PINC - Earnings call transcript Q3 2022

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Operator

Hello, and welcome to the Premier, Inc. Fiscal 2022 Third Quarter Results and Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, today's event is being recorded. And now I would like to turn the conference over to Angie McCabe. Ms. ahead. go please McCabe,

Angie McCabe

welcome fiscal and call. third to you, XXXX Premier's quarter Thank

Officer. speakers Alkire, our Craig Financial Mike morning Chief President and Our are and Premier's this and CEO; Administrative McKasson,

to Before at remind and we investors.premierinc.com. supplemental this the available accompanying call slides I of Investor get would Relations the you our section earnings started, that release are in conference like our website

the the and our expect this to over Form adjusted where our and non-GAAP We only certain differ our in These business. accompanying you that today contain risk update evaluate release appendix in Mike? to in filings, forward-looking these our of speak materially forward-looking XX-Q I we discussed those recent the remarks Also, non-GAAP supplemental such actual the to to could turn to X-K, Form statements, detailed we SEC, presentation and Our which SEC disclosures. to including safe filings Reconciliations results to are soon. including call for might financial and today. our expect most GAAP from the encourage factor discussed refer of in statements appropriate, are obligation financial with results undertake earnings as or today, the we quarter, free flow our included measures and measures, affect furnish measures other as review no cash soon. financial of Form now our to slides earnings will future which harbor Factors them. Mike XX-K file to Alkire. we

Mike Alkire

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

Supply direct within results toward our continued reflect expected, pandemic normalization level. our of third sourcing our Services the pre-COVID-XX a As segment quarter revenue Chain we

by businesses expected markets basis. adjacent quarter, track quarter. to of in businesses collectively to year-over-year XX% and Our consulting exceed grow this the on the Performance associated compared a on analytics and enterprise agreements are we as markets segment year are Notably, adjacent were revenue our our growth the license fiscal year, with timing with affected results Services prior to continue believe

So items, further achieve steady our our continue are transitory and deliver making businesses positioning growth to growth, couple in objectives. our we business aside from core progress longer-term a of underlying to

we as detail. achieving material perspective, well more affected chain progress by we rising longer-term a supply on in $X.XX toward making updated our based months raw morning, and fiscal as Importantly, X for earnings I'll our comments to of first our This our to will provide adjusted year the financial increased fiscal wrap macro operate guidance and the expectations labor increasing an our we and to year begin XXXX fourth as inflation, $X.XX. up disruption then our the the XXXX our guidance per results, the for we share continue of to as Craig, are some range review as well on brief are full a shortages, highlights environment, objectives. quarter, results macro on costs. in operational From environment

In capacity to nearby the we operating are COVID-XX an China. the lower the States, COVID switching mitigate some abating trucking of are are While at and of to also to disruptions, levels monitoring to has in Ports been and pandemic dock effort in productivity their spread appears cargo shippers lockdowns lack cases ports. be United due of workers closely a reduced.

across increased coming COVID resulting from the testing lockdowns anticipate transportation and we weeks, further China. delays Over

contracted While company, we export and suppliers sourcing manufacture have own Global. goods from this region, that direct our including SXS

of on China years. to for a business our diversifying been have dependence number We reduce

semiconductors, critical global supply supplies a Russia-Ukraine used which and contact an to used certain machines, remain among the countries. our war, pressure the any to base supplier could as other manufacturing sourced already from of overall IVs, supply blood monitor as all two MRI close with further We monitors stress the on in from are in in pacemakers medical items. impact are process constrained which are also We close access keeping supplies, these such potential chain

We of currently aware safety semiconductors seeing are to they we're of and and thus direct need health not shortages care, not patient impacts direct far.

working of approach we'll and shortages proactive avoid any patient continue effort a leadership Therefore, to an position believe supply our we to the take disruptions. partners in suppliers, government potential harm. to potential ahead and and for in However, informed is closely the with a industry warranted stay

the to to proactively addressing availability continue drug In supplies, of focus on we medical addition shortages.

we the of from and despite maintained production. steady due XXX% and list. shortage our the prioritization pharmacy have demand pandemic, programs shifts in manufacturing drugs Administration's XX in spikes for In fact, members of instrumental the vaccine a been drugs Food supply during delisting to have our of Drug Moreover,

suppliers decade. also past nearly to over the incentivize We the enter opportunities market injectable created XX generic that

on of in leading XX health and Exela systems we and drugs drug addition, Pharma support invested list. shortage further our and secure the to reduce Sciences In manufacturing member U.S.-based

reliance of supply Pharmaceuticals for materials. to have and disruption the any medical of the FDA's manufacturing one several we communicated to advancing chain. the security, on the the raw in policy Finally, capabilities risk one and led is past address we've health biggest care shortages. over production chain solutions to geography increase supply years and supplies Also, domestic over

We will chain. geographically a resilient on focus diverse and continue to more supply creating

now cited greatest to of more are group labor and on earnings address this last health quarter's are than platform member some help are an planning, our that critically shortages saves technology challenge. capacity From our Lastly, capabilities, solutions who confirmed impacting decision that real-time as to clinical help quarter time solutions provide our on in and we and support the PINC I'll consulting from we CEOs with we and workflow this, and well AI and delivering to services members. prior as costs call, consulting automation focus markets and technology our the address for members demand positioned XX committee adjacent can money PINC's believe be services Sciences Remitra, help issue. these To particularly authorization. labor this insights enable that We Applied labor review needed and our a CFOs into our resoundingly highlights our shortages. some high discussed businesses mitigate systems advisory technology of

November we First, payments in platform, Day our invoicing with financial the expand digital for and from suppliers. automating track at to Investor road to solutions Remitra, are our our shared automating payments last we and capabilities providers on map

since create that members our to the business chain pressure evolve critically services across supply payments. We an supply can end-to-end entire supply our from efficiencies of the products of labor settlement chain from help continue feeling and important into technology-enabled sourcing process to is are shortages. chain entire solution This now services

differentiator We are and is market seeing interest Remitra $XXX our years remains our to the a in in that X X We annual growing to on in key communicated. as to next revenue suppliers. million believe care million achieve track health strategy Remitra from providers and member $XX previously

addressed. business, to In processing partner in life gap intelligence, natural the in and learning Second, globally with with artificial we PINC PINC life U.S., decision technology has workflow IPMs would care. of processes many PINC the technology step Sciences companies services leading them leverage clinical results innovative is for diagnosis designed our AI, cancer language approximately to process. the labor, administrative natural language our the processing through continue scalable are prior needs AI With sciences patients. to support our and we companies, work be meet largest and system have and to and capabilities pulmonary machine exchange data in IPN, cause is platform collaborating of which a AI's AI's patients including have conditions, the and authorization sciences delay are is patients XXX,XXX can and to to A of that payers this that employers with providers, been behind and help delivery market-leading nodules machine Healthix, the partnership experts pipeline the authorization current health to to potential both AstraZeneca have strong otherwise missed. the prior close regard Applied Early learning lung into engine cancer so automate with information from public idiopathic providers, cancer, identify health the leveraging can the science our burden that payers. care back to PINC relationship or yielded bring solutions underlying which with and

on with to automate innovative every momentum short line long-term minutes. and some opportunities performance. being and as achieve the partnership the up evolve explore and now payer, order our ability Craig continue on believe aspect it from moment consolidating our goals financial In exciting and our foundational deliver fiscal to discussion and turn I continue Our accelerate to we opportunities a begin have summary, positive is payers time used days today, wrap and an of advanced we clinician that the to will From by this our enters to approved technologically a capabilities process. to we help we imaging to we to business. our we advance our believe several capabilities by McKasson to as our to ways We time other new the and operational a track remain customers. strategies value in members enhance greater continue for XXXX, our call will to to over are

Craig McKasson

Thanks, Mike.

net total year, declined level expected, a As the normalized revenue products last of pandemic we pre-COVID-XX third Supply our segment more from to and direct sourcing as business. Services our quarter continue return to we Chain in

affected by our exceed detail XXXX financial on remain third we performance. we achieve communicated quarter Services While XXXX quarter, segment some revised timing believe on fiscal in for performance previously our more of track provide our fiscal the revenue after I'll our guidance Performance guidance. was to reviewing the metrics and

to partially quarter, part revenue of a of was our a of revenue as third a penetration extend GPO $XXX.X a XXXX the by offset net and number administrative members the communicated. small which segment, agreements decrease year as XX% primarily from restructure, the Supply of XXXX compared Services the impact million, of of Performance amend further X%. August their spend, Services quarter third previously and with member net In was revenue Supply did Chain revenue Chain million, fees year and million, increased as from $XXX.X XX%. not X% ago For quarter, that due of Services was segment was decrease our segment total $XX.X ago decrease

well. over prior year grow We at it's track our Investor more And grew than XX%. with Day, non-acute business are the to expectations our the our with business business acute this believe communicated than the as we is on pleased that faster we we performing portfolio, quarter, program, Compared to demand continue to categories include to These GPO growth. strong our Within food labor pre-pandemic categories years. in where few return workforce certain levels ongoing our and challenges the year-over-year continues to high the generate to see next market. staffing due continued which XXXX

pricing revenue equipment Products year supplies our general in agreements diagnostics Performance our consulting state value to Services we with partially total expectation in the enterprise Services consistent our Within products, This prior commodity a fiscal in our health pandemic year for supplies XXXX, or variability increased the with results product the license not continued third both recognition experienced current And revenue quarter. by and prior contract of we may license given and percentage COVID-XX from portfolio technology on continue businesses segment, the of of decrease agreement and less the third demand the is we similar first This that services the we the services segment, what to of we COVID-XX supplies that drive our strengthening delivered. saw a the have enterprise compared is enhancing quarter our across of compared with the and result year. signed to Performance in inflation adoption. as PPE our timing same was to revenue and being personal are testing ago impact typically of year of was a our on and our to quarters significant as producing manage in the expand our is notably, quarter year relative quarter. compared year. focus price protective third experience the quarter increases efforts quarter. quarter business, the our category, compared In for providers of declined on demand ongoing last member our the periodic grow performance of and with in offset this primarily period recent the and primarily for fiscal XX% did as and analytics sales to consulting markets other in declined quarter demand In in due prior which recognized adjacent the the result is capabilities third care quarter the for Notably, results. revenue continue the during material year with normalization the

with We capabilities focused, clinically performance have few our discussed markets and business, and integrated in to business. Health, of in larger scale, significantly that adjacent business Mike performance for delivers businesses help technology-enabled this customers. Health's enhanced our remarks, would model drive we which talent deliver adjacent Contigo year-to-date. We're his is and Contigo like a our direct-to-employer to now a solutions highlight very pleased our more I improvement markets

ramp gaining to further consistent its our health services. plan third-party in traction it As administration expectations, nicely, with continues

of customers increasingly services our resumes, travel Centers and accessing their for abates associates. pandemic Health the as Excellence addition, employer Contigo In are

earlier prior Chain remarks, from Supply Performance fiscal factors. in GAAP from business. primarily our million our partially XX% year-over-year million to decreased we adjusted said believe due increase same was in the our net fees by year following, of in on of of $XXX.X $XXX markets income the Adjusted to slight as sourcing EBITDA $XX.X And decreased X% track quarter-over-quarter, his two ago offset profitability, With exceed respect was a the million As growth of was million a direct primarily the costs in administrative adjusted flat quarter, a quarter. adjacent quarter quarter EBITDA Mike segment that third to of revenue $XX.X EBITDA are expectation in to businesses Services result freight XXXX. Services increased the net year relatively due for

development XXXX operational for administrative cash general million related adjacent decrease businesses. as aforementioned to First, mainly the growth current software flow XX, resulting PPE other initiatives capitalized year labor, meet of buildup associated $XX.X primarily Health compared selling, for months support fee and cash headcount earnings payments revenue increase normalized the and higher our year and certain markets partially to adjusted the inventory approximately to decreased EBITDA well a XX% a and with investments decrease to XXXX, business, as March to markets COVID-XX in XX% in due year. a or of of decrease was share ended in offshore higher demand Contigo million with in direct cash XX% for X months a compared lower perspective, to $XX Free in the XX, to was a outflows income an adjacent property increase $XXX.X adjusted related of quarter. offset the period share restructure. from compared per the our pandemic. in third operations of growth result for lower cash by with in $XXX.X to in due Compared The in Remitra revenue; of was the million adjusted flows the year members effective the second, The this as same period year was year expense, efforts, support net the prior the with was due our decreased a as XXXX, from the purchases from in changes ago year additional outlays sourcing administrative to $X.XX March the compared decrease From and adjusted increase to impact August from with payments prior in year $XXX.X our in liquidity result businesses. flows prior to quarter, factors and and operations, supplies and EBITDA resulting the increase tax X for million equipment quarter and received ended same affected with sheet that for a the and primarily year mainly cash in our This rate ago. the performance prior million to cash current balance

in balance and of our We adjusted million EBITDA. For fiscal with XXXX. on cash XX, June free to quarter taking compared of cash $XXX.X to ended XX% $XXX revolving XX, billion focus organic facility, targeting XXXX, $XXX.X the growth we XXXX, an totaled at with $XX offerings now our capital $X to deployment, marketplace. million equivalents we repaid X-year investing which million regard With a in at XX% outstanding the Cash or on subsequently April. continue capabilities million approximate complement expect balanced March to flow acquisitions approach existing and of to strengthen, credit by we and our differentiate enhance in

to capital continue stockholders. to also return We our

X total million, repurchase common a fiscal XX, the stock our program. completing ended shares our During months $XXX XXXX, repurchased million approximately XXXX for of March we thereby stock X.X of

totaling We June per XX, of also Directors a $XX.X stockholders share to our payable stockholders paid declared Board dividend to $X.XX as June of of of million. X. Recently, XXXX, dividends record on

fiscal strong a execute guidance flow to sheet. we as we to guidance raising respect share end per adjusted we $X.XX billion. $XXX fiscal million, adjusted to a full our are to remainder maintain to we In increase performance revenue, previously range range generate the $X.XX cash we of a revenue guidance. Chain to to of for revenue range we are $XXX to our This this to year we metrics, raising we X With wrap our to Services guidance and and our the begin reflects are than range billion expected. increasing Turning Based up $X.XX balance earnings guidance EBITDA, year, our for for summary, products segment are outlook billion XXXX free on of the tightening flexible $X.XX billion. are the year-to-date $X.XX increasing of of Supply to months following higher million a total increasing guidance this year, continue low to and $X.XX. Therefore, our our primarily strategy, net and for

digits and fiscal beyond for the impact the are adjusted for to we COVID-XX time questions. net our track multi-year mid single XXXX annual total adjusted targeted open compound look of morning. EBITDA and earnings high for up per the we remain We'll pandemic, now and for of on for growth rates this your revenue, share. Thank committed adjusted to you we As believe achieving call

Operator

the Percher [Operator Research. from question with comes Yes. Nephron you. Eric Instructions] Thank And first

Eric Percher

items, of and Thank you you fee the I end. guidance weighing normalization, is the year really into a will mentioning thought far on product long-term And of known half the the couple half year? here fiscal continue Craig, how of you. to on? this first second some you headwinds the know fluctuations, fairly I then admin 'XX. could including those of year at timing next factors my mentioned much of getting kind you're the or appreciate tailwinds? And speak of maybe And

Craig McKasson

the This Eric. Sure, question. that us down contract baseline reset from the Thanks most GPO for I'll move the from about kind is talked really we back where start the part grow of that and to half is for year is standpoint, this fact again. in of a are Craig. we've now and behind the the

we've year on basis. Services will but as be see we'll our of talked of need our have on of believe of normalize take shortages. a the that when know, From most sort We base something should - a the help The on to components, of and the potential then that evaluate. they a variability establish we for sourcing an And continued really tied about, direct as create to is that enable and back perspective, XXXX challenges the processes have down. then to pandemic. on believe growing continue fiscal impact more have of we headwind And into kind normalized basis and we haven't go off next So long thing quarterly pre-pandemic the forward to when we labor an we we've we this things do part, guidance we'll labor technology manual keep to the off for that the of costly in run, ability that fiscal services move the will to periodic to seen is a that, earnings Performance that by call. their impact levels base to them automate to while have or some on eliminate much eye directly only you end of

Operator

And with Thank our you. from [Operator Rice Credit question comes A.J. Suisse. next Instructions]

A.J. Rice

is Hi, everybody. And noise. there background I apologize if

in quarter you potential year. One surge a we you the was was obviously a the see Obviously, of in And to activity with provide in monitoring might sense any of as were deferrals, of it. upside as that volume of sort things for some were year, the seeing saw that boost update? some that you that later some Do January next mentioned late deferred but think as source surge we that last of had continued. term three back the came Do may short you you still there's have quarters you? the

Craig McKasson

if is to Mike, I'll that. be like. you'd Craig. happy can add you This take color, some

utilization. think be that I acuity to I broader impact be of But getting to in is are levels. back most but the of executives, continue demand, But what talked nature, that can out. the all across back. utilization, say see the that to that and get care for would historical you'll the does time, would they're big continuing there, if the to there of to of overall, pent-up are taking health of clearly, we're as a little it areas, and coming with wouldn't is some challenges ebb returning things pent-up So would the ramp-up a of some although affecting deferrals that It episodes pandemic scheduled coming levels, things utilization acute the to I months. care say due continue see health expect sort and we've depending part surgeries, various there for that's flow regional and to pushed over lower bit on do out demand normalized I be through most we labor that our try place can continue part

Mike Alkire

Mike. And this is

of months, been the our one-on-one because obviously, the forward and of COVID. have that number Craig last a - that, that happened do having over not to Board balance advisory labor. number of to procedures our of with The committee meeting some last the think health and the of with members. potential over may I obviously and conversations of months couple systems the weeks tell meeting Board have really I'll with or looking our is you, I are So the

So I of of little number think the that growth that our going those terms have the really don't understanding to health mute of staff to a degree But that's of in do we'll and systems procedures and here that lot the weeks. lot the kinds growth sort and at going a things, there's dynamics - be over sort it's early to a of would those next potentially have forward. better and a bit the of play, of we'll headwind

A.J. Rice

certain guess other Okay. areas, Maybe take changed has sourcing. sourcing to discussion that's of moving been thing near-shore actually stands some in to just sourcing one. to versus supply domestic your do looking I hope today? little as where for was a one much diversifying while now chain where key hard And you a understand out? how Obviously, couple it the years the Great. of has a it is topic pre-pandemic

Mike Alkire

question. great Yeah,

bolus Asian of China countries, overdependence our was been recently. that. pandemic such So the will out other reasonable on you, some excited even Southeast and broke it because an have sourcing about pandemic, country to really of I'll a really, just in think the We We're to Southeast one supplies manufacturing on provide tell there ground a country costs. Asian and obviously, diversifying the prior just into add, literally PPE in really we we just nice

on to regional that to So level. a we create want resiliency continue

So to we'll that. do continue

drugs I the that in made for for think Honeywell. with the you, I'll goes, have build future, we've The those we domestic investments as far face want we've and The made that Prestige masks our capabilities partnerships gowns foreseeable to the investments know investments in Ameritech. isolation gloves with DeRoyal. we've tell with we with As you out. generic obviously, made for Exela

looking We to products. to that our those we see will be as for capabilities additional diversify market opportunities domestic into produce

As automated, and to eye the where of manufacturing impact highly on I the the have going products cost spoken past, it's towards profound labor that product. in really an a be the isn't are about pharmaceuticals

a a way is the do on we third a it cost try third a and And a shore third, we a depending level of we'll as as as to supply like in create countries, third best resiliency, describe labor possible strategically, want as third, category. the to the much members. so chain low that, So think like for domestically. third, near We'd to right the balance to we in our prices with well

A.J. Rice

Okay. Great. Thanks a lot.’

Operator

Thank the you. And from Canaccord with next Genuity. question Close Richard comes

Richard Close

you more thanks you with would And business as your bit? to little to help question. about potential 'XX? the respect a you're Mike little your me. clients you Yeah, into it a over what curious of for growing think detail some issues there bit to growth how could little issues? Excuse a labor customers. for fiscal doing a the Craig, that can major Obviously, if pressures factor labor could mentioned now. that's as had bit go or go on issue right And I'm risk into gauge you labor then a just the we it just But

Mike Alkire

Thanks, any Richard, I'll and add this, hit color. please Craig,

of broader days just X.X health there's approximately working to So clinicians full many think every exacerbates that back openings. we've culminations a clinician resulted - a of working a that at travel our little time were are from number the a as been about, our bit some a issue in and we that systems. and What significant if a work led burn we Richard, of was obviously just maybe out doing the in care standpoint, either talking or, to shortage. it labor put among now really just look which hired, into COVID, week, perspective, from for clinicians step a I early cases, retiring that's couple either one of job had

had staff we got tripled. And to that we've almost fill. the huge that gap a Also, know traveling so for know we wages

you of the Now little I that for seeing But an we clinician. more than a would tell has come bit, were doubled. still hourly a rate tripling down it's traveling

are of the So obviously, that care significant those are systems. health the issues impacting, margins

obviously manage a staff create or their we're number work to trying really so And their manage effectively. their more to staff help of to capabilities with work them

of access short things. them obviously, with and very, And technology very help our the tell leveraging kinds really those close so really I'll get labor incredible specifically. term, In about the the short technology, about term, labor. U.S. is the gaps the middle We we of intent around and it's to designed can our how efficiencies you, we've some in and to drive it's think

opportunity automated health that's cases, if that that a that. have more to authorization, clinical to to do our a staff looking of at incredible care can be So And be prior that. work at - with notes charts, we're what we the technology have early enablement think authorized We are our at automate huge in seeing into And systems for procedure. they're the and staff and that our you think our that they're you opportunity. ability about looking determining that clinical line to pre-approved us least accuracy technologically going to the products to redeploy for either oftentimes, or

doesn't bit platform, spoke work. If if it interesting. to then that time matter invoice to e-payables error little I how $XXX Remitra, do opening this and a our where Number to same there's Again, looking that machine two, and there's unstructured is well, an error which one. for and HCC So people to you really the learning, area obviously there going number We doing data. offset of to finally, error. all down in comments, about as to another a able $XX,XXX. - that's codes takes It but launching rolling our chart at and capability be our it's And has do and kinds or error technology e-invoicing a amount an the been is coding work the why is using that really fix of we've out and reviews have need track my an that believe things. labor lot that lot of the of those

efficiencies to And we're be whole by so to redeployed. process we that believe health and systems that care labor a allow bring of our going also automating totally to lot that

of Richard. this, The So about you're aware that's well how it. thing is - kind thinking last obviously, we're of and

[ph] We most improvement ensure services systems that spinout help and out that, business plans utilized later performance the building that's have our care to and efficiently. being is really working labor health advisory with to optimize the an labor them engagements

not So additional we're on, the color. sure you any Craig, areas focused if I'm have those are

Craig McKasson

members side chain with the thanks in when that only Yeah. business, contracts get work chain I we sure of Mike Services color in the providers supply that the staff But really to add, on The on Performance the have make side. on our access staffing would marketplace focused need supply we it. Mike, temporary the is GPOs, to and side,

in we And assistance the that's be mentioned I growth, my of supply capabilities, then co-management supply also actually that staff an health so seeing in And is comments. continued some and happening augment systems, and as care need to as where marketplace. chain chain what's on in we have are an focused element and of given area we're our the our growth, that providers some health

Richard Close

that? was do out do I of SaaS of follow-up there's could But curious enterprise Okay. know on that take at lumpiness and could if I any models. you. offer is guys I the way If a sort the SaaS from license a you that just way the can there any timing, you ask that transition to Thank you model Craig, all with equation?

Craig McKasson

they good vast the It's technology Performance our to revenue of structuring with health they the capitalize and how hold expense. costs Richard. the versus continues want provider, their Services you Yeah. be some that In contract cases, technology. want host to really agreement question, the of to be SaaS-based actually and a ongoing tell can majority they I'll licensed having gets to a is What basis so care it more of acquisition

clearly, at consistency. way, effective more times, close line like. really that where know, time we and the have meet to you to a you to to difficult seamless So do exactly on would to try process the ways it's about prefer the we happenings through But just they we're going we evaluate But when sales we'll continue are. customer think the most in

Richard Close

Thank Yeah. you.

Mike Alkire

Thank you, Richard.

Operator

Barclays. Thank you. Valiquette comes the And with from Steven next question

Steven Valiquette

thanks. Great, Good morning, All right. everybody.

So a here. couple things of

two comments around channel guess First, questions just your helpful. I on interrelated I that. the were have pharmaceutical supply

the curious, injectable setting. due just And those manufacturing due any seeing in for of you're supply to perhaps feedback signs some I'm secondarily, are the extent side? variable? generic inflation, First, shortages getting levels from the supply on are higher then the shortages any to there maybe notable used either brand elevated generic that on more just costs, or Thanks. price that hospital of generic drugs to you is if it side manufacturers or drug

Mike Alkire

Yeah. Thanks, Steven.

on quick, real the national drug So shortage.

been a know, passionate you years. number for something incredibly this we've is about As of

short we the that is across where - what are primarily, we chronically generic obviously the focus have in so drugs focus Steven, supply. we the an on, acute on portfolio, entire really but focus And is

but have the know if So we imbalance then price. supply markets eliminated, that potentially then that obviously we goes that are goes in drug have to a product generic, and that because market obviously, a savings, always you we you that when there's ensure there's that's huge generic have that and have suppliers balance up healthy

got sort And so those if it of you approach, of a drug through work all is, of shortages. to net the we've really will, three-pronged

to market. production our there drug and or have we working generic getting expand into pharmaceutical one, to companies capital, So which the deploy the program, really to manufacturers focus ProvideGx create to partnerships was with expand

for really, their to And us systems double manage that, continue on. We down health that create so something healthier really which critical that generic markets, we to help our that's to will drug is supply. want believe

buying integrate those with to to are to where Exela actually that drugs. very the part us that's of the there expand capability products. ability standardization up we those we we generic lot markets. support they're investment those manufacture our the to to to healthier flexibility with do continue want to short to we're sure do ingredients of Secondly, want makes to build active how it supply that We organizations us because as to what deploy then And sense the ones great on products buying that standard and the members more attempting make or to continue in and new our flexibility systems, then to platform, And processes of in drive health hit a or have want well to whole or think pharmaceutical as of in and to or most gives of our keep it the we vertically that terms finally, drugs parcel behalf solution. strong produce well more supply gives produce of and either more work just because that amount we want APIs to to help the

going that's continued to be So focus. the

inflation, As much as one things building been keep manage, again, we those to abated. capabilities inflation just keeping our our keep out and and we've to as it's building strategies resiliency far of keep in we'll check. that continue But that possible, as

Steven Valiquette

helps Thanks. or the of or there's either like that price back trends over past any inflection shortages fine it And were months none the there other. if couple that's just one is, swung kind maybe quick maybe towards either generic - follow-up too, way has in the accelerated hear been has there inflation. of there were the to deflation If only have -

Mike Alkire

treat product I of Yes. No, appreciate obviously, I were intubated huge exception that would [ph] there utilization lot drugs a drugs folks describe it tell the way increase We in needed But to you is those fairly obviously, COVID. for the be patients. that of of some it. needed significant lines normal I - with saw And was some would so COVID during a to pretty the

through that. far, so And we've been able manage to

Steven Valiquette

Okay, great. Thanks.

Operator

from America next Lynch. Cherny Merrill with comes the Bank Michael question And you. Thank of

Michael Cherny

Thanks so go I are relative my asked building strategic various to morning. far. to in a you're back all your number that share the of business details for Richard a platforms Performance to I interesting of the degrees Services dynamics question share garnering want already. Obviously, Good think broadly. of

will about what's much into of of evolve it in-year time some As sales you've conversion relative long-term views you that built what think cetera, market? out of sold platforms think other Contigo, traditionally the you et how trajectory, of versus revenue to are on of your based how Remitra, about the built the to some being over that And do growth? in-period

Mike Alkire

Yeah.

our drive performance enterprise our please health Mike. any systems add But So color. focus - start, to leverage SaaS-based license our and improvement. to right? We I'll deals really really it's this help our is Craig, is a care balance, technology

to continuing do we're so And that.

focusing area standardization, for health with focus strong at are of We care standardizing the and new focused on those about or provided. models ways systems a the payers not labor. I've through to being way They're been is on new looking Obviously, generate in kinds of have and in our partner often much looking things care market. payers I'll clinical pipeline. ways did revenue to times you, become One terms talking is everything I on very tell

absolutely then going that kinds term the those the to that, And the around performance authorization core those the something natural at but know supporting to actually to which that's to not we of differentiating think some his other about revenues from a needs health grow processes, will opportunity. from you technology our evidence obviously, have sorry, know really, our improvement models. And we is be going spoke as be moving only these things. systems their health long to patients think And supporting efficient technology we life HCC using or real-world in along opening members Craig we know doing I'm prior then organizations capabilities that in sciences, really systems, and care about described those learning we that out is a meeting new perform sciences we're opportunity our all we be, most machine delivery We finally, I and sub-segments. processing life leverage standpoint. advanced from the care our thinking our the as care So little for to scoring of those And helping we then our way way, in what's Contigo, sciences capabilities, enablement terms see huge processes also know, happening, want language we unique into profit, a the businesses to of because building point we identify - terms who in make businesses and think, of to comments on in as really they're have those care of of sure we terms segments technology, the are life our that bit functions. and

it's about me, So about excited really to it. balance. all But all of we're

Craig McKasson

Mike kind mid then of XX% and that about, higher then a support November, growing and to and of single really And add, much to Yeah. last the would Contigo digit growth provider is our at this growth those balance at business life adjacent employers clinical decision, XX% sciences, about the talked only about, of a Michael, we - talked markets drive those Mike's core rate leveraging working [ph]. payers talking capabilities Performance it through sort Day with color the in in Services that but I Investor is of

Michael Cherny

member change past owners should Got think at How on a ongoing previous retention? where the we different we years operating owners almost period will large we up? it. now expect structure. of the member point same renewing lines, And announcement then especially you're of of various X a you've been GPO will where in Is all the renewals there versus come all essentially if along have And cadence those different about after just a get I we previously that business, of that the those when the the time? your as on customers and to reset follow-up could do change, should

Mike Alkire

Yeah.

Craig. ahead, go Craig, So

Craig McKasson

just renewed. - - so now historical all going Mike, been owners their member have are I But sorry, of the in. you was - can jump to contracts

time the year at about X, X talked those of X, the were restructuring, we As agreements.

in beginning XXXX. fiscal our of So all - and fiscal is of the come our up business the majority of our will contracted

contract So under across a portfolio - of restructuring. the we that periods customers at you have are look a throughout We renew number as little remaining. our expect, did to various times that creating have continue years then both would we'll of non-acute bit a that We through over time, we, waterfall. more regular of contract And and at other acute

Michael Cherny

Thank you. Got it.

Operator

Jessica Piper Thank question from next the you. Tassan And comes Sandler. with

Jessica Tassan

for Thank the Hi. you taking question.

to just us when using build percent? maybe how kind how what could of just licenses enterprise contracts long you your the and do these know And how tend be interested or members of understand many if solution are - Remitra then currently Thanks. GPO is help that are So just enterprise for? to

Mike Alkire

by And congratulations. Jessica, way, the

Remitra first. hit I'll So

in interested care the large reasons very, of very our of we systems. health underlying so number was the one So in embedded of were that platform already IDS a

our And now. percentage so at that of at look the tell you if I technology that you, using is most think I'll way health important a fully, that high significant we are had systems look them - been

to and have adding program We platform. that been and functionality obviously are that

process in do to more so out capabilities of we're the that. building And

already why key our we systems. because acquired one reasons So the health it of the actually IDS had they in of that penetration was is

network and platform. health really us about systems of where network comfort, is goes. technologies, you suppliers that comfort expand gives doing we're continue obviously, advanced payments. care to but out excited more with invoicing more to know that So our transact obviously to our our build easily transact - and goal there And interest that And it easily of to using

you answer if remember, So excited we're last really, Craig, it. Jessica, I forgot again, about the can that. And question. you

Craig McKasson

question our second and generally, contracts. are those was analytics of kind license X-year and time enterprise Services the of agreements length Performance Yes, - the the

Jessica Tassan

Got it. then follow-up. And maybe That's you. just a helpful. Thank

on domestically in XXXX. comment purchase NXX manufactured hospitals CMS to think incentivize starting how invited to I

views And the meaningful next just a to starting potential do reaccelerate business? have potentially you. the any could tailwind year? be adjustment Thank direct So you payment on that sourcing

Mike Alkire

well aware of we're Obviously, Yeah. that.

significant to think tailwind there's tell not. in think that. I have now, with early be been We or Right not conversations to it's too a going we or whether

Jessica Tassan

it. you. Got Thank

Mike Alkire

you. Thank

Operator

with Thank question Jack And Wallace from comes Guggenheim. the next you.

Jack Wallace

chain Thanks. through puts million. to been the could the for the Is the the side as admin has that the job, $XX pretty of color off, throughout particularly give business year. go the disruption pretty still net supply guidance It of implied higher of little fourth Hey, us guys. quarter, to takes the stable quarter the wide there Thanks and Really of Can on range, looks you fees guide a on like end of question end year. a [ph] and the us the for at up taking kind the some going what good on roll you this the cause just some the and range? global A on. for managing on question. well as a

Craig McKasson

Yeah. Thanks question, Jack. This Craig. for the is

little the either been as precisely is been challenges this the think and of from earlier. services sourcing utilization the hospitals labor thing business happening throughout kind about resumption difficult what's you've the to year, to normalization side predict of direct a overall on and seen I of that's or we as impacts due happening the then that's talked

confident an mask not without keeping flying of of the in hospitalizations guidance away kind those both affecting on could too We're the direct there point, sourcing any mask, so that of while upper updated things eye And that we're of in it's extent If the see we push That from the sort with was end people this quarter. that us eye all range. of demand to and us keeping moving of but at in sort the fourth much, one on, just that. the country we the we're for through mandates, provided to things. an reason, GPO some come help that to broadly

was And health the there of any across extent utilization what lower that cause of so that's affect end. could kind would at the care us to any surge sort that providers, be to

of takes So we're that the the can close chain to continuing the business as cause that sort to that's is. XXXX. in a trying fiscal in confidence But and of supply it stable puts of out we way perform terms to prudent vary be

Jack Wallace

helpful. all you me. so much. Thank That's from That's it. Got

Mike Alkire

Thank you.

Operator

Davis SVB comes Securities. Thank from you. And the next Stephanie with question

Stephanie Davis

appetite me had on prioritize? given environment, How contracts macro? the for shifting you Are going we the is whole Hi, question broader just guys. seeing of think large Thank given utilization, hospital about and what's any you drop. labor areas I you versus should with on in. quick for the that taking incremental macro demand drag areas demand a

Mike Alkire

is Mike. Hey, Stephanie, this

are So the question. tell help I take will, I services that we and more them obviously, right I products quiver, health labor us cost struggling can to will being And able you it's now, think thereby to that great really of efficient. a their have a you, if there be and with in margins. think systems

as open, think obviously, with I to differently. they're that been really they all I've happening a be and those that opposed - to systems doing efficiently a looking again, what engaging need to costs around to of balance kinds things, cost. utilizing even ensure care standpoint how are the dialogue to of potentially and ways we're those also I spending standardizing fixed things lot that possible, and with say, as pressure from time things. I will having create talking about think variable as us kind clinicians for those are think labor of And and and more very I health

sort there's kind discussing with that so these lot And of there just dealing new everybody normal with, that this is that labor given with of is them a that opportunity we're of issues.

Stephanie Davis

greater is demand chain follow-up think disruption business? supply the a this your whatnot, your would supply of continues as as Services that, of And and or for and Performance to backdrop business next seeing chain year you labor

Mike Alkire

terms the do systems. health where we the in there's That's our hit to Yeah. co-management of nail our opportunity think hope. the head Craig on with

XX our partnership. we created helping and access Long helping labor what which some tell with the is the we a venture could side, believe step to going easily health also is our is increases partnership we the reason technology systems potentially so if we in get - get health potentially didn't access did pressure I there our as is issues And getting associated to GAVS and with we that will have joint as called care care, that provide [ph] more there you, really from and technology services. it believe than labor, to

as looking we're over capability next the couple well. that So forward to years of deploying also

Stephanie Davis

Awesome. Thank you.

Mike Alkire

Thank you.

Operator

itself. the you that Thank attending well Thank today's concludes question-and-answer much both session you. the for call so as as presentation. And

You may lines. now disconnect your

Premier (PINC) 3 May 222022 Q3 Earnings call transcript