EARNINGS (LOSS) PER SHARE |
(13) EARNINGS (LOSS) PER SHARE Basic earnings per share is computed by dividing net income attributable to stockholders by the weighted average number of shares of common stock outstanding for the period. Net income attributable to stockholders includes the adjustment recorded in the period to reflect redeemable limited partners' capital at the redemption amount, which is due to the exchange benefit obtained by limited partners through the ownership of Class B common units. Except when the effect would be anti-dilutive, the diluted earnings (loss) per share calculation, which is calculated using the treasury stock method, includes the impact of shares that could be issued under the outstanding stock options, non-vested restricted stock units and awards, shares of non-vested performance share awards and the effect of the assumed redemption of Class B common units through the issuance of Class A common shares. The following table provides a reconciliation of the numerator and denominator used for basic and diluted earnings (loss) per share (in thousands, except per share amounts): | | | | | | | | | | | | Year Ended June 30, | | 2020 | 2019 | 2018 | | | | Previous revenue standard (a) | Numerator for basic earnings (loss) per share: | | | | Net income from continuing operations attributable to stockholders (b) | $ | 598,119 |
| $ | 15,706 |
| $ | 191,040 |
| Net income (loss) from discontinued operations attributable to stockholders | 556 |
| (24,650 | ) | (158 | ) | Net income (loss) attributable to stockholders | $ | 598,675 |
| $ | (8,944 | ) | $ | 190,882 |
| | | | | Numerator for diluted earnings (loss) per share: | | | | Net income from continuing operations attributable to stockholders (b) | $ | 598,119 |
| $ | 15,706 |
| $ | 191,040 |
| Adjustment of redeemable limited partners' capital to redemption amount | (468,311 | ) | — |
| (157,581 | ) | Net income from continuing operations attributable to non-controlling interest | 161,318 |
| — |
| 224,548 |
| Net income from continuing operations | 291,126 |
| 15,706 |
| 258,007 |
| Tax effect on Premier, Inc. net income (c) | (40,154 | ) | — |
| (70,257 | ) | Adjusted net income from continuing operations | $ | 250,972 |
| $ | 15,706 |
| $ | 187,750 |
| | | | | Net income (loss) from discontinued operations attributable to stockholders | $ | 556 |
| $ | (24,650 | ) | $ | (158 | ) | Net income (loss) from discontinued operations attributable to non-controlling interest in Premier LP | 498 |
| — |
| (279 | ) | Adjusted net income (loss) from discontinued operations | $ | 1,054 |
| $ | (24,650 | ) | $ | (437 | ) | | | | | Adjusted net income (loss) | $ | 252,026 |
| $ | (8,944 | ) | $ | 187,313 |
| | | | |
| | | | | | | | | | | | Year Ended June 30, | | 2020 | 2019 | 2018 | | | | Previous revenue standard (a) | Denominator for basic earnings (loss) per share: | | | | Weighted average shares (d) | 67,035 |
| 59,188 |
| 53,518 |
| | | | | Denominator for diluted earnings (loss) per share: | | | | Weighted average shares (d) | 67,035 |
| 59,188 |
| 53,518 |
| Effect of dilutive securities: (e) | | | | Stock options | 329 |
| 577 |
| 275 |
| Restricted stock | 248 |
| 297 |
| 295 |
| Performance share awards | 67 |
| 207 |
| 252 |
| Class B shares outstanding | 55,935 |
| — |
| 83,000 |
| Weighted average shares and assumed conversions | 123,614 |
| 60,269 |
| 137,340 |
| | | | | Basic earnings (loss) per share: | | | | Basic earnings per share from continuing operations | $ | 8.92 |
| $ | 0.27 |
| $ | 3.57 |
| Basic earnings (loss) per share from discontinued operations | 0.01 |
| (0.42 | ) | 0.00 |
| Basic earnings (loss) per share attributable to stockholders | $ | 8.93 |
| $ | (0.15 | ) | $ | 3.57 |
| | | | | Diluted earnings (loss) per share: | | | | Diluted earnings per share from continuing operations | $ | 2.03 |
| $ | 0.27 |
| $ | 1.37 |
| Diluted earnings (loss) per share from discontinued operations | 0.01 |
| (0.42 | ) | (0.01 | ) | Diluted earnings (loss) per share attributable to stockholders | $ | 2.04 |
| $ | (0.15 | ) | $ | 1.36 |
|
| | (a) | The Company adopted Topic 606 effective July 1, 2018. Comparative results are presented under Topic 605. Refer to Note 2 - Significant Accounting Policies for more information. |
| | (b) | Net income from continuing operations attributable to stockholders was calculated as follows (in thousands): |
| | | | | | | | | | | | Year Ended June 30, | | 2020 | 2019 | 2018 | | | | Previous revenue standard (a) | Net income from continuing operations | $ | 291,126 |
| $ | 334,677 |
| $ | 258,007 |
| Net income from continuing operations attributable to non-controlling interest | (161,318 | ) | (200,907 | ) | (224,548 | ) | Adjustment of redeemable limited partners' capital to redemption amount | 468,311 |
| (118,064 | ) | 157,581 |
| Net income from continuing operations attributable to stockholders | $ | 598,119 |
| $ | 15,706 |
| $ | 191,040 |
|
| | (c) | Represents income tax expense related to Premier, Inc. retaining the portion of net income attributable to income from non-controlling interest in Premier, LP for the purpose of diluted earnings (loss) per share. |
| | (d) | Weighted average number of common shares used for basic earnings per share excludes weighted average shares of non-vested stock options, non-vested restricted stock, non-vested performance share awards and Class B shares outstanding for the years ended June 30, 2020, 2019 and 2018. |
| | (e) | For the year ended June 30, 2020, the effect of 0.8 million stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. For the year ended June 30, 2019, the effect of 70.8 million Class B common units exchangeable for Class A common shares and 0.4 million stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. For the year ended June 30, 2018, the effect of 1.6 million stock options were excluded from diluted weighted average shares outstanding as they had an anti-dilutive effect. |
Pursuant to the terms of the Exchange Agreement, on a quarterly basis, the Company has the option, as determined by the independent Audit and Compliance Committee, to settle the exchange of Class B common units of Premier LP by member owners for cash, an equal number of Class A common shares of Premier, Inc. or a combination of cash and shares of Class A common stock. In connection with the exchange of Class B common units by member owners, regardless of the consideration used to settle the exchange, an equal number of shares of Premier's Class B common stock are surrendered by member owners and retired (see Note 11 - Redeemable Limited Partners' Capital). The following table presents certain information regarding the exchange of Class B common units and associated Class B common stock for Premier's Class A common stock and/or cash in connection with the quarterly exchanges pursuant to the terms of the Exchange Agreement, including activity related to the Class A and Class B common units and Class A and Class B common stock through the date of the applicable quarterly exchange: | | | | | | | | | Quarterly Exchange by Member Owners | Class B Common Shares Retired Upon Exchange (a) | Class B Common Shares Outstanding After Exchange (a) | Class A Common Shares Outstanding After Exchange (b) | Percentage of Combined Voting Power Class B/Class A Common Stock | July 31, 2019 | 1,310,771 |
| 62,767,860 |
| 63,274,182 |
| 49.8%/50.2% | October 31, 2019 | 6,873,699 |
| 55,581,646 |
| 66,552,023 |
| 46%/54% | January 31, 2020 | 4,866,082 |
| 50,715,564 |
| 71,066,141 |
| 42%/58% | April 30, 2020 | 502,466 |
| 50,213,098 |
| 71,574,119 |
| 41%/59% | July 31, 2020 (c) | 69,684 |
| 50,143,414 |
| 71,724,149 |
| 41%/59% |
| | (a) | The number of Class B common shares retired or outstanding are equivalent to the number of Class B common units retired upon exchange or outstanding after the exchange, as applicable. |
| | (b) | The number of Class A common shares outstanding after exchange also includes activity related to the Company's share repurchase program (see Note 12 - Stockholders' Equity (Deficit)) and equity incentive plan (see Note 14 - Stock-Based Compensation). |
(c) As the quarterly exchange occurred on July 31, 2020, the impact of the exchange is not reflected in the consolidated financial statements for the year ended June 30, 2020.
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