AMN Healthcare Announces Second Quarter 2015 Results
Quarterly revenue increases to record high $350 million; reports EPS of $0.32

SAN DIEGO, Aug. 4, 2015 /PRNewswire/ -- AMN Healthcare Services, Inc. (NYSE: AHS), healthcare's leader and innovator in workforce solutions and staffing services, today announced second quarter 2015 financial results that exceeded the Company's guidance for revenue and adjusted EBITDA. Second quarter financial highlights are as follows:

Dollars in millions, except per share amounts.


Q2 2015

% Change

Q2 2014

YTD June 30,
2015

% Change YTD
June 30, 2014

Revenue

$350.1

40%

$677.7

38%

Gross profit

$110.1

43%

$211.6

40%

Net income

$15.9

121%

$28.1

89%

Diluted EPS

$0.32

113%

$0.58

87%

Adjusted diluted EPS*

$0.38

81%

$0.69

73%

Adjusted EBITDA*

$39.4

69%

$72.7

64%


*  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.

  • Consolidated revenue increased 40% year-over-year, driven by organic growth of 24% and the remainder from acquisitions.
  • Gross margin of 31.4% represented an improvement of 60 basis points year-over-year and 40 basis points from the prior quarter.
  • Adjusted EBITDA margin of 11.2% reflected a 190 basis point year-over-year improvement, driven primarily by the gross margin improvement and operating leverage.
  • Adjusted diluted EPS of $0.38 grew 81% year-over-year.
  • AMN Healthcare's differentiated strategy of serving healthcare providers through a diverse portfolio of innovative workforce solutions and staffing services continues to drive industry leading performance.

"All business segments are executing very strongly amid continued robust market conditions, which drove better than anticipated revenue and profitability growth in the second quarter," said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. "Our recently acquired Avantas, Onward Healthcare, Locum Leaders and Medefis companies are also performing very well and the majority of our integration activities have been successfully completed. With the continuing favorable market environment, our outlook remains optimistic as we stay focused on delivering superior service to our clients and healthcare professionals, improving the efficiency of our operations, and developing or acquiring additional innovative workforce solutions and recruitment strategies."  

Second Quarter 2015 Results

For the second quarter of 2015, consolidated revenue was $350 million, an increase of 40% from the same quarter last year and 7% sequentially. Second quarter revenue for the Nurse and Allied Healthcare Staffing segment was $240 million, up 45% (27% excluding acquisitions) from the same quarter last year and 5% sequentially. Locum Tenens Staffing segment revenue in the second quarter was $97 million, an increase of 31% (19% excluding acquisitions) from the same quarter last year and up 12% sequentially. Second quarter Physician Permanent Placement Services segment revenue was $13 million, an increase of 19% from the same quarter last year and up 8% sequentially.

Second quarter gross margin of 31.4% was higher by 60 basis points than the same quarter last year and higher by 40 basis points sequentially. The year-over-year gross margin improvement was driven by an increased revenue mix of our higher-margin workforce solutions businesses.

SG&A expenses for the second quarter were $75 million, representing 21.3% of revenue, compared to 22.1% in the same quarter last year and 21.8% in the prior quarter. The year-over-year improvement in SG&A expenses as a percentage of revenue was due primarily to operating leverage and a favorable professional liability actuarial adjustment. The favorable professional liability adjustment in the second quarter was $3.3 million, compared to a favorable adjustment of $1.6 million in the same quarter last year. On a sequential basis, the lower SG&A percentage was driven by the favorable professional liability actuarial adjustment, which more than offset the growth in employee expenses to support the revenue growth.

Second quarter net income was $16 million and net income per diluted share was $0.32. Excluding amortization of intangible assets of $3 million and acquisition and integration costs of $2 million, adjusted net income per diluted share was $0.38. Second quarter adjusted EBITDA was $39.4 million, a year-over-year increase of 69% and sequential increase of 18%. Second quarter adjusted EBITDA margin of 11.2% represented a 190 basis point increase year-over-year and 100 basis point increase sequentially. 

At June 30, 2015, cash and cash equivalents totaled $14 million. Second quarter cash flow from operations was $25 million and capital expenditures were $8 million. The Company ended the second quarter with total debt outstanding of $226 million, with a leverage ratio of 1.9 to 1.

Business Trends and Outlook

The Company expects consolidated third quarter 2015 revenue of $360 to $365 million. Gross margin is expected to be 31.0% to 31.5%. SG&A expenses as a percentage of revenue are expected to be approximately 22.0%, which includes integration-related expenses of approximately $0.7 million. Adjusted EBITDA margin is expected to be approximately 10.0% to 10.5%.  

About AMN Healthcare

AMN Healthcare is the leader and innovator in healthcare workforce solutions and staffing services to healthcare facilities across the nation. AMN Healthcare's workforce solutions – including managed services programs, vendor management systems, recruitment process outsourcing and consulting services – enable providers to successfully reduce complexity, increase efficiency and improve patient outcomes within the rapidly evolving healthcare environment. The Company provides unparalleled access to the most comprehensive network of quality healthcare professionals through its innovative recruitment strategies and breadth of career opportunities. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, and many other healthcare settings. AMN Healthcare disseminates news and information about the Company through its website, which can be found at www.amnhealthcare.com.

Conference Call on August 4, 2015

AMN Healthcare Services, Inc.'s second quarter 2015 conference call will be held on Tuesday, August 4, 2015, at 5:00 p.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare's website at http://amnhealthcare.investorroom.com/presentations. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (800) 288-8974 in the U.S. or (612) 332-0335 internationally. Following the conclusion of the call, a replay of the webcast will be available at the Company's website. A telephonic replay of the call will be available at 7:30 p.m. Eastern Time on August 4, 2015, and can be accessed until 11:59 p.m. Eastern Time on August 18, 2015, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 363829.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial information, which the Company provides as additional information, and not as an alternative, to the Company's condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures include (1) adjusted EBITDA, (2) adjusted EBITDA margin, and (3) adjusted diluted  EPS.  The Company provides such non-GAAP financial measures because management believes that they are useful both to management and investors as a supplement, and not as a substitute, when evaluating the Company's operating performance. Additionally, management believes that adjusted EBITDA, adjusted EBITDA margin and adjusted diluted EPS serve as industry-wide financial measures. The Company uses adjusted EBITDA for making financial decisions and allocating resources. The non-GAAP measures in this release are not in accordance with, or an alternative to, GAAP, and may be different from non-GAAP measures, or may be calculated differently than other similarly title-captioned non-GAAP measures, reported by other companies. They should not be used in isolation to evaluate the Company's performance.  A reconciliation of non-GAAP measures identified in this release, along with further detail about the use and limitations of certain of these non-GAAP measures, may be found below in the table entitled "Supplemental Financial and Operating Data" under the caption entitled "Reconciliation of Non-GAAP Items" or on the Company's website at http://amnhealthcare.investorroom.com/financialreports. Additionally, from time to time, additional information regarding non-GAAP financial measures, including pro forma measures, may be made available on the Company's website.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include expectations regarding the 2015 outlook and third quarter revenue, gross margin, SG&A expenses and adjusted EBITDA margin. The Company based these forward-looking statements on its current expectations, estimates and projections about future events and the industry in which it operates using information currently available to it. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may," "estimates," variations of such words and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements contained in this press release are set forth in the Company's Annual Report on Form 10-K for the year ended December 31, 2014 and its other periodic reports as well as the Company's current and other reports filed from time to time with the Securities and Exchange Commission. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.

Contact:
Amy C. Chang
Vice President, Investor Relations
866.861.3229 

 

AMN Healthcare Services, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

(unaudited)










Three Months Ended


Six Months Ended


June 30,


March 31,


June 30,


2015

2014


2015


2015

2014

Revenue

$     350,144

$     250,913


$     327,510


$     677,654

$     491,794

Cost of revenue

240,026

173,754


226,078


466,104

340,679

Gross profit

110,118

77,159


101,432


211,550

151,115


31.4%

30.8%


31.0%


31.2%

30.7%

Operating expenses:








Selling, general and administrative

74,727

55,567


71,552


146,279

110,234


21.3%

22.1%


21.8%


21.6%

22.4%

Depreciation and amortization

5,232

4,010


5,095


10,327

7,830

Total operating expenses

79,959

59,577


76,647


156,606

118,064

Income from operations

30,159

17,582


24,785


54,944

33,051









Interest expense, net, and other

1,977

4,629


1,807


3,784

6,475

 

Income before income taxes

 

28,182

 

12,953


 

22,978


 

51,160

 

26,576

 

Income tax expense

 

12,312

 

5,760


 

10,769


 

23,081

 

11,753

Net income

$       15,870

$         7,193


$       12,209


$       28,079

$       14,823

 

Other comprehensive income (loss):








Foreign currency translation

(80)

(37)


68


(12)

(46)

Unrealized gain on cash flow hedge, net of income taxes

 

36

 

0


0


 

36

 

0

Other comprehensive income (loss)

(44)

 

(37)

 


68


24

(46)

Comprehensive income

$       15,826

$         7,156


$       12,277


$      28,103

$       14,777

Net income per common share:

 








Basic

$           0.33

$           0.15


$           0.26


$           0.59

$           0.32

Diluted

$           0.32

$           0.15


$           0.25


$           0.58

$           0.31









Weighted average common shares outstanding:








Basic

47,573

46,479


47,146


47,361

46,416

Diluted

48,863

47,836


48,364


48,615

47,876

















 

AMN Healthcare Services, Inc.

Supplemental Financial and Operating Data

(dollars in thousands, except per share data)

(unaudited)




Three Months Ended


Six Months Ended


June  30,


March 31,


June 30,



2015


2014



2015



2015


2014

Revenue













  Nurse and allied healthcare staffing

$

240,016

$

165,894


$

229,046


$

469,062

$

329,344

  Locum tenens staffing


97,388


74,309



86,692



184,080


141,180

  Physician permanent placement services


12,740


10,710



11,772



24,512


21,270


$

350,144

$

250,913


$

327,510


$

677,654

$

491,794














Reconciliation of Non-GAAP Items:


























Segment operating income (1)













  Nurse and allied healthcare staffing

$

35,395

$

22,032


$

31,901


$

67,296

$

42,004

  Locum tenens staffing


11,711


7,818



9,110



20,821


14,691

  Physician permanent placement services


3,277


2,187



3,271



6,548


4,318



50,383


32,037



44,282



94,665


61,013

   Unallocated corporate overhead


11,006


8,694



10,960



21,966


16,562

Adjusted EBITDA (2)


39,377


23,343



33,322



72,699


44,451

Adjusted EBITDA margin (3)


11.2%


9.3%



10.2%



10.7%


9.0%














Depreciation and amortization


5,232


4,010



5,095



10,327


7,830

Share-based compensation


2,153


1,751



2,377



4,530


3,570

Acquisition and integration costs


1,833


0



1,065



2,898


0

Interest expense, net, and other


1,977


4,629



1,807



3,784


6,475

Income before income taxes


28,182


12,953



22,978



51,160


26,576

Income tax expense  


12,312


5,760



10,769



23,081


11,753

Net income

$

15,870

$

7,193


$

12,209


$

28,079

$

14,823



























GAAP diluted net income per share (EPS)

$

0.32

$

0.15


$

0.25


$

0.58

$

0.31

   Adjustments (net of tax):













   Debt extinguishment costs


0.00


0.04



0.00



0.00


0.04

   Amortization of intangible assets


0.04


0.02



0.04



0.07


0.05

   Acquisition and integration costs


0.02


0.00



0.01



0.04


0.00

Adjusted diluted EPS (4)

$

0.38

$

0.21


$

0.30


$

0.69

$

0.40



















Three Months Ended


Six Months Ended


June 30,


March 31,


June 30,



2015


2014



2015



2015


2014

Gross Margin













   Nurse and allied healthcare staffing


30.7%


29.1%



29.8%



30.2%


29.0%

   Locum tenens staffing


29.2%


29.8%



29.4%



29.3%


29.8%

   Physician permanent placement services


63.1%


63.5%



65.7%



64.4%


63.3%














Operating Data:













Nurse and allied healthcare staffing













    Average healthcare professionals on assignment (5)


7,227


5,565



7,223



7,225


5,599

Locum tenens staffing













    Days filled (6)


59,844


49,049



54,260



114,104


93,798


























As of June 30,


As of March 31,






2015


2014



2015




Leverage ratio (7)


1.9


1.9



2.2
















 

AMN Healthcare Services, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)

(unaudited)








June 30,


March 31,


December 31,


2015


2015


2014

Assets






Current assets:






Cash and cash equivalents

$         14,474


$         11,633


$         13,073

Accounts receivable, net

229,999


221,001


186,274

Accounts receivable, subcontractor

36,909


34,191


28,443

Deferred income taxes, net

27,362


26,466


27,330

Prepaid and other current assets

34,624


29,065


27,550

Total current assets

343,368


322,356


282,670

Restricted cash, cash equivalents and investments

21,698


19,772


19,567

Fixed assets, net

41,621


36,674


32,880

Other assets

45,210


44,117


39,895

Goodwill

197,325


197,254


154,387

Intangible assets, net

176,930


179,877


152,517







Total assets

$       826,152


$       800,050


$       681,916







Liabilities and stockholders' equity






Current liabilities:






Accounts payable and accrued expenses

$     101,578


$         92,081


$         78,993

Accrued compensation and benefits

76,581


72,237


67,995

Current portion of revolving credit facility

30,000


30,000


18,000

Current portion of notes payable

7,500


7,500


7,500

Deferred revenue

5,505


3,137


3,177

Other current liabilities

10,466


2,662


2,630

Total current liabilities

231,630


207,617


178,295













Revolving credit facility

55,500


65,500


0

Notes payable

133,125


135,000


136,875

Deferred income taxes, net

37,221


37,198


32,491

Other long-term liabilities

80,638


83,972


77,674

Total liabilities

538,114


529,287


425,335







Commitments and contingencies












Stockholders' equity

288,038


270,763


256,581







Total liabilities and stockholders' equity

$       826,152


$       800,050


$       681,916







 

AMN Healthcare Services, Inc.

Summary Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)










Three Months Ended


Six Months Ended


June 30,


March 31


June 30,


2015

2014 (8)


2015


2015

2014 (8)









Net cash provided by operating activities

$       25,000

$         6,177


$         8,687


$       33,687

$         7,041









Net cash used in investing activities

(9,516)

(1,100)


(85,350)


(94,866)

(5,809)









Net cash provided by (used in) financing activities

(12,563)

(8,808)


75,155


62,592

(11,265)









Effect of exchange rates on cash

(80)

(37)


68


(12)

(46)









Net increase (decrease) in cash and cash equivalents

2,841

(3,768)


(1,440)


1,401

(10,079)









Cash and cash equivalents at beginning of period

11,633

9,269


13,073


13,073

15,580









Cash and cash equivalents at end of period

$       14,474

$         5,501


$       11,633


$       14,474

$         5,501











(1)

Segment operating income represents net income plus interest expense (net of interest income) and other, income tax expense, depreciation and amortization, unallocated corporate overhead, acquisition and integration costs and share-based compensation.

(2)

Adjusted EBITDA represents net income plus interest expense (net of interest income) and other, income tax expense, depreciation and amortization, acquisition and integration costs and share-based compensation. Management believes that adjusted EBITDA provides an effective measure of the Company's results, as it excludes certain items that management believes are not indicative of the Company's operating performance and is a measure used in credit facilities. Adjusted EBITDA is not intended to represent cash flows for the period, nor has it been presented as an alternative to income from operations or net income as an indicator of operating performance. Although management believes that some of the items excluded from adjusted EBITDA are not indicative of the Company's operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted EBITDA as an operating performance measure in conjunction with GAAP measures such as net income.

(3)

Adjusted EBITDA margin represents adjusted EBITDA divided by revenue.

(4)

Adjusted diluted EPS represents GAAP diluted EPS excluding the impact of 1) amortization of intangible assets; 2) acquisition and integration costs; and 3) other non-recurring costs, such as debt extinguishment costs, in each case, net of tax. Adjusted diluted EPS for the three and six months ended June 30, 2014 have been restated to conform to the current year presentation. Management included this non-GAAP measure to provide investors and prospective investors with an alternative method for assessing the Company's operating results in a manner that is focused on its operating performance and to provide a more consistent basis for comparison between periods. However, investors and perspective investors should note that this non-GAAP measure involves judgment by management (in particular, judgment as to what is classified as a special item to be excluded from adjusted diluted EPS). Management believes the items excluded from adjusted diluted EPS are not indicative of the Company's operating performance. These items do impact the statement of comprehensive income, and management, therefore, utilizes adjusted diluted EPS as an operating performance measure in conjunction with GAAP measures such as GAAP diluted EPS.

(5)

Average healthcare professionals on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period presented.

(6)

Days filled is calculated by dividing the locum tenens hours filled during the period by eight hours.

(7)

Leverage ratio represents the ratio of the consolidated funded indebtedness (as calculated per the Company's credit agreement) at the end of the period to the consolidated adjusted EBITDA (as calculated per the Company's credit agreement) for the last twelve months.

(8)

Certain reclassifications have been made to the condensed consolidated statements of cash flows for the three and six months ended June 30, 2014 to conform to the current year presentation.

 

SOURCE AMN Healthcare Services, Inc.


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