Premier, Inc. Reports Fiscal-Year 2024 Third-Quarter Results
Premier, Inc. (NASDAQ: PINC) reported fiscal-year 2024 third-quarter results with total net revenue of $342.6 million, reflecting a 6% growth over the prior-year period. The company experienced a GAAP net loss of $49.2 million, and adjusted earnings per share remained flat at $0.55. Premier executed a $400 million accelerated share repurchase transaction during the quarter and reaffirmed its fiscal 2024 financial guidance.
Revenue growth of 6% over the prior-year period.
Exceeded expectations for profitability.
Reaffirmed fiscal 2024 financial guidance.
Implemented $400 million accelerated share repurchase transaction.
GAAP net loss of $49.2 million.
Adjusted earnings per share remained flat.
Goodwill, intangible, and other long-lived assets impairment of $140.1 million.
Net loss of $49.2 million, representing a 201% decrease over the prior year.
- Reaffirming fiscal 2024 financial guidance ranges
-
Executed
$400 million
Third-quarter results:
-
Total net revenue of
$342.6 million 6% over the prior-year period -
GAAP net loss of
$49.2 million $(0.36) $140.1 million -
Adjusted earnings per share* of
$0.55
"Our third quarter results, which exceeded our expectations for profitability, reflect ongoing adoption of our products and services by members and other customers,” said Michael J. Alkire, Premier’s President and CEO. “Consolidated net revenue increased from the prior-year period driven by growth in both our Supply Chain Services and Performance Services segments. We are reaffirming our fiscal 2024 guidance and also continue to return capital to stockholders as we implemented our
Consolidated Financial Highlights |
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Three Months Ended March 31, |
|
Nine Months Ended March 31, |
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(in thousands, except per share data) |
|
2024 |
|
|
2023 |
|
% Change |
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|
2024 |
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|
2023 |
|
% Change |
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Net revenue: |
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Supply Chain Services: |
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|
|
|
|
|
|
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Net administrative fees |
$ |
156,819 |
|
$ |
148,441 |
|
6 |
% |
|
$ |
455,409 |
|
$ |
452,870 |
|
1 |
% |
Software licenses, other services and support |
|
14,257 |
|
|
11,032 |
|
29 |
% |
|
|
37,954 |
|
|
35,963 |
|
6 |
% |
Services and software licenses |
|
171,076 |
|
|
159,473 |
|
7 |
% |
|
|
493,363 |
|
|
488,833 |
|
1 |
% |
Products |
|
56,590 |
|
|
57,212 |
|
(1 |
%) |
|
|
162,956 |
|
|
183,066 |
|
(11 |
%) |
Total Supply Chain Services |
|
227,666 |
|
|
216,685 |
|
5 |
% |
|
|
656,319 |
|
|
671,899 |
|
(2 |
%) |
Performance Services |
|
115,003 |
|
|
105,556 |
|
9 |
% |
|
|
339,972 |
|
|
323,860 |
|
5 |
% |
Total segment net revenue |
|
342,669 |
|
|
322,241 |
|
6 |
% |
|
|
996,291 |
|
|
995,759 |
|
— |
% |
Eliminations |
|
(73 |
) |
|
(9 |
) |
711 |
% |
|
|
(198 |
) |
|
(28 |
) |
607 |
% |
Net revenue |
$ |
342,596 |
|
$ |
322,232 |
|
6 |
% |
|
$ |
996,093 |
|
$ |
995,731 |
|
— |
% |
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income |
$ |
(49,162 |
) |
$ |
48,649 |
|
(201 |
%) |
|
$ |
46,114 |
|
$ |
155,982 |
|
(70 |
%) |
Net (loss) income attributable to stockholders |
$ |
(40,195 |
) |
$ |
46,801 |
|
(186 |
%) |
|
$ |
58,868 |
|
$ |
153,563 |
|
(62 |
%) |
|
|
|
|
|
|
|
|
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Diluted (loss) earnings per share attributable to stockholders |
$ |
(0.36 |
) |
$ |
0.39 |
|
(192 |
%) |
|
$ |
0.50 |
|
$ |
1.28 |
|
(61 |
%) |
Consolidated Financial Highlights |
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Three Months Ended March 31, |
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Nine Months Ended March 31, |
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(in thousands, except per share data) |
|
2024 |
|
|
2023 |
|
% Change |
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|
2024 |
|
|
2023 |
|
% Change |
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NON-GAAP FINANCIAL MEASURES*: |
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Adjusted EBITDA: |
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|
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|
|
|
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Supply Chain Services |
$ |
114,021 |
|
$ |
117,474 |
|
(3 |
%) |
|
$ |
343,486 |
|
$ |
356,978 |
|
(4 |
%) |
Performance Services |
|
27,039 |
|
|
24,954 |
|
8 |
% |
|
|
79,768 |
|
|
87,290 |
|
(9 |
%) |
Total segment adjusted EBITDA |
|
141,060 |
|
|
142,428 |
|
(1 |
%) |
|
|
423,254 |
|
|
444,268 |
|
(5 |
%) |
Corporate |
|
(33,778 |
) |
|
(29,772 |
) |
(13 |
%) |
|
|
(96,105 |
) |
|
(91,613 |
) |
(5 |
%) |
Adjusted EBITDA |
$ |
107,282 |
|
$ |
112,656 |
|
(5 |
%) |
|
$ |
327,149 |
|
$ |
352,655 |
|
(7 |
%) |
Adjusted net income |
$ |
61,191 |
|
$ |
66,357 |
|
(8 |
%) |
|
$ |
192,279 |
|
$ |
207,391 |
|
(7 |
%) |
Adjusted earnings per share (EPS) |
$ |
0.55 |
|
$ |
0.55 |
|
— |
% |
|
$ |
1.64 |
|
$ |
1.73 |
|
(5 |
%) |
|
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|
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*These are non-GAAP financial measures. Refer to "Premier's Use and Definition of Non-GAAP Measures" below and the supplemental financial information at the end of this release for information on the company's use of non-GAAP measures and a reconciliation of reported GAAP results to non-GAAP results. |
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Fiscal 2024 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 "Cautionary Note Regarding Forward-Looking Statements" below.
Based on its financial results for the nine months ended March 31, 2024, current visibility into the macro environment, and expectations for the remainder of this fiscal year, the company is reaffirming the following fiscal 2024 guidance ranges:
Guidance Metric |
Fiscal 2024 Guidance Range** (as of May 7, 2024) |
Segment Net Revenue: |
|
Supply Chain Services |
|
Performance Services |
|
Total Net Revenue |
|
Adjusted EBITDA |
|
Adjusted EPS |
|
Fiscal 2024 guidance is based on the realization of the following key assumptions:
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** Adjusted EBITDA, adjusted EPS and free cash flow presented in this financial guidance are forward-looking non-GAAP measures. Refer to "Premier's Use and Definition of Non-GAAP Measures" below for information on the company's use of non-GAAP measures. Premier, Inc. 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. |
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Results of Operations for the Three Months Ended March 31, 2024
(As compared with the three months ended March 31, 2023)
GAAP net revenue of
GAAP net loss of
GAAP diluted EPS of
Adjusted EBITDA of
Adjusted net income of
Segment Results
(For the fiscal third quarter of 2024 as compared with the fiscal third quarter of 2023)
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
Result of Operations for the Nine Months Ended March 31, 2024
(As compared with the nine months ended March 31, 2023)
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 ("operating cash flow") for the nine months ended March 31, 2024 of
Net cash used in investing activities and net cash used in financing activities for the nine months ended March 31, 2024, were
Free cash flow for the nine months ended March 31, 2024 was
During the first nine months of fiscal 2024, the company paid aggregate dividends of
Conference Call and Webcast
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, along with the accompanying presentation, will be available at the following link: Premier Events. 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): |
(833) 953-2438 |
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International participant dial-in number: |
(412) 317-5767 |
About Premier, Inc.
Premier, Inc. (NASDAQ: PINC) is a leading healthcare improvement company, uniting an alliance of more than 4,350
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. These are non-GAAP financial measures that are not in accordance with, or an alternative to, GAAP, and may be different from non-GAAP financial measures used by other companies. We include these non-GAAP financial measures 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, we believe 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 enables the company to seek enhancement of 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, 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.
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. 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 effect of non-recurring or non-cash items, including certain strategic initiative- and financial restructuring-related expenses, (iv) 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 and (v) excluding the equity in net income of unconsolidated affiliates.
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.
The Company has revised the definitions for Adjusted EBITDA, Segment Adjusted EBITDA and Adjusted Net Income from the definitions reported in the 2023 Annual Report. Adjusted EBITDA and segment Adjusted EBITDA definitions were revised to exclude the impact of equity earnings in unconsolidated affiliates. The Adjusted Net Income definition was revised (1) remove the exclusion of the impact of adjustment of redeemable limited partners’ capital to redemption amount, (2) remove the impact of the exchange of all Class B common units for shares of Class A common stock for periods prior to our August 2020 Restructuring and the resulting elimination of non-controlling interest in Premier LP, and (3) add the exclusion of equity earnings in unconsolidated affiliates. For comparability purposes, prior year non-GAAP financial measures are presented based on the current definitions in the above section.
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-Q for the quarter ended December 31, 2023, expected to be filed with the SEC shortly after this release, and which will also be made available on Premier's website at investors.premierinc.com.
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, but are not limited to, 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, including, but not limited to those related to our ability to advance our long-term strategies and develop innovations for, transform and improve healthcare, our ability to find partners for our S2S Global and Contigo Health businesses and the potential benefits thereof, our ability to fund and conduct share repurchases pursuant to the share repurchase authorization and the potential benefits thereof (including the accelerated share repurchase transaction, which could be affected by volatility or disruptions in the capital markets or other factors), the payment of dividends at current levels or at all, guidance on expected future financial performance and assumptions underlying that guidance, and our expected effective income tax rate, 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 risks and uncertainties, many of which are outside Premier’s control. More information on risks and uncertainties that could affect Premier’s business, achievements, performance, financial condition, and 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 the information in those sections of Premier’s Form 10-K for the year ended June 30, 2023 and subsequent Quarterly Reports on Form 10-Q, including the Form 10-Q for the quarter ended March 31, 2024, expected to be filed with the SEC shortly after the date of this release, all of which are 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 |
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(Unaudited) |
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(In thousands, except per share data) |
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Three Months Ended |
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Nine Months Ended |
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|
March 31, |
|
March 31, |
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|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Net revenue: |
|
|
|
|
|
||||||||
Net administrative fees |
$ |
156,819 |
|
$ |
148,441 |
|
|
$ |
455,409 |
|
$ |
452,870 |
|
Software licenses, other services and support |
|
129,187 |
|
|
116,579 |
|
|
|
377,728 |
|
|
359,795 |
|
Services and software licenses |
|
286,006 |
|
|
265,020 |
|
|
|
833,137 |
|
|
812,665 |
|
Products |
|
56,590 |
|
|
57,212 |
|
|
|
162,956 |
|
|
183,066 |
|
Net revenue |
|
342,596 |
|
|
322,232 |
|
|
|
996,093 |
|
|
995,731 |
|
Cost of revenue: |
|
|
|
|
|
||||||||
Services and software licenses |
|
70,336 |
|
|
54,149 |
|
|
|
200,458 |
|
|
163,428 |
|
Products |
|
51,927 |
|
|
49,013 |
|
|
|
143,437 |
|
|
168,507 |
|
Cost of revenue |
|
122,263 |
|
|
103,162 |
|
|
|
343,895 |
|
|
331,935 |
|
Gross profit |
|
220,333 |
|
|
219,070 |
|
|
|
652,198 |
|
|
663,796 |
|
Operating expenses: |
|
|
|
|
|
||||||||
Selling, general and administrative |
|
286,121 |
|
|
143,587 |
|
|
|
566,331 |
|
|
416,165 |
|
Research and development |
|
661 |
|
|
1,001 |
|
|
|
2,452 |
|
|
2,976 |
|
Amortization of purchased intangible assets |
|
12,280 |
|
|
11,916 |
|
|
|
37,480 |
|
|
35,415 |
|
Operating expenses |
|
299,062 |
|
|
156,504 |
|
|
|
606,263 |
|
|
454,556 |
|
Operating (loss) income |
|
(78,729 |
) |
|
62,566 |
|
|
|
45,935 |
|
|
209,240 |
|
Equity in net income (loss) of unconsolidated affiliates |
|
753 |
|
|
4,630 |
|
|
|
(1,639 |
) |
|
14,547 |
|
Interest (expense) income, net |
|
(1,763 |
) |
|
(4,269 |
) |
|
|
870 |
|
|
(11,759 |
) |
Other income, net |
|
14,913 |
|
|
2,954 |
|
|
|
18,500 |
|
|
3,720 |
|
Other income, net |
|
13,903 |
|
|
3,315 |
|
|
|
17,731 |
|
|
6,508 |
|
(Loss) income before income taxes |
|
(64,826 |
) |
|
65,881 |
|
|
|
63,666 |
|
|
215,748 |
|
Income tax (benefit) expense |
|
(15,664 |
) |
|
17,232 |
|
|
|
17,552 |
|
|
59,766 |
|
Net (loss) income |
|
(49,162 |
) |
|
48,649 |
|
|
|
46,114 |
|
|
155,982 |
|
Net loss (income) attributable to non-controlling interest |
|
8,967 |
|
|
(1,848 |
) |
|
|
12,754 |
|
|
(2,419 |
) |
Net (loss) income attributable to stockholders |
$ |
(40,195 |
) |
$ |
46,801 |
|
|
$ |
58,868 |
|
$ |
153,563 |
|
|
|
|
|
|
|
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Calculation of GAAP (Loss) Earnings per Share |
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Numerator for basic and diluted (loss) earnings per share: |
|
|
|
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|
||||||||
Net (loss) income attributable to stockholders |
$ |
(40,195 |
) |
$ |
46,801 |
|
|
$ |
58,868 |
|
$ |
153,563 |
|
|
|
|
|
|
|
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Denominator for (loss) earnings per share: |
|
|
|
|
|
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Basic weighted average shares outstanding |
|
111,156 |
|
|
118,872 |
|
|
|
116,754 |
|
|
118,668 |
|
Effect of dilutive securities: |
|
|
|
|
|
||||||||
Stock options |
|
— |
|
|
76 |
|
|
|
— |
|
|
103 |
|
Restricted stock units |
|
— |
|
|
528 |
|
|
|
484 |
|
|
519 |
|
Performance share awards |
|
— |
|
|
340 |
|
|
|
85 |
|
|
542 |
|
Diluted weighted average shares |
|
111,156 |
|
|
119,816 |
|
|
|
117,323 |
|
|
119,832 |
|
|
|
|
|
|
|
||||||||
(Loss) earnings per share attributable to stockholders: |
|
|
|
|
|
||||||||
Basic |
$ |
(0.36 |
) |
$ |
0.39 |
|
|
$ |
0.50 |
|
$ |
1.29 |
|
Diluted |
$ |
(0.36 |
) |
$ |
0.39 |
|
|
$ |
0.50 |
|
$ |
1.28 |
|
Condensed Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
(In thousands, except share data) |
||||||
|
|
|
||||
|
March 31, 2024 |
June 30, 2023 |
||||
Assets |
|
|
||||
Cash and cash equivalents |
$ |
61,856 |
|
$ |
89,793 |
|
Accounts receivable (net of |
|
121,159 |
|
|
115,295 |
|
Contract assets (net of |
|
334,256 |
|
|
299,219 |
|
Inventory |
|
77,795 |
|
|
76,932 |
|
Prepaid expenses and other current assets |
|
79,633 |
|
|
60,387 |
|
Total current assets |
|
674,699 |
|
|
641,626 |
|
Property and equipment (net of |
|
206,363 |
|
|
212,308 |
|
Intangible assets (net of |
|
279,053 |
|
|
430,030 |
|
Goodwill |
|
995,852 |
|
|
1,012,355 |
|
Deferred income tax assets |
|
805,741 |
|
|
653,629 |
|
Deferred compensation plan assets |
|
52,754 |
|
|
50,346 |
|
Investments in unconsolidated affiliates |
|
228,511 |
|
|
231,826 |
|
Operating lease right-of-use assets |
|
21,700 |
|
|
29,252 |
|
Other assets |
|
99,057 |
|
|
110,115 |
|
Total assets |
$ |
3,363,730 |
|
$ |
3,371,487 |
|
|
|
|
||||
Liabilities and stockholders' equity |
|
|||||
Accounts payable |
$ |
67,341 |
|
$ |
54,375 |
|
Accrued expenses |
|
69,492 |
|
|
47,113 |
|
Revenue share obligations |
|
291,762 |
|
|
262,288 |
|
Accrued compensation and benefits |
|
77,780 |
|
|
60,591 |
|
Deferred revenue |
|
20,502 |
|
|
24,311 |
|
Current portion of notes payable to former limited partners |
|
101,059 |
|
|
99,665 |
|
Line of credit and current portion of long-term debt |
|
1,008 |
|
|
216,546 |
|
Current portion of liability related to the sale of future revenues |
|
36,615 |
|
|
— |
|
Other current liabilities |
|
60,120 |
|
|
50,574 |
|
Total current liabilities |
|
725,679 |
|
|
815,463 |
|
Long-term debt, less current portion |
|
— |
|
|
734 |
|
Liability related to the sale of future revenues, less current portion |
|
569,042 |
|
|
— |
|
Notes payable to former limited partners, less current portion |
|
25,555 |
|
|
101,523 |
|
Deferred compensation plan obligations |
|
52,754 |
|
|
50,346 |
|
Operating lease liabilities, less current portion |
|
13,074 |
|
|
21,864 |
|
Other liabilities |
|
54,328 |
|
|
47,202 |
|
Total liabilities |
|
1,440,432 |
|
|
1,037,132 |
|
|
|
|
||||
Commitments and contingencies |
|
|
||||
Stockholders' equity: |
|
|
||||
Class A common stock, |
|
1,112 |
|
|
1,256 |
|
Treasury stock, at cost; 6,429,375 shares at both March 31, 2024 and June 30, 2023 |
|
(250,129 |
) |
|
(250,129 |
) |
Additional paid-in capital |
|
2,104,916 |
|
|
2,178,134 |
|
Retained earnings |
|
67,400 |
|
|
405,102 |
|
Accumulated other comprehensive loss |
|
(1 |
) |
|
(8 |
) |
Total stockholders' equity |
|
1,923,298 |
|
|
2,334,355 |
|
Total liabilities and stockholders' equity |
$ |
3,363,730 |
|
$ |
3,371,487 |
|
Condensed Consolidated Statements of Cash Flows |
||||||
(Unaudited) |
||||||
(In thousands) |
||||||
|
|
|
||||
|
Nine Months Ended March 31, |
|||||
|
|
2024 |
|
|
2023 |
|
Operating activities |
|
|
||||
Net income |
$ |
46,114 |
|
$ |
155,982 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
||||
Depreciation and amortization |
|
98,572 |
|
|
100,568 |
|
Equity in net loss (income) of unconsolidated affiliates |
|
1,639 |
|
|
(14,547 |
) |
Deferred income taxes |
|
(152,112 |
) |
|
2,083 |
|
Stock-based compensation |
|
23,215 |
|
|
16,375 |
|
Impairment of assets |
|
140,053 |
|
|
— |
|
Other, net |
|
(7,653 |
) |
|
3,066 |
|
Changes in operating assets and liabilities, net of the effects of acquisitions: |
|
|
||||
Accounts receivable |
|
(5,864 |
) |
|
483 |
|
Contract assets |
|
(37,693 |
) |
|
(31,975 |
) |
Inventory |
|
(863 |
) |
|
25,221 |
|
Prepaid expenses and other assets |
|
(668 |
) |
|
21,685 |
|
Accounts payable |
|
15,673 |
|
|
8,641 |
|
Revenue share obligations |
|
29,474 |
|
|
12,717 |
|
Accrued expenses, deferred revenue and other liabilities |
|
40,383 |
|
|
30,879 |
|
Net cash provided by operating activities |
$ |
190,270 |
|
$ |
331,178 |
|
Investing activities |
|
|
||||
Purchases of property and equipment |
$ |
(67,626 |
) |
$ |
(58,464 |
) |
Sale of investment in unconsolidated affiliates |
|
12,753 |
|
|
— |
|
Acquisition of businesses and equity method investments, net of cash acquired |
|
— |
|
|
(187,750 |
) |
Other |
|
(30 |
) |
|
(3,570 |
) |
Net cash used in investing activities |
$ |
(54,903 |
) |
$ |
(249,784 |
) |
Financing activities |
|
|
||||
Payments on notes payable |
$ |
(75,846 |
) |
$ |
(76,024 |
) |
Proceeds from credit facility |
|
— |
|
|
350,000 |
|
Payments on credit facility |
|
(215,000 |
) |
|
(265,000 |
) |
Proceeds from sale of future revenues |
|
629,820 |
|
|
— |
|
Payments on liability related to the sale of future revenues |
|
(24,163 |
) |
|
— |
|
Cash dividends paid |
|
(73,074 |
) |
|
(75,227 |
) |
Repurchase of Class A common stock |
|
(400,000 |
) |
|
— |
|
Other, net |
|
(5,048 |
) |
|
(9,785 |
) |
Net cash used in financing activities |
$ |
(163,311 |
) |
$ |
(76,036 |
) |
Effect of exchange rate changes on cash flows |
|
7 |
|
|
(8 |
) |
Net (decrease) increase in cash and cash equivalents |
|
(27,937 |
) |
|
5,350 |
|
Cash and cash equivalents at beginning of year |
|
89,793 |
|
|
86,143 |
|
Cash and cash equivalents at end of period |
$ |
61,856 |
|
$ |
91,493 |
|
Supplemental Financial Information |
||||||
Reconciliation of Net Cash Provided by Operating Activities to Free Cash Flow |
||||||
(Unaudited) |
||||||
(In thousands) |
||||||
|
|
|
||||
|
Nine Months Ended March 31, |
|||||
|
|
2024 |
|
|
2023 |
|
Net cash provided by operating activities |
$ |
190,270 |
|
$ |
331,178 |
|
Early termination payments to certain former limited partners that elected to execute a Unit Exchange Agreement (a) |
|
(74,574 |
) |
|
(73,180 |
) |
Purchases of property and equipment |
|
(67,626 |
) |
|
(58,464 |
) |
Free Cash Flow |
$ |
48,070 |
|
$ |
199,534 |
|
_________________________________
(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 the Condensed Consolidated Statements of Cash Flows under “Payments made on notes payable." During the nine months ended March 31, 2024, the company paid |
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 |
|
Nine Months Ended |
||||||||||
|
March 31, |
|
March 31, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
Net (loss) income |
$ |
(49,162 |
) |
$ |
48,649 |
|
|
$ |
46,114 |
|
$ |
155,982 |
|
Interest expense (income), net |
|
1,763 |
|
|
4,269 |
|
|
|
(870 |
) |
|
11,759 |
|
Income tax (benefit) expense |
|
(15,664 |
) |
|
17,232 |
|
|
|
17,552 |
|
|
59,766 |
|
Depreciation and amortization |
|
20,497 |
|
|
20,275 |
|
|
|
61,092 |
|
|
65,153 |
|
Amortization of purchased intangible assets |
|
12,280 |
|
|
11,916 |
|
|
|
37,480 |
|
|
35,415 |
|
EBITDA |
|
(30,286 |
) |
|
102,341 |
|
|
|
161,368 |
|
|
328,075 |
|
Stock-based compensation |
|
8,283 |
|
|
6,709 |
|
|
|
23,671 |
|
|
16,859 |
|
Acquisition- and disposition-related expenses |
|
1,092 |
|
|
6,294 |
|
|
|
8,495 |
|
|
11,592 |
|
Strategic initiative and financial restructuring-related expenses |
|
(61 |
) |
|
1,942 |
|
|
|
2,969 |
|
|
10,988 |
|
Equity in net (income) loss of unconsolidated affiliates |
|
(753 |
) |
|
(4,630 |
) |
|
|
1,639 |
|
|
(14,547 |
) |
Gain on sale of investment in unconsolidated affiliates |
|
(11,046 |
) |
|
— |
|
|
|
(11,046 |
) |
|
— |
|
Impairment of assets |
|
140,053 |
|
|
— |
|
|
|
140,053 |
|
|
— |
|
Other reconciling items, net |
|
— |
|
|
— |
|
|
|
— |
|
|
(312 |
) |
Adjusted EBITDA |
$ |
107,282 |
|
$ |
112,656 |
|
|
$ |
327,149 |
|
$ |
352,655 |
|
|
|
|
|
|
|
||||||||
(Loss) income before income taxes |
$ |
(64,826 |
) |
$ |
65,881 |
|
|
$ |
63,666 |
|
$ |
215,748 |
|
Equity in net (income) loss of unconsolidated affiliates |
|
(753 |
) |
|
(4,630 |
) |
|
|
1,639 |
|
|
(14,547 |
) |
Interest expense (income), net |
|
1,763 |
|
|
4,269 |
|
|
|
(870 |
) |
|
11,759 |
|
Other income, net |
|
(14,913 |
) |
|
(2,954 |
) |
|
|
(18,500 |
) |
|
(3,720 |
) |
Operating (loss) income |
|
(78,729 |
) |
|
62,566 |
|
|
|
45,935 |
|
|
209,240 |
|
Depreciation and amortization |
|
20,497 |
|
|
20,275 |
|
|
|
61,092 |
|
|
65,153 |
|
Amortization of purchased intangible assets |
|
12,280 |
|
|
11,916 |
|
|
|
37,480 |
|
|
35,415 |
|
Stock-based compensation |
|
8,283 |
|
|
6,709 |
|
|
|
23,671 |
|
|
16,859 |
|
Acquisition- and disposition-related expenses |
|
1,092 |
|
|
6,294 |
|
|
|
8,495 |
|
|
11,592 |
|
Strategic initiative and financial restructuring-related expenses |
|
(61 |
) |
|
1,942 |
|
|
|
2,969 |
|
|
10,988 |
|
Deferred compensation plan expense |
|
3,889 |
|
|
2,859 |
|
|
|
7,369 |
|
|
3,148 |
|
Impairment of assets |
|
140,053 |
|
|
— |
|
|
|
140,053 |
|
|
— |
|
Other reconciling items, net |
|
(22 |
) |
|
95 |
|
|
|
85 |
|
|
260 |
|
Adjusted EBITDA |
$ |
107,282 |
|
$ |
112,656 |
|
|
$ |
327,149 |
|
$ |
352,655 |
|
|
|
|
|
|
|
||||||||
SEGMENT ADJUSTED EBITDA |
|
|
|
|
|
||||||||
Supply Chain Services |
$ |
114,021 |
|
$ |
117,474 |
|
|
$ |
343,486 |
|
$ |
356,978 |
|
Performance Services |
|
27,039 |
|
|
24,954 |
|
|
|
79,768 |
|
|
87,290 |
|
Corporate |
|
(33,778 |
) |
|
(29,772 |
) |
|
|
(96,105 |
) |
|
(91,613 |
) |
Adjusted EBITDA |
$ |
107,282 |
|
$ |
112,656 |
|
|
$ |
327,149 |
|
$ |
352,655 |
|
|
|
|
|
|
|
||||||||
Net (loss) income attributable to stockholders |
$ |
(40,195 |
) |
$ |
46,801 |
|
|
$ |
58,868 |
|
$ |
153,563 |
|
Income tax (benefit) expense |
|
(15,664 |
) |
|
17,232 |
|
|
|
17,552 |
|
|
59,766 |
|
Amortization of purchased intangible assets |
|
12,280 |
|
|
11,916 |
|
|
|
37,480 |
|
|
35,415 |
|
Stock-based compensation |
|
8,283 |
|
|
6,709 |
|
|
|
23,671 |
|
|
16,859 |
|
Acquisition- and disposition-related expenses |
|
1,092 |
|
|
6,294 |
|
|
|
8,495 |
|
|
11,592 |
|
Strategic initiative and financial restructuring-related expenses |
|
(61 |
) |
|
1,942 |
|
|
|
2,969 |
|
|
10,988 |
|
Equity in net (income) loss of unconsolidated affiliates |
|
(753 |
) |
|
(4,630 |
) |
|
|
1,639 |
|
|
(14,547 |
) |
Gain on sale of investment in unconsolidated affiliates |
|
(11,046 |
) |
|
— |
|
|
|
(11,046 |
) |
|
— |
|
Impairment of assets |
|
140,053 |
|
|
— |
|
|
|
140,053 |
|
|
— |
|
Other reconciling items, net |
|
(7,805 |
) |
|
3,408 |
|
|
|
(8,866 |
) |
|
6,622 |
|
Adjusted income before income taxes |
|
86,184 |
|
|
89,672 |
|
|
|
270,815 |
|
|
280,258 |
|
Income tax expense on adjusted income before income taxes |
|
24,993 |
|
|
23,315 |
|
|
|
78,536 |
|
|
72,867 |
|
Adjusted net income |
$ |
61,191 |
|
$ |
66,357 |
|
|
$ |
192,279 |
|
$ |
207,391 |
|
Supplemental Financial Information |
|||||||||||||
Reconciliation of GAAP EPS to Adjusted EPS |
|||||||||||||
(Unaudited) |
|||||||||||||
(In thousands, except per share data) |
|||||||||||||
|
|
|
|
|
|
||||||||
|
Three Months Ended |
|
Nine Months Ended |
||||||||||
|
March 31, |
|
March 31, |
||||||||||
|
|
2024 |
|
|
2023 |
|
|
|
2024 |
|
|
2023 |
|
|
|
|
|
|
|
||||||||
Net (loss) income attributable to stockholders |
$ |
(40,195 |
) |
$ |
46,801 |
|
|
$ |
58,868 |
|
$ |
153,563 |
|
Income tax (benefit) expense |
|
(15,664 |
) |
|
17,232 |
|
|
|
17,552 |
|
|
59,766 |
|
Amortization of purchased intangible assets |
|
12,280 |
|
|
11,916 |
|
|
|
37,480 |
|
|
35,415 |
|
Stock-based compensation |
|
8,283 |
|
|
6,709 |
|
|
|
23,671 |
|
|
16,859 |
|
Acquisition- and disposition-related expenses |
|
1,092 |
|
|
6,294 |
|
|
|
8,495 |
|
|
11,592 |
|
Strategic initiative and financial restructuring-related expenses |
|
(61 |
) |
|
1,942 |
|
|
|
2,969 |
|
|
10,988 |
|
Equity in net (income) loss of unconsolidated affiliates |
|
(753 |
) |
|
(4,630 |
) |
|
|
1,639 |
|
|
(14,547 |
) |
Gain on sale of investment in unconsolidated affiliates |
|
(11,046 |
) |
|
— |
|
|
|
(11,046 |
) |
|
— |
|
Impairment of assets |
|
140,053 |
|
|
— |
|
|
|
140,053 |
|
|
— |
|
Other reconciling items, net |
|
(7,805 |
) |
|
3,408 |
|
|
|
(8,866 |
) |
|
6,622 |
|
Adjusted income before income taxes |
|
86,184 |
|
|
89,672 |
|
|
|
270,815 |
|
|
280,258 |
|
Income tax expense on adjusted income before income taxes |
|
24,993 |
|
|
23,315 |
|
|
|
78,536 |
|
|
72,867 |
|
Adjusted net income |
$ |
61,191 |
|
$ |
66,357 |
|
|
$ |
192,279 |
|
$ |
207,391 |
|
|
|
|
|
|
|
||||||||
Weighted average: |
|
|
|
|
|
||||||||
Basic weighted average shares outstanding |
|
111,156 |
|
|
118,872 |
|
|
|
116,754 |
|
|
118,668 |
|
Dilutive shares |
|
564 |
|
|
944 |
|
|
|
569 |
|
|
1,164 |
|
Weighted average shares outstanding - diluted |
|
111,720 |
|
|
119,816 |
|
|
|
117,323 |
|
|
119,832 |
|
|
|
|
|
|
|
||||||||
Basic (loss) earnings per share attributable to stockholders |
$ |
(0.36 |
) |
$ |
0.39 |
|
|
$ |
0.50 |
|
$ |
1.29 |
|
Income tax (benefit) expense |
|
(0.14 |
) |
|
0.14 |
|
|
|
0.15 |
|
|
0.50 |
|
Amortization of purchased intangible assets |
|
0.11 |
|
|
0.10 |
|
|
|
0.32 |
|
|
0.30 |
|
Stock-based compensation |
|
0.07 |
|
|
0.06 |
|
|
|
0.20 |
|
|
0.14 |
|
Acquisition- and disposition-related expenses |
|
0.01 |
|
|
0.05 |
|
|
|
0.07 |
|
|
0.10 |
|
Strategic initiative and financial restructuring-related expenses |
|
— |
|
|
0.02 |
|
|
|
0.03 |
|
|
0.09 |
|
Equity in net (income) loss of unconsolidated affiliates |
|
(0.01 |
) |
|
(0.04 |
) |
|
|
0.01 |
|
|
(0.12 |
) |
Gain on sale of investment in unconsolidated affiliates |
|
(0.10 |
) |
|
— |
|
|
|
(0.09 |
) |
|
— |
|
Impairment of assets |
|
1.26 |
|
|
— |
|
|
|
1.20 |
|
|
— |
|
Other reconciling items, net |
|
(0.07 |
) |
|
0.03 |
|
|
|
(0.07 |
) |
|
0.06 |
|
Impact of corporation taxes |
|
(0.22 |
) |
|
(0.20 |
) |
|
|
(0.67 |
) |
|
(0.61 |
) |
Impact of dilutive shares |
|
— |
|
|
— |
|
|
|
(0.01 |
) |
|
(0.02 |
) |
Adjusted earnings per share |
$ |
0.55 |
|
$ |
0.55 |
|
|
$ |
1.64 |
|
$ |
1.73 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20240507280917/en/
Investor contact:
Ben Krasinski
Senior Director, Investor Relations
704.816.5644
ben_krasinski@premierinc.com
Media contact:
Amanda Forster
Vice President, Public Relations
202.879.8004
amanda_forster@premierinc.com
Source: Premier, Inc.
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