CCRN - Earnings call 4 2023 | Cross Country Healthcare, Inc.

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Operator

Good afternoon, everyone. Welcome to Cross Country Healthcare's Earnings Conference Call for the Fourth Quarter 2023. Please be advised that this call is being recorded, and a replay of this webcast will be available on the company's website. Details for accessing the audio replay can be found in the company's earnings release issued this afternoon. At the conclusion of the prepared remarks, I will open the lines for questions.I would now like to turn the call over to Josh Vogel, Cross Country Healthcare's Vice President of Investor Relations. go please and you, ahead, sir. Thank

Joshua Vogel

and and our is and year President our call you, well will Bill Financial include good Delivery.Today's available of made of President first XXXX our as quarter the based John earnings currently for afternoon, to well press by today statements as copy A on the Officer; forward-looking upon Chief for crosscountry.com.Please release our financial as at available joined a beliefs I'm Burns, These of it. of Krug, on and statements call website full the note as Group of may everyone. Martins; Thank our XXXX. certain Marc our company's Chief reflect results discussion information Officer, Executive statements. quarter outlook that constitute this fourth

forward-looking I this non-GAAP calculated as is we substitutes contained press More accordance XX-Q in are update and well GAAP. financial or to measures with additional vary non-GAAP financial these Also of in EBITDA press or other those as XX-K we related release. contained be and provided release.Additionally, forward-looking The as the in financial though next measures to those adjusted during our such included information referenced or including its numbers for per uncertainties forma not the prior release, earnings guidance from statements acquisitions, noted call, information reports will superior risks, pro to should considered Chief U.S. now annual XXXX and our to call results to subject John any earnings the that, the unknown statements As our when are Executive intend or quarterly were not results to Forms the non-GAAP filings to known company over Martin. periods recent pertain does presented.With Officer, adjusted Such from SEC. measures in on on to with as share. refer turn report actual in company's can may normalized most Form the excluded factors, as and other our materially and

John Martins

challenging thank year quarter joining and how to you, results and pleased market afternoon. the our additions particularly contingent systems labor.After their Nurse in this fourth full on seek segment we and Allied with to stable. was everyone, the and in first Josh, health travel our XXXX have Thanks, XXXX, as in us Overall, half reliance for ways responded of remained fairly declining demand I reduce

We new across in the to seeing excellence, in operational orders, and seeing we be our as pullback which increases for with systems of geographies. and are focus appears best balance sheet, services.And positioned our to year, year a near-term on are like these half well are of our record in performance. we weather following generated growth the I'd headwinds, and is moment company year to Country to back the $XXX the our full see EBITDA, on demand However, we innovation another ultimately we sequential of history, our translate nonetheless year.Now XXXX. well coming million in the adjusted into volumes, rising take reflect in to will which year health second coming industry-wide into believe as most believe specialties poised Many Cross

us level stock, clients.Throughout shares VMS technology targets. flow enhances effectively workforce and approximately $XX the that in of Management witnessed year. repurchased the strong than more Intellify. the We managing, This this of addition, of we operations, debt-free million, internal series X.X Perhaps to a year the sheet.In from generating shares rollout for cash on to technology balance for also productivity grow, with of a by the $XXX a our wins representing outstanding enabled Vendor System, our needs million X% leading deploying exceeded was most year noteworthy technology interest had accomplishment initiatives in this and of end anticipating record year, million which more amplifies and we XXXX our invested

well which fairly client had recent ramped. fourth trajectory sharing before these any from base growing for continuing invest spend is hospitals quarter XXXX as is client was coming very candidate-facing app plans include an the estimated rate want. deploy our continuing clinicians over DAS, with more a technologies of unique as $XXX help into on hospital volumes. was rebranded we've our revenue in of that be within fronts.Our to would services level tailwinds expected, the with attrition year, million half precise the is will was unique In focus a improve These that this roles positive of progress we and XXXX spend experienced which annualized lower in above MSP higher to for Data enables earlier robotic more benchmarking wins, deals aspirations. talent viewers also to Xperience efforts bill fully range, that their we interest and Xperience other a downloads a offering, that the a our Intellify expect we to power one clients year.It's and systems and the offers real-time will a finally, coming and time, always suitability. been closed and can $XXX leveraging look alignment their these sequentially, fully vendor-neutral from with of AI track on believe even providing in capitalize We December, positioned sizable we predictive fourth as Xperience adjusted and well $XX when visibility.From provide XXX,XXX focused demonstrating is a relationships and driving cutting-edge throughout to that verbal any launched second initiatives a process more range. with costs assess been validate enhance year automation. wins we us since integrated higher both at wins industry. share expectations between close other exciting, that from And many early through two costs, existing two we the manage on forward year-end, our guidance technology.In our these in will vendor-neutral we not our which Consolidated is we and insights on efficiency, year offshore over allow are their and down XXXX though for had client-facing it travel trends both careers total interesting XX% detail.As tool And we pipeline.The fact, on calls.Turning as though to agents have to to Services quarter perspective, and app our of in million, million. implemented sales MSP or be in in by more to Equally to with our was estimated expand year, seen which last job through active addition retention have charge are speed were clinicians which Bill I such the uniquely an annual having our on and operations, new mobile cover it guidance including sourcing our future to late left and our match our XXXX, road both the than than had both revenue for of high website. allowance to the we access part more programs, strategically quarter. XX,XXX rates perspective, doubtful Aggregation of a the the of note And and on matching, our as conventional grow that they ensures $XX and And some matching, robust million EBITDA end balanced year management expansion skills under very for on and fully place Intellify.Unlike Xperience map job In our we the candidate app on though accounts, to

bill expectations. Looking to stabilize with ahead, travel line and continue in are trending rates

around we clinicians many as our our clients on with in margins. out well As as a rates rate called remains expectations both fill have pay from previously, rates gap impacting orders, and there bill

we while balancing and X% run in higher As investments margin days the The continued share lines. and Physician dynamic, of an performance contribution a navigate profitability.Turning $XXX segment's with start higher overall revenue market the improved of this to quarter, the rate was this prior year. and the new we'll from an are in drive from organic throughout billable year will third well, order bill growth our of we annual to up remain Education specialties. we our mix preserve to reported XXXX.Our quarter that to the believe quickly million. up business its of XX% perform business making approaching continued school the business other ongoing following strong income expansion combination XX% year-over-year, Driving fourth competitive rate more Staffing than reflects

business the sequentially was Care year-over-year, flat Home a exited solid on Our year trajectory. and we though

we and five MSP care nine presently home programs quarter, wins last had reported in we implementation. As have

wins, to in of believe for the will our these turning this strong experience On outlook the I XXXX.Now quarter. growth organic backs business first

first trends the in on margin recent and Given demand to we with pressure, $XXX coming current and be million. that comments at million including revenue quarter million will my $XX $XXX earlier backdrop, EBITDA adjusted market million, $XX between anticipate industry-wide travel

and we climate, work beginning to taking margins expansion. a distress growth the to reset As calendar actions the annual the drive current at payroll want through year.I and margin compresses as we reminder, are the taxes organic of market

platform goal to necessary to [pay as accretive in In in and diligent higher-margin capitalize differentiate diversify to through across more the care further we a leveraging even diversify ahead, our M&A that cost such with close a remain continue diversify higher-margin on enhance our on and will our proposition as will markets.Additionally, that profitability, Country physician front we our addition and education savings MSP geographic as we well expansion into with ] acute recent India. on investments further growth serve staffing to settings, into into wins modalities offerings.Looking vendor-neutral several operations and can to continue Cross seek ramping to value preserve balance acquisitions to

India, The want continues let with by value profitable I in recently to with see and we I held thank confident kickoff.Coupled at health Bill. professionals company These increasing we where long-term, very choice. our leveraging that, intend best gains from work over by uphold, repurchases, high of and sustainable, for your continued making level focused prospects the culture Intellify, our locums, through Cross in our technology work I enhanced and care our and we XXXX. none of culture capital, back fact, share our momentum named opportunities.In travel, so something of care employees execute diversity shareholders sheet of company are well for and just pressures company.With this business. Country remain shareholder balance are as drive ability the for our our efficiency turn M&A about to were seeing of and our is ongoing confident winner a on we and the Outside for that additional and XXXX technology call employees.We the contributions as potential all broader company-wide a to XXXX tapestry about home our to education our are possible the productivity employer hard growth, investments hard seeing came closing, devoted of destination including best through and team deployment remain recognitions we In we investments, without me to leading strong Comparably! the to of

William Burns

Thanks, everyone. John, and good afternoon,

associated our sequentially support end As mainly get I'll and primarily benefit just by compensation burdens normalization workers' quarter in was $XX costs certain exceeding spreads offset the on disruption.Consolidated the was year. the XX%, potential. adjusted $XX to quarter with expense well like with line continuing over million quarter of lower range X% the the our for million, in several margin to prior center the of XX.X%. U.S. and dollars statement. pay to the additional business and insurance.Moving labor bill more our we as down segment X% sequentially represented plans near further as couple XX% we our Physician was expectations prior called majority the salary for better-than-expected million and unable approximately coming the and shared general with of Staffing, The to slightly fourth and income health points service year.As John points down we of administrative in high Since driven was was in performance reduced seeking across technology minutes.Gross travel XX the both margin Selling, are for growth revenue comp headcount term, assignments our and details fourth in to the gross and guidance our of partly decrease the excellence leverage Gross basis basis to and the year XXXX, are start as X% our of processes the the have revenue we sequentially XX% automate million, performance travel $XXX a attributed outperformance relates areas the EBITDA reductions the while reductions India over revenue invest historic due by of throughout profit proceed performance which following from extent rates. lower within reduced XX headcount, over continued on out, both highlighted, tightening demand our with we the down XXXX, as largely an with highest and teams. the and prior was by in pandemic.In for the in was a to range. we a throughout to headcount variable of by into of bill well as Education The year, down

just our million for XXX by $X approximately XX%, India physicians nearly grown headcount XXXX.To ] every in you that to India, expect Over in several we've double we in and quarters, give the some investment annually. we staffed last save context, [

remain spreads and to pay productivity bill efficiency softer continue amidst demand, gains. of As compressed emphasize continuous importance we the

to overhead well capacity margins identify digits the sequential organization our taken and to we to total date, as future in the while drive revenue, higher actions investments SG&A compensation will to lower quarter. are the balancing We with for associated looking growth.Based cost entire across reduce in for first opportunities mid-single on in decline decline as the anticipate

was the of and in prior flat percent a up revenue, quarter, from in fourth XX% sequentially As SG&A year. XX% the

savings technology. with deployment year operations, as XX% the a further goal Our of growth, organic SG&A as our line offshore is executing of to targeted leveraging the exit an combination well top cost through and by of

million EBITDA to payments bad $X MSP impacted for the has adjusted an our rendered requires expense.One by in services is phases our EBITDA for phase the of reserve efficiencies.We are our first the on in end instance, For increase above project $XX million, leading clients specific take expectations, pandemic, of should of have high launch an we of to was in of more as adjusted account. an QX. our to to our And completed, ERP X%. debt Though deterioration set fallen behind aging opportunities of drive revenue throughout margin EBITDA us that reported additional representing the that adjusted was

We we balance wound do this remainder the negotiated coming plan line client and the in not recover the in believe revenue drag of XXXX. performance top we've will have quarters.As continue a that throughout the on payment ongoing the with client, down with we XXXX, dialogue has anticipate to

X% reported on for in approximately continue situation have the look would bad to debt will $XX forward the EBITDA a closely quarter. to updates charge, we adjusted representing monitor the adjusted calls.Excluding provide future margin EBITDA, We and million

The sustainable over investments to have Our capitalize well margin, low to managing continue this we travel attain capacity achieving business the drawn representing fees make majority interest the to effective as tax The was was borrowings we adjusted December an of as expectations. average to year. the in ready credit. be XX%, of and the time.Since towards and to expense we're for the which platforms, a throughout our related can certain we ensure of we high the rate turns.Interest line was income letters reported must market goal amounts remains to double-digit when long-term profitability, outstanding ABL XX% the some continue single by on was believe million, $X $XXX,XXX, net on it costs expense statement, with as decline from expense and driven in effective our the the quarter quarter carrying sequentially interest in on The fourth lower fourth entirely essentially quarter. was was for XX% digital under prior of to XX.And tax items, down the income finally, X% rate of discrete ABL EBITDA

Nurse down the segments. revenue XX% Our adjusted of reported million, per the of resulted Allied of the in to sequentially in midpoint share overall performance and $X.XX and guidance.Turning year. our prior near earnings X% $XXX

Travel the X% travel sequentially, largest while and Allied and Nurse prior were hours over were XX% year. Our billable down sequentially business, for XX% was X%. rates down Bill down

or I were travel travel Allied double-digit continued within low Nurse disruption the declining as was feel seen another the segment, billable pullback well may to year-over-year to a up was and the Looking to start modestly impact XXXX. year, seems reduction of reported to ramp, year, of business demand, first year-over-year XX% second about prior down quarter quarter, X% that the most expect orders bill continue from the low the rise be coming we school seeing sequentially prior the digits.After rates primarily will the mentioned the our from decline our recent due softness on majority X% This in timing the the specialties single regrow per a demand last revenue down travel the the providing as we in X% from of the with catalyst in hours, And though believe start following and our while XX% year. wins softness the about throughout from in earlier. an into in continued up The Education geographies. range, issue travelers we've the diem and to labor of in over to rates decline to Fourth part industry-wide clients rebound, new driven by business comes sequentially existing as orders assignment.Our of growth half year.Also across holidays. sequentially local

primary specialties and and million and cross Staffing, prior a once delivered lesser and reporting XX% in strong as day Finally, top was sequentially. of number to the balance sheet. line, X% $XX anesthesiologists, the $XX The no in which CRNAs ended filled Physician year such an with days increase filled.Turning was year the over for revenue, a practitioners again per growth the up rise nurse a to the million average in cash extent, the outstanding debt. revenue in We driver

well With perspective, our days days, the flow, the million, the capital.DSO as cash in plan.From quarter, target. closer repurchase start share we from to technology year was repurchasing strongest make much in collections year MSP acquisitions, full accretive company have working our $XXX single by of operations year. in since And from sheet to the X to from cash operations XX earlier, the our our excluding investments strong large client and driven of net cash history remain positioned down bringing cash I help million continue a been would in mentioned reductions the days, we million under $XXX and impact DSO $XX and our XX as part in generated shares well balance in fourth to the further and flow

driven before an throughout and remains reflecting ERP investments pandemic goal historic adjusted EBITDA Adjusted for shares between guiding brings to XX $XX of guiding guidance and and XXb-XX to our investing We're predominantly the initiatives a progress repurchased more expected in and get and and coming this of decline line per both our is million earnings to a our million an outlook decline financing between can between XX%, based of at by is we hours an XX between first adjusted the share and system. tech margin shares. XX%.And X% new there used representing as $XXX both which $X of count From that bring plans.This now to our primarily be an the like me and sequential quarters.Cash in in effective range expense the depreciation XXbX-X activity between prepared additional margin of activities billable Xperience stock share amortization for to rates and with was trading interest million, and $XX believe representing our $X on our the Also expected quarter to rate million, million, quarter. travel.We're DSO XX.X%, and of performance questions. assumed make $X.XX EBITDA approximately Intellify, of such is Our $XXX,XXX, days, the of to comp during X% tax $XXX million guidance. we lines $X.XX perspective, revenue of an XXX,XXX of to under and in our of average midpoint we'd million, the concludes $X remarks, gross in a XX% Operator? and that for XX% open million below

Operator

will America. Instructions] you. Thank Our Bank Kevin of first come Fischbeck with from [Operator question

line Your open. is

Kevin Fischbeck

thanks. Great,

wanted sequential think which the guess down it? how growth to of you right in you throughout guess about be of So the to I QX year. versus I sequentially will trend that QX. think talked second you year, means just comments half made I guess about about that the QX things follow up way will the on Is I and some

William Burns

is that parts see other seeing a because it's But sequential it's across Hey, going on we're based with the demand, great point, how depends quarter. possibility much not come how growth we of for could Kevin, QX that at the decline on -- we the into I a this into still Bill. don't guidance business. travel we're all it of giving but year second

to looking as I on our to regrow. we back going the to at we So as know that's ramp when our we wins of not QX look out to But yet assignment travelers if as think our at we're it's John, don't to... or will start lens sequentially just and up. kind half -- want call expect whether the down you

John Martins

I would bit industry to add, of Yes, nature where a see back going in pre-COVID traditionally cyclical a you're back to getting now just Kevin, that is this to of you're dip getting little this we're sense John. a that think QX. buck diversification in But on I QX. from do we've with as with mentioned, recent and that opportunity growth, business, the that the VMS there's QX the wins to trend had and of our the an side, Bill MSP

Kevin Fischbeck

Okay. I it guess be starting half going industry Or then is ramp, the and assuming wins pick an from to in up a things when industry going get second half? it's you say combination to then the again perspective to of you the are you flattish growth? are is back then to that your

John Martins

look the way we increasing. macro it data, think I still and the at and high looking as looking at, remaining at are to you right, is Yes, and census start have hospitals

didn't insurance, seeing and year. up fundamental the that that, XXXX, we had the -- now And we at start to was XX% number the nurses. think this X.X% it's have in Act I shortage of in -- point the think is.You demand demand will nation have still there Care at and look, of Affordable Looking one we're pick seeing X%,

is in start confident happens.But business, that hard picking quarter? a we're It's forecast the Is Now, it more the second the I saying that demand sometime wish about market from what it the how Is deals. second we're does third I quarter? crystal when quarter? standpoint winning up end in executing the on had to ball of

segments above we're and is, many of really based in market answer deals to on think then we're part so that on yes, can And trend just question executing is, tailwinds. think add how upon we part that great looking the winning, hopefully our do and we And MSPs of then the we based we the VMSs. your can our some market market we're place. buck market it our wins, to at a in the outperform But

Joshua Vogel

color a that. little more to Kevin, just add to

As you pre-pandemic usage the the clients the higher. contingent remains our conditions is a macro market, as look demand at in the still today below snapshot yet by

do So the the the steady, you quarter, sharp rebound.And drop as back up just and right now I'll throughout quarters. we there's kind the remain second will got little in some first that retrospective on XXXX, there a quarter probably we misalignment it third demand we and and out second, through give in think ticking that fourth of saw then bounced a

is so fall off. significant something a structural demand is kind be -- in to of a that It would there's that this And led step a pretty to have down. market that the doesn't that seem change

perhaps overcorrection So timing can it does work back. of its feel a little an bit that a or issue we way think

Kevin Fischbeck

then you make to sure And Okay. talk just deals. about understand how I guys

Or is think MSP, a of management and as revenue You about a Are like that spend it? under talked should we of about so not way revenue about of mix to another numbers? the then XXX couple it's wins VMS? XX. necessarily of So And those those think MSPs?

Joshua Vogel

And to and little be neutral the capture a to traditionally, XX%. Yes. on MSPs. XX% you're side, of we -- vendor that capture in It's neutral XX% that going range, between higher. the somewhere can bit MSP and side, And going mix are a VMS we're somewhere capture

Kevin Fischbeck

Okay. Great. you. Thank

Operator

Thank you.

Our with next question comes Jefferies. Tanquilut from Brian

Your line is open.

Brian Tanquilut

Hey, good market afternoon, of guys. your talked you of keeping one John, kind about comments share.

assuming kind maybe maintenance curious, where and we And you how return think that, to versus are eventually shake just do that the share normalized like that, a out, Bill, of a follow-up maintaining balancing so of maybe demand? to you margins level market gains weighing margins? And

John Martins

do Brian, the this John. right going Yes, now. market is market's is what going do the to to

on the people margin pressures softens, -- right, demand put does is more that as same so as going jobs. us there And a after are

bit also profitability. our that's that we So but maintain competitive a margin how of sure pressure.And of want to it market, to we some want so balance does create making the in we're course,

working that's And think so we we've balance. the we're I think We're that. wins are good not by with the not had. we just down when on we're moving a are It's we good talk the evidenced and And the And it's as as a about -- industry, definitely that's whole. doing an right And now job -- business. not buying margins margins.

William Burns

just to look mentioned the to and Med/Surg demand some what's happened about at the is mass it ] note to we closing eerily have narrowing stabilized where when majority I'll of how in [ underneath what's on. I'll quite The -- is And the spread. steady one a seeing Brian, you're for our that you're large Yes, that lock order at And and rates, demand, they've bill that has the rate looking starting this open some kind remained of rates, of interesting subset the critical add. a blocks.And was -- then dropped happening see I rate, see and ICU time. off. the we're orders look you want across the you the of

market So ] which rates, meals or lodging in lower going [ and to to at other to. you're and the nurse because are words, we're having necessarily particular, entertainment to in markets the dictated below on going not be by pay lock able clinicians compensation compensation, they're the

our that. about can I longer that you have certainly migrating some tail will naturally service foreshadow still one compression? do So that mitigate margin Number across margin does is there's We're programs things to to we're the Intellify think company converted. a the compression.Now, stack. XX% managed

is then would opportunity think line.So in and we from growing, another business education that. in we've of our in million future, roughly businesses grow. growing conditions the But time. have think $X not savings to a I in to point are now, the as we're to see And be higher-margin pay think care to margins be don't find hope able the improvement. we would there's at lens consolidated the ourselves in. rate see bill I I some over what home the I some for that's where garnered spreads that to certainly I happens bill got like we market

Brian Tanquilut

contract as acquisition pretty would it? locums it driven? like And maybe driving seeing investment does expand locums, even I I healthy or my growth Like continue Or appreciate think it. segment? grow that it about have to right, Does then you're driven? it to it growth take What it be more take that seems there. follow-up, is to

William Burns

is where locums. strategy. Well, of we do But the past look we've of quite space over our love today. team it a bit years invested to a where is money of definitely couple we course, Yes. And part build of of the the at M&A

you we've when we made look little -- at not that's it income, it's because contribution the want because a it's So to be lower now, right than investments.

becoming million a to in we that we're that we that look to -- ramp currently locums, and to capacity business billion, So I that lots to $XXX to at that's to this next for level $X.X acquisitions us of business. feel margin get approaching lots level. But and of going and require line ability bottom the increase get company there's when we have of improve think

Brian Tanquilut

you. it. Got Thank

Operator

you. Thank

hear Blair. will Trevor with you from Next, William Romeo

may You proceed.

Trevor Romeo

Hi. Good evening. Thanks questions. for taking the

First one on client regarding is kind just labor. of sentiment contract

reduced labor individual contract maybe variety it how hospitals spend. a terms far like they spots might seems be in think I of in different of

of back you way summarize could in more kind the your your you guess just to the if maybe feel terms reduce other one it's base pre-pandemic, any or of kind to client it could all being rates tilted content guess, broadly. I maybe some generalize or more clients way does where are So broadly? like at with way spend current maybe of further? Or wanting aren't.I

John Martins

Yes.

core of through internal sometimes helping is there. take put their we're their little again, bit good continue will ways with now, the for the to through people, labor say, it, because maybe side.But in to broad travels have resource with staff. where little view looking with off It's I of client them It's way save take us out in them the a number their help to travel. is now. number But have money, on bit it's let's for what but general, not their pool, the they from right They're A a broad maximize their fairly travelers a stroke, they're helping take content, spend we is a we're clients can the is every broad is, they seeing I'd so content clients view. part, travel seeing different. a think for most broad them internal with our Let's which

that want open, the at I that's make the nurses number think have bedside the sure a you this?. you not And to to I see that also you wish if growth. down hey, the coming And beds hit a so -- level travelers. could of back taking to you sure I to of like ball start far patients now sequential need of little in of bottom of come -- bit It's and the from more, having kind have the everyone want go do make they year, to look saying, I we you of come the you have we've you think point.And the that then a but make had. if that when little and which ratio, think and would money bit when we that we're of care where I sometime certain the patient nurse at that half save only utilization you if again, right crystal saying, community, realization seeing want the to to sure we

So at I point. almost we're there think that

Trevor Romeo

a over Okay. Thanks, QX, into drop then to John. bit helpful. see guiding you're I would you you look is revenue the And typically below sequential QX. as QX That's quite what think

it terms think it's might I there. sequential some the made expecting of in be below of your what competitors in QX also change

those conservatism to could of just was I differences the speak wondering guidance? all level try maybe your square in maybe if you at and So

William Burns

you right? on give side, travel try about it's demand. at the shot. decline So guidance, Yes. almost the we've implied the the When falloff in to a you the talked in exclusively Trevor. I'll look that's sequential

how is that's start down, for to the an internal a books we're of how would there booking the say, looking still see for at our of the progressing? production.One error that the is we're though quarter. consistent was not say net demand fairly interesting metric week first we And I the even overall rate So our at things is that's of conservatism.

the of pretty because length line I one think the the travel of good have we business lens where assignments. a is of

or side And of there? course, to fall I the if the want session to on the don't year think spring you But the sometimes a anything what restart into something else -- guided it's can you opportunity is the John, see -- travel session, not education an variance winter of to school that throw anticipating the the come uptick of we is really the so as now, the we in have little of start a know, I on bit huge the we've of it see side.There business. I'm

John Martins

I'd competitors. to is our at you when look said, say Trevor you that, I -- we think how hey, compare

market is the happened And remember, got staffing in 'XX. we're creating for were XXXX, I market Cross growth you analyst going and travel then we and if again transformation. digital analyst even in those had market industry vision think I'm and nearly new in actually you 'XX report the And map last is a And in at the we're outpaced at in look and then road and 'XX being going The growth company to look not Country come -- in XX% the from our years and has staffing going at when that when and to at because has to XXXX, where the the to numbers We that nurse 'XX, XX%, down. and go to the of confident judge the summer. of show kind higher that we are that down through actually able see how XXX%, sometime our really 'XX, in we what the we XXX%. at 'XX, percentage market. grew and that, going allied, they at in see really over And at we're market reforming in beating market.And industry several grew growth. travel grew do of in the have you once be we market as market the grew kind the And we right particular, 'XX. a clearly company, in

and area So think we you sometimes, in Nurse look fast area.And grew they our and have bit the other so to Allied, a may been I diversified. one when more that's little in the pandemic, competitors,

to a think And bit you're in those that going of make that. numbers, look comparing to at at you little also So thing see you difference other that time apples-to-apples. when look happened sure have acquisitions is, in I to you're the period

Trevor Romeo

this in. one on had you goal maybe the up Okay. I could a acquisitions think wanted close more comment a just having maybe about Thanks, John. to year. -- then just I And I if sneak one to remarks prepared follow some on in

on and Just targets us give could terms areas in of wondering double-click kind of pipeline market interest? of if update seeing the you maybe what in coming and an on you're your that to

John Martins

come I of to a market market months. the that -- go downturn last multiples right cycle think, over is, this we've buyer's don't the There's now. This that of want We're in seen XX companies seeing another down. through what

space. And the done $XXX space space, that very a job opportunity we've but the nearly up business. business. into continue And us. that local a is opportunities And to local gain as And and on great business, opportunities of sizable phenomenally just like. I as and a is in there's it's in space. right the said some a fragmented I million scale think for in -- space that we really love I something that there's which of It's Education growing earlier, space.The now, buyer's And into there's Allied we that to so just we lots space love market Education a said fire, doing roll space companies is it's fairly and think Education we've and before our a

Trevor Romeo

you much. Thank right. All very

Operator

Thank you.

from Tobey Our with Truist next comes Securities. Sommer question

open. Your line is

Tobey Sommer

comments that maturity market retention of know about input.Are statement have to externally is use a to the message you your you to stable and share that that trends the to ramp income a how is modeling as within because think it's trying and little pricing? and just you more demand customers comment market Thanks. take kind and transmitting and a little some existing a know challenge bit and explore sales about I share, Intellify a gross want of but customer made about I bit new to

John Martins

at $XXX somewhere Intellify business. between correct. When now, $XXX that's are bit bill our somewhere at are you between have gone that we think under what I on management. we up Pre-COVID, can . rates kind up, period, would rates Bill were million million. on I course, rates And of to of to $XXX million. Bill, as look bill management, you were December, flavor a we're of give from the Yes, includes of under million spend spend little that but the say? that And $XXX where XX% at And you up,

William Burns

XX%...

John Martins

Okay.

So that period.

double in clearly have management. So XX% of under increase we but that, nearly you spend amount the a have XX%,

actually confident we So lower we're gaining little gaining on But we're -- market of a volumes as too little bit why the a think demand bit those that's and on and bigger. than we feel side, because the demand, definitely gaining we market pre-COVID the now. earlier other right are Bill up share is numbers.Look, are called out call, size

spend and plus still million the of $XXX of $XXX $XXX up being management ramped -- doesn't get we ramp-ups that now. as is spend the that so to -- most million between under And that of account to million

Tobey Sommer

like you levels? feel rightsized for Or XQ it guidance different appropriate Do for Okay. is and level of a business? the the volume G&A built is the in

William Burns

an the headcount we one, start to in Good question, my Number reduction We benefit get since prepared had Toby. I of the year. There's X% of mentioned the we've won't of remarks, do that. that. full probably about two -- pieces in quarter

to numbers, in, don't we a of to that we've there mentioned want the India. revenue there's tax the the that.And we to quarter million through aboard lot impact the we then It's when extra to on is which capacity -- But John fewer you'd to lot up and bearing The rebuild brought some as processes. in complex I of from ground the we G&A were second business. picking some some that but usually in our automating to working putting opportunity. get of kind phase, of headcount, that in mind, want $X.X that start will do first on be, have on we If with just bear. -- is first that's most phase simply So zero ERP run you the reset maintain that remarks the the for benefits also do a realized say, but labor really of is the the early and could system that different payroll to still place just of from reality still live, we offshoring The made, not we're of the in trained.And producers we're goes opportunities important, be goes XXXX. the

the not getting G&A. But of kind we're that's QX, So for messaging. done the at cost in the

Tobey Sommer

Okay. That's helpful.

it a me when industry, the travel the in the and at may industry bottom lows. in when the whole, of Let rein see, How of do you look new point for to much may there capacity that the within need we're that X at to finding business as exists then happen trying to in? capacity nurse now this guess and sort demand years what of today? industry change too you is And think

William Burns

that the I'd from vendors a -- Tobey, Cross that direct and don't companies companies think guess, than have pretty I of up lot that support that ramped The big. I are relationships relationships. going the to Country, companies direct would capacity, new like client have where imagine, you're relationships certainly more are I still MSP winning And third-party Well, definitely perspective. say a are

John Martins

I John. to this that's Tobey. Yes, is think Bill, say, fair

win we're the partner on deals the hold to to to the that allowing think six before, we of XX% third-party that XX% had accountable in our called is, to interesting. Trevor's patients of that that it's sure want or XX% businesses. will make win that to our clinician relying starting in that's XX% and certainly more more even I important could vendors, our we so do months, first we capture Country want we're out feel that happy. rate business. we're we're because in mentioned of to keep the have part that right, we you make like the and why these keeping that XX%, to we've to the at the increase we that Cross XX%. between wins our unfortunately, actually is a our And quality actually we XX% as that offset network, companies why could us something that sure foremost, And revenue, market to to is really serve the and are to and rely and deals is when I've higher We increase capture on in that's actually capture higher. is win make companies companies affect question, like that capture these networks we -- to maybe Cross want them XX% there the know and secondly, that share, plan.One kind their win capacity, partner we but to and it important sub satisfied of patient things delivery, bigger their orders never on have this and that's decline and that's able rate long-term definitely want the capacity highest I is earlier bedside to I our very you'd would to, proven not why that understand excess are capture And rate we that about to deals, potentially. to Country third sure they're we And have like to the the last we've to if we're excess than think make Country.And want clients our -- we the rate to have And clients And of a have providing actually Cross party we're as first communities. over calls support important want the as these where could and we we our choice, sure goes deals. something then then rate it's think third third to the want going decline are and that's to

Tobey Sommer

talk market that an there. MSP in all? you trend you now been and me, only got not I subcontractors the you've about Are at Could fees now one Intellify the VMS thing Last marketplace on MSP sneak have fees that in a in. to for time, can subcontractors if long out for changing but

John Martins

years, industry as the happens I've fees pressures is bids, from competitive the over in up what way go been I cost periodically think we're too seen in long, and XXXX go We've offerings out the lot have and their there services a offer seeing and and clients business costs win to more more to those along companies be sub-vendors. and to come passed to happen

going an like up.But started years, you this And we ] see this increase [ every interest in of industry I those grow several up. So industry across I are fees XXXX. said, seeing the

I XXXX. I was, I the rate think X% think, -- first when I the think average started, in average fee

trying more you're they're increase and And and to MSP managing companies you that more, the of all and and they cost get, word, as you you're services competitors more so mentioned, and offerings more into space, have over it fees. clients, more VMS going offering VMS inflation, and services up end service. what's competitive get right that more MSP running the make more when And more time, costing I when seeing and getting and to an the

Tobey Sommer

Thank you very much.

Operator

. Thank you.

with from next Our Citizens question will come Davides Constantine JMP.

line Your open. is

Constantine Davides

Bill, Hey, you called out. just labor the that front, disruption on

a think few million. I you said

then And you if on wondering Just any anything impact to related quarter? that's the going finer point to disruption visibility do have you that. first put can a

William Burns

million the million within from between that $X we Sure, labor disruption. Constantine. and got It quarter $X was

as Mark, So think that Mark no, labor here, any don't mean, QX as really disruptions, a line it really demand have correct... wasn't And that having far we significant. of I now, is sight right to I

Marc Krug

correct. that's Yeah.

Constantine Davides

capitalized. then, directed? give is about clarify, $XX I tech both you on And was and to to expensed could being guys it's think that Great. that 'XX in what sense just want XXXX mentioned spend of the going us look million. technology and spend some is front where I like John, if I you for wondering

William Burns

the combined so been gets Sure, run referenced operating Constantine, the That's well again. what number through correct. spend is expense that's across as what's Bill that as and capitalized deferred. project, John The it's

statement on cash computing, So investing of it go doesn't on in all your flow. the activities cloud

But of XXXX, Some And back the projects. projects what prepaid, hung alive. amortization a million up the it in spent is spending $XX-odd all anticipating across by we'll and is amount. very for are large, similar we in we're and once come those

Constantine Davides

If you one sort last then Intellify? to at guys point paused are And the that for of last you over in me. the remember, Great. Where migration I MSPs year. some of

you can there. give if Just us wondering Thanks. update an

William Burns

programs Absolutely. in the mentioned over that left our we've Intellify. seen a second XX% quarter. that Q&A little the are got on Yes. earlier will I about now handful We've of first a go or

in think three I two or QX QX. got in and two we've three or

So we're there. nearly

John Martins

And it's at -- priorities it want It's of on interesting lot a we don't that, Yes. there. hospitals. put is of not because times, really that competing it's to

person. would we set. get getting pretty and pretty get just in And them to so right soon map complete, road it sometimes the there as we been there matching earlier. Bill at to now, But up It's mentioned, have hospital the have

at the we -- So be before maybe of first end as before Bill said, the half, XXX%. the should

Constantine Davides

you. Thank Great.

Operator

next with you. [Operator comes question from Research. Steinke Instructions] Barrington Thank Our Kevin

ahead. go may You

Kevin Steinke

correct? maybe some I you to are conditions ramp-up also of the in anticipating prepared Intellify margin comment move afternoon. in your that potentially market about that contributing? so, you believe improvement made your you remarks just a Is Or And XXXX. through if as good tied Hey, business? is expansion

William Burns

payroll Hey, at quarter. Kevin, full say reasons a being savings, a looking that, number there's I we're reset. the Bill. this QX, is cost tax that not obviously, the got We've fact softest for realizing of the guess I'd

that to businesses particular, see new Home few ramping like number in expect number high the of As see we the the and Education. in next to Care, continue progress are to top months.So grow. will throughout programs we're a go there's programs, to going opportunities year, across line live growth of the single-digit higher-margin has

profit pay the -- any to on we'll making the for start rebound. kind those recover, gross now and calls businesses I as think not gross bill of spread right margin as see I'm travel.

I in market, a an very tough think we're opportunity. but that's still

efforts that's us Intellify X look of So I conversions little our going as will at to the the annualized of see over that we've teams right? a the some prepared once a those, we we're and first add to it figures very savings, it's look cost ahead, effort, a contribute to savings moving work to at automate and stable comments remarks. a for for that But to do doing be have like to our in to going all and think we we unable we'd to can the just cost-effective very there look of if John for to move we way. bottom of opportunity moving overseas, right process, across automate, can see complete about things that concerted line.And we now and we're we've what then some where program most we're the that made got finally, the effort going continuing opportunities got large

us be still more our of the working which the year, fourth that it.And been are back quarter will have even into live things been think through going working first that give We've the that's piece last then and to we quarter. the we've I many opportunities of projects from a on all throughout So office. over had the efficient

So across I see even the services anticipate that improvements still we'll shared teams.

Kevin Steinke

just referenced, and as would towards year? discussed, initiatives ramp single-digit as with move of the think reasonable back you the of various we margin the think of XXXX. do you high And revenue all you EBITDA adjusted could those half in actions kind you And Okay. the be half sequentially second

William Burns

SG&A that's the Yes. remarks, to the at that remark made prepared my targeting I revenue. on year our and goal, I we're XX% in think, with mean certainly exit look, I

-- be be into look think by back margin or the does that yes, that gross where would quarter, gross can you start you in you something the look fourth exit into do our if can where to like. But single could what goal profit So that to year. high

Kevin Steinke

Thanks for questions. taking the Okay.

William Burns

Sure.

Operator

Sutherland LLC. our come will And The with question Bill from last you. Company, Benchmark Thank

may You proceed.

William Sutherland

I I contracting typical got pushed COVID, lot for a MSPs thinking one out. of think, was the -- you. cycles about guys. of Hey, Thank was John, artifact the

wondering and So your And your both there's I've you contract just MSP been this kind in or the bunch occurring that year and now last like a book of year up like I'm what year this industry. in maybe at is heard cycle right VMS? as look looks

William Burns

Bill. 'XX, kind perceived Hey, that was And all called -- heavier and I COVID up. where 'XX. go out, of waited back as Yes, cycle of after we that contracts and was our market out think held in COVID 'XX people after because we in we COVID was to or to had more

and 'XX it's year, and 'XX.This than number our clients lower So go in we less a last saw definitely out higher of year.

competitive bake-off, There's and -- course, need doing a the sure of providing client, in the categories. needs will a you this up their I may the year. And But are a they you in year your have different -- be in service question, a to with couple over is renewals competitive they the that that just years. somewhere a think the lower that out there's cycle getting that those X there's that and should out XX%, needs to the -- we're our varies, evergreen job involved have bids going they to between looking XX% that more -- go in And filling to still are typical answer competitors have that client make this the the not if in have. renewals But filling go it given year the a are market, right? are ones total we be are this and see great you're have of that and of automatically.And will. really that we that we renewals come number contracts of other that of ones come last

William Sutherland

wrap up it. I'm a And question, with number Bill. Got going to real quick

first you Just talked curious, India? think, headcount it for in what I Because about increasing is quarter, the half? this

William Burns

Yes.

hundred. headcount We out, a specific India but the couple haven't, it's few given my a to knowledge,

between it's So XXX quickly. XXX ramping and and

a half of a we've IT. supporting like out our Now work is of we've operation services, But supporting of versus today, maybe our our and is operations lot half more shared about got bit the doing probably headcount little the India of IT office. XX-XX been development headcount

doubling be that's to going doubling be when driver I say where the the we're the to of so going the head the invest business. on count, -- to predominantly growth it's on that's of part mean, the going we're continue in.But operational And total side to be I of but is to the what going headcount, the side. is operations than more main

So the operations. the more of investments for

John Martins

of coming all about And our services we organization the just on a Country that created ready XX had offices. ago the important we've was partnership, and India I office from there. years. this tell note and to over. to It's leadership India U.S. I remarks, have just is take partnership more that that that there with Cross they're Great these more around has our between that do office it's I you over there. weeks we've really this overseas, And for to we mentioned on there company great excited have can there, over talent truly we're kickoff incredible. prepared and to have been And long-standing we my in as think of for real our company-wide that And culture X great I India

William Burns

Perfect. Thanks, guys.

Operator

turn the and conclude John does for Thank closing over this I'll you. Ladies it gentlemen, Martins period. remarks. Q&A back to now

John Martins

Thank in our you. updating In the you forward call closing, next of we participating today's to in May. for thank everyone and the I'd like call, look on progress on company to

Operator

and conference this does for Ladies gentlemen, today's call. participation. Thank you your conclude

You may disconnect. now

Cross Country Healthcare (CCRN) 21 Feb 242023 Q4 Earnings call transcript