AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator
in total talent solutions for healthcare organizations across the
United States, today announced its second quarter 2024 financial
results. Financial highlights are as follows:
Dollars in millions, except per share
amounts.
|
Q2 2024 |
% Change Q2 2023 |
YTD June 30, 2024 |
% Change YTD June 30, 2023 |
Revenue |
$740.7 |
(25%) |
$1,561.6 |
(26%) |
Gross profit |
$229.8 |
(30%) |
$487.3 |
(30%) |
Net income |
$16.2 |
(73%) |
$33.6 |
(77%) |
GAAP diluted EPS |
$0.42 |
(73%) |
$0.88 |
(75%) |
Adjusted diluted EPS* |
$0.98 |
(59%) |
$1.95 |
(60%) |
Adjusted EBITDA* |
$94.1 |
(42%) |
$191.8 |
(44%) |
* See “Non-GAAP Measures” below for a discussion
of our use of non-GAAP items and the table entitled “Non-GAAP
Reconciliation Tables” for a reconciliation of non-GAAP items.
Business Highlights
- Second quarter revenue was in line with expectations while
earnings were better than expected, driven by expense management
and beneficial discrete items.
- Rollout of our ShiftWise Flex platform surpassed 50% of our
vendor-neutral clients’ spend on ShiftWise, and we successfully
implemented our first MSP client migrations to Flex.
- Technology and Workforce Solutions produced 41% of operating
income from our three reported segments, led by 18% year-over-year
revenue growth in language services.
- Cash flow from operations was strong at $100 million in the
second quarter, which allowed us to reduce debt by $80 million,
bringing the year-to-date repayment to $115 million.
- Our net leverage ratio at quarter end was 2.6:1.
“In the second quarter, we made important
progress in strengthening AMN’s position with clients in every part
of the market for total talent solutions in healthcare,” said Cary
Grace, President and Chief Executive Officer of AMN Healthcare. “We
have brought in impressive growth in our VMS sales pipeline
spearheaded by ShiftWise Flex and our fill rates for third-party,
direct and MSP orders improved again this quarter. The
diversification of our solutions, with many higher-margin revenue
sources beyond staffing, along with careful expense management,
enabled us to generate profit margins above our expectations.”
Ms. Grace continued, “Our largest clients
continue to reduce their spend on contingent labor, though we see
promising signs of improvement in the travel nurse market and are
heartened to see positive movement in the demand and supply factors
that drive our long-term growth potential.”
Second Quarter 2024 Results
Consolidated revenue for the quarter was $741
million, a 25% decrease from prior year and a 10% decrease from the
prior quarter. Net income was $16 million (2.2% of revenue), or
$0.42 per diluted share, compared with $61 million (6.1% of
revenue), or $1.55 per diluted share, in the second quarter of
2023. Adjusted diluted EPS in the second quarter was $0.98 compared
with $2.38 in the same quarter a year ago.
Revenue for the Nurse and Allied Solutions
segment was $442 million, lower by 36% year over year and down 15%
from the prior quarter. Travel nurse staffing revenue dropped by
42% year over year and 17% sequentially. Allied division revenue
declined 17% year over year and was 11% lower than the prior
quarter.
The Physician and Leadership Solutions segment
reported revenue of $186 million, up 6% year over year and down 1%
sequentially. Locum tenens revenue was $143 million, 17% higher
year over year, with growth coming from the MSDR acquisition, and
2% lower sequentially. Interim leadership revenue was down by 17%
year over year. Our physician and leadership search businesses saw
revenue decline by 27% year over year and 1% quarter over
quarter.
Technology and Workforce Solutions segment
revenue was $112 million, a decrease of 11% year over year and less
than 1% sequentially. Language services revenue was $75 million in
the quarter, 18% higher than the prior year and up 5% sequentially.
Vendor management systems revenue was $28 million, 41% lower year
over year and down 5% from the prior quarter.
Consolidated gross margin was 31.0%, 230 basis
points lower year over year and down 40 basis points sequentially.
Gross margin dropped year over year primarily because of the growth
of lower-margin locum tenens revenue and a lower nurse and allied
staffing margin. That change was offset in part by a revenue mix
shift toward higher-margin segments.
Consolidated SG&A expenses were $149
million, or 20.1% of revenue, compared with $202 million, or 20.4%
of revenue, in the same quarter last year. SG&A was $175
million, or 21.3% of revenue, in the previous quarter. The
year-over-year decrease in SG&A costs was driven primarily by
lower employee compensation amid lower placement volumes. Compared
with the prior quarter, SG&A expenses included lower bonus and
incentive compensation, reduced corporate headcount, a favorable
adjustment to accrued professional liability insurance expense,
seasonally lower payroll tax expense, and prudent expense
management.
Income from operations was $38 million with an
operating margin of 5.1%, compared with $92 million and 9.2%,
respectively, in the same quarter last year. Adjusted EBITDA was
$94 million, a year-over-year decrease of 42%. Adjusted EBITDA
margin was 12.7%, 360 basis points lower than the year-ago
period.
At June 30, 2024, cash and cash equivalents
totaled $48 million. Cash flow from operations was $100 million for
the second quarter, and capital expenditures were $27 million. The
Company ended the quarter with total debt outstanding of $1.195
billion and a net leverage ratio of 2.6 to 1 as calculated under
the terms of our credit agreement.
Third Quarter 2024 Outlook
Metric |
Guidance* |
Consolidated revenue |
$660 - $680 million |
Gross margin |
30.7% - 31.2% |
SG&A as percentage of revenue |
22.0% -22.5% |
Operating margin |
2.1% - 2.9% |
Adjusted EBITDA margin |
10.6% - 11.1% |
*Note: Guidance percentage metrics are
approximate. For a reconciliation of adjusted EBITDA margin, see
the table entitled “Reconciliation of Guidance Operating Margin to
Guidance Adjusted EBITDA Margin” below.
Revenue in the third quarter of 2024 is expected
to be 20-23% lower than the prior year and 8-10% lower
sequentially. Nurse and Allied Solutions segment revenue is
expected to be down 32-34% year over year. Physician and Leadership
Solutions segment revenue is expected to grow 12-14% year over
year. Technology and Workforce Solutions segment revenue is
projected to be 10-12% lower year over year.
Third quarter estimates for certain other
financial items include depreciation of $20 million, depreciation
in cost of revenue of $2 million, non-cash amortization expense of
$22 million, share-based compensation expense of $6 million,
integration and other expenses of $6 million, interest expense of
$15 million, an adjusted tax rate of 27%, and 38.3 million diluted
average shares outstanding.
Conference Call on August 8,
2024
AMN Healthcare Services, Inc. (NYSE: AMN) will
host a conference call to discuss its second quarter 2024 financial
results and third quarter 2024 outlook on Thursday, August 8,
2024 at 5:00 p.m. Eastern Time. A live webcast of the call can be
accessed through AMN Healthcare’s website at
http://ir.amnhealthcare.com. Interested parties may participate
live via telephone by registering at this link. Registrants will
receive confirmation and dial-in details. Following the conclusion
of the call, a replay of the webcast will be available at the
Company’s investor relations website.
About AMN Healthcare
AMN Healthcare is the leader and innovator in
total talent solutions for healthcare organizations across the
nation. The Company provides access to the most comprehensive
network of quality healthcare professionals through its innovative
recruitment strategies and breadth of career opportunities. With
insights and expertise, AMN Healthcare helps providers optimize
their workforce to successfully reduce complexity, increase
efficiency and improve patient outcomes. AMN total talent solutions
include direct staffing, vendor-neutral and managed services
programs, clinical and interim healthcare leaders, temporary
staffing, permanent placement, executive search, vendor management
systems, recruitment process outsourcing, predictive modeling,
language services, revenue cycle solutions, and other services.
Clients include acute-care hospitals, community health centers and
clinics, physician practice groups, retail and urgent care centers,
home health facilities, schools and many other healthcare settings.
AMN Healthcare is committed to fostering and maintaining a diverse
team that reflects the communities we serve. Our commitment to the
inclusion of many different backgrounds, experiences and
perspectives enables our innovation and leadership in the
healthcare services industry.
The Company’s common stock is listed on the New
York Stock Exchange under the symbol “AMN.” For more information
about AMN Healthcare, visit www.amnhealthcare.com, where the
Company posts news releases, investor presentations, webcasts, SEC
filings and other material information. The Company also utilizes
email alerts and Really Simple Syndication (“RSS”) as routine
channels to supplement distribution of this information. To
register for email alerts and RSS, visit
http://ir.amnhealthcare.com.
Non-GAAP Measures
This earnings release and the non-GAAP
reconciliation tables included with the earnings release contain
certain non-GAAP financial information, which the Company provides
as additional information, and not as an alternative, to the
Company’s condensed consolidated financial statements presented in
accordance with GAAP. These non-GAAP financial measures include (1)
adjusted EBITDA, (2) adjusted EBITDA margin, (3) adjusted net
income, and (4) adjusted diluted EPS. The Company provides such
non-GAAP financial measures because management believes that they
are useful to both management and investors as a supplement, and
not as a substitute, when evaluating the Company’s operating
performance. Additionally, management believes that adjusted
EBITDA, adjusted EBITDA margin, and adjusted diluted EPS serve as
industry-wide financial measures. The Company uses adjusted EBITDA
for making financial decisions, allocating resources and for
determining certain incentive compensation objectives. The non-GAAP
measures in this release are not in accordance with, or an
alternative to, GAAP measures and may be different from non-GAAP
measures, or may be calculated differently than other similarly
titled non-GAAP measures, reported by other companies. They should
not be used in isolation to evaluate the Company’s performance. A
reconciliation of non-GAAP measures identified in this release,
along with further detail about the use and limitations of certain
of these non-GAAP measures, may be found below in the table
entitled “Non-GAAP Reconciliation Tables” under the caption
entitled “Reconciliation of Non-GAAP Items” and the footnotes
thereto or on the Company’s website at
https://ir.amnhealthcare.com/financials/quarterly-results.
Additionally, from time to time, additional information regarding
non-GAAP financial measures, including pro forma measures, may be
made available on the Company’s website.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. Forward-looking statements include, among
others, statements concerning future demand and supply for
contingent staffing and other services, wage and bill rates, the
ability of our solutions to meet the needs of our markets and align
with our clients, the competitive environment in nurse staffing,
our ability to manage expenses, our long-term growth opportunities
and sales pipeline, third quarter 2024 financial projections for
consolidated and segment revenue, consolidated gross margin,
operating margin, SG&A as a percent of revenue, adjusted EBITDA
margin, depreciation expense, non-cash amortization expense,
share-based compensation expense, integration and other expenses,
interest expense, adjusted tax rate, and number of diluted shares
outstanding. The Company bases these forward-looking statements on
its current expectations, estimates and projections about future
events and the industry in which it operates using information
currently available to it. Actual results could differ materially
from those discussed in, or implied by, these forward-looking
statements. Forward-looking statements are also identified by words
such as “believe,” "project," “anticipate,” “expect,” “intend,”
“plan,” “will,” “may,” “estimates,” variations of such words and
other similar expressions. In addition, any statements that refer
to expectations, projections or other characterizations of future
events or circumstances are forward-looking statements.
The targets and expectations noted in this
release depend upon, among other factors, (i) the ability of our
clients to increase the efficiency and effectiveness of their
staffing management and recruiting efforts, through predictive
analytics, online recruiting, internal travel agencies and float
pools, telemedicine or otherwise and successfully hire and retain
permanent staff, (ii) the duration and extent to which hospitals
and other healthcare entities adjust their utilization of temporary
nurses and allied healthcare professionals, physicians, healthcare
leaders and other healthcare professionals and workforce technology
applications as a result of the labor market or economic
conditions, (iii) the magnitude and duration of the effects of the
post-COVID-19 pandemic environment or any future pandemic or health
crisis on demand and supply trends, our business, its financial
condition and our results of operations, (iv) our ability to
effectively address client demand by attracting and placing nurses
and other clinicians, (v) our ability to recruit and retain
sufficient quality healthcare professionals at reasonable costs,
(vi) our ability to anticipate and quickly respond to changing
marketplace conditions, such as alternative modes of healthcare
delivery, reimbursement, or client needs and requirements,
including implementing changes that will make our services more
tech-enabled and integrated, (vii) our ability to manage the
pricing impact that the labor market or consolidation of healthcare
delivery organizations may have on our business, (viii) the effects
of economic downturns, inflation or slow recoveries, which could
result in less demand for our services, increased client
initiatives designed to contain costs, including reevaluating their
approach as it pertains to contingent labor and managed services
programs, other solutions and providers, pricing pressures and
negatively impact payments terms and collectability of accounts
receivable, (ix) our ability to develop and evolve our current
technology offerings and capabilities and implement new
infrastructure and technology systems to optimize our operating
results and manage our business effectively, (x) our ability and
the expense to comply with extensive and complex federal and state
laws and regulations related to the conduct of our operations,
costs and payment for services and payment for referrals as well as
laws regarding employment practices, (xi) our ability to consummate
and effectively incorporate acquisitions into our business, (xii)
the negative effects that intermediary organizations may have on
our ability to secure new and profitable contracts, (xiii) the
extent to which the Great Resignation or a future spike in the
COVID-19 pandemic or other pandemic or health crisis may disrupt
our operations due to the unavailability of our employees or
healthcare professionals due to burnout, illness, risk of illness,
quarantines, travel restrictions, mandatory vaccination
requirements, or other factors that limit our existing or potential
workforce and pool of candidates, (xiv) security breaches and
cybersecurity incidents, including ransomware, that could
compromise our information and systems, which could adversely
affect our business operations and reputation and could subject us
to substantial liabilities and (xv) the severity and duration of
the impact the labor market, economic downturn or COVID-19 pandemic
has on the financial condition and cash flow of many hospitals and
healthcare systems such that it impairs their ability to make
payments to us, timely or otherwise, for services rendered.
For a discussion of additional risk factors and
a more complete discussion of some of the cautionary statements
noted above that could cause actual results to differ from those
implied by the forward-looking statements contained in this press
release, please refer to our most recent Annual Report on Form 10-K
for the year ended December 31, 2023. Be advised that developments
subsequent to this press release are likely to cause these
statements to become outdated and the Company is under no
obligation (and expressly disclaims any such obligation) to update
or revise any forward-looking statements whether as a result of new
information, future events, or otherwise.
Contact:Randle ReeceSenior
Director, Investor Relations & Strategy866.861.3229
|
AMN Healthcare Services, Inc.Condensed
Consolidated Statements of Comprehensive Income(in
thousands, except per share
amounts)(unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
$ |
740,685 |
|
|
$ |
991,299 |
|
|
$ |
820,878 |
|
|
$ |
1,561,563 |
|
|
$ |
2,117,522 |
|
Cost of
revenue |
|
510,858 |
|
|
|
661,018 |
|
|
|
563,372 |
|
|
|
1,074,230 |
|
|
|
1,418,395 |
|
Gross
profit |
|
229,827 |
|
|
|
330,281 |
|
|
|
257,506 |
|
|
|
487,333 |
|
|
|
699,127 |
|
Gross
margin |
|
31.0 |
% |
|
|
33.3 |
% |
|
|
31.4 |
% |
|
|
31.2 |
% |
|
|
33.0 |
% |
Operating expenses: |
|
|
|
|
|
|
|
|
|
Selling,
general and administrative (SG&A) |
|
149,044 |
|
|
|
201,771 |
|
|
|
174,842 |
|
|
|
323,886 |
|
|
|
407,370 |
|
SG&A as a % of revenue |
|
20.1 |
% |
|
|
20.4 |
% |
|
|
21.3 |
% |
|
|
20.7 |
% |
|
|
19.2 |
% |
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization (exclusive of depreciation included
in cost of revenue) |
|
43,101 |
|
|
|
36,847 |
|
|
|
42,719 |
|
|
|
85,820 |
|
|
|
74,424 |
|
Total
operating expenses |
|
192,145 |
|
|
|
238,618 |
|
|
|
217,561 |
|
|
|
409,706 |
|
|
|
481,794 |
|
Income
from operations |
|
37,682 |
|
|
|
91,663 |
|
|
|
39,945 |
|
|
|
77,627 |
|
|
|
217,333 |
|
Operating margin (1) |
|
5.1 |
% |
|
|
9.2 |
% |
|
|
4.9 |
% |
|
|
5.0 |
% |
|
|
10.3 |
% |
|
|
|
|
|
|
|
|
|
|
Interest
expense, net, and other |
|
15,715 |
|
|
|
12,175 |
|
|
|
16,628 |
|
|
|
32,343 |
|
|
|
22,434 |
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes |
|
21,967 |
|
|
|
79,488 |
|
|
|
23,317 |
|
|
|
45,284 |
|
|
|
194,899 |
|
|
|
|
|
|
|
|
|
|
|
Income
tax expense |
|
5,730 |
|
|
|
18,582 |
|
|
|
5,989 |
|
|
|
11,719 |
|
|
|
49,883 |
|
Net
income |
$ |
16,237 |
|
|
$ |
60,906 |
|
|
$ |
17,328 |
|
|
$ |
33,565 |
|
|
$ |
145,016 |
|
Net
income as a % of revenue |
|
2.2 |
% |
|
|
6.1 |
% |
|
|
2.1 |
% |
|
|
2.1 |
% |
|
|
6.8 |
% |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
|
Unrealized gains on available-for-sale securities, net, and
other |
|
182 |
|
|
|
50 |
|
|
|
84 |
|
|
|
266 |
|
|
|
196 |
|
Other
comprehensive income |
|
182 |
|
|
|
50 |
|
|
|
84 |
|
|
|
266 |
|
|
|
196 |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income |
$ |
16,419 |
|
|
$ |
60,956 |
|
|
$ |
17,412 |
|
|
$ |
33,831 |
|
|
$ |
145,212 |
|
|
|
|
|
|
|
|
|
|
|
Net income per common share: |
|
|
|
|
|
|
|
|
|
Basic |
$ |
0.43 |
|
|
$ |
1.56 |
|
|
$ |
0.45 |
|
|
$ |
0.88 |
|
|
$ |
3.60 |
|
Diluted |
$ |
0.42 |
|
|
$ |
1.55 |
|
|
$ |
0.45 |
|
|
$ |
0.88 |
|
|
$ |
3.58 |
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
38,173 |
|
|
|
39,151 |
|
|
|
38,114 |
|
|
|
38,144 |
|
|
|
40,258 |
|
Diluted |
|
38,234 |
|
|
|
39,341 |
|
|
|
38,197 |
|
|
|
38,218 |
|
|
|
40,454 |
|
|
|
|
|
|
|
|
|
|
|
AMN Healthcare Services, Inc.Condensed
Consolidated Balance Sheets(dollars in
thousands)(unaudited) |
|
|
June 30, 2024 |
|
December 31, 2023 |
|
June 30, 2023 |
Assets |
|
|
|
|
|
Current
assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
48,038 |
|
$ |
32,935 |
|
$ |
7,013 |
Accounts receivable, net |
|
508,913 |
|
|
623,488 |
|
|
579,926 |
Accounts receivable, subcontractor |
|
81,296 |
|
|
117,703 |
|
|
168,231 |
Prepaid and other current assets |
|
66,510 |
|
|
67,559 |
|
|
52,066 |
Total current assets |
|
704,757 |
|
|
841,685 |
|
|
807,236 |
Restricted cash, cash equivalents and investments |
|
71,749 |
|
|
68,845 |
|
|
71,564 |
Fixed
assets, net |
|
197,059 |
|
|
191,385 |
|
|
177,417 |
Other
assets |
|
256,951 |
|
|
236,796 |
|
|
219,781 |
Goodwill |
|
1,116,307 |
|
|
1,111,549 |
|
|
935,779 |
Intangible assets, net |
|
424,504 |
|
|
474,134 |
|
|
432,366 |
Total assets |
$ |
2,771,327 |
|
$ |
2,924,394 |
|
$ |
2,644,143 |
|
|
|
|
|
|
Liabilities and stockholders’ equity |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable and accrued expenses |
$ |
283,176 |
|
$ |
343,847 |
|
$ |
327,538 |
Accrued compensation and benefits |
|
268,354 |
|
|
278,536 |
|
|
261,629 |
Other current liabilities |
|
22,360 |
|
|
33,738 |
|
|
84,548 |
Total current liabilities |
|
573,890 |
|
|
656,121 |
|
|
673,715 |
Revolving credit facility |
|
345,000 |
|
|
460,000 |
|
|
190,000 |
Notes
payable, net |
|
845,280 |
|
|
844,688 |
|
|
844,097 |
Deferred
income taxes, net |
|
20,551 |
|
|
23,350 |
|
|
6,986 |
Other
long-term liabilities |
|
109,747 |
|
|
108,979 |
|
|
163,048 |
Total liabilities |
|
1,894,468 |
|
|
2,093,138 |
|
|
1,877,846 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity: |
|
876,859 |
|
|
831,256 |
|
|
766,297 |
|
|
|
|
|
|
Total
liabilities and stockholders’ equity |
$ |
2,771,327 |
|
$ |
2,924,394 |
|
$ |
2,644,143 |
|
|
|
|
|
|
AMN Healthcare Services, Inc.Summary
Condensed Consolidated Statements of Cash
Flows(dollars in
thousands)(unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
|
Net cash
provided by operating activities |
$ |
99,515 |
|
|
$ |
197,667 |
|
|
$ |
81,386 |
|
|
$ |
180,901 |
|
|
$ |
241,101 |
|
Net cash
used in investing activities |
|
(22,332 |
) |
|
|
(22,428 |
) |
|
|
(21,399 |
) |
|
|
(43,731 |
) |
|
|
(54,859 |
) |
Net cash
used in financing activities |
|
(80,108 |
) |
|
|
(203,287 |
) |
|
|
(38,973 |
) |
|
|
(119,081 |
) |
|
|
(247,744 |
) |
Net
increase (decrease) in cash, cash equivalents and restricted
cash |
|
(2,925 |
) |
|
|
(28,048 |
) |
|
|
21,014 |
|
|
|
18,089 |
|
|
|
(61,502 |
) |
Cash,
cash equivalents and restricted cash at beginning of period |
|
129,287 |
|
|
|
104,418 |
|
|
|
108,273 |
|
|
|
108,273 |
|
|
|
137,872 |
|
Cash,
cash equivalents and restricted cash at end of period |
$ |
126,362 |
|
|
$ |
76,370 |
|
|
$ |
129,287 |
|
|
$ |
126,362 |
|
|
$ |
76,370 |
|
|
AMN Healthcare Services, Inc.Non-GAAP
Reconciliation Tables(dollars in thousands, except
per share data)(unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
Reconciliation of Non-GAAP Items: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income |
$ |
16,237 |
|
|
$ |
60,906 |
|
|
$ |
17,328 |
|
|
$ |
33,565 |
|
|
$ |
145,016 |
|
Income
tax expense |
|
5,730 |
|
|
|
18,582 |
|
|
|
5,989 |
|
|
|
11,719 |
|
|
|
49,883 |
|
Income
before income taxes |
|
21,967 |
|
|
|
79,488 |
|
|
|
23,317 |
|
|
|
45,284 |
|
|
|
194,899 |
|
Interest
expense, net, and other |
|
15,715 |
|
|
|
12,175 |
|
|
|
16,628 |
|
|
|
32,343 |
|
|
|
22,434 |
|
Income from operations |
|
37,682 |
|
|
|
91,663 |
|
|
|
39,945 |
|
|
|
77,627 |
|
|
|
217,333 |
|
Depreciation and amortization |
|
43,101 |
|
|
|
36,847 |
|
|
|
42,719 |
|
|
|
85,820 |
|
|
|
74,424 |
|
Depreciation (included in cost of revenue) (2) |
|
1,637 |
|
|
|
1,387 |
|
|
|
1,798 |
|
|
|
3,435 |
|
|
|
2,644 |
|
Share-based compensation |
|
6,357 |
|
|
|
4,818 |
|
|
|
7,739 |
|
|
|
14,096 |
|
|
|
15,136 |
|
Acquisition, integration, and
other costs (3) |
|
5,310 |
|
|
|
6,103 |
|
|
|
5,465 |
|
|
|
10,775 |
|
|
|
10,845 |
|
Legal
settlement accrual changes (4) |
|
— |
|
|
|
21,000 |
|
|
|
— |
|
|
|
— |
|
|
|
21,000 |
|
Adjusted
EBITDA (5) |
$ |
94,087 |
|
|
$ |
161,818 |
|
|
$ |
97,666 |
|
|
$ |
191,753 |
|
|
$ |
341,382 |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
(6) |
|
12.7 |
% |
|
|
16.3 |
% |
|
|
11.9 |
% |
|
|
12.3 |
% |
|
|
16.1 |
% |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
16,237 |
|
|
$ |
60,906 |
|
|
$ |
17,328 |
|
|
$ |
33,565 |
|
|
$ |
145,016 |
|
Adjustments: |
|
|
|
|
|
|
|
|
|
Amortization of intangible assets |
|
24,744 |
|
|
|
22,120 |
|
|
|
24,886 |
|
|
|
49,630 |
|
|
|
43,777 |
|
Acquisition, integration, and other costs (3) |
|
5,310 |
|
|
|
6,103 |
|
|
|
5,465 |
|
|
|
10,775 |
|
|
|
10,845 |
|
Legal settlement accrual changes (4) |
|
— |
|
|
|
21,000 |
|
|
|
— |
|
|
|
— |
|
|
|
21,000 |
|
Cumulative effect of change in accounting principle (7) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,974 |
|
Tax effect on above adjustments |
|
(7,814 |
) |
|
|
(12,798 |
) |
|
|
(7,891 |
) |
|
|
(15,705 |
) |
|
|
(20,435 |
) |
Tax effect of COLI fair value changes (8) |
|
(910 |
) |
|
|
(1,744 |
) |
|
|
(2,734 |
) |
|
|
(3,644 |
) |
|
|
(3,551 |
) |
Tax deficiencies (benefits) related to equity awards and ESPP
(9) |
|
(235 |
) |
|
|
(1,798 |
) |
|
|
174 |
|
|
|
(61 |
) |
|
|
(2,480 |
) |
Adjusted
net income (10) |
$ |
37,332 |
|
|
$ |
93,789 |
|
|
$ |
37,228 |
|
|
$ |
74,560 |
|
|
$ |
197,146 |
|
|
|
|
|
|
|
|
|
|
|
GAAP
diluted net income per share (EPS) |
$ |
0.42 |
|
|
$ |
1.55 |
|
|
$ |
0.45 |
|
|
$ |
0.88 |
|
|
$ |
3.58 |
|
Adjustments |
|
0.56 |
|
|
|
0.83 |
|
|
|
0.52 |
|
|
|
1.07 |
|
|
|
1.29 |
|
Adjusted
diluted EPS (11) |
$ |
0.98 |
|
|
$ |
2.38 |
|
|
$ |
0.97 |
|
|
$ |
1.95 |
|
|
$ |
4.87 |
|
|
AMN Healthcare Services, Inc.Supplemental
Segment Financial and Operating Data(dollars in
thousands, except operating
data)(unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
|
|
|
|
|
|
|
|
Nurse and allied solutions |
$ |
442,399 |
|
|
$ |
689,015 |
|
|
$ |
519,297 |
|
|
$ |
961,696 |
|
|
$ |
1,513,495 |
|
Physician and leadership solutions |
|
186,065 |
|
|
|
176,229 |
|
|
|
188,797 |
|
|
|
374,862 |
|
|
|
341,986 |
|
Technology and workforce solutions |
|
112,221 |
|
|
|
126,055 |
|
|
|
112,784 |
|
|
|
225,005 |
|
|
|
262,041 |
|
|
$ |
740,685 |
|
|
$ |
991,299 |
|
|
$ |
820,878 |
|
|
$ |
1,561,563 |
|
|
$ |
2,117,522 |
|
|
|
|
|
|
|
|
|
|
|
Segment
operating income (12) |
|
|
|
|
|
|
|
|
|
Nurse and allied solutions |
$ |
46,207 |
|
|
$ |
102,993 |
|
|
$ |
53,342 |
|
|
$ |
99,549 |
|
|
$ |
216,438 |
|
Physician and leadership solutions |
|
21,661 |
|
|
|
26,456 |
|
|
|
22,222 |
|
|
|
43,883 |
|
|
|
51,556 |
|
Technology and workforce solutions |
|
47,259 |
|
|
|
55,623 |
|
|
|
44,270 |
|
|
|
91,529 |
|
|
|
122,633 |
|
|
|
115,127 |
|
|
|
185,072 |
|
|
|
119,834 |
|
|
|
234,961 |
|
|
|
390,627 |
|
Unallocated corporate overhead (13) |
|
21,040 |
|
|
|
23,254 |
|
|
|
22,168 |
|
|
|
43,208 |
|
|
|
49,245 |
|
Adjusted
EBITDA (5) |
$ |
94,087 |
|
|
$ |
161,818 |
|
|
$ |
97,666 |
|
|
$ |
191,753 |
|
|
$ |
341,382 |
|
|
|
|
|
|
|
|
|
|
|
Gross
Margin |
|
|
|
|
|
|
|
|
|
Nurse and allied solutions |
|
23.8 |
% |
|
|
26.7 |
% |
|
|
25.1 |
% |
|
|
24.5 |
% |
|
|
26.3 |
% |
Physician and leadership solutions |
|
30.5 |
% |
|
|
35.1 |
% |
|
|
31.6 |
% |
|
|
31.0 |
% |
|
|
35.2 |
% |
Technology and workforce solutions |
|
60.2 |
% |
|
|
66.7 |
% |
|
|
59.9 |
% |
|
|
60.0 |
% |
|
|
69.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Data: |
|
|
|
|
|
|
|
|
|
Nurse
and allied solutions |
|
|
|
|
|
|
|
|
|
Average travelers on assignment (14) |
|
10,302 |
|
|
|
13,597 |
|
|
|
11,524 |
|
|
|
10,913 |
|
|
|
14,359 |
|
|
|
|
|
|
|
|
|
|
|
Physician and leadership solutions |
|
|
|
|
|
|
|
|
|
Days filled (15) |
|
56,244 |
|
|
|
49,976 |
|
|
|
56,849 |
|
|
|
113,093 |
|
|
|
96,876 |
|
Revenue per day filled (16) |
$ |
2,538 |
|
|
$ |
2,439 |
|
|
$ |
2,555 |
|
|
$ |
2,546 |
|
|
$ |
2,360 |
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, |
|
As of December 31, |
|
2024 |
|
2023 |
|
2023 |
Leverage
ratio (17) |
2.6 |
|
1.5 |
|
2.2 |
|
|
|
|
|
|
AMN Healthcare Services, Inc.Additional
Supplemental Non-GAAP DisclosureReconciliation of
Guidance Operating Margin to GuidanceAdjusted
EBITDA Margin(unaudited) |
|
|
Three Months Ended |
|
September 30, 2024 |
|
Low(18) |
|
High(18) |
|
|
|
|
Operating margin |
2.1 |
% |
|
2.9 |
% |
Depreciation and amortization (total) |
6.6 |
% |
|
6.4 |
% |
EBITDA margin |
8.7 |
% |
|
9.3 |
% |
Share-based compensation |
0.9 |
% |
|
0.9 |
% |
Acquisition, integration, and other costs |
0.9 |
% |
|
0.9 |
% |
Adjusted EBITDA margin |
10.6 |
% |
|
11.1 |
% |
(1) |
Operating margin represents income from operations divided by
revenue. |
(2) |
A portion of depreciation expense for AMN Language Services is
included in cost of revenue. We exclude the impact of depreciation
included in cost of revenue from the calculation of adjusted
EBITDA. |
(3) |
Acquisition, integration, and other costs include acquisition and
integration costs, net changes in the fair value of contingent
consideration liabilities for recently acquired companies, certain
legal expenses, restructuring expenses and other costs associated
with exit or disposal activities, and certain nonrecurring
expenses, which we exclude from the calculation of adjusted EBITDA,
adjusted net income, and adjusted diluted EPS because we believe
that these expenses are not indicative of the Company’s operating
performance. For the three and six months ended June 30, 2024,
acquisition and integration costs were approximately $0.7 million
and $1.5 million, respectively, expenses related to the
closures of certain office leases were approximately $0.6 million
and $1.1 million, respectively, certain legal expenses of
approximately $2.1 million and $3.3 million,
respectively, restructuring expenses and other costs associated
with exit or disposal activities were approximately
$2.0 million and $3.0 million, respectively, and other
nonrecurring expenses were approximately $2.3 million and
$4.3 million, respectively. Additionally, the aforementioned
costs for the three and six months ended June 30, 2024 were
partially offset by an immaterial out-of-period adjustment of
$2.4 million related to acquisition-related costs incurred in
connection with the acquisition of MSDR. For the three and six
months ended June 30, 2023, acquisition and integration costs were
approximately $1.0 million and $2.0 million,
respectively, expenses related to the closures of certain office
leases were approximately $0.9 million and $2.0 million,
respectively, increases in contingent consideration liabilities for
recently acquired companies were approximately $2.4 million,
restructuring expenses and other costs associated with exit or
disposal activities were approximately $1.7 million and
$3.5 million, respectively, and other nonrecurring expenses
were approximately $0.1 million and $(0.1) million,
respectively. Additionally, acquisition, integration, and other
costs for the six months ended June 30, 2023 included certain legal
expenses of approximately $1.0 million. |
(4) |
During the three months ended June 30, 2023, the Company recorded
an increase to its legal accrual for a wage and hour claim in
connection with reaching an agreement to settle the matter in its
entirety. Since the settlement is largely unrelated to the
Company’s operating performance, we excluded its impact in the
calculations of adjusted EBITDA, adjusted net income, and adjusted
diluted EPS. |
(5) |
Adjusted EBITDA represents net income plus interest expense (net of
interest income) and other, income tax expense (benefit),
depreciation and amortization, depreciation (included in cost of
revenue), acquisition, integration, and other costs, restructuring
expenses, certain legal expenses, and share-based compensation.
Management believes that adjusted EBITDA provides an effective
measure of the Company’s results, as it excludes certain items that
management believes are not indicative of the Company’s operating
performance. Adjusted EBITDA is not intended to represent cash
flows for the period, nor has it been presented as an alternative
to income from operations or net income as an indicator of
operating performance. Although management believes that some of
the items excluded from adjusted EBITDA are not indicative of the
Company’s operating performance, these items do impact the
statement of comprehensive income, and management therefore
utilizes adjusted EBITDA as an operating performance measure in
conjunction with GAAP measures such as net income. |
(6) |
Adjusted EBITDA margin represents adjusted EBITDA divided by
revenue. |
(7) |
As a result of a change in accounting principle on January 1, 2023
related to forfeitures of share-based awards, the Company
recognized the cumulative effect of the change in share-based
compensation expense during the six months ended June 30, 2023. The
cumulative effect of the change in accounting principle is
immaterial to prior periods and, therefore, was recognized in the
period of the change. Since the cumulative effect is unrelated to
the Company’s operating performance for the six months ended June
30, 2023, we excluded its impact in the calculation of adjusted net
income and adjusted diluted EPS. |
(8) |
The Company records net tax expense (benefit) related to the income
tax treatment of the fair value changes in the cash surrender value
of its company owned life insurance. Since this change in fair
value is unrelated to the Company’s operating performance, we
excluded the impact on adjusted net income and adjusted diluted
EPS. |
(9) |
The consolidated effective tax rate is affected by the recording of
tax benefits and tax deficiencies relating to equity awards vested
during the period and tax benefits recognized for disqualifying
dispositions related to our employee stock purchase plan (“ESPP”).
The magnitude of the impact of tax benefits and tax deficiencies
generated in the future related to equity awards and ESPP is
dependent upon the Company’s future grants of share-based
compensation, the Company’s future stock price on the date equity
awards vest in relation to the fair value of the awards on the
grant date, the Company’s future stock price on either the ESPP’s
offering date or purchase date, whichever is lower, and the length
of time the shares issued under the ESPP are held by employees.
Since these tax benefits and tax deficiencies related to equity
awards and ESPP are largely unrelated to our income before taxes
and are unrepresentative of our normal effective tax rate, we
excluded their impact in the calculation of adjusted net income and
adjusted diluted EPS. |
(10) |
Adjusted net income represents GAAP net income excluding the impact
of the (A) amortization of intangible assets, (B) acquisition,
integration, and other costs, (C) certain legal expenses, (D)
changes in fair value of equity investments and instruments, (E)
deferred financing related costs, (F) cumulative effect of change
in accounting principle, (G) tax effect, if any, of the foregoing
adjustments, (H) excess tax benefits and tax deficiencies relating
to equity awards vested and ESPP, (I) net tax expense (benefit)
related to the income tax treatment of fair value changes in the
cash surrender value of its company owned life insurance, and (J)
restructuring tax benefits. Management included this non-GAAP
measure to provide investors and prospective investors with an
alternative method for assessing the Company’s operating results in
a manner that is focused on its operating performance and to
provide a more consistent basis for comparison between periods.
However, investors and prospective investors should note that this
non-GAAP measure involves judgment by management (in particular,
judgment as to what is classified as a special item to be excluded
in the calculation of adjusted net income). Although management
believes the items in the calculation of adjusted net income are
not indicative of the Company’s operating performance, these items
do impact the statement of comprehensive income, and management
therefore utilizes adjusted net income as an operating performance
measure in conjunction with GAAP measures such as GAAP net
income. |
(11) |
Adjusted diluted EPS represents adjusted net income divided by
diluted weighted average common shares outstanding. Management
included this non-GAAP measure to provide investors and prospective
investors with an alternative method for assessing the Company’s
operating results in a manner that is focused on its operating
performance and to provide a more consistent basis for comparison
between periods. However, investors and prospective investors
should note that this non-GAAP measure involves judgment by
management (in particular, judgment as to what is classified as a
special item to be excluded in the calculation of adjusted net
income). Although management believes the items in the calculation
of adjusted net income are not indicative of the Company’s
operating performance, these items do impact the statement of
comprehensive income, and management therefore utilizes adjusted
diluted EPS as an operating performance measure in conjunction with
GAAP measures such as GAAP diluted EPS. |
(12) |
Segment operating income represents net income plus interest
expense (net of interest income) and other, income tax expense
(benefit), depreciation and amortization, depreciation (included in
cost of revenue), unallocated corporate overhead, acquisition,
integration, and other costs, legal settlement accrual changes, and
share-based compensation. |
(13) |
Unallocated corporate overhead (as presented in the tables above)
consists of unallocated corporate overhead (as reflected in our
quarterly and annual financial statements filed with the SEC) less
acquisition, integration, and other costs and legal settlement
accrual changes. |
(14) |
Average travelers on assignment represents the average number of
nurse and allied healthcare professionals on assignment during the
period presented. |
(15) |
Days filled is calculated by dividing the locum tenens hours filled
during the period by eight hours. |
(16) |
Revenue per day filled represents revenue of the Company’s locum
tenens business divided by days filled for the period
presented. |
(17) |
Leverage ratio represents the ratio of the consolidated funded
indebtedness (as calculated per the Company’s credit agreement) at
the end of the subject period to the consolidated adjusted EBITDA
(as calculated per the Company’s credit agreement) for the 12-month
period ended at the end of the subject period. |
(18) |
Guidance percentage metrics are approximate. |
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