CCRN
Cross Country Healthcare INC
NASDAQ
10-Q: Cross Country Healthcare Reports Q3 2024 Results: Revenue Declines Amid Market Normalization
Sentiment:
Quarterly Report
7 November 2024 3:59 PM
Cross Country Healthcare's Q3 2024 revenue decreased by 28.8% year-over-year, primarily due to declines in travel nurse and allied staffing, while physician staffing saw growth.
Worse than expected
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.
Summary
- Cross Country Healthcare's revenue for the third quarter of 2024 was $315.1 million, a 28.8% decrease compared to the same period in 2023.
- The decline in revenue was primarily driven by a decrease in travel nurse and allied staffing, with both billable days and average bill rates declining.
- Net income attributable to common stockholders was $2.6 million for the quarter, down from $12.8 million in the prior year.
- Cash and cash equivalents totaled $64.0 million at the end of the quarter.
- Operating cash flow for the nine months ended September 30, 2024, was $95.9 million.
- There were no borrowings under the revolving senior-secured asset-based credit facility, with $135.2 million of availability net of letters of credit.
- The company repurchased 816,879 shares of common stock for $11.9 million during the quarter.
- For the nine months ended September 30, 2024, the company repurchased a total of 2,107,035 shares of common stock for $33.2 million.
- The company's Nurse and Allied Staffing segment saw a 33.2% revenue decrease, while the Physician Staffing segment experienced a 10.0% increase in revenue.
Sentiment
Score: 4
Explanation: The document presents a mixed picture with significant revenue and profit declines, but also some positive growth in specific segments and a strong cash position. The overall tone is cautious, reflecting the challenges the company is facing in the current market.
Positives
- Physician Staffing revenue increased by 10.0% year-over-year in the third quarter.
- Homecare Staffing within the Nurse and Allied segment grew by 13.1% year-over-year and 4.0% sequentially.
- The company has a strong cash position with $64.0 million in cash and cash equivalents.
- The company has no borrowings under its asset-based loan facility and has $135.2 million of availability net of letters of credit.
- The company generated $95.9 million in operating cash flow for the nine months ended September 30, 2024.
Negatives
- Overall revenue decreased by 28.8% year-over-year.
- Net income attributable to common stockholders decreased significantly from $12.8 million to $2.6 million year-over-year.
- The Nurse and Allied Staffing segment experienced a 33.2% revenue decline.
- The company experienced margin compression in several core businesses.
- Credit loss expense increased significantly for the nine months ended September 30, 2024, due to a bankruptcy filing by a single large customer.
Risks
- The company faces risks related to macroeconomic factors, including inflation and interest rates.
- There is a risk of reduced demand for healthcare services.
- The company faces challenges in attracting and retaining qualified healthcare personnel.
- The company is exposed to cyber security risks and cyber incidents.
- The company is subject to government regulation and legislative initiatives.
- The company faces competition in the markets it serves.
- The company's future results could be materially adversely affected by delays in payments from customers and inflationary pressure.
Future Outlook
The company expects to meet its future cash needs from a combination of cash on hand, operating cash flows, and funds available through the ABL.
Management Comments
- The company is continually evaluating opportunities to acquire companies that would complement or enhance its business.
- The company has a history of investing in diversity, equality, and inclusion as a key component of the organization's overall corporate social responsibility program.
- The company believes that its core values are aligned to create a better future for its people, communities, and stockholders.
Industry Context
The healthcare staffing industry is experiencing a normalization of demand following the pandemic, with a decrease in travel nurse assignments and bill rates. The company is adapting to these changes by focusing on other lines of business, such as homecare and physician staffing, while also managing costs.
Comparison to Industry Standards
- The decline in travel nurse staffing revenue is consistent with broader industry trends as demand normalizes after the pandemic surge, companies like AMN Healthcare and CHG Healthcare have also reported similar trends.
- The growth in physician staffing is a positive sign, as this segment is less susceptible to the fluctuations seen in travel nursing, this is similar to trends seen in other healthcare staffing companies with diversified offerings.
- The company's focus on cost management and share repurchases is a common strategy among publicly traded companies in the current economic environment, similar to actions taken by companies like Robert Half International.
- The increase in credit loss expense due to a bankruptcy filing highlights the risks associated with large customer concentrations, a risk that is present across the industry.
Stakeholder Impact
- Shareholders are impacted by the decrease in revenue and net income, but also by the share repurchase program.
- Employees may be impacted by restructuring activities and cost management measures.
- Customers may be impacted by changes in service offerings and pricing.
- Suppliers may be impacted by changes in the company's financial performance.
- Creditors are impacted by the company's debt levels and ability to repay.
Next Steps
- The company will continue to evaluate opportunities to acquire companies that would complement or enhance its business.
- The company will continue to monitor and manage its costs.
- The company will continue to focus on its diversified offerings to meet the unique needs of its customers.
Legal Proceedings
- The company is involved in various litigation, claims, investigations, and other proceedings that arise in the ordinary course of its business.
- These proceedings primarily relate to employee-related matters, professional liability, tax, and payroll practices.
- The company believes that the outcome of any outstanding loss contingencies as of September 30, 2024, will not have a material adverse effect on its business, financial condition, results of operations, or cash flows.
Related Party Transactions
- The company has an arrangement for digital marketing services with a firm related to a board member.
- The company provides services to entities affiliated with certain board members.
Key Dates
- 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.
- July 29, 2024: The company amended the Loan Agreement (Seventh Amendment).
- September 30, 2024: End of the reporting period for the quarterly report.
- October 25, 2024: The registrant had outstanding 32,916,647 shares of common stock.
- November 7, 2024: Date of the quarterly report filing.
Keywords
healthcare staffing, travel nurse, physician staffing, contingent labor, managed service programs, workforce solutions, per diem, recruitment, homecare staffing, credit loss, asset-based loan
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.
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