Full Press Release Details
Director, Investor Relations
AMN HEALTHCARE ANNOUNCES
THIRD-QUARTER 2016 RESULTS AND SHARE REPURCHASE PROGRAM
Revenue up 23% over prior year to $473 million; reports GAAP EPS of
EPS of $0.62; $150 million share repurchase program authorized
SAN DIEGO (November 3, 2016) AMN Healthcare Services, Inc. (NYSE: AMN), healthcare s leader and innovator in workforce solutions and
staffing services, today announced its third-quarter 2016 financial results. Financial highlights are as follows:
Dollars in millions, except per share
| Q3 2016 | % Change Q3 2015 | YTD Sept. 30, 2016 | % Change YTD Sept. 30, 2015 | |||||||||||||
| Revenue | $ | 472.6 | 23 | % | $ | 1,414.4 | 33% | |||||||||
| Gross profit | $ | 154.5 | 23 | % | $ | 461.1 | 37% | |||||||||
| Net income | $ | 27.3 | (19 | )% | $ | 79.5 | 29% | |||||||||
| Diluted EPS | $ | 0.55 | (20 | )% | $ | 1.61 | 27% | |||||||||
| Adj. diluted EPS* | $ | 0.62 | 29 | % | $ | 1.82 | 56% | |||||||||
| Adjusted EBITDA* | $ | 58.1 | 27 | % | $ | 176.0 | 49% |
healthcare professionals and workforce solutions is strong today and is expected to continue to grow as turnover and vacancies persist at historical high levels, said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare.
Our results this quarter reflect a positive market environment but are also a testament to the team s outstanding execution as we partner with our clients to help them manage their significant labor challenges and enable them to stay
focused on delivering quality patient care. We are well positioned to offer strategic solutions to address these issues through our broad suite of services. The current demand levels, indicators of our clients future needs and our leading
market position provide us with optimism heading into 2017.
Ms. Salka added, I am also pleased to announce that our Board
approved a $150 million share repurchase program to leverage our strong financial position and free cash flow as another prudent capital allocation option. Although we will continue to prioritize investing in our current businesses and compelling
acquisition opportunities, we are also committed to maximizing shareholder returns, and we believe a share repurchase program provides an additional mechanism to accomplish this.
Third-Quarter 2016 Results
Consolidated revenue was $473 million, an increase of 23% from the same quarter last year, driven by 12% organic growth mainly stemming from
the Nurse and Allied Solutions segment.
Revenue for the Nurse and Allied Solutions segment was $287 million, which is 16% higher compared
to the same quarter last year and down 2% sequentially. The sequential decline in this segment resulted from minimal labor disruption-related revenue in the third quarter, compared to the prior quarter that had approximately $19 million of revenue
services. The Travel Nurse division continued with strong performance, with revenue up 21% year-over-year and 4% sequentially. Allied revenue was up 10% year-over-year and 6% sequentially.
Locum Tenens Solutions segment revenue was $109 million, an increase of 7% from the same quarter last year and down 1% sequentially. The Other
Workforce Solutions segment revenue was $77 million, an increase of 125% from the same quarter last year and 7% sequentially, with the growth in both periods driven mostly from recent acquisitions.
Gross margin was 32.7%, which is 20 basis points lower than the same quarter last year and flat sequentially. The year-over-year gross margin
decline was due to a lower Nurse and Allied Solutions segment gross margin, partially offset by an increase in gross margin in the Locum Tenens segment and greater contribution from the higher-margin Other Workforce Solutions segment.
SG&A expenses were $100 million, or 21.2% of revenue, compared to $83 million, or 21.7% of revenue, in the same quarter last year and $100
million, or 21.0% of revenue, in the previous quarter. The year-over-year 50 basis point decline in percentage of revenue was driven by improved operating leverage. The 20 basis point increase in percentage of revenue from the previous quarter was
mainly driven by a $2 million professional liability actuarial credit recorded in the second quarter.
Net income was $27 million, or
$0.55 per diluted share, compared to $34 million, or $0.69 per diluted share, in the same quarter last year. The prior-year quarter included a $12 million benefit related to a reversal of tax reserves. Excluding amortization of intangible assets and
acquisition and integration costs, net of tax, adjusted net income per diluted share was $0.62. Adjusted EBITDA was $58 million, a year-over-year increase of 27%. Adjusted EBITDA margin was 12.3%, representing a 40 basis point increase
year-over-year and a 20 basis point decrease sequentially. The sequential decline was mainly the result of the previously noted actuarial benefit recorded last quarter.
At September 30, 2016, cash and cash equivalents totaled $16 million. Cash flow from operations was $30 million and capital expenditures were
$5 million. The Company ended the quarter with total debt outstanding of $386 million, with a leverage ratio as calculated in accordance with the Company s credit agreement of 1.7 to 1.
On October 3, 2016, the Company completed the offering and sale of $325 million principal amount
of its 5.125% Senior Notes due 2024, the proceeds of which were used to repay existing indebtedness under its credit facilities and to pay expenses related to the transaction.
Share Repurchase Program
November 1, 2016, the Board of Directors approved a share repurchase program under which the Company may repurchase up to $150 million of its common stock.
The amount and timing of the purchases will depend on a number of factors including the price of the Company s shares, trading volume,
Company performance, Company liquidity, general economic and market conditions and other factors that the Company s management believes are relevant. The share repurchase program does not require the purchase of any minimum number of
shares and may be suspended or discontinued at any time.
The Company intends to make all repurchases and to administer the plan in
accordance with applicable laws and regulatory guidelines, including Rule 10b-18 of the Exchange Act, and in compliance with its debt instruments. Repurchases may be made from cash on hand, free cash flow generated from the Company s business
or from the Company s credit facilities. Repurchases may be made from time to time through open market purchases or privately negotiated transactions. Repurchases may also be made pursuant to one or more plans established pursuant to
Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading restrictions.
Fourth-Quarter 2016 Outlook
| Metric | Guidance* | |
| Consolidated revenue | $473 - $479 MM | |
| Gross margin | 32.5% | |
| SG&A as percentage of revenue | 21.0% - 21.5% | |
| Adjusted EBITDA margin | 11.5% - 12.0% |
The Company s revenue guidance is based on the expectation of a continued strong demand environment, representing
year-over-year growth of 18-19%, of which approximately 10% is organic with the remainder from acquisitions.
Conference Call on November 3, 2016
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 2016 financial results on Thursday, November 3, 2016 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) 230-1092
in the U.S. or (612) 288-0337 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 3, 2016, and can be accessed until 11:59 p.m. Eastern Time on November 17, 2016 by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 403342.
About AMN Healthcare
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
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.
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. Such statements include expectations regarding the outlook for labor shortages, the favorable demand environment, fourth-quarter 2016 revenue, gross margin, SG&A expenses and
adjusted EBITDA margin. 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 the Company s Annual Report on Form 10-K for
the year ended December 31, 2015 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.
Director, Investor Relations
AMN Healthcare Services, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands, except per share amounts)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||
| 2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||
| Revenue | $ | 472,636 | $ | 382,859 | $ | 473,729 | $ | 1,414,367 | $ | 1,060,513 | ||||||||||
| Cost of revenue | 318,169 | 256,850 | 318,976 | 953,249 | 722,954 | |||||||||||||||
| Gross profit | 154,467 | 126,009 | 154,753 | 461,118 | 337,559 | |||||||||||||||
| Gross margin | 32.7 | % | 32.9 | % | 32.7 | % | 32.6 | % | 31.8 | % | ||||||||||
| Operating expenses: | ||||||||||||||||||||
| Selling, general and administrative (SG&A) | 99,995 | 83,098 | 99,541 | 297,359 | 229,377 | |||||||||||||||
| SG&A as a % of revenue | 21.2 | % | 21.7 | % | 21.0 | % | 21.0 | % | 21.6 | % | ||||||||||
| Depreciation and amortization | 7,789 | 5,304 | 7,334 | 21,888 | 15,631 | |||||||||||||||
| Total operating expenses | 107,784 | 88,402 | 106,875 | 319,247 | 245,008 | |||||||||||||||
| Income from operations | 46,683 | 37,607 | 47,878 | 141,871 | 92,551 | |||||||||||||||
| Operating margin (1) | 9.9 | % | 9.8 | % | 10.2 | % | 10.0 | % | 8.7 | % | ||||||||||
| Interest expense, net, and other | 3,016 | 2,013 | 2,800 | 9,065 | 5,797 | |||||||||||||||
| Income before income taxes | 43,667 | 35,594 | 45,078 | 132,806 | 86,754 | |||||||||||||||
| Income tax expense | 16,371 | 1,947 | 18,756 | 53,319 | 25,028 | |||||||||||||||
| Net income | $ | 27,296 | $ | 33,647 | $ | 26,322 | $ | 79,487 | $ | 61,726 | ||||||||||
| Net income as a % of revenue | 5.8 | % | 8.8 | % | 5.6 | % | 5.6 | % | 5.8 | % | ||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||
| Foreign currency translation and other | 40 | 54 | 86 | 165 | 42 | |||||||||||||||
| Unrealized gain (loss) on cash flow hedge, net of income taxes | 231 | (367 | ) | (111 | ) | (343 | ) | (331 | ) | |||||||||||
| Other comprehensive income (loss) | 271 | (313 | ) | (25 | ) | (178 | ) | (289 | ) | |||||||||||
| Comprehensive income | $ | 27,567 | $ | 33,334 | $ | 26,297 | $ | 79,309 | $ | 61,437 | ||||||||||
| Net income per common share: | ||||||||||||||||||||
| Basic | $ | 0.57 | $ | 0.71 | $ | 0.55 | $ | 1.66 | $ | 1.30 | ||||||||||
| Diluted | $ | 0.55 | $ | 0.69 | $ | 0.53 | $ | 1.61 | $ | 1.27 | ||||||||||
| Weighted average common shares outstanding: | ||||||||||||||||||||
| Basic | 48,049 | 47,674 | 48,034 | 47,993 | 47,466 | |||||||||||||||
| Diluted | 49,410 | 48,978 | 49,348 | 49,287 | 48,737 |
AMN Healthcare Services, Inc.
Supplemental Financial and Operating Data
(dollars in thousands, except per share data and revenue per day)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||
| 2016 | 2015 (2) | 2016 | 2016 | 2015 (2) | ||||||||||||||||
| Revenue | ||||||||||||||||||||
| Nurse and allied solutions | $ | 286,810 | $ | 246,748 | $ | 292,663 | $ | 877,197 | $ | 690,234 | ||||||||||
| Locum tenens solutions | 108,553 | 101,755 | 109,129 | 320,420 | 285,835 | |||||||||||||||
| Other workforce solutions | 77,273 | 34,356 | 71,937 | 216,750 | 84,444 | |||||||||||||||
| $ | 472,636 | $ | 382,859 | $ | 473,729 | $ | 1,414,367 | $ | 1,060,513 | |||||||||||
| Reconciliation of Non-GAAP Items: | ||||||||||||||||||||
| Segment operating income (3) | ||||||||||||||||||||
| Nurse and allied solutions | $ | 37,396 | $ | 32,354 | $ | 39,503 | $ | 118,517 | $ | 90,875 | ||||||||||
| Locum tenens solutions | 14,026 | 13,321 | 16,317 | 43,634 | 34,142 | |||||||||||||||
| Other workforce solutions | 20,867 | 13,074 | 17,858 | 56,311 | 28,397 | |||||||||||||||
| 72,289 | 58,749 | 73,678 | 218,462 | 153,414 | ||||||||||||||||
| Unallocated corporate overhead | 14,235 | 13,127 | 14,420 | 42,460 | 35,093 | |||||||||||||||
| Adjusted EBITDA (4) | 58,054 | 45,622 | 59,258 | 176,002 | 118,321 | |||||||||||||||
| Adjusted EBITDA margin (5) | 12.3 | % | 11.9 | % | 12.5 | % | 12.4 | % | 11.2 | % | ||||||||||
| Depreciation and amortization | 7,789 | 5,304 | 7,334 | 21,888 | 15,631 | |||||||||||||||
| Share-based compensation | 2,704 | 2,021 | 2,710 | 8,795 | 6,551 | |||||||||||||||
| Acquisition and integration costs | 878 | 690 | 1,336 | 3,448 | 3,588 | |||||||||||||||
| Income from operations | 46,683 | 37,607 | 47,878 | 141,871 | 92,551 | |||||||||||||||
| Interest expense, net, and other | 3,016 | 2,013 | 2,800 | 9,065 | 5,797 | |||||||||||||||
| Income before income taxes | 43,667 | 35,594 | 45,078 | 132,806 | 86,754 | |||||||||||||||
| Income tax expense | 16,371 | 1,947 | 18,756 | 53,319 | 25,028 | |||||||||||||||
| Net income | $ | 27,296 | $ | 33,647 | $ | 26,322 | $ | 79,487 | $ | 61,726 | ||||||||||
| GAAP diluted net income per share (EPS) | $ | 0.55 | $ | 0.69 | $ | 0.53 | $ | 1.61 | $ | 1.27 | ||||||||||
| Adjustments: | ||||||||||||||||||||
| Amortization of intangible assets | 0.09 | 0.06 | 0.09 | 0.28 | 0.18 | |||||||||||||||
| Acquisition and integration costs | 0.02 | 0.01 | 0.03 | 0.07 | 0.07 | |||||||||||||||
| IRS adjustment | 0.00 | (0.25 | ) | 0.00 | 0.00 | (0.25 | ) | |||||||||||||
| Tax effect of adjustments | (0.04 | ) | (0.03 | ) | (0.04 | ) | (0.14 | ) | (0.10 | ) | ||||||||||
| Adjusted diluted EPS (6) | $ | 0.62 | $ | 0.48 | $ | 0.61 | $ | 1.82 | $ | 1.17 |
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30, | September 30, | ||||||||||||||||||
| 2016 | 2015 (2) | 2016 | 2016 | 2015 (2) | ||||||||||||||||
| Gross Margin | ||||||||||||||||||||
| Nurse and allied solutions | 26.7 | % | 27.5 | % | 26.7 | % | 26.7 | % | 27.1 | % | ||||||||||
| Locum tenens solutions | 31.2 | % | 30.7 | % | 31.3 | % | 31.2 | % | 29.8 | % | ||||||||||
| Other workforce solutions | 56.7 | % | 78.2 | % | 58.9 | % | 58.6 | % | 77.1 | % | ||||||||||
| Operating Data: | ||||||||||||||||||||
| Nurse and allied solutions | ||||||||||||||||||||
| Average healthcare professionals on assignment consolidated (7) | 8,458 | 7,564 | 8,337 | 8,423 | 7,338 | |||||||||||||||
| Locum tenens solutions | ||||||||||||||||||||
| Days filled (8) | 59,612 | 59,267 | 61,068 | 178,846 | 173,371 | |||||||||||||||
| Revenue per day filled (9) | $ | 1,821 | $ | 1,717 | $ | 1,787 | $ | 1,792 | $ | 1,649 | ||||||||||
| As of September 30, | As of June 30, | |||||||||||||||||||
| 2016 | 2015 | 2016 | ||||||||||||||||||
| Leverage ratio (10) | 1.7 | 1.5 | 1.9 |
AMN Healthcare Services, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
| September 30, 2016 | June 30, 2016 | December 31, 2015 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 15,708 | $ | 21,062 | $ | 9,576 | ||||||
| Accounts receivable, net | 331,220 | 330,853 | 277,996 | |||||||||
| Accounts receivable, subcontractor | 42,094 | 46,326 | 50,807 | |||||||||
| Prepaid and other current assets | 44,635 | 44,332 | 37,249 | |||||||||
| Total current assets | 433,657 | 442,573 | 375,628 | |||||||||
| Restricted cash, cash equivalents and investments | 28,222 | 28,490 | 27,352 | |||||||||
| Fixed assets, net | 57,965 | 56,575 | 50,134 | |||||||||
| Other assets | 57,296 | 54,759 | 47,569 | |||||||||
| Goodwill | 342,174 | 342,827 | 204,779 | |||||||||
| Intangible assets, net | 250,455 | 255,214 | 174,970 | |||||||||
| Total assets | $ | 1,169,769 | $ | 1,180,438 | $ | 880,432 | ||||||
| Liabilities and stockholders equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable and accrued expenses | $ | 118,289 | $ | 131,965 | $ | 118,822 | ||||||
| Accrued compensation and benefits | 99,629 | 102,516 | 83,701 | |||||||||
| Current portion of revolving credit facility | 40,000 | 30,000 | ||||||||||
| Current portion of notes payable | 3,750 | 11,250 | 7,500 | |||||||||
| Deferred revenue | 8,446 | 6,145 | 5,620 | |||||||||
| Other current liabilities | 9,962 | 9,728 | 5,374 | |||||||||
| Total current liabilities | 240,076 | 301,604 | 251,017 | |||||||||
| Revolving credit facility | 182,500 | 166,500 | 52,500 | |||||||||
| Notes payable, less unamortized fees | 198,793 | 194,019 | 128,490 | |||||||||
| Deferred income taxes, net | 28,278 | 30,921 | 22,431 | |||||||||
| Other long-term liabilities | 86,949 | 84,495 | 78,134 | |||||||||
| Total liabilities | 736,596 | 777,539 | 532,572 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders equity | 433,173 | 402,899 | 347,860 | |||||||||
| Total liabilities and stockholders equity | $ | 1,169,769 | $ | 1,180,438 | $ | 880,432 |
AMN Healthcare Services, Inc.
Summary Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||
| September 30, | June 30 | September 30, | ||||||||||||||||||
| 2016 | 2015 | 2016 | 2016 | 2015 | ||||||||||||||||
| Net cash provided by operating activities | $ | 29,540 | $ | 21,950 | $ | 20,053 | $ | 84,820 | $ | 55,637 | ||||||||||
| Net cash used in investing activities | (8,117 | ) | (10,768 | ) | (58,451 | ) | (241,271 | ) | (105,634 | ) | ||||||||||
| Net cash provided by (used in) financing activities | (26,817 | ) | (11,302 | ) | 36,268 | 162,418 | 51,290 | |||||||||||||
| Effect of exchange rates on cash | 40 | 54 | 86 | 165 | 42 | |||||||||||||||
| Net increase (decrease) in cash and cash equivalents | (5,354 | ) | (66 | ) | (2,044 | ) | 6,132 | 1,335 | ||||||||||||
| Cash and cash equivalents at beginning of period | 21,062 | 14,474 | 23,106 | 9,576 | 13,073 | |||||||||||||||
| Cash and cash equivalents at end of period | $ | 15,708 | $ | 14,408 | $ | 21,062 | $ | 15,708 | $ | 14,408 |