“Overall, the quarter was a strong start to the new fiscal year and a good first quarter out of the box for the organization,” Ryan Daniels, an analyst for William Blair & Co., wrote in a Nov. 12 research note.
Premier completed its initial public offering Oct. 1, selling 23% of the company on the public market as part of a strategy to restructure its business. The IPO, according to the earnings report, generated $821.7 million in net proceeds.
“We're ideally positioned to innovate from within and we now have access to capital and we intend to deploy it effectively,” said Premier President and CEO Susan DeVore.
The company has already made one acquisition, spending $28.7 million in the first quarter to acquire SymmedRx, a data and analytics firm focused on helping hospitals in managing the contracting cycle and prices for physician preference items such as hip and knee implants and pacemakers.
DeVore said the company is looking at making investments in physician preference items, alternate sites, supply chain workflow and analytics, and integrated pharmacy solutions, as well as in data that would serve its performance services segment.
The company's supply chain services business, which includes its GPO and generates about 75% of Premier's total net revenue, reported 9.9% growth to $146 million in the first quarter of fiscal 2014, while the performance services business rose 10.4% to $53 million. Net revenue growth was attributed to improved product revenue sales in supply chain services and, within the performance services segment, increased software-as-a-service informatics subscriptions and advisory services.
Premier estimates that total sales in fiscal 2014 will range between $845 million and $869 million, yielding adjusted earnings before interest, tax, depreciation and amortization between $335 million and $355 million.
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