Supply chain and group purchasing giant Premier Inc. reported better-than-expected fourth-quarter results Aug. 16 and its leaders said they are looking for strong growth this coming year from a handful of emerging ventures.
Charlotte-based Premier, which works with more than 4,400 hospitals and health systems around the country, posted a net profit of $30.7 million in its fiscal fourth quarter on sales of $341 million. Those numbers were down markedly from the prior-year period, when massive customer demand for PPE and related products spiked revenues and profits. (Premier’s product revenues plummeted 70 percent in the fourth quarter to about $70 million from that spring 2021 pandemic peak.) Adjusted for several items, EBITDA for the quarter rose slightly to $123 million.
In a statement, President and CEO Mike Alkire said that Premier is growing its share of clients’ supply chain spending and pointed to the double-digit growth from non-acute care customers in fiscal 2022. On a conference call with analysts and investors, Alkire and CFO Craig McKasson also said they are pleased with both the progress of and the outlook for what they call Premier’s adjacent markets businesses. Those include third-party administrator services and health benefit programs manager Contigo Health and digital invoicing and payables business Remitra, both ventures that aim to build on the relationships Premier has built with organizations.
In fiscal 2022, those ventures grew their sales by more than 30 percent to $83 million, or about a fifth of Premier’s performance services division. But they are expected to grow that much or more this year, McKasson said, as capacity investments pay off further.
“We believe we are well-positioned to continue growing these businesses by scaling them across our platform and continuing to address unmet market needs with our unique combination of data, technology, and scale,” McKasson said. “There is undiscovered business but [we] feel very good about the pipeline and the opportunities to achieve the growth.”
McKasson did clarify to investors that the growth projections of up to 40 percent for the adjacent markets ventures won’t be enough to alter his team’s expectations that Premier as a whole will grow its revenues in the mid-to-high single digits in fiscal 2023.
Shares of Premier (Ticker: PINC) fell nearly 2 percent to $37.84 Aug. 16. Over the past six months, they have risen slightly, growing the company’s market capitalization to nearly $4.5 billion.