Premier, Inc. Reports Fiscal-Year 2022 Fourth-Quarter and Full-Year Results
Premier, Inc. (NASDAQ: PINC) reported fiscal Q4 2022 results, with net revenue falling 29% to $340.7 million, driven by a 40% decline in Supply Chain Services revenue. However, Performance Services segment revenue rose 18% to $108 million. The company's net income dropped 39% to $30.7 million, while adjusted EPS increased 2% to $0.61. Premier's adjacent market businesses grew 30%, and it generated $444.2 million in cash flow from operations. For fiscal 2023, Premier expects continued growth, particularly in its non-acute group purchasing business.
- Double-digit revenue growth in non-acute group purchasing business.
- Performance Services segment revenue increased 18%.
- Adjacent markets businesses grew approximately 30% year-over-year.
- Generated $444.2 million in cash flow from operations.
- GAAP net revenue decreased 29% year-over-year.
- Supply Chain Services segment revenue decreased 40%.
- Net income decreased 39% to $30.7 million.
Issues Fiscal-Year 2023 Guidance
"Our fourth-quarter and fiscal-year 2022 performance reflects our focus on our mission to improve the health of communities and the progress we are making in advancing our longer-term strategy," said
Fourth-Quarter and Fiscal-Year 2022 and Recent Highlights
(Financial comparisons are for fiscal fourth quarter of 2022 vs. fiscal fourth quarter of 2021)
-
GAAP net revenue decreased
29% , as the company expected, to from$340.7 million a year ago.$481.5 million -
Supply Chain Services segment revenue decreased
40% to from$232.7 million a year ago.$389.7 million -
Performance Services segment revenue increased
18% to from$108.0 million a year ago.$91.8 million
-
Supply Chain Services segment revenue decreased
-
GAAP net income decreased
39% to from$30.7 million a year ago.$50.7 million -
GAAP diluted earnings per share (EPS) decreased
38% to from$0.25 per share a year ago.$0.40 -
Adjusted EBITDA* of
increased$122.8 million 5% from a year ago.$116.5 million -
Adjusted net income* of
decreased$73.5 million 1% from a year ago and adjusted EPS* increased$74.0 million 2% to from$0.61 a year ago.$0.60 -
Premier 's adjacent markets businesses, which include Remitra™,Contigo Health ®, PINC AI™ Applied Sciences and PINC AI™ Clinical Decision Support, grew approximately30% in fiscal 2022 compared with fiscal 2021. -
For the year ended
June 30, 2022 , the company generated cash flow from operations of . Free cash flow* was$444.2 million and represented$260.8 million 52% of full-year adjusted EBITDA. -
During the year ended
June 30, 2022 ,Premier repurchased approximately 6.4 million shares of Class A common stock for a total purchase price of , completing its previously authorized$250.0 million stock repurchase program, and paid aggregate dividends of approximately$250.0 million to holders of its Class A common stock.$96.5 million -
On
August 4, 2022 ,Premier 's Board of Directors increased the company's quarterly cash dividend to per share, which is payable on$0.21 September 15, 2022 , to stockholders of record as ofSeptember 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 Fourth-Quarter and Full-Year Financial Highlights and Results of Operations
Consolidated Financial Highlights |
|
|
|
|
|
|||||||||||||||||
|
Three Months Ended |
|
Year Ended |
|||||||||||||||||||
(in thousands, except per share data) |
2022 |
|
2021 |
|
% Change |
|
2022 |
|
2021 |
|
% Change |
|||||||||||
Net Revenue: |
|
|
|
|
|
|
||||||||||||||||
Supply Chain Services: |
|
|
|
|
|
|
||||||||||||||||
Net administrative fees |
$ |
152,867 |
|
$ |
148,163 |
|
3 |
% |
$ |
601,128 |
|
$ |
572,700 |
|
5 |
% |
||||||
Software licenses, other services and support |
|
10,146 |
|
|
8,504 |
|
19 |
% |
|
37,312 |
|
|
26,812 |
|
39 |
% |
||||||
Services and software licenses |
|
163,013 |
|
|
156,667 |
|
4 |
% |
|
638,440 |
|
|
599,512 |
|
6 |
% |
||||||
Products |
|
69,681 |
|
|
233,042 |
|
(70 |
%) |
|
393,506 |
|
|
744,122 |
|
(47 |
%) |
||||||
Total Supply Chain Services |
|
232,694 |
|
|
389,709 |
|
(40 |
%) |
|
1,031,946 |
|
|
1,343,634 |
|
(23 |
%) |
||||||
Performance Services |
|
108,021 |
|
|
91,806 |
|
18 |
% |
|
400,983 |
|
|
377,518 |
|
6 |
% |
||||||
Total segment net revenue |
|
340,715 |
|
|
481,515 |
|
(29 |
%) |
|
1,432,929 |
|
|
1,721,152 |
|
(17 |
%) |
||||||
Eliminations |
|
(9 |
) |
|
— |
|
— |
% |
|
(28 |
) |
|
— |
|
— |
% |
||||||
Net revenue |
$ |
340,706 |
|
$ |
481,515 |
|
(29 |
%) |
$ |
1,432,901 |
|
$ |
1,721,152 |
|
(17 |
%) |
||||||
|
|
|
|
|
|
|
||||||||||||||||
Net income |
$ |
30,711 |
|
$ |
50,708 |
|
(39 |
%) |
$ |
268,318 |
|
$ |
304,584 |
|
(12 |
%) |
||||||
Net income attributable to stockholders |
$ |
29,903 |
|
$ |
49,549 |
|
(40 |
%) |
$ |
265,867 |
|
$ |
260,837 |
|
2 |
% |
||||||
|
|
|
|
|
|
|
||||||||||||||||
Diluted earnings per share attributable to stockholders |
$ |
0.25 |
|
$ |
0.40 |
|
(38 |
%) |
$ |
2.19 |
|
$ |
2.22 |
|
(1 |
%) |
||||||
|
|
|
|
|
|
|
||||||||||||||||
NON-GAAP FINANCIAL MEASURES*: |
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
||||||||||||||||
Supply Chain Services |
$ |
119,269 |
|
$ |
128,330 |
|
(7 |
%) |
$ |
500,854 |
|
$ |
467,868 |
|
7 |
% |
||||||
Performance Services |
|
37,661 |
|
|
22,550 |
|
67 |
% |
|
126,938 |
|
|
132,225 |
|
(4 |
%) |
||||||
Total segment adjusted EBITDA |
|
156,930 |
|
|
150,880 |
|
4 |
% |
|
627,792 |
|
|
600,093 |
|
5 |
% |
||||||
Corporate |
|
(34,155 |
) |
|
(34,418 |
) |
1 |
% |
|
(129,110 |
) |
|
(126,863 |
) |
(2 |
%) |
||||||
Total |
$ |
122,775 |
|
$ |
116,462 |
|
5 |
% |
$ |
498,682 |
|
$ |
473,230 |
|
5 |
% |
||||||
Adjusted net income |
$ |
73,490 |
|
$ |
73,951 |
|
(1 |
%) |
$ |
302,738 |
|
$ |
305,974 |
|
(1 |
%) |
||||||
Adjusted earnings per share |
$ |
0.61 |
|
$ |
0.60 |
|
2 |
% |
$ |
2.49 |
|
$ |
2.48 |
|
— |
% |
||||||
|
|
|
|
|
|
|
||||||||||||||||
* Refer to the supplemental financial information at the end of this release for reconciliation of reported GAAP results to non-GAAP results. |
Fiscal-2023 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 for the fiscal year ended
Based on
Guidance Metric |
Fiscal-2023 Guidance Range*
(as of |
Segment Net Revenue: |
|
Supply Chain Services |
|
Performance Services |
|
Total Net Revenue |
|
Adjusted EBITDA |
|
Adjusted EPS |
|
Fiscal-2023 guidance is based on the realization of the following key assumptions:
|
|
* |
Results of Operations for the Three Months Ended
(As compared with the three months ended
GAAP net revenue of
GAAP net income of
GAAP diluted EPS of
Adjusted EBITDA of
Adjusted net income of
Segment Results
(For the fiscal fourth quarter of 2022 as compared with the fiscal fourth quarter of 2021)
Supply Chain Services
Supply Chain Services segment net revenue of
Net administrative fees revenue of
Products revenue of
Segment adjusted EBITDA of
Performance Services
Performance Services segment net revenue of
Segment adjusted EBITDA of
Results of Operations for the Year Ended
(As compared with the year ended
GAAP net revenue was
GAAP net income of
GAAP diluted EPS was
Adjusted EBITDA of
Adjusted net income was
Supply Chain Services segment net revenue of
Performance Services segment net revenue of
Cash Flows and Liquidity
Net cash provided by operating activities for the year ended
Net cash used in investing activities and net cash used in financing activities for the year ended
Free cash flow for the year ended
As announced on
Conference Call
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
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:
About
Premier’s Use and Definition of Non-GAAP Measures
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 payments of tax distributions to limited partners prior to our
Non-recurring items are items of 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, strategic initiative- and financial restructuring-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
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 for periods prior to our
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
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 2023 Outlook and Guidance” and the key assumptions underlying fiscal 2023 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
Consolidated Statements of Income |
|||||||||||||||
(In thousands, except per share data) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net revenue: |
|
|
|
|
|
||||||||||
Net administrative fees |
$ |
152,867 |
|
$ |
148,163 |
|
|
$ |
601,128 |
|
$ |
572,700 |
|
||
Software licenses, other services and support |
|
118,158 |
|
|
100,310 |
|
|
|
438,267 |
|
|
404,330 |
|
||
Services and software licenses |
|
271,025 |
|
|
248,473 |
|
|
|
1,039,395 |
|
|
977,030 |
|
||
Products |
|
69,681 |
|
|
233,042 |
|
|
|
393,506 |
|
|
744,122 |
|
||
Net revenue |
|
340,706 |
|
|
481,515 |
|
|
|
1,432,901 |
|
|
1,721,152 |
|
||
Cost of revenue: |
|
|
|
|
|
||||||||||
Services and software licenses |
|
47,658 |
|
|
44,921 |
|
|
|
183,984 |
|
|
170,773 |
|
||
Products |
|
68,962 |
|
|
216,759 |
|
|
|
363,878 |
|
|
713,045 |
|
||
Cost of revenue |
|
116,620 |
|
|
261,680 |
|
|
|
547,862 |
|
|
883,818 |
|
||
Gross profit |
|
224,086 |
|
|
219,835 |
|
|
|
885,039 |
|
|
837,334 |
|
||
Operating expenses: |
|
|
|
|
|
||||||||||
Selling, general and administrative |
|
158,549 |
|
|
143,873 |
|
|
|
576,879 |
|
|
532,326 |
|
||
Research and development |
|
1,485 |
|
|
1,325 |
|
|
|
4,151 |
|
|
3,338 |
|
||
Amortization of purchased intangible assets |
|
11,046 |
|
|
10,889 |
|
|
|
43,936 |
|
|
44,753 |
|
||
Operating expenses |
|
171,080 |
|
|
156,087 |
|
|
|
624,966 |
|
|
580,417 |
|
||
Operating income |
|
53,006 |
|
|
63,748 |
|
|
|
260,073 |
|
|
256,917 |
|
||
Equity in net income of unconsolidated affiliates |
|
6,340 |
|
|
5,050 |
|
|
|
23,505 |
|
|
21,073 |
|
||
Interest expense, net |
|
(2,677 |
) |
|
(3,222 |
) |
|
|
(11,142 |
) |
|
(11,964 |
) |
||
(Loss) gain on FFF Put and Call Rights |
|
— |
|
|
(5,731 |
) |
|
|
64,110 |
|
|
(27,352 |
) |
||
Other (expense) income, net |
|
(7,470 |
) |
|
1,800 |
|
|
|
(9,646 |
) |
|
11,967 |
|
||
Other (expense) income, net |
|
(3,807 |
) |
|
(2,103 |
) |
|
|
66,827 |
|
|
(6,276 |
) |
||
Income before income taxes |
|
49,199 |
|
|
61,645 |
|
|
|
326,900 |
|
|
250,641 |
|
||
Income tax expense (benefit) |
|
18,488 |
|
|
10,937 |
|
|
|
58,582 |
|
|
(53,943 |
) |
||
Net income |
|
30,711 |
|
|
50,708 |
|
|
|
268,318 |
|
|
304,584 |
|
||
Net income attributable to non-controlling interest |
|
(808 |
) |
|
(1,159 |
) |
|
|
(2,451 |
) |
|
(17,062 |
) |
||
Adjustment of redeemable limited partners' capital to redemption amount |
|
— |
|
|
— |
|
|
|
— |
|
|
(26,685 |
) |
||
Net income attributable to stockholders |
$ |
29,903 |
|
$ |
49,549 |
|
|
$ |
265,867 |
|
$ |
260,837 |
|
||
|
|
|
|
|
|
||||||||||
Calculation of GAAP Earnings per Share |
|
|
|
|
|
||||||||||
|
|
|
|
|
|
||||||||||
Numerator for earnings per share: |
|
|
|
|
|
||||||||||
Net income attributable to stockholders |
$ |
29,903 |
|
$ |
49,549 |
|
|
$ |
265,867 |
|
$ |
260,837 |
|
||
|
|
|
|
|
|
||||||||||
Denominator for earnings per share: |
|
|
|
|
|
||||||||||
Basic weighted average shares outstanding |
|
118,001 |
|
|
122,341 |
|
|
|
120,220 |
|
|
116,527 |
|
||
Effect of dilutive securities: |
|
|
|
|
|
||||||||||
Stock options |
|
150 |
|
|
303 |
|
|
|
206 |
|
|
301 |
|
||
Restricted stock |
|
544 |
|
|
496 |
|
|
|
510 |
|
|
376 |
|
||
Performance share awards |
|
1,065 |
|
|
915 |
|
|
|
732 |
|
|
328 |
|
||
Diluted weighted average shares and assumed conversions |
|
119,760 |
|
|
124,055 |
|
|
|
121,668 |
|
|
117,532 |
|
||
|
|
|
|
|
|
||||||||||
Earnings per share attributable to stockholders: |
|
|
|
|
|
||||||||||
Basic |
$ |
0.25 |
|
$ |
0.41 |
|
|
$ |
2.21 |
|
$ |
2.24 |
|
||
Diluted |
$ |
0.25 |
|
$ |
0.40 |
|
|
$ |
2.19 |
|
$ |
2.22 |
|
||
Consolidated Balance Sheets |
||||||
(In thousands, except share data) |
||||||
|
|
|
||||
|
|
|
||||
Assets |
|
|
||||
Cash and cash equivalents |
$ |
86,143 |
|
$ |
129,141 |
|
Accounts receivable (net of |
|
114,129 |
|
|
141,447 |
|
Contract assets (net of |
|
260,061 |
|
|
267,283 |
|
Inventory |
|
119,652 |
|
|
176,376 |
|
Prepaid expenses and other current assets |
|
65,581 |
|
|
68,049 |
|
Total current assets |
|
645,566 |
|
|
782,296 |
|
Property and equipment (net of |
|
213,379 |
|
|
224,271 |
|
Intangible assets (net of |
|
356,572 |
|
|
396,642 |
|
|
|
999,913 |
|
|
999,913 |
|
Deferred income tax assets |
|
725,032 |
|
|
781,824 |
|
Deferred compensation plan assets |
|
47,436 |
|
|
59,581 |
|
Investments in unconsolidated affiliates |
|
215,545 |
|
|
153,224 |
|
Operating lease right-of-use assets |
|
39,530 |
|
|
48,199 |
|
Other assets |
|
114,154 |
|
|
76,948 |
|
Total assets |
$ |
3,357,127 |
|
$ |
3,522,898 |
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|||||
Accounts payable |
$ |
44,631 |
|
$ |
85,413 |
|
Accrued expenses |
|
40,968 |
|
|
48,144 |
|
Revenue share obligations |
|
245,395 |
|
|
226,883 |
|
Accrued compensation and benefits |
|
93,638 |
|
|
100,713 |
|
Deferred revenue |
|
30,463 |
|
|
34,058 |
|
Current portion of notes payable to former limited partners |
|
97,806 |
|
|
95,948 |
|
Line of credit and current portion of long-term debt |
|
153,053 |
|
|
78,295 |
|
Other current liabilities |
|
47,183 |
|
|
47,330 |
|
Total current liabilities |
|
753,137 |
|
|
716,784 |
|
Long-term debt, less current portion |
|
2,280 |
|
|
5,333 |
|
Notes payable to former limited partners, less current portion |
|
201,188 |
|
|
298,995 |
|
Deferred compensation plan obligations |
|
47,436 |
|
|
59,581 |
|
Deferred consideration, less current portion |
|
28,702 |
|
|
56,809 |
|
Operating lease liabilities, less current portion |
|
32,960 |
|
|
43,102 |
|
Other liabilities |
|
42,574 |
|
|
112,401 |
|
Total liabilities |
|
1,108,277 |
|
|
1,293,005 |
|
|
|
|
||||
Commitments and contingencies |
|
|
||||
Stockholders' equity: |
|
|
||||
Class A common stock, |
|
1,245 |
|
|
1,225 |
|
|
|
(250,129 |
) |
|
— |
|
Additional paid-in capital |
|
2,166,047 |
|
|
2,059,194 |
|
Retained earnings |
|
331,690 |
|
|
169,474 |
|
Accumulated other comprehensive income |
|
(3 |
) |
|
— |
|
Total stockholders' equity |
|
2,248,850 |
|
|
2,229,893 |
|
Total liabilities and stockholders' equity |
$ |
3,357,127 |
|
$ |
3,522,898 |
|
Consolidated Statements of Cash Flows |
|||||||
(In thousands) |
|||||||
|
|
|
|||||
|
Year Ended |
||||||
|
2022 |
|
2021 |
||||
Operating activities |
|
|
|||||
Net income |
$ |
268,318 |
|
$ |
304,584 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|||||
Depreciation and amortization |
|
129,107 |
|
|
121,062 |
|
|
Equity in net income of unconsolidated affiliates |
|
(23,505 |
) |
|
(21,073 |
) |
|
Deferred income taxes |
|
56,792 |
|
|
(83,692 |
) |
|
Stock-based compensation |
|
46,229 |
|
|
35,425 |
|
|
Impairment of assets |
|
18,829 |
|
|
— |
|
|
(Gain) loss on FFF Put and Call Rights |
|
(64,110 |
) |
|
27,352 |
|
|
Other |
|
5,803 |
|
|
9,358 |
|
|
Changes in operating assets and liabilities: |
|
|
|||||
Accounts receivable, inventories, prepaid expenses and other assets |
|
124,659 |
|
|
(68,008 |
) |
|
Contract assets |
|
(47,219 |
) |
|
(51,685 |
) |
|
Accounts payable, accrued expenses, deferred revenue, revenue share obligations and other liabilities |
|
(70,669 |
) |
|
134,079 |
|
|
Net cash provided by operating activities |
$ |
444,234 |
|
$ |
407,402 |
|
|
Investing activities |
|
|
|||||
Purchases of property and equipment |
$ |
(87,440 |
) |
$ |
(88,876 |
) |
|
Acquisition of businesses and equity method investments, net of cash acquired |
|
(26,000 |
) |
|
(84,463 |
) |
|
Investment in unconsolidated affiliates |
|
(16,000 |
) |
|
— |
|
|
Other |
|
(10,000 |
) |
|
(1,229 |
) |
|
Net cash used in investing activities |
$ |
(139,440 |
) |
$ |
(174,568 |
) |
|
Financing activities |
|
|
|||||
Payments made on notes payable |
$ |
(99,243 |
) |
$ |
(50,713 |
) |
|
Proceeds from credit facility |
|
325,000 |
|
|
225,000 |
|
|
Payments on credit facility |
|
(250,000 |
) |
|
(225,000 |
) |
|
Cash dividends paid |
|
(96,455 |
) |
|
(92,898 |
) |
|
Repurchase of Class A common stock (held as treasury stock) |
|
(250,129 |
) |
|
— |
|
|
Payments on deferred consideration related to acquisition of business |
|
(28,586 |
) |
|
(29,217 |
) |
|
Proceeds from exercise of stock options |
|
37,766 |
|
|
9,356 |
|
|
Distributions to limited partners of |
|
— |
|
|
(9,949 |
) |
|
Payments to limited partners of |
|
— |
|
|
(24,218 |
) |
|
Other |
|
13,858 |
|
|
(5,358 |
) |
|
Net cash used in financing activities |
$ |
(347,789 |
) |
$ |
(202,997 |
) |
|
Effect of exchange rate changes on cash flows |
|
(3 |
) |
|
— |
|
|
Net (decrease) increase in cash and cash equivalents |
|
(42,998 |
) |
|
29,837 |
|
|
Cash and cash equivalents at beginning of year |
|
129,141 |
|
|
99,304 |
|
|
Cash and cash equivalents at end of period |
$ |
86,143 |
|
$ |
129,141 |
|
|
Supplemental Financial Information |
|||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
|||||||
(Unaudited) |
|||||||
(In thousands) |
|||||||
|
|
|
|||||
|
Year Ended |
||||||
|
2022 |
|
2021 |
||||
Net cash provided by operating activities |
$ |
444,234 |
|
$ |
407,402 |
|
|
Purchases of property and equipment |
|
(87,440 |
) |
|
(88,876 |
) |
|
Early termination payments to certain former limited partners that elected to execute a Unit Exchange Agreement (a) |
|
(95,948 |
) |
|
(44,024 |
) |
|
Distributions to limited partners of |
|
— |
|
|
(9,949 |
) |
|
Payments to limited partners of |
|
— |
|
|
(24,218 |
) |
|
Free Cash Flow |
$ |
260,846 |
|
$ |
240,335 |
|
(a) |
Early termination payments to certain former limited partners that elected to execute a Unit Exchange Agreement in connection with |
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 |
|
Year Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
Net income |
$ |
30,711 |
|
$ |
50,708 |
|
|
$ |
268,318 |
|
$ |
304,584 |
|
||
Interest expense, net |
|
2,677 |
|
|
3,222 |
|
|
|
11,142 |
|
|
11,964 |
|
||
Income tax expense (benefit) |
|
18,488 |
|
|
10,937 |
|
|
|
58,582 |
|
|
(53,943 |
) |
||
Depreciation and amortization |
|
22,297 |
|
|
20,405 |
|
|
|
85,171 |
|
|
76,309 |
|
||
Amortization of purchased intangible assets |
|
11,046 |
|
|
10,889 |
|
|
|
43,936 |
|
|
44,753 |
|
||
EBITDA |
|
85,219 |
|
|
96,161 |
|
|
|
467,149 |
|
|
383,667 |
|
||
Stock-based compensation |
|
8,580 |
|
|
7,945 |
|
|
|
46,809 |
|
|
35,915 |
|
||
Acquisition- and disposition-related expenses |
|
1,171 |
|
|
3,206 |
|
|
|
11,453 |
|
|
18,095 |
|
||
Strategic initiative and financial restructuring-related expenses |
|
8,691 |
|
|
1,687 |
|
|
|
18,005 |
|
|
6,990 |
|
||
Loss (gain) on FFF Put and Call Rights |
|
— |
|
|
5,731 |
|
|
|
(64,110 |
) |
|
27,352 |
|
||
Impairment of assets |
|
18,829 |
|
|
— |
|
|
|
18,829 |
|
|
— |
|
||
Other reconciling items, net |
|
285 |
|
|
1,732 |
|
|
|
547 |
|
|
1,211 |
|
||
Adjusted EBITDA |
$ |
122,775 |
|
$ |
116,462 |
|
|
$ |
498,682 |
|
$ |
473,230 |
|
||
|
|
|
|
|
|
||||||||||
Income before income taxes |
$ |
49,199 |
|
$ |
61,645 |
|
|
$ |
326,900 |
|
$ |
250,641 |
|
||
Equity in net income of unconsolidated affiliates |
|
(6,340 |
) |
|
(5,050 |
) |
|
|
(23,505 |
) |
|
(21,073 |
) |
||
Interest expense, net |
|
2,677 |
|
|
3,222 |
|
|
|
11,142 |
|
|
11,964 |
|
||
Loss (gain) on FFF Put and Call Rights |
|
— |
|
|
5,731 |
|
|
|
(64,110 |
) |
|
27,352 |
|
||
Other expense (income), net |
|
7,470 |
|
|
(1,800 |
) |
|
|
9,646 |
|
|
(11,967 |
) |
||
Operating income |
|
53,006 |
|
|
63,748 |
|
|
|
260,073 |
|
|
256,917 |
|
||
Depreciation and amortization |
|
22,297 |
|
|
20,405 |
|
|
|
85,171 |
|
|
76,309 |
|
||
Amortization of purchased intangible assets |
|
11,046 |
|
|
10,889 |
|
|
|
43,936 |
|
|
44,753 |
|
||
Stock-based compensation |
|
8,580 |
|
|
7,945 |
|
|
|
46,809 |
|
|
35,915 |
|
||
Acquisition- and disposition-related expenses |
|
1,171 |
|
|
3,206 |
|
|
|
11,453 |
|
|
18,095 |
|
||
Strategic initiative and financial restructuring-related expenses |
|
8,691 |
|
|
1,687 |
|
|
|
18,005 |
|
|
6,990 |
|
||
Equity in net income of unconsolidated affiliates |
|
6,340 |
|
|
5,050 |
|
|
|
23,505 |
|
|
21,073 |
|
||
Deferred compensation plan (expense) income |
|
(7,478 |
) |
|
3,514 |
|
|
|
(9,401 |
) |
|
12,745 |
|
||
Impairment of assets |
|
18,829 |
|
|
— |
|
|
|
18,829 |
|
|
— |
|
||
Other reconciling items, net |
|
293 |
|
|
18 |
|
|
|
302 |
|
|
433 |
|
||
Adjusted EBITDA |
$ |
122,775 |
|
$ |
116,462 |
|
|
$ |
498,682 |
|
$ |
473,230 |
|
||
|
|
|
|
|
|
||||||||||
SEGMENT ADJUSTED EBITDA |
|
|
|
|
|
||||||||||
Supply Chain Services |
$ |
119,269 |
|
$ |
128,330 |
|
|
$ |
500,854 |
|
$ |
467,868 |
|
||
Performance Services |
|
37,661 |
|
|
22,550 |
|
|
|
126,938 |
|
|
132,225 |
|
||
Corporate |
|
(34,155 |
) |
|
(34,418 |
) |
|
|
(129,110 |
) |
|
(126,863 |
) |
||
Adjusted EBITDA |
$ |
122,775 |
|
$ |
116,462 |
|
|
$ |
498,682 |
|
$ |
473,230 |
|
||
|
|
|
|
|
|
||||||||||
Net income attributable to stockholders |
$ |
29,903 |
|
$ |
49,549 |
|
|
$ |
265,867 |
|
$ |
260,837 |
|
||
Adjustment of redeemable limited partners' capital to redemption amount |
|
— |
|
|
— |
|
|
|
— |
|
|
26,685 |
|
||
Net income attributable to non-controlling interest |
|
808 |
|
|
1,159 |
|
|
|
2,451 |
|
|
17,062 |
|
||
Income tax expense (benefit) |
|
18,488 |
|
|
10,937 |
|
|
|
58,582 |
|
|
(53,943 |
) |
||
Amortization of purchased intangible assets |
|
11,046 |
|
|
10,889 |
|
|
|
43,936 |
|
|
44,753 |
|
||
Stock-based compensation |
|
8,580 |
|
|
7,945 |
|
|
|
46,809 |
|
|
35,915 |
|
||
Acquisition- and disposition-related expenses |
|
1,171 |
|
|
3,206 |
|
|
|
11,453 |
|
|
18,095 |
|
||
Strategic initiative and financial restructuring-related expenses |
|
8,691 |
|
|
1,687 |
|
|
|
18,005 |
|
|
6,990 |
|
||
Loss (gain) on FFF Put and Call Rights |
|
— |
|
|
5,731 |
|
|
|
(64,110 |
) |
|
27,352 |
|
||
Impairment of assets |
|
18,829 |
|
|
— |
|
|
|
18,829 |
|
|
— |
|
||
Other reconciling items, net |
|
1,795 |
|
|
3,706 |
|
|
|
7,284 |
|
|
8,529 |
|
||
Adjusted income before income taxes |
|
99,311 |
|
|
94,809 |
|
|
|
409,106 |
|
|
392,275 |
|
||
Income tax expense on adjusted income before income taxes |
|
25,821 |
|
|
20,858 |
|
|
|
106,368 |
|
|
86,301 |
|
||
Adjusted Net Income |
$ |
73,490 |
|
$ |
73,951 |
|
|
$ |
302,738 |
|
$ |
305,974 |
|
||
Supplemental Financial Information |
|||||||||||||||
Reconciliation of GAAP EPS to Adjusted EPS |
|||||||||||||||
(Unaudited) |
|||||||||||||||
(In thousands, except per share data) |
|||||||||||||||
|
|
|
|
|
|
||||||||||
|
Three Months Ended |
|
Year Ended |
||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
||||||||||
Net income attributable to stockholders |
$ |
29,903 |
|
$ |
49,549 |
|
|
$ |
265,867 |
|
$ |
260,837 |
|
||
Adjustment of redeemable limited partners' capital to redemption amount |
|
— |
|
|
— |
|
|
|
— |
|
|
26,685 |
|
||
Net income attributable to non-controlling interest |
|
808 |
|
|
1,159 |
|
|
|
2,451 |
|
|
17,062 |
|
||
Income tax expense (benefit) |
|
18,488 |
|
|
10,937 |
|
|
|
58,582 |
|
|
(53,943 |
) |
||
Amortization of purchased intangible assets |
|
11,046 |
|
|
10,889 |
|
|
|
43,936 |
|
|
44,753 |
|
||
Stock-based compensation |
|
8,580 |
|
|
7,945 |
|
|
|
46,809 |
|
|
35,915 |
|
||
Acquisition- and disposition-related expenses |
|
1,171 |
|
|
3,206 |
|
|
|
11,453 |
|
|
18,095 |
|
||
Strategic initiative and financial restructuring-related expenses |
|
8,691 |
|
|
1,687 |
|
|
|
18,005 |
|
|
6,990 |
|
||
Loss (gain) on FFF Put and Call Rights |
|
— |
|
|
5,731 |
|
|
|
(64,110 |
) |
|
27,352 |
|
||
Impairment of assets |
|
18,829 |
|
|
— |
|
|
|
18,829 |
|
|
— |
|
||
Other reconciling items, net |
|
1,795 |
|
|
3,706 |
|
|
|
7,284 |
|
|
8,529 |
|
||
Adjusted income before income taxes |
|
99,311 |
|
|
94,809 |
|
|
|
409,106 |
|
|
392,275 |
|
||
Income tax expense on adjusted income before income taxes |
|
25,821 |
|
|
20,858 |
|
|
|
106,368 |
|
|
86,301 |
|
||
Adjusted Net Income |
$ |
73,490 |
|
$ |
73,951 |
|
|
$ |
302,738 |
|
$ |
305,974 |
|
||
|
|
|
|
|
|
||||||||||
Weighted average: |
|
|
|
|
|
||||||||||
Common shares used for basic and diluted earnings per share |
|
118,001 |
|
|
122,341 |
|
|
|
120,220 |
|
|
116,527 |
|
||
Potentially dilutive shares |
|
1,759 |
|
|
1,714 |
|
|
|
1,448 |
|
|
1,005 |
|
||
GAAP weighted average shares outstanding - diluted |
|
119,760 |
|
|
124,055 |
|
|
|
121,668 |
|
|
117,532 |
|
||
Conversion of Class B common units |
|
— |
|
|
— |
|
|
|
— |
|
|
5,638 |
|
||
Weighted average shares outstanding - diluted |
|
119,760 |
|
|
124,055 |
|
|
|
121,668 |
|
|
123,170 |
|
||
|
|
|
|
|
|
||||||||||
Basic earnings per share attributable to stockholders |
$ |
0.25 |
|
$ |
0.41 |
|
|
$ |
2.21 |
|
$ |
2.24 |
|
||
Adjustment of redeemable limited partners' capital to redemption amount |
|
— |
|
|
— |
|
|
|
— |
|
|
0.23 |
|
||
Net income attributable to non-controlling interest |
|
0.01 |
|
|
0.01 |
|
|
|
0.02 |
|
|
0.15 |
|
||
Income tax expense (benefit) |
|
0.16 |
|
|
0.09 |
|
|
|
0.49 |
|
|
(0.46 |
) |
||
Amortization of purchased intangible assets |
|
0.09 |
|
|
0.09 |
|
|
|
0.37 |
|
|
0.38 |
|
||
Stock-based compensation |
|
0.07 |
|
|
0.06 |
|
|
|
0.39 |
|
|
0.31 |
|
||
Acquisition- and disposition-related expenses |
|
0.01 |
|
|
0.03 |
|
|
|
0.10 |
|
|
0.16 |
|
||
Strategic initiative and financial restructuring-related expenses |
|
0.07 |
|
|
0.01 |
|
|
|
0.15 |
|
|
0.06 |
|
||
Loss (gain) on FFF Put and Call Rights |
|
— |
|
|
0.05 |
|
|
|
(0.53 |
) |
|
0.23 |
|
||
Impairment of assets |
|
0.16 |
|
|
— |
|
|
|
0.16 |
|
|
— |
|
||
Other reconciling items, net |
|
0.02 |
|
|
0.03 |
|
|
|
0.06 |
|
|
0.07 |
|
||
Impact of corporation taxes |
|
(0.22 |
) |
|
(0.17 |
) |
|
|
(0.88 |
) |
|
(0.74 |
) |
||
Impact of dilutive shares |
|
(0.01 |
) |
|
(0.01 |
) |
|
|
(0.05 |
) |
|
(0.15 |
) |
||
Adjusted EPS |
$ |
0.61 |
|
$ |
0.60 |
|
|
$ |
2.49 |
|
$ |
2.48 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20220816005086/en/
Investor contact:
Vice President, Investor Relations
704.816.3888
angie_mccabe@premierinc.com
Media contact:
Vice President, Public Relations
202.879.8004
amanda_forster@premierinc.com
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