Full Press Release Details
Director, Investor Relations
ANNOUNCES FIRST QUARTER 2018 RESULTS
Quarterly revenue of $522 million, up 6% over prior year;
GAAP EPS of $0.87 and adjusted EPS of $0.81
SAN DIEGO (May 3, 2018) AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in healthcare workforce solutions and staffing
services, today announced its first quarter 2018 financial results. Financial highlights are as follows:
Dollars in millions, except per share amounts.
| Q1 2018 | % Change Q1 2017 | |||||||
| Revenue | $ | 522.5 | 6 | % | ||||
| Gross profit | $ | 167.8 | 4 | % | ||||
| Net income | $ | 42.7 | 33 | % | ||||
| Diluted EPS | $ | 0.87 | 34 | % | ||||
| Adj. diluted EPS* | $ | 0.81 | 29 | % | ||||
| Adjusted EBITDA* | $ | 66.5 | 5 | % |
AMN delivered a quarter of great performance and service delivery for our clients and
healthcare professionals, said Susan R. Salka, Chief Executive Officer of AMN Healthcare. I am very proud of how our teams rallied to meet our clients higher-than-expected staffing needs. Demand continues to grow for strategic
partners capable of providing comprehensive solutions to meet the evolving healthcare workforce challenges. AMN is uniquely positioned with its suite of innovative workforce solutions.
Ms. Salka added, We started the second quarter with the acquisition of three businesses that add valuable facets to our mid-revenue cycle, executive search and interim leadership solutions. MedPartners, Phillips DiPisa and Leaders For Today bring talented teams that are an excellent fit for AMN.
First Quarter 2018 Results
Consolidated revenue for the quarter was $522 million, a 6% increase over prior year and 3% higher than prior quarter. Revenue for the
Nurse and Allied Solutions segment was $338 million, higher by 8% year over year and 5% sequentially. The Travel Nurse division continued to perform well with revenue up 10% year over year and 8% sequentially. Allied division revenue increased
3% year over year and was flat sequentially.
The Locum Tenens Solutions segment performed at the high end of expectations with revenue of
$103 million, up slightly year over year and down by 5% sequentially. Other Workforce Solutions segment revenue was $81 million reflecting an increase of 3% year over year and 2% sequentially, with year-over-year growth driven by the mid-revenue cycle and workforce optimization businesses.
Gross margin was 32.1%, lower by 60 basis
points year over year and higher by 30 basis points sequentially. The year-over-year gross margin decline was due primarily to lower bill-to-pay spreads in our Locum
Tenens Solutions segment and a revenue mix shift in the Other Workforce Solutions segment. The sequential gross margin increase was driven primarily by a higher Nurse and Allied Solutions gross margin.
SG&A expenses were $105 million, or 20.0% of revenue, compared with $102 million,
or 20.6% 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 $100 million, or 19.7% of revenue, in the previous quarter.
Net income was $43 million, or $0.87 per diluted share, compared with $32 million, or $0.65 per diluted share, in the same quarter
last year. Adjusted diluted EPS was $0.81. Adjusted EBITDA was $67 million, a year-over-year increase of 5%. Adjusted EBITDA margin was 12.7%, representing a decrease of 10 basis points year over year and an increase of 10 basis points
At March 31, 2018, cash and cash equivalents totaled $54 million. Cash flow from operations was strong at
$60 million for the quarter. Capital expenditures were $6 million in the quarter. 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 1.2 to 1.
In April, AMN completed the acquisition of MedPartners, a leading national mid-revenue cycle firm; and
two related providers of healthcare leadership solutions, Phillips DiPisa and Leaders For Today. All of these businesses are included in the Company s Other Workforce Solutions segment.
MedPartners solutions include case management, clinical documentation improvement, and medical registry, while also doubling our market
share in medical coding. MedPartners generated 2017 revenue of approximately $125 million with an adjusted EBITDA margin of 16%. MedPartners is expected to be immediately accretive to AMN s adjusted earnings per share.
Phillips DiPisa is an executive retained search firm, specifically focusing on C-suite positions in
healthcare. Leaders For Today provides interim healthcare leaders and mid-level permanent placement. The combined companies generated 2017 revenue of approximately $23 million and an adjusted EBITDA
margin of 20%. The acquisition is expected to be immediately accretive to AMN s adjusted earnings per share.
Second Quarter 2018 Outlook
| Metric | Guidance* | |
| Consolidated revenue | $530 - $537 million | |
| Gross margin | 32.5-33.0% | |
| SG&A as percentage of revenue | 21.0% | |
| Adjusted EBITDA margin | 12.5-13.0% |
Projected year-over-year revenue growth in the second quarter of 2018 is approximately
8-10%. The acquisitions are expected to add $33-34 million of revenue in the second quarter. No significant labor disruption revenue is included in the second
quarter guidance, nor was any in the prior-year quarter.
Conference Call on May 3, 2018
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 first quarter 2018 financial results on Thursday, May 3, 2018, 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) 230-1074 in the U.S. or (612) 234-9960 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 May 3, 2018, and can be accessed until 11:59 p.m. Eastern Time on May 17, 2018, by calling (800)
475-6701 in the U.S. or (320) 365-3844 internationally, with access code 447387.
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, mid-revenue cycle solutions, 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. AMN Healthcare is committed to fostering and maintaining a diverse team that reflects the communities we serve. Our commitment to the inclusion of many different backgrounds,
experiences and perspectives enables our innovation and leadership in the healthcare services industry.
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
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 guidance for second quarter 2018 revenue, gross margin, SG&A expenses as a percentage
of revenue, adjusted EBITDA margin, the accretion from our recent acquisitions, market demand and our strategic positioning. 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, 2017,
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.
Director, Investor Relations
AMN Healthcare Services, Inc.
Condensed Consolidated Statements of Comprehensive Income
(in thousands, except per share amounts)
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| Revenue | $ | 522,489 | $ | 495,169 | $ | 509,076 | ||||||
| Cost of revenue | 354,665 | 333,393 | 346,984 | |||||||||
| Gross profit | 167,824 | 161,776 | 162,092 | |||||||||
| Gross margin | 32.1 | % | 32.7 | % | 31.8 | % | ||||||
| Operating expenses: | ||||||||||||
| Selling, general and administrative (SG&A) | 104,737 | 102,073 | 100,375 | |||||||||
| SG&A as a % of revenue | 20.0 | % | 20.6 | % | 19.7 | % | ||||||
| Depreciation and amortization | 7,886 | 7,668 | 8,520 | |||||||||
| Total operating expenses | 112,623 | 109,741 | 108,895 | |||||||||
| Income from operations | 55,201 | 52,035 | 53,197 | |||||||||
| Operating margin (1) | 10.6 | % | 10.5 | % | 10.4 | % | ||||||
| Interest expense, net, and other | 5,335 | 5,130 | 4,782 | |||||||||
| Income before income taxes | 49,866 | 46,905 | 48,415 | |||||||||
| Income tax expense | 7,185 | 14,897 | 7,248 | |||||||||
| Net income | $ | 42,681 | $ | 32,008 | $ | 41,167 | ||||||
| Net income as a % of revenue | 8.2 | % | 6.5 | % | 8.1 | % | ||||||
| Other comprehensive income (loss): | ||||||||||||
| Foreign currency translation and other | (19 | ) | 3 | 13 | ||||||||
| Cash flow hedge, net of income taxes | 43 | |||||||||||
| Other comprehensive income (loss) | (19 | ) | 46 | 13 | ||||||||
| Comprehensive income | $ | 42,662 | $ | 32,054 | $ | 41,180 | ||||||
| Net income per common share: | ||||||||||||
| Basic | $ | 0.89 | $ | 0.67 | $ | 0.86 | ||||||
| Diluted | $ | 0.87 | $ | 0.65 | $ | 0.84 | ||||||
| Weighted average common shares outstanding: | ||||||||||||
| Basic | 47,733 | 47,782 | 47,618 | |||||||||
| Diluted | 49,116 | 49,520 | 49,281 |
AMN Healthcare Services, Inc.
Supplemental Financial and Operating Data
(dollars in thousands, except per share data and operating data)
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| Revenue | ||||||||||||
| Nurse and allied solutions | $ | 338,179 | $ | 313,523 | $ | 321,360 | ||||||
| Locum tenens solutions | 103,117 | 102,843 | 108,142 | |||||||||
| Other workforce solutions | 81,193 | 78,803 | 79,574 | |||||||||
| $ | 522,489 | $ | 495,169 | $ | 509,076 | |||||||
| Reconciliation of Non-GAAP Items: | ||||||||||||
| Segment operating income (2) | ||||||||||||
| Nurse and allied solutions | $ | 51,805 | $ | 45,980 | $ | 48,154 | ||||||
| Locum tenens solutions | 9,958 | 12,219 | 12,394 | |||||||||
| Other workforce solutions | 19,851 | 19,857 | 19,366 | |||||||||
| 81,614 | 78,056 | 79,914 | ||||||||||
| Unallocated corporate overhead | 15,095 | 14,891 | 15,545 | |||||||||
| Adjusted EBITDA (3) | 66,519 | 63,165 | 64,369 | |||||||||
| Adjusted EBITDA margin (4) | 12.7 | % | 12.8 | % | 12.6 | % | ||||||
| Depreciation and amortization | 7,886 | 7,668 | 8,520 | |||||||||
| Share-based compensation | 2,864 | 2,681 | 2,517 | |||||||||
| Acquisition and integration costs | 568 | 781 | 135 | |||||||||
| Income from operations | 55,201 | 52,035 | 53,197 | |||||||||
| Interest expense, net, and other | 5,335 | 5,130 | 4,782 | |||||||||
| Income before income taxes | 49,866 | 46,905 | 48,415 | |||||||||
| Income tax expense | 7,185 | 14,897 | 7,248 | |||||||||
| Net income | $ | 42,681 | $ | 32,008 | $ | 41,167 | ||||||
| GAAP diluted net income per share (EPS) | $ | 0.87 | $ | 0.65 | $ | 0.84 | ||||||
| Adjustments: | ||||||||||||
| Amortization of intangible assets | 0.09 | 0.09 | 0.10 | |||||||||
| Acquisition and integration costs | 0.01 | 0.02 | 0.00 | |||||||||
| Debt financing related costs | 0.01 | 0.00 | 0.00 | |||||||||
| Tax effect on above adjustments | (0.03 | ) | (0.04 | ) | (0.04 | ) | ||||||
| Tax correction related to prior periods (5) | (0.05 | ) | 0.00 | 0.00 | ||||||||
| Tax law effect on deferred taxes (6) | 0.00 | 0.00 | (0.27 | ) | ||||||||
| Excess tax benefits (6) | (0.09 | ) | (0.09 | ) | 0.00 | |||||||
| Adjusted diluted EPS (7) | $ | 0.81 | $ | 0.63 | $ | 0.63 |
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| Gross Margin | ||||||||||||
| Nurse and allied solutions | 28.0 | % | 27.7 | % | 27.4 | % | ||||||
| Locum tenens solutions | 28.7 | % | 30.7 | % | 29.3 | % | ||||||
| Other workforce solutions | 53.6 | % | 55.0 | % | 53.1 | % | ||||||
| Operating Data: | ||||||||||||
| Nurse and allied solutions | ||||||||||||
| Average healthcare professionals on assignment (8) | 9,567 | 9,051 | 9,234 | |||||||||
| Locum tenens solutions | ||||||||||||
| Days filled (9) | 52,794 | 55,243 | 56,591 | |||||||||
| Revenue per day filled (10) | $ | 1,953 | $ | 1,862 | $ | 1,911 | ||||||
| As of March 31, | As of December 31, | |||||||||||
| 2018 | 2017 | 2017 | ||||||||||
| Leverage ratio (11) | 1.2 | 1.6 | 1.3 |
AMN Healthcare Services, Inc.
Condensed Consolidated Balance Sheets
(dollars in thousands)
| March 31, 2018 | December 31, 2017 | March 31, 2017 | ||||||||||
| Assets | ||||||||||||
| Current assets: | ||||||||||||
| Cash and cash equivalents | $ | 54,499 | $ | 15,147 | $ | 37,711 | ||||||
| Accounts receivable, net | 338,600 | 350,496 | 334,782 | |||||||||
| Accounts receivable, subcontractor | 39,027 | 41,012 | 48,838 | |||||||||
| Prepaid and other current assets | 57,244 | 67,498 | 50,893 | |||||||||
| Total current assets | 489,370 | 474,153 | 472,224 | |||||||||
| Restricted cash, cash equivalents and investments | 60,236 | 64,315 | 29,141 | |||||||||
| Fixed assets, net | 75,530 | 73,431 | 62,620 | |||||||||
| Other assets | 84,112 | 74,366 | 65,368 | |||||||||
| Goodwill | 340,596 | 340,596 | 340,564 | |||||||||
| Intangible assets, net | 222,708 | 227,096 | 241,130 | |||||||||
| Total assets | $ | 1,272,552 | $ | 1,253,957 | $ | 1,211,047 | ||||||
| Liabilities and stockholders equity | ||||||||||||
| Current liabilities: | ||||||||||||
| Accounts payable and accrued expenses | $ | 122,402 | $ | 130,319 | $ | 136,028 | ||||||
| Accrued compensation and benefits | 117,415 | 121,423 | 99,642 | |||||||||
| Current portion of notes payable | 3,750 | |||||||||||
| Deferred revenue | 8,746 | 8,384 | 8,840 | |||||||||
| Other current liabilities | 2,616 | 5,146 | 29,428 | |||||||||
| Total current liabilities | 251,179 | 265,272 | 277,688 | |||||||||
| Notes payable, less unamortized fees | 320,034 | 319,843 | 358,512 | |||||||||
| Deferred income taxes, net | 21,922 | 27,036 | 16,548 | |||||||||
| Other long-term liabilities | 80,201 | 79,279 | 81,494 | |||||||||
| Total liabilities | 673,336 | 691,430 | 734,242 | |||||||||
| Commitments and contingencies | ||||||||||||
| Stockholders equity | 599,216 | 562,527 | 476,805 | |||||||||
| Total liabilities and stockholders equity | $ | 1,272,552 | $ | 1,253,957 | $ | 1,211,047 |
| Three Months Ended | ||||||||||||
| March 31, | December 31, | |||||||||||
| 2018 | 2017 (12) | 2017 (12) | ||||||||||
| Net cash provided by operating activities | $ | 59,735 | $ | 44,684 | $ | 58,422 | ||||||
| Net cash used in investing activities | (9,613 | ) | (13,300 | ) | (11,316 | ) | ||||||
| Net cash used in financing activities | (14,970 | ) | (11,928 | ) | (13,369 | ) | ||||||
| Effect of exchange rates on cash | (19 | ) | 4 | 13 | ||||||||
| Net increase in cash, cash equivalents and restricted cash and cash equivalents | 35,133 | 19,460 | 33,750 | |||||||||
| Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 98,894 | 51,028 | 65,144 | |||||||||
| Cash, cash equivalents and restricted cash and cash equivalents at end of period | $ | 134,027 | $ | 70,488 | $ | 98,894 |
AMN Healthcare Services, Inc.
Additional Supplemental Non-GAAP Disclosures
Reconciliation of Guidance Adjusted EBITDA Margin to
Guidance Operating Margin
| Three Months Ending | ||||||||||||
| June 30, 2018 | ||||||||||||
| Low (13) | High (13) | |||||||||||
| Adjusted EBITDA margin | 12.5 | % | 13.0 | % | ||||||||
| Deduct: | ||||||||||||
| Share-based compensation | 0.6 | % | ||||||||||
| Acquisition and integration costs | 0.2 | % | ||||||||||
| EBITDA margin | 11.7 | % | 12.2 | % | ||||||||
| Depreciation and amortization | 1.9 | % | ||||||||||
| Operating margin | 9.8 | % | 10.3 | % |