Exhibit 99.1
Medical Staffing Network Holdings Announces First Quarter 2006
Operating Results;
Restructuring Objectives Achieved
BOCA RATON, Fla.--(BUSINESS WIRE)--April 26, 2006--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 $95.0 million for
the first quarter of 2006, a decrease of 2.8% from fourth quarter 2005
revenues of $97.7 million and a decrease of 5.6% from first quarter
2005 revenues of $100.6 million. Net loss for the first quarter of
2006 was $4.5 million, or $0.15 per share, which includes an after-tax
charge of $3.8 million, or $0.13 per share, for restructuring and
related goodwill impairment charges associated with the Company's
previously announced per diem operation reorganization initiative. Net
loss for the fourth quarter of 2005 was $0.3 million, or $0.01 per
share, and $1.0 million, or $0.03 per share, for the first quarter of
2005.
Commenting on the first quarter's results, Robert J. Adamson,
chief executive officer, stated, "We substantially completed the
previously announced restructuring of the Company. The restructuring
activities were completed efficiently, and the Company experienced no
reduction in its weekly revenues in the period after the closure of 13
branch locations. We have achieved the objectives of the
restructuring, which included a $6.0 million reduction in annualized
operating expenses. With the actions we have taken, coupled with our
organic growth initiatives, we are confident that our objective to
improve future profitability will be met."
Gross profit was $19.7 million for the first quarter of 2006, a
decrease of 8.0% from the gross profit of $21.4 million for both the
fourth quarter of 2005 and the first quarter of 2005. The decreases on
a sequential and year-over-year basis were due to the decline in
revenues coupled with a decline in gross margin. Gross margin for the
first quarter of 2006 was 20.7%, a decrease from a gross margin of
21.9% for the fourth quarter of 2005 and a decrease from the gross
margin of 21.3% for the first quarter of 2005. The decrease from the
first quarter of 2005 was primarily attributable to higher benefits
and housing costs. The decrease from the fourth quarter of 2005 was
primarily due to higher state and federal unemployment taxes, which
historically occur during the first three to four months of the year.
Selling, general and administrative expenses were $19.1 million,
or 20.1% of revenues, in the first quarter of 2006, as compared with
$20.1 million, or 20.6% or revenues, for the fourth quarter of 2005
and $20.9 million, or 20.7% of revenues, for the first quarter of
2005. The decreases on a sequential and year-over-year basis were
primarily due to the cost savings resulting from the per diem
operation reorganization initiative that was previously announced.
During the first quarter of 2006, the Company recorded a $6.3
million pre-tax charge associated with the previously announced per
diem operation reorganization initiative. The charge includes $3.1
million in costs related to severance and contract and lease
terminations and approximately $3.2 million in non-cash goodwill
impairment charges related to the branch closures. These charges are
included in restructuring and other charges.
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, April 27. A live webcast, as well as a 30-day replay, of the
conference call will be available online at the Company's Web site 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 complete the per diem operation restructuring and generate
the expected cost savings, our ability to continue to generate
significant amounts of cash flow from operations, our ability to
attract and retain qualified nurses 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, 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.
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(unaudited; in thousands, except per share data)
Three Months Ended
March 26, March 27,
2006 2005
--------- ---------
Service revenues $95,009 $100,576
Cost of services rendered 75,295 79,132
--------- ---------
Gross profit 19,714 21,444
--------- ---------
Operating expenses:
Selling, general and administrative 19,122 20,857
Depreciation and amortization 1,101 1,468
Restructuring and other charges 6,272 --
--------- ---------
Total operating expenses 26,495 22,325
--------- ---------
Loss from operations (6,781) (881)
Interest expense, net 689 797
--------- ---------
Loss before benefit from income taxes (7,470) (1,678)
Benefit from income taxes (2,987) (688)
--------- ---------
Net loss $(4,483) $(990)
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Basic and diluted net loss per share $(0.15) $(0.03)
========= =========
Weighted average number of
common shares outstanding:
Basic and diluted 30,236 30,231
Operating Statistics:
Hours worked by professionals 2,314 2,469
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(in thousands)
March 26, Dec. 25,
2006 2005
--------- ---------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $770 $42
Accounts receivable, net 57,006 55,863
Other current assets 5,961 6,542
--------- ---------
Total current assets 63,737 62,447
Furniture and equipment, net 8,269 8,427
Goodwill, net 127,406 130,589
Other assets, net 2,857 3,453
--------- ---------
Total assets $202,269 $204,916
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other current liabilities $16,968 $14,416
Accrued payroll and related liabilities 8,439 6,157
Current portion of long-term debt 23,603 --
--------- ---------
Total current liabilities 49,010 20,573
Long-term debt -- 23,991
Deferred income taxes 7,226 9,790
Other long-term obligations 1,237 1,314
--------- ---------
Total liabilities 57,473 55,668
Commitments and contingencies
Total stockholders' equity 144,796 149,248
--------- ---------
Total liabilities and stockholders' equity $202,269 $204,916
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CONTACT: Medical Staffing Network Holdings, Inc.
Sean M. Kerrigan, 561-322-1317
www.msnhealth.com