BP (x1-53336) Cross Country -- 8K

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)  May 5, 2004



[http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=2785555&doc=2]


Cross Country Healthcare, Inc.

(Exact name of registrant as specified in its charter)



                      

Delaware

        

0-33169

        

13-4066229

 

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

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.)











Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.


(c)  Exhibits.


                    

Exhibit

     

Description

   

                                                                                                                                

 

99.1

 

Press Release issued by the Company on May 5, 2004


Item 12.  Results of Operations and Financial Condition.


(a)   On May 5, 2004, Cross Country Healthcare, Inc. (the “Company”) issued a press release announcing results for the quarter ended March 31, 2004, 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 12 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.







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

 

Name: 

Emil Hensel

Dated:  May 11, 2004

Title:

Chief Financial Officer










3





Links


Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.

Item 12.  Results of Operations and Financial Condition.

 







<B>BP53254 -- Cross Country -- Exhibit 99.1

Exhibit 99.1




[http://api.tenkwizard.com/cgi/image?quest=1&rid=23&ipage=2785555&doc=4]                                                                          

     NEWS

FOR IMMEDIATE RELEASE


CROSS COUNTRY HEALTHCARE REPORTS

FIRST QUARTER 2004 RESULTS


BOCA RATON, Fla. – May 5, 2004 – Cross Country Healthcare, Inc. (Nasdaq: CCRN) today reported a 7% increase in revenue to $172.6 million for the first quarter ended March 31, 2004. Net income for the first quarter of 2004 was $4.9 million, or $0.15 per diluted share. This compares to revenue of $161.0 million and net income of $7.1 million, or $0.22 per diluted share, in the first quarter of 2003. Cash flow from operations was $8.2 million for the first quarter of 2004 compared to exceptionally strong cash flow from operations of $15.9 million in the first quarter of 2003.


“While the environment for our nurse-staffing services remains challenging, I am pleased to report that our first quarter results were somewhat better than we indicated in February. We also continued to generate solid cash flow from operations, accelerate the repayment of debt and purchase shares of our common stock. The increase in revenue from the prior year was principally due to our acquisition of Med-Staff in mid-2003 and greater contribution from our non-nurse-staffing operations. Our profitability for the first quarter of 2004 declined from the prior year due to a reduction in field staffing volume (FTE’s) in our organic nurse staffing business that produced lower leverage on our overhead, as well as higher housing and insurance costs, third-party administrative fees and co-marketing expenses, legal expenses, and compliance costs associated with the Sarbanes-Oxley Act of 2002,” said Joseph A. Boshart, President and Chief Executive Officer of Cross Country Healthcare, Inc.


“As we continue the process of implementing exclusive and preferred provider relationships with our hospital clients, several of the key metrics related to our business have improved. The number of orders for contract travel nurses and the conversion rate of applicants we submit in response to those orders are up year over year. On a sequential basis, our quarterly revenue and FTE volume have stabilized and it also appears that bookings for future assignments were up slightly sequentially, although they are down 15% year over year. Despite these improving trends, our nurse clients and hospital clients continue to exhibit cautious behavior which is not conducive to near-term growth in our contract booking activity. In addition, our productivity is being hindered by a decline in the number of nurses actively seeking travel assignments. So, while we remain cautious about our near-term prospects, we believe the industry has stabilized,” added Mr. Boshart.


Healthcare Staffing


For the first quarter ended March 31, 2004, the healthcare staffing business segment (travel and per diem nurse, allied health and clinical trials staffing) generated revenue of $159.0 million, a 7% increase over revenue of $148.2 million in the same quarter of the prior year. The increase was entirely attributable to the acquisition of the Med-Staff business in June 2003. Excluding Med-Staff, the healthcare staffing segment revenue declined 15% from the year ago quarter, primarily reflecting the year over year volume reduction in our organic nurse staffing business which was offset slightly by revenue growth in the Company’s clinical trials staffing and international nurse recruiting businesses.


(more)







During the first quarter of 2004, healthcare staffing volume improved 9% year over year and was flat sequentially with the fourth quarter of 2003. Excluding Med-Staff, the healthcare staffing segment experienced a 15% year over year quarterly decline in FTEs and was flat sequentially with the fourth quarter of 2003.


Contribution income (defined as income from continuing operations before interest, income taxes, depreciation and amortization and corporate expenses not specifically identified to a reporting segment), decreased 18% in the first quarter of 2004 to $15.6 million from $18.9 million in the same quarter of 2003, primarily reflecting higher housing and insurance costs, negative operating leverage as a result of lower organic nurse-staffing volume and investments related to hospital-oriented sales and marketing activities, offset by the Med-Staff contribution.


Other Human Capital Management Services


For the first quarter of 2004, the other human capital management services business segment (education and training, consulting, and retained search services) generated revenue of $13.7 million, a 7% increase from revenue of $12.8 million in the same quarter in the prior year. This was due to higher revenue from educational seminars reflecting higher attendance per seminar than in the prior year quarter. Contribution income in the first quarter of 2004 improved to $1.7 million, an 18% increase over the same quarter a year ago. This reflects the effect of the revenue increase in the educational seminars business.


Debt Repayment


During the first quarter of 2004, Cross Country Healthcare paid approximately $6.2 million toward the term loan portion of its long-term debt obligation under its credit facility, which was entered into in the second quarter of 2003. Of this amount, approximately $5.0 million represented an optional pre-payment. At March 31, 2004, the Company had approximately $87.5 million of long-term debt and notes payable on its balance sheet, which represented a 21% debt to total capitalization ratio.


Stock Repurchase Program Update


During the first quarter of 2004, Cross Country Healthcare purchased 16,400 shares of its common stock at an average cost of $15.94 per share. Since initiating its current stock buy-back program in November 2002, the Company has purchased 1,017,800 shares of its common stock at an average cost of $13.74 per share. The cost of such purchases was approximately $14.0 million. The Company can purchase up to an additional 482,200 shares at an aggregate price not to exceed approximately $11.0 million under this previously authorized stock repurchase program. Under this program, the shares may be purchased from time-to-time in the open market and may be discontinued at any time at the Company’s discretion. At March 31, 2004, the Company had approximately 32.0 million shares outstanding.


Guidance for Second Quarter of 2004


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, pending legal matters or repurchases of the Company’s common stock.


(more)









Based on the present demand dynamics in the healthcare staffing services marketplace, for the second quarter of 2004, Cross Country Healthcare is projecting revenue to be in the $162 million to $166 million range and EPS to be in the range of $0.14 to $0.16 per diluted share. For the time being, until the Company has greater visibility, it intends to provide revenue and EPS guidance only for the next quarter following each quarterly earnings period.


Quarterly Conference Call


Cross Country Healthcare will hold a conference call on Thursday, May 6th at 10:00 a.m. Eastern Time to discuss its first quarter 2004 financial results. This call will be webcast live by CCBN and may be accessed at the Company’s web site at www.crosscountry.com or by dialing 877-915-2769 from anywhere in the U.S. or by dialing 630-395-0021 from non-U.S. locations – Passcode: Cross Country. A replay of the webcast will be available through May 20th. A replay of the conference call will be available by telephone from approximately 12:00 p.m. Eastern Time on May 6th through May 20th by calling 800-216-6080 from anywhere in the U.S. or by calling 402-220-3894 from non-U.S. locations.


About Cross Country Healthcare


Cross Country Healthcare, Inc. is a leading provider of healthcare staffing services in the United States. The Company has a client base of over 3,000 hospitals, pharmaceutical companies and other healthcare providers across all 50 states. Copies of this and other news releases as well as additional information about Cross Country Healthcare can be obtained online at www.crosscountry.com. Shareholders and prospective investors can also register at the corporate web site 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” 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 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, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, and other factors set forth under the caption “Risk Factors” in the Company’s 10-K for the year ended December 31, 2003. 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 the Company’s intention to update its guidance quarterly, it should not be assumed that its silence over time means that actual events are occurring as expressed or implied in such forward-looking statements.


# # #









Cross Country Healthcare, Inc.

Consolidated Statements of Income

(amounts in thousands, except per share data)


  

Three Months Ended

March 31,

    
  

2004

 

2003

  

% Change

 
  

(unaudited)

    

                                                                                                                        

   

 

                    

     

 

                   

     

   

Revenue from services

   

$

172,612

     

$

161,003

  

7%

 

Operating expenses:

          

   Direct operating expenses

  

132,436

  

121,481

  

9%

 

   Selling, general and administrative expenses

  

28,095

  

25,013

  

12%

 

   Bad debt expense

  

626

  

  

ND

 

   Depreciation

  

1,593

  

1,068

  

49%

 

   Amortization

  

692

  

747

  

(7%)

 

Total operating expenses

  

163,442

  

148,309

  

10%

 

Income from operations

  

9,170

  

12,694

  

(28%)

 

Other expenses:

          

   Interest expense, net

  

1,247

  

586

  

113%

 

Income from continuing operations before income taxes

  

7,923

  

12,108

  

(35%)

 

Income tax expense

  

3,066

  

4,686

  

(35%)

 

Income from continuing operations

  

4,857

  

7,422

  

(35%)

 

Discontinued operations, net of income taxes

  

  

(371

)

 

(100%)

 

Net income

 

$

4,857

 

$

7,051

  

(31%)

 
           

Net income/(loss) per common share- basic :

          

   Income from continuing operations

 

$

0.15

 

$

0.23

    

   Discontinued operations, net of income taxes

  

  

(0.01

)

   

Net income per common share- basic

 

$

0.15

 

$

0.22

    
           

Net income/(loss) per common share- diluted :

          

   Income from continuing operations

 

$

0.15

 

$

0.23

    

   Discontinued operations, net of income taxes

  

  

(0.01

)

   

Net income per common share- diluted

 

$

0.15

 

$

0.22

    
           

Weighted average common shares outstanding - basic

  

31,861

  

32,247

    

Weighted average common shares outstanding - diluted

  

32,570

  

32,607

    

———————

ND - not determinable









Cross Country Healthcare, Inc.

Condensed Consolidated Balance Sheets

(amounts in thousands)


  

March 31,

2004

 

December 31,

2003

    
       
  

(unaudited)

       

                                                                                                                        

   

 

                    

     

 

                   

     

   

Assets

          

Current assets:

          

   Cash and cash equivalents

 

$

17

 

$

    

   Accounts receivable, net

  

112,656

  

112,407

    

   Income taxes receivable

  

  

2,310

    

   Other current assets

  

12,826

  

12,572

    

Total current assets

  

125,499

  

127,289

    

Property and equipment, net

  

12,568

  

12,602

    

Goodwill, net

  

309,110

  

307,532

    

Trademarks, net

  

15,749

  

15,749

    

Other identifiable intangible assets, net

  

8,048

  

8,580

    

Other assets, net

  

2,906

  

2,972

    

Total assets

 

$

473,880

 

$

474,724

    
           

Liabilities and Stockholders’ Equity

          

Current liabilities:

          

   Accounts payable and accrued expenses

 

$

4,228

 

$

9,462

    

   Accrued employee compensation and benefits

  

32,740

  

29,994

    

   Current portion of long-term debt and notes payable

  

4,668

  

4,944

    

   Other current liabilities

  

4,502

  

3,358

    

Total current liabilities

  

46,138

  

47,758

    

Deferred income taxes

  

17,649

  

17,649

    

Long-term debt and notes payable

  

82,823

  

88,794

    

Total liabilities

  

146,610

  

154,201

    

Commitments and contingencies

          

Stockholders’ equity:

          

   Common stock

  

3

  

3

    

   Additional paid-in capital

  

254,139

  

251,988

    

   Other stockholders’ equity

  

73,128

  

68,532

    

Total stockholders’ equity

  

327,270

  

320,523

    
           

Total liabilities and stockholders’ equity

 

$

473,880

 

$

474,724

    








Cross Country Healthcare, Inc.

Segment Data (a)

(amounts in thousands)


  

Three Months Ended

March 31,

    
  

2004

 

2003

  

% Change

 
  

(unaudited)

    

                                                                                                                        

   

 

                    

     

 

                   

     

   

Revenue from unaffiliated customers:

          

   Healthcare staffing

 

$

158,960

 

$

148,243

  

7%

 

   Other human capital management services

  

13,652

  

12,760

  

7%

 
  

$

172,612

 

$

161,003

  

7%

 
           

Contribution income (b):

          

   Healthcare staffing

 

$

15,574

 

$

18,902

  

(18%)

 

   Other human capital management services

  

1,682

  

1,427

  

18%

 
   

17,256

  

20,329

  

(15%)

 
           

   Unallocated corporate overhead

  

5,801

  

5,820

  

(0%)

 

   Depreciation

  

1,593

  

1,068

  

49%

 

   Amortization

  

692

  

747

  

(7%)

 

   Interest expense, net

  

1,247

  

586

  

113%

 

   Income from continuing operations before income taxes

 

$

7,923

 

$

12,108

  

(35%)

 



Cross Country Healthcare, Inc.

Financial Statistics

(unaudited)


  

Three Months Ended

March 31,

    
  

2004

 

2003

    

                                                                                                                        

   

 

                    

     

 

                   

     

   

Net cash provided by operating activites (in thousands)

 

$

8,179

 

$

15,873

    

FTEs (c)

  

6,013

  

5,516

    

Weeks worked (d)

  

78,169

  

71,708

    

Average healthcare staffing revenue per FTE per week (e)

 

$

2,034

 

$

2,067

    

———————

(a)

Segment data provided is in accordance with FASB Statement 131.

(b)

Defined as income from continuing operations before interest, income taxes, depreciation, amortization 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 contract staffing personnel on a full-time equivalent basis.

(d)

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

(e)

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



For further information, please contact:

Howard A. Goldman

Director/Investor & Corporate Relations

Phone: 877-686-9779

Email: hgoldman@crosscountry.com



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

Tel: (800) 347-2264   Fax: (561) 998-8533   www.crosscountry.com