Cross Country Healthcare, Inc. (Nasdaq:CCRN) today reported revenue
of $178.1 million in the third quarter ended September 30, 2008, a
4% decrease from revenue of $185.1 million in the prior year
quarter. Net income for the third quarter of 2008 was $6.2 million,
or $0.20 per diluted share, compared to net income of $7.0 million,
or $0.22 per diluted share in the prior year quarter. Cash flow
from operations for the third quarter of 2008 was $13.8 million.
For the nine months ended September 30, 2008, the Company generated
revenue of $528.3 million and net income of $18.4 million, or $0.59
per diluted share. This compares to revenue of $536.6 million and
net income of $17.3 million, or $0.53 per diluted share, in the
first nine months of the prior year. Cash flow from operations for
the first nine months of 2008 was $40.9 million. "While we
generated strong cash flow, improved our gross profit margin and
further diversified our revenue mix with the acquisition of the
locum tenens (temporary physician staffing) business of MDA
Holdings, Inc. (MDA) during the third quarter, the overall
environment in which we operate deteriorated significantly," said
Joseph A. Boshart, President and Chief Executive Officer of Cross
Country Healthcare. "Demand, booking activity and volume in our
travel nurse staffing business weakened, in large part, due to
hospital clients being increasingly reluctant to commit to a
contract nurse most often citing low patient census and budget
reductions for their hesitation. Our other businesses also
experienced similar reluctance on the part of clients to commit.
Nonetheless, our newly acquired temporary physician staffing
business continued its year-over-year growth due to greater demand
for physicians as they are revenue generators for hospitals and
physician practice groups," Mr. Boshart said. "Although our
near-term expectations are disappointing to me, and I'm sure to our
shareholders, Cross Country Healthcare remains on very sound
financial footing with a prudent level of debt and cash flow well
in excess of what is required to operate our business on a
day-to-day basis. Given the general tone and uncertainty of the
economy, including a further weakening of labor markets, our
operations teams will be focused on continuing to provide a
high-level of service to our healthcare facility customers and the
healthcare professionals that look to us for assignment
opportunities. Meanwhile, our management team will be focused on
fundamentals such as cost control and continuing to de-lever our
balance sheet using our strong cash flow. I would like to add that
over our history, we have managed through several industry
down-turns - and we have always generated positive quarterly
earnings. Moreover, consistent with our strategy that we have
communicated for the past several quarters, with the MDA
acquisition we successfully diversified into a sector of our
industry that has shown consistent growth over the past decade,"
added Mr. Boshart. Nurse and Allied Staffing For the third quarter
of 2008, the nurse and allied staffing business segment (travel and
per diem nurse and travel allied staffing) generated revenue of
$128.9 million, a 12% decline from the prior year quarter. The
decrease reflected a 13% decline in staffing volume from the prior
year quarter that was partially offset by a 2.4% year-over-year
increase in the travel nurse staffing hourly bill rate.
Contribution income (defined as income from operations before
depreciation, amortization and corporate expenses not specifically
identified to a reporting segment) was relatively flat at $14.3
million in the third quarters of both 2008 and 2007. For the third
quarter of 2008, the Company experienced continued expansion of the
bill-pay spread and favorable insurance expenses. However, these
improvements were essentially offset by the impact of lower
staffing volume. For the first nine months of 2008, segment revenue
decreased 7% to $402.2 million from $433.5 million in the same
period a year ago, while contribution income increased 4% to $41.1
million from $39.4 million in the prior year period. Physician
Staffing For the third quarter of 2008, physician staffing
generated revenue of $10.8 million and $0.9 million in contribution
income since the Company's acquisition of MDA on September 9, 2008.
Pro-forma for the current quarter, physician staffing days filled
increased 4% from the prior year quarter to 28,190 and revenue per
day filled increased 8% to $1,584. Physician staffing days filled
is derived by dividing the physician staffing hours filled during
the respective period by 8 hours. Revenue per day filled represents
segment revenue divided by the number of days filled for the
respective period. Clinical Trials Services For the third quarter
of 2008, the clinical trials services segment generated revenue of
$25.4 million, a decrease of 3% from the prior year quarter due
primarily to a decline in the drug safety business from the prior
year quarter related to a specific client. Contribution income
decreased 26% in the third quarter of 2008 to $3.8 million from the
same quarter of 2007 primarily due to a reduction in contribution
from the drug safety business. For the first nine months of 2008,
segment revenue increased 15% to $75.2 million from $65.4 million
in the same period a year ago, while contribution income increased
13% to $11.9 million from $10.6 million in the prior year period.
Other Human Capital Management Services For the third quarter of
2008, the other human capital management services business segment
(education and training and retained search) generated revenue of
$13.0 million, a 2% decrease from the same quarter in the prior
year, reflecting lower revenue generated by the education and
training business that was partially offset by higher revenue in
the retained search business. Segment contribution income decreased
3% to $1.6 million in the third quarter of 2008 from the prior year
quarter, reflecting a decline in contribution from the retained
search business that was mostly offset by an increase in
contribution from the education and training business. For the
first nine months of 2008, segment revenue increased 7% to $40.1
million from $37.6 million in the same period a year ago, while
contribution income increased 6% to $6.1 million from $5.7 million
in the prior year period. Debt Repayments/Borrowings In conjunction
with the MDA acquisition, the Company entered into an amended and
restated $200.0 million syndicated credit facility with Wachovia
Capital Markets, LLC and certain of its affiliates, Banc of America
Securities, LLC, and certain other lenders. Pursuant to this
financing, the Company amended and kept in place its existing $75.0
million revolving credit facility and entered into a new $125.0
million 5-year term loan, from which the proceeds were used to
finance the acquisition and to pay-down approximately $6.8 million
of debt outstanding on the revolving credit facility. During the
third quarter of 2008, the Company repaid a net of $15.0 million of
borrowings under its revolving credit facility. At September 30,
2008, the Company had $144.4 million of total debt on its balance
sheet and a debt, net of unrestricted cash, to total capitalization
ratio of 24%. Stock Repurchase Program Update Cross Country
Healthcare refrained from repurchasing its common stock during the
third quarter of 2008 due to the timing of negotiations and
subsequent completion of the MDA acquisition. As of September 30,
2008, the Company can repurchase up to 1,441,139 shares of its
common stock under the current authorization approved in February
2008. Under this authorization, the shares may be repurchased from
time-to-time in the open market subject to the terms of the
Company's credit agreement. Such repurchases may be discontinued at
any time at the discretion of the Company. Pursuant to the terms of
the Company's credit agreement, as long as its debt leverage ratio
(as defined in the Company's credit agreement) is above 2 to 1 the
Company cannot repurchase shares. As of the end of the third
quarter, the Company's debt leverage ratio was approximately 2.15
to 1. At September 30, 2008, the Company had approximately 30.8
million shares outstanding. Guidance for Fourth Quarter 2008 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 and other business combinations,
any impairment charges, any significant legal proceedings or any
significant repurchases of our common stock. The Company expects
revenue in the fourth quarter of 2008 to be in the $195 million to
$199 million range and earnings per diluted share to be in the
range of $0.15 to $0.17. For the full-year, the Company expects
2008 revenue to be in the $723 million to $727 million range and
earnings per diluted share to be in the range of $0.74 to $0.76.
Quarterly Conference Call Cross Country Healthcare will hold a
conference call on Monday, November 3rd at 10:00 a.m. Eastern Time
to discuss its third quarter 2008 financial results. This call will
be webcast live by CCBN/Thomson and may be accessed at the
Company's web site at www.crosscountryhealthcare.com or by dialing
877-917-1549 from anywhere in the U.S. or by dialing 312-470-7109
from non-U.S. locations - Passcode: Cross Country. A replay of the
webcast will be available through November 17th. A replay of the
conference call will be available by telephone from approximately
noon on November 3rd until November 17th by calling 800-756-0131
from anywhere in the U.S. or 203-369-3001 from non-U.S. locations.
About Cross Country Healthcare Cross Country Healthcare, Inc. is a
leading provider of nurse and allied staffing services in the
United States, a national provider of multi-specialty locum tenens
(temporary physician staffing) services, a provider of clinical
trials services to global pharmaceutical and biotechnology
customers, as well as a provider of other human capital management
services focused on healthcare. The Company has approximately 5,000
contracts with hospitals, healthcare providers, pharmaceutical and
biotechnology customers, and other healthcare organizations. Copies
of this and other news releases as well as additional information
about Cross Country Healthcare can be obtained online at
www.crosscountryhealthcare.com. Shareholders and prospective
investors can also register at the corporate website to
automatically receive the Company's press releases, SEC filings and
other notices by e-mail. 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", "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, 2007, and our other Securities and Exchange Commission filings
made during 2008. 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., its
subsidiaries and affiliates. -0- *T Cross Country Healthcare, Inc.
Consolidated Statements of Income (Unaudited, amounts in thousands,
except per share data) Three Months Ended Nine Months Ended
September 30, September 30, ------------------ ------------------ %
% 2008 2007 Change 2008 2007 Change --------- -------- ------
--------- -------- ------ Revenue from services $178,134 $185,124
(4%) $528,336 536,556 (2%) Operating expenses: Direct operating
expenses 130,696 139,266 (6%) 390,081 408,606 (5%) Selling, general
and administrative expenses 33,475 31,486 6% 97,763 90,927 8% Bad
debt expense 203 - ND 687 1,265 (46%) Depreciation 1,789 1,370 31%
5,352 4,359 23% Amortization 713 622 15% 2,029 1,361 49% Legal
settlement charge - - - - 34 ND --------- -------- ---------
-------- Total operating expenses 166,876 172,744 (3%) 495,912
506,552 (2%) --------- -------- --------- -------- Income from
operations 11,258 12,380 (9%) 32,424 30,004 8% Other expenses:
Foreign exchange loss (gain) (79) 59 (234%) (119) 59 (302%)
Interest expense, net 788 808 (2%) 1,960 1,823 8% ---------
-------- --------- -------- Income before income taxes 10,549
11,513 (8%) 30,583 28,122 9% Income tax expense 4,378 4,464 (2%)
12,191 10,810 13% --------- -------- --------- -------- Net income
$ 6,171 $ 7,049 (12%) $ 18,392 17,312 6% ========= ========
========= ======== Net income per common share: Basic $ 0.20 $ 0.22
(9%) $ 0.60 $ 0.54 11% ========= ======== ========= ========
Diluted $ 0.20 $ 0.22 (9%) $ 0.59 $ 0.53 11% ========= ========
========= ======== Weighted average common shares outstanding:
Basic 30,710 31,954 30,842 32,041 Diluted 30,911 32,433 31,032
32,631 ND - Not determinable *T -0- *T Cross Country Healthcare,
Inc. Condensed Consolidated Balance Sheets (Unaudited, amounts in
thousands) September 30, December 31, 2008 2007 -------------
------------ Assets Current assets: Cash and cash equivalents $
12,637 $ 9,066 Restricted cash 5,000 - Accounts receivable, net
126,380 116,133 Deferred tax assets 6,472 6,172 Other current
assets 18,962 17,768 ------------ ------------ Total current assets
169,451 149,139 Property and equipment, net 25,639 23,460
Trademarks, net 64,815 19,153 Goodwill, net 366,340 326,119 Other
identifiable intangible assets, net 36,933 15,996 Debt issuance
costs, net 2,910 424 Other long-term assets 1,254 1,017
------------ ------------ Total assets $ 667,342 $ 535,308
============ ============ Liabilities and Stockholders' Equity
Current liabilities: Accounts payable and accrued expenses 12,885
10,203 Accrued employee compensation and benefits 39,015 26,102
Current portion of long-term debt 9,214 5,067 Income taxes payable
5,041 1,222 Other current liabilities 8,357 7,815 ------------
------------ Total current liabilities 74,512 50,409 Long-term debt
135,194 34,385 Non-current deferred tax liabilities 49,767 49,547
Other long-term liabilities 9,117 10,530 ------------ ------------
Total liabilities 268,590 144,871 Commitments and contingencies
Stockholders' equity: Common stock 3 3 Additional paid-in capital
237,093 245,844 Other stockholders' equity 161,656 144,590
------------ ------------ Total stockholders' equity 398,752
390,437 ------------ ------------ Total liabilities and
stockholders' equity $ 667,342 $ 535,308 ============ ============
*T -0- *T Cross Country Healthcare, Inc. Segment Data (a)
(Unaudited, amounts in thousands) Three Months Ended Nine Months
Ended September 30, September 30, ------------------
----------------- 2008 2007 % Change 2008 2007 % Change ---------
-------- -------- -------- -------- -------- Revenues: Nurse and
allied staffing $ 128,910 $145,780 (12%) $402,241 $433,497 (7%)
Physician staffing 10,831 - ND 10,831 - ND Clinical trials services
25,414 26,164 (3%) 75,181 65,444 15% Other human capital management
services 12,979 13,180 (2%) 40,083 37,615 7% --------- --------
-------- -------- $ 178,134 $185,124 (4%) $528,336 $536,556 (2%)
========= ======== ======== ======== Contribution income (b) Nurse
and allied staffing $ 14,332 $ 14,329 0% $ 41,132 $ 39,385 4%
Physician staffing 928 - ND 928 - ND Clinical trials services 3,755
5,064 (26%) 11,937 10,597 13% Other human capital management
services 1,589 1,639 (3%) 6,092 5,728 6% --------- --------
-------- -------- 20,604 21,032 (2%) 60,089 55,710 8% Unallocated
corporate overhead 6,844 6,660 3% 20,284 19,952 2% Depreciation
1,789 1,370 31% 5,352 4,359 23% Amortization 713 622 15% 2,029
1,361 49% Legal settlement charge - - ND - 34 (100%) ---------
-------- -------- -------- Income from operations $ 11,258 $ 12,380
$ 32,424 $ 30,004 ========= ======== ======== ======== *T -0- *T
Cross Country Healthcare , Inc. Other Financial Data (Unaudited)
Three Months Ended Nine Months Ended September 30, September 30,
------------------ ----------------- 2008 2007 2008 2007 ---------
-------- -------- -------- Net cash provided by operating
activities (in thousands) $ 13,760 $ 8,611 $ 40,932 $ 15,966 Nurse
and allied staffing statistical data: --------------------- FTEs
(c) 4,335 4,999 4,566 5,067 Weeks worked (d) 56,355 64,987 178,074
197,613 Average nurse and allied staffing revenue per FTE per week
(e) $ 2,287 $ 2,243 $ 2,259 $ 2,194 *T -0- *T (a) Segment data
provided is in accordance with FASB Statement 131. (b) Defined as
income from operations before 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 nurse and allied 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 nurse and allied staffing revenue per FTE per
week is calculated by dividing the nurse and allied staffing
revenue by the number of week worked in the respective periods.
Nurse and allied staffing revenue includes revenue from permanent
placement of nurses. *T Cross Country Healthcare, Inc.
(Nasdaq:CCRN) today reported revenue of $178.1 million in the third
quarter ended September 30, 2008, a 4% decrease from revenue of
$185.1 million in the prior year quarter. Net income for the third
quarter of 2008 was $6.2 million, or $0.20 per diluted share,
compared to net income of $7.0 million, or $0.22 per diluted share
in the prior year quarter. Cash flow from operations for the third
quarter of 2008 was $13.8 million. For the nine months ended
September 30, 2008, the Company generated revenue of $528.3 million
and net income of $18.4 million, or $0.59 per diluted share. This
compares to revenue of $536.6 million and net income of $17.3
million, or $0.53 per diluted share, in the first nine months of
the prior year. Cash flow from operations for the first nine months
of 2008 was $40.9 million. �While we generated strong cash flow,
improved our gross profit margin and further diversified our
revenue mix with the acquisition of the locum tenens (temporary
physician staffing) business of MDA Holdings, Inc. (MDA) during the
third quarter, the overall environment in which we operate
deteriorated significantly,� said Joseph A. Boshart, President and
Chief Executive Officer of Cross Country Healthcare. �Demand,
booking activity and volume in our travel nurse staffing business
weakened, in large part, due to hospital clients being increasingly
reluctant to commit to a contract nurse most often citing low
patient census and budget reductions for their hesitation. Our
other businesses also experienced similar reluctance on the part of
clients to commit. Nonetheless, our newly acquired temporary
physician staffing business continued its year-over-year growth due
to greater demand for physicians as they are revenue generators for
hospitals and physician practice groups,� Mr. Boshart said.
�Although our near-term expectations are disappointing to me, and
I�m sure to our shareholders, Cross Country Healthcare remains on
very sound financial footing with a prudent level of debt and cash
flow well in excess of what is required to operate our business on
a day-to-day basis. Given the general tone and uncertainty of the
economy, including a further weakening of labor markets, our
operations teams will be focused on continuing to provide a
high-level of service to our healthcare facility customers and the
healthcare professionals that look to us for assignment
opportunities. Meanwhile, our management team will be focused on
fundamentals such as cost control and continuing to de-lever our
balance sheet using our strong cash flow. I would like to add that
over our history, we have managed through several industry
down-turns � and we have always generated positive quarterly
earnings. Moreover, consistent with our strategy that we have
communicated for the past several quarters, with the MDA
acquisition we successfully diversified into a sector of our
industry that has shown consistent growth over the past decade,�
added Mr. Boshart. Nurse and Allied Staffing For the third quarter
of 2008, the nurse and allied staffing business segment (travel and
per diem nurse and travel allied staffing) generated revenue of
$128.9 million, a 12% decline from the prior year quarter. The
decrease reflected a 13% decline in staffing volume from the prior
year quarter that was partially offset by a 2.4% year-over-year
increase in the travel nurse staffing hourly bill rate.
Contribution income (defined as income from operations before
depreciation, amortization and corporate expenses not specifically
identified to a reporting segment) was relatively flat at $14.3
million in the third quarters of both 2008 and 2007. For the third
quarter of 2008, the Company experienced continued expansion of the
bill-pay spread and favorable insurance expenses. However, these
improvements were essentially offset by the impact of lower
staffing volume. For the first nine months of 2008, segment revenue
decreased 7% to $402.2 million from $433.5 million in the same
period a year ago, while contribution income increased 4% to $41.1
million from $39.4 million in the prior year period. Physician
Staffing For the third quarter of 2008, physician staffing
generated revenue of $10.8 million and $0.9 million in contribution
income since the Company�s acquisition of MDA on September 9, 2008.
Pro-forma for the current quarter, physician staffing days filled
increased 4% from the prior year quarter to 28,190 and revenue per
day filled increased 8% to $1,584. Physician staffing days filled
is derived by dividing the physician staffing hours filled during
the respective period by 8 hours. Revenue per day filled represents
segment revenue divided by the number of days filled for the
respective period. Clinical Trials Services For the third quarter
of 2008, the clinical trials services segment generated revenue of
$25.4 million, a decrease of 3% from the prior year quarter due
primarily to a decline in the drug safety business from the prior
year quarter related to a specific client. Contribution income
decreased 26% in the third quarter of 2008 to $3.8 million from the
same quarter of 2007 primarily due to a reduction in contribution
from the drug safety business. For the first nine months of 2008,
segment revenue increased 15% to $75.2 million from $65.4 million
in the same period a year ago, while contribution income increased
13% to $11.9 million from $10.6 million in the prior year period.
Other Human Capital Management Services For the third quarter of
2008, the other human capital management services business segment
(education and training and retained search) generated revenue of
$13.0 million, a 2% decrease from the same quarter in the prior
year, reflecting lower revenue generated by the education and
training business that was partially offset by higher revenue in
the retained search business. Segment contribution income decreased
3% to $1.6 million in the third quarter of 2008 from the prior year
quarter, reflecting a decline in contribution from the retained
search business that was mostly offset by an increase in
contribution from the education and training business. For the
first nine months of 2008, segment revenue increased 7% to $40.1
million from $37.6 million in the same period a year ago, while
contribution income increased 6% to $6.1 million from $5.7 million
in the prior year period. Debt Repayments/Borrowings In conjunction
with the MDA acquisition, the Company entered into an amended and
restated $200.0 million syndicated credit facility with Wachovia
Capital Markets, LLC�and certain of its affiliates, Banc of America
Securities, LLC, and certain other lenders. Pursuant to this
financing, the Company amended and kept in place its existing $75.0
million revolving credit facility and entered into a new $125.0
million 5-year term loan, from which the proceeds were used to
finance the acquisition and to pay-down approximately $6.8 million
of debt outstanding on the revolving credit facility. During the
third quarter of 2008, the Company repaid a net of $15.0 million of
borrowings under its revolving credit facility. At September 30,
2008, the Company had $144.4 million of total debt on its balance
sheet and a debt, net of unrestricted cash, to total capitalization
ratio of 24%. Stock Repurchase Program Update Cross Country
Healthcare refrained from repurchasing its common stock during the
third quarter of 2008 due to the timing of negotiations and
subsequent completion of the MDA acquisition. As of September 30,
2008, the Company can repurchase up to 1,441,139 shares of its
common stock under the current authorization approved in February
2008. Under this authorization, the shares may be repurchased from
time-to-time in the open market subject to the terms of the
Company�s credit agreement. Such repurchases may be discontinued at
any time at the discretion of the Company. Pursuant to the terms of
the Company�s credit agreement, as long as its debt leverage ratio
(as defined in the Company�s credit agreement) is above 2 to 1 the
Company cannot repurchase shares. As of the end of the third
quarter, the Company's debt leverage ratio was approximately 2.15
to 1. At September 30, 2008, the Company had approximately 30.8
million shares outstanding. Guidance for Fourth Quarter 2008 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 and other business combinations,
any impairment charges, any significant legal proceedings or any
significant repurchases of our common stock. The Company expects
revenue in the fourth quarter of 2008 to be in the $195 million to
$199 million range and earnings per diluted share to be in the
range of $0.15 to $0.17. For the full-year, the Company expects
2008 revenue to be in the $723 million to $727 million range and
earnings per diluted share to be in the range of $0.74 to $0.76.
Quarterly Conference Call Cross Country Healthcare will hold a
conference call on Monday, November 3rd at 10:00 a.m. Eastern Time
to discuss its third quarter 2008 financial results. This call will
be webcast live by CCBN/Thomson and may be accessed at the
Company's web site at www.crosscountryhealthcare.com or by dialing
877-917-1549 from anywhere in the U.S. or by dialing 312-470-7109
from non-U.S. locations � Passcode: Cross Country. A replay of the
webcast will be available through November 17th. A replay of the
conference call will be available by telephone from approximately
noon on November 3rd until November 17th by calling 800-756-0131
from anywhere in the U.S. or 203-369-3001 from non-U.S. locations.
About Cross Country Healthcare Cross Country Healthcare, Inc. is a
leading provider of nurse and allied staffing services in the
United States, a national provider of multi-specialty locum tenens
(temporary physician staffing) services, a provider of clinical
trials services to global pharmaceutical and biotechnology
customers, as well as a provider of other human capital management
services focused on healthcare. The Company has approximately 5,000
contracts with hospitals, healthcare providers, pharmaceutical and
biotechnology customers, and other healthcare organizations. Copies
of this and other news releases as well as additional information
about Cross Country Healthcare can be obtained online at
www.crosscountryhealthcare.com. Shareholders and prospective
investors can also register at the corporate website to
automatically receive the Company's press releases, SEC filings and
other notices by e-mail. 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�, �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, 2007, and our other Securities and Exchange Commission
filings made during 2008. 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., its
subsidiaries and affiliates. Cross Country Healthcare, Inc.
Consolidated Statements of Income (Unaudited, amounts in thousands,
except per share data) � � � � � � Three Months Ended Nine Months
Ended September 30, September 30, 2008 2007 %Change 2008 2007
%Change � � Revenue from services $ 178,134 $ 185,124 (4 %) $
528,336 536,556 (2 %) Operating expenses: Direct operating expenses
130,696 139,266 (6 %) 390,081 408,606 (5 %) Selling, general and
administrative expenses 33,475 31,486 6 % 97,763 90,927 8 % Bad
debt expense 203 - ND 687 1,265 (46 %) Depreciation 1,789 1,370 31
% 5,352 4,359 23 % Amortization 713 622 15 % 2,029 1,361 49 % Legal
settlement charge � - � � - - � - � � 34 ND Total operating
expenses � 166,876 � � 172,744 (3 %) � 495,912 � � 506,552 (2 %)
Income from operations 11,258 12,380 (9 %) 32,424 30,004 8 % Other
expenses: Foreign exchange loss (gain) (79 ) 59 (234 %) (119 ) 59
(302 %) Interest expense, net � 788 � � 808 (2 %) � 1,960 � � 1,823
8 % Income before income taxes 10,549 11,513 (8 %) 30,583 28,122 9
% Income tax expense � 4,378 � � 4,464 (2 %) � 12,191 � � 10,810 13
% Net income $ 6,171 � $ 7,049 (12 %) $ 18,392 � � 17,312 6 % � Net
income per common share: Basic $ 0.20 � $ 0.22 (9 %) $ 0.60 � $
0.54 11 % Diluted $ 0.20 � $ 0.22 (9 %) $ 0.59 � $ 0.53 11 % �
Weighted average common shares outstanding: � Basic 30,710 31,954
30,842 32,041 Diluted 30,911 32,433 31,032 32,631 � ND - Not
determinable Cross Country Healthcare, Inc. Condensed Consolidated
Balance Sheets (Unaudited, amounts in thousands) � � September 30,
December 31, 2008 2007 Assets Current assets: Cash and cash
equivalents $ 12,637 $ 9,066 Restricted cash 5,000 - Accounts
receivable, net 126,380 116,133 Deferred tax assets 6,472 6,172
Other current assets � 18,962 � 17,768 Total current assets 169,451
149,139 Property and equipment, net 25,639 23,460 Trademarks, net
64,815 19,153 Goodwill, net 366,340 326,119 Other identifiable
intangible assets, net 36,933 15,996 Debt issuance costs, net 2,910
424 Other long-term assets � 1,254 � 1,017 Total assets $ 667,342 $
535,308 � Liabilities and Stockholders' Equity Current liabilities:
Accounts payable and accrued expenses 12,885 10,203 Accrued
employee compensation and benefits 39,015 26,102 Current portion of
long-term debt 9,214 5,067 Income taxes payable 5,041 1,222 Other
current liabilities � 8,357 � 7,815 Total current liabilities
74,512 50,409 � Long-term debt 135,194 34,385 Non-current deferred
tax liabilities 49,767 49,547 Other long-term liabilities � 9,117 �
10,530 Total liabilities 268,590 144,871 � Commitments and
contingencies � Stockholders' equity: Common stock 3 3 Additional
paid-in capital 237,093 245,844 Other stockholders' equity �
161,656 � 144,590 Total stockholders' equity 398,752 390,437 � �
Total liabilities and stockholders' equity $ 667,342 $ 535,308
Cross Country Healthcare, Inc. Segment Data (a) (Unaudited, amounts
in thousands) � � � � � � Three Months Ended Nine Months Ended
September 30, September 30, 2008 2007 % Change 2008 2007 % Change �
Revenues: Nurse and allied staffing $ 128,910 $ 145,780 (12 %) $
402,241 $ 433,497 (7 %) Physician staffing 10,831 - ND 10,831 - ND
Clinical trials services 25,414 26,164 (3 %) 75,181 65,444 15 %
Other human capital management services � 12,979 � 13,180 (2 %) �
40,083 � 37,615 7 % $ 178,134 $ 185,124 (4 %) $ 528,336 $ 536,556
(2 %) � Contribution income (b) Nurse and allied staffing $ 14,332
$ 14,329 0 % $ 41,132 $ 39,385 4 % Physician staffing 928 - ND 928
- ND Clinical trials services 3,755 5,064 (26 %) 11,937 10,597 13 %
Other human capital management services � 1,589 � 1,639 (3 %) �
6,092 � 5,728 6 % 20,604 21,032 (2 %) 60,089 55,710 8 % �
Unallocated corporate overhead 6,844 6,660 3 % 20,284 19,952 2 %
Depreciation 1,789 1,370 31 % 5,352 4,359 23 % Amortization 713 622
15 % 2,029 1,361 49 % Legal settlement charge � - � - ND � - � 34
(100 %) Income from operations $ 11,258 $ 12,380 $ 32,424 $ 30,004
Cross Country Healthcare , Inc. Other Financial Data (Unaudited) �
� � � � � � � � � � � � � � � Three Months Ended Nine Months Ended
September 30, � September 30, 2008 2007 2008 2007 Net cash provided
by operating activities (in thousands) $ 13,760 $ 8,611 $ 40,932 $
15,966 � Nurse and allied staffing statistical data: FTEs (c) 4,335
4,999 4,566 5,067 Weeks worked (d) 56,355 64,987 178,074 197,613
Average nurse and allied staffing revenue per FTE per week (e) $
2,287 $ 2,243 $ 2,259 $ 2,194 (a) Segment data provided is in
accordance with FASB Statement 131. (b) Defined as income from
operations before 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 nurse and allied 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 nurse and allied staffing revenue per FTE per
week is calculated by dividing the nurse and allied staffing
revenue by the number of week worked in the respective periods.
Nurse and allied staffing revenue includes revenue from permanent
placement of nurses.
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