Delaware
|
|
35-2477140
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
13034 Ballantyne Corporate Place
Charlotte, North Carolina
|
|
28277
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of Each Class
|
Trading Symbols
|
Name of Each Exchange on Which Registered
|
Class A Common Stock, $0.01 Par Value
|
PINC
|
NASDAQ Global Select Market
|
Large accelerated filer
|
x
|
|
Accelerated filer
|
o
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
o
|
|
|
Page
|
ITEM 1.
|
||
ITEM 1A.
|
||
ITEM 1B.
|
||
ITEM 2.
|
||
ITEM 3.
|
||
ITEM 4.
|
||
PART II
|
||
ITEM 5.
|
||
ITEM 6.
|
||
ITEM 7.
|
||
ITEM 7A.
|
||
ITEM 8.
|
||
ITEM 9.
|
||
ITEM 9A.
|
||
ITEM 9B.
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||
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|
|
|
PART III
|
|
ITEM 10.
|
||
ITEM 11.
|
||
ITEM 12.
|
||
ITEM 13.
|
||
ITEM 14.
|
||
|
PART IV
|
|
ITEM 15.
|
||
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
•
|
competition which could limit our ability to maintain or expand market share within our industry;
|
•
|
consolidation in the healthcare industry;
|
•
|
potential delays recognizing or increasing revenue if the sales cycle or implementation period takes longer than expected;
|
•
|
the terminability of member participation in our group purchasing organization ("GPO") programs with limited or no notice, or the failure of a significant number of members to renew their GPO participation agreements;
|
•
|
the rate at which the markets for our SaaS informatics products and services develop;
|
•
|
the dependency of our members on payments from third-party payers;
|
•
|
our reliance on administrative fees that we receive from GPO suppliers;
|
•
|
our ability to maintain third-party provider and strategic alliances or enter into new alliances;
|
•
|
our ability to timely offer new and innovative products and services;
|
•
|
the portion of revenues we receive from our largest members;
|
•
|
risks and expenses related to future acquisition opportunities and integration of acquisitions;
|
•
|
financial and operational risks associated with investments in or loans to businesses that we do not control, particularly early stage companies;
|
•
|
potential litigation;
|
•
|
our reliance on Internet infrastructure, bandwidth providers, data center providers and other third parties and our own systems for providing services to our users;
|
•
|
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;
|
•
|
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;
|
•
|
our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
|
•
|
our use of "open source" software;
|
•
|
our dependency on contract manufacturing facilities located in various parts of the world;
|
•
|
our ability to attract, hire, integrate and retain key personnel;
|
•
|
adequate protection of our intellectual property and potential claims against our use of the intellectual property of third parties;
|
•
|
potential sales and use tax liability in certain jurisdictions;
|
•
|
changes in tax laws that materially impact our tax rate, income tax expense, cash flows or tax receivable agreement ("TRA") liabilities;
|
•
|
our indebtedness and our ability to obtain additional financing on favorable terms, including our ability to renew or replace our existing long-term credit facility at maturity;
|
•
|
fluctuation of our quarterly cash flows, revenues and results of operations;
|
•
|
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";
|
•
|
our compliance with complex international, federal and state laws governing financial relationships among healthcare providers and the submission of false or fraudulent healthcare claims;
|
•
|
interpretation and enforcement of current or future antitrust laws and regulations;
|
•
|
compliance with complex federal and state privacy, security and breach notification laws;
|
•
|
compliance with current or future laws, rules or regulations adopted by the Food & Drug Administration ("FDA") applicable to our software applications that may be considered medical devices;
|
•
|
our holding company structure and dependence on distributions from Premier Healthcare Alliance, L.P. ("Premier LP");
|
•
|
different interests among our member owners or between us and our member owners;
|
•
|
the ability of our member owners to exercise significant control over us, including through the election of all of our directors;
|
•
|
our ability to comply with the NASDAQ corporate governance guidelines triggered by the loss on our "controlled company" status in a timely manner;
|
•
|
the terms of agreements between us and our member owners;
|
•
|
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 of Premier LP (the "Class B common units") from Premier LP's limited partners;
|
•
|
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;
|
•
|
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;
|
•
|
failure to maintain an effective system of internal controls over financial reporting or an inability to remediate any weaknesses identified and the related costs of remediation;
|
•
|
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;
|
•
|
our lack of current plans to pay cash dividends on our Class A common stock;
|
•
|
the timing and number of shares of Class A common stock re-purchased by the Company pursuant to our current or any future Class A common stock repurchase program;
|
•
|
possible future issuances of common stock, preferred stock, limited partnership units or debt securities and the dilutive effect of such issuances; and
|
•
|
the risk factors discussed under the heading "Risk Factors" in Item 1A herein.
|
•
|
improve the efficiency and effectiveness of the healthcare supply chain;
|
•
|
deliver improvement in cost, quality and safety;
|
•
|
innovate and enable success in emerging healthcare delivery and payment models to manage the health of populations; and
|
•
|
utilize data and analytics to drive increased connectivity, and clinical, financial and operational improvement.
|
|
Year Ended June 30,
|
|
||
|
2019
|
2018
|
2017
|
3 Year Average
|
GPO retention rate (a)
|
97%
|
98%
|
99%
|
98%
|
SaaS institutional renewal rate (b)
|
96%
|
97%
|
95%
|
96%
|
(a)
|
The GPO 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 SaaS institutional 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.
|
(i)
|
as to how we will use and disclose the protected health information within certain allowable parameters established by HIPAA,
|
(ii)
|
that we will implement reasonable and appropriate administrative, organizational, physical and technical safeguards to protect such information from impermissible use or disclosure,
|
(iii)
|
that we will enter into similar agreements with our agents and subcontractors that have access to the information,
|
(iv)
|
that we will report breaches of unsecured protected health information, security incidents and other inappropriate uses or disclosures of the information, and
|
(v)
|
that we will assist the covered entity with certain of its duties under HIPAA.
|
•
|
failing to integrate the operations and personnel of the acquired businesses in an efficient, timely manner;
|
•
|
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;
|
•
|
potential liabilities of or claims against an acquired company or its assets, some of which may not become known until after the acquisition;
|
•
|
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;
|
•
|
an acquired company's general information technology controls or their legacy third-party providers may not be sufficient to prevent unauthorized access or transactions, cyber-attacks or other data security breaches;
|
•
|
managing the potential disruption to our ongoing business;
|
•
|
distracting management focus from our existing core businesses;
|
•
|
encountering difficulties in identifying and acquiring products, technologies, or businesses that will help us execute our business strategy;
|
•
|
entering new markets in which we have little to no experience;
|
•
|
impairing relationships with employees, members, and strategic partners;
|
•
|
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;
|
•
|
unanticipated changes in market or industry practices that adversely impact our strategic and financial expectations of an acquired company, assets or business and require us to write-off or dispose of such acquired company, assets, or business;
|
•
|
the amortization of purchased intangible assets;
|
•
|
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
|
•
|
diluting the share value and voting power of existing stockholders.
|
•
|
damage from fire, power loss, and other natural disasters;
|
•
|
communications failures;
|
•
|
software and hardware errors, failures, and crashes;
|
•
|
security breaches and computer viruses and similar disruptive problems; and
|
•
|
other potential interruptions.
|
•
|
finance unanticipated working capital requirements;
|
•
|
develop or enhance our technological infrastructure and our existing products and services;
|
•
|
fund strategic relationships;
|
•
|
respond to competitive pressures; and
|
•
|
acquire complementary businesses, assets, technologies, products or services.
|
•
|
make it difficult for us to satisfy our obligations, including making interest payments on our other debt obligations;
|
•
|
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;
|
•
|
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;
|
•
|
limit our ability to pursue acquisitions; and
|
•
|
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;
|
•
|
regulatory changes, including changes in healthcare laws;
|
•
|
unforeseen legal expenses, including litigation and settlement costs;
|
•
|
the purchasing and budgeting cycles of our members;
|
•
|
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;
|
•
|
the timing and success of new product and service offerings by us or by our competitors;
|
•
|
member decisions regarding renewal or termination of their contracts, especially those involving our larger member relationships;
|
•
|
the amount and timing of costs related to the maintenance and expansion of our business, operations and infrastructure;
|
•
|
the amount and timing of costs related to the development, adaptation, acquisition, or integration of acquired technologies or businesses;
|
•
|
the financial condition of our current and potential new members; and
|
•
|
general economic and market conditions and conditions specific to the healthcare industry.
|
•
|
register our company and list our FDA-regulated products with the FDA;
|
•
|
obtain pre-market clearance from the FDA based on demonstration of substantial equivalence to a legally marketed device before marketing our regulated products;
|
•
|
obtain FDA approval by demonstrating the safety and effectiveness of the regulated products prior to marketing;
|
•
|
submit to inspections by the FDA; and
|
•
|
comply with various FDA regulations, including the agency's quality system regulation, medical device reporting regulations, requirements for medical device modifications, increased rigor of the secure development life cycle in the development of medical devices and the interoperability of medical devices and electronic health records, 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 in which we qualify as a "controlled company" within the meaning of NASDAQ rules, which qualification ceased on July 31, 2019;
|
•
|
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 662/3% or more of the voting power of all of the outstanding shares of our capital stock entitled to vote.
|
•
|
our Class A common stock;
|
•
|
the NASDAQ Composite stock index ("NASDAQ Composite Index");
|
•
|
a customized peer group of 12 companies selected by us that we believe is better aligned with our company (the "Peer Group"); and
|
•
|
a customized peer group of companies previously used by us (the "Prior Peer Group").
|
Value of Investment as of Stated Date:
|
|
|
|
|
|
|
||||||||||||
Company/Index Name
|
6/30/2014
|
6/30/2015
|
6/30/2016
|
6/30/2017
|
6/30/2018
|
6/30/2019
|
||||||||||||
Premier, Inc. Class A Common Stock (a)
|
$
|
100.00
|
|
$
|
132.62
|
|
$
|
112.76
|
|
$
|
124.14
|
|
$
|
125.45
|
|
$
|
134.86
|
|
NASDAQ Composite Index (a)
|
$
|
100.00
|
|
$
|
114.44
|
|
$
|
112.51
|
|
$
|
144.35
|
|
$
|
178.42
|
|
$
|
192.30
|
|
Prior Peer Group (a)(b)
|
$
|
100.00
|
|
$
|
116.28
|
|
$
|
109.16
|
|
$
|
122.59
|
|
$
|
119.28
|
|
$
|
140.06
|
|
Current Peer Group (a)(b)
|
$
|
100.00
|
|
$
|
119.70
|
|
$
|
107.87
|
|
$
|
117.07
|
|
$
|
104.52
|
|
$
|
121.88
|
|
(a)
|
Assumes $100 invested on June 30, 2014, including reinvestment of dividends. As noted above, we have not paid any cash dividends during the period covered by the graph.
|
(b)
|
As discussed above, excludes Advisory Board Company and athenahealth, Inc. We believe the stock prices of both of these companies during all or a significant portion of our fiscal year 2018 and fiscal year 2019 reflect a trading premium due to market activities unrelated to their ongoing business operations.
|
|
Year ended June 30,
|
||||||||||||||
|
2019 (1, 2)
|
2018 (1)
|
2017 (1, 3)
|
2016 (1, 4)
|
2015 (1, 5)
|
||||||||||
Consolidated Statements of Income Data:
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
$
|
1,066,238
|
|
$
|
958,432
|
|
$
|
822,438
|
|
Cost of revenue
|
$
|
355,630
|
|
$
|
341,997
|
|
$
|
308,713
|
|
$
|
262,338
|
|
$
|
220,622
|
|
Other operating income (6)
|
$
|
—
|
|
$
|
177,174
|
|
$
|
5,447
|
|
$
|
4,818
|
|
$
|
—
|
|
Operating expenses
|
$
|
493,494
|
|
$
|
479,475
|
|
$
|
445,015
|
|
$
|
432,387
|
|
$
|
331,553
|
|
Other (expense) income, net (7)
|
$
|
(375
|
)
|
$
|
(22,826
|
)
|
$
|
213,571
|
|
$
|
18,934
|
|
$
|
5,085
|
|
Net income from continuing operations (1)
|
$
|
334,677
|
|
$
|
258,007
|
|
$
|
449,604
|
|
$
|
236,558
|
|
$
|
237,115
|
|
Loss from discontinued operations, net of tax (1)
|
$
|
(50,598
|
)
|
$
|
(437
|
)
|
$
|
(127
|
)
|
$
|
(1,397
|
)
|
$
|
(2,330
|
)
|
Net income
|
$
|
284,079
|
|
$
|
257,570
|
|
$
|
449,477
|
|
$
|
235,161
|
|
$
|
234,785
|
|
Net income attributable to non-controlling interest (8)
|
$
|
(174,959
|
)
|
$
|
(224,269
|
)
|
$
|
(336,052
|
)
|
$
|
(193,547
|
)
|
$
|
(196,042
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
$
|
(118,064
|
)
|
$
|
157,581
|
|
$
|
(37,176
|
)
|
$
|
776,750
|
|
$
|
(904,035
|
)
|
Net (loss) income attributable to stockholders
|
$
|
(8,944
|
)
|
$
|
190,882
|
|
$
|
76,249
|
|
$
|
818,364
|
|
$
|
(865,292
|
)
|
|
|
|
|
|
|
||||||||||
Per Share Data:
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||||||
Basic
|
59,188
|
|
53,518
|
|
49,654
|
|
42,368
|
|
35,681
|
|
|||||
Diluted
|
60,269
|
|
137,340
|
|
50,374
|
|
145,308
|
|
35,681
|
|
|||||
|
|
|
|
|
|
||||||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|||||||||||
Basic earnings (loss) per share
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.27
|
|
$
|
3.57
|
|
$
|
1.54
|
|
$
|
19.33
|
|
$
|
(24.23
|
)
|
Discontinued operations
|
(0.42
|
)
|
0.00
|
|
0.00
|
|
(0.01
|
)
|
(0.02
|
)
|
|||||
Basic (loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
3.57
|
|
$
|
1.54
|
|
$
|
19.32
|
|
$
|
(24.25
|
)
|
|
|
|
|
|
|
||||||||||
Diluted earnings (loss) per share
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
0.27
|
|
$
|
1.37
|
|
$
|
1.51
|
|
$
|
0.98
|
|
$
|
(24.23
|
)
|
Discontinued operations
|
(0.42
|
)
|
(0.01
|
)
|
0.00
|
|
(0.01
|
)
|
(0.02
|
)
|
|||||
Diluted (loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
1.36
|
|
$
|
1.51
|
|
$
|
0.97
|
|
$
|
(24.25
|
)
|
|
June 30,
|
||||||||||||||
Consolidated Balance Sheets Data:
|
2019
|
2018
|
2017
|
2016
|
2015
|
||||||||||
Cash, cash equivalents and marketable securities, current
|
$
|
141,055
|
|
$
|
152,386
|
|
$
|
156,735
|
|
$
|
248,817
|
|
$
|
387,189
|
|
Working capital (deficit) (9)
|
$
|
156,022
|
|
$
|
(20,264
|
)
|
$
|
(162,775
|
)
|
$
|
136,827
|
|
$
|
275,533
|
|
Property and equipment, net
|
$
|
205,108
|
|
$
|
205,349
|
|
$
|
185,133
|
|
$
|
170,805
|
|
$
|
142,804
|
|
Total assets
|
$
|
2,569,567
|
|
$
|
2,312,216
|
|
$
|
2,507,836
|
|
$
|
1,855,383
|
|
$
|
1,530,191
|
|
Deferred revenue (10)
|
$
|
35,623
|
|
$
|
39,785
|
|
$
|
44,443
|
|
$
|
54,498
|
|
$
|
39,824
|
|
Total liabilities
|
$
|
908,547
|
|
$
|
818,870
|
|
$
|
1,031,506
|
|
$
|
669,614
|
|
$
|
568,461
|
|
Redeemable limited partners' capital (11)
|
$
|
2,523,270
|
|
$
|
2,920,410
|
|
$
|
3,138,583
|
|
$
|
3,137,230
|
|
$
|
4,079,832
|
|
Class A common stock
|
$
|
644
|
|
$
|
575
|
|
$
|
519
|
|
$
|
460
|
|
$
|
377
|
|
Treasury stock, at cost (12)
|
$
|
(87,220
|
)
|
$
|
(150,058
|
)
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Additional paid-in capital
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
Accumulated deficit
|
$
|
(775,674
|
)
|
$
|
(1,277,581
|
)
|
$
|
(1,662,772
|
)
|
$
|
(1,951,878
|
)
|
$
|
(3,118,474
|
)
|
Total stockholders' deficit
|
$
|
(862,250
|
)
|
$
|
(1,427,064
|
)
|
$
|
(1,662,253
|
)
|
$
|
(1,951,461
|
)
|
$
|
(3,118,102
|
)
|
(1)
|
Results have been retrospectively adjusted to reflect the specialty pharmacy business as a discontinued operation for all periods presented. See Note 4 - Discontinued Operations and Exit Activities to the audited consolidated financial statements of this Annual Report for further information.
|
(2)
|
Amounts include the results of operations of Stanson Health, Inc. ("Stanson") from November 9, 2018, the date of acquisition of all of the outstanding common stock of Stanson. See Note 3 - Business Acquisitions to the audited consolidated financial statements of this Annual Report for further information related to the acquisition completed during the year ended June 30, 2019.
|
(3)
|
Amounts include the results of operations of (i) 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, retrospectively adjusted to be reflected as a discontinued operation, and (ii) Innovatix and Essensa from December 2, 2016, the date of acquisition of all the membership interests of Innovatix and Essensa. 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 (expense), net in the Consolidated Statements of Income. 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.
|
(4)
|
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, all the outstanding shares of CECity, and all the membership interests of HCI, respectively. 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.
|
(5)
|
Amounts include the results of operations of TheraDoc, Inc. ("TheraDoc") and Aperek, Inc. ("Aperek"), from September 1, 2014 and August 29, 2014, respectively, the dates of acquisition of all the outstanding shares of common stock of TheraDoc and Aperek, respectively. 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. 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.
|
(6)
|
Other operating income includes the adjustment to TRA liabilities. Changes in estimated TRA liabilities that are the result of a change in tax accounting method, including the impacts of the TCJA, are recorded as a component of other operating income in the Consolidated Statements of Income. Changes in estimated TRA liabilities that are related to new basis changes as a result of the exchange of Class B common units for a like number of shares of Class A common stock or as a result of departed member owners are recorded as an increase or decrease to additional paid-in capital in the Consolidated Statements of Stockholders' Deficit.
|
(7)
|
Other (expense) 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 (expense), net includes equity in net
|
(8)
|
Net income attributable to non-controlling interest includes net income attributable to non-controlling interest in Premier LP and, for the year ended June 30, 2015, net income attributable to non-controlling interest in S2S Global. 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 51% at June 30, 2019, and may change each period as member ownership changes.
|
(9)
|
Working capital represents the excess (deficit) of total current assets less total current liabilities attributable to continuing operations. At June 30, 2017 and 2018, working capital deficit includes the $228.0 million and $100.3 million current portion of long-term debt, respectively, which is recorded within current liabilities.
|
(10)
|
Deferred revenue is primarily related to deferred subscription fees and deferred consulting 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. We are required to repurchase a limited partner's interest in Premier LP upon 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 our control. We record 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 accumulated deficit.
|
(12)
|
Pursuant to our previously announced fiscal year 2018 and fiscal year 2019 stock repurchase programs, we purchased approximately 6.4 million and 6.7 million shares of Class A common stock, respectively, at an average price of $31.16 and $37.38 per share, respectively, for a total purchase price of $200.0 million during fiscal year 2018 and $250.0 million during fiscal year 2019. We used 1.6 million and 9.0 million treasury shares to settle the exchange of Class B common units during the years ended June 30, 2018 and 2019, respectively.
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Net revenue
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
$
|
1,066,238
|
|
Net income from continuing operations
|
$
|
334,677
|
|
$
|
258,007
|
|
$
|
449,604
|
|
Non-GAAP Adjusted EBITDA
|
$
|
561,042
|
|
$
|
539,520
|
|
$
|
498,244
|
|
|
Year Ended June 30,
|
|
Change
|
|
% of Net Revenue
|
|||||||||||||||||||||||
Net revenue:
|
2019
|
2018
|
2017
|
|
2019
|
|
2018
|
|
2019
|
2018
|
2017
|
|||||||||||||||||
Supply Chain Services
|
$
|
855,180
|
|
$
|
823,978
|
|
$
|
712,855
|
|
|
$
|
31,202
|
|
4
|
%
|
|
$
|
111,123
|
|
16
|
%
|
|
70
|
%
|
70
|
%
|
67
|
%
|
Performance Services
|
362,458
|
|
360,679
|
|
353,383
|
|
|
1,779
|
|
—
|
%
|
|
7,296
|
|
2
|
%
|
|
30
|
%
|
30
|
%
|
33
|
%
|
|||||
Net revenue
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
$
|
1,066,238
|
|
|
$
|
32,981
|
|
3
|
%
|
|
$
|
118,419
|
|
11
|
%
|
|
100
|
%
|
100
|
%
|
100
|
%
|
|
Year Ended June 30,
|
||||||||||||||||||||||
|
2019
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||
|
As presented
|
|
Previous revenue standard
|
|
Previous revenue standard
|
|
Previous revenue standard
|
||||||||||||||||
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net administrative fees
|
$
|
662,462
|
|
55
|
%
|
|
$
|
654,312
|
|
55%
|
|
$
|
643,839
|
|
54%
|
|
$
|
557,468
|
|
52%
|
|||
Other services and support
|
371,019
|
|
30
|
%
|
|
358,467
|
|
30%
|
|
368,491
|
|
31%
|
|
360,406
|
|
34%
|
|||||||
Services
|
1,033,481
|
|
85
|
%
|
|
1,012,779
|
|
85%
|
|
1,012,330
|
|
85%
|
|
917,874
|
|
86%
|
|||||||
Products
|
184,157
|
|
15
|
%
|
|
180,233
|
|
15%
|
|
172,327
|
|
15%
|
|
148,364
|
|
14%
|
|||||||
Net revenue
|
1,217,638
|
|
100
|
%
|
|
1,193,012
|
|
100%
|
|
1,184,657
|
|
100%
|
|
1,066,238
|
|
100%
|
|||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Services
|
182,375
|
|
15
|
%
|
|
189,144
|
|
15%
|
|
187,363
|
|
16%
|
|
182,186
|
|
17%
|
|||||||
Products
|
173,255
|
|
14
|
%
|
|
173,255
|
|
15%
|
|
154,634
|
|
13%
|
|
126,527
|
|
12%
|
|||||||
Cost of revenue
|
355,630
|
|
29
|
%
|
|
362,399
|
|
30%
|
|
341,997
|
|
29%
|
|
308,713
|
|
29%
|
|||||||
Gross profit
|
862,008
|
|
71
|
%
|
|
830,613
|
|
70%
|
|
842,660
|
|
71%
|
|
757,525
|
|
71%
|
|||||||
Other operating income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
—
|
%
|
|
—
|
|
—%
|
|
177,174
|
|
15%
|
|
5,447
|
|
1%
|
|||||||
Other operating income
|
—
|
|
—
|
%
|
|
—
|
|
—%
|
|
177,174
|
|
15%
|
|
5,447
|
|
1%
|
|||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Selling, general and administrative
|
438,985
|
|
37
|
%
|
|
444,944
|
|
38%
|
|
425,251
|
|
36%
|
|
395,786
|
|
37%
|
|||||||
Research and development
|
1,224
|
|
—
|
%
|
|
1,224
|
|
—%
|
|
1,423
|
|
—%
|
|
3,107
|
|
—%
|
|||||||
Amortization of purchased intangible assets
|
53,285
|
|
4
|
%
|
|
53,285
|
|
4%
|
|
52,801
|
|
4%
|
|
46,122
|
|
4%
|
|||||||
Operating expenses
|
493,494
|
|
41
|
%
|
|
499,453
|
|
42%
|
|
479,475
|
|
40%
|
|
445,015
|
|
42%
|
|||||||
Operating income
|
368,514
|
|
30
|
%
|
|
331,160
|
|
28%
|
|
540,359
|
|
46%
|
|
317,957
|
|
30%
|
|||||||
Other (expense) income, net
|
(375
|
)
|
—
|
%
|
|
(375
|
)
|
—%
|
|
(22,826
|
)
|
(2)%
|
|
213,571
|
|
20%
|
|||||||
Income before income taxes
|
368,139
|
|
30
|
%
|
|
330,785
|
|
28%
|
|
517,533
|
|
44%
|
|
531,528
|
|
50%
|
|||||||
Income tax expense
|
33,462
|
|
3
|
%
|
|
31,590
|
|
3%
|
|
259,526
|
|
22%
|
|
81,924
|
|
8%
|
|||||||
Net income from continuing operations
|
334,677
|
|
27
|
%
|
|
299,195
|
|
25%
|
|
258,007
|
|
22%
|
|
449,604
|
|
42%
|
|||||||
Loss from discontinued operations, net of tax
|
(50,598
|
)
|
(4
|
)%
|
|
(50,598
|
)
|
(4)%
|
|
(437
|
)
|
—%
|
|
(127
|
)
|
—%
|
|||||||
Net income
|
284,079
|
|
23
|
%
|
|
248,597
|
|
21%
|
|
257,570
|
|
22%
|
|
449,477
|
|
42%
|
|||||||
Net income from continuing operations attributable to non-controlling interest in Premier LP
|
(200,907
|
)
|
(16
|
)%
|
|
(178,480
|
)
|
(15)%
|
|
(224,548
|
)
|
(19)%
|
|
(336,128
|
)
|
(32)%
|
|||||||
Net income from discontinued operations attributable to non-controlling interest in Premier LP
|
25,948
|
|
2
|
%
|
|
25,958
|
|
2
|
%
|
|
279
|
|
—
|
%
|
|
76
|
|
—
|
%
|
||||
Net income attributable to non-controlling interest in Premier LP
|
(174,959
|
)
|
(14
|
)%
|
|
(152,522
|
)
|
(13
|
)%
|
|
(224,269
|
)
|
(19
|
)%
|
|
(336,052
|
)
|
(32
|
)%
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
(118,064
|
)
|
nm
|
|
|
(134,109
|
)
|
nm
|
|
|
157,581
|
|
nm
|
|
|
(37,176
|
)
|
nm
|
|
||||
Net income attributable to stockholders
|
$
|
(8,944
|
)
|
nm
|
|
|
$
|
(38,034
|
)
|
nm
|
|
|
$
|
190,882
|
|
nm
|
|
|
$
|
76,249
|
|
nm
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
||||||||||||||||||||||
|
2019
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||
|
As presented
|
|
Previous revenue standard
|
|
Previous revenue standard
|
|
Previous revenue standard
|
||||||||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic
|
59,188
|
|
|
|
59,188
|
|
|
|
53,518
|
|
|
|
49,654
|
|
|
||||||||
Diluted
|
60,269
|
|
|
|
59,188
|
|
|
|
137,340
|
|
|
|
50,374
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
$
|
0.27
|
|
|
|
$
|
(0.22
|
)
|
|
|
$
|
3.57
|
|
|
|
$
|
1.54
|
|
|
||||
Discontinued operations
|
$
|
(0.42
|
)
|
|
|
$
|
(0.42
|
)
|
|
|
0.00
|
|
|
|
0.00
|
|
|
||||||
Basic (loss) earnings per share attributable to stockholders
|
(0.15
|
)
|
|
|
(0.64
|
)
|
|
|
$
|
3.57
|
|
|
|
$
|
1.54
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations
|
$
|
0.27
|
|
|
|
$
|
(0.22
|
)
|
|
|
$
|
1.37
|
|
|
|
$
|
1.51
|
|
|
||||
Discontinued operations
|
$
|
(0.42
|
)
|
|
|
$
|
(0.42
|
)
|
|
|
(0.01
|
)
|
|
|
0.00
|
|
|
||||||
Diluted (loss) earnings per share attributable to stockholders
|
(0.15
|
)
|
|
|
(0.64
|
)
|
|
|
$
|
1.36
|
|
|
|
$
|
1.51
|
|
|
|
Year Ended June 30,
|
||||||||||||||||||
|
2019
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||
|
As presented
|
|
Previous revenue standard
|
|
Previous revenue standard
|
|
Previous revenue standard
|
||||||||||||
Certain Non-GAAP Financial Data:
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
||||||||
Adjusted EBITDA
|
$
|
561,042
|
|
46%
|
|
$
|
523,688
|
|
44%
|
|
$
|
539,520
|
|
46%
|
|
$
|
498,244
|
|
47%
|
Adjusted Fully Distributed Net Income
|
$
|
349,052
|
|
29%
|
|
$
|
321,410
|
|
27%
|
|
$
|
315,411
|
|
27%
|
|
$
|
265,871
|
|
25%
|
Adjusted Fully Distributed Earnings Per Share
|
$
|
2.66
|
|
nm
|
|
$
|
2.45
|
|
nm
|
|
$
|
2.30
|
|
nm
|
|
$
|
1.88
|
|
nm
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard
|
||||||||||
Net income from continuing operations
|
$
|
334,677
|
|
$
|
299,195
|
|
$
|
258,007
|
|
$
|
449,604
|
|
Interest and investment loss, net
|
2,471
|
|
2,471
|
|
5,300
|
|
4,512
|
|
||||
Income tax expense
|
33,462
|
|
31,590
|
|
259,526
|
|
81,924
|
|
||||
Depreciation and amortization
|
86,879
|
|
86,879
|
|
70,264
|
|
57,878
|
|
||||
Amortization of purchased intangible assets
|
53,285
|
|
53,285
|
|
52,801
|
|
46,122
|
|
||||
EBITDA
|
510,774
|
|
473,420
|
|
645,898
|
|
640,040
|
|
||||
Stock-based compensation
|
29,396
|
|
29,396
|
|
29,235
|
|
26,487
|
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard
|
||||||||||
Acquisition and disposition related expenses
|
13,154
|
|
13,154
|
|
8,335
|
|
15,790
|
|
||||
Strategic and financial restructuring expenses
|
7
|
|
7
|
|
2,512
|
|
31
|
|
||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
—
|
|
(177,174
|
)
|
(5,447
|
)
|
||||
ERP implementation expenses
|
872
|
|
872
|
|
1,000
|
|
2,028
|
|
||||
Acquisition related adjustment - revenue
|
141
|
|
141
|
|
300
|
|
18,049
|
|
||||
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
—
|
|
(205,146
|
)
|
||||
Loss on disposal of long-lived assets
|
6,681
|
|
6,681
|
|
2,376
|
|
2,422
|
|
||||
Loss on FFF put and call rights
|
17
|
|
17
|
|
22,036
|
|
3,935
|
|
||||
Impairment on investments
|
—
|
|
—
|
|
5,002
|
|
—
|
|
||||
Other expense
|
—
|
|
—
|
|
—
|
|
55
|
|
||||
Adjusted EBITDA
|
$
|
561,042
|
|
$
|
523,688
|
|
$
|
539,520
|
|
$
|
498,244
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
$
|
368,139
|
|
$
|
330,785
|
|
$
|
517,533
|
|
$
|
531,528
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
—
|
|
(205,146
|
)
|
||||
Equity in net income of unconsolidated affiliates
|
(5,658
|
)
|
(5,658
|
)
|
(1,174
|
)
|
(14,745
|
)
|
||||
Interest and investment loss, net
|
2,471
|
|
2,471
|
|
5,300
|
|
4,512
|
|
||||
Loss on disposal of long-lived assets
|
6,681
|
|
6,681
|
|
2,376
|
|
2,422
|
|
||||
Other (income) expense
|
(3,119
|
)
|
(3,119
|
)
|
16,324
|
|
(614
|
)
|
||||
Operating income
|
368,514
|
|
331,160
|
|
540,359
|
|
317,957
|
|
||||
Depreciation and amortization
|
86,879
|
|
86,879
|
|
70,264
|
|
57,878
|
|
||||
Amortization of purchased intangible assets
|
53,285
|
|
53,285
|
|
52,801
|
|
46,122
|
|
||||
Stock-based compensation
|
29,396
|
|
29,396
|
|
29,235
|
|
26,487
|
|
||||
Acquisition and disposition related expenses
|
13,154
|
|
13,154
|
|
8,335
|
|
15,790
|
|
||||
Strategic and financial restructuring expenses
|
7
|
|
7
|
|
2,512
|
|
31
|
|
||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
—
|
|
(177,174
|
)
|
(5,447
|
)
|
||||
ERP implementation expenses
|
872
|
|
872
|
|
1,000
|
|
2,028
|
|
||||
Acquisition related adjustment - revenue
|
141
|
|
141
|
|
300
|
|
18,049
|
|
||||
Equity in net income of unconsolidated affiliates
|
5,658
|
|
5,658
|
|
1,174
|
|
14,745
|
|
||||
Impairment on investments
|
—
|
|
—
|
|
5,002
|
|
—
|
|
||||
Deferred compensation plan income
|
2,546
|
|
2,546
|
|
3,960
|
|
4,020
|
|
||||
Other income
|
590
|
|
590
|
|
1,752
|
|
584
|
|
||||
Adjusted EBITDA
|
$
|
561,042
|
|
$
|
523,688
|
|
$
|
539,520
|
|
$
|
498,244
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA:
|
|
|
|
|
||||||||
Supply Chain Services
|
$
|
548,029
|
|
$
|
538,537
|
|
$
|
531,851
|
|
$
|
490,416
|
|
Performance Services
|
129,147
|
|
101,285
|
|
123,429
|
|
121,090
|
|
||||
Corporate
|
(116,134
|
)
|
(116,134
|
)
|
(115,760
|
)
|
(113,262
|
)
|
||||
Adjusted EBITDA
|
$
|
561,042
|
|
$
|
523,688
|
|
$
|
539,520
|
|
$
|
498,244
|
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard
|
||||||||||
Net (loss) income attributable to stockholders
|
$
|
(8,944
|
)
|
$
|
(38,034
|
)
|
$
|
190,882
|
|
$
|
76,249
|
|
Adjustment of redeemable limited partners' capital to redemption amount
|
118,064
|
|
134,109
|
|
(157,581
|
)
|
37,176
|
|
||||
Net income attributable to non-controlling interest in Premier LP
|
174,959
|
|
152,522
|
|
224,269
|
|
336,052
|
|
||||
Loss from discontinued operations, net of tax
|
50,598
|
|
50,598
|
|
437
|
|
127
|
|
||||
Income tax expense
|
33,462
|
|
31,590
|
|
259,526
|
|
81,924
|
|
||||
Amortization of purchased intangible assets
|
53,285
|
|
53,285
|
|
52,801
|
|
46,122
|
|
||||
Stock-based compensation
|
29,396
|
|
29,396
|
|
29,235
|
|
26,487
|
|
||||
Acquisition and disposition related expenses
|
13,154
|
|
13,154
|
|
8,335
|
|
15,790
|
|
||||
Strategic and financial restructuring expenses
|
7
|
|
7
|
|
2,512
|
|
31
|
|
||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
—
|
|
(177,174
|
)
|
(5,447
|
)
|
||||
ERP implementation expenses
|
872
|
|
872
|
|
1,000
|
|
2,028
|
|
||||
Acquisition related adjustment - revenue
|
141
|
|
141
|
|
300
|
|
18,049
|
|
||||
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
—
|
|
(205,146
|
)
|
||||
Loss on disposal of long-lived assets
|
6,681
|
|
6,681
|
|
2,376
|
|
2,422
|
|
||||
Loss on FFF put and call rights
|
17
|
|
17
|
|
22,036
|
|
3,935
|
|
||||
Impairment on investments
|
—
|
|
—
|
|
5,002
|
|
—
|
|
||||
Other expense
|
—
|
|
—
|
|
—
|
|
55
|
|
||||
Non-GAAP adjusted fully distributed income before income taxes
|
471,692
|
|
434,338
|
|
463,956
|
|
435,854
|
|
||||
Income tax expense on fully distributed income before income taxes (a)
|
122,640
|
|
112,928
|
|
148,545
|
|
169,983
|
|
||||
Non-GAAP Adjusted Fully Distributed Net Income
|
$
|
349,052
|
|
$
|
321,410
|
|
$
|
315,411
|
|
$
|
265,871
|
|
|
|
|
|
|
||||||||
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 earnings per share and diluted earnings (loss) per share
|
59,188
|
|
59,188
|
|
53,518
|
|
49,654
|
|
||||
Potentially dilutive shares
|
1,081
|
|
1,081
|
|
822
|
|
720
|
|
||||
Conversion of Class B common units
|
70,827
|
|
70,827
|
|
83,000
|
|
90,816
|
|
||||
Weighted average fully distributed shares outstanding - diluted
|
131,096
|
|
131,096
|
|
137,340
|
|
141,190
|
|
(a)
|
Reflects income tax expense at an estimated effective income tax rate of 26% of Non-GAAP adjusted fully distributed net income before income taxes for the year ended June 30, 2019, 32% of Non-GAAP adjusted fully distributed income before income taxes for the year ended June 30, 2018, and 39% of Non-GAAP adjusted fully distributed income before income taxes for the year ended June 30, 2017.
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard
|
||||||||||
(Loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
(0.64
|
)
|
$
|
3.57
|
|
$
|
1.54
|
|
Adjustment of redeemable limited partners' capital to redemption amount
|
1.99
|
|
2.27
|
|
(2.94
|
)
|
0.75
|
|
||||
Net income attributable to non-controlling interest in Premier LP
|
2.96
|
|
2.58
|
|
4.19
|
|
6.77
|
|
||||
Loss from discontinued operations, net of tax
|
0.85
|
|
0.85
|
|
0.01
|
|
—
|
|
||||
Income tax expense
|
0.57
|
|
0.53
|
|
4.85
|
|
1.65
|
|
||||
Amortization of purchased intangible assets
|
0.90
|
|
0.90
|
|
0.99
|
|
0.93
|
|
||||
Stock-based compensation
|
0.50
|
|
0.50
|
|
0.55
|
|
0.53
|
|
||||
Acquisition and disposition related expenses
|
0.22
|
|
0.22
|
|
0.16
|
|
0.32
|
|
||||
Strategic and financial restructuring expenses
|
—
|
|
—
|
|
0.05
|
|
—
|
|
||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
—
|
|
(3.31
|
)
|
(0.11
|
)
|
||||
ERP implementation expenses
|
0.01
|
|
0.01
|
|
0.02
|
|
0.04
|
|
||||
Acquisition related adjustment - revenue
|
—
|
|
—
|
|
0.01
|
|
0.36
|
|
||||
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
—
|
|
(4.13
|
)
|
||||
Loss on disposal of long-lived assets
|
0.11
|
|
0.11
|
|
0.04
|
|
0.05
|
|
||||
Loss on FFF put and call rights
|
—
|
|
—
|
|
0.41
|
|
0.08
|
|
||||
Impairment on investments
|
—
|
|
—
|
|
0.09
|
|
—
|
|
||||
Impact of corporation taxes (a)
|
(2.07
|
)
|
(1.90
|
)
|
(2.78
|
)
|
(3.43
|
)
|
||||
Impact of dilutive shares (b)
|
(3.23
|
)
|
(2.98
|
)
|
(3.61
|
)
|
(3.47
|
)
|
||||
Non-GAAP Adjusted Fully Distributed Earnings Per Share
|
$
|
2.66
|
|
$
|
2.45
|
|
$
|
2.30
|
|
$
|
1.88
|
|
(a)
|
Reflects income tax expense at an estimated effective income tax rate of 26% of Non-GAAP adjusted fully distributed net income before income taxes for the year ended June 30, 2019, 32% of Non-GAAP adjusted fully distributed income before income taxes for the year ended June 30, 2018, and 39% of Non-GAAP adjusted fully distributed income before income taxes for the year ended June 30, 2017.
|
(b)
|
Reflects impact of dilutive shares, primarily attributable to the assumed conversion of all Class B common units for Class A common stock.
|
|
Year Ended June 30,
|
|
Change
|
|||||||||||||||||||||
|
2019
|
2019
|
2018
|
2017
|
|
2019 (as presented) vs 2018 (previous revenue standard)
|
|
2018 vs 2017 (previous revenue standard)
|
||||||||||||||||
Supply Chain Services
|
As presented
|
Previous revenue standard
|
|
|
||||||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Net administrative fees
|
$
|
662,462
|
|
$
|
654,312
|
|
$
|
643,839
|
|
$
|
557,468
|
|
|
$
|
18,623
|
|
3
|
%
|
|
$
|
86,371
|
|
15
|
%
|
Other services and support
|
8,561
|
|
20,003
|
|
7,812
|
|
7,023
|
|
|
749
|
|
10
|
%
|
|
789
|
|
11
|
%
|
||||||
Services
|
671,023
|
|
674,315
|
|
651,651
|
|
564,491
|
|
|
19,372
|
|
3
|
%
|
|
87,160
|
|
15
|
%
|
||||||
Products
|
184,157
|
|
180,233
|
|
172,327
|
|
148,364
|
|
|
11,830
|
|
7
|
%
|
|
23,963
|
|
16
|
%
|
||||||
Net revenue
|
855,180
|
|
854,548
|
|
823,978
|
|
712,855
|
|
|
31,202
|
|
4
|
%
|
|
111,123
|
|
16
|
%
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Services
|
228
|
|
5,803
|
|
4,844
|
|
4,863
|
|
|
(4,616
|
)
|
(95
|
)%
|
|
(19
|
)
|
—
|
%
|
||||||
Products
|
173,255
|
|
173,255
|
|
154,634
|
|
126,527
|
|
|
18,621
|
|
12
|
%
|
|
28,107
|
|
22
|
%
|
||||||
Cost of revenue
|
173,483
|
|
179,058
|
|
159,478
|
|
131,390
|
|
|
14,005
|
|
9
|
%
|
|
28,088
|
|
21
|
%
|
||||||
Gross profit
|
681,697
|
|
675,490
|
|
664,500
|
|
581,465
|
|
|
17,197
|
|
3
|
%
|
|
83,035
|
|
14
|
%
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative
|
147,665
|
|
150,950
|
|
148,901
|
|
141,077
|
|
|
(1,236
|
)
|
(1
|
)%
|
|
7,824
|
|
6
|
%
|
||||||
Amortization of purchased intangible assets
|
17,516
|
|
17,516
|
|
17,469
|
|
10,267
|
|
|
47
|
|
—
|
%
|
|
7,202
|
|
70
|
%
|
||||||
Operating expenses
|
165,181
|
|
168,466
|
|
166,370
|
|
151,344
|
|
|
(1,189
|
)
|
(1
|
)%
|
|
15,026
|
|
10
|
%
|
||||||
Operating income
|
$
|
516,516
|
|
$
|
507,024
|
|
$
|
498,130
|
|
$
|
430,121
|
|
|
$
|
18,386
|
|
4
|
%
|
|
$
|
68,009
|
|
16
|
%
|
Depreciation and amortization
|
1,102
|
|
1,102
|
|
570
|
|
731
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of purchased intangible assets
|
17,516
|
|
17,516
|
|
17,469
|
|
10,267
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition and disposition related expenses
|
7,946
|
|
7,946
|
|
8,606
|
|
17,191
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition related adjustment - revenue
|
—
|
|
—
|
|
—
|
|
17,440
|
|
|
|
|
|
|
|
|
|
||||||||
Equity in net income of unconsolidated affiliates
|
4,943
|
|
4,943
|
|
1,904
|
|
14,684
|
|
|
|
|
|
|
|
|
|
||||||||
Impairment on investments
|
—
|
|
—
|
|
4,002
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense)
|
6
|
|
6
|
|
1,170
|
|
(18
|
)
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Segment Adjusted EBITDA
|
$
|
548,029
|
|
$
|
538,537
|
|
$
|
531,851
|
|
$
|
490,416
|
|
|
$
|
16,178
|
|
3
|
%
|
|
$
|
41,435
|
|
8
|
%
|
|
Year Ended June 30,
|
|
Change
|
|||||||||||||||||||||
|
2019
|
2019
|
2018
|
2017
|
|
2019 (as presented) vs 2018 (previous revenue standard)
|
|
2018 vs 2017 (previous revenue standard)
|
||||||||||||||||
Performance Services
|
As presented
|
Previous revenue standard
|
|
|
||||||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Other services and support
|
$
|
362,458
|
|
$
|
338,464
|
|
$
|
360,679
|
|
$
|
353,383
|
|
|
$
|
1,779
|
|
—
|
%
|
|
$
|
7,296
|
|
2
|
%
|
Net revenue
|
362,458
|
|
338,464
|
|
360,679
|
|
353,383
|
|
|
1,779
|
|
—
|
%
|
|
7,296
|
|
2
|
%
|
||||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Services
|
182,147
|
|
183,341
|
|
182,519
|
|
177,323
|
|
|
(372
|
)
|
—
|
%
|
|
5,196
|
|
3
|
%
|
||||||
Cost of revenue
|
182,147
|
|
183,341
|
|
182,519
|
|
177,323
|
|
|
(372
|
)
|
—
|
%
|
|
5,196
|
|
3
|
%
|
||||||
Gross profit
|
180,311
|
|
155,123
|
|
178,160
|
|
176,060
|
|
|
2,151
|
|
1
|
%
|
|
2,100
|
|
1
|
%
|
||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, general and administrative
|
130,827
|
|
133,501
|
|
114,088
|
|
101,405
|
|
|
16,739
|
|
15
|
%
|
|
12,683
|
|
13
|
%
|
||||||
Research and development
|
1,213
|
|
1,213
|
|
1,418
|
|
2,278
|
|
|
(205
|
)
|
(14
|
)%
|
|
(860
|
)
|
(38
|
)%
|
||||||
Amortization of purchased intangible assets
|
35,769
|
|
35,769
|
|
35,331
|
|
35,855
|
|
|
438
|
|
1
|
%
|
|
(524
|
)
|
(1
|
)%
|
||||||
Operating expenses
|
167,809
|
|
170,483
|
|
150,837
|
|
139,538
|
|
|
16,972
|
|
11
|
%
|
|
11,299
|
|
8
|
%
|
||||||
Operating income
|
$
|
12,502
|
|
$
|
(15,360
|
)
|
$
|
27,323
|
|
$
|
36,522
|
|
|
$
|
(14,821
|
)
|
(54
|
)%
|
|
$
|
(9,199
|
)
|
(25
|
)%
|
Depreciation and amortization
|
74,812
|
|
74,812
|
|
60,476
|
|
49,444
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of purchased intangible assets
|
35,769
|
|
35,769
|
|
35,331
|
|
35,855
|
|
|
|
|
|
|
|
|
|
||||||||
Acquisition and disposition related expenses
|
5,208
|
|
5,208
|
|
(271
|
)
|
(1,401
|
)
|
|
|
|
|
|
|
|
|
||||||||
Acquisition related adjustment - revenue
|
34
|
|
34
|
|
300
|
|
609
|
|
|
|
|
|
|
|
|
|
||||||||
Equity in net income (loss) of unconsolidated affiliates
|
715
|
|
715
|
|
(730
|
)
|
61
|
|
|
|
|
|
|
|
|
|
||||||||
Impairment on investments
|
—
|
|
—
|
|
1,000
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Other expense
|
107
|
|
107
|
|
—
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP Segment Adjusted EBITDA
|
$
|
129,147
|
|
$
|
101,285
|
|
$
|
123,429
|
|
$
|
121,090
|
|
|
$
|
5,718
|
|
5
|
%
|
|
$
|
2,339
|
|
2
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||
Corporate
|
2019
|
2018
|
2017
|
|
2019 vs. 2018
|
|
2018 vs. 2017
|
||||||||||||||
Other operating income:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Remeasurement of tax receivable agreement liabilities
|
$
|
—
|
|
$
|
177,174
|
|
$
|
5,447
|
|
|
$
|
(177,174
|
)
|
(100
|
)%
|
|
$
|
171,727
|
|
nm
|
|
Other operating income
|
—
|
|
177,174
|
|
5,447
|
|
|
(177,174
|
)
|
(100
|
)%
|
|
171,727
|
|
nm
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Selling, general and administrative
|
160,493
|
|
162,262
|
|
153,304
|
|
|
(1,769
|
)
|
(1
|
)%
|
|
8,958
|
|
6
|
%
|
|||||
Research and development
|
11
|
|
6
|
|
829
|
|
|
5
|
|
83
|
%
|
|
(823
|
)
|
(99
|
)%
|
|||||
Operating expenses
|
160,504
|
|
162,268
|
|
154,133
|
|
|
(1,764
|
)
|
(1
|
)%
|
|
8,135
|
|
5
|
%
|
|||||
Operating (loss) income
|
$
|
(160,504
|
)
|
$
|
14,906
|
|
$
|
(148,686
|
)
|
|
$
|
(175,410
|
)
|
nm
|
|
|
$
|
163,592
|
|
(110
|
)%
|
Depreciation and amortization
|
10,965
|
|
9,217
|
|
7,703
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Stock-based compensation
|
29,396
|
|
29,235
|
|
26,487
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Strategic and financial restructuring expenses
|
7
|
|
2,512
|
|
31
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
(177,174
|
)
|
(5,447
|
)
|
|
|
|
|
|
|
|
|
|
|
|||||
ERP implementation expenses
|
872
|
|
1,000
|
|
2,028
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Deferred compensation plan income
|
2,546
|
|
3,960
|
|
4,020
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Other income
|
584
|
|
584
|
|
602
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Non-GAAP Adjusted EBITDA
|
$
|
(116,134
|
)
|
$
|
(115,760
|
)
|
$
|
(113,262
|
)
|
|
$
|
(374
|
)
|
—
|
%
|
|
$
|
(2,498
|
)
|
2
|
%
|
|
Year Ended June 30,
|
|||||
|
2019
|
2018
|
||||
Net cash provided by (used in):
|
|
|
||||
Operating activities from continuing operations
|
$
|
511,938
|
|
$
|
505,258
|
|
Investing activities from continuing operations
|
(129,274
|
)
|
(92,425
|
)
|
||
Financing activities
|
(387,200
|
)
|
(419,375
|
)
|
||
Operating and investing activities from discontinued operations
|
(6,795
|
)
|
2,193
|
|
||
Net decrease in cash and cash equivalents
|
$
|
(11,331
|
)
|
$
|
(4,349
|
)
|
|
Year Ended June 30,
|
|||||
|
2019
|
2018
|
||||
Net cash provided by operating activities from continuing operations
|
$
|
511,938
|
|
$
|
505,258
|
|
Purchases of property and equipment
|
(93,385
|
)
|
(92,425
|
)
|
||
Distributions to limited partners of Premier LP
|
(57,825
|
)
|
(79,255
|
)
|
||
Payments to limited partners of Premier LP related to tax receivable agreements (a)
|
(17,975
|
)
|
—
|
|
||
Non-GAAP Free Cash Flow
|
$
|
342,753
|
|
$
|
333,578
|
|
(a)
|
The timing of TRA payments shifted to July from June due to the change in our federal tax filing deadline, which was extended one month to April from March. As such, we did not make a TRA payment in fiscal year 2018.
|
|
|
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)
|
$
|
344,112
|
|
$
|
17,505
|
|
$
|
39,734
|
|
$
|
43,637
|
|
$
|
243,236
|
|
Operating lease obligations (b)
|
78,825
|
|
12,130
|
|
23,007
|
|
23,043
|
|
20,645
|
|
|||||
Notes payable (c)
|
8,611
|
|
2,608
|
|
3,788
|
|
2,215
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
431,548
|
|
$
|
32,243
|
|
$
|
66,529
|
|
$
|
68,895
|
|
$
|
263,881
|
|
(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 $8.6 million owed to departed member owners, payable over five years from the respective departure dates.
|
|
Revenue Recognition - Measuring Variable Consideration
|
Description of the Matter
|
At July 1, 2018 the Company adopted the new guidance in ASC 606, Revenue from Contracts with Customers, and related ASC 340, Other Assets and Deferred Costs using the modified retrospective approach. As described in Notes 2 and 7 to the consolidated financial statements, net administrative fees revenue is recognized based on an estimate of member purchases under the Company's group purchasing organization (GPO) supplier contracts. During 2019 net administrative fees revenue represented approximately $662 million of the Company's total $1,218 million of net revenue.
Auditing the Company's measurement of variable consideration under the GPO supplier contracts is especially challenging because the calculation involves analytics based on historical trends and utilizes subjective management assumptions about member purchase activity. For example, the estimated member purchase activity reflects management's assumptions about the volume and timing of purchase activity and the types of products and services purchased. Changes in those assumptions can have a material effect on the amount of variable consideration recognized.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company's process to estimate variable consideration. For example, we tested controls over management's review of the significant inputs and assumptions used to estimate member purchase activity.
Our audit procedures included, among others, evaluating the methodology used, analyzing the significant assumptions discussed above, and testing the accuracy and completeness of the underlying data used in management's calculation. This included testing inputs to the calculation by comparing historical information to source documents and evaluating the historical accuracy of management's estimates by comparing such estimates to subsequent actual results.
|
|
Valuation of Goodwill
|
Description of the Matter
|
At June 30, 2019, the Company's goodwill was $881 million. As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment annually at the reporting unit level on April 1 unless an interim test is required due to the presence of indicators that goodwill may be impaired. The Company's goodwill is initially assigned to its reporting units as of the acquisition date.
Auditing management's annual goodwill impairment test was complex and highly judgmental due to the significant estimation required to determine the fair value of the reporting units. Fair value is estimated by management based on an income approach using a discounted cash flow model which is corroborated with an implied fair value of the reporting units using a market-based approach. In particular, the fair value estimates are sensitive to significant assumptions such as the operating performance projections, terminal growth rate, industry factors, discount rates, and the use of comparable market data in the fair value model, which are affected by expected future market or economic conditions.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company's goodwill impairment testing process. For example, we tested controls over management's review of the significant inputs and assumptions discussed above used in determining the reporting unit fair values.
To test the estimated fair value of the Company's reporting units, our audit procedures included, among others, assessing the methodologies used and testing the significant assumptions discussed above, including the completeness and accuracy of the underlying data used by the Company. For example, we compared the significant assumptions used by management to current industry and economic trends, historical financial results and other relevant factors. We performed sensitivity analyses of significant assumptions to evaluate the change in the fair value of the reporting units resulting from changes in the inputs and assumptions. We also assessed the historical accuracy of management's projections. In addition, we involved our valuation specialists to assist in our evaluation of the significant assumptions described above used to develop the fair value estimates. We evaluated the reconciliation of the estimated aggregate fair value of the reporting units to the market capitalization of the Company.
|
|
Investment in FFF Enterprises
|
Description of the Matter
|
As disclosed in Notes 5 and 6 to the consolidated financial statements, and pursuant to the terms of a shareholders' agreement, during the year ended June 30, 2017, the Company acquired 49% of the outstanding stock of FFF Enterprises, Inc. ("FFF") for consideration of $81.1 million. The majority shareholder of FFF holds a put right that provides such shareholder the right to require the Company to purchase (i) up to 50% of the majority shareholder's interest in FFF, which is exercisable beginning on July 26, 2020, and (ii) all, or a portion of, the majority shareholder's remaining interest in FFF on or after December 31, 2020. In addition, the Company has a call right that provides it the option to purchase the remaining interest in FFF after (i) a Key Man Event (as defined in Note 6) has occurred, or (ii) or January 30, 2021.
Auditing the fair value determination of the put and call rights was challenging because of the use of significant inputs and assumptions, including the revenue growth rates and projected profitability of FFF, volatility in the S&P 500 index, and expected timing of a Key Man Event, in determining the fair values. Changes in these inputs and assumptions could have a significant impact on the fair values of the put and call rights. Also, applying audit procedures to address the estimation uncertainty involved a high degree of auditor judgment.
|
How We Addressed the Matter in Our Audit
|
We obtained an understanding, evaluated the design and tested the operating effectiveness of the relevant controls over management's calculation of fair value. For example, we tested controls over management's review of the inputs and assumptions discussed above used in determining the fair values.
To test the estimated fair values of the put and call rights, our audit procedures included, among others, assessing the methodologies used and testing the significant assumptions discussed above, including the completeness and accuracy of the underlying data used by the Company. For example, we compared the revenue growth and profitability assumptions to past performance of FFF and other guideline companies within the same industry. We also assessed the Company's application of the terms of the shareholders' agreement in its valuation methodology and agreed the terms to the inputs used in the fair value calculations. In addition, we involved a valuation specialist to assist in our evaluation of the significant assumptions discussed above.
|
PREMIER, INC.
|
||||||
Consolidated Balance Sheets
|
||||||
(In thousands, except per share data)
|
||||||
|
|
|
||||
|
June 30, 2019
|
June 30, 2018
|
||||
Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
141,055
|
|
$
|
152,386
|
|
Accounts receivable (net of $4,327 and $1,841 allowance for doubtful accounts, respectively)
|
189,298
|
|
186,768
|
|
||
Contract assets
|
205,509
|
|
—
|
|
||
Inventory
|
51,032
|
|
52,635
|
|
||
Prepaid expenses and other current assets
|
23,765
|
|
22,437
|
|
||
Current assets of discontinued operations
|
3,385
|
|
14,392
|
|
||
Total current assets
|
614,044
|
|
428,618
|
|
||
Property and equipment (net of $359,235 and $293,564 accumulated depreciation, respectively)
|
205,108
|
|
205,349
|
|
||
Intangible assets (net of $197,858 and $144,574 accumulated amortization, respectively)
|
270,722
|
|
300,386
|
|
||
Goodwill
|
880,709
|
|
843,170
|
|
||
Deferred income tax assets
|
422,014
|
|
305,624
|
|
||
Deferred compensation plan assets
|
45,466
|
|
44,577
|
|
||
Investments in unconsolidated affiliates
|
99,636
|
|
94,053
|
|
||
Other assets
|
31,868
|
|
3,892
|
|
||
Long-term assets of discontinued operations
|
—
|
|
86,547
|
|
||
Total assets
|
$
|
2,569,567
|
|
$
|
2,312,216
|
|
|
|
|
||||
Liabilities, redeemable limited partners' capital and stockholders' deficit
|
|
|
||||
Accounts payable
|
$
|
54,540
|
|
$
|
47,954
|
|
Accrued expenses
|
82,476
|
|
60,137
|
|
||
Revenue share obligations
|
137,359
|
|
78,999
|
|
||
Limited partners' distribution payable
|
13,202
|
|
15,465
|
|
||
Accrued compensation and benefits
|
70,799
|
|
63,326
|
|
||
Deferred revenue
|
35,623
|
|
39,785
|
|
||
Current portion of tax receivable agreements
|
17,505
|
|
17,925
|
|
||
Current portion of long-term debt
|
27,608
|
|
100,250
|
|
||
Other liabilities
|
7,113
|
|
7,732
|
|
||
Current liabilities of discontinued operations
|
11,797
|
|
17,309
|
|
||
Total current liabilities
|
458,022
|
|
448,882
|
|
||
Long-term debt, less current portion
|
6,003
|
|
6,962
|
|
||
Tax receivable agreements, less current portion
|
326,607
|
|
237,176
|
|
||
Deferred compensation plan obligations
|
45,466
|
|
44,577
|
|
||
Deferred tax liabilities
|
4,766
|
|
17,569
|
|
||
Other liabilities
|
67,683
|
|
63,384
|
|
||
Long-term liabilities of discontinued operations
|
—
|
|
320
|
|
||
Total liabilities
|
908,547
|
|
818,870
|
|
PREMIER, INC.
|
||||||
Consolidated Balance Sheets
|
||||||
(In thousands, except per share data)
|
||||||
|
|
|
||||
|
June 30, 2019
|
June 30, 2018
|
||||
Redeemable limited partners' capital
|
2,523,270
|
|
2,920,410
|
|
||
Stockholders' deficit:
|
|
|
||||
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 64,357,305 shares issued and 61,938,157 shares outstanding at June 30, 2019 and 57,530,733 shares issued and 52,761,177 shares outstanding at June 30, 2018
|
644
|
|
575
|
|
||
Class B common stock, $0.000001 par value, 600,000,000 shares authorized; 64,548,044 and 80,335,701 shares issued and outstanding at June 30, 2019 and June 30, 2018, respectively
|
—
|
|
—
|
|
||
Treasury stock, at cost; 2,419,148 and 4,769,556 shares at June 30, 2019 and June 30, 2018, respectively
|
(87,220
|
)
|
(150,058
|
)
|
||
Additional paid-in-capital
|
—
|
|
—
|
|
||
Accumulated deficit
|
(775,674
|
)
|
(1,277,581
|
)
|
||
Total stockholders' deficit
|
(862,250
|
)
|
(1,427,064
|
)
|
||
Total liabilities, redeemable limited partners' capital and stockholders' deficit
|
$
|
2,569,567
|
|
$
|
2,312,216
|
|
PREMIER, INC.
|
|||||||||
Consolidated Statements of Income
|
|||||||||
(In thousands, except per share data)
|
|||||||||
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Net revenue:
|
|
|
|
||||||
Net administrative fees
|
$
|
662,462
|
|
$
|
643,839
|
|
$
|
557,468
|
|
Other services and support
|
371,019
|
|
368,491
|
|
360,406
|
|
|||
Services
|
1,033,481
|
|
1,012,330
|
|
917,874
|
|
|||
Products
|
184,157
|
|
172,327
|
|
148,364
|
|
|||
Net revenue
|
1,217,638
|
|
1,184,657
|
|
1,066,238
|
|
|||
Cost of revenue:
|
|
|
|
||||||
Services
|
182,375
|
|
187,363
|
|
182,186
|
|
|||
Products
|
173,255
|
|
154,634
|
|
126,527
|
|
|||
Cost of revenue
|
355,630
|
|
341,997
|
|
308,713
|
|
|||
Gross profit
|
862,008
|
|
842,660
|
|
757,525
|
|
|||
Other operating income:
|
|
|
|
||||||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
177,174
|
|
5,447
|
|
|||
Other operating income
|
—
|
|
177,174
|
|
5,447
|
|
|||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
438,985
|
|
425,251
|
|
395,786
|
|
|||
Research and development
|
1,224
|
|
1,423
|
|
3,107
|
|
|||
Amortization of purchased intangible assets
|
53,285
|
|
52,801
|
|
46,122
|
|
|||
Operating expenses
|
493,494
|
|
479,475
|
|
445,015
|
|
|||
Operating income
|
368,514
|
|
540,359
|
|
317,957
|
|
|||
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
205,146
|
|
|||
Equity in net income of unconsolidated affiliates
|
5,658
|
|
1,174
|
|
14,745
|
|
|||
Interest and investment loss, net
|
(2,471
|
)
|
(5,300
|
)
|
(4,512
|
)
|
|||
Loss on disposal of long-lived assets
|
(6,681
|
)
|
(2,376
|
)
|
(2,422
|
)
|
|||
Other income (expense)
|
3,119
|
|
(16,324
|
)
|
614
|
|
|||
Other (expense) income, net
|
(375
|
)
|
(22,826
|
)
|
213,571
|
|
|||
Income before income taxes
|
368,139
|
|
517,533
|
|
531,528
|
|
|||
Income tax expense
|
33,462
|
|
259,526
|
|
81,924
|
|
|||
Net income from continuing operations
|
334,677
|
|
258,007
|
|
449,604
|
|
|||
Loss from discontinued operations, net of tax
|
(50,598
|
)
|
(437
|
)
|
(127
|
)
|
|||
Net income
|
284,079
|
|
257,570
|
|
449,477
|
|
|||
Net income from continuing operations attributable to non-controlling interest in Premier LP
|
(200,907
|
)
|
(224,548
|
)
|
(336,128
|
)
|
|||
Net loss from discontinued operations attributable to non-controlling interest in Premier LP
|
25,948
|
|
279
|
|
76
|
|
|||
Net income attributable to non-controlling interest in Premier LP
|
(174,959
|
)
|
(224,269
|
)
|
(336,052
|
)
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
(118,064
|
)
|
157,581
|
|
(37,176
|
)
|
|||
Net (loss) income attributable to stockholders
|
$
|
(8,944
|
)
|
$
|
190,882
|
|
$
|
76,249
|
|
|
|
|
|
PREMIER, INC.
|
|||||||||
Consolidated Statements of Income
|
|||||||||
(In thousands, except per share data)
|
|||||||||
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Weighted average shares outstanding:
|
|
|
|
||||||
Basic
|
59,188
|
|
53,518
|
|
49,654
|
|
|||
Diluted
|
60,269
|
|
137,340
|
|
50,374
|
|
|||
|
|
|
|
||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
|
|
||||||
Continuing operations
|
$
|
0.27
|
|
$
|
3.57
|
|
$
|
1.54
|
|
Discontinued operations
|
(0.42
|
)
|
0.00
|
|
0.00
|
|
|||
Basic (loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
3.57
|
|
$
|
1.54
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share
|
|
|
|
||||||
Continuing operations
|
$
|
0.27
|
|
$
|
1.37
|
|
$
|
1.51
|
|
Discontinued operations
|
(0.42
|
)
|
(0.01
|
)
|
0.00
|
|
|||
Diluted (loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
1.36
|
|
$
|
1.51
|
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Net income
|
$
|
284,079
|
|
$
|
257,570
|
|
$
|
449,477
|
|
Net unrealized gain on marketable securities
|
—
|
|
—
|
|
128
|
|
|||
Total comprehensive income
|
284,079
|
|
257,570
|
|
449,605
|
|
|||
Less: comprehensive income attributable to non-controlling interest
|
(174,959
|
)
|
(224,269
|
)
|
(336,137
|
)
|
|||
Comprehensive income attributable to stockholders
|
$
|
109,120
|
|
$
|
33,301
|
|
$
|
113,468
|
|
PREMIER, INC.
|
|||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Deficit
|
|||||||||||||||||||||||||||
(In thousands)
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Class A
Common Stock
|
Class B
Common Stock
|
Treasury Stock
|
Additional Paid-In Capital
|
Accumulated Deficit
|
Accumulated Other Comprehensive Income (Loss)
|
Total Stockholders' Deficit
|
||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||
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 partners
|
—
|
|
—
|
|
(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
|
)
|
Exchange of Class B units for Class A common stock by member owners
|
6,531
|
|
49
|
|
(6,531
|
)
|
—
|
|
(1,649
|
)
|
50,071
|
|
166,001
|
|
—
|
|
—
|
|
216,121
|
|
|||||||
Redemption of limited partners
|
—
|
|
—
|
|
(432
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Decrease in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,766
|
)
|
—
|
|
—
|
|
(5,766
|
)
|
|||||||
Issuance of Class A common stock under equity incentive plan
|
623
|
|
6
|
|
—
|
|
—
|
|
—
|
|
—
|
|
8,013
|
|
—
|
|
—
|
|
8,019
|
|
|||||||
Issuance of Class A common stock under employee stock purchase plan
|
82
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,618
|
|
—
|
|
—
|
|
2,619
|
|
|||||||
Treasury stock
|
(6,418
|
)
|
—
|
|
—
|
|
—
|
|
6,418
|
|
(200,129
|
)
|
—
|
|
—
|
|
—
|
|
(200,129
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29,408
|
|
—
|
|
—
|
|
29,408
|
|
|||||||
Repurchase of vested restricted units for employee tax-withholding
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(5,965
|
)
|
—
|
|
—
|
|
(5,965
|
)
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
257,570
|
|
—
|
|
257,570
|
|
|||||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(224,269
|
)
|
—
|
|
(224,269
|
)
|
|||||||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(194,309
|
)
|
351,890
|
|
—
|
|
157,581
|
|
|||||||
Balance at June 30, 2018
|
52,761
|
|
$
|
575
|
|
80,336
|
|
$
|
—
|
|
4,769
|
|
$
|
(150,058
|
)
|
$
|
—
|
|
$
|
(1,277,581
|
)
|
$
|
—
|
|
$
|
(1,427,064
|
)
|
PREMIER, INC.
|
|||||||||||||||||||||||||||
Consolidated Statements of Stockholders' Deficit
|
|||||||||||||||||||||||||||
(In thousands)
|
|||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Class A
Common Stock
|
Class B
Common Stock
|
Treasury Stock
|
Additional Paid-In Capital
|
Accumulated Deficit
|
Accumulated Other Comprehensive Income (Loss)
|
Total Stockholders' Deficit
|
||||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
|||||||||||||||||||||
Balance at July 1, 2018
|
52,761
|
|
$
|
575
|
|
80,336
|
|
$
|
—
|
|
4,769
|
|
$
|
(150,058
|
)
|
$
|
—
|
|
$
|
(1,277,581
|
)
|
$
|
—
|
|
$
|
(1,427,064
|
)
|
Impact of change in accounting principle
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
121,945
|
|
—
|
|
121,945
|
|
|||||||
Adjusted balance at July 1, 2018
|
52,761
|
|
$
|
575
|
|
80,336
|
|
$
|
—
|
|
4,769
|
|
$
|
(150,058
|
)
|
$
|
—
|
|
$
|
(1,155,636
|
)
|
$
|
—
|
|
$
|
(1,305,119
|
)
|
Exchange of Class B units for Class A common stock by member owners
|
14,764
|
|
57
|
|
(14,764
|
)
|
—
|
|
(9,039
|
)
|
312,971
|
|
320,753
|
|
—
|
|
—
|
|
633,781
|
|
|||||||
Redemption of limited partners
|
—
|
|
—
|
|
(1,024
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
24,533
|
|
—
|
|
—
|
|
24,533
|
|
|||||||
Issuance of Class A common stock under equity incentive plan
|
1,027
|
|
11
|
|
—
|
|
—
|
|
—
|
|
—
|
|
19,418
|
|
—
|
|
—
|
|
19,429
|
|
|||||||
Issuance of Class A common stock under employee stock purchase plan
|
75
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,857
|
|
—
|
|
—
|
|
2,858
|
|
|||||||
Treasury stock
|
(6,689
|
)
|
—
|
|
—
|
|
—
|
|
6,689
|
|
(250,133
|
)
|
—
|
|
—
|
|
—
|
|
(250,133
|
)
|
|||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
29,478
|
|
—
|
|
—
|
|
29,478
|
|
|||||||
Repurchase of vested restricted units for employee tax-withholding
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,133
|
)
|
—
|
|
—
|
|
(8,133
|
)
|
|||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
284,079
|
|
—
|
|
284,079
|
|
|||||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(174,959
|
)
|
—
|
|
(174,959
|
)
|
|||||||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(388,906
|
)
|
270,842
|
|
—
|
|
(118,064
|
)
|
|||||||
Balance at June 30, 2019
|
61,938
|
|
$
|
644
|
|
64,548
|
|
$
|
—
|
|
2,419
|
|
$
|
(87,220
|
)
|
$
|
—
|
|
$
|
(775,674
|
)
|
$
|
—
|
|
$
|
(862,250
|
)
|
PREMIER, INC.
|
|||||||||
Consolidated Statements of Cash Flows
|
|||||||||
(In thousands)
|
|||||||||
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
284,079
|
|
$
|
257,570
|
|
$
|
449,477
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Loss from discontinued operations, net of tax
|
50,598
|
|
437
|
|
127
|
|
|||
Deferred income taxes
|
11,878
|
|
233,282
|
|
60,672
|
|
|||
Depreciation and amortization
|
140,164
|
|
123,065
|
|
104,000
|
|
|||
Equity in net income of unconsolidated affiliates
|
(5,658
|
)
|
(1,174
|
)
|
(14,745
|
)
|
|||
Stock-based compensation
|
29,001
|
|
28,844
|
|
26,097
|
|
|||
Remeasurement of tax receivable agreement liabilities
|
—
|
|
(177,174
|
)
|
(5,447
|
)
|
|||
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
(205,146
|
)
|
|||
Loss on disposal of long-lived assets
|
6,681
|
|
2,376
|
|
2,422
|
|
|||
Loss on FFF put and call rights
|
17
|
|
22,036
|
|
3,935
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable, prepaid expenses and other current assets
|
(6,699
|
)
|
(13,590
|
)
|
2,726
|
|
|||
Contract assets
|
(36,549
|
)
|
—
|
|
—
|
|
|||
Inventories
|
1,603
|
|
(12,849
|
)
|
(17,604
|
)
|
|||
Other assets
|
(6,004
|
)
|
(725
|
)
|
(3,303
|
)
|
|||
Accounts payable, deferred revenue and other current liabilities
|
17,920
|
|
20,138
|
|
(12,204
|
)
|
|||
Accrued expenses
|
22,202
|
|
10,028
|
|
(7,899
|
)
|
|||
Long-term liabilities
|
(57
|
)
|
6,787
|
|
(860
|
)
|
|||
Other operating activities
|
2,762
|
|
6,207
|
|
(946
|
)
|
|||
Net cash provided by operating activities from continuing operations
|
511,938
|
|
505,258
|
|
381,302
|
|
|||
Net cash (used in) provided by operating activities from discontinued operations
|
(6,599
|
)
|
2,448
|
|
10,945
|
|
|||
Net cash provided by operating activities
|
$
|
505,339
|
|
$
|
507,706
|
|
$
|
392,247
|
|
Investing activities
|
|
|
|
||||||
Purchases of property and equipment
|
$
|
(93,385
|
)
|
$
|
(92,425
|
)
|
$
|
(71,372
|
)
|
Acquisition of Stanson Health, Inc., net of cash acquired
|
(50,854
|
)
|
—
|
|
—
|
|
|||
Acquisition of Innovatix, LLC and Essensa Ventures, LLC, net of cash acquired
|
—
|
|
—
|
|
(319,717
|
)
|
|||
Acquisition of Acro Pharmaceuticals, net of cash acquired
|
—
|
|
—
|
|
(62,892
|
)
|
|||
Proceeds from sale of assets
|
22,731
|
|
—
|
|
—
|
|
|||
Investments in convertible notes
|
(11,500
|
)
|
—
|
|
—
|
|
|||
Cancellation of convertible note
|
3,624
|
|
—
|
|
—
|
|
|||
Investment in unconsolidated affiliates
|
—
|
|
—
|
|
(65,660
|
)
|
|||
Proceeds from sale of marketable securities
|
—
|
|
—
|
|
48,013
|
|
|||
Distributions received on equity investments in unconsolidated affiliates
|
—
|
|
—
|
|
6,550
|
|
|||
Other investing activities
|
110
|
|
—
|
|
25
|
|
|||
Net cash used in investing activities from continuing operations
|
(129,274
|
)
|
(92,425
|
)
|
(465,053
|
)
|
|||
Net cash used in investing activities from discontinued operations
|
(196
|
)
|
(255
|
)
|
—
|
|
|||
Net cash used in investing activities
|
$
|
(129,470
|
)
|
$
|
(92,680
|
)
|
$
|
(465,053
|
)
|
PREMIER, INC.
|
|||||||||
Consolidated Statements of Cash Flows
|
|||||||||
(In thousands)
|
|||||||||
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Financing activities
|
|
|
|
||||||
Proceeds from credit facility
|
$
|
50,000
|
|
$
|
30,000
|
|
$
|
425,000
|
|
Payments on credit facility
|
(125,000
|
)
|
(150,000
|
)
|
(205,000
|
)
|
|||
Payments made on notes payable
|
(676
|
)
|
(8,002
|
)
|
(5,486
|
)
|
|||
Redemption of limited partner of Premier LP
|
256
|
|
—
|
|
—
|
|
|||
Proceeds from exercise of stock options under equity incentive plans
|
19,429
|
|
8,019
|
|
9,168
|
|
|||
Proceeds from issuance of Class A common stock under stock purchase plan
|
2,858
|
|
2,619
|
|
2,483
|
|
|||
Repurchase of vested restricted units for employee tax-withholding
|
(8,134
|
)
|
(5,965
|
)
|
(17,717
|
)
|
|||
Settlement of exchange of Class B units by member owners
|
—
|
|
—
|
|
(123,331
|
)
|
|||
Distributions to limited partners of Premier LP
|
(57,825
|
)
|
(79,255
|
)
|
(90,434
|
)
|
|||
Payments to limited partners of Premier LP related to tax receivable agreements
|
(17,975
|
)
|
—
|
|
(13,959
|
)
|
|||
Repurchase of Class A common stock (held as treasury stock)
|
(250,133
|
)
|
(200,129
|
)
|
—
|
|
|||
Earn-out liability payment to GNYHA Holdings
|
—
|
|
(16,662
|
)
|
—
|
|
|||
Net cash used in financing activities
|
$
|
(387,200
|
)
|
$
|
(419,375
|
)
|
$
|
(19,276
|
)
|
Net decrease in cash and cash equivalents
|
(11,331
|
)
|
(4,349
|
)
|
(92,082
|
)
|
|||
Cash and cash equivalents at beginning of year
|
152,386
|
|
156,735
|
|
248,817
|
|
|||
Cash and cash equivalents at end of year
|
$
|
141,055
|
|
$
|
152,386
|
|
$
|
156,735
|
|
|
|
|
|
||||||
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
|
$
|
118,064
|
|
$
|
(157,581
|
)
|
$
|
37,176
|
|
Reduction in redeemable limited partners' capital, with offsetting increase in common stock and additional paid-in capital related to quarterly exchange by member owners
|
$
|
633,783
|
|
$
|
216,122
|
|
$
|
157,371
|
|
Reduction in redeemable limited partners' capital for limited partners' distribution payable
|
$
|
13,202
|
|
$
|
15,465
|
|
$
|
24,951
|
|
Distributions utilized to reduce subscriptions, notes, interest and accounts receivable from member owners
|
$
|
1,001
|
|
$
|
1,972
|
|
$
|
2,049
|
|
Net increase in deferred tax assets related to quarterly exchanges by member owners and other adjustments
|
$
|
131,519
|
|
$
|
86,788
|
|
$
|
114,605
|
|
Net increase in tax receivable agreement liabilities related to quarterly exchanges by member owners and other adjustments
|
$
|
106,986
|
|
$
|
92,554
|
|
$
|
79,463
|
|
Net increase (decrease) in additional paid-in capital related to quarterly exchanges by member owners and other adjustments
|
$
|
24,533
|
|
$
|
(5,766
|
)
|
$
|
35,141
|
|
Net increase in investments in unconsolidated affiliates related to deferred taxes attributed to the net fair value of FFF enterprises, Inc. put and call rights, with offsetting increases in deferred tax assets and deferred tax liabilities
|
$
|
—
|
|
$
|
—
|
|
$
|
15,460
|
|
Payable to member owners incurred upon repurchase of ownership interest
|
$
|
1,819
|
|
$
|
942
|
|
$
|
416
|
|
|
June 30, 2019
|
June 30, 2018
|
||||
Assets
|
|
|
||||
Current
|
$
|
603,390
|
|
$
|
393,863
|
|
Noncurrent
|
1,536,685
|
|
1,577,974
|
|
||
Total assets of Premier LP
|
$
|
2,140,075
|
|
$
|
1,971,837
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Current
|
$
|
517,616
|
|
$
|
457,172
|
|
Noncurrent
|
118,032
|
|
128,793
|
|
||
Total liabilities of Premier LP
|
$
|
635,648
|
|
$
|
585,965
|
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Premier LP net income
|
$
|
322,865
|
|
$
|
371,131
|
|
$
|
522,310
|
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Net cash provided by (used in):
|
|
|
|
||||||
Operating activities
|
$
|
533,024
|
|
$
|
534,643
|
|
$
|
439,746
|
|
Investing activities
|
(129,469
|
)
|
(92,680
|
)
|
(465,053
|
)
|
|||
Financing activities
|
(390,086
|
)
|
(457,673
|
)
|
(51,290
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
13,469
|
|
(15,710
|
)
|
(76,597
|
)
|
|||
Cash and cash equivalents at beginning of year
|
117,741
|
|
133,451
|
|
210,048
|
|
|||
Cash and cash equivalents at end of year
|
$
|
131,210
|
|
$
|
117,741
|
|
$
|
133,451
|
|
|
Impact of change in accounting principle
|
||||||||
|
June 30, 2018
As presented
|
Impact of new revenue standard
|
July 1, 2018
New revenue standard
|
||||||
Assets
|
|
|
|
||||||
Accounts receivable (net of $1,841 allowance for doubtful accounts)
|
$
|
185,874
|
|
$
|
(5,421
|
)
|
$
|
180,453
|
|
Contract assets
|
$
|
—
|
|
$
|
168,960
|
|
$
|
168,960
|
|
Total current assets
|
$
|
428,618
|
|
$
|
163,539
|
|
$
|
592,157
|
|
Deferred income tax assets
|
$
|
305,624
|
|
$
|
(7,106
|
)
|
$
|
298,518
|
|
Other assets
|
$
|
3,892
|
|
$
|
15,390
|
|
$
|
19,282
|
|
Total assets
|
$
|
2,312,216
|
|
$
|
171,823
|
|
$
|
2,484,039
|
|
|
|
|
|
||||||
Liabilities, redeemable limited partners' capital and stockholders' deficit
|
|
|
|
||||||
Revenue share obligations
|
$
|
78,999
|
|
$
|
43,880
|
|
$
|
122,879
|
|
Deferred revenue
|
$
|
39,785
|
|
$
|
2,401
|
|
$
|
42,186
|
|
Total current liabilities
|
$
|
448,882
|
|
$
|
46,281
|
|
$
|
495,163
|
|
Deferred tax liabilities
|
$
|
17,569
|
|
$
|
3,597
|
|
$
|
21,166
|
|
Total liabilities
|
$
|
818,870
|
|
$
|
49,878
|
|
$
|
868,748
|
|
|
|
|
|
||||||
Accumulated deficit
|
$
|
(1,277,581
|
)
|
$
|
121,945
|
|
$
|
(1,155,636
|
)
|
Total stockholders' deficit
|
$
|
(1,427,064
|
)
|
$
|
121,945
|
|
$
|
(1,305,119
|
)
|
Total liabilities, redeemable limited partners' capital and stockholders' deficit
|
$
|
2,312,216
|
|
$
|
171,823
|
|
$
|
2,484,039
|
|
|
Impact of change in accounting principle
|
||||||||
June 30, 2019
|
As presented
|
Impact of new revenue standard
|
Previous revenue standard
|
||||||
Assets
|
|
|
|
||||||
Accounts receivable (net of $4,327 allowance for doubtful accounts)
|
$
|
189,298
|
|
$
|
(11,664
|
)
|
$
|
200,962
|
|
Contract assets
|
$
|
205,509
|
|
$
|
205,509
|
|
$
|
—
|
|
Prepaid expenses and other current assets
|
$
|
23,765
|
|
$
|
(5,110
|
)
|
$
|
28,875
|
|
Total current assets
|
$
|
614,044
|
|
$
|
188,735
|
|
$
|
425,309
|
|
Goodwill
|
$
|
880,709
|
|
$
|
(98
|
)
|
$
|
880,807
|
|
Deferred income tax assets
|
$
|
422,014
|
|
$
|
(10,348
|
)
|
$
|
432,362
|
|
Other assets
|
$
|
31,868
|
|
$
|
16,754
|
|
$
|
15,114
|
|
Total assets
|
$
|
2,569,567
|
|
$
|
195,043
|
|
$
|
2,374,524
|
|
|
|
|
|
||||||
Liabilities, redeemable limited partners' capital and stockholders' deficit
|
|
|
|
||||||
Revenue share obligations
|
$
|
137,359
|
|
$
|
51,087
|
|
$
|
86,272
|
|
Limited partners' distribution payable
|
$
|
13,202
|
|
$
|
6,391
|
|
$
|
6,811
|
|
Deferred revenue
|
$
|
35,623
|
|
$
|
(10,489
|
)
|
$
|
46,112
|
|
Total current liabilities
|
$
|
458,022
|
|
$
|
46,989
|
|
$
|
411,033
|
|
Deferred tax liabilities
|
$
|
4,766
|
|
$
|
(2,981
|
)
|
$
|
7,747
|
|
Total liabilities
|
$
|
908,547
|
|
$
|
44,008
|
|
$
|
864,539
|
|
|
|
|
|
||||||
Accumulated deficit
|
$
|
(775,674
|
)
|
$
|
151,035
|
|
$
|
(926,709
|
)
|
Total stockholders' deficit
|
$
|
(862,250
|
)
|
$
|
151,035
|
|
$
|
(1,013,285
|
)
|
Total liabilities, redeemable limited partners' capital and stockholders' deficit
|
$
|
2,569,567
|
|
$
|
195,043
|
|
$
|
2,374,524
|
|
|
Impact of change in accounting principle
|
||||||||
|
Year Ended June 30, 2019
|
||||||||
|
As presented
|
Impact of new revenue standard
|
Previous revenue standard
|
||||||
Net revenue:
|
|
|
|
||||||
Net administrative fees
|
$
|
662,462
|
|
$
|
8,150
|
|
$
|
654,312
|
|
Other services and support
|
371,019
|
|
12,552
|
|
358,467
|
|
|||
Services
|
1,033,481
|
|
20,702
|
|
1,012,779
|
|
|||
Products
|
184,157
|
|
3,924
|
|
180,233
|
|
|||
Net revenue
|
$
|
1,217,638
|
|
$
|
24,626
|
|
$
|
1,193,012
|
|
Cost of revenue:
|
|
|
|
||||||
Services
|
$
|
182,375
|
|
$
|
(6,769
|
)
|
$
|
189,144
|
|
Cost of revenue
|
$
|
355,630
|
|
$
|
(6,769
|
)
|
$
|
362,399
|
|
Gross profit
|
$
|
862,008
|
|
$
|
31,395
|
|
$
|
830,613
|
|
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
$
|
438,985
|
|
$
|
(5,959
|
)
|
$
|
444,944
|
|
Operating expenses
|
$
|
493,494
|
|
$
|
(5,959
|
)
|
$
|
499,453
|
|
Operating income
|
$
|
368,514
|
|
$
|
37,354
|
|
$
|
331,160
|
|
Income before income taxes
|
$
|
368,139
|
|
$
|
37,354
|
|
$
|
330,785
|
|
Income tax expense
|
$
|
33,462
|
|
$
|
1,872
|
|
$
|
31,590
|
|
Net income from continuing operations
|
$
|
334,677
|
|
$
|
35,482
|
|
$
|
299,195
|
|
Net income
|
$
|
284,079
|
|
$
|
35,482
|
|
$
|
248,597
|
|
Net income attributable to non-controlling interest in Premier LP
|
$
|
(174,959
|
)
|
$
|
(22,437
|
)
|
$
|
(152,522
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
$
|
(118,064
|
)
|
$
|
16,045
|
|
$
|
(134,109
|
)
|
Net income attributable to stockholders
|
$
|
(8,944
|
)
|
$
|
29,090
|
|
$
|
(38,034
|
)
|
|
|
|
|
||||||
|
Impact of change in accounting principle
|
||||||||
|
Year Ended June 30, 2019
|
||||||||
|
As presented
|
Impact of new revenue standard
|
Previous revenue standard
|
||||||
Earnings per share attributable to stockholders:
|
|
|
|
||||||
Basic
|
$
|
(0.15
|
)
|
$
|
0.49
|
|
$
|
(0.64
|
)
|
Diluted
|
$
|
(0.15
|
)
|
$
|
0.49
|
|
$
|
(0.64
|
)
|
|
Impact of change in accounting principle
|
||||||||
|
Year Ended
June 30, 2019
|
||||||||
|
As presented
|
Impact of new revenue standard
|
Previous revenue standard
|
||||||
Net income
|
$
|
284,079
|
|
$
|
35,482
|
|
$
|
248,597
|
|
Less: Comprehensive income attributable to non-controlling interest
|
(174,959
|
)
|
(22,437
|
)
|
(152,522
|
)
|
|||
Comprehensive income attributable to Premier, Inc.
|
$
|
109,120
|
|
$
|
13,045
|
|
$
|
96,075
|
|
|
Impact of change in accounting principle
|
||||||||
Year Ended June 30, 2019
|
As presented
|
Impact of new revenue standard
|
Previous revenue standard
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
284,079
|
|
$
|
35,482
|
|
$
|
248,597
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
Deferred income taxes
|
$
|
11,878
|
|
$
|
(3,238
|
)
|
$
|
15,116
|
|
Changes in operating assets and liabilities:
|
|
|
|
||||||
Accounts receivable, prepaid expenses and other current assets
|
$
|
(6,699
|
)
|
$
|
11,353
|
|
$
|
(18,052
|
)
|
Contract assets
|
$
|
(36,549
|
)
|
$
|
(36,549
|
)
|
$
|
—
|
|
Other assets
|
$
|
(6,004
|
)
|
$
|
(1,363
|
)
|
$
|
(4,641
|
)
|
Accounts payable, deferred revenue and other current liabilities
|
$
|
17,920
|
|
$
|
(5,685
|
)
|
$
|
23,605
|
|
Net decrease in cash and cash equivalents
|
$
|
(11,331
|
)
|
$
|
—
|
|
$
|
(11,331
|
)
|
|
Acquisition Date Fair Value
|
||
Cash paid at closing
|
$
|
227,500
|
|
Cash paid on January 10, 2017
|
97,500
|
|
|
Purchase price
|
325,000
|
|
|
Additional cash paid at closing
|
10,984
|
|
|
Adjusted purchase price
|
335,984
|
|
|
Earn-out liability
|
16,662
|
|
|
Receivable from GNYHA Holdings
|
(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
|
|
|
June 30, 2019
|
June 30, 2018
|
||||
Assets
|
|
|
||||
Inventory
|
$
|
3,385
|
|
$
|
13,504
|
|
Prepaid expenses and other current assets
|
—
|
|
888
|
|
||
Property and equipment, net
|
—
|
|
1,344
|
|
||
Intangible assets, net
|
—
|
|
21,729
|
|
||
Goodwill
|
—
|
|
63,375
|
|
||
Other long-term assets
|
—
|
|
99
|
|
||
Assets of discontinued operations
|
$
|
3,385
|
|
$
|
100,939
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Accounts payable
|
$
|
2,255
|
|
$
|
12,176
|
|
Accrued expenses
|
6,630
|
|
4,120
|
|
||
Accrued compensation and benefits
|
2,373
|
|
786
|
|
||
Other current liabilities
|
539
|
|
227
|
|
||
Other long-term liabilities
|
—
|
|
320
|
|
||
Liabilities of discontinued operations
|
$
|
11,797
|
|
$
|
17,629
|
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Net revenue
|
$
|
428,493
|
|
$
|
476,599
|
|
$
|
388,435
|
|
Cost of revenue
|
417,524
|
|
456,294
|
|
371,335
|
|
|||
Gross profit
|
10,969
|
|
20,305
|
|
17,100
|
|
|||
Selling, general and administrative expense
|
23,588
|
|
18,388
|
|
15,132
|
|
|||
Amortization of purchased intangible assets
|
2,425
|
|
2,646
|
|
2,205
|
|
|||
Operating expenses
|
26,013
|
|
21,034
|
|
17,337
|
|
|||
Operating loss from discontinued operations
|
(15,044
|
)
|
(729
|
)
|
(237
|
)
|
|||
Net loss on disposal and impairment of assets
|
61,219
|
|
—
|
|
—
|
|
|||
Loss from discontinued operations before income taxes
|
(76,263
|
)
|
(729
|
)
|
(237
|
)
|
|||
Income tax benefit
|
(25,665
|
)
|
(292
|
)
|
(110
|
)
|
|||
Loss from discontinued operations, net of tax
|
(50,598
|
)
|
(437
|
)
|
(127
|
)
|
|||
Net loss from discontinued operations attributable to non-controlling interest in Premier LP
|
25,948
|
|
279
|
|
76
|
|
|||
Net loss from discontinued operations attributable to stockholders
|
$
|
(24,650
|
)
|
$
|
(158
|
)
|
$
|
(51
|
)
|
|
Carrying Value
|
|
Equity in Net Income (Loss)
|
|||||||||||||
|
June 30,
|
|
Year Ended June 30,
|
|||||||||||||
|
2019
|
2018
|
|
2019
|
2018
|
2017
|
||||||||||
FFF
|
$
|
96,905
|
|
$
|
91,804
|
|
|
$
|
5,102
|
|
$
|
6,283
|
|
$
|
4,400
|
|
PharmaPoint
|
—
|
|
—
|
|
|
—
|
|
(4,232
|
)
|
(340
|
)
|
|||||
Innovatix
|
—
|
|
—
|
|
|
—
|
|
—
|
|
10,743
|
|
|||||
Other investments
|
2,731
|
|
2,249
|
|
|
556
|
|
(877
|
)
|
(58
|
)
|
|||||
Total investments
|
$
|
99,636
|
|
$
|
94,053
|
|
|
$
|
5,658
|
|
$
|
1,174
|
|
$
|
14,745
|
|
|
Fair Value of Financial Assets and Liabilities
|
Quoted Prices in Active Markets for Identical Assets
(Level 1)
|
Significant Other Observable Inputs
(Level 2)
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
June 30, 2019
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
57,607
|
|
$
|
57,607
|
|
$
|
—
|
|
$
|
—
|
|
FFF call right
|
204
|
|
—
|
|
—
|
|
204
|
|
||||
Deferred compensation plan assets
|
50,229
|
|
50,229
|
|
—
|
|
—
|
|
||||
Total assets
|
$
|
108,040
|
|
$
|
107,836
|
|
$
|
—
|
|
$
|
204
|
|
Earn-out liabilities
|
$
|
6,816
|
|
$
|
—
|
|
$
|
—
|
|
$
|
6,816
|
|
FFF put right
|
41,652
|
|
—
|
|
—
|
|
41,652
|
|
||||
Total liabilities
|
$
|
48,468
|
|
$
|
—
|
|
$
|
—
|
|
$
|
48,468
|
|
|
|
|
|
|
||||||||
June 30, 2018
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
62,684
|
|
$
|
62,684
|
|
$
|
—
|
|
$
|
—
|
|
FFF call right
|
610
|
|
—
|
|
—
|
|
610
|
|
||||
Deferred compensation plan assets
|
48,215
|
|
48,215
|
|
—
|
|
—
|
|
||||
Total assets
|
$
|
111,509
|
|
$
|
110,899
|
|
$
|
—
|
|
$
|
610
|
|
FFF put right
|
$
|
42,041
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42,041
|
|
Total liabilities
|
$
|
42,041
|
|
$
|
—
|
|
$
|
—
|
|
$
|
42,041
|
|
|
Beginning Balance
|
Purchases (Settlements)
|
Gain (Loss)
|
Ending Balance
|
||||||||
Year ended June 30, 2019
|
|
|
|
|
||||||||
FFF call right
|
$
|
610
|
|
$
|
—
|
|
$
|
(406
|
)
|
$
|
204
|
|
Total Level 3 assets
|
$
|
610
|
|
$
|
—
|
|
$
|
(406
|
)
|
$
|
204
|
|
Earn-out liabilities
|
$
|
—
|
|
$
|
4,548
|
|
$
|
(2,268
|
)
|
$
|
6,816
|
|
FFF put right
|
42,041
|
|
—
|
|
389
|
|
41,652
|
|
||||
Total Level 3 liabilities
|
$
|
42,041
|
|
$
|
4,548
|
|
$
|
(1,879
|
)
|
$
|
48,468
|
|
|
|
|
|
|
||||||||
Year ended June 30, 2018
|
|
|
|
|
||||||||
FFF call right
|
$
|
4,655
|
|
$
|
—
|
|
$
|
(4,045
|
)
|
$
|
610
|
|
Total Level 3 assets
|
$
|
4,655
|
|
$
|
—
|
|
$
|
(4,045
|
)
|
$
|
610
|
|
Earn-out liabilities
|
$
|
21,310
|
|
$
|
(21,125
|
)
|
$
|
185
|
|
$
|
—
|
|
FFF put right
|
24,050
|
|
—
|
|
(17,991
|
)
|
42,041
|
|
||||
Total Level 3 liabilities
|
$
|
45,360
|
|
$
|
(21,125
|
)
|
$
|
(17,806
|
)
|
$
|
42,041
|
|
|
June 30,
|
|||||
|
2019
|
2018
|
||||
Trade accounts receivable
|
$
|
131,269
|
|
$
|
150,426
|
|
Managed services receivable
|
54,541
|
|
35,766
|
|
||
Other
|
7,815
|
|
2,417
|
|
||
Total accounts receivable
|
193,625
|
|
188,609
|
|
||
Allowance for doubtful accounts
|
(4,327
|
)
|
(1,841
|
)
|
||
Accounts receivable, net
|
$
|
189,298
|
|
$
|
186,768
|
|
|
June 30,
|
||||||
|
Useful life
|
2019
|
2018
|
||||
Capitalized software
|
2-5 years
|
$
|
478,356
|
|
$
|
405,119
|
|
Computer hardware
|
3-5 years
|
59,301
|
|
67,913
|
|
||
Furniture and other equipment
|
5 years
|
7,810
|
|
6,955
|
|
||
Leasehold improvements
|
Lesser of estimated useful life or term of lease
|
18,876
|
|
18,926
|
|
||
Total property and equipment
|
|
564,343
|
|
498,913
|
|
||
Accumulated depreciation and amortization
|
|
(359,235
|
)
|
(293,564
|
)
|
||
Property and equipment, net
|
|
$
|
205,108
|
|
$
|
205,349
|
|
|
June 30,
|
|||||
|
2019
|
2018
|
||||
Capitalized contract costs
|
$
|
16,757
|
|
$
|
—
|
|
Convertible notes receivable
|
9,045
|
|
—
|
|
||
Deferred loan costs, net
|
2,783
|
|
506
|
|
||
FFF call right
|
204
|
|
610
|
|
||
Other
|
3,079
|
|
2,776
|
|
||
Total other long-term assets
|
$
|
31,868
|
|
$
|
3,892
|
|
|
June 30,
|
|||||
|
2019
|
2018
|
||||
FFF put right
|
$
|
41,652
|
|
$
|
42,041
|
|
Deferred rent
|
12,156
|
|
13,082
|
|
||
Reserve for uncertain tax positions
|
7,419
|
|
8,261
|
|
||
Earn-out liability, less current portion
|
5,634
|
|
—
|
|
||
Other
|
822
|
|
—
|
|
||
Total other long-term liabilities
|
$
|
67,683
|
|
$
|
63,384
|
|
|
Supply Chain Services
|
Performance Services
|
Total
|
||||||
June 30, 2018
|
$
|
336,973
|
|
$
|
506,197
|
|
$
|
843,170
|
|
Acquisition of Stanson
|
—
|
|
37,539
|
|
37,539
|
|
|||
June 30, 2019
|
$
|
336,973
|
|
$
|
543,736
|
|
$
|
880,709
|
|
|
|
June 30,
|
|||||
|
Useful Life
|
2019
|
2018
|
||||
Member relationships
|
14.7 years
|
$
|
220,100
|
|
$
|
220,100
|
|
Technology
|
5.7 years
|
164,217
|
|
142,317
|
|
||
Customer relationships
|
8.3 years
|
48,010
|
|
46,810
|
|
||
Trade names
|
7.9 years
|
16,060
|
|
15,860
|
|
||
Favorable lease commitments
|
10.1 years
|
11,393
|
|
11,393
|
|
||
Non-compete agreements
|
5.8 years
|
8,800
|
|
8,480
|
|
||
Total intangible assets
|
|
468,580
|
|
444,960
|
|
||
Accumulated amortization
|
|
(197,858
|
)
|
(144,574
|
)
|
||
Total intangible assets, net
|
|
$
|
270,722
|
|
$
|
300,386
|
|
2020
|
$
|
49,484
|
|
2021
|
27,927
|
|
|
2022
|
24,620
|
|
|
2023
|
23,511
|
|
|
2024
|
22,970
|
|
|
Thereafter
|
119,210
|
|
|
Total amortization expense (a)
|
$
|
267,722
|
|
(a)
|
Estimated aggregate amortization expense for the next five fiscal years and thereafter excludes anticipated amortization on technology under development, which was classified as technology in the total intangible assets, net table, of $3.0 million at June 30, 2019.
|
|
June 30,
|
|||||
|
2019
|
2018
|
||||
Supply Chain Services
|
$
|
196,241
|
|
$
|
213,756
|
|
Performance Services
|
74,481
|
|
86,630
|
|
||
Total intangible assets, net
|
$
|
270,722
|
|
$
|
300,386
|
|
|
|
|
June 30,
|
|||||||
|
Commitment Amount
|
Due Date
|
2019
|
2018
|
||||||
Credit Facility
|
$
|
1,000,000
|
|
November 9, 2023
|
$
|
25,000
|
|
$
|
100,000
|
|
Notes payable
|
—
|
|
Various
|
8,611
|
|
7,212
|
|
|||
Total debt
|
|
|
33,611
|
|
107,212
|
|
||||
Less: current portion
|
|
|
(27,608
|
)
|
(100,250
|
)
|
||||
Total long-term debt
|
|
|
$
|
6,003
|
|
$
|
6,962
|
|
2020
|
$
|
2,608
|
|
2021
|
3,372
|
|
|
2022
|
416
|
|
|
2023
|
944
|
|
|
2024
|
1,271
|
|
|
Total principal payments
|
$
|
8,611
|
|
|
Receivables From Limited Partners
|
Redeemable Limited Partners' Capital
|
Accumulated Other Comprehensive Income (Loss)
|
Total Redeemable Limited Partners' Capital
|
||||||||
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 partners
|
—
|
|
(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 of redeemable limited partners' capital to redemption amount
|
—
|
|
37,176
|
|
—
|
|
37,176
|
|
||||
June 30, 2017
|
$
|
(4,177
|
)
|
$
|
3,142,760
|
|
$
|
—
|
|
$
|
3,138,583
|
|
Distributions applied to receivables from limited partners
|
1,972
|
|
—
|
|
—
|
|
1,972
|
|
||||
Redemption of limited partners
|
—
|
|
(942
|
)
|
—
|
|
(942
|
)
|
||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
224,269
|
|
—
|
|
224,269
|
|
||||
Distributions to limited partners
|
—
|
|
(69,770
|
)
|
—
|
|
(69,770
|
)
|
||||
Exchange of Class B common units for Class A common stock by member owners
|
—
|
|
(216,121
|
)
|
—
|
|
(216,121
|
)
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
(157,581
|
)
|
—
|
|
(157,581
|
)
|
||||
June 30, 2018
|
$
|
(2,205
|
)
|
$
|
2,922,615
|
|
$
|
—
|
|
$
|
2,920,410
|
|
Distributions applied to receivables from limited partners
|
1,001
|
|
—
|
|
—
|
|
1,001
|
|
||||
Redemption of limited partners
|
—
|
|
(1,819
|
)
|
—
|
|
(1,819
|
)
|
||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
174,959
|
|
—
|
|
174,959
|
|
||||
Distributions to limited partners
|
—
|
|
(55,562
|
)
|
—
|
|
(55,562
|
)
|
||||
Exchange of Class B common units for Class A common stock by member owners
|
—
|
|
(633,783
|
)
|
—
|
|
(633,783
|
)
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
118,064
|
|
—
|
|
118,064
|
|
||||
June 30, 2019
|
$
|
(1,204
|
)
|
$
|
2,524,474
|
|
$
|
—
|
|
$
|
2,523,270
|
|
Date
|
Distribution (a)
|
||
August 23, 2018
|
$
|
15,465
|
|
November 21, 2018
|
$
|
14,993
|
|
February 21, 2019
|
$
|
14,288
|
|
May 23, 2019
|
$
|
13,145
|
|
(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 for each respective distribution date. Premier LP made a $13.2 million quarterly distribution on August 22, 2019. The distribution is reflected in limited partners' distribution payable in the accompanying Consolidated Balance Sheets at June 30, 2019.
|
Date of Quarterly Exchange
|
Number of Class B Common Units Exchanged
|
Reduction in Redeemable Limited Partners' Capital
|
|||
July 31, 2018
|
816,468
|
|
$
|
30,536
|
|
October 31, 2018
|
9,807,651
|
|
441,344
|
|
|
January 31, 2019
|
3,705,459
|
|
147,440
|
|
|
April 30, 2019
|
435,188
|
|
14,463
|
|
|
Total
|
14,764,766
|
|
$
|
633,783
|
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard (a)
|
||||||||||
Numerator for basic earnings (loss) per share:
|
|
|
|
|
||||||||
Net income (loss) from continuing operations attributable to stockholders (b)
|
$
|
15,706
|
|
$
|
(13,394
|
)
|
$
|
191,040
|
|
$
|
76,300
|
|
Net loss from discontinued operations attributable to stockholders
|
(24,650
|
)
|
(24,640
|
)
|
(158
|
)
|
(51
|
)
|
||||
Net (loss) income attributable to stockholders
|
$
|
(8,944
|
)
|
$
|
(38,034
|
)
|
$
|
190,882
|
|
$
|
76,249
|
|
|
|
|
|
|
||||||||
Numerator for diluted earnings (loss) per share:
|
|
|
|
|
||||||||
Net income (loss) from continuing operations attributable to stockholders (b)
|
$
|
15,706
|
|
$
|
(13,394
|
)
|
$
|
191,040
|
|
$
|
76,300
|
|
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
(157,581
|
)
|
—
|
|
||||
Net income from continuing operations attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
224,548
|
|
—
|
|
||||
Net income (loss) from continuing operations
|
15,706
|
|
(13,394
|
)
|
258,007
|
|
76,300
|
|
||||
Tax effect on Premier, Inc. net income (c)
|
—
|
|
—
|
|
(70,257
|
)
|
—
|
|
||||
Adjusted net income (loss) from continuing operations
|
$
|
15,706
|
|
$
|
(13,394
|
)
|
$
|
187,750
|
|
$
|
76,300
|
|
|
|
|
|
|
||||||||
Net loss from discontinued operations attributable to stockholders
|
$
|
(24,650
|
)
|
$
|
(24,640
|
)
|
$
|
(158
|
)
|
$
|
(51
|
)
|
Net loss from discontinued operations attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
(279
|
)
|
(76
|
)
|
||||
Adjusted net loss from discontinued operations
|
$
|
(24,650
|
)
|
$
|
(24,640
|
)
|
$
|
(437
|
)
|
$
|
(127
|
)
|
|
|
|
|
|
||||||||
Adjusted net (loss) income
|
$
|
(8,944
|
)
|
$
|
(38,034
|
)
|
$
|
187,313
|
|
$
|
76,173
|
|
|
|
|
|
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard (a)
|
||||||||||
Denominator for basic earnings (loss) per share:
|
|
|
|
|
||||||||
Weighted average shares (d)
|
59,188
|
|
59,188
|
|
53,518
|
|
49,654
|
|
||||
|
|
|
|
|
||||||||
Denominator for diluted earnings (loss) per share:
|
|
|
|
|
||||||||
Weighted average shares (d)
|
59,188
|
|
59,188
|
|
53,518
|
|
49,654
|
|
||||
Effect of dilutive securities: (e)
|
|
|
|
|
||||||||
Stock options
|
577
|
|
—
|
|
275
|
|
286
|
|
||||
Restricted stock
|
297
|
|
—
|
|
295
|
|
215
|
|
||||
Performance share awards
|
207
|
|
—
|
|
252
|
|
219
|
|
||||
Class B shares outstanding
|
—
|
|
—
|
|
83,000
|
|
—
|
|
||||
Weighted average shares and assumed conversions
|
60,269
|
|
59,188
|
|
137,340
|
|
50,374
|
|
||||
|
|
|
|
|
||||||||
Basic earnings (loss) per share:
|
|
|
|
|
||||||||
Basic earnings (loss) per share from continuing operations
|
$
|
0.27
|
|
$
|
(0.22
|
)
|
$
|
3.57
|
|
$
|
1.54
|
|
Basic loss per share from discontinued operations
|
(0.42
|
)
|
(0.42
|
)
|
0.00
|
|
0.00
|
|
||||
Basic (loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
(0.64
|
)
|
$
|
3.57
|
|
$
|
1.54
|
|
|
|
|
|
|
||||||||
Diluted earnings (loss) per share:
|
|
|
|
|
||||||||
Diluted earnings (loss) per share from continuing operations
|
$
|
0.27
|
|
$
|
(0.22
|
)
|
$
|
1.37
|
|
$
|
1.51
|
|
Diluted loss per share from discontinued operations
|
(0.42
|
)
|
(0.42
|
)
|
(0.01
|
)
|
0.00
|
|
||||
Diluted (loss) earnings per share attributable to stockholders
|
$
|
(0.15
|
)
|
$
|
(0.64
|
)
|
$
|
1.36
|
|
$
|
1.51
|
|
(a)
|
The Company adopted Topic 606 effective July 1, 2018. Comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information.
|
(b)
|
Net income (loss) from continuing operations attributable to stockholders was calculated as follows (in thousands):
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard
|
||||||||||
Net income from continuing operations
|
$
|
334,677
|
|
$
|
299,195
|
|
$
|
258,007
|
|
$
|
449,604
|
|
Net income from continuing operations attributable to non-controlling interest in Premier LP
|
(200,907
|
)
|
(178,480
|
)
|
(224,548
|
)
|
(336,128
|
)
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
(118,064
|
)
|
(134,109
|
)
|
157,581
|
|
(37,176
|
)
|
||||
Net income (loss) from continuing operations attributable to stockholders
|
$
|
15,706
|
|
$
|
(13,394
|
)
|
$
|
191,040
|
|
$
|
76,300
|
|
(c)
|
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.
|
(d)
|
Weighted average number of common shares used for basic earnings 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, 2019, 2018 and 2017.
|
(e)
|
For the year ended June 30, 2019, the effect of 70.8 million Class B common units exchangeable for Class A common shares and 0.4 million stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. For the year ended June 30, 2018, the effect of 1.6 million stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. 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.
|
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 (b)
|
Percentage of Combined Voting Power Class B/Class A Common Stock
|
|||
July 31, 2018
|
816,468
|
|
79,519,233
|
|
53,256,897
|
|
60%/40%
|
October 31, 2018
|
9,807,651
|
|
69,601,752
|
|
63,734,585
|
|
53%/47%
|
January 31, 2019
|
3,705,459
|
|
65,778,688
|
|
63,841,210
|
|
51%/49%
|
April 30, 2019
|
435,188
|
|
64,548,044
|
|
61,826,763
|
|
51%/49%
|
July 31, 2019 (c)
|
1,310,771
|
|
62,767,860
|
|
63,274,182
|
|
49.8%/50.2%
|
(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)
|
The number of Class A common shares outstanding after exchange also includes activity related to the Company's share repurchase program (see Note 12 - Stockholders' Deficit), equity incentive plan (see Note 14 - Stock-Based Compensation) and departed member owners (see Note 11 - Redeemable Limited Partners' Capital).
|
(c)
|
As the quarterly exchange occurred on July 31, 2019, the impact of the exchange is not reflected in the consolidated financial statements for the year ended June 30, 2019. The Company utilized 1.3 million treasury shares to facilitate this exchange, and as a result had 1.1 million Class A common shares held in treasury as of July 31, 2019, after the exchange.
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Pre-tax stock-based compensation expense (a)
|
$
|
29,001
|
|
$
|
28,844
|
|
$
|
26,097
|
|
Deferred tax benefit (b)
|
6,296
|
|
7,124
|
|
9,917
|
|
|||
Total stock-based compensation expense, net of tax
|
$
|
22,705
|
|
$
|
21,720
|
|
$
|
16,180
|
|
(a)
|
Pre-tax stock-based compensation expense attributable to discontinued operations is not included in the above table and was $0.5 million, $0.6 million and $0.4 million for the years ended June 30, 2019, 2018 and 2017, respectively.
|
(b)
|
For the year ended June 30, 2019, the deferred tax benefit was reduced by $1.2 million attributable to stock-based compensation expense that is nondeductible for tax purposes pursuant to Section 162(m) as amended by the TCJA.
|
|
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, 2018
|
605,873
|
|
$
|
33.25
|
|
|
1,318,047
|
|
$
|
33.00
|
|
|
3,499,251
|
|
$
|
30.53
|
|
Granted
|
282,786
|
|
$
|
43.16
|
|
|
613,901
|
|
$
|
43.09
|
|
|
—
|
|
$
|
—
|
|
Vested/exercised
|
(239,038
|
)
|
$
|
34.81
|
|
|
(359,751
|
)
|
$
|
35.43
|
|
|
(624,370
|
)
|
$
|
31.60
|
|
Forfeited
|
(60,071
|
)
|
$
|
36.34
|
|
|
(132,382
|
)
|
$
|
36.46
|
|
|
(76,208
|
)
|
$
|
33.25
|
|
Outstanding at June 30, 2019
|
589,550
|
|
$
|
37.06
|
|
|
1,439,815
|
|
$
|
36.38
|
|
|
2,798,673
|
|
$
|
30.22
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock options outstanding and exercisable at June 30, 2019
|
|
|
|
|
|
|
2,390,622
|
|
$
|
29.84
|
|
|
Unrecognized Stock-Based Compensation Expense
|
Weighted Average Amortization Period
|
||
Restricted stock
|
$
|
10,348
|
|
1.8 years
|
Performance share awards
|
21,810
|
|
1.7 years
|
|
Stock options
|
2,170
|
|
1.1 years
|
|
Total unrecognized stock-based compensation expense
|
$
|
34,328
|
|
1.7 years
|
|
Intrinsic Value of Stock Options
|
||
Outstanding and exercisable
|
$
|
22,152
|
|
Expected to vest
|
2,718
|
|
|
Total outstanding
|
$
|
24,870
|
|
|
|
||
Exercised during the year ended June 30, 2019
|
$
|
6,096
|
|
(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 was 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,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
16,832
|
|
$
|
22,103
|
|
$
|
16,638
|
|
State
|
4,752
|
|
4,141
|
|
4,614
|
|
|||
Total current expense
|
21,584
|
|
26,244
|
|
21,252
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
10,493
|
|
232,920
|
|
49,493
|
|
|||
State
|
1,385
|
|
362
|
|
11,179
|
|
|||
Total deferred expense
|
11,878
|
|
233,282
|
|
60,672
|
|
|||
Provision for income taxes
|
$
|
33,462
|
|
$
|
259,526
|
|
$
|
81,924
|
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Computed tax expense
|
$
|
77,309
|
|
$
|
145,220
|
|
$
|
186,035
|
|
Partnership income not subject to tax
|
(50,333
|
)
|
(70,257
|
)
|
(85,142
|
)
|
|||
State taxes (net of federal benefit)
|
9,884
|
|
12,919
|
|
9,832
|
|
|||
Remeasurement adjustments and other permanent items
|
3,300
|
|
(53,151
|
)
|
(78,998
|
)
|
|||
(Benefit) expense on subsidiaries treated separately for income tax purposes
|
(1,564
|
)
|
(848
|
)
|
18,678
|
|
|||
Change in valuation allowance
|
(3,030
|
)
|
(33,106
|
)
|
26,829
|
|
|||
Deferred tax remeasurement
|
(1,814
|
)
|
256,787
|
|
9,950
|
|
|||
Other
|
(290
|
)
|
1,962
|
|
(5,260
|
)
|
|||
Provision for income taxes
|
$
|
33,462
|
|
$
|
259,526
|
|
$
|
81,924
|
|
Effective income tax rate
|
9.1
|
%
|
50.1
|
%
|
15.4
|
%
|
|
June 30,
|
|||||
|
2019
|
2018
|
||||
Deferred tax asset
|
|
|
||||
Partnership basis differences in Premier LP
|
$
|
417,157
|
|
$
|
304,459
|
|
Stock compensation
|
18,321
|
|
18,347
|
|
||
Accrued expenses
|
26,682
|
|
32,543
|
|
||
Net operating losses and credits
|
61,437
|
|
35,444
|
|
||
Other
|
12,662
|
|
12,103
|
|
||
Total deferred tax assets
|
536,259
|
|
402,896
|
|
||
Valuation allowance for deferred tax assets
|
(48,769
|
)
|
(58,681
|
)
|
||
Net deferred tax assets
|
$
|
487,490
|
|
$
|
344,215
|
|
Deferred tax liability
|
|
|
||||
Purchased intangible assets and depreciation
|
$
|
(52,585
|
)
|
$
|
(49,855
|
)
|
Other liabilities
|
(17,657
|
)
|
(6,305
|
)
|
||
Net deferred tax asset
|
$
|
417,248
|
|
$
|
288,055
|
|
|
Year Ended June 30,
|
||||||||
|
2019
|
2018
|
2017
|
||||||
Beginning of year balance
|
$
|
18,479
|
|
$
|
5,043
|
|
$
|
4,381
|
|
Increases in prior period tax positions
|
66
|
|
12,965
|
|
101
|
|
|||
Decreases in prior period tax positions
|
(11,867
|
)
|
(179
|
)
|
(870
|
)
|
|||
Reductions on settlements and lapse in statute of limitations
|
(27
|
)
|
(611
|
)
|
(22
|
)
|
|||
Increases in current period tax positions
|
1,615
|
|
1,261
|
|
1,453
|
|
|||
End of year balance
|
$
|
8,266
|
|
$
|
18,479
|
|
$
|
5,043
|
|
2020
|
$
|
12,130
|
|
2021
|
11,539
|
|
|
2022
|
11,468
|
|
|
2023
|
11,533
|
|
|
2024
|
11,510
|
|
|
Thereafter
|
20,645
|
|
|
Total future minimum lease payments
|
$
|
78,825
|
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
Net revenue:
|
As presented
|
Previous revenue standard (a)
|
||||||||||
Supply Chain Services
|
|
|
|
|
||||||||
Net administrative fees
|
$
|
662,462
|
|
$
|
654,312
|
|
$
|
643,839
|
|
$
|
557,468
|
|
Other services and support
|
8,561
|
|
20,003
|
|
7,812
|
|
7,023
|
|
||||
Services
|
671,023
|
|
674,315
|
|
651,651
|
|
564,491
|
|
||||
Products
|
184,157
|
|
180,233
|
|
172,327
|
|
148,364
|
|
||||
Total Supply Chain Services
|
855,180
|
|
854,548
|
|
823,978
|
|
712,855
|
|
||||
Performance Services
|
362,458
|
|
338,464
|
|
360,679
|
|
353,383
|
|
||||
Net revenue
|
$
|
1,217,638
|
|
$
|
1,193,012
|
|
$
|
1,184,657
|
|
$
|
1,066,238
|
|
(a)
|
The Company adopted Topic 606 effective July 1, 2018. Comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information.
|
|
Year Ended June 30,
|
||||||||
Depreciation and amortization expense (b):
|
2019
|
2018
|
2017
|
||||||
Supply Chain Services
|
$
|
18,618
|
|
$
|
18,040
|
|
$
|
10,998
|
|
Performance Services
|
110,581
|
|
95,808
|
|
85,299
|
|
|||
Corporate
|
10,965
|
|
9,217
|
|
7,703
|
|
|||
Total depreciation and amortization expense
|
$
|
140,164
|
|
$
|
123,065
|
|
$
|
104,000
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
||||||
Supply Chain Services
|
$
|
10,154
|
|
$
|
1,436
|
|
$
|
483
|
|
Performance Services
|
70,757
|
|
80,900
|
|
66,686
|
|
|||
Corporate
|
12,474
|
|
10,089
|
|
4,203
|
|
|||
Total capital expenditures
|
$
|
93,385
|
|
$
|
92,425
|
|
$
|
71,372
|
|
|
June 30,
|
||||||||
|
2019
|
2019
|
2018
|
||||||
Total assets (c):
|
As presented
|
Previous revenue standard (a)
|
|||||||
Supply Chain Services
|
$
|
1,111,934
|
|
$
|
963,272
|
|
$
|
991,837
|
|
Performance Services
|
941,183
|
|
883,723
|
|
860,409
|
|
|||
Corporate
|
516,450
|
|
527,529
|
|
459,970
|
|
|||
Total assets
|
$
|
2,569,567
|
|
$
|
2,374,524
|
|
$
|
2,312,216
|
|
(a)
|
The Company adopted Topic 606 effective July 1, 2018. Comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information.
|
(b)
|
Includes amortization of purchased intangible assets.
|
(c)
|
As of June 30, 2019 and 2018, Supply Chain Services total assets include $3.4 million and $100.9 million, respectively, in assets of discontinued operations related to the specialty pharmacy business.
|
|
Year Ended June 30,
|
|||||||||||
|
2019
|
2019
|
2018
|
2017
|
||||||||
|
As presented
|
Previous revenue standard (a)
|
||||||||||
Income before income taxes
|
$
|
368,139
|
|
$
|
330,785
|
|
$
|
517,533
|
|
$
|
531,528
|
|
Remeasurement gain attributable to acquisition of Innovatix, LLC
|
—
|
|
—
|
|
—
|
|
(205,146
|
)
|
||||
Equity in net income of unconsolidated affiliates (a)
|
(5,658
|
)
|
(5,658
|
)
|
(1,174
|
)
|
(14,745
|
)
|
||||
Interest and investment loss, net (b)
|
2,471
|
|
2,471
|
|
5,300
|
|
4,512
|
|
||||
Loss on disposal of long-lived assets
|
6,681
|
|
6,681
|
|
2,376
|
|
2,422
|
|
||||
Other (income) expense
|
(3,119
|
)
|
(3,119
|
)
|
16,324
|
|
(614
|
)
|
||||
Operating income
|
368,514
|
|
331,160
|
|
540,359
|
|
317,957
|
|
||||
Depreciation and amortization
|
86,879
|
|
86,879
|
|
70,264
|
|
57,878
|
|
||||
Amortization of purchased intangible assets
|
53,285
|
|
53,285
|
|
52,801
|
|
46,122
|
|
||||
Stock-based compensation (c)
|
29,396
|
|
29,396
|
|
29,235
|
|
26,487
|
|
||||
Acquisition and disposition related expenses
|
13,154
|
|
13,154
|
|
8,335
|
|
15,790
|
|
||||
Strategic and financial restructuring expenses (d)
|
7
|
|
7
|
|
2,512
|
|
31
|
|
||||
Remeasurement of tax receivable agreement liabilities (e)
|
—
|
|
—
|
|
(177,174
|
)
|
(5,447
|
)
|
||||
ERP implementation expenses (f)
|
872
|
|
872
|
|
1,000
|
|
2,028
|
|
||||
Acquisition related adjustment - revenue (g)
|
—
|
|
—
|
|
300
|
|
18,049
|
|
||||
Equity in net income of unconsolidated affiliates (a)
|
5,658
|
|
5,658
|
|
1,174
|
|
14,745
|
|
||||
Impairment on investments (a)
|
—
|
|
—
|
|
5,002
|
|
—
|
|
||||
Deferred compensation plan income (h)
|
2,546
|
|
2,546
|
|
3,960
|
|
4,020
|
|
||||
Other income
|
731
|
|
731
|
|
1,752
|
|
584
|
|
||||
Adjusted EBITDA
|
$
|
561,042
|
|
$
|
523,688
|
|
$
|
539,520
|
|
$
|
498,244
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA:
|
|
|
|
|
||||||||
Supply Chain Services
|
$
|
548,029
|
|
$
|
538,537
|
|
$
|
531,851
|
|
$
|
490,416
|
|
Performance Services
|
129,147
|
|
101,285
|
|
123,429
|
|
121,090
|
|
||||
Corporate
|
(116,134
|
)
|
(116,134
|
)
|
(115,760
|
)
|
(113,262
|
)
|
||||
Adjusted EBITDA
|
$
|
561,042
|
|
$
|
523,688
|
|
$
|
539,520
|
|
$
|
498,244
|
|
(a)
|
Refer to Note 5 - Investments for further information.
|
(b)
|
Represents interest expense, net and investment income.
|
(c)
|
Represents non-cash employee stock-based compensation expense and stock purchase plan expense of $0.4 million during each of the years ended June 30, 2019, 2018 and 2017.
|
(d)
|
Represents legal, accounting and other expenses directly related to strategic and financial restructuring expenses.
|
(e)
|
Represents adjustments to TRA liabilities for a 14% decrease in the U.S. federal corporate income tax rate that occurred during the year ended June 30, 2018, which is a result of the TCJA that was enacted on December 22, 2017, as well as 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.
|
(f)
|
Represents implementation and other costs associated with the implementation of a enterprise resource planning ("ERP") system.
|
(g)
|
This item includes non-cash adjustments to deferred revenue of acquired entities of $0.3 million and $0.6 million for the years ended June 30, 2018 and 2017, respectively. Business combination accounting rules require the Company to record a deferred revenue liability at its fair value only if the acquired deferred revenue represents a legal performance obligation assumed by the acquirer. The fair value is based on direct and indirect incremental costs of providing the services plus a normal profit margin. Generally, this results in a reduction to the purchased deferred revenue balance, which was based on upfront software license update fees and product support contracts assumed in connection with acquisitions. Because these support contracts are typically one year in duration, the Company's GAAP revenues for the one-year period subsequent to the acquisition of a business do not reflect the full amount of support revenues on these assumed support contracts that would have otherwise been recorded by the acquired entity. The Non-GAAP adjustment to software license update fees and product support revenues is intended to include, and thus reflect, the full amount of such revenues.
|
(h)
|
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 2019
|
|
|
|
|
||||||||
Net revenue
|
$
|
292,602
|
|
$
|
307,589
|
|
$
|
301,213
|
|
$
|
316,234
|
|
Gross profit
|
$
|
209,463
|
|
$
|
219,638
|
|
$
|
215,172
|
|
$
|
217,735
|
|
Net income from continuing operations
|
$
|
83,372
|
|
$
|
105,811
|
|
$
|
75,265
|
|
$
|
70,229
|
|
Loss from discontinued operations, net of tax
|
$
|
(1,399
|
)
|
$
|
(1,000
|
)
|
$
|
(1,463
|
)
|
$
|
(46,736
|
)
|
Net income
|
$
|
81,973
|
|
$
|
104,811
|
|
$
|
73,802
|
|
$
|
23,493
|
|
Net income attributable to non-controlling interest in Premier LP
|
$
|
(55,113
|
)
|
$
|
(62,631
|
)
|
$
|
(43,388
|
)
|
$
|
(13,827
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
$
|
(708,193
|
)
|
$
|
651,709
|
|
$
|
235,394
|
|
$
|
(296,974
|
)
|
Net (loss) income attributable to stockholders
|
$
|
(681,333
|
)
|
$
|
693,889
|
|
$
|
265,808
|
|
$
|
(287,308
|
)
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
||||||||
Basic
|
53,221
|
|
59,876
|
|
62,020
|
|
61,725
|
|
||||
Diluted
|
53,221
|
|
133,672
|
|
129,072
|
|
61,725
|
|
||||
|
|
|
|
|
||||||||
(Loss) earnings per share from continuing operations attributable to stockholders:
|
|
|
|
|
||||||||
Basic
|
$
|
(12.79
|
)
|
$
|
11.60
|
|
$
|
4.30
|
|
$
|
(4.28
|
)
|
Diluted
|
$
|
(12.79
|
)
|
$
|
0.70
|
|
$
|
0.49
|
|
$
|
(4.28
|
)
|
|
|
|
|
|
||||||||
Fiscal Year 2018
|
|
|
|
|
||||||||
Net revenue
|
$
|
276,723
|
|
$
|
294,390
|
|
$
|
300,940
|
|
$
|
312,604
|
|
Gross profit
|
$
|
195,240
|
|
$
|
205,901
|
|
$
|
215,062
|
|
$
|
226,457
|
|
Net income from continuing operations
|
$
|
61,299
|
|
$
|
19,877
|
|
$
|
75,831
|
|
$
|
101,000
|
|
(Loss) income from discontinued operations, net of tax
|
$
|
(683
|
)
|
$
|
(108
|
)
|
$
|
718
|
|
$
|
(364
|
)
|
Net income
|
$
|
60,616
|
|
$
|
19,769
|
|
$
|
76,549
|
|
$
|
100,636
|
|
Net income attributable to non-controlling interest in Premier LP
|
$
|
(44,610
|
)
|
$
|
(56,485
|
)
|
$
|
(53,047
|
)
|
$
|
(70,127
|
)
|
Adjustment of redeemable limited partners' capital to redemption amount
|
$
|
320,424
|
|
$
|
317,916
|
|
$
|
(127,039
|
)
|
$
|
(353,720
|
)
|
Net income (loss) attributable to stockholders
|
$
|
336,430
|
|
$
|
281,200
|
|
$
|
(103,537
|
)
|
$
|
(323,211
|
)
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
||||||||
Basic
|
52,909
|
|
55,209
|
|
53,529
|
|
52,412
|
|
||||
Diluted
|
140,046
|
|
139,237
|
|
53,529
|
|
52,412
|
|
||||
|
|
|
|
|
||||||||
Earnings (loss) per share from continuing operations attributable to stockholders:
|
|
|
|
|
||||||||
Basic
|
$
|
6.36
|
|
$
|
5.09
|
|
$
|
(1.94
|
)
|
$
|
(6.17
|
)
|
Diluted
|
$
|
0.30
|
|
$
|
0.06
|
|
$
|
(1.94
|
)
|
$
|
(6.17
|
)
|
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:
|
|
|
|
Amended and Restated Premier, Inc. 2013 Equity Incentive Plan
|
4,828,038 (1)
|
$30.22 (2)
|
6,663,371 (3)
|
Equity compensation plans not approved by security holders
|
n/a
|
n/a
|
n/a
|
Total
|
4,828,038 (1)
|
$30.22 (2)
|
6,673,371 (3)
|
(1)
|
Assumes restricted stock unit (RSU), performance share (PSA) and stock option awards are paid at target. Actual shares awarded may be higher or lower based upon actual performance over the measurement period. For more detailed information, see Note 14 - Stock-Based Compensation to our Consolidated Financial Statements.
|
(2)
|
This calculation only reflects outstanding stock option awards.
|
(3)
|
Reflects, as of June 30, 2019, shares reserved for future grants of stock options, RSUs, RSAs, PSAs and/or other equity awards. Any shares withheld to satisfy tax withholding obligations or tendered to pay the exercise price of an option shall again be available for grant under the terms of the plan.
|
Years Ended June 30, 2019, 2018 and 2017
|
||||||||||
(in thousands)
|
||||||||||
|
Beginning Balance
|
Additions/(Reductions) to Expense or Other Accounts
|
Deductions
|
Ending Balance
|
||||||
Year ended June 30, 2019
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,841
|
|
5,865
|
|
3,379
|
|
$
|
4,327
|
|
Deferred tax assets valuation allowance
|
$
|
58,681
|
|
(3,030
|
)
|
6,882
|
|
$
|
48,769
|
|
|
|
|
|
|
||||||
Year ended June 30, 2018
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,812
|
|
1,148
|
|
1,119
|
|
$
|
1,841
|
|
Deferred tax assets valuation allowance
|
$
|
91,787
|
|
(33,106
|
)
|
—
|
|
$
|
58,681
|
|
|
|
|
|
|
||||||
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
|
|
Exhibit
No.
|
|
Description
|
2.1
|
|
|
2.1.1
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.1.1
|
|
|
9.1
|
|
|
10.1
|
|
|
10.1.1
|
|
|
10.1.2
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
Exhibit
No.
|
|
Description
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
21
|
|
|
23
|
|
|
24
|
|
Power of Attorney (included on the signature page hereof)*
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
XBRL Instance Document*
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document*
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document*
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document*
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document*
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
|
PREMIER, INC.
|
|
|
By:
|
/s/ SUSAN D. DEVORE
|
|
Name:
|
Susan D. DeVore
|
|
Title:
|
Chief Executive Officer and Director
|
|
Date:
|
August 23, 2019
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ SUSAN D. DEVORE
Susan D. DeVore
|
|
Chief Executive Officer and Director
(principal executive officer)
|
|
August 23, 2019
|
|
|
|
|
|
/s/ CRAIG S. MCKASSON
Craig S. McKasson
|
|
Chief Administrative and Financial Officer and Senior Vice President
(principal financial and accounting officer)
|
|
August 23, 2019
|
|
|
|
|
|
/s/ BARCLAY E. BERDAN
Barclay E. Berdan
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ ERIC J. BIEBER, MD
Eric J. Bieber, MD
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ STEPHEN R. D'ARCY
Stephen R. D'Arcy |
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ JODY R. DAVIDS
Jody R. Davids
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ WILLIAM B. DOWNEY
William B. Downey
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ PETER S. FINE
Peter S. Fine
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ PHILIP A. INCARNATI
Philip A. Incarnati
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ DAVID LANGSTAFF
David Langstaff |
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ WILLIAM E. MAYER
William E. Mayer |
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ MARC D. MILLER
Marc D. Miller
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ MARVIN R. O'QUINN
Marvin R. O'Quinn
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ SCOTT REINER
Scott Reiner
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ TERRY D. SHAW
Terry D. Shaw
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ RICHARD J. STATUTO
Richard J. Statuto
|
|
Director
|
|
August 23, 2019
|
|
|
|
|
|
/s/ ELLEN C. WOLF
Ellen C. Wolf
|
|
Director
|
|
August 23, 2019
|
•
|
prior to that date, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder,
|
•
|
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares of voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those shares owned by persons who are directors and also officers and excluding employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer, or
|
•
|
on or subsequent to that date, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66 2⁄3% of the outstanding voting stock that is not owned by the interested stockholder.
|
•
|
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 the issuance of “blank check” preferred stock that could be issued by our board of directors to increase the number of outstanding shares of capital stock, making 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 initial public offering in which we qualified as a “controlled company” within the meaning of NASDAQ rules,
|
•
|
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 our chief executive officer,
|
•
|
require that advance notice be given by stockholders for any stockholder proposals or director nominations,
|
•
|
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.
|
Participant:
|
|
Target Number of
Performance Shares:
Performance Cycle: July 1, 20 - June 30, 20
|
|
Grant Date:
|
|
Participant:
|
|
Grant Date:
|
|
Number of Award Shares:
|
|
Vesting Date:
|
The third anniversary of the Grant Date (the “Vesting Date”).
|
(a)
|
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
|
(b)
|
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
|
Name of Subsidiary
|
State/Province of Incorporation
|
Premier Services, LLC (1)
|
Delaware
|
Premier Healthcare Alliance, L.P. (2)
|
California
|
Premier Supply Chain Improvement, Inc. (3)
|
Delaware
|
Premier Healthcare Solutions, Inc. (3)
|
Delaware
|
Premier Marketplace, LLC (3)
|
Delaware
|
NS3Health, LLC (4)
|
Florida
|
SVS LLC (4)
|
North Carolina
|
Commcare Pharmacy - FTL, LLC (5)
|
Florida
|
Premier Specialty Pharmacy Solutions, LLC (5)
|
Florida
|
Acro Pharmaceutical Services LLC (5)
|
Pennsylvania
|
Innovatix, LLC (4)
|
Delaware
|
InnovatixCares, LLC (6)
|
Delaware
|
Innovatix Network, LLC (6)
|
Delaware
|
Essensa Ventures, LLC (4)
|
New York
|
Premier Insurance Management Services, Inc. (7)
|
California
|
Premier Pharmacy Benefit Management, LLC (7)
|
Delaware
|
TheraDoc, Inc. (7)
|
Delaware
|
Healthcare Insights, LLC (7)
|
Illinois
|
CECity.com, Inc. (7)
|
Pennsylvania
|
Premier Research Institute, Inc. (7)
|
Delaware
|
Revolution Q, LLC (8)
|
Pennsylvania
|
Ostonic Quality Systems, LLC (9)
|
Delaware
|
ProvideGx, LLC (4)
|
Delaware
|
Contigo Health, LLC (7)
|
Delaware
|
Stanson Health, Inc. (7)
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-191484) pertaining to the 2013 Equity Incentive Plan of Premier, Inc.,
|
(2)
|
Registration Statement (Form S-3 No. 333-199158) of Premier, Inc.,
|
(3)
|
Registration Statement (Form S-8 No. 333-204628) pertaining to the 2015 Employee Stock Purchase Plan of Premier, Inc.,
|
(4)
|
Registration Statement (Form S-3/ASR No. 333-221426) of Premier, Inc., and
|
(5)
|
Registration Statement (Form S-3 No. 333-229531) pertaining to the 2013 Equity Incentive Plan of Premier, Inc. as amended and restated,
|
1.
|
I have reviewed this annual report on Form 10-K of Premier, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
|
|
/s/ Susan D. DeVore
|
|
|
Susan D. DeVore
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Premier, Inc.;
|
2.
|
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;
|
3.
|
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;
|
4.
|
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:
|
(a)
|
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;
|
(b)
|
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;
|
(c)
|
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
|
(d)
|
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
|
5.
|
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):
|
(a)
|
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
|
(b)
|
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.
|
|
|
/s/ Craig S. McKasson
|
|
|
Craig S. McKasson
|
|
|
Chief Administrative and Financial Officer and Senior Vice President
|
|
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
|
|
2. The information contained in the Report fairly presents, in all material respects, the financial condition and
|
|
|
/s/ Susan D. DeVore
|
|
|
Susan D. DeVore
|
|
|
Chief Executive Officer
|
|
|
|
|
|
August 23, 2019
|
|
1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of
|
|
2. The information contained in the Report fairly presents, in all material respects, the financial condition and
|
|
|
/s/ Craig S. McKasson
|
|
|
Craig S. McKasson
|
|
|
Chief Administrative and Financial Officer and Senior Vice President
|
|
|
|
|
|
August 23, 2019
|