Logo
Premier Inc (PINC): 36.36 -0.53 -1.44% Volume: 1,013,383 November 12, 2019

Premier Inc. Reports Fiscal 2019 Third-Quarter Results

May 7, 2019

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

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, fiscal 2019 results of operations under the new revenue standard ASC 606 are compared with fiscal 2018 results under the previous revenue standard ASC 605 in the body of this press release, and the comparisons are not necessarily meaningful. However, solely for informational purposes, current period results under the previous standard are included in the tables at the back of this press release.

Q3 2019 Highlights:

  • GAAP net revenue was $422.9 million, compared with $425.3 million a year ago; Supply Chain Services segment revenue was $330.2 million, compared with $330.7 million a year ago; and Performance Services segment revenue was $92.6 million, compared with $94.6 million a year ago.
  • GAAP net income was $73.8 million, compared with $76.5 million a year ago, and diluted net income was $0.48 per share, compared with a loss of $1.93 per share a year ago.
  • Non-GAAP adjusted EBITDA* was $137.6 million, compared with $142.2 million a year ago.
  • Non-GAAP adjusted fully distributed net income* was $84.7 million, or $0.66 per diluted share, compared with $90.6 million, or $0.67 per diluted share a year ago.
  • Nine-month results demonstrate financial performance remains on track with existing guidance ranges for the full fiscal year, with net administrative fees up 4% from a year ago, supply chain services and performance services revenue up 1% and 3%, respectively, non-GAAP adjusted EBITDA up 6% and non-GAAP adjusted fully distributed earnings per share up 22%.
  • For full fiscal-year, Supply Chain Services revenue projected to perform near midpoint of existing range, Performance Services segment revenue near higher end of the range, non-GAAP adjusted EBITDA near lower end of the range, and non-GAAP adjusted fully distributed earnings per share near midpoint of the range.
  • Outlook raised for full fiscal-year non-GAAP free cash flow, which is now expected to exceed 55% of non-GAAP adjusted EBITDA for the full fiscal year.
  • On April 26, 2019, Premier’s board of directors authorized an additional $300.0 million for the potential repurchase of Class A stock, following the completion of the previous $250.0 million repurchase program during the fiscal third quarter.

* 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.

“Our fiscal third-quarter results reflect the timing-related impact of revenue recognition under the new ASC 606 revenue standard, continuing headwinds in our products business, and, to a lesser extent, incremental investments in future growth opportunities that we believe will enhance our core capabilities across the supply chain, enterprise analytics and performance improvement businesses,” said Susan DeVore, chief executive officer. “While our results are consistent with our expectation that the second half of our fiscal year would be less profitable than the first half, we remain on track to deliver full fiscal-year 2019 results within our previously disclosed guidance ranges.

“We are actively managing Premier’s portfolio, as underscored by our decision to exit the specialty pharmacy business, and focusing on our core capabilities to deliver best-in-class solutions for our member health systems and sustainable, long-term value creation for stockholders,” DeVore continued. “The company’s flexible balance sheet and strong cash flow provide a solid foundation and support our balanced approach to pursuing both organic and external growth opportunities while returning capital to stockholders. The board’s decision to authorize a new $300.0 million stock repurchase program underscores its continued confidence in our strategy.”

 

Results of Operations for the Third Quarter of Fiscal 2019

Consolidated Third-Quarter and Full Year Financial Highlights
    Three Months Ended March 31,       Nine Months Ended March 31,    
(in thousands, except per share data) 2019   2018     2019   2018  

New revenue

standard

 

Previous revenue

standard

  % Change    

New revenue

standard

 

Previous revenue

standard

  % Change  
Net Revenue (a) :
Supply Chain Services:
Net administrative fees $ 164,534 $ 161,612 2 % $ 492,229 $ 471,946 4 %
Other services and support       3,310       2,899     14 %     9,442       8,470     11 %
Services 167,844 164,511 2 % 501,671 480,416 4 %
Products       162,404       166,234     (2 )%     471,393       480,997     (2 )%
Total Supply Chain Services (a) 330,248 330,745 % 973,064 961,413 1 %
Performance Services (a)       92,627       94,593     (2 )%     273,214       265,887     3 %
Total (a)     $ 422,875     $ 425,338     (1 )%   $ 1,246,278     $ 1,227,300     2 %
 
Net income $ 73,802 $ 76,549 (4 )% $ 260,586 $ 156,934 66 %
Net income (loss) attributable to stockholders $ 265,808 $ (103,537 ) (357 )% $ 278,364 $ 514,093 (46 )%
Adjusted net income (loss) (b) $ 62,040 $ (103,537 ) -160 % $ 222,083 $ 108,983 104 %
Weighted average shares outstanding:
Basic 62,020 53,529 16 % 58,346 53,885 8 %
Diluted 129,072 53,529 141 % 132,249 138,254 (4 )%
Earnings (loss) per share attributable to stockholders:
Basic $ 4.29 ($1.93 ) (322 )% $ 4.77 $ 9.54 (50 )%
Diluted (b)     $ 0.48       ($1.93 )   -125 %   $ 1.68     $ 0.79     113 %
 

NON-GAAP FINANCIAL MEASURES :

 
Adjusted EBITDA (a) (c) :
Supply Chain Services $ 133,667 $ 135,265 (1 )% $ 403,149 $ 392,930 3 %
Performance Services       33,235       36,715     (9 )%     100,910       85,865     18 %
Total segment adjusted EBITDA 166,902 171,980 (3 )% 504,059 478,795 5 %
Corporate       (29,324 )     (29,741 )   (1 )%     (85,862 )     (83,844 )   2 %
Total (a)     $ 137,578     $ 142,239     (3 )%   $ 418,197     $ 394,951     6 %
Adjusted fully distributed net income (c)     $ 84,734     $ 90,590     (6 )%   $ 260,026     $ 222,284     17 %
Earnings per share on adjusted fully distributed net income - diluted (a) (c) $ 0.66 $ 0.67 (1 )% $ 1.97 $ 1.61 22 %
                           
(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 nine months ended March 31, 2018 was previously stated at ($0.84) per share and has been corrected to $0.79 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 third-quarter ended March 31, 2019, Premier generated GAAP net revenue of $422.9 million, compared to net revenue of $425.3 million for the same period a year ago.

GAAP net income for the fiscal third quarter was $73.8 million, compared with $76.5 million a year ago. In accordance with GAAP, fiscal 2019 and 2018 third-quarter net income attributable to stockholders included non-cash adjustments of $235.4 million and $(127.0) 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 $265.8 million, compared with a net loss of $103.5 million for the same period a year ago. Third-quarter net income of $0.48 per diluted share compared with a net loss of $1.93 per 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 third-quarter non-GAAP adjusted EBITDA of $137.6 million compared to $142.2 million for the same period the prior year.

Non-GAAP adjusted fully distributed net income for the fiscal third quarter of $84.7 million compared to $90.6 million for the same period a year ago. Non-GAAP adjusted fully distributed earnings per share totaled $0.66, compared with $0.67 for the same period a year ago. Adjusted fully distributed earnings per share is a non-GAAP financial measure that represents net income, adjusted for non-recurring and non-cash items, attributable to all stockholders as if all Class B stockholders exchanged their Class B common units and associated Class B common shares for Class A common shares.

Segment Results

Supply Chain Services
For the fiscal third quarter ended March 31, 2019, Supply Chain Services segment net revenue was $330.2 million, compared with $330.7 million a year ago. Net administrative fees revenue of $164.5 million increased 2% from the prior year, primarily driven by further contract penetration of existing members. Net administrative fees in the fiscal 2019 third quarter under the previous revenue recognition standard of $165.4 million similarly increased 2% over a year ago.

Products revenue was $162.4 million, compared with $166.2 million a year ago. Growth in oncology-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 $11.2 million, and to a lesser extent by reimbursement compression in the specialty pharmacy business.

Supply Chain Services segment non-GAAP adjusted EBITDA for the fiscal 2019 third quarter was $133.7 million, compared with $135.3 million for the same period a year ago. Growth in net administrative fees revenue was offset by reimbursement compression in the specialty pharmacy business and by increases in certain product-related costs in the direct sourcing business.

Performance Services
For the fiscal third quarter ended March 31, 2019, Performance Services segment net revenue was $92.6 million, compared with $94.6 million for the same quarter last year. Growth in consulting and clinical decision support technology revenue was offset by lower-than-expected performance of the ambulatory regulatory reporting business and softer applied sciences revenue, which is subject to periodic variability based on timing of engagements.

Performance Services segment non-GAAP adjusted EBITDA was $33.2 million for the fiscal 2019 third quarter, compared with $36.7 million for the same quarter last year. The decrease was primarily the result of lower revenue and incremental investments in long-term growth opportunities partially offset by reduced expenses related to decreased headcount compared to the prior year.

Results of Operations for the Nine Months Ended March 31, 2019

For the nine months ended March 31, 2019, GAAP net revenue was $1.25 billion, compared with $1.23 billion for the same period a year ago. GAAP net income totaled $260.6 million, compared with $156.9 million for the same period a year ago. Fiscal 2019 and 2018 nine-month GAAP net income attributable to stockholders required non-cash adjustments of $178.9 million and $511.3 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 $278.4 million, compared with $514.1 million a year ago. On a diluted per-share basis, net income totaled $1.68, compared with $0.79 per share 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 nine months ended March 31, 2019, non-GAAP adjusted EBITDA was $418.2 million, compared with $395.0 million for the same period last year. Non-GAAP adjusted fully distributed net income was $260.0 million, compared with $222.3 million for the same period a year ago, while non-GAAP adjusted fully distributed earnings per share was $1.97, compared with $1.61.

Supply Chain Services segment net revenue was $973.1 million for the first nine months of fiscal 2019, compared with $961.4 million a year earlier. Supply Chain Services segment adjusted EBITDA was $403.1 million, compared with $392.9 million for the prior year.

Performance Services segment net revenue was $273.2 million for the first nine months of fiscal 2019, compared with $265.9 million a year earlier. Segment adjusted EBITDA was $100.9 million, compared with $85.9 million.

Cash Flows and Liquidity

Net cash provided by operating activities was $368.1 million for the nine-month period ended March 31, 2019, compared with $369.7 million for the same period last year. Increases in net administrative fees were offset by increased product costs and reimbursement compression in the specialty pharmacy business. At March 31, 2019, the company’s cash and cash equivalents totaled $137.5 million, compared with $152.4 million at June 30, 2018. At March 31, 2018, the company had an outstanding balance of $150.0 million on its five-year, $1.0 billion revolving credit facility, $50.0 million of which was repaid in April 2019.

Non-GAAP free cash flow for the nine-month period ended March 31, 2019 was $235.3 million, compared with $238.4 million for the same period a year ago and was impacted by the $18.0 million Tax Receivable Agreement (TRA) payment made to member owners, offset by a decrease in distributions to limited partners. Timing of the TRA 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. Free cash flow equaled 56% of non-GAAP adjusted EBITDA for the nine-month period and the company expects free cash flow to exceed 55% 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).

The company completed its previously announced $250.0 million Class A stock repurchase program in March 2019. Under the program, the company repurchased approximately 6.7 million shares of Class A common stock, which had the impact of adding approximately $0.03 to diluted per-share results for the nine-month period ending March 31, 2019. On April 26, 2019, Premier’s board of directors authorized an additional $300.0 million for potential future repurchases of Class A common stock. Premier expects to execute the necessary agreements and documentation related to the repurchase program during the next open trading window under the company’s insider trading policy, scheduled to begin May 9th. There can be no assurance when or whether the repurchase program will be initiated or regarding the number of shares of Class A common stock that will be purchased under the program.

Fiscal 2019 Outlook and Guidance

Based on results for the nine months ended March 31, 2019, management’s current expectations for the remainder of the fiscal year, and the realization of previously disclosed underlying assumptions, the company expects full-year financial results within the previously disclosed guidance ranges. Specifically, Supply Chain Services segment revenue is expected to be near the midpoint of the range, Performance Services segment revenue is expected near the higher end of the range, non-GAAP adjusted EBITDA is expected near the lower end of the range, and non-GAAP adjusted fully distributed earnings per share is expected near the midpoint.

         
Fiscal 2019 Financial Guidance *
   
Premier, Inc. fiscal 2019 financial guidance under ASC 606:
 
(in millions, except per share data) ASC 606 Expected Performance within the Range
Net Revenue:
Supply Chain Services segment $1,305.0 - $1,357.0 Near midpoint
Performance Services segment $350.0 - $364.0 Higher end
Total Net Revenue $1,655.0 - $1,721.0

Near midpoint

 
Non-GAAP adjusted EBITDA $550.0 - $572.0 Lower end
 
Non-GAAP adjusted fully distributed EPS   $2.55 - $2.67   Near midpoint
* 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, May 7, 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: 1907218. 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 the current market environment, expected financial performance, non-GAAP free cash flow generation, the impact of the new revenue recognition standards, share repurchases, if any, under our current and future stock repurchase program, the success of our incremental investments in growth opportunities, the financial and strategic impact of our decision to exit the specialty pharmacy business 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 March 31, 2019, 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 March 31,     Nine Months Ended March 31,    
2019 2019 2019 2018 2019 2019 2019 2018

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 $ 164,534 $ (891 ) $ 165,425 $ 161,612 $ 492,229 $ 10,232 $ 481,997 $ 471,946
Other services and support     95,937       2,250       93,687       97,492           282,656       15,907       266,749       274,357    
Services 260,471 1,359 259,112 259,104 774,885 26,139 748,746 746,303
Products     162,404       (11,186 )     173,590       166,234           471,393       (35,062 )     506,455       480,997    
Net revenue 422,875 (9,827 ) 432,702 425,338 1,246,278 (8,923 ) 1,255,201 1,227,300
Cost of revenue:
Services 46,545 (1,296 ) 47,841 47,037 133,106 (5,842 ) 138,948 141,228
Products     157,438       (10,440 )     167,878       156,511           458,593       (32,738 )     491,331       454,222  
Cost of revenue     203,983       (11,736 )     215,719       203,548           591,699       (38,580 )     630,279       595,450  
Gross profit 218,892 1,909 216,983 221,790 654,579 29,657 624,922 631,850
Other operating income:
Remeasurement of tax receivable agreement liabilities     -       -       -       -           -       -       -       177,174  
Other operating income     -       -       -       -           -       -       -       177,174  
Operating expenses:
Selling, general and administrative 118,503 (1,032 ) 119,535 109,007 334,485 (3,413 ) 337,898 331,948
Research and development 296 - 296 292 928 - 928 1,105
Amortization of purchased intangible assets     14,233       -       14,233       13,881           41,770       -       41,770       41,597  
Operating expenses     133,032       (1,032 )     134,064       123,180           377,183       (3,413 )     380,596       374,650  
Operating income     85,860       2,941       82,919       98,610           277,396       33,070       244,326       434,374  
Equity in net income (loss) of unconsolidated affiliates 553 - 553 (4,939 ) 4,687 - 4,687 570
Interest and investment loss, net (1,081 ) - (1,081 ) (1,236 ) (2,628 ) - (2,628 ) (4,239 )
Loss on disposal of long-lived assets (303 ) - (303 ) (5 ) (303 ) - (303 ) (1,725 )
Other (expense) income     (135 )     -       (135 )     (2,593 )         5,123       -       5,123       (14,486 )
Other (expense) income, net     (966 )     -       (966 )     (8,773 )         6,879       -       6,879       (19,880 )
Income before income taxes 84,894 2,941 81,953 89,837 284,275 33,070 251,205 414,494
Income tax expense     11,092       (1,239 )     12,331       13,288           23,689       2,678       21,011       257,560    
Net income 73,802 4,180 69,622 76,549 260,586 30,392 230,194 156,934
Net income attributable to non-controlling interest in Premier LP (43,388 ) (2,728 ) (40,660 ) (53,047 ) (161,132 ) (19,314 ) (141,818 ) (154,142 )
Adjustment of redeemable limited partners' capital to redemption amount     235,394       1,681       233,713       (127,039 )         178,910       14,301       164,609       511,301    
Net income (loss) attributable to stockholders   $ 265,808     $ 3,133     $ 262,675     $ (103,537 )       $ 278,364     $ 25,379     $ 252,985     $ 514,093    
 
Calculation of GAAP Earnings (Loss) per Share
 
Numerator for basic earnings (loss) per share:
Net income (loss) attributable to stockholders   $ 265,808     $ 3,133     $ 262,675     $ (103,537 )       $ 278,364     $ 25,379     $ 252,985     $ 514,093    
 
Numerator for diluted earnings (loss) per share:
Net income (loss) attributable to stockholders $ 265,808 $ 3,133 $ 262,675 $ (103,537 ) $ 278,364 $ 25,379 $ 252,985 $ 514,093
Adjustment of redeemable limited partners' capital to redemption amount (235,394 ) (1,681 ) (233,713 ) - (178,910 ) (14,301 ) (164,609 ) (511,301 )
Net income attributable to non-controlling interest in Premier LP     43,388       2,728       40,660       -           161,132       19,314       141,818       154,142    
Net income (loss) 73,802 4,180 69,622 (103,537 ) 260,586 30,392 230,194 156,934
Tax effect on Premier, Inc. net income     (11,762 )     516       (12,278 )     -           (38,503 )     (2,375 )     (36,128 )     (47,951 )  
Adjusted net income (loss)   $ 62,040     $ 4,696     $ 57,344     $ (103,537 )       $ 222,083     $ 28,017     $ 194,066     $ 108,983    
 
Denominator for basic earnings (loss) per share:
Weighted average shares     62,020       62,020       62,020       53,529           58,346       58,346       58,346       53,885    
 
Denominator for diluted earnings (loss) per share:
Weighted average shares 62,020 62,020 62,020 53,529 58,346 58,346 58,346 53,885
Effect of dilutive stock based awards 730 730 730 - 934 934 934 551
Class B shares outstanding     66,322       66,322       66,322       -           72,969       72,969       72,969       83,818    
Weighted average shares and assumed conversions     129,072       129,072       129,072       53,529           132,249       132,249       132,249       138,254    
 
Basic earnings (loss) per share $ 4.29 $ 0.05 $ 4.24 ($1.93 ) $ 4.77 $ 0.43 $ 4.34 $ 9.54
Diluted earnings (loss) per share (1) $ 0.48 $ 0.04 $ 0.44 ($1.93 ) $ 1.68 $ 0.21 $ 1.47 $ 0.79
 
(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 nine months ended March 31, 2018 was previously stated at ($0.84) per share and has been corrected to $0.79 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)
 
March 31, 2019 March 31, 2019 March 31, 2019 June 30, 2018

New revenue

standard

 

Impact of new

revenue standard

 

Previous revenue

standard

 

Previous revenue

standard

Assets
Cash and cash equivalents $ 137,512 $ - $ 137,512 $ 152,386
Accounts receivable (net of $3,716 and $1,841 allowance for doubtful accounts, respectively) 206,595 (7,407 ) 214,002 185,874
Contract assets 197,016 197,016 - -
Inventory 64,775 - 64,775 66,139
Prepaid expenses and other current assets 28,593 (4,873 ) 33,466 23,325
Due from related parties     466       -       466       894  
Total current assets 634,957 184,736 450,221 428,618
Property and equipment (net of $347,301 and $297,591 accumulated depreciation, respectively) 212,306 - 212,306 206,693
Intangible assets (net of $195,404 and $153,635 accumulated amortization, respectively) 303,966 - 303,966 322,115
Goodwill 943,970 - 943,970 906,545
Deferred income tax assets 413,511 (6,152 ) 419,663 305,624
Deferred compensation plan assets 43,696 - 43,696 44,577
Investments in unconsolidated affiliates 98,642 - 98,642 94,053
Other assets     33,125       15,173       17,952       3,991  
Total assets   $ 2,684,173     $ 193,757     $ 2,490,416     $ 2,312,216  
 
Liabilities, redeemable limited partners' capital and stockholders' deficit
Accounts payable $ 68,708 $ - $ 68,708 $ 60,130
Accrued expenses 108,042 - 108,042 64,257
Revenue share obligations 132,602 50,342 82,260 78,999
Limited partners' distribution payable 13,145 5,013 8,132 15,465
Accrued compensation and benefits 54,771 - 54,771 64,112
Deferred revenue 34,154 (11,279 ) 45,433 39,785
Current portion of tax receivable agreements 17,505 - 17,505 17,925
Current portion of long-term debt 152,046 - 152,046 100,250
Other liabilities     7,009       -       7,009       7,959  
Total current liabilities 587,982 44,076 543,906 448,882
Long-term debt, less current portion 6,188 - 6,188 6,962
Tax receivable agreements, less current portion 323,863 - 323,863 237,176
Deferred compensation plan obligations 43,696 - 43,696 44,577
Deferred tax liabilities 20,479 2,357 18,122 17,569
Other liabilities     63,681       -       63,681       63,704  
Total liabilities     1,045,889       46,433       999,456       818,870  
 
Redeemable limited partners' capital 2,239,998 - 2,239,998 2,920,410
Stockholders' deficit:
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 64,245,753 shares issued and 61,391,417 shares outstanding at March 31, 2019 and 57,530,733 shares issued and 52,761,177 shares outstanding at June 30, 2018 642 - 642 575
Class B common stock, $0.000001 par value, 600,000,000 shares authorized; 64,983,232 and 80,335,701 shares issued and outstanding at December 31, 2018 and June 30, 2018, respectively - - - -
Treasury stock, at cost; 2,854,336 and 4,769,556 shares, respectively (102,910 ) - (102,910 ) (150,058 )
Additional paid-in-capital - - - -
Accumulated deficit     (499,446 )     147,324       (646,770 )     (1,277,581 )
Total stockholders' deficit     (601,714 )     147,324       (749,038 )     (1,427,064 )
Total liabilities, redeemable limited partners' capital and stockholders' deficit   $ 2,684,173     $ 193,757     $ 2,490,416     $ 2,312,216  
       
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
 
Nine Months Ended March 31,
2019 2019 2019 2018

New revenue

standard

 

Impact of new

revenue standard

 

Previous revenue

standard

 

Previous revenue

standard

Operating activities
Net income $ 260,586 $ 30,392 $ 230,194 $ 156,934
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 105,952 - 105,952 93,998
Equity in net income of unconsolidated affiliates (4,687 ) - (4,687 ) (570 )
Deferred income taxes 7,747 (2,196 ) 9,943 243,550
Stock-based compensation 20,692 - 20,692 24,930
Remeasurement of tax receivable agreement liabilities - - - (177,174 )
Loss on disposal of long-lived assets 303 - 303 1,725
(Gain) loss on FFF put and call rights (3,458 ) - (3,458 ) 18,674
Changes in operating assets and liabilities:
Accounts receivable, contract assets, prepaid expenses and other current assets (56,886 ) (21,196 ) (35,690 ) (3,558 )
Other assets (1,646 ) 218 (1,864 ) 378
Inventories 1,364 - 1,364 (6,804 )
Accounts payable, accrued expenses, deferred revenue and other current liabilities 37,873 (7,218 ) 45,091 9,690
Long-term liabilities (2,223 ) - (2,223 ) 1,336
Other operating activities     2,519       -       2,519       6,625  
Net cash provided by operating activities     368,136       -       368,136       369,734  
Investing activities
Purchases of property and equipment (70,117 ) - (70,117 ) (65,260 )
Acquisition of Stanson Health, Inc., net of cash acquired (50,854 ) - (50,854 ) -
Investment in convertible notes (11,500 ) - (11,500 ) -
Other investing activities     86       -       86       -  
Net cash used in investing activities     (132,385 )     -       (132,385 )     (65,260 )
Financing activities
Payments made on notes payable - - - (7,997 )
Redemption of limited partner of Premier LP 256 - 256 -
Proceeds from credit facility 50,000 - 50,000 30,000
Payments on credit facility - - - (50,000 )
Proceeds from exercise of stock options under equity incentive plan 17,314 - 17,314 3,615
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 (8,122 ) - (8,122 ) (5,916 )
Distributions to limited partners of Premier LP (44,746 ) - (44,746 ) (66,098 )
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) (248,840 ) - (248,840 ) (200,129 )
Earn-out liability payment to GNYHA Holdings     -       -       -       (16,662 )
Net cash used in financing activities     (250,625 )     -       (250,625 )     (311,799 )
Net decrease in cash and cash equivalents (14,874 ) - (14,874 ) (7,325 )
Cash and cash equivalents at beginning of year     152,386       -       152,386       156,735  
Cash and cash equivalents at end of period   $ 137,512     $ -     $ 137,512     $ 149,410  
         
Supplemental Financial Information
Reconciliation of Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow
(Unaudited)
(In thousands)
 

Three Months Ended

March 31,

 

Nine Months Ended

March 31,

  2019       2018           2019       2018  
 
Net cash provided by operating activities $ 155,827 $ 163,219 $ 368,136 $ 369,734
Purchases of property and equipment (22,828 ) (26,638 ) (70,117 ) (65,260 )
Distributions to limited partners of Premier LP (14,288 ) (20,395 ) (44,746 ) (66,098 )
Payments to limited partners under tax receivable agreements (1)                     (17,975 )      
Non-GAAP Free Cash Flow   $ 118,711     $ 116,186         $ 235,298     $ 238,376  
 
(1) 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 March 31,   Nine Months Ended March 31,
2019 2019 2019 2018 2019 2019 2019 2018

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 $ 73,802 $ 4,180 $ 69,622 $ 76,549 $ 260,586 $ 30,392 $ 230,194 $ 156,934
Interest and investment loss, net 1,081 - 1,081 1,236 2,628 - 2,628 4,239
Income tax expense 11,092 (1,239 ) 12,331 13,288 23,689 2,678 21,011 257,560
Depreciation and amortization 21,992 - 21,992 18,584 64,182 - 64,182 52,401
Amortization of purchased intangible assets     14,233       -       14,233       13,881       41,770       -       41,770       41,597    
EBITDA 122,200 2,941 119,259 123,538 392,855 33,070 359,785 512,731
Stock-based compensation 6,851 - 6,851 7,333 20,988 - 20,988 25,241
Acquisition related expenses 3,252 - 3,252 1,540 5,015 - 5,015 6,312
Strategic and financial restructuring expenses - - - 1,648 - - - 1,652
Remeasurement of tax receivable agreement liabilities - - - - - - - (177,174 )
ERP implementation expenses 225 - 225 40 612 - 612 531
Loss on disposal of long-lived assets 303 - 303 5 303 - 303 1,725
Loss (gain) on FFF put and call rights 4,109 - 4,109 3,067 (3,458 ) - (3,458 ) 18,674
Impairment on investments - - - 5,002 - - - 5,002
Other expense     638       -       638       66       1,882       -       1,882       257    
Adjusted EBITDA   $ 137,578     $ 2,941     $ 134,637     $ 142,239     $ 418,197     $ 33,070     $ 385,127     $ 394,951    
 
Income before income taxes $ 84,894 $ 2,941 $ 81,953 $ 89,837 $ 284,275 $ 33,070 $ 251,205 $ 414,494
Equity in net (income) loss of unconsolidated affiliates (553 ) - (553 ) 4,939 (4,687 ) - (4,687 ) (570 )
Interest and investment loss, net 1,081 - 1,081 1,236 2,628 - 2,628 4,239
Loss on disposal of long-lived assets 303 - 303 5 303 - 303 1,725
Other expense (income)     135       -       135       2,593       (5,123 )     -       (5,123 )     14,486    
Operating income 85,860 2,941 82,919 98,610 277,396 33,070 244,326 434,374
Depreciation and amortization 21,992 - 21,992 18,584 64,182 - 64,182 52,401
Amortization of purchased intangible assets 14,233 - 14,233 13,881 41,770 - 41,770 41,597
Stock-based compensation 6,851 - 6,851 7,333 20,988 - 20,988 25,241
Acquisition related expenses 3,252 - 3,252 1,540 5,015 - 5,015 6,312
Strategic and financial restructuring expenses - - - 1,648 - - - 1,652
Remeasurement of tax receivable agreement liabilities - - - - - - - (177,174 )
ERP implementation expenses 225 - 225 40 612 - 612 531
Equity in net income (loss) of unconsolidated affiliates 553 - 553 (4,939 ) 4,687 - 4,687 570
Impairment on investments - - - 5,002 - - - 5,002
Deferred compensation plan income (expense) 3,974 - 3,974 (112 ) 1,076 - 1,076 3,004
Other expense, net     638       -       638       652       2,471       -       2,471       1,441    
Adjusted EBITDA   $ 137,578     $ 2,941     $ 134,637     $ 142,239     $ 418,197     $ 33,070     $ 385,127     $ 394,951    
 
Segment Adjusted EBITDA:
Supply Chain Services $ 133,667 $ (852 ) $ 134,519 $ 135,265 $ 403,149 $ 11,518 $ 391,631 $ 392,930
Performance Services 33,235 3,793 29,442 36,715 100,910 21,552 79,358 85,865
Corporate     (29,324 )     -       (29,324 )     (29,741 )     (85,862 )     -       (85,862 )     (83,844 )  
Adjusted EBITDA   $ 137,578     $ 2,941     $ 134,637     $ 142,239     $ 418,197     $ 33,070     $ 385,127     $ 394,951    
 
 
Net income (loss) attributable to stockholders $ 265,808 $ 3,133 $ 262,675 $ (103,537 ) $ 278,364 $ 25,379 $ 252,985 $ 514,093
Adjustment of redeemable limited partners' capital to redemption amount (235,394 ) (1,681 ) (233,713 ) 127,039 (178,910 ) (14,301 ) (164,609 ) (511,301 )
Net income attributable to non-controlling interest in Premier LP 43,388 2,728 40,660 53,047 161,132 19,314 141,818 154,142
Income tax expense 11,092 (1,239 ) 12,331 13,288 23,689 2,678 21,011 257,560
Amortization of purchased intangible assets 14,233 - 14,233 13,881 41,770 - 41,770 41,597
Stock-based compensation 6,851 - 6,851 7,333 20,988 - 20,988 25,241
Acquisition related expenses 3,252 - 3,252 1,540 5,015 - 5,015 6,312
Strategic and financial restructuring expenses - - - 1,648 - - - 1,652
Remeasurement of tax receivable agreement liabilities - - - - - - - (177,174 )
ERP implementation expenses 225 - 225 40 612 - 612 531
Loss on disposal of long-lived assets 303 - 303 5 303 - 303 1,725
Loss (gain) on FFF put and call rights 4,109 - 4,109 3,067 (3,458 ) - (3,458 ) 18,674
Impairment on investments - - - 5,002 - - - 5,002
Other expense     638       -       638       66       1,882       -       1,882       257    
Non-GAAP adjusted fully distributed income before income taxes 114,505 2,941 111,564 122,419 351,387 33,070 318,317 338,311
Income tax expense on fully distributed income before income taxes     29,771       764       29,007       31,829       91,361       8,599       82,762       116,027    
Non-GAAP Adjusted Fully Distributed Net Income   $ 84,734     $ 2,177     $ 82,557     $ 90,590     $ 260,026     $ 24,471     $ 235,555     $ 222,284    
               
Supplemental Financial Information
Reconciliation of GAAP EPS to Non-GAAP EPS on Adjusted Fully Distributed Net Income
(Unaudited)
(In thousands, except per share data)
 
Three Months Ended March 31,   Nine Months Ended March 31,
2019 2019 2019 2018 2019 2019 2019 2018

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 $ 265,808 $ 3,133 $ 262,675 $ (103,537 ) $ 278,364 $ 25,379 $ 252,985 $ 514,093
Adjustment of redeemable limited partners' capital to redemption amount (235,394 ) (1,681 ) (233,713 ) 127,039 (178,910 ) (14,301 ) (164,609 ) (511,301 )
Net income attributable to non-controlling interest in Premier LP 43,388 2,728 40,660 53,047 161,132 19,314 141,818 154,142
Income tax expense 11,092 (1,239 ) 12,331 13,288 23,689 2,678 21,011 257,560
Amortization of purchased intangible assets 14,233 - 14,233 13,881 41,770 - 41,770 41,597
Stock-based compensation 6,851 - 6,851 7,333 20,988 - 20,988 25,241
Acquisition related expenses 3,252 - 3,252 1,540 5,015 - 5,015 6,312
Strategic and financial restructuring expenses - - - 1,648 - - - 1,652
Remeasurement of tax receivable agreement liabilities - - - - - - - (177,174 )
ERP implementation expenses 225 - 225 40 612 - 612 531
Loss on disposal of long-lived assets 303 - 303 5 303 - 303 1,725
Loss (gain) on FFF put and call rights 4,109 - 4,109 3,067 (3,458 ) - (3,458 ) 18,674
Impairment on investments - - 5,002 - - 5,002
Other expense     638       -       638       66       1,882       -       1,882       257  
Non-GAAP adjusted fully distributed income before income taxes 114,505 2,941 111,564 122,419 351,387 33,070 318,317 338,311
Income tax expense on fully distributed income before income taxes     29,771       764       29,007       31,829       91,361       8,599       82,762       116,027    
Non-GAAP Adjusted Fully Distributed Net Income   $ 84,734     $ 2,177     $ 82,557     $ 90,590     $ 260,026     $ 24,471     $ 235,555     $ 222,284    
 
Weighted Average:
Common shares used for basic and diluted earnings (loss) per share 62,020 62,020 62,020 53,529 58,346 58,346 58,346 53,885
Potentially dilutive shares 730 730 730 547 934 934 934 551
Conversion of Class B common units     66,322       66,322       66,322       81,394       72,969       72,969       72,969       83,818    
Weighted average fully distributed shares outstanding - diluted     129,072       129,072       129,072       135,470       132,249       132,249       132,249       138,254    
 
GAAP earnings (loss) per share $ 4.29 $ 0.05 $ 4.24 $ (1.93 ) $ 4.77 $ 0.43 $ 4.34 $ 9.54
Adjustment of redeemable limited partners' capital to redemption amount (3.80 ) (0.03 ) (3.77 ) 2.37 (3.07 ) (0.25 ) (2.82 ) (9.49 )
Net income attributable to non-controlling interest in Premier LP 0.70 0.04 0.66 0.99 2.76 0.33 2.43 2.86
Income tax expense 0.18 (0.02 ) 0.20 0.25 0.41 0.05 0.36 4.78
Amortization of purchased intangible assets 0.23 - 0.23 0.26 0.72 - 0.72 0.77
Stock-based compensation 0.11 - 0.11 0.14 0.36 - 0.36 0.47
Acquisition related expenses 0.05 - 0.05 0.03 0.09 - 0.09 0.12
Strategic and financial restructuring expenses - - - 0.03 - - - 0.03
Remeasurement of tax receivable agreement liabilities - - - - - - - (3.29 )
ERP implementation expenses - - - - 0.01 - 0.01 0.01
Loss on disposal of long-lived assets - - - - 0.01 - 0.01 0.03
Loss (gain) on FFF put and call rights 0.07 - 0.07 0.06 (0.06 ) - (0.06 ) 0.35
Impairment on investments - - - 0.09 - - - 0.09
Other expense 0.01 - 0.01 - 0.03 - 0.03 -
Impact of corporation taxes (0.48 ) (0.01 ) (0.47 ) (0.60 ) (1.57 ) (0.15 ) (1.42 ) (2.14 )
Impact of dilutive shares     (0.70 )     (0.01 )     (0.69 )     (1.02 )     (2.49 )     (0.22 )     (2.27 )     (2.52 )  
Non-GAAP EPS on Adjusted Fully Distributed Net Income   $ 0.66     $ 0.02     $ 0.64     $ 0.67     $ 1.97     $ 0.19     $ 1.78     $ 1.61    
 
                           
Consolidated Third-Quarter and Full Year Financial Highlights
  Three Months Ended March 31,   Nine Months Ended March 31,
(in thousands, except per share data) 2019   2019   2019   2018   2019   2019   2019   2018

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 $ 164,534 $ (891 ) $ 165,425 $ 161,612 $ 492,229 $ 10,232 $ 481,997 $ 471,946
Other services and support     3,310       (737 )     4,047       2,899       9,442       (2,867 )     12,309       8,470  
Services 167,844 (1,628 ) 169,472 164,511 501,671 7,365 494,306 480,416
Products     162,404       (11,186 )     173,590       166,234       471,393       (35,062 )     506,455       480,997  
Total Supply Chain Services (a) 330,248 (12,814 ) 343,062 330,745 973,064 (27,697 ) 1,000,761 961,413
Performance Services (a)     92,627       2,987       89,640       94,593       273,214       18,774       254,440       265,887  
Total (a)   $ 422,875     $ (9,827 )   $ 432,702     $ 425,338     $ 1,246,278     $ (8,923 )   $ 1,255,201     $ 1,227,300  
 
Net income $ 73,802 $ 4,180 $ 69,622 $ 76,549 $ 260,586 $ 30,392 $ 230,194 $ 156,934
Net income (loss) attributable to stockholders $ 265,808 $ 3,133 $ 262,675 $ (103,537 ) $ 278,364 $ 25,379 $ 252,985 $ 514,093
Adjusted net income (loss) (b) $ 62,040 $ 4,696 $ 57,344 $ (103,537 ) $ 222,083 $ 28,017 $ 194,066 $ 108,983
Weighted average shares outstanding:
Basic 62,020 62,020 62,020 53,529 58,346 58,346 58,346 53,885
Diluted 129,072 129,072 129,072 53,529 132,249 132,249 132,249 138,254
Earnings (loss) per share attributable to stockholders:
Basic $ 4.29 $ 0.05 $ 4.24 ($1.93 ) $ 4.77 $ 0.43 $ 4.34 $ 9.54
Diluted (b)   $ 0.48     $ 0.04     $ 0.44       ($1.93 )   $ 1.68     $ 0.21     $ 1.47     $ 0.79  
 

NON-GAAP FINANCIAL MEASURES:

 
Adjusted EBITDA (a) (c) :
Supply Chain Services $ 133,667 $ (852 ) $ 134,519 $ 135,265 $ 403,149 $ 11,518 $ 391,631 $ 392,930
Performance Services     33,235       3,793       29,442       36,715       100,910       21,552       79,358       85,865  
Total segment adjusted EBITDA 166,902 2,941 163,961 171,980 504,059 33,070 470,989 478,795
Corporate     (29,324 )           (29,324 )     (29,741 )     (85,862 )           (85,862 )     (83,844 )
Total (a)   $ 137,578     $ 2,941     $ 134,637     $ 142,239     $ 418,197     $ 33,070     $ 385,127     $ 394,951  
Adjusted fully distributed net income (c)   $ 84,734     $ 2,177     $ 82,557     $ 90,590     $ 260,026     $ 24,471     $ 235,555     $ 222,284  
Earnings per share on adjusted fully distributed net income - diluted (a) (c) $ 0.66 $ 0.02 $ 0.64 $ 0.67 $ 1.97 $ 0.19 $ 1.78 $ 1.61
                                 
(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 nine months ended March 31, 2018 was previously stated at ($0.84) per share and has been corrected to $0.79 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.

View all Press Releases