Premier, Inc. (NASDAQ: PINC), a leading technology-driven
healthcare improvement company, today reported financial results
for the fiscal year 2022 third quarter ended March 31, 2022.
"As we expected, our fiscal 2022 third quarter results reflect
the continued normalization of our Supply Chain Service revenue
toward a pre-COVID-19 pandemic level," said Michael J. Alkire,
Premier's president and CEO. "Our Performance Services segment
results were affected by the timing of revenue during the quarter.
Notably, our core underlying businesses continued to deliver steady
growth."
"Based on our performance year to date and outlook for the
remainder of this fiscal year, we are increasing our fiscal 2022
adjusted earnings per share guidance to a range of $2.48 to $2.58,"
Alkire continued. "As we look ahead, we remain focused on meeting
the needs of our members and other customers by leveraging
technology solutions to help improve the delivery of healthcare and
reduce costs and executing our strategy to deliver long-term
sustainable growth."
Fiscal Third Quarter 2022 and Recent Highlights
(Financial comparisons are for fiscal third quarter of 2022 vs.
fiscal third quarter of 2021)
- GAAP net revenue decreased 26% to $347.8 million from $469.9
million a year ago.
- Supply Chain Services segment revenue decreased 32% to $250.9
million from $371.2 million a year ago.
- Performance Services segment revenue decreased 2% to $96.9
million from $98.7 million a year ago.
- GAAP net income decreased 24% to $39.1 million from $51.4
million a year ago.
- GAAP diluted earnings per share (EPS) decreased 18% to $0.32
from $0.39 per share a year ago.
- Adjusted EBITDA* of $112.2 million decreased 7% from $121.2
million a year ago.
- Adjusted net income* of $68.1 million decreased 13% from $78.5
million a year ago and adjusted EPS* decreased 11% to $0.57 from
$0.64 a year ago.
- For the nine months ended March 31, 2022, the company generated
cash flow from operations of $334.8 million and free cash flow* of
$201.9 million.
- During the nine months ended March 31, 2022, Premier
repurchased approximately 6.4 million shares of Class A common
stock for a total purchase price of $250.0 million, completing its
previously authorized $250.0 million stock repurchase program, and
paid aggregate dividends of approximately $72.9 million to holders
of its Class A common stock.
- On April 21, 2022, Premier's Board of Directors declared a
quarterly cash dividend of $0.20 per share, which is payable on
June 15, 2022, to stockholders of record as of June 1, 2022.
*Descriptions of consolidated and segment adjusted (non-GAAP)
financial measures and non-GAAP free cash flow are provided below
under “Use and Definition of Non-GAAP Financial Measures,” and
reconciliations are provided in the tables at the end of this
release.
Consolidated Fiscal 2022 Third-Quarter
Financial Highlights and Results of Operations
Consolidated Financial
Highlights
Three Months Ended March
31,
Nine Months Ended March
31,
(in thousands, except per share data)
2022
2021
% Change
2022
2021
% Change
Net Revenue:
Supply Chain Services:
Net administrative fees
$
148,396
$
146,553
1
%
$
448,261
$
424,537
6
%
Other services and support
8,914
8,630
3
%
27,165
18,307
48
%
Services
157,310
155,183
1
%
475,426
442,844
7
%
Products
93,629
215,995
(57
)%
323,825
511,080
(37
)%
Total Supply Chain Services
250,939
371,178
(32
)%
799,251
953,924
(16
)%
Performance Services
96,903
98,745
(2
)%
292,962
285,713
3
%
Total segment net revenue
347,842
469,923
(26
)%
1,092,213
1,239,637
(12
)%
Eliminations
(9
)
—
—
%
(18
)
—
—
%
Net revenue
$
347,833
$
469,923
(26
)%
$
1,092,195
$
1,239,637
(12
)%
Net income
$
39,069
$
51,444
(24
)%
$
237,607
$
253,876
(6
)%
Net income attributable to
stockholders
$
38,415
$
48,321
(21
)%
$
235,964
$
211,288
12
%
Net income for diluted earnings per
share
$
38,415
$
48,321
(21
)%
$
237,607
$
211,288
12
%
Diluted earnings per share attributable to
stockholders
$
0.32
$
0.39
(18
)%
$
1.94
$
1.83
6
%
NON-GAAP FINANCIAL MEASURES*:
Adjusted EBITDA:
Supply Chain Services
$
118,034
$
117,949
—
%
$
381,586
$
339,538
12
%
Performance Services
26,552
35,950
(26
) %
89,277
109,675
(19
) %
Total segment adjusted EBITDA
144,586
153,899
(6
) %
470,863
449,213
5
%
Corporate
(32,398
)
(32,692
)
1
%
(94,956
)
(92,445
)
(3
) %
Total
$
112,188
$
121,207
(7
) %
$
375,907
$
356,768
5
%
Adjusted net income
$
68,098
$
78,535
(13
) %
$
235,444
$
232,023
1
%
Adjusted earnings per share
$
0.57
$
0.64
(11
) %
$
1.93
$
1.89
2
%
* Refer to the supplemental financial
information at the end of this release for reconciliation of
reported GAAP results to non-GAAP result.
Fiscal 2022 Outlook and Guidance
Certain statements in this release, including without
limitation, those in this section, are forward-looking statements.
For additional information regarding the use and limitations of
such statements, refer to "Forward-Looking Statements" below and
the "Risk Factors" section of the company's most recent Form 10-K
filed with the Securities and Exchange Commission ("SEC"), as
updated from time to time in the company's other filings with the
SEC including its Form 10-Q for the quarter ended March 31, 2022,
which the company expects to file with the SEC shortly after the
date of this release.
For fiscal 2022, Premier is:
- increasing its Supply Chain Services segment net revenue
guidance to a range of $1.02 billion to $1.03 billion from the
previous range of $1.0 billion to $1.02 billion;
- raising its guidance for total net revenue to a range of $1.41
billion to $1.45 billion from the previous range of $1.40 to $1.44
billion as a result of the increase to the Supply Chain Services
net revenue guidance;
- raising the bottom end of and narrowing the range for adjusted
EBITDA guidance to $490 million to $500 million from the prior
range of $483 to $500 million; and
- increasing adjusted EPS guidance to a range of $2.48 to $2.58
from its previous guidance of $2.45 to $2.55. Premier noted that
its adjusted EPS guidance includes the effect of 6.4 million in
share repurchases through March 31, 2022.
Guidance Metric
Fiscal 2022 Guidance Range*
(as of May 3, 2022)
Previous Fiscal 2022 Guidance
Range (as of February 1, 2022)
Segment Net Revenue:
Supply Chain Services
$1.02 billion to $1.03 billion
$1.0 billion to $1.02 billion
Performance Services
$395 million to $420 million
$395 million to $420 million
Total Net Revenue
$1.41 billion to $1.45 billion
$1.40 billion to $1.44 billion
Adjusted EBITDA
$490 million to $500 million
$483 million to $500 million
Adjusted EPS
$2.48 to $2.58
$2.45 to $2.55
Fiscal 2022 guidance assumes the realization of the following
key assumptions:
- Net administrative fees revenue of $580 million to $600 million
(unchanged from previous guidance)
- Direct sourcing products revenue of $385 million to $405
million (previously: $370 million to $390 million)
- Net revenue available under contract that represents
approximately 86% to 93% of the fiscal 2022 guidance range (as
provided on August 17, 2021)
- Capital expenditures of $85 million to $90 million (previously:
$90 million to $95 million)
- Effective income tax rate in the range of 24% to 26%
- Free cash flow of 45% to 55% of adjusted EBITDA (previously:
35% to 50% of adjusted EBITDA)
- Does not include the effect of any potential future significant
acquisitions
*The company does not provide forward-looking guidance on a GAAP
basis as certain financial information, the probable significance
of which cannot be determined, is not available and cannot be
reasonably estimated. Refer to "Premier's Use of Forward-Looking
Non-GAAP Measures" below for additional explanation.
Results of Operations for the Three Months Ended March 31,
2022 (As compared with the three months ended March 31,
2021)
GAAP net revenue of $347.8 million decreased 26% from $469.9
million for the same period a year ago primarily driven by
decreases in demand and pricing in the current year period for
personal protective equipment (PPE) and other high demand supplies
that were necessary to address the healthcare delivery needs of the
company's members in the prior year period as a result of the
COVID-19 pandemic.
GAAP net income of $39.1 million decreased 24% from $51.4
million a year ago primarily due to a decrease in Performance
Services revenue and an increase in selling, general and
administrative (SG&A) expenses due to lower capitalized labor
costs as well as continued investments to support growth in the
company's adjacent markets businesses which consist of RemitraTM,
Contigo Health®, PINC AITM Applied Sciences and PINC AITM Clinical
Decision Support.
GAAP diluted EPS of $0.32 decreased 18% from $0.39 in the same
period a year ago.
Adjusted EBITDA of $112.2 million decreased 7% from $121.2
million for the same period a year ago.
Adjusted net income of $68.1 million decreased 13% from $78.5
million for the same period a year ago. Adjusted earnings per share
decreased 11% to $0.57 from $0.64 for the same period a year
ago.
Segment Results (For the fiscal third quarter of 2022 as
compared with the fiscal third quarter of 2021)
Supply Chain Services
Supply Chain Services segment net revenue of $250.9 million
decreased 32% from $371.2 million for the same quarter a year
ago.
Net administrative fees revenue of $148.4 million increased $1.8
million, or 1%, from $146.6 million in the year ago quarter
primarily due to further penetration of existing member spend in
the quarter.
Products revenue of $93.6 million declined $122.4 million, or
57%, from $216.0 million a year ago, primarily driven by lower
demand and pricing, as the company expected, for personal
protective equipment (PPE) and other high demand supplies as a
result of the state of the COVID-19 pandemic relative to the prior
year quarter.
Segment adjusted EBITDA of $118.0 million was relatively flat
compared with $117.9 million for the same period a year ago
primarily due to a slight increase in net administrative fees
revenue that was partially offset by increased freight costs in the
company's direct sourcing business.
Performance Services
Performance Services segment net revenue of $96.9 million
decreased 2% from $98.7 million for the same quarter a year ago,
primarily driven by the timing of revenue associated with
enterprise analytics license agreements in the current year quarter
compared with the prior year quarter. Growth in the company's
consulting and adjacent markets businesses partially offset the
timing impact.
Segment adjusted EBITDA of $26.6 million decreased 26% from
$36.0 million for the same period a year ago mainly due to the
decrease in revenue as well as higher selling, general and
administrative expense primarily related to a decrease in
capitalized labor as well as additional headcount to support growth
in the company's adjacent markets businesses.
Results of Operations for the Nine Months Ended March 31,
2022 (As compared with the nine months ended March 31,
2021)
GAAP net revenue of $1,092.2 million decreased 12% from $1,239.6
million for the same period a year ago.
GAAP net income of $237.6 million decreased 6% from $253.9
million a year ago primarily due to the prior year period one-time
deferred tax benefit associated with the deferred tax asset
remeasurement as a result of the company's August 2020
restructuring and an increase in operating expenses. The decrease
was partially offset by the gain recognized as a result of the
termination of the put rights associated with Premier's minority
interest in FFF Enterprises, Inc. and an increase in gross profit
driven by increases in net administrative fees and Performance
Services revenue.
GAAP diluted EPS of $1.94 increased 6% from $1.83 in the same
period a year ago.
Adjusted EBITDA of $375.9 million increased 5% from $356.8
million for the same period a year ago.
Adjusted net income of $235.4 million increased 1% from $232.0
million for the same period a year ago. Adjusted earnings per share
increased 2% to $1.93 from $1.89 for the same period a year
ago.
Supply Chain Services segment net revenue of $799.3 million
decreased 16% from $953.9 million for the same period a year ago.
Segment adjusted EBITDA of $381.6 million increased 12% from $339.5
million for the same period a year ago.
Performance Services segment net revenue of $293.0 million
increased 3% from $285.7 million for the same period a year ago.
Segment adjusted EBITDA of $89.3 million decreased 19% from $109.7
million for the same period a year ago.
Cash Flows and Liquidity
Net cash provided by operating activities for the nine months
ended March 31, 2022 was $334.8 million, an increase of $142.4
million from the same period a year ago mainly due to a decrease in
cash outlays in the current year period due to the prior year
build-up in inventory to meet demand for PPE and other high-demand
supplies associated with the COVID-19 pandemic. This was partially
offset by a decrease in cash received as a result of lower revenue
in the direct sourcing business, the impact of higher
administrative fee-share payments to members in the current year
compared with the prior year, and an increase in cash outflows for
payments related to operational investments to support growth in
the company's adjacent markets businesses.
Net cash used in investing activities and net cash used in
financing activities for the nine months ended March 31, 2022, were
$113.1 million and $171.4 million, respectively. At March 31, 2022,
cash and cash equivalents were $179.5 million compared with $129.1
million at June 30, 2021, and the company's five-year, $1.0 billion
revolving credit facility had an outstanding balance of $250.0
million, of which $75.0 million was subsequently repaid in April
2022.
Free cash flow for the nine months ended March 31, 2022 was
$201.9 million compared with $71.0 million for the same period a
year ago. The increase was primarily due to the same factors that
affected net cash provided by operating activities as well as a
decrease in purchases of property and equipment and changes
resulting from the company's August 2020 restructure.
Through March 31, 2022, Premier repurchased a total of
approximately 6.4 million shares of Class A common stock for $250.0
million. During the third quarter of fiscal 2022, the company paid
aggregate dividends of approximately $72.9 million to holders of
its Class A common stock. There is no assurance regarding future
share repurchases or dividend payments.
Conference Call
Premier will host a conference call to provide additional detail
around the company's performance and outlook today at 8:00 a.m. ET.
The call will be webcast live from the company's website and will
be available at the following link: Premier Webcast Link. The
webcast should be accessed 10 minutes prior to the conference call
start time. A replay of the webcast will be available for one year
following the conclusion of the live broadcast and will be
accessible on the company's website at
https://investors.premierinc.com.
For those parties who do not have internet access, the
conference call may be accessed by calling one of the below
telephone numbers and asking to join the Premier, Inc. call:
Domestic participant dial-in number
(toll-free):
(877) 317-6789
International participant dial-in
number:
(412) 317-6789
Premier’s presentation that will accompany the conference call
and webcast can be accessed via the following link: Premier
Events.
About Premier, Inc.
Premier, Inc. (NASDAQ: PINC) is a leading healthcare improvement
company, uniting an alliance of more than 4,400 U.S. hospitals and
health systems and approximately 225,000 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.
Premier’s Use and Definition of Non-GAAP Measures
Premier uses EBITDA, adjusted EBITDA, segment adjusted EBITDA,
adjusted net income, adjusted 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. Management believes EBITDA,
adjusted EBITDA and segment adjusted EBITDA assist the company’s
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.
Adjusted EBITDA and segment adjusted EBITDA are supplemental
financial measures 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.
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, payments to
certain former limited partners that elected to execute a Unit
Exchange and Tax Receivable Agreement (“Unit Exchange Agreement) in
connection with our August 2020 restructuring and purchases of
property and equipment 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.
Non-recurring items are 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 stock-based compensation, acquisition-
and disposition-related expenses, remeasurement of TRA liabilities,
loss on disposal of long-live assets, gain or loss on FFF put and
call rights, income and expense that has been classified as
discontinued operations and other expense.
Non-operating items include gains or losses on the
disposal of assets and interest and investment income or
expense.
EBITDA is defined as net income before income or loss
from discontinued operations, net of tax, interest and investment
income or expense, 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.
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. Segment
Adjusted EBITDA also excludes any income and expense that has been
classified as discontinued operations.
Adjusted net income is defined as net income attributable
to Premier (i) excluding income or loss from discontinued
operations, net, (ii) excluding income tax expense, (iii) excluding
the impact of adjustment of redeemable limited partners’ capital to
redemption amount, (iv) excluding the effect of non-recurring or
non-cash items, including certain strategic and financial
restructuring expenses, (v) 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 (vi)
reflecting an adjustment for income tax expense on Non-GAAP net
income before income taxes at our estimated annual effective income
tax rate, adjusted for unusual or infrequent items.
Adjusted earnings per share is Adjusted Net Income
divided by diluted weighted average shares.
Free cash flow is defined as net cash provided by
operating activities from continuing operations less distributions
and Tax Receivable Agreement payments to limited partners, early
termination payments to certain former limited partners that
elected to execute a Unit Exchange Agreement in connection with our
August 2020 restructuring 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.
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, 2021, filed with the Securities and Exchange Commission
("SEC"), as may be updated in subsequent filings with the SEC.
Premier's Use of Forward-Looking Non-GAAP Measures
The company does not meaningfully reconcile guidance for
non-GAAP adjusted EBITDA and non-GAAP adjusted earnings per share
to net income attributable to stockholders or earnings per share
attributable to stockholders because the company cannot provide
guidance for the 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 earnings per share without unreasonable effort. This is
due to the fact that future period non-GAAP guidance includes
adjustments for items not indicative of our core operations, which
may include, without limitation, items included in the supplemental
financial information for reconciliation of reported GAAP results
to non-GAAP results. Such items include strategic and acquisition
related expenses for professional fees; mark to market adjustments
for put options and contingent liabilities; gains and losses on
stock-based performance shares; adjustments to its income tax
provision (such as valuation allowance adjustments and settlements
of income tax claims); items related to corporate and facility
restructurings; and certain other items the company believes to be
non-indicative of its ongoing operations. Such adjustments may be
affected by changes in ongoing assumptions, judgements, as well as
nonrecurring, unusual or unanticipated charges, expenses or
gains/losses or other items that may not directly correlate to the
underlying performance of our business operations. The exact amount
of these adjustments is not currently determinable but may be
significant.
Cautionary Note Regarding Forward-Looking Statements
Statements made in this release that are not statements of
historical or current facts, such as those related to our ability
to advance our long-term strategies, the payment of dividends at
current levels, or at all, the timing and number of shares
repurchased under our share repurchase approval, our expected
effective income tax rate, and the statements under the heading
“Fiscal 2022 Outlook and Guidance” and the key assumptions
underlying fiscal 2022 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, 2021, as
well as the Form 10-Q for the quarter ended March 31, 2022,
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 March
31,
Nine Months Ended March
31,
2022
2021
2022
2021
Net revenue:
Net administrative fees
$
148,396
$
146,553
$
448,261
$
424,537
Other services and support
105,808
107,375
320,109
304,020
Services
254,204
253,928
768,370
728,557
Products
93,629
215,995
323,825
511,080
Net revenue
347,833
469,923
1,092,195
1,239,637
Cost of revenue:
Services
46,735
46,980
136,326
125,852
Products
88,621
211,136
294,916
496,286
Cost of revenue
135,356
258,116
431,242
622,138
Gross profit
212,477
211,807
660,953
617,499
Operating expenses:
Selling, general and administrative
143,676
134,502
418,330
388,453
Research and development
826
715
2,666
2,013
Amortization of purchased intangible
assets
11,151
10,400
32,890
33,864
Operating expenses
155,653
145,617
453,886
424,330
Operating income
56,824
66,190
207,067
193,169
Equity in net income of unconsolidated
affiliates
3,991
5,524
17,165
16,023
Interest expense, net
(2,804
)
(3,225
)
(8,465
)
(8,742
)
(Loss) gain on FFF Put and Call Rights
—
(5,195
)
64,110
(21,621
)
Other (expense) income, net
(4,248
)
1,594
(2,176
)
10,167
Other (expense) income, net
(3,061
)
(1,302
)
70,634
(4,173
)
Income before income taxes
53,763
64,888
277,701
188,996
Income tax expense (benefit)
14,694
13,444
40,094
(64,880
)
Net income
39,069
51,444
237,607
253,876
Net income attributable to non-controlling
interest
(654
)
(3,123
)
(1,643
)
(15,903
)
Adjustment of redeemable limited partners'
capital to redemption amount
—
—
—
(26,685
)
Net income attributable to
stockholders
$
38,415
$
48,321
$
235,964
$
211,288
Calculation of GAAP Earnings per
Share
Numerator for basic earnings per
share:
Net income attributable to
stockholders
$
38,415
$
48,321
$
235,964
$
211,288
Numerator for diluted earnings per
share:
Net income attributable to
stockholders
$
38,415
$
48,321
$
235,964
$
211,288
Net income attributable to non-controlling
interest
—
—
1,643
—
Net income for diluted earnings per
share
$
38,415
$
48,321
$
237,607
$
211,288
Denominator for earnings per
share:
Basic weighted average shares
outstanding
118,697
122,254
120,957
114,596
Effect of dilutive securities:
Stock options
98
325
225
300
Restricted stock
465
373
499
336
Performance share awards
553
164
621
133
Diluted weighted average shares and
assumed conversions
119,813
123,116
122,302
115,365
Earnings per share attributable to
stockholders:
Basic
$
0.32
$
0.40
$
1.95
$
1.84
Diluted
$
0.32
$
0.39
$
1.94
$
1.83
Condensed Consolidated Balance
Sheets
(Unaudited)
(In thousands, except share
data)
March 31, 2022
June 30, 2021
Assets
Cash and cash equivalents
$
179,503
$
129,141
Accounts receivable (net of $852 and
$1,174 allowance for credit losses, respectively)
125,632
142,557
Contract assets (net of $1,251 and $1,110
allowance for credit losses, respectively)
255,693
266,173
Inventory
130,275
176,376
Prepaid expenses and other current
assets
64,897
68,049
Total current assets
756,000
782,296
Property and equipment (net of $574,185
and $518,332 accumulated depreciation, respectively)
222,583
224,271
Intangible assets (net of $322,802 and
$289,912 accumulated amortization, respectively)
373,752
396,642
Goodwill
999,913
999,913
Deferred income tax assets
744,899
781,824
Deferred compensation plan assets
53,914
59,581
Investments in unconsolidated
affiliates
209,205
153,224
Operating lease right-of-use assets
41,764
48,199
Other assets
113,429
76,948
Total assets
$
3,515,459
$
3,522,898
Liabilities and stockholders'
equity
Accounts payable
$
53,720
$
85,413
Accrued expenses
58,129
48,144
Revenue share obligations
240,152
226,883
Accrued compensation and benefits
79,621
100,713
Deferred revenue
33,755
34,058
Current portion of notes payable to former
limited partners
97,342
95,948
Line of credit and current portion of
long-term debt
253,053
78,295
Other current liabilities
47,403
47,330
Total current liabilities
863,175
716,784
Long-term debt, less current portion
2,280
5,333
Notes payable to former limited partners,
less current portion
225,814
298,995
Deferred compensation plan obligations
53,914
59,581
Deferred consideration, less current
portion
57,762
56,809
Operating lease liabilities, less current
portion
35,678
43,102
Other liabilities
43,234
112,401
Total liabilities
1,281,857
1,293,005
Commitments and contingencies
Stockholders' equity:
Class A common stock, $0.01 par value,
500,000,000 shares authorized; 124,415,319 shares issued and
117,985,944 shares outstanding at March 31, 2022 and 122,533,051
shares issued and outstanding at June 30, 2021
1,244
1,225
Treasury stock, at cost; 6,429,375 and 0
shares at March 31, 2022 and June 30, 2021, respectively
(250,129
)
—
Additional paid-in capital
2,150,313
2,059,194
Retained earnings
332,171
169,474
Accumulated other comprehensive income
3
—
Total stockholders' equity
2,233,602
2,229,893
Total liabilities and stockholders'
equity
$
3,515,459
$
3,522,898
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
(In thousands)
Nine Months Ended March
31,
2022
2021
Operating activities
Net income
$
237,607
$
253,876
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
95,764
89,768
Equity in net income of unconsolidated
affiliates
(17,165
)
(16,023
)
Deferred income taxes
36,926
(100,150
)
Stock-based compensation
37,792
27,601
(Gain) loss on FFF put and call rights
(64,110
)
21,621
Other
4,578
537
Changes in operating assets and
liabilities:
Accounts receivable, inventories, prepaid
expenses and other assets
91,418
(181,263
)
Contract assets
(39,139
)
(43,733
)
Accounts payable, accrued expenses,
deferred revenue, revenue share obligations and other
liabilities
(48,882
)
140,131
Net cash provided by operating
activities
$
334,789
$
192,365
Investing activities
Purchases of property and equipment
$
(61,061
)
$
(66,911
)
Acquisition of businesses and equity
method investments, net of cash acquired
(26,000
)
(81,152
)
Investment in unconsolidated
affiliates
(16,000
)
—
Other
(10,000
)
(1,228
)
Net cash used in investing
activities
$
(113,061
)
$
(149,291
)
Financing activities
Payments made on notes payable
$
(75,082
)
$
(31,692
)
Proceeds from credit facility
300,000
225,000
Payments on credit facility
(125,000
)
(100,000
)
Cash dividends paid
(72,861
)
(69,647
)
Repurchase of Class A common stock (held
as treasury stock)
(250,129
)
—
Proceeds from exercise of stock
options
37,385
—
Distributions to limited partners of
Premier LP
—
(9,949
)
Payments to limited partners of Premier LP
related to tax receivable agreements
—
(24,218
)
Other
14,318
712
Net cash used in financing
activities
$
(171,369
)
$
(9,794
)
Effect of exchange rate changes on cash
flows
3
—
Net increase in cash and cash
equivalents
50,362
33,280
Cash and cash equivalents at beginning of
year
129,141
99,304
Cash and cash equivalents at end of
period
$
179,503
$
132,584
Supplemental Financial
Information
Reconciliation of Net Cash
Provided by Operating Activities to Free Cash Flow
(Unaudited)
(In thousands)
Nine Months Ended March
31,
2022
2021
Net cash provided by operating
activities
$
334,789
$
192,365
Purchases of property and equipment
(61,061
)
(66,911
)
Early termination payments to certain
former limited partners that elected to execute a Unit Exchange
Agreement
(71,786
)
(20,328
)
Distributions to limited partners of
Premier LP
—
(9,949
)
Payments to limited partners of Premier LP
related to tax receivable agreements
—
(24,218
)
Free Cash Flow
$
201,942
$
70,959
(a)
Early termination payments to certain
former limited partners that elected to execute a Unit Exchange
Agreement in connection with Premier's August 2020 restructuring
are presented in Condensed Consolidated Statement of Cash Flows
under “Payments made on notes payable." During the nine months
ended March 31, 2022, Premier paid $77.0 million to members
including imputed interest of $5.2 million which is included in net
cash provided by operating activities. During the nine months ended
March 31, 2021, the company paid $25.7 million to members,
including imputed interest of $5.3 million which is included in net
cash provided by operating activities.
Supplemental Financial
Information
Reconciliation of Net Income
from Continuing Operations to Adjusted EBITDA
Reconciliation of Operating
Income to Segment Adjusted EBITDA
Reconciliation of Net Income
Attributable to Stockholders to Adjusted Net Income
(Unaudited)
(In thousands)
Three Months Ended March
31,
Nine Months Ended March
31,
2022
2021
2022
2021
Net income
$
39,069
$
51,444
$
237,607
$
253,876
Interest expense, net
2,804
3,225
8,465
8,742
Income tax expense (benefit)
14,694
13,444
40,094
(64,880
)
Depreciation and amortization
21,408
19,337
62,874
55,904
Amortization of purchased intangible
assets
11,151
10,400
32,890
33,864
EBITDA
89,126
97,850
381,930
287,506
Stock-based compensation
14,149
13,180
38,229
27,970
Acquisition- & disposition-related
expenses
3,115
4,126
10,282
14,889
Loss (gain) on FFF put and call rights
—
5,195
(64,110
)
21,621
Other expense, net
5,798
856
9,576
4,782
Adjusted EBITDA
$
112,188
$
121,207
$
375,907
$
356,768
Income before income taxes
$
53,763
$
64,888
$
277,701
$
188,996
Equity in net income of unconsolidated
affiliates
(3,991
)
(5,524
)
(17,165
)
(16,023
)
Interest expense, net
2,804
3,225
8,465
8,742
Loss (gain) on FFF put and call rights
—
5,195
(64,110
)
21,621
Other income, net
4,248
(1,594
)
2,176
(10,167
)
Operating income
56,824
66,190
207,067
193,169
Depreciation and amortization
21,408
19,337
62,874
55,904
Amortization of purchased intangible
assets
11,151
10,400
32,890
33,864
Stock-based compensation
14,149
13,180
38,229
27,970
Acquisition- & disposition-related
expenses
3,115
4,126
10,282
14,889
Equity in net income of unconsolidated
affiliates
3,991
5,524
17,165
16,023
Deferred compensation plan income
(3,994
)
1,521
(1,923
)
9,231
Other expense, net
5,544
929
9,323
5,718
Adjusted EBITDA
$
112,188
$
121,207
$
375,907
$
356,768
SEGMENT ADJUSTED EBITDA
Supply Chain Services
$
118,034
$
117,949
$
381,586
$
339,538
Performance Services
26,552
35,950
89,277
109,675
Corporate
(32,398
)
(32,692
)
(94,956
)
(92,445
)
Adjusted EBITDA
$
112,188
$
121,207
$
375,907
$
356,768
Net income attributable to
stockholders
$
38,415
$
48,321
$
235,964
$
211,288
Adjustment of redeemable limited partners'
capital to redemption amount
—
—
—
26,685
Net income attributable to non-controlling
interest
654
3,123
1,643
15,903
Income tax expense (benefit)
14,694
13,444
40,094
(64,880
)
Amortization of purchased intangible
assets
11,151
10,400
32,890
33,864
Stock-based compensation
14,149
13,180
38,229
27,970
Acquisition- & disposition-related
expenses
3,115
4,126
10,282
14,889
Loss (gain) on FFF put and call rights
—
5,195
(64,110
)
21,621
Other expense, net
7,425
2,897
14,803
10,126
Adjusted income before income taxes
89,603
100,686
309,795
297,466
Income tax expense on adjusted income
before income taxes
21,505
22,151
74,351
65,443
Adjusted Net Income
$
68,098
$
78,535
$
235,444
$
232,023
Supplemental Financial
Information
Reconciliation of GAAP EPS to
Adjusted EPS
(Unaudited)
(In thousands, except per
share data)
Three Months Ended March
31,
Nine Months Ended March
31,
2022
2021
2022
2021
Net income attributable to
stockholders
$
38,415
$
48,321
$
235,964
$
211,288
Adjustment of redeemable limited partners'
capital to redemption amount
—
—
—
26,685
Net income attributable to non-controlling
interest
654
3,123
1,643
15,903
Income tax expense (benefit)
14,694
13,444
40,094
(64,880
)
Amortization of purchased intangible
assets
11,151
10,400
32,890
33,864
Stock-based compensation
14,149
13,180
38,229
27,970
Acquisition- & disposition-related
expenses
3,115
4,126
10,282
14,889
Loss (gain) on FFF put and call rights
—
5,195
(64,110
)
21,621
Other expense, net
7,425
2,897
14,803
10,126
Adjusted income before income taxes
89,603
100,686
309,795
297,466
Income tax expense on adjusted income
before income taxes
21,505
22,151
74,351
65,443
Adjusted Net Income
$
68,098
$
78,535
$
235,444
$
232,023
Weighted average:
Common shares used for basic and diluted
earnings per share
118,697
122,254
120,957
114,596
Potentially dilutive shares
1,116
862
1,345
769
GAAP weighted average shares
outstanding - diluted
119,813
123,116
122,302
115,365
Conversion of Class B common units
—
—
—
7,511
Weighted average shares outstanding -
diluted
119,813
123,116
122,302
122,876
GAAP earnings per share
$
0.32
$
0.40
$
1.95
$
1.84
Adjustment of redeemable limited partners'
capital to redemption amount
—
—
—
0.23
Net income attributable to non-controlling
interest
0.01
0.03
0.01
0.14
Income tax expense (benefit)
0.12
0.11
0.33
(0.56
)
Amortization of purchased intangible
assets
0.09
0.09
0.27
0.30
Stock-based compensation
0.12
0.11
0.32
0.24
Acquisition- & disposition-related
expenses
0.03
0.03
0.09
0.13
Loss (gain) on FFF put and call rights
—
0.04
(0.53
)
0.19
Other expense, net
0.06
0.02
0.12
0.09
Impact of corporation taxes
(0.18
)
(0.19
)
(0.61
)
(0.57
)
Impact of dilutive shares
—
—
(0.02
)
(0.14
)
Adjusted EPS
$
0.57
$
0.64
$
1.93
$
1.89
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220503005147/en/
Investor contact: Angie McCabe Vice President, Investor
Relations 704.816.3888 angie_mccabe@premierinc.com
Media contact: Amanda Forster Vice President, Public
Relations 202.879.8004 amanda_forster@premierinc.com
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