PINC - Earnings call transcript Q2 2022

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Operator

00:05 Good morning and welcome to the Premier, Inc. Fiscal 2022 Second Quarter Results and Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. Please note this event is being recorded. like the now Angie over would McCabe. I to conference turn to XX:XX go Please ahead.

Angie McCabe

and Premier's welcome quarter you, Thank XX:XX to call. fiscal second XXXX

investors.premierinc.com. we over supplemental SEC which turn the GAAP measures X-K now this measures the Alkire. XX-Q free Form Safe non Harbor which our CEO; Relations that to you Also, Before materially filings, today. soon. this available forward-looking as we at slides in Our our started, the evaluate Form in SEC, measures, slides or could statements detailed in our XX:XX that undertake of I website Chief our earnings other XX:XX to we contain XX:XX are accompanying including and to Mike refer statements business. morning most Factors affect to to Risk our get section release and to certain as Mike? and including only are financial review remind in Form and accompanying like non-GAAP included them. we GAAP and and might Factor supplemental encourage of you we Our soon. Administrative XX:XX furnish file remarks discussed speakers release, from are will presentation our today our future no filings earnings for actual results financial update to are appendix Craig such in the conference our where recent call obligation and of disclosures. Officer. We speak XX-K cash adjusted Mike to to Financial I of These call would Investor flow, these McKasson, expect with quarter, differ the appropriate earnings today, our this and President our our expect discussed and to Alkire, those forward-looking the the financial the Reconciliations results

Mike Alkire

everyone morning, us joining today. and thank you Good Thanks, XX:XX Angie. for

We on potential these portfolio of other the on address focus a logistical emerging the affecting customers due and face reflects shortages, key This to and in XX:XX portfolio with pandemic operational many have associated emerging term pandemic renewed to progress with our We our product future focused in the than quarter are more performance, core, and healthcare pandemic discuss XX:XX to quarter-over-quarter and help as highlights second I trends expectation are of regarding were in pandemic. pandemic with in and review provide continue chain. issues adapt has longer more other building well-positioned focus This morning, which COVID-XX challenges, of impact our more by key in healthcare resilient healthcare. operational despite some to For recent then and XXXX created we our COVID-XX the foreclosures, caused quick a a fiscal prepare are XX:XX the execution the was making our our offerings supply our disruptions, the as on chain. a the of businesses in and we basis. results, pleased healthcare will address Craig supply later. on trends: some underlying the decade, the believe line the with that financial designing and navigate achieving the will objectives. revised toward well and detail members challenges we associated we to including for guidance growth the first, is four We part

of while a that we management plan did within greater them significant by pandemic. supply real-time predict not visibility on expect sources, more pandemic positioned Our has better same focus chains XX:XX and domestic our toll at data Premier's time helping taken to suggests fared anticipate members believe the XX:XX We technology-enabling events. healthcare across supply many operations to that and the took capabilities programs on of downstream a uniquely creating those and are in for advantage We support diversity adverse the continued during of provide market participation help healthcare upstream and the manufacturing Second, member the supply inventory. organizations. industry to staffing than

contributed pandemic PINC years were are staff Our the began, hours prior have AI This they to employees has analysis clinical burnout of ago. rate that resignations. the the double all clinical and XX:XX nearly than left XX% two from jobs since One-third more likely our the data to working employee pandemic. of determined their

financial our decision also in products digital platform. XX:XX intelligence claims automating transactions lastly, time tests e-invoicing enabled to our and which is and technology And improve the be a of there on we authorizations manner. also needs therapies time important health takes streamline understand technology solving is necessary capability reimbursement, of support of XX:XX evidence with the e-payables technology Key include: better this Sciences’ and trend, focus will scaling in artificial outcomes enable and assuring patients business terms care enablement Our seeing we delivery. there AI been solution. today support continued populations. by our is addressing Premier, our to gap Decision and Clinical SaaS-based capabilities save ensure marketplace, There administrative healthcare. and and XX:XX that increased our primarily significant XX:XX different manual transforming solutions reduce manual, are hardwired procurement, labor, trend and a currently solutions to Applied workflow. is chain-focused, need an This continue automating timelier address members with automate in coding believe At headcount. connecting customers it interest a With generate supply driven the opportunities the and processes it be processes payments into available to and for use healthcare clinician in including to regard challenge and is we've and for continuity. and in and to a fourth investing in we one, market which inefficiencies and disconnected REMITRA, while adequate significant prior which are purchasing Second, why Third, needs, is other through why uneven the documentation to research many will with the the following:

address understand these influence We to continues AI have evolve improvement well are or combination long-term Participants last our believe growth. we complications disparities. natural providers within deliver key capabilities and disparity PINC NLP We health to in how building Investor language collaboratives helping detailed At positioned care been other solve our using based this of strategy and to XX:XX processing NLP make health issue. are in other to leveraging Healthcare our to sustainable help by pre-test. technologies to performance our and data trends. sense discussed on healthcare platform to found indicators Day, unique November, XX:XX comorbidities we our capitalize of and we strategies on are

Our affirms moving bundle other capabilities customers. level members Performance and improvement of members together long-term Services XX:XX and analytics a which primary partner from services our agreements transformational strategic in clinical for to position agreements interested quarter. believe technology agreements, with to the multi-year and enterprise margin core drivers the point We as members. for were growth solution sales deliver our our multifaceted segment advisory business second These our enterprise an are in in our

with health owned plan a plans partnership We stage higher quality, OhioHealthy, Ohio. announced second our administration plans provider business make health and recently customer also OhioHealthy adjacent services management, network service, quarter, our to on more healthcare. help XX:XX support members early business to highlighted operation plan our leverage businesses. for we markets Health to to affordable its new in process access this a In growth grow Contigo front. higher continue the progress Our

and In Contigo Health manage we clinical our collaboration addition, help staff and platform effective accessed ensure to Care between Management utilization providers. to and own OhioHealthy‘s expect be by monitor

disease on multiple maternal research life sciences organizations focused We our are support therapeutic to Contigo provide and In office outcomes believe partner OhioHealthy, improving prospective and cardiovascular value business, are employers. and on Applied further self-insured at proposition partnering scale our Health’s oncology, we to and patient many back infrastructure key and areas, very strategy including XX:XX this validate excited development Sciences health. for with with

also the women our with the of science time market operations market. company we Our empowered expedite manage solutions. our hospital platform. capabilities solutions help that health, approach the utilizing to records growth, and to solution and existing Improvement Perinatal improve new We namely Department new announce to our increase systems health enabling XX:XX electronic solution real-time investments system the unique an market and in improve healthcare therapies a will and complement health to infants and to analytics with the are demonstrates by pleased and in profitability. well AI We closed and traction partnership coordination, access partnership with maternal operations, coupled upon our loop efforts Collaborative. to Qventus, as our gaining technology exclusively other provide to partnering enterprise I'm with latest XX:XX offer software which work automates believe surgical for and this Services learning follows automation care important enhance management Health partnerships machine their behavioral Qventus will provider Human develop to the Their with to be and build AI and as AI-based

and our emerging executing our And of talent positioned and summary, continue to ahead to customers believe of and evolving and our we We are other data and represents Craig to focused with members us. for will our our differentiating exceptional to We even our expertise market. step their and further another strengthening get strategies growth well In of AI road very assets the of believe discussion operational XX:XX We remain in leveraging continue helping over adapt combination long-term a this successfully market unique XX:XX strategy. on trends. the machine objectives. proposition the PINC our turn about call AI achieve to value in now excited are to financial we performance. collaborate our McKasson overall and advance I remain with learning. ahead in capabilities We excited the Qventus, we

Craig McKasson

XX:XX Thanks, Mike.

little ongoing the levels And segment, Certain $XXX.X and of ongoing direct growth, which quarter a of portfolio products as segment generated expand food was The the Supply Services new quarter, growth to its was an like order price quarter. second committee revenue inflation sourcing primarily less a GPO by further XX%. relative is of supplier health year our with by contracts, during We XX:XX labor significant comprised of the revenue incur overall perform pricing for in XX%. our the provider if of demand review high second the Chain a within is decrease our of few was the second staffing in and pandemic quarter, XX:XX partially $XXX.X of due for to segment information the XX%. year-ago Supply revenue of year not to COVID-XX high-demand normalization a the allowed year-over-year increase For associated material with compared the member business. the result PPE prior offset million, million, portfolio Services determine from clinical who from primarily X% in XX:XX was growth short-term to market financial with historical In as program, million, there price business, of workforce due providers, supplies COVID-XX increased Pricing certain from to share price has member on year regarding revenue this result GPO and most is spend increases core existing other administrative a pandemic of revenue fees the more had one but strong quarter expectation returning Chain quarter. with of our product and a would Premier line to quarter in prior from compared from due member our penetration buy research increase categories adoption. year. and demand and impact of business the sourcing and our net ago Services last aggregated comments in in Performance and I Generally, where decreased The impact these has is the normalized state firm the continue and commodity to with shared a performance. in care challenges and customers net XXXX XX:XX was in which decline increased $XXX.X total requested circumstances, potential limited our and to demand had continued our have on pricing is contracts. impact was warranted. inflation including drive on Products historically market. declined forward XX% comprehensive we non-healthcare of decrease and our a the increase our impact

as that the a with in revenue offerings, the with large carry-on resulted last the year our value Some on pricing those license compared segment, expectation we given aspects license The on fiscal higher we quarter. the allow our the strive This may general price XX:XX recognized the categories. the prior capability fluctuations, first lower in enterprise fluctuations in other have of contract offset In quarter our able agreements timing in Performance impact our being on is current a quarter demand business XX% our resulted increased consistent possible. Since quarters enterprise and commentary we is total in across revenue second growth that not to food, results but for direct recognition experience in given whenever our GPO revenue of in portfolio these during revenue Performance is recognition its quarter significant refreshens did such pricing either. quarter In percentage signed. and we analytics period. are variability material sourcing which inflation pleased the a than impact to second in segment Services pricing in associated for portfolio typically XX:XX execution analytics categories often which do that agreement in Services we the in the and are our revenue year expected originally reduced some of XXXX to agreement of product and mitigate increases

net XXXX. was the in in EBITDA quarter, of second XX% the strong $XXX.X adjacent cash our our to and experienced Health $XXX.X exceed and from million by markets and outflows due Services cash growth the operational year. other a in million for of market increase associated adjusted adjusted to REMITRA million fee result product adjacent the as to six increased year cash year was adjusted year the administrative share supplies on in was million December expectation EBITDA impact our sourcing for was the XXXX the prior decrease $XX with of year increase Services administrative expense million XX:XX liquidity $XXX.X direct growth remain due same mainly The Contigo receipts ago related With to respect in a growth revenue profitability, investments quarter of net in current support partially Performance net our associated to products share compared fiscal The outlays quarter, operations headcount Adjusted for XX% offset business. also partially higher with This per $XX.X we Free administrative general to ended ended We $XXX.X and offset to an $XX.X $X.XX. August income the year-over-year $XXX as compared year timing cash for compared year, to payments XXXX million current favorable decrease in XX:XX of $XX pandemic. of XXXX achieve with by primarily quarter-over-quarter, flow year XX:XX restructuring due COVID-XX as and In segment, XXXX. Chain sheet XX% prior same XX, the on increased changes million totaled flows to a selling, our of to the demand revenue the XXXX was PPE prior increased million From affected to income in businesses. due Supply cash months GAAP with increase which balance and and businesses, perspective, prior the increased high-demand build-up Compared period in in December XX, which and enterprise our meet for inventory compared distributions was businesses. quarter. from with million additional analytics due license equivalents as have with $XX.X with or was a support our an the months XX, the associated as previous $XXX.X same with increase cash June factors earnings to in growth at from primarily in at historical related quarters. from operations, flows December cash discussed XX:XX for increased resulting million track mix quarter The XX, ago well EBITDA increase six XX% well the that in payments, that following. fees from in a million ago. to tax agreement. increased the year Cash TRA adjusted primarily XX:XX

five-year approach deployment, organic Our and our of had facility existing an enhance growth in to taking targeting $XXX the in focus With to or December outstanding and $X by credit capital capabilities billion offerings of regard continue million complement marketplace. differentiate to our strengthen, we XX. balance revolving on acquisitions as balanced investing a

stockholders. During December approximately also $XXX to are of million dividends a repurchased shares of total XX, We totaling returning XX:XX million six months we stockholders our $XX common capital and million. our stock to ended XXXX, X.X the paid for

Turning net result and outlook to our of our this first to addition, range million the Supply result payable per total our to of $XXX million net fiscal fees dividend continue net as administrative sourcing the we Services in on to of to be million. revenue will we in $X.X range remainder to declared $XXX expect expectation, March guidance. segment of billion $XXX in for XX, $XXX our to that revenue expect products and in year. $X a of anticipate for now This guidance range We net billion revenue year, the the of in Performance revenue increasing are $X.XX Services segment we of which the revenue Chain be million in of $XXX $X.XX that billion, consolidated now a to Board stockholders XXXX direct XXXX a March be half of record increase XX:XX Based to range share our Directors to range as an X. to million, are $XXX In performance XX:XX on of million the to billion. be of $X.XX

million $XXX range a As be we to in expect consolidated million. EBITDA result, adjusted of $XXX to the

guidance previous a our lowering XX:XX benefit that be are As the our we effective utilization last structure. from planned of annual $X.XX, our historical will to share from estimated. We to including and adjusted to now due tax our losses of in due to expectation primarily the operating of XX% to $X.XX estimate the per by range tax to for XX% for our said earnings range influenced quarter, net effective that is ability a up XX% we rate rate subsidiary of simplified number our previously factors, reporting reorganization rate the

the utilize operating in resulted Following originally separate determined fiscal of quarter, estimated, will historical ability second increase implementation net this that than our losses lower the company which to reorganization in rate. we tax effective be XXXX during our in

be We in flexible we This continue a in our we X% we the on tax fiscal of rate change and earnings in we originally have our through to tax tax estimated of our the strong on restructure, our rate tax be the fact, we per losses full continue planned XXXX results In greater to At adjusted XX:XX effective performance, XX%. cash free current business years. a structure our in balance range future impact the completed summary, is an cash to communicated cash the which our and generate our non-cash XX% strategy, X% maintain that impact X% XXXX reorganization in change a our historical beyond. reorganization XXXX net expect range to share in XX:XX subsidiary fiscal based and the expect for could operating guidance. As to time August This rate sheet. generally result XXXX and flow achieve allow will rate. to second after to to and reorganization the expect we anticipated estimated of X% positive believe quarter, basis communicated a fiscal now to range rate tax cash of on operating the our $X.XX forward moving it that increase to would execute in utilization XX:XX to than our

targeted for mid share. adjusted the As your a per beyond call XX:XX growth committed now and we COVID-XX high-single adjusted multi-year Thank annual we questions. time EBITDA up look our the digit for for XXXX impact pandemic, fiscal the for and remain you revenue, of to adjusted earnings net total open to We'll compound achieving today. rate

Operator

[Operator XX:XX Bank Michael Please now Cherny of question-and-answer the begin comes America. -- first We session. will Instructions] from question go Our of from ahead.

Michael Cherny

congratulations I understanding and morning the half think you results. a in guidance the bit of dive Good how little of on an good to on year. and back want XX:XX the get the about

very performance year-to-date. strong EBITDA had You've

step-down robust your of You the a more sequential have any implied I pretty is products. net for and time. pre-COVID EBITDA even versus fees outlook think both administrative significant Yet

So areas. pressure the these be outperformance investments guidance? what's second love gap there other bridge from changing half in back potential to that first operational some half just expecting, half the I’d to perspective, of just and year? between Contigo, the an you're curious, of able inflationary Is more the implied the in

Craig McKasson

at XX:XX the Thanks, the back I'll I look are then affecting is revenue couple that. associated a Michael. there a that EBITDA as guidance. cadence year, From half of things of and Sure. standpoint the year This to we adjusted be handle happy the throughout is of Craig. the think the

us the back we likely restructuring from in initially, guidance, impact hit have do to the the at As strong participate would but we year. more some that we we of still did we and that, time established have the members that from half GPO communicated a didn't very indicated first half, little as start standpoint communicate a in bit

and we the revenue in the the -- that. year. of of of expect of normalization bit From and as margin profitability some margins year So back prices in coming in of do as and the in down a in back half the year continuing demand sourcing direct down back the GPO normalization half reduction to come the a there's gross little standpoint, of XX:XX of a half result a result the modulation

don't strong to think So that freight material result I on don’t to the front levels some as inflation but as the expect we're business. -- that said things at back translate be -- the it's to pressures a supply half, supply really that of very inflation itself the that. will say through of the chain same on continue my nature in cost in side. I have a given there of expense impact needing remarks, year not clearly manage But chain, and half would driven. We those

Michael Cherny

how balance you incremental is we what basically, now strategy? investment contributors the about – potentially I can against go of or of about spend And the could right next is we appreciate How the on AI the I think these area strategies PINC should have guidance? about some in investment when especially cetera. Thanks. XX:XX will color spend Contigo you question backdrop you've of Mike. the the of guess the some your couple in that for should given years, have a backdrop et think -- spend go-forward the expanding of be that long-term have to you business be investment against meaningful there the Where that

Mike Alkire

quarter. on question strong also the the congratulations appreciate and appreciate I the I XX:XX

and bit of in a and are you us a thoughts, that year couple happening the trends heard about beyond. this little healthcare for talk So

rebranding capital, systems supply spend it's double about Clinical then been in because believe their Support. specific think if so healthcare historically, we're get around systems to supply arms our of Michael, that to that to our huge the to and going identify investment we've So it's around. enablement all it's have to chain, helping And you to be really hence in down arms technology technology opportunity is very that their a about all of or the there e-invoicing IDS/the enablement the you're going where around get deploy chain, e-payables area and continue really REMITRA, not Decision ability it's to to healthcare spend, the we able see that us identify

think help that the technology to understand as services as going So purchased area. non-acute really well we enablement spend,

So that's in the focus supply chain.

about a accurate reduce lends we're to AI enable this Clinical bit a than we have first, Decision since few think do coding that's Investor is is to As Craig that a machine the manual and that, also HCC appropriate talking our that going key coding relates think just intervention continued believe growth. areas have obviously, and and Day, Support XX:XX to little I to another been That's we've been one. looking the we itself it The I've the Clinical basic occurring. Decision cost, prior the what's to the really data to and authorization. that. unstructured automate required using it's AI in great within capability so we actually records mentioned application two, best automation incredibly physician for technology enabling about opportunities hardwiring, Support do an is and that, only effort there's us continuing at the practice. number Number intensive do our we believe ensure again that more well We manually the not to and couple of pilots, but actually we've learning outsized

then think platform with they that our healthcare lends we to with systems to to win growth. health this the is them entire out acute of is again area health itself along of And area. build their area continue recent those out need a are this our obviously which create very, systems about services network we well in really, building think of really another plan footprint as strong sort build of critical very needs. XX:XX and also as OhioHealthy, going that Contigo, We obviously the sort So have

capital to We deploy to area to non-acute in will sort of foundation to continue look that the continue build out.

So around. Michael, going focus that's on are continue deploying that's -- areas and that answer, we're a to the those capital but to long

Michael Cherny

XX:XX Great. Mike. Thanks,

Mike Alkire

it Appreciate XX:XX

Operator

Suisse. Credit go The question Please XX:XX next Jailendra from Singh comes from ahead.

Jailendra Singh

quarter. XX:XX congrats morning, Thank light in variant was wondering on good resurgence globally. cases good the you, driven if, a and by of Omicron and in I

If your thinking of are member critical stockpiling? rate on how of we you and these ample which of can PPE compared to suppliers the provide more should partners, types in about PPE consumption color supply supplies supply, the status which within ones be the in short

Mike Alkire

It's XX:XX Jailendra. a great Yeah. question,

tell protect also to would only So a creating PPE the XXXX of couple our of building all but thoughts. and about early year stockpiles. caregivers, XXXX not I these parts that were you out enough about

with seeing substantial a standpoint to the that focus really the specifically incredibly on right of think from see shore supply right near virus now laboratory is our continue enough Hence, of areas area. issues pretty the in regional that significantly it more on it's China of last parts a ensuring that focus to we're the and now, global building XX:XX starting pressure week through virus, was going that an what reagents It's just continuing it to Omicron things I I the others. with diversify reagents than of is focus it and we will the associated up on and Asia testing, We've issues is continue relates that for current so to supply So pressure having like there's the you executive more chain. lot to utilization – include capabilities. situation terms on have supply supplies obviously, the is PPE, different impacting to the and the we plastics. managing around of virus what's domestic on some with As relates country as Southeast out chain happening. tell been and to who hear

are to needed relates those very, many, to of canisters suction many see make continuing go issues very into So healthcare plastic and That to things. supplies. there. the We're that closely like things resins that kinds

out continue kinds different sort so And a seeing see And on the to technology supply as chain, some we investment products, do significant to so, technology then, we're things. from see hence infrastructure the And we so much to us and general on fundamentally reason relates standpoint. sub-issues allows XX:XX what's it building that sizes markets happening the I an enablement of for got about pressure there. various those the talk make inventory the of within in PPE, into just we believe to

So specifically say mask, very, look quickly, with of, like if we it We but partner the are quickly part let’s those inventory product that at areas in small. going from reagents, folks signals suction XX:XX enough sizes of to there shift we're canisters product various case size the just that plastic, are and size network that now, can quickly to other. produce long getting more one produce then and either are for very having a the big can ensure fact not continue the to right So PPE. worst answer, of or more and of

Jailendra Singh

several with your XX:XX care based -- seen more Health we on base work direct-to-employer with. the have Okay. into contracts follow-up Contigo is few my some helpful. business, around like side for more and And that on value That's employers discussions on vendors the they risk quarters, last entering

Just that role seeing and you wondering that play do you from trend to what expect accelerates? if perspective are what

Mike Alkire

XX:XX Yeah.

working with them marketplace. and help to a systems hospitals accountable right, we are health financially So, compete really you're and

that to announcements from to value-based CMS value we sort that tell practices important will are So really best ensure you starting see how members that amongst a going to terms is to the really movement really, in they're of contain ways dealing that based the some they are be of other towards believe shared being care. collaboration at I with we're looking care. Also

that opportunities standpoint is of health to care, most sort enhanced them the capabilities is, that we value the data drive a We also back want the only are side we're to how most Contigo where to obviously but those analytics efficiently to the across is have and side. provide will XX:XX you movement providing to that's that. make -- what on One that know entire not they've tell that I plan sure and from plans. make infrastructure the providing sure because to care to we got payment there from those that those identify organizations to want So upon we're focused effectively or continuum support us. a

identify ensure cases coming the see more as data effectively. appropriate can upfront, into the the and to manage more that those capabilities Clinical we stream complex about there. it's Decision we that health So protocols Support about cases the to It's

AI to value embed health our to care. systems movement continue to the to deal those things going of based we're machine and learning this kinds help with So

Jailendra Singh

XX:XX Great. Thanks a lot.

Mike Alkire

XX:XX Yeah. I appreciate question. the

Operator

XX:XX Right.

question from Hooker Donald comes Next from go KeyBanc. Please ahead.

Donald Hooker

XX:XX Great.

don't talked catch recent think but I forgive about and either. quarters -- services on just You up you brought this purchase wanted don't me, it much quarter wrong, I'm if up opportunity guys I that as in about topic. I to haven't the

a -- you that early an I that in Yankee big us acquisitions -- year on think at time, calendar year right? with last And last you Can update I area. deal opportunity? made had know this Alliance you last

Mike Alkire

I the is implementation you well. Yeah. obviously middle XX:XX going can of that very the that are would stage. All in it's say suggest I we

that then just you those opportunities implementing of where we're to So, identifying technology purchase our many, many services And and referred health spend. increase that systems. to

as make got believe the But all platform, for net going that teams that that we to We're the invoiced that put And agreements all then, obviously, is, middle purchase healthcare sourcing be are the to those affinities agreement. that need of local the evolve areas in committees up with given services. and of out where REMITRA it's we Our continuing speak. or systems' we're to which to the executives we're on from clinical implementation understand data. working the regional identifying agreements we focused national are

Craig McKasson

but with health only been had over on a impact and color lot the would has new so et Mike some obviously I add, areas care The their attention that attack providers, and you I dealing has patients to and the and expand pandemic expect ability the probably past focus Yeah. XX:XX COVID of is cetera. year this Don, think pandemic

making started but change we people's is a anticipated it before might priority. to And more so measured pandemic have the than progress, little we're

Donald Hooker

In as business the on then not business, us a you. direct of for maybe recall, follow-up as topic. ex-COVID, business And on Craig Great. elaborate a of quarter? that? million on we can and I a direct normalized in that think kind sort past, about talking were sort sourcing sourcing, as I revenues maybe the different a XX:XX And I believe the in settling favorable maybe sure, basis kind $XX of well the range, update little of you mix that bit in this low

Craig McKasson

kind the had COVID Yeah. and forward the large pandemic. expanded million, activity spikes some $XXX pre-COVID. we've was to million then, excluding And buys Relative XX:XX is during really -- again obviously, that of given about $XXX non-healthcare-related of the annualized that business the the

down product when have and in through COVID to, working I margin think might us I function mix, back $XX assume second sort the were didn't what a range normalize built. needs has we double-digit, really product lower people's little guided core that coming quarter XX:XX a were the $XX We we the helped second been the growth, of, think high-single it digit if improved you growth mix to to was is $XX some of impact of we've have sourcing be quarter some really down meet that would high. I think absent direct everything quarter. and margin products terms it's of million low-double to to and this and just had But if try probably as million stockpiles what In just settle of bit into particular in as normalization. type the in more quarter a obviously million which

Donald Hooker

Congrats Great. the quarter. XX:XX Thanks. on

Operator

comes from XX:XX Please go question ahead. -- Piper Jessica Sandler. Tassan The comes question from sorry, next from next

Jessica Tassan

Hi. Thank so for the you much XX:XX question.

overall manufacturer campaign and for Mike, a price hear like successful conference increases last comment you price, the a P&L and, So, month to request a request for from can on and process what looks Premier? then perspective maybe just the timing it helpful at describe by your which can was but a you of volume

Mike Alkire

I that XX:XX I happening first understand But of the I your inflation perspective you question, question. or may your to terms have but what's point. last perspective, think clarify pricing think an from in a was

XX:XX and this that a on just of or at heart the that We we have looking very, primarily things tight many the are a They on terms at are, to us overall price are business, in it increase terms happening they're the they in a a transparency obviously not think for impact approvals especially your to healthy our as got question and negligible the come firm to not stages increases, and should business, of total they suppliers through process Craig look agreed number was, impact those you by said, constricted at obviously getting this them has having going and so I determine there be this company. in be look passed they market, prices First, very price going price agreements, supply those profitability of they've in -- are They pricing decision number to on due think that question. should been the of product. of the make meaning to. of to look -- They're things agreed as to those of actually And time from whether well. gets get of the that there or not, the through to of filtered supply markets. want what's that and market, agreed a whether they of in profitability your to executives be should healthcare more to. up that a in it creating If market. a then have interested that sometimes healthcare committee market, Premier they the multiple want look there at go as ensure our know, And sort healthiness systems' or come the I at look a they as of executives to may system

exit their of market maybe of to increase if worst the in they’ll ability exit from lack a product they if from case, agree to fact that profit. price drive So or because may category somebody believe a a a

six, the obviously labor to continue criteria have come pressure of that hope pressures they that asked the not price the expect So up nine eight, on as to that seen the next that foresee We I your go will answers of requesting kind down people I foreseeable also, question. the -- continues. what things, of the XX:XX pressure are I you in requesting evaluation path kinds kind don't let on. think we out the but or of in therefore it future, those we months. in suppliers -- continue been terms and and months I has few increases, those last that costs

Jessica Tassan

helpful. not that when just or And Yeah. manufacturer a when take That's XX:XX from initiated visibility timing follow the what going whether gets the the the effect? is Premier be, into verdict to is up to would has request or is increase quick price

Mike Alkire

XX:XX increase. that just or of about that be make increase, that's the allowable you'll not do especially it's maybe a requires for to few diligence they XX couple price due are some that a of that days, will talked cases see. the I or systems the months -- So but accept the as typically, there'll the cycle healthcare if it's to I it's typically whether contractually average There question time great appropriate XX a It’s month an within months days determination see

Jessica Tassan

XX:XX you. Got Thank it.

Mike Alkire

Thank XX:XX you.

Operator

The XX:XX Raymond James. ahead. Please Ransom John go from question next from comes

John Ransom

is the back half count share for considering your buyback? morning. Good the simple of the is Hey. estimate This XX:XX year, the What question.

Craig McKasson

XX:XX is Craig. Sure. This

well, the of my in that --apologize, count, share we the would seeing relative million of so that in terms shares X.X repurchased tip included we I'm not described, fingers. buyback So of the that's to what be terms

and in I that, state XXX that. come something confirm John me I'll but that like let or million and range the think it's back

John Ransom

in XX:XX count You timing if sequentially, shares so there bought issues. share the back some dropped that's more is

do you like sort out real-time kind needs strategic a -- product of all there ended Contigo we a think to channel I thinking could that mean providers it is or [indiscernible] little outside lower of do selling, just it me like with seems agree you a think decisions supportive decision and Contigo, to product -- So count might that then around were stand-alone? I navigation would think be where be of another for good set your bundle it's say secondly, a to more guess I And than normal product share offerings you we up. as support of type question happen, bit a

Mike Alkire

pass first is navigation absolutely John, the I'll critical, that of to really a XX:XX especially I we across continuum. in really, that -- Yeah. think patient it's this. my navigation patient remarks, We take question. of actually kind alluded navigation think great the

we answer we're continue the (ph) be take But So those the in things going value-based hand kinds your deployment. of question, to on look partnerships including to going incredibly yes, as care. are and off to important to that area, potentially at more some continuum capital that and crops more

John Ransom

imaging or XX:XX doctor need thinking last up? their that technology Do you be And that say just you patients mile, this or the of tell question center suggestion it’s do suggestion in really whatever this specialist and to thing if with built that just kind [indiscernible] is? that the you to mean, let's that send network benefits know I about more know this one you time should about -- so real

Mike Alkire

Yeah. great question. a XX:XX It's

approach stuff authorization. we call And office prior AI office whole prior is to it our that is off. So part it back administration and and front to on parcel

couple used kinds and those unique tell are very we continue we of So of images a the a is in that have cases of to cases algorithms, specific good that the and of very, like net all high early you cost we're but stages, in understanding things, piloting. would I it's it use to design specific benefit and

John Ransom

Thanks much. XX:XX so

Craig McKasson

is Craig. John. Hey, This XX:XX

to just answers. the Just back quickly finalize circle

repurchase XXX and million indicated we'll do still million in come outstanding to a the $XXX balance will the year finalize full on and basis in a but kind share diluted loan. as shares right it drop shortly that basis is that now on outstanding, QX about extent QX below that under the So, of complete I think we I

John Ransom

XX:XX Thank you.

Operator

Eric Coldwell from XX:XX from The ahead. next question go comes Please Baird.

Eric Coldwell

Good have think Thanks. morning, I two. XX:XX I

And XH, XX? like? the the of back of Just am from what's pipeline deals, were year, be contributed any that color little upside a upside the thinking a part forward these on the variability to items the it in on these hoping on us you what's about timing a to I can me handful more that to like lumpy. looked it performance bit an then of five XQ the number quarter. two is Thank was that in to the I talking First, millions It half understand deals sure wanting contracts this, we're you. potential of of on can slippage was largely guess that look but three the in the quarters of make enterprise we pull a offset give this QX, analytics from of deals results is

Craig McKasson

This Mike if add I'll to Sure. any And take is XX:XX be color Thanks, happy Craig. can necessary. Eric it.

to continue and forward do solution We the -- as there of would to not where of the bundled of XX:XX technologies have pull a year year. half a the that's tends large there second So five Generally XQ multi-million number work of are dollar the engagements that didn't timing them of not to quarter as first it's are we in of in be think but maybe of back margin to articulated engagements these services significant the one advisory generally pipeline first we there encompassing. of XX still sort back described. terms any was of the these have so past, a all, and in we're all-encompassing the as be so that ramping all the the would with to of yes, anticipate one two, in at of tend part described. on -- but perhaps I the we first-half. that improvement, question, a to may a Relative about, it's enterprise particular second I license deliver in of not be volume agreements you was performance any kind one it together that question of quarter come through half your the in our the a the end clinical half speaking They references part this

they're it typically would So a sales not quick unlikely forwards of kind so pull these. be process of have we a would that

not to quarter. did second the that -- performance the it's So in contribute

Eric Coldwell

as then, had in then call could something rate, a to guidance lower you on I I might tax were on but rate perhaps for imply year, may was prior that thought signaled, and the this give ‘XX as previously that. And not for say the high tax beyond jumping I Thanks thinking, Thanks. periods XX:XX that XX% on but and you actually us hoping you fiscal in be up you some ‘XX heard today beyond. that.

Craig McKasson

had XX:XX beyond effective and was tax on the Yeah. annual question, talking estimate anticipated beyond would on I XX% But to the an previously actually be rate didn't XXXX. ‘XX tax discuss rate, rate answer your the and the fiscal the I we expected cash call. about

a I in XX% basis think will rate changes likely more expectations subject on prospective to tax this this obviously, things, or point, it other but at would that after be our year. current the be range

Eric Coldwell

very Okay. great. much. XX:XX That's Thanks

Operator

Please next comes question The go from XX:XX Samuel from ahead. Anne JPMorgan.

Anne Samuel

Thanks the question. guys. Hi, XX:XX taking for

could was hoping your maybe you Performance I AI. issue? little within about what resonating there a But how dig then are your And you Thanks. just areas that some automate spoke able to You really with help with labor bit into shortages impacting suite customers? to are PINC are Services further solutions

Mike Alkire

XX:XX Yeah.

statistics what color a labor a to labor a standpoint. and bit little bit here we're So just doing from a talk it, jump I'll I'll into standpoint, some of put little from then around about

remarks, little a hours spending bit prepared pretty line. overtime bottom that’s so a $XX their -- labor about months ago a for few from employees. about it's is as labor need spoke impact time There what's bit in that for well are up imbalance substantial up for billion hired talked the little of every this XX% annually we that a hospitals XX So clinician clinical up on are I for but part-time more this a are employees, XX% jobs -- big is There also and opened. a X.X standpoint quick XX%, full-time that's XX:XX are happening today. are

tell last The currently going is -- tell significantly averages quickly. is not that that So this for right I the to away higher going folks about of go issue can I'll that that X% pre-COVID. labor attrition clinical rate is now is than about you the statistic is not to you to which XX%, XX% this

So the it that that the systems losing folks of lot folks of technology just can So and talked have a we to to of about the we're don't labor take lot we a to force, to so for is our automate to replace out really XX:XX of health talent procedures allow you redeploy clinical continues think tell you bedside. focus some that just them. that

some using prior of think So We're to the of get about staff you're at of so clinical things that's like authorization. authorization obviously times things, an area. in the middle

is again, care filling maybe that of AI then their the ML. we're areas on We are operations But that confident. also are very to the clinically job and redeployment general, in bedside. to We there using the but you, the focus been that's utilization AI on are coding in been the what think and folks Clinical setting a offering of focused believe it's the health finally, end can has and we more allow have very, utilize that we that there at the just cases use whole or that fairly oriented the those area a skills And appropriate those robust high of folks are gaps around allow And intervention again focus more a clinical those and and folks staff folks of licenses to XX:XX through an ensuring historically, with Support. system that utilized really ML. that Decision effective manual leveraging is us have do practicing ensuring an as is we

Anne Samuel

you. XX:XX helpful. Thank That's really

Mike Alkire

you Thank XX:XX

Operator

Percher Eric comes Please question Nephron XX:XX ahead. next The Research. from from go

Eric Percher

you. Thank XX:XX

flows upside through or Looking on when quick it. point, it, point the does kind drives point the chain it into Maybe maybe and we halfway down variability guidance coming provided you is to And this sunset factors? a that year towards supply margin other of through the of at versus year at lower versus maybe come really much the what that at this product what end or final how around knew range? us the the first

Craig McKasson

Thanks Eric. the This for Sure, XX:XX Craig. is question.

business think as I GPO talked influence and continues side, Mike some guidance, certainly in trends at the on in look our the the things chain has so, side will Omicron to that about, supply utilization of you had of relative been it where obviously if be the the regional. one range to procedures impact, So has

certain things And country of seen been but where so elected we sort are haven't have parts the there of deferred. to procedures cases overall impacts huge in

happens pandemic the sourcing cadence happen, we at we of direct our a to believe, is this have continue back year in as we'll From in how implications of and to of finger time. how things standpoint, have the the well more So it's activity of we what that sort GPO higher points pulls XX:XX pull-through the to on pandemic us unexpected could a but are the in on through level terms and see relative to see going half this the not result of there. continue to science cause as demand to out all precise but plays and range, performance through navigate in

properly and believe, to normalization us So we more to basis. extent the to but have revenue down perform we need -- other we cause slightly sort continue commodities than on PPE higher that could the of planned coming that in anticipated members a

a are seeing it's volume. of pricing obviously, price normalization we Although, both combination decreases and in that

And that expected our about. there a to timing guidance year change not expectations on periodic the relative performance services so chain the have to considerations We those do range. for are we've and side supply the things obviously the talked our

our is when out. continue only REMITRA the and services piece, with platform, more in for would we integrate others that as little with getting on to other our year, to pace there performance is how come a say things that function XX:XX to sign of in are that come continue side happening through. the that which that's plays on to will of if on and is to depending bit of we successful prior the expectations So the end accelerate a that upside to potential And suppliers up program I all the pass

Eric Percher

contract in half, the is any legacy like the expected variability not second And fair? so was it run-off there on XX:XX the that not factor, that's that we in sounds swing

Craig McKasson

We because factor, had wouldn't already we swing say XX:XX it's that articulated. had I a impact.

that because the are contracts this second the So it's as place Their we not in to in talked didn't there about anticipated effective previously, in had now at factor are that time. members and those in necessarily being of a at so change terms point agree time, we some in affecting restructuring some the is half, place but swing all

Eric Percher

XX:XX It's now.

so you Thank Okay. much.

Operator

follow-up James. a XX:XX The next from John is question from Raymond Ransom

John Ransom

just I this heard XX:XX correctly. I to sure, make want

run that for fully incorporating supply second-half re-contracting the is for So is look rate if chain, to there least re-contracting, at now happen? at the that we the all

Craig McKasson

XX:XX is not There further Yeah. re-contracting.

restructuring this elected of point their as that all and contemplates either contracts So members XXXX a that back September members the at partners, full we expiring time then in of agreed of the that that members left go equation. subset out other or are the chain hadn’t terms when couple July contracts to year, their those their this completion were there the back about, talked August in effective have and X, subsequently original XXXX, have half at renewed -- supply that are, to renew second the of effective the not the

the year. half more of re-contracting back is So, place in take not no, to any the there

John Ransom

sustained compared mean other XX:XX goes industry that look you and customer other and to the the when the the probably same you much stable pretty competitor businesses switch is joint big guess switching that distribution what new just kind and going customer than where so reason competitor? get board gain them pricing in because to sort just really I So at commodity this time, lock on forth your of like that and curious, the people customer, equity among of interest of business seems people to not your is all I way in price, there a I'm the say is you a across or

Mike Alkire

general, you're jump board you've great as would as look expect, closely to you factors, on at system, different relationship very partnerships This got they're working just a deliver. Yeah. stuff. it's can the the XX:XX In you think value if our Mike. with a is healthcare the on and I'll they market lot John, of and that about across going the,

a So a you if have of I longstanding there would play, lot that is factors that relationship. go into tell just you especially

new might other, more as which on though into very be part entering Sometimes -- the fees. well one new a value of relationship, you're equation there be economics with the could admin

kind got not appropriately that's is XX:XX based customers then were creating model got possible. competitive as make I things And that I question, current environment. that make environment as competitive want and decisions contributing first -- we've sure if board. okay, how also want incredibly all to the to most a continued just to we're for value it's continues we've an finally, any of if well along like make about, -- to value It's deliver, or Craig there as talk your interested And then -- the you, So to create customers. prospective able way much to to the upon, those to it's tell folks answer like, We the think prospective will actually as create to our maintaining of decisions amount too. over to as

Craig McKasson

thing, I simple supply partners add chain process. that to would not it only The XX:XX changing is a is

our servicing not not are So there's in either generally actually of a other that looking leadership differentiated answer nature. you're get may a the XX:XX any of care but that go is, speaking, of or that. for evaluation, would second on us to source switching with complexity do a other we have partner question, competitor they capabilities to just if that occurs piece and somebody your the PPE they add couldn't a us. the clinical cases, M&A history, we which I And looking pandemic number first believe I tremendous of customer in be, there the activity that we to typically a on product, at switch through you health there the case, is look, things a then, this number not when typical is question, properly of a all type to given people decision our some price go changes that why of or small to providers really that some can basis had regular but help part success amount and tremendous from and in think kind are lot your of it make with look relates there If routine of year, choose I not think ability them back it a that's if organizations and

value provide a them of just commodity the product. services not improving costs, to that providing GPO entire the truly so, pump outcomes we that reducing And on proposition price help just with and is of

Mike Alkire

have XX:XX I critical jump to Yeah. differentiation. think a that John, here, I in is do that

We domestic, shore that do have. it have not not and supply partnerships term, more in continued making regional health and been short drugs investments provided of and PPE for believe -- near many believe investment generic that this alliance long-term. that differentiate our products in us will our We our including did chain. other We product were [Technical Difficulty] part diversify systems to access the the to

commodity, to for differently in as the reductions are. much a investments just supply and help the significantly health So we all vertically on doing the that really of is had are supply of others the as focus we've you market where opportunities it understand chain system being cost about well technology were sort a integrating when disagree, technology-enabled the chain what because the talking would than

John Ransom

so XX:XX much. Thanks

Operator

XX:XX for concludes gentlemen, Ladies attending you and Thank this our today's conference. presentation.

disconnect. You may now

Premier (PINC) 1 Feb 222022 Q2 Earnings call transcript