Awesome. Good morning and welcome again to the 2025 Jefferies Healthcare Services Conference. I'm Brian Tanquilut, Healthcare Services Analyst here at Jefferies. Our next presenter is BrightSpring Health Services. Jon, I'm trying to figure out how to describe your business because there's so many business lines in here. Maybe I'll pass it on to you. With us this morning is Jon Rousseau, Company CEO, and Jennifer Phipps, CFO. Jon, maybe like a little bit of an introduction to what BrightSpring is and also kind of like State of the Union. What's going on with you guys at BrightSpring? Sure. Good morning, everybody. BrightSpring, you know, the way that we articulate our positioning in the healthcare market is, I mean, we are a leading home and community healthcare services provider in the U.S. Full stop. The services we provide are in home and community settings, and we believe that they all have a tremendous value in ROI for all the stakeholders in the system. The demand for services in the home and community and healthcare are just increasing. There's a ton of demand for services that have a ton of value. Those are the markets that we operate in. We're one of the larger providers, and hopefully we're one of the top providers from a quality perspective as well. We think that's just a great place to be. Ultimately, within healthcare, we think that scale and quality and technology and efficiency are incredibly important. Those are the things we focus on. We're serving about 400,000 people every day in the U.S. with really impactful services. If you think about our company, we really have three pillars. We have our pharmacy platform. This is closed-door home and community pharmacy. Closed-door, think the opposite of retail. You go to the patient, to the customer, where they are every day. We'll do over 40 million scripts a year going to our customer in the community, to somebody's home. These are all patients with very specialized needs that get customized services. We have our specialty pharmacy business, our infusion and our home community pharmacy and that pharmacy platform. Our second pillar is our provider platform. Again, going to the home and community for home health, for rehab, for hospice, for personal care. Our third platform that we've been building out is think house calls, home-based primary care, going to assisted living, going to skilled nursing facilities in the home for individuals to get better, more intimate care in their own environment, which reduces hospitalizations by 50%. Ultimately, we see that primary care platform that we're building, starting just a couple of years ago, helping to tie all of our services together more to be able to deliver more integrated services to patients who are all receiving multiple services to coordinate that better, and ultimately to participate in value-based care for the patients that we're serving in partnership with payers and with our own ACO. Pharmacy, provider services, primary care, those are our platforms. We're serving very similar types of populations in the same settings in the home and community. We think that the best practices and the scale advantages that we're able to drive have been very helpful for us in building that out over now, almost the last decade. No, that's a great intro, Jon. Maybe if we take a step back, you're not that far removed from your IPO, right? I think the growth algorithm has already changed with some of the divestiture upcoming for one big business. You've been putting up really strong growth in your pharmacy business. Oncology has obviously been a driver of that. Just walk us through how you're thinking about the long-term growth algorithm for the business today. I'll pass it to you. Yeah, it's been about 20 months since the IPO now. I mean, if you were to go back, it's hard to believe it's already been about nine years. Jen and I have been at the company along with some of our other leaders, and it's been about a 15% both revenue and EBITDA CAGR over that time period. Nice track record historically of very consistent growth. Over time, we've continued to focus more and more on our highly clinical services in the business. That growth has accelerated. We've had years, historically 20%, years 10%, averaging out to that 15%. Here in the last year or so, that growth has accelerated closer to, we're on track to be at about 30% this year. If you look at the breadth of the organization, we do believe we are characterized by broad-based growth across all of our businesses. We would expect our provider business to grow in the 12% to 15% range this year, for example, with some really best-in-class businesses on the provider side. We've had other areas of higher growth that pull the overall average number up. That for us has been in our specialty pharmacy and oncology business, where we're really proud of the platform and the business model that's been put in place there over the past 15 years, really focused on service excellence and our partnerships with manufacturers and payers. As there's continued to be innovation in a lot of our end markets, we've tried to build out business models that are able to capitalize on that and serve all of our stakeholders as effectively as possible. We've been able to provide, I think, very helpful and great services within very dynamic end markets. You're seeing that in some of our results. We do believe that going forward, our goal is to always match our historical growth rate, that mid-teens growth rate, and that will always remain our goal. If there's years where we can do better than that, due to internal activities or due to things that are going on externally in the market, certainly, we will try to do that, as you're seeing this year. We see a lot of consistency in the business right now. We see, based on everything that we're aware of today, we see a lot of the current momentum continuing into next year. Maybe for Jen, as I think about double-clicking on the growth that Jon just talked about in specialty pharmacy, what is driving that? How are you delivering 20+% growth and how do you see the consistency of that for the next two to three years? we continue, limited distribution drugs (LDDs) are a really important part of our brand strategy in our specialty business. We continue to win 16 to 18 of those every 18 months. We continue to see that continuing over the next several years. I think that's really important from a revenue standpoint, giving us great good stability from a revenue growth perspective. It oftentimes takes three to four years for those drugs to ramp into the market. That gives us, as we're winning new drugs this year, visibility into growth that we'll expect in the coming three to four years. We've also seen generics on the oncology space that have continued to go through and launch. As those have launched, those have provided a tailwind as well to us. We've continued to see volume growth on both the generics and the brands in specialty, and that is what we see for the coming year. I would just add to that, Brian. Overall, I think it all starts with being in very dynamic markets. There are a lot of innovative therapies that keep coming to market. I think whether you look at oncology or rare and orphan indications, that's some 40% to 50% of the pipeline at the FDA. I think still with another $90 billion of revenue expected to come to market in new therapies in the next seven years. Being able to try to be a very high-quality service provider in a market like that has been a focus for a really long time. You get a mix of therapy types in the market with brands and generics. We're really focused on growing our fee-for-service business in terms of programs and products with manufacturers. That's been a growing part of the business as well. I think ultimately it's our focus on being the best provider we possibly can, investing in our infrastructure, investing in our sales force, investing in data and partnerships with manufacturers, all within an industry that's had a ton of innovation in it. Hey, Jon, just to double-click on generics. I know that we've talked in the past about the opportunities there, but as we think about just the pricing dynamics in the market or the margin dynamics in generics versus historical trend, what does that look like today, especially in specialty? Yeah, you know, I think if you go back over the history of pharma for the past 50 years, there's just more manufacturers on the generic side, right? That's typically where there's a lot of benefit for the healthcare system. I mean, generics, when they launch, I guess other than for the brand, are really great for everybody in the healthcare system. Pricing goes down, reimbursement goes down, and ultimately there's just more manufacturers available. For us, we've just continued to focus on having a clinical liaison team that can pull those referrals through and try to help effectuate the conversion of the brand to the generic and to continue to provide that quality that we can to the patient, and be somebody who helps facilitate those very healthy and beneficial conversions in the market for the entire healthcare system. It's interesting when, in the markets that we operate in, if you're talking about specialty therapies, when a drug goes generic, not a whole lot else changes because a lot of these drugs have an incredible amount of requirements associated with them. Clinically, a lot of these are REMS products. There's a lot of reporting requirements. The drugs themselves are life-sustaining and life-saving. You have to continue to provide an extremely high-touch model and intimacy with your patient on a day-to-day basis. Very little changes in terms of the requirements from a service perspective and from a patient perspective in the world that we operate in and that specialty world when something goes generic. All of those things that happened yesterday still have to happen in the future. We just try to be a helpful partner to make sure that continuity of clinical care is there and helping to navigate and drive that conversion for all the prescribers and the patients out there. Very positive, obviously, when these therapies are able to be consumed a little bit more broadly and at lower pricing for the entire industry. It's been important to the pharmacy industry going back 15 years in terms of sustainability. Jon, maybe shifting gears a little bit, two other businesses within your pharmacy segment would be institutional pharmacy and infusion. Competitors have struggled in those businesses, but you guys have thrived and driven healthy growth. How are you differentiating and what are you doing differently that's translating to that healthy growth rate for both of those business lines? Yeah, I think in home and community pharmacy, I mean, that's where a ton of our volume is, just given what we do. We're serving individuals in senior living communities and hospice and PACE programs and IDD homes and behavioral settings, skilled nursing facilities. A myriad of settings where we go to the customer and to the patient 24/7 every day. We can get anywhere in the United States with a delivery within three hours. Over the past 30 years, that pharmacy network has been built up in a proprietary way. It's an industry where scale is just incredibly important. Pharmacy doesn't have the biggest margins in the world, so you have to be hyper-efficient. You have to leverage your scale in a lot of different areas. We have really tried to focus on a customized set of services. If you're in a skilled nursing, if you're in an ALF, if you're in hospice, you get a very set of customized services for those settings. You've got to be Johnny on the spot. You might have to be somewhere in two hours in Montana, and the drug needs to be there. We can do that anywhere in the United States very, very quickly with that local model. I think it's the fact that we have our scale, we leverage that scale, we focus on service levels, and we're really now more than ever trying to drive technology and automation through the business and really modernize that. I would say historically, in fairness, the LTC pharmacy industry probably hasn't been quite as sophisticated as some of the big mail-order houses in terms of deploying technology. We have some augmented management teams here in the last year, and we're really focused on that dimension of it. Infusion, that's an area, as we've talked about, where we took a step back over the past two years. You've seen a lot of people in infusion actually do well in the recent history. For us, we always had a great reputation and good quality, but a lot of our businesses across a lot of our states were very localized. We've really just tried to standardize best practices where we can. We have an enhanced team in that space as well. We really have a big focus on acute in addition to chronic drugs in the infusion world. Really pleased with the team there. Again, we're going to continue to try to focus on leveraging scale where we can and deploying best practices and more and more deploying very helpful technology. Maybe I'll move on to the provider side. You're buying some of the Amedisys UnitedHealth divestiture home health assets for one, and then obviously you have a rehab business that's sizable. Walk us through the strategy and how you think the growth will play out for that side of the business. Do you want to take this one? Sure. Just a reminder that our home health care side of the business is made up of three different businesses. It's our home health business, our hospice business, as well as our primary care. Hospice really is the biggest portion of that subsegment that we have. As you mentioned, we have announced that we are acquiring certain of the assets that are being divested as part of the Amedisys transaction. That transaction continues to move along well. We believe that that will close in the fourth quarter. As we think about the growth profile, all of those businesses in the home health care side are performing really well. We have really important volume growth that's underpinned by quality. We have some of the highest quality that is available both in the home health, the hospice, and our primary care businesses. We think that that gives us an opportunity to continue to grow volume at an accelerated pace. We do have a rehab business line as well that is continuing to grow in the low double digits and continues to be an opportunity for us. We are expanding into new areas like Part B rehab. That's an area where we think it fits really well. It's an area from a de novo standpoint we've been focusing on. We just have a really great high-quality business that's providing some of the highest ROI services from a provider standpoint. I think those things have underpinned the growth that we've had. We continue to augment that with M&A that we will continue to do in these areas. Yeah, home health and rehab is a good example of some of the synergies we have in the business. On the rehab side, that's actually sort of low teens growth rates, probably in the 12% to 15% growth rate on rehab. That's a business that historically served more of a neuro population, so brain injury, spinal cord injury, more commercial workers' comp, fantastic business. What we're doing now is expanding that into the senior setting as well. You see, for example, home health going into senior living communities and assisted living all the time. ALFs have to provide six services to their residents: pharmacy, primary care, home health, hospice, rehab, personal care. We do all six of those in our company, right? We're starting now to approach that customer, as an example, more as one face. You can get one integrated care offering from our company instead of dealing with six different providers. The best way to do that is to take our home health business and our Part B rehab business, Part B just outpatient rehab, and to offer one combined offering into a senior living community, which is what they really want. Typically, the rehab is the tip of the spear for that and then manages the home health as well. To be able to do that as one company and drive that integrated sale into the ALF, and then from there, if that goes well with your customer, maybe you introduce pharmacy and maybe you introduce primary care. We're doing all these things in different ALFs, and more than ever, we're now trying to do multiple of them in the same ALF, to the benefit of that customer for very meaningful reasons for them. That's a good example of where we're extending one of our service lines into another payer type and customer type, which is very synergistic with a sister service line in the business. Jon, maybe let's jump to the third bucket of the business, which is the primary care side. If you can walk us through the strategy there, obviously that's a growing business and it's something that folks are not very familiar with. Yeah, so that's this third pillar we've built out in the last two years. Really, the first reason we were doing that is that everybody, well, everybody we serve, you know, if you look at people with two or three or more chronic conditions in healthcare, you know, almost all those folks would be defined as polypharmacy, quote unquote. That is, you're on five or six or more medications. So really, everybody we're serving of those 400,000 people every day is typically consuming at least four or five or six medications and on pharmacy. Of that, there's a good amount of those folks that will ultimately need some form of provider services over time too. If we can capture those services over a care continuum or people that are receiving two services at once, we'd like to do that to improve the patient experience and improve the outcomes. Building out house calls or docs and NPs going to people's homes and where they reside, initially was about, can we better coordinate care for all of the patients out there, right? You're on home health. You might also need rehab. In time, you might need palliative care. Can we be the holder of the pen and can we be the coordinator of those services to get better outcomes for everybody? I think that was the initial thinking in terms of the strategy. Also, if you are managing patients as the primary clinician and provider, and those patients are attributed to you on your panel, you ultimately have the opportunity to also enter into value-based care economics. The first way we did that was through an ACO. We have a partnership where we have ACO economics for the past year and a half, and where we're getting now shared savings from that. We're actually still waiting because it's nine months in a rear. We're still waiting to get the final results from last year, but they are positive, and we're seeing about a 10% to 15% cost reduction with better outcomes where we manage those patients in our home-based primary care. Really, the opportunity to build out better economics for the outcomes we're delivering every day was another motivation. Then to take that not only in an ACO capability, but can we partner with payers to do that? Hey, payer, you have 10% of your members that are 50% of your spend. We can manage those better for you by going into the home, by putting them on a better medication therapy management regimen in the home as well, and let us do that for you and talk about, you know, a mutually beneficial economic relationship and contract to do that. It's better coordinating care and then managing the patients you have in more interesting economic models. That's really been the driver. Ultimately, look, we have a lot of people we're seeing every day, 400,000 people a day. All of those people could probably benefit from a better provider, you know, that's coming to them in a more proximal way. There's just this referral flow that you potentially have access to coming into your primary care as well. Really somebody at the center of a care management ecosystem where we're trying to build out that capability set. That makes a lot of sense. Maybe, Jen, just shifting to the balance sheet really quickly, you've laid out plans for deleveraging, and I think on the last earnings call, you even said exiting 2026, kind of like low twos is sort of the goal, if I'm not mistaken. Yeah, if you can walk us through how you're thinking about the deleveraging of the balance sheet. Yeah, so we pro forma'd for the community living divestiture. We believe we'll exit this year, 2025, at 3x or slightly less. We said excluding acquisitions or any other use of cash that we may consider next year, that we would exit at around 2x for 2026. We are absolutely, from a natural deleveraging perspective, continuing to generate really positive cash flow, and we believe that is very beneficial to us. We are absolutely considering what those other uses of cash would be, though. I think we will likely see an increase in some acquisition activity that will take place in 2026. We're also just thinking through what is the best use of our cash for 2026. Yeah, that's by the numbers. As we see the world today, where we would on paper potentially end up, from there, there's three or four different alternatives for cash. We will just continue to think through what is the optimal decision there. Jon, as we think about kind of like the strategic side of capital deployment, I mean, M&A, what looks interesting to you guys right now? Yeah, you know, we've continued to be, I would say, pretty measured in the past now several years, leading up to the IPO and in the 20 months since, measured meaning small tuck-ins. You know, 10 to 15 deals has kind of been our average for the past couple of years. Figure $10 to $15 million of EBITDA, small deals at very low multiples. I think we have the ability to do those. Think of almost, that's almost like maintenance CapEx. There's almost an unlimited amount of those deals out there. We have an eight-person corp dev team, and that's sort of bread and butter. There's, I guess, a second category of deals that would be a little bit bigger, call it $3 to $15 million of EBITDA. Then there'd be a third category of deals of which we've only done one in our nine years, which would be $30, $40, or $50 million of EBITDA or more. We're not contemplating anything like that. That's not our focus. I think we, though, could potentially have flexibility maybe in that second bucket of $3 to $10 million of EBITDA type transactions to have a little bit more flexibility that we would evaluate at the right time, in the right situation. We have looked at a fair amount of deals. We're always looking at opportunities in the market. The challenge is for anything that's a little bit bigger, particularly in certain of our end markets that have really high multiples, we just haven't been willing to pay that multiple. These sort of 15 times and up multiples that you see in some of our end markets, we've stayed very measured in those areas. We are always evaluating. Most of our deals are proprietary, and we'll continue, I think, to make the right decision. We've done 68 deals historically. 66 of those, what we've bought is higher in EBITDA than when we acquired it. I think the other two deals were like super small. We almost have a literally 100% track record of success on 70 deals. We take an immense amount of pride in that, and we will continue to try to have that batting average going forward. The average multiple on those deals over time has been around four times pro forma EBITDA, and that's what we aspire to. We always have a reason for a transaction that we're doing. We see a lot of proprietary stuff. We're going to pull the trigger on one out of every 20 things we look at. In these markets that we operate in, huge industries, incredibly fragmented, there's almost an endless amount of growth, and you just have to be very thoughtful about what you do. Jon, maybe I'll pass it to you on the just capital structure, right? You're going to exit 2026 with two times leverage. You generate a lot of cash. What do you think is the optimal like leverage ratio for this business? In 2026, we may not exit at under 2x, excluding M&A and any other use of cash that we would have. I think we really want to target being around 2.5x leverage with the ability to flex up when we have a deal that makes sense and to do larger scale deals with the ability to generate cash flow to come back down to that 2.5x leverage ratio. We just don't, we're not debt people. We don't, but there obviously is an optimal structure. That is our long-term goal. As we think about the timeline to get there, I think we'll be measured in getting there, even though we could potentially exit 2026 at that, under that time period. I think you'll see us use our cash and deploy cash in what we think is an appropriate way for the next couple of years. Yeah, I mean, there's different schools of thought, obviously, on optimal leverage and, you know, not right or wrong. We've had conversations with people who think below two is great and people who think four times is great. I think for us, just as a general guideline, at or below three times feels good. If you're fortunate to be in that territory, you just evaluate based on what the various opportunities for capital deployment are. In the present time, what's going to make the most sense? As we've done for the past nine, ten years now, really trying to make very optimal decisions in that area to consistently grow shareholder value. Jon, I saved the regulatory questions towards the end. Where do you stand now or how are you feeling about the IRA as it relates to your institutional business and then home health? Obviously, there's a proposed rule. What are you guys hearing? How are you feeling about your ability to mitigate or kind of like the size of the impact on the business? Yeah, an IRA, I mean, it's been about two years now of really making sure, you know, educating individuals on, you know, pharmacy was never any sort of intended party to be impacted by IRA. I think we've done a pretty good job, you know, educating various people to that end. Pharmacy's never been a target of any policy action out there. A bill was introduced in the House a little bit ago. I think one is potentially going to be introduced in the Senate in October, potentially. We'll see what happens with those by the end of the year. Those would effectively address any impact. CMS has also been very clear that they expect the payers to address the situation directly themselves too. We're working through conversations with our payers as well. I think constructively, you know, to receive any potential reimbursement changes and modifications that would largely address the issue. Both of those things are going on. I think in any scenario, and when you look at the broad base of our organization and what we're trying to drive across all of our service lines, we feel like, you know, that'll be manageable as we go through next year. From a home health perspective, the proposed rule is out there. I think the final rule will probably come to be in, you know, early mid-November, if historical precedent holds. We'll see. As Jen said before, within just our home health and hospice business, home health is the minority. There's positive news on the hospice rate side. We're also working really constructively with a lot of MA plans around quality-based reimbursement and preferred provider contracts. Several of those have been executed this year, which will be helpful. We'll see what ultimately happens on home health. What we know about home health is the ROI of home health is just undeniable and it's very significant. We fully expect at some point in the future for home health reimbursement to get back to what it deserves, just steady annual increases just to cover basic cost inflation, really. That's what we fully expect in the coming years. That's what the industry needs. We've been largely waiting to see what happens there as we've been slowly kind of building some scale and capability there over time. We'll see how the year unfolds. For us, given where we are with home health today, that was not going to be a meaningful impact. Jon, closing remarks, but one of the things we ask everyone is, what do you think is the one thing that's underappreciated by investors about the BrightSpring story? Yeah, good question. I think a lot of the benefit that we've derived over time is that we exist as this one enterprise, operating in attractive home and community healthcare markets. Whether it's our scale and driving purchasing efficiencies, or being helpful from a scale perspective on the payer contracting side, our ability to drive best practices through the businesses. You look at Corporate HR, Corporate IT, Corporate Legal, Corporate Sales. Our ability to go into home health, to go into specialty, to go into infusion and drive best practices in execution for a lot of these businesses, I think, is augmented. You look at our ability to drive M&A synergies and our M&A track record. I think our ability to run and manage these related healthcare services companies within the home community is definitely better because of the capabilities we have as one enterprise. That's been really key to our success historically. Thank you, Brian.