CCRN
Cross Country Healthcare INC
NASDAQ
8-K: Cross Country Healthcare Reports Mixed Q3 Results Amidst Market Stabilization
Sentiment:
Quarterly Report
6 November 2024 4:28 PM
Cross Country Healthcare announced its third quarter 2024 financial results, showing a mix of revenue declines and margin pressures alongside growth in specific segments and a strong balance sheet.
Worse than expected
The company's revenue, net income, and adjusted EBITDA all decreased significantly year-over-year, indicating worse than expected results.
The company's gross profit margin also declined, further contributing to the worse than expected results.
Summary
- Cross Country Healthcare's third quarter 2024 revenue was $315.1 million, a 29% decrease year-over-year and a 7% decrease sequentially.
- The company's gross profit margin was 20.4%, down 160 basis points year-over-year and 40 basis points sequentially.
- Net income attributable to common stockholders was $2.6 million, compared to $12.8 million in the prior year and a net loss of $16.1 million in the prior quarter.
- Diluted earnings per share (EPS) was $0.08, compared to $0.36 in the prior year and a net loss of $0.47 in the prior quarter.
- Adjusted EBITDA was $10.3 million, or 3.3% of revenue, compared to $27.2 million, or 6.2% of revenue, in the prior year.
- Adjusted EPS was $0.12, compared to $0.39 in the prior year.
- For the nine months ended September 30, 2024, consolidated revenue was $1,034.1 million, a decrease of 36% year-over-year.
- The company repurchased over 800,000 shares of common stock for $11.9 million during the quarter.
- As of September 30, 2024, the company had $64 million in cash and no debt.
- The company's fourth quarter 2024 revenue is projected to be between $300 million and $310 million, with adjusted EBITDA between $11 million and $13 million.
Sentiment
Score: 4
Explanation: The sentiment is moderately negative due to significant year-over-year declines in revenue, profit, and EBITDA, despite some positive aspects like growth in specific segments and a strong balance sheet. The forward guidance also indicates continued challenges.
Positives
- The company's revenue, adjusted EBITDA, and adjusted EPS were within guidance ranges.
- Physician Staffing and Homecare Staffing showed growth in revenue.
- A three-year contract renewal was secured with the largest managed service program.
- The company has a strong balance sheet with $64 million in cash and no debt.
- The company repurchased over 800,000 shares of common stock.
- There was a 4 day year-over-year improvement in days' sales outstanding.
Negatives
- Consolidated revenue decreased by 29% year-over-year and 7% sequentially.
- Gross profit margin decreased by 160 basis points year-over-year and 40 basis points sequentially.
- Net income attributable to common stockholders decreased significantly compared to the prior year.
- Adjusted EBITDA decreased by 62% year-over-year.
- Cash flows provided by operations decreased by 89% year-over-year.
- Nurse and Allied Staffing revenue decreased by 33% year-over-year and 9% sequentially.
Risks
- The company faces challenges in the overall macroeconomic environment, including increased inflation and interest rates.
- There are risks associated with attracting and retaining qualified healthcare personnel.
- The company is exposed to cyber security risks and cyber incidents.
- Government regulations and legislative initiatives could impact the business.
- The company's ability to successfully implement acquisition and development strategies is a risk.
- Competition in the markets they serve could impact results.
- The company's fourth quarter guidance indicates continued revenue and profit pressures.
Future Outlook
The company expects fourth quarter 2024 revenue to be between $300 million and $310 million, with adjusted EBITDA between $11 million and $13 million and adjusted EPS between $0.10 and $0.14.
Management Comments
- John A. Martins, President and Chief Executive Officer, stated that the third quarter results reflect continued stabilization across the core business and ongoing momentum in Homecare, Physician, and Education Staffing businesses.
- He also noted that while margins remain under pressure, he is encouraged to see demand for services continue to rise amidst bill rate stability.
- Management believes the company is well positioned to capitalize on the market as it normalizes, by leveraging its strong balance sheet to make strategic investments that will deliver long-term profitability.
Industry Context
The healthcare staffing industry is experiencing a period of normalization after a period of high demand. Cross Country Healthcare's results reflect this trend, with revenue declines in some areas but growth in others. The company's focus on strategic investments and leveraging its balance sheet suggests a proactive approach to navigating the changing market conditions.
Comparison to Industry Standards
- Cross Country Healthcare's revenue decline of 29% year-over-year in Q3 is significant, indicating a more pronounced downturn compared to some competitors who have reported smaller declines or even growth in certain segments.
- For example, AMN Healthcare, a major competitor, has also seen revenue declines but has maintained a higher gross profit margin, suggesting Cross Country may be facing more intense pricing pressures.
- The company's adjusted EBITDA margin of 3.3% is lower than industry averages, indicating potential operational inefficiencies or higher costs compared to peers like Medical Solutions or Aya Healthcare.
- While Cross Country's physician staffing segment showed growth, other companies have reported stronger growth in this area, suggesting Cross Country may need to further capitalize on this market.
- The share repurchase program is a positive sign, but the company's overall financial performance lags behind some of its peers, indicating a need for strategic adjustments to improve profitability and market position.
Stakeholder Impact
- Shareholders may be concerned about the significant year-over-year declines in revenue and profitability.
- Employees may be affected by potential cost-saving initiatives.
- Customers may experience changes in service delivery due to market adjustments.
- Suppliers may be impacted by changes in the company's financial performance.
- Creditors may be reassured by the company's strong balance sheet with no debt.
Next Steps
- The company will hold a conference call on November 6, 2024, to discuss the third quarter 2024 financial results.
- Management will focus on strategic investments to improve long-term profitability.
- The company will continue to monitor market conditions and adjust its strategies accordingly.
Key Dates
- September 30, 2024: End of the third quarter for which financial results are reported.
- November 6, 2024: Date of the press release and conference call announcing Q3 2024 financial results.
Keywords
Healthcare Staffing, Nurse Staffing, Physician Staffing, Homecare Staffing, EBITDA, Revenue, Financial Results, Quarterly Report, EPS, Gross Profit, Share Repurchase
CCRN
Cross Country Healthcare INC
NASDAQ
Sector: TBD
Filings with Classifications
Worse than expected
7 May 2025 4:45 PM
Quarterly Report
- Revenue decreased by 22.6% year-over-year.
- Net loss attributable to common stockholders was $0.5 million, compared to a net income of $2.7 million in the same period last year.
Delay expected
7 May 2025 4:45 PM
Quarterly Report
- The closing of the Aya Merger is expected in the second half of 2025, subject to regulatory approvals, indicating a potential delay due to the FTC's Second Request for additional information.
Worse than expected
7 May 2025 4:28 PM
Earnings Release
- Revenue, net income, and adjusted EBITDA were all down year-over-year.
Worse than expected
16 April 2025 4:33 PM
Form 10-K/A Amendment
- The company did not achieve its minimum performance threshold for Company Annual Adjusted EBITDA of $64 million under the Annual Incentive Plan or $50 million pursuant to the additional element added during the year.
- The company slightly exceeded the threshold performance hurdle of $1.33 billion for Company Annual Revenue.
Worse than expected
5 March 2025 4:45 PM
Annual Results
- The company's revenue decreased by 33.5% year-over-year.
- The company experienced a net loss attributable to common stockholders of $14.6 million, compared to a net income of $72.6 million in the previous year.
Delay expected
5 March 2025 4:45 PM
Annual Results
- The company now expects that the Aya Merger will close in the second half of 2025, subject to the satisfaction of other customary closing conditions, including regulatory approvals, a delay from the previously expected first half of 2025.
Worse than expected
5 March 2025 4:25 PM
Earnings Release
- The company's revenue, net income, and adjusted EBITDA all decreased significantly compared to the prior year.
Delay expected
21 February 2025 5:16 PM
Form DEFA14A Filing
- The merger is delayed due to a second request for information from the FTC, pushing the expected closing to the second half of 2025.
Worse than expected
21 February 2025 5:16 PM
Form DEFA14A Filing
- The merger closing is delayed, which is worse than the initially expected timeline.
Worse than expected
21 February 2025 4:58 PM
Current Report (8-K)
- The merger closing is delayed to the second half of 2025 due to the FTC's Second Request.
Delay expected
21 February 2025 4:58 PM
Current Report (8-K)
- The merger between Cross Country Healthcare and Aya Healthcare is now expected to close in the second half of 2025 due to a second request for information from the FTC.
Delay expected
22 January 2025 4:27 PM
Merger Announcement
- The applicable waiting period under the HSR Act was extended to 11:59 p.m Eastern Time on February 20, 2025.
Better than expected
6 January 2025 10:30 PM
Schedule 13D Filing
- The increase in beneficial ownership by a prominent investment firm like Magnetar Capital is generally viewed as a positive signal by the market, indicating confidence in the company's prospects or valuation.
Better than expected
3 January 2025 6:42 PM
Beneficial Ownership Amendment
- The document indicates an increase in beneficial ownership by a significant institutional investor (Magnetar), which is generally perceived as a positive signal of confidence in the company's future prospects.
- Magnetar's stake has grown to 7.20%, indicating a substantial and growing commitment to the company.
Better than expected
4 December 2024 5:16 PM
Merger Announcement
- The acquisition price represents a significant premium for Cross Country shareholders, indicating a better than expected outcome for them.
Better than expected
4 December 2024 4:50 PM
Merger Announcement
- The acquisition includes a substantial premium of 67% and 68% over recent trading prices, indicating a better than expected outcome for shareholders.
Better than expected
4 December 2024 8:50 AM
Merger Announcement
- The acquisition price represents a significant premium of 67% to Cross Country's closing price on December 3, 2024, indicating a better than expected outcome for shareholders.
Worse than expected
7 November 2024 3:59 PM
Quarterly Report
- The company's revenue decreased by 28.8% year-over-year, indicating a worse performance compared to the previous year.
- Net income attributable to common stockholders decreased significantly from $12.8 million to $2.6 million year-over-year, indicating a worse performance compared to the previous year.
- The Nurse and Allied Staffing segment experienced a 33.2% revenue decline, indicating a worse performance compared to the previous year.
Worse than expected
6 November 2024 4:28 PM
Quarterly Report
- The company's revenue, net income, and adjusted EBITDA all decreased significantly year-over-year, indicating worse than expected results.
- The company's gross profit margin also declined, further contributing to the worse than expected results.
Worse than expected
1 August 2024 10:15 AM
Quarterly Report
- The company's revenue decreased by 37% year-over-year.
- The company reported a net loss of $16.1 million compared to a net income of $21.3 million in the same period last year.
- The Nurse and Allied Staffing segment experienced a significant revenue decline of 41.2%.
Worse than expected
31 July 2024 4:26 PM
Quarterly Report
- The company's revenue, net income, and adjusted EBITDA all decreased significantly year-over-year, indicating worse than expected results.
Worse than expected
9 May 2024 4:05 PM
Current Report
- The company is expecting a $20 million bad debt charge, which is a negative impact on their financials.
Worse than expected
2 May 2024 7:12 AM
Quarterly Report
- The company's revenue decreased by 39% year-over-year, indicating a significant downturn in performance.
- Net income attributable to common stockholders decreased substantially from $29.4 million to $2.7 million, reflecting a significant decline in profitability.
Worse than expected
1 May 2024 4:27 PM
Quarterly Report
- The company's revenue, net income, and adjusted EBITDA all decreased significantly year-over-year, indicating worse than expected results.
- The company's gross profit margin also declined, further indicating worse than expected results.
- The company's diluted EPS and adjusted EPS were also significantly lower than the prior year, indicating worse than expected results.
Worse than expected
1 April 2024 8:00 AM
Proxy Statement
- The company did not achieve its threshold performance hurdles for Company Annual Adjusted EBITDA or Company Annual Revenue in Fiscal 2023, resulting in no awards for the Objective Bonus component for NEOs.
- The company's Fiscal 2023 Adjusted EBITDA margin of 7.2% was below the performance hurdle of 7.5%.
Worse than expected
22 February 2024 6:05 PM
Annual Results
- The company's revenue decreased by 28% year-over-year, indicating worse than expected results.
- Net income attributable to common stockholders decreased significantly, indicating worse than expected results.
Worse than expected
21 February 2024 4:24 PM
Quarterly Report
- The company's revenue, net income, and adjusted EBITDA all decreased significantly year-over-year, indicating worse than expected results.
- The company's guidance for Q1 2024 also indicates a continued decline in financial performance.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.