AMN HEALTHCARE SERVICES, INC. SAN DIEGO, Oct. 30, 2014 /PRNewswire/ -- AMN Healthcare Services, Inc. (NYSE: AHS), healthcare's innovator in workforce solutions and staffing services, today announced third quarter 2014 financial results exceeded the Company's guidance for revenue. Third quarter financial highlights are as follows:
Dollars in millions, except per share amounts.
Q3 2014 % Change YTD % Change YTD
September 30, September 30,
Q3 2013 2014 2013
------- ---- ----
Revenue $264.6 3% $756.4 (1%)
------- ------ --- ------ ---
Gross
profit $80.3 6% $231.4 4%
------- ----- --- ------ ---
Net
income $8.5 (1%) $23.3 (5%)
------- ---- --- ----- ---
Diluted
EPS $0.18 0% $0.49 (4%)
------- ----- --- ----- ---
Adjusted
Diluted
EPS* N/A N/A $0.53 2%
-------- --- --- ----- ---
Adjusted
EBITDA* $21.8 1% $66.2 3%
-------- ----- --- ----- ---
* See "Non-GAAP Measures" below
for a discussion of our use of
non-GAAP items and the table
entitled "Supplemental Financial
and Operating Data" for a
reconciliation of non-GAAP items.
-- Consolidated revenue exceeded expectations due to year-over-year and
sequential growth across all business segments.
-- The travel nurse business (excluding EMR staffing) experienced revenue
growth of 13% year-over-year, driven by continued higher demand trends
and solid execution.
-- Gross margin of 30.4% represented a year-over-year improvement of 100
basis points.
"All segments experienced stronger market trends, resulting in better than anticipated revenue growth in the third quarter. The continued strengthening in travel nurse and allied demand is expected to fuel volume growth in the future. These trends, combined with new MSP clients and expansions, have bolstered our leadership position in workforce solutions and give us a positive outlook going into the new year," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "To ensure the delivery of a best-in-class client and clinician experience, we continue to make long-term strategic investments to innovate our workforce solution offerings and our recruitment and infrastructure technologies."
Third Quarter 2014 Results
For the third quarter of 2014 consolidated revenue was $265 million, an increase of 3% from the same quarter last year and an increase of 5% sequentially. Third quarter revenue for the Nurse and Allied Healthcare Staffing segment was $174 million, up 2% from the same quarter last year and 5% sequentially. Locum Tenens Staffing segment revenue in the third quarter was $79 million, an increase of 5% from the same quarter last year and 6% sequentially. Third quarter Physician Permanent Placement Services segment revenue was $11 million, an increase of 5% from the same quarter last year and 7% sequentially.
Third quarter gross margin of 30.4% was 100 basis points higher than the same quarter last year and 40 basis points lower sequentially. The year-over-year increase was due to gross margin improvements in our Nurse and Allied Healthcare Staffing and Physician Permanent Placement Services segments. The sequential decrease was due primarily to an unfavorable workers' compensation actuarial adjustment recorded in the third quarter.
SG&A expenses for the third quarter were $60 million, representing 22.8% of revenue, compared to $56 million in both the same quarter last year and the prior quarter. The year-over-year increase in SG&A expenses was due to the inclusion of ShiftWise, which was acquired in November of last year, higher expenses associated with our information technology initiatives, and higher expenses to support our current demand and future growth initiatives. The sequential increase in SG&A expenses was due primarily to a favorable professional liability actuarial adjustment recorded in the second quarter, increased commission and bonus expenses associated with higher revenue, and other expenses to support growth.
Third quarter net income was $8 million and net income per diluted share was $0.18. Third quarter adjusted EBITDA was $22 million, compared to $22 million in the same quarter last year and $23 million in the prior quarter. Adjusted EBITDA margin of 8.2% was 20 basis points lower than the same quarter last year and 110 basis points lower sequentially. The year-over-year decrease was due primarily to the unfavorable workers' compensation actuarial adjustment recorded in the third quarter of 2014, and the sequential decrease was due primarily to that same adjustment as well as a favorable professional liability adjustment in the second quarter of 2014.
At September 30, 2014, cash and cash equivalents totaled $10 million. Third quarter cash flow provided by operations was $15 million and capital expenditures were $4 million. The Company ended the quarter with total debt outstanding of $146 million, with a leverage ratio of 1.7 to 1.
Business Trends and Outlook
The Company expects consolidated fourth quarter 2014 revenue of $265 million to $269 million. Gross margin is expected to be seasonally lower at approximately 30.0%. SG&A expenses as a percentage of revenue are expected to be approximately 22.5%. Adjusted EBITDA margin is expected to be between 8.0% and 8.5%.
About AMN Healthcare
AMN Healthcare is the innovator in healthcare workforce solutions and staffing services to healthcare facilities across the nation. AMN Healthcare's workforce solutions - including managed services programs, vendor management systems, and recruitment process outsourcing - enable providers to successfully reduce complexity, increase efficiency and improve patient outcomes within the rapidly evolving healthcare environment. The Company provides unparalleled access to the most comprehensive network of quality healthcare professionals through its innovative recruitment strategies and breadth of career opportunities. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, and many other healthcare settings. AMN Healthcare disseminates news and information about the Company through its website, which can be found at www.amnhealthcare.com.
Conference Call on October 30, 2014
AMN Healthcare Services, Inc.'s third quarter 2014 conference call will be held on Thursday, October 30, 2014, at 5:00 p.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare's website at http://amnhealthcare.investorroom.com/presentations. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (800) 288-8975 in the U.S. or (612) 332-0228 internationally. Following the conclusion of the call, a replay of the webcast will be available at the Company's website. A telephonic replay of the call will be available at 7:30 p.m. Eastern Time on October 30, 2014, and can be accessed until 11:59 p.m. Eastern Time on November 13, 2014, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 338051.
Non-GAAP Measures
This earnings release contains certain non-GAAP financial information, which the Company provides as additional information, and not as an alternative, to the Company's condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures include (1) adjusted EBITDA, (2) adjusted EBITDA margin, and (3) adjusted diluted EPS. The Company provides such non-GAAP financial measures because management believes that they are useful both to management and investors as a supplement, and not as a substitute, when evaluating the Company's operating performance. Additionally, management believes that adjusted EBITDA and adjusted EBITDA margin serve as industry-wide financial measures, and it uses adjusted EBITDA for making financial decisions and allocating resources. The non-GAAP measures in this release are not in accordance with, or an alternative to, GAAP, and may be different from non-GAAP measures, or may be calculated differently than other similarly title captioned non-GAAP measures, reported by other companies. They should not be used in isolation to evaluate the Company's performance. A reconciliation of non-GAAP measures identified in this release, along with further detail about the use and limitations of certain of these non-GAAP measures, may be found below in the table entitled Supplemental Financial and Operating Data under the caption entitled "Reconciliation of Non-GAAP Items" or on the Company's website at http://amnhealthcare.investorroom.com/financialreports. Additionally, from time to time, additional information regarding non-GAAP financial measures, including pro forma measures, may be made available on the Company's website.
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include expectations regarding future volume growth and 2014 fourth quarter revenue, gross margin, SG&A expenses and adjusted EBITDA margin. The Company based these forward-looking statements on its current expectations, estimates and projections about future events and the industry in which it operates using information currently available to it. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may," "estimates," variations of such words and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements contained in this press release are set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2013 and its other periodic reports as well as the Company's current and other reports filed from time to time with the Securities and Exchange Commission. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.
Contact:
Amy C. Chang
Vice President, Investor Relations
866.861.3229
AMN Healthcare Services, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------------
2014 2013 2014 2014 2013
---- ---- ---- ---- ----
Revenue $264,584 $257,095 $250,913 $756,378 $763,158
Cost of revenue 184,278 181,428 173,754 524,957 540,071
------- ------- ------- ------- -------
Gross profit 80,306 75,667 77,159 231,421 223,087
------ ------ ------ ------- -------
30.4% 29.4% 30.8% 30.6% 29.2%
Operating expenses:
Selling, general and
administrative 60,319 55,605 55,567 170,553 163,763
22.8% 21.6% 22.1% 22.5% 21.5%
Depreciation and
amortization 4,086 3,317 4,010 11,916 9,847
----- ----- ----- ------ -----
Total operating expenses 64,405 58,922 59,577 182,469 173,610
------ ------ ------ ------- -------
Income from operations 15,901 16,745 17,582 48,952 49,477
Interest expense, net, and
other 1,433 1,840 4,629 7,908 7,829
----- ----- ----- ----- -----
Income before income taxes 14,468 14,905 12,953 41,044 41,648
Income tax expense 5,969 6,290 5,760 17,722 17,071
----- ----- ----- ------ ------
Net income $8,499 $8,615 $7,193 $23,322 $24,577
====== ====== ====== ======= =======
Other comprehensive income
(loss) 75 (84) (37) 29 (19)
--- --- --- --- ---
Comprehensive income $8,574 $8,531 $7,156 $23,351 $24,558
====== ====== ====== ======= =======
Net income per common share:
Basic $0.18 $0.19 $0.15 $0.50 $0.53
===== ===== ===== ===== =====
Diluted $0.18 $0.18 $0.15 $0.49 $0.51
===== ===== ===== ===== =====
Weighted average common shares outstanding:
Basic 46,546 45,986 46,479 46,460 45,947
====== ====== ====== ====== ======
Diluted 48,122 47,810 47,836 47,959 47,776
====== ====== ====== ====== ======
AMN Healthcare Services, Inc.
Supplemental Financial and Operating Data
(dollars in thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
-------------- -------- -------------
2014 2013 2014 2014 2013
Revenue
Nurse and allied healthcare staffing $174,292 $170,955 $165,894 $503,636 $517,858
Locum tenens staffing 78,816 75,253 74,309 219,996 213,417
Physician permanent placement services 11,476 10,887 10,710 32,746 31,883
$264,584 $257,095 $250,913 $756,378 $763,158
Reconciliation of Non-GAAP Items:
Segment operating income (1)
Nurse and allied healthcare staffing $21,279 $20,392 $22,032 $63,283 $62,994
Locum tenens staffing 8,139 7,547 7,818 22,830 17,347
Physician permanent placement services 2,756 2,205 2,187 7,074 6,735
32,174 30,144 32,037 93,187 87,076
Unallocated corporate overhead 10,396 8,595 8,694 26,958 23,085
------ ----- ----- ------ ------
Adjusted EBITDA (2) 21,778 21,549 23,343 66,229 63,991
Adjusted EBITDA margin (3) 8.2% 8.4% 9.3% 8.8% 8.4%
Depreciation and amortization 4,086 3,317 4,010 11,916 9,847
Share-based compensation 1,791 1,487 1,751 5,361 4,667
Interest expense, net, and other 1,433 1,840 4,629 7,908 7,829
----- ----- ----- ----- -----
Income before income taxes 14,468 14,905 12,953 41,044 41,648
Income tax expense 5,969 6,290 5,760 17,722 17,071
----- ----- ----- ------ ------
Net income $8,499 $8,615 $7,193 $23,322 $24,577
GAAP based diluted net income per share (EPS) $0.18 $0.18 $0.15 $0.49 $0.51
Adjustments:
Loss on debt extinguishment 0.00 0.00 0.04 0.04 0.01
Adjusted diluted EPS (4) N/A N/A $0.19 $0.53 $0.52
=== === ===== ===== =====
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
2014 2013 2014 2014 2013
Gross Margin
Nurse and
allied
healthcare
staffing 28.7% 27.4% 29.1% 28.9% 27.4%
Locum tenens
staffing 29.0% 29.3% 29.8% 29.5% 28.8%
Physician
permanent
placement
services 64.9% 62.6% 63.5% 63.8% 62.6%
Operating
Data:
---------
Nurse and
allied
healthcare
staffing
Average
clinicians on
assignment
(5) 5,632 5,771 5,565 5,610 5,970
Locum tenens
staffing
Days filled
(6) 49,982 50,993 49,049 143,780 146,477
As of September 30, As of June 30,
------------------- --------------
2014 2013 2014
Leverage Ratio
(7) 1.7 1.9 1.9
AMN Healthcare Services, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
September 30, June 30, December 31,
2014 2014 2013 (8)
---- ---- -------
Assets
Current assets:
Cash and cash equivalents $9,663 $5,501 $15,580
Accounts receivable, net 164,078 151,505 147,477
Accounts receivable,
subcontractor 21,569 22,512 18,271
Deferred income taxes,
net 24,970 27,983 24,938
Prepaid and other current
assets 28,844 27,662 26,631
------ ------ ------
Total current assets 249,124 235,163 232,897
Restricted cash, cash
equivalents and
investments 21,012 20,606 23,115
Fixed assets, net 29,202 27,066 21,158
Other assets 40,045 37,502 32,279
Goodwill 144,937 144,937 144,642
Intangible assets, net 144,498 146,418 150,197
------- ------- -------
Total assets $628,818 $611,692 $604,288
======== ======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and
accrued expenses $66,949 $65,130 $71,081
Accrued compensation and
benefits 64,574 56,046 55,949
Revolving credit facility 0 6,500 10,000
Current portion of notes
payable 7,500 7,500 0
Other current liabilities 8,746 4,097 6,060
----- ----- -----
Total current liabilities 147,769 139,273 143,090
Notes payable, net of
discount 138,750 140,625 148,672
Other long-term
liabilities 96,881 98,188 94,784
------ ------ ------
Total liabilities 383,400 378,086 386,546
Commitments and contingencies
Stockholders' equity 245,418 233,606 217,742
------- ------- -------
Total liabilities and
stockholders' equity $628,818 $611,692 $604,288
======== ======== ========
AMN Healthcare Services, Inc.
Summary Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------------
2014 2013 (8) 2014 2014 2013 (8)
---- ------- ---- ---- -------
Net cash
provided by
operating
activities $15,489 $27,092 $6,159 $22,639 $44,349
Net cash used
in investing
activities (4,511) (1,018) (1,100) (10,320) (7,050)
Net cash used
in financing
activities (6,891) (4,856) (8,790) (18,265) (11,308)
Effect of
exchange
rates on cash 75 (84) (37) 29 (19)
--- --- --- --- ---
Net increase
(decrease) in
cash and cash
equivalents 4,162 21,134 (3,768) (5,917) 25,972
Cash and cash equivalents at beginning of
period
5,501 10,519 9,269 15,580 5,681
----- ------ ----- ------ -----
Cash and cash equivalents at end of period
$9,663 $31,653 $5,501 $9,663 $31,653
====== ======= ====== ====== =======
(1) Segment operating income represents net
income plus interest expense (net of
interest income) and other, income
taxes, depreciation and amortization,
unallocated corporate overhead and
share-based compensation expense.
(2) Adjusted EBITDA represents net income
plus interest expense (net of interest
income) and other, income taxes,
depreciation and amortization and
share-based compensation expense.
Management believes that adjusted
EBITDA provides an effective measure
of the Company's results, as it
excludes certain items that management
believes are not indicative of the
Company's operating performance and
considers measures used in credit
facilities. Adjusted EBITDA is not
intended to represent cash flows for
the period, nor has it been presented
as an alternative to income from
operations or net income as an
indicator of operating performance.
Although management believes that some
of the items excluded from adjusted
EBITDA are not indicative of the
Company's operating performance, these
items do impact the statement of
comprehensive income, and management
therefore utilizes adjusted EBITDA as
an operating performance measure in
conjunction with GAAP measures such as
net income.
(3) Adjusted EBITDA margin represents
adjusted EBITDA divided by revenue.
(4) Adjusted diluted EPS represents GAAP
diluted EPS excluding the impact of
loss on debt extinguishment of $3,113
and $434 for the nine months ended
September 30, 2014 and 2013,
respectively, and $3,113 for the three
months ended June 30, 2014. Management
believes such a measure provides a
picture of the Company's results that
is more comparable among periods since
it excludes the impact of items that
may recur occasionally, but tend to be
irregular as to timing, thereby
distorting comparisons between
periods. However, investors should
note that this non-GAAP measure
involves judgment by management (in
particular, judgment as to what is
classified as a special item to be
excluded from adjusted EPS). Although
management believes the item excluded
from adjusted EPS is not indicative of
the Company's operating performance,
this item does impact the statement of
comprehensive income, and management
therefore utilizes adjusted EPS as an
operating performance measure in
conjunction with GAAP measures such as
GAAP EPS.
(5) Average clinicians on assignment
represents the average number of nurse
and allied healthcare professionals on
assignment during the period
presented.
(6) Days filled is calculated by dividing
the locum tenens hours filled during
the period by eight hours.
(7) Leverage ratio represents the ratio of
the consolidated funded indebtedness
(as calculated per the Company's
credit agreement) at the end of the
period to the consolidated adjusted
EBITDA (as calculated per the
Company's credit agreement) for the
last twelve months.
(8) Certain reclassifications have been
made to the prior periods'
consolidated financial statements to
conform to the current year
presentation.
SOURCE AMN Healthcare Services, Inc.
