Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Premier, Inc. | |
Entity Central Index Key | 1,577,916 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 63,734,752 | |
Class B Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 69,601,752 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Assets | ||
Cash and cash equivalents | $ 142,422 | $ 152,386 |
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful accounts, respectively) | 182,254 | 185,874 |
Contract assets | 202,961 | 0 |
Inventory | 68,236 | 66,139 |
Prepaid expenses and other current assets | 29,675 | 23,325 |
Due from related parties | 654 | 894 |
Total current assets | 626,202 | 428,618 |
Property and equipment (net of $318,098 and $297,591 accumulated depreciation, respectively) | 211,248 | 206,693 |
Intangible assets (net of $167,273 and $153,635 accumulated amortization, respectively) | 308,477 | 322,115 |
Goodwill | 906,545 | 906,545 |
Deferred income tax assets | 301,267 | 305,624 |
Deferred compensation plan assets | 43,343 | 44,577 |
Investments in unconsolidated affiliates | 96,743 | 94,053 |
Other assets | 22,727 | 3,991 |
Total assets | 2,516,552 | 2,312,216 |
Liabilities, redeemable limited partners' capital and stockholders' deficit | ||
Accounts payable | 53,452 | 60,130 |
Accrued expenses | 87,366 | 64,257 |
Revenue share obligations | 119,578 | 78,999 |
Limited partners' distribution payable | 14,993 | 15,465 |
Accrued compensation and benefits | 33,146 | 64,112 |
Deferred revenue | 34,259 | 39,785 |
Current portion of tax receivable agreements | 18,217 | 17,925 |
Current portion of long-term debt | 101,771 | 100,250 |
Other liabilities | 7,050 | 7,959 |
Total current liabilities | 469,832 | 448,882 |
Long-term debt, less current portion | 5,447 | 6,962 |
Tax receivable agreements, less current portion | 225,090 | 237,176 |
Deferred compensation plan obligations | 43,343 | 44,577 |
Deferred tax liabilities | 21,950 | 17,569 |
Other liabilities | 68,083 | 63,704 |
Total liabilities | 833,745 | 818,870 |
Redeemable limited partners' capital | 3,638,624 | 2,920,410 |
Stockholders' deficit: | ||
Treasury stock, at cost; 4,287,471 and 4,769,556 shares, respectively | (136,397) | (150,058) |
Additional paid-in-capital | 0 | 0 |
Accumulated deficit | (1,820,000) | (1,277,581) |
Total stockholders' deficit | (1,955,817) | (1,427,064) |
Total liabilities, redeemable limited partners' capital and stockholders' deficit | 2,516,552 | 2,312,216 |
Class A Common Stock | ||
Stockholders' deficit: | ||
Common stock | 580 | 575 |
Class B Common Stock | ||
Stockholders' deficit: | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Allowance for doubtful accounts | $ 4,867 | $ 1,841 |
Accumulated depreciation | 318,098 | 297,591 |
Accumulated amortization | $ 167,273 | $ 153,635 |
Treasury stock (in shares) | 4,287,471 | 4,769,556 |
Class A Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 58,077,840 | 57,530,733 |
Common stock, shares outstanding (in shares) | 53,790,369 | 52,761,177 |
Class B Common Stock | ||
Common stock, par value (in dollars per share) | $ 0.000001 | $ 0.000001 |
Common stock, shares authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, shares issued (in shares) | 79,519,233 | 80,335,701 |
Common stock, shares outstanding (in shares) | 79,519,233 | 80,335,701 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues [Abstract] | ||
Net revenue | $ 401,546 | $ 390,564 |
Cost of revenue: | ||
Cost of revenue | 188,993 | 191,376 |
Gross profit | 212,553 | 199,188 |
Operating expenses: | ||
Selling, general and administrative | 105,870 | 114,321 |
Research and development | 340 | 489 |
Amortization of purchased intangible assets | 13,638 | 13,898 |
Operating expenses | 119,848 | 128,708 |
Operating income | 92,705 | 70,480 |
Equity in net income of unconsolidated affiliates | 2,690 | 4,252 |
Interest and investment loss, net | (688) | (1,495) |
Loss on disposal of long-lived assets | 0 | (1,320) |
Other income (expense) | (1,941) | 1,463 |
Other income, net | 61 | 2,900 |
Income before income taxes | 92,766 | 73,380 |
Income tax expense | 10,793 | 12,764 |
Net income | 81,973 | 60,616 |
Net income attributable to non-controlling interest in Premier LP | (55,113) | (44,610) |
Adjustment of redeemable limited partners' capital to redemption amount | (708,193) | 320,424 |
Net income (loss) attributable to stockholders | $ (681,333) | $ 336,430 |
Weighted average shares outstanding: | ||
Basic (in shares) | 53,221 | 52,909 |
Diluted (in shares) | 53,221 | 140,046 |
Earnings (loss) per share attributable to stockholders: | ||
Basic (in dollars per share) | $ (12.80) | $ 6.36 |
Diluted (in dollars per share) | $ (12.80) | $ 0.30 |
Net administrative fees | ||
Revenues [Abstract] | ||
Net revenue | $ 162,000 | $ 150,991 |
Other services and support | ||
Revenues [Abstract] | ||
Net revenue | 88,076 | 86,911 |
Services | ||
Revenues [Abstract] | ||
Net revenue | 250,076 | 237,902 |
Cost of revenue: | ||
Cost of revenue | 43,372 | 46,936 |
Products | ||
Revenues [Abstract] | ||
Net revenue | 151,470 | 152,662 |
Cost of revenue: | ||
Cost of revenue | $ 145,621 | $ 144,440 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 81,973 | $ 60,616 |
Less: comprehensive income attributable to non-controlling interest | (55,113) | (44,610) |
Comprehensive income attributable to stockholders | $ 26,860 | $ 16,006 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Deficit (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common StockClass A Common Stock | Common StockClass B Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit |
Beginning Balance (in shares) at Jun. 30, 2017 | 51,943 | 87,299 | ||||
Beginning Balance at Jun. 30, 2017 | $ (1,662,253) | $ 519 | $ 0 | $ 0 | $ (1,662,772) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 1,232 | 1,232 | ||||
Exchange of Class B units for Class A common stock by member owners | 42,976 | $ 13 | 42,963 | |||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | (11,452) | (11,452) | ||||
Issuance of Class A common stock under equity incentive plan (in shares) | 383 | |||||
Issuance of Class A common stock under equity incentive plan | 2,652 | $ 4 | 2,648 | |||
Stock-based compensation expense | 8,815 | 8,815 | ||||
Repurchase of vested restricted units for employee tax-withholding | (5,729) | (5,729) | ||||
Net income | 60,616 | 60,616 | ||||
Net income attributable to non-controlling interest in Premier LP | (44,610) | (44,610) | ||||
Adjustment of redeemable limited partners' capital to redemption amount | 320,424 | (37,245) | 357,669 | |||
Ending Balance (in shares) at Sep. 30, 2017 | 53,558 | 86,067 | ||||
Ending Balance at Sep. 30, 2017 | (1,288,561) | $ 536 | $ 0 | 0 | (1,289,097) | |
Increase (Decrease) in Stockholders' Equity | ||||||
Impact of change in accounting principle | 127,265 | 127,265 | ||||
Adjusted balance at July 1, 2018 | (1,299,799) | $ 575 | $ 0 | $ (150,058) | 0 | (1,150,316) |
Beginning Balance (in shares) at Jun. 30, 2018 | 52,761 | 80,336 | 4,769 | |||
Beginning Balance at Jun. 30, 2018 | (1,427,064) | $ 575 | $ 0 | $ (150,058) | 0 | (1,277,581) |
Increase (Decrease) in Stockholders' Equity | ||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 817 | 817 | 817 | |||
Exchange of Class B units for Class A common stock by member owners | 30,536 | $ 0 | $ 25,974 | 4,562 | ||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | 373 | 373 | ||||
Issuance of Class A common stock under equity incentive plan (in shares) | 547 | |||||
Issuance of Class A common stock under equity incentive plan | 7,472 | $ 5 | 7,467 | |||
Treasury stock (in shares) | (335) | (335) | ||||
Treasury stock | (12,313) | $ (12,313) | ||||
Stock-based compensation expense | 6,195 | 6,195 | ||||
Repurchase of vested restricted units for employee tax-withholding | (6,948) | (6,948) | ||||
Net income | 81,973 | 81,973 | ||||
Net income attributable to non-controlling interest in Premier LP | (55,113) | (55,113) | ||||
Adjustment of redeemable limited partners' capital to redemption amount | (708,193) | (11,649) | (696,544) | |||
Ending Balance (in shares) at Sep. 30, 2018 | 53,790 | 79,519 | 4,287 | |||
Ending Balance at Sep. 30, 2018 | $ (1,955,817) | $ 580 | $ 0 | $ (136,397) | $ 0 | $ (1,820,000) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating activities | ||
Net income | $ 81,973 | $ 60,616 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 34,145 | 30,405 |
Equity in net income of unconsolidated affiliates | (2,690) | (4,252) |
Deferred income taxes | 4,588 | 8,298 |
Stock-based compensation | 6,195 | 8,815 |
Loss on disposal of long-lived assets | 0 | 1,320 |
Changes in operating assets and liabilities: | ||
Accounts receivable, contract assets, prepaid expenses and other current assets | (41,427) | (8,748) |
Other assets | (2,235) | 1,379 |
Inventories | (2,097) | (7,178) |
Accounts payable, accrued expenses, deferred revenue and other current liabilities | (21,776) | (21,933) |
Long-term liabilities | (14) | (111) |
Loss on FFF put and call rights | 3,283 | 20 |
Other operating activities | 382 | 6,402 |
Net cash provided by operating activities | 60,327 | 75,033 |
Investing activities | ||
Purchases of property and equipment | (25,062) | (16,646) |
Net cash used in investing activities | (25,062) | (16,646) |
Financing activities | ||
Payments made on notes payable | 0 | (4,974) |
Payments on credit facility | 0 | (50,000) |
Proceeds from exercise of stock options under equity incentive plan | 7,472 | 2,652 |
Repurchase of vested restricted units for employee tax-withholding | (6,948) | (5,729) |
Distributions to limited partners of Premier LP | (15,465) | (24,951) |
Payments to limited partners of Premier LP related to tax receivable agreements | (17,975) | 0 |
Repurchase of Class A common stock (held as treasury stock) | (12,313) | 0 |
Net cash used in financing activities | (45,229) | (83,002) |
Net decrease in cash and cash equivalents | (9,964) | (24,615) |
Cash and cash equivalents at beginning of year | 152,386 | 156,735 |
Cash and cash equivalents at end of period | 142,422 | 132,120 |
Supplemental schedule of non-cash investing and financing activities: | ||
Increase (decrease) in redeemable limited partners' capital for adjustment to fair value, with offsetting increases in additional paid-in-capital and accumulated deficit | 708,193 | (320,424) |
Reduction in redeemable limited partners' capital, with offsetting increases in common stock and additional paid-in capital related to quarterly exchanges by member owners | 30,536 | 42,976 |
Reduction in redeemable limited partners' capital for limited partners' distribution payable | 14,993 | 20,752 |
Distributions utilized to reduce subscriptions, notes, interest and accounts receivable from member owners | 437 | 492 |
Net increase in deferred tax assets related to quarterly exchanges by member owners and other adjustments | 6,554 | 28,844 |
Net increase in tax receivable agreement liabilities related to quarterly exchanges by member owners and other adjustments | 6,181 | 40,296 |
Net increase (decrease) in additional paid-in capital related to quarterly exchanges by member owners and other adjustments | $ 373 | $ (11,452) |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BASIS OF PRESENTATION | (1) ORGANIZATION AND BASIS OF PRESENTATION Organization Premier, Inc. ("Premier" or the "Company") is a publicly-held, for-profit Delaware corporation 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 is a holding company with no material business operations of its own. The Company’s primary asset is its equity interest in its wholly-owned subsidiary Premier Services, LLC, a Delaware limited liability company ("Premier GP"). Premier GP is the sole general partner of Premier Healthcare Alliance, L.P. ("Premier LP"), a California limited partnership. The Company conducts substantially all of its business operations through Premier LP and its other consolidated subsidiaries. The Company, together with its subsidiaries and affiliates, is a leading healthcare performance improvement company that unites hospitals, health systems, physicians and other healthcare providers to improve and innovate in the clinical, financial and operational areas of their businesses to meet the demands of a rapidly evolving healthcare industry. 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 to help the Company's 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. See Note 16 - Segments for further information related to the Company's reportable business segments. The Supply Chain Services segment includes one of the largest healthcare group purchasing organization ("GPO") programs in the United States, and integrated pharmacy and direct sourcing activities. The Performance Services segment, through its development, integration and delivery of technology with wrap-around service offerings, includes one of the largest informatics and consulting businesses in the United States focused on healthcare providers. More specifically, the Company's software as a service ("SaaS") informatics products utilize the Company's comprehensive data set to provide actionable intelligence to its members, enabling them to benchmark, analyze and identify areas of improvement across the three main categories of cost management, quality and safety, and value-based care. While leveraging these tools, the Company also combines its consulting services and technology-enabled performance improvement collaboratives to provide a more comprehensive and holistic customer value proposition and overall experience. The Performance Services segment also includes the Company's government services and insurance management services. The Company, through Premier GP, held an approximate 40% sole general partner interest in Premier LP at both September 30, 2018 and June 30, 2018 . In addition to their equity ownership interest in the Company, our member owners held an approximate 60% limited partner interest in Premier LP at both September 30, 2018 and June 30, 2018 . Basis of Presentation and Consolidation Basis of Presentation The member owners' interest in Premier LP is reflected as redeemable limited partners' capital in the Company's accompanying Condensed Consolidated Balance Sheets, and the limited partners' proportionate share of income in Premier LP is reflected within net income attributable to non-controlling interest in Premier LP in the Company's accompanying Condensed Consolidated Statements of Income and within comprehensive income attributable to non-controlling interest in Premier LP in the Company's accompanying Condensed Consolidated Statements of Comprehensive Income. At both September 30, 2018 and June 30, 2018 , the member owners owned approximately 60% of the Company's combined Class A and Class B common stock through their ownership of Class B common stock. During the three months ended September 30, 2018 , the member owners exchanged 0.8 million Class B common units and associated Class B common shares for an equal number of Class A common shares pursuant to an exchange agreement (the "Exchange Agreement") entered into by the member owners in connection with the completion of our initial public offering on October 1, 2013. The Exchange Agreement provides each member owner 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, 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 the Company's independent Audit and Compliance Committee of the Board of Directors (the "Audit and Compliance Committee"). In connection with Class B common units exchanged for Class A common shares during the three months ended September 30, 2018 , approximately 0.8 million Class B common units were contributed to Premier LP, converted to Class A common units and remain outstanding. Correspondingly, approximately 0.8 million Class B common shares were retired during the same period. Refer to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (the " 2018 Annual Report") filed with the Securities and Exchange Commission ("SEC") on August 23, 2018 for further discussion of the Exchange Agreement. At both September 30, 2018 and June 30, 2018 , the public investors, which may include member owners that have received shares of Class A common stock in connection with previous exchanges of their Class B common units and associated Class B common shares for an equal number of Class A common shares, owned approximately 40% of the Company's outstanding common stock through their ownership of Class A common stock. The Company has corrected prior period information within the current period financial statements related to a specific component used in calculating the tax effect on Premier, Inc. net income for purposes of diluted earnings (loss) per share. Diluted earnings (loss) per share for the first quarter of fiscal 2018 was previously stated at $0.36 per share and has been corrected to $0.30 per share. The Company believes the correction is immaterial and the amount had no impact on the Company’s overall financial condition, results of operations or cash flows. Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC and in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which the Company exercised control and when applicable, entities for which the Company had a controlling financial interest or was the primary beneficiary. All intercompany transactions have been eliminated upon consolidation. Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The accompanying condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, 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 audited consolidated financial statements and related footnotes contained in the 2018 Annual Report. Variable Interest Entities Premier LP is a variable interest entity ("VIE") as the limited partners do not have the ability to exercise a substantive removal right with respect to the general partner. The Company does not hold a majority interest but, through Premier GP, has the exclusive power and authority to manage the business and affairs of Premier LP, to make all decisions with respect to driving the economic performance of Premier LP, and has both an obligation to absorb losses and a right to receive benefits. As such, the Company is the primary beneficiary of the VIE and consolidates the operations of Premier LP under the Variable Interest Model. The assets and liabilities of Premier LP at September 30, 2018 and June 30, 2018 consisted of the following (in thousands): September 30, 2018 June 30, 2018 New revenue standard (a) Previous revenue standard Assets Current $ 608,308 $ 393,863 Noncurrent 1,589,083 1,577,974 Total assets of Premier LP $ 2,197,391 $ 1,971,837 Liabilities Current $ 488,904 $ 457,172 Noncurrent 134,089 128,793 Total liabilities of Premier LP $ 622,993 $ 585,965 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Net income attributable to Premier LP during the three months ended September 30, 2018 and 2017 was as follows (in thousands): Three Months Ended September 30, 2018 2017 New revenue standard (a) Previous revenue standard Premier LP net income $ 92,262 $ 72,291 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Premier LP's cash flows for the three months ended September 30, 2018 and 2017 consisted of the following (in thousands): Three Months Ended September 30, 2018 2017 New revenue standard (a) Previous revenue standard Net cash provided by (used in): Operating activities $ 68,926 $ 88,407 Investing activities (25,062 ) (16,613 ) Financing activities (34,726 ) (100,476 ) Net increase (decrease) in cash and cash equivalents 9,138 (28,682 ) Cash and cash equivalents at beginning of year 117,741 133,451 Cash and cash equivalents at end of period $ 126,879 $ 104,769 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Use of Estimates in the Preparation of Financial Statements The preparation of the Company's condensed consolidated financial statements in accordance with GAAP 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. Significant estimates are evaluated on an ongoing basis, including estimates for net administrative fees revenue, other services and support revenue, contract assets, deferred revenue, contract costs, allowances for doubtful accounts, useful lives of property and equipment, stock-based compensation, payables under tax receivable agreements ("TRAs"), deferred tax balances including valuation allowances on deferred tax assets, uncertain tax positions, values of investments not publicly traded, projected future cash flows used in the evaluation of asset impairment, values of put and call rights, values of earn-out liabilities and the allocation of purchase prices. 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. Given the Company's use of estimates referenced above, it is important to highlight that on December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("TCJA"). The TCJA includes significant changes to the U.S. corporate income tax system, specifically reducing the U.S. federal corporate income tax rate from 35% to 21%. As changes under the TCJA are broad and complex, the Company continues to interpret the breadth of its immediate and long-term impacts. The Company notes that concurrent with the enactment of the TCJA, the SEC issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting required under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional amount on its financial statements. If a company cannot determine a provisional estimate to be included on its financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately prior to the enactment of the TCJA. With this in mind, the Company will continue to prescribe provisional relief under SAB 118 through the one year measurement period to calculate components of its deferred tax balances. While the Company is able to provide reasonable estimates of the impacts related to the TCJA, the final impact may differ from these estimates due to, among other things, changes in interpretations, assumptions, additional guidance that may be released by the Internal Revenue Service and other actions that we may take that are yet to be determined. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | (2) SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to the Company's significant accounting policies included within the 2018 Annual Report, except as described below. Recently Adopted Accounting Standards In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The guidance is intended to reduce the complexity of GAAP and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. The Company adopted this standard effective July 1, 2018. The implementation of this ASU did not have a material effect on the Company's condensed consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which is intended to provide users of financial statements with more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this standard effective July 1, 2018. The implementation of this ASU did not have a material effect on the Company's condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes nearly all existing revenue recognition guidance. 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 allowed for either full retrospective or modified retrospective adoption. In August 2015, the FASB issued an amendment in ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , to defer the effective date of the new standard for all entities by one year. The new standard, as amended, is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption as of the original effective date for public entities is permitted. In March 2016, the FASB issued another amendment in ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations , related to a third party providing goods or services to a customer. When another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself or to arrange for the good or service to be provided by a third party. If the entity provides the specific good or service itself, the entity acts as a principal. If an entity arranges for the good or service to be provided by a third party, the entity acts as an agent. The standard requires the principal to recognize revenue for the gross amount and the agent to recognize revenue for the amount of any fee or commission for which it expects to be entitled in exchange for arranging for the specified good or service to be provided. The new standard is effective with ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which amends specific aspects of ASU 2014-09, including how to identify performance obligations and guidance related to licensing implementation. This amendment provides guidance on determining whether an entity's promise to grant a license provides a customer with either a right to use the entity's intellectual property or a right to access the entity's intellectual property. The amendment is effective with ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which clarifies specific aspects of ASU 2014-09, clarifying how to identify performance obligations and guidance related to its promise in granting a license of intellectual property. This new standard provides guidance to allow entities to disregard items that are immaterial in the context of the contract, clarify when a promised good or service is separately identifiable and allow an entity to elect to account for the cost of shipping and handling performed after control of a good has been transferred to the customer as a fulfillment cost. The new standard also clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property to help determine whether it recognizes revenue over time or at a point in time and addresses how entities should consider license renewals and restrictions. The new standard is effective with ASU 2014-09. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606: Revenue from Contracts with Customers , which clarifies specific aspects of ASU 2014-09, including allowing entities not to make quantitative disclosures about remaining performance obligations in certain cases and requiring entities that use any of the new or previously existing optional exemptions to expand their qualitative disclosures. The new standard also makes twelve other technical corrections and modifications to ASU 2014-09. The new standard is effective with ASU 2014-09. The Company adopted this standard effective July 1, 2018 using the modified retrospective approach. Refer to the "Effects of Topic 606" below for more information related to the impact of this standard on the Company's significant accounting policies and condensed consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles- Goodwill and Other- Internal Use Software (Topic 350): Customer Account for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , which requires customers in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. More specifically, capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted including adoption in any interim periods. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to Disclosure Requirements for Fair Value Measurement , which improves the effectiveness of fair value measurement disclosures by eliminating, adding and modifying certain disclosure requirements for fair value measurements as part of its disclosure framework project. More specifically, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates Step 2 from the goodwill impairment test. The guidance requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, the guidance eliminates the requirement for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted for interim and annual goodwill impairment tests performed after January 1, 2017. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which is intended to increase transparency and comparability among organizations of accounting for leasing arrangements. This guidance establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Entities will be required to recognize and measure leases as of the earliest period presented using a modified retrospective approach. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. Effects of Topic 606 As a result of adopting Topic 606, the Company's accounting policies and condensed consolidated financial statements were updated as follows: Contract Assets Supply Chain Services contract assets represent estimated customer purchases on supplier contracts for which administrative fees have been earned, but not collected. Performance Services contract assets represent revenue earned for services provided but which the Company is not contractually able to bill as of the end of the respective reporting period. Contract Costs Contract costs represent amounts the Company has capitalized and reflect the incremental costs of obtaining and fulfilling a contract, which include sales commissions and costs related to implementing SaaS informatics tools. For commissions on new contracts, these costs are amortized over the life of the expected relationship with the customer for the respective performance obligation. For renewals, commissions are amortized over the contract life with the customer. Implementation costs are amortized straight-line, once the tool is implemented, over the life of the expected relationship with the customer for the respective performance obligation, which is consistent with the transfer of services to the customer to which the implementation relates. The Company's contract costs are included in other assets on the Condensed Consolidated Balance Sheets, while the associated amortization related to sales commissions is included in selling, general and administrative expenses and the associated amortization related to implementation costs is included in cost of revenue in the Condensed Consolidated Statements of Income. Deferred Revenue Deferred revenue consists of unrecognized revenue related to advanced customer invoicing or member payments received prior to fulfillment of the Company's revenue recognition criteria. Substantially all deferred revenue consists of deferred subscription fees and deferred consulting fees. Subscription fees for Company-hosted SaaS applications are deferred until the customer's unique data records have been incorporated into the underlying software database, or until customer site-specific software has been implemented and the customer has access to the software. Deferred consulting fees arise upon invoicing to customers prior to services being performed. Performance Obligations A performance obligation is a promise to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Contracts may have a single performance obligation as the promise to transfer individual goods or services is not separately identifiable from other promises and, therefore, not distinct; while other contracts may have multiple performance obligations, most commonly due to the contract covering multiple deliverable arrangements (licensing fees, implementation fees, subscription fees, professional fees for consulting services, etc.). Revenue Recognition The Company accounts for a contract with a customer when the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The Company’s contracts may include terms that could cause variability in the transaction price, including, for example, revenue share, rebates, discounts, and variable fees based on performance. The Company only includes estimated amounts of consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. These estimates require management to make complex, difficult or subjective judgments, and to make estimates about the effect of matters inherently uncertain. As such, the Company may not be able to reliably estimate variable fees based on performance in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the Company’s experience with similar types of contracts is limited. Estimates of variable consideration and the determination of whether to include estimated amounts of consideration in the transaction price are based on information (historical, current and forecasted) that is reasonably available to the Company, taking into consideration the type of customer, the type of transaction and the specific facts and circumstances of each arrangement. Additionally, management performs periodic analyses to verify the accuracy of estimates for variable consideration. Although the Company believes that its approach in developing estimates and reliance on certain judgments and underlying inputs is reasonable, actual results could differ which may result in exposure of increases or decreases in revenue that could be material. Net Administrative Fees Revenue Net administrative fees revenue is a single performance obligation earned through a series of distinct daily services and includes maintaining a network of members to participate in the group purchasing program and providing suppliers access to the Company's members. Revenue is generated through administrative fees received from suppliers, which are estimated based on the total dollar volume of goods and services purchased by the Company's members in connection with its GPO programs and is included in service revenue in the accompanying Condensed Consolidated Statements of Income. The Company, through its GPO programs, aggregates member purchasing power to negotiate pricing discounts and improve contract terms with suppliers. Contracted suppliers pay the Company administrative fees which generally represent 1% to 3% of the gross purchase price of goods and services sold to members under the contracts the Company has negotiated. Administrative fees are variable consideration and are recognized as earned based upon estimated purchases by the Company's members utilizing the Company's GPO supplier contracts. The Company estimates revenue using an estimated value approach using predictive analytics based on historical member spend and updates for current trends and expectations. Member and supplier contracts substantiate persuasive evidence of an arrangement. The Company does not take title to the underlying equipment or products purchased by members through its GPO supplier contracts. Administrative fee revenue receivable is included in contract assets in the accompanying Condensed Consolidated Balance Sheet. The Company pays revenue share equal to a percentage of gross administrative fees, which is estimated according to the members' contractual agreements with the Company using a portfolio approach based on historical revenue fee share percentages and adjusted for current or anticipated trends. Revenue share is recognized as a reduction to gross administrative fees revenue to arrive at a net administrative fees revenue, and the corresponding revenue share liability is included in revenue share obligations in the accompanying Condensed Consolidated Balance Sheets. Product Revenue Specialty pharmacy revenue is generated through a single performance obligation through dispensing prescription medication to customers. Revenue is recognized at a point in time as the prescription medication is dispensed to the customers and is recorded net of the estimated contractual adjustments under agreements with Medicare, Medicaid and other managed care plans. Consideration from specialty pharmacy is variable as payments for the products provided under such agreements vary from period to period and are based on defined allowable reimbursements rather than on the basis of standard billing rates. The difference between the standard billing rate and allowable reimbursement rate results in contractual adjustments which are recorded as deductions from the transaction price. Direct sourcing generates revenue through products sold to distributors and to hospitals. Revenue is recognized once control of medical products has been transferred to members and is recorded net of discounts and rebates offered to customers. Discounts and rebates are estimated based on contractual terms and historical trends. Other Services and Support Revenue Within Performance Services, which provides technology with wrap-around service offerings, revenue consists of SaaS informatics products subscriptions, certain perpetual and term licenses, performance improvement collaborative and other service subscriptions, professional fees for consulting services, and insurance services management fees and commissions from group-sponsored insurance programs. SaaS informatics subscriptions include the right to use the Company's proprietary hosted technology on a SaaS basis, training and member support to deliver improvements in cost management, quality and safety, value-based care and provider analytics. SaaS arrangements create a single performance obligation for each subscription within the contract in which the nature of the obligation is a stand-ready obligation, and each day of service meets the criteria for over time recognition. Pricing varies by application and size of healthcare system. Informatics subscriptions are generally three to five year agreements with automatic renewal clauses and annual price escalators that typically do not allow for early termination. These agreements do not allow for physical possession of the software. Subscription fees are typically billed on a monthly basis and revenue is recognized as a single deliverable on a straight-line basis over the remaining contractual period following implementation. Implementation involves the completion of data preparation services that are unique to each member's data set and, in certain cases, the installation of member site-specific software, in order to access and transfer member data into the Company's hosted SaaS informatics products. Implementation is generally 60 to 240 days following contract execution before the SaaS informatics products can be fully utilized by the member. The Company sells certain perpetual and term licenses that include professional services and post-contract customer support in the form of maintenance and support services. The license, professional services and maintenance services each represent a distinct promise and are identified as separate performance obligations. Pricing varies by application and size of healthcare system. Fees under these contracts include the license fees, professional services fees and the maintenance and support services fees. The Company recognizes the license fees upon delivery of the licenses, the professional services fees over the implementation period, and the maintenance and support services fees straight-line over the remaining contract term following implementation. Generally, implementation is approximately 240 days following contract execution before the products can be fully utilized by the member. Revenue from performance improvement collaboratives and other service subscriptions that support the Company's offerings in cost management, quality and safety and value-based care is recognized over the service period as the services are provided, which is generally one year. Performance improvement collaboratives and other service subscriptions revenue is considered one performance obligation and is generated by providing customers access to online communities whereby data is housed and available for analytics and benchmarking. Professional fees for consulting services are sold under contracts, the terms of which vary based on the nature of the engagement. These services typically include general consulting, report based consulting and cost savings initiatives. Promised services under such consulting engagements are typically not considered distinct and are regularly combined and accounted for as one performance obligation. Fees are billed as stipulated in the contract, and revenue is recognized on a proportional performance method as services are performed or when deliverables are provided. In situations where the contracts have significant contract performance guarantees, the performance guarantees are estimated and accounted for as a form of variable consideration when determining the transaction price. In the event that guaranteed savings levels are not achieved, the Company may have to perform additional services at no additional charge in order to achieve the guaranteed savings or pay the difference between the savings that were guaranteed and the actual achieved savings. Occasionally, our entitlement to consideration is predicated on the occurrence of an event such as the delivery of a report for which client acceptance is required. However, except for event-driven point-in-time transactions, the majority of services provided within this service line are delivered over time due to the continuous benefit provided to our customers. Consulting arrangements can require significant estimates for the transaction price and estimated number of hours within an engagement. These estimates are based on the expected value which is derived from outcomes from historical contracts that are similar in nature and forecasted amounts based on anticipated savings for the new agreements. The transaction price is generally constrained until the target transaction price becomes more certain. Insurance services management fees are recognized in the period in which such services are provided. Commissions from group sponsored insurance programs is earned by acting as an intermediary in the placement of effective insurance policies. Under this arrangement, revenue is recognized at a point in time on the effective date of the associated policies when control of the policy transfers to the customer and is constrained for estimated early terminations. Certain administrative and/or patient management integrated pharmacy services are provided in situations where prescriptions are sent back to member health systems for dispensing. Additionally, the Company derives revenue from pharmaceutical manufacturers for providing patient education and utilization data. Revenue is recognized as these services are provided. Multiple Deliverable Arrangements The Company enters into agreements where the individual deliverables discussed above, such as SaaS subscriptions and consulting services, are bundled into a single service arrangement. These agreements are generally provided over a time period ranging from approximately three months to five years after the applicable contract execution date. Revenue, including both fixed and variable consideration, is allocated to the individual performance obligations within the arrangement based on the standalone selling price when it is sold separately in a stand-alone arrangement. Condensed Consolidated Financial Statements The Company applied Topic 606 ("New Revenue Standard") using the modified retrospective method, which resulted in recognizing the cumulative effect of initially applying Topic 606 as an adjustment to the opening balance of equity at July 1, 2018 for contracts that were not complete at that date. Therefore, the comparative information has not been adjusted and continues to be reported under Topic 605 ("Previous Revenue Standard"). The following tables summarize the impacts of adopting Topic 606 on the Company's condensed consolidated financial statements for the quarter ended September 30, 2018 (in thousands, except per share data). See Note 5 - Contract Balances and Note 16 - Segments for more information. Cumulative Effect - Adoption of New Revenue Standard Impact of change in accounting principle June 30, 2018 As presented Impact of new revenue standard July 1, 2018 New revenue standard Assets Accounts receivable (net of $1,841 allowance for doubtful accounts) $ 185,874 $ (5,421 ) $ 180,453 Contract assets $ — $ 169,684 $ 169,684 Total current assets $ 428,618 $ 164,263 $ 592,881 Deferred income tax assets $ 305,624 $ (7,106 ) $ 298,518 Other assets $ 3,991 $ 15,390 $ 19,381 Total assets $ 2,312,216 $ 172,547 $ 2,484,763 Liabilities, redeemable limited partners' capital and stockholders' deficit Revenue share obligations $ 78,999 $ 43,880 $ 122,879 Deferred revenue $ 39,785 $ (2,195 ) $ 37,590 Total current liabilities $ 448,882 $ 41,685 $ 490,567 Deferred tax liabilities $ 17,569 $ 3,597 $ 21,166 Total liabilities $ 818,870 $ 45,282 $ 864,152 Accumulated deficit $ (1,277,581 ) $ 127,265 $ (1,150,316 ) Total stockholders' deficit $ (1,427,064 ) $ 127,265 $ (1,299,799 ) Total liabilities, redeemable limited partners' capital and stockholders' deficit $ 2,312,216 $ 172,547 $ 2,484,763 Condensed Consolidated Balance Sheet - Selected Financial Data Impact of change in accounting principle September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Assets Accounts receivable (net of $4,867 allowance for doubtful accounts) $ 182,254 $ (8,381 ) $ 190,635 Contract assets $ 202,961 $ 202,961 $ — Prepaid expenses and other current assets $ 29,675 $ (813 ) $ 30,488 Total current assets $ 626,202 $ 193,767 $ 432,435 Deferred income tax assets $ 301,267 $ (6,177 ) $ 307,444 Other assets $ 22,727 $ 15,248 $ 7,479 Total assets $ 2,516,552 $ 202,838 $ 2,313,714 Liabilities, redeemable limited partners' capital and stockholders' deficit Revenue share obligations $ 119,578 $ 50,448 $ 69,130 Limited partners' distribution payable $ 14,993 $ 2,801 $ 12,192 Deferred revenue $ 34,259 $ (1,604 ) $ 35,863 Other liabilities $ 7,050 $ 1,233 $ 5,817 Total current liabilities $ 469,832 $ 52,878 $ 416,954 Deferred tax liabilities $ 21,950 $ 4,240 $ 17,710 Total liabilities $ 833,745 $ 57,118 $ 776,627 Accumulated deficit $ (1,820,000 ) $ 145,720 $ (1,965,720 ) Total stockholders' deficit $ (1,955,817 ) $ 145,720 $ (2,101,537 ) Total liabilities, redeemable limited partners' capital and stockholders' deficit $ 2,516,552 $ 202,838 $ 2,313,714 Condensed Consolidated Statement of Income Impact of change in accounting principle Three months ended September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Net revenue: Net administrative fees $ 162,000 $ 15,184 $ 146,816 Other services and support 88,076 5,379 82,697 Services 250,076 20,563 229,513 Products 151,470 (11,962 ) 163,432 Net revenue 401,546 8,601 392,945 Cost of revenue: Services 43,372 (1,933 ) 45,305 Products 145,621 (11,371 ) 156,992 Cost of revenue 188,993 (13,304 ) 202,297 Gross profit 212,553 21,905 190,648 Operating expenses: Selling, general and administrative 105,870 (1,111 ) 106,981 Research and development 340 — 340 Amortization of purchased intangible assets 13,638 — 13,638 Operating expenses 119,848 (1,111 ) 120,959 Operating income 92,705 23,016 69,689 Equity in net income of unconsolidated affiliates 2,690 — 2,690 Interest and investment loss, net (688 ) — (688 ) Loss on disposal of long-lived assets — — — Other income (expense) (1,941 ) — (1,941 ) Other income, net 61 — 61 Income before income taxes 92,766 23,016 69,750 Income tax expense 10,793 1,759 9,034 Net income 81,973 21,257 60,716 Net income attributable to non-controlling interest in Premier LP (55,113 ) (13,373 ) (41,740 ) Adjustment of redeemable limited partners' capital to redemption amount (708,193 ) 10,572 (718,765 ) Net income (loss) attributable to stockholders $ (681,333 ) $ 18,456 $ (699,789 ) Weighted average shares outstanding: Basic 53,221 — 53,221 Diluted 53,221 — 53,221 Earnings (loss) per share attributable to stockholders: Basic $ (12.80 ) $ 0.35 $ (13.15 ) Diluted $ (12.80 ) $ 0.35 $ (13.15 ) Condensed Consolidated Statement of Comprehensive Income Impact of change in accounting principle Three months ended September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Net income $ 81,973 $ 21,257 $ 60,716 Less: Comprehensive income attributable to non-controlling interest (55,113 ) (13,373 ) (41,740 ) Comprehensive income attributable to Premier, Inc. $ 26,860 $ 7,884 $ 18,976 Condensed Consolidated Statement of Cash Flows Impact of change in accounting principle Three months ended September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Operating activities Net income $ 81,973 $ 21,257 $ 60,716 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 34,145 — 34,145 Equity in net income of unconsolidated affiliates (2,690 ) — (2,690 ) Deferred income taxes 4,588 (290 ) 4,878 Stock-based compensation 6,195 — 6,195 Changes in operating assets and liabilities: Accounts receivable, contract assets, prepaid expenses and other current assets (41,427 ) (29,503 ) (11,924 ) Other assets (2,235 ) 144 (2,379 ) Inventories (2,097 ) — (2,097 ) Accounts payable, accrued expenses, deferred revenue and other current liabilities (21,776 ) 8,392 (30,168 ) Long-term liabilities (14 ) — (14 ) Loss on FFF put and call rights 3,283 — 3,283 Other operating activities 382 — 382 Net cash provided by operating activities 60,327 — 60,327 Net cash used in investing activities (25,062 ) — (25,062 ) Net cash used in financing activities (45,229 ) — (45,229 ) Net decrease in cash and cash equ |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | (3) INVESTMENTS Investments in Unconsolidated Affiliates The Company's investments in unconsolidated affiliates consisted of the following (in thousands): Carrying Value Equity in Net Income (Loss) Three Months Ended September 30, September 30, 2018 June 30, 2018 2018 2017 FFF $ 94,425 $ 91,804 $ 2,621 $ 4,337 Bloodbuy 1,893 1,918 (25 ) (33 ) PharmaPoint — — — (52 ) Other investments 425 331 94 — Total investments $ 96,743 $ 94,053 $ 2,690 $ 4,252 On July 26, 2016, the Company, through its consolidated subsidiary, PSCI, acquired 49% of the issued and outstanding stock of FFF Enterprises, Inc. ("FFF") for $65.7 million in cash plus consideration in the form of the FFF put and call rights. The Company recorded the initial investment in FFF in the accompanying Condensed Consolidated Balance Sheets at $81.1 million , of which $65.7 million was in cash and $15.4 million was consideration in the form of the initial net fair value of the FFF put and call rights (see Note 4 - Fair Value Measurements for additional information related to the fair values of the FFF put and call rights). The Company accounts for its investment in FFF using the equity method of accounting and includes the investment as part of the Supply Chain Services segment. The Company, through its consolidated subsidiary, PSCI, held a 15% ownership interest in BloodSolutions, LLC ("Bloodbuy") through its ownership of 5.3 million units of Class B Membership Interests in Bloodbuy at September 30, 2018 and June 30, 2018 . The Company accounts for its investment in Bloodbuy using the equity method of accounting as the Company has rights to appoint a Board member, and includes the investment as part of the Supply Chain Services segment. The Company, through its consolidated subsidiary, PSCI, held a 28% ownership interest in PharmaPoint, LLC ("PharmaPoint") through its ownership of 5.0 million units of Class B Membership Interests in PharmaPoint at September 30, 2018 and June 30, 2018 . During the year ended June 30, 2018, the Company determined that it was unlikely to recover its investment in PharmaPoint, and as a result recognized an other-than-temporary impairment of $4.0 million . The Company accounts for its investment in PharmaPoint using the equity method of accounting and includes the investment as part of the Supply Chain Services segment. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | (4) FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table provides a summary of the Company's financial assets and liabilities which are measured at fair value on a recurring basis (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2018 Cash equivalents $ 62,038 $ 62,038 $ — $ — FFF call right 488 — — 488 Deferred compensation plan assets 47,523 47,523 — — Total assets $ 110,049 $ 109,561 $ — $ 488 FFF put right 45,200 — — 45,200 Total liabilities $ 45,200 $ — $ — $ 45,200 June 30, 2018 Cash equivalents $ 62,684 $ 62,684 $ — $ — FFF call right 610 — — 610 Deferred compensation plan assets 48,215 48,215 — — Total assets $ 111,509 $ 110,899 $ — $ 610 FFF put right 42,041 — — 42,041 Total liabilities $ 42,041 $ — $ — $ 42,041 Deferred compensation plan assets consisted of highly liquid mutual fund investments, which were classified as Level 1. The current portion of deferred compensation plan assets was included in prepaid expenses and other current assets ( $4.1 million and $3.6 million at September 30, 2018 and June 30, 2018 , respectively) in the accompanying Condensed Consolidated Balance Sheets. Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) FFF put and call rights Pursuant to a shareholders' agreement entered into in connection with the Company's equity investment in FFF on July 26, 2016 (see Note 3 - Investments ), which shareholders' agreement was amended and restated November 22, 2017, the majority shareholder of FFF holds a put right that provides such shareholder the right to require the Company to purchase (i) up to 50% of its interest in FFF, which is exercisable beginning on July 26, 2020, the fourth anniversary of the investment closing date, and (ii) all or a portion of its remaining interest in FFF on or after December 31, 2020. Any such required purchases are to be made at a per share price equal to FFF's earnings before interest, taxes, depreciation and amortization ("EBITDA") over the twelve calendar months prior to the purchase date multiplied by a market adjusted multiple, adjusted for any outstanding debt and cash and cash equivalents ("Equity Value per Share"). In addition, the amended and restated shareholders' agreement provides the Company with a call right requiring the majority shareholder to sell its remaining interest in FFF to the Company, which is exercisable at any time within the later of 180 calendar days after the date of a Key Man Event (generally defined in the amended and restated shareholders' agreement as the resignation, termination for cause, death or disability of the majority shareholder) or 30 calendar days after December 31, 2020. In the event that the FFF put or call rights are exercised, the purchase price for the additional interest in FFF will be at a per share price equal to the Equity Value per Share. The fair values of the FFF put and call rights were determined based on the Equity Value per Share calculation using unobservable inputs, which included the estimated FFF put and call rights' expiration dates, the forecast of FFF's EBITDA over the option period, forecasted movements in the overall market and the likelihood of a Key Man Event. Significant changes to the Equity Value per Share resulting from changes in the unobservable inputs could have a significant impact on the fair values of the FFF put and call rights. The Company recorded the FFF put and call rights within long-term other liabilities and long-term other assets, respectively, within the accompanying Condensed Consolidated Balance Sheets. Net changes in the fair values of the FFF put and call rights were recorded within other income (expense) in the accompanying Condensed Consolidated Statements of Income. Earn-out liabilities Earn-out liabilities were established in connection with acquisitions of Healthcare Insights, LLC on July 31, 2015, Inflow Health, LLC on October 1, 2015 and Innovatix, LLC and Essensa Ventures, LLC, each on December 2, 2016. The earn-out liabilities were classified as Level 3 of the fair value hierarchy and their values were determined based on estimated future earnings and the probability of achieving them. Changes in the fair values of the earn-out liabilities were recorded within selling, general and administrative expenses in the accompanying Condensed Consolidated Statements of Income. A reconciliation of the Company's FFF put and call rights and earn-out liabilities is as follows (in thousands): Beginning Balance Gain (Loss) Ending Balance Three Months Ended September 30, 2018 FFF call right $ 610 $ (122 ) $ 488 Total Level 3 assets $ 610 $ (122 ) $ 488 FFF put right 42,041 (3,159 ) 45,200 Total Level 3 liabilities $ 42,041 $ (3,159 ) $ 45,200 Three Months Ended September 30, 2017 FFF call right $ 4,655 $ (62 ) $ 4,593 Total Level 3 assets $ 4,655 $ (62 ) $ 4,593 Earn-out liabilities $ 21,310 $ (365 ) $ 21,675 FFF put right 24,050 42 24,008 Total Level 3 liabilities $ 45,360 $ (323 ) $ 45,683 Non-Recurring Fair Value Measurements During the three months ended September 30, 2018 , no non-recurring fair value measurements were required relating to the measurement of goodwill and intangible assets for impairment. Financial Instruments For Which Fair Value Only is Disclosed The fair values of non-interest bearing notes payable, classified as Level 2, were less than their carrying values by approximately $0.5 million and $0.6 million at September 30, 2018 and June 30, 2018 , respectively, based on assumed market interest rates of 3.7% and 3.6% , respectively. Other Financial Instruments The fair values of cash, accounts receivable, accounts payable, accrued liabilities and the Company's Credit Facility approximated carrying value due to the short-term nature of these financial instruments. |
CONTRACT BALANCES
CONTRACT BALANCES | 3 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | (5) CONTRACT BALANCES Contract Assets, Deferred Revenue and Revenue Share Obligations The timing of revenue recognition, billings and cash collections results in accounts receivables, contract assets (unbilled receivables) and deferred revenue (customer advances) on the Condensed Consolidated Balance Sheets. The $203.0 million increase in contract assets from June 30, 2018 to September 30, 2018 was largely attributable to the establishment of $169.7 million in contract assets upon adoption of the New Revenue Standard of which $141.5 million was for Supply Chain Services and $28.2 million was for Performance Services. Subsequent to adoption of the New Revenue Standard, Supply Chain Services contract assets increased an additional $24.4 million , which represents changes in the Company's estimated revenue for which cash has not yet been collected associated with net administrative fees for the current period. Performance Services contract assets increased $8.9 million primarily due to the acceleration of revenue recognition from licensing and certain consulting services contracts which represents performance obligations that have been satisfied prior to customer invoicing. Performance Services contract assets also increased due to the timing of payments related to certain cost management consulting services and performance-based engagements where revenue is recognized as work is performed. The $40.6 million increase in revenue share obligation from June 30, 2018 to September 30, 2018 is largely a function of the aforementioned increases in contract assets and the underlying revenue share arrangements associated with the Company's GPO participation agreements. Revenue recognized during the three months ended September 30, 2018 that was previously included in deferred revenue during the period was approximately $50.0 million , which is a result of satisfying performance obligations within the Performance Services segment. Performance Obligations A performance obligation is a promise to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Contracts may have a single performance obligation as the promise to transfer individual goods or services is not separately identifiable from other promises and, therefore, not distinct; while other contracts may have multiple performance obligations, most commonly due to the contract covering multiple phases or deliverable arrangements (licensing fees, implementation fees, maintenance and support fees, professional fees for consulting services), including certain performance guarantees. Net revenue recognized from performance obligations that were satisfied or partially satisfied in previous periods was $5.5 million in the three months ended September 30, 2018 . This was driven primarily by $3.6 million associated with revised forecasts underlying contracts that include variable consideration components and net administrative fees revenue related to unforecasted cash receipts received in the current period of $1.9 million . Remaining performance obligations represent the portion of the transaction price that has not yet been satisfied or achieved. As of September 30, 2018 , the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $480.0 million . The Company expects to recognize approximately 50% and 25% of the remaining performance obligations over the next 12 and 24 months, respectively, with the remainder recognized thereafter. Contract Costs The Company is required to capitalize the incremental costs of obtaining and fulfilling a contract, which include sales commissions and costs associated with implementing SaaS informatics tools. At September 30, 2018 , the Company had $15.2 million in capitalized contract costs, including $9.8 million related to implementation costs and $5.4 million related to sales commissions. The Company had $1.8 million of related amortization expense for the three months ended September 30, 2018 . |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | (6) INTANGIBLE ASSETS, NET Intangible assets, net consisted of the following (in thousands): Useful Life September 30, 2018 June 30, 2018 Member relationships 14.7 years $ 220,100 $ 220,100 Technology 5.0 years 142,317 142,317 Customer relationships 8.3 years 48,120 48,120 Trade names 8.3 years 22,710 22,710 Distribution network 10.0 years 22,400 22,400 Favorable lease commitments 10.1 years 11,393 11,393 Non-compete agreements 5.9 years 8,710 8,710 Total intangible assets 475,750 475,750 Accumulated amortization (167,273 ) (153,635 ) Intangible assets, net $ 308,477 $ 322,115 Intangible asset amortization totaled $13.6 million and $13.9 million for the three months ended September 30, 2018 and 2017 , respectively. |
GOODWILL
GOODWILL | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | (7) GOODWILL Goodwill consisted of the following (in thousands): September 30, 2018 June 30, 2018 Supply Chain Services $ 400,348 $ 400,348 Performance Services 506,197 506,197 Total goodwill $ 906,545 $ 906,545 |
DEBT
DEBT | 3 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT | (8) DEBT Long-term debt consisted of the following (in thousands): Commitment Amount Due Date September 30, 2018 June 30, 2018 Credit Facility $ 750,000 June 24, 2019 $ 100,000 $ 100,000 Notes payable — Various 7,218 7,212 Total debt 107,218 107,212 Less: current portion (101,771 ) (100,250 ) Total long-term debt $ 5,447 $ 6,962 Credit Facility Premier LP, along with its consolidated subsidiaries, PSCI and PHSI, as Co-Borrowers, Premier GP and certain domestic subsidiaries of Premier GP, as guarantors, entered into an unsecured Credit Facility, dated as of June 24, 2014 and amended on June 4, 2015. The Credit Facility has a maturity date of June 24, 2019. The Company has commenced negotiations to refinance or replace the Credit Facility during fiscal 2019. The Credit Facility provides for borrowings of up to $750.0 million with (i) a $25.0 million sub-facility for standby letters of credit and (ii) a $75.0 million sub-facility for swingline loans. 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 lender approval. The Credit Facility includes an unconditional and irrevocable guaranty of all obligations under the Credit Facility by Premier GP, certain domestic subsidiaries of Premier GP and future guarantors, if any. Premier, Inc. is not a guarantor under the Credit Facility. At the Company's option, committed loans may be in the form of Eurodollar rate loans ("Eurodollar Loans") or base rate loans ("Base Rate Loans"). Eurodollar Loans bear interest at the Eurodollar rate (defined as the London Interbank Offered 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 1.750% for Eurodollar Loans and 0.125% to 0.750% for Base Rate Loans. At September 30, 2018 , the interest rate for three-month Eurodollar Loans was 3.523% and the interest rate for Base Rate Loans was 5.375% . 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 September 30, 2018 , the commitment fee was 0.125% . The Credit Facility 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, of which certain covenant calculations use EBITDA, a Non-GAAP financial measure. Under the terms of the Credit Facility, 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 fiscal quarter. Premier GP was in compliance with all such covenants at September 30, 2018 . The Credit Facility 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 Facility). If any event of default occurs and is continuing, the administrative agent under the Credit Facility 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 Facility to be immediately due and payable. The Company may prepay amounts outstanding under the Credit Facility without premium or penalty provided that Co-Borrowers compensate the lenders for losses and expenses incurred as a result of the prepayment of any Eurodollar Loan, as defined in the Credit Facility. Proceeds from borrowings under the Credit Facility may generally be used to finance ongoing working capital requirements, including permitted acquisitions, discretionary cash settlements of Class B unit exchanges under the Exchange Agreement, repurchases of Class A common stock pursuant to stock repurchase programs, and other general corporate activities. The Company had outstanding borrowings under the Credit Facility of $100.0 million at September 30, 2018 . Notes Payable At September 30, 2018 and June 30, 2018 , the Company had $7.2 million in notes payable consisting primarily of non-interest bearing notes payable outstanding to departed member owners, of which $1.8 million and $0.2 million , respectively, were included in current portion of long-term debt and $5.4 million and $7.0 million , respectively, were included in long-term debt, less current portion, in the accompanying Condensed Consolidated Balance Sheets. Notes payable generally have stated maturities of five years from their date of issuance. |
REDEEMABLE LIMITED PARTNERS' CA
REDEEMABLE LIMITED PARTNERS' CAPITAL | 3 Months Ended |
Sep. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE LIMITED PARTNERS' CAPITAL | (9) REDEEMABLE LIMITED PARTNERS' CAPITAL Redeemable limited partners' capital represents the member owners' 60% ownership of Premier LP through their ownership of Class B common units at September 30, 2018 . The member owners hold the majority of the votes of the Board of Directors and any redemption or transfer or choice of consideration cannot be assumed to be within the control of the Company. Therefore, redeemable limited partners' capital is recorded at the greater of the book value or redemption amount per the Amended and Restated Limited Partnership Agreement of Premier LP (as amended, the "LP Agreement"), and is calculated as the fair value of all Class B common units as if immediately exchangeable into Class A common shares. For the three months ended September 30, 2018 and 2017 , the Company recorded adjustments to the fair value of redeemable limited partners' capital as an adjustment of redeemable limited partners' capital to redemption amount in the accompanying Condensed Consolidated Statements of Income in the amounts of $(708.2) million and $320.4 million , respectively. Redeemable limited partners' capital is classified as temporary equity in the mezzanine section of the accompanying Condensed Consolidated Balance Sheets as, pursuant to the LP Agreement, withdrawal is at the option of each member owner and the conditions of the repurchase are not solely within the Company's control. The table below provides a summary of the changes in the redeemable limited partners' capital from June 30, 2018 to September 30, 2018 (in thousands): Receivables From Limited Partners Redeemable Limited Partners' Capital Total Redeemable Limited Partners' Capital June 30, 2018 $ (2,205 ) $ 2,922,615 $ 2,920,410 Distributions applied to receivables from limited partners 437 — 437 Net income attributable to non-controlling interest in Premier LP — 55,113 55,113 Distributions to limited partners — (14,993 ) (14,993 ) Exchange of Class B common units for Class A common stock by member owners — (30,536 ) (30,536 ) Adjustment of redeemable limited partners' capital to redemption amount — 708,193 708,193 September 30, 2018 $ (1,768 ) $ 3,640,392 $ 3,638,624 Receivables from limited partners represent amounts due from limited partners for their required capital in Premier LP. These receivables are either interest bearing notes that were issued to new limited partners or non-interest bearing loans (contribution loans) provided to existing limited partners. These receivables are reflected as a reduction to redeemable limited partners' capital so that 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 three months ended September 30, 2018 . During the three months ended September 30, 2018 , no limited partners withdrew from Premier LP. The limited partnership agreement provides for the redemption of former limited partners' Class B common units that are not eligible for exchange in the form of a five -year, unsecured, non-interest bearing term promissory note, a cash payment equal to the present value of the redemption amount, or other mutually agreed upon terms. Partnership interest obligations to former limited partners are reflected in notes payable in the accompanying Condensed Consolidated Balance Sheets. Under the Exchange Agreement, Class B common units that are eligible for exchange by withdrawing limited partners must be exchanged in the subsequent quarter's exchange process. Premier LP's distribution policy requires cash distributions as long as taxable income is generated and cash is available to distribute on a quarterly basis prior to the 60 th day after the end of each calendar quarter. The Company makes quarterly distributions to its limited partners in the form of a legal partnership income distribution governed by the terms of the LP Agreement. These partner distributions are based on the limited partner's ownership in Premier LP and relative participation across Premier service offerings. While these distributions are based on relative participation across Premier service offerings, they are not based directly on revenue generated from an individual partner's participation as the distributions are based on the net income (loss) of the partnership which encompasses the operating expenses of the partnership as well as participation by non-owner members in Premier's service offerings. To the extent Premier LP incurred a net loss, the limited partners would not receive a quarterly distribution. As provided in the LP 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. Quarterly distributions made to limited partners during the current fiscal year are as follows (in thousands): Date Distribution (a) August 23, 2018 $ 15,465 (a) Distributions are equal to Premier LP's total taxable income from the preceding fiscal quarter-to-date period for each respective distribution date multiplied by the Company's standalone effective combined federal, state and local income tax rate for each respective distribution date. Premier LP expects to make a $15.0 million quarterly distribution on or before November 21, 2018. The distribution is reflected in limited partners' distribution payable in the accompanying Condensed Consolidated Balance Sheets at September 30, 2018 . Pursuant to the Exchange Agreement (see Note 1 - Organization and Basis of Presentation for more information), 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 Audit and Compliance Committee. During the three months ended September 30, 2018 , the Company recorded total reductions of $30.5 million to redeemable limited partners' capital to reflect the exchange of approximately 0.8 million Class B common units and surrender of associated shares of Class B common stock by member owners for a like number of shares of the Company's Class A common stock (see Note 11 - Earnings (Loss) Per Share for more information). Quarterly exchanges during the current fiscal year were as follows (in thousands, except Class B common units). Date of Quarterly Exchange Number of Class B Common Units Exchanged Reduction in Redeemable Limited Partners' Capital July 31, 2018 816,468 $ 30,536 |
STOCKHOLDERS' DEFICIT
STOCKHOLDERS' DEFICIT | 3 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' DEFICIT | (10) STOCKHOLDERS' DEFICIT As of September 30, 2018 , there were 53,790,369 shares of the Company's Class A common stock, par value $0.01 per share, and 79,519,233 shares of the Company's Class B common stock, par value $0.000001 per share, outstanding. On May 7, 2018, the Company's Board of Directors approved the repurchase of up to $250.0 million of our Class A common stock as a continuation of our balanced capital deployment strategy. Subject to certain terms and conditions, repurchases may be made from time to time through open market purchases or privately negotiated transactions at our discretion, and in accordance with applicable federal securities laws. As of September 30, 2018 , the Company had purchased approximately 0.3 million shares of Class A common stock at an average price of $36.80 per share for a total purchase price of approximately $12.3 million . The repurchase authorization may be suspended, delayed or discontinued at any time at the discretion of the Company's Board of Directors. 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, subject to any statutory or contractual restrictions on the payment of dividends and subject 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 entitled to one vote for each share held of record on all matters submitted to a vote of stockholders, but are not entitled to receive dividends, other than dividends payable in shares of Premier's common stock, or to receive a distribution upon the dissolution or a liquidation of Premier. Pursuant to the terms of a voting trust agreement by and among the Company, Premier LP, the holders of Class B common stock and Wells Fargo Delaware Trust Company, N.A., as the trustee, 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 the 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 | 3 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS (LOSS) PER SHARE | (11) EARNINGS (LOSS) PER SHARE Basic earnings per share of Premier is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding for the period. Net income attributable to stockholders includes 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 (loss) per share calculation, which is calculated using the treasury stock method, includes the impact of shares that could be issued under the outstanding stock options, non-vested restricted stock units and awards, shares of non-vested performance share awards and the effect of the assumed redemption of Class B common units through the issuance of Class A common shares. The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings (loss) per share (in thousands, except per share amounts): Three Months Ended September 30, 2018 2018 2017 As presented Previous revenue standard (a) Previous revenue standard Numerator for basic earnings (loss) per share: Net income (loss) attributable to stockholders $ (681,333 ) $ (699,789 ) $ 336,430 Numerator for diluted earnings (loss) per share: Net income (loss) attributable to stockholders $ (681,333 ) $ (699,789 ) $ 336,430 Adjustment of redeemable limited partners' capital to redemption amount — — (320,424 ) Net income attributable to non-controlling interest in Premier LP — — 44,610 Net income (loss) (681,333 ) (699,789 ) 60,616 Tax effect on Premier, Inc. net income (b) — — (18,156 ) Adjusted net income (loss) $ (681,333 ) $ (699,789 ) $ 42,460 Denominator for basic earnings (loss) per share: Weighted average shares (c) 53,221 53,221 52,909 Denominator for diluted earnings (loss) per share: Weighted average shares (c) 53,221 53,221 52,909 Effect of dilutive securities: (d) Stock options — — 351 Restricted stock — — 304 Class B shares outstanding — — 86,482 Weighted average shares and assumed conversions 53,221 53,221 140,046 Basic earnings (loss) per share $ (12.80 ) $ (13.15 ) $ 6.36 Diluted earnings (loss) per share $ (12.80 ) $ (13.15 ) $ 0.30 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. (b) Represents income tax expense related to Premier, Inc. retaining the portion of net income attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings (loss) per share. (c) Weighted average number of common shares used for basic earnings (loss) per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for the three months ended September 30, 2018 and 2017 . (d) For the three months ended September 30, 2018 , the effect of 0.6 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect, and the effect of 1.0 million stock options and restricted stock units and 79.8 million Class B common units exchangeable for Class A common shares were excluded from diluted weighted average shares outstanding due to the net loss attributable to stockholders sustained for the quarter and as including them would have an anti-dilutive effect for the period. Additionally, the effect of 0.7 million performance share awards was excluded from diluted weighted average shares outstanding as they had not satisfied the applicable performance criteria at the end of the period. For the three months ended September 30, 2017 , the effect of 1.4 million stock options was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect, and the effect of 0.6 million performance share awards was excluded from diluted weighted average shares outstanding as they had not satisfied the applicable performance criteria at the end of the period. Pursuant to the terms of the Exchange Agreement, on a quarterly basis, the Company has the option, as determined by the Audit and Compliance Committee, to settle the exchange of Class B common units of Premier LP by member owners for cash, an equal number of Class A common shares of Premier, Inc. or a combination of cash and shares of Class A common stock. In connection with the exchange of Class B common units by member owners, regardless of the consideration used to settle the exchange, an equal number of shares of Premier's Class B common stock are surrendered by member owners and retired (see Note 9 - Redeemable Limited Partners' Capital ). The following table presents certain information regarding the exchange of Class B common units and associated Class B common stock for Premier's Class A common stock and/or cash in connection with the quarterly exchanges pursuant to the terms of the Exchange Agreement, including activity related to the Class A and Class B common units and Class A and Class B common stock through the date of the applicable quarterly exchange: Quarterly Exchange by Member Owners Class B Common Shares Retired Upon Exchange (a) Class B Common Shares Outstanding After Exchange (a) Class A Common Shares Outstanding After Exchange (b) Percentage of Combined Voting Power Class B/Class A Common Stock July 31, 2018 816,468 79,519,233 53,256,897 60%/40% October 31, 2018 (c) 9,807,651 69,601,752 63,734,585 52%/48% (a) The number of Class B common shares retired or outstanding is equivalent to the number of Class B common units retired upon exchange or outstanding after the exchange, as applicable. (b) The number of Class A common shares outstanding after exchange also includes activity related to the Company's share repurchase program (see Note 10 - Stockholders' Deficit ), equity incentive plan (see Note 12 - Stock-Based Compensation ) and departed member owners (see Note 9 - Redeemable Limited Partners' Capital ). (c) As the quarterly exchange occurred on October 31, 2018, the impact of the exchange is not reflected in the condensed consolidated financial statements for the quarter ended September 30, 2018 . The Company utilized 4,287,471 treasury shares to facilitate a portion of this exchange, and as a result had zero Class A common shares held in treasury as of October 31, 2018, after the exchange. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | (12) 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 $6.2 million and $8.8 million for the three months ended September 30, 2018 and 2017 , respectively, with a resulting deferred tax benefit of $1.5 million and $3.3 million , respectively. The deferred tax benefit was calculated at a rate of 25% and 38% , respectively, which represents the expected effective income tax rate at the time of the compensation expense deduction primarily at PHSI, and differs from the Company's current effective income tax rate which includes the impact of partnership income not subject to federal and state income taxes. The decrease in the deferred tax benefit is a result of the Tax Cuts and Jobs Act, which was enacted on December 22, 2017 (see Note 13 - Income Taxes). Premier 2013 Equity Incentive Plan The Premier 2013 Equity Incentive Plan, as amended and restated (and including any further amendments thereto, the "2013 Equity Incentive Plan") provides for grants of up to 11.3 million 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 share awards. As of September 30, 2018 , there were 3.0 million shares available for grant under the 2013 Equity Incentive Plan. The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2018 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2018 605,873 $ 33.25 1,318,047 $ 33.00 3,499,251 $ 30.53 Granted 225,233 $ 44.23 575,957 $ 43.43 — $ — Vested/exercised (119,426 ) $ 35.57 (359,751 ) $ 35.43 (230,367 ) $ 32.57 Forfeited (15,417 ) $ 32.71 (40,877 ) $ 32.67 (34,179 ) $ 32.55 Outstanding at September 30, 2018 696,263 $ 36.42 1,493,376 $ 36.45 3,234,705 $ 30.37 Stock options outstanding and exercisable at September 30, 2018 2,737,472 $ 30.00 Restricted stock units and restricted stock awards issued and outstanding generally vest over a three -year period for employees and a one -year period for directors. Performance share awards issued and outstanding generally vest over a three -year period if performance targets are met. Stock options have a term of ten years from the date of grant. Vested stock options will expire either after twelve 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 equal annual installments over three years. Unrecognized stock-based compensation expense at September 30, 2018 was as follows (in thousands): Unrecognized Stock-Based Compensation Expense Weighted Average Amortization Period Restricted stock $ 15,830 2.38 years Performance share awards 36,826 2.26 years Stock options 4,987 1.65 years Total unrecognized stock-based compensation expense $ 57,643 2.24 years The aggregate intrinsic value of stock options at September 30, 2018 was as follows (in thousands): Intrinsic Value of Stock Options Outstanding and exercisable $ 43,186 Expected to vest 6,667 Total outstanding $ 49,853 Exercised during the three months ended September 30, 2018 $ 2,403 The Company estimated the fair value of each stock option on the date of grant using a Black-Scholes option-pricing model, applying the following assumptions, and amortized expense over each option's vesting period using the straight-line attribution approach: Three Months Ended September 30, 2017 Expected life (a) 6 years Expected dividend (b) — Expected volatility (c) 32.26% Risk-free interest rate (d) 1.89% Weighted average option grant date fair value $ 11.42 (a) The six -year expected life (estimated period of time outstanding) of stock options granted was estimated using the "Simplified Method" which utilizes the midpoint between the vesting date and the end of the contractual term. This method was utilized for the stock options due to the lack of historical exercise behavior of Premier's employees. (b) No dividends are expected to be paid over the contractual term of the stock options granted, resulting in the use of a zero expected dividend rate. (c) The expected volatility rate is based on the observed historical volatilities of comparable companies. (d) The risk-free interest rate was interpolated from the five -year and seven -year Constant Maturity Treasury rate published by the United States Treasury as of the date of the grant. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (13) INCOME TAXES The Company's income tax expense is attributable to the activities of the Company, PHSI and PSCI, all of which are subchapter C corporations and are subject to U.S. federal and state income taxes. In contrast, under the provisions of federal and state laws, Premier LP is not subject to federal and state income taxes as the income realized by Premier LP is taxable to its partners. As a result of the TCJA that was enacted on December 22, 2017, the U.S. federal corporate income tax rate was reduced from 35% to 21% . In accordance with U.S. GAAP, the impact of changes in tax rates and tax laws is recognized as a component of income tax expense from continuing operations in the period of enactment. The Company has remeasured its deferred tax balances as of the enactment date and recorded net provisional tax expense of $210.4 million in fiscal year 2018. During the first quarter of fiscal year 2019, the Company evaluated the impact of the TCJA with respect to the amendments to Section 162(m) based on the issuance of additional guidance by the Internal Revenue Service. The Company concluded no adjustment to its deferred tax balances is required. The Company will continue to prescribe provisional relief pursuant to SAB 118 to certain components of its deferred tax balances. While the Company has provided reasonable estimates of the impacts related to the TCJA, the final impact may differ from these estimates, due to, among other things, changes in interpretations, assumptions, additional guidance that may be released by the Internal Revenue Service and other actions that we may take that are yet to be determined. Income tax expense for the three months ended September 30, 2018 and 2017 was $10.8 million and $12.8 million , respectively, which reflects effective tax rates of 12% and 17% , respectively. The decrease in effective tax rates is primarily attributable to the aforementioned decrease in the U.S. federal corporate income tax rate from 35% to 21%. The Company's effective tax rates differ from income taxes recorded using a statutory rate largely due to Premier LP income, which is not subject to federal, state or local income taxes as well as valuation allowances associated with deferred tax assets at PHSI. Net deferred tax assets decreased $8.8 million to $279.3 million at September 30, 2018 from $288.1 million at June 30, 2018 . The current period balance was comprised of $301.3 million in deferred tax assets at Premier, Inc. offset by $22.0 million in deferred tax liabilities at PHSI and PSCI. The decrease in net deferred tax assets from the prior period was largely driven by $10.7 million in net reductions to deferred tax assets and liabilities in connection with the adoption and transition to the New Revenue Standard. The Company's TRA liabilities represent a payable to the limited partners for 85% of the tax savings the Company expects to receive, if any, in U.S. federal, foreign, state and local income and franchise tax that may be realized (or deemed to realize, in the case of payments required to be made upon certain occurrences under such TRAs) in connection with the Section 754 election by Premier LP. Tax savings are generated as a result of the increase in tax basis resulting from the initial sale of Class B common units, subsequent exchanges (pursuant to the Exchange Agreement) and payments under the TRA. The election results in adjustments to the tax basis of the assets of Premier LP upon member owner exchanges of Class B common units of Premier LP for Class A common stock of Premier, Inc. or cash. TRA liabilities decreased $11.8 million to $243.3 million at September 30, 2018 from $255.1 million at June 30, 2018 . The change in TRA liabilities was driven primarily by the $18.0 million TRA payment to member owners during the three months ended September 30, 2018 , partially offset by a $6.2 million increase in TRA liabilities in connection with the quarterly member owner exchanges that occurred during the three months ended September 30, 2018 . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 3 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | (14) RELATED PARTY TRANSACTIONS FFF The Company's 49% ownership share of net income of FFF, which was acquired on July 26, 2016, included in equity in net income of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Income was $2.6 million and $4.3 million for the three months ended September 30, 2018 and 2017 , respectively. The Company maintains group purchasing agreements with FFF and receives administrative fees for purchases made by the Company's members pursuant to those agreements. Net administrative fees revenue recorded from purchases under those agreements was $2.3 million as presented and $1.6 million under the Previous Revenue Standard during the three months ended September 30, 2018 , and $1.7 million during the three months ended September 30, 2017 , under the Previous Revenue Standard. AEIX The Company conducts all operational activities for American Excess Insurance Exchange Risk Retention Group ("AEIX"), a reciprocal risk retention group that provides excess and umbrella healthcare professional 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 $0.5 million per calendar year. The Company received cost reimbursement of $1.2 million and $1.5 million during the three months ended September 30, 2018 and 2017 , respectively. As of September 30, 2018 and June 30, 2018 , $0.7 million and $0.9 million , respectively, in amounts receivable from AEIX are included in due from related parties in the accompanying Condensed Consolidated Balance Sheets. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (15) COMMITMENTS AND CONTINGENCIES The Company is not currently involved in any litigation it believes to be significant. 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, product liability, tort and personal injury, employment, antitrust, intellectual property, or other regulatory matters. If current or future government regulations, specifically, those with respect to antitrust or healthcare laws, are interpreted or enforced in a manner adverse to the Company or its business, 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. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
SEGMENTS | (16) 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, integrated pharmacy offerings and direct sourcing activities. The Performance Services segment provides technology with wrap-around service offerings and includes the Company's informatics, collaborative, consulting services, government services and insurance services offerings. The Company disaggregates revenue into categories that best depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors. The following table presents disaggregated revenue by business segment and underlying source (in thousands): Three Months Ended September 30, 2018 2018 2017 As presented Previous revenue standard (a) Previous revenue standard Net revenue: Supply Chain Services Net administrative fees $ 162,000 $ 146,816 $ 150,991 Other services and support 2,344 3,624 2,149 Services 164,344 150,440 153,140 Products 151,470 163,432 152,662 Total Supply Chain Services 315,814 313,872 305,802 Performance Services 85,732 79,073 84,762 Net revenue $ 401,546 $ 392,945 $ 390,564 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands): Three Months Ended September 30, 2018 2017 Depreciation and amortization expense (a) : Supply Chain Services $ 5,619 $ 5,495 Performance Services 25,913 22,918 Corporate 2,613 1,992 Total depreciation and amortization expense $ 34,145 $ 30,405 Capital expenditures: Supply Chain Services $ 495 $ 307 Performance Services 19,374 13,549 Corporate 5,193 2,791 Total capital expenditures $ 25,062 $ 16,647 September 30, 2018 September 30, 2018 June 30, 2018 Total assets: As presented Previous revenue standard (b) Previous revenue standard Supply Chain Services $ 1,210,363 $ 1,051,206 $ 991,837 Performance Services 902,446 850,990 860,409 Corporate 403,743 411,518 459,970 Total assets $ 2,516,552 $ 2,313,714 $ 2,312,216 (a) Includes amortization of purchased intangible assets. (b) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. The Company uses Segment Adjusted EBITDA (a financial measure not determined in accordance with generally accepted accounting principles ("Non-GAAP")) 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 and equity in net income of unconsolidated affiliates 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. 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. Non-recurring items are income or expenses and other items that have not been earned or incurred within the prior two years and are not expected to recur within the next two years. General and administrative corporate expenses that are not specific to a particular segment are not included in the calculation of Segment Adjusted EBITDA. For more information on Segment Adjusted EBITDA and the use of Non-GAAP financial measures, see "Our Use of Non-GAAP Financial Measures" within Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations. A reconciliation of income before income taxes to Segment Adjusted EBITDA is as follows (in thousands): Three Months Ended September 30, 2018 2018 2017 As presented Previous revenue standard (a) Previous revenue standard Income before income taxes $ 92,766 $ 69,750 $ 73,380 Equity in net income of unconsolidated affiliates (b) (2,690 ) (2,690 ) (4,252 ) Interest and investment loss, net (c) 688 688 1,495 Loss on disposal of long-lived assets — — 1,320 Other expense (income) 1,941 1,941 (1,463 ) Operating income 92,705 69,689 70,480 Depreciation and amortization 20,507 20,507 16,507 Amortization of purchased intangible assets 13,638 13,638 13,898 Stock-based compensation (d) 6,337 6,337 8,957 Acquisition related expenses 409 409 3,099 ERP implementation expenses (e) 326 326 335 Equity in net income of unconsolidated affiliates (b) 2,690 2,690 4,252 Deferred compensation plan income (f) 1,336 1,336 1,539 Other expense 673 673 104 Adjusted EBITDA $ 138,621 $ 115,605 $ 119,171 Segment Adjusted EBITDA: Supply Chain Services $ 135,403 $ 119,804 $ 125,620 Performance Services 30,575 23,158 21,221 Corporate (27,357 ) (27,357 ) (27,670 ) Adjusted EBITDA $ 138,621 $ 115,605 $ 119,171 (a) Refer to Note 2 - Significant Accounting Policies for more information related to the impact of the New Revenue Standard. (b) Refer to Note 3 - Investments for further information. (c) Represents interest expense, net and realized gains and losses on our marketable securities. (d) Represents non-cash employee stock-based compensation expense and stock purchase plan expense of $0.1 million during both of the three months ended September 30, 2018 and 2017 . (e) Represents implementation and other costs associated with the implementation of our enterprise resource planning ("ERP") system. (f) Represents realized and unrealized gains and losses and dividend income on deferred compensation plan assets. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 3 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | (17) SUBSEQUENT EVENTS On November 6, 2018, the Company announced that its subsidiary, Premier Healthcare Solutions, Inc., entered into a definitive agreement and plan of merger (“Merger Agreement”) to acquire Stanson Health, Inc. ("Stanson") for $51.5 million in cash, subject to potential purchase price adjustments for working capital at the time of closing. In addition, the Merger Agreement provides for an earn-out opportunity of up to $15.0 million based on certain product delivery and revenue targets. The acquisition is anticipated to close during the Company’s 2019 second fiscal quarter ended December 31, 2018. The acquisition is subject to customary closing conditions, and there can be no assurances regarding whether or when the acquisition will ultimately be completed. Stanson is a leading clinical decision support company that provides SaaS to healthcare facilities. Stanson’s SaaS products deliver healthcare providers real-time alerts and relevant analytics native to their electronic health record to guide and influence physician’s decisions resulting in the reduction of low-value and unnecessary care. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The member owners' interest in Premier LP is reflected as redeemable limited partners' capital in the Company's accompanying Condensed Consolidated Balance Sheets, and the limited partners' proportionate share of income in Premier LP is reflected within net income attributable to non-controlling interest in Premier LP in the Company's accompanying Condensed Consolidated Statements of Income and within comprehensive income attributable to non-controlling interest in Premier LP in the Company's accompanying Condensed Consolidated Statements of Comprehensive Income. At both September 30, 2018 and June 30, 2018 , the member owners owned approximately 60% of the Company's combined Class A and Class B common stock through their ownership of Class B common stock. During the three months ended September 30, 2018 , the member owners exchanged 0.8 million Class B common units and associated Class B common shares for an equal number of Class A common shares pursuant to an exchange agreement (the "Exchange Agreement") entered into by the member owners in connection with the completion of our initial public offering on October 1, 2013. The Exchange Agreement provides each member owner 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, 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 the Company's independent Audit and Compliance Committee of the Board of Directors (the "Audit and Compliance Committee"). In connection with Class B common units exchanged for Class A common shares during the three months ended September 30, 2018 , approximately 0.8 million Class B common units were contributed to Premier LP, converted to Class A common units and remain outstanding. Correspondingly, approximately 0.8 million Class B common shares were retired during the same period. Refer to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2018 (the " 2018 Annual Report") filed with the Securities and Exchange Commission ("SEC") on August 23, 2018 for further discussion of the Exchange Agreement. At both September 30, 2018 and June 30, 2018 , the public investors, which may include member owners that have received shares of Class A common stock in connection with previous exchanges of their Class B common units and associated Class B common shares for an equal number of Class A common shares, owned approximately 40% of the Company's outstanding common stock through their ownership of Class A common stock. The Company has corrected prior period information within the current period financial statements related to a specific component used in calculating the tax effect on Premier, Inc. net income for purposes of diluted earnings (loss) per share. Diluted earnings (loss) per share for the first quarter of fiscal 2018 was previously stated at $0.36 per share and has been corrected to $0.30 per share. The Company believes the correction is immaterial and the amount had no impact on the Company’s overall financial condition, results of operations or cash flows. |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC and in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which the Company exercised control and when applicable, entities for which the Company had a controlling financial interest or was the primary beneficiary. All intercompany transactions have been eliminated upon consolidation. Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The accompanying condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, 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 audited consolidated financial statements and related footnotes contained in the 2018 Annual Report. |
Variable Interest Entities | Variable Interest Entities Premier LP is a variable interest entity ("VIE") as the limited partners do not have the ability to exercise a substantive removal right with respect to the general partner. The Company does not hold a majority interest but, through Premier GP, has the exclusive power and authority to manage the business and affairs of Premier LP, to make all decisions with respect to driving the economic performance of Premier LP, and has both an obligation to absorb losses and a right to receive benefits. As such, the Company is the primary beneficiary of the VIE and consolidates the operations of Premier LP under the Variable Interest Model. |
Use of Estimates in the Preparation of Financial Statements | Use of Estimates in the Preparation of Financial Statements The preparation of the Company's condensed consolidated financial statements in accordance with GAAP 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. Significant estimates are evaluated on an ongoing basis, including estimates for net administrative fees revenue, other services and support revenue, contract assets, deferred revenue, contract costs, allowances for doubtful accounts, useful lives of property and equipment, stock-based compensation, payables under tax receivable agreements ("TRAs"), deferred tax balances including valuation allowances on deferred tax assets, uncertain tax positions, values of investments not publicly traded, projected future cash flows used in the evaluation of asset impairment, values of put and call rights, values of earn-out liabilities and the allocation of purchase prices. 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. Given the Company's use of estimates referenced above, it is important to highlight that on December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act ("TCJA"). The TCJA includes significant changes to the U.S. corporate income tax system, specifically reducing the U.S. federal corporate income tax rate from 35% to 21%. As changes under the TCJA are broad and complex, the Company continues to interpret the breadth of its immediate and long-term impacts. The Company notes that concurrent with the enactment of the TCJA, the SEC issued Staff Accounting Bulletin No. 118 ("SAB 118"), which provides guidance on accounting for the tax effects of the TCJA. SAB 118 provides a measurement period that should not extend beyond one year from the TCJA enactment date for companies to complete the accounting required under the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the TCJA for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the TCJA is incomplete but it is able to determine a reasonable estimate, it must record a provisional amount on its financial statements. If a company cannot determine a provisional estimate to be included on its financial statements, it should continue to apply ASC 740 on the basis of the provision of the tax laws that were in effect immediately prior to the enactment of the TCJA. With this in mind, the Company will continue to prescribe provisional relief under SAB 118 through the one year measurement period to calculate components of its deferred tax balances. While the Company is able to provide reasonable estimates of the impacts related to the TCJA, the final impact may differ from these estimates due to, among other things, changes in interpretations, assumptions, additional guidance that may be released by the Internal Revenue Service and other actions that we may take that are yet to be determined. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory , which removes the prohibition in ASC 740 against the immediate recognition of the current and deferred income tax effects of intra-entity transfers of assets other than inventory. The guidance is intended to reduce the complexity of GAAP and diversity in practice related to the tax consequences of certain types of intra-entity asset transfers, particularly those involving intellectual property. The Company adopted this standard effective July 1, 2018. The implementation of this ASU did not have a material effect on the Company's condensed consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , which is intended to provide users of financial statements with more useful information on the recognition, measurement, presentation, and disclosure of financial instruments. The Company adopted this standard effective July 1, 2018. The implementation of this ASU did not have a material effect on the Company's condensed consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes nearly all existing revenue recognition guidance. 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 allowed for either full retrospective or modified retrospective adoption. In August 2015, the FASB issued an amendment in ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date , to defer the effective date of the new standard for all entities by one year. The new standard, as amended, is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption as of the original effective date for public entities is permitted. In March 2016, the FASB issued another amendment in ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations , related to a third party providing goods or services to a customer. When another party is involved in providing goods or services to a customer, an entity is required to determine whether the nature of its promise is to provide the specified good or service itself or to arrange for the good or service to be provided by a third party. If the entity provides the specific good or service itself, the entity acts as a principal. If an entity arranges for the good or service to be provided by a third party, the entity acts as an agent. The standard requires the principal to recognize revenue for the gross amount and the agent to recognize revenue for the amount of any fee or commission for which it expects to be entitled in exchange for arranging for the specified good or service to be provided. The new standard is effective with ASU 2014-09. In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , which amends specific aspects of ASU 2014-09, including how to identify performance obligations and guidance related to licensing implementation. This amendment provides guidance on determining whether an entity's promise to grant a license provides a customer with either a right to use the entity's intellectual property or a right to access the entity's intellectual property. The amendment is effective with ASU 2014-09. In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients , which clarifies specific aspects of ASU 2014-09, clarifying how to identify performance obligations and guidance related to its promise in granting a license of intellectual property. This new standard provides guidance to allow entities to disregard items that are immaterial in the context of the contract, clarify when a promised good or service is separately identifiable and allow an entity to elect to account for the cost of shipping and handling performed after control of a good has been transferred to the customer as a fulfillment cost. The new standard also clarifies how an entity should evaluate the nature of its promise in granting a license of intellectual property to help determine whether it recognizes revenue over time or at a point in time and addresses how entities should consider license renewals and restrictions. The new standard is effective with ASU 2014-09. In December 2016, the FASB issued ASU 2016-20, Technical Corrections and Improvements to Topic 606: Revenue from Contracts with Customers , which clarifies specific aspects of ASU 2014-09, including allowing entities not to make quantitative disclosures about remaining performance obligations in certain cases and requiring entities that use any of the new or previously existing optional exemptions to expand their qualitative disclosures. The new standard also makes twelve other technical corrections and modifications to ASU 2014-09. The new standard is effective with ASU 2014-09. The Company adopted this standard effective July 1, 2018 using the modified retrospective approach. Refer to the "Effects of Topic 606" below for more information related to the impact of this standard on the Company's significant accounting policies and condensed consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted In August 2018, the FASB issued ASU 2018-15, Intangibles- Goodwill and Other- Internal Use Software (Topic 350): Customer Account for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , which requires customers in a cloud computing arrangement (i.e., hosting arrangement) that is a service contract to follow the internal use software guidance in ASC 350-40 to determine which implementation costs to capitalize as assets or expense as incurred. More specifically, capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted including adoption in any interim periods. Entities have the option to apply the guidance prospectively to all implementation costs incurred after the date of adoption or retrospectively. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework- Changes to Disclosure Requirements for Fair Value Measurement , which improves the effectiveness of fair value measurement disclosures by eliminating, adding and modifying certain disclosure requirements for fair value measurements as part of its disclosure framework project. More specifically, entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which eliminates Step 2 from the goodwill impairment test. The guidance requires an entity to perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value. In addition, the guidance eliminates the requirement for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment. The standard is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted for interim and annual goodwill impairment tests performed after January 1, 2017. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , which is intended to increase transparency and comparability among organizations of accounting for leasing arrangements. This guidance establishes a right-of-use model that requires a lessee to record a right-of-use asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. Entities will be required to recognize and measure leases as of the earliest period presented using a modified retrospective approach. The standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The new standard will be effective for the Company for the fiscal year beginning July 1, 2019. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of the new standard on its consolidated financial statements and related disclosures. |
Effect of Topic 606 | Effects of Topic 606 As a result of adopting Topic 606, the Company's accounting policies and condensed consolidated financial statements were updated as follows: Contract Assets Supply Chain Services contract assets represent estimated customer purchases on supplier contracts for which administrative fees have been earned, but not collected. Performance Services contract assets represent revenue earned for services provided but which the Company is not contractually able to bill as of the end of the respective reporting period. Contract Costs Contract costs represent amounts the Company has capitalized and reflect the incremental costs of obtaining and fulfilling a contract, which include sales commissions and costs related to implementing SaaS informatics tools. For commissions on new contracts, these costs are amortized over the life of the expected relationship with the customer for the respective performance obligation. For renewals, commissions are amortized over the contract life with the customer. Implementation costs are amortized straight-line, once the tool is implemented, over the life of the expected relationship with the customer for the respective performance obligation, which is consistent with the transfer of services to the customer to which the implementation relates. The Company's contract costs are included in other assets on the Condensed Consolidated Balance Sheets, while the associated amortization related to sales commissions is included in selling, general and administrative expenses and the associated amortization related to implementation costs is included in cost of revenue in the Condensed Consolidated Statements of Income. Deferred Revenue Deferred revenue consists of unrecognized revenue related to advanced customer invoicing or member payments received prior to fulfillment of the Company's revenue recognition criteria. Substantially all deferred revenue consists of deferred subscription fees and deferred consulting fees. Subscription fees for Company-hosted SaaS applications are deferred until the customer's unique data records have been incorporated into the underlying software database, or until customer site-specific software has been implemented and the customer has access to the software. Deferred consulting fees arise upon invoicing to customers prior to services being performed. Performance Obligations A performance obligation is a promise to transfer a distinct good or service to a customer. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Contracts may have a single performance obligation as the promise to transfer individual goods or services is not separately identifiable from other promises and, therefore, not distinct; while other contracts may have multiple performance obligations, most commonly due to the contract covering multiple deliverable arrangements (licensing fees, implementation fees, subscription fees, professional fees for consulting services, etc.). Revenue Recognition The Company accounts for a contract with a customer when the contract is committed, the rights of the parties, including payment terms, are identified, the contract has commercial substance and consideration is probable of collection. Revenue is recognized when, or as, control of a promised product or service transfers to a customer, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for transferring those products or services. If the consideration promised in a contract includes a variable amount, the Company estimates the amount to which it expects to be entitled using either the expected value or most likely amount method. The Company’s contracts may include terms that could cause variability in the transaction price, including, for example, revenue share, rebates, discounts, and variable fees based on performance. The Company only includes estimated amounts of consideration in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. These estimates require management to make complex, difficult or subjective judgments, and to make estimates about the effect of matters inherently uncertain. As such, the Company may not be able to reliably estimate variable fees based on performance in certain long-term arrangements due to uncertainties that are not expected to be resolved for a long period of time or when the Company’s experience with similar types of contracts is limited. Estimates of variable consideration and the determination of whether to include estimated amounts of consideration in the transaction price are based on information (historical, current and forecasted) that is reasonably available to the Company, taking into consideration the type of customer, the type of transaction and the specific facts and circumstances of each arrangement. Additionally, management performs periodic analyses to verify the accuracy of estimates for variable consideration. Although the Company believes that its approach in developing estimates and reliance on certain judgments and underlying inputs is reasonable, actual results could differ which may result in exposure of increases or decreases in revenue that could be material. Net Administrative Fees Revenue Net administrative fees revenue is a single performance obligation earned through a series of distinct daily services and includes maintaining a network of members to participate in the group purchasing program and providing suppliers access to the Company's members. Revenue is generated through administrative fees received from suppliers, which are estimated based on the total dollar volume of goods and services purchased by the Company's members in connection with its GPO programs and is included in service revenue in the accompanying Condensed Consolidated Statements of Income. The Company, through its GPO programs, aggregates member purchasing power to negotiate pricing discounts and improve contract terms with suppliers. Contracted suppliers pay the Company administrative fees which generally represent 1% to 3% of the gross purchase price of goods and services sold to members under the contracts the Company has negotiated. Administrative fees are variable consideration and are recognized as earned based upon estimated purchases by the Company's members utilizing the Company's GPO supplier contracts. The Company estimates revenue using an estimated value approach using predictive analytics based on historical member spend and updates for current trends and expectations. Member and supplier contracts substantiate persuasive evidence of an arrangement. The Company does not take title to the underlying equipment or products purchased by members through its GPO supplier contracts. Administrative fee revenue receivable is included in contract assets in the accompanying Condensed Consolidated Balance Sheet. The Company pays revenue share equal to a percentage of gross administrative fees, which is estimated according to the members' contractual agreements with the Company using a portfolio approach based on historical revenue fee share percentages and adjusted for current or anticipated trends. Revenue share is recognized as a reduction to gross administrative fees revenue to arrive at a net administrative fees revenue, and the corresponding revenue share liability is included in revenue share obligations in the accompanying Condensed Consolidated Balance Sheets. Product Revenue Specialty pharmacy revenue is generated through a single performance obligation through dispensing prescription medication to customers. Revenue is recognized at a point in time as the prescription medication is dispensed to the customers and is recorded net of the estimated contractual adjustments under agreements with Medicare, Medicaid and other managed care plans. Consideration from specialty pharmacy is variable as payments for the products provided under such agreements vary from period to period and are based on defined allowable reimbursements rather than on the basis of standard billing rates. The difference between the standard billing rate and allowable reimbursement rate results in contractual adjustments which are recorded as deductions from the transaction price. Direct sourcing generates revenue through products sold to distributors and to hospitals. Revenue is recognized once control of medical products has been transferred to members and is recorded net of discounts and rebates offered to customers. Discounts and rebates are estimated based on contractual terms and historical trends. Other Services and Support Revenue Within Performance Services, which provides technology with wrap-around service offerings, revenue consists of SaaS informatics products subscriptions, certain perpetual and term licenses, performance improvement collaborative and other service subscriptions, professional fees for consulting services, and insurance services management fees and commissions from group-sponsored insurance programs. SaaS informatics subscriptions include the right to use the Company's proprietary hosted technology on a SaaS basis, training and member support to deliver improvements in cost management, quality and safety, value-based care and provider analytics. SaaS arrangements create a single performance obligation for each subscription within the contract in which the nature of the obligation is a stand-ready obligation, and each day of service meets the criteria for over time recognition. Pricing varies by application and size of healthcare system. Informatics subscriptions are generally three to five year agreements with automatic renewal clauses and annual price escalators that typically do not allow for early termination. These agreements do not allow for physical possession of the software. Subscription fees are typically billed on a monthly basis and revenue is recognized as a single deliverable on a straight-line basis over the remaining contractual period following implementation. Implementation involves the completion of data preparation services that are unique to each member's data set and, in certain cases, the installation of member site-specific software, in order to access and transfer member data into the Company's hosted SaaS informatics products. Implementation is generally 60 to 240 days following contract execution before the SaaS informatics products can be fully utilized by the member. The Company sells certain perpetual and term licenses that include professional services and post-contract customer support in the form of maintenance and support services. The license, professional services and maintenance services each represent a distinct promise and are identified as separate performance obligations. Pricing varies by application and size of healthcare system. Fees under these contracts include the license fees, professional services fees and the maintenance and support services fees. The Company recognizes the license fees upon delivery of the licenses, the professional services fees over the implementation period, and the maintenance and support services fees straight-line over the remaining contract term following implementation. Generally, implementation is approximately 240 days following contract execution before the products can be fully utilized by the member. Revenue from performance improvement collaboratives and other service subscriptions that support the Company's offerings in cost management, quality and safety and value-based care is recognized over the service period as the services are provided, which is generally one year. Performance improvement collaboratives and other service subscriptions revenue is considered one performance obligation and is generated by providing customers access to online communities whereby data is housed and available for analytics and benchmarking. Professional fees for consulting services are sold under contracts, the terms of which vary based on the nature of the engagement. These services typically include general consulting, report based consulting and cost savings initiatives. Promised services under such consulting engagements are typically not considered distinct and are regularly combined and accounted for as one performance obligation. Fees are billed as stipulated in the contract, and revenue is recognized on a proportional performance method as services are performed or when deliverables are provided. In situations where the contracts have significant contract performance guarantees, the performance guarantees are estimated and accounted for as a form of variable consideration when determining the transaction price. In the event that guaranteed savings levels are not achieved, the Company may have to perform additional services at no additional charge in order to achieve the guaranteed savings or pay the difference between the savings that were guaranteed and the actual achieved savings. Occasionally, our entitlement to consideration is predicated on the occurrence of an event such as the delivery of a report for which client acceptance is required. However, except for event-driven point-in-time transactions, the majority of services provided within this service line are delivered over time due to the continuous benefit provided to our customers. Consulting arrangements can require significant estimates for the transaction price and estimated number of hours within an engagement. These estimates are based on the expected value which is derived from outcomes from historical contracts that are similar in nature and forecasted amounts based on anticipated savings for the new agreements. The transaction price is generally constrained until the target transaction price becomes more certain. Insurance services management fees are recognized in the period in which such services are provided. Commissions from group sponsored insurance programs is earned by acting as an intermediary in the placement of effective insurance policies. Under this arrangement, revenue is recognized at a point in time on the effective date of the associated policies when control of the policy transfers to the customer and is constrained for estimated early terminations. Certain administrative and/or patient management integrated pharmacy services are provided in situations where prescriptions are sent back to member health systems for dispensing. Additionally, the Company derives revenue from pharmaceutical manufacturers for providing patient education and utilization data. Revenue is recognized as these services are provided. Multiple Deliverable Arrangements The Company enters into agreements where the individual deliverables discussed above, such as SaaS subscriptions and consulting services, are bundled into a single service arrangement. These agreements are generally provided over a time period ranging from approximately three months to five years after the applicable contract execution date. Revenue, including both fixed and variable consideration, is allocated to the individual performance obligations within the arrangement based on the standalone selling price when it is sold separately in a stand-alone arrangement. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Financial Information of Premier LP | The assets and liabilities of Premier LP at September 30, 2018 and June 30, 2018 consisted of the following (in thousands): September 30, 2018 June 30, 2018 New revenue standard (a) Previous revenue standard Assets Current $ 608,308 $ 393,863 Noncurrent 1,589,083 1,577,974 Total assets of Premier LP $ 2,197,391 $ 1,971,837 Liabilities Current $ 488,904 $ 457,172 Noncurrent 134,089 128,793 Total liabilities of Premier LP $ 622,993 $ 585,965 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Net income attributable to Premier LP during the three months ended September 30, 2018 and 2017 was as follows (in thousands): Three Months Ended September 30, 2018 2017 New revenue standard (a) Previous revenue standard Premier LP net income $ 92,262 $ 72,291 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Premier LP's cash flows for the three months ended September 30, 2018 and 2017 consisted of the following (in thousands): Three Months Ended September 30, 2018 2017 New revenue standard (a) Previous revenue standard Net cash provided by (used in): Operating activities $ 68,926 $ 88,407 Investing activities (25,062 ) (16,613 ) Financing activities (34,726 ) (100,476 ) Net increase (decrease) in cash and cash equivalents 9,138 (28,682 ) Cash and cash equivalents at beginning of year 117,741 133,451 Cash and cash equivalents at end of period $ 126,879 $ 104,769 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Impact of Adopting Topic 606 | The following tables summarize the impacts of adopting Topic 606 on the Company's condensed consolidated financial statements for the quarter ended September 30, 2018 (in thousands, except per share data). See Note 5 - Contract Balances and Note 16 - Segments for more information. Cumulative Effect - Adoption of New Revenue Standard Impact of change in accounting principle June 30, 2018 As presented Impact of new revenue standard July 1, 2018 New revenue standard Assets Accounts receivable (net of $1,841 allowance for doubtful accounts) $ 185,874 $ (5,421 ) $ 180,453 Contract assets $ — $ 169,684 $ 169,684 Total current assets $ 428,618 $ 164,263 $ 592,881 Deferred income tax assets $ 305,624 $ (7,106 ) $ 298,518 Other assets $ 3,991 $ 15,390 $ 19,381 Total assets $ 2,312,216 $ 172,547 $ 2,484,763 Liabilities, redeemable limited partners' capital and stockholders' deficit Revenue share obligations $ 78,999 $ 43,880 $ 122,879 Deferred revenue $ 39,785 $ (2,195 ) $ 37,590 Total current liabilities $ 448,882 $ 41,685 $ 490,567 Deferred tax liabilities $ 17,569 $ 3,597 $ 21,166 Total liabilities $ 818,870 $ 45,282 $ 864,152 Accumulated deficit $ (1,277,581 ) $ 127,265 $ (1,150,316 ) Total stockholders' deficit $ (1,427,064 ) $ 127,265 $ (1,299,799 ) Total liabilities, redeemable limited partners' capital and stockholders' deficit $ 2,312,216 $ 172,547 $ 2,484,763 Condensed Consolidated Balance Sheet - Selected Financial Data Impact of change in accounting principle September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Assets Accounts receivable (net of $4,867 allowance for doubtful accounts) $ 182,254 $ (8,381 ) $ 190,635 Contract assets $ 202,961 $ 202,961 $ — Prepaid expenses and other current assets $ 29,675 $ (813 ) $ 30,488 Total current assets $ 626,202 $ 193,767 $ 432,435 Deferred income tax assets $ 301,267 $ (6,177 ) $ 307,444 Other assets $ 22,727 $ 15,248 $ 7,479 Total assets $ 2,516,552 $ 202,838 $ 2,313,714 Liabilities, redeemable limited partners' capital and stockholders' deficit Revenue share obligations $ 119,578 $ 50,448 $ 69,130 Limited partners' distribution payable $ 14,993 $ 2,801 $ 12,192 Deferred revenue $ 34,259 $ (1,604 ) $ 35,863 Other liabilities $ 7,050 $ 1,233 $ 5,817 Total current liabilities $ 469,832 $ 52,878 $ 416,954 Deferred tax liabilities $ 21,950 $ 4,240 $ 17,710 Total liabilities $ 833,745 $ 57,118 $ 776,627 Accumulated deficit $ (1,820,000 ) $ 145,720 $ (1,965,720 ) Total stockholders' deficit $ (1,955,817 ) $ 145,720 $ (2,101,537 ) Total liabilities, redeemable limited partners' capital and stockholders' deficit $ 2,516,552 $ 202,838 $ 2,313,714 Condensed Consolidated Statement of Income Impact of change in accounting principle Three months ended September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Net revenue: Net administrative fees $ 162,000 $ 15,184 $ 146,816 Other services and support 88,076 5,379 82,697 Services 250,076 20,563 229,513 Products 151,470 (11,962 ) 163,432 Net revenue 401,546 8,601 392,945 Cost of revenue: Services 43,372 (1,933 ) 45,305 Products 145,621 (11,371 ) 156,992 Cost of revenue 188,993 (13,304 ) 202,297 Gross profit 212,553 21,905 190,648 Operating expenses: Selling, general and administrative 105,870 (1,111 ) 106,981 Research and development 340 — 340 Amortization of purchased intangible assets 13,638 — 13,638 Operating expenses 119,848 (1,111 ) 120,959 Operating income 92,705 23,016 69,689 Equity in net income of unconsolidated affiliates 2,690 — 2,690 Interest and investment loss, net (688 ) — (688 ) Loss on disposal of long-lived assets — — — Other income (expense) (1,941 ) — (1,941 ) Other income, net 61 — 61 Income before income taxes 92,766 23,016 69,750 Income tax expense 10,793 1,759 9,034 Net income 81,973 21,257 60,716 Net income attributable to non-controlling interest in Premier LP (55,113 ) (13,373 ) (41,740 ) Adjustment of redeemable limited partners' capital to redemption amount (708,193 ) 10,572 (718,765 ) Net income (loss) attributable to stockholders $ (681,333 ) $ 18,456 $ (699,789 ) Weighted average shares outstanding: Basic 53,221 — 53,221 Diluted 53,221 — 53,221 Earnings (loss) per share attributable to stockholders: Basic $ (12.80 ) $ 0.35 $ (13.15 ) Diluted $ (12.80 ) $ 0.35 $ (13.15 ) Condensed Consolidated Statement of Comprehensive Income Impact of change in accounting principle Three months ended September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Net income $ 81,973 $ 21,257 $ 60,716 Less: Comprehensive income attributable to non-controlling interest (55,113 ) (13,373 ) (41,740 ) Comprehensive income attributable to Premier, Inc. $ 26,860 $ 7,884 $ 18,976 Condensed Consolidated Statement of Cash Flows Impact of change in accounting principle Three months ended September 30, 2018 As presented Impact of new revenue standard Previous revenue standard Operating activities Net income $ 81,973 $ 21,257 $ 60,716 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 34,145 — 34,145 Equity in net income of unconsolidated affiliates (2,690 ) — (2,690 ) Deferred income taxes 4,588 (290 ) 4,878 Stock-based compensation 6,195 — 6,195 Changes in operating assets and liabilities: Accounts receivable, contract assets, prepaid expenses and other current assets (41,427 ) (29,503 ) (11,924 ) Other assets (2,235 ) 144 (2,379 ) Inventories (2,097 ) — (2,097 ) Accounts payable, accrued expenses, deferred revenue and other current liabilities (21,776 ) 8,392 (30,168 ) Long-term liabilities (14 ) — (14 ) Loss on FFF put and call rights 3,283 — 3,283 Other operating activities 382 — 382 Net cash provided by operating activities 60,327 — 60,327 Net cash used in investing activities (25,062 ) — (25,062 ) Net cash used in financing activities (45,229 ) — (45,229 ) Net decrease in cash and cash equivalents (9,964 ) — (9,964 ) Cash and cash equivalents at beginning of year 152,386 — 152,386 Cash and cash equivalents at end of period $ 142,422 $ — $ 142,422 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Unconsolidated Affiliates | The Company's investments in unconsolidated affiliates consisted of the following (in thousands): Carrying Value Equity in Net Income (Loss) Three Months Ended September 30, September 30, 2018 June 30, 2018 2018 2017 FFF $ 94,425 $ 91,804 $ 2,621 $ 4,337 Bloodbuy 1,893 1,918 (25 ) (33 ) PharmaPoint — — — (52 ) Other investments 425 331 94 — Total investments $ 96,743 $ 94,053 $ 2,690 $ 4,252 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | The following table provides a summary of the Company's financial assets and liabilities which are measured at fair value on a recurring basis (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) September 30, 2018 Cash equivalents $ 62,038 $ 62,038 $ — $ — FFF call right 488 — — 488 Deferred compensation plan assets 47,523 47,523 — — Total assets $ 110,049 $ 109,561 $ — $ 488 FFF put right 45,200 — — 45,200 Total liabilities $ 45,200 $ — $ — $ 45,200 June 30, 2018 Cash equivalents $ 62,684 $ 62,684 $ — $ — FFF call right 610 — — 610 Deferred compensation plan assets 48,215 48,215 — — Total assets $ 111,509 $ 110,899 $ — $ 610 FFF put right 42,041 — — 42,041 Total liabilities $ 42,041 $ — $ — $ 42,041 |
Reconciliation of Earn-Out Liabilities and FFF Put Rights | A reconciliation of the Company's FFF put and call rights and earn-out liabilities is as follows (in thousands): Beginning Balance Gain (Loss) Ending Balance Three Months Ended September 30, 2018 FFF call right $ 610 $ (122 ) $ 488 Total Level 3 assets $ 610 $ (122 ) $ 488 FFF put right 42,041 (3,159 ) 45,200 Total Level 3 liabilities $ 42,041 $ (3,159 ) $ 45,200 Three Months Ended September 30, 2017 FFF call right $ 4,655 $ (62 ) $ 4,593 Total Level 3 assets $ 4,655 $ (62 ) $ 4,593 Earn-out liabilities $ 21,310 $ (365 ) $ 21,675 FFF put right 24,050 42 24,008 Total Level 3 liabilities $ 45,360 $ (323 ) $ 45,683 |
Reconciliation of FFF Call Rights | A reconciliation of the Company's FFF put and call rights and earn-out liabilities is as follows (in thousands): Beginning Balance Gain (Loss) Ending Balance Three Months Ended September 30, 2018 FFF call right $ 610 $ (122 ) $ 488 Total Level 3 assets $ 610 $ (122 ) $ 488 FFF put right 42,041 (3,159 ) 45,200 Total Level 3 liabilities $ 42,041 $ (3,159 ) $ 45,200 Three Months Ended September 30, 2017 FFF call right $ 4,655 $ (62 ) $ 4,593 Total Level 3 assets $ 4,655 $ (62 ) $ 4,593 Earn-out liabilities $ 21,310 $ (365 ) $ 21,675 FFF put right 24,050 42 24,008 Total Level 3 liabilities $ 45,360 $ (323 ) $ 45,683 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible assets, net consisted of the following (in thousands): Useful Life September 30, 2018 June 30, 2018 Member relationships 14.7 years $ 220,100 $ 220,100 Technology 5.0 years 142,317 142,317 Customer relationships 8.3 years 48,120 48,120 Trade names 8.3 years 22,710 22,710 Distribution network 10.0 years 22,400 22,400 Favorable lease commitments 10.1 years 11,393 11,393 Non-compete agreements 5.9 years 8,710 8,710 Total intangible assets 475,750 475,750 Accumulated amortization (167,273 ) (153,635 ) Intangible assets, net $ 308,477 $ 322,115 |
GOODWILL (Tables)
GOODWILL (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consisted of the following (in thousands): September 30, 2018 June 30, 2018 Supply Chain Services $ 400,348 $ 400,348 Performance Services 506,197 506,197 Total goodwill $ 906,545 $ 906,545 |
DEBT (Tables)
DEBT (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (in thousands): Commitment Amount Due Date September 30, 2018 June 30, 2018 Credit Facility $ 750,000 June 24, 2019 $ 100,000 $ 100,000 Notes payable — Various 7,218 7,212 Total debt 107,218 107,212 Less: current portion (101,771 ) (100,250 ) Total long-term debt $ 5,447 $ 6,962 |
REDEEMABLE LIMITED PARTNERS' _2
REDEEMABLE LIMITED PARTNERS' CAPITAL (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Temporary Equity Disclosure [Abstract] | |
Changes in Redeemable Limited Partners' Capital | The table below provides a summary of the changes in the redeemable limited partners' capital from June 30, 2018 to September 30, 2018 (in thousands): Receivables From Limited Partners Redeemable Limited Partners' Capital Total Redeemable Limited Partners' Capital June 30, 2018 $ (2,205 ) $ 2,922,615 $ 2,920,410 Distributions applied to receivables from limited partners 437 — 437 Net income attributable to non-controlling interest in Premier LP — 55,113 55,113 Distributions to limited partners — (14,993 ) (14,993 ) Exchange of Class B common units for Class A common stock by member owners — (30,536 ) (30,536 ) Adjustment of redeemable limited partners' capital to redemption amount — 708,193 708,193 September 30, 2018 $ (1,768 ) $ 3,640,392 $ 3,638,624 |
Schedule of Quarterly Distributions and Quarterly Exchanges | Quarterly exchanges during the current fiscal year were as follows (in thousands, except Class B common units). Date of Quarterly Exchange Number of Class B Common Units Exchanged Reduction in Redeemable Limited Partners' Capital July 31, 2018 816,468 $ 30,536 Quarterly distributions made to limited partners during the current fiscal year are as follows (in thousands): Date Distribution (a) August 23, 2018 $ 15,465 (a) Distributions are equal to Premier LP's total taxable income from the preceding fiscal quarter-to-date period for each respective distribution date multiplied by the Company's standalone effective combined federal, state and local income tax rate for each respective distribution date. Premier LP expects to make a $15.0 million quarterly distribution on or before November 21, 2018. The distribution is reflected in limited partners' distribution payable in the accompanying Condensed Consolidated Balance Sheets at September 30, 2018 . |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Reconciliation of the Numerator and Denominator Used for Basic and Diluted Earnings (Loss) Per Share | The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings (loss) per share (in thousands, except per share amounts): Three Months Ended September 30, 2018 2018 2017 As presented Previous revenue standard (a) Previous revenue standard Numerator for basic earnings (loss) per share: Net income (loss) attributable to stockholders $ (681,333 ) $ (699,789 ) $ 336,430 Numerator for diluted earnings (loss) per share: Net income (loss) attributable to stockholders $ (681,333 ) $ (699,789 ) $ 336,430 Adjustment of redeemable limited partners' capital to redemption amount — — (320,424 ) Net income attributable to non-controlling interest in Premier LP — — 44,610 Net income (loss) (681,333 ) (699,789 ) 60,616 Tax effect on Premier, Inc. net income (b) — — (18,156 ) Adjusted net income (loss) $ (681,333 ) $ (699,789 ) $ 42,460 Denominator for basic earnings (loss) per share: Weighted average shares (c) 53,221 53,221 52,909 Denominator for diluted earnings (loss) per share: Weighted average shares (c) 53,221 53,221 52,909 Effect of dilutive securities: (d) Stock options — — 351 Restricted stock — — 304 Class B shares outstanding — — 86,482 Weighted average shares and assumed conversions 53,221 53,221 140,046 Basic earnings (loss) per share $ (12.80 ) $ (13.15 ) $ 6.36 Diluted earnings (loss) per share $ (12.80 ) $ (13.15 ) $ 0.30 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. (b) Represents income tax expense related to Premier, Inc. retaining the portion of net income attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings (loss) per share. (c) Weighted average number of common shares used for basic earnings (loss) per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for the three months ended September 30, 2018 and 2017 . (d) For the three months ended September 30, 2018 , the effect of 0.6 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect, and the effect of 1.0 million stock options and restricted stock units and 79.8 million Class B common units exchangeable for Class A common shares were excluded from diluted weighted average shares outstanding due to the net loss attributable to stockholders sustained for the quarter and as including them would have an anti-dilutive effect for the period. Additionally, the effect of 0.7 million performance share awards was excluded from diluted weighted average shares outstanding as they had not satisfied the applicable performance criteria at the end of the period. For the three months ended September 30, 2017 , the effect of 1.4 million stock options was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect, and the effect of 0.6 million performance share awards was excluded from diluted weighted average shares outstanding as they had not satisfied the applicable performance criteria at the end of the period. |
Schedule of Exchange Agreement | The following table presents certain information regarding the exchange of Class B common units and associated Class B common stock for Premier's Class A common stock and/or cash in connection with the quarterly exchanges pursuant to the terms of the Exchange Agreement, including activity related to the Class A and Class B common units and Class A and Class B common stock through the date of the applicable quarterly exchange: Quarterly Exchange by Member Owners Class B Common Shares Retired Upon Exchange (a) Class B Common Shares Outstanding After Exchange (a) Class A Common Shares Outstanding After Exchange (b) Percentage of Combined Voting Power Class B/Class A Common Stock July 31, 2018 816,468 79,519,233 53,256,897 60%/40% October 31, 2018 (c) 9,807,651 69,601,752 63,734,585 52%/48% (a) The number of Class B common shares retired or outstanding is equivalent to the number of Class B common units retired upon exchange or outstanding after the exchange, as applicable. (b) The number of Class A common shares outstanding after exchange also includes activity related to the Company's share repurchase program (see Note 10 - Stockholders' Deficit ), equity incentive plan (see Note 12 - Stock-Based Compensation ) and departed member owners (see Note 9 - Redeemable Limited Partners' Capital ). (c) As the quarterly exchange occurred on October 31, 2018, the impact of the exchange is not reflected in the condensed consolidated financial statements for the quarter ended September 30, 2018 . The Company utilized 4,287,471 treasury shares to facilitate a portion of this exchange, and as a result had zero Class A common shares held in treasury as of October 31, 2018, after the exchange. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Information Related to Restricted Stock | The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2018 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2018 605,873 $ 33.25 1,318,047 $ 33.00 3,499,251 $ 30.53 Granted 225,233 $ 44.23 575,957 $ 43.43 — $ — Vested/exercised (119,426 ) $ 35.57 (359,751 ) $ 35.43 (230,367 ) $ 32.57 Forfeited (15,417 ) $ 32.71 (40,877 ) $ 32.67 (34,179 ) $ 32.55 Outstanding at September 30, 2018 696,263 $ 36.42 1,493,376 $ 36.45 3,234,705 $ 30.37 Stock options outstanding and exercisable at September 30, 2018 2,737,472 $ 30.00 |
Schedule of Information Related to Performance Share Awards | The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2018 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2018 605,873 $ 33.25 1,318,047 $ 33.00 3,499,251 $ 30.53 Granted 225,233 $ 44.23 575,957 $ 43.43 — $ — Vested/exercised (119,426 ) $ 35.57 (359,751 ) $ 35.43 (230,367 ) $ 32.57 Forfeited (15,417 ) $ 32.71 (40,877 ) $ 32.67 (34,179 ) $ 32.55 Outstanding at September 30, 2018 696,263 $ 36.42 1,493,376 $ 36.45 3,234,705 $ 30.37 Stock options outstanding and exercisable at September 30, 2018 2,737,472 $ 30.00 |
Schedule of Information Related to Stock Options | The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2018 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2018 605,873 $ 33.25 1,318,047 $ 33.00 3,499,251 $ 30.53 Granted 225,233 $ 44.23 575,957 $ 43.43 — $ — Vested/exercised (119,426 ) $ 35.57 (359,751 ) $ 35.43 (230,367 ) $ 32.57 Forfeited (15,417 ) $ 32.71 (40,877 ) $ 32.67 (34,179 ) $ 32.55 Outstanding at September 30, 2018 696,263 $ 36.42 1,493,376 $ 36.45 3,234,705 $ 30.37 Stock options outstanding and exercisable at September 30, 2018 2,737,472 $ 30.00 |
Schedule of Unrecognized Stock-Based Compensation Expense | Unrecognized stock-based compensation expense at September 30, 2018 was as follows (in thousands): Unrecognized Stock-Based Compensation Expense Weighted Average Amortization Period Restricted stock $ 15,830 2.38 years Performance share awards 36,826 2.26 years Stock options 4,987 1.65 years Total unrecognized stock-based compensation expense $ 57,643 2.24 years |
Schedule of Aggregate Intrinsic Value of Stock Options | The aggregate intrinsic value of stock options at September 30, 2018 was as follows (in thousands): Intrinsic Value of Stock Options Outstanding and exercisable $ 43,186 Expected to vest 6,667 Total outstanding $ 49,853 Exercised during the three months ended September 30, 2018 $ 2,403 |
Assumptions Used for Determining the Fair Value of Stock Options Granted | The Company estimated the fair value of each stock option on the date of grant using a Black-Scholes option-pricing model, applying the following assumptions, and amortized expense over each option's vesting period using the straight-line attribution approach: Three Months Ended September 30, 2017 Expected life (a) 6 years Expected dividend (b) — Expected volatility (c) 32.26% Risk-free interest rate (d) 1.89% Weighted average option grant date fair value $ 11.42 (a) The six -year expected life (estimated period of time outstanding) of stock options granted was estimated using the "Simplified Method" which utilizes the midpoint between the vesting date and the end of the contractual term. This method was utilized for the stock options due to the lack of historical exercise behavior of Premier's employees. (b) No dividends are expected to be paid over the contractual term of the stock options granted, resulting in the use of a zero expected dividend rate. (c) The expected volatility rate is based on the observed historical volatilities of comparable companies. (d) The risk-free interest rate was interpolated from the five -year and seven -year Constant Maturity Treasury rate published by the United States Treasury as of the date of the grant. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents disaggregated revenue by business segment and underlying source (in thousands): Three Months Ended September 30, 2018 2018 2017 As presented Previous revenue standard (a) Previous revenue standard Net revenue: Supply Chain Services Net administrative fees $ 162,000 $ 146,816 $ 150,991 Other services and support 2,344 3,624 2,149 Services 164,344 150,440 153,140 Products 151,470 163,432 152,662 Total Supply Chain Services 315,814 313,872 305,802 Performance Services 85,732 79,073 84,762 Net revenue $ 401,546 $ 392,945 $ 390,564 (a) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands): Three Months Ended September 30, 2018 2017 Depreciation and amortization expense (a) : Supply Chain Services $ 5,619 $ 5,495 Performance Services 25,913 22,918 Corporate 2,613 1,992 Total depreciation and amortization expense $ 34,145 $ 30,405 Capital expenditures: Supply Chain Services $ 495 $ 307 Performance Services 19,374 13,549 Corporate 5,193 2,791 Total capital expenditures $ 25,062 $ 16,647 September 30, 2018 September 30, 2018 June 30, 2018 Total assets: As presented Previous revenue standard (b) Previous revenue standard Supply Chain Services $ 1,210,363 $ 1,051,206 $ 991,837 Performance Services 902,446 850,990 860,409 Corporate 403,743 411,518 459,970 Total assets $ 2,516,552 $ 2,313,714 $ 2,312,216 (a) Includes amortization of purchased intangible assets. (b) The Company adopted Topic 606 effective July 1, 2018, while comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. |
Reconciliation of Income Before Income Taxes to Segment Adjusted EBITDA | A reconciliation of income before income taxes to Segment Adjusted EBITDA is as follows (in thousands): Three Months Ended September 30, 2018 2018 2017 As presented Previous revenue standard (a) Previous revenue standard Income before income taxes $ 92,766 $ 69,750 $ 73,380 Equity in net income of unconsolidated affiliates (b) (2,690 ) (2,690 ) (4,252 ) Interest and investment loss, net (c) 688 688 1,495 Loss on disposal of long-lived assets — — 1,320 Other expense (income) 1,941 1,941 (1,463 ) Operating income 92,705 69,689 70,480 Depreciation and amortization 20,507 20,507 16,507 Amortization of purchased intangible assets 13,638 13,638 13,898 Stock-based compensation (d) 6,337 6,337 8,957 Acquisition related expenses 409 409 3,099 ERP implementation expenses (e) 326 326 335 Equity in net income of unconsolidated affiliates (b) 2,690 2,690 4,252 Deferred compensation plan income (f) 1,336 1,336 1,539 Other expense 673 673 104 Adjusted EBITDA $ 138,621 $ 115,605 $ 119,171 Segment Adjusted EBITDA: Supply Chain Services $ 135,403 $ 119,804 $ 125,620 Performance Services 30,575 23,158 21,221 Corporate (27,357 ) (27,357 ) (27,670 ) Adjusted EBITDA $ 138,621 $ 115,605 $ 119,171 (a) Refer to Note 2 - Significant Accounting Policies for more information related to the impact of the New Revenue Standard. (b) Refer to Note 3 - Investments for further information. (c) Represents interest expense, net and realized gains and losses on our marketable securities. (d) Represents non-cash employee stock-based compensation expense and stock purchase plan expense of $0.1 million during both of the three months ended September 30, 2018 and 2017 . (e) Represents implementation and other costs associated with the implementation of our enterprise resource planning ("ERP") system. (f) Represents realized and unrealized gains and losses and dividend income on deferred compensation plan assets. |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION - Organization (Narrative) (Details) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2018categorysegment$ / shares | Sep. 30, 2017$ / shares | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | |||
Number of business segments | segment | 2 | ||
General partner interest (as a percent) | 40.00% | 40.00% | |
Limited partners ownership interest (as a percent) | 60.00% | 60.00% | |
Diluted earnings (loss) per share (in dollars per share) | $ (12.80) | $ 0.30 | |
Performance services segment | |||
Segment Reporting Information [Line Items] | |||
Number of main categories | category | 3 | ||
Previously reported | |||
Segment Reporting Information [Line Items] | |||
Diluted earnings (loss) per share (in dollars per share) | $ 0.36 |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION - Basis of Presentation (Narrative) (Details) $ in Thousands, shares in Millions | Oct. 01, 2013 | Sep. 30, 2018USD ($)shares | Sep. 30, 2017USD ($) | Jun. 30, 2018 |
Noncontrolling Interest [Line Items] | ||||
Limited partners ownership interest (as a percent) | 60.00% | 60.00% | ||
General partner interest (as a percent) | 40.00% | 40.00% | ||
Reclassification from selling, general and administrative | $ | $ (105,870) | $ (114,321) | ||
Class B common units | ||||
Noncontrolling Interest [Line Items] | ||||
Exchange agreement, conversion ratio | 0.1429 | |||
Unit of partnership, conversion ratio | 1 | |||
Exchanged for cash | Class B common units | ||||
Noncontrolling Interest [Line Items] | ||||
Class B common units and associated Class B common shares exchanged (in shares) | 0.8 | |||
Exchanged for Class A common stock | Class B common units | ||||
Noncontrolling Interest [Line Items] | ||||
Class B common units and associated Class B common shares exchanged (in shares) | 5.9 | |||
Shares retired (in shares) | 0.8 | |||
Reclassification Adjustment | ||||
Noncontrolling Interest [Line Items] | ||||
Reclassification from selling, general and administrative | $ | $ 5,700 |
ORGANIZATION AND BASIS OF PRE_5
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Assets and Liabilities of Premier LP (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Assets | ||
Current | $ 626,202 | $ 428,618 |
Liabilities | ||
Current | 469,832 | 448,882 |
Premier LP | ||
Assets | ||
Current | 608,308 | |
Noncurrent | 1,589,083 | |
Total assets of Premier LP | 2,197,391 | |
Liabilities | ||
Current | 488,904 | |
Noncurrent | 134,089 | |
Total liabilities of Premier LP | $ 622,993 | |
Previous revenue standard | ||
Assets | ||
Current | 428,618 | |
Liabilities | ||
Current | 448,882 | |
Previous revenue standard | Premier LP | ||
Assets | ||
Current | 393,863 | |
Noncurrent | 1,577,974 | |
Total assets of Premier LP | 1,971,837 | |
Liabilities | ||
Current | 457,172 | |
Noncurrent | 128,793 | |
Total liabilities of Premier LP | $ 585,965 |
ORGANIZATION AND BASIS OF PRE_6
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Net Income Attributable to Premier LP (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Variable Interest Entity [Line Items] | ||
Premier LP net income | $ 81,973 | $ 60,616 |
Premier LP | ||
Variable Interest Entity [Line Items] | ||
Premier LP net income | $ 92,262 | |
Previous revenue standard | Premier LP | ||
Variable Interest Entity [Line Items] | ||
Premier LP net income | $ 72,291 |
ORGANIZATION AND BASIS OF PRE_7
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Premier LP's Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Net cash provided by (used in): | ||
Operating activities | $ 60,327 | $ 75,033 |
Investing activities | (25,062) | (16,646) |
Financing activities | (45,229) | (83,002) |
Net decrease in cash and cash equivalents | (9,964) | (24,615) |
Cash and cash equivalents at beginning of year | 152,386 | 156,735 |
Cash and cash equivalents at end of period | 142,422 | 132,120 |
Premier LP | ||
Net cash provided by (used in): | ||
Operating activities | 68,926 | |
Investing activities | (25,062) | |
Financing activities | (34,726) | |
Net decrease in cash and cash equivalents | 9,138 | |
Cash and cash equivalents at beginning of year | 117,741 | |
Cash and cash equivalents at end of period | $ 126,879 | |
Previous revenue standard | Premier LP | ||
Net cash provided by (used in): | ||
Operating activities | 88,407 | |
Investing activities | (16,613) | |
Financing activities | (100,476) | |
Net decrease in cash and cash equivalents | (28,682) | |
Cash and cash equivalents at beginning of year | 133,451 | |
Cash and cash equivalents at end of period | $ 104,769 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details) | 3 Months Ended |
Sep. 30, 2018 | |
Net administrative fees | Minimum | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Administrative fees as percentage of gross purchase price of goods and services sold (percent) | 1.00% |
Net administrative fees | Maximum | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Administrative fees as percentage of gross purchase price of goods and services sold (percent) | 3.00% |
SAAS Informatics | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue recognition timing | Informatics subscriptions are generally three to five year agreements with automatic renewal clauses and annual price escalators that typically do not allow for early termination. These agreements do not allow for physical possession of the software. Subscription fees are typically billed on a monthly basis and revenue is recognized as a single deliverable on a straight-line basis over the remaining contractual period following implementation. Implementation involves the completion of data preparation services that are unique to each member's data set and, in certain cases, the installation of member site-specific software, in order to access and transfer member data into the Company's hosted SaaS informatics products. Implementation is generally 60 to 240 days following contract execution before the SaaS informatics products can be fully utilized by the member. |
License, professional services and maintenance services | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue recognition timing | Generally, implementation is approximately 240 days following contract execution before the products can be fully utilized by the member. |
Performance improvement collaboratives and other services | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue recognition timing | Revenue from performance improvement collaboratives and other service subscriptions that support the Company's offerings in cost management, quality and safety and value-based care is recognized over the service period as the services are provided, which is generally one year. |
Multiple deliverable arrangements | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Revenue recognition timing | The Company enters into agreements where the individual deliverables discussed above, such as SaaS subscriptions and consulting services, are bundled into a single service arrangement. These agreements are generally provided over a time period ranging from approximately three months to five years after the applicable contract execution date. |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Impact of Adopting Topic 606 on Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jul. 01, 2018 | Jun. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful accounts, respectively) | $ 182,254 | $ 185,874 | |||
Contract assets | 202,961 | 0 | |||
Prepaid expenses and other current assets | 29,675 | 23,325 | |||
Total current assets | 626,202 | 428,618 | |||
Deferred income tax assets | 301,267 | 305,624 | |||
Other assets | 22,727 | 3,991 | |||
Total assets | 2,516,552 | 2,312,216 | |||
Revenue share obligations | 119,578 | 78,999 | |||
Limited partners' distribution payable | 14,993 | 15,465 | |||
Deferred revenue | 34,259 | 39,785 | |||
Other liabilities | 7,050 | 7,959 | |||
Total current liabilities | 469,832 | 448,882 | |||
Deferred tax liabilities | 21,950 | 17,569 | |||
Total liabilities | 833,745 | 818,870 | |||
Accumulated deficit | (1,820,000) | (1,277,581) | |||
Total stockholders' deficit | (1,955,817) | (1,427,064) | $ (1,288,561) | $ (1,662,253) | |
Total liabilities, redeemable limited partners' capital and stockholders' deficit | 2,516,552 | 2,312,216 | |||
Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful accounts, respectively) | $ 180,453 | ||||
Contract assets | 169,684 | ||||
Total current assets | 592,881 | ||||
Deferred income tax assets | 298,518 | ||||
Other assets | 19,381 | ||||
Total assets | 2,484,763 | ||||
Revenue share obligations | 122,879 | ||||
Deferred revenue | 37,590 | ||||
Total current liabilities | 490,567 | ||||
Deferred tax liabilities | 21,166 | ||||
Total liabilities | 864,152 | ||||
Accumulated deficit | (1,150,316) | ||||
Total stockholders' deficit | (1,299,799) | ||||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | 2,484,763 | ||||
Impact of new revenue standard | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Contract assets | 169,700 | ||||
Impact of new revenue standard | Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful accounts, respectively) | (8,381) | (5,421) | |||
Contract assets | 202,961 | 169,684 | |||
Prepaid expenses and other current assets | (813) | ||||
Total current assets | 193,767 | 164,263 | |||
Deferred income tax assets | (6,177) | (7,106) | |||
Other assets | 15,248 | 15,390 | |||
Total assets | 202,838 | 172,547 | |||
Revenue share obligations | 50,448 | 43,880 | |||
Limited partners' distribution payable | 2,801 | ||||
Deferred revenue | (1,604) | (2,195) | |||
Other liabilities | 1,233 | ||||
Total current liabilities | 52,878 | 41,685 | |||
Deferred tax liabilities | 4,240 | 3,597 | |||
Total liabilities | 57,118 | 45,282 | |||
Accumulated deficit | 145,720 | 127,265 | |||
Total stockholders' deficit | 145,720 | 127,265 | |||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | 202,838 | $ 172,547 | |||
As presented | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful accounts, respectively) | 185,874 | ||||
Contract assets | 0 | ||||
Total current assets | 428,618 | ||||
Deferred income tax assets | 305,624 | ||||
Other assets | 3,991 | ||||
Total assets | 2,313,714 | 2,312,216 | |||
Revenue share obligations | 78,999 | ||||
Deferred revenue | 39,785 | ||||
Total current liabilities | 448,882 | ||||
Deferred tax liabilities | 17,569 | ||||
Total liabilities | 818,870 | ||||
Accumulated deficit | (1,277,581) | ||||
Total stockholders' deficit | (1,427,064) | ||||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | $ 2,312,216 | ||||
As presented | Topic 606 | |||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||||
Accounts receivable (net of $4,867 and $1,841 allowance for doubtful accounts, respectively) | 190,635 | ||||
Contract assets | 0 | ||||
Prepaid expenses and other current assets | 30,488 | ||||
Total current assets | 432,435 | ||||
Deferred income tax assets | 307,444 | ||||
Other assets | 7,479 | ||||
Total assets | 2,313,714 | ||||
Revenue share obligations | 69,130 | ||||
Limited partners' distribution payable | 12,192 | ||||
Deferred revenue | 35,863 | ||||
Other liabilities | 5,817 | ||||
Total current liabilities | 416,954 | ||||
Deferred tax liabilities | 17,710 | ||||
Total liabilities | 776,627 | ||||
Accumulated deficit | (1,965,720) | ||||
Total stockholders' deficit | (2,101,537) | ||||
Total liabilities, redeemable limited partners' capital and stockholders' deficit | $ 2,313,714 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Impact of Adopting Topic 606 on Condensed Consolidated Statements of Income (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | $ 401,546 | $ 390,564 |
Cost of revenue | 188,993 | 191,376 |
Gross profit | 212,553 | 199,188 |
Selling, general and administrative | 105,870 | 114,321 |
Research and development | 340 | 489 |
Amortization of purchased intangible assets | 13,638 | 13,898 |
Operating expenses | 119,848 | 128,708 |
Operating income | 92,705 | 70,480 |
Equity in net income of unconsolidated affiliates | 2,690 | 4,252 |
Interest and investment loss, net | (688) | (1,495) |
Loss on disposal of long-lived assets | 0 | (1,320) |
Other income (expense) | (1,941) | 1,463 |
Other income, net | 61 | 2,900 |
Income before income taxes | 92,766 | 73,380 |
Income tax expense | 10,793 | 12,764 |
Net income | 81,973 | 60,616 |
Net income attributable to non-controlling interest in Premier LP | (55,113) | (44,610) |
Adjustment of redeemable limited partners' capital to redemption amount | (708,193) | 320,424 |
Net income (loss) attributable to stockholders | $ (681,333) | $ 336,430 |
Basic (in shares) | 53,221 | 52,909 |
Diluted (in shares) | 53,221 | 140,046 |
Basic (in dollars per share) | $ (12.80) | $ 6.36 |
Diluted (in dollars per share) | $ (12.80) | $ 0.30 |
Net administrative fees | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | $ 162,000 | $ 150,991 |
Other services and support | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 88,076 | 86,911 |
Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 250,076 | 237,902 |
Cost of revenue | 43,372 | 46,936 |
Products | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 151,470 | 152,662 |
Cost of revenue | 145,621 | 144,440 |
Previous revenue standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 392,945 | 390,564 |
Amortization of purchased intangible assets | 13,638 | 13,898 |
Operating income | 69,689 | 70,480 |
Equity in net income of unconsolidated affiliates | 2,690 | 4,252 |
Interest and investment loss, net | (688) | (1,495) |
Loss on disposal of long-lived assets | 0 | (1,320) |
Other income (expense) | (1,941) | 1,463 |
Income before income taxes | 69,750 | 73,380 |
Net income attributable to non-controlling interest in Premier LP | (44,610) | |
Net income (loss) attributable to stockholders | $ (699,789) | $ 336,430 |
Basic (in shares) | 53,221 | 52,909 |
Diluted (in shares) | 53,221 | |
Basic (in dollars per share) | $ (13.15) | |
Diluted (in dollars per share) | $ (13.15) | |
Previous revenue standard | Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | $ 392,945 | |
Cost of revenue | 202,297 | |
Gross profit | 190,648 | |
Selling, general and administrative | 106,981 | |
Research and development | 340 | |
Amortization of purchased intangible assets | 13,638 | |
Operating expenses | 120,959 | |
Operating income | 69,689 | |
Equity in net income of unconsolidated affiliates | 2,690 | |
Interest and investment loss, net | (688) | |
Loss on disposal of long-lived assets | 0 | |
Other income (expense) | (1,941) | |
Other income, net | 61 | |
Income before income taxes | 69,750 | |
Income tax expense | 9,034 | |
Net income | 60,716 | |
Net income attributable to non-controlling interest in Premier LP | (41,740) | |
Adjustment of redeemable limited partners' capital to redemption amount | (718,765) | |
Net income (loss) attributable to stockholders | $ (699,789) | |
Basic (in shares) | 53,221 | |
Diluted (in shares) | 53,221 | |
Previous revenue standard | Topic 606 | Net administrative fees | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | $ 146,816 | |
Previous revenue standard | Topic 606 | Other services and support | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 82,697 | |
Previous revenue standard | Topic 606 | Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 229,513 | |
Cost of revenue | 45,305 | |
Previous revenue standard | Topic 606 | Products | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 163,432 | |
Cost of revenue | 156,992 | |
Impact of new revenue standard | Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 8,601 | |
Cost of revenue | (13,304) | |
Gross profit | 21,905 | |
Selling, general and administrative | (1,111) | |
Research and development | 0 | |
Amortization of purchased intangible assets | 0 | |
Operating expenses | (1,111) | |
Operating income | 23,016 | |
Equity in net income of unconsolidated affiliates | 0 | |
Interest and investment loss, net | 0 | |
Loss on disposal of long-lived assets | 0 | |
Other income (expense) | 0 | |
Other income, net | 0 | |
Income before income taxes | 23,016 | |
Income tax expense | 1,759 | |
Net income | 21,257 | |
Net income attributable to non-controlling interest in Premier LP | (13,373) | |
Adjustment of redeemable limited partners' capital to redemption amount | 10,572 | |
Net income (loss) attributable to stockholders | $ 18,456 | |
Basic (in shares) | 0 | |
Diluted (in shares) | 0 | |
Basic (in dollars per share) | $ 0.35 | |
Diluted (in dollars per share) | $ 0.35 | |
Impact of new revenue standard | Topic 606 | Net administrative fees | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | $ 15,184 | |
Impact of new revenue standard | Topic 606 | Other services and support | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 5,379 | |
Impact of new revenue standard | Topic 606 | Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | 20,563 | |
Cost of revenue | (1,933) | |
Impact of new revenue standard | Topic 606 | Products | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net revenue | (11,962) | |
Cost of revenue | $ (11,371) |
SIGNIFICANT ACCOUNTING POLICI_7
SIGNIFICANT ACCOUNTING POLICIES - Impact of Adopting Topic 606 on Condensed Consolidated Statement of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income | $ 81,973 | $ 60,616 |
Less: comprehensive income attributable to non-controlling interest | (55,113) | (44,610) |
Comprehensive income attributable to stockholders | 26,860 | $ 16,006 |
Topic 606 | Impact of new revenue standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income | 21,257 | |
Less: comprehensive income attributable to non-controlling interest | (13,373) | |
Comprehensive income attributable to stockholders | 7,884 | |
Topic 606 | Previous revenue standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income | 60,716 | |
Less: comprehensive income attributable to non-controlling interest | (41,740) | |
Comprehensive income attributable to stockholders | $ 18,976 |
SIGNIFICANT ACCOUNTING POLICI_8
SIGNIFICANT ACCOUNTING POLICIES - Impact of Adopting Topic 606 on Condensed Consolidated Statement of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income | $ 81,973 | $ 60,616 |
Depreciation and amortization | 34,145 | 30,405 |
Equity in net income of unconsolidated affiliates | (2,690) | (4,252) |
Deferred income taxes | 4,588 | 8,298 |
Stock-based compensation | 6,195 | 8,815 |
Accounts receivable, contract assets, prepaid expenses and other current assets | (41,427) | (8,748) |
Other assets | (2,235) | 1,379 |
Inventories | (2,097) | (7,178) |
Accounts payable, accrued expenses, deferred revenue and other current liabilities | (21,776) | (21,933) |
Long-term liabilities | (14) | (111) |
Loss on FFF put and call rights | 3,283 | 20 |
Other operating activities | 382 | 6,402 |
Net cash provided by operating activities | 60,327 | 75,033 |
Net cash used in investing activities | (25,062) | (16,646) |
Net cash used in financing activities | (45,229) | (83,002) |
Net decrease in cash and cash equivalents | (9,964) | (24,615) |
Cash and cash equivalents at beginning of year | 152,386 | 156,735 |
Cash and cash equivalents at end of period | 142,422 | 132,120 |
Impact of new revenue standard | Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income | 21,257 | |
Depreciation and amortization | 0 | |
Equity in net income of unconsolidated affiliates | 0 | |
Deferred income taxes | (290) | |
Stock-based compensation | 0 | |
Accounts receivable, contract assets, prepaid expenses and other current assets | (29,503) | |
Other assets | 144 | |
Inventories | 0 | |
Accounts payable, accrued expenses, deferred revenue and other current liabilities | 8,392 | |
Long-term liabilities | 0 | |
Loss on FFF put and call rights | 0 | |
Other operating activities | 0 | |
Net cash provided by operating activities | 0 | |
Net cash used in investing activities | 0 | |
Net cash used in financing activities | 0 | |
Net decrease in cash and cash equivalents | 0 | |
Cash and cash equivalents at beginning of year | 0 | |
Cash and cash equivalents at end of period | 0 | |
Previous revenue standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Equity in net income of unconsolidated affiliates | (2,690) | $ (4,252) |
Previous revenue standard | Topic 606 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net income | 60,716 | |
Depreciation and amortization | 34,145 | |
Equity in net income of unconsolidated affiliates | (2,690) | |
Deferred income taxes | 4,878 | |
Stock-based compensation | 6,195 | |
Accounts receivable, contract assets, prepaid expenses and other current assets | (11,924) | |
Other assets | (2,379) | |
Inventories | (2,097) | |
Accounts payable, accrued expenses, deferred revenue and other current liabilities | (30,168) | |
Long-term liabilities | (14) | |
Loss on FFF put and call rights | 3,283 | |
Other operating activities | 382 | |
Net cash provided by operating activities | 60,327 | |
Net cash used in investing activities | (25,062) | |
Net cash used in financing activities | (45,229) | |
Net decrease in cash and cash equivalents | (9,964) | |
Cash and cash equivalents at beginning of year | 152,386 | |
Cash and cash equivalents at end of period | $ 142,422 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | $ 96,743 | $ 94,053 | |
Equity in Net Income (Loss) | 2,690 | $ 4,252 | |
FFF | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 94,425 | 91,804 | |
Equity in Net Income (Loss) | 2,621 | 4,337 | |
Bloodbuy | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 1,893 | 1,918 | |
Equity in Net Income (Loss) | (25) | (33) | |
PharmaPoint | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 0 | 0 | |
Equity in Net Income (Loss) | 0 | (52) | |
Other investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 425 | $ 331 | |
Equity in Net Income (Loss) | $ 94 | $ 0 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - USD ($) shares in Millions, $ in Millions | Jul. 26, 2016 | Sep. 30, 2018 | Jun. 30, 2018 |
PharmaPoint | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, other than temporary impairment | $ 4 | ||
PSCI | FFF | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest through subsidiary (as a percent) | 49.00% | ||
Cash portion of acquisition price | $ 65.7 | ||
Initial investment | 81.1 | ||
Consideration in the form of net fair value of put and call rights | $ 15.4 | ||
PSCI | Class B Membership Interests | Bloodbuy | |||
Schedule of Equity Method Investments [Line Items] | |||
Membership units (in shares) | 5.3 | 5.3 | |
PSCI | Class B Membership Interests | PharmaPoint | |||
Schedule of Equity Method Investments [Line Items] | |||
Membership units (in shares) | 5 | 5 | |
Bloodbuy | PSCI | Class B Membership Interests | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest through subsidiary (as a percent) | 15.00% | 15.00% | |
PharmaPoint | PSCI | Class B Membership Interests | PharmaPoint | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest through subsidiary (as a percent) | 28.00% | 28.00% |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Assets | ||
Cash equivalents | $ 62,038 | $ 62,684 |
FFF call right | 488 | 610 |
Deferred compensation plan assets | 47,523 | 48,215 |
Total assets | 110,049 | 111,509 |
Liabilities | ||
FFF put right | 45,200 | 42,041 |
Total liabilities | 45,200 | 42,041 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash equivalents | 62,038 | 62,684 |
FFF call right | 0 | 0 |
Deferred compensation plan assets | 47,523 | 48,215 |
Total assets | 109,561 | 110,899 |
Liabilities | ||
FFF put right | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Cash equivalents | 0 | 0 |
FFF call right | 0 | 0 |
Deferred compensation plan assets | 0 | 0 |
Total assets | 0 | 0 |
Liabilities | ||
FFF put right | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Cash equivalents | 0 | 0 |
FFF call right | 488 | 610 |
Deferred compensation plan assets | 0 | 0 |
Total assets | 488 | 610 |
Liabilities | ||
FFF put right | 45,200 | 42,041 |
Total liabilities | $ 45,200 | $ 42,041 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) $ in Thousands | Nov. 22, 2017 | Sep. 30, 2018 | Jun. 30, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Current portion of deferred compensation plan assets | $ 43,343 | $ 44,577 | |
FFF put right | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Class of warrant or right, maximum warrants or rights required by entity to purchase upon exercise, percent | 50.00% | ||
FFF call right | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Call right, exercisable term, key event | 180 days | ||
Call right, exercisable term, specified date | 30 days | ||
Level 1 | Prepaid expenses and other current assets | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Current portion of deferred compensation plan assets | $ 4,100 | 3,600 | |
Level 2 | Nonrecurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Notes payable, difference between fair value and carrying value | $ 500 | $ 600 | |
Level 2 | Nonrecurring | Notes payable | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assumed market interest rate | 3.70% | 3.60% |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Earn-Out Liabilities and FFF Put and Call Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | $ 610 | $ 4,655 |
Gain (Loss) | (122) | (62) |
Ending Balance | 488 | 4,593 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | 42,041 | 45,360 |
Gain (Loss) | (3,159) | (323) |
Ending Balance | 45,200 | 45,683 |
FFF put right | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | 42,041 | 24,050 |
Gain (Loss) | (3,159) | 42 |
Ending Balance | 45,200 | 24,008 |
Earn-out liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | 21,310 | |
Gain (Loss) | (365) | |
Ending Balance | 21,675 | |
FFF call right | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | 610 | 4,655 |
Gain (Loss) | (122) | (62) |
Ending Balance | $ 488 | $ 4,593 |
CONTRACT BALANCES - Contract A
CONTRACT BALANCES - Contract Assets, Deferred Revenue and Capitalized Contract Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Increase in contract assets | $ 203,000 | |
Contract assets | 202,961 | $ 0 |
Increase in revenue share obligation | 40,600 | |
Revenue recognized from performance obligations satisfied in previous periods | 5,500 | |
Revenue recognized associated with revised forecasts underlying contracts with variable consideration components | 3,600 | |
Revenue recognized associated with unforecasted cash receipts | 1,900 | |
Capitalized contract costs | 15,200 | |
Amortization of capitalized contract costs | 1,800 | |
Performance Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Revenue recognized | 50,000 | |
Impact of new revenue standard | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | 169,700 | |
Impact of new revenue standard | Supply Chain Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | 141,500 | |
Impact of new revenue standard | Performance Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Contract assets | 28,200 | |
Net administrative fees | Supply Chain Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Increase in contract assets due to change in estimated revenue yet to be collected | 24,400 | |
Licensing and other consulting services | Performance Services | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Increase in contract assets due to acceleration of revenue recognition | 8,900 | |
Capitalized implementation costs | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Capitalized contract costs | 9,800 | |
Capitalized sales commissions | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Capitalized contract costs | $ 5,400 |
CONTRACT BALANCES - Remaining P
CONTRACT BALANCES - Remaining Performance Obligation (Details) $ in Millions | Sep. 30, 2018USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation to be satisfied (percent) | 50.00% |
Remaining performance obligation satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: (nil) | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Transaction price allocated to remaining performance obligation | $ 480 |
Remaining performance obligation to be satisfied (percent) | 25.00% |
Remaining performance obligation satisfaction period | 12 months |
INTANGIBLE ASSETS, NET - Schedu
INTANGIBLE ASSETS, NET - Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 475,750 | $ 475,750 |
Accumulated amortization | (167,273) | (153,635) |
Intangible assets, net | $ 308,477 | 322,115 |
Member relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 14 years 8 months | |
Total intangible assets | $ 220,100 | 220,100 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years | |
Total intangible assets | $ 142,317 | 142,317 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 years 4 months | |
Total intangible assets | $ 48,120 | 48,120 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 8 years 4 months | |
Total intangible assets | $ 22,710 | 22,710 |
Distribution network | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 10 years | |
Total intangible assets | $ 22,400 | 22,400 |
Favorable lease commitments | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 10 years 1 month | |
Total intangible assets | $ 11,393 | 11,393 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years 11 months | |
Total intangible assets | $ 8,710 | $ 8,710 |
INTANGIBLE ASSETS, NET - Narrat
INTANGIBLE ASSETS, NET - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Intangible asset amortization | $ 13,638 | $ 13,898 |
GOODWILL (Details)
GOODWILL (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jun. 30, 2018 |
Goodwill [Line Items] | ||
Goodwill | $ 906,545 | $ 906,545 |
Supply Chain Services | ||
Goodwill [Line Items] | ||
Goodwill | 400,348 | 400,348 |
Performance Services | ||
Goodwill [Line Items] | ||
Goodwill | $ 506,197 | $ 506,197 |
DEBT - Schedule of Long-Term De
DEBT - Schedule of Long-Term Debt (Details) - USD ($) | Sep. 30, 2018 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||
Total debt | $ 107,218,000 | $ 107,212,000 |
Less: current portion | (101,771,000) | (100,250,000) |
Total long-term debt | 5,447,000 | 6,962,000 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Commitment Amount | 750,000,000 | |
Total debt | 100,000,000 | 100,000,000 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Total debt | $ 7,218,000 | $ 7,212,000 |
DEBT - Credit Facility (Narrati
DEBT - Credit Facility (Narrative) (Details) | Jun. 04, 2015USD ($)quarter | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) |
Line of Credit Facility [Line Items] | |||
Outstanding borrowings | $ 107,218,000 | $ 107,212,000 | |
Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 750,000,000 | ||
Additional borrowing capacity | $ 250,000,000 | ||
Commitment fee (as a percent) | 0.125% | ||
Maximum total leverage ratio | 3 | ||
Maximum consecutive period for total leverage ratio to exceed limit | quarter | 4 | ||
Minimum consolidated interest coverage ratio | 3 | ||
Indebtedness or guarantee threshold | $ 30,000,000 | ||
Judgment default threshold | $ 30,000,000 | ||
Outstanding borrowings | $ 100,000,000 | ||
Credit Facility | Minimum | |||
Line of Credit Facility [Line Items] | |||
Contractual commitment fee on daily unused amount (as a percent) | 0.125% | ||
Credit Facility | Maximum | |||
Line of Credit Facility [Line Items] | |||
Contractual commitment fee on daily unused amount (as a percent) | 0.25% | ||
Credit Facility | Base Rate Loans | Federal funds effective rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.50% | ||
Credit Facility | Base Rate Loans | LIBOR | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.00% | ||
Credit Facility | Base Rate Loans | Applicable Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.125% | ||
Credit Facility | Base Rate Loans | Applicable Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 0.75% | ||
Credit Facility | Base Rate Loans | Three-month Eurodollar | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 5.375% | ||
Credit Facility | Eurodollar Loans | Applicable Rate | Minimum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.125% | ||
Credit Facility | Eurodollar Loans | Applicable Rate | Maximum | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 1.75% | ||
Credit Facility | Eurodollar Loans | Three-month Eurodollar | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 3.523% | ||
Letters of credit | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 25,000,000 | ||
Swing-line loans | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity | $ 75,000,000 |
DEBT - Notes Payable (Narrative
DEBT - Notes Payable (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Jun. 30, 2018 | |
Debt Instrument [Line Items] | ||
Notes payable | $ 7,200 | $ 7,200 |
Notes payable included in current portion of long-term debt | 1,800 | 200 |
Notes payable included in long-term debt, less current portion | $ 5,447 | $ 6,962 |
Notes payable | ||
Debt Instrument [Line Items] | ||
Notes payable, stated maturity period | 5 years |
REDEEMABLE LIMITED PARTNERS' _3
REDEEMABLE LIMITED PARTNERS' CAPITAL - Narrative (Details) $ in Thousands, shares in Millions | Oct. 01, 2013 | Sep. 30, 2018USD ($)notes_receivablelimited_partnershares | Sep. 30, 2017USD ($) | Jun. 30, 2018 |
Temporary Equity [Line Items] | ||||
Limited partners ownership (as a percent) | 60.00% | 60.00% | ||
Class B common units | ||||
Temporary Equity [Line Items] | ||||
Exchange agreement, conversion ratio | 0.1429 | |||
Exchanged for cash | Class B common units | ||||
Temporary Equity [Line Items] | ||||
Reduction in Redeemable Limited Partners' Capital | $ 30,500 | |||
Exchange of Class B units for Class A common stock by member owners (in shares) | shares | 0.8 | |||
Exchanged for Class A common stock | Class B common units | ||||
Temporary Equity [Line Items] | ||||
Exchange of Class B units for Class A common stock by member owners (in shares) | shares | 5.9 | |||
Limited partner | ||||
Temporary Equity [Line Items] | ||||
Decrease to fair value for the redemption amount | $ (708,193) | |||
Number of interest bearing notes receivable executed | notes_receivable | 0 | |||
Number of limited partners withdrawing from partnership | limited_partner | 0 | |||
Redeemable limited partners' capital | Limited partner | ||||
Temporary Equity [Line Items] | ||||
Decrease to fair value for the redemption amount | $ (708,193) | $ 320,400 | ||
Promissory note | ||||
Temporary Equity [Line Items] | ||||
Promissory note for which common units are not eligible for exchange, term | 5 years | |||
Five-year, unsecured, non-interest bearing term promissory note | Promissory note | ||||
Temporary Equity [Line Items] | ||||
Promissory note for which common units are not eligible for exchange, term | 5 years |
REDEEMABLE LIMITED PARTNERS' _4
REDEEMABLE LIMITED PARTNERS' CAPITAL - Changes in Redeemable Limited Partners' Capital (Details) - USD ($) $ in Thousands | Aug. 23, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Increase (Decrease) in Temporary Equity | |||
June 30, 2018 | $ 2,920,410 | ||
Exchange of Class B common units for Class A common stock by member owners | (30,536) | $ (42,976) | |
September 30, 2018 | 3,638,624 | ||
Limited Partner | |||
Increase (Decrease) in Temporary Equity | |||
June 30, 2018 | 2,920,410 | ||
Distributions applied to receivables from limited partners | 437 | ||
Net income attributable to non-controlling interest in Premier LP | 55,113 | ||
Distributions to limited partners | $ (15,465) | (14,993) | |
Exchange of Class B common units for Class A common stock by member owners | (30,536) | ||
Adjustment of redeemable limited partners' capital to redemption amount | 708,193 | ||
September 30, 2018 | 3,638,624 | ||
Limited Partner | Receivables From Limited Partners | |||
Increase (Decrease) in Temporary Equity | |||
June 30, 2018 | (2,205) | ||
Distributions applied to receivables from limited partners | 437 | ||
September 30, 2018 | (1,768) | ||
Limited Partner | Redeemable Limited Partners' Capital | |||
Increase (Decrease) in Temporary Equity | |||
June 30, 2018 | 2,922,615 | ||
Net income attributable to non-controlling interest in Premier LP | 55,113 | ||
Distributions to limited partners | (14,993) | ||
Exchange of Class B common units for Class A common stock by member owners | (30,536) | ||
Adjustment of redeemable limited partners' capital to redemption amount | 708,193 | $ (320,400) | |
September 30, 2018 | $ 3,640,392 |
REDEEMABLE LIMITED PARTNERS' _5
REDEEMABLE LIMITED PARTNERS' CAPITAL - Schedule of Quarterly Distributions to Limited Partners (Details) - Limited Partner - USD ($) $ in Thousands | Aug. 23, 2018 | Nov. 21, 2018 | Sep. 30, 2018 |
Limited Partners' Capital Account [Line Items] | |||
Distribution | $ 15,465 | $ 14,993 | |
Scenario, Forecast | |||
Limited Partners' Capital Account [Line Items] | |||
Distributions paid | $ 15,000 |
REDEEMABLE LIMITED PARTNERS' _6
REDEEMABLE LIMITED PARTNERS' CAPITAL - Schedule Of Common Stock Units Quarterly Exchanges (Details) - USD ($) $ in Thousands | Jul. 31, 2018 | Jul. 31, 2017 | Sep. 30, 2018 |
Class B Common Stock | |||
Limited Partners' Capital Account [Line Items] | |||
Class B common units and associated Class B common shares exchanged (in shares) | 816,468 | 816,468 | |
Reduction in Redeemable Limited Partners' Capital | $ 30,536 | ||
Exchanged for cash | Class B common units | |||
Limited Partners' Capital Account [Line Items] | |||
Class B common units and associated Class B common shares exchanged (in shares) | 800,000 | ||
Reduction in Redeemable Limited Partners' Capital | $ 30,500 |
STOCKHOLDERS' DEFICIT (Details)
STOCKHOLDERS' DEFICIT (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 5 Months Ended | ||
Sep. 30, 2018$ / sharesshares | Sep. 30, 2018USD ($)$ / sharesshares | Jun. 30, 2018$ / sharesshares | May 07, 2018USD ($) | |
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | shares | 53,790,369 | 53,790,369 | 52,761,177 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |
Stock repurchase program, remaining number of shares authorized to be repurchased (in shares) | $ | $ 250 | |||
Stock repurchased during period, shares | shares | 300,000 | |||
Treasury stock acquired, average cost per share (in dollars per share) | $ / shares | $ 36.80 | |||
Stock repurchased during period, value | $ | $ 12.3 | |||
Voting rights, ratio of votes to shares held | 1 | |||
Class B Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | shares | 79,519,233 | 79,519,233 | 80,335,701 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.000001 | $ 0.000001 | $ 0.000001 | |
Voting rights, ratio of votes to shares held | 1 |
EARNINGS (LOSS) PER SHARE - Rec
EARNINGS (LOSS) PER SHARE - Reconciliation of the Numerator and Denominator Used for Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator for basic earnings (loss) per share: | ||
Net income (loss) attributable to stockholders | $ (681,333) | $ 336,430 |
Numerator for diluted earnings (loss) per share: | ||
Adjustment of redeemable limited partners' capital to redemption amount | 0 | |
Net income attributable to non-controlling interest in Premier LP | 55,113 | $ 44,610 |
Net income (loss) | (681,333) | |
Tax effect on Premier, Inc. net income | 0 | |
Adjusted net income (loss) | $ (681,333) | |
Denominator for basic earnings (loss) per share: | ||
Weighted average shares (in shares) | 53,221 | 52,909 |
Denominator for diluted earnings (loss) per share: | ||
Weighted average shares (in shares) | 53,221 | 52,909 |
Effect of dilutive securities: | ||
Weighted average shares and assumed conversions (in shares) | 53,221 | 140,046 |
Basic earnings per share (in dollars per share) | $ (12.80) | $ 6.36 |
Diluted earnings (loss) per share (in dollars per share) | $ (12.80) | $ 0.30 |
Limited Partner | Redeemable limited partners' capital | Class B Common Units to Class A Common Shares | ||
Effect of dilutive securities: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 79,800 | |
Class B Common Stock | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | |
Stock options and restricted stock units | ||
Effect of dilutive securities: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 600 | |
Stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | |
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,000 | 1,400 |
Restricted stock | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | |
Performance share awards | ||
Effect of dilutive securities: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 700 | 600 |
Previous revenue standard | ||
Numerator for basic earnings (loss) per share: | ||
Net income (loss) attributable to stockholders | $ (699,789) | $ 336,430 |
Numerator for diluted earnings (loss) per share: | ||
Adjustment of redeemable limited partners' capital to redemption amount | 0 | (320,424) |
Net income attributable to non-controlling interest in Premier LP | 44,610 | |
Net income (loss) | (699,789) | 60,616 |
Tax effect on Premier, Inc. net income | 0 | (18,156) |
Adjusted net income (loss) | $ (699,789) | $ 42,460 |
Denominator for basic earnings (loss) per share: | ||
Weighted average shares (in shares) | 53,221 | 52,909 |
Denominator for diluted earnings (loss) per share: | ||
Weighted average shares (in shares) | 53,221 | 52,909 |
Effect of dilutive securities: | ||
Weighted average shares and assumed conversions (in shares) | 53,221 | |
Basic earnings per share (in dollars per share) | $ (13.15) | |
Diluted earnings (loss) per share (in dollars per share) | $ (13.15) | |
Previous revenue standard | Class B Common Stock | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | 86,482 |
Previous revenue standard | Stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | 351 |
Previous revenue standard | Restricted stock | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | 304 |
EARNINGS (LOSS) PER SHARE - Sch
EARNINGS (LOSS) PER SHARE - Schedule of Exchange Agreement (Details) - shares | Oct. 31, 2018 | Jul. 31, 2018 | Jul. 31, 2017 | Sep. 30, 2018 | Jun. 30, 2018 |
Class B Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Class B common units and associated Class B common shares exchanged (in shares) | 816,468 | 816,468 | |||
Shares outstanding after exchange (in shares) | 79,519,233 | ||||
Percentage of combined voting power (percent) | 60.00% | ||||
Class A Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Shares outstanding after exchange (in shares) | 53,256,897 | ||||
Percentage of combined voting power (percent) | 40.00% | ||||
Subsequent event | Class B Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Class B common units and associated Class B common shares exchanged (in shares) | 9,807,651 | ||||
Shares outstanding after exchange (in shares) | 69,601,752 | ||||
Percentage of combined voting power (percent) | 52.00% | ||||
Subsequent event | Class A Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Shares outstanding after exchange (in shares) | 63,734,585 | ||||
Percentage of combined voting power (percent) | 48.00% | ||||
Treasury Stock | |||||
Conversion of Stock [Line Items] | |||||
Class B common units and associated Class B common shares exchanged (in shares) | 817,000 | ||||
Shares held in treasury (shares) | 4,287,000 | 4,769,000 | |||
Treasury Stock | Subsequent event | Class A Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Class B common units and associated Class B common shares exchanged (in shares) | 4,287,471 | ||||
Shares held in treasury (shares) | 0 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Pre-tax stock-based compensation expense | $ 6.2 | $ 8.8 |
Deferred tax benefit | $ 1.5 | $ 3.3 |
Expected effective income tax rate | 25.00% | 38.00% |
2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of awards authorized for grant (up to) (in shares) | 11.3 | |
Number of shares available for grant (shares) | 3 | |
Restricted stock | Employee | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Restricted stock | Director | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 1 year | |
Performance share awards | 2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Stock options | 2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting period | 3 years | |
Award term | 10 years | |
Options, expiration period | 12 months | |
Year One | Stock options | 2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights (as a percent) | 33.33% | |
Year Two | Stock options | 2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights (as a percent) | 33.33% | |
Year Three | Stock options | 2013 Equity Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting rights (as a percent) | 33.33% |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Information Related to Restricted Stock, Performance Share Awards and Stock Options (Details) - 2013 Equity Incentive Plan | 3 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Restricted Stock | |
Number of Awards | |
Outstanding, beginning balance (in shares) | shares | 605,873 |
Granted (in shares) | shares | 225,233 |
Vested/exercised (in shares) | shares | (119,426) |
Forfeited (in shares) | shares | (15,417) |
Outstanding, ending balance (in shares) | shares | 696,263 |
Weighted Average Fair Value at Grant Date | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 33.25 |
Granted (in dollars per share) | $ / shares | 44.23 |
Vested/exercised (in dollars per share) | $ / shares | 35.57 |
Forfeited (in dollars per share) | $ / shares | 32.71 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 36.42 |
Performance Share Awards | |
Number of Awards | |
Outstanding, beginning balance (in shares) | shares | 1,318,047 |
Granted (in shares) | shares | 575,957 |
Vested/exercised (in shares) | shares | (359,751) |
Forfeited (in shares) | shares | (40,877) |
Outstanding, ending balance (in shares) | shares | 1,493,376 |
Weighted Average Fair Value at Grant Date | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 33 |
Granted (in dollars per share) | $ / shares | 43.43 |
Vested/exercised (in dollars per share) | $ / shares | 35.43 |
Forfeited (in dollars per share) | $ / shares | 32.67 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 36.45 |
Stock options | |
Number of Options | |
Outstanding, beginning balance (in shares) | shares | 3,499,251 |
Granted (in shares) | shares | 0 |
Vested/exercised (in shares) | shares | (230,367) |
Forfeited (in shares) | shares | (34,179) |
Outstanding, ending balance (in shares) | shares | 3,234,705 |
Stock options outstanding and exercisable (in shares) | shares | 2,737,472 |
Weighted Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 30.53 |
Granted (in dollars per share) | $ / shares | 0 |
Vested/exercised (in dollars per share) | $ / shares | 32.57 |
Forfeited (in dollars per share) | $ / shares | 32.55 |
Outstanding, ending balance (in dollars per share) | $ / shares | 30.37 |
Stock options outstanding and exercisable (in dollars per share) | $ / shares | $ 30 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Unrecognized Stock-Based Compensation Expense (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 57,643 |
Weighted Average Amortization Period | 2 years 2 months 26 days |
2013 Equity Incentive Plan | Restricted stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 15,830 |
Weighted Average Amortization Period | 2 years 4 months 17 days |
2013 Equity Incentive Plan | Performance share awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 36,826 |
Weighted Average Amortization Period | 2 years 2 months 34 days |
2013 Equity Incentive Plan | Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 4,987 |
Weighted Average Amortization Period | 1 year 7 months 25 days |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Aggregate Intrinsic Value of Stock Options (Details) - 2013 Equity Incentive Plan $ in Thousands | Sep. 30, 2018USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding and exercisable | $ 43,186 |
Expected to vest | 6,667 |
Total outstanding | 49,853 |
Exercised during the three months ended September 30, 2018 | $ 2,403 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions Used for Determining the Fair Value of Stock Options Granted (Details) - 2013 Equity Incentive Plan - Stock options - USD ($) | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life | 6 years | 6 years |
Expected dividend (in dollars per share) | $ 0 | $ 0 |
Expected volatility (as a percent) | 32.26% | |
Risk-free interest rate (as a percent) | 1.89% | |
Weighted average option grant date fair value (in dollars per share) | $ 11.42 | |
Expected dividend rate | 0.00% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Constant maturity treasury rate (term) | 5 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Constant maturity treasury rate (term) | 7 years |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Dec. 22, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 |
Income Tax Disclosure [Abstract] | ||||
Tax cuts and jobs act of 2017, remeasurement of deferred tax balances | $ 210,400 | |||
Tax expense | $ 10,793 | $ 12,764 | ||
Effective tax rate | 12.00% | 17.00% | ||
Decrease in deferred tax assets | $ 8,800 | |||
Current deferred tax assets at Premier, Inc. | 279,300 | 288,100 | ||
Deferred income tax assets | 301,267 | 305,624 | ||
Deferred tax liabilities | 21,950 | 17,569 | ||
Net reductions to deferred tax assets and liabilities in connection with the adoption and transition to the New Revenue Standard | $ 10,700 | |||
Tax savings payable to limited partners (as a percent) | 85.00% | |||
Decrease in tax receivable liability | $ (11,800) | |||
TRA liabilities | 243,300 | $ 255,100 | ||
TRA payment to member owners | $ (18,000) | |||
Tax receivable agreement liability, increase quarterly member owner exchange | $ 6,200 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Jul. 26, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 |
Related Party Transaction [Line Items] | ||||
Equity in net income of unconsolidated affiliates | $ 2,690,000 | $ 4,252,000 | ||
Due from related parties | 654,000 | $ 894,000 | ||
FFF | ||||
Related Party Transaction [Line Items] | ||||
Equity in net income of unconsolidated affiliates | 2,621,000 | 4,337,000 | ||
AEIX | Cost Reimbursement | ||||
Related Party Transaction [Line Items] | ||||
Revenues from related party transactions | 1,200,000 | 1,500,000 | ||
Maximum annual incentive management fee | 500,000 | |||
Due from related parties | 700,000 | $ 900,000 | ||
Premier Supply Chain Improvement, Inc | FFF | ||||
Related Party Transaction [Line Items] | ||||
Ownership share of net income of FFF (as a percent) | 49.00% | |||
Premier Supply Chain Improvement, Inc | Administrative Fee Revenue | FFF | ||||
Related Party Transaction [Line Items] | ||||
Equity in net income of unconsolidated affiliates | 2,600,000 | 4,300,000 | ||
Revenues from related party transactions | 2,300,000 | |||
Previous revenue standard | ||||
Related Party Transaction [Line Items] | ||||
Equity in net income of unconsolidated affiliates | 2,690,000 | 4,252,000 | ||
Previous revenue standard | Premier Supply Chain Improvement, Inc | Administrative Fee Revenue | FFF | ||||
Related Party Transaction [Line Items] | ||||
Revenues from related party transactions | $ 1,600,000 | $ 1,700,000 |
SEGMENTS - Narrative (Details)
SEGMENTS - Narrative (Details) $ in Millions | 3 Months Ended |
Sep. 30, 2018USD ($)segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | segment | 2 |
Threshold to classify expenses as non-recurring (period) | 2 years |
Threshold to classify expenses as non-recurring, not expected to occur within (period) | 2 years |
Stock purchase plan expense | $ | $ 0.1 |
SEGMENTS - Schedule of Segment
SEGMENTS - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 401,546 | $ 390,564 | |
Depreciation and amortization expense | 34,145 | 30,405 | |
Total capital expenditures | 25,062 | 16,646 | |
Total assets | 2,516,552 | $ 2,312,216 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | 2,613 | 1,992 | |
Total capital expenditures | 5,193 | 2,791 | |
Total assets | 403,743 | ||
Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 315,814 | ||
Supply Chain Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | 5,619 | 5,495 | |
Total capital expenditures | 495 | 307 | |
Total assets | 1,210,363 | ||
Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 85,732 | ||
Performance Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization expense | 25,913 | 22,918 | |
Total capital expenditures | 19,374 | 13,549 | |
Total assets | 902,446 | ||
Net administrative fees | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 162,000 | 150,991 | |
Net administrative fees | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 162,000 | ||
Other services and support | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 88,076 | 86,911 | |
Other services and support | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 2,344 | ||
Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 250,076 | 237,902 | |
Services | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 164,344 | ||
Products | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 151,470 | 152,662 | |
Products | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 151,470 | ||
Previous revenue standard | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 392,945 | 390,564 | |
Total assets | 2,313,714 | 2,312,216 | |
Previous revenue standard | Corporate | |||
Segment Reporting Information [Line Items] | |||
Total assets | 411,518 | 459,970 | |
Previous revenue standard | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 313,872 | 305,802 | |
Previous revenue standard | Supply Chain Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 1,051,206 | 991,837 | |
Previous revenue standard | Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 79,073 | 84,762 | |
Previous revenue standard | Performance Services | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Total assets | 850,990 | $ 860,409 | |
Previous revenue standard | Net administrative fees | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 146,816 | 150,991 | |
Previous revenue standard | Other services and support | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 3,624 | 2,149 | |
Previous revenue standard | Services | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 150,440 | 153,140 | |
Previous revenue standard | Products | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | $ 163,432 | $ 152,662 |
SEGMENTS - Reconciliation of In
SEGMENTS - Reconciliation of Income Before Income Taxes to Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||
Income before income taxes | $ 92,766 | $ 73,380 |
Equity in net income of unconsolidated affiliates | (2,690) | (4,252) |
Interest and investment loss, net | 688 | 1,495 |
Loss on disposal of long-lived assets | 0 | 1,320 |
Other expense (income) | 1,941 | (1,463) |
Operating income | 92,705 | 70,480 |
Depreciation and amortization | 20,507 | |
Amortization of purchased intangible assets | 13,638 | 13,898 |
Stock-based compensation | 6,337 | |
Acquisition related expenses | 409 | |
ERP implementation expenses | 326 | |
Equity in net income of unconsolidated affiliates | 2,690 | |
Deferred compensation plan income | 1,336 | |
Other expense | 673 | |
Adjusted EBITDA | 138,621 | |
Previous revenue standard | ||
Segment Reporting Information [Line Items] | ||
Income before income taxes | 69,750 | 73,380 |
Equity in net income of unconsolidated affiliates | (2,690) | (4,252) |
Interest and investment loss, net | 688 | 1,495 |
Loss on disposal of long-lived assets | 0 | 1,320 |
Other expense (income) | 1,941 | (1,463) |
Operating income | 69,689 | 70,480 |
Depreciation and amortization | 20,507 | 16,507 |
Amortization of purchased intangible assets | 13,638 | 13,898 |
Stock-based compensation | 6,337 | 8,957 |
Acquisition related expenses | 409 | 3,099 |
ERP implementation expenses | 326 | 335 |
Equity in net income of unconsolidated affiliates | 2,690 | 4,252 |
Deferred compensation plan income | 1,336 | 1,539 |
Other expense | 673 | 104 |
Adjusted EBITDA | 115,605 | 119,171 |
Operating Segments | Supply Chain Services | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | 135,403 | |
Operating Segments | Performance Services | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | 30,575 | |
Operating Segments | Previous revenue standard | Supply Chain Services | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | 119,804 | 125,620 |
Operating Segments | Previous revenue standard | Performance Services | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | 23,158 | 21,221 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | (27,357) | |
Corporate | Previous revenue standard | ||
Segment Reporting Information [Line Items] | ||
Adjusted EBITDA | $ (27,357) | $ (27,670) |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - Scenario, Forecast - Stanson Health, Inc. $ in Millions | 2 Months Ended |
Dec. 31, 2018USD ($) | |
Subsequent Event [Line Items] | |
Total consideration paid | $ 51.5 |
Earn-out opportunity based on certain product delivery and revenue targets | $ 15 |