Cross Country Healthcare, Inc. (the "Company") (Nasdaq: CCRN)
today announced financial results for its third quarter ended
September 30, 2023.
SELECTED FINANCIAL INFORMATION:
Variance
Variance
Q3 2023 vs
Q3 2023 vs
Dollars are in thousands, except per share
amounts
Q3 2023
Q3 2022
Q2 2023
Revenue
$
442,291
(30)
%
(18)
%
Gross profit margin*
22.0
%
(60)
bps
(80)
bps
Net income attributable to common
stockholders
$
12,812
(63)
%
(40)
%
Diluted EPS
$
0.36
$
(0.57)
$
(0.24)
Adjusted EBITDA*
$
27,248
(57)
%
(39)
%
Adjusted EBITDA margin*
6.2
%
(380)
bps
(200)
bps
Adjusted EPS*
$
0.39
$
(0.68)
$
(0.30)
Cash flows provided by operations
$
70,311
(50)
%
(41)
%
* Amounts represent measures not
calculated in accordance with U.S. generally accepted accounting
principles (GAAP) and are referred to as non-GAAP measures. Please
refer to the accompanying discussion of how these non-GAAP
financial measures are calculated and used under “Non-GAAP
Financial Measures” and tables reconciling these measures to the
closest GAAP measure, below.
Third Quarter Business Highlights
- Revenue, Adjusted EBITDA, and Adjusted EPS all within guidance
ranges
- Signed largest Intellify® agreement to date with expected
annual spend over $100 million
- Physician Staffing, Education and Homecare experienced
year-over-year revenue growth
- Strong year to date operating cash flows of $236 million,
ending Q3 with no debt
- Repurchased approximately 600,000 shares of common stock for
$14.8 million
“Though the market remains challenging, especially for nursing,
we are pleased with the growth in other lines of business like
physician staffing, education, and homecare staffing,” said John A.
Martins, President and Chief Executive Officer of Cross Country
Healthcare. He continued, “I am especially pleased with our
traction in the vendor neutral space, leveraging Intellify®, to
secure several new clients this quarter. With our strong balance
sheet and positive cash flows, we are well-positioned to continue
making investments that lead to long-term profitable growth.”
Third quarter consolidated revenue was $442.3 million, a
decrease of 30% year-over-year and 18% sequentially. Consolidated
gross profit margin was 22.0%, down 60 basis points year-over-year
and 80 basis points sequentially. Net income attributable to common
stockholders was $12.8 million compared to $34.8 million in the
prior year and $21.3 million in the prior quarter. Diluted earnings
per share (EPS) was $0.36 compared to $0.93 in the prior year and
$0.60 in the prior quarter. Adjusted earnings before interest,
taxes, depreciation, and amortization (EBITDA) was $27.2 million or
6.2% of revenue, as compared with $63.8 million or 10.0% of revenue
in the prior year, and $44.4 million or 8.2% of revenue in the
prior quarter. Adjusted EPS was $0.39 compared to $1.07 in the
prior year and $0.69 in the prior quarter.
For the nine months ended September 30, 2023, consolidated
revenue was $1.6 billion, a decrease of 26% year-over-year.
Consolidated gross profit margin was 22.4%, flat year-over-year.
Net income attributable to common stockholders was $63.6 million,
or $1.78 per diluted share, compared to $149.7 million, or $3.97
per diluted share, in the prior year. Adjusted EBITDA was $123.8
million or 7.7% of revenue, as compared with $244.7 million or
11.2% of revenue in the prior year. Adjusted EPS was $1.92 compared
to $4.17 in the prior year.
Quarterly Business Segment Highlights
Nurse and Allied Staffing
Revenue was $396.6 million, a decrease of 35% year-over-year and
20% sequentially. Contribution income was $39.2 million, a decrease
from $77.8 million year-over-year and $56.5 million sequentially.
Average field contract personnel on a full-time equivalent (FTE)
basis were 9,849 as compared with 12,524 in the prior year and
11,385 in the prior quarter. Revenue per FTE per day was $434
compared to $526 in the prior year and $474 in the prior quarter.
As expected, volume declined as clients continue to right-size
their needs, and travel bill rates continued to normalize.
Physician Staffing
Revenue was $45.7 million, an increase of 92% year-over-year and
increased 21% excluding the impact from acquisitions. Contribution
income was $2.6 million, an increase from $0.8 million
year-over-year and a decrease from $3.5 million sequentially. Total
days filled were 23,004 as compared with 13,219 in the prior year
and 23,826 in the prior quarter. Revenue per day filled was $1,986
as compared with $1,803 in the prior year and $1,902 in the prior
quarter. The year-over-year increase in revenue was driven in part
by an increase in volume in several specialties.
Cash Flow and Balance Sheet Highlights
Net cash provided by operating activities for the quarter was
$70.3 million. For the nine months ended September 30, 2023, net
cash provided by operating activities was $236.4 million as
compared to $129.7 million in the prior year.
During the third quarter, the Company repurchased and retired a
total of 0.6 million shares of the Company's common stock for an
aggregate price of $14.8 million, at an average market price of
$23.92 per share. As of September 30, 2023, the Company had 34.7
million unrestricted shares outstanding and $83.7 million remaining
for share repurchases.
At September 30, 2023, the Company had $14.3 million in cash and
cash equivalents. The Company had no borrowings drawn under its
revolving senior secured asset-based credit facility (ABL) and
$17.9 million of letters of credit outstanding. As of September 30,
2023, borrowing base availability under the ABL was $227.4 million,
with $209.5 million of excess availability.
Outlook for Fourth Quarter 2023
The guidance below applies to management’s expectations for the
fourth quarter of 2023.
Q4 2023 Range
Year-over-Year
Sequential
Change
Change
Revenue
$400 million - $410 million
(36)% - (35)%
(10)% - (7)%
Adjusted EBITDA*
$19.0 million - $24.0 million
(67)% - (58)%
(30)% - (12)%
Adjusted EPS*
$0.25 - $0.35
$(0.84) - $(0.74)
$(0.14) - $(0.04)
* Refer to discussion of non-GAAP
financial measures and reconciliation tables below.
The above estimates 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, changes in debt structure, or future significant
share repurchases.
INVITATION TO CONFERENCE CALL
The Company will hold its quarterly conference call on
Wednesday, November 1, 2023, at 5:00 P.M. Eastern Time to discuss
its third quarter 2023 financial results. This call will be webcast
live and can be accessed at the Company’s website at
ir.crosscountry.com or by dialing 888-566-1290 from anywhere in the
U.S. or by dialing 773-799-3776 from non-U.S. locations - Passcode:
Cross Country. A replay of the webcast will be available from
November 1st through November 15th on the Company’s website and a
replay of the conference call will be available by telephone by
calling 866-361-4943 from anywhere in the U.S. or 203-369-0191 from
non-U.S. locations - Passcode: 7168.
ABOUT CROSS COUNTRY HEALTHCARE
Cross Country Healthcare, Inc. is a market-leading, tech-enabled
workforce solutions and advisory firm with 37 years of industry
experience and insight. We help clients tackle complex
labor-related challenges and achieve high-quality outcomes, while
reducing complexity and improving visibility through data-driven
insights. Diversity, equality, and inclusion is at the heart of the
organization’s overall corporate social responsibility program, and
closely aligned with our core values to create a better future for
its people, communities, and its stockholders.
Copies of this and other press releases, as well as additional
information about the Company, can be accessed online at
ir.crosscountry.com. Stockholders and prospective investors can
also register to automatically receive the Company’s press
releases, filings with the Securities and Exchange Commission
(SEC), and other notices by e-mail.
NON-GAAP FINANCIAL MEASURES
This press release and the accompanying financial statement
tables reference non-GAAP financial measures, such as gross profit
margin, adjusted EBITDA, and adjusted EPS. 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 United States generally accepted
accounting principles (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 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.
In addition, forward-looking adjusted EBITDA and adjusted EPS
for fiscal 2023 exclude potential charges or gains that may be
recorded during the fiscal year, including among other things, the
potential impact of any future divestitures, mergers, acquisitions,
or other business combinations, changes in debt structure, or
future significant share repurchases. We have not attempted to
provide reconciliations of such forward-looking non-GAAP earnings
guidance to the comparable GAAP measure, as permitted by Item
10(e)(1)(i)(B) of Regulation S-K, because the impact and timing of
these potential charges or gains is inherently uncertain and
difficult to predict and is unavailable without unreasonable
efforts. In addition, the Company believes such reconciliations
would imply a degree of precision and certainty that could be
confusing to investors. Such items could have a substantial impact
on GAAP measures of our financial performance.
FORWARD-LOOKING STATEMENTS
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, Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and the Private Securities
Litigation Reform Act of 1995, and are subject to the "safe harbor"
created by those sections. Forward-looking statements consist of
statements that are predictive in nature and/or depend upon or
refer to future events. Words such as "expects", "anticipates",
"intends", "plans", "believes", "estimates", "suggests", "appears",
"seeks", "will", "could", and variations of such words and similar
expressions are intended to identify forward-looking statements.
These statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results and performance to
be materially different from any future results or performance
expressed or implied by these forward-looking statements. These
factors include, but are not limited to, the following: the overall
macroeconomic environment, including increased inflation and
interest rates, demand for the healthcare services we provide, both
nationally and in the regions in which we operate, 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, 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 customers’ 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, including, without limitation, the risk factors set forth
in Item 1A. "Risk Factors" in the Company’s Annual Report on Form
10-K for the year ended December 31, 2022, as filed and updated in
our Quarterly Reports on Form 10-Q and other filings with the SEC.
You should consult any further disclosures the Company makes on
related subjects in its filings with the SEC.
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. Except as may
be required by law, the Company undertakes no obligation to update
or revise forward-looking statements. All references to "the
Company", "we", "us", "our", or "Cross Country" in this press
release mean Cross Country Healthcare, Inc. and its consolidated
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,
2023
2022
2023
2023
2022
Revenue from services
$
442,291
$
636,098
$
540,695
$
1,605,693
$
2,178,391
Operating expenses:
Direct operating expenses
344,932
492,553
417,556
1,245,772
1,689,647
Selling, general and administrative
expenses
69,627
80,706
78,938
232,825
243,568
Bad debt expense
2,355
1,101
3,134
10,397
6,662
Depreciation and amortization
4,540
3,214
4,432
13,876
9,414
Restructuring costs
348
2,493
913
1,690
1,859
Legal settlement charges
—
—
—
1,125
—
Impairment charges
186
3,856
533
719
5,597
Total operating expenses
421,988
583,923
505,506
1,506,404
1,956,747
Income from operations
20,303
52,175
35,189
99,289
221,644
Other expenses (income):
Interest expense
669
3,498
3,149
7,508
10,876
Loss on early extinguishment of debt
—
—
1,723
1,723
1,912
Other expense (income), net
134
(27
)
11
133
(1,119
)
Income before income taxes
19,500
48,704
30,306
89,925
209,975
Income tax expense
6,688
13,911
8,961
26,332
60,305
Net income attributable to common
stockholders
$
12,812
$
34,793
$
21,345
$
63,593
$
149,670
Net income per share attributable to
common stockholders - Basic
$
0.37
$
0.94
$
0.60
$
1.80
$
4.02
Net income per share attributable to
common stockholders - Diluted
$
0.36
$
0.93
$
0.60
$
1.78
$
3.97
Weighted average common shares
outstanding:
Basic
34,954
37,101
35,351
35,386
37,200
Diluted
35,152
37,492
35,524
35,742
37,741
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,
2023
2022
2023
2023
2022
Adjusted EBITDA:a
Net income attributable to common
stockholders
$
12,812
$
34,793
$
21,345
$
63,593
$
149,670
Interest expense
669
3,498
3,149
7,508
10,876
Income tax expenseb
6,688
13,911
8,961
26,332
60,305
Depreciation and amortization
4,540
3,214
4,432
13,876
9,414
Acquisition and integration-related
costs
13
490
64
59
530
Restructuring costsc
348
2,493
913
1,690
1,859
Legal settlements and feesd
—
—
—
1,125
—
Impairment chargese
186
3,856
533
719
5,597
Loss on disposal of fixed assets
43
—
—
43
25
Loss on early extinguishment of debtf
—
—
1,723
1,723
1,912
Loss (gain) on lease terminationg
96
(9
)
—
104
(1,094
)
Other (income) expense, net
(5
)
(19
)
11
(14
)
(51
)
Equity compensation
1,433
1,491
2,205
5,413
5,206
System conversion costsh
425
74
1,104
1,658
441
Adjusted EBITDAa
$
27,248
$
63,792
$
44,440
$
123,829
$
244,690
Adjusted EBITDA margina
6.2
%
10.0
%
8.2
%
7.7
%
11.2
%
Adjusted EPS:i
Numerator:
Net income attributable to common
stockholders
$
12,812
$
34,793
$
21,345
$
63,593
$
149,670
Non-GAAP adjustments - pretax:
Acquisition and integration-related
costs
13
490
64
59
530
Restructuring costsc
348
2,493
913
1,690
1,859
Legal settlements and feesd
—
—
—
1,125
—
Impairment chargese
186
3,856
533
719
5,597
Loss on early extinguishment of debtf
—
—
1,723
1,723
1,912
System conversion costsh
425
74
1,104
1,658
441
Tax impact of non-GAAP adjustments
(208
)
(1,802
)
(1,132
)
(1,767
)
(2,679
)
Adjusted net income attributable to common
stockholders - non-GAAP
$
13,576
$
39,904
$
24,550
$
68,800
$
157,330
Denominator:
Weighted average common shares - basic,
GAAP
34,954
37,101
35,351
35,386
37,200
Dilutive impact of share-based
payments
198
391
173
356
541
Adjusted weighted average common shares -
diluted, non-GAAP
35,152
37,492
35,524
35,742
37,741
Reconciliation:
Diluted EPS, GAAP
$
0.36
$
0.93
$
0.60
$
1.78
$
3.97
Non-GAAP adjustments - pretax:
Acquisition and integration-related
costs
—
0.01
—
—
0.01
Restructuring costsc
0.01
0.07
0.03
0.05
0.05
Legal settlements and feesd
—
—
—
0.03
—
Impairment chargese
0.01
0.10
0.01
0.02
0.15
Loss on early extinguishment of debtf
—
—
0.05
0.05
0.05
System conversion costsh
0.01
—
0.03
0.04
0.01
Tax impact of non-GAAP adjustments
—
(0.04
)
(0.03
)
(0.05
)
(0.07
)
Adjusted EPS, non-GAAPi
$
0.39
$
1.07
$
0.69
$
1.92
$
4.17
Cross Country Healthcare,
Inc.
Consolidated Balance
Sheets
(Unaudited, amounts in
thousands)
September 30,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
14,301
$
3,604
Accounts receivable, net
410,373
641,611
Income taxes receivable
5,239
10,915
Prepaid expenses
4,779
11,067
Insurance recovery receivable
7,807
7,434
Other current assets
2,730
1,042
Total current assets
445,229
675,673
Property and equipment, net
26,262
19,662
Operating lease right-of-use assets
2,628
3,254
Goodwill
135,430
163,268
Other intangible assets, net
57,256
44,723
Deferred tax assets
6,534
7,092
Insurance recovery receivable
22,329
23,058
Cloud computing
5,455
4,460
Other assets
6,616
6,649
Total assets
$
707,739
$
947,839
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable and accrued expenses
$
114,797
$
185,507
Accrued compensation and benefits
57,420
72,605
Operating lease liabilities
2,782
4,132
Earnout liability
6,910
7,500
Other current liabilities
1,669
1,896
Total current liabilities
183,578
271,640
Debt
—
148,735
Operating lease liabilities
3,040
4,880
Accrued claims
32,652
35,881
Earnout liability
5,000
18,000
Uncertain tax positions
9,906
7,646
Other liabilities
3,902
3,838
Total liabilities
238,078
490,620
Commitments and contingencies
Stockholders' equity:
Common stock
4
4
Additional paid-in capital
241,732
292,876
Accumulated other comprehensive loss
(1,394
)
(1,387
)
Retained earnings
229,319
165,726
Total stockholders' equity
469,661
457,219
Total liabilities and stockholders'
equity
$
707,739
$
947,839
Cross Country Healthcare,
Inc.
Segment Dataj
(Unaudited, amounts in
thousands)
Three Months Ended
Year-over- Year
Sequential
September 30,
% of
September 30,
% of
June 30,
% of
% change
% change
2023
Total
2022
Total
2023
Total
Fav (Unfav)
Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing
$
396,595
90
%
$
612,270
96
%
$
495,376
92
%
(35
)%
(20
)%
Physician Staffing
45,696
10
%
23,828
4
%
45,319
8
%
92
%
1
%
$
442,291
100
%
$
636,098
100
%
$
540,695
100
%
(30
)%
(18
)%
Contribution income:k
Nurse and Allied Staffing
$
39,226
$
77,838
$
56,481
(50
)%
(31
)%
Physician Staffing
2,576
837
3,541
208
%
(27
)%
41,802
78,675
60,022
(47
)%
(30
)%
Corporate overheadl
16,412
16,447
18,891
—
%
13
%
Depreciation and amortization
4,540
3,214
4,432
(41
)%
(2
)%
Restructuring costsc
348
2,493
913
86
%
62
%
Impairment chargese
186
3,856
533
95
%
65
%
Other costs
13
490
64
97
%
80
%
Income from operations
$
20,303
$
52,175
$
35,189
(61
)%
(42
)%
Nine Months Ended
Year-over- Year
September 30,
% of
September 30,
% of
% change
2023
Total
2022
Total
Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing
$
1,474,273
92
%
$
2,109,293
97
%
(30
)%
Physician Staffing
131,420
8
%
69,098
3
%
90
%
$
1,605,693
100
%
$
2,178,391
100
%
(26
)%
Contribution income:k
Nurse and Allied Staffing
$
162,876
$
285,506
(43
)%
Physician Staffing
7,841
3,822
105
%
170,717
289,328
(41
)%
Corporate overheadl
53,959
50,284
(7
)%
Depreciation and amortization
13,876
9,414
(47
)%
Restructuring costsc
1,690
1,859
9
%
Legal settlement chargesd
1,125
—
(100
)%
Impairment chargese
719
5,597
87
%
Other costs
59
530
89
%
Income from operations
$
99,289
$
221,644
(55
)%
Other costs include acquisition and
integration-related costs.
Cross Country Healthcare,
Inc.
Summary Condensed Consolidated
Statements of Cash Flows
(Unaudited, amounts in
thousands)
Three Months Ended
Nine Months Ended
September 30,
September 30,
June 30,
September 30,
September 30,
2023
2022
2023
2023
2022
Net cash provided by operating
activities
$
70,311
$
140,627
$
119,248
$
236,424
$
129,730
Net cash used in investing activities
(3,408
)
(2,915
)
(3,996
)
(10,900
)
(6,763
)
Net cash used in financing activities
(53,273
)
(107,661
)
(114,871
)
(214,825
)
(93,674
)
Effect of exchange rate changes on
cash
(2
)
(10
)
1
(2
)
(9
)
Change in cash and cash equivalents
13,628
30,041
382
10,697
29,284
Cash and cash equivalents at beginning of
period
673
279
291
3,604
1,036
Cash and cash equivalents at end of
period
$
14,301
$
30,320
$
673
$
14,301
$
30,320
Cross Country Healthcare,
Inc.
Other Financial Data
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
September 30,
June 30,
September 30,
September 30,
2023
2022
2023
2023
2022
Revenue from services
$
442,291
$
636,098
$
540,695
$
1,605,693
$
2,178,391
Less: Direct operating expenses
344,932
492,553
417,556
1,245,772
1,689,647
Gross profit
$
97,359
$
143,545
$
123,139
$
359,921
$
488,744
Consolidated gross profit marginm
22.0
%
22.6
%
22.8
%
22.4
%
22.4
%
Nurse and Allied
Staffing statistical data:
FTEsn
9,849
12,524
11,385
11,251
13,157
Average Nurse and Allied Staffing revenue
per FTE per dayo
$
434
$
526
$
474
$
476
$
582
Physician Staffing
statistical data:
Days filledp
23,004
13,219
23,826
68,927
38,703
Revenue per day filledq
$
1,986
$
1,803
$
1,902
$
1,907
$
1,785
(a)
Adjusted EBITDA, a non-GAAP financial
measure, is defined as net income (loss) attributable to common
stockholders before interest expense, income tax expense (benefit),
depreciation and amortization, acquisition and integration-related
(benefits) costs, restructuring (benefits) costs, legal settlements
and fees, impairment charges, gain or loss on derivative, loss on
early extinguishment of debt, gain or loss on disposal of fixed
assets, gain or loss on lease termination, gain or loss on sale of
business, other expense (income), net, equity compensation, and
system conversion costs. Adjusted EBITDA is not and should not be
considered a measure of financial performance under GAAP.
Management presents Adjusted EBITDA because it believes that
Adjusted EBITDA is a useful supplement to net income attributable
to common stockholders as an indicator of operating performance.
Management uses Adjusted EBITDA for planning purposes and as one
performance measure in its incentive programs for certain members
of its management team. Adjusted EBITDA, as defined, closely
matches the operating measure as defined by the Company's credit
facilities. Adjusted EBITDA Margin is calculated by dividing
Adjusted EBITDA by the Company's consolidated revenue.
(b)
Income taxes for the 2023 three and nine
month periods reflected a decrease in book income.
(c)
Restructuring costs were primarily
comprised of employee termination costs, lease-related exit costs,
and reorganization costs as part of planned cost savings
initiatives.
(d)
Legal settlements and fees included legal
settlement charges as presented on the consolidated statements of
operations, as well as legal fees pertaining to non-operational
legal matters outside the normal course of operations, which are
included in selling, general and administrative expenses. For the
nine months ended September 30, 2023, the Company incurred $1.1
million, including legal fees, to settle a wage and hour class
action lawsuit.
(e)
Impairment charges of $0.7 million for the
nine months ended September 30, 2023 were comprised of $0.2 million
related to right-of-use assets and related property in connection
with vacated leases in the third quarter of 2023, and $0.5 million
in the second quarter of 2023 related to the write-off of an IT
project. Impairment charges for the nine months ended September 30,
2022 were comprised of $2.0 million related to right-of-use assets
and related property in connection with leases that were vacated
and $1.9 million primarily related to the write-off of an IT
project in the third quarter of 2022, and $1.7 million in the first
quarter of 2022 related to right-of-use assets and related property
in connection with vacated leases.
(f)
Loss on early extinguishment of debt for
the nine months ended September 30, 2023 consisted of the write-off
of debt issuance costs related to the payoff and termination of the
term loan on June 30, 3023. Loss on early extinguishment of debt
for the nine months ended September 30, 2022 consisted of a
prepayment premium and the write-off of debt issuance costs related
to an optional prepayment on the term loan in the second quarter of
2022.
(g)
The gain on lease termination for the nine
months ended September 30, 2022 was primarily a result of the early
termination of the lease for one of the Company's corporate
offices, recognized in the second quarter of 2022.
(h)
System conversion costs include ERP system
costs related to the upgrading and integrating of our middle and
back-office platforms, with certain development costs capitalized
and amortized in accordance with the Company's policies, and
applicant tracking system costs related to the Company's project to
replace its legacy system supporting its travel nurse staffing
business.
(i)
Adjusted EPS, a non-GAAP financial
measure, is defined as net income (loss) attributable to common
stockholders per diluted share before the diluted EPS impact of
acquisition and integration-related (benefits) costs, restructuring
(benefits) costs, legal settlements and fees, impairment charges,
gain or loss on derivative, loss on early extinguishment of debt,
gain or loss on sale of business, system conversion costs, and
nonrecurring income tax adjustments. Adjusted EPS is not and should
not be considered a measure of financial performance under GAAP.
Management presents Adjusted EPS because it believes that Adjusted
EPS is a useful supplement to its reported EPS as an indicator of
operating performance. Management believes it provides a more
useful comparison of the Company's underlying business performance
from period to period and is more representative of the future
earnings capacity of the Company. Quarterly non-GAAP adjustment may
vary due to rounding.
(j)
Segment data is provided in accordance
with the Segment Reporting Topic of the Financial Accounting
Standards Board Accounting Standards Codification.
(k)
Contribution income is defined as income
(loss) from operations before depreciation and amortization,
acquisition and integration-related (benefits) costs, restructuring
(benefits) costs, legal settlement charges, impairment charges, and
corporate overhead. Contribution income is a financial measure used
by management when assessing segment performance.
(l)
Corporate overhead includes unallocated
executive leadership and other centralized corporate functional
support costs such as finance, IT, legal, human resources, and
marketing, as well as public company expenses and corporate-wide
projects (initiatives).
(m)
Gross profit is defined as revenue from
services less direct operating expenses. The Company's gross profit
excludes allocated depreciation and amortization expense. Gross
profit margin is calculated by dividing gross profit by revenue
from services.
(n)
FTEs represent the average number of Nurse
and Allied Staffing contract personnel on a full-time equivalent
basis.
(o)
Average revenue per FTE per day is
calculated by dividing Nurse and Allied Staffing revenue, excluding
permanent placement, per FTE by the number of days worked in the
respective periods.
(p)
Days filled is calculated by dividing the
total hours invoiced during the period, including an estimate for
the impact of accrued revenue, by 8 hours.
(q)
Revenue per day filled is calculated by
dividing revenue as reported by days filled for the period
presented.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231031339688/en/
Cross Country Healthcare, Inc. William J. Burns, Executive Vice
President & Chief Financial Officer 561-237-2555
wburns@crosscountry.com
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