8-K: Cross Country Healthcare Announces First Quarter 2025 Financial Results

Cross Country Healthcare reports a decrease in revenue and adjusted EBITDA for Q1 2025, while highlighting growth in Homecare and Physician Staffing.

Summary

• Cross Country Healthcare announced its financial results for the first quarter ended March 31, 2025.
• The company reported a revenue of $293.4 million, a 23% decrease year-over-year and a 5% decrease sequentially.
• Gross profit margin was 20.0%, down 40 basis points year-over-year and flat sequentially.
• The net loss attributable to common stockholders was $0.5 million, compared to a net income of $2.7 million in the prior year.
• Diluted EPS was a net loss of $0.02, compared to net income of $0.08 in the prior year.
• Adjusted EBITDA was $8.6 million, or 2.9% of revenue, compared to $15.3 million, or 4.0% of revenue, in the prior year.
• Adjusted EPS was $0.06, compared to $0.19 in the prior year.
• Homecare Staffing experienced double-digit sequential and year-over-year revenue growth.
• Physician Staffing experienced year-over-year revenue growth.
• Cross Country Education experienced double-digit sequential revenue growth.
• The company had $81 million of cash on hand and no debt as of March 31, 2025.
• The company will not host an earnings conference call due to the pending merger with Aya Healthcare.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While some segments show growth, overall financial results are down year-over-year. The pending merger adds uncertainty.

Positives

• Homecare Staffing experienced double-digit sequential and year-over-year revenue growth.
• Physician Staffing experienced year-over-year revenue growth.
• Cross Country Education experienced double-digit sequential revenue growth.
• The company maintains a strong balance sheet with $81 million in cash and no debt.
• The company experienced a 15-day year-over-year improvement in days sales outstanding.

Negatives

• Consolidated revenue decreased by 23% year-over-year to $293.4 million.
• Adjusted EBITDA decreased by 44% year-over-year to $8.6 million.
• Net loss attributable to common stockholders was $0.5 million, compared to a net income of $2.7 million in the prior year.
• Nurse and Allied Staffing revenue decreased by 27% year-over-year to $242.3 million.

Risks

• The company cites risks and uncertainties related to the pending merger with Aya Healthcare, including regulatory approvals and potential litigation.
• Worldwide economic or political changes could affect the markets the company serves.
• Global pandemics, epidemics, or other public health crises could impact the company.
• Changes in marketplace conditions, such as alternative modes of healthcare delivery, could affect the company.
• Disruptions in the global credit and financial markets could pose risks.

Future Outlook

The company will not provide forward-looking guidance due to the pending acquisition by Aya Healthcare.

Management Comments

• Our first quarter results reflect solid execution with both Homecare and Physician Staffing business reporting solid year over year growth, said John A. Martins, President and Chief Executive Officer of Cross Country Healthcare.
• As the market for core nurse and allied continues to stabilize, we remain focused on driving productivity across our business, leveraging our investments in AI automation as well as our cost-effective center of excellence in India to fuel efficiency and improved profitability.
• Looking ahead, we continue working with Aya Healthcare and the Federal Trade Commission towards the successful consummation of the merger transaction in the second half of this year.

Industry Context

The healthcare staffing industry is facing fluctuating demand and pricing pressures, impacting revenue for companies like Cross Country Healthcare, while certain segments like homecare and physician staffing are showing resilience.

Comparison to Industry Standards

• Given the lack of specific competitor data in the release, a detailed comparison to industry standards is limited.
• However, the decline in Nurse and Allied Staffing revenue suggests potential underperformance compared to competitors who may have better navigated the market fluctuations.
• The growth in Physician Staffing could indicate a competitive advantage in that specific segment.

Stakeholder Impact

• Shareholders may be concerned about the decrease in revenue and profitability.
• Employees may experience uncertainty due to the pending merger.
• Customers may be affected by changes resulting from the merger.

Next Steps

• The company will continue working with Aya Healthcare and the Federal Trade Commission towards the successful consummation of the merger transaction in the second half of this year.

Key Dates

Keywords

healthcare staffing, financial results, Cross Country Healthcare, revenue, EBITDA, merger, Aya Healthcare, staffing, homecare, physician staffing