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Healthcare Announces First Quarter 2013 Results

AMN Healthcare Announces First Quarter 2013 Results

Reports quarterly revenue of $252 million, up 11% year-over-year

Diluted EPS of $0.16 vs. $0.07 from continuing operations in prior year

AMN Healthcare Services, Inc. (NYSE: AHS), healthcare's innovator in workforce solutions and staffing services, today announced first quarter 2013 financial results which exceeded the Company's guidance for both revenue and adjusted EBITDA. Financial highlights are as follows:

Dollars in millions, except per share amounts.*

Q1 2013

% Chg

Q1 2012

Revenue

$252.1

11%

Gross profit

$73.0

15%

Net income

$7.6

119%

Diluted EPS

$0.16

129%

Adjusted EBITDA**

$21.1

21%

*Amounts in the table exclude the impact of the discontinued operations associated with the disposal of the Home Healthcare Services segment in January 2012.

** See "Non-GAAP Measures" below for a discussion of our use of non-GAAP items and the table entitled "Supplemental Financial and Operating Data" below for a reconciliation of non-GAAP items.

AMN's year-over-year revenue growth was driven by increases across all business segments, with the largest contribution from Nurse and Allied Healthcare Staffing which grew revenue by 15%

The Travel Nurse business continued to lead AMN's performance with revenue growth of  19% over prior year

Locum Tenens Staffing hit a positive inflection point with revenue up year-over-year and sequentially

The pipeline for new MSP relationships remains robust across all staffing segments 

First quarter consolidated gross margin grew to 29.0% due to solid management of direct costs and a favorable workers' compensation reserve adjustment

Capitalizing on a favorable credit market and strong financial performance, the Company recently amended its credit agreement, which will result in future interest expense savings from a rate reduction on the term loan of 200 basis points.

"AMN's first quarter performance, with year-over-year revenue growth and improved operating leverage across all business segments, was driven by the team's strong execution and solid market demand trends," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "As our clients continue to navigate through the transformational trends in healthcare, our clear position as the leader in delivering innovative workforce solutions is enabling AMN to be a more strategic partner. Our pipeline of MSP opportunities remains strong, and we anticipate continued MSP penetration across the nursing, allied and locum tenens staffing markets."

First Quarter 2013 Results

First quarter 2013 consolidated revenue was $252 million, an increase of 11% from the same quarter last year and 2% sequentially. First quarter revenue for the Nurse and Allied Healthcare Staffing segment was $177 million, up 15% from the same quarter last year and 1% sequentially. Locum Tenens Staffing segment revenue in the first quarter was $65 million, an increase of 3% from the same quarter last year and 4% sequentially. First quarter Physician Permanent Placement Services segment revenue was $10 million, an increase of 10% from the same quarter last year and a decrease of 2% sequentially.

First quarter gross margin of 29.0% was higher by 110 basis points than the same quarter last year and 50 basis points sequentially. The increase over the prior year was due primarily to a favorable workers' compensation reserve adjustment in the Nurse and Allied Healthcare Staffing segment and a gross margin improvement in the Locum Tenens Staffing segment. The sequential increase was driven by the favorable workers' compensation reserve adjustment.

SG&A expenses for the first quarter were $54 million, representing 21.3% of revenue, compared to 20.8% of revenue in the same quarter last year and 21.4% of revenue in the prior quarter. The increase from the prior year was due primarily to higher spending in support of revenue growth and a prior year $2 million refund received in connection with the settlement of an assessment with the California Employment Development Department partially offset by improved operating leverage.

First quarter adjusted EBITDA grew 21% year-over-year to $21 million. Adjusted EBITDA margin of 8.4% represented a 70 basis point increase over the prior year and was driven by improvements in gross margin and operating leverage. First quarter net income was $8 million. First quarter net income per diluted common share was $0.16. 

As of March 31, 2013, cash and cash equivalents totaled $2 million and total term debt outstanding, net of discount, was $158 million, with a leverage ratio of 2.3 to 1. First quarter 2013 cash used in operations was $3 million, driven by an increase in working capital from higher days sales outstanding. Capital expenditures were $2 million.

The Company's amendment to its credit agreement went into effect on April 9, 2013, reducing the interest rate on the revolving line of credit and term loan. 

Business Trends and Outlook

The Company expects second quarter consolidated revenue to be between $251 million and $255 million, representing year-over-year revenue growth of 6% to 8%. Gross margin is expected to be approximately 28.5%. SG&A expenses as a percentage of revenue are expected to be approximately 21.0% to 21.5%. Adjusted EBITDA margin is expected to be approximately 7.5% to 8.0%.

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