AMN Healthcare Announces Second Quarter 2009 Results
AMN Healthcare Announces Second Quarter 2009 Results
AMN Healthcare Services, Inc. has announced its operating results for the second quarter 2009, which were in line with management's expectations. Financial highlights for the three months ended June 30, 2009 were revenues up to $199 million up 36%. EBITDA was up 27% to $18 million.
"Our focus on client relationships and quality as well as our diversified service offerings have enabled AMN Healthcare to maintain our leading market position, improve gross margins and strengthen our balance sheet through the prolonged economic downturn," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "We continue to take an aggressive and disciplined approach in streamlining and right-sizing our infrastructure, enabling us to adjust to short-term volume trends, while operating with an improved cost structure going forward. At the same time, we are also maintaining our long-term strategy of investing in our future through progress with new service lines."
Key business highlights include:
Strong market leadership position, with stable pricing and gross margins across service lines
Signs of stabilization and improvement in Nursing and Allied orders
Progress in new market expansion areas of Emergency Medicine Physician staffing, Home Health Nurse and Allied staffing, and Recruitment Process Outsourcing
Significant debt reduction and increased cash that position the company to capture additional market opportunities for future growth
Cost structure improvements and more streamlined infrastructure for improved profitability as the market rebounds.
For the second quarter of 2009, revenue for the Nurse and Allied staffing segment was $111 million, a decrease of 48% from the same quarter last year and 32% sequentially. The Locum Tenens staffing segment generated revenue of $79 million, a decrease of 6% from the same quarter last year and an increase of 6% sequentially.
Gross margin in the second quarter of 2009 was 27.0%, an increase of 140 bps as compared to 25.6% for the previous quarter and an increase of 60 bps as compared to 26.4% for the same quarter last year. The year over year and sequential increase mainly reflected a shift in business mix and tight management of direct costs.
Selling, general and administrative ("SG&A") expenses (excluding restructuring costs) for the second quarter of 2009 were 19.0% as a percentage of revenue as compared to 19.2% in the same quarter last year. SG&A declined by $22.3 million, or 37%, over the same period in the prior year and by $12.2 million, or 24%, sequentially, due to cost-saving initiatives taking hold as well as $3.5 million in favorable insurance reserve adjustments.
As a result of certain cost-reduction actions, the company recorded $2.2 million in restructuring charges, consisting mainly of severance payments and lease-related charges associated with various facility, branding and back-office consolidations.
Second quarter GAAP net earnings per diluted share was $0.13, including a $0.04 negative impact from restructuring charges, reflecting a decrease compared to $0.25 in the same period in the prior year.
As of June 30, 2009 cash and cash equivalents totaled $23.5 million, compared to $11.3 million as of December 31, 2008. Total debt outstanding was $90.0 million as of June 30, 2009, reflecting a reduction in debt of $56.3 million since December 31, 2008. Total average diluted shares outstanding for the second quarter of 2009 were 32.9 million.
Business Trends and Outlook
During the second quarter of 2009, Nursing and Allied orders continued to show signs of stabilization, although still at levels significantly lower than prior year. Locum Tenens volume (days filled) increased slightly over the first quarter. Pricing and gross margins remained relatively stable overall.
Nowakowski noted continued signs of stabilization and some recent improvement in orders for travel nurse and allied professionals which should translate into stabilizing volumes during the third quarter. Locum Tenens volume and physician permanent placements are expected to be steady compared with the prior quarter. Based on these trends, third quarter consolidated revenue is expected to decline sequentially by approximately 15%. The majority of this decline is driven by volume trends in nurse staffing resulting from the earlier drop in demand levels. Overall gross margins are anticipated to remain consistent.
"We are continuing to focus on maintaining strong relationships and securing preferred contracts with our clients, as well as nurturing our recent new service offerings such as Emergency Medicine staffing, Home Health staffing, and Recruitment Process Outsourcing," added Nowakowski. "At the same time, we are prudently managing our cost structure and balance sheet in order to position ourselves for future investments in new market opportunities that contribute strategic synergies to our core service lines. Despite the uncertainty of when economic recovery will occur, we remain confident in the long-term fundamentals of our industry and focused on laying the groundwork for innovation and growth in future years to drive shareholder value."