Cap.

and (ii) SOFR (with a floor of — % per annum) plus an applicable margin, which is equal to between 1.25 % and 1.75 % based on the historical excess availability as a percentage of the Line Cap.

The ABL Facility contained commitment fees payable on the unused portion ranging from 0.25 % to 0.375 %, depending on various factors including the Company’s leverage ratio, type of loan and rate type, and letter of credit fees of 2.50 %.

Borrowings under the ABL Facility were secured by a first priority security interest in the Company’s and each of its subsidiaries’ inventory, accounts receivable, cash, deposit accounts and certain assets and property related thereto (the “ABL Priority Collateral”), in each case subject to certain exceptions, and a third priority security interest in each of the Company’s subsidiaries’ capital stock (subject to certain exceptions) and substantially all of the Company’s property and assets (other than the ABL Priority Collateral).

The Company had $ 6.7 million of undrawn letters of credit issued and outstanding, resulting in net borrowing availability under the ABL Facility of $ 168.3 million, as of December 31, 2022.

The First Lien Term Loan (the “First Lien Term Loan Facility”) is charged an interest rate equal to, at the Company’s option, either (i) SOFR (with a floor of 0.50 % per annum) plus an applicable margin of 2.75 % for Term SOFR Loans (as such term is defined in the First Lien Credit Agreement Amendment);

and (ii) a base rate determined in accordance with the First Lien Credit Agreement Amendment, plus 1.75 % for Base Rate Loans (as such term is defined in the First Lien Credit Agreement Amendment).

The First Lien Term Loan Facility is repayable in quarterly installments, which began in March 2022, and matures on October 27, 2028.

The interest rate on the First Lien Term Loan was 8.21 % and 6.82 % as of December 31, 2023 and 2022, respectively.

The weighted average interest rate incurred on the First Lien Term Loan was 7.83 % and 4.52 % for the years ended December 31, 2023 and 2022, respectively.

In conjunction with the October 2021 Refinancing, the Company also issued $ 500.0 million in aggregate principal of unsecured senior notes (“Senior Notes”).

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The weighted average interest rate incurred on the Senior Notes was 4.375 % for both years ended December 31, 2024 and 2023.

The Company assessed whether the October 2021 Refinancing resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping lenders as follows:

(i) Lenders continuing to participate in either the First Lien Term Loan Facility and Senior Notes;

(ii) previous lenders that exited;

and (iii) new lenders.

The Company determined that $ 35.7 million of the First Lien Term Loan was extinguished, which was disclosed as an outflow from financing activities in the condensed consolidated statements of cash flows.

The First Lien Term Loan had insubstantial modifications for lenders that continued to participate in either debt instrument, which resulted in a cash outflow from financing activities of $ 558.3 million in the consolidated statements of cash flows.

The Company determined that $ 501.4 million of new debt was issued related to the First Lien Term Loan, which is disclosed as an inflow from financing activities in the consolidated statements of cash flows.

In connection with the refinancing of the First Lien Term Loan and issuance of the Senior Notes, the Company incurred $ 10.7 million in debt issuance costs and third-party fees, of which $ 8.8 million was capitalized, $ 1.7 million was expensed as a component of other expense and $ 0.2 million was expensed as a loss on extinguishment as a component of other expense in the consolidated statements of comprehensive income.

Further, $ 1.5 million of the total fees incurred of $ 10.7 million was netted against the $ 501.4 million of proceeds from debt as a component of the cash flows from financing activities, $ 7.4 million was presented as deferred financing costs as a component of cash flows from financing activities, and the remaining $ 1.8 million was included in cash flows from operating activities in the consolidated statements of cash flows.

The Company recognized a loss on extinguishment of debt of $ 1.0 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income, of which $ 0.2 million related to debt issuance costs incurred with the First Lien Term Loan refinancing and issuance of the Senior Notes, as discussed above, and $ 0.8 million related to existing deferred financing fees that were written off upon extinguishment within the consolidated statements of comprehensive income and cash flows during the year ended December 31, 2021.

Prior to the October 2021 Refinancing, the Company entered into an amendment on the First Lien Term Loan in January 2021 (the “January 2021 Refinancing”) which resulted in additional First Lien Term Loan indebtedness.

The proceeds of the First Lien Term Loan indebtedness were used to prepay the remaining balance of the previous senior secured second lien pay-in-kind toggle floating rate notes due 2027 (“Second Lien Notes”).

The Company assessed whether the repayment of the Second Lien Notes by issuing incremental First Lien Term Loan indebtedness resulted in an insubstantial modification or an extinguishment of the existing debt for each loan in the syndication by grouping lenders as follows:

(i) Lenders participating in both the First Lien Term Loan and Second Lien Notes;

(ii) previous lenders that exited;

and (iii) new lenders.

The Company determined that $ 161.2 million of the First Lien Term Loan was extinguished and $ 122.9 million of the $ 150.0 million second lien term loan (“Second Lien Term Loan”) was extinguished, which is disclosed as an outflow from financing activities in the consolidated statements of cash flows.

The First Lien Term Loan and Second Lien Notes had insubstantial modifications for lenders that participated in both debt instruments, which resulted in a cash outflow from financing activities of $ 352.0 million in the consolidated statements of cash flows.

The Company determined that $ 356.2 million of new debt was issued related to the First Lien Term Loan, which is disclosed as an inflow from financing activities in the consolidated statements of cash flows.

In connection with the prepayment of the Second Lien Notes and incremental First Lien Term Loan indebtedness, the Company incurred $ 7.2 million in debt issuance costs and third-party fees, of which $ 3.7 million was capitalized, $ 0.9 million was expensed as a component of other expense and $ 2.6 million was expensed as a loss on extinguishment as a component of other expense in the consolidated statements of comprehensive income.

Further, $ 1.0 million of the total fees incurred of $ 7.2 million was netted against the $ 356.2 million of proceeds from debt as a component of the cash flows from financing activities, $ 2.9 million was presented as deferred financing costs as a component of cash flows from financing activities, $ 2.4 million was presented as debt prepayment fees as a component of cash flows from financing activities, and the remaining $ 0.9 million was included in cash flows from operating activities in the consolidated statements of cash flows.

The Company recognized a loss on extinguishment of debt of $ 12.4 million included in the line entitled “Other, net” in the consolidated statements of comprehensive income, of which $ 2.6 million related to debt issuance costs incurred with the incremental First Lien Term Loan indebtedness and prepayment of the Second Lien Notes, as discussed above, and $ 9.8 million related to existing deferred financing fees that were written off upon extinguishment within the consolidated statements of comprehensive income and cash flows during the year ended December 31, 2021.

Long-term debt matures as follows (in thousands):

Fiscal Year Ended December 31, Minimum Payments

2029 and beyond 500,000

Total $ 1,131,617

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Total debt instruments $ 1,111,153 $ — $ 1,094,774 $ —

The Company had no fair value measurements that utilized Level 3 inputs of the fair value hierarchy for the year ended December 31, 2023.

See Note 13, Fair Value Measurements , for further discussion.

DERIVATIVE INSTRUMENTS

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Credit risk is monitored through established approval procedures, including reviewing credit ratings when appropriate.

In August 2019, the Company entered into an interest rate swap agreement that reduced the variability in the interest rates on the newly-issued debt obligations following the Merger with BioScrip.

The interest rate swap for $ 925.0 million notional was effective in August 2019 with $ 911.1 million designated as a cash flows hedge against the underlying interest rate on the First Lien Term Loan interest payments indexed to one-month LIBOR through August 2021.

In accordance with ASU 2017-12, Targeted Improvements to Accounting for Hedges , the Company had determined that the $ 911.1 million designated cash flows hedge is perfectly effective.

The remaining $ 13.9 million notional amount of the interest rate swap is not designated as a hedging instrument.

The interest rate swap expired in August 2021.

In October 2021, the Company entered into an interest rate cap hedge with a notional amount of $ 300.0 million for a five-year term beginning November 30, 2021.

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The gain and loss associated with the changes in the fair value of the effective portion of hedging instruments are recorded into other comprehensive (loss) income.

The gain and loss associated with the changes in the fair value of the hedging instruments not designated are recognized in net income through interest expense.

The gain and loss associated with the changes in the fair value of the hedging instrument is recognized in net income through interest expense.

The following table presents the pre-tax (loss) gain from derivative instruments recognized in other comprehensive (loss) income in the Company’s consolidated statements of comprehensive income (in thousands):

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Interest rate cap designated as cash flows hedge $ ( 5,215 ) $ ( 8,339 ) $ 28,869

Interest rate swap designated as cash flows hedge — — 11,172

Total $ ( 8,339 ) $ 28,869 $ 10,571

The following table presents the amount and location of pre-tax income (loss) recognized in the Company’s consolidated statement of comprehensive income related to the Company’s derivative instruments (in thousands):

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Derivative Income Statement Caption 2024 2023 2022

Interest rate cap designated as cash flows hedge Interest expense $ 10,974 $ 1,090 $ ( 239 )

Interest rate swap designated as cash flows hedge Interest expense — — ( 11,298 )

Interest rate swap not designated as hedge Interest expense — — ( 2 )

Total $ 10,974 $ 1,090 $ ( 11,539 )

Interest rate cap designated as cash flows hedge Interest expense, net $ 11,527 $ 10,974 $ 1,090

The Company expects to reclassify $ 2.8 million of total interest rate costs from accumulated other comprehensive income (loss) against interest expense during the next 12 months.

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STOCK-BASED INCENTIVE COMPENSATION

Equity 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, 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.

Equity Incentive Plans — Under the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), approved at the annual meeting by stockholders on May 3, 2018, 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.

The 2018 plan is administered by the Company’s Compensation Committee, a standing committee of the Board of Directors.

A total of 4,101,735 shares of common stock were initially authorized for issuance under the 2018 Plan.

In May 2021, an additional 4,999,999 shares were authorized for issuance under the 2018 Plan, resulting in a total 9,101,734 shares of common stock authorized for issuance.

In May 2024, an additional 4,000,000 shares were authorized for issuance under the amended 2018 Plan, resulting in a total of 13,101,734 shares of common stock authorized for issuance as of December 31, 2024.

As of December 31, 2023, a total of 9,101,734 shares of common stock were authorized for issuance under the amended 2018 Plan.

Stock Options — Options granted under the 2018 Plan typically vest over a three - or four-year period and, in certain instances, may fully vest upon a change in control of the Company.

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During the years ended December 31, 2024, 2023 and 2022, the Company recognized compensation expense related to stock options of $ 5.9 million, $ 6.5 million and $ 2.5 million, respectively.

There were no options granted during the year ended December 31, 2024.

The weighted average grant-date fair value of options granted during the years ended December 31, 2023 and 2022 was $ 15.72 and $ 12.51 , respectively.

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Year Ended December 31,

2023 2022 2021

Expected volatility 51.43 % 51.19 %

Risk-free interest rate 4.16 % 3.91 %

Expected life of options 6.2 years 6.2 years 6.5 years

Expected life of options 6.2 years 6.2 years

Dividend rate — —

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Exercisable at December 31, 2024 595,984 $ 22.96 $ 1,365 6.52 years

During the years ended December 31, 2023, 2022 and 2021, shares were surrendered to satisfy tax withholding obligations on the exercise of stock options with a cost basis of $ 0.3 million, $ 0.7 million and $ 0.1 million, respectively.

During the years ended December 31, 2024, 2023 and 2022, an immaterial number of shares were surrendered to satisfy tax withholding obligations on the exercise of stock options.

No cash was received from stock option exercises under share-based payment arrangements for the years ended December 31, 2024, 2023 and 2022.

The maximum term of stock options under these plans is ten years .

Options outstanding as of December 31, 2023 expire on various dates ranging from May 2024 through July 2033.

Options outstanding as of December 31, 2024 expire on various dates ranging from September 2025 through July 2033.

The following table outlines the outstanding and exercisable stock options as of December 31, 2024:

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$ 0.00 - $ 8.24

9,901 $ 6.52 3.1 years 9,901 $ 6.52

9,901 $ 6.52 2.1 9,901 $ 6.52

132,752 $ 12.44 5.4 years 108,767 $ 12.24

$ 8.24 - $ 16.52

460,969 $ 21.41 7.6 years 159,439 $ 20.59

64,775 $ 12.14 4.0 64,775 $ 12.14

1,142,650 $ 28.19 8.8 years 5,464 $ 29.51

$ 16.52 - $ 24.76

355,616 $ 21.54 6.7 200,513 $ 21.05

$ 24.76 - $ 33.00

1,052,941 $ 28.25 7.8 320,795 $ 26.85

All options 1,483,233 595,984

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Balance at December 31, 2024 1,665,412 $ 29.41

During the years ended December 31, 2023 and 2022, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with a cost basis of $ 4.4 million and $ 1.4 million, respectively.

During the year ended December 31, 2021, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with an immaterial cost basis.

During the years ended December 31, 2024, 2023 and 2022, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with a cost basis of $ 7.1 million, $ 4.4 million and $ 1.4 million, respectively.

As of December 31, 2024, there was $ 28.8 million in unrecognized compensation expense related to unvested restricted stock awards that is expected to be recognized over a weighted average period of 1.09 years.

The total fair value of restricted stock awards vested during the years ended December 31, 2024, 2023 and 2022 was $ 19.4 million, $ 9.9 million and $ 3.7 million, respectively.

Performance Stock Units — Performance-based stock units are generally earned based on the attainment of specified goals achieved over a designated performance period.

During the years ended December 31, 2023, 2022 and 2021, the Company’s Compensation Committee approved awards of performance-based stock units to certain senior executives of the Company with grant dates in 2023, 2022 and 2021, respectively.

The performance-based stock units approved during 2023 (“2023 PSU”), 2022 (“2022 PSU”) and 2021 (“2021 PSU”) each offer a three-year -cliff vesting schedule.

Each award reflects a target number of shares (“Target Shares”) that may be issued to the award recipient.

The 2023 PSU, 2022 PSU and 2021 PSU awards may be earned upon the completion of the two-year -average performance periods ending December 31, 2024, 2023 and 2022, respectively.

Whether units are earned at the end of the performance period will be determined based on the achievement of certain performance objectives over the performance period.

Performance Stock Units — Performance-based stock units (“PSU”) are generally earned based on the attainment of specified goals achieved over a designated performance period.

During the years ended December 31, 2024, 2023 and 2022, the Company’s Compensation Committee approved PSU awards to certain senior executives of the Company with grant dates in 2024, 2023 and 2022, respectively.

All PSU awards offer a three-year -cliff vesting schedule.

Each PSU award reflects a target number of shares (“Target Shares”) that may be issued to the award recipient.

PSU awards may be earned upon the completion of a two-year -average or three-year -average performance period.

Whether PSU awards are earned at the end of the performance period will be determined based on the achievement of certain performance objectives over the performance period.

The performance objectives include achieving a target growth for adjusted EBITDA and revenue combined in addition to a target growth for cash flows from operations over the performance period.

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Each period begins with 100 % of the Target Shares and true-up or true-down adjustments are considered every quarter-end based on the forecasted performance period results.

The fair value of the Target Shares and performance stock unit awards are based on the fair value of the underlying shares as of market close on the grant date.

Compensation expense for performance unit stock awards is recognized on a straight-line basis over the requisite service period.

During the year ended December 31, 2023, the Company recognized compensation expense related to the 2023 PSU, 2022 PSU and 2021 PSU awards of $ 2.2 million, $ 2.9 million and $ 2.4 million, respectively.

During the year ended December 31, 2022, the Company recognized compensation expense related to the 2022 PSU and 2021 PSU awards of $ 2.4 million and $ 1.7 million, respectively.

During the year ended December 31, 2021, the Company recognized compensation expense related to the 2021 PSU awards of $ 2.7 million.

As of December 31, 2023, there were $ 5.5 million, $ 3.3 million and $ 0.3 million in unrecognized compensation expense related to unvested 2023 PSU, 2022 PSU and 2021 PSU awards, respectively, that are expected to be recognized over the period of 2.2 years, 1.2 years and 0.2 years, respectively.

The fair value of the Target Shares and PSU awards are based on the fair value of the underlying shares as of market close on the grant date.

Compensation expense for PSU awards is recognized on a straight-line basis over the requisite service period.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized compensation expense related to the PSU awards of $ 8.8 million, $ 7.5 million and $ 4.1 million, respectively.

During the years ended December 31, 2024, shares were surrendered to satisfy tax withholding obligations on the performance-based stock units with a cost basis of $ 4.9 million.

There were no shares surrendered to satisfy tax withholding obligations on the PSU awards during the years ended December 31, 2023 or 2022.

As of December 31, 2024, there were $ 11.6 million in unrecognized compensation expense related to unvested PSU awards that are expected to be recognized over a weighted-average period of 1.32 years.

STOCKHOLDERS’ EQUITY

During the years ended December 31, 2023 and 2022, HC I completed secondary offerings of 23,771,926 and 11,000,000 shares of common stock, respectively.

As of December 31, 2023, HC I no longer holds shares of the Company’s common stock.

During the year ended December 31, 2023, HC I completed secondary offerings of 23,771,926 shares of common stock.

As of December 31, 2023, HC I no longer held shares of the Company’s common stock.

2017 Warrants — Prior to the Merger, BioScrip issued warrants to certain debt holders pursuant to a Warrant Purchase Agreement dated as of June 29, 2017.

In conjunction with the Merger, the 2017 Warrants were amended to entitle the purchasers of the warrants to purchase 2.1 million shares of common stock.

The 2017 Warrants have a 10-year term and an exercise price of $ 8.00 per share and may be exercised by payment of the exercise price in cash or surrender of shares of common stock into which the 2017 Warrants are being converted in an aggregate amount sufficient to pay the exercise price.

The 2017 Warrants are classified as equity instruments, and the fair value of these warrants of $ 14.1 million was recorded in paid-in capital as of the Merger Date.

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The 2015 Warrants were assumed by the Company in conjunction with the Merger and are classified as equity instruments, and the fair value of these warrants of $ 4.6 million was recorded in paid in capital as of the Merger Date.

During the year ended December 31, 2023, warrant holders exercised an immaterial number of warrants to purchase shares of common stock.

During the years ended December 31, 2024 and 2023, warrant holders exercised an immaterial number of warrants to purchase shares of common stock.

During the year ended December 31, 2022, warrant holders exercised warrants to purchase 900,272 shares of common stock.

During the year ended December 31, 2023, no cash proceeds were received from warrant exercises.

During the years ended December 31, 2024 and 2023, no cash proceeds were received from warrant exercises.

During the year ended December 31, 2022, $ 20.9 million of cash was received as proceeds from warrant exercises.

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The share repurchase program has no specified expiration date.

During the year ended December 31, 2023, the Company purchased 7,946,301 shares of common stock for an average share price of $ 31.46 , totaling $ 250.0 million.

During the years ended December 31, 2024 and 2023, the Company purchased 9,255,591 and 7,946,301 shares of common stock for an average share price of $ 27.01 and $ 31.46 , totaling $ 250.0 million and $ 250.0 million, respectively.

All repurchased shares became treasury stock.

As of December 31, 2023, the Company is authorized to repurchase up to a remaining $ 250.0 million of common stock of the Company.

As of December 31, 2024, the Company completed share repurchases under its prior share repurchase program.

In January 2025, the Company’s Board of Directors approved a new $ 500.0 million stock repurchase program.

This program has no specified expiration date.

Shares Outstanding — The following table shows the Company’s changes in shares of common stock for the years ended December 31, 2024 and 2023 (in thousands):

Balance at December 31, 2022 181,958

Equity award issuances 564

Share repurchases ( 7,946 )

Balance at December 31, 2023 174,576

Equity award issuances 941

Share repurchases ( 9,256 )

Balance at December 31, 2024 166,261

Treasury Stock — As of December 31, 2024 and 2023, the Company held 17,585,613 and 8,330,022 shares of treasury stock, respectively.

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Management fees are recorded in net revenues in the accompanying consolidated statements of comprehensive income.

The Company had amounts due to its joint ventures totaling $ 1.4 million as of December 31, 2024.

The Company had amounts due to its joint ventures of $ 0.5 million and due from its joint ventures of $ 0.1 million as of December 31, 2023.

The Company had amounts due to its joint ventures of $ 1.5 million as of December 31, 2022.

These receivables were included in prepaid expenses and other current assets in the accompanying balance sheets and these payables were included in accrued expenses and other current liabilities in the accompanying balance sheets.

These balances primarily relate to cash collections received by the Company on behalf of the joint ventures, offset by certain pharmaceutical inventories purchased by the Company on behalf of the joint ventures.

Share Repurchase Agreement — On February 28, 2023, we entered into a Share Repurchase Agreement (the “Share Repurchase Agreement”) with HC I, pursuant to which we agreed to repurchase, subject to the terms and conditions contained therein, up to $ 75.0 million of our common stock then held by HC I at the same purchase price per share as the underwriter in a

concurrent underwritten public offering of our common stock held by HC I.

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.

On March 3, 2023, the transactions contemplated by the Share Repurchase Agreement closed, and we repurchased directly from HC I 2,475,166 shares of our common stock.

SEGMENT REPORTING

The Company has adopted ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures and has revised prior year disclosures to conform with the current year presentation.

The Company operates as a single reportable segment, infusion services.

Infusion services derives revenue through the clinical management of infusion therapy, nursing support and care coordination in order to provide solutions to complex patient conditions in the home or other nonhospital settings.

The Company’s infusion services segment activities are managed on a consolidated basis and therapies are distributed and administered in a similar manner.

Operating segments have been identified based on the financial information utilized by the Company’s Chief Executive Officer, the chief operating decision maker (“CODM”).

The CODM uses net income as a measure of profitability to assess segment performance and deciding on how to allocate resources such as capital investments, share repurchases, and acquisitions.

The CODM does not use or receive total assets by segment to make decisions regarding resources;

therefore, the total asset disclosure by segment has not been included.

The following table reflects results of operations of the Company’s reportable segment (in thousands):

Year Ended December 31,

2024 2023 2022

Infusion services net revenue $ 4,911,591 $ 4,222,656 $ 3,869,036

Other revenue (1) 86,611 79,668 $ 75,699

Total Option Care Health revenue 4,998,202 4,302,324 $ 3,944,735

(Expense) Income:

Cost of net revenues - drugs ( 3,446,735 ) ( 2,812,531 ) $ ( 2,562,494 )

Salaries, benefits, and other employee expense ( 787,922 ) ( 760,499 ) $ ( 709,916 )

Other segment items (2) ( 380,803 ) ( 355,498 ) $ ( 371,529 )

Depreciation and amortization expense ( 60,909 ) ( 59,201 ) $ ( 60,565 )

Interest expense, net ( 49,029 ) ( 51,248 ) $ ( 53,806 )

Equity in earnings of joint ventures 5,964 5,530 $ 5,125

Other, net 4,831 89,865 $ 14,218

Income tax expense ( 71,776 ) ( 91,652 ) $ ( 55,212 )

Net Income $ 211,823 $ 267,090 $ 150,556

(1) Represents business activities related to other miscellaneous revenue streams.

(2) Other segment items includes expenses for medical supplies, delivery and packaging, leases, professional services, and other expenses.

SUBSEQUENT EVENTS

The Company has evaluated whether any subsequent events occurred since December 31, 2024 and noted the following subsequent event:

On January 24, 2025 the Company completed the acquisition of all equity interests in Intramed Plus, Inc., a leading provider of home and alternate site infusion services in the Southeastern United States.

The total purchase price for the transaction was approximately $ 117 million, paid in cash.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data