Exhibit 99.1
Medical Staffing Network Holdings Announces Results for the Second
Quarter of 2003; Revenue Growth of 20% over Prior Year
BOCA RATON, Fla.--(BUSINESS WIRE)--Aug. 6, 2003--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 $137.5 million for the
second quarter of 2003, which is an increase of 20.4% over revenues of
$114.1 million for the second quarter of 2002. Income before
discontinued operations for the second quarter of 2003 was $0.7
million, or $0.02 per diluted share, compared with $5.1 million, or
$0.17 per diluted share, for the second quarter of 2002. Income before
discontinued operations for the second quarter of 2003 is inclusive of
the previously announced pre-tax charge of approximately $0.8 million
related to the completion of the Company's restructuring initiative.
Including the results of the Company's discontinued physician staffing
business, net income was $0.3 million, or $0.01 per diluted share, for
the second quarter of 2003 compared with $5.1 million, or $0.17 per
diluted share, for the prior year second quarter.
Commenting on the second quarter's results, Robert J. Adamson,
chief executive officer of Medical Staffing Network Holdings, Inc.,
stated, "We are pleased to report that, in this difficult environment
for healthcare staffing companies, the Company posted a 20% increase
in revenues over the prior year quarter. The previously announced
restructuring of our business operations was efficiently completed
during the quarter with a minimal loss of revenues and is expected to
be a catalyst for improved profitability for the balance of the year.
The restructuring was necessary to adjust the infrastructure we had
put in place to support multiple growth initiatives and reflects the
near term softening in demand for our services. Our clients continue
to suffer from adverse market conditions including weak admission
levels. In an effort to improve their profitability, hospitals are
attempting to reduce usage of temporary healthcare staff. We believe
as general economic indicators show improvement and as hospitals
exhaust traditional, short term alternatives to utilization of
temporary healthcare employees, demand will strengthen for our
services. The long term nature of the imbalance between the demand and
supply for healthcare professionals remains a strong positive factor
in supporting the growth of the temporary healthcare staffing
industry.
"While we are disappointed with our earnings for the second
quarter, we now have the capacity to generate higher levels of income
due to the restructuring. Medical Staffing Network continues to
increase its market share in the nurse per diem segment of the
temporary medical staffing industry. Despite slowing revenue growth,
we fared significantly better than our competitors in retaining our
revenue volumes. We are well positioned to resume our highly
successful growth initiatives including our de novo nurse per diem,
allied healthcare BiB, allied healthcare diversification and travel
nurse programs when general market conditions improve. We look forward
to demonstrating improved profitability in subsequent quarters."
Gross profit increased to $29.5 million, or 1.7%, for the second
quarter of 2003 from $29.0 million during the same period in 2002 as a
result of the growth in revenues, partially offset by increased cost
of services rendered. The gross margin of 21.5% for the second quarter
of 2003 decreased from the gross margin of 25.4% for the second
quarter of 2002. The decrease is attributable to the impact of higher
compensation and other direct costs related to our healthcare
professionals.
Selling, general and administrative expenses increased to 16.2% of
revenues in the second quarter of 2003 from 14.0% for the second
quarter of 2002, due to the restructuring initiative completed during
the quarter, the opening of 44 branch-in-branch ("BiB") locations in
connection with the expansion of the BiB program prior to May 2003 and
the eight acquisitions that the Company made from July 2002 through
March 2003. Corporate and administrative expenses increased to 2.2% of
revenues in the second quarter of 2003 compared with 1.6% for the
second quarter of 2002, primarily due to increased infrastructure
associated with the aforementioned acquisitions and expansion of the
BiB program and increased costs associated with being a public
company.
For the six months ended June 29, 2003, revenues were $281.5
million, which is an increase of 30.3% over revenues of $216.1 million
for the first half of 2002. Income before discontinued operations was
$6.0 million, or $0.20 per diluted share, for the six months ended
June 29, 2003, compared with $7.8 million, or $0.29 per diluted share,
for the first six months of 2002. Net income including discontinued
operations was $5.5 million, or $0.18 per diluted share, for the six
months ended June 29, 2003, compared with $7.9 million, or $0.30 per
diluted share, for the same prior year period.
Gross profit increased to $64.1 million, or 16.6%, for the first
half of 2003 from $54.9 million during the first half of 2002. The
gross margin of 22.8% for the first half of 2003 decreased from the
gross margin of 25.4% for the first half of 2002. The decrease is
attributable to the impact of higher compensation and other direct
costs related to our healthcare professionals.
Selling, general and administrative expenses increased to 15.2% of
revenues for the six months ended June 29, 2003, from 14.3% for the
first six months of 2002, due to the restructuring initiative
completed during the second quarter of 2003, the opening of 44 BiB
locations in connection with the BiB program and the eight
acquisitions that the Company made from July 2002 through March 2003.
Corporate and administrative expenses increased to 1.9% of revenues in
the second quarter of 2003 compared with 1.6% for the second quarter
of 2002, primarily due to increased infrastructure associated with the
aforementioned acquisitions and expansion of the BiB program and
increased costs associated with being a public company.
Earnings Guidance
For the third quarter of 2003, the Company expects revenues of
$133 to $136 million and to generate earnings of $0.09 to $0.11 per
diluted share.
For full year 2003, the Company expects to report income from
continuing operations of $0.43 to $0.46 per diluted share on revenues
of $555 to $570 million.
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
Thursday, August 7, 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
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 and the demand for temporary nurses. 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.
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Statements of Income
(unaudited; in thousands, except per share data)
Three Months Ended Six Months Ended
------------------ ------------------
June 29, June 30, June 29, June 30,
2003 2002 2003 2002
-------- -------- -------- --------
Service revenues $137,455 $114,126 $281,468 $216,055
Cost of services rendered 107,963 85,137 217,405 161,117
-------- -------- -------- --------
Gross profit 29,492 28,989 64,063 54,938
-------- -------- -------- --------
Operating expenses:
Selling, general
and administrative 22,230 15,960 42,871 30,825
Corporate and
administrative 3,089 1,781 5,388 3,447
Depreciation and
amortization 1,701 991 3,325 1,843
-------- -------- -------- --------
Total operating expenses 27,020 18,732 51,584 36,115
-------- -------- -------- --------
Income from operations 2,472 10,257 12,479 18,823
Interest expense, net 1,243 1,619 2,402 5,659
-------- -------- -------- --------
Income before provision
for income taxes and
discontinued operations 1,229 8,638 10,077 13,164
Provision for income taxes 492 3,542 4,030 5,399
-------- -------- -------- --------
Income before
discontinued operations 737 5,096 6,047 7,765
Income (loss) from
discontinued operations,
net of taxes (402) 17 (506) 145
-------- -------- -------- --------
Net income 335 5,113 5,541 7,910
Dividends on convertible
preferred stock -- 641 -- 3,099
-------- -------- -------- --------
Income available to
common stockholders $335 $4,472 $5,541 $4,811
======== ======== ======== ========
Basic income before
discontinued operations $0.02 $0.18 $0.20 $0.38
Discontinued operations,
net of taxes (0.01) -- (0.02) 0.01
-------- -------- -------- --------
Basic net income per share $0.01 $0.18 $0.18 $0.39
======== ======== ======== ========
Diluted income before
discontinued operations $0.02 $0.17 $0.20 $0.29
Discontinued operations,
net of taxes (0.01) -- (0.02) 0.01
-------- -------- -------- --------
Diluted net income per share $0.01 $0.17 $0.18 $0.30
======== ======== ======== ========
Weighted average common
shares outstanding:
Basic 30,191 24,481 30,176 12,254
Diluted 30,668 29,927 30,915 25,948
Operating Statistics:
Hours worked
Related to
continuing operations 3,229 3,063 6,779 5,954
Related to
discontinued operations -- 5 1 11
-------- -------- -------- --------
Total healthcare
professional hours worked 3,229 3,068 6,780 5,965
======== ======== ======== ========
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
June 29, Dec. 29,
2003 2002
-------- --------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $4,883 $4,595
Accounts receivable, net 92,126 93,780
Other current assets 10,991 10,221
-------- --------
Total current assets 108,000 108,596
Furniture, fixtures and office equipment, net 13,188 12,643
Goodwill, net 124,792 114,437
Other assets, net 11,842 12,407
-------- --------
Total assets $257,822 $248,083
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,669 $5,149
Accrued payroll and related liabilities 8,599 9,366
Current portion of long-term debt 13,283 8,775
Other current liabilities 3,655 4,160
-------- --------
Total current liabilities 28,206 27,450
Long-term debt, net of current portion 71,119 69,225
Other long-term obligations 6,959 5,740
-------- --------
Total liabilities 106,284 102,415
Total stockholders' equity 151,538 145,668
-------- --------
Total liabilities and stockholders' equity $257,822 $248,083
======== ========
CONTACT: Medical Staffing Network Holdings, Inc., Boca Raton
Robert J. Adamson, 561-322-1303