Premier, Inc. (NASDAQ: PINC), a leading technology-driven
healthcare improvement company, today reported financial results
for the fiscal-year 2024 fourth quarter and full year ended June
30, 2024.
"I would like to thank our employees for another year of
dedication to our mission and their ongoing efforts to enable our
healthcare provider members to care for the communities they
serve," said Michael J. Alkire, Premier President and CEO. "Our
fourth-quarter and full-year results for revenue and profitability
exceeded our expectations as consolidated net revenue increased
from the prior-year period driven by increases in both our Supply
Chain Services and Performance Services segments. As we look ahead,
we remain disciplined in our approach and believe we remain well
positioned with a flexible balance sheet to enable our ability to
continue to advance our strategy, drive the future performance of
the company and return capital to stockholders. In addition, I'm
pleased to report that our Board of Directors approved execution of
another $200 million of Class A common shares under our previously
announced $1 billion share repurchase authorization."
Consolidated Financial
Highlights
Three Months Ended June
30,
Year Ended June 30,
(in thousands, except per share data)
2024
2023
% Change
2024
2023
% Change
Net revenue:
Supply Chain Services:
Net administrative fees
$
165,422
$
158,165
5
%
$
620,831
$
611,035
2
%
Software licenses, other services and
support
13,796
8,298
66
%
51,750
44,261
17
%
Services and software licenses
179,218
166,463
8
%
672,581
655,296
3
%
Products
50,766
61,593
(18
%)
213,722
244,659
(13
%)
Total Supply Chain Services
229,984
228,056
1
%
886,303
899,955
(2
%)
Performance Services
120,357
112,317
7
%
460,329
436,177
6
%
Total segment net revenue
350,341
340,373
3
%
1,346,632
1,336,132
1
%
Eliminations
(73
)
(9
)
711
%
(271
)
(37
)
632
%
Net revenue
$
350,268
$
340,364
3
%
$
1,346,361
$
1,336,095
1
%
Net income
$
60,605
$
18,905
221
%
$
106,719
$
174,887
(39
%)
Net income attributable to
stockholders
$
60,676
$
21,463
183
%
$
119,544
$
175,026
(32
%)
Diluted earnings per share attributable to
stockholders
$
0.57
$
0.18
217
%
$
1.04
$
1.46
(29
%)
Consolidated Financial
Highlights
Three Months Ended June
30,
Year Ended June 30,
(in thousands, except per share data)
2024
2023
% Change
2024
2023
% Change
NON-GAAP FINANCIAL MEASURES*:
Adjusted EBITDA:
Supply Chain Services
$
123,445
$
126,688
(3
%)
$
466,931
$
483,666
(3
%)
Performance Services
33,672
36,266
(7
%)
113,440
123,556
(8
%)
Total segment adjusted EBITDA
157,117
162,954
(4
%)
580,371
607,222
(4
%)
Corporate
(38,424
)
(31,894
)
(20
%)
(134,529
)
(123,507
)
(9
%)
Adjusted EBITDA
$
118,693
$
131,060
(9
%)
$
445,842
$
483,715
(8
%)
Adjusted net income
$
72,708
$
80,716
(10
%)
$
270,403
$
288,107
(6
%)
Adjusted earnings per share
(EPS)
$
0.69
$
0.67
3
%
$
2.36
$
2.40
(2
%)
* 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.
Fiscal 2025 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.
Please note the following changes compared to how guidance has
been presented historically:
- As a result of the company's previously announced plan to
divest majority interests in the Contigo Health and S2S Global
businesses, guidance is being presented excluding financial
contributions from these businesses.
- In conjunction with the evolution of the company’s digital
supply chain strategy to more tightly align the Remitra business’
strategic and operational capabilities with the group purchasing
organization (“GPO”), the company has determined it is more
appropriate to report the Remitra business as part of the Supply
Chain Services segment beginning in fiscal 2025.
- As a result of the sale of the company's non-healthcare GPO in
fiscal 2024, our non-GAAP financial profitability measures will be
updated in fiscal 2025 to exclude the impact of the OMNIA
transaction including associated revenues sold, imputed interest
expense and cash taxes paid on proceeds received. Guidance is being
presented consistent with the change.
Based on its current outlook and the realization of the
assumptions outlined below, the company expects the following:
- Supply Chain Services segment revenue that is lower than the
prior year primarily resulting from the expected increase in
aggregate blended member fee share in the GPO from approximately
54% in fiscal 2024 to the low-60% range for fiscal 2025 on a full
year basis as well as the exclusion of direct sourcing products
revenue.
- Performance Services segment revenue that is lower than the
prior year primarily resulting from the exclusion of revenue from
the Contigo Health and Remitra businesses as well as the timing of
new bookings in fiscal 2025 related to fiscal 2024 finishing better
than expected.
- Together, these result in total expected net revenue that is
lower than the prior year.
- Adjusted EBITDA and adjusted EPS that are lower than the prior
year primarily resulting from the aforementioned increase in
aggregate blended member fee share in the GPO, the impact
associated with fiscal 2024 terminated GPO members, and the
exclusion of the impact of the OMNIA transaction including
associated revenues sold, imputed interest expense and cash taxes
paid on proceeds received.
Guidance Metric
Fiscal 2025 Guidance Range** (as of
August 20, 2024)
Segment Net Revenue:
Supply Chain Services Excluding S2S
Global
Performance Services Excluding Contigo
Health
$560 million to $610 million
$370 million to $410 million
Total Net Revenue Excluding Contigo Health
and S2S Global
$930 million to $1.02 billion
Adjusted EBITDA
$235 million to $255 million
Adjusted EPS
$1.16 to $1.28
Fiscal 2025 guidance is based on the
realization of the following key assumptions:
- Net administrative fees revenue of $495 million to $525
million, which includes $60 million to $75 million in revenue
related to non-healthcare member purchasing
- Supply Chain Services segment software licenses, other services
and support revenue of $65 million to $85 million
- Capital expenditures of $90 million to $100 million
- Effective income tax rate in the range of 25% to 27%
- Cash income tax rate of less than 5%
- Free cash flow of 45% to 55% of adjusted EBITDA
- Does not include the impact of any significant acquisitions or
share repurchases
** 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. Total Net Revenue Excluding Contigo Health and S2S
Global is also a forward-looking non-GAAP measure. Refer to
"Premier's Use of Forward-Looking Non-GAAP Measures" below for
additional explanation.
Results of Operations for the Three Months Ended June 30,
2024 (As compared with the three months ended June 30,
2023)
GAAP net revenue of $350.3 million increased 3% from $340.4
million in the prior-year period. Refer to "Supply Chain Services"
and "Performance Services" sections below for further discussion on
the factors that impacted each segment during the quarter.
GAAP net income of $60.6 million increased 221% from $18.9
million in the prior-year period primarily due to the prior-year
Contigo Health goodwill impairment and a decrease in interest
expense as a result of there being no outstanding balance on the
company's revolving credit facility in the current-year period.
This increase in GAAP net income for the current-year period was
partially offset by an increase in employee-related expenses driven
by increased headcount, primarily to support growth in our supply
chain co-management business, and higher performance-related
compensation expense as compared to the prior-year period which
resulted from significantly lower prior-year performance against
expectations.
GAAP diluted EPS of $0.57 increased 217% from $0.18 in the
prior-year period due to the aforementioned drivers affecting GAAP
net income and a decrease in the diluted weighted average shares
outstanding as a result of the $400 million accelerated share
repurchase transaction ("ASR") announced in the third quarter of
fiscal 2024.
Adjusted EBITDA of $118.7 million decreased 9% from $131.1
million in the prior-year period. Refer to "Supply Chain Services"
and "Performance Services" sections below for further discussion on
the factors that impacted each segment during the quarter.
Adjusted net income of $72.7 million decreased 10% from $80.7
million in the prior-year period primarily as a result of the same
factors that impacted adjusted EBITDA as well as an increase in our
effective income tax rate partially offset by a decrease in
interest expense in the current-year period. Adjusted EPS of $0.69
increased 3% from $0.67 in the prior-year period primarily due to a
decrease in the diluted weighted average shares outstanding as a
result of the ASR partially offset by the aforementioned drivers
affecting adjusted net income.
Segment Results (For the fiscal fourth quarter of 2024 as
compared with the fiscal fourth quarter of 2023)
Supply Chain Services
Supply Chain Services segment net revenue of $230.0 million
increased 1% from $228.1 million in the prior-year period,
primarily reflecting higher net administrative fees revenue and
software license, other services and support revenue, partially
offset by a decrease in products revenue.
Net administrative fees revenue of $165.4 million increased 5%
from $158.2 million in the prior-year period driven by one-time
contractual payments received from certain GPO members due to early
termination in breach of their contracts and continued growth in
member purchasing in both the acute and Continuum of Care GPO
programs partially offset by an expected increase in the aggregate
blended member fee share to the high-50% range in the quarter.
Products revenue of $50.8 million decreased 18% from $61.6
million in the prior-year period primarily due to lower pricing for
and demand for certain products.
Segment adjusted EBITDA of $123.4 million decreased 3% from
$126.7 million in the prior-year period primarily due to an
increase in expenses in support of growth in the supply chain
co-management business and higher performance-related compensation
in the current-year period, the increase in aggregate blended
member fee share in the GPO, and lower than normal logistics costs
in the prior-year period, partially offset by the aforementioned
increase in net revenue.
Performance Services
Performance Services segment net revenue of $120.4 million
increased 7% from $112.3 million in the prior-year period,
primarily due to an increase in consulting services revenue and an
increase in revenue from enterprise license agreements in the
current-year period compared with the prior-year period.
Segment adjusted EBITDA of $33.7 million decreased 7% from $36.3
million in the prior-year period mainly due to an increase in
expenses primarily related to higher performance-related
compensation in the current-year period as well as investments to
support continued growth in the company's adjacent markets
businesses, partially offset by the aforementioned increase in net
revenue.
Result of Operations for the Year Ended June 30, 2024 (As
compared with the year ended June 30, 2023)
GAAP net revenue of $1,346.4 million increased 1% from $1,336.1
million in the prior year primarily due to increases in Performance
Services segment net revenue and net administrative fees revenue
offset by a decrease in products revenue.
GAAP net income of $106.7 million decreased 39% from net income
of $174.9 million in the prior year primarily due to a $83.3
million increase in impairment of Contigo Health goodwill and
long-lived assets year-over-year as well as a decrease of $16.4
million in equity earnings in the current year compared to the
prior year primarily due to the previously disclosed amendment to
the company's minority investment agreement with FFF Enterprises
which resulted in a change of accounting methodology for the
investment.
GAAP diluted EPS of $1.04 decreased 29% from $1.46 in the prior
year primarily due to the aforementioned drivers affecting GAAP net
income partially offset by a decrease in the diluted weighted
average shares outstanding as a result of the ASR.
Adjusted EBITDA of $445.8 million decreased 8% from $483.7
million in the prior year primarily due to decreases in each
segment's adjusted EBITDA.
Adjusted net income of $270.4 million decreased 6% from $288.1
million in the prior year primarily as a result of the decrease in
adjusted EBITDA as well as an increase in our effective income tax
rate as a result of the $140.1 million impairment of assets
partially offset by an increase in interest income in the current
year. Adjusted EPS of $2.36 decreased 2% from $2.40 in the prior
year primarily due to the aforementioned drivers affecting adjusted
net income partially offset by a decrease in the diluted weighted
average shares outstanding as a result of the ASR.
Supply Chain Services segment net revenue of $886.3 million
decreased 2% from $900.0 million for the same period a year ago.
Segment adjusted EBITDA of $466.9 million decreased 3% from $483.7
million for the same period a year ago.
Performance Services segment net revenue of $460.3 million
increased 6% from $436.2 million for the same period a year ago.
Segment adjusted EBITDA of $113.4 million decreased 8% from $123.6
million for the same period a year ago.
Cash Flows and Liquidity
Net cash provided by operating activities ("operating cash
flow") for the year ended June 30, 2024 of $296.6 million decreased
from $444.5 million in the prior year primarily due to $162.3
million in tax payments in the current year related to the sale of
non-healthcare GPO operations and an increase in expenses to
support continued growth in certain areas of the Supply Chain
Services and Performance Services segments. These decreases to cash
were partially offset by lower fiscal 2023 performance-related
compensation payments during the fiscal first quarter compared to
the fiscal 2022 payments in the prior year and increased cash
inflows from continued growth in the Performance Services
business.
Net cash used in investing activities for the year ended June
30, 2024 of $68.5 million decreased from the prior year primarily
due to the cash outlay for fiscal 2023 acquisitions and cash
received in the current year for the sale of PQS partially offset
by an increase in purchases of property and equipment. Net cash
used in financing activities in fiscal 2024 of $192.7 million
increased from the prior year primarily driven by the $400.0
million ASR and a decrease in net borrowings under the company's
revolving credit facility. These uses of cash were partially offset
by net proceeds from the sale of the company's non-healthcare GPO
operations in the current year. As of June 30, 2024, cash and cash
equivalents were $125.1 million compared with $89.8 million as of
June 30, 2023, and the company's five-year, $1.0 billion revolving
credit facility had no outstanding balance.
Free cash flow for the year ended June 30, 2024 was $115.7
million compared with $264.4 million in the prior year. The
decrease was primarily due to the same factors that impacted
operating cash flow, including the aforementioned $162.3 million in
tax payments. 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 this
and other non-GAAP financial measures and a reconciliation of
reported GAAP results to non-GAAP results.
During the year ended June 30, 2024, the company paid aggregate
dividends of $95.2 million to holders of its Class A common
stock.
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
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 U.S. hospitals and
health systems and approximately 325,000 other providers and
organizations to transform healthcare. With integrated data and
analytics, collaboratives, supply chain solutions, and consulting
and other services, Premier enables better care and outcomes at a
lower cost. Premier plays a critical role in the rapidly evolving
healthcare industry, collaborating with members to co-develop
long-term innovations that reinvent and improve the way care is
delivered to patients nationwide. Headquartered in Charlotte, N.C.,
Premier is passionate about transforming American healthcare.
Please visit Premier’s news and investor sites on
www.premierinc.com, as well as X, Facebook, LinkedIn, YouTube,
Instagram and Premier’s blog for more information about the
company.
Premier’s Use and Definition of Non-GAAP Measures
Premier uses EBITDA, adjusted EBITDA, segment adjusted EBITDA,
adjusted net income, adjusted earnings per share, and free cash
flow. 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-K for the year ended June
30, 2024, 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.
As noted above in this release, as a result of the company's
previously announced plan to divest majority interests in the
Contigo Health and S2S Global businesses, the forward-looking
guidance presented in this release (including Total Net Revenue
Excluding Contigo Health and S2S Global, Adjusted EBITDA, Adjusted
EPS, and free cash flow) excludes the financial contributions from
these businesses, in addition to any applicable adjustments for
non-GAAP financial measures described above under "Premier's Use
and Definition of Non-GAAP Measures."
Also as noted above in this release, as a result of the sale of
the company's non-healthcare GPO in fiscal 2024, our non-GAAP
financial profitability measures will be updated in fiscal 2025 to
exclude the impact of the OMNIA transaction including associated
revenues sold, imputed interest expense and cash taxes paid on
proceeds received. The forward-looking guidance presented in this
release (including Adjusted EBITDA, Adjusted EPS, and free cash
flow) reflects these adjustments in addition to any applicable
adjustments for non-GAAP financial measures described above under
"Premier's Use and Definition of Non-GAAP Measures."
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 outstanding share
repurchase authorization and the potential benefits thereof, 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, 2024, expected
to be filed with the SEC shortly after the date of this release.
Premier's periodic and current filings with the SEC 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.
Consolidated Statements of
Income
(In thousands, except per
share data)
Three Months Ended
Year Ended
June 30,
June 30,
2024
2023
2024
2023
Net revenue:
Net administrative fees
$
165,422
$
158,165
$
620,831
$
611,035
Software licenses, other services and
support
134,080
120,606
511,808
480,401
Services and software licenses
299,502
278,771
1,132,639
1,091,436
Products
50,766
61,593
213,722
244,659
Net revenue
350,268
340,364
1,346,361
1,336,095
Cost of revenue:
Services and software licenses
68,427
54,659
268,885
218,087
Products
46,027
53,212
189,464
221,719
Cost of revenue
114,454
107,871
458,349
439,806
Gross profit
235,814
232,493
888,012
896,289
Operating expenses:
Selling, general and administrative
143,320
185,389
709,651
601,554
Research and development
663
1,564
3,115
4,540
Amortization of purchased intangible
assets
9,794
12,687
47,274
48,102
Operating expenses
153,777
199,640
760,040
654,196
Operating income
82,037
32,853
127,972
242,093
Equity in net income (loss) of
unconsolidated affiliates
1,344
1,521
(295
)
16,068
Interest income (expense), net
411
(2,711
)
1,281
(14,470
)
Other income, net
2,332
2,587
20,832
6,307
Other income, net
4,087
1,397
21,818
7,905
Income before income taxes
86,124
34,250
149,790
249,998
Income tax expense
25,519
15,345
43,071
75,111
Net income
60,605
18,905
106,719
174,887
Net loss attributable to non-controlling
interest
71
2,558
12,825
139
Net income attributable to
stockholders
$
60,676
$
21,463
$
119,544
$
175,026
Calculation of GAAP Earnings per
Share
Numerator for basic and diluted
earnings per share:
Net income attributable to
stockholders
$
60,676
$
21,463
$
119,544
$
175,026
Denominator for earnings per
share:
Basic weighted average shares
outstanding
104,838
119,064
113,791
118,767
Effect of dilutive securities:
Stock options
—
14
—
81
Restricted stock units
758
540
553
524
Performance share awards
—
443
64
517
Diluted weighted average shares
105,596
120,061
114,408
119,889
Earnings per share attributable to
stockholders:
Basic
$
0.58
$
0.18
$
1.05
$
1.47
Diluted
$
0.57
$
0.18
$
1.04
$
1.46
Consolidated Balance
Sheets
(In thousands, except share
data)
June 30, 2024
June 30, 2023
Assets
Cash and cash equivalents
$
125,146
$
89,793
Accounts receivable (net of $1,455 and
$2,878 allowance for credit losses, respectively)
126,694
115,295
Contract assets (net of $1,248 and $885
allowance for credit losses, respectively)
335,831
299,219
Inventory
79,799
76,932
Prepaid expenses and other current
assets
80,546
60,387
Total current assets
748,016
641,626
Property and equipment (net of $742,063
and $662,554 accumulated depreciation, respectively)
205,711
212,308
Intangible assets (net of $295,955 and
$265,684 accumulated amortization, respectively)
269,259
430,030
Goodwill
995,852
1,012,355
Deferred income tax assets
776,202
653,629
Deferred compensation plan assets
54,422
50,346
Investments in unconsolidated
affiliates
228,562
231,826
Operating lease right-of-use assets
20,635
29,252
Other assets
102,790
110,115
Total assets
$
3,401,449
$
3,371,487
Liabilities and stockholders'
equity
Accounts payable
$
60,361
$
54,375
Accrued expenses
65,567
47,113
Revenue share obligations
292,792
262,288
Accrued compensation and benefits
101,366
60,591
Deferred revenue
19,642
24,311
Current portion of notes payable to former
limited partners
101,523
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
51,798
—
Other current liabilities
52,506
50,574
Total current liabilities
746,563
815,463
Long-term debt, less current portion
—
734
Notes payable to former limited partners,
less current portion
—
101,523
Deferred compensation plan obligations
54,422
50,346
Operating lease liabilities, less current
portion
11,170
21,864
Liability related to the sale of future
revenues, less current portion
599,423
—
Other liabilities
27,640
47,202
Total liabilities
1,439,218
1,037,132
Commitments and contingencies
Stockholders' equity:
Class A common stock, $0.01 par value,
500,000,000 shares authorized; 111,456,454 shares issued and
105,027,079 shares outstanding at June 30, 2024 and 125,587,858
shares issued and 119,158,483 shares outstanding at June 30,
2023
1,115
1,256
Treasury stock, at cost; 6,429,375 shares
at both June 30, 2024 and June 30, 2023
(250,129
)
(250,129
)
Additional paid-in capital
2,105,684
2,178,134
Retained earnings
105,590
405,102
Accumulated other comprehensive loss
(29
)
(8
)
Total stockholders' equity
1,962,231
2,334,355
Total liabilities and stockholders'
equity
$
3,401,449
$
3,371,487
Consolidated Statements of
Cash Flows
(In thousands)
Year Ended June 30,
2024
2023
Operating activities
Net income
$
106,719
$
174,887
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
129,002
133,793
Equity in net loss (income) of
unconsolidated affiliates
295
(16,068
)
Deferred income taxes
(122,573
)
71,403
Stock-based compensation
23,290
13,734
Impairment of assets
140,053
56,718
Other, net
(4,518
)
6,501
Changes in operating assets and
liabilities, net of the effects of acquisitions:
Accounts receivable
(11,399
)
477
Contract assets
(39,265
)
(41,088
)
Inventory
(2,867
)
42,720
Prepaid expenses and other assets
(5,920
)
21,056
Accounts payable
8,717
7,415
Revenue share obligations
30,504
16,893
Accrued expenses, deferred revenue and
other liabilities
44,522
(43,898
)
Net cash provided by operating
activities
$
296,560
$
444,543
Investing activities
Purchases of property and equipment
$
(81,189
)
$
(82,302
)
Sale of investment in unconsolidated
affiliates
12,753
—
Acquisition of businesses and equity
method investments, net of cash acquired
—
(187,750
)
Investment in unconsolidated
affiliates
(30
)
(2,060
)
Other
—
(1,510
)
Net cash used in investing
activities
$
(68,466
)
$
(273,622
)
Financing activities
Payments on notes payable
$
(100,937
)
$
(100,859
)
Proceeds from credit facility
—
470,000
Payments on credit facility
(215,000
)
(405,000
)
Proceeds from sale of future revenues
681,427
—
Payments on liability related to the sale
of future revenues
(31,535
)
—
Cash dividends paid
(95,207
)
(100,233
)
Repurchase of Class A common stock
(400,000
)
—
Payments on deferred consideration related
to acquisition of business
(27,187
)
(27,927
)
Proceeds from exercise of stock options
under equity incentive plan
—
6,078
Other, net
(4,281
)
(9,325
)
Net cash used in financing
activities
$
(192,720
)
$
(167,266
)
Effect of exchange rate changes on cash
flows
(21
)
(5
)
Net increase in cash and cash
equivalents
35,353
3,650
Cash and cash equivalents at beginning of
year
89,793
86,143
Cash and cash equivalents at end of
period
$
125,146
$
89,793
Supplemental Financial
Information
Reconciliation of Net Cash
Provided by Operating Activities to Free Cash Flow
(Unaudited)
(In thousands)
Year Ended
June 30,
2024
2023
Net cash provided by operating
activities
$
296,560
$
444,543
Early termination payments to certain
former limited partners that elected to execute a Unit Exchange
Agreement (a)
(99,665
)
(97,806
)
Purchases of property and equipment
(81,189
)
(82,302
)
Free Cash Flow
$
115,706
$
264,435
_________________________________
(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 Consolidated Statements of Cash Flows under
“Payments made on notes payable." During the year ended June 30,
2024, the company paid $102.7 million to members including imputed
interest of $3.0 million which is included in net cash provided by
operating activities. During the year ended June 30, 2023, the
company paid $102.7 million to members, including imputed interest
of $4.9 million which is included in net cash provided by operating
activities.
Supplemental Financial
Information
Reconciliation of Net Income
from Continuing Operations to Adjusted EBITDA
Reconciliation of Operating
Income to Segment Adjusted EBITDA
Reconciliation of Net Income
Attributable to Stockholders to Adjusted Net Income
(Unaudited)
(In thousands)
Three Months Ended
Year Ended
June 30,
June 30,
2024
2023
2024
2023
Net income
$
60,605
$
18,905
$
106,719
$
174,887
Interest (income) expense, net
(411
)
2,711
(1,281
)
14,470
Income tax expense
25,519
15,345
43,071
75,111
Depreciation and amortization
20,636
20,538
81,728
85,691
Amortization of purchased intangible
assets
9,794
12,687
47,274
48,102
EBITDA
116,143
70,186
277,511
398,261
Stock-based compensation
205
(2,504
)
23,876
14,355
Acquisition- and disposition-related
expenses
4,117
5,559
12,612
17,151
Strategic initiative and financial
restructuring-related expenses
(119
)
2,843
2,850
13,831
Equity in net (income) loss of
unconsolidated affiliates
(1,344
)
(1,521
)
295
(16,068
)
Gain on sale of investment in
unconsolidated affiliates
—
—
(11,046
)
—
Impairment of assets
—
56,718
140,053
56,718
Other reconciling items, net
(309
)
(221
)
(309
)
(533
)
Adjusted EBITDA
$
118,693
$
131,060
$
445,842
$
483,715
Income before income taxes
$
86,124
$
34,250
$
149,790
$
249,998
Equity in net (income) loss of
unconsolidated affiliates
(1,344
)
(1,521
)
295
(16,068
)
Interest (income) expense, net
(411
)
2,711
(1,281
)
14,470
Other income, net
(2,332
)
(2,587
)
(20,832
)
(6,307
)
Operating income
82,037
32,853
127,972
242,093
Depreciation and amortization
20,636
20,538
81,728
85,691
Amortization of purchased intangible
assets
9,794
12,687
47,274
48,102
Stock-based compensation
205
(2,504
)
23,876
14,355
Acquisition- and disposition-related
expenses
4,117
5,559
12,612
17,151
Strategic initiative and financial
restructuring-related expenses
(119
)
2,843
2,850
13,831
Deferred compensation plan expense
1,400
2,274
8,769
5,422
Impairment of assets
—
56,718
140,053
56,718
Other reconciling items, net
623
92
708
352
Adjusted EBITDA
$
118,693
$
131,060
$
445,842
$
483,715
SEGMENT ADJUSTED EBITDA
Supply Chain Services
$
123,445
$
126,688
$
466,931
$
483,666
Performance Services
33,672
36,266
113,440
123,556
Corporate
(38,424
)
(31,894
)
(134,529
)
(123,507
)
Adjusted EBITDA
$
118,693
$
131,060
$
445,842
$
483,715
Net income attributable to
stockholders
$
60,676
$
21,463
$
119,544
$
175,026
Income tax expense
25,519
15,345
43,071
75,111
Amortization of purchased intangible
assets
9,794
12,687
47,274
48,102
Stock-based compensation
205
(2,504
)
23,876
14,355
Acquisition- and disposition-related
expenses
4,117
5,559
12,612
17,151
Strategic initiative and financial
restructuring-related expenses
(119
)
2,843
2,850
13,831
Equity in net (income) loss of
unconsolidated affiliates
(1,344
)
(1,521
)
295
(16,068
)
Gain on sale of investment in
unconsolidated affiliates
—
—
(11,046
)
—
Impairment of assets
—
56,718
140,053
56,718
Other reconciling items, net
752
(1,514
)
(8,114
)
5,108
Adjusted income before income taxes
99,600
109,076
370,415
389,334
Income tax expense on adjusted income
before income taxes
26,892
28,360
100,012
101,227
Adjusted net income
$
72,708
$
80,716
$
270,403
$
288,107
Supplemental Financial
Information
Reconciliation of GAAP EPS to
Adjusted EPS
(Unaudited)
(In thousands, except per
share data)
Three Months Ended
Year Ended
June 30,
June 30,
2024
2023
2024
2023
Net income attributable to
stockholders
$
60,676
$
21,463
$
119,544
$
175,026
Income tax expense
25,519
15,345
43,071
75,111
Amortization of purchased intangible
assets
9,794
12,687
47,274
48,102
Stock-based compensation
205
(2,504
)
23,876
14,355
Acquisition- and disposition-related
expenses
4,117
5,559
12,612
17,151
Strategic initiative and financial
restructuring-related expenses
(119
)
2,843
2,850
13,831
Equity in net (income) loss of
unconsolidated affiliates
(1,344
)
(1,521
)
295
(16,068
)
Gain on sale of investment in
unconsolidated affiliates
—
—
(11,046
)
—
Impairment of assets
—
56,718
140,053
56,718
Other reconciling items, net
752
(1,514
)
(8,114
)
5,108
Adjusted income before income taxes
99,600
109,076
370,415
389,334
Income tax expense on adjusted income
before income taxes
26,892
28,360
100,012
101,227
Adjusted net income
$
72,708
$
80,716
$
270,403
$
288,107
Weighted average:
Basic weighted average shares
outstanding
104,838
119,064
113,791
118,767
Dilutive shares
758
997
617
1,122
Weighted average shares outstanding -
diluted
105,596
120,061
114,408
119,889
Basic earnings per share attributable
to stockholders
$
0.58
$
0.18
$
1.05
$
1.47
Income tax expense
0.24
0.13
0.38
0.63
Amortization of purchased intangible
assets
0.09
0.11
0.42
0.41
Stock-based compensation
—
(0.02
)
0.21
0.12
Acquisition- and disposition-related
expenses
0.04
0.05
0.11
0.14
Strategic initiative and financial
restructuring-related expenses
—
0.02
0.03
0.12
Equity in net (income) loss of
unconsolidated affiliates
(0.01
)
(0.01
)
—
(0.14
)
Gain on sale of investment in
unconsolidated affiliates
—
—
(0.10
)
—
Impairment of assets
—
0.48
1.23
0.48
Other reconciling items, net
0.01
(0.02
)
(0.08
)
0.04
Impact of corporation taxes
(0.26
)
(0.24
)
(0.88
)
(0.85
)
Impact of dilutive shares
—
(0.01
)
(0.01
)
(0.02
)
Adjusted earnings per share
$
0.69
$
0.67
$
2.36
$
2.40
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240820981707/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
Premier (NASDAQ:PINC)
過去 株価チャート
から 10 2024 まで 10 2024
Premier (NASDAQ:PINC)
過去 株価チャート
から 10 2023 まで 10 2024