CHARLOTTE, N.C.--(BUSINESS WIRE)--
Premier Inc. (NASDAQ: PINC) today reported financial results for the
fiscal 2018 third quarter ended March 31, 2018.
Q3 2018 Highlights:
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Net revenue increased 12% to $425.3 million from the same period last
year; Supply Chain Services segment revenue rose 16% to $330.7 million
and Performance Services segment revenue was unchanged at $94.6
million.
-
Net income rose 7% to $76.5 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 $1.93
compared with a loss of $1.60 the prior year.
-
Non-GAAP adjusted EBITDA* of $142.2 million increased 4% from the same
period last year.
-
Non-GAAP adjusted fully distributed net income* increased 24% to $90.6
million, representing $0.67 per diluted share, an increase of 29% over
$0.52 per diluted share from a year ago.
-
Fiscal 2018 guidance has been updated to reflect expectations of
increased consolidated net revenue, increased Supply Chain Services
revenue, a decrease in the Performance Services revenue range and
tightening of the previous ranges for consolidated non-GAAP adjusted
EBITDA and non-GAAP adjusted fully distributed earnings per share.
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On May 4, 2018, Premier’s board of directors approved the repurchase
of up to $250 million of the company’s Class A common stock during
fiscal 2019.
* 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 continuing consolidated
revenue and profitability growth, as well as strong cash flow
generation, with non-GAAP free cash flow approximating 82% of non-GAAP
adjusted EBITDA for the quarter,” said Susan DeVore, president and chief
executive officer. “Revenue growth was driven by our Supply Chain
Services segment, where our products revenue exceeded management
expectations and net administrative fees revenue performed in line with
expectations. Our Performance Services segment results reflect the
continuation of a challenging market environment in addition to
slower-than-anticipated growth in our seasonal ambulatory regulatory
reporting business.
“Looking forward to the fourth quarter, in Supply Chain Services we
continue to anticipate steady net administrative fees revenue growth and
stronger-than-previously-expected revenue growth in our products
business,” DeVore said. “In Performance Services, we believe lingering
regulatory uncertainty continues to impact health system decision making
processes and is impacting us more than previously anticipated, delaying
some buying decisions and projects across our technology and consulting
services businesses. We continue to believe Premier remains uniquely
well positioned to help our nation’s health systems reduce cost and
improve quality and safety while continuing their journey to value-based
care in this dynamically evolving healthcare environment.
“As part of our ongoing effort to deliver value to stockholders, I am
pleased to report that our board of directors has approved the
repurchase of $250 million of Class A common stock during fiscal 2019,
following our previous $200 million Class A common stock repurchase
program, which we completed in the third quarter,” DeVore said. “Going
forward, we will continue to focus on long-term stockholder value as we
consider the most appropriate approaches for use of capital to optimize
the performance of our existing businesses, explore new growth
opportunities within our evolving strategy and generate return for
stockholders.”
Results of Operations for the Third Quarter of Fiscal 2018
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Consolidated Third-Quarter Financial Highlights
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Three Months Ended March 31,
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Nine Months Ended March 31,
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(in thousands, except per share data)
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2018
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2017
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% Change
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2018
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2017
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% Change
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Net Revenue (a):
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Supply Chain Services:
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Net administrative fees
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$
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161,612
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$
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143,915
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12
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%
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$
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471,946
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$
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398,962
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18
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%
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Other services and support
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2,899
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3,116
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(7
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)%
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8,470
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5,962
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42
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%
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Services
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164,511
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147,031
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12
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%
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480,416
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404,924
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19
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%
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Products
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166,234
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138,132
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20
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%
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480,997
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386,639
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24
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%
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Total Supply Chain Services (a)
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330,745
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285,163
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16
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%
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961,413
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791,563
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21
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%
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Performance Services (a)
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94,593
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94,640
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—
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%
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265,887
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260,012
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2
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%
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Total (a)
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$
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425,338
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$
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379,803
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12
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%
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$
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1,227,300
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$
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1,051,575
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17
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%
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Net income
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$
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76,549
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$
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71,338
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7
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%
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$
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156,934
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$
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375,617
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(58
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)%
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Net income attributable to stockholders
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$
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(103,537
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)
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$
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(80,601
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)
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28
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%
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$
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514,093
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$
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389,976
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32
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%
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Adjusted net income (loss) (b)
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$
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(103,537
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)
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$
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(80,601
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)
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28
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%
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$
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(115,888
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)
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$
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314,314
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(137
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)%
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Weighted average shares outstanding:
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Basic
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53,529
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50,525
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6
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%
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53,885
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49,051
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10
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%
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Diluted
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53,529
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50,525
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6
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%
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138,254
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141,372
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(2
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)%
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Earnings (loss) per share attributable to stockholders:
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Basic
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$
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(1.93
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)
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$
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(1.60
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)
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21
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%
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$
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9.54
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$
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7.95
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20
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%
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Diluted (b)
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$
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(1.93
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)
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$
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(1.60
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)
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21
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%
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$
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(0.84
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$
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2.22
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(138
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)%
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NON-GAAP FINANCIAL MEASURES:
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Adjusted EBITDA (a) (c):
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Supply Chain Services
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$
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135,265
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$
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127,898
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6
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%
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$
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392,930
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$
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364,224
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8
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%
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Performance Services
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36,715
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36,535
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—
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%
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85,865
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87,449
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(2
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)%
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Total segment adjusted EBITDA
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171,980
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164,433
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5
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%
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478,795
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451,673
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6
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%
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Corporate
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(29,741
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(27,709
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(7
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)%
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(83,844
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)
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(82,167
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)
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(2
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)%
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Total (a)
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$
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142,239
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$
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136,724
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4
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%
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$
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394,951
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$
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369,506
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7
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%
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Adjusted fully distributed net income (c)
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$
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90,590
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$
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72,959
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24
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%
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$
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222,284
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$
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197,129
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13
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%
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Earnings per share on adjusted fully distributed net income -
diluted (a) (c)
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$
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0.67
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$
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0.52
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29
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%
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$
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1.61
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$
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1.39
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16
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%
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(a) Bolded measures correspond to company guidance.
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(b) Earnings per share attributable to stockholders excludes the
adjustment of redeemable limited partners' capital to redemption
amount and the net income attributable to non-controlling interest
in Premier LP if Class B common stock is determined to be dilutive.
Likewise, earnings per share attributable to stockholders includes
the adjustment of redeemable limited partners' capital to redemption
amount and the net income attributable to non-controlling interest
in Premier LP if Class B common stock is determined to be
antidilutive.
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(c) See attached supplemental financial information for
reconciliation of reported GAAP results to Non-GAAP results.
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For the fiscal third-quarter ended March 31, 2018, Premier generated net
revenue of $425.3 million, an increase of 12% from net revenue of $379.8
million for the same period a year ago.
Net income for the fiscal third-quarter increased 7% to $76.5 million
from $71.3 million for the same period a year ago. In accordance with
GAAP, fiscal 2018 and 2017 third-quarter net income attributable to
stockholders included non-cash adjustments of $(127.0) million and
$(100.5) 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 $103.5 million, compared with net
loss of $80.6 million for the same period a year ago. The third-quarter
net loss per diluted share of $1.93 compared with a net loss of $1.60
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 $142.2 million
increased 4% from $136.7 million for the same period the prior year. The
growth was driven by an increase in net administrative fees revenue
primarily resulting from the Innovatix and Essensa businesses, partially
offset by $5.1 million in severance costs related to the personnel
adjustments that included a reduction in force that occurred in February.
Non-GAAP adjusted fully distributed net income for the fiscal third
quarter increased to $90.6 million from $73.0 million for the same
period a year ago. Adjusted fully distributed earnings per share
increased 29% to $0.67 from $0.52 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, 2018, the Supply Chain Services segment generated net
revenue of $330.7 million, an increase of 16% from $285.2 million a year
ago. The revenue increase was driven by growth in the company’s group
purchasing organization (GPO) and products businesses. GPO net
administrative fees revenue of $161.6 million increased 12% from a year
ago, driven by contributions from the Innovatix and Essensa businesses
and further contract penetration of our existing members. Innovatix and
Essensa were acquired in December 2016, however, during the fiscal 2017
third-quarter the businesses contributed $11.6 million in net
administrative fees revenue related to cash received post-acquisition
for member purchases that occurred prior to acquisition. As a result,
these cash collections were unable to be recognized as GAAP revenue
under purchase accounting rules. Legacy year-over-year net
administrative fees revenue increased 5% in the third quarter from a
year ago, supported by improved patient utilization trends. Product
revenues of $166.2 million increased 20% from $138.1 million a year ago,
attributable to growth from both the integrated pharmacy and direct
sourcing businesses.
Supply Chain Services segment non-GAAP adjusted EBITDA of $135.3 million
for the fiscal 2018 third-quarter increased 6% from $127.9 million for
the same period a year ago. The increase primarily reflects net
administrative fees revenue growth.
Performance Services
For the fiscal third-quarter
ended March 31, 2018, the Performance Services segment generated net
revenue of $94.6 million, unchanged from the same quarter last year. The
technology services business experienced growth in the areas of applied
sciences and cost management solutions. These were primarily offset by a
decrease in ambulatory regulatory reporting revenue resulting from a
larger-than-expected reduction in participation of smaller physician
groups that were exempted from reporting requirements this year.
Consulting services revenue was relatively flat when compared to the
same period a year ago, due to lower-than-expected revenue based partly
on timing of revenue recognition related to performance-based
engagements and to delayed health system decision making, which
management believes is related to continuing regulatory uncertainty
impacting the marketplace.
Performance Services segment non-GAAP adjusted EBITDA of $36.7 million
for the fiscal 2018 third-quarter increased slightly from $36.5 million
for the same quarter last year, reflecting the impact of severance costs
related to the personnel adjustments that included a reduction in force
that occurred in February.
Results of Operations for the Nine Months Ended March 31, 2018
For the nine months ended March 31, 2018, Premier generated net revenue
of $1.23 billion, a 17% increase from net revenue of $1.05 billion for
the same period a year ago.
Net income for the nine-month period totaled $156.9 million, compared
with $375.6 million for the same period a year ago. Fiscal 2018 and 2017
nine-month net income attributable to stockholders required non-cash
adjustments of $511.3 million and $296.6 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,
and after a one-time re-measurement of deferred taxes resulting from the
Tax Cuts and Jobs Act, which negatively impacted net income, the company
reported a net loss attributable to stockholders of $0.84 per diluted
share, compared with a net income attributable to stockholders of $2.22
per diluted share a year ago. (See income statement in the tables
section of this press release.)
For the nine months ended March 31, 2018, non-GAAP adjusted EBITDA of
$395.0 million increased 7% from $369.5 million for the same period last
year. Non-GAAP adjusted fully distributed net income for the nine months
rose 13% to $222.3 million from $197.1 million a year ago, representing
$1.61 per diluted share, a 16% increase from $1.39.
Supply Chain Services segment net revenue for the nine months ended
March 31, 2018 increased 21% to $961.4 million from $791.6 million a
year earlier. Supply Chain Services segment adjusted EBITDA increased 8%
to $392.9 million from $364.2 million for the prior year.
Performance Services segment net revenue for the nine months ended March
31, 2018 increased 2% to $265.9 million from $260.0 million a year
earlier, while segment adjusted EBITDA decreased 2% to $85.9 million
from $87.4 million.
Cash Flows and Liquidity
Cash provided by operating activities was $369.7 million for the
nine-month period ended March 31, 2018, compared with $274.2 million for
the same period last year. The increase in cash flow from operations
primarily results from the increase in net administrative fees revenue
and decreased working capital needs. At March 31, 2018, the company’s
cash and cash equivalents totaled $149.4 million, compared with $156.7
million at June 30, 2017. At March 31, 2018, the company had an
outstanding balance of $200.0 million on its five-year $750.0 million
revolving credit facility.
As of March 31, 2018, the company had completed the $200.0 million Class
A common stock repurchase plan announced on Oct. 31, 2017, which
authorized shares to be repurchased through June 30, 2018. This resulted
in the aggregate repurchase of approximately 6.4 million shares of Class
A common stock at an average price of $31.16 per share. The stock
repurchase plan is expected to impact non-GAAP adjusted fully
distributed earnings per share by approximately $0.05 per share for the
full fiscal year.
Non-GAAP free cash flow for the nine months ended March 31, 2018 was
$238.4 million compared with $155.0 million for the same period a year
ago. The increase was primarily driven by the same factors driving the
growth in cash flow from operations. (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 2018 Outlook and Guidance
Based on results for the nine months ended March 31, 2018 and
management’s current expectations for the remainder of fiscal 2018, and
the realization of previously disclosed underlying assumptions, the
company has narrowed and adjusted guidance as follows.
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The company is raising its consolidated revenue range to $1.612
billion-to-$1.649 billion, with the anticipated increase in Supply
Chain Services revenue expected to offset the downward revision in
Performance Services revenue.
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The guidance range for Supply Chain Services revenue has been
increased to $1.259 billion-to-$1.289 billion, driven by raised
expectations of 18% to 22% growth in products revenue, and reaffirmed
expectations of 13% to 17% growth in net administrative fees revenue,
comprised of mid-single digit growth in the company’s legacy GPO
business augmented by contributions from Innovatix and Essensa.
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The Performance Services revenue guidance range has been reduced to
$353.0 million-to-$360.0 million, due to lack of growth in the
ambulatory regulatory reporting business in the fiscal-third quarter,
and the ongoing slow-growth environment and regulatory uncertainty
impacting the current fiscal year. The new range projects expected
year-over-year growth of 0% to 2%.
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The Non-GAAP adjusted EBITDA range has been narrowed to a range of
$532.0 million to $537.0 million, reflecting projected year-over-year
growth of 6% to 7%.
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The guidance range for non-GAAP adjusted fully distributed earnings
per share has been narrowed to a range of $2.24 to $2.28, indicating
year-over-year growth expectations of 19% to 21%.
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Fiscal 2018 Financial Guidance *
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Premier, Inc. adjusts full-year fiscal 2018 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 2018
|
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% YoY Increase
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FY 2018
|
Net Revenue:
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Supply Chain Services segment
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$1,259.0 - $1,289.0
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14% - 17%
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$1,200.0 - $1,266.0
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Performance Services segment
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$353.0 - $360.0
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0% - 2%
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$364.0 - $382.0
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Total Net Revenue
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$1,612.0 - $1,649.0
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11% - 13%
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$1,564.0 - $1,648.0
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Non-GAAP adjusted EBITDA
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$532.0 - $537.0
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6% - 7%
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$532.0 - $557.0
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Non-GAAP adjusted fully distributed EPS
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$2.24 - $2.28
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19% - 21%
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$2.24 - $2.37
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* 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 due to 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 number of shares
of Class B stock outstanding and change in 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, and the company has the discretion to settle any
exchanged shares for Class A common stock, cash, or a combination
thereof, neither of which can be predicted, controlled or reasonably
estimated at this time.
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Fiscal 2019 Stock Repurchase Program Authorization
On May 4, 2018, the company’s board of directors approved the repurchase
of up to $250 million of the company’s Class A common stock during
fiscal 2019 through open market purchases or privately negotiated
transactions. In order to initiate the repurchase program, Premier
expects to execute the necessary agreements and documentation with one
or more financial institutions during the next open trading window under
the company’s insider trading policy, scheduled to occur shortly after
the fiscal 2018 third-quarter earnings call on May 7, 2018. There can be
no assurance as to when or whether the repurchase program will be
ultimately initiated or regarding number of shares of Class A common
stock, if any, purchased under the program. The company will provide
additional details regarding the repurchase program, if adopted and
initiated, in future filings with the SEC.
Conference Call
Premier management will host a conference call and live audio webcast on
Monday, May 7, 2018, 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: 3477807.
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 for at least 90
days following the webcast.
About Premier Inc.
Premier Inc. (NASDAQ: PINC) is a leading healthcare improvement company,
uniting an alliance of approximately 3,900 U.S. hospitals and health
systems and approximately 150,000 other providers and organizations to
transform healthcare. With integrated data and analytics,
collaboratives, supply chain solutions, and consulting and other
services, Premier enables better care and outcomes at a lower cost.
Premier 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
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 and adjusted fully
distributed earnings per share eliminate 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 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. We define adjusted
fully distributed earnings per share as adjusted fully distributed net
income divided by diluted weighted average shares. These measures assist
our board of directors, management and investors in comparing our net
income and earnings per share on a consistent basis from period to
period because these measures remove non-cash and non-recurring items,
and eliminate the variability of non-controlling interest that results
from member owner exchanges of Class B common units into shares of Class
A common stock.
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. Free cash flow does
not represent discretionary cash available for spending as it excludes
certain contractual obligations such as debt repayments. 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.
Readers are urged to review the reconciliation of these non-GAAP
financial measures included at the end of this release. To properly and
prudently evaluate our business, readers are encouraged to review the
financial tables included at the end of this release. Readers should not
rely on any single financial measure to evaluate the company’s business.
In addition, the non-GAAP financial measures used in this release are
susceptible to varying calculations and may differ from, and may
therefore not be comparable to, similarly titled measures used by other
companies.
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,
growth trends and market uncertainty in our Supply Chain and Performance
Services business segments and their respective business units, the
impact and length of the lower utilization and patient volume trends and
regulatory uncertainty and our ability to manage through these issues,
expected financial contributions from our acquired businesses, the
statements related to fiscal 2018 outlook and guidance and the
assumptions underlying such guidance, and Premier’s plans with respect
to the repurchase program, including the possibility that the repurchase
program is not adopted, the expected size of the repurchase program, or
the possible suspension of or discontinuance of the repurchase program
once adopted 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, 2017, as well as the
Form 10-Q for the quarter ended March 31, 2018, 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,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net revenue:
|
|
|
|
|
|
|
|
|
Net administrative fees
|
|
$
|
161,612
|
|
|
$
|
143,915
|
|
|
$
|
471,946
|
|
|
$
|
398,962
|
|
Other services and support
|
|
|
97,492
|
|
|
|
97,756
|
|
|
|
274,357
|
|
|
|
265,974
|
|
Services
|
|
|
259,104
|
|
|
|
241,671
|
|
|
|
746,303
|
|
|
|
664,936
|
|
Products
|
|
|
166,234
|
|
|
|
138,132
|
|
|
|
480,997
|
|
|
|
386,639
|
|
Net revenue
|
|
|
425,338
|
|
|
|
379,803
|
|
|
|
1,227,300
|
|
|
|
1,051,575
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Services
|
|
|
47,037
|
|
|
|
47,319
|
|
|
|
141,228
|
|
|
|
134,865
|
|
Products
|
|
|
156,511
|
|
|
|
129,929
|
|
|
|
454,222
|
|
|
|
356,900
|
|
Cost of revenue
|
|
|
203,548
|
|
|
|
177,248
|
|
|
|
595,450
|
|
|
|
491,765
|
|
Gross profit
|
|
|
221,790
|
|
|
|
202,555
|
|
|
|
631,850
|
|
|
|
559,810
|
|
Other operating income:
|
|
|
|
|
|
|
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
-
|
|
|
|
-
|
|
|
|
177,174
|
|
|
|
5,722
|
|
Other operating income
|
|
|
-
|
|
|
|
-
|
|
|
|
177,174
|
|
|
|
5,722
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
109,007
|
|
|
|
108,668
|
|
|
|
331,948
|
|
|
|
302,555
|
|
Research and development
|
|
|
292
|
|
|
|
755
|
|
|
|
1,105
|
|
|
|
2,328
|
|
Amortization of purchased intangible assets
|
|
|
13,881
|
|
|
|
14,080
|
|
|
|
41,597
|
|
|
|
34,440
|
|
Operating expenses
|
|
|
123,180
|
|
|
|
123,503
|
|
|
|
374,650
|
|
|
|
339,323
|
|
Operating income
|
|
|
98,610
|
|
|
|
79,052
|
|
|
|
434,374
|
|
|
|
226,209
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
204,833
|
|
Equity in net income (loss) of unconsolidated affiliates
|
|
|
(4,939
|
)
|
|
|
83
|
|
|
|
570
|
|
|
|
14,789
|
|
Interest and investment loss, net
|
|
|
(1,236
|
)
|
|
|
(2,017
|
)
|
|
|
(4,239
|
)
|
|
|
(3,026
|
)
|
Loss on disposal of long-lived assets
|
|
|
(5
|
)
|
|
|
(725
|
)
|
|
|
(1,725
|
)
|
|
|
(2,243
|
)
|
Other income (expense)
|
|
|
(2,593
|
)
|
|
|
2,260
|
|
|
|
(14,486
|
)
|
|
|
3,135
|
|
Other income (expense), net
|
|
|
(8,773
|
)
|
|
|
(399
|
)
|
|
|
(19,880
|
)
|
|
|
217,488
|
|
Income before income taxes
|
|
|
89,837
|
|
|
|
78,653
|
|
|
|
414,494
|
|
|
|
443,697
|
|
Income tax expense
|
|
|
13,288
|
|
|
|
7,315
|
|
|
|
257,560
|
|
|
|
68,080
|
|
Net income
|
|
|
76,549
|
|
|
|
71,338
|
|
|
|
156,934
|
|
|
|
375,617
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
(53,047
|
)
|
|
|
(51,433
|
)
|
|
|
(154,142
|
)
|
|
|
(282,207
|
)
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
(127,039
|
)
|
|
|
(100,506
|
)
|
|
|
511,301
|
|
|
|
296,566
|
|
Net income (loss) attributable to stockholders
|
|
$
|
(103,537
|
)
|
|
$
|
(80,601
|
)
|
|
$
|
514,093
|
|
|
$
|
389,976
|
|
|
|
|
|
|
|
|
|
|
Calculation of GAAP Earnings (Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
$
|
(103,537
|
)
|
|
$
|
(80,601
|
)
|
|
$
|
514,093
|
|
|
$
|
389,976
|
|
|
|
|
|
|
|
|
|
|
Numerator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
$
|
(103,537
|
)
|
|
$
|
(80,601
|
)
|
|
$
|
514,093
|
|
|
$
|
389,976
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
-
|
|
|
|
-
|
|
|
|
(511,301
|
)
|
|
|
(296,566
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
-
|
|
|
|
-
|
|
|
|
154,142
|
|
|
|
282,207
|
|
Net income (loss)
|
|
|
(103,537
|
)
|
|
|
(80,601
|
)
|
|
|
156,934
|
|
|
|
375,617
|
|
Tax effect on Premier, Inc. net income
|
|
|
-
|
|
|
|
-
|
|
|
|
(272,822
|
)
|
|
|
(61,303
|
)
|
Adjusted net income (loss)
|
|
$
|
(103,537
|
)
|
|
$
|
(80,601
|
)
|
|
$
|
(115,888
|
)
|
|
$
|
314,314
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
53,529
|
|
|
|
50,525
|
|
|
|
53,885
|
|
|
|
49,051
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
53,529
|
|
|
|
50,525
|
|
|
|
53,885
|
|
|
|
49,051
|
|
Effect of dilutive stock based awards
|
|
|
-
|
|
|
|
-
|
|
|
|
551
|
|
|
|
446
|
|
Class B shares outstanding
|
|
|
-
|
|
|
|
-
|
|
|
|
83,818
|
|
|
|
91,875
|
|
Weighted average shares and assumed conversions
|
|
|
53,529
|
|
|
|
50,525
|
|
|
|
138,254
|
|
|
|
141,372
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
(1.93
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
9.54
|
|
|
$
|
7.95
|
|
Diluted earnings (loss) per share
|
|
$
|
(1.93
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
(0.84
|
)
|
|
$
|
2.22
|
|
|
Condensed Consolidated Balance Sheets
|
(Unaudited)
|
(In thousands, except share data)
|
|
|
|
|
|
|
|
March 31, 2018
|
|
June 30, 2017
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
149,410
|
|
|
$
|
156,735
|
|
Accounts receivable (net of $2,149 and $1,812 allowance for doubtful
accounts, respectively)
|
|
|
174,092
|
|
|
|
159,745
|
|
Inventory
|
|
|
57,230
|
|
|
|
50,426
|
|
Prepaid expenses and other current assets
|
|
|
24,374
|
|
|
|
35,164
|
|
Due from related parties
|
|
|
491
|
|
|
|
6,742
|
|
Total current assets
|
|
|
405,597
|
|
|
|
408,812
|
|
Property and equipment (net of $282,678 and $236,460 accumulated
depreciation, respectively)
|
|
|
198,853
|
|
|
|
187,365
|
|
Intangible assets (net of $139,802 and $99,198 accumulated
amortization, respectively)
|
|
|
335,948
|
|
|
|
377,962
|
|
Goodwill
|
|
|
906,545
|
|
|
|
906,545
|
|
Deferred income tax assets
|
|
|
306,738
|
|
|
|
482,484
|
|
Deferred compensation plan assets
|
|
|
43,267
|
|
|
|
41,518
|
|
Investments in unconsolidated affiliates
|
|
|
93,448
|
|
|
|
92,879
|
|
Other assets
|
|
|
4,241
|
|
|
|
10,271
|
|
Total assets
|
|
$
|
2,294,637
|
|
|
$
|
2,507,836
|
|
|
|
|
|
|
Liabilities, redeemable limited partners' capital and
stockholders' deficit
|
|
|
|
|
Accounts payable
|
|
$
|
43,708
|
|
|
$
|
42,815
|
|
Accrued expenses
|
|
|
69,094
|
|
|
|
55,857
|
|
Revenue share obligations
|
|
|
75,341
|
|
|
|
72,078
|
|
Limited partners' distribution payable
|
|
|
13,157
|
|
|
|
24,951
|
|
Accrued compensation and benefits
|
|
|
52,857
|
|
|
|
53,506
|
|
Deferred revenue
|
|
|
44,534
|
|
|
|
44,443
|
|
Current portion of tax receivable agreements
|
|
|
17,925
|
|
|
|
17,925
|
|
Current portion of long-term debt
|
|
|
200,255
|
|
|
|
227,993
|
|
Other liabilities
|
|
|
7,044
|
|
|
|
32,019
|
|
Total current liabilities
|
|
|
523,915
|
|
|
|
571,587
|
|
Long-term debt, less current portion
|
|
|
6,962
|
|
|
|
6,279
|
|
Tax receivable agreements, less current portion
|
|
|
232,783
|
|
|
|
321,796
|
|
Deferred compensation plan obligations
|
|
|
43,267
|
|
|
|
41,518
|
|
Deferred tax liabilities
|
|
|
33,787
|
|
|
|
48,227
|
|
Other liabilities
|
|
|
56,456
|
|
|
|
42,099
|
|
Total liabilities
|
|
|
897,170
|
|
|
|
1,031,506
|
|
|
|
|
|
|
Redeemable limited partners' capital
|
|
|
2,532,731
|
|
|
|
3,138,583
|
|
Stockholders' deficit:
|
|
|
|
|
Class A common stock, $0.01 par value, 500,000,000 shares
authorized; 57,352,698 shares issued and 51,940,576 shares
outstanding at March 31, 2018 and 51,943,281 shares issued and
outstanding at June 30, 2017
|
|
|
574
|
|
|
|
519
|
|
Class B common stock, $0.000001 par value, 600,000,000 shares
authorized; 80,978,267 and 87,298,888 shares issued and outstanding
at March 31, 2018 and June 30, 2017, respectively
|
|
|
-
|
|
|
|
-
|
|
Treasury stock, at cost; 5,412,122 shares
|
|
|
(170,274
|
)
|
|
|
-
|
|
Additional paid-in-capital
|
|
|
-
|
|
|
|
-
|
|
Accumulated deficit
|
|
|
(965,564
|
)
|
|
|
(1,662,772
|
)
|
Accumulated other comprehensive loss
|
|
|
-
|
|
|
|
-
|
|
Total stockholders' deficit
|
|
|
(1,135,264
|
)
|
|
|
(1,662,253
|
)
|
Total liabilities, redeemable limited partners' capital and
stockholders' deficit
|
|
$
|
2,294,637
|
|
|
$
|
2,507,836
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
Nine Months Ended March 31,
|
|
|
2018
|
|
2017
|
Operating activities
|
|
|
|
|
Net income
|
|
$
|
156,934
|
|
|
$
|
375,617
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
93,998
|
|
|
|
77,758
|
|
Equity in net income of unconsolidated affiliates
|
|
|
(570
|
)
|
|
|
(14,789
|
)
|
Deferred income taxes
|
|
|
243,550
|
|
|
|
45,961
|
|
Stock-based compensation
|
|
|
24,930
|
|
|
|
19,125
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
(177,174
|
)
|
|
|
(2,954
|
)
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
(204,833
|
)
|
Loss on disposal of long-lived assets
|
|
|
1,725
|
|
|
|
2,243
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable, prepaid expenses and other current assets
|
|
|
(3,558
|
)
|
|
|
7,037
|
|
Other assets
|
|
|
378
|
|
|
|
405
|
|
Inventories
|
|
|
(6,804
|
)
|
|
|
(14,693
|
)
|
Accounts payable, accrued expenses, and other current liabilities
|
|
|
9,690
|
|
|
|
(11,082
|
)
|
Long-term liabilities
|
|
|
1,336
|
|
|
|
(1,221
|
)
|
Loss on FFF put and call rights
|
|
|
18,674
|
|
|
|
86
|
|
Other operating activities
|
|
|
6,625
|
|
|
|
(4,449
|
)
|
Net cash provided by operating activities
|
|
|
369,734
|
|
|
|
274,211
|
|
Investing activities
|
|
|
|
|
Purchases of property and equipment
|
|
|
(65,260
|
)
|
|
|
(51,892
|
)
|
Proceeds from sale of marketable securities
|
|
|
-
|
|
|
|
48,013
|
|
Acquisition of Innovatix, LLC and Essensa Ventures, LLC, net of cash
acquired
|
|
|
-
|
|
|
|
(319,717
|
)
|
Acquisition of Acro Pharmaceuticals, net of cash acquired
|
|
|
-
|
|
|
|
(64,500
|
)
|
Investments in unconsolidated affiliates
|
|
|
-
|
|
|
|
(65,660
|
)
|
Distributions received on equity investments in unconsolidated
affiliates
|
|
|
-
|
|
|
|
6,550
|
|
Other investing activities
|
|
|
-
|
|
|
|
25
|
|
Net cash used in investing activities
|
|
|
(65,260
|
)
|
|
|
(447,181
|
)
|
Financing activities
|
|
|
|
|
Payments made on notes payable
|
|
|
(7,997
|
)
|
|
|
(3,336
|
)
|
Proceeds from credit facility
|
|
|
30,000
|
|
|
|
425,000
|
|
Payments on credit facility
|
|
|
(50,000
|
)
|
|
|
(57,500
|
)
|
Proceeds from exercise of stock options under equity incentive plan
|
|
|
3,615
|
|
|
|
3,322
|
|
Proceeds from issuance of Class A common stock under stock purchase
plan
|
|
|
1,388
|
|
|
|
1,256
|
|
Repurchase of vested restricted units for employee tax-withholding
|
|
|
(5,916
|
)
|
|
|
(17,678
|
)
|
Settlement of exchange of Class B units by member owners
|
|
|
-
|
|
|
|
(123,330
|
)
|
Distributions to limited partners of Premier LP
|
|
|
(66,098
|
)
|
|
|
(67,363
|
)
|
Repurchase of Class A common stock (held as treasury stock)
|
|
|
(200,129
|
)
|
|
|
-
|
|
Earn-out liability payment to GNYHA Holdings
|
|
|
(16,662
|
)
|
|
|
-
|
|
Net cash provided by (used in) financing activities
|
|
|
(311,799
|
)
|
|
|
160,371
|
|
Net decrease in cash and cash equivalents
|
|
|
(7,325
|
)
|
|
|
(12,599
|
)
|
Cash and cash equivalents at beginning of year
|
|
|
156,735
|
|
|
|
248,817
|
|
Cash and cash equivalents at end of period
|
|
$
|
149,410
|
|
|
$
|
236,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information
|
Reconciliation of Net Cash Provided by Operating Activities to
Non-GAAP Free Cash Flow
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended
March 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
163,219
|
|
|
$
|
135,847
|
|
|
$
|
369,734
|
|
|
$
|
274,211
|
|
Purchases of property and equipment
|
|
|
(26,638
|
)
|
|
|
(17,567
|
)
|
|
|
(65,260
|
)
|
|
|
(51,892
|
)
|
Distributions to limited partners of Premier LP
|
|
|
(20,395
|
)
|
|
|
(22,733
|
)
|
|
|
(66,098
|
)
|
|
|
(67,363
|
)
|
Non-GAAP Free Cash Flow
|
|
$
|
116,186
|
|
|
$
|
95,547
|
|
|
$
|
238,376
|
|
|
$
|
154,956
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information
|
Reconciliation of Net Income to Adjusted EBITDA
|
Reconciliation of Operating Income to Segment Adjusted EBITDA
|
Reconciliation of Net Income Attributable to Stockholders to
Non-GAAP Adjusted Fully Distributed Net Income
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
76,549
|
|
|
$
|
71,338
|
|
|
$
|
156,934
|
|
|
$
|
375,617
|
|
Interest and investment loss, net
|
|
|
1,236
|
|
|
|
2,017
|
|
|
|
4,239
|
|
|
|
3,026
|
|
Income tax expense
|
|
|
13,288
|
|
|
|
7,315
|
|
|
|
257,560
|
|
|
|
68,080
|
|
Depreciation and amortization
|
|
|
18,584
|
|
|
|
15,102
|
|
|
|
52,401
|
|
|
|
43,318
|
|
Amortization of purchased intangible assets
|
|
|
13,881
|
|
|
|
14,080
|
|
|
|
41,597
|
|
|
|
34,440
|
|
EBITDA
|
|
|
123,538
|
|
|
|
109,852
|
|
|
|
512,731
|
|
|
|
524,481
|
|
Stock-based compensation
|
|
|
7,333
|
|
|
|
7,157
|
|
|
|
25,241
|
|
|
|
19,476
|
|
Acquisition related expenses
|
|
|
1,540
|
|
|
|
4,330
|
|
|
|
6,312
|
|
|
|
11,483
|
|
Strategic and financial restructuring expenses
|
|
|
1,648
|
|
|
|
-
|
|
|
|
1,652
|
|
|
|
-
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
-
|
|
|
|
2,768
|
|
|
|
(177,174
|
)
|
|
|
(2,954
|
)
|
ERP implementation expenses
|
|
|
40
|
|
|
|
215
|
|
|
|
531
|
|
|
|
1,741
|
|
Acquisition related adjustment - revenue
|
|
|
65
|
|
|
|
11,765
|
|
|
|
257
|
|
|
|
17,729
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(204,833
|
)
|
Loss on disposal of long-lived assets
|
|
|
5
|
|
|
|
725
|
|
|
|
1,725
|
|
|
|
2,243
|
|
Loss (gain) on FFF put and call rights
|
|
|
3,067
|
|
|
|
(88
|
)
|
|
|
18,674
|
|
|
|
86
|
|
Impairment on investments
|
|
|
5,002
|
|
|
|
-
|
|
|
|
5,002
|
|
|
|
-
|
|
Other expense
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54
|
|
Adjusted EBITDA
|
|
$
|
142,239
|
|
|
$
|
136,724
|
|
|
$
|
394,951
|
|
|
$
|
369,506
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
89,837
|
|
|
$
|
78,653
|
|
|
$
|
414,494
|
|
|
$
|
443,697
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(204,833
|
)
|
Equity in net loss (income) of unconsolidated affiliates
|
|
|
4,939
|
|
|
|
(83
|
)
|
|
|
(570
|
)
|
|
|
(14,789
|
)
|
Interest and investment loss, net
|
|
|
1,236
|
|
|
|
2,017
|
|
|
|
4,239
|
|
|
|
3,026
|
|
Loss on disposal of long-lived assets
|
|
|
5
|
|
|
|
725
|
|
|
|
1,725
|
|
|
|
2,243
|
|
Other expense (income)
|
|
|
2,593
|
|
|
|
(2,260
|
)
|
|
|
14,486
|
|
|
|
(3,135
|
)
|
Operating income
|
|
|
98,610
|
|
|
|
79,052
|
|
|
|
434,374
|
|
|
|
226,209
|
|
Depreciation and amortization
|
|
|
18,584
|
|
|
|
15,102
|
|
|
|
52,401
|
|
|
|
43,318
|
|
Amortization of purchased intangible assets
|
|
|
13,881
|
|
|
|
14,080
|
|
|
|
41,597
|
|
|
|
34,440
|
|
Stock-based compensation
|
|
|
7,333
|
|
|
|
7,157
|
|
|
|
25,241
|
|
|
|
19,476
|
|
Acquisition related expenses
|
|
|
1,540
|
|
|
|
4,330
|
|
|
|
6,312
|
|
|
|
11,483
|
|
Strategic and financial restructuring expenses
|
|
|
1,648
|
|
|
|
-
|
|
|
|
1,652
|
|
|
|
-
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
-
|
|
|
|
2,768
|
|
|
|
(177,174
|
)
|
|
|
(2,954
|
)
|
ERP implementation expenses
|
|
|
40
|
|
|
|
215
|
|
|
|
531
|
|
|
|
1,741
|
|
Acquisition related adjustment - revenue
|
|
|
65
|
|
|
|
11,765
|
|
|
|
257
|
|
|
|
17,729
|
|
Equity in net income (loss) of unconsolidated affiliates
|
|
|
(4,939
|
)
|
|
|
83
|
|
|
|
570
|
|
|
|
14,789
|
|
Impairment on investments
|
|
|
5,002
|
|
|
|
-
|
|
|
|
5,002
|
|
|
|
-
|
|
Deferred compensation plan income (expense)
|
|
|
(112
|
)
|
|
|
1,675
|
|
|
|
3,004
|
|
|
|
2,778
|
|
Other income
|
|
|
587
|
|
|
|
497
|
|
|
|
1,184
|
|
|
|
497
|
|
Adjusted EBITDA
|
|
$
|
142,239
|
|
|
$
|
136,724
|
|
|
$
|
394,951
|
|
|
$
|
369,506
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Supply Chain Services
|
|
$
|
135,265
|
|
|
$
|
127,898
|
|
|
$
|
392,930
|
|
|
$
|
364,224
|
|
Performance Services
|
|
|
36,715
|
|
|
|
36,535
|
|
|
|
85,865
|
|
|
|
87,449
|
|
Corporate
|
|
|
(29,741
|
)
|
|
|
(27,709
|
)
|
|
|
(83,844
|
)
|
|
|
(82,167
|
)
|
Adjusted EBITDA
|
|
$
|
142,239
|
|
|
$
|
136,724
|
|
|
$
|
394,951
|
|
|
$
|
369,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
$
|
(103,537
|
)
|
|
$
|
(80,601
|
)
|
|
$
|
514,093
|
|
|
$
|
389,976
|
|
Adjustment of redeemable partners' capital to redemption amount
|
|
|
127,039
|
|
|
|
100,506
|
|
|
|
(511,301
|
)
|
|
|
(296,566
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
53,047
|
|
|
|
51,433
|
|
|
|
154,142
|
|
|
|
282,207
|
|
Income tax expense
|
|
|
13,288
|
|
|
|
7,315
|
|
|
|
257,560
|
|
|
|
68,080
|
|
Amortization of purchased intangible assets
|
|
|
13,881
|
|
|
|
14,080
|
|
|
|
41,597
|
|
|
|
34,440
|
|
Stock-based compensation
|
|
|
7,333
|
|
|
|
7,157
|
|
|
|
25,241
|
|
|
|
19,476
|
|
Acquisition related expenses
|
|
|
1,540
|
|
|
|
4,330
|
|
|
|
6,312
|
|
|
|
11,483
|
|
Strategic and financial restructuring expenses
|
|
|
1,648
|
|
|
|
-
|
|
|
|
1,652
|
|
|
|
-
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
-
|
|
|
|
2,768
|
|
|
|
(177,174
|
)
|
|
|
(2,954
|
)
|
ERP implementation expenses
|
|
|
40
|
|
|
|
215
|
|
|
|
531
|
|
|
|
1,741
|
|
Acquisition related adjustment - revenue
|
|
|
65
|
|
|
|
11,765
|
|
|
|
257
|
|
|
|
17,729
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(204,833
|
)
|
Loss on disposal of long-lived assets
|
|
|
5
|
|
|
|
725
|
|
|
|
1,725
|
|
|
|
2,243
|
|
Loss (gain) on FFF put and call rights
|
|
|
3,067
|
|
|
|
(88
|
)
|
|
|
18,674
|
|
|
|
86
|
|
Impairment on investments
|
|
|
5,002
|
|
|
|
-
|
|
|
|
5,002
|
|
|
|
-
|
|
Other expense
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
122,419
|
|
|
|
119,605
|
|
|
|
338,311
|
|
|
|
323,162
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
31,829
|
|
|
|
46,646
|
|
|
|
116,027
|
|
|
|
126,033
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
$
|
90,590
|
|
|
$
|
72,959
|
|
|
$
|
222,284
|
|
|
$
|
197,129
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information
|
Reconciliation of GAAP EPS to Non-GAAP EPS on Adjusted Fully
Distributed Net Income
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Nine Months Ended March 31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Net income (loss) attributable to stockholders
|
|
$
|
(103,537
|
)
|
|
$
|
(80,601
|
)
|
|
$
|
514,093
|
|
|
$
|
389,976
|
|
Adjustment of redeemable partners' capital to redemption amount
|
|
|
127,039
|
|
|
|
100,506
|
|
|
|
(511,301
|
)
|
|
|
(296,566
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
53,047
|
|
|
|
51,433
|
|
|
|
154,142
|
|
|
|
282,207
|
|
Income tax expense
|
|
|
13,288
|
|
|
|
7,315
|
|
|
|
257,560
|
|
|
|
68,080
|
|
Amortization of purchased intangible assets
|
|
|
13,881
|
|
|
|
14,080
|
|
|
|
41,597
|
|
|
|
34,440
|
|
Stock-based compensation
|
|
|
7,333
|
|
|
|
7,157
|
|
|
|
25,241
|
|
|
|
19,476
|
|
Acquisition related expenses
|
|
|
1,540
|
|
|
|
4,330
|
|
|
|
6,312
|
|
|
|
11,483
|
|
Strategic and financial restructuring expenses
|
|
|
1,648
|
|
|
|
-
|
|
|
|
1,652
|
|
|
|
-
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
-
|
|
|
|
2,768
|
|
|
|
(177,174
|
)
|
|
|
(2,954
|
)
|
ERP implementation expenses
|
|
|
40
|
|
|
|
215
|
|
|
|
531
|
|
|
|
1,741
|
|
Acquisition related adjustment - revenue
|
|
|
65
|
|
|
|
11,765
|
|
|
|
257
|
|
|
|
17,729
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(204,833
|
)
|
Loss on disposal of long-lived assets
|
|
|
5
|
|
|
|
725
|
|
|
|
1,725
|
|
|
|
2,243
|
|
Loss (gain) on FFF put and call rights
|
|
|
3,067
|
|
|
|
(88
|
)
|
|
|
18,674
|
|
|
|
86
|
|
Impairment on investments
|
|
|
5,002
|
|
|
|
-
|
|
|
|
5,002
|
|
|
|
-
|
|
Other expense
|
|
|
1
|
|
|
|
-
|
|
|
|
-
|
|
|
|
54
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
122,419
|
|
|
|
119,605
|
|
|
|
338,311
|
|
|
|
323,162
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
31,829
|
|
|
|
46,646
|
|
|
|
116,027
|
|
|
|
126,033
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
$
|
90,590
|
|
|
$
|
72,959
|
|
|
$
|
222,284
|
|
|
$
|
197,129
|
|
|
|
|
|
|
|
|
|
|
Weighted Average:
|
|
|
|
|
|
|
|
|
Common shares used for basic and diluted earnings (loss) per share
|
|
|
53,529
|
|
|
|
50,525
|
|
|
|
53,885
|
|
|
|
49,051
|
|
Potentially dilutive shares
|
|
|
547
|
|
|
|
465
|
|
|
|
551
|
|
|
|
446
|
|
Conversion of Class B common units
|
|
|
81,394
|
|
|
|
88,892
|
|
|
|
83,818
|
|
|
|
91,875
|
|
Weighted average fully distributed shares outstanding - diluted
|
|
|
135,470
|
|
|
|
139,882
|
|
|
|
138,254
|
|
|
|
141,372
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per share
|
|
$
|
(1.93
|
)
|
|
$
|
(1.60
|
)
|
|
$
|
9.54
|
|
|
$
|
7.95
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
2.37
|
|
|
|
2.00
|
|
|
|
(9.49
|
)
|
|
|
(6.05
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
0.99
|
|
|
|
1.02
|
|
|
|
2.86
|
|
|
|
5.75
|
|
Income tax expense
|
|
|
0.25
|
|
|
|
0.14
|
|
|
|
4.78
|
|
|
|
1.39
|
|
Amortization of purchased intangible assets
|
|
|
0.26
|
|
|
|
0.28
|
|
|
|
0.77
|
|
|
|
0.70
|
|
Stock-based compensation
|
|
|
0.14
|
|
|
|
0.14
|
|
|
|
0.47
|
|
|
|
0.40
|
|
Acquisition related expenses
|
|
|
0.03
|
|
|
|
0.09
|
|
|
|
0.12
|
|
|
|
0.23
|
|
Strategic and financial restructuring expenses
|
|
|
0.03
|
|
|
|
-
|
|
|
|
0.03
|
|
|
|
-
|
|
Remeasurement of tax receivable agreement liabilities
|
|
|
-
|
|
|
|
0.05
|
|
|
|
(3.29
|
)
|
|
|
(0.06
|
)
|
ERP implementation expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
0.01
|
|
|
|
0.04
|
|
Acquisition related adjustment - revenue
|
|
|
-
|
|
|
|
0.23
|
|
|
|
-
|
|
|
|
0.36
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4.18
|
)
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
0.01
|
|
|
|
0.03
|
|
|
|
0.05
|
|
Loss (gain) on FFF put and call rights
|
|
|
0.06
|
|
|
|
-
|
|
|
|
0.35
|
|
|
|
-
|
|
Impairment on investments
|
|
|
0.09
|
|
|
|
-
|
|
|
|
0.09
|
|
|
|
-
|
|
Impact of corporation taxes
|
|
|
(0.60
|
)
|
|
|
(0.92
|
)
|
|
|
(2.14
|
)
|
|
|
(2.57
|
)
|
Impact of dilutive shares
|
|
|
(1.02
|
)
|
|
|
(0.92
|
)
|
|
|
(2.52
|
)
|
|
|
(2.62
|
)
|
Non-GAAP EPS on Adjusted Fully Distributed Net Income
|
|
$
|
0.67
|
|
|
$
|
0.52
|
|
|
$
|
1.61
|
|
|
$
|
1.39
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180507006043/en/
Source: Premier Inc.