Q1 2024 Option Care Health Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Option Care Health Hlth Q1 2024 earnings conference 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. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker, Mike Shapiro, Chief Financial Officer. Please go ahead.
Good day and thank you for standing by welcome to the option care Health Q1, 2024 earnings Conference 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 to ask a question. During the session you will need to press star one one on your <unk>.
On the phone you will then hear an automated message advising that your hand is raised to withdraw your question. Please press star one one again please be advised that today's conference is being recorded I would now like to hand, the conference over to your Speaker, Mike Shapiro Chief Financial Officer. Please go ahead.
Michael H. Shapiro: Good morning. 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. 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, as well as in our Form 10-K filed with the SEC, regarding the specific risks and uncertainties.
Michael H. Shapiro: Good morning. 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. These forward looking statements are subject to risks and uncertainties that could cause actual results to differ.
Michael H. Shapiro: Materially from our expectations. We encourage you to review the information in today's press release as well as in our Form 10-K filed with the SEC regarding the specific risks and uncertainties, we do not undertake any duty to update any forward looking statements.
Michael H. Shapiro: 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 in this morning's press release posted on the Investor Relations portion of our website. And with that, I'll turn the call over to John Rademacher, Chief Executive Officer.
Michael H. Shapiro: As required by law during the call we will use non-GAAP financial measures when talking about the company's performance and financial condition.
Michael H. Shapiro: Can find additional information on these non-GAAP measures in this morning's press release posted on the Investor Relations portion of our website and with that I'll turn the call over to John Rademacher, Chief Executive Officer.
John C. Rademacher: Thanks, Mike, and good morning, everyone. As always, I'd like to share a few thoughts up front on the performance of the enterprise, as well as the quarter, before handing the call back over to Mike to dive into the financial results a bit deeper. Overall, the first quarter was a very solid start to the year, despite some of the challenges we recently disclosed regarding the changed healthcare situation, which I will expand upon in a moment.
John C. Rademacher: Thanks, Mike and good morning, everyone as always I'd like to share a few thoughts.
John C. Rademacher: Upfront underperformance of the enterprise as well as the quarter before handing the call back over to Mike to dive into the financial results a bit deeper.
John C. Rademacher: Overall, the first quarter with very solid start to the year. Despite some of the challenges. We recently disclosed regarding the change healthcare situation, which I will expand upon in a moment.
John C. Rademacher: Revenue growth of over 12% reflects the dedication of the more than 7,500 team members who are committed to unparalleled patient care and finding a way to serve more patients. We saw solid top-line growth with considerable contribution from a number of the newer chronic therapies launched over the past year.
Michael H. Shapiro: Revenue growth of over 12% reflects the dedication of the more than 7500 team members, who are committed to an unparalleled patient care and finding a way to serve more patients.
Michael H. Shapiro: We saw solid topline growth with considerable contribution from a number of the newer chronic therapies launched over the past year.
John C. Rademacher: The team is consistently executing across the country and across relationships with key stakeholders, including payers, referring physicians, hospital and health system teams, as well as our pharma partners. And while we are proud of the top-line results in the quarter, we are equally as proud that our patient satisfaction remains quite strong in the quarter at 93%, with a net promoter score of 76.3%. Knowing that more than 9 out of 10 patients who we have the privilege of serving view the experience with Option Care Health quite favorably.
Michael H. Shapiro: The team is consistently executing across the country and across relationships with key stakeholders, including payers, referring physicians.
Michael H. Shapiro: <unk> health system teams as well as our pharma partners.
Michael H. Shapiro: And while we are proud of the topline results in the quarter were equally as proud that our patient satisfaction remains quite strong in the quarter at 93% with a net promoter score of $76 two.
Michael H. Shapiro: Knowing that more than nine out of 10 patients who we have the privilege of serving you the experience with option care health quite favorably despite managing through an acute medical event or a chronic condition is humbling and affirmation that our team is truly unique.
John C. Rademacher: Despite managing through an acute medical event or a chronic condition, it is humbling, an affirmation that our team is truly unique. As you are all aware, on March 14, we made a voluntary disclosure regarding the potential impact from the Change Healthcare Cybersecurity breach and, Given the impact on our operations and the fact that it has been just over a month since we shared that disclosure, I wanted to provide a few updates. First and foremost, the Option Care Health team responded immediately and decisively to help ensure that we secured our platform and that there was no impact on our patients.
Speaker Change: As you are all aware on March 14th we made a voluntary disclosure regarding the potential impact from the change healthcare cyber security incident.
Speaker Change: Given the impact on our operations and the fact that it has been just over a month since we shared that disclosure I wanted to provide a few updates.
First and foremost the option care health team responded immediately and decisively and will help ensure that we secured our platform and that there was no impact on our patients.
John C. Rademacher: Throughout this situation, we maintained our ability to serve our existing patients and to seek and onboard new patients. Our team worked closely with our referral sources to establish alternative paths for referral submission, qualification, and onboarding, which helped further strengthen our relationships and deepen our position as a trusted partner. As I mentioned earlier, given our patient satisfaction results, we believe the patient experience was not significantly impacted by this event.
Speaker Change: Throughout this situation, we maintained our ability to serve our existing patients and to seek and onboard new patient.
Speaker Change: Our team worked closely with our referral sources, who established alternative path for referral submission qualification that onboarding, which helped further strengthen our relationships and deepen our position as a trusted partner with that.
Speaker Change: As I mentioned earlier, given our patient satisfaction results. We believe the patient experience was not significantly impacted by this or that.
John C. Rademacher: My confidence in the agility of our team and the resilience of this platform has never been higher. As many of you know, the first quarter typically presents a number of challenges to our patient registration and revenue cycle operations as patients switch health plans, insurance plans re- Benefits require verification, and patients on service require reauthorization. Although we plan well in advance for this annual event and prepare accordingly, we were just emerging from this bolus of activity when we were notified of the Change Healthcare incident in late February.
Speaker Change: My confidence and the agility of our team and the resilience of this platform has never been higher.
Speaker Change: As many of you know the first quarter typically presents a number of challenges to our patient registration and revenue cycle operations as patient switched health plans insurance plans reset benefits require verification and patients on service require reauthorization.
Speaker Change: Although we plan well in advance for this annual event and prepare accordingly, we were just emerging from this bolus of activity. When we were notified of the change healthcare incident in late February.
John C. Rademacher: Upon notification, we immediately severed connectivity between our systems and the Change Healthcare suite of applications that we rely on. Those applications include claims clearinghouse capabilities for both pharmacy and medical claims, along with a number of other tools we have incorporated into our highly automated revenue cycle management. During an already hectic time of the year, our patient registration and revenue cycle management teams quickly developed workarounds to maintain patient. In many cases, we reverted to a more manual process or sought alternative tools and applications to maintain basic operations within patient registration. Refill Administration, Benefit Verification, and Payor Authorization Workbook
Speaker Change: Upon notification, we immediately fabric connectivity between our system and the change healthcare suite of applications that we rely upon.
Speaker Change: Those applications include claims clearinghouse capabilities for both pharmacy and medical claims along with a number of other tools, we have incorporated into our highly automated revenue cycle management function.
Speaker Change: During an already hectic time of the year, our patient registration and revenue cycle management teams quickly developed workarounds to maintain patient care.
Speaker Change: In many cases, we reverted to a more manual process or sought alternative tools and applications.
Speaker Change: <unk> basic operations within patient registration.
Speaker Change: Refill administration benefit verification and payer authorization workflows.
John C. Rademacher: As we disclosed last month, the incident resulted in certain inefficiencies and incremental costs within the company. And while, for the most part, we have been able to return to our previous ways of working, some of those inefficiencies continue to this day. The most significant impact on our operations and related financial results was our ability to transmit a large percentage of our claims to payers through the teen health care clearinghouse. Upon severing our connectivity, we aggressively pursued alternative methods to qualify patients and transmit claims.
Speaker Change: As we disclosed last month the incident had resulted in certain inefficiencies and incremental costs within these functions.
Speaker Change: For the most part we have been able to return to our previous ways of working some of those inefficiencies continued to this day.
Speaker Change: The most significant impact on our operations and related financial results was our ability to transmit a large percentage of our claims to the payers through the change healthcare clearinghouse.
Speaker Change: Upon separating our connectivity, we aggressively pursued alternative methods to qualify patients and transmit claims however, given the fact that the change healthcare clearinghouse was our primary conduit.
John C. Rademacher: However, given the fact that the Change Healthcare Clearinghouse was our primary conduit, this presented considerable challenges. In fact, from the date of the attack through the duration of the first quarter, we were unable to transmit more than half of our claims for payment during that period. This has resulted in a detrimental impact on our cash flow results for the quarter, which we believe is temporary, and as you saw in our updated guidance this morning, we believe we will recover, and we have not changed our cash flow expectations for the full year. In the final days of the first quarter and into April, we were able to begin to submit both pharmacy and medical claims.
Speaker Change: This presented considerable challenges.
Speaker Change: In fact from the date of the attack to the duration of the first quarter, we were unable to transmit more than half of our claims for payment during that period.
Speaker Change: This has resulted in a detrimental impact on our cash flow results in the quarter, which we believe is temporary and as you saw in our updated guidance. This morning, we believe we will recover and we have not changed our cash flow expectations for the full year.
Speaker Change: In the final days of the first quarter and into April we were able to begin to submit both pharmacy and medical claims.
John C. Rademacher: As we sit here today, I'm very encouraged by our progress with respect to reconnecting to the Change Healthcare applications that are back online, establishing and connecting to alternative platforms we have implemented, and with the effort our team has made in submitting claims for payment. We have made considerable progress in terms of working through the claims backlog and would expect cash flows to recover by the end of the year. As we emerge from this chapter, there are lessons learned and insights we will use to strengthen our platform as we move forward.
Speaker Change: As we sit here today I am very encouraged by our progress with respect to reconnecting to the change healthcare applications that are back online.
Speaker Change: Establishing connect to alternative platforms, we have implemented.
Speaker Change: And with the effort of our team has made in submitting claims for payment.
Speaker Change: We have made considerable progress in terms of working through the claims backlog and would expect cash flow recovered by the end of the year.
Speaker Change: As we emerge from this chapter there are lessons learned and insights we will use to strengthen our platform as we move forward.
John C. Rademacher: Again, I believe our ability to maintain focus, expand access, and provide exceptional patient care during such a challenging period affirms the resilience of our model and the tenacity of our team. The strength of our balance sheet and liquidity position has also enabled us to weather this storm, and we have not needed to draw upon our credit facilities for business operations or additional liquidity.
Speaker Change: Again, I believe our ability to maintain focus expand access and provide exceptional patient care during such a challenging period affirms the resilience of our model and the tenacity of our team.
Speaker Change: The strength of our balance sheet and liquidity position also enabled us to weather. This storm and we have not needed to draw upon our credit facilities for business operations or additional liquidity.
John C. Rademacher: It also reinforces our priority of investing in our own cyber security, enterprise risk management process, and market-leading technology to help us remain vigilant on clear and present risks to our operations and agile in our response. I could not be prouder of how this team rose to the challenge and the level of patient care we maintained throughout this disruption. Even with these distractions, our team remains on plan to execute on our commercial priorities, drive operational efficiency, expand our capabilities, and explore new vectors of growth.
Speaker Change: It also reinforces our priority on investing in our own cyber security enterprise risk management process and market, leading technology to help us remain vigilant unclear and president risk to our operations and agile in our response.
Speaker Change: I could not be prouder of how this team rose to the challenge and the level of patient care, we maintain throughout this disruption.
Even with these distractions our team remains on plan to execute on our commercial priorities drive operational excellence.
Speaker Change: Spanned our capabilities.
Speaker Change: And explore new vectors of growth.
John C. Rademacher: We continue to invest in our team through training and development programs, invest in our technology to create the next generation intelligent platform, and build out our clinical programs to deliver extraordinary care that helps improve outcomes, eliminate waste, and reduce the total cost of care for our patients and their families. With that, I'll hand the call over to Mike to provide additional insights. Mike?
Speaker Change: We continue to invest in our teams through training and development programs and invest in our technology to create the next generation of intelligent platform and build out our clinical program to deliver extraordinary care that helps improves outcomes eliminates waste and reduces the total cost of care for our patients and their families.
Speaker Change: With that I'll hand, the call over to Mike to provide additional insight Mike.
Michael H. Shapiro: As John mentioned, the first quarter was a solid start to the year. Double-digit top-line growth was balanced across the portfolio, as we delivered single-digit growth from our acute portfolio and mid-teens chronic therapy growth. With respect to the revenue mix in the quarter, we saw especially strong growth from some of our newer chronic therapies introduced over the last year. Chronic therapy growth far outpaced acute therapy growth, which was not unexpected. Gross profit of $238.5 million represented 20.8% of revenue and grew 4.1% over the prior year.
Michael H. Shapiro: Good morning, everyone as John mentioned, the first quarter was a solid start to the year double digit top line growth was balanced across the portfolio as we delivered single digit growth from our acute portfolio and mid teens chronic therapy growth.
Michael H. Shapiro: With respect to the revenue mix in the quarter, we saw especially strong growth from some of our newer chronic therapies introduced over the last year.
Michael H. Shapiro: <unk> therapy growth far outpaced acute therapy growth, which was not unexpected.
Michael H. Shapiro: Gross profit of $238 $5 million, representing 28% of revenue and grew four 1% over the prior year.
Michael H. Shapiro: A few things to unpack that affected our gross profit in the quarter. Gross margin dollar growth was negatively impacted by the absence of the transitory procurement benefits that we've discussed over the past several quarters. Beyond the prior year comparison headwind, there were three factors that affected gross margins in the quarter that we want to highlight. First, gross margin was negatively impacted by the inefficiencies we've described related to the change in health care.
Michael H. Shapiro: A few things to unpack that affected our gross profit in the quarter.
Michael H. Shapiro: Gross margin dollar growth was negatively impacted by the absence of the transitory procurement benefits that we've discussed over the past several quarters.
Michael H. Shapiro: Beyond the prior year comparison headwind there are three factors that affected gross margins in the quarter that we want to highlight first gross margin was negatively impacted by the inefficiencies. We described related to the change healthcare incident.
Michael H. Shapiro: Second, we experienced some supply chain disruptions for certain acute drugs and compounding inputs that led to higher than expected therapy costs. The supply chain disruptions led to higher input costs, as well as inefficiencies in pursuing alternative sourcing strategies, and we anticipate these impacts to continue into the second quarter. Finally, gross margin was also negatively impacted by our revenue mix, as a significant component of our chronic therapy revenue growth was driven by newer chronic therapies launched over the last year that carry lower initial gross margins that we believe we can expand upward over time. SG&A grew 4.7% and represented 13.5% of net revenue as we continue to drive spending leverage despite the challenges we encountered in the first quarter.
Michael H. Shapiro: Second we experienced some supply chain disruptions for certain acute drugs and compounding inputs that led to higher than expected therapy cost to supply chain disruptions led to higher input costs as well as inefficiencies and pursuing alternative sourcing strategies and we anticipate these impacts to continue into the second quarter.
Michael H. Shapiro: Finally gross margin was also negatively impacted by our revenue mix as a significant component of our chronic therapy revenue growth was driven by newer chronic therapies launched over the last year.
Michael H. Shapiro: Three lower initial gross margins that we believe we can expand upward over time.
Michael H. Shapiro: SG&A grew four 7% and represented 13, 5% of net revenue as we continue to drive spending leverage despite the challenges we encountered in the first quarter.
Michael H. Shapiro: As disclosed, the Change Healthcare Incident led to inefficiencies in our patient administration and other functions, and we continue to see the impact today. We're not in a position to quantify a specific impact from the disruption as our focus is on full recovery and remediation, but we were able to drive spending leverage in the quarter regardless. And as I'll cover in a minute, the impact did not lead us to lower our revenue and earnings expectations for the year.
Michael H. Shapiro: As disclosed the change healthcare incident led to inefficiencies in our patient administration and other functions and we continue to see the impact today.
Michael H. Shapiro: We're not in a position to quantify a specific impact from the disruption as our focus is on full recovery and remediation, but we were able to drive spending leverage in the quarter regardless.
Michael H. Shapiro: And as I'll cover in a minute the impact did not lead us to lower our revenue and earnings expectations for the year.
Michael H. Shapiro: Adjusted EBITDA of $98.3 million represented 8.6% of net revenue. Overall, the results were consistent with our expectations, despite the changed healthcare disruption we've articulated and the gross margin impact outlined above. Also, note that we have not adjusted for any impact due to the disruption from our reported adjusted EBITDA results. We believe a silver lining of the change healthcare incident has been the reflection of the resiliency of our capital structure and overall liquidity position.
Michael H. Shapiro: Adjusted EBITDA of $98 3 million, representing eight 6% of net revenue.
Michael H. Shapiro: Overall, the results were consistent with our expectations. Despite the change healthcare disruption we've articulated in the gross margin impacts outlined above.
Michael H. Shapiro: Also note that we have not adjusted for any impact due to the disruption from our reported adjusted EBITDA results.
Michael H. Shapiro: We believe the silver lining of the change healthcare incident has been a reflection on the resiliency of our capital structure and overall liquidity position.
Michael H. Shapiro: The inability to transmit a majority of our claims from February 21st clearly impacted our cash flow from operations in the quarter. However, our prior efforts to strengthen our balance sheet and manage our capital efficiently helped ensure we were able to operate the enterprise and maintain business as usual in the eyes of our patients and referral staff. At no time did we need to draw on our credit facilities or drop below what we believe are the minimum cash levels required to operate the business. Nor do we anticipate needing to draw on the revolver with respect to the disruption in the foreseeable future.
Michael H. Shapiro: Inability to transmit a majority of our claims from February 21, clearly impacted our cash flow from operations in the quarter.
Michael H. Shapiro: Our prior efforts to strengthen our balance sheet and manage our capital efficiently help to ensure we were able to operate the enterprise and maintain business as usual in the eyes of our patients and referral sources at.
Michael H. Shapiro: At no time did we need to draw on our credit facilities are dropped below what we believe are the minimum cash levels required to operate the business.
Michael H. Shapiro: Nor do we anticipate needing to draw on the revolver with respect to the disruption in the foreseeable future.
Operator: Our operational cash outflow in the quarter of approximately $69 million reflects the revenue cycle disruption, yet we still finish the quarter with over $219 million in cash on the balance sheet. Earlier in the first quarter and prior to the incident, we did deploy $40 million towards share repurchase, and upon learning of the change health incident, we temporarily paused our capital deployment efforts to help preserve liquidity. As reiterated in this morning's release, we have reaffirmed our cash flow guidance for the year and expect to fully recover from the incident within the year.
Michael H. Shapiro: Our operational cash outflow in the quarter of approximately $69 million reflects the revenue cycle disruption yet we still finished the quarter with over $219 million in cash on the balance sheet.
Michael H. Shapiro: Earlier in the first quarter and prior to the answer that we did deploy $40 million towards share repurchase and upon learning of the change health incident, we temporarily paused our capital deployment efforts to help preserve liquidity.
Michael H. Shapiro: As reiterated in this morning's release, we have reaffirmed our cash flow guidance for the year and expect to fully recover from the incident within the year.
Operator: Finally, to summarize our revised guidance, for the full year, we expect to generate net revenue of $4.65 to $4.8 billion, adjusted EBITDA of $430 million to $450 million, and cash flow from operations of at least $300 million. And with that, we're happy to take your questions. Operator.
Michael H. Shapiro: Finally to summarize our revised guidance for the full year, we expect to generate net revenue of $4 65 to $4 8 billion.
Michael H. Shapiro: Adjusted EBITDA of $430 million of $450 million in cash flow from operations of at least $300 million.
Speaker Change: And with that we're happy to take your questions operator.
Operator: As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again.
Speaker Change: As a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile the Q&A roster.
Operator: Please stand by while we compile the Q&A roster and one moment for our first question. Our first question will be coming from Brian Tanquilut of Jeffreys. Your line is open.
Speaker Change: One moment for our first question.
Speaker Change: Our first question will be coming from Brian <unk> of Jefferies. Your line is open.
Jack Slevin: Hey, good morning, guys. We've got Jack Slevin on for Brian.
Speaker Change: Hey, good morning, guys, you've got jacks, Lebanon for Brian Congrats on the strong results. Despite all the challenges.
John C. Rademacher: Congratulations on the strong results despite all the challenges. Maybe just wanted to touch back on the gross profit commentary. I appreciate that some of the supply chain disruption is going to extend into Q2, but if you could just maybe walk through how you're thinking about that progressing throughout the year overall, that might be helpful as it relates to the couple other call-outs you had there. Thanks.
Brian: Maybe just wanted to touch back on the gross profit commentary.
Brian: I appreciate that some of the supply chain disruptions going to extend into Q2, but if you could just maybe walk through how youre thinking about that progressing throughout the year overall that might be helpful. As it relates to the couple of callouts you had there.
Michael H. Shapiro: Yeah, Jack, good morning. Thanks for the questions, Mike.
Michael H. Shapiro: Look, obviously, part of the value equation that we've consistently articulated is that it starts with gross profit dollar growth. I think on the Q4 call, we did highlight that we thought that growth would be a little muted earlier in the year relative to the back half. Naturally, we didn't anticipate some of the curve balls with the incident. But again, the way that we're thinking about the full year, we're reaffirming expectations, and we would expect, again, given the fact that, as we sit here today, we're still managing through some of the supply chain challenges around some of the antibiotics and parenteral nutrition inputs, as well as we're still working through back office remediation with the We would expect those trends to continue into the second quarter with more meaningful gross profit dollar growth in the back half of the year, and we're confident in those trends.
Brian: Yes, Jack good morning, Thanks for the question it's Mike.
Michael H. Shapiro: Look obviously part of the value equation that we've consistently articulated as it starts with gross profit dollar growth I think on the <unk>.
Michael H. Shapiro: Q4 call. We did highlight that we thought that growth would be a little muted earlier in the year relative to the back half.
Michael H. Shapiro: Naturally we didn't anticipate some of the curve balls with with the incident.
Michael H. Shapiro: But again the way that we're thinking about the full year, we are reaffirming expectations and we would expect again given the fact that as we sit here today, we're still managing through some of the supply chain challenges around some of the antibiotics and perennial nutrition inputs as well as we're still working through.
Michael H. Shapiro: Back office remediation with with the incident.
Michael H. Shapiro: We would expect.
Michael H. Shapiro: Those trends to continue into the second quarter with with more meaningful gross profit dollar growth in the back half of the year and we're confident in those trends.
Jack Slevin: And then, maybe, one quick follow-up for me.
Speaker Change: Awesome and then maybe one quick follow up for me.
John C. Rademacher: Just, you know, the numbers look really strong, especially with the change impact. Can you get any sense now of if there's perhaps share gain opportunities that you're taking advantage of given your size and scale relative to other players? You know, is this too transitory or too quick of an impact, do you think, to maybe extend and open up tuck-in opportunities for smaller players that couldn't handle things as well as you could? Maybe just speak to some of that; that'd be great.
Speaker Change: Numbers look really strong, especially with the change impact.
Speaker Change: Can you get any sense now.
Speaker Change: If there is perhaps share gain opportunities that you are taking advantage of given size and scale relative to other players.
Speaker Change: Is it two transitory or acute quick of an impact you think that maybe extending open up tuck in opportunities for smaller players that couldnt handle things as well as you said, maybe you could just speak to some of that that'd be great.
John C. Rademacher: Yeah, Jack, it's Don. Thanks for the question. You know, our team focuses on reaching frequency as just part of our overall commercial strategy. There are always opportunities that we see to be efficient and effective in the marketplace and seize on any opportunities there. As I said in my prepared remarks, we've worked closely with our referral sources throughout some of the challenges, as they were challenged as well with their operations in many instances.
Speaker Change: Yes, Jack it's Scott Thanks for the question.
Scott: Our team focuses on.
Scott: Reach and frequency is just part of our overall commercial.
Strategy.
Speaker Change: There are always opportunities that we see.
Speaker Change: It could be.
Speaker Change: Efficient and effective in the marketplace and seize on any opportunities there as I said in my prepared remarks, we've worked closely with our referral sources throughout some of the challenges as they were challenged as well with their their operations in many instances I think that the agility that our team was able to demonstrate I think some of the workflow and work.
John C. Rademacher: I think that the agility that our team was able to demonstrate, I think some of the workflow and workarounds that we were able to create, and I think the ability that we have to not only service our existing patient census but continue to focus on onboarding new patients just puts us in a really strong position to be that partner of choice as we move ahead. We'll continue to take a look at opportunities in the marketplace.
Speaker Change: Around that we were able to create and I think the ability that we had to not only service our existing patient census, but continue to focus on onboarding new patients.
Speaker Change: Just puts us in a really strong position to be that partner of choice as we move ahead.
Speaker Change: We will continue to take a look at opportunities in the marketplace.
John C. Rademacher: We believe that the strength of the platform and the resilience that we've been able to demonstrate are things that matter to those referral sources and, more importantly, to the patients. We'll try to take every opportunity that we have to extend that reach, increase that frequency, and take on a bigger portion of the market demand.
Speaker Change: Believe that the strength of the platform and the resilience that we've been able to demonstrate our things that.
Speaker Change: Matter to those referral sources and more importantly to the patients and we will.
Speaker Change: Try to take every opportunity that we have to extend that reach to increase that frequency and to take on a bigger portion of the market demand.
Jack Slevin: Awesome, really helpful, and congrats again. Thank you. Thanks, Jack.
Speaker Change: Really helpful and congrats again.
Operator: And one moment for our next question. Our next question will be coming from David MacDonald of Truist. Your line is open.
Speaker Change: Thanks Jack.
Speaker Change: One moment for our next question.
David Samuel MacDonald: Our next question will be coming from David Mcdonald.
David Samuel MacDonald: Hey, good morning guys. I just wanted to come back to change for one quick minute. John, I was wondering if you guys expect to be largely done with kind of some of the inefficiency drags as you get through the second quarter? Is it a little early to tell there?
David Samuel MacDonald: I'm curious to your line is open hey, good morning, guys just wanted to come back to change for one quick minute.
John I was wondering you mentioned just where you were currently do you guys expect to be largely done with kind of some of the inefficiency drags as you get through the second quarter is a little early to tell there and then I just.
John C. Rademacher: And then I just want to come back to the prior question a little bit. You know, are you guys seeing a little bit of a halo effect around some referral sources and some things? You know, we heard Infusion Pharmacy was an area where there was certainly some dislocation, so your ability to kind of continue to serve. I'm just kind of curious if you're seeing any potential halo effect there with either referral sources or payers.
Speaker Change: Wanted to come back to the prior question a little bit.
Speaker Change: Are you guys seeing a little bit of a halo effect just around some referral sources and some things we heard infusion pharmacy is an area where.
Speaker Change: There was certainly some dislocation so your ability to kind of continue to service I'm just kind of curious if youre seeing any potential halo effect, there with either referral sources are payers.
John C. Rademacher: Yeah, Dave, I'll start on change. You know, the team has been working really hard just to get the backlog tasks caught up and continue to move that forward. You know, as we sit here today, and as I said in the comments, there is still work in the second quarter. I think some of that will straggle a bit into the third quarter, given just the work that we have to do not only to submit the claims, but then there's the secondary aspects of posting the cash and everything else that's associated with that.
Speaker Change: Yes, Dave I'll start on change.
Speaker Change: The team has been working.
Speaker Change: Really hard.
Speaker Change: Just to get the backlog cap caught up and continue to move that forward.
Speaker Change: As we sit here today and as I said in the comments there.
Speaker Change: They are still has work in the second quarter I think some of that will will straggle a bit into the third quarter. Given just the work that we have to do not only just a bit the claims but then there is the secondary aspects of a posting the cash and everything else that's associated with that as we have said before and we are.
John C. Rademacher: As we have said before, and we have talked about a lot, we really have a lot of automation within our revenue cycle management, which really drives that efficiency and effectiveness. And a lot of that has been decoupled.
Speaker Change: <unk> talked about a lot is we really.
Speaker Change: Have a lot of automation within our revenue cycle management.
Speaker Change: It really drives that efficiency and effectiveness and a lot of that has been decoupled. So it's going to take time to re connect to some of that aspect to build new solutions around that and I think more importantly, just to get through the bolus of activity.
John C. Rademacher: So it's going to take time to reconnect to some of that aspect, to build new solutions around that, and I think, more importantly, just to get through the bolus of activity that's really required to recover from change health. So, you know, expectations are, you know, it's going to get better every day as we move it forward, but it's going to take us some time to move it forward, which is why we've kind of called it out that we'll recover by the end of the year within that. Because of the halo effect.
Speaker Change: Really required to recover from change how so.
Speaker Change: Expectations are it's going to get better every day as we move it forward, but it's going to take us some time to move it forward, which is why we've kind of called out that will recover by the end of the year within that.
John C. Rademacher: You know, our expectations are, you know, this is a hustle business; you've got to be present to win. You really need to demonstrate on a consistent basis that you are that go-to resource and that you can take the patients on the service. I think that what the team has done through this disruption has only strengthened our position there. We will, again, utilize every aspect of our capability set to, you know, remind our referral sources of that consistency and the high quality that we have.
Speaker Change: The Halo effect.
Our expectations are.
Speaker Change: This is a hustle business you've got to be present to win you.
Speaker Change: You really need to demonstrate on a consistent basis that you are back go to resource in that you can take the patients on the service I.
Speaker Change: I think that what the team has done through this disruption has only strengthened our position there.
Speaker Change: We will again utilize.
Speaker Change: Every aspect of our capability set too.
Speaker Change: Remind our referral sources that consistency in the high quality that we have I think.
John C. Rademacher: I think the patient satisfaction scores, both for our patient satisfaction and our net promoter, just give us confidence that we were able to insulate the patients and we were able to insulate the referral sources from some of the disruption in the marketplace. So, you know, I feel good about the performance of the team and the position that they've put us in. But, you know, it's a competitive environment. And as I said, it's a hustle business, and you've got to be there every day. And, you know, you've got to be able to take patients on on that consistent, high-quality basis.
Patient satisfaction scores, both for our patient satisfaction and our net promoter just give us confidence that we were able to insulate the patient and we were able to insulate the referral sources from some of the disruption in the marketplace. So.
Speaker Change: Feel good about the performance of the team and the position that they have put us in.
Speaker Change: But.
Speaker Change: It's a competitive environment and as I said, it's a hustle business and you got to be there every day and.
Speaker Change: You've got to be able to take patients on that consistent high quality basin.
David Samuel MacDonald: I guess the second question is just can you guys give us an update on the percentage of nursing visits from ambulatory in the quarter and you know if there's anything further that you're learning just as these continue to mature. And I guess just kind of the final piece of that is, are any of those facilities now operating at north of 50% capacity?
Speaker Change: I guess second question just can you guys give us an update on percentages.
Speaker Change: Nursing visits from ambulatory in the quarter.
And if there's anything further that Youre learning just as these continue to mature and I guess just kind of the final piece of that is are any of those.
Speaker Change: The facility is now operating at north of 50% capacity.
John C. Rademacher: Yeah, so I'll take that, Dave, as well. You know, we expanded the footprint, even in the quarter. So we added three additional facilities on that. I would say that the percentages are in the same range that we were before, so, you know, ticking up a little bit, but, you know, in that 30% range. The team continues to utilize the facilities effectively and continues to look for opportunities to, you know, help influence patients to utilize those facilities.
Speaker Change: Yeah, So I'll take that David as well.
Speaker Change: We expanded the footprint even in the quarter. So we added.
Speaker Change: Three additional facilities on that.
Speaker Change: I would say that the percentages in the same range that we were before so picking up a little bit but in that 30% range on that.
Speaker Change: Team continues to utilize the facilities effectively.
Speaker Change: And continue to look for opportunities too.
Speaker Change: To help influence patients to utilize those facilities. So we feel really good about the progress that we're making it.
John C. Rademacher: So we feel really good about the progress that we're making. It continues to be a focus. You know, we do have some facilities that are at that 50% or higher range. We're seeing in certain markets that tick higher and get closer to some of those that are longer in their, you know, their vintages, if you want to think about it that way.
Speaker Change: It continues to be a focus we.
Speaker Change: We do have some facilities that are at that 50% or higher range, we're seeing in certain markets that tick higher and getting closer in some of those.
Speaker Change: Our longer in their their vintages, if you want to think of it that way.
David Samuel MacDonald: And so the team is making really good progress. It's a great partnership between our commercial and operations teams to help make that influence. And I think, as we continue down the path and continue to build out our chronic census and execute around there, we will continue to see some upward movement in that. And again, we're pleased because it brings both higher patient satisfaction as well as operating efficiencies. And so it is a focus of our organization to make certain that we're maximizing the value of those facilities.
Speaker Change: So the team is making really good progress.
Right partnership between our commercial and operations team.
To help make that influence and I think as we continue down the path and continue to build out our chronic sensus and execute around there. We will continue to see some upward movement in that and.
Speaker Change: Again, we're pleased because it brings both.
Higher patient satisfaction.
Speaker Change: As well as operating efficiencies and so it is a focus of our organization to make certain that we're maximizing the value of those facility.
John C. Rademacher: And then, John, I guess, just last question, more strategic. I realize this obviously wasn't focused on in the quarter or maybe even in this quarter, but a disruption in the market tends to potentially create some opportunities. So I'm just curious in terms of maybe some regionals, the Wasatch of the world, anything around the disruption that potentially creates opportunities or maybe a longer-term look in terms of capital deployment.
Speaker Change: And then John I guess, just last question more strategic I realize this obviously wasn't a focus.
John C. Rademacher: In the quarter or maybe even in this quarter, but.
John C. Rademacher: Disruption in the market tends to.
John C. Rademacher: Potentially create some opportunities so I'm just curious.
John C. Rademacher: In terms of maybe some regionals the wausau <unk> of the world.
John C. Rademacher: Anything around the disruption that potentially creates opportunity.
John C. Rademacher: Or maybe a longer term look in terms of capital deployment.
John C. Rademacher: Yeah, look, every opportunity or every disruption creates opportunities for that. And so, you know, we have been disciplined in our approach as we're thinking about capital allocation, as we've talked about before. We're going to continue to be disciplined. But, you know, opportunities will present themselves on that. You know, the honesty is in the quarter, you know, as Mike said in his prepared remarks, there were certain situations where when we weren't able to drop claims, you know, preservation of liquidity or preservation of capital was an important aspect of that as we're emerging out of that and gaining confidence.
John C. Rademacher: Yes.
John C. Rademacher: Every opportunity every disruption creates opportunities on that and so we have been disciplined in our approach as we are thinking about capital allocation as we've talked about before we're going to continue to be disciplined but opportunities will present themselves on that.
John C. Rademacher: Honestly is in the quarter as Mike said in his prepared remarks.
John C. Rademacher: There were certain.
John C. Rademacher: Situations, where when we werent able to drop claims.
John C. Rademacher: Preservation of liquidity or preservation of capital was an important aspect of that is we're emerging out of that and gaining confidence I think.
John C. Rademacher: You know, I think the ability for us to think about capital deployment as we had before, as we get through the disruption, will be something that will continue to put the mindspace that Mike and I are spending time in looking at where the opportunities sit and where opportunities may exist to drive strategic and economic value for our shareholders. Okay, thank you guys.
John C. Rademacher: The ability for us to think about capital deployment.
John C. Rademacher: As we had before.
John C. Rademacher: We get through the disruption will be something that we'll continue to.
John C. Rademacher: Put in the mining space that Mike and I are spending time, and looking at where the opportunity set.
John C. Rademacher: And where opportunities may exist to drive strategic and economic value for our shareholders.
Speaker Change: Okay. Thank you guys.
Speaker Change: Yes, Thanks Ed.
Operator: In one moment for our next question, and our next question comes from Lisa Gill of J.P. Morgan. Lisa, your line's open.
Speaker Change: Yes.
Speaker Change: And one moment for our next question.
Yeah.
Speaker Change: Yes.
Speaker Change: And our question and let me from Lisa Gill of Jpmorgan, Lisa Your line is open.
Lisa Christine Gill: Thanks very much and good morning, Mike. I want to go back to a comment that you made around gross profit, where you talked about meaningful gross profit growth in the back half. So can you maybe just talk through what's going to drive that? And then secondly, when you talked about the single-digit growth in acute care, and then you also talked about gross margin, there was a supply chain disruption for acute care. Did that have an impact on sales on the acute side in the quarter as well?
Lisa Christine Gill: Thanks, very much good morning, Mike.
Lisa Christine Gill: Mike I wanted to go back to a comment that you made around gross profit, where you talked about a meaningful gross profit growth in the back half and can you maybe just talk through what's going to drive that and then secondly, when you talked about the single digit growth in acute and then you also touched on gross margin that far is that supply chain disruption, but does have an impact on.
Lisa Christine Gill: The sales on the acute side in the quarter as well.
Michael H. Shapiro: Yeah, Lisa, thanks for circling back. Cause again, we tried to hit on what were obviously some interesting dynamics in the gross profit line. Our ability to onboard new patients in the acute portfolio therapies was never affected. Again, you've probably seen some of the articles; there are some shortages of key antibiotics. Obviously, parenteral nutrition is a meaningful component of our acute portfolio, which is basically compounding different inputs. However, a number of those inputs have been challenging in a supply chain environment, which again has led to higher costs.
Michael H. Shapiro: Yes, Lisa Thanks for circling back because again, we tried to in our prepared remarks hit head on what what obviously were some some interesting dynamics in the gross profit line.
Michael H. Shapiro: Our ability to onboard new patients in the acute portfolio of therapies was was never affected.
Michael H. Shapiro: Again, you've probably seen some of the articles there are some shortages with key antibiotics, obviously parenteral nutrition is a meaningful component of our acute portfolio, which is basically compounding different inputs a number of those inputs have been challenging in our supply chain environment, which again has led to higher costs, so not not really a revenue.
Michael H. Shapiro: So not really a revenue impact, but it definitely left a mark in the quarter on our therapy costs. And as we think about moving throughout the year, what we're expecting to see is some of those supply chain disruptions drop off. Again, they're still present here in the second quarter, but our trade relations and procurement team are all over, actively seeking additional sources. Obviously, the expectation John articulated is that we sunset and get past some of the inefficiencies that the incident has thrown our way.
Michael H. Shapiro: New impact definitely left a mark in the quarter on our on our therapy costs and as we think about moving throughout the year.
Michael H. Shapiro: Right.
Michael H. Shapiro: We're expecting to see is some of those supply chain disruptions drop off again, there is still present here in the second quarter, but we are trade relations and procurement team morale over actively seeking additional sources.
Obviously, the expectation as John articulated as we sunset and get past some of the inefficiencies.
Michael H. Shapiro: That the incident has has tasked our way and as we've launched a number of newer lower margin.
Michael H. Shapiro: And as we've launched a number of newer, lower margin, limited distribution, and rare therapies, typically, what we see is that over time, we can expand those margins, and then, just ultimately, a lot of our bread and butter therapies. We're continuing to see momentum coming out of the first quarter, and we think that that's a glide path that gives us confidence in the trajectory of margins in the back half.
Michael H. Shapiro: Limited distribution.
Michael H. Shapiro: Abuse and rare therapies typically what we see is over time, we can expand those margins and then just ultimately a lot of our bread and butter therapies, we're continuing to see momentum coming out of the first quarter.
Michael H. Shapiro: And we think that Thats, a glide path that gives us confidence in the trajectory of margins in the back half.
Lisa Christine Gill: And then just as a follow-up, when we think about the $300 million that you're expecting for cash flow for the year, I think John made the comment that you stopped or you did, Mike, you put on hold the share repurchase program after buying $40 million worth. What should we think about this year?
Michael H. Shapiro: And then just a quick a follow up when we think about the 300 million that youre expecting for free cash flow for the year.
Michael H. Shapiro: John made the comment that you stopped Mike.
Michael H. Shapiro: You put on hold.
Michael H. Shapiro: The share repurchase program after buying $40 million worth.
Michael H. Shapiro: You did talk about the cash flow being more back half-weighted. Are you leaning more towards tuck-in acquisitions? Will we see you put back on the share repurchase program? How do we think about the use of the cash?
Michael H. Shapiro: Can we think about this year you did talk about the cash flow is going to be more back half weighted.
Are you leaning more towards tuck in acquisitions, while we see you put back on the share repurchase program. How do we think about it that the use of the cash.
Michael H. Shapiro: Yeah, I think, obviously, we have been in liquidity preservation mode over the last six weeks or so, and I think, as John mentioned, we continue to remain active on the M&A front. Obviously, that wasn't a front-burner priority over the last couple of weeks because, as we go forward, I think we will go back to our capital allocation policy, which we've been consistent with, which is that we think that there are a number of M&A opportunities.
Speaker Change: Yes, I think obviously, we were in liquidity preservation mode over the over the last six weeks or so and I think as John mentioned, we continue to remain active on the M&A front, obviously that wasn't a front burner prior.
Speaker Change: Priority <unk>.
Speaker Change: Over the last couple of weeks because we as we go forward I think we go back to our capital allocation policy, which we have been consistent with which is we think that there are a number of M&A opportunities I think to the earlier question.
Michael H. Shapiro: I think in answer to the earlier question, there are some opportunities that are being shaken out of the tree, and we'll continue to balance looking for those accretive and strategic opportunities. And we won't be shy about deploying capital through share repurchase if we continue to recover on the cash front. So I think it's a little bit of all of the above, Lisa, because I think given the strength of the balance sheet, we have the ability to pursue M&A while deploying a reasonable amount of capital towards share repurchase.
Speaker Change: There are some opportunities that are being shaken out of the tree.
Speaker Change: And we will continue to balance looking for those accretive and strategic opportunities and we won't be shy about deploying capital through share repurchases. If we continue to recover on the cash front. So I think it's a little bit of.
Speaker Change: And all of the above Lisa because I think given our the strength of the balance sheet, we have the ability to pursue M&A, while deploying a reasonable amount of capital towards share repurchase.
Lisa Christine Gill: Great, great. Thanks for the comment. Thank you for your time.
Speaker Change: Okay, great. Thanks for the comments.
Operator: And one moment for our next question, and our next question will come from the line of Matt Larew, from William Blair. Your line is open, ma'am.
Speaker Change: Thank you Lisa.
Speaker Change: And one moment for our next question.
Speaker Change: And our next question will come from the line of Matt <unk>.
Of William Blair. Your line is open.
Matthew Richard Larew: Hi, good morning. Over the last several years, you've driven quite a bit of leverage by automating processes and really improving your claims and payer interactions. Obviously, the change disruption caused a temporary disruption for you, but just curious if you think on the back end of this. Do you think there'll be long-term inefficiencies, either because you will be forced to use perhaps multiple vendors that you didn't before, or perhaps establish manual or other, you know, sort of backups in place in case something like this happens in the future, or is it the opposite, that maybe you're able to extract Just trying to think less about the next one or two quarters here but more long term about how this might impact your operation.
Matt: Hi, good morning.
Matt: Over the last several years, you've driven quite a bit of a leverage by automating processes and really improving.
Your claims.
Matt: Payer.
Matt: Interactions.
Matt: Change disruption caused a temporary.
Matt: Disruption for you, but just curious if you think on the back end of this.
Matt: Do you think they'll be long term inefficiencies either because he will be forced to use perhaps multiple vendors that you didnt before perhaps establish manual or other.
Matt: Startup backups in place in case, something like this happens in the future or is it the opposite that maybe youre able to extract better.
Matt: Pricing or terms problem from change as a part of your decision to move forward with just trying to think less about the next one or two quarters here, but more longer term how this might impact your operations.
John C. Rademacher: Yeah, Matt, it's John. You know, I think it's a little too early to think about renegotiations with the change in health care. But I think at the essence of your question, look, there are lessons learned through the process that we will use to strengthen our position as we move forward and strengthen our platform. There are, and I think there will continue to be opportunities in the short run and over the long run to drive operating efficiencies.
Yes, Matt it's John.
John C. Rademacher: I think it's a little too early to.
John C. Rademacher: Think about renegotiations with change healthcare.
John C. Rademacher: But I think it's the essence of your question.
Speaker Change: Look there is lessons learned through the process.
Speaker Change: We will use to strengthen our position as we move forward and strengthen our platform.
Speaker Change: There are and I think.
Speaker Change: There will continue to be opportunities in the short run it over the long run to drive operating efficiencies.
John C. Rademacher: Decoupling from the clearinghouse or having alternatives is something that will be our strategy as we move forward. And the team has done a tremendous job, not only to identify alternatives but also to utilize them as part of the solution moving forward. We are still very excited about our partnership with Palantir.
Speaker Change: Decoupling from the clearinghouse or having alternatives is something that will be our strategy as we move forward.
Speaker Change: And the team has done a tremendous job not only to identify alternative but also to utilize them as part of the solution moving forward. We still are very excited about our partnership with talented <unk>.
John C. Rademacher: Part of that was, you know, the ability to think about some of these backroom operations and ways that we could use machine learning and artificial intelligence to drive even more efficiency in the way that we think about patient registration all the way through claim adjudication and cash posting. So, you know, the disruption certainly rearranges some of our priorities to make certain that we keep the business functioning and do the things that we are necessary to respond to in the near term.
Speaker Change: Part of that was.
Speaker Change: The ability to think about some of the backroom operations and ways that we could use machine learning and artificial intelligence to drive even more efficiency with the way that we think about patient registration all the way through.
Speaker Change: Claim adjudication and cash posting so.
Speaker Change: The disruption certainly <unk>.
Speaker Change: Rearrange some of our priorities to make certain that we kept.
The business functioning and did the things that were necessary to respond to.
John C. Rademacher: But I think over the long run, we're equally not more bullish that there are opportunities for us to drive operating efficiencies, both in the front end in patient registration as well as in the back end in the revenue cycle management aspects of this business. And I think there are some really good learnings. I think an opportunity to take best in class tools as we look for alternatives given the disruption with change health.
Speaker Change: The near term, but I think over the long run.
Speaker Change: Equally if not more bullish.
Speaker Change: There are opportunities for us to drive operating efficiencies.
Speaker Change: Both in the front end in the patient registration as well as the backend in the revenue cycle management aspects of its business and I think there are some really good learnings anything.
Speaker Change: An opportunity to take.
Speaker Change: <unk> best in class tools.
Speaker Change: We look for alternatives given the disruption with change healthcare.
Matthew Richard Larew: Okay, thank you. Obviously, strong top-line growth this quarter, despite what was the toughest comp of the year and sort of disruptions in the end market. You also had a number of moving pieces in terms of drugs rolling off, as we just look through the remaining quarters of the year. Anything to think about either, you know, additional drugs that we might have contemplated rolling off any pricing dynamic, or perhaps other procurement impacts, just to consider growth for the rest of the year? Yeah, Matt, it's Mike. Look, we don't.
Speaker Change: Okay. Thank you and then.
Speaker Change: Honestly strong topline growth this quarter, despite what was the toughest comp of the year.
Speaker Change: Sort of disruption to the end market.
Speaker Change: A number of moving pieces in terms of trends rolling off as well.
Speaker Change: Just look through the remaining quarters of the year.
Speaker Change: Anything to think about either.
Additional drugs that are contemplated rolling off any pricing dynamics.
Speaker Change: Or perhaps other procurement.
Speaker Change: Impact just to consider growth for the rest of the year.
Michael H. Shapiro: Yeah, Matt, it's Mike. Look, we don't don't anticipate any meaningful shocks on the pricing front. The pricing and rate environment has been relatively stable. I think, you know, we typically will call those out if there's a deviation of a meaningful magnitude. Look, as always, this is a dynamic market. There are therapies that go sub-Q, that go biosimilar. All of that is incorporated into our calculus as we look into the back half of the year. Admittedly, out of the gate, but we're thrilled with the top line in the quarter.
Speaker Change: Yes, Matt It's Mike look we don't we don't anticipate any meaningful shocks on the pricing front of the pricing and rate environment has been relatively stable I think you know we typically we'll call those out.
Speaker Change: A deviation.
Speaker Change: Of a meaningful magnitude.
Michael H. Shapiro: As always this is a dynamic market there's therapies that go sub Q that go Biosimilar all of that is incorporated into our calculus as we look into the back half of the year admittedly out of the gate, but we're thrilled with the topline in the quarter. There is a pretty meaningful crunch of those low.
Michael H. Shapiro: There's a pretty meaningful crunch of those lower margin new chronic therapies, and we think over time, the margin profile of those and the predictability of the top line from some of those newer therapies will become a little, you know, more predictable over time. But overall, we're very confident in the trajectory. Again, the majority of growth in the back half is going to come from, you know, established therapies. But nonetheless, we're encouraged by the near-term progress on the LDDs and in the rare therapies as well.
Michael H. Shapiro: Sure margin, new chronic therapies, and we think over time the margin profile of those and the predictability of the top line from some of those newer therapies becomes a little.
Michael H. Shapiro: More predictable over time, but overall, where we are.
Michael H. Shapiro: I'm very confident in the trajectory again, the majority of the growth in the back half is going to come from the established therapies, but nonetheless, we're encouraged by the near term progress on <unk> and the rare therapies as well.
Operator: And one moment for our next question. Our next question will be coming from Peto Chickering of Deutsche Bank. Peto, your line is open.
Speaker Change: Okay. Thank you.
Speaker Change: Thanks, Matt.
Speaker Change: And one moment for our next question.
Speaker Change: Okay.
Speaker Change: Our next question will be coming from <unk> chickering of.
Philip Chickering: Good morning, guys. Can you talk a little bit more about the gross margin pressure coming from these orphan drugs? When they launch, is there a bigger upfront cost for onboarding these new patients? Does it get more efficient over time? And how do margins typically progress as the launch continues? Do you leverage data that you can utilize to help get better margins from these drugs over time?
Chickering: Which bank Peter Your line is open.
Chickering: Hey, Good morning, guys can you talk a little bit more about the gross margin pressure coming from these orphan drugs. When they launch is there a bigger upfront costs for on boarding these new patients and does it get more efficient over time and how do margins typically progressed as the launch continues do you have levers such as data.
Chickering: They can utilize to help get better margins from these drugs overtime.
Michael H. Shapiro: Yeah, great question, Peto. So look, you know, when you're launching a new branded therapy in a less competitive category, typically, you know, the price and the margin are a little more limited. In some instances, it's a mid-single digit gross margin rate. Obviously, your question is going to be, why would you launch something at a mid-gross margin rate? Because typically, it's on a much higher revenue base because you're dealing with a branded, unique, very limited therapy. And so, you know, typical progress that we've seen is when we launch these, there's an upfront investment. You're dealing with unique disease states that require idiosyncrasies around patient registration and onboarding.
Speaker Change: Yeah, Great question, so look when you're launching a new branded.
Speaker Change: Its therapy in a less competitive category typically.
Speaker Change: The the price and the margin is a little more limited.
In some instances, it's mid single digit.
Speaker Change: Gross margin rates. Obviously your question is going to be why would you learn something in a mid <unk> gross margin rate because typically it's on a much higher revenue base, because youre dealing with a a branded unique very limited therapy and so typical progress that we've seen is when we launch. These are is an upfront investment youre dealing.
Speaker Change: With unique disease states that require idiosyncrasies around patient registration and Onboarding. Those are investments that we make upfront to collaborate with Biopharma and then over time as we get our sea legs. So to speak we typically expand those margins from single digit gross profit back in line with.
Michael H. Shapiro: Those are investments that we make upfront to collaborate with BioPharm. And then, over time, as we get our sea legs, so to speak, we typically expand those margins from single-digit gross profit back in line with what's more commensurate with our chronic margin profile. To your point, you know, we get more efficient in the back office within pharmacy fulfillment, as well as typically earn the ability to expand our relationship with BioPharm, whether it's monetizing patient experience data or working through, you know, certain financial incentives for volumes and, you know, and performance on our end.
Speaker Change: Whats more commensurate with our with our chronic margin profile to your point.
Speaker Change: Get more efficient in the back office within pharmacy fulfillment as well as we typically earn the ability to expand our relationship with Biopharma, whether it's monetizing patient experiential data worked through certain financial incentives for volumes in <unk>.
Michael H. Shapiro: So, again, some of them that we've talked about, like, you know, the collaboration with Crystal to commercialize Vyjuvic, which is a very unique and novel new therapy, as well as others like BeefGuard and VyFD for chronic migraines. Over time, these add to the portfolio, but there's clearly an upfront cost in terms of gross margin rate.
Speaker Change: And performance on our end so.
Speaker Change: Again, some of them that we've talked about like the collaboration with Crystal to commercialized by <unk>, which is a very unique and novel new therapy as well as others like beef garten by FD for chronic migraine.
Speaker Change: Over time it it adds to the portfolio, but there is clearly an upfront cost in terms of gross margin rate.
Philip Chickering: Okay, and then there's definitely a lot of concern around the launch of these new open drugs at lower margins or biosimilar impact on gross margins. I guess if we take a three to five year view, can you give us a sense of the impact of both of these categories on gross margins? More specifically, if you think about gross profit dollar growth, do we normalize in a three to five year sort of range back at high single digits or more, or are we thinking more about mid single digits for the next three to five years?
Speaker Change: Okay, and then there is nothing a log of surround around the launch.
Speaker Change: Often drugs at lower margins and or Biosimilars impact to gross margins I guess, if we take a three to five year view can you give us a sense of the impact of both of these categories on our gross margins and more specifically if you think about the gross profit dollar growth do we normalize in a three to five year range back at high single digits or more or are we thinking.
Speaker Change: More on mid single digits for next three to five years.
Michael H. Shapiro: Yeah, the way we've articulated the value proposition, Peto, is look, we've said first and foremost that with a chronic portfolio that's growing at a pace considerably faster than the higher margin rate acute portfolio, that over time, we do see that headwind in the form of gradual headwinds around our gross profit rate. But our gross profit, to some extent, is out of our control in that it's expressed over a denominator that includes the ASP of chronic branded therapies over which we have limited or no control.
Yes, the way we've articulated the value proposition is look we've said first and foremost that with a chronic portfolio thats growing at a pace considerably faster than the higher margin rate acute portfolio that over time, we do see that headwind in the form of.
Speaker Change: <unk>.
Speaker Change: Gradual headwinds around our gross profit rate, but our gross profit to some extent is out of our control and that it is expressed over a denominator that includes the ASP of chronic branded therapies over which we have limited or no control and so the way we manage the business as we're relentless and we're focused on growing.
Michael H. Shapiro: And so the way we manage the business is relentless, and we're focused on growing gross profit dollars, with a gross profit rate headwind that would imply that gross profit dollars over time would grow modestly slower than the top line because we would expect the majority of our growth to consistently be driven from that chronic portfolio. But really focusing on that gross profit dollar growth is really how we think about it in terms of the impact on certain factors like things going biosimilar or subcutaneous. We've managed through, and we've delivered solid top-line growth aside from a number of those events over the last five years, and we'd expect to continue to do so.
Speaker Change: <unk> profit dollars with a gross profit rate headwind that would imply that that gross profit dollars over time would would grow modestly slower than the top line because we would expect that the majority of our growth to consistently be driven from that chronic portfolio, but really focused.
Speaker Change: <unk> on that gross profit dollar growth is really how we think about it in terms of what the impact on certain <unk>.
Speaker Change: Factors like things going biosimilar or or subcutaneous, we've managed through and we've delivered solid top line growth.
Speaker Change: From a number of those events over the last five years and we'd expect to continue to be able to do so.
Philip Chickering: So, if I could just ask that just a different way, I mean, as I think about gross profit year-on-year growth and the multi-year view, the gross profit dollars should still be growing in the highest single-digit plus range, you know, even with all the orphan drugs and the biosimilars. Yeah. We.
Speaker Change: So if I just ask that just had different way as I think about gross profit.
Year on year growth in multi year view.
Speaker Change: The gross profit dollars just still be growing in the high single digit plus range, even with all of the orphan drugs in the Biosimilars.
Michael H. Shapiro: Yeah, we've articulated that the top line of this enterprise would expect to be in the high single digits. And so, you know, the gross profit dollars would expand, you know, a notch below that.
Speaker Change: Yes.
Speaker Change: We've articulated that the top line to this enterprise, we would expect to be in the high single digits and so.
Speaker Change: The gross profit dollars would would expand.
A notch below that.
Operator: And one moment for our next question. Our next question will be coming from Michael Petusky of Barrington Research. Your line is open, Michael.
Speaker Change: Great. Thanks, so much.
Speaker Change: Thanks Peter.
Speaker Change: And one moment our next question.
Speaker Change: Our next question will be coming from Michael <unk> of Barrington Research. Your line is open Michaels.
Michael John Petusky: Good morning. Mike, I may have missed this. I think I heard 50% of the claims were impacted in the quarter in regards to the change incident, but I didn't hear if you quantified it. Did you quantify the impact on cash flows from operations in the quarter?
Michael: Good morning.
Michael: Mike I may have missed this.
Michael: I heard 50% of the claims were impacted in the quarter.
Michael: Okay.
Michael: The change incident, but I didn't hear if you quantified could you quantify the impact on cash flow from ops in the quarter.
Michael H. Shapiro: We didn't, but if you look at the outflow on the cash flow on the balance sheet, you can see the pronounced increase in accounts receivable, which really was, you know, close to the impact of, you know, for the period from February 21st to the end of the quarter, you know, the inability to transmit more than half of our claims.
Speaker Change: We didn't but.
Speaker Change: If you look at the outflow on the cash on the balance sheet you can see the pronounced increase in accounts receivable, which really was.
Speaker Change: Close to the impact of.
Speaker Change: For the.
Speaker Change: On February 20, <unk> through the end of the quarter the inability to transmit more than half of our claims.
Michael John Petusky: Okay. Okay. And then just in terms of the cadence of the catch-up, and this isn't so much in terms of the submitting of claims and all that goes along with that, but just in terms of the catch-up in terms of cash flows, I mean, I'm assuming it's way better than a third, a third, a third for the next three quarters. I'm assuming it's much more front-end Can you just speak to that?
Speaker Change: Okay. Okay, and then just in terms of the cadence of the catch up.
This isn't so much in terms of submitting of claims and all that goes along with that but just in terms of the catch up in terms of cash flows I mean, I'm, assuming it's way better than a third a third a third for the next three quarters I'm, assuming it's a much more front ended and loaded than that can you just speak to that.
Michael H. Shapiro: Yeah, I think that's right, Mike. I think, you know, we tend to be a little conservative on outlook.
Speaker Change: I think I think Thats right, Mike I think you know we tend to be a little conservative.
Michael H. Shapiro: Look, the team has made tremendous progress at working through the backlog. We're working with payers every single day. Obviously, they're getting flooded with backlogs as well. And so we would expect to make considerable progress in the second quarter on recovering from the cash flows, definitely within the year. So I would characterize it as better than you are a third, a third, a third, for sure.
Speaker Change: On outlooks look the team has made tremendous progress in working through the backlog, we're working with Payors every single day, obviously, theyre getting flooded with backlogs as well and so we would expect to make considerable progress in the second quarter on recovering from the cash flows.
Speaker Change: Definitely within within the year so.
Speaker Change: I would characterize it as better than you're a third a third a third for sure. Okay, all right and just last.
Michael John Petusky: Okay, all right, and just last to make sure that I think I understand this. In terms of the challenges of the first quarter and all the things, both on the gross margin change that you listed, I'm assuming that that does not alter plans in terms of ambulatory, new ambulatory facilities over the course of the year. Is that fair?
Speaker Change: Making sure that I am.
Speaker Change: I think I understand that in terms of the challenges in the first quarter and all the things both on gross margin change that you lifted I'm, assuming that that does not alter our plans in terms of ambulatory new fulfill new ambulatory facilities.
John C. Rademacher: Mike, yeah, it's John. No, there is no change in our approach to ambulatory infusion suites and our continued build out there. And, you know, those are capital letters. So, you know, it allows us to continue to move forward. As I mentioned, we open three in the quarter. We're continuing to, you know, continue our path of identifying the right geographies to continue that build out. So, no, no pause or no change in our strategy from that perspective.
Speaker Change: Over the course of the year is that fair.
Scott: Hey, Mike It's Scott.
Michael H. Shapiro: No there is no change in our approach.
Scott: Ambulatory infusion suites, and our continued build out there.
Scott: And those are capital light.
Scott: <unk>.
Scott: It allows us to continue to move forward as I've mentioned, we opened three in the quarter were continued to.
Scott: Continue our path of identifying the right geographies to continue that build out so no no pause or no change in our strategy from that perspective, okay.
Michael John Petusky: Thanks, guys. Yep. Thanks, Mike. And one moment for our next question.
Scott: Okay.
Standing thanks, guys I appreciate it thanks, Thanks, Mike.
Operator: Yep, thanks Mike. Thanks Mike. And one moment for our next question. Our next question will come from Joanna Gajuk of Bank of America. Your line is open.
Speaker Change: One moment for our next question.
Speaker Change: Our next question will come from Julianna <unk> of Bank of America. Your line is open.
Joanna Sylvia Gajuk: Hi, good morning. Thanks for taking questions here. So I guess a couple follow-ups here in terms of quantifying. So we just talked about cash flow, but any way to help us understand the dollar impact on the cost side of things in the quarter?
Julianna: Hi, good morning, Thanks for taking the questions here, So I guess a couple follow ups here.
Julianna: In terms of quantifying.
Julianna: So can you just talk about cash flow, but anyway.
Julianna: I understand that dollar impact on the cost side of things in the quarter.
Michael H. Shapiro: Hey, Joanna, it's Mike. No, I mean, look, obviously, we try to quantify things when we're deviating from our guidance ranges, you know, and as you know, this is a dynamic environment, there's a lot of puts and takes, we tried to provide some subjective color around some of the things affecting, but honestly, given the fact we're still in remediation mode, and it's still a dynamic environment, we're just not in a position to provide a simple dollar amount for the impact.
Julianna: Hey, Joanna it's Mike No I mean look obviously, we try to quantify things when we are deviating from our guidance ranges.
As you know this is a dynamic environment. There's a lot of puts and takes we tried to provide some subjective color around some of the things affecting but honestly given the fact, we're still in remediation mode and it's still a dynamic environment.
Speaker Change: We're just not in a position to provide.
Speaker Change: Simple dollar amount for the impact I think obviously, it's not something we anticipated going into the year, but as we model out our expectations. We model in a number of dynamics in contingencies and I think given the fact that we've reaffirmed and actually brought up the bottom end.
Michael H. Shapiro: I think, you know, obviously, it's not something we anticipated going into the year, but as we model out our expectations, we model in a number of dynamics and contingencies, and I think, you know, given the fact that we've reaffirmed and actually brought up the bottom end, don't think it's it's in our best interest to try to put a specific number on the dynamic.
Speaker Change: Don't think it's.
Speaker Change: In our best interest to try to put a specific number on the on the dynamic.
Joanna Sylvia Gajuk: Sure, yeah, that makes sense, yeah. Raising the guidance, I guess, answers that question, I guess, indirectly.
Speaker Change: That makes sense when you think the guidance I guess answers to that.
Joanna Sylvia Gajuk: But another one in terms of just numbers in the quarter, GNA, so I guess you did well there. I appreciate the commentary on gross margin when you talk about the sum of that. But on the GNA, you know, the 100 scholars, 52 million or so excluding some items. Is that a good plan when going forward?
Speaker Change: Quick question.
Speaker Change: Indirectly bought back another one in terms of just numbers in the quarter G&A. So I guess you did well there.
Speaker Change: I appreciate the commentary on gross margin, what you're talking about a settlement, but that on the G&A the $152 million. Excluding some items is that a good run rate going forward.
Michael H. Shapiro: Yeah, I mean, obviously, you know, we've been very disciplined in how we invest in phase in our SG&A. I think that's a reasonable, reasonable baseline. And again, we would expect that to grow in the low single digits, as per usual, as we drive the spending lever.
Speaker Change: Yes, I mean, obviously.
Speaker Change: We've been very disciplined in how we invest in phase in our SG&A I think thats a reasonable.
Speaker Change: Reasonable baseline and again, we would expect that to grow in the low single digits.
Speaker Change: As per usual as we as we drive the spending leverage.
Joanna Sylvia Gajuk: Okay, thank you for that. And, and I guess, there is another question here. So you mentioned, right, these new chronic therapies, Rajiv, that you've been onboarding and adding, you know, over the last year, that come with some additional, I guess, you know, upfront costs, but kind of big picture questions about different categories of these drugs. So first, any interest in oncology from our checks? It seems the industry is focused on this new therapy class.
Speaker Change: Okay. Thank.
Speaker Change: Thank you for that and Anna.
Speaker Change: And I guess.
Speaker Change: Another question here, So you mentioned right.
Speaker Change: Chronic therapies.
Speaker Change: <unk> been onboarding and adding over the last year.
Speaker Change: They come with some additional I guess.
Speaker Change: Awesome.
Speaker Change: Kind of a big picture question there on different categories of these trucks.
Speaker Change: First.
Speaker Change: Any interest in I'm, calling shots from from our checks. It seems the industry is focused on this new therapy class.
Joanna Sylvia Gajuk: You know, we attended the industry conference where there was a lot of talk about the Oncology Act. So kind of, we'd like to hear from you in terms of your interest in, you know, adding more of these therapies to your portfolio.
Speaker Change: And just to kind of parse that does a lot of talk about around oncology. So kind of would like to hear from you in terms of your inkjet.
John C. Rademacher: Rajiv Gill
Speaker Change: Adding more of these therapies into your portfolio.
John C. Rademacher: Yeah, Joanna, it's John. You know, we have a dedicated team that's working upstream with biopharma to identify therapeutic categories, as well as specific drugs to be able to bring to formulary. We continue to take a look at and have an interest in oncology. You know, when you think of some of the PD1s, the products that, you know, you see advertised a lot on television, you know, they have characteristics that really are in alignment with what we have as our platform and, more importantly, with the infusion suites that we're able to operate.
Gone: Yeah, Julian it's gone.
Speaker Change: We have a dedicated team that's working upstream with biopharma to identify therapeutic categories as well as specific drugs to be able to bring on formulary and we continue to take a look and have interest in oncology. When you think of some of the PD ones.
Speaker Change: That you.
Speaker Change: <unk> advertised a lot on television.
Speaker Change: They have characteristics that really are in alignment with what we have as our platform and more importantly, with the infusion suites that we're able to operate and so.
John C. Rademacher: And so, you know, we're working right now. We know that it's a competitive space. We know that both hospital outpatient departments, as well as oncology clinics, aren't looking to transition a significant number of their patients over. However, we think that we've got a very unique platform and a very efficient way in order to support patients that require, you know, those types of infusions or injections that have a healthcare professional oversight that's required, that need that clinical care that we can provide. And so we're always looking for opportunities, whether in neurology or oncology, to expand the portfolio of products that we're able to serve and increase the number of patients that we have on our census.
Speaker Change: We're working right now we know that's a competitive space, we know that both hospital outpatient departments as well as oncology clinics.
Speaker Change: Arent looking to transition a significant number of their there.
Speaker Change: Their patients over.
Speaker Change: However, we think that we've got a very unique platform and a very efficient way.
Speaker Change: And in order to support patients that require.
Speaker Change: Those types of infusions or injections that have a health care professional oversight that's required.
Speaker Change: That's clear.
Clinical care that we can provide and so we're always looking for opportunities whether in neurology or oncology.
Speaker Change: Should we expand the portfolio of products that we are able to serve and expand the number of patients that we have on incentives.
Joanna Sylvia Gajuk: I appreciate that. Thanks for that.
Speaker Change: I appreciate that thanks, so thanks for that and I guess lastly, you mentioned subcutaneous and I get that.
Joanna Sylvia Gajuk: And I guess, lastly, you mentioned subcutaneous, and I guess that's also, so to speak, a new therapy class to some degree, but there are obviously some existing infusions that are potentially being, you know, also being worked in a version of subcutaneous. So how should we think about this? Antivio and Ocrevus are big therapies for you, and I guess the Ocrevus label says the patient needs training. So can you talk about how these drugs or these new therapies are impacting your business? You know, would that be, you know, a lower revenue, a lower margin? You know, and to your point, can you leverage suites in delivering these therapies?
Speaker Change: Wholesale.
Speaker Change: So to speak a terrific class to some degree but there is obviously some.
Speaker Change: <unk>.
Speaker Change: Ah infusions that are potentially being idle.
Speaker Change: Also being looked at.
Speaker Change: In a version of a subcutaneous so how should we think about that.
Speaker Change: I know previously therapies.
Speaker Change: Therapies for you and I guess, the cleanest label does the patient needs training. So can you talk about how you think about these tax or these new therapies impacting your business would that be.
Speaker Change: Lower revenue lower margin and I guess to your point can you leverage suites.
Speaker Change: In delivering these therapies, so kind of your view about the subcutaneous Jackson, how this could play out over time to P&L. Thank you.
Michael H. Shapiro: Joanna, it's Mike. Look, the introduction of subcutaneous administration is nothing new. For immune globulins, there's been subcutaneous administration for well over a decade, and nothing evolves from a product introduction that catches us by surprise. Again, as John mentioned, our trade relations team has a finger on the pulse of everything in development.
Michael H. Shapiro: Sure Joanna it's Mike.
Michael H. Shapiro: Introduction of subcutaneous administration is nothing new we saw for immune globulin Theres been subcutaneous administration for well over a decade and nothing.
Michael H. Shapiro: From a product <unk>.
Michael H. Shapiro: Introduction that catches us by surprise again as John mentioned, our trade relations team has a finger on the pulse of everything and development I think when you really look at the core of this enterprise.
Michael H. Shapiro: I think when you really look at the core of this enterprise, you know, we're really focused on clinical administration and patient support. That doesn't fit every therapy. That doesn't fit every situation. But really, even when you have products that are being introduced with subcutaneous or alternative administration devices, quite often that doesn't become the standard of care overnight. The vast majority of immune globulin patients still receive their therapy intravenously.
Michael H. Shapiro: We're really focused on that clinical administration and patient support that doesn't fit every therapy that doesn't fit every situation, but really even when you have products that are being introduced with subcutaneous or alternative administration devices.
Michael H. Shapiro: Quite often that doesn't become the standard of care overnight.
Michael H. Shapiro: Far majority of immune globulin patient still receive their therapy intravenously, and so we would expect that and as we've articulated.
Michael H. Shapiro: And so, you know, we would expect that, and as we've articulated, our therapy mix is quite dynamic, and it changes every single year. And so, that's part of the calculus that goes into our outlook, expecting to drive high single digits. Naturally, there are going to be some patients that migrate towards self-administration that may or may not fall under our clinical model if they require, you know, clinical support. But I think you bring up a good point, which is that you also have to read the label because some of those newer therapies still require healthcare professional oversight or training and patient support, which still falls well within, you know, the sphere of focus for this enterprise.
Michael H. Shapiro: <unk> our therapy mix is quite dynamic and it changes every single year and so that's part of the calculus that goes into our outlook expecting to drive high single digits naturally there is going to be some patients that migrate towards.
Michael H. Shapiro: Self administration.
Michael H. Shapiro: May or may not fall under our clinical model if they require.
Clinical support, but I think you bring up a good point, which is you also have to read the label because some of those newer therapies still require healthcare professional oversight or training and patient support which still falls well within.
The sphere of focus for this for this enterprise. So that's nothing new it's something that we fully expect going forward as we think about the top line and it's something that we're staying one step ahead of through our trade relations effort.
Michael H. Shapiro: So, you know, that's nothing new. It's something that we fully expect going forward as we think about the top line. And it's something that, you know, we're staying one step ahead of through our trade relations efforts.
John C. Rademacher: And the only thing I'd add, Joanna, and that's part of the build out of the infusion suites as well, is just to make certain that we're well positioned to meet the needs of those patients, especially if you're moving towards shorter duration, you know, administration through some of those products that require health care professional oversight.
Michael H. Shapiro: And the only thing I'd add Joanna is and Thats part of the build out of the infusion suites as well as just to make certain that we're well positioned to meet the needs of those patients.
Michael H. Shapiro: Especially if youre moving towards <unk>.
Michael H. Shapiro: <unk> duration.
Michael H. Shapiro: Administration through some of those.
Michael H. Shapiro: Products that require healthcare professional oversight.
Joanna Sylvia Gajuk: Thank you. Thanks for the call.
Joanna Sylvia Gajuk: Thanks, Joanna.
Speaker Change: Thank you thanks for the comment.
Operator: And I'm showing no further questions. I would now like to turn the conference back to management for closing remarks.
Speaker Change: Thanks Joanna.
Speaker Change: And Im showing no further questions I would now like to turn the conference back to management for closing remarks.
John C. Rademacher: Great. Thank you all for joining us this morning and participating on the call. As we outlined, the first quarter was a very productive quarter, and our team continued to execute at a very high level, even with significant disruptions in the marketplace. We understand the important role that we play in delivering care to our patients and their families, and this remains the light that guides us as we continue down our path to serve even more patients in 2024. Take care and have a great day. Thank you, everyone.
Speaker Change: Great.
Speaker Change: Thank you all for joining us this morning, and participating on our call as we outlined the first quarter was very productive quarter and our team continue to execute at a very high level, even with significant disruptions in the marketplace.
Speaker Change: We understand the important role that we play in delivering care to our patients and their family and this remains a light that guides us as we continued on our path to serve even more patients in 2024.
Speaker Change: Take care and have a great day. Thank you everyone.
Operator: And this concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: And this concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change: Okay.
Yes.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.