AMN HEALTHCARE SERVICES, INC. SAN DIEGO, Nov. 2, 2017 /PRNewswire/ -- AMN Healthcare Services, Inc. (NYSE: AMN), healthcare's leader and innovator in workforce solutions and staffing services, today announced its third quarter 2017 financial results. Financial highlights are as follows:
Dollars in millions, except per share amounts.
Q3 2017 % Change YTD Sept. % Change
Q3 2016 30, 2017 YTD Sept.
30, 2016
--------
Revenue $494.4 5% $1,479.4 5%
------- ------ --- -------- ---
Gross
profit $159.5 3% $482.3 5%
------- ------ --- ------ ---
Net
income $28.1 3% $91.4 15%
------- ----- --- ----- ---
Diluted
EPS $0.57 4% $1.85 15%
------- ----- --- ----- ---
Adj.
diluted
EPS* $0.63 2% $1.93 6%
-------- ----- --- ----- ---
Adjusted
EBITDA* $61.7 6% $192.0 9%
-------- ----- --- ------ ---
* 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.
Highlights
-- AMN's workforce solutions leadership position continues to grow, with
significant new MSP relationships added.
-- Nurse and Allied grew revenue 6% year over year.
-- Locum Tenens returned to growth with revenue rising 3% year over year.
-- Operating cash flow of $26 million in the quarter and $96 million year
to date.
-- Repurchased 177,143 shares in the quarter for $7 million, with an
average price per share of $38.18.
"Superior service and a comprehensive suite of workforce solutions continue to differentiate AMN Healthcare and deliver incremental value for healthcare organizations during a time of significant transformation. Our healthcare clients benefit from AMN solutions for hiring great talent, maintaining greater flexibility, using analytics for insight, and ensuring quality patient care," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "I am proud of our team's execution in delivering another quarter of solid performance."
"Market conditions support continued growth, which is bolstered by gains in MSP and other strategic offerings. Key long-term trends remain in our favor and are expected to increase clients' need for innovative workforce solutions. These factors give us confidence that AMN Healthcare can maintain or improve revenue growth in 2018," added Ms. Salka.
Third Quarter 2017 Results
Consolidated revenue for the quarter was $494 million, a 5% increase over prior year and 1% higher than the second quarter of 2017. We estimate that less than $2 million of revenue was lost in the quarter due to disruptions associated with the hurricanes.
Revenue for the Nurse and Allied Solutions segment was $303 million, higher by 6% year over year and up 1% sequentially. The Travel Nurse division continued to perform well, with revenue up 5% year over year and flat sequentially. Allied division revenue increased 6% year over year and was down slightly sequentially.
Locum Tenens Solutions segment revenue was $111 million, up 3% both year-over-year and on a sequential basis. Other Workforce Solutions segment revenue was $80 million, reflecting an increase of 4% year over year and down 1% sequentially, with year-over-year growth driven by the VMS and interim leadership businesses, partially offset by declines in the permanent placement businesses.
Gross margin was 32.3%, lower by 40 basis points year over year and 60 basis points sequentially. The year-over-year gross margin decline was due primarily to higher physician pay rates in Locum Tenens and and lower permanent placement fees. The sequential gross margin decline was driven primarily by higher health insurance costs and lower permanent placement fees.
SG&A expenses were $101 million, or 20.3% of revenue, compared to $100 million, or 21.2% of revenue, in the same quarter last year. Expenses as a percentage of revenue decreased year over year due to improved operating leverage. SG&A was $97 million, or 19.7% of revenue, in the previous quarter, including a $4 million favorable professional liability actuarial adjustment.
Net income was $28 million, or $0.57 per diluted share, compared to $27 million, or $0.55 per diluted share, in the same quarter last year. Excluding amortization of intangible assets, acquisition and integration costs, net of tax, adjusted net income per diluted share was $0.63. Adjusted EBITDA was $62 million, a year-over-year increase of 6%. Adjusted EBITDA margin was 12.5%, representing a 20 basis point increase year-over-year and 120 basis point decline on a sequential basis.
At September 30, 2017, cash and cash equivalents totaled $20 million. For the quarter ended September 30, 2017, cash flow from operations was $26 million and capital expenditures were $5 million. The Company ended the quarter with total debt outstanding of $325 million, with a leverage ratio as calculated in accordance with the Company's credit agreement of 1.3 to 1.
During the third quarter of 2017, the Company repurchased 177,143 shares of our common stock at an average price of $38.18 per share, resulting in an aggregate purchase price of $7 million. Since the November 2016 inception of our $150 million share repurchase plan, a total of 629,896 shares have been repurchased at an average price of $32.29, with a total of purchase price of $20 million.
Fourth-Quarter 2017 Outlook
Metric Guidance*
------ --------
Consolidated revenue $498 - $504 M
-------------------- -------------
Gross margin 32.0%
------------ ----
SG&A as percentage of revenue 20.0%
----------------------------- ----
Adjusted EBITDA margin 12.0-12.5%
---------------------- ---------
*Note: Guidance percentage metrics
are approximate. For a
reconciliation of adjusted EBITDA
margin, see the table entitled
"Reconciliation of Guidance
Adjusted EBITDA Margin to Guidance
Operating Margin" below.
On an as-reported basis, the projected year-over-year growth rate is 2-3%. Excluding any labor disruption revenue, the fourth quarter is expected to reflect year-over-year growth of approximately 5%. The hurricanes are expected to have a negative revenue impact of less than $2 million. The expected sequential decrease in gross margin reflects the normal seasonal margin decline in the Nurse and Allied segment and an unfavorable segment mix shift. Travel Nurse Staffing, our largest business, is expected to grow revenue 6-7% year over year with strong sequential growth of 4-5%.
Conference Call on November 2, 2017
AMN Healthcare Services, Inc. (NYSE: AMN), healthcare's leader and innovator in workforce solutions and staffing services, will host a conference call to discuss its third quarter 2017 financial results on Thursday, November 2, 2017 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. Alternatively, a telephonic replay of the call will be available starting at 7:30 p.m. Eastern Time on November 2, 2017, and can be accessed until 11:59 p.m. Eastern Time on November 16, 2017 by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 431402.
About AMN Healthcare
AMN Healthcare is the leader and innovator in healthcare workforce solutions and staffing services to healthcare facilities across the nation. The Company provides unparalleled access to the most comprehensive network of quality healthcare professionals through its innovative recruitment strategies and breadth of career opportunities. With insights and expertise, AMN Healthcare helps providers optimize their workforce to successfully reduce complexity, increase efficiency and improve patient outcomes. AMN delivers managed services programs, healthcare executive search solutions, vendor management systems, recruitment process outsourcing, predictive modeling, medical coding and consulting, and other services. 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.
The Company's common stock is listed on the New York Stock Exchange under the symbol "AMN." For more information about AMN Healthcare, visit www.amnhealthcare.com, where the Company posts news releases, investor presentations, webcasts, SEC filings and other material information. The Company also utilizes email alerts and Really Simple Syndication ("RSS") as routine channels to supplement distribution of this information. To register for email alerts and RSS, visit http://amnhealthcare.investorroom.com/emailalerts.
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 measures and may be different from non-GAAP measures, or may be calculated differently than other similarly titled 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" and the footnotes thereto 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. Forward-looking statements include, among others, statements concerning our future financial performance, our guidance for fourth quarter 2017 revenue, gross margin, SG&A expenses as a percentage of revenue, adjusted EBITDA margin, increases in clients' need for innovative workforce solutions and our ability to maintain or improve revenue growth in 2018. The Company bases 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 our fillings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2016, our subsequent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated and the Company is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.
Contact:
Randle Reece
Director, 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,
------------- -------------
2017 2016 2017 2017 2016
---- ---- ---- ---- ----
Revenue $494,406 $472,636 $489,803 $1,479,378 $1,414,367
Cost of revenue 334,867 318,169 328,791 997,051 953,249
------- ------- ------- ------- -------
Gross profit 159,539 154,467 161,012 482,327 461,118
------- ------- ------- ------- -------
Gross margin 32.3% 32.7% 32.9% 32.6% 32.6%
Operating expenses:
Selling, general and
administrative (SG&A) 100,579 99,995 96,673 299,325 297,359
SG&A as a % of revenue 20.3% 21.2% 19.7% 20.2% 21.0%
Depreciation and
amortization 8,132 7,789 7,959 23,759 21,888
----- ----- ----- ------ ------
Total operating
expenses 108,711 107,784 104,632 323,084 319,247
------- ------- ------- ------- -------
Income from operations 50,828 46,683 56,380 159,243 141,871
Operating margin (1) 10.3% 9.9% 11.5% 10.8% 10.0%
Interest expense, net,
and other 4,837 3,016 4,928 14,895 9,065
----- ----- ----- ------ -----
Income before income
taxes 45,991 43,667 51,452 144,348 132,806
Income tax expense 17,863 16,371 20,197 52,957 53,319
------ ------ ------ ------ ------
Net income $28,128 $27,296 $31,255 $91,391 $79,487
======= ======= ======= ======= =======
Net income as a % of
revenue 5.7% 5.8% 6.4% 6.2% 5.6%
Other comprehensive income (loss):
Foreign currency
translation and other (73) 40 (41) (111) 165
Cash flow hedge, net of
income taxes ?? 231 (58) (15) (343)
--- --- --- --- ----
Other comprehensive
income (loss) (73) 271 (99) (126) (178)
Comprehensive income $28,055 $27,567 $31,156 $91,265 $79,309
======= ======= ======= ======= =======
Net income per common share:
Basic $0.59 $0.57 $0.65 $1.91 $1.66
===== ===== ===== ===== =====
Diluted $0.57 $0.55 $0.63 $1.85 $1.61
===== ===== ===== ===== =====
Weighted average common shares outstanding:
Basic 47,912 48,049 47,916 47,870 47,993
====== ====== ====== ====== ======
Diluted 49,445 49,410 49,475 49,480 49,287
====== ====== ====== ====== ======
AMN Healthcare Services, Inc.
Supplemental Financial and Operating Data
(dollars in thousands, except per share data and operating data)
(unaudited)
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
-------------- -------- -------------
2017 2016 2017 2017 2016
Revenue
Nurse and allied
solutions $302,933 $286,810 300,727 917,183 877,197
Locum tenens solutions 111,415 108,553 108,215 322,473 320,420
Other workforce solutions 80,058 77,273 80,861 239,722 216,750
$494,406 $472,636 489,803 1,479,378 1,414,367
Reconciliation of Non-GAAP Items:
Segment operating income (2)
Nurse and allied
solutions $40,807 $37,396 47,851 134,638 118,517
Locum tenens solutions 14,438 14,026 12,371 39,028 43,634
Other workforce solutions 19,890 20,867 22,041 61,788 56,311
75,135 72,289 82,263 235,454 218,462
Unallocated corporate overhead 13,438 14,235 15,080 43,409 42,460
------ ------ ------ ------ ------
Adjusted EBITDA (3) 61,697 58,054 67,183 192,045 176,002
Adjusted EBITDA margin (4) 12.5% 12.3% 13.7% 13.0% 12.4%
Depreciation and amortization 8,132 7,789 7,959 23,759 21,888
Share-based compensation 2,477 2,704 2,562 7,720 8,795
Acquisition and integration costs 260 878 282 1,323 3,448
--- --- --- ----- -----
Income from operations 50,828 46,683 56,380 159,243 141,871
Interest expense, net, and other 4,837 3,016 4,928 14,895 9,065
----- ----- ----- ------ -----
Income before income taxes 45,991 43,667 51,452 144,348 132,806
Income tax expense 17,863 16,371 20,197 52,957 53,319
------ ------ ------ ------ ------
Net income $28,128 $27,296 31,255 91,391 79,487
GAAP diluted net
income per share
(EPS) $0.57 $0.55 0.63 1.85 1.61
Adjustments:
Amortization of intangible assets 0.09 0.09 0.09 0.28 0.28
Acquisition and integration costs 0.01 0.02 0.01 0.03 0.07
Tax effect on above adjustments (0.04) (0.04) (0.04) (0.12) (0.14)
Excess tax benefits (5) 0.00 0.00 (0.02) (0.11) 0.00
Adjusted diluted EPS
(6) $0.63 $0.62 0.67 1.93 1.82
Three Months Ended Nine Months Ended
------------------ -----------------
September 30, June 30, September 30,
------------- -------- -------------
2017 2016 2017 2017 2016
Gross Margin
Nurse and allied solutions 27.3% 26.7% 27.8% 27.6% 26.7%
Locum tenens solutions 30.1% 31.2% 30.0% 30.2% 31.2%
Other workforce solutions 54.1% 56.7% 55.7% 54.9% 58.6%
Operating Data:
---------------
Nurse and allied solutions
Average healthcare professionals on assignment
(7) 8,817 8,458 8,776 8,881 8,423
Locum tenens solutions
Days filled (8) 58,881 59,612 58,660 172,784 178,846
Revenue per day filled (9) $1,892 $1,821 $1,845 $1,866 $1,792
As of September 30, As of June 30,
------------------- --------------
2017 2016 2017
Leverage ratio (10) 1.3 1.7 1.4
AMN Healthcare Services, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
(unaudited)
September 30, June 30, December 31,
2017 2017 2016
---- ---- ----
Assets
Current assets:
Cash and cash
equivalents $19,625 $22,878 $10,622
Accounts receivable, net 343,596 334,597 341,977
Accounts receivable,
subcontractor 37,200 36,631 49,233
Prepaid and other
current assets 42,052 46,938 48,796
------ ------ ------
Total current assets 442,473 441,044 450,628
Restricted cash, cash
equivalents 34,380 33,882 31,287
and investments
Fixed assets, net 68,188 65,368 59,954
Other assets 73,962 71,594 57,534
Goodwill 340,596 340,596 341,754
Intangible assets, net 231,791 236,486 245,724
------- ------- -------
Total assets $1,191,390 $1,188,970 $1,186,881
========== ========== ==========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable and
accrued expenses $117,934 $118,943 $137,512
Accrued compensation and
benefits 111,984 107,283 107,993
Current portion of notes
payable, less
unamortized fees ?? 18,071 3,750
Deferred revenue 9,609 9,644 8,924
Other current
liabilities 5,440 12,387 16,611
----- ------ ------
Total current
liabilities 244,967 266,328 274,790
Notes payable, less
unamortized fees 319,652 319,462 359,192
Deferred income taxes,
net 11,899 12,387 21,420
Other long-term
liabilities 82,673 82,301 82,096
------ ------ ------
Total liabilities 659,191 680,478 737,498
Commitments and contingencies
Stockholders' equity 532,199 508,492 449,383
------- ------- -------
Total liabilities and
stockholders' equity $1,191,390 $1,188,970 $1,186,881
========== ========== ==========
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,
------------- -------------
2017 2016 2017 2017 2016
---- ---- ---- ---- ----
Net cash
provided by
operating
activities $25,594 $29,540 $18,474 $96,382 $84,820
Net cash used
in investing
activities (3,823) (8,117) (6,320) (23,444) (241,271)
Net cash
provided by
(used in)
financing
activities (24,951) (26,817) (26,945) (63,824) 162,418
Effect of
exchange
rates on cash (73) 40 (42) (111) 165
--- --- --- ---- ---
Net increase
(decrease) in
cash and cash
equivalents (3,253) (5,354) (14,833) 9,003 6,132
Cash and cash
equivalents
at beginning
of period 22,878 21,062 37,711 10,622 9,576
------ ------ ------ ------ -----
Cash and cash
equivalents
at end of
period $19,625 $15,708 $22,878 $19,625 $15,708
======= ======= ======= ======= =======
AMN Healthcare Services, Inc.
Additional Supplemental Non-GAAP Disclosures
Reconciliation of Guidance Adjusted EBITDA Margin to
Guidance Operating Margin
(unaudited)
Three Months Ending
-------------------
December 31, 2017
-----------------
Low(11) High(11)
------ -------
Adjusted EBITDA margin 12.0% 12.5%
Deduct:
Share-based compensation 0.5%
EBITDA margin 11.5% 12.0%
---- ----
Depreciation and amortization 1.7%
Operating margin 9.8% 10.3%
=== ====
(1) Operating margin represents income from
operations divided by revenue.
(2) 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.
(3) 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
the Company's credit agreement and the
indenture governing our 5.125% Senior
Notes due 2024. 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.
(4) Adjusted EBITDA margin represents
adjusted EBITDA divided by revenue.
(5) The consolidated effective tax rate for
the three and nine months ended
September 30, 2017 was favorably
affected by the recording of excess tax
benefits relating to equity awards
vested and exercised during the period.
As a result of the adoption of a new
accounting pronouncement on January 1,
2017, we no longer record excess tax
benefits as an increase to additional
paid-in capital, but record such
excess tax benefits on a prospective
basis as a reduction of income tax
expense, which amounted to $56,000 and
$5,381,000 for the three and nine
months ended September 30, 2017,
respectively. Since the majority of our
equity awards vest during the first
quarter of the year, we do not
anticipate the recording of additional
excess tax benefits of this magnitude
for the reminder of the year. The
magnitude of the impact of excess tax
benefits generated in the future, which
may be favorable or unfavorable, is
dependent upon the Company's future
grants of share-based compensation,
the Company's future stock price on the
date awards vest or exercise in
relation to the fair value of the
awards on the grant date or the
exercise behavior of the Company's
stock appreciation rights holders.
Since these favorable tax benefits are
largely unrelated to our current year's
income before taxes and is
unrepresentative of our normal
effective tax rate, we excluded their
impact on adjusted diluted EPS for the
three and nine months ended September
30, 2017.
(6) Adjusted diluted EPS represents GAAP
diluted EPS excluding the impact of (A)
amortization of intangible assets, (B)
acquisition and integration costs, (C)
tax effect, if any, of the foregoing
adjustments, and (D) excess tax
benefits relating to equity awards
vested and exercised since January 1,
2017. 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 comparison 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.
(7) Average healthcare professionals on
assignment represents the average
number of nurse and allied healthcare
professionals on assignment during the
period presented.
(8) Days filled is calculated by dividing
the locum tenens hours filled during
the period by eight hours.
(9) Revenue per day filled represents
revenue of the Company's locum tenens
solutions segment divided by days
filled for the period presented.
(10) Leverage ratio represents the ratio of
the consolidated funded indebtedness
(as calculated per the Company's credit
agreement) at the end of the subject
period to the consolidated adjusted
EBITDA (as calculated per the Company's
credit agreement) for the twelve-month
period ended at the end of the subject
period.
(11) Guidance percentage metrics are
approximate.
View original content:http://www.prnewswire.com/news-releases/amn-healthcare-announces-third-quarter-2017-results-300548860.html
SOURCE AMN Healthcare Services, Inc.
