DALLAS, Aug. 10 /PRNewswire-FirstCall/ -- Crdentia Corp. (BULLETIN BOARD: CRDE) , a leading U.S. provider of healthcare staffing services, today announced its long-term strategic expansion plan, including its acquisition strategy and competitive differentiation in the medical staffing marketplace. The announcement corresponds to the Company's efforts to move its common stock listing to the American Stock Exchange (Amex) later this year.
Crdentia's business model addresses the growing shortage of qualified nurses nationwide through the development of a national network providing temporary medical staffing services to hospitals, clinics and for private, in home care. A healthcare staffing consolidator, Crdentia targets privately held companies that need alternative access to capital, improved distribution networks and new products and services to address the industry's shortage of qualified healthcare workers. The Company's multidimensional approach to temporary staffing which includes per diem staffing, travel nursing, international recruitment, contractual and private duty healthcare, differentiates it from other major providers that predominantly specialize in a single area of staffing.
Founded in August 2002 by Chairman and Chief Executive Officer James D. Durham, Crdentia successfully integrated four acquisitions in 2003 and now staffs approximately 250 nurses through five domestic offices and one office in the Philippines. Crdentia already ranks among the 10 largest healthcare staffing providers in the U.S. market.
"The vast $12 billion temporary medical staffing industry is highly fragmented and prime for consolidation," said James D. Durham, CEO and Chairman of Crdentia. "The ten largest healthcare staffing firms account for less than 25% of projected industry revenue while the remaining firms are primarily local and small regional operations. These thousands of small existing medical staffing agencies throughout the U.S. are restricted from maximizing potential growth due to relatively small capitalizations.
"Our objective is to consolidate many of the industry's premium private companies into our larger public entity, thereby increasing the number of qualified nurses and licensed professional staff to serve our diversified client base. Our multidimensional approach emphasizes product line multiplicity, clearly differentiating Crdentia at both the local and national level," Durham explained.
Acquisition Strategy and Business Model
Crdentia's consolidation strategy to fund new growth and product expansion for acquired companies capitalizes on immense market opportunity within the medical staffing industry. With an anticipated annual growth of 15% to 20%, the projected market size for temporary medical staffing will be approximately $46 billion by 2010 according to Health Resources and Services Administration of the U.S. Department of Health and Human Services. Meanwhile, there is a shrinking supply of qualified nurses and healthcare workers. A recent study in The Journal of the American Medical Association indicates that by 2020 the nation's registered workforce will be nearly 20% below projected requirements.
Crdentia plans to grow its business by targeting acquisitions of well-run agencies with established customer bases in strategic markets nationwide. Crdentia's unique business model incorporates a combination of per diem staffing, travel nursing and private duty home care to capitalize on the operational and top line synergies of the various staffing models while also broadening the universe of potential acquisitions. After acquiring a base of operations (per-diem registry or a specialized staffing firm) in a given market, Crdentia augments local staff with the addition of travel nurses and foreign recruits, and provides additional services through its other divisions. This strategy is aimed at building the Company's available supply of nurses and other licensed personnel to service its diversified client base in its target markets. Organic growth through acquisition is accelerated through the deployment of additional products and services such as private duty home care in an acquired operating market.
"Today's immense healthcare staffing market provides a vast universe of potential acquisition targets for the right buyer," said Pamela Atherton, President of Crdentia. "We are just the right size and have sufficient resources to facilitate successful acquisitions and integrations that will create value for our shareholders. Nearly all of the players in the healthcare staffing arena are either too large for such transactions to be efficient and materially beneficial, or too small in terms of the bandwidth and capital required to effect an acquisition. Therefore, competition from other industry consolidators is minimal."
Atherton noted that Crdentia's typical acquisition candidate is characterized by the following primary criteria:
* Annual revenues of $5 to $10 million
* Geographic focus -- serving large, metropolitan markets with critical
masses of temporary medical staff and affluent, aging populations with
strong demand for healthcare services
* Single, specialized staffing service focus -- proven expertise in
select staffing segments
* Strong market reputation and leadership -- stable, proven management
* Substantial contract base -- minimum of 50% of revenue from strong
hospital client base
* Transaction immediately accretive
Operational Objectives and Successful Track Record
Through its successful integration of four acquisitions in 2003, Crdentia currently provides healthcare staffing in 27 states and has contracts with approximately 350 healthcare facility clients. Based primarily on favorable recent trends including an increasing number of travel nurses under contract with Crdentia and an increasing number of hospital contracts, the Company expects that significant improvements in monthly cash flow will drive positive cash flow from operations during the second half of 2004.
Additional operational objectives for Crdentia include:
* Aggressive new business development -- Quarterly net increases in both
healthcare facility and private duty contracts.
* Geographic expansion -- Service contracts in 40 states by year-end
through ongoing acquisition strategy.
* High level of staff retention -- Quarterly net increases in qualified
nurses and licensed medical staff on contract.
* Improving operating performance -- Leverage existing infrastructure
over a greater asset base to enhance profitability.
"The compelling supply and demand dynamics in the healthcare staffing marketplace strongly substantiate both our acquisition strategy and our diversified services approach. Our healthcare clients can achieve 'one-stop shopping' for qualified staffers, and our employees, who we view as our ultimate customers, benefit from a variety of temporary assignment options. From a competitive standpoint, our unconventional business model not only exploits the nation's shortage of skilled staff, but also drives increased loyalty among our contracted nurses through flexibility of choice and highly competitive benefits," Atherton concluded.
More information about Crdentia's business opportunity is available on the Company's web site http://www.crdentia.com/ under 'Investor Relations.'
About Crdentia Corp.
Crdentia Corp. is one of the nation's leading providers of healthcare staffing services. Crdentia seeks to capitalize on an opportunity that currently exists in the healthcare industry by targeting the critical nursing shortage issue. There are many small, private companies that are addressing the rapidly expanding needs of the healthcare industry. Unfortunately, due to their relatively small capitalization, they are unable to maximize their potential, obtain outside capital or expand. By consolidating well-run small private companies into a larger public entity, Crdentia intends to facilitate access to capital, the acquisition of technology, and expanded distribution that, in turn, drive internal growth. For more information, visit http://www.crdentia.com/.
Forward Looking Statements
Statements contained in this release that are not historical facts are forward-looking statements that involve risks and uncertainties. Among the important factors which could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, those discussed in "Risk Factors" in the Company's Forms 10-KSB, Forms 10-QSB, and other filings with the Securities and Exchange Commission. Such risk factors include, but are not limited to, a limited operating history with no earnings; reliance on the Company's management team, members of which have other business interests; the ability to successfully implement the Company's business plan; the ability to continue as a going concern; the ability to fund the Company's business and acquisition strategy; the growth of the temporary healthcare professional staffing business; difficulty in managing operations of acquired businesses; uncertainty in government regulation of the healthcare industry; and the limited public market for the Company's common stock. The actual results that the Company achieves may differ materially from any forward-looking statements due to such risks and uncertainties. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.
For further information, please contact: James D. Durham, CEO and Chairman, or Pamela Atherton, President, both of Crdentia Corp., +1-972-850-0780; or Moira Conlon of Financial Relations Board, +1-310-407-6524, mconlon@financialrelationsboard.com, for Crdentia Corp.
Crdentia Corp.CONTACT: James D. Durham, CEO and Chairman, or Pamela Atherton,President, both of Crdentia Corp., +1-972-850-0780; or Moira Conlon ofFinancial Relations Board, +1-310-407-6524,mconlon@financialrelationsboard.com, for Crdentia Corp.
Web site: http://www.crdentia.com/
