Premier Inc (PINC)
Interest coverage
| Jun 30, 2025 | Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 20,374 | 71,005 | -51,577 | 106,939 | 127,972 | 82,896 | 221,568 | 248,645 | 256,884 | 271,799 | 265,800 | 259,502 | 338,042 | 349,914 | 361,460 | 339,947 | 261,486 | 289,629 | 323,328 | 378,902 |
| Interest expense (ttm) | US$ in thousands | 17,223 | 10,991 | 7,379 | 6,030 | 4,469 | 7,107 | 9,613 | 11,806 | 14,470 | 14,436 | 12,971 | 11,213 | 11,142 | 11,687 | 12,108 | 12,633 | 11,964 | 10,206 | 16,947 | 13,908 |
| Interest coverage | 1.18 | 6.46 | -6.99 | 17.73 | 28.64 | 11.66 | 23.05 | 21.06 | 17.75 | 18.83 | 20.49 | 23.14 | 30.34 | 29.94 | 29.85 | 26.91 | 21.86 | 28.38 | 19.08 | 27.24 |
June 30, 2025 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $20,374K ÷ $17,223K
= 1.18
The analysis of Premier Inc.'s interest coverage ratios over the specified periods reveals considerable fluctuation, reflecting shifts in the company's ability to meet its interest obligations through earnings before interest and taxes (EBIT).
Initially, the ratios from September 30, 2020, through December 31, 2021, illustrate a generally robust coverage, with values consistently ranging from approximately 19.08 to 29.85. Notably, the peak interest coverage observed on December 31, 2021, at 29.85 suggests a strong capacity to service interest expenses during this period. The ratios during 2022 remain relatively stable, maintaining peaks near 30, with September 30, 2022, at 23.14 and December 31, 2022, at 20.49, indicating sustained but somewhat reduced earnings cushion compared to prior years.
Moving into 2023, the ratios demonstrate a declining trend, with March 31, 2023, at 18.83 and June 30, 2023, at 17.75, signaling a tightening in coverage as earnings relative to interest expenses diminish. The ratio then exhibits an uptick in subsequent quarters, with September 30, 2023, at 21.06 and December 31, 2023, at 23.05, suggesting some improvement in EBIT relative to interest obligations.
However, the most notable variation appears in the March 31, 2024, ratio, which plummets to 11.66, indicating a significant compression in the company's ability to cover interest expenses. This decline continues into June 30, 2024, where the ratio rises sharply to 28.64, pointing to a strong recovery or increased earnings before interest and taxes, surpassing previous levels. Yet, the subsequent quarter, September 30, 2024, shows a decrease to 17.73, and the subsequent forecast for December 31, 2024, reflects a negative ratio of -6.99, indicating that the company's EBIT no longer covers interest expenses, possibly suggesting financial distress or one-time charges adversely affecting earnings.
The forecasted ratios for early 2025 indicate a partial recovery, with March 31, 2025, at 6.46 and June 30, 2025, at 1.18. While these numbers are low, they imply that the company's earnings are barely sufficient to cover interest obligations, raising concerns over financial stability if such trends persist.
Overall, Premier Inc.'s interest coverage has exhibited variability over the analyzed periods, with periods of strong coverage interspersed with significant declines, including a recent period of negative coverage. The trend signals periods of financial strain, particularly in late 2024, underscoring the need for close monitoring of earnings to assess ongoing solvency risk and capacity to meet interest commitments.
Peer comparison
Jun 30, 2025