Exhibit 99.1
------------
[GRAPHIC OMITTED]
Contact: Robert J. Adamson
Chairman and Chief Executive Officer
(561) 322-1303
MEDICAL STAFFING NETWORK HOLDINGS ANNOUNCES
THIRD QUARTER 2005 OPERATING RESULTS - SEQUENTIAL REVENUE
GROWTH CONTINUES
----------------
Boca Raton, Fla. (November 3, 2005) - Medical Staffing Network Holdings, Inc.
(NYSE: MRN), a leading healthcare staffing company and the largest provider of
per diem nurse staffing services in the nation, today reported revenues of
$102.4 million for the third quarter of 2005, an increase over second quarter
2005 revenues of $101.9 million and a decrease of 3.6% from third quarter 2004
revenues of $106.2 million. Net income for the third quarter of 2005 was $0.2
million, or $0.01 per diluted share, after an after tax charge of $0.3 million
associated with the expense of an acquisition which was not completed, as
compared with $0.3 million, or $0.01 per share, for both the second quarter of
2005 and the third quarter of 2004.
Commenting on the third quarter's results, Robert J. Adamson, chairman and chief
executive officer, stated, "We are pleased to have achieved a third consecutive
sequential growth in revenues. The Company is very focused on an array of key
growth initiatives moving into 2006. We believe our programs to maximize the
market and account penetration of our per diem locations will have impact in the
next fiscal year. Combined with improved hiring, training and compensation
programs, we are redefining our business to capitalize on our leadership
position in the nurse per diem industry."
"There are also exciting growth opportunities in both our travel nurse and
allied healthcare business units," Adamson continued. "We have aggressive
investment plans for these businesses, including significantly boosting the
recruitment capacity in our travel nurse group and we plan to extend our reach
into select new markets for our various allied businesses lines."
Gary W. Peck, chief operating officer, added "The growth initiatives, both
planned and underway, represent exciting changes for the Company. We are
building the needed skills for improved selling and deeper market penetration
through the redesign of our training programs. At the same time, we are focusing
on improved branch efficiency through the planned centralization of select
support services in the quarters ahead. All of our business units should benefit
from the enhanced level of corporate support."
Mr. Peck added, "Our recent JCAHO certification should begin to differentiate us
in the marketplace in the near term. Also, our recently announced expense
reduction measures are having their intended effect as operating expenses on a
sequential basis showed a sizable decline."
Gross profit was $22.5 million for the third quarter of 2005 which represented a
slight decrease from the third quarter of 2004 gross profit of $23.0 million and
from the second quarter of 2005 gross profit of $22.8 million. Gross margin for
the third quarter of 2005 was 21.9%, an increase from the gross margins of 21.7%
for the third quarter of 2004 and a decrease from the gross margins of 22.4% for
the second
-MORE-
MRN Announces Third Quarter Results
Page 2
November 3, 2005
quarter of 2005. The decrease in gross margins on a sequential basis was
primarily due to a combination of factors including the mix of product lines as
well as lower permanent placement fees.
Selling, general and administrative expenses were $19.7 million, or 19.2% of
revenues, in the third quarter of 2005 as compared with $19.9 million, or 18.8%
of revenues, for the same period of the prior year and $20.4 million, or 20.0%
of revenues, for the second quarter of 2005. The decrease from the prior quarter
was due to the effect of expense reduction initiatives that were completed
during the quarter. During the third quarter of 2005, the Company wrote off $0.5
million of legal and professional fees and other expenses associated with due
diligence that was performed on a large acquisition that ultimately was not
completed. The write off is included in other expense.
Revenues were $304.9 million for the nine months ended September 25, 2005, a
decrease of 4.3% from revenues of $318.6 million for the comparable prior year
period. Net loss for the nine months ended September 25, 2005 was $0.5 million,
or $0.02 per share, compared to a net loss of $1.2 million, or $0.04 per share,
for the comparable prior year period.
Gross profit was $66.7 million for the nine months ended September 25, 2005, a
decrease of 1.7% from the gross profit of $67.9 million for the comparable prior
year period. Gross margin for the nine months ended September 25, 2005 was
21.9%, an increase from the gross margin of 21.3% for the comparable prior year
period. The increase over the prior year was primarily due to improved self
insurance claims experience and a modest improvement in the bill to pay rate
spread.
Selling, general and administrative expenses were $60.9 million, or 20.0% of
revenues, for the nine months ended September 25, 2005 as compared with $61.8
million, or 19.4% of revenues, for the comparable prior year period. The
decrease was primarily due to a $0.7 million charge associated with executive
severance and search costs recorded in the second quarter of 2004.
Conference Call
The Company's management will host a conference call and webcast to discuss the
earnings release at 1:00 p.m. Eastern time on Friday, November 4, 2005. 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.earnings.com.
Company Summary
Medical Staffing Network Holdings, Inc. is the largest provider of per diem
nurse staffing services in the United 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
increase revenues or market share, our ability to continue to generate
significant amounts of cash flow from operations, our ability to further reduce
operating expenses, our ability to sustain the improved self insurance claims
experience, our ability to attract and retain qualified nurses
- MORE -
MRN Announces Third Quarter Results
Page 3
November 3, 2005
and other healthcare personnel, the overall level of demand for services
provided by temporary nurses, our ability to enter into contracts with hospital
and healthcare facility clients on terms attractive to us, our ability to
maintain the improvement in the spread between bill and pay rates, the
willingness of hospital and healthcare facility clients to utilize temporary
healthcare staffing services, the general level of patient occupancy at our
hospital and healthcare facility clients, 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 including JCAHO
accreditation, our clients' ability to pay us for our services, our ability to
successfully implement our acquisition and integration strategies the effect of
liabilities and other claims asserted against us, the effect of competition in
the markets we serve and our ability to carry out our business strategy.
Additional information concerning these and other important factors can be found
within our 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.
- MORE -
MRN Announces Third Quarter Results
Page 4
November 3, 2005
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(unaudited; in thousands, except per share data)
Three Months Ended Nine Months Ended
Sept. 25, Sept. 26, Sept. 25, Sept. 26,
2005 2004 2005 2004
----------- ----------- ----------- -------
Service revenues $ 102,408 $ 106,204 $ 304,856 $ 318,599
Cost of services rendered 79,936 83,167 238,116 250,715
---------- ----------- ----------- -----------
Gross profit 22,472 23,037 66,740 67,884
Operating expenses:
Selling, general and administrative 19,696 19,944 60,945 61,823
Depreciation and amortization 1,241 1,615 4,083 4,912
Other 512 -- 512 --
------------ ------------ ------------ ------------
Total operating expenses 21,449 21,559 65,540 66,735
------------ ------------ ------------ ------------
Income from operations 1,023 1,478 1,200 1,149
Interest expense, net 653 780 2,105 2,751
------------- ------------ ------------- -----------
Income (loss) before provision for (benefit from)
income taxes 370 698 (905) (1,602)
Provision for (benefit from) income taxes 150 410 (398) (354)
------------ ----------- ----------- -----------
Net income (loss) $ 220 $ 288 $ (507) $ (1,248)
============ =========== =========== ===========
Basic and diluted net income (loss) per share $ 0.01 $ 0.01 $ (0.02) $ (0.04)
========= ========== ========== ==========
Weighted average common shares outstanding:
Basic 30,234 30,231 30,233 30,227
Diluted 30,292 30,326 30,233 30,227
Operating Statistics:
Hours worked 2,460 2,489 7,405 7,508
- MORE -
MRN Announces Third Quarter Results
Page 5
November 3, 2005
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(unaudited; in thousands)
September 25, December 26,
2005 2004
----------------- ------------
ASSETS
Current assets:
Cash and cash equivalents $ 254 $ 345
Accounts receivable, net 57,725 57,478
Other current assets 6,494 11,164
--------------- ---------------
Total current assets 64,473 68,987
Furniture and equipment, net 7,585 8,481
Goodwill, net 129,878 129,474
Other assets, net 3,455 3,961
--------------- ---------------
Total assets $ 205,391 $ 210,903
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current liabilities $ 13,091 $ 12,457
Accrued payroll and related liabilities 7,715 6,597
--------------- ---------------
Total current liabilities 20,806 19,054
Long-term debt 25,627 31,760
Deferred income taxes 9,050 9,808
Other long-term obligations 373 255
--------------- ---------------
Total liabilities 55,856 60,877
Total stockholders' equity 149,535 150,026
--------------- ---------------
Total liabilities and stockholders' equity $ 205,391 $ 210,903
=============== ===============
- END -