Premier, Inc. Reports Fiscal-Year 2023 Second-Quarter Results
Premier, Inc. (NASDAQ: PINC) has reported financial results for Q2 FY 2023, announcing a cost-savings plan while revising its fiscal-year guidance. The company experienced a 5% decline in net revenue year-over-year, totaling $359.6 million. Notably, the Supply Chain Services segment faced a 13% drop in total revenue, primarily due to a 40% decline in product sales. Despite the challenging environment, Premier's Performance Services grew by 15%. The planned workforce reduction of nearly 4% aims to save $18 million to $20 million in FY 2023. Adjusted earnings per share decreased by 1% to $0.72. Premier remains focused on long-term growth despite current challenges.
- Performance Services segment revenue growth of 15%.
- Cost-savings expected to provide $18 million to $20 million in FY 2023.
- 5% decline in overall net revenue compared to the previous year.
- 13% drop in Supply Chain Services revenue, with a notable 40% decline in product sales.
- Adjusted earnings per share decreased by 1%.
Announces Cost-Savings Plan and Updates Fiscal-Year 2023 Guidance
"Our second quarter financial performance was largely in line with our expectations as we continued to advance our business strategy," said
Alkire continued, “Like many others,
"We are mitigating the impact of these headwinds to reinforce the strength and resiliency of our business through targeted but meaningful cost-savings measures, including a modest reduction in our workforce. We are also revising our fiscal year 2023 segment revenue guidance to reflect our outlook for the remainder of this fiscal year and our adjusted earnings per share guidance due to the impact of interest and depreciation expense," said Alkire. "With significant, stable cash flows, a flexible balance sheet, and our strong relationships with our members and other customers, we remain confident in our longer-term prospects. We are focused on executing our multi-lever growth strategy to unlock the value in
Consolidated Financial Highlights |
|||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
(in thousands, except per share data) |
2022 |
2021 |
% Change |
|
2022 |
2021 |
% Change |
||||||||||
Net Revenue: |
|
|
|
|
|
|
|
||||||||||
Supply Chain Services: |
|
|
|
|
|
|
|
||||||||||
Net administrative fees |
$ |
154,423 |
|
$ |
150,403 |
|
3 |
% |
|
$ |
304,429 |
|
$ |
299,865 |
|
2 |
% |
Software licenses, other services and support |
|
14,104 |
|
|
9,326 |
|
51 |
% |
|
|
24,931 |
|
|
18,251 |
|
37 |
% |
Services and software licenses |
|
168,527 |
|
|
159,729 |
|
6 |
% |
|
|
329,360 |
|
|
318,116 |
|
4 |
% |
Products |
|
66,993 |
|
|
111,766 |
|
(40 |
%) |
|
|
125,854 |
|
|
230,196 |
|
(45 |
%) |
Total Supply Chain Services |
|
235,520 |
|
|
271,495 |
|
(13 |
%) |
|
|
455,214 |
|
|
548,312 |
|
(17 |
%) |
Performance Services |
|
124,115 |
|
|
107,729 |
|
15 |
% |
|
|
218,304 |
|
|
196,059 |
|
11 |
% |
Total segment net revenue |
|
359,635 |
|
|
379,224 |
|
(5 |
%) |
|
|
673,518 |
|
|
744,371 |
|
(10 |
%) |
Eliminations |
|
(9 |
) |
|
(9 |
) |
— |
% |
|
|
(19 |
) |
|
(9 |
) |
111 |
% |
Net revenue |
$ |
359,626 |
|
$ |
379,215 |
|
(5 |
%) |
|
$ |
673,499 |
|
$ |
744,362 |
|
(10 |
%) |
|
|
|
|
|
|
|
|
||||||||||
Net income |
$ |
64,374 |
|
$ |
77,232 |
|
(17 |
%) |
|
$ |
107,333 |
|
$ |
198,538 |
|
(46 |
%) |
Net income attributable to stockholders |
$ |
64,046 |
|
$ |
75,545 |
|
(15 |
%) |
|
$ |
106,762 |
|
$ |
197,549 |
|
(46 |
%) |
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings per share attributable to stockholders |
$ |
0.54 |
|
$ |
0.62 |
|
(13 |
%) |
|
$ |
0.89 |
|
$ |
1.61 |
|
(45 |
%) |
Consolidated Financial Highlights |
|||||||||||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||
(in thousands, except per share data) |
2022 |
2021 |
% Change |
|
2022 |
2021 |
% Change |
||||||||||
|
|
|
|
|
|
|
|
||||||||||
NON-GAAP FINANCIAL MEASURES*: |
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
||||||||||
Adjusted EBITDA: |
|
|
|
|
|
|
|
||||||||||
Supply Chain Services |
$ |
127,991 |
|
$ |
134,280 |
|
(5 |
%) |
|
$ |
249,188 |
|
$ |
263,549 |
|
(5 |
%) |
Performance Services |
|
43,203 |
|
|
39,010 |
|
11 |
% |
|
|
62,569 |
|
|
62,725 |
|
— |
% |
Total segment adjusted EBITDA |
|
171,194 |
|
|
173,290 |
|
(1 |
%) |
|
|
311,757 |
|
|
326,274 |
|
(4 |
%) |
Corporate |
|
(30,658 |
) |
|
(31,274 |
) |
2 |
% |
|
|
(61,841 |
) |
|
(62,555 |
) |
1 |
% |
Total |
$ |
140,536 |
|
$ |
142,016 |
|
(1 |
%) |
|
$ |
249,916 |
|
$ |
263,719 |
|
(5 |
%) |
Adjusted net income |
$ |
85,650 |
|
$ |
90,011 |
|
(5 |
%) |
|
$ |
148,162 |
|
$ |
165,145 |
|
(10 |
%) |
Adjusted earnings per share |
$ |
0.72 |
|
$ |
0.73 |
|
(1 |
%) |
|
$ |
1.24 |
|
$ |
1.34 |
|
(7 |
%) |
|
|
|
|
|
|
|
|
||||||||||
* Refer to the supplemental financial information at the end of this release for reconciliation of reported GAAP results to non-GAAP results. |
Cost-Savings Plan
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 its financial results for the six months ended
-
Lowering Supply Chain Services net revenue guidance to a range of
to$930 million , reflecting lower direct sourcing products revenue as a result of excess market supply and member inventory levels; lower net administrative fees revenue as overall healthcare utilization has not yet returned to the level the company anticipated and reflected in its original guidance; and a slower ramp in new domestic manufacturing capabilities than initially planned due to manufacturing factory delays.$980 million -
Increasing Performance Services net revenue guidance to a range of
to$450 million , primarily reflecting contributions from the acquisition of key assets from$470 million TRPN Direct Pay, Inc. andDevon Health, Inc. (together, "TRPN") inOctober 2022 partially offset by lower than anticipated revenue contributions from Remitra. -
Lowering adjusted earnings per share (EPS) guidance to a range of
to$2.53 , reflecting the following items:$2.65 - higher depreciation than the company originally contemplated in its initial guidance; and
- an increase in interest expense due to rising interest rates and increased utilization of the company's revolving credit facility to fund its acquisition of TRPN.
-
These items are expected to be partially offset by a tax benefit as the company currently expects its effective tax rate to be at the low-end of its
26% to27% guidance range.
Guidance Metric |
Fiscal 2023 Guidance Range*
(as of |
Previous 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 second quarter of 2023 as compared with the fiscal second quarter of 2022)
Supply Chain Services
Supply Chain Services segment net revenue of
Net administrative fees revenue was
Products revenue of
Segment adjusted EBITDA of
Performance Services
Performance Services segment net revenue of
Segment adjusted EBITDA of
Results of Operations for the Six Months Ended
(As compared with the six months ended
GAAP net revenue of
GAAP net income of
GAAP diluted EPS of
Adjusted EBITDA of
Adjusted net income of
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 six months ended
Net cash used in investing activities and net cash provided by financing activities for the six months ended
Free cash flow for the six months ended
For the six months ending
Conference Call and Webcast
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): |
(833) 953-2438 |
|
International participant dial-in number: |
(412) 317-5767 |
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 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
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, 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, early termination payments to certain former limited partners that elected to execute a Unit Exchange Agreement in connection with 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, our expected effective income tax rate, and the statements under the heading “Fiscal 2023 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
Condensed Consolidated Statements of Income |
|||||||||||||
(Unaudited) |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
||||||||||
|
2022 |
2021 |
|
2022 |
2021 |
||||||||
Net revenue: |
|
|
|
|
|
||||||||
Net administrative fees |
$ |
154,423 |
|
$ |
150,403 |
|
|
$ |
304,429 |
|
$ |
299,865 |
|
Software licenses, other services and support |
|
138,210 |
|
|
117,046 |
|
|
|
243,216 |
|
|
214,301 |
|
Services and software licenses |
|
292,633 |
|
|
267,449 |
|
|
|
547,645 |
|
|
514,166 |
|
Products |
|
66,993 |
|
|
111,766 |
|
|
|
125,854 |
|
|
230,196 |
|
Net revenue |
|
359,626 |
|
|
379,215 |
|
|
|
673,499 |
|
|
744,362 |
|
Cost of revenue: |
|
|
|
|
|
||||||||
Services and software licenses |
|
55,265 |
|
|
45,782 |
|
|
|
109,279 |
|
|
89,591 |
|
Products |
|
61,620 |
|
|
96,933 |
|
|
|
119,494 |
|
|
206,295 |
|
Cost of revenue |
|
116,885 |
|
|
142,715 |
|
|
|
228,773 |
|
|
295,886 |
|
Gross profit |
|
242,741 |
|
|
236,500 |
|
|
|
444,726 |
|
|
448,476 |
|
Operating expenses: |
|
|
|
|
|
||||||||
Selling, general and administrative |
|
140,528 |
|
|
146,840 |
|
|
|
272,578 |
|
|
274,654 |
|
Research and development |
|
1,000 |
|
|
846 |
|
|
|
1,975 |
|
|
1,840 |
|
Amortization of purchased intangible assets |
|
13,047 |
|
|
10,850 |
|
|
|
23,499 |
|
|
21,739 |
|
Operating expenses |
|
154,575 |
|
|
158,536 |
|
|
|
298,052 |
|
|
298,233 |
|
Operating income |
|
88,166 |
|
|
77,964 |
|
|
|
146,674 |
|
|
150,243 |
|
Equity in net income of unconsolidated affiliates |
|
1,674 |
|
|
6,116 |
|
|
|
9,917 |
|
|
13,174 |
|
Interest expense, net |
|
(4,631 |
) |
|
(2,873 |
) |
|
|
(7,490 |
) |
|
(5,661 |
) |
Gain on FFF Put and Call Rights |
|
— |
|
|
— |
|
|
|
— |
|
|
64,110 |
|
Other income, net |
|
2,930 |
|
|
2,392 |
|
|
|
766 |
|
|
2,072 |
|
Other (expense) income, net |
|
(27 |
) |
|
5,635 |
|
|
|
3,193 |
|
|
73,695 |
|
Income before income taxes |
|
88,139 |
|
|
83,599 |
|
|
|
149,867 |
|
|
223,938 |
|
Income tax expense |
|
23,765 |
|
|
6,367 |
|
|
|
42,534 |
|
|
25,400 |
|
Net income |
|
64,374 |
|
|
77,232 |
|
|
|
107,333 |
|
|
198,538 |
|
Net income attributable to non-controlling interest |
|
(328 |
) |
|
(1,687 |
) |
|
|
(571 |
) |
|
(989 |
) |
Net income attributable to stockholders |
$ |
64,046 |
|
$ |
75,545 |
|
|
$ |
106,762 |
|
$ |
197,549 |
|
|
|
|
|
|
|
||||||||
Calculation of GAAP Earnings per Share |
|
|
|
|
|
||||||||
|
|
|
|
|
|
||||||||
Numerator for earnings per share: |
|
|
|
|
|
||||||||
Net income attributable to stockholders |
$ |
64,046 |
|
$ |
75,545 |
|
|
$ |
106,762 |
|
$ |
197,549 |
|
|
|
|
|
|
|
||||||||
Denominator for earnings per share: |
|
|
|
|
|
||||||||
Basic weighted average shares outstanding |
|
118,787 |
|
|
121,181 |
|
|
|
118,569 |
|
|
122,063 |
|
Effect of dilutive securities: |
|
|
|
|
|
||||||||
Stock options |
|
86 |
|
|
267 |
|
|
|
116 |
|
|
288 |
|
Restricted stock |
|
466 |
|
|
540 |
|
|
|
514 |
|
|
516 |
|
Performance share awards |
|
313 |
|
|
485 |
|
|
|
643 |
|
|
656 |
|
Diluted weighted average shares and assumed conversions |
|
119,652 |
|
|
122,473 |
|
|
|
119,842 |
|
|
123,523 |
|
|
|
|
|
|
|
||||||||
Earnings per share attributable to stockholders: |
|
|
|
|
|
||||||||
Basic |
$ |
0.54 |
|
$ |
0.62 |
|
|
$ |
0.90 |
|
$ |
1.62 |
|
Diluted |
$ |
0.54 |
|
$ |
0.62 |
|
|
$ |
0.89 |
|
$ |
1.61 |
|
Condensed Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
(In thousands, except share data) |
||||||
|
|
|
||||
|
|
|
||||
Assets |
|
|
||||
Cash and cash equivalents |
$ |
94,623 |
|
$ |
86,143 |
|
Accounts receivable (net of |
|
120,917 |
|
|
114,129 |
|
Contract assets (net of |
|
284,126 |
|
|
260,061 |
|
Inventory |
|
116,421 |
|
|
119,652 |
|
Prepaid expenses and other current assets |
|
57,878 |
|
|
65,581 |
|
Total current assets |
|
673,965 |
|
|
645,566 |
|
Property and equipment (net of |
|
207,045 |
|
|
213,379 |
|
Intangible assets (net of |
|
452,845 |
|
|
356,572 |
|
|
|
1,069,300 |
|
|
999,913 |
|
Deferred income tax assets |
|
723,073 |
|
|
725,032 |
|
Deferred compensation plan assets |
|
44,609 |
|
|
47,436 |
|
Investments in unconsolidated affiliates |
|
217,110 |
|
|
215,545 |
|
Operating lease right-of-use assets |
|
34,488 |
|
|
39,530 |
|
Other assets |
|
116,959 |
|
|
114,154 |
|
Total assets |
$ |
3,539,394 |
|
$ |
3,357,127 |
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|||||
Accounts payable |
$ |
61,422 |
|
$ |
44,631 |
|
Accrued expenses |
|
49,351 |
|
|
40,968 |
|
Revenue share obligations |
|
255,369 |
|
|
245,395 |
|
Accrued compensation and benefits |
|
56,591 |
|
|
93,638 |
|
Deferred revenue |
|
26,964 |
|
|
30,463 |
|
Current portion of notes payable to former limited partners |
|
98,736 |
|
|
97,806 |
|
Line of credit and current portion of long-term debt |
|
301,946 |
|
|
153,053 |
|
Other current liabilities |
|
83,649 |
|
|
47,183 |
|
Total current liabilities |
|
934,028 |
|
|
753,137 |
|
Long-term debt, less current portion |
|
1,008 |
|
|
2,280 |
|
Notes payable to former limited partners, less current portion |
|
151,588 |
|
|
201,188 |
|
Deferred compensation plan obligations |
|
44,609 |
|
|
47,436 |
|
Deferred consideration, less current portion |
|
29,026 |
|
|
28,702 |
|
Operating lease liabilities, less current portion |
|
27,487 |
|
|
32,960 |
|
Other liabilities |
|
45,575 |
|
|
42,574 |
|
Total liabilities |
|
1,233,321 |
|
|
1,108,277 |
|
|
|
|
||||
Commitments and contingencies |
|
|
||||
Stockholders' equity: |
|
|
||||
Class A common stock, |
|
1,253 |
|
|
1,245 |
|
|
|
(250,129 |
) |
|
(250,129 |
) |
Additional paid-in capital |
|
2,166,909 |
|
|
2,166,047 |
|
Retained earnings |
|
388,052 |
|
|
331,690 |
|
Accumulated other comprehensive loss |
|
(12 |
) |
|
(3 |
) |
Total stockholders' equity |
|
2,306,073 |
|
|
2,248,850 |
|
Total liabilities and stockholders' equity |
$ |
3,539,394 |
|
$ |
3,357,127 |
|
Condensed Consolidated Statements of Cash Flows |
||||||
(Unaudited) |
||||||
(In thousands) |
||||||
|
|
|
||||
|
Six Months Ended |
|||||
|
2022 |
2021 |
||||
Operating activities |
|
|
||||
Net income |
$ |
107,333 |
|
$ |
198,538 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
||||
Depreciation and amortization |
|
68,377 |
|
|
63,205 |
|
Equity in net income of unconsolidated affiliates |
|
(9,917 |
) |
|
(13,174 |
) |
Deferred income taxes |
|
1,959 |
|
|
19,890 |
|
Stock-based compensation |
|
9,815 |
|
|
23,788 |
|
Gain on FFF Put and Call Rights |
|
— |
|
|
(64,110 |
) |
Other |
|
10,167 |
|
|
930 |
|
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
||||
Accounts receivable, inventories, prepaid expenses and other assets |
|
15,771 |
|
|
50,164 |
|
Contract assets |
|
(26,458 |
) |
|
(22,963 |
) |
Accounts payable, accrued expenses, deferred revenue, revenue share obligations and other liabilities |
|
19,678 |
|
|
(58,741 |
) |
Net cash provided by operating activities |
$ |
196,725 |
|
$ |
197,527 |
|
Investing activities |
|
|
||||
Purchases of property and equipment |
$ |
(38,416 |
) |
$ |
(42,660 |
) |
Acquisition of businesses and equity method investments, net of cash acquired |
|
(187,750 |
) |
|
(26,000 |
) |
Other |
|
(1,300 |
) |
|
— |
|
Net cash used in investing activities |
$ |
(227,466 |
) |
$ |
(68,660 |
) |
Financing activities |
|
|
||||
Payments made on notes payable |
$ |
(51,049 |
) |
$ |
(50,621 |
) |
Proceeds from credit facility |
|
285,000 |
|
|
175,000 |
|
Payments on credit facility |
|
(135,000 |
) |
|
(125,000 |
) |
Proceeds from exercise of stock options under equity incentive plan |
|
704 |
|
|
37,267 |
|
Cash dividends paid |
|
(50,205 |
) |
|
(49,044 |
) |
Repurchase of Class A common stock (held as treasury stock) |
|
— |
|
|
(173,916 |
) |
Other |
|
(10,220 |
) |
|
14,468 |
|
Net cash provided by financing activities |
$ |
39,230 |
|
$ |
(171,846 |
) |
Effect of exchange rate changes on cash flows |
|
(9 |
) |
|
(1 |
) |
Net increase (decrease) in cash and cash equivalents |
|
8,480 |
|
|
(42,980 |
) |
Cash and cash equivalents at beginning of year |
|
86,143 |
|
|
129,141 |
|
Cash and cash equivalents at end of period |
$ |
94,623 |
|
$ |
86,161 |
|
Supplemental Financial Information |
||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
||||||
(Unaudited) |
||||||
(In thousands) |
||||||
|
|
|
||||
|
Six Months Ended |
|||||
|
2022 |
2021 |
||||
Net cash provided by operating activities |
$ |
196,725 |
|
$ |
197,527 |
|
Purchases of property and equipment |
|
(38,416 |
) |
|
(42,660 |
) |
Early termination payments to certain former limited partners that elected to execute a Unit Exchange Agreement (a) |
|
(48,670 |
) |
|
(47,741 |
) |
Free Cash Flow |
$ |
109,639 |
|
$ |
107,126 |
|
(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 |
|
Six Months Ended |
||||||||||
|
|
|
|
||||||||||
|
2022 |
2021 |
|
2022 |
2021 |
||||||||
Net income |
$ |
64,374 |
|
$ |
77,232 |
|
|
$ |
107,333 |
|
$ |
198,538 |
|
Interest expense, net |
|
4,631 |
|
|
2,873 |
|
|
|
7,490 |
|
|
5,661 |
|
Income tax expense |
|
23,765 |
|
|
6,367 |
|
|
|
42,534 |
|
|
25,400 |
|
Depreciation and amortization |
|
21,439 |
|
|
20,870 |
|
|
|
44,878 |
|
|
41,466 |
|
Amortization of purchased intangible assets |
|
13,047 |
|
|
10,850 |
|
|
|
23,499 |
|
|
21,739 |
|
EBITDA |
|
127,256 |
|
|
118,192 |
|
|
|
225,734 |
|
|
292,804 |
|
Stock-based compensation |
|
2,801 |
|
|
16,330 |
|
|
|
10,150 |
|
|
24,081 |
|
Acquisition- and disposition-related expenses |
|
3,138 |
|
|
3,746 |
|
|
|
5,298 |
|
|
7,167 |
|
Strategic initiative and financial restructuring-related expenses |
|
7,527 |
|
|
3,749 |
|
|
|
9,046 |
|
|
3,774 |
|
Gain on FFF Put and Call Rights |
|
— |
|
|
— |
|
|
|
— |
|
|
(64,110 |
) |
Other reconciling items, net |
|
(186 |
) |
|
(1 |
) |
|
|
(312 |
) |
|
3 |
|
Adjusted EBITDA |
$ |
140,536 |
|
$ |
142,016 |
|
|
$ |
249,916 |
|
$ |
263,719 |
|
|
|
|
|
|
|
||||||||
Income before income taxes |
$ |
88,139 |
|
$ |
83,599 |
|
|
$ |
149,867 |
|
$ |
223,938 |
|
Equity in net income of unconsolidated affiliates |
|
(1,674 |
) |
|
(6,116 |
) |
|
|
(9,917 |
) |
|
(13,174 |
) |
Interest expense, net |
|
4,631 |
|
|
2,873 |
|
|
|
7,490 |
|
|
5,661 |
|
Gain on FFF Put and Call Rights |
|
— |
|
|
— |
|
|
|
— |
|
|
(64,110 |
) |
Other expense, net |
|
(2,930 |
) |
|
(2,392 |
) |
|
|
(766 |
) |
|
(2,072 |
) |
Operating income |
|
88,166 |
|
|
77,964 |
|
|
|
146,674 |
|
|
150,243 |
|
Depreciation and amortization |
|
21,439 |
|
|
20,870 |
|
|
|
44,878 |
|
|
41,466 |
|
Amortization of purchased intangible assets |
|
13,047 |
|
|
10,850 |
|
|
|
23,499 |
|
|
21,739 |
|
Stock-based compensation |
|
2,801 |
|
|
16,330 |
|
|
|
10,150 |
|
|
24,081 |
|
Acquisition- and disposition-related expenses |
|
3,138 |
|
|
3,746 |
|
|
|
5,298 |
|
|
7,167 |
|
Strategic initiative and financial restructuring-related expenses |
|
7,527 |
|
|
3,749 |
|
|
|
9,046 |
|
|
3,774 |
|
Equity in net income of unconsolidated affiliates |
|
1,674 |
|
|
6,116 |
|
|
|
9,917 |
|
|
13,174 |
|
Deferred compensation plan income |
|
2,659 |
|
|
2,389 |
|
|
|
289 |
|
|
2,071 |
|
Other reconciling items, net |
|
85 |
|
|
2 |
|
|
|
165 |
|
|
4 |
|
Adjusted EBITDA |
$ |
140,536 |
|
$ |
142,016 |
|
|
$ |
249,916 |
|
$ |
263,719 |
|
|
|
|
|
|
|
||||||||
SEGMENT ADJUSTED EBITDA |
|
|
|
|
|
||||||||
Supply Chain Services |
$ |
127,991 |
|
$ |
134,280 |
|
|
$ |
249,188 |
|
$ |
263,549 |
|
Performance Services |
|
43,203 |
|
|
39,010 |
|
|
|
62,569 |
|
|
62,725 |
|
Corporate |
|
(30,658 |
) |
|
(31,274 |
) |
|
|
(61,841 |
) |
|
(62,555 |
) |
Adjusted EBITDA |
$ |
140,536 |
|
$ |
142,016 |
|
|
$ |
249,916 |
|
$ |
263,719 |
|
|
|
|
|
|
|
||||||||
Net income attributable to stockholders |
$ |
64,046 |
|
$ |
75,545 |
|
|
$ |
106,762 |
|
$ |
197,549 |
|
Net income attributable to non-controlling interest |
|
328 |
|
|
1,687 |
|
|
|
571 |
|
|
989 |
|
Income tax expense |
|
23,765 |
|
|
6,367 |
|
|
|
42,534 |
|
|
25,400 |
|
Amortization of purchased intangible assets |
|
13,047 |
|
|
10,850 |
|
|
|
23,499 |
|
|
21,739 |
|
Stock-based compensation |
|
2,801 |
|
|
16,330 |
|
|
|
10,150 |
|
|
24,081 |
|
Acquisition- and disposition-related expenses |
|
3,138 |
|
|
3,746 |
|
|
|
5,298 |
|
|
7,167 |
|
Strategic initiative and financial restructuring-related expenses |
|
7,527 |
|
|
3,749 |
|
|
|
9,046 |
|
|
3,774 |
|
Gain on FFF Put and Call Rights |
|
— |
|
|
— |
|
|
|
— |
|
|
(64,110 |
) |
Other reconciling items, net |
|
1,091 |
|
|
1,741 |
|
|
|
2,359 |
|
|
3,604 |
|
Adjusted income before income taxes |
|
115,743 |
|
|
120,015 |
|
|
|
200,219 |
|
|
220,193 |
|
Income tax expense on adjusted income before income taxes |
|
30,093 |
|
|
30,004 |
|
|
|
52,057 |
|
|
55,048 |
|
Adjusted Net Income |
$ |
85,650 |
|
$ |
90,011 |
|
|
$ |
148,162 |
|
$ |
165,145 |
|
Supplemental Financial Information |
|||||||||||||
Reconciliation of GAAP EPS to Adjusted EPS |
|||||||||||||
(Unaudited) |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Six Months Ended |
||||||||||
|
|
|
|
||||||||||
|
2022 |
2021 |
|
2022 |
2021 |
||||||||
|
|
|
|
|
|
||||||||
Net income attributable to stockholders |
$ |
64,046 |
|
$ |
75,545 |
|
|
$ |
106,762 |
|
$ |
197,549 |
|
Net income attributable to non-controlling interest |
|
328 |
|
|
1,687 |
|
|
|
571 |
|
|
989 |
|
Income tax expense |
|
23,765 |
|
|
6,367 |
|
|
|
42,534 |
|
|
25,400 |
|
Amortization of purchased intangible assets |
|
13,047 |
|
|
10,850 |
|
|
|
23,499 |
|
|
21,739 |
|
Stock-based compensation |
|
2,801 |
|
|
16,330 |
|
|
|
10,150 |
|
|
24,081 |
|
Acquisition- and disposition-related expenses |
|
3,138 |
|
|
3,746 |
|
|
|
5,298 |
|
|
7,167 |
|
Strategic initiative and financial restructuring-related expenses |
|
7,527 |
|
|
3,749 |
|
|
|
9,046 |
|
|
3,774 |
|
Gain on FFF Put and Call Rights |
|
— |
|
|
— |
|
|
|
— |
|
|
(64,110 |
) |
Other reconciling items, net |
|
1,091 |
|
|
1,741 |
|
|
|
2,359 |
|
|
3,604 |
|
Adjusted income before income taxes |
|
115,743 |
|
|
120,015 |
|
|
|
200,219 |
|
|
220,193 |
|
Income tax expense on adjusted income before income taxes |
|
30,093 |
|
|
30,004 |
|
|
|
52,057 |
|
|
55,048 |
|
Adjusted Net Income |
$ |
85,650 |
|
$ |
90,011 |
|
|
$ |
148,162 |
|
$ |
165,145 |
|
|
|
|
|
|
|
||||||||
Weighted average: |
|
|
|
|
|
||||||||
Common shares used for basic and diluted earnings per share |
|
118,787 |
|
|
121,181 |
|
|
|
118,569 |
|
|
122,063 |
|
Potentially dilutive shares |
|
865 |
|
|
1,292 |
|
|
|
1,273 |
|
|
1,460 |
|
Weighted average shares outstanding - diluted |
|
119,652 |
|
|
122,473 |
|
|
|
119,842 |
|
|
123,523 |
|
|
|
|
|
|
|
||||||||
Basic earnings per share attributable to stockholders |
$ |
0.54 |
|
$ |
0.62 |
|
|
$ |
0.90 |
|
$ |
1.62 |
|
Net income attributable to non-controlling interest |
|
— |
|
|
0.01 |
|
|
|
— |
|
|
0.01 |
|
Income tax expense |
|
0.20 |
|
|
0.05 |
|
|
|
0.36 |
|
|
0.21 |
|
Amortization of purchased intangible assets |
|
0.11 |
|
|
0.09 |
|
|
|
0.20 |
|
|
0.18 |
|
Stock-based compensation |
|
0.02 |
|
|
0.13 |
|
|
|
0.09 |
|
|
0.20 |
|
Acquisition- and disposition-related expenses |
|
0.03 |
|
|
0.03 |
|
|
|
0.04 |
|
|
0.06 |
|
Strategic initiative and financial restructuring-related expenses |
|
0.06 |
|
|
0.03 |
|
|
|
0.08 |
|
|
0.03 |
|
Gain on FFF Put and Call Rights |
|
— |
|
|
— |
|
|
|
— |
|
|
(0.53 |
) |
Other reconciling items, net |
|
0.01 |
|
|
0.03 |
|
|
|
0.02 |
|
|
0.03 |
|
Impact of corporation taxes |
|
(0.25 |
) |
|
(0.25 |
) |
|
|
(0.44 |
) |
|
(0.45 |
) |
Impact of dilutive shares |
|
— |
|
|
(0.01 |
) |
|
|
(0.01 |
) |
|
(0.02 |
) |
Adjusted EPS |
$ |
0.72 |
|
$ |
0.73 |
|
|
$ |
1.24 |
|
$ |
1.34 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230207005148/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
Source:
FAQ
What were Premier, Inc.'s Q2 FY 2023 financial results?
How does the cost-savings plan affect Premier, Inc.?