AMN - Earnings call transcript Q1 2018 | AMN Healthcare Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the AMN Healthcare First Quarter 2018 Earnings Call. [Operator Instructions].

As a reminder, the conference is being recorded. I'll now turn the meeting over to our host, Director of Investor Relations, Mr. Reece. Randy ahead. go Please

Randle Reece

company's of Welcome A AMN will replay XX conference the until everyone. audio for XXXX of replay be First Earnings May the future based this conclusion statements. events plans, or following information amnhealthcare.investorroom.com Call. constitute of are forward-looking release in at remarks available call. make projections, our to afternoon, issued to earnings are during Details Healthcare's expectations, we statements the the call Quarter current reflect currently of the These Various upon afternoon. available this beliefs this Good this call about it. webcast circumstances

most financial This directly to regarding from as filings be comparable subsequent Form the its actual statements most may various guidance financial can our release. XX-K are SEC. those of with Our of earnings GAAP prior not the amnhealthcare.investorroom.com. does forward-looking The any the by provided the and our at earnings next these including certain update those measures today call a differ of on website, intend included recent company's information. result non-GAAP or forward-looking to statements materially and factors, results company in indicated identified to reports the and reconciliations accessed which in Information these measures release non-GAAP page contains

Dan and and Brian Financial Officer; turn Susan. Chief Staffing; Scott, Ralph Now call President call the Officer; Solutions. over of Salka, are to today Professional President Executive On the of I'll Services Chief Susan Henderson, Workforce White,

Susan Salka

very staffing execution more driven began first intense a clients AMN everyone high to much, EPS. our on revenue so record call us hit and AMN quarter, proud XXXX from needs today. and higher-than-expected teams how a you team our We rallied with solid appreciate strong meet we of by the joining Thank Randy. and I'm the

was strategy closing $XX $XXX early debt executed above of revenue. of guidance million slightly added EBITDA In off our that the scope X% or year-over-year April, quarter our by First growth range. acquisitions million, solutions. end and high workforce Adjusted XX.X% revenue grew AMN and our was to on

addition and demand We we For in and for Leaders will to expect on favorable are Overall is the our them of DiPisa growth. review and stable call. Today continued plans MedPartners, Phillips the later support

We quarter. our are also rollout good improvement later new decline divisions. of underperforming very enterprise We'll talk placement making sequential a And going progress our recently with system the of about in staffing segment the the second permanent is well. in locum our

trends review quarter in and segments. Now our let's business performance first

Allied revenue. average $XXX comprised X% and assignments. for driven mix Nurse increases segment grew of XX% of posted Our lower revenues million, of Revenue was this XX% while hours and bill volume in clients than work growth Travel rate business down segments rate Nurse by staffing largest by a year-over-year. year-over-year. slightly This our to higher premium was more MSP due

division quarter in strongest on be both assignments in to winter with allied premium the These and seasonality bill were staffing Nurse away history. is related driven in comparisons May. team volume deliver of job rapid year-over-year assignments. flu growth track excellent continuous and quarter. typically first the quarter better April improved did This more March expected or end needs typical been Rate than filling seasonal quarter. throughout partially and result pricing. until our Our and assignments by volume an pronounced our division from even rate trends to with X% Travel first This Placement rates. year-over-year future volume The stable second This part in offset increased the revenue staffing our the in shift year-over-year Nurse month the by staffing for the Travel growth in sequential larger offset puts in a in expected quarter. normalized. remain second decline growth Nurse response Volume business assignments volumes in been traditional to is grew the X% fewer X% these in headwinds solid of quarter to up second

Allied growth ahead, Overall, decline a surprise. year-over-year. the is of in looking In the was Nurse above partially in Now revenue the lower X% first which up positive assignments has Locum to been improving. remain Allied expected Locum the is for still volumes Tenens slightly and positive Nurse revenue. and volumes prior X% by an the offset expected staffing of graded premium year-over-year, Nurse a local quarter quarter to $XXX segment a to and revenue mix be X% demand This and are segment, grew second million Travel year. at X% rate

have Tenens' a several and Locum team Staff our new growing also will running month. the in this We Locum first the all for processes. Locum's Care Locum's pipeline. to of the services will platform. and time, on new same Recently, completed platform enterprise staffing point, and be successfully migrated At be shared our Leaders migration at we a MSB on businesses that sharing and later The same

clients. upgraded expect the stakeholders scale has grow Early very business feedback more to positive. will to and user much for members, a effectively enable team We providers been from interface improved with technology and our

basis. is a year-over-year For quarter, expected Tenens remain the to revenue flat second on Locum

million, revenue division's was team was String The other $XX great Solutions up in X% higher segment MSP which progress the was leadership, in Workforce quarter First First has made surpassed of placements, Smith have includes year-over-year. which particular, year-over-year. which our on this and revenue. X% Interim XX%

X%. grow businesses BMS Our

clients, is entering remains greater in verge Workforce but such continued are along X%, the quarter For sequentially. of very with momentum X% be believe We on managing deployment management, of another having is down mid-revenue a new saw XX% today. quarter two by no a permanent Physician to quarter. confidence but is that Permanent DiPisa Other execution businesses harvest and due clients Peak currently quarter revenue team seasonal Health, expanded platform Northeast. DiPisa are on businesses years the move initial joining from continued are X% demand In There for year-over-year our the documentation demand our and placement approximately retention, second is sales in drag revenue explore in In year. the case ago. year-over-year. and strengthening share inpart pleased XX%, Overall, second quarter, market past skill, an an in key create the be Executive a added bullish Peak year message rate although the Peak And Physician year-over-year, to MedPartners' revenue model segment registry of first AMN. to Advantis making. Tenens and the engaged much a almost recent strong very is synergies. strategy and entry achieving coding to assignments. quarter, Workforce with corner few points intermittent significantly value let optimization, and growth. and the fix the into AMN's cycle a innovation with we expect up in a and Leaders Expanding operating Phillips XX% bolster the long-term long-term improve with search era added operating due these AMN. acquisition. are second is physician of leadership two Perm and best with our flexibility. of organic AMN summarize cycle MedPartners compelling medical strong as through in provider below strong today's expected potential growth improvement and family. Today labor is with innovator enhanced better proposition. to prior for particularly so and with AMN had second slightly on of the poised leading believe good client volumes quarter several that and revenue Placement organization, a pipeline, will the workforce market, lower extended supply there the of performance solutions growth and the there and the realized the recorded up expect our mid-revenue positioned benefit and report, venue essential on hiring nearly basis for the medical first Advantis team technology. our In solutions. to attractive to growth into revenue MedPartners, as making and quarters, next-generation its that our services. the mix one common ways higher difficulties slowing We're me changes. a destruction the with we parts offerings growth, the in year-over-year the the Leaders rates is have training year-over-year to Solutions flat the effects nursing shortages, Healthcare solid, slightly is the Locum April, ongoing We premium MedPartners progress to to continued turn leadership beyond was of sales sales After Phillips expected Solutions clinical For retained including drop we we Underlying on already However, is feeling be we AMN moving the Today, provide We about with revenue new in growth to the I of revenue since scalability. do had

We of XXXX. and For goal of improve believe margin beyond XX% confident highly The we become and ability addition will strengthens number we leadership. talented solution. medical AMN company have and we that one our of go Today team. search growth engine all by to services we can that AMN's And transformed pursue driven potential EBITDA the The adjusted coding of the Leaders the healthcare a a cycle provider Executive business to as interim remain And is DiPisa grow achieve forward. Phillips mid-revenue of

team, For professionals, our Let a moment meet patients healthcare communities our and MedPartners, take rest and team possible us expectations for DiPisa welcome to Leaders our the to clients, commitment it Phillips from Today. AMN of member's newest their to of along serve. They, we the with the the make exceed me

the Bryan Now call us a over to financial I'll will Ralph update, join for session. turn Q&A the which, and for Dan after

Brian Scott

our performance everyone. high and afternoon, quarter welcome students you, of company's guidance million and above line. The $XXX.X slightly Nursing range, was by of the end for driven a good better-than-expected first our venue Thank Susan, at

revenue year. First quarter above was X% prior consolidated

XX.X%, other margin by in lead last Workforce to and quarter expenses They was $XXX.X mainly the Solutions business SG&A higher adjustment. a million First margin XX.X% to down liability for improvement margin result gross compared year-over-year Locum quarter from SG&A last Allied lower ends and XX operating of year, margin and by last primarily gross improved lower gross points with from mix leverage. Nurse tenens to may decline year The was the last sequential the have and was and reserve the changes and basis totaled XX and margin due points The basis was but segment in the driven X of margin from quarter. favorable revenue improved cost year dollars was prior percentage due sequential million quarter or XX.X% XX% professional to prior quarter. for

Allied worked partly rate an was average This the from was gross year-over-year was in and and Allied segment operating was over average prior over year XX margin the is hours higher increase The of leverage. the Nurse quarter. previously XX the from basis quarter First Nurse points premium margin noted basis sequentially. by X% X% the gross by higher. by decrease improved the bill year XX% points year-ago million, $XXX.X basis X% prior points X% volume also and above margin XX offset rates. revenue period to prior was higher EBITDA of Segment XX.X%, use and and higher compared from and of

XXX the was prior by margin Locum was bill the gross to one-time XX.X% prior major spread. slightly continue the increased related On The year-over-year QX margin Tenens basis margin and on focus mainly year, adjusted our cost X%. a XXX of year points and on average points by basis lower and a modest was margin lower X% Tenens was driven the Locum's EBITDA transfer a quarter to Tenens Locum due segment platform. mainly down a implementing First million indicate by improvement. year-over-year Locum down lower basis, to rate place due gross down X.X%, bill team $XXX.X from sequential than basis. some revenue was and to higher X% and

first direct up revenue. points was First of $XX.X year-over-year margin X% was segment prior $X.XX higher XX X% revenue higher with quarter quarter year-over-year, with X.X% was per was up On points income was million EBITDA of Other XX.X% year The in prior X% and The along Adjusted of Reported sequentially. $XX.X the or variance million, $XX.X million compared up a X% by revenue, sequentially. in overhead share placement sequentially. million, XXX XX $XX.X year-over-year $XX.X of basis quarter of basis and diluted was in the $X.XX permanent basis margin share Workforce sequentially. of consolidated $X.XX quarter. to and adjusted cost corporate below the of interim points of by in earnings year-over-year though basis, and driven Solutions Gross basis quarter. year was year expense representing adjusted earnings per XX net compared the first prior EBITDA leadership. XX.X% points million lower X% Unallocated was

a of from the stock-based year as certain benefit adjust and the associated a of rate tax plan. compensation well for million with $X.X included that tax as income that accounting to GAAP the quarter adopted standard benefit our compensation This last was million gains XX%. treatment deferred $X.X tax related Our to in losses

DSO the Cash the provided $XX which level have be will estimate these effective outstanding prior of a days the compared from accounts days sales The AMN, quarters operations year the was record for XX collections improvements quarter with items, process XX%, XXXX. period. million which and was cash as Days the strong our tax we high quarter in XX for by previous rate been remaining year-ago and in flow $XX of days quarter. billing result for in the lower with in XX Excluding compared about rate million at quarter, a would receivable. end was

Both acquisitions and cash for million our potential X. $XX first quarter equivalents $X.X Today expenditures million debt the March brands ratio was $XX the in In by out earn of for additional for our while was end, was for realized Capital $XXX The outstanding X.Xx our margins to quarter benefits early to total Phillips funded leverage leverage and of acquisition acquisitions the payments our earnings partners $XX These of X. to tax funded and revolving med purchase ratio expected to acquired MedPartners second acquisitions be favorable X.Xx April, totaled are are per from by be million related adjusted of credit was million. restructured allow were DiPisa cash-on-hand, full million. and was accretive XX, year million. our AMN. As line. For $XXX to Leaders quarter AMN and include At share. Performance this

let's in labor includes million to quarter companies. top guidance. material million. of in $XXX This represents the $XX company Now X% growth of The from million to XXXX year-over-year. quarter. consolidated $XX acquired prior of expects revenue year Raw this to to million XX% And newly is line included turn guidance revenue second $XXX the

revenue. possible to pending to the impacts support recently different started but on several with We have a situations change strike, are

revenue is diluted and valuation a margin $X.X our million of $X $X.X to For XX.X% stock-based XX%. our estimated intangible million, projected actively expenses is expense but the million, as integration-related expense currently process event. to working are be revenue Amortization started of million, that change approximately Other compensation to estimates $X.X shares. percentage for expense $X.X margin share recent XX%. million, be expected million, to are Interest and acquisition of XX.X of through we depreciation guidance it about from expense asset to of at as is acquisitions. SG&A XX%. count expense approximately reason, quarter following: to excludes be Gross the approximately XX.X% second include the XXXX adjusted And this EBITDA of expected potential

open for and leaders Before would epic are want up value excited the like clients create team greater questions, to call more I to and to AMN. questions. up filled to members career to well Susan's partners for call I opportunities your And the together at met as go comment, so we develop the welcome I open work as our we so for day aim to

Operator

Instructions]. Sommer Tobey SunTrust. We'll with [Operator go to

Tobey Sommer

of by premium are in XXXX, and I could the work was through so less there rates if as mix far? we about you talk wondering them

Ralph Henderson

was was into quarter. demand this Nursing, us to RM decrease But QX Ralph. great moved industry but and Tobey, we is is of and as for rates utilization is a not second good, demand levels. Yes, begin more Yes, really in more for quarter more as did high probably - there's capacity, the strong the traveling, there has premium because more

So you a economics kind have of occurring there. basic

So with our core a rates traditional bill lower stable. are percentage now our

job go happening may there or that you the little a are We down a the it, seen It's didn't deterioration better of that's did understanding appeared so to coming prepared that and little not see, have events, rates cause pricing of and suffer a is maybe drives frequently margins dollar of us bit hospitals that higher we overall. as doing of regard just expect well. rate one bit less because down. needs We and as and our

Tobey Sommer

mix consider Or business of still you elevated be would this the has at in rates been? sort would historical of the range some whatever Okay. the kind level? of of premium middle

Susan Salka

as of other seen is of not rates relatively some sort in timings, temporary we rate but this over premium to any sort a new of extent. lesser of we've of adding utilization it crisis Tobey, and a on level phenomena have historical last much premium done year,

I'm normal of what we good sure is. a that comparison So not have a

might out. we to So it's settle hard say

July is we've it's the third but but travelers third we of more, yet. booked not highly forward into view the quarter, not majority bit dramatically, As look our and quarter best to our

Tobey Sommer

Right.

Okay.

what new revenue company's much about as is any more the update businesses? curious I'm and have seen the MSP, of on about you of the derived us kind demand that across could to well how be talk thoughts from MSP have incremental different general could as you If color

Dan White

we'll Tobey, this because good with cover do equation. reiterating bit want Dan, what you're customers of buy solve going that the reasons AMN if from start we we I'm of some to wins percentage and though whole are greater just can human is by capital to the I start our there. a looking of

we look the of our that we that around off beans a being we opening business, closed good now looking $XX Between expansions, made QX leadership million from over MSP XX% derived wins. improvement reference comp example a just are in if of is of Nurse this those that offering which terms diversity, of The of say really is new have at to we than nice and in a XX% really in Almost and last is worth maybe the slightly really to really, remarks our helps options So you acquisitions rest us and overall like professionals. year. terms start really low also for. MSP a of better are QX, that is deals QX you're specific. and which for question of I'd good made Allied even nice geographic healthcare to

again, to terms of look outlook, In our strong. really QX, continues

or in XX% that in over now. million $XX contracting XX% is pipeline of is and well have our greater. Locum $XXX of We at specific million also that right

quarter, quite again, already here signed and in MSP our solid several well. momentum business we our as are have with We new about feeling the so

Susan Salka

progress, quarter fairly the of that just part are flowing early the Tobey, of XX implemented of into and active in to which are year, last second through new, sort the and that have out in in those events roll also from will this that, and significant. larger were some first quarter of addition quarter, third some new and now implementations we that the year's

been would from But can them further couple So benefit quarters nursing. long have been particular, think still in penetration. so months. we hasn't help in and penetration, actually recent into be the to to in Primarily, have then to wins much met we have in will way how start think which just locum's Obviously, question leaders today. we be those. some are us I'll last compared of them to relatively to implemented larger on we starting moved to MSPs, And would fourth for essentially we have has third the is we penetration acquisitions that so year, Nursing you're and go but to recently see partners, long of have see some a today, already go Locum's see your the signed the that way our MSP? that we can going expect are We much a as low of still. last zero and that improve back Even there, expect and at start of greatest some we to penetration

Tobey Sommer

for of on systems topics little respect other queue. I'll in kind Locum's, back are little happen getting and point, middle a said can new systems your two to the this Or rolled still a from of we, better give Just the at the me, color periodically and perspective? was out? more into are get we you that new hiccups Could when in past bit with of that kind obvious it

Susan Salka

to with perm. go then back So I'll that start and

So to know, referred as first, worked huge destination as all our we divisions. which, across you doing was the staffing team on program, the just a entire is to of shutout what

really out was always the this week, can that and halfway new to we there's the already implemented sales on more from in members and and to in and obviously so have but coming so our and two a next be plants through three how in they've phases Leaders impressed then, embraced on degree, do. office. we phases in through team weeks had included in would perhaps and say few some We our St. well, earlier are I there local training through. sales and They've in well gone We've I have things April, having ways the we already big tricky extensive more gone the the than the those rallied. in benefit Louis There and as of system just in new first would March are would and the some locum, back-office be with teams staff was portion of that Locum pump was Atlanta have that implementation. been rolled

are really would I So in say, option. middle this we we of the about good where are feeling

So change, all sales team the enterprise and their new and us. partner perm, we variety embraced physician of with which of on different training changes of interface with and larger they're implementation so has in really new enterprise team, that needs we a techniques, systems, an have can our of to addressed made organizational hiring program better a kind some

that seeing in had so, the expecting to is honestly, and as And that's flat the that's benefit you're I testament we quite I mentioned that be bit quarter, to we than second expected, team. a which sooner are the a think

Operator

with question RW Mark from next Our Baird. Marcon

Mark Marcon

I that about to the How be next little if there could that Locum in terms that think quarter of the course of this and quarter. was do a margins. wanted doing any talk continue? coming and just dart there may you wondering the side on Is gross you're business over you sub-changing just bit the

Ralph Henderson

Yes, that. Mark this Ralph, is I'll handle

to that before disappointing little things the we in into like XXs, and basis couple some things year rates that objective that last is of the change, improved last pay technology we have rules, long-term adjusted were back up years of demand off, some of that flips we just range. right because we of over about and in since do the a to get over may going like see drop drops well that. the points and it It business that it through the enough feel with You're and after had the part Susan people as XXX not talked the XX changing

that pay better The So of first they was the have then out the it whether realtime not a wait at the right recruiter that the so that fact the package rest kind tool about rates figure fine-tune's margin. you [indiscernible]. make good saw some on until does and and and compression help the new in decision can margin of get conversation and tools

in have already So tools we those Alec. those

we very never place in that actually locum. I came had pic big to have since We robust

let that, had we like basis. I now kind leader through approvals The real-time that. that and So do be of to manage technology guess, things us

around And that two. I used back the in XX then tool. start expect probably start think I So or next trending the QX to new turning towards to year that

Mark Marcon

think of And Nurse the of we programs terms talk half a ones When can then of and turning in and and that bit coming are Great. on, about of to we be recently some that what about little those that signed think the Okay. Allied. just were MSP of the you should the how about cadence might the back year there? impact kind

Dan White

Mark, this is Dan.

then of the the about ramp, how first me terms let we talk we ramp of In and implementation. cadence

comes platform, sign implementation days grow we after party once we the year. happens second So the bit of be an And we that it but maturity just little longer that, typical can amen a within agreement, After half platform. months six a that the let's third typically, assume quarter. about maturity deal by That have is of - in we XX general, on to end if it's particular in see, capture, implementation. first

enough with you your color So hopefully, that help gives model there. to you

Ralph Henderson

Ralph. things just Yes, this Mark, a is there. of I'll add couple

the All implemented in deals now. of 'XX

their up just think I There client's not requirements we are going. about to to while ramp through get of talked get time upside pipeline and taking used clinicians them them lots long to investing the out assignments. get get our credential We and us on this and is before, a

of days. a year deals implemented really XX to last lot XX Two of sold there's So the last we still largest upside.

I Travel is demand, MSP. it upside So look when like And there's in Nurse there. an

just digits in While it's overall kind of right double MSP slightly now.

the a in So the that's latter year starting in probably half a good to than they evidence did more have that been we impact of of half. winning had the first

Mark Marcon

end year-over-year would Allied What Great. the in that And what's terms seeing? assumption? is you bill increased with And rate then that the of assumption up growth. assumption to regard for just the

Brian Scott

This is Brian.

that mix second So, rapid quarter rate as talked But the for we we in little from down a from overall kind And the business that with quite for as X% mid-single bill quarter, overall of Nurse less the you to Travel down that gross that that And about the to having kind lower a business. rates volume the as of of being - X% staffing first response well. year-over-year. bit we're segment ones year-over-year. again, premium offset That's of well are as a the or part well the digit in Allied bit what little bringing the get then, drag saw rate. change average local growth

work in trends the changes the backups, as business we think Was and stabilize. the confidence staffing volume build similar in local there. well looked I still as of for through rates Allied, probably the and which that's get nursing

Mark Marcon

And you and Okay. back business a what bit the terms Can expecting. percentage we are we talk MedPartners the what terms half of [Indiscernible] a on a little are to And Phillips seasonality XX with that days there? of regards guidance reflecting the quarter of full DiPisa. thinking in contribution the there? of in about like just and about

Brian Scott

this excluding no at they all. we of debt again. $XX the with In one problem combined mil guidance, that $XX mentioned of Yes, million revenue, quarter. week This essentially acquisition Brian in about to is second is the quarter revenue

record in stronger seasonality, fourth total search should quarter the of sequentially gives and I revenue in part sense then and third stronger. the slightly just for bit little would quarter pic from the little gets QX of of and well. overall a business as be in QX quarter down you say then the bit growth a there would second the a usually, that be So the good Executive the thereof

now. So particularly, as also of seeing this We momentum they in kind through the of from there's year. that's we the at think execution are just right nice move looking some MedPartners

the second push that of the seeing. trends based half revenue on that year there're more in the also So

Mark Marcon

Great. one. And then last one

the well? there upside for MSPs from then you in seeing a for the Just including know are mentioned in the little revenue about Can new that but you change? bit is also I what a talk And what potential as not good, pipeline situation you're quarter. terms that? of strike you potential this potential the

Unidentified Company Representative

could the restate your by follow didn't about, Mark, you So just change I question that?

Mark Marcon

contract new seeing a on - just of what side, in terms RFPs? Oh you no, MSP for the pipeline are

Dan White

number? you $XXX asking the outside we mix typically that's have just pipeline total. what's a $XXX looking So or million million in Are over you the

Mark Marcon

I was number looking really for good. [indiscernible] the

Unidentified Company Representative

well that it's over Yes, actually.

Mark Marcon

Great.

Susan Salka

and Allied. deals had better Yes, where that's good a some we where a And mix we've but of in to Locum's of say feel which in always potentially, a more certainly they've be of would perhaps disciplines, MSP very Nurse net a and upgrading because an diverse lot are neutral a that mix few new from then great is competitive we different healthy as BMS of before, got an lot I area consider well. but there,

it's So mix. good a healthy

Mark Marcon

Great.

Susan Salka

are partially of, the it play finish numbers regarding look not if might it then sort to it different had upon in say there to if of arrive what would scenarios out those people like, versus have still out I'll have changed will, to, changed material guidance, actually full traveled revenue, if already it occurred and strike stage event are a multiple our providing could that the participate depending so at And many we degree actually there that some occurred. Had goes but occurs the it the to client scenarios because and enough afford would our already, you that if respect occurs line, disruption, range. and prepared and is

Operator

of from Rice our And with A. Suisse. next question J. the line Crédit

Albert J. Rice

Mike. of couple questions about A

of to it'd coming to I what I Can X% and dip behind perspective dip, the than you What know do normalized what get first a you Travel - seasonal if of and you dynamics been tells forecasting you guess. in us growth why that. have that was? give probably X% more Allied second. the all, usual greater into some you're the on out quarter reference First still it'd

Ralph Henderson

things we Brian it's Ralph, population I'll have Yes, Arizona and and that illness the handle this West like might through something we into flu-related fill Normally, the add. to in to in Coast, of Ajay. kind respiratory result X% seniors X% of And increases volume, and declined that the wintertime. in for clients moving range happen sequentially of on is the that the things primarily area have that. kind

in. us and timing or a pulls I in advance. back those we how vary when flu. year, them against end on in them came orders get the they of of think, that usually, then little sometimes those bit is then and give we orders, many that clients can So those they the And orders well in with April or this then, based Back pulls flu the May, July, severe

job just in our - of a they as those in on don't as in much new Part QX I way We're unless of victims been our delivered. year our back as role same of in our success. anticipate feel of And didn't that own kind we are have. time. flu-aided guess, some getting going of QX filling did on We come has every see there's so out. And the working that own them great I to planning, over pretty fill kind I teams kind and think, we would So new we back add they still at assignments QX of pain into it's think and unusual. the the it notices out both pull

you So little a gives color. more hopefully bit that

Brian Scott

basis. I'll this around you a couple the points least J., year-over-year it is for at A. at something on guidance quarter, add Brian Scott, second I a the in looking look better you gave normally basis XXX think be X% just if

something were think it's on we're QX, we're I down. with from saying again, then not that rate mix that a little we'd for That's the probably that talking bit in comparability. drag that filling little year-over-year more to be premium If we And a staff together. going shift X% that QX talking range that the year-over-year. local influencing

Albert J. Rice

market. a Okay. And about know underlying lot talking I then about we're

at there that small-scale, incremental in that equity and a the bigger competitors competitive the in while. landscape because I wonder been the factor approaching seeing come are people your Are change there's you any this? have so in know business I a Is market. for you a private got So how in and

Susan Salka

wouldn't I say it No, is.

do It's and it's those history no was it different our out great disrupt is better competition some this than - anything competitors that there. better or say to is they point Solutions wouldn't I think doing But than to optimize is always this who really in yesterday and in I got is other important, getting just and anyone in last like year you want but to where is just larger the have, to think, systems, Other to really partner some to how workforce, can past. we to we permanent looking an have all step-up done more even permanent them discussions, we're needs, and that can sweet also both event I help constantly sure Solutions wanting them has marketplace talking started I'm quality Avantas what been see this than scale Workforce time, doing I even and to that bring a to mean, temporary, help around workforce, can clients pilot grander a that's quite been at and we've that have make workforce clients, the conflicts changing improve. important things. do more. their build pleased for roles to spot, to with some differentiation and is not particularly, but I've us in has more how and the

they're ways We are their workforce. ensure to with efficient starting new to to help some that possible innovative approach clients

I couple last X, years a industry if would ago. or more that's been of XX the that's hardly emerging say positive an years change competitive So there's dynamic, over been existed one that's pic a that real

Albert J. Rice

DSOs. maybe the there or quarter And operating a anything improvement flows know, in Is pointed million $XX is cash $XX that you that's in on run Okay. I million the good that rate of or first of else sort just of then that improvement is in last unusual? cash unusually flow.

Brian Scott

A. J., this is Brian.

benefit year-over-year tax lower new if on rate our is one you comparison. So look

down nice not clients paid. job and beginning on to it in the But to And and team couple from improving the DSO lower cycle as corporate see was the last quarter years DSO really coming terms of rate in the tax DSO drivers time think, the of off a DSO processes certainly any a payment biggest that on to little has that growth helped the unique excellent kind the coming of We end that working of. improve anything profitability, down. have and and of wasn't, also first to did There working we've I bit it's with significant getting and well. improvement the pay of continued

I XX to We're this XX I expect for So it for always for that's I'd probably I'd where see to it somewhere for improvement the remainder to range think is but think an settle. year. pushing of now expect

Operator

Blair William & next Our question Company. from McHugh Tim with

Timothy McHugh

topic, of you last the observed premium the on months. the is couple in rate Just of this trend sort

this now? long headwind us trying part So business? think pass that we help year when you'll think Is when this a the to this how to guess, be from comparison. get about of I a of could

Brian Scott

to it's very Yes, back win very, difficult up predict increase.

demand, would of level best to say, guess. my I this quarters So probably would another quarter be two

Timothy McHugh

quarter? Is that? you professional math, If for you on did it there adjust of margin trend margins And can Okay. kind margins, that from the or even I'd liability talk know the if about XX% the seasonality adjustments, it revenue think at would at was I it I Locum's I imply second down for anything, imply gross margins. acquisitions of guess, kind I the I disclosed asked but the perspective, guess,

Brian Scott

revenue really down QX. you the QX again, at Yes, the being be it look if to just would from

lower excluding margin, little from to But gross better acquisitions, relatively similar, the anything of a operating so, we if And slightly with actually bit QX. lose just leverage. the sequential being is QX revenue

guidance, from add If That's organic little is the the underlying that you difference. of second of operating - to was gave bit you similar million the lose acquisition, at QX. so taking out, in assumption the the look in we you the SG&A main the about we quarter, QX it SG&A in $X XXX quarter leverage then were in if at quarter the second very as SG&A so a we simple for

Timothy McHugh

guess? clients the made it comment this I of guess, it of we the a just early to not better a understand you the all? perhaps I I I is elaborate it's back that is to site think, is planning of concerning, assignments. trying don't it, less using ahead to or sort in going perhaps sign guess, premium change these rate. Just you are if for service can if planning And Okay. or sign but part belabor a of this how of

Unidentified Company Representative

rates are them clients jobs rates kick in that reason out back Nurse so rates full-time are there's utilize so hope to lowered, trying it's premium of more lever of the Yes, because travel Travel positions. get to that positives to the we when to we and come - the people

have we increase so to And get competition the into them back industry. to

said, is capacity So not needed rates increased down probably utilization as is that, I often. like and sign the slowing of therefore, the a are

it that I industry, some premium percentage either But a they've whether So always that in and I it? characterized always way played been our revenues. of have the think I know don't rates role do you put

a think times is basis. of sequential most one those had just impact on the I this

Brian Scott

as had three the We've a standard really over last and increasing nice success core rate years well. kind of the

we've made ultimately, packages, on as clients. us to don't those improve compensation and it's premium have traction have dependent our as rates. So We so that, on much overly allowed we don't

those plan we think using rates. likely can clients position market to if So - standard more can them the with then to I the point and standard are still their more with earlier, and there, rates more needs we get our work the we we in

been as so that we're can getting about clients use with fill partnership it's think more I time these to standard well rates more we of So orders. that those

well. as think more clients that our I with sustainable relationship long-term

Operator

next your And from with of Mitra Ramgopal Sidoti. the question line

Lalishwar Ramgopal

us Nurse wondering trends seeing and update give Allied? and in you're the an renewal I of was in could if Yes. you terms

Unidentified Company Representative

of to it's a current but you their assignments extending Oh, sequential on is is question actually concerned, as rates of well right above rebook trend? as people assignment. combination good some which might normal it their experiencing said guys now, we're both on you booking next because are are growth rebook

a more accounts out for in few capacity that we or gives that's the that does we're having in last so that from hundred to quarter and expect lot Usually, another, get kind good there. of and territory points, our and increased I people to a that people reassign guess, of are of time we of up while come. short to do over on recruiter basis But up so people about move had us, sign year-over-year, more capacity to So growth time we use sales period positive a assignment one assignment.

Lalishwar Ramgopal

And great. your are MSP in and of that's any non-MPS? trends terms Okay, between seeing

Susan Salka

that grown has on more, MSP we focus more. - them orderer now have Just do

have MSP, digits, are numbers toward it's bit have MSP our just, we on the very another generally in BMS this third-party Year-to-date, down. bit. orders perhaps a another and ramps for more been been is whereas, basis, like through orders biased organization digits, year-over-year example, strong our orders where nicely even direct double a that up drawn have grown double a work but So might largely in some little

leader been so. be So that say absolutely, is expect MSP continue of I volume and to the our would we growth will

Lalishwar Ramgopal

speeding change Okay, just change? or is that's attraction great. candidate it no what the And Is then and finally, if - there environment there? on regarding also any seeing you're up

Unidentified Company Representative

the types. We of are all across supply trends on positive

driving jobs We a the so last the have quarters updating search the incremental whenever our good done jobs - Google a so really to present probably that for or you travel changes assignments couple team's some the as result, of to our and done that's website really I spent to think, at for a us. we've job and list online, applications of there top the preparing

Operator

Jason And we'll go to with Plagman Jefferies.

Jason Plagman

on up following A. question. J.'s Just

to for of benefit? potential think, that get is you working Is get I more the a those spring or roll-offs QX to mentioned, are likely a rebooked. QX in placed You that some there of candidates

Dan White

next probably We're the their good of assignment. to assignment, extended their Yes, pushing that's end at fourth week the question. on of a

So I into but grew QX, QX, July. think in travelers we we of probably do year not we then - there's have are did grow I some But where the a while. later something think towards much comes And to kind we or last maybe we this do improve to quarter for them June, to really talking potential XXX can been growth biggest year. at at point, today, QX we added and last over our although in

that the on eventually start for we'll and assignment to back adding get So then well. them base as

Jason Plagman

lot up step-up - order on after QX, just implementation we MSPs. ramp, magnitude significant about and step potential in about be In think how half, a - how directionally, second then could should the MSP talk the of how in that you QX? And being

Brian Scott

I'd of to think Yes, that guidance to those continue confidence in half what pipelines really the in back our the drive Brian. accounts year. - I with say half just back growth volume new confidence the us We seeing opportunities this in are we're give for momentum and is the of don't our the year. gives ability and

this in to underlying quantify. at quarter. color second it's the difficult growth Travel Nurse think, I expected point

a kind I continue for well. that, us as that would positive trend could think if that be of

Jason Plagman

going day the day? Is a That makes that or and revenue nicely on sense. that sequentially. up Locum's It's helpful. And makes revenue per what's or of per in year-over-year kind then, goes pricing

Unidentified Company Representative

Yes, about the The X%. there. up team bills And on has nice it's out job though necessary rates done doctors to are the a get assignment.

for noticing. thanks So

Operator

And Partners. we go next to with Lake Brooks O'Neil Capital Street

Brooks O'Neil

in we're saying of to think based sort linger the I by impact I just back run on what's new I guess, about it, should and QX exactly quarter for I I'll surprise seeing this relatively figure on to your forward. in shortfall I'm the The and I'm should substantial think we if company time? here, today, know out interpret a you're to trying have a QX, going expect, think, guidance is QX to everybody counsel I'm us expect what business figure to normal how phenomenon more you how and first relative a. well out going rate everyone one what of question confess I I beyond the to to would and pretty in take and and or you else by trying mind, a on period what

Brian Scott

Brian. to Brooks, do my the answer is best Yes, question. I'll this

you good think consensus to expectation us. is that volume trend that to still continued about rate again, feels build this and that we is the, I certainly expect although at I talked into the the gave guidance one on, do is of would look is model headwind sort a underlying we and I you're we the see it we for really quarter, know think if reason second biggest

our most I part to important to of think the that's ability grow. continue

So that of I story think part that feel the good volume about. of we're still

how would the will Outside good day to of model. impact performing about per the of about the about performance feel the the if of year, the think and business how back that, year I have half of overall from that the and consider we feel for basis remainder line. think the other the and businesses you revenue good just into we you sequential

Brooks O'Neil

Okay, that's good.

last Let they made business, completely in What's your to cross-country the that been related me goes ask we on you has the When know. look the well conversation substantial back that question. as you shortfall earlier impact are business today, one which probably had year. friends relatively seeing I different travel their a at with pretty a long hurricane

in just the various year. I you business guys and parts So up year some the of on you're I and guess, whether comment did pegged you thinking you in was assuming might have maybe can being,

Just tried understand change substantial there. that might the I out really sure, be in some there business to of the tone be

Susan Salka

of businesses businesses that underperforming that to we're and continue been Probably would I we're to one business. continue seeing improvement. change continue the the the is things to year, always our about as we as anything, we we substantial And the confidence into last call in throughout really we've negative here certainly go to quarters been talking few give think half in second us many see had that we what have good number think greater expected somewhat ours rate probably you anything and of was and If in all some grow. that the don't there I had that interpret off is premium the than yet of a here. in something the we drop the that a surprise, see took by part our in those but Really in it ability we would've quarter. assignments improvement mix. seeing the challenges reduction of it's

expected. has mix because that exceptionally strong, that to even might than quarter the was more a on basis, dropped of first probably but have we year-over-year Some

what better and Short So could the peak right. would be and to would peak slow utilization pricing each. that demand to demand pricing, strong we we I thing only that's consider are would still Mortimer be is do more that of probably think what very

me We the have think feel So by that meantime, possible, I can the to continue fourth degree, today, believe we've or comments hurricane quarter, had a couldn't grow benefited in traveler back might are is from we think, I so relative they even but in we to particular to any bit same were hurricanes. with point of we else and ourselves loss that let but question the pic we go pic the things that the I have that disproportionately impacted demand the not don't to anyone any that.

shortfall over us have, the and been to did there it traveler come Now would might have in might attribute hurricane. has well, been from but benefited MSP some that the that won that have months ways, some accounts nine last other contributed that competitors as and have to been I the

Brooks O'Neil

right improvement huge be business into a to I think I'm more in do about for quarter. just And period more the probably, it fourth summer we think that likely seasonality little in thinking heading might that you see robust the think wrong? very a likely way of your rates to to in the or bit, given effect Is trying guess it about those then that's period, again Okay, the the not might business helpful. we're

Susan Salka

have of remains drive I fourth you're premium conceptually first volume I rates about directionally, seen, utilization a and that begin think, it Yes, whether rates also rates higher ramp-up right. in in but to with to about thinking the in due the quarter be winter could We and the and think, do to greater generally you're it thinking ramp-up correctly. seasonal

Operator

Company. Benchmark question have from with a Sutherland the Bill We

William Sutherland

just At margin about ask. couple the interim the ones What there? of a quick point, this was gross regarding commentary

Brian Scott

lesser it. segment and less it's of gross sort the interim margin the higher the then some the just margin this the lower kind a to of with kind but contributors: but which has gross impacts, year-over-year mix is is are to of the seen it, two I the profile about time gross the pay some profile a being of segment. two just done to referring work on had basis margin change of those we've was on talk mix those margin interim, the And March bill to some One impact of revenue, within

William Sutherland

And XQ? Okay. I bit missed to BMS off about it's expect also be you and a it's falling, in said

Susan Salka

disruption, think the is both down it it's a besides to clients. at next-generation led and smoothly. much Medefis new I accounts from less the bit, pipeline if there's technology you sat Yes, little changes. at yes, has some to the performance also has is But that perhaps for existing contributors: gone in Medefis ShiftWise, One, more We've leading disruption the I'd really and we say disruption been implementation sales a and implemented slowdown ShiftWise. our technology,

that so down new And of slowed the onto platform. clients addition the

features causing newer experienced to bit the we've in slowdown rates, they issues contrary say also We've which fill that's good go technology, of rates. some their I little and performance a of but seen on what and with the Now more the changes. capabilities some is, new think news of actually gotten will a our lot the through we is fill slight to softness. the in we've have actually a that

was they're slowing clients going Now the client need a so issue, rates they're the was MSPs, pic actual are fill rate what were much keep submit our really fill was interesting to make was the with demand as mind, providers, reasoning closer they staffing to just but fill have sure that to just fill, not an they're wasn't filled candidates that MSP, because better, little individual but underlying trend it bit. it read we in and a declined, an because holding a relationship vendor-neutral down always rates get whatever some bit and

William Sutherland

remind this the a going And or? me, CRM technology for is a it that's like in, platform

Susan Salka

vendor-neutral new platform. VMS a it's No,

for that's We [indiscernible] also scalable, a been And generation flexible least, ShiftWise platform. happen more MSP to as in of it's well our use at as next it decade a clients this newer, place now. for many is platform of them our but

William Sutherland

VMS It's actual okay. itself. Yes, the

Susan Salka

Correct.

Brian Scott

Correct.

William Sutherland

curious area. then the And in perm I'm

what's a directionally? you once little you to mean, bit you - the thoughts and on your guys kind had from look up sector back the what stepping Just I unit would issues have at that to of What's broadly. got tuned better able your

Susan Salka

it's go it more of issue the physician would sell able more ago, pic some executive we maybe believe have address operating strong. then teams us an execution market also as - think, first sorry, be the larger perm doing I'll working both onto and the but landscape side It's more deliver of placement not Ralph you a ask into placement and been couple internal lack Bill. the really clients I ahead probably getting other changing should benefits organization. to that. our to the effective healthcare organizational about maybe so to And it's I'll done model on of it's of a oh, issue, this our and years of now Well, we're we're I realigning and we say well. very And search from Ralph But see physician of physicians, but needing being investor in a not market remains pic a starting

William Sutherland

are you that quickly. what landscape address curious changing just didn't you seeing I'm

Susan Salka

and - growth sorts is larger have growth tests have perm multiple wanting workforce management, hiring and more and are why to placement's. that in all of question systems which of and the enterprise great Ativan in centralize more MSP and we facilities. We - consolidation sorry There

shared hospitals it's they seen physicians. actually they're the have their We their centralized We've RPO. usually because The some RPO, more positive are how on-boarding larger owned is a that wanting want to affiliate at and trends true recruiting systems, services same approach. in to more centralize or and have seen

Ralph Henderson

comment just little the This Ralph. I'll is on executive bit a space.

been new and perform fill them physician. needed really the there a ramp our expect have as related. to provide kind on little support So recruiters we do of to probably issues for as and faster. In need a our customer primarily execution do DiPisa, executive, Susan's side we We Phillips Smith comments from We executive were standpoint primarily well. up recruiters the to business around more new that well better with partnership in the -

a refilling well and search changes investments the integration executive so entity we've has there. over is So there bit little year. some I last will combined better made there perform distracting the as think on that because and it's do the business

that. think, getting past are So we I

William Sutherland

M&A to clients activity the on positive? All got be is your a

Susan Salka

is. It

Ralph Henderson

would X our X will is It facility. do nothing one basis, with and bit client year year-over-year then do year funny of I another they or who kind have say merge the next will we searches

say predicted smaller maybe little little It's a go interesting does and show and that it there's you find that strategy there or from take better. for kind opportunity MSP more and out our us find sales client searches five bit an with clients So that, of a team across we harder. to another

Operator

And we Sommer have follow-up a SunTrust. with Tobey from

Tobey Sommer

Brain, acquisitions, acquisitions you XQ And then from from the for Brian. was I And capture free in what in incremental impact? questions year? of Two flow contribution strong. there do will quarter is or thing cash any quarter be third quite this full the

Brian Scott

first. Maybe one second the

of terms the or margins impacted gross EBITDA? like In

Tobey Sommer

Frankly, I was asking you revenue, but I'll share. take whatever

Brian Scott

as earlier, the missed is second the mentioned guidance. I week - in one quarter we Yes, to acquisitions, there

that in to expectations kind second $XX revenue it million $XX revenue we've for move take you that QX So $XX of will from just the take in given - million, that something and the can in quarter million there. closer

think, free up year. basis, cash on be the north side, million On should I full flow flow a we on $XXX of cash the

$XX So and not just which, cash that's year. in the of likely million again, but to $XX we at million-plus payments quarter, we likely quarters high uncommon think - QX had the each would tax the in more I to point, no be is the

Operator

I'll closing any back you. our it remarks. And speakers to turn Thank for

Susan Salka

everyone support. much, And your appreciate on call in certainly and next look progress updating We we Lori. so Thanks, the forward on our right. you call August. ongoing All to joining the today appreciate

Operator

your Executive for you today. TeleConference. for Ladies participation concludes our for you. this teleconference gentlemen, and Thank Thank using AT&T and

now You disconnect. may

AMN Healthcare Services (AMN) 4 May 182018 Q1 Earnings call transcript