EX-99.1

EX-99.1 2 d403255dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

Contact:

Brian Scott

Chief Financial Officer &

Chief Accounting Officer

866.861.3229

AMN HEALTHCARE ANNOUNCES SECOND QUARTER 2017 RESULTS

Quarterly revenue of $490 million;

GAAP EPS of $0.63 and adjusted EPS of $0.67

SAN DIEGO – (August 3, 2017) – AMN Healthcare Services, Inc. (NYSE: AMN), healthcare’s leader and innovator in workforce solutions and staffing services, today announced its second quarter 2017 financial results. Financial highlights are as follows:

Dollars in millions, except per share amounts.


	Q2 2017		% Change Q2 2016			YTD June 30, 2017		% Change YTD June 30, 2016
Revenue	$	489.8		3	%	$	985.0		5	%
Gross profit	$	161.0		4	%	$	322.8		5	%
Net income	$	31.3		19	%	$	63.3		21	%
Diluted EPS	$	0.63		19	%	$	1.28		21	%
Adj. diluted EPS*	$	0.67		10	%	$	1.30		8	%
Adjusted EBITDA*	$	67.2		13	%	$	130.3		11	%

*	See “Non-GAAP Measures” below for a discussion of our use of non-GAAP items and the table entitled “Supplemental Financial and Operating Data” for a reconciliation of non-GAAP items.

Highlights

•

Consolidated revenue grew 3% year over year; revenue was 7% higher excluding the significant labor disruption revenue in the prior year quarter.

•

Travel Nurse Staffing, our largest division, grew revenue 9% year over year, driven by both volume and pricing.

•

Our Allied division reached a record high for revenue, growing 12% year over year.

•

Adjusted EBITDA grew 13% year over year, representing a 13.7% margin.

“AMN Healthcare’s ability to deliver superior service and a diversified suite of workforce solutions continues to differentiate us in the marketplace. Every day, we are helping thousands of healthcare organizations access the best talent, control costs, and more effectively optimize their workforce to deliver the best patient care possible,” said Susan R. Salka, President and Chief Executive Officer of AMN Healthcare. “Listening and responding to our clients’ evolving workforce needs is paramount and enables us to strategically position AMN to have the right solutions at the right time.”

“Although there continues to be debate regarding potential changes to healthcare policy, several key macro-trends remain very much in our favor and should continue to provide opportunity for growth as well as the need for innovation in workforce solutions. This environment, combined with the positive momentum in our MSP business and robust pipeline, provides us great confidence as we look toward 2018,” added Ms. Salka.

Second Quarter 2017 Results

Consolidated revenue for the quarter was $490 million, a 3% increase over prior year and down 1% sequentially. Excluding labor disruption revenue from the prior year quarter, consolidated second quarter revenue was up 7% year over year. There was no labor disruption revenue reported in this quarter, compared to approximately $18 million in the same quarter last year.

Revenue for the Nurse and Allied Solutions segment was $301 million, which is 3% higher year-over-year and 4% lower sequentially. The Travel Nurse division continued its strong performance, with revenue up 9% year-over-year and seasonally down 5% sequentially. The Allied division revenue increased 12% year-over-year and 1% sequentially.

Locum Tenens Solutions segment revenue was $108 million, down 1% year-over-year and up 5% sequentially. The Other Workforce Solutions segment revenue was $81 million, reflecting an increase of 12% year-over-year and 3% sequentially, with the year-over-year growth driven by the Peak Health Solutions acquisition last June and growth in the VMS, interim leadership, and workforce optimization businesses, partially offset by declines in the permanent placement businesses.

Gross margin was 32.9%, which is 20 basis points higher both year-over-year and sequentially.

SG&A expenses were $97 million, or 19.7% of revenue, compared to $100 million, or 21.0% of revenue, in the same quarter last year and $102 million, or 20.6% of revenue, in the previous quarter. SG&A included a favorable professional liability actuarial adjustment of $4 million, compared to a favorable adjustment of $2 million in the same quarter last year. On a sequential basis, the lower SG&A percentage was primarily driven by the favorable professional liability actuarial adjustment in the second quarter.

Net income was $31 million, or $0.63 per diluted share, compared to $26 million, or $0.53 per diluted share, in the same quarter last year. Excluding amortization of intangible assets, acquisition and integration costs, net of tax, and the excess tax benefits relating to a change in stock compensation accounting, adjusted net income per diluted share was $0.67. Adjusted EBITDA was $67 million, a year-over-year increase of 13%. Adjusted EBITDA margin was 13.7%, representing a 120 basis point increase year-over-year and 90 basis point increase sequentially.

At June 30, 2017, cash and cash equivalents totaled $23 million. For the quarter ended June 30, 2017, cash flow from operations was $18 million and capital expenditures were $6 million. The Company ended the quarter with total debt outstanding of $343 million, with a leverage ratio as calculated in accordance with the Company’s credit agreement of 1.4 to 1.

Third-Quarter 2017 Outlook


Metric		Guidance*
Consolidated revenue		$490 -$496 M
Gross margin		32.5%
SG&A as percentage of revenue		20.5%
Adjusted EBITDA margin		12.5%

*	Note: Guidance percentage metrics are approximate. For a reconciliation of adjusted EBITDA margin, see the table entitled “Reconciliation of Guidance Adjusted EBITDA Margin to Guidance Operating Margin” below.

The projected year-over-year revenue increase of 4% to 5% is driven primarily by growth in our Nurse and Allied and Other Workforce Solutions segments. Travel Nurse Staffing, our largest business, is expected to grow approximately 7% year over year. There is no material labor disruption revenue included in the third quarter guidance.

Conference Call on August 3, 2017

AMN Healthcare Services, Inc. (NYSE: AMN), healthcare’s leader and innovator in workforce solutions and staffing services, will host a conference call to discuss its second quarter 2017 financial results on Thursday, August 3, 2017 at 5:00 p.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare’s website at http://amnhealthcare.investorroom.com/presentations. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (800) 230-1059 in the U.S. or (612) 234-9959 internationally. Following the conclusion of the call, a replay of the webcast will be available at the Company’s website. Alternatively, a telephonic replay of the call will be available starting at 7:30 p.m. Eastern Time on August 3, 2017, and can be accessed until 11:59 p.m. Eastern Time on August 17, 2017 by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 426696.

About AMN Healthcare

AMN Healthcare is the leader and innovator in healthcare workforce solutions and staffing services to healthcare facilities across the nation. The Company provides unparalleled access to the most comprehensive network of quality healthcare professionals through its innovative recruitment strategies and breadth of career opportunities. With insights and expertise, AMN Healthcare helps providers optimize their workforce to successfully reduce

complexity, increase efficiency and improve patient outcomes. AMN delivers managed services programs, healthcare executive search solutions, vendor management systems, recruitment process outsourcing, predictive modeling, medical coding and consulting, and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities and many other healthcare settings.

The Company’s common stock is listed on the New York Stock Exchange under the symbol “AMN.” For more information about AMN Healthcare, visit www.amnhealthcare.com, where the Company posts news releases, investor presentations, webcasts, SEC filings and other material information. The Company also utilizes email alerts and Really Simple Syndication (“RSS”) as routine channels to supplement distribution of this information. To register for email alerts and RSS, visit http://amnhealthcare.investorroom.com/emailalerts.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial information, which the Company provides as additional information, and not as an alternative, to the Company’s condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures include (1) adjusted EBITDA, (2) adjusted EBITDA margin and (3) adjusted diluted EPS. The Company provides such non-GAAP financial measures because management believes that they are useful both to management and investors as a supplement, and not as a substitute, when evaluating the Company’s operating performance. Additionally, management believes that adjusted EBITDA, adjusted EBITDA margin and adjusted diluted EPS serve as industry-wide financial measures. The Company uses adjusted EBITDA for making financial decisions and allocating resources. The non-GAAP measures in this release are not in accordance with, or an alternative to, GAAP measures and may be different from non-GAAP measures, or may be calculated differently than other similarly titled non-GAAP measures, reported by other companies. They should not be used in isolation to evaluate the Company’s performance. A reconciliation of non-GAAP measures identified in this release, along with further detail about the use and limitations of certain of these non-GAAP measures, may be found below in the table entitled “Supplemental Financial and Operating Data” under the caption entitled “Reconciliation of Non-GAAP Items” and the footnotes thereto or on the Company’s website at http://amnhealthcare.investorroom.com/financialreports. Additionally, from time to time, additional information regarding non-GAAP financial measures, including pro forma measures, may be made available on the Company’s website.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, among others, statements concerning our future financial performance, our guidance for third quarter 2017 revenue, gross margin, SG&A expenses as a percentage of revenue, adjusted EBITDA margin and segment growth, the existence of favorable long-term macro drivers, our ability to grow and the positive momentum and robust pipeline with our managed service programs. The Company bases these forward-looking statements on its current expectations, estimates and projections about future events and the industry in which it operates using information currently available to it. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as “believe,” “anticipate,” “expect,” “intend,” “plan,” “will,” “may,” “estimates,” variations of such words and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements contained in this press release are set forth in our fillings with the Securities and Exchange Commission (SEC), including our most recent Annual Report on Form 10-K for the year ended December 31, 2016, our subsequent Quarterly Reports on Form 10-Q and our Current Reports on Form 8-K. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated and the Company is under no obligation (and expressly disclaims any such obligation) to update or revise any forward-looking statements whether as a result of new information, future events, or otherwise.

Contact:

Brian Scott

Chief Financial Officer & Chief Accounting Officer

866.861.3229

AMN Healthcare Services, Inc.

Condensed Consolidated Statements of Comprehensive Income

(in thousands, except per share amounts)

(unaudited)


	Three Months Ended									Six Months Ended
	June 30,						March 31,			June 30,
	2017			2016			2017			2017			2016
Revenue	$	489,803		$	473,729		$	495,169		$	984,972		$	941,731
Cost of revenue		328,791			318,976			333,393			662,184			635,080

Gross profit		161,012			154,753			161,776			322,788			306,651

Gross margin		32.9	%		32.7	%		32.7	%		32.8	%		32.6	%
Operating expenses:
Selling, general and administrative (SG&A)		96,673			99,541			102,073			198,746			197,364
SG&A as a % of revenue		19.7	%		21.0	%		20.6	%		20.2	%		21.0	%

Depreciation and amortization		7,959			7,334			7,668			15,627			14,099

Total operating expenses		104,632			106,875			109,741			214,373			211,463

Income from operations		56,380			47,878			52,035			108,415			95,188
Operating margin ⁽¹⁾		11.5	%		10.1	%		10.5	%		11.0	%		10.1	%
Interest expense, net, and other		4,928			2,800			5,130			10,058			6,049

Income before income taxes		51,452			45,078			46,905			98,357			89,139

Income tax expense		20,197			18,756			14,897			35,094			36,948

Net income	$	31,255		$	26,322		$	32,008		$	63,263		$	52,191

Net income as a % of revenue		6.4	%		5.6	%		6.5	%		6.4	%		5.5	%
Other comprehensive income (loss):
Foreign currency translation and other		(41	)		86			3			(38	)		125
Cash flow hedge, net of income taxes		(58	)		(111	)		43			(15	)		(574	)

Other comprehensive income (loss)		(99	)		(25	)		46			(53	)		(449	)

Comprehensive income	$	31,156		$	26,297		$	32,054		$	63,210		$	51,742

Net income per common share:
Basic	$	0.65		$	0.55		$	0.67		$	1.32		$	1.09

Diluted	$	0.63		$	0.53		$	0.65		$	1.28		$	1.06

Weighted average common shares outstanding:
Basic		47,916			48,034			47,782			47,849			47,964

Diluted		49,475			49,348			49,520			49,498			49,225

AMN Healthcare Services, Inc.

Supplemental Financial and Operating Data

(dollars in thousands, except per share data and operating data)

(unaudited)


	Three Months Ended									Six Months Ended
	June 30,						March 31,			June 30,
	2017			2016			2017			2017			2016
Revenue
Nurse and allied solutions	$	300,727		$	292,663			313,523			614,250			590,387
Locum tenens solutions		108,215			109,129			102,843			211,058			211,867
Other workforce solutions		80,861			71,937			78,803			159,664			139,477

	$	489,803		$	473,729			495,169			984,972			941,731

Reconciliation of Non-GAAP Items:

Segment operating income ⁽²⁾
Nurse and allied solutions	$	47,851		$	39,503			45,980			93,831			81,121
Locum tenens solutions		12,371			16,317			12,219			24,590			29,608
Other workforce solutions		22,041			17,858			19,857			41,898			35,444

		82,263			73,678			78,056			160,319			146,173
Unallocated corporate overhead		15,080			14,420			14,891			29,971			28,225

Adjusted EBITDA ⁽³⁾		67,183			59,258			63,165			130,348			117,948
Adjusted EBITDA margin ⁽⁴⁾		13.7	%		12.5	%		12.8	%		13.2	%		12.5	%

Depreciation and amortization		7,959			7,334			7,668			15,627			14,099
Share-based compensation		2,562			2,710			2,681			5,243			6,091
Acquisition and integration costs		282			1,336			781			1,063			2,570

Income from operations		56,380			47,878			52,035			108,415			95,188
Interest expense, net, and other		4,928			2,800			5,130			10,058			6,049

Income before income taxes		51,452			45,078			46,905			98,357			89,139
Income tax expense		20,197			18,756			14,897			35,094			36,948

Net income	$	31,255		$	26,322			32,008			63,263			52,191

GAAP diluted net income per share (EPS)	$	0.63		$	0.53			0.65			1.28			1.06
Adjustments:
Amortization of intangible assets		0.09			0.09			0.09			0.19			0.18
Acquisition and integration costs		0.01			0.03			0.02			0.02			0.05
Tax effect on above adjustments		(0.04	)		(0.04	)		(0.04	)		(0.08	)		(0.09	)
Excess tax benefits ⁽⁵⁾		(0.02	)		0.00			(0.09	)		(0.11	)		0.00

Adjusted diluted EPS ⁽⁶⁾	$	0.67		$	0.61			0.63			1.30			1.20


	Three Months Ended							Six Months Ended
	June 30,				March 31,			June 30,
	2017	2016			2017			2017			2016
Gross Margin
Nurse and allied solutions	27.8%		26.7	%		27.7	%		27.7	%		26.7	%
Locum tenens solutions	30.0%		31.3	%		30.7	%		30.3	%		31.1	%
Other workforce solutions	55.7%		58.9	%		55.0	%		55.3	%		59.6	%

Operating Data:
Nurse and allied solutions
Average healthcare professionals on assignment ⁽⁷⁾	8,776		8,337			9,051			8,913			8,406

Locum tenens solutions
Days filled ⁽⁸⁾	58,660		61,068			55,243			113,903			119,234
Revenue per day filled ⁽⁹⁾	$1,845	$	1,787		$	1,862		$	1,853		$	1,777



	As of June 30,				As of March 31,
	2017		2016		2017
Leverage ratio ⁽¹⁰⁾		1.4		1.9		1.6

AMN Healthcare Services, Inc.

Condensed Consolidated Balance Sheets

(dollars in thousands)

(unaudited)


	June 30, 2017		March 31, 2017		December 31, 2016
Assets
Current assets:
Cash and cash equivalents	$	22,878	$	37,711	$	10,622
Accounts receivable, net		334,597		334,782		341,977
Accounts receivable, subcontractor		36,631		48,838		49,233
Prepaid and other current assets		46,938		50,893		48,796

Total current assets		441,044		472,224		450,628

Restricted cash, cash equivalents and investments		33,882		29,141		31,287
Fixed assets, net		65,368		62,620		59,954
Other assets		71,594		65,368		57,534
Goodwill		340,596		340,564		341,754
Intangible assets, net		236,486		241,130		245,724

Total assets	$	1,188,970	$	1,211,047	$	1,186,881

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	118,943	$	136,028	$	137,512
Accrued compensation and benefits		107,283		99,642		107,993
Current portion of notes payable, less unamortized fees		18,071		3,750		3,750
Deferred revenue		9,644		8,840		8,924
Other current liabilities		12,387		29,428		16,611

Total current liabilities		266,328		277,688		274,790

Notes payable, less unamortized fees		319,462		358,512		359,192
Deferred income taxes, net		12,387		16,548		21,420
Other long-term liabilities		82,301		81,494		82,096

Total liabilities		680,478		734,242		737,498

Commitments and contingencies

Stockholders’ equity		508,492		476,805		449,383

Total liabilities and stockholders’ equity	$	1,188,970	$	1,211,047	$	1,186,881

AMN Healthcare Services, Inc.

Summary Condensed Consolidated Statements of Cash Flows

(dollars in thousands)

(unaudited)


	Three Months Ended									Six Months Ended
	June 30,						March 31			June 30,
	2017			2016			2017			2017			2016
Net cash provided by operating activities	$	18,474		$	20,053		$	52,314		$	70,788		$	55,280
Net cash used in investing activities		(6,320	)		(58,451	)		(13,301	)		(19,621	)		(233,154	)
Net cash provided by (used in) financing activities		(26,945	)		36,268			(11,928	)		(38,873	)		189,235
Effect of exchange rates on cash		(42	)		86			4			(38	)		125

Net increase (decrease) in cash and cash equivalents		(14,833	)		(2,044	)		27,089			12,256			11,486
Cash and cash equivalents at beginning of period		37,711			23,106			10,622			10,622			9,576

Cash and cash equivalents at end of period	$	22,878		$	21,062		$	37,711		$	22,878		$	21,062

AMN Healthcare Services, Inc.

Additional Supplemental Non-GAAP Disclosures

Reconciliation of Guidance Adjusted EBITDA Margin to

Guidance Operating Margin

(unaudited)


	Three Months Ending
	September 30, 2017
Adjusted EBITDA margin		12.5	%⁽¹¹⁾
Deduct:
Share-based compensation		0.5	%

EBITDA margin		12.0	%

Depreciation and amortization		1.6	%

Operating margin		10.4	%

(1)	Operating margin represents income from operations divided by revenue.

(2)	Segment operating income represents net income plus interest expense (net of interest income) and other, income tax expense, depreciation and amortization, unallocated corporate overhead, acquisition and integration costs and share-based compensation.

(3)

Adjusted EBITDA represents net income plus interest expense (net of interest income) and other, income tax expense, depreciation and amortization, acquisition and integration costs and share-based compensation. Management believes that adjusted EBITDA provides an effective measure of the Company’s results, as it excludes certain items that management believes are not indicative of the Company’s operating performance and is a measure used in the Company’s credit agreement and the indenture governing our 5.125% Senior Notes due 2024. Adjusted EBITDA is not intended to represent cash flows for the period, nor has it been presented as an alternative to income from operations or net income as an indicator of operating performance. Although management believes that some of the items excluded from adjusted EBITDA are not indicative of the Company’s operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted EBITDA as an operating performance measure in conjunction with GAAP measures such as net income.

(4)	Adjusted EBITDA margin represents adjusted EBITDA divided by revenue.

(5)

The consolidated effective tax rate for the three and six months ended June 30, 2017 was favorably affected by the recording of excess tax benefits relating to equity awards vested and exercised during the period. As a result of the adoption of a new accounting pronouncement on January 1, 2017, we no longer record excess tax benefits as an increase to additional paid-in capital, but record such excess tax benefits on a prospective basis as a reduction of income tax expense, which amounted to $1,028,000 and $5,325,000 for the three and six months ended June 30, 2017, respectively. Since the majority of our equity awards vest during the first quarter of the year, we do not anticipate the recording of additional excess tax benefits of this magnitude for the reminder of the year. The magnitude of the impact of excess tax benefits generated in the future, which may be favorable or unfavorable, is dependent upon the Company’s future grants of share-based compensation, the Company’s future stock price on the date awards vest or exercise in relation to the fair value of the awards on the grant date or the exercise behavior of the Company’s stock appreciation rights holders. Since these favorable tax benefits are largely unrelated to our current year’s income before taxes and is unrepresentative of our normal effective tax rate, we excluded their impact on adjusted diluted EPS for the three and six months ended June 30, 2017.

(6)

Adjusted diluted EPS represents GAAP diluted EPS excluding the impact of (A) amortization of intangible assets, (B) acquisition and integration costs, (C) tax effect, if any, of the foregoing adjustments, and (D) excess tax benefits relating to equity awards vested and exercised since January 1, 2017. Management included this non-GAAP measure to provide investors and prospective investors with an alternative method for assessing the Company’s operating results in a manner that is focused on its operating performance and to provide a more consistent basis for comparison between periods. However, investors and prospective investors should note that this non-GAAP measure involves judgment by management (in particular, judgment as to what is classified as a special item to be excluded from adjusted diluted EPS). Although management believes the items excluded from adjusted diluted EPS are not indicative of the Company’s operating performance, these items do impact the statement of comprehensive income, and management therefore utilizes adjusted diluted EPS as an operating performance measure in conjunction with GAAP measures such as GAAP diluted EPS.

(7)	Average healthcare professionals on assignment represents the average number of nurse and allied healthcare professionals on assignment during the period presented.

(8)	Days filled is calculated by dividing the locum tenens hours filled during the period by eight hours.

(9)	Revenue per day filled represents revenue of the Company’s locum tenens solutions segment divided by days filled for the period presented.

(10)

Leverage ratio represents the ratio of the consolidated funded indebtedness (as calculated per the Company’s credit agreement) at the end of the subject period to the consolidated adjusted EBITDA (as calculated per the Company’s credit agreement) for the twelve-month period ended at the end of the subject period.

(11)	Guidance percentage metrics are approximate. No significant labor disruption revenues are projected for this quarter.