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AMN Healthcare Announces Third Quarter 2021 Results

November 4, 2021

Quarterly revenue of $878 million;

GAAP EPS of $1.54 and adjusted EPS of $1.73

DALLAS--(BUSINESS WIRE)-- AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in total talent solutions for healthcare organizations across the United States, today announced its third quarter 2021 financial results. Financial highlights are as follows:

Dollars in millions, except per share amounts.

 

Q3 2021

% Change Q3
2020

YTD September
30, 2021

% Change YTD
September 30,
2020

Revenue

$877.8

59%

$2,621.2

49%

Gross profit

$305.9

66%

$875.3

50%

Net income

$74.0

184%

$211.2

244%

GAAP diluted EPS

$1.54

182%

$4.40

241%

Adjusted diluted EPS*

$1.73

112%

$5.07

109%

Adjusted EBITDA*

$138.4

80%

$412.8

78%

* See “Non-GAAP Measures” below for a discussion of our use of non-GAAP items and the table entitled “Non-GAAP Reconciliation Tables” for a reconciliation of non-GAAP items.

Business Highlights

  • Revenue from all segments exceeded guidance in the third quarter, demonstrating the significant value of AMN's Total Talent Solutions and the superior delivery of our team.
  • Severe workforce shortages and growing patient volumes have elevated healthcare labor demand to unprecedented levels, leading to our record-high guidance for the fourth quarter.
  • Revenue for the third quarter was $878 million, 59% above prior year and 11% above the high end of our guidance range.
  • Adjusted EBITDA grew 80% year over year on 59% revenue growth.
  • With this strong performance, we are investing significantly in our team members and increasing support for our clients, healthcare professionals and communities.

"We are deeply grateful for the hard work of all healthcare professionals and organizations and the incredibly talented team at AMN. Our country is experiencing the most severe healthcare labor shortage in history, and it will likely persist for many years to come and forever change the workforce management paradigm for healthcare organizations," said Susan R. Salka, Chief Executive Officer of AMN Healthcare. "With an expectation of this environment continuing for the foreseeable future, our team is rapidly deploying digital solutions, automation and hiring a record number of new team members to enable placement of healthcare professionals now and evolve AMN's solutions to meet this higher demand long term.

"As the industry leader with the most diverse staffing and workforce technology solutions, AMN Healthcare is well positioned to invest in the future," Ms. Salka said. "We carry a great sense of compassion, urgency and responsibility to take care of our team members, communities, healthcare professionals, and clients. The healthcare community has a long road ahead to endure the workforce challenges created by the pandemic. The essential nature of AMN's solutions and the importance of partnering with healthcare organizations has been elevated to a new level. The growing and dedicated AMN team is stronger than ever and working hard every day to ensure we are aiding in the well-being of all and empowering the future of care."

Third Quarter 2021 Results

Consolidated revenue for the quarter was $878 million, a 59% increase over prior year and 2% above prior quarter. Net income was $74 million (8.4% of revenue), or $1.54 per diluted share, compared with $26 million (4.7% of revenue), or $0.55 per diluted share, in the same quarter last year. Adjusted diluted EPS in the third quarter was $1.73 compared with $0.82 in the same quarter of the prior year.

Revenue for the Nurse and Allied Solutions segment was $627 million up 64% year over year and up slightly from the prior quarter. Travel nurse staffing revenue grew 56% year over year, and allied division revenue was up 62% over that span. Segment revenue included $23 million related to labor disruption activities.

The Physician and Leadership Solutions segment reported revenue of $151 million, growing 38% year over year and 8% sequentially. Locum tenens revenue was $89 million, up 31% year over year and 14% sequentially. Interim leadership revenue grew by 59% year over year and was flat sequentially. Our physician and leadership search businesses produced revenue growth of 33% year over year and 4% sequentially.

Technology and Workforce Solutions segment revenue reached $100 million, an increase of 67% year over year. Language services revenue was $47 million in the quarter, up 33% over prior year. Vendor management systems revenue was $33 million growing 113% year over year. Our outsourced solutions, including recruitment process outsourcing, also produced exceptionally strong growth amid rising demand.

Consolidated gross margin was 34.8%, 130 basis points higher year over year and up 210 basis points sequentially. Gross margin improved year over year and sequentially due primarily to a favorable workers' compensation actuarial adjustment and high-margin labor disruption project fees.

Consolidated SG&A expenses were $174 million, or 19.8% of revenue, compared with $111 million, or 20.2% of revenue, in the same quarter last year. SG&A was $157 million, or 18.3% of revenue, in the previous quarter. The year-over-year and sequential increase in SG&A costs was driven primarily by higher employee and related expenses as the Company ramped hiring to serve strong demand. SG&A margin declined year over year due to operating leverage on increased revenue.

Income from operations was $106 million with an operating margin of 12.1%, compared with $46 million and 8.4%, respectively, in the same quarter last year. Adjusted EBITDA was $138 million, a year-over-year increase of 80%. Adjusted EBITDA margin was 15.8%, representing an increase of 190 basis points year over year.

At September 30, 2021, cash and cash equivalents totaled $137 million. Cash flow from operations was $17 million for the quarter, and capital expenditures were $16 million. The Company ended the quarter with total debt outstanding of $850 million and a leverage ratio of 1.5 to 1 as defined under our credit agreement.

Fourth Quarter 2021 Outlook

Metric

Guidance*

Consolidated revenue

$1,130- $1,150 million

Gross margin

31.8% - 32.3%

SG&A as percentage of revenue

17.5% - 17.9%

Operating margin

11.8% - 12.3%

Adjusted EBITDA margin

15.3% - 15.8%

*Note: Guidance percentage metrics are approximate. For a reconciliation of adjusted EBITDA margin, see the table entitled “Reconciliation of Guidance Operating Margin to Guidance Adjusted EBITDA Margin” below.

Revenue in the fourth quarter of 2021 is expected to be approximately 80% higher than prior year. Nurse and Allied Solutions segment revenue is expected to grow 96-100% year over year. For the Physician and Leadership Solutions segment, revenue is expected to be approximately 35% higher than prior year. Technology and Workforce Solutions segment revenue is expected to grow by approximately 50% compared with the year-ago period.

Fourth quarter estimates for certain other financial items include depreciation of $10.5 million, non-cash amortization expense of $16 million, stock-based compensation expense of $7 million, interest expense of $10 million, integration and other expenses of $7 million, and an adjusted tax rate of 27%. Revenue guidance includes $14 million from labor disruption activities.

Conference Call on November 4, 2021

AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in total talent solutions for healthcare, will host a conference call to discuss its third quarter 2021 financial results and fourth quarter 2021 outlook on Thursday, November 4, 2021 at 5:00 p.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare’s website at http://ir.amnhealthcare.com. 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 (844) 200-6205 in the U.S. or +1-929-526-1599 for international callers and using passcode 634975. 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 beginning at 8:00 p.m. Eastern Time on November 4, 2021 and can be accessed until 11:59 p.m. Eastern Time on November 18, 2021 by calling (866) 813-9403 in the U.S. or +44 204 525 0658 internationally, with access code 281414.

About AMN Healthcare

AMN Healthcare is the leader and innovator in total talent solutions for healthcare organizations across the nation. The Company provides 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 total talent solutions include managed services programs, clinical and interim healthcare leaders, temporary staffing, executive search solutions, vendor management systems, recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, credentialing, and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools 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 http://ir.amnhealthcare.com.

Non-GAAP Measures

This earnings release and the non-GAAP reconciliation tables included with the earnings release contain 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, (3) adjusted net income and (4) adjusted diluted EPS. The Company provides such non-GAAP financial measures because management believes that they are useful to both 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, adjusted net income and adjusted diluted EPS serve as industry-wide financial measures. The Company uses adjusted EBITDA for making financial decisions, allocating resources and for determining certain incentive compensation objectives. 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 “Non-GAAP Reconciliation Tables” under the caption entitled “Reconciliation of Non-GAAP Items” and the footnotes thereto or on the Company’s website at https://ir.amnhealthcare.com/financials/quarterly-results/default.aspx. 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 the impact and contributions of the AMN team, healthcare utilization, the duration and severity of the labor shortage, the changing workforce management paradigm, current demand drivers, fourth quarter 2021 revenue projections for our travel nurse and allied businesses and each of our Nurse and Allied Solutions, Physician and Leadership Solutions and Technology and Workforce Solutions segments, and our fourth quarter 2021 guidance for consolidated revenue, gross margin, operating margin, SG&A as a percent of revenue, adjusted EBITDA margin, depreciation expense, non-cash amortization expense, stock-based compensation expense, interest expense, integration and other expenses, and adjusted tax rate. 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 also identified by words such as “believe,” "project," “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.

The targets and expectations noted in this release depend upon, among other factors, (i) the magnitude and duration of the effects of the COVID-19 pandemic on demand and supply trends, our business, its financial condition and our results of operations, (ii) our ability to effectively address client demand by attracting and placing nurses and other clinicians, (iii) our ability to recruit and retain sufficient quality healthcare professionals at reasonable costs, (iv) our ability to anticipate and quickly respond to changing marketplace conditions, such as alternative modes of healthcare delivery, reimbursement, or client needs and requirements, including mandatory vaccination, (v) our ability to manage the pricing impact that the COVID-19 pandemic and consolidation of healthcare delivery organizations may have on our business, (vi) the duration of the period that hospitals and other healthcare entities adjust their utilization of temporary employees, physicians, leaders and other workforce technology applications as a result of the suspension of or restrictions placed on non-essential and elective healthcare as a result of the COVID-19 pandemic, (vii) the duration of the period that individuals may continue to forego non-essential and elective healthcare as “safer at home” restrictions and recommendations lift, (viii) our ability to develop and evolve our current technology offerings and capabilities and implement new infrastructure and technology systems to optimize our operating results and manage our business effectively, (ix) our ability to comply with extensive and complex federal and state laws and regulations related to the conduct of our operations, costs and payment for services and payment for referrals as well as laws regarding employment practices, (x) our ability to consummate and effectively incorporate acquisitions into our business, (xi) the extent to which “shelter-in-place” orders, quarantines and restrictions on travel and mass gatherings that were ordered earlier in the year to slow the spread of the COVID-19 virus may be reinstituted as infection rates continue to climb in many parts of the country, (xii) the extent and duration of the period that a significant spike in unemployment that has resulted from the COVID-19 pandemic will cause an increase in under- and uninsured patients and a corresponding reduction in overall healthcare utilization and demand for our services, (xiii) the extent to which the COVID-19 pandemic may disrupt our operations due to the unavailability of our employees or healthcare professionals due to illness, risk of illness, quarantines, travel restrictions, mandatory vaccination requirements, or other factors that limit our existing or potential workforce and pool of candidates, and (xiv) the severity and duration of the impact the COVID-19 pandemic has on the financial condition and cash flow of many hospitals and healthcare systems such that it impairs their ability to make payments to us, timely or otherwise, for services rendered.

For a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above that could cause actual results to differ from those implied by the forward-looking statements contained in this press release, please refer to our most recent Annual Report on Form 10-K for the year ended December 31, 2020. 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.

AMN Healthcare Services, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

(unaudited)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

Revenue

$

877,800

 

 

$

551,631

 

 

$

857,445

 

 

$

2,621,190

 

 

$

1,762,443

 

Cost of revenue

571,935

 

 

366,998

 

 

576,902

 

 

1,745,914

 

 

1,178,204

 

Gross profit

305,865

 

 

184,633

 

 

280,543

 

 

875,276

 

 

584,239

 

Gross margin

34.8

%

 

33.5

%

 

32.7

%

 

33.4

%

 

33.1

%

Operating expenses:

 

 

 

 

 

 

 

 

 

Selling, general and administrative (SG&A)

173,932

 

 

111,235

 

 

156,629

 

 

491,773

 

 

394,537

 

SG&A as a % of revenue

19.8

%

 

20.2

%

 

18.3

%

 

18.8

%

 

22.4

%

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization (exclusive of depreciation included in cost of revenue)

26,104

 

 

26,936

 

 

24,740

 

 

74,098

 

 

69,096

 

Total operating expenses

200,036

 

 

138,171

 

 

181,369

 

 

565,871

 

 

463,633

 

Income from operations

105,829

 

 

46,462

 

 

99,174

 

 

309,405

 

 

120,606

 

Operating margin (1)

12.1

%

 

8.4

%

 

11.6

%

 

11.8

%

 

6.8

%

 

 

 

 

 

 

 

 

 

 

Interest expense, net, and other (2)

5,223

 

 

12,564

 

 

10,111

 

 

24,278

 

 

35,061

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

100,606

 

 

33,898

 

 

89,063

 

 

285,127

 

 

85,545

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

26,583

 

 

7,831

 

 

22,293

 

 

73,956

 

 

24,188

 

Net income

$

74,023

 

 

$

26,067

 

 

$

66,770

 

 

$

211,171

 

 

$

61,357

 

Net income as a % of revenue

8.4

%

 

4.7

%

 

7.8

%

 

8.1

%

 

3.5

%

 

 

 

 

 

 

 

 

 

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

Foreign currency translation and other

11

 

 

(14

)

 

3

 

 

(10

)

 

(119

)

Other comprehensive income (loss)

11

 

 

(14

)

 

3

 

 

(10

)

 

(119

)

 

 

 

 

 

 

 

 

 

 

Comprehensive income

$

74,034

 

 

$

26,053

 

 

$

66,773

 

 

$

211,161

 

 

$

61,238

 

 

 

 

 

 

 

 

 

 

 

Net income per common share:

 

 

 

 

 

 

 

 

 

Basic

$

1.55

 

 

$

0.55

 

 

$

1.40

 

 

$

4.43

 

 

$

1.29

 

Diluted

$

1.54

 

 

$

0.55

 

 

$

1.39

 

 

$

4.40

 

 

$

1.29

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

47,737

 

 

47,476

 

 

47,659

 

 

47,666

 

 

47,406

 

Diluted

48,080

 

 

47,676

 

 

48,019

 

 

48,022

 

 

47,647

 

 

 

 

 

 

 

 

 

 

 

AMN Healthcare Services, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)

(unaudited)

 

 

September 30,
2021

 

December 31,
2020

 

September 30,
2020

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

137,041

 

$

29,213

 

$

58,419

Accounts receivable, net

 

570,101

 

 

376,099

 

 

352,746

Accounts receivable, subcontractor

 

141,626

 

 

73,985

 

 

56,300

Prepaid and other current assets

 

50,763

 

 

54,438

 

 

46,238

Total current assets

 

899,531

 

 

533,735

 

 

513,703

Restricted cash, cash equivalents and investments

 

63,603

 

 

61,347

 

 

60,898

Fixed assets, net

 

127,762

 

 

116,174

 

 

112,752

Operating lease right-of-use assets

 

36,487

 

 

77,735

 

 

81,082

Other assets

 

157,909

 

 

135,120

 

 

125,831

Goodwill

 

893,283

 

 

864,485

 

 

869,941

Intangible assets, net

 

530,422

 

 

564,911

 

 

580,658

Total assets

$

2,708,997

 

$

2,353,507

 

$

2,344,865

 

 

 

 

 

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued expenses

$

284,094

 

$

167,881

 

$

152,935

Accrued compensation and benefits

 

321,938

 

 

213,414

 

 

184,736

Current portion of notes payable

 

 

 

4,688

 

 

9,375

Current portion of operating lease liabilities

 

14,396

 

 

15,032

 

 

15,338

Deferred revenue

 

17,904

 

 

11,004

 

 

11,900

Other current liabilities

 

2,854

 

 

10,938

 

 

11,884

Total current liabilities

 

641,186

 

 

422,957

 

 

386,168

Revolving credit facility

 

 

 

 

 

40,000

Notes payable, net of unamortized fees and premium

 

842,027

 

 

857,961

 

 

854,533

Deferred income taxes, net

 

61,187

 

 

67,205

 

 

79,681

Operating lease liabilities

 

15,004

 

 

77,800

 

 

81,674

Other long-term liabilities

 

107,115

 

 

107,907

 

 

95,736

Total liabilities

 

1,666,519

 

 

1,533,830

 

 

1,537,792

 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

1,042,478

 

 

819,677

 

 

807,073

 

 

 

 

 

 

Total liabilities and stockholders’ equity

$

2,708,997

 

$

2,353,507

 

$

2,344,865

 

 

 

 

 

 

AMN Healthcare Services, Inc.

Summary Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

 

2020

 

 

2021

 

 

2021

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

16,746

 

 

 

$

88,710

 

 

 

$

171,494

 

 

 

$

227,371

 

 

 

$

216,981

 

 

Net cash used in investing activities

(25,408

)

 

 

(15,196

)

 

 

(56,403

)

 

 

(79,017

)

 

 

(528,458

)

 

Net cash provided by (used in) financing activities

(527

)

 

 

(62,437

)

 

 

(55,470

)

 

 

(31,230

)

 

 

266,557

 

 

Effect of exchange rates on cash

11

 

 

 

(14

)

 

 

3

 

 

 

(10

)

 

 

(119

)

 

Net increase (decrease) in cash, cash equivalents and restricted cash

(9,178

)

 

 

11,063

 

 

 

59,624

 

 

 

117,114

 

 

 

(45,039

)

 

Cash, cash equivalents and restricted cash at beginning of period

210,282

 

 

 

97,860

 

 

 

150,658

 

 

 

83,990

 

 

 

153,962

 

 

Cash, cash equivalents and restricted cash at end of period

$

201,104

 

 

 

$

108,923

 

 

 

$

210,282

 

 

 

$

201,104

 

 

 

$

108,923

 

 

AMN Healthcare Services, Inc.

Non-GAAP Reconciliation Tables

(dollars in thousands, except per share data)

(unaudited)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

Reconciliation of Non-GAAP Items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

74,023

 

 

$

26,067

 

 

$

66,770

 

 

$

211,171

 

 

$

61,357

 

Income tax expense

26,583

 

 

7,831

 

 

22,293

 

 

73,956

 

 

24,188

 

Income before income taxes

100,606

 

 

33,898

 

 

89,063

 

 

285,127

 

 

85,545

 

Interest expense, net, and other (2)

5,223

 

 

12,564

 

 

10,111

 

 

24,278

 

 

35,061

 

Income from operations

105,829

 

 

46,462

 

 

99,174

 

 

309,405

 

 

120,606

 

Depreciation and amortization

26,104

 

 

26,936

 

 

24,740

 

 

74,098

 

 

69,096

 

Depreciation (included in cost of revenue) (3)

686

 

 

481

 

 

616

 

 

1,773

 

 

981

 

Share-based compensation

2,589

 

 

3,772

 

 

6,019

 

 

17,895

 

 

15,046

 

Acquisition, integration, and other costs (4)

3,143

 

 

(791

)

 

2,999

 

 

9,644

 

 

25,650

 

Adjusted EBITDA (5)

$

138,351

 

 

$

76,860

 

 

$

133,548

 

 

$

412,815

 

 

$

231,379

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA margin (6)

15.8

%

 

13.9

%

 

15.6

%

 

15.7

%

 

13.1

%

 

 

 

 

 

 

 

 

 

 

Net income

$

74,023

 

 

$

26,067

 

 

$

66,770

 

 

$

211,171

 

 

$

61,357

 

Adjustments:

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

16,011

 

 

19,572

 

 

15,806

 

 

47,018

 

 

48,071

 

Acquisition, integration, and other costs (4)

3,143

 

 

(791

)

 

2,999

 

 

9,644

 

 

25,650

 

Fair value changes of equity investments and instruments (2)

(5,412

)

 

 

 

 

 

(6,683

)

 

1,891

 

Debt financing related costs

 

 

1,773

 

 

 

 

158

 

 

1,773

 

Tax effect on above adjustments

(3,573

)

 

(5,760

)

 

(4,889

)

 

(13,036

)

 

(20,536

)

Tax effect of COLI fair value changes (7)

(600

)

 

(1,158

)

 

(1,093

)

 

(2,779

)

 

(219

)

Excess tax benefits related to equity awards (8)

(230

)

 

(791

)

 

(877

)

 

(1,783

)

 

(2,027

)

Adjusted net income (9)

$

83,362

 

 

$

38,912

 

 

$

78,716

 

 

$

243,710

 

 

$

115,960

 

 

 

 

 

 

 

 

 

 

 

GAAP diluted net income per share (EPS)

$

1.54

 

 

$

0.55

 

 

$

1.39

 

 

$

4.40

 

 

$

1.29

 

Adjustments

0.19

 

 

0.27

 

 

0.25

 

 

0.67

 

 

1.14

 

Adjusted diluted EPS (10)

$

1.73

 

 

$

0.82

 

 

$

1.64

 

 

$

5.07

 

 

$

2.43

 

AMN Healthcare Services, Inc.

Supplemental Segment Financial and Operating Data

(dollars in thousands, except operating data)

(unaudited)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

September 30,

 

June 30,

 

September 30,

 

2021

 

2020

 

2021

 

2021

 

2020

Revenue

 

 

 

 

 

 

 

 

 

Nurse and allied solutions

$

627,049

 

 

$

382,699

 

 

$

624,485

 

 

$

1,908,195

 

 

$

1,251,509

 

Physician and leadership solutions

150,663

 

 

109,116

 

 

139,104

 

 

430,523

 

 

355,580

 

Technology and workforce solutions

100,088

 

 

59,816

 

 

93,856

 

 

282,472

 

 

155,354

 

 

$

877,800

 

 

$

551,631

 

 

$

857,445

 

 

$

2,621,190

 

 

$

1,762,443

 

 

 

 

 

 

 

 

 

 

 

Segment operating income (11)

 

 

 

 

 

 

 

 

 

Nurse and allied solutions

$

92,564

 

 

$

52,923

 

 

$

89,674

 

 

$

283,768

 

 

$

173,706

 

Physician and leadership solutions

19,301

 

 

15,538

 

 

21,849

 

 

62,366

 

 

45,432

 

Technology and workforce solutions

47,210

 

 

25,680

 

 

42,653

 

 

131,952

 

 

62,814

 

 

159,075

 

 

94,141

 

 

154,176

 

 

478,086

 

 

281,952

 

Unallocated corporate overhead (12)

20,724

 

 

17,281

 

 

20,628

 

 

65,271

 

 

50,573

 

Adjusted EBITDA (5)

$

138,351

 

 

$

76,860

 

 

$

133,548

 

 

$

412,815

 

 

$

231,379

 

 

 

 

 

 

 

 

 

 

 

Gross Margin

 

 

 

 

 

 

 

 

 

Nurse and allied solutions

29.3

%

 

27.4

%

 

26.6

%

 

27.6

%

 

27.6

%

Physician and leadership solutions

34.8

%

 

36.7

%

 

36.6

%

 

36.1

%

 

36.6

%

Technology and workforce solutions

69.4

%

 

66.1

%

 

67.7

%

 

68.3

%

 

69.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Data:

 

 

 

 

 

 

 

 

 

Nurse and allied solutions

 

 

 

 

 

 

 

 

 

Average travelers on assignment (13)

11,972

 

 

8,916

 

 

12,555

 

 

12,206

 

 

10,048

 

 

 

 

 

 

 

 

 

 

 

Physician and leadership solutions

 

 

 

 

 

 

 

 

 

Days filled (14)

44,147

 

 

35,802

 

 

39,368

 

 

123,619

 

 

108,701

 

Revenue per day filled (15)

$

2,016

 

 

$

1,900

 

 

$

1,977

 

 

$

2,048

 

 

$

1,925

 

 

As of September 30,

 

As of December 31,

 

2021

 

2020

 

2020

Leverage ratio (16)

1.5

 

2.6

 

2.6

 

 

 

 

 

 

AMN Healthcare Services, Inc.

Additional Supplemental Non-GAAP Disclosure

Reconciliation of Guidance Operating Margin to Guidance

Adjusted EBITDA Margin

(unaudited)

 

 

 

Three Months Ended

 

December 31, 2021

 

Low(17)

 

High(17)

 

 

 

 

Operating margin

11.8

%

 

12.3

%

Depreciation and amortization

2.3

%

 

2.3

%

EBITDA margin

14.1

%

 

14.6

%

Share-based compensation

0.6

%

 

0.6

%

Acquisition, integration, and other costs

0.6

%

 

0.6

%

Adjusted EBITDA margin

15.3

%

 

15.8

%

(1)

Operating margin represents income from operations divided by revenue.

(2)

Changes in the fair value of equity investments and instruments are recognized in interest expense, net, and other. Since the changes in fair value are unrelated to the Company’s operating performance, we exclude the impact from the calculation of adjusted net income and adjusted diluted EPS.

(3)

A portion of depreciation expense for AMN Language Services (formerly known as Stratus Video, which was acquired in February 2020 and has since been rebranded) is included in cost of revenue. We exclude the impact of depreciation included in cost of revenue from the calculation of adjusted EBITDA.

(4)

Acquisition, integration, and other costs include acquisition and integration costs, net changes in the fair value of contingent consideration liabilities for recently acquired companies, extraordinary legal expenses, and restructuring expenses, which we exclude from the calculation of adjusted EBITDA, adjusted net income, and adjusted diluted EPS because we believe that these expenses are not indicative of the Company’s operating performance. Acquisition, integration, and other costs for the three months ended September 30, 2020 of $7,510,000 were offset by a decrease in contingent consideration liabilities for recently acquired companies of $6,700,000 and a one-time insurance policy benefit of $1,601,000. Acquisition, integration, and other costs for the nine months ended September 30, 2020 of $28,951,000 were partially offset by a net decrease in contingent consideration liabilities for recently acquired companies of $1,700,000 and the aforementioned one-time insurance policy benefit.

(5)

Adjusted EBITDA represents net income plus interest expense (net of interest income) and other, income tax expense (benefit), depreciation and amortization, depreciation (included in cost of revenue), acquisition, integration, and other costs, restructuring expenses, extraordinary legal expenses, and share-based compensation. Management 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. Adjusted EBITDA is not intended to represent cash flows for the period, nor has it been presented as an alternative to income from operations or net income as an indicator of operating performance. Although 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 statement of comprehensive income, and management therefore utilizes adjusted EBITDA as an operating performance measure in conjunction with GAAP measures such as net income.

(6)

Adjusted EBITDA margin represents adjusted EBITDA divided by revenue.

(7)

The Company records net tax expense (benefit) related to the income tax treatment of the fair value changes in the cash surrender value of its company owned life insurance. Since this change in fair value is unrelated to the Company’s operating performance, we excluded the impact on adjusted net income and adjusted diluted EPS.

(8)

The consolidated effective tax rate is affected by the recording of excess tax benefits and tax deficiencies relating to equity awards vested and exercised during the period. As a result of the adoption of a new accounting pronouncement on January 1, 2017, the Company no longer records excess tax benefits and tax deficiencies to additional paid-in capital, but such excess tax benefits and tax deficiencies are now recognized in income tax expense. The magnitude of the impact of excess tax benefits and tax deficiencies generated in the future, which may be favorable or unfavorable, is dependent upon the Company’s future grants of share-based compensation, the Company’s future stock price on the date awards vest or exercise in relation to the fair value of the awards on the grant date or the exercise behavior of the Company’s stock appreciation rights holders. Since these excess tax benefits and tax deficiencies are largely unrelated to our income before taxes and are unrepresentative of our normal effective tax rate, we excluded their impact in the calculation of adjusted net income and adjusted diluted EPS.

(9)

Adjusted net income represents GAAP net income excluding the impact of the (A) amortization of intangible assets, (B) acquisition, integration, and other costs, (C) extraordinary legal expenses, (D) changes in fair value of equity investments and instruments, (E) deferred financing related costs, (F) tax effect, if any, of the foregoing adjustments, (G) excess tax benefits and tax deficiencies relating to equity awards vested and exercised since January 1, 2017, and (H) net tax expense (benefit) related to the income tax treatment of fair value changes in the cash surrender value of its company owned life insurance, and (I) restructuring tax benefits. Management included this non-GAAP measure to provide investors and prospective investors with an alternative method for assessing the Company’s operating results in a manner that is focused on its operating performance and to provide a more consistent basis for comparison between periods. However, investors and prospective 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 in the calculation of adjusted net income). Although management believes the items in the calculation of adjusted net income are not indicative of the Company’s operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted net income as an operating performance measure in conjunction with GAAP measures such as GAAP net income.

(10)

Adjusted diluted EPS represents adjusted net income divided by diluted weighted average common shares outstanding. Management included this non-GAAP measure to provide investors and prospective investors with an alternative method for assessing the Company’s operating results in a manner that is focused on its operating performance and to provide a more consistent basis for comparison between periods. However, investors and prospective 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 in the calculation of adjusted net income). Although management believes the items in the calculation of adjusted net income are not indicative of the Company’s operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted diluted EPS as an operating performance measure in conjunction with GAAP measures such as GAAP diluted EPS.

(11)

Segment operating income represents net income plus interest expense (net of interest income) and other, income tax expense (benefit), depreciation and amortization, depreciation (included in cost of revenue), unallocated corporate overhead, acquisition, integration, and other costs, and share-based compensation.

(12)

Unallocated corporate overhead (as presented in the tables above) consists of unallocated corporate overhead (as reflected in our quarterly and annual financial statements filed with the SEC) less acquisition, integration, and other costs.

(13)

Average travelers on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period presented.

(14)

Days filled is calculated by dividing the locum tenens hours filled during the period by eight hours.

(15)

Revenue per day filled represents revenue of the Company’s locum tenens business divided by days filled for the period presented.

(16)

Leverage ratio represents the ratio of the consolidated funded indebtedness (as calculated per the Company’s credit agreement) at the end of the subject period to the consolidated adjusted EBITDA (as calculated per the Company’s credit agreement) for the twelve-month period ended at the end of the subject period.

(17)

Guidance percentage metrics are approximate.

 

Randle Reece
Senior Director, Investor Relations
866.861.3229

Source: AMN Healthcare Services, Inc.

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