Cover
Cover - shares | 3 Months Ended | |
Sep. 30, 2023 | Nov. 02, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
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, $0.01 Par Value | |
Trading Symbol | PINC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 119,672,451 | |
Entity Central Index Key | 0001577916 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Assets | ||
Cash and cash equivalents | $ 453,261 | $ 89,793 |
Accounts receivable (net of $1,970 and $2,878 allowance for credit losses, respectively) | 102,122 | 115,295 |
Contract assets (net of $1,079 and $885 allowance for credit losses, respectively) | 311,557 | 299,219 |
Inventory | 69,868 | 76,932 |
Prepaid expenses and other current assets | 65,566 | 60,387 |
Total current assets | 1,002,374 | 641,626 |
Property and equipment (net of $682,882 and $662,554 accumulated depreciation, respectively) | 210,519 | 212,308 |
Intangible assets (net of $278,372 and $265,684 accumulated amortization, respectively) | 417,342 | 430,030 |
Goodwill | 1,012,355 | 1,012,355 |
Deferred income tax assets | 797,064 | 653,629 |
Deferred compensation plan assets | 44,029 | 50,346 |
Investments in unconsolidated affiliates | 230,080 | 231,826 |
Operating lease right-of-use assets | 26,871 | 29,252 |
Other assets | 108,938 | 110,115 |
Total assets | 3,849,572 | 3,371,487 |
Liabilities and stockholders' equity | ||
Accounts payable | 48,545 | 54,375 |
Accrued expenses | 46,193 | 47,113 |
Revenue share obligations | 265,832 | 262,288 |
Accrued compensation and benefits | 45,807 | 60,591 |
Deferred revenue | 20,730 | 24,311 |
Line of credit and current portion of long-term debt | 1,199 | 216,546 |
Current portion of liability related to the sale of future revenues | 32,827 | 0 |
Other current liabilities | 209,263 | 50,574 |
Total current liabilities | 770,526 | 815,463 |
Liability related to the sale of future revenues, less current portion | 541,834 | 0 |
Deferred compensation plan obligations | 44,029 | 50,346 |
Operating lease liabilities, less current portion | 18,916 | 21,864 |
Other liabilities | 45,245 | 47,202 |
Total liabilities | 1,496,867 | 1,037,132 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Treasury stock, at cost; 6,429,375 shares at both September 30, 2023 and June 30, 2023 | (250,129) | (250,129) |
Additional paid-in capital | 2,177,324 | 2,178,134 |
Retained earnings | 424,260 | 405,102 |
Accumulated other comprehensive loss | (11) | (8) |
Total stockholders' equity | 2,352,705 | 2,334,355 |
Total liabilities and stockholders' equity | 3,849,572 | 3,371,487 |
Related Party | ||
Liabilities and stockholders' equity | ||
Current portion of notes payable to former limited partners | 100,130 | 99,665 |
Long-term debt, less current portion and Notes payable to former limited partners, less current portion | 76,317 | 101,523 |
Nonrelated Party | ||
Liabilities and stockholders' equity | ||
Long-term debt, less current portion and Notes payable to former limited partners, less current portion | 0 | 734 |
Class A Common Stock | ||
Stockholders' equity: | ||
Class A common stock, $0.01 par value, 500,000,000 shares authorized; 126,101,826 shares issued and 119,672,451 shares outstanding at September 30, 2023 and 125,587,858 shares issued and 119,158,483 shares outstanding at June 30, 2023 | $ 1,261 | $ 1,256 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Allowance for doubtful accounts | $ 1,970 | $ 2,878 |
Allowance for credit losses | 1,079 | 885 |
Accumulated depreciation | 682,882 | 662,554 |
Accumulated amortization | $ 278,372 | $ 265,684 |
Treasury stock, shares (in shares) | 6,429,375 | 6,429,375 |
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) | 126,101,826 | 125,587,858 |
Common stock outstanding (in shares) | 119,672,451 | 119,158,483 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Net revenue: | ||
Net revenue | $ 318,752 | $ 313,873 |
Cost of revenue: | ||
Cost of revenue | 108,170 | 111,888 |
Gross profit | 210,582 | 201,985 |
Operating expenses: | ||
Selling, general and administrative | 138,060 | 132,050 |
Research and development | 863 | 975 |
Amortization of purchased intangible assets | 12,688 | 10,452 |
Operating expenses | 151,611 | 143,477 |
Operating income | 58,971 | 58,508 |
Equity in net (loss) income of unconsolidated affiliates | (1,726) | 8,243 |
Interest income (expense), net | 195 | (2,859) |
Other expense, net | (1,092) | (2,164) |
Other (expense) income, net | (2,623) | 3,220 |
Income before income taxes | 56,348 | 61,728 |
Income tax expense | 13,938 | 18,769 |
Net income | 42,410 | 42,959 |
Net loss (income) attributable to non-controlling interest | 2,351 | (243) |
Net income attributable to stockholders | 44,761 | 42,716 |
Comprehensive income: | ||
Net income | 42,410 | 42,959 |
Comprehensive loss (income) attributable to non-controlling interest | 2,351 | (243) |
Foreign currency translation loss | (3) | (10) |
Comprehensive income attributable to stockholders | $ 44,758 | $ 42,706 |
Weighted average shares outstanding: | ||
Basic (in shares) | 119,344 | 118,351 |
Diluted (in shares) | 120,133 | 120,033 |
Earnings per share attributable to stockholders: | ||
Basic (in dollars per share) | $ 0.38 | $ 0.36 |
Diluted (in dollars per share) | $ 0.37 | $ 0.36 |
Services and software licenses | ||
Net revenue: | ||
Net revenue | $ 268,167 | $ 255,012 |
Cost of revenue: | ||
Cost of revenue | 64,132 | 54,014 |
Net administrative fees | ||
Net revenue: | ||
Net revenue | 149,027 | 150,006 |
Software licenses, other services and support | ||
Net revenue: | ||
Net revenue | 119,140 | 105,006 |
Products | ||
Net revenue: | ||
Net revenue | 50,585 | 58,861 |
Cost of revenue: | ||
Cost of revenue | $ 44,038 | $ 57,874 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Class A Common Stock | Common Stock Class A Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Jun. 30, 2022 | 118,052,000 | ||||||
Beginning balance at Jun. 30, 2022 | $ 2,248,850 | $ 1,245 | $ (250,129) | $ 2,166,047 | $ 331,690 | $ (3) | |
Treasury stock, beginning balance (in shares) at Jun. 30, 2022 | 6,429,000 | ||||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of Class A common stock under equity incentive plan (in shares) | 694,000 | ||||||
Issuance of Class A common stock under equity incentive plan | 644 | $ 7 | 637 | ||||
Stock-based compensation expense | 7,136 | 7,136 | |||||
Repurchase of vested restricted units for employee tax-withholding | (13,089) | (13,089) | |||||
Net income | 42,959 | 42,959 | |||||
Net income attributable to non-controlling interest | 0 | 243 | (243) | ||||
Change in ownership of consolidated entity | 26 | 26 | |||||
Dividends | (25,097) | (25,097) | |||||
Foreign currency translation adjustment | (10) | (10) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 118,746,000 | ||||||
Ending balance at Sep. 30, 2022 | 2,261,419 | $ 1,252 | $ (250,129) | 2,161,000 | 349,309 | (13) | |
Treasury stock, ending balance (in shares) at Sep. 30, 2022 | 6,429,000 | ||||||
Beginning balance (in shares) at Jun. 30, 2023 | 119,158,483 | 119,158,000 | |||||
Beginning balance at Jun. 30, 2023 | $ 2,334,355 | $ 1,256 | $ (250,129) | 2,178,134 | 405,102 | (8) | |
Treasury stock, beginning balance (in shares) at Jun. 30, 2023 | 6,429,375 | 6,429,000 | |||||
Increase (Decrease) in Stockholders' Equity | |||||||
Issuance of Class A common stock under equity incentive plan (in shares) | 514,000 | ||||||
Issuance of Class A common stock under equity incentive plan | $ 5 | $ 5 | 0 | ||||
Stock-based compensation expense | 6,692 | 6,692 | |||||
Repurchase of vested restricted units for employee tax-withholding | (5,178) | (5,178) | |||||
Net income | 42,410 | 42,410 | |||||
Net income attributable to non-controlling interest | 0 | (2,351) | 2,351 | ||||
Change in ownership of consolidated entity | 27 | 27 | |||||
Dividends | (25,603) | (25,603) | |||||
Foreign currency translation adjustment | (3) | (3) | |||||
Ending balance (in shares) at Sep. 30, 2023 | 119,672,451 | 119,672,000 | |||||
Ending balance at Sep. 30, 2023 | $ 2,352,705 | $ 1,261 | $ (250,129) | $ 2,177,324 | $ 424,260 | $ (11) | |
Treasury stock, ending balance (in shares) at Sep. 30, 2023 | 6,429,375 | 6,429,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends declared (in dollars per share) | $ 0.21 | $ 0.21 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Operating activities | ||
Net income | $ 42,410 | $ 42,959 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 33,016 | 33,891 |
Equity in net loss (income) of unconsolidated affiliates | 1,726 | (8,243) |
Deferred income taxes | (143,435) | 2,156 |
Stock-based compensation | 6,692 | 7,136 |
Other, net | 3,459 | 10,035 |
Changes in operating assets and liabilities, net of the effects of acquisitions: | ||
Accounts receivable | 13,173 | 8,903 |
Contract assets | (16,838) | (11,856) |
Inventory | 7,064 | (4,229) |
Prepaid expenses and other assets | 9,216 | 17,821 |
Accounts payable | (3,099) | 15,172 |
Revenue share obligations | 3,544 | 2,435 |
Accrued expenses, deferred revenue and other liabilities | 124,948 | (41,429) |
Net cash provided by operating activities | 81,876 | 74,751 |
Investing activities | ||
Purchases of property and equipment | (21,270) | (18,930) |
Other | 0 | (1,300) |
Net cash used in investing activities | (21,270) | (20,230) |
Financing activities | ||
Payments on notes payable | (25,823) | (26,387) |
Proceeds from credit facility | 0 | 100,000 |
Payments on credit facility | (215,000) | 0 |
Proceeds from sale of future revenues | 578,983 | 0 |
Payments on liability related to the sale of future revenues | (4,322) | 0 |
Cash dividends paid | (25,827) | (25,218) |
Other, net | (5,146) | (12,419) |
Net cash provided by financing activities | 302,865 | 35,976 |
Effect of exchange rate changes on cash flows | (3) | (10) |
Net increase in cash and cash equivalents | 363,468 | 90,487 |
Cash and cash equivalents at beginning of period | 89,793 | 86,143 |
Cash and cash equivalents at end of period | $ 453,261 | $ 176,630 |
ORGANIZATION AND BASIS OF PRESE
ORGANIZATION AND BASIS OF PRESENTATION | 3 Months Ended |
Sep. 30, 2023 | |
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 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 Healthcare Solutions, Inc., a Delaware corporation (“PHSI”). The Company conducts substantially all of its business operations through PHSI and its other consolidated subsidiaries. The Company, together with its subsidiaries and affiliates, is a leading technology-driven healthcare improvement company that unites hospitals, health systems, physicians, employers, product suppliers, service providers, and other healthcare providers and organizations to improve and innovate in the clinical, financial and operational areas of their businesses to meet the demands of a rapidly evolving healthcare industry and continues to expand its capabilities to more fully address and coordinate care improvement and standardization in the employer, payer and life sciences markets. Additionally, the Company also provides some of the various products and services noted above to non-healthcare businesses, including through its direct sourcing activities as well as continued access to its group purchasing organization (“GPO”) programs for non-healthcare members whose contracts were sold to OMNIA Partners, LLC (“OMNIA”) (see Note 9 - Liability Related to the Sale of Future Revenues). The Company’s business model and solutions are designed to provide its members and other customers access to scale efficiencies, spread the cost of their development, provide actionable intelligence derived from anonymized data in the Company’s enterprise data warehouse, mitigate the risk of innovation and disseminate best practices to help the Company’s members and other customers succeed in their transformation to higher quality and more cost-effective healthcare. The Company, together with its subsidiaries and affiliates, delivers its integrated platform of solutions through two business segments: Supply Chain Services and Performance Services. See Note 15 - Segments for further information related to the Company’s reportable business segments. The Company has no significant foreign operations or revenues. The Supply Chain Services segment includes one of the largest national healthcare GPO programs in the United States and provides supply chain co-management, purchased services and direct sourcing activities. The Performance Services segment consists of three sub-brands: PINC AI TM , the Company’s technology and services platform with offerings that help optimize performance in three main areas – clinical intelligence, margin improvement and value-based care – using advanced analytics to identify improvement opportunities, consulting and managed services for clinical and operational design, and workflow solutions to hardwire sustainable change in the provider, payer and life sciences markets; Contigo Health ® , the Company’s direct-to-employer business which provides third-party administrator services and management of health-benefit programs that enable healthcare providers that are also payers (e.g., payviders) and employers to contract directly with healthcare providers as well as partner with healthcare providers to provide employers access to a specialized care network through Contigo Health’s centers of excellence program and cost containment and wrap network; and Remitra ® , the Company’s digital invoicing and payables automation business which provides financial support services to healthcare suppliers and providers. Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC and in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and include the assets, liabilities, revenues and expenses of all majority-owned subsidiaries over which the Company exercised control and when applicable, entities for which the Company had a controlling financial interest or was the primary beneficiary. All intercompany transactions have been eliminated upon consolidation. Accordingly, certain information and disclosures normally included in annual financial statements have been condensed or omitted. The accompanying condensed consolidated financial statements reflect all adjustments that, in the opinion of management, are necessary for a fair presentation of results of operations and financial condition for the interim periods shown, consisting of normal recurring adjustments, unless otherwise disclosed. Certain amounts in prior periods have been reclassified to conform to the current period presentation. 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 2023 Annual Report. Supplementary Cash Flows Information The following table presents supplementary cash flows information for the three months ended September 30, 2023 and 2022 (in thousands): Three Months Ended September 30, 2023 2022 Supplemental schedule of non-cash investing and financing activities: Accrued dividend equivalents $ 472 $ 156 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, but not limited to, estimates for net administrative fees revenue, software licenses, other services and support revenue, contract assets, deferred revenue, contract costs, allowances for credit losses, reserves for net realizable value of inventory, obsolete inventory, useful lives of property and equipment, stock-based compensation, 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 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. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2023 | |
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 2023 Annual Report, except as described below. Liability Related to the Sale of Future Revenues |
BUSINESS ACQUISITIONS
BUSINESS ACQUISITIONS | 3 Months Ended |
Sep. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
BUSINESS ACQUISITIONS | (3) BUSINESS ACQUISITIONS Acquisition of TRPN Direct Pay, Inc. and Devon Health, Inc. Assets On October 13, 2022, the Company, through its consolidated subsidiary Contigo Health, LLC (“Contigo Health”), acquired certain assets (the “TRPN Transferred Assets”) of TRPN Direct Pay, Inc. and Devon Health, Inc. (collectively, “TRPN”), including contracts with more than 900,000 providers (collectively, the “Assumed Contracts”), and agreed to assume certain liabilities and obligations of TRPN with regard to the Assumed Contracts (referred to as the “TRPN acquisition”). The TRPN Transferred Assets relate to businesses of TRPN focused on improving access to quality healthcare and reducing the cost of medical claims through pre-negotiated discounts with network providers, including acute care hospitals, surgery centers, physicians and other continuum of care providers in the United States. Contigo Health also agreed to license proprietary cost containment technology of TRPN. The purchase price paid by the Company to complete the TRPN acquisition consisted of cash of $177.5 million, funded with borrowings under the Company’s Credit Facility (as defined in Note 8 - Debt and Notes Payable) and cash on hand, of which $17.8 million was placed in escrow to satisfy indemnification obligations of TRPN to Contigo Health and its affiliates and other parties related thereto under the purchase agreement governing the TRPN acquisition. The Company has accounted for the TRPN 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. The total fair value assigned to intangible assets acquired was $116.6 million, consisting primarily of the provider network. The TRPN acquisition resulted in the initial recognition of $60.9 million of goodwill attributable to the anticipated profitability of TRPN, based on the purchase price paid in the acquisition compared to the fair value of the net assets acquired. The TRPN acquisition was considered an asset acquisition for income tax purposes. Accordingly, the Company expects tax goodwill to be deductible for tax purposes. TRPN has been integrated within Premier under Contigo Health and is reported as part of the Performance Services Segment. In fiscal year 2023, the Company recorded a pre-tax goodwill impairment charge of $54.4 million related to the Contigo Health reporting unit including goodwill recognized as a result of the TRPN acquisition. 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 historical consolidated financial statements. |
INVESTMENTS
INVESTMENTS | 3 Months Ended |
Sep. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
INVESTMENTS | (4) INVESTMENTS Investments in Unconsolidated Affiliates The Company’s investments in unconsolidated affiliates consisted of the following (in thousands): Equity in Net Income Three Months Ended Carrying Value September 30, September 30, 2023 June 30, 2023 2023 2022 FFF $ 136,080 $ 136,080 $ — $ 7,187 Exela 31,487 32,905 (1,419) 138 Qventus 16,000 16,000 — — Prestige 15,623 15,503 119 180 Other investments 30,890 31,338 (426) 738 Total investments $ 230,080 $ 231,826 $ (1,726) $ 8,243 The Company, through its indirect, wholly owned subsidiary Premier Supply Chain Improvement, Inc. (“PSCI”), held a 49% interest in FFF Enterprises, Inc. (“FFF”) through its ownership of stock of FFF at September 30, 2023 and June 30, 2023. On March 3, 2023, the Company and the majority shareholder of FFF amended the FFF shareholders’ agreement and as of the date of the amendment, the Company accounts for its investment in FFF at cost less impairments, if any, plus or minus any observable changes in fair value (refer to the 2023 Annual Report for additional information and details regarding the March 2023 amendment). The Company accounts for its investment in FFF as part of the Supply Chain Services segment. The Company, through its consolidated subsidiary, ExPre Holdings, LLC (“ExPre”), held an approximate 6% interest in Exela Holdings, Inc. (“Exela”) through its ownership of Exela Class A common stock at September 30, 2023. At September 30, 2023, the Company owned approximately 15% of the membership interest of ExPre, with the remainder of the membership interests held by 11 member health systems or their affiliates. The Company, through its consolidated subsidiary, PRAM Holdings, LLC (“PRAM”), held an approximate 20% interest in Prestige Ameritech Ltd. (“Prestige”) through its ownership of Prestige limited partnership units at September 30, 2023. At September 30, 2023, the Company owned approximately 26% of the membership interest of PRAM, with the remainder of the membership interests held by 16 member health systems or their affiliates. The Company accounts for its investments in Exela and Prestige using the equity method of accounting and includes each investment as part of the Supply Chain Services segment. The Company, through PHSI, purchased an approximate 7% interest in Qventus, Inc. (“Qventus”) through its ownership of Qventus Series C preferred stock. The Company accounts for its investment in Qventus at cost less impairments, if any, plus or minus any observable changes in fair value. The Company includes Qventus as part of the Performance Services segment. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | (5) FAIR VALUE MEASUREMENTS Recurring Fair Value Measurements The following table represents the Company’s financial assets and liabilities, which are measured at fair value on a recurring basis (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 September 30, 2023 Cash equivalents $ 232,342 $ 232,342 $ — $ — Deferred compensation plan assets 49,911 49,911 — — Total assets 282,253 282,253 — — Earn-out liabilities 29,861 — — 29,861 Total liabilities $ 29,861 $ — $ — $ 29,861 June 30, 2023 Cash equivalents $ 77 $ 77 $ — $ — Deferred compensation plan assets 55,566 55,566 — — Total assets 55,643 55,643 — — Earn-out liabilities 26,603 — — 26,603 Total liabilities $ 26,603 $ — $ — $ 26,603 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 ($5.9 million and $5.2 million at September 30, 2023 and June 30, 2023, respectively) was included in prepaid expenses and other current assets in the accompanying Condensed Consolidated Balance Sheets. Financial Instruments Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) Earn-out liabilities Earn-out liabilities have been established in connection with certain acquisitions, including the acquisition of substantially all of the assets and certain liabilities of Acurity, Inc. and Nexera, Inc. (the “Acurity and Nexera asset acquisition”) in February 2020 as well as other immaterial acquisitions. The earn-out liability related to the Acurity and Nexera asset acquisition was based upon the Company’s achievement of a range of member renewals on terms to be agreed to by the Company and Greater New York Hospital Association based on prevailing market conditions in December 2023. Earn-out liabilities are classified as Level 3 of the fair value hierarchy. Acurity and Nexera Earn-out (a) The earn-out liability arising from expected earn-out payments related to the Acurity and Nexera asset acquisition was measured on the acquisition date using a probability-weighted expected payment model and is remeasured periodically due to changes in management’s estimates of the number of transferred member renewals and market conditions. In determining the fair value of the contingent liabilities, management reviews the current results of the acquired business, along with projected results for the remaining earn-out period, to calculate the expected earn-out payment to be made based on the contractual terms set out in the acquisition agreement. The Acurity and Nexera earn-out liability utilized a credit spread of 1.4% at September 30, 2023 and 1.6% at June 30, 2023. As of September 30, 2023 and June 30, 2023, the undiscounted range of outcomes is between $0 and $30.0 million. A significant decrease in the probability could result in a significant decrease in the value of the earn-out liability. The fair value of the Acurity and Nexera earn-out liability at September 30, 2023 and June 30, 2023 was $23.5 million and $23.1 million, respectively. Input assumptions As of September 30, 2023 As of June 30, 2023 Probability of transferred member renewal percentage < 50% 5.0 % 5.0 % Probability of transferred member renewal percentage between 50% and 65% 10.0 % 10.0 % Probability of transferred member renewal percentage between 65% and 80% 25.0 % 25.0 % Probability of transferred member renewal percentage > 80% 60.0 % 60.0 % Credit spread 1.4 % 1.6 % _________________________________ (a) The Acurity and Nexera earn-out liability was initially valued as of February 28, 2020. A reconciliation of the Company’s earn-out liabilities is as follows (in thousands): Beginning Balance Purchases (Settlements) (Gain)/Loss (a) Ending Balance Three Months Ended September 30, 2023 Earn-out liabilities $ 26,603 $ — $ 3,258 $ 29,861 Total Level 3 liabilities $ 26,603 $ — $ 3,258 $ 29,861 Three Months Ended September 30, 2022 Earn-out liabilities $ 22,789 $ — $ (428) $ 22,361 Total Level 3 liabilities $ 22,789 $ — $ (428) $ 22,361 _________________________________ (a) Gains on level 3 liability balances will decrease the liability ending balance, and losses on level 3 liability balances will increase the liability ending balance. Non-Recurring Fair Value Measurements As a result of the August 2020 Restructuring, the Company recorded non-interest bearing notes payable to former limited partners during the three months ended September 30, 2020. Although these notes are non-interest bearing, they include a Level 2 input associated with an implied fixed annual interest rate of 1.8% (see Note 8 - Debt and Notes Payable). As of September 30, 2023 and June 30, 2023, the notes payable to former limited partners were recorded net of discounts of $3.3 million and $4.2 million, respectively. During the three months ended September 30, 2023, no non-recurring fair value measurements were required relating to the measurement of goodwill and intangible assets for impairment. Financial Instruments For Which Fair Value Only is Disclosed The fair values of non-interest bearing notes payable, classified as Level 2, were equal to the carrying value at both September 30, 2023 and June 30, 2023 based on an assumed market interest rate of 1.6%. Other Financial Instruments The fair values of cash, accounts receivable, accounts payable, accrued liabilities and the Credit Facility (as defined in Note 8 - Debt and Notes Payable) approximated carrying value due to the short-term nature of these financial instruments. |
CONTRACT BALANCES
CONTRACT BALANCES | 3 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | (6) CONTRACT BALANCES Deferred Revenue Revenue recognized during the three months ended September 30, 2023 that was included in the opening balance of deferred revenue at June 30, 2023 was $13.8 million, which is a result of satisfying certain performance obligations. Performance Obligations A performance obligation is a contractual obligation 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 agreement to transfer individual goods or services is not separately identifiable from other contractual obligations 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, SaaS subscription fees, maintenance and support fees, and professional fees for consulting services). Refer to the Company’s significant accounting policies in the 2023 Annual Report for discussion of revenue recognition on contracts with customers. Net revenue of $5.3 million was recognized during the three months ended September 30, 2023 from certain performance obligations that were satisfied or partially satisfied in prior periods. The net revenue recognized was driven by an increase of $3.8 million associated with revised forecasts from underlying contracts that include variable consideration components and additional fluctuations due to input method contracts which occur in the normal course of business and an increase of $1.5 million in net administrative fees revenue related to under-forecasted cash receipts received in the current period. Net revenue of $3.0 million was recognized during the three months ended September 30, 2022 from certain performance obligations that were satisfied or partially satisfied in prior periods. The net revenue recognized was driven by an increase of $4.7 million in net administrative fees revenue related to under-forecasted cash receipts received in the current period partially offset by a reduction of $1.7 million 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 September 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was $705.8 million. The Company expects to recognize approximately 41% of the remaining performance obligations over the next twelve months and an additional 24% over the following twelve months, with the remainder recognized thereafter. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | (7) GOODWILL AND INTANGIBLE ASSETS Goodwill At both September 30, 2023 and June 30, 2023, the Company had goodwill balances recorded at Supply Chain Services and Performance Services of $386.2 million and $626.1 million, respectively. At both September 30, 2023 and June 30, 2023, the Company had accumulated impairment losses to goodwill at Supply Chain Services and Performance Services of $2.3 million and $54.4 million, respectively. Fiscal 2023 Goodwill Impairment During the year ended June 30, 2023, the Company recorded pre-tax goodwill impairment charges of $54.4 million and $2.3 million related to the Contigo Health and Direct Sourcing reporting units, respectively. No events or circumstances occurred during the three months ended September 30, 2023 that would suggest there are additional indicators of impairment, and accordingly, the Company determined that goodwill impairment testing was not needed at September 30, 2023. Intangible Assets, Net Intangible assets, net consisted of the following (in thousands): September 30, 2023 June 30, 2023 Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Member relationships 14.7 years $ 386,100 $ (143,291) $ 242,809 $ 386,100 $ (136,751) $ 249,349 Provider network 15.0 years 106,500 (6,804) 99,696 106,500 (5,029) 101,471 Technology 7.1 years 99,317 (69,203) 30,114 99,317 (67,581) 31,736 Customer relationships 9.4 years 57,930 (33,070) 24,860 57,930 (31,846) 26,084 Trade names 6.7 years 18,920 (12,506) 6,414 18,920 (11,983) 6,937 Non-compete agreements 5.2 years 17,715 (10,439) 7,276 17,715 (9,738) 7,977 Other (a) 9.3 years 9,232 (3,059) 6,173 9,232 (2,756) 6,476 Total $ 695,714 $ (278,372) $ 417,342 $ 695,714 $ (265,684) $ 430,030 _________________________________ (a) Includes a $1.0 million indefinite-lived asset. The net carrying value of intangible assets by segment was as follows (in thousands): September 30, 2023 June 30, 2023 Supply Chain Services $ 261,779 $ 269,710 Performance Services (a) 155,563 160,320 Total intangible assets, net $ 417,342 $ 430,030 _________________________________ (a) Includes a $1.0 million indefinite-lived asset. The estimated amortization expense for each of the next five fiscal years and thereafter is as follows (in thousands): 2024 (a) $ 37,074 2025 48,136 2026 46,892 2027 44,240 2028 39,197 Thereafter 200,803 Total amortization expense $ 416,342 (a) As of September 30, 2023, estimated amortization expense is for the period from October 1, 2023 to June 30, 2024. |
DEBT AND NOTES PAYABLE
DEBT AND NOTES PAYABLE | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
DEBT AND NOTES PAYABLE | (8) DEBT AND NOTES PAYABLE Long-term debt and notes payable consisted of the following (in thousands): September 30, 2023 June 30, 2023 Credit Facility $ — $ 215,000 Notes payable to former limited partners, net of discount 176,447 201,188 Other notes payable 1,199 2,280 Total debt and notes payable 177,646 418,468 Less: current portion (101,329) (316,211) Total long-term debt and notes payable $ 76,317 $ 102,257 Credit Facility PHSI, along with its consolidated subsidiaries, Premier LP and PSCI (“Co-Borrowers”), and certain domestic subsidiaries of the Co-Borrowers, as guarantors, entered into a senior unsecured Amended and Restated Credit Agreement, dated as of December 12, 2022 (the “Credit Facility”). The Credit Facility has a maturity date of December 12, 2027, subject to up to two one-year extensions, and 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 increase. The Credit Facility contains an unconditional and irrevocable guaranty of all obligations of Co-Borrowers under the Credit Facility by the current and future guarantors. Premier is not a guarantor under the Credit Facility. At September 30, 2023, the Company had no outstanding borrowings under the Credit Facility with $995.0 million of available borrowing capacity after reductions for outstanding letters of credit. At June 30, 2023, the Company had $215.0 million in outstanding borrowings under the Credit Facility with $785.0 million of available borrowing capacity after reductions for outstanding borrowings and outstanding letters of credit. For the three months ended September 30, 2023, the Company had no new borrowings and repaid $215.0 million of outstanding borrowings under the Credit Facility. At September 30, 2023, the annual commitment fee, based on the actual daily unused amount of commitments under the Credit Facility, was 0.125%. At June 30, 2023, the weighted average interest rate on outstanding borrowings under the Credit Facility was 6.470%. The Company was in compliance with all covenants at September 30, 2023 and June 30, 2023. Notes Payable Notes Payable to Former Limited Partners At September 30, 2023, the Company had $176.4 million of notes payable to former LPs, net of discounts on notes payable of $3.3 million, of which $100.1 million was recorded to current portion of notes payable to former limited partners in the accompanying Condensed Consolidated Balance Sheets. At June 30, 2023, the Company had $201.2 million of notes payable to former LPs, net of discounts on notes payable of $4.2 million, of which $99.7 million was recorded to current portion of notes payable to former limited partners in the accompanying Condensed Consolidated Balance Sheets. The notes payable to former LPs were issued in connection with the early termination of the TRA as part of the August 2020 Restructuring. Although the notes payable to former LPs are non-interest bearing, pursuant to GAAP requirements, they were recorded net of imputed interest at a fixed annual rate of 1.8%. Other At September 30, 2023 and June 30, 2023, the Company had $1.2 million and $2.3 million in other notes payable, respectively, of which $1.2 million and $1.5 million, respectively, were included in current portion of long-term debt in the accompanying Condensed Consolidated Balance Sheets. Other notes payable do not bear interest and generally have stated maturities of three |
LIABILITY RELATED TO THE SALE O
LIABILITY RELATED TO THE SALE OF FUTURE REVENUES | 3 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Liability Related To The Sale Of Future Revenues | (9) LIABILITY RELATED TO THE SALE OF FUTURE REVENUES Sale of Non-Healthcare GPO Member Contracts On July 25, 2023 (the “Closing Date”), the Company sold the equity interest in its wholly-owned subsidiary, Non-Healthcare Holdings, LLC, pursuant to an equity purchase agreement with OMNIA (“Equity Purchase Agreement”) for a purchase price estimated to be between $750.0 million and $800.0 million, subject to certain adjustments. As of September 30, 2023, the Company has received $689.2 million in cash consideration which includes $110.2 million remaining in escrow subject to release upon certain members agreeing to certain consents. In October 2023, the Company received $35.8 million that was released from escrow. The cash consideration includes a true-up adjustment to the purchase price to be paid within approximately eight months following the Closing Date. See Note 13 - Income Taxes for further income tax considerations on cash proceeds received as of September 30, 2023. Pursuant to the terms of the Equity Purchase Agreement, OMNIA acquired Premier’s non-healthcare GPO member agreements which includes the associated net cash flows generated from administrative fees from purchasing on supplier contracts. In conjunction with the execution of the Equity Purchase Agreement, the Company and OMNIA entered into a 10 year channel partnership agreement (the “Channel Agreement”) pursuant to which OMNIA’s existing and newly acquired members will have access to Premier’s supplier portfolio in which 100% of the administrative fees generated will be remitted to OMNIA. Under the terms of the Channel Agreement, although the Company sold the rights to retain future net administrative fees from the non-healthcare GPO member agreements, the Company continues to maintain significant involvement in the generation of the gross administrative fees through its supplier portfolio. Additionally, the Company has the right to retain an “Access Fee” over the term of the Channel Agreement based on the continued growth of the non-healthcare GPO member agreements. Due to the Company’s continued involvement, the Company will continue to record net administrative fees from the non-healthcare agreements as revenue. The Company recorded the net proceeds from this transaction as a liability related to the sale of future revenues on the accompanying Condensed Consolidated Balance Sheets, which will be amortized using the effective interest method over the remaining contractual life of the Channel Agreement. The Company has no obligation to pay OMNIA any principal or interest balance on the sale of future revenues liability outside of the cash flows generated for administrative fees from the Channel Agreement. As payments for administrative fees are remitted to OMNIA, the balance or Premier’s obligation will effectively be repaid over the term of the Channel Agreement. To determine the amortization of the liability related to the sale of future revenues, the Company estimated the total future revenues expected to be remitted over the life of the Channel Agreement less any Access Fees retained by the Company. Future payments will result in the reduction of the liability related to the sale of future revenues less interest expense. The Company calculated the effective interest rate based on future expected revenue, which resulted in an effective annual interest rate of 2.5%. The Company will maintain a consistent interest rate throughout the life of the Channel Agreement. This estimate contains significant assumptions that impact both the amount of liability and interest expense recorded over the life of the Channel Agreement. The Company will assess the estimated future cash flows related to the sale of future revenues for material changes at each reporting period. There are several factors that could materially affect the amount and timing of payments to OMNIA, and correspondingly, the amount of interest expense recorded, most of which are outside the Company’s control. Such factors include, but are not limited to, retention by OMNIA of the non-healthcare GPO members, growing the existing portfolio of non-healthcare members and general competition of GPOs. Changes to any of these factors could result in an increase or decrease to expected future revenue and interest expense related to the sale of future revenues. To the extent the amount or timing of future payments varies materially from the original estimate, the Company will make a cumulative adjustment to the carrying amount of the liability, which will be recorded as a non-cash gain or loss in other income in the Condensed Consolidated Statements of Income and Comprehensive Income. At September 30, 2023, the Company had $574.7 million of debt related to the sale of non-healthcare GPO member contracts and associated future revenues, of which $32.8 million was recorded to current portion of sales of future revenues in the accompanying Condensed Consolidated Balance Sheets. For the three months ended September 30, 2023, the Company recorded $11.7 million in revenue that was sold to OMNIA and $2.5 million in interest expense related to the sale of future revenues in net administrative fees and interest expense, net, respectively, in the Condensed Consolidated Statements of Income and Comprehensive Income. The following table shows the activity of the liability related to the sale of future revenues since the transaction inception through September 30, 2023 (in thousands): September 30, 2023 Proceeds from the sale of future revenues $ 523,198 Proceeds from the release of escrow funds 55,785 Imputed interest expense associated with the sale of future revenues 2,533 Payments against the liability related to the sale of future revenues (6,855) Liability related to the sale of future revenues $ 574,661 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 3 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | (10) STOCKHOLDERS' EQUITY As of September 30, 2023, there were 119,672,451 shares of the Company’s Class A common stock, par value $0.01 per share, outstanding. During the three months ended September 30, 2023, the Company paid cash dividends of $0.21 per share on outstanding shares of Class A common stock to stockholders on September 15, 2023. On October 26, 2023, the Board of Directors declared a quarterly cash dividend of $0.21 per share, payable on December 15, 2023 to stockholders of record on December 1, 2023. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | (11) 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. Except when the effect would be anti-dilutive, the diluted earnings per share calculation, which is calculated using the treasury stock method, includes the impact of all potentially issuable dilutive shares of Class A common stock. The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended September 30, 2023 2022 Numerator for basic and diluted earnings per share: Net income attributable to stockholders (a) $ 44,761 $ 42,716 Denominator for earnings per share: Basic weighted average shares outstanding 119,344 118,351 Effect of dilutive securities: (b) Stock options — 146 Restricted stock units 534 563 Performance share awards 255 973 Diluted weighted average shares 120,133 120,033 Earnings per share attributable to stockholders: Basic $ 0.38 $ 0.36 Diluted $ 0.37 $ 0.36 _________________________________ (a) Net income attributable to stockholders was calculated as follows (in thousands): Three Months Ended September 30, 2023 2022 Net income $ 42,410 $ 42,959 Net loss (income) attributable to non-controlling interest 2,351 (243) Net income attributable to stockholders $ 44,761 $ 42,716 (b) For the three months ended September 30, 2023, the effect of 1.3 million stock options and restricted stock units were excluded from diluted weighted average shares outstanding as it had an anti-dilutive effect. Additionally, for the three months ended September 30, 2023, the effect of 0.2 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 months ended September 30, 2022, the effect of 0.2 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as it had an anti-dilutive effect. Additionally, the effect of 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. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | (12) STOCK-BASED COMPENSATION Stock-based compensation expense is recognized over the requisite service period, which generally equals the stated vesting period. The associated deferred tax benefit was calculated at a tax rate of 25% and 26% for the three months ended September 30, 2023 and 2022, respectively, which represents the expected effective income tax rate at the time of the compensation expense deduction and differs from the Company’s current effective income tax rate. See Note 13 - Income Taxes for further information related to income taxes. Stock-based compensation expense and the resulting deferred tax benefits were as follows (in thousands): Three Months Ended September 30, 2023 2022 Pre-tax stock-based compensation expense $ 6,692 $ 7,136 Less: deferred tax benefit (a) 1,544 947 Total stock-based compensation expense, net of tax $ 5,148 $ 6,189 _________________________________ (a) For the three months ended September 30, 2023 and 2022, the deferred tax benefit was reduced by $0.2 million and $0.9 million, respectively, attributable to stock-based compensation expense that is nondeductible for tax purposes pursuant to Section 162(m) as amended by the Tax Cuts and Jobs Act of 2017. 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. On September 24, 2023, the 2013 Equity Incentive Plan expired; no new grants will be issued under the plan. The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2023: 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, 2023 1,847,790 $ 33.11 1,470,824 $ 33.08 465,322 $ 33.15 Granted 1,037,170 21.64 684,026 18.70 — — Vested/exercised (292,292) 31.53 (458,905) 29.18 — — Forfeited (84,292) 31.34 (50,298) 35.12 (2,458) 33.98 Outstanding at September 30, 2023 2,508,376 $ 28.61 1,645,647 $ 28.13 462,864 $ 33.15 Stock options outstanding and exercisable at September 30, 2023 462,864 $ 33.15 Prior to June 1, 2023, 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. Beginning June 1, 2023, restricted stock units and restricted stock awards issued and outstanding for employees generally vest ratably over the service period. Performance share awards issued and outstanding generally vest over a three-year period if performance targets are met. Stock options generally vest in equal annual installments over three years. Stock options have a term of ten years from the date of grant. Vested stock options will generally expire either twelve months after an employee’s termination with the Company or 90 days after an employee’s termination with the Company, depending on the termination circumstances. Unrecognized stock-based compensation expense at September 30, 2023 was as follows (in thousands): Unrecognized Stock-Based Compensation Expense Weighted Average Amortization Period Restricted stock $ 49,350 2.5 years Performance share awards 24,112 2.4 years Total unrecognized stock-based compensation expense $ 73,462 2.4 years At September 30, 2023, there was no unrecognized stock-based compensation expense for outstanding stock options. There were no options exercised during the three months ended September 30, 2023, and the stock options outstanding and exercisable at September 30, 2023 had zero aggregate intrinsic value. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | (13) INCOME TAXES Income tax expense for the three months ended September 30, 2023 and 2022 was $13.9 million and $18.8 million, respectively, which reflects effective tax rates of 25% and 30%, respectively. The change in the effective tax rate for the three months ended September 30, 2023 compared to the prior year period is primarily related to changes in stock-based compensation expense, state law repricing and statute of limitation release on uncertain tax positions. As of September 30, 2023, total tax liabilities included $155.2 million within other current liabilities in the accompanying Condensed Consolidated Balance Sheets. During the three months ended September 30, 2023, the Company recorded a $143.9 million cash tax obligation associated with the sale of non-healthcare GPO member contracts and associated future revenues to OMNIA, which is expected to be paid in the second quarter of fiscal year 2024. Additionally, the Company recorded an offsetting deferred tax asset of $144.3 million to be released to income tax expense as the Company recognizes revenue associated with non-healthcare GPO member contracts. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | (14) COMMITMENTS AND CONTINGENCIES Operating Leases Operating lease expense for the three months ended September 30, 2023 and 2022 was $2.4 million and $2.5 million, respectively. As of September 30, 2023, the weighted average remaining lease term was 2.6 years, and the weighted average discount rate was 4%. Future minimum lease payments under noncancellable operating leases with initial lease terms in excess of one year were as follows (in thousands): September 30, 2023 June 30, 2023 2024 (a) $ 9,319 $ 12,381 2025 12,389 12,389 2026 9,005 9,005 2027 (b) 1,324 1,324 Total future minimum lease payments 32,037 35,099 Less: imputed interest 1,633 1,947 Total operating lease liabilities (c) $ 30,404 $ 33,152 _________________________________ (a) As of September 30, 2023, future minimum lease payments are for the period from October 1, 2023 to June 30, 2024. (b) There are no future lease payment obligations after 2027. (c) As of September 30, 2023, total operating lease liabilities included $11.5 million within other current liabilities 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 stockholder derivative or other similar litigation, claims relating to commercial, product liability, tort and personal injury, employment, antitrust, intellectual property, or other regulatory matters. If current or future government regulations, including but not limited to 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 regulatory inquiries or investigations, enforcement actions, penalties and other material limitations which could have a material adverse effect on the Company’s business, financial condition and results of operations. |
SEGMENTS
SEGMENTS | 3 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS | (15) 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, supply chain co-management, purchased services and direct sourcing activities. The Performance Services segment consists of three sub-brands: PINC AI , the Company’s technology and services platform; Contigo Health , the Company’s direct-to-employer business; and Remitra , the Company’s digital invoicing and payables automation business. The following table presents disaggregated revenue by business segment and underlying source (in thousands): Three Months Ended September 30, 2023 2022 Net revenue: Supply Chain Services Net administrative fees $ 149,027 $ 150,006 Software licenses, other services and support 11,186 10,826 Services and software licenses 160,213 160,832 Products 50,585 58,861 Total Supply Chain Services (a) 210,798 219,693 Performance Services Software licenses, other services and support SaaS-based products subscriptions 45,340 47,767 Consulting services 23,768 17,615 Software licenses 14,941 5,992 Other (b) 23,957 22,815 Total Performance Services (a) 108,006 94,189 Total segment net revenue 318,804 313,882 Eliminations (a) (52) (9) Net revenue $ 318,752 $ 313,873 _________________________________ (a) Includes intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material. (b) Includes revenue from Contigo Health, Remitra and other PINC AI revenue. Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands): Three Months Ended September 30, 2023 2022 Depreciation and amortization expense (a) : Supply Chain Services $ 13,573 $ 14,250 Performance Services 17,342 17,416 Corporate 2,101 2,225 Total depreciation and amortization expense $ 33,016 $ 33,891 Capital expenditures: Supply Chain Services $ 10,914 $ 6,735 Performance Services 9,441 12,186 Corporate 915 9 Total capital expenditures $ 21,270 $ 18,930 September 30, 2023 June 30, 2023 Total assets: Supply Chain Services $ 1,731,559 $ 1,317,076 Performance Services 1,218,406 1,209,353 Corporate 899,536 845,062 Total assets 3,849,501 3,371,491 Eliminations (b) 71 (4) Total assets, net $ 3,849,572 $ 3,371,487 _________________________________ (a) Includes amortization of purchased intangible assets. (b) 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 less cost of revenue and operating expenses directly attributable to the segment excluding depreciation and amortization, amortization of purchased intangible assets, merger and acquisition-related expense 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. 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. The Company has revised the definition for Segment Adjusted EBITDA from the definition reported in the 2023 Annual Report to exclude the impact of equity earnings in unconsolidated affiliates. For comparability purposes, prior year non-GAAP measures are presented based on the current definition. 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 unaudited Segment Adjusted EBITDA, a Non-GAAP financial measure, is as follows (in thousands): Three Months Ended September 30, 2023 2022 Income before income taxes $ 56,348 $ 61,728 Equity in net income of unconsolidated affiliates (a) 1,726 (8,243) Interest expense, net (195) 2,859 Other expense, net 1,092 2,164 Operating income 58,971 58,508 Depreciation and amortization 20,328 23,439 Amortization of purchased intangible assets 12,688 10,452 Stock-based compensation (b) 6,893 7,349 Acquisition- and disposition-related expenses 6,205 2,160 Strategic initiative and financial restructuring-related expenses 1,746 1,520 Deferred compensation plan income (c) (1,125) (2,370) Other reconciling items, net 33 79 Non-GAAP Adjusted EBITDA (d) $ 105,739 $ 101,137 Segment Non-GAAP Adjusted EBITDA: Supply Chain Services (e) $ 114,974 $ 113,187 Performance Services (e) 21,774 19,132 Corporate (31,009) (31,182) Non-GAAP Adjusted EBITDA $ 105,739 $ 101,137 _________________________________ (a) Refer to Note 4 - Investments for more information. (b) Includes non-cash employee stock-based compensation expense and stock purchase plan expense of $0.2 million for both the three months ended September 30, 2023 and 2022. (c) Represents changes in deferred compensation plan liabilities resulting from realized and unrealized gains and losses and dividend income on deferred compensation plan assets. (d) The definition for Non-GAAP Adjusted EBITDA was revised from the definition reported in the 2023 Annual Report to exclude the impact of equity earnings in unconsolidated affiliates. For comparability purposes, prior year non-GAAP financial measures are presented based on the current definition. (e) Includes intersegment revenue which is eliminated in consolidation. |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
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, consisting of normal recurring adjustments, unless otherwise disclosed. Certain amounts in prior periods have been reclassified to conform to the current period presentation. 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 2023 Annual Report. |
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, but not limited to, estimates for net administrative fees revenue, software licenses, other services and support revenue, contract assets, deferred revenue, contract costs, allowances for credit losses, reserves for net realizable value of inventory, obsolete inventory, useful lives of property and equipment, stock-based compensation, 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 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. |
Liability Related to the Sale of Future Revenues | Liability Related to the Sale of Future RevenuesThe Company accounts for the sale of future revenues as a liability, with both current and non-current portions. In order to determine the timing of the reduction in debt associated with the sale of future revenues, the Company estimates the total future revenues expected to be remitted to the purchaser. The Company recognizes interest expense based on an estimated effective annual interest rate. The Company determines the effective interest rate based on recognized and expected future revenue and maintains a consistent interest rate throughout the life of the agreement. This estimate contains significant assumptions that impact both the amount of debt and the interest expense recorded over the life of the agreement. To the extent the amount or timing of future payments varies materially from the original estimate, the Company will make a cumulative adjustment to the carrying amount of the debt, which will be recorded as a non-cash gain or loss in other income in the Condensed Consolidated Statements of Income and Comprehensive Income. |
ORGANIZATION AND BASIS OF PRE_2
ORGANIZATION AND BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Supplemental Cash Flow Information | The following table presents supplementary cash flows information for the three months ended September 30, 2023 and 2022 (in thousands): Three Months Ended September 30, 2023 2022 Supplemental schedule of non-cash investing and financing activities: Accrued dividend equivalents $ 472 $ 156 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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): Equity in Net Income Three Months Ended Carrying Value September 30, September 30, 2023 June 30, 2023 2023 2022 FFF $ 136,080 $ 136,080 $ — $ 7,187 Exela 31,487 32,905 (1,419) 138 Qventus 16,000 16,000 — — Prestige 15,623 15,503 119 180 Other investments 30,890 31,338 (426) 738 Total investments $ 230,080 $ 231,826 $ (1,726) $ 8,243 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Financial Assets and Liabilities | The following table represents the Company’s financial assets and liabilities, which are measured at fair value on a recurring basis (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 September 30, 2023 Cash equivalents $ 232,342 $ 232,342 $ — $ — Deferred compensation plan assets 49,911 49,911 — — Total assets 282,253 282,253 — — Earn-out liabilities 29,861 — — 29,861 Total liabilities $ 29,861 $ — $ — $ 29,861 June 30, 2023 Cash equivalents $ 77 $ 77 $ — $ — Deferred compensation plan assets 55,566 55,566 — — Total assets 55,643 55,643 — — Earn-out liabilities 26,603 — — 26,603 Total liabilities $ 26,603 $ — $ — $ 26,603 |
Schedule of Fair Value Measurement Inputs and Valuation Assumptions | Input assumptions As of September 30, 2023 As of June 30, 2023 Probability of transferred member renewal percentage < 50% 5.0 % 5.0 % Probability of transferred member renewal percentage between 50% and 65% 10.0 % 10.0 % Probability of transferred member renewal percentage between 65% and 80% 25.0 % 25.0 % Probability of transferred member renewal percentage > 80% 60.0 % 60.0 % Credit spread 1.4 % 1.6 % _________________________________ (a) The Acurity and Nexera earn-out liability was initially valued as of February 28, 2020. |
Schedule of Reconciliation of Earn-out Liabilities | A reconciliation of the Company’s earn-out liabilities is as follows (in thousands): Beginning Balance Purchases (Settlements) (Gain)/Loss (a) Ending Balance Three Months Ended September 30, 2023 Earn-out liabilities $ 26,603 $ — $ 3,258 $ 29,861 Total Level 3 liabilities $ 26,603 $ — $ 3,258 $ 29,861 Three Months Ended September 30, 2022 Earn-out liabilities $ 22,789 $ — $ (428) $ 22,361 Total Level 3 liabilities $ 22,789 $ — $ (428) $ 22,361 _________________________________ (a) Gains on level 3 liability balances will decrease the liability ending balance, and losses on level 3 liability balances will increase the liability ending balance. |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, net consisted of the following (in thousands): September 30, 2023 June 30, 2023 Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Member relationships 14.7 years $ 386,100 $ (143,291) $ 242,809 $ 386,100 $ (136,751) $ 249,349 Provider network 15.0 years 106,500 (6,804) 99,696 106,500 (5,029) 101,471 Technology 7.1 years 99,317 (69,203) 30,114 99,317 (67,581) 31,736 Customer relationships 9.4 years 57,930 (33,070) 24,860 57,930 (31,846) 26,084 Trade names 6.7 years 18,920 (12,506) 6,414 18,920 (11,983) 6,937 Non-compete agreements 5.2 years 17,715 (10,439) 7,276 17,715 (9,738) 7,977 Other (a) 9.3 years 9,232 (3,059) 6,173 9,232 (2,756) 6,476 Total $ 695,714 $ (278,372) $ 417,342 $ 695,714 $ (265,684) $ 430,030 _________________________________ (a) Includes a $1.0 million indefinite-lived asset. The net carrying value of intangible assets by segment was as follows (in thousands): September 30, 2023 June 30, 2023 Supply Chain Services $ 261,779 $ 269,710 Performance Services (a) 155,563 160,320 Total intangible assets, net $ 417,342 $ 430,030 _________________________________ (a) Includes a $1.0 million indefinite-lived asset. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net consisted of the following (in thousands): September 30, 2023 June 30, 2023 Useful Life Gross Accumulated Amortization Net Gross Accumulated Amortization Net Member relationships 14.7 years $ 386,100 $ (143,291) $ 242,809 $ 386,100 $ (136,751) $ 249,349 Provider network 15.0 years 106,500 (6,804) 99,696 106,500 (5,029) 101,471 Technology 7.1 years 99,317 (69,203) 30,114 99,317 (67,581) 31,736 Customer relationships 9.4 years 57,930 (33,070) 24,860 57,930 (31,846) 26,084 Trade names 6.7 years 18,920 (12,506) 6,414 18,920 (11,983) 6,937 Non-compete agreements 5.2 years 17,715 (10,439) 7,276 17,715 (9,738) 7,977 Other (a) 9.3 years 9,232 (3,059) 6,173 9,232 (2,756) 6,476 Total $ 695,714 $ (278,372) $ 417,342 $ 695,714 $ (265,684) $ 430,030 _________________________________ (a) Includes a $1.0 million indefinite-lived asset. The net carrying value of intangible assets by segment was as follows (in thousands): September 30, 2023 June 30, 2023 Supply Chain Services $ 261,779 $ 269,710 Performance Services (a) 155,563 160,320 Total intangible assets, net $ 417,342 $ 430,030 _________________________________ (a) Includes a $1.0 million indefinite-lived asset. |
Schedule of Estimated Aggregate Amortization Expense | The estimated amortization expense for each of the next five fiscal years and thereafter is as follows (in thousands): 2024 (a) $ 37,074 2025 48,136 2026 46,892 2027 44,240 2028 39,197 Thereafter 200,803 Total amortization expense $ 416,342 (a) As of September 30, 2023, estimated amortization expense is for the period from October 1, 2023 to June 30, 2024. |
DEBT AND NOTES PAYABLE (Tables)
DEBT AND NOTES PAYABLE (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt and Notes Payable | Long-term debt and notes payable consisted of the following (in thousands): September 30, 2023 June 30, 2023 Credit Facility $ — $ 215,000 Notes payable to former limited partners, net of discount 176,447 201,188 Other notes payable 1,199 2,280 Total debt and notes payable 177,646 418,468 Less: current portion (101,329) (316,211) Total long-term debt and notes payable $ 76,317 $ 102,257 |
LIABILITY RELATED TO THE SALE_2
LIABILITY RELATED TO THE SALE OF FUTURE REVENUES (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Activity of Liability Related to the Sale of Future Revenues | The following table shows the activity of the liability related to the sale of future revenues since the transaction inception through September 30, 2023 (in thousands): September 30, 2023 Proceeds from the sale of future revenues $ 523,198 Proceeds from the release of escrow funds 55,785 Imputed interest expense associated with the sale of future revenues 2,533 Payments against the liability related to the sale of future revenues (6,855) Liability related to the sale of future revenues $ 574,661 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Common Shares Used for Earnings Per Share | The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended September 30, 2023 2022 Numerator for basic and diluted earnings per share: Net income attributable to stockholders (a) $ 44,761 $ 42,716 Denominator for earnings per share: Basic weighted average shares outstanding 119,344 118,351 Effect of dilutive securities: (b) Stock options — 146 Restricted stock units 534 563 Performance share awards 255 973 Diluted weighted average shares 120,133 120,033 Earnings per share attributable to stockholders: Basic $ 0.38 $ 0.36 Diluted $ 0.37 $ 0.36 _________________________________ (a) Net income attributable to stockholders was calculated as follows (in thousands): Three Months Ended September 30, 2023 2022 Net income $ 42,410 $ 42,959 Net loss (income) attributable to non-controlling interest 2,351 (243) Net income attributable to stockholders $ 44,761 $ 42,716 (b) For the three months ended September 30, 2023, the effect of 1.3 million stock options and restricted stock units were excluded from diluted weighted average shares outstanding as it had an anti-dilutive effect. Additionally, for the three months ended September 30, 2023, the effect of 0.2 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 months ended September 30, 2022, the effect of 0.2 million stock options and restricted stock units was excluded from diluted weighted average shares outstanding as it had an anti-dilutive effect. Additionally, the effect of 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. |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
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 September 30, 2023 2022 Pre-tax stock-based compensation expense $ 6,692 $ 7,136 Less: deferred tax benefit (a) 1,544 947 Total stock-based compensation expense, net of tax $ 5,148 $ 6,189 _________________________________ (a) For the three months ended September 30, 2023 and 2022, the deferred tax benefit was reduced by $0.2 million and $0.9 million, respectively, attributable to stock-based compensation expense that is nondeductible for tax purposes pursuant to Section 162(m) as amended by the Tax Cuts and Jobs Act of 2017. |
Schedule of Information Related to Restricted Stock | The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2023: 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, 2023 1,847,790 $ 33.11 1,470,824 $ 33.08 465,322 $ 33.15 Granted 1,037,170 21.64 684,026 18.70 — — Vested/exercised (292,292) 31.53 (458,905) 29.18 — — Forfeited (84,292) 31.34 (50,298) 35.12 (2,458) 33.98 Outstanding at September 30, 2023 2,508,376 $ 28.61 1,645,647 $ 28.13 462,864 $ 33.15 Stock options outstanding and exercisable at September 30, 2023 462,864 $ 33.15 |
Schedule of Information Related to Performance Share Awards | The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2023: 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, 2023 1,847,790 $ 33.11 1,470,824 $ 33.08 465,322 $ 33.15 Granted 1,037,170 21.64 684,026 18.70 — — Vested/exercised (292,292) 31.53 (458,905) 29.18 — — Forfeited (84,292) 31.34 (50,298) 35.12 (2,458) 33.98 Outstanding at September 30, 2023 2,508,376 $ 28.61 1,645,647 $ 28.13 462,864 $ 33.15 Stock options outstanding and exercisable at September 30, 2023 462,864 $ 33.15 |
Schedule of Information Related to Stock Options | The following table includes information related to restricted stock, performance share awards and stock options for the three months ended September 30, 2023: 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, 2023 1,847,790 $ 33.11 1,470,824 $ 33.08 465,322 $ 33.15 Granted 1,037,170 21.64 684,026 18.70 — — Vested/exercised (292,292) 31.53 (458,905) 29.18 — — Forfeited (84,292) 31.34 (50,298) 35.12 (2,458) 33.98 Outstanding at September 30, 2023 2,508,376 $ 28.61 1,645,647 $ 28.13 462,864 $ 33.15 Stock options outstanding and exercisable at September 30, 2023 462,864 $ 33.15 |
Schedule of Unrecognized Stock-Based Compensation Expense | Unrecognized stock-based compensation expense at September 30, 2023 was as follows (in thousands): Unrecognized Stock-Based Compensation Expense Weighted Average Amortization Period Restricted stock $ 49,350 2.5 years Performance share awards 24,112 2.4 years Total unrecognized stock-based compensation expense $ 73,462 2.4 years |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments under noncancellable operating leases with initial lease terms in excess of one year were as follows (in thousands): September 30, 2023 June 30, 2023 2024 (a) $ 9,319 $ 12,381 2025 12,389 12,389 2026 9,005 9,005 2027 (b) 1,324 1,324 Total future minimum lease payments 32,037 35,099 Less: imputed interest 1,633 1,947 Total operating lease liabilities (c) $ 30,404 $ 33,152 _________________________________ (a) As of September 30, 2023, future minimum lease payments are for the period from October 1, 2023 to June 30, 2024. (b) There are no future lease payment obligations after 2027. (c) As of September 30, 2023, total operating lease liabilities included $11.5 million within other current liabilities in the Condensed Consolidated Balance Sheets. |
SEGMENTS (Tables)
SEGMENTS (Tables) | 3 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | The following table presents disaggregated revenue by business segment and underlying source (in thousands): Three Months Ended September 30, 2023 2022 Net revenue: Supply Chain Services Net administrative fees $ 149,027 $ 150,006 Software licenses, other services and support 11,186 10,826 Services and software licenses 160,213 160,832 Products 50,585 58,861 Total Supply Chain Services (a) 210,798 219,693 Performance Services Software licenses, other services and support SaaS-based products subscriptions 45,340 47,767 Consulting services 23,768 17,615 Software licenses 14,941 5,992 Other (b) 23,957 22,815 Total Performance Services (a) 108,006 94,189 Total segment net revenue 318,804 313,882 Eliminations (a) (52) (9) Net revenue $ 318,752 $ 313,873 _________________________________ (a) Includes intersegment revenue that is eliminated in consolidation. Intersegment revenue is not separately identified in Segments as the amounts are not material. (b) Includes revenue from Contigo Health, Remitra and other PINC AI revenue. Additional segment information related to depreciation and amortization expense, capital expenditures and total assets was as follows (in thousands): Three Months Ended September 30, 2023 2022 Depreciation and amortization expense (a) : Supply Chain Services $ 13,573 $ 14,250 Performance Services 17,342 17,416 Corporate 2,101 2,225 Total depreciation and amortization expense $ 33,016 $ 33,891 Capital expenditures: Supply Chain Services $ 10,914 $ 6,735 Performance Services 9,441 12,186 Corporate 915 9 Total capital expenditures $ 21,270 $ 18,930 September 30, 2023 June 30, 2023 Total assets: Supply Chain Services $ 1,731,559 $ 1,317,076 Performance Services 1,218,406 1,209,353 Corporate 899,536 845,062 Total assets 3,849,501 3,371,491 Eliminations (b) 71 (4) Total assets, net $ 3,849,572 $ 3,371,487 _________________________________ (a) Includes amortization of purchased intangible assets. (b) Includes eliminations of intersegment transactions which occur during the ordinary course of business. |
Schedule of Reconciliation of Income Before Income Taxes to Segment Adjusted EBITDA | A reconciliation of income before income taxes to unaudited Segment Adjusted EBITDA, a Non-GAAP financial measure, is as follows (in thousands): Three Months Ended September 30, 2023 2022 Income before income taxes $ 56,348 $ 61,728 Equity in net income of unconsolidated affiliates (a) 1,726 (8,243) Interest expense, net (195) 2,859 Other expense, net 1,092 2,164 Operating income 58,971 58,508 Depreciation and amortization 20,328 23,439 Amortization of purchased intangible assets 12,688 10,452 Stock-based compensation (b) 6,893 7,349 Acquisition- and disposition-related expenses 6,205 2,160 Strategic initiative and financial restructuring-related expenses 1,746 1,520 Deferred compensation plan income (c) (1,125) (2,370) Other reconciling items, net 33 79 Non-GAAP Adjusted EBITDA (d) $ 105,739 $ 101,137 Segment Non-GAAP Adjusted EBITDA: Supply Chain Services (e) $ 114,974 $ 113,187 Performance Services (e) 21,774 19,132 Corporate (31,009) (31,182) Non-GAAP Adjusted EBITDA $ 105,739 $ 101,137 _________________________________ (a) Refer to Note 4 - Investments for more information. (b) Includes non-cash employee stock-based compensation expense and stock purchase plan expense of $0.2 million for both the three months ended September 30, 2023 and 2022. (c) Represents changes in deferred compensation plan liabilities resulting from realized and unrealized gains and losses and dividend income on deferred compensation plan assets. (d) The definition for Non-GAAP Adjusted EBITDA was revised from the definition reported in the 2023 Annual Report to exclude the impact of equity earnings in unconsolidated affiliates. For comparability purposes, prior year non-GAAP financial measures are presented based on the current definition. (e) Includes intersegment revenue which is eliminated in consolidation. |
ORGANIZATION AND BASIS OF PRE_3
ORGANIZATION AND BASIS OF PRESENTATION - Narrative (Details) | 3 Months Ended |
Sep. 30, 2023 segment brand | |
Segment Reporting Information [Line Items] | |
Number of business segments | segment | 2 |
Performance Services | |
Segment Reporting Information [Line Items] | |
Number of sub-brands | brand | 3 |
ORGANIZATION AND BASIS OF PRE_4
ORGANIZATION AND BASIS OF PRESENTATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Supplemental schedule of non-cash investing and financing activities: | ||
Accrued dividend equivalents | $ 472 | $ 156 |
BUSINESS ACQUISITIONS (Details)
BUSINESS ACQUISITIONS (Details) $ in Thousands | Oct. 13, 2022 USD ($) provider | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) |
Asset Acquisition, Contingent Consideration [Line Items] | |||
Goodwill | $ 1,012,355 | $ 1,012,355 | |
TRPN Transferred Assets | |||
Asset Acquisition, Contingent Consideration [Line Items] | |||
Number of TRPN contracts | provider | 900,000 | ||
Transferring cash | $ 177,500 | ||
Escrow account satisfy indemnification obligations | 17,800 | ||
Fair value of intangible assets acquired | 116,600 | ||
Goodwill | $ 60,900 |
INVESTMENTS - Schedule of Inves
INVESTMENTS - Schedule of Investments in Unconsolidated Affiliates (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | $ 230,080 | $ 231,826 | |
Equity in Net Income | (1,726) | $ 8,243 | |
FFF | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 136,080 | 136,080 | |
Equity in Net Income | 0 | 7,187 | |
Exela | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 31,487 | 32,905 | |
Equity in Net Income | (1,419) | 138 | |
Qventus | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 16,000 | 16,000 | |
Equity in Net Income | 0 | 0 | |
Prestige | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 15,623 | 15,503 | |
Equity in Net Income | 119 | 180 | |
Other investments | |||
Schedule of Equity Method Investments [Line Items] | |||
Carrying Value | 30,890 | $ 31,338 | |
Equity in Net Income | $ (426) | $ 738 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) - health_system | Sep. 30, 2023 | Jun. 30, 2023 |
FFF | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 49% | 49% |
Exela | ExPre Holdings, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 6% | |
ExPre Holdings, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 15% | |
Number of member health systems | 11 | |
Prestige | PRAM Holdings, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 20% | |
PRAM Holdings, LLC | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 26% | |
Number of member health systems | 16 | |
Qventus | ||
Schedule of Equity Method Investments [Line Items] | ||
Ownership interest through subsidiary (as a percent) | 7% |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Financial Assets and Liabilities (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | $ 232,342 | $ 77 |
Deferred compensation plan assets | 49,911 | 55,566 |
Total assets | 282,253 | 55,643 |
Earn-out liabilities | 29,861 | 26,603 |
Total liabilities | 29,861 | 26,603 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 232,342 | 77 |
Deferred compensation plan assets | 49,911 | 55,566 |
Total assets | 282,253 | 55,643 |
Earn-out liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Deferred compensation plan assets | 0 | 0 |
Total assets | 0 | 0 |
Earn-out liabilities | 0 | 0 |
Total liabilities | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Deferred compensation plan assets | 0 | 0 |
Total assets | 0 | 0 |
Earn-out liabilities | 29,861 | 26,603 |
Total liabilities | $ 29,861 | $ 26,603 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) $ in Thousands | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Aug. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Assumed market interest rate (percent) | 1.60% | 1.60% | |
Notes payable to former limited partners, net of discount | Notes Payable, Other Payables | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Imputed interest (percent) | 1.80% | ||
Debt discount | $ (3,300) | $ (4,200) | |
Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out liabilities | 23,500 | 23,100 | |
Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out liabilities | $ 0 | $ 30,000 | |
Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | Credit spread | Valuation Technique, Estimated Future Earnings | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out input assumptions (percent) | 0.014 | 0.016 | |
Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out liabilities | $ 29,861 | $ 26,603 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out liabilities | 0 | 0 | |
Significant Other Observable Inputs (Level 2) | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Imputed interest (percent) | 1.80% | ||
Significant Other Observable Inputs (Level 2) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Earn-out liabilities | 0 | 0 | |
Prepaid Expenses and Other Current Assets | Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Current portion of deferred compensation plan assets | $ 5,900 | $ 5,200 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Measurement Input Assumptions (Details) - Valuation Technique, Estimated Future Earnings - Acurity, Inc. (“Acurity”) and Nexera, Inc. (“Nexera”) | Sep. 30, 2023 | Jun. 30, 2023 |
Probability of transferred member renewal percentage less than 50% | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn-out input assumptions (percent) | 0.050 | 0.050 |
Probability of transferred member renewal percentage between 50% and 65% | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn-out input assumptions (percent) | 0.100 | 0.100 |
Probability of transferred member renewal percentage between 65% and 80% | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn-out input assumptions (percent) | 0.250 | 0.250 |
Probability of transferred member renewal percentage greater than 80% | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn-out input assumptions (percent) | 0.600 | 0.600 |
Credit spread | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Earn-out input assumptions (percent) | 0.014 | 0.016 |
FAIR VALUE MEASUREMENTS - Recon
FAIR VALUE MEASUREMENTS - Reconciliation of Earn-Out Liabilities and FFF Put and Call Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | $ 26,603 | $ 22,789 |
Purchases (Settlements) | 0 | 0 |
(Gain)/Loss | 3,258 | (428) |
Ending Balance | $ 29,861 | $ 22,361 |
Fair Value, Asset, Recurring Basis, Unobservable Input Reconciliation, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Nonoperating Income (Expense) | Nonoperating Income (Expense) |
Earn-out liabilities | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||
Beginning Balance | $ 26,603 | $ 22,789 |
Purchases (Settlements) | 0 | 0 |
(Gain)/Loss | 3,258 | (428) |
Ending Balance | $ 29,861 | $ 22,361 |
CONTRACT BALANCES - Contract As
CONTRACT BALANCES - Contract Assets, Deferred Revenue and Capitalized Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue recognized | $ 13.8 | |
Revenue recognized from performance obligations satisfied in previous periods | 5.3 | $ 3 |
Revenue recognized associated with revised forecasts underlying contracts with variable consideration components | 3.8 | (1.7) |
Administrative Fees | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue recognized associated with a change in net administration fee revenue | $ 1.5 | $ 4.7 |
CONTRACT BALANCES - Remaining P
CONTRACT BALANCES - Remaining Performance Obligation (Details) $ in Millions | Sep. 30, 2023 USD ($) |
Revenue from Contract with Customer [Abstract] | |
Transaction price allocated to remaining performance obligation | $ 705.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation to be satisfied (percent) | 41% |
Remaining performance obligation satisfaction period (in months) | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation to be satisfied (percent) | 24% |
Remaining performance obligation satisfaction period (in months) | 12 months |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2023 | Sep. 30, 2023 | |
Goodwill [Line Items] | ||
Goodwill | $ 1,012,355 | $ 1,012,355 |
Contigo Health Reporting Unit | ||
Goodwill [Line Items] | ||
Goodwill impairment | 54,400 | |
Direct Sourcing Reporting Unit | ||
Goodwill [Line Items] | ||
Goodwill impairment | 2,300 | |
Supply Chain Services | ||
Goodwill [Line Items] | ||
Goodwill | 386,200 | 386,200 |
Accumulated impairment loss | 2,300 | 2,300 |
Performance Services | ||
Goodwill [Line Items] | ||
Goodwill | 626,100 | 626,100 |
Accumulated impairment loss | $ 54,400 | $ 54,400 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 695,714 | $ 695,714 |
Accumulated Amortization | (278,372) | (265,684) |
Net | $ 417,342 | 430,030 |
Member relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 14 years 8 months 12 days | |
Gross | $ 386,100 | 386,100 |
Accumulated Amortization | (143,291) | (136,751) |
Net | $ 242,809 | 249,349 |
Provider network | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 15 years | |
Gross | $ 106,500 | 106,500 |
Accumulated Amortization | (6,804) | (5,029) |
Net | $ 99,696 | 101,471 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 7 years 1 month 6 days | |
Gross | $ 99,317 | 99,317 |
Accumulated Amortization | (69,203) | (67,581) |
Net | $ 30,114 | 31,736 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 9 years 4 months 24 days | |
Gross | $ 57,930 | 57,930 |
Accumulated Amortization | (33,070) | (31,846) |
Net | $ 24,860 | 26,084 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 6 years 8 months 12 days | |
Gross | $ 18,920 | 18,920 |
Accumulated Amortization | (12,506) | (11,983) |
Net | $ 6,414 | 6,937 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 5 years 2 months 12 days | |
Gross | $ 17,715 | 17,715 |
Accumulated Amortization | (10,439) | (9,738) |
Net | $ 7,276 | 7,977 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful Life | 9 years 3 months 18 days | |
Gross | $ 9,232 | 9,232 |
Accumulated Amortization | (3,059) | (2,756) |
Net | 6,173 | 6,476 |
Other | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 1,000 | 1,000 |
Performance Services | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net | 155,563 | 160,320 |
Gross | $ 1,000 | $ 1,000 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS - Intangible Assets by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net | $ 417,342 | $ 430,030 |
Supply Chain Services | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net | 261,779 | 269,710 |
Performance Services | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets, net | 155,563 | 160,320 |
Gross | $ 1,000 | $ 1,000 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS - Schedule of Estimated Aggregate Amortization Expense (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2024 | $ 37,074 |
2025 | 48,136 |
2026 | 46,892 |
2027 | 44,240 |
2028 | 39,197 |
Thereafter | 200,803 |
Net | $ 416,342 |
DEBT AND NOTES PAYABLE - Schedu
DEBT AND NOTES PAYABLE - Schedule of Long-Term Debt and Notes Payable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 |
Debt Instrument [Line Items] | ||
Total debt and notes payable | $ 177,646 | $ 418,468 |
Less: current portion | (101,329) | (316,211) |
Total long-term debt and notes payable | 76,317 | 102,257 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Total debt and notes payable | 0 | 215,000 |
Notes Payable | Notes payable to former limited partners, net of discount | ||
Debt Instrument [Line Items] | ||
Total debt and notes payable | 176,447 | 201,188 |
Notes Payable | Other notes payable | ||
Debt Instrument [Line Items] | ||
Total debt and notes payable | $ 1,199 | $ 2,280 |
DEBT AND NOTES PAYABLE - Credit
DEBT AND NOTES PAYABLE - Credit Facility (Narrative) (Details) | 3 Months Ended | 10 Months Ended | |||
Dec. 12, 2022 USD ($) extension | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | |
Line of Credit Facility [Line Items] | |||||
Outstanding borrowings | $ 177,646,000 | $ 177,646,000 | $ 418,468,000 | ||
Proceeds from credit facility | 0 | $ 100,000,000 | |||
Payments on credit facility | 215,000,000 | $ 0 | |||
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 | ||||
Outstanding borrowings | 0 | 0 | 215,000,000 | ||
Available borrowing capacity | 995,000,000 | $ 995,000,000 | $ 785,000,000 | ||
Proceeds from credit facility | 0 | ||||
Payments on credit facility | $ 215,000,000 | ||||
Credit facility, unused capacity commitment fee (percent) | 0.125% | ||||
Weighted average interest rate | 6.47% | ||||
Letters of Credit | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | 50,000,000 | ||||
Swing Line Loan | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 100,000,000 |
DEBT AND NOTES PAYABLE - Notes
DEBT AND NOTES PAYABLE - Notes Payable (Narrative) (Details) - Notes Payable - USD ($) $ in Millions | 3 Months Ended | ||
Sep. 30, 2023 | Jun. 30, 2023 | Aug. 31, 2020 | |
Minimum | |||
Debt Instrument [Line Items] | |||
Notes payable, stated maturity period | 3 years | ||
Maximum | |||
Debt Instrument [Line Items] | |||
Notes payable, stated maturity period | 5 years | ||
Notes payable to former limited partners, net of discount | |||
Debt Instrument [Line Items] | |||
Notes payable | $ 176.4 | $ 201.2 | |
Debt discount | 3.3 | 4.2 | |
Notes payable included in current portion of long-term debt | 100.1 | 99.7 | |
Imputed interest (percent) | 1.80% | ||
Other notes payable | |||
Debt Instrument [Line Items] | |||
Notes payable | 1.2 | 2.3 | |
Notes payable included in current portion of long-term debt | $ 1.2 | $ 1.5 |
LIABILITY RELATED TO THE SALE_3
LIABILITY RELATED TO THE SALE OF FUTURE REVENUES - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||
Jul. 25, 2023 | Oct. 31, 2023 | Sep. 30, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Current portion of liability related to the sale of future revenues | $ 32,827 | $ 32,827 | $ 0 | ||
Non-Healthcare Holdings, LLC | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Consideration payment period | 8 months | ||||
Aggregate consideration | 689,200 | ||||
Partnership agreement term | 10 years | ||||
Administrative fees to be remitted (percent) | 100% | ||||
Escrow deposit | 110,200 | 110,200 | |||
Liability related to the sale of future revenues | 574,661 | 574,661 | |||
Current portion of liability related to the sale of future revenues | 32,800 | 32,800 | |||
Revenue | 11,700 | ||||
Imputed interest expense associated with the sale of future revenues | $ 2,533 | $ 2,500 | |||
Non-Healthcare Holdings, LLC | Liability Related To The Sale Of Future Revenues | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Interest rate (percent) | 2.50% | ||||
Non-Healthcare Holdings, LLC | Subsequent Event | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Aggregate consideration | $ 35,800 | ||||
Minimum | Non-Healthcare Holdings, LLC | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash purchase price estimated | $ 750,000 | ||||
Maximum | Non-Healthcare Holdings, LLC | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash purchase price estimated | $ 800,000 |
LIABILITY RELATED TO THE SALE_4
LIABILITY RELATED TO THE SALE OF FUTURE REVENUES (Details) - Non-Healthcare Holdings, LLC $ in Thousands | 2 Months Ended | 3 Months Ended |
Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Proceeds from the sale of future revenues | $ 523,198 | |
Proceeds from the release of escrow funds | 55,785 | |
Imputed interest expense associated with the sale of future revenues | 2,533 | $ 2,500 |
Payments against the liability related to the sale of future revenues | (6,855) | |
Liability related to the sale of future revenues | $ 574,661 | $ 574,661 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) - $ / shares | 3 Months Ended | |||
Oct. 26, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Class of Stock [Line Items] | ||||
Dividends declared (in dollars per share) | $ 0.21 | $ 0.21 | ||
Subsequent Event | ||||
Class of Stock [Line Items] | ||||
Dividends declared (in dollars per share) | $ 0.21 | |||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock outstanding (in shares) | 119,672,451 | 119,158,483 | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | ||
Per share amount of dividends (in dollars per share) | $ 0.21 |
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 | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Numerator for basic and diluted earnings per share: | ||
Net income attributable to stockholders | $ 44,761 | $ 42,716 |
Denominator for earnings per share: | ||
Basic weighted average shares outstanding (in shares) | 119,344 | 118,351 |
Effect of dilutive securities: | ||
Diluted weighted average shares (in shares) | 120,133 | 120,033 |
Earnings per share attributable to stockholders: | ||
Basic (in dollars per share) | $ 0.38 | $ 0.36 |
Diluted (in dollars per share) | $ 0.37 | $ 0.36 |
Net income | $ 42,410 | $ 42,959 |
Net loss (income) attributable to non-controlling interest | 2,351 | (243) |
Net income attributable to stockholders | $ 44,761 | $ 42,716 |
Stock options | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 0 | 146 |
Restricted stock units | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 534 | 563 |
Performance share awards | ||
Effect of dilutive securities: | ||
Effect of dilutive securities (in shares) | 255 | 973 |
Earnings per share attributable to stockholders: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 200 | 100 |
Options and Restricted Stock Units | ||
Earnings per share attributable to stockholders: | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 1,300 | 200 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | ||
May 31, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected effective income tax rate (percent) | 25% | 26% | |
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 | ||
Unrecognized Stock-Based Compensation Expense | $ 73,462 | ||
Options exercised in the period (in shares) | 0 | ||
Intrinsic value of options outstanding and exercisable | $ 0 | ||
Restricted Stock | 2013 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized Stock-Based Compensation Expense | $ 49,350 | ||
Performance share awards | 2013 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 3 years | ||
Unrecognized Stock-Based Compensation Expense | $ 24,112 | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized Stock-Based Compensation Expense | $ 0 | ||
Stock options | 2013 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 3 years | ||
Stock options, expiration period | 10 years | ||
Stock options | 2013 Equity Incentive Plan | Share-Based Payment Arrangement, Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, expiration period | 12 months | ||
Stock options | 2013 Equity Incentive Plan | Share-Based Payment Arrangement, Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock options, expiration period | 90 days | ||
Employee | Restricted Stock | 2013 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 3 years | ||
Director | Restricted Stock | 2013 Equity Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period (in years) | 1 year |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense and Resulting Tax Benefits (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Pre-tax stock-based compensation expense | $ 6,692 | $ 7,136 |
Less: deferred tax benefit | 1,544 | 947 |
Total stock-based compensation expense, net of tax | 5,148 | 6,189 |
Decrease in deferred tax benefit | $ 200 | $ 900 |
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 | 3 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Restricted Stock | |
Number of Awards | |
Outstanding, beginning balance (in shares) | shares | 1,847,790 |
Granted (in shares) | shares | 1,037,170 |
Vested/exercised (in shares) | shares | (292,292) |
Forfeited (in shares) | shares | (84,292) |
Outstanding, ending balance (in shares) | shares | 2,508,376 |
Weighted Average Fair Value at Grant Date | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 33.11 |
Granted (in dollars per share) | $ / shares | 21.64 |
Vested/exercised (in dollars per share) | $ / shares | 31.53 |
Forfeited (in dollars per share) | $ / shares | 31.34 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 28.61 |
Performance Share Awards | |
Number of Awards | |
Outstanding, beginning balance (in shares) | shares | 1,470,824 |
Granted (in shares) | shares | 684,026 |
Vested/exercised (in shares) | shares | (458,905) |
Forfeited (in shares) | shares | (50,298) |
Outstanding, ending balance (in shares) | shares | 1,645,647 |
Weighted Average Fair Value at Grant Date | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 33.08 |
Granted (in dollars per share) | $ / shares | 18.70 |
Vested/exercised (in dollars per share) | $ / shares | 29.18 |
Forfeited (in dollars per share) | $ / shares | 35.12 |
Outstanding, ending balance (in dollars per share) | $ / shares | $ 28.13 |
Stock options | |
Number of Options | |
Outstanding, beginning balance (in shares) | shares | 465,322 |
Granted (in shares) | shares | 0 |
Vested/exercised (in shares) | shares | 0 |
Forfeited (in shares) | shares | (2,458) |
Outstanding, ending balance (in shares) | shares | 462,864 |
Stock options outstanding and exercisable (in shares) | shares | 462,864 |
Weighted Average Exercise Price | |
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 33.15 |
Granted (in dollars per share) | $ / shares | 0 |
Vested/exercised (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 33.98 |
Outstanding, ending balance (in dollars per share) | $ / shares | 33.15 |
Stock options outstanding and exercisable (in dollars per share) | $ / shares | $ 33.15 |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Unrecognized Stock-Based Compensation Expense (Details) - 2013 Equity Incentive Plan $ in Thousands | 3 Months Ended |
Sep. 30, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 73,462 |
Weighted Average Amortization Period | 2 years 4 months 24 days |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 49,350 |
Weighted Average Amortization Period | 2 years 6 months |
Performance share awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Stock-Based Compensation Expense | $ 24,112 |
Weighted Average Amortization Period | 2 years 4 months 24 days |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Income Tax Contingency [Line Items] | ||
Income tax expense | $ 13,938 | $ 18,769 |
Effective tax rate (percent) | 25% | 30% |
Tax liabilities included within other current liabilities | $ 155,200 | |
Deferred tax assets, sale of future revenues | 144,300 | |
Non-Healthcare Holdings, LLC | ||
Income Tax Contingency [Line Items] | ||
Tax liabilities included within other current liabilities | $ 143,900 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating lease expense | $ 2,400 | $ 2,500 | |
Weighted average remaining lease term (in years) | 2 years 7 months 6 days | ||
Weighted average discount rate (percent) | 4% | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
Remainder of the year | $ 9,319 | ||
Year one | 12,389 | $ 12,381 | |
Year two | 9,005 | 12,389 | |
Year three | 1,324 | 9,005 | |
Year four | 1,324 | ||
Total future minimum lease payments | 32,037 | 35,099 | |
Less: imputed interest | 1,633 | 1,947 | |
Total operating lease liabilities | $ 30,404 | $ 33,152 | |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other current liabilities | Other current liabilities | |
Operating lease liability included in other liabilities, current | $ 11,500 |
SEGMENTS - Narrative (Details)
SEGMENTS - Narrative (Details) | 3 Months Ended |
Sep. 30, 2023 segment brand | |
Segment Reporting Information [Line Items] | |
Number of reportable business segments | segment | 2 |
Performance Services | |
Segment Reporting Information [Line Items] | |
Number of sub-brands | brand | 3 |
SEGMENTS - Schedule of Segment
SEGMENTS - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Jun. 30, 2023 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 318,752 | $ 313,873 | |
Total depreciation and amortization expense | 33,016 | 33,891 | |
Total capital expenditures | 21,270 | 18,930 | |
Total assets | 3,849,572 | $ 3,371,487 | |
Net administrative fees | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 149,027 | 150,006 | |
Software licenses, other services and support | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 119,140 | 105,006 | |
Services and software licenses | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 268,167 | 255,012 | |
Products | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 50,585 | 58,861 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 318,804 | 313,882 | |
Operating Segments | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 210,798 | 219,693 | |
Total depreciation and amortization expense | 13,573 | 14,250 | |
Total capital expenditures | 10,914 | 6,735 | |
Total assets | 1,731,559 | 1,317,076 | |
Operating Segments | Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 108,006 | 94,189 | |
Total depreciation and amortization expense | 17,342 | 17,416 | |
Total capital expenditures | 9,441 | 12,186 | |
Total assets | 1,218,406 | 1,209,353 | |
Operating Segments | Operating Segments and Corporate Non-segment | |||
Segment Reporting Information [Line Items] | |||
Total assets | 3,849,501 | 3,371,491 | |
Operating Segments | Net administrative fees | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 149,027 | 150,006 | |
Operating Segments | Software licenses, other services and support | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 11,186 | 10,826 | |
Operating Segments | Services and software licenses | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 160,213 | 160,832 | |
Operating Segments | Products | Supply Chain Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 50,585 | 58,861 | |
Operating Segments | SaaS-based products subscriptions | Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 45,340 | 47,767 | |
Operating Segments | Consulting services | Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 23,768 | 17,615 | |
Operating Segments | Software licenses | Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 14,941 | 5,992 | |
Operating Segments | Other | Performance Services | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 23,957 | 22,815 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Total depreciation and amortization expense | 2,101 | 2,225 | |
Total capital expenditures | 915 | 9 | |
Total assets | 899,536 | 845,062 | |
Eliminations | |||
Segment Reporting Information [Line Items] | |||
Net revenue | (52) | $ (9) | |
Eliminations | |||
Segment Reporting Information [Line Items] | |||
Total assets | $ 71 | $ (4) |
SEGMENTS - Reconciliation of In
SEGMENTS - Reconciliation of Income Before Income Taxes to Segment Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||
Income before income taxes | $ 56,348 | $ 61,728 |
Equity in net income of unconsolidated affiliates | 1,726 | (8,243) |
Interest expense, net | (195) | 2,859 |
Other expense, net | 1,092 | 2,164 |
Operating income | 58,971 | 58,508 |
Depreciation and amortization | 20,328 | 23,439 |
Amortization of purchased intangible assets | 12,688 | 10,452 |
Stock-based compensation | 6,893 | 7,349 |
Acquisition- and disposition-related expenses | 6,205 | 2,160 |
Strategic initiative and financial restructuring-related expenses | 1,746 | 1,520 |
Deferred compensation plan income | (1,125) | (2,370) |
Other reconciling items, net | 33 | 79 |
Non-GAAP Adjusted EBITDA | 105,739 | 101,137 |
Employee Stock Purchase Plan (ESPP) | ||
Segment Reporting Information [Line Items] | ||
Stock-based compensation | 200 | 200 |
Operating Segments | Supply Chain Services | ||
Segment Reporting Information [Line Items] | ||
Non-GAAP Adjusted EBITDA | 114,974 | 113,187 |
Operating Segments | Performance Services | ||
Segment Reporting Information [Line Items] | ||
Non-GAAP Adjusted EBITDA | 21,774 | 19,132 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Non-GAAP Adjusted EBITDA | $ (31,009) | $ (31,182) |