Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Mar. 31, 2015 | 8-May-15 | |
Document and Entity Information | ||
Entity Registrant Name | PREMIER, INC. | |
Entity Central Index Key | 1577916 | |
Current Fiscal Year End Date | -24 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | FALSE | |
Class A Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 37,662,210 | |
Class B Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 106,382,552 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Assets | ||
Cash and cash equivalents | $155,636 | $131,786 |
Marketable securities | 192,752 | 159,820 |
Accounts receivable (net of $1,109 and $1,054 allowance for doubtful accounts, respectively) | 101,165 | 67,577 |
Inventories - finished goods | 29,858 | 20,823 |
Prepaid expenses and other current assets | 32,039 | 31,175 |
Due from related parties | 712 | 1,228 |
Deferred tax assets | 13,055 | 9,647 |
Total current assets | 525,217 | 422,056 |
Property and equipment (net of $219,517 and $186,582 accumulated depreciation, respectively) | 152,972 | 134,551 |
Restricted cash | 5,000 | 5,000 |
Marketable securities | 154,944 | 248,799 |
Deferred tax assets | 348,564 | 286,936 |
Goodwill | 213,849 | 94,451 |
Intangible assets (net of $26,898 and $20,302 accumulated amortization, respectively) | 41,209 | 10,855 |
Other assets | 46,778 | 44,008 |
Total assets | 1,488,533 | 1,246,656 |
Liabilities, redeemable limited partners' capital and stockholders' deficit | ||
Accounts payable | 30,514 | 28,007 |
Accrued expenses | 40,930 | 25,536 |
Revenue share obligations | 56,076 | 56,531 |
Limited partners' distribution payable | 23,398 | 22,351 |
Accrued compensation and benefits | 45,235 | 46,713 |
Deferred revenue | 32,274 | 15,694 |
Current portion of tax receivable agreement | 10,940 | 11,035 |
Current portion of notes payable and line of credit | 4,393 | 17,696 |
Other current liabilities | 2,719 | 319 |
Total current liabilities | 246,479 | 223,882 |
Notes payable, less current portion | 15,970 | 16,051 |
Tax receivable agreement, less current portion | 233,564 | 181,256 |
Deferred compensation plan obligations | 36,031 | 32,872 |
Deferred rent | 16,047 | 15,960 |
Other long-term liabilities | 4,506 | 2,272 |
Total liabilities | 552,597 | 472,293 |
Commitments and contingencies (Note 18) | ||
Redeemable limited partners' capital | 3,995,025 | 3,244,674 |
Stockholder's Equity | ||
Additional paid-in capital | 0 | 0 |
Accumulated deficit | -3,059,480 | -2,469,873 |
Accumulated other comprehensive income | 17 | 43 |
Noncontrolling interest | 0 | -805 |
Total stockholders' deficit | -3,059,089 | -2,470,311 |
Total liabilities, redeemable limited partners' capital and stockholders' deficit | 1,488,533 | 1,246,656 |
Series A Preferred Stock | ||
Stockholder's Equity | ||
Series A Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding | 0 | 0 |
Class A Common Stock | ||
Stockholder's Equity | ||
Common stock | 374 | 324 |
Class B Common Stock | ||
Stockholder's Equity | ||
Common stock | $0 | $0 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Allowance for doubtful accounts | $1,109 | $1,054 |
Accumulated depreciation | 219,517 | 186,582 |
Accumulated amortization | $26,898 | $20,302 |
Series A Preferred Stock | ||
Preferred stock, par value | $0.01 | $0.01 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A Common Stock | ||
Common stock, par value (usd per share) | $0.01 | $0.01 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 37,376,985 | 32,375,390 |
Common stock, shares outstanding | 37,376,985 | 32,375,390 |
Class B Common Stock | ||
Common stock, par value (usd per share) | $0.00 | $0.00 |
Common stock, shares authorized | 600,000,000 | 600,000,000 |
Common stock, shares issued | 106,658,535 | 112,510,905 |
Common stock, shares outstanding | 106,658,535 | 112,510,905 |
Consolidated_Statements_of_Inc
Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | ||||
Net revenue: | ||||||||
Net administrative fees | $117,959 | $108,087 | $337,157 | $353,793 | ||||
Other services and support | 70,326 | 58,819 | 199,621 | 170,268 | ||||
Services | 188,285 | 166,906 | 536,778 | 524,061 | ||||
Products | 73,438 | 58,692 | 203,698 | 151,022 | ||||
Net revenue | 261,723 | 225,598 | 740,476 | 675,083 | ||||
Cost of revenue: | ||||||||
Services | 36,026 | 28,382 | 104,066 | 84,887 | ||||
Products | 66,789 | 52,742 | 183,302 | 136,500 | ||||
Cost of revenue | 102,815 | 81,124 | 287,368 | 221,387 | ||||
Gross profit | 158,908 | 144,474 | 453,108 | 453,696 | ||||
Operating expenses: | ||||||||
Selling, general and administrative | 86,847 | 73,327 | 243,404 | 209,096 | ||||
Research and development | 596 | 820 | 2,385 | 2,714 | ||||
Amortization of purchased intangible assets | 2,554 | 802 | 6,598 | 2,158 | ||||
Total operating expenses | 89,997 | 74,949 | 252,387 | 213,968 | ||||
Operating income | 68,911 | 69,525 | 200,721 | 239,728 | ||||
Equity in net income of unconsolidated affiliates | 5,197 | [1] | 3,566 | [1] | 14,812 | [1] | 12,171 | [1] |
Interest and investment income, net | 204 | 400 | 517 | 641 | ||||
(Loss) gain on investment | -1,000 | 37,850 | -1,000 | 37,850 | ||||
Other income (expense), net | 743 | 52 | -219 | 56 | ||||
Other income, net | 5,144 | 41,868 | 14,110 | 50,718 | ||||
Income before income taxes | 74,055 | 111,393 | 214,831 | 290,446 | ||||
Income tax expense | 2,026 | 9,413 | 12,107 | 24,461 | ||||
Net income | 72,029 | 101,980 | 202,724 | 265,985 | ||||
Net income attributable to noncontrolling interest in S2S Global | -252 | -530 | -1,836 | -477 | ||||
Net income attributable to noncontrolling interest in Premier LP | -59,568 | -87,925 | -170,135 | -246,055 | ||||
Net income attributable to noncontrolling interest | -59,820 | -88,455 | -171,971 | -246,532 | ||||
Net income attributable to shareholders | 12,209 | 13,525 | 30,753 | 19,453 | ||||
Adjustment of redeemable limited partners' capital to redemption amount | -387,062 | 495,714 | -811,969 | -3,224,098 | ||||
Net (loss) income attributable to shareholders after adjustment of redeemable limited partners' capital to redemption amount | ($374,853) | $509,239 | ($781,216) | ($3,204,645) | ||||
Weighted average shares outstanding: | ||||||||
Basic (shares) | 37,316 | [2] | 32,375 | [2] | 35,066 | 23,394 | [2] | |
Diluted (shares) | 37,316 | [3] | 32,556 | [3] | 35,066 | [3] | 23,394 | [3] |
(Loss) earnings per share attributable to shareholders after adjustment to redeemable limited partners' capital to redemption amount: | ||||||||
Basic (loss) earnings per share | ($10.05) | [3] | $15.73 | [3] | ($22.28) | [3] | ($136.99) | [3] |
Diluted (loss) earnings per share | ($10.05) | [3] | $15.64 | [3] | ($22.28) | [3] | ($136.99) | [3] |
[1] | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. | |||||||
[2] | Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock units and non-vested performance share awards for the three and nine months ended March 31, 2015 and 2014. | |||||||
[3] | The weighted average shares calculation is based on a combination of the PHSI historical common shares outstanding for the three months ended September 30, 2013 and the Premier, Inc. common shares outstanding for the period from September 25, 2013 to March 31, 2014. |
Consolidated_Statements_of_Com
Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $72,029 | $101,980 | $202,724 | $265,985 |
Net unrealized gain (loss) on marketable securities | 218 | 161 | -128 | 104 |
Total comprehensive income | 72,247 | 102,141 | 202,596 | 266,089 |
Less: Comprehensive income attributable to noncontrolling interest | -59,658 | -88,580 | -171,876 | -246,618 |
Comprehensive income attributable to shareholders | $12,589 | $13,561 | $30,720 | $19,471 |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Equity (USD $) | Total | Class A Common Stock | Class B Common Stock | Common Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Noncontrolling Interest | Accumulated Other Comprehensive Income (Loss) |
In Thousands, except Share data, unless otherwise specified | USD ($) | Class A Common Stock | Class B Common Stock | USD ($) | USD ($) | USD ($) | USD ($) | ||
USD ($) | USD ($) | ||||||||
Beginning balance at Jun. 30, 2014 | ($2,470,311) | $324 | $0 | $0 | ($2,469,873) | ($805) | $43 | ||
Beginning balance (in shares) at Jun. 30, 2014 | 32,375,000 | 112,511,000 | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Redemption of limited partners (in shares) | -910,000 | ||||||||
Redemption of limited partners | 0 | 0 | |||||||
Reduction in tax receivable agreement liability related to departed member owners | 1,580 | 1,580 | |||||||
Exchange of Class B common units for Class A common stock by member owners (in shares) | 4,942,000 | -4,942,000 | |||||||
Exchange of Class B common units for Class A common stock by member owners | 164,655 | 50 | 164,605 | ||||||
Increase in additional paid-in-capital related to quarterly exchange by member owners | 16,796 | ||||||||
Issuance of Class A common stock under equity incentive plan (in shares) | 60,000 | ||||||||
Issuance of Class A common stock under equity incentive plan | 1,076 | 1,076 | |||||||
Stock-based compensation expense | 21,129 | 21,129 | |||||||
Repurchase of vested restricted stock | -90 | -90 | |||||||
Net income attributable to shareholders | 30,753 | 30,753 | |||||||
Net income attributable to noncontrolling interest in S2S Global | 1,836 | 1,836 | |||||||
Purchase of noncontrolling interest in S2S Global | -14,518 | -13,487 | -1,031 | ||||||
Net unrealized loss on marketable securities | -26 | -26 | |||||||
Adjustment of redeemable limited partners' capital to redemption amount | -811,969 | -191,609 | -620,360 | ||||||
Ending balance at Mar. 31, 2015 | ($3,059,089) | $374 | $0 | $0 | ($3,059,480) | $0 | $17 | ||
Ending balance (in shares) at Mar. 31, 2015 | 37,377,000 | 106,659,000 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | ||
Operating activities | ||||
Net income | $202,724 | $265,985 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 39,705 | 29,110 | ||
Equity in net income of unconsolidated affiliates | -14,812 | [1] | -12,171 | [1] |
Deferred taxes | -269 | 2,833 | ||
Loss (gain) on investment | 1,000 | -37,850 | ||
Stock-based compensation | 21,129 | 13,118 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable, prepaid expenses and other current assets | -23,645 | -15,050 | ||
Other assets | -1,130 | -1,749 | ||
Inventories | -9,035 | -6,539 | ||
Accounts payable, accrued expenses, revenue share obligations and other current liabilities | 35,670 | 51,265 | ||
Long-term liabilities | 2,417 | -8 | ||
Other operating activities | 1,821 | -253 | ||
Net cash provided by operating activities | 255,575 | 288,691 | ||
Investing activities | ||||
Purchase of marketable securities | -239,782 | -369,122 | ||
Proceeds from sale of marketable securities | 298,757 | 71,459 | ||
Purchase of noncontrolling interest in S2S Global | -14,518 | 0 | ||
Distributions received on equity investment | 13,900 | 10,650 | ||
Purchases of property and equipment | -51,064 | -39,842 | ||
Other investing activities | -443 | 0 | ||
Net cash used in investing activities | -149,157 | -325,432 | ||
Financing activities | ||||
Payments made on notes payable | -1,046 | -5,121 | ||
Proceeds from S2S Global revolving line of credit | 1,007 | 6,000 | ||
Payments on S2S Global revolving line of credit | -14,715 | 0 | ||
Proceeds from senior secured line of credit | 0 | 60,000 | ||
Payments on senior secured line of credit | 0 | -60,000 | ||
Proceeds from issuance of Class A common stock in connection with the IPO, net of underwriting fees and commissions | 0 | 821,671 | ||
Payments made in connection with the IPO | 0 | -2,822 | ||
Purchases of Class B common units from member owners | 0 | -543,857 | ||
Proceeds from issuance of PHSI common stock | 0 | 300 | ||
Proceeds from notes receivable from partners | 0 | 12,706 | ||
Repurchase of restricted units | -90 | -4 | ||
Proceeds from exercise of stock options under equity incentive plan | 1,076 | 0 | ||
Distributions to limited partners of Premier LP | -68,800 | -298,388 | ||
Net cash used in financing activities | -82,568 | -9,515 | ||
Net increase (decrease) in cash and cash equivalents | 23,850 | -46,256 | ||
Cash and cash equivalents at beginning of period | 131,786 | 198,296 | ||
Cash and cash equivalents at end of period | 155,636 | 152,040 | ||
Supplemental schedule of non-cash investing and financing activities: | ||||
Issuance of limited partnership interest for notes receivable | 0 | 7,860 | ||
Payable to member owners incurred upon repurchase of ownership interest | 2,046 | 1,652 | ||
Reduction in redeemable limited partners' capital to reduce outstanding receivable | 0 | 28,009 | ||
Distributions utilized to reduce subscriptions, notes, interest and accounts receivable from member owners | 4,884 | 6,200 | ||
Reduction in redeemable limited partners' capital for limited partners' distribution payable | 23,398 | 21,352 | ||
Increase in redeemable limited partners' capital for adjustment to redemption amount, with offsetting decrease in additional paid-in-capital and accumulated deficit | 811,969 | 3,224,098 | ||
Reduction in redeemable limited partners' capital, with offsetting increase in common stock and additional paid-in capital related to quarterly exchange by member owners | -164,655 | 0 | ||
Increase in additional paid-in-capital related to quarterly exchange by member owners | 16,796 | 0 | ||
Increase in deferred tax assets related to quarterly exchange by member owners | 53,793 | 0 | ||
Increase in deferred tax assets related to quarterly exchange by member owners | 70,589 | 0 | ||
Increase in deferred tax assets and additional paid-in-capital related to the Reorganization | 0 | 282,972 | ||
Increase in payables and decrease in additional paid-in-capital pursuant to the tax receivable agreements | 0 | 186,077 | ||
Reduction in prepaid expenses and other current assets for IPO costs capitalized to additional paid-in-capital | 0 | 2,822 | ||
Meddius | ||||
Investing activities | ||||
Acquisitions, net | 0 | -7,737 | ||
Aperek | ||||
Investing activities | ||||
Acquisitions, net | -47,446 | 0 | ||
TheraDoc | ||||
Investing activities | ||||
Acquisitions, net | -108,561 | 0 | ||
SYMMEDRx | ||||
Investing activities | ||||
Acquisitions, net | 0 | -28,690 | ||
Premier Healthcare Solutions, Inc. [Member] | ||||
Investing activities | ||||
Proceeds from sale of investment in Global Healthcare Exchange, LLC | $0 | $37,850 | ||
[1] | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. |
ORGANIZATION_AND_BASIS_OF_PRES
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | ORGANIZATION AND BASIS OF PRESENTATION |
Organization | |
Premier, Inc. ("Premier" or the "Company") is a publicly-held, for-profit Delaware corporation primarily owned by hospitals, health systems and other healthcare organizations (such owners of Premier are referred to herein as "member owners") located in the United States, and by public stockholders. The Company, together with its subsidiaries and affiliates, is a leading healthcare 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 business to meet the demands of a rapidly evolving healthcare industry. | |
The Company's business model and solutions are designed to provide its members access to scale efficiencies, spread the cost of their development, provide actionable intelligence derived from anonymized data in the Company's data warehouse, mitigate the risk of innovation and disseminate best practices that will help its member organizations 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. The supply chain services segment includes one of the largest healthcare group purchasing organizations ("GPOs") in the United States, a specialty pharmacy and direct sourcing activities. The performance services segment includes one of the largest informatics and advisory services businesses in the United States focused on healthcare providers. The Company's software as a service ("SaaS") informatics products utilize its comprehensive data set to provide actionable intelligence to its members, enabling them to benchmark, analyze and identify areas of improvement across three main categories: cost management, quality and safety, and population health management. This segment also includes the Company's technology-enabled performance improvement collaboratives, advisory services and insurance management services. | |
Basis of Presentation and Consolidation | |
The Company, through its wholly owned subsidiary, Premier Services, LLC ("Premier GP"), holds a 26% controlling general partner interest in, and, as a result, consolidates the financial statements of, Premier Healthcare Alliance, L.P. ("Premier LP"). The limited partners' 74% ownership of Premier LP is reflected as redeemable limited partners' capital in the Company's consolidated balance sheets, and their proportionate share of income in Premier LP is reflected within net income attributable to noncontrolling interest in Premier LP in the Company's consolidated statements of income and within comprehensive income attributable to noncontrolling interest in the consolidated statements of comprehensive income. During the nine months ended March 31, 2015, the member owners exchanged approximately 4% of their Class B common units and associated Class B common stock for Class A common stock as part of their quarterly exchange rights under an exchange agreement (the "Exchange Agreement") entered into by the member owners in connection with the Reorganization and IPO. See Note 2 - Initial Public Offering and Reorganization for further information on the Exchange Agreement. As a result, at March 31, 2015, the member owners owned approximately 74% of the Company's combined Class A and Class B common stock (the "common stock") through their ownership of Class B common stock, and the public investors, which may include member owners that have received shares of Class A common stock in connection with previous exchanges, owned approximately 26% of the Company's outstanding common stock. | |
After the completion of a series of transactions following the consummation of the initial public offering ("IPO"), referred to as the "Reorganization" (and, collectively with the IPO, the "Reorganization and IPO"), Premier Healthcare Solutions, Inc. ("PHSI") became a consolidated subsidiary of the Company. PHSI is considered the predecessor of the Company for accounting purposes, and accordingly, PHSI's consolidated financial statements are the Company's historical financial statements, for periods prior to October 1, 2013. The historical consolidated financial statements of PHSI are reflected herein based on PHSI's historical ownership interests of Premier LP and its consolidated subsidiaries. | |
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The 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, including normal recurring adjustments. The Company believes that the disclosures are adequate to make the information presented not misleading and should be read in conjunction with the consolidated financial statements and related footnotes contained in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2014 ("2014 Annual Report"). | |
The Company has reclassified certain prior period amounts to be consistent with the current period presentation and corrected certain classification differences in both the consolidated statements of cash flows and consolidated statements of income. For the nine months ended March 31, 2014, the Company has presented $2.8 million in costs associated with the IPO as financing rather than operating activities in the consolidated statements of cash flows. Additionally, as discussed in Note 23 to the consolidated financial statements in the June 30, 2014 Form 10-K, the Company has corrected the adjustment of redeemable limited partners' capital to redemption amount by approximately $21.4 million for the three and nine months ended March 31, 2014, respectively, from $517.1 million and $(3,203) million, respectively, as reported in the prior period to $495.7 million and $(3,224) million, respectively, as reported herein, to correct an immaterial classification difference between redeemable limited partners' capital and (accumulated deficit) retained earnings. For the three months ended March 31, 2014, the adjustment decreased both basic and diluted net income per share attributable to shareholders by $.66 from $16.39 and $16.30, respectively, as reported in the prior period, to $15.73 and $15.64, respectively, as reported herein. For the nine months ended March 31, 2014, the adjustment increased both basic and diluted net loss per share attributable to shareholders by $.92 from $136.07 as reported in the prior period to $136.99 as reported herein. | |
Use of Estimates in the Preparation of Financial Statements | |
The preparation of the Company's consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Estimates are evaluated on an ongoing basis, including allowances for doubtful accounts, useful lives of property and equipment, stock-based compensation, payables under the tax receivable agreement, values of investments not publicly traded, the valuation allowance on deferred tax assets and the fair value of purchased intangible assets and goodwill. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. |
INITIAL_PUBLIC_OFFERING_AND_RE
INITIAL PUBLIC OFFERING AND REORGANIZATION | 9 Months Ended | ||||
Mar. 31, 2015 | |||||
Initial Public Offering and Reorganization [Abstract] | |||||
Initial Public Offering and Reorganization | INITIAL PUBLIC OFFERING AND REORGANIZATION | ||||
Initial Public Offering | |||||
On October 1, 2013, Premier completed its IPO of 32,374,751 shares of its Class A common stock, at a price of $27.00 per share, raising net proceeds of approximately $821.7 million after underwriting discounts and commissions, but before expenses. | |||||
Premier used approximately (i) $543.9 million of the net proceeds from the IPO to acquire 21,428,571 Class B common units from the member owners, (ii) $30.1 million of the net proceeds to acquire 1,184,882 Class B common units from PHSI and (iii) $247.7 million of the net proceeds to acquire 9,761,298 newly issued Class A common units of Premier LP, or the Class A common units, from Premier LP, in each case for a price per unit equal to the price paid per share of Class A common stock by the underwriters to Premier in connection with the IPO. All Class B common units purchased by Premier with the net proceeds from the IPO automatically converted to Class A common units, pursuant to the terms of the LP Agreement, and were contributed by Premier to Premier GP. | |||||
Reorganization | |||||
On October 1, 2013 (the "Effective Date"), Premier completed the Reorganization. In connection with the Reorganization and IPO, immediately following the Effective Date, all of Premier LP's limited partners that approved the Reorganization received an amount of Class B common units and capital account balances in Premier LP equal to their percentage interests and capital account balances in Premier LP immediately preceding the Reorganization. Additionally, immediately following the Effective Date, all of the stockholders (consisting of member owners) of PHSI that approved the Reorganization contributed their PHSI common stock to Premier LP in exchange for additional Class B common units based on such stockholder's percentage interest in the fair market valuation of PHSI and Premier LP prior to the Reorganization. As a result of the foregoing contributions, PHSI became a wholly owned subsidiary of Premier LP. | |||||
In connection with the Reorganization, the member owners purchased from Premier 112,607,832 shares of Class B common stock, for par value, $0.000001 per share, which number of Class B common stock equaled the number of Class B units held by the member owners immediately following the IPO, pursuant to a stock purchase agreement. | |||||
Below is a summary of the principal documents that effected the Reorganization and define and regulate the governance and control relationships among Premier, Premier LP and the member owners after the completion of the Reorganization and IPO. | |||||
LP Agreement | |||||
In connection with the Reorganization and IPO, pursuant to the LP Agreement, Premier GP became the general partner of Premier LP. As the general partner of Premier LP, Premier GP generally controls the day-to-day business affairs and decision-making of Premier LP without the approval of any other partner, subject to certain limited partner approval rights. As the sole member of Premier GP, Premier is responsible for all operational and administrative decisions of Premier LP. In accordance with the LP Agreement, subject to applicable law or regulation and the terms of Premier LP's financing agreements, Premier GP will cause Premier LP to make quarterly distributions out of its estimated taxable net income to Premier GP and to the holders of Class B common units as a class in an aggregate amount equal to Premier LP's total taxable income other than net profit attributable to dispositions not in the ordinary course of business for each such quarter multiplied by the effective combined federal, state and local income tax rate then payable by Premier to facilitate payment by each Premier LP partner of taxes, if required, on its share of taxable income of Premier LP. In addition, in accordance with the LP Agreement, Premier GP may cause Premier LP to make additional distributions to Premier GP and to all limited partners holding Class B common units as a class in proportion to their respective number of units, subject to any applicable restrictions under Premier LP's financing agreements or applicable law. Premier GP will distribute any amounts it receives from Premier LP to Premier, which Premier will use to (i) pay applicable taxes, (ii) meet its obligations under the tax receivable agreement and (iii) meet its obligations to the member owners under the Exchange Agreement if they elect to convert their Class B common units for shares of its Class A common stock and Premier elects to pay some or all of the consideration to such member owners in cash. | |||||
In the event that a limited partner of Premier LP holding Class B common units not yet eligible to be exchanged for shares of Premier's Class A common stock pursuant to the terms of the Exchange Agreement (i) ceases to participate in Premier's GPO programs, (ii) ceases to be a limited partner of Premier LP (except as a result of a permitted transfer of its Class B common units), (iii) ceases to be a party to a GPO participation agreement (subject to certain limited exceptions) or (iv) becomes a related entity of, or affiliated with, a competing business of Premier LP, in each case, Premier LP will have the option to redeem all of such limited partner's Class B common units not yet eligible to be exchanged at a purchase price set forth in the LP Agreement. In addition, the limited partner will be required to exchange all Class B common units eligible to be exchanged on the next exchange date following the date of the applicable termination event described above. | |||||
Voting Trust Agreement | |||||
Additionally, in connection with the Reorganization and IPO, Premier's member owners entered into a voting trust agreement (the "Voting Trust Agreement"), which became effective upon the completion of the Reorganization and IPO and pursuant to which the member owners contributed their Class B common stock into Premier Trust, under which Wells Fargo Delaware Trust Company, N.A., as trustee, acts on behalf of the member owners for purposes of voting their shares of Class B common stock. As a result of the Voting Trust Agreement, the member owners retain beneficial ownership of the Class B common stock, while the trustee is the legal owner of such equity. Pursuant to the Voting Trust Agreement, the trustee will vote all of the member owners' Class B common stock as a block in the manner determined by the plurality of the votes received by the trustee from the member owners for the election of directors to serve on our board of directors and by a majority of the votes received by the trustee from the member owners for all other matters. | |||||
Exchange Agreement | |||||
In connection with the Reorganization and IPO, Premier, Premier LP and the member owners entered into the Exchange Agreement which became effective upon the completion of the Reorganization and IPO. Pursuant to the terms of the Exchange Agreement, subject to certain restrictions, commencing on October 31, 2014, and during each year thereafter, each member owner has the cumulative right to exchange up to one-seventh of its initial allocation of Class B common units, as well as any additional Class B common units purchased by such member owner pursuant to certain rights of first refusal (discussed below), for shares of Class A common stock (on a one-for-one basis subject to customary adjustments for subdivisions or combinations by split, reverse split, distribution, reclassification, recapitalization or otherwise), cash or a combination of both, the form of consideration to be at the discretion of Premier's audit committee (or another committee of independent directors). This exchange right can be exercised on a quarterly basis (subject to certain restrictions contained in the registration rights agreement described below) and is subject to rights of first refusal in favor of the other holders of Class B common units and Premier LP. For each Class B common unit that is exchanged pursuant to the Exchange Agreement, the member owner will also surrender one corresponding share of our Class B common stock, which will automatically be retired. | |||||
Registration Rights Agreement | |||||
In connection with the Reorganization and IPO, Premier and the member owners entered into a registration rights agreement (the "Registration Rights Agreement") which became effective upon the completion of the Reorganization and IPO. Pursuant to the terms of the Registration Rights Agreement, Premier filed with the SEC a resale shelf registration statement for resales from time to time of its Class A common stock issued to the member owners in exchange for their Class B common units pursuant to the Exchange Agreement, subject to various restrictions. The registration statement was declared effective by the SEC in November 2014. Subject to certain exceptions, Premier will use reasonable efforts to keep the resale shelf registration statement effective for seven years. In addition, Premier will undertake to conduct an annual company-directed underwritten public offering to allow the member owners to resell Class A common stock and, at Premier's election, to permit it to sell primary shares, following the first quarterly exchange date of each of the first three years during which the member owners have the right to exchange their Class B common units for shares of Class A common stock. Premier will not be required to conduct a company-directed underwritten public offering unless the number of shares of Class A common stock requested by the member owners (and any third parties) to be registered in the applicable company-directed underwritten public offering constitutes the equivalent of at least 3.5% of the aggregate number of Class A common units and Class B common units, or, collectively, the common units, outstanding. If the offering minimum has not been met, Premier will either proceed with the company-directed underwritten public offering (such decision being in Premier's sole discretion) or notify the member owners that Premier will abandon the offering. After the third year during which member owners have the right to exchange their Class B common units for shares of Premier's Class A common stock, Premier may elect to conduct a company-directed underwritten public offering in any subsequent year. Premier, as well as the member owners, and third parties, will be subject to customary prohibitions on sale prior to and for 60 days following any company-directed underwritten public offering. The Registration Rights Agreement also grants the member owners certain "piggyback" registration rights with respect to other registrations of Class A common stock. | |||||
Tax Receivable Agreement | |||||
In connection with the Reorganization and IPO, Premier entered into a tax receivable agreement with the member owners which became effective upon the completion of the Reorganization and IPO. Pursuant to the terms of the tax receivable agreement, Premier has agreed to pay to the member owners for as long as the member owner remains a limited partner, generally over a 15-year period (under current law), 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local income and franchise tax that Premier actually realizes (or is deemed to realize, in the case of payments required to be made upon certain occurrences under such tax receivable agreement) as a result of the increases in tax basis resulting from the initial sale of Class B common units by the member owners in connection with the Reorganization, as well as subsequent exchanges by such member owners pursuant to the Exchange Agreement, and of certain other tax benefits related to Premier entering into the tax receivable agreement, including tax benefits attributable to payments under the tax receivable agreement. | |||||
GPO Participation Agreement | |||||
In connection with the Reorganization and IPO, Premier's member owners entered into GPO participation agreements with Premier LP which became effective upon the completion of the Reorganization and IPO. Pursuant to the terms of its GPO participation agreement, each member owner will receive cash sharebacks, or revenue share, from Premier LP equal to 30% of all gross administrative fees collected by Premier LP based upon purchasing by such member owner's acute and alternate site providers and other eligible non-healthcare organizations that are owned, leased or managed by, or affiliated with, each such member owner, or member facilities, through Premier's GPO supplier contracts. In addition, Premier's two largest regional GPO member owners, which represented, in the aggregate, approximately 16% of Premier LP's gross administrative fees revenue for fiscal year 2014, will each remit all gross administrative fees collected by such member owner based upon purchasing by such member owner's member facilities through the member owner's own GPO supplier contracts and receive revenue share from Premier LP equal to 30% of such gross administrative fees remitted to Premier LP. Subject to certain termination rights, these GPO participation agreements will be for an initial five-year term, although Premier LP's two largest regional GPO member owners have entered into agreements with seven-year terms. | |||||
The terms of the GPO participation agreements vary as a result of provisions in Premier's existing arrangements with member owners that conflict with the terms of the GPO participation agreement and which by the express terms of the GPO participation agreement are incorporated by reference and deemed controlling and will continue to remain in effect. In certain other instances, Premier LP and member owners have entered into GPO participation agreements with certain terms that vary from the standard form, which were approved by the member agreement review committee of Premier's board of directors, based upon regulatory constraints, pending merger and acquisition activity or other circumstances affecting those member owners. | |||||
Effects of the Reorganization | |||||
Immediately following the consummation of the Reorganization and IPO: | |||||
• | Premier became the sole member of Premier GP and Premier GP became the general partner of Premier LP. Through Premier GP, Premier exercises indirect control over the business operated by Premier LP, subject to certain limited partner approval rights. Premier GP has no employees and acts solely through its board of managers and appointed officers in directing the affairs of Premier LP; | ||||
• | the member owners held 112,607,832 shares of Class B common stock and 112,607,832 Class B common units; | ||||
• | Premier GP held 32,374,751 Class A common units; | ||||
• | through their holdings of Class B common stock, the member owners had approximately 78% of the voting power in Premier; | ||||
• | the investors in the IPO collectively owned all of Premier's outstanding shares of Class A common stock and collectively had approximately 22% of the voting power in Premier; and | ||||
• | Premier LP was the operating partnership and parent company to all of Premier's other operating subsidiaries, including Premier Supply Chain Improvement, Inc. ("PSCI") and PHSI. | ||||
Any newly admitted Premier LP limited partners will also become parties to the Exchange Agreement, the Registration Rights Agreement, the Voting Trust Agreement and the tax receivable agreement, in each case on the same terms and conditions as the then existing member owners (except that any Class B common units acquired by such newly admitted Premier LP limited partners will not be subject to the seven-year vesting schedule set forth in the LP Agreement and the Exchange Agreement). Any newly admitted Premier LP limited partner will also enter into a GPO participation agreement with Premier LP. | |||||
Impact of the Reorganization | |||||
The impact of the Reorganization gave effect to: | |||||
• | (i) the issuance of 32,374,751 shares of Class A common stock in the IPO, or approximately 22% of the Class A common stock and Class B common stock, collectively, outstanding after the Reorganization and IPO, at an IPO price of $27.00 per share and the use of the net proceeds therefrom to purchase (A) Class A common units from Premier LP, (B) Class B common units from PHSI and (C) Class B common units from Premier's member owners, (ii) the entry by Premier LP, Premier GP and the member owners into the LP Agreement and (iii) the issuance of 112,607,832 shares of Class B common stock to the member owners; | ||||
• | the change from the 99% noncontrolling interest held by the limited partners of Premier LP prior to the Reorganization to the approximately 78% noncontrolling interest held by the limited partners of Premier LP subsequent to the Reorganization and IPO; | ||||
• | the change in the allocation of Premier LP's income from 1% of operating income and 5% of investment income to PHSI prior to the Reorganization and IPO to approximately 22% of Premier LP's income to Premier (indirectly through Premier GP) subsequent to the Reorganization and IPO as the result of the modified income allocation provisions of the LP Agreement and Premier's purchase of approximately 22% of the common units; | ||||
• | adjustments to reflect redeemable limited partners' capital at the greater of the book value or redemption amount per the LP Agreement; | ||||
• | adjustments that give effect to the tax receivable agreement, including the effects of the increase in the tax basis of Premier LP's assets resulting from Premier's purchase of Class B common units from the member owners; and | ||||
• | estimated payments due to member owners pursuant to the tax receivable agreement equal to 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local income and franchise tax that Premier actually realizes (or is deemed to realize in the case of certain payments required to be made upon certain occurrences under such tax receivable agreement) as a result of the increases in the tax basis of Premier LP's assets resulting from Premier's purchase of Class B common units from the member owners and of certain other tax benefits related to Premier entering into the tax receivable agreement. | ||||
Premier accounted for the Reorganization as a non-substantive transaction in a manner similar to a transaction between entities under common control pursuant to Accounting Standards Codification Topic 805, Business Combinations. Accordingly, after the Reorganization, the assets and liabilities of Premier are reflected at their carryover basis. | |||||
The following table presents the adjustments to the balance sheet upon the consummation of the Reorganization and IPO at October 1, 2013 (in thousands): | |||||
Assets | |||||
Cash and cash equivalents | $ | 277,814 | -1 | ||
Prepaid expenses and other current assets | (5,911 | ) | -2 | ||
Total current assets | 271,903 | ||||
Deferred tax assets | 282,972 | -3 | |||
Total assets | $ | 554,875 | |||
Liabilities, redeemable limited partners' capital and stockholders' deficit | |||||
Payable pursuant to tax receivable agreement | $ | 6,966 | -3 | ||
Total current liabilities | 6,966 | ||||
Payable pursuant to tax receivable agreement, less current portion | 179,111 | -3 | |||
Total liabilities | 186,077 | ||||
Redeemable limited partners' capital | 2,799,121 | -4 | |||
Stockholders' deficit: | |||||
Common stock, par value $0.01, 12,250,000 shares authorized; no shares outstanding | (56 | ) | -5 | ||
Class A common stock, par value $0.01, 500,000,000 shares authorized; 32,374,751 shares issued and outstanding | 324 | -5 | |||
Class B common stock, par value $0.000001, 600,000,000 shares authorized; 112,607,832 shares issued and outstanding | — | -5 | |||
Additional paid-in capital | (28,828 | ) | -6 | ||
Accumulated deficit | (2,401,766 | ) | -7 | ||
Accumulated other comprehensive income | 3 | -4 | |||
Total stockholders' deficit | (2,430,323 | ) | |||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | $ | 554,875 | |||
-1 | Reflects net effect on cash and cash equivalents of the receipt of gross proceeds from the IPO of $874.1 million (with an IPO price of $27.00 per share of Class A common stock) and the purchase of units from the member owners described above, as follows (in thousands): | ||||
Gross proceeds from the IPO | $ | 874,118 | |||
Underwriting discounts, commissions and other expenses | (52,447 | ) | |||
Purchases of Class B common units from the member owners | (543,857 | ) | |||
Net cash proceeds from IPO | $ | 277,814 | |||
-2 | Reflects the reduction of prepaid expenses related to the IPO, with an offset to the proceeds of the IPO in additional paid-in capital. | ||||
-3 | Premier LP has made an election under Section 754 of the Internal Revenue Code of 1986, as amended, or the Code, and comparable elections under state and local tax law, such that the initial sale of Class B common units by PHSI and the member owners resulted in adjustments to the tax basis of the assets of Premier LP. These increases in tax basis increase (for tax purposes) the depreciation and amortization deductions by Premier LP, and therefore, reduce the amount of income tax that Premier would otherwise be required to pay in the future. In connection with the Reorganization and IPO, Premier has entered into a tax receivable agreement with the member owners which became effective upon the completion of the Reorganization and IPO, pursuant to which Premier agreed to pay to the member owners, generally over a 15-year period (under current law), 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local and franchise income tax that Premier actually realizes (or is deemed to realize, in the case of payments required to be made upon certain occurrences under such tax receivable agreement) as a result of the increases in tax basis resulting from the sale or exchange of Class B common units by the member owners. The unaudited adjustments give effect to the Section 754 election and the tax receivable agreement based on the following assumptions: | ||||
• | The increase in deferred tax assets representing the income tax effects of the increases in the tax basis as a result of Premier LP's election under Section 754 of the Code in connection with the initial sale of Class B common units described above. This adjustment is calculated based on an effective income tax rate for Premier of approximately 39%, which includes a provision for U.S. federal income taxes and assumes (i) Premier's statutory rates apportioned to each state and local tax jurisdiction, (ii) that there are no material changes in the relevant tax law, and (iii) that Premier earns sufficient taxable income in each year to realize the full tax benefit of the amortization of its assets. | ||||
• | Premier determined the adjustments in connection with the Section 754 election by first calculating the excess of each selling member owner's and PHSI's selling price over such person's share of Premier LP's tax basis in its assets attributable to the Class B common units sold to Premier. Premier then allocated the aggregate excess among Premier LP's assets following applicable tax regulations governing adjustments that result from the Section 754 election. Premier determined each selling member owner's share of the tax basis in Premier LP's assets attributable to the Class B common units sold to Premier by multiplying the member owner's tax capital account balance as of the date of sale as maintained in Premier LP's books and records by a fraction, the numerator of which was the number of Class B common units sold to Premier, and the denominator of which was the number of Class B common units held by the selling member owner immediately prior to the sale. For purposes of the calculation, the selling price per Class B common unit was equal to the net price paid per share of the Class A common stock by the underwriters to Premier in the IPO. The adjustments increased Premier LP's basis in its assets (for tax purposes), and Premier calculates the amount of depreciation, amortization and other deductions to which it is entitled as a result of these adjustments. Premier then calculates Premier's tax liability with and without the deductions attributable to these adjustments, assuming that Premier earns sufficient taxable income in each year to realize the full benefit of the deductions. Premier computed the estimated tax benefit attributable to the election as the excess of Premier's tax liability as so computed without the deductions over Premier's tax liability as so computed with the deductions. Additionally, the tax receivable agreement payments give rise to adjustments that result in Premier LP becoming entitled to additional deductions, and the calculation of Premier's liability under the tax receivable agreement take these adjustments and additional resulting deductions into account. | ||||
• | Premier LP's election under Section 754 of the Code was at the discretion of Premier LP and is not subject to review or approval by the IRS or other tax authorities. The computation of the adjustments resulting from the Section 754 election and Premier's tax liability is subject to audit by the IRS and other tax authorities in the same manner as all other items reported on income tax returns. | ||||
• | Upon the Reorganization and IPO, the cumulative adjustments of $186.1 million, of which $7.0 million was expected to be paid over the next 12 months, and was reflected as a current liability with the remaining balance classified as a long-term liability, to reflect a liability equal to 85% of the estimated realizable tax benefit resulting from the increase in tax basis due to Premier LP's Section 754 election in connection with the initial sale by the member owners of the Class B common units described above as an increase to payable pursuant to the tax receivable agreement. | ||||
• | Deferred tax assets are measured based on the difference in tax basis of Premier's investment in Premier LP as compared to its GAAP carrying value and include the change in allocations in connection with the Reorganization. The adjustments related to Premier LP's Section 754 election described above are a component of Premier's tax basis in Premier LP. | ||||
Pursuant to the terms of the Exchange Agreement, the member owners and new limited partners admitted to Premier LP following the completion of the IPO may subsequently exchange Class B common units in Premier LP for shares of Premier's Class A common stock, cash or a combination of both. Any subsequent exchanges of Class B common units for shares of Premier's Class A common stock pursuant to the Exchange Agreement may result in increases in the tax basis of the tangible and intangible assets of Premier LP (85% of the realized tax benefits from which will be due to the limited partners and recorded as an additional payable pursuant to the tax receivable agreement) that otherwise would not have been available. These subsequent exchanges have not been reflected in the consolidated financial statements. | |||||
-4 | Reflects the increase in the noncontrolling interest held by the limited partners in Premier L.P. resulting from the net proceeds from the IPO used to purchase Class A common units from Premier LP of $247.7 million and Class B common units from PHSI of $30.1 million, and the contribution of the common stock of PHSI in connection with the Reorganization of $76.9 million. This is offset by an adjustment of $131.0 million to reflect the approximately 78% controlling interest held by the redeemable limited partners of Premier LP subsequent to the Reorganization and IPO, which is reflected in redeemable limited partners' capital on the unaudited consolidated balance sheets. Immediately following the effective date of the LP Agreement, all of Premier LP's limited partners that approved the Reorganization received Class B common units and capital account balances in Premier LP equal to their percentage interests and capital account balances in Premier LP immediately preceding the Reorganization. Premier used a portion of the net proceeds from the IPO to purchase (i) Class A common units, (ii) Class B common units from PHSI and (iii) Class B common units from the member owners, resulting in a reduction in the noncontrolling interest attributable to the limited partners from 99% to approximately 78%. | ||||
Reflects the increase in redeemable limited partners' capital of $2,575.5 million to record the balance at the redemption amount, which represents the greater of the book value or redemption amount, at the date of the Reorganization. This results in an offsetting decrease in retained earnings of $50.1 million, followed by an offsetting decrease in additional paid-in-capital of $173.7 million and with a final offsetting increase in accumulated deficit of $2,351.7 million. | |||||
-5 | Reflects (i) the exchange of the existing PHSI shares of common stock, common stock subscribed and related subscriptions receivable for Class B common units, (ii) the issuance of Class B common stock in connection with the Reorganization and (iii) the issuance of Class A common stock in connection with the IPO. | ||||
-6 | Reflects the impact of the adjustments in notes (1), (2), (3), (4) and (5) above to additional paid-in capital: | ||||
• | an increase of $96.9 million due to an increase in deferred tax assets described in note (3) of $283.0 million offset by an increase in payables pursuant to the tax receivable agreement of $186.1 million; | ||||
• | an increase of $821.7 million from the net proceeds from the IPO less the par value of the shares of Class A common stock sold in the IPO of $0.3 million and less prepaid offering expenses of $5.9 million; | ||||
• | a decrease of $767.5 million to reflect the difference between the consideration paid to acquire the Class A common units and B common units and the adjustment to the carrying value of the noncontrolling interest described in note (4) above; and | ||||
• | a decrease in the remaining balance of additional paid-in-capital related to the increase in redeemable limited partners' capital to its redemption value, as described in note (4) above. | ||||
-7 | Reflects the decrease in retained earnings and increase in accumulated deficit related to the increase in redeemable limited partners' capital to its redemption value, as described in note (4) above. | ||||
In addition, following the completion of the Reorganization and IPO: | |||||
• | Premier LP became contractually required under the GPO participation agreements to pay each member owner revenue share from Premier LP equal to 30% of all gross administrative fees collected by Premier LP based upon purchasing by such member owner's member facilities through Premier LP's GPO supplier contracts. Historically, Premier LP did not generally have a contractual requirement to pay revenue share to member owners participating in its GPO programs, but paid semi-annual distributions of partnership income. | ||||
• | Premier records redeemable limited partners' capital at redemption value, which represents the greater of the book value or redemption amount per the LP Agreement, at the reporting date. | ||||
• | Premier became subject to additional U.S. federal, state and local income taxes with respect to its additional allocable share of any taxable income of Premier LP. | ||||
• | Noncontrolling interest in Premier LP decreased from 99% to approximately 78%. |
SIGNIFICANT_ACCOUNTING_POLICIE
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | SIGNIFICANT ACCOUNTING POLICIES |
There have been no material changes to the Company's significant accounting policies as described in the 2014 Annual Report; however, given the Company's recent acquisition activity during the nine months ended March 31, 2015, the Company's significant accounting policy related to business combinations has been included below. | |
Business Combinations | |
The Company accounts for acquisitions using the acquisition method. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration are recognized at their fair value on the acquisition date. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Acquisition-related costs are recorded as expenses in the consolidated financial statements. | |
Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use the income method. This method starts with a forecast of all of the expected future net cash flows for each asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income method or other methods include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset's life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. | |
Recently Issued Accounting Standards | |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new standard requires revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new standard allows for either full retrospective or modified retrospective adoption. The new standard will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. | |
In April 2015, the FASB proposed a one-year deferral of the effective date for the new standard. If approved, the new standard would be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption as of the original effective date for public entities would be permitted. Under the proposal, the new standard would be effective for the Company for the fiscal year ending June 30, 2019. | |
The Company is currently evaluating the transition method that will be elected as well as the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. The Company will also evaluate the effect of any adopted deferral on its plans for adopting the new standard. | |
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which effectively eliminates the presumption that a general partner should consolidate a limited partnership, modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, and affects the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). In some cases, consolidation conclusions will change under the new guidance and, in other cases, a reporting entity will need to provide additional disclosures if an entity that currently is not considered a VIE is considered a VIE under the new guidance. The update will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and early adoption is permitted. The update allows for either full retrospective or modified retrospective adoption. The Company is currently evaluating the impact of the adoption of the update on its consolidated financial statements and related disclosures. The update will be effective for the Company for the fiscal year ending June 30, 2017. |
SEGMENTS
SEGMENTS | 9 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||
Segments | SEGMENTS | |||||||||||||
The Company delivers its solutions and manages its business through two reportable business segments, the supply chain services segment and the performance services segment. The supply chain services segment includes the Company's GPO, a specialty pharmacy and direct sourcing activities. The performance services segment includes the Company's informatics, collaboratives, advisory services and insurance management services businesses. | ||||||||||||||
The Company uses Segment Adjusted EBITDA (as defined herein) as its primary measure of profit or loss to assess segment performance and to determine the allocation of resources. The Company also uses Segment Adjusted EBITDA to facilitate the comparison of the segment operating performance on a consistent basis from period to period. The Company defines Segment Adjusted EBITDA as the segment's net revenue less operating expenses directly attributable to the segment excluding depreciation and amortization, amortization of purchased intangible assets, merger and acquisition related expenses and non-recurring or non-cash items, and including equity in net income of unconsolidated affiliates. Non-recurring items are expenses that have not been incurred within the prior two years and are not expected to recur within the next two years. Operating expenses directly attributable to the segment include expenses associated with sales and marketing, general and administrative and product development activities specific to the operation of each segment. General and administrative corporate expenses that are not specific to a particular segment are not included in the calculation of Segment Adjusted EBITDA. | ||||||||||||||
All reportable segment revenues are presented net of inter-segment eliminations and represent revenues from external clients. | ||||||||||||||
The following tables present selected financial data for each of the Company's reportable segments (in thousands): | ||||||||||||||
Net Revenue | Segment Adjusted EBITDA | Depreciation & Amortization Expense | Capital Expenditures | |||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 117,959 | ||||||||||||
Other services and support | 740 | |||||||||||||
Services | 118,699 | |||||||||||||
Products | 73,438 | |||||||||||||
Total Supply Chain Services | 192,137 | $ | 101,600 | $ | 525 | $ | 478 | |||||||
Performance Services | 69,586 | 26,166 | 12,238 | 15,812 | ||||||||||
Corporate | — | (24,021 | ) | 1,328 | 2,363 | |||||||||
Total | $ | 261,723 | $ | 103,745 | $ | 14,091 | $ | 18,653 | ||||||
Three Months Ended March 31, 2014 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 108,087 | ||||||||||||
Other services and support | 197 | |||||||||||||
Services | 108,284 | |||||||||||||
Products | 58,692 | |||||||||||||
Total Supply Chain Services | 166,976 | $ | 91,477 | $ | 380 | $ | 1,098 | |||||||
Performance Services | 58,622 | 20,307 | 8,622 | 12,267 | ||||||||||
Corporate | — | (20,479 | ) | 1,196 | 458 | |||||||||
Total | $ | 225,598 | $ | 91,305 | $ | 10,198 | $ | 13,823 | ||||||
Net Revenue | Segment Adjusted EBITDA | Depreciation & Amortization Expense | Capital Expenditures | |||||||||||
Nine Months Ended March 31, 2015 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 337,157 | ||||||||||||
Other services and support | 1,192 | |||||||||||||
Services | 338,349 | |||||||||||||
Products | 203,698 | |||||||||||||
Total Supply Chain Services | 542,047 | $ | 290,210 | $ | 1,441 | $ | 1,342 | |||||||
Performance Services | 198,429 | 67,717 | 34,451 | 45,143 | ||||||||||
Corporate | — | (64,856 | ) | 3,813 | 4,579 | |||||||||
Total | $ | 740,476 | $ | 293,071 | $ | 39,705 | $ | 51,064 | ||||||
Nine Months Ended March 31, 2014 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 353,793 | ||||||||||||
Other services and support | 504 | |||||||||||||
Services | 354,297 | |||||||||||||
Products | 151,022 | |||||||||||||
Total Supply Chain Services | 505,319 | $ | 302,076 | $ | 1,087 | $ | 1,901 | |||||||
Performance Services | 169,764 | 54,367 | 24,414 | 37,344 | ||||||||||
Corporate | — | (57,399 | ) | 3,609 | 597 | |||||||||
Total | $ | 675,083 | $ | 299,044 | $ | 29,110 | $ | 39,842 | ||||||
Total Assets | ||||||||||||||
March 31, 2015 | ||||||||||||||
Supply Chain Services | $ | 415,497 | ||||||||||||
Performance Services | 460,097 | |||||||||||||
Corporate | 612,939 | |||||||||||||
Total | $ | 1,488,533 | ||||||||||||
June 30, 2014 | ||||||||||||||
Supply Chain Services | $ | 373,746 | ||||||||||||
Performance Services | 266,567 | |||||||||||||
Corporate | 606,343 | |||||||||||||
Total | $ | 1,246,656 | ||||||||||||
A reconciliation of Segment Adjusted EBITDA to income before income taxes is as follows (in thousands): | ||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Segment Adjusted EBITDA | $ | 103,745 | $ | 91,305 | $ | 293,071 | $ | 299,044 | ||||||
Depreciation and amortization | (11,538 | ) | (9,396 | ) | (33,107 | ) | (26,952 | ) | ||||||
Amortization of purchased intangible assets | (2,554 | ) | (802 | ) | (6,598 | ) | (2,158 | ) | ||||||
Merger and acquisition related expenses (a) | (2,863 | ) | (984 | ) | (6,408 | ) | (1,303 | ) | ||||||
Strategic and financial restructuring expenses (b) | (2 | ) | (733 | ) | (1,281 | ) | (3,614 | ) | ||||||
Stock-based compensation expense | (7,285 | ) | (6,299 | ) | (21,129 | ) | (13,118 | ) | ||||||
Adjustment to tax receivable agreement liability | (1,073 | ) | — | — | — | |||||||||
Acquisition related adjustment - deferred revenue (c) | (3,563 | ) | — | (9,224 | ) | — | ||||||||
Equity in net income of unconsolidated affiliates (d) | (5,197 | ) | (3,566 | ) | (14,812 | ) | (12,171 | ) | ||||||
Deferred compensation plan expense | (759 | ) | — | 209 | — | |||||||||
Operating income | $ | 68,911 | $ | 69,525 | $ | 200,721 | $ | 239,728 | ||||||
Equity in net income of unconsolidated affiliates (d) | 5,197 | 3,566 | 14,812 | 12,171 | ||||||||||
Interest and investment income, net | 204 | 400 | 517 | 641 | ||||||||||
(Loss) gain on investment | (1,000 | ) | 37,850 | (1,000 | ) | 37,850 | ||||||||
Other income (expense), net | 743 | 52 | (219 | ) | 56 | |||||||||
Income before income taxes | $ | 74,055 | $ | 111,393 | $ | 214,831 | $ | 290,446 | ||||||
(a) | Represents legal, accounting and other expenses related to acquisition activities. | |||||||||||||
(b) | Represents legal, accounting and other expenses directly related to strategic and financial restructuring expenses. | |||||||||||||
(c) | Represents non-cash adjustment to deferred revenue of acquired entities. Business combination accounting rules require us to account for the fair values of software license updates and product support contracts and hardware systems support contracts assumed in connection with our acquisitions. Because these support contracts are typically one year in duration, our GAAP revenues for the one-year period subsequent to our acquisition of a business do not reflect the full amount of support revenues on these assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment to our software license updates and product support revenues is intended to include, and thus reflect, the full amount of such revenues. | |||||||||||||
(d) | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. |
GOODWILL_AND_INTANGIBLE_ASSETS
GOODWILL AND INTANGIBLE ASSETS, NET | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||
Goodwill and Intangible Assets, Net | INTANGIBLE ASSETS, NET | |||||||
Intangible assets, net consist of the following (in thousands): | ||||||||
Weighted Average Useful Life | 31-Mar-15 | 30-Jun-14 | ||||||
Identifiable intangible assets acquired: | ||||||||
Technology | 5.0 years | $ | 45,087 | $ | 20,257 | |||
Member relationships | 8.3 years | 16,380 | 6,830 | |||||
Non-compete agreements | 3.0 years | 80 | 80 | |||||
Trade names | 4.9 years | 6,560 | 3,990 | |||||
5.8 years | 68,107 | 31,157 | ||||||
Accumulated amortization | (26,898 | ) | (20,302 | ) | ||||
Total identifiable intangible assets acquired, net | $ | 41,209 | $ | 10,855 | ||||
The increase in technology, member relationships, and trade names intangible assets was due to acquisitions completed during the nine months ended March 31, 2015. Amortization expense of intangible assets totaled $2.6 million and $0.8 million for the three months ended March 31, 2015 and 2014, respectively, and $6.6 million and $2.2 million for the nine months ended March 31, 2015 and 2014, respectively. |
LINES_OF_CREDIT
LINES OF CREDIT | 9 Months Ended |
Mar. 31, 2015 | |
Line of Credit Facility [Abstract] | |
Lines of Credit | LINES OF CREDIT |
On June 24, 2014, Premier LP, along with its wholly owned subsidiaries, PSCI and PHSI, as Co-Borrowers, Premier GP, and certain domestic subsidiaries of Premier GP, as Guarantors, Wells Fargo Bank, National Association, as Administrative Agent (the “Administrative Agent”), Swing Line Lender and L/C Issuer, other lenders from time to time party thereto, and Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, as Joint Lead Arrangers and Joint Book Managers, entered into an unsecured Credit Agreement, dated as of June 24, 2014 (the “Credit Agreement”). The Credit Agreement has a maturity date of June 24, 2019. | |
The Credit Agreement provides for borrowings of up to $750.0 million with (i) a $25.0 million subfacility for standby letters of credit and (ii) a $75.0 million subfacility for swingline loans. The Credit Agreement also provides that the maximum principal amount of the credit facility may be increased from time to time at the Company's request up to an aggregate additional amount of $250.0 million, subject to the approval of the lenders providing such increase. The Credit Agreement includes an unconditional and irrevocable guaranty of all obligations under the Credit Agreement by Premier GP, certain domestic subsidiaries of Premier GP and future guarantors, if any. Premier is not a guarantor under the Credit Agreement. | |
The Credit Agreement permits the Company to prepay amounts outstanding without premium or penalty provided that Co-Borrowers are required to compensate the lenders for losses and expenses incurred as a result of the prepayment of any Eurodollar Rate Loan, as defined in the Credit Agreement. Committed loans may be in the form of Eurodollar Rate Loans or Base Rate Loans, as defined in the Credit Agreement, at our option. Eurodollar Rate Loans bear interest at the Eurodollar Rate (defined as the London Interbank Offer Rate, or LIBOR, plus the Applicable Rate (defined as a margin based on the Consolidated Total Leverage Ratio (as defined in the credit facility)). Base Rate Loans bear interest at the Base Rate (defined as the highest of the prime rate announced by the Administrative Agent, the federal funds effective rate plus 0.50% or the one-month LIBOR plus 1.0%) plus the Applicable Rate. The Applicable Rate ranges from 1.125% to 1.75% for Eurodollar Rate Loans and 0.125% to 0.750% for Base Rate Loans. At March 31, 2015, the interest rate for three-month Eurodollar Rate Loans was 1.396% and the interest rate for Base Rate Loans was 3.375%. The Co-Borrowers are required to pay a commitment fee ranging from 0.125% to 0.250% per annum on the actual daily unused amount of commitments under the credit facility. At March 31, 2015, the commitment fee was 0.125%. | |
The Credit Agreement contains customary representations and warranties as well as customary affirmative and negative covenants, including, among others, limitations on liens, indebtedness, fundamental changes, dispositions, restricted payments and investments. Under the terms of the Credit Agreement, Premier GP is not permitted to allow its Consolidated Total Leverage Ratio (as defined in the credit facility) to exceed 3.00 to 1.00 for any period of four consecutive quarters. In addition, Premier GP must maintain a minimum Consolidated Interest Coverage Ratio (as defined in the credit facility) of 3.00 to 1.00 at the end of every quarter. The Company was in compliance with all such covenants at March 31, 2015. The Credit Agreement also contains customary events of default including, among others, payment defaults, breaches of representations and warranties, covenant defaults, cross-defaults of any indebtedness or guarantees in excess of $30.0 million, bankruptcy and other insolvency events, judgment defaults in excess of $30.0 million, and the occurrence of a change of control (as defined in the Credit Agreement). If any event of default occurs and is continuing, the Administrative Agent under the Credit Agreement may, with the consent, or shall, at the request, of the required lenders, terminate the commitments and declare all of the amounts owed under the Credit Agreement to be immediately due and payable. | |
Proceeds from borrowings under the Credit Agreement may generally be used to finance ongoing working capital requirements, including permitted acquisitions and other general corporate purposes. At March 31, 2015 and June 30, 2014, we had no outstanding borrowings under the Credit Agreement. | |
On August 17, 2012, SVS LLC d/b/a S2S Global ("S2S Global"), a direct sourcing business which the Company consolidates and of which at that time the Company owned 60% of the outstanding shares of common stock, obtained a revolving line of credit with a one-year term for up to $10.0 million at an interest rate which is generally the lower of LIBOR plus 1.25% or the Prime Rate plus 0.25%. On August 2, 2013, S2S Global renewed and amended its revolving line of credit to include a $15.0 million credit limit and a $5.0 million accordion feature. On January 30, 2014, S2S Global further amended its revolving line of credit to increase the credit limit to $20.0 million. On November 18, 2014, S2S Global further amended its revolving line of credit to extend the maturity date to February 16, 2015. | |
On February 2, 2015, the Company purchased the remaining 40% of the outstanding shares of common stock of S2S Global. In connection with the purchase, the Company repaid the $14.2 million balance outstanding under the S2S Global line of credit and terminated the S2S Global line of credit prior to its maturity date. | |
At June 30, 2014, S2S Global had $13.7 million outstanding on the revolving line of credit. The amount due under the S2S Global line of credit for the year ended June 30, 2014 is included within the current portion of notes payable and line of credit in the accompanying consolidated balance sheets. |
NOTES_PAYABLE
NOTES PAYABLE | 9 Months Ended | |||
Mar. 31, 2015 | ||||
Debt Disclosure [Abstract] | ||||
Notes Payable | NOTES PAYABLE | |||
At March 31, 2015 and June 30, 2014, the Company had $20.4 million and $20.0 million, respectively, in notes payable consisting primarily of non-interest bearing notes payable outstanding to departed member owners, of which $4.4 million and $4.0 million, respectively, are included in current portion of notes payable and line of credit and $16.0 million and $15.8 million, respectively, are included in notes payable, less current portion, in the accompanying consolidated balance sheets at March 31, 2015 and June 30, 2014. | ||||
Principal payments of notes payable are as follows (in thousands): | ||||
Twelve Months Ending March 31, | ||||
2015 | $ | 4,393 | ||
2016 | 4,609 | |||
2017 | 8,122 | |||
2018 | 1,194 | |||
2019 | 2,046 | |||
Thereafter | — | |||
Total principal payments | $ | 20,364 | ||
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Fair Value Measurements | FAIR VALUE MEASUREMENTS | ||||||||||||
The Company measures the following assets at fair value on a recurring basis (in thousands): | |||||||||||||
Description | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
March 31, 2015 | |||||||||||||
Cash equivalents | $ | 30,804 | $ | 30,804 | $ | — | $ | — | |||||
Commercial paper | 7,140 | — | 7,140 | — | |||||||||
U.S. government debt securities | 91,454 | — | 91,454 | — | |||||||||
Corporate debt securities | 185,262 | — | 185,262 | — | |||||||||
Asset-backed securities | 63,840 | — | 63,840 | — | |||||||||
Deferred compensation plan assets | 38,604 | 38,604 | — | — | |||||||||
Total assets | $ | 417,104 | $ | 69,408 | $ | 347,696 | $ | — | |||||
June 30, 2014 | |||||||||||||
Cash equivalents | $ | 64,207 | $ | 64,207 | $ | — | $ | — | |||||
Commercial paper | 33,572 | — | 33,572 | — | |||||||||
U.S. government debt securities | 116,744 | — | 116,744 | — | |||||||||
Corporate debt securities | 166,452 | — | 166,452 | — | |||||||||
Asset-backed securities | 91,851 | 91,851 | — | ||||||||||
Deferred compensation plan assets | 33,256 | 33,256 | — | — | |||||||||
Total assets | $ | 506,082 | $ | 97,463 | $ | 408,619 | $ | — | |||||
Cash equivalents are included in cash and cash equivalents; corporate debt securities are included in marketable securities; and deferred compensation plan assets are included in prepaid expenses and other current assets ($2.6 million and $0.3 million at March 31, 2015 and June 30, 2014, respectively) and other assets ($36.0 million and $32.9 million at March 31, 2015 and June 30, 2014, respectively) in the accompanying consolidated balance sheets. The fair value of the Company's debt securities, classified as Level 2, are valued using quoted prices for similar securities in active markets or quoted prices for identical or similar securities in markets that are not active. | |||||||||||||
The fair value of cash, accounts receivable, accounts payable, accrued liabilities and lines of credit approximate carrying value because of the short‑term nature of these financial instruments. The fair value of non-interest bearing notes payable, classified as Level 2, is less than their carrying value (see Note 7 for more information) by approximately $0.6 million and $0.7 million at March 31, 2015 and June 30, 2014, respectively, based on an assumed market interest rate of 1.5% at both March 31, 2015 and June 30, 2014. |
MARKETABLE_SECURITIES
MARKETABLE SECURITIES | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||
Marketable Securities | MARKETABLE SECURITIES | ||||||||||||
The Company invests its excess cash in commercial paper, U.S. government debt securities, corporate debt securities and other securities with maturities generally ranging from three months to five years from the date of purchase. At March 31, 2015, the Company was invested in securities with maturities ranging from three months to almost three years. The Company uses the specific-identification method to determine the cost of securities sold. Marketable securities, classified as available-for-sale, consist of the following (in thousands): | |||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | ||||||||||
March 31, 2015 | |||||||||||||
Commercial paper | $ | 7,134 | $ | 6 | $ | — | $ | 7,140 | |||||
U.S. government debt securities | 91,413 | 51 | (10 | ) | 91,454 | ||||||||
Corporate debt securities | 185,246 | 62 | (46 | ) | 185,262 | ||||||||
Asset-backed securities | 63,840 | 17 | (17 | ) | 63,840 | ||||||||
$ | 347,633 | $ | 136 | $ | (73 | ) | $ | 347,696 | |||||
June 30, 2014 | |||||||||||||
Commercial paper | $ | 33,561 | $ | 12 | $ | (1 | ) | $ | 33,572 | ||||
U.S. government debt securities | 116,620 | 124 | — | 116,744 | |||||||||
Corporate debt securities | 166,424 | 69 | (41 | ) | 166,452 | ||||||||
Asset-backed securities | 91,824 | 34 | (7 | ) | 91,851 | ||||||||
$ | 408,429 | $ | 239 | $ | (49 | ) | $ | 408,619 | |||||
U.S. government debt securities, corporate debt securities and asset-backed securities are included in the current portion of marketable securities and the long-term portion of marketable securities in the accompanying consolidated balance sheets. | |||||||||||||
At March 31, 2015, marketable securities consist of the following maturities (in thousands): | |||||||||||||
Cost | Fair Market Value | ||||||||||||
Due in one year or less | $ | 192,726 | $ | 192,752 | |||||||||
Due after one year through five years | 154,907 | 154,944 | |||||||||||
347,633 | 347,696 | ||||||||||||
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Mar. 31, 2015 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | INVESTMENTS |
Innovatix, LLC ("Innovatix") is a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade. The Company held 50% of the membership units in Innovatix at March 31, 2015 and June 30, 2014. The Company accounts for its investment in Innovatix using the equity method of accounting. The carrying value of the Company's investment in Innovatix was $7.9 million and $6.9 million at March 31, 2015 and June 30, 2014, respectively, and is included in other assets in the accompanying consolidated balance sheets. The Company's 50% ownership share of Innovatix's net income included in equity in net income of unconsolidated affiliates in the accompanying consolidated statements of income is $5.2 million and $3.6 million for the three months ended March 31, 2015 and 2014, respectively, and $14.8 million and $12.2 million for the nine months ended March 31, 2015 and 2014, respectively, all of which is included in the supply chain services segment. |
INCOME_TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES |
The Company's income tax expense is attributable to the activities of the Company, PHSI and PSCI (subsidiaries of Premier LP), which are all subchapter C corporations. Under the provisions of federal and state statutes, Premier LP is not subject to federal and state income taxes. For federal and state income tax purposes, income realized by Premier LP is taxable to its partners. The Company, PHSI and PSCI are subject to U.S. federal and state income taxes. | |
For the three months ended March 31, 2015 and 2014, the Company recorded tax expense on income before taxes of $2.0 million and $9.4 million, respectively, which equates to an effective tax rate of 2.7% and 8.5%, respectively. For the nine months ended March 31, 2015 and 2014, the Company recorded tax expense on income before taxes of $12.1 million and $24.5 million, respectively, which equates to an effective tax rate of 5.6% and 8.4%, respectively. For the three and nine months ended March 31, 2015 and 2014, the Company's effective income tax rate differs from income taxes recorded at the statutory rate primarily due to partnership income not subject to federal income taxes, state and local taxes and nondeductible expenses. The effective tax rate has decreased from the prior year due to lower taxable income and federal tax credits claimed in the current year related to the reinstatement of the federal research tax credit. | |
The Company has deferred tax assets of $361.6 million as of March 31, 2015, an increase of $65.0 million from $296.6 million as of June 30, 2014, which is primarily attributable to an additional deferred tax benefit of $70.6 million recorded in connection with basis differences in assets related to the quarterly exchange of member owner units pursuant to the Exchange Agreement that occurred through March 31, 2015, offset by deferred tax liabilities of $5.3 million recorded in connection with the acquisitions of Aperek and TheraDoc, with the remaining $0.3 million deferred tax benefit recorded in the ordinary course of business. | |
The Company has tax receivable agreement liabilities of $244.5 million as of March 31, 2015, representing 85% of the tax savings the Company expects to receive in connection with the Section 754 election, an increase of $52.2 million from the $192.3 million as of June 30, 2014. The Company recorded $53.8 million in tax receivable agreement liabilities due to the additional tax savings to be generated and paid out to the member owners pursuant to the tax receivable agreements in connection with the quarterly exchanges that occurred during the nine months ended March 31, 2015. During the nine months ended March 31, 2015, the Company recorded a $1.6 million reduction in the tax receivable agreement liabilities in connection with the departed member owners of Premier LP, which resulted in a $1.6 million increase in additional paid-in capital. |
REDEEMABLE_LIMITED_PARTNERS_CA
REDEEMABLE LIMITED PARTNERS' CAPITAL | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Temporary Equity Disclosure [Abstract] | |||||||||||||
Redeemable Limited Partners' Capital | REDEEMABLE LIMITED PARTNERS' CAPITAL | ||||||||||||
Prior to the Reorganization and IPO at June 30, 2013, redeemable limited partners' capital represented the limited partners' 99% ownership of Premier LP. Pursuant to the terms of the historical limited partnership agreement, Premier LP was required to repurchase a limited partner's interest in Premier LP upon the sale of such limited partner's shares of PHSI common stock, such limited partners' withdrawal from Premier LP or such limited partner's failure to comply with the applicable purchase commitments under the existing limited partnership agreement of Premier LP. As a result, at June 30, 2013, the redeemable limited partners' capital was classified as temporary equity in the mezzanine section of the consolidated balance sheets since (i) the withdrawal is at the option of each limited partner and (ii) the conditions of the repurchase are not solely within the Company's control. | |||||||||||||
Upon the consummation of the Reorganization and IPO, each limited partner's shares of PHSI were contributed for Class B common units of Premier LP. Commencing on October 31, 2014, and during each year thereafter, each limited partner has the cumulative right to exchange up to one-seventh of its initial allocation of Class B common units for shares of Class A common stock, cash or a combination of both, the form of consideration to be at the discretion of the Company's independent audit committee of the board of directors. | |||||||||||||
Redeemable limited partners' capital represents the member owners' 74% ownership of Premier LP at March 31, 2015. The limited partners hold the majority of the votes of the board of directors and any redemption or transfer or choice of consideration relating to the limited partners' exchange right cannot be assumed to be within the control of the Company. As such, classification outside of permanent equity is still required and the redeemable limited partners' capital is classified as temporary equity in the mezzanine section of the consolidated balance sheet at March 31, 2015. The Company records redeemable limited partners' capital at the greater of the book value or redemption amount. The Company calculates the redemption amount as the fair value of all Class B common units, as if immediately exchangeable into Class A common shares. For the nine months ended March 31, 2015, the Company recorded an adjustment to fair value for the redemption amount to redeemable limited partners' capital of $812.0 million. | |||||||||||||
During the nine months ended March 31, 2015, the Company recorded a reduction of $164.7 million to redeemable limited partners' capital to reflect the exchange of 4,685,267 and 257,027 Class B common units and associated shares of Class B common stock by the member owners for a like number of shares of the Company's Class A common stock pursuant to the terms of the Exchange Agreement on October 31, 2014 and February 2, 2015, respectively. | |||||||||||||
The table below shows the changes in the redeemable limited partners' capital classified as temporary equity from June 30, 2014 to March 31, 2015 (in thousands): | |||||||||||||
Receivables From Limited Partners | Redeemable Limited Partners' Capital | Accumulated Other Comprehensive Income (Loss) | Total Redeemable Limited Partners' Capital | ||||||||||
June 30, 2014 | $ | (18,139 | ) | $ | 3,262,666 | $ | 147 | $ | 3,244,674 | ||||
Distributions applied to receivables from limited partners | 4,884 | — | — | 4,884 | |||||||||
Redemption of limited partners | — | (2,046 | ) | — | (2,046 | ) | |||||||
Net income attributable to Premier LP | — | 170,135 | — | 170,135 | |||||||||
Distributions to limited partners | — | (69,841 | ) | — | (69,841 | ) | |||||||
Net unrealized loss on marketable securities | — | — | (95 | ) | (95 | ) | |||||||
Exchange of Class B common units for Class A common stock by member owners | — | (164,655 | ) | — | (164,655 | ) | |||||||
Adjustment to redemption amount | — | 811,969 | — | 811,969 | |||||||||
31-Mar-15 | $ | (13,255 | ) | $ | 4,008,228 | $ | 52 | $ | 3,995,025 | ||||
Receivables from limited partners represent amounts due from limited partners for their required capital in Premier LP. These receivables are either interest bearing notes issued to new limited partners or non-interest bearing loans (contribution loans) provided to existing limited partners and are reflected as a reduction in redeemable limited partners' capital (which includes the capital funded by such receivables) because amounts due from limited partners for capital are not reflected as redeemable limited partnership capital until paid. No interest bearing notes receivable were executed by limited partners of Premier LP during the nine months ended March 31, 2015. | |||||||||||||
During the nine months ended March 31, 2015, four limited partners withdrew from Premier LP. In connection with such withdrawals, the Company issued a total of $2.0 million in five-year, unsecured, non-interest bearing term promissory notes. Partnership interest obligations to former limited partners are reflected in notes payable in the accompanying consolidated balance sheets. | |||||||||||||
Prior to the consummation of the Reorganization and IPO, Premier LP maintained a discretionary distribution policy in which semi-annual cash distributions were made each February for amounts attributable to the recently completed six months ended December 31 and each September for amounts attributable to the recently completed six months ended June 30. As provided in the then existing limited partnership agreement, the amount of actual cash distributed may have been reduced by the amount of such distributions used by limited partners to offset contribution loans or other amounts payable to the Company. | |||||||||||||
During the three months ended September 30, 2013, Premier LP distributed $214.5 million to its limited partners, of which $2.8 million was retained to reduce limited partner notes payable and related interest obligations and an additional $3.4 million was retained to reduce other amounts payable by limited partners to the Company, resulting in a cash distribution of $208.3 million. During the three months ended December 31, 2013, Premier LP distributed cash of $72.6 million to its limited partners attributable to income generated through September 30, 2013. | |||||||||||||
Upon the consummation of the Reorganization and IPO, Premier LP amended its distribution policy in which cash distributions are required, as long as taxable income is generated and cash is available to distribute, on a quarterly basis prior to the 60th day after the end of each calendar quarter instead of a semi-annual basis. As provided in the limited partnership agreement, the amount of actual cash distributed may be reduced by the amount of such distributions used by limited partners to offset contribution loans or other amounts payable to the Company. | |||||||||||||
Premier LP made a quarterly distribution on August 28, 2014 to its limited partners of $22.4 million, which is equal to the total taxable income for Premier LP for the three months ended June 30, 2014 multiplied by the Company's standalone effective combined federal, state and local income tax rate. At June 30, 2014, the quarterly distribution payable to the limited partners of $22.4 million is reflected in limited partners' distribution payable in the accompanying consolidated balance sheets. | |||||||||||||
Premier LP made a quarterly distribution on November 26, 2014 to its limited partners of $22.7 million, which is equal to Premier LP's total taxable income for the three months ended September 30, 2014 multiplied by the Company's standalone effective combined federal, state and local income tax rate. | |||||||||||||
Premier LP made a quarterly distribution on February 26, 2015 to its limited partners of $23.7 million, which is equal to Premier LP's total taxable income for the three months ended December 31, 2014 multiplied by the Company's standalone effective combined federal, state and local income tax rate. | |||||||||||||
Premier LP will make a quarterly distribution, payable before May 30, 2015 (or prior to the 60th day after the end of the calendar quarter ended March 31, 2015), equal to Premier LP's total taxable income for the three months ended March 31, 2015 multiplied by the Company's standalone effective combined federal, state and local income tax rate. The distribution payable attributable to limited partners of approximately $23.4 million at March 31, 2015 is reflected in limited partners' distribution payable in the accompanying consolidated balance sheets. |
STOCKHOLDERS_DEFICIT
STOCKHOLDERS' DEFICIT | 9 Months Ended |
Mar. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Deficit | STOCKHOLDERS' DEFICIT |
As of March 31, 2015, there were 37,376,985 shares of the Company's Class A common stock, par value $0.01 per share, and 106,658,535 shares of the Company's Class B common stock, par value $0.000001 per share, outstanding. | |
Holders of Class A common stock are entitled to (i) one vote for each share held of record on all matters submitted to a vote of stockholders, (ii) receive dividends, when and if declared by the board of directors out of funds legally available therefore, subject to any statutory or contractual restrictions on the payment of dividends and to any restrictions on the payment of dividends imposed by the terms of any outstanding preferred stock or any class of series of stock having a preference over or the right to participate with the Class A common stock with respect to the payment of dividends or other distributions and (iii) receive pro rata, based on the number of shares of Class A common stock held, the remaining assets available for distribution upon the dissolution or liquidation of Premier, after payment in full of all amounts required to be paid to creditors and to the holders of preferred stock having liquidation preferences, if any. | |
Holders of Class B common stock are (i) entitled to one vote for each share held of record on all matters submitted to a vote of stockholders and (ii) not entitled to receive dividends or to receive a distribution upon the dissolution or a liquidation of Premier, other than dividends payable in shares of Premier's common stock. Pursuant to the Voting Trust Agreement, the trustee will vote all of the Class B common stock as a block in the manner determined by the plurality of the votes received by the trustee from the member owners for the election of directors to serve on our board of directors, and by a majority of the votes received by the trustee from the member owners for all other matters. Class B common stock will not be listed on any stock exchange and, except in connection with any permitted sale or transfer of Class B common units, cannot be sold or transferred. |
EARNINGS_LOSS_PER_SHARE
EARNINGS (LOSS) PER SHARE | 9 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||
Earnings Per Share | EARNINGS (LOSS) PER SHARE | |||||||||||||
Basic earnings (loss) per share of Premier is computed by dividing net income (loss) attributable to shareholders after adjustment of redeemable limited partners' capital to redemption amount by the weighted average number of shares of common stock outstanding for the period. Net income (loss) attributable to shareholders after adjustment of redeemable limited partners' capital to redemption amount reflects the adjustment to net income attributable to shareholders for the adjustment recorded in the period to reflect redeemable limited partners' capital at the redemption amount, as a result of the exchange benefit obtained by limited partners through the ownership of Class B common units. Except when the effect would be anti-dilutive, the diluted earnings per share calculation, which is calculated using the treasury stock method, includes the impact of non-vested restricted stock units, shares of non-vested performance share awards and shares that could be issued under the outstanding stock options. | ||||||||||||||
The following table provides a reconciliation of common shares used for basic earnings (loss) per share and diluted earnings (loss) per share (in thousands, except per share amounts): | ||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||
2015 (c) | 2014 (c) | 2015 (c) | 2014 (d) | |||||||||||
Numerator for Basic and Diluted Earnings (Loss) Per Share: | ||||||||||||||
Net (loss) income attributable to shareholders after adjustment of redeemable limited partners' capital to redemption amount | $ | (374,853 | ) | $ | 509,239 | $ | (781,216 | ) | $ | (3,204,645 | ) | |||
Denominator for basic earnings (loss) per share weighted average shares (a) | 37,316 | 32,375 | 35,066 | 23,394 | ||||||||||
Effect of dilutive securities: (b) | ||||||||||||||
Stock options | — | 181 | — | — | ||||||||||
Restricted stock units | — | — | — | — | ||||||||||
Performance share awards | — | — | — | — | ||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | ||||||||||||||
Weighted average shares and assumed conversions | 37,316 | 32,556 | 35,066 | 23,394 | ||||||||||
Basic (loss) earnings per share | $ | (10.05 | ) | $ | 15.73 | $ | (22.28 | ) | $ | (136.99 | ) | |||
Diluted (loss) earnings per share | $ | (10.05 | ) | $ | 15.64 | $ | (22.28 | ) | $ | (136.99 | ) | |||
(a) | Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock units and non-vested performance share awards for the three and nine months ended March 31, 2015 and 2014. | |||||||||||||
(b) | For the three and nine months ended March 31, 2015, the effect of 151, 380 and 617 stock options, restricted stock units, and performance share awards, respectively, and 4, 319, and 522 stock options, restricted stock units, and performance share awards, respectively, were excluded from the diluted weighted average shares outstanding due to the net loss sustained for the respective periods. Additionally, the effect of 100 restricted stock units for the nine months ended March 31, 2014 were also excluded from the diluted weighted average shares outstanding due to the net loss sustained for the period. Further, the 106,659 Class B common units exchangeable for Class A common shares was excluded from the dilutive weighted average shares outstanding because inclusion thereof would have been anti-dilutive for the periods presented. | |||||||||||||
(c) | The weighted average shares calculation is based on the Premier, Inc. common shares outstanding for the three months ended March 31, 2015 and 2014 and the nine months ended March 31, 2015. | |||||||||||||
(d) | The weighted average shares calculation is based on a combination of the PHSI historical common shares outstanding for the three months ended September 30, 2013 and the Premier, Inc. common shares outstanding for the period from September 25, 2013 to March 31, 2014. | |||||||||||||
As a result of the consummation of the Reorganization and IPO, effective October 1, 2013, income (loss) per share is not comparable for all periods presented. In addition, income (loss) per share for the three months ended March 31, 2015 may not be indicative of prospective earnings per share information. | ||||||||||||||
On October 31, 2014, pursuant to the terms of the Exchange Agreement discussed in Note 2 - Initial Public Offering and Reorganization, the Company issued 4,685,267 shares of Class A common stock to member owners in exchange for a like number of Class B common units in Premier LP. Further, in connection with the exchange of Class B common units by member owners, 4,685,267 shares of the Company's Class B common stock were surrendered by member owners and retired by the Company. As of November 1, 2014, there were 37,075,734 shares of Class A common stock of the Company outstanding and 107,181,272 shares of Class B common stock of the Company outstanding. | ||||||||||||||
On February 2, 2015, in connection with the January 31, 2015 quarterly exchange, pursuant to the terms of the Exchange Agreement, the Company issued 257,027 shares of Class A common stock to member owners in exchange for a like number of Class B common units of Premier LP. Further, in connection with the exchange of Class B common units by member owners, 257,027 shares of the Company’s Class B common stock were surrendered by member owners and retired by the Company. As of February 2, 2015, there were 37,353,364 shares of Class A common stock of the Company outstanding and 106,658,535 shares of Class B common stock of the Company outstanding. | ||||||||||||||
On April 30, 2015, pursuant to the terms of the Exchange Agreement, the Company issued 275,983 shares of Class A common stock to member owners in exchange for a like number of Class B common units of Premier LP, pursuant to the terms of the Exchange Agreement. Further, in connection with the exchange of Class B common units by member owners, 275,983 shares of the Company's Class B common stock were surrendered by member owners and retired by the Company. Upon completion of the April 30, 2015 exchange, there were 37,662,059 shares of Class A common stock of the Company outstanding and 106,382,552 shares of Class B common stock of the Company outstanding. |
STOCKBASED_COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended | |||||
Mar. 31, 2015 | ||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Stock-based Compensation | STOCK-BASED COMPENSATION | |||||
Stock-based compensation expense is recognized over the requisite service period, which generally equals the stated vesting period. Pre-tax stock-based compensation expense was $7.3 million and $21.1 million, respectively, for the three and nine months ended March 31, 2015, with a resulting deferred tax benefit of $2.8 million and $8.0 million, respectively, calculated at a rate of 38%, which represents the expected effective income tax rate at the time of the compensation expense deduction and differs from the Company's current effective income tax rate due to enacted state income tax rate changes. Pre-tax stock-based compensation expense was $6.3 million and $13.1 million, respectively, for the three and nine months ended March 31, 2014, with a resulting deferred tax benefit of $2.4 million and $5.0 million, respectively. | ||||||
At March 31, 2015, there was $45.6 million of unrecognized stock-based compensation expense related to non-vested awards that will be amortized over 1.68 years. | ||||||
Premier 2013 Equity Incentive Plan | ||||||
The Premier 2013 Equity Incentive Plan (the "2013 Equity Incentive Plan") provides for grants of up to 11,260,783 shares of Class A common stock, all of which are eligible to be issued as non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units or performance awards. As of March 31, 2015, there were 6,705,954 shares available for grant under the 2013 Equity Incentive Plan. | ||||||
Restricted Stock Units. Restricted stock unit awards issued and outstanding generally vest over a three-year period. The following table includes information related to restricted stock unit awards for the nine months ended March 31, 2015: | ||||||
Number of Shares | Weighted Average Fair Value at Grant Date | |||||
Outstanding at June 30, 2014 | 717,304 | $ | 27.29 | |||
Granted | 158,794 | $ | 31.8 | |||
Vested | (22,426 | ) | $ | 28.17 | ||
Forfeited | (27,461 | ) | $ | 27.61 | ||
Outstanding at March 31, 2015 | 826,211 | $ | 28.12 | |||
Performance Share Awards. Performance share awards issued and outstanding generally vest over three years if performance targets are met. The following table includes information related to performance share awards for the nine months ended March 31, 2015: | ||||||
Number of Shares | Weighted Average Fair Value at Grant Date | |||||
Outstanding at June 30, 2014 | 827,174 | $ | 27 | |||
Granted | 274,863 | $ | 31.67 | |||
Vested | — | $ | — | |||
Forfeited | (10,595 | ) | $ | 28.21 | ||
Outstanding at March 31, 2015 | 1,091,442 | $ | 28.17 | |||
Stock Options. Stock options have a term of 10 years from the date of grant; however, vested stock options will expire either after 12 months of an employee's termination with Premier or immediately upon an employee's termination with Premier, depending on the termination circumstances. Stock options generally vest in three equal annual installments over three years. The following table includes information related to stock options for the nine months ended March 31, 2015: | ||||||
Number of Options | Weighted Average Exercise Price | |||||
Outstanding at June 30, 2014 | 2,047,484 | $ | 27 | |||
Granted | 649,556 | $ | 31.68 | |||
Exercised | (39,835 | ) | $ | 27 | ||
Forfeited | (17,013 | ) | $ | 28.72 | ||
Outstanding at March 31, 2015 | 2,640,192 | $ | 28.14 | |||
Outstanding and exercisable at March 31, 2015 | 651,507 | $ | 27 | |||
The Company estimates the fair value of each stock option on the date of grant using a Black-Scholes option-pricing model, applying the following assumptions, and amortizes expense over the option's vesting period using the straight-line attribution approach: | ||||||
For options granted during the nine months ended: | 31-Mar-15 | 31-Mar-14 | ||||
Expected life (1) | 6 years | 6 years | ||||
Expected dividend (2) | — | — | ||||
Expected volatility (3) | 36.20% - 39.50% | 42 | % | |||
Risk-free interest rate (4) | 1.66% - 1.84% | 1.71 | % | |||
Weighted average option grant date fair value | $12.82 - $13.77 | $ | 11.46 | |||
(1) 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 Inc.'s employees. | ||||||
(2) No dividends are expected to be paid over the contractual term of the stock options granted, resulting in the use of a zero expected dividend rate. | ||||||
(3) The expected volatility rate is based on the observed historical volatilities of comparable companies. | ||||||
(4) The risk-free interest rate was interpolated from the five-year and seven-year United States constant maturity market yield as of the date of the grant. |
RELATED_PARTY_TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS |
GYNHA Services, Inc. ("GNYHA") converted from a non‑owner member to a member owner effective January 1, 2013. GNYHA and its member organizations owned approximately 11% of the outstanding partnership interests in Premier LP as of March 31, 2015. Net administrative fees revenue recorded with GNYHA and its member organizations was $14.6 million and $14.2 million for the three months ended March 31, 2015 and 2014, respectively, and $44.2 million and $46.2 million for the nine months ended March 31, 2015 and 2014, respectively. As a result of the Reorganization and IPO, the Company has a contractual requirement under the GPO participation agreement to pay each member owner revenue share from Premier LP equal to 30% of all gross administrative fees collected by Premier LP based upon purchasing by such member owner's facilities through Premier LP's GPO supplier contract. Approximately $6.2 million of revenue share obligations in the accompanying consolidated balance sheets relate to revenue share obligations to GNYHA and its member organizations at March 31, 2015. Of the $23.4 million limited partners' distribution payable in the accompanying consolidated balance sheets as of March 31, 2015, $2.9 million is payable to GNYHA and its member organizations. In addition, $10.7 million and $4.0 million was recorded during the three months ended March 31, 2015 and 2014, respectively, and $23.2 million and $9.7 million was recorded during the nine months ended March 31, 2015 and 2014, respectively, for services and support revenue. The increase in services and support revenue is primarily attributable to the increased participation by GNYHA and its member organizations in the Company's specialty pharmacy program. Receivables from GNYHA, included in due from related party in the accompanying consolidated balance sheets, were $0.3 million and $0.6 million as of March 31, 2015 and June 30, 2014, respectively. | |
The Company's 50% ownership share of Innovatix's net income included in equity in net income of unconsolidated affiliates in the accompanying consolidated statements of income is $5.2 million and $3.6 million for the three months ended March 31, 2015 and 2014, respectively, and $14.8 million and $12.2 million for the nine months ended March 31, 2015 and 2014, respectively. The Company maintains a group purchasing agreement with Innovatix under which Innovatix members are permitted to utilize Premier LP's GPO supplier contracts. Gross administrative fees revenue and a corresponding revenue share recorded under the arrangement were $9.5 million and $8.6 million for the three months ended March 31, 2015 and 2014, respectively, and $27.4 million and $25.3 million for the nine months ended March 31, 2015 and 2014, respectively. At March 31, 2015 and June 30, 2014, the Company had revenue share obligations to Innovatix of $3.0 million and $3.7 million, respectively, in the accompanying consolidated balance sheets. | |
The Company conducts all operational activities for American Excess Insurance Exchange Risk Retention Group ("AEIX"), a reciprocal risk retention group that provides excess hospital, professional, umbrella and general liability insurance to certain hospital and healthcare system members. The Company is reimbursed by AEIX for actual costs, plus an annual incentive management fee not to exceed $500,000 per calendar year. The Company received cost reimbursement of $1.3 million and $3.6 million for the three and nine months ended March 31, 2015 and 2014, respectively, and annual incentive management fees of $0.1 million for the three months ended March 31, 2015 and 2014 and $0.5 million and $0.4 million for the nine months ended March 31, 2015 and 2014, respectively. As of March 31, 2015 and June 30, 2014, $0.4 million and $0.6 million of receivables from AEIX are included in due from related parties in the accompanying consolidated balance sheets. |
BUSINESS_ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Mar. 31, 2015 | |
Business Combinations [Abstract] | |
Business Acquisitions | BUSINESS ACQUISITIONS |
Acquisition of TheraDoc, Inc. | |
On September 1, 2014, the Company completed the acquisition of 100% of the outstanding shares of TheraDoc, Inc. ("TheraDoc") for $117.0 million, subject to potential purchase price adjustments for actual working capital, cash and indebtedness at closing. TheraDoc is a leading provider of clinical surveillance software to healthcare organizations across the country that brings together disparate data from a hospital's source systems and helps alert clinicians to potential risks. The Company utilized available funds on hand to complete the acquisition. Assets acquired and liabilities assumed were recorded at their estimated fair values as of September 1, 2014, with the remaining unallocated purchase price recorded as goodwill. Management's estimates and assumptions are subject to change within the measurement period (not to exceed one year). | |
Acquisition of Aperek, Inc. | |
On August 29, 2014, the Company completed the acquisition of 100% of the outstanding shares of Aperek, Inc. ("Aperek"), (formerly Mediclick), for $48.5 million, subject to potential purchase price adjustments for actual working capital, cash and indebtedness at closing. Aperek is a SaaS-based supply chain solutions company focused on purchasing workflow and analytics. The Company utilized available funds on hand to complete the acquisition. Assets acquired and liabilities assumed were recorded at their estimated fair values as of August 29, 2014, with the remaining unallocated purchase price recorded as goodwill. Management's estimates and assumptions are subject to change within the measurement period (not to exceed one year). | |
Acquisition of Noncontrolling Interest in S2S Global | |
On February 2, 2015, the Company purchased the remaining 40% of the outstanding shares of common stock of S2S Global for approximately $14.5 million. In connection with the purchase, the Company repaid the $14.2 million balance outstanding under the S2S Global line of credit and terminated the S2S Global line of credit prior to its maturity date. The Company utilized available funds on hand to complete the acquisition and pay-off the S2S Global line of credit. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES |
The Company is not currently involved in any significant litigation. However, the Company is periodically involved in litigation, arising in the ordinary course of business or otherwise, which from time to time may include claims relating to commercial, employment, antitrust, intellectual property or other regulatory matters, among others. If current or future government regulations are interpreted or enforced in a manner adverse to the Company or its business, specifically those with respect to antitrust or healthcare laws, the Company may be subject to enforcement actions, penalties and other material limitations which could have a material adverse effect on the Company's business, financial condition and results of operations. |
ORGANIZATION_AND_BASIS_OF_PRES1
ORGANIZATION AND BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation, policy | Basis of Presentation and Consolidation |
The Company, through its wholly owned subsidiary, Premier Services, LLC ("Premier GP"), holds a 26% controlling general partner interest in, and, as a result, consolidates the financial statements of, Premier Healthcare Alliance, L.P. ("Premier LP"). The limited partners' 74% ownership of Premier LP is reflected as redeemable limited partners' capital in the Company's consolidated balance sheets, and their proportionate share of income in Premier LP is reflected within net income attributable to noncontrolling interest in Premier LP in the Company's consolidated statements of income and within comprehensive income attributable to noncontrolling interest in the consolidated statements of comprehensive income. During the nine months ended March 31, 2015, the member owners exchanged approximately 4% of their Class B common units and associated Class B common stock for Class A common stock as part of their quarterly exchange rights under an exchange agreement (the "Exchange Agreement") entered into by the member owners in connection with the Reorganization and IPO. See Note 2 - Initial Public Offering and Reorganization for further information on the Exchange Agreement. As a result, at March 31, 2015, the member owners owned approximately 74% of the Company's combined Class A and Class B common stock (the "common stock") through their ownership of Class B common stock, and the public investors, which may include member owners that have received shares of Class A common stock in connection with previous exchanges, owned approximately 26% of the Company's outstanding common stock. | |
After the completion of a series of transactions following the consummation of the initial public offering ("IPO"), referred to as the "Reorganization" (and, collectively with the IPO, the "Reorganization and IPO"), Premier Healthcare Solutions, Inc. ("PHSI") became a consolidated subsidiary of the Company. PHSI is considered the predecessor of the Company for accounting purposes, and accordingly, PHSI's consolidated financial statements are the Company's historical financial statements, for periods prior to October 1, 2013. The historical consolidated financial statements of PHSI are reflected herein based on PHSI's historical ownership interests of Premier LP and its consolidated subsidiaries. | |
The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The 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, including normal recurring adjustments. | |
Reclassification, policy | The Company has reclassified certain prior period amounts to be consistent with the current period presentation and corrected certain classification differences in both the consolidated statements of cash flows and consolidated statements of income. |
Use of estimates, policy | Use of Estimates in the Preparation of Financial Statements |
The preparation of the Company's consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Estimates are evaluated on an ongoing basis, including allowances for doubtful accounts, useful lives of property and equipment, stock-based compensation, payables under the tax receivable agreement, values of investments not publicly traded, the valuation allowance on deferred tax assets and the fair value of purchased intangible assets and goodwill. These estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. |
SIGNIFICANT_ACCOUNTING_POLICIE1
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2015 | |
Accounting Policies [Abstract] | |
Business combinations policy | Business Combinations |
The Company accounts for acquisitions using the acquisition method. All of the assets acquired, liabilities assumed, contractual contingencies, and contingent consideration are recognized at their fair value on the acquisition date. Any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. Acquisition-related costs are recorded as expenses in the consolidated financial statements. | |
Several valuation methods may be used to determine the fair value of assets acquired and liabilities assumed. For intangible assets, we typically use the income method. This method starts with a forecast of all of the expected future net cash flows for each asset. These cash flows are then adjusted to present value by applying an appropriate discount rate that reflects the risk factors associated with the cash flow streams. Some of the more significant estimates and assumptions inherent in the income method or other methods include the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows and the assessment of the asset's life cycle and the competitive trends impacting the asset, including consideration of any technical, legal, regulatory, or economic barriers to entry. Determining the useful life of an intangible asset also requires judgment as different types of intangible assets will have different useful lives and certain assets may even be considered to have indefinite useful lives. | |
New accounting pronouncements policy | Recently Issued Accounting Standards |
In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which will supersede nearly all existing revenue recognition guidance under U.S. GAAP. The new standard requires revenue to be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The new standard also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The new standard allows for either full retrospective or modified retrospective adoption. The new standard will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is not permitted. | |
In April 2015, the FASB proposed a one-year deferral of the effective date for the new standard. If approved, the new standard would be effective for fiscal years, and interim periods within those years, beginning after December 15, 2017 and early adoption as of the original effective date for public entities would be permitted. Under the proposal, the new standard would be effective for the Company for the fiscal year ending June 30, 2019. | |
The Company is currently evaluating the transition method that will be elected as well as the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. The Company will also evaluate the effect of any adopted deferral on its plans for adopting the new standard. | |
In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis, which effectively eliminates the presumption that a general partner should consolidate a limited partnership, modifies the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities, and affects the consolidation analysis of reporting entities that are involved with VIEs (particularly those that have fee arrangements and related party relationships). In some cases, consolidation conclusions will change under the new guidance and, in other cases, a reporting entity will need to provide additional disclosures if an entity that currently is not considered a VIE is considered a VIE under the new guidance. The update will be effective for fiscal years, and interim periods within those years, beginning after December 15, 2015 and early adoption is permitted. The update allows for either full retrospective or modified retrospective adoption. The Company is currently evaluating the impact of the adoption of the update on its consolidated financial statements and related disclosures. The update will be effective for the Company for the fiscal year ending June 30, 2017. |
INITIAL_PUBLIC_OFFERING_AND_RE1
INITIAL PUBLIC OFFERING AND REORGANIZATION (Tables) | 9 Months Ended | ||||
Mar. 31, 2015 | |||||
Initial Public Offering and Reorganization [Abstract] | |||||
Pro forma financial information for Reorganization and Initial Public Offering | The following table presents the adjustments to the balance sheet upon the consummation of the Reorganization and IPO at October 1, 2013 (in thousands): | ||||
Assets | |||||
Cash and cash equivalents | $ | 277,814 | -1 | ||
Prepaid expenses and other current assets | (5,911 | ) | -2 | ||
Total current assets | 271,903 | ||||
Deferred tax assets | 282,972 | -3 | |||
Total assets | $ | 554,875 | |||
Liabilities, redeemable limited partners' capital and stockholders' deficit | |||||
Payable pursuant to tax receivable agreement | $ | 6,966 | -3 | ||
Total current liabilities | 6,966 | ||||
Payable pursuant to tax receivable agreement, less current portion | 179,111 | -3 | |||
Total liabilities | 186,077 | ||||
Redeemable limited partners' capital | 2,799,121 | -4 | |||
Stockholders' deficit: | |||||
Common stock, par value $0.01, 12,250,000 shares authorized; no shares outstanding | (56 | ) | -5 | ||
Class A common stock, par value $0.01, 500,000,000 shares authorized; 32,374,751 shares issued and outstanding | 324 | -5 | |||
Class B common stock, par value $0.000001, 600,000,000 shares authorized; 112,607,832 shares issued and outstanding | — | -5 | |||
Additional paid-in capital | (28,828 | ) | -6 | ||
Accumulated deficit | (2,401,766 | ) | -7 | ||
Accumulated other comprehensive income | 3 | -4 | |||
Total stockholders' deficit | (2,430,323 | ) | |||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | $ | 554,875 | |||
-1 | Reflects net effect on cash and cash equivalents of the receipt of gross proceeds from the IPO of $874.1 million (with an IPO price of $27.00 per share of Class A common stock) and the purchase of units from the member owners described above, as follows (in thousands): | ||||
Gross proceeds from the IPO | $ | 874,118 | |||
Underwriting discounts, commissions and other expenses | (52,447 | ) | |||
Purchases of Class B common units from the member owners | (543,857 | ) | |||
Net cash proceeds from IPO | $ | 277,814 | |||
-2 | Reflects the reduction of prepaid expenses related to the IPO, with an offset to the proceeds of the IPO in additional paid-in capital. | ||||
-3 | Premier LP has made an election under Section 754 of the Internal Revenue Code of 1986, as amended, or the Code, and comparable elections under state and local tax law, such that the initial sale of Class B common units by PHSI and the member owners resulted in adjustments to the tax basis of the assets of Premier LP. These increases in tax basis increase (for tax purposes) the depreciation and amortization deductions by Premier LP, and therefore, reduce the amount of income tax that Premier would otherwise be required to pay in the future. In connection with the Reorganization and IPO, Premier has entered into a tax receivable agreement with the member owners which became effective upon the completion of the Reorganization and IPO, pursuant to which Premier agreed to pay to the member owners, generally over a 15-year period (under current law), 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local and franchise income tax that Premier actually realizes (or is deemed to realize, in the case of payments required to be made upon certain occurrences under such tax receivable agreement) as a result of the increases in tax basis resulting from the sale or exchange of Class B common units by the member owners. The unaudited adjustments give effect to the Section 754 election and the tax receivable agreement based on the following assumptions: | ||||
• | The increase in deferred tax assets representing the income tax effects of the increases in the tax basis as a result of Premier LP's election under Section 754 of the Code in connection with the initial sale of Class B common units described above. This adjustment is calculated based on an effective income tax rate for Premier of approximately 39%, which includes a provision for U.S. federal income taxes and assumes (i) Premier's statutory rates apportioned to each state and local tax jurisdiction, (ii) that there are no material changes in the relevant tax law, and (iii) that Premier earns sufficient taxable income in each year to realize the full tax benefit of the amortization of its assets. | ||||
• | Premier determined the adjustments in connection with the Section 754 election by first calculating the excess of each selling member owner's and PHSI's selling price over such person's share of Premier LP's tax basis in its assets attributable to the Class B common units sold to Premier. Premier then allocated the aggregate excess among Premier LP's assets following applicable tax regulations governing adjustments that result from the Section 754 election. Premier determined each selling member owner's share of the tax basis in Premier LP's assets attributable to the Class B common units sold to Premier by multiplying the member owner's tax capital account balance as of the date of sale as maintained in Premier LP's books and records by a fraction, the numerator of which was the number of Class B common units sold to Premier, and the denominator of which was the number of Class B common units held by the selling member owner immediately prior to the sale. For purposes of the calculation, the selling price per Class B common unit was equal to the net price paid per share of the Class A common stock by the underwriters to Premier in the IPO. The adjustments increased Premier LP's basis in its assets (for tax purposes), and Premier calculates the amount of depreciation, amortization and other deductions to which it is entitled as a result of these adjustments. Premier then calculates Premier's tax liability with and without the deductions attributable to these adjustments, assuming that Premier earns sufficient taxable income in each year to realize the full benefit of the deductions. Premier computed the estimated tax benefit attributable to the election as the excess of Premier's tax liability as so computed without the deductions over Premier's tax liability as so computed with the deductions. Additionally, the tax receivable agreement payments give rise to adjustments that result in Premier LP becoming entitled to additional deductions, and the calculation of Premier's liability under the tax receivable agreement take these adjustments and additional resulting deductions into account. | ||||
• | Premier LP's election under Section 754 of the Code was at the discretion of Premier LP and is not subject to review or approval by the IRS or other tax authorities. The computation of the adjustments resulting from the Section 754 election and Premier's tax liability is subject to audit by the IRS and other tax authorities in the same manner as all other items reported on income tax returns. | ||||
• | Upon the Reorganization and IPO, the cumulative adjustments of $186.1 million, of which $7.0 million was expected to be paid over the next 12 months, and was reflected as a current liability with the remaining balance classified as a long-term liability, to reflect a liability equal to 85% of the estimated realizable tax benefit resulting from the increase in tax basis due to Premier LP's Section 754 election in connection with the initial sale by the member owners of the Class B common units described above as an increase to payable pursuant to the tax receivable agreement. | ||||
• | Deferred tax assets are measured based on the difference in tax basis of Premier's investment in Premier LP as compared to its GAAP carrying value and include the change in allocations in connection with the Reorganization. The adjustments related to Premier LP's Section 754 election described above are a component of Premier's tax basis in Premier LP. | ||||
Pursuant to the terms of the Exchange Agreement, the member owners and new limited partners admitted to Premier LP following the completion of the IPO may subsequently exchange Class B common units in Premier LP for shares of Premier's Class A common stock, cash or a combination of both. Any subsequent exchanges of Class B common units for shares of Premier's Class A common stock pursuant to the Exchange Agreement may result in increases in the tax basis of the tangible and intangible assets of Premier LP (85% of the realized tax benefits from which will be due to the limited partners and recorded as an additional payable pursuant to the tax receivable agreement) that otherwise would not have been available. These subsequent exchanges have not been reflected in the consolidated financial statements. | |||||
-4 | Reflects the increase in the noncontrolling interest held by the limited partners in Premier L.P. resulting from the net proceeds from the IPO used to purchase Class A common units from Premier LP of $247.7 million and Class B common units from PHSI of $30.1 million, and the contribution of the common stock of PHSI in connection with the Reorganization of $76.9 million. This is offset by an adjustment of $131.0 million to reflect the approximately 78% controlling interest held by the redeemable limited partners of Premier LP subsequent to the Reorganization and IPO, which is reflected in redeemable limited partners' capital on the unaudited consolidated balance sheets. Immediately following the effective date of the LP Agreement, all of Premier LP's limited partners that approved the Reorganization received Class B common units and capital account balances in Premier LP equal to their percentage interests and capital account balances in Premier LP immediately preceding the Reorganization. Premier used a portion of the net proceeds from the IPO to purchase (i) Class A common units, (ii) Class B common units from PHSI and (iii) Class B common units from the member owners, resulting in a reduction in the noncontrolling interest attributable to the limited partners from 99% to approximately 78%. | ||||
Reflects the increase in redeemable limited partners' capital of $2,575.5 million to record the balance at the redemption amount, which represents the greater of the book value or redemption amount, at the date of the Reorganization. This results in an offsetting decrease in retained earnings of $50.1 million, followed by an offsetting decrease in additional paid-in-capital of $173.7 million and with a final offsetting increase in accumulated deficit of $2,351.7 million. | |||||
-5 | Reflects (i) the exchange of the existing PHSI shares of common stock, common stock subscribed and related subscriptions receivable for Class B common units, (ii) the issuance of Class B common stock in connection with the Reorganization and (iii) the issuance of Class A common stock in connection with the IPO. | ||||
-6 | Reflects the impact of the adjustments in notes (1), (2), (3), (4) and (5) above to additional paid-in capital: | ||||
• | an increase of $96.9 million due to an increase in deferred tax assets described in note (3) of $283.0 million offset by an increase in payables pursuant to the tax receivable agreement of $186.1 million; | ||||
• | an increase of $821.7 million from the net proceeds from the IPO less the par value of the shares of Class A common stock sold in the IPO of $0.3 million and less prepaid offering expenses of $5.9 million; | ||||
• | a decrease of $767.5 million to reflect the difference between the consideration paid to acquire the Class A common units and B common units and the adjustment to the carrying value of the noncontrolling interest described in note (4) above; and | ||||
• | a decrease in the remaining balance of additional paid-in-capital related to the increase in redeemable limited partners' capital to its redemption value, as described in note (4) above. | ||||
-7 | Reflects the decrease in retained earnings and increase in accumulated deficit related to the increase in redeemable limited partners' capital to its redemption value, as described in note (4) above. | ||||
In addition, following the completion of the Reorganization and IPO: | |||||
• | Premier LP became contractually required under the GPO participation agreements to pay each member owner revenue share from Premier LP equal to 30% of all gross administrative fees collected by Premier LP based upon purchasing by such member owner's member facilities through Premier LP's GPO supplier contracts. Historically, Premier LP did not generally have a contractual requirement to pay revenue share to member owners participating in its GPO programs, but paid semi-annual distributions of partnership income. | ||||
• | Premier records redeemable limited partners' capital at redemption value, which represents the greater of the book value or redemption amount per the LP Agreement, at the reporting date. | ||||
• | Premier became subject to additional U.S. federal, state and local income taxes with respect to its additional allocable share of any taxable income of Premier LP. | ||||
• | Noncontrolling interest in Premier LP decreased from 99% to approximately 78%. |
SEGMENTS_Tables
SEGMENTS (Tables) | 9 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||
Schedule of adjusted EBITDA and other income statement information and total assets by segment | The following tables present selected financial data for each of the Company's reportable segments (in thousands): | |||||||||||||
Net Revenue | Segment Adjusted EBITDA | Depreciation & Amortization Expense | Capital Expenditures | |||||||||||
Three Months Ended March 31, 2015 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 117,959 | ||||||||||||
Other services and support | 740 | |||||||||||||
Services | 118,699 | |||||||||||||
Products | 73,438 | |||||||||||||
Total Supply Chain Services | 192,137 | $ | 101,600 | $ | 525 | $ | 478 | |||||||
Performance Services | 69,586 | 26,166 | 12,238 | 15,812 | ||||||||||
Corporate | — | (24,021 | ) | 1,328 | 2,363 | |||||||||
Total | $ | 261,723 | $ | 103,745 | $ | 14,091 | $ | 18,653 | ||||||
Three Months Ended March 31, 2014 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 108,087 | ||||||||||||
Other services and support | 197 | |||||||||||||
Services | 108,284 | |||||||||||||
Products | 58,692 | |||||||||||||
Total Supply Chain Services | 166,976 | $ | 91,477 | $ | 380 | $ | 1,098 | |||||||
Performance Services | 58,622 | 20,307 | 8,622 | 12,267 | ||||||||||
Corporate | — | (20,479 | ) | 1,196 | 458 | |||||||||
Total | $ | 225,598 | $ | 91,305 | $ | 10,198 | $ | 13,823 | ||||||
Net Revenue | Segment Adjusted EBITDA | Depreciation & Amortization Expense | Capital Expenditures | |||||||||||
Nine Months Ended March 31, 2015 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 337,157 | ||||||||||||
Other services and support | 1,192 | |||||||||||||
Services | 338,349 | |||||||||||||
Products | 203,698 | |||||||||||||
Total Supply Chain Services | 542,047 | $ | 290,210 | $ | 1,441 | $ | 1,342 | |||||||
Performance Services | 198,429 | 67,717 | 34,451 | 45,143 | ||||||||||
Corporate | — | (64,856 | ) | 3,813 | 4,579 | |||||||||
Total | $ | 740,476 | $ | 293,071 | $ | 39,705 | $ | 51,064 | ||||||
Nine Months Ended March 31, 2014 | ||||||||||||||
Supply Chain Services: | ||||||||||||||
Net administrative fees | $ | 353,793 | ||||||||||||
Other services and support | 504 | |||||||||||||
Services | 354,297 | |||||||||||||
Products | 151,022 | |||||||||||||
Total Supply Chain Services | 505,319 | $ | 302,076 | $ | 1,087 | $ | 1,901 | |||||||
Performance Services | 169,764 | 54,367 | 24,414 | 37,344 | ||||||||||
Corporate | — | (57,399 | ) | 3,609 | 597 | |||||||||
Total | $ | 675,083 | $ | 299,044 | $ | 29,110 | $ | 39,842 | ||||||
Total Assets | ||||||||||||||
March 31, 2015 | ||||||||||||||
Supply Chain Services | $ | 415,497 | ||||||||||||
Performance Services | 460,097 | |||||||||||||
Corporate | 612,939 | |||||||||||||
Total | $ | 1,488,533 | ||||||||||||
June 30, 2014 | ||||||||||||||
Supply Chain Services | $ | 373,746 | ||||||||||||
Performance Services | 266,567 | |||||||||||||
Corporate | 606,343 | |||||||||||||
Total | $ | 1,246,656 | ||||||||||||
Reconciliation of segment adjusted EBITDA to operating income | A reconciliation of Segment Adjusted EBITDA to income before income taxes is as follows (in thousands): | |||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||
Segment Adjusted EBITDA | $ | 103,745 | $ | 91,305 | $ | 293,071 | $ | 299,044 | ||||||
Depreciation and amortization | (11,538 | ) | (9,396 | ) | (33,107 | ) | (26,952 | ) | ||||||
Amortization of purchased intangible assets | (2,554 | ) | (802 | ) | (6,598 | ) | (2,158 | ) | ||||||
Merger and acquisition related expenses (a) | (2,863 | ) | (984 | ) | (6,408 | ) | (1,303 | ) | ||||||
Strategic and financial restructuring expenses (b) | (2 | ) | (733 | ) | (1,281 | ) | (3,614 | ) | ||||||
Stock-based compensation expense | (7,285 | ) | (6,299 | ) | (21,129 | ) | (13,118 | ) | ||||||
Adjustment to tax receivable agreement liability | (1,073 | ) | — | — | — | |||||||||
Acquisition related adjustment - deferred revenue (c) | (3,563 | ) | — | (9,224 | ) | — | ||||||||
Equity in net income of unconsolidated affiliates (d) | (5,197 | ) | (3,566 | ) | (14,812 | ) | (12,171 | ) | ||||||
Deferred compensation plan expense | (759 | ) | — | 209 | — | |||||||||
Operating income | $ | 68,911 | $ | 69,525 | $ | 200,721 | $ | 239,728 | ||||||
Equity in net income of unconsolidated affiliates (d) | 5,197 | 3,566 | 14,812 | 12,171 | ||||||||||
Interest and investment income, net | 204 | 400 | 517 | 641 | ||||||||||
(Loss) gain on investment | (1,000 | ) | 37,850 | (1,000 | ) | 37,850 | ||||||||
Other income (expense), net | 743 | 52 | (219 | ) | 56 | |||||||||
Income before income taxes | $ | 74,055 | $ | 111,393 | $ | 214,831 | $ | 290,446 | ||||||
(a) | Represents legal, accounting and other expenses related to acquisition activities. | |||||||||||||
(b) | Represents legal, accounting and other expenses directly related to strategic and financial restructuring expenses. | |||||||||||||
(c) | Represents non-cash adjustment to deferred revenue of acquired entities. Business combination accounting rules require us to account for the fair values of software license updates and product support contracts and hardware systems support contracts assumed in connection with our acquisitions. Because these support contracts are typically one year in duration, our GAAP revenues for the one-year period subsequent to our acquisition of a business do not reflect the full amount of support revenues on these assumed support contracts that would have otherwise been recorded by the acquired entity. The non-GAAP adjustment to our software license updates and product support revenues is intended to include, and thus reflect, the full amount of such revenues. | |||||||||||||
(d) | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. |
GOODWILL_AND_INTANGIBLE_ASSETS1
GOODWILL AND INTANGIBLE ASSETS, NET (Tables) | 9 Months Ended | |||||||
Mar. 31, 2015 | ||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||
Schedule of Intangible Assets | Intangible assets, net consist of the following (in thousands): | |||||||
Weighted Average Useful Life | 31-Mar-15 | 30-Jun-14 | ||||||
Identifiable intangible assets acquired: | ||||||||
Technology | 5.0 years | $ | 45,087 | $ | 20,257 | |||
Member relationships | 8.3 years | 16,380 | 6,830 | |||||
Non-compete agreements | 3.0 years | 80 | 80 | |||||
Trade names | 4.9 years | 6,560 | 3,990 | |||||
5.8 years | 68,107 | 31,157 | ||||||
Accumulated amortization | (26,898 | ) | (20,302 | ) | ||||
Total identifiable intangible assets acquired, net | $ | 41,209 | $ | 10,855 | ||||
NOTES_PAYABLE_NOTES_PAYABLE_Ta
NOTES PAYABLE NOTES PAYABLE (Tables) | 9 Months Ended | |||
Mar. 31, 2015 | ||||
Debt Disclosure [Abstract] | ||||
Schedule of Principal Payments of Notes Payable | Principal payments of notes payable are as follows (in thousands): | |||
Twelve Months Ending March 31, | ||||
2015 | $ | 4,393 | ||
2016 | 4,609 | |||
2017 | 8,122 | |||
2018 | 1,194 | |||
2019 | 2,046 | |||
Thereafter | — | |||
Total principal payments | $ | 20,364 | ||
FAIR_VALUE_MEASUREMENTS_Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||
Schedule of Assets at Fair Value on a Recurring Basis | The Company measures the following assets at fair value on a recurring basis (in thousands): | ||||||||||||
Description | Total | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||
March 31, 2015 | |||||||||||||
Cash equivalents | $ | 30,804 | $ | 30,804 | $ | — | $ | — | |||||
Commercial paper | 7,140 | — | 7,140 | — | |||||||||
U.S. government debt securities | 91,454 | — | 91,454 | — | |||||||||
Corporate debt securities | 185,262 | — | 185,262 | — | |||||||||
Asset-backed securities | 63,840 | — | 63,840 | — | |||||||||
Deferred compensation plan assets | 38,604 | 38,604 | — | — | |||||||||
Total assets | $ | 417,104 | $ | 69,408 | $ | 347,696 | $ | — | |||||
June 30, 2014 | |||||||||||||
Cash equivalents | $ | 64,207 | $ | 64,207 | $ | — | $ | — | |||||
Commercial paper | 33,572 | — | 33,572 | — | |||||||||
U.S. government debt securities | 116,744 | — | 116,744 | — | |||||||||
Corporate debt securities | 166,452 | — | 166,452 | — | |||||||||
Asset-backed securities | 91,851 | 91,851 | — | ||||||||||
Deferred compensation plan assets | 33,256 | 33,256 | — | — | |||||||||
Total assets | $ | 506,082 | $ | 97,463 | $ | 408,619 | $ | — | |||||
MARKETABLE_SECURITIES_Tables
MARKETABLE SECURITIES (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||
Schedule of Marketable Securities, Classified as Available-for-sale Securities | Marketable securities, classified as available-for-sale, consist of the following (in thousands): | ||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Market Value | ||||||||||
March 31, 2015 | |||||||||||||
Commercial paper | $ | 7,134 | $ | 6 | $ | — | $ | 7,140 | |||||
U.S. government debt securities | 91,413 | 51 | (10 | ) | 91,454 | ||||||||
Corporate debt securities | 185,246 | 62 | (46 | ) | 185,262 | ||||||||
Asset-backed securities | 63,840 | 17 | (17 | ) | 63,840 | ||||||||
$ | 347,633 | $ | 136 | $ | (73 | ) | $ | 347,696 | |||||
June 30, 2014 | |||||||||||||
Commercial paper | $ | 33,561 | $ | 12 | $ | (1 | ) | $ | 33,572 | ||||
U.S. government debt securities | 116,620 | 124 | — | 116,744 | |||||||||
Corporate debt securities | 166,424 | 69 | (41 | ) | 166,452 | ||||||||
Asset-backed securities | 91,824 | 34 | (7 | ) | 91,851 | ||||||||
$ | 408,429 | $ | 239 | $ | (49 | ) | $ | 408,619 | |||||
Marketable Securities, Maturities | At March 31, 2015, marketable securities consist of the following maturities (in thousands): | ||||||||||||
Cost | Fair Market Value | ||||||||||||
Due in one year or less | $ | 192,726 | $ | 192,752 | |||||||||
Due after one year through five years | 154,907 | 154,944 | |||||||||||
347,633 | 347,696 | ||||||||||||
REDEEMABLE_LIMITED_PARTNERS_CA1
REDEEMABLE LIMITED PARTNERS' CAPITAL (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Temporary Equity Disclosure [Abstract] | |||||||||||||
Changes in Redeemable Limited Partners' Capital | The table below shows the changes in the redeemable limited partners' capital classified as temporary equity from June 30, 2014 to March 31, 2015 (in thousands): | ||||||||||||
Receivables From Limited Partners | Redeemable Limited Partners' Capital | Accumulated Other Comprehensive Income (Loss) | Total Redeemable Limited Partners' Capital | ||||||||||
June 30, 2014 | $ | (18,139 | ) | $ | 3,262,666 | $ | 147 | $ | 3,244,674 | ||||
Distributions applied to receivables from limited partners | 4,884 | — | — | 4,884 | |||||||||
Redemption of limited partners | — | (2,046 | ) | — | (2,046 | ) | |||||||
Net income attributable to Premier LP | — | 170,135 | — | 170,135 | |||||||||
Distributions to limited partners | — | (69,841 | ) | — | (69,841 | ) | |||||||
Net unrealized loss on marketable securities | — | — | (95 | ) | (95 | ) | |||||||
Exchange of Class B common units for Class A common stock by member owners | — | (164,655 | ) | — | (164,655 | ) | |||||||
Adjustment to redemption amount | — | 811,969 | — | 811,969 | |||||||||
31-Mar-15 | $ | (13,255 | ) | $ | 4,008,228 | $ | 52 | $ | 3,995,025 | ||||
EARNINGS_LOSS_PER_SHARE_Tables
EARNINGS (LOSS) PER SHARE (Tables) | 9 Months Ended | |||||||||||||
Mar. 31, 2015 | ||||||||||||||
Earnings Per Share [Abstract] | ||||||||||||||
Reconciliation of common shares used for basic earnings per share and diluted earnings per share | The following table provides a reconciliation of common shares used for basic earnings (loss) per share and diluted earnings (loss) per share (in thousands, except per share amounts): | |||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||
2015 (c) | 2014 (c) | 2015 (c) | 2014 (d) | |||||||||||
Numerator for Basic and Diluted Earnings (Loss) Per Share: | ||||||||||||||
Net (loss) income attributable to shareholders after adjustment of redeemable limited partners' capital to redemption amount | $ | (374,853 | ) | $ | 509,239 | $ | (781,216 | ) | $ | (3,204,645 | ) | |||
Denominator for basic earnings (loss) per share weighted average shares (a) | 37,316 | 32,375 | 35,066 | 23,394 | ||||||||||
Effect of dilutive securities: (b) | ||||||||||||||
Stock options | — | 181 | — | — | ||||||||||
Restricted stock units | — | — | — | — | ||||||||||
Performance share awards | — | — | — | — | ||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | ||||||||||||||
Weighted average shares and assumed conversions | 37,316 | 32,556 | 35,066 | 23,394 | ||||||||||
Basic (loss) earnings per share | $ | (10.05 | ) | $ | 15.73 | $ | (22.28 | ) | $ | (136.99 | ) | |||
Diluted (loss) earnings per share | $ | (10.05 | ) | $ | 15.64 | $ | (22.28 | ) | $ | (136.99 | ) | |||
(a) | Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock units and non-vested performance share awards for the three and nine months ended March 31, 2015 and 2014. | |||||||||||||
(b) | For the three and nine months ended March 31, 2015, the effect of 151, 380 and 617 stock options, restricted stock units, and performance share awards, respectively, and 4, 319, and 522 stock options, restricted stock units, and performance share awards, respectively, were excluded from the diluted weighted average shares outstanding due to the net loss sustained for the respective periods. Additionally, the effect of 100 restricted stock units for the nine months ended March 31, 2014 were also excluded from the diluted weighted average shares outstanding due to the net loss sustained for the period. Further, the 106,659 Class B common units exchangeable for Class A common shares was excluded from the dilutive weighted average shares outstanding because inclusion thereof would have been anti-dilutive for the periods presented. | |||||||||||||
(c) | The weighted average shares calculation is based on the Premier, Inc. common shares outstanding for the three months ended March 31, 2015 and 2014 and the nine months ended March 31, 2015. | |||||||||||||
(d) | The weighted average shares calculation is based on a combination of the PHSI historical common shares outstanding for the three months ended September 30, 2013 and the Premier, Inc. common shares outstanding for the period from September 25, 2013 to March 31, 2014. |
STOCKBASED_COMPENSATION_Tables
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended | |||||
Mar. 31, 2015 | ||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||
Schedule Restricted Stock Unit Award Activity | . The following table includes information related to restricted stock unit awards for the nine months ended March 31, 2015: | |||||
Number of Shares | Weighted Average Fair Value at Grant Date | |||||
Outstanding at June 30, 2014 | 717,304 | $ | 27.29 | |||
Granted | 158,794 | $ | 31.8 | |||
Vested | (22,426 | ) | $ | 28.17 | ||
Forfeited | (27,461 | ) | $ | 27.61 | ||
Outstanding at March 31, 2015 | 826,211 | $ | 28.12 | |||
Schedule of Performance Share Award Activity | The following table includes information related to performance share awards for the nine months ended March 31, 2015: | |||||
Number of Shares | Weighted Average Fair Value at Grant Date | |||||
Outstanding at June 30, 2014 | 827,174 | $ | 27 | |||
Granted | 274,863 | $ | 31.67 | |||
Vested | — | $ | — | |||
Forfeited | (10,595 | ) | $ | 28.21 | ||
Outstanding at March 31, 2015 | 1,091,442 | $ | 28.17 | |||
Schedule of Stock Option Activity | The following table includes information related to stock options for the nine months ended March 31, 2015: | |||||
Number of Options | Weighted Average Exercise Price | |||||
Outstanding at June 30, 2014 | 2,047,484 | $ | 27 | |||
Granted | 649,556 | $ | 31.68 | |||
Exercised | (39,835 | ) | $ | 27 | ||
Forfeited | (17,013 | ) | $ | 28.72 | ||
Outstanding at March 31, 2015 | 2,640,192 | $ | 28.14 | |||
Outstanding and exercisable at March 31, 2015 | 651,507 | $ | 27 | |||
Key Assumptions Used for Determining the Fair Value of Stock Options Granted | The Company estimates the fair value of each stock option on the date of grant using a Black-Scholes option-pricing model, applying the following assumptions, and amortizes expense over the option's vesting period using the straight-line attribution approach: | |||||
For options granted during the nine months ended: | 31-Mar-15 | 31-Mar-14 | ||||
Expected life (1) | 6 years | 6 years | ||||
Expected dividend (2) | — | — | ||||
Expected volatility (3) | 36.20% - 39.50% | 42 | % | |||
Risk-free interest rate (4) | 1.66% - 1.84% | 1.71 | % | |||
Weighted average option grant date fair value | $12.82 - $13.77 | $ | 11.46 | |||
(1) 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 Inc.'s employees. | ||||||
(2) No dividends are expected to be paid over the contractual term of the stock options granted, resulting in the use of a zero expected dividend rate. | ||||||
(3) The expected volatility rate is based on the observed historical volatilities of comparable companies. | ||||||
(4) The risk-free interest rate was interpolated from the five-year and seven-year United States constant maturity market yield as of the date of the grant. |
ORGANIZATION_AND_BASIS_OF_PRES2
ORGANIZATION AND BASIS OF PRESENTATION (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | |||||||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Sep. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Oct. 31, 2014 | ||||
segment | ||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Number of reportable segments | 2 | |||||||||
Schedule of Organization [Line Items] | ||||||||||
Limited partnership, limited partners ownership percentage | 74.00% | 99.00% | ||||||||
Ownership percentage of Company stock by member owners | 74.00% | 74.00% | ||||||||
Payments for initial public offering fees | $0 | $2,822 | ||||||||
Temporary Equity, Increase (Decrease) To Redemption Amount | 387,062 | -495,714 | 811,969 | 3,224,098 | ||||||
Earnings Per Share, Diluted | ($10.05) | [1] | $15.64 | [1] | ($22.28) | [1] | ($136.99) | [1] | ||
Earnings Per Share, Basic | ($10.05) | [1] | $15.73 | [1] | ($22.28) | [1] | ($136.99) | [1] | ||
Premier LP | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Limited partnership, general partner ownership percentage | 26.00% | |||||||||
Limited partnership, limited partners ownership percentage | 74.00% | |||||||||
Class A Common Stock | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Ownership percentage of Company stock by member owners | 26.00% | 26.00% | ||||||||
Class B Common Stock | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Percentage of Class B common units and associated Class B common stock exchanged by member owners for Class A common stock | 4.00% | |||||||||
Previously Reported | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Earnings Per Share, Diluted | $16.30 | |||||||||
Limited Partner | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Temporary Equity, Increase (Decrease) To Redemption Amount | -495,700 | -811,969 | 3,224,000 | |||||||
Limited Partner | Restatement Adjustment | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Temporary Equity, Increase (Decrease) To Redemption Amount | 21,400 | 0 | ||||||||
Earnings Per Share, Basic and Diluted | ($0.92) | |||||||||
Earnings Per Share, Basic | $0.66 | |||||||||
Limited Partner | Previously Reported | ||||||||||
Schedule of Organization [Line Items] | ||||||||||
Temporary Equity, Increase (Decrease) To Redemption Amount | ($517,100) | $3,203,000 | ||||||||
Earnings Per Share, Diluted | $660 | $660 | ||||||||
Earnings Per Share, Basic and Diluted | $136.07 | $136.99 | ||||||||
Earnings Per Share, Basic | $16.39 | $660 | ||||||||
[1] | The weighted average shares calculation is based on a combination of the PHSI historical common shares outstanding for the three months ended September 30, 2013 and the Premier, Inc. common shares outstanding for the period from September 25, 2013 to March 31, 2014. |
INITIAL_PUBLIC_OFFERING_AND_RE2
INITIAL PUBLIC OFFERING AND REORGANIZATION - INITIAL PUBLIC OFFFERING (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Oct. 01, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 31, 2015 | Mar. 31, 2014 |
Initial Public Offering [Line Items] | |||||
Proceeds from issuance initial public offering, net of expenses | $0 | $821,671 | |||
Payments to acquire common units from member owners | 543,857 | 0 | 543,857 | ||
Class A Common Stock | |||||
Initial Public Offering [Line Items] | |||||
Common stock issued | 32,374,751 | 257,027 | 32,374,751 | ||
Common stock issued, price per share | $27 | $27 | $27 | ||
Proceeds from issuance initial public offering, net of expenses | 821,700 | ||||
Premier LP | Class A Common Stock | |||||
Initial Public Offering [Line Items] | |||||
Payments to acquire common units from member owners | 247,700 | ||||
Class B Common Units | Premier Healthcare Solutions, Inc. | |||||
Initial Public Offering [Line Items] | |||||
Payments to acquire common units from member owners | 30,100 | ||||
Common limited partners units acquired | 1,184,882 | ||||
Class B Common Units | Member Owners | |||||
Initial Public Offering [Line Items] | |||||
Payments to acquire common units from member owners | 543,900 | ||||
Common limited partners units acquired | 21,428,571 | ||||
Class A Common Units | Premier LP | |||||
Initial Public Offering [Line Items] | |||||
Payments to acquire common units from member owners | $247,700 | ||||
Common limited partners units acquired | 9,761,298 |
INITIAL_PUBLIC_OFFERING_AND_RE3
INITIAL PUBLIC OFFERING AND REORGANIZATION - REORGANIZATION (Details) (USD $) | 0 Months Ended | 3 Months Ended | 0 Months Ended | ||||
Oct. 01, 2013 | Mar. 31, 2015 | Sep. 30, 2013 | Mar. 31, 2014 | Oct. 31, 2014 | Jan. 31, 2015 | Jun. 30, 2014 | |
Reorganization [Line Items] | |||||||
Common stock, par value (usd per share) | $0.01 | ||||||
Limited partnership, limited partners ownership percentage | 74.00% | 99.00% | |||||
Term of tax receivable agreement | 15 years | ||||||
GPO participation agreements, term | 5 years | ||||||
Member Owners | |||||||
Reorganization [Line Items] | |||||||
Probation period for company-directed underwritten public offering | 60 days | ||||||
Payment of realized income and franchise tax cash savings, percent | 85.00% | 85.00% | |||||
Revenue share of gross administrative fees collected, percent | 30.00% | ||||||
Two largest GPO member owners | |||||||
Reorganization [Line Items] | |||||||
GPO participation agreements, term | 7 years | ||||||
Class B Common Stock | |||||||
Reorganization [Line Items] | |||||||
Common stock issued | 4,685,267 | ||||||
Common stock, par value (usd per share) | $0.00 | 0.000001 | $0.00 | ||||
Class B Common Stock | Member Owners | |||||||
Reorganization [Line Items] | |||||||
Common stock issued | 112,607,832 | ||||||
Common stock, par value (usd per share) | $0.00 | ||||||
Class A Common Stock | |||||||
Reorganization [Line Items] | |||||||
Common stock issued | 32,374,751 | 32,374,751 | 257,027 | ||||
Common stock, par value (usd per share) | $0.01 | 0.01 | $0.01 | ||||
Class A Common Stock | Member Owners | |||||||
Reorganization [Line Items] | |||||||
Limited partnership, limited partners ownership percentage | 3.50% | ||||||
Administrative Fee Revenue | Two largest GPO member owners | |||||||
Reorganization [Line Items] | |||||||
Percent of revenue | 16.00% |
INITIAL_PUBLIC_OFFERING_AND_RE4
INITIAL PUBLIC OFFERING AND REORGANIZATION - EFFECTS OF THE REORGANIZATION (Details) | 0 Months Ended | 3 Months Ended | |||
Oct. 01, 2013 | Mar. 31, 2014 | Mar. 31, 2015 | Jun. 30, 2014 | Oct. 01, 2013 | |
Reorganization [Line Items] | |||||
Common stock, shares issued | 0 | 0 | |||
Class B Common Stock | |||||
Reorganization [Line Items] | |||||
Common stock, shares issued | 112,607,832 | 106,658,535 | 112,510,905 | 112,607,832 | |
Class B Common Stock | Member Owners | |||||
Reorganization [Line Items] | |||||
Common stock, shares issued | 112,607,832 | 112,607,832 | 112,607,832 | ||
Voting power as a percent | 78.00% | ||||
Class A Common Stock | |||||
Reorganization [Line Items] | |||||
Common stock, shares issued | 32,374,751 | 37,376,985 | 32,375,390 | 32,374,751 | |
Voting power as a percent | 22.00% | 22.00% | |||
Class B Common Units | Member Owners | |||||
Reorganization [Line Items] | |||||
Common units issued | 112,607,832 | 112,607,832 | |||
Premier LP | Class A Common Units | Premier GP | |||||
Reorganization [Line Items] | |||||
Common units issued | 32,374,751 | 32,374,751 |
INITIAL_PUBLIC_OFFERING_AND_RE5
INITIAL PUBLIC OFFERING AND REORGANIZATION - IMPACT OF THE REORGANIZATION (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 1 Months Ended | ||||||
Feb. 02, 2015 | Oct. 01, 2013 | Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 31, 2015 | Mar. 31, 2014 | Oct. 31, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | ||
Reorganization [Line Items] | |||||||||||||
Gross proceeds from the IPO | $874,118,000 | ||||||||||||
Underwriting discounts, commissions and other expenses | -52,447,000 | ||||||||||||
Purchases of Class B common units from member owners | -543,857,000 | 0 | -543,857,000 | ||||||||||
Net cash proceeds from IPO | 277,814,000 | ||||||||||||
Estimated effective income tax rate | 39.00% | 38.00% | |||||||||||
Income and franchise tax, payment of realized cash savings, term | 15 years | ||||||||||||
Assets | |||||||||||||
Cash and cash equivalents | 277,814,000 | [1] | 155,636,000 | 155,636,000 | 152,040,000 | 152,040,000 | 131,786,000 | 198,296,000 | |||||
Prepaid expenses and other current assets | -5,911,000 | [2] | 32,039,000 | 32,039,000 | 31,175,000 | ||||||||
Total current assets | 271,903,000 | 525,217,000 | 525,217,000 | 422,056,000 | |||||||||
Deferred tax assets | 282,972,000 | [3] | 348,564,000 | 348,564,000 | 286,936,000 | ||||||||
Total assets | 554,875,000 | 1,488,533,000 | 1,488,533,000 | 1,246,656,000 | |||||||||
Liabilities, redeemable limited partners' capital and stockholders' deficit | |||||||||||||
Payable pursuant to tax receivable agreement | 6,966,000 | [3] | 10,940,000 | 10,940,000 | 11,035,000 | ||||||||
Total current liabilities | 6,966,000 | 246,479,000 | 246,479,000 | 223,882,000 | |||||||||
Payable pursuant to tax receivable agreement, less current portion | 179,111,000 | [3] | 233,564,000 | 233,564,000 | 181,256,000 | ||||||||
Total liabilities | 186,077,000 | 552,597,000 | 552,597,000 | 472,293,000 | |||||||||
Redeemable limited partners' capital | 2,799,121,000 | [4] | 3,995,025,000 | 3,995,025,000 | 3,244,674,000 | ||||||||
Stockholders' deficit: | |||||||||||||
Common stock | -56,000 | [5] | |||||||||||
Additional paid-in capital | -28,828,000 | [6] | 0 | 0 | 0 | ||||||||
Accumulated deficit | -2,401,766,000 | [7] | -3,059,480,000 | -3,059,480,000 | -2,469,873,000 | ||||||||
Accumulated other comprehensive income | 3,000 | [4] | 17,000 | 17,000 | 43,000 | ||||||||
Total stockholders' deficit | -2,430,323,000 | -3,059,089,000 | -3,059,089,000 | -2,470,311,000 | |||||||||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | 554,875,000 | 1,488,533,000 | 1,488,533,000 | 1,246,656,000 | |||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Common stock, par value (usd per share) | $0.01 | ||||||||||||
Common stock, shares authorized | 12,250,000 | ||||||||||||
Common stock, shares issued | 0 | ||||||||||||
Common stock, shares outstanding | 0 | ||||||||||||
Redeemable limited partners' capital | 14,500,000 | 131,000,000 | 14,518,000 | ||||||||||
Adjustment of redeemable limited partners' capital to redemption amount | 2,575,500,000 | 811,969,000 | 3,224,098,000 | ||||||||||
Offsetting decrease in retained earnings | 50,100,000 | ||||||||||||
Offsetting decrease in additional paid-in-capital | 173,700,000 | ||||||||||||
Final offsetting increase in accumulated deficit | 2,351,700,000 | ||||||||||||
Proceeds from issuance initial public offering, net of expenses | 0 | 821,671,000 | |||||||||||
Class A Common Stock | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Common stock issued | 32,374,751 | 257,027 | 32,374,751 | ||||||||||
Voting power as a percent | 22.00% | 22.00% | |||||||||||
Common stock issued, price per share | $27 | $27 | $27 | ||||||||||
Stockholders' deficit: | |||||||||||||
Common stock | 324,000 | [5] | 374,000 | 374,000 | 324,000 | ||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Common stock, par value (usd per share) | $0.01 | $0.01 | $0.01 | $0.01 | |||||||||
Common stock, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||||||
Common stock, shares issued | 32,374,751 | 37,376,985 | 37,376,985 | 32,375,390 | |||||||||
Common stock, shares outstanding | 32,374,751 | 37,376,985 | 37,376,985 | 32,375,390 | |||||||||
Proceeds from issuance initial public offering, net of expenses | 821,700,000 | ||||||||||||
Class B Common Stock | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Common stock issued | 4,685,267 | ||||||||||||
Stockholders' deficit: | |||||||||||||
Common stock | 0 | [5] | 0 | 0 | 0 | ||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Common stock, par value (usd per share) | $0.00 | $0.00 | $0.00 | $0.00 | |||||||||
Common stock, shares authorized | 600,000,000 | 600,000,000 | 600,000,000 | 600,000,000 | |||||||||
Common stock, shares issued | 112,607,832 | 106,658,535 | 106,658,535 | 112,510,905 | |||||||||
Common stock, shares outstanding | 112,607,832 | 106,658,535 | 106,658,535 | 112,510,905 | |||||||||
Member Owners | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Payment of realized income and franchise tax cash savings, percent | 85.00% | 85.00% | |||||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Cumulative adjustment related to tax receivable agreement | 186,100,000 | ||||||||||||
Current amount payable of tax receivable agreement | 7,000,000 | ||||||||||||
Revenue share of gross administrative fees collected, percent | 30.00% | ||||||||||||
Member Owners | Class B Common Stock | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Common stock issued | 112,607,832 | ||||||||||||
Voting power as a percent | 78.00% | ||||||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Common stock, par value (usd per share) | $0.00 | ||||||||||||
Common stock, shares issued | 112,607,832 | 112,607,832 | 112,607,832 | ||||||||||
Premier LP | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 78.00% | 99.00% | |||||||||||
Percent change in allocation of income | 22.00% | 1.00% | |||||||||||
Percent of common units owned | 22.00% | 22.00% | |||||||||||
Premier LP | Class A Common Stock | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Purchases of Class B common units from member owners | -247,700,000 | ||||||||||||
Premier LP | Member Owners | |||||||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Revenue share of gross administrative fees collected, percent | 30.00% | ||||||||||||
Premier Healthcare Solutions, Inc. | |||||||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
PHSI common stock contributed | 76,900,000 | ||||||||||||
Premier Healthcare Solutions, Inc. | Class B Common Stock | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Purchases of Class B common units from member owners | -30,100,000 | ||||||||||||
Subsidiaries | |||||||||||||
Reorganization [Line Items] | |||||||||||||
Allocation of investment income percent | 5.00% | ||||||||||||
Additional Paid-In Capital | |||||||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Increase in deferred tax assets | 96,900,000 | ||||||||||||
Proceeds from issuance initial public offering, net of expenses | 821,700,000 | ||||||||||||
Prepaid offering expenses | 5,900,000 | ||||||||||||
Difference between consideration paid to acquire Class A and Class B common units and adjustment to carrying value of noncontrolling interest | 767,500,000 | ||||||||||||
Additional Paid-In Capital | Class A Common Stock | |||||||||||||
Stockholders' deficit: | |||||||||||||
Common stock | 300,000 | ||||||||||||
Additional Paid-In Capital | Member Owners | |||||||||||||
Schedule of Impact of Consummation of IPO and Reorganization Parenthetical | |||||||||||||
Cumulative adjustment related to tax receivable agreement | 186,100,000 | ||||||||||||
Increase in deferred tax assets | $283,000,000 | ||||||||||||
[1] | Reflects net effect on cash and cash equivalents of the receipt of gross proceeds from the IPO of $874.1 million (with an IPO price of $27.00 per share of Class A common stock) and the purchase of units from the member owners described above, as follows (in thousands): Gross proceeds from the IPO$874,118Underwriting discounts, commissions and other expenses(52,447)Purchases of Class B common units from the member owners(543,857)Net cash proceeds from IPO$277,814 | ||||||||||||
[2] | Reflects the reduction of prepaid expenses related to the IPO, with an offset to the proceeds of the IPO in additional paid-in capital. | ||||||||||||
[3] | Premier LP has made an election under Section 754 of the Internal Revenue Code of 1986, as amended, or the Code, and comparable elections under state and local tax law, such that the initial sale of Class B common units by PHSI and the member owners resulted in adjustments to the tax basis of the assets of Premier LP. These increases in tax basis increase (for tax purposes) the depreciation and amortization deductions by Premier LP, and therefore, reduce the amount of income tax that Premier would otherwise be required to pay in the future. In connection with the Reorganization and IPO, Premier has entered into a tax receivable agreement with the member owners which became effective upon the completion of the Reorganization and IPO, pursuant to which Premier agreed to pay to the member owners, generally over a 15-year period (under current law), 85% of the amount of cash savings, if any, in U.S. federal, foreign, state and local and franchise income tax that Premier actually realizes (or is deemed to realize, in the case of payments required to be made upon certain occurrences under such tax receivable agreement) as a result of the increases in tax basis resulting from the sale or exchange of Class B common units by the member owners. The unaudited adjustments give effect to the Section 754 election and the tax receivable agreement based on the following assumptions: b"The increase in deferred tax assets representing the income tax effects of the increases in the tax basis as a result of Premier LP's election under Section 754 of the Code in connection with the initial sale of Class B common units described above. This adjustment is calculated based on an effective income tax rate for Premier of approximately 39%, which includes a provision for U.S. federal income taxes and assumes (i) Premier's statutory rates apportioned to each state and local tax jurisdiction, (ii) that there are no material changes in the relevant tax law, and (iii) that Premier earns sufficient taxable income in each year to realize the full tax benefit of the amortization of its assets. b"Premier determined the adjustments in connection with the Section 754 election by first calculating the excess of each selling member owner's and PHSI's selling price over such person's share of Premier LP's tax basis in its assets attributable to the Class B common units sold to Premier. Premier then allocated the aggregate excess among Premier LP's assets following applicable tax regulations governing adjustments that result from the Section 754 election. Premier determined each selling member owner's share of the tax basis in Premier LP's assets attributable to the Class B common units sold to Premier by multiplying the member owner's tax capital account balance as of the date of sale as maintained in Premier LP's books and records by a fraction, the numerator of which was the number of Class B common units sold to Premier, and the denominator of which was the number of Class B common units held by the selling member owner immediately prior to the sale. For purposes of the calculation, the selling price per Class B common unit was equal to the net price paid per share of the Class A common stock by the underwriters to Premier in the IPO. The adjustments increased Premier LP's basis in its assets (for tax purposes), and Premier calculates the amount of depreciation, amortization and other deductions to which it is entitled as a result of these adjustments. Premier then calculates Premier's tax liability with and without the deductions attributable to these adjustments, assuming that Premier earns sufficient taxable income in each year to realize the full benefit of the deductions. Premier computed the estimated tax benefit attributable to the election as the excess of Premier's tax liability as so computed without the deductions over Premier's tax liability as so computed with the deductions. Additionally, the tax receivable agreement payments give rise to adjustments that result in Premier LP becoming entitled to additional deductions, and the calculation of Premier's liability under the tax receivable agreement take these adjustments and additional resulting deductions into account. b"Premier LP's election under Section 754 of the Code was at the discretion of Premier LP and is not subject to review or approval by the IRS or other tax authorities. The computation of the adjustments resulting from the Section 754 election and Premier's tax liability is subject to audit by the IRS and other tax authorities in the same manner as all other items reported on income tax returns. b"Upon the Reorganization and IPO, the cumulative adjustments of $186.1 million, of which $7.0 million was expected to be paid over the next 12 months, and was reflected as a current liability with the remaining balance classified as a long-term liability, to reflect a liability equal to 85% of the estimated realizable tax benefit resulting from the increase in tax basis due to Premier LP's Section 754 election in connection with the initial sale by the member owners of the Class B common units described above as an increase to payable pursuant to the tax receivable agreement. b"Deferred tax assets are measured based on the difference in tax basis of Premier's investment in Premier LP as compared to its GAAP carrying value and include the change in allocations in connection with the Reorganization. The adjustments related to Premier LP's Section 754 election described above are a component of Premier's tax basis in Premier LP. Pursuant to the terms of the Exchange Agreement, the member owners and new limited partners admitted to Premier LP following the completion of the IPO may subsequently exchange Class B common units in Premier LP for shares of Premier's Class A common stock, cash or a combination of both. Any subsequent exchanges of Class B common units for shares of Premier's Class A common stock pursuant to the Exchange Agreement may result in increases in the tax basis of the tangible and intangible assets of Premier LP (85% of the realized tax benefits from which will be due to the limited partners and recorded as an additional payable pursuant to the tax receivable agreement) that otherwise would not have been available. These subsequent exchanges have not been reflected in the consolidated financial statements. | ||||||||||||
[4] | Reflects the increase in the noncontrolling interest held by the limited partners in Premier L.P. resulting from the net proceeds from the IPO used to purchase Class A common units from Premier LP of $247.7 million and Class B common units from PHSI of $30.1 million, and the contribution of the common stock of PHSI in connection with the Reorganization of $76.9 million. This is offset by an adjustment of $131.0 million to reflect the approximately 78% controlling interest held by the redeemable limited partners of Premier LP subsequent to the Reorganization and IPO, which is reflected in redeemable limited partners' capital on the unaudited consolidated balance sheets. Immediately following the effective date of the LP Agreement, all of Premier LP's limited partners that approved the Reorganization received Class B common units and capital account balances in Premier LP equal to their percentage interests and capital account balances in Premier LP immediately preceding the Reorganization. Premier used a portion of the net proceeds from the IPO to purchase (i) Class A common units, (ii) Class B common units from PHSI and (iii) Class B common units from the member owners, resulting in a reduction in the noncontrolling interest attributable to the limited partners from 99% to approximately 78%. Reflects the increase in redeemable limited partners' capital of $2,575.5 million to record the balance at the redemption amount, which represents the greater of the book value or redemption amount, at the date of the Reorganization. This results in an offsetting decrease in retained earnings of $50.1 million, followed by an offsetting decrease in additional paid-in-capital of $173.7 million and with a final offsetting increase in accumulated deficit of $2,351.7 million. | ||||||||||||
[5] | Reflects (i) the exchange of the existing PHSI shares of common stock, common stock subscribed and related subscriptions receivable for Class B common units, (ii) the issuance of Class B common stock in connection with the Reorganization and (iii) the issuance of Class A common stock in connection with the IPO. | ||||||||||||
[6] | Reflects the impact of the adjustments in notes (1), (2), (3), (4) and (5) above to additional paid-in capital: b"an increase of $96.9 million due to an increase in deferred tax assets described in note (3) of $283.0 million offset by an increase in payables pursuant to the tax receivable agreement of $186.1 million; b"an increase of $821.7 million from the net proceeds from the IPO less the par value of the shares of Class A common stock sold in the IPO of $0.3 million and less prepaid offering expenses of $5.9 million; b"a decrease of $767.5 million to reflect the difference between the consideration paid to acquire the Class A common units and B common units and the adjustment to the carrying value of the noncontrolling interest described in note (4) above; andb"a decrease in the remaining balance of additional paid-in-capital related to the increase in redeemable limited partners' capital to its redemption value, as described in note (4) above. | ||||||||||||
[7] | Reflects the decrease in retained earnings and increase in accumulated deficit related to the increase in redeemable limited partners' capital to its redemption value, as described in note (4) above. |
SEGMENTS_Schedule_of_Adjusted_
SEGMENTS - Schedule of Adjusted EBITDA and Other Income Statement Information and Total Assets by Segment (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | Oct. 01, 2013 |
segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Net administrative fees | $117,959 | $108,087 | $337,157 | $353,793 | ||
Other services and support | 70,326 | 58,819 | 199,621 | 170,268 | ||
Services | 188,285 | 166,906 | 536,778 | 524,061 | ||
Products | 73,438 | 58,692 | 203,698 | 151,022 | ||
Net revenue | 261,723 | 225,598 | 740,476 | 675,083 | ||
Segment Adjusted EBITDA | 103,745 | 91,305 | 293,071 | 299,044 | ||
Depreciation & Amortization Expense | 14,091 | 10,198 | 39,705 | 29,110 | ||
Capital Expenditures | 18,653 | 13,823 | 51,064 | 39,842 | ||
Assets | 1,488,533 | 1,488,533 | 1,246,656 | 554,875 | ||
Number of reportable segments | 2 | |||||
Operating Segments | Supply Chain Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net administrative fees | 117,959 | 108,087 | 337,157 | 353,793 | ||
Other services and support | 740 | 197 | 1,192 | 504 | ||
Services | 118,699 | 108,284 | 338,349 | 354,297 | ||
Products | 73,438 | 58,692 | 203,698 | 151,022 | ||
Net revenue | 192,137 | 166,976 | 542,047 | 505,319 | ||
Segment Adjusted EBITDA | 101,600 | 91,477 | 290,210 | 302,076 | ||
Depreciation & Amortization Expense | 525 | 380 | 1,441 | 1,087 | ||
Capital Expenditures | 478 | 1,098 | 1,342 | 1,901 | ||
Assets | 415,497 | 415,497 | 373,746 | |||
Operating Segments | Performance Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 69,586 | 58,622 | 198,429 | 169,764 | ||
Segment Adjusted EBITDA | 26,166 | 20,307 | 67,717 | 54,367 | ||
Depreciation & Amortization Expense | 12,238 | 8,622 | 34,451 | 24,414 | ||
Capital Expenditures | 15,812 | 12,267 | 45,143 | 37,344 | ||
Assets | 460,097 | 460,097 | 266,567 | |||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 0 | 0 | 0 | 0 | ||
Segment Adjusted EBITDA | -24,021 | -20,479 | -64,856 | -57,399 | ||
Depreciation & Amortization Expense | 1,328 | 1,196 | 3,813 | 3,609 | ||
Capital Expenditures | 2,363 | 458 | 4,579 | 597 | ||
Assets | $612,939 | $612,939 | $606,343 |
SEGMENTS_Reconciliation_of_Seg
SEGMENTS - Reconciliation of Segment Adjusted EBITDA to Operating Income (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | ||||
Segment Reporting Information [Line Items] | |||||||||
Segment Adjusted EBITDA | $103,745 | $91,305 | $293,071 | $299,044 | |||||
Depreciation and amortization | -11,538 | -9,396 | -33,107 | -26,952 | |||||
Amortization of purchased intangible assets | -2,554 | -802 | -6,598 | -2,158 | |||||
Merger and acquisition related expenses | -2,863 | [1] | -984 | [1] | -6,408 | [1] | -1,303 | [1] | |
Strategic and financial restructuring expenses | -2 | [2] | -733 | [2] | -1,281 | [2] | -3,614 | [2] | |
Stock-based compensation expense | -7,285 | -6,299 | -21,129 | -13,118 | |||||
Adjustment to tax receivable agreement liability | -1,073 | ||||||||
Acquisition related adjustment - deferred revenue | -3,563 | 0 | -9,224 | ||||||
Equity in net income of unconsolidated affiliates | -5,197 | [3] | -3,566 | [3] | -14,812 | [3] | -12,171 | [3] | |
Deferred compensation plan expense | -759 | 0 | 209 | 0 | |||||
Operating income | 68,911 | 69,525 | 200,721 | 239,728 | |||||
Equity in net income of unconsolidated affiliates | 5,197 | [3] | 3,566 | [3] | 14,812 | [3] | 12,171 | [3] | |
Interest and investment income, net | 204 | 400 | 517 | 641 | |||||
(Loss) gain on investment | -1,000 | 37,850 | -1,000 | 37,850 | |||||
Other income (expense), net | 743 | 52 | -219 | 56 | |||||
Income before income taxes | $74,055 | $111,393 | $214,831 | $290,446 | |||||
Innovatix | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | 50.00% | ||||||
Supply Chain Services | Innovatix | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | |||||||
[1] | Represents legal, accounting and other expenses related to acquisition activities. | ||||||||
[2] | Represents legal, accounting and other expenses directly related to strategic and financial restructuring expenses. | ||||||||
[3] | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. |
GOODWILL_AND_INTANGIBLE_ASSETS2
GOODWILL AND INTANGIBLE ASSETS, NET - Intangible Assets (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 |
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of intangible assets | 5 years 9 months 9 days | ||||
Identifiable intangible assets acquired | $68,107 | $68,107 | $31,157 | ||
Accumulated amortization | -26,898 | -26,898 | -20,302 | ||
Total identifiable intangible assets acquired, net | 41,209 | 41,209 | 10,855 | ||
Amortization expense of intangible assets | 2,554 | 802 | 6,598 | 2,158 | |
Technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of intangible assets | 5 years 0 months | ||||
Identifiable intangible assets acquired | 45,087 | 45,087 | 20,257 | ||
Member relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of intangible assets | 8 years 3 months 20 days | ||||
Identifiable intangible assets acquired | 16,380 | 16,380 | 6,830 | ||
Non-compete agreements | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of intangible assets | 3 years 0 months 0 days | ||||
Identifiable intangible assets acquired | 80 | 80 | 80 | ||
Trade names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Weighted average useful life of intangible assets | 4 years 11 months 0 days | ||||
Identifiable intangible assets acquired | $6,560 | $6,560 | $3,990 |
LINES_OF_CREDIT_Details
LINES OF CREDIT (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | ||||||
Feb. 02, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Aug. 17, 2012 | Aug. 29, 2014 | Jun. 30, 2014 | Jun. 24, 2014 | Jan. 30, 2014 | Aug. 02, 2013 | |
Line of Credit Facility [Line Items] | |||||||||
Business acquisition, percentage of voting interest acquired | 100.00% | ||||||||
Repayment of revolving line of credit | $14,200,000 | $14,715,000 | $0 | ||||||
Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 750,000,000 | ||||||||
Additional borrowing capacity | 250,000,000 | ||||||||
Basis spread on variable rate | 3.38% | ||||||||
Commitment fee, percent | 0.13% | ||||||||
Maximum leverage ratio | 3 | ||||||||
Minimum interest coverage ratio | 3 | ||||||||
Indebtedness or guarantee threshold | 30,000,000 | ||||||||
Judgment default threshold | 30,000,000 | ||||||||
Amount outstanding | 0 | 0 | |||||||
Revolving Credit Facility | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit, commitment fee percentage | 0.13% | ||||||||
Revolving Credit Facility | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Line of credit, commitment fee percentage | 0.25% | ||||||||
Letter of Credit | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 25,000,000 | ||||||||
Swingline Loan | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 75,000,000 | ||||||||
S2S Global | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Remaining ownership interest acquired, percentage | 40.00% | ||||||||
S2S Global | Revolving Credit Facility | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Maximum borrowing capacity | 10,000,000 | 20,000,000 | 15,000,000 | ||||||
Amount outstanding | 13,700,000 | ||||||||
Business acquisition, percentage of voting interest acquired | 60.00% | ||||||||
Line of credit term | 1 year | ||||||||
Accordion feature, additional borrowing capacity | 5,000,000 | ||||||||
Repayment of revolving line of credit | $14,200,000 | ||||||||
S2S Global | Revolving Credit Facility | Prime Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.25% | ||||||||
S2S Global | Revolving Credit Facility | LIBOR | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.25% | ||||||||
Base Rate Loans | Revolving Credit Facility | Base Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Variable rate basis | Base Rate | ||||||||
Base Rate Loans | Revolving Credit Facility | Prime Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Variable rate basis | prime rate | ||||||||
Base Rate Loans | Revolving Credit Facility | LIBOR | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Variable rate basis | one-month LIBOR | ||||||||
Basis spread on variable rate | 1.00% | ||||||||
Base Rate Loans | Revolving Credit Facility | Federal Funds Effective Rate | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Variable rate basis | federal funds effective rate | ||||||||
Basis spread on variable rate | 0.50% | ||||||||
Base Rate Loans | Revolving Credit Facility | Applicable Margin | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.13% | ||||||||
Base Rate Loans | Revolving Credit Facility | Applicable Margin | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 0.75% | ||||||||
Eurodollar Rate Loans | Revolving Credit Facility | Applicable Margin | Minimum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.13% | ||||||||
Eurodollar Rate Loans | Revolving Credit Facility | Applicable Margin | Maximum | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Basis spread on variable rate | 1.75% | ||||||||
Eurodollar Rate Loans | Revolving Credit Facility | Eurodollar | |||||||||
Line of Credit Facility [Line Items] | |||||||||
Variable rate basis | three-month Eurodollar Rate | ||||||||
Basis spread on variable rate | 1.40% |
NOTES_PAYABLE_Narrative_Detail
NOTES PAYABLE (Narrative) (Details) (Notes Payable, USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Debt Instrument [Line Items] | ||
Long-term debt | $20,364 | |
Member Owners | ||
Debt Instrument [Line Items] | ||
Long-term debt | 20,400 | 20,000 |
Current Portion of Notes Payable | Member Owners | ||
Debt Instrument [Line Items] | ||
Long-term debt | 4,400 | 4,000 |
Notes Payable, Less Current Portion | Member Owners | ||
Debt Instrument [Line Items] | ||
Long-term debt | $16,000 | $15,800 |
NOTES_PAYABLE_Schedule_of_Prin
NOTES PAYABLE - Schedule of Principal Payments of Notes Payable (Details) (Notes Payable, USD $) | Mar. 31, 2015 |
In Thousands, unless otherwise specified | |
Notes Payable | |
Notes Payable, Fiscal Year Maturity [Abstract] | |
2015 | $4,393 |
2016 | 4,609 |
2017 | 8,122 |
2018 | 1,194 |
2019 | 2,046 |
Thereafter | 0 |
Total principal payments | $20,364 |
FAIR_VALUE_MEASUREMENTS_Schedu
FAIR VALUE MEASUREMENTS (Schedule of Assets at Fair Value on a Recurring Basis) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Assets, Fair Value Disclosure [Abstract] | ||
Corporate debt securities | $347,696 | $408,619 |
Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 30,804 | 64,207 |
Corporate debt securities | 185,262 | 166,452 |
Deferred compensation plan assets | 38,604 | 33,256 |
Total assets | 417,104 | 506,082 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 30,804 | 64,207 |
Corporate debt securities | 0 | 0 |
Deferred compensation plan assets | 38,604 | 33,256 |
Total assets | 69,408 | 97,463 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 0 | 0 |
Corporate debt securities | 185,262 | 166,452 |
Deferred compensation plan assets | 0 | 0 |
Total assets | 347,696 | 408,619 |
Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Cash equivalents | 0 | 0 |
Corporate debt securities | 0 | 0 |
Deferred compensation plan assets | 0 | 0 |
Total assets | 0 | 0 |
Commercial paper | ||
Assets, Fair Value Disclosure [Abstract] | ||
Corporate debt securities | 7,140 | 33,572 |
Commercial paper | Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 7,140 | 33,572 |
Commercial paper | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Commercial paper | Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 7,140 | 33,572 |
Commercial paper | Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 0 | 0 |
U.S. government debt securities | Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 91,454 | 116,744 |
U.S. government debt securities | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 0 | 0 |
U.S. government debt securities | Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 91,454 | 116,744 |
U.S. government debt securities | Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 0 | 0 |
Asset-backed securities | ||
Assets, Fair Value Disclosure [Abstract] | ||
Corporate debt securities | 63,840 | 91,851 |
Asset-backed securities | Recurring | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 63,840 | 91,851 |
Asset-backed securities | Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 0 | |
Asset-backed securities | Recurring | Significant Other Observable Inputs (Level 2) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | 63,840 | 91,851 |
Asset-backed securities | Recurring | Significant Unobservable Inputs (Level 3) | ||
Assets, Fair Value Disclosure [Abstract] | ||
Available-for-sale securities | $0 | $0 |
FAIR_VALUE_MEASUREMENTS_Narrat
FAIR VALUE MEASUREMENTS (Narrative) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | $38,604,000 | $33,256,000 |
Recurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 0 | 0 |
Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable difference between fair value and carrying value | 600,000 | 700,000 |
Notes Payable | Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value inputs, market interest rate | 1.50% | 1.50% |
Reported value measurement | Recurring | Prepaid expenses and other current assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 2,600,000 | 300,000 |
Reported value measurement | Recurring | Other Assets | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | $36,000,000 | $32,900,000 |
MARKETABLE_SECURITIES_Details
MARKETABLE SECURITIES (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $347,633 | $408,429 |
Gross Unrealized Gains | 136 | 239 |
Gross Unrealized Losses | -73 | -49 |
Fair Market Value | 347,696 | 408,619 |
Commercial paper | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 7,134 | 33,561 |
Gross Unrealized Gains | 6 | 12 |
Gross Unrealized Losses | 0 | -1 |
Fair Market Value | 7,140 | 33,572 |
U.S. government debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 91,413 | 116,620 |
Gross Unrealized Gains | 51 | 124 |
Gross Unrealized Losses | -10 | 0 |
Fair Market Value | 91,454 | 116,744 |
Corporate debt securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 185,246 | 166,424 |
Gross Unrealized Gains | 62 | 69 |
Gross Unrealized Losses | -46 | -41 |
Fair Market Value | 185,262 | 166,452 |
Asset-backed securities | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 63,840 | 91,824 |
Gross Unrealized Gains | 17 | 34 |
Gross Unrealized Losses | -17 | -7 |
Fair Market Value | $63,840 | $91,851 |
MARKETABLE_SECURITIES_Maturiti
MARKETABLE SECURITIES (Maturities) (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Cost | ||
Due in one year or less | $192,726 | |
Due after one year through five years | 154,907 | |
Amortized Cost | 347,633 | 408,429 |
Fair Market Value | ||
Due in one year or less | 192,752 | |
Due after one year through five years | 154,944 | |
Corporate debt securities | $347,696 | $408,619 |
INVESTMENTS_Details
INVESTMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | |||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity in net income of unconsolidated affiliates | $5,197,000 | [1] | $3,566,000 | [1] | $14,812,000 | [1] | $12,171,000 | [1] | |
Innovatix | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | 50.00% | ||||||
Investments | 7,900,000 | 7,900,000 | 6,900,000 | ||||||
Premier Supply Chain Improvement, Inc | Innovatix | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | |||||||
Other Income, Net | Premier Supply Chain Improvement, Inc | Innovatix | |||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||
Equity in net income of unconsolidated affiliates | $5,200,000 | $3,600,000 | $14,800,000 | $12,200,000 | |||||
[1] | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2015 | Sep. 30, 2014 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | |
Income Tax Contingency [Line Items] | ||||||
Income tax expense | $2,026,000 | $9,413,000 | $12,107,000 | $24,461,000 | ||
Effective tax rate (percent) | 2.70% | 8.50% | 5.60% | 8.40% | ||
Net deferred tax asset | 361,600,000 | 361,600,000 | 296,600,000 | |||
Decrease in deferred tax assets | 65,000,000 | |||||
Deferred tax assets, net, current | 70,600,000 | |||||
Deferred taxes | 300,000 | |||||
Tax receivable agreement liabilities | 244,500,000 | 244,500,000 | 192,300,000 | |||
Tax savings receivable in connections with tax receivable agreement | 85.00% | 85.00% | ||||
Increase to payable pursuant to tax receivable agreement | 52,200,000 | |||||
Payable pursuant to tax receivable agreement, exchange agreement | 53,800,000 | |||||
Reduction in tax receivable agreement liabilities | 1,600,000 | |||||
Reduction to selling, general and administrative expenses | 1,600,000 | |||||
Aperek and TheraDoc | ||||||
Income Tax Contingency [Line Items] | ||||||
Deferred tax liabilities recorded | $5,300,000 |
REDEEMABLE_LIMITED_PARTNERS_CA2
REDEEMABLE LIMITED PARTNERS' CAPITAL - Changes in Redeemable Limited Partners' Capital - (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | ||||||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Nov. 26, 2014 | Aug. 28, 2014 | Dec. 31, 2013 | Oct. 01, 2013 | ||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Redeemable limited partners' capital, beginning balance | $3,244,674 | $2,799,121 | [1] | $2,799,121 | [1] | |||||
Exchange of Class B common units for Class A common stock by member owners | -164,655 | 0 | ||||||||
Adjustment to redemption amount | -387,062 | 495,714 | -811,969 | -3,224,098 | ||||||
Redeemable limited partners' capital, ending balance | 3,995,025 | 3,995,025 | 2,799,121 | [1] | ||||||
Limited Partner | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Redeemable limited partners' capital, beginning balance | 3,244,674 | |||||||||
Distributions applied to receivables from limited partners | 4,884 | |||||||||
Redemption of limited partners | -2,046 | |||||||||
Net income attributable to Premier LP | 170,135 | |||||||||
Distributions to limited partners | -69,841 | -22,700 | -22,400 | -214,500 | ||||||
Net unrealized loss on marketable securities | -95 | |||||||||
Adjustment to redemption amount | 495,700 | 811,969 | -3,224,000 | |||||||
Redeemable limited partners' capital, ending balance | 3,995,025 | 3,995,025 | ||||||||
Limited Partner | Receivables From Limited Partners | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Redeemable limited partners' capital, beginning balance | -18,139 | |||||||||
Distributions applied to receivables from limited partners | 4,884 | |||||||||
Redemption of limited partners | 0 | |||||||||
Net income attributable to Premier LP | 0 | |||||||||
Distributions to limited partners | 0 | |||||||||
Net unrealized loss on marketable securities | 0 | |||||||||
Adjustment to redemption amount | 0 | |||||||||
Redeemable limited partners' capital, ending balance | -13,255 | -13,255 | ||||||||
Limited Partner | Redeemable Limited Partners' Capital | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Redeemable limited partners' capital, beginning balance | 3,262,666 | |||||||||
Distributions applied to receivables from limited partners | 0 | |||||||||
Redemption of limited partners | -2,046 | |||||||||
Net income attributable to Premier LP | 170,135 | |||||||||
Distributions to limited partners | -69,841 | |||||||||
Net unrealized loss on marketable securities | 0 | |||||||||
Exchange of Class B common units for Class A common stock by member owners | -164,655 | |||||||||
Adjustment to redemption amount | 811,969 | |||||||||
Redeemable limited partners' capital, ending balance | 4,008,228 | 4,008,228 | ||||||||
Limited Partner | Accumulated Other Comprehensive Income (Loss) | ||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||
Redeemable limited partners' capital, beginning balance | 147 | |||||||||
Distributions applied to receivables from limited partners | 0 | |||||||||
Redemption of limited partners | 0 | |||||||||
Net income attributable to Premier LP | 0 | |||||||||
Distributions to limited partners | 0 | |||||||||
Net unrealized loss on marketable securities | -95 | |||||||||
Adjustment to redemption amount | 0 | |||||||||
Redeemable limited partners' capital, ending balance | $52 | $52 | ||||||||
[1] | Reflects the increase in the noncontrolling interest held by the limited partners in Premier L.P. resulting from the net proceeds from the IPO used to purchase Class A common units from Premier LP of $247.7 million and Class B common units from PHSI of $30.1 million, and the contribution of the common stock of PHSI in connection with the Reorganization of $76.9 million. This is offset by an adjustment of $131.0 million to reflect the approximately 78% controlling interest held by the redeemable limited partners of Premier LP subsequent to the Reorganization and IPO, which is reflected in redeemable limited partners' capital on the unaudited consolidated balance sheets. Immediately following the effective date of the LP Agreement, all of Premier LP's limited partners that approved the Reorganization received Class B common units and capital account balances in Premier LP equal to their percentage interests and capital account balances in Premier LP immediately preceding the Reorganization. Premier used a portion of the net proceeds from the IPO to purchase (i) Class A common units, (ii) Class B common units from PHSI and (iii) Class B common units from the member owners, resulting in a reduction in the noncontrolling interest attributable to the limited partners from 99% to approximately 78%. Reflects the increase in redeemable limited partners' capital of $2,575.5 million to record the balance at the redemption amount, which represents the greater of the book value or redemption amount, at the date of the Reorganization. This results in an offsetting decrease in retained earnings of $50.1 million, followed by an offsetting decrease in additional paid-in-capital of $173.7 million and with a final offsetting increase in accumulated deficit of $2,351.7 million. |
REEDEMABLE_LIMITED_PARTNERS_CA
REEDEMABLE LIMITED PARTNERS' CAPITAL (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||
Oct. 01, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Nov. 26, 2014 | Aug. 28, 2014 | Feb. 02, 2015 | Oct. 31, 2014 | Jun. 30, 2014 | |
Temporary Equity [Line Items] | ||||||||||||
Limited partnership, limited partners ownership percentage | 74.00% | 99.00% | ||||||||||
Portion of limited partners' capital account initial allocation subject to exchange annually | 14.29% | |||||||||||
Adjustment of redeemable limited partners' capital to redemption amount | $2,575,500,000 | $811,969,000 | $3,224,098,000 | |||||||||
Exchange of Class B common units for Class A common stock by member owners | 164,655,000 | 0 | ||||||||||
Payments of distribution | 72,600,000 | 208,300,000 | 68,800,000 | 298,388,000 | ||||||||
Limited partners' distribution payable | 23,398,000 | 23,398,000 | 22,351,000 | |||||||||
Limited Partner | ||||||||||||
Temporary Equity [Line Items] | ||||||||||||
Interest bearing notes receivable | 0 | 0 | ||||||||||
Number of limited partners withdrawing from partnership | 4 | |||||||||||
Notes payable issued to related party | 2,000,000 | 2,000,000 | ||||||||||
Period of payment of partnership interest upon withdrawal from partnership | 5 years | |||||||||||
Distributions to limited partners | 214,500,000 | 69,841,000 | 22,700,000 | 22,400,000 | ||||||||
Limited partners' distribution payable | 23,700,000 | 23,700,000 | 22,351,000 | |||||||||
Redeemable Limited Partners' Capital | Limited Partner | ||||||||||||
Temporary Equity [Line Items] | ||||||||||||
Exchange of Class B common units for Class A common stock by member owners | 164,655,000 | |||||||||||
Distributions to limited partners | 69,841,000 | |||||||||||
Limited Partner Notes Payable and Related Interest Obligations | Limited Partner | ||||||||||||
Temporary Equity [Line Items] | ||||||||||||
Distributions to limited partners | 2,800,000 | |||||||||||
Other Amounts Payable by Limited Partners | Limited Partner | ||||||||||||
Temporary Equity [Line Items] | ||||||||||||
Distributions to limited partners | $3,400,000 | |||||||||||
Class B Common Stock | Class B Common Units to Class A Common Shares | Member Owners | ||||||||||||
Temporary Equity [Line Items] | ||||||||||||
Exchange of Class B common units for Class A common stock by member owners (in shares) | 257,027 | 4,685,267 |
STOCKHOLDERS_DEFICIT_Narrative
STOCKHOLDERS' DEFICIT (Narrative) (Details) (USD $) | 9 Months Ended | ||
Mar. 31, 2015 | Jun. 30, 2014 | Oct. 01, 2013 | |
Class of Stock [Line Items] | |||
Common stock, shares issued | 0 | ||
Common stock, par value (usd per share) | $0.01 | ||
Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares issued | 37,376,985 | 32,375,390 | 32,374,751 |
Common stock, par value (usd per share) | $0.01 | $0.01 | $0.01 |
Number of votes per share held | 1 | ||
Voting rights of common stock | one vote for each share held | ||
Class B Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares issued | 106,658,535 | 112,510,905 | 112,607,832 |
Common stock, par value (usd per share) | $0.00 | $0.00 | $0.00 |
Number of votes per share held | 1 | ||
Voting rights of common stock | one vote for each share held | ||
IPO | Class A Common Stock | |||
Class of Stock [Line Items] | |||
Common stock, shares issued | 37,376,985 | ||
Common stock, par value (usd per share) | $0.01 |
EARNINGS_LOSS_PER_SHARE_Narrat
EARNINGS (LOSS) PER SHARE (Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jan. 31, 2015 | Oct. 01, 2013 | Oct. 31, 2014 | Apr. 30, 2015 | Feb. 02, 2015 | Nov. 01, 2014 | 1-May-15 | ||||
Reconciliation of common shares used for basic earnings per share and diluted earnings per share | |||||||||||||||
Net (loss) income attributable to shareholders after adjustment of redeemable limited partners' capital to redemption amount | ($374,853) | $509,239 | ($781,216) | ($3,204,645) | |||||||||||
Denominator for basic income per share weighted average shares | 37,316,000 | [1] | 32,375,000 | [1] | 35,066,000 | 23,394,000 | [1] | ||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Weighted average shares and assumed conversions | 37,316,000 | [2] | 32,556,000 | [2] | 35,066,000 | [2] | 23,394,000 | [2] | |||||||
Basic (loss) earnings per share | ($10.05) | [2] | $15.73 | [2] | ($22.28) | [2] | ($136.99) | [2] | |||||||
Diluted (loss) earnings per share | ($10.05) | [2] | $15.64 | [2] | ($22.28) | [2] | ($136.99) | [2] | |||||||
Stock Option | |||||||||||||||
Reconciliation of common shares used for basic earnings per share and diluted earnings per share | |||||||||||||||
Effect of dilutive securities | 0 | [3] | 181,000 | [3] | 0 | [3] | 0 | [3] | |||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Antidilutive securities excluded from the diluted weighted average shares outstanding | 151,000 | 4,000 | |||||||||||||
Restricted Stock Units (RSUs) | |||||||||||||||
Reconciliation of common shares used for basic earnings per share and diluted earnings per share | |||||||||||||||
Effect of dilutive securities | 0 | [2],[3],[4] | 0 | [2],[3],[4] | 0 | [2],[3],[4] | 0 | [2],[3],[4] | |||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Antidilutive securities excluded from the diluted weighted average shares outstanding | 380,000 | 319,000 | 100,000 | ||||||||||||
Performance Shares | |||||||||||||||
Reconciliation of common shares used for basic earnings per share and diluted earnings per share | |||||||||||||||
Effect of dilutive securities | 0 | [2],[3],[4] | 0 | [2],[3],[4] | 0 | [2],[3],[4] | 0 | [2],[3],[4] | |||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Antidilutive securities excluded from the diluted weighted average shares outstanding | 617,000 | 522,000 | |||||||||||||
Class A Common Stock | |||||||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Common stock issued | 32,374,751 | 257,027 | 32,374,751 | ||||||||||||
Shares outstanding | 37,353,364 | 37,075,734 | |||||||||||||
Class B Common Stock | |||||||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Common stock issued | 4,685,267 | ||||||||||||||
Stock surrendered by member owners and retired by Company | 257,027 | ||||||||||||||
Shares outstanding | 106,658,535 | 107,181,272 | |||||||||||||
Member Owners | Class B Common Stock | |||||||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Common stock issued | 112,607,832 | ||||||||||||||
Member Owners | Class B Common Stock | Class B Common Units to Class A Common Shares | |||||||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Antidilutive securities excluded from the diluted weighted average shares outstanding | 106,659,000 | ||||||||||||||
Subsequent Event | Class A Common Stock | |||||||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Common stock issued | 275,983 | ||||||||||||||
Shares outstanding | 37,662,059 | ||||||||||||||
Subsequent Event | Class B Common Stock | |||||||||||||||
Denominator for diluted earnings (loss) per share-adjusted: | |||||||||||||||
Stock surrendered by member owners and retired by Company | 275,983 | ||||||||||||||
Shares outstanding | 106,382,552 | ||||||||||||||
[1] | Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested restricted stock units and non-vested performance share awards for the three and nine months ended March 31, 2015 and 2014. | ||||||||||||||
[2] | The weighted average shares calculation is based on a combination of the PHSI historical common shares outstanding for the three months ended September 30, 2013 and the Premier, Inc. common shares outstanding for the period from September 25, 2013 to March 31, 2014. | ||||||||||||||
[3] | For the three and nine months ended March 31, 2015, the effect of 151, 380 and 617 stock options, restricted stock units, and performance share awards, respectively, and 4, 319, and 522 stock options, restricted stock units, and performance share awards, respectively, were excluded from the diluted weighted average shares outstanding due to the net loss sustained for the respective periods. Additionally, the effect of 100 restricted stock units for the nine months ended March 31, 2014 were also excluded from the diluted weighted average shares outstanding due to the net loss sustained for the period. Further, the 106,659 Class B common units exchangeable for Class A common shares was excluded from the dilutive weighted average shares outstanding because inclusion thereof would have been anti-dilutive for the periods presented. | ||||||||||||||
[4] | The weighted average shares calculation is based on the Premier, Inc. common shares outstanding for the three months ended March 31, 2015 and 2014 and the nine months ended March 31, 2015. |
STOCKBASED_COMPENSATION_Narrat
STOCK-BASED COMPENSATION - (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 01, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $7,285,000 | $6,299,000 | $21,129,000 | $13,118,000 | |
Deferred taxes | 2,800,000 | -2,400,000 | 8,000,000 | -5,000,000 | |
Estimated effective income tax rate | 39.00% | 38.00% | |||
Unrecognized stock-based compensation related to non-vested awards | $45,600,000 | $45,600,000 | |||
Amortization period of unrecognized stock-based compensation | 1 year 8 months 5 days | ||||
2013 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number common stock awards authorized | 11,260,783 | 11,260,783 | |||
Shares available for grant | 6,705,954 | 6,705,954 |
STOCKBASED_COMPENSATION_Restri
STOCK-BASED COMPENSATION - Restricted Stock and Performance Shares (Details) (2013 Equity Incentive Plan, USD $) | 9 Months Ended |
Mar. 31, 2015 | |
Restricted Stock Units (RSUs) | |
Number of Shares (in shares): | |
Outstanding, beginning balance | 717,304 |
Granted | 158,794 |
Vested | -22,426 |
Forfeited | -27,461 |
Outstanding, ending balance | 826,211 |
Weighted Average Fair Value at Grant Date (usd per share): | |
Outstanding, beginning balance (in shares) | $27.29 |
Granted (in shares) | $31.80 |
Vested (in shares) | $28.17 |
Forfeited (in shares) | $27.61 |
Outstanding, ending balance (in shares) | $28.12 |
Award, vesting period | 3 years |
Performance Shares | |
Number of Shares (in shares): | |
Outstanding, beginning balance | 827,174 |
Granted | 274,863 |
Vested | 0 |
Forfeited | -10,595 |
Outstanding, ending balance | 1,091,442 |
Weighted Average Fair Value at Grant Date (usd per share): | |
Outstanding, beginning balance (in shares) | $27 |
Granted (in shares) | $31.67 |
Vested (in shares) | $0 |
Forfeited (in shares) | $28.21 |
Outstanding, ending balance (in shares) | $28.17 |
Award, vesting period | 3 years |
STOCKBASED_COMPENSATION_Stock_
STOCK-BASED COMPENSATION - Stock Options (Details) (USD $) | 9 Months Ended |
Mar. 31, 2015 | |
Number of Options (in shares): | |
Outstanding and exercisable | 651,507 |
Weighted Average Fair Value at Grant Date (usd per share): | |
Outstanding and exercisable (in shares) | $27 |
2013 Equity Incentive Plan | |
Number of Options (in shares): | |
Outstanding, beginning balance | 2,047,484 |
Granted | 649,556 |
Exercised | -39,835 |
Forfeited | -17,013 |
Outstanding, ending balance | 2,640,192 |
Weighted Average Fair Value at Grant Date (usd per share): | |
Outstanding, beginning balance (in shares) | $27 |
Granted (in shares) | $31.68 |
Exercised (in shares) | $27 |
Forfeited (in shares) | $28.72 |
Outstanding, ending balance (in shares) | $28.14 |
Stock Option | 2013 Equity Incentive Plan | |
Weighted Average Fair Value at Grant Date (usd per share): | |
Options, expiration period | 12 months |
Options, vesting period | 10 years |
STOCKBASED_COMPENSATION_Key_As
STOCK-BASED COMPENSATION - Key Assumptions (Details) (USD $) | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | ||
Key assumptions used for determining the fair value of stock options granted | |||
Weighted average option grant date fair value | $11.46 | ||
Minimum | |||
Key assumptions used for determining the fair value of stock options granted | |||
Weighted average option grant date fair value | 12.82 | ||
Maximum | |||
Key assumptions used for determining the fair value of stock options granted | |||
Weighted average option grant date fair value | 13 | ||
2013 Equity Incentive Plan | Stock Option | |||
Key assumptions used for determining the fair value of stock options granted | |||
Expected life | 6 years | 6 years | [1] |
Expected dividend | $0 | [2] | |
Expected volatility | 42.00% | [3] | |
Risk-free interest rate | 1.71% | [4] | |
2013 Equity Incentive Plan | Stock Option | Minimum | |||
Key assumptions used for determining the fair value of stock options granted | |||
Expected volatility | 36.90% | ||
Risk-free interest rate | 1.69% | ||
Term of United States constant maturity market yield | 5 years | ||
2013 Equity Incentive Plan | Stock Option | Maximum | |||
Key assumptions used for determining the fair value of stock options granted | |||
Expected volatility | 39.50% | ||
Risk-free interest rate | 1.84% | ||
Term of United States constant maturity market yield | 7 years | ||
[1] | 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 Inc.'s employees. | ||
[2] | No dividends are expected to be paid over the contractual term of the stock options granted, resulting in the use of a zero expected dividend rate. | ||
[3] | The expected volatility rate is based on the observed historical volatilities of comparable companies. | ||
[4] | The risk-free interest rate was interpolated from the five-year and seven-year United States constant maturity market yield as of the date of the grant. |
RELATED_PARTY_TRANSATIONS_Narr
RELATED PARTY TRANSATIONS ( Narrative) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Oct. 01, 2013 | Jun. 30, 2014 | Dec. 31, 2013 | |||||
Related Party Transaction [Line Items] | |||||||||||
Due from related parties | $712,000 | $712,000 | $1,228,000 | ||||||||
Income from equity method investments | 5,197,000 | [1] | 3,566,000 | [1] | 14,812,000 | [1] | 12,171,000 | [1] | |||
Revenue share obligations | 56,076,000 | 56,076,000 | 56,531,000 | ||||||||
Limited partners' distribution payable | 23,398,000 | 23,398,000 | 22,351,000 | ||||||||
Innovatix | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | 50.00% | ||||||||
GYNHA | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Net administrative fees revenue | 14,600,000 | 14,200,000 | |||||||||
Revenue share obligations | 6,200,000 | 6,200,000 | |||||||||
Limited partners' distribution payable | 2,900,000 | 2,900,000 | |||||||||
Member Owners | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue share of gross administrative fees collected, percent | 30.00% | ||||||||||
AEIX | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Maximum annual management fee revenue | 500,000 | 500,000 | |||||||||
AEIX | Cost Reimbursement | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | 1,300,000 | 1,200,000 | 3,600,000 | 2,300,000 | |||||||
AEIX | Administrative Fee Revenue | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | 100,000 | 500,000 | 400,000 | ||||||||
Due from related parties | 400,000 | 400,000 | 600,000 | ||||||||
Premier Healthcare Solutions, Inc. | Innovatix | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | 9,500,000 | 8,600,000 | 27,400,000 | 25,300,000 | |||||||
Premier Healthcare Solutions, Inc. | Innovatix | Accounts Payable and Accrued Expenses | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue share obligations | 3,000,000 | 3,000,000 | 3,700,000 | ||||||||
Premier LP | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 78.00% | 99.00% | |||||||||
Premier LP | GYNHA | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 11.00% | 11.00% | |||||||||
Premier LP | GYNHA | Services and Support Revenue | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | 10,700,000 | 4,000,000 | 23,200,000 | 9,700,000 | |||||||
Premier LP | GYNHA | Administrative Fee Revenue | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue from related parties | 44,200,000 | 46,200,000 | |||||||||
Due from related parties | 300,000 | 300,000 | 600,000 | ||||||||
Premier LP | Member Owners | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Revenue share of gross administrative fees collected, percent | 30.00% | ||||||||||
Premier Supply Chain Improvement, Inc | Innovatix | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Equity method investment, ownership percentage | 50.00% | 50.00% | |||||||||
Premier Supply Chain Improvement, Inc | Innovatix | Other Income, Net | |||||||||||
Related Party Transaction [Line Items] | |||||||||||
Income from equity method investments | $5,200,000 | $3,600,000 | $14,800,000 | $12,200,000 | |||||||
[1] | Represents equity in net income of unconsolidated affiliates generated by the Company's 50% ownership interest in Innovatix, LLC ("Innovatix"), a privately held limited liability company that provides group purchasing services to alternate site providers in specific classes of trade, all of which is included in the supply chain services segment. |
BUSINESS_ACQUISITIONS_Narrativ
BUSINESS ACQUISITIONS (Narrative) (Details) (USD $) | 0 Months Ended | 9 Months Ended | 0 Months Ended | |||
Feb. 02, 2015 | Oct. 01, 2013 | Mar. 31, 2015 | Mar. 31, 2014 | Sep. 01, 2014 | Aug. 29, 2014 | |
Business Acquisition [Line Items] | ||||||
Business acquisition, percentage of voting interest acquired | 100.00% | |||||
Noncontrolling Interest, Decrease from Redemptions or Purchase of Interests, Percent | 40.00% | |||||
Noncontrolling interest, decrease from redemptions or purchase of interests | $14,500,000 | $131,000,000 | $14,518,000 | |||
Repayment of revolving line of credit | 14,200,000 | 14,715,000 | 0 | |||
TheraDoc | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, percentage of voting interest acquired | 100.00% | |||||
Acquisition price | 117,000,000 | |||||
Aperek | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition price | $48,500,000 |