[February 06, 2017] |
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Premier Inc. Reports Fiscal 2017 Second-Quarter Results
Premier Inc. (NASDAQ: PINC) today reported financial results for the
fiscal 2017 second quarter ended December 31, 2016.
Second-Quarter Highlights:
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Net revenue increased 23% to $358.5 million from the same period last
year; Supply Chain Services segment revenue rose 34% and Performance
Services segment revenue decreased 3%.
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Net income rose 193% to $178.7 million from the same period a year
ago. Diluted earnings per share totaled $1.09, compared with a loss of
$1.31 per share in the prior year.
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Non-GAAP adjusted EBITDA* of $122.0 million increased 5% from the same
period last year.
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Non-GAAP adjusted fully distributed net income* increased 6% to $65.2
million, representing $0.46 per diluted share, an increase of 10% over
$0.42 per diluted share from a year ago.
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Management affirms full-year fiscal 2017 guidance for Performance
Services segment revenue, non-GAAP Adjusted EBITDA and non-GAAP
adjusted fully distributed earnings per share, while Supply Chain
Services and consolidated net revenue guidance is being decreased by
$20 million solely as a result of a non-cash purchase accounting
adjustment to reflect a reduction of net administrative fee revenue
attributable to the Innovatix and Essensa acquisition.
* Descriptions of non-GAAP adjusted EBITDA, adjusted fully
distributed net income and other non-GAAP financial measures are
provided in "Use and Definition of Non-GAAP Financial Measures," and
reconciliations are provided in the tables at the end of this release.
"Our fiscal 2017 second-quarter results reflect the continued strong
performance of our group purchasing organization, which helped deliver
non-GAAP adjusted EBITDA and adjusted fully distributed earnings per
share that exceeded our expectations," said Susan DeVore, president and
chief executive officer. "The Performance Services segment, including
our information technology and advisory services businesses, operated in
line with the expectations that management articulated on our
first-quarter conference call, and we continue to expect revenue to
increase in the second half of the fiscal year.
"In the midst of the current dynamic regulatory environment, we continue
to believe that Premier remains uniquely positioned with a
differentiated and comprehensive offering that will help our members
reduce costs, improve quality and safety, and transition to value-based
care in the months and years ahead," DeVore said. "Our consolidated
revenue and earnings are growing, generating strong cash flow and
preserving our healthy balance sheet. This performance provides us with
the ongoing resources and flexibility to invest in future opportunities
designed to meet our members' needs and drive long-term stockholder
value."
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Results of Operations for the Second Quarter of Fiscal 2017
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Consolidated Second-Quarter Financial Highlights
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Three months ended
December 31,
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Six months ended
December 31,
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(in thousands, except per share data)
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2016
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2015
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% Change
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2016
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2015
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% Change
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Net Revenue (a):
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Supply Chain Services:
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Net administrative fees
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$
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129,071
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$
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120,733
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7
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%
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$
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255,047
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$
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238,682
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7
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%
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Other services and support
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1,201
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1,040
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15
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%
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2,846
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1,859
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53
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%
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Services
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130,272
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121,773
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7
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%
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257,893
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240,541
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7
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%
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Products
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142,378
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81,316
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75
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%
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248,507
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159,097
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56
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%
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Total Supply Chain Services (a)
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272,650
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203,089
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34
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%
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506,400
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399,638
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27
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%
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Performance Services (a)
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85,850
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88,580
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(3
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)%
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165,372
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162,866
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2
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%
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Total (a)
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$
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358,500
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$
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291,669
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23
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%
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$
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671,772
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$
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562,504
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19
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%
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Net income
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$
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178,675
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$
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60,995
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193
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%
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$
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236,770
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$
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113,248
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109
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%
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Net income (loss) attributable to stockholders (c)
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$
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332,766
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$
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(54,383
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)
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nm
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$
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403,068
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$
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416,771
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(3
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)%
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Adjusted net income (loss) (b) (c)
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$
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154,695
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$
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(54,383
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)
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nm
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$
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191,839
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$
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88,160
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118
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%
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Weighted average shares outstanding:
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Basic
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49,445
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41,575
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19
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%
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48,330
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39,655
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22
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%
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Diluted
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141,308
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41,575
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240
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%
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142,133
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145,927
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(3
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)%
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Earnings (loss) per share attributable to stockholders:
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Basic
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$
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6.73
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$
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(1.31
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)
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nm
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$
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8.34
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$
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10.51
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(21
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)%
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Diluted (b) (c)
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$
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1.09
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$
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(1.31
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nm
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$
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1.35
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$
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0.60
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125
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%
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NON-GAAP MEASURES:
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Adjusted EBITDA (a) (d):
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Supply Chain Services
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$
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119,022
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$
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107,989
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10
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%
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$
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236,326
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$
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210,938
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12
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%
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Performance Services
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28,603
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34,462
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(17
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)%
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50,914
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59,387
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(14
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)%
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Total segment adjusted EBITDA
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147,625
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142,451
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4
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%
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287,240
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270,325
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6
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%
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Corporate
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(25,616
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(26,396
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3
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%
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(54,458
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(49,273
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(11
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)%
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Total (a)
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$
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122,009
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$
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116,055
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5
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%
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$
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232,782
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$
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221,052
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5
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%
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Adjusted fully distributed net income (d)
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$
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65,242
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$
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61,747
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6
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%
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$
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124,170
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$
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117,770
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5
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%
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Earnings per share on adjusted fully distributed net income -
diluted (a) (d)
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$
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0.46
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$
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0.42
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10
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%
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$
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0.87
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$
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0.81
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7
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%
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(a) Bolded measures correspond to company guidance.
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(b) Adjusted net income is used to calculate diluted earnings per
share and is derived from net income, adjusted for the tax expense
related to Premier Inc. retaining the portion of net income
attributable to income from non-controlling interest in Premier, LP.
See "Calculation of GAAP Earnings per Share" in the income statement
section of this press release for explanation of numerators and
denominators used to calculate basic and diluted EPS.
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(c) Due to the net loss attributable to stockholders during the
three months ended December 31, 2015, diluted earnings per share is
equal to basic earnings per share.
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(d) See attached supplemental financial information for
reconciliation of reported GAAP results to Non-GAAP results.
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nm = not meaningful
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For the fiscal second-quarter ended December 31, 2016, Premier generated
net revenue of $358.5 million, an increase of 23%, from net revenue of
$291.7 million for the same period a year ago.
Net income for the fiscal second-quarter was $178.7 million, compared
with $61.0 million for the same period a year ago. The increase is
primarily due to growth in the company's historical Supply Chain
Services business, as well as acquisition contributions within the
Supply Chain Services segment. In accordance with GAAP, fiscal 2017 and
2016 second-quarter net income attributable to stockholders included
non-cash adjustments of $285.2 million and $(65.6) million,
respectively, to reflect the change in the redemption value of limited
partners' Class B common unit ownership at the end of each period. These
non-cash adjustments result primarily from changes in the number of
Class B common shares and the company's stock price between periods and
do not reflect results of the company's business operations. After these
non-cash adjustments, the company reported net income attributable to
stockholders of $332.8 million, compared with a net loss of $54.4
million. Second-quarter diluted earnings per share, which is based on
net income adjusted for the tax expense related to Premier Inc.
retaining the portion of net income attributable to income from
non-controlling interest in Premier LP, was $1.09, compared with a net
loss of $1.31 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 of $122.0 million
increased 5% from $116.1 million for the same period the prior year.
Adjusted EBITDA growth was primarily driven by an increase in the
company's Supply Chain Services revenue, and to a lesser degree by a
slight decrease in corporate expenses, partially offset by a decline in
Performance Services adjusted EBITDA.
Non-GAAP adjusted fully distributed net income for the fiscal
second-quarter increased 6% to $65.2 million from $61.7 million for the
same period a year ago. Adjusted fully distributed earnings per share
increased to $0.46 from $0.42 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 December 31, 2016, the Supply Chain
Services segment generated net revenue of $272.7 million, an increase of
34% from $203.1 million a year ago. The revenue increase was driven by
growth in the company's group purchasing organization (GPO) and products
businesses. GPO net administrative fees revenue of $129.1 million
increased 7% from a year ago, driven primarily by improved contract
penetration of existing members and also the ongoing positive impact of
conversion of newer members. An additional $5.6 million cash
contribution from Innovatix and Essensa was unable to be recognized as
revenue due to the purchase accounting adjustment. Under the company's
GAAP revenue recognition accounting policy, these administrative fees
would be ordinarily recorded as revenue when reported to the company;
however, the acquisition method of accounting requires Premier to
estimate the amount of purchases occurring prior to the transaction date
and to record the fair value of the administrative fees to be received
from those purchases as an account receivable (as opposed to recognizing
revenue when these transactions are reported to the company) and record
any corresponding revenue share obligation as a liability. Product
revenues of $142.4 million increased 75% from a year ago due to a
contribution of $56.5 million from the Acro Pharmaceutical Services
business acquired in August 2016 and the ongoing expansion of the
company's existing integrated pharmacy and direct sourcing businesses.
These increases were partially offset by the continuing industry-wide
decline in specialty pharmacy revenues associated with the treatment of
Hepatitis C, as well as by lower-than-expected revenue from Acro related
to market controls imposed by the manufacturer of a limited distribution
drug and to a delay in obtaining reissuance of a dispensing license in
California following acquisition, both of which have now been remediated.
Supply Chain Services segment adjusted EBITDA of $119.0 million for the
fiscal 2017 second-quarter increased 10% from $108.0 million for the
same period a year ago. The increase primarily reflects growth in net
administrative fees revenue, augmented by contributions from the recent
acquisitions and investments, including a non-GAAP adjustment, in the
amount of $5.6 million, for cash collections from Innovatix and Essensa
which were unable to be recognized as GAAP revenue due to the purchase
accounting adjustment.
Performance Services
For the fiscal second-quarter ended December 31, 2016, the Performance
Services segment generated net revenue of $85.9 million, a decrease of
3% from $88.6 million for the same quarter last year, primarily due to a
decrease in advisory services revenue from the prior year. Advisory
services business revenue was impacted by the timing of engagements
compared to the prior year. Management continues to expect Performance
Services to produce full fiscal-year revenue growth of 7% to 13% from
the prior year.
Performance Services segment adjusted EBITDA of $28.6 million for the
fiscal 2017 second-quarter decreased 17% from $34.5 million for the same
quarter last year. Growth was impacted as a result of the revenue
decrease in the quarter and an increase in cost of sales, primarily
related to higher labor and consulting costs associated with specific
contracts.
Results of Operations for the Six Months Ended December 31, 2016
For the six months ended December 31, 2016, Premier generated net
revenue of $671.8 million, a 19% increase from net revenue of $562.5
million for the same period a year ago.
Net income for the six-month period totaled $236.8 million, compared
with $113.2 million for the same period a year ago. Fiscal 2017 and 2016
six-month net income attributable to stockholders required non-cash
adjustments of $347.0 million and $401.2 million, respectively, to
reflect changes in redemption value of the limited partners Class B
common unit ownership at the end of each period. These non-cash
adjustments result from changes in the company's stock price between
periods and do not reflect results of the company's business operations.
After these non-cash adjustments based on the changes in stock price,
the company reported net income attributable to stockholders of $1.35
per fully diluted share, compared with a net income attributable to
stockholders of $0.60 per share a year ago. (See income statement in
the tables section of this press release.)
For the six months ended December 31, 2016, non-GAAP adjusted EBITDA of
$232.8 million increased 5% from $221.1 million for the same period last
year. Non-GAAP adjusted fully distributed net income for the six months
rose 5% to $124.2 million, or $0.87 per fully diluted share, from $117.8
million, or $0.81 per fully diluted share, for the same period a year
ago.
Supply Chain Services segment net revenue for the six months of fiscal
2017 increased 27% to $506.4 million from $399.6 million a year earlier.
Supply Chain Services segment adjusted EBITDA increased 12% to $236.3
million from $210.9 million for the prior year.
Performance Services segment net revenue for the six months of fiscal
2017 increased 2% to $165.4 million from $162.9 million a year earlier,
while segment adjusted EBITDA decreased 14% to $50.9 million from $59.4
million primarily as a result of the timing of revenue recognition on
certain engagements.
Cash Flows and Liquidity
Cash provided by operating activities was $138.4 million for the
six-month period ended December 31, 2016, compared with $134.7 million
for the same period last year. The increase in cash flow from operations
primarily results from higher net income particularly from growth in net
administrative fees. At December 31, 2016, the company's cash and cash
equivalents totaled $218.9 million, compared with $156.0 million in
cash, cash equivalents, and short- and long-term marketable securities
at September 30, 2016. The increase in cash, cash equivalents and short-
and long-term marketable securities, compared with last quarter,
primarily results from cash generated from operations. At December 31,
2016, there was $327.5 million drawn on the company's unsecured $750
million, five-year revolving credit facility for the acquisition of
Innovatix and Essensa, the settlement of a portion of the October 31,
2016 quarterly Class B common unit exchange for cash, and general
corporate purposes.
Subsequent to quarter end, Premier used a combination of $23.3 million
in available cash and Class A shares of common stock to settle the
January 31, 2017 quarterly member unit exchange, repurchasing 776,664
Class B units for cash and exchanging 520,018 Class B units on a
one-for-one basis for shares of Class A shares of common stock. The
company also used $97.5 million in borrowings under its long-term credit
facility to pay the balance of the purchase price for the acquisitions
of Innovatix and Essensa. On February 1, 2017, the company repaid $50.0
million of outstanding borrowings under the credit facility.
Non-GAAP free cash flow for the fiscal second-quarter ended December 31,
2016 was $57.0 million, compared with free cash flow of $67.2 million
for the same period a year ago. The decrease in free cash flow from the
same period a year ago resulted from a higher level of working capital
required in the quarter, partially offset by a decrease in capital
expenditures and an increase in cash net income. (See free cash flow
definition in "Use and Definition of Non-GAAP Financial Measures," and
reconciliation to net cash provided by operating activities is provided
in the tables section of this press release.)
Fiscal 2017 Outlook and Guidance
Based on results for the six months ended December 31, 2016 and
management's current expectations for the remainder of fiscal 2017, the
company affirms its full fiscal-year 2017 financial guidance range for
Performance Services segment revenue, non-GAAP adjusted EBITDA and
non-GAAP adjusted fully distributed earnings per share. Supply Chain
Services and consolidated net revenue guidance is being revised downward
by $20 million, based solely on the non-cash purchase accounting
adjustment to net administrative fees revenue related to the December
2016 Innovatix and Essensa acquisition. Approximately $5.6 million of
the estimated $20 million adjustment was recorded in the fiscal second
quarter, and management expects the bulk of the remainder of the
adjustment to be recorded in its fiscal third quarter. The company has
added the impact of the Innovatix and Essensa-related GAAP revenue
reduction to non-GAAP adjusted EBITDA, non-GAAP adjusted fully
distributed net income and non-GAAP adjusted fully distributed earnings
per share, as the purchase accounting adjustment is non-cash and
non-recurring and thus aligns with the company's existing non-GAAP
financial measure definitions.
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Fiscal 2017 Financial Guidance (1)
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Premier, Inc. adjusts full-year fiscal 2017 financial guidance, as
follows:
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Current*
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Previous
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(In millions, except per share data)
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FY 2017
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% YoY Increase
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FY 2017
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Net Revenue:
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Supply Chain Services segment
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$1,129.0 - $1,180.0
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36% - 42%
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$1,149.0 - $1,200.0
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Performance Services segment
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$355.0 - $375.0
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7% - 13%
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$355.0 - $375.0
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Total Net Revenue
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$1,484.0 - $1,550.0
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28% - 34%
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$1,504.0 - $1,575.0
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Non-GAAP adjusted EBITDA
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$493.0 - $521.0
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12% - 18%
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$493.0 - $521.0
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Non-GAAP adjusted fully distributed EPS
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$1.80 - $1.93
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13% - 21%
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$1.80 - $1.93
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* Guidance adjustments as of February 6, 2017 pertain to Supply
Chain Services net revenue and total net revenue, which are reduced
as noted in the table based on a purchase accounting adjustment to
administrative fees revenue related to the December 2016
Innovatix/Essensa acquisition. The company affirms previous guidance
for Performance Services revenue, non-GAAP adjusted EBITDA and
non-GAAP adjusted fully distributed EPS.
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(1) 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 because of 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 company's
stock price between quarters, which the company cannot predict,
control or reasonably estimate.
• Reasonable guidance cannot be provided for earnings per share
attributable to stockholders because the ongoing quarterly
member-owner exchange of Class B common stock and corresponding
Class B units into shares of Class A common stock impacts the
number of shares of Class A common stock outstanding each quarter,
which the company cannot predict, control or reasonably estimate.
Member owners have the right, but not the obligation, to exchange
shares on a quarterly basis.
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Conference Call
Premier management will host a conference call and live audio webcast on
Monday, February 6, 2017, at 5:00 p.m. ET, to discuss the company's
financial results. The conference call can be accessed through a link
provided on the investor relations page on Premier's website at investors.premierinc.com.
Those wanting to participate by phone may do so by dialing 844.296.7719
and providing the operator with conference ID number: 51371916.
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 approximately 3,750 U.S. hospitals and more than
130,000 other providers to transform healthcare. With integrated data
and analytics, collaboratives, supply chain solutions, and advisory and
other services, Premier enables better care and outcomes at a lower
cost. Premier, a Malcolm Baldrige National Quality Award recipient,
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,
Foursquare
and Premier's
blog for more information about the company.
Use and Definition of Non-GAAP Financial Measures
Premier uses EBITDA, adjusted EBITDA, segment adjusted EBITDA, adjusted
fully distributed net income, adjusted fully distributed earnings per
share, and free cash flow to facilitate a comparison of the company's
operating performance on a consistent basis from period to period and to
provide measures that, when viewed in combination with its results
prepared in accordance with GAAP, allow for a more complete
understanding of factors and trends affecting the company's business
than GAAP measures alone. The company believes adjusted EBITDA and
segment adjusted EBITDA assist its board of directors, management and
investors in comparing the company's operating performance on a
consistent basis from period to period by removing the impact of the
company's asset base (primarily depreciation and amortization) and items
outside the control of management (taxes), as well as other non-cash
(impairment of intangible assets and purchase accounting adjustments)
and non-recurring items, from operating results. Non-recurring items are
income or expenses or other items that have not been earned or incurred
within the prior two years and are not expected to recur within the next
two years. Such items include certain strategic and financial
restructuring expenses.
In addition, adjusted fully distributed net income eliminates the
variability of non-controlling interest as a result of member owner
exchanges of Class B common stock and corresponding Class B units into
shares of Class A common stock (which exchanges are a member owner's
cumulative right, but not obligation, which began on October 31, 2014,
and occur each quarter thereafter, and are limited to one-seventh of the
member owner's initial allocation of Class B common units per year) 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.
EBITDA is defined as net income before interest and investment income,
net, income tax expense, depreciation and amortization and amortization
of purchased intangible assets. Adjusted EBITDA is defined as EBITDA
before merger and acquisition related expenses and non-recurring,
non-cash or non-operating items, and including equity in net income of
unconsolidated affiliates. Non-recurring items include certain strategic
and financial restructuring expenses. Non-operating items include gain
or loss on the disposal of assets. Segment adjusted EBITDA is defined as
the segment's net revenue less cost of revenue and operating expenses
directly attributable to the segment, excluding depreciation and
amortization, amortization of purchased intangible assets, merger and
acquisition related expenses and non-recurring or non-cash items, and
including equity in net income of unconsolidated affiliates. Operating
expenses directly attributable to the segment include expenses
associated with sales and marketing, general and administrative and
product development activities specific to the operation of each
segment. General and administrative corporate expenses that are not
specific to a particular segment are not included in the calculation of
segment adjusted EBITDA. Adjusted EBITDA is a supplemental financial
measure used by the company and by external users of the company's
financial statements.
Management considers adjusted EBITDA an indicator of the operational
strength and performance of the company's business. Adjusted EBITDA
allows management to assess performance without regard to financing
methods and capital structure and without the impact of other matters
that management does not consider indicative of the operating
performance of the business. Segment adjusted EBITDA is the primary
earnings measure used by management to evaluate the performance of the
company's business segments.
Free cash flow is defined as net cash provided by operating activities
less distributions and tax receivable agreement payments to limited
partners and purchases of property and equipment. 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.
Forward-Looking Statements
Statements made in this release that are not statements of historical or
current facts, such as those related to expected financial growth trends
in our Performance Services business, expected revenue from our
integrated information technology solutions and advisory services, the
statements related to fiscal 2017 outlook and guidance and the
affirmation or revision of previously provided 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, 2016 filed with the SEC
on August 26, 2016 and Form 10-Q for the fiscal quarter ended December
31, 2016, expected to be filed with the SEC shortly after the date of
this release, and also made available on Premier's website at investors.premierinc.com.
Forward-looking statements speak only as of the date they are made, and
Premier undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information or
future events that occur after that date, or otherwise.
|
Condensed Consolidated Statements of Income
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Six months ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Net revenue:
|
|
|
|
|
|
|
|
|
Net administrative fees
|
|
$
|
129,071
|
|
|
$
|
120,733
|
|
|
$
|
255,047
|
|
|
$
|
238,682
|
|
Other services and support
|
|
|
87,051
|
|
|
|
89,620
|
|
|
|
168,218
|
|
|
|
164,725
|
|
Services
|
|
|
216,122
|
|
|
|
210,353
|
|
|
|
423,265
|
|
|
|
403,407
|
|
Products
|
|
|
142,378
|
|
|
|
81,316
|
|
|
|
248,507
|
|
|
|
159,097
|
|
Net revenue
|
|
|
358,500
|
|
|
|
291,669
|
|
|
|
671,772
|
|
|
|
562,504
|
|
Cost of revenue:
|
|
|
|
|
|
|
|
|
Services
|
|
|
44,856
|
|
|
|
40,492
|
|
|
|
87,546
|
|
|
|
78,616
|
|
Products
|
|
|
131,158
|
|
|
|
72,105
|
|
|
|
226,971
|
|
|
|
143,104
|
|
Cost of revenue
|
|
|
176,014
|
|
|
|
112,597
|
|
|
|
314,517
|
|
|
|
221,720
|
|
Gross profit
|
|
|
182,486
|
|
|
|
179,072
|
|
|
|
357,255
|
|
|
|
340,784
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
Selling, general and administrative
|
|
|
95,927
|
|
|
|
99,284
|
|
|
|
188,165
|
|
|
|
186,222
|
|
Research and development
|
|
|
767
|
|
|
|
424
|
|
|
|
1,573
|
|
|
|
880
|
|
Amortization of purchased intangible assets
|
|
|
11,151
|
|
|
|
9,271
|
|
|
|
20,360
|
|
|
|
15,318
|
|
Operating expenses
|
|
|
107,845
|
|
|
|
108,979
|
|
|
|
210,098
|
|
|
|
202,420
|
|
Operating income
|
|
|
74,641
|
|
|
|
70,093
|
|
|
|
147,157
|
|
|
|
138,364
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
204,833
|
|
|
|
-
|
|
|
|
204,833
|
|
|
|
-
|
|
Equity in net income of unconsolidated affiliates
|
|
|
5,127
|
|
|
|
4,785
|
|
|
|
14,706
|
|
|
|
9,375
|
|
Interest and investment income (loss), net
|
|
|
(857
|
)
|
|
|
(937
|
)
|
|
|
(1,009
|
)
|
|
|
(696
|
)
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,518
|
)
|
|
|
-
|
|
Other income (expense), net
|
|
|
(131
|
)
|
|
|
(272
|
)
|
|
|
875
|
|
|
|
(2,081
|
)
|
Other income, net
|
|
|
208,972
|
|
|
|
3,576
|
|
|
|
217,887
|
|
|
|
6,598
|
|
Income before income taxes
|
|
|
283,613
|
|
|
|
73,669
|
|
|
|
365,044
|
|
|
|
144,962
|
|
Income tax expense
|
|
|
104,938
|
|
|
|
12,674
|
|
|
|
128,274
|
|
|
|
31,714
|
|
Net income
|
|
|
178,675
|
|
|
|
60,995
|
|
|
|
236,770
|
|
|
|
113,248
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
(131,117
|
)
|
|
|
(49,817
|
)
|
|
|
(180,718
|
)
|
|
|
(97,717
|
)
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
285,208
|
|
|
|
(65,561
|
)
|
|
|
347,016
|
|
|
|
401,240
|
|
Net income (loss) attributable to stockholders
|
|
$
|
332,766
|
|
|
$
|
(54,383
|
)
|
|
$
|
403,068
|
|
|
$
|
416,771
|
|
|
|
|
|
|
|
|
|
|
Calculation of GAAP Earnings (Loss) per Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
$
|
332,766
|
|
|
$
|
(54,383
|
)
|
|
$
|
403,068
|
|
|
$
|
416,771
|
|
|
|
|
|
|
|
|
|
|
Numerator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to stockholders
|
|
|
332,766
|
|
|
|
(54,383
|
)
|
|
|
403,068
|
|
|
|
416,771
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
(285,208
|
)
|
|
|
-
|
|
|
|
(347,016
|
)
|
|
|
(401,240
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
131,117
|
|
|
|
-
|
|
|
|
180,718
|
|
|
|
97,717
|
|
Net income (loss)
|
|
|
178,675
|
|
|
|
(54,383
|
)
|
|
|
236,770
|
|
|
|
113,248
|
|
Tax effect on Premier Inc. net income (a)
|
|
|
(23,980
|
)
|
|
|
-
|
|
|
|
(44,931
|
)
|
|
|
(25,088
|
)
|
Adjusted net income (loss)
|
|
$
|
154,695
|
|
|
$
|
(54,383
|
)
|
|
$
|
191,839
|
|
|
$
|
88,160
|
|
|
|
|
|
|
|
|
|
|
Denominator for basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Weighted average shares (b)
|
|
|
49,445
|
|
|
|
41,575
|
|
|
|
48,330
|
|
|
|
39,655
|
|
|
|
|
|
|
|
|
|
|
Denominator for diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
Weighted average shares - basic
|
|
|
49,445
|
|
|
|
41,575
|
|
|
|
48,330
|
|
|
|
39,655
|
|
Effect of dilutive stock based awards: (c)
|
|
|
401
|
|
|
|
-
|
|
|
|
437
|
|
|
|
2,129
|
|
Class B shares outstanding
|
|
|
91,462
|
|
|
|
-
|
|
|
|
93,366
|
|
|
|
104,143
|
|
Weighted average shares and assumed conversions
|
|
|
141,308
|
|
|
|
41,575
|
|
|
|
142,133
|
|
|
|
145,927
|
|
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per share
|
|
$
|
6.73
|
|
|
$
|
(1.31
|
)
|
|
$
|
8.34
|
|
|
$
|
10.51
|
|
Diluted earnings (loss) per share
|
|
$
|
1.09
|
|
|
$
|
(1.31
|
)
|
|
$
|
1.35
|
|
|
$
|
0.60
|
|
|
|
|
|
|
|
|
|
|
(a) Represents income tax expense related to Premier, Inc. retaining
the portion of net income attributable to income from
non-controlling interest in Premier, LP for the purpose of diluted
earnings per share.
|
(b) Weighted average number of common shares used for basic earnings
per share excludes weighted average shares of non-vested stock
options, non-vested restricted stock, non-vested performance share
awards and Class B shares outstanding for the three and six months
ended December 31, 2016 and 2015.
|
(c) For the three and six months ended December 31, 2016, the effect
of 1.9 million stock options, restricted stock units and performance
share awards were excluded from diluted weighted average shares
outstanding as they had an anti-dilutive effect. For the three
months ended December 31, 2015, the effect of 2.3 million stock
options, restricted stock units and performance share awards and
102.2 million Class B common units exchangeable for Class A common
shares were excluded from diluted weighted average shares
outstanding due to the net loss sustained for the quarter and as
including them would have been anti-dilutive for the period. For the
six months ended December 31, 2015, the effect of 1.2 million stock
options were excluded from diluted weighted average shares
outstanding as they have an anti-dilutive effect.
|
|
|
|
Condensed Consolidated Balance Sheets
|
(Unaudited)
|
(In thousands, except share data)
|
|
|
|
|
|
|
|
December 31, 2016
|
|
June 30, 2016
|
Assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
218,892
|
|
|
$
|
248,817
|
|
Marketable securities
|
|
|
-
|
|
|
|
17,759
|
|
Accounts receivable (net of $3,725 and $1,981 allowance for doubtful
accounts, respectively)
|
|
|
181,083
|
|
|
|
144,424
|
|
Inventory
|
|
|
65,690
|
|
|
|
29,121
|
|
Prepaid expenses and other current assets
|
|
|
45,674
|
|
|
|
19,646
|
|
Due from related parties
|
|
|
2,611
|
|
|
|
3,123
|
|
Total current assets
|
|
|
513,950
|
|
|
|
462,890
|
|
Marketable securities
|
|
|
-
|
|
|
|
30,130
|
|
Property and equipment (net of $288,565 and $265,751 accumulated
depreciation, respectively)
|
|
|
180,408
|
|
|
|
174,080
|
|
Intangible assets (net of $71,230 and $50,870 accumulated
amortization, respectively)
|
|
|
411,343
|
|
|
|
158,217
|
|
Goodwill
|
|
|
862,939
|
|
|
|
537,962
|
|
Deferred income tax assets
|
|
|
462,658
|
|
|
|
422,849
|
|
Deferred compensation plan assets
|
|
|
38,306
|
|
|
|
39,965
|
|
Investments in unconsolidated affiliates
|
|
|
98,795
|
|
|
|
16,800
|
|
Other assets
|
|
|
14,344
|
|
|
|
12,490
|
|
Total assets
|
|
$
|
2,582,743
|
|
|
$
|
1,855,383
|
|
|
|
|
|
|
Liabilities, redeemable limited partners' capital and
stockholders' deficit
|
|
|
|
Accounts payable
|
|
$
|
70,163
|
|
|
$
|
46,003
|
|
Accrued expenses
|
|
|
60,036
|
|
|
|
56,774
|
|
Revenue share obligations
|
|
|
69,183
|
|
|
|
63,603
|
|
Limited partners' distribution payable
|
|
|
22,733
|
|
|
|
22,493
|
|
Accrued compensation and benefits
|
|
|
42,090
|
|
|
|
60,425
|
|
Deferred revenue
|
|
|
52,156
|
|
|
|
54,498
|
|
Current portion of tax receivable agreements
|
|
|
13,912
|
|
|
|
13,912
|
|
Current portion of long-term debt
|
|
|
338,505
|
|
|
|
5,484
|
|
Deferred purchase price payable, acquisition of Innovatix, LLC and
Essensa Ventures, LLC
|
|
|
97,500
|
|
|
|
-
|
|
Other liabilities
|
|
|
25,417
|
|
|
|
2,871
|
|
Total current liabilities
|
|
|
791,695
|
|
|
|
326,063
|
|
Long-term debt, less current portion
|
|
|
6,999
|
|
|
|
13,858
|
|
Tax receivable agreements, less current portion
|
|
|
309,380
|
|
|
|
265,750
|
|
Deferred compensation plan obligations
|
|
|
38,306
|
|
|
|
39,965
|
|
Deferred tax liabilities
|
|
|
84,341
|
|
|
|
-
|
|
Other liabilities
|
|
|
46,262
|
|
|
|
23,978
|
|
Total liabilities
|
|
|
1,276,983
|
|
|
|
669,614
|
|
|
|
|
|
|
Redeemable limited partners' capital
|
|
|
2,720,009
|
|
|
|
3,137,230
|
|
Stockholders' deficit:
|
|
|
|
|
Class A common stock, $0.01 par value, 500,000,000 shares
authorized; 50,155,907 and 45,995,528 shares issued and outstanding
at December 31, 2016 and June 30, 2016, respectively
|
|
|
502
|
|
|
|
460
|
|
Class B common stock, $0.000001 par value, 600,000,000 shares
authorized; 89,761,541 and 96,132,723 shares issued and outstanding
at December 31, 2016 and June 30, 2016, respectively
|
|
|
-
|
|
|
|
-
|
|
Additional paid-in-capital
|
|
|
-
|
|
|
|
-
|
|
Accumulated deficit
|
|
|
(1,414,751
|
)
|
|
|
(1,951,878
|
)
|
Accumulated other comprehensive loss
|
|
|
-
|
|
|
|
(43
|
)
|
Total stockholders' deficit
|
|
|
(1,414,249
|
)
|
|
|
(1,951,461
|
)
|
Total liabilities, redeemable limited partners' capital and
stockholders' deficit
|
|
$
|
2,582,743
|
|
|
$
|
1,855,383
|
|
|
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
Six months ended
December 31,
|
|
|
2016
|
|
2015
|
Operating activities
|
|
|
|
|
Net income
|
|
$
|
236,770
|
|
|
$
|
113,248
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
Depreciation and amortization
|
|
|
48,576
|
|
|
|
39,382
|
|
Equity in net income of unconsolidated affiliates
|
|
|
(14,706
|
)
|
|
|
(9,375
|
)
|
Deferred income taxes
|
|
|
116,214
|
|
|
|
21,331
|
|
Stock-based compensation
|
|
|
12,066
|
|
|
|
25,022
|
|
Adjustment to tax receivable agreement liability
|
|
|
(5,722
|
)
|
|
|
(4,818
|
)
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
(204,833
|
)
|
|
|
-
|
|
Loss on disposal of long-lived assets
|
|
|
1,518
|
|
|
|
-
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
Accounts receivable, prepaid expenses and other current assets
|
|
|
(11,888
|
)
|
|
|
(26,245
|
)
|
Other assets
|
|
|
274
|
|
|
|
(10,853
|
)
|
Inventories
|
|
|
(31,832
|
)
|
|
|
2,814
|
|
Accounts payable, accrued expenses, and other current liabilities
|
|
|
(4,136
|
)
|
|
|
(12,376
|
)
|
Long-term liabilities
|
|
|
(4,100
|
)
|
|
|
(3,943
|
)
|
Other operating activities
|
|
|
163
|
|
|
|
540
|
|
Net cash provided by operating activities
|
|
|
138,364
|
|
|
|
134,727
|
|
Investing activities
|
|
|
|
|
Proceeds from sale of marketable securities
|
|
|
48,013
|
|
|
|
339,674
|
|
Purchase of marketable securities
|
|
|
-
|
|
|
|
(19,211
|
)
|
Acquisition of Innovatix, LLC and Essensa Ventures, LLC, net of cash
acquired
|
|
|
(222,217
|
)
|
|
|
-
|
|
Acquisition of Acro Pharmaceutical Services LLC and Community
Pharmacy Services, LLC, net of cash acquired
|
|
|
(68,745
|
)
|
|
|
-
|
|
Acquisition of CECity.com, Inc., net of cash acquired
|
|
|
-
|
|
|
|
(398,261
|
)
|
Acquisition of Healthcare Insights, LLC, net of cash acquired
|
|
|
-
|
|
|
|
(64,634
|
)
|
Acquisition of InFlow Health, LLC, net of cash acquired
|
|
|
-
|
|
|
|
(6,088
|
)
|
Investment in unconsolidated affiliates
|
|
|
(65,660
|
)
|
|
|
(1,000
|
)
|
Distributions received on equity investment
|
|
|
6,550
|
|
|
|
11,743
|
|
Purchases of property and equipment
|
|
|
(34,325
|
)
|
|
|
(38,882
|
)
|
Other investing activities
|
|
|
26
|
|
|
|
(5
|
)
|
Net cash used in investing activities
|
|
|
(336,358
|
)
|
|
|
(176,664
|
)
|
Financing activities
|
|
|
|
|
Proceeds from credit facility
|
|
|
327,500
|
|
|
|
150,000
|
|
Payments on credit facility
|
|
|
-
|
|
|
|
(50,000
|
)
|
Payments made on notes payable
|
|
|
(1,338
|
)
|
|
|
(1,336
|
)
|
Proceeds from exercise of stock options under equity incentive plan
|
|
|
2,909
|
|
|
|
237
|
|
Proceeds from issuance of Class A common stock under stock purchase
plan
|
|
|
1,256
|
|
|
|
1,302
|
|
Repurchase of vested restricted units for employee tax-withholding
|
|
|
(17,629
|
)
|
|
|
(46
|
)
|
Settlement of exchange of Class B shares by member owners
|
|
|
(99,999
|
)
|
|
|
-
|
|
Distributions to limited partners of Premier LP
|
|
|
(44,630
|
)
|
|
|
(45,461
|
)
|
Final remittance of net income attributable to former S2S Global
minority shareholder
|
|
|
-
|
|
|
|
(1,890
|
)
|
Other financing activities
|
|
|
-
|
|
|
|
19
|
|
Net cash provided by financing activities
|
|
|
168,069
|
|
|
|
52,825
|
|
Net increase (decrease) in cash and cash equivalents
|
|
|
(29,925
|
)
|
|
|
10,888
|
|
Cash and cash equivalents at beginning of year
|
|
|
248,817
|
|
|
|
146,522
|
|
Cash and cash equivalents at end of period
|
|
$
|
218,892
|
|
|
$
|
157,410
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information - Reporting of Non-GAAP Free
Cash Flow
|
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
|
Six months ended
December 31,
|
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Cash Provided by Operating Activities to
Non-GAAP Free Cash Flow:
|
|
|
Net cash provided by operating activities
|
|
$
|
96,537
|
|
|
$
|
112,008
|
|
|
|
$
|
138,364
|
|
|
$
|
134,727
|
|
Purchases of property and equipment
|
|
|
(17,359
|
)
|
|
|
(21,741
|
)
|
|
|
|
(34,325
|
)
|
|
|
(38,882
|
)
|
Distributions to limited partners of Premier LP
|
|
|
(22,137
|
)
|
|
|
(23,029
|
)
|
|
|
|
(44,630
|
)
|
|
|
(45,461
|
)
|
Non-GAAP Free Cash Flow
|
|
$
|
57,041
|
|
|
$
|
67,238
|
|
|
|
$
|
59,409
|
|
|
$
|
50,384
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Financial Information - Reporting of Adjusted EBITDA
|
and Non-GAAP Adjusted Fully Distributed Net Income
|
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|
(Unaudited)
|
(In thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Six months ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income to Adjusted EBITDA and
Reconciliation of Operating Income to Segment Adjusted EBITDA:
|
|
Net income
|
|
$
|
178,675
|
|
|
$
|
60,995
|
|
|
$
|
236,770
|
|
|
$
|
113,248
|
|
Interest and investment loss (income), net
|
|
|
857
|
|
|
|
937
|
|
|
|
1,009
|
|
|
|
696
|
|
Income tax expense
|
|
|
104,938
|
|
|
|
12,674
|
|
|
|
128,274
|
|
|
|
31,714
|
|
Depreciation and amortization
|
|
|
14,198
|
|
|
|
12,199
|
|
|
|
28,216
|
|
|
|
24,064
|
|
Amortization of purchased intangible assets
|
|
|
11,151
|
|
|
|
9,271
|
|
|
|
20,360
|
|
|
|
15,318
|
|
EBITDA
|
|
|
309,819
|
|
|
|
96,076
|
|
|
|
414,629
|
|
|
|
185,040
|
|
Stock-based compensation (a)
|
|
|
6,423
|
|
|
|
11,554
|
|
|
|
12,319
|
|
|
|
25,254
|
|
Acquisition related expenses
|
|
|
4,216
|
|
|
|
5,644
|
|
|
|
7,153
|
|
|
|
9,116
|
|
Strategic and financial restructuring expenses
|
|
|
-
|
|
|
|
208
|
|
|
|
-
|
|
|
|
235
|
|
Adjustment to tax receivable agreement liability
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,722
|
)
|
|
|
(4,818
|
)
|
ERP implementation expenses
|
|
|
432
|
|
|
|
1,518
|
|
|
|
1,526
|
|
|
|
2,078
|
|
Acquisition related adjustment - revenue
|
|
|
5,813
|
|
|
|
1,047
|
|
|
|
5,964
|
|
|
|
4,139
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
(204,833
|
)
|
|
|
-
|
|
|
|
(204,833
|
)
|
|
|
-
|
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
-
|
|
|
|
1,518
|
|
|
|
-
|
|
Other expense
|
|
|
139
|
|
|
|
8
|
|
|
|
228
|
|
|
|
8
|
|
Adjusted EBITDA
|
|
$
|
122,009
|
|
|
$
|
116,055
|
|
|
$
|
232,782
|
|
|
$
|
221,052
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
$
|
283,613
|
|
|
$
|
73,669
|
|
|
$
|
365,044
|
|
|
$
|
144,962
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
(204,833
|
)
|
|
|
-
|
|
|
|
(204,833
|
)
|
|
|
-
|
|
Equity in net income of unconsolidated affiliates
|
|
|
(5,127
|
)
|
|
|
(4,785
|
)
|
|
|
(14,706
|
)
|
|
|
(9,375
|
)
|
Interest and investment loss (income), net
|
|
|
857
|
|
|
|
937
|
|
|
|
1,009
|
|
|
|
696
|
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
-
|
|
|
|
1,518
|
|
|
|
-
|
|
Other expense (income), net
|
|
|
131
|
|
|
|
272
|
|
|
|
(875
|
)
|
|
|
2,081
|
|
Operating income
|
|
|
74,641
|
|
|
|
70,093
|
|
|
|
147,157
|
|
|
|
138,364
|
|
Depreciation and amortization
|
|
|
14,198
|
|
|
|
12,199
|
|
|
|
28,216
|
|
|
|
24,064
|
|
Amortization of purchased intangible assets
|
|
|
11,151
|
|
|
|
9,271
|
|
|
|
20,360
|
|
|
|
15,318
|
|
Stock-based compensation (a)
|
|
|
6,423
|
|
|
|
11,554
|
|
|
|
12,319
|
|
|
|
25,254
|
|
Acquisition related expenses
|
|
|
4,216
|
|
|
|
5,644
|
|
|
|
7,153
|
|
|
|
9,116
|
|
Strategic and financial restructuring expenses
|
|
|
-
|
|
|
|
208
|
|
|
|
-
|
|
|
|
235
|
|
Adjustment to tax receivable agreement liability
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,722
|
)
|
|
|
(4,818
|
)
|
ERP implementation expenses
|
|
|
432
|
|
|
|
1,518
|
|
|
|
1,526
|
|
|
|
2,078
|
|
Acquisition related adjustment - revenue
|
|
|
5,813
|
|
|
|
1,047
|
|
|
|
5,964
|
|
|
|
4,139
|
|
Equity in net income of unconsolidated affiliates
|
|
|
5,127
|
|
|
|
4,785
|
|
|
|
14,706
|
|
|
|
9,375
|
|
Deferred compensation plan income (expense)
|
|
|
8
|
|
|
|
(264
|
)
|
|
|
1,103
|
|
|
|
(2,073
|
)
|
Adjusted EBITDA
|
|
$
|
122,009
|
|
|
$
|
116,055
|
|
|
$
|
232,782
|
|
|
$
|
221,052
|
|
|
|
|
|
|
|
|
|
|
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
Supply Chain Services
|
|
$
|
119,022
|
|
|
$
|
107,989
|
|
|
$
|
236,326
|
|
|
$
|
210,938
|
|
Performance Services
|
|
|
28,603
|
|
|
|
34,462
|
|
|
|
50,914
|
|
|
|
59,387
|
|
Corporate
|
|
|
(25,616
|
)
|
|
|
(26,396
|
)
|
|
|
(54,458
|
)
|
|
|
(49,273
|
)
|
Adjusted EBITDA
|
|
$
|
122,009
|
|
|
$
|
116,055
|
|
|
$
|
232,782
|
|
|
$
|
221,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Net Income (Loss) Attributable to
Stockholders to Non-GAAP Adjusted Fully Distributed Net Income:
|
|
Net income (loss) attributable to stockholders
|
|
$
|
332,766
|
|
|
$
|
(54,383
|
)
|
|
$
|
403,068
|
|
|
$
|
416,771
|
|
Adjustment of redeemable partners' capital to redemption amount
|
|
|
(285,208
|
)
|
|
|
65,561
|
|
|
|
(347,016
|
)
|
|
|
(401,240
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
131,117
|
|
|
|
49,817
|
|
|
|
180,718
|
|
|
|
97,717
|
|
Income tax expense
|
|
|
104,938
|
|
|
|
12,674
|
|
|
|
128,274
|
|
|
|
31,714
|
|
Amortization of purchased intangible assets
|
|
|
11,151
|
|
|
|
9,271
|
|
|
|
20,360
|
|
|
|
15,318
|
|
Stock-based compensation (a)
|
|
|
6,423
|
|
|
|
11,554
|
|
|
|
12,319
|
|
|
|
25,254
|
|
Acquisition related expenses
|
|
|
4,216
|
|
|
|
5,644
|
|
|
|
7,153
|
|
|
|
9,116
|
|
Strategic and financial restructuring expenses
|
|
|
-
|
|
|
|
208
|
|
|
|
-
|
|
|
|
235
|
|
Adjustment to tax receivable agreement liability
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,722
|
)
|
|
|
(4,818
|
)
|
ERP implementation expenses
|
|
|
432
|
|
|
|
1,518
|
|
|
|
1,526
|
|
|
|
2,078
|
|
Acquisition related adjustment - revenue
|
|
|
5,813
|
|
|
|
1,047
|
|
|
|
5,964
|
|
|
|
4,139
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
(204,833
|
)
|
|
|
-
|
|
|
|
(204,833
|
)
|
|
|
-
|
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
-
|
|
|
|
1,518
|
|
|
|
-
|
|
Other expense
|
|
|
139
|
|
|
|
-
|
|
|
|
228
|
|
|
|
-
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
106,954
|
|
|
|
102,911
|
|
|
|
203,557
|
|
|
|
196,284
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
41,712
|
|
|
|
41,164
|
|
|
|
79,387
|
|
|
|
78,514
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
$
|
65,242
|
|
|
$
|
61,747
|
|
|
$
|
124,170
|
|
|
$
|
117,770
|
|
(a) In addition to non-cash employee stock-based compensation
expense, includes stock purchase plan expense of $0.2 million and
$0.1 million for the three months ended December 31, 2016 and 2015,
respectively, and $0.3 million and $0.2 million for the six months
ended December 31, 2016 and 2015, respectively.
|
|
|
|
Supplemental Financial Information - Reporting of Net Income and
Earnings Per Share
|
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|
(Unaudited)
|
(In thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
December 31,
|
|
Six months ended
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Reconciliation of numerator for GAAP EPS to Non-GAAP EPS on
Adjusted Fully Distributed Net Income:
|
|
Net income (loss) attributable to stockholders
|
|
$
|
332,766
|
|
|
$
|
(54,383
|
)
|
|
$
|
403,068
|
|
|
$
|
416,771
|
|
Adjustment of redeemable partners' capital to redemption amount
|
|
|
(285,208
|
)
|
|
|
65,561
|
|
|
|
(347,016
|
)
|
|
|
(401,240
|
)
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
131,117
|
|
|
|
49,817
|
|
|
|
180,718
|
|
|
|
97,717
|
|
Income tax expense
|
|
|
104,938
|
|
|
|
12,674
|
|
|
|
128,274
|
|
|
|
31,714
|
|
Amortization of purchased intangible assets
|
|
|
11,151
|
|
|
|
9,271
|
|
|
|
20,360
|
|
|
|
15,318
|
|
Stock-based compensation (a)
|
|
|
6,423
|
|
|
|
11,554
|
|
|
|
12,319
|
|
|
|
25,254
|
|
Acquisition related expenses
|
|
|
4,216
|
|
|
|
5,644
|
|
|
|
7,153
|
|
|
|
9,116
|
|
Strategic and financial restructuring expenses
|
|
|
-
|
|
|
|
208
|
|
|
|
-
|
|
|
|
235
|
|
Adjustment to tax receivable agreement liability
|
|
|
-
|
|
|
|
-
|
|
|
|
(5,722
|
)
|
|
|
(4,818
|
)
|
ERP implementation expenses
|
|
|
432
|
|
|
|
1,518
|
|
|
|
1,526
|
|
|
|
2,078
|
|
Acquisition related adjustment - revenue
|
|
|
5,813
|
|
|
|
1,047
|
|
|
|
5,964
|
|
|
|
4,139
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
(204,833
|
)
|
|
|
-
|
|
|
|
(204,833
|
)
|
|
|
-
|
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
-
|
|
|
|
1,518
|
|
|
|
-
|
|
Other expense
|
|
|
139
|
|
|
|
-
|
|
|
|
228
|
|
|
|
-
|
|
Non-GAAP adjusted fully distributed income before income taxes
|
|
|
106,954
|
|
|
|
102,911
|
|
|
|
203,557
|
|
|
|
196,284
|
|
Income tax expense on fully distributed income before income taxes
|
|
|
41,712
|
|
|
|
41,164
|
|
|
|
79,387
|
|
|
|
78,514
|
|
Non-GAAP Adjusted Fully Distributed Net Income
|
|
$
|
65,242
|
|
|
$
|
61,747
|
|
|
$
|
124,170
|
|
|
$
|
117,770
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of denominator for GAAP EPS to Non-GAAP
Adjusted Fully Distributed Earnings per Share:
|
|
Weighted Average:
|
|
|
|
|
|
|
|
|
Common shares used for basic and diluted earnings (loss) per share
|
|
|
49,445
|
|
|
|
41,575
|
|
|
|
48,330
|
|
|
|
39,655
|
|
Potentially dilutive shares
|
|
|
401
|
|
|
|
2,341
|
|
|
|
437
|
|
|
|
2,129
|
|
Conversion of Class B common units
|
|
|
91,462
|
|
|
|
102,178
|
|
|
|
93,366
|
|
|
|
104,143
|
|
Weighted average fully distributed shares outstanding - diluted
|
|
|
141,308
|
|
|
|
146,094
|
|
|
|
142,133
|
|
|
|
145,927
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP EPS to Non-GAAP Adjusted Fully
Distributed EPS:
|
|
|
|
|
GAAP earnings (loss) per share
|
|
$
|
6.73
|
|
|
$
|
(1.31
|
)
|
|
$
|
8.34
|
|
|
$
|
10.51
|
|
Adjustment of redeemable limited partners' capital to redemption
amount
|
|
|
(5.77
|
)
|
|
|
1.58
|
|
|
|
(7.18
|
)
|
|
|
(10.12
|
)
|
Impact of additions:
|
|
|
|
|
|
|
|
|
Net income attributable to non-controlling interest in Premier LP
|
|
|
2.65
|
|
|
|
1.20
|
|
|
|
3.74
|
|
|
|
2.46
|
|
Income tax expense
|
|
|
2.12
|
|
|
|
0.30
|
|
|
|
2.65
|
|
|
|
0.80
|
|
Amortization of purchased intangible assets
|
|
|
0.23
|
|
|
|
0.22
|
|
|
|
0.42
|
|
|
|
0.39
|
|
Stock-based compensation (a)
|
|
|
0.13
|
|
|
|
0.28
|
|
|
|
0.25
|
|
|
|
0.64
|
|
Acquisition related expenses
|
|
|
0.09
|
|
|
|
0.14
|
|
|
|
0.15
|
|
|
|
0.23
|
|
Strategic and financial restructuring expenses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.01
|
|
Adjustment to tax receivable agreement liability
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.12
|
)
|
|
|
(0.12
|
)
|
ERP implementation expenses
|
|
|
0.01
|
|
|
|
0.04
|
|
|
|
0.03
|
|
|
|
0.05
|
|
Acquisition related adjustment - revenue
|
|
|
0.12
|
|
|
|
0.02
|
|
|
|
0.12
|
|
|
|
0.10
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
|
|
(4.14
|
)
|
|
|
-
|
|
|
|
(4.24
|
)
|
|
|
-
|
|
Loss on disposal of long-lived assets
|
|
|
-
|
|
|
|
-
|
|
|
|
0.03
|
|
|
|
-
|
|
Impact of corporation taxes
|
|
|
(0.84
|
)
|
|
|
(0.99
|
)
|
|
|
(1.63
|
)
|
|
|
(1.98
|
)
|
Impact of increased share count
|
|
|
(0.87
|
)
|
|
|
(1.06
|
)
|
|
|
(1.69
|
)
|
|
|
(2.16
|
)
|
Non-GAAP Adjusted Fully Distributed Earnings Per Share
|
|
$
|
0.46
|
|
|
$
|
0.42
|
|
|
$
|
0.87
|
|
|
$
|
0.81
|
|
(a) In addition to non-cash employee stock-based compensation
expense, includes stock purchase plan expense of $0.2 million and
$0.1 million for the three months ended December 31, 2016 and 2015,
respectively, and $0.3 million and $0.2 million for the six months
ended December 31, 2016 and 2015, respectively.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170206006067/en/
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