Cover Page
Cover Page - shares | 9 Months Ended | |
Mar. 31, 2020 | May 01, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-36092 | |
Entity Registrant Name | Premier, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 35-2477140 | |
Entity Address, Address Line One | 13034 Ballantyne Corporate Place | |
Entity Address, City or Town | Charlotte, | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277 | |
City Area Code | 704 | |
Local Phone Number | 357-0022 | |
Title of 12(b) Security | Class A Common Stock, $0.01 Par Value | |
Trading Symbol | PINC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Central Index Key | 0001577916 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Class A Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 71,574,119 | |
Class B Common Stock | ||
Document and Entity Information | ||
Entity Common Stock, Shares Outstanding | 50,213,098 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Assets | ||
Cash and cash equivalents | $ 241,734 | $ 141,055 |
Accounts receivable (net of $1,125 and $739 allowance for doubtful accounts, respectively) | 139,902 | 168,115 |
Contract assets | 234,467 | 205,509 |
Inventory | 48,522 | 51,032 |
Prepaid expenses and other current assets | 87,746 | 23,765 |
Current assets of discontinued operations | 0 | 24,568 |
Total current assets | 752,371 | 614,044 |
Property and equipment (net of $431,633 and $359,235 accumulated depreciation, respectively) | 203,512 | 205,108 |
Intangible assets (net of $233,888 and $197,858 accumulated amortization, respectively) | 420,104 | 270,722 |
Goodwill | 929,615 | 880,709 |
Deferred income tax assets | 436,047 | 422,014 |
Deferred compensation plan assets | 42,780 | 45,466 |
Investments in unconsolidated affiliates | 120,642 | 99,636 |
Operating lease right-of-use assets | 59,901 | |
Other assets | 98,097 | 31,868 |
Total assets | 3,063,069 | 2,569,567 |
Liabilities, redeemable limited partners' capital and stockholders' equity (deficit) | ||
Accounts payable | 62,304 | 54,540 |
Accrued expenses | 67,289 | 82,476 |
Revenue share obligations | 149,976 | 137,359 |
Limited partners' distribution payable | 9,314 | 13,202 |
Accrued compensation and benefits | 56,208 | 70,799 |
Deferred revenue | 38,042 | 35,623 |
Current portion of tax receivable agreements | 18,118 | 17,505 |
Line of credit and current portion of long-term debt | 254,745 | 27,608 |
Other liabilities | 30,187 | 7,113 |
Current liabilities of discontinued operations | 0 | 11,797 |
Total current liabilities | 686,183 | 458,022 |
Long-term debt, less current portion | 4,828 | 6,003 |
Tax receivable agreements, less current portion | 276,739 | 326,607 |
Deferred compensation plan obligations | 42,780 | 45,466 |
Deferred tax liabilities | 13,140 | 4,766 |
Deferred consideration | 112,917 | 0 |
Operating lease liabilities, less current portion | 55,336 | |
Other liabilities | 71,265 | 67,683 |
Total liabilities | 1,263,188 | 908,547 |
Redeemable limited partners' capital | 1,658,419 | 2,523,270 |
Stockholders' equity (deficit): | ||
Treasury stock, at cost; 0 and 2,419,148 shares at March 31, 2020 and June 30, 2019, respectively | 0 | (87,220) |
Additional paid-in-capital | 140,751 | 0 |
Accumulated deficit | 0 | (775,674) |
Total stockholders' equity (deficit) | 141,462 | (862,250) |
Total liabilities, redeemable limited partners' capital and stockholders' equity (deficit) | 3,063,069 | 2,569,567 |
Class A Common Stock | ||
Stockholders' equity (deficit): | ||
Common stock | 711 | 644 |
Class B Common Stock | ||
Stockholders' equity (deficit): | ||
Common stock | $ 0 | $ 0 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Allowance for doubtful accounts | $ 1,125 | $ 739 |
Accumulated depreciation | 431,633 | 359,235 |
Accumulated amortization | $ 233,888 | $ 197,858 |
Treasury stock (in shares) | 0 | 2,419,148 |
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) | 71,070,617 | 64,357,305 |
Common stock, shares outstanding (in shares) | 71,070,617 | 61,938,157 |
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) | 50,715,564 | 64,548,044 |
Common stock, shares outstanding (in shares) | 50,715,564 | 64,548,044 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues [Abstract] | ||||
Net revenue | $ 334,823 | $ 301,213 | $ 956,839 | $ 901,404 |
Cost of revenue: | ||||
Cost of revenue | 103,128 | 86,041 | 294,380 | 257,131 |
Gross profit | 231,695 | 215,172 | 662,459 | 644,273 |
Operating expenses: | ||||
Selling, general and administrative | 115,289 | 113,336 | 315,311 | 320,198 |
Research and development | 628 | 296 | 1,808 | 928 |
Amortization of purchased intangible assets | 13,966 | 13,572 | 38,948 | 39,787 |
Operating expenses | 129,883 | 127,204 | 356,067 | 360,913 |
Operating income | 101,812 | 87,968 | 306,392 | 283,360 |
Equity in net income of unconsolidated affiliates | 4,442 | 553 | 11,038 | 4,687 |
Interest and investment loss, net | (9,966) | (1,081) | (9,849) | (2,628) |
(Loss) gain on FFF put and call rights | (13,906) | (4,109) | 8,477 | 3,458 |
Other (expense) income | (5,005) | 3,671 | (1,996) | 1,362 |
Other (expense) income, net | (24,435) | (966) | 7,670 | 6,879 |
Income before income taxes | 77,377 | 87,002 | 314,062 | 290,239 |
Income tax expense | 4,165 | 11,737 | 78,336 | 25,791 |
Net income from continuing operations | 73,212 | 75,265 | 235,726 | 264,448 |
Income (loss) from discontinued operations, net of tax | 5 | (1,463) | 1,009 | (3,862) |
Net income | 73,217 | 73,802 | 236,735 | 260,586 |
Net income from continuing operations attributable to noncontrolling interest | (35,055) | (44,135) | (132,189) | (163,230) |
Net (income) loss from discontinued operations attributable to noncontrolling interest | (3) | 747 | (480) | 2,098 |
Net income attributable to non-controlling interest in Premier LP | (35,058) | (43,388) | (132,669) | (161,132) |
Adjustment of redeemable limited partners' capital to redemption amount | 302,569 | 235,394 | 516,725 | 178,910 |
Net income attributable to stockholders | $ 340,728 | $ 265,808 | $ 620,791 | $ 278,364 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 69,451 | 62,020 | 65,582 | 58,346 |
Diluted (in shares) | 122,470 | 129,072 | 124,030 | 132,249 |
Basic (loss) earnings per share: | ||||
Basic (loss) earnings per share from continuing operations (in usd per share) | $ 4.91 | $ 4.30 | $ 9.46 | $ 4.80 |
Basic (loss) earnings per share from discontinued operations (in usd per share) | 0 | (0.01) | 0.01 | (0.03) |
Basic (loss) earnings per share attributable to stockholders (in usd per share) | 4.91 | 4.29 | 9.47 | 4.77 |
Diluted (loss) earnings per share: | ||||
Diluted (loss) earnings per share from continuing operations (in usd per share) | 0.54 | 0.49 | 1.66 | 1.71 |
Diluted (loss) earnings per share from discontinued operations (in usd per share) | 0 | (0.01) | 0 | (0.03) |
Diluted (loss) earnings per share attributable to stockholders (in usd per share) | $ 0.54 | $ 0.48 | $ 1.66 | $ 1.68 |
Net administrative fees | ||||
Revenues [Abstract] | ||||
Net revenue | $ 174,049 | $ 164,534 | $ 518,566 | $ 492,229 |
Other services and support | ||||
Revenues [Abstract] | ||||
Net revenue | 99,591 | 95,111 | 270,929 | 279,734 |
Services | ||||
Revenues [Abstract] | ||||
Net revenue | 273,640 | 259,645 | 789,495 | 771,963 |
Cost of revenue: | ||||
Cost of revenue | 49,007 | 46,545 | 143,965 | 133,107 |
Products | ||||
Revenues [Abstract] | ||||
Net revenue | 61,183 | 41,568 | 167,344 | 129,441 |
Cost of revenue: | ||||
Cost of revenue | $ 54,121 | $ 39,496 | $ 150,415 | $ 124,024 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 73,217 | $ 73,802 | $ 236,735 | $ 260,586 |
Less: comprehensive income attributable to non-controlling interest | (35,058) | (43,388) | (132,669) | (161,132) |
Comprehensive income attributable to stockholders | $ 38,159 | $ 30,414 | $ 104,066 | $ 99,454 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Stockholders' Equity (Deficit) (Unaudited) - USD ($) $ in Thousands | Total | Class B Common Stock | 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, 2018 | 52,761,000 | 80,336,000 | (4,769,000) | ||||
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) | 817,000 | (817,000) | (817,000) | ||||
Exchange of Class B units for Class A common stock by member owners | 30,536 | $ 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) | 547,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 7,472 | $ 5 | 7,467 | ||||
Treasury stock (in shares) | (335,000) | 335,000 | |||||
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 | 53,790,000 | 79,519,000 | (4,287,000) | ||||
Ending Balance at Sep. 30, 2018 | (1,961,136) | $ 580 | $ 0 | $ (136,397) | 0 | (1,825,320) | |
Beginning Balance (in shares) at Jun. 30, 2018 | 52,761,000 | 80,336,000 | (4,769,000) | ||||
Beginning Balance at Jun. 30, 2018 | (1,427,064) | $ 575 | $ 0 | $ (150,058) | 0 | (1,277,581) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Net income | 260,586 | ||||||
Ending Balance (in shares) at Mar. 31, 2019 | 61,391,000 | 64,983,000 | (2,854,000) | ||||
Ending Balance at Mar. 31, 2019 | (601,714) | $ 642 | $ 0 | $ (102,910) | 0 | (499,446) | |
Beginning Balance (in shares) at Sep. 30, 2018 | 53,790,000 | 79,519,000 | (4,287,000) | ||||
Beginning Balance at Sep. 30, 2018 | (1,961,136) | $ 580 | $ 0 | $ (136,397) | 0 | (1,825,320) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 9,807,000 | (9,807,000) | (4,287,000) | ||||
Exchange of Class B units for Class A common stock by member owners | 441,344 | $ 55 | $ 136,397 | 304,892 | |||
Redemption of limited partners (in shares) | (227,000) | ||||||
Redemption of limited partners | 0 | ||||||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | 14,379 | 14,379 | |||||
Issuance of Class A common stock under equity incentive plan (in shares) | 187,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 4,651 | $ 3 | 4,648 | ||||
Issuance of Class A common stock under employee stock purchase plan (shares) | 38,000 | ||||||
Issuance of Class A common stock under employee stock purchase plan | 1,488 | 1,488 | |||||
Treasury stock (in shares) | (2,535,000) | 2,535,000 | |||||
Treasury stock | (97,199) | $ (97,199) | |||||
Stock-based compensation expense | 7,716 | 7,716 | |||||
Repurchase of vested restricted units for employee tax-withholding | (1,082) | (1,082) | |||||
Net income | 104,811 | 104,811 | |||||
Net income attributable to non-controlling interest in Premier LP | (62,631) | (62,631) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | 651,709 | (332,041) | 983,750 | ||||
Ending Balance (in shares) at Dec. 31, 2018 | 61,287,000 | 69,485,000 | (2,535,000) | ||||
Ending Balance at Dec. 31, 2018 | (895,951) | $ 638 | $ 0 | $ (97,199) | 0 | (799,390) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 3,705,000 | (3,705,000) | (3,500,000) | ||||
Exchange of Class B units for Class A common stock by member owners | 147,440 | $ 2 | $ 134,910 | 12,528 | |||
Redemption of limited partners (in shares) | (797,000) | ||||||
Redemption of limited partners | 0 | ||||||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | 9,730 | 9,730 | |||||
Issuance of Class A common stock under equity incentive plan (in shares) | 218,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 5,191 | $ 2 | 5,189 | ||||
Treasury stock (in shares) | (3,819,000) | 3,819,000 | |||||
Treasury stock | (140,621) | $ (140,621) | |||||
Stock-based compensation expense | 6,781 | 6,781 | |||||
Repurchase of vested restricted units for employee tax-withholding | (92) | (92) | |||||
Net income | 73,802 | 73,802 | |||||
Net income attributable to non-controlling interest in Premier LP | (43,388) | (43,388) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | 235,394 | (34,136) | 269,530 | ||||
Ending Balance (in shares) at Mar. 31, 2019 | 61,391,000 | 64,983,000 | (2,854,000) | ||||
Ending Balance at Mar. 31, 2019 | (601,714) | $ 642 | $ 0 | $ (102,910) | 0 | (499,446) | |
Beginning Balance (in shares) at Jun. 30, 2019 | 61,938,000 | 64,548,000 | (2,419,000) | ||||
Beginning Balance at Jun. 30, 2019 | (862,250) | $ 644 | $ 0 | $ (87,220) | 0 | (775,674) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 1,311,000 | (1,311,000) | (1,311,000) | ||||
Exchange of Class B units for Class A common stock by member owners | 50,792 | $ 47,258 | 3,534 | ||||
Redemption of limited partners (in shares) | (782,000) | ||||||
Redemption of limited partners | 0 | ||||||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | 12,272 | 12,272 | |||||
Issuance of Class A common stock under equity incentive plan (in shares) | 485,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 1,754 | $ 5 | 1,749 | ||||
Treasury stock (in shares) | (1,055,000) | 1,055,000 | |||||
Treasury stock | (35,649) | $ (35,649) | |||||
Stock-based compensation expense | 3,704 | 3,704 | |||||
Repurchase of vested restricted units for employee tax-withholding | (8,311) | (8,311) | |||||
Net income | 71,329 | 71,329 | |||||
Net income attributable to non-controlling interest in Premier LP | (41,907) | (41,907) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | 694,309 | (12,948) | 707,257 | ||||
Ending Balance (in shares) at Sep. 30, 2019 | 62,679,000 | 62,455,000 | (2,163,000) | ||||
Ending Balance at Sep. 30, 2019 | (114,856) | $ 649 | $ 0 | $ (75,611) | 0 | (39,894) | |
Beginning Balance (in shares) at Jun. 30, 2019 | 61,938,000 | 64,548,000 | (2,419,000) | ||||
Beginning Balance at Jun. 30, 2019 | (862,250) | $ 644 | $ 0 | $ (87,220) | 0 | (775,674) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 13,050,552 | ||||||
Net income | 236,735 | ||||||
Ending Balance (in shares) at Mar. 31, 2020 | 71,071,000 | 50,716,000 | 0 | ||||
Ending Balance at Mar. 31, 2020 | 141,462 | $ 711 | $ 0 | $ 0 | 140,751 | 0 | |
Beginning Balance (in shares) at Sep. 30, 2019 | 62,679,000 | 62,455,000 | (2,163,000) | ||||
Beginning Balance at Sep. 30, 2019 | (114,856) | $ 649 | $ 0 | $ (75,611) | 0 | (39,894) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 6,873,000 | (6,873,000) | (5,031,000) | ||||
Exchange of Class B units for Class A common stock by member owners | 223,946 | $ 19 | $ 164,810 | 59,117 | |||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | 1,103 | 1,103 | |||||
Issuance of Class A common stock under equity incentive plan (in shares) | 146,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 4,244 | $ 1 | 4,243 | ||||
Issuance of Class A common stock under employee stock purchase plan (shares) | 40,000 | ||||||
Issuance of Class A common stock under employee stock purchase plan | 1,540 | 1,540 | |||||
Treasury stock (in shares) | (3,549,000) | 3,549,000 | |||||
Treasury stock | (112,917) | $ (112,917) | |||||
Stock-based compensation expense | 7,775 | 7,775 | |||||
Repurchase of vested restricted units for employee tax-withholding | (47) | (47) | |||||
Net income | 92,189 | 92,189 | |||||
Net income attributable to non-controlling interest in Premier LP | (55,704) | (55,704) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | (480,153) | (73,731) | (406,422) | ||||
Ending Balance (in shares) at Dec. 31, 2019 | 66,189,000 | 55,582,000 | (681,000) | ||||
Ending Balance at Dec. 31, 2019 | (432,880) | $ 669 | $ 0 | $ (23,718) | 0 | (409,831) | |
Increase (Decrease) in Stockholders' Equity | |||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | 4,866,000 | (4,866,000) | (723,000) | ||||
Exchange of Class B units for Class A common stock by member owners | 169,194 | $ 41 | $ 25,245 | 143,908 | |||
Increase in additional paid-in capital related to quarterly exchange by member owners, including associated TRA revaluation | 58,193 | 58,193 | |||||
Issuance of Class A common stock under equity incentive plan (in shares) | 58,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 309 | $ 1 | 308 | ||||
Treasury stock (in shares) | (42,000) | 42,000 | |||||
Treasury stock | (1,527) | $ (1,527) | |||||
Stock-based compensation expense | 7,568 | 7,568 | |||||
Repurchase of vested restricted units for employee tax-withholding | (123) | (123) | |||||
Net income | 73,217 | 73,217 | |||||
Net income attributable to non-controlling interest in Premier LP | (35,058) | (35,058) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | 302,569 | (69,103) | 371,672 | ||||
Ending Balance (in shares) at Mar. 31, 2020 | 71,071,000 | 50,716,000 | 0 | ||||
Ending Balance at Mar. 31, 2020 | $ 141,462 | $ 711 | $ 0 | $ 0 | $ 140,751 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating activities | ||
Net income | $ 236,735 | $ 260,586 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
(Income) loss from discontinued operations, net of tax | (1,009) | 3,862 |
Depreciation and amortization | 114,638 | 103,316 |
Equity in net income of unconsolidated affiliates | (11,038) | (4,687) |
Deferred income taxes | 60,394 | 9,849 |
Stock-based compensation | 19,048 | 20,354 |
Remeasurement of tax receivable agreement liabilities | (24,584) | 0 |
Impairment of held to maturity investments | 8,500 | 0 |
Gain on FFF put and call rights | (8,477) | (3,458) |
Changes in operating assets and liabilities, net of the effects of acquisitions: | ||
Accounts receivable, inventories, prepaid expenses and other assets | (95,953) | (30,268) |
Contract assets | (28,909) | (28,056) |
Accounts payable, accrued expenses, deferred revenue, revenue share obligations and other liabilities | (23,341) | 24,118 |
Other operating activities | 2,078 | 1,018 |
Net cash provided by operating activities from continuing operations | 248,082 | 356,634 |
Net cash provided by operating activities from discontinued operations | 9,338 | 11,502 |
Net cash provided by operating activities from continuing operations | 257,420 | 368,136 |
Investing activities | ||
Purchases of property and equipment | (69,326) | (69,906) |
Acquisition of businesses, net of cash acquired | (96,346) | (50,854) |
Investments in unconsolidated affiliates | (10,165) | 0 |
Proceeds from sale of assets | 3,632 | 0 |
Other investing activities | 251 | (11,414) |
Net cash used in investing activities from continuing operations | (171,954) | (132,174) |
Net cash used in investing activities from discontinued operations | 0 | (211) |
Net cash used in investing activities | (171,954) | (132,385) |
Financing activities | ||
Payments made on notes payable | (2,046) | 0 |
Proceeds from credit facility | 375,000 | 50,000 |
Payments on credit facility | (150,000) | 0 |
Distributions to limited partners of Premier LP | (39,590) | (44,746) |
Payments to limited partners of Premier LP related to tax receivable agreements | (17,425) | (17,975) |
Repurchase of Class A common stock (held as treasury stock) | (150,093) | (248,840) |
Other financing activities | (633) | 10,936 |
Net cash provided by (used in) financing activities | 15,213 | (250,625) |
Net increase (decrease) in cash and cash equivalents | 100,679 | (14,874) |
Cash and cash equivalents at beginning of year | 141,055 | 152,386 |
Cash and cash equivalents at end of period | 241,734 | 137,512 |
Supplemental schedule of non-cash investing and financing activities: | ||
Decrease in redeemable limited partners' capital for adjustment to fair value, with offsetting increase in additional paid-in-capital and accumulated deficit | 516,725 | 178,910 |
Decrease in redeemable limited partners' capital, with offsetting decrease in common stock and additional paid-in capital related to quarterly exchanges by member owners | 443,931 | 619,321 |
Decrease in redeemable limited partners' capital for limited partners' distribution payable | 35,701 | 42,426 |
Distributions utilized to reduce subscriptions, notes, interest and accounts receivable from member owners | 209 | 933 |
Net increase in deferred tax assets related to departures and quarterly exchanges by member owners and other adjustments | 63,958 | 128,723 |
Net (decrease) increase in tax receivable agreement liabilities related to departures and quarterly exchanges by member owners and other adjustments | (7,246) | 104,241 |
Net decrease in notes payable related to departures and quarterly exchanges by member owners and other adjustments | 364 | 0 |
Net increase in additional paid-in capital related to departures and quarterly exchanges by member owners and other adjustments | 71,568 | 24,482 |
Increase in treasury stock related to a payable as a result of applying trade date accounting when recording the repurchase of Class A common stock | 0 | 1,293 |
Contingent consideration related to acquisition of business | 26,481 | 0 |
Deferred consideration related to acquisition of business | 118,320 | 0 |
Non-cash additions to property and equipment | 5,000 | 0 |
Payable to member owners incurred upon repurchase of ownership interest | $ 1,372 | $ 1,820 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 9 Months Ended |
Mar. 31, 2020 | |
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 public stockholders and by hospitals, health systems and other healthcare organizations (such owners of Premier are referred to herein as "member owners") located in the United States. 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 17 - 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 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 services businesses in the United States focused on healthcare providers. 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 insurance management services. Acquisitions and Divestitures Acquisition of Acurity and Nexera Assets On February 28, 2020, the Company, through two newly formed consolidated subsidiaries, Prince A Purchaser, LLC ("PAP") and Prince N Purchaser, LLC ("PNP"), acquired substantially all of the assets and certain liabilities of Acurity, Inc. and Nexera, Inc., both indirect wholly-owned subsidiaries of Greater New York Hospital Association ("GNYHA"), for an aggregate amount of $291.5 million , of which $166.1 million was paid at closing with borrowings under the Company's Credit Facility (as defined in Note 9 - Debt ). Pursuant to the terms of the asset purchase agreement (as amended, the "Purchase Agreement"), an additional $120.0 million will be paid to the sellers in four equal annual installments of $30.0 million on or about June 30, 2021, 2022, 2023 and 2024. An additional $5.4 million is expected to be paid during the Company’s second fiscal quarter of 2021. In addition to the aggregate amount of $291.5 million , the Purchase Agreement provides a graduated earn-out opportunity to Acurity, Inc. of up to $30.0 million based upon the Company’s achievement of a range of member renewals on terms to be agreed to by the Company and GNYHA based on prevailing market conditions in December 2023. After the closing of the transaction, PAP and PNP changed their names to Acurity, LLC ("Acurity") and Nexera, LLC ("Nexera"), respectively. Acurity is a regional group purchasing organization and has been a customer and strategic partner of the Company for more than 24 years. Nexera is a hospital financial improvement consulting firm which partners with healthcare organizations to improve hospital and health system performance, with a significant focus on supply chain enhancement and transformation. The Company reports the operations of Acurity and Nexera as part of its Supply Chain Services segment. See Note 3 - Business Acquisitions for further information. Acquisition of Medpricer On October 28, 2019, the Company, through its consolidated subsidiary, Premier Supply Chain Improvement, Inc. ("PSCI"), acquired all of the outstanding capital stock in Medpricer.com, Inc. ("Medpricer") for an adjusted purchase price of $38.5 million with borrowings under the Credit Facility. Medpricer is a SaaS-based provider of technology solutions that enable hospitals and other organizations to analyze, benchmark and source purchased services contracts independent of any existing GPO affiliation. Medpricer is reported as part of the Supply Chain Services segment. See Note 3 - Business Acquisitions for further information. Acquisition of Stanson On November 9, 2018, the Company, through its consolidated subsidiary Premier Healthcare Solutions, Inc. ("PHSI"), acquired all of the outstanding capital stock in Stanson Health, Inc. ("Stanson") through a reverse subsidiary merger transaction for an adjusted purchase price of $55.4 million in cash. Stanson is a SaaS-based provider of clinical decision support tools that are integrated directly into the electronic health record workflow to help provide real-time, patient-specific best practices at the point of care. Stanson is reported as part of the Performance Services segment. See Note 3 - Business Acquisitions for further information. Divestiture of Specialty Pharmacy Business - Discontinued Operations On June 7, 2019, the Company and its consolidated subsidiaries, NS3 Health, LLC, Commcare Pharmacy - FTL, LLC, and Acro Pharmaceutical Services LLC completed the sale of prescription files and records and certain other assets used in the Company's specialty pharmacy business to ProCare Pharmacy, L.L.C., an affiliate of CVS Health Corporation, for $22.3 million . The Company also received $7.6 million related to the sale of a portion of its pharmaceutical inventory on June 10, 2019, and an additional $3.6 million on July 24, 2019 primarily in connection with the sale of its remaining pharmaceutical inventory. In addition, during the nine months ended March 31, 2020 , the Company substantially completed its wind down and exit from the specialty pharmacy business. See Note 4 - Discontinued Operations and Exit Activities for further information. The Company met the criteria for classifying certain assets and liabilities of the specialty pharmacy business as a discontinued operation as of June 30, 2019. Accordingly, unless otherwise indicated, information in the notes to the condensed consolidated financial statements has been retrospectively adjusted to reflect continuing operations for all periods presented. Company Structure The Company, through Premier GP, held an approximate 58% and 49% sole general partner interest in Premier LP at March 31, 2020 and June 30, 2019 , respectively. In addition to their equity ownership interest in the Company, the member owners held an approximate 42% and 51% limited partner interest in Premier LP at March 31, 2020 and June 30, 2019 , respectively. As a result of exchanges under an exchange agreement entered into by the member owners in connection with the completion of the Company's initial public offering on October 1, 2013 (the "Exchange Agreement"), as of July 31, 2019, the Class A common stock and Class B common stock represented approximately 50.2% and 49.8% respectively, of the Company's combined Class A and Class B common stock and accordingly, the Class B common stock held by member owners no longer represented the majority of the Company's outstanding common stock. On July 31, 2019, as a result of the Class B common unit exchange process, the Company no longer qualified for the "controlled company" exemption under NASDAQ rules and must comply with all general NASDAQ rules regarding board and committee composition by July 31, 2020. The Company expects to comply with all NASDAQ rules in a timely manner, including having a majority of independent directors on the Board of Directors by July 31, 2020. 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 March 31, 2020 and June 30, 2019 , the member owners owned 42% and 51% , respectively, of the Company's combined Class A and Class B common stock through their ownership of Class B common stock. During the nine months ended March 31, 2020 , the member owners exchanged 13.1 million Class B common units and associated Class B common shares for an equal number of Class A common shares pursuant to the Exchange Agreement. 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"). During the nine months ended March 31, 2020 , 13.1 million Class B common units were contributed to Premier LP, converted to Class A common units and remain outstanding. Correspondingly, 13.1 million Class B common shares were retired during the same period. For further information, see Note 12 - Earnings Per Share . At March 31, 2020 and June 30, 2019 , 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, owned 58% and 49% , respectively, of the Company's outstanding common stock through their ownership of Class A common stock. 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 2019 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, 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 March 31, 2020 and June 30, 2019 , including assets and liabilities of discontinued operations, consisted of the following (in thousands): March 31, 2020 June 30, 2019 Assets Current $ 742,525 $ 603,390 Noncurrent 1,874,662 1,536,685 Total assets of Premier LP $ 2,617,187 $ 2,140,075 Liabilities Current $ 753,763 $ 517,616 Noncurrent 290,163 118,032 Total liabilities of Premier LP $ 1,043,926 $ 635,648 Net income attributable to Premier LP, including income and expense that has been classified as discontinued operations, during the three and nine months ended March 31, 2020 and 2019 was as follows (in thousands): Three Months Ended Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Premier LP net income $ 84,185 $ 84,883 $ 290,430 $ 295,928 Premier LP's cash flows, including cash flows attributable to discontinued operations, for the nine months ended March 31, 2020 and 2019 consisted of the following (in thousands): Nine Months Ended March 31, 2020 2019 Net cash provided by (used in): Operating activities $ 252,566 $ 391,508 Investing activities (171,954 ) (132,385 ) Financing activities 24,790 (251,440 ) Net increase in cash and cash equivalents 105,402 7,683 Cash and cash equivalents at beginning of year 131,210 117,741 Cash and cash equivalents at end of period $ 236,612 $ 125,424 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 ("TRA"), 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 impairments, 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. The impact of the coronavirus ("COVID-19") pandemic on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the United States and global economies, which are uncertain and cannot be predicted at this time. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | (2) SIGNIFICANT ACCOUNTING POLICIES There have been no material changes to the Company's significant accounting policies as described in the 2019 Annual Report, except as described below. Recently Adopted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , ("ASU 2016-12"), which increases transparency and comparability by requiring the recognition of lease assets and lease liabilities on the balance sheet, as well as requiring the disclosure of key information about leasing arrangements. The Company adopted ASU 2016-02 on July 1, 2019 on a modified retrospective basis under the optional transition method; therefore, comparative periods are presented in accordance with Accounting Standards Codification ("ASC") Topic 840. Additionally, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward (1) historical lease classification and assessments for expired and existing leases, and (2) historical accounting for initial direct costs for existing leases. The Company elected not to recognize any operating lease right-of-use assets or operating lease liabilities for any lease whose term is 12 months or less and does not include a purchase option that the Company is reasonably certain to exercise. The Company also elected to account for the non-lease components within its leases as part of the single lease component to which they are related. Refer to "Adoption of ASC Topic 842" for additional information on the impact of the adoption of ASC Topic 842. 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's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , ("ASU 2018-15"), 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 or expense. ASU 2018-15 will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted including adoption in interim periods. 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 the Disclosure Requirements for Fair Value Measurement , ("ASU 2018-13"), 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. 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. ASU 2018-13 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments and the timing of when such losses are recorded. ASU 2016-13, will be effective for the Company for the fiscal year beginning July 1, 2020. The Company has performed an initial analysis on the impact of the adoption of the new standard, and does not expect the adoption to have a material impact on its consolidated financial statements and disclosures; however, we will continue to evaluate through July 1, 2020. Adoption of ASC Topic 842 As a result of adopting ASC Topic 842, the Company's accounting policies and condensed consolidated financial statements were updated as follows: The Company enters into lease contracts in which the Company is the lessee, substantially all of which are related to office space leased in various buildings used for general corporate purposes. The terms of these non-cancelable operating leases typically require the Company to pay rent and a share of operating expenses and real estate taxes, generally with an inflation-based rent increase included. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term beginning at the commencement date. Operating lease right-of-use assets are adjusted for lease incentives, deferred rent and initial direct costs, if incurred. The Company's leases generally do not include an implicit rate; therefore, the Company determined the present value of future minimum lease payments using an incremental borrowing rate based on information available as of July 1, 2019, the transition date. The related lease expense is recognized on a straight-line basis over the lease term. The following tables summarize the impacts of adopting ASC Topic 842 on the Condensed Consolidated Balance Sheets (in thousands). See Note 16 - Commitments and Contingencies for further information. June 30, 2019 As presented Impact of ASC Topic 842 July 1, 2019 Adjusted Intangible assets, net (a) $ 270,722 $ (8,474 ) $ 262,248 Deferred income tax assets 422,014 302 422,316 Operating lease right-of-use assets — 62,642 62,642 Total assets $ 2,569,567 $ 54,470 $ 2,624,037 Other current liabilities $ 7,113 $ 7,661 $ 14,774 Current liabilities of discontinued operations 11,797 1,200 12,997 Operating lease liabilities — 58,596 58,596 Other long-term liabilities 67,683 (12,088 ) 55,595 Total liabilities $ 908,547 $ 55,369 $ 963,916 Accumulated deficit (b) $ (775,674 ) $ (899 ) $ (776,573 ) Total liabilities and equity $ 2,569,567 $ 54,470 $ 2,624,037 (a) The Company reclassified a favorable lease commitment, which was recorded within intangible assets, net in the Consolidated Balance Sheets as of June 30, 2019 , to operating lease right-of-use assets as part of the adoption of ASC Topic 842. (b) The Company recognized a non-cash impairment charge of $1.2 million ( $0.9 million net of deferred tax impact), which was recorded as an adjustment to the opening balance of equity at July 1, 2019. The impairment charge was related to operating lease right-of-use assets of the specialty pharmacy business, which is classified as a discontinued operation. |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 9 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITIONS | (3) BUSINESS ACQUISITIONS Acquisition of Acurity and Nexera Assets On February 28, 2020, the Company completed the Acurity and Nexera asset acquisition (the "Acurity and Nexera asset acquisition"). Pursuant to the terms of the Purchase Agreement, the Company agreed to pay an aggregate amount of $291.5 million , of which $166.1 million was paid at closing with borrowings under the Credit Facility. An additional $120.0 million will be paid in four equal annual installments of $30.0 million on or about June 30, 2021, 2022, 2023 and 2024. An additional $5.4 million is expected to be paid to an affiliate of GNYHA during the Company’s second fiscal quarter of 2021. The Purchase Agreement provides an earn-out opportunity for Acurity, Inc. of up to $30.0 million based upon the Company’s achievement of a range of member renewals on terms to be agreed to by the Company and GNYHA based on prevailing market conditions in December 2023. As of March 31, 2020 , the fair value of the earn-out liability was $22.7 million (see Note 6 - Fair Value Measurements ). Prior to entering into the Purchase Agreement, Acurity, Inc. agreed to provide one-time rebates to certain of its then members based on their pre-closing purchasing volume. The Company has concluded that these one-time rebates of $93.8 million will be excluded from the purchase price and capitalized as prepaid contract administrative fee share at closing. The prepaid contract administrative fee share will be treated as a reduction in the determination of net administrative fee revenue over the remaining life of the acquired contracts on the Company’s financial statements. As a result, the total fair value of consideration paid as part of the acquisition totaled $202.6 million . The current and noncurrent components of the prepaid contract administrative fee share were recorded to the "Prepaid expenses and other current assets" and "Other assets" line items, respectively, on the Condensed Consolidated Balance Sheets. At the closing of the transaction, GNYHA Purchasing Alliance, LLC unilaterally terminated its participation in the TRA, and will cease to be a limited partner of Premier LP on November 2, 2020. The Company has accounted for the Acurity and Nexera asset acquisition as a business combination whereby the purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on fair values. Total fair value assigned to the intangible assets was $187.7 million , consisting primarily of acquired member relationships of $166.0 million . The initial purchase price allocation for the Acurity and Nexera asset acquisition is preliminary and subject to changes in the valuation of the assets acquired and liabilities assumed. The acquisition resulted in the recognition of $22.7 million of goodwill (see Note 8 - Goodwill and Intangible Assets ) attributable to the anticipated profitability of the acquired assets of Acurity, Inc. and Nexera, Inc. The acquisition was considered an asset acquisition for tax purposes, and accordingly, the Company expects the goodwill to be deductible for tax purposes. The initial purchase price allocation for the Acurity and Nexera asset acquisition is preliminary and subject to changes in fair value valuation of the assets acquired and the liabilities assumed. Pro forma results of operations for the acquisition have not been presented because the effects on revenue and net income were not material to the Company's historic consolidated financial statements. After closing of the transaction, PAP and PNP changed their names to Acurity and Nexera, respectively, and the Company reports their operations as part of its Supply Chain Services segment. Acquisition of Medpricer On October 28, 2019, the Company, through its consolidated subsidiary PSCI, acquired all of the outstanding capital stock in Medpricer for an adjusted purchase price of $38.5 million . The acquisition was funded with borrowings under the Credit Facility. The acquisition provides the sellers an earn-out opportunity of up to $5.0 million based on Medpricer's achievement of a revenue target for the calendar year ended December 31, 2020. As of March 31, 2020 , the fair value of the earn-out liability was $1.9 million (see Note 6 - Fair Value Measurements ). The Company has accounted for the Medpricer acquisition as a business combination whereby the purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on their fair values. Total fair value assigned to intangible assets acquired was $12.1 million , primarily comprised of developed software technology. The Medpricer acquisition resulted in the recognition of $26.2 million of goodwill attributable to the anticipated profitability of Medpricer. The Medpricer acquisition was considered a stock purchase for tax purposes and accordingly, the goodwill is not deductible for tax purposes. Pro forma results of operations for the acquisition have not been presented because the effects on revenue and net income were not material to the Company's historic consolidated financial statements. The Company reports Medpricer as part of its Supply Chain Services segment. Acquisition of Stanson On November 9, 2018, the Company, through its consolidated subsidiary PHSI, acquired all of the outstanding capital stock in Stanson through a reverse subsidiary merger transaction for an adjusted purchase price of $55.4 million . The acquisition was funded with cash on hand. The acquisition provides the sellers and certain employees an earn-out opportunity of up to $15.0 million based on Stanson's successful commercial delivery of a SaaS tool on or prior to March 31, 2020, achievement of certain development milestones on or prior to December 31, 2020 and achievement of a revenue target for the calendar year ended December 31, 2020. As of March 31, 2020 , the fair value of the earn-out liability was $10.3 million (see Note 6 - Fair Value Measurements ). The Company has accounted for the Stanson acquisition as a business combination whereby the purchase price was allocated to tangible and intangible assets acquired and liabilities assumed based on their fair values. Total fair value assigned to the intangible assets acquired was $23.6 million , primarily comprised of developed software technology. The Stanson acquisition resulted in the recognition of $37.5 million of goodwill (see Note 8 - Goodwill and Intangible Assets ) attributable to the anticipated profitability of Stanson. The Stanson acquisition was considered a stock purchase for tax purposes and accordingly, the goodwill is not deductible for tax purposes. Pro forma results of operations for the acquisition have not been presented because the effects on revenue and net income were not material to the Company's historic consolidated financial statements. The Company reports Stanson as part of its Performance Services segment. |
DISCONTINUED OPERATIONS AND EXI
DISCONTINUED OPERATIONS AND EXIT ACTIVITIES | 9 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS AND EXIT ACTIVITIES | (4) DISCONTINUED OPERATIONS AND EXIT ACTIVITIES In connection with the sale of certain assets and wind down and exit from the specialty pharmacy business (see Note 1 - Organization and Basis of Presentation ), the Company met the criteria for classifying certain assets and liabilities of its specialty pharmacy business as a discontinued operation as of June 30, 2019 . Prior to its classification as a discontinued operation, the specialty pharmacy business was included as part of the Supply Chain Services segment. The Company incurred $0.9 million of severance and retention expenses directly associated with the specialty pharmacy business within discontinued operations during the nine months ended March 31, 2020 . The following table summarizes the major classes of assets and liabilities classified as discontinued operations at March 31, 2020 and June 30, 2019 (in thousands): March 31, 2020 June 30, 2019 Assets Accounts receivable $ — $ 21,183 Inventory — 3,385 Assets of discontinued operations $ — $ 24,568 Liabilities Accounts payable $ — $ 2,255 Accrued expenses — 6,630 Accrued compensation and benefits — 2,373 Other current liabilities — 539 Liabilities of discontinued operations $ — $ 11,797 The following table summarizes the major components of net income (loss) from discontinued operations (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Net revenue $ — $ 121,662 $ — $ 344,873 Cost of revenue — 117,942 — 334,567 Gross profit — 3,720 — 10,306 Selling, general and administrative expense — 5,167 — 14,286 Amortization of purchased intangible assets — 661 — 1,984 Operating expenses — 5,828 — 16,270 Operating loss from discontinued operations — (2,108 ) — (5,964 ) Net gain on disposal of assets 24 — 1,399 — Income (loss) from discontinued operations before income taxes 24 (2,108 ) 1,399 (5,964 ) Income tax expense (benefit) 19 (645 ) 390 (2,102 ) Income (loss) from discontinued operations, net of tax 5 (1,463 ) 1,009 (3,862 ) Net (income) loss from discontinued operations attributable to non-controlling interest in Premier LP (3 ) 747 (480 ) 2,098 Net income (loss) from discontinued operations attributable to stockholders $ 2 $ (716 ) $ 529 $ (1,764 ) |
INVESTMENTS
INVESTMENTS | 9 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | (5) INVESTMENTS Investments in Unconsolidated Affiliates The Company's investments in unconsolidated affiliates consisted of the following (in thousands): Carrying Value Equity in Net Income Three Months Ended Nine Months Ended March 31, March 31, March 31, 2020 June 30, 2019 2020 2019 2020 2019 FFF $ 107,735 $ 96,905 $ 4,340 $ 444 $ 10,830 $ 4,430 Other investments 12,907 2,731 102 109 208 257 Total investments $ 120,642 $ 99,636 $ 4,442 $ 553 $ 11,038 $ 4,687 The Company, through PSCI, held a 49% interest in FFF Enterprises, Inc. ("FFF") through its ownership of stock of FFF at March 31, 2020 and June 30, 2019 . The Company records the fair value of the FFF put and call rights in the accompanying Condensed Consolidated Balance Sheets (see Note 6 - Fair Value Measurements for additional information). 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. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | (6) FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table provides a summary of the Company's financial assets and liabilities measured at fair value on a recurring basis at March 31, 2020 (in thousands): Fair Value of Financial Assets and Liabilities Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents $ 188,101 $ 188,101 $ — $ — Deferred compensation plan assets 45,697 45,697 — — Total assets $ 233,798 $ 233,798 $ — $ — Earn-out liabilities $ 34,887 $ — $ — $ 34,887 FFF put right 32,971 — — 32,971 Total liabilities $ 67,858 $ — $ — $ 67,858 The following table provides a summary of the Company's financial assets and liabilities measured at fair value on a recurring basis at June 30, 2019 (in thousands): Fair Value of Financial Assets and Liabilities Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents $ 57,607 $ 57,607 $ — $ — FFF call right 204 — — 204 Deferred compensation plan assets 50,229 50,229 — — Total assets $ 108,040 $ 107,836 $ — $ 204 Earn-out liability $ 6,816 $ — $ — $ 6,816 FFF put right 41,652 — — 41,652 Total liabilities $ 48,468 $ — $ — $ 48,468 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 ( $2.9 million and $4.8 million at March 31, 2020 and June 30, 2019 , respectively) was included in the "Prepaid expenses and other current assets" line item 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 In connection with the Company's equity investment in FFF, the Company entered into a shareholders' agreement on July 26, 2016, which was amended and restated on November 22, 2017. On July 29, 2019, the parties entered into a second amended and restated shareholders' agreement that provides, among other things, that the majority shareholder of FFF holds a put right that requires the Company to purchase the majority shareholder's interest in FFF, on an all or nothing basis, on or after April 15, 2023. Any required purchase by the Company upon exercise of the put right by FFF's majority shareholder must 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, under the second amended and restated shareholders' agreement, the Company has a call right that requires the majority shareholder to sell its remaining interest in FFF to the Company, and is exercisable at any time within the later of 180 calendar days after the date of a Key Man Event (generally defined in the second amended and restated shareholders' agreement as the resignation, termination for cause, death or disability of the majority shareholder) or after January 30, 2021. As of March 31, 2020 , the call right had zero value. In the event that either of these 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 expense in the accompanying Condensed Consolidated Statements of Income . Earn-out liabilities Earn-out liabilities were established in connection with the Acurity and Nexera asset acquisition as well as the Medpricer and Stanson acquisitions. The earn-out liabilities were classified as Level 3 of the fair value hierarchy. The earn-out liability value for the Acurity and Nexera asset acquisition is based upon the Company’s estimated achievement of a range of member renewals on terms to be agreed to by the Company and GNYHA based on prevailing market conditions in December 2023. The earn-out liability values for the Medpricer and Stanson acquisitions 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 Purchases (Settlements) Gain (Loss) Ending Balance Three Months Ended March 31, 2020 FFF call right $ — $ — $ — $ — Total Level 3 assets $ — $ — $ — $ — Earn-out liability $ 13,420 $ 22,700 $ 1,233 $ 34,887 FFF put right 19,065 — (13,906 ) 32,971 Total Level 3 liabilities $ 32,485 $ 22,700 $ (12,673 ) $ 67,858 Three Months Ended March 31, 2019 FFF call right $ 431 $ — $ (103 ) $ 328 Total Level 3 assets $ 431 $ — $ (103 ) $ 328 Earn-out liabilities $ 4,548 $ — $ (1,695 ) $ 6,243 FFF put right 34,295 — (4,004 ) 38,299 Total Level 3 liabilities $ 38,843 $ — $ (5,699 ) $ 44,542 Nine Months Ended March 31, 2020 FFF call right $ 204 $ — $ (204 ) $ — Total Level 3 assets $ 204 $ — $ (204 ) $ — Earn-out liabilities $ 6,816 $ 26,481 $ (1,590 ) $ 34,887 FFF put right 41,652 — 8,681 32,971 Total Level 3 liabilities $ 48,468 $ 26,481 $ 7,091 $ 67,858 Nine Months Ended March 31, 2019 FFF call right $ 610 $ — $ (282 ) $ 328 Total Level 3 assets $ 610 $ — $ (282 ) $ 328 Earn-out liabilities $ — $ 4,548 $ (1,695 ) $ 6,243 FFF put right 42,041 — 3,742 38,299 Total Level 3 liabilities $ 42,041 $ 4,548 $ 2,047 $ 44,542 Non-Recurring Fair Value Measurements During the nine months ended March 31, 2020 , no non-recurring fair value measurements were required relating to the measurement of goodwill and intangible assets for impairment. However, purchase price allocations required significant non-recurring Level 3 inputs. The preliminary fair values of the acquired intangible assets resulting from the Acurity and Nexera asset acquisition as well as the acquisition of Medpricer were determined using the income approach (see Note 3 - Business Acquisitions ). 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 value by $0.3 million and $0.5 million at March 31, 2020 and June 30, 2019 , respectively, based on assumed market interest rates of 2.1% and 3.4% , respectively. Other Financial Instruments The fair values of cash, accounts receivable, accounts payable, accrued liabilities, and the Credit Facility (as defined in Note 9 - Debt |
CONTRACT BALANCES
CONTRACT BALANCES | 9 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | (7) CONTRACT BALANCES Deferred Revenue Revenue recognized during the nine months ended March 31, 2020 that was included in the opening balance of deferred revenue at June 30, 2019 was $27.9 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. Reduction in net revenue recognized during the three and nine months ended March 31, 2020 from performance obligations that were satisfied or partially satisfied in prior periods was $0.1 million and $1.4 million , respectively. The reduction was driven by $3.8 million and $6.9 million , respectively, associated with revised forecasts from underlying contracts that include variable consideration components as well as additional fluctuations due to input method contracts which occur in the normal course of business. This was offset by $3.7 million and $5.5 million , respectively, of net administrative fees revenue related to under-forecasted cash receipts received in the current period. Net revenue recognized during the three and nine months ended March 31, 2019 from performance obligations that were satisfied or partially satisfied in prior periods was $3.6 million and $9.6 million , respectively. The net revenue recognized during the three and nine months ended March 31, 2019 was driven primarily by $3.8 million and $5.4 million , respectively, of net administrative fees revenue related to under-forecasted cash receipts received in the current period as well as a reduction of $0.2 million and an increase of $4.2 million , respectively, associated with revised forecasts from underlying contracts that include variable consideration components as well as additional fluctuations due to input method contracts which occur in the normal course of business. Remaining performance obligations represent the portion of the transaction price that has not yet been satisfied or achieved. As of March 31, 2020 , the aggregate amount of the transaction price allocated to remaining performance obligations was $572.7 million . The Company expects to recognize approximately 41% of the remaining performance obligations over the next 12 months and an additional 28% over the following 12 months, with the remainder recognized thereafter. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | (8) GOODWILL AND INTANGIBLE ASSETS Goodwill Goodwill consisted of the following (in thousands): Supply Chain Services Performance Services Total June 30, 2019 $ 336,973 $ 543,736 $ 880,709 Acquisition of businesses and assets 48,906 — 48,906 March 31, 2020 $ 385,879 $ 543,736 $ 929,615 The initial purchase price allocations for the Company's Acurity and Nexera asset acquisition and the acquisition of Medpricer are preliminary and subject to changes in fair value of working capital and valuation of the assets acquired and the liabilities assumed. See Note 3 - Business Acquisitions for more information. Intangible Assets, Net Intangible assets, net consisted of the following (in thousands): Weighted Average Useful Life as of March 31, 2020 March 31, 2020 June 30, 2019 Member relationships 14.8 years $ 386,100 $ 220,100 Technology 5.6 years 169,217 164,217 Customer relationships 9.0 years 63,230 48,010 Trade names 7.6 years 23,870 16,060 Non-compete agreements 5.3 years 11,315 8,800 Favorable lease commitments n/a — 11,393 Other 6.0 years 260 — Total intangible assets 653,992 468,580 Accumulated amortization (233,888 ) (197,858 ) Total intangible assets, net $ 420,104 $ 270,722 Total intangible assets increased due to the Acurity and Nexera asset acquisition and the acquisition of Medpricer (see Note 3 - Business Acquisitions ). Intangible asset amortization was $14.0 million and $13.6 million for the three months ended March 31, 2020 and 2019 , respectively, and $38.9 million and $39.8 million for the nine months ended March 31, 2020 and 2019 , respectively. |
DEBT
DEBT | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | (9) DEBT Long-term debt consisted of the following (in thousands): March 31, 2020 June 30, 2019 Credit Facility $ 250,000 $ 25,000 Notes payable 9,573 8,611 Total debt 259,573 33,611 Less: current portion (254,745 ) (27,608 ) Total long-term debt $ 4,828 $ 6,003 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 November 9, 2018 (the "Credit Facility"). The Credit Facility has a maturity date of November 9, 2023, subject to up to two one -year extensions at the request of the Co-Borrowers and approval of a majority of the lenders under the Credit Facility. The Credit Facility provides for borrowings of up to $1.0 billion with (i) a $50.0 million sub-facility for standby letters of credit and (ii) a $100.0 million sub-facility for swingline loans. The Credit Facility also provides that Co-Borrowers may from time to time (i) incur incremental term loans and (ii) request an increase in the revolving commitments under the Credit Facility, together up to an aggregate of $350.0 million , subject to the approval of the lenders providing such term loans or revolving commitment increases. 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. Outstanding borrowings under the Credit Facility bear interest on a variable rate structure with borrowings bearing interest at either London Interbank Offered Rate ("LIBOR") plus an applicable margin ranging from 1.000% to 1.500% or the prime lending rate plus an applicable margin ranging from 0.000% to 0.500% . At March 31, 2020 , the interest rate on outstanding borrowings under the Credit Facility was 1.96% . The Credit Facility contains customary representations and warranties as well as customary affirmative and negative covenants. Premier GP was in compliance with all such covenants at March 31, 2020 . The Credit Facility also contains customary events of default, including a cross-default of any indebtedness or guarantees in excess of $75.0 million . 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 a majority of the lenders under the Credit Facility, terminate the commitments and declare all of the amounts owed under the Credit Facility to be immediately due and payable. 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. During the nine months ended March 31, 2020 , the Company borrowed $375.0 million and repaid $150.0 million of borrowings under the Credit Facility. The Company had $250.0 million in outstanding borrowings under the Credit Facility at March 31, 2020 with $750.0 million of available borrowing capacity after reductions for outstanding borrowings and outstanding letters of credit. On April 27, 2020, the Company repaid $150.0 million of outstanding borrowings under the Credit Facility. Notes Payable At March 31, 2020 and June 30, 2019 , the Company had $9.6 million and $8.6 million in notes payable, respectively, of which $4.8 million and $2.6 million , respectively, were included in current portion of long-term debt in the accompanyin g Condensed Consolidated Balance Sheets . Notes payable do not bear interest and generally have stated maturities of five years from their date of issuance. |
REDEEMABLE LIMITED PARTNERS' CA
REDEEMABLE LIMITED PARTNERS' CAPITAL | 9 Months Ended |
Mar. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
REDEEMABLE LIMITED PARTNERS' CAPITAL | (10) REDEEMABLE LIMITED PARTNERS' CAPITAL Redeemable limited partners' capital represents the member owners' 42% ownership of Premier LP through their ownership of Class B common units at March 31, 2020 . 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 nine months ended March 31, 2020 and 2019 , 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 $516.7 million and $178.9 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 tables below provide a summary of the changes in the redeemable limited partners' capital from June 30, 2019 to March 31, 2020 and June 30, 2018 to March 31, 2019 (in thousands): Receivables From Limited Partners Redeemable Limited Partners' Capital Total Redeemable Limited Partners' Capital Balance at June 30, 2019 $ (1,204 ) $ 2,524,474 $ 2,523,270 Distributions applied to receivables from limited partners 69 — 69 Redemption of limited partners — (1,371 ) (1,371 ) Net income attributable to non-controlling interest in Premier LP — 41,907 41,907 Distributions to limited partners — (13,699 ) (13,699 ) Exchange of Class B common units for Class A common stock by member owners — (50,792 ) (50,792 ) Adjustment of redeemable limited partners' capital to redemption amount — (694,309 ) (694,309 ) Balance at September 30, 2019 $ (1,135 ) $ 1,806,210 $ 1,805,075 Distributions applied to receivables from limited partners 70 — 70 Net income attributable to non-controlling interest in Premier LP — 55,704 55,704 Distributions to limited partners — (12,689 ) (12,689 ) Exchange of Class B common units for Class A common stock by member owners — (223,946 ) (223,946 ) Adjustment of redeemable limited partners' capital to redemption amount — 480,153 480,153 Balance at December 31, 2019 $ (1,065 ) $ 2,105,432 $ 2,104,367 Distributions applied to receivables from limited partners 71 — 71 Net income attributable to non-controlling interest in Premier LP — 35,058 35,058 Distributions to limited partners — (9,314 ) (9,314 ) Exchange of Class B common units for Class A common stock by member owners — (169,194 ) (169,194 ) Adjustment of redeemable limited partners' capital to redemption amount — (302,569 ) (302,569 ) Balance at March 31, 2020 $ (994 ) $ 1,659,413 $ 1,658,419 Receivables From Limited Partners Redeemable Limited Partners' Capital Total Redeemable Limited Partners' Capital Balance at 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 Balance at September 30, 2018 $ (1,768 ) $ 3,640,392 $ 3,638,624 Distributions applied to receivables from limited partners 416 — 416 Redemption of limited partners — (448 ) (448 ) Net income attributable to non-controlling interest in Premier LP — 62,631 62,631 Distributions to limited partners — (14,288 ) (14,288 ) Exchange of Class B common units for Class A common stock by member owners — (441,344 ) (441,344 ) Adjustment of redeemable limited partners' capital to redemption amount — (651,709 ) (651,709 ) Balance at December 31, 2018 $ (1,352 ) $ 2,595,234 $ 2,593,882 Distributions applied to receivables from limited partners 80 — 80 Redemption of limited partners — (1,372 ) (1,372 ) Net income attributable to non-controlling interest in Premier LP — 43,388 43,388 Distributions to limited partners — (13,145 ) (13,145 ) Exchange of Class B common units for Class A common stock by member owners — (147,441 ) (147,441 ) Adjustment of redeemable limited partners' capital to redemption amount — (235,394 ) (235,394 ) Balance at March 31, 2019 $ (1,272 ) $ 2,241,270 $ 2,239,998 Receivables from limited partners represent amounts due from limited partners for their required capital in Premier LP. These receivables are interest bearing notes and 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 nine months ended March 31, 2020 . During the nine months ended March 31, 2020 , three 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 or 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 22, 2019 $ 13,202 November 27, 2019 $ 13,699 February 20, 2020 $ 12,689 (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 $9.3 million quarterly distribution on or before May 29, 2020. The distribution is reflected in limited partners' distribution payable in the accompanying Condensed Consolidated Balance Sheets at March 31, 2020 . 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 independent Audit and Compliance Committee of the Board of Directors. During the nine months ended March 31, 2020 , the Company recorded total reductions of $443.9 million to redeemable limited partners' capital to reflect the exchange of 13.1 million Class B common units and surrender and retirement of a corresponding number of 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 12 - Earnings 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, 2019 1,310,771 $ 50,792 October 31, 2019 6,873,699 223,946 January 31, 2020 4,866,082 169,194 Total 13,050,552 $ 443,932 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) | 9 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY (DEFICIT) | (11) STOCKHOLDERS' EQUITY (DEFICIT) As of March 31, 2020 , there were 71,070,617 shares of the Company's Class A common stock, par value $0.01 per share, and 50,715,564 shares of the Company's Class B common stock, par value $0.000001 per share, outstanding. On May 7, 2019, the Company announced that its Board of Directors authorized the repurchase of up to $300.0 million of the Company's Class A common stock during fiscal year 2020. As of March 31, 2020 , the Company had purchased 4.6 million shares of Class A common stock at an average price of $32.28 per share for a total purchase price of $150.0 million . The repurchase authorization may be suspended, delayed, or discontinued at any time at the discretion of the Company's Board of Directors. Repurchases are subject to compliance with applicable federal securities laws and the Company's management may, at its discretion, suspend, delay, or discontinue repurchases at any time, based on market conditions, alternate uses of capital, or other factors. The Company does not currently expect to make additional purchases of its Class A common stock under the repurchase program during the remainder of fiscal year 2020. 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 PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | (12) EARNINGS PER SHARE Basic earnings per share 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, which is due to 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 (loss) earnings per share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Numerator for basic earnings per share: Net income from continuing operations attributable to stockholders (a) $ 340,726 $ 266,524 $ 620,262 $ 280,128 Net income (loss) from discontinued operations attributable to stockholders 2 (716 ) 529 (1,764 ) Net income attributable to stockholders $ 340,728 $ 265,808 $ 620,791 $ 278,364 Numerator for diluted earnings per share: Net income from continuing operations attributable to stockholders (a) $ 340,726 $ 266,524 $ 620,262 $ 280,128 Adjustment of redeemable limited partners' capital to redemption amount (302,569 ) (235,394 ) (516,725 ) (178,910 ) Net income from continuing operations attributable to non-controlling interest in Premier LP 35,055 44,135 132,189 163,230 Net income from continuing operations 73,212 75,265 235,726 264,448 Tax effect on Premier, Inc. net income (b) (7,067 ) (11,762 ) (30,007 ) (38,503 ) Adjusted net income from continuing operations $ 66,145 $ 63,503 $ 205,719 $ 225,945 Net income (loss) from discontinued operations attributable to stockholders $ 2 $ (716 ) $ 529 $ (1,764 ) Net income (loss) from discontinued operations attributable to non-controlling interest in Premier LP 3 (747 ) 480 (2,098 ) Adjusted net income (loss) from discontinued operations $ 5 $ (1,463 ) $ 1,009 $ (3,862 ) Adjusted net income $ 66,150 $ 62,040 $ 206,728 $ 222,083 Denominator for earnings per share: Basic weighted average shares outstanding 69,451 62,020 65,582 58,346 Effect of dilutive securities: (d) Stock options 232 474 357 630 Restricted stock 216 256 239 304 Performance share awards 197 — 66 — Class B shares outstanding 52,374 66,322 57,786 72,969 Diluted weighted average shares and assumed conversions 122,470 129,072 124,030 132,249 Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Basic earnings per share: Basic earnings per share from continuing operations $ 4.91 $ 4.30 $ 9.46 $ 4.80 Basic earnings (loss) per share from discontinued operations — (0.01 ) 0.01 (0.03 ) Basic earnings per share attributable to stockholders $ 4.91 $ 4.29 $ 9.47 $ 4.77 Diluted earnings per share: Diluted earnings per share from continuing operations $ 0.54 $ 0.49 $ 1.66 $ 1.71 Diluted earnings (loss) per share from discontinued operations — (0.01 ) — (0.03 ) Diluted earnings per share attributable to stockholders $ 0.54 $ 0.48 $ 1.66 $ 1.68 (a) Net income from continuing operations attributable to stockholders was calculated as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2019 2018 Net income from continuing operations $ 73,212 $ 75,265 $ 235,726 $ 264,448 Net income from continuing operations attributable to non-controlling interest in Premier LP (35,055 ) (44,135 ) (132,189 ) (163,230 ) Adjustment of redeemable limited partners' capital to redemption amount 302,569 235,394 516,725 178,910 Net income from continuing operations attributable to stockholders $ 340,726 $ 266,524 $ 620,262 $ 280,128 (b) Represents income tax expense related to Premier, Inc. retaining the portion of net income from continuing operations attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings per share. (c) Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for the three and nine months ended March 31, 2020 and 2019 . (d) For three and nine months ended March 31, 2020 , the effect of 0.8 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. Additionally, the effect of less than $0.1 million performance share awards was excluded from diluted weighted average shares outstanding as the awards had not satisfied the applicable performance criteria at the end of the period. For the three and nine months ended March 31, 2019 , 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. 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. Pursuant to the terms of the Exchange Agreement, on a quarterly basis, the Company has the option, as determined by the independent 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 10 - 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, 2019 1,310,771 62,767,860 63,274,182 49.8%/50.2% October 31, 2019 6,873,699 55,581,646 66,522,023 46%/54% January 31, 2020 4,866,082 50,715,564 71,066,141 42%/58% April 30, 2020 (c) 502,466 50,213,098 71,574,119 41%/59% (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 11 - Stockholders' Equity (Deficit) ) and equity incentive plan (see Note 13 - Stock-Based Compensation ). (c) As the quarterly exchange occurred on April 30, 2020, the impact of the exchange is not reflected in the condensed consolidated financial statements for the quarter ended March 31, 2020 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | (13) STOCK-BASED COMPENSATION Stock-based compensation expense is recognized over the requisite service period, which generally equals the stated vesting period. The associated deferred tax benefit was calculated at a rate of 25% for the three and nine months ended March 31, 2020 and 2019 , 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. See Note 14 - Income Taxes for further information. Stock-based compensation expense and the resulting deferred tax benefits were as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Pre-tax stock-based compensation expense (a) $ 7,568 $ 6,666 $ 19,048 $ 20,354 Deferred tax benefit 1,915 1,647 4,819 5,027 Total stock-based compensation expense, net of tax $ 5,653 $ 5,019 $ 14,229 $ 15,327 (a) Pre-tax stock based compensation expense attributable to discontinued operations of $0.1 million and $0.3 million , respectively, for the three and nine months ended March 31, 2019 is not included in the above table. 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 14.8 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 March 31, 2020 , there were 5.9 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 nine months ended March 31, 2020 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2019 589,550 $ 37.06 1,439,815 $ 36.38 2,798,673 $ 30.22 Granted 350,700 $ 36.73 738,118 $ 36.06 — $ — Vested/exercised (217,356 ) $ 33.55 (493,759 ) $ 31.58 (221,147 ) $ 30.49 Forfeited (32,989 ) $ 38.65 (71,444 ) $ 38.82 (18,121 ) $ 32.90 Outstanding at March 31, 2020 689,905 $ 37.92 1,612,730 $ 37.59 2,559,405 $ 30.18 Stock options outstanding and exercisable at March 31, 2020 2,428,055 $ 30.04 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 twelve months after 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 March 31, 2020 was as follows (in thousands): Unrecognized Stock-Based Compensation Expense Weighted Average Amortization Period Restricted stock $ 14,745 1.9 years Performance share awards 29,777 1.9 years Stock options 617 0.5 years Total unrecognized stock-based compensation expense $ 45,139 1.9 years The aggregate intrinsic value of stock options at March 31, 2020 was as follows (in thousands): Intrinsic Value of Stock Options Outstanding and exercisable $ 7,762 Expected to vest 12 Total outstanding $ 7,774 Exercised during the nine months ended March 31, 2020 $ 1,541 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (14) INCOME TAXES The Company's income tax expense is attributable to the activities of the Company, PHSI, PSCI and Premier Marketplace, LLC ("PMLLC"), 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 statutes, Premier LP is not subject to federal and state income taxes, as the income realized by Premier LP is taxable to its partners. On November 8, 2019, the State of North Carolina made significant changes to its income tax law, effective for tax years beginning on or after January 1, 2020. As a result, the Company remeasured its deferred tax assets and liabilities as of the enactment date and recorded an income tax expense of $38.6 million as a discrete item in the Company's income tax provision during the quarter ended December 31, 2019 . On March 27, 2020, in response to COVID-19, the U.S. government enacted the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The CARES Act is an emergency economic stimulus package which contains, among other things, changes to income tax law including a modification to the net operating loss ("NOL") carryback period. The NOL carryback provision will allow the Company to carry back $21.1 million of NOLs to offset taxable income in prior years. As a result of the NOL carryback provision, the Company expects an income tax refund of $7.3 million with a corresponding income tax benefit of $2.9 million for the rate differential between the cash benefit at 35% and the deferred tax valued at 21%. Income tax expense for the three months ended March 31, 2020 and 2019 was $4.2 million and $11.7 million , respectively, which reflects effective tax rates of 5% and 13% , respectively. Income tax expense for the nine months ended March 31, 2020 and 2019 was $78.3 million and $25.8 million , respectively, which reflects effective tax rates of 25% and 9% , respectively. The decrease in the effective tax rate for the three months ended March 31, 2020 is primarily driven by the income tax benefit associated with the NOL carryback provisions under the CARES Act and the release of the valuation allowance. The increase in the effective tax rate for the nine months ended March 31, 2020 is largely attributable to the aforementioned remeasurement of deferred tax balances related to the change in North Carolina state income tax law. Excluding the deferred tax remeasurement, the effective tax rate is 13% for the nine months ended March 31, 2020 . 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. Net deferred tax assets increase d by $5.7 million to $422.9 million at March 31, 2020 from $417.2 million at June 30, 2019 . The increase in net deferred tax assets was largely driven by increase of $64.0 million in deferred tax assets related to departures and quarterly exchanges of Class B common units of Premier LP by the member owners during the nine months ended March 31, 2020 , partially offset by a decrease of $38.6 million from remeasurement of deferred tax balances related to the change in North Carolina state income tax law and $19.7 million attributable to the deferred tax impact of tax-deductible goodwill and the NOL carryback provision taken as a result of the CARES Act. 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 decrease d by $49.3 million to $294.9 million at March 31, 2020 from $344.1 million at June 30, 2019 . The change in TRA liabilities was driven by $86.3 million attributable to member departures, $24.6 million in TRA remeasurements primarily due to the change in North Carolina state income tax law and $17.4 million in TRA payments during the nine months ended March 31, 2020 . These decrease s were partially offset by an increase of $79.0 million in connection with the quarterly member owner exchanges that occurred during the nine months ended March 31, 2020 . |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | (15) 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 $4.3 million and $0.5 million for the three months ended March 31, 2020 and 2019 , respectively, and $10.8 million and $4.4 million for the nine months ended March 31, 2020 and 2019 , 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 $1.2 million and $1.9 million during the three months ended March 31, 2020 and 2019 , respectively, and $5.8 million and $6.1 million for the nine months ended March 31, 2020 and 2019 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (16) COMMITMENTS AND CONTINGENCIES Operating Leases Operating lease expense for the three and nine months ended March 31, 2020 was $2.7 million and $8.2 million , respectively. As of March 31, 2020 , the weighted average remaining lease term was 6.0 years and the weighted average discount rate was 3.9% . Future minimum lease payments under noncancelable operating leases with initial lease terms in excess of one year were as follows (in thousands): March 31, 2020 June 30, 2019 (a) 2020 (b) $ 3,091 $ 12,130 2021 11,806 11,539 2022 11,735 11,468 2023 12,012 11,533 2024 12,145 11,510 Thereafter 22,348 20,645 Total future minimum lease payments 73,137 78,825 Less: imputed interest 8,114 — Total operating lease liabilities (c) $ 65,023 $ — (a) Presented in accordance with ASC Topic 840. (b) As of March 31, 2020 , future minimum lease payments are for the period from April 1, 2020 to June 30, 2020. (c) As of March 31, 2020 , total operating lease liabilities included $9.7 million within other liabilities, current in the Condensed Consolidated Balance Sheets. Other Matters The Company is not currently involved in any litigation it believes to be material. 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 | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENTS | (17) 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, and direct sourcing activities. The Performance Services segment includes the Company's informatics, collaborative, consulting services and insurance services businesses. The following table presents disaggregated revenue by business segment and underlying source (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Net revenue: Supply Chain Services Net administrative fees $ 174,049 $ 164,534 $ 518,566 $ 492,229 Other services and support 3,396 2,484 8,439 6,520 Services 177,445 167,018 527,005 498,749 Products 61,183 41,568 167,344 129,441 Total Supply Chain Services (a) 238,628 208,586 694,349 628,190 Performance Services (a) 96,195 92,627 262,490 273,214 Net revenue $ 334,823 $ 301,213 $ 956,839 $ 901,404 (a) Includes intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material. Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Depreciation and amortization expense (a) : Supply Chain Services $ 6,896 $ 4,616 $ 16,592 $ 13,905 Performance Services 30,950 27,977 91,862 81,208 Corporate 1,897 2,776 6,184 8,203 Total depreciation and amortization expense $ 39,743 $ 35,369 $ 114,638 $ 103,316 Capital expenditures: Supply Chain Services $ 2,485 $ 469 $ 4,571 $ 1,305 Performance Services 20,840 20,437 57,956 59,267 Corporate 1,233 1,891 6,799 9,334 Total capital expenditures $ 24,558 $ 22,797 $ 69,326 $ 69,906 March 31, 2020 June 30, 2019 Total assets (b) : Supply Chain Services $ 1,611,886 $ 1,111,934 Performance Services 919,874 941,183 Corporate 532,743 516,450 Total assets $ 3,064,503 $ 2,569,567 Eliminations (c) (1,434 ) — Total assets, net $ 3,063,069 $ 2,569,567 (a) Includes amortization of purchased intangible assets. (b) Total assets in Supply Chain Services includes $24.6 million as of June 30, 2019 for discontinued operations related to the specialty pharmacy business. There are no assets for discontinued operations related to the specialty pharmacy business as of March 31, 2020 . (c) Includes eliminations of intersegment transactions which occur during the ordinary course of business. 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. Segment Adjusted EBITDA also excludes any income and expense that has been classified as discontinued operations. 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 March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Income before income taxes $ 77,377 $ 87,002 $ 314,062 $ 290,239 Equity in net income of unconsolidated affiliates (a) (4,442 ) (553 ) (11,038 ) (4,687 ) Interest and investment loss, net 9,966 1,081 9,849 2,628 Gain on FFF put and call rights (b) 13,906 4,109 (8,477 ) (3,458 ) Other expense (income) 5,005 (3,671 ) 1,996 (1,362 ) Operating income 101,812 87,968 306,392 283,360 Depreciation and amortization 25,777 21,797 75,690 63,529 Amortization of purchased intangible assets 13,966 13,572 38,948 39,787 Stock-based compensation (c) 7,668 6,737 19,358 20,650 Acquisition and disposition related expenses 7,287 3,856 16,263 6,789 Remeasurement of tax receivable agreement liabilities (d) (902 ) — (24,584 ) — Equity in net income of unconsolidated affiliates (a) 4,442 553 11,038 4,687 Deferred compensation plan (expense) income (e) (5,476 ) 3,975 (2,484 ) 1,076 Other expense, net 1,315 259 3,929 1,309 Non-GAAP Adjusted EBITDA $ 155,889 $ 138,717 $ 444,550 $ 421,187 Segment Non-GAAP Adjusted EBITDA: Supply Chain Services (f) $ 149,212 $ 134,805 $ 447,081 $ 406,139 Performance Services (f) 34,634 33,235 84,977 100,910 Corporate (27,957 ) (29,323 ) (87,508 ) (85,862 ) Non-GAAP Adjusted EBITDA $ 155,889 $ 138,717 $ 444,550 $ 421,187 (a) Refer to Note 5 - Investments for more information. (b) Refer to Note 6 - Fair Value Measurements for more information. (c) Represents non-cash employee stock-based compensation expense and stock purchase plan expense of $0.1 million during both of the three months ended March 31, 2020 and 2019 and $0.3 million during both of the nine months ended March 31, 2020 and 2019 . (d) The adjustments to TRA liabilities for the three and nine months ended March 31, 2020 is primarily attributable to decreases in the Premier, Inc. effective tax rate related to state tax liabilities. (e) Represents realized and unrealized gains and losses and dividend income on deferred compensation plan assets. (f) Includes intersegment revenue which is eliminated in consolidation. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | (18) SUBSEQUENT EVENTS On May 4, 2020, the Company, through its consolidated subsidiary PHSI, entered into a unit purchase agreement (the "Unit Purchase Agreement"), and acquired 97% of the equity of Health Design Plus, LLC (“HDP”). Pursuant to the terms of the Unit Purchase Agreement, the Company agreed to pay an aggregate amount of $24.7 million , subject to certain purchase price adjustments. The amount paid at closing was $23.2 million and was funded with borrowings under the Credit Facility. After closing, PHSI’s subsidiary, Contigo Health, LLC, was merged into HDP, with HDP as the surviving entity. HDP was then renamed Contigo Health, LLC. The seller, University Hospitals Holdings, Inc., will retain 3% of the equity in Contigo Health, LLC. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2020 | |
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. |
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 2019 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, 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 ("TRA"), 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 impairments, 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. The impact of the coronavirus ("COVID-19") pandemic on our business, results of operations, financial condition and cash flows is dependent on future developments, including the duration of the pandemic and the related length of its impact on the United States and global economies, which are uncertain and cannot be predicted at this time. |
Recently Adopted Accounting Standards and Recently Issued Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , ("ASU 2016-12"), which increases transparency and comparability by requiring the recognition of lease assets and lease liabilities on the balance sheet, as well as requiring the disclosure of key information about leasing arrangements. The Company adopted ASU 2016-02 on July 1, 2019 on a modified retrospective basis under the optional transition method; therefore, comparative periods are presented in accordance with Accounting Standards Codification ("ASC") Topic 840. Additionally, the Company elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward (1) historical lease classification and assessments for expired and existing leases, and (2) historical accounting for initial direct costs for existing leases. The Company elected not to recognize any operating lease right-of-use assets or operating lease liabilities for any lease whose term is 12 months or less and does not include a purchase option that the Company is reasonably certain to exercise. The Company also elected to account for the non-lease components within its leases as part of the single lease component to which they are related. Refer to "Adoption of ASC Topic 842" for additional information on the impact of the adoption of ASC Topic 842. 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's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract , ("ASU 2018-15"), 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 or expense. ASU 2018-15 will be effective for the Company for the fiscal year beginning July 1, 2020. Early adoption is permitted including adoption in interim periods. 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 the Disclosure Requirements for Fair Value Measurement , ("ASU 2018-13"), 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. 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. ASU 2018-13 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 June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , (“ASU 2016-13”), which modifies the measurement of expected credit losses on certain financial instruments and the timing of when such losses are recorded. ASU 2016-13, will be effective for the Company for the fiscal year beginning July 1, 2020. The Company has performed an initial analysis on the impact of the adoption of the new standard, and does not expect the adoption to have a material impact on its consolidated financial statements and disclosures; however, we will continue to evaluate through July 1, 2020. Adoption of ASC Topic 842 As a result of adopting ASC Topic 842, the Company's accounting policies and condensed consolidated financial statements were updated as follows: The Company enters into lease contracts in which the Company is the lessee, substantially all of which are related to office space leased in various buildings used for general corporate purposes. The terms of these non-cancelable operating leases typically require the Company to pay rent and a share of operating expenses and real estate taxes, generally with an inflation-based rent increase included. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term beginning at the commencement date. Operating lease right-of-use assets are adjusted for lease incentives, deferred rent and initial direct costs, if incurred. The Company's leases generally do not include an implicit rate; therefore, the Company determined the present value of future minimum lease payments using an incremental borrowing rate based on information available as of July 1, 2019, the transition date. The related lease expense is recognized on a straight-line basis over the lease term. The following tables summarize the impacts of adopting ASC Topic 842 on the Condensed Consolidated Balance Sheets (in thousands). See Note 16 - Commitments and Contingencies for further information. June 30, 2019 As presented Impact of ASC Topic 842 July 1, 2019 Adjusted Intangible assets, net (a) $ 270,722 $ (8,474 ) $ 262,248 Deferred income tax assets 422,014 302 422,316 Operating lease right-of-use assets — 62,642 62,642 Total assets $ 2,569,567 $ 54,470 $ 2,624,037 Other current liabilities $ 7,113 $ 7,661 $ 14,774 Current liabilities of discontinued operations 11,797 1,200 12,997 Operating lease liabilities — 58,596 58,596 Other long-term liabilities 67,683 (12,088 ) 55,595 Total liabilities $ 908,547 $ 55,369 $ 963,916 Accumulated deficit (b) $ (775,674 ) $ (899 ) $ (776,573 ) Total liabilities and equity $ 2,569,567 $ 54,470 $ 2,624,037 (a) The Company reclassified a favorable lease commitment, which was recorded within intangible assets, net in the Consolidated Balance Sheets as of June 30, 2019 , to operating lease right-of-use assets as part of the adoption of ASC Topic 842. (b) The Company recognized a non-cash impairment charge of $1.2 million ( $0.9 million net of deferred tax impact), which was recorded as an adjustment to the opening balance of equity at July 1, 2019. The impairment charge was related to operating lease right-of-use assets of the specialty pharmacy business, which is classified as a discontinued operation. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Financial Information of Premier LP | The assets and liabilities of Premier LP at March 31, 2020 and June 30, 2019 , including assets and liabilities of discontinued operations, consisted of the following (in thousands): March 31, 2020 June 30, 2019 Assets Current $ 742,525 $ 603,390 Noncurrent 1,874,662 1,536,685 Total assets of Premier LP $ 2,617,187 $ 2,140,075 Liabilities Current $ 753,763 $ 517,616 Noncurrent 290,163 118,032 Total liabilities of Premier LP $ 1,043,926 $ 635,648 Net income attributable to Premier LP, including income and expense that has been classified as discontinued operations, during the three and nine months ended March 31, 2020 and 2019 was as follows (in thousands): Three Months Ended Nine Months Ended March 31, March 31, 2020 2019 2020 2019 Premier LP net income $ 84,185 $ 84,883 $ 290,430 $ 295,928 Premier LP's cash flows, including cash flows attributable to discontinued operations, for the nine months ended March 31, 2020 and 2019 consisted of the following (in thousands): Nine Months Ended March 31, 2020 2019 Net cash provided by (used in): Operating activities $ 252,566 $ 391,508 Investing activities (171,954 ) (132,385 ) Financing activities 24,790 (251,440 ) Net increase in cash and cash equivalents 105,402 7,683 Cash and cash equivalents at beginning of year 131,210 117,741 Cash and cash equivalents at end of period $ 236,612 $ 125,424 |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Impact of Adopting Topic 842 | The following tables summarize the impacts of adopting ASC Topic 842 on the Condensed Consolidated Balance Sheets (in thousands). See Note 16 - Commitments and Contingencies for further information. June 30, 2019 As presented Impact of ASC Topic 842 July 1, 2019 Adjusted Intangible assets, net (a) $ 270,722 $ (8,474 ) $ 262,248 Deferred income tax assets 422,014 302 422,316 Operating lease right-of-use assets — 62,642 62,642 Total assets $ 2,569,567 $ 54,470 $ 2,624,037 Other current liabilities $ 7,113 $ 7,661 $ 14,774 Current liabilities of discontinued operations 11,797 1,200 12,997 Operating lease liabilities — 58,596 58,596 Other long-term liabilities 67,683 (12,088 ) 55,595 Total liabilities $ 908,547 $ 55,369 $ 963,916 Accumulated deficit (b) $ (775,674 ) $ (899 ) $ (776,573 ) Total liabilities and equity $ 2,569,567 $ 54,470 $ 2,624,037 (a) The Company reclassified a favorable lease commitment, which was recorded within intangible assets, net in the Consolidated Balance Sheets as of June 30, 2019 , to operating lease right-of-use assets as part of the adoption of ASC Topic 842. (b) The Company recognized a non-cash impairment charge of $1.2 million ( $0.9 million net of deferred tax impact), which was recorded as an adjustment to the opening balance of equity at July 1, 2019. The impairment charge was related to operating lease right-of-use assets of the specialty pharmacy business, which is classified as a discontinued operation. |
DISCONTINUED OPERATIONS AND E_2
DISCONTINUED OPERATIONS AND EXIT ACTIVITIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Major Classes of Assets and Liabilities and Major Components of Net Income (Loss) From Discontinued Operations | The following table summarizes the major classes of assets and liabilities classified as discontinued operations at March 31, 2020 and June 30, 2019 (in thousands): March 31, 2020 June 30, 2019 Assets Accounts receivable $ — $ 21,183 Inventory — 3,385 Assets of discontinued operations $ — $ 24,568 Liabilities Accounts payable $ — $ 2,255 Accrued expenses — 6,630 Accrued compensation and benefits — 2,373 Other current liabilities — 539 Liabilities of discontinued operations $ — $ 11,797 The following table summarizes the major components of net income (loss) from discontinued operations (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Net revenue $ — $ 121,662 $ — $ 344,873 Cost of revenue — 117,942 — 334,567 Gross profit — 3,720 — 10,306 Selling, general and administrative expense — 5,167 — 14,286 Amortization of purchased intangible assets — 661 — 1,984 Operating expenses — 5,828 — 16,270 Operating loss from discontinued operations — (2,108 ) — (5,964 ) Net gain on disposal of assets 24 — 1,399 — Income (loss) from discontinued operations before income taxes 24 (2,108 ) 1,399 (5,964 ) Income tax expense (benefit) 19 (645 ) 390 (2,102 ) Income (loss) from discontinued operations, net of tax 5 (1,463 ) 1,009 (3,862 ) Net (income) loss from discontinued operations attributable to non-controlling interest in Premier LP (3 ) 747 (480 ) 2,098 Net income (loss) from discontinued operations attributable to stockholders $ 2 $ (716 ) $ 529 $ (1,764 ) |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
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 Three Months Ended Nine Months Ended March 31, March 31, March 31, 2020 June 30, 2019 2020 2019 2020 2019 FFF $ 107,735 $ 96,905 $ 4,340 $ 444 $ 10,830 $ 4,430 Other investments 12,907 2,731 102 109 208 257 Total investments $ 120,642 $ 99,636 $ 4,442 $ 553 $ 11,038 $ 4,687 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | The following table provides a summary of the Company's financial assets and liabilities measured at fair value on a recurring basis at March 31, 2020 (in thousands): Fair Value of Financial Assets and Liabilities Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents $ 188,101 $ 188,101 $ — $ — Deferred compensation plan assets 45,697 45,697 — — Total assets $ 233,798 $ 233,798 $ — $ — Earn-out liabilities $ 34,887 $ — $ — $ 34,887 FFF put right 32,971 — — 32,971 Total liabilities $ 67,858 $ — $ — $ 67,858 The following table provides a summary of the Company's financial assets and liabilities measured at fair value on a recurring basis at June 30, 2019 (in thousands): Fair Value of Financial Assets and Liabilities Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Cash equivalents $ 57,607 $ 57,607 $ — $ — FFF call right 204 — — 204 Deferred compensation plan assets 50,229 50,229 — — Total assets $ 108,040 $ 107,836 $ — $ 204 Earn-out liability $ 6,816 $ — $ — $ 6,816 FFF put right 41,652 — — 41,652 Total liabilities $ 48,468 $ — $ — $ 48,468 |
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 Purchases (Settlements) Gain (Loss) Ending Balance Three Months Ended March 31, 2020 FFF call right $ — $ — $ — $ — Total Level 3 assets $ — $ — $ — $ — Earn-out liability $ 13,420 $ 22,700 $ 1,233 $ 34,887 FFF put right 19,065 — (13,906 ) 32,971 Total Level 3 liabilities $ 32,485 $ 22,700 $ (12,673 ) $ 67,858 Three Months Ended March 31, 2019 FFF call right $ 431 $ — $ (103 ) $ 328 Total Level 3 assets $ 431 $ — $ (103 ) $ 328 Earn-out liabilities $ 4,548 $ — $ (1,695 ) $ 6,243 FFF put right 34,295 — (4,004 ) 38,299 Total Level 3 liabilities $ 38,843 $ — $ (5,699 ) $ 44,542 Nine Months Ended March 31, 2020 FFF call right $ 204 $ — $ (204 ) $ — Total Level 3 assets $ 204 $ — $ (204 ) $ — Earn-out liabilities $ 6,816 $ 26,481 $ (1,590 ) $ 34,887 FFF put right 41,652 — 8,681 32,971 Total Level 3 liabilities $ 48,468 $ 26,481 $ 7,091 $ 67,858 Nine Months Ended March 31, 2019 FFF call right $ 610 $ — $ (282 ) $ 328 Total Level 3 assets $ 610 $ — $ (282 ) $ 328 Earn-out liabilities $ — $ 4,548 $ (1,695 ) $ 6,243 FFF put right 42,041 — 3,742 38,299 Total Level 3 liabilities $ 42,041 $ 4,548 $ 2,047 $ 44,542 |
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 Purchases (Settlements) Gain (Loss) Ending Balance Three Months Ended March 31, 2020 FFF call right $ — $ — $ — $ — Total Level 3 assets $ — $ — $ — $ — Earn-out liability $ 13,420 $ 22,700 $ 1,233 $ 34,887 FFF put right 19,065 — (13,906 ) 32,971 Total Level 3 liabilities $ 32,485 $ 22,700 $ (12,673 ) $ 67,858 Three Months Ended March 31, 2019 FFF call right $ 431 $ — $ (103 ) $ 328 Total Level 3 assets $ 431 $ — $ (103 ) $ 328 Earn-out liabilities $ 4,548 $ — $ (1,695 ) $ 6,243 FFF put right 34,295 — (4,004 ) 38,299 Total Level 3 liabilities $ 38,843 $ — $ (5,699 ) $ 44,542 Nine Months Ended March 31, 2020 FFF call right $ 204 $ — $ (204 ) $ — Total Level 3 assets $ 204 $ — $ (204 ) $ — Earn-out liabilities $ 6,816 $ 26,481 $ (1,590 ) $ 34,887 FFF put right 41,652 — 8,681 32,971 Total Level 3 liabilities $ 48,468 $ 26,481 $ 7,091 $ 67,858 Nine Months Ended March 31, 2019 FFF call right $ 610 $ — $ (282 ) $ 328 Total Level 3 assets $ 610 $ — $ (282 ) $ 328 Earn-out liabilities $ — $ 4,548 $ (1,695 ) $ 6,243 FFF put right 42,041 — 3,742 38,299 Total Level 3 liabilities $ 42,041 $ 4,548 $ 2,047 $ 44,542 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill consisted of the following (in thousands): Supply Chain Services Performance Services Total June 30, 2019 $ 336,973 $ 543,736 $ 880,709 Acquisition of businesses and assets 48,906 — 48,906 March 31, 2020 $ 385,879 $ 543,736 $ 929,615 |
Schedule of Intangible Assets | Intangible assets, net consisted of the following (in thousands): Weighted Average Useful Life as of March 31, 2020 March 31, 2020 June 30, 2019 Member relationships 14.8 years $ 386,100 $ 220,100 Technology 5.6 years 169,217 164,217 Customer relationships 9.0 years 63,230 48,010 Trade names 7.6 years 23,870 16,060 Non-compete agreements 5.3 years 11,315 8,800 Favorable lease commitments n/a — 11,393 Other 6.0 years 260 — Total intangible assets 653,992 468,580 Accumulated amortization (233,888 ) (197,858 ) Total intangible assets, net $ 420,104 $ 270,722 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | Long-term debt consisted of the following (in thousands): March 31, 2020 June 30, 2019 Credit Facility $ 250,000 $ 25,000 Notes payable 9,573 8,611 Total debt 259,573 33,611 Less: current portion (254,745 ) (27,608 ) Total long-term debt $ 4,828 $ 6,003 |
REDEEMABLE LIMITED PARTNERS' _2
REDEEMABLE LIMITED PARTNERS' CAPITAL (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Temporary Equity Disclosure [Abstract] | |
Changes in Redeemable Limited Partners' Capital | The tables below provide a summary of the changes in the redeemable limited partners' capital from June 30, 2019 to March 31, 2020 and June 30, 2018 to March 31, 2019 (in thousands): Receivables From Limited Partners Redeemable Limited Partners' Capital Total Redeemable Limited Partners' Capital Balance at June 30, 2019 $ (1,204 ) $ 2,524,474 $ 2,523,270 Distributions applied to receivables from limited partners 69 — 69 Redemption of limited partners — (1,371 ) (1,371 ) Net income attributable to non-controlling interest in Premier LP — 41,907 41,907 Distributions to limited partners — (13,699 ) (13,699 ) Exchange of Class B common units for Class A common stock by member owners — (50,792 ) (50,792 ) Adjustment of redeemable limited partners' capital to redemption amount — (694,309 ) (694,309 ) Balance at September 30, 2019 $ (1,135 ) $ 1,806,210 $ 1,805,075 Distributions applied to receivables from limited partners 70 — 70 Net income attributable to non-controlling interest in Premier LP — 55,704 55,704 Distributions to limited partners — (12,689 ) (12,689 ) Exchange of Class B common units for Class A common stock by member owners — (223,946 ) (223,946 ) Adjustment of redeemable limited partners' capital to redemption amount — 480,153 480,153 Balance at December 31, 2019 $ (1,065 ) $ 2,105,432 $ 2,104,367 Distributions applied to receivables from limited partners 71 — 71 Net income attributable to non-controlling interest in Premier LP — 35,058 35,058 Distributions to limited partners — (9,314 ) (9,314 ) Exchange of Class B common units for Class A common stock by member owners — (169,194 ) (169,194 ) Adjustment of redeemable limited partners' capital to redemption amount — (302,569 ) (302,569 ) Balance at March 31, 2020 $ (994 ) $ 1,659,413 $ 1,658,419 Receivables From Limited Partners Redeemable Limited Partners' Capital Total Redeemable Limited Partners' Capital Balance at 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 Balance at September 30, 2018 $ (1,768 ) $ 3,640,392 $ 3,638,624 Distributions applied to receivables from limited partners 416 — 416 Redemption of limited partners — (448 ) (448 ) Net income attributable to non-controlling interest in Premier LP — 62,631 62,631 Distributions to limited partners — (14,288 ) (14,288 ) Exchange of Class B common units for Class A common stock by member owners — (441,344 ) (441,344 ) Adjustment of redeemable limited partners' capital to redemption amount — (651,709 ) (651,709 ) Balance at December 31, 2018 $ (1,352 ) $ 2,595,234 $ 2,593,882 Distributions applied to receivables from limited partners 80 — 80 Redemption of limited partners — (1,372 ) (1,372 ) Net income attributable to non-controlling interest in Premier LP — 43,388 43,388 Distributions to limited partners — (13,145 ) (13,145 ) Exchange of Class B common units for Class A common stock by member owners — (147,441 ) (147,441 ) Adjustment of redeemable limited partners' capital to redemption amount — (235,394 ) (235,394 ) Balance at March 31, 2019 $ (1,272 ) $ 2,241,270 $ 2,239,998 |
Schedule of Quarterly Distributions and Quarterly Exchanges | Quarterly distributions made to limited partners during the current fiscal year are as follows (in thousands): Date Distribution (a) August 22, 2019 $ 13,202 November 27, 2019 $ 13,699 February 20, 2020 $ 12,689 (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 $9.3 million quarterly distribution on or before May 29, 2020. The distribution is reflected in limited partners' distribution payable in the accompanying Condensed Consolidated Balance Sheets at March 31, 2020 . Date of Quarterly Exchange Number of Class B Common Units Exchanged Reduction in Redeemable Limited Partners' Capital July 31, 2019 1,310,771 $ 50,792 October 31, 2019 6,873,699 223,946 January 31, 2020 4,866,082 169,194 Total 13,050,552 $ 443,932 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
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 (loss) earnings per share (in thousands, except per share amounts): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Numerator for basic earnings per share: Net income from continuing operations attributable to stockholders (a) $ 340,726 $ 266,524 $ 620,262 $ 280,128 Net income (loss) from discontinued operations attributable to stockholders 2 (716 ) 529 (1,764 ) Net income attributable to stockholders $ 340,728 $ 265,808 $ 620,791 $ 278,364 Numerator for diluted earnings per share: Net income from continuing operations attributable to stockholders (a) $ 340,726 $ 266,524 $ 620,262 $ 280,128 Adjustment of redeemable limited partners' capital to redemption amount (302,569 ) (235,394 ) (516,725 ) (178,910 ) Net income from continuing operations attributable to non-controlling interest in Premier LP 35,055 44,135 132,189 163,230 Net income from continuing operations 73,212 75,265 235,726 264,448 Tax effect on Premier, Inc. net income (b) (7,067 ) (11,762 ) (30,007 ) (38,503 ) Adjusted net income from continuing operations $ 66,145 $ 63,503 $ 205,719 $ 225,945 Net income (loss) from discontinued operations attributable to stockholders $ 2 $ (716 ) $ 529 $ (1,764 ) Net income (loss) from discontinued operations attributable to non-controlling interest in Premier LP 3 (747 ) 480 (2,098 ) Adjusted net income (loss) from discontinued operations $ 5 $ (1,463 ) $ 1,009 $ (3,862 ) Adjusted net income $ 66,150 $ 62,040 $ 206,728 $ 222,083 Denominator for earnings per share: Basic weighted average shares outstanding 69,451 62,020 65,582 58,346 Effect of dilutive securities: (d) Stock options 232 474 357 630 Restricted stock 216 256 239 304 Performance share awards 197 — 66 — Class B shares outstanding 52,374 66,322 57,786 72,969 Diluted weighted average shares and assumed conversions 122,470 129,072 124,030 132,249 Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Basic earnings per share: Basic earnings per share from continuing operations $ 4.91 $ 4.30 $ 9.46 $ 4.80 Basic earnings (loss) per share from discontinued operations — (0.01 ) 0.01 (0.03 ) Basic earnings per share attributable to stockholders $ 4.91 $ 4.29 $ 9.47 $ 4.77 Diluted earnings per share: Diluted earnings per share from continuing operations $ 0.54 $ 0.49 $ 1.66 $ 1.71 Diluted earnings (loss) per share from discontinued operations — (0.01 ) — (0.03 ) Diluted earnings per share attributable to stockholders $ 0.54 $ 0.48 $ 1.66 $ 1.68 (a) Net income from continuing operations attributable to stockholders was calculated as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2019 2018 Net income from continuing operations $ 73,212 $ 75,265 $ 235,726 $ 264,448 Net income from continuing operations attributable to non-controlling interest in Premier LP (35,055 ) (44,135 ) (132,189 ) (163,230 ) Adjustment of redeemable limited partners' capital to redemption amount 302,569 235,394 516,725 178,910 Net income from continuing operations attributable to stockholders $ 340,726 $ 266,524 $ 620,262 $ 280,128 (b) Represents income tax expense related to Premier, Inc. retaining the portion of net income from continuing operations attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings per share. (c) Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for the three and nine months ended March 31, 2020 and 2019 . (d) For three and nine months ended March 31, 2020 , the effect of 0.8 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. Additionally, the effect of less than $0.1 million performance share awards was excluded from diluted weighted average shares outstanding as the awards had not satisfied the applicable performance criteria at the end of the period. For the three and nine months ended March 31, 2019 , 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. 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. |
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, 2019 1,310,771 62,767,860 63,274,182 49.8%/50.2% October 31, 2019 6,873,699 55,581,646 66,522,023 46%/54% January 31, 2020 4,866,082 50,715,564 71,066,141 42%/58% April 30, 2020 (c) 502,466 50,213,098 71,574,119 41%/59% (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 11 - Stockholders' Equity (Deficit) ) and equity incentive plan (see Note 13 - Stock-Based Compensation ). (c) As the quarterly exchange occurred on April 30, 2020, the impact of the exchange is not reflected in the condensed consolidated financial statements for the quarter ended March 31, 2020 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-based Compensation Expense and Resulting Tax Benefits | Stock-based compensation expense and the resulting deferred tax benefits were as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Pre-tax stock-based compensation expense (a) $ 7,568 $ 6,666 $ 19,048 $ 20,354 Deferred tax benefit 1,915 1,647 4,819 5,027 Total stock-based compensation expense, net of tax $ 5,653 $ 5,019 $ 14,229 $ 15,327 (a) Pre-tax stock based compensation expense attributable to discontinued operations of $0.1 million and $0.3 million , respectively, for the three and nine months ended March 31, 2019 is not included in the above table. |
Schedule of Information Related to Restricted Stock | The following table includes information related to restricted stock, performance share awards and stock options for the nine months ended March 31, 2020 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2019 589,550 $ 37.06 1,439,815 $ 36.38 2,798,673 $ 30.22 Granted 350,700 $ 36.73 738,118 $ 36.06 — $ — Vested/exercised (217,356 ) $ 33.55 (493,759 ) $ 31.58 (221,147 ) $ 30.49 Forfeited (32,989 ) $ 38.65 (71,444 ) $ 38.82 (18,121 ) $ 32.90 Outstanding at March 31, 2020 689,905 $ 37.92 1,612,730 $ 37.59 2,559,405 $ 30.18 Stock options outstanding and exercisable at March 31, 2020 2,428,055 $ 30.04 |
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 nine months ended March 31, 2020 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2019 589,550 $ 37.06 1,439,815 $ 36.38 2,798,673 $ 30.22 Granted 350,700 $ 36.73 738,118 $ 36.06 — $ — Vested/exercised (217,356 ) $ 33.55 (493,759 ) $ 31.58 (221,147 ) $ 30.49 Forfeited (32,989 ) $ 38.65 (71,444 ) $ 38.82 (18,121 ) $ 32.90 Outstanding at March 31, 2020 689,905 $ 37.92 1,612,730 $ 37.59 2,559,405 $ 30.18 Stock options outstanding and exercisable at March 31, 2020 2,428,055 $ 30.04 |
Schedule of Information Related to Stock Options | The following table includes information related to restricted stock, performance share awards and stock options for the nine months ended March 31, 2020 : Restricted Stock Performance Share Awards Stock Options Number of Awards Weighted Average Fair Value at Grant Date Number of Awards Weighted Average Fair Value at Grant Date Number of Options Weighted Average Exercise Price Outstanding at June 30, 2019 589,550 $ 37.06 1,439,815 $ 36.38 2,798,673 $ 30.22 Granted 350,700 $ 36.73 738,118 $ 36.06 — $ — Vested/exercised (217,356 ) $ 33.55 (493,759 ) $ 31.58 (221,147 ) $ 30.49 Forfeited (32,989 ) $ 38.65 (71,444 ) $ 38.82 (18,121 ) $ 32.90 Outstanding at March 31, 2020 689,905 $ 37.92 1,612,730 $ 37.59 2,559,405 $ 30.18 Stock options outstanding and exercisable at March 31, 2020 2,428,055 $ 30.04 |
Schedule of Unrecognized Stock-Based Compensation Expense | Unrecognized stock-based compensation expense at March 31, 2020 was as follows (in thousands): Unrecognized Stock-Based Compensation Expense Weighted Average Amortization Period Restricted stock $ 14,745 1.9 years Performance share awards 29,777 1.9 years Stock options 617 0.5 years Total unrecognized stock-based compensation expense $ 45,139 1.9 years |
Schedule of Aggregate Intrinsic Value of Stock Options | The aggregate intrinsic value of stock options at March 31, 2020 was as follows (in thousands): Intrinsic Value of Stock Options Outstanding and exercisable $ 7,762 Expected to vest 12 Total outstanding $ 7,774 Exercised during the nine months ended March 31, 2020 $ 1,541 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under noncancelable operating leases with initial lease terms in excess of one year were as follows (in thousands): March 31, 2020 June 30, 2019 (a) 2020 (b) $ 3,091 $ 12,130 2021 11,806 11,539 2022 11,735 11,468 2023 12,012 11,533 2024 12,145 11,510 Thereafter 22,348 20,645 Total future minimum lease payments 73,137 78,825 Less: imputed interest 8,114 — Total operating lease liabilities (c) $ 65,023 $ — (a) Presented in accordance with ASC Topic 840. (b) As of March 31, 2020 , future minimum lease payments are for the period from April 1, 2020 to June 30, 2020. (c) As of March 31, 2020 , total operating lease liabilities included $9.7 million within other liabilities, current in the Condensed Consolidated Balance Sheets. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 9 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents disaggregated revenue by business segment and underlying source (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Net revenue: Supply Chain Services Net administrative fees $ 174,049 $ 164,534 $ 518,566 $ 492,229 Other services and support 3,396 2,484 8,439 6,520 Services 177,445 167,018 527,005 498,749 Products 61,183 41,568 167,344 129,441 Total Supply Chain Services (a) 238,628 208,586 694,349 628,190 Performance Services (a) 96,195 92,627 262,490 273,214 Net revenue $ 334,823 $ 301,213 $ 956,839 $ 901,404 (a) Includes intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material. Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Depreciation and amortization expense (a) : Supply Chain Services $ 6,896 $ 4,616 $ 16,592 $ 13,905 Performance Services 30,950 27,977 91,862 81,208 Corporate 1,897 2,776 6,184 8,203 Total depreciation and amortization expense $ 39,743 $ 35,369 $ 114,638 $ 103,316 Capital expenditures: Supply Chain Services $ 2,485 $ 469 $ 4,571 $ 1,305 Performance Services 20,840 20,437 57,956 59,267 Corporate 1,233 1,891 6,799 9,334 Total capital expenditures $ 24,558 $ 22,797 $ 69,326 $ 69,906 March 31, 2020 June 30, 2019 Total assets (b) : Supply Chain Services $ 1,611,886 $ 1,111,934 Performance Services 919,874 941,183 Corporate 532,743 516,450 Total assets $ 3,064,503 $ 2,569,567 Eliminations (c) (1,434 ) — Total assets, net $ 3,063,069 $ 2,569,567 (a) Includes amortization of purchased intangible assets. (b) Total assets in Supply Chain Services includes $24.6 million as of June 30, 2019 for discontinued operations related to the specialty pharmacy business. There are no assets for discontinued operations related to the specialty pharmacy business as of March 31, 2020 . (c) Includes eliminations of intersegment transactions which occur during the ordinary course of business. |
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 March 31, Nine Months Ended March 31, 2020 2019 2020 2019 Income before income taxes $ 77,377 $ 87,002 $ 314,062 $ 290,239 Equity in net income of unconsolidated affiliates (a) (4,442 ) (553 ) (11,038 ) (4,687 ) Interest and investment loss, net 9,966 1,081 9,849 2,628 Gain on FFF put and call rights (b) 13,906 4,109 (8,477 ) (3,458 ) Other expense (income) 5,005 (3,671 ) 1,996 (1,362 ) Operating income 101,812 87,968 306,392 283,360 Depreciation and amortization 25,777 21,797 75,690 63,529 Amortization of purchased intangible assets 13,966 13,572 38,948 39,787 Stock-based compensation (c) 7,668 6,737 19,358 20,650 Acquisition and disposition related expenses 7,287 3,856 16,263 6,789 Remeasurement of tax receivable agreement liabilities (d) (902 ) — (24,584 ) — Equity in net income of unconsolidated affiliates (a) 4,442 553 11,038 4,687 Deferred compensation plan (expense) income (e) (5,476 ) 3,975 (2,484 ) 1,076 Other expense, net 1,315 259 3,929 1,309 Non-GAAP Adjusted EBITDA $ 155,889 $ 138,717 $ 444,550 $ 421,187 Segment Non-GAAP Adjusted EBITDA: Supply Chain Services (f) $ 149,212 $ 134,805 $ 447,081 $ 406,139 Performance Services (f) 34,634 33,235 84,977 100,910 Corporate (27,957 ) (29,323 ) (87,508 ) (85,862 ) Non-GAAP Adjusted EBITDA $ 155,889 $ 138,717 $ 444,550 $ 421,187 (a) Refer to Note 5 - Investments for more information. (b) Refer to Note 6 - Fair Value Measurements for more information. (c) Represents non-cash employee stock-based compensation expense and stock purchase plan expense of $0.1 million during both of the three months ended March 31, 2020 and 2019 and $0.3 million during both of the nine months ended March 31, 2020 and 2019 . (d) The adjustments to TRA liabilities for the three and nine months ended March 31, 2020 is primarily attributable to decreases in the Premier, Inc. effective tax rate related to state tax liabilities. (e) Represents realized and unrealized gains and losses and dividend income on deferred compensation plan assets. (f) Includes intersegment revenue which is eliminated in consolidation. |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION - Organization (Narrative) (Details) | Jul. 31, 2019 | Mar. 31, 2020categorysegment | Jun. 30, 2019 |
Segment Reporting Information [Line Items] | |||
Number of business segments | segment | 2 | ||
General partner interest (as a percent) | 58.00% | 49.00% | |
Premier LP | |||
Segment Reporting Information [Line Items] | |||
Limited partners ownership interest (as a percent) | 42.00% | 51.00% | |
Performance services segment | |||
Segment Reporting Information [Line Items] | |||
Number of main categories | category | 3 | ||
Class A Common Stock | Premier LP | |||
Segment Reporting Information [Line Items] | |||
Limited partners ownership interest (as a percent) | 50.20% | ||
Class B Common Stock | Premier LP | |||
Segment Reporting Information [Line Items] | |||
Limited partners ownership interest (as a percent) | 49.80% |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION - Acquisitions and Divestitures (Details) $ in Thousands | Feb. 28, 2020USD ($)installment | Oct. 28, 2019USD ($) | Jul. 24, 2019USD ($) | Jun. 10, 2019USD ($) | Nov. 09, 2018USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Jun. 07, 2019USD ($) |
Business Acquisition [Line Items] | ||||||||
Total of additional amount payable in annual installments | $ 118,320 | $ 0 | ||||||
Earn-out liabilities | 26,481 | 0 | ||||||
Proceeds from sale of pharmaceutical inventory | 3,632 | $ 0 | ||||||
Specialty Pharmacy Business | Discontinued Operation | ||||||||
Business Acquisition [Line Items] | ||||||||
Consideration from sale of business | $ 22,300 | |||||||
Proceeds from sale of pharmaceutical inventory | $ 3,600 | $ 7,600 | ||||||
Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | ||||||||
Business Acquisition [Line Items] | ||||||||
Adjusted purchase price | $ 291,500 | |||||||
Payment made at closing | 166,100 | |||||||
Total of additional amount payable in annual installments | $ 120,000 | |||||||
Number of equal annual installments | installment | 4 | |||||||
Annual installment amount | $ 30,000 | |||||||
Additional amount payable in second quarter of 2021 | 5,400 | |||||||
Earn-out liabilities | $ 30,000 | 22,700 | ||||||
MedPricer | ||||||||
Business Acquisition [Line Items] | ||||||||
Adjusted purchase price | $ 38,500 | |||||||
Earn-out liabilities | $ 1,900 | |||||||
Stanson Health, Inc. | ||||||||
Business Acquisition [Line Items] | ||||||||
Adjusted purchase price | $ 55,400 | |||||||
Earn-out liabilities | $ 10,300 |
ORGANIZATION AND BASIS OF PRE_5
ORGANIZATION AND BASIS OF PRESENTATION - Basis of Presentation (Narrative) (Details) shares in Millions | Oct. 01, 2013 | Mar. 31, 2020shares | Jun. 30, 2019 |
Noncontrolling Interest [Line Items] | |||
General partner interest (as a percent) | 58.00% | 49.00% | |
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) | 13.1 | ||
Exchanged for Class A common stock | Class B common units | |||
Noncontrolling Interest [Line Items] | |||
Shares retired (in shares) | 13.1 | ||
Premier LP | |||
Noncontrolling Interest [Line Items] | |||
Limited partners ownership interest (as a percent) | 42.00% | 51.00% |
ORGANIZATION AND BASIS OF PRE_6
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Assets and Liabilities of Premier LP (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jul. 01, 2019 | Jun. 30, 2019 |
Assets | |||
Current | $ 752,371 | $ 614,044 | |
Total assets | 3,063,069 | $ 2,624,037 | 2,569,567 |
Liabilities | |||
Current | 686,183 | 458,022 | |
Total liabilities | 1,263,188 | $ 963,916 | 908,547 |
Premier LP | |||
Assets | |||
Current | 742,525 | 603,390 | |
Noncurrent | 1,874,662 | 1,536,685 | |
Total assets | 2,617,187 | 2,140,075 | |
Liabilities | |||
Current | 753,763 | 517,616 | |
Noncurrent | 290,163 | 118,032 | |
Total liabilities | $ 1,043,926 | $ 635,648 |
ORGANIZATION AND BASIS OF PRE_7
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Net Income Attributable to Premier LP (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 | |
Variable Interest Entity [Line Items] | ||||||||
Premier LP net income | $ 73,217 | $ 92,189 | $ 71,329 | $ 73,802 | $ 104,811 | $ 81,973 | $ 236,735 | $ 260,586 |
Premier LP | ||||||||
Variable Interest Entity [Line Items] | ||||||||
Premier LP net income | $ 84,185 | $ 84,883 | $ 290,430 | $ 295,928 |
ORGANIZATION AND BASIS OF PRE_8
ORGANIZATION AND BASIS OF PRESENTATION - Schedule of Premier LP's Cash Flows (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Net cash provided by (used in): | ||
Operating activities | $ 257,420 | $ 368,136 |
Investing activities | (171,954) | (132,385) |
Financing activities | 15,213 | (250,625) |
Net increase (decrease) in cash and cash equivalents | 100,679 | (14,874) |
Premier LP | ||
Net cash provided by (used in): | ||
Operating activities | 252,566 | 391,508 |
Investing activities | (171,954) | (132,385) |
Financing activities | 24,790 | (251,440) |
Net increase (decrease) in cash and cash equivalents | 105,402 | 7,683 |
Cash and cash equivalents at beginning of year | 131,210 | 117,741 |
Cash and cash equivalents at end of period | $ 236,612 | $ 125,424 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Impact of Adopting Topic 842 on Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jul. 01, 2019 | Jun. 30, 2019 | Jul. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Intangible assets, net | $ 420,104 | $ 262,248 | $ 270,722 | |
Deferred income tax assets | 436,047 | 422,316 | 422,014 | |
Operating lease right-of-use assets | 59,901 | 62,642 | ||
Total assets | 3,063,069 | 2,624,037 | 2,569,567 | |
Other current liabilities | 30,187 | 14,774 | 7,113 | |
Current liabilities of discontinued operations | 0 | 12,997 | 11,797 | |
Operating lease liabilities | 55,336 | 58,596 | ||
Other long-term liabilities | 71,265 | 55,595 | 67,683 | |
Total liabilities | 1,263,188 | 963,916 | 908,547 | |
Accumulated deficit | 0 | (776,573) | (775,674) | |
Total liabilities and equity | $ 3,063,069 | 2,624,037 | $ 2,569,567 | |
Non-cash impairment charge, net of deferred tax | (899) | $ 121,945 | ||
Topic 842 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Intangible assets, net | (8,474) | |||
Deferred income tax assets | 302 | |||
Operating lease right-of-use assets | 62,642 | |||
Total assets | 54,470 | |||
Other current liabilities | 7,661 | |||
Current liabilities of discontinued operations | 1,200 | |||
Operating lease liabilities | 58,596 | |||
Other long-term liabilities | (12,088) | |||
Total liabilities | 55,369 | |||
Accumulated deficit | (899) | |||
Total liabilities and equity | 54,470 | |||
Non-cash impairment charge | 1,200 | |||
Non-cash impairment charge, net of deferred tax | $ 900 |
BUSINESS ACQUISITIONS - Narrati
BUSINESS ACQUISITIONS - Narrative (Details) $ in Thousands | Feb. 28, 2020USD ($)installment | Oct. 28, 2019USD ($) | Nov. 09, 2018USD ($) | Mar. 31, 2020USD ($) | Feb. 27, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) |
Business Acquisition [Line Items] | |||||||
Total of additional amount payable in annual installments | $ 118,320 | $ 0 | |||||
Earn-out liabilities | 26,481 | $ 0 | |||||
Goodwill | 929,615 | $ 880,709 | |||||
Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | |||||||
Business Acquisition [Line Items] | |||||||
Adjusted purchase price | $ 291,500 | ||||||
Payment made at closing | 166,100 | ||||||
Total of additional amount payable in annual installments | $ 120,000 | ||||||
Number of equal annual installments | installment | 4 | ||||||
Annual installment amount | $ 30,000 | ||||||
Additional amount payable in second quarter of 2021 | 5,400 | ||||||
Earn-out liabilities | 30,000 | 22,700 | |||||
Fair value of consideration paid | 202,600 | ||||||
Intangible assets | 187,700 | ||||||
Goodwill | 22,700 | ||||||
MedPricer | |||||||
Business Acquisition [Line Items] | |||||||
Adjusted purchase price | $ 38,500 | ||||||
Earn-out liabilities | 1,900 | ||||||
Intangible assets | 12,100 | ||||||
Goodwill | 26,200 | ||||||
Earn-out opportunity (up to) | $ 5,000 | ||||||
Stanson Health, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Adjusted purchase price | $ 55,400 | ||||||
Earn-out liabilities | $ 10,300 | ||||||
Intangible assets | 23,600 | ||||||
Goodwill | 37,500 | ||||||
Earn-out opportunity (up to) | $ 15,000 | ||||||
Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | |||||||
Business Acquisition [Line Items] | |||||||
One-time rebates | $ 93,800 | ||||||
Member relationships | Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 166,000 |
DISCONTINUED OPERATIONS AND E_3
DISCONTINUED OPERATIONS AND EXIT ACTIVITIES - Narrative (Details) $ in Millions | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Specialty Pharmacy Business | Discontinued Operation | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Severance and retention expenses | $ 0.9 |
DISCONTINUED OPERATIONS AND E_4
DISCONTINUED OPERATIONS AND EXIT ACTIVITIES - Schedule of Major Classes of Assets and Liabilities (Details) - Specialty Pharmacy Business - Discontinued Operation - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Assets | ||
Accounts receivable | $ 0 | $ 21,183 |
Inventory | 0 | 3,385 |
Assets of discontinued operations | 0 | 24,568 |
Liabilities | ||
Accounts payable | 0 | 2,255 |
Accrued expenses | 0 | 6,630 |
Accrued compensation and benefits | 0 | 2,373 |
Other current liabilities | 0 | 539 |
Liabilities of discontinued operations | $ 0 | $ 11,797 |
DISCONTINUED OPERATIONS AND E_5
DISCONTINUED OPERATIONS AND EXIT ACTIVITIES - Schedule of Major Components of Net Income (Loss) From Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from discontinued operations, net of tax | $ 5 | $ (1,463) | $ 1,009 | $ (3,862) |
Net (income) loss from discontinued operations attributable to noncontrolling interest | (3) | 747 | (480) | 2,098 |
Net income (loss) from discontinued operations attributable to stockholders | 2 | (716) | 529 | (1,764) |
Specialty Pharmacy Business | Discontinued Operation | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Net revenue | 0 | 121,662 | 0 | 344,873 |
Cost of revenue | 0 | 117,942 | 0 | 334,567 |
Gross profit | 0 | 3,720 | 0 | 10,306 |
Selling, general and administrative expense | 0 | 5,167 | 0 | 14,286 |
Amortization of purchased intangible assets | 0 | 661 | 0 | 1,984 |
Operating expenses | 0 | 5,828 | 0 | 16,270 |
Operating loss from discontinued operations | 0 | (2,108) | 0 | (5,964) |
Net gain on disposal of assets | 24 | 0 | 1,399 | 0 |
Income (loss) from discontinued operations before income taxes | 24 | (2,108) | 1,399 | (5,964) |
Income tax expense (benefit) | 19 | (645) | 390 | (2,102) |
Income (loss) from discontinued operations, net of tax | 5 | (1,463) | 1,009 | (3,862) |
Net (income) loss from discontinued operations attributable to noncontrolling interest | (3) | 747 | (480) | 2,098 |
Net income (loss) from discontinued operations attributable to stockholders | $ 2 | $ (716) | $ 529 | $ (1,764) |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||||
Carrying Value | $ 120,642 | $ 120,642 | $ 99,636 | ||
Equity in Net Income | 4,442 | $ 553 | 11,038 | $ 4,687 | |
FFF | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Carrying Value | 107,735 | 107,735 | 96,905 | ||
Equity in Net Income | 4,340 | 444 | 10,830 | 4,430 | |
Other investments | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Carrying Value | 12,907 | 12,907 | $ 2,731 | ||
Equity in Net Income | $ 102 | $ 109 | $ 208 | $ 257 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) | Mar. 31, 2020 | Jun. 30, 2019 |
PSCI | FFF | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 49.00% | 49.00% |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - USD ($) | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 |
Liabilities | |||
Earn-out liabilities | $ 26,481,000 | $ 0 | |
Recurring | |||
Assets | |||
Cash equivalents | 188,101,000 | $ 57,607,000 | |
FFF call right | 0 | 204,000 | |
Deferred compensation plan assets | 45,697,000 | 50,229,000 | |
Total assets | 233,798,000 | 108,040,000 | |
Liabilities | |||
Earn-out liabilities | 34,887,000 | 6,816,000 | |
FFF put right | 32,971,000 | 41,652,000 | |
Total liabilities | 67,858,000 | 48,468,000 | |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | |||
Assets | |||
Cash equivalents | 188,101,000 | 57,607,000 | |
FFF call right | 0 | ||
Deferred compensation plan assets | 45,697,000 | 50,229,000 | |
Total assets | 233,798,000 | 107,836,000 | |
Liabilities | |||
Earn-out liabilities | 0 | 0 | |
FFF put right | 0 | 0 | |
Total liabilities | 0 | 0 | |
Recurring | Significant Other Observable Inputs (Level 2) | |||
Assets | |||
Cash equivalents | 0 | 0 | |
FFF call right | 0 | ||
Deferred compensation plan assets | 0 | 0 | |
Total assets | 0 | 0 | |
Liabilities | |||
Earn-out liabilities | 0 | 0 | |
FFF put right | 0 | 0 | |
Total liabilities | 0 | 0 | |
Recurring | Significant Unobservable Inputs (Level 3) | |||
Assets | |||
Cash equivalents | 0 | 0 | |
FFF call right | 204,000 | ||
Deferred compensation plan assets | 0 | 0 | |
Total assets | 0 | 204,000 | |
Liabilities | |||
Earn-out liabilities | 34,887,000 | 6,816,000 | |
FFF put right | 32,971,000 | 41,652,000 | |
Total liabilities | $ 67,858,000 | $ 48,468,000 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Current portion of deferred compensation plan assets | $ 42,780,000 | $ 45,466,000 |
Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
FFF call right | $ 0 | 204,000 |
FFF call right | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Call right, exercisable term, key event | 180 days | |
Level 1 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
FFF call right | 0 | |
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 | $ 2,900,000 | 4,800,000 |
Level 2 | Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
FFF call right | 0 | |
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 | $ 300,000 | $ 500,000 |
Level 2 | Nonrecurring | Notes payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assumed market interest rate (percent) | 2.10% | 3.40% |
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 | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Beginning Balance | $ 0 | $ 431 | $ 204 | $ 610 |
Purchases (Settlements) | 0 | 0 | 0 | 0 |
Gain (Loss) | 0 | (103) | (204) | (282) |
Ending Balance | 0 | 328 | 0 | 328 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Beginning Balance | 32,485 | 38,843 | 48,468 | 42,041 |
Purchases (Settlements) | 22,700 | 0 | 26,481 | 4,548 |
Gain (Loss) | (12,673) | (5,699) | 7,091 | 2,047 |
Ending Balance | 67,858 | 44,542 | 67,858 | 44,542 |
Earn-out liabilities | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Beginning Balance | 13,420 | 4,548 | 6,816 | 0 |
Purchases (Settlements) | 22,700 | 0 | 26,481 | 4,548 |
Gain (Loss) | 1,233 | (1,695) | (1,590) | (1,695) |
Ending Balance | 34,887 | 6,243 | 34,887 | 6,243 |
FFF put right | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Beginning Balance | 19,065 | 34,295 | 41,652 | 42,041 |
Purchases (Settlements) | 0 | 0 | 0 | 0 |
Gain (Loss) | (13,906) | (4,004) | 8,681 | 3,742 |
Ending Balance | 32,971 | 38,299 | 32,971 | 38,299 |
FFF call right | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Beginning Balance | 0 | 431 | 204 | 610 |
Purchases (Settlements) | 0 | 0 | 0 | 0 |
Gain (Loss) | 0 | (103) | (204) | (282) |
Ending Balance | $ 0 | $ 328 | $ 0 | $ 328 |
CONTRACT BALANCES - Contract As
CONTRACT BALANCES - Contract Assets, Deferred Revenue and Capitalized Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue recognized from performance obligations satisfied in previous periods | $ (0.1) | $ 3.6 | $ (1.4) | $ 9.6 |
Revenue recognized associated with revised forecasts underlying contracts with variable consideration components | (3.8) | 3.8 | (6.9) | 5.4 |
Revenue recognized associated with unforecasted cash receipts | $ 3.7 | $ (0.2) | 5.5 | $ 4.2 |
Performance Services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue recognized | $ 27.9 |
CONTRACT BALANCES - Remaining P
CONTRACT BALANCES - Remaining Performance Obligation (Details) $ in Millions | Mar. 31, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Transaction price allocated to remaining performance obligation | $ 572.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation to be satisfied (percent) | 41.00% |
Remaining performance obligation satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation to be satisfied (percent) | 28.00% |
Remaining performance obligation satisfaction period | 12 months |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | $ 880,709 |
Acquisition of businesses and assets | 48,906 |
Goodwill ending balance | 929,615 |
Supply Chain Services | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 336,973 |
Acquisition of businesses and assets | 48,906 |
Goodwill ending balance | 385,879 |
Performance Services | |
Goodwill [Roll Forward] | |
Goodwill beginning balance | 543,736 |
Acquisition of businesses and assets | 0 |
Goodwill ending balance | $ 543,736 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jul. 01, 2019 | Jun. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||||
Total intangible assets | $ 653,992 | $ 653,992 | $ 468,580 | |||
Accumulated amortization | (233,888) | (233,888) | (197,858) | |||
Total intangible assets, net | 420,104 | 420,104 | $ 262,248 | 270,722 | ||
Intangible asset amortization | 13,966 | $ 13,572 | $ 38,948 | $ 39,787 | ||
Member relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life as of March 31, 2020 | 14 years 9 months 18 days | |||||
Total intangible assets | 386,100 | $ 386,100 | 220,100 | |||
Technology | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life as of March 31, 2020 | 5 years 7 months 6 days | |||||
Total intangible assets | 169,217 | $ 169,217 | 164,217 | |||
Customer relationships | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life as of March 31, 2020 | 9 years | |||||
Total intangible assets | 63,230 | $ 63,230 | 48,010 | |||
Trade names | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life as of March 31, 2020 | 7 years 7 months 6 days | |||||
Total intangible assets | 23,870 | $ 23,870 | 16,060 | |||
Non-compete agreements | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life as of March 31, 2020 | 5 years 3 months 18 days | |||||
Total intangible assets | 11,315 | $ 11,315 | 8,800 | |||
Favorable lease commitments | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Total intangible assets | 0 | $ 0 | 11,393 | |||
Other | ||||||
Finite-Lived Intangible Assets [Line Items] | ||||||
Weighted Average Useful Life as of March 31, 2020 | 6 years | |||||
Total intangible assets | $ 260 | $ 260 | $ 0 |
DEBT - Schedule of Long-Term De
DEBT - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Jun. 30, 2019 |
Debt Instrument [Line Items] | ||
Total debt | $ 259,573 | $ 33,611 |
Less: current portion | (254,745) | (27,608) |
Total long-term debt | 4,828 | 6,003 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt | 25,000 | |
Notes payable | ||
Debt Instrument [Line Items] | ||
Total debt | $ 9,573 | $ 8,611 |
DEBT - Credit Facility (Narrati
DEBT - Credit Facility (Narrative) (Details) | Apr. 27, 2020USD ($) | Nov. 09, 2018USD ($)extension | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Jun. 30, 2019USD ($) |
Line of Credit Facility [Line Items] | |||||
Payments on credit facility | $ 150,000,000 | $ 0 | |||
Proceeds from credit facility | 375,000,000 | $ 50,000,000 | |||
Outstanding borrowings | $ 259,573,000 | $ 33,611,000 | |||
Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Number of available extensions | extension | 2 | ||||
Duration of each available extension | 1 year | ||||
Maximum borrowing capacity | $ 1,000,000,000 | ||||
Additional borrowing capacity | 350,000,000 | ||||
Interest rate (percent) | 1.96% | ||||
Indebtedness or guarantee threshold | $ 75,000,000 | ||||
Payments on credit facility | $ 150,000,000 | ||||
Proceeds from credit facility | 375,000,000 | ||||
Outstanding borrowings | 250,000,000 | ||||
Available borrowing capacity | $ 750,000,000 | ||||
Credit Facility | LIBOR | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.00% | ||||
Credit Facility | LIBOR | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.50% | ||||
Credit Facility | Prime rate | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.00% | ||||
Credit Facility | Prime rate | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 0.50% | ||||
Letters of credit | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 50,000,000 | ||||
Swing-line loans | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 | ||||
Subsequent event | Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Payments on credit facility | $ 150,000,000 |
DEBT - Notes Payable (Narrative
DEBT - Notes Payable (Narrative) (Details) - USD ($) $ in Millions | 9 Months Ended | |
Mar. 31, 2020 | Jun. 30, 2019 | |
Debt Instrument [Line Items] | ||
Notes payable | $ 9.6 | $ 8.6 |
Notes payable included in current portion of long-term debt | $ 4.8 | $ 2.6 |
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 | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2020USD ($)limited_partnershares | Mar. 31, 2019USD ($) | Jun. 30, 2019 |
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 | $ 443,900 | |||||||||
Exchange of Class B units for Class A common stock by member owners (in shares) | shares | 13.1 | |||||||||
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 | |||||||||
Limited partner | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Adjustment to fair value for the redemption amount | $ 302,569 | $ (480,153) | $ 694,309 | $ 235,394 | $ 651,709 | $ (708,193) | ||||
Number of limited partners withdrawing from partnership | limited_partner | 3 | |||||||||
Redeemable limited partners' capital | Limited partner | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Adjustment to fair value for the redemption amount | $ 302,569 | $ (480,153) | $ 694,309 | $ 235,394 | $ 651,709 | $ (708,193) | $ 516,700 | $ 178,900 | ||
Premier LP | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Limited partners ownership (as a percent) | 42.00% | 51.00% |
REDEEMABLE LIMITED PARTNERS' _4
REDEEMABLE LIMITED PARTNERS' CAPITAL - Changes in Redeemable Limited Partners' Capital (Details) - USD ($) $ in Thousands | Feb. 20, 2020 | Nov. 27, 2019 | Aug. 22, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2020 | Mar. 31, 2019 |
Increase (Decrease) in Temporary Equity | |||||||||||
Redeemable limited partners' capital, beginning balance | $ 2,523,270 | $ 2,523,270 | |||||||||
Exchange of Class B common units for Class A common stock by member owners | $ (169,194) | $ (223,946) | (50,792) | $ (147,440) | $ (441,344) | $ (30,536) | |||||
Redeemable limited partners' capital, ending balance | 1,658,419 | 1,658,419 | |||||||||
Limited Partner | |||||||||||
Increase (Decrease) in Temporary Equity | |||||||||||
Redeemable limited partners' capital, beginning balance | 2,104,367 | 1,805,075 | 2,523,270 | 2,593,882 | 3,638,624 | 2,920,410 | 2,523,270 | $ 2,920,410 | |||
Distributions applied to receivables from limited partners | 71 | 70 | 69 | 80 | 416 | 437 | |||||
Redemption of limited partners | (1,371) | (1,372) | (448) | ||||||||
Net income attributable to non-controlling interest in Premier LP | 35,058 | 55,704 | 41,907 | 43,388 | 62,631 | 55,113 | |||||
Distributions to limited partners | $ (12,689) | $ (13,699) | $ (13,202) | (9,314) | (12,689) | (13,699) | (13,145) | (14,288) | (14,993) | ||
Exchange of Class B common units for Class A common stock by member owners | (169,194) | (223,946) | (50,792) | (147,441) | (441,344) | (30,536) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | (302,569) | 480,153 | (694,309) | (235,394) | (651,709) | 708,193 | |||||
Redeemable limited partners' capital, ending balance | 1,658,419 | 2,104,367 | 1,805,075 | 2,239,998 | 2,593,882 | 3,638,624 | 1,658,419 | 2,239,998 | |||
Limited Partner | Receivables From Limited Partners | |||||||||||
Increase (Decrease) in Temporary Equity | |||||||||||
Redeemable limited partners' capital, beginning balance | (1,065) | (1,135) | (1,204) | (1,352) | (1,768) | (2,205) | (1,204) | (2,205) | |||
Distributions applied to receivables from limited partners | 71 | 70 | 69 | 80 | 416 | 437 | |||||
Redeemable limited partners' capital, ending balance | (994) | (1,065) | (1,135) | (1,272) | (1,352) | (1,768) | (994) | (1,272) | |||
Limited Partner | Redeemable Limited Partners' Capital | |||||||||||
Increase (Decrease) in Temporary Equity | |||||||||||
Redeemable limited partners' capital, beginning balance | 2,105,432 | 1,806,210 | 2,524,474 | 2,595,234 | 3,640,392 | 2,922,615 | 2,524,474 | 2,922,615 | |||
Redemption of limited partners | (1,371) | (1,372) | (448) | ||||||||
Net income attributable to non-controlling interest in Premier LP | 35,058 | 55,704 | 41,907 | 43,388 | 62,631 | 55,113 | |||||
Distributions to limited partners | (9,314) | (12,689) | (13,699) | (13,145) | (14,288) | (14,993) | |||||
Exchange of Class B common units for Class A common stock by member owners | (169,194) | (223,946) | (50,792) | (147,441) | (441,344) | (30,536) | |||||
Adjustment of redeemable limited partners' capital to redemption amount | (302,569) | 480,153 | (694,309) | (235,394) | (651,709) | 708,193 | (516,700) | (178,900) | |||
Redeemable limited partners' capital, ending balance | $ 1,659,413 | $ 2,105,432 | $ 1,806,210 | $ 2,241,270 | $ 2,595,234 | $ 3,640,392 | $ 1,659,413 | $ 2,241,270 |
REDEEMABLE LIMITED PARTNERS' _5
REDEEMABLE LIMITED PARTNERS' CAPITAL - Schedule of Quarterly Distributions to Limited Partners (Details) - Limited Partner - USD ($) $ in Thousands | May 29, 2020 | Feb. 20, 2020 | Nov. 27, 2019 | Aug. 22, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Limited Partners' Capital Account [Line Items] | ||||||||||
Distribution | $ 12,689 | $ 13,699 | $ 13,202 | $ 9,314 | $ 12,689 | $ 13,699 | $ 13,145 | $ 14,288 | $ 14,993 | |
Expected | ||||||||||
Limited Partners' Capital Account [Line Items] | ||||||||||
Distributions paid | $ 9,300 |
REDEEMABLE LIMITED PARTNERS' _6
REDEEMABLE LIMITED PARTNERS' CAPITAL - Schedule Of Common Stock Units Quarterly Exchanges (Details) - Class B Common Stock - USD ($) $ in Thousands | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Mar. 31, 2020 |
Limited Partners' Capital Account [Line Items] | ||||
Class B common units and associated Class B common shares exchanged (in shares) | 4,866,082 | 6,873,699 | 1,310,771 | 13,050,552 |
Reduction in Redeemable Limited Partners' Capital | $ 169,194 | $ 223,946 | $ 50,792 | $ 443,932 |
STOCKHOLDERS' EQUITY (DEFICIT)
STOCKHOLDERS' EQUITY (DEFICIT) (Details) $ / shares in Units, $ in Millions | 9 Months Ended | 11 Months Ended | ||
Mar. 31, 2020$ / sharesshares | Mar. 31, 2020USD ($)$ / sharesshares | Jun. 30, 2019$ / sharesshares | May 07, 2019USD ($) | |
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | shares | 71,070,617 | 71,070,617 | 61,938,157 | |
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) | $ | $ 300 | |||
Stock repurchased during period, shares | shares | 4,600,000 | |||
Treasury stock acquired, average cost per share (in dollars per share) | $ / shares | $ 32.28 | |||
Stock repurchased during period, value | $ | $ 150 | |||
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 | 50,715,564 | 50,715,564 | 64,548,044 | |
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 PER SHARE - Reconcilia
EARNINGS 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 | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator for basic earnings per share: | ||||
Net income from continuing operations attributable to stockholders | $ 340,726 | $ 266,524 | $ 620,262 | $ 280,128 |
Net income (loss) from discontinued operations attributable to stockholders | 2 | (716) | 529 | (1,764) |
Net income attributable to stockholders | 340,728 | 265,808 | 620,791 | 278,364 |
Numerator for diluted earnings per share: | ||||
Net income from continuing operations attributable to stockholders | 340,726 | 266,524 | 620,262 | 280,128 |
Adjustment of redeemable limited partners' capital to redemption amount | (302,569) | (235,394) | (516,725) | (178,910) |
Net income from continuing operations attributable to non-controlling interest in Premier LP | 35,055 | 44,135 | 132,189 | 163,230 |
Net income from continuing operations | 73,212 | 75,265 | 235,726 | 264,448 |
Tax effect on Premier, Inc. net income | (7,067) | (11,762) | (30,007) | (38,503) |
Adjusted net income from continuing operations | 66,145 | 63,503 | 205,719 | 225,945 |
Net income (loss) from discontinued operations attributable to stockholders | 2 | (716) | 529 | (1,764) |
Net income (loss) from discontinued operations attributable to non-controlling interest in Premier LP | 3 | (747) | 480 | (2,098) |
Adjusted net income (loss) from discontinued operations | 5 | (1,463) | 1,009 | (3,862) |
Adjusted net income | $ 66,150 | $ 62,040 | $ 206,728 | $ 222,083 |
Denominator for basic earnings (loss) per share: | ||||
Basic weighted average shares (in shares) | 69,451 | 62,020 | 65,582 | 58,346 |
Effect of dilutive securities: | ||||
Diluted weighted average shares and assumed conversions (in shares) | 122,470 | 129,072 | 124,030 | 132,249 |
Basic (loss) earnings per share: | ||||
Basic earnings per share from continuing operations (in usd per share) | $ 4.91 | $ 4.30 | $ 9.46 | $ 4.80 |
Basic earnings (loss) per share from discontinued operations (in usd per share) | 0 | (0.01) | 0.01 | (0.03) |
Basic (loss) earnings per share attributable to stockholders (in usd per share) | 4.91 | 4.29 | 9.47 | 4.77 |
Diluted (loss) earnings per share: | ||||
Diluted earnings per share from continuing operations (in usd per share) | 0.54 | 0.49 | 1.66 | 1.71 |
Diluted earnings (loss) per share from discontinued operations (in usd per share) | 0 | (0.01) | 0 | (0.03) |
Diluted (loss) earnings per share attributable to stockholders (in usd per share) | $ 0.54 | $ 0.48 | $ 1.66 | $ 1.68 |
Class B Common Stock | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 52,374 | 66,322 | 57,786 | 72,969 |
Stock options | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 232 | 474 | 357 | 630 |
Restricted Stock | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 216 | 256 | 239 | 304 |
Performance share awards | ||||
Effect of dilutive securities: | ||||
Effect of dilutive securities (in shares) | 197 | 0 | 66 | 0 |
Diluted (loss) earnings per share: | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 100 | 700 | 700 | |
Stock options and restricted stock units | ||||
Diluted (loss) earnings per share: | ||||
Antidilutive securities excluded from computation of earnings per share (in shares) | 800 | 600 | 800 | 600 |
EARNINGS PER SHARE - Calculatio
EARNINGS PER SHARE - Calculation of Net Income From Continuing Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Abstract] | ||||
Net income from continuing operations | $ 73,212 | $ 75,265 | $ 235,726 | $ 264,448 |
Net income from continuing operations attributable to noncontrolling interest | (35,055) | (44,135) | (132,189) | (163,230) |
Adjustment of redeemable limited partners' capital to redemption amount | 302,569 | 235,394 | 516,725 | 178,910 |
Net income (loss) from continuing operations attributable to stockholders | $ 340,726 | $ 266,524 | $ 620,262 | $ 280,128 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Exchange Agreement (Details) - shares | Apr. 30, 2020 | Jan. 31, 2020 | Oct. 31, 2019 | Jul. 31, 2019 | Mar. 31, 2020 |
Class B Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Class B common units and associated Class B common shares exchanged (in shares) | 4,866,082 | 6,873,699 | 1,310,771 | 13,050,552 | |
Shares outstanding after exchange (in shares) | 50,715,564 | 55,581,646 | 62,767,860 | ||
Percentage of combined voting power (percent) | 42.00% | 46.00% | 49.80% | ||
Class A Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Shares outstanding after exchange (in shares) | 71,066,141 | 66,522,023 | 63,274,182 | ||
Percentage of combined voting power (percent) | 58.00% | 54.00% | 50.20% | ||
Subsequent event | Class B Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Class B common units and associated Class B common shares exchanged (in shares) | 502,466 | ||||
Shares outstanding after exchange (in shares) | 50,213,098 | ||||
Percentage of combined voting power (percent) | 41.00% | ||||
Subsequent event | Class A Common Shares | |||||
Conversion of Stock [Line Items] | |||||
Shares outstanding after exchange (in shares) | 71,574,119 | ||||
Percentage of combined voting power (percent) | 58.00% |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected effective income tax rate | 25.00% | 25.00% | 25.00% | 25.00% |
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) | 14.8 | 14.8 | ||
Number of shares available for grant (shares) | 5.9 | 5.9 | ||
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 Stock-based Compensation Expense and Resulting Tax Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 7,568 | $ 6,666 | $ 19,048 | $ 20,354 |
Deferred tax benefit | 1,915 | 1,647 | 4,819 | 5,027 |
Total stock-based compensation expense, net of tax | $ 5,653 | 5,019 | $ 14,229 | 15,327 |
Discontinued operations | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 100 | $ 300 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Information Related to Restricted Stock, Performance Share Awards and Stock Options (Details) - 2013 Equity Incentive Plan | 9 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Restricted Stock | |
Number of Awards | |
Outstanding, beginning balance (in shares) | shares | 589,550 |
Granted (in shares) | shares | 350,700 |
Vested/exercised (in shares) | shares | (217,356) |
Forfeited (in shares) | shares | (32,989) |
Outstanding, ending balance (in shares) | shares | 689,905 |
Weighted Average Fair Value at Grant Date | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 37.06 |
Granted (in dollars per share) | $ / shares | 36.73 |
Vested/exercised (in dollars per share) | $ / shares | 33.55 |
Forfeited (in dollars per share) | $ / shares | 38.65 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 37.92 |
Performance Share Awards | |
Number of Awards | |
Outstanding, beginning balance (in shares) | shares | 1,439,815 |
Granted (in shares) | shares | 738,118 |
Vested/exercised (in shares) | shares | (493,759) |
Forfeited (in shares) | shares | (71,444) |
Outstanding, ending balance (in shares) | shares | 1,612,730 |
Weighted Average Fair Value at Grant Date | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 36.38 |
Granted (in dollars per share) | $ / shares | 36.06 |
Vested/exercised (in dollars per share) | $ / shares | 31.58 |
Forfeited (in dollars per share) | $ / shares | 38.82 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 37.59 |
Stock options | |
Number of Options | |
Outstanding, beginning balance (in shares) | shares | 2,798,673 |
Granted (in shares) | shares | 0 |
Vested/exercised (in shares) | shares | (221,147) |
Forfeited (in shares) | shares | (18,121) |
Outstanding, ending balance (in shares) | shares | 2,559,405 |
Stock options outstanding and exercisable (in shares) | shares | 2,428,055 |
Weighted Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 30.22 |
Granted (in dollars per share) | $ / shares | 0 |
Vested/exercised (in dollars per share) | $ / shares | 30.49 |
Forfeited (in dollars per share) | $ / shares | 32.90 |
Outstanding, ending balance (in dollars per share) | $ / shares | 30.18 |
Stock options outstanding and exercisable (in dollars per share) | $ / shares | $ 30.04 |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Unrecognized Stock-Based Compensation Expense (Details) - 2013 Equity Incentive Plan $ in Thousands | 9 Months Ended |
Mar. 31, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 45,139 |
Weighted Average Amortization Period | 1 year 10 months 24 days |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 14,745 |
Weighted Average Amortization Period | 1 year 10 months 24 days |
Performance share awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 29,777 |
Weighted Average Amortization Period | 1 year 10 months 24 days |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 617 |
Weighted Average Amortization Period | 6 months |
STOCK-BASED COMPENSATION - Sc_4
STOCK-BASED COMPENSATION - Schedule of Aggregate Intrinsic Value of Stock Options (Details) - 2013 Equity Incentive Plan $ in Thousands | Mar. 31, 2020USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Outstanding and exercisable | $ 7,762 |
Expected to vest | 12 |
Total outstanding | 7,774 |
Exercised during the nine months ended March 31, 2020 | $ 1,541 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Mar. 27, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 |
Income Tax Disclosure [Abstract] | |||||||
Discrete tax expense | $ 38,600 | ||||||
NOL that can be carried back | $ 21,100 | ||||||
Income tax refund | 7,300 | ||||||
Income tax benefit | $ 2,900 | ||||||
Tax expense | $ 4,165 | $ 11,737 | $ 78,336 | $ 25,791 | |||
Effective tax rate (percent) | 5.00% | 13.00% | 25.00% | 9.00% | |||
Effective tax rate when deferred tax measurement is excluded (percent) | 13.00% | ||||||
Increase in net deferred tax assets | $ 5,700 | ||||||
Current deferred tax assets at Premier, Inc. | $ 422,900 | 422,900 | $ 417,200 | ||||
Increase in deferred tax asset related to departures and quarterly exchanges | 64,000 | ||||||
Deferred tax assets generated by member exchanges | 38,600 | ||||||
Decrease attributable to deferred tax impact of tax-deductible goodwill | $ 19,700 | ||||||
Tax savings payable to limited partners (as a percent) | 85.00% | 85.00% | |||||
Decrease in tax receivable liability | $ 49,300 | ||||||
TRA liabilities | $ 294,900 | 294,900 | $ 344,100 | ||||
Decrease attributable to member departures | 86,300 | ||||||
TRA remeasurement attributable to change in state income tax law | 24,600 | ||||||
Payments to limited partners of Premier LP related to tax receivable agreements | 17,425 | $ 17,975 | |||||
Tax receivable agreement liability, increase quarterly member owner exchange | $ 79,000 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 44 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | |||||
Equity in net income of unconsolidated affiliates | $ 4,442 | $ 553 | $ 11,038 | $ 4,687 | |
FFF | |||||
Related Party Transaction [Line Items] | |||||
Ownership share of net income of FFF (as a percent) | 49.00% | ||||
Equity in net income of unconsolidated affiliates | 4,300 | 500 | 10,800 | 4,400 | |
Administrative Fee Revenue | FFF | |||||
Related Party Transaction [Line Items] | |||||
Equity in net income of unconsolidated affiliates | $ 1,200 | $ 1,900 | $ 5,800 | $ 6,100 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expense | $ 2,700 | $ 8,200 | |
Weighted average remaining lease term | 6 years | 6 years | |
Weighted average discount rate (percent) | 3.90% | 3.90% | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
2020 | $ 3,091 | $ 3,091 | |
2021 | 11,806 | 11,806 | |
2022 | 11,735 | 11,735 | |
2023 | 12,012 | 12,012 | |
2024 | 12,145 | 12,145 | |
Thereafter | 22,348 | 22,348 | |
Total future minimum lease payments | 73,137 | 73,137 | |
Less: imputed interest | 8,114 | 8,114 | |
Total operating lease liabilities | 65,023 | 65,023 | |
Operating lease liability included in other liabilities, current | $ 9,700 | $ 9,700 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2020 | $ 12,130 | ||
2021 | 11,539 | ||
2022 | 11,468 | ||
2023 | 11,533 | ||
2024 | 11,510 | ||
Thereafter | 20,645 | ||
Total future minimum lease payments | $ 78,825 |
SEGMENTS - Narrative (Details)
SEGMENTS - Narrative (Details) | 9 Months Ended |
Mar. 31, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable business segments | 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 |
SEGMENTS - Schedule of Segment
SEGMENTS - Schedule of Segment Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Jul. 01, 2019 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||||
Net revenue | $ 334,823,000 | $ 301,213,000 | $ 956,839,000 | $ 901,404,000 | ||
Depreciation and amortization expense | 39,743,000 | 35,369,000 | 114,638,000 | 103,316,000 | ||
Total capital expenditures | 24,558,000 | 22,797,000 | 69,326,000 | 69,906,000 | ||
Total assets | 3,063,069,000 | 3,063,069,000 | $ 2,624,037,000 | $ 2,569,567,000 | ||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and amortization expense | 1,897,000 | 2,776,000 | 6,184,000 | 8,203,000 | ||
Total capital expenditures | 1,233,000 | 1,891,000 | 6,799,000 | 9,334,000 | ||
Total assets | 532,743,000 | 532,743,000 | 516,450,000 | |||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Total assets | (1,434,000) | (1,434,000) | 0 | |||
Supply Chain Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 238,628,000 | 208,586,000 | 694,349,000 | 628,190,000 | ||
Supply Chain Services | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and amortization expense | 6,896,000 | 4,616,000 | 16,592,000 | 13,905,000 | ||
Total capital expenditures | 2,485,000 | 469,000 | 4,571,000 | 1,305,000 | ||
Total assets | 1,611,886,000 | 1,611,886,000 | 1,111,934,000 | |||
Performance Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 96,195,000 | 92,627,000 | 262,490,000 | 273,214,000 | ||
Performance Services | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Depreciation and amortization expense | 30,950,000 | 27,977,000 | 91,862,000 | 81,208,000 | ||
Total capital expenditures | 20,840,000 | 20,437,000 | 57,956,000 | 59,267,000 | ||
Total assets | 919,874,000 | 919,874,000 | 941,183,000 | |||
Operating Segments and Corporate Non-Segment | ||||||
Segment Reporting Information [Line Items] | ||||||
Total assets | 3,064,503,000 | 3,064,503,000 | 2,569,567,000 | |||
Net administrative fees | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 174,049,000 | 164,534,000 | 518,566,000 | 492,229,000 | ||
Net administrative fees | Supply Chain Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 174,049,000 | 164,534,000 | 518,566,000 | 492,229,000 | ||
Other services and support | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 99,591,000 | 95,111,000 | 270,929,000 | 279,734,000 | ||
Other services and support | Supply Chain Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 3,396,000 | 2,484,000 | 8,439,000 | 6,520,000 | ||
Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 273,640,000 | 259,645,000 | 789,495,000 | 771,963,000 | ||
Services | Supply Chain Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 177,445,000 | 167,018,000 | 527,005,000 | 498,749,000 | ||
Products | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 61,183,000 | 41,568,000 | 167,344,000 | 129,441,000 | ||
Products | Supply Chain Services | ||||||
Segment Reporting Information [Line Items] | ||||||
Net revenue | 61,183,000 | $ 41,568,000 | 167,344,000 | $ 129,441,000 | ||
Specialty Pharmacy Business | Discontinued Operation | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets of discontinued operations | 0 | 0 | 24,568,000 | |||
Specialty Pharmacy Business | Discontinued Operation | Supply Chain Services | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Assets of discontinued operations | $ 0 | $ 0 | $ 24,600,000 |
SEGMENTS - Reconciliation of In
SEGMENTS - Reconciliation of Income Before Income Taxes to Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||||
Income before income taxes | $ 77,377 | $ 87,002 | $ 314,062 | $ 290,239 |
Equity in net income of unconsolidated affiliates | (4,442) | (553) | (11,038) | (4,687) |
Interest and investment loss, net | 9,966 | 1,081 | 9,849 | 2,628 |
Gain on FFF put and call rights | 13,906 | 4,109 | (8,477) | (3,458) |
Other expense (income) | 5,005 | (3,671) | 1,996 | (1,362) |
Operating income | 101,812 | 87,968 | 306,392 | 283,360 |
Depreciation and amortization | 25,777 | 21,797 | 75,690 | 63,529 |
Amortization of purchased intangible assets | 13,966 | 13,572 | 38,948 | 39,787 |
Stock-based compensation | 7,668 | 6,737 | 19,358 | 20,650 |
Acquisition and disposition related expenses | 7,287 | 3,856 | 16,263 | 6,789 |
Remeasurement of tax receivable agreement liabilities | (902) | 0 | (24,584) | 0 |
Equity in net income of unconsolidated affiliates | 4,442 | 553 | 11,038 | 4,687 |
Deferred compensation plan income | (5,476) | 3,975 | (2,484) | 1,076 |
Other expense, net | 1,315 | 259 | 3,929 | 1,309 |
Non-GAAP Adjusted EBITDA | 155,889 | 138,717 | 444,550 | 421,187 |
Stock purchase plan expense | 100 | 100 | 300 | 300 |
Operating Segments | Supply Chain Services | ||||
Segment Reporting Information [Line Items] | ||||
Non-GAAP Adjusted EBITDA | 149,212 | 134,805 | 447,081 | 406,139 |
Operating Segments | Performance Services | ||||
Segment Reporting Information [Line Items] | ||||
Non-GAAP Adjusted EBITDA | 34,634 | 33,235 | 84,977 | 100,910 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Non-GAAP Adjusted EBITDA | $ (27,957) | $ (29,323) | $ (87,508) | $ (85,862) |
SUBSEQUENT EVENTS - Narrative (
SUBSEQUENT EVENTS - Narrative (Details) - Health Design Plus, LLC (“HDP”) - Subsequent event $ in Millions | May 04, 2020USD ($) |
Subsequent Event [Line Items] | |
Interest acquired (percent) | 97.00% |
Aggregate amount to be paid | $ 24.7 |
Cash payment to acquire interest | $ 23.2 |
University Hospital Holdings, Inc. | Contigo Health, LLC. | |
Subsequent Event [Line Items] | |
Interest to be retained by seller (percent) | 3.00% |
Uncategorized Items - pinc-fy20
Label | Element | Value |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ (863,149,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (1,305,119,000) |
Treasury Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (150,058,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ (87,220,000) |
Shares, Outstanding | us-gaap_SharesOutstanding | (4,769,000) |
Shares, Outstanding | us-gaap_SharesOutstanding | (2,419,000) |
Additional Paid-in Capital [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 0 |
Retained Earnings [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (1,155,636,000) |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | (776,573,000) |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 121,945,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (899,000) |
Common Class B [Member] | Common Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | 0 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 0 |
Shares, Outstanding | us-gaap_SharesOutstanding | 80,336,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 64,548,000 |
Common Class A [Member] | Common Stock [Member] | ||
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 575,000 |
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Adjusted Balance | us-gaap_StockholdersEquityIncludingPortionAttributableToNoncontrollingInterestAdjustedBalance1 | $ 644,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 52,761,000 |
Shares, Outstanding | us-gaap_SharesOutstanding | 61,938,000 |