AMN Healthcare Announces First Quarter 2012 Results
AMN Healthcare Announces First Quarter 2012 Results
AMN Healthcare Services, Inc, the nation's innovator in healthcare workforce solutions, today announced its financial results for the first quarter of 2012, reflecting continued growth in revenue and profitability. Financial highlights are as follows:
Dollars in millions, except per share amounts.*
Q1 2012 % Chg Q1 2011 % Chg Q4 2011
Revenue $226.4 5% 2%
Gross Profit $63.2 1% 1%
Net Income $3.5 101% 105%
Diluted EPS $0.07 75% 75%
Adj EBITDA* $17.5 1% 11%
*Amounts in the table have been adjusted to reflect the impact of the discontinued operations associated with the disposal of the Home Healthcare Services segment in January 2012.
** See note (2) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items.
• The Company's continued success in executing on its workforce solutions strategy is fueling top line growth and improving profitability.
• Revenues for the first quarter in Nurse and Allied Healthcare Staffing, AMN's largest segment, were up 4% sequentially and up 14% year-over-year due primarily to continued growth in the travel nurse business.
• While volume was down in the Locum Tenens segment, results are beginning to reflect improvements in pricing and gross margins.
• Physician Permanent Placement new searches were up over 10% compared with prior year, indicative of an improving market environment.
• First quarter consolidated gross margin was 27.9%, achieving the upper end of the Company's expectations.
• In early April the Company successfully refinanced its existing credit facilities, which resulted in a lower average cost of debt, extended maturity, and improved covenant structure.
"AMN Healthcare continues to differentiate itself in the marketplace as the innovator in healthcare workforce solutions. We experienced continued momentum adding new MSP clients as well as growing our traditional client business," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "The efficiency inherent in our MSP operations model, with strong fill-rates and productivity by our sales and operations team, continues to provide improvements in operating leverage."
"With a solid and improving demand environment, we are keenly focused on our recruitment strategies to enable us to continue delivering superior service to our clients. This focus on growing our quality clinician candidates will also position us well for the significantly stronger demand market conditions expected in the next two to three years," added Salka.
First Quarter 2012 Results
For the first quarter of 2012, consolidated revenue was $226 million, an increase of 2% sequentially and 5% from the same quarter last year. First quarter revenue for the Nurse and Allied Healthcare Staffing segment was $154 million, up 4% sequentially and 14% from the same quarter last year. The increase was due to increased clinicians on assignment and increased bill rates. The Locum Tenens Staffing segment generated revenue in the first quarter of $64 million, a decrease of 2% sequentially and 10% from the same quarter last year. First quarter Physician Permanent Placement Services segment revenue was $9 million, a decrease of 4% sequentially and 17% from the same quarter last year. Excluding the impact of the prior year adoption of a new revenue recognition accounting standard, revenues for this segment increased 4% year-over-year.
Gross margin in the first quarter of 27.9%, at the upper end of the Company's expectations, was lower by 40 basis points compared to the previous quarter and 120 basis points from the same quarter last year. The year-over-year decrease was due primarily to the prior year benefits from an actuarial-based workers compensation reserve adjustment and the adoption of a new revenue recognition accounting standard. Excluding these items, the year–over-year gross margin was higher by 30 basis points due to improved gross margins in both physician segments.
SG&A expenses for the first quarter of 2012 were $47 million, representing 20.8% as a percent of revenue, compared to 22.1% in the prior quarter and 22.6% in the same quarter last year. The decrease compared to the same quarter last year was due primarily to the absence of integration-related expenses associated with the Medfinders acquisition, the resulting improved SG&A leverage from the acquisition synergies, and a refund received in connection with the settlement of a prior period assessment from the California Employment Development Department. Compared to the prior quarter, the decrease was due to continued operating leverage improvement and the favorable settlement, offset partly by higher professional liability costs.
First quarter 2012 GAAP net income per diluted common share was $0.09. Excluding the $0.02 discontinued operations impact from the divested home healthcare business, earnings per share from continuing operations was $0.07.
As of March 31, 2012, cash and cash equivalents totaled $5 million and total debt outstanding, net of discount, was $193 million. First quarter 2012 cash flow from operations was $10 million and capital expenditures were $1.0 million.
On April 5, 2012, the Company replaced its existing credit facilities with a new $250 million credit agreement. The new credit agreement consists of a $200 million secured term loan and $50 million secured revolving line of credit, maturing in April 2018 and April 2017, respectively. The term loan will initially bear interest at LIBOR plus 475 basis points, with a 1.25% LIBOR floor, and the revolving line of credit will initially bear interest at LIBOR plus 425 basis points. Both facilities have interest rate step downs based on the Company's financial leverage. Approximately $5.9 million of transaction related costs were capitalized and will be amortized over the term of the new agreement. In addition, $8.6 million of non-cash deferred financing costs and original issue discount and a $1.2 million pre-payment penalty associated with the previous credit facilities will be charged to interest expense in the second quarter.
Business Trends and Outlook
Second quarter consolidated revenues are expected to be between $229 million and $233 million, with sequential growth anticipated across all business segments. Gross margin is expected to remain steady between 27.5% and 28.0%. SG&A expenses are anticipated to be approximately 21.5% to 22.0% of revenues. Adjusted EBITDA margin is expected to be approximately 7.0%.