Premier, Inc.

Hello and welcome to the Premier, Inc. Fiscal 2022 Third Quarter Results and Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then 1 on your touchtone phone. To withdraw your question, please press star then 2. Please note, today's event is being recorded. And now I'd like to turn the conference over to Angie McCabe. Ms. McCabe, please go ahead.

Thank you, and welcome to Premier's fiscal 2022 third quarter call. Our speakers this morning are Mike Alkire, Premier's President and CEO, and Craig McCaffin, our Chief Administrative and Financial Officer. Before we get started, I would like to remind you that our earnings release and the supplemental slides accompanying this conference call are available in the investor relations section of our website at investors.premiereinc.com. Our remarks today contain certain forward-looking statements and actual results could differ materially from those discussed today. These forward-looking statements speak only 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, including our most recent Form 10-K, and our Form 10-Q for the quarter, which we expect to file soon. We encourage you to review these filings, including our detailed safe harbor and risk factor disclosures. Also, where appropriate, we refer to adjusted or other non-GAAP financial measures, such as free cash flow, to evaluate our business. Reconciliations of non-GAAP financial measures to GAAP financial measures are included in our earnings release, in the appendix of the supplemental slides accompanying this presentation and in our earnings form 8K, which we expect to furnish to the SEC soon. I will now turn the call over to Mike Alkire. Mike?

Thanks, Angie. Good morning, everyone, and thank you for joining us today. As we expected, our third quarter results reflect the continued normalization of our direct sourcing revenue within our supply chain services segment toward a pre-COVID-19 pandemic level. Our performance services segment results were affected by the timing of revenue associated with enterprise analytics license agreements in the quarter as compared with the prior year quarter. Notably, our adjacent markets and consulting businesses are expected to continue to grow this fiscal year and we believe our adjacent markets businesses collectively are on track to exceed 25% growth on a year-over-year basis. So aside from a couple of transitory items, our core underlining businesses continue to deliver steady growth, and we are making progress in further positioning our business to achieve our longer-term growth objectives. Importantly, as we begin to wrap up our fiscal 2022, Based on our results for the first nine months of the year and our expectations for the fourth quarter, we are increasing our full year adjusted earnings per share guidance to a range of $2.48 to $2.58. This morning, I'll provide some brief comments on the macro environment as well as highlights on the progress we are making toward achieving our longer term objectives. Craig will then review our operational and financial results, as well as our updated fiscal 2022 guidance in more detail. From a macro perspective, we continue to operate in an environment affected by rising inflation, labor shortages, supply chain disruption, and increased raw material costs. While the COVID-19 pandemic appears to be abating in the United States, we are closely monitoring the spread of COVID cases and lockdowns in China. Ports are operating at lower levels of productivity due to a lack of dock workers, and trucking capacity has also been reduced. In an effort to mitigate disruptions, some shippers are switching their cargo to nearby ports. Over the coming weeks, we anticipate further transportation delays resulting from lockdowns and increased COVID testing across China. While we have contracted suppliers that manufacture and export goods from this region, including our own direct sourcing company, S2S Global, we have been diversifying our business to reduce dependence on China for a number of years. We are also keeping a close eye on any potential impact from the Russia-Ukraine war. which could further stress an already constrained global supply chain as access to certain critical supplies used in the manufacturing process are sourced from these two countries. We remain in close contact with our supplier base to monitor all the overall supply of semiconductors, which are used in medical supplies, such as IVs, MRI machines, pacemakers, and blood pressure monitors, among other items. We are not currently seeing direct shortages of semiconductors in healthcare, and we're not aware of any direct impacts to patient safety thus far. However, we believe a proactive approach is warranted to avoid supply shortages and the potential for patient harm. Therefore, we'll continue to take a leadership position in working closely with our suppliers, the government, and industry partners in an effort to stay ahead and informed of any potential disruptions. In addition to the availability of medical supplies, we continue to focus on proactively addressing drug shortages. In fact, during the pandemic, we have maintained a steady supply of drugs for our members despite demand spikes of 150% and shifts in manufacturing prioritization due to vaccine production. Moreover, our pharmacy programs have been instrumental in the delisting of 14 drugs from the Food and Drug Administration's shortage list. We also created opportunities that incentivized nearly 30 generic injectable suppliers to enter the market over the past decade. In addition, we and 11 of our leading member health systems invested in Accela Pharma Sciences to secure and support US-based drug manufacturing and further reduce drugs on the shortage list. Finally, we have led in advancing policy solutions to increase supply chain security domestic manufacturing, and the FDA's capabilities to address shortages. Also, we've communicated over the past several years an over-reliance on any one geography for raw materials. Pharmaceuticals and the production of medical supplies is one of the biggest disruption risks to the healthcare supply chain. We will continue to focus on creating a more resilient and geographically diverse supply chain. Lastly, as we discussed on last quarter's earnings call, high labor costs are impacting our members. To help address this, we convened an advisory committee of more than 30 of our member health system CEOs and CFOs who resoundingly cited labor shortages as the greatest challenge. We believe, and this group confirmed, that our consulting services and technology platform are well positioned to help our members address these labor shortages. From our workflow automation technology that saves time and money to our consulting services solutions that enable real-time demand and capacity planning, we are delivering critically needed solutions to help mitigate this issue. I'll now review some highlights from the quarter and provide some insights into our adjacent markets businesses with the focus on Remitra, Pink AI Applied Sciences, and Pink AI's technology capabilities. particularly for clinical decision support and prior authorization. First, in Remitra, our digital payments and financial solutions platform, we are on track with the roadmap we shared at our investor day last November to expand our capabilities from automating invoicing to automating payments for providers and suppliers. We continue to evolve our entire supply chain services business into an end-to-end technology-enabled supply chain solution that can help create efficiencies across the entire supply chain process from the sourcing of products and services to settlement of payments. This is critically important now since our members are feeling pressure from labor shortages. We are seeing growing interest in Remetra from our member healthcare providers and suppliers. We believe our strategy is a key market differentiator and that ReMentor remains on track to achieve $50 million to $100 million in annual revenue in the next three to five years, as previously communicated. Second, in our Pink AI Applied Sciences business, we have a strong pipeline and continue to partner with market-leading life sciences companies to leverage Pink AI's artificial intelligence, machine learning, and natural language processing technology to help close the gap in cancer diagnosis and care. In partnership with AstraZeneca and through our relationship with HealthX, which is the largest public health information exchange in the U.S., we are collaborating to identify patients with idiopathic pulmonary nodules, or IPNs, to bring them back into the health system so that potential underlying conditions, including lung cancer, which is the leading cause of cancer's death globally, can be addressed. Early results from this work have yielded approximately 140,000 patients with IPMs that would have otherwise been missed. With regard to Pink AI, this scalable technology and services platform is the engine behind our innovative solutions designed to meet the many needs of providers, life sciences companies, employers, and payers. Pink AI's clinical decision support has natural language processing and machine learning capabilities that our data science experts are leveraging to automate the prior authorization process. A labor, workflow, and administrative burden for both payers and providers, current prior authorization processes can delay the delivery of care to patients. Our foundational capabilities and advanced imaging are being used by several payers today, and we continue to explore partnership opportunities that we believe will help accelerate our ability to technologically automate every aspect of this process from the time a clinician enters an order to the moment it is approved by a payer, consolidating the timeline from days to minutes. In summary, we have positive momentum as we begin to wrap up our fiscal 2022 with some exciting and innovative opportunities to continue to evolve our business. We believe we remain on track to achieve our short- and long-term goals as we continue to enhance our capabilities in new ways and advance our strategies to deliver greater value to our members and other customers. I will now turn the call over to Craig McCasin for a discussion on our operational and financial performance.