CHARLOTTE, N.C.--(BUSINESS WIRE)--
Premier Inc. (NASDAQ: PINC) today reported financial results for the
fiscal 2019 first quarter ended Sept. 30, 2018.
The company adopted new revenue recognition standard ASC 606 on July
1, 2018 using the modified retrospective approach and did not restate
prior periods. Accordingly, the year-over-year comparisons in this press
release compare fiscal 2019 first-quarter results under ASC 606 to
fiscal 2018 first-quarter results under the previous revenue recognition
standard ASC 605. A reconciliation of fiscal 2019 first-quarter results
from ASC 606 to ASC 605 is provided in the tables included in this press
release.
Q1 2019 Highlights:
-
GAAP net revenue increased to $401.5 million from $390.6 million a
year ago; Supply Chain Services segment revenue of $315.8 million
increased from $305.8 million and Performance Services segment revenue
of $85.7 million increased from $84.8 million.
-
GAAP net income of $82.0 million increased from $60.6 million and
diluted loss per share totaled $12.80, compared with net income of
$0.30 per diluted share a year ago.
-
Non-GAAP adjusted EBITDA* increased to $138.6 million from $119.2
million a year ago.
-
Non-GAAP adjusted fully distributed net income* increased to $86.9
million, representing $0.65 per diluted share, compared with $61.7
million, or $0.44 per diluted share a year ago.
-
Premier is adjusting its full fiscal-year 2019 financial guidance
ranges to reflect the impact of the new revenue recognition standard
ASC 606.
* Descriptions of adjusted EBITDA, adjusted fully distributed net
income and other non-GAAP financial measures are provided in “Use and
Definition of Non-GAAP Measures,” and reconciliations are provided in
the tables at the end of this release.
“Premier delivered a successful fiscal first quarter, exceeding
management’s revenue and profit growth expectations for our individual
segments and for the company as a whole under the new revenue
recognition standard,” said Susan DeVore, president and chief executive
officer. “We delivered steady revenue growth in our Supply Chain
Services and Performance Services segments, driven by our group
purchasing, consulting and technology businesses.
“Our financial outlook for the year remains intact,” DeVore said. “We
continue to view fiscal 2019 as a year of steady growth and are
adjusting our previously issued guidance solely to reflect the impact of
our adoption of the new revenue recognition standard.
“We believe Premier remains uniquely well-positioned in this evolving
environment as we continue to build and expand our comprehensive
total-value proposition aligned with the growing needs of our healthcare
providers,” DeVore continued. “Our strong balance sheet and cash flow
allow us to continue to execute our strategies as we strive to deliver
lasting value for our stockholders.”
Results of Operations for the First Quarter of Fiscal 2019
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Consolidated First-Quarter Financial Highlights
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Three Months Ended September 30,
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(in thousands, except per share data)
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2018
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2017
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New revenue
standard
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Previous revenue
standard
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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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162,000
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$
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150,991
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Other services and support
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2,344
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2,149
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Services
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164,344
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153,140
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Products
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151,470
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152,662
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Total Supply Chain Services
(a)
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315,814
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305,802
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Performance Services
(a)
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85,732
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84,762
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Total
(a)
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$
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401,546
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$
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390,564
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Net income
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$
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81,973
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$
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60,616
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Net income (loss) attributable to stockholders
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$
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(681,333
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)
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$
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336,430
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Adjusted net income (loss) (b) |
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$
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(681,333
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)
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$
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42,460
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Weighted average shares outstanding:
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Basic
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53,221
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52,909
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Diluted
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53,221
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140,046
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Earnings (loss) per share attributable to stockholders:
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Basic
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$
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(12.80
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)
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$
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6.36
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Diluted (b) |
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$
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(12.80
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)
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$
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0.30
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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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135,403
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$
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125,620
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Performance Services
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30,575
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21,221
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Total segment adjusted EBITDA
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165,978
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146,841
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Corporate
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(27,357
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)
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(27,670
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)
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Total
(a)
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$
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138,621
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$
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119,171
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Adjusted fully distributed net income (c) |
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$
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86,895
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$
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61,713
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Earnings per share on adjusted fully distributed net income -
diluted
(a) (c)
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$
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0.65
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$
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0.44
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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. The company has
corrected prior period information within the current period
financial statements related to a specific component used in
calculating the tax effect on Premier Inc. net income for purposes
of diluted earnings (loss) per share. Diluted earnings (loss) per
share for the first quarter of fiscal 2018 was previously stated
at $0.36 per share and has been corrected to $0.30 per share. The
company believes the correction is immaterial and the amount had
no impact on the company’s overall financial condition, results of
operations or cash flows.
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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 first quarter ended Sept. 30, 2018, Premier generated
GAAP net revenue of $401.5 million, an increase of $10.9 million from
net revenue of $390.6 million for the same period a year ago.
GAAP net income for the fiscal first quarter was $82.0 million, compared
with $60.6 million a year ago. In accordance with GAAP, fiscal 2019 and
2018 first-quarter net income attributable to stockholders included
non-cash adjustments of $(708.2) million and $320.4 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 outstanding 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 $681.3 million, compared with net income
of $336.4 million for the same period a year ago. The first-quarter net
loss of $12.80 per diluted share compared with net income of $0.30 per
diluted share for the same period a year ago. See “Calculation of
GAAP Earnings per Share” in the income statement section of this press
release.
Fiscal first-quarter non-GAAP adjusted EBITDA increased to $138.6
million from $119.2 million for the same period the prior year.
Non-GAAP adjusted fully distributed net income for the fiscal first
quarter of $86.9 million increased $25.2 million from $61.7 million for
the same period a year ago. Adjusted fully distributed earnings per
share totaled $0.65, compared with $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 first quarter
ended Sept. 30, 2018, the Supply Chain Services segment net revenue of
$315.8 million increased $10.0 million from $305.8 million a year ago.
Net administrative fees revenue of $162.0 million increased by $11.0
million, or 7%, from the prior year primarily driven by further contract
penetration of new and existing members. Net administrative fees in the
fiscal 2019 first quarter under the previous revenue recognition
standard totaled $146.8 million by comparison, reflecting the impact of
higher cash collections and revenue recoveries in the fiscal 2018 fourth
quarter as a result of an increased focus on specific timing of cash
collections under the previous revenue recognition standard.
Product revenue for the fiscal first quarter totaled $151.5 million,
compared with $152.7 million a year ago. Growth in oncology and
respiratory-related drug revenue, as well as sales growth in the direct
sourcing business, was offset by the $12.0 million impact of revenue
recognition under the new standard related primarily to the company’s
340B federal discount prescription drug program, and to a lesser extent
to the direct sourcing business. More specifically, 340B revenue, as
well as direct sourcing revenue associated with distributor fees, were
historically recognized on a gross basis under the previous revenue
recognition standard, but are now recognized on a net basis under the
new revenue recognition standard.
Supply Chain Services segment non-GAAP adjusted EBITDA was $135.4
million for the fiscal 2019 first quarter, an increase of $9.8 million
from $125.6 million for the same period a year ago. The difference was
primarily driven by growth in net administrative fees revenue and lower
selling, general and administrative expenses.
Performance Services
For the fiscal first quarter
ended Sept. 30, 2018, the Performance Services segment net revenue of
$85.7 million increased $0.9 million from $84.8 million for the same
quarter last year, primarily driven by cost management consulting
services and applied sciences, as under the new standard revenue is now
recognized proportionally to when services are provided. The growth was
partially offset by a decrease in license revenue for the company’s
safety related technology solutions under the new standard, which
shifted recognition of some licensing revenue to a point-in-time versus
ratably over-the-subscription-period under the previous revenue
standard. This resulted in some licensing revenue attributed to prior
periods, which is reflected in accumulated deficit upon adoption of the
new standard.
Performance Services segment non-GAAP adjusted EBITDA totaled $30.6
million for the fiscal 2019 first quarter, a $9.4 million increase from
$21.2 million for the same quarter last year. The increase was primarily
the result of higher revenue as well as diligent cost management and the
continuing realization of expense savings initiatives implemented in the
prior year.
Cash Flows and Liquidity
Cash provided by operating activities was $60.3 million for the fiscal
first quarter ended Sept. 30, 2018, compared with $75.0 million for the
same quarter last year. The decrease in cash flow from operations was
primarily driven by the impact of an increase in annual incentive
payments on working capital, partially offset by decreased cost of
services revenue and selling, general and administrative expenses. At
Sept. 30, 2018, the company’s cash and cash equivalents totaled $142.4
million, compared with $152.4 million at June 30, 2018. At Sept. 30,
2018, the company had an outstanding balance of $100.0 million on its
five-year $750.0 million revolving credit facility.
Non-GAAP free cash flow for the fiscal first quarter ended Sept. 30,
2018 was $1.8 million, compared with $33.4 million for the same period a
year ago. The decrease in free cash flow results from the increased
working capital needs, as well as growth in our internally developed
software initiatives, partially offset by a decrease in distributions to
limited partners. Given the company’s fiscal year end in June and
payment of certain expenses including annual incentives in the fiscal
first quarter, free cash flow is generally lower in this period than in
subsequent quarters of the fiscal year. Fiscal 2019 first-quarter free
cash flow was further impacted by an $18.0 million tax receivable
agreement payment to member owners, as timing of the payment shifted to
July in the current year from June in previous years due to a change in
the company’s federal tax filing deadline. The company defines free cash
flow as cash provided by operating activities less quarterly tax
distributions and annual TRA payments to limited partners and purchases
of property and equipment (see free cash flow reconciliation to net
cash provided by operating activities in the tables section of this
press release).
Fiscal 2019 Outlook and Guidance
Premier is adjusting its fiscal-year 2019 financial guidance ranges to
reflect the impact of the adoption of the new revenue recognition
standard ASC 606. All assumptions are consistent with guidance
introduced August 21, 2018 under the previous revenue recognition
standard, except where they have been adjusted in accordance with the
new revenue recognition standard as set forth below.
Based on the new revenue recognition standard:
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Management continues to expect low- to mid-single-digit growth in net
administrative fees revenue.
-
Products revenue growth is projected at 0% to 4%, due to a $50 million
gross-to- net revenue recognition adjustment.
-
Performance Services revenue is impacted by $16.0 million, including
approximately $11 million due to the impact of adoption of the new
standard on the safety technology business, which resulted in
licensing revenue attributed to prior periods reflected in retained
earnings upon adoption of the new standard, and approximately $5
million due to the impact on recognition of certain third-party
reseller revenue, which was historically recognized on a gross basis
and is now recognized on a net basis.
-
Non-GAAP adjusted EBITDA is impacted by $9.0 million, due to the
reduction in Performance Services revenue associated with safety
technology license offerings, which has a corresponding impact of
$0.05 on non-GAAP adjusted fully distributed earnings per share.
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The company’s consolidated non-GAAP adjusted EBITDA margin is now
expected to range from 32% to 35%, primarily as a result of the
gross-to-net revenue recognition changes.
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Fiscal 2019 Financial Guidance *
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Premier, Inc. adjusts full-year fiscal 2019 financial guidance under
ASC 606, as follows:
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(in millions, except per share data)
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ASC 606
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Impact of ASC 606
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ASC 605
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Net Revenue:
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Supply Chain Services segment
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$1,305.0 - $1,357.0
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($50.0)
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$1,355.0 - $1,407.0
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Performance Services segment
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$350.0 - $364.0
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($16.0)
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$366.0 - $380.0
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Total Net Revenue
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$1,655.0 - $1,721.0
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($66.0)
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$1,721.0 - $1,787.0
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Non-GAAP adjusted EBITDA
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$550.0 - $572.0
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($9.0)
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$559.0 - $581.0
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Non-GAAP adjusted fully distributed EPS
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$2.55 - $2.67
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($0.05)
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$2.60 - $2.72
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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:
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• 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.
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• 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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Conference Call
Premier management will host a conference call and live audio webcast on
Tuesday, Nov. 6, 2018, at 8:00 a.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: 4293948.
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 more than 4,000 U.S. hospitals and health systems
and approximately 165,000 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 Definition of Non-GAAP 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.
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 (or
loss) of unconsolidated affiliates. For all Non-GAAP financial measures,
we consider non-recurring items to be income or expenses and 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. Non-operating
items include gains or losses on the disposal of assets and interest and
investment income or expense.
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.
To properly and prudently evaluate our business, readers are urged to
review the reconciliation of these non-GAAP financial measures, as well
as the other 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.
Further information on Premier’s use of non-GAAP financial measures is
available in the “Our Use of Non-GAAP Financial Measures” section of
Premier’s Form 10-K for the year ended June 30, 2018.
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,
the impact of the new revenue recognition standards, growth trends and
market uncertainty in our Supply Chain and Performance Services business
segments and their respective business units, the impact of regulatory
uncertainty and our ability to manage through these issues and the
evolving environment, and the statements related to fiscal 2019 outlook
and guidance and the assumptions underlying such 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, 2018 as well as the Form
10-Q for the quarter ended September 30, 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.
(Tables Follow)
|
|
|
|
Condensed Consolidated Statements of Income
|
|
|
(Unaudited)
|
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
New revenue
standard
|
|
|
|
|
Impact of new
revenue standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
Previous revenue
standard
|
|
|
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net administrative fees
|
|
|
|
|
$
|
162,000
|
|
|
|
|
|
$
|
15,184
|
|
|
|
|
|
$
|
146,816
|
|
|
|
|
|
$
|
150,991
|
|
|
|
Other services and support
|
|
|
|
|
|
88,076
|
|
|
|
|
|
|
5,379
|
|
|
|
|
|
|
82,697
|
|
|
|
|
|
|
86,911
|
|
|
|
Services
|
|
|
|
|
|
250,076
|
|
|
|
|
|
|
20,563
|
|
|
|
|
|
|
229,513
|
|
|
|
|
|
|
237,902
|
|
|
|
Products
|
|
|
|
|
|
151,470
|
|
|
|
|
|
|
(11,962
|
)
|
|
|
|
|
|
163,432
|
|
|
|
|
|
|
152,662
|
|
|
|
Net revenue
|
|
|
|
|
|
401,546
|
|
|
|
|
|
|
8,601
|
|
|
|
|
|
|
392,945
|
|
|
|
|
|
|
390,564
|
|
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Services
|
|
|
|
|
|
43,372
|
|
|
|
|
|
|
(1,933
|
)
|
|
|
|
|
|
45,305
|
|
|
|
|
|
|
46,936
|
|
|
|
Products
|
|
|
|
|
|
145,621
|
|
|
|
|
|
|
(11,371
|
)
|
|
|
|
|
|
156,992
|
|
|
|
|
|
|
144,440
|
|
|
|
Cost of revenue
|
|
|
|
|
|
188,993
|
|
|
|
|
|
|
(13,304
|
)
|
|
|
|
|
|
202,297
|
|
|
|
|
|
|
191,376
|
|
|
|
Gross profit
|
|
|
|
|
|
212,553
|
|
|
|
|
|
|
21,905
|
|
|
|
|
|
|
190,648
|
|
|
|
|
|
|
199,188
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
|
|
|
105,870
|
|
|
|
|
|
|
(1,111
|
)
|
|
|
|
|
|
106,981
|
|
|
|
|
|
|
114,321
|
|
|
|
Research and development
|
|
|
|
|
|
340
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
340
|
|
|
|
|
|
|
489
|
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
13,898
|
|
|
|
Operating expenses
|
|
|
|
|
|
119,848
|
|
|
|
|
|
|
(1,111
|
)
|
|
|
|
|
|
120,959
|
|
|
|
|
|
|
128,708
|
|
|
|
Operating income
|
|
|
|
|
|
92,705
|
|
|
|
|
|
|
23,016
|
|
|
|
|
|
|
69,689
|
|
|
|
|
|
|
70,480
|
|
|
|
Equity in net income (loss) of unconsolidated affiliates
|
|
|
|
|
|
2,690
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
2,690
|
|
|
|
|
|
|
4,252
|
|
|
|
Interest and investment loss, net
|
|
|
|
|
|
(688
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(688
|
)
|
|
|
|
|
|
(1,495
|
)
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(1,320
|
)
|
|
|
Other income (expense)
|
|
|
|
|
|
(1,941
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(1,941
|
)
|
|
|
|
|
|
1,463
|
|
|
|
Other income (expense), net
|
|
|
|
|
|
61
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
61
|
|
|
|
|
|
|
2,900
|
|
|
|
Income before income taxes
|
|
|
|
|
|
92,766
|
|
|
|
|
|
|
23,016
|
|
|
|
|
|
|
69,750
|
|
|
|
|
|
|
73,380
|
|
|
|
Income tax expense
|
|
|
|
|
|
10,793
|
|
|
|
|
|
|
1,759
|
|
|
|
|
|
|
9,034
|
|
|
|
|
|
|
12,764
|
|
|
|
Net income
|
|
|
|
|
|
81,973
|
|
|
|
|
|
|
21,257
|
|
|
|
|
|
|
60,716
|
|
|
|
|
|
|
60,616
|
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
|
|
(55,113
|
)
|
|
|
|
|
|
(13,373
|
)
|
|
|
|
|
|
(41,740
|
)
|
|
|
|
|
|
(44,610
|
)
|
|
|
Adjustment of redeemable limited partners’ capital to redemption
amount
|
|
|
|
|
|
(708,193
|
)
|
|
|
|
|
|
10,572
|
|
|
|
|
|
|
(718,765
|
)
|
|
|
|
|
|
320,424
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
|
|
$
|
(681,333
|
)
|
|
|
|
|
$
|
18,456
|
|
|
|
|
|
$
|
(699,789
|
)
|
|
|
|
|
$
|
336,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculation of GAAP Earnings (Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
|
|
$
|
(681,333
|
)
|
|
|
|
|
$
|
18,456
|
|
|
|
|
|
$
|
(699,789
|
)
|
|
|
|
|
$
|
336,430
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
|
|
$
|
(681,333
|
)
|
|
|
|
|
$
|
18,456
|
|
|
|
|
|
$
|
(699,789
|
)
|
|
|
|
|
$
|
336,430
|
|
|
|
Adjustment of redeemable limited partners’ capital to redemption
amount
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(320,424
|
)
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
44,610
|
|
|
|
Net income (loss)
|
|
|
|
|
|
(681,333
|
)
|
|
|
|
|
|
18,456
|
|
|
|
|
|
|
(699,789
|
)
|
|
|
|
|
|
60,616
|
|
|
|
Tax effect on Premier, Inc. net income
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(18,156
|
)
|
|
|
Adjusted net income (loss)
|
|
|
|
|
$
|
(681,333
|
)
|
|
|
|
|
$
|
18,456
|
|
|
|
|
|
$
|
(699,789
|
)
|
|
|
|
|
$
|
42,460
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
52,909
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
52,909
|
|
|
|
Effect of dilutive stock based awards
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
655
|
|
|
|
Class B shares outstanding
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
86,482
|
|
|
|
Weighted average shares and assumed conversions
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
140,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
|
|
|
$
|
(12.80
|
)
|
|
|
|
|
$
|
0.35
|
|
|
|
|
|
$
|
(13.15
|
)
|
|
|
|
|
$
|
6.36
|
|
|
|
Diluted earnings (loss) per share (1) |
|
|
|
|
$
|
(12.80
|
)
|
|
|
|
|
$
|
0.35
|
|
|
|
|
|
$
|
(13.15
|
)
|
|
|
|
|
$
|
0.30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The company has corrected prior period information
within the current period financial statements related to a
specific component used in calculating the tax effect on Premier
Inc. net income for purposes of diluted earnings (loss) per share.
Diluted earnings (loss) per share for the first quarter of fiscal
2018 was previously stated at $0.36 per share and has been
corrected to $0.30 per share. The company believes the correction
is immaterial and the amount had no impact on the company’s
overall financial condition, results of operations or cash flows.
|
|
|
|
|
|
|
|
|
Condensed Consolidated Balance Sheets
|
|
|
(Unaudited)
|
|
|
(In thousands, except share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2018
|
|
|
|
|
September 30, 2018
|
|
|
|
|
September 30, 2018
|
|
|
|
|
June 30, 2018
|
|
|
|
|
|
|
|
New revenue
standard
|
|
|
|
|
Impact of new
revenue standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
Previous revenue
standard
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
$
|
142,422
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
$
|
142,422
|
|
|
|
|
|
$
|
152,386
|
|
|
|
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful
accounts, respectively)
|
|
|
|
|
|
182,254
|
|
|
|
|
|
|
(8,381
|
)
|
|
|
|
|
|
190,635
|
|
|
|
|
|
|
185,874
|
|
|
|
Contract assets
|
|
|
|
|
|
202,961
|
|
|
|
|
|
|
202,961
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
Inventory
|
|
|
|
|
|
68,236
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
68,236
|
|
|
|
|
|
|
66,139
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
29,675
|
|
|
|
|
|
|
(813
|
)
|
|
|
|
|
|
30,488
|
|
|
|
|
|
|
23,325
|
|
|
|
Due from related parties
|
|
|
|
|
|
654
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
654
|
|
|
|
|
|
|
894
|
|
|
|
Total current assets
|
|
|
|
|
|
626,202
|
|
|
|
|
|
|
193,767
|
|
|
|
|
|
|
432,435
|
|
|
|
|
|
|
428,618
|
|
|
|
Property and equipment (net of $318,098 and $297,591 accumulated
depreciation, respectively)
|
|
|
|
|
|
211,248
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
211,248
|
|
|
|
|
|
|
206,693
|
|
|
|
Intangible assets (net of $167,273 and $153,635 accumulated
amortization, respectively)
|
|
|
|
|
|
308,477
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
308,477
|
|
|
|
|
|
|
322,115
|
|
|
|
Goodwill
|
|
|
|
|
|
906,545
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
906,545
|
|
|
|
|
|
|
906,545
|
|
|
|
Deferred income tax assets
|
|
|
|
|
|
301,267
|
|
|
|
|
|
|
(6,177
|
)
|
|
|
|
|
|
307,444
|
|
|
|
|
|
|
305,624
|
|
|
|
Deferred compensation plan assets
|
|
|
|
|
|
43,343
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
43,343
|
|
|
|
|
|
|
44,577
|
|
|
|
Investments in unconsolidated affiliates
|
|
|
|
|
|
96,743
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
96,743
|
|
|
|
|
|
|
94,053
|
|
|
|
Other assets
|
|
|
|
|
|
22,727
|
|
|
|
|
|
|
15,248
|
|
|
|
|
|
|
7,479
|
|
|
|
|
|
|
3,991
|
|
|
|
Total assets
|
|
|
|
|
$
|
2,516,552
|
|
|
|
|
|
$
|
202,838
|
|
|
|
|
|
$
|
2,313,714
|
|
|
|
|
|
$
|
2,312,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities, redeemable limited partners’ capital and
stockholders’ deficit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
$
|
53,452
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
$
|
53,452
|
|
|
|
|
|
$
|
60,130
|
|
|
|
Accrued expenses
|
|
|
|
|
|
87,366
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
87,366
|
|
|
|
|
|
|
64,257
|
|
|
|
Revenue share obligations
|
|
|
|
|
|
119,578
|
|
|
|
|
|
|
50,448
|
|
|
|
|
|
|
69,130
|
|
|
|
|
|
|
78,999
|
|
|
|
Limited partners’ distribution payable
|
|
|
|
|
|
14,993
|
|
|
|
|
|
|
2,801
|
|
|
|
|
|
|
12,192
|
|
|
|
|
|
|
15,465
|
|
|
|
Accrued compensation and benefits
|
|
|
|
|
|
33,146
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
33,146
|
|
|
|
|
|
|
64,112
|
|
|
|
Deferred revenue
|
|
|
|
|
|
34,259
|
|
|
|
|
|
|
(1,604
|
)
|
|
|
|
|
|
35,863
|
|
|
|
|
|
|
39,785
|
|
|
|
Current portion of tax receivable agreements
|
|
|
|
|
|
18,217
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
18,217
|
|
|
|
|
|
|
17,925
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
|
101,771
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
101,771
|
|
|
|
|
|
|
100,250
|
|
|
|
Other liabilities
|
|
|
|
|
|
7,050
|
|
|
|
|
|
|
1,233
|
|
|
|
|
|
|
5,817
|
|
|
|
|
|
|
7,959
|
|
|
|
Total current liabilities
|
|
|
|
|
|
469,832
|
|
|
|
|
|
|
52,878
|
|
|
|
|
|
|
416,954
|
|
|
|
|
|
|
448,882
|
|
|
|
Long-term debt, less current portion
|
|
|
|
|
|
5,447
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
5,447
|
|
|
|
|
|
|
6,962
|
|
|
|
Tax receivable agreements, less current portion
|
|
|
|
|
|
225,090
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
225,090
|
|
|
|
|
|
|
237,176
|
|
|
|
Deferred compensation plan obligations
|
|
|
|
|
|
43,343
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
43,343
|
|
|
|
|
|
|
44,577
|
|
|
|
Deferred tax liabilities
|
|
|
|
|
|
21,950
|
|
|
|
|
|
|
4,240
|
|
|
|
|
|
|
17,710
|
|
|
|
|
|
|
17,569
|
|
|
|
Other liabilities
|
|
|
|
|
|
68,083
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
68,083
|
|
|
|
|
|
|
63,704
|
|
|
|
Total liabilities
|
|
|
|
|
|
833,745
|
|
|
|
|
|
|
57,118
|
|
|
|
|
|
|
776,627
|
|
|
|
|
|
|
818,870
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Redeemable limited partners’ capital
|
|
|
|
|
|
3,638,624
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
3,638,624
|
|
|
|
|
|
|
2,920,410
|
|
|
|
Stockholders’ deficit:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Class A common stock, $0.01 par value, 500,000,000 shares
authorized; 58,077,840 shares issued and 53,790,369 shares
outstanding at September 30, 2018 and 57,530,733 shares issued and
52,761,177 shares outstanding at June 30, 2018
|
|
|
|
|
|
580
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
580
|
|
|
|
|
|
|
575
|
|
|
|
Class B common stock, $0.000001 par value, 600,000,000 shares
authorized; 79,519,233 and 80,335,701 shares issued and outstanding
at September 30, 2018 and June 30, 2018, respectively
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
Treasury stock, at cost; 4,287,471 and 4,769,556 shares, respectively
|
|
|
|
|
|
(136,397
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(136,397
|
)
|
|
|
|
|
|
(150,058
|
)
|
|
|
Additional paid-in-capital
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
Accumulated deficit
|
|
|
|
|
|
(1,820,000
|
)
|
|
|
|
|
|
145,720
|
|
|
|
|
|
|
(1,965,720
|
)
|
|
|
|
|
|
(1,277,581
|
)
|
|
|
Total stockholders’ deficit
|
|
|
|
|
|
(1,955,817
|
)
|
|
|
|
|
|
145,720
|
|
|
|
|
|
|
(2,101,537
|
)
|
|
|
|
|
|
(1,427,064
|
)
|
|
|
Total liabilities, redeemable limited partners’ capital and
stockholders’ deficit
|
|
|
|
|
$
|
2,516,552
|
|
|
|
|
|
$
|
202,838
|
|
|
|
|
|
$
|
2,313,714
|
|
|
|
|
|
$
|
2,312,216
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
(Unaudited)
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
New revenue
standard
|
|
|
|
|
Impact of new
revenue standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
Previous revenue
standard
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
81,973
|
|
|
|
|
|
$
|
21,257
|
|
|
|
|
|
$
|
60,716
|
|
|
|
|
|
$
|
60,616
|
|
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
34,145
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
34,145
|
|
|
|
|
|
|
30,405
|
|
|
|
Equity in net income of unconsolidated affiliates
|
|
|
|
|
|
(2,690
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(2,690
|
)
|
|
|
|
|
|
(4,252
|
)
|
|
|
Deferred income taxes
|
|
|
|
|
|
4,588
|
|
|
|
|
|
|
(290
|
)
|
|
|
|
|
|
4,878
|
|
|
|
|
|
|
8,298
|
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,195
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
6,195
|
|
|
|
|
|
|
8,815
|
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,320
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, contract assets, prepaid expenses and other
current assets
|
|
|
|
|
|
(41,427
|
)
|
|
|
|
|
|
(29,503
|
)
|
|
|
|
|
|
(11,924
|
)
|
|
|
|
|
|
(8,748
|
)
|
|
|
Other assets
|
|
|
|
|
|
(2,235
|
)
|
|
|
|
|
|
144
|
|
|
|
|
|
|
(2,379
|
)
|
|
|
|
|
|
1,379
|
|
|
|
Inventories
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(2,097
|
)
|
|
|
|
|
|
(7,178
|
)
|
|
|
Accounts payable, accrued expenses, deferred revenue and other
current liabilities
|
|
|
|
|
|
(21,776
|
)
|
|
|
|
|
|
8,392
|
|
|
|
|
|
|
(30,168
|
)
|
|
|
|
|
|
(21,933
|
)
|
|
|
Long-term liabilities
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(14
|
)
|
|
|
|
|
|
(111
|
)
|
|
|
Loss on FFF put and call rights
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
20
|
|
|
|
Other operating activities
|
|
|
|
|
|
382
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
382
|
|
|
|
|
|
|
6,402
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
|
60,327
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
60,327
|
|
|
|
|
|
|
75,033
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
|
(25,062
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(25,062
|
)
|
|
|
|
|
|
(16,646
|
)
|
|
|
Net cash used in investing activities
|
|
|
|
|
|
(25,062
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(25,062
|
)
|
|
|
|
|
|
(16,646
|
)
|
|
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments made on notes payable
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(4,974
|
)
|
|
|
Payments on credit facility
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(50,000
|
)
|
|
|
Proceeds from exercise of stock options under equity incentive plan
|
|
|
|
|
|
7,472
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
7,472
|
|
|
|
|
|
|
2,652
|
|
|
|
Repurchase of vested restricted units for employee tax-withholding
|
|
|
|
|
|
(6,948
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(6,948
|
)
|
|
|
|
|
|
(5,729
|
)
|
|
|
Distributions to limited partners of Premier LP
|
|
|
|
|
|
(15,465
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(15,465
|
)
|
|
|
|
|
|
(24,951
|
)
|
|
|
Payments to limited partners of Premier LP related to tax receivable
agreements
|
|
|
|
|
|
(17,975
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(17,975
|
)
|
|
|
|
|
|
-
|
|
|
|
Repurchase of Class A common stock (held as treasury stock)
|
|
|
|
|
|
(12,313
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(12,313
|
)
|
|
|
|
|
|
-
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
|
(45,229
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(45,229
|
)
|
|
|
|
|
|
(83,002
|
)
|
|
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(9,964
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(9,964
|
)
|
|
|
|
|
|
(24,615
|
)
|
|
|
Cash and cash equivalents at beginning of year
|
|
|
|
|
|
152,386
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
152,386
|
|
|
|
|
|
|
156,735
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
|
$
|
142,422
|
|
|
|
|
|
$
|
-
|
|
|
|
|
|
$
|
142,422
|
|
|
|
|
|
$
|
132,120
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information
|
|
|
Reconciliation of Net Cash Provided by Operating Activities to
Non-GAAP Free Cash Flow
|
|
|
(Unaudited)
|
|
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
$
|
60,327
|
|
|
|
|
|
$
|
75,033
|
|
|
|
Purchases of property and equipment
|
|
|
|
|
|
(25,062
|
)
|
|
|
|
|
|
(16,646
|
)
|
|
|
Distributions to limited partners of Premier LP
|
|
|
|
|
|
(15,465
|
)
|
|
|
|
|
|
(24,951
|
)
|
|
|
Payments to limited partners under tax receivable agreements *
|
|
|
|
|
|
(17,975
|
)
|
|
|
|
|
|
—
|
|
|
|
Non-GAAP Free Cash Flow
|
|
|
|
|
$
|
1,825
|
|
|
|
|
|
$
|
33,436
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The timing of the annual tax receivable agreement payments has
shifted to July from June due to the change in the company’s
federal tax filing deadline. As a result, Premier did not make a
tax receivable agreement payment in fiscal 2018, but made the
payment in July and will make future annual payments in July.
|
|
|
|
|
|
|
|
|
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 September 30,
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
New revenue
standard
|
|
|
|
|
Impact of new
revenue standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
|
$
|
81,973
|
|
|
|
|
|
$
|
21,257
|
|
|
|
|
|
$
|
60,716
|
|
|
|
|
|
$
|
60,616
|
|
|
|
Interest and investment loss, net
|
|
|
|
|
|
688
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
688
|
|
|
|
|
|
|
1,495
|
|
|
|
Income tax expense
|
|
|
|
|
|
10,793
|
|
|
|
|
|
|
1,759
|
|
|
|
|
|
|
9,034
|
|
|
|
|
|
|
12,764
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
20,507
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
20,507
|
|
|
|
|
|
|
16,507
|
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
13,898
|
|
|
|
EBITDA
|
|
|
|
|
|
127,599
|
|
|
|
|
|
|
23,016
|
|
|
|
|
|
|
104,583
|
|
|
|
|
|
|
105,280
|
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
8,957
|
|
|
|
Acquisition related expenses
|
|
|
|
|
|
409
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
409
|
|
|
|
|
|
|
3,099
|
|
|
|
ERP implementation expenses
|
|
|
|
|
|
326
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
326
|
|
|
|
|
|
|
335
|
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,320
|
|
|
|
Loss on FFF put and call rights
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
20
|
|
|
|
Other expense
|
|
|
|
|
|
667
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
667
|
|
|
|
|
|
|
160
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
$
|
138,621
|
|
|
|
|
|
$
|
23,016
|
|
|
|
|
|
$
|
115,605
|
|
|
|
|
|
$
|
119,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
|
|
$
|
92,766
|
|
|
|
|
|
$
|
23,016
|
|
|
|
|
|
$
|
69,750
|
|
|
|
|
|
$
|
73,380
|
|
|
|
Equity in net loss (income) of unconsolidated affiliates
|
|
|
|
|
|
(2,690
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(2,690
|
)
|
|
|
|
|
|
(4,252
|
)
|
|
|
Interest and investment loss, net
|
|
|
|
|
|
688
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
688
|
|
|
|
|
|
|
1,495
|
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,320
|
|
|
|
Other expense (income)
|
|
|
|
|
|
1,941
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,941
|
|
|
|
|
|
|
(1,463
|
)
|
|
|
Operating income
|
|
|
|
|
|
92,705
|
|
|
|
|
|
|
23,016
|
|
|
|
|
|
|
69,689
|
|
|
|
|
|
|
70,480
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
20,507
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
20,507
|
|
|
|
|
|
|
16,507
|
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
13,898
|
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
8,957
|
|
|
|
Acquisition related expenses
|
|
|
|
|
|
409
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
409
|
|
|
|
|
|
|
3,099
|
|
|
|
ERP implementation expenses
|
|
|
|
|
|
326
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
326
|
|
|
|
|
|
|
335
|
|
|
|
Equity in net income (loss) of unconsolidated affiliates
|
|
|
|
|
|
2,690
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
2,690
|
|
|
|
|
|
|
4,252
|
|
|
|
Deferred compensation plan income
|
|
|
|
|
|
1,336
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,336
|
|
|
|
|
|
|
1,539
|
|
|
|
Other expense
|
|
|
|
|
|
673
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
673
|
|
|
|
|
|
|
104
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
$
|
138,621
|
|
|
|
|
|
$
|
23,016
|
|
|
|
|
|
$
|
115,605
|
|
|
|
|
|
$
|
119,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supply Chain Services
|
|
|
|
|
$
|
135,403
|
|
|
|
|
|
$
|
15,599
|
|
|
|
|
|
$
|
119,804
|
|
|
|
|
|
$
|
125,620
|
|
|
|
Performance Services
|
|
|
|
|
|
30,575
|
|
|
|
|
|
|
7,417
|
|
|
|
|
|
|
23,158
|
|
|
|
|
|
|
21,221
|
|
|
|
Corporate
|
|
|
|
|
|
(27,357
|
)
|
|
|
|
|
|
-
|
|
|
|
|
|
|
(27,357
|
)
|
|
|
|
|
|
(27,670
|
)
|
|
|
Adjusted EBITDA
|
|
|
|
|
$
|
138,621
|
|
|
|
|
|
$
|
23,016
|
|
|
|
|
|
$
|
115,605
|
|
|
|
|
|
$
|
119,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
|
|
$
|
(681,333
|
)
|
|
|
|
|
$
|
18,456
|
|
|
|
|
|
$
|
(699,789
|
)
|
|
|
|
|
$
|
336,430
|
|
|
|
Adjustment of redeemable limited partners’ capital to redemption
amount
|
|
|
|
|
|
708,193
|
|
|
|
|
|
|
(10,572
|
)
|
|
|
|
|
|
718,765
|
|
|
|
|
|
|
(320,424
|
)
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
|
|
55,113
|
|
|
|
|
|
|
13,373
|
|
|
|
|
|
|
41,740
|
|
|
|
|
|
|
44,610
|
|
|
|
Income tax expense
|
|
|
|
|
|
10,793
|
|
|
|
|
|
|
1,759
|
|
|
|
|
|
|
9,034
|
|
|
|
|
|
|
12,764
|
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
13,898
|
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
8,957
|
|
|
|
Acquisition related expenses
|
|
|
|
|
|
409
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
409
|
|
|
|
|
|
|
3,099
|
|
|
|
ERP implementation expenses
|
|
|
|
|
|
326
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
326
|
|
|
|
|
|
|
335
|
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,320
|
|
|
|
Loss on FFF put and call rights
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
20
|
|
|
|
Other expense
|
|
|
|
|
|
667
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
667
|
|
|
|
|
|
|
160
|
|
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
|
|
|
117,426
|
|
|
|
|
|
|
23,016
|
|
|
|
|
|
|
94,410
|
|
|
|
|
|
|
101,169
|
|
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
|
|
|
30,531
|
|
|
|
|
|
|
5,984
|
|
|
|
|
|
|
24,547
|
|
|
|
|
|
|
39,456
|
|
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
|
|
|
$
|
86,895
|
|
|
|
|
|
$
|
17,032
|
|
|
|
|
|
$
|
69,863
|
|
|
|
|
|
$
|
61,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP EPS to Non-GAAP EPS on Adjusted Fully
Distributed Net Income
|
|
|
(Unaudited)
|
|
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
|
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2018
|
|
|
|
|
2017
|
|
|
|
|
|
|
|
New revenue
standard
|
|
|
|
|
Impact of new
revenue standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
Previous revenue
standard
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
|
|
$
|
(681,333
|
)
|
|
|
|
|
$
|
18,456
|
|
|
|
|
|
$
|
(699,789
|
)
|
|
|
|
|
$
|
336,430
|
|
|
|
Adjustment of redeemable limited partners’ capital to redemption
amount
|
|
|
|
|
|
708,193
|
|
|
|
|
|
|
(10,572
|
)
|
|
|
|
|
|
718,765
|
|
|
|
|
|
|
(320,424
|
)
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
|
|
55,113
|
|
|
|
|
|
|
13,373
|
|
|
|
|
|
|
41,740
|
|
|
|
|
|
|
44,610
|
|
|
|
Income tax expense
|
|
|
|
|
|
10,793
|
|
|
|
|
|
|
1,759
|
|
|
|
|
|
|
9,034
|
|
|
|
|
|
|
12,764
|
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
13,638
|
|
|
|
|
|
|
13,898
|
|
|
|
Stock-based compensation
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
6,337
|
|
|
|
|
|
|
8,957
|
|
|
|
Acquisition related expenses
|
|
|
|
|
|
409
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
409
|
|
|
|
|
|
|
3,099
|
|
|
|
ERP implementation expenses
|
|
|
|
|
|
326
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
326
|
|
|
|
|
|
|
335
|
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,320
|
|
|
|
Loss on FFF put and call rights
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
3,283
|
|
|
|
|
|
|
20
|
|
|
|
Other expense
|
|
|
|
|
|
667
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
667
|
|
|
|
|
|
|
160
|
|
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
|
|
|
117,426
|
|
|
|
|
|
|
23,016
|
|
|
|
|
|
|
94,410
|
|
|
|
|
|
|
101,169
|
|
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
|
|
|
30,531
|
|
|
|
|
|
|
5,984
|
|
|
|
|
|
|
24,547
|
|
|
|
|
|
|
39,456
|
|
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
|
|
|
$
|
86,895
|
|
|
|
|
|
$
|
17,032
|
|
|
|
|
|
$
|
69,863
|
|
|
|
|
|
$
|
61,713
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common shares used for basic and diluted earnings (loss) per share
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
53,221
|
|
|
|
|
|
|
52,909
|
|
|
|
Potentially dilutive shares
|
|
|
|
|
|
1,067
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
1,067
|
|
|
|
|
|
|
655
|
|
|
|
Conversion of Class B common units
|
|
|
|
|
|
79,794
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
79,794
|
|
|
|
|
|
|
86,482
|
|
|
|
Weighted average fully distributed shares outstanding - diluted
|
|
|
|
|
|
134,082
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
134,082
|
|
|
|
|
|
|
140,046
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per share
|
|
|
|
|
$
|
(12.80
|
)
|
|
|
|
|
$
|
0.35
|
|
|
|
|
|
$
|
(13.15
|
)
|
|
|
|
|
$
|
6.36
|
|
|
|
Adjustment of redeemable limited partners’ capital to redemption
amount
|
|
|
|
|
|
13.31
|
|
|
|
|
|
|
(0.20
|
)
|
|
|
|
|
|
13.51
|
|
|
|
|
|
|
(6.05
|
)
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
|
|
|
1.04
|
|
|
|
|
|
|
0.26
|
|
|
|
|
|
|
0.78
|
|
|
|
|
|
|
0.84
|
|
|
|
Income tax expense
|
|
|
|
|
|
0.20
|
|
|
|
|
|
|
0.03
|
|
|
|
|
|
|
0.17
|
|
|
|
|
|
|
0.24
|
|
|
|
Amortization of purchased intangible assets
|
|
|
|
|
|
0.26
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.26
|
|
|
|
|
|
|
0.26
|
|
|
|
Stock-based compensation
|
|
|
|
|
|
0.12
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.12
|
|
|
|
|
|
|
0.17
|
|
|
|
Acquisition related expenses
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
0.06
|
|
|
|
ERP implementation expenses
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
0.01
|
|
|
|
Loss on disposal of long-lived assets
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.02
|
|
|
|
Loss on FFF put and call rights
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.06
|
|
|
|
|
|
|
-
|
|
|
|
Other expense
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
0.01
|
|
|
|
|
|
|
-
|
|
|
|
Impact of corporation taxes
|
|
|
|
|
|
(0.57
|
)
|
|
|
|
|
|
(0.11
|
)
|
|
|
|
|
|
(0.46
|
)
|
|
|
|
|
|
(0.74
|
)
|
|
|
Impact of dilutive shares
|
|
|
|
|
|
(1.00
|
)
|
|
|
|
|
|
(0.20
|
)
|
|
|
|
|
|
(0.80
|
)
|
|
|
|
|
|
(0.73
|
)
|
|
|
Non-GAAP EPS on Adjusted Fully Distributed Net Income
|
|
|
|
|
$
|
0.65
|
|
|
|
|
|
$
|
0.13
|
|
|
|
|
|
$
|
0.52
|
|
|
|
|
|
$
|
0.44
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181106005273/en/
Premier Inc.
Investor Relations contact:
Jim Storey,
704-816-5958
Vice President, Investor Relations
jim_storey@premierinc.com
or
Media
contact:
Amanda Forster, 202-897-8004
Vice President, Public
Relations
amanda_forster@premierinc.com
Source: Premier Inc.