AMN Healthcare Announces Second Quarter 2012 Results
AMN Healthcare Announces Second Quarter 2012 Results
Reports quarterly revenue of $236 million, up 7% year-over-year
Adjusted EPS of $0.11 vs. $0.03 prior year
AMN Healthcare Services, Inc healthcare's innovator in workforce solutions and staffing services, today announced second quarter 2012 financial results which exceeded the Company's guidance. Second quarter financial highlights are as follows:
Dollars in millions, except per share amounts.
June 30, 2012
June 30, 2011
Net income (loss) from continuing operations
Diluted EPS from continuing operations
Adjusted EPS from continuing operations*
* See notes (2) and (4) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items.
NM – Not meaningful
The Company experienced second quarter sequential revenue growth and gross margin improvement across all business segments, reflecting continued successful execution in its core staffing and recruitment services and workforce solutions strategy.
Revenue for Nurse and Allied Healthcare Staffing, AMN's largest segment, was up 13% year-over-year and 3% sequentially due primarily to double-digit volume growth over prior year in both the travel nurse and allied staffing businesses.
The Locum Tenens Staffing segment experienced strong year-over-year and sequential improvement in gross margin.
Physician Permanent Placement Services second quarter revenue and placements were up year-over-year and sequentially on growth in new searches and placements.
Second quarter consolidated gross margin of 28.4% increased by 110 basis points from the prior year on improved bill to pay spreads.
During the second quarter, the Company successfully refinanced its existing credit facilities which resulted in a lower average cost of debt, extended maturity, and improved covenant structure.
Cash flow from operations was $21 million, enabling the Company to accelerate payments on its outstanding debt.
"AMN Healthcare continues to further differentiate itself with clients through our innovative healthcare workforce solutions and staffing services which help providers cost effectively achieve excellence in patient care. Our clients are seeing the value in these services, as we continue to win and implement new managed services programs and other workforce solutions contracts," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare.
"In the second quarter, we experienced solid performance with revenues and gross margins up sequentially across all business segments as a result of the improved demand environment and solid everyday execution by our sales and operations team. With the impact of healthcare reform and the aging population, severe healthcare workforce shortages are expected to materialize over the next few years resulting in more significant demand for recruitment and staffing services. To meet our clients' needs and deliver continued industry-leading performance, we are increasing our investment in our strategic workforce solutions and new candidate recruitment initiatives," added Salka.
Second Quarter 2012 Results
For the second quarter of 2012, the Company generated consolidated revenue of $236 million, an increase of 7% from the same quarter last year and 4% sequentially. Second quarter revenue for the Nurse and Allied Healthcare Staffing segment was $159 million, up 13% from the same quarter last year and 3% sequentially. The Locum Tenens Staffing segment generated revenue in the second quarter of $68 million, a decrease of 5% from the same quarter last year and an increase of 6% sequentially. Second quarter Physician Permanent Placement Services segment revenue was $10 million, an increase of 1% from the same quarter last year and 6% sequentially. Excluding the impact of the prior year adoption of a new revenue recognition accounting standard, revenue for this segment increased 10% year-over-year.
Gross margin in the second quarter of 28.4% was higher by 110 basis points from the same quarter last year and 50 basis points compared to the previous quarter. The increase in gross margin was due primarily to higher bill to pay spreads in the Locum Tenens Staffing and Nurse and Allied Healthcare Staffing segments.
SG&A expenses for the second quarter of 2012 were $50 million, representing 21.3% of revenue compared to 21.8% of revenue in the same quarter last year and 20.8% of revenue in the prior quarter. The decrease compared to the same quarter last year was due primarily to the absence of integration-related expenses associated with the Medfinders acquisition and improved SG&A leverage, offset by increased spending in support of revenue growth and candidate recruitment and workforce solutions initiatives. The increase compared with the prior quarter was due primarily to a refund received in the prior quarter from the California Employment Development Department.
In the second quarter, the Company refinanced its debt and charged to interest expense $8.6 million of non-cash deferred costs associated with the previous credit facilities and a $1.2 million pre-payment penalty.
Second quarter 2012 GAAP net income per diluted common share from continuing operations was $0.00. Excluding the one-time costs associated with the debt refinancing, adjusted earnings per diluted common share from continuing operations was $0.11.
As of June 30, 2012, cash and cash equivalents totaled $15 million and total debt outstanding, net of discount, was $194 million. Second quarter 2012 cash flow from operations was $21 million and capital expenditures were $1 million. The Company made $4 million in voluntary debt prepayments during second quarter 2012, and made an additional $20 million in voluntary debt prepayments thus far during the third quarter.
Business Trends and Outlook
The Company expects third quarter consolidated revenue to be between $236 million and $240 million, representing year-over-year revenue growth of 3% to 5%. Gross margin is expected to be approximately 28.0% to 28.5%. SG&A expenses as a percentage of revenue is expected to remain consistent with second quarter of 2012 including approximately $1 million of expenses related to strategic initiatives to expand our future candidate supply and new workforce solutions. Adjusted EBITDA margin is expected to be approximately 7.5%.