Quarterly revenue of $532 million, up 2% over prior year;
GAAP EPS of $0.71 and adjusted EPS of $0.75
SAN DIEGO–(BUSINESS WIRE)–AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in
healthcare workforce solutions and staffing services, today announced
its first quarter 2019 financial results. Financial highlights are as
follows:
Dollars in millions, except per share amounts.
| Q1 2019 |
% Change |
|||||||
| Revenue | $ | 532.4 | 2 | % | ||||
| Gross profit | $ | 176.8 | 5 | % | ||||
| Net income | $ | 34.1 | (20 | )% | ||||
| Diluted EPS | $ | 0.71 | (18 | )% | ||||
| Adjusted diluted EPS* | $ | 0.75 | (7 | )% | ||||
| Adjusted EBITDA* | $ | 66.0 | (1 | )% | ||||
| * |
See “Non-GAAP Measures” below for a discussion of our use of non-GAAP items and the table entitled “Supplemental Financial and Operating Data” for a reconciliation of non-GAAP items. |
|
Highlights
-
Financial results for the first quarter of 2019 came in above Company
guidance. -
First quarter consolidated revenue of $532 million increased 2% year
over year. -
Nurse and Allied Solutions revenue of $337 million flat with the prior
year, with Allied growth of 10% offset by lower revenue from one
client and a lighter flu season headwind in Nursing. - Adjusted EBITDA of $66 million, representing 12.4% of revenue.
- Repurchased 378,000 shares for $18 million.
-
Executed agreement to acquire Advanced Medical to expand our travel
therapy, school therapy and travel nurse staffing capabilities.
“The AMN team did an impressive job serving our clients and healthcare
professionals, expanding existing relationships and adding new clients
since the beginning of the year. Despite a tough year-over-year
comparison in travel nursing, our team persevered and every segment met
or beat our expectations in the quarter,” said Susan R. Salka, Chief
Executive Officer of AMN Healthcare. “Demand has strengthened across
most service lines, with the most significant increases in travel
nursing, allied and interim leadership. We also continue to make
progress in our Locum Tenens segment.
“We are thrilled that the innovative team at Advanced Medical will soon
be part of the AMN family. Advanced Medical will expand the AMN
portfolio of services and enhance our offerings in some of the faster
growing care settings. In addition to the attractive nature of their
growing footprint in schools, we are excited about the potential of the
recently launched telehealth platform for delivery of therapeutic
services to children across the country,” Ms. Salka said.
First Quarter 2019 Results
Consolidated revenue for the quarter was $532 million, a 2% increase
over prior year and a 1% increase compared with prior quarter. Revenue
for the Nurse and Allied Solutions segment was $337 million, flat year
over year and up 2% sequentially. Facing a difficult comparison due to
the elevated year-ago flu season, Travel Nurse division revenue was flat
year over year. Allied division revenue increased 10% year over year on
higher volume.
The Locum Tenens Solutions segment reported revenue of $80 million, down
by 22% year over year. Other Workforce Solutions segment revenue was
$115 million for an increase of 42% year over year, driven by the
acquisitions made in April 2018.
Gross margin was 33.2%, higher by 110 basis points year over year and
higher by 60 basis points sequentially. The year-over-year variance was
driven by higher-than-average gross margins from companies acquired last
April and a change in classification of certain recruiter expenses from
cost of sales to SG&A in our physician permanent placement business.
SG&A expenses were $120 million, or 22.5% of revenue, compared with $105
million, or 20.0% of revenue, in the same quarter last year. SG&A was
$111 million, or 21.0% of revenue, in the previous quarter. The
year-over-year increase in expense margin stemmed mainly from the
acquisitions, integration-related activities and the physician permanent
placement cost change.
Income from operations was $45 million, or 8.5% of revenue, compared
with $55 million, or 10.6% of revenue, in the same quarter last year.
Adjusted EBITDA was $66 million, a year-over-year decrease of 1%.
Adjusted EBITDA margin was 12.4%, representing a decrease of 30 basis
points year over year and a decrease of 20 basis points sequentially.
Net income was $34 million, or $0.71 per diluted share, compared with
$43 million, or $0.87 per diluted share, in the same quarter last year.
Adjusted diluted EPS was $0.75.
At March 31, 2019, cash and cash equivalents totaled $19 million. Cash
flow from operations was $36 million for the quarter, and capital
expenditures were $7 million. AMN repurchased 378,000 shares of stock
for $18 million during the quarter. The Company ended the quarter with
total debt outstanding of $475 million, with a leverage ratio as
calculated in accordance with the Company’s credit agreement of 1.9 to 1.
Advanced Medical Acquisition
On April 30, we announced an agreement to acquire Advanced Medical, a
leading provider of travel therapy and travel nursing, with a strong and
growing presence in the school staffing market. The purchase price is
$200 million in cash, plus up to $20 million contingent consideration
based on 2019 financial performance. Advanced Medical reported 2018
revenue of $132 million with adjusted EBITDA of $19 million.
The acquisition is expected to close in early June 2019 and is not
included in the Company’s second quarter 2019 financial outlook.
|
Second Quarter 2019 Outlook |
|||
| Metric | Guidance* | ||
| Consolidated revenue |
$518 – $524 million |
||
| Gross margin | 33.5% | ||
| SG&A as percentage of revenue |
23.0% to 23.5% |
||
| Operating margin | 7.8% | ||
| Adjusted EBITDA margin | 12.0% |
| * |
Note: Guidance percentage metrics are approximate. For a reconciliation of adjusted EBITDA margin, see the table entitled “Reconciliation of Guidance Adjusted EBITDA Margin to Guidance Operating Margin” below. |
|
Revenue in the second quarter of 2019 is expected to be down 6-7% year
over year, due primarily to a prior-year $25 million labor disruption
event in the Nurse and Allied segment and a decline in the Locum Tenens
segment. Excluding the impact of the prior-year labor disruption event,
consolidated revenue would be down about 2% due to the lower Locums
revenue. This guidance reflects the normal seasonal sequential decline
in our nursing business. No significant labor disruption revenue is
included in second quarter guidance.
Conference Call on May 2, 2019
AMN Healthcare Services, Inc. (NYSE: AMN), healthcare’s leader and
innovator in workforce solutions and staffing services, will host a
conference call to discuss its first quarter 2019 financial results on
Thursday, May 2, 2019, at 5:00 p.m. Eastern Time. A live webcast of the
call can be accessed through AMN Healthcare’s website at http://amnhealthcare.investorroom.com/eventcalendar.
Please log in at least 10 minutes prior to the conference call in order
to download the applicable audio software. Interested parties may
participate live via telephone by dialing (800) 288-8960 in the U.S. or
(612) 234-9960 internationally. Following the conclusion of the call, a
replay of the webcast will be available at the Company’s website.
Alternatively, a telephonic replay of the call will be available
starting at 7:30 p.m. Eastern Time on May 2, 2019, and can be accessed
until 11:59 p.m. Eastern Time on May 16, 2019, by calling (800) 475-6701
in the U.S. or (320) 365-3844 internationally, with access code 466135.
About AMN Healthcare
AMN Healthcare is the leader and innovator in healthcare workforce
solutions and staffing services to healthcare facilities across the
nation. The Company provides unparalleled access to the most
comprehensive network of quality healthcare professionals through its
innovative recruitment strategies and breadth of career opportunities.
With insights and expertise, AMN Healthcare helps providers optimize
their workforce to successfully reduce complexity, increase efficiency
and improve patient outcomes. AMN delivers managed services programs,
healthcare executive search solutions, vendor management systems,
recruitment process outsourcing, predictive labor analytics, mid-revenue
cycle management, credentialing solutions, and other services. AMN
Healthcare is committed to fostering and maintaining a diverse team that
reflects the communities we serve. Our commitment to the inclusion of
many different backgrounds, experiences and perspectives enables our
innovation and leadership in the healthcare services industry.
The Company’s common stock is listed on the New York Stock Exchange
under the symbol “AMN.” For more information about AMN Healthcare, visit www.amnhealthcare.com,
where the Company posts news releases, investor presentations, webcasts,
SEC filings and other material information. The Company also utilizes
email alerts and Really Simple Syndication (“RSS”) as routine channels
to supplement distribution of this information. To register for email
alerts and RSS, visit http://amnhealthcare.investorroom.com/emailalerts.
Non-GAAP Measures
This earnings release contains certain non-GAAP financial information,
which the Company provides as additional information, and not as an
alternative, to the Company’s condensed consolidated financial
statements presented in accordance with GAAP. These non-GAAP financial
measures include (1) adjusted EBITDA, (2) adjusted EBITDA margin and (3)
adjusted diluted EPS. The Company provides such non-GAAP financial
measures because management believes that they are useful both to
management and investors as a supplement, and not as a substitute, when
evaluating the Company’s operating performance. Additionally, management
believes that adjusted EBITDA, adjusted EBITDA margin and adjusted
diluted EPS serve as industry-wide financial measures. The Company uses
adjusted EBITDA for making financial decisions and allocating resources.
The non-GAAP measures in this release are not in accordance with, or an
alternative to, GAAP measures and may be different from non-GAAP
measures, or may be calculated differently than other similarly titled
non-GAAP measures, reported by other companies. They should not be used
in isolation to evaluate the Company’s performance. A reconciliation of
non-GAAP measures identified in this release, along with further detail
about the use and limitations of certain of these non-GAAP measures, may
be found below in the table entitled “Supplemental Financial and
Operating Data” under the caption entitled “Reconciliation of Non-GAAP
Items” and the footnotes thereto or on the Company’s website at http://amnhealthcare.investorroom.com/financialreports.
Additionally, from time to time, additional information regarding
non-GAAP financial measures, including pro forma measures, may be made
available on the Company’s website.
Forward-Looking Statements
This press release contains “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.
Forward-looking statements include, among others, statements concerning
our guidance for second quarter 2019 revenue, gross margin, SG&A
expenses as a percentage of revenue and adjusted EBITDA margin. The
Company bases these forward-looking statements on its current
expectations, estimates and projections about future events and the
industry in which it operates using information currently available to
it. Actual results could differ materially from those discussed in, or
implied by, these forward-looking statements. Forward-looking statements
are identified by words such as “believe,” “anticipate,” “expect,”
“intend,” “plan,” “will,” “may,” “estimates,” variations of such words
and other similar expressions. In addition, any statements that refer to
expectations, projections or other characterizations of future events or
circumstances are forward-looking statements.
The Company’s ability to meet the targets and expectations noted in our
second quarter 2019 outlook depends upon, among other factors, our
ability to (i) manage the pricing impact that the consolidation of
healthcare delivery organizations may have on our business, (ii) comply
with extensive and complex federal and state laws and regulations
related to the conduct of our operations, costs and payment for services
and payment for referrals as well as laws regarding employment
practices, (iii) implement new infrastructure and technology systems to
optimize our operating results and manage our business effectively, (iv)
develop and evolve our current technology offerings and capabilities,
(v) recruit and retain sufficient quality healthcare professionals at
reasonable costs, and (vi) consummate and effectively incorporate
acquisitions into our business.
For a discussion of additional risk factors and a more complete
discussion of some of the cautionary statements noted above that could
cause actual results to differ from those implied by the forward-looking
statements contained in this press release, please refer to our most
recent Annual Report on Form 10-K for the year ended December 31, 2018,
our subsequent Quarterly Reports on Form 10-Q and our Current Reports on
Form 8-K. Be advised that developments subsequent to this press release
are likely to cause these statements to become outdated and the Company
is under no obligation (and expressly disclaims any such obligation) to
update or revise any forward-looking statements whether as a result of
new information, future events, or otherwise.
|
AMN Healthcare Services, Inc. |
||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31, | December 31, | |||||||||||||
| 2019 | 2018 | 2018 | ||||||||||||
| Revenue | $ | 532,441 | $ | 522,489 | $ | 528,635 | ||||||||
| Cost of revenue | 355,682 | 354,665 | 356,179 | |||||||||||
| Gross profit | 176,759 | 167,824 | 172,456 | |||||||||||
| Gross margin | 33.2 | % | 32.1 | % | 32.6 | % | ||||||||
| Operating expenses: | ||||||||||||||
| Selling, general and administrative (SG&A) | 119,997 | 104,737 | 110,830 | |||||||||||
| SG&A as a % of revenue | 22.5 | % | 20.0 | % | 21.0 | % | ||||||||
| Depreciation and amortization | 11,710 | 7,886 | 11,449 | |||||||||||
| Total operating expenses | 131,707 | 112,623 | 122,279 | |||||||||||
| Income from operations | 45,052 | 55,201 | 50,177 | |||||||||||
| Operating margin (1) | 8.5 | % | 10.6 | % | 9.5 | % | ||||||||
| Interest expense, net, and other | 5,673 | 5,335 | (217 | ) | ||||||||||
| Income before income taxes | 39,379 | 49,866 | 50,394 | |||||||||||
| Income tax expense | 5,257 | 7,185 | 14,781 | |||||||||||
| Net income | $ | 34,122 | $ | 42,681 | $ | 35,613 | ||||||||
| Net income as a % of revenue | 6.4 | % | 8.2 | % | 6.7 | % | ||||||||
|
Other comprehensive income (loss): |
||||||||||||||
| Foreign currency translation and other | (101 | ) | (19 | ) | 58 | |||||||||
|
Other comprehensive income (loss): |
(101 | ) | (19 | ) | 58 | |||||||||
| Comprehensive income | $ | 34,021 | $ | 42,662 | $ | 35,671 | ||||||||
| Net income per common share: | ||||||||||||||
| Basic | $ | 0.73 | $ | 0.89 | $ | 0.76 | ||||||||
| Diluted | $ | 0.71 | $ | 0.87 | $ | 0.74 | ||||||||
| Weighted average common shares outstanding: | ||||||||||||||
| Basic | 46,784 | 47,733 | 46,825 | |||||||||||
| Diluted |
47,772 |
49,116 | 48,102 | |||||||||||
|
AMN Healthcare Services, Inc. |
||||||||||||||||
| Three Months Ended | ||||||||||||||||
| March 31, | December 31, | |||||||||||||||
| 2019 | 2018 | 2018 | ||||||||||||||
| Revenue | ||||||||||||||||
| Nurse and allied solutions | $ | 337,029 | $ | 338,179 | $ | 329,317 | ||||||||||
| Locum tenens solutions | 80,490 | 103,117 | 81,850 | |||||||||||||
| Other workforce solutions | 114,922 | 81,193 | 117,468 | |||||||||||||
| $ | 532,441 | $ | 522,489 | $ | 528,635 | |||||||||||
| Reconciliation of Non-GAAP Items: | ||||||||||||||||
| Segment operating income (2) | ||||||||||||||||
| Nurse and allied solutions | $ | 47,922 | $ | 51,805 | $ | 45,521 | ||||||||||
| Locum tenens solutions | 5,701 | 9,958 | 7,027 | |||||||||||||
| Other workforce solutions | 26,188 | 19,851 | 27,104 | |||||||||||||
| 79,811 | 81,614 | 79,652 | ||||||||||||||
| Unallocated corporate overhead | 13,834 | 15,095 | 13,281 | |||||||||||||
| Adjusted EBITDA (3) | 65,977 | 66,519 | 66,371 | |||||||||||||
| Adjusted EBITDA margin (4) | 12.4 | % | 12.7 | % | 12.6 | % | ||||||||||
| Depreciation and amortization | 11,710 | 7,886 | 11,449 | |||||||||||||
| Share-based compensation (5) | 5,186 | 2,864 | 2,861 | |||||||||||||
|
Acquisition, integration and other costs (6) |
4,029 | 568 | 1,884 | |||||||||||||
| Income from operations | 45,052 | 55,201 | 50,177 | |||||||||||||
|
Interest expense, net, and other (7) |
5,673 | 5,335 | (217 | ) | ||||||||||||
| Income before income taxes | 39,379 | 49,866 | 50,394 | |||||||||||||
| Income tax expense | 5,257 | 7,185 | 14,781 | |||||||||||||
| Net Income | $ | 34,122 | $ | 42,681 | $ | 35,613 | ||||||||||
| GAAP diluted net income per share (EPS) | $ | 0.71 | $ | 0.87 | $ | 0.74 | ||||||||||
| Adjustments: | ||||||||||||||||
| Amortization of intangible assets | 0.14 | 0.09 | 0.14 | |||||||||||||
|
Acquisition, integration and other costs (6) |
0.09 | 0.01 | 0.04 | |||||||||||||
|
Equity investment fair value changes (7) |
— | — | (0.13 | ) | ||||||||||||
| Debt financing related costs | — | 0.01 | — | |||||||||||||
| Tax effect on above adjustments | (0.06 | ) | (0.03 | ) | (0.01 | ) | ||||||||||
|
Tax correction related to prior periods (8) |
— | (0.05 | ) | — | ||||||||||||
|
Tax effect of COLI fair value changes (9) |
(0.03 | ) | — | 0.04 | ||||||||||||
|
Excess tax benefits (10) |
(0.10 | ) | (0.09 | ) | (0.01 | ) | ||||||||||
|
Adjusted diluted EPS (11) |
$ | 0.75 | $ | 0.81 | $ | 0.81 | ||||||||||
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| Gross Margin | ||||||||||||
| Nurse and allied solutions | 27.9 | % | 28.0 | % | 27.2 | % | ||||||
| Locum tenens solutions | 27.7 | % | 28.7 | % | 27.2 | % | ||||||
| Other workforce solutions | 52.6 | % | 53.6 | % | 51.7 | % | ||||||
|
Operating Data: |
||||||||||||
| Nurse and allied solutions | ||||||||||||
|
Average healthcare professionals on assignment (12) |
9,580 | 9,567 | 9,404 | |||||||||
| Locum tenens solutions | ||||||||||||
| Days filled (13) | 40,496 | 52,794 | 41,000 | |||||||||
| Revenue per day filled (14) | $ | 1,988 | $ | 1,953 | $ | 1,996 | ||||||
| As of March 31, | As of December 31, | |||||||||||
| 2019 | 2018 | 2018 | ||||||||||
| Leverage ratio (15) | 1.9 | 1.2 | 1.7 | |||||||||
|
AMN Healthcare Services, Inc. |
||||||||||||
|
March 31, |
December 31, |
March 31, |
||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 19,116 | $ | 13,856 | $ | 54,499 | ||||||
| Accounts receivable, net | 365,231 | 365,871 | 338,600 | |||||||||
| Accounts receivable, subcontractor | 55,607 | 50,143 | 39,027 | |||||||||
| Prepaid and other current assets | 48,933 | 52,296 | 57,244 | |||||||||
| Total current assets | 488,887 | 482,166 | 489,370 | |||||||||
| Restricted cash, cash equivalents and investments | 61,279 | 59,331 | 60,236 | |||||||||
| Fixed assets, net | 93,625 | 90,419 | 75,530 | |||||||||
| Operating lease right-of-use assets | 97,055 | — | ||||||||||
| Other assets | 105,590 | 96,152 | 84,112 | |||||||||
| Goodwill | 464,923 | 438,506 | 340,596 | |||||||||
| Intangible assets, net | 326,466 | 326,147 | 222,708 | |||||||||
| Total assets | $ | 1,637,825 | $ | 1,492,721 | $ | 1,272,552 | ||||||
|
Liabilities and stockholders’ equity |
||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable and accrued expenses | $ | 153,566 | $ | 149,603 | $ | 122,402 | ||||||
| Accrued compensation and benefits | 135,792 | 135,059 | 117,415 | |||||||||
| Current portion of operating lease liabilities | 12,341 | — | — | |||||||||
| Deferred revenue | 11,459 | 12,365 | 8,746 | |||||||||
| Other current liabilities | 20,112 | 10,243 | 2,616 | |||||||||
| Total current liabilities | 333,270 | 307,270 | 251,179 | |||||||||
| Revolving credit facility | 150,000 | 120,000 | — | |||||||||
| Notes payable, less unamortized fees | 320,798 | 320,607 | 320,034 | |||||||||
| Deferred income taxes, net | 20,079 | 27,326 | 21,922 | |||||||||
| Operating lease liabilities | 99,946 | — | — | |||||||||
| Other long-term liabilities | 63,746 | 78,528 | 80,201 | |||||||||
| Total liabilities | 987,839 | 853,731 | 673,336 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders’ equity: | 649,986 | 638,990 | 599,216 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,637,825 | $ | 1,492,721 | $ | 1,272,552 | ||||||
|
AMN Healthcare Services, Inc. |
|||||||||||||
| Three Months Ended | |||||||||||||
| March 31, | December 31, | ||||||||||||
| 2019 | 2018 | 2018 | |||||||||||
| Net cash provided by operating activities | $ |
36,214 |
$ | 59,735 | $ | 58,947 | |||||||
| Net cash used in investing activities |
(36,248 |
) | (9,613 | ) | (7,689 | ) | |||||||
| Net cash provided by (used in) financing activities | 1,790 | (14,970 | ) | (44,263 | ) | ||||||||
| Effect of exchange rates on cash | (101 | ) | (19 | ) | 58 | ||||||||
| Net increase in cash, cash equivalents and restricted cash | 1,655 | 35,133 | 7,053 | ||||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 84,324 | 98,894 | 77,271 | ||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 85,979 | $ | 134,027 | $ | 84,324 | |||||||
|
AMN Healthcare Services, Inc. |
|||
| Three Months Ended | |||
| June 30, 2019 | |||
|
Adjusted EBITDA margin (16) |
12.0% | ||
| Deduct: | |||
| Share-based compensation | 0.9% | ||
|
Acquisition, integration and other costs |
1.0% | ||
| EBITDA margin | 10.1% | ||
| Depreciation and amortization | 2.3% | ||
| Operating margin | 7.8% | ||
| (1) |
Operating margin represents income from operations divided by revenue. |
|
| (2) |
Segment operating income represents net income plus interest expense (net of interest income) and other, income tax expense, depreciation and amortization, unallocated corporate overhead, acquisition and integration costs, extraordinary legal expenses, legal settlement accrual increases and share-based compensation. |
|
| (3) |
Adjusted EBITDA represents net income plus interest expense (net of interest income) and other, income tax expense, depreciation and amortization, acquisition and integration costs, extraordinary legal expenses, legal settlement accrual increases and share-based compensation. Management believes that adjusted EBITDA provides an effective measure of the Company’s results, as it excludes certain items that management believes are not indicative of the Company’s operating performance and is a measure used in the Company’s credit agreement and the indenture governing our 5.125% Senior Notes due 2024. Adjusted EBITDA is not intended to represent cash flows for the period, nor has it been presented as an alternative to income from operations or net income as an indicator of operating performance. Although management believes that some of the items excluded from adjusted EBITDA are not indicative of the Company’s operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted EBITDA as an operating performance measure in conjunction with GAAP measures such as net income. |
|
| (4) | Adjusted EBITDA margin represents adjusted EBITDA divided by revenue. | |
| (5) |
Share-based compensation for the three months ended March 31, 2019 was impacted by two modifications and a new vesting condition that resulted in accelerated expense recognition. |
|
| (6) |
Acquisition, integration and other costs of $4,029,000 for the three months ended March 31, 2019 include $2,100,000 of extraordinary legal expenses and a decrease in contingent consideration liabilities for recently acquired companies of $700,000. Beginning in 2019, we exclude the impact of extraordinary legal expenses from the calculation of adjusted EBITDA because we believe that these expenses are not indicative of the Company’s operating performance. |
|
| (7) |
As a result of the adoption of a new accounting pronouncement on January 1, 2018, the Company measures equity investments, except those accounted for using the equity method of accounting, at fair value with changes in fair value recognized through net income. For the three months ended December 31, 2018, changes in fair value of equity investments recognized in interest expense, net, and other were $5,990,000. Since the changes in fair value are unrelated to the Company’s operating performance, we exclude their impact from the calculation of adjusted diluted EPS. |
|
| (8) |
During the first quarter of 2018, the Company recorded a net tax benefit of $2,501,000 to adjust for an immaterial out-of-period error identified in that quarter related to the income tax treatment of fair value changes in the cash surrender value of its company owned life insurance for years ended December 31, 2015 through December 31, 2017. These fair value changes had not previously been included as a benefit in the tax provision of the related years. |
|
| (9) |
The Company recorded a net tax benefit of $1,527,000 related to the income tax treatment of the fair value changes in the cash surrender value of its company owned life insurance for the three months ended March 31, 2019. Since this change in fair value is unrelated to the Company’s operating performance, we exclude the impact on adjusted diluted EPS. |
|
| (10) |
The consolidated effective tax rate for the three months ended March 31, 2019 was favorably affected by the recording of excess tax benefits relating to equity awards vested and exercised during the period. As a result of the adoption of a new accounting pronouncement on January 1, 2017, we no longer record excess tax benefits as an increase to additional paid-in capital, but record such excess tax benefits on a prospective basis as a reduction of income tax expense, which amounted to $4,569,000 and $4,518,000 for the three months ended March 31, 2019 and 2018, respectively. The magnitude of the impact of excess tax benefits generated in the future, which may be favorable or unfavorable, is dependent upon the Company’s future grants of share-based compensation, the Company’s future stock price on the date awards vest or exercise in relation to the fair value of the awards on the grant date or the exercise behavior of the Company’s stock appreciation rights holders. Since these favorable tax benefits are largely unrelated to our current year’s income before taxes and is unrepresentative of our normal effective tax rate, we exclude their impact on adjusted diluted EPS. |
|
| (11) |
Adjusted diluted EPS represents GAAP diluted EPS excluding the impact of the (A) amortization of intangible assets, (B) acquisition and integration costs, (C) extraordinary legal expenses, (D) legal settlement accrual increases, (E) changes in fair value of equity investments since January 1, 2018, (F) deferred financing costs, (G) tax effect, if any, of the foregoing adjustments, (H) excess tax benefits relating to equity awards vested and exercised since January 1, 2017, and (I) correction of prior periods error. Management included this non-GAAP measure to provide investors and prospective investors with an alternative method for assessing the Company’s operating results in a manner that is focused on its operating performance and to provide a more consistent basis for comparison between periods. However, investors and prospective investors should note that this non-GAAP measure involves judgment by management (in particular, judgment as to what is classified as a special item to be excluded from adjusted diluted EPS). Although management believes the items excluded from adjusted diluted EPS are not indicative of the Company’s operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted diluted EPS as an operating performance measure in conjunction with GAAP measures such as GAAP diluted EPS. |
|
| (12) |
Average healthcare professionals on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period presented. |
|
| (13) |
Days filled is calculated by dividing the locum tenens hours filled during the period by eight hours. |
|
| (14) |
Revenue per day filled represents revenue of the Company’s locum tenens solutions segment divided by days filled for the period presented. |
|
| (15) |
Leverage ratio represents the ratio of the consolidated funded indebtedness (as calculated per the Company’s credit agreement) at the end of the subject period to the consolidated adjusted EBITDA (as calculated per the Company’s credit agreement) for the twelve-month period ended at the end of the subject period. |
|
| (16) | Guidance percentage metrics are approximate. |
Contacts
Randle Reece
Director, Investor Relations
866.861.3229
