United States Securities and Exchange Commission EDGAR Filing


 

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 8-K

______________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 7, 2007

[http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=5108337&doc=2]

______________

Cross Country Healthcare, Inc.

 (Exact name of registrant as specified in its charter)

______________


Delaware

0-33169

13-4066229

(State or Other Jurisdiction

(Commission

(I.R.S. Employer

of Incorporation)

File Number)

Identification No.)

6551 Park of Commerce Blvd., N.W., Boca Raton, FL 33487

(Address of Principal Executive Office) (Zip Code)

(561) 998-2232

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 

 







Item 2.02

Results of Operations and Financial Condition

(a)  On August 7, 2007, Cross Country Healthcare, Inc. (“the Company”) issued a press release announcing results for the quarter  ended June 30, 2007,  a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.  This information is being furnished under Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such section.

Item 7.01

Regulation FD Disclosure

Incorporated by reference is a press release issued by the Company on August 7, 2007, which is attached hereto as Exhibit 99.2.  This information is being furnished under Item 7.01 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of such section.


Item 9.01

Financial Statements and Exhibits

(d)

Exhibits


 

Exhibit

 

Description

            

 

 

 

 

99.1

     

Press Release issued by the Company on August 7, 2007

 

 

 

 

 

 

 

 




2



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


         

CROSS COUNTRY HEALTHCARE, INC.

 

 

  

 

 

 

 

By:  

/s/ EMIL HENSEL

 

 

Emil Hensel

Chief Financial Officer

 

 

Dated:  August 13, 2007















3



LINKS


Item 2.02

Results of Operations and Financial Condition

Item 7.01

Regulation FD Disclosure

Item 9.01

Financial Statements and Exhibits






United States Securities & Exchange Commission EDGAR Filing



EXHIBIT 99.1

[http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=5108337&doc=4]

     NEWS

FOR IMMEDIATE RELEASE


CROSS COUNTRY HEALTHCARE REPORTS SECOND QUARTER 2007 RESULTS


BOCA RATON, Fla. – August 7, 2007 – Cross Country Healthcare, Inc. (Nasdaq: CCRN) today reported revenue of $175.3 million in the second quarter ended June 30, 2007, a 12% increase from the prior year quarter.  Net income for the second quarter increased 23% year-over-year to $5.5 million, or $0.17 per diluted share.  A year earlier, the Company reported second quarter revenue of $156.7 million and net income of $4.4 million, or $0.14 per diluted share.  Cash flow from operations for the second quarter of 2007 was $10.2 million.


For the six month period ended June 30, 2007, Cross Country Healthcare reported revenue of $351.4 million and net income of $10.3 million, or $0.31 per diluted share.  This compares to revenue of $316.5 million and net income of $9.0 million, or $0.27 per diluted share, in the first six months of the prior year.  Cash flow from operations for the first six months of 2007 was $8.6 million.


“Our improved results in the second quarter reflect continued positive momentum in our travel nurse staffing business as well as organic growth in our clinical trials services business, which was supplemented by the Metropolitan Research and AKOS acquisitions.  Along with the acquisition of Assent Consulting in July, we expect 2007 pro forma revenue from our clinical trials services businesses to be approximately $100 million,” said Joseph A. Boshart, President and CEO of Cross Country Healthcare, Inc.  


“We are also very encouraged by the organic improvement in our travel nurse staffing business in the second quarter that was driven by a 5% increase in hourly price and a 6% increase in staffing volume, marking the highest organic growth rate in our staffing volume since 2002.  Contribution margins also showed slight improvement year-over-year as higher bill pay spreads and lower health insurance expense offset continued pressure from housing, professional liability and bad debt expenses.  Looking ahead, we expect these pressures collectively to abate somewhat in the third quarter and margins should expand in the second half of the year,” added Mr. Boshart.


Following the completion of several strategic acquisitions during the past year, and consistent with accounting guidance, Cross Country Healthcare established a new business segment during the current period.  Commencing with its results for the second quarter of 2007, the Company’s public reporting will include certain financial information related to three business segments: Nurse and Allied Staffing, Clinical Trials Services, and Other Human Capital Management Services.  Consistent with this change, prior period segment data has been reclassified accordingly.


Nurse and Allied Staffing


For the second quarter of 2007, the nurse and allied staffing business segment (travel and per diem nurse and travel allied staffing) generated revenue of $143.2 million, an increase of 6% from the prior year quarter.  The year-over-year improvement reflected higher revenue from travel staffing that was partially offset by lower revenue from per diem staffing.


Contribution income (defined as income from continuing operations before interest, income taxes, depreciation and amortization, legal settlement charge and corporate expenses not specifically identified to a reporting segment), increased 7% in the second quarter of 2007 to $12.9 million from $12.0 million in the same quarter a year ago.


(more)






Segment staffing volume increased 3% from the prior year quarter and decreased 1% sequentially from the first quarter of 2007 due to normal seasonal factors.  Travel staffing volume increased 5% year-over-year and declined 1% on a sequential basis due to the same seasonal factors.


For the first six months of 2007, segment revenue increased 6% on a year-over-year basis to $287.7 million from $271.6 million in the same period a year ago, while contribution income increased 2% to $25.1 million from $24.6 million in the prior year period.


Clinical Trials Services


For the second quarter of 2007, the clinical trials services segment generated revenue of $19.6 million, an increase of 88% from $10.4 million in the prior year quarter.  The year-over-year improvement reflected the additional revenue from the Metropolitan Research and AKOS acquisitions that was further enhanced by a significant organic increase in revenue.


Contribution income increased 112% in the second quarter of 2007 to $3.0 million from $1.4 million in the same quarter of 2006 due to a combination of the added contribution from Metropolitan Research and AKOS along with substantial organic improvement.


For the first six months of 2007, segment revenue increased 87% on a year-over-year basis to $39.3 million from $21.0 million in the same period a year ago, while contribution income increased 107% to $5.5 million from $2.7 million in the prior year period.


Other Human Capital Management Services


For the second quarter of 2007, the other human capital management services business segment (education and training and retained search) generated revenue of $12.6 million, a 7% increase from revenue of $11.8 million in the same quarter in the prior year.  The increase reflected higher revenue from both the retained search business and the education and training business.  Segment contribution income decreased to $2.0 million in the second quarter of 2007 from $2.3 million in the prior year quarter due to certain higher expenses incurred in each business.


For the first six months of 2007, segment revenue increased 2% on a year-over-year basis to $24.4 million from $24.0 million in the same period a year ago, while contribution income decreased to $4.1 million from $4.9 million in the prior year period.


Debt Repayments/Borrowings


During the second quarter of 2007, the Company borrowed $2.3 million net of repayments from its revolving credit facility, which was primarily used to fund the AKOS acquisition and to repurchase shares of its common stock.  At June 30, 2007, the Company had $29.0 million of total debt on its balance sheet and a debt to total capitalization ratio of 7.1%.


Stock Repurchase Program Update


The Company repurchased 105,412 shares of its common stock during the second quarter of 2007 at an average cost of $17.53 per share.  The Company can repurchase up to an additional 1,339,214 shares of its common stock under its current authorization.  Shares may be repurchased from time-to-time in the open market subject to the constraints of the Company’s current credit agreement and such repurchases may be discontinued at any time at the discretion of the Company.  At June 30, 2007, the Company had approximately 32.0 million shares outstanding.


(more)







Guidance For Third Quarter 2007


The following statements are based on current management expectations.  Such statements are forward-looking and actual results may differ materially.  These statements do not include the potential impact of any future mergers, acquisitions or other business combinations, significant legal proceedings or significant repurchases of the Company's common stock.


Based on the present industry dynamics, Cross Country Healthcare expects revenue in the third quarter of 2007 to be in the $181 million to $184 million range and earnings per diluted share to be in the range of $0.19 to $0.21.


Quarterly Conference Call


Cross Country Healthcare will hold a conference call on Wednesday, August 8th at 10:00 a.m. Eastern Time to discuss its second quarter 2007 financial results.  This call will be webcast live by CCBN/Thomson Financial and may be accessed at the Company's web site at www.crosscountryhealthcare.com or by dialing 888-456-0278 from anywhere in the U.S. or by dialing 210-234-0001 from non-U.S. locations – Passcode: Cross Country.  A replay of the webcast will be available through August 22nd.  A replay of the conference call will be available by telephone from approximately noon on August 8th until August 22nd by calling 800-890-3519 from anywhere in the U.S. or 402-220-4870 from non-U.S. locations.


About Cross Country Healthcare


Cross Country Healthcare, Inc. is a leading provider of healthcare staffing and related services in the United States.  The Company has a national client base of approximately 4,000 hospitals, pharmaceutical companies and other healthcare providers.  Copies of this and other news releases as well as additional information about Cross Country Healthcare can be obtained online at www.crosscountryhealthcare.com.  Shareholders and prospective investors can also register at the corporate website to automatically receive the Company's press releases, SEC filings and other notices by e-mail.


This release contains forward-looking statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", “suggests” and similar expressions are forward-looking statements.  These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements.  These factors include: our ability to attract and retain qualified nurses and other healthcare personnel, costs and availability of short-term apartment leases for our travel nurses, demand for the healthcare services we provide, both nationally and in the regions in which we operate, the functioning of our information systems, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our clients' ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including from time to time entering into Letters of Intent which may or may not result in the completion of an acquisition, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors set forth under the caption "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2006, as well as in our Quarterly Report on Form 10-Q for the period ended March 31, 2007.  Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results. Given these uncertainties, the forward-looking statements discussed in this press release might not occur.  While it is our intention to update guidance quarterly, it should not be assumed that our silence over time means that actual events are occurring as expressed or implied in such forward-looking statements.


#   #   #


For further information, please contact:

Howard A. Goldman

Director/Investor & Corporate Relations

Cross Country Healthcare, Inc.

Phone: 877.686.9779

Email: hgoldman@crosscountry.com






Cross Country Healthcare, Inc.

Condensed Consolidated Statements of Income

(Unaudited, amounts in thousands, except per share data)


 

 

Three Months Ended
June 30,

 

 

 

Six Months Ended
June 30,

 

 

 

 

2007

 

2006

 

% Change

 

2007

 

2006

 

% Change

 

     

 

 

     

 

 

     

 

     

 

 

     

 

 

     

 

Revenue from services

 

$

175,339

 

$

156,697

 

12%

 

$

351,432

 

$

316,531

 

11%

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct operating expenses

 

 

133,736

 

 

120,455

 

11%

 

 

269,340

 

 

242,900

 

11%

Selling, general and administrative expenses

 

 

29,923

 

 

26,816

 

12%

 

 

59,441

 

 

54,989

 

8%

Bad debt expense

 

 

480

 

 

150

 

220%

 

 

1,265

 

 

22

 

NM

Depreciation

 

 

1,505

 

 

1,383

 

9%

 

 

2,989

 

 

2,705

 

10%

Amortization

 

 

370

 

 

356

 

4%

 

 

739

 

 

712

 

4%

Legal settlement charge

 

 

21

 

 

 

ND

 

 

34

 

 

 

ND

Total operating expenses

 

 

166,035

 

 

149,160

 

11%

 

 

333,808

 

 

301,328

 

11%

Income from operations

 

 

9,304

 

 

7,537

 

23%

 

 

17,624

 

 

15,203

 

16%

Other expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

529

 

 

320

 

65%

 

 

1,015

 

 

706

 

44%

Income from continuing operations before income taxes

 

 

8,775

 

 

7,217

 

22%

 

 

16,609

 

 

14,497

 

15%

Income tax expense

 

 

3,314

 

 

2,793

 

19%

 

 

6,346

 

 

5,610

 

13%

Income from continuing operations

 

 

5,461

 

 

4,424

 

23%

 

 

10,263

 

 

8,887

 

15%

Discontinued operations, net of income taxes

 

 

 

 

9

 

(100%)

 

 

 

 

116

 

(100%)

Net income

 

$

5,461

 

$

4,433

 

23%

 

$

10,263

 

$

9,003

 

14%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - basic:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.17

 

$

0.14

 

 

 

$

0.32

 

$

0.28

 

 

Discontinued operations,
net of income taxes

 

 

 

 

0.00

 

 

 

 

 

 

0.00

 

 

Net income

 

$

0.17

 

$

0.14

 

 

 

$

0.32

 

$

0.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share - diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

0.17

 

$

0.14

 

 

 

$

0.31

 

$

0.27

 

 

Discontinued operations,
net of income taxes

 

 

 

 

0.00

 

 

 

 

 

 

0.00

 

 

Net income

 

$

0.17

 

$

0.14

 

 

 

$

0.31

 

$

0.27

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares
outstanding - basic

 

 

32,038

 

 

32,092

 

 

 

 

32,086

 

 

32,109

 

 

Weighted average common shares
outstanding - diluted

 

 

32,613

 

 

32,726

 

 

 

 

32,730

 

 

32,773

 

 

ND  Not determinable

NM  Not meaningful






Cross Country Healthcare, Inc.

Condensed Consolidated Balance Sheets (1)

(Unaudited, amounts in thousands)


 

 

June 30,
2007

 

December 31,
2006

 

 

     

 

 

     

 

 

 

Assets

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

$

 

Accounts receivable, net

 

 

114,886

 

 

114,735

 

Deferred tax assets

 

 

6,708

 

 

7,888

 

Income taxes receivable

 

 

2,747

 

 

1,602

 

Other current assets

 

 

17,615

 

 

18,126

 

Total current assets

 

 

141,956

 

 

142,351

 

Property and equipment, net

 

 

21,807

 

 

20,562

 

Trademarks, net

 

 

18,922

 

 

17,199

 

Goodwill, net

 

 

313,798

 

 

310,173

 

Other identifiable intangible assets, net

 

 

10,806

 

 

9,310

 

Other assets

 

 

1,266

 

 

1,331

 

Total assets

 

$

508,555

 

$

500,926

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

Accounts payable and accrued expenses

 

$

10,042

 

$

13,744

 

Accrued employee compensation and benefits

 

 

26,319

 

 

29,213

 

Current portion of long-term debt

 

 

1,500

 

 

1,550

 

Accrued legal settlement charge

 

 

 

 

6,704

 

Other current liabilities

 

 

7,871

 

 

5,931

 

Total current liabilities

 

 

45,732

 

 

57,142

 

Non-current deferred tax liabilities

 

 

43,302

 

 

39,972

 

Long-term debt

 

 

27,506

 

 

19,979

 

Other long-term liabilities

 

 

9,997

 

 

8,977

 

Total liabilities

 

 

126,537

 

 

126,070

 

 

 

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

 

 

 

Common stock

 

 

3

 

 

3

 

Additional paid-in capital

 

 

251,781

 

 

254,273

 

Other stockholders' equity

 

 

130,234

 

 

120,580

 

Total stockholders' equity

 

 

382,018

 

 

374,856

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

508,555

 

$

500,926

 

———————

(1)

Prior period data has been reclassified to conform to current period's presentation.







Cross Country Healthcare, Inc.

Segment Data (a)

(Unaudited, amounts in thousands)


 

 

Three Months Ended
June 30,

 

 

 

Six Months Ended
June 30,

 

 

 

 

2007

 

2006

 

% Change

 

2007

 

2007

 

% Change

 

     

 

 

     

 

 

     

 

     

 

 

     

 

 

     

 

Revenue from unaffiliated customers:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and allied staffing

 

$

143,195

 

$

134,501

 

6%

 

$

287,717

 

$

271,550

 

6%

Clinical trials services

 

 

19,569

 

 

10,426

 

88%

 

 

39,280

 

 

20,977

 

87%

Other human capital management services

 

 

12,575

 

 

11,770

 

7%

 

 

24,435

 

 

24,004

 

2%

 

 

$

175,339

 

$

156,697

 

12%

 

$

351,432

 

$

316,531

 

11%

Contribution income (b)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and allied staffing

 

$

12,863

 

$

12,035

 

7%

 

$

25,056

 

$

24,637

 

2%

Clinical trials services

 

 

2,971

 

 

1,400

 

112%

 

 

5,533

 

 

2,672

 

107%

Other human capital management services

 

 

1,990

 

 

2,327

 

(14%)

 

 

4,089

 

 

4,916

 

(17%)

 

 

 

17,824

 

 

15,762

 

13%

 

 

34,678

 

 

32,225

 

8%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unallocated corporate overhead

 

 

6,624

 

 

6,486

 

2%

 

 

13,292

 

 

13,605

 

(2%)

Depreciation

 

 

1,505

 

 

1,383

 

9%

 

 

2,989

 

 

2,705

 

10%

Amortization

 

 

370

 

 

356

 

4%

 

 

739

 

 

712

 

4%

Legal settlement charge

 

 

21

 

 

 

ND

 

 

34

 

 

-

 

ND

Interest expense, net

 

 

529

 

 

320

 

65%

 

 

1,015

 

 

706

 

44%

Income from continuing operations
before income taxes

 

$

8,775

 

$

7,217

 

22%

 

$

16,609

 

$

14,497

 

15%


Cross Country Healthcare, Inc.

Other Financial Data

(Unaudited)


 

 

Three Months Ended
June 30,

 

Six Months Ended
June 30,

 

 

 

2007

 

2006

 

2007

 

2006

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Net cash provided by operating activities (in thousands)

 

$

10,187

 

$

9,871

 

$

8,630

 

$

20,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and allied staffing statistical data:

 

 

 

 

 

 

 

 

 

 

 

 

 

FTEs (c)

 

 

5,067

 

 

4,919

 

 

5,101

 

 

5,005

 

Weeks worked (d)

 

 

65,871

 

 

63,947

 

 

132,626

 

 

130,130

 

Average nurse and allied staffing revenue per FTE per week (e)

 

 

2,174

 

 

2,103

 

 

2,169

 

 

2,087

 

———————

(a)

Prior period segment data has been reclassified to segregate clinical trials services as a separate business segment.  Segment data provided is in accordance with FASB Statement 131.

(b)

Defined as income from continuing operations before interest, income taxes, depreciation, amortization, legal settlement charge and corporate expenses not specifically identified to a reporting segment.  Contribution income is a financial measure used by management when assessing segment performance.

(c)

FTEs represent the average number of nurse and allied contract staffing personnel on a full-time equivalent basis. Clinical trials services are no longer included in this statistic.

(d)

Weeks worked is calculated by multiplying the FTEs by the number of weeks during the respective period.  

(e)

Average nurse and allied staffing revenue per FTE per week is calculated by dividing the nurse and allied staffing revenue by the number of weeks worked in the respective periods.  Nurse and allied staffing revenue includes revenue from permanent placement of nurses.