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AMN Healthcare Announces Second Quarter 2009 Results
Date:8/6/2009

SAN DIEGO, Aug. 6 /PRNewswire-FirstCall/ -- AMN Healthcare Services, Inc. (NYSE: AHS) today announced operating results for the second quarter 2009, which were in line with management's expectations. Financial highlights for the three months ended June 30, 2009 include:

                                                % Chg     % Chg
                                  Q2 2009      Q2 2008   Q1 2009
    ------------------------------------------------------------
    Revenue                    $199 million      (36%)     (20%)
    ------------------------------------------------------------
    Net Income                   $4 million      (49%)      NM
    ------------------------------------------------------------
    Diluted EPS                       $0.13      (48%)      NM
    ------------------------------------------------------------
    Cash Flow from Operations   $36 million       206%      (3%)
    ------------------------------------------------------------
    Adjusted EBITDA*            $18 million      (27%)       3%
    ------------------------------------------------------------
    Adjusted Diluted EPS*             $0.17      (32%)      55%
    ------------------------------------------------------------

    * See "Supplemental Financial and Operating Data" for a reconciliation of
      non-GAAP items.

    NM - Not meaningful

"Our focus on client relationships and quality as well as our diversified service offerings have enabled AMN Healthcare to maintain our leading market position, improve gross margins and strengthen our balance sheet through the prolonged economic downturn," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "We continue to take an aggressive and disciplined approach in streamlining and right-sizing our infrastructure, enabling us to adjust to short-term volume trends, while operating with an improved cost structure going forward. At the same time, we are also maintaining our long-term strategy of investing in our future through progress with new service lines."

Key business highlights include:

  • Strong market leadership position, with stable pricing and gross margins across service lines;
  • Signs of stabilization and improvement in Nursing and Allied orders;
  • Progress in new market expansion areas of Emergency Medicine Physician staffing, Home Health Nurse and Allied staffing, and Recruitment Process Outsourcing;
  • Significant debt reduction and increased cash that position the company to capture additional market opportunities for future growth;
  • Cost structure improvements and more streamlined infrastructure for improved profitability as the market rebounds.

For the second quarter of 2009, revenue for the Nurse and Allied staffing segment was $111 million, a decrease of 48% from the same quarter last year and 32% sequentially. The Locum Tenens staffing segment generated revenue of $79 million, a decrease of 6% from the same quarter last year and an increase of 6% sequentially.

Gross margin in the second quarter of 2009 was 27.0%, an increase of 140 bps as compared to 25.6% for the previous quarter and an increase of 60 bps as compared to 26.4% for the same quarter last year. The year over year and sequential increase mainly reflected a shift in business mix and tight management of direct costs.

Selling, general and administrative ("SG&A") expenses (excluding restructuring costs) for the second quarter of 2009 were 19.0% as a percentage of revenue as compared to 19.2% in the same quarter last year. SG&A declined by $22.3 million, or 37%, over the same period in the prior year and by $12.2 million, or 24%, sequentially, due to cost-saving initiatives taking hold as well as $3.5 million in favorable insurance reserve adjustments.

As a result of certain cost-reduction actions, the company recorded $2.2 million in restructuring charges, consisting mainly of severance payments and lease-related charges associated with various facility, branding and back-office consolidations.

Second quarter GAAP net earnings per diluted share was $0.13, including a $0.04 negative impact from restructuring charges, reflecting a decrease compared to $0.25 in the same period in the prior year.

As of June 30, 2009 cash and cash equivalents totaled $23.5 million, compared to $11.3 million as of December 31, 2008. Total debt outstanding was $90.0 million as of June 30, 2009, reflecting a reduction in debt of $56.3 million since December 31, 2008. Total average diluted shares outstanding for the second quarter of 2009 were 32.9 million.

Business Trends and Outlook

During the second quarter of 2009, Nursing and Allied orders continued to show signs of stabilization, although still at levels significantly lower than prior year. Locum Tenens volume (days filled) increased slightly over the first quarter. Pricing and gross margins remained relatively stable overall.

Nowakowski noted continued signs of stabilization and some recent improvement in orders for travel nurse and allied professionals which should translate into stabilizing volumes during the third quarter. Locum Tenens volume and physician permanent placements are expected to be steady compared with the prior quarter. Based on these trends, third quarter consolidated revenue is expected to decline sequentially by approximately 15%. The majority of this decline is driven by volume trends in nurse staffing resulting from the earlier drop in demand levels. Overall gross margins are anticipated to remain consistent.

"We are continuing to focus on maintaining strong relationships and securing preferred contracts with our clients, as well as nurturing our recent new service offerings such as Emergency Medicine staffing, Home Health staffing, and Recruitment Process Outsourcing," added Nowakowski. "At the same time, we are prudently managing our cost structure and balance sheet in order to position ourselves for future investments in new market opportunities that contribute strategic synergies to our core service lines. Despite the uncertainty of when economic recovery will occur, we remain confident in the long-term fundamentals of our industry and focused on laying the groundwork for innovation and growth in future years to drive shareholder value."

About AMN Healthcare Services

AMN Healthcare Services, Inc. is the largest healthcare staffing company in the United States and a leader in all three of its business segments: travel nurse and allied staffing, locum tenens staffing (temporary physician staffing), and physician permanent placement services. AMN Healthcare recruits healthcare professionals both nationally and internationally and places them on variable lengths of assignments and in permanent positions at acute-care hospitals, physician practice groups and other healthcare settings throughout the United States. For more information, visithttp://www.amnhealthcare.com.

Conference Call on August 6, 2009

AMN Healthcare Services, Inc.'s second quarter 2009 conference call will be held on Thursday, August 6, 2009, at 5:00 p.m., Eastern Time. A live webcast of the call can be accessed through AMN Healthcare's website at http://www.amnhealthcare.com/investors. 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) 230-1092 in the U.S. or (612) 332-0335 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 at 7:30 p.m. Eastern Time on August 6, 2009, and can be accessed until August 20, 2009 at midnight Eastern Time, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 106454.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial information. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP"), and may be different from non-GAAP measures reported by other companies. From time to time, additional information regarding non-GAAP financial measures may be made available on the Company's website at http://www.amnhealthcare.com/investors.

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. The company based these forward-looking statements on its current expectations and projections about future events. 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" 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, 2008 and its other quarterly and periodic reports filed with the SEC. These statements reflect the company's current beliefs and are based upon information currently available to it. 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 Income
                    (dollars in thousands, except per share amounts)
                                     (unaudited)

                                     Three Months Ended
                                          June 30,
                                      2009        2008      % Chg
    -----------------------------------------------------------------

     Revenue                        $199,140    $312,691    (36.3%)
     Cost of revenue                 145,463     230,153    (36.8%)
                                     -------     -------
        Gross profit                  53,677      82,538    (35.0%)
                                      ------      ------
                                        27.0%       26.4%
     Operating expenses:
        Selling, general and
         administrative               37,840      60,117    (37.1%)
                                        19.0%       19.2%

        Restructuring Charges          2,152           -      100%
        Impairment Charges                 -           -        0%
        Depreciation and
         amortization                  3,442       3,738     (7.9%)
                                       -----       -----

          Total operating
           expenses                   43,434      63,855    (32.0%)
                                      ------      ------
     Income (loss) from
      operations                      10,243      18,683    (45.2%)
                                         5.1%        6.0%
     Interest expense, net             2,320       2,660    (12.8%)
                                       -----       -----
     Income (loss) before income
      taxes                            7,923      16,023    (50.6%)
     Income tax expense                3,549       7,508    (52.7%)
                                       -----       -----
     Net income (loss)                $4,374      $8,515    (48.6%)
                                      ======      ======
                                         2.2%        2.7%
     Net income (loss) per common
      share:
           Basic                       $0.13       $0.25    (48.0%)
                                       =====       =====
           Diluted                     $0.13       $0.25    (48.0%)
                                       =====       =====

     Weighted average common
      shares outstanding:
           Basic                      32,621      33,833     (3.6%)
                                      ======      ======
           Diluted                    32,918      34,308     (4.1%)
                                      ======      ======


                                       Six Months Ended
                                          June 30,
                                      2009        2008      % Chg
    -----------------------------------------------------------------

     Revenue                        $448,735    $606,284    (26.0%)
     Cost of revenue                 331,075     446,291    (25.8%)
                                     -------     -------
        Gross profit                 117,660     159,993    (26.5%)
                                     -------     -------
                                        26.2%       26.4%
     Operating expenses:
        Selling, general and
         administrative               87,920     115,220    (23.7%)
                                        19.6%       19.0%

        Restructuring Charges          5,070           -       100%
        Impairment Charges           175,707           -       100%
        Depreciation and
         amortization                  6,909       7,088     (2.5%)
                                       -----       -----

          Total operating
           expenses                  275,606     122,308     125.3%
                                     -------     -------
     Income (loss) from
      operations                    (157,946)     37,685       NM
                                      (35.2%)        6.2%
     Interest expense, net             4,519       5,471    (17.4%)
                                       -----       -----
     Income (loss) before income
      taxes                         (162,465)     32,214       NM
     Income tax expense              (45,005)     14,976       NM
                                    --------      ------
     Net income (loss)             $(117,460)    $17,238       NM
                                   =========     =======
                                      (26.2%)        2.8%
     Net income (loss) per common
      share:
           Basic                      $(3.60)      $0.51       NM
                                      ======       =====
           Diluted                    $(3.60)      $0.50       NM
                                      ======       =====

     Weighted average common
      shares outstanding:
           Basic                      32,599      33,832     (3.6%)
                                      ======      ======
           Diluted                    32,599      34,244     (4.8%)
                                      ======      ======

    NM - Not meaningful


                             AMN Healthcare Services, Inc.
                      Supplemental Financial and Operating Data
                    (dollars in thousands, except operating data)
                                      (unaudited)

                       Three Months Ended             Six Months Ended
                              June 30,                     June 30,
                 -------------------------------------------------------------
                            %              %               %                %
                           of             of              of               of
                   2009    Rev    2008    Rev    2009     Rev     2008     Rev

    Revenue
      Nurse
       and
       allied
       healthcare
       staffing  $111,136       $215,342        $274,986        $419,327
      Locum
       tenens
       staffing    79,097         83,857         153,888         160,210
      Physician
       permanent
       placement
       services     8,907         13,492          19,861          26,747
                    -----         ------          ------          ------
                 $199,140       $312,691        $448,735        $606,284
                 ========       ========        ========        ========

    Reconciliation
     of Non-GAAP
     Items:
    Adjusted
    EBITDA(1)
      Nurse
       and
       allied
       healthcare
       staffing    $6,796  6.1%  $16,692  7.8%   $17,387   6.3%  $32,173  7.7%
      Locum
       tenens
       staffing     8,985 11.4%    4,247  5.1%    12,806   8.3%    9,902  6.2%
      Physician
       permanent
       placement
       services     2,211 24.8%    3,864 28.6%     5,261  26.5%    7,203 26.9%
                    -----          -----           -----           -----
                   17,992  9.0%   24,803  7.9%    35,454   7.9%   49,278  8.1%

    Depreciation
     and
     amortization   3,442          3,738           6,909           7,088
    Stock-based
     compensation   2,155          2,382           4,830           4,505
    Restructuring
     charges        2,152              -           5,070               -
    Impairment
     charges            -              -         175,707               -
    Non-recurring
     legal
     expenses           -              -             884               -
    Interest
     expense,
     net            2,320          2,660           4,519           5,471
                    -----          -----           -----           -----
    Income
     (loss)
     before
     income
     taxes          7,923         16,023        (162,465)         32,214
    Income
     tax
     expense        3,549          7,508         (45,005)         14,976
                    -----          -----         -------          ------
    Net
     income
     (loss)        $4,374         $8,515       $(117,460)        $17,238
                   ======         ======       =========         =======


    GAAP based
     diluted
     net income
     (loss)
     per share
     (EPS)          $0.13                         $(3.60)
      Adjustments:
      Restructuring
       charges       0.04                           0.09
      Impairment
       charges          -                           3.77
      Non-recurring
       legal
       expenses         -                           0.02
                      ---                           ----
    Adjusted
     diluted
     earnings
     per
     share
     (2)            $0.17                           $0.28
                    =====                           =====


                      Three Months Ended            Six Months Ended
                           June 30,                      June 30,
                    --------------------------   ----------------------------
                                           %                              %
                     2009          2008   Chg       2009          2008   Chg

    Gross Margin
      Nurse
       and
       allied
       healthcare
       staffing      25.0%         24.5%             23.8%        24.3%
      Locum
       tenens
       staffing      26.1%         25.8%             26.2%        26.3%
      Physician
       permanent
       placement
       services      58.8%         59.7%             60.3%        60.6%

    Operating Data:
    ---------------
    Nurse
     and
     allied
     healthcare
     staffing
      Average
       travelers
       on
       assignment
       (3)          3,661         7,207 (49.2%)     4,575        7,047 (35.1%)
      Revenue
       per
       traveler
       per
       day(4)     $333.59       $328.35   1.6%    $332.08      $326.95   1.6%
      Gross
       profit
       per
       traveler
       per
       day(4)      $83.36        $80.52   3.5%     $78.99       $79.30  (0.4%)

    Locum
     tenens
     staffing
      Days
       filled
       (5)         54,708        57,859  (5.4%)   107,105      110,558  (3.1%)
      Revenue
       per day
       filled
       (5)      $1,445.80     $1,449.33  (0.2%) $1,436.80    $1,449.10  (0.8%)
      Gross
       profit
       per day
       filled(5)  $377.79       $374.62   0.8%    $375.94      $380.50  (1.2%)



                      As of June
                          30,
                      ----------
                 2009         2008
    Leverage
     Ratio
      (6)         1.1          1.6

    (1) Adjusted EBITDA represents net income (loss) plus interest expense
        (net of interest income), income taxes, depreciation and amortization,
        restructuring charges, impairment charges, non-recurring legal
        expenses and stock-based compensation expense. Management presents
        adjusted EBITDA because it believes that adjusted EBITDA is a useful
        supplement to net income as an indicator of operating performance.
        Management believes that adjusted EBITDA is an industry wide financial
        measure that is useful both to management and investors when
        evaluating the company's performance. Management also uses adjusted
        EBITDA for planning purposes. Management uses adjusted EBITDA to
        evaluate the company's performance because it believes that adjusted
        EBITDA more accurately reflects the company's results, as it excludes
        certain items, in particular stock-based compensation charges that
        management believes are not indicative of the company's operating
        performance. However, adjusted EBITDA is not intended to represent
        cash flows for the period, nor has it been presented as an alternative
        to operating or net income as an indicator of operating performance,
        and it should not be considered in isolation or as a substitute for
        measures of performance prepared in accordance with GAAP. As defined,
        adjusted EBITDA is not necessarily comparable to other similarly
        titled captions of other companies due to potential inconsistencies in
        the method of calculation. While 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 income
        statement, and management therefore utilizes adjusted EBITDA as an
        operating performance measure in conjunction with GAAP measures such
        as net income.
    (2) Adjusted EPS represents GAAP EPS plus restructuring and impairment
        charges and non-recurring legal expenses. Management presents adjusted
        EPS because it believes that adjusted EPS is a useful supplement to
        diluted net loss per share as an indicator of operating performance.
        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). As defined, adjusted
        EPS is not necessarily comparable to other similarly titled captions
        of other companies due to potential inconsistencies in the method of
        calculation. While management believes that some of the items excluded
        from adjusted EPS are not indicative of the company's operating
        performance, these items do impact the income statement, and
        management therefore utilizes adjusted EPS as an operating performance
        measure in conjunction with GAAP measures such as GAAP EPS.
    (3) Average travelers on assignment represents the average number of nurse
        and allied healthcare professionals on assignment during the period
        presented.
    (4) Revenue per traveler per day and gross profit per traveler per day
        represent the revenue and gross profit of the company's nurse and
        allied healthcare staffing segment divided by average travelers on
        assignment, divided by the number of days in the period presented.
    (5) Days filled is calculated by dividing the locum tenens hours filled
        during the period by 8 hours. Revenue per day filled and gross profit
        per day filled represent revenue and gross profit of the company's
        locum tenens staffing segment divided by days filled for the period
        presented.
    (6) Leverage ratio represents the ratio of the total debt outstanding at
        the end of the period to the Adjusted EBITDA for the past twelve
        months.

                              AMN Healthcare Services, Inc.
                          Condensed Consolidated Balance Sheets
                                     (in thousands)
                                       (unaudited)


                                June 30,         March 31,       December 31,
                                  2009             2009             2008
                                  ----             ----             ----
    Assets
    Current assets:
      Cash and cash
       equivalents               $23,488          $16,675          $11,316
      Accounts
       receivable, net           114,542          148,376          182,562
      Prepaid expenses             8,867           10,585            9,523
      Income taxes
       receivable                  1,425            4,448            3,440
      Deferred income
       taxes, net                 18,085           22,417           18,085
      Other current
       assets                      2,911            3,376            4,901
                                   -----            -----            -----
        Total current
         assets                  169,318          205,877          229,827

    Fixed assets,
     net                          24,034           24,938           24,018
    Deposits and
     other assets                 12,056           10,579           13,252
    Goodwill                      79,868           79,868          252,875
    Intangible
     assets, net                 117,738          118,940          122,845
                                 -------          -------          -------

         Total assets           $403,014         $440,202         $642,817
                                ========         ========         ========

    Liabilities and
     stockholders'
     equity
    Current
     liabilities:
      Bank overdraft              $3,274               $-           $3,995
      Accounts payable
       and accrued
       expenses                   20,837           24,667           24,420
      Accrued
       compensation
       and benefits               31,941           36,728           44,871
      Revolving credit
       facility                        -            6,500           31,500
      Current portion
       of notes
       payable                    12,201           14,824           14,580
      Deferred revenue             5,699            6,204            7,184
      Other current
       liabilities                15,892           15,060           14,722
                                  ------           ------           ------
        Total current
         liabilities              89,844          103,983          141,272

    Notes payable,
     less current
     portion                      77,781           98,208          100,236
    Deferred income
     taxes, net                    7,382           13,342           58,466
    Other long-term
     liabilities                  56,592           59,532           58,710
                                  ------           ------           ------
        Total
         liabilities             231,599          275,065          358,684
                                 -------          -------          -------

    Stockholders'
     equity                      171,415          165,137          284,133
                                 -------          -------          -------

     Total
      liabilities and
      stockholders'
      equity                    $403,014         $440,202         $642,817
                                ========         ========         ========

                               AMN Healthcare Services, Inc.
                         Condensed Consolidated Cash Flow Statement
                                       (in thousands)
                                        (unaudited)


                           Three Months Ended          Six Months Ended
                          June 30,      June 30,     June 30,     June 30,
                            2009          2008        2009          2008
                            ----          ----        ----          ----

    Net cash
     provided by
     operating
     activities            $36,388       $11,883     $73,945       $28,756

    Net cash used
     in investing
     activities             (1,204)      (11,064)     (2,434)      (44,465)

    Net cash
     provided by
     (used in)
     financing
     activities            (28,420)         (345)    (59,374)        5,589

    Effect of
     exchange
     rates on cash              49            47          35           (19)
                               ---           ---         ---          ----

      Net increase
       (decrease) in
       cash and cash
       equivalents           6,813           521      12,172       (10,139)

      Cash and cash
       equivalents
       at beginning
       of period            16,675         7,835      11,316        18,495
                            ------         -----      ------        ------

      Cash and cash
       equivalents
       at end of
       period              $23,488        $8,356     $23,488        $8,356
                           =======        ======     =======        ======

(Logo: http://www.newscom.com/cgi-bin/prnh/20060718/LATU121LOGO)


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SOURCE AMN Healthcare Services, Inc.
Copyright©2009 PR Newswire.
All rights reserved


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