EXHIBIT 99.1
Medical Staffing Network Holdings Announces
First Quarter 2007 Operating Results
250 Basis Point Improvement In Gross Profit Percentage Over Prior
Year Quarter
BOCA RATON, Fla.--(BUSINESS WIRE)--May 9, 2007--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 $90.5 million for the first
quarter of 2007, a decrease of 4.7% from first quarter 2006 revenues
of $95.0 million. Revenues for the fourth quarter of 2006, which was
comprised of 14 weeks, was $99.5 million (or $92.6 million on a
comparable 13-week basis). The Company essentially broke even for the
first quarter of 2007 compared with a net loss in the first quarter of
2006 of $4.5 million, or $0.15 per share, which included an after-tax
charge of $3.8 million, or $0.13 per share, for restructuring and
related goodwill impairment charges associated with a 2006
reorganization initiative.
Commenting on the first quarter's results, Robert J. Adamson,
chairman and chief executive officer, stated, "Our gross profit
initiatives instituted during the latter half of 2006 have resulted in
continued margin improvement during the first quarter of 2007. The
gross profit percentage for the first quarter of 2007 improved 250
basis points over the prior year quarter and 50 basis points
sequentially, excluding the effects of unemployment taxes that occur
during the first quarter. These improved gross profit percentages have
enabled us to continue to improve our operating income."
The 4.7% decrease in first quarter 2007 revenue from the
comparable prior year quarter was due to a lower number of hours
worked by professionals due in part to the February 2006 restructuring
initiative, partially offset by an increase in bill rates.
Gross profit was $21.0 million for the first quarter of 2007, an
increase of 6.7% from the first quarter of 2006 gross profit of $19.7
million. Gross profit for the fourth quarter of 2006, which was
comprised of 14 weeks, was $23.5 million (or $21.8 million on a
comparable 13-week basis). Gross margin for the first quarter of 2007
was 23.2%, an increase from the gross margin of 20.7% for the first
quarter of 2006 and a slight decrease from the 23.6% for the fourth
quarter of 2006. The 250 basis point improvement from the prior year
quarter was primarily due to an increase in the bill-to-pay spread.
The decrease from the fourth quarter of 2006 is primarily due to
higher state and federal unemployment taxes, which historically occurs
in the beginning of the calendar year, partially offset by an increase
in the bill-to-pay spread.
Selling, general and administrative expenses were $19.9 million,
or 21.9% of revenues, in the first quarter of 2007 as compared with
$19.1 million, or 20.1% of revenues, for the comparable prior year
period and $20.6 million, or 20.7% of revenues, for the fourth quarter
of 2006. The increase from the prior year quarter was primarily due to
increased professional service fees and recruitment expenses.
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, May 10, 2007. 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 as measured by
revenues. The Company also provides travel nurse staffing services and
is a leading provider of allied health professionals, such as
radiology and diagnostic imaging specialists, clinical laboratory
specialists, rehabilitation specialists, pharmacists and respiratory
therapists and other similar healthcare vocations.
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 sustain the improved self insurance claims
experience; our ability to attract and retain qualified nurses and
other healthcare personnel; the overall level of demand for services
provided by temporary healthcare professionals; our ability to enter
into and maintain 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; our ability to
maintain the reduction in the cost of capital resulting from the
amended credit facility; our ability to obtain additional financing,
if required, in future periods; 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 Joint Commission 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; our ability to carry out our
business strategy; the departure of key officers and management
personnel; and the effect of our recognition of an impairment to
goodwill, if any. 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
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April 1, March 26,
2007 2006
-------- ---------
Service revenues $90,518 $95,009
Cost of services rendered 69,483 75,295
-------- ---------
Gross profit 21,035 19,714
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Operating expenses:
Selling, general and administrative 19,860 19,122
Depreciation and amortization 898 1,101
Impairment of goodwill - 3,089
Restructuring and other charges - 3,183
-------- ---------
Total operating expenses 20,758 26,495
-------- ---------
Income (loss) from operations 277 (6,781)
Interest expense, net 375 689
-------- ---------
Loss before benefit from income taxes (98) (7,470)
Benefit from income taxes (29) (2,987)
-------- ---------
Net loss $ (69) $(4,483)
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Basic and diluted net loss per share $ - $ (0.15)
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Weighted average common shares outstanding:
Basic and diluted 30,261 30,236
Operating Statistics:
Hours worked 2,214 2,314
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(unaudited; in thousands)
April 1, Dec. 31,
2007 2006
---------- ----------
ASSETS
Current assets:
Cash and cash equivalents $ 162 $ 527
Accounts receivable, net 61,136 56,717
Other current assets 6,020 5,047
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Total current assets 67,318 62,291
Furniture and equipment, net 7,466 7,691
Goodwill 99,097 99,097
Other assets, net 1,818 2,072
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Total assets $175,699 $171,151
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 23,105 $ 18,209
Accrued payroll and other current liabilities 6,593 7,863
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Total current liabilities 29,698 26,072
Long-term debt 18,100 17,036
Deferred income taxes 4,716 4,745
Other long-term obligations 889 971
---------- ----------
Total liabilities 53,403 48,824
Commitments and contingencies
Total stockholders' equity 122,296 122,327
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Total liabilities and stockholders' equity $175,699 $171,151
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CONTACT: Medical Staffing Network Holdings, Inc., Boca Raton
Jeff Yesner, Vice President, Finance, 561-322-1303