Exhibit 99.1
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[GRAPHIC OMITTED]
Contact: Robert J. Adamson
President and Chief Executive Officer
(561) 322-1303
MEDICAL STAFFING NETWORK HOLDINGS ANNOUNCES
RECORD REVENUES FOR FOURTH QUARTER,
GROWTH OF 45% OVER PRIOR YEAR QUARTER
_____________________________________
Issues Revenue Guidance For Q1 2003 Up 38% To 42% Over Prior Year Quarter
Boca Raton, Fla. (February 18, 2003) - Medical Staffing Network Holdings, Inc.
(NYSE: MRN), a leading medical staffing company and the largest provider of per
diem nurse staffing services in the nation, today reported record revenues of
$137.2 million for the fourth quarter of 2002, which is an increase of 44.6%
over revenues of $94.9 million for the fourth quarter of 2001. Net income
increased to $3.9 million, or $0.13 per diluted share, for the fourth quarter of
2002 compared with a net loss attributable to common stockholders of $8.8
million, or $4.09 per diluted share, for the prior year fourth quarter.
Excluding the previously announced $3.8 million pretax charge recorded in the
quarter relating to a client bankruptcy, net income for the fourth quarter of
2002 increased to $6.2 million, or $0.20 per diluted share. Excluding charges in
2001 related to the Company's recapitalization and early extinguishment of debt,
both of which occurred in the fourth quarter, and the pro forma effect of the
cessation of amortizing certain goodwill and intangibles as if the Company had
adopted the provisions of Statement of Financial Accounting Standards No. 142 in
2001, the Company had net income of $2.1 million, or $0.09 per diluted share,
for the fourth quarter of 2001 (see accompanying table). The adjusted net income
and per share amounts (non-GAAP measures) have been provided because the Company
believes they offer a meaningful comparison of operating performance between
periods. Earnings before interest, taxes, depreciation, amortization,
refinancing costs and non-recurring recapitalization expenses (EBITDA, a
non-GAAP measure) increased to $9.2 million for the fourth quarter of 2002 from
$8.6 million for the fourth quarter of 2001. Excluding the $3.8 million charge,
fourth quarter 2002 EBITDA was $12.9 million. The Company believes that EBITDA
is a useful supplement to net income (loss) as an indication of operating
performance. However, it should not be considered in isolation or as a
substitute for measures of performance in accordance with accounting principles
generally accepted in the United States.
Robert J. Adamson, president and chief executive officer of Medical Staffing
Network Holdings, commented, "We are pleased to report record revenues for the
fourth quarter of 2002 and a 41% increase in full year 2002 revenues over 2001.
Of particular note is the fact that over 80% of our year-over-year revenue
growth came from organic sources. Our growth has been driven by our continued
consolidation of market share in the highly fragmented $5 billion nurse per diem
industry together with our successful diversification into allied healthcare
staffing specialties. Medical Staffing Network Holdings is the largest provider
in the nurse per diem industry and has significant long-term growth
opportunities as it continues to aggregate market share. Based on our success to
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MRN Announces Record Revenues for Fourth Quarter
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February 18, 2003
date with our de novo and product line diversification programs, the Company
further expanded its organic growth initiatives in the second half of 2002. We
made significant investments in our travel nurse division, allied
branch-in-branch program as well as rolling out new product specialties within
our core allied healthcare staffing division. As a result of this investment,
revenue from our branch-in-branch operations almost tripled in the fourth
quarter of 2002 as compared with the fourth quarter of 2001, and fourth quarter
2002 revenue for our travel nursing division is up over 50% over last year's
fourth quarter.
"Consistent with our previous organic growth initiatives, particularly our
highly successful de novo program, these programs result in near-term dilution
of earnings but provide the Company with the capacity to sustain an above market
growth rate. The outcome of our successes in consolidating per diem market share
and diversifying our product lines short term is reflected in our guidance for
revenues for the first quarter of 2003, representing a year-over-year increase
of 38% to 42%. We believe this growth rate is the strongest in our industry. We
continue to believe that the $5 billion per diem nurse market provides the best
long-term growth opportunity within the overall healthcare staffing industry.
"While reviewing the various growth opportunities available to the Company, we
have recently made the decision to discontinue our physician staffing operation,
which contributed less than 1% of our company-wide revenues and did not offer us
a meaningful organic growth opportunity. The costs associated with the closure
of this service line have been reflected in our first quarters' earnings
guidance."
Gross profit increased 42.3% for the fourth quarter of 2002 over the same period
in 2001 as a result of the growth in revenues. The gross margin of 24.7% for the
fourth quarter of 2002 decreased slightly from the gross margin of 25.1% for the
fourth quarter of 2001. The decrease is attributable to the impact of recent
acquisitions and an increasing percentage of revenues being contributed by
nursing operations, which operate at a lower gross margin percentage than our
allied business lines.
Selling, general and administrative expenses (including provision for doubtful
accounts) increased to 16.6% of revenues in the fourth quarter of 2002 from
14.3% for the fourth quarter of 2001, due to the aforementioned $3.8 million
charge taken by the Company in the fourth quarter of 2002. Excluding the charge,
selling, general and administrative expenses decreased to 13.8% of revenues,
primarily as a result of the maturation of the Company's 2001 de novo branches.
In addition, corporate and administrative expenses declined to 1.4% of revenues
for the fourth quarter of 2002 compared with 1.7% for the prior year quarter, as
the Company continued to leverage its operating expenses.
For the year ended December 29, 2002, revenues increased 41.0% to $483.5 million
from $343.0 million for the year ended December 30, 2001. Net income increased
in 2002 to $17.9 million, or $0.62 per diluted share, from a net loss
attributable to common stockholders of $3.1 million, or $0.49 per diluted share,
in 2001. Excluding the $3.8 million pretax charge, net income for 2002 increased
to $20.1 million, or $0.70 per diluted share. In 2001, excluding the
aforementioned special charges, the Company would have had net income of $9.4
million, or $0.34 per diluted share. EBITDA increased 30.7% to $42.4 million in
2002 from $32.4 million in the prior year. Excluding the $3.8 million charge,
full year 2002 EBITDA was $46.2 million.
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MRN Announces Record Revenues for Fourth Quarter
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February 18, 2003
Gross profit increased 40.8% for the year ended December 29, 2002, over the same
period in 2001, primarily due to the growth in revenues. The gross margin
decreased slightly to 25.1% for the year ended December 29, 2002, from 25.2% for
the year ended December 30, 2001.
Selling, general and administrative expenses (including provision for doubtful
accounts) increased to 14.8% of revenues for the year ended December 29, 2002
from 13.8% for the same period of 2001, reflecting the Company's significant
investment in its de novo program and the aforementioned charge taken by the
Company in the fourth quarter of 2002. Excluding the charge, selling, general
and administrative expenses were 14.0% of revenues for the year ended December
29, 2002. Corporate and administrative expenses declined to 1.5% of revenues for
the year ended December 29, 2002 from 1.9% for the same period of 2001.
Business Development Initiatives
In addition to the four previously disclosed acquisitions completed in the first
three quarters of 2002, the Company completed the acquisition of the assets of
each of Clinical Resource Services, Inc. and Health Search International, Inc.
(two companies under common ownership, collectively CRS/HSI)), B&G Nurse
Registry, Inc. (B&G) and Travel Nurse International (TNI) in the fourth quarter
of 2002. Each company is a provider of temporary healthcare staffing services.
The acquisition of these companies is consistent with the Company's strategy to
expand its product offerings and market share. CRS/HSI, B&G and TNI are expected
to collectively generate annual revenues of over $45 million in 2003.
Medical Staffing Network opened 10 de novo offices during the fourth quarter of
2002. The new office additions bring the total new office openings to 40 for the
year. "We successfully achieved our target of opening 40 new per diem locations
during 2002. These offices are projected to contribute significantly to our 2003
organic growth. In addition, the Company successfully opened 19 allied
branch-in-branch operations and further expanded the range of services offered
by its allied staffing group," commented Adamson.
2003 Earnings Guidance
For 2003, the Company expects full year net income per diluted share to be $0.91
to $0.93 on an increase in revenues of 28% to 30% to $620 to $630 million. The
Company current plans to open 20 new de novo branches and add 40 to 45 allied
branch-in-branch operations during 2003.
For the first quarter of 2003, the Company expects revenues to increase 38% to
42% to $142 to $147 million and expects to generate $0.17 to $0.18 per diluted
share, an increase of 30% to 38% over the same period in 2002.
Commented Adamson, "The growth outlined in our 2003 earnings guidance is the
result of our continued commitment to investment in multiple growth initiatives.
Our guidance for revenues for the first quarter of 2003 represents a
year-over-year increase of 38% to 42%, or 4% to 7% sequentially. Our first
quarter guidance of $0.17 to $0.18 per diluted share, while a 30% to 38%
increase over the same period in the prior year, is a sequential quarter decline
from earnings per share of $0.20 (before the charge, as the Company believes
this is a more useful measure of quarter-over-
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February 18, 2003
quarter performance) in the fourth quarter of 2002 and is reflective of the
near-term dilution from our new growth initiatives discussed above and the costs
associated with the closure of our physician staffing business unit. Medical
Staffing Network Holdings has had favorable experience from investing in growth
opportunities, and, while we regret the near-term dilutive impact on earnings
from these initiatives, our experience suggests that the return, in the form of
higher than market growth rates, is an excellent outcome."
Conference Call
The Company's management will host a conference call and webcast to discuss the
earnings release at 11:00 a.m. Eastern time on Wednesday, February 19, 2003. A
live webcast, as well as a 30-day replay, of the conference call will be
available online at the Company's website at www.msnhealth.com or at
www.companyboardroom.com.
Company Summary
Medical Staffing Network Holdings, Inc. is the largest provider of per diem
nurse staffing services in the United States. The Company owns and operates the
country's most extensive network of healthcare staffing branches consisting of
over 180 offices in 44 states. The Company also provides travel nurse staffing
services and is a leading provider of allied health professionals, including
radiology specialists, diagnostic imaging technicians and clinical laboratory
technicians.
This release contains statements that are forward-looking in nature. 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 the following: our ability to
attract and retain qualified nurses and other healthcare personnel, the
company's ability to enter into contracts with healthcare facility clients on
terms attractive to the company, 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, the effect of liabilities and other claims asserted
against us, the effect of competition in the markets we serve, the company's
ability to carry out its business strategy. Additional information concerning
these and other important factors can be found within the company's filings with
the Securities and Exchange Commission. Statements in this release should be
evaluated in light of these important factors. 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.
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MRN Announces Record Revenues for Fourth Quarter
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February 18, 2003
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended Year Ended
------------------ -------------------
Dec. 29, Dec. 30, Dec. 29, Dec. 30,
2002 2001 2002 2001
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(unaudited)
Service revenues $ 137,248 $ 94,926 $ 483,509 $ 342,958
Cost of services rendered 103,338 71,089 361,998 256,667
--------- -------- --------- ----------
Gross profit 33,910 23,837 121,511 86,291
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Operating expenses:
Selling, general and administrative 18,916 13,056 65,336 45,633
Provision for doubtful accounts 3,862 547 6,368 1,782
Corporate and administrative 1,966 1,584 7,386 6,428
Recapitalization transaction fees - 6,840 - 7,160
Loss on early extinguishment of debt - 4,380 - 4,380
Depreciation 1,245 644 4,145 2,139
Amortization 131 1,082 343 3,732
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Total operating expenses 26,120 28,133 83,578 71,254
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Income (loss) from operations 7,790 (4,296) 37,933 15,037
Interest expense, net 1,136 4,407 7,603 14,312
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Income (loss) before income taxes 6,654 (8,703) 30,330 725
Income tax expense (benefit) 2,728 (1,740) 12,436 2,031
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Net income (loss) 3,926 (6,963) 17,894 (1,306)
Dividends on convertible preferred
stock - 1,804 3,099 1,804
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Income (loss) available to common
stockholders $ 3,926 $ (8,767) $ 14,795 $ (3,110)
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Net income (loss) per share:
Basic $ 0.13 $ (4.09) $ 0.70 $ (0.49)
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Diluted $ 0.13 $ (4.09) $ 0.62 $ (0.49)
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Weighted average common shares
outstanding:
Basic 30,110 2,143 21,177 6,338
Diluted 31,249 2,143 28,637 6,338
Unaudited Operating Statistics
(in thousands):
Hours worked by healthcare
professionals 3,340 2,736 12,521 10,072
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February 18, 2003
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Adjustments to Net Income (Loss)
(in thousands, except per share data)
Three Months Ended Year Ended
------------------ -------------------
Dec. 29, Dec. 30, Dec. 29, Dec. 30,
2002 2001 2002 2001
-------- -------- -------- --------
(unaudited)
Net income (loss) as reported $ 3,927 $ (6,963) $ 17,894 $ (1,306)
Adjustments to net income (loss):
FAS 142 amortization, net of tax
effect - 638 - 2,245
Recapitalization transaction fees,
net of tax effect - 5,707 - 5,778
Early extinguishment of debt,
net of tax effect - 2,732 - 2,732
Charge related to bankrupt client,
net of tax effect 2,228 - 2,228 -
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Total increase to net income (loss) 2,228 9,077 2,228 10,755
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Net income as adjusted(1) 6,155 2,114 20,122 9,449
Dividends on convertible preferred
stock - 1,804 3,099 1,804
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Income available to common
stockholders $ 6,155 $ 310 $ 17,023 $ 7,645
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Net income per share as adjusted(1):
Basic $ 0.20 $ 0.14 $ 0.80 $ 1.21
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Diluted $ 0.20 $ 0.09 $ 0.70 $ 0.34
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Weighted average common shares
outstanding (as adjusted):
Basic 30,110 2,143 21,177 6,338
Diluted 31,249 23,679 28,637 27,583
(1) The Company believes the adjusted net income and per share amounts
(non-GAAP measures) provide a useful supplement to net income (loss) when
comparing 2002 results with 2001 results due to (i) the adoption of SFAS
No. 142 on December 31, 2001, which ceased the amortization of goodwill and
other intangibles with an indefinite useful live, (ii) the costs associated
with the recapitalization of the Company in 2001, and the early
extinguishment of debt related to such recapitalization, and (iii) the
charge taken in the fourth quarter of 2002 associated with a bankrupt
client. The adjusted net income and per share amounts are not intended to
represent net income for the period, and they should not be considered in
isolation or as a substitute for measures of performance prepared in
accordance with accounting principles generally accepted in the United
States.
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February 18, 2003
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
Dec. 29, Dec. 30,
2002 2001
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ASSETS
Current assets:
Cashand cash equivalents $ 4,595 $ 11,253
Accounts receivable, net 93,780 65,191
Other current assets 10,221 6,047
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Total current assets 108,596 82,491
Furniture, fixtures and office equipment, net 12,643 7,316
Goodwill, net 114,437 66,958
Other assets, net 12,407 5,254
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Total assets $ 248,083 $ 162,019
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 5,149 $ 5,272
Accrued payroll and related liabilities 9,366 8,949
Current portion of long-term debt 8,775 10,035
Other current liabilities 4,160 3,516
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Total current liabilities 27,450 27,772
Long-term debt, net of current portion 69,225 105,000
Senior unsecured debt - 59,319
Other long-term obligations 5,740 3,033
--------- ---------
Total liabilities 102,415 195,124
Redeemable preferred stock - 124,617
Total common stockholders' equity (deficit) 145,668 (157,722)
--------- ---------
Total liabilities, redeemable preferred
stock and stockholders' equity (deficit) $ 248,083 $ 162,019
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