Revenue during the quarter grew 22.91 percent to $358.50 million from $291.67 million in the previous year period. Gross margin for the quarter contracted 1049 basis points over the previous year period to 50.90 percent. Total expenses were 79.18 percent of quarterly revenues, up from 75.97 percent for the same period last year. That has resulted in a contraction of 321 basis points in operating margin to 20.82 percent.

Operating income for the quarter was $74.64 million, compared with $70.09 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $122.01 million compared with $116.06 million in the prior year period. At the same time, adjusted EBITDA margin contracted 576 basis points in the quarter to 34.03 percent from 39.79 percent in the last year period.

"Our fiscal 2017 second-quarter results reflect the continued strong performance of our group purchasing organization, which helped deliver non-GAAP adjusted EBITDA and adjusted fully distributed earnings per share that exceeded our expectations," said Susan DeVore, president and chief executive officer. "The Performance Services segment, including our information technology and advisory services businesses, operated in line with the expectations that management articulated on our first-quarter conference call, and we continue to expect revenue to increase in the second half of the fiscal year.

Premier forecasts revenue to be in the range of $1,484 million to $1,550 million for fiscal year 2017. For fiscal year 2017, the company expects diluted earnings per share to be in the range of $1.80 to $1.93 on adjusted basis.

The company has spent $336.36 million cash to meet investing activities during the first six months as against cash outgo of $176.66 million in the last year period.

Cash flow from financing activities was $168.07 million for the first six months, up 218.16 percent or $115.24 million, when compared with the last year period.

Cash and cash equivalents stood at $218.89 million as on Dec. 31, 2016, up 39.06 percent or $61.48 million from $157.41 million on Dec. 31, 2015.

Working capital turns negative
Working capital of Premier Inc. has turned negative to $277.74 million on Dec. 31, 2016 from positive $124.19 million on Dec. 31, 2015. Current ratio was at 0.65 as on Dec. 31, 2016, down from 1.47 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 28 days for the quarter from 39 days for the last year period. Days sales outstanding were almost stable at 39 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 17 days for the quarter compared with 25 days for the previous year period. At the same time, days payable outstanding went up to 28 days for the quarter from 25 for the same period last year.