Premier, Inc. [PINC] Filings

10-Q 1 pinc-20220331.htm 10-Q pinc-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________________________________________

FORM 10-Q

__________________________________________________________________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36092

__________________________________________________________________________________________

Premier, Inc.

(Exact name of registrant as specified in its charter)

___________________________________________________________________________________________


Delaware		35-2477140
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

13034 Ballantyne Corporate Place
Charlotte,	North Carolina	28277
(Address of principal executive offices)		(Zip Code)

(704) 357-0022

(Registrant’s telephone number, including area code)

__________________________________________________________________________________________


Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $0.01 Par Value	PINC	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of April 28, 2022, there were 117,986,674 shares of the registrant’s Class A common stock, par value $0.01 per share outstanding.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION		6
Item 1.	Financial Statements	6
	Condensed Consolidated Balance Sheets (Unaudited)	6
	Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited)	8
	Condensed Consolidated Statements of Stockholders' Equity (Unaudited)	9
	Condensed Consolidated Statements of Cash Flows (Unaudited)	11
	Notes to Condensed Consolidated Financial Statements (Unaudited)	12
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	49
Item 4.	Controls and Procedures	49
PART II. OTHER INFORMATION		50
Item 1.	Legal Proceedings	50
Item 1A.	Risk Factors	50
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	51
Item 5.	O ther Information	51
Item 6.	Exhibits	52
	Signatures	53

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Statements made in this quarterly report for the nine months ended March 31, 2022 for Premier, Inc. (this “Quarterly Report”) that are not statements of historical or current facts, such as those under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in conditional or future tenses or that include terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. Forward-looking statements may include comments as to our beliefs and expectations regarding future events and trends affecting our business and are necessarily subject to uncertainties, many of which are outside our control. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to:

•the impact of the continuing financial and operational uncertainty due to the coronavirus pandemic or other pandemics and associated supply chain disruptions and inflation;

•global economic and political instability and conflicts, such as the conflict between Russia and Ukraine, could adversely affect our business, financial condition or results of operations, including issues such as rising inflation and global supply-chain disruption;

•competition which could limit our ability to maintain or expand market share within our industry;

•consolidation in the healthcare industry;

•potential delays recognizing or increasing revenue if the sales cycle or implementation period takes longer than expected;

•the 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;

•the rate at which the markets for our software as a service (“SaaS”) or licensed-based clinical analytics products and services develop;

•the dependency of our members on payments from third-party payers;

•our reliance on administrative fees that we receive from GPO suppliers;

•our ability to maintain third-party provider and strategic alliances or enter into new alliances;

•our ability to timely offer new and innovative products and services;

•the portion of revenues we receive from our largest members;

•risks and expenses related to future acquisition opportunities and integration of previous or future acquisitions;

•financial and operational risks associated with non-controlling investments in other businesses or other joint ventures that we do not control, particularly early-stage companies;

•pending and potential litigation;

•our reliance on Internet infrastructure, bandwidth providers, data center providers and other third parties and our own systems for providing services to our users;

•data loss or corruption due to failures or errors in our systems and service disruptions at our data centers, or breaches or failures of our security measures;

•the financial, operational and reputational consequences of cyber-attacks or other data security breaches that disrupt our operations or result in the dissemination of proprietary or confidential information about us or our members or other third parties;

•our ability to use, disclose, de-identify or license data and to integrate third-party technologies;

•our use of “open source” software;

•our dependency on contract manufacturing facilities located in various parts of the world;

•inventory risk we face in the event of a potential material price decline for the personal protective equipment or other products we may have purchased at elevated market prices or fixed prices;

•our ability to attract, hire, integrate and retain key personnel;

•adequate protection of our intellectual property and potential claims against our use of the intellectual property of third parties;

•potential sales and use tax liability in certain jurisdictions;

•changes in tax laws that materially impact our tax rate, income tax expense, anticipated tax benefits, deferred tax assets, cash flows and profitability;

•our indebtedness and our ability to obtain additional financing on favorable terms, including our ability to renew or replace our existing long-term credit facility at maturity;

•fluctuation of our quarterly cash flows, revenues and results of operations;

•changes and uncertainty in the political, economic or regulatory environment affecting healthcare organizations, including with respect to the status of the Patient Protection and Affordable Care Act, as amended by the Healthcare and Education Reconciliation Act of 2010 and pandemic-related public health and reimbursement measures;

•our compliance with complex international, federal and state laws governing financial relationships among healthcare providers and the submission of false or fraudulent healthcare claims;

•interpretation and enforcement of current or future antitrust laws and regulations;

•compliance with complex federal, state and international privacy, security and breach notification laws;

•compliance with current or future laws, rules or regulations relating to information blocking provisions of the 21st Century Cures Act issued by the Office of the National Coordinator for Health Information Technology (the “ONC Rules”) that may cause our certified Health Information Technology products to be regulated by the ONC Rules;

•compliance with current or future laws, rules or regulations adopted by the Food & Drug Administration applicable to our software applications that may be considered medical devices;

•the impact of payments required under notes payable to former limited partners related to the early termination of the Unit Exchange and Tax Receivable Acceleration Agreements (the “Unit Exchange Agreements”) issued in connection with our August 2020 Restructuring on our overall cash flow and our ability to fully realize the expected tax benefits to match such fixed payment obligations under those notes payable;

•provisions in our certificate of incorporation and bylaws and provisions of Delaware law that discourage or prevent strategic transactions, including a takeover of us;

•failure to maintain an effective system of internal controls over financial reporting or an inability to remediate any weaknesses identified and the related costs of remediation;

•the impact on the price of our Class A common stock if we cease paying dividends or reduce dividend payments from current levels;

•the number of shares of Class A common stock repurchased by us pursuant to any then existing Class A common stock repurchase program and the timing of any such repurchases;

•the number of shares of Class A common stock eligible for sale after the issuance of Class A common stock in our August 2020 Restructuring and the potential impact of such sales; and

•the risk factors discussed under the heading “Risk Factors” under Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021 (the “2021 Annual Report”), filed with the Securities and Exchange Commission (“SEC”) and this Quarterly Report on Form 10-Q.

More information on potential factors that could affect our financial results is included from time to time in the “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” or similarly captioned sections of this Quarterly Report and our other periodic and current filings made from time to time with the SEC, which are available on our website at http://investors.premierinc.com/ (the contents of which are not part of this Quarterly Report). You should not place undue reliance on any of our forward-looking statements, which speak only as of the date they are made. We undertake no obligation to publicly update or revise any

forward-looking statements, whether as a result of new information or future events or otherwise. Furthermore, we cannot guarantee future results, events, levels of activity, performance or achievements.

Certain Definitions

For periods prior to August 11, 2020, references to “member owners” are references to participants in our GPO programs that were also limited partners of Premier Healthcare Alliance L.P. (“Premier LP”), sometimes referred to as “LPs,” that held Class B common units of Premier LP and shares of our Class B common stock.

For periods on or after August 11, 2020, references to “members” are references to health systems and other customers that participate in our GPO programs, or utilize any of our programs or services, some of which were formerly member owners.

References to the “August 2020 Restructuring” are references to our corporate restructuring on August 11, 2020 in which we (i) eliminated our dual-class ownership structure, through an exchange under which member owners converted their Class B common units in Premier LP and corresponding Class B common shares of Premier, Inc. into our Class A common stock, on a one-for-one basis, and (ii) exercised our right to terminate the Tax Receivable Agreement (the “TRA”) by providing all former limited partners a notice of termination and the amount of the expected payment to be made to each limited partner pursuant to the early termination provisions of the TRA with a determination date of August 10, 2020. For additional information and details regarding the August 2020 Restructuring, see our 2021 Annual Report.

References to the “Subsidiary Reorganization” are references to an internal legal organization of our corporate subsidiaries in December 2021 for the purpose of simplifying our subsidiary reporting structure. For additional information and details regarding the Subsidiary Reorganization, see our Quarterly Report for the period ended December 31, 2021.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PREMIER, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share data)


	March 31, 2022		June 30, 2021
Assets
Cash and cash equivalents	$	179,503	$	129,141
Accounts receivable (net of $852 and $1,174 allowance for credit losses, respectively)	125,632		142,557
Contract assets (net of $1,251 and $1,110 allowance for credit losses, respectively)	255,693		266,173
Inventory	130,275		176,376
Prepaid expenses and other current assets	64,897		68,049
Total current assets	756,000		782,296
Property and equipment (net of $574,185 and $518,332 accumulated depreciation, respectively)	222,583		224,271
Intangible assets (net of $322,802 and $289,912 accumulated amortization, respectively)	373,752		396,642
Goodwill	999,913		999,913
Deferred income tax assets	744,899		781,824
Deferred compensation plan assets	53,914		59,581
Investments in unconsolidated affiliates	209,205		153,224
Operating lease right-of-use assets	41,764		48,199
Other assets	113,429		76,948
Total assets	$	3,515,459	$	3,522,898

Liabilities and stockholders' equity
Accounts payable	$	53,720	$	85,413
Accrued expenses	58,129		48,144
Revenue share obligations	240,152		226,883
Accrued compensation and benefits	79,621		100,713
Deferred revenue	33,755		34,058
Current portion of notes payable to former limited partners	97,342		95,948
Line of credit and current portion of long-term debt	253,053		78,295
Other current liabilities	47,403		47,330
Total current liabilities	863,175		716,784
Long-term debt, less current portion	2,280		5,333
Notes payable to former limited partners, less current portion	225,814		298,995
Deferred compensation plan obligations	53,914		59,581

Deferred consideration, less current portion	57,762		56,809
Operating lease liabilities, less current portion	35,678		43,102
Other liabilities	43,234		112,401
Total liabilities	1,281,857		1,293,005
Commitments and contingencies (Note 14)


	March 31, 2022		June 30, 2021
Stockholders' equity:
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 124,415,319 shares issued and 117,985,944 shares outstanding at March 31, 2022 and 122,533,051 shares issued and outstanding at June 30, 2021	1,244		1,225
Treasury stock, at cost; 6,429,375 and 0 shares at March 31, 2022 and June 30, 2021, respectively	(250,129)		—
Additional paid-in capital	2,150,313		2,059,194
Retained earnings	332,171		169,474
Accumulated other comprehensive income	3		—
Total stockholders' equity	2,233,602		2,229,893
Total liabilities and stockholders' equity	$	3,515,459	$	3,522,898

See accompanying notes to the unaudited condensed consolidated financial statements.

PREMIER, INC.

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(In thousands, except per share data)


	Three Months Ended				Nine Months Ended
	March 31,				March 31,
	2022		2021		2022		2021
Net revenue:
Net administrative fees	$	148,396	$	146,553	$	448,261	$	424,537
Other services and support	105,808		107,375		320,109		304,020
Services	254,204		253,928		768,370		728,557
Products	93,629		215,995		323,825		511,080
Net revenue	347,833		469,923		1,092,195		1,239,637
Cost of revenue:
Services	46,735		46,980		136,326		125,852
Products	88,621		211,136		294,916		496,286
Cost of revenue	135,356		258,116		431,242		622,138
Gross profit	212,477		211,807		660,953		617,499
Operating expenses:
Selling, general and administrative	143,676		134,502		418,330		388,453
Research and development	826		715		2,666		2,013
Amortization of purchased intangible assets	11,151		10,400		32,890		33,864
Operating expenses	155,653		145,617		453,886		424,330
Operating income	56,824		66,190		207,067		193,169
Equity in net income of unconsolidated affiliates	3,991		5,524		17,165		16,023
Interest expense, net	(2,804)		(3,225)		(8,465)		(8,742)
(Loss) gain on FFF Put and Call Rights	—		(5,195)		64,110		(21,621)
Other (expense) income, net	(4,248)		1,594		(2,176)		10,167
Other (expense) income, net	(3,061)		(1,302)		70,634		(4,173)
Income before income taxes	53,763		64,888		277,701		188,996
Income tax expense (benefit)	14,694		13,444		40,094		(64,880)
Net income	39,069		51,444		237,607		253,876
Net income attributable to non-controlling interest	(654)		(3,123)		(1,643)		(15,903)
Adjustment of redeemable limited partners' capital to redemption amount	—		—		—		(26,685)
Net income attributable to stockholders	$	38,415	$	48,321	$	235,964	$	211,288

Comprehensive income:
Net income	$	39,069	$	51,444	$	237,607	$	253,876
Comprehensive income attributable to non-controlling interest	(654)		(3,123)		(1,643)		(15,903)
Foreign currency translation gain	4		—		3		—
Comprehensive income attributable to stockholders	$	38,419	$	48,321	$	235,967	$	237,973

Weighted average shares outstanding:
Basic	118,697		122,254		120,957		114,596
Diluted	119,813		123,116		122,302		115,365

Earnings per share attributable to stockholders:
Basic	$	0.32	$	0.40	$	1.95	$	1.84
Diluted	$	0.32	$	0.39	$	1.94	$	1.83

See accompanying notes to the unaudited condensed consolidated financial statements.

PREMIER, INC.

Condensed Consolidated Statements of Stockholders' Equity

Nine Months Ended March 31, 2022 and 2021

(Unaudited)

(In thousands)


	Class A Common Stock			Treasury Stock		Additional Paid-In Capital			Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Total Stockholders' Equity
	Shares	Amount			Shares			Amount
Balance at June 30, 2021	122,533	$	1,225		—	$	—		$	2,059,194	$	—	$	169,474	$	2,229,893
Issuance of Class A common stock under equity incentive plan	1,239	13			—	—			22,851		—		—		22,864
Treasury stock	(1,091)	—			1,091	(42,628)			—		—		—		(42,628)
Stock-based compensation expense	—	—			—	—			7,554		—		—		7,554
Repurchase of vested restricted units for employee tax-withholding	—	—			—	—			(9,171)		—		—		(9,171)
Net income	—	—			—	—			—		—		121,306		121,306
Net loss attributable to non-controlling interest	—	—			—	—			(698)		—		698		—
Dividends ($0.20 per share)	—	—			—	—			—		—		(24,877)		(24,877)
Non-controlling interest related to acquisition	—	—			—	—			23,145		—		—		23,145
Balance at September 30, 2021	122,681	1,238			1,091	(42,628)			2,102,875		—		266,601		2,328,086
Issuance of Class A common stock under equity incentive plan	579	5			—	—			14,398		—		—		14,403
Issuance of Class A common stock under employee stock purchase plan	52	1			—	—			1,976		—		—		1,977
Treasury stock	(3,377)	—			3,377	(133,396)			—		—		—		(133,396)
Stock-based compensation expense	—	—			—	—			16,234		—		—		16,234
Repurchase of vested restricted units for employee tax-withholding	—	—			—	—			(1,495)		—		—		(1,495)
Net income	—	—			—	—			—		—		77,232		77,232
Net income attributable to non-controlling interest	—	—			—	—			1,687		—		(1,687)		—
Change in ownership of consolidated entity	—	—			—	—			12		—		—		12
Dividends ($0.20 per share)	—	—			—	—			—				(24,250)		(24,250)






Foreign currency translation loss	—	—			—	—			—		(1)		—		(1)
Balance at December 31, 2021	119,935	1,244			4,468	(176,024)			2,135,687		(1)		317,896		2,278,802
Issuance of Class A common stock under equity incentive plan	12	—			—	—			118		—		—		118

Treasury stock	(1,961)	—			1,961	(74,105)			—		—		—		(74,105)
Stock-based compensation expense	—	—			—	—			14,004		—		—		14,004
Repurchase of vested restricted units for employee tax-withholding	—	—			—	—			(174)		—		—		(174)
Net income	—	—			—	—			—		—		39,069		39,069
Net income attributable to non-controlling interest	—	—			—	—			654		—		(654)		—
Change in ownership of consolidated entity	—	—			—	—			24		—		—		24
Dividends ($0.20 per share)	—	—			—	—			—		—		(24,140)		(24,140)





Foreign currency translation gain	—	—			—	—			—		4		—		4
Balance at March 31, 2022	117,986	$	1,244		6,429	$	(250,129)		$	2,150,313	$	3	$	332,171	$	2,233,602


	Class A Common Stock			Class B Common Stock			Additional Paid-In Capital	Retained Earnings / (Accumulated Deficit)		Total Stockholders' Equity
	Shares	Amount		Shares	Amount
Balance at June 30, 2020	71,627	$	716	50,213	$	—		$	138,547	$	—	$	139,263
Balance at July 1, 2020	71,627	716		50,213	—			138,547		—		139,263
Impact of change in accounting principle	—	—		—	—			—		(1,228)		(1,228)
Adjusted balance at July 1, 2020	71,627	716		50,213	—			138,547		(1,228)		138,035
Exchange of Class B common units for Class A common stock by member owners	70	1		(70)	—			2,436		—		2,437
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation	—	—		—	—			37,319		—		37,319
Increase in additional paid-in capital related to final exchange by member owners, including TRA termination	—	—		—	—			517,526		—		517,526
Issuance of Class A common stock under equity incentive plan	241	2		—	—			642		—		644
Stock-based compensation expense	—	—		—	—			7,229		—		7,229
Repurchase of vested restricted units for employee tax-withholding	—	—		—	—			(3,023)		—		(3,023)
Net income	—	—		—	—			—		157,528		157,528
Net income attributable to non-controlling interest	—	—		—	—			—		(11,845)		(11,845)
Adjustment of redeemable limited partners' capital to redemption amount	—	—		—	—			—		(26,685)		(26,685)
Reclassification of redeemable limited partners' capital to permanent equity	—	—		—	—			1,750,840		3,767		1,754,607
Final exchange of Class B common units for Class A common stock by member owners	50,143	502		(50,143)	—			(502)		—		—
Early termination payments to members	—	—		—	—			(438,967)		—		(438,967)
Dividends ($0.19 per share)	—	—		—	—			—		(23,381)		(23,381)
Balance at September 30, 2020	122,081	1,221		—	—			2,012,047		98,156		2,111,424
Issuance of Class A common stock under equity incentive plan	102	1		—	—			1,770		—		1,771
Issuance of Class A common stock under employee stock purchase plan	45	—		—	—			1,597		—		1,597
Stock-based compensation expense	—	—		—	—			7,316		—		7,316
Repurchase of vested restricted units for employee tax-withholding	—	—		—	—			(28)		—		(28)
Net income	—	—		—	—			—		44,904		44,904
Net income attributable to non-controlling interest	—	—		—	—			935		(935)		—
Dividends ($0.19 per share)	—	—		—	—			—		(23,374)		(23,374)
Adjustment in additional paid-in capital related to consolidated investment	—	—		—	—			318		(318)		—
Capital contributions	—	—		—	—			1,959		—		1,959
Non-controlling interest in consolidated investments	—	—		—	—			3,690		—		3,690
Balance at December 31, 2020	122,228	1,222		—	—			2,029,604		118,433		2,149,259
Issuance of Class A common stock under equity incentive plan	40	1		—	—			1,101		—		1,102
Stock-based compensation expense	—	—		—	—			13,056		—		13,056
Repurchase of vested restricted units for employee tax-withholding	—	—		—	—			(48)		—		(48)
Net income	—	—		—	—			—		51,444		51,444
Net income attributable to non-controlling interest	—	—		—	—			3,123		(3,123)		—
Dividends ($0.19 per share)	—	—		—	—			—		(23,403)		(23,403)
Balance at March 31, 2021	122,268	$	1,223	—	$	—		$	2,046,836	$	143,351	$	2,191,410

See accompanying notes to the unaudited condensed consolidated financial statements.

PREMIER, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended March 31,
	2022		2021
Operating activities
Net income	$	237,607	$	253,876
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	95,764		89,768
Equity in net income of unconsolidated affiliates	(17,165)		(16,023)
Deferred income taxes	36,926		(100,150)
Stock-based compensation	37,792		27,601
(Gain) loss on FFF call/put rights	(64,110)		21,621
Other	4,578		537
Changes in operating assets and liabilities, net of the effects of acquisitions:
Accounts receivable, inventories, prepaid expenses and other assets	91,418		(181,263)
Contract assets	(39,139)		(43,733)
Accounts payable, accrued expenses, deferred revenue, revenue share obligations and other liabilities	(48,882)		140,131
Net cash provided by operating activities	334,789		192,365
Investing activities
Purchases of property and equipment	(61,061)		(66,911)
Acquisition of businesses and equity method investments, net of cash acquired	(26,000)		(81,152)
Investment in unconsolidated affiliates	(16,000)		—
Other	(10,000)		(1,228)
Net cash used in investing activities	(113,061)		(149,291)
Financing activities
Payments made on notes payable	(75,082)		(31,692)
Proceeds from credit facility	300,000		225,000
Payments on credit facility	(125,000)		(100,000)
Cash dividends paid	(72,861)		(69,647)
Repurchase of Class A common stock (held as treasury stock)	(250,129)		—

Proceeds from exercise of stock options	37,385		—
Distributions to limited partners of Premier LP	—		(9,949)
Payments to limited partners of Premier LP related to tax receivable agreements	—		(24,218)
Other	14,318		712
Net cash used in financing activities	(171,369)		(9,794)
Effect of exchange rate changes on cash flows	3		—
Net increase in cash and cash equivalents	50,362		33,280
Cash and cash equivalents at beginning of period	129,141		99,304
Cash and cash equivalents at end of period	$	179,503	$	132,584

See accompanying notes to the unaudited condensed consolidated financial statements.

PREMIER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) ORGANIZATION

Organization

Premier, Inc. (“Premier” or the “Company”) is a publicly held, for-profit Delaware corporation located in the United States. The Company is a holding company with no material business operations of its own. Following the Subsidiary Reorganization, the Company’s primary asset is its equity interest in its wholly owned subsidiary Premier Healthcare Solutions, Inc., a Delaware corporation (“PHSI”). The Company conducts substantially all of its business operations through PHSI and its other consolidated subsidiaries, including Premier LP. The Company, together with its subsidiaries and affiliates, is a leading healthcare performance improvement company that unites hospitals, health systems, physicians and other healthcare providers to improve and innovate in the clinical, financial and operational areas of their businesses to meet the demands of a rapidly evolving healthcare industry and continues to expand its capabilities to more fully address and coordinate care improvement and standardization in the employer, payor and life sciences markets. The Company also provide services to other businesses including food service, schools and universities.

The Company’s business model and solutions are designed to provide its members and other customers access to scale efficiencies, spread the cost of their development, provide actionable intelligence derived from anonymized data in the Company’s enterprise data warehouse, mitigate the risk of innovation and disseminate best practices to help the Company’s members and other customers succeed in their transformation to higher quality and more cost-effective healthcare.

The Company, together with its subsidiaries and affiliates, delivers its integrated platform of solutions through two business segments: Supply Chain Services and Performance Services. See Note 15 - Segments for further information related to the Company’s reportable business segments. The Supply Chain Services segment includes one of the largest healthcare group purchasing organization (“GPO”) programs in the United States, supply chain co-management and direct sourcing activities. The Performance Services segment consists of three sub-brands: PINC AITM, the Company’s technology and services platform with offerings that help optimize performance in three main areas – clinical intelligence, margin improvement and value-based care – using advanced analytics to identify improvement opportunities, consulting services for clinical and operational design, and workflow solutions to hardwire sustainable change in the provider, life sciences and payer markets; Contigo Health®, the Company’s direct-to-employer business which provides third party administrator services and management of health benefit programs that allow employers to contract directly with healthcare providers; and RemitraTM, the Company’s digital invoicing and payables business which provides services to healthcare providers and their suppliers.

Principles of Consolidation

The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC and in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which the Company exercised control and when applicable, entities for which the Company had a controlling financial interest or was the primary beneficiary. All intercompany transactions have been eliminated upon consolidation. Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The accompanying condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, consisting of normal recurring adjustments unless otherwise disclosed. The Company believes that the disclosures are adequate to make the information presented not misleading and should be read in conjunction with the audited consolidated financial statements and related footnotes contained in the 2021 Annual Report.

Supplementary Cash Flows Information

The following table presents supplementary cash flows information for the nine months ended March 31, 2022 and 2021 (in thousands):


	Nine Months Ended March 31,
	2022		2021
Supplementary non-cash investing and financing activities:

Non-cash additions to property and equipment	$	129	$	—
Accrued dividend equivalents	738		513
Increase in redeemable limited partners' capital for adjustment to fair value, with offsetting decrease in stockholders' equity	—		26,685
Decrease in redeemable limited partners' capital, with offsetting increase in stockholders' equity related to quarterly exchanges by member owners

Premier, Inc. [PINC] Filings
10-Q	[2022-05-03]
10-Q	[2022-02-01]
10-Q	[2021-11-02]
10-K	[2021-08-17]
10-Q	[2021-05-04]
10-Q	[2021-02-02]
10-Q	[2020-11-03]
10-K	[2020-08-25]
10-Q	[2020-05-06]
10-Q	[2020-02-05]
10-Q	[2019-11-05]
10-K	[2019-08-23]
10-Q	[2019-05-07]
10-Q	[2019-02-06]
10-Q	[2018-11-07]
10-K	[2018-08-23]
10-Q	[2018-05-08]
10-Q	[2018-02-06]
10-Q	[2017-11-07]
10-K	[2017-08-23]
10-Q	[2017-05-10]
10-Q	[2017-02-07]
10-Q	[2016-11-08]
10-K	[2016-08-26]
10-Q	[2016-05-10]
10-Q	[2016-02-09]
10-Q	[2015-11-09]
10-K	[2015-08-26]
10-Q	[2015-05-12]
10-Q	[2015-02-10]
10-Q	[2014-11-12]
10-K	[2014-09-04]
10-Q	[2014-05-13]
10-Q	[2014-02-14]
10-Q	[2013-11-12]
S-1	[2013-08-26]