Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Premier, Inc. | d782019dex992.htm |
| EX-99.1 - EX-99.1 - Premier, Inc. | d782019dex991.htm |
| 8-K - 8-K - Premier, Inc. | d782019d8k.htm |
 Fourth Quarter and Fiscal Year 2014
Financial Results and Update
August 25, 2014
Exhibit 99.3 |
 1
Forward-looking statements and Non-GAAP financial
measures
—Certain
statements
made
during
this
conference
call
and
included
in
this
presentation, including, but not limited to, those related
to our financial and business outlook, strategy and growth drivers,
acquisition activities and pipeline, revenue available under contract, and financial guidance
and
related
assumptions,
are
“forward-looking
statements.”
Forward-looking
statements
may
involve
known
and unknown risks, uncertainties and other factors that may cause the actual
results 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. Readers are urged to consider statements in the conditional or
future tenses or that include
terms
such
as
“believes,”
“belief,”
“expects,”
“estimates,”
“intends,”
“anticipates”
or
“plans”
to
be
uncertain and forward-looking.
Forward-looking statements may include comments as to Premier’s beliefs
and expectations as to future events and trends affecting its business and
are necessarily subject to uncertainties,
many
of
which
are
outside
Premier’s
control.
More
information
on
potential
risks
and
other
factors
that
could
affect
Premier’s
financial
results
is
included,
and
updated,
from
time
to
time,
in
Premier’s
periodic
and
current
filings
with
the
SEC
and
available
on
Premier’s
website.
Forward
looking
statements
speak only as of the date they are made. Premier undertakes no obligation to
publicly update or revise any forward-looking statements.
defined
in
Regulation
G
under
the
Securities
Exchange
Act
of
1934.
Schedules
are
attached that reconcile
the non-GAAP financial measures included in the following presentation to the
most directly comparable financial measures calculated and presented in
accordance with Generally Accepted Accounting Principles in the United
States. The press release attached as an Exhibit to our Form 8-K filed with the SEC in connection
with our earnings call, as well as our Form 10-K for the year ended June 30,
2014 to be filed shortly hereafter, provides
further
explanation
and
disclosure
regarding
our
use
of
non-GAAP
financial
measures
and
should
be
read in conjunction with these supplemental slides.
Non-GAAP
financial
measures
Forward-looking
statements
—This
presentation
includes
certain
“non-GAAP
financial
measures”
as |
 Susan DeVore, President & CEO
Financial Highlights and Year in Review |
 3
Fiscal
2014
highlights
1
(1) Comparisons are pro forma. See Adjusted EBITDA, Segment Adjusted EBITDA and
Adjusted Fully Distributed Net Income reconciliations to GAAP equivalents in
Appendix; pro forma reflects the impact of the company’s reorganization and initial public offering
Strong fourth quarter completes extraordinary year
Fourth-quarter net revenue up 17% and adjusted
EBITDA up 19%, driven by strength in both segments
Full-year net revenue up 14% to $869.3 million;
Adjusted EBITDA up 12% to $351.0 million
Strong cash position continues; over $540
million of cash & marketable securities at FY end
Expanded credit facility to $750 million, increasing
financial flexibility to support acquisition strategy
Executed focused and disciplined acquisition strategy |
 4
Member and
industry needs
Co-innovation
Intelligence to transform from the inside
Leadership in population health
Shared infrastructure
Premier strategic
differentiation
•
Total cost reduction
•
Quality improvement
across the continuum
•
Evolving delivery and
payment models
•
Actionable data and
information
Unique business model addresses industry challenges
Helping health systems manage challenges, optimize
the transition, and build for the future….
…all
at
the
same
time
Scale |
 5
Changing the game to drive out costs, improve outcomes
SUPPLY CHAIN SERVICES
PERFORMANCE SERVICES
•
SaaS-based analytics products
in cost, quality, safety and
population health
•
Enterprise data analytics
platform
•
Collaboratives
•
Advisory services
With integrated data and analytics, collaboratives, supply chain
solutions, and advisory and other services, we are enabling better
care and outcomes at a lower cost.
Group purchasing, serving both
acute and alternate site
•
Direct sourcing
•
Specialty pharmacy
Physician preference items (PPI)
Capital planning |
 6
Strategic acquisitions serve members and drive revenue
growth opportunities
Member channel allows us to rapidly expand capabilities, enhances
speed to market and augments Premier’s unique technology platform
Fiscal 2014
Q1 FY15
Data acquisition and
integration-as-a-service
company
(October 2013)
(July 2013)
Physician preference
item (PPI) contract mgmt.
and data services
company
(April 2014)
Capital equipment
planning, sourcing &
analytics business
(August 2014)*
Provider of clinical
surveillance software
(August 2014)*
Healthcare
supply spend
visibility &
supply chain
analytics firm
*Expected to close in Q1 FY15, subject to customary conditions; There can be no
assurance regarding the timing or ultimate closing of these acquisitions. |
 7
Aperek acquisition addresses supply chain workflow
Expected to close in first quarter of FY15, subject
to customary closing conditions
Provider of leading real-time healthcare supply
spend visibility and SaaS-based supply chain
analytics
Provides opportunity to further automate supply
chain management processes
Purchase price of $48.5 million, subject to
closing price adjustments |
 8
Data-based analytics platform continues to grow
PLATFORM
BILLING
PURCHASING
CLAIMS
CLINICAL
FINANCIAL
ANY
DATA
Number of facilities under contract as of 6/30/2014
*includes
TheraDoc
and
Aperek
transactions,
expected
to
close
in
Q1
FY15,
subject
to
customary
conditions
Social business
~1,300 facilities*
~1,100 facilities
~1,280 facilities
~1,000 facilities*
~500 facilities
9 organizations |
 9
Continued growth trajectory with acquisition of TheraDoc
Expands clinical surveillance customer base
to approximately 1,000 facilities
Market leading provider of clinical surveillance
software
Future opportunity to create a next-generation
safety
solution
built
on
PremierConnect
®
Purchase price of $117 million, subject to
closing price adjustments
Expected to close in first quarter of FY15,
subject to customary closing conditions |
 10
PHYSICIAN NETWORK
MANAGEMENT
POPULATION
ANALYTICS & RISK
MANAGEMENT
POPULATION
ENGAGEMENT
Subject Matter
Expertise
Collaboratives
Information
Technology
(SaaS-
based
Solutions)
POPULATION HEALTH
COLLABORATIVE
Shared Savings
Bundled Payments
Value-based Contracting
Clinical Integration
Network Development
ACO Readiness
PCMH
Care Management
Transitions in Care
Industry leader in driving population health solutions |
 PremierConnect
®
Enterprise & Data Alliance Collaborative
PCE
Private Warehouse
Partners
Added in
Q4 FY14
Fairview
Health
Services
Mercy
Health
Baystate
Health
Baystate
Innovation
Center
University
Hospitals
Bon
Secours
Health
System
IBM
UNCC
Verisk
Health
Phytel
Carillion
Health
System
Texas
Health
Resources
Carolinas
Healthcare
System
11 |
 12
Unique customer alignment
Data-driven, technology enabled
Diversified growth engine
Compelling financial profile
Well positioned for fiscal 2015 |
 Craig McKasson, Chief Financial Officer
Financial Review |
 14
15%
36%
Fourth-quarter consolidated and segment highlights
1
Consolidated
Net revenue (millions)
Supply Chain Services
Net revenue (millions)
Performance Services
Net revenue (millions)
Adjusted
EBITDA
(millions)
Adjusted EBITDA (millions)
Adjusted EBITDA (millions)
18%
15%
19%
(1) See Adjusted EBITDA and Segment Adjusted EBITDA reconciliations to GAAP
equivalents in Appendix; comparisons between fourth-quarter financial results
ended June 30, 2014, and year-ago pro forma results have been adjusted to
reflect the impact of the company’s reorganization and initial public offering.
$14.4
$19.5
Q4'13
Q4'14
$78.1
$93.2
Q4'13
Q4'14
$54.6
$62.6
Q4'13
Q4'14
$82.2
$94.4
Q4'13
Q4'14
$146.4
$172.8
Q4'13
Q4'14
$200.9
$235.5
Q4'13
Q4'14
17% |
 15
Non-GAAP pro forma adjusted fully distributed net income
1
•
Calculates income taxes at 40%
on pre-tax income, assuming
taxable C corporate structure
•
Calculates adjusted fully
distributed earnings per share,
assuming total Class A and B
common shares held by public
(1) See pro forma adjusted fully distributed net income to GAAP
equivalents in Appendix; comparisons between fourth-quarter financial results
ended June 30, 2014, and year-ago pro forma results have been
adjusted to reflect the impact of the company’s reorganization and initial public offering.
$0.29
$0.34
Non-GAAP earnings per share on fully distributed
net income
Q4'13
Q4'14
(in millions, except per share data)
$42.2
$49.9
18% |
 16
Cash flow and capital structure at June 30, 2014
Cash, cash equivalents and marketable
securities of $540.4 million
Capital expenditures of $55.7 million, up 31%
YOY primarily due to capitalized internally
developed software
Cash flow from operations of $368.1 million
$750 million five-year unsecured revolving
credit facility secured in June 2014 |
 17
Fiscal 2015 guidance
1
1
As of fiscal 2014 fourth-quarter conference call, 08/25/2014. For non-GAAP
measures, see reconciliations to GAAP equivalents
in
Appendix.
Pro
forma
guidance
measures
are
“forward-looking
statements.”
For
information
regarding
the use and limitations of non-GAAP financial measures and forward-looking
statements, see “Forward-looking statements and Non-GAAP
financial measures” at the front of this presentation.
Premier, Inc. introduces full-year fiscal 2015 financial guidance:
(in millions, except per share data)
FY 2015
YoY Change
Pro Forma Net Revenue:
Supply Chain Services segment
$688 -
$707
8% -
11%
Performance Services segment
$281 -
$288
21% -
24%
Total Pro Forma Net Revenue
$969 -
$995
11% -
14%
Non-GAAP pro forma adjusted
EBITDA
$379 -
$390
8 -
11%
Non-GAAP pro forma adjusted
fully distributed EPS
$1.39 -
$1.44
7-
11% |
 18
Fiscal 2015 guidance assumptions
Steady growth in Supply Chain Services
driven by:
Continued growth in Performance Services
driven by:
•
Demand for integrated offerings of SaaS-based
products, advisory services and collaboratives
•
Demand for offerings of recent acquisitions
•
Continuation of high SaaS institutional renewal
rates
•
Low to mid-single-digit growth in net
administrative fees revenue, driven by increase
in members and existing acute and alternate site
member GPO penetration
•
Continuation of high GPO retention rates
•
Strong
15%
-
20%
growth
of
direct
sourcing
and
specialty pharmacy
18 |
 19
Additional performance metrics
PERFORMANCE METRICS
FY 2015
FY 2014
3 Year Average
Revenue available under contract
$898M
---
---
GPO retention rate
(1)
---
99%
97%
SaaS institutional renewal rate
(2)
---
94%
94%
(1)
The retention rate is calculated based upon the aggregate purchasing volume among
all members participating in our GPO for such fiscal year less the
annualized GPO purchasing volume for departed members for such fiscal year,
divided by the aggregate purchasing volume among all members participating
in our GPO for such fiscal year. (2)
The renewal rate is calculated based upon the total number of members that have
SaaS revenue in a given period that also have revenue in the corresponding
prior year period divided by the total number of members that have SaaS
revenue in the same period of the prior year. |
 20
Capital expenditures of ~$63M for the year
Adjusted EBITDA margin approximating
40% of net revenue
Effective tax rate of 40%
Additional fiscal 2015 guidance assumptions |
 Questions |
 Contact Investor Relations
Jim Storey
Vice President, Investor Relations
jim_storey@premierinc.com
Thank you |
 Appendix |
 24
Premier, Inc. supplemental financial information
(Unaudited, in thousands)
2014*
2013
2014
2013
Reconciliation of Pro Forma Net Revenue to Net Revenue:
Pro Forma Net Revenue
235,466
$
200,938
$
869,286
$
764,278
$
Pro forma adjustment for revenue share post-IPO
—
39,663
41,263
105,012
Net Revenue
235,466
$
240,601
$
910,549
$
869,290
$
Reconciliation of Pro Forma Adjusted EBITDA and Segment Adjusted
EBITDA to Net Income and Operating Income:
Net income
66,632
$
103,496
$
332,617
$
375,086
$
Pro forma adjustment for revenue share post-IPO
—
(39,663)
(41,263)
(105,012)
Interest and investment income, net
(378)
(366)
(1,019)
(965)
Income tax expense
3,248
3,788
27,709
9,726
Depreciation and amortization
9,809
7,883
36,761
27,681
Amortization of purchased intangible assets
904
385
3,062
1,539
Pro Forma EBITDA
80,215
75,523
357,867
308,055
Stock-based compensation
6,358
—
19,476
—
Acquisition related expenses
711
—
2,014
—
Strategic and financial restructuring expenses
146
1,823
3,760
5,170
Adjustment to tax receivable agreement liability
6,215
—
6,215
—
Gain on sale of investment
(522)
—
(38,372)
—
Other (income) expense, net
121
783
65
788
Pro Forma Adjusted EBITDA
93,244
$
78,129
$
351,025
$
314,013
$
Pro Forma Adjusted EBITDA
93,244
$
78,129
$
351,025
$
314,013
$
Depreciation and amortization
(9,809)
(7,883)
(36,761)
(27,681)
Amortization of purchased intangible assets
(904)
(385)
(3,062)
(1,539)
Stock-based compensation
(6,358)
—
(19,476)
—
Acquisition related expenses
(711)
—
(2,014)
—
Strategic and financial restructuring expenses
(146)
(1,823)
(3,760)
(5,170)
Adjustment to tax receivable agreement liability
(6,215)
—
(6,215)
—
Equity in net income of unconsolidated affiliates
(4,805)
(3,636)
(16,976)
(11,968)
Deferred compensation plan expense
(1,972)
—
(1,972)
—
62,324
64,402
260,789
267,655
Pro forma adjustment for revenue share post-IPO
—
39,663
41,263
105,012
Operating income
62,324
$
104,065
$
302,052
$
372,667
$
* Note that no pro forma adjustments were made for the three months
ended June 30, 2014; as such, actual results are presented for the
three months ended June 30, 2014.
Three Months Ended
June 30,
Year Ended
June 30,
Supplemental
Financial
Information
-
Reporting
of
Pro
Forma
Adjusted
EBITDA
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
and Non-GAAP Adjusted Fully Distributed Net Income
|
 25
Premier, Inc. supplemental financial information
(Unaudited, in thousands)
2014*
2013
2014
2013
Reconciliation of Non-GAAP Adjusted Fully Distributed Net
Income: Non-GAAP Adjusted Fully Distributed Net Income (pro
forma): Net income (loss) attributable to shareholders
8,879
$
(797)
$
28,332
$
7,376
$
Pro forma adjustment for revenue share post-IPO
—
(39,663)
(41,263)
(105,012)
Income tax expense
3,248
3,788
27,709
9,726
Stock-based compensation
6,358
—
19,476
—
Gain on sale of investment
(522)
—
(38,372)
—
Acquisition related expenses
711
—
2,014
—
Strategic and financial restructuring expenses
146
1,823
3,760
5,170
Adjustment to tax receivable agreement liability
6,215
—
6,215
—
Amortization of purchased intangible assets
904
385
3,062
1,539
Net income attributable to noncontrolling interest in Premier LP
57,281
104,726
303,336
369,189
Non-GAAP adjusted fully distributed income before income
taxes 83,220
70,262
314,269
287,988
Income tax expense on fully distributed income before income
taxes 33,288
28,105
125,708
115,195
Non-GAAP adjusted fully distributed net income (pro forma)
49,932
$
42,157
$
188,561
$
172,793
$
* Note that no pro forma adjustments were made for the three months
ended June 30, 2014; as such, actual results are presented for the
three months ended June 30, 2014.
Three Months Ended
June 30,
Year Ended
June 30,
Supplemental Financial Information - Reporting of Pro Forma Adjusted
EBITDA Reconciliation of Selected Non-GAAP Measures to GAAP
Measures and Non-GAAP Adjusted Fully Distributed Net Income
|
 26
Premier, Inc. supplemental financial information
(Unaudited, in thousands)
2014*
2013
2014
2013
Reconciliation of numerator for GAAP EPS to Adjusted Fully Distributed
EPS Net
income
(loss)
attributable
to
shareholders
after
adjustment
of
redeemable
limited partners' capital to redemption amount
491,389
$
(797)
$
(2,713,256)
$
7,376
$
Adjustment
of
redeemable
limited
partners'
capital
to
redemption
amount
(482,510)
-
2,741,588
-
Net income (loss) attributable to shareholders
8,879
(797)
28,332
7,376
Pro forma adjustment for revenue share post-IPO
—
(39,663)
(41,263)
(105,012)
Income tax expense
3,248
3,788
27,709
9,726
Stock-based compensation
6,358
—
19,476
—
Gain on sale of investment
(522)
—
(38,372)
—
Acquisition related expenses
711
—
2,014
—
Strategic and financial restructuring expenses
146
1,823
3,760
5,170
Adjustment to tax receivable agreement liability
6,215
—
6,215
—
Amortization of purchased intangible assets
904
385
3,062
1,539
Net income attributable to noncontrolling interest in Premier LP
57,281
104,726
303,336
369,189
Non-GAAP adjusted fully distributed income before income
taxes 83,220
70,262
314,269
287,988
Income tax expense on fully distributed income before income
taxes 33,288
28,105
125,708
115,195
Non-GAAP adjusted fully distributed net income (pro forma)
49,932
$
42,157
$
188,561
$
172,793
$
Reconciliation of denominator for GAAP EPS to Adjusted Fully Distributed
EPS Weighted Average:
Common shares used for basic and diluted earnings per share
32,375
5,733
25,633
5,858
Potentially dilutive shares
194
-
124
-
Class A common shares outstanding
-
26,642
6,742
26,517
Conversion of Class B common units
112,511
112,608
112,584
112,608
Weighted
average
fully
distributed
shares
outstanding
-
diluted
145,080
144,983
145,083
144,983
Reconciliation of GAAP EPS to Adjusted Fully Distributed EPS
GAAP income (loss) per share
$
15.18
$
(0.14) $ (105.85)
$
1.26 Impact of adjustment of redeemable limited partners'
capital to redemption amount
$
(14.90)
$
-
$ 106.96
$
- Impact of additions:
Pro forma adjustment for revenue share post-IPO
$
-
$
(6.92)
$
(1.61) $
(17.93) Income tax expense
$
0.10
$
0.66
$
1.08
$
1.66 Stock-based compensation
$
0.20
$
-
$
0.76
$
- Gain on sale of
investment
$
(0.02)
$
-
$
(1.50)
$
- Acquisition related
expenses
$
0.02
$
-
$
0.08
$
- Strategic and financial
restructuring expenses
$
0.00
$
0.32
$
0.15
$
0.88 Adjustment to tax receivable agreement
liability
$
0.19
$
-
$
0.24
$
- Amortization of purchased
intangible assets
$
0.03
$
0.07
$
0.12
$
0.26 Net income attributable to noncontrolling interest in
Premier LP
$
1.77
$ 18.27
$ 11.83
$
63.02 Impact of corporation taxes
$
(1.03)
$
(4.90)
$
(4.90) $
(19.66) Impact of increased share count
$
(1.20)
$
(7.06)
$
(6.06) $
(28.31) Non-GAAP
earnings
per
share
on
adjusted
fully
distributed
net
income
-
diluted
$
0.34
$
0.29
$
1.30
$
1.19 * Note that actual results are presented for the three
months ended June 30, 2014. Three Months Ended
June 30,
Year Ended
June 30,
Supplemental
Financial
Information
-
Reporting
of
Net
Income
and
Earnings
Per
Share
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|