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.
|
|
|
|
|
View source version on businesswire.com:
https://www.businesswire.com/news/home/20190205005329/en/
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.