Full Press Release Details
Country Healthcare Announces Fourth Quarter and Full Year 2017 Financial
BOCA RATON, Fla.--(BUSINESS WIRE)--February 28, 2018--Cross Country
Healthcare, Inc. (the "Company") (NASDAQ: CCRN) today announced
financial results for its fourth quarter and full year ended
FINANCIAL HIGHLIGHTS:
| Dollars in thousands, except per share amounts. | |||||||||||||||||||||||||||||||||||||||
| Q4 2017 | Variance Q4 2017 vs Q4 2016 | Full Year 2017 | Variance 2017 vs 2016 | ||||||||||||||||||||||||||||||||||||
| Revenue | $219,674 | (1)% | $865,048 | 4% | |||||||||||||||||||||||||||||||||||
| Gross profit margin* | 26.5% | 60 bps | 26.4% | (20) bps | |||||||||||||||||||||||||||||||||||
| Net income attributable to common shareholders | $27,950 | 455% | $37,513 | 371% | |||||||||||||||||||||||||||||||||||
| Diluted EPS | $0.77 | $1.01 | $1.01 | $0.86 | |||||||||||||||||||||||||||||||||||
| Adjusted EBITDA* | $12,301 | 2% | $43,403 | (3)% | |||||||||||||||||||||||||||||||||||
| Adjusted EPS* | $0.17 | $(0.03) | $0.61 | $(0.08) | |||||||||||||||||||||||||||||||||||
| Cash flows from operations | $16,803 | 891% | $45,508 | 51% |
* Refer to accompanying tables and discussion of Non-GAAP financial
The Company experienced weaker than expected results in the fourth
quarter of 2017 primarily in its Nurse and Allied Staffing business with
fewer overall placements and a lower renewal rate. The Company also
experienced a higher than expected reduction in premium rate business,
as well as greater disruptive effects from Hurricane Irma on fourth
quarter placements. While the Company expects some of the impact
associated with lower renewal rate and premium rate business to continue
to affect results in the first quarter of 2018, it believes these
pressures are ultimately short-term in nature, the overall trends for
the business are strong, and performance will improve as it moves
further into fiscal year 2018. Already, in the first quarter, the
Company is seeing an uptick in its renewal rate and an increase in
orders. The Company also expects to see additional improvement in its
Advantage RN business throughout 2018, which it believes will continue
to support higher capture rates within its Managed Service Programs and
support its long-term strategy.
"Cross Country has experienced tremendous growth over the last four
years and we expect to see growth continue as we progress into 2018, led
by our high growth, high margin education healthcare staffing business,"
said CEO William J. Grubbs, "While we expect near-term pressures on
top-line growth to dissipate, management has also moved decisively to
focus attention on improving costs and operational excellence, as
demonstrated by the recent changes to our organizational structure,
including the creation of a new Chief Operating Officer role, which we
believe will drive greater focus, accountability, and agility in our
decision-making and overall performance."
Fourth quarter consolidated revenue was $219.7 million, a decrease of 1%
year-over-year and 4% sequentially. Consolidated gross profit margin was
26.5%, up 60 basis points year-over-year and flat sequentially. Net
income attributable to common shareholders was $28.0 million, impacted
by noncash items including nonrecurring net income tax benefits of $34.5
million, partly offset by Physician Staffing impairment charges of $14.4
million ($12.1 million after taxes), compared to a net loss of $7.9
million in the prior year, including a noncash loss on the derivative
liability of $14.2 million. Diluted EPS was $0.77 per share compared to
a loss of $0.24 per share in the prior year. Adjusted EBITDA was $12.3
million or 5.6% of revenue, as compared with $12.0 million or 5.4% of
revenue in the prior year. Adjusted EPS was $0.17 in the current quarter
as compared to $0.20 in the prior year and $0.23 in the prior quarter.
For the year ended December 31, 2017, consolidated revenue was $865.0
million, an increase of 4% year-over-year. Consolidated gross profit
margin was 26.4%, down 20 basis points year-over-year. Net income
attributable to common shareholders was $37.5 million, compared to $8.0
million in the prior year. Adjusted EBITDA was $43.4 million or 5.0% of
revenue, as compared with $44.7 million or 5.4% of revenue in the prior
year. Adjusted EPS was $0.61 compared to $0.69 in the prior year.
Fourth quarter and full year results were impacted by noncash items
including a $42.5 million income tax benefit resulting from the reversal
of substantially all of the Company's valuation allowances on its net
deferred tax assets, $14.4 million of impairment charges related to
Physician Staffing, and $8.0 million of income tax expense attributable
to the Company's re-measurement of its deferred tax assets under the
2017 Tax Cuts and Jobs Act. Given the significant complexity of the new
tax legislation, the Company's estimate of the impact may be refined
Quarterly Business Segment Highlights
Nurse and Allied Staffing
Revenue from Nurse and Allied Staffing was $193.7 million, a slight
decrease from the prior year, and a decrease of 3% sequentially.
Contribution income was $19.2 million, up from $18.1 million in the
prior year. Average field FTEs increased to 7,521 from 7,156 in the
prior year. Revenue per FTE per day was $280 compared to $295 in the
prior year, primarily reflecting a change in the mix of business.
Revenue from Physician Staffing was $22.6 million, a decrease of 9%
year-over-year and sequentially, with the year-over-year decrease due to
changes in mix and the sequential decline due to volume. Contribution
income was $1.0 million, down from $2.3 million in the prior year. Total
days filled were 15,115 as compared with 14,521 in the prior year, with
growth in advanced practices partly offset by declines in physician
specialties. Revenue per day filled was $1,489 as compared with $1,599
in the prior year, representing the impact of a shift in mix of
specialties within physician staffing and growth in advanced practices,
which generally have a lower daily bill rate.
Other Human Capital Management Services
Revenue from Other Human Capital Management Services was $3.4 million, a
decrease of 8% year-over-year and an increase of 8% sequentially.
Contribution loss was $0.2 million compared to a loss of $0.3 million in
Cash Flow and Balance Sheet Highlights
Cash flow provided by operating activities for the current quarter was
$16.8 million compared to cash used of $2.1 million in the prior year.
Cash flow provided by operating activities for the full year was $45.5
million compared to $30.1 million in the prior year. At December 31,
2017, the Company had $25.5 million in cash and cash equivalents and a
$100.0 million term loan outstanding. There were no borrowings drawn on
its $115.0 million revolving credit facility, and $21.6 million of
letters of credit outstanding, leaving $93.4 million available for
borrowings under the revolving credit facility.
Outlook for First Quarter 2018
The guidance below applies only to management's expectations for the
first quarter of 2018. Though the Company does not provide full year
guidance, organic growth for the full year and continued margin
improvements are expected based on continued favorable market conditions
and demand for its services. In addition to the normal operating
leverage from anticipated revenue growth, the Company will be