AMN Healthcare announces Q4 & full year 2013 results
Fourth quarter and full year financial highlights are as follows:
Dollars in millions, except per share amounts.
Full Year 2013
Full Year 2012*
* Percentage change in this column excludes 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" for a reconciliation of non-GAAP items.
Full year consolidated revenue grew 6%, with year-over-year growth in all three reportable business segments.
Full year gross margin and adjusted EBITDA margin expanded, with adjusted EBITDA growing 16% and the adjusted EBITDA margin improving 70 basis points to 8.4%.
Consolidated gross margin of 29.4% for the full year and 29.8% for the fourth quarter represented an improvement of 110 basis points and 130 basis points, respectively.
Cash flow from operations was $59 million for the full year and $16 million for the fourth quarter.
On November 20, 2013, the Company acquired ShiftWise, the leading national provider of web-based healthcare workforce solutions – including its vendor management system (VMS). The ShiftWise results are included in the Nurse and Allied Healthcare Staffing segment in the Company's consolidated financial statements since the date of acquisition.
"In 2013, AMN delivered solid growth in consolidated revenue, gross margin and adjusted EBITDA margin through our differentiated strategy of providing innovative workforce solutions. Despite the current softer hospital census, demand for healthcare services is generally anticipated to expand as the impact of the Affordable Care Act unfolds. This, in combination with our leadership position in providing MSP and other workforce solutions, gives us a positive outlook for 2014," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "Our strategic acquisition of ShiftWise is another important milestone in expanding AMN's leadership position as healthcare's innovator in workforce solutions. ShiftWise's VMS solution offers clients a vendor-neutral technology option, while at the same time bolstering our own service delivery to MSP clients who prefer to have AMN manage their contingent labor program. ShiftWise demonstrates AMN's commitment to serving our clients with different approaches to efficiently managing their workforce."
Full Year 2013 Results
Full year consolidated revenue was $1,012 million, an increase of 6% from prior year. Nurse and Allied Healthcare Staffing segment revenue was $682 million, a year-over-year increase of 4%. Locum Tenens Staffing segment revenue was $287 million, a year-over-year increase of 10%. Physician Permanent Placement Services segment revenue was $42 million, a year-over-year increase of 9%.
Full year gross margin was 29.4% as compared to 28.3% for prior year, resulting from an increase in gross margin in all three reportable segments.
Full year SG&A expenses were $218 million, representing 21.6% of revenue as compared to 21.3% for the prior year. The increase in SG&A expenses was due primarily to costs related to supporting growth in the business and strategic investments to drive long-term growth, as well as higher professional liability costs in the Locum Tenens Staffing segment.
Full year net income was $33 million. Full year net income per diluted common share was $0.69. Full year adjusted EBITDA grew 16% to $85 million. Adjusted EBITDA margin of 8.4% represented a 70 basis point increase over prior year and was driven by an improved gross margin.
At December 31, 2013, cash and cash equivalents totaled $16 million. Full year cash flow from operations was $59 million. The Company ended the year with total debt outstanding, net of discount, of $159 million, with a leverage ratio of 2.0 to 1. Capital expenditures during the year were $9 million.
Fourth Quarter 2013 Results
For the fourth quarter of 2013, consolidated revenue was $249 million, flat with the same quarter last year and a decrease of 3% sequentially. Fourth quarter revenue for the Nurse and Allied Healthcare Staffing segment was $164 million, down 6% from the same quarter last year and 4% sequentially. Locum Tenens Staffing segment revenue in the fourth quarter was $74 million, an increase of 18% from the same quarter last year and down 2% sequentially. Fourth quarter Physician Permanent Placement Services segment revenue was $10 million, an increase of 4% from the same quarter last year and down 4% sequentially.
Fourth quarter gross margin of 29.8% was higher by 130 basis points than the same quarter last year and higher by 40 basis points sequentially. The increase was due to gross margin improvement in the Locum Tenens Staffing and Nurse and Allied Healthcare Staffing segments.
SG&A expenses for the fourth quarter were $54 million, representing 21.9% of revenue, compared to 21.4% of revenue in the same quarter last year and 21.6% of revenue in the prior quarter. The increase in SG&A expenses as a percentage of revenue was due primarily to the additional SG&A expenses from ShiftWise.
Fourth quarter net income was $8 million and net income per diluted share was $0.17. Fourth quarter adjusted EBITDA was $21 million, a year-over-year increase of 10% and sequential decrease of 2%. Adjusted EBITDA margin of 8.5% represented a 70 basis point increase over prior year and was driven by the improvement in gross margin.
Fourth quarter cash flow from operations was $16 million and capital expenditures were $3 million.
Business Trends and Outlook
The Company expects consolidated first quarter 2014 revenue of $244 million to $248 million. Gross margin is expected to be between 30.0% to 30.5%, reflecting a full quarter of our higher-margin Shiftwise business. SG&A expenses as a percentage of revenue are expected to be between 22.5% to 23.0%, which includes a full quarter of ShiftWise expenses, as well as certain strategic investments to drive long-term operating efficiency and expansion of our workforce solutions. Adjusted EBITDA margin is expected to be 8.0% to 8.5%.