CCRN - Earnings call transcript Q4 2017 | Cross Country Healthcare, Inc.

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Operator

Good morning ladies and gentlemen and welcome to the Cross Country Healthcare earnings conference call for the fourth quarter and full year of 2017. This call is being simultaneously webcast live. A replay of this call will also be available until March 15 of 2018 and can be accessed either on the company’s website or by dialing 866-357-1431 for domestic calls and 203-369-0118 for international calls, and by entering the pass code 2018. I will now turn the call over to Chris Pizzi, Cross Country Healthcare’s Chief Financial Officer. Please go ahead.

Chris Pizzi

morning good and you everyone. Thank morning With Bill Chief Officer, our and me our this Grubbs, Burns. Chief Executive Bill is Operating Officer, call for as discussion year This include a release a quarter our also quarter include full financial of of and outlook and of will results first in disclosed fourth XXXX discussion our the press for will XXXX. prepared lines for the we questions. open will remarks, After our available is A copy our at www.crosscountryhealthcare.com. press of on website release our

statements need Before this remind to made we certain statements. on may that we forward-looking constitute begin, call you

should XX-Q, undertakes financial information to with As can factors, with not noted substitutes you and results subject additional as in other as well superior XX-K financial forward-looking Form factors in in considered measures comments to unknown non-GAAP our such these and the made company press as XXXX on as GAAP. those are known More including non-GAAP no teleconference measures forward-looking vary statements. or and adjusted our in the measures all this financial any of release, I Form measures Also, filings release. update financial press for would reference to accordance encourage in related calculated statements company’s to review be other U.S. information non-GAAP actual documents. EBITDA is contained per obligation share. during or provided The materially listed risk earnings and Such report its adjusted of to quarterly the from and contained these risks, on SEC. uncertainties annual are in reports

the facilitate effect transactions impacted. pro information we and as to to on at of a this periods the understanding better Lastly, trends, to giving of forma occurred start though may acquisitions divestitures the call had refer in underlying order

quarter. and Grubbs. Officer, reminder, results the to the Advantage will now included the our third With of turn July we Chief and reported in completed RN call for have Bill results Executive XXXX a operations that, the fourth I effective X, acquisition its over been As our

Bill Grubbs

Thank was of for you, short allied pressures results as particularly than for and we part you on mix a us believe joining quarter weaker we disappointing expected are with morning. experienced to This Thank term to us what everyone due our our segments. Chris. this respect business, in a nurse

results overall While for we the first quarter will performance affect the as expect that the the believe ’XX, in and improve that to they of moves we term of in some further year. are trends ultimately strong, business pressures these company that short into also the nature, are fiscal

an the operations we accountability and taking go to As and concrete consistency also performance. our on steps will into bring greater as organization we’re our later focus, call, to improve

over were and Turning quarter I sequentially. there year believe trends year was quarter, our We want the that our some down three provide business to around. in negatively the that context to affected allied nurse and business

was on is based First, Irma resulted which revenues additional school in our projected that Hurricane drag number in in about base of allied a XX by result is and typically QX. in caused of on outages, following recruitment QX the What in became candidate storm. an immediately closings, disruption where resulted placements productivity, Raton, $X weeks, Boca fuel this in for quarter, the in Irma during revenues the lower to apparent headquartered, our for expect for Hurricane we travel and $X nursing the business will placement the million disruption bringing however, that we additional nurse later effect quarter. quarter, the than offices on Hurricane initially business days larger impact were the QX. We shortages, of our be $X lower which the million Because placements the anticipated had the decline our closed to in internet total etc. Irma a outages, levels last loss Overall, effect believe had and prolonged approximately power the in million. in

that the to came We large in fourth fourth in to trend lower select head any renewal number renewal but the which in rates labor believe was we second our dynamics, resulted to contingent spend quarter lose reduction customers back pulled quarter a a did The customers MSP in the of not adjust their rates. market

not the fourth capture our to MSPs our reduced at While was enough the offset quarter, rate in increased it renewals.

in has nurses however, and travel the have renewals from to and levels, we’ve and capture we on our to normalized year have more. the each grow rate quarter, week is far first even quarter, the believe gone up So ability as billing that the grown out more of through number and rebounded we are end back the

talked Finally, revenue about quarter this in the business rates this fourth declined during decline allied third but affected sequentially performance $X our the We’ve the business. before, trend million. from in rate by was that of and nurse our premium negatively approximately premium quarter the

we’re XXXX. issue in anticipate from We premium and trend have demand seen seeing, XXXX. decline XXXX quarters, as for rates reduction level in will appears for our we levels experienced in placements higher the of from in to half elevated to unfavorable off what specialties this be We several continues the margin this second premium and normalize an industry-wide

path up and premium improve to to our a recovery held decline for position in to to we actually Revenue competitive see Turning services decently. due We results the respect with and are do strong fourth efficiency. physician operational continuing have expected while QX, to accounts, lower to believe after had QX segments, demand than a our was predominantly that volumes strong fairly locum tenens other starting quarter. staffing and our mix we remains we for in

to the in XXXX. percentage expect We business digit at single low grow

see believe and market XXXX. a in business, the beginning own improved We over XXXX in to forward. are much our our changes. trends performance, also year positive difficult personnel had business to our this management we moving story due is contribution from expect similar disruption year The that which for and to capital to We other expect This now level is see a primarily human segment. we in search grow

So off strong its far, expected appears we’re a is business also to levels. improve contribution to start. it This

While quarter, realized the Cross challenges Country we in that faced a key fourth worth also number successes some of are noting.

our very over our First, year XX% $XX million million, our flow in an prior the operating QX orders to QX. cash increase year. for strong in full up QX, was $XX quarter, up orders were from at the of are again bringing and the Also, number

and contribution level. staffing business continues strong charter In with healthcare and over well school double our schools that DirectEd revenue year-over-year particular, perform business expect to Our to digits growing serving continue. we at growing is at a XX%

very on We’re our bullish school business.

of have support the MSPs. see issues did we of back RN. with to throughout in get we integration XX% favorable can rate the capture for the believe the better that XXXX. of amount quarter. higher experiencing we that to that I’m from have We the quarter fourth continue tailwinds to at the to performance the Overall, process Part believe say XXXX we over MSPs reason was not for issues. our at up on strong to that making our the our we with Advantage we is quarter this because was in more fourth third MSPs. corrected and had quarter and support improve third this on Lastly, happy support We believe in acquisition technology track revenue to market RN a Advantage remains

moving trends for we these the us into the growth favorable tremendous greater years, forward is efficiently the more demand convert can of and company last key placements believe and Over renewals. four challenge has and how we experienced effectively

son we year, dissipate we have we we in the reached efficiency also believe to capitalize through stage our sharper execution greater on to more and the place where number the of While faced we recognize a that that quarter move this a in fourth will need development as opportunity. headwinds we emphasis

So we thing what foremost, are strategy. growth announced the we January changes doing are right challenge? and critical is development. our we and management meet the our to to believe do to in It in long-term for where are that First

accountable As apparent. bigger gotten need for agile more and more the structure become a and management streamlined, we’ve more diverse, has

role. the Chief Let’s Officer with start Operating

having a will than operating streamline want our Cross responding with such on before strategies, role years operations, acquisitions, role like know a so promotion. to excited to internal performance. a have Burns we and differentiations, to his had for a us him and impact relations, will I’m activities. the positive focus public more executive can officer company’s Bill this make in agile role, investor candidate a more provide in on I XX stronger that market this other developments, a what I and congratulate Country, We us expect chief company in on was greater dedicated capacity to I for coming

travel this was our and nurse has for separated our branch to focus excellence. model additional allied from on operational from operating reason a drive operations. the also business The the travel different operations. branch business main We Again,

best the executive Travel both As driving segment president-level is largest improve on believe the its grew, team business own was a market. nursing to from each the this independently and view We line. to focused having business bottom benefit came that the improving way model and growth businesses our we in the results. will significantly largest management

our patients setting and in outpatient which In to care addition, serviced from continue from ambulatory facilities, shift branches. we treating are see a the to acute

of have the our milestone. leverage more of few Financial our able team. opportunity a to success Chief adjusted allied through accelerating an ahead Having continue we Again, of has schedule fill we to nursing Corporate Officer, years, results, deep of Our internally. Chris these with are We focused as changes Financial are achieve team had diem am to clear growth we this Burns Nurse named action. I were and Allied from more already our branch growth our getting I years recognize that move more to These not achieve is the that that very X%. the original there. quarter’s to ourselves few and be call organizational year. review fill that and us of as to not President on let a there but Chief are enough Chief a as in to had we be both an reins result and goal, conclude, rest of would not Chief want also well us. can this congratulate per and Zaharoff, hoped how but of and this White, we new performed Branch bench, fast Congratulations our Marisa our mention a like to us his is momentum formerly getting on of milestone, driving Pizzi very this moment, the decisive we we We confident over we’re on additional that, as management satisfied margin made, in EBITDA pleased internal competitive our will and focus believe propelling a and to get thrilled the Business, In last business. on this significant taking We the progress just roles Officer, for To Bill Pizzi, area Bill meeting strong us believe promotion. the are there Chris Buffy have from the our organization the operations who president achieve Operations. this Operating management commitment in as becoming changes and differentiator an Burns pathway largest positioning we’re that, of behind Again, Travel our to our past Chris will and enough. With I Burns for to believe was only over build part while we of operational is build provider we Bill our turn new over the Controller, role details I last Officer, been team will Bill will detail. to Officer. Operating to provide Burns, new President that me local said the focus through we

Bill Burns

Thanks Bill, and morning good everyone.

very As quarter fourth optimistic future. remain do Bill did we’d as mentioned, turn about not out expected; our the however, we

said get to I milestone the us strong continue be we’re few X% a previously our target is in where to in term, necessary percent for as right course, in near to the the still the is and things. it path with not a us, adjusted the to to rather several that a to and explain favorable EBITDA actions moments, margin we but X% and case. We’ve We relatively is dependent endgame, for conditions, of want is Eight on business taking will our that be. market

more insight you Let need me do. some we to things a of the give little on specific

that bit or company incremental creates moment. investments in side. doing the are things gross business to continue in sufficient deeper we put has revenue, growth across get SG&A demand our adjusted which First, leverage. we growth third challenges the EBITDA have have a Generally, of to our XX% about the it the of organic and to we to incremental operating which I’ll of the assumes on we market our to to return a all been into line, can organic business, address business. normal about profit, grow in some part supply Though believe slowed have improved to a the our and we predominantly parts

to will term. the the However, normal alone leverage for be goal X% enough in operating us achieve not near

of The are focus. There right-sizing our areas the formula really involves of other structure. cost three part

are that these current underlying we process accelerating grow The we optimal and income the a size. a profit below and our physician Clearly, these by just this it’d preference we’ve at first their that business. a that’s which cost has still positive is profitability produce taken that continuing seen; to however, really approximately profitability, be ways our been of to is is of for cost contribution $X million expected them into into XX%, businesses. give of of the we businesses structure best recognize of trends the costs supporting search and and businesses growth looking both chance additional align business much anticipated on level that we for larger have Both the Returning to of in profitability. businesses than optimize longer the structure book these improved these for is our capable improving staffing and a

with to The efficiencies other big do our both improvement field has operating and functions. area operations for in corporate

the of automating processes. opportunity and not have we various realized and fully variety For reasons, functions a centralizing from standardizing,

activities For example, on-boarding have processes some they like to candidate from degree an operate businesses operations with decentralized in and overlap fairly staffing disparate perspective, tools. our vetting, credentialing, yet of continue and

me in things line on of result point that our actively direct in to are the better it’s attracting We’re cost plans Costs top this sight, so to effective necessary that us, drive and in profitability all scalability, to drive to growth. time there means to to improvements do We XXXX. earlier working generally will at, talent. productivity, about to need since line for is get the to need ultimately easier a most and I let efforts supply. return mentioned often at of continue refine efficient candidate we attraction

presented candidate all touch that the as competitive quickly with critical at possible. the cycle work We’re and success speed market, as make to as actively candidate sure certain are want engagement opportunities we to is this life looking in possible. that is we of with the easy make and every In as to to of points best

improved on in to seen costs. we in candidate rates a is Another drive wrestle by retention, they their growth a spend our and decline We clients particularly continue driven area or allied mentioned. large organic XXXX, our to Bill pullback businesses, as had renewal with of expect predominantly focus several travel renewal by the of as rates nurse that

we in already and means more our for this there improve XXXX candidates believe improvements working we of initiatives improvement. line incremental, early started already historic see are in actively experience, continue to so further year. obviously with we to While renewal on new have will rates retention room have more our the started and be Higher to are is

Pizzi, gained a I a more over as to and can now an how four as Chris effectively appreciation slightly to I’ve Cross I’d note. company. business developed into been share personal like call the the Financial just Chief Before I more have Country turn we Healthcare with the for insights and operate for years, Officer

we collaboratively businesses, of cross-selling, of and core for improving portfolio working processes. tremendous our for opportunity our many across Looking streamlining have for more

some predominantly have While Those hand I’ve companies. finance, successful different the been new task industries role. at in spent worked career in many with my well incredibly my has me for prepared experiences in

focus forward we taking updating on precisely sharing that staffing remains excited across new need our Seeing focus clients so for on move execute with about look majority our role on improvement I and through role. on fronts. on to clearly am our our throughout our solutions, I plans While of the the and is to progress have XXXX. that we my in can a value insights time we more well delivering with you as all you I why recognize we significant opportunities specifically being to where this

Now over Chris results. and review call the quarter Pizzi, let me who to year fourth turn full the will

Chris Pizzi

Bill. Thanks

million, driven full of revenue year, Advantage the For prior by X% the was acquisition from up total primarily $XXX year RN. the

Our XX.X%, revenue or gross in year. EBITDA profit with the prior margin down $XX.X compared for XX X.X% was basis points of or the Adjusted of prior as year. million $XX.X X% was the million revenue from year

shareholders the in was to income were attributable share quarter compared diluted the and prior EBITDA below for primarily and $XX.X $X.XX Adjusted with the compared or year. due our or common Revenue rates. overall year. guidance net in allied was $X.XX $X.XX and fewer Our to million $X.XX $X per in adjusted to per placements nurse staffing lower prior business million renewal EPS share diluted

From also through certain of Despite these taken improve has impacts the rates standpoint, operating an increased higher we as year, leverage margin gross in profit well steps disruption Irma. the than guidance. its from the experienced to our over prior events, premium as containment measures. quarter a reduction Hurricane the cost company We expected within ending leverage the

costs the we of $XXX,XXX result, quarter. a incurred restructuring during As

higher renewal revenue quarter, from and down was year $XXX.X the to placements decrease sequentially. offset mainly existing rate The in overall lower primarily travel on project declines acquisition. our legacy X% down the points the staffing flat million, volumes profit up and business for and and businesses. rates the decrease allied in The and to total legacy and year The basis Advantage was quarter margins Turning insurance improved in costs RN XX.X%, allied was year. prior primarily non-recurring year-over-year which in fewer health the due was XX to prior increase nurse Gross business, incurred by were lower by nurses, the driven prior compensation the X% physician nurse in to related and from sequentially. the business our and due year, year-over-year margin was prior nurse premium our workers’ sequential

shareholders our taxes of Adjusted assets, expense that income, Depreciation amortization the of valuation pre-tax our statement, income revenue in $XX.X made until Act. offset to revenue was The and allowance tax common to expense non-cash XXXX for impairment in year March ongoing XX contribution which deferred loss in the million, are $X.X adding $XX.X with declined by as favorable adjusted the per driven the $XXX,XXX majority was the the a SG&A million or $X.XX expected was RN. net notes, and the year prior consistent diluted to in third $XX.X down diluted of income million was $X.XX with million loss down with was quarter The offset increase million Income deductions. cost driven acquisition. taxes million our Advantage a on and compared allowance the the X.X% revenue the EBITDA valuation shortfalls were charge by normalized adjustments flat driven income our interest was compared the release a EPS of income was staffing of revenue million prior of or offset the in effective the in as X.X% of prior net by $XX.X Moving quarter be Advantage and for convertible non-cash declined and to the the SG&A or Interest year-over-year million the year, sustained included and we prior in $X.XX the partly of quarter Adjusted the $XX fourth as was of flat quarters a Tax containment $X.XX due were the $X.XX exceed attributable tax repaid the year $XX.X convertible year. our during notes which by quarter. impact for $X.X consecutive quarters. for from net included per March from valuation EBITDA, of Jobs prior our in X% million year pre-tax $XX.X impact sequentially. impairment current full loss allowance, investments taken our year incurred sequentially of million release due in to income paid XXXX. prior segment prior of XXXX. was release the derivative up $X.X by million, future XXXX. The and million resulted of more the charge. the the $XXX,XXX partly flat The which and repaid related projections $XX.X will tax share X% measures rate of or remaining share Net was on should and $XX The producing year-over-year $X.X we believe million, a to RN revenue and higher with our the coupled Due NOLs due non-cash the benefit tax cash sequentially. prior despite a compared physician down Below to year. XX% on rate Cuts to improvement non-cash employees. in in for

results three sequentially. for allied quarterly segment for the flat the business segments. our let and and down to million, our $XXX.X Revenue was X% year nurse Next, me review prior

in and in Advantage per by nurse year-over-year segment due While business. our lower a the sequential allied legacy nurse our healthcare RN offset volumes we and was to volumes We averaged year was field in and FTE from $XX.X from the mainly Revenue by $XXX, prior staffing the our X.X% down basis was year allied million, the Segment the XX education quarter per down sequentially. prior growth and sequentially. XX day business offset up decrease was X,XXX representing lower down acquisition. business quarter, from X% the margin, and year basis, a the points contribution basis sequentially. contribution experienced up on X% prior X% flat were for the X% points for The FTEs

a million, in down segment, prior of Turning X.X% our next physician physician were filled the XX due shift and due margin, a million, mentioned our employees daily specialties shift the to to lower contribution was revenue and from investments and the down X% led down representing the has $X,XXX X% sequentially. quarter in business. year year-over-year which of practice per from advanced lower $X down which contribution in the year business revenue growth earlier. in made points was the business declines prior driven income producing leverage for largely basis was overall the operating from within an prior to day impacts points XXX largely Segment These to Revenue staffing year a the generally sequential basis $XX.X mainly to bill and in mix business, staffing X% mix in due Both sequentially. were mix rate. our declines by

and search decline prior fewer in primarily and management increase to of and year of our prior $X.X was from The physician in was an revenue a the human to year-over-year sequentially. executive the during while quarter. compared X% search due a Finally, retained placements X% sequential quarter. was placements to the loss partially services for $XXX,XXX a million, in placements, segment was as decrease the increase other searches offset of $XXX,XXX growth contribution higher by the year loss prior capital number representing of breakeven due Segment

balance at Turning of quarter to cash par. $XXX million outstanding of sheet, the $XX.X with ended and debt the we million

December million facility. of we not on any have credit As drawn revolving our amounts XX, did $XXX

increased operating the to an year million XX% generated million, quarter, During year. full which of of $XX.X the prior $XX.X over we the increase cash

average XX the of our three-day increase with should the we Our DSO DSO at mid-XXs net exception ends. was timing a payables Generally, subcontractor of year. representing prior from believe certain the period that days, for collections in

For in expenditures our expectation. the line our were $X.X capital million with and quarter,

brings me our first XXXX this Finally, to quarter guidance.

revenue be year-over-year $XXX growth. to XX%, between margins reset million and reflecting the range are impact Gross between expected payroll negative consolidated points. to and to be a $XXX XX expect basis of between We of profit positive X% X% of annual XX.X% reflecting sequential and XX tax million, the

EBITDA, lower in gross adjusted reflecting expect million, million decline profit sequential $X For to generate and between $X the on revenue. we

is between $X.XX EPS adjusted Finally, expected be quarter. to $X.XX and for the

Our million expense, shares. amortization the of following compensation million million expense, $X guidance interest tax of depreciation stock and estimates: assumes expense, expense, $XXX,XXX $X.X XX.X diluted of of million of $X.X and a share count

the Grubbs. turn lines over Before questions, Bill call back would I to to we open for up like the

Bill Grubbs

headwinds our orders across an are we To our in although the the driving into will which trends of fourth strong QX, thanks and on business. of in businesses. Okay, I quarter, we in underlying increase Chris. am encouraged wrap up, some about had seeing Demand remains all market the carry

to focus track should on and on approximately organizational Advantage strides MSPs Our making us and our strong. We business and MSPs new year, $XX execution changes give ramp renewed RN of remains MSPs. for still higher operational goal is to last our we at improvements. million capture at our pipeline of won rate support have a

point drive an on and concludes open levels work this We’ll up to I’d back to for questions. continue shareholder This have our our QX, seen in normalized diligently value. we at renewal Although prepared more lines rate Operator? lower on to we and saw nurses QX. in that improvement remarks, like a the to to build

Operator

[Operator comes from Capital instructions] from Street Our Markets. Lake first O’Neil Brooks question

now is open. line Your

Brooks O’Neil

Thank Can you you, me good morning. okay? hear

Bill Grubbs

Yes, no problem.

Brooks O’Neil

press benefits the that remarks from were you further, release new in be a think to I steps to you and going mentioned them operating and largest When you you when prepared take also you your see in in business. Bill, completed, those costs initiatives great. results? Okay, travel system your then think commented reduce your do and about to in will do expect

Bill Grubbs

me the one start first. Let with second

the towards I’ll Bill be the travel won’t that’s replacing baby. because savings So of let our nursing legacy system his XXXX. Burns end complete in initiatives, probably you business about until the cost tell

Bill Burns

so you Yes, three the here. really businesses is us focus right-size areas physician to several say, search, of it over that cost One struggled, take so what’s and two structure. next that either as the there understand is be which in structure to staffing is to have we’ll cost right-sizing Brooks, at accelerate or going to on growth looking that months our the heard

We conversations. having begun already have those

parts other of cost action-- The the

Bill Grubbs

most of in get year. that $X million We’ll this

Bill Burns

Yes, realized should really be fourth of goal, there’s this operations by we’re on side. we you anyway. quarter if I and two mentioned. the mean, look - one what but rest recognized it substantial the won’t the our at chunk Then it I year, talking pieces is One on all of is a that’s corporate the have about,

millions onto we you we our be on conversion streamline on our our going in targeting corporate at publicly way of that and and and is same expenses, to that’s probably like continue certainly dollars things some the one so businesses. operational an we of don’t how a We’ve definitely and as we When of getting have completed also of The envelope the at--I’ll it’s so things the but credentialing common don’t which is look opportunity on-boarding, get that’s focus some our for something somewhere I at centralize at mid savings the to think we look look most but drive all side. They functions, of these on organic things just that generally in attraction. through to find single efficient in have that’s side. recently we go here, When means. rates, system mix speaking, want there real candidate give we’re our the only give savings, all continue the for activities of like go our office, across the effort as sourcing should we that, an to effective to the just rates as back cost of organization the corporate I expect As us. etc. to the the you we challenge key conversion but candidate mentioned things back of we ERP we you a growth look mentioned area of about not there

to So are and through, business That operational of green will so that homegrown somewhat efficiencies should as efficiency and ramp that the both mentioned. screen second XX-year-old travel there savings. the is systems recruiters have revenue producers, go yield people old system see additional on for tools more tied time side an to have well we’ll improvements as to more the those expect time also but our board system activities, on activities off is is live. productivity the in type the as our the costly portion we or and to of project of then more a and operations nurse that of driven those get take Maintaining implementation Bill bit operational

Brooks O’Neil

I’m I giving about you know talk QX. just speak the Okay, and in and have QX, curious might expectation impacts QX little for you’re be of but just me that seasonality QX understand guidance to is and affecting bit. Can a to not for then what little assume surprised confess, a us and about beyond. bit I the I XXX, outlook then - improvements a little all fairly significant I your your maybe guidance bit for how

Bill Grubbs

grow in Once disruptions we base do was partly reset, XXXX, believe let We set QX. assignment execution have XXXX, is the lower QX all with to me in just not from believe the adjusted the you a to good and our to were margin for out rebound quarter. of so in EBITDA but in our number, in start issue and these I you year, improved will that we Yes, XXX, do and and second full organically one. fact an an guidance that’s we we this the travelers QX. to giving don’t that one very due on down the that QX from on feel over operations base are strong, once QX decided from and yes, do it not like starting that debated we’re year talked revenue savings the - about weak that, about. looks cost partly Bill We growth will

we’re up renewal our are fairly We seeing QX. rate well, conversion are we back hold capture rates in levels our go our at seeing seeing MSPs, to rates our normalized

reset just You quickly QX. don’t when base you in rebound the that

to softer the base back the So QX we market QX is trends, base. build than execution, not not in reset that and underlying about other about up from anything just not about got have else

even that. are, we where about good the aren’t feel though showing I numbers So

Brooks O’Neil

this Okay, that’s Thank good you much and helpful. luck very very year.

Bill Grubbs

Okay, thanks.

Operator

comes question from Tobey next Our SunTrust. from Sommer

Your is line open.

Tobey Sommer

you fill rate business? describe fill very quarters, Thank recent in possible between if the your current and total the trends company much. MSP you and delineate rate Could and

Bill Grubbs

that’s the We - call the more mark. so to has at was a you towards quarter. hundred give MSPs, what gone not the we high mid-XXs a fill I’ll relative. It’s It a referring well said it you’re think of passed fourth couple Okay, basis rate XX% in before points, it’s from now. XXs up capture I rate. the our it the

that is We in the the that to renewal a said, from lower or rate our going forward. pullback those pulled we points rate, expect MSPs the so why in key basis to I - filling of renewal The from that MSPs problem was offset which lower, going somewhat expect rate above enough continue to were QX, XXXX not ourselves of and we’re capture back our perspective, rates hundred go a portion sequentially, some as customers. up capture is couple and is XX% increased

XX bit, our of XX%, little third of you did QX this our at to the I last look these the of today. went what other It of that believe, XX, Because MSPs from here go year revenue quarter. QX me of to the from sequentially. total percentage guys was is to basically--well, in was tell let and down pullback, XX One it from a XX--to It will year.

Chris Pizzi

- XX.X flat to XX.X%. about it’s Sequentially

Bill Burns

missed If flat, Tobey, of question, about XX%. part So I your it’s sequentially, just remind please. me

Tobey Sommer

that in The place already first? commitments trying the need how to you increased to the the to position maybe continue increase the business. without understand No, to question. an MSP of I new to pursue can new making established in I I’m Maybe substantially rest between customers put MSP ability organic way to Is dynamic ask to an you’d a pattern good growth. here is company or of balance of MSP placements it could understand ask another and just of guaranteeing I’m kind business, trying book reason placements for

Bill Grubbs

and done that’s we’ve believe to Right, can at Burns various needs that before a that’s candidates actually get MSPs. help question candidates, holding for think attraction up formats. I candidate new believe don’t and Bill answer. increase ramp either-or and a in and question, well had to very don’t but think good mentioned at that will can only and capture is Yes, be we’ve we do we rate. not focus we us an think back. that MSPs retaining it that both, our us us also I I big new attracting better our I do

doing the don’t the other, to think we be it I So for one needs stop one need other. to or don’t

underlying our happy we’re delivering and our good service have we’re issues that. you fact I our the don’t are Our didn’t with that pipeline very to--? the it’s have to relationships, proposition, we’re service that numbers, It’s MSPs, we any do agreements. ones. disruptions want lose any value is customers mentioned, as MSPs not level winning MSP so them all performing a the have at like Bill, new we and customers we meeting with we’re not these for are strong not affecting We in QX,

Bill Burns

think, the other just the service forward large with in on as as to I spend not as about, we’ve our we and the talked say, capture to continue moving direction But that we the get to increase any say to would full operational leverage would us we to business I having expand gives faster. opportunity guess yes, rate we’re the an Tobey, go the growing want right I we continue get as things Bill issues supply management. accounts. mentioned, We

get continue if leverage the in We’re continue network back we our right on [indiscernible]. of the either and to to grow I said, to full able we’ll recruiting SLAs, our capture as track growing our and raise our rates subcontractors rate renewal direction, to and meet

Bill Grubbs

difference billing, believe us. capture that’s that. for we’re to So by out continue at comments Irma forget base back we’re and We efforts, a and number doing can To XXX to we get a to on put rate without attraction our Bill’s that the about it’s it, our if lower do business, can continue disruption of it we huge above basis the to market not at not people the resetting increase We better or points we candidate quarter, can and we enough doing disruptions. those growth. like grow to not get all think just a

So it. it’s job not good just about of about we’re improving a it, not doing it’s

Bill Burns

at as believe as we’re, as that an and or good that you engaging mentioned, we no with to healthcare fast opportunity, everything so matter sure can Bill to how at Right, this, we’re be the as re-challenging to there always and make looking we agile get with improve, continue that is we do professionals.

Bill Grubbs

me, the business, either enough to best biggest Actually, to will and in and isn’t make customer more or the point operations is branch be operations, not term that changing needs, decisions Burns put we think is and it’s business this our market not structure and our nimble faster I marketplace. our to to isn’t the market adjust able our remarks, focusing that’s our that changing been place. the prepared adjust from this we’ve day-to-day separating needs nature changing or With believe travel make nurse on us in nimble probably things in and short these enough that disruptions that’s our regarding to fact challenge agile have the will we why to XXX% Bill new

Tobey Sommer

you and well to Could that systems, new that color--additional the in investment you us about give thanks. as the new cost Okay, hope other achieve me, migration, savings goals some as expected timing? color, excuse

Bill Burns

million anticipate we to Sure, and year, operating XX% so of quarters about quarters three million this being timing to up XXXX XXXX $X to of fully the first and of year, of $X with expected next is between in in be and ramped and expense. spend about million of the million fourth then $X going spend the again that $X second

million-- is a savings about few overall the think I targeted

Chris Pizzi

Yes, we to sized the specific haven’t it system implementation.

Bill Grubbs

but Okay, will system millions step us the X% the of over implementation savings gets the be from of final will there we so that be that this EBITDA, dollars of adjusted two-year over million need a get X%. about project XX% completed to that a of about to it’s do it $XX to to capitalized $XX period. million this total be But with

Tobey Sommer

the Okay. slightly should XXXX a the in we with investments about quarter, down or just don’t I like place starting is the flattish but think and first more know a year guide EBITDA as it lower you year, the year, for potentially?

Bill Grubbs

and don’t expect No, and do be QX Bill I our I growth be staffing get better in it and to believe down. it don’t profitability will will Burns out we QX. QX, to I flat search certainly business. of physician expect our get

put cost in some initiatives top quarter we that, already that through of on into so savings the We quarters have that carry ’XX. fourth cost have in some subsequent we will in savings here

and in dollars a we’ll no, XXXX. increase I adjusted have percentage in expect decent So EBITDA

Tobey Sommer

from get what’s in I’ll Bill, term appetite, back for question me your acquisitions? at least and Last near the Okay. queue,

Bill Grubbs

It would very be targeted.

on help feel very off back I rate. my But our good so got in target to we biggest to on start with capture slow to starting us Advantage that a would Although business. difference a now, RN and be make QX, increase the that’s that’s track school

and is has XX% bottom over Our year-over-year school line. business growing a at--we said great it

we think We opportunistic probably line table area to the if came one business improvement be that room in I strategic else that that across the has and number made we standpoint, on I my this have some the see good a grow right rest and great sense? bottom Would expand, focus would talent revenue and now then looked but at making from think so that would sure at. do my point be look in something XXXX. that that and to of schools for Yes, be

Tobey Sommer

Thank you much. very

Operator

Jason from line Plagman is from comes your now question open. Sir, next Jefferies. Our

Jason Plagman

non-MSP further just morning, on in demand. market flows down a Are between business? bit and Bill, to difference wanted Good order any MSP little I guys. clients your seeing the drill you

Bill Grubbs

bit. A little

we a quarter fourth As a few MSP our are orders up. but little the had generally larger our in bit, of MSPs pull back we mentioned, going

sequentially year our In and over saw been several are they’ve bit every fact, until pullback year we in in QX, the up quarter, quite still up customers. though actually, strong pretty orders a going almost the--well they’re even up

see--I QX we’ve stat, is and no, half won. and seen increase that don’t So half that we is general to new MSPs we’ve have the from market that the to exact QX my but guess QX probably QX

Jason Plagman

but Okay, flows as seeing are well? you in growth the non-MSP order

Bill Grubbs

are, yes. We

Jason Plagman

as wanted Then what to--as out, each just you’d there any QX dynamics for those performance the and for--your two operations your far in outlook I sub-segments? Okay. and outlook QX, that or performance of difference in the branch was call the are nurse in between travel

Bill Burns

we’ve still I really due coming Burns. and is quarter quarter. actually we in what’s first our the would our Bill say fourth out that We coming from This of the growth experienced for education QX? predominantly softness to that’s reasonable travel the delivered nurse impacting of In business. that guidance the business, have the is in QX most impact

We performance business, soft performance in actually decent physician search business, our we’re have so-- continued and expecting our out of pretty

Bill Grubbs

allied has grown. travel And

Bill Burns

this into well, about the year. so really they allied coming exited it’s --and as travel and been how travel nurse year,

to--once to time at As Bill the back takes that mentioned, build those you rate, new it core. run time orders up exit take

Bill Grubbs

plus down going a of have into a whammy double you’re in as from. a XXX lower so QX well, year obviously have have you next to rate just QX, you’re if those extra back would you percentage high hundred that of renewed then couple into nurses carrying up know, nurses build that kind of off You

the up seen month, first - growth have It’s make from QX. the seen headcount the quarter week in disruption nursing. up of the constant build have harder since billable through We in it first quarter, travel of in to our shortfall just February, end this we

Jason Plagman

period? so know, is growing? makes less this sense. see--you Yes, Did during operations, been declining performing How that branch that that that is the you or has or flat,

Bill Grubbs

very quarter, had growing specific out branch I you the and at the on high well. until operations give know guidance go-forward single basis, business fourth in the been been growing if It’s the subsectors remove of project We that-- numbers, but don’t up digit

Bill Burns

only right it of the business. now, had project that is a Yes, the lot challenge that’s

Bill Grubbs

if But project digit the business numbers. take of at out growing high you single there, it’s

Bill Burns

That’s right.

Jason Plagman

that guidance you or any Great. for guidance that last margin is me, more QX, about How gross you margin? seasonal gross the feeling pressure Then are seeing XXXX? for just the mix are for for QX one from there,

Chris Pizzi

really anticipating be points. to we’re due that we’re payroll in decline which basis first reset, and the to quarter expecting the the Yes, between mainly tax is XX XX

Bill Grubbs

wages But that on pricing seeing affecting margin. lower particular are rates, negotiating or we’re to negatively having our customers we’re pressure pay not gross nurses higher that

may basis and think starting the off, points. it XXX not premium have should We’re rates, half another overall year-over-year that. been simply by are rates of The points, a that thought we point the premium being and was not XXX QX some two down of the our hours is of had down where obviously give of affected color the that’s case, or to and normalize lower were it’s overall I’ll we percentage being rates a then to hours percentage that. by and leveling basis QX year. in level seeing quarter it it second so rates, from at little a We premium our total of rates you bit of on off Premium sequentially

Jason Plagman

all Thanks color. for the

Operator

you. Thank

next Our from BMO Jeff comes Markets. question Capital from Silber

Your line open. is now

Henry Chien

guys. Chien calling morning good for It’s Hey, Jeff. Henry

Bill Grubbs

Henry. Morning

Henry Chien

correctly wanted the decline business question, in the from impact premium renewal clarify guys. the--well, just a rates I talked the I you the on understand had rate the lower that to Hey and that I’m but understanding terms earlier, little for demand rate rates as having going renewal margin on staffing? of there on seeing bit a about you’re why or what’s lower why you clients much are not and higher can premium elaborate in just hurricane,

Bill Grubbs

that contingent were before back labor the specific few they professionals to rates would normally needed customers their to they was, year, that renewal in particular have get a so number so the spend had healthcare really extended of the on didn’t end few the the the a so customers, Yes, cut quarter. pullback extended that of whatever decided fourth in we

to money big select - very a rate it’s a basis it’s When now I in a that So to whole specific back labor. back I XXX customers To normalized here, decline. overall grown they sequentially normalized rates with like We’ve said, more went how terrible It my contract that years it QX, a down want first be it renewal number had honest contingent on as went basis sticker of to just looks our points, level saw you, QX, that, now. is so XXX fact, trend, points were in that’s their well, by to but which down did shock specific not on to in because much those looks higher five spending they Premium renew back. quarter it ’XX specific looked very it rates what in ’XX, of here or healthcare when at in hours fighting to in higher XXXX, healthcare pay over it to in clients ’XX the so was to total XXXX. we was ’XX certain the until fourth looked percentage quarter, heyday at almost and before to our In got market what be were been customers. I’ve see for has professionals, went get professionals. premium XXXX, what percentage try everybody able bid this we billable rates, of do was the were busy willing exact been back really same we every it’s think up and and to the and

quarter of quarters hours in where believe will a it level it’s premium that to be will used Now, a points seen XXXX. probably we’ve demand rates. through come percentage it be two as the to the premium basis off such down, a level, as don’t levelled to the slowly has they or and now of they a of But market rates point a more each after normal XXX normalized much normalized our getting pay next about billable to, as quarter need to so we

based off from ’XX it’s ’XX. resetting market that levelling demand of the heyday So a and just on the of

Henry Chien

at Got and that. it’s get year any that the guidance be in it, giving I trying at normalized would quarter a that curious that, growth whether this sense nurse later and okay. you’re look allied. of your of you what what could for level, thanks helpful, to but full That’s difficult change for of growth in or predict any I’m understand that’s a orders probably metric just the to you year kind try to not like for look if look and

Bill Grubbs

a X% so where year-over-year or an think playing the even Yes, field X% should growth is given we without be disruptions, getting we to.

So onto things get back growth. get back more think we can single a we QX, close we after to mid digit level to normalized

Henry Chien

Got it.

Thanks great. Okay, much. so

Operator

Thank you.

question Our from AJ next from comes Suisse. Rice Credit

Your line is open. now

AJ Rice

everybody. A couple Thanks, hi questions.

didn’t you or and Was see first per You the the got could have that it’s obviously do lot quarter? on - your business. any I diem in branch had I see a it or some guess of mention press, flu impact it there impact could any but flu,

Bill Grubbs

part QX. with the is the in therapy allied actually. actually--is flu. our a growing The did branches why benefit do, We travel of travel from respiratory allied of reason our Actually lot was

did though it of pretty on are starting enough come week to still still the it, it’s carrying we and to it’s from to peak, QX, even enough impact track flu and every off season disruption from from offset but helping flu strong certainly a it’s the QX QX, a but we’re overcome wasn’t it. offset now. into but it positive it we see is the to so So that certainly not its season, We seeing see did disruptions that

AJ Rice

of some talking the allied, sounds specific. you challenges When and like it hear I in mostly those couching you’re about company the as nurse

would saying sort are of like nearly or you You’re XX% so. it’s you seeing important or as there? Am a still know a you say that sounds on of that’s locums, you segment, that’s--that is market. What not would hearing underlying good. how but tone market right pretty the what see in--I describe more that, you I it’s the On

Bill Grubbs

specialties of out business. now, so or the psychiatry, had in perfect in that’s worried lower radiology, we once. physician some maybe let customers--you but five Yes, I storm I’ll I four, Actually--you two care, of areas. is not shift had that We mix hits everything I’ll staffing [indiscernible], be just market kind growth but change where cents. several of add where told growth at our know, primary a think Bill our the if I I’m that don’t it’s in those Burns start of of particular know supporting, him driving than other - we know, bill our were and mix. at sometimes had our rates his that MSPs and may some in the of just the

itself volume off guys. from confirmation X%, - the was So about I’m X% these and getting two the was pricing about off

if QX So volume much. really hadn’t mix was the in X% changed the with line QX and so

Sorry, Bill, go ahead.

Bill Burns

It’s okay.

Bill Grubbs

to Anything to you add want color that?

Bill Burns

No, I was that think perfect.

condition. the advanced I think practice demand is market we’re seeing a certainly

on and we’re getting around the more marketplace, speed. ability because to is is side to on execution so execute that the our recovering up team physician side, still in softness it’s Our there the not

things. just doing I It’s right we the think execution. really believe visibility. metrics, right about we’re that all now have the the I right

Bill Grubbs

as $XXX coming base. million, make if sure mentioned, $XXX have that we that the the see an million business, But infrastructure they we the and Bill so Bill supports probably revenue will don’t both volume right-size back, cost

AJ Rice

seeing any or just around or Okay, becoming MSP, part landscape it’s for the commented competitive reason? shift lot thoughts of either a but the looks that I like? more wonder - dynamic I the MSPs know not, Is and are any you environment about what then you’ve on difficult competitive

Bill Grubbs

in bit the see years the players have come in growth them little do hasn’t dip of smaller industry, certainly we seemed any we to used that our their that toe to the heyday through we some water are Yes, to. and starting big of customers. more than up have lost win providing it It a hasn’t affected affect and rate MSPs, our percentage

positive is two, I going and I we to my new was won we think netted - lost we XX numbers. our double for programs, so check XX this Chris just think year number

Chris Pizzi

Yes.

Bill Grubbs

year, I don’t pressures at XX a causing two with and additional I I point. mean, winning think I’m keep losing So so pretty if us any this good that, it’s on

AJ Rice

see any your reaffirmed margin last of target you question, Okay. I on X%, update you My know when might thinking about that?

Bill Grubbs

technology get and XXXX, we need of since or that is to by in look with to that think a X% end ’XX--sorry, push going to would of I rate Yes, the ’XX. line, over we get third fourth run final by travel end not change of the to nursing, the quarter that’s the be of until

push will So us final that the I think that’s edge, over what is element.

AJ Rice

Okay. lot. thanks All a right,

Operator

Thank you.

& Sidoti Company. comes question last from from Our Ramgopal Mitra

Mitra Ramgopal

hi-- Yes,

Operator

sir. moment, One

Bill Grubbs

there, Mitra? Are you

Operator

just check I and One on moment, sir. ahead will go Mitra.

Bill Grubbs

Okay.

Operator

Mitra, please ahead. go

Mitra Ramgopal

Hello? Yes, hi.

to and you the implementation years support that? comfortable made about to investments past to was having next support wanted XX-plus where can two I how I years, for to of you’ve that investments existing you example, few are the to significant on significant know another up stand as the wondering without in ones the Just follow over you’ve XX, make that. MSPs. you it averaged win relates and continue to

Bill Grubbs

make to need we think don’t investments. significant I

win another have We’ve achieve that I a pretty decent I’d decent resources not one a XX couple is far, need this won we year I’m already year. predict so we a amount a think size. sure what of to to.

they a as them a We’re this us cultural the from to rate standpoint. from being makes win selective of sure fit to as no, well profile continue that fair a standpoint sense we our a make standpoint, some on geography that good more year. little expect as to and well as share have a for we bit pipeline But

think the to win on to of more wins, but target $XXX we the than so is than We’re I XX dollar year million we win another less may try number the amount of and are this focused revenue.

Bill Burns

Burns. Bill Mitra, this is

live, were handful We are that not that have a yet recent wins.

the that their but the is that we number or For continuing throughout be forget that are from win estimate or about probably will derived that size dozen the a still ones are I the so that $XX on ’XX, did is ramp. management We exact million. additional spend there

Bill Grubbs

that’s point, progress, so this year. that’s up for right, good in that’s ramping a still Yes,

Mitra Ramgopal

questions. Okay, thanks again the for taking

Bill Grubbs

Again, us Okay, to you We our maximum. everyone May. today. forward joining reached early I updating thank in results quarter we’ve our look for think first you on

Operator

A replay conference March today’s you. be through Thank available of will XX, XXXX.

X-XXX-XXX-XXXX dialing XXXX. X-XXX-XXX-XXXX. access the may joining. code replay You use pass the Thank you for by Please or

You may now disconnect.

Cross Country Healthcare (CCRN) 1 Mar 182017 Q4 Earnings call transcript