Delaware
|
|
35-2477140
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(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
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13034 Ballantyne Corporate Place
Charlotte, North Carolina
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28277
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Class A Common Stock, $0.01 Par Value
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NASDAQ Global Select Market
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Large accelerated filer
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x
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Accelerated filer
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o
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Non-accelerated filer
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o
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Smaller reporting company
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o
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Emerging growth company
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o
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(Do not check if a smaller reporting company)
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Page
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ITEM 1.
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||
ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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•
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competition which could limit our ability to maintain or expand market share within our industry;
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•
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consolidation in the healthcare industry;
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•
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potential delays recognizing or increasing revenue if the sales cycle or implementation period takes longer than expected;
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•
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the terminability of member participation in our group purchasing organization programs ("GPO") with limited or no notice, or the failure of a significant number of members to renew their GPO participation agreements;
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•
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the rate at which the markets for our non-GPO services and products develop;
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•
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the dependency of our members on payments from third-party payers;
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•
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our reliance on administrative fees, which we receive from GPO suppliers;
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•
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our ability to maintain third-party provider and strategic alliances or enter into new alliances;
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•
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our ability to timely offer new and innovative products and services;
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•
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the portion of revenues we receive from our largest members;
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•
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risks and expenses related to future acquisition opportunities and integration of acquisitions;
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•
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financial and operational risks associated with investments in, or partnerships or joint ventures with, other businesses, particularly those that we do not control;
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•
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potential litigation;
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•
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our reliance on Internet infrastructure, bandwidth providers, data center providers and other third parties and our own systems for providing services to our users;
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•
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data loss or corruption due to failures or errors in our systems and service disruptions at our data centers, or breaches or failures of our security measures;
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•
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the financial, operational and reputational consequences of cyber-attacks or other data security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us or our members or other third parties;
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•
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our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
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•
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our use of "open source" software;
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•
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changes in industry pricing benchmarks;
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•
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our inability to grow our integrated pharmacy business or maintain current patients due to increases in the safety risk profiles of prescription drugs or the withdrawal of prescription drugs from the market, or our inability to maintain and expand our existing base of drugs in our integrated pharmacies;
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•
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our dependency on contract manufacturing facilities located in various parts of the world;
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•
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our ability to attract, hire, integrate and retain key personnel;
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•
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adequate protection of our intellectual property and potential claims against our use of the intellectual property of third parties;
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•
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potential sales and use tax liability in certain jurisdictions;
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•
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changes in tax laws that materially impact our tax rate, income tax expense, cash flows or tax receivable agreement ("TRA") liabilities;
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•
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our indebtedness and our ability to obtain additional financing on favorable terms;
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•
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fluctuation of our quarterly cash flows, revenues and results of operations;
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•
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changes and uncertainty in the political, economic or regulatory environment affecting healthcare organizations, including with respect to the status of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010, collectively referred to as the "ACA";
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•
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our compliance with complex federal and state laws governing financial relationships among healthcare providers and the submission of false or fraudulent healthcare claims;
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•
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interpretation and enforcement of current or future antitrust laws and regulations;
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•
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compliance with complex federal and state privacy, security and breach notification laws;
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•
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compliance with current or future laws, rules or regulations adopted by the Food & Drug Administration ("FDA") applicable to our software applications that are considered medical devices;
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•
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compliance with, and potential changes to, extensive federal, state and local laws, regulations and procedures governing our integrated pharmacy operations;
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•
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risks inherent in the filling, packaging and distribution of pharmaceuticals, including the counseling required to be provided by our pharmacists for dispensing of products;
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•
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our holding company structure and dependence on distributions from Premier Healthcare Alliance, L.P. ("Premier LP");
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•
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different interests among our member owners or between us and our member owners;
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•
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the ability of our member owners to exercise significant control over us, including through the election of all of our directors;
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•
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exemption from certain corporate governance requirements due to our status as a "controlled company" within the meaning of the NASDAQ rules;
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•
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the terms of agreements between us and our member owners;
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•
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payments made under the TRAs to Premier LP's limited partners and our ability to realize the expected tax benefits related to the acquisition of Class B common units from Premier LP's limited partners;
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•
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changes to Premier LP's allocation methods or examinations or changes in interpretation of applicable tax laws and regulations by various taxing authorities that may increase a tax-exempt limited partner's risk that some allocated income is unrelated business taxable income;
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•
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provisions in our certificate of incorporation and bylaws and the Amended and Restated Limited Partnership Agreement of Premier LP (as amended, the "LP Agreement") and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us;
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•
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failure to maintain an effective system of internal controls;
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•
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the number of shares of Class A common stock that will be eligible for sale or exchange in the near future and the dilutive effect of such issuances;
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•
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our intention not to pay cash dividends on our Class A common stock;
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•
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possible future issuances of common stock, preferred stock, limited partnership units or debt securities and the dilutive effect of such issuances; and
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•
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the risk factors discussed under the heading "Risk Factors" in Item 1A herein.
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•
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improve the efficiency and effectiveness of the healthcare supply chain;
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•
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deliver improvement in cost, quality and safety;
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•
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innovate and enable success in emerging healthcare delivery and payment models to manage the health of populations; and
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•
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utilize data and analytics to drive increased connectivity, and clinical, financial and operational improvement.
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Year Ended June 30,
|
|||
|
2017
|
2016
|
2015
|
3 Year Average
|
GPO retention rate
(a)
|
99%
|
97%
|
99%
|
98%
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SaaS institutional renewal rate
(b)
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95%
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92%
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94%
|
94%
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(a)
|
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.
|
(b)
|
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.
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(i)
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as to how we will use and disclose the protected health information within certain allowable parameters established by HIPAA,
|
(ii)
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that we will implement reasonable and appropriate administrative, organizational, physical and technical safeguards to protect such information from impermissible use or disclosure,
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(iii)
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that we will enter into similar agreements with our agents and subcontractors that have access to the information,
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(iv)
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that we will report breaches of unsecured protected health information, security incidents and other inappropriate uses or disclosures of the information, and
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(v)
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that we will assist the covered entity with certain of its duties under HIPAA.
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•
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failing to integrate the operations and personnel of the acquired businesses in an efficient, timely manner;
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•
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failure of a selling party to produce all material information during the pre-acquisition due diligence process, or to meet their obligations under post-acquisition agreements;
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•
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potential liabilities of an acquired company, some of which may not become known until after the acquisition;
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•
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an acquired company's lack of compliance with laws and governmental rules and regulations, and the related costs and expenses necessary to bring such company into compliance;
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•
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an acquired company's general information technology controls may not be sufficient to prevent unauthorized access or transactions, cyber-attacks or other data security breaches;
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•
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managing the potential disruption to our ongoing business;
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•
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distracting management focus from our existing core businesses;
|
•
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encountering difficulties in identifying and acquiring products, technologies, or businesses that will help us execute our business strategy;
|
•
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entering new markets in which we have little to no experience;
|
•
|
impairing relationships with employees, members, and strategic partners;
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•
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failing to implement or remediate controls, procedures and policies appropriate for a public company at acquired companies lacking such financial, disclosure or other controls, procedures and policies, potentially resulting in a material weakness in our internal controls over financial reporting;
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•
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the amortization of purchased intangible assets;
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•
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incurring expenses associated with an impairment of all or a portion of goodwill and other intangible assets due to the failure of certain acquisitions to realize expected benefits; and
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•
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diluting the share value and voting power of existing stockholders.
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•
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damage from fire, power loss, and other natural disasters;
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•
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communications failures;
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•
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software and hardware errors, failures, and crashes;
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•
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security breaches and computer viruses and similar disruptive problems; and
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•
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other potential interruptions.
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•
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finance unanticipated working capital requirements;
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•
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develop or enhance our technological infrastructure and our existing products and services;
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•
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fund strategic relationships;
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•
|
respond to competitive pressures; and
|
•
|
acquire complementary businesses, assets, technologies, products or services.
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•
|
make it difficult for us to satisfy our obligations, including making interest payments on our debt obligations;
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•
|
limit our ability to obtain additional financing to operate our business;
|
•
|
require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund capital expenditures and working capital and other general operational requirements;
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•
|
limit our flexibility to execute our business strategy and plan for and react to changes in our business and the healthcare industry;
|
•
|
place us at a competitive disadvantage relative to some of our competitors that have less debt than us;
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•
|
limit our ability to pursue acquisitions; and
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•
|
increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates or a downturn in our business or the economy.
|
•
|
our ability to offer new and innovative products and services;
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•
|
regulatory changes, including changes in healthcare laws;
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•
|
unforeseen legal expenses, including litigation and settlement costs;
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•
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the purchasing and budgeting cycles of our members;
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•
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the lengthy sales cycles for our products and services, which may cause significant delays in generating revenues or an inability to generate revenues;
|
•
|
pricing pressures with respect to our future sales;
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•
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the timing and success of new product and service offerings by us or by our competitors;
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•
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member decisions regarding renewal or termination of their contracts, especially those involving our larger member relationships;
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•
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the amount and timing of costs related to the maintenance and expansion of our business, operations and infrastructure;
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•
|
the amount and timing of costs related to the development, adaptation, acquisition, or integration of acquired technologies or businesses;
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•
|
the financial condition of our current and potential new members; and
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•
|
general economic and market conditions and conditions specific to the healthcare industry.
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•
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register our company and list our FDA-regulated products with the FDA;
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•
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obtain pre-market clearance from the FDA based on demonstration of substantial equivalence to a legally marketed device before marketing our regulated products;
|
•
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obtain FDA approval by demonstrating the safety and effectiveness of the regulated products prior to marketing;
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•
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submit to inspections by the FDA; and
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•
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comply with various FDA regulations, including the agency’s quality system regulation, medical device reporting regulations, requirements for medical device modifications, requirements for clinical investigations, corrections and removal reporting regulations, and post-market surveillance regulations.
|
•
|
divide our Board of Directors into three classes with staggered three-year terms, which may delay or prevent a change of our management or a change in control;
|
•
|
authorize our Board of Directors to issue “blank check” preferred stock in order to increase the aggregate number of outstanding shares of capital stock and thereby make a takeover more difficult and expensive;
|
•
|
do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;
|
•
|
do not permit stockholders to take action by written consent other than during the period following our IPO in which we qualify as a “controlled company” within the meaning of NASDAQ rules;
|
•
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provide that special meetings of the stockholders may be called only by or at the direction of the Board of Directors, the chair of our Board or the chief executive officer;
|
•
|
require advance notice to be given by stockholders of any stockholder proposals or director nominees;
|
•
|
require a super-majority vote of the stockholders to amend our certificate of incorporation; and
|
•
|
allow our Board of Directors to make, alter or repeal our bylaws but only allow stockholders to amend our bylaws upon the approval of 66
2
/
3
% or more of the voting power of all of the outstanding shares of our capital stock entitled to vote.
|
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Price Range of Common Stock
|
|||||
|
High
|
Low
|
||||
Fiscal Year Ended June 30, 2017
|
|
|
||||
Fourth Quarter
|
$
|
36.28
|
|
$
|
31.42
|
|
Third Quarter
|
$
|
32.86
|
|
$
|
29.15
|
|
Second Quarter
|
$
|
32.79
|
|
$
|
28.27
|
|
First Quarter
|
$
|
34.35
|
|
$
|
30.61
|
|
|
|
|
||||
Fiscal Year Ended June 30, 2016
|
|
|
||||
Fourth Quarter
|
$
|
35.11
|
|
$
|
30.36
|
|
Third Quarter
|
$
|
37.00
|
|
$
|
29.68
|
|
Second Quarter
|
$
|
37.24
|
|
$
|
33.27
|
|
First Quarter
|
$
|
39.11
|
|
$
|
32.62
|
|
•
|
our Class A common stock;
|
•
|
the NASDAQ Composite stock index (“NASDAQ Composite index”); and
|
•
|
a customized peer group of twelve companies selected by us (the “Peer Group”).
|
Value of Investment as of Stated Date:
|
|
|
|
|
|
||||||||||
Company/Index Name
|
9/26/2013
|
6/30/2014
|
6/30/2015
|
6/30/2016
|
6/30/2017
|
||||||||||
Premier, Inc. Class A Common Stock
(a)
|
$
|
100.00
|
|
$
|
94.62
|
|
$
|
125.48
|
|
$
|
106.69
|
|
$
|
117.46
|
|
NASDAQ Composite
|
$
|
100.00
|
|
$
|
118.03
|
|
$
|
134.49
|
|
$
|
131.58
|
|
$
|
167.83
|
|
Peer Group
(b)
|
$
|
100.00
|
|
$
|
103.97
|
|
$
|
120.02
|
|
$
|
110.06
|
|
$
|
119.35
|
|
(a)
|
As noted above, we have not paid any cash dividends during the period covered by the graph.
|
(b)
|
Includes the performance of IHS Markit, Ltd beginning on July 13, 2016.
|
(c)
|
We believe that the stock price of two members of the Peer Group, Advisory Board Company and athenahealth, Inc., reflect a trading premium due to market activities unrelated to their ongoing business operations. In February 2017, Advisory Board Company announced that it had commenced a process to explore strategic alternatives focused on maximizing shareholder value. In addition, during 2017, an activist hedge fund has disclosed in SEC filings on Schedule 13D that it has made investments in each of these two companies.
|
|
Year ended June 30,
|
||||||||||||||
Consolidated Statements of Income Data:
|
2017
(1)
|
2016
(2)
|
2015
(3)
|
2014
(4)
|
2013
|
||||||||||
Net revenue:
|
|
|
|
|
|
||||||||||
Net administrative fees
(5)
|
$
|
557,468
|
|
$
|
498,394
|
|
$
|
457,020
|
|
$
|
464,837
|
|
$
|
519,219
|
|
Other services and support
|
363,087
|
|
337,554
|
|
270,748
|
|
233,186
|
|
205,685
|
|
|||||
Services
|
920,555
|
|
835,948
|
|
727,768
|
|
698,023
|
|
724,904
|
|
|||||
Products
|
534,118
|
|
326,646
|
|
279,261
|
|
212,526
|
|
144,386
|
|
|||||
Net revenue
|
1,454,673
|
|
1,162,594
|
|
1,007,029
|
|
910,549
|
|
869,290
|
|
|||||
Cost of revenue
|
680,048
|
|
457,056
|
|
396,910
|
|
307,625
|
|
237,413
|
|
|||||
Gross profit
|
774,625
|
|
705,538
|
|
610,119
|
|
602,924
|
|
631,877
|
|
|||||
Operating expenses:
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
405,471
|
|
403,611
|
|
332,004
|
|
294,421
|
|
248,301
|
|
|||||
Research and development
|
3,107
|
|
2,925
|
|
2,937
|
|
3,389
|
|
9,370
|
|
|||||
Amortization of purchased intangible assets
|
48,327
|
|
33,054
|
|
9,136
|
|
3,062
|
|
1,539
|
|
|||||
Operating expenses
|
456,905
|
|
439,590
|
|
344,077
|
|
300,872
|
|
259,210
|
|
|||||
Operating income
|
317,720
|
|
265,948
|
|
266,042
|
|
302,052
|
|
372,667
|
|
|||||
Other income, net
(6)
|
213,571
|
|
18,934
|
|
5,085
|
|
58,274
|
|
12,145
|
|
|||||
Income before income taxes
|
531,291
|
|
284,882
|
|
271,127
|
|
360,326
|
|
384,812
|
|
|||||
Income tax expense
|
81,814
|
|
49,721
|
|
36,342
|
|
27,709
|
|
9,726
|
|
|||||
Net income
|
449,477
|
|
235,161
|
|
234,785
|
|
332,617
|
|
375,086
|
|
|||||
Net (income) loss attributable to non-controlling interest in S2S Global
(7)
|
—
|
|
—
|
|
(1,836
|
)
|
(949
|
)
|
1,479
|
|
|||||
Net income attributable to non-controlling interest in Premier LP
(8)
|
(336,052
|
)
|
(193,547
|
)
|
(194,206
|
)
|
(303,336
|
)
|
(369,189
|
)
|
|||||
Net income attributable to non-controlling interest
|
(336,052
|
)
|
(193,547
|
)
|
(196,042
|
)
|
(304,285
|
)
|
(367,710
|
)
|
|||||
Adjustment of redeemable limited partners' capital to redemption amount
|
(37,176
|
)
|
776,750
|
|
(904,035
|
)
|
(2,741,588
|
)
|
—
|
|
|||||
Net income (loss) attributable to stockholders
|
$
|
76,249
|
|
$
|
818,364
|
|
$
|
(865,292
|
)
|
$
|
(2,713,256
|
)
|
$
|
7,376
|
|
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||||||
Basic
|
49,654
|
|
42,368
|
|
35,681
|
|
25,633
|
|
5,858
|
|
|||||
Diluted
|
50,374
|
|
145,308
|
|
35,681
|
|
25,633
|
|
5,858
|
|
|||||
|
|
|
|
|
|
|
Year ended June 30,
|
||||||||||||||
Consolidated Statements of Income Data:
|
2017
(1)
|
2016
(2)
|
2015
(3)
|
2014
(4)
|
2013
|
||||||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|
||||||||||
Basic
|
$
|
1.54
|
|
$
|
19.32
|
|
$
|
(24.25
|
)
|
$
|
(105.85
|
)
|
$
|
1.26
|
|
Diluted
|
$
|
1.51
|
|
$
|
1.33
|
|
$
|
(24.25
|
)
|
$
|
(105.85
|
)
|
$
|
1.26
|
|
|
June 30,
|
||||||||||||||
Consolidated Balance Sheets Data:
|
2017
|
2016
|
2015
|
2014
|
2013
|
||||||||||
Cash, cash equivalents and marketable securities, current
|
$
|
156,735
|
|
$
|
266,576
|
|
$
|
387,189
|
|
$
|
291,606
|
|
$
|
255,619
|
|
Working capital (deficit)
(9)
|
$
|
(162,775
|
)
|
$
|
136,827
|
|
$
|
275,533
|
|
$
|
188,527
|
|
$
|
212,490
|
|
Property and equipment, net
|
$
|
187,365
|
|
$
|
174,080
|
|
$
|
147,625
|
|
$
|
134,551
|
|
$
|
115,587
|
|
Total assets
|
$
|
2,507,836
|
|
$
|
1,855,383
|
|
$
|
1,530,191
|
|
$
|
1,246,656
|
|
$
|
598,916
|
|
Deferred revenue
(10)
|
$
|
44,443
|
|
$
|
54,498
|
|
$
|
39,824
|
|
$
|
15,694
|
|
$
|
18,880
|
|
Total liabilities
|
$
|
1,031,506
|
|
$
|
669,614
|
|
$
|
568,461
|
|
$
|
472,293
|
|
$
|
213,513
|
|
Redeemable limited partners' capital
(11)
|
$
|
3,138,583
|
|
$
|
3,137,230
|
|
$
|
4,079,832
|
|
$
|
3,244,674
|
|
$
|
307,635
|
|
Class A common stock
|
$
|
519
|
|
$
|
460
|
|
$
|
377
|
|
$
|
324
|
|
$
|
57
|
|
Additional paid-in capital
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
28,866
|
|
Retained earnings (accumulated deficit)
|
$
|
(1,662,772
|
)
|
$
|
(1,951,878
|
)
|
$
|
(3,118,474
|
)
|
$
|
(2,469,873
|
)
|
$
|
50,599
|
|
Total stockholders' equity (deficit)
|
$
|
(1,662,253
|
)
|
$
|
(1,951,461
|
)
|
$
|
(3,118,102
|
)
|
$
|
(2,470,311
|
)
|
$
|
77,768
|
|
(1)
|
Amounts include the results of operations of Acro Pharmaceutical Services LLC and Community Pharmacy Services, LLC (collectively, "Acro Pharmaceuticals") from August 23, 2016, the date of acquisition of all of the membership interests of Acro Pharmaceuticals for
$75.0 million
, and the results of operations of Innovatix and Essensa from December 2, 2016, the date of acquisition of all the membership interests of Innovatix and Essensa for
$325.0 million
. Prior to December 2, 2016, we held 50% of the membership interests in Innovatix, and reported equity in net income of Innovatix within other income, net in the Consolidated Statements of Income. Both acquisitions were reported in our Supply Chain Services segment. See
Note 3 - Business Acquisitions
to the audited consolidated financial statements of this Annual Report for further information related to acquisitions completed during
the year ended June 30, 2017
.
|
(2)
|
Amounts include the results of operations of InFlowHealth, LLC ("InFlow"), CECity.com, Inc. ("CECity") and Healthcare Insights, LLC ("HCI"), from October 1, 2015, August 20, 2015 and July 31, 2015, respectively, the dates of acquisition of all the membership interests of InFlow for
$6.1 million
, all the outstanding shares of CECity for
$398.3 million
, and all the membership interests of HCI for
$64.3 million
, respectively. All acquisitions were reported in our Performance Services segment. See
Note 3 - Business Acquisitions
to the audited consolidated financial statements of this Annual Report for further information related to acquisitions completed during the year ended June 30, 2016.
|
(3)
|
Amounts include the results of operations of TheraDoc, Inc. ("TheraDoc") and Aperek, Inc. ("Aperek"), both in our Performance Services segment, from September 1, 2014 and August 29, 2014, respectively, the dates of acquisition of all the outstanding shares of common stock of TheraDoc for
$108.6 million
and Aperek for
$47.4 million
. Further, on February 2, 2015, we purchased the remaining
40%
of the outstanding limited liability company membership interests of S2S Global, our direct sourcing business, for approximately
$14.5 million
. See
Note 3 - Business Acquisitions
to the audited consolidated financial statements of this Annual Report for further information related to acquisitions completed during the year ended June 30, 2015.
|
(4)
|
Amounts include the results of operations of MEMdata, LLC ("MEMdata"), Meddius, L.L.C. ("Meddius") and SYMMEDRx, LLC ("SYMMEDRx"), all in our Performance Services segment, from April 7, 2014, October 31, 2013 and July 19, 2013, respectively, the dates of acquisition of all the outstanding shares of common stock of MEMdata for
$6.1 million
, Meddius for
$7.7 million
and SYMMEDRx for
$28.7 million
.
|
(5)
|
Following the completion of the IPO, we are contractually required under the GPO participation agreements to pay each member owner revenue share from Premier LP generally equal to
30%
of all gross administrative fees collected by Premier LP based upon purchasing by such member owner's owned, leased, managed and affiliated facilities through our GPO supplier contracts. Prior to the IPO, we did not generally have a contractual requirement to pay revenue share to member owners
|
(6)
|
Other income, net, consists primarily of a one-time gain of
$205.1 million
related to the remeasurement of our historical 50% equity method investment in Innovatix to fair value upon acquisition of Innovatix and Essensa on December 2, 2016 which occurred during the year ended June 30, 2017. In addition, other income, net includes equity in net income of unconsolidated affiliates that is generated from our equity method investments. Our equity method investments primarily consist of our 49% ownership in FFF Enterprises, Inc. ("FFF"), and prior to the acquisition of Innovatix and Essensa, included our 50% ownership interest in Innovatix. Other income, net, also includes interest income and expense, realized and unrealized gains or losses on deferred compensation plan assets, gains or losses on the disposal of assets, and realized gains and losses on our marketable securities.
|
(7)
|
Premier Supply Chain Improvement, Inc. ("PSCI") owns a
100%
voting and economic interest in S2S Global as a result of its February 2, 2015 purchase of the remaining 40% non-controlling interest in S2S Global. Prior to February 2, 2015, PSCI owned a
60%
voting and economic interest in S2S Global. Net (income) loss attributable to non-controlling interest in S2S Global represents the portion of net (income) loss attributable to the non-controlling equity holders of S2S Global prior to the February 2, 2015 purchase.
|
(8)
|
PHSI, through Premier Plans, LLC, owned a
1%
controlling general partnership interest in Premier LP prior to the IPO. Net income attributable to non-controlling interest in Premier LP represents the portion of net income attributable to the limited partners of Premier LP, which was
99%
prior to the IPO and
63%
at
June 30, 2017
, and may change each period as member ownership changes.
|
(9)
|
Working capital represents the excess (deficit) of total current assets less total current liabilities. At June 30, 2017, working capital includes the
$228.0 million
current portion of long-term debt which is recorded within current liabilities.
|
(10)
|
Deferred revenue is primarily related to deferred subscription fees and deferred advisory fees in our Performance Services segment and consists of unrecognized revenue related to advanced member invoicing or member payments received prior to fulfillment of our revenue recognition criteria.
|
(11)
|
Redeemable limited partners' capital represents the member owners' ownership of Premier LP through their ownership of Class B common units. Pursuant to the terms of its limited partnership agreement in effect prior to the IPO, Premier LP was required to repurchase a limited partner's interest in Premier LP upon the sale of such limited partner's shares of PHSI common stock, such limited partner's withdrawal from Premier LP, or such limited partner's failure to comply with the applicable purchase commitments under the historical limited partnership agreement of Premier LP. Redeemable limited partners' capital is classified as temporary equity in the mezzanine section of the accompanying Consolidated Balance Sheets as the withdrawal is at the option of each limited partner and the conditions of the repurchase are not solely within the Company's control. The Company records redeemable limited partners' capital at the greater of the book value or redemption amount per the LP Agreement at the reporting date, with the corresponding offset to additional paid-in-capital and retained earnings (accumulated deficit).
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net revenue
|
$
|
1,454,673
|
|
$
|
1,162,594
|
|
$
|
1,007,029
|
|
Net income
|
$
|
449,477
|
|
$
|
235,161
|
|
$
|
234,785
|
|
Non-GAAP Adjusted EBTIDA
|
$
|
501,591
|
|
$
|
440,975
|
|
$
|
393,175
|
|
|
Year Ended June 30,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|||||||||
Net administrative fees
|
$
|
557,468
|
|
38
|
%
|
|
$
|
498,394
|
|
43
|
%
|
|
$
|
457,020
|
|
45
|
%
|
Other services and support
|
363,087
|
|
25
|
%
|
|
337,554
|
|
29
|
%
|
|
270,748
|
|
27
|
%
|
|||
Services
|
920,555
|
|
63
|
%
|
|
835,948
|
|
72
|
%
|
|
727,768
|
|
72
|
%
|
|||
Products
|
534,118
|
|
37
|
%
|
|
326,646
|
|
28
|
%
|
|
279,261
|
|
28
|
%
|
|||
Net revenue
|
1,454,673
|
|
100
|
%
|
|
1,162,594
|
|
100
|
%
|
|
1,007,029
|
|
100
|
%
|
|||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|||||||||
Services
|
182,775
|
|
13
|
%
|
|
163,240
|
|
14
|
%
|
|
143,290
|
|
14
|
%
|
|||
Products
|
497,273
|
|
34
|
%
|
|
293,816
|
|
25
|
%
|
|
253,620
|
|
25
|
%
|
|||
Cost of revenue
|
680,048
|
|
47
|
%
|
|
457,056
|
|
39
|
%
|
|
396,910
|
|
39
|
%
|
|||
Gross profit
|
774,625
|
|
53
|
%
|
|
705,538
|
|
61
|
%
|
|
610,119
|
|
61
|
%
|
|||
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||||
Selling, general and administrative
|
405,471
|
|
28
|
%
|
|
403,611
|
|
35
|
%
|
|
332,004
|
|
33
|
%
|
|||
Research and development
|
3,107
|
|
—
|
%
|
|
2,925
|
|
—
|
%
|
|
2,937
|
|
—
|
%
|
|||
Amortization of purchased intangible assets
|
48,327
|
|
3
|
%
|
|
33,054
|
|
3
|
%
|
|
9,136
|
|
1
|
%
|
|||
Operating expenses
|
456,905
|
|
31
|
%
|
|
439,590
|
|
38
|
%
|
|
344,077
|
|
34
|
%
|
|||
Operating income
|
317,720
|
|
22
|
%
|
|
265,948
|
|
23
|
%
|
|
266,042
|
|
26
|
%
|
|||
Other income, net
|
213,571
|
|
15
|
%
|
|
18,934
|
|
1
|
%
|
|
5,085
|
|
1
|
%
|
|||
Income before income taxes
|
531,291
|
|
37
|
%
|
|
284,882
|
|
24
|
%
|
|
271,127
|
|
27
|
%
|
|||
Income tax expense
|
81,814
|
|
6
|
%
|
|
49,721
|
|
4
|
%
|
|
36,342
|
|
4
|
%
|
|||
Net income
|
449,477
|
|
31
|
%
|
|
235,161
|
|
20
|
%
|
|
234,785
|
|
23
|
%
|
|||
Net income attributable to non-controlling interest in S2S Global
|
—
|
|
—
|
%
|
|
—
|
|
—
|
%
|
|
(1,836
|
)
|
—
|
%
|
|||
Net income attributable to non-controlling interest in Premier LP
|
(336,052
|
)
|
(23
|
)%
|
|
(193,547
|
)
|
(17
|
)%
|
|
(194,206
|
)
|
(19
|
)%
|
|||
Net income attributable to non-controlling interest
|
(336,052
|
)
|
(23
|
)%
|
|
(193,547
|
)
|
(17
|
)%
|
|
(196,042
|
)
|
(19
|
)%
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
(37,176
|
)
|
nm
|
|
|
776,750
|
|
nm
|
|
|
(904,035
|
)
|
nm
|
|
|||
Net income (loss) attributable to stockholders
|
$
|
76,249
|
|
nm
|
|
|
$
|
818,364
|
|
nm
|
|
|
$
|
(865,292
|
)
|
nm
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
49,654
|
|
nm
|
|
|
42,368
|
|
nm
|
|
|
35,681
|
|
nm
|
|
|||
Diluted
|
50,374
|
|
nm
|
|
|
145,308
|
|
nm
|
|
|
35,681
|
|
nm
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|
|
|||||||||||
Basic
|
$
|
1.54
|
|
nm
|
|
|
$
|
19.32
|
|
nm
|
|
|
$
|
(24.25
|
)
|
nm
|
|
Diluted
|
$
|
1.51
|
|
nm
|
|
|
$
|
1.33
|
|
nm
|
|
|
$
|
(24.25
|
)
|
nm
|
|
|
Year Ended June 30,
|
||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||||||||
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|||||||||
Certain Non-GAAP Financial Data:
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA
|
$
|
501,591
|
|
34
|
%
|
|
440,975
|
|
38
|
%
|
|
393,175
|
|
39
|
%
|
||
Adjusted Fully Distributed Net Income
|
$
|
267,299
|
|
18
|
%
|
|
233,259
|
|
20
|
%
|
|
208,169
|
|
21
|
%
|
||
Adjusted Fully Distributed Earnings Per Share
|
$
|
1.89
|
|
nm
|
|
|
$
|
1.61
|
|
nm
|
|
|
$
|
1.43
|
|
nm
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net income
|
$
|
449,477
|
|
$
|
235,161
|
|
$
|
234,785
|
|
Interest and investment loss (income), net
|
4,512
|
|
1,021
|
|
(866
|
)
|
|||
Income tax expense
|
81,814
|
|
49,721
|
|
36,342
|
|
|||
Depreciation and amortization
|
58,884
|
|
51,102
|
|
45,186
|
|
|||
Amortization of purchased intangible assets
|
48,327
|
|
33,054
|
|
9,136
|
|
|||
EBITDA
|
643,014
|
|
370,059
|
|
324,583
|
|
|||
Stock-based compensation
|
26,860
|
|
49,081
|
|
28,498
|
|
|||
Acquisition related expenses
|
15,790
|
|
15,804
|
|
9,037
|
|
|||
Strategic and financial restructuring expenses
|
31
|
|
268
|
|
1,373
|
|
|||
Adjustment to tax receivable agreement liabilities
|
(5,447
|
)
|
(4,818
|
)
|
—
|
|
|||
ERP implementation expenses
|
2,028
|
|
4,870
|
|
—
|
|
|||
Acquisition related adjustment - revenue
|
18,049
|
|
5,624
|
|
13,371
|
|
|||
Remeasurement gain attributable to acquisition of Innovatix
|
(205,146
|
)
|
—
|
|
—
|
|
|||
Loss on disposal of long-lived assets
|
2,422
|
|
—
|
|
15,243
|
|
|||
Loss on FFF Enterprises, Inc. put and call rights
|
3,935
|
|
—
|
|
—
|
|
|||
Other expense, net
|
55
|
|
87
|
|
1,070
|
|
|||
Adjusted EBITDA
|
$
|
501,591
|
|
$
|
440,975
|
|
$
|
393,175
|
|
|
|
|
|
||||||
Income before income taxes
|
$
|
531,291
|
|
$
|
284,882
|
|
$
|
271,127
|
|
Remeasurement gain attributable to acquisition of Innovatix
|
(205,146
|
)
|
—
|
|
—
|
|
|||
Equity in net income of unconsolidated affiliates
|
(14,745
|
)
|
(21,647
|
)
|
(21,285
|
)
|
|||
Interest and investment loss (income), net
|
4,512
|
|
1,021
|
|
(866
|
)
|
|||
Loss on disposal of long-lived assets
|
2,422
|
|
—
|
|
15,243
|
|
|||
Other expense (income), net
|
(614
|
)
|
1,692
|
|
1,823
|
|
|||
Operating income
|
317,720
|
|
265,948
|
|
266,042
|
|
|||
Depreciation and amortization
|
58,884
|
|
51,102
|
|
45,186
|
|
|||
Amortization of purchased intangible assets
|
48,327
|
|
33,054
|
|
9,136
|
|
|||
Stock-based compensation
|
26,860
|
|
49,081
|
|
28,498
|
|
|||
Acquisition related expenses
|
15,790
|
|
15,804
|
|
9,037
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Strategic and financial restructuring expenses
|
31
|
|
268
|
|
1,373
|
|
|||
Adjustment to tax receivable agreement liabilities
|
(5,447
|
)
|
(4,818
|
)
|
—
|
|
|||
ERP implementation expenses
|
2,028
|
|
4,870
|
|
—
|
|
|||
Acquisition related adjustment - revenue
|
18,049
|
|
5,624
|
|
13,371
|
|
|||
Equity in net income of unconsolidated affiliates
|
14,745
|
|
21,647
|
|
21,285
|
|
|||
Deferred compensation plan income (expense)
|
4,020
|
|
(1,605
|
)
|
(753
|
)
|
|||
Other income
|
584
|
|
—
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
501,591
|
|
$
|
440,975
|
|
$
|
393,175
|
|
|
|
|
|
||||||
Segment Adjusted EBITDA:
|
|
|
|
||||||
Supply Chain Services
|
$
|
493,763
|
|
$
|
439,013
|
|
$
|
391,180
|
|
Performance Services
|
121,090
|
|
110,787
|
|
90,235
|
|
|||
Corporate
|
(113,262
|
)
|
(108,825
|
)
|
(88,240
|
)
|
|||
Adjusted EBITDA
|
$
|
501,591
|
|
$
|
440,975
|
|
$
|
393,175
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net income (loss) attributable to stockholders
|
$
|
76,249
|
|
$
|
818,364
|
|
$
|
(865,292
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
37,176
|
|
(776,750
|
)
|
904,035
|
|
|||
Net income attributable to non-controlling interest in Premier LP
|
336,052
|
|
193,547
|
|
194,206
|
|
|||
Income tax expense
|
81,814
|
|
49,721
|
|
36,342
|
|
|||
Amortization of purchased intangible assets
|
48,327
|
|
33,054
|
|
9,136
|
|
|||
Stock-based compensation
|
26,860
|
|
49,081
|
|
28,498
|
|
|||
Acquisition related expenses
|
15,790
|
|
15,804
|
|
9,037
|
|
|||
Strategic and financial restructuring expenses
|
31
|
|
268
|
|
1,373
|
|
|||
Adjustment to tax receivable agreement liabilities
|
(5,447
|
)
|
(4,818
|
)
|
—
|
|
|||
ERP implementation expenses
|
2,028
|
|
4,870
|
|
—
|
|
|||
Acquisition related adjustment - revenue
|
18,049
|
|
5,624
|
|
13,371
|
|
|||
Remeasurement gain attributable to acquisition of Innovatix
|
(205,146
|
)
|
—
|
|
—
|
|
|||
Loss on disposal of long-lived assets
|
2,422
|
|
—
|
|
15,243
|
|
|||
Loss on FFF Enterprises, Inc. put and call rights
|
3,935
|
|
—
|
|
—
|
|
|||
Other expense, net
|
55
|
|
—
|
|
1,000
|
|
|||
Non-GAAP adjusted fully distributed income before income taxes
|
438,195
|
|
388,765
|
|
346,949
|
|
|||
Income tax expense on fully distributed income before income taxes
(a)
|
170,896
|
|
155,506
|
|
138,780
|
|
|||
Non-GAAP Adjusted Fully Distributed Net Income
|
$
|
267,299
|
|
$
|
233,259
|
|
$
|
208,169
|
|
|
|
|
|
||||||
Reconciliation of denominator for earnings (loss) per share attributable to stockholders to Non-GAAP Adjusted Fully Distributed Earnings per Share
|
|||||||||
Weighted average:
|
|
|
|
||||||
Common shares used for basic and diluted earnings (loss) per share
|
49,654
|
|
42,368
|
|
35,681
|
|
|||
Potentially dilutive shares
|
720
|
|
2,366
|
|
1,048
|
|
|||
Conversion of Class B common units
|
90,816
|
|
100,574
|
|
108,518
|
|
|||
Weighted average fully distributed shares outstanding - diluted
|
141,190
|
|
145,308
|
|
145,247
|
|
(a)
|
Reflects income tax expense at an estimated effective income tax rate of
39%
of Non-GAAP adjusted fully distributed income before income taxes for
the year ended June 30, 2017
and
40%
of Non-GAAP adjusted fully distributed income before income taxes for
the years ended June 30, 2016 and 2015
. The decrease in the estimated effective income tax rate during the year ended June 30, 2017 is primarily attributed to a 1% decrease in the North Carolina state income tax rate that occurred during the three months ended September 30, 2016.
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Earnings (loss) per share attributable to stockholders
|
$
|
1.54
|
|
$
|
19.32
|
|
$
|
(24.25
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
0.75
|
|
(18.33
|
)
|
25.34
|
|
|||
Net income attributable to non-controlling interest in Premier LP
|
6.77
|
|
4.57
|
|
5.44
|
|
|||
Income tax expense
|
1.65
|
|
1.17
|
|
1.02
|
|
|||
Amortization of purchased intangible assets
|
0.97
|
|
0.78
|
|
0.26
|
|
|||
Stock-based compensation
|
0.54
|
|
1.16
|
|
0.80
|
|
|||
Acquisition related expenses
|
0.32
|
|
0.37
|
|
0.25
|
|
|||
Strategic and financial restructuring expenses
|
—
|
|
0.01
|
|
0.04
|
|
|||
Adjustment to tax receivable agreement liabilities
|
(0.11
|
)
|
(0.11
|
)
|
—
|
|
|||
ERP implementation expenses
|
0.04
|
|
0.11
|
|
—
|
|
|||
Acquisition related adjustment - revenue
|
0.36
|
|
0.13
|
|
0.37
|
|
|||
Remeasurement gain attributable to acquisition of Innovatix
|
(4.13
|
)
|
—
|
|
—
|
|
|||
Loss on disposal of long-lived assets
|
0.05
|
|
—
|
|
0.43
|
|
|||
Loss on FFF Enterprises, Inc. put and call rights
|
0.08
|
|
—
|
|
—
|
|
|||
Impact of corporation taxes
(a)
|
(3.45
|
)
|
(3.67
|
)
|
(3.90
|
)
|
|||
Impact of dilutive shares
(b)
|
(3.49
|
)
|
(3.90
|
)
|
(4.40
|
)
|
|||
Non-GAAP Adjusted Fully Distributed Earnings Per Share
|
$
|
1.89
|
|
$
|
1.61
|
|
$
|
1.43
|
|
(a)
|
Reflects income tax expense at an estimated effective income tax rate of
39%
of Non-GAAP adjusted fully distributed income before income taxes for
the year ended June 30, 2017
and
40%
of Non-GAAP adjusted fully distributed income before income taxes for
the years ended June 30, 2016 and 2015
. The decrease in the estimated effective income tax rate during the year ended June 30, 2017 is primarily attributed to a decrease in the North Carolina state income tax rate that occurred during the year ended June 30, 2017.
|
(b)
|
Reflects impact of dilutive shares, which are primarily attributable to the assumed conversion of all Class B common units into shares of Class A common stock.
|
|
Year Ended June 30,
|
||||||||
Supply Chain Services
|
2017
|
2016
|
2015
|
||||||
Net revenue:
|
|
|
|
||||||
Net administrative fees
|
$
|
557,468
|
|
$
|
498,394
|
|
$
|
457,020
|
|
Other services and support
|
9,704
|
|
4,385
|
|
1,977
|
|
|||
Services
|
567,172
|
|
502,779
|
|
458,997
|
|
|||
Products
|
534,118
|
|
326,646
|
|
279,261
|
|
|||
Net revenue
|
1,101,290
|
|
829,425
|
|
738,258
|
|
|||
Cost of revenue:
|
|
|
|
||||||
Services
|
5,432
|
|
3,123
|
|
2,174
|
|
|||
Products
|
497,269
|
|
293,816
|
|
253,620
|
|
|||
Cost of revenue
|
502,701
|
|
296,939
|
|
255,794
|
|
|||
Gross profit
|
598,589
|
|
532,486
|
|
482,464
|
|
|||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
155,860
|
|
120,344
|
|
115,196
|
|
|||
Amortization of purchased intangible assets
|
12,472
|
|
348
|
|
1,044
|
|
|||
Operating expenses
|
168,332
|
|
120,692
|
|
116,240
|
|
|||
Operating income
|
$
|
430,257
|
|
$
|
411,794
|
|
$
|
366,224
|
|
Depreciation and amortization
|
1,737
|
|
1,053
|
|
920
|
|
|||
Amortization of purchased intangible assets
|
12,472
|
|
348
|
|
1,044
|
|
|||
Acquisition related expenses
|
17,192
|
|
4,466
|
|
1,707
|
|
|||
Acquisition related adjustment - revenue
|
17,440
|
|
—
|
|
—
|
|
|||
Equity in net income of unconsolidated affiliates
|
14,684
|
|
21,352
|
|
21,285
|
|
|||
Other income
|
(19
|
)
|
—
|
|
—
|
|
|||
Non-GAAP Segment Adjusted EBITDA
|
$
|
493,763
|
|
$
|
439,013
|
|
$
|
391,180
|
|
|
Year Ended June 30,
|
||||||||
Performance Services
|
2017
|
2016
|
2015
|
||||||
Net revenue:
|
|
|
|
||||||
Other services and support
|
$
|
353,383
|
|
$
|
333,169
|
|
$
|
268,771
|
|
Net revenue
|
353,383
|
|
333,169
|
|
268,771
|
|
|||
Cost of revenue:
|
|
|
|
||||||
Services
|
177,323
|
|
160,117
|
|
141,116
|
|
|||
Cost of revenue
|
177,323
|
|
160,117
|
|
141,116
|
|
|||
Gross profit
|
176,060
|
|
173,052
|
|
127,655
|
|
|||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
101,405
|
|
120,958
|
|
95,365
|
|
|||
Research and development
|
2,278
|
|
2,064
|
|
1,795
|
|
|||
Amortization of purchased intangible assets
|
35,855
|
|
32,706
|
|
8,092
|
|
|||
Operating expenses
|
139,538
|
|
155,728
|
|
105,252
|
|
|||
Operating income
|
$
|
36,522
|
|
$
|
17,324
|
|
$
|
22,403
|
|
Depreciation and amortization
|
49,444
|
|
43,793
|
|
39,038
|
|
|||
Amortization of purchased intangible assets
|
35,855
|
|
32,706
|
|
8,092
|
|
|||
Acquisition related expenses
|
(1,401
|
)
|
11,340
|
|
7,330
|
|
|||
Acquisition related adjustment - revenue
|
609
|
|
5,624
|
|
13,372
|
|
|||
Equity in net income of unconsolidated affiliates
|
61
|
|
—
|
|
—
|
|
|||
Non-GAAP Segment Adjusted EBITDA
|
$
|
121,090
|
|
$
|
110,787
|
|
$
|
90,235
|
|
|
Year Ended June 30,
|
||||||||
Corporate
|
2017
|
2016
|
2015
|
||||||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
$
|
148,230
|
|
$
|
162,309
|
|
$
|
121,443
|
|
Research and development
|
829
|
|
861
|
|
1,142
|
|
|||
Operating loss
|
$
|
(149,059
|
)
|
$
|
(163,170
|
)
|
$
|
(122,585
|
)
|
Depreciation and amortization
|
7,703
|
|
6,256
|
|
5,227
|
|
|||
Stock-based compensation
|
26,860
|
|
49,082
|
|
28,498
|
|
|||
Strategic and financial restructuring expenses
|
31
|
|
268
|
|
1,373
|
|
|||
Adjustment to tax receivable agreement liabilities
|
(5,447
|
)
|
(4,818
|
)
|
—
|
|
|||
ERP implementation expenses
|
2,028
|
|
4,869
|
|
—
|
|
|||
Deferred compensation plan income (expense)
|
4,020
|
|
(1,606
|
)
|
(753
|
)
|
|||
Equity in net income of unconsolidated affiliates
|
—
|
|
294
|
|
—
|
|
|||
Other income
|
602
|
|
—
|
|
—
|
|
|||
Non-GAAP Corporate Adjusted EBITDA
|
$
|
(113,262
|
)
|
$
|
(108,825
|
)
|
$
|
(88,240
|
)
|
|
Year Ended June 30,
|
|||||
|
2017
|
2016
|
||||
Net cash provided by (used in):
|
|
|
||||
Operating activities
|
$
|
392,247
|
|
$
|
371,470
|
|
Investing activities
|
(465,053
|
)
|
(159,636
|
)
|
||
Financing activities
|
(19,276
|
)
|
(109,539
|
)
|
||
Net increase (decrease) in cash
|
$
|
(92,082
|
)
|
$
|
102,295
|
|
|
Year Ended June 30,
|
|||||
|
2017
|
2016
|
||||
Net cash provided by operating activities
|
$
|
392,247
|
|
$
|
371,470
|
|
Purchases of property and equipment
|
(71,372
|
)
|
(76,990
|
)
|
||
Distributions to limited partners of Premier LP
|
(90,434
|
)
|
(92,707
|
)
|
||
Payments to limited partners of Premier LP related to tax receivable agreements
|
(13,959
|
)
|
(10,805
|
)
|
||
Non-GAAP Free Cash Flow
|
$
|
216,482
|
|
$
|
190,968
|
|
|
|
Payments Due by Period
|
|||||||||||||
Contractual Obligations
|
Total
|
Less Than 1 Year
|
1-3 Years
|
3-5 Years
|
Greater Than 5 Years
|
||||||||||
Tax receivable agreement liabilities
(a)
|
$
|
339,721
|
|
$
|
17,925
|
|
$
|
39,859
|
|
$
|
41,870
|
|
$
|
240,067
|
|
Operating lease obligations
(b)
|
94,768
|
|
11,607
|
|
22,442
|
|
20,749
|
|
39,970
|
|
|||||
Notes payable
(c)
|
14,272
|
|
7,993
|
|
2,680
|
|
3,599
|
|
—
|
|
|||||
Other obligations
|
257
|
|
257
|
|
—
|
|
—
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
449,018
|
|
$
|
37,782
|
|
$
|
64,981
|
|
$
|
66,218
|
|
$
|
280,037
|
|
(a)
|
Estimated payments due to limited partners under TRAs are based on 85% of the estimated amount of tax savings we expect to receive, generally over a 15-year period.
|
(b)
|
Future contractual obligations for leases represent future minimum payments under noncancelable operating leases primarily for office space.
|
(c)
|
Notes payable are generally non-interest bearings and represent an aggregate principal amount of
$14.3 million
owed to departed member owners, payable over five years from the respective departure dates.
|
|
June 30, 2017
|
June 30, 2016
|
||||
Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
156,735
|
|
$
|
248,817
|
|
Marketable securities
|
—
|
|
17,759
|
|
||
Accounts receivable (net of $1,812 and $1,981 allowance for doubtful accounts, respectively)
|
159,745
|
|
144,424
|
|
||
Inventory
|
50,426
|
|
29,121
|
|
||
Prepaid expenses and other current assets
|
35,164
|
|
19,646
|
|
||
Due from related parties
|
6,742
|
|
3,123
|
|
||
Total current assets
|
408,812
|
|
462,890
|
|
||
Marketable securities
|
—
|
|
30,130
|
|
||
Property and equipment (net of $236,460 and $265,751 accumulated depreciation, respectively)
|
187,365
|
|
174,080
|
|
||
Intangible assets (net of $99,198 and $50,870 accumulated amortization, respectively)
|
377,962
|
|
158,217
|
|
||
Goodwill
|
906,545
|
|
537,962
|
|
||
Deferred income tax assets
|
482,484
|
|
422,849
|
|
||
Deferred compensation plan assets
|
41,518
|
|
39,965
|
|
||
Investments in unconsolidated affiliates
|
92,879
|
|
16,800
|
|
||
Other assets
|
10,271
|
|
12,490
|
|
||
Total assets
|
$
|
2,507,836
|
|
$
|
1,855,383
|
|
|
|
|
||||
Liabilities, redeemable limited partners' capital and stockholders' deficit
|
|
|
||||
Accounts payable
|
$
|
42,815
|
|
$
|
46,003
|
|
Accrued expenses
|
55,857
|
|
56,774
|
|
||
Revenue share obligations
|
72,078
|
|
63,603
|
|
||
Limited partners' distribution payable
|
24,951
|
|
22,493
|
|
||
Accrued compensation and benefits
|
53,506
|
|
60,425
|
|
||
Deferred revenue
|
44,443
|
|
54,498
|
|
||
Current portion of tax receivable agreements
|
17,925
|
|
13,912
|
|
||
Current portion of long-term debt
|
227,993
|
|
5,484
|
|
||
Other liabilities
|
32,019
|
|
2,871
|
|
||
Total current liabilities
|
571,587
|
|
326,063
|
|
||
Long-term debt, less current portion
|
6,279
|
|
13,858
|
|
||
Tax receivable agreements, less current portion
|
321,796
|
|
265,750
|
|
||
Deferred compensation plan obligations
|
41,518
|
|
39,965
|
|
||
Deferred tax liabilities
|
48,227
|
|
—
|
|
||
Other liabilities
|
42,099
|
|
23,978
|
|
||
Total liabilities
|
1,031,506
|
|
669,614
|
|
||
|
|
|
|
|
|
June 30, 2017
|
June 30, 2016
|
||||
Redeemable limited partners' capital
|
3,138,583
|
|
3,137,230
|
|
||
Stockholders' deficit:
|
|
|
||||
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 51,943,281 and 45,995,528 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively
|
519
|
|
460
|
|
||
Class B common stock, $0.000001 par value, 600,000,000 shares authorized; 87,298,888 and 96,132,723 shares issued and outstanding at June 30, 2017 and June 30, 2016, respectively
|
—
|
|
—
|
|
||
Additional paid-in-capital
|
—
|
|
—
|
|
||
Accumulated deficit
|
(1,662,772
|
)
|
(1,951,878
|
)
|
||
Accumulated other comprehensive loss
|
—
|
|
(43
|
)
|
||
Total stockholders' deficit
|
(1,662,253
|
)
|
(1,951,461
|
)
|
||
Total liabilities, redeemable limited partners' capital and stockholders' deficit
|
$
|
2,507,836
|
|
$
|
1,855,383
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net revenue:
|
|
|
|
||||||
Net administrative fees
|
$
|
557,468
|
|
$
|
498,394
|
|
$
|
457,020
|
|
Other services and support
|
363,087
|
|
337,554
|
|
270,748
|
|
|||
Services
|
920,555
|
|
835,948
|
|
727,768
|
|
|||
Products
|
534,118
|
|
326,646
|
|
279,261
|
|
|||
Net revenue
|
1,454,673
|
|
1,162,594
|
|
1,007,029
|
|
|||
Cost of revenue:
|
|
|
|
||||||
Services
|
182,775
|
|
163,240
|
|
143,290
|
|
|||
Products
|
497,273
|
|
293,816
|
|
253,620
|
|
|||
Cost of revenue
|
680,048
|
|
457,056
|
|
396,910
|
|
|||
Gross profit
|
774,625
|
|
705,538
|
|
610,119
|
|
|||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
405,471
|
|
403,611
|
|
332,004
|
|
|||
Research and development
|
3,107
|
|
2,925
|
|
2,937
|
|
|||
Amortization of purchased intangible assets
|
48,327
|
|
33,054
|
|
9,136
|
|
|||
Operating expenses
|
456,905
|
|
439,590
|
|
344,077
|
|
|||
Operating income
|
317,720
|
|
265,948
|
|
266,042
|
|
|||
Remeasurement gain attributable to acquisition of Innovatix
|
205,146
|
|
—
|
|
—
|
|
|||
Equity in net income of unconsolidated affiliates
|
14,745
|
|
21,647
|
|
21,285
|
|
|||
Interest and investment income (loss), net
|
(4,512
|
)
|
(1,021
|
)
|
866
|
|
|||
Loss on disposal of long-lived assets
|
(2,422
|
)
|
—
|
|
(15,243
|
)
|
|||
Other income (expense), net
|
614
|
|
(1,692
|
)
|
(1,823
|
)
|
|||
Other income, net
|
213,571
|
|
18,934
|
|
5,085
|
|
|||
Income before income taxes
|
531,291
|
|
284,882
|
|
271,127
|
|
|||
Income tax expense
|
81,814
|
|
49,721
|
|
36,342
|
|
|||
Net income
|
449,477
|
|
235,161
|
|
234,785
|
|
|||
Net income attributable to non-controlling interest in S2S Global
|
—
|
|
—
|
|
(1,836
|
)
|
|||
Net income attributable to non-controlling interest in Premier LP
|
(336,052
|
)
|
(193,547
|
)
|
(194,206
|
)
|
|||
Net income attributable to non-controlling interest
|
(336,052
|
)
|
(193,547
|
)
|
(196,042
|
)
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
(37,176
|
)
|
776,750
|
|
(904,035
|
)
|
|||
Net income (loss) attributable to stockholders
|
$
|
76,249
|
|
$
|
818,364
|
|
$
|
(865,292
|
)
|
|
|
|
|
||||||
Weighted average shares outstanding:
|
|
|
|
||||||
Basic
|
49,654
|
|
42,368
|
|
35,681
|
|
|||
Diluted
|
50,374
|
|
145,308
|
|
35,681
|
|
|||
|
|
|
|
||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
||||||
Basic
|
$
|
1.54
|
|
$
|
19.32
|
|
$
|
(24.25
|
)
|
Diluted
|
$
|
1.51
|
|
$
|
1.33
|
|
$
|
(24.25
|
)
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net income
|
$
|
449,477
|
|
$
|
235,161
|
|
$
|
234,785
|
|
Net unrealized gain (loss) on marketable securities
|
128
|
|
(110
|
)
|
(213
|
)
|
|||
Total comprehensive income
|
449,605
|
|
235,051
|
|
234,572
|
|
|||
Less: comprehensive income attributable to non-controlling interest
|
(336,137
|
)
|
(193,470
|
)
|
(195,885
|
)
|
|||
Comprehensive income attributable to stockholders
|
$
|
113,468
|
|
$
|
41,581
|
|
$
|
38,687
|
|
|
Class A
Common Stock
|
Class B
Common Stock
|
Additional Paid-In Capital
|
Accumulated Deficit
|
Non-Controlling Interest
|
Accumulated Other Comprehensive Income (Loss)
|
Total Stockholders' Deficit
|
||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||
Balance at June 30, 2014
|
32,375
|
|
$
|
324
|
|
112,511
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(2,469,873
|
)
|
$
|
(805
|
)
|
$
|
43
|
|
$
|
(2,470,311
|
)
|
Redemption of limited partners
|
—
|
|
—
|
|
(910
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Reduction in tax receivable agreement liabilities related to departed member owners
|
—
|
|
—
|
|
—
|
|
—
|
|
1,905
|
|
—
|
|
—
|
|
—
|
|
1,905
|
|
|||||||
Exchange of Class B common units for Class A common stock by member owners
|
5,218
|
|
53
|
|
(5,218
|
)
|
—
|
|
175,062
|
|
—
|
|
—
|
|
—
|
|
175,115
|
|
|||||||
Increase in additional paid-in capital related to quarterly exchange by member owners and departure of member owners
|
—
|
|
—
|
|
—
|
|
—
|
|
18,097
|
|
—
|
|
—
|
|
—
|
|
18,097
|
|
|||||||
Issuance of Class A common stock under equity incentive plan
|
76
|
|
—
|
|
—
|
|
—
|
|
1,508
|
|
—
|
|
—
|
|
—
|
|
1,508
|
|
|||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
28,498
|
|
—
|
|
—
|
|
—
|
|
28,498
|
|
|||||||
Repurchase of vested restricted units for employee tax-withholding
|
—
|
|
—
|
|
—
|
|
—
|
|
(135
|
)
|
—
|
|
—
|
|
—
|
|
(135
|
)
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
234,785
|
|
—
|
|
—
|
|
234,785
|
|
|||||||
Net income attributable to non-controlling interest
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(196,042
|
)
|
—
|
|
—
|
|
(196,042
|
)
|
|||||||
Net income attributable to non-controlling interest in S2S Global
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1,836
|
|
—
|
|
1,836
|
|
|||||||
Purchase of non-controlling interest in S2S Global
|
—
|
|
—
|
|
—
|
|
—
|
|
(13,487
|
)
|
—
|
|
(1,031
|
)
|
—
|
|
(14,518
|
)
|
|||||||
Increase in deferred tax asset related to purchase of non-controlling interest in S2S Global
|
—
|
|
—
|
|
—
|
|
—
|
|
5,243
|
|
—
|
|
—
|
|
—
|
|
5,243
|
|
|||||||
Net unrealized loss on marketable securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(48
|
)
|
(48
|
)
|
|||||||
Adjustment to redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
—
|
|
—
|
|
(216,691
|
)
|
(687,344
|
)
|
—
|
|
—
|
|
(904,035
|
)
|
|||||||
Balance at June 30, 2015
|
37,669
|
|
$
|
377
|
|
106,383
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(3,118,474
|
)
|
$
|
—
|
|
$
|
(5
|
)
|
$
|
(3,118,102
|
)
|
Redemption of limited partners
|
—
|
|
—
|
|
(2,527
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Exchange of Class B common units for Class A common stock by member owners
|
7,723
|
|
77
|
|
(7,723
|
)
|
—
|
|
267,604
|
|
—
|
|
—
|
|
—
|
|
267,681
|
|
|||||||
Increase in additional paid-in capital related to quarterly exchange by member owners and departure of member owners
|
—
|
|
—
|
|
—
|
|
—
|
|
35,431
|
|
—
|
|
—
|
|
—
|
|
35,431
|
|
|||||||
Issuance of Class A common stock under equity incentive plan
|
523
|
|
5
|
|
—
|
|
—
|
|
3,552
|
|
—
|
|
—
|
|
—
|
|
3,557
|
|
|
Class A
Common Stock
|
Class B
Common Stock
|
Additional Paid-In Capital
|
Accumulated Deficit
|
Non-Controlling Interest
|
Accumulated Other Comprehensive Income (Loss)
|
Total Stockholders' Deficit
|
||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||
Issuance of Class A common stock under employee stock purchase plan
|
81
|
|
1
|
|
—
|
|
—
|
|
2,728
|
|
—
|
|
—
|
|
—
|
|
2,729
|
|
|||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
48,670
|
|
—
|
|
—
|
|
—
|
|
48,670
|
|
|||||||
Repurchase of vested restricted units for employee tax-withholding
|
—
|
|
—
|
|
—
|
|
—
|
|
(7,863
|
)
|
—
|
|
—
|
|
—
|
|
(7,863
|
)
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
235,161
|
|
—
|
|
—
|
|
235,161
|
|
|||||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(193,547
|
)
|
—
|
|
—
|
|
(193,547
|
)
|
|||||||
Net unrealized loss on marketable securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(38
|
)
|
(38
|
)
|
|||||||
Final remittance of net income attributable to S2S Global before February 1, 2015
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(1,890
|
)
|
—
|
|
—
|
|
(1,890
|
)
|
|||||||
Adjustment to redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
—
|
|
—
|
|
(350,122
|
)
|
1,126,872
|
|
—
|
|
—
|
|
776,750
|
|
|||||||
Balance at June 30, 2016
|
45,996
|
|
$
|
460
|
|
96,133
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,951,878
|
)
|
$
|
—
|
|
$
|
(43
|
)
|
$
|
(1,951,461
|
)
|
Exchange of Class B units for Class A common stock by member owners
|
4,851
|
|
48
|
|
(4,851
|
)
|
—
|
|
157,323
|
|
—
|
|
—
|
|
—
|
|
157,371
|
|
|||||||
Exchange of Class B units for cash by member owners
|
—
|
|
—
|
|
(3,810
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Redemption of limited partner
|
—
|
|
—
|
|
(173
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Increase in additional paid-in capital related to quarterly exchange by member owners
|
—
|
|
—
|
|
—
|
|
—
|
|
35,141
|
|
—
|
|
—
|
|
—
|
|
35,141
|
|
|||||||
Issuance of Class A common stock under equity incentive plan
|
1,021
|
|
10
|
|
—
|
|
—
|
|
9,158
|
|
—
|
|
—
|
|
—
|
|
9,168
|
|
|||||||
Issuance of Class A common stock under employee stock purchase plan
|
75
|
|
1
|
|
—
|
|
—
|
|
2,482
|
|
—
|
|
—
|
|
—
|
|
2,483
|
|
|||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
26,470
|
|
—
|
|
—
|
|
—
|
|
26,470
|
|
|||||||
Repurchase of vested restricted units for employee tax-withholding
|
—
|
|
—
|
|
—
|
|
—
|
|
(17,717
|
)
|
—
|
|
—
|
|
—
|
|
(17,717
|
)
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
449,477
|
|
—
|
|
—
|
|
449,477
|
|
|||||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(336,052
|
)
|
—
|
|
—
|
|
(336,052
|
)
|
|||||||
Net realized loss on marketable securities
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
43
|
|
43
|
|
|||||||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
—
|
|
—
|
|
(212,857
|
)
|
175,681
|
|
—
|
|
—
|
|
(37,176
|
)
|
|||||||
Balance at June 30, 2017
|
51,943
|
|
$
|
519
|
|
87,299
|
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,662,772
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
(1,662,253
|
)
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
449,477
|
|
$
|
235,161
|
|
$
|
234,785
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Depreciation and amortization
|
107,211
|
|
84,156
|
|
54,322
|
|
|||
Equity in net income of unconsolidated affiliates
|
(14,745
|
)
|
(21,647
|
)
|
(21,285
|
)
|
|||
Deferred income taxes
|
60,562
|
|
25,714
|
|
18,294
|
|
|||
Loss on investment
|
—
|
|
—
|
|
1,000
|
|
|||
Stock-based compensation
|
26,470
|
|
48,670
|
|
28,498
|
|
|||
Adjustment to tax receivable agreement liabilities
|
(5,447
|
)
|
(4,818
|
)
|
—
|
|
|||
Remeasurement gain attributable to acquisition of Innovatix
|
(205,146
|
)
|
—
|
|
—
|
|
|||
Loss on disposal of long-lived assets
|
2,422
|
|
—
|
|
15,243
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable, prepaid expenses and other current assets
|
3,365
|
|
(37,250
|
)
|
(18,964
|
)
|
|||
Other assets
|
6,821
|
|
(9,638
|
)
|
(1,736
|
)
|
|||
Inventories
|
(16,349
|
)
|
3,937
|
|
(12,235
|
)
|
|||
Accounts payable, accrued expenses and other current liabilities
|
(24,482
|
)
|
50,313
|
|
60,834
|
|
|||
Long-term liabilities
|
(901
|
)
|
(4,195
|
)
|
2,791
|
|
|||
Other operating activities
|
2,989
|
|
1,067
|
|
2,511
|
|
|||
Net cash provided by operating activities
|
$
|
392,247
|
|
$
|
371,470
|
|
$
|
364,058
|
|
Investing activities
|
|
|
|
||||||
Purchase of marketable securities
|
$
|
—
|
|
$
|
(19,211
|
)
|
$
|
(395,302
|
)
|
Proceeds from sale of marketable securities
|
48,013
|
|
386,372
|
|
385,788
|
|
|||
Acquisition of Innovatix and Essensa, net of cash acquired
|
(319,717
|
)
|
—
|
|
—
|
|
|||
Acquisition of Acro Pharmaceuticals, net of cash acquired
|
(62,892
|
)
|
—
|
|
—
|
|
|||
Acquisition of CECity, net of cash acquired
|
—
|
|
(398,261
|
)
|
—
|
|
|||
Acquisition of HCI, net of cash acquired
|
—
|
|
(64,274
|
)
|
—
|
|
|||
Acquisition of InFlow
|
—
|
|
(6,088
|
)
|
—
|
|
|||
Acquisition of Aperek, net of cash acquired
|
—
|
|
—
|
|
(47,446
|
)
|
|||
Acquisition of TheraDoc, net of cash acquired
|
—
|
|
—
|
|
(108,561
|
)
|
|||
Purchase of non-controlling interest in S2S Global
|
—
|
|
—
|
|
(14,518
|
)
|
|||
Investment in unconsolidated affiliates
|
(65,660
|
)
|
(3,250
|
)
|
(5,000
|
)
|
|||
Distributions received on equity investment
|
6,550
|
|
22,093
|
|
18,900
|
|
|||
Decrease in restricted cash
|
—
|
|
—
|
|
5,000
|
|
|||
Purchases of property and equipment
|
(71,372
|
)
|
(76,990
|
)
|
(70,734
|
)
|
|||
Other investing activities
|
25
|
|
(27
|
)
|
—
|
|
|||
Net cash used in investing activities
|
$
|
(465,053
|
)
|
$
|
(159,636
|
)
|
$
|
(231,873
|
)
|
Financing activities
|
|
|
|
||||||
Payments made on notes payable
|
$
|
(5,486
|
)
|
$
|
(2,143
|
)
|
$
|
(1,403
|
)
|
Proceeds from credit facility
|
425,000
|
|
150,000
|
|
—
|
|
|||
Payments on credit facility
|
(205,000
|
)
|
(150,000
|
)
|
—
|
|
|||
Proceeds from exercise of stock options under equity incentive plans
|
9,168
|
|
3,552
|
|
1,508
|
|
|||
Proceeds from issuance of Class A common stock under stock purchase plan
|
2,483
|
|
2,317
|
|
—
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Repurchase of vested restricted units for employee tax-withholding
|
(17,717
|
)
|
(7,863
|
)
|
(135
|
)
|
|||
Settlement of exchange of Class B units by member owners
|
(123,331
|
)
|
—
|
|
—
|
|
|||
Distributions to limited partners of Premier LP
|
(90,434
|
)
|
(92,707
|
)
|
(92,212
|
)
|
|||
Payments to limited partners of Premier LP related to tax receivable agreements
|
(13,959
|
)
|
(10,805
|
)
|
(11,499
|
)
|
|||
Proceeds from S2S Global revolving line of credit
|
—
|
|
—
|
|
1,007
|
|
|||
Payments on S2S Global revolving line of credit
|
—
|
|
—
|
|
(14,715
|
)
|
|||
Final remittance of net income attributable to former S2S Global minority shareholder
|
—
|
|
(1,890
|
)
|
—
|
|
|||
Net cash used in financing activities
|
$
|
(19,276
|
)
|
$
|
(109,539
|
)
|
$
|
(117,449
|
)
|
Net increase (decrease) in cash and cash equivalents
|
(92,082
|
)
|
102,295
|
|
14,736
|
|
|||
Cash and cash equivalents at beginning of year
|
248,817
|
|
146,522
|
|
131,786
|
|
|||
Cash and cash equivalents at end of year
|
$
|
156,735
|
|
$
|
248,817
|
|
$
|
146,522
|
|
|
|
|
|
||||||
Supplemental schedule of non cash investing and financing activities:
|
|
|
|
||||||
Increase (decrease) in redeemable limited partners' capital for adjustment to fair value, with offsetting decrease (increase) in additional paid-in-capital and accumulated deficit
|
$
|
37,176
|
|
$
|
(776,750
|
)
|
$
|
904,035
|
|
Reduction in redeemable limited partners' capital, with offsetting increase in common stock and additional paid-in capital related to quarterly exchange by member owners
|
$
|
157,371
|
|
$
|
267,681
|
|
$
|
175,062
|
|
Reduction in redeemable limited partners' capital for limited partners' capital distribution payable
|
$
|
24,951
|
|
$
|
22,493
|
|
$
|
22,432
|
|
Distributions utilized to reduce subscriptions, notes, interest and accounts receivable from member owners
|
$
|
2,049
|
|
$
|
5,407
|
|
$
|
6,506
|
|
Net increase in deferred tax assets related to quarterly exchanges by member owners and other adjustments
|
$
|
114,605
|
|
$
|
94,839
|
|
$
|
80,115
|
|
Net increase in tax receivable agreement liabilities related to quarterly exchanges by member owners and other adjustments
|
$
|
79,463
|
|
$
|
59,408
|
|
$
|
55,170
|
|
Increase in additional paid-in capital related to quarterly exchanges by member owners
|
$
|
35,141
|
|
$
|
35,431
|
|
$
|
18,097
|
|
Net increase in investments in unconsolidated affiliates related to FFF put and call rights, with offsetting increases in other assets and other liabilities
|
$
|
15,460
|
|
$
|
—
|
|
$
|
—
|
|
Payable to member owners incurred upon repurchase of ownership interest
|
$
|
416
|
|
$
|
3,556
|
|
$
|
2,046
|
|
|
June 30, 2017
|
June 30, 2016
|
||||
Assets
|
|
|
||||
Current
|
$
|
385,477
|
|
$
|
442,251
|
|
Noncurrent
|
1,616,539
|
|
973,741
|
|
||
Total assets of Premier LP
|
$
|
2,002,016
|
|
$
|
1,415,992
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Current
|
$
|
560,582
|
|
$
|
312,068
|
|
Noncurrent
|
134,635
|
|
74,709
|
|
||
Total liabilities of Premier LP
|
$
|
695,217
|
|
$
|
386,777
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Premier LP net income
|
$
|
522,310
|
|
$
|
275,955
|
|
$
|
257,662
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net cash provided by (used in):
|
|
|
|
||||||
Operating activities
|
$
|
439,745
|
|
$
|
393,352
|
|
$
|
379,784
|
|
Investing activities
|
(465,052
|
)
|
(159,636
|
)
|
(231,873
|
)
|
|||
Financing activities
|
(51,290
|
)
|
(150,330
|
)
|
(152,578
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(76,597
|
)
|
83,386
|
|
(4,667
|
)
|
|||
Cash and cash equivalents at beginning of year
|
210,048
|
|
126,662
|
|
131,329
|
|
|||
Cash and cash equivalents at end of year
|
$
|
133,451
|
|
$
|
210,048
|
|
$
|
126,662
|
|
|
Acquisition Date Fair Value
|
||
Cash paid at closing
|
$
|
227,500
|
|
Note payable at closing, paid on January 10, 2017
|
97,500
|
|
|
Purchase price
|
325,000
|
|
|
Consideration for Innovatix and Essensa cash at closing
|
10,984
|
|
|
Adjusted purchase price
|
335,984
|
|
|
Earn-out liability
|
16,662
|
|
|
Receivable from GNYHA Holdings, LLC
|
(3,000
|
)
|
|
Total consideration paid
|
349,646
|
|
|
Cash acquired
|
(16,267
|
)
|
|
Net consideration
|
333,379
|
|
|
50% ownership interest in Innovatix
|
218,356
|
|
|
Payable to Innovatix and Essensa
|
(5,765
|
)
|
|
Enterprise value
|
545,970
|
|
|
|
|
||
Accounts receivable
|
21,242
|
|
|
Prepaid expenses and other current assets
|
686
|
|
|
Fixed assets
|
3,476
|
|
|
Intangible assets
|
241,494
|
|
|
Total assets acquired
|
266,898
|
|
|
Accrued expenses
|
5,264
|
|
|
Revenue share obligations
|
7,011
|
|
|
Other current liabilities
|
694
|
|
|
Total liabilities assumed
|
12,969
|
|
|
Deferred tax liability
|
42,636
|
|
|
Goodwill
|
$
|
334,677
|
|
|
Acquisition Date Fair Value
|
||
Purchase price
|
$
|
400,000
|
|
Working capital adjustment
|
(28
|
)
|
|
Total purchase price
|
399,972
|
|
|
Less: cash acquired
|
(1,708
|
)
|
|
Total purchase price, net of cash acquired
|
398,264
|
|
|
Accounts receivable
|
3,877
|
|
|
Other current assets
|
295
|
|
|
Property and equipment
|
605
|
|
|
Intangible assets
|
125,400
|
|
|
Total assets acquired
|
130,177
|
|
|
Other current liabilities
|
5,871
|
|
|
Total liabilities assumed
|
5,871
|
|
|
Goodwill
|
$
|
273,958
|
|
|
Carrying Value
|
|
Equity in Net Income (Loss)
|
|||||||||||||
|
June 30,
|
|
Year Ended June 30,
|
|||||||||||||
|
2017
|
2016
|
|
2017
|
2016
|
2015
|
||||||||||
FFF
|
$
|
85,520
|
|
$
|
—
|
|
|
$
|
4,400
|
|
$
|
—
|
|
$
|
—
|
|
Bloodbuy
|
2,066
|
|
2,185
|
|
|
(119
|
)
|
(65
|
)
|
—
|
|
|||||
PharmaPoint
|
4,232
|
|
4,572
|
|
|
(340
|
)
|
(379
|
)
|
—
|
|
|||||
Innovatix
|
—
|
|
9,043
|
|
|
10,743
|
|
21,797
|
|
21,285
|
|
|||||
Other investments
|
1,061
|
|
1,000
|
|
|
61
|
|
294
|
|
—
|
|
|||||
Total investments
|
$
|
92,879
|
|
$
|
16,800
|
|
|
$
|
14,745
|
|
$
|
21,647
|
|
$
|
21,285
|
|
|
Amortized Cost
|
Gross Unrealized Gains
|
Gross Unrealized Losses
|
Fair Market Value
|
||||||||
June 30, 2016
|
|
|
|
|
||||||||
Corporate debt securities
|
$
|
33,267
|
|
$
|
—
|
|
$
|
(135
|
)
|
$
|
33,132
|
|
Asset-backed securities
|
14,755
|
|
3
|
|
(1
|
)
|
14,757
|
|
||||
Total marketable securities
|
$
|
48,022
|
|
$
|
3
|
|
$
|
(136
|
)
|
$
|
47,889
|
|
|
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
June 30, 2017
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
22,218
|
|
$
|
22,218
|
|
$
|
—
|
|
$
|
—
|
|
FFF call right
|
4,655
|
|
—
|
|
—
|
|
4,655
|
|
||||
Deferred compensation plan assets
|
47,202
|
|
47,202
|
|
—
|
|
—
|
|
||||
Total assets
|
$
|
74,075
|
|
$
|
69,420
|
|
$
|
—
|
|
$
|
4,655
|
|
Earn-out liabilities
|
$
|
21,310
|
|
$
|
—
|
|
$
|
—
|
|
$
|
21,310
|
|
FFF put right
|
24,050
|
|
—
|
|
—
|
|
24,050
|
|
||||
Total liabilities
|
$
|
45,360
|
|
$
|
—
|
|
$
|
—
|
|
$
|
45,360
|
|
|
|
|
|
|
||||||||
June 30, 2016
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
83,846
|
|
$
|
83,846
|
|
$
|
—
|
|
$
|
—
|
|
Corporate debt securities
|
33,132
|
|
—
|
|
33,132
|
|
—
|
|
||||
Asset-backed securities
|
14,757
|
|
—
|
|
14,757
|
|
—
|
|
||||
Deferred compensation plan assets
|
41,917
|
|
41,917
|
|
—
|
|
—
|
|
||||
Total assets
|
$
|
173,652
|
|
$
|
125,763
|
|
$
|
47,889
|
|
$
|
—
|
|
Earn-out liabilities
|
$
|
4,128
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,128
|
|
Total liabilities
|
$
|
4,128
|
|
$
|
—
|
|
$
|
—
|
|
$
|
4,128
|
|
|
Beginning Balance
|
Purchases
|
Gain (Loss)
|
Ending Balance
|
||||||||
Year ended June 30, 2017
|
|
|
|
|
||||||||
FFF call right asset
|
$
|
—
|
|
$
|
10,361
|
|
$
|
(5,706
|
)
|
$
|
4,655
|
|
Total Level 3 assets
|
$
|
—
|
|
$
|
10,361
|
|
$
|
(5,706
|
)
|
$
|
4,655
|
|
Earn-out liabilities
|
$
|
4,128
|
|
$
|
16,662
|
|
$
|
(520
|
)
|
$
|
21,310
|
|
FFF put right liability
|
—
|
|
25,821
|
|
1,771
|
|
24,050
|
|
||||
Total Level 3 liabilities
|
$
|
4,128
|
|
$
|
42,483
|
|
$
|
1,251
|
|
$
|
45,360
|
|
|
|
|
|
|
||||||||
Year ended June 30, 2016
|
|
|
|
|
||||||||
Earn-out liabilities
|
$
|
—
|
|
$
|
4,109
|
|
$
|
(19
|
)
|
$
|
4,128
|
|
Total Level 3 liabilities
|
$
|
—
|
|
$
|
4,109
|
|
$
|
(19
|
)
|
$
|
4,128
|
|
|
June 30,
|
|||||
|
2017
|
2016
|
||||
Trade accounts receivable
|
$
|
130,126
|
|
$
|
112,443
|
|
Managed services receivable
|
31,383
|
|
33,728
|
|
||
Other
|
48
|
|
234
|
|
||
Total accounts receivable
|
161,557
|
|
146,405
|
|
||
Allowance for doubtful accounts
|
(1,812
|
)
|
(1,981
|
)
|
||
Accounts receivable, net
|
$
|
159,745
|
|
$
|
144,424
|
|
|
June 30,
|
||||||
|
Useful life
|
2017
|
2016
|
||||
Capitalized software
|
3-5 years
|
$
|
340,271
|
|
$
|
361,864
|
|
Computer hardware
|
3-5 years
|
57,320
|
|
53,547
|
|
||
Furniture and other equipment
|
5 years
|
8,218
|
|
8,102
|
|
||
Leasehold improvements
|
Lesser of estimated useful life or term of lease
|
18,016
|
|
16,318
|
|
||
Total property and equipment
|
|
423,825
|
|
439,831
|
|
||
Accumulated depreciation and amortization
|
|
(236,460
|
)
|
(265,751
|
)
|
||
Property and equipment, net
|
|
$
|
187,365
|
|
$
|
174,080
|
|
|
|
June 30,
|
|||||
|
Useful Life
|
2017
|
2016
|
||||
Member relationships
|
14.7 years
|
$
|
220,100
|
|
$
|
—
|
|
Technology
|
5.0 years
|
143,727
|
|
143,727
|
|
||
Customer relationships
|
8.3 years
|
48,120
|
|
48,120
|
|
||
Trade names
|
8.3 years
|
22,710
|
|
13,160
|
|
||
Distribution network
|
10.0 years
|
22,400
|
|
—
|
|
||
Favorable lease commitments
|
10.1 years
|
11,393
|
|
—
|
|
||
Non-compete agreements
|
5.9 years
|
8,710
|
|
4,080
|
|
||
Total intangible assets
|
|
477,160
|
|
209,087
|
|
||
Accumulated amortization
|
|
(99,198
|
)
|
(50,870
|
)
|
||
Total intangible assets, net
|
|
$
|
377,962
|
|
$
|
158,217
|
|
2018
|
$
|
55,493
|
|
2019
|
53,938
|
|
|
2020
|
49,073
|
|
|
2021
|
27,949
|
|
|
2022
|
24,960
|
|
|
Thereafter
|
163,149
|
|
|
Total amortization expense
(a)
|
$
|
374,562
|
|
(a)
|
Estimated aggregate amortization expense for the next five fiscal years and thereafter excludes amortization on technology under development, which was classified as technology in the total intangible assets table, of
$3.4 million
as these assets were not completed at
June 30, 2017
.
|
|
June 30,
|
|||||
|
2017
|
2016
|
||||
Supply Chain Services
|
$
|
255,601
|
|
$
|
—
|
|
Performance Services
|
122,361
|
|
158,217
|
|
||
Total intangible assets, net
|
$
|
377,962
|
|
$
|
158,217
|
|
|
Supply Chain Services
|
Performance Services
|
Acquisition adjustments
(b)
|
Total
|
||||||||
June 30, 2016
|
$
|
31,765
|
|
$
|
506,197
|
|
$
|
—
|
|
$
|
537,962
|
|
Acro Pharmaceuticals
(a)
|
39,850
|
|
—
|
|
(5,944
|
)
|
33,906
|
|
||||
Innovatix and Essensa
(a)
|
331,162
|
|
—
|
|
3,515
|
|
334,677
|
|
||||
June 30, 2017
|
$
|
402,777
|
|
$
|
506,197
|
|
$
|
(2,429
|
)
|
$
|
906,545
|
|
(a)
|
See
Note 3 - Business Acquisitions
for more information.
|
(b)
|
The initial purchase price allocations for the Company's acquisitions are preliminary and subject to changes in fair value of working capital and valuation of the assets acquired and the liabilities assumed. The Acro Pharmaceuticals acquisition adjustments were related to working capital adjustments subsequent to the acquisition date which were recorded in the Supply Chain Services segment. The Innovatix and Essensa acquisition adjustments were related to working capital and intangible asset adjustments subsequent to the acquisition date which were recorded in the Supply Chain Services segment (see
Note 3 - Business Acquisitions
).
|
|
June 30,
|
|||||
|
2017
|
2016
|
||||
Deferred loan costs, net
|
$
|
1,051
|
|
$
|
1,595
|
|
FFF call right
|
4,655
|
|
—
|
|
||
Other
|
4,565
|
|
10,895
|
|
||
Total other long-term assets
|
$
|
10,271
|
|
$
|
12,490
|
|
|
|
|
June 30,
|
|||||||
|
Commitment Amount
|
Due Date
|
2017
|
2016
|
||||||
Credit Facility
|
$
|
750,000
|
|
June 24, 2019
|
$
|
220,000
|
|
$
|
—
|
|
Notes payable
|
—
|
|
Various
|
14,272
|
|
19,342
|
|
|||
Total debt
|
|
|
234,272
|
|
19,342
|
|
||||
Less: current portion
|
|
|
(227,993
|
)
|
(5,484
|
)
|
||||
Total long-term debt
|
|
|
$
|
6,279
|
|
$
|
13,858
|
|
2018
|
$
|
7,993
|
|
2019
|
260
|
|
|
2020
|
2,420
|
|
|
2021
|
3,183
|
|
|
2022
|
416
|
|
|
Thereafter
|
—
|
|
|
Total principal payments
|
$
|
14,272
|
|
|
June 30,
|
|||||
|
2017
|
2016
|
||||
Deferred rent
|
$
|
14,045
|
|
$
|
16,049
|
|
Reserve for uncertain tax positions
|
3,819
|
|
3,815
|
|
||
Earn-out liability, less current portion
|
185
|
|
3,659
|
|
||
Accrued compensation
|
—
|
|
455
|
|
||
FFF put right
|
24,050
|
|
—
|
|
||
Total other long-term liabilities
|
$
|
42,099
|
|
$
|
23,978
|
|
|
Receivables From Limited Partners
|
Redeemable Limited Partners' Capital
|
Accumulated Other Comprehensive Income (Loss)
|
Total Redeemable Limited Partners' Capital
|
||||||||
June 30, 2014
|
$
|
(18,139
|
)
|
$
|
3,262,666
|
|
$
|
147
|
|
$
|
3,244,674
|
|
Distributions applied to receivables from limited partners
|
6,506
|
|
—
|
|
—
|
|
6,506
|
|
||||
Redemption of limited partners
|
—
|
|
(2,046
|
)
|
—
|
|
(2,046
|
)
|
||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
194,206
|
|
—
|
|
194,206
|
|
||||
Distributions to limited partners
|
—
|
|
(92,273
|
)
|
—
|
|
(92,273
|
)
|
||||
Net unrealized loss on marketable securities
|
—
|
|
—
|
|
(155
|
)
|
(155
|
)
|
||||
Exchange of Class B common units for Class A common stock by member owners
|
—
|
|
(175,115
|
)
|
—
|
|
(175,115
|
)
|
||||
Adjustment to redemption amount
|
—
|
|
904,035
|
|
—
|
|
904,035
|
|
||||
June 30, 2015
|
$
|
(11,633
|
)
|
$
|
4,091,473
|
|
$
|
(8
|
)
|
$
|
4,079,832
|
|
Distributions and notes payable applied to receivables from limited partners
|
5,407
|
|
—
|
|
—
|
|
5,407
|
|
||||
Redemption of limited partners
|
—
|
|
(4,281
|
)
|
—
|
|
(4,281
|
)
|
||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
193,547
|
|
—
|
|
193,547
|
|
||||
Distributions to limited partners
|
—
|
|
(92,767
|
)
|
—
|
|
(92,767
|
)
|
||||
Net unrealized loss on marketable securities
|
—
|
|
—
|
|
(77
|
)
|
(77
|
)
|
||||
Exchange of Class B common units for Class A common stock by member owners
|
—
|
|
(267,681
|
)
|
—
|
|
(267,681
|
)
|
||||
Adjustment to redemption amount
|
—
|
|
(776,750
|
)
|
—
|
|
(776,750
|
)
|
||||
June 30, 2016
|
$
|
(6,226
|
)
|
$
|
3,143,541
|
|
$
|
(85
|
)
|
$
|
3,137,230
|
|
Distributions applied to receivables from limited partners
|
2,049
|
|
—
|
|
—
|
|
2,049
|
|
||||
Redemption of limited partner
|
—
|
|
(416
|
)
|
—
|
|
(416
|
)
|
||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
336,052
|
|
—
|
|
336,052
|
|
||||
Distributions to limited partners
|
—
|
|
(92,892
|
)
|
—
|
|
(92,892
|
)
|
||||
Net realized loss on marketable securities
|
—
|
|
—
|
|
85
|
|
85
|
|
||||
Exchange of Class B common units for Class A common stock by member owners
|
—
|
|
(157,371
|
)
|
—
|
|
(157,371
|
)
|
||||
Exchange of Class B common units for cash by member owners
|
—
|
|
(123,330
|
)
|
—
|
|
(123,330
|
)
|
||||
Adjustment to redemption amount
|
—
|
|
37,176
|
|
—
|
|
37,176
|
|
||||
June 30, 2017
|
$
|
(4,177
|
)
|
$
|
3,142,760
|
|
$
|
—
|
|
$
|
3,138,583
|
|
Date
|
Distribution
(a)
|
||
August 25, 2016
|
$
|
22,493
|
|
November 23, 2016
|
$
|
22,137
|
|
February 28, 2017
|
$
|
22,733
|
|
May 29, 2017
|
$
|
23,071
|
|
(a)
|
Distributions are equal to Premier LP's total taxable income from the preceding fiscal quarter-to-date period for each respective distribution date multiplied by the Company's standalone effective combined federal, state and local income tax rate. Premier LP expects to make a
$25.0
million quarterly distribution on or before August 28, 2017. The distribution is reflected in limited partners' distribution payable in the accompanying Consolidated Balance Sheets at
June 30, 2017
.
|
Date of Quarterly Exchange
|
Number of Class B Common Units Exchanged
|
Reduction in Redeemable Limited Partners' Capital
|
|||
August 1, 2016
|
1,323,654
|
|
$
|
43,071
|
|
October 31, 2016
|
5,047,528
|
|
164,141
|
|
|
January 31, 2017
|
1,296,682
|
|
39,899
|
|
|
May 1, 2017
|
993,194
|
|
33,590
|
|
|
|
8,661,058
|
|
$
|
280,701
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Numerator for basic earnings (loss) per share:
|
|
|
|
||||||
Net income (loss) attributable to stockholders
|
$
|
76,249
|
|
$
|
818,364
|
|
$
|
(865,292
|
)
|
|
|
|
|
||||||
Numerator for diluted earnings (loss) per share:
|
|
|
|
||||||
Net income (loss) attributable to stockholders
|
$
|
76,249
|
|
$
|
818,364
|
|
$
|
(865,292
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
(776,750
|
)
|
—
|
|
|||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
193,547
|
|
—
|
|
|||
Net income (loss)
|
76,249
|
|
235,161
|
|
(865,292
|
)
|
|||
Tax effect on Premier, Inc. net income
(a)
|
—
|
|
(41,497
|
)
|
—
|
|
|||
Adjusted net income (loss)
|
$
|
76,249
|
|
$
|
193,664
|
|
$
|
(865,292
|
)
|
|
|
|
|
||||||
Denominator for basic earnings (loss) per share:
|
|
|
|
||||||
Weighted average shares
(b)
|
49,654
|
|
42,368
|
|
35,681
|
|
|||
|
|
|
|
||||||
Denominator for diluted earnings (loss) per share:
|
|
|
|
||||||
Weighted average shares
(b)
|
49,654
|
|
42,368
|
|
35,681
|
|
|||
Effect of dilutive shares:
(c)
|
|
|
|
||||||
Stock options
|
286
|
|
348
|
|
—
|
|
|||
Restricted stock
|
215
|
|
589
|
|
—
|
|
|||
Performance share awards
|
219
|
|
1,429
|
|
—
|
|
|||
Class B shares outstanding
|
—
|
|
100,574
|
|
—
|
|
|||
Weighted average shares and assumed conversions
|
50,374
|
|
145,308
|
|
35,681
|
|
|||
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
1.54
|
|
$
|
19.32
|
|
$
|
(24.25
|
)
|
Diluted earnings (loss) per share
|
$
|
1.51
|
|
$
|
1.33
|
|
$
|
(24.25
|
)
|
(a)
|
Represents income tax expense related to Premier, Inc. retaining the portion of net income attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings (loss) per share.
|
(b)
|
Weighted average number of common shares used for basic earnings (loss) per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for
the years ended June 30, 2017, 2016 and 2015
.
|
(c)
|
For
the year ended June 30, 2017
, the effect of
90.8 million
Class B common units exchangeable for Class A common shares and
1.3 million
stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. For
the year ended June 30, 2016
, the effect of
1.3 million
stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. For
the year ended June 30, 2015
, the effect of
1.0 million
stock options, restricted stock units and performance share awards and
106.4 million
Class B common units exchangeable for Class A common shares were excluded from diluted weighted average shares outstanding due to the net loss attributable to shareholders sustained for the year and as including them would have been anti-dilutive for the period.
|
Quarterly Exchange by Member Owners
|
Class B Common Shares Retired Upon Exchange
(a)
|
Class B Common Shares Outstanding After Exchange
(a)
|
Class A Common Shares Outstanding After Exchange
|
Percentage of Combined Voting Power Class B/Class A Common Stock
|
|||
August 1, 2016
|
1,323,654
|
|
94,809,069
|
|
47,365,528
|
|
67%/33%
|
October 31, 2016
(b)
|
5,047,528
|
|
89,761,541
|
|
50,085,904
|
|
64%/36%
|
January 31, 2017
(b)
|
1,296,682
|
|
88,464,859
|
|
50,701,862
|
|
64%/36%
|
May 1, 2017
|
993,194
|
|
87,298,888
|
|
51,734,785
|
|
63%/37%
|
July 31, 2017
(c)
|
1,231,410
|
|
86,067,478
|
|
53,212,057
|
|
62%/38%
|
(a)
|
The number of Class B common shares retired or outstanding are equivalent to the number of Class B common units retired upon exchange or outstanding after the exchange, as applicable.
|
(b)
|
In connection with the October 31, 2016 exchange,
3.0 million
Class B common units were exchanged for cash and
2.0 million
Class B common units were exchanged for Class A common stock. In connection with the January 31, 2017 exchange,
0.8 million
Class B common units were exchanged for cash and
0.5 million
Class B common units were exchanged for Class A common stock.
|
(c)
|
As the quarterly exchange occurred on July 31, 2017, the impact of the exchange is not reflected in the consolidated financial statements for
the year ended June 30, 2017
.
|
|
Restricted Stock
|
|
Performance Share Awards
|
|
Stock Options
|
||||||||||||
|
Number of Awards
|
Weighted Average Fair Value at Grant Date
|
|
Number of Awards
|
Weighted Average Fair Value at Grant Date
|
|
Number of Options
|
Weighted Average Exercise Price
|
|||||||||
Outstanding at June 30, 2016
|
403,117
|
|
$
|
33.86
|
|
|
1,443,708
|
|
$
|
30.02
|
|
|
3,314,661
|
|
$
|
30.04
|
|
Granted
|
267,127
|
|
$
|
31.58
|
|
|
905,460
|
|
$
|
29.73
|
|
|
527,294
|
|
$
|
31.60
|
|
Vested/exercised
|
(50,114
|
)
|
$
|
32.66
|
|
|
(1,181,820
|
)
|
$
|
27.00
|
|
|
(332,383
|
)
|
$
|
28.04
|
|
Forfeited
|
(43,142
|
)
|
$
|
33.72
|
|
|
(81,476
|
)
|
$
|
33.82
|
|
|
(137,073
|
)
|
$
|
34.25
|
|
Outstanding at June 30, 2017
|
576,988
|
|
$
|
32.92
|
|
|
1,085,872
|
|
$
|
32.79
|
|
|
3,372,499
|
|
$
|
30.31
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock options outstanding and exercisable at June 30, 2017
|
|
|
|
|
|
|
2,224,038
|
|
$
|
28.82
|
|
|
Unrecognized Stock-Based Compensation Expense
|
Weighted Average Amortization Period
|
||
Restricted stock
|
$
|
8,900
|
|
1.66 years
|
Performance share awards
|
16,010
|
|
1.76 years
|
|
Stock options
|
7,952
|
|
1.67 years
|
|
Total unrecognized stock-based compensation expense
|
$
|
32,862
|
|
1.71 years
|
|
Intrinsic Value of Stock Options
|
||
Outstanding and exercisable
|
$
|
16,000
|
|
Expected to vest
|
3,236
|
|
|
Total outstanding
|
$
|
19,236
|
|
|
|
||
Exercised during the year ended June 30, 2017
|
$
|
1,902
|
|
|
June 30,
|
||
|
2017
|
2016
|
2015
|
Expected life
(a)
|
6 years
|
6 years
|
6 years
|
Expected dividend
(b)
|
—
|
—
|
—
|
Expected volatility
(c)
|
32.0% - 33.0%
|
32.7% - 33.5%
|
34.8% - 39.5%
|
Risk-free interest rate
(d)
|
1.31% - 2.13%
|
1.15% - 1.82%
|
1.66% - 1.89%
|
Weighted average option grant date fair value
|
$10.48 - $12.00
|
$11.11 - $12.40
|
$12.82 - $14.15
|
(a)
|
The
six
-year expected life (estimated period of time outstanding) of stock options granted was estimated using the "Simplified Method" which utilizes the midpoint between the vesting date and the end of the contractual term. This method was utilized for the stock options due to the lack of historical exercise behavior of Premier's employees.
|
(b)
|
No dividends are expected to be paid over the contractual term of the stock options granted, resulting in the use of a
zero
expected dividend rate.
|
(c)
|
The expected volatility rate is based on the observed historical volatilities of comparable companies.
|
(d)
|
The risk-free interest rate was interpolated from the
five
-year and
seven
-year Constant Maturity Treasury rate published by the United States Treasury as of the date of the grant.
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
16,638
|
|
$
|
19,765
|
|
$
|
15,240
|
|
State
|
4,614
|
|
4,242
|
|
2,808
|
|
|||
Total current expense
|
21,252
|
|
24,007
|
|
18,048
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
49,392
|
|
15,703
|
|
15,770
|
|
|||
State
|
11,170
|
|
10,011
|
|
2,524
|
|
|||
Total deferred expense
|
60,562
|
|
25,714
|
|
18,294
|
|
|||
Provision for income taxes
|
$
|
81,814
|
|
$
|
49,721
|
|
$
|
36,342
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Computed tax expense
|
$
|
185,952
|
|
$
|
99,709
|
|
$
|
94,895
|
|
Partnership income (federal) not subject to tax to the Company
|
(85,142
|
)
|
(85,063
|
)
|
(82,751
|
)
|
|||
State taxes (net of federal benefit)
|
9,823
|
|
664
|
|
1,961
|
|
|||
Remeasurement gain and other permanent items
|
(78,998
|
)
|
1,051
|
|
1,840
|
|
|||
Research and development credits
|
(2,239
|
)
|
(1,562
|
)
|
(2,160
|
)
|
|||
Expense (benefit) on subsidiaries treated separately for income tax purposes
|
18,660
|
|
(7,497
|
)
|
(6,323
|
)
|
|||
Change in valuation allowance
|
26,829
|
|
36,279
|
|
28,210
|
|
|||
Deferred tax revaluation
|
9,950
|
|
8,080
|
|
—
|
|
|||
Other
|
(3,021
|
)
|
(1,940
|
)
|
670
|
|
|||
Provision for income taxes
|
$
|
81,814
|
|
$
|
49,721
|
|
$
|
36,342
|
|
Effective income tax rate
|
15.4
|
%
|
17.5
|
%
|
13.4
|
%
|
|
June 30,
|
|||||
|
2017
|
2016
|
||||
Deferred tax asset
|
|
|
||||
Partnership basis differences in Premier LP
|
$
|
473,193
|
|
$
|
413,408
|
|
Stock compensation
|
23,037
|
|
36,884
|
|
||
Accrued expenses
|
44,096
|
|
33,438
|
|
||
Net operating losses and credits
|
47,629
|
|
24,753
|
|
||
Other
|
11,856
|
|
5,073
|
|
||
Total deferred tax assets
|
599,811
|
|
513,556
|
|
||
Valuation allowance for deferred tax assets
|
(91,787
|
)
|
(64,958
|
)
|
||
Net deferred tax assets
|
508,024
|
|
448,598
|
|
||
Deferred tax liability
|
|
|
||||
Purchased intangible assets and depreciation
|
(71,994
|
)
|
(25,749
|
)
|
||
Other liabilities
|
(1,774
|
)
|
—
|
|
||
Net deferred tax asset
|
$
|
434,256
|
|
$
|
422,849
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Beginning of year balance
|
$
|
4,381
|
|
$
|
3,436
|
|
$
|
1,438
|
|
Increases in prior period tax positions
|
101
|
|
318
|
|
1,185
|
|
|||
Decreases in prior period tax positions
|
(870
|
)
|
(201
|
)
|
—
|
|
|||
Decreases due to lapse in statute of limitations
|
(22
|
)
|
(721
|
)
|
(225
|
)
|
|||
Increases in current period tax positions
|
1,453
|
|
1,549
|
|
1,038
|
|
|||
End of year balance
|
$
|
5,043
|
|
$
|
4,381
|
|
$
|
3,436
|
|
2018
|
$
|
11,607
|
|
2019
|
11,732
|
|
|
2020
|
10,710
|
|
|
2021
|
10,312
|
|
|
2022
|
10,437
|
|
|
Thereafter
|
39,970
|
|
|
Total future minimum lease payments
|
$
|
94,768
|
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Net Revenue:
|
|
|
|
||||||
Supply Chain Services
|
|
|
|
||||||
Net administrative fees
|
$
|
557,468
|
|
$
|
498,394
|
|
$
|
457,020
|
|
Other services and support
|
9,704
|
|
4,385
|
|
1,977
|
|
|||
Services
|
567,172
|
|
502,779
|
|
458,997
|
|
|||
Products
|
534,118
|
|
326,646
|
|
279,261
|
|
|||
Total Supply Chain Services
|
1,101,290
|
|
829,425
|
|
738,258
|
|
|||
Performance Services
|
353,383
|
|
333,169
|
|
268,771
|
|
|||
Net revenue
|
$
|
1,454,673
|
|
$
|
1,162,594
|
|
$
|
1,007,029
|
|
|
|
|
|
||||||
Depreciation and amortization expense
(a)
:
|
|
|
|
||||||
Supply Chain Services
|
$
|
14,209
|
|
$
|
1,401
|
|
$
|
1,964
|
|
Performance Services
|
85,299
|
|
76,500
|
|
47,131
|
|
|||
Corporate
|
7,703
|
|
6,255
|
|
5,227
|
|
|||
Total depreciation and amortization expense
|
$
|
107,211
|
|
$
|
84,156
|
|
$
|
54,322
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
||||||
Supply Chain Services
|
$
|
483
|
|
$
|
914
|
|
$
|
1,815
|
|
Performance Services
|
66,686
|
|
62,337
|
|
63,435
|
|
|||
Corporate
|
4,203
|
|
13,739
|
|
5,484
|
|
|||
Total capital expenditures
|
$
|
71,372
|
|
$
|
76,990
|
|
$
|
70,734
|
|
|
|
|
|
||||||
|
|
June 30,
|
|||||||
Total assets:
|
|
2017
|
2016
|
||||||
Supply Chain Services
|
|
$
|
1,017,023
|
|
$
|
345,219
|
|
||
Performance Services
|
|
888,862
|
|
934,588
|
|
||||
Corporate
|
|
601,951
|
|
575,576
|
|
||||
Total assets
|
|
$
|
2,507,836
|
|
$
|
1,855,383
|
|
(a)
|
Includes amortization of purchased intangible assets.
|
|
Year Ended June 30,
|
||||||||
|
2017
|
2016
|
2015
|
||||||
Income before income taxes
|
$
|
531,291
|
|
$
|
284,882
|
|
$
|
271,127
|
|
Remeasurement gain attributable to acquisition of Innovatix
|
(205,146
|
)
|
—
|
|
—
|
|
|||
Equity in net income of unconsolidated affiliates
(a)
|
(14,745
|
)
|
(21,647
|
)
|
(21,285
|
)
|
|||
Interest and investment income (loss), net
(b)
|
4,512
|
|
1,021
|
|
(866
|
)
|
|||
Loss on disposal of long-lived assets
|
2,422
|
|
—
|
|
15,243
|
|
|||
Other expense (income), net
|
(614
|
)
|
1,692
|
|
1,823
|
|
|||
Operating income
|
317,720
|
|
265,948
|
|
266,042
|
|
|||
Depreciation and amortization
|
58,884
|
|
51,102
|
|
45,186
|
|
|||
Amortization of purchased intangible assets
|
48,327
|
|
33,054
|
|
9,136
|
|
|||
Stock-based compensation
(c)
|
26,860
|
|
49,081
|
|
28,498
|
|
|||
Acquisition related expenses
|
15,790
|
|
15,804
|
|
9,037
|
|
|||
Strategic and financial restructuring expenses
|
31
|
|
268
|
|
1,373
|
|
|||
Adjustment to tax receivable agreement liabilities
(d)
|
(5,447
|
)
|
(4,818
|
)
|
—
|
|
|||
ERP implementation expenses
(e)
|
2,028
|
|
4,870
|
|
—
|
|
|||
Acquisition related adjustment - revenue
(f)
|
18,049
|
|
5,624
|
|
13,371
|
|
|||
Equity in net income of unconsolidated affiliates
(a)
|
14,745
|
|
21,647
|
|
21,285
|
|
|||
Deferred compensation plan income (expense)
(g)
|
4,020
|
|
(1,605
|
)
|
(753
|
)
|
|||
Other income
|
584
|
|
—
|
|
—
|
|
|||
Adjusted EBITDA
|
$
|
501,591
|
|
$
|
440,975
|
|
$
|
393,175
|
|
|
|
|
|
||||||
Segment Adjusted EBITDA:
|
|
|
|
||||||
Supply Chain Services
|
$
|
493,763
|
|
$
|
439,013
|
|
$
|
391,180
|
|
Performance Services
|
121,090
|
|
110,787
|
|
90,235
|
|
|||
Corporate
|
(113,262
|
)
|
(108,825
|
)
|
(88,240
|
)
|
|||
Adjusted EBITDA
|
$
|
501,591
|
|
$
|
440,975
|
|
$
|
393,175
|
|
(a)
|
Refer to
Note 4 - Investments
for further information regarding equity in net income of unconsolidated affiliates.
|
(b)
|
Represents interest expense, net and realized gains and losses on our marketable securities.
|
(c)
|
Represents non-cash employee stock-based compensation expense and
$0.4 million
stock purchase plan expense during both of
the years ended June 30, 2017 and 2016
.
|
(d)
|
Represents adjustment to TRA liabilities for an increase in income apportioned to California and a
1.5%
decrease in the North Carolina state income tax rate during the year ended June 30, 2017, and adjustment for a
1.0%
decrease in the North Carolina state income tax rate during the year ended June 30, 2016.
|
(e)
|
Represents implementation and other costs associated with the implementation of our enterprise resource planning ("ERP") system.
|
(f)
|
During
the year ended June 30, 2017
, we recorded
$17.4 million
purchase accounting adjustments to Adjusted EBITDA related to our acquisition of Innovatix and Essensa on December 2, 2016. This adjustment reflects the fair value of administrative fees related to member purchases that occurred prior to December 2, 2016, but were reported to us subsequent to that date through
June 30, 2017
. Under our revenue recognition accounting policy, which is in accordance with GAAP, these administrative fees would be ordinarily recorded as revenue when reported to us; however, the acquisition method of accounting requires us to estimate the amount of purchases prior to the acquisition date and to record the fair value of the administrative fees to be received from those purchases as an account receivable (as opposed to recognizing revenue when these transactions are reported to us) and record any corresponding revenue share obligation as a liability. The purchase accounting adjustment amounted to an estimated
$21.2 million
of accounts receivable relating to these administrative fees and an estimated
$3.8 million
for the related revenue share obligation through
June 30, 2017
.
|
(g)
|
Represents realized and unrealized gains and losses and dividend income on deferred compensation plan assets.
|
|
First
|
Second
|
Third
|
Fourth
|
||||||||
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||
Fiscal Year 2017
|
|
|
|
|
||||||||
Net revenue
|
$
|
313,272
|
|
$
|
358,500
|
|
$
|
379,803
|
|
$
|
403,098
|
|
Gross profit
|
174,769
|
|
182,486
|
|
202,555
|
|
214,815
|
|
||||
Net income
|
58,095
|
|
246,184
|
|
71,338
|
|
73,860
|
|
||||
Net income attributable to non-controlling interest in Premier LP
|
(49,601
|
)
|
(181,173
|
)
|
(51,433
|
)
|
(53,845
|
)
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
61,808
|
|
335,264
|
|
(100,506
|
)
|
(333,742
|
)
|
||||
Net income (loss) attributable to stockholders
|
$
|
70,302
|
|
$
|
400,275
|
|
$
|
(80,601
|
)
|
$
|
(313,727
|
)
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
||||||||
Basic
|
47,214
|
|
49,445
|
|
50,525
|
|
51,470
|
|
||||
Diluted
|
142,962
|
|
141,308
|
|
50,525
|
|
51,470
|
|
||||
|
|
|
|
|
||||||||
Net income (loss) per share attributable to stockholders:
|
|
|
|
|
||||||||
Basic
|
$
|
1.49
|
|
$
|
8.10
|
|
$
|
(1.60
|
)
|
$
|
(6.10
|
)
|
Diluted
|
$
|
0.26
|
|
$
|
1.50
|
|
$
|
(1.60
|
)
|
$
|
(6.10
|
)
|
|
|
|
|
|
||||||||
Fiscal Year 2016
|
|
|
|
|
||||||||
Net revenue
|
$
|
270,835
|
|
$
|
291,669
|
|
$
|
298,669
|
|
$
|
301,421
|
|
Gross profit
|
161,712
|
|
179,072
|
|
186,576
|
|
178,178
|
|
||||
Net income
|
52,253
|
|
60,995
|
|
71,557
|
|
50,356
|
|
||||
Net income attributable to non-controlling interest in Premier LP
|
(47,900
|
)
|
(49,817
|
)
|
(56,018
|
)
|
(39,812
|
)
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
466,801
|
|
(65,561
|
)
|
284,409
|
|
91,101
|
|
||||
Net income (loss) attributable to stockholders
|
$
|
471,154
|
|
$
|
(54,383
|
)
|
$
|
299,948
|
|
$
|
101,645
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
||||||||
Basic
|
37,735
|
|
41,575
|
|
44,716
|
|
45,506
|
|
||||
Diluted
|
145,560
|
|
41,575
|
|
145,018
|
|
144,621
|
|
||||
|
|
|
|
|
||||||||
Net income (loss) per share attributable to stockholders:
|
|
|
|
|
||||||||
Basic
|
$
|
12.49
|
|
$
|
(1.31
|
)
|
$
|
6.71
|
|
$
|
2.23
|
|
Diluted
|
$
|
0.24
|
|
$
|
(1.31
|
)
|
$
|
0.43
|
|
$
|
0.30
|
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)
|
Weighted-average exercise price of outstanding options, warrants and rights (b)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
|
Equity compensation plans approved by security holders:
|
|
|
|
Premier, Inc. 2013 Equity Incentive Plan
|
5,035,359
(1)
|
$30.31
(2)
|
4,605,246
(3)
|
Equity compensation plans not approved by security holders
|
n/a
|
n/a
|
n/a
|
Total
|
5,035,359
(1)
|
$30.31
(2)
|
4,605,246
(3)
|
Years Ended June 30, 2017, 2016 and 2015
|
||||||||||
(in thousands)
|
||||||||||
|
Beginning Balance
|
Additions/(Reductions) to Expense or Other Accounts
|
Deductions
|
Ending Balance
|
||||||
Year ended June 30, 2017
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,981
|
|
781
|
|
950
|
|
$
|
1,812
|
|
Deferred tax assets valuation allowance
|
$
|
64,958
|
|
26,829
|
|
—
|
|
$
|
91,787
|
|
|
|
|
|
|
||||||
Year ended June 30, 2016
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,153
|
|
1,655
|
|
827
|
|
$
|
1,981
|
|
Deferred tax assets valuation allowance
|
$
|
28,679
|
|
36,279
|
|
—
|
|
$
|
64,958
|
|
|
|
|
|
|
||||||
Year ended June 30, 2015
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,054
|
|
144
|
|
45
|
|
$
|
1,153
|
|
Deferred tax assets valuation allowance
|
$
|
470
|
|
28,396
|
|
187
|
|
$
|
28,679
|
|
|
PREMIER, INC.
|
|
|
By:
|
/s/ SUSAN D. DEVORE
|
|
Name:
|
Susan D. DeVore
|
|
Title:
|
President, Chief Executive Officer and Director
|
|
Date:
|
August 22, 2017
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ SUSAN D. DEVORE
Susan D. DeVore
|
|
President, Chief Executive Officer and Director (principal executive officer)
|
|
August 22, 2017
|
|
|
|
|
|
/s/ CRAIG S. MCKASSON
Craig S. McKasson
|
|
Chief Financial Officer and Senior Vice President (principal financial and accounting officer)
|
|
August 22, 2017
|
|
|
|
|
|
/s/ BARCLAY E. BERDAN
Barclay E. Berdan
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ ERIC J. BIEBER, MD
Eric J. Bieber, MD
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ STEPHEN R. D'ARCY
Stephen R. D'Arcy |
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ JODY R. DAVIDS
Jody R. Davids
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ WILLIAM B. DOWNEY
William B. Downey
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ PETER S. FINE
Peter S. Fine
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ PHILIP A. INCARNATI
Philip A. Incarnati
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ DAVID LANGSTAFF
David Langstaff |
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ WILLIAM E. MAYER
William E. Mayer |
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ MARC D. MILLER
Marc D. Miller
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ MARVIN R. O'QUINN
Marvin R. O'Quinn
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ SCOTT REINER
Scott Reiner
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ TERRY D. SHAW
Terry D. Shaw
|
|
Director
|
|
August 22, 2017
|
|
|
|
|
|
/s/ RICHARD J. STATUTO
Richard J. Statuto
|
|
Director
|
|
August 22, 2017
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/s/ ELLEN C. WOLF
Ellen C. Wolf
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Director
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August 22, 2017
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Exhibit
No.
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Description
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2.1
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Stock Purchase Agreement, dated July 31, 2015, by and among Premier Healthcare Solutions, Inc., Premier, Inc., CECity.com, Inc., the shareholders thereof, certain related guarantors, and representative of the shareholders of CECity.com, Inc. (Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on August 4, 2015)
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2.2
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Membership Interest Purchase Agreement, dated as of November 25, 2016 by and among Premier Supply Chain Improvement, Inc., GNYHA Holdings, LLC, and the guarantors named therein (Incorporated by reference to Exhibit 2.1 to our Current Report on Form 8-K filed on November 28, 2016).
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3.1
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Certificate of Incorporation of Premier, Inc. (Incorporated by reference to Exhibit 3.1 to our Registration Statement on Form S-1 filed on August 26, 2013)
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3.2
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Amended and Restated Bylaws of Premier, Inc., effective as of December 4, 2015 (Incorporated by reference to Exhibit 3.2 to our Current Report on Form 8-K filed on December 4, 2015)
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4.1
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Form of Class A common stock certificate (Incorporated by reference to Exhibit 4.1 to our Registration Statement on Form S-1, Amendment No. 1, filed on September 16, 2013)
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9.1
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Voting Trust Agreement Relating to Shares of Class B common stock of Premier, Inc. entered into as of October 1, 2013 by and among Premier, Inc., Premier Purchasing Partners, L.P., the holders of Class B common stock of Premier, Inc. and Wells Fargo Delaware Trust Company, N.A. (Incorporated by reference to Exhibit 9.1 to our Current Report on Form 8-K filed on October 7, 2013)
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10.1
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Amended and Restated Limited Partnership Agreement of Premier Healthcare Alliance, L.P. entered into as of September 25, 2013 and effective as of October 1, 2013 (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on October 7, 2013)
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10.1.1
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First Amendment to Amended and Restated Limited Partnership Agreement of Premier Healthcare Alliance, L.P. entered into as of January 27, 2014 (Incorporated by reference to Exhibit 10.2 to our Quarterly Report on Form 10-Q filed on November 12, 2014)
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10.2
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Exchange Agreement entered into as of September 25, 2013 and effective as of October 1, 2013 by and among Premier, Inc., Premier Purchasing Partners, L.P. and its limited partners (Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on October 7, 2013)
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10.3
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Tax Receivable Agreement entered into as of September 25, 2013 and effective as of October 1, 2013 by and among Premier, Inc. and the limited partners of Premier Healthcare Alliance, L.P. (Incorporated by reference to Exhibit 10.3 to our Current Report on Form 8-K filed on October 7, 2013)
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10.4
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Registration Rights Agreement entered into as of September 25, 2013 and effective as of October 1, 2013 by and among Premier, Inc. and the limited partners of Premier Healthcare Alliance, L.P. (Incorporated by reference to Exhibit 10.4 to our Current Report on Form 8-K filed on October 7, 2013)
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10.5
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Form of GPO Participation Agreement by and among Premier Purchasing Partners, L.P. and its limited partners (Incorporated by reference to Exhibit 10.2 to our Registration Statement on Form S-1 filed on August 26, 2013)
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10.6
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Premier, Inc. 2013 Equity Incentive Plan, as amended and restated (Incorporated by reference to Exhibit 10.6 to our Annual Report on Form 10-K filed on August 25, 2016)+
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10.6.1
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First Amendment to the Premier, Inc. 2013 Equity Incentive Plan, as amended and restated (effective August 11, 2016) (Incorporated by reference to Exhibit 10.6.1 to our Annual Report on Form 10-K filed on August 25, 2016)+
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10.7
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Form of Performance Share Award Agreement under the Premier, Inc. 2013 Equity Incentive Plan*+
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10.8
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Form of Stock Option Agreement under the Premier, Inc. 2013 Equity Incentive Plan*+
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10.9
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Form of Restricted Stock Unit Agreement under the Premier, Inc. 2013 Equity Incentive Plan*+
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10.10
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Form of Performance-Based Restricted Stock Award Agreement under the Premier, Inc. 2013 Equity Incentive Plan*+
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10.11
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Form of Time-Based Restricted Stock Award Agreement under the Premier, Inc. 2013 Equity Incentive Plan*+
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10.12
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Form of Restricted Stock Unit Agreement for Non-Employee Directors under the Premier, Inc. 2013 Equity Incentive Plan (Incorporated by reference to Exhibit 10.10 to our Registration Statement on Form S-1 filed on August 26, 2013)+
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10.13
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Premier, Inc. Annual Incentive Compensation Plan, amended and restated effective August 11, 2016 (Incorporated by reference to Exhibit 10.14 to our Annual Report on Form 10-K filed on August 25, 2016)+
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10.14
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Senior Executive Employment Agreement dated as of September 13, 2013, by and between Susan D. DeVore and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.22 to our Registration Statement on Form S-1, Amendment No. 1, filed on September 16, 2013)+
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10.15
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Senior Executive Employment Agreement dated as of September 13, 2013, by and between Craig S. McKasson and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.23 to our Registration Statement on Form S-1, Amendment No. 1, filed on September 16, 2013)+
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Exhibit
No.
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Description
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10.16
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Senior Executive Employment Agreement dated as of September 13, 2013 by and between Michael J. Alkire and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.24 to our Registration Statement on Form S-1, Amendment No. 1, filed on September 16, 2013)+
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10.17
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Executive Employment Agreement dated as of September 16, 2013, by and between Durral Gilbert and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.37 to our Registration Statement on Form S-1, Amendment No. 2, filed on September 25, 2013)+
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10.18
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Executive Employment Agreement dated as of September 11, 2013, by and between Kelli Price and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.39 to our Registration Statement on Form S-1, Amendment No. 2, filed on September 25, 2013)+
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10.19
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Executive Employment Agreement dated as of July 1, 2016, by and between Leigh Anderson and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.21 to our Annual Report on Form 10-K filed on August 25, 2016)+
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10.20
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Executive Employment Agreement effective as of July 1, 2016, by and between David Klatsky and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.22 to our Annual Report on Form 10-K filed on August 25, 2016)+
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10.21
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Executive Employment Agreement effective as of July 1, 2017, by and between David A. Hargraves and Premier Healthcare Solutions, Inc.*+
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10.22
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Transition Agreement and Release, dated June 24, 2016, by and between Keith Figlioli and Premier Healthcare Solutions, Inc. (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on June 27, 2016)+
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10.23
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Premier, Inc. Directors' Compensation Policy, adopted 2016 (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed on August 11, 2016)+
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10.24
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Premier, Inc. Form of Director Cash Award Agreement under the Premier, Inc. Directors' Compensation Policy (Incorporated by reference to Exhibit 10.2 to our Current Report on Form 8-K filed on August 11, 2016)+
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10.25
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Form of Indemnification Agreement by and between each director and executive officer and Premier, Inc. (Incorporated by reference to Exhibit 10.29 to our Registration Statement on Form S-1, Amendment No. 1, filed on September 16, 2013)+
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10.26
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Premier, Inc. 2015 Employee Stock Purchase Plan (as amended and restated effective September 25, 2015) (Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed on August 25, 2016)+
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10.27
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Premier Healthcare Solutions, Inc. Deferred Compensation Plan, (as amended and restated effective January 1, 2015) (Incorporated by reference to Exhibit 10.1 to our Quarterly Report on Form 10-Q filed on November 12, 2014)+
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10.28
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Credit Agreement, dated as of June 24, 2014, by and among Premier Healthcare Alliance, L.P., Premier Supply Chain Improvement, Inc. and Premier Healthcare Solutions, Inc., as Co-Borrowers, Premier Services, LLC and certain domestic subsidiaries of Premier Services, LLC, as Guarantors, Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and L/C Issuer, other lenders from time to time party thereto, and Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arrangers and Joint Book Managers (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 25, 2014)
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10.28.1
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First Amendment to Credit Agreement, dated as of June 4, 2015, by and among Premier Healthcare Alliance, L.P., Premier Supply Chain Improvement, Inc. and Premier Healthcare Solutions, Inc., as Co-Borrowers, Premier Services, LLC and certain domestic subsidiaries of Premier Services, LLC, as Guarantors, Wells Fargo Bank, National Association, as Administrative Agent, Swing Line Lender and L/C Issuer, other lenders from time to time party thereto, and Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead Arrangers and Joint Book Managers (Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed June 4, 2015)
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21
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Subsidiaries of the Company*
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23
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Consent of Ernst &Young LLP Independent Registered Public Accounting Firm*
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24
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Power of Attorney (included on the signature page hereof)*
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31.1
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Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
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31.2
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Certification as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
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32.1
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Certification required by 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
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32.2
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Certification required by 18 United States Code Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002‡
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101.INS
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XBRL Instance Document*
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101.SCH
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XBRL Taxonomy Extension Schema Document*
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Exhibit
No.
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Description
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document*
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document*
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document*
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document*
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Participant
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Target Number of
Performance Shares:
Performance Cycle:
July 1, 20__ - June 30, 20__
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Grant Date:
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Participant:
Number of Shares:
Expiration Date:
Grant Date: ______________, 20__
Option Price:
(Closing Price of Shares on Grant Date)
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Vesting Dates:
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1/3rd vested on the day prior to the first anniversary of the Grant Date
2/3rd vested on the day prior to the first anniversary of the Grant Date
Fully vested on the day prior to the first anniversary of the Grant Date
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If:
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Here’s what happens to Your Option:
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You
are a Good Leaver (as defined in Section 3(a))
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Any portion of the Option which would have vested over the twelve months following Termination Date immediately vests upon your termination. You may exercise the vested portion of your Option for up to twelve months after the Termination Date
but no later than the original option expiration date.
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We terminate your employment for Just Cause
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Both the vested and unvested portions of your Option are immediately cancelled.
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You leave the Premier Group other than as a Good Leaver prior to a Change in Control
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Upon the Termination Date the unvested portion of your Option will be forfeited, and you may exercise the vested portion of your Option for up to 90 days from the Termination Date, but no later than the original option expiration date.
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You take an approved personal leave of absence
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For the first six (6) months of an approved personal leave, vesting continues. If the approved leave exceeds six (6) months, vesting is suspended until you return to work and remain actively employed for 30 calendar days, after which time vesting will be restored retroactively. The vested portion of your Option may be exercised during approved leave, but no later than the original option expiration date. If you terminate employment for any reason during the first year of an approved leave, the termination of employment provisions will apply. If the leave exceeds one year, your Option will be cancelled immediately.
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You are on an approved family and medical leave, military leave, or other statutory leave of absence
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Your Option will continue to vest on schedule, and you may exercise the vested portion of your Option during the leave but no later than the original option expiration date.
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You are terminated involuntarily other than for Just Cause or you terminate your employment for Good Reason, in either case, within one (1) year following a Change in Control
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Upon the Termination Date the unvested portion of your Option will vest immediately, and you may exercise the vested portion of your Option for up to twelve months from the Termination Date, but no later than the original option expiration date.
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While employed and at any time during the Restricted Period, you breach the Agreement not to Compete
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In addition to all rights and remedies available to the Company at law and in equity, you will immediately forfeit any of your outstanding rights under this Award Agreement.
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Participant
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Grant Date
: ________ __, 20__
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Number of Award Shares
:
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Vesting Date
: One day prior to the third anniversary of the Grant Date (the “
Vesting Date
”).
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(a)
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In the event that a Participant terminates employment due to being a Good Leaver (as defined below), the Participant shall immediately vest in a portion of the Award equal to the number of Award Shares granted times a fraction, the numerator of which is the number of days of active service elapsed since the Grant Date and the denominator of which is 1,095. A Participant is a “Good Leaver” on account of (i) terminating employment with the Premier Group due to death, Disability or an Approved Retirement (as defined in Section 14 below) or (ii) the termination of the Participant’s employment with the Premier Group Without Cause (as defined in Section 14 below) prior to a Change in Control; and
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(b)
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In the event a member of the Premier Group (or a successor) terminates the Participant’s employment Without Cause or the Participant terminates his employment for Good Reason (as defined in Section 14 below) within the twelve month period commencing upon a Change in Control (as defined in the Plan), the Award shall vest in full.
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If:
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Here’s what happens to Your Award:
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You
are a Good Leaver (as defined in Section 3(a))
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You shall immediately vest in a pro-rata portion of the Award as described in Section 3(a).
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We terminate your employment for Just Cause or you leave the Premier Group other than as a Good Leaver prior to a Change in Control
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Both the vested and unvested portions of your Award are immediately cancelled.
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You take an approved personal leave of absence
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For the first six (6) months of an approved personal leave, vesting continues. If the approved leave exceeds six (6) months, vesting is suspended until you return to work and remain actively employed for 30 calendar days, after which time vesting will be restored retroactively. If you terminate employment for any reason during the first year of an approved leave, the termination of employment provisions will apply. If the leave exceeds one year, your Award will be cancelled immediately.
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You are on an approved family and medical leave, military leave, or other statutory leave of absence
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Your Award will continue to vest on schedule.
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You are terminated involuntarily other than for Just Cause or you terminate your employment for Good Reason, in either case, within one (1) year following a Change in Control
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Upon the Termination Date the unvested portion of your Award will vest immediately.
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While employed and at any time during the Restricted Period, you breach the Agreement not to Compete
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In addition to all rights and remedies available to the Company at law and in equity, you will immediately forfeit any of your outstanding rights under this Award Agreement.
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If:
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Here’s what happens to Your Award:
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You are a Good Leaver (as defined in Section 3(a))
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You shall immediately vest in a pro-rata portion of the Award as described in Section 3(a).
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We terminate your employment for Just Cause or you leave the Premier Group other than as a Good Leaver prior to a Change in Control
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Both the vested and unvested portions of your Award are immediately cancelled.
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You take an approved personal leave of absence
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For the first six (6) months of an approved personal leave, vesting continues. If the approved leave exceeds six (6) months, vesting is suspended until you return to work and remain actively employed for 30 calendar days, after which time vesting will be restored retroactively. If you terminate employment for any reason during the first year of an approved leave, the termination of employment provisions will apply. If the leave exceeds one year, your Award will be cancelled immediately.
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You are on an approved family and medical leave, military leave, or other statutory leave of absence
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Your Award will continue to vest on schedule.
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You are terminated involuntarily other than for Just Cause or you terminate your employment for Good Reason, in either case, within one (1) year following a Change in Control
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Upon the Termination Date the unvested portion of your Award will vest immediately.
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While employed and at any time during the Restricted Period, you breach the Agreement not to Compete
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In addition to all rights and remedies available to the Company at law and in equity, you will immediately forfeit any of your outstanding rights under this Award Agreement.
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1.
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EMPLOYMENT
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2.
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SEVERANCE PROTECTIONS
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(1)
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Registration Statement (Form S-8 No. 333-191484) pertaining to the 2013 Equity Incentive Plan of Premier, Inc.,
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(2)
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Registration Statement (Form S-3 No. 333-199158) of Premier, Inc.,
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(3)
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Registration Statement (Form S-3/ASR No. 333-200136) of Premier, Inc.,
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(4)
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Registration Statement (Form S-8 No. 333-204628) pertaining to the 2015 Employee Stock Purchase Plan of Premier, Inc.;
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1.
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I have reviewed this annual report on Form 10-K of Premier, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Susan D. DeVore
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Susan D. DeVore
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President and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Premier, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/s/ Craig S. McKasson
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Craig S. McKasson
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Senior Vice President and Chief Financial Officer
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1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
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2. The information contained in the Report fairly presents, in all material respects, the financial condition and
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/s/ Susan D. DeVore
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Susan D. DeVore
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President and Chief Executive Officer
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August 22, 2017
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1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
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2. The information contained in the Report fairly presents, in all material respects, the financial condition and
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/s/ Craig S. McKasson
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Craig S. McKasson
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Senior Vice President and Chief Financial Officer
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August 22, 2017
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