[March 05, 2014] |
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Cross Country Healthcare Announces Fourth Quarter & Full Year 2013 Financial Results
BOCA RATON, Fla. --(Business Wire)--
Cross Country Healthcare, Inc. (NASDAQ: CCRN) today announced financial
results for the fourth quarter and full year ended December 31, 2013.
The company also announced the appointment of William Burns as Chief
Financial Officer, effective April 1, 2014, succeeding Emil Hensel who
is retiring. Mr. Burns, a Certified Public Accountant, has served as
Group Vice President and Corporate Controller for Gartner, Inc. since
2008, and prior to that served as Chief Accounting Officer for CA
Technologies, Inc. Mr. Hensel will remain with the company as Special
Advisor until June 3, 2014 to assist in a smooth transition of
responsibilities to Mr. Burns.
FOURTH QUARTER FINANCIAL HIGHLIGHTS
-
Consolidated revenue was $109.2 million, a decrease of 2% from $111.7
million last year.
-
Adjusted EBITDA from continuing operations (see table titled
"Reconciliation of Non-GAAP Financial Measures") increased to $1.8
million, or 1.6% of revenue, from $1.3 million, or 1.2% of revenue, in
the prior year quarter.
-
Loss from continuing operations before income taxes was $7.3 million,
compared with a loss from continuing operations before income taxes of
$1.3 million, in the prior year quarter.
-
We incurred acquisition costs of $0.5 million, as well as a non-cash
impairment charge of $6.4 million related to certain trade names and a
non-cash valuation allowance on our deferred tax assets of $31.2
million.
-
Loss from continuing operations was $35.5 million, or $1.14 per
diluted share, compared with a loss from continuing operations of $3.0
million, or $0.10 per diluted share, in the prior year quarter.
Excluding the acquisition costs, as well as the non-cash valuation
allowance and impairment charges, loss from continuing operations
would have been $0.2 million or close to break-even per diluted share.
-
Net loss was $35.2 million or $1.13 per diluted share, compared with a
net loss of $9.5 million or $0.31 per diluted share in the prior year
quarter. Excluding the acquisition costs, as well as the non-cash
valuation allowance and impairment charges, net income would have been
$0.2 million or close to break-even per diluted share.
-
Net cash used in operations was $2.9 million.
-
On December 2, 2013, the Company acquired the operating assets of On
Assignment, Inc.'s allied healthcare staffing division for an
aggregate purchase price of $28.7 million, subject to post-closing
adjustments. Revenue of $3.4 million and contribution income of $0.3
million from the acquisition has been included in our nurse and allied
business segment results for 2013.
FULL YEAR FINANCIAL HIGHLIGHTS
-
Consolidated revenue was $438.3 million, a decrease of 1% from $442.6
million last year.
-
Adjusted EBITDA from continuing operations (see table titled
"Reconciliation of Non-GAAP Financial Measures") increased to $8.4
million, or 1.9% of revenue, from $4.0 million, or 0.9% of revenue, in
the prior year.
-
Loss from continuing operations before income taxes was $10.0 million,
compared with a loss from continuing operations before income taxes of
$26.9 million, in the prior year.
-
Loss from continuing operations was $36.9 million, or $1.19 per
diluted share, compared with a loss from continuing operations of
$20.7 million, or $0.67 per diluted share, in the prior year.
-
Cash flow from operations was $8.7 million. At the end of the year,
the Company had $8.1 million in cash and cash equivalents, $8.6
million of total debt and $19.7 million of availability under its
credit facility.
Cross Country Healthcare President and CEO William J. Grubbs commented,
"2013 was a year of change and transformation for Cross Country
Healthcare and I am encouraged by the progress we have made in our
strategic initiatives that position us for growth. We exited 2013 with
positive momentum in our two largest segments: Nurse and Allied Staffing
and Physician Staffing. I am excited about our prospects in 2014 and
going forward."
Grubbs added, "We would like to thank Emil for his 23 years of service
with the company, and we wish him well in his future endeavors. We are
also pleased to welcome Bill Burns to our company. I look forward to
working with him and am confident in his ability to help move the
company forward."
FOURTH QUARTER OPERATING PERFORMANCE
Fourth quarter consolidated revenue was $109.2 million, a decrease of 2%
from the same quarter last year, and an increase of 1% sequentially. The
Company's consolidated gross margin was 26.2%, up 120 basis points from
the same quarter last year and 10 basis points sequentially. The margin
improvement was due to lower housing and field insurance costs in our
staffing businesses, partly offset by higher provider fees in our
physician staffing business. Net cash used in operations was $2.9
million during the fourth quarter of 2013, compared with net cash
provided by operations of $4.4 million in the fourth quarter of 2012.
Revenue from the nurse and allied staffing business segment increased 1%
from the same quarter last year, and 6% sequentially. Contribution
income in this segment was $5.0 million, up from $3.6 million in the
same quarter last year. The increase in segment contribution income was
primarily due to lower housing and insurance costs for our field staff
compared to the prior year quarter.
Revenue from the physician staffing business decreased 6% from the same
quarter last year, and 8% sequentially due to lower volume in part due
to seasonality, partially offset by pricing improvement. Contribution
income was $1.8 million, down from $2.5 million in the same quarter last
year.
Revenue from the other human capital management services business
segment was $9.1 million, down 11% from the same quarter last year and
essentially flat sequentially. Contribution loss was $0.1 million, down
from a contribution income of $0.5 million in the same quarter last year.
Selling, general and administrative expenses in the fourth quarter were
$26.9 million, down 0.4% from $27.1 million from the same quarter last
year and up 6% sequentially.
Consolidated net loss in the fourth quarter was $35.2 million or $1.13
per diluted share. Loss from continuing operations in the fourth quarter
was $35.5 million or $1.14 per diluted share due to a non-cash valuation
allowance on our deferred tax assets, impairment charges and acquisition
costs. Loss from continuing operations in the fourth quarter of 2012 was
$3.0 million or $0.10 per diluted share.
At December 31, 2013, the Company had $8.1 million in cash and cash
equivalents and $8.6 million of total debt primarily related to its
revolving credit facility.
OUTLOOK
The following statements are based on current management expectations.
Such statements are forward-looking and actual results may differ
materially. These statements include an estimated negative impact from
inclement weather so far this quarter of approximately $1.5-$2.0 million
of revenue and $0.4-$0.5 million of Adjusted EBITDA. These statements do
not include the potential impact of any future mergers, acquisitions or
other business combinations, any impairment charges or valuation
allowances, or any material legal or restructuring charges. For the
first quarter of 2014, the Company expects:
-
Revenue to be in the $119 million to $121 million range.
-
Gross profit margin to be approximately 26.0% to 26.5%.
-
Adjusted EBITDA margin from continuing operations to be in the 1% to
2% range. Adjusted EBITDA, a non-GAAP financial measure, is defined in
the accompanying financial statement tables.
INVITATION TO CONFERENCE CALL
The Company will hold its quarterly conference call on Thursday,
March 6, 2014, at 10:00 a.m. to discuss its fourth quarter and full year
2013 financial results. This call will be webcast live and can be
accessed at the Company's website at www.crosscountryhealthcare.com
or by dialing 800-857-6331 from anywhere in the U.S. or by dialing
517-623-4781 from non-U.S. locations - Passcode: Cross Country. From
March 6th through March 20th, a replay of the webcast will be available
at the Company's website and a replay of the conference call will be
available by telephone by calling 800-365-2419 from anywhere in the U.S.
or 203-369-3679 from non-U.S. locations - Passcode: 2014.
NON-GAAP FINANCIAL MEASURES
This press release and accompanying financial statement tables reference
non-GAAP financial measures. Such non-GAAP financial measures are
provided as additional information and should not be considered
substitutes for, or superior to, financial measures calculated in
accordance with U.S. GAAP. Such non-GAAP financial measures are provided
for consistency and comparability to prior year results; furthermore,
management believes they are useful to investors when evaluating the
Company's performance as it excludes certain items that management
believes are not indicative of the Company's operating performance. Such
non-GAAP financial measures may differ materially from the non-GAAP
financial measures used by other companies. The financial statement
tables that accompany this press release include a reconciliation of
each non-GAAP financial measure to the most directly comparable U.S.
GAAP financial measure and a more detailed discussion of each financial
measure; as such, the financial statement tables should be read in
conjunction with the presentation of these non-GAAP financial measures.
ABOUT CROSS COUNTRY HEALTHCARE
Cross Country Healthcare, Inc. is a leader in healthcare staffing with a
primary focus on providing nurse, allied and physician (locum tenens)
staffing services and workforce solutions to the healthcare market. The
Company believes it is one of the top two providers of nurse and allied
staffing services, one of the top four providers of temporary physician
staffing services, and one of the top four providers of retained
physician and healthcare executive search services. The Company also is
a leading provider of education and training programs specifically for
the healthcare marketplace. On a company-wide basis, Cross Country
Healthcare has approximately 3,000 active contracts with hospitals and
healthcare facilities, and other healthcare organizations to provide our
staffing services and workforce solutions. Copies of this and other news
releases as well as additional information about Cross Country
Healthcare can be obtained online at www.crosscountryhealthcare.com.
Shareholders and prospective investors can also register to
automatically receive the Company's press releases, SEC filings and
other notices by e-mail.
In addition to historical information, this press release contains
statements relating to our future results (including certain projections
and business trends) that are "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 (the
"Exchange Act"), and are subject to the "safe harbor" created by those
sections. Forward-looking statements consist of statements that are
predictive in nature, depend upon or refer to future events. Words such
as "expects", "anticipates", "intends", "plans", "believes",
"estimates", "suggests", "appears", "seeks", "will" and variations of
such words and similar expressions intended to identify forward-looking
statements. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results and
performance to be materially different from any future results or
performance expressed or implied by these forward-looking statements.
These factors include, without limitation, the following: our ability to
attract and retain qualified nurses, physicians and other healthcare
personnel, costs and availability of short-term housing for our travel
nurses and physicians, demand for the healthcare services we provide,
both nationally and in the regions in which we operate, the functioning
of our information systems, the effect of existing or future government
regulation and federal and state legislative and enforcement initiatives
on our business, our clients' ability to pay us for our services, our
ability to successfully implement our acquisition and development
strategies, the effect of liabilities and other claims asserted against
us, the effect of competition in the markets we serve, our ability to
successfully defend the Company, its subsidiaries, and its officers and
directors on the merits of any lawsuit or determine its potential
liability, if any, and other factors set forth in Item 1A. "Risk
Factors" in the Company's Annual Report on Form 10-K for the year ended
December 31, 2012, and our other Securities and Exchange Commission
filings made prior to the date hereof.
Although we believe that these statements are based upon reasonable
assumptions, we cannot guarantee future results and readers are
cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the date of
this press release. There can be no assurance that (i) we have correctly
measured or identified all of the factors affecting our business or the
extent of these factors' likely impact, (ii) the available information
with respect to these factors on which such analysis is based is
complete or accurate, (iii) such analysis is correct or (iv) our
strategy, which is based in part on this analysis, will be successful.
The Company undertakes no obligation to update or revise forward-looking
statements. All references to "we," "us," "our," or "Cross Country" in
this press release mean Cross Country Healthcare, Inc., its subsidiaries
and affiliates.
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Cross Country Healthcare, Inc
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Consolidated Statements of Operations
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(Unaudited, amounts in thousands, except per share data)
|
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Three Months Ended
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Year Ended
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December 31,
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December 31,
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September 30,
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December 31,
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December 31,
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2013 (a)
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2012
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2013
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2013 (a)
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2012
|
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Revenue from services
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$
|
109,179
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$
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111,731
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|
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$
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108,048
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$
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438,311
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$
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442,635
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Operating expenses:
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Direct operating expenses
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80,617
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83,787
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79,864
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324,851
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331,050
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Selling, general and administrative expenses
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26,945
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27,055
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25,504
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|
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|
|
106,117
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|
|
|
109,417
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Bad debt expense
|
|
|
309
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|
|
|
|
|
195
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|
|
|
|
|
215
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|
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|
1,078
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|
|
786
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Depreciation
|
|
|
934
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|
|
|
|
|
1,107
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|
|
|
|
890
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|
|
|
|
|
3,886
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|
|
|
4,905
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Amortization
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|
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610
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|
|
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|
|
566
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|
|
|
|
|
552
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|
|
|
|
|
2,294
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|
|
|
2,263
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|
Acquisition costs (a)
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|
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473
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|
|
|
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|
-
|
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|
|
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-
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473
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|
-
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Restructuring costs (b)
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-
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-
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109
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484
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|
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|
-
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Legal settlement charge (c)
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|
-
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-
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-
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750
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|
-
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Impairment charges (d)
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6,400
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|
-
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-
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6,400
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|
|
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18,732
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Total operating expenses
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116,288
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|
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|
|
112,710
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107,134
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446,333
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467,153
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(Loss) income from operations
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|
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(7,109
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)
|
|
|
|
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(979
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)
|
|
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|
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914
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(8,022
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)
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(24,518
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)
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Other expenses (income):
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Foreign exchange loss (gain)
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22
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(65
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)
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(53
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)
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(132
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)
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(62
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)
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Interest expense
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215
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433
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190
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849
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2,341
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Loss on early extinguishment and modification of debt (e)
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-
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-
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-
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1,419
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82
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Other (income) expense, net
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(36
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)
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(23
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)
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(32
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)
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|
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(119
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)
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16
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(Loss) income from continuing operations before income taxes
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|
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(7,310
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)
|
|
|
|
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(1,324
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)
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809
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(10,039
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)
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(26,895
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)
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Income tax expense (benefit)
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28,228
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1,661
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(644
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)
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26,827
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(6,150
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)
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(Loss) income from continuing operations
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(35,538
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)
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|
|
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(2,985
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)
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1,453
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(36,866
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)
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(20,745
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)
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Income (loss) from discontinued operations, net of income taxes (f)
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338
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(6,548
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)
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(539
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)
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2,281
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(21,476
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)
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Net (loss) income
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$
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(35,200
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)
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$
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(9,533
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)
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$
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914
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$
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(34,585
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)
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$
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(42,221
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)
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Net (loss) income per common share, basic:
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Continuing operations
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$
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(1.14
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$
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(0.10
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)
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$
|
0.05
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$
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(1.19
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)
|
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$
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(0.67
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)
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Discontinued operations
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0.01
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|
|
|
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(0.21
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)
|
|
|
|
|
(0.02
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)
|
|
|
|
|
0.07
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|
|
|
(0.70
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)
|
Net (loss) income
|
|
$
|
(1.13
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)
|
|
|
|
$
|
(0.31
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)
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(1.12
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)
|
|
$
|
(1.37
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)
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|
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Net (loss) income per common share, diluted:
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|
|
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Continuing operations
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$
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(1.14
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)
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$
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(0.10
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)
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$
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0.05
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$
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(1.19
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)
|
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$
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(0.67
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)
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Discontinued operations
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0.01
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|
|
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(0.21
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)
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|
|
|
|
(0.02
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)
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|
|
|
|
0.07
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|
|
|
(0.70
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)
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Net (loss) income
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|
$
|
(1.13
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)
|
|
|
|
$
|
(0.31
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)
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(1.12
|
)
|
|
$
|
(1.37
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)
|
|
|
|
|
|
|
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|
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Weighted average common shares outstanding:
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Basic
|
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31,085
|
|
|
|
|
|
30,902
|
|
|
|
|
|
31,085
|
|
|
|
|
|
31,009
|
|
|
|
30,843
|
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Diluted
|
|
|
31,085
|
|
|
|
|
|
30,902
|
|
|
|
|
|
31,161
|
|
|
|
|
|
31,009
|
|
|
|
30,843
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|
|
|
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|
|
|
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Cross Country Healthcare, Inc.
|
Reconciliation of Non-GAAP Financial Measures
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
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|
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|
|
|
|
|
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|
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Three Months Ended
|
|
|
|
Year Ended
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2013 (a)
|
|
|
|
2012
|
|
|
|
2013
|
|
|
|
2013 (a)
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from operations
|
|
$
|
(7,109
|
)
|
|
|
|
$
|
(979
|
)
|
|
|
|
$
|
914
|
|
|
|
|
$
|
(8,022
|
)
|
|
$
|
(24,518
|
)
|
Depreciation
|
|
|
934
|
|
|
|
|
|
1,107
|
|
|
|
|
|
890
|
|
|
|
|
|
3,886
|
|
|
|
4,905
|
|
Amortization
|
|
|
610
|
|
|
|
|
|
566
|
|
|
|
|
|
552
|
|
|
|
|
|
2,294
|
|
|
|
2,263
|
|
Acquisition costs (a)
|
|
|
473
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
473
|
|
|
|
-
|
|
Restructuring costs (b)
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
109
|
|
|
|
|
|
484
|
|
|
|
-
|
|
Legal settlement charge (c)
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
750
|
|
|
|
-
|
|
Impairment charges (d)
|
|
|
6,400
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
6,400
|
|
|
|
18,732
|
|
Equity compensation
|
|
|
465
|
|
|
|
|
|
615
|
|
|
|
|
|
451
|
|
|
|
|
|
2,100
|
|
|
|
2,595
|
|
Adjusted EBITDA (g)
|
|
$
|
1,773
|
|
|
|
|
$
|
1,309
|
|
|
|
|
$
|
2,916
|
|
|
|
|
$
|
8,365
|
|
|
$
|
3,977
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted (Loss) Income from Continuing Operations and Adjusted
Net Income (Loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations
|
|
$
|
(35,538
|
)
|
|
|
|
$
|
(2,985
|
)
|
|
|
|
$
|
1,453
|
|
|
|
|
$
|
(36,866
|
)
|
|
$
|
(20,745
|
)
|
Acquisition costs, net of tax
|
|
|
286
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
286
|
|
|
|
-
|
|
Restructuring costs, net of tax
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
68
|
|
|
|
|
|
310
|
|
|
|
-
|
|
Legal settlement charge, net of tax
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
484
|
|
|
|
-
|
|
Loss on early extinguishment and modification of debt, net of tax
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
890
|
|
|
|
51
|
|
Impairment charges, net of tax
|
|
|
3,898
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
3,898
|
|
|
|
12,022
|
|
Valuation allowance
|
|
|
31,172
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
31,172
|
|
|
|
-
|
|
Adjusted (loss) income from continuing operations (h)
|
|
|
(182
|
)
|
|
|
|
|
(2,985
|
)
|
|
|
|
|
1,521
|
|
|
|
|
|
174
|
|
|
|
(8,672
|
)
|
Income (loss) from discontinued operations, net of income taxes (f)
|
|
|
338
|
|
|
|
|
|
(6,548
|
)
|
|
|
|
|
(539
|
)
|
|
|
|
|
2,281
|
|
|
|
(21,476
|
)
|
Adjusted net income (loss) (i)
|
|
$
|
156
|
|
|
|
|
$
|
(9,533
|
)
|
|
|
|
$
|
982
|
|
|
|
|
$
|
2,455
|
|
|
$
|
(30,148
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted (Loss) Income from Continuing Operations per Diluted
Share and Adjusted Net Income (loss) per Diluted Share:
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income from continuing operations per diluted share
|
|
$
|
(1.14
|
)
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
(1.19
|
)
|
|
$
|
(0.67
|
)
|
Acquisition costs, net of tax
|
|
|
0.01
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
0.01
|
|
|
|
-
|
|
Restructuring costs, net of tax
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
0.00
|
|
|
|
|
|
0.01
|
|
|
|
-
|
|
Legal settlement charge, net of tax
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
0.01
|
|
|
|
-
|
|
Loss on early extinguishment and modification of debt, net of tax
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
0.03
|
|
|
|
0.00
|
|
Impairment charges, net of tax
|
|
|
0.12
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
0.13
|
|
|
|
0.39
|
|
Valuation allowance
|
|
|
1.00
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
1.01
|
|
|
|
-
|
|
Adjusted (loss) income from continuing operations per diluted share
(h)
|
|
|
(0.01
|
)
|
|
|
|
|
(0.10
|
)
|
|
|
|
|
0.05
|
|
|
|
|
|
0.01
|
|
|
|
(0.28
|
)
|
Income (loss) from discontinued operations per diluted share
|
|
|
0.01
|
|
|
|
|
|
(0.21
|
)
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
0.07
|
|
|
|
(0.70
|
)
|
Adjusted net income (loss) per diluted share (i)
|
|
$
|
(0.00
|
)
|
|
|
|
$
|
(0.31
|
)
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
0.08
|
|
|
$
|
(0.98
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
31,085
|
|
|
|
|
|
30,902
|
|
|
|
|
|
31,161
|
|
|
|
|
|
31,009
|
|
|
|
30,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
|
|
|
|
|
|
|
|
|
|
Consolidated Balance Sheets (j)
|
|
|
|
|
|
|
|
|
|
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 (a)
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
8,055
|
|
|
|
|
$
|
10,463
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable, net
|
|
|
60,750
|
|
|
|
|
|
62,674
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets
|
|
|
-
|
|
|
|
|
|
5,983
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes receivable
|
|
|
538
|
|
|
|
|
|
586
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
6,163
|
|
|
|
|
|
5,580
|
|
|
|
|
|
|
|
|
|
|
|
Insurance recovery receivable
|
|
|
3,886
|
|
|
|
|
|
5,484
|
|
|
|
|
|
|
|
|
|
|
|
Indemnity escrow receivable
|
|
|
3,750
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Assets held for sale
|
|
|
-
|
|
|
|
|
|
46,971
|
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
|
|
793
|
|
|
|
|
|
1,049
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
83,935
|
|
|
|
|
|
138,790
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
6,170
|
|
|
|
|
|
8,235
|
|
|
|
|
|
|
|
|
|
|
|
Trade names, net
|
|
|
42,301
|
|
|
|
|
|
48,701
|
|
|
|
|
|
|
|
|
|
|
|
Goodwill, net
|
|
|
77,466
|
|
|
|
|
|
62,712
|
|
|
|
|
|
|
|
|
|
|
|
Other identifiable intangible assets, net
|
|
|
25,998
|
|
|
|
|
|
14,492
|
|
|
|
|
|
|
|
|
|
|
|
Debt issuance costs, net
|
|
|
464
|
|
|
|
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
|
Non-current deferred tax assets
|
|
|
339
|
|
|
|
|
|
22,760
|
|
|
|
|
|
|
|
|
|
|
|
Non-current insurance recovery receivable
|
|
|
10,914
|
|
|
|
|
|
8,210
|
|
|
|
|
|
|
|
|
|
|
|
Non-current security deposits
|
|
|
997
|
|
|
|
|
|
413
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
248,584
|
|
|
|
|
$
|
305,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
$
|
10,272
|
|
|
|
|
$
|
10,130
|
|
|
|
|
|
|
|
|
|
|
|
Accrued employee compensation and benefits
|
|
|
19,148
|
|
|
|
|
|
21,650
|
|
|
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
|
|
8,483
|
|
|
|
|
|
33,683
|
|
|
|
|
|
|
|
|
|
|
|
Sales tax payable
|
|
|
2,404
|
|
|
|
|
|
1,545
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities related to assets held for sale
|
|
|
-
|
|
|
|
|
|
2,835
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liabilities
|
|
|
339
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Other current liabilities
|
|
|
4,063
|
|
|
|
|
|
2,744
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
44,709
|
|
|
|
|
|
72,587
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
93
|
|
|
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
Long-term accrued claims
|
|
|
18,303
|
|
|
|
|
|
16,347
|
|
|
|
|
|
|
|
|
|
|
|
Long-term unrecognized tax benefits
|
|
|
4,013
|
|
|
|
|
|
4,656
|
|
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities
|
|
|
3,415
|
|
|
|
|
|
3,035
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
70,533
|
|
|
|
|
|
96,801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
3
|
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
|
|
246,325
|
|
|
|
|
|
244,924
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(970
|
)
|
|
|
|
|
(3,083
|
)
|
|
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
|
|
(67,307
|
)
|
|
|
|
|
(32,722
|
)
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
178,051
|
|
|
|
|
|
209,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
248,584
|
|
|
|
|
$
|
305,923
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Segment Data (k)
|
(Unaudited, amounts in thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
YOY
|
|
Sequential
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
September 30,
|
|
% of
|
|
% change
|
|
% change
|
|
|
2013 (a)
|
|
Total
|
|
2012
|
|
Total
|
|
2013
|
|
Total
|
|
Fav (Unfav)
|
|
Fav (Unfav)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and allied staffing
|
|
$
|
71,237
|
|
|
65
|
%
|
|
$
|
70,850
|
|
|
63
|
%
|
|
$
|
67,448
|
|
|
63
|
%
|
|
|
0.5
|
%
|
|
|
5.6
|
%
|
Physician staffing
|
|
|
28,865
|
|
|
27
|
%
|
|
|
30,667
|
|
|
28
|
%
|
|
|
31,485
|
|
|
29
|
%
|
|
|
(5.9
|
)%
|
|
|
(8.3
|
)%
|
Other human capital management services
|
|
|
9,077
|
|
|
8
|
%
|
|
|
10,214
|
|
|
9
|
%
|
|
|
9,115
|
|
|
8
|
%
|
|
|
(11.1
|
)%
|
|
|
(0.4
|
)%
|
|
|
$
|
109,179
|
|
|
100
|
%
|
|
$
|
111,731
|
|
|
100
|
%
|
|
$
|
108,048
|
|
|
100
|
%
|
|
|
(2.3
|
)%
|
|
|
1.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution income (l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and allied staffing (m)
|
|
$
|
4,996
|
|
|
|
|
$
|
3,590
|
|
|
|
|
$
|
5,156
|
|
|
|
|
|
39.2
|
%
|
|
|
(3.1
|
)%
|
Physician staffing
|
|
|
1,797
|
|
|
|
|
|
2,460
|
|
|
|
|
|
2,191
|
|
|
|
|
|
(27.0
|
)%
|
|
|
(18.0
|
)%
|
Other human capital management services
|
|
|
(133
|
)
|
|
|
|
|
534
|
|
|
|
|
|
55
|
|
|
|
|
|
(124.9
|
)%
|
|
|
(341.8
|
)%
|
|
|
|
6,660
|
|
|
|
|
|
6,584
|
|
|
|
|
|
7,402
|
|
|
|
|
|
1.2
|
%
|
|
|
(10.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate overhead (m)
|
|
|
5,352
|
|
|
|
|
|
5,890
|
|
|
|
|
|
4,937
|
|
|
|
|
|
9.1
|
%
|
|
|
(8.4
|
)%
|
Depreciation
|
|
|
934
|
|
|
|
|
|
1,107
|
|
|
|
|
|
890
|
|
|
|
|
|
15.6
|
%
|
|
|
(4.9
|
)%
|
Amortization
|
|
|
610
|
|
|
|
|
|
566
|
|
|
|
|
|
552
|
|
|
|
|
|
(7.8
|
)%
|
|
|
(10.5
|
)%
|
Acquisition costs (a)
|
|
|
473
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(100.0
|
)%
|
|
|
(100.0
|
)%
|
Restructuring costs (b)
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
109
|
|
|
|
|
|
-
|
%
|
|
|
100.0
|
%
|
Impairment charges (d)
|
|
|
6,400
|
|
|
|
|
|
-
|
|
|
|
|
|
-
|
|
|
|
|
|
(100.0
|
)%
|
|
|
(100.0
|
)%
|
(Loss) income from operations
|
|
$
|
(7,109
|
)
|
|
|
|
$
|
(979
|
)
|
|
|
|
$
|
914
|
|
|
|
|
|
(626.1
|
)%
|
|
|
877.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
|
|
|
|
|
YOY
|
|
|
|
|
December 31,
|
|
% of
|
|
December 31,
|
|
% of
|
|
|
|
|
|
% change
|
|
|
|
|
2013 (a)
|
|
Total
|
|
2012
|
|
Total
|
|
|
|
|
|
Fav (Unfav)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and allied staffing
|
|
$
|
278,973
|
|
|
63
|
%
|
|
$
|
277,754
|
|
|
63
|
%
|
|
|
|
|
|
|
0.4
|
%
|
|
|
Physician staffing
|
|
|
121,371
|
|
|
28
|
%
|
|
|
123,545
|
|
|
28
|
%
|
|
|
|
|
|
|
(1.8
|
)%
|
|
|
Other human capital management services
|
|
|
37,967
|
|
|
9
|
%
|
|
|
41,336
|
|
|
9
|
%
|
|
|
|
|
|
|
(8.2
|
)%
|
|
|
|
|
$
|
438,311
|
|
|
100
|
%
|
|
$
|
442,635
|
|
|
100
|
%
|
|
|
|
|
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contribution income (l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and allied staffing (m)
|
|
$
|
19,188
|
|
|
|
|
$
|
11,360
|
|
|
|
|
|
|
|
|
|
68.9
|
%
|
|
|
Physician staffing
|
|
|
8,617
|
|
|
|
|
|
10,652
|
|
|
|
|
|
|
|
|
|
(19.1
|
)%
|
|
|
Other human capital management services
|
|
|
746
|
|
|
|
|
|
1,944
|
|
|
|
|
|
|
|
|
|
(61.6
|
)%
|
|
|
|
|
|
28,551
|
|
|
|
|
|
23,956
|
|
|
|
|
|
|
|
|
|
19.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unallocated corporate overhead (m)
|
|
|
22,286
|
|
|
|
|
|
22,574
|
|
|
|
|
|
|
|
|
|
1.3
|
%
|
|
|
Depreciation
|
|
|
3,886
|
|
|
|
|
|
4,905
|
|
|
|
|
|
|
|
|
|
20.8
|
%
|
|
|
Amortization
|
|
|
2,294
|
|
|
|
|
|
2,263
|
|
|
|
|
|
|
|
|
|
(1.4
|
)%
|
|
|
Acquisition costs (a)
|
|
|
473
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
(100.0
|
)%
|
|
|
Restructuring costs (b)
|
|
|
484
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
(100.0
|
)%
|
|
|
Legal settlement charge (c)
|
|
|
750
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
(100.0
|
)%
|
|
|
Impairment charges (d)
|
|
|
6,400
|
|
|
|
|
|
18,732
|
|
|
|
|
|
|
|
|
|
65.8
|
%
|
|
|
(Loss) income from operations
|
|
$
|
(8,022
|
)
|
|
|
|
$
|
(24,518
|
)
|
|
|
|
|
|
|
|
|
67.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Other Financial Data
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
December 31,
|
|
|
|
December 31,
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2013 (a)
|
|
|
|
2012
|
|
|
|
2013
|
|
|
|
2013 (a)
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash (used in) provided by operating activities (in thousands)
|
|
$
|
(2,900
|
)
|
|
|
|
$
|
4,440
|
|
|
|
|
$
|
7,161
|
|
|
|
|
$
|
8,659
|
|
|
$
|
10,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nurse and allied staffing statistical data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FTEs (n)
|
|
|
2,531
|
|
|
|
|
|
2,452
|
|
|
|
|
|
2,282
|
|
|
|
|
|
2,420
|
|
|
|
2,446
|
|
Days worked (o)
|
|
|
232,852
|
|
|
|
|
|
225,584
|
|
|
|
|
|
209,944
|
|
|
|
|
|
883,300
|
|
|
|
895,236
|
|
Average nurse and allied staffing revenue per FTE per day (p)
|
|
$
|
306
|
|
|
|
|
$
|
314
|
|
|
|
|
$
|
321
|
|
|
|
|
$
|
316
|
|
|
$
|
310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Physician staffing statistical data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Days filled (q)
|
|
|
18,705
|
|
|
|
|
|
20,290
|
|
|
|
|
|
20,788
|
|
|
|
|
|
80,294
|
|
|
|
85,001
|
|
Revenue per days filled (r)
|
|
$
|
1,543
|
|
|
|
|
$
|
1,511
|
|
|
|
|
$
|
1,515
|
|
|
|
|
$
|
1,512
|
|
|
$
|
1,453
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) On December 2nd, 2013, the Company acquired the operating assets
of On Assignment, Inc.'s Allied Healthcare staffing division for an
aggregate purchase price of $28.7 million, subject to post-closing
adjustments. Results from operations for the month of December were
included in the Company's Consolidated Statement of Operations.
|
(b) Restructuring costs primarily related to senior management
employee severance pay.
|
(c) Legal settlement charge related to an agreement in principle to
settle a class action lawsuit that has preliminary been approved by
the court in 2014.
|
(d) Impairment charges in the three months and year ended December
31, 2013, relate to the impairment of trade names acquired in the
Company's MDA acquisition, of which $6.2 million was for a trade
name in the Company's physician staffing business segment and $0.2
million was for a trade name in the Company's nurse and allied
staffing business segment. Impairment charges in the year ended
December 31, 2012 relate to impairment of goodwill related to the
Company's nurse and allied staffing business segment.
|
(e) Loss on early extinguishment and modification of debt relate to
the write-off of unamortized net debt issuance costs related to the
repayment of term loan and revolver in 2013 and modification fees
related to our prior credit facility in the third quarter of 2012.
|
(f) The Company sold its clinical trial services business on
February 15, 2013. The clinical trial services business has been
classified as discontinued operations. The transaction resulted in a
gain on sale of $4.0 million pretax, or $2.1 million after tax.
|
(g) Adjusted EBITDA, a non-GAAP (Generally Accepted Accounting
Principles) financial measure, is defined as income or loss from
operations before depreciation, amortization, acquisition costs,
restructuring costs, legal settlement charges, impairment charges
and non-cash equity compensation. Adjusted EBITDA should not be
considered a measure of financial performance under GAAP. Management
presents Adjusted EBITDA because it believes that Adjusted EBITDA is
a useful supplement to income or loss from operations as an
indicator of operating performance. Management uses Adjusted EBITDA
as one performance measure in its annual cash incentive program for
certain members of its management team. In addition, management
monitors Adjusted EBITDA for planning purposes. Adjusted EBITDA, as
defined, closely matches the operating measure typically used in the
Company's credit facilities in calculating various ratios.
Management believes Adjusted EBITDA, as defined, is useful to
investors when evaluating the Company's performance as it excludes
certain items that management believes are not indicative of the
Company's operating performance. Adjusted EBITDA Margin is
calculated by dividing Adjusted EBITDA by the Company's consolidated
revenue.
|
(h) Adjusted (loss) income from continuing operations and Adjusted
(loss) income from continuing operations per diluted share, both
non-GAAP financial measures, are defined by (Loss) income from
continuing operations and (loss) earnings per diluted share before
acquisition costs, restructuring costs, legal settlement charges,
loss on early extinguishment and modification of debt, impairment
charges and deferred tax assets valuation allowance. Adjusted (loss)
income from continuing operations and Adjusted (loss) income from
continuing operations per diluted share should not be considered a
measure of financial performance under GAAP and have been provided
for consistency and comparability of the December 31, 2013 results
with the prior periods. Management believes such measures provide a
picture of the Company's results that is more comparable among
periods since it excludes the impact of items that may recur
occasionally, but tend to be irregular as to timing, thereby
distorting comparisons between periods.
|
(i) Adjusted net income (loss) and Adjusted net income (loss) per
diluted share, both non-GAAP financial measures, are defined by Net
(loss) income and Net (loss) income per diluted share before
acquisition costs, restructuring costs, legal settlement charges,
loss on early extinguishment and modification of debt, impairment
charges and deferred tax assets valuation allowance. Adjusted net
income (loss) and Adjusted net income (loss) per diluted share
should not be considered a measure of financial performance under
GAAP and have been provided for consistency and comparability of the
December 31, 2013 results with the prior periods. Management
believes such measures provide a picture of the Company's results
that is more comparable among periods since it excludes the impact
of items that may recur occasionally, but tend to be irregular as to
timing, thereby distorting comparisons between periods.
|
(j) Certain prior year amounts have been reclassified to conform to
the current period's presentation.
|
(k) Segment data provided is in accordance with the Segment
Reporting Topic of the FASB ASC.
|
(l) Contribution income is defined as income or loss from operations
before depreciation, amortization, acquisition costs, restructuring
costs, legal settlement charges, impairment charges and corporate
expenses not specifically identified to a reporting segment.
Contribution income is a financial measure used by management when
assessing segment performance.
|
(m) Certain prior year amounts have been reclassified to conform to
the current period's presentation. In 2013, the Company refined its
methodology for allocating certain corporate overhead expenses and
the nurse and allied staffing expenses to more accurately reflect
this segment's profitability.
|
(n) FTEs represent the average number of nurse and allied contract
staffing personnel on a full-time equivalent basis.
|
(o) Days worked is calculated by multiplying the FTEs by the number
of days during the respective period.
|
(p) Average revenue per FTE per day is calculated by dividing the
nurse and allied staffing revenue by the number of days worked in
the respective periods. Nurse and allied staffing revenue also
includes revenue from permanent placement of nurses.
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(q) Days filled is calculated by dividing the total hours filled
during the period by 8 hours.
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(r) Revenue per day filled is calculated by dividing the applicable
revenue generated by the Company's physician staffing segment by
days filled for the period presented.
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