AMN Healthcare Announces Second Quarter 2018 Results

Published: Aug 02, 2018

 

Quarterly revenue of $558 million, up 14% over prior year; GAAP EPS of $0.73 and adjusted EPS of $0.83

SAN DIEGO, Aug. 2, 2018 /PRNewswire/ -- AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in healthcare workforce solutions and staffing services, today announced its second quarter 2018 financial results. Financial highlights are as follows:

Dollars in millions, except per share amounts.

                      Q2 2018        % Change     YTD June             % Change
                                     Q2 2017               30, 2018   YTD  June
                                                                                30, 2017
                                                                                --------

    Revenue                   $558.1          14%           $1,080.6                   10%
    -------                   ------          ---            --------                   ---

    Gross profit              $181.0          12%             $348.8                    8%
    ------------              ------          ---              ------                   ---

    Net income                 $35.5          14%              $78.2                   24%
    ----------                 -----          ---               -----                   ---

    Diluted EPS                $0.73          16%              $1.60                   25%
    -----------                -----          ---               -----                   ---

    Adj. diluted EPS*          $0.83          24%              $1.64                   26%
    ----------------           -----          ---               -----                   ---

    Adjusted EBITDA*           $70.1           4%             $136.6                    5%
    ---------------            -----          ---              ------                   ---
    *  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

  • AMN Healthcare reached record highs for revenue and adjusted EPS in the quarter.
  • Second quarter consolidated revenue of $558 million increased 14% year over year, with organic growth of 7%.
  • Growth was led by our Nurse and Allied Solutions segment with revenue up by 11% year over year.
  • Adjusted EBITDA of $70 million grew 4% year over year and was 12.6% of revenue.
  • Operating cash flow in the second quarter was $66 million. In the first half of 2018, cash flow from operations totaled $126 million, up 80% year over year.
  • The April acquisitions of MedPartners, Phillips DiPisa and Leaders For Today contributed $36 million of revenue in the quarter.

"Solid execution in the second quarter enabled AMN to reach all-time highs in revenue and adjusted EBITDA. We continue to expand and add new MSP clients and have a strong pipeline," said Susan R. Salka, Chief Executive Officer of AMN Healthcare. "Our team delivered well for Nurse and Allied clients, with strong fill rates amid a relatively tepid demand environment and pricing headwinds. Solid performance in several of our businesses is being offset by a decline in Locum Tenens, where we continue to see below-market performance due to the disruption from business model and technology changes made earlier this year. Our recent acquisitions are integrating with the AMN family and are off to a good start. The primary macro drivers of our industry appear favorable for the foreseeable future, and we remain confident in the long-term growth of AMN."

Second Quarter 2018 Results

Consolidated revenue for the quarter was $558 million, a 14% increase over prior year and 7% higher than prior quarter. Revenue for the Nurse and Allied Solutions segment was $333 million, higher by 11% year over year and down 2% sequentially. The quarter included $25 million of labor disruption revenue. Excluding this event, segment revenue grew 2% year over year and seasonally declined 9% sequentially, in line with expectations. Growth of the Travel Nurse division was in line with expectations with revenue up 2% year over year, driven by a volume increase partly offset by a lower mix of premium-rate assignments. Allied division revenue increased 7% year over year, driven primarily by volume increases.

The Locum Tenens Solutions segment reported revenue of $107 million, down by 1% year over year, with lower volumes being offset by positive pricing. Other Workforce Solutions segment revenue was $118 million reflecting an increase of 46% year over year, with the benefit of acquisitions made in April 2018. Organic growth of 2% year over year was driven by the mid-revenue cycle and interim leadership businesses.

Gross margin was 32.4%, lower by 50 basis points year over year and higher by 30 basis points sequentially. The variances were positively impacted by higher-than-average gross margins from the recently acquired companies and a change in our physician permanent placement business model that prompted a recording of certain recruiter expenses in SG&A that were previously in cost of revenue. These positives were partly offset by a below-average labor disruption gross margin. Net of these factors, our year-over-year gross margin declined primarily due to a lower margin in our Nurse and Allied and Other Workforce Solutions segments.

SG&A expenses were $116 million, or 20.7% of revenue, compared with $97 million, or 19.7% of revenue, in the same quarter last year. SG&A was $105 million, or 20.0% of revenue, in the previous quarter. The increase in expenses and expense margin was impacted by added costs from the recently acquired companies and the physician permanent placement cost change.

Net income was $36 million, or $0.73 per diluted share, compared with $31 million, or $0.63 per diluted share, in the same quarter last year. Adjusted diluted EPS was $0.83. Adjusted EBITDA was $70 million, a year-over-year increase of 4%. Adjusted EBITDA margin was 12.6%, representing a decrease of 110 basis points year over year and a decrease of 10 basis points sequentially.

At June 30, 2018, cash and cash equivalents totaled $23 million. Cash flow from operations was $66 million for the quarter, and capital expenditures were $11 million. AMN repurchased 385,000 shares of stock for $21 million during the quarter. The Company ended the quarter with total debt outstanding of $480 million, with a leverage ratio as calculated in accordance with the Company's credit agreement of 1.7 to 1.

Third Quarter 2018 Outlook

                 Metric            Guidance*
                 ------            --------

          Consolidated revenue             $522 - $530 million
          --------------------             -------------------

              Gross margin                              ~33.0%
              ------------                               -----

     SG&A as percentage of revenue                      ~21.5%
     -----------------------------                       -----

         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.

Projected year-over-year revenue growth in the third quarter of 2018 is approximately 6-7%. On an organic basis, revenue is projected to be down approximately 1% due primarily to disruption in the Locum Tenens business and a mix shift away from premium-rate assignments in Travel Nursing. No significant labor disruption revenue is included in third quarter guidance.

Conference Call on August 2, 2018

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 2018 financial results on Thursday, August 2, 2018, 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/eventcalendar. 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 2, 2018, and can be accessed until 11:59 p.m. Eastern Time on August 16, 2018, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 451076.

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, mid-revenue cycle solutions, 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. AMN Healthcare is committed to fostering and maintaining a diverse team that reflects the communities we serve. Our commitment to the inclusion of many different backgrounds, experiences and perspectives enables our innovation and leadership in the healthcare services industry.

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 guidance for third quarter 2018 revenue, gross margin, SG&A expenses as a percentage of revenue, adjusted EBITDA margin and long-term trends for our business. 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, 2017, 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:
Randle Reece
Director, Investor Relations
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,


                                          2018                       2017                         2018                          2018                  2017
                                          ----                       ----                         ----                          ----                  ----

    Revenue                                       $558,108                                   $489,803                                   $522,489           $1,080,597 $984,972

    Cost of revenue                    377,152                    328,791                      354,665                       731,817               662,184
                                       -------                    -------                      -------                       -------               -------

    Gross profit                       180,956                    161,012                      167,824                       348,780               322,788
                                       -------                    -------                      -------                       -------               -------

    Gross margin                         32.4%                     32.9%                       32.1%                        32.3%                32.8%

    Operating expenses:

    Selling, general and
     administrative (SG&A)             115,535                     96,673                      104,737                       220,272               198,746

    SG&A as a % of revenue               20.7%                     19.7%                       20.0%                        20.4%                20.2%


    Depreciation and
     amortization                       10,606                      7,959                        7,886                        18,492                15,627
                                        ------                      -----                        -----                        ------                ------

    Total operating
     expenses                          126,141                    104,632                      112,623                       238,764               214,373
                                       -------                    -------                      -------                       -------               -------

    Income from operations              54,815                     56,380                       55,201                       110,016               108,415

    Operating margin (1)                  9.8%                     11.5%                       10.6%                        10.2%                11.0%


    Interest expense, net,
     and other                           6,376                      4,928                        5,335                        11,711                10,058
                                         -----                      -----                        -----                        ------                ------


    Income before income
     taxes                              48,439                     51,452                       49,866                        98,305                98,357


    Income tax expense                  12,910                     20,197                        7,185                        20,095                35,094

    Net income                                     $35,529                                    $31,255                                    $42,681              $78,210  $63,263
                                                   =======                                    =======                                    =======              =======  =======

    Net income as a % of
     revenue                              6.4%                      6.4%                        8.2%                         7.2%                 6.4%


    Other comprehensive income (loss):

    Foreign currency
     translation and other                  91                       (41)                        (19)                           72                  (38)

    Cash flow hedge, net of
     income taxes                            -                      (58)                           -                            -                 (15)
                                           ---                       ---                          ---                          ---                  ---

    Other comprehensive
     income (loss)                          91                       (99)                        (19)                           72                  (53)


    Comprehensive income                           $35,620                                    $31,156                                    $42,662              $78,282  $63,210
                                                   =======                                    =======                                    =======              =======  =======


    Net income per common share:

    Basic                                            $0.75                                      $0.65                                      $0.89                $1.64    $1.32
                                                     =====                                      =====                                      =====                =====    =====

    Diluted                                          $0.73                                      $0.63                                      $0.87                $1.60    $1.28
                                                     =====                                      =====                                      =====                =====    =====

    Weighted average common shares
     outstanding:

    Basic                               47,653                     47,916                       47,733                        47,693                47,849
                                        ======                     ======                       ======                        ======                ======

    Diluted                             48,936                     49,475                       49,116                        49,026                49,498
                                        ======                     ======                       ======                        ======                ======

 

                                                                                                               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,


                                                2018                         2017                 2018                                              2018                  2017
                                                ----                         ----                 ----                                              ----                  ----

    Revenue

    Nurse and allied
     solutions                                $332,728                                         $300,727                                                         $338,179                     $670,907 $614,250

    Locum tenens solutions            107,297                               108,215                                    103,117                                    210,414          211,058

    Other workforce
     solutions                        118,083                                80,861                                     81,193                                    199,276          159,664
                                      -------                                ------                                     ------                                    -------          -------

                                              $558,108                                         $489,803                                                         $522,489                   $1,080,597 $984,972
                                              ========                                         ========                                                         ========                   ========== ========


    Reconciliation of Non-GAAP Items:


    Segment operating income (2)

    Nurse and allied
     solutions                                 $43,936                                          $47,851                                                          $51,805                      $95,741  $93,831

    Locum tenens solutions             13,371                                12,371                                      9,958                                     23,329           24,590

    Other workforce
     solutions                         28,576                                22,041                                     19,851                                     48,427           41,898
                                       ------                                ------                                     ------                                     ------           ------

                                       85,883                                82,263                                     81,614                                    167,497          160,319

    Unallocated corporate
     overhead                          15,823                                15,080                                     15,095                                     30,918           29,971
                                       ------                                ------                                     ------                                     ------           ------

    Adjusted EBITDA (3)                70,060                                67,183                                     66,519                                    136,579          130,348

    Adjusted EBITDA margin
     (4)                               12.6%                                13.7%                                     12.7%                                     12.6%           13.2%


    Depreciation and
     amortization                      10,606                                 7,959                                      7,886                                     18,492           15,627

    Share-based
     compensation                       3,281                                 2,562                                      2,864                                      6,145            5,243

    Acquisition and
     integration costs                  1,358                                   282                                        568                                      1,926            1,063
                                        -----                                   ---                                        ---                                      -----            -----

    Income from operations             54,815                                56,380                                     55,201                                    110,016          108,415

    Interest expense, net,
     and other                          6,376                                 4,928                                      5,335                                     11,711           10,058
                                        -----                                 -----                                      -----                                     ------           ------

    Income before income
     taxes                             48,439                                51,452                                     49,866                                     98,305           98,357

    Income tax expense                 12,910                                20,197                                      7,185                                     20,095           35,094

    Net Income                                 $35,529                                          $31,255                                                          $42,681                      $78,210  $63,263
                                               =======                                          =======                                                          =======                      =======  =======


    GAAP diluted net
     income per share
     (EPS)                                       $0.73                                            $0.63                                                            $0.87                        $1.60    $1.28

    Adjustments:

    Amortization of
     intangible assets                   0.13                                  0.09                                       0.09                                       0.22             0.19

    Acquisition and
     integration costs                   0.02                                  0.01                                       0.01                                       0.03             0.02

    Debit financing
     related costs                          -                                    -                                      0.01                                       0.01                -

    Tax effect on above
     adjustments                       (0.04)                               (0.04)                                    (0.03)                                    (0.07)          (0.08)

    Tax correction related
     to prior periods (5)                   -                                    -                                    (0.05)                                    (0.05)               -

    Excess tax benefits
     (6)                              (0.01)                               (0.02)                                    (0.09)                                    (0.10)          (0.11)

    Adjusted diluted EPS
     (7)                                        $0.83                                            $0.67                                                            $0.81                        $1.64    $1.30
                                                 =====                                            =====                                                            =====                        =====    =====

 

                                           Three Months Ended                                   Six Months Ended
                                                                                                ----------------

                                  June 30,                       March 31,                 June 30,
                                                                 ---------

                             2018                 2017                  2018            2018                   2017
                             ----                 ----                  ----            ----                   ----

    Gross Margin

    Nurse and allied
     solutions              26.3%                         27.8%                     28.0%                           27.2%    27.7%

    Locum tenens solutions  29.8%                         30.0%                     28.7%                           29.2%    30.3%

    Other workforce
     solutions              52.2%                         55.7%                     53.6%                           52.7%    55.3%



    Operating Data:
    ---------------

    Nurse and allied
     solutions

    Average healthcare      9,095                          8,776                      9,567                            9,331     8,913
    professionals on
     assignment (8)


    Locum tenens solutions

    Days filled (9)        55,225                         58,660                     52,794                          108,020   113,903

    Revenue per day filled
     (10)                         $1,943                                     $1,845                                 $1,953             $1,948 $1,853

 

                        As of June 30,      As of March 31,
                                            ---------------

                        2018           2017             2018
                        ----           ----             ----

    Leverage ratio (11)  1.7                  1.4            1.2

 

                                                          AMN Healthcare Services, Inc.

                                                      Condensed Consolidated Balance Sheets

                                                             (dollars in thousands)

                                                                   (unaudited)


                                                                 June 30,                   December 31,     June 30,
                                                                      2018                           2017        2017
                                                                      ----                           ----        ----

    Assets

    Current assets:

    Cash and cash equivalents                                                   $22,894                        $15,147            $22,878

    Accounts receivable, net                                       354,781                          350,496            334,597

    Accounts receivable, subcontractor                              34,657                           41,012             36,631

    Prepaid and other current assets                                56,189                           67,498             46,938
                                                                    ------                           ------             ------

    Total current assets                                           468,521                          474,153            441,044

    Restricted cash, cash equivalents and investments               61,839                           64,315             33,882

    Fixed assets, net                                               81,221                           73,431             65,368

    Other assets                                                    83,034                           74,366             71,594

    Goodwill                                                       439,134                          340,596            340,596

    Intangible assets, net                                         339,514                          227,096            236,486
                                                                   -------                          -------            -------

    Total assets                                                             $1,473,263                     $1,253,957         $1,188,970
                                                                             ==========                     ==========         ==========


    Liabilities and stockholders' equity

    Current liabilities:

    Accounts payable and accrued expenses                                      $123,105                       $130,319           $118,943

    Accrued compensation and benefits                              130,258                          121,423            107,283

    Current portion of notes payable                                     -                             -     18,071

    Deferred revenue                                                13,615                            8,384              9,644

    Other current liabilities                                       16,261                            5,146             12,387
                                                                    ------                            -----             ------

    Total current liabilities                                      283,239                          265,272            266,328


    Revolving credit facility                                      155,000                                -                 -

    Notes payable, less unamortized fees                           320,225                          319,843            319,462

    Deferred income taxes, net                                      19,863                           27,036             12,387

    Other long-term liabilities                                     78,192                           79,279             82,301
                                                                    ------                           ------             ------

    Total liabilities                                              856,519                          691,430            680,478
                                                                   -------                          -------            -------


    Commitments and contingencies


    Stockholders' equity:                                          616,744                          562,527            508,492
                                                                   -------                          -------            -------


    Total liabilities and stockholders' equity                               $1,473,263                     $1,253,957         $1,188,970
                                                                             ==========                     ==========         ==========

 

                                                                                     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,


                         2018               2017(12)                      2018                    2018                  2017(12)
                         ----                -------                      ----                    ----                   -------


    Net cash
     provided by
     operating
     activities                   $66,203                                        $25,359                                           $59,735              $125,938 $70,043

    Net cash used
     in investing
     activities     (229,337)                           (6,316)                             (9,613)                            (238,950)    (19,616)

    Net cash
     provided by
     (used in)
     financing
     activities       133,627                           (26,945)                            (14,970)                              118,657    (38,873)

    Effect of
     exchange rates
     on cash               91                               (42)                                (19)                                   72        (38)
                          ---                                ---                                  ---                                   ---         ---

    Net increase
     (decrease) in
     cash, cash
     equivalents
     and restricted
     cash            (29,416)                           (7,944)                              35,133                                 5,717      11,516

    Cash, cash
     equivalents
     and restricted
     cash at
     beginning of
     period           134,027                             70,488                               98,894                                98,894      51,028

    Cash, cash
     equivalents
     and restricted
     cash at end of
     period                      $104,611                                        $62,544                                          $134,027              $104,611 $62,544
                                 ========                                        =======                                          ========              ======== =======

 

                                                 AMN Healthcare Services, Inc.

                                          Additional Supplemental Non-GAAP Disclosures

                                      Reconciliation of Guidance Adjusted EBITDA Margin to

                                                   Guidance Operating Margin

                                                          (unaudited)


                                                                                           Three Months Ended
                                                                                           ------------------

                                                                                           September 30, 2018
                                                                                           ------------------


    Adjusted EBITDA margin(13)                                                                                12.5%

    Deduct:

    Share-based compensation                                                                                   0.6%

    Acquisition and integration costs                                                                          0.2%
                                                                                                                ---

    EBITDA margin                                                                                             11.7%

    Depreciation and amortization                                                                              2.1%

    Operating margin                                                                                           9.6%
                                                                                                                ===
    (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)                 During the first quarter of 2018, the
                        Company recorded a net tax benefit of
                        $2,501,000 to adjust for an immaterial
                        out-of-period error identified this
                        quarter related to the income tax
                        treatment of fair value changes in the
                        cash surrender value of its Company
                        Owned Life Insurance for years ended
                        December 31, 2015 through December 31,
                        2017. These fair value changes had not
                        previously been included as a benefit
                        in the tax provision of the related
                        years.

    (6)                 The consolidated effective tax rate for
                        the three and six months ended June 30,
                        2018 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 $576,000 and
                        $1,028,000 for the three months ended
                        June 30, 2018 and 2017, respectively.
                        For the six months ended June 30, 2018
                        and 2017, excess tax benefits recorded
                        as a reduction of income tax expense
                        were $5,094,000 and $5,325,000,
                        respectively. 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 months and six months ended June
                        30, 2018 and 2017.

    (7)                 Adjusted diluted EPS represents GAAP
                        diluted EPS excluding the impact of the
                        (A) amortization of intangible assets,
                        (B) acquisition and integration costs,
                        (C) deferred financing costs, (D) tax
                        effect, if any, of the foregoing
                        adjustments, (E) excess tax benefits
                        relating to equity awards vested and
                        exercised since January 1, 2017, and
                        (F) correction of prior periods error.
                        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.

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

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

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

    (11)                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.

    (12)                As a result of the adoption of ASU
                        2016-18, "Statement of Cash Flows
                        (Topic 230): Restricted Cash" on
                        January 1, 2018, we are required to
                        present in the statement of cash flows
                        the change during the period in the
                        total of cash, cash equivalents, and
                        amounts generally described as
                        restricted cash or restricted cash
                        equivalents. We adjusted certain
                        restricted cash amounts for the three
                        and six months ended June 30, 2017 in
                        the cash flow table presented above.
                        These adjustments had no effect on
                        previously reported results of
                        operations or retained earnings.

    (13)                Guidance percentage metrics are
                        approximate.

 

View original content:http://www.prnewswire.com/news-releases/amn-healthcare-announces-second-quarter-2018-results-300691389.html

SOURCE AMN Healthcare Services, Inc.

Company Codes: NYSE:AMN

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