AMN HEALTHCARE SERVICES, INC. SAN DIEGO, Nov. 4, 2015 /PRNewswire/ -- AMN Healthcare Services, Inc. (NYSE: AHS), healthcare's leader and innovator in workforce solutions and staffing services, today announced third quarter 2015 financial results that exceeded the Company's guidance for revenue and adjusted EBITDA. Third quarter financial highlights are as follows:
Dollars in millions, except per share amounts.
Q3 2015 % Change YTD September 30, 2015 % Change YTD September 30, 2014
Q3 2014
-------
Revenue $382.9 45% $1,060.5 40%
------- ------ --- -------- ---
Gross profit $126.0 57% $337.6 46%
------------ ------ --- ------ ---
Net income $33.6 296% $61.7 165%
---------- ----- --- ----- ---
Diluted EPS $0.69 283% $1.27 159%
----------- ----- --- ----- ---
Adjusted diluted
EPS* $0.48 140% $1.17 95%
---------------- ----- --- ----- ---
Adjusted EBITDA* $45.6 109% $118.3 79%
--------------- ----- --- ------ ---
* 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.
-- Demand continues at historic high levels, driving strong organic growth
in all business segments.
-- Consolidated revenue increased 45% year-over-year, driven by organic
growth of 29% and the remainder from acquisitions.
-- Gross margin of 32.9% represented an improvement of 250 basis points
year-over-year and 150 basis points from the prior quarter.
-- Adjusted EBITDA margin of 11.9% reflected a 370 basis point
year-over-year improvement, driven by both gross margin expansion and
operating leverage.
-- Adjusted diluted EPS of $0.48 grew 140% year-over-year.
-- AMN Healthcare's differentiated strategy and focus on delivering a
diverse portfolio of innovative workforce solutions and staffing
services continues to drive industry leading performance.
"The AMN Healthcare team continues to deliver exceptional service and results to our clients amidst a strong demand environment, resulting in better than anticipated revenue and profitability growth in the third quarter," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "In addition to our focus on organic growth, we continue to expand AMN's capabilities, including our most recent acquisitions of The First String and Millican Solutions, which further bolster our physician executive and nurse leadership recruitment capabilities. With a continuing robust demand outlook in all of our business segments, we remain focused on delivering superior value to our clients and healthcare professionals through continued expansion of our innovative workforce solutions and recruitment strategies."
Third Quarter 2015 Results
For the third quarter of 2015, consolidated revenue was $383 million, an increase of 45% from the same quarter last year and 9% sequentially. Third quarter revenue for the Nurse and Allied Healthcare Staffing segment was $266 million, up 53% from the same quarter last year and 11% sequentially. Locum Tenens Staffing segment revenue in the third quarter was $102 million, an increase of 29% from the same quarter last year and up 4% sequentially. Third quarter Physician Permanent Placement Services segment revenue was $15 million, an increase of 29% from the same quarter last year and up 16% sequentially.
Third quarter gross margin of 32.9% was higher by 250 basis points than the same quarter last year and higher by 150 basis points sequentially. The year-over-year and sequential gross margin improvements were driven primarily by an increased revenue mix of our higher-margin workforce solutions businesses, along with a gross margin increase in the Locum Tenens Staffing segment.
SG&A expenses for the third quarter were $83 million, representing 21.7% of revenue, compared to 22.8% in the same quarter last year and 21.3% in the prior quarter. The improvement from the prior year was due to operating leverage on the revenue growth. The decline from the prior quarter was due to the prior quarter including a $3 million favorable professional liability adjustment.
Third quarter net income was $34 million and net income per diluted share was $0.69. Tax expense in the quarter included a $12 million favorable reversal of tax reserves. Excluding this tax adjustment, amortization of intangible assets, and acquisition and integration costs incurred during the quarter, adjusted net income per diluted share was $0.48. Third quarter adjusted EBITDA was $46 million, a year-over-year increase of 109% and sequential increase of 16%. Third quarter adjusted EBITDA margin of 11.9% represented a 370 basis point increase year-over-year and 70 basis point increase sequentially.
At September 30, 2015, cash and cash equivalents totaled $14 million. Third quarter cash flow from operations was $22 million and capital expenditures were $7 million. The Company ended the third quarter with total debt outstanding of $214 million, with a leverage ratio of 1.5 to 1.
Business Trends and Outlook
The Company expects consolidated fourth quarter 2015 revenue of $385 to $390 million, reflecting continuing strong demand trends, slightly offset by normal seasonal declines in some businesses. Gross margin is expected to be approximately 32.0%. SG&A expenses as a percentage of revenue are expected to be approximately 21.5% to 22.0%. Adjusted EBITDA margin is expected to be approximately 10.5% to 11.0%.
About AMN Healthcare
AMN Healthcare is the leader and 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, recruitment process outsourcing and consulting services - 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 November 5, 2015
AMN Healthcare Services, Inc.'s third quarter 2015 conference call will be held on Thursday, November 5, 2015, 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) 230-1059 in the U.S. or (612) 234-9959 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 November 5, 2015, and can be accessed until 11:59 p.m. Eastern Time on November 19, 2015, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 370640.
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, adjusted EBITDA margin and adjusted diluted EPS serve as industry-wide financial measures. The Company 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 fourth quarter 2015 strong demand trends, 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, 2014 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,
------------- -------------
2015 2014 2015 2015 2014
---- ---- ---- ---- ----
Revenue $382,859 $264,584 $350,144 $1,060,513 $756,378
Cost of revenue 256,850 184,278 240,026 722,954 524,957
------- ------- ------- ------- -------
Gross profit 126,009 80,306 110,118 337,559 231,421
------- ------ ------- ------- -------
32.9% 30.4% 31.4% 31.8% 30.6%
Operating expenses:
Selling, general and
administrative 83,098 60,319 74,727 229,377 170,553
21.7% 22.8% 21.3% 21.6% 22.5%
Depreciation and
amortization 5,304 4,086 5,232 15,631 11,916
----- ----- ----- ------ ------
Total operating
expenses 88,402 64,405 79,959 245,008 182,469
------ ------ ------ ------- -------
Income from operations 37,607 15,901 30,159 92,551 48,952
Interest expense, net,
and other 2,013 1,433 1,977 5,797 7,908
----- ----- ----- ----- -----
Income before income
taxes 35,594 14,468 28,182 86,754 41,044
Income tax expense 1,947 5,969 12,312 25,028 17,722
----- ----- ------ ------ ------
Net income $33,647 $8,499 $15,870 $61,726 $23,322
======= ====== ======= ======= =======
Other comprehensive income (loss):
Foreign currency
translation 54 75 (80) 42 29
Unrealized gain (loss)
on cash flow hedge,
net of income taxes (367) 0 36 (331) 0
---- --- --- ---- ---
Other comprehensive
income (loss) (313) 75 (44) (289) 29
Comprehensive income $33,334 $8,574 $15,826 $61,437 $23,351
======= ====== ======= ======= =======
Net income per common share:
Basic $0.71 $0.18 $0.33 $1.30 $0.50
===== ===== ===== ===== =====
Diluted $0.69 $0.18 $0.32 $1.27 $0.49
===== ===== ===== ===== =====
Weighted average common shares outstanding:
Basic 47,674 46,546 47,573 47,466 46,460
====== ====== ====== ====== ======
Diluted 48,978 48,122 48,863 48,737 47,959
====== ====== ====== ====== ======
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,
-------------- -------- -------------
2015 2014 2015 2015 2014
Revenue
Nurse and allied healthcare staffing $266,279 $174,292 $240,016 $735,341 $503,636
Locum tenens staffing 101,755 78,816 97,388 285,835 219,996
Physician permanent placement services 14,825 11,476 12,740 39,337 32,746
$382,859 $264,584 $350,144 $1,060,513 $756,378
Reconciliation of Non-GAAP Items:
Segment operating income (1)
Nurse and allied healthcare staffing $40,873 $21,279 $35,395 $108,169 $63,283
Locum tenens staffing 13,321 8,139 11,711 34,142 22,830
Physician permanent placement services 4,555 2,756 3,277 11,103 7,074
58,749 32,174 50,383 153,414 93,187
Unallocated corporate overhead 13,127 10,396 11,006 35,093 26,958
------ ------ ------ ------ ------
Adjusted EBITDA (2) 45,622 21,778 39,377 118,321 66,229
Adjusted EBITDA margin (3) 11.9% 8.2% 11.2% 11.2% 8.8%
Depreciation and amortization 5,304 4,086 5,232 15,631 11,916
Share-based compensation 2,021 1,791 2,153 6,551 5,361
Acquisition and integration costs 690 0 1,833 3,588 0
Interest expense, net, and other 2,013 1,433 1,977 5,797 7,908
----- ----- ----- ----- -----
Income before income taxes 35,594 14,468 28,182 86,754 41,044
Income tax expense 1,947 5,969 12,312 25,028 17,722
----- ----- ------ ------ ------
Net income $33,647 $8,499 $15,870 $61,726 $23,322
GAAP diluted net income per share (EPS) $0.69 $0.18 $0.32 $1.27 $0.49
Adjustments (net of tax):
Debt extinguishment costs 0.00 0.00 0.00 0.00 0.04
Amortization of intangible assets 0.03 0.02 0.04 0.11 0.07
Acquistion and integration costs 0.01 0.00 0.02 0.04 0.00
Income tax benefits (0.25) 0.00 0.00 (0.25) 0.00
Adjusted diluted EPS (4) $0.48 $0.20 $0.38 $1.17 $0.60
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
2015 2014 2015 2015 2014
Gross Margin
Nurse and allied
healthcare
staffing 32.0% 28.7% 30.7% 30.9% 28.9%
Locum tenens
staffing 30.7% 29.0% 29.2% 29.8% 29.5%
Physician
permanent
placement
services 65.4% 64.9% 63.1% 64.8% 63.8%
Operating Data:
---------------
Nurse and allied
healthcare
staffing
Average healthcare
professionals on
assignment (5) 7,574 5,632 7,277 7,341 5,610
Locum tenens
staffing
Days filled (6) 59,267 49,982 59,844 173,371 143,780
As of September 30, As of June 30,
------------------- --------------
2015 2014 2015
Leverage ratio (7) 1.5 1.7 1.9
AMN Healthcare Services, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
September 30, June 30, December 31,
2015 2015 2014
---- ---- ----
Assets
Current assets:
Cash and cash equivalents $14,408 $14,474 $13,073
Accounts receivable, net 248,779 229,999 186,274
Accounts receivable,
subcontractor 49,521 36,909 28,443
Deferred income taxes,
net 18,378 27,362 27,330
Prepaid and other current
assets 37,895 34,624 27,550
------ ------ ------
Total current assets 368,981 343,368 282,670
Restricted cash, cash
equivalents and
investments 25,425 21,698 19,567
Fixed assets, net 45,407 41,621 32,880
Other assets 46,634 45,210 39,895
Goodwill 201,444 197,325 154,387
Intangible assets, net 177,347 176,930 152,517
------- ------- -------
Total assets $865,238 $826,152 $681,916
======== ======== ========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and
accrued expenses $113,152 $101,578 $78,993
Accrued compensation and
benefits 88,492 76,581 67,995
Current portion of
revolving credit
facility 30,000 30,000 18,000
Current portion of notes
payable 7,500 7,500 7,500
Deferred revenue 4,944 5,505 3,177
Other current liabilities 6,026 10,466 2,630
----- ------ -----
Total current liabilities 250,114 231,630 178,295
Revolving credit facility 45,500 55,500 0
Notes payable 131,250 133,125 136,875
Deferred income taxes,
net 39,000 37,221 32,491
Other long-term
liabilities 75,409 80,638 77,674
------ ------ ------
Total liabilities 541,273 538,114 425,335
Commitments and contingencies
Stockholders' equity 323,965 288,038 256,581
------- ------- -------
Total liabilities and
stockholders' equity $865,238 $826,152 $681,916
======== ======== ========
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,
------------- -------------
2015 2014 (8) 2015 2015 2014 (8)
---- ------- ---- ---- -------
Net cash
provided by
operating
activities $21,950 $15,452 $25,000 $55,637 $22,493
Net cash used
in investing
activities (10,768) (4,511) (9,516) (105,634) (10,320)
Net cash
provided by
(used in)
financing
activities (11,302) (6,854) (12,563) 51,290 (18,119)
Effect of
exchange
rates on cash 54 75 (80) 42 29
--- --- --- --- ---
Net increase
(decrease) in
cash and cash
equivalents (66) 4,162 2,841 1,335 (5,917)
Cash and cash
equivalents
at beginning
of period 14,474 5,501 11,633 13,073 15,580
------ ----- ------ ------ ------
Cash and cash
equivalents
at end of
period $14,408 $9,663 $14,474 $14,408 $9,663
======= ====== ======= ======= ======
(1) Segment operating income represents net
income plus interest expense (net of
interest income) and other, income tax
expense, depreciation and
amortization, unallocated corporate
overhead, acquisition and integration
costs and share-based compensation.
(2) Adjusted EBITDA represents net income
plus interest expense (net of interest
income) and other, income tax expense,
depreciation and amortization,
acquisition and integration costs and
share-based compensation. 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 is a measure 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 1)
amortization of intangible assets; 2)
acquisition and integration costs; and
3) other non-recurring costs, such as
debt extinguishment costs and income
tax benefits in connection with the
reversal of reserves for uncertain tax
positions, in each case, net of tax.
Adjusted diluted EPS for the three and
nine months ended September 30, 2014
have been restated to conform to the
current year presentation. Management
included this non-GAAP measure to
provide investors and prospective
investors with an alternative method
for assessing the Company's operating
results in a manner that is focused on
its operating performance and to
provide a more consistent basis for
comparision between periods. However,
investors and prospective 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
diluted EPS). Although management
believes the items excluded from
adjusted diluted EPS are not
indicative of the Company's operating
performance, these items do impact the
statement of comprehensive income, and
management therefore utilizes adjusted
diluted EPS as an operating
performance measure in conjunction
with GAAP measures such as GAAP
diluted EPS.
(5) Average healthcare professionals 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 condensed consolidated
statements of cash flows for the three
and nine months ended September 30,
2014 to conform to the current year
presentation.
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SOURCE AMN Healthcare Services, Inc.
