CCRN
Cross Country Healthcare INC
NASDAQ
10-Q: Cross Country Healthcare Reports Q2 2024 Results: Revenue Declines Amid Market Normalization
Sentiment:
Quarterly Report
1 August 2024 10:15 AM
Cross Country Healthcare's Q2 2024 revenue decreased by 37% year-over-year, primarily due to reduced demand and lower bill rates in the Nurse and Allied Staffing segment.
Worse than expected
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%.
Summary
- Cross Country Healthcare reported a 37% year-over-year decrease in revenue from services for the second quarter of 2024, totaling $339.8 million.
- The decline was primarily driven by a 26% decrease in demand and a 21% decrease in average bill rates within the Nurse and Allied Staffing segment.
- The Physician Staffing segment saw a 7% year-over-year revenue increase due to a 12% price increase and a 2% volume increase.
- The company experienced a net loss attributable to common stockholders of $16.1 million in Q2 2024, compared to a net income of $21.3 million in the same period last year.
- Cash and cash equivalents totaled $69.6 million at the end of the quarter, with no debt outstanding.
- Operating cash flow for the first six months of 2024 was $88.4 million, with a decrease in working capital due to reduced receivables.
- The company's credit loss expense increased significantly to $18.9 million in Q2 2024 due to a customer bankruptcy filing.
- The company repurchased 979,921 shares of common stock for $14.9 million during the quarter.
Sentiment
Score: 3
Explanation: The document indicates a significant downturn in financial performance, with a substantial revenue decrease and a net loss. While there are some positive aspects, the overall tone is negative due to the poor financial results.
Positives
- Homecare Staffing within the Nurse and Allied segment experienced 12% year-over-year revenue growth and 6% sequential revenue growth.
- The Physician Staffing segment saw a 7% year-over-year revenue increase due to a 12% price increase and a 2% volume increase.
- The company has no debt outstanding and $69.6 million in cash and cash equivalents.
- Over 90% of existing travel customers have transitioned to the company's Intellify platform.
- The company's days sales outstanding decreased by 7 days year-over-year and 18 days sequentially.
Negatives
- Revenue from services decreased by 37% year-over-year to $339.8 million.
- Net loss attributable to common stockholders was $16.1 million, a significant drop from the $21.3 million net income in the same period last year.
- The Nurse and Allied Staffing segment experienced a 41.2% revenue decrease.
- Credit loss expense surged to $18.9 million due to a customer bankruptcy.
- The company's working capital decreased by $39.0 million to $227.6 million.
Risks
- The company faces risks related to the overall macroeconomic environment, including increased inflation and interest rates.
- There are risks associated with the demand for healthcare services and the ability to attract and retain qualified healthcare personnel.
- The company is exposed to cyber security risks and cyber incidents.
- There are risks related to government regulation and legislative initiatives, including data privacy and protection laws.
- The company faces competition in the markets it serves.
- The company's future results could be materially adversely affected by macroeconomic factors contributing to delays in payments from customers and inflationary pressure.
Future Outlook
The company will remain responsive to current market conditions while ensuring a solid foundation for growth, and technology initiatives are enhancing their competitive positioning.
Management Comments
- We have been able to execute in the challenging travel staffing environment, with a positive demand trajectory as we exited the quarter.
- Our technology initiatives are enhancing our competitive positioning, driven in part by Intellify's traction in the marketplace.
- We will remain responsive to the current market conditions while also ensuring that we maintain a solid foundation for growth.
Industry Context
The healthcare staffing industry is experiencing a normalization of demand and bill rates after a period of high demand, impacting companies like Cross Country Healthcare. The company is focusing on technology and diversification to navigate these changes.
Comparison to Industry Standards
- The decline in revenue and profitability at Cross Country Healthcare is indicative of a broader trend in the healthcare staffing industry, where demand for travel nurses has decreased from pandemic highs.
- Competitors such as AMN Healthcare and CHG Healthcare have also reported similar challenges, with revenue declines and margin compression.
- Cross Country's focus on technology, particularly the Intellify platform, is a strategic move to differentiate itself and improve efficiency, which is a common theme among leading staffing firms.
- The increase in credit loss expense due to a customer bankruptcy is a risk that is not unique to Cross Country, as other staffing firms also face credit risks with their clients.
Stakeholder Impact
- Shareholders are negatively impacted by the decrease in revenue and net loss.
- Employees may be affected by cost management measures.
- Customers may experience changes in service offerings due to market adjustments.
- Suppliers and creditors may be impacted by the company's financial performance.
Next Steps
- The company will continue to monitor market conditions and adjust its strategies accordingly.
- The company will focus on leveraging its technology platform, Intellify, to enhance its competitive position.
- The company will continue to manage costs and optimize its operations.
Legal Proceedings
- The company is involved in various litigation, claims, investigations, and other proceedings that arise in the ordinary course of its business.
- During the second quarter of 2024, the company recorded legal settlement charges related to the resolution of a class action settlement agreement, as well as costs related to an unrecoverable asset.
Related Party Transactions
- The company has an arrangement for digital marketing services with a firm related to Mr. Kevin C. Clark, the company's non-executive Chairman of the Board of Directors.
- The company provides services to entities affiliated with certain members of the company's Board of Directors.
Key Dates
- October 25, 2019: The company entered into an asset-based loan agreement.
- June 8, 2021: The company entered into a Term Loan Credit Agreement.
- October 3, 2022: The company purchased and acquired substantially all of the assets and assumed certain liabilities of Mint Medical Physician Staffing, LP and Lotus Medical Staffing LLC.
- December 13, 2022: The company purchased and acquired substantially all of the assets and assumed certain liabilities of HireUp Leadership Inc.
- May 1, 2023: The company's Board of Directors authorized approximately $59.0 million in additional share repurchases.
- June 30, 2023: The company repaid all outstanding obligations under the term loan and terminated the Term Loan Agreement.
- May 14, 2024: The company's stockholders approved the Cross Country Healthcare, Inc. 2024 Omnibus Incentive Plan.
- June 30, 2024: End of the reporting period for the quarterly report.
- July 22, 2024: The registrant had 33,808,610 shares of common stock outstanding.
- July 29, 2024: The company amended its Loan Agreement.
- August 1, 2024: Date of the report.
Keywords
healthcare staffing, travel nursing, physician staffing, nurse staffing, allied health, managed service programs, Intellify, revenue, credit loss, financial results
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.
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 4:45 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.
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.
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.
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.
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.
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
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.
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