[March 01, 2017] |
|
Cross Country Healthcare Announces Fourth Quarter and Full Year 2016 Financial Results
Cross Country Healthcare, Inc. (NASDAQ: CCRN) today announced financial
results for its fourth quarter and full year ended December 31, 2016.
FINANCIAL HIGHLIGHTS:
Amounts are in thousands, except percent and per share data.
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Q4 2016
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% Change Q4 2015
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Full Year 2016
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% Change Full Year 2015
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Revenue
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$
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222,523
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15%
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$
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833,537
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9%
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Net (loss) income
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attributable to common shareholders
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$
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(7,884
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)
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(29)%
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$
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7,967
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80%
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Diluted EPS
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$
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(0.24
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)
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(26)%
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$
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0.15
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7%
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Adjusted EBITDA*
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$
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12,011
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10%
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$
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44,701
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19%
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Adjusted EPS*
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$
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0.20
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11%
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$
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0.69
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28%
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* Refer to tables and discussion of Non-GAAP financial measures below.
"This quarter we grew revenue faster than anticipated due to strong
demand from new and existing customers. In addition, were it not for
higher healthcare and workers' compensation experience related to the
fourth quarter, we would have exceeded our guidance for Adjusted
EBITDA," stated William J. Grubbs, President and Chief Executive
Officer. "As a result of the significant number of business wins over
the past year, we increased our level of investments in staff and
candidate attraction in the fourth quarter and our outlook includes a
continuation of these investments in the first quarter of 2017. By
taking full advantage of these new business wins, we expect to grow
revenue in our Nurse and Allied segment at double digits in 2017 and
continue to improve the revenue trends of our other business segments."
Grubbs added, "Over the past few years, we have significantly improved
Cross Country Healthcare's operations which has given us revenue
momentum that we believe is sustainable given the strong market
conditions, a stable economy, and our improved execution."
Fourth quarter consolidated revenue was $222.5 million, an increase of
15% year-over-year and 4% sequentially. Consolidated gross profit margin
was 25.9%, down 20 basis points year-over-year and down 120 basis points
sequentially as a result of increased healthcare and workers'
compensation costs. Net loss attributable to common shareholders was
$7.9 million compared to $6.1 million in the prior year. The 2016 fourth
quarter included a loss on the derivative liability of $14.2 million
compared to a $9.5 million loss in the prior year. Diluted EPS was a
loss of $0.24 per share compared to a loss of $0.19 per share in the
prior year. Adjusted EBITDA was $12.0 million or 5.4% of revenue, as
compared with $10.9 million or 5.7% of revenue in the prior year.
Adjusted EPS was $0.20 compared to $0.18 in the prior year.
For the year ended December 31, 2016, consolidated revenue was $833.5
million, an increase of 9% year-over-year. Consolidated gross profit
margin was 26.6%, up 90 basis points year-over-year. Net income
attributable to common shareholders was $8.0 million, or $0.15 per
diluted share, compared to $4.4 million or $0.14 per diluted share in
the prior year. Adjusted EBITDA was $44.7 million or 5.4% of revenue, as
compared with $37.6 million or 4.9% of revenue in the prior year.
Adjusted EPS was $0.69 compared to $0.54 in the prior year.
Quarterly Business Segment Highlights
Nurse and Allied Staffing
Revenue from Nurse and Allied Staffing increased 20% year-over-year and
4% sequentially. Contribution income was $18.1 million, up from $15.4
million in the prior year. The year-over-year increase in revenue and
contribution income resulted predominantly from organic growth and
improved pricing and, to a lesser extent, the impact of the Mediscan
acquisition. Average field FTEs increased to 7,156 from 6,792 in the
prior year. Revenue per FTE per day was $295 compared to $259 in the
prior year, driven primarily by improved pricing.
Physician Staffing
Revenue from Physician Staffing decreased 9% year-over-year and 1%
sequentially, primarily due to a decrease in volume. Contribution income
was $2.3 million, down from $2.7 million in the prior year. Compared to
the prior year, total days filled decreased to 14,521 from 18,131 and
revenue per day filled increased to $1,599 from $1,392 due to improved
pricing and mix of business.
Other Human Capital Management Services
Revenue from Other Human Capital Management Services was $3.7 million, a
decrease of 3% year-over-year and an increase of 12% sequentially. The
sequential increase was due to growth in our executive search business.
Contribution income was a loss of $0.3 million, compared to income of
$0.1 million in the prior year.
Cash Flow and Balance Sheet Highlights
Cash flow used in operating activities for the current quarter was $2.1
million compared to $0.6 million used in the same period of the prior
year. Cash flow provided by operating activities for the full year was
$30.1 million compared to $18.2 million in the prior year. At
December 31, 2016, the Company had $20.6 million in cash and cash
equivalents, $39.5 million of term loan and $25.0 million of convertible
notes at par. There were no borrowings drawn on its $100.0 million
revolving credit facility, and $22.2 million of letters of credit
outstanding, leaving $77.8 million available for borrowings under the
revolving credit facility.
Outlook for First Quarter 2017
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Q1 2017 Range
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Year-over-Year Change
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Revenue
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$209 million - $214 million
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6% - 9%
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Gross Profit Margin
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24.7% - 25.2%
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(130) bps - (80) bps
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Adjusted EBITDA
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$5 million - $6 million
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(41)% - (30)%
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Adjusted EPS
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$0.00 - $0.02
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$(0.09) - $(0.07)
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The estimates above are based on current management expectations and, as
such, are forward-looking and actual results may differ materially.
These ranges do not include the potential impact of any future
divestitures, mergers, acquisitions or other business combinations, any
impairment charges or valuation allowances, any acquisition-related
measurement period adjustments, changes in debt structure, or any
material legal or restructuring charges.
INVITATION TO CONFERENCE CALL
The Company will hold its quarterly conference call on Thursday,
March 2, 2017, at 9:00 A.M. Eastern Time to discuss its fourth quarter
and full year 2016 financial results. This call will be webcast live and
can be accessed at the Company's website at www.crosscountryhealthcare.com
or by dialing 800-857-6331 from anywhere in the U.S. or by dialing
517-623-4781 from non-U.S. locations - Passcode: Cross Country. A replay
of the webcast will be available from March 2nd through March 16th at
the Company's website and a replay of the conference call will be
available by telephone by calling 800-391-9854 from anywhere in the U.S.
or 402-220-9828 from non-U.S. locations - Passcode: 2017.
ABOUT CROSS COUNTRY HEALTHCARE
Cross Country Healthcare is a national leader in providing innovative
healthcare workforce solutions and staffing services. Our solutions
leverage our nearly 40 years of expertise and insight to assist clients
in solving complex labor-related challenges while maintaining high
quality outcomes. We are dedicated to recruiting and placing highly
qualified healthcare professionals in virtually every specialty and area
of expertise. With more than 9,500 active contracts, our diverse client
base includes both clinical and nonclinical settings, servicing acute
care hospitals, physician practice groups, outpatient and
ambulatory-care centers, nursing facilities, both public schools and
charter schools, rehabilitation and sports medicine clinics, government
facilities, and homecare. Through our national staffing teams and
network of 74 office locations, we are able to place clinicians on
travel and per diem assignments, local short-term contracts and
permanent positions. We are a market leader in providing flexible
workforce management solutions, which include managed services programs
(MSP), internal resource pool consulting and development, electronic
medical record (EMR) transition staffing, recruitment process
outsourcing, predictive modeling, and other outsourcing and consultative
services. In addition, we provide both retained and contingent placement
services for healthcare executives, physicians, and other healthcare
professionals.
Copies of this and other news releases as well as additional information
about Cross Country Healthcare can be obtained online at www.crosscountryhealthcare.com.
Shareholders and prospective investors can also register to
automatically receive the Company's press releases, SEC filings and
other notices by e-mail.
NON-GAAP FINANCIAL MEASURES
This press release and accompanying financial statement tables reference
non-GAAP financial measures. Such non-GAAP financial measures are
provided as additional information and should not be considered
substitutes for, or superior to, financial measures calculated in
accordance with U.S. GAAP. Such non-GAAP financial measures are provided
for consistency and comparability to prior year results; furthermore,
management believes they are useful to investors when evaluating the
Company's performance as they exclude certain items that management
believes are not indicative of the Company's operating performance. Pro
forma measures are adjusted to include the results of our acquisitions,
and exclude the results of divestments, as if the transactions occurred
in the beginning of the periods mentioned. Such non-GAAP financial
measures may differ materially from the non-GAAP financial measures used
by other companies. The financial statement tables that accompany this
press release include a reconciliation of each non-GAAP financial
measure to the most directly comparable U.S. GAAP financial measure and
a more detailed discussion of each financial measure; as such, the
financial statement tables should be read in conjunction with the
presentation of these non-GAAP financial measures.
FORWARD LOOKING STATEMENT
In addition to historical information, this press release contains
statements relating to our future results (including certain projections
and business trends) that are "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 (the
"Exchange Act"), and are subject to the "safe harbor" created by those
sections. Forward-looking statements consist of statements that are
predictive in nature, depend upon or refer to future events. Words such
as "expects", "anticipates", "intends", "plans", "believes",
"estimates", "suggests", "appears", "seeks", "will", and variations of
such words and similar expressions are intended to identify
forward-looking statements. Forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results and performance to be materially different from any future
results or performance expressed or implied by these forward-looking
statements. These factors include, but are not limited to, the
following: our ability to attract and retain qualified nurses,
physicians and other healthcare personnel, costs and availability of
short-term housing for our travel healthcare professionals, demand for
the healthcare services we provide, both nationally and in the regions
in which we operate, the functioning of our information systems, the
effect of cyber security risks and cyber incidents on our business, the
effect of existing or future government regulation and federal and state
legislative and enforcement initiatives on our business, our clients'
ability to pay us for our services, our ability to successfully
implement our acquisition and development strategies, including our
ability to successfully integrate acquired businesses and realize
synergies from such acquisitions, the effect of liabilities and other
claims asserted against us, the effect of competition in the markets we
serve, our ability to successfully defend the Company, its subsidiaries,
and its officers and directors on the merits of any lawsuit or determine
its potential liability, if any, and other factors set forth in Item 1A.
"Risk Factors" in the Company's Annual Report on Form 10-K for the year
ended December 31, 2015, and our other Securities and Exchange
Commission filings made prior to the date hereof.
Although we believe that these statements are based upon reasonable
assumptions, we cannot guarantee future results and readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the date of
this press release. There can be no assurance that (i) we have correctly
measured or identified all of the factors affecting our business or the
extent of these factors' likely impact, (ii) the available information
with respect to these factors on which such analysis is based is
complete or accurate, (iii) such analysis is correct or (iv) our
strategy, which is based in part on this analysis, will be successful.
The Company undertakes no obligation to update or revise forward-looking
statements. All references to "we", "us", "our", or "Cross Country" in
this press release mean Cross Country Healthcare, Inc. and its
subsidiaries.
|
Cross Country Healthcare, Inc.
|
Consolidated Statements of Operations
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(Unaudited, amounts in thousands, except per share data)
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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September 30,
|
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December 31,
|
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December 31,
|
|
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2016
|
|
2015
|
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2016
|
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2016
|
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2015
|
|
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Revenue from services
|
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$
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222,523
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|
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$
|
193,148
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|
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$
|
214,988
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$
|
833,537
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|
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$
|
767,421
|
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Operating expenses:
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|
|
|
|
|
|
|
|
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Direct operating expenses
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|
164,890
|
|
|
142,669
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|
|
156,778
|
|
|
611,802
|
|
|
570,056
|
|
Selling, general and administrative expenses
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|
46,290
|
|
|
39,991
|
|
|
45,922
|
|
|
179,820
|
|
|
161,275
|
|
Bad debt expense
|
|
97
|
|
|
228
|
|
|
19
|
|
|
593
|
|
|
999
|
|
Depreciation
|
|
1,109
|
|
|
954
|
|
|
995
|
|
|
4,168
|
|
|
3,856
|
|
Amortization
|
|
1,104
|
|
|
1,263
|
|
|
1,097
|
|
|
5,014
|
|
|
4,210
|
|
Loss on sale of business (a)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,184
|
|
Acquisition-related contingent consideration (b)
|
|
107
|
|
|
-
|
|
|
237
|
|
|
814
|
|
|
-
|
|
Acquisition and integration costs (c)
|
|
78
|
|
|
160
|
|
|
-
|
|
|
78
|
|
|
902
|
|
Restructuring costs (d)
|
|
142
|
|
|
127
|
|
|
611
|
|
|
753
|
|
|
1,274
|
|
Impairment charges (e)
|
|
-
|
|
|
2,100
|
|
|
-
|
|
|
24,311
|
|
|
2,100
|
|
Total operating expenses
|
|
213,817
|
|
|
187,492
|
|
|
205,659
|
|
|
827,353
|
|
|
746,856
|
|
Income from operations
|
|
8,706
|
|
|
5,656
|
|
|
9,329
|
|
|
6,184
|
|
|
20,565
|
|
Other expenses (income):
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
1,428
|
|
|
1,647
|
|
|
1,435
|
|
|
6,106
|
|
|
6,810
|
|
Loss (gain) on derivative liability (f)
|
|
14,165
|
|
|
9,516
|
|
|
(7,105
|
)
|
|
(5,805
|
)
|
|
9,901
|
|
Loss on early extinguishment of debt (g)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,568
|
|
|
-
|
|
Other income, net
|
|
(87
|
)
|
|
(276
|
)
|
|
(92
|
)
|
|
(230
|
)
|
|
(306
|
)
|
(Loss) income before income taxes
|
|
(6,800
|
)
|
|
(5,231
|
)
|
|
15,091
|
|
|
4,545
|
|
|
4,160
|
|
Income tax expense (benefit)
|
|
849
|
|
|
696
|
|
|
802
|
|
|
(4,186
|
)
|
|
(794
|
)
|
Consolidated net (loss) income
|
|
$
|
(7,649
|
)
|
|
$
|
(5,927
|
)
|
|
$
|
14,289
|
|
|
$
|
8,731
|
|
|
$
|
4,954
|
|
Less: Net income attributable to noncontrolling interest in
subsidiary
|
|
235
|
|
|
171
|
|
|
223
|
|
|
764
|
|
|
536
|
|
Net (loss) income attributable to common shareholders
|
|
$
|
(7,884
|
)
|
|
$
|
(6,098
|
)
|
|
$
|
14,066
|
|
|
$
|
7,967
|
|
|
$
|
4,418
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share attributable to common shareholders -
Basic
|
|
$
|
(0.24
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.44
|
|
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share attributable to common shareholders -
Diluted
|
|
$
|
(0.24
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.22
|
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
32,263
|
|
|
31,817
|
|
|
32,221
|
|
|
32,132
|
|
|
31,514
|
|
Diluted (h)
|
|
32,263
|
|
|
31,817
|
|
|
36,255
|
|
|
36,246
|
|
|
32,162
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Reconciliation of Non-GAAP Financial Measures
|
(Unaudited, amounts in thousands)
|
|
|
|
Three Months Ended
|
|
Year Ended
|
|
|
December 31,
|
|
December 31,
|
|
September 30,
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2016
|
|
2015
|
Adjusted EBITDA: (i)
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to common shareholders
|
|
$
|
(7,884
|
)
|
|
$
|
(6,098
|
)
|
|
$
|
14,066
|
|
|
$
|
7,967
|
|
|
$
|
4,418
|
|
Depreciation and amortization
|
|
2,213
|
|
|
2,217
|
|
|
2,092
|
|
|
9,182
|
|
|
8,066
|
|
Interest expense
|
|
1,428
|
|
|
1,647
|
|
|
1,435
|
|
|
6,106
|
|
|
6,810
|
|
Income tax expense (benefit)
|
|
849
|
|
|
696
|
|
|
802
|
|
|
(4,186
|
)
|
|
(794
|
)
|
Loss on sale of business (a)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,184
|
|
Acquisition-related contingent consideration (b)
|
|
107
|
|
|
-
|
|
|
237
|
|
|
814
|
|
|
-
|
|
Acquisition and integration costs (c)
|
|
78
|
|
|
160
|
|
|
-
|
|
|
78
|
|
|
902
|
|
Restructuring costs (d)
|
|
142
|
|
|
127
|
|
|
611
|
|
|
753
|
|
|
1,274
|
|
Impairment charges (e)
|
|
-
|
|
|
2,100
|
|
|
-
|
|
|
24,311
|
|
|
2,100
|
|
Loss (gain) on derivative liability (f)
|
|
14,165
|
|
|
9,516
|
|
|
(7,105
|
)
|
|
(5,805
|
)
|
|
9,901
|
|
Loss on early extinguishment of debt (g)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,568
|
|
|
-
|
|
Other income, net
|
|
(87
|
)
|
|
(276
|
)
|
|
(92
|
)
|
|
(230
|
)
|
|
(306
|
)
|
Equity compensation
|
|
765
|
|
|
687
|
|
|
847
|
|
|
3,379
|
|
|
2,460
|
|
Net income attributable to noncontrolling interest in subsidiary
|
|
235
|
|
|
171
|
|
|
223
|
|
|
764
|
|
|
536
|
|
Adjusted EBITDA (i)
|
|
$
|
12,011
|
|
|
$
|
10,947
|
|
|
$
|
13,116
|
|
|
$
|
44,701
|
|
|
$
|
37,551
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EPS: (j)
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
Consolidated net (loss) income attributable to common shareholders
|
|
$
|
(7,884
|
)
|
|
$
|
(6,098
|
)
|
|
$
|
14,066
|
|
|
$
|
7,967
|
|
|
$
|
4,418
|
|
Non-GAAP adjustments - pretax:
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of business (a)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2,184
|
|
Acquisition-related contingent consideration (b)
|
|
107
|
|
|
-
|
|
|
237
|
|
|
814
|
|
|
-
|
|
Acquisition and integration costs (c)
|
|
78
|
|
|
160
|
|
|
-
|
|
|
78
|
|
|
902
|
|
Restructuring costs (d)
|
|
142
|
|
|
127
|
|
|
611
|
|
|
753
|
|
|
1,274
|
|
Impairment charges (e)
|
|
-
|
|
|
2,100
|
|
|
-
|
|
|
24,311
|
|
|
2,100
|
|
Loss (gain) on derivative liability (f) (j)
|
|
14,165
|
|
|
9,516
|
|
|
(7,105
|
)
|
|
(5,805
|
)
|
|
9,901
|
|
Loss on early extinguishment of debt (g)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
1,568
|
|
|
-
|
|
Tax impact of non-GAAP adjustments (k)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(7,036
|
)
|
|
(3,524
|
)
|
Adjusted net income attributable to common shareholders - non-GAAP
|
|
$
|
6,608
|
|
|
$
|
5,805
|
|
|
$
|
7,809
|
|
|
$
|
22,650
|
|
|
$
|
17,255
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares - basic, GAAP
|
|
32,263
|
|
|
31,817
|
|
|
32,221
|
|
|
32,132
|
|
|
31,514
|
|
Dilutive impact of share-based payments (j)
|
|
557
|
|
|
684
|
|
|
512
|
|
|
593
|
|
|
648
|
|
Adjusted weighted average common shares - diluted, non-GAAP
|
|
32,820
|
|
|
32,501
|
|
|
32,733
|
|
|
32,725
|
|
|
32,162
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation: (j)
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS, GAAP
|
|
$
|
(0.24
|
)
|
|
$
|
(0.19
|
)
|
|
$
|
0.22
|
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
Non-GAAP adjustments - pretax:
|
|
|
|
|
|
|
|
|
|
|
Loss on sale of business (a)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.07
|
|
Acquisition-related contingent consideration (b)
|
|
-
|
|
|
-
|
|
|
0.01
|
|
|
0.03
|
|
|
-
|
|
Acquisition and integration costs (c)
|
|
-
|
|
|
0.01
|
|
|
-
|
|
|
-
|
|
|
0.03
|
|
Restructuring costs (d)
|
|
0.01
|
|
|
-
|
|
|
0.02
|
|
|
0.03
|
|
|
0.04
|
|
Impairment charges (e)
|
|
-
|
|
|
0.07
|
|
|
-
|
|
|
0.74
|
|
|
0.07
|
|
Loss (gain) on derivative liability (f) (j)
|
|
0.43
|
|
|
0.29
|
|
|
(0.22
|
)
|
|
(0.18
|
)
|
|
0.30
|
|
Loss on early extinguishment of debt (g)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
0.05
|
|
|
-
|
|
Tax impact of non-GAAP adjustments (k)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(0.22
|
)
|
|
(0.11
|
)
|
Adjustment for change in dilutive shares (j)
|
|
-
|
|
|
-
|
|
|
0.21
|
|
|
0.09
|
|
|
-
|
|
Adjusted EPS, non-GAAP (j)
|
|
$
|
0.20
|
|
|
$
|
0.18
|
|
|
$
|
0.24
|
|
|
$
|
0.69
|
|
|
$
|
0.54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Consolidated Balance Sheets
|
(Unaudited, amounts in thousands)
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
2015
|
|
|
|
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
20,630
|
|
|
$
|
2,453
|
|
Accounts receivable, net
|
|
173,620
|
|
|
146,873
|
|
Prepaid expenses
|
|
6,126
|
|
|
4,521
|
|
Insurance recovery receivable
|
|
3,037
|
|
|
2,866
|
|
Other current assets
|
|
2,198
|
|
|
2,032
|
|
Total current assets
|
|
205,611
|
|
|
158,745
|
|
Property and equipment, net
|
|
12,818
|
|
|
10,470
|
|
Trade names, indefinite-lived
|
|
35,402
|
|
|
36,101
|
|
Goodwill, net
|
|
79,648
|
|
|
95,096
|
|
Intangible assets, net
|
|
36,835
|
|
|
46,813
|
|
Debt issuance costs, net
|
|
929
|
|
|
376
|
|
Other non-current assets
|
|
17,135
|
|
|
17,994
|
|
Total assets
|
|
$
|
388,378
|
|
|
$
|
365,595
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
58,837
|
|
|
$
|
41,098
|
|
Accrued employee compensation and benefits
|
|
33,243
|
|
|
29,402
|
|
Current portion of long-term debt and capital lease obligations
|
|
2,263
|
|
|
8,071
|
|
Deferred purchase price
|
|
-
|
|
|
2,184
|
|
Other current liabilities
|
|
2,749
|
|
|
5,291
|
|
Total current liabilities
|
|
97,092
|
|
|
86,046
|
|
Long-term debt and capital lease obligations
|
|
84,760
|
|
|
81,301
|
|
Non-current deferred tax liabilities
|
|
13,154
|
|
|
18,475
|
|
Long-term accrued claims
|
|
28,870
|
|
|
30,070
|
|
Contingent consideration
|
|
5,301
|
|
|
3,533
|
|
Other long-term liabilities
|
|
7,399
|
|
|
4,826
|
|
Total liabilities
|
|
236,576
|
|
|
224,251
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
Common stock
|
|
3
|
|
|
3
|
|
Additional paid-in capital
|
|
256,570
|
|
|
254,108
|
|
Accumulated other comprehensive loss
|
|
(1,241
|
)
|
|
(1,207
|
)
|
Accumulated deficit
|
|
(104,089
|
)
|
|
(112,056
|
)
|
Total Cross Country Healthcare, Inc. stockholders' equity
|
|
151,243
|
|
|
140,848
|
|
Noncontrolling interest
|
|
559
|
|
|
496
|
|
Total stockholders' equity
|
|
151,802
|
|
|
141,344
|
|
Total liabilities and stockholders' equity
|
|
$
|
388,378
|
|
|
$
|
365,595
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Segment Data (l)
|
(Unaudited, amounts in thousands)
|
|
|
|
Three Months Ended
|
|
Year-over- Year
|
|
Sequential
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
September 30,
|
|
% of
|
|
% change
|
|
% change
|
|
|
2016
|
|
Total
|
|
2015
|
|
Total
|
|
2016
|
|
Total
|
|
Fav (Unfav)
|
|
Fav (Unfav)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and Allied Staffing
|
|
$
|
194,050
|
|
|
87
|
%
|
|
$
|
162,131
|
|
|
84
|
%
|
|
$
|
186,623
|
|
|
87
|
%
|
|
19.7
|
%
|
|
4.0
|
%
|
Physician Staffing
|
|
24,813
|
|
|
11
|
%
|
|
27,236
|
|
|
14
|
%
|
|
25,090
|
|
|
12
|
%
|
|
(8.9
|
)%
|
|
(1.1
|
)%
|
Other Human Capital Management Services
|
|
3,660
|
|
|
2
|
%
|
|
3,781
|
|
|
2
|
%
|
|
3,275
|
|
|
1
|
%
|
|
(3.2
|
)%
|
|
11.8
|
%
|
|
|
$
|
222,523
|
|
|
100
|
%
|
|
$
|
193,148
|
|
|
100
|
%
|
|
$
|
214,988
|
|
|
100
|
%
|
|
15.2
|
%
|
|
3.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution income: (m)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and Allied Staffing
|
|
$
|
18,115
|
|
|
|
|
$
|
15,436
|
|
|
|
|
$
|
19,472
|
|
|
|
|
17.4
|
%
|
|
(7.0
|
)%
|
Physician Staffing
|
|
2,262
|
|
|
|
|
2,672
|
|
|
|
|
2,400
|
|
|
|
|
(15.3
|
)%
|
|
(5.8
|
)%
|
Other Human Capital Management Services
|
|
(339
|
)
|
|
|
|
142
|
|
|
|
|
(154
|
)
|
|
|
|
(338.7
|
)%
|
|
(120.1
|
)%
|
|
|
20,038
|
|
|
|
|
18,250
|
|
|
|
|
21,718
|
|
|
|
|
9.8
|
%
|
|
(7.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate overhead (n)
|
|
8,792
|
|
|
|
|
7,990
|
|
|
|
|
9,449
|
|
|
|
|
(10.0
|
)%
|
|
7.0
|
%
|
Depreciation
|
|
1,109
|
|
|
|
|
954
|
|
|
|
|
995
|
|
|
|
|
(16.2
|
)%
|
|
(11.5
|
)%
|
Amortization
|
|
1,104
|
|
|
|
|
1,263
|
|
|
|
|
1,097
|
|
|
|
|
12.6
|
%
|
|
(0.6
|
)%
|
Acquisition-related contingent consideration (c)
|
|
107
|
|
|
|
|
-
|
|
|
|
|
237
|
|
|
|
|
(100.0
|
)%
|
|
54.9
|
%
|
Acquisition and integration costs (c)
|
|
78
|
|
|
|
|
160
|
|
|
|
|
-
|
|
|
|
|
51.3
|
%
|
|
(100.0
|
)%
|
Restructuring costs (d)
|
|
142
|
|
|
|
|
127
|
|
|
|
|
611
|
|
|
|
|
(11.8
|
)%
|
|
76.8
|
%
|
Impairment charges (e)
|
|
-
|
|
|
|
|
2,100
|
|
|
|
|
-
|
|
|
|
|
100.0
|
%
|
|
-
|
%
|
Income from operations
|
|
$
|
8,706
|
|
|
|
|
$
|
5,656
|
|
|
|
|
$
|
9,329
|
|
|
|
|
53.9
|
%
|
|
(6.7
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
Year-over- Year
|
|
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
|
|
|
|
% change
|
|
|
|
|
2016
|
|
Total
|
|
2015
|
|
Total
|
|
|
|
|
|
Fav (Unfav)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and Allied Staffing
|
|
$
|
721,486
|
|
|
86
|
%
|
|
$
|
621,258
|
|
|
81
|
%
|
|
|
|
|
|
16.1
|
%
|
|
|
Physician Staffing
|
|
98,283
|
|
|
12
|
%
|
|
115,336
|
|
|
15
|
%
|
|
|
|
|
|
(14.8
|
)%
|
|
|
Other Human Capital Management Services
|
|
13,768
|
|
|
2
|
%
|
|
30,827
|
|
|
4
|
%
|
|
|
|
|
|
(55.3
|
)%
|
|
|
|
|
$
|
833,537
|
|
|
100
|
%
|
|
$
|
767,421
|
|
|
100
|
%
|
|
|
|
|
|
8.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution income: (m)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and Allied Staffing
|
|
$
|
71,992
|
|
|
|
|
$
|
55,718
|
|
|
|
|
|
|
|
|
29.2
|
%
|
|
|
Physician Staffing
|
|
8,265
|
|
|
|
|
10,213
|
|
|
|
|
|
|
|
|
(19.1
|
)%
|
|
|
Other Human Capital Management Services
|
|
(535
|
)
|
|
|
|
1,863
|
|
|
|
|
|
|
|
|
(128.7
|
)%
|
|
|
|
|
79,722
|
|
|
|
|
67,794
|
|
|
|
|
|
|
|
|
17.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate overhead (n)
|
|
38,400
|
|
|
|
|
32,703
|
|
|
|
|
|
|
|
|
(17.4
|
)%
|
|
|
Depreciation
|
|
4,168
|
|
|
|
|
3,856
|
|
|
|
|
|
|
|
|
(8.1
|
)%
|
|
|
Amortization
|
|
5,014
|
|
|
|
|
4,210
|
|
|
|
|
|
|
|
|
(19.1
|
)%
|
|
|
Loss on sale of business (a)
|
|
-
|
|
|
|
|
2,184
|
|
|
|
|
|
|
|
|
100.0
|
%
|
|
|
Acquisition-related contingent consideration (b)
|
|
814
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
(100.0
|
)%
|
|
|
Acquisition and integration costs (c)
|
|
78
|
|
|
|
|
902
|
|
|
|
|
|
|
|
|
91.4
|
%
|
|
|
Restructuring costs (d)
|
|
753
|
|
|
|
|
1,274
|
|
|
|
|
|
|
|
|
40.9
|
%
|
|
|
Impairment charges (e)
|
|
24,311
|
|
|
|
|
2,100
|
|
|
|
|
|
|
|
|
(1,057.7
|
)%
|
|
|
Income from operations
|
|
$
|
6,184
|
|
|
|
|
$
|
20,565
|
|
|
|
|
|
|
|
|
(69.9
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NM-Not meaningful.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Other Financial Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Year Ended
|
|
|
December 31,
|
|
|
December 31,
|
|
|
September 30,
|
|
|
December 31,
|
|
December 31,
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities (in thousands)
|
|
$
|
(2,124
|
)
|
|
|
$
|
(631
|
)
|
|
|
$
|
19,402
|
|
|
|
$
|
30,145
|
|
|
$
|
18,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and Allied Staffing statistical data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FTEs (o)
|
|
7,156
|
|
|
|
6,792
|
|
|
|
6,954
|
|
|
|
6,953
|
|
|
6,624
|
Average Nurse and Allied Staffing revenue per FTE per day (p)
|
|
$
|
295
|
|
|
|
$
|
259
|
|
|
|
$
|
292
|
|
|
|
$
|
284
|
|
|
$
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physician Staffing statistical data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days filled (q)
|
|
14,521
|
|
|
|
18,131
|
|
|
|
16,639
|
|
|
|
62,482
|
|
|
77,601
|
Revenue per day filled (r)
|
|
$
|
1,599
|
|
|
|
$
|
1,392
|
|
|
|
$
|
1,576
|
|
|
|
$
|
1,549
|
|
|
$
|
1,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
On August 31, 2015, the Company completed the sale of Cross Country
Education, LLC, to PESI, Inc. The Company recognized a pre-tax loss
of $2.2 million related to the divestiture of the business. In
addition, the Company recorded a benefit of $3.5 million from the
reversal of valuation allowances associated with this business,
resulting in an after-tax gain of $1.3 million.
|
(b)
|
|
Acquisition-related contingent consideration primarily represents
the fair value and accretion adjustments to the contingent
consideration liability for the Mediscan acquisition noted above.
|
(c)
|
|
Acquisition and integration costs are primarily related to due
diligence efforts for the US Resources Healthcare acquisition that
closed on December 1, 2016 and the Mediscan acquisition that closed
on October 30, 2015. The results of these acquisitions have been
included in the Company's consolidated statements of operations
since their dates of acquisition.
|
(d)
|
|
Restructuring costs related to severance and lease consolidations
incurred as part of our separate and discrete cost savings
initiatives.
|
(e)
|
|
The year ended December 31, 2016 includes non-cash impairment
charges of $24.3 million ($17.3 million after taxes) related to the
Physician Staffing reporting unit. The three months and year ended
December 31, 2015 include non-cash impairment charges of $2.1
million ($1.3 million after taxes) related to the Physician Staffing
trade name.
|
(f)
|
|
Loss (gain) on derivative liability represents the change in the
fair value of embedded features of our convertible notes.
|
(g)
|
|
Loss on early extinguishment of debt relates to the write-off of
unamortized net debt discount and issuance costs as well as
transaction fees and expenses related to the extinguishment of the
Company's subordinated term loan.
|
(h)
|
|
When applying the if-converted method to our convertible notes,
3,521,126 shares are not included in diluted weighted average shares
for the three months ended December 31, 2016 and the three months
and year ended December 31, 2015 because their effect was
anti-dilutive.
|
(i)
|
|
Adjusted EBITDA, a non-GAAP (Generally Accepted Accounting
Principles) financial measure, is defined as net (loss) income
attributable to common shareholders before depreciation,
amortization, interest expense, income tax expense (benefit), loss
on sale of business, acquisition-related contingent consideration,
acquisition and integration costs, restructuring costs, impairment
charges, loss (gain) on derivative liability, loss on early
extinguishment of debt, other (income) expense, net, equity
compensation, and includes net income attributable to noncontrolling
interest in subsidiary. Adjusted EBITDA should not be considered a
measure of financial performance under GAAP. Management presents
Adjusted EBITDA because it believes that Adjusted EBITDA is a useful
supplement to net income (loss) attributable to common shareholders
as an indicator of operating performance. Management uses Adjusted
EBITDA for planning purposes and as one performance measure in its
annual cash incentive program for certain members of its management
team. Adjusted EBITDA, as defined, closely matches the operating
measure typically used in the Company's credit facilities in
calculating various ratios. Adjusted EBITDA Margin is calculated by
dividing Adjusted EBITDA by the Company's consolidated revenue.
|
(j)
|
|
Adjusted EPS, a non-GAAP financial measure, is defined as net (loss)
income attributable to common shareholders per diluted share before
the diluted EPS impact of loss on sale of business,
acquisition-related contingent consideration, acquisition and
integration costs, restructuring costs, impairment charges, loss
(gain) on derivative liability, and loss on early extinguishment of
debt. Adjusted EPS should not be considered a measure of financial
performance under GAAP. Management presents Adjusted EPS because it
believes that Adjusted EPS is a useful supplement to its reported
EPS as an indicator of operating performance. Management uses
Adjusted EPS as one performance measure in its annual cash incentive
program for certain members of its management team. Management
believes it provides a more useful comparison of the Company's
underlying business performance from period to period and is more
representative of the future earnings capacity of the Company. For
the three months ended December 31, 2016 and 2015, the adjustments
to diluted EPS, GAAP had the effect of converting the net loss to
net income. As a result, potentially dilutive shares that were
excluded in the diluted EPS, GAAP calculation have been included in
the adjusted EPS calculation. When applying the if-converted method
for the calculation of diluted EPS, GAAP, the convertible notes were
dilutive for the three months ended September 30, 2016 and the year
ended December 31, 2016. Adjusted EPS excludes the effects of the
convertible notes that were reported as being dilutive in these
periods.
|
(k)
|
|
Tax impact on the non-GAAP items is related to: the reversal of
indefinite-lived intangible assets related to the sale of business
for the year ended December 31, 2015, and the impairment charges on
indefinite-lived intangible assets of the Physician Staffing
business in the year ended December 31, 2016. There is no tax impact
on the other items due to the Company's full valuation allowance for
all reported periods.
|
(l)
|
|
Segment data provided is in accordance with the Segment Reporting
Topic of the FASB ASC.
|
(m)
|
|
Contribution income is defined as income from operations before
depreciation, amortization, loss on sale of business,
acquisition-related contingent consideration, acquisition and
integration costs, restructuring costs, impairment charges, and
corporate expenses not specifically identified to a reporting
segment. Contribution income is a financial measure used by
management when assessing segment performance.
|
(n)
|
|
Unallocated corporate overhead includes corporate compensation and
benefits, and general and administrative expenses including rent and
utilities, computer supplies and expenses, insurance, professional
expenses, corporate-wide projects (initiatives), and public company
expense.
|
(o)
|
|
FTEs represent the average number of Nurse and Allied Staffing
contract personnel on a full-time equivalent basis.
|
(p)
|
|
Average revenue per FTE per day is calculated by dividing the Nurse
and Allied Staffing revenue by the number of days worked in the
respective periods. Nurse and Allied Staffing revenue also includes
revenue from the permanent placement of nurses.
|
(q)
|
|
Days filled is calculated by dividing the total hours invoiced
during the period by 8 hours.
|
(r)
|
|
Revenue per day filled is calculated by dividing revenue invoiced by
days filled for the period presented.
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20170301006517/en/
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