8-K

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):  February 13, 2014

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:

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

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

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

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

Item 2.02.  Results of Operations and Financial Condition.

On February 13, 2014, Premier, Inc. (the “Company”) issued a press release reporting the financial results of the Company for the three and six months ended December 31, 2013.  A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated herein by this reference.

As discussed in the press release, the Company held a conference call and webcast on February 13, 2014.  Supplemental slides referenced during the conference call and webcast were available on the Company’s website for viewing by call participants.  A transcript of the call together with supplemental slides referenced during the conference call are attached as Exhibit 99.2 and Exhibit 99.3, respectively, to this Current Report on Form 8-K.

Item 7.01.  Regulation FD Disclosure.

As noted above, the Company held a conference call and webcast on February 13, 2014, to discuss the Company’s operating results for the three and six months ended December 31, 2013.  A copy of the press release, which contains additional information regarding how to access the conference call and webcast and how to listen to a recorded playback of the call, is attached as Exhibit 99.1 to this Current Report on From 8-K.  A transcript of the call together with supplemental slides referenced during the conference call are attached as Exhibit 99.2 and Exhibit 99.3, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.

*  *  *

The information discussed under Item 2.02 and Item 7.01 above, including Exhibit 99.1, Exhibit 99.2 and Exhibit 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference in any filing by the Company under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.  Financial Statements and Exhibits.

(d) Exhibits.

99.1	Press release of Premier, Inc., dated February 13, 2014.
99.2	Transcript of conference call of Premier, Inc., dated February 13, 2014.
99.3	Supplemental slides provided in connection with the second quarter 2014 earnings call of Premier, Inc.

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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 and President
Date: February 19, 2014

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EX-99.1

Exhibit 99.1

PRESS RELEASE

For information contact:
Jim Storey	Alven Weil
Vice President, Investor Relations	Director, PR and Communications
704.816.5958	704.816.5797
jim_storey@premierinc.com	alven_weil@premierinc.com

PREMIER, INC. REPORTS FISCAL 2014 SECOND-QUARTER RESULTS

CHARLOTTE, NC, February 13, 2014 — Premier, Inc. (NASDAQ: PINC) today reported financial results for the fiscal 2014 second quarter ended December 31, 2013.

Second-Quarter Highlights:

Pro forma results reflect the impact of the company’s reorganization and initial public offering (IPO)*.

·Net revenue of $208.9 million increased 11% from pro forma net revenue and 1% from GAAP net revenue for the same period a year ago. GAAP net revenue for the same period a year ago was $206.4 million, but does not reflect the company’s current operating structure.

·Adjusted EBITDA* of $83.4 million increased 8% from pro forma Adjusted EBITDA for the same period a year ago.

·Adjusted fully distributed net income* increased 3% to $43.3 million, or $0.30 per share from pro forma results for the same period a year ago. GAAP net income attributable to shareholders was $6.4 million.

·Supply Chain Services segment revenue rose 10% to $150.9 million and segment adjusted EBITDA increased 5% to $85.1 million, compared with pro forma results for the same period a year ago.

·Performance Services segment revenue increased 15% to $58.0 million and segment adjusted EBITDA increased 29% to $17.7 million, compared with the same period a year ago.

·The company acquired Meddius, LLC, a data acquisition and integration-as-a-service company.

·For the six months ended December 31, 2013, the company generated cash flow from operations of $195.7 million, an increase of $34.2 million from the same period a year ago.  At December 31, 2013, the company’s cash, cash equivalents and marketable securities totaled $408.7 million, compared with $255.6 million at June 30, 2013.

·The company reiterates its fiscal year 2014 financial guidance of pro forma revenues of $845.0 million to $869.0 million, pro forma adjusted EBITDA of $335.0 million to $355.0 million, and pro forma adjusted fully distributed earnings per share of $1.20 to $1.29.

* Actual results prior to the company’s reorganization and IPO consummated on October 1, 2013, do not reflect the impact of the reorganization and IPO, and therefore, management believes they do not provide meaningful year-over-year comparisons. A description of adjusted EBITDA and other non-GAAP financial measures is provided in “Use and Definition of Non-GAAP Measures,” and reconciliations are provided in the tables as part of this release. See “Reorganization and Initial Public Offering” for important information regarding pro forma results.

“Our second-quarter results are consistent with management expectations,” said Susan DeVore, president and chief executive officer. “We achieved our financial objectives, generating 11% growth in consolidated net revenue and delivering an 8% increase in adjusted EBITDA from pro forma results for the same period last year. Most importantly, we continued to add to our product and service offerings, make and integrate acquisitions, and renew and expand member relationships to collaboratively address the challenges of a changing healthcare landscape. We believe these results demonstrate the growth opportunities and future operating leverage inherent in our diverse delivery channels.

“Within Supply Chain Services, strong growth from the direct sourcing and specialty pharmacy businesses, accompanied by solid existing acute member and alternate-site group purchasing (GPO) volume, produced 10% revenue growth and a 5% increase in segment adjusted EBITDA versus pro forma results a year ago,” DeVore continued. “GPO net administrative fees were unchanged from a year ago, reflecting the expected lag in new member conversions, relative to the loss of volume from departed members who did not participate in the company’s reorganization and IPO. As new members continue to convert to our GPO contracts, we expect revenue contribution from net administrative fee revenues will increase through the second half of fiscal 2014.

“In Performance Services, demand for our SaaS-based (software-as-a-service) subscriptions, advisory services and performance improvement collaborative programs delivered 15% revenue growth from a year ago, with segment adjusted EBITDA increasing 29%,” DeVore said.

“At Premier, we take pride in our ability to co-innovate from the inside of many of the nation’s leading health systems, leveraging our integrated, data-driven solutions to transform our industry across the cost, quality and safety continuum,” DeVore continued. “We are helping prepare for changing delivery and payment models that are part of this industry’s shift toward population health management. During the quarter, our ability to collaborate with these providers was recognized in numerous ways. We continued to add participants to our bundled-payment collaborative; we extended our Partnership for Patients initiative, which comprises nearly 425 organizations across 38 states; and we were designated by KLAS, an independent healthcare research firm, as an early leader in population health management.  Additionally, during the quarter, we continued to build momentum in our Medicare breakeven initiative, which we launched last summer to help health care providers operate profitably under current and future Medicare payment rates. We continued to see uptake of our new program focused on driving physician preference cost savings through the use of our recent SYMMEDRx acquisition; and we acquired Meddius, LLC, a data acquisition and integration-as-a-service company. Meddius spans multiple hospital transaction systems, and we expect its real-time technology to be integral to our core informatics products and services.”

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Results of Operations for the Second Quarter of Fiscal 2014

Consolidated Second-Quarter Financial Highlights

	Three Months Ended December 31,
(in thousands, except per share data)	2013			2012			% Change
	Actual			Pro Forma (a)
Net revenue:
Supply Chain Services Segment	$	150,885		$	137,526		10	%
Performance Services Segment	58,024			50,580			15	%
Total net revenue	$	208,909		$	188,106		11	%
Adjusted EBITDA (b)
Supply Chain Services Segment	$	85,119		$	80,770		5	%
Performance Services Segment	17,731			13,733			29	%
Segment adjusted EBITDA	$	102,850		$	94,503		9	%
Corporate	(19,445		)	(17,002		)	14	%
Total adjusted EBITDA	$	83,405		$	77,501		8	%
Non-GAAP adjusted fully distributed net income (b)	$	43,256		$	41,882		3	%
Non-GAAP earnings per share on adjusted fully distributed net income - diluted	$	0.30		$	0.29		3	%
Weighted average fully distributed shares outstanding - diluted	145,093			144,983

(a) Reflects the impact of the Company’s Reorganization on the Supply Chain Services segment as a result of the 30% revenue share to owner members after the Reorganization. The impact of the pro forma adjustment on both Supply Chain Services net revenue and segment adjusted EBITDA was $18.3 million for the three months ended December 31, 2012. Pro forma adjustments do not impact the financial results of the Company’s Performance Services segment.

(b) See attached supplemental financial information for reconciliation of reported GAAP results to Non-GAAP results.

For the three months ended December 31, 2013, Premier generated net revenue of $208.9 million. This represents an increase of $20.8 million, or 11%, from pro forma net revenue of $188.1 million for the same period last year. The primary drivers of revenue growth were improved product revenue sales within the Supply Chain Services segment and increased SaaS (software-as-a-service) informatics product subscriptions and advisory services engagements within the Performance Services segment.

Adjusted EBITDA for the fiscal second quarter totaled $83.4 million, an increase of $5.9 million, or 8%, from pro forma adjusted EBITDA of $77.5 million for the same period last year. Adjusted fully distributed net income rose to $43.3 million, or $0.30 per fully diluted share, compared with pro forma adjusted fully distributed net income of $41.9 million, or $0.29 per fully diluted share, for the second quarter of fiscal 2013.

Adjusted EBITDA and adjusted fully distributed net income for the second quarter of fiscal 2014 add back strategic and financial restructuring expenses, acquisition-related expenses, and stock-based compensation expenses totaling $7.7 million, compared with actual EBITDA and net income. Pro forma adjusted EBITDA and adjusted fully distributed net income for the prior year results add back $1.4 million in expenses related to strategic and financial restructuring costs, compared with pro forma EBITDA and pro forma net income. Adjusted EBITDA and adjusted

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fully distributed net income for the second quarter of fiscal 2014 were positively impacted by revenue growth in both of the company’s business segments. Revenue growth was partially offset by increased selling, general and administrative services expenses, due to higher employee and travel-related expenses resulting from increased selling and service personnel headcount and incremental expenses associated with becoming a public company.

On a GAAP basis, net revenue totaled $208.9 million for the quarter ended December 31, 2013, compared with $206.4 million for the same period last year. Net income totaled $51.5 million, compared with $85.4 million, and net income attributable to shareholders was $6.4 million, compared with $2.0 million for the same period a year ago.  Note: Comparisons of GAAP results are impacted by the changes associated with the reorganization and IPO, as described below, and therefore, management believes they do not provide meaningful year-over-year comparisons.

Segment Results

Premier approaches the market with an integrated sales and field force and holistic, programmatic solutions based on what it believes is one of the largest data analytics platforms serving the industry.  Financially, the company’s operations are divided into two business segments:

·Supply Chain Services includes one of the largest healthcare group purchasing organizations (GPOs) in the United States, serving acute and alternate sites. The segment also includes the company’s specialty pharmacy and direct sourcing activities.

·Performance Services includes one of the nation’s largest informatics and advisory services businesses focused on healthcare providers. The Performance Services segment includes the company’s SaaS informatics products, technology-enabled performance improvement collaboratives, advisory services and insurance services.

Segment Results	Three Months Ended December 31,								Three Months Ended December 31,
(in thousands)	2013			2012			% Change		2013			2012			% Change
	Actual			Actual					Actual			Pro Forma (a)
Net Revenue:
Supply Chain Services:
Net administrative fees	$	102,130		$	120,630		-15	%	$	102,130		$	102,311		0	%
Other services and support	173			55			215	%	173			55			215	%
Services	102,303			120,685			-15	%	102,303			102,366			0	%
Products	48,582			35,160			38	%	48,582			35,160			38	%
Total Supply Chain Services	150,885			155,845			-3	%	150,885			137,526			10	%
Performance Services:
Services	58,024			50,580			15	%	58,024			50,580			15	%
Total	$	208,909		$	206,425		1	%	$	208,909		$	188,106		11	%
Adjusted EBITDA (b):
Supply Chain Services	$	85,119		$	99,089		-14	%	$	85,119		$	80,770		5	%
Performance Services	17,731			13,733			29	%	17,731			13,733			29	%
Total segment adjusted EBITDA	102,850			112,822			-9	%	102,850			94,503			9	%
Corporate	(19,445		)	(17,002		)	14	%	(19,445		)	(17,002		)	14	%
Total	$	83,405		$	95,820		-13	%	$	83,405		$	77,501		8	%

(a) Reflects the impact of the Company’s Reorganization on the Supply Chain Services segment as a result of the 30% revenue share to owner members after the Reorganization.The impact of the pro forma adjustment on both Supply Chain Services net revenue and segment adjusted EBITDA was $18.3 million for the three months ended December 31, 2012. Pro forma adjustments do not impact the financial results of the Company’s Performance Services segment.

(b) See attached supplemental financial information for reconciliation of reported GAAP results to Non-GAAP results.

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Supply Chain Services

For the fiscal second quarter ended December 31, 2013, the Supply Chain Services segment produced net revenue of $150.9 million, an increase of $13.4 million, or 10%, from pro forma net revenue of $137.5 million a year ago. Revenue growth in the segment was driven largely by product revenues, which encompass the company’s direct sourcing and specialty pharmacy business. Product revenues rose 38% to $48.6 million. GPO net administrative fee revenues were unchanged compared with pro forma net administrative fee revenue a year ago, reflecting the expected timing lag of contract conversions among member owners that joined during fiscal year 2013, relative to the loss of administrative fee revenue from departed members that did not participate in the company’s reorganization and IPO. The company expects net administrative fees to increase in the second half of the year as it begins to see the benefit of cash collections from anticipated purchasing by newer GPO members as a result of the progression of their ramp up and conversion to the company’s contract portfolio.

Supply Chain Services segment adjusted EBITDA of $85.1 million for the fiscal second quarter increased $4.3 million, or 5%, from pro forma segment adjusted EBITDA of $80.8 million for the same period a year ago.

Supply Chain Services segment net revenue totaled $150.9 million for the fiscal second quarter, compared with segment GAAP net revenue of $155.8 million for the same period a year ago. Segment adjusted EBITDA was $85.1 million, compared with $99.1 million for the same period a year ago. Note: the declines from the year-ago period are a function of the changes described with the pro forma results, an outcome of the company’s reorganization and IPO, and as a result, management believes they do not provide meaningful year-over-year comparisons.

Performance Services

For the fiscal second quarter ended December 31, 2013, the Performance Services segment generated net revenue of $58.0 million, an increase of $7.4 million, or 15%, from $50.6 million for the same quarter last year. The revenue growth is attributable primarily to new SaaS informatics product subscriptions and from increased revenue from advisory services and performance improvement collaboratives.

Performance Services segment adjusted EBITDA was $17.7 million, an increase of $4.0 million, or 29%, from $13.7 million for the same quarter last year. Pro forma results do not impact the financial results for the company’s Performance Services segment.

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Results of Operations for the Six Months Ended December 31, 2013

Consolidated Six-Month Financial Highlights

	Six Months Ended December 31,								Six Months Ended December 31,
(in thousands, except per share data)	2013			2012			% Change		2013			2012			% Change
	Actual								Pro Forma (a)
Net revenue:
Supply Chain Services Segment	$	338,343		$	306,303		10	%	$	297,080		$	270,527		10	%
Performance Services Segment	111,142			98,688			13	%	111,142			98,688			13	%
Total net revenue	$	449,485		$	404,991		11	%	$	408,222		$	369,215		11	%
Adjusted EBITDA (b):
Supply Chain Services Segment	$	210,599		$	197,356		7	%	$	169,336		$	161,580		5	%
Performance Services Segment	34,060			25,733			32	%	34,060			25,733			32	%
Segment adjusted EBITDA	$	244,659		$	223,089		10	%	$	203,396		$	187,313		9	%
Corporate	(36,920		)	(32,580		)	13	%	(36,920		)	(32,580		)	13	%
Total adjusted EBITDA	$	207,739		$	190,509		9	%	$	166,476		$	154,733		8	%
Non-GAAP adjusted fully distributed net income (b)									$	87,239		$	83,763		4	%
Non-GAAP earnings per share on adjusted fully distributed net income - diluted									$	0.60		$	0.58		4	%
Weighted average fully distributed shares outstanding - diluted									145,041			144,983

(a) Reflects the impact of the Company’s Reorganization on the Supply Chain Services segment as a result of the 30% revenue share to owner members after the Reorganization. The impact of the pro forma adjustment on both Supply Chain Services net revenue and segment adjusted EBITDA was $41.3 million for the six months ended December 31, 2013 and $35.8 million for the six months ended December 31, 2012. Pro forma adjustments do not impact the financial results of the Company’s Performance Services segment.

(b) See attached supplemental financial information for reconciliation of reported GAAP results to Non-GAAP results.

The company generated pro forma net revenue of $408.2 million for the six-month period ended December 31, 2013, an increase of $39.0 million, or 11%, from $369.2 million in the same period last year. Pro forma adjusted EBITDA totaled $166.5 million, an increase of 8% from $154.7 million in the same period last year. Pro forma adjusted fully distributed net income totaled $87.2 million, or $0.60 per diluted share, compared with $83.8 million, or $0.58 per diluted share, for the same period last year.

Supply Chain Services segment pro forma net revenue increased $26.6 million, or 10%, to $297.1 million for the six-month period, from $270.5 million a year earlier. Pro forma segment adjusted EBITDA increased $7.8 million, or 5%, to $169.3 million, from $161.6 million.

Performance Services segment net revenue for the six-month period totaled $111.1 million, an increase of $12.4 million, or 13%, from $98.7 million for the same period the prior year. Segment adjusted EBITDA of $34.1 million increased $8.4 million, or 32%, from $25.7 million a year ago.

The company generated GAAP net revenue of $449.5 million for the six months ended December 31, 2013, compared with $405.0 million for the same period last year. GAAP net income totaled $164.0 million, compared with $170.4 million for the same period last year, while GAAP net income attributable to shareholders was $5.9 million compared with $3.9 million. Adjusted EBITDA totaled $207.7 million, compared with $190.5 million for the year-ago period. Supply Chain Services GAAP net revenue was $338.3 million, up from $306.3 million for the same period last year. Supply Chain Services segment adjusted EBITDA was $210.6 million, compared with $197.4 million a year earlier. Note: Comparisons of GAAP results are impacted by the changes associated with the company’s reorganization and IPO, as described below, and as a result, management believes they do not provide meaningful year-over-year comparisons. Performance Services segment financial results are not impacted by pro forma adjustments.

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Cash Flows and Liquidity

Cash provided by operating activities was $195.7 million for the six months ended December 31, 2013, an increase of $34.2 million from $161.5 million for the same period a year ago. The increase was primarily due to cash from operations as a result of net income adjusted for increases in non-cash add-backs to net income, including depreciation and amortization and stock-based compensation, as well as working capital changes, primarily an increase in revenue share obligations as a result of the reorganization.

Capital expenditures were $26.0 million for the six months ended December 31, 2013, compared with $19.0 million for the same period last year.  The increase was primarily related to capitalized internally developed software and associated hardware. Other investing activities in the six-month period primarily consisted of the first-quarter, $28.7 million acquisition of SYMMEDRx, LLC and the second-quarter acquisition of Meddius, LLC for $8.1 million, with $7.7 million in the form of cash consideration. SYMMEDRx is a business with a track record of analyzing and reducing costs for health systems through the innovative use of data. Meddius is a data acquisition and integration-as-a-service company that spans multiple hospital transaction systems including enterprise resource planning, materials management, enterprise health records and patient accounting.

At December 31, 2013, the company’s cash, cash equivalents and marketable securities with maturities ranging from three to 24 months totaled $408.7 million, consisting of $158.1 million in cash and cash equivalents and $250.6 million in marketable securities with maturities ranging from three to 24 months. At December 31, 2013, there was no outstanding balance on the company’s senior revolving credit facility.

Adjustment to Update Balance Sheet Presentation

In preparing to file its Form 10-Q for the fiscal second quarter ended December 31, 2013, the company identified an update in the reporting of redeemable limited partner’s capital on its balance sheet.  The company operates through an Up-C structure and utilizes the controlled company exception pursuant to NASDAQ guidelines, which allows the majority of the board of directors to be executives from its member owners.  The board, controlled by a majority of member owner directors, approves the redemption of a member owner’s capital account in the event that member wishes to terminate its relationship with the company. Therefore, prior to and subsequent to the Reorganization and IPO, the company reflects limited partners’ capital on the consolidated balance sheets as redeemable limited partners’ capital in temporary equity, rather than permanent equity, at the greater of book value or the redemption amount per the limited partnership agreement.  However, following the IPO, member owners are now able to exchange Class B common units for cash or Class A common stock which is currently greater than the book value redemption amount per the limited partnership agreement. As a result, the company has recorded on its balance sheet a $3.9 billion non-cash increase in redeemable limited partner’s capital as of December 31, 2013, which reflects the redemption amount at the closing price of Class A common stock at $36.76 on that date. There is a corresponding offset to additional paid-in capital and retained earnings, which will create an accumulated deficit on the balance sheet.  These balance sheet items represent non-cash activity and do not impact the company’s operating performance.

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The company also has assessed this balance sheet treatment of temporary equity on the calculation of earnings per share for GAAP purposes.  As a result of the member owners being party to multiple agreements in conjunction with the company’s Reorganization and IPO, GAAP per-share earnings have been adjusted to reflect the adjustment to redeemable limited partners’ capital to the redemption amount. The financial guidance provided for Pro Forma Adjusted Fully Distributed Earnings per Share will not be impacted by this GAAP treatment. As previously discussed, Non GAAP Pro Forma Adjusted Fully Distributed Earnings per Share represents net income, adjusted for non-recurring and non-cash items, attributable to all shareholders as if all Class B shareholders have converted into Class A shareholders, and reflects income taxes at an estimated effective rate of approximately 41% on 100% of pretax income.

In order to record redeemable limited partner’s capital at the greater of book value or the redemption amount, the company will amend its first quarter 10-Q to reflect the updated pro forma balance sheet and updated pro forma GAAP EPS amount as of September 30, 2013. The company will also include an updated pro forma balance sheet and updated pro forma GAAP EPS amount as of June 30, 2013, under the caption “Other Information” in its Form 10-Q that it intends to file with the SEC on February 14, 2014.

Outlook and Guidance

“Premier’s mission is to improve the health of communities by transforming care delivery in America,” DeVore said. “We believe we are well positioned to help our members successfully address the cost, quality, safety, efficiency and population health management issues facing the healthcare industry over the next several years.  As we continue to build our platform to pursue this mission, the channels of growth available to us are diverse, and we believe the value we can bring to our members and the performance we seek to deliver to our shareholders are closely aligned.”

The guidance below is based on the following key assumptions: increasing use of Performance Services products and offerings, as well as stable growth in the Supply Chain segment through the continued growth of the company’s direct sourcing and specialty pharmacy businesses, the addition of acute and alternate-site GPO members, the ramp-up of new members, and deeper penetration of existing members’ supply spend. Based on these assumptions, year-to-date results and the company’s current outlook, Premier reiterates the following financial guidance for the full fiscal year ending June 30, 2014:

Fiscal 2014 Financial Guidance

Premier, Inc. affirms full-year fiscal 2014 financial guidance, as follows:

(in millions, except per share data)	FY 2014	% YoY Change
Pro Forma Net Revenue:
Supply Chain Services segment	$614.0 - $631.0	10% - 13%
Performance Services segment	$231.0 - $238.0	13% - 16%
Total Pro Forma Net Revenue	$845.0 - $869.0	11% - 13%
Non-GAAP pro forma adjusted EBITDA	$335.0 - $355.0	7% - 13%
Non-GAAP pro forma adjusted fully distributed EPS	$1.20 - $1.29	NA*

* not applicable

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The statements in this “Outlook and Guidance” discussion are “forward-looking statements.” For additional information regarding the use and limitations of such statements, see “Forward-Looking Statements” below.

Conference Call

Premier management will host a conference call and live audio webcast on Thursday, February 13, 2014, at 5:00 p.m. EST, to discuss the company’s financial results. The conference call can be accessed through a link provided on the investor relations page on Premier’s website at investors.premierinc.com. Those wishing to participate in the call should dial 855-601-0048 (international callers should dial 702-495-1234) and provide the operator with conference ID number 49152488. Please dial in approximately 15 minutes before the start of the call to ensure you are connected. A replay of the conference call will be available beginning approximately two hours after the completion of the conference call through February 28, 2014, by dialing 800-585-8367 (702-495-1234 for international callers), and using the conference ID number above. The webcast will also be archived on the investor relations page on Premier’s website.

About Premier, Inc.

Premier, Inc. (NASDAQ:PINC) is a leading healthcare improvement company, uniting an alliance of more than 2,900 U.S. hospitals and nearly 100,000 other providers to transform healthcare. With integrated data and analytics, collaboratives, supply chain solutions, and advisory and other services, Premier enables better care and outcomes at a lower cost. Premier, a Malcolm Baldrige National Quality Award recipient, plays a critical role in the rapidly evolving healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide. Headquartered in Charlotte, N.C., Premier is passionate about transforming American healthcare. Please visit Premier’s news and investor sites on www.premierinc.com; as well as Twitter, Facebook, LinkedIn, YouTube, Instagram, Foursquare and Premier’s blog for more information about the company.

Reorganization and Initial Public Offering

On October 1, 2013, Premier completed its IPO by issuing 32,374,751 shares of its Class A common stock, at a price of $27.00 per share, raising net proceeds of approximately $821.7 million, after underwriting discounts and commissions but before expenses. In connection with the IPO, Premier completed the reorganization of the company on October 1, 2013, issuing 112.6 million shares of Class B common stock representing 77.7% of the common stock outstanding, and corresponding Class B common units in Premier Healthcare Alliance, L.P. to its 181 member owners.

The company’s historical consolidated operating results do not reflect the reorganization, the IPO and contemplated use of net proceeds from the IPO. Therefore, in addition to presenting the historical actual results, the company presents and discusses pro forma results, which reflect the impact of the company’s reorganization and IPO and the contemplated use of net proceeds from the IPO, to provide a more comparable indication of future expectations.

The key pro forma adjustments include:

·The reorganization, which included the formation of a C-Corporation and the sale of 22.3% of the member’s partnership interests to the public through the issuance of

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approximately 32.4 million shares of Premier Class A common stock, with the member owners retaining their ownership interest in the form of 112.6 million shares of Premier Class B common stock.

·Payments to each member owner of revenue share from Premier equal to 30% of all gross administrative fees collected.

·Payments due to member owners pursuant to the tax receivable agreement equal to 85% of the amount of cash savings, if any, in income and franchise taxes, that Premier realizes.

·The further adjustments set forth in the notes to the pro forma financial statements provided below.

Further details of the reorganization and pro forma adjustments are in the company’s IPO prospectus, dated September 25, 2013, as filed with the Securities and Exchange Commission (SEC), and in the company’s Form 10-Q for the quarter ended December 31, 2013, expected to be filed with the SEC on or about February 14, 2014. The prospectus is, and Form 10-Q will be, accessible on the SEC’s website at www.sec.gov and in the investor relations section of the company’s website at investors.premierinc.com.

Use and Definition of Non-GAAP Measures

Premier, Inc. uses adjusted EBITDA, segment adjusted EBITDA and adjusted fully distributed net income to facilitate a comparison of the company’s operating performance on a consistent basis from period to period that, when viewed in combination with its results prepared in accordance with GAAP, provides a more complete understanding of factors and trends affecting the company’s business than GAAP measures alone. 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 the company’s asset base (primarily depreciation and amortization) and items outside the control of management (taxes), as well as other non-cash (impairment of intangible assets and purchase accounting adjustments) and non-recurring items, from operations.

In addition, adjusted fully distributed net income eliminates the variability of noncontrolling interest as a result of member owner exchanges of Class B common stock and corresponding Class B units into shares of Class A common stock (which exchanges are a member owner’s cumulative right, but not obligation, beginning on October 31, 2014, and each year thereafter, and are limited to one-seventh of the member owner’s initial allocation of Class B common units) and other potentially dilutive equity transactions which are outside of management’s control. Adjusted fully distributed net income is defined as net income attributable to PHSI (i) excluding income tax expense, (ii) excluding the effect of non-recurring and non-cash items, (iii) assuming the exchange of all the Class B common units into shares of Class A common stock, which results in the elimination of noncontrolling interest in Premier LP, and (iv) reflecting an adjustment for income tax expense on pro forma fully distributed net income before income taxes at the company’s estimated effective income tax rate.

EBITDA is defined as net income before interest and investment income, net, income tax expense, depreciation and amortization and amortization of purchased intangible assets. Adjusted EBITDA is defined 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. Non-recurring items are expenses that have not been incurred within the prior two years and are not expected to recur within the next two years. Such expenses include certain

10

strategic and financial restructuring expenses. Non-operating items include gain or loss on disposal of assets. Segment adjusted EBITDA is defined as the segment’s net revenue less 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. Adjusted EBITDA is a supplemental financial measure used by the company and by external users of the company’s financial statements.

Management considers adjusted EBITDA an indicator of the operational strength and performance of the company’s business. Adjusted EBITDA allows management to assess performance without regard to financing methods and capital structure and without the impact of other matters that management does not consider indicative of the operating performance of the business. Segment adjusted EBITDA is the primary earnings measure used by management to evaluate the performance of the company’s business segments.

Forward-Looking Statements

Statements made in this release that are not statements of historical or current facts, such as those under the heading “Outlook and Guidance,” 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 “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, as well as those discussed under the “Risk Factors” and “Forward Looking Statements” section of Premier’s IPO Prospectus, dated September 25, 2013, filed with the SEC and available on Premier’s website at http://investors.premierinc.com. Forward looking statements speak only as of the date they are made, Premier undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after that date.

(Tables Follow)

11

Premier, Inc.

Consolidated Statements of Income

(Unaudited)

(In thousands, except pershare data)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2013			2012 (a)			2013 (a)			2012 (a)
Net revenue:
Net administrative fees	$	102,130		$	120,630		$	245,706		$	238,119
Other services and support	58,197			50,635			111,449			98,782
Services	160,327			171,265			357,155			336,901
Products	48,582			35,160			92,330			68,090
	208,909			206,425			449,485			404,991
Cost of revenue:
Services	29,017			25,590			56,505			49,670
Products	43,720			32,586			83,758			62,738
	72,737			58,176			140,263			112,408
Gross profit	136,172			148,249			309,222			292,583
Operating expenses:
Selling, general and administrative	73,126			61,436			135,769			117,168
Research and development	1,042			2,372			1,894			6,010
Amortization of purchased intangible assets	755			384			1,356			769
	74,923			64,192			139,019			123,947
Operating income	61,249			84,057			170,203			168,636
Equity in net income of unconsolidated affiliates	4,491			3,396			8,605			6,177
Interest and investment income, net	21			94			241			318
Gain on disposal of assets	—			—			4			—
Other income, net	4,512			3,490			8,850			6,495
Income before income taxes	65,761			87,547			179,053			175,131
Income tax expense	14,284			2,166			15,048			4,683
Net income	51,477			85,381			164,005			170,448
Add: Net (income) loss attributable to noncontrolling interest in S2S Global	(157		)	394			53			699
Less: Net income attributable to noncontrolling interest in Premier LP	(44,916		)	(83,784		)	(158,130		)	(167,201		)
Net income attributable to noncontrolling interest	(45,073		)	(83,390		)	(158,077		)	(166,502		)
Net income attributable to shareholders	$	6,404		$	1,991		$	5,928		$	3,946
Weighted average shares outstanding:
Basic	32,375			6,040			19,001			6,032
Diluted	32,375			6,040			19,001			6,032
(Loss) earnings per share attributable to shareholders (b):
Basic	$	(114.70	)	$	0.33		$	(195.46	)	$	0.65
Diluted	$	(114.70	)	$	0.33		$	(195.46	)	$	0.65

(a) After the completion of the Reorganization, Premier Healthcare Solutions, Inc. (PHSI) became a consolidated subsidiary of Premier, Inc. PHSI is considered the predecessor of the Company for accounting purposes, and accordingly, PHSI’s consolidated financial statements are included herein as Premier, Inc.’s historical financial statements.

(b) Loss per share attributable to shareholders includes an adjustment to net income attributable to shareholders of redeemable limited partners’ capital to redemption amount of $3,719.8 million for the three and six months ended December 31, 2013.

12

Premier, Inc.

Consolidated Balance Sheets

(In thousands, except share data)

	December 31, 2013			June 30, 2013*
	(Unaudited)
Assets
Cash and cash equivalents	$	158,059		$	198,296
Marketable securities	75,802			57,323
Accounts receivable	68,688			62,162
Inventories	16,116			12,741
Prepaid expenses and other current assets	27,232			25,466
Due from related party	2,212			1,650
Deferred tax assets	9,969			8,403
Total current assets	358,078			366,041
Property and equipment	124,096			115,587
Restricted cash	5,000			5,000
Marketable securities	174,824			—
Deferred tax assets	293,916			15,077
Goodwill	90,285			61,410
Intangible assets	10,672			4,292
Other assets	38,763			31,509
Total assets	$	1,095,634		$	598,916
Liabilities, redeemable limited partners’ capital and stockholders’ equity
Accounts payable	$	24,062		$	21,788
Accrued expenses	32,496			28,883
Revenue share obligations	49,182			10,532
Limited partners’ distribution payable	17,419			—
Accrued compensation and benefits	30,054			51,359
Deferred revenue	18,150			18,880
Current portion of tax receivable agreement	6,966			—
Current portion of notes payable and line of credit	20,432			12,149
Other current liabilities	13,279			1,557
Total current liabilities	212,040			145,148
Notes payable, less current portion	19,757			22,468
Tax receivable agreement, less current portion	179,111			—
Deferred compensation plan obligations	29,605			24,081
Deferred rent	15,902			15,779
Other long-term liabilities	5,592			6,037
Total liabilities	462,007			213,513
Redeemable limited partners’ capital	4,118,121			307,635
Stockholders’ (deficit) equity:
Series A Preferred stock, par value $0.01, 50,000,000 shares authorized; no shares issued and outstanding	—			—
PHSI common stock, par value $0.01, 12,250,000 shares authorized; 0 and 5,653,390 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively	—			57
Class A common stock, par value $0.01, 500,000,000 shares authorized; 32,374,818 and 0 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively	324			—
Class B common stock, par value $0.01, 600,000,000 shares authorized; 112,607,832 and 0 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively	—			—
Additional paid-in-capital	—			28,866
PHSI Common stock subscribed, 0 and 23,266 shares at December 31, 2013 and June 30, 2013, respectively	—			300
Subscriptions receivable	—			(300		)
(Accumulated deficit) retained earnings	(3,482,996		)	50,599
Accumulated other comprehensive loss	(15		)	—
Noncontrolling interest	(1,807		)	(1,754		)
Total stockholders’ (deficit) equity	(3,484,494		)	77,768
Total liabilities, redeemable limited partners’ capital and stockholders’ (deficit) equity	$	1,095,634		$	598,916

* After the completion of the Reorganization, Premier Healthcare Solutions, Inc. (PHSI) became a consolidated subsidiary of Premier, Inc. PHSI is considered the predecessor of the Company for accounting purposes, and accordingly, PHSI’s consolidated financial statements are included herein as Premier, Inc.’s historical financial statements.

13

Premier, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)

	Six months ended December 31,
	2013*			2012*
Operating activities
Net income	$	164,005		$	170,448
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	18,912			13,778
Equity in net income of unconsolidated affiliates	(8,605		)	(6,177		)
Deferred taxes	2,593			(2,912		)
Stock-based compensation	6,819			—
Changes in operating assets and liabilities:
Accounts receivable, prepaid expenses and other current assets	(17,446		)	(732		)
Other assets	(1,751		)	323
Inventories	(3,375		)	(1,844		)
Accounts payable, accrued expenses and other current liabilities	34,798			(15,447		)
Long-term liabilities	(321		)	4,130
Other operating activities	67			(46		)
Net cash provided by operating activities	195,696			161,521
Investing activities
Purchase of marketable securities	(231,121		)	(17,791		)
Proceeds from sale of marketable securities	37,689			61,551
Acquisition of SYMMEDRx, net of cash acquired	(28,688		)	—
Acquisition of Meddius, net of owner note receivable	(7,737		)	—
Distributions received on equity investment	6,800			6,644
Purchases of property and equipment	(26,019		)	(19,035		)
Other investing activities	—			(1,000		)
Net cash (used in) provided by investing activities	(249,076		)	30,369
Financing activities
Payments made on notes payable	(1,926		)	(6,831		)
Proceeds from S2S Global revolving line of credit	5,200			3,004
Proceeds from senior secured line of credit	60,000			10,000
Payments on senior secured line of credit	(60,000		)	—
Proceeds from issuance of Class A common stock	821,671			—
Purchase of Class B common units from member owners	(543,857		)	—
Proceeds from issuance of PHSI common stock	300			—
Proceeds from notes receivable from partners	12,726			—
Repurchase of restricted units	(2		)	—
Distributions to limited partners of Premier LP	(280,969		)	(183,200		)
Net cash provided by (used in) financing activities	13,143			(177,027		)
Net (decrease) increase in cash and cash equivalents	(40,237		)	14,863
Cash and cash equivalents at beginning of year	198,296			140,822
Cash and cash equivalents at end of year	$	158,059		$	155,685

* After the completion of the Reorganization, Premier Healthcare Solutions, Inc. (PHSI) became a consolidated subsidiary of Premier, Inc. PHSI is considered the predecessor of the Company for accounting purposes, and accordingly, PHSI’s consolidated financial statements are included herein as Premier, Inc.’s historical financial statements.

14

Premier, Inc.

Supplemental Financial Information

(Unaudited)

(In thousands)

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2013*			2012			2013			2012
Reconciliation of Pro Forma Net Revenue to Net Revenue:
Pro Forma Net Revenue	$	208,909		$	188,106		$	408,222		$	369,215
Pro forma adjustment for revenue share post-IPO	—			18,319			41,263			35,776
Net Revenue	$	208,909		$	206,425		$	449,485		$	404,991
Reconciliation of Pro Forma Adjusted EBITDA and Segment Adjusted EBITDA to Net Income and Operating Income:
Net income	$	51,477		$	85,381		$	164,005		$	170,448
Pro forma adjustment for revenue share post-IPO	—			(18,319		)	(41,263		)	(35,776		)
Interest and investment income, net	(21		)	(94		)	(241		)	(318		)
Income tax expense	14,284			2,166			15,048			4,683
Depreciation and amortization	9,198			6,619			17,556			13,009
Amortization of purchased intangible assets	755			384			1,356			769
Pro Forma EBITDA	75,693			76,137			156,461			152,815
Stock-based compensation	6,494			—			6,819			—
Acquisition related expenses	177			—			319			—
Strategic and financial restructuring expenses	1,041			1,364			2,881			1,918
Gain on disposal of assets	—			—			(4		)	—
Pro Forma Adjusted EBITDA	$	83,405		$	77,501		$	166,476		$	154,733
Pro Forma Adjusted EBITDA	$	83,405		$	77,501		$	166,476		$	154,733
Depreciation and amortization	(9,198		)	(6,619		)	(17,556		)	(13,009		)
Amortization of purchased intangible assets	(755		)	(384		)	(1,356		)	(769		)
Stock-based compensation	(6,494		)	—			(6,819		)	—
Acquisition related expenses	(177		)	—			(319		)	—
Strategic and financial restructuring expenses	(1,041		)	(1,364		)	(2,881		)	(1,918		)
Equity in net income of unconsolidated affiliates	(4,491		)	(3,396		)	(8,605		)	(6,177		)
	61,249			65,738			128,940			132,860
Pro forma adjustment for revenue share post-IPO	—			18,319			41,263			35,776
Operating income	$	61,249		$	84,057		$	170,203		$	168,636
Reconciliation of Non-GAAP Adjusted Fully Distributed Net Income:
Non-GAAP Adjusted Fully Distributed Net Income (pro forma):
Net income attributable to shareholders	$	6,404		$	1,991		$	5,928		$	3,946
Pro forma adjustment for revenue share post-IPO	—			(18,319		)	(41,263		)	(35,776		)
Income tax expense	14,284			2,166			15,048			4,683
Stock-based compensation	6,494			—			6,819			—
Acquisition related expenses	177			—			319			—
Strategic and financial restructuring expenses	1,041			1,364			2,881			1,918
Net income attributable to noncontrolling interest in Premier LP	44,916			83,784			158,130			167,201
Non-GAAP adjusted fully distributed income before income taxes	73,316			70,986			147,862			141,972
Income tax expense on fully distributed income before income taxes	30,060			29,104			60,623			58,209
Non-GAAP adjusted fully distributed net income (pro forma)	$	43,256		$	41,882		$	87,239		$	83,763

* Note that actual results are presented for the three months ended December 31, 2013

# # #

15

EX-99.2

Exhibit 99.2

FISCAL 2014 SECOND-QUARTER CONFERENCE CALL TRANSCRIPT

FEBRUARY 13, 2014 / 05:00 PM EST

On February 13, 2014, Premier, Inc. hosted a conference call to discuss financial results for the fiscal 2014 second quarter, ended December 31, 2013.  The following transcript is an interpretation of the statements made on the call. The actual conference call may have differed slightly.

CORPORATE PARTICIPANTS

Jim Storey Premier, Inc. - VP IR

Susan DeVore Premier, Inc. - President & CEO

Craig McKasson Premier, Inc. - CFO

CONFERENCE CALL PARTICIPANTS

Mike Minchak  JPMorgan - Analyst

Robert Willoughby Bank of America Merrill Lynch - Analyst

Jamie Stockton Wells Fargo Securities - Analyst

Jeff Garro William Blair & Company - Analyst

Michael Cherny ISI - Analyst

PRESENTATION

Operator

Good afternoon and welcome to Premier, Inc.’s fiscal 2014 second quarter earnings conference call. As a reminder, this conference call is being recorded. The call will be archived and available via webcast on the Company’s website in the section entitled Investors.

(Operator Instructions)

It is now my pleasure to turn the conference call over to Jim Storey, Vice President Investor Relations.

Jim Storey - Premier, Inc. - VP IR

Thank you, Tommy, and hello, everyone, and welcome to Premier, Inc.’s fiscal 2014 second quarter conference call. Our speakers today are Susan DeVore, President and Chief Executive Officer, and Craig McKasson, Chief Financial Officer. Susan and Craig will review the second quarter performance and then discuss the outlook for the full year ending June 30, 2014, then we will open the call to questions.

Before we get started, I want to remind everyone that copies of our press release and the supplemental slides accompanying this conference call are available on the Investor Relations section of our website at www.premierinc.com. I also want to remind everyone that management’s remarks today contain certain forward-looking statements and that the actual results could differ materially from those projected.

These forward-looking statements speak as of today and we undertake no obligation to update them. Factors that might affect future results are discussed in our filings with the SEC, and we encourage you to review these detailed Safe Harbor and risk factor disclosures.

Please also note that where appropriate, we will refer to non-GAAP financial measures such as EBITDA, segmented-adjusted EBITDA, and adjusted fully distributed net income to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are included in our earnings release. Now, let me turn the call over to Susan DeVore.

Susan DeVore - Premier, Inc. – President & CEO

Thanks, Jim, and thank you all for joining our call today to discuss our fiscal second quarter results. This was our first full quarter operating as a public company under our new structure. Our management team is very pleased with these results, which I believe demonstrate the numerous drivers of growth we have available to us as an organization, and position us well for the second half of our fiscal year and beyond. They are also in line with our expectations and in line with the guidance we issued in November for the full fiscal year.

Before we begin reviewing the quarter, I just want to call out a balance sheet adjustment that we made and reported in today’s press release. This relates to how we value our members’ ownership in Premier on our balance sheet, which we historically have recorded at book value, but now with our IPO completed we will be required to record at the greater of book value or fair value. Craig will give you some details on the accounting because it does impact some numbers on the balance sheet as well as the GAAP earnings per share amount, but I just wanted to touch on it quickly. This is a non-cash balance sheet adjustment, has no impact on how we report our pro forma earnings, and doesn’t reflect any change in our operating structure or our member relationships. So, let’s move on.

As many of you realize, our Company stands really at the center of this country’s massive rapidly evolving healthcare industry.  We believe we are helping lead the transformation by working on the inside of many of our leading health systems and collaborating together to drive solutions to the many cost, quality, safety and outcome improvement challenges that they face in this reform environment. Ours is a mutual success in that it drives actionable solutions for our members while at the same time generating growth for our Company and value for you, our shareholders.

So, on this quarter’s call and as part of our discussion of results, I want to talk more about these solutions and actions, how they are helping our members, and how they are driving our growth. Let’s start with the quarter’s financial highlights.

As you all know, our operations complement each other and they represent a broad set of solutions for our members. We report our financial results in two business segments, Supply Chain Services and Performance Services.

For clarity, I will be making comparisons between our second quarter ended December 31, 2013, and year-ago pro forma results, which have been adjusted to reflect the impact of our organization and IPO, which was completed on October 1. We believe that this treatment provides the most meaningful assessment of year-over-year performance.

I am very pleased to report that both segments delivered results in the quarter that were in line with expectations. Supply Chain Services delivered a 10% revenue gain from a year ago, while revenue for Performance Services increased 15%, combining to drive consolidated revenue to an 11% gain from last year. Adjusted EBITDA performance was likewise right on target. Supply Chain Services rose 5% and performance services climbed 29%, producing an 8% overall adjusted EBITDA gain from a year ago.

So, let’s look a little bit deeper into each reporting segment. Within Supply Chain Services, we experienced strong revenue growth from the direct sourcing and specialty pharmacy businesses, which are two of our newer growth investments. Combined, these businesses produced 38% top-line growth in the quarter from a year ago, and they now represent roughly

2

one-third of our Supply Chain Services revenue. I think it is appropriate to spend a little bit more time discussing these new growth drivers.

We’ve seen strong uptake of our specialty pharmacy offering, which we put in place not to compete per se in the specialty pharmacy space, but to provide a solution for our members to help manage their high-cost, chronic populations after discharge from the hospital. Our specialty pharmacy offering allows members to private label these high-cost pharmaceuticals, and more importantly to keep track of their patients throughout their treatment regimen. It is a key step in preventing readmissions. And given our size and scale, we are able to provide this unique infrastructure and we are able to obtain critical limited and restricted access pharmaceuticals for our members, including now access to 108 restricted distribution drugs.

Moving to our direct sourcing business, it also demonstrates our objective of diversification within the healthcare supply chain, so that we can drive greater and greater savings to our members and top-line growth for us. We bought the direct sourcing company in response to pricing inefficiencies that our own analytics identified in several commodity product categories. This has been a particularly valuable solution for our members, driving 10% to 20% savings, and it is helping us to continue reducing total cost for our members while generating additional growth for us.

When we look at other second quarter contributors in our Supply Chain Services segment, we also experienced continuing growth in the Alternate Site GPO space. Alternate Site delivered gains in both purchasing volume and new members, including long-term care facilities, physician practices, ambulatory settings and non-healthcare sites like education. GPO net administrative fees were unchanged from a year ago, reflecting the typical lag time associated with the conversion of new members relative to the loss of volume from departed members who did not participate in the Company’s reorganization and IPO. I am pleased, particularly in light of the hospital utilization trends we touched on last quarter, and which are persisting, that we continue to experience good existing acute-care member volume in the quarter, which helped hold net admin fees steady. And we expect new member ramp ups to continue through the second half of the year, providing another driver of Supply Chain Services growth. So, as I said, second quarter revenue growth of 10% for Supply Chain Services was on target with expectations, and I believe we are well-positioned in this segment for the second half of the fiscal year.

Moving now to our Performance Services segment, revenue there grew at 15% in the quarter and EBITDA grew at almost 30%. We continue to see increased demand for our SaaS-based solutions, our advisory services, and our performance improvement collaboratives, as health systems are really searching for solutions that will help them prepare for the changing delivery and payment models, and particularly this shift towards population health management.

On that note, I’d like to spend a few minutes to discuss three very specific programs that are providing solutions while at the same time strengthening the collaborative, co-innovate relationship we enjoy with our members, and also generating growth for our Company.

First, as we expect to announce tomorrow, the Greater New York Hospital Association is expanding its partnership with Premier, leveraging our leadership in population health management services to implement new population health analytics and advisory service programs across its membership base. The Greater New York Hospital Association is our largest member owner, working with more than 300 hospitals and health systems in the northeast. And while they have been a longtime member of Premier group purchasing organization, this is a major step for the hospital association into the Performance Services side of our business. And I think it is an indication of the overall transformation occurring in healthcare.

This new partnership will focus on three interrelated areas. One is analytics for population health management, that will involve the installation of our PopulationAdvisor solution at participating Greater New York members who have risk-

3

based insurance agreements. The objective is to drive advanced insights on the cost and services use of defined patient populations.

The next is Advisory Services, wrap-around services for population health management, in which Premier will support a collaborative program of Greater New York Hospital Association member safety net hospitals, executing on ways to restructure their primary care and other services to better manage the health of defined populations.

And, third, is policy research for inpatient services. Using our combined databases and our combined deep experience, Greater New York Hospital Association and Premier will conduct a comprehensive study of the marginal cost of complications of care, such as treating hospital-acquired infections. Understanding the potential savings associated with activities to improve quality in patient safety is expected to help hospitals and policy makers alike prioritize those activities.

The second new program I want to discuss is our recent announcement related to the evolution of our PremierConnect platform and applications, which now include a data warehousing solution that we call PremierConnect Enterprise. As you know, PremierConnect is our data analytics platform and family of applications that support all of our businesses. We announced earlier this month the official launch of PremierConnect Enterprise. It’s a next-generation cloud-based enterprise data warehouse, provided as a software-as-a-service offering that we are making generally available to our members. Seven of our members have been working with us to incubate this capability over the past two years.

We believe that PremierConnect Enterprise will be unique solution in the industry to meet the needs of our providers as they strive to become information-driven enterprises. While many of our members have successfully implemented multiple solutions for their business intelligence and reporting needs, PremierConnect Enterprise is an end-to-end business intelligence platform and set of services that allow them to take the next step in acquiring and transforming data that is stored in the many transactional systems across the provider footprint.

The solution set in PremierConnect Enterprise includes five things. One, it is a cloud-based enterprise data warehouse and optimized storage of big data that scales and evolves quickly without a member having to expand their own resources. Two, it has an ability to acquire, standardize, transform, and integrate payer and provider-based data; that means clinical data, claims data, billing data, without a big investment on the part of the member. Third, it provides action-oriented analytics and predictive insights that are designed to manage the enterprise across the continuum of care. Four, a data alliance collaborative comes with it, and that is a national provider-led community developing and sharing knowledge and assets to address future requirements and needs. Lastly, it includes transformational services that build new competencies including operational and technical agility, and those can be very hard to hire.

Our initial members have shown early success with the offering and we have received strong interest from others in the member base. Most of our members are generally looking to implement data warehouses to, among other things, identify sources of revenue, of growth, of long-term value. They’re trying to align the focus on performance across their organizations, they’re all trying to reduce cost while improving outcomes, and they’re moving to understanding the risks of populations for whom they are accountable.

We believe PremierConnect Enterprise is different from other offerings in the market, given that it was designed by us in partnership with our members; it is truly vendor-agnostic, capable of including data from all vendors, cleaning it, normalizing it; it is payer-neutral, capable of receiving and using data from all payers; and it is scalable, accessible to our entire alliance and able to communicate with all of our members’ systems.

The third program I want to highlight focuses on our performance improvement collaboratives. As you will note, the performance improvement collaborative is part of each of the initiatives I just discussed. In fact, we believe one of our

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true differentiators is our collaboratives which have proven to be very successful. Premier collaboratives allow our members to address a common problem, figure out how to measure it, and then accelerate the speed and scale at which the problem gets addressed and solved. We have approximately 850 hospital members participating in at least one of our collaboratives.

Just earlier today, we provided the news media with an update on our QUEST collaborative, which stands for quality, efficiency, safety, and transparency. QUEST is the largest multi-dimensional and multi-year collaborative designed to help hospitals and health systems reliably deliver the most efficient, effective, and caring experience for patients on a consistent basis. Together, our QUEST hospitals transparently share their data. They define a common framework with consistent measures of top performance, something that has never existed before in healthcare.

So, having 350 hospitals working together to rethink the ways of providing care leads to breakthroughs that are implemented quickly and broadly and consistently. It fosters system-wide excellence and ensures that the progress gets locked in and made permanent.

So, this is how QUEST hospitals are collectively achieving big system-wide improvements. The data we share today shows that over the program’s first five-and-a-half years, QUEST participants reduced health care spending by nearly $11.65 billion. They prevented an estimated 136,000-plus deaths; over the program’s past three-and-a-half years prevented almost 18,000 instances of harm; and over the past two-and-a-half years prevented almost 41,000 readmissions, and that’s just some of the findings.

So, I highlight these three programs, our partnership with Greater New York, our PremierConnect Enterprise offering, and QUEST, because these examples define the essence of Premier, who we really are, why we are uniquely different and what we are striving to achieve.

We are working from the inside with our hospital partners to transform the way health care is delivered in the US. We’re all about reducing costs, improving quality, increasing efficiencies, reducing harm, and doing it across the entire healthcare continuum, and we’re doing it in partnership with our members through broad-based big data analytics that we are turning into actionable intelligence.

Overall, we are very happy with the trends we are seeing related to what I referred to before, our solutions in action, and taken individually, I think the results we have reported for our different revenue segments stand for themselves. Taken as a whole, I think you can see the real power of having a broad, diversified, integrated platform of solutions that complement each other and deepen our relationships with our members, and then scale the solutions to everybody else.

I also believe that this kind of progress drives greater revenue diversification. For our second quarter, revenue from GPO net administrative fees represented less than half of our total revenue for the first time, while at the same time we achieved our revenue and EBITDA targets. As we continue to innovate and build new solutions for our members across all of our platform, I believe this diversity of revenue drivers will increasingly benefit us.

Before I turn the call over to Craig, I want to spend a few moments on our acquisition strategy. As you know, one of the key reasons we went public was to provide capital necessary to invest in the applications and solutions that are necessary for our members to successfully meet the challenges of the changing industry. We’re doing it through acquisitions, through partnerships and through co-innovation with our members. We’ve got a very receptive member channel that allows us to test, to acquire, and to rapidly scale innovative solutions.

Last summer we acquired SYMMEDRx, it’s a contract management and data services company that assists our members in their efforts to lower their cost structure in the very high-cost area of physician preference. That’s a real challenge for

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our members. When we acquired SYMMEDRx, it was servicing 20 clients. As I mentioned on our last call, after just two months we had increased that number to 26, and had many more expressing interest. Today, we have a total of 39 members actively using our SYMMEDRx service, including 10 who are using it as part of a large cost reduction initiative. Overall, these engagements are targeting in excess of $60 million in cost reduction, and the pipeline of interest is still growing.

I will also point out, as a demonstration of our strong member relationships, SYMMEDRx was actually brought to our attention by a member who was using it and wanted to see it implemented across our platform. It is a great example of how we continue to work in partnership with our members to solve their problems.

At the end of October, we also acquired Meddius. Meddius is a data acquisition and integration-as-a-service company that spans multiple hospital transaction systems, including ERP, materials management, electronic health records, and patient accounting. Given our members’ growing need to acquire data from all of their transactional systems, including the expanding ambulatory assets, we acquired Meddius, which we were already using in our SafetyAdvisor product to automate our data acquisition process and power our performance services offerings. Meddius won’t have a significant standalone financial impact, but its real-time technology will be an incredibly important part of our plan to automate our data acquisition process across our core informatics SaaS-based products, as well as PremierConnect Enterprise. Integration of this company, Meddius, was substantially completed earlier this year.

So, our capital deployment strategy is occurring in a very deliberate and thoughtful way. We are actively and prudently seeking opportunities to put our capital to work. In terms of size and scale, we are very comfortable looking across the spectrum at companies both big and small in areas including alternate site, supply chain analytics and workflow, population health management, data acquisition and management, and ambulatory clinical integration, among others.

So, in summary, I think we are in a great position to continue partnering with our members and customers to innovate, to collaborate, to create new products and services that will be needed in the current healthcare system, and into the future in the dynamically changing health care system. As I mentioned, we think this is the right thing to do in today’s environment. These solutions will help generate cost savings and quality improvement among our members, and they will also represent a multitude of growth opportunities for Premier for years to come.

With that, I’d like to turn the call over to Craig McKasson, our Chief Financial Officer, to give you more detailed review of our financial results for the quarter.

Craig McKasson - Premier, Inc. - CFO

Thank you, Susan. I’ll plan to keep my comments brief, but I would like to start with a review of the balance sheet adjustment that Susan referenced. It might be useful for you to take a look at our balance sheet in the financial tables of our press release as I review.

As we have finalized the impact of the reorganization and IPO, given that this is our first filing in the post-IPO structure, we identified and reviewed with our independent auditors an update in the reporting of redeemable limited partners’ capital on our balance sheet.

In an organizational Up-C structure, we operate under the controlled company exception that allows for the majority of our board of directors to be comprised of executives from our member owners. Given this, we reflect the member owners’ capital account as redeemable limited partners’ capital in temporary equity, as opposed to permanent stockholders’ equity on the balance sheet, and, thus, you’ll see it depicted above our equity accounts. The redeemable limited partners’ capital balance and temporary equity is recorded at the greater of book value or the redemption amount per the limited

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partnership agreement prior to and subsequent to the reorganization and IPO. However, following the IPO, the member owners can now exchange their Class B common units that are eligible for exchange into cash or Class A common shares of stock, and the value of that is currently greater than the book value redemption amount that the limited partnership agreement provides.

As a result, we are reflecting a significant increase in redeemable limited partners’ capital at December 31, 2013, in the amount of $3.9 billion to reflect it at its redemption value, which is equal to the fair value of our Class A common stock based on the December 31, 2013 share price of $36.76. There is also a corresponding offset to additional paid-in capital and retained earnings, which creates an accumulated deficit on the balance sheet. As Susan indicated, this all represents non-cash activity and does not impact our operating performance.

We have also assessed this balance sheet treatment of temporary equity on the calculation of earnings per share for GAAP purposes. To clear any confusion that you may have, since our presentation of GAAP earnings per share does not have a direct crosswalk in our financial tables, I would like to point out that the adjustment to fair market value on our balance sheet is included as a negative adjustment to earnings in the numerator of our calculation of GAAP earnings per share.

Given our decision to report redeemable limited partners’ capital at the greater of book value or the redemption amount, we will be amending our first quarter 10-Q to reflect the updated pro forma balance sheet and updated pro forma GAAP EPS amount as of September 30, 2013. And we will also be including an updated pro forma balance sheet and updated pro forma GAAP earnings per share amount as of June 30, 2013, as ‘other information’ in our second-quarter 10-Q that we intend to file by the end of tomorrow.

On a prospective basis, since our balance sheet will reflect the redemption amount of redeemable limited partners’ capital, and that amount will be impacted by changes in the market value of our stock, our GAAP EPS will reflect any changes to this amount as well. Since we focus on pro forma adjusted fully distributed earnings per share, none of these prospective GAAP EPS calculations affect that reporting metric.

Now I would like to return to review of our second-quarter financial performance. What I will walk through for you are our comparisons of our current fiscal second-quarter results to last year’s results on a pro forma basis. The reconciliations with GAAP results are available in the press release we issued today and in our 10-Q filing with the SEC which, as I mentioned, we expect to file by the end of day tomorrow.

Net revenues for the quarter of $208.9 million are up 11% from year-ago pro forma numbers. These results are comprised of $150.9 million contribution from our Supply Chain Services business segment, which is up 10% year-over-year, and $58.0 million from performance services, up 15% over the prior year.

Adjusted EBITDA of $83.4 million represents an 8% increase from year-ago pro forma numbers, with Supply Chain Services adjusted EBITDA increasing 5% and Performance Services segment adjusted EBITDA up 29%. As discussed on our first-quarter conference call, we do expect our EBITDA growth to be back-end weighted in the fourth quarter to some extent as a result of additional expense incurred in the prior-year fourth quarter.

As Susan described, we have numerous drivers of top-line growth, and their relative contributions impact our consolidated margin profile due to our mix of products and services. That said, our first-half performance was very much as expected, and our outlook for second half of the fiscal year has not changed. We expect EBITDA performance of our Supply Chain Services segment to benefit as we begin to see the impact of cash collections from purchasing by our newer GPO members, resulting from their continued progression and conversion to our contract portfolio.

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Looking at the bottom line, non-GAAP pro forma adjusted fully distributed net income totaled $43.3 million for the quarter, or $0.30 a share, compared with $41.9 million or $0.29 a share last year. As I have previously explained, because of our ownership structure, we provide what we call adjusted fully distributed net income, which represents net income adjusted for nonrecurring and non-cash items and then calculates income taxes assuming the entire company was a taxable C-corporation. It further calculates adjusted fully distributed earnings per share assuming all of the Company’s Class A and Class B common shares are held by the public and, therefore, included in the share count determination. This provides consistent comparability without the income and share variability that may result from ownership changes over time.

From a liquidity and balance sheet standpoint, for the first six months of fiscal 2014 we generated cash flow from operations of $195.7 million, an increase of $34.0 million from last year. As of December 31, 2013, we have cash, cash equivalents, and marketable securities of approximately $408.7 million at our disposal, and we currently have no amount outstanding on our credit facility. As most of you probably know, our business continues to produce strong cash flow, and we expect over 30% of our adjusted EBITDA to translate to free cash flow on an annual basis.

Capital expenditures for the first six months of the fiscal year totaled $26.0 million, an increase of 37% from the same period a year ago, and in line with our annual capital expenditure estimate of approximately $54.0 million. The increase in capital expenditures for this six-month period ended December 31, 2013, is mostly due to hardware and capitalized internally-developed software associated with the launch of PremierConnect enterprise, as well as other SaaS informatics products.

As Susan pointed out, we intend to deploy capital to invest in new technologies and capabilities to meet the increasing needs of our members. For the first half of fiscal 2014, we deployed approximately $37.0 million for the acquisitions of SYMMEDRx and Meddius, and we continue to work an active pipeline of potential capital deployment opportunities.

Turning to guidance, we are reiterating the fiscal 2014 full-year outlook we provided following our first-quarter results. The guidance assumes continued growth in our Performance Services segment, driven across our SaaS informatics products, advisory services, and performance improvement collaboratives. It also assumes steady and stable growth of our Supply Chain Services segment through the continued growth of our direct sourcing and specialty pharmacy businesses, the addition of acute and alternate-site GPO members, the ramp-up of those newer GPO members, and deeper penetration of existing members’ supply spend.

To emphasize Susan’s earlier comments, we believe that the nature of our contracted SaaS business in Performance Services, combined with the deep and long-standing engagement with our members on the Supply Chain Services side of our business, provides us with high visibility into our expected results. For 2014 in particular, given our reorganization and IPO, this visibility enabled us to maintain confidence in both our goals for this fiscal year and in our longer-term growth expectations.

With that, I’ll turn the call back over to Susan.

Susan DeVore – Premier, Inc. - President & CEO

So, with that — thank you, Craig. Operator, we’d now like to open the call for questions.

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QUESTIONS AND ANSWERS

Operator

(Operator Instructions)

Your first question is from the line of Lisa Gill with JPMorgan.

Mike Minchak - JPMorgan - Analyst

Thanks, it’s actually Mike Minchak in for Lisa. Just a couple of questions. First, with respect to the net admin fees, you talked about the ramp there based on the new business that you brought on. Can you talk about what you’re expecting there in terms of what normalized growth rate looks like and how long you think it’s going to take to ramp up to that range?

Craig McKasson - Premier, Inc. - CFO

Yes. As Susan mentioned and as we talked about, our net admin fees were flat for the quarter. And as we described, that does reflect the lag in conversions relative to loss of volume from members. The conversion process does take some time, so it results in a gradual revenue ramp up. The fee gap that was created by a revenue loss associated with members who chose not to participate in the reorganization and the ramp-up of those new members is beginning to close. So, we are actually pleased that we have been able to hold net admin fees steady, particularly in light of the hospital utilization trends that we talked about. And we expect to see growth improve in the second half of the year.

Mike Minchak - JPMorgan - Analyst

Okay. Great. And then just on the Supply Chain Services side, as well. The growth in specialty and direct sourcing in the quarter was impressive. Just wondering if you can talk about the composition of growth in the specialty side? Is it an increase in the number of customers you’re seeing signing up for that offering, or is it greater purchasing from existing customers?

Susan DeVore - Premier, Inc. - President & CEO

It’s both. So, on the specialty pharmacy side we have new members and we also have, once we get a new member, a ramp-up period in the specialty pharmacy business. The same is true on the direct sourcing business. It’s new members and the ramp-up of the purchase of those commodity products.

Mike Minchak - JPMorgan - Analyst

Great. Thanks for the comments.

Operator

Your next question is from the line of Robert Willoughby with Bank of America Merrill Lynch.

Robert Willoughby — Bank of America Merrill Lynch - Analyst

Hi, Susan and Craig. You touched on it with a comment, I think, on the strong acute volume despite the weak utilization trends continuing. Are these customers purchasing more through you now that they’re holders of the public equity? Is that incentive in place now, or is it too early to tell if their behavior is changing for that reason or is there another reason in your mind why your experience is a bit stronger than the utilization would imply?

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Susan DeVore — Premier, Inc. - President & CEO

Yes and No. What I would say is that their decisions around usage of contract are really to drive their own costs down. And so while we track utilization, what we are seeing is penetration of our contracts in the acute care setting and in the alternate site setting, and it is really driven because they all have significant cost imperatives, and they’re looking for savings both from our direct sourcing business and from our GPO portfolio. We do not see utilization really affecting the penetration levels. It really is this drop off of members who did not come with us into the reorganization and IPO versus the new member ramp up.

Robert Willoughby — Bank of America Merrill Lynch - Analyst

Do you give, Susan, any metrics on just contract compliance? What maybe the average experience is? I would imagine that does tick higher over time.

Susan DeVore — Premier, Inc. - President & CEO

When we were on the road show, Bob, we talked about the way we look at contract penetration, which is really by portfolio. So, we have a high-compliance portfolio and then we have big categories. We are thinking through the metrics we’ll report out on an annual basis, but I would say that our field teams are focused everyday on how do we drive the penetration of our contracts and all settings to lower costs.

Robert Willoughby — Bank of America Merrill Lynch — Analyst

Okay. And I had envisioned you putting cash to work maybe more quickly after the IPO. I know it’s been like a quarter and a half or so, but can you speak to the pipeline? Could you step up some activity here? Would you envision any larger deals potentially happening in second half?

Craig McKasson - Premier, Inc. - CFO

Yes. Robert, this is Craig. Great question. We definitely, as I mentioned, have a very active pipeline. We’re looking at a number of things and, as Susan discussed, we’re very open to both smaller acquisitions, as we have continued to do historically, and larger acquisitions, and so we are hopeful that we will have something to talk to you about in the future.

Susan DeVore — Premier, Inc. - President  & CEO

And we told everybody we have a very disciplined process and framework for evaluating acquisitions and figuring out how to test them and then how to scale them. So, we have a lot of activity in that area.

Robert Willoughby — Bank of America Merrill Lynch - Analyst

Okay. Maybe lastly, Craig, you mentioned some restatements would be forthcoming. Are these the full financial statements? Will there be footnotes, anything, meaningful change in the footnotes, or is it strictly just the balance sheet and modest tweak to the GAAP earnings number?

Craig McKasson — Premier, Inc. - CFO

Yes. To clarify, Bob, we are updating and restating the pro forma balance sheet and pro forma GAAP EPS line that was in the pro forma financials. It is not a restatement of our historical actual financial results. And so there is a footnote in the first quarter 10-Q for the period ended September 30, 2013, that includes that pro forma information. That is what will be updated in the amended 10-Q.

Robert Willoughby — Bank of America Merrill Lynch - Analyst

Okay. Thank you very much.

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Operator

Your next question is from the line of Jamie Stockton with Wells Fargo.

Jamie Stockton - Wells Fargo Securities - Analyst

Good evening. Thanks for taking my questions. I guess maybe just on population health, you guys have talked about this new data warehouse platform with analytics that you have been incubating for a couple of years. Can you give us a sense for what portion of hospitals you think have actually made decisions on that front today, just at a very high level?

Susan DeVore — Premier, Inc. - President & CEO

That is a great question, Jamie. What I would say is that many, many of our health systems have been focused first around electronic health records and getting to meaningful use. And they are now turning their attention to looking at the multi-millions they are going to need to spend to get real data intelligence and insight, meaning data warehousing. And they are looking at the numbers of FTEs and the capital costs required to build that themselves. So, I can’t give you any hard and fast numbers, but I would say big IDNs are certainly down this path, and all are going to have to figure out how to connect data to change the way care is delivered. So, I think it’s the next big wave of capital spend in technology for a lot of our health systems.

Jamie Stockton - Wells Fargo Securities - Analyst

It seems like the big IDNs have historically, if they’ve done something from a data warehouse standpoint, they’ve built it themselves. Are you seeing an indication from some of your existing clients, either on the Supply Chain Services or Performance side, that they’re willing to start to migrate to more of a commercial solution from a data warehouse standpoint?

Susan DeVore - Premier, Inc. - President & CEO

Yes. It is a great question, Jamie. It is exactly why we formed the data alliance collaborative, because in the data alliance collaborative we had a couple that had built their own and then we had some that were interested in buying it as a service. And all of them were interested in having common data models so that they could share data assets. And so what I would say is we have some, like Catholic Health Partners and Fairview and Bay State, that are using it as a service today. They’re sort of our first three roll outs and then we have a few others that are in the data alliance that have built their own. And I think both will occur in the marketplace. But we think an important trend is the capital costs associated with building their own, and then the talent required and all the data mining, cleansing, normalizing, standardizing, and comparing. That takes a lot of time and effort and we’ve been doing it for years. So, we think there will be a lot of interest in buying that as a service.

Jamie Stockton - Wells Fargo Securities - Analyst

Okay. Thank you.

Operator

Your next question comes from the line of Jeff Garro with William Blair.

Jeff Garro - William Blair & Company - Analyst

Good afternoon. Thanks for taking the questions. I wanted to follow up on Jamie’s question on PremierConnect Enterprise. I was looking to see if there are any specific sales and marketing plans for this that differ from the rest of your portfolio and how long you expect the sales cycle to be?

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Susan DeVore — Premier, Inc. - President & CEO

We do have a specific launch and marketing and sales program around PremierConnect Enterprise, with all of the materials and targeting that goes with that. It does tend to be a little bit of a lengthy sales cycle because these are big decisions that health systems are making. We, in a disciplined way, built the launch and the timing for general availability to our members after we worked on this for a couple of years in the data alliance collaborative. So, we are full force in the marketing and sales mode for the enterprise data warehousing.

Jeff Garro - William Blair & Company - Analyst

Good to hear. The follow-up would be, so given the stage you’re at, how quickly can you implement a contract after signing one? How long will that implementation period be? And given the scalability you talked about with PremierConnect Enterprise, is there a way for clients to start small and build up, and do you also have the kind of financial relationship build-up gradually over time?

Susan DeVore — Premier, Inc. - President & CEO

Yes. We think it generally takes probably 6 to 12 months in a sales cycle and then the ramp-up time varies depending on the IDN or health system and where they are, but ramp up is actually pretty quick, in a two- to three-month timeframe. And now that we’ve done it in these couple of places, and we’re doing it hopefully in a few more big IDNs, we will be able to really streamline that process.  We started small and it will build. But I think one of the advantages we have is that for 20 years we’ve been taking data from every transactional system, every vendor, every payer, and so that ability to see every data pattern out there, we’ve been doing for a long time.

Jeff Garro - William Blair & Company - Analyst

Great. And then one just last one. Can you remind us what the split is going to be between recurring revenue and one-time revenue as your clients adopt this PremierConnect Enterprise product?

Craig McKasson — Premier, Inc. - CFO

We sell that as software-as-a-subscription, and so any implementation is bundled into the subscription over the term. So, unless we do separate advisory service wraparound components, it would be embedded in the subscription component of the offering.

Jeff Garro - William Blair & Company - Analyst

Great. Thanks again for taking the questions, guys.

Operator

Your next question comes from the line of Michael Cherny with ISI Group.

Michael Cherny - ISI Group - Analyst

Good afternoon, guys and hopefully the snow’s not too bad. It’s pretty bad up here in New York, too.

Susan DeVore  — Premier Inc - President & CEO

Yes. It’s bad here for us. We are not used to it.

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Michael Cherny  — ISI Group - Analyst

Well, drive safely. I know it can be tough. Obviously, it’s been a whirlwind few months for you guys coming public. I assume that the conversations you had with your customers, particularly large ones you’ve had with them, as well as potential prospects about what your business now is as a public entity versus a private. Maybe give us any color on what that means for the competitive dynamics in the market. How have both your existing customers as well as new prospects responded to you as a public company? Have there been any changes, and have you seen any churn in the customer base, or particularly new wins post the IPO?

Susan DeVore — Premier, Inc. - President & CEO

Yes. A lot of questions in there. I think what I would say, generally, is we historically always had very much an execution focus. So, I don’t think our existing customers or new customers are experiencing much different in terms of how we manage the business, how we run the business. I do think that our members, and also potentially new members, do think that we have access to capital and can accelerate some of the investments and infrastructure that they might need to make, and we can share those in a scalable way. So, I think they’re very encouraged by that. I also think that our members are very much in need of connected and integrated data. So, they see now more than ever the connection between supply chain and performance services and cost and quality. As to the question of new members and the question of maybe cross selling, when I look at the largest 12 transactions that occurred over the quarter, six of them involved members who are using both Supply Chain Services and Performance Services, and four of them involved Performance Services now being used by folks who were previously only on the Supply Chain side of the business. And when I describe the Greater New York relationship, that’s the first time that Greater New York, a large network member, has engaged with us in population health management kinds of services. So, we are seeing a real attractiveness to this integrated set of solutions.

Michael Cherny - ISI Group - Analyst

Thanks. That’s helpful. And then maybe diving in back a bit to the utilization question a different way, just because obviously there’s been so many questions of comparisons recently both near-term and temporal because of this lovely weather that’s hitting the entire country, and then longer term as you think about rollout of the Affordable Care Act and new lives coming in the system. So, as you think about positioning the business and preparing for that change in utilization, particularly the up-tick in utilization as we get more covered lives, what are your expectations in terms of what ACA could do for the business? And how are you targeting specifically some of those lives? Is it just through your existing customer relationships or is this also part of that compliance comment you made earlier?

Susan DeVore — Premier, Inc. - President & CEO

Again, Michael, lots of questions in one question. The exchanges were supposed to bring on 9 million, then it was 7 million, then it’s 6 million, now it’s 3 million and they’re saying it’s not the right mix. So I think I would say our health systems are wary of that growth potential. We have half of the states who have not expanded Medicaid, half who have. So, I think it will vary by geography. And I think that the cost pressures and the reimbursement cuts have continued.  So, cost reduction is really the driver of our members and they’re not counting on that increased utilization. They’re seeing flat utilization trends, and our data would indicate that as well. They’re seeing big expansion in ambulatory and outpatient. That speaks to, I think, the movement toward population health. And so, as we look at all of these trends we think cost reduction, safety improvement, quality improvement, population health and integrated data will be things they all need, regardless of how the exchanges play out or the different forms of reform that get implemented.

Michael Cherny - ISI Group - Analyst

Great. Thanks for all the color.

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Operator

And this concludes our question-and-answer session. I’d like to turn the conference back over to Susan DeVore for any closing remarks.

Susan DeVore — Premier, Inc. - President & CEO

Thanks so much, Operator. So, before we end the call, I’d like to leave you with three last thoughts.

First and foremost, Premier is transforming the healthcare industry and we’re doing it from the inside out. Today’s health systems are facing massive challenges and they need to find new and innovative ways to reduce costs, improve quality, improve safety, and produce better outcomes. Premier is culturally, strategically, operationally, and financially positioned to play the leadership role in addressing those challenges.

Second, we have multiple revenue drivers. I hope I explained it clearly on the call. We’re providing data-driven integrated solutions across the spectrum, attacking all those same pressing issues — cost, delivery and payment model changes, and population health management.

And, third and last, we’re just doing the right thing. Our mission hasn’t changed. Our mission continues to be to improve the health of communities. And we’re driving solutions that we believe will generate cost savings and quality improvements for our members. It will generate multiple growth opportunities for Premier and lasting and long-term value for our shareholders for years to come.

So, on behalf of the entire management team at Premier, Craig, and myself, I want to thank you for spending the time with us this evening and I look forward to talking to you again.

Thank you, Operator. You may end the call.

Operator

The conference is now included. Thank you for attending today’s presentation. You may now disconnect.

# # #

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EX-99.3

Exhibit 99.3

Second Quarter Fiscal 2014 Financial Results and Update February 13, 2014

1 Forward-looking statements and Non-GAAP financial measures Forward-looking statements—Certain statements made during this conference call and included in this presentation, including those related to our financial and business outlook and financial guidance, are “forward-looking statements.” Forward-looking statements may involve known and unknown risks, uncertainties and other factors that may cause the actual results 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. 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 risks and other factors that could affect Premier’s financial results is included, and updated, from time to time, in Premier’s periodic and current filings with the SEC, as well as those discussed in Premier’s IPO Prospectus filed with the SEC and available on Premier’s website. Forward looking statements speak only as of the date they are made. Premier undertakes no obligation to publicly update or revise any forward-looking statements. Non-GAAP financial measures—This presentation includes certain “non-GAAP financial measures” as defined in Regulation G under the Securities Exchange Act of 1934. Schedules are attached that reconcile the non-GAAP financial measures included in the following presentation to the most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles in the United States. The press release attached as an Exhibit to our Form 8-K filed with the SEC in connection with our earnings call, as well as our Form 10-Q for the quarter ended December 31, 2013 to be filed on or about February 14, 2014, provides further explanation and disclosure regarding our use of non-GAAP financial measures and should be read in conjunction with these supplemental slides.

Susan DeVore, President & CEO Overview and Business Update

3 Second quarter fiscal 2014 highlights1 Adjusted EBITDA up 8% to $83.4 million Supply Chain Services net revenue up 10% and adjusted EBITDA up 5% Adjusted fully distributed net income up 3% to $43.3 million Performance Services net revenue up 15% and adjusted EBITDA up 29% Completed acquisition of Meddius; integrated SYMMEDRx and doubled customer base Net revenue up 11% to $208.9 million (1) See Adjusted EBITDA, Segment Adjusted EBITDA and Adjusted Fully Distributed Net Income reconciliations to GAAP equivalents in Appendix; pro forma reflects the impact of the company’s reorganization and initial public offering

4 Industry trends and Premier strategic differentiation Member and industry needs Member co-innovation Intelligent and predictive analytics drive continuous improvement from the inside Visibility to cost and quality opportunities Vertical integration of supply chain Early leader in population health management Scale through shared infrastructure Premier strategic differentiation •Total cost reduction •Quality improvement across the continuum •Evolving delivery and payment models •Actionable data and information

5 Consolidated financial performance Net revenue (millions) Adjusted EBITDA (millions) $188.1 $208.9 Q2'13 Q2'14 $77.5 $83.4 Q2'13 Q2'14 11% 8%

6 Net revenue (millions) Adjusted EBITDA (millions) Supply Chain Services Performance Services Segment financial performance $80.8 $85.1 Q2'13 Q2'14 $137.5 $150.9 Q2'13 Q2'14 10% 5% $50.6 $58.0 Q2'13 Q2'14 $13.7 $17.7 Q2'13 Q2'14 15% 29%

7 Supply Chain Services growth drivers Strong contribution from direct sourcing and specialty pharmacy businesses – up 38% year over year Continued expansion into alternate site market Expect ramp-up of cash collections from new member conversions to increase in second half of year

8 Performance Services’ growth drivers Strong demand for SaaS-based products and solutions Increased use of advisory services Increased growth in performance improvement collaboratives

9 Expansion of GNYHA partnership Predictive analytics to drive advanced insights Advisory services for population health management Policy research for inpatient services

10 Launch of PremierConnect Enterprise Financial/claims Multi-source data Supply chain/ pharmacy/lab Clinical and outcomes C:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Supply Chain.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Supply Chain.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Supply Chain.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Quality.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Labor.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Safety.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Population Management.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Population Management.HIRES.jpgC:\Documents and Settings\bbowles\Desktop\Program Files\PremierConnect\logos\Brand architecture\Premier Population Management.HIRES.jpgENTERPRISE Cloud based, enterprise data warehouse Acquisition, standardization and integration of multi-source data New operational and technical competencies Knowledge sharing through Data Alliance collaborative

11 C:\Users\mburns\AppData\Local\Microsoft\Windows\Temporary Internet Files\Content.Outlook\QBOGRCB1\QUEST_six-circles_Rev 01.jpgQUESTAchievements of QUEST collaborative Prevented an estimated 136,375 deaths Reduced healthcare spending by nearly $11.65 billion Prevented approximately 40,808 readmissions Prevented approximately 17,991 instances of harm

12 Strategic acquisitions drive growth opportunities symm_logo_lgNearly doubled client base in less than 6 months Member channel allows us to rapidly expand capabilities, enhances speed to market, and augments Premier’s unique technology platform Real-time data acquisition and integration-as-a-service

Craig McKasson, Chief Financial Officer Financial Review

14 Balance sheet adjustments 2013Redeemable limited partners' capital4,118,121307,635Stockholders' (deficit) equity:Series A Preferred stock, par value $0.01, 50,000,000 shares authorized; no shares issued and outstanding——PHSI common stock, par value $0.01, 12,250,000 shares authorized; 0 and 5,653,390 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively—57Class A common stock, par value $0.01, 500,000,000 shares authorized; 32,374,818 and 0 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively324—Class B common stock, par value $0.01, 600,000,000 shares authorized; 112,607,832 and 0 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively——Additional paid-in-capital—28,866PHSI Common stock subscribed, 0 and 23,266 shares at December 31, 2013 and June 30, 2013, respectively—300Subscriptions receivable—(300)(Accumulated deficit) retained earnings(3,482,996)50,599Accumulated other comprehensive loss(15)—Noncontrolling interest(1,807)(1,754)Total stockholders' (deficit) equity(3,484,494)77,768Total liabilities, redeemable limited partners' capital and stockholders' (deficit) equity1,095,634$ 598,916$

15 Second quarter fiscal 2014 highlights1 Adjusted EBITDA up 8% to $83.4 million Supply Chain Services net revenue up 10% and adjusted EBITDA up 5% Adjusted fully distributed net income up 3% to $43.3 million Performance Services net revenue up 15% and adjusted EBITDA up 29% Completed acquisition of Meddius; integrated SYMMEDRx and doubled customer base Net revenue up 11% to $208.9 million (1) See Adjusted EBITDA, Segment Adjusted EBITDA and Adjusted Fully Distributed Net Income reconciliations to GAAP equivalents in Appendix; pro forma reflects the impact of the company’s reorganization and initial public offering

16 Cash flow and cash position as of December 31, 2013 Cash flow from operations of $195.7M, an increase of $34M from last year Cash, cash equivalents and marketable securities of approximately $408.7M Capital expenditures of $26.0M for 6 months, up 37% YOY primarily due to the launch of PremierConnect Enterprise and investments in SaaS-based solutions Capital expenditures in line with expectations of approximately $54M for fiscal year 2014

17 Pro forma net revenue: Supply Chain Services Performance Services Total pro forma net revenue $614 - $631M $231 - $238M $845 - $869M % yoy change 10% – 13% 13% - 16% 11% - 13% Non-GAAP pro forma adjusted EBITDA $335 - $355M 7% - 13% Non-GAAP pro forma adjusted fully distributed EPS $1.20 - $1.29 NA* Fiscal 2014 guidance1 1As of fiscal 2014 second-quarter conference call, 02/13/2014. For non-GAAP measures, see reconciliations to GAAP equivalents in Appendix. Pro forma guidance measures are “forward-looking statements.” For information regarding the use and limitations of non-GAAP financial measures and forward-looking statements, see “Forward-looking statements and Non-GAAP financial measures” at the front of this presentation. * Not applicable Premier, Inc. affirms full-year fiscal 2014 financial guidance:  

18 Guidance assumptions Continued growth in Performance Services driven by demand for: •SaaS-based products; •advisory services; and •collaboratives. Steady growth in Supply Chain Services driven by: •growth of direct sourcing and •specialty pharmacy businesses; •new member additions and conversions; and •increased same-store supply chain penetration.

Questions

Contact Investor Relations Jim Storey Vice President, Investor Relations jim_storey@premierinc.com Thank you

Appendix

Premier, Inc. Supplemental Financial Information 2013* 2012 2013 2012 Reconciliation of Pro Forma Net Revenue to Net Revenue: Pro Forma Net Revenue 208,909 $ 188,106 $ 408,222 $ 369,215 $ Pro forma adjustment for revenue share post-IPO — 18,319 41,263 35,776 Net Revenue 208,909 $ 206,425 $ 449,485 $ 404,991 $ Reconciliation of Pro Forma Adjusted EBITDA and Segment Adjusted EBITDA to Net Income and Operating Income: Net income 51,477 $ 85,381 $ 164,005 $ 170,448 $ Pro forma adjustment for revenue share post-IPO — (18,319) (41,263) (35,776) Interest and investment income, net (21) (94) (241) (318) Income tax expense 14,284 2,166 15,048 4,683 Depreciation and amortization 9,198 6,619 17,556 13,009 Amortization of purchased intangible assets 755 384 1,356 769 Pro Forma EBITDA 75,693 76,137 156,461 152,815 Stock-based compensation 6,494 — 6,819 — Acquisition related expenses 177 — 319 — Strategic and financial restructuring expenses 1,041 1,364 2,881 1,918 Gain on disposal of assets — — (4) — Pro Forma Adjusted EBITDA 83,405 $ 77,501 $ 166,476 $ 154,733 $ Pro Forma Adjusted EBITDA 83,405 $ 77,501 $ 166,476 $ 154,733 $ Depreciation and amortization (9,198) (6,619) (17,556) (13,009) Amortization of purchased intangible assets (755) (384) (1,356) (769) Stock-based compensation (6,494) — (6,819) — Acquisition related expenses (177) — (319) — Strategic and financial restructuring expenses (1,041) (1,364) (2,881) (1,918) Equity in net income of unconsolidated affiliates (4,491) (3,396) (8,605) (6,177) 61,249 65,738 128,940 132,860 Pro forma adjustment for revenue share post-IPO — 18,319 41,263 35,776 Operating income 61,249 $ 84,057 $ 170,203 $ 168,636 $ — $ — $ — $ — $ Reconciliation of Non-GAAP Adjusted Fully Distributed Net Income: Non-GAAP Adjusted Fully Distributed Net Income (pro forma): Net income attributable to shareholders 6,404 $ 1,991 $ 5,928 $ 3,946 $ Pro forma adjustment for revenue share post-IPO — (18,319) (41,263) (35,776) Income tax expense 14,284 2,166 15,048 4,683 Stock-based compensation 6,494 — 6,819 — Acquisition related expenses 177 — 319 — Strategic and financial restructuring expenses 1,041 1,364 2,881 1,918 Net income attributable to noncontrolling interest in Premier LP 44,916 83,784 158,130 167,201 Non-GAAP adjusted fully distributed income before income taxes 73,316 70,986 147,862 141,972 Income tax expense on fully distributed income before income taxes 30,060 29,104 60,623 58,209 Non-GAAP adjusted fully distributed net income (pro forma) 43,256 $ 41,882 $ 87,239 $ 83,763 $ * Note that actual results are presented for the three months ended December 31, 2013 Three Months Ended December 31, Six Months Ended December 31, (Unaudited) (In thousands)