[March 17, 2014] |
|
Cross Country Healthcare Announces Updated Fourth Quarter & Full Year 2013 Financial Results
BOCA RATON, Fla. --(Business Wire)--
Cross Country Healthcare, Inc. (NASDAQ:CCRN) filed its Form 10-K today
reflecting an accounting adjustment to its unaudited fourth quarter and
full year 2013 financial results previously reported on March 5, 2014.
The adjustment reflects an increase of $17.4 million in the non-cash
valuation allowance on deferred tax assets. When calculating the
non-cash valuation allowance on deferred tax assets, deferred tax
liabilities related to indefinite-lived intangible assets (such as
goodwill) were incorrectly netted against the deferred tax assets. There
is no change to Adjusted EBITDA, Adjusted (Loss) Income from Continuing
Operations, Adjusted Net Income or net cash flow from operating
activities, or the amount of cash taxes the Company will pay related to
its operations.
This $17.4 million adjustment increased the net loss for the three
months ended December 31, 2013 from $35.2 million to $52.6 million. For
the year ended December 31, 2013, net loss increased from $34.6 million
to $52.0 million. Updated financial tables showing the impact of the
adjustment are attached.
In light of this accounting adjustment, management has concluded that a
material weakness existed in the controls related to the Company's
oversight and review of non-cash, non-routine estimates and that, as a
result, internal control over financial reporting and disclosure
controls and procedures were not effective. Management is undertaking
steps to remediate the material weakness, including the development of
enhanced procedures and processes. Management believes in the future
these additional control procedures will, when fully implemented,
remediate this material weakness.
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, 2013, 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.
Cross Country Healthcare, Inc
|
Consolidated Statements of Operations
|
(Unaudited, amounts in thousands, except per share data)
|
|
|
|
Three Months Ended
|
|
|
|
Year Ended
|
|
|
December 31,
|
|
|
|
|
December 31,
|
|
|
|
|
September 30,
|
|
|
|
December 31,
|
|
December 31,
|
|
|
2013 (a)
|
|
|
|
|
2012
|
|
|
|
|
2013
|
|
|
|
2013 (a)
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue from services
|
|
$
|
109,179
|
|
|
|
|
|
$
|
111,731
|
|
|
|
|
|
$
|
108,048
|
|
|
|
|
$
|
438,311
|
|
|
$
|
442,635
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses
|
|
|
80,617
|
|
|
|
|
|
|
83,787
|
|
|
|
|
|
|
79,864
|
|
|
|
|
|
324,851
|
|
|
|
331,050
|
|
Selling, general and administrative expenses
|
|
|
26,945
|
|
|
|
|
|
|
27,055
|
|
|
|
|
|
|
25,504
|
|
|
|
|
|
106,117
|
|
|
|
109,417
|
|
Bad debt expense
|
|
|
309
|
|
|
|
|
|
|
195
|
|
|
|
|
|
|
215
|
|
|
|
|
|
1,078
|
|
|
|
786
|
|
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
|
|
Total operating expenses
|
|
|
116,288
|
|
|
|
|
|
|
112,710
|
|
|
|
|
|
|
107,134
|
|
|
|
|
|
446,333
|
|
|
|
467,153
|
|
(Loss) income from operations
|
|
|
(7,109
|
)
|
|
|
|
|
|
(979
|
)
|
|
|
|
|
|
914
|
|
|
|
|
|
(8,022
|
)
|
|
|
(24,518
|
)
|
Other expenses (income):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange loss (gain)
|
|
|
22
|
|
|
|
|
|
|
(65
|
)
|
|
|
|
|
|
(53
|
)
|
|
|
|
|
(132
|
)
|
|
|
(62
|
)
|
Interest expense
|
|
|
215
|
|
|
|
|
|
|
433
|
|
|
|
|
|
|
190
|
|
|
|
|
|
849
|
|
|
|
2,341
|
|
Loss on early extinguishment and modification of debt (e)
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
1,419
|
|
|
|
82
|
|
Other (income) expense, net
|
|
|
(36
|
)
|
|
|
|
|
|
(23
|
)
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
(119
|
)
|
|
|
16
|
|
(Loss) income from continuing operations before income taxes
|
|
|
(7,310
|
)
|
|
|
|
|
|
(1,324
|
)
|
|
|
|
|
|
809
|
|
|
|
|
|
(10,039
|
)
|
|
|
(26,895
|
)
|
Income tax expense (benefit)
|
|
|
45,612
|
|
|
|
|
|
|
1,661
|
|
|
|
|
|
|
(644
|
)
|
|
|
|
|
44,211
|
|
|
|
(6,150
|
)
|
(Loss) income from continuing operations
|
|
|
(52,922
|
)
|
|
|
|
|
|
(2,985
|
)
|
|
|
|
|
|
1,453
|
|
|
|
|
|
(54,250
|
)
|
|
|
(20,745
|
)
|
Income (loss) from discontinued operations, net of income taxes (f)
|
|
|
338
|
|
|
|
|
|
|
(6,548
|
)
|
|
|
|
|
|
(539
|
)
|
|
|
|
|
2,281
|
|
|
|
(21,476
|
)
|
Net (loss) income
|
|
$
|
(52,584
|
)
|
|
|
|
|
$
|
(9,533
|
)
|
|
|
|
|
$
|
914
|
|
|
|
|
$
|
(51,969
|
)
|
|
$
|
(42,221
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share, basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(1.70
|
)
|
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
Discontinued operations
|
|
|
0.01
|
|
|
|
|
|
|
(0.21
|
)
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
0.07
|
|
|
|
(0.70
|
)
|
Net (loss) income
|
|
$
|
(1.69
|
)
|
|
|
|
|
$
|
(0.31
|
)
|
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per common share, diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
$
|
(1.70
|
)
|
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
Discontinued operations
|
|
|
0.01
|
|
|
|
|
|
|
(0.21
|
)
|
|
|
|
|
|
(0.02
|
)
|
|
|
|
|
0.07
|
|
|
|
(0.70
|
)
|
Net (loss) income
|
|
$
|
(1.69
|
)
|
|
|
|
|
$
|
(0.31
|
)
|
|
|
|
|
$
|
0.03
|
|
|
|
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
31,085
|
|
|
|
|
|
|
30,902
|
|
|
|
|
|
|
31,085
|
|
|
|
|
|
31,009
|
|
|
|
30,843
|
|
Diluted
|
|
|
31,085
|
|
|
|
|
|
|
30,902
|
|
|
|
|
|
|
31,161
|
|
|
|
|
|
31,009
|
|
|
|
30,843
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cross Country Healthcare, Inc.
|
Reconciliation of Non-GAAP Financial Measures
|
(Unaudited, amounts in thousands)
|
|
|
|
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
|
|
$
|
(52,922
|
)
|
|
|
|
|
$
|
(2,985
|
)
|
|
|
|
|
$
|
1,453
|
|
|
|
|
$
|
(54,250
|
)
|
|
$
|
(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 on deferred tax assets
|
|
|
48,556
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
48,556
|
|
|
|
-
|
|
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
|
|
$
|
(1.70
|
)
|
|
|
|
|
$
|
(0.10
|
)
|
|
|
|
|
$
|
0.05
|
|
|
|
|
$
|
(1.75
|
)
|
|
$
|
(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 on deferred tax assets
|
|
|
1.56
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
-
|
|
|
|
|
|
1.57
|
|
|
|
-
|
|
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 - diluted
|
|
|
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
|
|
|
77,266
|
|
|
|
|
|
|
62,712
|
|
|
|
|
|
|
|
|
|
|
|
|
Other identifiable intangible assets, net
|
|
|
26,198
|
|
|
|
|
|
|
14,492
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt issuance costs, net
|
|
|
464
|
|
|
|
|
|
|
1,610
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current deferred tax assets
|
|
|
-
|
|
|
|
|
|
|
22,760
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current insurance recovery receivable
|
|
|
10,914
|
|
|
|
|
|
|
8,210
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current security deposits
|
|
|
997
|
|
|
|
|
|
|
413
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
248,245
|
|
|
|
|
|
$
|
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
|
|
|
535
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Other current liabilities
|
|
|
4,063
|
|
|
|
|
|
|
2,744
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
44,905
|
|
|
|
|
|
|
72,587
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
93
|
|
|
|
|
|
|
176
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current deferred tax liabilities
|
|
|
16,849
|
|
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
87,578
|
|
|
|
|
|
|
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
|
|
|
(84,691
|
)
|
|
|
|
|
|
(32,722
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
160,667
|
|
|
|
|
|
|
209,122
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
248,245
|
|
|
|
|
|
$
|
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.
|
(q) Days filled is calculated by dividing the total hours filled
during the period by 8 hours.
|
(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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