Good day, and thank you for standing by. Welcome to the BrightSpring Health Services Second Quarter 2024 Earnings Call. At this time all participants are in a listen-only mode. After the speaker’s presentation there will be a question-and-answer session. Please note that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Phipps, Chief Accounting Officer at BrightSpring. Please go ahead.

Good morning. Thank you for participating in today's conference call. My name is Jennifer Phipps, Chief Accounting Officer of BrightSpring. I am joined on today's call by Jon Rousseau, Chief Executive Officer, and Jim Mattingly, Chief Financial Officer. Earlier today, BrightSpring released financial results for the quarter ended June 30, 2024. A copy of the press release and presentation is available on the company's website. Please note that today's discussion will include certain forward-looking statements that reflect our current assumptions and expectations, including those related to our future financial performance and industry and market conditions. Such forward-looking statements are not guarantees of future performance. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations. We encourage you to review the information in today's press release and presentation as well as in our quarterly report on Form 10 Q that will be filed with the SEC. Specific risk factors and uncertainties can also be found in our 10-K previously filed with the SEC. Such factors may be updated from time to time in our periodic filings with the SEC, and we do not undertake any duty to update any forward-looking statements except as required by law. During the call, we will use non-GAAP financial measures when talking about the company's performance and financial condition. You can find additional information on these non-GAAP measures and reconciliations of our non-GAAP financial measures to their most directly comparable GAAP financial measures to the extent available without unreasonable effort in today's earnings press release and presentation, which again are available on our Investor Relations website. This webcast is being recorded and will be available for replay on our Investor Relations website. And with that, I will turn the call over to Jon Rousseau, Chief Executive Officer.

Thank you, Jen. Good morning, and thank you for joining BrightSpring Second Quarter 2024 Earnings Call. I'd also like to thank all of our employees and teammates, our clinicians, pharmacists, caregivers and administrative and support employees, who work hard every day to provide needed solutions to the customers and patients we serve as well as to our other key stakeholders in healthcare. We are pleased to report strong second quarter performance with total revenue in the quarter of $2.7 billion, representing 26% growth year-over-year and adjusted EBITDA of $139.1 million, which represented 17% growth year-over-year and exceeded our internal plan. Adjusted EBITDA growth metrics throughout my remarks exclude a certain nonrecurring Quality Incentive Payment or QIP of $30 million in the second quarter of 2023. Within the $2.7 billion of total revenue, Pharmacy Solutions revenue was $2.1 billion, growing 32% compared to the second quarter of last year. And Provider Services revenue was $616 million, growing 8% compared to the second quarter of last year. We reported Pharmacy Solutions adjusted EBITDA of $94 million, which grew 19% year-over-year, and Provider Services EBITDA of $86 million grew 16% year-over-year. Following strong performance in the first half of the year and continued business momentum, we are raising our adjusted EBITDA guidance for 2024 to be in the range of $570 million to $580 million, representing 12% to 14% growth, excluding the QIP payment in 2023. Our outperformance in the first half and increasing confidence in the second half of 2024 has led us to increase the midpoint of our adjusted EBITDA guidance by nearly $35 million since the start of the year. Jim will discuss the financial performance and outlook in more detail in a few minutes. Underpinning BrightSpring's success in the second quarter and throughout the first half of 2024 is our dedication to delivering timely, preventative and coordinated care to our seniors and specialty patients in the home and in low-cost settings. Our platform's performance and our core strategy continue to be underpinned by three key hallmarks and strategies. First, we serve large and growing markets of complex patient populations in lower-cost home and community settings, which has significant intangible quality and cost benefits. We bring a compassionate local and personal touch and an efficient care model to these complex patients, which preserves and improves quality of living and health, while lowering the risk of complications and institutional patient days. We do this through standardized best practices, the use of leading technologies and our proactive approach to addressing patient needs. Second, BrightSpring is focused on driving outsized volume growth and market share gains through our high-quality operations and sales and marketing capabilities, supplemented with integrated care as well as de novos and accretive acquisitions, to deepen and expand geographically and grow our volume further. As a result of our high-quality dependable care model and our commercial capabilities, we drive volume growth across our business in addition to serving a patient base, with a comparatively high degree of recurring revenue. Third, we benefit from our scale and complementary services, which allows for greater efficiencies the deployment of best practices throughout the organization and enhanced growth...We do this through standardized best practices, the use of leading technologies and our proactive approach to addressing patient needs.

Thanks, Jon. Before I provide financial results for the quarter, please note that all growth metrics for gross profit and adjusted EBITDA compared to 2023 exclude a certain $30 million Quality Incentive Payment or QIP that BrightSpring received in the second quarter of 2023. Total revenue in the second quarter of 2024 was $2.7 billion representing 26% growth from prior year period. Pharmacy Solutions segment revenue was $2.1 billion achieving growth of 32% year-over-year. Within the Pharmacy segment Infusion and Specialty revenue was $1.6 billion representing growth of 40% from last year and home and community pharmacy revenue was $528 million representing growth of 13% year-over-year. In the Provider Services segment, we reported revenue of $616 million representing growth of 8% compared to the prior year period. Within the Provider Services segment, home healthcare reported $254 million in revenue for the second quarter growth of 13% versus last year. And community and rehab care revenue was $362 million representing growth of 5% year-over-year. Moving down the P&L. The total company gross profit in the second quarter was $389 million representing growth of 14% compared with the second quarter of last year. Adjusted EBITDA for the total company was $139 million for the second quarter growing 17% compared to last year. And adjusted EPS for the total company was $0.10 for the second quarter. Turning back to segment performance. Pharmacy Solutions gross profit was $183 million growing 16% compared with the second quarter of last year. Adjusted EBITDA for Pharmacy Solutions was $94 million for the second quarter growing 19% compared to last year. Provider Services gross profit was $206 million growing 12% versus the second quarter of last year. And adjusted EBITDA for Provider Services was $86 million for the second quarter growing 16% versus last year. On a total company basis, cash flow from operations was negative $15 million in the second quarter of 2024, which was in line with our expectations and included a $90 million cash payment related to the legacy pharmacy legal matter, which was disclosed at the IPO.

Hey, good morning, guys. Congrats on a really strong quarter. I guess my question first, Jon, you've seen really good strong traction in specialty, and I think the guidance implies sequential growth in Pharmacy Solutions revenues into the back half of the year. As we look at historical trend in terms of back half, first half, it seems like it's up sequentially but maybe not by quite as much as historical trend. Is this conservatism? Or is there anything we need to be thinking about as it relates to the ramp in Pharmacy Solutions revenue in the back half? Thanks.

Hey, Brian. Good morning. Thanks for the question. No, our growth rate that we're seeing in pharmacy remains really strong. And we've got more momentum on the volume side in that business really than we ever have even at this point in time, seven years in. So we would expect similar growth rates into the second half. And again, we feel more positive about those growth rates than we have. Typically, we get about 53% of our EBITDA in the second half. Due to days and due to taxes and other items, we expect margins to always increase in the second half as well. We're leveraging fixed costs in corporate, which is flat in the second half as we continue to drive volume, but very consistent volume expectations in terms of growth rates for the second half and no reason to believe those will slow down or slow down heading into 2025.

Hi everyone. Thanks for the question. Just the strong Specialty performance can you just comment on areas of growth? Is it new drug just coming online? Are you gaining share? What's driving that? And then, comment on the margin trajectory as that business grows, maybe looking out a little further. On the one hand in Pharmacy Solutions, I guess, the mix shift could pressure margin. But I think as new business improves overtime you'd see margin improvement. So maybe delve into that a little more, if possible.

Thank you, A.J., for highlighting the growth in Specialty. It's important to note that the overall growth within the organization is quite widespread. Nearly all of our service lines are experiencing growth. We're observing strong performance across our entire portfolio. Specialty has achieved the highest growth rate, largely due to brand growth driven by the ongoing ramp-up of recently launched drugs, including the five LDD drugs introduced this year. Our ongoing commitment to high-value generics and our extensive sales force engaging with clinicians, patients, and their families in the field are boosting our market share. We're also securing new hub business, and our fee-for-service and data services are growing at double-digit rates. This signifies broad-based growth throughout the organization, including within Specialty. Specialty's margins improved slightly into the second quarter, and we anticipate this trend continuing in the latter half of the year, along with a similar trend for overall Pharmacy. Yeah. The breadth of home and community pharmacy covers a lot of attractive end market segments. That business grew its volume right around 10% revenue of about 13%. We continue to see that. We believe, we'll continue to see that into the future. We've got a great quality operation and a set of primary service programs for customers that serve us very well. We have a high-performing sales team too, and the business is very technology enabled. So those elements are really driving very productive customer relationships. I think at this point we've won some 35,000 or 40,000 new patients in beds from competitors this year. And we just really focus on the service model of the operations and that's continuing to drive preference with customers including in this case a very large customer that we onboarded in the back half of Q2 which will be beneficial into the second half of next year and in 2025.

Hey, thanks. Good morning. Just back on the LDD launches I just want to make sure. I heard you that you've got 18 more that are coming. I don't know how many you're launching in the second half versus 2025. And just remind us are those accretive at launch? Or do they require some investments and the earnings slope is a little bit more on a lag?

Yeah. Good morning, Whit. We're up to 118 limited distribution drugs now. We do expect our most recent view after Q2 is probably another 18 or so wins in the next 15 or so months. So that cadence of about one a month, we would expect to continue. Again, that's based on the quality of our service to patients and our focus on manufacturing relationships and other service offerings to them. So momentum there very much continued. Those are accretive day one. There are a few investments that go into place to get ready for launch. But at launch those are accretive from day one at the respective GP margins and EBITDA per script margins right out of the gate. Yeah, I think our view on Infusion hasn't really changed. We're in about 35 states today. So we've got a really good national presence, which is critically important. The volume growth there has continued to be good. We are focused on some operational initiatives in that business and we've been making some investments in those throughout this year. We really believe Infusion is going to be a more meaningful driver for us into 2025, and beyond, as we continue to focus on operational excellence in that business and trying to really win on service levels. That has been a very consistent plan and story for the past six to nine months right now and we're excited for that business as we get into 2025 in particular.

Congratulations on the good quarter. Can you talk a little bit about cross-selling efforts within the Provider division? So for example PT to OT and home health, hospice, group homes, and so forth. Do your sales people have a CRM that has all of the available solutions? And can they sort of see account by account what the in-sell potential is and just what the sort of growth potential is with cross-selling efforts?

Thank you for the question, David. Historically, we've seen significant synergies in our integrated care through our pharmacy services provided to our provider patients, which has been beneficial as they can access one-stop services from a single organization, along with high-quality pharmacy care. We still have many integrated care opportunities ahead. We have been investing for five years in our IT infrastructure to establish a centralized data lake, which allows us to integrate all our data in one place for detailed analysis. In the second half of last year and continuing more intensively this year, we are investing in resources to enhance these integrated care opportunities. We are expanding our clinical nursing hub with care coordinators for patients and building an integrated care team within the organization. This team will look at patients throughout their journey and work with them clinically to provide the best services during their transitions. Yes. Obviously, our platform is really unique. And we have the ability to be an integrated care provider at scale, I think very different from most others outside of one or two of the payers. But first and foremost, we really focus on quality and growth within each individual service line. And so, we focus on each one of our core service lines to really drive best practices within each one of them. We believe additional integrated care opportunities are upside and on top of that across the platform. And that's something that we are leaning into further in the future as we've talked about but really on top of each one of the core service lines executing at a high level and continuing to expand and deepen geographically and gain market share. As it relates to the hospitals and the acute systems, with our platform, we benefit from complementary diversification. We see referrals from a wide range of different sources across our service lines. For instance, in Specialty Pharmacy for oncology and orphan drugs, we are not experiencing any dependencies on hospital systems. This situation is more a reflection of the oncology market and the prescribers. Our rehab business is also not connected to acute pharmacies. Thanks for taking the questions. So on the Provider segment, where the margins was pretty good 14% so up nicely year-over-year, so I guess I assume I know what the drivers are but I would like to hear. Is there anything specific to call out there on the margins? And is that 14% margin sustainable going forward? Hey, Joanna good morning. Thanks for the question. When I received the question, I think from Brian earlier around second half margins of the items I mentioned numerous of them driving that one that you could add to the list is just continued growth in Provider. Provider comparatively has higher margins. So as that business continues to perform well that will be a tailwind in the second half. Additionally, yes, we do see sustainability in those margins. We really just focus on quality and patient care and continuing to drive volume growth.

Thanks, Jon. Before I provide financial results for the quarter, please note that all growth metrics for gross profit and adjusted EBITDA compared to 2023 exclude a certain $30 million Quality Incentive Payment or QIP that BrightSpring received in the second quarter of 2023. Total revenue in the second quarter of 2024 was $2.7 billion representing 26% growth from prior year period. Pharmacy Solutions segment revenue was $2.1 billion achieving growth of 32% year-over-year. Within the Pharmacy segment Infusion and Specialty revenue was $1.6 billion representing growth of 40% from last year and home and community pharmacy revenue was $528 million representing growth of 13% year-over-year. In the Provider Services segment, we reported revenue of $616 million representing growth of 8% compared to the prior year period. Within the Provider Services segment, home healthcare reported $254 million in revenue for the second quarter growth of 13% versus last year. And community and rehab care revenue was $362 million representing growth of 5% year-over-year.

Thank you, Didi. Thanks everybody for joining our call today. We really appreciate the time. It was really another successful quarter for BrightSpring. We continue to focus on serving as many patients as we can, who need our high-quality and high ROI services in the US, in a very differentiated way, with a very differentiated platform. We're continuing to drive a very consistent set of winning strategies and we look forward to talking, with you again in another quarter. Have a great day. Thank you.

This concludes today's conference call. Thank you for participating and you may now disconnect.