BOCA RATON, Fla.–(BUSINESS WIRE)–Cross Country Healthcare, Inc. (the “Company”) (Nasdaq: CCRN) today announced financial results for its third quarter ended September 30, 2019.
FINANCIAL HIGHLIGHTS:
|
Dollars are in thousands, except per share amounts |
Q3 2019 |
Variance |
Variance |
|||||||||
|
Revenue |
$ |
209,200 |
|
|
4 |
|
% |
3 |
|
% |
||
|
Gross profit margin* |
24.4 |
|
% |
(130 |
) |
bps |
(100 |
) |
bps |
|||
|
Net loss attributable to common shareholders |
$ |
(3,128 |
) |
|
(609 |
) |
% |
94 |
|
% |
||
|
Diluted EPS |
$ |
(0.09 |
) |
|
$ |
(0.08 |
) |
|
$ |
1.35 |
|
|
|
Adjusted EBITDA* |
$ |
7,251 |
|
|
(11 |
) |
% |
15 |
|
% |
||
|
Adjusted EPS* |
$ |
0.05 |
|
|
$ |
0.03 |
|
|
$ |
0.04 |
|
|
|
Cash flows used in operations |
$ |
(14,249 |
) |
|
(473 |
) |
% |
(215 |
) |
% |
||
* Refer to accompanying tables and discussion of Non-GAAP financial measures below.
“We were pleased to have exceeded our expectations on both revenue and adjusted EBITDA for the quarter,” said Kevin Clark, President and Chief Executive Officer. He added, “We have made steady progress in a short period of time since January, and our targeted investments are beginning to have the desired impact. The market remains strong and we are well positioned to improve profitability and drive continued growth, especially with the successful refinancing of our senior credit facility in late October.”
Third quarter consolidated revenue was $209.2 million, an increase of 4% year-over-year and 3% sequentially. Consolidated gross profit margin was 24.4%, down 130 basis points year-over-year and 100 basis points sequentially. Net loss attributable to common shareholders was $3.1 million compared to $0.4 million in the prior year and $51.7 million in the prior quarter. Diluted EPS was a loss of $0.09 per share compared to $0.01 per share in the prior year and $1.44 per share in the prior quarter. Adjusted EBITDA was $7.3 million or 3.5% of revenue, as compared with $8.1 million or 4.0% of revenue in the prior year, and $6.3 million or 3.1% of revenue in the prior quarter. Adjusted EPS was $0.05 compared with $0.02 in the prior year and $0.01 in the prior quarter.
For the nine months ended September 30, 2019, consolidated revenue was $607.1 million, a decrease of 1% year-over-year. Consolidated gross profit margin was 24.8%, down 100 basis points year-over-year. Net loss attributable to common shareholders was $56.6 million, or $1.58 per diluted share, compared to net income of $2.7 million, or $0.08 per diluted share, in the prior year. Adjusted EBITDA was $17.2 million or 2.8% of revenue, as compared with $25.2 million or 4.1% of revenue in the prior year. Adjusted EPS was $0.08 compared to $0.13 in the prior year.
Quarterly Business Segment Highlights
Nurse and Allied Staffing
Revenue from Nurse and Allied Staffing was $185.0 million, an increase of 5% year-over-year and 2% sequentially. Contribution income was $16.1 million, down from $16.5 million in the prior year and flat sequentially. Average field FTEs were 7,083 as compared with 6,953 in the prior year and 7,016 in the prior quarter. Revenue per FTE per day was $284 compared to $275 in the prior year and $283 in the prior quarter.
Physician Staffing
Revenue from Physician Staffing was $20.4 million, a decrease of 4% year-over-year and an increase of 13% sequentially. Contribution income was $0.8 million, down from $1.3 million in the prior year, and an increase compared to $0.5 million in the prior quarter. Total days filled were 11,675 as compared with 13,375 in the prior year and 10,754 in the prior quarter. Revenue per day filled was $1,748 as compared with $1,582 in the prior year and $1,676 in the prior quarter.
Search
Revenue from Search was $3.8 million, an increase of 6% year-over-year and a decrease of 3% sequentially. Contribution income was $0.1 million, flat compared to the prior year, and an increase compared to a loss of $0.2 million in the prior quarter.
Cash Flow and Balance Sheet Highlights
Cash flow used in operations for the quarter was $14.2 million, compared to cash flow generated from operations of $3.8 million in the prior year, with the principal driver being a 7 day sequential increase in days’ sales outstanding. For the nine months ended September 30, 2019, cash flow from operations was $10.9 million, compared to $21.8 million in the prior year.
As of September 30, 2019, the Company had $9.5 million in cash and cash equivalents and $71.4 million outstanding under its prior senior credit facility. As previously announced, the Company’s senior credit facility was replaced by a new $120.0 million senior secured asset-based credit facility (ABL). The ABL provides for a five-year revolving credit facility, including a sublimit for swing loans up to $15.0 million and a $35.0 million sublimit for standby letters of credit. Availability under the ABL is subject to a borrowing base, which was $119.3 million at closing.
Outlook for Fourth Quarter 2019
The guidance below applies only to management’s expectations for the fourth quarter of 2019.
|
|
Q4 2019 Range |
|
Year-over-Year |
|
Sequential |
|
|
Change |
|
Change |
||||
|
|
|
|
|
|
|
|
|
Revenue |
$205 million – $210 million |
|
2% – 5% |
|
(2)% – 0% |
|
|
|
|
|
|
|
|
|
|
Gross profit margin |
24.3% – 24.8% |
|
(90) – (40) bps |
|
(10) – 40 bps |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$6.7 million – $7.7 million |
|
9% – 25% |
|
(8)% – 6% |
|
|
|
|
|
|
|
|
|
|
Adjusted EPS |
$0.05 – $0.07 |
|
$0.05 – $0.07 |
|
$0.00 – $0.02 |
The estimates above are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions or other business combinations, any changes in debt structure, or any future share repurchases. The guidance also reflects the impacts from certain cost actions the Company has identified and actual results may differ depending on timing and further actions it may take. See accompanying Non-GAAP financial measures and tables below.
INVITATION TO CONFERENCE CALL
The Company will hold its quarterly conference call on Tuesday, November 5, 2019, at 5:00 P.M. Eastern Time to discuss its third quarter 2019 financial results. This call will be webcast live and can be accessed at the Company’s website at www.crosscountryhealthcare.com or by dialing 888-566-1099 from anywhere in the U.S. or by dialing 773-799-3716 from non-U.S. locations – Passcode: Cross Country. A replay of the webcast will be available from November 5th through November 19th at the Company’s website and a replay of the conference call will be available by telephone by calling 800-839-5574 from anywhere in the U.S. or 203-369-3669 from non-U.S. locations – Passcode: 2019.
ABOUT CROSS COUNTRY HEALTHCARE
Cross Country Healthcare is a national leader in providing innovative healthcare workforce solutions and staffing services. Our solutions leverage our more than 30 years of expertise and insight to assist clients in solving complex labor-related challenges while maintaining high quality outcomes. We are dedicated to recruiting and placing highly qualified healthcare professionals in virtually every specialty and area of expertise. Our diverse client base includes both clinical and nonclinical settings, servicing acute care hospitals, physician practice groups, outpatient and ambulatory-care centers, nursing facilities, both public schools and charter schools, rehabilitation and sports medicine clinics, government facilities, and homecare. Through our national staffing teams and network of 65 office locations, we are able to place clinicians on travel and per diem assignments, local short-term contracts and permanent positions. We are a market leader in providing flexible workforce management solutions, which include managed service programs (MSP), internal resource pool consulting and development, electronic medical record (EMR) transition staffing, recruitment process outsourcing, and other outsourcing and consultative services. In addition, we provide both retained and contingent placement services for healthcare executives, physicians, and other healthcare professionals.
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 to automatically receive the Company’s press releases, SEC filings and other notices by e-mail.
NON-GAAP 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 they exclude certain items that management believes are not indicative of the Company’s future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned.]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.
FORWARD LOOKING STATEMENT
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 are 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, but are not limited to, 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 healthcare professionals, 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 cyber security risks and cyber incidents on our business, 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 our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, 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, 2018, and our other Securities and Exchange Commission filings made prior to the date hereof.
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 Cross Country Healthcare, Inc. and its subsidiaries.
|
Cross Country Healthcare, Inc. |
|||||||||||||||||||||||
|
Consolidated Statements of Operations |
|||||||||||||||||||||||
|
(Unaudited, amounts in thousands, except per share data) |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|||||||||||||||||||
|
|
September 30, |
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
September 30, |
|||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
2018 |
|||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||
|
Revenue from services |
$ |
209,200 |
|
|
|
$ |
200,717 |
|
|
|
$ |
202,757 |
|
|
|
$ |
607,128 |
|
|
$ |
615,577 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Direct operating expenses |
158,194 |
|
|
|
149,155 |
|
|
|
151,169 |
|
|
|
456,280 |
|
|
456,573 |
|
||||||
|
Selling, general and administrative expenses |
44,407 |
|
|
|
44,086 |
|
|
|
45,944 |
|
|
|
136,387 |
|
|
135,004 |
|
||||||
|
Bad debt expense |
588 |
|
|
|
502 |
|
|
|
645 |
|
|
|
1,503 |
|
|
1,312 |
|
||||||
|
Depreciation and amortization |
2,907 |
|
|
|
2,892 |
|
|
|
3,557 |
|
|
|
9,448 |
|
|
8,764 |
|
||||||
|
Acquisition-related contingent consideration (a) |
(426 |
) |
|
|
16 |
|
|
|
253 |
|
|
|
74 |
|
|
449 |
|
||||||
|
Acquisition and integration costs (b) |
— |
|
|
|
70 |
|
|
|
46 |
|
|
|
311 |
|
|
261 |
|
||||||
|
Restructuring costs (c) |
1,607 |
|
|
|
1,351 |
|
|
|
137 |
|
|
|
2,884 |
|
|
1,979 |
|
||||||
|
Legal settlement charges (d) |
— |
|
|
|
— |
|
|
|
1,600 |
|
|
|
1,600 |
|
|
— |
|
||||||
|
Impairment charges (e) |
1,804 |
|
|
|
— |
|
|
|
14,502 |
|
|
|
16,306 |
|
|
— |
|
||||||
|
Total operating expenses |
209,081 |
|
|
|
198,072 |
|
|
|
217,853 |
|
|
|
624,793 |
|
|
604,342 |
|
||||||
|
Income (loss) from operations |
119 |
|
|
|
2,645 |
|
|
|
(15,096 |
) |
|
|
(17,665 |
) |
|
11,235 |
|
||||||
|
Other expenses (income): |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Interest expense |
1,398 |
|
|
|
1,512 |
|
|
|
1,438 |
|
|
|
4,258 |
|
|
4,225 |
|
||||||
|
Loss on derivative (f) |
1,284 |
|
|
|
— |
|
|
|
— |
|
|
|
1,284 |
|
|
— |
|
||||||
|
Loss on early extinguishment of debt (g) |
94 |
|
|
|
36 |
|
|
|
54 |
|
|
|
508 |
|
|
36 |
|
||||||
|
Other income, net |
(54 |
) |
|
|
(170 |
) |
|
|
(76 |
) |
|
|
(212 |
) |
|
(369 |
) |
||||||
|
(Loss) income before income taxes |
(2,603 |
) |
|
|
1,267 |
|
|
|
(16,512 |
) |
|
|
(23,503 |
) |
|
7,343 |
|
||||||
|
Income tax expense (h) |
94 |
|
|
|
1,385 |
|
|
|
34,758 |
|
|
|
31,840 |
|
|
3,717 |
|
||||||
|
Consolidated net (loss) income |
(2,697 |
) |
|
|
(118 |
) |
|
|
(51,270 |
) |
|
|
(55,343 |
) |
|
3,626 |
|
||||||
|
Less: Net income attributable to noncontrolling interest in subsidiary |
431 |
|
|
|
323 |
|
|
|
404 |
|
|
|
1,226 |
|
|
886 |
|
||||||
|
Net (loss) income attributable to common shareholders |
$ |
(3,128 |
) |
|
|
$ |
(441 |
) |
|
|
$ |
(51,674 |
) |
|
|
$ |
(56,569 |
) |
|
$ |
2,740 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net (loss) income per share attributable to common shareholders – Basic |
$ |
(0.09 |
) |
|
|
$ |
(0.01 |
) |
|
|
$ |
(1.44 |
) |
|
|
$ |
(1.58 |
) |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net (loss) income per share attributable to common shareholders – Diluted |
$ |
(0.09 |
) |
|
|
$ |
(0.01 |
) |
|
|
$ |
(1.44 |
) |
|
|
$ |
(1.58 |
) |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Basic |
35,865 |
|
|
|
35,594 |
|
|
|
35,824 |
|
|
|
35,797 |
|
|
35,682 |
|
||||||
|
Diluted (i) |
35,865 |
|
|
|
35,594 |
|
|
|
35,824 |
|
|
|
35,797 |
|
|
35,881 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Cross Country Healthcare, Inc. |
|||||||||||||||||||||||
|
Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||||||||||
|
(Unaudited, amounts in thousands, except per share data) |
|||||||||||||||||||||||
|
|
|||||||||||||||||||||||
|
|
Three Months Ended |
|
|
Nine Months Ended |
|||||||||||||||||||
|
|
September 30, |
|
|
September 30, |
|
|
June 30, |
|
|
September 30, |
|
September 30, |
|||||||||||
|
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2019 |
|
2018 |
|||||||||||
|
Adjusted EBITDA: (j) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net (loss) income attributable to common shareholders |
$ |
(3,128 |
) |
|
|
$ |
(441 |
) |
|
|
$ |
(51,674 |
) |
|
|
$ |
(56,569 |
) |
|
$ |
2,740 |
|
|
|
Interest expense |
1,398 |
|
|
|
1,512 |
|
|
|
1,438 |
|
|
|
4,258 |
|
|
4,225 |
|
||||||
|
Income tax expense (h) |
94 |
|
|
|
1,385 |
|
|
|
34,758 |
|
|
|
31,840 |
|
|
3,717 |
|
||||||
|
Depreciation and amortization |
2,907 |
|
|
|
2,892 |
|
|
|
3,557 |
|
|
|
9,448 |
|
|
8,764 |
|
||||||
|
Acquisition-related contingent consideration (a) |
(426 |
) |
|
|
16 |
|
|
|
253 |
|
|
|
74 |
|
|
449 |
|
||||||
|
Acquisition and integration costs (b) |
— |
|
|
|
70 |
|
|
|
46 |
|
|
|
311 |
|
|
261 |
|
||||||
|
Restructuring costs (c) |
1,607 |
|
|
|
1,351 |
|
|
|
137 |
|
|
|
2,884 |
|
|
1,979 |
|
||||||
|
Legal settlement charges (d) |
— |
|
|
|
— |
|
|
|
1,600 |
|
|
|
1,600 |
|
|
— |
|
||||||
|
Impairment charges (e) |
1,804 |
|
|
|
— |
|
|
|
14,502 |
|
|
|
16,306 |
|
|
— |
|
||||||
|
Loss on derivative (f) |
1,284 |
|
|
|
— |
|
|
|
— |
|
|
|
1,284 |
|
|
— |
|
||||||
|
Loss on early extinguishment of debt (g) |
94 |
|
|
|
36 |
|
|
|
54 |
|
|
|
508 |
|
|
36 |
|
||||||
|
Other income, net |
(54 |
) |
|
|
(170 |
) |
|
|
(76 |
) |
|
|
(212 |
) |
|
(369 |
) |
||||||
|
Equity compensation |
982 |
|
|
|
981 |
|
|
|
1,004 |
|
|
|
2,517 |
|
|
2,364 |
|
||||||
|
Applicant tracking system costs (k) |
258 |
|
|
|
157 |
|
|
|
315 |
|
|
|
1,707 |
|
|
157 |
|
||||||
|
Net income attributable to noncontrolling interest in subsidiary |
431 |
|
|
|
323 |
|
|
|
404 |
|
|
|
1,226 |
|
|
886 |
|
||||||
|
Adjusted EBITDA (j) |
$ |
7,251 |
|
|
|
$ |
8,112 |
|
|
|
$ |
6,318 |
|
|
|
$ |
17,182 |
|
|
$ |
25,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Adjusted EPS: (l) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Net (loss) income attributable to common shareholders |
$ |
(3,128 |
) |
|
|
$ |
(441 |
) |
|
|
$ |
(51,674 |
) |
|
|
$ |
(56,569 |
) |
|
$ |
2,740 |
|
|
|
Non-GAAP adjustments – pretax: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Acquisition-related contingent consideration (a) |
(426 |
) |
|
|
16 |
|
|
|
253 |
|
|
|
74 |
|
|
449 |
|
||||||
|
Acquisition and integration costs (b) |
— |
|
|
|
70 |
|
|
|
46 |
|
|
|
311 |
|
|
261 |
|
||||||
|
Restructuring costs (c) |
1,607 |
|
|
|
1,351 |
|
|
|
137 |
|
|
|
2,884 |
|
|
1,979 |
|
||||||
|
Legal settlement charges (d) |
— |
|
|
|
— |
|
|
|
1,600 |
|
|
|
1,600 |
|
|
— |
|
||||||
|
Impairment charges (e) |
1,804 |
|
|
|
— |
|
|
|
— |
|
|
|
1,804 |
|
|
— |
|
||||||
|
Rebranding impacts (e) |
295 |
|
|
|
— |
|
|
|
15,106 |
|
|
|
15,401 |
|
|
— |
|
||||||
|
Loss on derivative (f) |
1,284 |
|
|
|
— |
|
|
|
— |
|
|
|
1,284 |
|
|
— |
|
||||||
|
Loss on early extinguishment of debt (g) |
94 |
|
|
|
36 |
|
|
|
54 |
|
|
|
508 |
|
|
36 |
|
||||||
|
Applicant tracking system costs (k) |
258 |
|
|
|
157 |
|
|
|
315 |
|
|
|
1,707 |
|
|
157 |
|
||||||
|
Nonrecurring income tax adjustments |
— |
|
|
|
— |
|
|
|
35,675 |
|
|
|
35,675 |
|
|
(47 |
) |
||||||
|
Tax impact of non-GAAP adjustments |
(59 |
) |
|
|
(652 |
) |
|
|
(1,151 |
) |
|
|
(2,044 |
) |
|
(1,119 |
) |
||||||
|
Adjusted net income attributable to common shareholders – non-GAAP |
$ |
1,729 |
|
|
|
$ |
537 |
|
|
|
$ |
361 |
|
|
|
$ |
2,635 |
|
|
$ |
4,456 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Weighted average common shares – basic, GAAP |
35,865 |
|
|
|
35,594 |
|
|
|
35,824 |
|
|
|
35,797 |
|
|
35,682 |
|
||||||
|
Dilutive impact of share-based payments |
318 |
|
|
|
131 |
|
|
|
117 |
|
|
|
177 |
|
|
199 |
|
||||||
|
Adjusted weighted average common shares – diluted, non-GAAP |
36,183 |
|
|
|
35,725 |
|
|
|
35,941 |
|
|
|
35,974 |
|
|
35,881 |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Reconciliation: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Diluted EPS, GAAP |
$ |
(0.09 |
) |
|
|
$ |
(0.01 |
) |
|
|
$ |
(1.44 |
) |
|
|
$ |
(1.58 |
) |
|
$ |
0.08 |
|
|
|
Non-GAAP adjustments – pretax: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
Acquisition-related contingent consideration (a) |
(0.02 |
) |
|
|
— |
|
|
|
0.01 |
|
|
|
— |
|
|
0.01 |
|
||||||
|
Acquisition and integration costs (b) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
0.01 |
|
||||||
|
Restructuring costs (c) |
0.05 |
|
|
|
0.04 |
|
|
|
— |
|
|
|
0.08 |
|
|
0.05 |
|
||||||
|
Legal settlement charges (d) |
— |
|
|
|
— |
|
|
|
0.05 |
|
|
|
0.05 |
|
|
— |
|
||||||
|
Impairment charges (e) |
0.05 |
|
|
|
— |
|
|
|
— |
|
|
|
0.05 |
|
|
— |
|
||||||
|
Rebranding impacts (e) |
0.01 |
|
|
|
— |
|
|
|
0.42 |
|
|
|
0.43 |
|
|
— |
|
||||||
|
Loss on derivative (f) |
0.04 |
|
|
|
— |
|
|
|
— |
|
|
|
0.04 |
|
|
— |
|
||||||
|
Loss on early extinguishment of debt (g) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
0.01 |
|
|
— |
|
||||||
|
Applicant tracking system costs (k) |
0.01 |
|
|
|
0.01 |
|
|
|
0.01 |
|
|
|
0.05 |
|
|
0.01 |
|
||||||
|
Nonrecurring income tax adjustments |
— |
|
|
|
— |
|
|
|
0.99 |
|
|
|
0.99 |
|
|
— |
|
||||||
|
Tax impact of non-GAAP adjustments |
— |
|
|
|
(0.02 |
) |
|
|
(0.03 |
) |
|
|
(0.05 |
) |
|
(0.03 |
) |
||||||
|
Adjusted EPS, non-GAAP (l) |
$ |
0.05 |
|
|
|
$ |
0.02 |
|
|
|
$ |
0.01 |
|
|
|
$ |
0.08 |
|
|
$ |
0.13 |
|
|
|
Cross Country Healthcare, Inc. |
|||||||||
|
Consolidated Balance Sheets |
|||||||||
|
(Unaudited, amounts in thousands) |
|||||||||
|
|
|||||||||
|
|
September 30, |
|
|
December 31, |
|||||
|
|
2019 |
|
|
2018 |
|||||
|
|
|
|
|
|
|||||
|
Assets |
|
|
|
|
|||||
|
Current assets: |
|
|
|
|
|||||
|
Cash and cash equivalents |
$ |
9,458 |
|
|
|
$ |
16,019 |
|
|
|
Accounts receivable, net |
170,339 |
|
|
|
166,128 |
|
|||
|
Prepaid expenses |
3,764 |
|
|
|
6,208 |
|
|||
|
Insurance recovery receivable |
4,631 |
|
|
|
4,186 |
|
|||
|
Other current assets |
1,496 |
|
|
|
2,364 |
|
|||
|
Total current assets |
189,688 |
|
|
|
194,905 |
|
|||
|
Property and equipment, net |
11,953 |
|
|
|
13,628 |
|
|||
|
Operating lease right-of-use assets |
17,796 |
|
|
|
— |
|
|||
|
Goodwill |
101,066 |
|
|
|
101,060 |
|
|||
|
Trade names, indefinite-lived |
5,900 |
|
|
|
20,402 |
|
|||
|
Other intangible assets, net |
48,725 |
|
|
|
55,182 |
|
|||
|
Non-current deferred tax assets |
— |
|
|
|
23,750 |
|
|||
|
Other non-current assets |
18,863 |
|
|
|
18,076 |
|
|||
|
Total assets |
$ |
393,991 |
|
|
|
$ |
427,003 |
|
|
|
|
|
|
|
|
|||||
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|||||
|
Current liabilities: |
|
|
|
|
|||||
|
Accounts payable and accrued expenses |
$ |
50,291 |
|
|
|
$ |
43,744 |
|
|
|
Accrued employee compensation and benefits |
34,683 |
|
|
|
33,332 |
|
|||
|
Current portion of long-term debt |
— |
|
|
|
5,235 |
|
|||
|
Operating lease liabilities – current |
4,936 |
|
|
|
— |
|
|||
|
Other current liabilities |
3,578 |
|
|
|
3,075 |
|
|||
|
Total current liabilities |
93,488 |
|
|
|
85,386 |
|
|||
|
Long-term debt, less current portion |
70,556 |
|
|
|
77,944 |
|
|||
|
Operating lease liabilities – non-current |
20,112 |
|
|
|
— |
|
|||
|
Non-current deferred tax liabilities |
7,824 |
|
|
|
95 |
|
|||
|
Long-term accrued claims |
29,616 |
|
|
|
29,299 |
|
|||
|
Other long-term liabilities |
8,748 |
|
|
|
16,081 |
|
|||
|
Total liabilities |
230,344 |
|
|
|
208,805 |
|
|||
|
|
|
|
|
|
|||||
|
Commitments and contingencies |
|
|
|
|
|||||
|
|
|
|
|
|
|||||
|
Stockholders’ equity: |
|
|
|
|
|||||
|
Common stock |
4 |
|
|
|
4 |
|
|||
|
Additional paid-in capital |
304,764 |
|
|
|
303,048 |
|
|||
|
Accumulated other comprehensive loss |
(1,244 |
) |
|
|
(1,462 |
) |
|||
|
Accumulated deficit |
(140,631 |
) |
|
|
(84,062 |
) |
|||
|
Total Cross Country Healthcare, Inc. stockholders’ equity |
162,893 |
|
|
|
217,528 |
|
|||
|
Noncontrolling interest in subsidiary |
754 |
|
|
|
670 |
|
|||
|
Total stockholders’ equity |
163,647 |
|
|
|
218,198 |
|
|||
|
Total liabilities and stockholders’ equity |
$ |
393,991 |
|
|
|
$ |
427,003 |
|
|
|
Cross Country Healthcare, Inc. |
|||||||||||||||||||||||||
|
Segment Data (m) |
|||||||||||||||||||||||||
|
(Unaudited, amounts in thousands) |
|||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||
|
|
Three Months Ended |
|
Year-over-Year |
|
Sequential |
||||||||||||||||||||
|
|
September 30, |
% of |
|
September 30, |
% of |
|
June 30, |
% of |
|
% change |
|
% change |
|||||||||||||
|
|
2019 |
Total |
|
2018 |
Total |
|
2019 |
Total |
|
Fav (Unfav) |
|
Fav (Unfav) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenue from services: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Nurse and Allied Staffing |
$ |
184,974 |
|
88 |
% |
|
$ |
175,945 |
|
88 |
% |
|
$ |
180,787 |
|
89 |
% |
|
5% |
|
2% |
||||
|
Physician Staffing |
20,407 |
|
10 |
% |
|
21,158 |
|
10 |
% |
|
18,028 |
|
9 |
% |
|
(4)% |
|
13% |
|||||||
|
Search |
3,819 |
|
2 |
% |
|
3,614 |
|
2 |
% |
|
3,942 |
|
2 |
% |
|
6% |
|
(3)% |
|||||||
|
|
$ |
209,200 |
|
100 |
% |
|
$ |
200,717 |
|
100 |
% |
|
$ |
202,757 |
|
100 |
% |
|
4% |
|
3% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Contribution income (loss): (n) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Nurse and Allied Staffing |
$ |
16,097 |
|
|
|
$ |
16,507 |
|
|
|
$ |
16,111 |
|
|
|
(2)% |
|
—% |
|||||||
|
Physician Staffing |
811 |
|
|
|
1,307 |
|
|
|
508 |
|
|
|
(38)% |
|
60% |
||||||||||
|
Search |
78 |
|
|
|
97 |
|
|
|
(181 |
) |
|
|
(20)% |
|
143% |
||||||||||
|
|
16,986 |
|
|
|
17,911 |
|
|
|
16,438 |
|
|
|
(5)% |
|
3% |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate overhead (o) |
10,975 |
|
|
|
10,937 |
|
|
|
11,439 |
|
|
|
—% |
|
4% |
||||||||||
|
Depreciation and amortization |
2,907 |
|
|
|
2,892 |
|
|
|
3,557 |
|
|
|
(1)% |
|
18% |
||||||||||
|
Acquisition-related contingent consideration (a) |
(426 |
) |
|
|
16 |
|
|
|
253 |
|
|
|
NM |
|
268% |
||||||||||
|
Acquisition and integration costs (b) |
— |
|
|
|
70 |
|
|
|
46 |
|
|
|
100% |
|
100% |
||||||||||
|
Restructuring costs (c) |
1,607 |
|
|
|
1,351 |
|
|
|
137 |
|
|
|
(19)% |
|
NM |
||||||||||
|
Legal settlement charges (d) |
— |
|
|
|
— |
|
|
|
1,600 |
|
|
|
—% |
|
100% |
||||||||||
|
Impairment charges (e) |
1,804 |
|
|
|
— |
|
|
|
14,502 |
|
|
|
(100)% |
|
88% |
||||||||||
|
Income (loss) from operations |
$ |
119 |
|
|
|
$ |
2,645 |
|
|
|
$ |
(15,096 |
) |
|
|
(96)% |
|
101% |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
Nine Months Ended |
|
|
|
Year-over-Year |
|
|
||||||||||||||||||
|
|
September 30, |
% of |
|
September 30, |
% of |
|
|
|
% change |
|
|
||||||||||||||
|
|
2019 |
Total |
|
2018 |
Total |
|
|
Fav (Unfav) |
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Revenue from services: |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Nurse and Allied Staffing |
$ |
541,398 |
|
89 |
% |
|
$ |
539,488 |
|
88 |
% |
|
|
|
|
—% |
|
|
|||||||
|
Physician Staffing |
54,594 |
|
9 |
% |
|
64,052 |
|
10 |
% |
|
|
|
|
(15)% |
|
|
|||||||||
|
Search |
11,136 |
|
2 |
% |
|
12,037 |
|
2 |
% |
|
|
|
|
(7)% |
|
|
|||||||||
|
|
$ |
607,128 |
|
100 |
% |
|
$ |
615,577 |
|
100 |
% |
|
|
|
|
(1)% |
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Contribution income (loss): (n) |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Nurse and Allied Staffing |
$ |
46,504 |
|
|
|
$ |
50,064 |
|
|
|
|
|
|
(7)% |
|
|
|||||||||
|
Physician Staffing |
1,724 |
|
|
|
4,190 |
|
|
|
|
|
|
(59)% |
|
|
|||||||||||
|
Search |
(526 |
) |
|
|
833 |
|
|
|
|
|
|
(163)% |
|
|
|||||||||||
|
|
47,702 |
|
|
|
55,087 |
|
|
|
|
|
|
(13)% |
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
Corporate overhead (o) |
34,744 |
|
|
|
32,399 |
|
|
|
|
|
|
(7)% |
|
|
|||||||||||
|
Depreciation and amortization |
9,448 |
|
|
|
8,764 |
|
|
|
|
|
|
(8)% |
|
|
|||||||||||
|
Acquisition-related contingent consideration (a) |
74 |
|
|
|
449 |
|
|
|
|
|
|
84% |
|
|
|||||||||||
|
Acquisition and integration costs (b) |
311 |
|
|
|
261 |
|
|
|
|
|
|
(19)% |
|
|
|||||||||||
|
Restructuring costs (c) |
2,884 |
|
|
|
1,979 |
|
|
|
|
|
|
(46)% |
|
|
|||||||||||
|
Legal settlement charges (d) |
1,600 |
|
|
|
— |
|
|
|
|
|
|
(100)% |
|
|
|||||||||||
|
Impairment charges (e) |
16,306 |
|
|
|
— |
|
|
|
|
|
|
(100)% |
|
|
|||||||||||
|
(Loss) income from operations |
$ |
(17,665 |
) |
|
|
$ |
11,235 |
|
|
|
|
|
|
(257)% |
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
NM-Not meaningful. |
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Contacts
Cross Country Healthcare, Inc.
William J. Burns, 561-237-2555
Executive Vice President and Chief Financial Officer
[email protected]
