Cross Country Healthcare Reports Fourth Quarter and Full Year 2012 Results
Consolidated revenue from continuing operations for the fourth quarter
of 2012 was
In the same quarter of the prior year, the Company had consolidated
revenue from continuing operations of
For the full year 2012, consolidated revenue from continuing operations
was
For the full year 2011, consolidated revenue from continuing operations
was
"While our fourth quarter revenue was in-line with our expectations, our
results were affected by a variety of factors that combined to result in
a loss from continuing operations. Excluding the impact of the
aforementioned professional liability expense, our successful efforts to
improve our gross margin sequentially, primarily in our nurse and allied
staffing segment, delivered results more rapidly than we had expected,"
said
"Our physician staffing business had a strong fourth quarter with
revenue up 10% year-over-year. In our other human capital management
services segment, revenue in our retained search business improved
year-over-year, but it was more than offset by weakness in our education
and training business," said
"Lastly, I would like to thank all of our former clinical trial services
employees for their contributions to Cross Country over the past dozen
years. We wish them every success in the future. Following the sale of
this business, the Company has a debt-free balance sheet and more than
Nurse and
For the fourth quarter of 2012, the nurse and allied staffing business
segment (travel and per diem nurse and allied health staffing) generated
revenue of
Segment staffing volume was essentially flat both year-over-year and
sequentially. Travel staffing volume decreased 1% year-over-year and
decreased slightly sequentially while per diem staffing volume increased
7% year-over-year and 3% sequentially. The average revenue per FTE per
day for the fourth quarter of 2012 was
For the full year of 2012, segment revenue decreased slightly to
For the fourth quarter of 2012, the physician staffing business segment
generated revenue of
For the full year of 2012, segment revenue increased 4% to
Other Human Capital Management Services
For the fourth quarter of 2012, the other human capital management
services business segment (education and training and retained search)
generated revenue of
For the full year of 2012, segment revenue decreased 1% to
Debt Outstanding and Credit Facility
At
On
During
Discontinued Operations
In
Guidance for First Quarter 2013
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, any impairment charges or valuation allowances, or significant legal proceedings. For the first quarter of 2013, the Company expects:
-
Revenue to be in the
$110.0 million to $112.0 million range. - Gross profit margin to be in the 24.5% to 25.0% range.
- Adjusted EBITDA from continuing operations margin to be in the 0.0% to 2.0% range. Adjusted EBITDA, a non-GAAP financial measure, is defined in the accompanying financial statement tables.
- Earnings per diluted share to be essentially at break-even.
Quarterly Conference Call
The Company will hold its quarterly conference call on
Non-GAAP (Generally Accepted Accounting Principles) Financial Measures
This press release and accompanying financial statement tables reference non-GAAP financial measures. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in accordance with U.S. GAAP. Such non-GAAP financial measures are provided for consistency and comparability to prior year results; furthermore, management believes they are useful to investors when evaluating the Company's performance as it excludes certain items that management believes are not indicative of the Company's operating performance. Such non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. The financial statement tables that accompany this press release include a reconciliation of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure and a more detailed discussion of each financial measure; as such, the financial statement tables should be read in conjunction with the presentation of these non-GAAP financial measures.
About
In addition to historical information, this press release contains
statements relating to our future results (including certain projections
and business trends) that are "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and are subject to the "safe harbor" created by those
sections. Forward-looking statements consist of statements that are
predictive in nature, depend upon or refer to future events. Words such
as "expects", "anticipates", "intends", "plans", "believes",
"estimates", "suggests", "appears", "seeks", "will" and variations of
such words and similar expressions intended to identify forward-looking
statements. Forward-looking 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, without limitation, the following: our ability to
attract and retain qualified nurses, physicians and other healthcare
personnel, costs and availability of short-term housing for our travel
nurses and physicians, 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, 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 in Item 1A. "Risk
Factors" in the Company's Annual Report on Form 10-K for the year ended
December 31, 2011, and our other
Although we believe that these statements are based upon reasonable
assumptions, we cannot guarantee future results and readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the date of
this press release. There can be no assurance that (i) we have correctly
measured or identified all of the factors affecting our business or the
extent of these factors' likely impact, (ii) the available information
with respect to these factors on which such analysis is based is
complete or accurate, (iii) such analysis is correct or (iv) our
strategy, which is based in part on this analysis, will be successful.
The Company undertakes no obligation to update or revise forward-looking
statements. All references to "we," "us," "our," or "Cross Country" in
this press release mean
|
|||||||||||||||||
Consolidated Statements of Operations | |||||||||||||||||
(Unaudited, amounts in thousands, except per share data) | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
|
|
|
|
December 31, | |||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||
Revenue from services | $ | 111,731 | $ | 108,991 | $ | 112,257 | $ | 442,635 | $ | 439,377 | |||||||
Operating expenses: | |||||||||||||||||
Direct operating expenses | 83,787 | 78,840 | 84,802 | 331,050 | 319,989 | ||||||||||||
Selling, general and administrative expenses | 27,055 | 26,155 | 26,832 | 109,417 | 104,544 | ||||||||||||
Bad debt expense | 195 | 329 | 268 | 786 | 574 | ||||||||||||
Depreciation (c) | 1,107 | 1,395 | 1,035 | 4,905 | 5,965 | ||||||||||||
Amortization (c) | 566 | 566 | 566 | 2,263 | 2,394 | ||||||||||||
Impairment charges (a) | - | - | - | 18,732 | - | ||||||||||||
Total operating expenses | 112,710 | 107,285 | 113,503 | 467,153 | 433,466 | ||||||||||||
(Loss) income from operations | (979 | ) | 1,706 | (1,246) | (24,518) | 5,911 | |||||||||||
Other (income) expenses: | |||||||||||||||||
Foreign exchange (income) loss | (65 | ) | (124 | ) | 108 | (62) | (264) | ||||||||||
Interest expense, net | 433 | 676 | 697 | 2,341 | 2,856 | ||||||||||||
Loss on modification of debt | - | - | 82 | 82 | - | ||||||||||||
Other (income) expense, net | (23 | ) | (70 | ) | (89) | 16 | (298) | ||||||||||
(Loss) income from continuing operations before income taxes | (1,324 | ) | 1,224 | (2,044) | (26,895) | 3,617 | |||||||||||
Income tax expense (benefit) | 1,661 | 1,416 | (2,763) | (6,150) | 2,069 | ||||||||||||
(Loss) income from continuing operations | (2,985 | ) | (192 | ) | 719 | (20,745) | 1,548 | ||||||||||
Discontinued operations, net of income taxes (b) | (6,548 | ) | 724 | (18,319) | (21,476) | 2,550 | |||||||||||
Net (loss) income | $ | (9,533 | ) | $ | 532 | $ | (17,600) | $ | (42,221) | $ | 4,098 | ||||||
Net (loss) income per common share, basic: | |||||||||||||||||
(Loss) income from continuing operations | $ | (0.10 | ) | $ | 0.00 | $ | 0.02 | $ | (0.67) | $ | 0.05 | ||||||
Discontinued operations (b) | (0.21 | ) | 0.02 | (0.59) | (0.70) | 0.08 | |||||||||||
Net (loss) income | $ | (0.31 | ) | $ | 0.02 | $ | (0.57) | $ | (1.37) | $ | 0.13 | ||||||
Net (loss) income per common share, diluted: | |||||||||||||||||
(Loss) income from continuing operations | $ | (0.10 | ) | $ | 0.00 | $ | 0.02 | $ | (0.67) | $ | 0.05 | ||||||
Discontinued operations (b) | (0.21 | ) | 0.02 | (0.59) | (0.70) | 0.08 | |||||||||||
Net (loss) income | $ | (0.31 | ) | $ | 0.02 | $ | (0.57) | $ | (1.37) | $ | 0.13 | ||||||
Weighted average common shares outstanding: | |||||||||||||||||
Basic | 30,902 | 31,108 | 30,902 | 30,843 | 31,146 | ||||||||||||
Diluted | 30,902 | 31,117 | 30,902 | 30,843 | 31,192 | ||||||||||||
|
|||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||
Adjusted EBITDA (d) | |||||||||||||||||
(Unaudited, amounts in thousands) | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
|
|
|
|
December 31, | |||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||
(Loss) income from operations | $ | (979 | ) | $ | 1,706 | $ | (1,246) | $ | (24,518) | $ | 5,911 | ||||||
Depreciation (c) | 1,107 | 1,395 | 1,035 | 4,905 | 5,965 | ||||||||||||
Amortization (c) | 566 | 566 | 566 | 2,263 | 2,394 | ||||||||||||
Impairment charges (a) | - | - | - | 18,732 | - | ||||||||||||
Equity compensation | 615 | 645 | 611 | 2,595 | 2,895 | ||||||||||||
Adjusted EBITDA from continuing operations | 1,309 | 4,312 | 966 | 3,977 | 17,165 | ||||||||||||
Adjusted EBITDA from discontinued operations | 1,905 | 1,473 | 1,574 | 6,363 | 6,555 | ||||||||||||
Adjusted EBITDA (d) | $ | 3,214 | $ | 5,785 | $ | 2,540 | $ | 10,340 | $ | 23,720 | |||||||
|
|||||||||||||||||
Condensed Consolidated Balance Sheets (e) | |||||||||||||||||
(Unaudited, amounts in thousands) | |||||||||||||||||
|
December 31, | ||||||||||||||||
2012 | 2011 | ||||||||||||||||
Assets | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 10,463 | $ | 10,648 | |||||||||||||
Short-term cash investments | - | 1,691 | |||||||||||||||
Accounts receivable, net | 62,674 | 71,802 | |||||||||||||||
Deferred tax assets | 12,561 | 10,645 | |||||||||||||||
Income taxes receivable | 586 | 1,879 | |||||||||||||||
Prepaid expenses | 5,580 | 7,441 | |||||||||||||||
Assets held for sale | 46,971 | - | |||||||||||||||
Insurance recovery receivable | 5,484 | 4,741 | |||||||||||||||
Other current assets | 1,049 | 701 | |||||||||||||||
Total current assets | 145,368 | 109,548 | |||||||||||||||
Property and equipment, net | 8,235 | 12,018 | |||||||||||||||
Trademarks, net | 48,701 | 52,053 | |||||||||||||||
Goodwill, net | 62,712 | 143,344 | |||||||||||||||
Other identifiable intangible assets, net | 14,492 | 21,195 | |||||||||||||||
Debt issuance costs, net (e) | 1,610 | 1,199 | |||||||||||||||
Non-current deferred tax assets | 16,182 | - | |||||||||||||||
Other long-term assets | 8,623 | 8,585 | |||||||||||||||
Total assets | $ | 305,923 | $ | 347,942 | |||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable and accrued expenses | $ | 10,130 | $ | 9,018 | |||||||||||||
Accrued employee compensation and benefits | 21,650 | 21,074 | |||||||||||||||
Current portion of long-term debt | 33,683 | 16,998 | |||||||||||||||
Liabilities related to assets held for sale | 2,835 | - | |||||||||||||||
Other current liabilities | 4,289 | 4,002 | |||||||||||||||
Total current liabilities | 72,587 | 51,092 | |||||||||||||||
Long-term debt | 176 | 25,048 | |||||||||||||||
Non-current deferred tax liabilities | - | 58 | |||||||||||||||
Other long-term liabilities | 24,038 | 22,444 | |||||||||||||||
Total liabilities | $ | 96,801 | $ | 98,642 | |||||||||||||
Commitments and contingencies | |||||||||||||||||
Stockholders' equity: | |||||||||||||||||
Common stock | 3 | 3 | |||||||||||||||
Additional paid-in capital | 244,924 | 243,170 | |||||||||||||||
Accumulated other comprehensive loss | (3,083 | ) | (3,373 | ) | |||||||||||||
(Accumulated deficit) retained earnings | (32,722 | ) | 9,500 | ||||||||||||||
Total stockholders' equity | $ | 209,122 | $ | 249,300 | |||||||||||||
Total liabilities and stockholders' equity | $ | 305,923 | $ | 347,942 | |||||||||||||
|
|||||||||||||||||
Segment Data (f) | |||||||||||||||||
(Unaudited, amounts in thousands) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
|
|
|
YOY | Sequential | |||||||||||||
2012 | 2011 | 2012 | % change | % change | |||||||||||||
Revenue from services: | |||||||||||||||||
Nurse and allied staffing | $ | 70,850 | $ | 70,287 | $ | 69,750 | 1% | 2% | |||||||||
Physician staffing | 30,667 | 27,928 | 32,680 | 10% | -6% | ||||||||||||
Other human capital management services | 10,214 | 10,776 | 9,827 | -5% | 4% | ||||||||||||
$ | 111,731 | $ | 108,991 | $ | 112,257 | 3% | 0% | ||||||||||
Contribution income (g) | |||||||||||||||||
Nurse and allied staffing | $ | 4,012 | $ | 5,473 | $ | 2,950 | -27% | 36% | |||||||||
Physician staffing | 2,460 | 2,720 | 3,108 | -10% | -21% | ||||||||||||
Other human capital management services | 534 | 852 | 25 | -37% | 2036% | ||||||||||||
$ | 7,006 | $ | 9,045 | $ | 6,083 | -23% | 15% | ||||||||||
Unallocated corporate overhead | $ | 6,312 | $ | 5,378 | $ | 5,728 | -17% | -10% | |||||||||
Depreciation (c) | 1,107 | 1,395 | 1,035 | 21% | -7% | ||||||||||||
Amortization (c) | 566 | 566 | 566 | 0% | 0% | ||||||||||||
(Loss) income from operations | $ | (979 | ) | $ | 1,706 | $ | (1,246) | -157% | 21% | ||||||||
Year Ended | |||||||||||||||||
|
|
YOY | |||||||||||||||
2012 | 2011 | % change | |||||||||||||||
Revenue from services: | |||||||||||||||||
Nurse and allied staffing | $ | 277,754 | $ | 278,793 | 0% | ||||||||||||
Physician staffing | 123,545 | 118,781 | 4% | ||||||||||||||
Other human capital management services | 41,336 | 41,803 | -1% | ||||||||||||||
$ | 442,635 | $ | 439,377 | 1% | |||||||||||||
Contribution income (g) | |||||||||||||||||
Nurse and allied staffing | $ | 13,202 | $ | 22,441 | -41% | ||||||||||||
Physician staffing | 10,652 | 11,320 | -6% | ||||||||||||||
Other human capital management services | 1,944 | 3,172 | -39% | ||||||||||||||
$ | 25,798 | $ | 36,933 | -30% | |||||||||||||
Unallocated corporate overhead | $ | 24,416 | $ | 22,663 | -8% | ||||||||||||
Depreciation (c) | 4,905 | 5,965 | 18% | ||||||||||||||
Amortization (c) | 2,263 | 2,394 | 5% | ||||||||||||||
Impairment charges (a) | 18,732 | - |
-100% |
||||||||||||||
(Loss) income from operations | $ | (24,518 | ) | $ | 5,911 | -515% | |||||||||||
|
|||||||||||||||||
Other Financial Data | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | Year Ended | ||||||||||||||||
|
|
|
|
December 31, | |||||||||||||
2012 | 2011 | 2012 | 2012 | 2011 | |||||||||||||
Net cash provided by operating activities (in thousands) | $ | 4,440 | $ | 3,666 | $ | 1,903 | $ | 10,146 | $ | 18,296 | |||||||
Nurse and allied staffing statistical data: |
|||||||||||||||||
FTEs (h) | 2,452 | 2,457 | 2,450 | 2,446 | 2,472 | ||||||||||||
Days worked (i) | 225,584 | 226,044 | 225,400 | 895,236 | 902,280 | ||||||||||||
Average nurse and allied staffing revenue per FTE per day (j) | $ | 314 | $ | 311 | $ | 309 | $ | 310 | $ | 309 | |||||||
Physician staffing statistical data: |
|||||||||||||||||
Days filled (k) | 20,290 | 20,200 | 22,647 | 85,001 | 85,416 | ||||||||||||
Revenue per days filled (l) | $ | 1,511 | $ | 1,383 | $ | 1,443 | $ | 1,453 | $ | 1,391 | |||||||
(a) Impairment charges relate to the impairment of goodwill in the
Company's nurse and allied staffing reporting unit pursuant to the Intangibles-Goodwill
and Other Topic of the |
|||||||||||||||||
(b) Discontinued operations include the results of the Company's
clinical trial services business segment which include the
impairment of its goodwill and certain trademarks in its third and
fourth quarters of 2012. In the fourth quarter of 2012, the
Company decided to sell this business segment and completed the
sale on |
|||||||||||||||||
(c) Excludes depreciation and amortization of discontinued
operations. Total depreciation and amortization included in
discontinued operations were (in thousands): 1Q12- |
|||||||||||||||||
(d) Adjusted EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, is defined as (loss) income from operations before depreciation, amortization, impairment charges and non-cash equity compensation. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to (loss) income from operations as an indicator of operating performance. Management uses Adjusted EBITDA as one performance measure in its annual cash incentive program for certain members of its management team. In addition, management monitors Adjusted EBITDA for planning purposes, including compliance with its debt covenants. Adjusted EBITDA, as defined, closely matches the operating measure typically used in the Company's credit facilities in calculating various ratios. Management believes Adjusted EBITDA, as defined, is useful to investors when evaluating the Company's performance as it excludes certain items that management believes are not indicative of the Company's operating performance. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by the Company's consolidated revenue. | |||||||||||||||||
(e) Certain prior year amounts have been reclassified to conform to the current period's presentation. | |||||||||||||||||
(f) Segment data provided is in accordance with the Segment Reporting Topic of the FASB ASC. | |||||||||||||||||
(g) Defined as (loss) income from operations before depreciation, amortization, impairment charges and corporate expenses not specifically identified to a reporting segment. Contribution income is a financial measure used by management when assessing segment performance. | |||||||||||||||||
(h) FTEs represent the average number of nurse and allied contract staffing personnel on a full-time equivalent basis. | |||||||||||||||||
(i) Days worked is calculated by multiplying the FTEs by the number of days during the respective period. | |||||||||||||||||
(j) Average revenue per FTE per day is calculated by dividing the nurse and allied staffing revenue by the number of days worked in the respective periods. Nurse and allied staffing revenue also includes revenue from permanent placement of nurses. | |||||||||||||||||
(k) Days filled is calculated by dividing the total hours filled during the period by 8 hours. | |||||||||||||||||
(l) Revenue per day filled is calculated by dividing the applicable revenue generated by the Company's physician staffing segment by days filled for the period presented. |
Director/Investor
& Corporate Relations
Email: hgoldman@crosscountry.com
Source:
News Provided by Acquire Media