Premier (PINC) 7 Feb 232023 Q2 Earnings call transcript

Good morning and welcome to Premier's Fiscal 2023 Second Quarter Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Angie McCabe, Vice President, Investor Relations. ahead. go Please,

to Welcome XXXX quarter second Thank Premier's call. conference you. fiscal

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

our want this accompanying call website are Investors remind I at supplemental the conference started, in of get and the we everyone Before that section earnings available investors.premierinc.com. release slides to our

SEC, no forward-looking discussed harbor our Management's obligation which results and in our and risk from encourage those you materially filings results with Form could remarks differ We today, Factors them. the soon. recent today contain the update our are of XX-K today. to factor certain quarter, disclosures. statements These that XX-Q to file for forward-looking including and review we safe future as statements, Form detailed to undertake and actual affect expect speak discussed we most these might

other free the business. presentation which Also, to adjusted are our to the where furnish measures, in or financial in GAAP our non-GAAP evaluate included slides to accompanying our supplemental SEC X-K, the financial soon. of and we earnings to measures in as we earnings will appropriate, Reconciliations Form measures to flow release, non-GAAP appendix expect such financial of this refer cash

to now over will I turn the Mike Mike? Alkire. call

share, reported Good in Thanks, largely we results, and second our us. expectations. pleased were ago thank our morning, time quarter to everyone, I A Angie. you for line short joining which with am

guidance. implementing revenue adjusted and our segment revising we and We plan also share fiscal per announced a targeted are savings cost that earnings XXXX

our Strong segment growth of services markets continuing by and of license adjacent businesses. to execution was our of this growth in team our certain First, I'm growth the execute for in Services and incredibly four quarter proud driven agreements enterprise consulting the our Performance our pillars revenue strategy. of

our to patients. technology in members quality with multiyear to platform expand and partnerships of help growth cost-effective our agreements consulting demonstrates deliver we agreements their Importantly, care the enterprise These members. use services believe license higher our strong more

Even continue offerings in long-term needs. systems, for members our our their solutions see other for customers time as health challenging and to

making markets. We in existing into also progress capabilities strengthening adjacent expanding and are our

out-of-network providers plan as quarter, plans TRPN locations. across assets, the health we well as Health, We will this ConfigureNet, have impact more as than our These In costs bottom US million believe our wrap access acquired for business. assets we direct-to-employer currently members offering health positively to Contigo which employer include second new out-of-network XXX,XXX services. new offers and health lines, care they access out-of-pocket X.X when provider-sponsored rebranded

Supply revenue, our primarily in segment as business. in growth of we in call Care growth non-acute Continuum group fee reflect administrative purchasing Performance net the quarter-over-quarter or, the to due Services it, Chain

first products sourcing of portfolio a primarily direct anticipated, demand fiscal sequentially from we more as the our product by XXXX, driven Also, quarter and in grew environment. revenue pricing expansion normalized of

macro uncertain ongoing While and other and well our execution Inflation, constraints growth operating members reflects labor of and as continue multiyear other interest supply performance challenges customers. strategy, members we, rising rates, our are in environment. a continued second as chain to our and customers, generally affect quarter our challenging

the Performance e-invoicing payables companies. Remitra, Services other our and platform, dynamics experiencing within example, segment, impacting For technology our is market financial same

further care environment long-term. and health for adoption supply chain payment invoice driving are slower-than-expected dependable headwinds of and we suppliers and magnifies for the these automation need Remitra, in While believe this providers the financing

go-forward suppliers remain an potential further realigning engine and accelerated our Remitra strategy. of for growth as strengthen Remitra's to and design confident efficiencies the Premier. We are business the cost in in our for structure solution operational hosting near-term with important to process We include sessions regarding providers

measures. savings morning in our this announced well reduction positions cost reduction of modest includes as a This elimination workforce. but implemented meaningful staffing certain expense we and of As open the we non-labor as proactively targeted

are make, to members but Let decisions employees do These me that cost other the they to cost flexibility we be improving of while take in necessary care. clear, to improve and affect the customers to align of were not difficult delivery health environment, our lightly. support also deeply structure very with decisions providing our current and were the committed our our to communities. We mission

reinforcing Looking executing our remain growth we competitive ahead, on multi-lever our position. in focused strategy

continue proactively long-term flexibility. for invest and sustainable our to business, in appropriately opportunities that financial while We and will growth, discipline optimize maintaining

through technology longer-term meaningful and care deliver member solutions our we comprehensive in members are platform, services and market. success our the of combination well deep powered our believe data to relationships to positioned we the by health Importantly, scalable for and comprehensive

I cost over our performance, will discussion to Craig for Craig? detailed revised more quarter plan now McKasson, savings operational the a call second guidance. our fiscal XXXX of financial and financial turn and

Thanks Mike.

and XXXX of Supply results same of the period Performance and Services with increase our decrease decrease revenue compared of a generally X%. line as ago, year For total in expectations our million Services XX% of an XX%. segment with revenue $XXX.X a were the million, quarter a million, of with segment of Chain net revenue $XXX.X second of $XXX.X

over administrative purchasing period, Services the in business. X% year Chain driven segment, revenue In growth prior primarily our net the fees by group non-acute Supply increased

continued care affected the impacts utilization business, overall lower they supplies a the to which by in of GPO services acute in-turn level members' purchase. Our our quarter of be health

by PPE was produced non-acute relative normalization Protective some the to and acute category to or Equipment partially period. impact pricing and growth another Personal strong and the year of our food due prior Within volume including quarter continued Pharmacy categories inflation across the the of growth and demand offset portfolio, GPO of which

decline in demand Also, for and these have earlier high-levels continued to pricing categories the pandemic. from the

on communicated behalf we manage care our tightly past on continue earnings As health price provider increases calls, we to of have members.

in and areas labor reliant Pharmacy including their for These by been PPE. petroleum and impacted increases increases price on price the have particularly across inflationary portfolio, have Although, certain contracts production. other decreases products mitigated

negotiations, the certain with prior our year through lower Notably, portfolio period. pharmacy disciplined pricing new compared yielding pricing fiscal products year is this implemented we which for

we result, did a quarter. business material inflation in on impact a our from overall As the experience not

As other we PPE year the of declined expected, supplies and last related to prices high-demand and second quarter incremental pandemic. of purchases included which from revenue products higher the

of The supply demand decline PPE, from market primarily one, to two products the factors; which member of compared due the pandemic two, contributed inventory year; prior to and the year including and the was previous excess state pricing. levels lower certain and with

to other conditions. market and these portfolio our We expanding products are continue driving demand see to product and for member ongoing adoption increased mitigate

XX% in current with Performance of increased year's second from compared quarter agreements In assets quarter. of segment, in compared to TRPN prior with as with in revenue the timing due associated last was This key including executed our year license Services revenue quarter enterprise certain XXXX. of as primarily businesses well our consulting the growth markets acquisition our our contributions year October and adjacent the

early As we which is originally still pace at in business. the up XXXX ramping our for its Mike Remitra, not this stages, indicated, expectations fiscal and are is we revising anticipated

forward. our confident and need members address adjusting longer-term and Remitra remain this expectations and process align costs that these headcount suppliers. performance our our reducing in of in better in moving are are for the the the for prospects and We business current capabilities to plan this We associated operational with for business

combined XXXX on our adjacent expect to acquisition. currently With fiscal XX% fiscal asset the year markets respect to businesses XX% of to we the benefit grow our a TRPN from basis, this revenue over including contribution

to second million fiscal was the income to to EBITDA for the compared with profitability, million, decreased Supply $XXX.X compared Services of two slightly decreased $XX.X first, year GAAP period net XXXX. prior factors; with Turning Chain Adjusted due EBITDA quarter primarily quarter. adjusted the

products improved demand to quarter, sourcing revenue and for pricing but year business direct fiscal from sequentially our logistics period. expected current declined in the prior decrease first we year driven of by lower the costs the PPE due quarter from and higher Profitability the as XXXX in

normalize Growth mitigated decline margins of second Logistics the fees some to benefit direct in that net fiscal administrative revenue expect and see begun to in profitability. costs in of year. the we sourcing half this have

A increase expenses, due Services our was Supply partially in adjusted general, increase revenue, certain was selling, which Services in businesses. the This Chain support decline headcount additional of an Services EBITDA. adjacent driven higher primarily offset by and administrative Performance Performance quarter-over-quarter by EBITDA, in in growth offset to markets partially adjusted to

period These increase fiscal in impact XXXX rate of on in the the that year items the stock current program repurchase were offset effective Compared impacted well as with adjusted per $X.XX, quarter, items year as earnings and of adjusted ago the net decreased adjusted income EBITDA the outstanding. to current our share slightly same completion the the tax result shares by the of as year. a partially X% decreased primarily

December From was six year. perspective, for from XX, $XXX.X XXXX a prior flat million of the operations flow sheet ended and liquidity the compared balance cash with months

cash flow to purchases. The million Free and timing year lower period compared equipment with quarter the increase a due second ago. was of prior the was same the compared period with primarily purchases $XXX.X the property million for $XXX.X to year due for of

EBITDA. we For continue of flow approximately XX% fiscal XX% of to XXXX, expect adjusted to free cash

the December of Cash renewed as revolving our the $X XX, June facility, was quarter $XX billion second million We $XXX $XX.X of repaid with an on which outstanding XXXX We and million December, of million quarter. January. totaled XXXX. during million XXXX balance XX, as equivalents with compared ended through cash five-year $XX.X subsequently in credit

approach we capital considered and offerings existing With differentiate returning share take marketplace, repurchases. a stockholders capabilities, growth, remain continue interest We our to complement balanced and capital rising organic or investing especially, our in dividend respect strengthen and rates. through acquisitions to to in committed the quarterly targeting deployment, periodic to given to and our

on be will And and appropriate not have use programs, when repurchase that to annual share an place, one continue we basis. would executed do in currently capital. we of historically have We assess an while whether

on paid to share, first our of stockholders of fiscal totaling per dividend Recently months six X. of cash the XXXX, stockholders Board record to dividends we Directors March $X.XX quarterly XXXX as XX million. a declared payable March of $XX.X of During

employees This our expenses approximately or to the cost eliminating designed is to challenges, partners non-labor and XXX near-term initiative including Turning facing. now positions by X% are this supplier more our our nearly costs, of we XX lowering position business reducing of total workforce. many to weather are open providers the than our and plan, savings workforce our Through plan.

million fiscal cost These actions $XX basis. million XXXX, $XX million are to of annual rate run $XX an approximately to pre-tax on and produce million to savings expected $XX in

the reduction, pre-tax completed and approximately cash expensed in of XXXX workforce is $X to which February quarter expect related primarily in We expected our to restructuring fiscal million, charges third be of substantially XXXX.

macro environment in and revised fiscal following outlook Based we XXXX this visibility our turning on of are of our our XXXX current to guidance guidance. the the for and Now fiscal half ranges. our fiscal our making year, to first performance the expectations into year, remainder the the updates

Chain a has not administrative anticipated, universally We a This are pandemic. components: of $XXX inventory million. to and $XXX million to built Supply as GPO level $XXX continue of revenue $XXX result Services destock excess utilization of to range to the the revenue, we as lowering originally million, to net of is the million following net comprised yet returned members fees up

sourcing to in to manufacturing reflecting a $XXX factory I member than manufacturing new and planned initially $XXX in supply Direct revenue delays. and products market as of domestic the million slower due mentioned ramp inventory we capabilities earlier, excess levels million,

manufacturing members part our domestic As efforts care products, collaborating of previously resilient to many we we a health to more stand our certain create as up communicated, chain. supply are of of with PPE

Performance raising from ConfigureNet partially expected are than our offset Services million, and reflecting $XXX in we We range expected. to contributions originally million revenue by $XXX lower a of contributions performance net the from revenue second quarter to Remitra,

total revenue for for fiscal unchanged guidance remains Our XXXX. net

$XXX and range million associated cost remains million, certain restructuring expenses, incorporates savings adjusted for also guidance onetime EBITDA at plan. unchanged with our $XXX Our to

this might profitability. the As we environment, headwinds. the on we business of to steps be and and position optimistic macro year, weather it uncertainty given evolve, to current additional pressure proactive there the the remain some could remainder to look fiscal in But taking how are

rate increased to we now our are as certain our XXXX are forecast our guidance, and to in we tax interest credit share tax than expense company's effective lowering depreciation corrected. due a Higher acquisition the not fund to This end rates by interest primarily revolving its issue within rising expense earnings adjusted guidance range. be to low correctly been contemplated result we of our being expect following guidance, utilization $X.XX expected originally Higher to be $X.XX, assets. as Lastly, of reflecting TRPN benefit of initial partially These system. of calculated XX% at to to offset planned a range per has fiscal facility XX% our the of a items: items depreciation the

perspective, relatively utilization flat quarter for member our compared year. GPO currently a environment of the fiscal of quarter business, From prior administrative fees In the we net cadence to be and expect expect in we following remainder levels healthcare in the the with excess decrease the current inventory. third year ongoing revenue this reflecting

sourcing products direct third anticipate increase revenue. our from sequential In in second quarter quarter a business, the the we in

the However, the pricing impact expect prior which quarter third of we pandemic. with increased to in year demand benefited and to from revenue be compared lower the due period, the

but timing to third generally revenue strong year-over-year third engagements, certain we business, In sequentially our this growth produce license expect Performance in quarter. to segment the quarter due the decline to we enterprise expect from quarter second of the Services

perspective, the quarter the XXXX, to prior in over From expect third period. of EBITDA fiscal adjusted year to for profitability mid-single-digit a the grow range low we

As to I savings our mentioned quarter cost earlier, expenses will results our reflect plan. related certain third restructuring

So to quarter third year. the fourth expect adjusted sequentially to fiscal this from we increase EBITDA of

while strong. and We cost impacted the is our that implement we generate some economic positioned flows with of to resilient business teammates well and help remains is significant our aligned our remain cycle, position we actions more difficult cash market. had ensure in our current In stable the financial closing, to structure

value are deliver creation growth our you focused strategy for your other to executing long-term As our and stockholders and we Thank look for time today. stakeholders. we ahead, on

the open for call now up We'll questions.

ahead. We Percher Instructions] question session [Operator question-and-answer go from now with will comes the begin The first Research. Eric Nephron Please

have give start and were Craig. pressures what additional to second where ending you you, with of view pressure and risks us possible. half from? specifically you might Can is around in some Thank where come contemplated profitability you Mike on the and additional guidance Maybe those commentary

happy Eric. Sure, This I'll is be take that. to Craig.

we're we've clearly about nature. think is – I that to a as to to certainly recover. of in systems will tell have going regional you that I it's you area talked – healthcare the utilization see how continues key

and seeing but other to systems continue pace lot coming utilization rebounds Some we anticipated. are health at systems providers have back not a the of health that see would

levels that robust a to into we've extent we would head doesn't rebound better. that a would see it as perform If the at So to the XXXX utilization that we more to kind us be be contemplated, recovery headwind. a tailwind of help

that the be headwind the We other one destocking been The or are extent a would inventory been that to tailwind. were start and taking people's think to this that normalized. issue down is where back to vary more place. purchasing do way be But going of getting patterns around other to has that a to that has normalizing or

overall the other. around the economy way issues goes, where have macroeconomic can or Clearly, implications one certainly

three discussions best case our we would of where We with extent see move we the to those have to that factors, providers. and believe moving be what the But that an forward in have in implication. sort with factored healthcare on those

ability of that half the when do depending six or could we've Performance to last predict, agreements the as second then, have variability Services, about and Those good tailwind and again, achieved good proud with second to a about headwind the the the results talked difficult very on pipeline come a year enterprise the the are of historically whether in of in have but we but the license feel year. through that a quarter times months at those in in do be we agreements. And

lot we it talked Does you feels a or it like have And you that. worse about items into XXXX, know I destocking. months feel visibility six like -- do impaired in last better versus you ago? where now or visibility just comparisons, these were is or because the quarter like items of three

is Mike. this Eric,

on this. of a bit a you give to just backdrop So,

of this build inventory pretty XXX others other and days, the maintain PPE XX So, if just-in-time obviously, XX, the some you our these of pre-pandemic, level in cases members providers, up and for supplies. of strategic XX, looked stockpiles all even then, significant pandemic, And at many healthcare sort post days.

going where a you of environment, at and levels taking inventory providers of kind are look right then, trying at So macro many our inventory out of given now forward. the closer size we the these to sort if figure are and or look levels carrying what is optimize for right

we next occur go to And to to we expect of your So, question systems the the our answer into over turn of trying trying much balance are believe it will normalized quarters. trend specifically, just a couple understand very in -- this to that then sort more environment. back health short-term of general

Thank you.

question Please Cherny The comes of ahead. go America. Bank next from Michael with

taking and contribution for Services the one, the non-core any organic guidance, new core question. outlook in if the thanks in from to can. versus the the first I morning, Maybe Remitra out what change growth Good in just Performance way to of near-term assets that TRPN Relative the versus reduction bifurcate was is segment? there terms in

about Sciences Sure, breaking for Sciences business Life is But as Michael. our individual include clinical did support a on Health also and get typically reminder, call, talk Applied but then business, businesses, I which as components. markets into business. This adjacent Craig. our the again Remitra We or our question. the decision the Contigo don't out Thanks

we just points We prior that that of grow low couple as XX% of still would the acquisition XX% my we'll ConfigureNet. of we now growing XX% said XX% below grow I prepared to that, end With remove If the to inclusion were year-over-year. a range. the expected had ConfigureNet that, to to of in remarks, ConfigureNet from be to originally

Contigo with Sciences would discussed. we and originally our organically growing that three other of get levels now Remitra, to both that the So, the decision support ConfigureNet business of are, all Health and clinical aspects outside at Applied range us

Remitra business particular just that uptake on. which with of the CFO, that due seeing chain has which that Remitra's cost the is It of financing the of supply we're rates and was the in not not to rising the capital, the uptake seen rollout interest and aspect

business more contributions Performance the the So lot the by is growth which other a aspect, Remitra not and our adjacent of of seeing up flat being made really, in not markets parts then the we're in from ConfigureNet. or

And we sort of standpoint, add I from headwinds, have in you, short-term our some these then will in while automate are to the believe their do a for incredible systems. invoicing and market systems to seeing still Michael, Remitra need I I tell payment this health

to conducted event, us tell strategy is of very an solution industry. with suppliers, for said significant We to you have a number accelerated actually of critical which of very, technology design we a of that need all the this in And a this them sort suppliers. like person that I'll creation really

incredibly we're forward. bullish the going on program So still

an Going forward, is well. what we're also really event really, that members as for them to for going to out drive value solutions opportunity accelerated design the create

the for defined weeks are what our suppliers. over value have And the design really value So it, for of the members we've an going accelerated couple props event next that again, define well. for as we're to prop the members to solution

various better Care acute about Got I customers the it's where given utilization reports it. participants. overly we've that administrative shocking health care different care think, seen to fees, the thinking than performing Continuum see of And is other don't net your

to the changes all and you for think care what happening about do the GPO outside within make to and of any or towards transition you part more more there traditional be service to long-term to need purposes strategic is intents the the appears four you of hospital? core pivots of need evolution walls business, pullback investments the As a that

Thanks for question Sure. the Michael.

non-acute all, that first realigning we of are resources So area. actually obviously to

services let and So the core before say, me give acute the that I bit – a you detail non-acute. capability but GPO more on of actually just

like create one expense purchase services have to And after the both. and in of technology other items. things So leveraging we that value services get and capability non-acute have additional smaller then some that, the we we space things

very make non-acute to that space get events investments So we're your the to specific to question technology. continue after that around to primarily going revolve

do of So what's understand services to technology help helps kinds spend, them those ordering, with things. that these facilities technology purchase their and non-acute happening

going in the So have we is that areas. growth make us in non-acute see investments continue to realigning been given you're to those that and

Michael, Mike thing, would Yeah. Craig. the is quick I obviously that as is And the is only that is this add describing of nature base disparate. of part non-acute that The customer to evolution more technology

activations function. in a through happening portfolio. roster It's the correct, on to – acute focusing a little attachments on ensuring is so are technology part centralized are the of price more easier contract And business that

And initiatives so we do do have to efforts and that.

would in XX%. the of the and GPO of to I years about past XX% from up remind five grown has then itself GPO And over our to you portfolio four that, non-acute

So bigger a forward. focus of to is move area an continue definitely we area it as of growth and

why non-acute should to for these comment, areas will have And invoices. This have that in it that important, critical is be Remitra. we Remitra understand invoice one an made, market. I going that all be tied it's to happening is And Remitra non-acute Because other from really what's I right? solution and should so back

Thank much. so Understood. you

you. Thank

Stephanie comes from go Securities. with SVB ahead. Please question The next Davis

guys. moving lot quarter. in of you for pieces Hi, There's Thank taking the a question. my

side. expected? hoping through the of you your we Chain Services and So, quarters normalization growth I than new the some in on over kind the timing or past And look initiatives license Performance talk better the worse the Supply of underlying two to what's was sales of and could been business in

Sure. and color. add Mike I'll start, then can some

saw enterprise agreement standpoint. we Services So quarter and execution relative from license to the with Performance performance, second what pleased extremely

those demonstrates that close, we'd last that did we that two indicated or of – earnings. in then actually in come occur. we anticipated. when our a one had said you'll That that we'd that, of we As post-quarter originally license sort this had not quarter had announced And recall, that, come fact had had in

license performance we've of the And the quarter. hitting of actually that the terms of had performance then quarter, enterprise levels remainder in strong highest for had we through

with very that. So, pleased

successful look well a other decision for business and extremely business, year-to-date ahead do them in terms growing of the that organizations at what needs the quarter it doing continuing Life quarter. in Health very clinical with the plan the life Contigo we As of support to parts to do our work Sciences basis of we're move forward. the to on sciences

Again, is the where we the was and expectations reasons see so about expected didn't we performance where Remitra our commentary below for and that revising that plan.

So applications of managed health – We're to last a care services and that's service we systems provide and and in collaborative helping also quarter standpoint, of other services sort advisory of still. the strong had IT for in we're piece very performance see from an Performance our and had continuing above Services, our expectations business. growth also oversight advisory good where we're things seeing their actually

Services. Performance that's So

current through year, of we're quarter, see fiscal we direct continue about On the begin to particular, but in call, the to we in balance have as the sequentially. continue year. saw in to get and fiscal prior the down that what we the talked the we see year to We did growth, this see higher supply that compared this pricing chain We'll fourth quarter. expect normalization, because year-over-year to we to experiencing business, side in the in year, sourcing sequentially won't come until the of the demand grow but

parcel excess we've part and to that the part utilization it to relative business, levels inventory tied really the GPO seen. the is then of And and

see think half of As of impact back is back a as that still bit the normalized could year that we of there we levels, a but on discussed, growth -- down Mike that getting little the toward be do sort the of may slightly. level we inventory that in tail

the it's but the do if of reprioritization these Services that reconcile we beneficial pullover hospital better macro not enterprise just How weaker versus last side, sales. On kind of actually projects? from quarter, Performance a IT timing from

Yes.

So, Stephanie. were systems. smaller asking of interesting, some I think health It's the you

ones, the not systems need levels going smaller the see health same what to efficiencies technology more. is are and I you're if to big going going think forward of as the right,

been of enterprise we strategy. of sort and of enterprise these all health the have reduce are to license analytics really So, systems pretty designing one much solutions number technology, creating and dealing that overarching with have services point

Stephanie, obviously, large significant then, course, value we we believe, we where for I -- the performance believe really amount it or So, And those regardless have differentiation health they're systems services pretty around that create pretty having we will most capability drive is to small. think have of if of improvement. wrap

Super Thanks, guys. helpful.

Thank you.

comes The go from ahead. with Barclays. Valiquette Please next question Steven

Steven, you muted. be might

Mr. line your is open. Valiquette,

next the then Okay. Please to along Jessica next Piper is move with We'll The questioner. questioner ahead. Tassan Sandler. go

delays Hi, question. it can just, Thanks purchasing I for purchasing, on capital seeing it And when or you pressure just if good utilization as help is, recovery? capital a in about related, was well? do are fact, care consumables, hoping taking morning. related us you the seeing you're what then Is Thanks. have any visibility mostly just you acute talk spend you in? understand maybe categories in pressure manifesting into of

Yes.

Jess. So thanks,

a stab Let me at take this. quick

the of have end acute X.X%. saw of we our a an we then spend like we if is on to information. back lag X.X%, utilization, and XX-day first and increase that quarter, decrease some overall this by this quarter going a So, But in -- in about saw the of and

that... So

Decrease not increase.

then and non-acute -- okay. X.X% increased, decrease decreased or was acute is for was sorry, X.X -- I'm that

think coming surge quicker. the fact lot -- than a had of rate so Where things those lot health lot both is buying those of originally quicker been we're are highlight coming The of core still is back So, coming seeing of better a the under systems, med a post-pandemic. obviously, food areas -- are the and kinds a at basic that increases, obviously, that, back the back is food food the pressure. is

Yes.

would -- what vary. what thing in again, and think terms is going add I I'm earlier only Jessica it I to say So does the I that, of to repeat I said

But overall in. does thought. strong will are footprint the that you we're hear seeing the health they're not care on organizations that at broadly utilization. So overall come back seeing depend that levels we utilization the entire It some markets

is It being procedures part not some in elective there.

Some dependent of this on is actually labor.

terms hear want that full be they challenged health in it are to need to to and from to that getting provide where continue to of able care We to be our provide. everything they providers they staffing needed back

And they're purchases, for -- actually delaying your broadly have point in put sometimes the that because is that fees would would lag. if pause timing we because on we in into relative capital health have a I that delayed but the I or response the get don't that in capital, have at care equipment time But to when from have institution. say us the some administrative know conclusive would we equipment standpoint seen in service GPO of future question a capital paid be already the capital

my reoccurring And us recurring And as we remind appreciate it. Performance about I Yes. then sense. That just question. should revenue makes revenue products think just for then follow-up my or versus you. thoughts Thanks the what can you quick quick license? of what or would -- be thank Services again percent

Yeah.

is our XX-plus about revenue. entire non-license across So revenue Performance percent based Services segment type

Great. Thank you.

Genuity. Canaccord with Close Richard from comes Please go question next ahead. The

I'm you out original about wondering if the through a was? on guidance. that the the I thinking Yeah. And questions. from on Craig, the expense guess, what surprised what we were just that should Thanks walk higher us just was be the little and called surprised you in interest change expense you depreciation for I then that rates. and could that, the

you walk could? us those through just points So if two

for Yeah. Thank question you the Richard.

that with system. So to we time not point in into they depreciation my issue would I planned comments, indicated in unfortunately in such had assets the future our placed system depreciation that calculating at be on relative as was forecasting service an

internally So software. -- developed developed know as you we

when We in have a be placed road service. map into of the will those --

And forecast system so as than identified depreciation we model in planning year coming got was issue quarter, into our and this this had particularly the in and fiscal our we anticipated system. in higher second thought and realized we in

back being higher in than at time result depreciation make we've have that that to August. had place processes established And that actuals and does believed and We in in not reconciliation so rectified guidance we we contemplated occur But initially the now in things sure did anymore. that. our

couple issue That's useful bit we accelerating accelerated assets on use smaller than a the depreciation of is just giving the that well. which of us as to minor associated lives element given depreciation. A those depreciation really marketplace, in planned originally the the a related primary is we'd with had of more we little

are in drove processes the a place rectified but didn't contemplated what system really had the depreciation occur We not and the items make that have at put two expense versus issue future. certainly discover time does in was those increase that to sure in disappointed. it again what we So

closed. Relative reminder to the August, acquisition have not the interest in did TRPN we expense, as we guidance back when a established

that where So our capital adjust and updating challenge our was ultimately the to now. having in of depreciation our we in within not to requirement we we're At call guidance level going the and didn't did understanding terms we the that have planned still facility were premature us And us time to credit time actually that range. come of identified of have first renewing get do But would to initially quarter have expense of facing, didn't combination interest for at now the actually credit guidance. on the of those the facility November, the kept the want that process create in out.

guidance. reason the adjusted that's the and line items two for our adjustment so to the earnings per -- And share

Okay. Thank you.

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

stuff. clarifications three just have Thanks very perhaps I much. housekeeping

early me First, extent factored the the the headwinds were would in as to we end through said guidance. have -- year. of to something tailwinds in case to you you At you prepared and the your talking It best Craig, out case. in of seem middle that, in want you the about Q&A, looked discussion factor the on or would

Yes.

-- just a issue? I'm wording that was

to If apologize, it say our best I best say, not didn't I estimation, correctly, Eric. case. I meant

our -- best best healthcare on what today. our So expectations. from and factored the in based did case systems hearing not we into macro we're yes, it in certainly evaluation factor conditions environment We a our

but sure was it just reiteration to I perhaps. wanted Yeah. another the And assumed clarification that I then was case, or make clear.

end correctly? markets I been Services the would you within that original lower of a if ConfigureNet to adjacent growth hear range. Did acquisition XX% said, the points have TRPN you exclude new below Performance of think XX% that I only couple growth the

correct. is That

Okay.

magnitude in then theme i.e. to going in the the in profitability XQ therefore is GAAP, And basis? huge one important, the $X -- to coming discussion actually last will the So this the is the Remitra is going not the EBITDA I be third in know to taken out charges those on of your a impact terms. of but those going of the impact -- -- this charges or inclusion charges dollar restructuring pre-tax Was going of non-GAAP of consensus quarter to million XQ. numbers in part

Yeah. Thank asking. for you

million charge EBITDA $X the in performance. adjusted restructuring our absorbing are We

not will be that We adding back.

why impact EBITDA. adjusted that's add-back indicating that we an are third not going that's to profitability. So It's quarter to

Okay. That's Thank for me. it you.

comes Jack Guggenheim. with ahead. Please go question from The next Wallace

Remitra. taking for Thanks on Got Hey. my question. one

seems in part like to prop, some value Just of of portion of business. related your business pickup to was so it the that I'm clear, the the the slower related financing

burden. stepping I'm today's got seems friction of reduce it's or reduce you you've the a all fit the a labor reduce macro. back product thinking, just payments, some right costs, very like will It that service As product a in in help market great and got

not to the Thank would lines base option? implementation with through may there slower So decision something upfront not -- were time go you. on is, the I if the it's other kind product, a of a question guess of to my payments, of were pause whether causing friction financing that be they are cause points rollout that any customer there,

Yeah.

So is this Mike.

that's a absolutely systems. really that performance across And the be disparate to actually but areas invoicing concern I'll that as all in to something said, It -- all in flow this And part the healthcare is helps acute of this virtually related important just all going lack was it's market So well, say the optimizer. couple is of it's also backside CFO of But cash invoicing the general. And the that things. it's the obviously of market, continue what secondly, the Craig moves primarily to interest or One they're I that. them will as these they centralize say providing centralize to be needed do care. continue where going to healthcare as non-acute, the from this to invoicing. this solution in the actually of

but will costs those So to invoices, help what's reduce facilities. labor provide in being of them in it terms insights as importantly, just as invoiced obviously managing

And excitement. get same incredibly said I we a as said, this a imagine weeks we're on was together lot providers earlier, there. we we'll when the positive number of of our I ago see the still there So level I of a had opportunity. of together like suppliers couple and And excitement

on plagued Got And the the helpful. think do have here. first even guess impact then delaying some calendar payers questions you. One, I of of of some two That's half issues payments? back reimbursement GPO maybe that the the just in you you're and the the providers quarter that year to feeling

as even they there's inventory you feel flow. your customers And are if supplies in do there's the cash inpatient that, of as managing levels like potentially a CFOs lower -- and just related to particularly

a that the feel for -- that a of side in is sequential quarter a a there's being third break faster you path flip you there of Thank hold like glide the have do the guidance? maybe snapback have potential or So out you.

Yes.

have not as business. not, typically And it our it's much -- most to in terms especially GPO, for relates the part, driven that something payers by that's So level rates. as the utilization no, will the pretty of that's impact paying, our of slow as far that

But or think, it you're to to are standpoint, uptick. inventory I start in they expense that that said, think really have inventory CFOs level from more obviously, product. they'll to an As your out. of question, obviously to find have that optimized continue bleed I relates going ensure they point, trying level to At some I inventory but enough high quarter don't other two, as product, an of the see of carrying this the to a next that

That's much. Thank so Got you. you helpful.

Thank you, Jack.

UBS. ahead. our Please last question Caliendo come And go will Kevin from with

supply lower guess utilization in issues? for issues the on you the delineated about and Thanks, impact between all manufacturing reductions and/or the inventory from that sneaking think you impact thanks to have I me in. from versus chain, follow-up at if the

use upon so. product in it's that use before first systems that tough to us all that rightfully of delineate that of based utilizing expires. for feel obviously, going Yes, product, to all, terms it's in to they're right? to So They're to our pressures it health try expiration, the is -- inventory going try

that in that market of So a would you we expect. know as there's ton the

utilization general geographic. on in so Having that, said is

volumes important GPO a starting are We to normal, come in our number of have to better that so, see procedures. especially that volumes these enough create actually obviously to health systems of the those had back are elective growth

so of markets. starting where certain but we're occurring, it in And seeing growth markets see other in we are to that's not actually

between hard from happening what's given the difference for between inventory there's utilization that what's us so and an hard much utilization So patterns, to management delineate it's us delineate it's standpoint, difference really standpoint. just for really happening to from a

highlight, is there conversation point articulated member levels. only question inventory does really and the focused the and as on we I the of to supply has Kevin, But the needed, in And focus market. because was today's anticipate prepare would also other Yes. and of be the we where thought done try much for shortages excess seeing. be demand they were continue to manufacturing the and There might

York would in so it. New having the to I York providers versus example that New of New continue York they inventory buy An is providers some health actually much give you give had to inventory away State bought to care

needs dynamic. the of next or which over to. it's pushing is going And that's so supply think that there And through excess so, as talked get to another channel, sort but quarter the we issue about, also we've

prescriptively of all to attributable X three you to attributable Z have to that, kind And is say, of Y when and so it's hard is those, this, that. to attributable

mostly And is PP&E, or presumably stuff excess well? it as other that is supply

PP&E, yes.

Yes.

narrow like your with down? private are you So Are label they customers they anything moving they're anything more formulary? being seeing sourcing that? doing doing more on Are any

Yes.

programs grow. continued to our As have expect, committed you would so

of X% we're X% know, of don't that people AscenDrive that it's, I folks probably in -- in Our about SURPASS. then a advantage similar growth has interested our And seeing program program. SURPASS taken are have or levels an

the are to figure just those you up pressures as reduce these are they'd to you expect So that product of systems much financial all given would would rather opposed out health and picking them tell committed standardize programs as ways labor. undertaking

you price? your to some You about buy? certain where products openness the option of about talked some prices maybe talk And and/or might raw your you and look price suppliers higher do your higher labor a Can about where prices to allowing with costs? a where customers you your accept there…. talk hospitals formulary higher through have versus mentioned pricing to as into what Can price. differences to go your Like certain be you discipline you pass-through allowing of also material also are seeing any to you're

Yes.

of terms last the for they're so… In what pay year willing for to -- up or

No, no, question. no. Good

from our here decision quick a sourcing entirely happening you -- is think up one as made about which happens of a healthcare system it's that standpoint reminder as primarily So committees, just anything our sourcing any of in executive.

determining profitability price somebody of wants to that do agree allow as there's factors whether to is increase. And a that of And in or committee the That or not of that terms goes that. obviously that by not decision price to the increase that to committee. they're makes supplier a increase number price to a get important. going weigh whether we or when So they

don't The for a or that second does increase if market, they whatever. is to and how not create provide healthy or a going product are is we duopoly supplier monopoly the price allow that

for of, upon our those, take we a increase. most really that determines whether any all take the then that process. increase sort member decision But they is And So price their of put based part into they ideas input.

takes because very very, are we I So the whether versus as not areas. there's not one Premier difference members in -- those don't aligned a or to

I'm that something happening were as wondering That's would future? you inflationary impact that or see source is get to pressures the XXXX effectively? of And or in I for how the happen yourself actually for opportunity more it We've If that meaningfully Is down. and chain big creating that just XXXX. something and one the Those hurting last one in. are the really that shipping now, helpful. you? that's you that some in read supply changing and is might more how business have can come all costs seen

No.

it we eye So event -- but have this. like towards but a an is always always we're it's great another question,

that of for are we value So happening products. logistics a obviously want our that that health driven standpoint to and from paying are gets contracts take advantage less make any and systems sure synergies into obviously the then

chain said lever in capability. Having are building the supply more the want a into resiliency we a pull huge to more so that, nearshore has ever that make if to logistical is sure challenge that that onshore we the there we future have ability

build resilient So we going model. continue to that to are out

we want today, down in in the significantly though go the up come event costs the that even optionality the costs make logistical sure we're right we to So future. seeing have

concludes question-and-answer and second call. Premier's Thank fiscal for quarter earnings today's session you This our attending presentation. conference XXXX

disconnect. now may You