CHARLOTTE, N.C.--(BUSINESS WIRE)--
Premier Inc. (NASDAQ: PINC) today reported financial results for the
fiscal 2017 third quarter ended March 31, 2017.
Third-Quarter Highlights:
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Net revenue increased 27% to $379.8 million from the same period last
year; Supply Chain Services segment revenue rose 34% and Performance
Services segment revenue increased 10%.
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Net income rose 1% to $72.1 million from the same period a year ago.
After non-cash adjustments to reflect the change in the redemption
value of limited partners’ Class B common unit ownership at the end of
each period, diluted earnings per share reflected a loss of $1.58
compared with diluted earnings per share of $0.43 the prior year.
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Non-GAAP adjusted EBITDA* of $136.7 million increased 14% from the
same period last year.
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Non-GAAP adjusted fully distributed net income* increased 14% to $73.0
million, representing $0.52 per diluted share, an increase of 18% over
$0.44 per diluted share from a year ago.
-
Updated fiscal 2017 guidance reflects reduced Supply Chain Services
and Performance Services revenue ranges, narrowed consolidated
non-GAAP adjusted EBITDA range, and increased adjusted fully
distributed earning per share range.
* Descriptions of non-GAAP adjusted EBITDA, adjusted fully
distributed net income and other non-GAAP financial measures are
provided in “Use and Definition of Non-GAAP Financial Measures,” and
reconciliations to GAAP financial measures are provided in the tables at
the end of this release.
“Our fiscal third-quarter performance reflects the continuing growth and
strong profitability of our company,” said Susan DeVore, president and
chief executive officer. “Growth in our Supply Chain Services segment
was driven largely by our group purchasing business, which included
contributions from our recent Innovatix and Essensa acquisitions. The
double-digit Performance Services segment results were in line with
management expectations of increased growth in the second half of the
fiscal year.”
“While we experienced some revenue headwinds in our lower-margin
integrated pharmacy business within Supply Chain Services, they had very
minimal impact on the quarter’s profitability or on the profitability
guidance for the remainder of the fiscal year,” DeVore said. “Looking at
the fourth quarter, we are reducing full-year revenue guidance, we are
narrowing our guidance range for consolidated non-GAAP adjusted EBITDA,
and we are raising guidance for non-GAAP fully distributed earnings per
share to reflect management’s confidence in achieving strong
profitability growth for the quarter and full year.
“Looking forward, we believe our integrated offerings and strong
profitability and cash flows uniquely position Premier to grow, invest
and prosper through short-term market fluctuations, while leading our
health systems through the longer-term transformation of our nation’s
healthcare,” DeVore said. “We plan to do this by continuing to cultivate
and expand our capabilities as we strive to provide comprehensive and
unmatched value to our member health systems through supply chain, data
analytics and performance improvement solutions that address their
current and future cost, quality, safety and value-based care delivery
challenges. We believe execution of this plan will deliver long-term
stockholder growth and value.”
Results of Operations for the Third Quarter of Fiscal 2017
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Consolidated Third-Quarter Financial Highlights
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Three Months Ended March 31,
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Nine Months Ended March 31,
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(in thousands, except per share data)
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2017
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2016
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% Change
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2017
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2016
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% Change
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Net Revenue (a):
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Supply Chain Services:
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Net administrative fees
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$
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143,915
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$
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131,270
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10%
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$
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398,962
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$
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369,952
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8%
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Other services and support
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3,116
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1,104
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182%
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5,962
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2,963
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101%
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Services
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147,031
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132,374
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11%
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404,924
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372,915
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9%
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Products
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138,132
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80,010
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73%
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386,639
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239,107
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62%
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Total Supply Chain Services (a)
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285,163
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212,384
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34%
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791,563
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612,022
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29%
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Performance Services (a)
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94,640
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86,285
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10%
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260,012
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249,151
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4%
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Total (a)
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$
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379,803
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$
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298,669
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27%
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$
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1,051,575
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$
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861,173
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22%
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Net income
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$
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72,139
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$
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71,557
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1%
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$
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308,909
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$
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184,805
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67%
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Net income (loss) attributable to stockholders
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$
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(79,800
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)
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$
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299,948
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(127)%
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$
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323,268
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$
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716,719
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(55)%
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Adjusted net income (loss) (b)
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$
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(79,800
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)
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$
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62,006
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(229)%
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$
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258,087
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$
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150,166
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72%
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Weighted average shares outstanding:
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Basic
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50,525
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44,716
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13%
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49,051
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41,329
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19%
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Diluted
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50,525
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145,018
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(65)%
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141,372
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145,558
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(3)%
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Earnings (loss) per share attributable to stockholders:
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Basic
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$
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(1.58
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)
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$
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6.71
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(124)%
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$
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6.59
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$
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17.34
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(62)%
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Diluted (b) (c)
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$
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(1.58
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)
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$
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0.43
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nm
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$
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1.83
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$
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1.03
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78%
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NON-GAAP MEASURES:
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Adjusted EBITDA (a) (d):
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Supply Chain Services
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$
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127,898
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$
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118,704
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8%
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$
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364,224
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$
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329,642
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10%
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Performance Services
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36,535
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30,771
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19%
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87,449
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90,158
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(3)%
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Total segment adjusted EBITDA
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164,433
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149,475
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10%
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451,673
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419,800
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8%
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Corporate
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(27,709
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(29,546
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6%
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(82,167
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(78,819
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(4)%
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Total (a)
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$
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136,724
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$
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119,929
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14%
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$
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369,506
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$
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340,981
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8%
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Adjusted fully distributed net income (d)
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$
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72,959
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$
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63,920
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14%
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$
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197,129
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$
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181,691
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8%
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Earnings per share on adjusted fully distributed net income -
diluted (a) (d)
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$
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0.52
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$
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0.44
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18%
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$
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1.39
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$
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1.25
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11%
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(a) Bolded measures correspond to company guidance.
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(b) Earnings (loss) per share attributable to stockholders includes
an adjustment to net income (loss) attributable to stockholders of
redeemable limited partners' capital to redemption amount of
($100.0) million and $284.4 million for the three months ended March
31, 2017 and 2016, respectively, and $247.0 million and $685.6
million for the nine months ended March 31, 2017 and 2016,
respectively.
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(c) Due to the net loss attributable to stockholders during the
three months ended March 31, 2017, diluted earnings (loss) per share
is equal to basic earnings (loss) per share.
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(d) See attached supplemental financial information for
reconciliation of reported GAAP results to Non-GAAP results.
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nm = not meaningful
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For the fiscal third-quarter ended March 31, 2017, Premier generated net
revenue of $379.8 million, an increase of 27% from net revenue of $298.7
million for the same period a year ago.
Net income for the fiscal third-quarter increased slightly to $72.1
million from $71.6 million for the same period a year ago. In accordance
with GAAP, fiscal 2017 and 2016 third-quarter net income attributable to
stockholders included non-cash adjustments of $(100.0) million and
$284.4 million, respectively, to reflect the change in the redemption
value of limited partners’ Class B common unit ownership at the end of
each period. These non-cash adjustments result primarily from changes in
the number of Class B common shares and the company’s stock price
between periods and do not reflect results of the company’s business
operations. After these non-cash adjustments, the company reported a net
loss attributable to stockholders of $79.8 million, compared with net
income of $299.9 million for the same period a year ago. Third-quarter
diluted earnings per-share results, which are based on net income
adjusted for the tax expense related to Premier Inc. retaining the
portion of net income attributable to income from non-controlling
interest in Premier LP, reflected a net loss of $1.58, compared with
diluted earnings per share of $0.43 for the same period a year ago. See
“Calculation of GAAP Earnings per Share” in the income statement section
of this press release.
Fiscal third-quarter non-GAAP adjusted EBITDA of $136.7 million
increased 14% from $119.9 million for the same period the prior year.
The growth was driven by a 10% increase in net administrative fees
revenues primarily resulting from the Innovatix and Essensa acquisition,
as well as by the 10% revenue increase from the Performance Services
segment, and a decrease in corporate expenses.
Non-GAAP adjusted fully distributed net income for the fiscal third
quarter increased to $73.0 million from $63.9 million for the same
period a year ago. Adjusted fully distributed earnings per share
increased 18% to $0.52 from $0.44 for the same period a year ago.
Adjusted fully distributed earnings per share is a non-GAAP financial
measure that represents net income, adjusted for non-recurring and
non-cash items, attributable to all stockholders as if all Class B
stockholders exchanged their Class B common units and associated Class B
common shares for Class A common shares.
Segment Results
Supply Chain Services
For the fiscal third-quarter ended March 31, 2017, the Supply Chain
Services segment generated net revenue of $285.2 million, an increase of
34% from $212.4 million a year ago. Group purchasing net administrative
fees revenue of $143.9 million increased $12.6 million, or 10% from a
year ago, due largely to the Innovatix and Essensa businesses. Periodic
variability based on timing of when cash and vendor reports are received
impacted the company’s organic group purchasing business during the
quarter.
During the quarter, Innovatix and Essensa contributed an additional
$11.6 million in net administrative fees revenue related to cash
received post-acquisition for member purchases that occurred prior to
acquisition. However, these cash collections are unable to be recognized
as GAAP revenue under purchase accounting rules and, as in the 2017
fiscal second quarter, are reflected in non-GAAP adjusted EBITDA.
Product revenues of $138.1 million increased $58.1 million, or 73% from
a year ago, reflecting growth in both integrated pharmacy and direct
sourcing. The Acro Pharmaceutical Services business, acquired in August
2016, accounted for the majority of the increase.
However, in the respiratory area, the company experienced revenue that
was below management’s expectations, primarily as a result of lower
prescription volumes associated with two drugs serving the Idiopathic
Pulmonary Fibrosis market. Management believes this lower prescription
volume was the result of two main factors: underperformance of Acro’s
former parent under a services agreement entered into when Acro was
acquired, and a central-hub distribution process imposed by the
manufacturer of one of these drugs, which management discussed last
quarter. Premier is working with Acro's former parent and the
manufacturer to resolve these issues.
Premier’s legacy specialty pharmacy business also continued to
experience declining revenues from certain limited distribution drugs,
primarily those used to treat Hepatitis C. Direct sourcing revenue
increased from a year ago, driven primarily by aggregated purchasing of
certain products.
Supply Chain Services segment adjusted EBITDA of $127.9 million for the
fiscal 2017 third-quarter increased 8% from $118.7 million for the same
period a year ago. The increase primarily reflects net administrative
fees revenue growth from the company’s Innovatix and Essensa acquisition.
Performance Services
For the fiscal third-quarter ended March 31, 2017, the Performance
Services segment generated net revenue of $94.6 million, a 10% increase
from $86.3 million for the same quarter last year. The increase is
primarily due to 11% growth in advisory services revenue and 9% growth
in the segment’s Informatics & Technology Services business.
Performance Services segment adjusted EBITDA of $36.5 million for the
fiscal 2017 third-quarter increased 19% from $30.8 million for the same
quarter last year. Growth was primarily driven by the segment’s revenue
increase, partially offset by an increase in cost of sales related to
higher labor and consulting costs for delivery on certain advisory
services engagements.
Results of Operations for the Nine Months Ended March 31, 2017
For the nine months ended March 31, 2017, Premier generated net revenue
of $1.05 billion, a 22% increase from net revenue of $861.2 million for
the same period a year ago.
Net income for the nine-month period totaled $308.9 million, compared
with $184.8 million for the same period a year ago. Fiscal 2017 and 2016
nine-month net income attributable to stockholders required non-cash
adjustments of $247.0 million and $685.6 million, respectively, to
reflect changes in redemption value of the limited partners’ Class B
common unit ownership at the end of each period. These non-cash
adjustments result from changes in the company’s stock price between
periods and do not reflect results of the company’s business operations.
After these non-cash adjustments based on the changes in stock price,
the company reported net income attributable to stockholders of $1.83
per diluted share, compared with a net income attributable to
stockholders of $1.03 per diluted share a year ago. (See income
statement in the tables section of this press release.)
For the nine months ended March 31, 2017, non-GAAP adjusted EBITDA of
$369.5 million increased 8% from $341.0 million for the same period last
year. Non-GAAP adjusted fully distributed net income for the nine months
rose 8% to $197.1 million from $181.7 million a year ago, representing
$1.39 per diluted share, an 11% increase from $1.25.
Supply Chain Services segment net revenue for the nine months of fiscal
2017 increased 29% to $791.6 million from $612.0 million a year earlier.
Supply Chain Services segment adjusted EBITDA increased 10% to $364.2
million from $329.6 million for the prior year.
Performance Services segment net revenue for the nine months of fiscal
2017 increased 4% to $260.0 million from $249.2 million a year earlier,
while segment adjusted EBITDA decreased 3% to $87.4 million from $90.2
million.
Cash Flows and Liquidity
Cash provided by operating activities was $274.2 million for the
nine-month period ended March 31, 2017, compared with $270.9 million for
the same period last year. The increase in cash flow from operations
primarily results from higher net income, particularly from growth in
net administrative fees. At March 31, 2017, the company’s cash and cash
equivalents totaled $236.2 million, compared with $218.9 million at
December 31, 2016. The increase primarily results from cash generated
from operations. At March 31, 2017, the company had an outstanding
balance of $367.5 million on its five-year $750.0 million revolving
credit facility. During the fiscal third quarter, the company repaid
$57.5 million on the credit facility. Subsequent to the close of the
quarter, the company repaid an additional $97.5 million, reducing the
current outstanding balance on its credit facility to $270.0 million.
Non-GAAP free cash flow for the fiscal third-quarter and nine months
ended March 31, 2017 was $95.5 million and $155.0 million, respectively,
compared with $97.9 million and $148.3 million for the same periods a
year ago. The decline in free cash flow for the quarter was primarily
driven by increased outflows in the current quarter related to working
capital needs and higher capital expenditures. The increase in free cash
flow for the nine-month period was primarily driven by an increase in
net administrative fees and lower year-to-date capital expenditures,
partially offset by increased outflows in the current year related to
working capital needs. (See free cash flow definition in “Use and
Definitions of Non-GAAP Financial Measures,” and reconciliation to net
cash provided by operating activities is provided in the tables section
of this press release).
Fiscal 2017 Outlook and Guidance
Based on results for the nine months ended March 31, 2017 and
management’s current expectations for the remainder of fiscal 2017, the
company is narrowing and adjusting guidance to reflect reduced revenue
contributions from the company’s integrated pharmacy business, as well
as more moderate full-year growth expectations for the Performance
Services segment. Given the majority of the revenue guidance reduction
is associated with the company’s lower-margin integrated pharmacy
business, the revenue reductions do not significantly impact
profitability guidance. Updated guidance is reflected in the table below.
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Fiscal 2017 Financial Guidance (1)
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Premier, Inc. adjusts full-year fiscal 2017 financial guidance, as
follows:
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Current*
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Previous
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(in millions, except per share data)
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FY 2017
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% YoY Increase
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FY 2017
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Net Revenue:
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Supply Chain Services segment
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$1,084.0 - $1,115.0
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31% - 34%
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$1,129.0 - $1,180.0
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Performance Services segment
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$348.0 - $357.0
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4% - 7%
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$355.0 - $375.0
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Total Net Revenue
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$1,432.0 - $1,472.0
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23% - 27%
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$1,484.0 - $1,555.0
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Non-GAAP adjusted EBITDA
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$500.0 - $510.0
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13% - 16%
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$493.0 - $521.0
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Non-GAAP adjusted fully distributed EPS
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$1.89 - $1.94
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17% - 20%
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$1.80 - $1.93
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* Guidance adjustments as of May 8, 2017.
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(1) The company does not meaningfully reconcile
guidance for non-GAAP adjusted EBITDA and non-GAAP adjusted fully
distributed earnings per share to net income attributable to
stockholders or earnings per share attributable to stockholders
because the company cannot provide guidance for more significant
reconciling items between net income attributable to stockholders
and adjusted EBITDA and between earnings per share attributable to
stockholders and non-GAAP adjusted fully distributed earnings per
share without unreasonable effort. This is because of two primary
reasons:
• Reasonable guidance cannot be provided for
reconciling the adjustment of redeemable limited partners’ capital
to redemption amount – historically the largest adjustment in the
reconciliation from non-GAAP to GAAP amounts – due to the fact
that the increase or decrease in this item is based on the change
in the company’s stock price between quarters, which the company
cannot predict, control or reasonably estimate.
• Reasonable
guidance cannot be provided for earnings per share attributable to
stockholders because the ongoing quarterly member-owner exchange
of Class B common stock and corresponding Class B units into
shares of Class A common stock impacts the number of shares of
Class A common stock outstanding each quarter, which the company
cannot predict, control or reasonably estimate. Member owners have
the right, but not the obligation, to exchange shares on a
quarterly basis.
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Conference Call
Premier management will host a conference call and live audio webcast on
Monday, May 8, 2017, at 5:00 p.m. ET, to discuss the company’s financial
results. The conference call can be accessed through a link provided on
the investor relations page on Premier’s website at investors.premierinc.com.
Those wanting to participate by phone may do so by dialing 844.296.7719
and providing the operator with conference ID number: 95269826.
International callers should dial 574.990.1041 and provide the same
passcode. The company encourages callers to dial in at least five
minutes before the start of the call to register. The archived webcast
will be accessible on Premier’s investor relations page.
About Premier Inc.
Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company,
uniting an alliance of approximately 3,750 U.S. hospitals and more than
130,000 other providers to transform healthcare. With integrated data
and analytics, collaboratives, supply chain solutions, and advisory and
other services, Premier enables better care and outcomes at a lower
cost. Premier, a Malcolm Baldrige National Quality Award recipient,
plays a critical role in the rapidly evolving healthcare industry,
collaborating with members to co-develop long-term innovations that
reinvent and improve the way care is delivered to patients nationwide.
Headquartered in Charlotte, N.C., Premier is passionate about
transforming American healthcare. Please visit Premier’s news and
investor sites on www.premierinc.com;
as well as Twitter,
Facebook,
LinkedIn,
YouTube,
Instagram,
Foursquare
and Premier’s
blog for more information about the company.
Use and Definitions of Non-GAAP Financial Measures
Premier uses EBITDA, adjusted EBITDA, segment adjusted EBITDA, adjusted
fully distributed net income, adjusted fully distributed earnings per
share, and free cash flow to facilitate a comparison of the company’s
operating performance on a consistent basis from period to period and to
provide measures that, when viewed in combination with its results
prepared in accordance with GAAP, allow for a more complete
understanding of factors and trends affecting the company’s business
than GAAP measures alone. The company believes adjusted EBITDA and
segment adjusted EBITDA assist its board of directors, management and
investors in comparing the company’s operating performance on a
consistent basis from period to period by removing the impact of the
company’s asset base (primarily depreciation and amortization) and items
outside the control of management (taxes), as well as other non-cash
(impairment of intangible assets and purchase accounting adjustments)
and non-recurring items, from operating results. Non-recurring items are
income or expenses or other items that have not been earned or incurred
within the prior two years and are not expected to recur within the next
two years. Such items include certain strategic and financial
restructuring expenses.
In addition, adjusted fully distributed net income eliminates the
variability of non-controlling interest as a result of member owner
exchanges of Class B common stock and corresponding Class B units into
shares of Class A common stock (which exchanges are a member owner’s
cumulative right, but not obligation, which began on October 31, 2014,
and occur each quarter thereafter, and are limited to one-seventh of the
member owner’s initial allocation of Class B common units per year) and
other potentially dilutive equity transactions which are outside of
management’s control. Adjusted fully distributed net income is defined
as net income attributable to Premier (i) excluding income tax expense,
(ii) excluding the impact of adjustment of redeemable limited partners’
capital to redemption amount, (iii) excluding the effect of
non-recurring and non-cash items, (iv) assuming the exchange of all the
Class B common units for shares of Class A common stock, which results
in the elimination of non-controlling interest in Premier LP, and (v)
reflecting an adjustment for income tax expense on non-GAAP fully
distributed net income before income taxes at the company’s estimated
effective income tax rate.
EBITDA is defined as net income before interest and investment income,
net, income tax expense, depreciation and amortization and amortization
of purchased intangible assets. Adjusted EBITDA is defined as EBITDA
before merger and acquisition related expenses and non-recurring,
non-cash or non-operating items, and including equity in net income of
unconsolidated affiliates. Non-recurring items include certain strategic
and financial restructuring expenses. Non-operating items include gain
or loss on the disposal of assets. Segment adjusted EBITDA is defined as
the segment's net revenue less cost of revenue and operating expenses
directly attributable to the segment, excluding depreciation and
amortization, amortization of purchased intangible assets, merger and
acquisition related expenses and non-recurring or non-cash items, and
including equity in net income of unconsolidated affiliates. Operating
expenses directly attributable to the segment include expenses
associated with sales and marketing, general and administrative and
product development activities specific to the operation of each
segment. General and administrative corporate expenses that are not
specific to a particular segment are not included in the calculation of
segment adjusted EBITDA. Adjusted EBITDA is a supplemental financial
measure used by the company and by external users of the company’s
financial statements.
Management considers adjusted EBITDA an indicator of the operational
strength and performance of the company’s business. Adjusted EBITDA
allows management to assess performance without regard to financing
methods and capital structure and without the impact of other matters
that management does not consider indicative of the operating
performance of the business. Segment adjusted EBITDA is the primary
earnings measure used by management to evaluate the performance of the
company’s business segments.
Free cash flow is defined as net cash provided by operating activities
less distributions and tax receivable agreement payments to limited
partners and purchases of property and equipment. Management believes
free cash flow is an important measure because it represents the cash
that the company generates after payment of tax distributions to limited
partners and capital investment to maintain existing products and
services and ongoing business operations, as well as development of new
and upgraded products and services to support future growth. Free cash
flow is important because it allows the company to enhance stockholder
value through acquisitions, partnerships, joint ventures, investments in
related or complimentary businesses and/or debt reduction.
Forward-Looking Statements
Statements made in this release that are not statements of historical or
current facts, such as those related to expected financial performance
and growth trends in our Supply Chain and Performance Services business
segments and their respective business units, expected financial
contributions from our acquired businesses, and the statements related
to fiscal 2017 outlook and guidance are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements may involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of Premier to be materially different from
historical results or from any future results or projections expressed
or implied by such forward-looking statements. Accordingly, readers
should not place undue reliance on any forward looking statements. In
addition to statements that explicitly describe such risks and
uncertainties, readers are urged to consider statements in the
conditional or future tenses or that include terms such as “believes,”
“belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to
be uncertain and forward-looking. Forward-looking statements may include
comments as to Premier’s beliefs and expectations as to future events
and trends affecting its business and are necessarily subject to
uncertainties, many of which are outside Premier’s control. More
information on potential factors that could affect Premier’s financial
results is included from time to time in the “Cautionary Note Regarding
Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” sections
of Premier’s periodic and current filings with the SEC, including those
discussed under the “Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” section of Premier’s Form 10-K for the year
ended June 30, 2016 and Form 10-Q for the quarter ended December 31,
2016, as well as the Form 10-Q for the quarter ended March 31, 2017,
expected to be filed with the SEC shortly after the date of this
release, and also made available on Premier’s website at investors.premierinc.com.
Forward-looking statements speak only as of the date they are made, and
Premier undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information or
future events that occur after that date, or otherwise.
|
|
|
Condensed Consolidated Statements of Income
|
|
(Unaudited)
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net administrative fees
|
|
|
$
|
143,915
|
|
|
|
$
|
131,270
|
|
|
|
$
|
398,962
|
|
|
|
$
|
369,952
|
|
|
Other services and support
|
|
|
|
97,756
|
|
|
|
|
87,389
|
|
|
|
|
265,974
|
|
|
|
|
252,114
|
|
|
Services
|
|
|
|
241,671
|
|
|
|
|
218,659
|
|
|
|
|
664,936
|
|
|
|
|
622,066
|
|
|
Products
|
|
|
|
138,132
|
|
|
|
|
80,010
|
|
|
|
|
386,639
|
|
|
|
|
239,107
|
|
|
Net revenue
|
|
|
|
379,803
|
|
|
|
|
298,669
|
|
|
|
|
1,051,575
|
|
|
|
|
861,173
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
|
47,319
|
|
|
|
|
40,685
|
|
|
|
|
134,865
|
|
|
|
|
119,301
|
|
|
Products
|
|
|
|
129,929
|
|
|
|
|
71,408
|
|
|
|
|
356,900
|
|
|
|
|
214,512
|
|
|
Cost of revenue
|
|
|
|
177,248
|
|
|
|
|
112,093
|
|
|
|
|
491,765
|
|
|
|
|
333,813
|
|
|
Gross profit
|
|
|
|
202,555
|
|
|
|
|
186,576
|
|
|
|
|
559,810
|
|
|
|
|
527,360
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
108,668
|
|
|
|
|
101,898
|
|
|
|
|
296,833
|
|
|
|
|
288,120
|
|
|
Research and development
|
|
|
|
755
|
|
|
|
|
1,180
|
|
|
|
|
2,328
|
|
|
|
|
2,060
|
|
|
Amortization of purchased intangible assets
|
|
|
|
14,080
|
|
|
|
|
8,740
|
|
|
|
|
34,440
|
|
|
|
|
24,058
|
|
|
Operating expenses
|
|
|
|
123,503
|
|
|
|
|
111,818
|
|
|
|
|
333,601
|
|
|
|
|
314,238
|
|
|
Operating income
|
|
|
|
79,052
|
|
|
|
|
74,758
|
|
|
|
|
226,209
|
|
|
|
|
213,122
|
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
204,833
|
|
|
|
|
-
|
|
|
Equity in net income of unconsolidated affiliates
|
|
|
|
83
|
|
|
|
|
6,627
|
|
|
|
|
14,789
|
|
|
|
|
16,002
|
|
|
Interest and investment (loss), net
|
|
|
|
(2,017
|
)
|
|
|
|
(285
|
)
|
|
|
|
(3,026
|
)
|
|
|
|
(981
|
)
|
|
Loss on disposal of long-lived assets
|
|
|
|
(725
|
)
|
|
|
|
-
|
|
|
|
|
(2,243
|
)
|
|
|
|
-
|
|
|
Other income (expense), net
|
|
|
|
2,260
|
|
|
|
|
-
|
|
|
|
|
3,135
|
|
|
|
|
(2,081
|
)
|
|
Other income (expense), net
|
|
|
|
(399
|
)
|
|
|
|
6,342
|
|
|
|
|
217,488
|
|
|
|
|
12,940
|
|
|
Income before income taxes
|
|
|
|
78,653
|
|
|
|
|
81,100
|
|
|
|
|
443,697
|
|
|
|
|
226,062
|
|
|
Income tax expense
|
|
|
|
6,514
|
|
|
|
|
9,543
|
|
|
|
|
134,788
|
|
|
|
|
41,257
|
|
|
Net income
|
|
|
|
72,139
|
|
|
|
|
71,557
|
|
|
|
|
308,909
|
|
|
|
|
184,805
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
(51,965
|
)
|
|
|
|
(56,018
|
)
|
|
|
|
(232,683
|
)
|
|
|
|
(153,735
|
)
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
|
(99,974
|
)
|
|
|
|
284,409
|
|
|
|
|
247,042
|
|
|
|
|
685,649
|
|
|
Net income (loss) attributable to stockholders
|
|
|
$
|
(79,800
|
)
|
|
|
$
|
299,948
|
|
|
|
$
|
323,268
|
|
|
|
$
|
716,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of GAAP Earnings (Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
$
|
(79,800
|
)
|
|
|
$
|
299,948
|
|
|
|
$
|
323,268
|
|
|
|
$
|
716,719
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
$
|
(79,800
|
)
|
|
|
$
|
299,948
|
|
|
|
$
|
323,268
|
|
|
|
$
|
716,719
|
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
|
-
|
|
|
|
|
(284,409
|
)
|
|
|
|
(247,042
|
)
|
|
|
|
(685,649
|
)
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
-
|
|
|
|
|
56,018
|
|
|
|
|
232,683
|
|
|
|
|
153,735
|
|
|
Net income (loss)
|
|
|
|
(79,800
|
)
|
|
|
|
71,557
|
|
|
|
|
308,909
|
|
|
|
|
184,805
|
|
|
Tax effect on Premier Inc. net income (a)
|
|
|
|
-
|
|
|
|
|
(9,551
|
)
|
|
|
|
(50,822
|
)
|
|
|
|
(34,639
|
)
|
|
Adjusted net income (loss)
|
|
|
$
|
(79,800
|
)
|
|
|
$
|
62,006
|
|
|
|
$
|
258,087
|
|
|
|
$
|
150,166
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares (b)
|
|
|
|
50,525
|
|
|
|
|
44,716
|
|
|
|
|
49,051
|
|
|
|
|
41,329
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares (b)
|
|
|
|
50,525
|
|
|
|
|
44,716
|
|
|
|
|
49,051
|
|
|
|
|
41,329
|
|
|
Effect of dilutive stock based awards (c)
|
|
|
|
-
|
|
|
|
|
2,465
|
|
|
|
|
446
|
|
|
|
|
2,172
|
|
|
Class B shares outstanding
|
|
|
|
-
|
|
|
|
|
97,837
|
|
|
|
|
91,875
|
|
|
|
|
102,057
|
|
|
Weighted average shares and assumed conversions
|
|
|
|
50,525
|
|
|
|
|
145,018
|
|
|
|
|
141,372
|
|
|
|
|
145,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
$
|
(1.58
|
)
|
|
|
$
|
6.71
|
|
|
|
$
|
6.59
|
|
|
|
$
|
17.34
|
|
|
Diluted earnings (loss) per share
|
|
|
$
|
(1.58
|
)
|
|
|
$
|
0.43
|
|
|
|
$
|
1.83
|
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Represents income tax expense related to Premier, Inc. retaining
the portion of net income attributable to income from
non-controlling interest in Premier, LP for the purpose of diluted
earnings per share.
|
|
|
|
(b) Weighted average number of common shares used for basic earnings
per share excludes weighted average shares of non-vested stock
options, non-vested restricted stock, non-vested performance share
awards and Class B shares outstanding for the three and nine months
ended March 31, 2017 and 2016.
|
|
|
|
(c) For the three months ended March 31, 2017, the effect of 2.8
million stock options, restricted stock units and performance
share awards and 88.9 million Class B common units exchangeable
for Class A common shares were excluded from diluted weighted
average shares outstanding due to the net loss attributable to
shareholders sustained for the quarter and as including them would
have been anti-dilutive for the period. For the nine months ended
March 31, 2017, the effect of 1.8 million stock options were
excluded from diluted weighted average shares outstanding as they
had an anti-dilutive effect, and the effect of 0.5 million
performance shares were excluded from diluted weighted average
shares outstanding as they had not satisfied the applicable
performance criteria at the end of the period.
For the
three and nine months ended March 31, 2016, the effect of 1.4
million stock options were excluded from diluted weighted average
shares outstanding as they had an anti-dilutive effect.
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
(Unaudited)
|
|
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2017
|
|
|
June 30, 2016
|
|
Assets
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
$
|
236,218
|
|
|
|
$
|
248,817
|
|
|
Marketable securities
|
|
|
|
-
|
|
|
|
|
17,759
|
|
|
Accounts receivable (net of $2,908 and $1,981 allowance for doubtful
accounts, respectively)
|
|
|
|
162,178
|
|
|
|
|
144,424
|
|
|
Inventory
|
|
|
|
48,770
|
|
|
|
|
29,121
|
|
|
Prepaid expenses and other current assets
|
|
|
|
41,702
|
|
|
|
|
19,646
|
|
|
Due from related parties
|
|
|
|
5,388
|
|
|
|
|
3,123
|
|
|
Total current assets
|
|
|
|
494,256
|
|
|
|
|
462,890
|
|
|
Marketable securities
|
|
|
|
-
|
|
|
|
|
30,130
|
|
|
Property and equipment (net of $303,052 and $265,751 accumulated
depreciation, respectively)
|
|
|
|
182,093
|
|
|
|
|
174,080
|
|
|
Intangible assets (net of $85,498 and $50,870 accumulated
amortization, respectively)
|
|
|
|
393,075
|
|
|
|
|
158,217
|
|
|
Goodwill
|
|
|
|
865,445
|
|
|
|
|
537,962
|
|
|
Deferred income tax assets
|
|
|
|
479,241
|
|
|
|
|
422,849
|
|
|
Deferred compensation plan assets
|
|
|
|
39,875
|
|
|
|
|
39,965
|
|
|
Investments in unconsolidated affiliates
|
|
|
|
98,878
|
|
|
|
|
16,800
|
|
|
Other assets
|
|
|
|
13,398
|
|
|
|
|
12,490
|
|
|
Total assets
|
|
|
$
|
2,566,261
|
|
|
|
$
|
1,855,383
|
|
|
|
|
|
|
|
|
|
|
Liabilities, redeemable limited partners' capital and
stockholders' deficit
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
30,974
|
|
|
|
$
|
46,003
|
|
|
Accrued expenses
|
|
|
|
78,988
|
|
|
|
|
56,774
|
|
|
Revenue share obligations
|
|
|
|
70,396
|
|
|
|
|
63,603
|
|
|
Limited partners' distribution payable
|
|
|
|
23,071
|
|
|
|
|
22,493
|
|
|
Accrued compensation and benefits
|
|
|
|
51,701
|
|
|
|
|
60,425
|
|
|
Deferred revenue
|
|
|
|
49,723
|
|
|
|
|
54,498
|
|
|
Current portion of tax receivable agreements
|
|
|
|
14,009
|
|
|
|
|
13,912
|
|
|
Current portion of long-term debt
|
|
|
|
376,710
|
|
|
|
|
5,484
|
|
|
Other liabilities
|
|
|
|
30,335
|
|
|
|
|
2,871
|
|
|
Total current liabilities
|
|
|
|
725,907
|
|
|
|
|
326,063
|
|
|
Long-term debt, less current portion
|
|
|
|
6,928
|
|
|
|
|
13,858
|
|
|
Tax receivable agreements, less current portion
|
|
|
|
333,407
|
|
|
|
|
265,750
|
|
|
Deferred compensation plan obligations
|
|
|
|
39,875
|
|
|
|
|
39,965
|
|
|
Deferred tax liabilities
|
|
|
|
80,422
|
|
|
|
|
-
|
|
|
Other liabilities
|
|
|
|
44,847
|
|
|
|
|
23,978
|
|
|
Total liabilities
|
|
|
|
1,231,386
|
|
|
|
|
669,614
|
|
|
|
|
|
|
|
|
|
|
Redeemable limited partners' capital
|
|
|
|
2,809,333
|
|
|
|
|
3,137,230
|
|
|
Stockholders' deficit:
|
|
|
|
|
|
|
|
Class A common stock, $0.01 par value, 500,000,000 shares
authorized; 50,706,518 and 45,995,528 shares issued and outstanding
at March 31, 2017 and June 30, 2016, respectively
|
|
|
|
507
|
|
|
|
|
460
|
|
|
Class B common stock, $0.000001 par value, 600,000,000 shares
authorized; 88,407,103 and 96,132,723 shares issued and outstanding
at March 31, 2017 and June 30, 2016, respectively
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Additional paid-in-capital
|
|
|
|
-
|
|
|
|
|
-
|
|
|
Accumulated deficit
|
|
|
|
(1,474,965
|
)
|
|
|
|
(1,951,878
|
)
|
|
Accumulated other comprehensive loss
|
|
|
|
-
|
|
|
|
|
(43
|
)
|
|
Total stockholders' deficit
|
|
|
|
(1,474,458
|
)
|
|
|
|
(1,951,461
|
)
|
|
Total liabilities, redeemable limited partners' capital and
stockholders' deficit
|
|
|
$
|
2,566,261
|
|
|
|
$
|
1,855,383
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
(Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
Operating activities
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
308,909
|
|
|
|
$
|
184,805
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
77,758
|
|
|
|
|
61,232
|
|
|
Equity in net income of unconsolidated affiliates
|
|
|
|
(14,789
|
)
|
|
|
|
(16,002
|
)
|
|
Deferred income taxes
|
|
|
|
112,669
|
|
|
|
|
22,345
|
|
|
Stock-based compensation
|
|
|
|
19,125
|
|
|
|
|
36,785
|
|
|
Adjustment to tax receivable agreement liability
|
|
|
|
(2,954
|
)
|
|
|
|
(4,818
|
)
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
(204,833
|
)
|
|
|
|
-
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
2,243
|
|
|
|
|
-
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
Accounts receivable, prepaid expenses and other current assets
|
|
|
|
7,037
|
|
|
|
|
(27,071
|
)
|
|
Other assets
|
|
|
|
405
|
|
|
|
|
(9,773
|
)
|
|
Inventories
|
|
|
|
(14,693
|
)
|
|
|
|
3,751
|
|
|
Accounts payable, accrued expenses, and other current liabilities
|
|
|
|
(11,082
|
)
|
|
|
|
21,450
|
|
|
Long-term liabilities
|
|
|
|
(1,221
|
)
|
|
|
|
(1,246
|
)
|
|
Other operating activities
|
|
|
|
(4,363
|
)
|
|
|
|
(521
|
)
|
|
Net cash provided by operating activities
|
|
|
|
274,211
|
|
|
|
|
270,937
|
|
|
Investing activities
|
|
|
|
|
|
|
|
Proceeds from sale of marketable securities
|
|
|
|
48,013
|
|
|
|
|
367,600
|
|
|
Purchase of marketable securities
|
|
|
|
-
|
|
|
|
|
(19,211
|
)
|
|
Acquisition of Innovatix, LLC and Essensa Ventures, LLC, net of cash
acquired
|
|
|
|
(319,717
|
)
|
|
|
|
-
|
|
|
Acquisition of Acro Pharmaceutical Services LLC and Community
Pharmacy Services, LLC, net of cash acquired
|
|
|
|
(64,500
|
)
|
|
|
|
-
|
|
|
Acquisition of CECity.com, Inc., net of cash acquired
|
|
|
|
-
|
|
|
|
|
(398,261
|
)
|
|
Acquisition of Healthcare Insights, LLC, net of cash acquired
|
|
|
|
-
|
|
|
|
|
(64,274
|
)
|
|
Acquisition of InFlow Health, LLC, net of cash acquired
|
|
|
|
-
|
|
|
|
|
(6,088
|
)
|
|
Investment in unconsolidated affiliates
|
|
|
|
(65,660
|
)
|
|
|
|
(3,250
|
)
|
|
Distributions received on equity investments in unconsolidated
affiliates
|
|
|
|
6,550
|
|
|
|
|
17,043
|
|
|
Purchases of property and equipment
|
|
|
|
(51,892
|
)
|
|
|
|
(54,684
|
)
|
|
Other investing activities
|
|
|
|
25
|
|
|
|
|
(6
|
)
|
|
Net cash used in investing activities
|
|
|
|
(447,181
|
)
|
|
|
|
(161,131
|
)
|
|
Financing activities
|
|
|
|
|
|
|
|
Payments made on notes payable
|
|
|
|
(3,336
|
)
|
|
|
|
(1,847
|
)
|
|
Proceeds from credit facility
|
|
|
|
425,000
|
|
|
|
|
150,000
|
|
|
Payments on credit facility
|
|
|
|
(57,500
|
)
|
|
|
|
(100,000
|
)
|
|
Proceeds from exercise of stock options under equity incentive plan
|
|
|
|
3,322
|
|
|
|
|
2,519
|
|
|
Proceeds from issuance of Class A common stock under stock purchase
plan
|
|
|
|
1,256
|
|
|
|
|
1,302
|
|
|
Repurchase of vested restricted units for employee tax-withholding
|
|
|
|
(17,678
|
)
|
|
|
|
(63
|
)
|
|
Settlement of exchange of Class B shares by member owners
|
|
|
|
(123,330
|
)
|
|
|
|
-
|
|
|
Distributions to limited partners of Premier LP
|
|
|
|
(67,363
|
)
|
|
|
|
(67,965
|
)
|
|
Final remittance of net income attributable to former S2S Global
minority shareholder
|
|
|
|
-
|
|
|
|
|
(1,890
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
|
160,371
|
|
|
|
|
(17,944
|
)
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
|
(12,599
|
)
|
|
|
|
91,862
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
248,817
|
|
|
|
|
146,522
|
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
236,218
|
|
|
|
$
|
238,384
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information - Reporting of Non-GAAP Free
Cash Flow
|
|
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|
|
(Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
Nine Months Ended
March 31,
|
|
|
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
2017
|
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by Operating Activities to
Non-GAAP Free Cash Flow:
|
|
Net cash provided by operating activities
|
|
|
|
|
$
|
135,847
|
|
|
|
|
$
|
136,210
|
|
|
|
|
$
|
274,211
|
|
|
|
|
$
|
270,937
|
|
|
Purchases of property and equipment
|
|
|
|
|
|
(17,567
|
)
|
|
|
|
|
(15,802
|
)
|
|
|
|
|
(51,892
|
)
|
|
|
|
|
(54,684
|
)
|
|
Distributions to limited partners of Premier LP
|
|
|
|
|
|
(22,733
|
)
|
|
|
|
|
(22,504
|
)
|
|
|
|
|
(67,363
|
)
|
|
|
|
|
(67,965
|
)
|
|
Non-GAAP Free Cash Flow
|
|
|
|
|
$
|
95,547
|
|
|
|
|
$
|
97,904
|
|
|
|
|
$
|
154,956
|
|
|
|
|
$
|
148,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information - Reporting of Adjusted EBITDA
|
|
and Non-GAAP Adjusted Fully Distributed Net Income
|
|
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|
|
(Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted EBITDA and
Reconciliation of Operating Income to Segment Adjusted EBITDA:
|
|
Net income
|
|
|
$
|
72,139
|
|
|
|
$
|
71,557
|
|
|
|
$
|
308,909
|
|
|
|
$
|
184,805
|
|
|
Interest and investment loss, net
|
|
|
|
2,017
|
|
|
|
|
285
|
|
|
|
|
3,026
|
|
|
|
|
981
|
|
|
Income tax expense
|
|
|
|
6,514
|
|
|
|
|
9,543
|
|
|
|
|
134,788
|
|
|
|
|
41,257
|
|
|
Depreciation and amortization
|
|
|
|
15,102
|
|
|
|
|
13,110
|
|
|
|
|
43,318
|
|
|
|
|
37,174
|
|
|
Amortization of purchased intangible assets
|
|
|
|
14,080
|
|
|
|
|
8,740
|
|
|
|
|
34,440
|
|
|
|
|
24,058
|
|
|
EBITDA
|
|
|
|
109,852
|
|
|
|
|
103,235
|
|
|
|
|
524,481
|
|
|
|
|
288,275
|
|
|
Stock-based compensation
|
|
|
|
7,157
|
|
|
|
|
11,839
|
|
|
|
|
19,476
|
|
|
|
|
37,093
|
|
|
Acquisition related expenses
|
|
|
|
4,330
|
|
|
|
|
2,583
|
|
|
|
|
11,483
|
|
|
|
|
11,699
|
|
|
Strategic and financial restructuring expenses
|
|
|
|
-
|
|
|
|
|
33
|
|
|
|
|
-
|
|
|
|
|
268
|
|
|
Adjustment to tax receivable agreement liability
|
|
|
|
2,768
|
|
|
|
|
-
|
|
|
|
|
(2,954
|
)
|
|
|
|
(4,818
|
)
|
|
ERP implementation expenses
|
|
|
|
215
|
|
|
|
|
1,162
|
|
|
|
|
1,741
|
|
|
|
|
3,240
|
|
|
Acquisition related adjustment - revenue
|
|
|
|
11,765
|
|
|
|
|
1,077
|
|
|
|
|
17,729
|
|
|
|
|
5,216
|
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(204,833
|
)
|
|
|
|
-
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
725
|
|
|
|
|
-
|
|
|
|
|
2,243
|
|
|
|
|
-
|
|
|
Other expense (income), net
|
|
|
|
(88
|
)
|
|
|
|
-
|
|
|
|
|
140
|
|
|
|
|
8
|
|
|
Adjusted EBITDA
|
|
|
$
|
136,724
|
|
|
|
$
|
119,929
|
|
|
|
$
|
369,506
|
|
|
|
$
|
340,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
$
|
78,653
|
|
|
|
$
|
81,100
|
|
|
|
$
|
443,697
|
|
|
|
$
|
226,062
|
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(204,833
|
)
|
|
|
|
-
|
|
|
Equity in net income of unconsolidated affiliates
|
|
|
|
(83
|
)
|
|
|
|
(6,627
|
)
|
|
|
|
(14,789
|
)
|
|
|
|
(16,002
|
)
|
|
Interest and investment loss (income), net
|
|
|
|
2,017
|
|
|
|
|
285
|
|
|
|
|
3,026
|
|
|
|
|
981
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
725
|
|
|
|
|
-
|
|
|
|
|
2,243
|
|
|
|
|
-
|
|
|
Other expense (income), net
|
|
|
|
(2,260
|
)
|
|
|
|
-
|
|
|
|
|
(3,135
|
)
|
|
|
|
2,081
|
|
|
Operating income
|
|
|
|
79,052
|
|
|
|
|
74,758
|
|
|
|
|
226,209
|
|
|
|
|
213,122
|
|
|
Depreciation and amortization
|
|
|
|
15,102
|
|
|
|
|
13,110
|
|
|
|
|
43,318
|
|
|
|
|
37,174
|
|
|
Amortization of purchased intangible assets
|
|
|
|
14,080
|
|
|
|
|
8,740
|
|
|
|
|
34,440
|
|
|
|
|
24,058
|
|
|
Stock-based compensation
|
|
|
|
7,157
|
|
|
|
|
11,839
|
|
|
|
|
19,476
|
|
|
|
|
37,093
|
|
|
Acquisition related expenses
|
|
|
|
4,330
|
|
|
|
|
2,583
|
|
|
|
|
11,483
|
|
|
|
|
11,699
|
|
|
Strategic and financial restructuring expenses
|
|
|
|
-
|
|
|
|
|
33
|
|
|
|
|
-
|
|
|
|
|
268
|
|
|
Adjustment to tax receivable agreement liability
|
|
|
|
2,768
|
|
|
|
|
-
|
|
|
|
|
(2,954
|
)
|
|
|
|
(4,818
|
)
|
|
ERP implementation expenses
|
|
|
|
215
|
|
|
|
|
1,162
|
|
|
|
|
1,741
|
|
|
|
|
3,240
|
|
|
Acquisition related adjustment - revenue
|
|
|
|
11,765
|
|
|
|
|
1,077
|
|
|
|
|
17,729
|
|
|
|
|
5,216
|
|
|
Equity in net income of unconsolidated affiliates
|
|
|
|
83
|
|
|
|
|
6,627
|
|
|
|
|
14,789
|
|
|
|
|
16,002
|
|
|
Deferred compensation plan income (expense)
|
|
|
|
1,675
|
|
|
|
|
-
|
|
|
|
|
2,778
|
|
|
|
|
(2,073
|
)
|
|
Other income
|
|
|
|
497
|
|
|
|
|
-
|
|
|
|
|
497
|
|
|
|
|
-
|
|
|
Adjusted EBITDA
|
|
|
$
|
136,724
|
|
|
|
$
|
119,929
|
|
|
|
$
|
369,506
|
|
|
|
$
|
340,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supply Chain Services
|
|
|
$
|
127,898
|
|
|
|
$
|
118,704
|
|
|
|
$
|
364,224
|
|
|
|
$
|
329,642
|
|
|
Performance Services
|
|
|
|
36,535
|
|
|
|
|
30,771
|
|
|
|
|
87,449
|
|
|
|
|
90,158
|
|
|
Corporate
|
|
|
|
(27,709
|
)
|
|
|
|
(29,546
|
)
|
|
|
|
(82,167
|
)
|
|
|
|
(78,819
|
)
|
|
Adjusted EBITDA
|
|
|
$
|
136,724
|
|
|
|
$
|
119,929
|
|
|
|
$
|
369,506
|
|
|
|
$
|
340,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) Attributable to
Stockholders to Non-GAAP Adjusted Fully Distributed Net Income:
|
|
Net income (loss) attributable to stockholders
|
|
|
$
|
(79,800
|
)
|
|
|
$
|
299,948
|
|
|
|
$
|
323,268
|
|
|
|
$
|
716,719
|
|
|
Adjustment of redeemable partners' capital to redemption amount
|
|
|
|
99,974
|
|
|
|
|
(284,409
|
)
|
|
|
|
(247,042
|
)
|
|
|
|
(685,649
|
)
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
51,965
|
|
|
|
|
56,018
|
|
|
|
|
232,683
|
|
|
|
|
153,735
|
|
|
Income tax expense
|
|
|
|
6,514
|
|
|
|
|
9,543
|
|
|
|
|
134,788
|
|
|
|
|
41,257
|
|
|
Amortization of purchased intangible assets
|
|
|
|
14,080
|
|
|
|
|
8,740
|
|
|
|
|
34,440
|
|
|
|
|
24,058
|
|
|
Stock-based compensation
|
|
|
|
7,157
|
|
|
|
|
11,839
|
|
|
|
|
19,476
|
|
|
|
|
37,093
|
|
|
Acquisition related expenses
|
|
|
|
4,330
|
|
|
|
|
2,583
|
|
|
|
|
11,483
|
|
|
|
|
11,699
|
|
|
Strategic and financial restructuring expenses
|
|
|
|
-
|
|
|
|
|
33
|
|
|
|
|
-
|
|
|
|
|
268
|
|
|
Adjustment to tax receivable agreement liability
|
|
|
|
2,768
|
|
|
|
|
-
|
|
|
|
|
(2,954
|
)
|
|
|
|
(4,818
|
)
|
|
ERP implementation expenses
|
|
|
|
215
|
|
|
|
|
1,162
|
|
|
|
|
1,741
|
|
|
|
|
3,240
|
|
|
Acquisition related adjustment - revenue
|
|
|
|
11,765
|
|
|
|
|
1,077
|
|
|
|
|
17,729
|
|
|
|
|
5,216
|
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(204,833
|
)
|
|
|
|
-
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
725
|
|
|
|
|
-
|
|
|
|
|
2,243
|
|
|
|
|
-
|
|
|
Other expense (income), net
|
|
|
|
(88
|
)
|
|
|
|
-
|
|
|
|
|
140
|
|
|
|
|
-
|
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
|
119,605
|
|
|
|
|
106,534
|
|
|
|
|
323,162
|
|
|
|
|
302,818
|
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
|
46,646
|
|
|
|
|
42,614
|
|
|
|
|
126,033
|
|
|
|
|
121,127
|
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
|
$
|
72,959
|
|
|
|
$
|
63,920
|
|
|
|
$
|
197,129
|
|
|
|
$
|
181,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information - Reporting of Net Income and
Earnings Per Share
|
|
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|
|
(Unaudited)
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
Nine Months Ended
March 31,
|
|
|
|
|
2017
|
|
|
2016
|
|
|
2017
|
|
|
2016
|
|
Reconciliation of numerator for GAAP EPS to Non-GAAP EPS on
Adjusted Fully Distributed Net Income:
|
|
Net income (loss) attributable to stockholders
|
|
|
$
|
(79,800
|
)
|
|
|
$
|
299,948
|
|
|
|
$
|
323,268
|
|
|
|
$
|
716,719
|
|
|
Adjustment of redeemable partners' capital to redemption amount
|
|
|
|
99,974
|
|
|
|
|
(284,409
|
)
|
|
|
|
(247,042
|
)
|
|
|
|
(685,649
|
)
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
51,965
|
|
|
|
|
56,018
|
|
|
|
|
232,683
|
|
|
|
|
153,735
|
|
|
Income tax expense
|
|
|
|
6,514
|
|
|
|
|
9,543
|
|
|
|
|
134,788
|
|
|
|
|
41,257
|
|
|
Amortization of purchased intangible assets
|
|
|
|
14,080
|
|
|
|
|
8,740
|
|
|
|
|
34,440
|
|
|
|
|
24,058
|
|
|
Stock-based compensation
|
|
|
|
7,157
|
|
|
|
|
11,839
|
|
|
|
|
19,476
|
|
|
|
|
37,093
|
|
|
Acquisition related expenses
|
|
|
|
4,330
|
|
|
|
|
2,583
|
|
|
|
|
11,483
|
|
|
|
|
11,699
|
|
|
Strategic and financial restructuring expenses
|
|
|
|
-
|
|
|
|
|
33
|
|
|
|
|
-
|
|
|
|
|
268
|
|
|
Adjustment to tax receivable agreement liability
|
|
|
|
2,768
|
|
|
|
|
-
|
|
|
|
|
(2,954
|
)
|
|
|
|
(4,818
|
)
|
|
ERP implementation expenses
|
|
|
|
215
|
|
|
|
|
1,162
|
|
|
|
|
1,741
|
|
|
|
|
3,240
|
|
|
Acquisition related adjustment - revenue
|
|
|
|
11,765
|
|
|
|
|
1,077
|
|
|
|
|
17,729
|
|
|
|
|
5,216
|
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(204,833
|
)
|
|
|
|
-
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
725
|
|
|
|
|
-
|
|
|
|
|
2,243
|
|
|
|
|
-
|
|
|
Other expense (income), net
|
|
|
|
(88
|
)
|
|
|
|
-
|
|
|
|
|
140
|
|
|
|
|
-
|
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
|
119,605
|
|
|
|
|
106,534
|
|
|
|
|
323,162
|
|
|
|
|
302,818
|
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
|
46,646
|
|
|
|
|
42,614
|
|
|
|
|
126,033
|
|
|
|
|
121,127
|
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
|
$
|
72,959
|
|
|
|
$
|
63,920
|
|
|
|
$
|
197,129
|
|
|
|
$
|
181,691
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of denominator for GAAP EPS to Non-GAAP
Adjusted Fully Distributed Earnings per Share:
|
|
Weighted Average:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares used for basic and diluted earnings (loss) per share
|
|
|
|
50,525
|
|
|
|
|
44,716
|
|
|
|
|
49,051
|
|
|
|
|
41,329
|
|
|
Potentially dilutive shares
|
|
|
|
465
|
|
|
|
|
2,465
|
|
|
|
|
446
|
|
|
|
|
2,172
|
|
|
Conversion of Class B common units
|
|
|
|
88,892
|
|
|
|
|
97,837
|
|
|
|
|
91,875
|
|
|
|
|
102,057
|
|
|
Weighted average fully distributed shares outstanding - diluted
|
|
|
|
139,882
|
|
|
|
|
145,018
|
|
|
|
|
141,372
|
|
|
|
|
145,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP EPS to Non-GAAP Adjusted Fully
Distributed EPS:
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per share
|
|
|
$
|
(1.58
|
)
|
|
|
$
|
6.71
|
|
|
|
$
|
6.59
|
|
|
|
$
|
17.34
|
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
|
1.98
|
|
|
|
|
(6.36
|
)
|
|
|
|
(5.04
|
)
|
|
|
|
(16.59
|
)
|
|
Impact of additions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
1.03
|
|
|
|
|
1.25
|
|
|
|
|
4.74
|
|
|
|
|
3.72
|
|
|
Income tax expense
|
|
|
|
0.13
|
|
|
|
|
0.21
|
|
|
|
|
2.75
|
|
|
|
|
1.00
|
|
|
Amortization of purchased intangible assets
|
|
|
|
0.28
|
|
|
|
|
0.20
|
|
|
|
|
0.70
|
|
|
|
|
0.58
|
|
|
Stock-based compensation
|
|
|
|
0.14
|
|
|
|
|
0.26
|
|
|
|
|
0.40
|
|
|
|
|
0.90
|
|
|
Acquisition related expenses
|
|
|
|
0.09
|
|
|
|
|
0.06
|
|
|
|
|
0.23
|
|
|
|
|
0.28
|
|
|
Strategic and financial restructuring expenses
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
0.01
|
|
|
Adjustment to tax receivable agreement liability
|
|
|
|
0.05
|
|
|
|
|
-
|
|
|
|
|
(0.06
|
)
|
|
|
|
(0.12
|
)
|
|
ERP implementation expenses
|
|
|
|
-
|
|
|
|
|
0.03
|
|
|
|
|
0.04
|
|
|
|
|
0.08
|
|
|
Acquisition related adjustment - revenue
|
|
|
|
0.23
|
|
|
|
|
0.02
|
|
|
|
|
0.36
|
|
|
|
|
0.13
|
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
(4.18
|
)
|
|
|
|
-
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
0.01
|
|
|
|
|
-
|
|
|
|
|
0.05
|
|
|
|
|
-
|
|
|
Impact of corporation taxes
|
|
|
|
(0.92
|
)
|
|
|
|
(0.95
|
)
|
|
|
|
(2.57
|
)
|
|
|
|
(2.93
|
)
|
|
Impact of increased share count
|
|
|
|
(0.92
|
)
|
|
|
|
(0.99
|
)
|
|
|
|
(2.62
|
)
|
|
|
|
(3.15
|
)
|
|
Non-GAAP Adjusted Fully Distributed Earnings Per Share
|
|
|
$
|
0.52
|
|
|
|
$
|
0.44
|
|
|
|
$
|
1.39
|
|
|
|
$
|
1.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170508006255/en/
Source: Premier Inc.