EXHIBIT 99.1
Medical Staffing Network Holdings Announces
Second Quarter 2007 Operating Results
Highest Quarterly Earnings Per Share In Four Years On Strongest
Sequential Revenue Growth In Five Years
BOCA RATON, Fla.--(BUSINESS WIRE)--Aug. 8, 2007--Medical Staffing
Network Holdings, Inc. (NYSE: MRN), the third largest healthcare
staffing company and the largest provider of per diem nurse staffing
services in the nation as measured by revenues, today reported
revenues of $94.0 million for the second quarter of 2007, an increase
of 3.7% from first quarter 2007 revenues of $90.5 million and a
decrease of 1.4% from second quarter 2006 revenues of $95.3 million.
Net income for the second quarter of 2007 was $1.7 million, or $0.06
per diluted share, as compared with net income for the second quarter
of 2006 of $1.2 million, or $0.04 per diluted share.
Commenting on the second quarter's results, Robert J. Adamson,
chairman and chief executive officer, stated, "We experienced a lot of
positive momentum preceding our acquisition of InteliStaf on July 2.
Our volume growth initiatives yielded a sequential quarter increase in
our revenue for the second quarter of 4% on a volume increase of over
3%. The sequential quarter revenue increase represents the highest
organic growth rate we have reported in nearly five years, with our
per diem and allied staffing divisions increasing sequentially 2% and
16%, respectively. Our gross margin expansion programs have continued
to be successful with our second quarter gross margin increasing 230
basis points from last year's comparable quarter, resulting in our
highest quarterly gross margin since 2002. As a result, I am pleased
to report that our second quarter net income yielded our highest
quarterly earnings per share in four years."
Kevin S. Little, president and chief financial officer, added, "In
the one month since the acquisition, we have efficiently integrated
the majority of the operations of InteliStaf and Medical Staffing
Network. All of our per diem branches are now functioning on one
common operating platform. The merger of the two companies further
solidifies Medical Staffing Network as the largest provider of per
diem nurse staffing in the United States and gives us a scale presence
in the travel nursing sector."
Mr. Adamson concluded, "I am very pleased with the substantial
progress and success we have experienced to date in implementing our
InteliStaf integration plan. I am most excited that, as a result of
the success of the integration plan to date, the revenue run-rate in
the first month post-closing has exceeded the $550 million annualized
amount initially disclosed. With this acquisition and the resultant
opportunity for synergies, Medical Staffing Network is now in a
position to significantly improve its profitability as we leverage our
scaleable infrastructure over an increased revenue volume base."
Gross profit was $23.0 million for the second quarter of 2007, an
increase of 8.8% from the second quarter of 2006 gross profit of $21.2
million. Gross profit for the first quarter of 2007 was $21.0 million.
Gross margin for the second quarter of 2007 was 24.5%, an increase
from the gross margin of 22.2% for the second quarter of 2006 and an
increase from the 23.2% for the first quarter of 2007. The 230 basis
point improvement from the prior year quarter was primarily due to an
increase in the bill-to-pay spread.
Selling, general and administrative expenses were $19.3 million,
or 20.5% of revenues, in the second quarter of 2007 as compared with
$17.5 million, or 18.4% of revenues, for the comparable prior year
quarter and $19.9 million, or 21.9% of revenues, for the first quarter
of 2007. The increase from the prior year quarter was primarily due to
higher compensation expense for branch personnel, professional service
fees and recruiting/promotional costs, partially offset by a reduction
in the provision for doubtful accounts of approximately $0.4 million,
a portion of which is attributable to the collection on a previously
reserved account.
Revenues were $184.5 million for the six months ended July 1,
2007, a decrease of 3.1% from revenues of $190.3 million for the
comparable prior year period. Net income for the six months ended July
1, 2007, was $1.7 million, or $0.05 per diluted share, compared with a
net loss of $3.3 million, or $0.11 per share, which included a $0.13
per share charge for restructuring and related goodwill impairment
charge associated with the first quarter 2006 reorganization
initiative.
Gross profit was $44.1 million for the six months ended July 1,
2007, an increase of 7.8% from the gross profit of $40.9 million for
the comparable prior year period. Gross margin for the six months
ended July 1, 2007, was 23.9%, an increase from the gross margin of
21.5% for the comparable prior year period. The 240 basis point
improvement over the prior year was primarily due to an increase in
the bill-to-pay spread.
Selling, general and administrative expenses were $39.1 million,
or 21.2% of revenues, for the six months ended July 1, 2007, as
compared with $36.7 million, or 19.3% of revenues, for the comparable
prior year period. The increase from the prior year period was
primarily due to higher compensation expense for branch personnel,
professional service fees and recruiting/promotional costs, partially
offset by a reduction in the provision for doubtful accounts of
approximately $0.5 million, a portion of which is attributable to the
collection on a previously reserved account.
InteliStaf Integration
The Company developed an integration plan (the Plan) in connection
with the July 2, 2007, InteliStaf acquisition, that resulted in
InteliStaf locations and Medical Staffing Network branches merging.
Pursuant to applicable accounting guidance, costs related to the
merger or closure of InteliStaf branches would be captured as part of
the cost of the acquisition and will not be recorded as a period
expense. Alternatively, costs related to the merger or closure of
Medical Staffing Network branches, such as severance, lease
termination, noncash impairment of goodwill or other similar charges,
will result in certain amounts being expensed in the third quarter as
incurred.
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 9, 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 press release includes certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of
1995. These statements include all statements other than those made
solely with respect to historical fact, including statements regarding
the registrant's expected restructuring and acquisition-related
integration costs and related charges. These statements involve known
and unknown risks, uncertainties and other factors that may cause the
registrant's 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; our ability to maintain the revenue
run-rate experienced in the first few weeks post InteliStaf merger;
our ability to maintain the level of success achieved to date with
regards to the InteliStaf integration plan; market share or
profitability; 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;
risks associated with our debt obligations; our ability to obtain
additional financing, if required, in future periods; 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 certification;
our clients' ability to pay us for our services; our ability to
successfully implement our acquisition and integration strategies; our
ability to successfully integrate completed acquisitions into our
current operations; 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 the registrant's filings with the Securities and Exchange
Commission. Forward-looking statements in this press release should be
evaluated in light of these important factors. Although the registrant
believes that these statements are based upon reasonable assumptions,
the registrant cannot provide any assurances regarding future results.
The registrant undertakes no obligation to revise or update any
forward-looking statements, or to make any other forward-looking
statements, whether as a result of new information, future events or
otherwise.
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(unaudited; in thousands, except per share data)
Three Months Ended Six Months Ended
------------------ ------------------
July 1, June 25, July 1, June 25,
2007 2006 2007 2006
--------- -------- -------- ---------
Service revenues $ 93,953 $ 95,268 $184,471 $190,277
Cost of services rendered 70,923 74,110 140,406 149,405
--------- -------- -------- ---------
Gross profit 23,030 21,158 44,065 40,872
--------- -------- -------- ---------
Operating expenses:
Selling, general and
administrative 19,279 17,544 39,139 36,666
Depreciation and amortization 893 954 1,791 2,055
Impairment of goodwill - - - 3,183
Restructuring and other
charges - - - 3,089
--------- -------- -------- ---------
Total operating expenses 20,172 18,498 40,930 44,993
--------- -------- -------- ---------
Income (loss) from operations 2,858 2,660 3,135 (4,121)
Interest expense, net 344 646 719 1,335
--------- -------- -------- ---------
Income (loss) before provision
for (benefit from) income taxes 2,514 2,014 2,416 (5,456)
Provision for (benefit from)
income taxes 795 805 766 (2,182)
--------- -------- -------- ---------
Net income (loss) $ 1,719 $ 1,209 $ 1,650 $ (3,274)
========= ======== ======== =========
Basic and diluted net income
(loss) per share $ 0.06 $ 0.04 $ 0.05 $ (0.11)
========= ======== ======== =========
Weighted average common shares
outstanding:
Basic 30,262 30,244 30,261 30,240
Diluted 30,305 30,289 30,341 30,240
Summary cash flow information:
Cash flow from operating
activities $ 3,977 $ 2,034 $ 3,062 $ 3,985
Operating Statistics:
Hours worked 2,287 2,347 4,501 4,670
MEDICAL STAFFING NETWORK HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(unaudited; in thousands)
July 1, Dec. 31,
2007 2006
-------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 198 $ 527
Accounts receivable, net 61,076 56,717
Other current assets 4,676 4,082
-------- --------
Total current assets 65,950 61,326
Furniture and equipment, net 8,069 7,691
Goodwill 99,772 99,097
Other assets, net 3,690 3,037
-------- --------
Total assets $177,481 $171,151
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 21,859 $ 17,244
Accrued payroll and other current liabilities 7,752 7,863
-------- --------
Total current liabilities 29,611 25,107
Long-term debt 16,235 17,036
Deferred income taxes 5,511 4,745
Other long-term obligations 2,101 1,936
-------- --------
Total liabilities 53,458 48,824
Commitments and contingencies
Total stockholders' equity 124,023 122,327
-------- --------
Total liabilities and stockholders' equity $177,481 $171,151
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CONTACT: Medical Staffing Network Holdings, Inc.
Jeff Yesner, Vice President, Finance, 561-322-1303