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AMN Healthcare Announces First Quarter 2010 Results

AMN Healthcare Announces First Quarter 2010 Results

AMN Healthcare Services, Inc. (NYSE: AHS) today announced operating results for the first quarter of 2010.

Financial highlights are as follows:

(Dollars in millions, except per share amounts)

Q1
2010

% Chg
Q1 2009

% Chg
Q4 2009

Revenue

$143.3

(43%)

(1%)

Gross Profit

$40.0

(37%)

(3%)

Net Income

$0.8

NM

NM

Diluted Earnings per Share

$0.02

NM

NM

Cash Flow from Operations

$11.7

(69%)

110%

Adjusted EBITDA*

$10.4

(37%)

(3%)

* See note (2) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items.
M Not meaningful

Key business highlights for the first quarter are as follows:
Earnings per share of $0.02 were above expectations
Revenues were sequentially stable
SG&A expense continued to improve
Nurse and Allied traveler count volume experienced a 5% sequential increase
Locum Tenens and Physician Permanent Placement volumes were sequentially flat

"During the first quarter, our Nurse and Allied segment delivered its first sequential revenue increase since 2008. This growth was offset by sequential decreases in our Locum Tenens and Physician Permanent Placement revenues," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "We spent considerable efforts during the last year building stronger client relationships, bolstering our vendor managed services offering and delivering innovative solutions. We believe these efforts are resonating with clients.

"Despite these improved results, factors such as high general unemployment continue to keep healthcare attrition rates and job openings at historically low levels, creating a temporary preference by clinicians to work in full-time, permanent positions. We remain cautious regarding the short-term growth trajectory and focused on leveraging the operational improvements we have made. We continue to prudently manage our margins and balance sheet, while still making investments in strategic opportunities to fuel our long-term growth."

For the first quarter of 2010, revenue was $143 million, a decrease of 43% from prior year and 1% from prior quarter. First quarter revenue for the Nurse and Allied staffing segment was $75 million, a decrease of 54% from the same quarter last year and up 2% sequentially. The Locum Tenens staffing segment generated revenue of $60 million, a decrease of 19% from prior year and 3% from prior quarter. First quarter Physician Permanent Placement revenue was $8 million, a decrease of 30% from prior year and 7% from prior quarter.

Gross margin in the first quarter of 2010 was 27.9%, an increase of 230 bps from prior year and a decrease of 50 bps compared to the previous quarter. The increase as compared to prior year was driven primarily by an increase in gross margin in the Nurse and Allied segment. The decrease as compared to prior quarter was attributable to the anticipated slight sequential decrease in Nurse and Allied gross margin and the lower revenue mix from the relatively high margin physician business lines.

Selling, general and administrative ("SG&A") expenses for the first quarter of 2010 were 22% as a percentage of revenue compared to 20% in the same quarter last year. First quarter SG&A declined by $18 million, or 36%, over the same period in the prior year, and decreased slightly as compared to prior quarter, due largely to cost-saving initiatives taken during the past year.

As of March 31, 2010, cash and cash equivalents totaled $37 million, compared to $27 million as of December 31, 2009. Total term debt outstanding, net of discount, as of March 31, 2010 was $105 million, with zero outstanding on the revolver.

Business Trends and Outlook
Going into the second quarter, consolidated revenue is expected to be up 1-3% compared with the first quarter. While Nurse and Allied traveler count volume experienced a 5% sequential increase in the first quarter, volume is anticipated to be down slightly in the second quarter. In Locum Tenens, we expect an improvement in days filled, and in Physician Permanent Placement we are anticipating an increase in placements.

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