CCRN
$29.19
Cross Ctry Hlthcr
$.31
1.07%
Earnings Details
2nd Quarter June 2022
Wednesday, August 3, 2022 4:15:00 PM
Tweet Share Watch
Summary

Cross Ctry Hlthcr Reports In-line

Cross Ctry Hlthcr (CCRN) reported 2nd Quarter June 2022 earnings of $1.40 per share on revenue of $753.6 million. The consensus earnings estimate was $1.35 per share on revenue of $741.1 million. The Earnings Whisper number was $1.40 per share. Revenue grew 127.1% on a year-over-year basis.

The company said it expects third quarter non-GAAP earnings of $0.85 to $0.95 per share on revenue of $605.0 million to $615.0 million. The current consensus earnings estimate is $0.91 per share on revenue of $575.52 million for the quarter ending September 30, 2022.

Cross Country Healthcare Inc is a provider of healthcare recruiting, staffing, & workforce solutions. Its workforce solutions include managed service programs, electronic medical record transition staffing, recruitment process outsourcing, among others.

Results
Reported Earnings
$1.40
Earnings Whisper
$1.40
Consensus Estimate
$1.35
Reported Revenue
$753.6 Mil
Revenue Estimate
$741.1 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Cross Country Healthcare Announces Second Quarter 2022 Financial Results

BOCA RATON, Fla.--(BUSINESS WIRE)--Cross Country Healthcare, Inc. (the "Company") (Nasdaq: CCRN) today announced financial results for its second quarter ended June 30, 2022.

SELECTED FINANCIAL INFORMATION:

 

 

 

 

 

Variance

 

Variance

 

 

 

 

 

Q2 2022 vs

 

Q2 2022 vs

Dollars are in thousands, except per share amounts

Q2 2022

 

Q2 2021

 

Q1 2022

Revenue

$

753,561

 

 

 

127

 

%

 

(4

)

%

Gross profit margin*

 

22.6

 

%

 

70

 

bps

 

40

 

bps

Net income attributable to common stockholders

$

52,894

 

 

 

358

 

%

 

(15

)

%

Diluted EPS

$

1.40

 

 

$

1.09

 

 

$

(0.23

)

Adjusted EBITDA*

$

83,490

 

 

 

244

 

%

 

(14

)

%

Adjusted EBITDA margin*

 

11.1

 

%

 

380

 

bps

 

(120

)

bps

Adjusted EPS*

$

1.40

 

 

$

0.93

 

 

$

(0.30

)

Cash flows used in operations

$

18,141

 

 

 

17

 

%

 

162

 

%

* Refer to accompanying tables and discussion of non-GAAP (Generally Accepted Accounting Principles) financial measures below.

Second Quarter Business Highlights

  • Revenue and Adjusted EBITDA exceeded guidance ranges
  • Record number of professionals on assignment
  • Double-digit year-over-year growth across all lines of business
  • Adjusted EBITDA margin of 11.1%
  • Launched Intellify, our proprietary Vendor Management System for Managed Service Programs (MSPs)
  • Rise in demand throughout the quarter, especially for travel assignments
  • $50.0 million optional prepayment on the term loan

“Our second quarter 2022 results reflect continued strong performance that showcases our ongoing success in leveraging technology and our deep relationships to efficiently place professionals across the healthcare continuum. We are emerging from the pandemic as a fundamentally different company, with a comprehensive suite of technologies that position us for long-term, sustained growth across all lines of business,” said John Martins, President and Chief Executive Officer of Cross Country Healthcare. He continued, “We remain committed to our investments in people and technology, and we see a strong demand from both existing and new MSP clients setting up a solid runway for continued growth.”

Second quarter consolidated revenue was $753.6 million, an increase of 127% year-over-year and a decrease of 4% sequentially. Consolidated gross profit margin was 22.6%, up 70 basis points year-over-year and up 40 basis points sequentially. Net income attributable to common stockholders was $52.9 million compared to $11.5 million in the prior year and $62.0 million in the prior quarter. Diluted earnings per share (EPS) was $1.40 compared to $0.31 in the prior year and $1.63 in the prior quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $83.5 million or 11.1% of revenue, as compared with $24.3 million or 7.3% of revenue in the prior year, and $97.4 million or 12.3% of revenue in the prior quarter. Adjusted EPS was $1.40 compared to $0.47 in the prior year and $1.70 in the prior quarter.

For the six months ended June 30, 2022, consolidated revenue was $1.5 billion, an increase of 133% year-over-year. Consolidated gross profit margin was 22.4%, up 60 basis points year-over-year. Net income attributable to common stockholders was $114.9 million, or $3.03 per diluted share, compared to $31.0 million, or $0.84 per diluted share, in the prior year. Adjusted EBITDA was $180.9 million or 11.7% of revenue, as compared with $51.0 million or 7.7% of revenue in the prior year. Adjusted EPS was $3.10 compared to $1.05 in the prior year.

Quarterly Business Segment Highlights

Nurse and Allied Staffing

Revenue was $731.4 million, an increase of 131% year-over-year and a decrease of 4% sequentially. Contribution income was $97.6 million, an increase compared to $35.3 million in the prior year and a decrease compared to $110.1 million in the prior quarter. Average field contract personnel on a full-time equivalent (FTE) basis were 13,494 as compared with 7,578 in the prior year and 13,454 in the prior quarter. Revenue per FTE per day was $591 compared to $454 in the prior year and $628 in the prior quarter. The increase in the average number of FTEs was primarily due to headcount growth in travel nurse and allied, as well as the year-over-year additional headcount resulting from the Workforce Solutions Group (WSG) acquisition in June 2021. In the second quarter of 2022, average bill rates were down in the mid-single digits as expected, but volumes were stronger as we continued to experience high demand across a wide range of specialties spanning the healthcare continuum. A spike in professionals on assignment and volume growth primarily drove the year-over-year revenue improvement.

Physician Staffing

Revenue was $22.1 million, an increase of 41% year-over-year and a decrease of 4% sequentially. Contribution income was $1.2 million, an increase compared to $0.6 million in the prior year and a decrease compared to $1.8 million in the prior quarter. Total days filled were 12,416 as compared with 9,775 in the prior year and 13,068 in the prior quarter. Revenue per day filled was $1,781 as compared with $1,600 in the prior year and $1,772 in the prior quarter. The year-over-year increase in revenue was primarily due to an increase in volume in primary care physicians and certified registered nurse anesthetists. The year-over-year increase in contribution income was driven by higher revenue, partially offset by higher direct costs.

Cash Flow and Balance Sheet Highlights

Cash flow provided by operations for the quarter was $18.1 million, primarily due to the strong net income growth, partly offset by an increase in accounts receivable. Days' sales outstanding, net of amounts owed to subcontractors, was 66 days as of June 30, 2022, up 10 days year-over-year and up 4 days sequentially, primarily due to the timing of revenue recognized throughout the quarter. For the six months ended June 30, 2022, cash flow used in operations was $10.9 million compared to $9.4 million in the prior year.

Given positive cash from operations, the Company made a $50.0 million optional prepayment on its Subordinated Term Loan to reduce interest costs. At June 30, 2022, the Company had $0.3 million in cash and cash equivalents and $123.9 million principal balance on its term loan, with $85.0 million of borrowings drawn under its ABL facility, and $17.5 million of letters of credit outstanding. As of June 30, 2022, borrowing base availability under the ABL was $300.0 million, with $197.5 million of excess availability.

Outlook for Third Quarter 2022

The guidance below applies to management’s expectations for the third quarter of 2022.

 

Q3 2022 Range

 

Year-over-Year

 

Sequential

Change

 

Change

 

 

 

 

 

 

Revenue

$605 million - $615 million

 

61% - 64%

 

(20)% - (18)%

 

 

 

 

 

 

Gross Profit Margin*

22.3% - 22.8%

 

(10) bps - 40 bps

 

(30) bps - 20 bps

 

 

 

 

 

 

Adjusted EBITDA*

$55.0 million - $60.0 million

 

83% - 99%

 

(34)% - (28)%

 

 

 

 

 

 

Adjusted EPS*

$0.85 - $0.95

 

$0.24 - $0.34

 

($0.55) - ($0.45)

* Refer to discussion of non-GAAP financial measures 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.

See accompanying non-GAAP financial measures and tables below.

INVITATION TO CONFERENCE CALL

The Company will hold its quarterly conference call on Wednesday, August 3, 2022, at 5:00 P.M. Eastern Time to discuss its second quarter 2022 financial results. This call will be webcast live and can be accessed at the Company’s website at ir.crosscountryhealthcare.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 August 3rd through August 17th on the Company’s website and a replay of the conference call will be available by telephone by calling 800-814-6746 from anywhere in the U.S. or 203-369-3827 from non-U.S. locations - Passcode: 8322.

ABOUT CROSS COUNTRY HEALTHCARE

Cross Country Healthcare, Inc. is a leading tech-enabled workforce solutions and advisory firm with 36 years of industry experience and insight. We solve complex labor-related challenges for customers while providing high-quality outcomes and exceptional patient care. As a multi-year Best of Staffing® award winner, we are committed to an exceptionally high level of service to our clients and our homecare, education, and clinical and non-clinical healthcare professionals. Our locum tenens line of business, Cross Country Locums, has been certified by the National Committee for Quality Assurance (NCQA), the leader in healthcare accreditation, since 2001. We are the first publicly traded staffing firm to obtain The Joint Commission Certification, which we still hold with a Letter of Distinction. Cross Country Healthcare is rated as the top staffing and recruiting employer for women by InHerSights, and CertifiedTM by Great Place to Work®. For two consecutive years, we have received the Top Workplaces USA award and were recently recognized as a recipient of the Top Workplaces Award for Innovation and Leadership by Energage. We have a history of investing in diversity, equality, and inclusion as a key component of the organization’s overall corporate social responsibility program, closely aligned with its core values to create a better future for its people, communities, and its stockholders.

Copies of this and other news releases and additional information about the Company can be obtained online at ir.crosscountryhealthcare.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 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 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, 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", "could", 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: the potential impacts of the COVID-19 pandemic on our business, financial condition, and results of operations, 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 potential liabilities, losses, or other exposures in connection with the WSG acquisition, 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 Companys Annual Report on Form 10-K for the year ended December 31, 2021, and in our 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 managements 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, and/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 "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

 

 

Six Months Ended

 

June 30,

 

June 30,

 

March 31,

 

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

 

2022

 

2021

 

 

 

 

 

 

 

Revenue from services

$

753,561

 

 

$

331,827

 

 

$

788,732

 

 

 

$

1,542,293

 

 

$

661,068

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

Direct operating expenses

 

583,156

 

 

 

259,237

 

 

 

613,938

 

 

 

 

1,197,094

 

 

 

517,013

 

Selling, general and administrative expenses

 

86,009

 

 

 

50,344

 

 

 

76,813

 

 

 

 

162,822

 

 

 

96,671

 

Bad debt expense

 

3,192

 

 

 

466

 

 

 

2,369

 

 

 

 

5,561

 

 

 

970

 

Depreciation and amortization

 

3,481

 

 

 

2,199

 

 

 

2,719

 

 

 

 

6,200

 

 

 

4,452

 

Acquisition and integration-related costs

 

 

 

 

924

 

 

 

40

 

 

 

 

40

 

 

 

924

 

Restructuring (benefits) costs

 

(1,114

)

 

 

835

 

 

 

480

 

 

 

 

(634

)

 

 

2,073

 

Impairment charges

 

 

 

 

1,921

 

 

 

1,741

 

 

 

 

1,741

 

 

 

2,070

 

Total operating expenses

 

674,724

 

 

 

315,926

 

 

 

698,100

 

 

 

 

1,372,824

 

 

 

624,173

 

Income from operations

 

78,837

 

 

 

15,901

 

 

 

90,632

 

 

 

 

169,469

 

 

 

36,895

 

Other expenses (income):

 

 

 

 

 

 

 

 

 

 

Interest expense

 

3,857

 

 

 

1,196

 

 

 

3,521

 

 

 

 

7,378

 

 

 

1,867

 

Loss on early extinguishment of debt

 

1,912

 

 

 

 

 

 

 

 

 

 

1,912

 

 

 

 

Other income, net

 

(1,084

)

 

 

(204

)

 

 

(8

)

 

 

 

(1,092

)

 

 

(241

)

Income before income taxes

 

74,152

 

 

 

14,909

 

 

 

87,119

 

 

 

 

161,271

 

 

 

35,269

 

Income tax expense

 

21,258

 

 

 

3,361

 

 

 

25,136

 

 

 

 

46,394

 

 

 

4,273

 

Net income attributable to common stockholders

$

52,894

 

 

$

11,548

 

 

$

61,983

 

 

 

$

114,877

 

 

$

30,996

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders - Basic

$

1.41

 

 

$

0.32

 

 

$

1.67

 

 

 

$

3.08

 

 

$

0.85

 

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders - Diluted

$

1.40

 

 

$

0.31

 

 

$

1.63

 

 

 

$

3.03

 

 

$

0.84

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

Basic

 

37,471

 

 

 

36,625

 

 

 

37,028

 

 

 

 

37,251

 

 

 

36,404

 

Diluted

 

37,757

 

 

 

37,203

 

 

 

37,973

 

 

 

 

37,866

 

 

 

37,120

 

 

 

 

 

 

 

 

 

 

 

 

Cross Country Healthcare, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited, amounts in thousands, except per share data)

 

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

June 30,

 

2022

 

 

2021

 

 

2022

 

 

2022

 

2021

Adjusted EBITDA:a

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

52,894

 

 

 

$

11,548

 

 

 

$

61,983

 

 

 

$

114,877

 

 

$

30,996

 

Interest expense

 

3,857

 

 

 

 

1,196

 

 

 

 

3,521

 

 

 

 

7,378

 

 

 

1,867

 

Income tax expenseb

 

21,258

 

 

 

 

3,361

 

 

 

 

25,136

 

 

 

 

46,394

 

 

 

4,273

 

Depreciation and amortization

 

3,481

 

 

 

 

2,199

 

 

 

 

2,719

 

 

 

 

6,200

 

 

 

4,452

 

Acquisition and integration-related costsc

 

 

 

 

 

924

 

 

 

 

40

 

 

 

 

40

 

 

 

924

 

Restructuring (benefits) costsd

 

(1,114

)

 

 

 

835

 

 

 

 

480

 

 

 

 

(634

)

 

 

2,073

 

Legal settlements and feese

 

 

 

 

 

28

 

 

 

 

 

 

 

 

 

 

 

403

 

Impairment chargesf

 

 

 

 

 

1,921

 

 

 

 

1,741

 

 

 

 

1,741

 

 

 

2,070

 

Loss on disposal of fixed assets

 

6

 

 

 

 

 

 

 

 

19

 

 

 

 

25

 

 

 

 

Loss on early extinguishment of debtg

 

1,912

 

 

 

 

 

 

 

 

 

 

 

 

1,912

 

 

 

 

Gain on lease terminationh

 

(1,064

)

 

 

 

(197

)

 

 

 

(21

)

 

 

 

(1,085

)

 

 

(224

)

Other income, net

 

(26

)

 

 

 

(7

)

 

 

 

(6

)

 

 

 

(32

)

 

 

(17

)

Equity compensation

 

2,114

 

 

 

 

2,137

 

 

 

 

1,601

 

 

 

 

3,715

 

 

 

3,486

 

Applicant tracking system costsi

 

172

 

 

 

 

315

 

 

 

 

195

 

 

 

 

367

 

 

 

690

 

Adjusted EBITDAa

$

83,490

 

 

 

$

24,260

 

 

 

$

97,408

 

 

 

$

180,898

 

 

$

50,993

 

Adjusted EBITDA margina

 

11.1

%

 

 

 

7.3

%

 

 

 

12.3

%

 

 

 

11.7

%

 

 

7.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS:j

 

 

 

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

52,894

 

 

 

$

11,548

 

 

 

$

61,983

 

 

 

$

114,877

 

 

$

30,996

 

Non-GAAP adjustments - pretax:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration-related costsc

 

 

 

 

 

924

 

 

 

 

40

 

 

 

 

40

 

 

 

924

 

Restructuring (benefits) costsd

 

(1,114

)

 

 

 

835

 

 

 

 

480

 

 

 

 

(634

)

 

 

2,073

 

Legal settlements and feese

 

 

 

 

 

28

 

 

 

 

 

 

 

 

 

 

 

403

 

Impairment chargesf

 

 

 

 

 

1,921

 

 

 

 

1,741

 

 

 

 

1,741

 

 

 

2,070

 

Applicant tracking system costsi

 

172

 

 

 

 

315

 

 

 

 

195

 

 

 

 

367

 

 

 

690

 

Loss on early extinguishment of debtg

 

1,912

 

 

 

 

 

 

 

 

 

 

 

 

1,912

 

 

 

 

Nonrecurring income tax adjustmentsk

 

 

 

 

 

1,942

 

 

 

 

 

 

 

 

 

 

 

1,942

 

Tax impact of non-GAAP adjustments

 

(1,061

)

 

 

 

(11

)

 

 

 

184

 

 

 

 

(878

)

 

 

(12

)

Adjusted net income attributable to common stockholders - non-GAAP

$

52,803

 

 

 

$

17,502

 

 

 

$

64,623

 

 

 

$

117,425

 

 

$

39,086

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic, GAAP

 

37,471

 

 

 

 

36,625

 

 

 

 

37,028

 

 

 

 

37,251

 

 

 

36,404

 

Dilutive impact of share-based payments

 

286

 

 

 

 

578

 

 

 

 

945

 

 

 

 

615

 

 

 

716

 

Adjusted weighted average common shares - diluted, non-GAAP

 

37,757

 

 

 

 

37,203

 

 

 

 

37,973

 

 

 

 

37,866

 

 

 

37,120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation:

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS, GAAP

$

1.40

 

 

 

$

0.31

 

 

 

$

1.63

 

 

 

$

3.03

 

 

$

0.84

 

Non-GAAP adjustments - pretax:

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration-related costsc

 

 

 

 

 

0.03

 

 

 

 

 

 

 

 

 

 

 

0.03

 

Restructuring (benefits) costsd

 

(0.03

)

 

 

 

0.02

 

 

 

 

0.01

 

 

 

 

(0.02

)

 

 

0.05

 

Legal settlements and feese

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

0.01

 

Impairment chargesf

 

 

 

 

 

0.05

 

 

 

 

0.05

 

 

 

 

0.05

 

 

 

0.05

 

Applicant tracking system costsi

 

 

 

 

 

0.01

 

 

 

 

0.01

 

 

 

 

0.01

 

 

 

0.02

 

Loss on early extinguishment of debtg

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

0.05

 

 

 

 

Nonrecurring income tax adjustmentsk

 

 

 

 

 

0.05

 

 

 

 

 

 

 

 

 

 

 

0.05

 

Tax impact of non-GAAP adjustments

 

(0.02

)

 

 

 

 

 

 

 

 

 

 

 

(0.02

)

 

 

 

Adjusted EPS, non-GAAPj

$

1.40

 

 

 

$

0.47

 

 

 

$

1.70

 

 

 

$

3.10

 

 

1.05 

 

Cross Country Healthcare, Inc.

Consolidated Balance Sheets

(Unaudited, amounts in thousands)

 

 

June 30,

 

 

December 31,

 

2022

 

 

2021

 

 

 

 

 

Assets

 

 

 

 

Current assets:

 

 

 

 

Cash and cash equivalents

$

279

 

 

 

$

1,036

 

Accounts receivable, net

 

701,926

 

 

 

 

493,910

 

Prepaid expenses

 

6,774

 

 

 

 

7,648

 

Insurance recovery receivable

 

5,750

 

 

 

 

5,041

 

Other current assets

 

3,594

 

 

 

 

638

 

Total current assets

 

718,323

 

 

 

 

508,273

 

Property and equipment, net

 

18,241

 

 

 

 

15,833

 

Operating lease right-of-use assets

 

5,058

 

 

 

 

7,488

 

Goodwill

 

113,360

 

 

 

 

119,490

 

Trade names, indefinite-lived

 

5,900

 

 

 

 

5,900

 

Other intangible assets, net

 

42,863

 

 

 

 

42,344

 

Non-current deferred tax assets

 

8,096

 

 

 

 

11,525

 

Other non-current assets

 

27,120

 

 

 

 

21,956

 

Total assets

$

938,961

 

 

 

$

732,809

 

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

 

Current liabilities:

 

 

 

 

Accounts payable and accrued expenses

$

189,805

 

 

 

$

109,753

 

Accrued compensation and benefits

 

65,409

 

 

 

 

65,580

 

Current portion of debt

 

 

 

 

 

4,176

 

Operating lease liabilities - current

 

4,145

 

 

 

 

4,090

 

Income tax payable

 

30

 

 

 

 

7,307

 

Current portion of earnout liability

 

7,500

 

 

 

 

7,500

 

Other current liabilities

 

1,769

 

 

 

 

1,364

 

Total current liabilities

 

268,658

 

 

 

 

199,770

 

Long-term debt, less current portion

 

205,376

 

 

 

 

176,366

 

Operating lease liabilities - non-current

 

7,017

 

 

 

 

10,853

 

Non-current deferred tax liabilities

 

222

 

 

 

 

190

 

Long-term accrued claims

 

26,869

 

 

 

 

25,314

 

Non-current earnout liability

 

7,500

 

 

 

 

9,000

 

Other long-term liabilities

 

12,508

 

 

 

 

13,788

 

Total liabilities

 

528,150

 

 

 

 

435,281

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

 

Common stock

 

4

 

 

 

 

4

 

Additional paid-in capital

 

320,000

 

 

 

 

321,552

 

Accumulated other comprehensive loss

 

(1,335

)

 

 

 

(1,293

)

Retained earnings (accumulated deficit)

 

92,142

 

 

 

 

(22,735

)

Total stockholders' equity

 

410,811

 

 

 

 

297,528

 

Total liabilities and stockholders' equity

$

938,961

 

 

 

732,809 

 

Cross Country Healthcare, Inc.

Segment Datal

(Unaudited, amounts in thousands)

 

 

Three Months Ended

 

Year-over-Year

 

Sequential

 

June 30,

 

% of

 

June 30,

 

% of

 

March 31,

 

% of

 

% change

 

% change

 

2022

 

Total

 

2021

 

Total

 

2022

 

Total

 

Fav (Unfav)

 

Fav (Unfav)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from services:

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

731,443

 

97

%

 

$

316,188

95

%

 

$

765,580

97

%

 

131

%

 

(4

)%

Physician Staffing

 

22,118

 

3

%

 

 

15,639

5

%

 

 

23,152

3

%

 

41

%

 

(4

)%

 

$

753,561

 

100

%

 

$

331,827

100

%

 

$

788,732

100

%

 

127

%

 

(4

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution income:m

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

97,567

 

 

 

$

35,284

 

 

$

110,101

 

 

177

%

 

(11

)%

Physician Staffing

 

1,220

 

 

 

 

562

 

 

 

1,765

 

 

117

%

 

(31

)%

 

 

98,787

 

 

 

 

35,846

 

 

 

111,866

 

 

176

%

 

(12

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate overheadn

 

17,583

 

 

 

 

14,066

 

 

 

16,254

 

 

(25

)%

 

(8

)%

Depreciation and amortization

 

3,481

 

 

 

 

2,199

 

 

 

2,719

 

 

(58

)%

 

(28

)%

Acquisition and integration-related costsc

 

 

 

 

 

924

 

 

 

40

 

 

100

%

 

100

%

Restructuring (benefits) costsd

 

(1,114

)

 

 

 

835

 

 

 

480

 

 

233

%

 

332

%

Impairment chargesf

 

 

 

 

 

1,921

 

 

 

1,741

 

 

100

%

 

100

%

Income from operations

$

78,837

 

 

 

$

15,901

 

 

$

90,632

 

 

396

%

 

(13

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

Year-over-Year

 

 

 

June 30,

 

% of

 

June 30,

 

% of

 

 

 

% change

 

 

 

2022

 

Total

 

2021

 

Total

 

 

Fav (Unfav)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from services:

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

1,497,023

 

97

%

 

$

629,196

95

%

 

 

 

 

138

%

 

 

Physician Staffing

 

45,270

 

3

%

 

 

31,872

5

%

 

 

 

 

42

%

 

 

 

$

1,542,293

 

100

%

 

$

661,068

100

%

 

 

 

 

133

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution income:m

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

207,668

 

 

 

$

72,701

 

 

 

 

 

186

%

 

 

Physician Staffing

 

2,985

 

 

 

 

1,990

 

 

 

 

 

50

%

 

 

 

 

210,653

 

 

 

 

74,691

 

 

 

 

 

182

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate overheadn

 

33,837

 

 

 

 

28,277

 

 

 

 

 

(20

)%

 

 

Depreciation and amortization

 

6,200

 

 

 

 

4,452

 

 

 

 

 

(39

)%

 

 

Acquisition and integration-related costsc

 

40

 

 

 

 

924

 

 

 

 

 

96

%

 

 

Restructuring (benefits) costsd

 

(634

)

 

 

 

2,073

 

 

 

 

 

131

%

 

 

Impairment chargesf

 

1,741

 

 

 

 

2,070

 

 

 

 

 

16

%

 

 

Income from operations

$

169,469

 

 

 

$

36,895

 

 

 

 

 

359

%

 

 

 

Cross Country Healthcare, Inc.

Summary Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

June 30,

 

2022

 

 

2021

 

 

2022

 

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by (used in) operating activities

$

18,141

 

 

 

$

15,505

 

 

 

$

(29,038

)

 

 

$

(10,897

)

 

$

(9,422

)

Net cash used in investing activities

 

(1,752

)

 

 

 

(26,286

)

 

 

 

(2,096

)

 

 

 

(3,848

)

 

 

(27,472

)

Net cash (used in) provided by financing activities

 

(17,321

)

 

 

 

15,434

 

 

 

 

31,308

 

 

 

 

13,987

 

 

 

53,438

 

Effect of exchange rate changes on cash

 

3

 

 

 

 

(14

)

 

 

 

(2

)

 

 

 

1

 

 

 

(17

)

Change in cash and cash equivalents

 

(929

)

 

 

 

4,639

 

 

 

 

172

 

 

 

 

(757

)

 

 

16,527

 

Cash and cash equivalents at beginning of period

 

1,208

 

 

 

 

13,488

 

 

 

 

1,036

 

 

 

 

1,036

 

 

 

1,600

 

Cash and cash equivalents at end of period

$

279

 

 

 

$

18,127

 

 

 

$

1,208

 

 

 

$

279

 

 

$

18,127

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cross Country Healthcare, Inc.

Other Financial Data

(Unaudited)

 

 

Three Months Ended

 

 

Six Months Ended

 

June 30,

 

 

June 30,

 

 

March 31,

 

 

June 30,

 

June 30,

 

2022

 

 

2021

 

 

2022

 

 

2022

 

2021

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated gross profit margino

 

22.6

%

 

 

 

21.9

%

 

 

 

22.2

%

 

 

 

22.4

%

 

 

21.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing statistical data:

 

 

 

 

 

 

 

 

 

 

 

 

FTEsp

 

13,494

 

 

 

 

7,578

 

 

 

 

13,454

 

 

 

 

13,474

 

 

 

7,096

 

Average Nurse and Allied Staffing revenue per FTE per dayq

$

591

 

 

 

$

454

 

 

 

$

628

 

 

 

$

609

 

 

$

486

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Physician Staffing statistical data:

 

 

 

 

 

 

 

 

 

 

 

 

Days filledr

 

12,416

 

 

 

 

9,775

 

 

 

 

13,068

 

 

 

 

25,484

 

 

 

19,244

 

Revenue per day filleds

$

1,781

 

 

 

$

1,600

 

 

 

$

1,772

 

 

 

$

1,776

 

 

$

1,656

 

(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 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 applicant tracking system costs. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to 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)

The Company released the majority of its valuation allowance on deferred tax assets as of December 31, 2021, resulting in increased income tax expense in 2022.

(c)

Acquisition and integration-related costs include costs for legal and advisory fees for the Workforce Solutions Group (WSG) acquisition that closed on June 8, 2021.

(d)

Restructuring (benefits) costs are primarily comprised of employee termination costs, lease-related exit costs, and reorganization costs as part of planned cost savings initiatives. Amounts for the three and six months ended June 30, 2022 include a benefit associated with the early termination of one of the Company's corporate offices which was previously restructured.

(e)

Legal settlements and fees include 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 three and six months ended June 30, 2021, we incurred legal fees related to various legal matters outside the normal course of operations.

(f)

Impairment charges for the six months ended June 30, 2022 was comprised of $1.7 million related to right-of-use assets and related property in connection with leases that were vacated. Impairment charges for the six months ended June 30, 2021 was comprised of $1.9 million related to right-of-use assets and related property in connection with leases that were vacated during the second quarter and $0.1 million related to the write-off of a discontinued software development project.

(g)

Loss on early extinguishment of debt for the three and six months ended June 30, 2022 consists of a prepayment premium and the write-off of debt issuance costs related to the optional prepayment on our term loan made in the second quarter of 2022.

(h)

The gain on lease termination for the three and six months ended June 20, 2022 is a result of the early termination of one of the Company's corporate offices, recognized in the second quarter of 2022.

(i)

Applicant tracking system costs are related to the Company's project to replace its legacy system supporting its travel nurse staffing business. These costs are reported in selling, general and administrative expenses on the consolidated statement of operations and included in corporate overhead in segment data.

(j)

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 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, applicant tracking system costs, and nonrecurring income tax adjustments. Adjusted EPS 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.

(k)

Non-recurring income tax adjustment for the three and six months ended June 30, 2021 reflects a valuation allowance related to a state rate change as a result of the WSG acquisition.

(l)

Segment data provided is in accordance with the Segment Reporting Topic of the FASB ASC.

(m)

Contribution income is defined as income (loss) from operations before depreciation and amortization, acquisition and integration-related 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.

(n)

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).

(o)

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.

(p)

FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.

(q)

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.

(r)

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.

(s)

Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented.

 

Cross Country Healthcare, Inc.
William J. Burns, Executive Vice President & Chief Financial Officer
561-237-2555
wburns@crosscountry.com

Source: Cross Country Healthcare, Inc.