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AMN Healthcare Services, Inc. has announced operating results

AMN Healthcare Services, Inc. has announced operating results for the second quarter of 2010. Financial highlights are as follows:
(Dollars in millions, except per share amounts)

Q2 2010

% Chg Q2 2009

% Chg Q1 2010





Gross Profit




Net Income




Diluted Earnings per Share




Cash Flow from Operations




Adjusted EBITDA*




Adjusted EPS*




* See notes (2) and (3) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items.
NM Not meaningful

Key business highlights for the second quarter are as follows:
Revenues were up 4% sequentially, compared with guidance of 1 to 3%
Locum Tenens and Physician Permanent Placement revenues were both sequentially up 8%
Nurse and Allied revenues were sequentially flat
SG&A levels as a percentage of revenues remain steady, excluding acquisition-related costs

"The industry appears to be entering a modest recovery phase, with second quarter consolidated revenues growing sequentially for the first time in seven quarters, and exceeding our expectations due to better than anticipated volumes," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "Although we are experiencing positive indicators and steady progress, we retain a conservative view of the near-term trajectory for healthcare staffing due to the continued high general unemployment and apprehension in the economic environment. We continue to be positive about the industry's long-term growth prospects and are positioning our service offerings to meet the strategic needs of our clients and their growth and financial objectives."
In support of its long-term strategy, AMN Healthcare announced earlier today that it has entered into a definitive agreement to acquire the parent company of Nursefinders, Inc. (dba Medfinders), the nation's leading provider of clinical workforce managed services programs. Through its multi-brand strategy, Medfinders also provides travel nurse and allied staffing, locum tenens, physician search services, and home healthcare services, as well as local nurse and allied staffing in support of its managed services programs. The transaction is expected to close in the third quarter of 2010, and additional details of the agreement can be found in a separate press release issued today.
"This acquisition is a natural step in our long-term growth strategy as it directly contributes to the delivery of greater value and innovative workforce solutions to our clients. In addition to enhancing the capabilities of our existing businesses and expanding into new complementary service lines, we will also be able to achieve immediate sales and operating efficiencies. We believe this is the perfect addition to AMN to enhance shareholder value in both the short and long term," added Nowakowski.
Second Quarter 2010 Results
For the second quarter of 2010, revenue was $149 million, a decrease of 25% from prior year and up 4% from prior quarter. Second quarter revenue for the Nurse and Allied staffing segment was $76 million, a decrease of 32% from the same quarter last year and up 1% sequentially. The Locum Tenens staffing segment generated revenue of $65 million, a decrease of 17% from prior year and up 8% sequentially. Second quarter Physician Permanent Placement revenue was $8 million, a decrease of 7% from prior year and up 8% sequentially.
Gross margin in the second quarter of 2010 was 27.6%, an increase of 60 bps from prior year and a decrease of 30 bps compared to the previous quarter. The improvement as compared to the prior year was driven primarily by an increase in gross margin in the Nurse and Allied segment and the increased revenue mix from the higher margin Physician Permanent Placement segment. The decrease as compared to prior quarter was mainly attributable to a decrease in Nurse and Allied gross margin.
Selling, general and administrative ("SG&A") expenses for the second quarter of 2010 were 23% as a percentage of revenue compared to 19% in the same quarter last year. Second quarter SG&A declined by $3 million, or 9%, over the same period in the prior year, and increased by $3 million, or 8%, as compared to the prior quarter, due in part to acquisition-related costs incurred during the quarter.
As of June 30, 2010, cash and cash equivalents totaled $41 million, compared to $27 million as of December 31, 2009. Total term debt outstanding, net of discount, as of June 30, 2010 was $104 million, with no borrowings on the revolver portion of the credit facility.
Business Trends and Outlook
Going into the third quarter, demand continues to trend up slightly across all business lines. With all business segments anticipating sequential improvement in volumes, consolidated revenue is expected to be up 4-6% compared with the second quarter, excluding the impact of any acquisitions. Gross margin is anticipated to remain sequentially steady.


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