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AMN Healthcare Announces Fourth Quarter and Full Year 2012 Results

AMN Healthcare Announces Fourth Quarter and Full Year 2012 Results

Reports quarterly revenue of $248 million, up 12% year-over-year

Diluted EPS from continuing operations of $0.15 vs. $0.04 in prior year

AMN Healthcare Services, Inc. healthcare's innovator in workforce solutions and staffing services, today announced fourth quarter 2012 financial results which exceeded the Company's guidance for both revenue and adjusted EBITDA. Fourth quarter and full year financial highlights are as follows:

Dollars in millions, except per share amounts.*

Q4 2012 % Chg   Q4 2011 Full Year 2012    %  Chg Full Year 2011

Revenue              $247.8     12%                     $954.0                 7%

Gross profit        $70.6       12%                     $270.4                 8%

Net income       $7.1          321%                  $16.3                   225%

Adj EBITDA**    $19.2       2%                       $73.7                   15%

** See notes (2) and (4) under "Supplemental Financial and Operating Data" for a reconciliation of non-GAAP items.

•             Full year consolidated revenue grew 7% and adjusted EBITDA grew 15%. The 50 basis point increase in adjusted EBITDA margin to 7.7% for the year was driven by improved gross margin and SG&A leverage.

•             Fourth quarter consolidated revenue grew 12% and adjusted EBITDA grew 22% year-over-year. The increase was driven primarily by Nurse and Allied Healthcare Staffing, AMN's largest segment, which had revenue growth of 18% year-over-year and 5% sequentially.

•             Locum Tenens Staffing fourth quarter revenue was down 3% year-over-year and 7% sequentially. Physician Permanent Placement Services revenue was up 8% year-over-year and 1% sequentially.

•             Fourth quarter consolidated gross margin of 28.5% was higher by 20 basis points year-over-year and remained steady over prior quarter.

•             Cash flow from operations was $61 million for the full year and $18 million for the fourth quarter, enabling the Company to significantly reduce its long-term debt.

"AMN Healthcare made tremendous strides in executing on our long-term strategy during 2012. The investments we made to develop successful, innovative workforce solutions, coupled with the strong execution by our teams, have created significant differentiation and value for our clients," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "We expect 2013 to be another year of steady growth, improved profitability and solid cash flows. Further growth in MSP and other workforce solutions is expected and we will continue to be at the forefront of innovating and delivering quality, economically beneficial solutions and staffing services to our clients as they navigate through the transformational trends in healthcare."

Full Year 2012 Results

Full year consolidated revenue was $954 million, an increase of 7% from prior year. Nurse and Allied Healthcare Staffing segment revenue was $654 million, a year-over-year  increase of 15%. The Travel Nurse business contributed the greatest growth with a 22% revenue increase over prior year. Locum Tenens Staffing segment revenue was $261 million, a year-over-year decrease of 6%. Physician Permanent Placement Services segment revenue was flat with prior year at $39 million, and up 9% without the impact of deferred revenue accounting changes implemented in 2011.

Full year gross margin was 28.3% as compared to 28.1% for prior year. The year-over-year improvement was due primarily to an increase in the Locum Tenens Staffing segment gross margin of 210 basis points.

Full year SG&A expenses were $203 million, representing 21.3% of revenue as compared to 22.0% for the prior year. The improvement was due primarily to improved SG&A leverage and the absence of integration-related expenses, partially offset by increased spending in support of revenue growth and strategic initiatives to enhance candidate recruitment, workforce solutions, and technology infrastructure.

Full year adjusted EBITDA grew 15% to $74 million. Adjusted EBITDA margin of 7.7% represented a 50 basis point increase over prior year and was driven by improvement in gross margin and operating leverage. Full year net income from continuing operations was $16 million. Full year net income per diluted common share from continuing operations was $0.35. Adjusted diluted earnings per share for the full year was $0.47. 

As of December 31, 2012, cash and cash equivalents totaled $6 million. Full year cash flow from operations was $61 million, which enabled debt payments of $50 million throughout the year. The Company ended the year with total debt outstanding, net of discount, of $158 million, with a leverage ratio of 2.4 to 1. Capital expenditures during the year were $5 million.

Fourth Quarter 2012 Results

For the fourth quarter of 2012, consolidated revenue was $248 million, an increase of 12% from the same quarter last year and 2% sequentially. Fourth quarter revenue for the Nurse and Allied Healthcare Staffing segment was $175 million, up 18% from the same quarter last year and 5% sequentially. Locum Tenens Staffing segment revenue in the fourth quarter was $63 million, a decrease of 3% from the same quarter last year and 7% sequentially. Fourth quarter Physician Permanent Placement Services segment revenue was $10 million, an increase of 8% from the same quarter last year and 1% sequentially.

Fourth quarter gross margin of 28.5% was higher by 20 basis points than the same quarter last year and flat sequentially. The increase was due primarily to the gross margin improvement in the Locum Tenens Staffing segment over prior year.

SG&A expenses for the fourth quarter were $53 million, representing 21.4% of revenue, compared to 22.1% of revenue in the same quarter last year and 21.5% of revenue in the prior quarter. The improvement from the prior year was due to improved operating leverage.

Fourth quarter adjusted EBITDA grew 22% year-over-year to $19 million. Adjusted EBITDA margin of 7.8% represented a 70 basis point increase over prior year and was driven by improvement in gross margin and operating leverage. Fourth quarter net income from continuing operations was $7 million. Fourth quarter net income per diluted common share from continuing operations and adjusted diluted earnings per share were $0.15. 

Fourth quarter cash flow from operations was $18 million and capital expenditures were $2 million. The Company made $12 million of voluntary debt prepayments during the fourth quarter.

Business Trends and Outlook

The Company expects first quarter consolidated revenue to be between $246 million and $250 million, representing year-over-year revenue growth of 9% to 10%. This reflects two fewer calendar days in the quarter, which primarily has an impact on our Nurse Staffing businesses. Gross margin is expected to be 28.0% to 28.5%. SG&A expenses as a percentage of revenue are expected to be 21.0% to 21.5%. Adjusted EBITDA margin is expected to be 7.5% to 8.0%.

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