EX-99.1 3 pressrelease991.htm PRESS RELEASE BP[jobnumber] -- Cross Country -- Exhibit 99.1

Exhibit 99.1





[pressrelease991001.jpg]

     NEWS

FOR IMMEDIATE RELEASE


CROSS COUNTRY HEALTHCARE REPORTS

FOURTH QUARTER AND YEAR END 2004 RESULTS


BOCA RATON, Fla. – March 7, 2005 – Cross Country Healthcare, Inc. (Nasdaq: CCRN) today reported revenue of $159.5 million for the fourth quarter ended December 31, 2004, and net income of $5.6 million, or $0.17 per diluted share. This compares to revenue of $172.8 million and net income of $5.1 million, or $0.16 per diluted share, in the same quarter of the prior year. On a sequential basis, revenue from continuing operations decreased approximately 2% from the third quarter of 2004. Net income for the fourth quarter of 2004 increased approximately 9% sequentially from the prior quarter. The effective tax rate for the fourth quarter of 2004 was 31.5% as compared to 38.5% for the first three quarters of 2004, reflecting certain non-recurring tax adjustments that equate to a benefit of approximately $0.02 per diluted share. Including these tax adjustments, the Company’s income from continuing operations was $0.18 per diluted share. Cash flow from operations for the fourth quarter of 2004 was $6.3 million, which along with proceeds from the sale of two of the Company’s healthcare consulting practices during the fourth quarter, allowed the Company to reduce its debt to $42.3 million at December 31, 2004 from $60.4 million at the end of the prior quarter.


For the year ended December 31, 2004, Cross Country Healthcare reported revenue of $654.1 million, a 3% decrease from revenue of $673.1 million in 2003. Net income declined to $20.7 million, or $0.63 per diluted share, from net income of $25.8 million, or $0.79 per diluted share, in the prior year. Cash flow from operations for 2004 was $43.3 million.


“While our nurse staffing business continued to seek traction during the fourth quarter, our clinical trials staffing, education and retained search businesses all performed well in the quarter and all produced record revenue and profitability for the full year,” said Joseph A. Boshart, President and Chief Executive Officer of Cross Country Healthcare, Inc. “We are disappointed with the performance of our nurse staffing business during the fourth quarter of 2004, particularly during the historically important month of December, and believe it was impacted by generally weak hospital admission patterns and a downturn in demand in California toward the end of the year that we believe coincides with the administrative decision to postpone the further reduction in patient ratios as initially scheduled for January 1st of this year. On the supply side, we experienced strengthening in our nurse applicant activity during the fourth quarter, which has continued into the New Year. We believe this is driven, in part, by our success in achieving vendor manager status at a number of our larger accounts nationwide,” added Mr. Boshart.


Healthcare Staffing


For the fourth quarter of 2004, the healthcare staffing business segment (travel and per diem nurse, allied health and clinical trials staffing) generated revenue of $148.1 million as compared with revenue of $162.5 million in the same quarter of the prior year. Segment revenue declined 2% sequentially from the third quarter of 2004 and 9% from the year ago quarter, primarily reflecting year over year revenue and staffing volume reductions in the nurse staffing business that was partially offset by significant revenue growth in the clinical trials staffing business. During the fourth quarter, healthcare staffing volumes declined approximately 1% sequentially from the third quarter of 2004 and 8% on a year over year basis.


Contribution income (defined as income from continuing operations before interest, income taxes, depreciation and amortization and corporate expenses not specifically identified to a reporting segment), decreased 8% in the fourth quarter of 2004 to $15.6 million from $17.0 million in the same quarter of 2003, reflecting a contraction in the bill-pay spread in the core nurse staffing business and negative operating leverage as a result of lower nurse staffing volume.


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For the year ended December 31, 2004, segment revenue decreased on a year over year basis by 4% to $612.1 million from $636.7 million in the same period a year ago, and contribution income declined by 18% to $62.0 million from $75.9 million in the prior year period.


Other Human Capital Management Services


For the fourth quarter of 2004, the other human capital management services business segment (education and training and retained search business) generated revenue of $11.4 million, a 10% increase from revenue of $10.3 million in the same quarter in the prior year. This was primarily due to significantly higher revenue from the retained search business. Contribution income in the fourth quarter of 2004 improved to $2.4 million, a 28% increase over the same quarter a year ago, reflecting a substantial improvement in the retained search business. On October 5, 2004, the Company sold two of its three healthcare consulting practices and is pursuing a plan of sale for the third. Accordingly, the healthcare consulting business has been reclassified as discontinued operations.


For the year ended December 31, 2004, revenue for the other human capital management services segment increased 16% on a year over year basis to $42.0 million from revenue of $36.4 million in 2003, while contribution income increased 49% to $7.1 million from $4.8 million in the prior year period.


Debt Repayment


During the fourth quarter of 2004, Cross Country Healthcare paid back $14.9 million of the outstanding term loan under its credit facility. At quarter end, the Company’s $75.0 million revolving credit facility was undrawn. At December 31, 2004, the Company had approximately $42.3 million of total debt on its balance sheet, which represented an 11% debt to total capitalization ratio.


Stock Repurchase Program Update


The Company did not purchase any shares of its common stock during the fourth quarter of 2004. Instead, it focused its cash resources on the reduction of debt. The Company can purchase up to an additional 469,600 shares at an aggregate price not to exceed approximately $10.8 million under this previously authorized stock repurchase program. Under this program, the shares may be purchased from time-to-time in the open market and may be discontinued at any time at the Company’s discretion. At December 31, 2004, the Company had approximately 32.2 million shares outstanding.


Guidance for First Quarter of 2005


The following statements are based on current management expectations. Such statements are forward-looking and actual results may differ materially. These statements do not include the potential impact of any future mergers, acquisitions or other business combinations, repurchases of the Company's common stock, or pending legal matters.


Based on the present industry dynamics and seasonal factors, Cross Country Healthcare expects revenue in the first quarter of 2005 to be in the $154 million to $157 million range and EPS per diluted share to be in the range of $0.10 to $0.12. The Company’s gross profit margin in its core travel nurse staffing business typically declines sequentially in the first quarter due to the reset of payroll taxes, lower housing occupancy rates following the holidays, as well as two fewer billable days than in the fourth quarter.


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Quarterly Conference Call


Cross Country Healthcare will hold a conference call on Tuesday, March 8th at 10:00 a.m. Eastern Time to discuss its fourth quarter and year end 2004 financial results. This call will be webcast live by CCBN and may be accessed at the Company's web site at www.crosscountry.com or by dialing 877-915-2769 from anywhere in the U.S. or by dialing 630-395-0018 from non-U.S. locations – Passcode: Cross Country. A replay of the webcast will be available through March 22nd. A replay of the conference call will be available by telephone from approximately 12:00 p.m. Eastern Time on March 8th through March 22nd by calling 800-793-2384 from anywhere in the U.S. or by calling 402-280-1608 from non-U.S. locations.


About Cross Country Healthcare


Cross Country Healthcare, Inc. is a leading provider of healthcare staffing services in the United States. The Company has a client base of approximately 3,000 hospitals, pharmaceutical companies and other healthcare providers across all 50 states. Copies of this and other news releases as well as additional information about Cross Country Healthcare can be obtained online at www.crosscountry.com. Shareholders and prospective investors can also register at the corporate web site to automatically receive the Company's press releases, SEC filings and other notices by e-mail.


This release contains forward-looking statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" and similar expressions are forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include: our ability to attract and retain qualified nurses and other healthcare personnel, costs and availability of short-term leases for our travel nurses, demand for the healthcare services we provide, both nationally and in the regions in which we operate, the functioning of our information systems, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our clients' ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company’s, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors set forth under the caption "Risk Factors" in the Company's Registration Statement on Form S-3 dated November 3, 2004. Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results. Given these uncertainties, the forward-looking statements discussed in this press release might not occur. While it is the Company's intention to update its guidance quarterly, it should not be assumed that its silence over time means that actual events are occurring as expressed or implied in such forward-looking statements.


# # #


For further information, please contact:

Howard A. Goldman

Director/Investor & Corporate Relations

Cross Country Healthcare, Inc.

Phone: 877-686-9779

Email: hgoldman@crosscountry.com


Additional information about our business:



Cross Country Staffing

Healthcare Staffing


Cross Country TravCorps

Travel Nursing


Cross Country Local

Per Diem Nurse


MedStaff

Travel Nursing
Per Diem Nurse


NovaPro

Travel Nursing


Assignment America

International Nursing


MRA

Nurse Recruiting


ClinForce

Clinical Staffing


Cross Country University

CEU Continuing Education for Nurses


Cejka Search

Physician Jobs
Executive Search



6551 Park of Commerce Blvd., Boca Raton, FL 33487

Tel: (800) 347-2264   Fax: (561) 998-8533   www.crosscountry.com








Cross Country Healthcare, Inc.

Consolidated Statements of Income (a)

(Amounts in thousands, except per share data)


  

Three Months 
Ended

December 31,

   

Twelve Months 
Ended

December 31,

   
  

2004

 

2003

 

%
Change

 

2004

 

2003

  

%
Change

    

   

 

(unaudited)

   

 

   

     

   

  

Revenue from services

 

$

159,487

 

$

172,823

 

(8%)

 

$

654,111

   

$

673,102

  

(3%)

Operating expenses:

                 

   Direct operating expenses

  

123,291

  

134,058

 

(8%)

  

509,571

  

519,840

  

(2%)

   Selling, general and administrative expenses

  

25,144

  

25,484

 

(1%)

  

99,535

  

95,736

  

4%

   Bad debt expense

  

(136

)

 

732

 

(119%)

  

957

  

1,350

  

(29%)

   Depreciation

  

1,273

  

1,161

 

10%

  

5,140

  

4,371

  

18%

   Amortization

  

658

  

972

 

(32%)

  

2,345

  

3,470

  

(32%)

   Non-recurring secondary offering costs

  

  

 

ND

  

  

16

  

(100%)

Total operating expenses

  

150,230

  

162,407

 

(7%)

  

617,548

  

624,783

  

(1%)

Income from operations

  

9,257

  

10,416

 

(11%)

  

36,563

  

48,319

  

(24%)

Other expenses:

                 

   Loss on early extinguishment of debt

  

  

 

ND

  

  

960

  

ND

   Interest expense, net

  

815

  

1,508

 

(46%)

  

4,025

  

4,317

  

(7%)

Income from continuing operations before income taxes

  

8,442

  

8,908

 

(5%)

  

32,538

  

43,042

  

(24%)

Income tax expense

  

2,658

  

3,447

 

(23%)

  

11,935

  

16,657

  

(28%)

Income from continuing operations

  

5,784

  

5,461

 

6%

  

20,603

  

26,385

  

(22%)

Discontinued operations, net of income taxes

  

(213

)

 

(324

)

(34%)

  

56

  

(564

)

 

110%

Net income

 

$

5,571

 

$

5,137

 

8%

 

$

20,659

 

$

25,821

  

(20%)

                  

Net income/(loss) per common share- basic :

                 

   Income from continuing operations

 

$

0.18

 

$

0.17

   

$

0.65

 

$

0.82

   

   Discontinued operations, net of income taxes

  

(0.01

)

 

(0.01

)

   

0.00

  

(0.02

)

  

Net income per common share- basic

 

$

0.17

 

$

0.16

   

$

0.65

 

$

0.80

   
                  

Net income/(loss) per common share- diluted :

                 

   Income from continuing operations

 

$

0.18

 

$

0.17

   

$

0.63

 

$

0.81

   

   Discontinued operations, net of income taxes

  

(0.01

)

 

(0.01

)

   

0.00

  

(0.02

)

  

Net income per common share- diluted

 

$

0.17

 

$

0.16

   

$

0.63

 

$

0.79

   
                  

Weighted average common shares outstanding - basic

  

32,109

  

31,859

    

31,993

  

32,091

   

Weighted average common shares outstanding - diluted

  

32,651

  

32,360

    

32,578

  

32,531

   

—————

ND - not determinable

(a)

Reclassified to conform to current year's presentation, primarily the reclassification of Cross Country Consulting, Inc.'s results to discontinued operations.












Cross Country Healthcare, Inc.

Condensed Consolidated Balance Sheets

(Amounts in thousands)

  

December 31, 2004

 

December 31, 2003

 
       

             

       

Assets

       

Current assets:

       

   Cash and cash equivalents

 

$

 

$

 

   Accounts receivable, net

  

95,439

  

112,407

 

   Income taxes receivable

  

3,100

  

2,310

 

   Deferred taxes

  

4,949

  

1,933

 

   Other current assets

  

13,199

  

10,639

 

Total current assets

  

116,687

  

127,289

 

Property and equipment, net

  

11,840

  

12,602

 

Goodwill, net

  

302,854

  

307,532

 

Trademarks, net

  

15,499

  

15,749

 

Other identifiable intangible assets, net

  

6,814

  

8,580

 

Other assets, net

  

2,301

  

2,972

 

Total assets

 

$

455,995

 

$

474,724

 
        

Liabilities and Stockholders' Equity

       

Current liabilities:

       

   Accounts payable and accrued expenses

 

$

5,993

 

$

9,462

 

   Accrued employee compensation and benefits

  

32,031

  

29,994

 

   Short-term debt

  

2,408

  

4,944

 

   Other current liabilities

  

4,326

  

3,358

 

Total current liabilities

  

44,758

  

47,758

 

Deferred income taxes

  

24,996

  

17,649

 

Long-term debt and note payable

  

39,867

  

88,794

 

Total liabilities

  

109,621

  

154,201

 
        

Commitments and contingencies

       
        

Stockholders' equity:

       

   Common stock

  

3

  

3

 

   Additional paid-in capital

  

257,180

  

251,988

 

   Other stockholders' equity

  

89,191

  

68,532

 

Total stockholders' equity

  

346,374

  

320,523

 
        

Total liabilities and stockholders' equity

 

$

455,995

 

$

474,724

 













Cross Country Healthcare, Inc.

Segment Data (a)(b)

(Unaudited, amounts in thousands)


  

Q1-04

  

Q2-04

 

Q3-04

 

Q4-04

 

FY 2004

 
                  

Revenues:

   

  

   

   

   

  

   

  

   

   

   Healthcare staffing

 

$

159,130

  

$

153,187

 

$

151,684

 

$

148,075

 

$

612,076

 

   Other human capital management services

  

9,737

   

10,608

  

10,278

  

11,412

  

42,035

 
  

$

168,867

  

$

163,795

 

$

161,962

 

$

159,487

 

$

654,111

 
                  

Contribution income (c):

                 

   Healthcare staffing

 

$

15,736

  

$

15,184

 

$

15,482

 

$

15,633

 

$

62,035

 

   Other human capital management services

  

1,408

   

1,928

  

1,372

  

2,382

  

7,090

 
   

17,144

   

17,112

  

16,854

  

18,015

  

69,125

 
                  

   Unallocated corporate overhead

  

5,963

   

6,294

  

5,993

  

6,827

  

25,077

 

   Depreciation

  

1,556

   

1,318

  

993

  

1,273

  

5,140

 

   Amortization

  

673

   

507

  

507

  

658

  

2,345

 

   Interest expense, net

  

1,245

   

1,006

  

959

  

815

  

4,025

 

   Income from continuing operations before
income taxes

 

$

7,707

  

$

7,987

 

$

8,402

 

$

8,442

 

$

32,538

 
                  
  

Q1-03

  

Q2-03

 

Q3-03

 

Q4-03

 

FY 2003

 
                  

Revenues:

   

  

   

   

   

  

   

  

   

   

   Healthcare staffing

 

$

148,243

  

$

153,483

 

$

172,516

 

$

162,493

 

$

636,735

 

   Other human capital management services

  

8,802

   

8,629

  

8,606

  

10,330

  

36,367

 
  

$

157,045

  

$

162,112

 

$

181,122

 

$

172,823

 

$

673,102

 
                  

Contribution income (c):

                 

   Healthcare staffing

 

$

18,902

  

$

19,527

 

$

20,504

 

$

17,001

 

$

75,934

 

   Other human capital management services

  

1,132

   

944

  

831

  

1,854

  

4,761

 
   

20,034

   

20,471

  

21,335

  

18,855

  

80,695

 
                  

   Unallocated corporate overhead

  

5,820

   

6,150

  

6,243

  

6,306

  

24,519

 

   Depreciation

  

1,024

   

994

  

1,192

  

1,161

  

4,371

 

   Amortization

  

727

   

799

  

972

  

972

  

3,470

 

   Non-recurring secondary offering costs

  

   

16

  

  

  

16

 

   Loss on early extinguishment of debt

  

   

960

  

  

  

960

 

   Interest expense, net

  

584

   

654

  

1,571

  

1,508

  

4,317

 

   Income from continuing operations before
income taxes

 

$

11,879

  

$

10,898

 

$

11,357

 

$

8,908

 

$

43,042

 










Cross Country Healthcare, Inc.

Financial Statistics

(Unaudited)


                  
 

Three Months Ended

December 31,

    

Twelve Months Ended

December 31,

   
 

2004

 

2003

    

2004

 

2003

   
                  

Net cash provided by operating activities (in thousands)

$

6,284

 

$

8,629

    

$

43,268

 

$

51,799

   

FTEs (d)

 

5,561

  

6,022

     

5,756

  

5,917

   

Weeks worked (e)

 

72,293

  

78,286

     

299,312

  

307,684

   

Average healthcare staffing revenue per FTE per week (f)

$

2,048

 

$

2,076

    

$

2,045

 

$

2,069

   

—————

(a)

Segment data provided is in accordance with FASB Statement 131.  

(b)  

Reclassifed to conform to current year's presentation. Cross Country Consulting, Inc., which was previously included in other human capital management services, has been reclassified and included in discontinued operations for all periods presented.

(c)

Defined as income from continuing operations before interest, income taxes, depreciation, amortization and corporate expenses not specifically identified to a reporting segment. Contribution income is a financial measure used by management when assessing segment performance.

(d)

FTEs represent the average number of contract staffing personnel on a full-time equivalent basis.

(e)

Weeks worked is calculated by multiplying the FTEs by the number of weeks during the respective period.

(f)

Average healthcare staffing revenue per FTE per week is calculated by dividing the healthcare staffing revenue by the number of weeks worked in the respective periods. Healthcare staffing revenue includes revenue from permanent placement of nurses.