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AMN Healthcare Announces Fourth Quarter and Full Year 2009 Results

March 4, 2010

SAN DIEGO, March 4 /PRNewswire-FirstCall/ -- AMN Healthcare Services, Inc. (NYSE: AHS) today announced operating results for the fourth quarter and full-year 2009. Financial highlights are as follows:

    
    
    
    
    (Dollars in millions, except per share amounts)
    
                                                              Full 
                                  Q4     % Chg     % Chg      Year   % Chg 
                                 2009  Q4 2008   Q3 2009      2009    2008
                                 ----  -------   -------     -----    -----
    Revenue                    $144.7      (51%)     (13%)   $759.8    (38%)
    -------                    ------     -----     -----    ------   -----
    Gross Profit                $41.2      (46%)     (10%)   $204.4    (36%)
    ------------                -----     -----     -----    ------   -----
    Net Loss                    ($2.7)       NM      (36%) ($122.2)      NM
    --------                    -----       ---     -----   -------     ---
    Loss per Share             ($0.08)       NM       33%   ($3.75)      NM
    --------------             ------       ---       ---    ------     ---
    Cash Flow from Operations    $5.6      (60%)     (71%)    $98.7      55%
    -------------------------    ----     -----     -----     -----     ---
    Adjusted EBITDA*            $10.7      (54%)        1%    $56.8    (41%)
    ----------------            -----     -----       ---     -----   -----
    Adjusted Diluted EPS*      ($0.02)      NM         NM     $0.32    (69%)
    ---------------------      ------      ---        ---     -----   -----
    
    * See notes (2) and (3) under "Supplemental Financial and Operating Data" 
    for a reconciliation of non-GAAP items.
    NM – Not meaningful
    
    

"I'm certain most would agree that 2009 represented the most challenging year in the history of the healthcare staffing industry. The unprecedented rise in unemployment and severe economic contraction wreaked havoc and resulted in precipitous drops in demand volumes unlike any other time.   However, amidst the turbulence, AMN took a proactive, disciplined and forward-looking approach to build stronger relationships with our customers and streamline our operating model and cost structure.  These efforts have resulted in strong adjusted EBITDA margins, improved gross margins and a healthy balance sheet," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "As we enter 2010, the industry is experiencing a period of stabilization, and AMN is poised to benefit from the managed services and preferred provider relationships we expanded over the past year, in addition to the operational synergies and agility we have achieved."

Full Year Business Highlights

  • Streamlined operating model and cost structure to improve future operating leverage
  • Reduced SG&A by $73 million (32%) over prior year
  • Achieved 7.5% adjusted EBITDA margin despite sharp revenue decline
  • Launched new corporate branding to rationalize and unify our portfolio of integrated services and brands
  • Generated operating cash flow of $99 million, significantly paid down debt and increased cash balance
  • Completed debt refinancing in December

For the fourth quarter of 2009, revenue was $145 million, a decrease of 51% from prior year and 13% from prior quarter. Fourth quarter revenue for the Nurse and Allied staffing segment was $74 million, a decrease of 64% from the same quarter last year and down 10% sequentially. The Locum Tenens staffing segment generated revenue of $63 million, a decrease of 18% from prior year and 17% from prior quarter. Fourth quarter Physician Permanent Placement revenue was $8 million, a decrease of 32% from prior year and 5% from prior quarter.

For the full year 2009, revenue was $760 million, a decrease of 38% from prior year. Nurse and Allied staffing segment revenue was $431 million, a decrease of 49% from prior year, Locum Tenens staffing segment revenue was $292 million, a decrease of 9% from prior year, and Physician Permanent Placement segment revenue was $37 million, a decrease of 28% from prior year.

Gross margin in the fourth quarter of 2009 was 28.4%, an increase of 270 bps from prior year and an increase of 100 bps compared to the previous quarter, driven primarily by an increase in gross margin in the Nurse and Allied segment. Full year gross margin was 26.9%, as compared to 26.0% for prior year due to the Locum Tenens and Physician Permanent Placement segments representing a greater portion of our business mix, along with increases in gross margin across all business segments.

Selling, general and administrative ("SG&A") expenses for the fourth quarter of 2009 were 22% as a percentage of revenue compared to 19% in the same quarter last year. For the full year, SG&A expenses (excluding restructuring costs of $11.3 million) were 21% as a percentage of revenue, as compared to 19% for 2008. Fourth quarter SG&A declined by $23 million, or 41%, over the same period in the prior year, and sequentially by $5 million, or 12%, due largely to cost-saving initiatives taking hold.

The fourth quarter tax provision reflects a true-up of the effective state tax rates, which reduced the full year 2009 effective income tax benefit rate from 28% reported in the third quarter to 26%. This had the impact of reducing the full year 2009 income tax benefit to $43 million, as compared to income tax expense of $27 million for prior year, reflecting effective income tax rates of 26% and 44% for these periods, respectively. The year-over-year change in the effective income tax rate was primarily attributable to the goodwill impairment charges recorded during 2009, a portion of which were permanently nondeductible for tax purposes.

For the fourth quarter, the company recorded a GAAP loss per share of $0.08 which includes $0.06 related to debt refinancing charges. Full year GAAP loss per share was $3.75, including the negative impacts of $3.78 for impairment charges, $0.21 for restructuring charges, and $0.02 for non-recurring legal expenses, in addition to the $0.06 for refinancing related charges. Average shares outstanding for the fourth quarter and full year 2009 were 32.6 million.

As of December 31, 2009, cash and cash equivalents totaled $27 million, compared to $11 million as of December 31, 2008. On December 23, 2009, the company entered into a new credit agreement, which includes a $40.0 million secured revolving credit facility maturing in December 2012 and a $110.0 million secured term loan maturing in December 2013. As of December 31, 2009, total term debt outstanding, net of discount, was $106 million, with zero outstanding on the revolver.

Business Trends and Outlook

During the fourth quarter and going into the first quarter, Nurse and Allied traveler count began to show consistent, modest week-over-week increases, and demand was above prior year levels. In Locum Tenens, volume and demand experienced declines going into the fourth quarter, but future demand appears to have stabilized since November. In Physician Permanent Placement, fourth quarter search activity was sequentially lower, in line with typical seasonal trends. Despite the stabilizing trends across the business segments, overall demand is still at relatively low levels. The primary drivers continuing to constrain demand remain the high national unemployment rate, continued overall economic weakness, and stagnant admissions levels. Based on these factors, first quarter consolidated revenue is expected to be flat compared with the prior quarter. As we look at the sequential revenues and volumes in each of our three segments, Nurse & Allied appears to be the strongest with slight sequential growth expected, and the other business lines are projected to be flat to slightly down sequentially.  

"While the trajectory of the recovery continues to be difficult to predict, we believe that our comprehensive breadth of service offerings, our stronger client contractual relationships and operational agility leave AMN poised to capture market share and deliver better profitability as the trends improve," added Nowakowski. "In addition, with our healthy balance sheet and recent debt refinancing, the company is well-positioned to focus on building future growth through long-term strategic investments in new synergistic opportunities to expand and diversify our business."

About AMN Healthcare Services

AMN Healthcare Services, Inc. is the nation's leading provider of comprehensive healthcare staffing and management services. As a leading provider of travel nurse and allied staffing services, locum tenens (temporary physician staffing) and physician permanent placement services, AMN Healthcare recruits and places healthcare professionals on assignments of variable lengths and in permanent positions with clients throughout the United States, who range from acute-care hospitals and physician practice groups to other healthcare settings, including rehabilitation centers, dialysis clinics, pharmacies, home health service providers and ambulatory surgery centers. For more information, visit http://www.amnhealthcare.com.

Conference Call on March 4, 2010

AMN Healthcare Services, Inc.'s fourth quarter 2009 conference call will be held on Thursday, March 4, 2010, 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) 230-1059 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 at 7:00 p.m. Eastern Time on March 4, 2010, and can be accessed until 11:59 p.m. Eastern Time on March 18, 2010, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 144662.

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. Such statements include expectations regarding first quarter revenue and stabilizing demand trends, as well as Ms. Nowakowski's comments concerning the Company's positioning to capture market share, deliver better profitability, and build future growth through long-term strategic investments. 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.

    
    
    
    
                              AMN Healthcare Services, Inc.
                    Condensed Consolidated Statements of Operations
                   (dollars in thousands, except per share amounts)
                                        (unaudited)
    
                             Three Months Ended        Twelve Months Ended
                                 December 31,              December 31,
                            2009     2008   % Chg      2009    2008   % Chg
                            ----     ----   -----      ----    ----   -----
    
    Revenue             $144,698 $295,902  (51.1%) $759,790 $1,217,200 (37.6%)
    Cost of revenue      103,545  219,966  (52.9%)  555,369    900,211 (38.3%)
      Gross profit        41,153   75,936  (45.8%)  204,421    316,989 (35.5%)
                            28.4%    25.7%             26.9%      26.0%
    Operating expenses:
       Selling, general
        and
        administrative    32,388   55,176  (41.3%)  157,241    230,656 (31.8%)
                            22.4%    18.6%             20.7%      18.9%
    
       Depreciation and
        amortization       3,408    3,581   (4.8%)   13,812     14,439  (4.3%)
       Restructuring
        charges                -        -      0%    11,270          -   100%
       Impairment charges      -        -      0%   175,707          -   100%
    
    
        Total operating
         expenses         35,796   58,757  (39.1%)  358,030    245,095  46.1%
                          ------   ------           -------    -------
    Income (loss) from
     operations            5,357   17,179  (68.8%) (153,609)    71,894    NM
                             3.7%     5.8%            (20.2%)      5.9%
    Interest expense, net  5,373    2,669  101.3%    11,955     10,690  11.8%
    
    Income (loss) before
     income taxes            (16)  14,510 (100.1%) (165,564)    61,204    NM
    Income tax expense
     (benefit)             2,706    6,886  (60.7%)  (43,387)    26,847    NM
                           -----    -----           -------     ------
    Net income (loss)    $(2,722)  $7,624     NM  $(122,177)   $34,357    NM
                         =======   ======         =========    =======
                            (1.9%)    2.6%            (16.1%)      2.8%
    Net income (loss) per
     common share:
           Basic          $(0.08)   $0.23     NM     $(3.75)     $1.03
                          ======    =====           ======      =====    NM
           Diluted        $(0.08)   $0.23     NM     $(3.75)     $1.02
                          ======    =====           ======      =====    NM
    
     Weighted average
      common shares
      outstanding:
           Basic          32,631   32,575    0.2%    32,615     33,375  (2.3%)
    
           Diluted        32,631   32,870   (0.7%)   32,615     33,811  (3.5%)
    
    NM – Not meaningful
    
    
    
                                  AMN Healthcare Services, Inc.
                            Supplemental Financial and Operating Data
                           (dollars in thousands, except operating data)
                                            (unaudited)
    
                         Three Months Ended           Twelve Months Ended
                            December 31,                  December 31,
                      2009   % of   2008   % of   2009   % of   2008   % of
                             Rev           Rev           Rev           Rev
    Revenue
      Nurse and allied
       healthcare
       staffing    $73,999       $207,313       $431,126        $843,747
      Locum tenens
       staffing     62,447         76,413        291,822         321,954
      Physician
       permanent
       placement
       services      8,252         12,176         36,842          51,499
                  $144,698       $295,902       $759,790      $1,217,200
                  ========       ========       ========      ==========
     
    Reconciliation
     of Non-
     GAAP Items:
    Segment
     Operating
     Income(1)
      Nurse and
       allied
       healthcare
       staffing     $7,686 10.4%  $19,502  9.4%  $38,076  8.8%   $85,470 10.1%
      Locum tenens
       staffing      6,459 10.3%    6,883  9.0%   28,814  9.9%    25,951  8.1%
      Physician
       permanent
       placement
       services      1,942 23.5%    3,533 29.0%    9,819  26.7%   15,375 29.9%
                     -----          -----          -----          ------
                    16,087 11.1%   29,918 10.1%   76,709  10.1%  126,796 10.4%
    Unallocated
     corporate
     overhead        5,374          6,767         19,936          31,141
                     -----          -----         ------          ------
    Adjusted
     EBITDA(2)      10,713  7.4%   23,151  7.8%   56,773  7.5%    95,655  7.9%
    
    Depreciation
     and
     amortization    3,408          3,581         13,812          14,439
    Stock-based
     compensation    1,948          2,391          8,709           9,322
    Restructuring
     charges             -              -         11,270               -
    Impairment
     charges             -              -        175,707               -
    Unallocated
     non-
     recurring
     legal
     expenses            -              -            884               -
    Interest
     expense,
     net             5,373          2,669         11,955          10,690
                     -----          -----         ------          ------
    Income
     (loss)
     before
     income
     taxes             (16)        14,510       (165,564)         61,204
    Income tax
     expense
     (benefit)       2,706          6,886        (43,387)         26,847
    Net income
     (loss)        $(2,722)        $7,624      $(122,177)        $34,357
                   =======         ======      =========         =======
    
    
    GAAP based
     diluted
     net income
     (loss)
     per share
     (EPS)          $(0.08)                       $(3.75)
      Adjustments:       -
      Restructuring
       charges           -                          0.21
      Non-
       recurring
       legal
       expenses          -                          0.02
      Impairment
       charges           -                          3.78
      Refinancing
       related
       charges        0.06                          0.06
    Adjusted
     diluted
     earnings
     per
     share(3)       $(0.02)                        $0.32
    
    
    
                          Three Months Ended           Twelve Months Ended
                             December 31,                  December 31,
                         2009    2008    % Chg         2009     2008    % Chg
    Gross Margin
       Nurse and
        allied
        healthcare
        staffing        27.0%     23.6%                24.4%     23.9%
       Locum tenens
        staffing        26.0%     26.0%                26.4%     26.3%
       Physician
        permanent
        placement
        services        60.0%     58.7%                59.6%     59.4%
    
    Operating Data:
    ---------------
    Nurse and
     allied
     healthcare
     staffing
        Average
         travelers
         on
         assignment(4) 2,396     6,865    (65.1%)     3,562     7,036  (49.4%)
        Revenue per
         traveler
         per day(5)  $335.70   $328.25      2.3%    $331.60   $327.65    1.2%
        Gross
         profit per
         traveler
         per day(5)   $90.52    $77.41     16.9%     $81.06    $78.34    3.5%
    
    Locum tenens
      staffing
        Days
         filled(6)    43,276    53,145    (18.6%)   203,413   222,341   (8.5%)
        Revenue per
         day
         filled(6) $1,442.99 $1,437.82      0.4% $1,434.63 $1,448.02   (0.9%)
        Gross
         profit per
         day
         filled(6)   $375.55   $374.37      0.3%    $378.86   $380.68   (0.5%)
    
    
                                    As of December 31,
                                 2009                  2008
    Leverage Ratio(7)             1.9                   1.5
    
    (1)   Segment Operating Income represents net income (loss) plus 
          interest expense (net of interest income), income taxes, 
          depreciation and amortization, restructuring charges, impairment 
          charges, non-recurring legal expenses, unallocated corporate 
          expenses, and stock-based compensation expense. Management believes 
          that Segment Operating Income is an industry wide financial measure 
          that is useful both to management and investors when evaluating the 
          company's performance. Management also uses Segment Operating Income
          for planning purposes. Segment Operating Income is not necessarily 
          comparable to other similarly titled captions of other companies due
          to potential inconsistencies in the method of calculation and 
          allocation of costs.
    (2)   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 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 considers measures used in credit 
          facilities. However, adjusted EBITDA is not intended to represent 
          cash flows for the period, nor has it been presented as an 
          alternative to income (loss) from operations or net income (loss) 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. 
    (3)   Adjusted diluted earnings per share represents GAAP EPS plus 
          restructuring and impairment charges, non-recurring legal expenses 
          and refinancing related charges. The per share adjustments used in
          the adjusted EPS calculation are net of the Company's estimated
          statutory tax rate. 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.
    (4)   Average travelers on assignment represents the average number of 
          nurse and allied healthcare professionals on assignment during the 
          period presented.
    (5)   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.
    (6)   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.
    (7)   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)
    
                                  December 31,   September 30,  December 31,
                                     2009            2009          2008
    
    Assets
    Current assets:
      Cash and cash equivalents     $27,053         $22,621       $11,316
      Accounts receivable, net       89,498          96,410       182,562
      Prepaid expenses                6,550           6,748         9,523
      Income taxes receivable         3,900           2,108         3,440
      Deferred income taxes, net      8,534          17,805        18,085
      Other current assets            1,902           2,782         4,901
                                      -----           -----         -----
        Total current assets        137,437         148,474       229,827
    
    
    Restricted cash and cash
     equivalents                     22,025               -             -
    Fixed assets, net                19,970          21,581        24,018
    Deposits and other assets        14,368          12,488        13,252
    Goodwill                         79,868          79,868       252,875
    Intangible assets, net          115,336         116,537       122,845
                                    -------         -------       -------
    
             Total assets          $389,004        $378,948      $642,817
                                   ========        ========      ========
    
    Liabilities and stockholders'
     equity
    Current liabilities:
      Bank overdraft                      -               -        $3,995
      Accounts payable and accrued
       expenses                      18,057          18,929        24,420
      Accrued compensation and
       benefits                      24,054          29,431        44,871
      Revolving credit facility           -               -        31,500
      Current portion of notes
       payable                        5,500          10,845        14,580
      Deferred revenue                5,084           5,404         7,184
      Other current liabilities      10,404          14,502        14,722
                                     ------          ------        ------
        Total current liabilities    63,099          79,111       141,272
    
    Notes payable, less current
     portion and discount           100,121          66,425       100,236
    Deferred income taxes, net          789           4,615        58,466
    Other long-term liabilities      54,151          57,277        58,710
                                     ------          ------        ------
             Total liabilities      218,160         207,428       358,684
                                    -------         -------       -------
    
    Stockholders' equity            170,844         171,520       284,133
                                    -------         -------       -------
    
             Total liabilities and
              stockholders' equity $389,004        $378,948      $642,817
                                   ========        ========      ========
    
    
    
                                AMN Healthcare Services, Inc.
                      Condensed Consolidated Statements of Cash Flows
                                     (in thousands)
                                       (unaudited)
    
                         Three Months Ended           Twelve Months Ended
                   December 31,    December 31,   December 31,    December 31,
                       2009           2008           2009            2008
                       ----           ----           ----            ----
    
    Net cash
     provided by
     operating
     activities       $5,582       $13,802        $98,732        $63,694
    
    Net cash used
     in investing
     activities      (22,887)       (1,819)       (29,245)       (48,247)
    
    Net cash
     provided
     (used in)
     financing
     activities       21,721        (8,296)       (53,810)       (22,334)
    
    Effect of
     exchange
     rates on cash        16          (176)            60           (292)
                        ----          ----            ---            ---
    
      Net increase
       (decrease) in
       cash and
       cash
       equivalents     4,432         3,511         15,737         (7,179)
    
      Cash and cash
       equivalents at
       beginning
       of period      22,621         7,805         11,316         18,495
                      ------         -----         ------         ------
    
      Cash and cash
       equivalents at
       end of
       period        $27,053       $11,316        $27,053        $11,316
                     =======       =======        =======        =======
    
    
    

Contact:

Amy C. Chang

Vice President, Investor Relations

866.861.3229



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SOURCE AMN Healthcare Services, Inc.

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