Updated Feb. 6: Premier's net income tumbled 92% in the fiscal 2018 second quarter ended Dec. 31, 2017 to $19.8 million, down from $246.2 million over the same period in the year prior, as the company endured a one-time adjustment of deferred taxes resulting from the new tax law, Premier reported Monday.
Premier, which provides group purchasing and consulting services, saw its adjusted fully distributed net income, reported on a non-generally accepted accounting principles basis, increase 7% to $69.98 million, up from $65.24 million. On a GAAP basis, its net revenue increased 15% on the quarter to $411.4 million, buoyed by supply chain services revenue.
Supply chain services segment revenue increased 19% from a year ago, driven by 23% growth in its group purchasing organization, which was bolstered by its acquisitions of Innovatix and Essensa. Product revenue growth of 14% was driven by both integrated pharmacy and direct sourcing, both of which achieved double-digit revenue growth.
Premier's performance services business, which includes its consulting segment, increased 1% to $86.5 million. The company expects that business to increase in the second half of the fiscal year along with the demand for ambulatory consulting.
Premier said it is also planning a "modest reduction" in its workforce, that will produce pre-tax cost savings of $13 million to $14 million on an annual run-rate basis.
"We believe Premier's integrated supply chain, technology and analytics capabilities and wrap-around advisory services continue to uniquely differentiate our healthcare performance improvement company," Susan DeVore, president and CEO of Premier, said in a statement.
Its stock fell 4.7% by the market's close Monday but rebounded slightly in after-hours trading, following the earnings report.
