Delaware
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35-2477140
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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13034 Ballantyne Corporate Place
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28277
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Charlotte,
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North Carolina
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(Zip Code)
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(Address of principal executive offices)
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Title of Each Class
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Trading Symbols
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Name of Each Exchange on Which Registered
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Class A Common Stock, $0.01 Par Value
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PINC
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NASDAQ Global Select Market
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Large accelerated filer
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☒
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Accelerated filer
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☐
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Non-accelerated filer
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☐
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Smaller reporting company
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☐
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Emerging growth company
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☐
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Page
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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ITEM 16.
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FORM 10-K SUMMARY
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•
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the impact of the continuing financial and operational uncertainty due to the coronavirus ("COVID-19") pandemic or other pandemics;
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competition which could limit our ability to maintain or expand market share within our industry;
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consolidation in the healthcare industry;
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potential delays recognizing or increasing revenue if the sales cycle or implementation period takes longer than expected;
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the impact on us if members of our group purchasing organization ("GPO") programs reduce activity levels or terminate or elect not to renew their contracts on substantially similar terms or at all;
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the rate at which the markets for our software-as-a-service ("SaaS") or licensed-based clinical analytics products and services develop;
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the dependency of our members on payments from third-party payers;
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our reliance on administrative fees that we receive from GPO suppliers;
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our ability to maintain third-party provider and strategic alliances or enter into new alliances;
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our ability to timely offer new and innovative products and services;
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the portion of revenues we receive from our largest members;
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risks and expenses related to future acquisition opportunities and integration of acquisitions;
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financial and operational risks associated with non-controlling investments in or other joint venture businesses that we do not control, particularly early stage companies;
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potential litigation;
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our reliance on Internet infrastructure, bandwidth providers, data center providers and other third parties and our own systems for providing services to our users;
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data loss or corruption due to failures or errors in our systems and service disruptions at our data centers, or breaches or failures of our security measures;
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the financial, operational and reputational consequences of cyber-attacks or other data security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us or our members or other third parties;
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our ability to use, disclose, de-identify or license data and to integrate third-party technologies;
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our use of "open source" software;
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•
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our dependency on contract manufacturing facilities located in various parts of the world;
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inventory risk we face for the personal protective equipment ("PPE") products we may have purchased at elevated market prices in the event of a potential material price decline;
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our ability to attract, hire, integrate and retain key personnel;
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adequate protection of our intellectual property and potential claims against our use of the intellectual property of third parties;
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potential sales and use tax liability in certain jurisdictions;
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changes in tax laws that materially impact our tax rate, income tax expense, anticipated tax benefits, deferred tax assets, cash flows and profitability;
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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;
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fluctuation of our quarterly cash flows, revenues and results of operations;
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changes and uncertainty in the political, economic or regulatory environment affecting healthcare organizations, including with respect to the status of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010, collectively referred to as the "ACA";
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our compliance with complex international, federal and state laws governing financial relationships among healthcare providers and the submission of false or fraudulent healthcare claims;
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interpretation and enforcement of current or future antitrust laws and regulations;
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compliance with complex federal and state privacy, security and breach notification laws;
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compliance with current or future laws, rules or regulations adopted by the Food & Drug Administration ("FDA") applicable to our software applications that may be considered medical devices;
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our holding company structure and dependence on distributions from Premier Healthcare Alliance, L.P. ("Premier LP");
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different interests among our GPO members or between us and our GPO members;
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the ability of our GPO members to exercise significant influence over us;
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the terms of agreements between us and our member owners;
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the impact of payments required under the Unit Exchange and Tax Receivable Acceleration Agreements (the "Unit Exchange Agreements") on our cash overall cash flow and our ability to able to fully realize the expected tax benefits that correspond to our fixed payment obligations associated with the Unit Exchange Agreements;
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provisions in our certificate of incorporation and bylaws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us;
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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;
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the number of shares of Class A common stock that will be eligible for sale in the near future and the dilutive effect of such issuances;
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the impact on our Class A common stock price in the event that we cease paying dividends at current levels or completely;
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the timing and number of shares of Class A common stock re-purchased by the Company pursuant to any Class A common stock repurchase program that may exist from time to time;
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the number of shares of Class A common stock eligible for sale in the near future and the potential effect on our Class A common stock price from such sales; and
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the risk factors discussed under the heading "Risk Factors" in Item 1A herein.
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improve the efficiency and effectiveness of the healthcare supply chain;
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deliver improvement in cost, quality and safety;
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innovate and enable success in emerging healthcare delivery and payment models to manage the health of populations; and
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utilize data and analytics to drive increased connectivity, and clinical, financial and operational improvement.
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We have experienced and may continue to experience demand uncertainty from both significant increases in demand for personal protective equipment ("PPE"), drugs and other products related to the treatment of COVID-19 and decreases in demand for non-COVID-19 related products.
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Our GPO member hospitals and non-acute care sites have experienced reduced or limited access for non-patients, including our field teams, consultants and other professionals, and travel restrictions have impacted our employees' ability to travel to our members' facilities.
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The global supply chain has been significantly disrupted due to stay at home orders, border closings and rapidly escalating shipping costs.
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We have and may continue to receive requests for contract modifications, payment waivers and deferrals, payment reductions or amended payment terms from our contract counterparties. In addition, several pharmacy suppliers have exercised force majeure clauses related to failure to supply clauses in their contracts with us.
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The impact of the COVID-19 pandemic could result in a prolonged recession or depression in the United States or globally that could harm the banking system, limit demand for all products and services and cause other seen and unforeseen events and circumstances, all of which could negatively impact us.
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In response to COVID-19, federal, state and local governments are issuing new rules, regulations, changing reimbursement eligibility rules, orders and advisories on a regular basis. These government actions can impact us and our members and suppliers.
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Year Ended June 30,
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2020
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2019
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2018
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3 Year Average
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GPO retention rate (a)
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99%
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97%
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98%
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98%
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SaaS institutional renewal rate (b)
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95%
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96%
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97%
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96%
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(a)
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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.
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(b)
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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.
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register our company and list our FDA-regulated products with the FDA;
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obtain pre-market approval establishing the safety and efficacy of our regulated products or clearance from the FDA based on demonstration of substantial equivalence to a legally marketed device before marketing our regulated products;
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obtain an investigational device exemption ("IDE") prior to conducting clinical trials with the regulated products;
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obtain FDA approval by demonstrating the safety and effectiveness of the regulated products prior to marketing;
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submit to inspections by the FDA; and
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comply with various FDA regulations, including the agency's quality system regulation, medical device reporting regulations, requirements for medical device modifications, 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 or post-market studies, corrections and removal reporting regulations, and post-market surveillance regulations.
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product listing and establishment registration, which helps facilitate FDA inspections and other regulatory action;
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QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, validation, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process;
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labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved, or off-label use or indication;
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clearance of product modifications that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared or approved devices;
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notice or approval of product or manufacturing process modifications or deviations that affect the safety or effectiveness of one of our cleared or approved devices;
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post-approval restrictions or conditions, including post-approval study commitments;
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post-market surveillance regulations, which apply, when necessary, to protect the public health or to provide additional safety and effectiveness data for the device;
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the FDA's recall authority, whereby it can ask, or under certain conditions order, device manufacturers to recall from the market a product that is in violation of governing laws and regulations;
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regulations pertaining to voluntary recalls; and
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notices of corrections or removals.
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untitled letters, warning letters, fines, injunctions, consent decrees and civil penalties;
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customer notifications or repair, replacement, refunds, recall, detention or seizure of our products;
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operating restrictions or partial suspension or total shutdown of production;
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refusing or delaying requests for 510(k) clearance or PMA approvals of new products or modified products;
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withdrawing 510(k) clearances or PMA approvals that have already been granted;
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refusing to grant export approval for our products; or
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criminal prosecution.
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(i)
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as to how we will use and disclose the protected health information within certain allowable parameters established by HIPAA,
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(ii)
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that we will implement reasonable and appropriate administrative, organizational, physical and technical safeguards to protect such information from impermissible use or disclosure,
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(iii)
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that we will enter into similar agreements with our agents and subcontractors that have access to the information,
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(iv)
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that we will report breaches of unsecured protected health information, security incidents and other inappropriate uses or disclosures of the information, and
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(v)
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that we will assist the covered entity with certain of its duties under HIPAA.
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Changes in the demand for our products and services. We have experienced and may continue to experience demand uncertainty from both significant increases and decreases in demand as a result of COVID-19. There has been a significant increase in demand for personal protective equipment ("PPE"), drugs and other supplies directly related to treating and preventing the spread of COVID-19. However, either voluntarily or due to government orders or advisories, patients, hospitals and other medical facilities have deferred elective procedures and routine medical visits during the crisis, which created a significant decline in the demand for supplies and services not related to COVID-19 in the fourth quarter of fiscal 2020 and such lower demand is expected to continue into fiscal 2021. In addition, as a result of our members' focus on managing COVID-19 and its impacts, we have experienced a decrease in demand for our consulting and other performance service engagements. Furthermore, during the COVID-19 pandemic, many of our members' non-acute or non-healthcare facilities, such as education and hospitality businesses, closed, operated on a limited or reduced basis and have delayed re-opening, and, as a result, we may see a material reduction in product sales to those facilities. The extent to which these impacts on demand may continue, and the effect they may have on our business and operating results, will depend upon future developments that are highly uncertain and cannot be accurately predicted.
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Limited access to our members' facilities that impacts our ability to fulfill our contractual requirements. Our member hospitals and non-acute care sites have experienced reduced or limited access for non-patients, including our field teams, consultants and other professionals, and travel restrictions have impacted our employees' ability to travel to our members' facilities and the resulting performance on contracts. The long-term continuation, or any future recurrence of these circumstances may negatively impact the ability of our employees to more effectively deliver existing or sell new products and services to our members and could affect our performance of our existing contracts.
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Materials and personnel shortages and disruptions in supply chain, including manufacturing and shipping. The global supply chain has been significantly disrupted due to stay at home orders, border closings and rapidly escalating shipping costs. Borders closings and restrictions in response to COVID-19, particularly regarding China and India, have impacted our access to products for our members. Staffing or personnel shortages due to shelter-in-place orders and quarantines have impacted and, in the future, may impact us and our members or suppliers. In addition, due to unprecedented demand during the COVID-19 pandemic, there are widespread shortages in certain product categories. In the food service line, COVID-19 related illnesses have impacted food processing suppliers and led to plant closures. If the supply chain for materials used in the products purchased by our members through our GPO or products contract manufactured through our direct sourcing business continue to be adversely impacted by restrictions resulting from COVID-19, our supply chain may continue to be disrupted. Failure of our suppliers, contract manufacturers, distributors, contractors and other business partners to meet their obligations to our
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Requests for contract modifications, payment deferrals or exercises of force majeure clauses. We have and may continue to receive requests for contract modifications, payment waivers and deferrals, payment reductions or amended payment terms from our contract counterparties. We have and may continue to receive requests to delay service or payment on performance service contracts. In addition, we may receive requests from our suppliers for increases to their contracted prices, and such requests may be implemented in the future. In addition, several pharmacy suppliers have exercised force majeure clauses related to failure to supply clauses in their contracts with us because they are unable to obtain raw materials for manufacturing from India and China. The standard failure to supply language in our contracts contains financial penalties to suppliers if they are unable to supply products, which such suppliers may not be able to pay. In addition, we may not be able to source products from alternative suppliers on commercially reasonable terms, or at all.
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Overall economic and capital markets decline. The impact of the COVID-19 pandemic could result in a prolonged recession or depression in the United States or globally that could harm the banking system, limit demand for all products and services and cause other foreseen and unforeseen events and circumstances, all of which could negatively impact us. The continued spread of COVID-19 has led to and could continue to lead to severe disruption and volatility in the United States and global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. In addition, trading prices on the public stock market, including our Class A common stock, have been highly volatile as a result of the COVID-19 pandemic.
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Managing the evolving regulatory environment. In response to COVID-19, federal, state and local governments are issuing new rules, regulations, changing reimbursement eligibility rules, orders and advisories on a regular basis. These government actions can impact us and our members and suppliers.
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failing to integrate the operations and personnel of the acquired businesses in an efficient, timely manner, which can be exacerbated by pandemics, such as COVID-19;
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failure of a selling party to produce all material information during the pre-acquisition due diligence process, or to meet their obligations under post-acquisition agreements;
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potential liabilities of or claims against an acquired company or its assets, some of which may not become known until after the acquisition;
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an acquired company's lack of compliance with laws and governmental rules and regulations, and the related costs and expenses necessary to bring such company into compliance;
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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;
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managing the potential disruption to our ongoing business;
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distracting management focus from our existing core businesses;
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encountering difficulties in identifying and acquiring products, technologies, or businesses that will help us execute our business strategy;
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entering new markets in which we have little to no experience;
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impairing relationships with employees, members, and strategic partners;
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failing to implement or remediate controls, procedures and policies appropriate for a public company at acquired companies lacking such financial, disclosure or other controls, procedures and policies, potentially resulting in a material weakness in our internal controls over financial reporting;
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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;
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the amortization of purchased intangible assets;
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incurring expenses associated with an impairment of all or a portion of goodwill and other intangible assets due to the failure of certain acquisitions to realize expected benefits; and
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diluting the share value and voting power of existing stockholders.
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damage from fire, power loss, and other natural disasters;
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communications failures;
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software and hardware errors, failures, and crashes;
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security breaches and computer viruses and similar disruptive problems; and
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other potential interruptions.
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finance unanticipated working capital requirements;
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develop or enhance our technological infrastructure and our existing products and services;
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fund strategic relationships;
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respond to competitive pressures; and
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acquire complementary businesses, assets, technologies, products or services.
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make it difficult for us to satisfy our obligations, including making interest payments on our other debt obligations;
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limit our ability to obtain additional financing to operate our business;
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require us to dedicate a substantial portion of our cash flow to payments on our debt, reducing our ability to use our cash flow to fund capital expenditures and working capital and other general operational requirements;
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limit our flexibility to execute our business strategy and plan for and react to changes in our business and the healthcare industry;
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place us at a competitive disadvantage relative to some of our competitors that have less debt than us;
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limit our ability to pursue acquisitions; and
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increase our vulnerability to general adverse economic and industry conditions, including changes in interest rates or a downturn in our business or the economy.
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our ability to offer new and innovative products and services;
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regulatory changes, including changes in healthcare laws;
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unforeseen legal expenses, including litigation and settlement costs;
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the purchasing and budgeting cycles of our members;
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the lengthy sales cycles for our products and services, which may cause significant delays in generating revenues or an inability to generate revenues;
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pricing pressures with respect to our future sales;
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the timing and success of new product and service offerings by us or by our competitors;
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member decisions regarding renewal or termination of their contracts, especially those involving our larger member relationships;
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the amount and timing of costs related to the maintenance and expansion of our business, operations and infrastructure;
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the amount and timing of costs related to the development, adaptation, acquisition, or integration of acquired technologies or businesses;
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•
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the financial condition of our current and potential new members;
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•
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general economic and market conditions and economic conditions specific to the healthcare industry; and
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•
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the impact of COVID-19 and future pandemics on the economy and healthcare industry.
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register our company and list our FDA-regulated products with the FDA;
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•
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obtain pre-market clearance from the FDA based on demonstration of substantial equivalence to a legally marketed device before marketing our regulated products;
|
•
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obtain FDA approval by demonstrating the safety and effectiveness of the regulated products prior to marketing;
|
•
|
submit to inspections by the FDA; and
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•
|
comply with various FDA regulations, including the agency's quality system regulation, medical device reporting regulations, requirements for medical device modifications, 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.
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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;
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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;
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do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates;
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do not permit stockholders to take action by written consent;
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provide that special meetings of the stockholders may be called only by or at the direction of the Board of Directors, the chair of our Board or the chief executive officer;
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require advance notice to be given by stockholders of any stockholder proposals or director nominees;
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require a super-majority vote of the stockholders to amend our certificate of incorporation; and
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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.
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•
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our Class A common stock;
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•
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the NASDAQ Composite stock index ("NASDAQ Composite Index");
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•
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a customized peer group of 14 companies selected by us that we believe is better aligned with our company (the "Peer Group"); and
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•
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a customized peer group of companies previously used by us (the "Prior Peer Group").
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Value of Investment as of June 30(a):
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||||||||||||
Company/Index Name
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2015
|
2016
|
2017
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2018
|
2019
|
2020
|
||||||||||||
Premier, Inc. Class A Common Stock
|
$
|
100.00
|
|
$
|
85.02
|
|
$
|
93.60
|
|
$
|
94.59
|
|
$
|
101.69
|
|
$
|
89.13
|
|
NASDAQ Composite Index
|
$
|
100.00
|
|
$
|
98.32
|
|
$
|
126.14
|
|
$
|
155.91
|
|
$
|
168.04
|
|
$
|
213.32
|
|
Prior Peer Group
|
$
|
100.00
|
|
$
|
89.79
|
|
$
|
97.18
|
|
$
|
86.21
|
|
$
|
100.81
|
|
$
|
92.52
|
|
Current Peer Group
|
$
|
100.00
|
|
$
|
92.42
|
|
$
|
100.38
|
|
$
|
96.67
|
|
$
|
105.73
|
|
$
|
101.22
|
|
(a)
|
Assumes $100 invested on June 30, 2015, including reinvestment of dividends. As noted above, we have not paid any cash dividends during the period covered by the graph.
|
|
Year Ended June 30,
|
||||||||||||||
|
2020 (1)
|
2019 (2, 3)
|
2018 (2)
|
2017 (2, 4)
|
2016 (2, 5)
|
||||||||||
Consolidated Statements of Income and Comprehensive Income Data:
|
|
|
|
|
|
||||||||||
Net revenue
|
$
|
1,299,592
|
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
$
|
1,066,238
|
|
$
|
958,432
|
|
Cost of revenue
|
432,791
|
|
355,630
|
|
341,997
|
|
308,713
|
|
262,338
|
|
|||||
Gross profit
|
866,801
|
|
862,008
|
|
842,660
|
|
757,525
|
|
696,094
|
|
|||||
Other operating income (6)
|
24,584
|
|
—
|
|
177,174
|
|
5,447
|
|
4,818
|
|
|||||
Operating expenses
|
517,765
|
|
493,494
|
|
479,475
|
|
445,015
|
|
432,387
|
|
|||||
Other income (expense), net (7)
|
10,067
|
|
(375
|
)
|
(22,826
|
)
|
213,571
|
|
18,934
|
|
|||||
Net income from continuing operations (2)
|
291,126
|
|
334,677
|
|
258,007
|
|
449,604
|
|
236,558
|
|
|||||
Income (loss) from discontinued operations, net of tax (2)
|
1,054
|
|
(50,598
|
)
|
(437
|
)
|
(127
|
)
|
(1,397
|
)
|
|||||
Net income
|
292,180
|
|
284,079
|
|
257,570
|
|
449,477
|
|
235,161
|
|
|||||
Net income attributable to non-controlling interest (8)
|
(161,816
|
)
|
(174,959
|
)
|
(224,269
|
)
|
(336,052
|
)
|
(193,547
|
)
|
|||||
Adjustment of redeemable limited partners' capital to redemption amount
|
468,311
|
|
(118,064
|
)
|
157,581
|
|
(37,176
|
)
|
776,750
|
|
|||||
Net income (loss) attributable to stockholders
|
598,675
|
|
(8,944
|
)
|
190,882
|
|
76,249
|
|
818,364
|
|
|||||
|
|
|
|
|
|
||||||||||
Per Share Data:
|
|
|
|
|
|
||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
||||||||||
Basic
|
67,035
|
|
59,188
|
|
53,518
|
|
49,654
|
|
42,368
|
|
|||||
Diluted
|
123,614
|
|
60,269
|
|
137,340
|
|
50,374
|
|
145,308
|
|
|||||
|
|
|
|
|
|
||||||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|||||||||||
Basic earnings (loss) per share
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
8.92
|
|
$
|
0.27
|
|
$
|
3.57
|
|
$
|
1.54
|
|
$
|
19.33
|
|
Discontinued operations
|
0.01
|
|
(0.42
|
)
|
0.00
|
|
—
|
|
(0.01
|
)
|
|||||
Basic earnings (loss) per share attributable to stockholders
|
$
|
8.93
|
|
$
|
(0.15
|
)
|
$
|
3.57
|
|
$
|
1.54
|
|
$
|
19.32
|
|
|
|
|
|
|
|
||||||||||
Diluted earnings (loss) per share
|
|
|
|
|
|
||||||||||
Continuing operations
|
$
|
2.03
|
|
$
|
0.27
|
|
$
|
1.37
|
|
$
|
1.51
|
|
$
|
0.98
|
|
Discontinued operations
|
0.01
|
|
(0.42
|
)
|
(0.01
|
)
|
—
|
|
(0.01
|
)
|
|||||
Diluted earnings (loss) per share attributable to stockholders
|
$
|
2.04
|
|
$
|
(0.15
|
)
|
$
|
1.36
|
|
$
|
1.51
|
|
$
|
0.97
|
|
|
June 30,
|
||||||||||||||
Consolidated Balance Sheets Data:
|
2020
|
2019
|
2018
|
2017
|
2016
|
||||||||||
Cash, cash equivalents and marketable securities, current
|
$
|
99,304
|
|
$
|
141,055
|
|
$
|
152,386
|
|
$
|
156,735
|
|
$
|
266,576
|
|
Working capital (deficit) (9)
|
122,288
|
|
156,022
|
|
(20,264
|
)
|
(162,775
|
)
|
136,827
|
|
|||||
Property and equipment, net
|
206,728
|
|
205,108
|
|
205,349
|
|
185,133
|
|
170,805
|
|
|||||
Total assets
|
2,948,515
|
|
2,569,567
|
|
2,312,216
|
|
2,507,836
|
|
1,855,383
|
|
|||||
Deferred revenue (10)
|
35,446
|
|
35,623
|
|
39,785
|
|
44,443
|
|
54,498
|
|
|||||
Total liabilities
|
1,088,943
|
|
908,547
|
|
818,870
|
|
1,031,506
|
|
669,614
|
|
|||||
Redeemable limited partners' capital (11)
|
1,720,309
|
|
2,523,270
|
|
2,920,410
|
|
3,138,583
|
|
3,137,230
|
|
|||||
Class A common stock
|
716
|
|
644
|
|
575
|
|
519
|
|
460
|
|
|||||
Treasury stock, at cost (12)
|
—
|
|
(87,220
|
)
|
(150,058
|
)
|
—
|
|
—
|
|
|||||
Additional paid-in capital
|
138,547
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|||||
Accumulated deficit
|
—
|
|
(775,674
|
)
|
(1,277,581
|
)
|
(1,662,772
|
)
|
(1,951,878
|
)
|
|||||
Total stockholders' equity (deficit)
|
139,263
|
|
(862,250
|
)
|
(1,427,064
|
)
|
(1,662,253
|
)
|
(1,951,461
|
)
|
(1)
|
Amounts include the results of operations of Medpricer.com, Inc. ("Medpricer"), Acurity, LLC and Nexera, LLC and Contigo Health, LLC ("Contigo Health", f/k/a Health Design Plus, LLC, ("HDP")), from October 28, 2019, February 28, 2020 and May 4, 2020, respectively, the dates of acquisition of all of the outstanding common stock in Medpricer, substantially all of the assets and certain liabilities of Acurity, Inc. and Nexera, Inc. and 97% of the equity of HDP, respectively. See Note 3 - Business Acquisitions to the accompanying audited consolidated financial statements for further information related to the acquisition completed during the year ended June 30, 2020.
|
(2)
|
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 accompanying audited consolidated financial statements for further information.
|
(3)
|
Amounts include the results of operations of Stanson Health, Inc. ("Stanson") from November 9, 2018, the date of acquisition of all the outstanding common stock of Stanson. See Note 3 - Business Acquisitions to the accompanying audited consolidated financial statements for further information related to the acquisition completed during the year ended June 30, 2019.
|
(4)
|
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, LLC ("Innovatix") and Essensa Ventures, LLC ("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 and Comprehensive Income.
|
(5)
|
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.
|
(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 and Comprehensive 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' Equity (Deficit).
|
(7)
|
Other income (expense), 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 income of unconsolidated affiliates that is generated from our equity method investments. Our equity method investments primarily consist of our 49% ownership in FFF Enterprises, Inc. ("FFF"), and prior to the acquisition of Innovatix and Essensa, included our 50% ownership interest in Innovatix. Other income (expense), net, also includes net changes in the fair values of the FFF put and call rights (see Note 6 - Fair Value Measurements to the accompanying audited consolidated financial
|
(8)
|
Net income attributable to non-controlling interest includes net income attributable to non-controlling interest in Premier LP. 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 41% at June 30, 2020.
|
(9)
|
Working capital represents the excess (deficit) of total current assets less total current liabilities attributable to continuing operations. At June 30, 2018 and 2017, working capital deficit includes the $100.3 million and $228.0 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. As of June 30, 2020, redeemable limited partners' capital was classified as temporary equity in the mezzanine section of the accompanying Consolidated Balance Sheets as the withdrawal was at the option of each limited partner and the conditions of the repurchase were 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 years 2018, 2019 and 2020 stock repurchase programs, we purchased 6.4 million, 6.7 million and 4.6 million shares of Class A common stock, respectively, at an average price of $31.16, $37.38 and $32.28 per share, respectively, for a total purchase price of $200.0 million during fiscal year 2018, $250.0 million during fiscal year 2019 and $150.0 million during fiscal year 2020. We used 1.6 million, 9.0 million and 4.6 million treasury shares to settle the exchange of Class B common units during the years ended June 30, 2018, 2019 and 2020, respectively.
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Net revenue
|
$
|
1,299,592
|
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
Net income from continuing operations
|
291,126
|
|
334,677
|
|
258,007
|
|
|||
Non-GAAP Adjusted EBITDA
|
564,040
|
|
561,042
|
|
539,520
|
|
|
Year Ended June 30,
|
|
Change
|
|
% of Net Revenue
|
|||||||||||||||||||||||
Net revenue:
|
2020
|
2019
|
2018
|
|
2020
|
|
2019
|
|
2020
|
2019
|
2018
|
|||||||||||||||||
Supply Chain Services
|
$
|
952,763
|
|
$
|
855,180
|
|
$
|
823,978
|
|
|
$
|
97,583
|
|
11
|
%
|
|
$
|
31,202
|
|
4
|
%
|
|
73
|
%
|
70
|
%
|
70
|
%
|
Performance Services
|
346,829
|
|
362,458
|
|
360,679
|
|
|
(15,629
|
)
|
(4
|
)%
|
|
1,779
|
|
—
|
%
|
|
27
|
%
|
30
|
%
|
30
|
%
|
|||||
Net revenue
|
$
|
1,299,592
|
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
|
$
|
81,954
|
|
7
|
%
|
|
$
|
32,981
|
|
3
|
%
|
|
100
|
%
|
100
|
%
|
100
|
%
|
•
|
Changes in the demand for our products and services. We have experienced and may continue to experience demand uncertainty from both significant increases and decreases in demand as a result of COVID-19. There has been a significant increase in demand for personal protective equipment ("PPE"), drugs and other supplies directly related to treating and preventing the spread of COVID-19. However, either voluntarily or due to government orders or advisories, patients, hospitals and other medical facilities have deferred elective procedures and routine medical visits during the crisis, which created a significant decline in the demand for supplies and services not related to COVID-19 in the fourth quarter of fiscal 2020 and such lower demand is expected to continue into fiscal 2021. In addition, as a result of our members' focus on managing COVID-19 and its impacts, we have experienced a decrease in demand for our consulting and other performance service engagements. Furthermore, during the COVID-19 pandemic, many of our members' non-acute or non-healthcare facilities, such as education and hospitality businesses, closed, operated on a limited or reduced basis and have delayed re-opening, and, as a result, we may see a material reduction in product sales to those facilities. The extent to which these impacts on demand will continue, and the effect that they will have on our business and operating results, will depend upon future developments that are highly uncertain and cannot be accurately predicted.
|
•
|
Limited access to our members' facilities that impacts our ability to fulfill our contractual requirements. Our member hospitals and non-acute care sites have experienced reduced or limited access for non-patients, including our field teams, consultants and other professionals, and travel restrictions have impacted our employees' ability to travel to our members' facilities. The long-term continuation, or any future recurrence of these circumstances may negatively impact the ability of our employees to more effectively deliver existing or sell new products and services to our members and could affect our performance of our existing contracts.
|
•
|
Materials and personnel shortages and disruptions in supply chain, including manufacturing and shipping. The global supply chain has been significantly disrupted due to stay at home orders, border closings and rapidly escalating shipping costs. Borders closings and restrictions in response to COVID-19, particularly regarding China and India, have impacted our access to products for our members. Staffing or personnel shortages due to shelter in place orders and quarantines have impacted and in the future may impact us and our members or suppliers. In addition, due to unprecedented demand during the COVID-19 pandemic, there are widespread shortages in certain product categories. In the food service line, COVID-19 related illnesses have impacted food processing suppliers and led to plant closures. If the supply chain for materials used in the products purchased by our members through our GPO or products contract manufactured through our direct sourcing business is adversely impacted by restrictions resulting from COVID-19, our supply chain may be disrupted. Failure of our suppliers, contract manufacturers, distributors, contractors and other business partners to meet their obligations to our members or to us, or significant disruptions in their ability to do so due to their own financial or operational difficulties, may adversely impact our operations.
|
•
|
Requests for contract modifications, payment deferrals or exercises of force majeure clauses. We have and may continue to receive requests for contract modifications, payment waivers and deferrals, payment reductions or amended payment terms from our contract counterparties. We have and may continue to receive requests to delay service or payment on performance service contracts. In addition, we may receive requests from our suppliers for increases to their contracted prices, and such
|
•
|
Overall economic and capital markets decline. The impact of the COVID-19 pandemic could result in a prolonged recession or depression in the United States or globally that could harm the banking system, limit demand for all products and services and cause other seen and unforeseen events and circumstances, all of which could negatively impact us. The continued spread of COVID-19 has led to and could continue to lead to severe disruption and volatility in the United States and global capital markets, which could increase our cost of capital and adversely affect our ability to access the capital markets in the future. In addition, trading prices on the public stock market, including our Class A common stock, have been highly volatile as a result of the COVID-19 pandemic.
|
•
|
Managing the evolving regulatory environment. In response to COVID-19, federal, state and local governments are issuing new rules, regulations, changing reimbursement eligibility rules, orders and advisories on a regular basis. These government actions can impact us and our members and suppliers.
|
|
Year Ended June 30,
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||||||||
|
|
|
|
|
Previous revenue standard
|
||||||||||||
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|||||||||
Net administrative fees
|
$
|
670,593
|
|
51
|
%
|
|
$
|
662,462
|
|
55%
|
|
$
|
643,839
|
|
54%
|
||
Other services and support
|
359,054
|
|
28
|
%
|
|
371,019
|
|
30%
|
|
368,491
|
|
31%
|
|||||
Services
|
1,029,647
|
|
79
|
%
|
|
1,033,481
|
|
85%
|
|
1,012,330
|
|
85%
|
|||||
Products
|
269,945
|
|
21
|
%
|
|
184,157
|
|
15%
|
|
172,327
|
|
15%
|
|||||
Net revenue
|
1,299,592
|
|
100
|
%
|
|
1,217,638
|
|
100%
|
|
1,184,657
|
|
100%
|
|||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
||||||||
Services
|
188,275
|
|
14
|
%
|
|
182,375
|
|
15%
|
|
187,363
|
|
16%
|
|||||
Products
|
244,516
|
|
19
|
%
|
|
173,255
|
|
14%
|
|
154,634
|
|
13%
|
|||||
Cost of revenue
|
432,791
|
|
33
|
%
|
|
355,630
|
|
29%
|
|
341,997
|
|
29%
|
|||||
Gross profit
|
866,801
|
|
67
|
%
|
|
862,008
|
|
71%
|
|
842,660
|
|
71%
|
|||||
Other operating income:
|
|
|
|
|
|
|
|
|
|
||||||||
Remeasurement of tax receivable agreement liabilities
|
24,584
|
|
2
|
%
|
|
—
|
|
—%
|
|
177,174
|
|
15%
|
|||||
Other operating income
|
24,584
|
|
2
|
%
|
|
—
|
|
—%
|
|
177,174
|
|
15%
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
459,859
|
|
36
|
%
|
|
438,985
|
|
37%
|
|
425,251
|
|
36%
|
|||||
Research and development
|
2,376
|
|
—
|
%
|
|
1,224
|
|
—%
|
|
1,423
|
|
—%
|
|||||
Amortization of purchased intangible assets
|
55,530
|
|
4
|
%
|
|
53,285
|
|
4%
|
|
52,801
|
|
4%
|
|||||
Operating expenses
|
517,765
|
|
40
|
%
|
|
493,494
|
|
41%
|
|
479,475
|
|
40%
|
|||||
Operating income
|
373,620
|
|
29
|
%
|
|
368,514
|
|
30%
|
|
540,359
|
|
46%
|
|||||
Other income (expense), net
|
10,067
|
|
1
|
%
|
|
(375
|
)
|
—%
|
|
(22,826
|
)
|
(2)%
|
|||||
Income before income taxes
|
383,687
|
|
30
|
%
|
|
368,139
|
|
30%
|
|
517,533
|
|
44%
|
|||||
Income tax expense
|
92,561
|
|
8
|
%
|
|
33,462
|
|
3%
|
|
259,526
|
|
22%
|
|||||
Net income from continuing operations
|
291,126
|
|
22
|
%
|
|
334,677
|
|
27%
|
|
258,007
|
|
22%
|
|||||
Income (loss) from discontinued operations, net of tax
|
1,054
|
|
—
|
%
|
|
(50,598
|
)
|
(4)%
|
|
(437
|
)
|
—%
|
|||||
Net income
|
292,180
|
|
22
|
%
|
|
284,079
|
|
23%
|
|
257,570
|
|
22%
|
|||||
Net income from continuing operations attributable to non-controlling interest
|
(161,318
|
)
|
(12
|
)%
|
|
(200,907
|
)
|
(16)%
|
|
(224,548
|
)
|
(19)%
|
|||||
Net (income) loss from discontinued operations attributable to non-controlling interest
|
(498
|
)
|
—
|
%
|
|
25,948
|
|
2
|
%
|
|
279
|
|
—
|
%
|
|||
Net income attributable to non-controlling interest in Premier LP
|
(161,816
|
)
|
(12
|
)%
|
|
(174,959
|
)
|
(14
|
)%
|
|
(224,269
|
)
|
(19
|
)%
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
468,311
|
|
nm
|
|
|
(118,064
|
)
|
nm
|
|
|
157,581
|
|
nm
|
|
|||
Net income (loss) attributable to stockholders
|
$
|
598,675
|
|
nm
|
|
|
$
|
(8,944
|
)
|
nm
|
|
|
$
|
190,882
|
|
nm
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended June 30,
|
||||||||||||||||
|
2020
|
|
2019
|
|
2018
|
||||||||||||
|
|
|
|
|
Previous revenue standard
|
||||||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||||
Basic
|
67,035
|
|
|
|
59,188
|
|
|
|
53,518
|
|
|
||||||
Diluted
|
123,614
|
|
|
|
60,269
|
|
|
|
137,340
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|||||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
|
|
|
|
|
|||||||||
Basic earnings (loss) per share
|
|
|
|
|
|
|
|
|
|||||||||
Continuing operations
|
$
|
8.92
|
|
|
|
$
|
0.27
|
|
|
|
$
|
3.57
|
|
|
|||
Discontinued operations
|
0.01
|
|
|
|
(0.42
|
)
|
|
|
0.00
|
|
|
||||||
Basic earnings (loss) per share attributable to stockholders
|
$
|
8.93
|
|
|
|
$
|
(0.15
|
)
|
|
|
$
|
3.57
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||||||||
Diluted earnings (loss) per share
|
|
|
|
|
|
|
|
|
|||||||||
Continuing operations
|
$
|
2.03
|
|
|
|
$
|
0.27
|
|
|
|
$
|
1.37
|
|
|
|||
Discontinued operations
|
0.01
|
|
|
|
(0.42
|
)
|
|
|
(0.01
|
)
|
|
||||||
Diluted earnings (loss) per share attributable to stockholders
|
$
|
2.04
|
|
|
|
$
|
(0.15
|
)
|
|
|
$
|
1.36
|
|
|
|
Year Ended June 30,
|
|||||||||||||
|
2020
|
|
2019
|
|
2018
|
|||||||||
|
|
|
|
|
Previous revenue standard
|
|||||||||
Certain Non-GAAP Financial Data:
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
|
Amount
|
% of Net Revenue
|
||||||
Adjusted EBITDA
|
$
|
564,040
|
|
43%
|
|
$
|
561,042
|
|
46%
|
|
$
|
539,520
|
|
46%
|
Adjusted Fully Distributed Net Income
|
$
|
337,018
|
|
26%
|
|
$
|
349,052
|
|
29%
|
|
$
|
315,411
|
|
27%
|
Adjusted Fully Distributed Earnings Per Share
|
$
|
2.73
|
|
nm
|
|
$
|
2.66
|
|
nm
|
|
$
|
2.30
|
|
nm
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard
|
||||||
Net income from continuing operations
|
$
|
291,126
|
|
$
|
334,677
|
|
$
|
258,007
|
|
Interest and investment loss, net
|
11,313
|
|
2,471
|
|
5,300
|
|
|||
Income tax expense
|
92,561
|
|
33,462
|
|
259,526
|
|
|||
Depreciation and amortization
|
97,297
|
|
86,879
|
|
70,264
|
|
|||
Amortization of purchased intangible assets
|
55,530
|
|
53,285
|
|
52,801
|
|
|||
EBITDA
|
547,827
|
|
510,774
|
|
645,898
|
|
|||
Stock-based compensation
|
21,132
|
|
29,396
|
|
29,235
|
|
|||
Acquisition and disposition related expenses
|
19,319
|
|
13,154
|
|
8,335
|
|
|||
Remeasurement of tax receivable agreement liabilities
|
(24,584
|
)
|
—
|
|
(177,174
|
)
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard
|
||||||
(Gain) loss on FFF put and call rights
|
(4,690
|
)
|
17
|
|
22,036
|
|
|||
Other expense, net
|
5,036
|
|
7,701
|
|
11,190
|
|
|||
Adjusted EBITDA
|
$
|
564,040
|
|
$
|
561,042
|
|
$
|
539,520
|
|
|
|
|
|
||||||
Income before income taxes
|
$
|
383,687
|
|
$
|
368,139
|
|
$
|
517,533
|
|
Equity in net income of unconsolidated affiliates
|
(12,537
|
)
|
(5,658
|
)
|
(1,174
|
)
|
|||
Interest and investment loss, net
|
11,313
|
|
2,471
|
|
5,300
|
|
|||
(Gain) loss on FFF put and call rights
|
(4,690
|
)
|
17
|
|
22,036
|
|
|||
Other (income) expense
|
(4,153
|
)
|
3,545
|
|
(3,336
|
)
|
|||
Operating income
|
373,620
|
|
368,514
|
|
540,359
|
|
|||
Depreciation and amortization
|
97,297
|
|
86,879
|
|
70,264
|
|
|||
Amortization of purchased intangible assets
|
55,530
|
|
53,285
|
|
52,801
|
|
|||
Stock-based compensation
|
21,132
|
|
29,396
|
|
29,235
|
|
|||
Acquisition and disposition related expenses
|
19,319
|
|
13,154
|
|
8,335
|
|
|||
Remeasurement of tax receivable agreement liabilities
|
(24,584
|
)
|
—
|
|
(177,174
|
)
|
|||
Equity in net income of unconsolidated affiliates
|
12,537
|
|
5,658
|
|
1,174
|
|
|||
Deferred compensation plan expense
|
3,904
|
|
2,546
|
|
3,960
|
|
|||
Other expense, net
|
5,285
|
|
1,610
|
|
10,566
|
|
|||
Adjusted EBITDA
|
$
|
564,040
|
|
$
|
561,042
|
|
$
|
539,520
|
|
|
|
|
|
||||||
Segment Adjusted EBITDA:
|
|
|
|
||||||
Supply Chain Services
|
$
|
570,298
|
|
$
|
548,029
|
|
$
|
531,851
|
|
Performance Services
|
111,282
|
|
129,147
|
|
123,429
|
|
|||
Corporate
|
(117,540
|
)
|
(116,134
|
)
|
(115,760
|
)
|
|||
Adjusted EBITDA
|
$
|
564,040
|
|
$
|
561,042
|
|
$
|
539,520
|
|
(a)
|
Reflects income tax expense at our estimated effective income tax rate of 26% of adjusted fully distributed net income before income taxes for the years ended June 30, 2020 and 2019, and 32% of adjusted fully distributed income before income taxes for the year ended June 30, 2018.
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard
|
||||||
Earnings (loss) per share attributable to stockholders
|
$
|
8.93
|
|
$
|
(0.15
|
)
|
$
|
3.57
|
|
Adjustment of redeemable limited partners' capital to redemption amount
|
(6.99
|
)
|
1.99
|
|
(2.94
|
)
|
|||
Net income attributable to non-controlling interest in Premier LP
|
2.41
|
|
2.96
|
|
4.19
|
|
|||
(Income) loss from discontinued operations, net of tax
|
(0.02
|
)
|
0.85
|
|
0.01
|
|
|||
Income tax expense
|
1.38
|
|
0.57
|
|
4.85
|
|
|||
Amortization of purchased intangible assets
|
0.83
|
|
0.90
|
|
0.99
|
|
|||
Stock-based compensation
|
0.32
|
|
0.50
|
|
0.55
|
|
|||
Acquisition and disposition related expenses
|
0.29
|
|
0.22
|
|
0.16
|
|
|||
Remeasurement of tax receivable agreement liabilities
|
(0.37
|
)
|
—
|
|
(3.31
|
)
|
|||
(Gain) loss on FFF put and call rights
|
(0.07
|
)
|
—
|
|
0.41
|
|
|||
Other expense, net
|
0.08
|
|
0.12
|
|
0.21
|
|
|||
Impact of corporation taxes (a)
|
(1.77
|
)
|
(2.07
|
)
|
(2.78
|
)
|
|||
Impact of dilutive shares (b)
|
(2.29
|
)
|
(3.23
|
)
|
(3.61
|
)
|
|||
Adjusted Fully Distributed Earnings Per Share
|
$
|
2.73
|
|
$
|
2.66
|
|
$
|
2.30
|
|
(a)
|
Reflects income tax expense at our estimated effective income tax rate of 26% of adjusted fully distributed net income before income taxes for the years ended June 30, 2020 and 2019, and 32% of adjusted fully distributed income before income taxes for the year ended June 30, 2018.
|
(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
|
||||||||||||||||||
|
2020
|
2019
|
2018
|
|
2020 vs 2019
|
|
2019 vs 2018 (previous revenue standard)
|
||||||||||||||
Supply Chain Services
|
|
|
Previous revenue standard
|
|
|
||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net administrative fees
|
$
|
670,593
|
|
$
|
662,462
|
|
$
|
643,839
|
|
|
$
|
8,131
|
|
1
|
%
|
|
$
|
18,623
|
|
3
|
%
|
Other services and support
|
12,225
|
|
8,561
|
|
7,812
|
|
|
3,664
|
|
43
|
%
|
|
749
|
|
10
|
%
|
|||||
Services
|
682,818
|
|
671,023
|
|
651,651
|
|
|
11,795
|
|
2
|
%
|
|
19,372
|
|
3
|
%
|
|||||
Products
|
269,945
|
|
184,157
|
|
172,327
|
|
|
85,788
|
|
47
|
%
|
|
11,830
|
|
7
|
%
|
|||||
Net revenue
|
952,763
|
|
855,180
|
|
823,978
|
|
|
97,583
|
|
11
|
%
|
|
31,202
|
|
4
|
%
|
|||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Services
|
432
|
|
228
|
|
4,844
|
|
|
204
|
|
89
|
%
|
|
(4,616
|
)
|
(95
|
)%
|
|||||
Products
|
244,516
|
|
173,255
|
|
154,634
|
|
|
71,261
|
|
41
|
%
|
|
18,621
|
|
12
|
%
|
|||||
Cost of revenue
|
244,948
|
|
173,483
|
|
159,478
|
|
|
71,465
|
|
41
|
%
|
|
14,005
|
|
9
|
%
|
|||||
Gross profit
|
707,815
|
|
681,697
|
|
664,500
|
|
|
26,118
|
|
4
|
%
|
|
17,197
|
|
3
|
%
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
163,727
|
|
147,665
|
|
148,901
|
|
|
16,062
|
|
11
|
%
|
|
(1,236
|
)
|
(1
|
)%
|
|||||
Research and development
|
27
|
|
—
|
|
—
|
|
|
27
|
|
nm
|
|
|
—
|
|
nm
|
|
|||||
Amortization of intangibles
|
22,924
|
|
17,516
|
|
17,469
|
|
|
5,408
|
|
31
|
%
|
|
47
|
|
—
|
%
|
|||||
Operating expenses
|
186,678
|
|
165,181
|
|
166,370
|
|
|
21,497
|
|
13
|
%
|
|
(1,189
|
)
|
(1
|
)%
|
|||||
Operating income
|
$
|
521,137
|
|
$
|
516,516
|
|
$
|
498,130
|
|
|
$
|
4,621
|
|
1
|
%
|
|
$
|
18,386
|
|
4
|
%
|
Depreciation and amortization
|
3,044
|
|
1,102
|
|
570
|
|
|
|
|
|
|
|
|||||||||
Amortization of purchased intangible assets
|
22,924
|
|
17,516
|
|
17,469
|
|
|
|
|
|
|
|
|||||||||
Acquisition & disposition related expenses
|
10,495
|
|
7,946
|
|
8,606
|
|
|
|
|
|
|
|
|||||||||
Equity in net income of unconsolidated affiliates
|
12,306
|
|
4,943
|
|
1,904
|
|
|
|
|
|
|
|
|||||||||
Other expense, net
|
392
|
|
6
|
|
5,172
|
|
|
|
|
|
|
|
|||||||||
Segment Adjusted EBITDA
|
$
|
570,298
|
|
$
|
548,029
|
|
$
|
531,851
|
|
|
$
|
22,269
|
|
4
|
%
|
|
$
|
16,178
|
|
3
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||
|
2020
|
2019
|
2018
|
|
2020 vs 2019
|
|
2019 vs 2018 (previous revenue standard)
|
||||||||||||||
Performance Services
|
|
|
Previous revenue standard
|
|
|
||||||||||||||||
Net revenue:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Other services and support
|
$
|
346,829
|
|
$
|
362,458
|
|
$
|
360,679
|
|
|
$
|
(15,629
|
)
|
(4
|
)%
|
|
$
|
1,779
|
|
—
|
%
|
Services
|
346,829
|
|
362,458
|
|
360,679
|
|
|
(15,629
|
)
|
(4
|
)%
|
|
1,779
|
|
—
|
%
|
|||||
Net revenue
|
346,829
|
|
362,458
|
|
360,679
|
|
|
(15,629
|
)
|
(4
|
)%
|
|
1,779
|
|
—
|
%
|
|||||
Cost of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Services
|
187,843
|
|
182,147
|
|
182,519
|
|
|
5,696
|
|
3
|
%
|
|
(372
|
)
|
—
|
%
|
|||||
Cost of revenue
|
187,843
|
|
182,147
|
|
182.519
|
|
|
5,696
|
|
3
|
%
|
|
(372
|
)
|
(204
|
)%
|
|||||
Gross profit
|
158,986
|
|
180,311
|
|
178,160
|
|
|
(21,325
|
)
|
(12
|
)%
|
|
2,151
|
|
1
|
%
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
140,416
|
|
130,827
|
|
114,088
|
|
|
9,589
|
|
7
|
%
|
|
16,739
|
|
15
|
%
|
|||||
Research and development
|
2,344
|
|
1,213
|
|
1,418
|
|
|
1,131
|
|
93
|
%
|
|
(205
|
)
|
(14
|
)%
|
|||||
Amortization of intangibles
|
32,606
|
|
35,769
|
|
35,331
|
|
|
(3,163
|
)
|
(9
|
)%
|
|
438
|
|
1
|
%
|
|||||
Operating expenses
|
175,366
|
|
167,809
|
|
150,837
|
|
|
7,557
|
|
5
|
%
|
|
16,972
|
|
11
|
%
|
|||||
Operating (loss) income
|
$
|
(16,380
|
)
|
$
|
12,502
|
|
$
|
27,323
|
|
|
$
|
(28,882
|
)
|
(231)%
|
|
$
|
(14,821
|
)
|
(54)%
|
||
Depreciation and amortization
|
85,950
|
|
74,812
|
|
60,476
|
|
|
|
|
|
|
|
|
||||||||
Amortization of purchased intangible assets
|
32,606
|
|
35,769
|
|
35,331
|
|
|
|
|
|
|
|
|
||||||||
Acquisition & disposition related expenses (income)
|
8,825
|
|
5,208
|
|
(271
|
)
|
|
|
|
|
|
|
|
||||||||
Equity in net income (loss) of unconsolidated affiliates
|
231
|
|
715
|
|
(730
|
)
|
|
|
|
|
|
|
|
||||||||
Other expense, net
|
50
|
|
141
|
|
1,300
|
|
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA
|
$
|
111,282
|
|
$
|
129,147
|
|
$
|
123,429
|
|
|
$
|
(17,865
|
)
|
(14
|
)%
|
|
$
|
5,718
|
|
5
|
%
|
|
Year Ended June 30,
|
|
Change
|
||||||||||||||||||
Corporate
|
2020
|
2019
|
2018
|
|
2020 vs 2019
|
|
2019 vs 2018 (previous revenue standard)
|
||||||||||||||
Other operating income:
|
|
|
|
|
|
|
|
|
|
||||||||||||
Remeasurement of tax receivable agreement liabilities
|
$
|
24,584
|
|
$
|
—
|
|
$
|
177,174
|
|
|
$
|
24,584
|
|
—
|
%
|
|
$
|
(177,174
|
)
|
nm
|
|
Other operating income
|
24,584
|
|
—
|
|
177,174
|
|
|
24,584
|
|
—
|
%
|
|
(177,174
|
)
|
nm
|
|
|||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Selling, general and administrative
|
155,716
|
|
160,493
|
|
162,262
|
|
|
(4,777
|
)
|
(3
|
)%
|
|
(1,769
|
)
|
(1
|
)%
|
|||||
Research and development
|
5
|
|
11
|
|
6
|
|
|
(6
|
)
|
(55
|
)%
|
|
5
|
|
83
|
%
|
|||||
Operating expenses
|
155,721
|
|
160,504
|
|
162,268
|
|
|
(4,783
|
)
|
(3
|
)%
|
|
(1,764
|
)
|
(1
|
)%
|
|||||
Operating loss
|
$
|
(131,137
|
)
|
$
|
(160,504
|
)
|
$
|
14,906
|
|
|
$
|
29,367
|
|
(18
|
)%
|
|
$
|
(175,410
|
)
|
nm
|
|
Depreciation and amortization
|
8,303
|
|
10,965
|
|
9,217
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
21,132
|
|
29,396
|
|
29,235
|
|
|
|
|
|
|
|
|
||||||||
Remeasurement of tax receivable agreement liabilities
|
(24,584
|
)
|
—
|
|
(177,174
|
)
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan income
|
3,904
|
|
2,546
|
|
3,960
|
|
|
|
|
|
|
|
|
||||||||
Other expense, net
|
4,842
|
|
1,463
|
|
4,096
|
|
|
|
|
|
|
|
|
||||||||
Adjusted EBITDA
|
$
|
(117,540
|
)
|
$
|
(116,134
|
)
|
$
|
(115,760
|
)
|
|
$
|
(1,406
|
)
|
1
|
%
|
|
$
|
(374
|
)
|
—
|
%
|
•
|
We have experienced and may continue to experience demand uncertainty from both significant increases in demand for PPE, drugs and other products related to the treatment of COVID-19 and decreases in demand for non-COVID-19 related products.
|
•
|
Our GPO member hospitals and non-acute care sites have experienced reduced or limited access for non-patients, including our field teams, consultants and other professionals, and travel restrictions have impacted our employees' ability to travel to our members' facilities.
|
•
|
The global supply chain has been significantly disrupted due to stay at home orders, border closings and rapidly escalating shipping costs.
|
•
|
We have and may continue to receive requests for contract modifications, payment waivers and deferrals, payment reductions or amended payment terms from our contract counterparties. In addition, several pharmacy suppliers have exercised force majeure clauses related to failure to supply clauses in their contracts with us.
|
•
|
The impact of the COVID-19 pandemic could result in a prolonged recession or depression in the United States or globally that could harm the banking system, limit demand for all products and services and cause other seen and unforeseen events and circumstances, all of which could negatively impact us.
|
•
|
In response to COVID-19, federal, state and local governments are issuing new rules, regulations, changing reimbursement eligibility rules, orders and advisories on a regular basis. These government actions can impact us and our members and suppliers.
|
|
Year Ended June 30,
|
|||||
|
2020
|
2019
|
||||
Net cash provided by (used in):
|
|
|
||||
Operating activities
|
$
|
339,888
|
|
$
|
511,938
|
|
Investing activities
|
(222,322
|
)
|
(129,274
|
)
|
||
Financing activities
|
(168,953
|
)
|
(387,200
|
)
|
||
Operating and investing activities from discontinued operations
|
9,636
|
|
(6,795
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(41,751
|
)
|
$
|
(11,331
|
)
|
|
Year Ended June 30,
|
|||||
|
2020
|
2019
|
||||
Net cash provided by operating activities from continuing operations (a)
|
$
|
427,183
|
|
$
|
511,938
|
|
Purchases of property and equipment
|
(94,397
|
)
|
(93,385
|
)
|
||
Distributions to limited partners of Premier LP
|
(48,904
|
)
|
(57,825
|
)
|
||
Payments to limited partners of Premier LP related to tax receivable agreements
|
(17,425
|
)
|
(17,975
|
)
|
||
Non-GAAP Free Cash Flow
|
$
|
266,457
|
|
$
|
342,753
|
|
(a)
|
Net cash provided by operating activities from continuing operations excludes the impact of the prepaid administrative fee share for one-time rebates paid by Acurity, Inc. to certain of its then members, as agreed to by Acurity, Inc. prior to entering into the Purchase Agreement and the net change in the aforementioned prepaid administrative fee share capitalized on the Consolidated Balance Sheets as of June 30, 2020.
|
|
|
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)(b)
|
$
|
293,670
|
|
$
|
13,689
|
|
$
|
36,549
|
|
$
|
39,066
|
|
$
|
204,366
|
|
Operating lease obligations (c)
|
70,414
|
|
12,171
|
|
23,750
|
|
24,322
|
|
10,171
|
|
|||||
Notes payable (d)
|
9,200
|
|
4,560
|
|
2,360
|
|
2,280
|
|
—
|
|
|||||
Deferred consideration (e)
|
118,320
|
|
34,620
|
|
56,513
|
|
27,187
|
|
—
|
|
|||||
Total contractual obligations
|
$
|
491,604
|
|
$
|
65,040
|
|
$
|
119,172
|
|
$
|
92,855
|
|
$
|
214,537
|
|
(a)
|
Estimated payments due to limited partners under the TRA are based on 85% of the estimated amount of tax savings we expect to receive, generally over a 15-year period.
|
(b)
|
On August 10, 2020, Premier exercised its right to terminate the TRA providing all former limited partners a notice of the termination and the amount of the expected payment to be made to each former limited partner pursuant to the early termination provisions of the TRA (each such amount an "Early Termination Payment") with a determination date of August 10, 2020. The aggregate amount of the Early Termination Payments is approximately $473.5 million. Of that amount, approximately $10.6 million is payable within three business days after the date the Early Termination Payment becomes final, which is expected to be on or about September 15, 2020, to former limited partners that did not elect to execute Unit Exchange Agreements. Pursuant to the Unit Exchange Agreements, the remaining amount payable, approximately $462.9 million in the aggregate, will be paid, without interest, to former limited partners that elected to execute Unit Exchange Agreements in 18 equal quarterly installments commencing during the quarter ended March 31, 2021 and ending in the quarter ending June 30, 2025.
|
(c)
|
Future contractual obligations for leases represent future minimum payments under noncancelable operating leases primarily for office space.
|
(d)
|
Notes payable are non-interest bearing and represent an aggregate principal amount of $9.2 million owed to departed member owners, generally payable over five years from the respective departure dates.
|
(e)
|
Additional consideration to be paid pursuant to the Purchase Agreement for the Acurity and Nexera asset acquisition.
|
PREMIER, INC.
|
||||||
Consolidated Balance Sheets
|
||||||
(In thousands, except per share data)
|
||||||
|
|
|
||||
|
June 30, 2020
|
June 30, 2019
|
||||
Assets
|
|
|
||||
Cash and cash equivalents
|
$
|
99,304
|
|
$
|
141,055
|
|
Accounts receivable (net of $731 and $739 allowance for doubtful accounts, respectively)
|
135,063
|
|
168,115
|
|
||
Contract assets
|
215,660
|
|
205,509
|
|
||
Inventory
|
70,997
|
|
51,032
|
|
||
Prepaid expenses and other current assets
|
97,338
|
|
23,765
|
|
||
Current assets of discontinued operations
|
—
|
|
24,568
|
|
||
Total current assets
|
618,362
|
|
614,044
|
|
||
Property and equipment (net of $452,609 and $359,235 accumulated depreciation, respectively)
|
206,728
|
|
205,108
|
|
||
Intangible assets (net of $245,160 and $197,858 accumulated amortization, respectively)
|
417,422
|
|
270,722
|
|
||
Goodwill
|
941,965
|
|
880,709
|
|
||
Deferred income tax assets
|
430,025
|
|
422,014
|
|
||
Deferred compensation plan assets
|
49,175
|
|
45,466
|
|
||
Investments in unconsolidated affiliates
|
133,335
|
|
99,636
|
|
||
Operating lease right-of-use assets
|
57,823
|
|
—
|
|
||
Other assets
|
93,680
|
|
31,868
|
|
||
Total assets
|
$
|
2,948,515
|
|
$
|
2,569,567
|
|
|
|
|
||||
Liabilities, redeemable limited partners' capital and stockholders' equity (deficit)
|
|
|
||||
Accounts payable
|
$
|
54,841
|
|
$
|
54,540
|
|
Accrued expenses
|
53,500
|
|
82,476
|
|
||
Revenue share obligations
|
145,777
|
|
137,359
|
|
||
Limited partners' distribution payable
|
8,012
|
|
13,202
|
|
||
Accrued compensation and benefits
|
73,262
|
|
70,799
|
|
||
Deferred revenue
|
35,446
|
|
35,623
|
|
||
Current portion of tax receivable agreements
|
13,689
|
|
17,505
|
|
||
Line of credit and current portion of long-term debt
|
79,560
|
|
27,608
|
|
||
Other liabilities
|
31,987
|
|
7,113
|
|
||
Current liabilities of discontinued operations
|
—
|
|
11,797
|
|
||
Total current liabilities
|
496,074
|
|
458,022
|
|
||
Long-term debt, less current portion
|
4,640
|
|
6,003
|
|
||
Tax receivable agreements, less current portion
|
279,981
|
|
326,607
|
|
||
Deferred compensation plan obligations
|
49,175
|
|
45,466
|
|
||
Deferred tax liabilities
|
17,508
|
|
4,766
|
|
||
Deferred consideration
|
112,917
|
|
—
|
|
||
Operating lease liabilities, less current portion
|
52,990
|
|
—
|
|
||
Other liabilities
|
75,658
|
|
67,683
|
|
||
Total liabilities
|
1,088,943
|
|
908,547
|
|
PREMIER, INC.
|
||||||
Consolidated Balance Sheets
|
||||||
(In thousands, except per share data)
|
||||||
|
|
|
||||
|
June 30, 2020
|
June 30, 2019
|
||||
Commitments and contingencies (Note 18)
|
|
|
||||
Redeemable limited partners' capital
|
1,720,309
|
|
2,523,270
|
|
||
Stockholders' equity (deficit):
|
|
|
||||
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 71,627,462 shares issued and outstanding at June 30, 2020 and 64,357,305 shares issued and 61,938,157 shares outstanding at June 30, 2019
|
716
|
|
644
|
|
||
Class B common stock, $0.000001 par value, 600,000,000 shares authorized; 50,213,098 and 64,548,044 shares issued and outstanding at June 30, 2020 and June 30, 2019, respectively
|
—
|
|
—
|
|
||
Treasury stock, at cost; 0 and 2,419,148 shares at June 30, 2020 and June 30, 2019, respectively
|
—
|
|
(87,220
|
)
|
||
Additional paid-in-capital
|
138,547
|
|
—
|
|
||
Accumulated deficit
|
—
|
|
(775,674
|
)
|
||
Total stockholders' equity (deficit)
|
139,263
|
|
(862,250
|
)
|
||
Total liabilities, redeemable limited partners' capital and stockholders' equity (deficit)
|
$
|
2,948,515
|
|
$
|
2,569,567
|
|
PREMIER, INC.
|
|||||||||
Consolidated Statements of Income and Comprehensive Income
|
|||||||||
(In thousands, except share data)
|
|||||||||
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Net revenue:
|
|
|
|
||||||
Net administrative fees
|
$
|
670,593
|
|
$
|
662,462
|
|
$
|
643,839
|
|
Other services and support
|
359,054
|
|
371,019
|
|
368,491
|
|
|||
Services
|
1,029,647
|
|
1,033,481
|
|
1,012,330
|
|
|||
Products
|
269,945
|
|
184,157
|
|
172,327
|
|
|||
Net revenue
|
1,299,592
|
|
1,217,638
|
|
1,184,657
|
|
|||
Cost of revenue:
|
|
|
|
||||||
Services
|
188,275
|
|
182,375
|
|
187,363
|
|
|||
Products
|
244,516
|
|
173,255
|
|
154,634
|
|
|||
Cost of revenue
|
432,791
|
|
355,630
|
|
341,997
|
|
|||
Gross profit
|
866,801
|
|
862,008
|
|
842,660
|
|
|||
Other operating income:
|
|
|
|
||||||
Remeasurement of tax receivable agreement liabilities
|
24,584
|
|
—
|
|
177,174
|
|
|||
Other operating income
|
24,584
|
|
—
|
|
177,174
|
|
|||
Operating expenses:
|
|
|
|
||||||
Selling, general and administrative
|
459,859
|
|
438,985
|
|
425,251
|
|
|||
Research and development
|
2,376
|
|
1,224
|
|
1,423
|
|
|||
Amortization of purchased intangible assets
|
55,530
|
|
53,285
|
|
52,801
|
|
|||
Operating expenses
|
517,765
|
|
493,494
|
|
479,475
|
|
|||
Operating income
|
373,620
|
|
368,514
|
|
540,359
|
|
|||
Equity in net income of unconsolidated affiliates
|
12,537
|
|
5,658
|
|
1,174
|
|
|||
Interest and investment (loss) income, net
|
(11,313
|
)
|
(2,471
|
)
|
(5,300
|
)
|
|||
Gain (loss) on FFF put and call rights
|
4,690
|
|
(17
|
)
|
(22,036
|
)
|
|||
Other income (expense)
|
4,153
|
|
(3,545
|
)
|
3,336
|
|
|||
Other income (expense), net
|
10,067
|
|
(375
|
)
|
(22,826
|
)
|
|||
Income before income taxes
|
383,687
|
|
368,139
|
|
517,533
|
|
|||
Income tax expense
|
92,561
|
|
33,462
|
|
259,526
|
|
|||
Net income from continuing operations
|
291,126
|
|
334,677
|
|
258,007
|
|
|||
Income (loss) from discontinued operations, net of tax
|
1,054
|
|
(50,598
|
)
|
(437
|
)
|
|||
Net income
|
292,180
|
|
284,079
|
|
257,570
|
|
|||
Net income from continuing operations attributable to non-controlling interest
|
(161,318
|
)
|
(200,907
|
)
|
(224,548
|
)
|
|||
Net (income) loss from discontinued operations attributable to non-controlling interest
|
(498
|
)
|
25,948
|
|
279
|
|
|||
Net income attributable to non-controlling interest in Premier LP
|
(161,816
|
)
|
(174,959
|
)
|
(224,269
|
)
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
468,311
|
|
(118,064
|
)
|
157,581
|
|
|||
Net income (loss) attributable to stockholders
|
$
|
598,675
|
|
$
|
(8,944
|
)
|
$
|
190,882
|
|
|
|
|
|
||||||
Comprehensive income:
|
|
|
|
||||||
Net income
|
$
|
292,180
|
|
$
|
284,079
|
|
$
|
257,570
|
|
Less: comprehensive income attributable to noncontrolling interest
|
(161,816
|
)
|
(174,959
|
)
|
(224,269
|
)
|
|||
Comprehensive income attributable to stockholders
|
$
|
130,364
|
|
$
|
109,120
|
|
$
|
33,301
|
|
|
|
|
|
PREMIER, INC.
|
|||||||||
Consolidated Statements of Income and Comprehensive Income
|
|||||||||
(In thousands, except share data)
|
|||||||||
|
|
|
|
||||||
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Weighted average shares outstanding:
|
|
|
|
||||||
Basic
|
67,035
|
|
59,188
|
|
53,518
|
|
|||
Diluted
|
123,614
|
|
60,269
|
|
137,340
|
|
|||
|
|
|
|
||||||
Earnings (loss) per share attributable to stockholders:
|
|
|
|
||||||
Basic earnings (loss) per share
|
|
|
|
||||||
Continuing operations
|
$
|
8.92
|
|
$
|
0.27
|
|
$
|
3.57
|
|
Discontinued operations
|
0.01
|
|
(0.42
|
)
|
0.00
|
|
|||
Basic earnings (loss) per share attributable to stockholders
|
$
|
8.93
|
|
$
|
(0.15
|
)
|
$
|
3.57
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share
|
|
|
|
||||||
Continuing operations
|
$
|
2.03
|
|
$
|
0.27
|
|
$
|
1.37
|
|
Discontinued operations
|
0.01
|
|
(0.42
|
)
|
(0.01
|
)
|
|||
Diluted earnings (loss) per share attributable to stockholders
|
$
|
2.04
|
|
$
|
(0.15
|
)
|
$
|
1.36
|
|
PREMIER, INC.
|
||||||||||||||||||||||||
Consolidated Statements of Stockholders' Equity (Deficit)
|
||||||||||||||||||||||||
(In thousands, except share data)
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Class A
Common Stock
|
Class B
Common Stock
|
Treasury Stock
|
Additional Paid-In Capital
|
(Accumulated Deficit) Retained Earnings
|
Total Stockholders' Equity (Deficit)
|
||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
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
|
)
|
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 Stockholders' Equity (Deficit)
|
||||||||||||||||||||||||
(In thousands, except share data)
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Class A
Common Stock
|
Class B
Common Stock
|
Treasury Stock
|
Additional Paid-In Capital
|
(Accumulated Deficit) Retained Earnings
|
Total Stockholders' Equity (Deficit)
|
||||||||||||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||||||||||||
Balance at July 1, 2019
|
61,938
|
|
644
|
|
64,548
|
|
—
|
|
2,419
|
|
(87,220
|
)
|
—
|
|
(775,674
|
)
|
(862,250
|
)
|
||||||
Impact of change in accounting principle
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(899
|
)
|
(899
|
)
|
||||||
Adjusted balance at July 1, 2019
|
61,938
|
|
644
|
|
64,548
|
|
—
|
|
2,419
|
|
(87,220
|
)
|
—
|
|
(776,573
|
)
|
(863,149
|
)
|
||||||
Exchange of Class B units for Class A common stock by member owners
|
13,552
|
|
65
|
|
(13,553
|
)
|
—
|
|
(7,065
|
)
|
237,313
|
|
223,215
|
|
—
|
|
460,593
|
|
||||||
Redemption of limited partners
|
—
|
|
—
|
|
(782
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
||||||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
71,568
|
|
—
|
|
71,568
|
|
||||||
Issuance of Class A common stock under equity incentive plan
|
703
|
|
7
|
|
—
|
|
—
|
|
—
|
|
—
|
|
6,654
|
|
—
|
|
6,661
|
|
||||||
Issuance of Class A common stock under employee stock purchase plan
|
80
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,832
|
|
—
|
|
2,832
|
|
||||||
Treasury stock
|
(4,646
|
)
|
—
|
|
—
|
|
—
|
|
4,646
|
|
(150,093
|
)
|
—
|
|
—
|
|
(150,093
|
)
|
||||||
Stock-based compensation expense
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
20,706
|
|
—
|
|
20,706
|
|
||||||
Repurchase of vested restricted units for employee tax-withholding
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(8,530
|
)
|
—
|
|
(8,530
|
)
|
||||||
Net income
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
292,180
|
|
292,180
|
|
||||||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(161,816
|
)
|
(161,816
|
)
|
||||||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(177,898
|
)
|
646,209
|
|
468,311
|
|
||||||
Balance at June 30, 2020
|
71,627
|
|
$
|
716
|
|
50,213
|
|
$
|
—
|
|
—
|
|
$
|
—
|
|
$
|
138,547
|
|
$
|
—
|
|
$
|
139,263
|
|
PREMIER, INC.
|
|||||||||
Consolidated Statement of Cash Flows
|
|||||||||
(In thousands)
|
|||||||||
|
|
||||||||
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Operating activities
|
|
|
|
||||||
Net income
|
$
|
292,180
|
|
$
|
284,079
|
|
$
|
257,570
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||||
(Income) loss from discontinued operations, net of tax
|
(1,054
|
)
|
50,598
|
|
437
|
|
|||
Depreciation and amortization
|
152,827
|
|
140,164
|
|
123,065
|
|
|||
Equity in net income of unconsolidated affiliates
|
(12,537
|
)
|
(5,658
|
)
|
(1,174
|
)
|
|||
Deferred income taxes
|
67,980
|
|
11,878
|
|
233,282
|
|
|||
Stock-based compensation
|
20,706
|
|
29,001
|
|
28,844
|
|
|||
Remeasurement of tax receivable agreement liabilities
|
(24,584
|
)
|
—
|
|
(177,174
|
)
|
|||
Impairment of held to maturity investments
|
8,500
|
|
—
|
|
—
|
|
|||
(Gain) loss on FFF put and call rights
|
(4,690
|
)
|
17
|
|
22,036
|
|
|||
Other
|
853
|
|
9,443
|
|
8,583
|
|
|||
Changes in operating assets and liabilities, net of the effects of acquisitions:
|
|
|
|
||||||
Accounts receivable, inventories, prepaid expenses and other assets
|
(121,735
|
)
|
(11,100
|
)
|
(27,164
|
)
|
|||
Contract assets
|
(8,205
|
)
|
(36,549
|
)
|
—
|
|
|||
Accounts payable, accrued expenses, deferred revenue, revenue share obligations and other liabilities
|
(30,353
|
)
|
40,065
|
|
36,953
|
|
|||
Net cash provided by operating activities from continuing operations
|
339,888
|
|
511,938
|
|
505,258
|
|
|||
Net cash provided by (used in) operating activities from discontinued operations
|
9,636
|
|
(6,599
|
)
|
2,448
|
|
|||
Net cash provided by operating activities
|
349,524
|
|
505,339
|
|
507,706
|
|
|||
Investing activities
|
|
|
|
||||||
Purchases of property and equipment
|
(94,397
|
)
|
(93,385
|
)
|
(92,425
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(121,640
|
)
|
(50,854
|
)
|
—
|
|
|||
Proceeds from sale of assets
|
3,632
|
|
22,731
|
|
—
|
|
|||
Investments in unconsolidated affiliates
|
(10,165
|
)
|
—
|
|
—
|
|
|||
Other
|
248
|
|
(7,766
|
)
|
—
|
|
|||
Net cash used in investing activities from continuing operations
|
(222,322
|
)
|
(129,274
|
)
|
(92,425
|
)
|
|||
Net cash used in investing activities from discontinued operations
|
—
|
|
(196
|
)
|
(255
|
)
|
|||
Net cash used in investing activities
|
(222,322
|
)
|
(129,470
|
)
|
(92,680
|
)
|
|||
Financing activities
|
|
|
|
||||||
Payments made on notes payable
|
(2,419
|
)
|
(676
|
)
|
(8,002
|
)
|
|||
Proceeds from credit facility
|
400,000
|
|
50,000
|
|
30,000
|
|
|||
Distributions to limited partners of Premier LP
|
(48,904
|
)
|
(57,825
|
)
|
(79,255
|
)
|
|||
Payments on credit facility
|
(350,000
|
)
|
(125,000
|
)
|
(150,000
|
)
|
|||
Payments to limited partners of Premier LP related to tax receivable agreements
|
(17,425
|
)
|
(17,975
|
)
|
—
|
|
|||
Repurchase of Class A common stock (held as treasury stock)
|
(150,093
|
)
|
(250,133
|
)
|
(200,129
|
)
|
|||
Earn-out liability payment to GNYHA Holdings
|
—
|
|
—
|
|
(16,662
|
)
|
|||
Other
|
(112
|
)
|
14,409
|
|
4,673
|
|
|||
Net cash used in financing activities
|
(168,953
|
)
|
(387,200
|
)
|
(419,375
|
)
|
|||
Net decrease in cash and cash equivalents
|
(41,751
|
)
|
(11,331
|
)
|
(4,349
|
)
|
|||
Cash and cash equivalents at beginning of year
|
141,055
|
|
152,386
|
|
156,735
|
|
|||
Cash and cash equivalents at end of period
|
$
|
99,304
|
|
$
|
141,055
|
|
$
|
152,386
|
|
PREMIER, INC.
|
|||||||||
Consolidated Statement of Cash Flows
|
|||||||||
(In thousands)
|
|||||||||
|
|
||||||||
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
|
||||||
|
|
|
|
||||||
Supplemental schedule of non-cash investing and financing activities:
|
|
|
|
||||||
(Decrease) increase in redeemable limited partners' capital for adjustment to fair value, with offsetting decrease (increase) in additional paid-in-capital and accumulated deficit
|
$
|
(468,311
|
)
|
$
|
118,064
|
|
$
|
(157,581
|
)
|
Decrease in redeemable limited partners' capital, with offsetting increase in common stock and additional paid-in capital related to quarterly exchanges by member owners
|
460,593
|
|
633,783
|
|
216,122
|
|
|||
Net increase in deferred tax assets related to departures and quarterly exchanges by member owners and other adjustments
|
62,776
|
|
131,519
|
|
86,788
|
|
|||
Net (decrease) increase in tax receivable agreement liabilities related to departures and quarterly exchanges by member owners and other adjustments
|
(8,433
|
)
|
106,986
|
|
92,554
|
|
|||
Net decrease in notes payable related to departures and quarterly exchanges by member owners and other adjustments
|
364
|
|
—
|
|
—
|
|
|||
Net increase (decrease) in additional paid-in capital related to departures and quarterly exchanges by member owners and other adjustments
|
71,568
|
|
24,533
|
|
(5,766
|
)
|
|||
Deferred consideration related to acquisition of business
|
118,320
|
|
—
|
|
—
|
|
|||
Non-cash additions to property and equipment
|
5,000
|
|
—
|
|
—
|
|
|
June 30, 2020
|
June 30, 2019
|
||||
Assets
|
|
|
||||
Current
|
$
|
610,990
|
|
$
|
603,390
|
|
Noncurrent
|
1,900,137
|
|
1,536,685
|
|
||
Total assets of Premier LP
|
$
|
2,511,127
|
|
$
|
2,140,075
|
|
|
|
|
||||
Liabilities
|
|
|
||||
Current
|
$
|
580,430
|
|
$
|
517,616
|
|
Noncurrent
|
296,801
|
|
118,032
|
|
||
Total liabilities of Premier LP
|
$
|
877,231
|
|
$
|
635,648
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Premier LP net income
|
$
|
359,978
|
|
$
|
322,865
|
|
$
|
371,131
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Net cash provided by (used in):
|
|
|
|
||||||
Operating activities
|
$
|
339,894
|
|
$
|
533,024
|
|
$
|
534,643
|
|
Investing activities
|
(222,322
|
)
|
(129,469
|
)
|
(92,680
|
)
|
|||
Financing activities
|
(159,948
|
)
|
(390,086
|
)
|
(457,673
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(42,376
|
)
|
13,469
|
|
(15,710
|
)
|
|||
Cash and cash equivalents at beginning of year
|
131,210
|
|
117,741
|
|
133,451
|
|
|||
Cash and cash equivalents at end of year
|
$
|
88,834
|
|
$
|
131,210
|
|
$
|
117,741
|
|
|
June 30, 2019
As presented
|
Impact of ASC Topic 842
|
July 1, 2019
Adjusted
|
||||||
Intangible assets, net (a)
|
$
|
270,722
|
|
$
|
(8,474
|
)
|
$
|
262,248
|
|
Deferred income tax assets
|
422,014
|
|
302
|
|
422,316
|
|
|||
Operating lease right-of-use assets
|
—
|
|
62,642
|
|
62,642
|
|
|||
Total assets
|
$
|
2,569,567
|
|
$
|
54,470
|
|
$
|
2,624,037
|
|
|
|
|
|
||||||
Other current liabilities
|
$
|
7,113
|
|
$
|
7,661
|
|
$
|
14,774
|
|
Current liabilities of discontinued operations
|
11,797
|
|
1,200
|
|
12,997
|
|
|||
Operating lease liabilities
|
—
|
|
58,596
|
|
58,596
|
|
|||
Other long-term liabilities
|
67,683
|
|
(12,088
|
)
|
55,595
|
|
|||
Total liabilities
|
$
|
908,547
|
|
$
|
55,369
|
|
$
|
963,916
|
|
|
|
|
|
||||||
Accumulated deficit (b)
|
$
|
(775,674
|
)
|
$
|
(899
|
)
|
$
|
(776,573
|
)
|
Total liabilities and equity
|
$
|
2,569,567
|
|
$
|
54,470
|
|
$
|
2,624,037
|
|
(a)
|
The Company reclassified a favorable lease commitment, which was recorded within intangible assets, net in the Consolidated Balance Sheets as of June 30, 2019, to operating lease right-of-use assets as part of the adoption of ASC Topic 842.
|
(b)
|
The Company recognized a non-cash impairment charge of $1.2 million ($0.9 million net of deferred tax impact), which was recorded as an adjustment to the opening balance of equity at July 1, 2019. The impairment charge was related to operating lease right-of-use assets of the specialty pharmacy business, which is classified as a discontinued operation.
|
|
June 30, 2019
|
||
Assets
|
|
||
Accounts receivable
|
$
|
21,183
|
|
Inventory
|
3,385
|
|
|
Assets of discontinued operations
|
24,568
|
|
|
|
|
||
Liabilities
|
|
||
Accounts payable
|
2,255
|
|
|
Accrued expenses
|
6,630
|
|
|
Accrued compensation and benefits
|
2,373
|
|
|
Other current liabilities
|
539
|
|
|
Liabilities of discontinued operations
|
$
|
11,797
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Net revenue
|
$
|
—
|
|
$
|
428,493
|
|
$
|
476,599
|
|
Cost of revenue
|
—
|
|
417,524
|
|
456,294
|
|
|||
Gross profit
|
—
|
|
10,969
|
|
20,305
|
|
|||
Selling, general and administrative expense
|
—
|
|
23,588
|
|
18,388
|
|
|||
Amortization of purchased intangible assets
|
—
|
|
2,425
|
|
2,646
|
|
|||
Operating expenses
|
—
|
|
26,013
|
|
21,034
|
|
|||
Operating loss from discontinued operations
|
—
|
|
(15,044
|
)
|
(729
|
)
|
|||
Net (gain) loss on disposal and impairment of assets
|
(1,697
|
)
|
61,219
|
|
—
|
|
|||
Income (loss) from discontinued operations before income taxes
|
1,697
|
|
(76,263
|
)
|
(729
|
)
|
|||
Income tax expense (benefit)
|
643
|
|
(25,665
|
)
|
(292
|
)
|
|||
Income (loss) from discontinued operations, net of tax
|
1,054
|
|
(50,598
|
)
|
(437
|
)
|
|||
Net income (loss) from discontinued operations attributable to non-controlling interest in Premier LP
|
(498
|
)
|
25,948
|
|
279
|
|
|||
Net income (loss) from discontinued operations attributable to stockholders
|
$
|
556
|
|
$
|
(24,650
|
)
|
$
|
(158
|
)
|
|
Carrying Value
|
|
Equity in Net Income (Loss)
|
|||||||||||||
|
June 30,
|
|
Year Ended June 30,
|
|||||||||||||
|
2020
|
2019
|
|
2020
|
2019
|
2018
|
||||||||||
FFF
|
$
|
109,204
|
|
$
|
96,905
|
|
|
$
|
12,299
|
|
$
|
5,102
|
|
$
|
6,283
|
|
Prestige
|
11,194
|
|
—
|
|
|
—
|
|
—
|
|
—
|
|
|||||
Other investments
|
12,937
|
|
2,731
|
|
|
238
|
|
556
|
|
(5,109
|
)
|
|||||
Total investments
|
$
|
133,335
|
|
$
|
99,636
|
|
|
$
|
12,537
|
|
$
|
5,658
|
|
$
|
1,174
|
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
Total current assets
|
$
|
762,608
|
|
$
|
353,612
|
|
Total non-current assets
|
95,444
|
|
63,508
|
|
||
Total current liabilities
|
486,210
|
|
216,471
|
|
||
Total non-current liabilities
|
273,599
|
|
124,972
|
|
||
Non-controlling equity
|
48,139
|
|
37,082
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Revenue
|
$
|
1,990,282
|
|
$
|
1,840,462
|
|
$
|
1,715,046
|
|
Gross profit
|
108,733
|
|
85,232
|
|
84,431
|
|
|||
Income from operations
|
35,624
|
|
21,680
|
|
26,649
|
|
|||
Net income
|
22,565
|
|
11,872
|
|
13,345
|
|
|||
Net income attributable to non-controlling interest
|
11,057
|
|
5,817
|
|
6,539
|
|
|
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, 2020
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
13,272
|
|
$
|
13,272
|
|
$
|
—
|
|
$
|
—
|
|
Deferred compensation plan assets
|
52,538
|
|
52,538
|
|
—
|
|
—
|
|
||||
Total assets
|
65,810
|
|
65,810
|
|
—
|
|
—
|
|
||||
Earn-out liabilities
|
33,151
|
|
—
|
|
—
|
|
33,151
|
|
||||
FFF put right
|
36,758
|
|
—
|
|
—
|
|
36,758
|
|
||||
Total liabilities
|
$
|
69,909
|
|
$
|
—
|
|
$
|
—
|
|
$
|
69,909
|
|
|
|
|
|
|
||||||||
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
|
|
|
Beginning Balance
|
Purchases (Settlements)
|
Gain (Loss)
|
Ending Balance
|
||||||||
Year ended June 30, 2020
|
|
|
|
|
||||||||
FFF call right
|
$
|
204
|
|
$
|
—
|
|
$
|
(204
|
)
|
$
|
—
|
|
Total Level 3 assets
|
204
|
|
—
|
|
(204
|
)
|
—
|
|
||||
Earn-out liabilities
|
6,816
|
|
26,481
|
|
146
|
|
33,151
|
|
||||
FFF put right
|
41,652
|
|
—
|
|
4,894
|
|
36,758
|
|
||||
Total Level 3 liabilities
|
$
|
48,468
|
|
$
|
26,481
|
|
$
|
5,040
|
|
$
|
69,909
|
|
|
|
|
|
|
||||||||
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
|
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
Trade accounts receivable
|
$
|
116,222
|
|
$
|
113,599
|
|
Managed services receivable
|
19,057
|
|
54,541
|
|
||
Other
|
515
|
|
714
|
|
||
Total accounts receivable
|
135,794
|
|
168,854
|
|
||
Allowance for doubtful accounts
|
(731
|
)
|
(739
|
)
|
||
Accounts receivable, net
|
$
|
135,063
|
|
$
|
168,115
|
|
|
June 30,
|
||||||
|
Useful life
|
2020
|
2019
|
||||
Capitalized software
|
2-5 years
|
$
|
569,298
|
|
$
|
478,356
|
|
Computer hardware
|
3-5 years
|
63,244
|
|
59,301
|
|
||
Furniture and other equipment
|
5 years
|
7,913
|
|
7,810
|
|
||
Leasehold improvements
|
Lesser of estimated useful life or term of lease
|
18,882
|
|
18,876
|
|
||
Total property and equipment
|
|
659,337
|
|
564,343
|
|
||
Accumulated depreciation and amortization
|
|
(452,609
|
)
|
(359,235
|
)
|
||
Property and equipment, net
|
|
$
|
206,728
|
|
$
|
205,108
|
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
Capitalized contract costs
|
$
|
18,601
|
|
$
|
16,757
|
|
Convertible notes receivable
|
—
|
|
9,045
|
|
||
Deferred loan costs, net
|
2,141
|
|
2,783
|
|
||
Prepaid contract administrative fee share, less current portion
|
67,897
|
|
—
|
|
||
Other
|
5,041
|
|
3,283
|
|
||
Total other long-term assets
|
$
|
93,680
|
|
$
|
31,868
|
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
FFF put right
|
$
|
36,758
|
|
$
|
41,652
|
|
Deferred rent
|
—
|
|
12,156
|
|
||
Reserve for uncertain tax positions
|
16,163
|
|
7,419
|
|
||
Earn-out liability, less current portion
|
22,700
|
|
5,634
|
|
||
Other
|
37
|
|
822
|
|
||
Total other long-term liabilities
|
$
|
75,658
|
|
$
|
67,683
|
|
|
Supply Chain Services
|
Performance Services
|
Total
|
||||||
June 30, 2019
|
$
|
336,973
|
|
$
|
543,736
|
|
$
|
880,709
|
|
Acquisition of businesses and assets
|
50,749
|
|
10,507
|
|
61,256
|
|
|||
June 30, 2020
|
$
|
387,722
|
|
$
|
554,243
|
|
$
|
941,965
|
|
|
|
June 30,
|
|||||
|
Useful Life
|
2020
|
2019
|
||||
Member relationships
|
14.7 years
|
$
|
386,100
|
|
$
|
220,100
|
|
Technology
|
5.6 years
|
164,117
|
|
164,217
|
|
||
Customer relationships
|
9.6 years
|
70,830
|
|
48,010
|
|
||
Trade names
|
7.5 years
|
24,160
|
|
16,060
|
|
||
Favorable lease commitments
|
n/a
|
—
|
|
11,393
|
|
||
Non-compete agreements
|
5.3 years
|
11,315
|
|
8,800
|
|
||
Other (a)
|
12.1 years
|
6,060
|
|
—
|
|
||
Total intangible assets
|
|
662,582
|
|
468,580
|
|
||
Accumulated amortization
|
|
(245,160
|
)
|
(197,858
|
)
|
||
Total intangible assets, net
|
|
$
|
417,422
|
|
$
|
270,722
|
|
(a)
|
Includes a $1.0 million indefinite-lived asset that was acquired through the HDP acquisition.
|
2021
|
$
|
43,755
|
|
2022
|
39,917
|
|
|
2023
|
38,602
|
|
|
2024
|
37,883
|
|
|
2025
|
34,257
|
|
|
Thereafter
|
222,008
|
|
|
Total amortization expense
|
$
|
416,422
|
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
Supply Chain Services
|
$
|
364,647
|
|
$
|
196,241
|
|
Performance Services (a)
|
52,775
|
|
74,481
|
|
||
Total intangible assets, net
|
$
|
417,422
|
|
$
|
270,722
|
|
(a)
|
Includes a $1.0 million indefinite-lived asset that was acquired through the HDP acquisition.
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
Credit Facility
|
$
|
75,000
|
|
$
|
25,000
|
|
Notes payable
|
9,200
|
|
8,611
|
|
||
Total debt
|
84,200
|
|
33,611
|
|
||
Less: current portion
|
(79,560
|
)
|
(27,608
|
)
|
||
Total long-term debt
|
$
|
4,640
|
|
$
|
6,003
|
|
2021
|
$
|
4,560
|
|
2022
|
1,416
|
|
|
2023
|
944
|
|
|
2024
|
1,546
|
|
|
2025
|
734
|
|
|
Total principal payments
|
$
|
9,200
|
|
|
Receivables From Limited Partners
|
Redeemable Limited Partners' Capital
|
Total Redeemable Limited Partners' Capital
|
||||||
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
|
|
|||
Distributions applied to receivables from limited partners
|
209
|
|
—
|
|
209
|
|
|||
Redemption of limited partners
|
—
|
|
(1,372
|
)
|
(1,372
|
)
|
|||
Net income attributable to non-controlling interest in Premier LP
|
—
|
|
161,816
|
|
161,816
|
|
|||
Non-controlling interest due to acquisition
|
—
|
|
9,004
|
|
9,004
|
|
|||
Distributions to limited partners
|
—
|
|
(43,714
|
)
|
(43,714
|
)
|
|||
Exchange of Class B common units for Class A common stock by member owners
|
—
|
|
(460,593
|
)
|
(460,593
|
)
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
—
|
|
(468,311
|
)
|
(468,311
|
)
|
|||
June 30, 2020
|
$
|
(995
|
)
|
$
|
1,721,304
|
|
$
|
1,720,309
|
|
Date
|
Distribution (a)
|
||
August 22, 2019
|
$
|
13,202
|
|
November 21, 2019
|
13,699
|
|
|
February 21, 2020
|
12,689
|
|
|
May 21, 2020
|
9,314
|
|
(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 expects to make a $8.0 million quarterly distribution on August 28, 2020. The distribution is reflected in limited partners' distribution payable in the accompanying Consolidated Balance Sheets at June 30, 2020.
|
Date of Quarterly Exchange
|
Number of Class B Common Units Exchanged
|
Reduction in Redeemable Limited Partners' Capital
|
|||
July 31, 2019
|
1,310,771
|
|
$
|
50,792
|
|
October 31, 2019
|
6,873,699
|
|
223,946
|
|
|
January 31, 2020
|
4,866,082
|
|
169,194
|
|
|
April 30, 2020
|
502,466
|
|
16,661
|
|
|
Total
|
13,553,018
|
|
$
|
460,593
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard (a)
|
||||||
Numerator for basic earnings (loss) per share:
|
|
|
|
||||||
Net income from continuing operations attributable to stockholders (b)
|
$
|
598,119
|
|
$
|
15,706
|
|
$
|
191,040
|
|
Net income (loss) from discontinued operations attributable to stockholders
|
556
|
|
(24,650
|
)
|
(158
|
)
|
|||
Net income (loss) attributable to stockholders
|
$
|
598,675
|
|
$
|
(8,944
|
)
|
$
|
190,882
|
|
|
|
|
|
||||||
Numerator for diluted earnings (loss) per share:
|
|
|
|
||||||
Net income from continuing operations attributable to stockholders (b)
|
$
|
598,119
|
|
$
|
15,706
|
|
$
|
191,040
|
|
Adjustment of redeemable limited partners' capital to redemption amount
|
(468,311
|
)
|
—
|
|
(157,581
|
)
|
|||
Net income from continuing operations attributable to non-controlling interest
|
161,318
|
|
—
|
|
224,548
|
|
|||
Net income from continuing operations
|
291,126
|
|
15,706
|
|
258,007
|
|
|||
Tax effect on Premier, Inc. net income (c)
|
(40,154
|
)
|
—
|
|
(70,257
|
)
|
|||
Adjusted net income from continuing operations
|
$
|
250,972
|
|
$
|
15,706
|
|
$
|
187,750
|
|
|
|
|
|
||||||
Net income (loss) from discontinued operations attributable to stockholders
|
$
|
556
|
|
$
|
(24,650
|
)
|
$
|
(158
|
)
|
Net income (loss) from discontinued operations attributable to non-controlling interest in Premier LP
|
498
|
|
—
|
|
(279
|
)
|
|||
Adjusted net income (loss) from discontinued operations
|
$
|
1,054
|
|
$
|
(24,650
|
)
|
$
|
(437
|
)
|
|
|
|
|
||||||
Adjusted net income (loss)
|
$
|
252,026
|
|
$
|
(8,944
|
)
|
$
|
187,313
|
|
|
|
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard (a)
|
||||||
Denominator for basic earnings (loss) per share:
|
|
|
|
||||||
Weighted average shares (d)
|
67,035
|
|
59,188
|
|
53,518
|
|
|||
|
|
|
|
||||||
Denominator for diluted earnings (loss) per share:
|
|
|
|
||||||
Weighted average shares (d)
|
67,035
|
|
59,188
|
|
53,518
|
|
|||
Effect of dilutive securities: (e)
|
|
|
|
||||||
Stock options
|
329
|
|
577
|
|
275
|
|
|||
Restricted stock
|
248
|
|
297
|
|
295
|
|
|||
Performance share awards
|
67
|
|
207
|
|
252
|
|
|||
Class B shares outstanding
|
55,935
|
|
—
|
|
83,000
|
|
|||
Weighted average shares and assumed conversions
|
123,614
|
|
60,269
|
|
137,340
|
|
|||
|
|
|
|
||||||
Basic earnings (loss) per share:
|
|
|
|
||||||
Basic earnings per share from continuing operations
|
$
|
8.92
|
|
$
|
0.27
|
|
$
|
3.57
|
|
Basic earnings (loss) per share from discontinued operations
|
0.01
|
|
(0.42
|
)
|
0.00
|
|
|||
Basic earnings (loss) per share attributable to stockholders
|
$
|
8.93
|
|
$
|
(0.15
|
)
|
$
|
3.57
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share:
|
|
|
|
||||||
Diluted earnings per share from continuing operations
|
$
|
2.03
|
|
$
|
0.27
|
|
$
|
1.37
|
|
Diluted earnings (loss) per share from discontinued operations
|
0.01
|
|
(0.42
|
)
|
(0.01
|
)
|
|||
Diluted earnings (loss) per share attributable to stockholders
|
$
|
2.04
|
|
$
|
(0.15
|
)
|
$
|
1.36
|
|
(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 from continuing operations attributable to stockholders was calculated as follows (in thousands):
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard (a)
|
||||||
Net income from continuing operations
|
$
|
291,126
|
|
$
|
334,677
|
|
$
|
258,007
|
|
Net income from continuing operations attributable to non-controlling interest
|
(161,318
|
)
|
(200,907
|
)
|
(224,548
|
)
|
|||
Adjustment of redeemable limited partners' capital to redemption amount
|
468,311
|
|
(118,064
|
)
|
157,581
|
|
|||
Net income from continuing operations attributable to stockholders
|
$
|
598,119
|
|
$
|
15,706
|
|
$
|
191,040
|
|
(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, 2020, 2019 and 2018.
|
(e)
|
For the year ended June 30, 2020, the effect of 0.8 million stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. 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.
|
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, 2019
|
1,310,771
|
|
62,767,860
|
|
63,274,182
|
|
49.8%/50.2%
|
October 31, 2019
|
6,873,699
|
|
55,581,646
|
|
66,552,023
|
|
46%/54%
|
January 31, 2020
|
4,866,082
|
|
50,715,564
|
|
71,066,141
|
|
42%/58%
|
April 30, 2020
|
502,466
|
|
50,213,098
|
|
71,574,119
|
|
41%/59%
|
July 31, 2020 (c)
|
69,684
|
|
50,143,414
|
|
71,724,149
|
|
41%/59%
|
(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' Equity (Deficit)) and equity incentive plan (see Note 14 - Stock-Based Compensation).
|
(c)
|
As the quarterly exchange occurred on July 31, 2020, the impact of the exchange is not reflected in the consolidated financial statements for the year ended June 30, 2020.
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Pre-tax stock-based compensation expense (a)
|
$
|
20,706
|
|
$
|
29,001
|
|
$
|
28,844
|
|
Deferred tax benefit (b)
|
3,014
|
|
6,296
|
|
7,124
|
|
|||
Total stock-based compensation expense, net of tax
|
$
|
17,692
|
|
$
|
22,705
|
|
$
|
21,720
|
|
(a)
|
Pre-tax stock-based compensation expense attributable to discontinued operations is not included in the above table and was $0.5 million and $0.6 million for the years ended June 30, 2019 and June 30, 2018, respectively. For the year ended June 30, 2020, there was no pre-tax stock-based compensation expense attributable to discontinued operations.
|
(b)
|
For the year ended June 30, 2020, the deferred tax benefit was reduced by $2.2 million attributable to stock-based compensation expense that is nondeductible for tax purposes pursuant to Section 162(m) as amended by the Tax Cuts and Jobs Act ("TCJA") of 2017.
|
|
Restricted Stock
|
|
Performance Share Awards
|
|
Stock Options
|
||||||||||||
|
Number of Awards
|
Weighted Average Fair Value at Grant Date
|
|
Number of Awards
|
Weighted Average Fair Value at Grant Date
|
|
Number of Options
|
Weighted Average Exercise Price
|
|||||||||
Outstanding at June 30, 2019
|
589,550
|
|
$
|
37.06
|
|
|
1,439,815
|
|
$
|
36.38
|
|
|
2,798,673
|
|
$
|
30.22
|
|
Granted
|
352,465
|
|
$
|
36.71
|
|
|
742,235
|
|
$
|
36.39
|
|
|
—
|
|
$
|
—
|
|
Vested/exercised
|
(222,592
|
)
|
$
|
33.63
|
|
|
(493,759
|
)
|
$
|
31.58
|
|
|
(232,141
|
)
|
$
|
30.58
|
|
Forfeited
|
(37,885
|
)
|
$
|
38.57
|
|
|
(81,982
|
)
|
$
|
38.71
|
|
|
(22,395
|
)
|
$
|
33.16
|
|
Outstanding at June 30, 2020
|
681,538
|
|
$
|
37.91
|
|
|
1,606,309
|
|
$
|
37.58
|
|
|
2,544,137
|
|
$
|
30.17
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock options outstanding and exercisable at June 30, 2020
|
|
|
|
|
|
|
2,415,033
|
|
$
|
30.02
|
|
|
Unrecognized Stock-Based Compensation Expense
|
Weighted Average Amortization Period
|
||
Restricted stock
|
$
|
12,113
|
|
1.74 years
|
Performance share awards
|
24,633
|
|
1.69 years
|
|
Stock options
|
245
|
|
0.23 years
|
|
Total unrecognized stock-based compensation expense
|
$
|
36,991
|
|
1.7 years
|
|
Intrinsic Value of Stock Options
|
||
Outstanding and exercisable
|
$
|
10,859
|
|
Expected to vest
|
191
|
|
|
Total outstanding
|
$
|
11,050
|
|
|
|
||
Exercised during the year ended June 30, 2020
|
$
|
1,567
|
|
(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)
|
At grant date, no dividends were 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,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Current:
|
|
|
|
||||||
Federal
|
$
|
11,394
|
|
$
|
16,832
|
|
$
|
22,103
|
|
State
|
12,545
|
|
4,752
|
|
4,141
|
|
|||
Total current expense
|
23,939
|
|
21,584
|
|
26,244
|
|
|||
Deferred:
|
|
|
|
||||||
Federal
|
35,768
|
|
10,493
|
|
232,920
|
|
|||
State
|
32,854
|
|
1,385
|
|
362
|
|
|||
Total deferred expense
|
68,622
|
|
11,878
|
|
233,282
|
|
|||
Provision for income taxes
|
$
|
92,561
|
|
$
|
33,462
|
|
$
|
259,526
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Computed tax expense
|
$
|
80,814
|
|
$
|
77,309
|
|
$
|
145,220
|
|
Partnership income not subject to tax
|
(40,154
|
)
|
(50,333
|
)
|
(70,257
|
)
|
|||
State taxes (net of federal benefit)
|
7,072
|
|
9,884
|
|
12,919
|
|
|||
Remeasurement adjustments and other permanent items
|
(1,570
|
)
|
3,300
|
|
(53,151
|
)
|
|||
Benefit on subsidiaries treated separately for income tax purposes
|
(3,889
|
)
|
(1,564
|
)
|
(848
|
)
|
|||
Change in valuation allowance
|
12,472
|
|
(3,030
|
)
|
(33,106
|
)
|
|||
Deferred tax remeasurement
|
34,447
|
|
(1,814
|
)
|
256,787
|
|
|||
Uncertain tax position
|
7,472
|
|
(1,417
|
)
|
5,047
|
|
|||
Other
|
(4,103
|
)
|
1,127
|
|
(3,085
|
)
|
|||
Provision for income taxes
|
$
|
92,561
|
|
$
|
33,462
|
|
$
|
259,526
|
|
Effective income tax rate
|
24.1
|
%
|
9.1
|
%
|
50.1
|
%
|
|
June 30,
|
|||||
|
2020
|
2019
|
||||
Deferred tax asset
|
|
|
||||
Partnership basis differences in Premier LP
|
$
|
425,365
|
|
$
|
417,157
|
|
Stock compensation
|
14,026
|
|
18,321
|
|
||
Accrued expenses
|
22,878
|
|
26,682
|
|
||
Net operating losses and credits
|
89,660
|
|
61,437
|
|
||
Other
|
15,597
|
|
12,662
|
|
||
Total deferred tax assets
|
567,526
|
|
536,259
|
|
||
Valuation allowance for deferred tax assets
|
(61,241
|
)
|
(48,769
|
)
|
||
Net deferred tax assets
|
506,285
|
|
487,490
|
|
||
Deferred tax liability
|
|
|
||||
Purchased intangible assets and depreciation
|
(64,211
|
)
|
(52,585
|
)
|
||
Accrued expenses
|
(9,905
|
)
|
—
|
|
||
Other liabilities
|
(19,651
|
)
|
(17,657
|
)
|
||
Net deferred tax asset
|
$
|
412,518
|
|
$
|
417,248
|
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
Beginning of year balance
|
$
|
8,266
|
|
$
|
18,479
|
|
$
|
5,043
|
|
Increases in prior period tax positions
|
7,734
|
|
66
|
|
12,965
|
|
|||
Decreases in prior period tax positions
|
(48
|
)
|
(11,867
|
)
|
(179
|
)
|
|||
Reductions on settlements and lapse in statute of limitations
|
(2,276
|
)
|
(27
|
)
|
(611
|
)
|
|||
Increases in current period tax positions
|
1,920
|
|
1,615
|
|
1,261
|
|
|||
End of year balance
|
$
|
15,596
|
|
$
|
8,266
|
|
$
|
18,479
|
|
2021
|
$
|
12,171
|
|
2022
|
11,738
|
|
|
2023
|
12,012
|
|
|
2024
|
12,145
|
|
|
2025
|
12,177
|
|
|
Thereafter
|
10,171
|
|
|
Total future minimum lease payments
|
70,414
|
|
|
Less: imputed interest
|
7,567
|
|
|
Total operating lease liabilities (a)
|
$
|
62,847
|
|
(a)
|
As of June 30, 2020, total operating lease liabilities included $9.9 million within other liabilities, current in the Consolidated Balance Sheets.
|
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,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard (a)
|
||||||
Net revenue:
|
|
|
|
||||||
Supply Chain Services
|
|
|
|
||||||
Net administrative fees
|
$
|
670,593
|
|
$
|
662,462
|
|
$
|
643,839
|
|
Other services and support
|
12,225
|
|
8,561
|
|
7,812
|
|
|||
Services
|
682,818
|
|
671,023
|
|
651,651
|
|
|||
Products
|
269,945
|
|
184,157
|
|
172,327
|
|
|||
Total Supply Chain Services (b)
|
952,763
|
|
855,180
|
|
823,978
|
|
|||
Performance Services (b)
|
346,829
|
|
362,458
|
|
360,679
|
|
|||
Net revenue
|
$
|
1,299,592
|
|
$
|
1,217,638
|
|
$
|
1,184,657
|
|
(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 intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material.
|
|
Year Ended June 30,
|
||||||||
Depreciation and amortization expense (b):
|
2020
|
2019
|
2018 (a)
|
||||||
Supply Chain Services
|
$
|
25,968
|
|
$
|
18,618
|
|
$
|
18,040
|
|
Performance Services
|
118,556
|
|
110,581
|
|
95,808
|
|
|||
Corporate
|
8,303
|
|
10,965
|
|
9,217
|
|
|||
Total depreciation and amortization expense
|
$
|
152,827
|
|
$
|
140,164
|
|
$
|
123,065
|
|
|
|
|
|
||||||
Capital expenditures:
|
|
|
|
||||||
Supply Chain Services
|
$
|
7,143
|
|
$
|
10,154
|
|
$
|
1,436
|
|
Performance Services
|
78,231
|
|
70,757
|
|
80,900
|
|
|||
Corporate
|
9,023
|
|
12,474
|
|
10,089
|
|
|||
Total capital expenditures
|
$
|
94,397
|
|
$
|
93,385
|
|
$
|
92,425
|
|
|
Year Ended June 30,
|
|||||
Total assets (c):
|
2020
|
2019
|
||||
Supply Chain Services
|
$
|
1,483,751
|
|
$
|
1,111,934
|
|
Performance Services
|
930,968
|
|
941,183
|
|
||
Corporate
|
538,248
|
|
516,450
|
|
||
Total assets
|
$
|
2,952,967
|
|
$
|
2,569,567
|
|
Eliminations (d)
|
(4,452
|
)
|
—
|
|
||
Total assets, net
|
$
|
2,948,515
|
|
$
|
2,569,567
|
|
(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)
|
Total assets in Supply Chain Services includes $24.6 million as of June 30, 2019 for discontinued operations related to the specialty pharmacy business. There are no assets of discontinued operations related to the specialty pharmacy business as of June 30, 2020.
|
(d)
|
Includes eliminations of intersegment transactions which occur during the ordinary course of business.
|
|
Year Ended June 30,
|
||||||||
|
2020
|
2019
|
2018
|
||||||
|
|
|
Previous revenue standard (a)
|
||||||
Income before income taxes
|
$
|
383,687
|
|
$
|
368,139
|
|
$
|
517,533
|
|
Equity in net income of unconsolidated affiliates (a)
|
(12,537
|
)
|
(5,658
|
)
|
(1,174
|
)
|
|||
Interest and investment loss, net (b)
|
11,313
|
|
2,471
|
|
5,300
|
|
|||
Gain (loss) on FFF put and call rights (c)
|
(4,690
|
)
|
17
|
|
22,036
|
|
|||
Other (income) expense
|
(4,153
|
)
|
3,545
|
|
(3,336
|
)
|
|||
Operating income
|
373,620
|
|
368,514
|
|
540,359
|
|
|||
Depreciation and amortization
|
97,297
|
|
86,879
|
|
70,264
|
|
|||
Amortization of purchased intangible assets
|
55,530
|
|
53,285
|
|
52,801
|
|
|||
Stock-based compensation (d)
|
21,132
|
|
29,396
|
|
29,235
|
|
|||
Acquisition and disposition related expenses
|
19,319
|
|
13,154
|
|
8,335
|
|
|||
Remeasurement of tax receivable agreement liabilities (e)
|
(24,584
|
)
|
—
|
|
(177,174
|
)
|
|||
Equity in net income of unconsolidated affiliates (a)
|
12,537
|
|
5,658
|
|
1,174
|
|
|||
Deferred compensation plan income (f)
|
3,904
|
|
2,546
|
|
3,960
|
|
|||
Other income, net
|
5,285
|
|
1,610
|
|
10,566
|
|
|||
Non-GAAP Adjusted EBITDA
|
$
|
564,040
|
|
$
|
561,042
|
|
$
|
539,520
|
|
|
|
|
|
||||||
Segment Non-GAAP Adjusted EBITDA:
|
|
|
|
||||||
Supply Chain Services (g)
|
$
|
570,298
|
|
$
|
548,029
|
|
$
|
531,851
|
|
Performance Services (g)
|
111,282
|
|
129,147
|
|
123,429
|
|
|||
Corporate
|
(117,540
|
)
|
(116,134
|
)
|
(115,760
|
)
|
|||
Non-GAAP Adjusted EBITDA
|
$
|
564,040
|
|
$
|
561,042
|
|
$
|
539,520
|
|
(a)
|
Refer to Note 5 - Investments for further information.
|
(b)
|
Represents interest expense, net and investment income.
|
(c)
|
Refer to Note 6 - Fair Value Measurements for more information.
|
(d)
|
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, 2020, 2019 and 2018.
|
(e)
|
The adjustments to TRA liabilities for the years ended June 30, 2020 and 2018 are primarily attributable to decreases in the Premier, Inc. effective tax rate related to state tax liabilities and the TCJA, respectively.
|
(f)
|
Represents realized and unrealized gains and dividend income on deferred compensation plan assets.
|
(g)
|
Includes intersegment revenue which is eliminated in consolidation.
|
|
First
|
Second
|
Third
|
Fourth
|
||||||||
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||
Fiscal Year 2020
|
|
|
|
|
||||||||
Net revenue
|
$
|
302,410
|
|
$
|
319,606
|
|
$
|
334,823
|
|
$
|
342,753
|
|
Gross profit
|
211,399
|
|
219,365
|
|
231,695
|
|
204,342
|
|
||||
Net income from continuing operations
|
70,939
|
|
91,575
|
|
73,212
|
|
55,400
|
|
||||
Income from discontinued operations, net of tax
|
390
|
|
614
|
|
5
|
|
45
|
|
||||
Net income
|
71,329
|
|
92,189
|
|
73,217
|
|
55,445
|
|
||||
Net income attributable to non-controlling interest in Premier LP
|
(41,907
|
)
|
(55,704
|
)
|
(35,058
|
)
|
(29,147
|
)
|
||||
Adjustment of redeemable limited partners' capital to redemption amount
|
694,309
|
|
(480,153
|
)
|
302,569
|
|
(48,414
|
)
|
||||
Net income (loss) attributable to stockholders
|
723,731
|
|
(443,668
|
)
|
340,728
|
|
(22,116
|
)
|
||||
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
||||||||
Basic
|
62,785
|
|
64,552
|
|
69,451
|
|
71,425
|
|
||||
Diluted
|
126,632
|
|
64,552
|
|
122,470
|
|
71,425
|
|
||||
|
|
|
|
|
||||||||
Earnings (loss) per share from continuing operations attributable to stockholders:
|
|
|
|
|
||||||||
Basic
|
$
|
11.53
|
|
$
|
(6.88
|
)
|
$
|
4.91
|
|
$
|
(0.31
|
)
|
Diluted
|
$
|
0.49
|
|
$
|
(6.88
|
)
|
$
|
0.54
|
|
$
|
(0.31
|
)
|
|
|
|
|
|
||||||||
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
|
)
|
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(1)
|
Weighted-average exercise price of outstanding options, warrants and rights
(2)
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in first column)
(3)
|
Equity compensation plans approved by security holders:
|
|
|
|
Amended and Restated Premier, Inc. 2013 Equity Incentive Plan
|
4,831,984
|
$30.17
|
5,955,851
|
Equity compensation plans not approved by security holders
|
n/a
|
n/a
|
n/a
|
Total
|
4,831,984
|
$30.17
|
5,955,851
|
(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, 2020, 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, 2020, 2019 and 2018
|
||||||||||
(in thousands)
|
||||||||||
|
Beginning Balance
|
Additions/(Reductions) to Expense or Other Accounts
|
Deductions
|
Ending Balance
|
||||||
Year ended June 30, 2020
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
739
|
|
669
|
|
677
|
|
$
|
731
|
|
Deferred tax assets valuation allowance
|
48,769
|
|
12,472
|
|
—
|
|
61,241
|
|
||
|
|
|
|
|
||||||
Year ended June 30, 2019
|
|
|
|
|
||||||
Allowance for doubtful accounts
|
$
|
1,841
|
|
2,277
|
|
3,379
|
|
$
|
739
|
|
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
|
|
Exhibit
No.
|
|
Description
|
2.1
|
|
|
2.1.1
|
|
|
2.2
|
|
|
2.2.1
|
|
|
2.3
|
|
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.1.1
|
|
|
10.1
|
|
|
10.1.1
|
|
|
10.1.2
|
|
|
10.2
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6
|
|
|
10.7
|
|
|
10.8
|
|
Exhibit
No.
|
|
Description
|
10.9
|
|
|
10.10
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
|
10.14
|
|
|
10.15
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
10.21
|
|
|
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*
|
Exhibit
No.
|
|
Description
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document*
|
|
PREMIER, INC.
|
|
|
By:
|
/s/ SUSAN D. DEVORE
|
|
Name:
|
Susan D. DeVore
|
|
Title:
|
Chief Executive Officer
|
|
Date:
|
August 25, 2020
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ SUSAN D. DEVORE
Susan D. DeVore
|
|
Chief Executive Officer and Director
(principal executive officer)
|
|
August 25, 2020
|
|
|
|
|
|
/s/ CRAIG S. MCKASSON
Craig S. McKasson
|
|
Chief Administrative and Financial Officer and Senior Vice President
(principal financial and accounting officer)
|
|
August 25, 2020
|
|
|
|
|
|
/s/ BARCLAY E. BERDAN
Barclay E. Berdan
|
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ JOHN T. BIGALKE
John T. Bigalke
|
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ HELEN M. BOUDREAU
Helen M. Boudreau
|
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ STEPHEN R. D'ARCY
Stephen R. D'Arcy |
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ JODY R. DAVIDS
Jody R. Davids
|
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ PETER S. FINE
Peter S. Fine
|
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ DAVID H. LANGSTAFF
David H. Langstaff |
|
Director
|
|
August 25, 2020
|
|
|
|
|
|
/s/ WILLIAM E. MAYER
William E. Mayer |
|
Director
|
|
August 25, 2020
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/s/ MARC D. MILLER
Marc D. Miller
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Director
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August 25, 2020
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/s/ MARVIN R. O'QUINN
Marvin R. O'Quinn
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Director
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August 25, 2020
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/s/ SCOTT REINER
Scott Reiner
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Director
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August 25, 2020
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/s/ TERRY D. SHAW
Terry D. Shaw
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Director
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August 25, 2020
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/s/ RICHARD J. STATUTO
Richard J. Statuto
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Director
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August 25, 2020
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/s/ ELLEN C. WOLF
Ellen C. Wolf
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Director
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August 25, 2020
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•
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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,
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•
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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
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•
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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.
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•
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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,
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•
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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,
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•
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do not permit cumulative voting in the election of directors, which would otherwise allow less than a majority of stockholders to elect director candidates,
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•
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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,
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•
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provide that special meetings of the stockholders may be called only by or at the direction of the board of directors, the chair of our board or our chief executive officer,
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•
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require that advance notice be given by stockholders for any stockholder proposals or director nominations,
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•
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require a super-majority vote of the stockholders to amend our certificate of incorporation, and
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•
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allow our board of directors to make, alter or repeal our bylaws but only allow stockholders to amend our bylaws upon the approval of 66 2⁄3% or more of the voting power of all of the outstanding shares of our capital stock entitled to vote.
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1.1.
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Amendment and Restatement. Premier, Inc., a Delaware corporation (the “Company”), hereby amends and restates its annual incentive compensation plan, which is known as the Premier, Inc. Annual Incentive Compensation Plan (the “Plan”), originally established effective July 1, 1996 for selected Employees.
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1.2.
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Purpose. The purpose of the Plan is to maximize the success of the Company and the Premier Group by providing significant financial incentive opportunities to eligible Employees, to assist in attracting and retaining employees of superior abilities, and to further align the interests and objectives of Participants with those of the Company and the Premier Group.
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2.1
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Definitions. Whenever used herein the following terms shall have their respective meanings as set forth below:
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(a)
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“Administrator” means the Employee(s) of the Company designated from time to time by the Committee to perform those duties specified in the Plan.
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(b)
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“Award” shall have the meaning set forth in Section 7.2.
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(c)
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“Change in Control” shall have the meaning set forth in Section 13.3 (or subsequent applicable sections, if and as later amended) of the Premier, Inc. 2013 Equity Incentive Plan, as it may be established, modified, amended, restated, or replaced from time to time.
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(d)
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“Code” shall have the meaning set forth in Section 8.2.
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(e)
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“Code Section 409A” shall have the meaning set forth in Section 11.12.
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(f)
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“Committee” means the Compensation Committee of the Board of Directors of the Company.
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(g)
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“Company” means Premier, Inc.
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(h)
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“Disability” means a determination of disability with respect to a Participant under the long-term disability plan maintained by the Participant’s Premier Group employer. If, at any time during the period that this Plan is in operation, the applicable entity of the Premier Group does not maintain a long-term disability plan, “Disability” shall mean a physical or mental condition that, in the judgment of the Administrator, permanently prevents a Participant from performing the essential functions of the Participant’s job duties with the Premier Group or such other position or job that is made available to the Participant within the Premier Group and for which the Participant is qualified by reason of education, training and experience, with or without reasonable accommodation. In making such determination, the Administrator may, but is not required to, rely on advice of a physician competent in the area to which such Disability relates. In addition, the Participant upon request by the Administrator must submit such medical evidence, records and examination data to the Administrator regarding any Disability as is reasonably necessary for the Administrator to evaluate the same, to be treated as confidential as required by law. The Administrator shall make all determinations and resolve any disputes regarding Disability in its sole discretion, and any decision of the Administrator concerning the same will be binding on all parties.
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(i)
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“Earnings” for a Participant that is an exempt Employee (as designated by Premier in accordance with applicable law) means a Participant’s annual base salary from the Participant’s Premier Group employer measured as of the last day of the Plan Year (June 30) or, if sooner, the Participant’s last day of eligibility under the Plan during the Plan Year, in each case excluding all other pay elements (including, but not limited to bonus payments, commissions, incentive compensation, deferred compensation payments, stock options, profit sharing, dividends, benefits, severance pay, vacation payout, expense reimbursements, miscellaneous
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(j)
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“Employee” shall means any person designated as an employee of the Premier Group on the payroll records thereof, but excluding any person designated by Premier as an intern, temporary worker or contractor.
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(k)
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“Exchange Act” means the Securities Exchange Act of 1934 and all regulations issued thereunder and any successors thereto.
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(l)
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“Goals and Performance Standards” shall have the meaning set forth in Section 5.1.
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(m)
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“Participant” means any individual designated to participate in the Plan pursuant to Article 4.
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(n)
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“Performance Standard Achievement” shall have the meaning set forth in Section 7.1.
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(o)
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“Plan Year” means the twelve-month period beginning July 1 through June 30.
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(p)
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“Premier Group” means the Company and/or those affiliates, subsidiaries or managed entities which the Company permits to participate in the Plan, as designated from time to time by the Committee.
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(q)
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“Recoupment Policy” shall have the meaning set forth in Section 8.3.
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(r)
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“Retirement” means the Participant’s voluntary resignation from the Premier Group on or after attaining age 59 ½ or age 55 with 5 or more years of service.
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(s)
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“Stretch” means the level of achievement in which the highest payout for Goals and Performance Standards will be made.
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(t)
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“Target” means 100% achievement of the Goals and Performance Standards.
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(u)
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“Target Award Opportunity” shall have the meaning set forth in Section 6.1.
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(v)
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“Termination of Employment” means the separation or end of the Participant’s employment with any and all members of the Premier Group for any reason.
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(w)
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“Threshold” means the minimum level of achievement that must be attained for Goals and Performance Standards before a Plan Award is potentially earned.
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3.1
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Committee. The Committee shall have general responsibility for the administration of the Plan according to the terms and provisions of the Plan and shall have all the powers necessary to accomplish these purposes, including, but not by way of limitation, the right, power and authority:
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(a)
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To make rules and regulations for the administration of the Plan;
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(b)
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To construe all terms, provisions, conditions and limitations of the Plan;
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(c)
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To correct any defects, supply any omissions or reconcile any inconsistencies that may appear in the Plan in the manner and to the extent deemed expedient;
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(d)
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To determine all controversies relating to the administration of the Plan, including, but not limited to, differences of opinion that may arise among the Premier Group or the Administrator and the Participants;
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(e)
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To resolve any questions necessary to promote the uniform administration of the Plan; and
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(f)
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To amend the Plan or terminate the Plan pursuant to Article 10.
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3.2.
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Administrator. The Administrator shall have responsibility for the day-to-day operation of the Plan. The Administrator shall make initial determinations regarding administration of the Plan, including, but not limited to, differences of opinion that may arise among the Premier Group and matters relating to Participant eligibility and incentive payments under the Plan. The foregoing notwithstanding, the Administrator also shall have responsibility for those decisions or actions specifically set forth in the provisions of this Plan.
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3.3.
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Discretion. The Committee or the Administrator, in exercising any power or authority granted under this Plan, or in making any determination under this Plan, shall perform or refrain from performing those acts in its sole and absolute discretion and judgment. Any decision made by the Committee, or any refraining to act or any act taken by the Committee, shall be final and binding on all parties.
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3.4.
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Liability and Indemnification. The Committee or the Administrator shall not be liable for any act done or any determination made in good faith. The Company and the Premier Group shall, to the fullest extent permitted by law, indemnify and hold the Committee, its members and the Administrator harmless from any and all claims, causes of action, damages and expenses (including reasonable attorneys’ fees and expenses) incurred by the Committee, its members, and the Administrator in connection with or otherwise related to service in such capacity.
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4.1
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Participation. All Employees of the Premier Group shall participate in the Plan, except that an individual who becomes an Employee of the Premier Group on or after April 1 of the Plan Year shall not begin participating in the Plan until the next Plan Year. An individual who becomes an Employee of the Premier Group after the start of the Plan Year and before April 1 shall enter the Plan immediately and a Target Award Opportunity shall be established and communicated to such Employee as soon as administratively practicable. Notwithstanding the foregoing, anyone employed by a member of the Premier Group who receives an annual cash incentive award opportunity under the Premier, Inc. Equity Incentive Plan (or its successor) for a fiscal year shall not be eligible to earn an annual incentive under the Plan for such fiscal year. Employees must have three full months of participation in the Plan during the Plan Year to participate in the Plan.
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4.2.
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Term of Participation. A Participant’s participation in the Plan shall continue until the earlier to occur of: (a) the Participant’s Termination of Employment, or (b) termination of the Plan as provided in Article 10.
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5.1
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Goals and Performance Standards. The Chief Executive Officer of the Company or other appropriate senior executives of the Premier Group shall recommend to the Committee: (a) Plan Year goals, and (b) performance standards that will be used to determine the degree to which the goals have been achieved (“Goals and Performance Standards”). Threshold, Target and Stretch Performance Standards shall be established for each Goal. The Goals and Performance Standards shall be measurable as of the conclusion of the Plan Year.
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5.2.
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Committee Approval. The Committee will review, and will approve or modify as it deems appropriate, the recommendations for Goals and Performance Standards as provided by Section 5.1.
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6.1
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Target Award Opportunity. For each Plan Year, the Chief Executive Officer of the Company or other appropriate senior executives of the Premier Group shall establish a Target award opportunity for each Participant (the “Target Award Opportunity”). The Target Award Opportunity shall be expressed as a percent of a Participant’s Earnings for the Plan Year. Each Target Award Opportunity may consist of several components, including without limitation:
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•
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Company Goals
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•
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Departmental/Unit Goals
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•
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Individual Goals
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•
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Goals at the discretion of the Chief Executive Officer or other appropriate senior executives
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6.2.
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Participant Notification. The Administrator shall notify each Participant of the Participant’s Target Award Opportunity for the Plan Year as soon as practicable following the establishment of such Target Award Opportunity.
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7.1
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Performance Review. Within 90 days of the conclusion of the Plan Year, the Committee shall review and approve the performance of the Premier Group in achieving the Goals and Performance Standards for the Plan. The Administrator shall make a determination of the Award percentage for each Participant based on total, aggregate Goals and Performance Standard achievement approved by the Committee (“Performance Standard Achievement”) utilizing the following:
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7.2.
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Award Calculation. The Administrator shall calculate a Participant’s award under the Plan (the “Award”) applying the following formula: the Award percentage, as described in Section 7.1 above, multiplied by the Target Award Opportunity, multiplied by the Participant’s Earnings for the Plan Year. For example, if the Award percentage is 110% and a Participant has a Target Award Opportunity of 10% and Plan Year Earnings of $100,000, the Participant’s Award would be $11,000.
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8.1
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Payment and Timing. Awards shall be paid in cash by the Company on or about the September 15th immediately following the end of the Company's fiscal year in which they were earned, but in no event later than the next following March 15th (or such later date as is permitted under Internal Revenue Service regulations or guidance with respect to qualifying the awards under the short-term deferral exception under Treasury Regulation Section 1.409A-1(b)(4)). No Awards shall be increased with interest due to a delayed payment. A Participant who is employed on the last business day of the Plan Year or who qualifies for a pro rata payment under Section 9.1 of the Plan need not be employed by the Premier Group on the date that payment of the Award is actually made.
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8.2.
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Deferral of Payment. Notwithstanding any other provision of the Plan, a Participant’s Award shall not be paid in cash to the extent that the Participant has entered into a deferral agreement, an employment agreement or such other agreement with the Company or another member of the Premier Group which agreement specifically provides for the deferral of an Award otherwise payable under the Plan and which agreement is drafted and operated to meet the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).
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8.3.
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Recoupment Policy. A Participant’s eligibility to participate in, receive Awards under, and rights to payment pursuant to this Plan is conditioned upon the Participant’s being subject to any compensation recovery policy that may be adopted from time to time by the Company or any subsidiary of the Company (a “Recoupment Policy”) and all amounts payable pursuant to this Plan shall be subject to the Recoupment Policy.
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9.1
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Termination Due to Death, Disability, Retirement or a Change in Control. In the event a Participant’s employment with the Premier Group terminates or ends at any point in time before or after the end of the Plan Year as a result of a Participant’s: (a) death, Disability or Retirement, or (b) resignation occurring within two years following a Change in Control, the Participant (or the Participant’s estate in the event of the Participant’s death) shall be entitled to a payment under Article 7 on a pro rata basis as determined by the Administrator.
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9.2.
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Other Termination Events. In the event a Participant’s employment terminates or ends at any point in time before the last business day of the Plan Year for any reason other than the Participant’s: (a) death, Disability or Retirement, or (b) resignation occurring within two years following a Change in Control, the Participant’s participation in the Plan shall immediately terminate, and the Participant shall forfeit all rights under the Plan, including the right to receive any Award or any payment of all or a portion of any Award.
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10.1
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Right to Amend, Suspend or Terminate Plan. The Committee reserves the right at any time to amend, modify, suspend or terminate the Plan for any reason and without the consent of the Administrator, the Participants or any other person.
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10.2.
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Notice. Notice of any amendment, modification, suspension or termination of the Plan shall be given by the Committee to the Administrator and to all Participants.
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11.1
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Limitation of Rights. The granting of any rights to a Participant under the provisions of the Plan represent only a discretionary, contingent right to receive compensation. Accordingly, nothing in this Plan shall be construed:
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(a)
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To limit in any way the right of the Premier Group to terminate a Participant’s employment at any time for any reason;
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(b)
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To evidence any agreement or understanding, express or implied, that the Premier Group will employ a Participant in any particular capacity for any particular term or for any particular remuneration; or
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(c)
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To grant any right to, or interest in, either express or implied, any equity position or ownership in the Premier Group.
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11.2
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Alienation. No benefit provided by this Plan shall be transferable by the Participant except on the Participant’s death, as provided in this Plan. No right or benefit under this Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge. Any attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right or benefit under this Plan shall be void. No right or benefit under this Plan shall, in any manner, be liable for or subject to any debts, contracts, liabilities or torts of the person entitled to the right or benefit. If any Participant becomes bankrupt or attempts to anticipate, alienate, assign, pledge, sell, encumber or charge any right or benefit under this Plan, then the right or benefit shall, in the discretion of the Administrator, cease. In that event, the Company may hold or apply the right or benefit, or any part of the right or benefit, for the benefit of the Participant, his or her spouse, children, or dependents, the beneficiary or any of them, in the manner or in the proportion that the Administrator shall deem proper, in its sole discretion, but it shall not be required to do so.
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11.3.
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Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant, or beneficiary thereof, to remit to the Company, the minimum statutory amount to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan prior to making any payments hereunder.
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11.4.
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Unfunded Plan. The Plan shall be unfunded. Premier Group shall not be required to segregate or earmark any cash, or other assets and property in connection with the Plan. The Premier Group, the Committee and the Administrator shall not have any fiduciary responsibility to any Employee or Participant in connection with this Plan. In addition, the Premier Group shall not be deemed to be a trustee of any amounts to be paid to a Participant. Any liability of the Premier Group to pay any Participant with respect to a potential Plan Award shall be based solely upon any obligations created pursuant to the provisions of the Plan; and no such obligation shall be deemed to be secured by any pledge or encumbrance on any property of the Premier Group. However, the Premier Group shall have the discretion at any time to segregate such assets that may be represented by an Award. Such assets will at all times remain the property of the Premier Group. Moreover, any Participants and their beneficiaries shall at all times be merely unsecured creditors of the Company.
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11.5.
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Plan Document Governs. In the event of a conflict between any other written or oral statements and this Plan document, the provisions of this Plan document shall govern.
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11.6.
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Governing Law. The construction and operation of this Plan are governed by the laws, rules, and judicial decisions of the State of Delaware, except as superseded by federal law.
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11.7.
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Headings. All headings in the Plan are for reference only and not to be utilized in construing the Plan.
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11.8.
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Gender. Unless clearly appropriate, all nouns of whatever gender refer indifferently to persons of any gender.
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11.9.
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Singular and Plural. Unless clearly inappropriate, singular terms refer also the plural and vice versa.
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11.10.
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Severability. Every provision of this Plan is severable from every other provision of this Plan. Thus, if any part of the provisions contained in this Plan document is determined by a court of competent jurisdiction or by any arbitration panel to which a dispute is submitted to be invalid, illegal or incapable of being enforced, then such covenant or provision (with such modification as shall be required in order to render such covenant or provision not invalid, illegal or incapable of being enforced) shall remain in full force and effect, and all other covenants and provisions contained in this Plan document shall, nevertheless, remain in full force and effect to the fullest extent permitted by law, unless the continuance of the Plan in such circumstances is not consistent with its purposes.
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11.11.
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Waiver of Breach. Waiver by the Committee, the Administrator or the Premier Group of any provision of this Plan shall not operate or be construed as a waiver of any other provision of this Plan or any other future breach of the provisions so waived.
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11.12.
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Code Section 409A.
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(a)
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The Plan is intended to be exempt from the requirements of Section 409A of the Code and the rules, regulations and other guidance promulgated thereunder (“Code Section 409A”) and shall be construed and interpreted in such a manner consistent with said intent.
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(b)
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Notwithstanding the foregoing, in the event any portion of the Plan is determined to involve the deferral of compensation or the payment of “nonqualified deferred compensation” (as such term is described in Code Section 409A), such portion of the Plan shall be interpreted to comply with Code Section 409A, and each provision that conflicts with such requirements shall be neither valid nor enforceable. The Committee may amend any such portion of the Plan determined to be subject to the requirements of Code Section 409A to the extent required to comply with Code Section 409A, as the Committee may determine to be necessary or appropriate.
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(c)
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Notwithstanding anything to the contrary in this Section 11.12, in no event whatsoever shall any member of the Premier Group be liable for any additional tax, interest or penalties that may be imposed on a Participant as a result of Section 409A of the Code or any damages for failing to comply with Section 409A of the Code.
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(d)
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The following provisions shall apply upon a “separation from service” (as defined by Code Section 409A) on or after the date that any stock of the Company (or its parent) becomes publicly traded on an established securities market or otherwise. If the Participant is deemed on the date of such a separation from service to be a “specified employee” (within the meaning of that term under Code Section 409A(a)(2)(B) and determined using any identification methodology and procedure selected by the Company (or its parent) from time to time, or if none, the default methodology and procedure specified under Code Section 409A), then any amounts that are considered “nonqualified deferred compensation” (within the meaning of that term under Code Section 409A) payable as a result of the Participant’s separation from service shall not be paid prior to the date which is the earlier of (i) the expiration of the six (6) month period measured from the date of such separation from service of the Participant, and (ii) the date of the Participant’s death (the “Delay Period”). Upon the expiration of the Delay Period, all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid to the Participant in a lump sum, and any remaining payments due under the Plan shall be paid or provided in accordance with the normal payment dates specified for them herein. In determining whether a Participant is subject to the delay hereinabove described, the transitional rules of Treasury Regulation § 1.409A-1(i)(6) shall be applied.”
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12.1
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Effective Date. The Plan as amended and restated shall become effective as of August 5, 2020.
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I.
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PURPOSE
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II.
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DEFINITIONS
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III.
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ADMINISTRATION
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IV.
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PURCHASE PERIODS
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V.
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ELIGIBILITY AND PARTICIPATION
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VI.
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STOCK SUBJECT TO PLAN
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VII.
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PURCHASE RIGHTS
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VIII.
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ACCRUAL LIMITATIONS
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IX.
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AMENDMENT AND TERMINATION
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X.
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TAXES
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XI.
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GENERAL PROVISIONS
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|
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-1-
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2
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3
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4
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5
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6
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7
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8
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9
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10
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(1)
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The Plan will provide a review that does not afford deference to the initial adverse benefit determination and that is conducted by an appropriate named fiduciary of the Plan who did not make the initial determination that is the subject of the appeal, nor is a subordinate of the individual who made the determination.
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(2)
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The appropriate named fiduciary of the Plan will consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment before making a decision on review of any adverse initial determination based in whole or in part on a medical judgment. The professional engaged for purposes of a consultation in the preceding sentence shall not be an individual who was consulted in connection with the initial determination that is the subject of the appeal or the subordinate of any such individual.
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(3)
|
The Plan will identify to the Claimant the medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the review, without regard to whether the advice was relied upon in making the benefit review determination.
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(4)
|
The decision on review will be made within forty-five (45) days after the Retirement Committee’s or delegate’s receipt of a request for review, unless special circumstances require an extension of time for processing, in which case a decision will be rendered not later than ninety (90) days after receipt of a request for review. A notice of such an extension must be provided to the Claimant within the initial forty-five (45) day period and must explain the special circumstances and provide an expected date of decision.
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(1)
|
its decision;
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(2)
|
the specific reasons for the decision;
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(3)
|
the relevant Plan provisions or insurance contract provisions on which its decision is based;
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(4)
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a statement that the Claimant is entitled to receive, upon request and without charge, reasonable access to, and copies of, all documents, records and other information in the Plan’s files which is relevant to the Claimant’s claim for benefits;
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(5)
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a statement describing the Claimant’s right to bring an action for judicial review under ERISA §502(a); and
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(6)
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if an internal rule, guideline, protocol or other similar criterion was relied upon in making the adverse determination on review, a statement that a copy of the rule, guideline, protocol or other similar criterion will be provided without charge to the Claimant upon request.
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11
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12
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13
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ARTICLE I
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Definitions Page
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1.01
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Annual Addition 1
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1.02
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Beneficiary 1
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1.03
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Company 2
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1.04
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Compensation 2
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1.05
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Compensation Committee 2
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1.06
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Compensation Limitation 2
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1.07
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Deferral Account 2
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1.08
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Deferral Agreement 2
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1.09
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Disability 3
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1.10
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Elective Contributions Account 3
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1.11
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Eligible Compensation 3
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1.12
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Employer 3
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1.13
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ERISA 3
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1.14
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E-Team Member 3
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1.15
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Excess Contribution 3
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1.16
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401(k) Contribution 3
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1.17
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401(k) Plan 3
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1.18
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Participant 3
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1.19
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Participating Employer 3
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1.20
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Pension Plan 3
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1.21
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Pension Contributions 4
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1.22
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Performance-Based Compensation 4
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1.23
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Plan Year 5
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1.24
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Qualified Plans 5
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1.25
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Regulations 5
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1.26
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Related Entity(ies) 5
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1.27
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Retirement 5
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1.28
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Retirement Committee 5
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1.29
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Separation from Service 5
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1.30
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Spouse 6
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1.31
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Unforeseeable Emergency 6
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1.32
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Year of Service 6
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ARTICLE II
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Eligibility for Participation
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2.01
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Participation. 6
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2.02
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Participation Date and Notice. 7
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|
im#
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ARTICLE III
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Election to Defer and Employer Contributions
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3.01
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Election to Defer. 7
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3.02
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Election Period. 8
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3.03
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Employer Contributions. 9
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ARTICLE IV
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Accounting
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4.01
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Crediting Deferred Compensation. 10
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4.02
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Earnings. 10
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4.03
|
Distributions. 11
|
ARTICLE V
|
Benefits
|
5.01
|
Separation from Service. 11
|
5.02
|
Payment Date. 11
|
5.03
|
Vesting. 11
|
5.04
|
Form of Payment. 11
|
5.05
|
Unforeseeable Emergency. 12
|
5.06
|
Election of Form and Time of Payment. 12
|
5.07
|
Withholding; Payroll Taxes. 12
|
5.08
|
Specified Employee Delay. 12
|
5.09
|
Change in Control. 12
|
ARTICLE VI
|
Administration
|
6.01
|
Administrator. 13
|
6.02
|
Agents. 13
|
6.03
|
Binding Effect. 13
|
6.04
|
Claims Procedure 13
|
ARTICLE VII
|
Amendment and Termination of the Plan
|
7.01
|
Amendment. 18
|
7.02
|
Termination. 18
|
ARTICLE VIII
|
Miscellaneous
|
8.01
|
ERISA Exemption. 18
|
8.02
|
Unsecured Creditor. 18
|
8.03
|
Participant Obligation. 19
|
8.04
|
Non-Assignability. 19
|
8.05
|
Not a Contract of Employment. 19
|
8.06
|
Cooperation. 19
|
8.07
|
Terms. 19
|
8.08
|
Construction. 19
|
8.09
|
Governing Law. 20
|
8.10
|
Validity. 20
|
8.11
|
Notice. 20
|
8.12
|
Successors. 20
|
|
ii
|
|
8.13
|
409A Compliance. 20
|
|
iii
|
|
i
|
-i-
|
|
|
|
|
|
|
|
|
|
|
Name of Subsidiary
|
State/Province of Incorporation
|
|
Premier Services, LLC (1)
|
Delaware
|
|
Premier Services II, 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
|
|
Ostonic Quality Systems, LLC (8)
|
Delaware
|
|
ProvideGx, LLC (4)
|
Delaware
|
|
Contigo Health, LLC (9)
|
Delaware
|
|
Stanson Health, Inc. (7)
|
Delaware
|
|
Intersectta, LLC (4)
|
Delaware
|
|
Conductiv, Inc. (4)
|
North Carolina
|
|
Acurity, LLC (4)
|
Delaware
|
|
Nexera, LLC (4)
|
Delaware
|
|
Conductiv Contracts, LLC (4)
|
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-8 No. 333-229531) pertaining to the 2013 Equity Incentive Plan of Premier, Inc. (as amended and restated effective December 7, 2018),
|
(3)
|
Registration Statement (Form S-3 No. 333-199158) of Premier, Inc.,
|
(4)
|
Registration Statement (Form S-8 No. 333-204628) pertaining to the 2015 Employee Stock Purchase Plan of Premier, Inc.,
|
(5)
|
Registration Statement (Form S-3/ASR No. 333-221426) of Premier, Inc., and
|
(6)
|
Registration Statement (Form S-3/ASR No. 333-244415) of Premier, Inc.;
|
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 25, 2020
|
|
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 25, 2020
|