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Cross Country Healthcare Announces Fourth Quarter and Full Year 2023 Financial Results

Cross Country Healthcare, Inc. (the “Company”) (Nasdaq: CCRN) today announced financial results for its fourth quarter and full year ended December 31, 2023.

SELECTED FINANCIAL INFORMATION:

Dollars are in thousands, except per share amounts

Q4 2023

 

Variance

Q4 2023 vs

Q4 2022

 

Variance

Q4 2023 vs

Q3 2023

 

Full Year 2023

 

Variance

2023 vs

2022

Revenue

$

414,035

 

 

(34

)

%

 

(6

)

%

$

2,019,728

 

 

(28

)

%

Gross profit margin*

 

21.9

%

 

(20

)

bps

 

(10

)

bps

 

22.3

%

 

(10

)

bps

Net income attributable to common stockholders

$

9,038

 

 

(77

)

%

 

(29

)

%

$

72,631

 

 

(61

)

%

Diluted EPS

$

0.26

 

$

(0.79

)

 

$

(0.10

)

 

$

2.05

 

$

(2.97

)

 

Adjusted EBITDA*

$

20,592

 

 

(64

)

%

 

(24

)

%

$

144,421

 

 

(52

)

%

Adjusted EBITDA margin*

 

5.0

%

 

(410

)

bps

 

(120

)

bps

 

7.2

%

 

(360

)

bps

Adjusted EPS*

$

0.29

 

$

(0.80

)

 

$

(0.10

)

 

$

2.23

 

$

(3.04

)

 

Cash flows from operations

$

12,074

 

 

179

 

%

 

(83

)

%

$

248,498

 

 

85

 

%

* Represents amounts that are not calculated in accordance with U.S. generally accepted accounting principles (GAAP) and are referred to as non-GAAP measures. Please refer to the accompanying discussion of how these non-GAAP financial measures are calculated and used under “Non-GAAP Financial Measures” and tables reconciling these measures to the closest GAAP measure, below.

Fourth Quarter and Full Year Business Highlights

  • Fourth quarter Revenue exceeded the high end of our guidance range
  • Physician Staffing and Education experienced annual double-digit year-over-year revenue growth
  • Proactively managed our cost structure and drove a full year adjusted EBITDA margin of over 7%
  • Positive cash flow from operations of $12 million for the quarter and a record year of $249 million
  • Repaid $73.9 million on the term loan and paid down the ABL, ending the year debt-free
  • Invested more than $20 million in our core technologies including Intellify® and XperienceTM
  • Repurchased 6.8% of shares outstanding or 2.3 million shares for $57.6 million in 2023

“We are proud of all we accomplished in 2023, such as successfully rolling out our vendor neutral offering Intellify® and driving growth in our non-travel businesses: physician staffing, education, and homecare,” said John A. Martins, President and Chief Executive Officer of Cross Country Healthcare. He continued, “For the coming year, our goal is to capitalize on the investments we have made in our business by growing our client base and ramping our recent wins, as well as driving operational efficiency to expand our margins. With the health and strength of our balance sheet, we are well positioned to make further strategic investments and accretive acquisitions to meet the evolving needs of our clients.”

Fourth quarter consolidated revenue was $414.0 million, a decrease of 34% year-over-year and 6% sequentially. Consolidated gross profit margin was 21.9%, down 20 basis points year-over-year and 10 basis points sequentially. Net income attributable to common stockholders was $9.0 million compared to $38.8 million in the prior year and $12.8 million in the prior quarter. Diluted earnings per share (EPS) was $0.26 compared to $1.05 in the prior year and $0.36 in the prior quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $20.6 million, or 5.0% of revenue, as compared with $57.0 million, or 9.1% of revenue, in the prior year, and $27.2 million, or 6.2% of revenue, in the prior quarter. Adjusted EPS was $0.29 compared to $1.09 in the prior year and $0.39 in the prior quarter.

For the year ended December 31, 2023, consolidated revenue was $2.0 billion, a decrease of 28% year-over-year. Consolidated gross profit margin was 22.3%, down 10 basis points from the prior year. Net income attributable to common stockholders was $72.6 million, or 2.05 per diluted share, compared to $188.5 million, or $5.02 per diluted share, in the prior year. Adjusted EBITDA was $144.4 million, or 7.2% of revenue, as compared with $301.7 million, or 10.8% of revenue, in the prior year. Adjusted EPS was $2.23 compared to $5.27 in the prior year.

Quarterly Business Segment Highlights

Nurse and Allied Staffing

Revenue was $367.2 million, a decrease of 38% year-over-year and 7% sequentially. Contribution income was $33.9 million, a decrease from $69.9 million in the prior year and $39.2 million in the prior quarter. Average field contract personnel on a full-time equivalent (FTE) basis were 9,570 as compared with 12,447 in the prior year and 9,849 in the prior quarter. Revenue per FTE per day was $414 compared to $510 in the prior year and $434 in the prior quarter. As expected, volume declined as clients continue to right-size their needs, and travel bill rates continued to normalize.

Physician Staffing

Revenue was $46.9 million, an increase of 26% year-over-year and 3% sequentially. Contribution income was $1.9 million, an increase from $1.7 million in the prior year and a decrease from $2.6 million in the prior quarter. Total days filled were 23,578 as compared with 21,335 in the prior year and 23,004 in the prior quarter. Revenue per day filled was $1,988 as compared with $1,740 in the prior year and $1,986 in the prior quarter. The year-over-year increase in revenue was primarily due to an increase in volume in several specialties.

Cash Flow and Balance Sheet Highlights

Net cash provided by operating activities for the quarter was $12.1 million. For the year ended December 31, 2023, net cash provided by operating activities was $248.5 million as compared to $134.1 million in the prior year.

During the fourth quarter, the Company repurchased and retired a total of 0.3 million shares of the Company's common stock for an aggregate price of $6.4 million, at an average market price of $20.98 per share. As of December 31, 2023, the Company had 34.4 million unrestricted shares outstanding and $77.3 million remaining for share repurchase.

At December 31, 2023, the Company had $17.1 million in cash and cash equivalents with no debt outstanding. There were no borrowings drawn under its revolving senior secured asset-based credit facility (ABL), and $13.8 million of letters of credit outstanding. As of December 31, 2023, borrowing base availability under the ABL was $220.6 million, with $206.8 million of excess availability.

Outlook for First Quarter 2024

The guidance below applies only to management’s expectations for the first quarter of 2024.

 

Q1 2024 Range

 

Year-over-Year

 

Sequential

Change

 

Change

 

 

 

 

 

 

Revenue

$370 million - $380 million

 

(41)% - (39)%

 

(11)% - (8)%

 

 

 

 

 

 

Adjusted EBITDA*

$13.0 million - $18.0 million

 

(75)% - (65)%

 

(37)% - (13)%

 

 

 

 

 

 

Adjusted EPS*

$0.15 - $0.25

 

$(0.69) - $(0.59)

 

$(0.14) - $(0.04)

* Refer to discussion of non-GAAP financial measures and reconciliation tables below.

The above estimates are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future significant share repurchases.

INVITATION TO CONFERENCE CALL

The Company will hold its quarterly conference call on Wednesday, February 21, 2024, at 5:00 P.M. Eastern Time to discuss its fourth quarter and full year 2023 financial results. This call will be webcast live and can be accessed at the Company's website at ir.crosscountry.com or by dialing 888-566-1290 from anywhere in the U.S. or by dialing 773-799-3776 from non-U.S. locations - Passcode: Cross Country. A replay of the webcast will be available from February 21st through March 6th on the Company's website and a replay of the conference call will be available by telephone by calling 800-391-9851 from anywhere in the U.S. or 203-369-3268 from non-U.S. locations - Passcode: 4335.

ABOUT CROSS COUNTRY HEALTHCARE

Cross Country Healthcare, Inc. is a market-leading, tech-enabled workforce solutions and advisory firm with 37 years of industry experience and insight. We help clients tackle complex labor-related challenges and achieve high-quality outcomes, while reducing complexity and improving visibility through data-driven insights. Diversity, equality, and inclusion is at the heart of the organization’s overall corporate social responsibility program, and closely aligned with our core values to create a better future for its people, communities, and its stockholders.

Copies of this and other press releases, as well as additional information about the Company, can be accessed online at ir.crosscountry.com. Stockholders and prospective investors can also register to automatically receive the Company's press releases, filings with the Securities and Exchange Commission (SEC), and other notices by e-mail.

NON-GAAP FINANCIAL MEASURES

This press release and the accompanying financial statement tables reference non-GAAP financial measures, such as gross profit margin, adjusted EBITDA, and adjusted EPS. 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 United States generally accepted accounting principles (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 they exclude certain items that management believes are not indicative of the Company's future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned. 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 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.

In addition, forward-looking adjusted EBITDA and adjusted EPS for fiscal 2023 exclude potential charges or gains that may be recorded during the fiscal year, including among other things, the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future significant share repurchases. We have not attempted to provide reconciliations of such forward-looking non-GAAP earnings guidance to the comparable GAAP measure, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K, because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of our financial performance.

FORWARD LOOKING STATEMENTS

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, Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act), and the Private Securities Litigation Reform Act of 1995, and are subject to the safe harbor created by those sections. Forward-looking statements consist of statements that are predictive in nature and/or depend upon or refer to future events. Words such as expects, anticipates, intends, plans, believes, estimates, suggests, appears, seeks, will, could, and variations of such words and similar expressions are intended to identify forward-looking statements. These 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, but are not limited to, the following: the overall macroeconomic environment, including increased inflation and interest rates, demand for the healthcare services we provide, both nationally and in the regions in which we operate, our ability to attract and retain qualified nurses, physicians and other healthcare personnel, costs and availability of short-term housing for our travel healthcare professionals, the functioning of our information systems, the effect of cyber security risks and cyber incidents on our business, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our customers’ ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, 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, including, without limitation, the risk factors set forth in Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed and updated in our Quarterly Reports on Form 10-Q and other filings with the SEC. You should consult any further disclosures the Company makes on related subjects in its filings with the SEC.

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. Except as may be required by law, the Company undertakes no obligation to update or revise forward-looking statements. All references to the Company, we, us, our, or Cross Country in this press release mean Cross Country Healthcare, Inc. and its consolidated subsidiaries.

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,

 

2023

 

2022

 

2023

 

2023

 

2022

 

 

 

 

Revenue from services

$

414,035

 

 

$

628,218

 

 

$

442,291

 

$

2,019,728

 

$

2,806,609

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Direct operating expenses

 

323,546

 

 

 

489,276

 

 

 

344,932

 

 

1,569,318

 

 

2,178,923

 

Selling, general and administrative expenses

 

67,566

 

 

 

81,367

 

 

 

69,627

 

 

300,391

 

 

324,935

 

Bad debt expense

 

4,165

 

 

 

2,947

 

 

 

2,355

 

 

14,562

 

 

9,609

 

Depreciation and amortization

 

4,471

 

 

 

3,162

 

 

 

4,540

 

 

18,347

 

 

12,576

 

Restructuring costs

 

863

 

 

 

2

 

 

 

348

 

 

2,553

 

 

1,861

 

Legal settlement charges

 

 

 

 

 

 

 

 

 

1,125

 

 

 

Impairment charges

 

 

 

 

 

 

 

186

 

 

719

 

 

5,597

 

Total operating expenses

 

400,611

 

 

 

576,754

 

 

 

421,988

 

 

1,907,015

 

 

2,533,501

 

Income from operations

 

13,424

 

 

 

51,464

 

 

 

20,303

 

 

112,713

 

 

273,108

 

Other expenses (income):

 

 

 

 

 

 

 

 

 

Interest expense

 

586

 

 

 

3,515

 

 

 

669

 

 

8,094

 

 

14,391

 

Loss on early extinguishment of debt

 

 

 

 

1,816

 

 

 

 

 

1,723

 

 

3,728

 

Other (income) expense, net

 

(131

)

 

 

(217

)

 

 

134

 

 

2

 

 

(1,336

)

Income before income taxes

 

12,969

 

 

 

46,350

 

 

 

19,500

 

 

102,894

 

 

256,325

 

Income tax expense

 

3,931

 

 

 

7,559

 

 

 

6,688

 

 

30,263

 

 

67,864

 

Net income attributable to common stockholders

$

9,038

 

 

$

38,791

 

 

$

12,812

 

$

72,631

 

$

188,461

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders - Basic

$

0.26

 

 

$

1.06

 

 

$

0.37

 

$

2.07

 

$

5.09

 

 

 

 

 

 

 

 

 

 

 

Net income per share attributable to common stockholders - Diluted

$

0.26

 

 

$

1.05

 

 

$

0.36

 

$

2.05

 

$

5.02

 

 

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

34,481

 

 

 

36,455

 

 

 

34,954

 

 

35,158

 

 

37,012

 

Diluted

 

34,685

 

 

 

36,926

 

 

 

35,152

 

 

35,476

 

37,536

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,

 

2023

 

2022

 

2023

 

2023

 

2022

Adjusted EBITDA:a

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

9,038

 

 

$

38,791

 

 

$

12,812

 

 

$

72,631

 

 

$

188,461

 

Interest expense

 

586

 

 

 

3,515

 

 

 

669

 

 

 

8,094

 

 

 

14,391

 

Income tax expenseb

 

3,931

 

 

 

7,559

 

 

 

6,688

 

 

 

30,263

 

 

 

67,864

 

Depreciation and amortization

 

4,471

 

 

 

3,162

 

 

 

4,540

 

 

 

18,347

 

 

 

12,576

 

Acquisition and integration-related costs

 

 

 

 

196

 

 

 

13

 

 

 

59

 

 

 

726

 

Restructuring costsc

 

863

 

 

 

2

 

 

 

348

 

 

 

2,553

 

 

 

1,861

 

Legal fees and settlementsd

 

 

 

 

 

 

 

 

 

 

1,125

 

 

 

 

Impairment chargese

 

 

 

 

 

 

 

186

 

 

 

719

 

 

 

5,597

 

Loss on disposal of fixed assets

 

44

 

 

 

19

 

 

 

43

 

 

 

87

 

 

 

44

 

Loss on early extinguishment of debtf

 

 

 

 

1,816

 

 

 

 

 

 

1,723

 

 

 

3,728

 

(Gain) loss on lease terminationg

 

 

 

 

(231

)

 

 

96

 

 

 

104

 

 

 

(1,325

)

Other income, net

 

(175

)

 

 

(4

)

 

 

(5

)

 

 

(189

)

 

 

(55

)

Equity compensation

 

1,166

 

 

 

2,187

 

 

 

1,433

 

 

 

6,579

 

 

 

7,393

 

System conversion costsh

 

668

 

 

 

14

 

 

 

425

 

 

 

2,326

 

 

 

455

 

Adjusted EBITDAa

$

20,592

 

 

$

57,026

 

 

$

27,248

 

 

$

144,421

 

 

$

301,716

 

Adjusted EBITDA margina

 

5.0

%

 

 

9.1

%

 

 

6.2

%

 

 

7.2

%

 

 

10.8

%

 

 

 

 

 

 

 

 

 

 

Adjusted EPS:i

 

 

 

 

 

 

 

 

 

Numerator:

 

 

 

 

 

 

 

 

 

Net income attributable to common stockholders

$

9,038

 

 

$

38,791

 

 

$

12,812

 

 

$

72,631

 

 

$

188,461

 

Non-GAAP adjustments - pretax:

 

 

 

 

 

 

 

 

 

Acquisition and integration-related costs

 

 

 

 

196

 

 

 

13

 

 

 

59

 

 

 

726

 

Restructuring costsc

 

863

 

 

 

2

 

 

 

348

 

 

 

2,553

 

 

 

1,861

 

Legal fees and settlementsd

 

 

 

 

 

 

 

 

 

 

1,125

 

 

 

 

Impairment chargese

 

 

 

 

 

 

 

186

 

 

 

719

 

 

 

5,597

 

System conversion costsh

 

668

 

 

 

14

 

 

 

425

 

 

 

2,326

 

 

 

455

 

Loss on early extinguishment of debtf

 

 

 

 

1,816

 

 

 

 

 

 

1,723

 

 

 

3,728

 

Tax impact of non-GAAP adjustments

 

(400

)

 

 

(519

)

 

 

(208

)

 

 

(2,167

)

 

 

(3,198

)

Adjusted net income attributable to common stockholders - non-GAAP

$

10,169

 

 

$

40,300

 

 

$

13,576

 

 

$

78,969

 

 

$

197,630

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

Weighted average common shares - basic, GAAP

 

34,481

 

 

 

36,455

 

 

 

34,954

 

 

 

35,158

 

 

 

37,012

 

Dilutive impact of share-based payments

 

204

 

 

 

471

 

 

 

198

 

 

 

318

 

 

 

524

 

Adjusted weighted average common shares - diluted, non-GAAP

 

34,685

 

 

 

36,926

 

 

 

35,152

 

 

 

35,476

 

 

 

37,536

 

 

 

 

 

 

 

 

 

 

 

Reconciliation:

 

 

 

 

 

 

 

 

 

Diluted EPS, GAAP

$

0.26

 

 

$

1.05

 

 

$

0.36

 

 

$

2.05

 

 

$

5.02

 

Non-GAAP adjustments - pretax:

 

 

 

 

 

 

 

 

 

Acquisition and integration-related costs

 

 

 

 

0.01

 

 

 

 

 

 

 

 

 

0.02

 

Restructuring costsc

 

0.02

 

 

 

 

 

 

0.01

 

 

 

0.07

 

 

 

0.05

 

Legal fees and settlementsd

 

 

 

 

 

 

 

 

 

 

0.03

 

 

 

 

Impairment chargese

 

 

 

 

 

 

 

0.01

 

 

 

0.02

 

 

 

0.15

 

System conversion costsh

 

0.03

 

 

 

 

 

 

0.01

 

 

 

0.07

 

 

 

0.01

 

Loss on early extinguishment of debtf

 

 

 

 

0.05

 

 

 

 

 

 

0.05

 

 

 

0.10

 

Tax impact of non-GAAP adjustments

 

(0.02

)

 

 

(0.02

)

 

 

 

 

 

(0.06

)

 

 

(0.08

)

Adjusted EPS, non-GAAPi

$

0.29

 

 

$

1.09

 

 

$

0.39

 

 

$

2.23

 

 

$

5.27

 

Cross Country Healthcare, Inc.

Consolidated Balance Sheets

(Unaudited, amounts in thousands)

 

 

December 31,

 

December 31,

 

2023

 

2022

 

 

 

 

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

17,094

 

 

$

3,604

 

Accounts receivable, net

 

372,352

 

 

 

641,611

 

Income taxes receivable

 

6,898

 

 

 

10,915

 

Prepaid expenses

 

7,681

 

 

 

11,067

 

Insurance recovery receivable

 

9,097

 

 

 

7,434

 

Other current assets

 

2,031

 

 

 

1,042

 

Total current assets

 

415,153

 

 

 

675,673

 

Property and equipment, net

 

27,339

 

 

 

19,662

 

Operating lease right-of-use assets

 

2,599

 

 

 

3,254

 

Goodwill

 

135,430

 

 

 

163,268

 

Other intangible assets, net

 

54,468

 

 

 

44,723

 

Deferred tax assets

 

5,954

 

 

 

7,092

 

Insurance recovery receivable

 

25,714

 

 

 

23,058

 

Cloud computing

 

5,987

 

 

 

4,460

 

Other assets

 

6,673

 

 

 

6,649

 

Total assets

$

679,317

 

 

$

947,839

 

 

 

 

 

Liabilities and Stockholders' Equity

 

 

 

Current liabilities:

 

 

 

Accounts payable and accrued expenses

$

85,333

 

 

$

185,507

 

Accrued compensation and benefits

 

52,297

 

 

 

72,605

 

Operating lease liabilities

 

2,604

 

 

 

4,132

 

Earnout liability

 

6,794

 

 

 

7,500

 

Other current liabilities

 

1,559

 

 

 

1,896

 

Total current liabilities

 

148,587

 

 

 

271,640

 

Debt

 

 

 

 

148,735

 

Operating lease liabilities

 

2,663

 

 

 

4,880

 

Accrued claims

 

34,853

 

 

 

35,881

 

Earnout liability

 

5,000

 

 

 

18,000

 

Uncertain tax positions

 

10,603

 

 

 

7,646

 

Other liabilities

 

4,218

 

 

 

3,838

 

Total liabilities

 

205,924

 

 

 

490,620

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

 

 

Stockholders' equity:

 

 

 

Common stock

 

4

 

 

 

4

 

Additional paid-in capital

 

236,417

 

 

 

292,876

 

Accumulated other comprehensive loss

 

(1,385

)

 

 

(1,387

)

Retained earnings

 

238,357

 

 

 

165,726

 

Total stockholders' equity

 

473,393

 

 

 

457,219

 

Total liabilities and stockholders' equity

$

679,317

 

 

$

947,839

 

Cross Country Healthcare, Inc.

Segment Dataj

(Unaudited, amounts in thousands)

 

 

Three Months Ended

 

Year-over-

Year

 

Sequential

 

December 31,

% of

 

December 31,

% of

 

September 30,

% of

 

% change

 

% change

 

2023

Total

 

2022

Total

 

2023

Total

 

Fav (Unfav)

 

Fav (Unfav)

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from services:

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

367,155

89

%

 

$

591,090

94

%

 

$

396,595

90

%

 

(38

)%

 

(7

)%

Physician Staffing

 

46,880

11

%

 

 

37,128

6

%

 

 

45,696

10

%

 

26

%

 

3

%

 

$

414,035

100

%

 

$

628,218

100

%

 

$

442,291

100

%

 

(34

)%

 

(6

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution income:k

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

33,901

 

 

$

69,941

 

 

$

39,226

 

 

(52

)%

 

(14

)%

Physician Staffing

 

1,947

 

 

 

1,686

 

 

 

2,576

 

 

15

%

 

(24

)%

 

 

35,848

 

 

 

71,627

 

 

 

41,802

 

 

(50

)%

 

(14

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate overheadl

 

17,090

 

 

 

16,803

 

 

 

16,412

 

 

(2

)%

 

(4

)%

Depreciation and amortization

 

4,471

 

 

 

3,162

 

 

 

4,540

 

 

(41

)%

 

2

%

Restructuring costsc

 

863

 

 

 

2

 

 

 

348

 

 

NM

 

 

(148

)%

Impairment chargese

 

 

 

 

 

 

 

186

 

 

%

 

100

%

Other costs

 

 

 

 

196

 

 

 

13

 

 

100

%

 

100

%

Income from operations

$

13,424

 

 

$

51,464

 

 

$

20,303

 

 

(74

)%

 

(34

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended

 

 

 

 

Year-over-

Year

 

 

 

December 31,

% of

 

December 31,

% of

 

 

 

 

% change

 

 

 

2023

Total

 

2022

Total

 

 

 

 

Fav (Unfav)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from services:

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

1,841,428

91

%

 

$

2,700,383

96

%

 

 

 

 

(32

)%

 

 

Physician Staffing

 

178,300

9

%

 

 

106,226

4

%

 

 

 

 

68

%

 

 

 

$

2,019,728

100

%

 

$

2,806,609

100

%

 

 

 

 

(28

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Contribution income:k

 

 

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing

$

196,777

 

 

$

355,447

 

 

 

 

 

(45

)%

 

 

Physician Staffing

 

9,788

 

 

 

5,508

 

 

 

 

 

78

%

 

 

 

 

206,565

 

 

 

360,955

 

 

 

 

 

(43

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate overheadl

 

71,049

 

 

 

67,087

 

 

 

 

 

(6

)%

 

 

Depreciation and amortization

 

18,347

 

 

 

12,576

 

 

 

 

 

(46

)%

 

 

Restructuring costsc

 

2,553

 

 

 

1,861

 

 

 

 

 

(37

)%

 

 

Legal settlement chargesd

 

1,125

 

 

 

 

 

 

 

 

(100

)%

 

 

Impairment chargese

 

719

 

 

 

5,597

 

 

 

 

 

87

%

 

 

Other costs

 

59

 

 

 

726

 

 

 

 

 

92

%

 

 

Income from operations

$

112,713

 

 

$

273,108

 

 

 

 

 

(59

)%

 

 

 

Other costs include acquisition and integration-related costs.

NM - Not meaningful

Cross Country Healthcare, Inc.

Summary Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Net cash provided by operating activities

$

12,074

 

 

$

4,320

 

 

$

70,311

 

 

$

248,498

 

 

$

134,050

 

Net cash used in investing activities

 

(2,875

)

 

 

(37,111

)

 

 

(3,408

)

 

 

(13,775

)

 

 

(43,874

)

Net cash (used in) provided by financing activities

 

(6,416

)

 

 

6,075

 

 

 

(53,273

)

 

 

(221,241

)

 

 

(87,599

)

Effect of exchange rate changes on cash

 

10

 

 

 

 

 

 

(2

)

 

 

8

 

 

 

(9

)

Change in cash and cash equivalents

 

2,793

 

 

 

(26,716

)

 

 

13,628

 

 

 

13,490

 

 

 

2,568

 

Cash and cash equivalents at beginning of period

 

14,301

 

 

 

30,320

 

 

 

673

 

 

 

3,604

 

 

 

1,036

 

Cash and cash equivalents at end of period

$

17,094

 

 

$

3,604

 

 

$

14,301

 

 

$

17,094

 

 

$

3,604

 

Cross Country Healthcare, Inc.

Other Financial Data

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

December 31,

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

2023

 

2022

 

2023

 

2023

 

2022

 

 

 

 

 

 

 

 

 

 

Revenue from services

$

414,035

 

 

$

628,218

 

 

$

442,291

 

 

$

2,019,728

 

 

$

2,806,609

 

Less: Direct operating expenses

 

323,546

 

 

 

489,276

 

 

 

344,932

 

 

 

1,569,318

 

 

 

2,178,923

 

Gross profit

$

90,489

 

 

$

138,942

 

 

$

97,359

 

 

$

450,410

 

 

$

627,686

 

Consolidated gross profit marginm

 

21.9

%

 

 

22.1

%

 

 

22.0

%

 

 

22.3

%

 

 

22.4

%

 

 

 

 

 

 

 

 

 

 

Nurse and Allied Staffing statistical data:

 

 

 

 

 

 

 

 

 

FTEsn

 

9,570

 

 

 

12,447

 

 

 

9,849

 

 

 

10,831

 

 

 

12,980

 

Average Nurse and Allied Staffing revenue per FTE per dayo

$

414

 

 

$

510

 

 

$

434

 

 

$

462

 

 

$

565

 

 

 

 

 

 

 

 

 

 

 

Physician Staffing statistical data:

 

 

 

 

 

 

 

 

 

Days filledp

 

23,578

 

 

 

21,335

 

 

 

23,004

 

 

 

92,504

 

 

 

60,038

 

Revenue per day filledq

$

1,988

 

 

$

1,740

 

 

$

1,986

 

 

$

1,927

 

 

$

1,769

 

(a)

Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss) attributable to common stockholders before interest expense, income tax expense (benefit), depreciation and amortization, acquisition and integration-related (benefits) costs, restructuring (benefits) costs, legal fees and settlements, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on disposal of fixed assets, gain or loss on lease termination, gain or loss on sale of business, other expense (income), net, equity compensation, and system conversion costs. Adjusted EBITDA is not and 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 net income attributable to common stockholders as an indicator of operating performance. Management uses Adjusted EBITDA for planning purposes and as one performance measure in its incentive programs for certain members of its management team. Adjusted EBITDA, as defined, closely matches the operating measure as defined by the Company's credit facilities. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by the Company's consolidated revenue.

(b)

Income taxes for the 2023 periods primarily reflected a decrease in book income.

(c)

Restructuring costs were primarily comprised of employee termination costs, lease-related exit costs, and reorganization costs as part of planned cost savings initiatives. Amounts for the year ended December 31, 2022 included a benefit associated with the early termination of the lease for one of the Company's corporate offices in the second quarter, which was previously restructured.

(d)

Legal fees and settlements included legal settlement charges as presented on the consolidated statements of operations, as well as legal fees pertaining to non-operational legal matters outside the normal course of operations, which are included in selling, general and administrative expenses. For the year ended December 31, 2023, the Company incurred $1.1 million, including legal fees, to settle a wage and hour class action lawsuit.

(e)

Impairment charges of $0.7 million for the year ended December 31, 2023 were comprised of $0.2 million related to right-of-use assets and related property in connection with vacated leases in the third quarter of 2023, and $0.5 million in the second quarter of 2023 related to the write-off of an IT project. Impairment charges for the year ended December 31, 2022 were comprised of $3.7 million related to right-of-use assets and related property in connection with leases vacated during the year, and $1.9 million primarily related to the write-off of an IT project in the third quarter of 2022.

(f)

Loss on early extinguishment of debt for the year ended December 31, 2023 consisted of the write-off of debt issuance costs related to the payoff and termination of the term loan on June 30, 2023. Loss on early extinguishment of debt for the three months and year ended December 31, 2022 consisted of prepayment premiums and the write-off of debt issuance costs related to optional prepayments on the term loan in the second and fourth quarters of 2022.

(g)

The gain on lease termination for the year ended December 31, 2022 was primarily a result of the early termination of the lease for one of the Company's corporate offices, recognized in the second quarter of 2022.

(h)

System conversion costs include ERP system costs related to the upgrading and integrating of our middle and back-office platforms, with certain development costs capitalized and amortized in accordance with the Company's policies, and applicant tracking system costs related to the Company's project to replace its legacy system supporting its travel nurse staffing business.

(i)

Adjusted EPS, a non-GAAP financial measure, is defined as net income (loss) attributable to common stockholders per diluted share before the diluted EPS impact of acquisition and integration-related (benefits) costs, restructuring (benefits) costs, legal fees and settlements, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on sale of business, system conversion costs, and nonrecurring income tax adjustments. Adjusted EPS is not and should not be considered a measure of financial performance under GAAP. Management presents Adjusted EPS because it believes that Adjusted EPS is a useful supplement to its reported EPS as an indicator of operating performance. Management believes it provides a more useful comparison of the Company's underlying business performance from period to period and is more representative of the future earnings capacity of the Company. Quarterly non-GAAP adjustment may vary due to rounding.

(j)

Segment data is provided in accordance with the Segment Reporting Topic of the Financial Accounting Standards Board Accounting Standards Codification.

(k)

Contribution income is defined as income (loss) from operations before depreciation and amortization, acquisition and integration-related (benefits) costs, restructuring (benefits) costs, legal settlement charges, impairment charges, and corporate overhead. Contribution income is a financial measure used by management when assessing segment performance.

(l)

Corporate overhead includes unallocated executive leadership and other centralized corporate functional support costs such as finance, IT, legal, human resources, and marketing, as well as public company expenses and corporate-wide projects (initiatives).

(m)

Gross profit is defined as revenue from services less direct operating expenses. The Company's gross profit excludes allocated depreciation and amortization expense. Gross profit margin is calculated by dividing gross profit by revenue from services.

(n)

FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.

(o)

Average revenue per FTE per day is calculated by dividing the Nurse and Allied Staffing revenue, excluding permanent placement, per FTE by the number of days worked in the respective periods.

(p)

Days filled is calculated by dividing the total hours invoiced during the period, including an estimate for the impact of accrued revenue, by 8 hours.

(q)

Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented.

 

Contacts

Cross Country Healthcare, Inc.

William J. Burns, 561-237-2555

Executive Vice President & Chief Financial Officer

wburns@crosscountry.com

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