Premier, Inc. (NASDAQ:PINC) Q1 2020 Earnings Conference Call - Final Transcript
Nov 05, 2019 • 08:00 am ET
[Operator Instructions] And your first question comes from the line of Ryan Daniels with William Blair.
Ryan S. Daniels
Yeah, good morning guys. Thanks for taking the question. In regards to the Performance Services division, I know you highlighted some staffing that you believe will help drive growth in the back half of the year and I'm curious if you think the increased staffing will give you the flexibility or is that kind of meeting green shoots of novel demand that you're already seeing such that the visibility for that return to growth is higher than perhaps it was a few months ago.
Michael J. Alkire
Thanks. Ryan, this is Mike. So a couple of things, first of all, I think it's both, in answer to your question. There are a couple of very strategic projects that we are putting some of these additional staff on to not only deliver what's out there, but also to expand those accounts and then further, they're bringing a level of capability in terms of clinical transformation that we've really not had in the past and so they are out in the market trying to create new demand or working with our systems to create new demand in the full year at clinical transformation.
Ryan S. Daniels
Okay, that's helpful and then, Susan, you talked about obviously strong performance and long-term relationship in the supply chain. I'm curious, can you talk a little bit about the net admin fee that's obviously been a focal point or high point for investors. And I know the value proposition and total revenue is much broader than that, but what type of potential upward pressure might you see on the share back and does that at all change the growth outlook, with those entities going forward? Thank you.
Yeah. Thanks, Ryan. So what I would say is we continue to target low-to-mid single-digit growth in net revenue in the GPO. Our value proposition is differentiated. We think we're different from the competitors, which is, if you're talking about a percentage of an admin fee or you're talking about 10% supply chain savings on the spend, the supply chain savings number is just a much larger number. So while we think it's a part of the value proposition, our intent is to continue to sell and deliver the whole value proposition. We will customize every relationship we have and I talked about strategic initiatives, and Mike did as well, to get after more of the spend, there is a lot of volume to be gotten, there is a lot of contract penetration to be gotten.
And the truth is administrative fees are all over the map, and they're customized for every customer relationship. So we continue to have the same targeted net revenue growth performance planned and we're implementing our strategies based on that.
Ryan S. Daniels
Okay, that's very helpful. Thank you. I'll hop back in the queue.
Your next question comes from the line of Jamie Stockton with Wells Fargo.
Hi, good morning. Thanks for taking my questions. I guess