Premier Inc (PINC): 37.65 +0.43 +1.16% Volume: 982,563 February 15, 2019

Premier Inc. Reports Fiscal 2019 Second-Quarter Results

February 5, 2019

CHARLOTTE, N.C.--(BUSINESS WIRE)-- Premier Inc. (NASDAQ: PINC) today reported financial results for the fiscal 2019 second quarter ended Dec. 31, 2018.

The company adopted new revenue recognition standard ASC 606 on July 1, 2018, in conjunction with the beginning of fiscal 2019, using the modified retrospective approach and did not restate prior periods. Therefore, results of operations under the new revenue standard ASC 606 are not indicative of what results of operations were under the previous standard ASC 605. However, for informational purposes, current period results under the previous standard are included in the tables at the back of this press release.

Q2 2019 Highlights:

  • GAAP net revenue increased to $421.9 million from $411.4 million a year ago; Supply Chain Services segment revenue of $327.0 million increased from $324.9 million a year ago and Performance Services segment revenue of $94.9 million increased from $86.5 million.
  • GAAP net income of $104.8 million increased from $19.8 million and diluted net income of $0.69 per share compared with $0.06 per diluted share a year ago.
  • Non-GAAP adjusted EBITDA* increased to $142.0 million from $133.5 million a year ago.
  • Non-GAAP adjusted fully distributed net income* increased to $88.4 million, representing $0.66 per diluted share, compared with $70.0 million, or $0.50 per diluted share a year ago.
  • Management reaffirms full-year fiscal 2019 guidance ranges and underlying assumptions.

* Descriptions of non-GAAP financial measures are provided in “Use and Definition of Non-GAAP Financial Measures,” and reconciliations are provided in the tables at the end of this release.

“Premier delivered another successful quarter this fiscal year, characterized by steady revenue and earnings growth across our business segments and for the company as a whole,” said Susan DeVore, president and chief executive officer. “We finished the quarter with continued strong liquidity, as year-over-year non-GAAP free cash flow increased 29 percent to $114.8 million. We used our strong balance sheet and cash flow to grow our capabilities with the acquisition of Stanson Health Inc., and to return cash to stockholders through our ongoing $250.0 million stock repurchase program.

“Our financial outlook remains consistent with the full-year guidance ranges we discussed last quarter and we are reaffirming these guidance ranges today,” DeVore said. “We plan to continue to move forward as a leader of our industry’s transformation to value-based care, expanding and integrating our capabilities and working closely with our member providers to help ensure ongoing success in this rapidly evolving marketplace.”

 

Results of Operations for the Second Quarter of Fiscal 2019

Consolidated Second-Quarter and Full Year Financial Highlights    
Three Months Ended December 31,   Six Months Ended December 31,
(in thousands, except per share data) 2018   2017     2018   2017  

New revenue

standard

 

Previous revenue

standard

  % Change  

New revenue

standard

 

Previous revenue

standard

  % Change
Net Revenue (a) :
Supply Chain Services:
Net administrative fees $ 165,695 $ 159,343 4 % $ 327,695 $ 310,334 6 %
Other services and support       3,789       3,421     11 %     6,133       5,570     10 %
Services 169,484 162,764 4 % 333,828 315,904 6 %
Products       157,519       162,101     (3 )%     308,989       314,764     (2 )%
Total Supply Chain Services (a) 327,003 324,865 1 % 642,817 630,668 2 %
Performance Services (a)       94,854       86,533     10 %     180,586       171,294     5 %
Total (a)     $ 421,857     $ 411,398     3 %   $ 823,403     $ 801,962     3 %
 
Net income $ 104,811 $ 19,769 430 % $ 186,784 $ 80,385 132 %
Net income attributable to stockholders $ 693,889 $ 281,200 147 % $ 12,556 $ 617,630 (98 )%
Adjusted net income (b) $ 92,032 $ 8,447 nm $ 12,556 $ 50,907 (75 )%
Weighted average shares outstanding:
Basic 59,876 55,209 8 % 56,548 54,059 5 %
Diluted 133,672 139,237 (4 )% 57,584 139,641 (59 )%
Earnings per share attributable to stockholders:
Basic $ 11.59 $ 5.09 128 % $ 0.22 $ 11.43 (98 )%
Diluted (b)     $ 0.69     $ 0.06     nm     $ 0.22     $ 0.36     (39 )%
 

NON-GAAP FINANCIAL MEASURES:

 
Adjusted EBITDA (a) (c) :
Supply Chain Services $ 134,079 $ 132,045 2 % $ 269,482 $ 257,665 5 %
Performance Services       37,100       27,929     33 %     67,675       49,150     38 %
Total segment adjusted EBITDA 171,179 159,974 7 % 337,157 306,815 10 %
Corporate       (29,182 )     (26,432 )   10 %     (56,539 )     (54,102 )   5 %
Total (a)     $ 141,997     $ 133,542     6 %   $ 280,618     $ 252,713     11 %
Adjusted fully distributed net income (c)     $ 88,397     $ 69,982     26 %   $ 175,292     $ 131,695     33 %
Earnings per share on adjusted fully distributed net income - diluted (a) (c) $ 0.66 $ 0.50 32 % $ 1.31 $ 0.94 39 %
 

(a) Bolded measures correspond to company guidance.

 

(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 three months ended December 31, 2017 was previously stated at ($1.66) per share and has been corrected to $0.06 per share. Diluted earnings (loss) per share for the six months ended December 31, 2017 was previously stated at ($1.30) per share and has been corrected to $0.36 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.

 

(c) See attached supplemental financial information for reconciliation of reported GAAP results to Non-GAAP results.

 
 

For the fiscal second-quarter ended Dec. 31, 2018, Premier generated GAAP net revenue of $421.9 million, an increase of $10.5 million from net revenue of $411.4 million for the same period a year ago.

GAAP net income for the fiscal second quarter was $104.8 million, compared with $19.8 million a year ago. Year-ago net income was impacted by a decrease in the effective tax rate due to federal tax reform, resulting in a re-measurement of tax receivable agreement liabilities totaling $177.2 million, offset by an increase in tax expense of $221.2 million attributable to the re-measurement of deferred tax balances. This resulted in income tax expense of $231.5 million in the year-ago quarter, compared with $1.8 million in the current quarter. In accordance with GAAP, fiscal 2019 and 2018 second-quarter net income attributable to stockholders included non-cash adjustments of $651.7 million and $317.9 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 units 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 net income attributable to stockholders of $693.9 million, compared with $281.2 million for the same period a year ago. Second-quarter net income of $0.69 per diluted share compared with $0.06 for the same period a year ago. See “Calculation of GAAP Earnings per Share” in the income statement section of this press release.

Fiscal second-quarter non-GAAP adjusted EBITDA increased to $142.0 million from $133.5 million for the same period the prior year.

Non-GAAP adjusted fully distributed net income for the fiscal second quarter of $88.4 million increased $18.4 million from $70.0 million for the same period a year ago. Non-GAAP adjusted fully distributed earnings per share totaled $0.66, compared with $0.50 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 second quarter ended Dec. 31, 2018, Supply Chain Services segment net revenue of $327.0 million increased $2.1 million from $324.9 million a year ago. Net administrative fees revenue of $165.7 million increased by $6.4 million, or 4%, from the prior year primarily driven by further contract penetration of existing members and, to a lesser degree, the impact of conversion of new members. Net administrative fees in the fiscal 2019 second quarter under the previous revenue recognition standard totaled $169.8 million, an increase of 7% over a year ago, reflecting the impact of timing associated with certain cash collections between quarters.

Products revenue of $157.5 million decreased $4.6 million from $162.1 million a year ago. Growth in oncology and respiratory-related drug revenue was offset primarily by the impact of gross to net revenue recognition changes associated with the adoption of ASC 606, which negatively impacted revenue by $11.9 million, and to a lesser extent by reimbursement compression in the integrated pharmacy business.

Supply Chain Services segment non-GAAP adjusted EBITDA for the fiscal 2019 second quarter increased to $134.1 million from $132.0 million for the same period a year ago. Growth in net administrative fees revenue and decreased selling, general and administrative expenses were partially offset by reimbursement compression in the integrated pharmacy business and by increases in certain product-related costs in the direct sourcing business.

Performance Services
For the fiscal second quarter ended Dec. 31, 2018, Performance Services segment net revenue of $94.9 million increased $8.4 million from $86.5 million for the same quarter last year, driven by growth in applied sciences and analytics services as well as by growth in cost management consulting services. Under the new accounting standard, consulting services revenue is now recognized proportionally to when services are provided, and the company generally no longer is required to defer recognition until certain performance conditions are met.

Performance Services segment non-GAAP adjusted EBITDA totaled $37.1 million for the fiscal 2019 second quarter, a $9.2 million increase from $27.9 million for the same quarter last year. The increase was primarily the result of higher revenue partially offset by increases in selling, general and administrative expenses.

Results of Operations for the Six Months Ended Dec. 31, 2018
For the six months ended Dec. 31, 2018, GAAP net revenue increased to $823.4 million from net revenue of $802.0 million for the same period a year ago.

For the six-month period, GAAP net income totaled $186.8 million, compared with $80.4 million for the same period a year ago. Year-ago net income was impacted by a decrease in the effective tax rate due to federal tax reform, resulting in a re-measurement of tax receivable agreement liabilities totaling $177.2 million, offset by an increase in tax expense of $221.2 million attributable to the re-measurement of deferred tax balances. This resulted in income tax expense of $244.3 million in the year-ago quarter, compared with $12.6 million in the current quarter. Fiscal 2019 and 2018 six-month GAAP net income attributable to stockholders required non-cash adjustments of $(56.5) million and $638.3 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 primarily from changes in the number of Class B common units 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 net income attributable to stockholders of $12.6 million compared with $617.6 million a year ago. On a diluted per-share basis, net income totaled $0.22 compared with $0.36 for the same period a year ago. See “Calculation of GAAP Earnings per Share” in the income statement section of this press release.

For the six months ended Dec. 31, 2018, non-GAAP adjusted EBITDA of $280.6 million increased from $252.7 million for the same period last year. Non-GAAP adjusted fully distributed net income of $175.3 million increased from $131.7 million for the same period a year ago, while non-GAAP adjusted fully distributed earnings per share increased to $1.31 from $0.94.

Supply Chain Services segment net revenue for the first six months of fiscal 2019 increased to $642.8 million from $630.7 million a year earlier. Supply Chain Services segment adjusted EBITDA increased to $269.5 million from $257.7 million for the prior year.

Performance Services segment net revenue for the six months of fiscal 2019 increased to $180.6 million from $171.3 million a year earlier. Segment adjusted EBITDA increased to $67.7 million from $49.2 million.

Cash Flows and Liquidity

Net cash provided by operating activities was $212.3 million for the six-month period ended Dec. 31, 2018, compared with $206.5 million for the same period last year. The increase in cash flow from operations was primarily driven by increased net administrative fees and other services and support revenue and decreased cost of services revenue and selling, general and administrative expenses in the current period, partially offset by increased working capital needs. At Dec. 31, 2018, the company’s cash and cash equivalents totaled $110.6 million, compared with $152.4 million at June 30, 2018. At Dec. 31, 2018, the company had an outstanding balance of $100.0 million on its five-year, $1.0 billion revolving credit facility.

Non-GAAP free cash flow for the six-month period ended Dec. 31, 2018 was $116.6 million, compared with $122.2 million for the same period a year ago and was impacted by the $18.0 million TRA payment made to member owners in the current period. 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 expects free cash flow to exceed 50% of non-GAAP adjusted EBITDA for the full fiscal year. 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).

Through the close of trading on Dec. 31, 2018, the company repurchased approximately 2.9 million shares of Class A common stock for $109.5 million. The repurchases took place under the company’s ongoing $250.0 million stock repurchase program for fiscal 2019, and had the impact of adding approximately $0.01 to diluted per-share results for the period. The repurchase authorization may be expanded, suspended, delayed or discontinued at any time at the discretion of the Board of Directors.

Fiscal 2019 Outlook and Guidance

Based on results for the six months ended Dec. 31, 2018, management’s current expectations for the remainder of fiscal 2019 and the realization of previously disclosed underlying assumptions, the company reaffirms its full fiscal-year 2019 guidance ranges for consolidated net revenue, non-GAAP Supply Chain Services and Performance Services segment revenue, non-GAAP adjusted EBITDA and non-GAAP adjusted fully distributed earnings per share. Underlying assumptions have not changed with the exception of stock-based compensation expense, which is now estimated in a range of $29 million to $31 million.

 
Fiscal 2019 Financial Guidance *
     
Premier, Inc. reiterates full-year fiscal 2019 financial guidance under ASC 606, as follows:
 
(in millions, except per share data) ASC 606
Net Revenue:
Supply Chain Services segment $1,305.0 - $1,357.0
Performance Services segment $350.0 - $364.0  
Total Net Revenue $1,655.0 - $1,721.0
 
Non-GAAP adjusted EBITDA $550.0 - $572.0
 
Non-GAAP adjusted fully distributed EPS       $2.55 - $2.67  
 

* 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 Class B common units 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 units and corresponding Class B common stock 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 class B common units on a quarterly basis, and the company has the discretion to settle any exchanged units for Class A common stock, cash, or a combination thereof, neither of which can be predicted, controlled or reasonably estimated at this time.

 
 

Conference Call

Premier management will host a conference call and live audio webcast on Tuesday, Feb. 5, 2019, 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: 6890785. 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 units and corresponding Class B common stock 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, non-GAAP free cash flow generation, the impact of the new revenue recognition standards, share repurchases under our fiscal 2019 stock repurchase program, 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 December 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.

(Tables Follow)

 
 
 
 
 
 
Condensed Consolidated Statements of Income
(Unaudited)
(In thousands, except per share data)
                 
Three Months Ended December 31, Six Months Ended December 31,
2018 2018 2018 2017

2018

2018

2018 2017

New revenue

standard

 

Impact of new

revenue standard

 

Previous revenue

standard

 

Previous revenue

standard

 

New revenue

standard

 

Impact of new

revenue standard

 

Previous revenue

standard

 

Previous revenue

standard

Net revenue:
Net administrative fees $ 165,695 $ (4,061 ) $ 169,756 $ 159,343 $ 327,695 $ 11,123 $ 316,572 $ 310,334
Other services and support       98,643       8,278       90,365       89,953       186,719       13,657       173,062       176,864  
Services 264,338 4,217 260,121 249,296 514,414 24,780 489,634 487,198
Products       157,519       (11,914 )     169,433       162,102       308,989       (23,876 )     332,865       314,764  
Net revenue 421,857 (7,697 ) 429,554 411,398 823,403 904 822,499 801,962
Cost of revenue:

 

Services 43,189 (2,613 ) 45,802 47,255 86,561 (4,546 ) 91,107 94,191
Products       155,534       (10,927 )     166,461       153,272       301,155       (22,298 )     323,453       297,712  
Cost of revenue       198,723       (13,540 )     212,263       200,527       387,716       (26,844 )     414,560       391,903  
Gross profit 223,134 5,843 217,291 210,871 435,687 27,748 407,939 410,059
Other operating income:
Remeasurement of tax receivable agreement liabilities       -       -       -       177,174    

 

    -       -       177,174  
Other operating income:       -       -       -       177,174       -       -       -       177,174  
Operating expenses:
Selling, general and administrative 110,112 (1,270 ) 111,382 108,620 215,982 (2,381 ) 218,363 222,941
Research and development 292 - 292 324 632 - 632 813
Amortization of purchased intangible assets       13,899       -       13,899       13,817       27,537       -       27,537       27,715  
Operating expenses       124,303       (1,270 )     125,573       122,761       244,151       (2,381 )     246,532       251,469  
Operating income       98,831       7,113       91,718       265,284       191,536       30,129       161,407       335,764  
Equity in net income of unconsolidated affiliates 1,444 - 1,444 1,257 4,134 - 4,134 5,509
Interest and investment loss, net (859 ) - (859 ) (1,508 ) (1,547 ) - (1,547 ) (3,003 )
Loss on disposal of long-lived assets - - - (400 ) - - - (1,720 )
Other income (expense)       7,199       -       7,199       (13,356 )     5,258       -       5,258       (11,893 )
Other income (expense), net       7,784       -       7,784       (14,007 )     7,845       -       7,845       (11,107 )
Income before income taxes 106,615 7,113 99,502 251,277 199,381 30,129 169,252 324,657
Income tax expense (benefit)       1,804       2,158       (354 )     231,508       12,597       3,917       8,680       244,272  
Net income 104,811 4,955 99,856 19,769 186,784 26,212 160,572 80,385
Net income attributable to non-controlling interest in Premier LP (62,631 ) (3,213 ) (59,418 ) (56,485 ) (117,744 ) (16,586 ) (101,158 ) (101,095 )
Adjustment of redeemable limited partners' capital to redemption amount       651,709       2,048       649,661       317,916       (56,484 )     12,620       (69,104 )     638,340  
Net income (loss) attributable to stockholders     $ 693,889     $ 3,790     $ 690,099     $ 281,200     $ 12,556     $ 22,246     $ (9,690 )   $ 617,630  
 
Calculation of GAAP Earnings (Loss) per Share
 
Numerator for basic earnings (loss) per share:
Net income (loss) attributable to stockholders     $ 693,889     $ 3,790     $ 690,099     $ 281,200     $ 12,556     $ 22,246     $ (9,690 )   $ 617,630  
 
Numerator for diluted earnings (loss) per share:
Net income (loss) attributable to stockholders $ 693,889 $ 3,790 $ 690,099 $ 281,200 $ 12,556 $ 22,246 $ (9,690 ) $ 617,630
Adjustment of redeemable limited partners' capital to redemption amount (651,709 ) (2,048 ) (649,661 ) (317,916 ) - - - (638,340 )
Net income attributable to non-controlling interest in Premier LP       62,631       3,213       59,418       56,485       -       -       -       101,095  
Net income (loss) 104,811 4,955 99,856 19,769 12,556 22,246 (9,690 ) 80,385
Tax effect on Premier, Inc. net income       (12,779 )     (1,094 )     (11,685 )     (11,322 )     -       -       -       (29,478 )
Adjusted net income (loss)     $ 92,032     $ 3,861     $ 88,171     $ 8,447     $ 12,556     $ 22,246     $ (9,690 )   $ 50,907  
 
Denominator for basic earnings (loss) per share:
Weighted average shares       59,876       59,876       59,876       55,209       56,548       56,548       56,548       54,059  
 
Denominator for diluted earnings (loss) per share:
Weighted average shares 59,876 59,876 59,876 55,209 56,548 56,548 56,548 54,059
Effect of dilutive stock based awards 1,005 1,005 1,005 450 1,036 1,036 - 553
Class B shares outstanding       72,791       72,791       72,791       83,578       -       -       -       85,029  
Weighted average shares and assumed conversions       133,672       133,672       133,672       139,237       57,584       57,584       56,548       139,641  
 
Basic earnings (loss) per share $ 11.59 $ 0.06 $ 11.53 $ 5.09 $ 0.22 $ 0.39 $ (0.17 ) $ 11.43
Diluted earnings (loss) per share (1) $ 0.69 $ 0.03 $ 0.66 $ 0.06 $ 0.22 $ 0.39 $ (0.17 ) $ 0.36
 
(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 three months ended December 31, 2017 was previously stated at ($1.66) per share and has been corrected to $0.06 per share. Diluted earnings (loss) per share for the six months ended December 31, 2017 was previously stated at ($1.30) per share and has been corrected to $0.36 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)
                   
December 31, 2018 December 31, 2018 December 31, 2018 June 30, 2018

New revenue

standard

   

Impact of new revenue

standard

   

Previous revenue

standard

   

Previous revenue

standard

Assets
Cash and cash equivalents $ 110,584 $ - $ 110,584 $ 152,386
Accounts receivable (net of $3,187 and $1,841 allowance for doubtful accounts, respectively) 197,366 (11,696 ) 209,062 185,874
Contract assets 208,254 208,254 - -
Inventory 70,032 - 70,032 66,139
Prepaid expenses and other current assets 27,259 (2,362 ) 29,621 23,325
Due from related parties           720         -         720         894  
Total current assets 614,215 194,196 420,019 428,618
Property and equipment (net of $339,781 and $297,591 accumulated depreciation, respectively) 211,859 - 211,859 206,693
Intangible assets (net of $181,171 and $153,635 accumulated amortization, respectively) 318,199 - 318,199 322,115
Goodwill 943,281 - 943,281 906,545
Deferred income tax assets 389,632 (5,425 ) 395,057 305,624
Deferred compensation plan assets 39,752 - 39,752 44,577
Investments in unconsolidated affiliates 98,089 - 98,089 94,053
Other assets           29,824         14,884         14,940         3,991  
Total assets         $ 2,644,851       $ 203,655       $ 2,441,196       $ 2,312,216  
 
Liabilities, redeemable limited partners' capital and stockholders' deficit
Accounts payable $ 66,855 $ - $ 66,855 $ 60,130
Accrued expenses 99,480 - 99,480 64,257
Revenue share obligations 130,163 49,878 80,285 78,999
Limited partners' distribution payable 14,288 3,966 10,322 15,465
Accrued compensation and benefits 41,071 - 41,071 64,112
Deferred revenue 33,874 (6,534 ) 40,408 39,785
Current portion of tax receivable agreements 18,217 - 18,217 17,925
Current portion of long-term debt 102,302 - 102,302 100,250
Other liabilities           8,438         2,556         5,882         7,959  
Total current liabilities 514,688 49,866 464,822 448,882
Long-term debt, less current portion 5,107 - 5,107 6,962
Tax receivable agreements, less current portion 304,907 - 304,907 237,176
Deferred compensation plan obligations 39,752 - 39,752 44,577
Deferred tax liabilities 18,850 4,278 14,572 17,569
Other liabilities           58,296         -         58,296         63,704  
Total liabilities           941,600         54,144         887,456         818,870  
 
Redeemable limited partners' capital 2,593,882 - 2,593,882 2,920,410
Stockholders' deficit:
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 63,822,420 shares issued and 61,286,582 shares outstanding at December 31, 2018 and 57,530,733 shares issued and 52,761,177 shares outstanding at June 30, 2018 638 - 638 575
Class B common stock, $0.000001 par value, 600,000,000 shares authorized; 69,484,147 and 80,335,701 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively - - - -
Treasury stock, at cost; 2,535,838 and 4,769,556 shares, respectively (97,199 ) - (97,199 ) (150,058 )
Additional paid-in-capital - - - -
Accumulated deficit           (794,070 )       149,511         (943,581 )       (1,277,581 )
Total stockholders' deficit           (890,631 )       149,511         (1,040,142 )       (1,427,064 )
Total liabilities, redeemable limited partners' capital and stockholders' deficit         $ 2,644,851       $ 203,655       $ 2,441,196       $ 2,312,216  
 
 
 
 
 
 
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
                 
Six Months Ended December 31,
2018 2018 2018 2017

New revenue

standard

   

Impact of new

revenue standard

   

Previous revenue

standard

   

Previous revenue

standard

Operating activities
Net income $ 186,784 $ 26,212 $ 160,572 $ 80,385
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 69,727 - 69,727 61,532
Equity in net income of unconsolidated affiliates (4,134 ) - (4,134 ) (5,509 )
Deferred income taxes 2,643 (1,001 ) 3,644 235,648
Stock-based compensation 13,911 - 13,911 17,699
Remeasurement of tax receivable agreement liabilities - - - (177,174 )
Loss on disposal of long-lived assets - - - 1,720
(Gain) loss on FFF put and call rights (7,567 ) - (7,567 ) 15,607
Changes in operating assets and liabilities:
Accounts receivable, contract assets, prepaid expenses and other current assets (56,875 ) (29,932 ) (26,943 ) (467 )
Other assets 2,882 506 2,376 1,060
Inventories (3,893 ) - (3,893 ) (11,641 )
Accounts payable, accrued expenses, deferred revenue and other current liabilities 15,366 4,215 11,151 (20,238 )
Long-term liabilities (7,033 ) - (7,033 ) 1,287
Other operating activities         498         -         498         6,606  
Net cash provided by operating activities         212,309         -         212,309         206,515  
Investing activities
Purchases of property and equipment (47,289 ) - (47,289 ) (38,622 )
Acquisition of Stanson Health, Inc., net of cash acquired (50,926 ) - (50,926 ) -

Investments in convertible notes

        (8,500 )       -         (8,500 )       -  
Net cash used in investing activities         (106,715 )       -         (106,715 )       (38,622 )
Financing activities
Payments made on notes payable - - - (6,858 )
Redemption of limited partner of Premier LP (256 ) - (256 ) -
Proceeds from credit facility - - - 30,000
Payments on credit facility - - - (50,000 )
Proceeds from exercise of stock options under equity incentive plan 12,123 - 12,123 2,808
Proceeds from issuance of Class A common stock under stock purchase plan 1,488 - 1,488 1,388
Repurchase of vested restricted units for employee tax-withholding (8,030 ) - (8,030 ) (5,743 )
Distributions to limited partners of Premier LP (30,458 ) - (30,458 ) (45,703 )
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) (104,288 ) - (104,288 ) (70,844 )
Earn-out liability payment to GNYHA Holdings         -         -         -         (16,662 )
Net cash used in financing activities         (147,396 )       -         (147,396 )       (161,614 )
Net (decrease) increase in cash and cash equivalents (41,802 ) - (41,802 ) 6,279
Cash and cash equivalents at beginning of year         152,386         -         152,386         156,735  
Cash and cash equivalents at end of period       $ 110,584       $ -       $ 110,584       $ 163,014  
 
 
 
 
 
 
Supplemental Financial Information
Reconciliation of Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow
(Unaudited)
(In thousands)
         
Three Months Ended

December 31,

  Six Months Ended

December 31,

2018   2017   2018   2017
 
Net cash provided by operating activities $ 151,982 $ 131,482 $ 212,309 $ 206,515
Purchases of property and equipment (22,227 ) (21,975 ) (47,289 ) (38,622 )
Distributions to limited partners of Premier LP (14,993 ) (20,752 ) (30,458 ) (45,703 )
Payments to limited partners under tax receivable agreements *                   (17,975 )      
Non-GAAP Free Cash Flow     $ 114,762     $ 88,755     $ 116,587     $ 122,190  
 
* 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 December 31,     Six Months Ended December 31,
2018     2018     2018     2017 2018     2018     2018     2017

New revenue

standard

Impact of new

revenue standard

Previous revenue

standard

Previous revenue

standard

New revenue

standard

Impact of new

revenue standard

Previous revenue

standard

Previous revenue

standard

 
Net income $ 104,811 $ 4,955 $ 99,856 $ 19,769 $ 186,784 $ 26,212 $ 160,572 $ 80,385
Interest and investment loss, net 859 - 859 1,508 1,547 - 1,547 3,003
Income tax expense (benefit) 1,804 2,158 (354 ) 231,508 12,597 3,917 8,680 244,272
Depreciation and amortization 21,683 - 21,683 17,310 42,190 - 42,190 33,817
Amortization of purchased intangible assets           13,899         -         13,899         13,817         27,537         -         27,537         27,715  
EBITDA 143,056 7,113 135,943 283,912 270,655 30,129 240,526 389,192
Stock-based compensation 7,800 - 7,800 8,951 14,137 - 14,137 17,908
Acquisition related expenses 1,354 - 1,354 1,674 1,763 - 1,763 4,773
Remeasurement of tax receivable agreement liabilities - - - (177,174 ) - - - (177,174 )
ERP implementation expenses 61 - 61 156 387 - 387 491
Loss on disposal of long-lived assets - - - 400 - - - 1,720
(Gain) loss on FFF put and call rights (10,850 ) - (10,850 ) 15,587 (7,567 ) - (7,567 ) 15,607
Other expense           576         -         576         36         1,243         -         1,243         196  
Adjusted EBITDA         $ 141,997       $ 7,113       $ 134,884       $ 133,542       $ 280,618       $ 30,129       $ 250,489       $ 252,713  
 
Income before income taxes $ 106,615 $ 7,113 $ 99,502 $ 251,277 $ 199,381 $ 30,129 $ 169,252 $ 324,657
Equity in net income of unconsolidated affiliates (1,444 ) - (1,444 ) (1,257 ) (4,134 ) - (4,134 ) (5,509 )
Interest and investment loss, net 859 - 859 1,508 1,547 - 1,547 3,003
Loss on disposal of long-lived assets - - - 400 - - - 1,720
Other (income) expense           (7,199 )       -         (7,199 )       13,356         (5,258 )       -         (5,258 )       11,893  
Operating income 98,831 7,113 91,718 265,284 191,536 30,129 161,407 335,764
Depreciation and amortization 21,683 - 21,683 17,310 42,190 - 42,190 33,817
Amortization of purchased intangible assets 13,899 - 13,899 13,817 27,537 - 27,537 27,715
Stock-based compensation 7,800 - 7,800 8,951 14,137 - 14,137 17,908
Acquisition related expenses 1,354 - 1,354 1,674 1,763 - 1,763 4,773
Remeasurement of tax receivable agreement liabilities - - - (177,174 ) - - - (177,174 )
ERP implementation expenses 61 - 61 156 387 - 387 491
Equity in net income of unconsolidated affiliates 1,444 - 1,444 1,257 4,134 - 4,134 5,509
Deferred compensation plan (income) expense (4,235 ) - (4,235 ) 1,577 (2,899 ) - (2,899 ) 3,116
Other expense, net           1,160         -         1,160         690         1,833         -         1,833         794  
Adjusted EBITDA         $ 141,997       $ 7,113       $ 134,884       $ 133,542       $ 280,618       $ 30,129       $ 250,489       $ 252,713  
 
Segment Adjusted EBITDA:
Supply Chain Services $ 134,079 $ (3,230 ) $ 137,309 $ 132,045 $ 269,482 $ 12,369 $ 257,113 $ 257,665
Performance Services 37,100 10,343 26,757 27,929 67,675 17,760 49,915 49,150
Corporate           (29,182 )       -         (29,182 )       (26,432 )       (56,539 )       -         (56,539 )       (54,102 )
Adjusted EBITDA         $ 141,997       $ 7,113       $ 134,884       $ 133,542       $ 280,618       $ 30,129       $ 250,489       $ 252,713  
 
 
Net income (loss) attributable to stockholders $ 693,889 $ 3,790 $ 690,099 $ 281,200 $ 12,556 $ 22,246 $ (9,690 ) $ 617,630
Adjustment of redeemable limited partners' capital to redemption amount (651,709 ) (2,048 ) (649,661 ) (317,916 ) 56,484 (12,620 ) 69,104 (638,340 )
Net income attributable to non-controlling interest in Premier LP 62,631 3,213 59,418 56,485 117,744 16,586 101,158 101,095
Income tax expense (benefit) 1,804 2,158 (354 ) 231,508 12,597 3,917 8,680 244,272
Amortization of purchased intangible assets 13,899 - 13,899 13,817 27,537 - 27,537 27,715
Stock-based compensation 7,800 - 7,800 8,951 14,137 - 14,137 17,908
Acquisition related expenses 1,354 - 1,354 1,674 1,763 - 1,763 4,773
Remeasurement of tax receivable agreement liabilities - - - (177,174 ) - - - (177,174 )
ERP implementation expenses 61 - 61 156 387 - 387 491
Loss on disposal of long-lived assets - - - 400 - - - 1,720
(Gain) loss on FFF put and call rights (10,850 ) - (10,850 ) 15,587 (7,567 ) - (7,567 ) 15,607
Other expense           576         -         576         36         1,243         -         1,243         196  
Non-GAAP adjusted fully distributed income before income taxes 119,455 7,113 112,342 114,724 236,881 30,129 206,752 215,893
Income tax expense on fully distributed income before income taxes           31,058         1,849         29,209         44,742         61,589         7,834         53,756         84,198  
Non-GAAP Adjusted Fully Distributed Net Income         $ 88,397       $ 5,264       $ 83,133       $ 69,982       $ 175,292       $ 22,295       $ 152,996       $ 131,695  
 
 
 
 
 
 
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 December 31,     Six Months Ended December 31,
2018     2018     2018     2017     2018     2018     2018     2017

New revenue

standard

   

Impact of new

revenue standard

   

Previous revenue

standard

   

Previous revenue

standard

   

New revenue

standard

   

Impact of new

revenue standard

   

Previous revenue

standard

   

Previous revenue

standard

 
Net income (loss) attributable to stockholders $ 693,889 $ 3,790 $ 690,099 $ 281,200 $ 12,556 $ 22,246 $ (9,690 ) $ 617,630
Adjustment of redeemable limited partners' capital to redemption amount (651,709 ) (2,048 ) (649,661 ) (317,916 ) 56,484 (12,620 ) 69,104 (638,340 )
Net income attributable to non-controlling interest in Premier LP 62,631 3,213 59,418 56,485 117,744 16,586 101,158 101,095
Income tax expense (benefit) 1,804 2,158 (354 ) 231,508 12,597 3,917 8,680 244,272
Amortization of purchased intangible assets 13,899 - 13,899 13,817 27,537 - 27,537 27,715
Stock-based compensation 7,800 - 7,800 8,951 14,137 - 14,137 17,908
Acquisition related expenses 1,354 - 1,354 1,674 1,763 - 1,763 4,773
Remeasurement of tax receivable agreement liabilities - - - (177,174 ) - - - (177,174 )
ERP implementation expenses 61 - 61 156 387 - 387 491
Loss on disposal of long-lived assets - - - 400 - - - 1,720
(Gain) loss on FFF put and call rights (10,850 ) - (10,850 ) 15,587 (7,567 ) - (7,567 ) 15,607
Other expense           576         -         576         36         1,243         -         1,243         196  
Non-GAAP adjusted fully distributed income before income taxes 119,455 7,113 112,342 114,724 236,881 30,129 206,752 215,893
Income tax expense on fully distributed income before income taxes           31,058         1,849         29,209         44,742         61,589         7,834         53,756         84,198  
Non-GAAP Adjusted Fully Distributed Net Income         $ 88,397       $ 5,264       $ 83,133       $ 69,982       $ 175,292       $ 22,295       $ 152,996       $ 131,695  
 
Weighted Average:
Common shares used for basic and diluted earnings (loss) per share 59,876 59,876 59,876 55,209 56,548 56,548 56,548 54,059
Potentially dilutive shares 1,005 1,005 1,005 450 1,036 1,036 1,036 553
Conversion of Class B common units           72,791         72,791         72,791         83,578         76,293         76,293         76,293         85,029  
Weighted average fully distributed shares outstanding - diluted           133,672         133,672         133,672         139,237         133,877         133,877         133,877         139,641  
 
GAAP earnings (loss) per share $ 11.59 $ 0.06 $ 11.53 $ 5.09 $ 0.22 $ 0.39 $ (0.17 ) $ 11.43
Adjustment of redeemable limited partners' capital to redemption amount (10.88 ) (0.03 ) (10.85 ) (5.76 ) 1.00 (0.22 ) 1.22 (11.81 )
Net income attributable to non-controlling interest in Premier LP 1.05 0.06 0.99 1.02 2.08 0.29 1.79 1.87
Income tax expense (benefit) 0.03 0.04 (0.01 ) 4.19 0.22 0.07 0.15 4.52
Amortization of purchased intangible assets 0.23 - 0.23 0.25 0.49 - 0.49 0.51
Stock-based compensation 0.13 - 0.13 0.16 0.25 - 0.25 0.33
Acquisition related expenses 0.02 - 0.02 0.03 0.03 - 0.03 0.09
Remeasurement of tax receivable agreement liabilities - - - (3.21 ) - - - (3.28 )
ERP implementation expenses - - - - 0.01 - 0.01 0.01
Loss on disposal of long-lived assets - - - 0.01 - - - 0.03
(Gain) loss on FFF put and call rights (0.18 ) - (0.18 ) 0.28 (0.13 ) - (0.13 ) 0.29
Other expense 0.01 - 0.01 - 0.02 - 0.02 -
Impact of corporation taxes (0.52 ) (0.03 ) (0.49 ) (0.80 ) (1.09 ) (0.14 ) (0.95 ) (1.56 )
Impact of dilutive shares           (0.82 )       (0.06 )       (0.76 )       (0.76 )       (1.80 )       (0.23 )       (1.57 )       (1.49 )
Non-GAAP EPS on Adjusted Fully Distributed Net Income         $ 0.66       $ 0.04       $ 0.62       $ 0.50       $ 1.31       $ 0.17       $ 1.14       $ 0.94  
 
 
 
 
 
 
Consolidated Second-Quarter and Full Year Financial Highlights - Including Impact of New Revenue Standard
 
    Three Months Ended December 31,   Six Months Ended December 31,
(in thousands, except per share data) 2018   2018   2018   2017   2018   2018   2018   2017
New revenue standard Impact of new revenue standard Previous revenue standard Previous revenue standard New revenue standard Impact of new revenue standard Previous revenue standard Previous revenue standard
Net Revenue (a) :
Supply Chain Services:
Net administrative fees $ 165,695 $ (4,061 ) $ 169,756 $ 159,343 $ 327,695 $ 11,123 $ 316,572 $ 310,334
Other services and support       3,789       (849 )     4,638       3,421       6,133       (2,129 )     8,262       5,570  
Services 169,484 (4,910 ) 174,394 162,764 333,828 8,994 324,834 315,904
Products       157,519       (11,914 )     169,433       162,101       308,989       (23,876 )     332,865       314,764  
Total Supply Chain Services (a) 327,003 (16,824 ) 343,827 324,865 642,817 (14,882 ) 657,699 630,668
Performance Services (a)       94,854       9,127       85,727       86,533       180,586       15,786       164,800       171,294  
Total (a)     $ 421,857     $ (7,697 )   $ 429,554     $ 411,398     $ 823,403     $ 904     $ 822,499     $ 801,962  
 
Net income $ 104,811 $ 4,955 $ 99,856 $ 19,769 $ 186,784 $ 26,212 $ 160,572 $ 80,385
Net income (loss) attributable to stockholders $ 693,889 $ 3,790 $ 690,099 $ 281,200 $ 12,556 $ 22,246 $ (9,690 ) $ 617,630
Adjusted net income (loss) (b) $ 92,032 $ 3,861 $ 88,171 $ 8,447 $ 12,556 $ 22,246 $ (9,690 ) $ 50,907
Weighted average shares outstanding:
Basic 59,876 59,876 59,876 55,209 56,548 56,548 56,548 54,059
Diluted 133,672 133,672 133,672 139,237 57,584 57,584 56,548 139,641
Earnings (loss) per share attributable to stockholders:
Basic $ 11.59 $ 0.06 $ 11.53 $ 5.09 $ 0.22 $ 0.39 $ (0.17 ) $ 11.43
Diluted (b)     $ 0.69     $ 0.03     $ 0.66     $ 0.06     $ 0.22     $ 0.39     $ (0.17 )   $ 0.36  
 

NON-GAAP FINANCIAL MEASURES:

 
Adjusted EBITDA (a) (c) :
Supply Chain Services $ 134,079 $ (3,230 ) $ 137,309 $ 132,045 $ 269,482 $ 12,369 $ 257,113 $ 257,665
Performance Services       37,100       10,343       26,757       27,929       67,675       17,760       49,915       49,150  
Total segment adjusted EBITDA 171,179 7,113 164,066 159,974 337,157 30,129 307,028 306,815
Corporate       (29,182 )           (29,182 )     (26,432 )     (56,539 )           (56,539 )     (54,102 )
Total (a)     $ 141,997     $ 7,113     $ 134,884     $ 133,542     $ 280,618     $ 30,129     $ 250,489     $ 252,713  
Adjusted fully distributed net income (c)     $ 88,397     $ 5,264     $ 83,133     $ 69,982     $ 175,292     $ 22,296     $ 152,996     $ 131,695  
Earnings per share on adjusted fully distributed net income - diluted (a) (c) $ 0.66 $ 0.04 $ 0.62 $ 0.50 $ 1.31 $ 0.17 $ 1.14 $ 0.94
 
(a) Bolded measures correspond to company guidance.
 

(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 three months ended December 31, 2017 was previously stated at ($1.66) per share and has been corrected to $0.06 per share. Diluted earnings (loss) per share for the six months ended December 31, 2017 was previously stated at ($1.30) per share and has been corrected to $0.36 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.

 
(c) See attached supplemental financial information for reconciliation of reported GAAP results to Non-GAAP results.
 
 
 
 

Investor contact:
Jim Storey
Vice President, Investor Relations
704.816.5958
jim_storey@premierinc.com

Media contact:
Amanda Forster
Vice President, Public Relations
202.879.8004
amanda_forster@premierinc.com

Source: Premier Inc.

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