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Mar 31, 2020
Premier Q3 2020 Earnings Report
Premier's financial performance reflected continued momentum in Supply Chain Services and revenue growth in Performance Services.
Key Takeaways
Premier Inc. reported an 11% increase in GAAP net revenue to $334.8 million and a net income of $73.2 million. The company acquired Health Design Plus (HDP) to expand its Contigo Health direct-to-employer initiative.
GAAP net revenue increased 11% to $334.8 million year-over-year.
Supply Chain Services segment revenue increased 14% to $238.6 million year-over-year.
Performance Services segment revenue increased 4% to $96.2 million year-over-year.
Non-GAAP adjusted EBITDA increased 12% to $155.9 million year-over-year.
Premier
Premier
Premier Revenue by Segment
Revenue by Segment
Supply Chain Services Revenue
CapyFin.comPerformance Services Revenue
CapyFin.com Forward Guidance
Premier expects to deliver results generally within its full-year guidance range, subject to the ultimate impact of COVID-19, which they expect to pressure profitability in the fourth quarter even as they experience positive net revenue trends.
Positive Outlook
- Supply Chain Services segment revenue is expected to perform at or above the top end of the current range of $895.0 million to $930.0 million for the fiscal year, driven by strong gains in direct sourcing revenue from COVID-19-related efforts.
- Consolidated revenue is projected to be in the upper end of the current range of $1.235 billion to $1.284 billion.
- Strong gains in direct sourcing revenue from ongoing COVID-19-related efforts to secure certain personal protective equipment and other high-demand supplies.
- Solid balance sheet, ample liquidity and strong free cash flow give the financial flexibility to continue creating value for members and stockholders.
- Management will continue to assess the course of the pandemic and evaluate additional trends and data to inform its approach for establishing fiscal 2021 guidance.
Challenges Ahead
- Performance Services segment revenue is expected to be at the low end of the current range of $340.0 million to $354.0 million, due to pressure on new and existing consulting and technology engagements.
- Non-GAAP adjusted EBITDA is anticipated to be near or potentially a few million dollars below the low end of the current range of $566.0 million to $589.0 million.
- Non-GAAP adjusted fully distributed earnings per share is expected to be near or potentially a few cents below the low end of the current range of $2.76 to $2.89.
- Anticipated softness in net administrative fees revenue due to the pandemic-induced interruption of elective procedures, lower overall occupancy and utilization and the slowdown of alternate site spending in non-healthcare related areas.
- Performance Services revenues will be further pressured by delays in consulting and technology projects as healthcare providers focus on the pandemic.
Revenue & Expenses
Visualization of income flow from segment revenue to net income