Exhibit 99.1
Medical Staffing Network Holdings Announces Fourth Quarter and
Full Year of 2003 Operating Results;
Company Achieved Record Revenues In 2003
BOCA RATON, Fla.--(BUSINESS WIRE)--Feb. 23, 2004--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 $107.8 million for the
fourth quarter of 2003, which is a decrease of 21.0% from revenues of
$136.5 million for the fourth quarter of 2002. Loss from continuing
operations for the fourth quarter of 2003 was $1.6 million, or $0.05
per diluted share, and includes a previously announced non-cash
pre-tax charge of $3.6 million ($2.1 million, or $0.07 per diluted
share, after tax), resulting from the write-off of certain fees
associated with the Company's early extinguishment of a debt facility.
Income from continuing operations for the fourth quarter of 2002 was
$4.0 million, or $0.13 per diluted share. Cash flow from operating
activities was $11.0 million for the fourth quarter of 2003 as
compared with cash used in operating activities of $4.2 million for
the same period of the prior year.
Commenting on the fourth quarter's results, Robert J. Adamson,
chief executive officer of Medical Staffing Network Holdings, Inc.,
stated, "Our results for the quarter are reflective of the prevailing
difficult market conditions for temporary healthcare staffing
services. Efforts by our clients to improve the utilization of their
full-time staff continue to drive the current weak demand for our
services."
Mr. Adamson continued, "As expected, the Company saw weekly sales
continue to decline from the third quarter into the fourth quarter.
However, average weekly sales have basically stabilized over the past
few months. We expect demand to recover slowly and are encouraged to
see a higher level of orders received in some markets thus far in 2004
than in the second half of 2003. If orders continue to increase, the
next challenge will be in recruiting back those healthcare
professionals who left the temporary job market in an effort to secure
full-time jobs as the economy heavily shed jobs the past few years."
Mr. Adamson added, "Contraction of demand for healthcare staffing
services in 2003 has advanced the inevitable consolidation of this
fragmented market. Medical Staffing Network, while clearly
disappointed with its own results for the quarter and the full year
2003, has faired better than its competitors in the nurse per diem
industry. We are pleased to report that, during 2003, Medical Staffing
Network generated almost $37 million of cash from operating activities
and reduced its days sales outstanding from 63 at the end of 2002 to
less than 60 at the end of 2003. Management currently remains
committed to its decision in the summer of 2003 to carry the
infrastructure and capacity necessary to be well positioned to take
advantage of the rebound in demand, not if, but when, it happens."
Mr. Adamson concluded, "I am pleased to report that we completed
our new senior debt facility during the fourth quarter. We are looking
forward to continuing our prior relationships with GE Healthcare
Financial Services and LaSalle Bank and adding Goldman Sachs to the
list of lenders with whom we hope to have a long and mutually
successful business relationship."
Gross profit decreased to $24.2 million for the fourth quarter of
2003 from $33.8 million during the same period in 2002, or 28.4%, as a
result of the decline in revenues and a decrease in gross margin
percentage. The gross margin of 22.4% for the fourth quarter of 2003
is a decrease from the 24.7% for the fourth quarter of 2002. The
margin decrease is attributable to the impact of higher compensation
and other direct costs related to the Company's healthcare
professionals, partially offset by a $0.4 million pre-tax workers'
compensation expense benefit as a result of favorable claims
experience based on actuarial estimation performed during the quarter.
Selling, general and administrative expenses decreased to $17.2
million, or 15.9% of revenues, in the fourth quarter of 2003 from
$22.5 million, or 16.5% of revenues, for the fourth quarter of 2002.
The year-over-year decrease is primarily due to the locations closed
and other cost reduction programs implemented as a part of the
restructuring initiative, partially offset by the opening of 44
branch-in-branch ("BiB") locations in connection with the expansion of
the BiB program prior to May 2003 and the acquisitions that the
Company made in the past year. Corporate and administrative expenses
increased to $3.3 million, or 3.0% of revenues, in the fourth quarter
of 2003 compared with $2.0 million, or 1.4% of revenues, for the
fourth quarter of 2002, primarily due to increased infrastructure
associated with the aforementioned acquisitions and expansion of the
BiB program.
For the year ended December 28, 2003, the Company had record
revenues of $513.0 million, which is an increase of 7.1% over revenues
of $478.8 million for the year ended December 29, 2002. Income from
continuing operations was $5.5 million, or $0.18 per diluted share
(inclusive of the aforementioned non-cash after tax charge of $0.07
per diluted share related to the early extinguishment of debt), for
the year ended December 28, 2003, compared with $17.8 million, or
$0.62 per diluted share, for the year ended December 29, 2002.
Including discontinued operations, net income was $5.0 million, or
$0.16 per diluted share (inclusive of the non-cash after tax charge of
$0.07 per diluted share), for the year ended December 28, 2003,
compared with $17.9 million, or $0.62 per diluted share, for the year
ended December 29, 2002. Cash flow from operating activities was $36.7
million for the year ended December 28, 2003, as compared with cash
used in operating activities of $5.9 million for the year ended
December 29, 2002.
Gross profit decreased to $114.8 million for the year ended
December 28, 2003, from $120.4 million during the same prior year
period, or 4.7%, as a result of increased cost of services rendered,
partially offset by the increase in revenues. The gross margin of
22.4% for the year ended December 28, 2003, decreased from the gross
margin of 25.2% for the prior year. The decrease is attributable to
the impact of higher compensation and other direct costs related to
the Company's healthcare professionals.
Selling, general and administrative expenses increased to $78.8
million, or 15.4% of revenues, for the year ended December 28, 2003,
from $70.7 million, or 14.8% of revenues, in the prior year, due to
the costs of the restructuring initiative completed during the second
quarter of 2003, the opening of 44 BiB locations in connection with
the BiB program and the acquisitions that the Company made in the past
year, partially offset by the locations closed in the restructuring
initiative. Corporate and administrative expenses increased to $11.7
million, or 2.3% of revenues, for the year ended December 28, 2003,
compared with $7.4 million, or 1.5% of revenues, in the prior year,
primarily due to increased infrastructure associated with the
aforementioned acquisitions and expansion of the BiB program.
Earnings Guidance
As previously announced, the Company has adopted a policy not to
provide forward-looking financial guidance since such estimates
involve a high degree of uncertainty. Accordingly, the Company has
made the decision to no longer provide forward-looking guidance with
respect to the Company's anticipated quarterly financial results.
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 February
24, 2004. 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.fulldisclosure.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 Years Ended
------------------ ------------------
Dec. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2002 2003 2002
-------- -------- -------- --------
Service revenues $107,831 $136,508 $512,985 $478,827
Cost of services rendered 83,672 102,749 398,224 358,394
-------- -------- -------- --------
Gross profit 24,159 33,759 114,761 120,433
-------- -------- -------- --------
Operating expenses:
Selling, general
and administrative 17,167 22,470 78,771 70,716
Corporate and administrative 3,248 1,966 11,748 7,386
Depreciation and amortization 1,691 1,376 6,773 4,486
-------- -------- -------- --------
Total operating expenses 22,106 25,812 97,292 82,588
-------- -------- -------- --------
Income from operations 2,053 7,947 17,469 37,845
Loss from early extinguishment
of debt 3,555 -- 3,555 --
Interest expense, net 1,136 1,136 4,685 7,603
-------- -------- -------- --------
Income (loss) from
continuing operations before
provision for (benefit from)
income taxes (2,638) 6,811 9,229 30,242
Provision for (benefit from)
income taxes (1,015) 2,791 3,708 12,400
-------- -------- -------- --------
Income (loss) from
continuing operations (1,623) 4,020 5,521 17,842
Income (loss) from
discontinued operations,
net of taxes -- (93) (506) 52
-------- -------- -------- --------
Net income (loss) (1,623) 3,927 5,015 17,894
Dividends on convertible
preferred stock -- -- -- 3,099
-------- -------- -------- --------
Income (loss) available to
common stockholders $(1,623) $3,927 $5,015 $14,795
======== ======== ======== ========
Basic income (loss) from
continuing operations $(0.05) $0.13 $0.18 $0.70
Discontinued operations -- -- (0.01) --
-------- -------- -------- --------
Basic net income (loss)
per share $(0.05) $0.13 $0.17 $0.70
======== ======== ======== ========
Diluted income (loss) from
continuing operations $(0.05) $0.13 $0.18 $0.62
Discontinued operations -- -- (0.02) --
-------- -------- -------- --------
Diluted net income (loss)
per share $(0.05) $0.13 $0.16 $0.62
======== ======== ======== ========
Weighted average common
shares outstanding:
Basic 30,208 30,110 30,190 21,177
Diluted 30,208 31,249 30,807 28,637
Operating Statistics:
Hours worked:
Related to continuing
operations 2,501 3,338 12,137 12,504
Related to discontinued
operations -- 2 1 17
-------- -------- -------- --------
Total healthcare professional
hours worked 2,501 3,340 12,138 12,521
======== ======== ======== ========
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
Dec. 28, Dec. 29,
2003 2002
-------- --------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $825 $4,595
Accounts receivable, net 68,602 93,780
Other current assets 13,785 10,221
-------- --------
Total current assets 83,212 108,596
Furniture and equipment, net 11,377 12,643
Goodwill, net 125,028 114,437
Other assets, net 9,253 12,407
-------- --------
Total assets $228,870 $248,083
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,975 $5,149
Accrued payroll and related liabilities 6,616 9,366
Current portion of long-term debt -- 8,775
Other current liabilities 4,163 4,160
-------- --------
Total current liabilities 14,754 27,450
Long-term debt, net of current portion 54,978 69,225
Deferred taxes 7,115 4,274
Other long-term obligations 736 1,466
-------- --------
Total liabilities 77,583 102,415
Commitments and contingencies
Total stockholders' equity 151,287 145,668
-------- --------
Total liabilities and stockholders' equity $228,870 $248,083
======== ========
CONTACT: Medical Staffing Network Holdings Inc., Boca Raton
Robert J. Adamson, 561-322-1303