Attached files
| file | filename |
|---|---|
| EX-99.2 - EX-99.2 - Premier, Inc. | d849429dex992.htm |
| 8-K - 8-K - Premier, Inc. | d849429d8k.htm |
 TRANSFORMING HEALTHCARE
33
rd
Annual
J.P.
Morgan
Healthcare
Conference
January 12, 2015
FROM THE INSIDE
Exhibit 99.1 |
 Forward-looking statements and Non-GAAP financial measures
2
PREMIER, INC.
Forward-looking statements—Certain statements included in this presentation,
including, but not limited to, those related to our financial and business
outlook, strategy and growth drivers, member retention rates and revenue
visibility, cross and upsell opportunities, acquisition activities and
pipeline, revenue available under contract, and 2015 financial guidance
and
related
assumptions,
are
“forward-looking
statements”
within
the
meaning
of
the
federal
securities laws. 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, including
Premier’s
most
recent
Form
10-K
for
the
year
ended
June
30,
2014.
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.
Non-GAAP financial measures—This presentation includes certain
“non-GAAP financial measures”
as
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. Our Form 10-Q for the quarter ended September 30, 2014,
filed on November 12, 2014, provides further explanation and disclosure
regarding our use of non-GAAP financial measures and should be read in conjunction
with this presentation. |
 Uniquely positioned to address industry challenges
“Data, data, everywhere...
…
and not a drop to drink!”
Premier is a uniquely-aligned healthcare performance
improvement company that provides integrated data-analytics
and business intelligence to comprehensively reduce costs,
improve quality, and drive better patient outcomes.
3
PREMIER, INC. |
 Vision
and objectives OUR VISION
Through the collaborative power of the Premier
alliance, we will lead the transformation to
high-quality, cost-effective healthcare
PREMIER, INC.
4
»
Make healthcare supply chain efficient and
effective
»
Deliver continuous improvement in cost
and quality today and enable success in
new healthcare delivery / payment models
»
Integrate data and knowledge to create
meaningful business intelligence that drives
improvement |
 Our
business at a glance Alliance
of
approximately
3,400
hospitals
–
68%
of
U.S.
community
hospitals
–
and
110,000
alternate
sites
of
care
74%
owned
by
health
systems
(1)
~$41
billion
in
group
purchasing
volume
Insights
into
~1
out
of
every
3
U.S.
health
system
discharges
Integrated clinical, financial and
operational data
Over
500
sales/field
and
advisory
services
employees
that
work
with
and
inside
our
member
hospitals
Data as of September 30, 2014.
(1)
Following October 31, 2014 exchange.
Premier’s unique customer alignment and data-driven intelligence
platform allow us to help our health systems manage current
challenges and build for the future…
all at the same time
PREMIER, INC.
5 |
 Unique
business model drives innovation and growth PREMIER, INC.
6
INTEGRATED SALES/FIELD FORCE
& PLATFORM
Become the data analytics “backbone”
with wrap-around services for cost and
quality improvement over the short term
and population health management
solutions over the long term
Change the game in supply chain,
uncover unmatched savings and value,
and lead the disruption of the industry
Note: Consolidated revenue is presented on a non-GAAP pro forma basis for
Supply Chain Services. See reconciliation pages in the appendix.
Performance Services
»
SaaS-based informatics products
»
PremierConnect
®
Enterprise
»
Advisory services
»
Performance improvement
collaboratives
27% of FY’14 consolidated revenue
Supply Chain Services
73% of FY’14 consolidated revenue
»
Group purchasing
»
Direct sourcing
»
Specialty pharmacy
»
Capital planning |
 Positioned to address industry needs
PREMIER, INC.
7
Helping health systems manage challenges, optimize the transition,
and build for the future . . . all at the same time |
 Key
investment differentiators PREMIER, INC.
8 |
 Unique customer
alignment
9 |
 Partnership model drives innovation and growth
SCALE
»
Represent ~68% of U.S. community hospitals
»
Clinical, financial, operational data integrated on
PremierConnect
®
platform
»
Insights into
~1 out of
every 3 U.S. health system
discharges
»
Approximately $41 billion in supply chain spend
»
Manage ~1,900 contracts from ~1,100 suppliers
ALIGNMENT
»
Members own ~74% of equity
(1)
»
10 health system board members
»
Premier field force embedded in member hospitals
COMMITMENT
»
Member average tenure ~15 years (76% at 10+ years)
»
Members view Premier as strategic partner or
organizational extension
CO-INNOVATION
»
Co-develop solutions with members
»
Committees composed of ~165 member hospitals
»
~1,100 hospitals in performance improvement
collaboratives
»
Data Alliance Collaborative
Note: Data as of September 30, 2014.
(1)
Following October 31, 2014 exchange.
PREMIER, INC.
10 |
 Data-driven,
technology enabled
11 |
 Connecting the data –
Enabling the information driven enterprise
12
PREMIER, INC. |
 PremierConnect
®
Enterprise
&
Data
Alliance
Collaborative
»
Clinical utilization effectiveness
»
Harm reporting
»
Community health & equity reporting
»
Ambulatory quality measures
»
Claims analytics
»
Total cost of care
»
Operational reporting
»
Predictive model for readmissions
»
Population health analytics
»
ACO reporting
»
Referral analytics
»
H&V procedural analytics
»
Readmissions metrics & management
»
Population health
»
Throughput analytics
»
Operations & throughput modeling
»
Population stratification
»
Disease modeling
PREMIER, INC.
13
*PremierConnect
Enterprise
and
Data
Alliance
Collaborative
as
of
September
30,
2014. |
 Measurable and scalable impact through collaboratives
PREMIER, INC.
14
~ 350
U.S. hospital members
~ 160,000
deaths avoided
~
$13.2
billion
saved
~ 55,800
readmissions prevented
~
21,700
instances
of
harm prevented
Approximately 1,100 U.S. hospital members participate in at least one
of our performance improvement collaboratives
Source: Premier QUEST participant performance data as of fiscal year end 6/30/2014
(Year 6, Q4 2013). Results are cumulative. Note: Deaths avoided and dollars
saved over the first 6 years of the program; instances of harm measured over
the past 4 years; readmissions prevented measured over the past 3
years. QUEST: Quality, Efficiency, Safety and Transparency. |
 Evolving
QUEST
to
focus
on
integrated
population
health
management
PREMIER, INC.
15
Measures and focus areas
have two-fold purpose:
»
Continue to drive improvement on
inpatient metrics that align with
value-based purchasing and
payment reductions and penalties
»
Begin and enhance the improvement
on ambulatory and community
health-based metrics that will further
help Premier members move to new
models of care delivery
The latest generation of QUEST began January 1, 2014, with over 365
members focusing on ambulatory and population health based metrics in
addition to inpatient care |
 Services
Integrated framework for delivering solutions
Collaboratives
Information
Technology
Solutions
QUALITY/SAFETY
IMPROVEMENT
•
Quality and safety
•
Physician performance
improvement
•
Regulatory compliance
•
Harm and readmissions
POPULATION
HEALTH
COST
MANAGEMENT
•
Group purchasing
•
Non-labor
•
Physician preference
•
Capital equipment
•
Labor
•
Total cost
•
Clinical variation
•
Resource utilization
•
Integrated pharmacy
PREMIER, INC.
16
INTEGRATED SALES/FIELD FORCE
&
PLATFORM
•
Physician network
management
•
Population analytics and
risk management
•
Population engagement |
 Diversified growth
engine
17 |
 Expanding
supply chain
solutions
Steady acute
GPO growth
“Other”
Upside
Performance Services
Supply Chain Services
Non-acute and
complementary
services
expansion
Top Priority Strategic Initiatives
Member
penetration
performance
services
New product
development
M&A and
growth
opportunities
Attributes
Top Priority Strategic Initiatives
PREMIER, INC.
18
Multiple opportunities to drive long-term sustainable growth
Expanded cost reduction
Non acute and pharmacy growth
Supply chain technology
Strong
distribution
channel
Desired
expertise/
capabilities
Clinical integration/ shared
services
Ambulatory data expansion
Population health capabilities |
 Growing from within our member channel
HISTORICAL BUSINESS GROWTH
PREMIER, INC.
19
CURRENT BUSINESS GROWTH
Note:
The
illustrations
above
are
representative
of
Premier’s
business
growth
and
do
not
necessarily
depict
the
specific
product
or
service
adoption
patterns
of
the
organizations
represented
here. |
 Member-driven co-development engine
Organic
Acquisitions
Partnerships
Premier platform enables rapid deployment of new solutions
2006
2007
2010
2011
2013
2014
------------Post-IPO---------------------
2013
2014
2014
PREMIER, INC.
20 |
 Strategic acquisitions address member needs
Clinical & physician
preference cost
reduction
Data acquisition from
multiple technologies
Health system capital
expenditure cost
reduction
Supply chain
technology
enablement
Quality & safety
improvement
Strategic Need
(Closed July 2013)
(Closed October 2013)
(Closed April 2014)
(Closed August 2014)
(Closed September 2014)
Company
PREMIER, INC.
21 |
 Attractive opportunities for further capital deployment
Performance Services
Supply Chain Services
Performance Services
Diverse and growing end markets to drive Premier’s growth
Supply Chain Services
PREMIER, INC.
22 |
 Compelling financial
profile
23 |
 MULTIPLE GROWTH
DRIVERS
•
Consolidated double-digit net revenue and adjusted
EBITDA
(1)
growth
•
Diversified revenue opportunities in Supply Chain Services
and Performance Services
•
Multiple emerging growth drivers
HIGH VISIBILITY
•
High retention rates in both business segments
•
5-7 year contracts in Supply Chain Services and 3-5 year
SaaS-based subscription contracts in Performance Services
•
Fiscal 2015 revenue visibility over 90%
ATTRACTIVE
ECONOMIC MODEL
•
Significant cross and upsell opportunities in existing
member base
•
High margins and low marginal cost to support new GPO
members and further penetration of existing GPO members
•
SaaS-based products generate high returns on new wins
EVOLVING
BUSINESS MIX
•
Investments in emerging growth initiatives will impact
adjusted
EBITDA
(1)
margins,
but
enhance
adjusted
EBITDA
(1)
growth
•
Capital investments increase D&A, impacting near-term net
income margins
DISCIPLINED CAPITAL
DEPLOYMENT TRACK
RECORD
•
Strong returns on acquired assets
•
Strategic, financial and execution framework in place for
capital deployment
Demonstrated financial model and performance
PREMIER, INC.
24
(1) See Adjusted EBITDA reconciliation to GAAP equivalent in Appendix.
|
 Our
multiple
business
and
growth
drivers
(1)
GPO
Specialty
pharmacy
Direct
sourcing
SaaS-based
informatics
products
Performance
improvement
collaboratives
Advisory
services
Data
management/
warehousing
Business
Revenue Drivers
FY’14 Results
(1)
Net Revenue
14%
Segment Adjusted
EBITDA
9%
Net Revenue
13%
Segment Adjusted
EBITDA
31%
Net Revenue
14%
Adjusted EBITDA
12%
Adjusted fully
distributed EPS
9%
Consolidated
•
Administrative fees paid
by suppliers
•
Drug reimbursement
•
Fee for service
•
Product sales of contract
manufactured items
•
SaaS-based subscriptions
•
Fee-for-service
•
Fee-for-service
•
SaaS-based subscriptions
•
SaaS-based subscriptions
•
Significant stickiness
•
Strong visibility across
diverse revenue streams
(1)
Results are presented on a non-GAAP pro forma basis. See Adjusted EBITDA,
Segment Adjusted EBITDA and fully distributed net income
reconciliation to GAAP equivalent in the Appendix.
Net Revenue
11% -
14%
Adjusted EBITDA
8% -
11%
Adjusted fully
distributed EPS
7% -
11%
PREMIER, INC.
25 |
 Net
revenue (1)
(millions)
(1)
See Net revenue, Segment Net Revenue, Adjusted EBITDA, Segment Adjusted EBITDA,
non-GAAP pro forma adjusted fully distributed net income, and non-
GAAP pro forma earnings per share on fully distributed net income reconciliations
to GAAP equivalents in Appendix; financial information for fiscal year 2014
and fiscal year 2013 have been adjusted on a non-GAAP pro forma basis to
reflect the impact of the company’s reorganization and initial public offering.
Adjusted EBITDA
(1)
(millions)
(2) Calculates income taxes at 40% on pre-tax income, assuming taxable C
corporate structure. (3) Calculates adjusted fully distributed
earnings per share, assuming total Class A and B common shares held by public
Double-digit
net
revenue
and
adjusted
EBITDA
growth
in
Fiscal
2014
(1)
Non-GAAP
pro
forma
adjusted
net
income
(2)
(millions)
Non-GAAP pro forma earnings per
share
on
fully
distributed
net
income
(3)
PREMIER, INC.
26 |
 Fiscal
2015
first-quarter
update
1
Net revenue
(1)
(millions)
(1)
See Net Revenue, Segment Net Revenue, Adjusted EBITDA, Segment Adjusted EBITDA,
non-GAAP adjusted fully distributed net income, and non-GAAP
earnings per share on fully distributed net income reconciliations to GAAP
equivalents in Appendix; comparisons are between actual financial results for the
first quarter ended September 30, 2014, and non-GAAP pro forma results, which
have been adjusted to reflect the impact of the company’s reorganization and
initial public offering, for the first quarter ended September 30,
2013. Adjusted EBITDA
(1)
(millions)
(2) Calculates income taxes at 40% on pre-tax income, assuming taxable C
corporate structure. (3) Calculates adjusted fully distributed
earnings per share, assuming total Class A and B common shares held by public
Non-GAAP
pro
forma
adjusted
net
income
(2)
(millions)
Non-GAAP pro forma earnings per
share
on
fully
distributed
net
income
(3)
PREMIER, INC.
27 |
 Cash
flow and capital flexibility at September 30, 2014 Cash, cash equivalents and
marketable securities of $398.2 million
No outstanding borrowings on $750 million
five-year unsecured revolving credit facility
Fiscal first-quarter cash flow from
operations of $45.9 million
CONSIDERABLE CASH AND
DEBT CAPACITY
AVAILABLE
AMPLE CAPITAL
FLEXIBILITY FOR FUTURE
ACQUISITIONS AND
GROWTH
PREMIER, INC.
28 |
 Fiscal
2015
annual
guidance
(1)
(in millions, except per share data)
Pro Forma
FY 2015
YoY Change
Net Revenue:
Supply Chain Services
$688 -
$707
8% -
11%
Performance Services
$281 -
$288
21% -
24%
Total Net Revenue
$969 -
$995
11% -
14%
Non-GAAP adjusted EBITDA
$379 -
$390
8% -
11%
Non-GAAP adjusted fully distributed
EPS
$1.39 -
$1.44
7% -
11%
(1)
As of fiscal 2015 first-quarter conference call, 11/10/2014. For non-GAAP
measures, see reconciliations to GAAP equivalents in Appendix. 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.
Guidance
is
based on comparisons with prior-year non-GAAP pro forma results, which have
been adjusted to reflect the impact of the company’s reorganization and
IPO. Financial guidance for year ending June 30, 2015:
Supply Chain Services growth driven by:
Guidance Assumptions:
PREMIER, INC.
29
Performance Services growth driven by:
»
Low to mid-single-digit growth in net administrative
fee revenue
»
Continuation of high GPO retention rates
»
15% -
20% product growth
»
Continued demand for integrated offerings of SaaS-based
products, advisory services and collaboratives
»
TheraDoc and Aperek full revenue contributions in second,
third and fourth quarters
»
Continuation of high SaaS institutional renewal rates
|
 Significant Fiscal 2015 revenue visibility: 90+%
PERFORMANCE METRICS
(1)
FY 2015
FY 2014
3 Year Average
Revenue available under contract
$898M
---
---
GPO retention rate
(2)
---
99%
97%
SaaS institutional renewal rate
(3)
---
94%
94%
(1)
As of fiscal year-end June 30, 2014
(2)
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.
(3)
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.
OVER 90%
FY 2015 REVENUE
GUIDANCE RANGE ALREADY
AVAILABLE UNDER
CONTRACT
PREMIER, INC.
30
HIGH GPO
RETENTION
AND SAAS
INSTITUTIONAL
RENEWAL RATES |
 Summary –
Key investment differentiators
UNIQUE CUSTOMER ALIGNMENT
»
Interests and perspectives are aligned with our customers
»
Members own ~74% of equity
(1)
and view Premier as strategic partner
»
Embedded field force co-developing solutions with members
DATA-DRIVEN, TECHNOLOGY ENABLED
»
Integrated, payer-
and vendor-agnostic data platform
»
Insights from approximately 1 in 3 U.S. health system discharges
»
Emerging data warehousing capabilities
DIVERSIFIED GROWTH ENGINE
»
Multiple revenue levers
»
Attractive acquisition and partnership pipeline
COMPELLING FINANCIAL PROFILE
»
Double digit revenue and EBITDA
(2)
growth in fiscal 2014
»
Considerable cash and debt capacity for future growth
PREMIER, INC.
31
(1)
Following October 31, 2014 exchange.
(2)
See Net revenue and Adjusted EBITDA reconciliations to GAAP equivalents in
Appendix; financial information for fiscal year 2014 and fiscal year 2013
have been adjusted on a non-GAAP pro forma basis to reflect the impact of the company’s reorganization
and initial public offering. |
 Thank you
32
FOR MORE INFORMATION CONTACT:
Jim Storey
Vice President, Investor Relations
Premier, Inc.
704-816-5958
jim_storey@premierinc.com |
 Appendix
33 |
 Our
leadership team Susan DeVore, President and CEO
11 years Premier; 26 years healthcare
Cap Gemini Ernst & Young
PREMIER, INC.
34 |
 Structure
Structural implications of Premier, Inc.
Structured as “Up-C”
with Premier, Inc. (parent C-Corp above operating partnership and
subsidiaries)
Premier, Inc. formed with two classes of stock
•
Class A shares held by public investors
•
Class B shares allocated to member owners
22% of Limited Partner interests sold to public, 78% retained by
member owners as
Class B units
Class B units eligible to exchange 1/7th per year, over seven-year
period Exchange of Class B units for A-shares (on a 1-for-1
basis) as B-units become eligible for exchange subject to ROFR by
members owners and Premier, Inc. First exchange on October 31, 2014, and
subsequent company directed offering injected 3.9 million shares of
liquidity into the public market, resulting in public ownership of 26% and
member owner interest of 74% Given
Up-C
structure
and
differences
between
taxes
paid
by
our
Class
A
unit
holder
(Premier
GP)
vs.
distributions
to
our
Class
B
unit
holders
(members
owners),
we
calculate
Adjusted
Fully
Distributed
Net
Income
1
for
comparability
purposes
Reflects
taxes
and
net
income
as
if
the
Company
was
a
C-Corp
for
all
periods
presented
Class A and Class B shares will be used to calculate fully diluted EPS to
eliminate variability due to member exchanges over time
Impact of IPO and
Exchange Process
Adjusted fully
distributed net
income
Share count
PREMIER, INC.
35
(1)
See Adjusted EBITDA and Adjusted Fully Distributed Net Income reconciliations to
GAAP equivalents in Appendix |
 Member owners allocated
income in operating
partnership based on
percentage ownership
Income tax expense equals
40% of income attributable
to Premier, Inc.
Member owners receive tax
distribution to cover any tax
liability on allocated income
Amount of retained
profitability in business
equal regardless of
ownership structure
Reflects 41% tax rate on
100% of pretax income
(assumes full C-Corp tax
treatment)
Amount paid for taxes equal
regardless of ownership
structure
Illustrative impact of ownership structure
PREMIER, INC.
36
1
For
illustrative
purposes
only.
Ownership
percentage
is
based
on
structure
at
the
time
of
the
October
2013
initial public offering and will change over time.
Ownership
(1)
22% Class A /
78% Class B
Ownership
100% Class A
Income Statement
Net Revenue
500,000
500,000
Cost of Revenue
200,000
200,000
Gross Profit
300,000
300,000
Operating Expenses
140,000
140,000
Operating Income
160,000
160,000
Net Income Attributable to NCI in Premier LP
(124,800)
-
Pre-Tax Income Attributable to Premier Inc.
35,200
160,000
Income Tax Expense
14,080
64,000
Net Income Attributable to Premier, Inc.
21,120
96,000
Income Retained in Business
Net Income Attributable to Premier, Inc.
21,120
96,000
Net Income Attributable to NCI in Premier LP
124,800
-
Tax Distribution to Premier LP Limited Partners
(49,920)
-
Net Income Retained in Business
96,000
96,000
Adjusted Fully Distributed Net Income
Net Income Attributable to Premier, Inc.
21,120
96,000
Add: Income Tax Expense
14,080
64,000
Add: Net Income Attributable to NCI in Premier
124,800
-
Fully Distributed Income Before Income Taxes
160,000
160,000
Adjusted for income tax expense on fully
distributed net income before income taxes
64,000
64,000
Adjusted Fully Distributed Net Income
96,000
96,000
Income Taxes/Tax Distributions
Income Tax Expense
14,080
64,000
Tax Distribution to Class B Limited Partners
49,920
-
Total Tax, including tax distribution to limited
partners
64,000
64,000 |
 Fiscal 2014 and fiscal 2013 non-GAAP reconciliations
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
(Unaudited, in thousands)
Adjustments
Adjustments
Amount
% of Net
Revenue
Amount
Amount
% of Net
Revenue
Amount
% of Net
Revenue
Amount
Amount
% of Net
Revenue
Net revenue:
Net administrative fees
464,837
$
51%
(41,263)
$
423,574
$
49%
519,219
$
60%
(105,012)
$
414,207
$
54%
Other services and support
233,186
26%
-
233,186
27%
205,685
24%
-
205,685
27%
Services
698,023
77%
(41,263)
656,760
76%
724,904
84%
(105,012)
619,892
81%
Products
212,526
23%
-
212,526
24%
144,386
16%
-
144,386
19%
Net revenue
910,549
100%
(41,263)
869,286
100%
869,290
100%
(105,012)
764,278
100%
Cost of revenue:
Services
115,740
13%
-
115,740
13%
103,795
12%
-
103,795
14%
Products
191,885
21%
-
191,885
22%
133,618
15%
-
133,618
17%
Cost of revenue
307,625
34%
-
307,625
35%
237,413
27%
-
237,413
31%
Gross profit
602,924
66%
(41,263)
561,661
65%
631,877
73%
(105,012)
526,865
69%
Operating expenses:
Selling, general and administrative
294,421
33%
-
294,421
35%
248,301
29%
-
248,301
33%
Research and development
3,389
— %
-
3,389
— %
9,370
1%
-
9,370
1%
Amortization of purchased intangible assets
3,062
— %
-
3,062
— %
1,539
— %
-
1,539
— %
Total operating expenses
300,872
33%
-
300,872
35%
259,210
30%
-
259,210
34%
Operating income
302,052
33%
(41,263)
260,789
30%
372,667
43%
(105,012)
267,655
35%
Other income, net
58,274
6%
-
58,274
7%
12,145
1%
-
12,145
2%
Income before income taxes
360,326
40%
(41,263)
319,063
37%
384,812
44%
(105,012)
279,800
37%
Income tax expense
27,709
3%
(3,239)
24,470
3%
9,726
1%
22,813
32,539
4%
Net income
332,617
37%
(38,024)
294,593
34%
375,086
43%
(127,825)
247,261
33%
Net (income) loss attributable to noncontrolling interest
in S2S Global
(949)
— %
-
(949)
— %
1,479
— %
-
1,479
— %
Net income attributable to noncontrolling interest in
Premier LP
(303,336)
(33)%
57,690
(245,646)
(28)%
(369,189)
(42)%
150,726
(218,463)
(29)%
Net income attributable to noncontrolling interest
(304,285)
(33)%
57,690
(246,595)
(28)%
(367,710)
(42)%
150,726
(216,984)
(29)%
Net income attributable to shareholders
28,332
$
4%
19,666
$
47,998
$
6%
7,376
$
1%
22,901
$
30,277
$
4%
Adjustment of redeemable limited partners' capital to
redemption amount
(2,741,588)
$
nm
-
$
(2,741,588)
$
nm
-
$
nm
-
$
-
$
nm
Net income (loss) attributable to shareholders after
adjustment of redeemable partners' capital to
redemption amount
(2,713,256)
$
nm
19,666
$
(2,693,590)
$
nm
7,376
$
nm
22,901
$
30,277
$
nm
Adjusted EBITDA
392,288
$
43%
(41,263)
$
351,025
$
40%
419,025
$
48%
(105,012)
$
314,013
$
41%
Adjusted Fully Distributed Net Income
na
na
na
188,561
$
22%
na
na
na
172,793
$
23%
nm - Not meaningful
na - Not applicable
Actual
Actual
Non-GAAP Pro Forma
Year Ended June 30,
2014
2013
Non-GAAP Pro Forma
PREMIER, INC.
37 |
 Fiscal 2014 and fiscal 2013 non-GAAP reconciliations
PREMIER, INC.
38
(Unaudited, in thousands)
Actual
Adjustments
Non-GAAP
Pro Forma
Actual
Adjustments
Non-GAAP
Pro Forma
Reconciliation of Non-GAAP Pro Forma Net Revenue to Net Revenue:
Supply Chain Services
678,141
$
(41,263)
$
636,878
$
664,076
$
(105,012)
$
559,064
$
Performance Services
232,408
-
232,408
205,214
-
205,214
Net Revenue
910,549
(41,263)
869,286
869,290
(105,012)
764,278
Reconciliation of Net Income to Adjusted EBITDA and Reconciliation of
Segment Adjusted EBITDA to Income Before Income Taxes:
Net income
332,617
$
(38,024)
$
294,593
$
375,086
$
(127,825)
$
247,261
$
Interest and investment income, net
(1,019)
-
(1,019)
(965)
-
(965)
Income tax expense
27,709
(3,239)
24,470
9,726
22,813
32,539
Depreciation and amortization
36,761
-
36,761
27,681
-
27,681
Amortization of purchased intangible assets
3,062
-
3,062
1,539
-
1,539
EBITDA
399,130
(41,263)
357,867
413,067
(105,012)
308,055
Stock-based compensation expense
19,476
-
19,476
-
-
-
Acquisition related expenses
2,014
-
2,014
-
-
-
Strategic and financial restructuring expenses
3,760
-
3,760
5,170
-
5,170
Gain on sale of investment
(38,372)
-
(38,372)
-
-
-
Adjustment to tax receivable agreement liability
6,215
-
6,215
-
-
-
Other (income) expense, net
65
-
65
788
-
788
Adjusted EBITDA
392,288
$
(41,263)
$
351,025
$
419,025
$
(105,012)
$
314,013
$
Segment Adjusted EBITDA:
Supply Chain Services
396,470
$
(41,263)
$
355,207
$
431,628
$
(105,012)
$
326,616
$
Performance Services
73,898
-
73,898
56,456
-
56,456
Corporate
(g)
(78,080)
-
(78,080)
(69,059)
-
(69,059)
Adjusted EBITDA
392,288
(41,263)
351,025
419,025
(105,012)
314,013
Depreciation and amortization
(36,761)
-
(36,761)
(27,681)
-
(27,681)
Amortization of purchased intangible assets
(3,062)
-
(3,062)
(1,539)
-
(1,539)
Stock-based compensation expense
(19,476)
-
(19,476)
-
-
-
Acquisition related expenses
(2,014)
-
(2,014)
-
-
-
Strategic and financial restructuring expenses
(3,760)
-
(3,760)
(5,170)
-
(5,170)
Adjustment to tax receivable agreement liability
(6,215)
-
(6,215)
-
-
-
Equity in net income of unconsolidated affiliates
(16,976)
-
(16,976)
(11,968)
-
(11,968)
Deferred compensation plan expense
(1,972)
-
(1,972)
-
-
-
Operating income
302,052
(41,263)
260,789
372,667
(105,012)
267,655
Equity in net income of unconsolidated affiliates
16,976
-
16,976
11,968
-
11,968
Interest and investment income, net
1,019
-
1,019
965
-
965
Gain on sale of investment
38,372
-
38,372
-
-
-
Other income (expense), net
1,907
-
1,907
(788)
-
(788)
Income before income taxes
360,326
$
(41,263)
$
319,063
$
384,812
$
(105,012)
$
279,800
$
Year Ended June 30,
2014
2013 |
 Fiscal 2014 and fiscal 2013 non-GAAP reconciliations
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
(Unaudited, in thousands)
2014
2013
28,332
$
7,376
$
(41,263)
(105,012)
27,709
9,726
19,476
—
2,014
—
3,760
5,170
(38,372)
—
6,215
—
3,062
1,539
303,336
369,189
314,269
287,988
125,708
115,195
188,561
$
172,793
$
Non-GAAP Pro forma fully distributed income before income taxes
Income tax expense on fully distributed income before income taxes
Non-GAAP Pro Forma Adjusted Fully Distributed Net Income
Acquisition related expenses
Strategic and financial restructuring expenses
Gain on sale of investment
Adjustment to tax receivable agreement liability
Amortization of purchased intangible assets
Net income attributable to noncontrolling interest in Premier LP
Stock-based compensation expense
Year Ended June 30,
Net income attributable to shareholders
Pro forma adjustment for revenue share post-IPO
Income tax expense
PREMIER, INC.
39 |
 Fiscal 2014 and fiscal 2013 non-GAAP reconciliations
PREMIER, INC.
40
2014
2013
Reconciliation of numerator for GAAP EPS to Non-GAAP EPS on Adjusted
Fully Distributed Net Income Net income (loss) attributable to
shareholders after adjustment of redeemable limited
partners' capital to redemption amount
(2,713,256)
$
7,376
$
Adjustment of redeemable limited partners' capital to redemption
amount
2,741,588
-
Net income (loss) attributable to shareholders
28,332
7,376
Pro forma adjustment for revenue share post-IPO
(41,263)
(105,012)
Income tax expense
27,709
9,726
Stock-based compensation
19,476
—
Gain on sale of investment
(38,372)
—
Acquisition related expenses
2,014
—
Strategic and financial restructuring expenses
3,760
5,170
Adjustment to tax receivable agreement liability
6,215
—
Amortization of purchased intangible assets
3,062
1,539
Net income attributable to noncontrolling interest in Premier LP
303,336
369,189
Non-GAAP pro forma adjusted fully distributed income before income
taxes 314,269
287,988
Income tax expense on fully distributed income before income
taxes 125,708
115,195
Non-GAAP pro forma adjusted fully distributed net income
188,561
$
172,793
$
Reconciliation of denominator for GAAP EPS to Non-GAAP to Adjusted
Fully Distributed Net Income Weighted Average:
Common shares used for basic and diluted earnings per share
25,633
5,858
Potentially dilutive shares
124
-
Class A common shares outstanding
6,742
26,517
Conversion of Class B common units
112,584
112,608
Weighted average fully distributed shares outstanding -
diluted
145,083
144,983
Reconciliation of GAAP EPS to Adjusted Fully Distributed EPS
GAAP income (loss) per share
$ (105.85)
$
1.26 Impact of adjustment of redeemable limited partners'
capital to redemption amount
$ 106.96
$
- Impact of additions:
Pro forma adjustment for revenue share post-IPO
$
(1.61) $
(17.93) Income tax expense
$
1.08
$
1.66 Stock-based compensation
$
0.76
$
- Gain on sale of
investment
$
(1.50)
$
- Acquisition related
expenses
$
0.08
$
- Strategic and financial
restructuring expenses
$
0.15
$
0.88 Adjustment to tax receivable agreement
liability
$
0.24
$
- Amortization of purchased
intangible assets
$
0.12
$
0.26 Net income attributable to noncontrolling interest in
Premier LP
$ 11.83
$
63.02 Impact of corporation taxes
$
(4.90) $
(19.66) Impact of increased share count
$
(6.06) $
(28.31) Non-GAAP earnings per share on adjusted fully
distributed net income -
diluted
$ 1.30
$
1.19
Supplemental Financial Information -
Reporting of Net Income and Earnings Per Share
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
(Unaudited)
(In thousands)
Year Ended
June 30, |
 Fiscal 2015 and fiscal 2014 first-quarter non-GAAP reconciliations
(Unaudited, in thousands)
2014*
2013
Reconciliation of Non-GAAP Pro Forma Net Revenue to Net
Revenue: Non-GAAP Pro Forma Net Revenue
229,308
$
199,313
$
Non-GAAP pro forma
adjustment for revenue share post-IPO —
41,263
Net Revenue
229,308
$
240,576
$
Reconciliation of Supply Chain
Services Non-GAAP Pro Forma Net Revenue to Supply Chain Services Net Revenue:
Non-GAAP Pro Forma Supply Chain Services Net Revenue
170,302
$
146,195
$
Non-GAAP pro forma
adjustment for revenue share post-IPO —
41,263
Supply Chain Services Net Revenue
170,302
$
187,458
$
Net income
64,887
$
112,528
$
Non-GAAP pro forma
adjustment for revenue share post-IPO —
(41,263)
Interest and investment income, net
(191)
(220)
Income tax expense
5,811
764
Depreciation and amortization
10,308
8,356
Amortization of purchased intangible assets
903
601
EBITDA
81,718
80,766
Stock-based compensation
6,439
325
Acquisition related expenses
1,278
142
Strategic and financial restructuring expenses
96
1,842
Adjustment to tax receivable agreement liability
(1,073)
—
Acquisition related adjustment - deferred revenue
2,065
—
Other (income) expense, net
(5)
(4)
Adjusted EBITDA
90,518
$
83,071
$
Segment Adjusted
EBITDA: Supply Chain Services
91,268
$
125,480
$
Non-GAAP pro forma
adjustment for revenue share post-IPO —
(41,263)
Supply Chain Services
(including non-GAAP pro forma adjustment)
91,268
$
84,217
$
Performance
Services 18,362
16,329
Corporate
(19,112)
(17,475)
Adjusted EBITDA
90,518
$
83,071
$
Depreciation and
amortization (10,308)
(8,356)
Amortization of purchased intangible assets
(903)
(601)
Stock-based compensation
(6,439)
(325)
Acquisition related expenses
(1,278)
(142)
Strategic and financial restructuring expenses
(96)
(1,842)
Adjustment to tax receivable agreement liability
1,073
—
Acquisition related adjustment - deferred revenue
(2,065)
—
Equity in net income of unconsolidated affiliates
(4,866)
(4,114)
Deferred compensation plan expense
509
—
66,145
67,691
Non-GAAP pro forma adjustment for revenue share post-IPO
—
41,263
Operating income
66,145
$
108,954
$
Equity in net income of unconsolidated
affiliates 4,866
4,114
Interest and investment income, net
191
220
Other (expense) income, net
(504)
4
Income before income taxes
70,698
$
113,292
$
* Note that no pro forma adjustments were made
for the three months ended September 30, 2014; as such, actual results are presented for the three months ended September 30, 2014.
Three Months Ended
September 30,
Reporting of Non-GAAP Pro Forma Adjusted EBITDA and Non-GAAP
Adjusted Fully Distributed Net Income Reconciliation of Selected
Non-GAAP Measures to GAAP Measures Reconciliation of Net Income
to Adjusted EBITDA and Reconciliation of Segment Adjusted EBITDA to Income Before Income Taxes:
PREMIER, INC.
41 |
 Fiscal 2015 and fiscal 2014 first-quarter non-GAAP reconciliations
(Unaudited, in thousands)
2014*
2013
Reconciliation of Non-GAAP Pro Forma Adjusted Fully Distributed Net
Income: Net income (loss) attributable to shareholders
9,273
$
(476)
$
Non-GAAP pro forma adjustment for revenue share post-IPO
—
(41,263)
Income tax expense
5,811
764
Stock-based compensation
6,439
325
Acquisition related expenses
1,278
142
Strategic and financial restructuring expenses
96
1,842
Adjustment to tax receivable agreement liability
(1,073)
—
Acquisition related adjustment - deferred revenue
2,065
—
Amortization of purchased intangible assets
903
601
Net income attributable to noncontrolling interest in Premier LP
54,816
113,214
Non-GAAP pro forma adjusted fully distributed income before income
taxes 79,608
75,149
Income tax expense on fully distributed income before income
taxes 31,843
30,060
Non-GAAP Pro Forma Adjusted Fully Distributed Net Income
47,765
$
45,089
$
Reporting of Non-GAAP Pro Forma
Adjusted EBITDA and Non-GAAP Adjusted Fully Distributed Net Income
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
Three Months Ended
September 30,
* Note that no pro forma adjustments were made for the three months
ended September 30, 2014; as such, actual results are presented for the three months ended
September 30, 2014.
PREMIER, INC.
42 |
 Fiscal 2015 and fiscal 2014 first-quarter non-GAAP reconciliations
PREMIER, INC.
43
(Unaudited, in thousands, except per share data)
2014*
2013
Reconciliation of numerator for GAAP EPS to Non-GAAP EPS on Adjusted
Fully Distributed Net Income Net loss attributable to shareholders
after adjustment of redeemable limited partners' capital to redemption amount
(373,384)
$
(476)
$
Adjustment
of
redeemable
limited
partners'
capital
to
redemption
amount
382,657
—
Net income (loss) attributable to shareholders
9,273
(476)
Non-GAAP pro forma adjustment for revenue share post-IPO
—
(41,263)
Income tax expense
5,811
764
Stock-based compensation
6,439
325
Acquisition related expenses
1,278
142
Strategic and financial restructuring expenses
96
1,842
Adjustment to tax receivable agreement liability
(1,073)
—
Acquisition
related
adjustment
-
deferred
revenue
2,065
—
Amortization of purchased intangible assets
903
601
Net income attributable to noncontrolling interest in Premier LP
54,816
113,214
Non-GAAP pro forma adjusted fully distributed income before income
taxes 79,608
75,149
Income tax expense on fully distributed income before income taxes
31,843
30,060
Non-GAAP pro forma adjusted fully distributed net income
47,765
$
45,089
$
Reconciliation of denominator for GAAP EPS to Non-GAAP Adjusted Fully
Distributed Net Income Weighted Average:
Common shares used for basic and diluted earnings per share
32,376
5,627
Potentially dilutive shares
253
25
Class A common shares outstanding
-
26,749
Conversion of Class B common units
112,083
112,608
Weighted
average
fully
distributed
shares
outstanding
-
diluted
144,712
145,009
Reconciliation of GAAP EPS to Adjusted Fully Distributed EPS
GAAP loss per share
$ (11.53)
$
(0.08) Impact of adjustment of redeemable limited partners'
capital to redemption amount
$ 11.82
$
- Impact of additions:
Non-GAAP pro forma adjustment for revenue share post-IPO
$
-
$
(7.33) Income tax expense
$
0.18
$
0.14 Stock-based compensation
$
0.20
$
0.06 Acquisition related expenses
$
0.04
$
0.03 Strategic and financial restructuring expenses
$
0.00
$
0.33 Adjustment to tax receivable agreement liability
$
(0.03)
$
- Acquisition
related
adjustment
-
deferred
revenue
$
0.06
$
- Amortization of purchased
intangible assets
$
0.03
$
0.11 Net income attributable to noncontrolling interest in
Premier LP
$
1.69
$ 20.12
Impact of corporation taxes
$
(0.98)
$
(5.34) Impact of increased share count
$
(1.15)
$
(7.70) Non-GAAP
pro
forma
earnings
per
share
on
adjusted
fully
distributed
net
income
-
diluted
$ 0.33
$
0.31 * Note that no pro forma adjustments were made for the three
months ended September 30, 2014; as such, actual results are presented for the three months ended September 30, 2014.
Three Months Ended
September 30,
Reporting of Net Income and Earnings Per Share
Reconciliation of Selected Non-GAAP Measures to GAAP Measures
|