Good day, and thank you for standing by. Welcome to the Option Care Health Fourth Quarter 2023 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 telephone. You will then hear an automated message advising 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 today, Mike Shapiro, Chief Financial Officer. Please go ahead. 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. 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 conditions. 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. With that, I'll turn the call over to John Rademacher, Chief Executive Officer. Thanks, Mike, and good morning, everyone. To say that 2023 was an eventful year for Option Care Health is quite the understatement. It was a dynamic year for the team, and we advanced our mission to set the pace in home and alternate site infusion care and treat more patients by providing innovative services designed to improve outcomes, reduce costs, and deliver hope for our patients and their families. In 2023, we treated more than 270,000 distinct patients and expanded our portfolio of life-saving therapies through our collaboration with referral sources, payers, and biopharma partners. As always, Mike will dive into the financials in a few minutes, but I could not be more pleased with the effort, dedication, and results generated by my devoted colleagues at Option Care Health. For the full year, we delivered a revenue of $4.3 billion, representing 9.1% growth over the prior year. Adjusted EBITDA of $425 million represents 24% growth over 2022 and significantly exceeded the initial expectations we articulated in early 2023. Since the merger in August of 2019, the Option Care Health team has consistently delivered solid growth and met or exceeded our commitments to our shareholders. Reflecting back on 2023, beyond the solid financial results, I'd like to highlight a number of key accomplishments and milestones. In the second quarter, we launched Naven Health, one of the largest infusion nursing platforms in the industry, comprised of more than 1,500 clinical professionals. Naven is a critical component in our mission to serve more patients, and strategically, the platform is vital to our continued success. We continue to invest in our ambulatory infusion suites' footprint, and in 2023, we expanded our network to 164 suites and over 660 chairs nationwide. Again, this is a key investment strategy designed to enable continued growth while unlocking clinical labor efficiency. We advanced our use of advanced analytics and repetitive process automation within our pharmacy and revenue cycle management operations to reduce waste and improve cash velocity. We also recently announced our multi-year collaboration with Palantir to deploy their artificial intelligence technology across our operations to drive efficiencies and improve the patient's experience. We launched a number of new therapies in 2023 through our collaborations with biopharma, including Briumvi, Vyvgart, Veopoz, and Cabenuva, to name a few. We believe our integrated national network of state-of-the-art pharmacies and expanded number of infusion suites, combined with the clinical know-how and our leading technology platform, continues to resonate with the biopharma partners and positions us well to continually expand our portfolio. Every member of the Option Care Health team understands that behind every dose is a loved one, and behind the scenes is a comprehensive team of pharmacists, pharmacy technicians, dieticians, infusion nurses, patient support professionals, and supply chain experts. Their focus, dedication, and collaboration help ensure that we deliver unparalleled care in the comfort and convenience of our patients' homes or in one of our infusion suites. Making certain we are an employer of choice and a destination for healthcare professionals is also critical to our continued success. In 2023, we were thrilled to have earned the designations of the Gallup Exceptional Workplace and a Military-Friendly Employer. These recognitions affirm our relentless focus on recruiting our team every day and delivering extraordinary care to our patients. As the old saying goes, "You can do well by doing good," and we believe that our financial results for 2023 demonstrate that we are doing just that. Exiting 2023, our balance sheet has never been stronger, and our liquidity position is in great shape. During 2023, both S&P and Moody's upgraded our credit profile to the highest ratings yet. Our net debt leverage profile is well under 2x, and we generated more than $370 million in operating cash flow in 2023 and deployed $250 million towards the share repurchases. So reflecting on 2023, we continue to deliver strong growth while investing in this unique platform and our capabilities to enable sustainable growth. As we outlined in our 2024 guidance this morning, we expect to continue this trend of delivering strong financial performance as we grow and serve more patients. I've never been prouder of the Option Care Health team and the level of service that we deliver to our patients every single day, and I remain confident in the road ahead. With that, Mike will provide additional color on the results. Mike? Thanks, and good morning, everyone. As John mentioned, we're quite encouraged by the solid finish to 2023. Fourth quarter revenue of $1,124 million represented 9.5% growth over Q4 of 2022. Performance was solid across the portfolio, and execution in the field was very strong. Full-year revenue of just over $4.3 billion was up 9.1% despite a number of headwinds we've talked about throughout the last year, including two exited therapies and the impact of the divested respiratory therapy assets. So overall, we're quite pleased with the top-line performance. Q4 gross margin of 22% represented dollar growth of 6.9% as we saw some mixed-shift impact towards the chronic portfolio as well as a smaller procurement benefit in the quarter. In recent quarters, I've spoken about the favorable procurement dynamics that persisted in 2023, and in Q4, we estimate we realized approximately $8 million in benefit related to the dynamic. For the year, we estimate that we realized $33 million-$35 million of these transitory procurement benefits, which we believe will not continue into 2024. SG&A of $147.8 million actually declined versus Q4 of 2022, and spending leverage improved to 13.1% revenue, which we believe affirms the scalability of the platform. An Adjusted EBITDA of $111.6 million in Q4 represented 9.9% of revenue and was up 18.4% over the prior year. Again, Q4 Adjusted EBITDA included roughly an $8 million procurement benefit. Beyond the P&L, we generated more than $370 million of cash flow from operations for the year, which again includes approximately $85 million from the Amedisys transaction termination fee net of related expenses. During the year, we deployed $250 million towards share repurchases and still finished the year with approximately $344 million of cash on hand and a net leverage ratio of 1.8 x. This is the fifth year-end that we have reported as Option Care Health, and reflecting back to 2019 when we completed the merger, we socialized the combined enterprise at the time as generating roughly $2.7 billion in revenue and roughly $200 million in pro forma Adjusted EBITDA. Four years later, we've increased revenue by 50% to $4.3 billion and more than doubled Adjusted EBITDA to $425 million. We've also driven dramatic improvements in our balance sheet, reduced the leverage profile by more than 2/3 from 6.2x to 1.8 x, and slashed net interest expense by more than half from $110 million- $51 million. And while we're proud of how far we've come, we're equally excited about the road ahead. As disclosed in this morning's press release, we anticipate delivering another year of solid growth for our shareholders. In 2024, we expect to generate revenue of $4.6 billion-$4.8 billion. We expect to generate Adjusted EBITDA of $425 million-$450 million, and we expect to generate cash flow from operations of at least $300 million. To provide some additional data points, we expect net interest expense of $55 million-$60 million, approximately $45 million in stock comp expense, and an effective tax rate of 26%-28%. So overall, 2023 was a very productive year, and we expect to continue our track record of leveraged growth into 2024. With that, we're happy to take your questions. Operator? As a reminder to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Lisa Gill with JPMorgan. Your line's now open. Thanks very much, and good morning, and congratulations. Just really want to understand a couple of things a little bit better as we think about 2024, and the first would be just the mix. So I think, Mike, you noted in the quarter stronger growth in chronic versus acute, which had an impact on the mix. How do we think about mix going forward would be my first question. And then secondly, as it plays into that, how do we think about the swing factor between the $425 million and $450 million on the EBITDA line for guidance? Yeah, good morning, Lisa. Maybe I'll give it a start here. Look, I mean, as we've talked about consistently, within our two portfolios of therapies, we see the growth trajectory of the chronic portfolio being in that low double-digit ZIP code, with the acute therapies being those therapies are really a more mature category that's growing in the low single digits. Having said that, obviously, during 2023 and 2022, there were some pretty interesting market dynamics with some competitive closures, which accelerated some of the reported acute growth. I think as we're going into 2024, absent any of those large shocks to the comparables or the exited therapies we talked about, I think we're back to what we see are the underlying therapy growth dynamics, which is to say we see that acute category growing in the low single digits, and at the other end of the barbell, the chronic therapies are growing low double digits. Given the fact that the chronic, as we've talked about consistently, carries a lower gross margin rate, we would expect going forward that there's going to be some mixed shift towards that lower chronic therapy profitability profile. Having said that, obviously, you know we fight for every basis point, and the way we really focus is on maximizing the dollar growth. And look, given the, I'd say, about 425-450, look, there's a lot of dynamics. Obviously, we have some new emerging therapies that we're still ramping up. Given the fact that on the acute side, the duration of our therapy is from two to six weeks, we haven't met the majority of the acute patients that will have the privilege of treating this year. Behind the scenes, there's always a million moving dynamics that we're trying to manage on the procurement and payer and local competitive front. I wouldn't attribute it anything more than just the typical volatility of the markets that we're operating in. Then just last quarter, you talked about, again, strong cash flow, and you've obviously guided to strong cash flow of $300 million for 2024. John, when we think about the strategy around acquisitions, I know the last quarter you talked about, look, there's kind of a sweet spot for us tuck-in and some other things. But maybe can you just update us on how you're thinking about capital allocation and how you're thinking about any kind of potential strategy around acquisitions in 2024? Yeah, Lisa, good morning. We continue to do a lot of work to understand those market dynamics and what's in the pipeline for consideration as we move forward. I think one of the biggest things Mike and I have talked about, we talked about it on the last quarter call as well, is being very disciplined in the approach that we take. We are looking at things both strategically and economically. It must meet those hurdles on both ends as we're looking at that. We're going to kiss a lot of frogs before we find a prince in that process, and we really pride ourselves in the discipline that we adhere to as we're looking at that. There aren't many books that are out there that we don't get a look at. We have been very active in our corporate development process and the ability to take a look at opportunities, but we apply that discipline, and we're going to continue to do that. As we've talked about before and as we outlined in the third quarter and the press release coming in the fourth quarter, we exhausted the $250 million of the original authorization. We have an additional authorization of $250 million for share repurchase. We will continue to balance that priority of making certain that we're doing everything we can to maximize the value to our shareholders, and whether that's through deployment for M&A or whether it's through continued share repurchase, as well as from our investments into our business as part of our normal flow of CapEx, we will continue to balance across those dimensions and maximize the value for our shareholders. Great. I appreciate the comments. Thanks, Lisa. Thank you. One moment for our next question. Our next question comes from Pito Chickering with Deutsche Bank. Your line's now open. Hey, good morning, guys. Thanks for taking my questions. Looking at the midpoint of 2024 guidance, if we exclude, let's say, a $34 million procurement benefit, EBITDA guidance is about 11.8% growth. Are there any one-timers in next year that we should be thinking about as we think about 2025? Does the procurement benefit just really stop on January 1st? And on the chronic side, what are the new liquidation therapies that you just referenced? And are there any therapies that we should be aware of on the negative side? And on the chronic side, we saw pretty strong inpatient liquidation in 2023. Do you see that continues into 2024? Thanks, Pito. Wow, one question in 15 parts. Appreciate it. Hey, listen, look, at the midpoint, the good thing, and I think you've heard this in some of our public comments, the good thing going into 2024, we don't have the prior year comp challenges, the exited respiratory therapy assets, the exited therapies. So I think the growth algorithm in this story is a lot cleaner and a lot more digestible for all of you to get your hands on. Naturally, the one thing I would say is, look, growth's going to be a little more muted in the first half, just given the fact that we did have some of those Makena and Radicava revenue in the first half of the year. But overall, I think it's just a much it's a much cleaner story going forward. The short answer is no big boxcars on the tracks that you guys have to try to model with and without, so. Yeah, and Pito, on the chronic side and some of the therapies that we outlined, we continue to see strong progress from our commercial team. Our focus around reach and frequency and making certain that we are developing those relationships and deepening them with our referral sources continues to be a high priority and an execution path for the team. We continue to see a focus by the payers around thinking about site of care and making certain that they're maximizing wherever they can achieve high-quality care at an appropriate cost in a setting in which patients want to receive it. So we think that the market dynamics will remain strong for us on that, and we're going to continue our execution path of being that partner of choice and being able to onboard those patients and continue to provide them care. And Pito, the only thing I'd add is, look, specific on your question around any positives, negatives, look, there's always going to be some incremental therapies that we're looking at. I wouldn't say there's anything in the hopper that I would say is a major needle mover in the first year. And on the negative side, look, and we've had this conversation with folks repeatedly, this is a dynamic marketplace, and there's always therapies that will be going subcutaneous that'll have different delivery methodologies, and that's all something that we're never surprised by that, and that's fully accommodated in our guidance ranges. Okay, great. And then sort of, John, a follow-up to the payer commentary, are you seeing any different behavior from the payers that own infusion companies, so CVS, Cigna, obviously United, and now Elevance with their infusion? Have you seen any changes of how those referrals are changing now that they're maybe have their own options as well? Thanks so much. Yeah. We always, they're vigorous competitors, and so we take all of that into full view as we're approaching the marketplace. One of the things that we bring to all of the payer community is that consistency of care. We've talked before about our ability on a national basis to leverage our platform to provide that high consistency and high-quality care, whether you're a patient in Portland, Oregon, or Portland, Maine. That ability that we have to provide consistent, high-quality care across the country is something that they seek. Our ability to be in-network with those payers is something that we work very hard to make certain that we achieve, that we're focusing around key areas of delivering high-quality care, of providing access to their members, of driving high member satisfaction or patient satisfaction when we have the opportunity to serve their members. And so we will never discount the competitive dynamics that we operate within. But on the other side of that, we provide a very valuable service, especially when you look at the breadth of the product that we can provide on both the acute and the chronic portfolio. And we will continue to foster those relationships and be a partner of choice for the plans as they're trying to find place for their members to receive high-quality care. Great. Thanks so much. Thanks, Pito. Thanks, Pito. Thank you. One moment for our next question. Our next question comes from Brian Tanquilut with Jefferies. Your line's now open. Hey, good morning, guys. I guess my first question, maybe sort of a follow-up to Pito's question, as we think about, Mike, kind of the normalized growth rate going forward, obviously, there are a few moving parts for 2024, how are you thinking about how investors should be modeling or thinking about your growth going forward and what those drivers should be? Yeah, Brian, thanks for the question. Look, the way we've consistently articulated what we view as a reasonable way to think about the growth horsepower of this platform is we see this as a high single-digit top-line enterprise. That's on a broader market growth. And I know you asked 15 people what they think the infusion market's growing. You'll get 20 answers. But as we look at the therapies and the areas of focus, we see this industry growing in the mid-single digits. Call it the 5%-7%. We think with our unique platform and competitive strengths, we think folks should expect us to consistently deliver in the high single digits on the top line. Given the scalability of the platform and the investments we've made, we think we can consistently deliver leveraged growth and on an organic basis that should manifest in low double-digit earnings growth as kind of a medium-term growth outlook. Got it. Then during the quarter, it's clear that the SG&A line was very well managed. So as we think about that, right, I think some of that is probably the benefits from your infusion suite strategy. So how should we be thinking about the remaining opportunity to open infusion suites and to offset expected gross margin compression from just the growth in chronic? Yeah, look, I'll start and let John jump in. Look, we fight for every dollar, and we always have, and we always will. With the spending actually coming down versus the prior year, admittedly, we did move some of the investments, some of the more discretionary investments, new programs earlier in the year as we knew that we had some margin favorability. Of note, in the fourth quarter, that does have some year-over-year burden from the 20 or so infusion suites that we opened during the year. And again, from a P&L geography, the cost of those facilities resides in SG&A, the rent, utilities, insurance, et cetera. The benefit through the nursing leverage actually is in the gross margin line. So with the SG&A, as we reported, it has the gross increase from the infusion suite investment, but the benefit is actually north up in the gross profit line. So look, we're going to continue to drive leveraged growth at the SG&A line, and a lot of the results in the fourth quarter, beyond some of the intra-year timing, are the efficiencies and, as John mentioned, the investments in technology and automation, which has manifested in much more efficient spending. Yeah, and the only other thing I'd add, Brian, is on the infusion suite side, continued really great progress by the team of opening the new facilities. As we've talked before, we do a thorough analysis when we're looking at the market. We look at density maps of patient populations, and we're really selective in the way that we're looking at where we place them and how to utilize them. In the quarter, about 30% of our nursing interventions were done in one of our infusion suites with that growing population of chronic patients, as well as our ability to serve some of the acute patients that may need a dressing change or a lab draw or those types of things. We're going to continue to maximize that as we move forward. So as we've built out the network, we're getting closer and closer to having the fulsomeness that we want there. We'll continue to make investments on that, but I would set the stage that that may start to slow as we're then utilizing and optimizing the infrastructure that we have. We added over almost 100 chairs over the year. And so now the trick for the team is really to focus around the execution of utilizing the capacity that we have there as we continue to build out, probably at a bit slower pace than what you've seen over 2022 and 2023. Awesome. Thank you. Yep. Thanks, Brian. Thanks, Brian. Thank you. One moment for our next question. Our next question comes from Matt Larew with William Blair. Your line's now open. Hi, good morning. Wanted to ask about kind of the other piece of the gross profit line beyond procurement, which would be labor costs, and maybe a sense for what your expectations are in 2024. And sort of within that question, maybe an update on how Naven Health is helping you better manage your labor needs. Hey, good morning, Matt. Look, as we've tried to be as transparent as possible, and again, this isn't binary. In the fourth quarter, as expected, we saw that transitory situation that we tried to be as open as we could from a competitive perspective. It pretty much dissipated down to nothing by the end of the fourth quarter. And so look, it was real. It was a great milestone for our procurement team, who we think are the best in the business. And look, part of it is our direct relationship with manufacturers and biofarm that John talked about in the prepared remarks. Going forward, we're always looking for coins in the sofa cushions, and the procurement team is constantly looking. As we've said, there's always procurement puts and takes that typically nets in a typical year to a modest tailwind, well below the numbers we talked about in 2023. I think that's kind of how we're expecting 2024 to shape up. I mean, it was great while it lasted. It manifested real earnings and cash in the bank, and the team dusts off and looks for those next opportunities. Yeah, Matt, it's John. On the Naven standpoint, again, continue really great progress from that platform standpoint. We've made investments into the technology that continues into 2024. We're really excited about some of the efficiencies and effectiveness that that can help to maximize the capacity and the utilization of that workforce to support not only Option Care Health, but other market participants from that platform. That has been part of our overall growth story, the ability to have access to highly qualified nurses to be able to oversee the infusions and oversee the care for our patients is something that enables us to continue to grow. A lot of focus not only internally on Option Care Health around recruiting our team members every day of recruiting and creating a great place to work, but then also the investments that we're making in Naven will allow us to have that additional capacity and that additional growth driver for us as we move ahead. A question that has been asked before is from a turnover and from that standpoint, just across the board, we have seen a significant improvement really from 2022 as we exited 2023 around our retention rates and reducing of overall turnover. We do a lot of work to focus around the employee value proposition, and we have a really great dedicated team of HR professionals that are thinking about what are the total rewards and what are the type of programs to not only invest in our people to help them develop and grow in their roles and responsibilities, but also the culture and those aspects that make it a great place to work. So as I announced in my prepared remark, really excited about some of the designations that we were awarded in 2023. And we know that as much as we invest into our technology, we are a people business. We need highly skilled clinicians, and we need highly skilled professionals across our organization. That will continue to be a top priority for me and the leadership team to make certain we're doing everything we can to be an employer of choice. Okay, thank you. And then the follow-up is on SG&A, obviously down nearly $10 million sequentially in the fourth quarter and down year- over- year. I just want to make sure we have the right sort of jumping-off point if there were any one-time benefits in that quarter, if there's anything from the fourth quarter, the first quarter with respect to incentive comp reset or other dynamics. We've kind of given us the procurement piece on the gross margin line, but anything to think about as we model out SG&A for the year? Yeah, not so much, Matt. It's a good question. Some of it has to do more with the fourth quarter of 2022. Remember, we had a respiratory therapy business that did have some SG&A burden that obviously went away as we right-sized from that. We scaled a little bit and shifted some dollars after we exited a couple of therapies. But for the most part, I think it's a pretty clean jump-off. Okay, thank you. Thanks, Matt. Thank you. One moment for our next question. Our next question comes from David MacDonald with Truist. Your line's now open. Hey, guys. Good morning. Apologize if one of these was asked, but I called off for a minute. Just a couple of quick questions. I wanted to ask about just the durability of profitability improvement given kind of the ongoing growth in chronic relative to acute. It sounds like you guys aren't expecting anything meaningful in terms of percentage growth moving between acute and chronic in 2024. I was wondering if you can talk about the Ambulatory Infusion Suite footprint. As that matures, is your labor productivity further improving from either increased utilization of existing footprints or just the maturation of locations? I know you guys have kind of talked about a roughly 10% lift historically to be a little bit better than that. Just wondering if you could comment on that. Yeah, Dave. Good morning. Listen, as we've talked about, and we always get challenged a little bit around, "Hey, 10% labor productivity for these investments seems a little conservative." Just a quick reminder, we've really only started our infusion suite aggressive expansion strategy. We've been at it for just a hair over two years. And so we're seeing in some of those more mature centers, clinical labor productivity of 20% or more. Again, we're not paying for windshield time with many therapies we can infuse concurrently. And so those later tranches or the earlier tranches, which are really only around two years old, we're still ascending to cruising altitude, and we still have capacity in those centers, remarkably. So the ultimate target for how we think about those from unlocking labor productivity, which not only helps our margins, it also obviously it's like creating 10%-20% more nursing labor units. That's why you hear us talking so much about the strategy. I would just finish. Look, not only did it help us from an economies of scale, but it helps us from an economies of scope because as we think about other therapies like infusible that require healthcare professional oversight, utilizing those as a strategic platform to think about therapies that, frankly, you wouldn't send a nurse four hours in the car to administer, all of a sudden, clinically and economically are viable in the suites. And that's something that's helped us from a portfolio management perspective. Yeah, the only other thing I'd add to that, Dave, is certainly along the questions that you asked for the infusion suite and utilization and helping to drive that, we also focus a lot around just the productivity of our entire labor force, right? So we're always working through and looking for ability to drive that productivity and efficiency across the platform. And we talked before about some of the deployment of the technology, both in the prepared remarks but in previous comments around repetitive process automation and efficiencies to really help our teams take some of the more routine and rote aspects out and drive higher productivity and efficiency across the platform. And we'll continue to focus on that in 2024. We believe there's still opportunities for us to drive those operating efficiencies. With every deployment of technology or the releases that our technology team is putting into the environment, we're looking for ways to maximize the licensure of our workforce, of the capabilities and capacity of the workforce. We'll continue to do that unrelentingly because we know there's opportunities to take cost and waste out of the process. And then, guys, I guess just a quick kind of follow-up on the ambulatory infusion suites. Is there a specific timing breakpoint, let's say 12 months, 18 months, where you start to see that 10% lift start to drift higher towards the 20%? And then it sounds like they've obviously meaningfully expanded the footprint over the last couple of years. As it sounds like that slows a touch and you guys digest more of these, is there any reason to think that the overall book, just because you'll have fewer new starts, so to speak, shouldn't continue to lift higher in terms of nursing productivity? Yeah, I mean, look, we have a very disciplined model with expectations on utilization and adoption. That's one of the reasons why we don't just go out and open 600 of these overnight because we're being rather surgical and methodical, and local ops and commercial leadership are held accountable to fill the centers. And so what we've said is typically by the first anniversary, on average, these are breaking even. So the nurse productivity covers the cost of rent, insurance, utilities, and just operating costs. And typically, by that 18-24 months, they're generating a net 10% profit. We've had some that have moved faster, but we make sure they're following the expected trajectory. And so I'd say conservatively, somewhere after the second anniversary - and again, it's not an exact science - those are going to be close to that 20% productivity uplift. The great thing is, as John highlighted, we opened 20 new centers in 2023. We still have a tremendous amount of capacity within the roughly 170 centers we have across the country. It's not as our ability to drive leverage and value from these isn't necessarily corresponding to how many are we opening every single quarter to now that we have a truly national network of 170 centers across the country, how do we also continue to drive utilization within the existing footprint? I think that at some point, we'll hit a point where we feel good, but we're not capital-constrained. If we see an opportunity in the local market, we'll be very quick to open an additional center. And then, guys, just last question. You mentioned earlier just kind of conversations with payers. I'm curious, in those conversations, are you seeing a willingness by the payers to put a little bit more teeth around site of service, redirection, whether that's plan design or whatever? And then with regards to the ambulatory infusion suites, is there an opportunity? I mean, you talked about some other services outside of infusion, but is there an opportunity and an appetite for potentially some non-infused drugs, maybe some injectables where there's a nursing component? Just any color there would be helpful. Yeah, Dave. So the conversations that we've had and continue to have with the payer community around site of care, I would say there's a broad range of those conversations. We are seeing certain circumstances where some of the payers are directing with a little bit more heavy hand the utilization of these lower sites or lower cost sites of care and putting that into the way that they're managing their membership. I wouldn't say that's widespread across the entire industry, but we are starting to see that uptake in local pockets or some of the more regional players on that. So we're trying to stay ahead of that. We are in active conversations. We believe that with some of the focus around medical loss ratios, especially in some of the capitated programs that the payers are dealing with, we offer a really valuable solution to them of offering that high-quality care at a more appropriate cost than some of the other settings in which the patients could receive it. So we expect that that will be an impetus for us to have those conversations. We're going to continue to talk about the values and the virtues that we can bring to them through that process. The second part of your question, we are doing that today, Dave, where, again, we take a look at the portfolio within the infusion suite itself where there are either products that may not be infused, but they may be injectables that require a healthcare professional oversight. We are doing those in the infusion suite. One of the products that I called out, the Cabenuva, is a product that really fits within that category that requires that HCP to provide that oversight. We'll continue to look for those opportunities and continue to partner upstream with biopharma as being a channel partner for those types of products, as well as continue to discuss the cost value of being able to provide care to their members, to the payers, and why they should help to choose that as a site of care as they're moving forward. I guess, John, the better way to ask that would have been just in terms of the growth around that, kind of the non-infused products. Are you seeing any kind of meaningful acceleration, increased acknowledgment of the services that you guys provide, increased appetite from manufacturers, et cetera? Yeah, it's incorporated in the guidance that we provided. I mean, there's some positive aspects of that, but nothing that I'd say is a major needle mover on that or disproportionate. But we're going to continue to look for every opportunity we can to, as Mike said, fill the chairs and utilize the capacity that we have in an efficient and effective way. Okay. Thanks very much. Yeah, thanks, Dave. Thank you. One moment for our next question. Our next question comes from Joanna Gajuk with Bank of America. Your line is now open. Hey, good morning. Thanks so much for taking the question. So I guess first, a follow-up, just to clarify. So you said the procurement benefit was $8 million. So that sounds like maybe a little bit less than what you were expecting. So I guess, is that right? And then why is that? And also, can you remind us, what was it for the full year? And also with that, do you still assume zero benefit in January or in Q1? Good morning, Joanna. Yeah, it's Mike. Yeah, so in my prepared remarks, I mentioned that we estimate. And again, this isn't an exact science because you have moving patient census. It's multiple codes across a number of different payers, some that are ASP, some that are AWP. But to the best of our estimation, we estimate that we had approximately $8 million of benefit in the quarter. And so our best estimate is when you look in the 425 that we reported, there's roughly $33 million-$35 million of total benefit. Again, it doesn't show up the first day of a quarter. It doesn't go away the last day of the quarter. And so it really dissipated throughout Q4 as we had expected. And so again, I think as we talked about on our third-quarter call, I think our commentary that using roughly a 390 jump-off point normalizing for those transitory benefits is a logical baseline. There are no benefits going into specific to this situation. There are no benefits going into 2024. So it'll be a clean break. Great. Thank you for that. I guess it's somewhat related because you mentioned the 2024 is more of a normalized year. You don't have any major headwinds or tailwinds like you had in 2023 because around the end, you exited business. Then there were some therapies going away, but then you had this benefit from the procurement, but 2024 maybe not. But I guess there are a couple of things, I guess, going around in the market. So there's a biosimilar, I guess, for one of the infusion drugs, Tysabri, coming to the market. So I guess how meaningful this could be, or maybe that's just a wash because maybe there's new therapies coming in. And I guess Entyvio for Crohn's, right, the makers of those drugs, also working on subcutaneous formulations. Maybe those are not coming 2024, maybe later. But I guess as it relates to subcutaneous, kind of what do you expect the launch to actually happen, and how would this impact your business? And to the last point you were making around suites and using those for injectables, is this something that you would have the Entyvio and Ocrevus, for example, subcutaneous formulations being utilized in those locations? Thank you. Yeah, Joanna, the one thing that we try to underscore as we engage with investors is this is a very dynamic marketplace. It is not a static portfolio of therapies. And if you look at what we will infuse and inject into our patients in 2024, it's markedly different than it was five years ago. And it's probably markedly different than what it will be five years from now. Our business development team, again, we have very direct lines into manufacturers. Nothing comes to market. No new administration method, no filing is hitting that is of a major surprise to us. And so as we look, whether it's two months or 20 months out, we're constantly trying to anticipate the dynamics in the marketplace. And so a lot of the manufacturers you talked to whose products you quoted, we have regular dialogues with them. We fully anticipate and have incorporated into our guidance therapies that will go subcutaneous or that will eventually have biosimilar entrance. So that's something that we stay well ahead of. When something goes subcutaneous, to John's point, you need to read the labels because sometimes something goes subcutaneous, it still requires healthcare professional oversight. Even if it doesn't require an HCP oversight, that still remains within our clinical model, admittedly, maybe with some different economics. So all of those are developments that we're constantly anticipating and incorporating into our commercial and operational strategies. Thank you. And if I may, last follow-up, I guess, on the comment there around the very strong cost you still expect for 2024, right? Obviously, that's a year-over-year headwind of the termination fee that you got in 2023. That's not going to repeat. But when it comes to acquisitions, kind of any latest updates in terms of things that will be of interest, how far away are you willing to veer off of the core home infusion business? Any considerations for maybe expanding the drugs that you deliver, say? I mean, we talk about the injectables, but maybe more of the oncology drugs. So any color of things kind of you're looking at would be good to hear. Thank you. Yeah, Joanna. Look, I mean, we're constantly focused on how do we grow. And we think that driving top-line and bottom-line growth is a surefire way to create value for our shareholders, whether it's organic in utilizing our suites and infrastructure to add therapies to the bag, so to speak, or deploying capital through an M&A strategy. And look, I think we've tried to alleviate concerns and reinforce our strategy on the corporate development front, which is to say, "Look, simply by generating more cash, that doesn't lower the bar." And John has preached that things have to be both of strategic and economic value that we can articulate to our shareholders. We're very active on that front. We're going to be very, very disciplined. There's a lot that we could do that's strategic that doesn't represent an economic proposition and vice versa. We see a number of opportunities. I think, frankly, without laying out our playbook, we're going to be disciplined and patient. The great thing is the base business we expect, based on our guidance, to perform very well this year. There isn't the anxiety or pressure to do a deal just for the sake of doing a deal. Given our capital structure, I think we're in a very advantageous position. As John also highlighted, we also have the pressure valve of a share repurchase authorization. That's another channel through which we can deploy capital for our shareholders. Thank you. Thanks for the questions. Thanks, Joanna. Thanks, Joanna. Thank you. One moment for our next question. Our next question comes from Jamie Perse with Goldman Sachs. Your line is now open. Hey, thanks. Good morning. John, you rattled off a number of therapies that are driving chronic growth at the moment. Can you spend a little more time on a few of those, the faster-growing or larger categories, and where you think they are in their own life cycle, what visibility that gives you for chronic growth over the next couple of years, and just your sense of innovation upstream with Biopharma for infusible drugs? Yeah. So in prepared remarks, I called out some of the products that we had launched. We had talked about Briumvi in previous earnings calls, Veopoz, Vyvgart, as well as Cabenuva. I wouldn't say these are outsized growth proportion on it. We feel privileged to have the partnerships that we do with an organization like Krystal, and helping to be a channel partner to serve their patients or patients that require their gene therapy. Across the entire fleet on the chronic side, again, we continue to have a very diverse and a broad portfolio of products there. And as Mike just called out, they don't move in tandem. We have things that are moving up. We have things that are moving down. It's a dynamic environment there. What we really appreciate and what we continue to hear and work with the biopharma partners is around the platform that we're able to provide, that high-quality clinical knowledge and know-how, the logistics, and the national platform in which we can serve patients, and that ability now to have an expanded capability set to not only serve patients in the home but in one of the infusion suites. All puts us in a really strong position to continue to work with biopharma, to be a channel partner, and to be able to continue to expand our list of limited distribution drugs or expand the list of products that we have within our portfolio. So the focus of our business development team is around those relationships, continue to focus around maximizing the value of our platform. We'll continue to look for those opportunities with new and emerging products. As to the second part of your question, we're actively managing and monitoring what is that pipeline of new products. What of those products have the characteristics that fit well within our platform? And are active in conversations with those biopharma partners around the role that we can play in helping to support the launch of those products, the support of existing products, and the ability to serve the patients in one of the settings that our clinical team is well equipped to serve. Okay, great. And then, Mike, I have one follow-up on the procurement benefits. I know you guys were hesitant to talk about this too much while you were in the midst of getting those benefits. But at this point, are you able to say if the benefits came from a branded drug or biosimilar? And on a question I know you guys have been asked many times over the years, just the impact on gross margin from biosimilar or generic events, does this experience of the last six months give us a signal on how those events might impact your profitability? Yeah, Jamie. Look, I mean, obviously, for competitive purposes, we're going to be reluctant. All I'll say is it wasn't one drug. It wasn't one code. It was a little bit of a confluence of a limited number of therapies that have gone away. And again, I always say, we always have some puts and takes. There's also some areas last year where we had some procurement headwinds on some of the nutritional therapies that we support. And the team tries to do their best to mitigate. Look, and on the biosimilar front, again, no two biosimilar events are exactly the same. It typically isn't a bad development from our perspective. We provide therapy, and we build payers based on an ASP, AWP, or WAC spread. So as a category becomes more competitive, typically, there's ASP and AWP pressure over time. It's not overnight, which typically has headwinds on our revenue. However, when you have multiple manufacturers and providers, that typically tips the scale from a procurement leverage. We can typically drive a gross margin rate expansion. How that manifests in dollars, all I'll say is, look, it's very much more of a revenue event for us than it is a gross profit dollar event. From a supply chain risk management, it typically de-risks our supply chain. Given our direct relationships with virtually all of the manufacturers, we can be very responsive as payers want to actively manage formularies and can pretty much turn on a dime. Okay, great. I'll leave it there. Thank you. Thanks, Jamie. Thanks, Jamie. Thank you. One moment for our next question. Our next question comes from Michael Petusky with Barrington Research. Your line is now open. Good morning. Hey, I was worried that you were maybe not tired of answering procurement questions. Let me ask one more real quick. The 33 of 35, obviously, you guys have been talking about this issue throughout, it feels like, most of 2023. But you did say, I think, Mike, that typically, you do get sort of in a more normalized year, some bit of tailwind because of your scale and contracts and all the rest of it. Can you just talk about what historically, I mean, that number has been in terms of tail? I mean, it's like $5 million, $10 million. What's a typical procurement tailwind for you guys in a more normalized year? I mean, it's probably in the zip code, Mike. I mean, again, there's puts and takes every year. On the scale that we have, it's somewhere in the zip code of what you articulated. Okay, great. And then just one more quick one. Just in terms of you sort of gave the history since 2019 and obviously a great history of high levels of execution. Has anything in terms of 2024 guidance, your methodology for providing it, I mean, gotten more aggressive? Or Or essentially, the methodology that you've historically used to get to your initial guidance for a given year, has that remained the same? Okay. Thanks, Mike. Look, I think it's not lost on us that we built a reputation of laying out expectations, that we have a high degree of confidence going into the year that we can deliver. Our track record is one that we're proud of. We have a very robust process looking at a number of dynamics that as we get bigger, there's a little bit of a bigger range from a plus-minus perspective. But the fundamental approach of how we approach communicating expectations for the year has not changed. Excellent. Thanks, guys. Congrats on a great year. Thanks. Yeah. Thanks, Mike. Thanks, Mike. Thank you. I'm showing no further questions at this time. I would now like to turn it back to management for closing remarks. Thank you all for joining us this morning and participating on our call. As we outlined, 2023 was a very productive year, and our team continued to execute at a very high level. We understand the important role that we play in delivering care to our patients and their families, and we look forward to serving even more patients in 2024. Take care and have a great day. Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.