Form 8-K
false 0001577916 0001577916 2020-09-09 2020-09-09

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): September 9, 2020

 

 

Premier, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

Delaware   001-36092   35-2477140
(State or Other Jurisdiction of
Incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

13034 Ballantyne Corporate Place

Charlotte, NC 28277

(Address of Principal Executive Offices) (Zip Code)

(704) 357-0022

(Registrant’s Telephone Number, Including Area Code)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

Class A Common Stock, $0.01 Par Value   PINC   NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2). Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 


Item 7.01. Regulation FD Disclosure.

Premier, Inc. (the “Company”) is scheduled to present at the Baird 2020 Global Healthcare Conference in New York, New York on Wednesday, September 9, 2020 at 10:15 a.m. Eastern Time. The presentation will be audio webcast live through the investor relations page on the Company’s website at investors.premierinc.com, where presentation slides also will be made available. A webcast replay will be archived on the Company’s website for approximately 90 days.

Pursuant to Regulation FD, the Company hereby furnishes the presentation materials attached as Exhibit 99.1 to this Current Report on Form 8-K, which information is incorporated into this Item 7.01 by this reference.

The information in this Current Report on Form 8-K under this Item 7.01, as well as Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such a filing. The furnishing of this report is not intended to constitute a determination by the registrant that the information is material or that the dissemination of the information is required by Regulation FD.

The information included in this Current Report on Form 8-K and any exhibits hereto will not be deemed an admission as to the materiality of any such information.

Use and Definition of Non-GAAP Financial Measures

The financial data contained in the presentation materials attached hereto as Exhibit 99.1 or referred to during the webcast may include financial measures that are not calculated in accordance with generally accepted accounting principles (“Non-GAAP”), including EBITDA, Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted Fully Distributed Net Income, Adjusted Fully Distributed Earnings per Share and Free Cash Flow, each as defined below.

The Company defines EBITDA as net income before income or loss from discontinued operations, net of tax, interest and investment income, net, income tax expense, depreciation and amortization and amortization of purchased intangible assets. The Company defines Adjusted EBITDA as EBITDA before merger and acquisition related expenses and non-recurring, non-cash or non-operating items and including equity in net income of unconsolidated affiliates. For all Non-GAAP financial measures, strategic and financial restructuring expenses. Non-operating items include gains or losses on the disposal of assets and interest and investment income or expense.

The Company defines Segment Adjusted EBITDA as the segment’s net revenue less cost of revenue and operating expenses directly attributable to the segment, excluding depreciation and amortization, amortization of purchased intangible assets, merger and acquisition related expenses and non-recurring or non-cash items, and including equity in net income of unconsolidated affiliates. Operating expenses directly attributable to the segment include expenses associated with sales and marketing, general and administrative, and product development activities specific to the operation of each segment. General and administrative corporate expenses that are not specific to a particular segment are not included in the calculation of Segment Adjusted EBITDA. Segment Adjusted EBITDA also excludes any income and expense that has been classified as discontinued operations.

The Company defines Adjusted Fully Distributed Net Income as net income attributable to the Company (i) excluding income or loss from discontinued operations, net, (ii) excluding income tax expense, (iii) excluding the impact of adjustment of redeemable limited partners’ capital to redemption amount, (iv) excluding the effect of non-recurring and non-cash items, (v) assuming the exchange of all the Class B common units for shares of Class A common stock, which results in the elimination of non-controlling interest in Premier Healthcare Alliance, L.P., and (vi) reflecting an adjustment for income tax expense on adjusted fully distributed net income before income taxes at the Company’s estimated effective income tax rate. The Company defines Adjusted Fully Distributed Earnings per Share as Adjusted Fully Distributed Net Income divided by diluted weighted average shares.

The Company defines Free Cash Flow as net cash provided by operating activities from continuing operations less distributions and tax receivable agreement payments to limited partners and purchases of property and equipment. Free Cash Flow does not represent discretionary cash available for spending as it excludes certain contractual obligations such as debt repayments.

Adjusted EBITDA and Free Cash Flow are supplemental financial measures used by the Company and by external users of its financial statements and are considered to be indicators of the operational strength and performance of


the Company’s business. Adjusted EBITDA and Free Cash Flow measures allow the Company to assess its performance without regard to financing methods and capital structure and without the impact of other matters that the Company does not consider indicative of the operating performance of its business. More specifically, Segment Adjusted EBITDA is the primary earnings measure the Company uses to evaluate the performance of its business segments.

The Company uses Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted Fully Distributed Net Income and Adjusted Fully Distributed Earnings per Share to facilitate a comparison of its operating performance on a consistent basis from period to period that, when viewed in combination with the Company’s results prepared in accordance with GAAP, provides a more complete understanding of factors and trends affecting its business. The Company believes Adjusted EBITDA and Segment Adjusted EBITDA assist its board of directors, management and investors in comparing the Company’s operating performance on a consistent basis from period to period because they remove the impact of earnings elements attributable to the Company’s asset base (primarily depreciation and amortization), certain items outside the control of its management team, e.g., taxes, other non-cash items (such as impairment of intangible assets, purchase accounting adjustments and stock-based compensation), non-recurring items (such as strategic and financial restructuring expenses) and income and expense that has been classified as discontinued operations from the Company’s operating results. The Company believes Adjusted Fully Distributed Net Income and Adjusted Fully Distributed Earnings per Share assist its board of directors, management and investors in comparing its net income and earnings per share on a consistent basis from period to period because these measures remove non-cash (such as impairment of intangible assets, purchase accounting adjustments and stock-based compensation) and non-recurring items (such as strategic and financial restructuring expenses), and eliminate the variability of non-controlling interest that results from member owner exchanges of Class B common units for shares of Class A common stock. The Company believes Free Cash Flow is an important measure because it represents the cash that the Company generates after payment of tax distributions to limited partners and capital investment to maintain existing products and services and ongoing business operations, as well as development of new and upgraded products and services to support future growth. Free Cash Flow allows the Company to enhance stockholder value through acquisitions, partnerships, joint ventures, investments in related businesses and debt reduction.

Despite the importance of these Non-GAAP financial measures in analyzing the Company’s business, determining compliance with certain financial covenants in its Credit Facility, measuring and determining incentive compensation and evaluating its operating performance relative to competitors, EBITDA, Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted Fully Distributed Net Income, Adjusted Fully Distributed Earnings per Share and Free Cash Flow are not measurements of financial performance under GAAP, may have limitations as analytical tools and should not be considered in isolation from, or as an alternative to, net income, net cash provided by operating activities, or any other measure of the Company’s performance derived in accordance with GAAP.

Some of the limitations of the EBITDA, Adjusted EBITDA and Segment Adjusted EBITDA measures include that they do not reflect: the Company’s capital expenditures or its future requirements for capital expenditures or contractual commitments; changes in, or cash requirements for, its working capital needs; the interest expense or the cash requirements to service interest or principal payments under its Credit Facility; income tax payments the Company is required to make; and any cash requirements for replacements of assets being depreciated or amortized.

In addition, EBITDA, Adjusted EBITDA, Segment Adjusted EBITDA and Free Cash Flow are not measures of liquidity under GAAP, or otherwise, and are not alternatives to cash flows from operating activities. Some of the limitations of the Adjusted Fully Distributed Net Income and Adjusted Fully Distributed Earnings per Share measures are that they do not reflect income tax expense or income tax payments the Company is required to make. In addition, Adjusted Fully Distributed Net Income and Adjusted Fully Distributed Earnings per Share are not measures of profitability under GAAP.

Non-recurring and non-cash items excluded in the Company’s calculation of Adjusted EBITDA, Segment Adjusted EBITDA and Adjusted Fully Distributed Net Income consist of stock-based compensation, acquisition and disposition related expenses, remeasurement of TRA liabilities, loss on disposal of long-lived assets, gain or loss on FFF put and call rights, income and expense that has been classified as discontinued operations and other expense.

The Company urges investors to review the reconciliation of Non-GAAP financial measures that may be included in the presentation attached as Exhibit 99.1 to this Form 8-K or referred to in the webcast in the Company’s Annual Report on Form 10-K for the year ended June 30, 2020 (“Form 10-K”), filed with the United States Securities and Exchange Commission (the “SEC”). To properly and prudently evaluate the Company’s business, investors should review (i) the audited consolidated financial statements and related notes included in the Form 10-K and (ii) the future periodic and current reports the Company files with the SEC, and investors should not rely on any single


financial measure to evaluate the Company’s business. In addition, because the EBITDA, Adjusted EBITDA, Segment Adjusted EBITDA, Adjusted Fully Distributed Net Income, Adjusted Fully Distributed Earnings per Share and Free Cash Flow measures are susceptible to varying calculations, such Non-GAAP financial measures, as presented in the presentation materials, may differ from, and may therefore not be comparable to, similarly titled measures used by other companies.

Forward-Looking Statements

Statements made in the presentation materials attached hereto as Exhibit 99.1 that are not statements of historical or current facts, including, but not limited to, those related to expected healthcare trends, Premier’s growth opportunities, strategic priorities to advance Premier’s business, the matters discussed on the “A Compelling Value Proposition” slide, the expected financial and operational impacts of the COVID-19 pandemic, the expected financial performance and tax impact and benefits from our recent restructuring, matters regarding fiscal 2021 outlook and guidance, and the expected fiscal 2022 growth rates for consolidated net revenue, adjusted EBITDA and adjusted EPS, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. Accordingly, readers should not place undue reliance on any forward looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in the conditional or future tenses or that include terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. Forward-looking statements may include comments as to the Company’s beliefs and expectations as to future financial performance, events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside the Company’s control. More information on potential factors that could affect the Company’s financial results is included from time to time in the “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of the Company’s periodic and current filings with the SEC and made available on the Company’s website at investors.premierinc.com. Forward looking statements speak only as of the date they are made, and the Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events that occur after that date, or otherwise.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

 

99.1    Premier, Inc. Presentation Materials, dated September 9, 2020
104    Cover Page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document)


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Premier, Inc.
By:  

/s/ Susan D. DeVore

  Name:   Susan D. DeVore
  Title:   Chief Executive Officer

Date: September 9, 2020

EX-99.1

Slide 1

Baird 2020 Global Healthcare Conference Susan DeVore Chief Executive Officer September 9, 2020 Exhibit 99.1


Slide 2

Forward-looking Statements and Non-GAAP Financial Measures Forward-looking statements – Statements made in this presentation and the accompanying webcast that are not statements of historical or current facts, such as those related to expected healthcare trends, Premier’s growth opportunities, strategic priorities to advance Premier’s business, the matters discussed on the “A Compelling Value Proposition” slide, the expected financial and operational impacts of the COVID-19 pandemic, the expected financial performance and tax impact and benefits from our recent restructuring, matters regarding fiscal 2021 outlook and guidance, and the expected fiscal 2022 growth rates for consolidated net revenue, adjusted EBITDA and adjusted EPS are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of Premier to be materially different from historical results or from any future results or projections expressed or implied by such forward-looking statements. Accordingly, readers should not place undue reliance on any forward-looking statements. In addition to statements that explicitly describe such risks and uncertainties, readers are urged to consider statements in the conditional or future tenses or that include terms such as “believes,” “belief,” “expects,” “estimates,” “intends,” “anticipates” or “plans” to be uncertain and forward-looking. Forward-looking statements may include comments as to Premier’s beliefs and expectations as to future events and trends affecting its business and are necessarily subject to uncertainties, many of which are outside Premier’s control. More information on potential factors that could affect Premier’s financial results is included from time to time in the “Cautionary Note Regarding Forward-Looking Statements,” “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of Premier’s periodic and current filings with the SEC, including those discussed under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections of Premier’s Form 10-K for the fiscal year ended June 30, 2020 filed with the SEC and available on Premier’s website at investors.premierinc.com. Forward-looking statements speak only as of the date they are made, and Premier undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events that occur after that date, or otherwise. Non-GAAP financial measures – This presentation and accompanying webcast includes certain “adjusted” or “non-GAAP financial measures” as defined in Regulation G under the Securities Exchange Act of 1934. You should carefully read Premier’s periodic and current filings with the SEC for definitions and further explanation and disclosure regarding our use of non-GAAP financial measures and such filings should be read in conjunction with this presentation.


Slide 3

Our Unique Member Alignment Co-develop and co-invest alongside members to develop solutions to transform healthcare delivery Committees composed of more than 400 individuals, representing ~140 member hospitals Note: Data as of fiscal year ended June 30, 2020. Strategic board alignment Premier field force embedded in member health systems STRATEGIC MEMBER ALIGNMENT SCALE CO-INNOVATION Data on more than 45% of U.S. hospital discharges $67+ billion in supply chain spend Manage ~2,800 GPO contracts with more than 1,370 suppliers Viewed by nearly 90% of members as a strategic partner or extension of their organization Three-year average GPO retention rate of 98% and SaaS institutional renewal rate of 96% Achieved Net Promoter Score of over 70% UNIQUE RELATIONSHIPS Premier is a healthcare improvement company uniting an alliance of 4,100+ hospitals and health systems and 200,000+ other providers and organizations to deliver quality outcomes and help lower costs.


Slide 4

Well Positioned for Emerging Healthcare Trends Predictive analytics and actionable data to guide decisions at the point of care Increasing focus on the overall cost management of healthcare Continued focus on creating healthier pharmaceutical markets Increased employer contracting and continued shift to value-based care 1 2 3 4 5 Geographically diverse and more transparent healthcare supply chain


Slide 5

Supply Chain Services Group Purchasing (supplier-paid administrative fees) Performance Services Direct Sourcing (contract manufactured product sales) ~73% of FY20 Consolidated Net Revenue [1] ~84% of FY20 Pre-corporate Segment Adjusted EBITDA [1] ~27% of FY20 Consolidated Net Revenue [1] ~16% of FY20 Pre-corporate Segment Adjusted EBITDA [1] Technology and Analytics (SaaS subscriptions and license fees) Performance Improvement Collaboratives (service subscriptions) Consulting Services (fee-for-service) Integrated Platform Provides Comprehensive Solutions [1] Based on results from continuing operations. eCommerce, Technology and Enterprise Analytics Embedded Field Force


Slide 6

Delivering Value Through Data Analytics Supply Chain Value-Based Care Quality & Regulatory Cost Management Safety Pharmacy Market-leading enterprise analytics deliver highly differentiated and significant value for members Note: "100 billion data points” based on Premier’s proprietary database (Premier Healthcare Database) and other data points available to Premier members and subscribers as of December 31, 2019. Powers Our Capabilities Benefits Our Customers Device Manufacturers Providers and their Health Plans Employers & Payors Pharma


Slide 7

Vendor agnostic, payer neutral data analytics from multiple sources COST MANAGEMENT QUALITY & REGULATORY VALUE-BASED CARE SAFETY RESEARCH Combining people, processes and technology SUPPLY CHAIN Reduce costs Improve outcomes Optimize value-based care ENTERPRISE PremierConnect® Delivers Innovative Data Analytics CLAIMS FINANCIAL PURCHASING BILLING CLINICAL ANY DATA


Slide 8

Strategic Priorities to Advance Our Business Expand member base Drive further penetration of existing members Expand purchased services and other areas Leverage analytics and e-commerce capabilities Continue to organically expand products business Provide e-invoicing and payment processing Co-manage total supply chain metrics Embed enterprise analytics and performance improvement capability to facilitate consolidated, real-time view into performance Pursue new channels of revenue by leveraging unique data assets and differentiated capabilities in new ways Co-innovate by leveraging cognitive computing “backbone” Navigate the journey to value-based payment models Enable care delivery transformation Co-manage total outcomes metrics Enable Clinical Improvement Through Data Analytics and Wrap-Around Services Extend End-to-End Supply Chain Capabilities


Slide 9

Med/Surg portfolio Pharmacy program Non-acute portfolio Contract compliance Physician preference Regional contracts Specialty portfolios Leverage member GPO relationships Expanding Capabilities for Visibility to Total Spend Member Value Premier Growth Opportunities Purchased Services Technology to manage full supply chain spend, including transaction fee potential Visibility to, and processing of, all spend Co-management Current and future total potential spend management opportunities with existing members $67B [1] $120B [2] $200B [2] [1] Total GPO (Group Purchasing Organization) purchasing volume by all members participating in GPO for calendar year 2019. [2] Premier estimate of member GPO spend that could potentially be managed if Company expanded capabilities in certain areas. Refer to “Forward-Looking Statements” on slide 2 of this presentation. Core GPO today Supply Chain Spend Coverage and Market Expansion Purchased Services / Shared Services


Slide 10

Expanded supply chain resiliency programs; invested organically in technology and advisory services to support members and growth in adjacent markets Fiscal 2020 and Recent Achievements Completed three acquisitions in fiscal 2020 Co-invested with members to activate domestic manufacturer for personal protective equipment Repurchased $150 million of Class A common stock through Stock Repurchase Program Completed corporate restructuring; separately, amended and extended GPO agreements with vast majority of members


Slide 11

PINC: A Compelling Value Proposition Executing on strategy to provide differentiated value to healthcare providers through technology-enabled, end-to-end supply chain and enterprise analytics and performance improvement solutions to help drive improved health outcomes and reduce costs Maintain unique, long-term relationships with health system members that are aligned with our strategy Generate strong free cash flow and maintain a flexible balance sheet to support balanced approach to capital deployment priorities Reinvestment in organic growth Disciplined acquisitions and investments to support strategic goals Returning capital to shareholders through a quarterly cash dividend payment Expect to target a multiyear compound annual growth rate in the mid- to high single-digits for consolidated net revenue, adjusted EBITDA and adjusted EPS 1 2 3 4 Well-positioned to further penetrate supply chain and enterprise analytics markets and drive long-term growth and maintain market leadership position 5

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Document and Entity Information
Sep. 09, 2020
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Entity Central Index Key 0001577916
Document Type 8-K
Document Period End Date Sep. 09, 2020
Entity Registrant Name Premier, Inc.
Entity Incorporation State Country Code DE
Entity File Number 001-36092
Entity Tax Identification Number 35-2477140
Entity Address, Address Line One 13034 Ballantyne Corporate Place
Entity Address, City or Town Charlotte
Entity Address, State or Province NC
Entity Address, Postal Zip Code 28277
City Area Code (704)
Local Phone Number 357-0022
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Class A Common Stock, $0.01 Par Value
Trading Symbol PINC
Security Exchange Name NASDAQ
Entity Emerging Growth Company false