Premier Q1 2023 Earnings Report
Key Takeaways
Premier, Inc. reported a 14% decrease in GAAP net revenue to $313.9 million compared to the prior year period, primarily due to the normalization of COVID-19 pandemic-driven demand and pricing for personal protective equipment. GAAP net income decreased 65% to $43.0 million, and GAAP diluted EPS decreased 63% to $0.36.
Supply Chain Services segment revenue declined due to normalization of direct sourcing products revenue.
Performance Services segment revenue increased 7% to $94.2 million.
Adjacent markets businesses grew 40% over the prior-year quarter.
GAAP net income and adjusted net income declined 65% and 21%, respectively.
Premier
Premier
Premier Revenue by Segment
Forward Guidance
Premier continues to expect total net revenue to be in the range of $1.38 billion to $1.45 billion, adjusted EBITDA to be in the range of $510 million to $530 million, and adjusted EPS to be in the range of $2.63 to $2.75 for fiscal year 2023.
Positive Outlook
- Net administrative fees revenue of $620 million to $640 million
- Direct sourcing products revenue of $315 million to $345 million
- Net revenue available under contract that represents approximately 80% to 86% of the fiscal 2023 guidance range (as provided on August 16, 2022)
- Effective income tax rate in the range of 26% to 27%
- Adjusted for impact of the COVID-19 pandemic, Premier’s fiscal 2023 growth expectations are in line with its previously communicated multi-year, compound annual growth rate targets of mid-to-high single digits for consolidated net revenue, adjusted EBITDA and adjusted EPS.
Challenges Ahead
- Capital expenditures of $90 million to $100 million
- Free cash flow of 45% to 55% of adjusted EBITDA
- Does not include the effect of any potential future significant acquisitions or share repurchases.
- Premier, Inc. does not provide forward-looking guidance on a GAAP basis
- The exact amount of these adjustments is not currently determinable but may be significant.
Revenue & Expenses
Visualization of income flow from segment revenue to net income