AMN Healthcare Services, Inc. Reports Second Quarter Results; Reports Second Quarter Earnings Per Share of $0.27.Business Editors/Health/Medical Writers SAN DIEGO--(BUSINESS WIRE)--July 28, 2003 AMN Amn abbr. airman Healthcare Services, Inc. (NYSE NYSE See: New York Stock Exchange :AHS AHS Assistant House Surgeon. ) today reported revenue and earnings results for the second quarter of 2003. The company reported earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share of $0.27 for the second quarter of 2003, up 4% over the $0.26 per diluted share reported in the second quarter of 2002. The company generated net income of $11.2 million for the second quarter of 2003, compared to $12.5 million reported for the second quarter of 2002, a decline of 10%. Revenue for the second quarter of 2003 was $183.4 million, a decline of 4% from the $191.2 million reported for the same period a year ago. For the six months ended June June: see month. 30, 2003, the company reported revenue of $383.1 million, representing an increase of 5% from the $365.2 million reported for the same period a year ago. For the six months ended June 30, 2003, the company reported earnings per diluted share of $0.56, an increase of 12% over the $0.50 per diluted share reported for the same period a year ago. "Considering the extremely favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. financial results achieved by AMN last year and the recent pressures being experienced by the healthcare staffing industry, we are pleased with our performance for the second quarter. Our ability to exceed our expectations for the quarter was the direct result of focused efforts by our team, the flexibility of our business model and our hospital clients' continued preference for AMN's high quality nurses and value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. . These same elements are why AMN continues to be the leader in the industry," said Steven Ste´ven n. 1. Voice; speech; language. Ye have as merry a steven As any angel hath that is in heaven. - Chaucer. 2. An outcry; a loud call; a clamor. To set steven to make an appointment. C. Francis Francis, French prince, duke of Alençon and Anjou Francis, 1554–84, French prince, duke of Alençon and Anjou; youngest son of King Henry II of France and Catherine de' Medici. , chief executive officer. "A combination of improved sequential One after the other in some consecutive order such as by name or number. gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. , careful operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. management and an effective share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. program resulted in an improvement in diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for our stockholders this quarter compared to the prior year, even in the face of a challenging environment." Earnings before interest (net of investment income), taxes, depreciation, amortization and non-cash stock-based compensation related to the company's initial public offering (adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become , a non-GAAP financial measure) was $20.0 million for the second quarter of 2003, representing a 9% decline from the second quarter of 2002. The adjusted EBITDA margin during the second quarter of 2003 of 10.9% declined slightly from 11.5% during the second quarter of 2002. The company's net income margin of 6.1% during the second quarter of 2003 declined from 6.5% during the second quarter of 2002. The company's effective control of selling, general and administrative expenses during the quarter was offset by higher direct wage and insurance costs for its healthcare professionals. Gross profit for the second quarter of 2003 was $42.0 million, compared to $46.4 million for the second quarter of 2002. The decrease was driven primarily by a decline in the average number of healthcare professionals on assignment, and higher compensation and other direct costs during the quarter. This resulted in a second quarter gross margin of 22.9%, compared to the 24.3% gross margin reported in the second quarter of last year and the 22.4% gross margin reported in the first quarter of 2003. Selling, general and administrative expenses for the second quarter of 2003 improved to 12.0% of revenue, compared to 12.8% of revenue for the second quarter of 2002, reflecting the cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. impact of the company's flexible operating model Operating Model is a term that is used in many contexts. In essence an operating model describes how an organization operates across both business and technology domains. The Operating Model describes what is important for the organization. and infrastructure. The company, which continues to be debt free, with $43.5 million of cash and cash equivalents as of June 30, 2003, generated $25.0 million in net cash provided by operating activities for the second quarter of 2003. Revenue and Earnings Guidance for Third Quarter 2003 The company provides revenue and earnings guidance for the next quarter to be reported to be spoken of; to be mentioned, whether favorably or unfavorably. See also: Report , consistent with its previously announced practice. For the third quarter of 2003, the company expects to generate revenue ranging between $165 million and $171 million, resulting in net income ranging between $7.5 million and $8.6 million, or approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $0.18 and $0.21 per diluted share. The company expects to have approximately 41.3 million average diluted shares outstanding for the third quarter of 2003. "In an effort to expand our leading market position, we are augmenting our investment in client-focused initiatives to solidify so·lid·i·fy v. so·lid·i·fied, so·lid·i·fy·ing, so·lid·i·fies v.tr. 1. To make solid, compact, or hard. 2. To make strong or united. v.intr. AMN's position as the preferred staffing partner with hospitals across the country," added Francis. "We believe that the company's fundamental long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. drivers, primarily the projected escalating nursing shortage and increasing hospital admissions, along with the need for cost-effective variable staffing solutions, will fuel AMN's long-term growth prospects. Our focus on meeting the changing needs of both our healthcare facility clients and our healthcare professionals will strengthen our ability to achieve success in the future." Company Summary AMN Healthcare Services, Inc. is the largest nationwide provider of travel healthcare staffing services. The company recruits nurses and allied health professionals nationally and internationally and places them on temporary assignments, typically for 13 weeks, at acute-care hospitals and healthcare facilities throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . Conference Call on July July: see month. 29, 2003 AMN Healthcare Services, Inc.'s second quarter earnings conference call will be held on Tuesday Tuesday: see week. , July 29 at 7:00 a.m. Pacific Time (10:00 a.m. Eastern Time). A live webcast of the call can be accessed at www.amnhealthcare.com/investors, with a replay available on the Web site until Aug. 29, 2003. An audio replay of the call will also be available by telephone through Aug. 12, 2003 by calling 800-475-6701 in the U.S. or 320-365-3844 internationally, with access code 691391. Additional information regarding non-GAAP financial measures will be available on the company's Web site at www.amnhealthcare.com/investors. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. The company has tried, whenever possible, to identify these forward-looking statements using words such as "anticipates," "believes," "estimates," "projects," "expects," "plans," "intends" and similar expressions. Similarly, statements herein that describe the company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. Accordingly, such forward-looking statements involve known and unknown risks, uncertainties and other factors which could cause the company's actual results, performance or achievements to differ materially from those expressed in, or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by, such statements. These risks and uncertainties may include, but are not limited to: the company's ability to continue to recruit RECRUIT. A newly made soldier. and retain qualified temporary healthcare professionals and ability to attract and retain operational personnel; the company's ability to enter into contracts with hospitals and other healthcare facility clients on terms attractive to the company and to secure orders related to those contracts; the attractiveness to hospitals and healthcare facility clients of the company's services; changes in the timing of hospital and healthcare facility clients' orders for and the company's placement of temporary healthcare professionals; the general level of patient occupancy Gaining or having physical possession of real property subject to, or in the absence of, legal right or title. In a fire insurance policy, for example, the term occupancy at the company's hospital and healthcare facility clients' facilities; the overall level of demand for services offered by temporary healthcare providers; the company's ability to successfully implement its acquisition and integration strategies; the effect of existing or future government regulation of the healthcare industry, and the company's ability to operate in compliance with these regulations; the impact of medical malpractice Improper, unskilled, or negligent treatment of a patient by a physician, dentist, nurse, pharmacist, or other health care professional. and other claims asserted against the company; and the company's ability to carry out its business strategy, including adapting to an increasingly competitive environment. These statements reflect the company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this release are likely to cause these statements to become outdated out·dat·ed adj. Out-of-date; old-fashioned. outdated Adjective old-fashioned or obsolete Adj. 1. with the passage of time. The company does not intend, however, to update the guidance provided today prior to its next earnings release.
AMN Healthcare Services, Inc.
Condensed Consolidated Statements of Operations
(dollars and shares in thousands, except per share and traveler data)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 % Chg 2003 2002 % Chg
----------------------------------------------
Revenue $183,364 $191,235 (4%) $383,129 $365,191 5%
Cost of revenue 141,373 144,849 (2%) 296,387 276,602 7%
-------- --------- -------- ---------
Gross profit 41,991 46,386 (9%) 86,742 88,589 (2%)
-------- --------- -------- ---------
22.9% 24.3% 22.6% 24.3%
Expenses:
Selling, general and
administrative 22,012 24,407 (10%) 44,849 47,132 (5%)
12.0% 12.8% 11.7% 12.9%
Non-cash stock-based
compensation (1) 219 218 0% 437 436 0%
Amortization 96 92 4% 191 174 10%
Depreciation 1,054 737 43% 2,074 1,428 45%
Transaction costs (2) - 139 N/M - 139 N/M
-------- --------- -------- ---------
Total expenses 23,381 25,593 (9%) 47,551 49,309 (4%)
-------- --------- -------- ---------
Income from operations 18,610 20,793 (11%) 39,191 39,280 0%
Interest (income)
expense, net 114 (9) N/M 197 (151) N/M
-------- --------- -------- ---------
Income before income
taxes 18,496 20,802 (11%) 38,994 39,431 (1%)
Income tax expense 7,306 8,321 (12%) 15,405 15,773 (2%)
-------- --------- -------- ---------
Net income $11,190 $12,481 (10%) $23,589 $23,658 0%
======== ========= ======== =========
6.1% 6.5% 6.2% 6.5%
Basic and diluted net
income per common
share:
Basic net income per
common share $0.29 $0.29 0% $0.60 $0.56 7%
======== ========= ======== =========
Diluted net income per
common share $0.27 $0.26 4% $0.56 $0.50 12%
======== ========= ======== =========
Weighted average common
shares outstanding -
basic 38,287 42,596 (10%) 39,056 42,443 (8%)
======== ========= ======== =========
Weighted average common
shares outstanding -
diluted 41,767 47,402 (12%) 42,379 47,198 (10%)
======== ========= ======== =========
Other Financial and
Operating Data:
Average travelers on
assignment 7,355 7,636 (4%) 7,695 7,486 3%
======== ========= ======== =========
Revenue per traveler per
day $273.96 $275.21 0% $275.08 $269.52 2%
======== ========= ======== =========
Gross profit per
traveler per day $62.74 $66.75 (6%) $62.28 $65.38 (5%)
======== ========= ======== =========
Adjusted EBITDA (3) $19,979 $21,979 (9%) $41,893 $41,457 1%
======== ========= ======== =========
10.9% 11.5% 10.9% 11.4%
(1) Non-cash stock-based compensation represents compensation expense related to stock option plans to reflect the difference at the completion of the company's initial public offering between the fair market value and the exercise price of stock options previously issued to the company's officers. (2) Transaction costs Transaction Costs Costs incurred when buying or selling securities. These include brokers' commissions and spreads (the difference between the price the dealer paid for a security and the price they can sell it). represent costs incurred in connection with the acquisition of Healthcare Resource Management Corporation in 2002. (3) Adjusted EBITDA represents net income plus interest (net of investment income), taxes, depreciation, amortization and non-cash stock-based compensation expense. Management presents adjusted EBITDA because it believes that adjusted EBITDA is a useful supplement to net income as an indicator Indicator Anything used to predict future financial or economic trends. Notes: In the context of technical analysis, an indicator is a mathematical calculation based on a securities price and/or volume. The result is used to predict future prices. of operating performance and adjusted EBITDA is an industry-wide financial measure that is useful both to management and investors when evaluating the company's performance. However, adjusted EBITDA is not intended to represent cash flows for the period, nor has it been presented as an alternative to operating or net income as an indicator of operating performance, and it should not be considered in isolation or as a substitute for measures of performance prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in the United States of America UNITED STATES OF AMERICA. The name of this country. The United States, now thirty-one in number, are Alabama, Arkansas, Connecticut, Delaware, Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Mississippi, Missouri, New Hampshire, . As defined, adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.
AMN Healthcare Services, Inc.
Adjusted EBITDA Reconciliation
(dollars in thousands)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
2003 2002 % Chg 2003 2002 % Chg
--------------------------------------------
Net income $11,190 $12,481 (10%) $23,589 $23,658 0%
Adjustments:
Interest (income)
expense, net 114 (9) 197 (151)
Income tax expense 7,306 8,321 15,405 15,773
Depreciation 1,054 737 2,074 1,428
Amortization 96 92 191 174
Transaction costs - 139 - 139
Non-cash stock-based
compensation 219 218 437 436
------- -------- -------- --------
Adjusted EBITDA (1) $19,979 $21,979 (9%) $41,893 $41,457 1%
======= ======== ======== ========
(1) Adjusted EBITDA represents net income plus interest (net of investment income), taxes, depreciation, amortization and non-cash stock-based compensation expense. Management presents adjusted EBITDA because it believes that adjusted EBITDA is a useful supplement to net income as an indicator of operating performance and adjusted EBITDA is an industry-wide financial measure that is useful both to management and investors when evaluating the company's performance. However, adjusted EBITDA is not intended to represent cash flows for the period, nor has it been presented as an alternative to operating or net income as an indicator of operating performance, and it should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States of America. As defined, adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation.
AMN Healthcare Services, Inc.
Condensed Consolidated Balance Sheet
(in thousands)
(unaudited)
June 30, March 31, Dec. 31,
2003 2003 2002
-------- -------- ---------
Assets
Current assets:
Cash and cash equivalents $43,507 $28,633 $40,135
Accounts receivable, net 113,340 130,684 134,456
Other current assets 16,449 17,679 14,062
-------- -------- ---------
Total current assets 173,296 176,996 188,653
Fixed assets, net 14,842 12,117 9,869
Goodwill, net 135,532 135,532 135,532
Deferred income taxes 9,761 11,361 12,111
Intangible and other assets 3,359 3,468 2,609
-------- -------- ---------
Total assets $336,790 $339,474 $348,774
======== ======== =========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $11,376 $12,194 $12,738
Accrued compensation and benefits 33,761 37,168 34,488
Other current liabilities 6,431 11,212 4,122
-------- -------- ---------
Total current liabilities 51,568 60,574 51,348
Other long-term liabilities 1,440 1,554 1,602
-------- -------- ---------
Total liabilities 53,008 62,128 52,950
-------- -------- ---------
Stockholders' equity 283,782 277,346 295,824
-------- -------- ---------
Total liabilities and stockholders'
equity $336,790 $339,474 $348,774
======== ======== =========
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