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AMN Healthcare Announces Third Quarter 2012 Results

AMN Healthcare Announces Third Quarter 2012 Results

Reports quarterly revenue of $244 million, up 7% year-over-year

Diluted EPS from continuing operations of $0.12 vs. $0.02 in prior year

AMN Healthcare Services, Inc. has announced third quarter 2012 financial results which exceeded the Company's guidance for both revenue and adjusted EBITDA. Third quarter financial highlights are as follows:

Dollars in millions, except per share amounts.

Q3 2012

% Chg

Q3 2011

% Chg

Q2 2012

YTD

Sept 30, 2012

% Chg

Sept 30, 2011

Revenue

$243.9

7%

3%

$706.1

6%

Gross profit

$69.6

9%

4%

$199.8

7%

Net income from continuing operations

$5.9

483%

NM

$9.2

177%

Diluted EPS from continuing operations

$0.12

500%

NM

$0.20

186%

Adjusted EBITDA*

$18.8

17%

3%

$54.5

13%

Adjusted EPS from continuing operations*

$0.12

200%

9%

$0.32

167%

* See notes (2) and (4) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items.
NM – Not meaningful

Revenue for Nurse and Allied Healthcare Staffing, AMN's largest segment, was up 13% year-over-year and 5% sequentially due primarily to 19% volume growth over prior year in the travel nurse staffing business.

Locum Tenens Staffing third quarter revenue was down 6% year-over-year and flat sequentially. Physician Permanent Placement Services revenue was up 9% year-over-year and 4% sequentially.

Third quarter consolidated gross margin of 28.5% increased both year-over-year and sequentially, driven primarily by gross margin improvement in the Locum Tenens Staffing segment.

Cash flow from operations was $12 million, enabling the Company to accelerate payments on its outstanding debt.

"Our strong financial results reflect our clients' recognition of the differentiated value that our innovative workforce solutions and staffing services provide. We are very much aligned with our clients' mission of improving efficiency while delivering excellent patient care within the rapidly evolving healthcare environment," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare.

"Our sales and operations team continued to execute well within the stable demand environment and leverage the benefit of our growing managed services programs business, resulting in third quarter consolidated revenue, gross profit and adjusted EBITDA improvements both year-over-year and sequentially," added Salka. "At the same time, we continue to invest in our workforce solutions, new candidate recruitment initiatives and technology infrastructure to ensure we are ready in the long term to capitalize on the demand growth anticipated from the significant clinical workforce shortages due to healthcare reform and the aging population."

Third Quarter 2012 Results
For the third quarter of 2012, the Company generated consolidated revenue of $244 million, an increase of 7% from the same quarter last year and 3% sequentially. Third quarter revenue for the Nurse and Allied Healthcare Staffing segment was $166 million, up 13% from the same quarter last year and 5% sequentially. The Locum Tenens Staffing segment generated revenue in the third quarter of $68 million, a decrease of 6% from the same quarter last year and flat sequentially. Third quarter Physician Permanent Placement Services segment revenue was $10 million, an increase of 9% from the same quarter last year and 4% sequentially.

Gross margin in the third quarter of 28.5% was higher by 70 basis points than the same quarter last year and 10 basis points compared to the previous quarter. The increase in gross margin was due primarily to a 240 basis point and 50 basis point improvement in the Locum Tenens Staffing segment over prior year and prior quarter, respectively.

SG&A expenses for the third quarter of 2012 were $52.4 million, representing 21.5% of revenue, compared to 21.6% of revenue in the same quarter last year and 21.3% of revenue in the prior quarter. The improvement from the prior year was due primarily to improved SG&A leverage offset by increased spending in support of our revenue growth, and candidate recruitment and workforce solutions strategic initiatives.

Third quarter 2012 GAAP net income per diluted common share from continuing operations was $0.12, which compares to $0.02 in the same quarter last year and $0.00 in the prior quarter.

As of September 30, 2012, cash and cash equivalents totaled $4 million and total debt outstanding, net of discount, was $170 million. Third quarter 2012 cash flow from operations was $12 million and capital expenditures were $2 million. The Company made $24 million of voluntary debt prepayments during the third quarter and ended the quarter with a debt to LTM adjusted EBITDA leverage ratio of 2.6 to 1.

Business Trends and Outlook
The Company expects fourth quarter consolidated revenue to be between $240 million and $244 million, representing year-over-year revenue growth of 8% to 10%. Gross margin is expected to be approximately 28.0% to 28.5%. SG&A expenses as a percentage of revenue are expected to be approximately 21.5%, including a total of approximately $1 million of expenses related to strategic initiatives to expand our future candidate supply and workforce solutions position. Adjusted EBITDA margin is expected to be approximately 7.5%.

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