AMN - Earnings call transcript Q2 2018 | AMN Healthcare Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the AMN Healthcare Second Quarter Earnings Call. [Operator Instructions] As a reminder, the conference is being recorded. And I'll now turn the meeting over to our host, Director of Investor Relations, Mr. Randy Reece. ahead. go Please

Randy Reece

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

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 Susan. Financial Officer; now to Chief Staffing; Scott, Ralph will the President call the Officer; Solutions. call of Salka, are over today Professional President Executive On turn of I Services Chief Susan Henderson, Workforce White,

Susan Salka

in with high healthcare the second quarter, solutions revenue. Thank demonstrated record AMN leadership In you, position our Randy. workforce

somewhat which relationships demand and good share clients an and gives is of us tepid. strategic where to We continue opportunity to expand MSP some businesses environment win in our market build in new existing clients,

Otherwise, quarter of line disruption expectations. were staffing businesses with large due stronger-than-expected performed our to primarily Our event. a most second results in labor

challenging. more a our the growth third bit we track quarter, enter As became

that also seen running and increasing further still locum hours for jobs tenens business increasing is though BLS are hiring high. permanent worked. lower and June is by at have has high the volume care. They a average care nursing. reports space, solution. hours a at disruption are clinician's attrition continued that grow We indicating lingering in sector in show overtime permanent filling our their Working health The gaps staffing sustainable their more travel are overtime an all-time clients even typically not growth statistics health strong worked labor showed Several to

the drivers for of have effect company. remained growth staff. opportunities long-term the demand can moderating temporary business for Macro positive it should However, of and our support

focused on relationships, enable particularly should also are We and opportunities. our this MSP share clients, market growth strategic with expanding and

turn let's current outlook. and to results Now our

high XX% million revenue. year-over-year of grew revenue quarter reflected a $XXX Second for record and

guidance not include strike-related Our which quarter. did $XX totaled revenue, the million in

our Adjusted of revenue, quarter this guidance line $XX was performance revenue. in our second or XX.X% EBITDA Excluding was million with range.

business, nurse of mix or to disruption revenue travel Revenue for premium rate was higher due nurse a higher average excluding while X% and segment rate of million, assignments. largest allied grew the was down $XXX Volume labor year-over-year our by Our lower year-over-year. business. staffing, bill X% posted the XX%

with by in current team even quarter. flat with other rate environment, volume we're approximately in enables create fewer to year-over-year credibility average the In With high-quality do third environment Our being Travel quickly assignments, to fill this outcomes year-over-year. new order our expecting have that revenue quite continues clients are some grow demand are industry candidates offset we and said, travel headwinds our bill reducing the ability for The lead with strategic service we inhibiting relationships assignments clients, that to and to This confident services. Nurse X% that delivery. muted translating excellent and is premium rate. AMN engage nurse trends growth. into more the the This is is us

quarter, flat that average stable. the our from Volume allied bill quarter upside trends the we month, As X% remained Growth has up indicating relatively while staffing better-than-expected to are in rate month to mix stabilized. the revenue likely surprise, was with drove the look pricing second third in shift year-over-year.

optimism strength the Continued our with sustain its us placements, can clients, gives business that in MSP particularly allied growth.

in segment by of X% driven second double is which revenue business, staffing soft with quarter the revenue, local digits Our remained volume. down

daily care from local While clients acute assignments. staffing solution, many shifted important have is away an still

of in both improve We service model delivery are adjusting and investing to and profitability. performance this business the digital capabilities

be Looking division. did In volume segment, to progress to the make revenue segment tenens first revenue the local million the year. with expected margins offset with quarter distractions, prior locum demand premium locum down mix slightly internal second with Despite our for X% quarter. flat profit shift the on is allied tenens year-over-year of third along above lower declines ahead staffing quarter, growth rate primarily to in $XXX was Overall, division and by remains compared the nurse year-over-year.

business and completed we confident appear we of market-related entire Once due locum post-launch but technology the business the lack migration to through not to to Our we are learning rather changes and operating efficiencies. technology platform. productivity In from higher-than-planned be model are a upgrades. does May, curve, tenens of will gain and process new disruption growth we our very

is third year-over-year. be expected to the X% tenens quarter, locum about For down revenue

was April. X%. our closed in million, which The was of revenue Workforce XXX segment segment was Solutions including year-over-year by quarter Second organically higher acquisitions XX% benefit up Other in the

to for as like businesses Solutions strategy more performance permanent an health clients. welcome our and perfect more our strives create the transformation Kelly the as workforce a leadership in joining background AMN of this and leadership to solutions the in Rakowski care businesses. to and is President AMN outstanding has placement us I'd responsible interim give team. collaborative for consulting Kelly on and of is be fit our color segment, and Leadership Kelly first will in I Before Search

Now year, This color slightly progress prior we permanent down Physician productivity, return turning to growth expectations. X% revenue division physician on more make to quarter. from little third to continue this in on to below and year-over-year expect placement a was segment. the perm revenue

positive million growth. added in head division Our XX quarter. the second produced as of Peak we into in second consecutive its which XX% mid-revenue XX the its revenue revenue by double-digit third year-over-year, cycle Health in they line acquired quarter grew of top million quarter. with momentum April, MedPartners,

saw of mentioned revenue down businesses Avantas In we workforce slower momentum quarter. sales VMS last Our had optimization, reflecting year-over-year, solid quarter growth. the another

see to acquisitions. for workforce can quarter XX% including and year-over-year revenue the X% scheduling which up strong the X% to decisions. Solutions appetite organic solutions, about and optimize clients help for staffing our to segment Workforce on We an approximately expected be a continue is recent up their third Overall, Other basis

remain recent growth moderated, we bullish the have of trends about potential Although AMN. market long-term

We our this greater contracting, MSP wins new much another in positioning awards. deals are for year year excited about contribution XXXX. MSP the will momentum in These and with contribute us with strong end of year-to-date a in at deals revenue

our our achieve and tools We patient continue goals. industry in to innovative value care them financial will clients, and that to to deliver to and greater transform their help technologies even enable invest and

strategic, Mark core our recently Officer. deployments professionals, and our the executing leading that were to Jones And products. most multibillion-dollar motivated are extremely boardroom a team. is AMN Her & communities with very care has previously building experience patients with substantial led announce of will expectations team the for commitment team. strengthening digital and valuable drive focused welcomed health use refining the our we technology exceed He care Board new record AMN, technologies. new week, execution while clients, leadership was They to brings of global GE and Hospira excited this on Directors. digital Healthcare, be We entrepreneurial as track of applications, experience Chief to to the AMN company. embody In of AMN our business in Information executive relevant their management serve. health ability services appointed innovation, family Daphne also transformation an designing and and major and having talented we highly with accomplished spirit launching Daphne in the the recently, a our software we to leadership and of roles the have and and to Mark and engaging Hagan Johnson successful on Johnson, extensive

are make the she We joining AMN honored to Daphne board, very know have valuable I and contributions. will

shareholders. business are that in help to making along recent our for and create foundation delivers evolve health to technology professionals build care These a our investments the value additions future business changes clients, a and growth. strategy in our us stronger model, Our and to with way greater we leadership,

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

Brian Scott

million and our the Susan, was a The $XXX guidance. of good everyone. Thanks, to included from our large of was of afternoon, well in second revenue not event above million labor high that range company's $XX due guidance revenue end disruption quarter

margin of favorable begin SG&A physician the in cost quarter basis from $XX The recruiter revenue due physician by for recent was April. was Excluding as to XX line. from revenue Allied also quarter prior with recruiter impacted allied quarter. year and expenses in of SG&A and year-over-year the the down improvement XX was from segments. margin the expenses an recently resulted Nurse increased malpractice and points a last and nurse margin permanent recording event, early The Solutions this our the occurred a higher Sequentially, acquisitions in was SG&A locum companies of quarter. gross points last SG&A XX.X%, revenue of than recent acquired expenses or primarily year-over-year decline margin and right tenens larger placement SG&A change segment cost expenses adjustment The in by percentage lower year. revenue last was gross from but the added last expense sequential million XX.X% partly of in expenses. and the change and margin. a totaled Gross million compared year, from model included quarter a unfavorable prompted $XXX from that in mix change to favorable in basis mainly in offset by driven improved perm lower us revenue. in reserve the Other the The Workforce by the that margin the rather XX% XX.X% recording increase

X.X% million, increase of Second from prior was and allied quarter revenue nurse down an the year segment $XXX and sequentially. XX.X%

health below-average a average compared points basis decline the XXX prior Excluding points the to by the margin prior was large gross was higher due This the points Nurse basis higher with and disruption costs. XXX health quarter included XX.X% adjustments. lower the event gross also year-over-year lower the insurance in Sequentially, prior coupled partly the and lower insurance was margin labor XXX and of favorable XX.X%, to volume by from in X% reserve by adjustment. rate. The strike margin malpractice bill and lower lower-margin along Segment allied year prior margin year disruption margin with costs. gross The part below EBITDA staffing, offset was favorable labor prior on from higher the X% the seasonally was year part revenue second basis quarter. sales was lower year some year-over-year.

million filled and than tenens from the XX.X%, basis average was and basis by up days on of gross prior basis. by basis was basis, points XX down but locum increased margin XXX revenue X%, $XXX the XX.X% margin quarter sequential the Locum slightly points Second prior XXX Locum was improved year year year-over-year bill segment EBITDA was lower points by a than the rate lower year-over-year. X%. a tenens of sequentially. number On of X% up tenens

earnings that Workforce Second the segment XX% XX% by margin basis by of Solutions segment. $X.XX adjusted sequentially. of XX.X% basis share per included previously basis sequentially and below $XXX points Gross quarter. points perm share quarter. the lower of in margin in XXX of recording million was consolidated acquisitions in driven On million sequentially. the XXX of XXX lower lower by gross a year were in income business EBITDA the up was of basis shift earnings quarter per with was the acquisition to prior the second organic of by quarter Other points XX.X% and compared recruiter year-over-year net revenue. previously year-over-year EBITDA segment. and was X% cost and in of and mainly which XX mix change up with diluted adjusted revenue lower We recent year-over-year a second points X% interim This than of gross and leadership a variance margin unfavorable offset prior was of that The SG&A physician compensation an margin segment the the the Adjusted year-over-year average, was million this basis, $X.XX has was lower partially result in along $XX $XX noted reported margin sequentially. year MedPartners, placement The was the $X.XX was

X lower This quarter. tax our remainder the end the totaled level of tax operations rate was at of expected days flow the XX lower federal and the consistent the benefit strong and was the the to favorable Days $XX of In quarter was quarter. income year-over-year. flow for in last million Cash working reflects cash XX% from be XXXX, of year-ago capital outstanding half from result XX% than XX% days, Our quarter sales quarter, up rate. with profitability, flow and for the year. first operations cash $XXX million, is

of June $XX XX, in the and equivalents quarter totaled cash million. expenditures Capital $XX were million. As second

leverage During repurchased was shares million of and outstanding $XXX total the X. to stock debt for quarter, our times million, X.X ratio was XXX,XXX $XX and our $XX quarter of At we debt. end, million repaid

revenue is to rate On consolidated expects guidance. the reported the growth Now labor an X% travel represents included primarily expense estimates interest percentage quarter XX.X and to following: tenens approximately XX.X%. diluted in of revenue for the to year-over-year be to share revenue $XXX expected of million, third EBITDA call revenue amortization basis. a And of company expense depreciation is the due Gross million, is of margin basis, quarter the This of The expenses projected be be third expense No of X% mix lower third be in open Other $X.X $X.X million, XXXX to organic $X.X in count integration-related of up down the XX%, quarter million. million X% to shares. let's on turn to approximately SG&A margin significant is now of like we'd and locum $X XXXX business XX.X%. million top a expected approximately to $XXX and about about disruption nursing. guidance. as expenses expected include to disruption are questions. premium of assignments line Adjusted million

Operator

Jeff our Silber with Capital BMO [Operator first Instructions] from And question Markets.

Henry Chien

Jeff. for calling Chien Henry It's

-- sort some just has terms -- driving on changes. kind get is of in flat, of like [indiscernible] It clarify gone down. the these I there? doing I -- or quiet So seems so just to of wondering, in view care being do the change pointed think widespread labor in want just as it driving your of of out, the like for and the understand of I'm seems what's business you wage fine premium is what orders travel, But just still you kind health demand. volumes is that the context shift rate

Susan Salka

why more With third what some the be the And gave in going been that the guidance Ralph results analysts turning speak than mentioned, have a more and quite softer We've locums consolidated bit it's the disruption quite might confident their a feel expected. of a as that would've So on some to can quarter recently, that's lingered that quarter the is into related longer team third reason little would've we I seen bit But of and a part continuing that. said, we expected the greater in business. good we some on than first, to below models. honestly, basis, we guidance the is of corner.

growing, volume MSP clients. coming Nurse and is On the Travel our our that's primarily still from business,

assignment, or fill from has some true to direct with third build party where those in the seen to part party. we quarter been more is and decline the deliberate Our quite we and travelers ability greatest for than Direct growth in stronger TOA, and third MSP-based and relationships which business, year-over-year time on our on our do is that. have is year-over-year as continue jobs about we've sorry we third

hearing of And in new softness. relatively and of and as mentioned we where in new certainly script, as more saw own last that data in so. look growth at show we not meaning, lack orders But travelers, perm of hospitals hospitals due huge lot very the perm hiring, as support indicated our their is their month we perm more but hours have staff so the there's characterize notion from good felt assignment. flat, overtime. they've being the a up orders that as to likely perm number indeed to we're hiring that you gone lack more that that's It's staff clients. more anecdotally that existing high. in even are as We orders, probably more and a working being in though slightly our worked, and data off the And current that's The -- new or enough growth perm not the remains of on been BLS that I assume hiring, being greater it's overtime hours come number, even the would worked attrition

don't that know I question? answer your if So helps

Henry Chien

No, that's really helpful. no,

Susan Salka

actually just very bill me seen we Henry, rate. that average the in let pleased the stabilization we've with And add, are

the but year-over-year decline. assignment was up in just ticked little down and news it sequential saw also we saw the expected, the we had the something we the it out as mix, which we greater brought premium second through quarter. a quarter, being rate third And more a in You that is stabilized bit good quarter called and

orders, also fourth received and We've quarter, make on believe point very And are of many that those look first hit of probably we strong rates so the the largely as most that stabilization the well. we'll and winter our placements mix. which in we in the

us go So as gives uptick typical into in confidence fourth quarter. season good our we the

Henry Chien

just there and that's I if if a changes order in how I Yes, correctly, that And any Just going that curious systems? recruitment follow-up remember that side. is, helpful. the, the locum internal all. that's think, know is your role or some I as on there played at

Ralph Henderson

it definitely quarter. a results and in in our role played forecasted Yes, the

front deployment think we replaced XXX office which will the the in we with back the systems we in could and our is entire to which across old and jobs So about during business, both And model the technology. touched people new fill were quarter, systems. of operating recruit our past than our what a us we faster model streamlined to modified the allow also

So some at very same front back retiring from we're two the office We systems office integrated system. three different old systems to one time. systems, different go

So there's wins some there. big

QX as is improvement daily our late will start we confident than and going support so next expected, even to it's that maybe to in quarter guidance reflects execution, And ultimately probably first more we you that see -- that the see little year, a to our QX. Susan think we But that disruption can better mentioned, disruption. but we're we'll start some

Henry Chien

terms complete expected mostly that mean, is XQ by to I be just so of And implementation, just the in or XQ?

Ralph Henderson

So in end now guess the about for actually I the weeks, we weeks. we've of five production been the second towards quarter. the of last phase completed six implementation And

call period of we the work continue right period is work of better, enhancing finding we're of in really adoption still little important. we're now things period time done. where where we get we're that But mostly that yes, make the so, it would warranty product, the And a kind kind

So kind management. of change

our making are to have production new way team done on training job higher good levels. leaders their excellent of have the working tools Our and an sure

Brian Scott

Brian. this is Henry,

up to on just So follow that.

last seeing in in quarter. lower the that's of had reflected went they kind revenue that you and see look when we you through of the at fourth actually months. the more the placements that you and third to over of If through in half more the implementation work, the And Because first the more activity, see disruption in several the go actual year, why it of quarter. third you're flow physicians that booking guidance, the of lag we the

in to start So our this kind is more see as this of that's even of we productivity later we in XXXX. to first improve alluding of really daily move part part so quarter, Ralph where to the the as year improvement and

Operator

A.J. ahead. And have Rice Suisse. Crédit with go question we a Please from

A.J. Rice

Just up tenens to locum maybe follow around comments first. the on

you're of there So system the is new it that of to your been you end you right there you tenens tone of the caused? this the is function at softness other at is there? this? seeing you a Has still largely disruption basic out the come think like view you that's are and in what any do And business the once the change Or locum management the have team point? transitioning management feel underlying

Ralph Henderson

A.J., something with that. management have the this is others Ralph. start team. add. Maybe I'll answer might to I'll

have that and We both ran business. that revenue it our allied excellent profitability to Decker and an Remember He led in business Jeff he ran runs that substantial team business. there. increases over time

confidence prior favorable So in the levels him business, The of as of which and kind lagging a what of quite saw I of hospitals still above business. say, a like, market, slightly substantial of is is that that we couple of not the the segment years past is are rest we'd have as the his mix in the market The portion itself, we year. lot would team. demand

back us any grow there business. growth, us help would is the plenty there So in year-over-year to that accelerate to but hospitals of demand for strengthening turnaround

A.J. Rice

demand what drop we that in demand Okay. I accounts, description you quarter? it And market. the and environment. relatively -- in tepid down overall -- is the little as competitor, tepid few further second that know in that was might've much talking Or sounds characterized you're Is you that rate, saw nursing off your and we make said want then guess just sure just last yes, the a the environment. MSP a smaller of and weakness -- a is tepid -- [Indiscernible] it? characterize scale, that, like weren't scenario, Are first saying. going travel around big I we step today and from describing the seemed the relatively I back I quarter the but how comments across MSP indeed would mean, And It to you're demand premium broader -- to they what a saw exactly sure obviously it concentration like some about

Susan Salka

with the start are to and if second why We comments around, comparison I'll back hiring census overtime. is and and the not using to of think geez, say, the change. well, first, quarter up seeing I'd shortages, our and we and And sort step it clients we there been necessarily. saying are questions there's in Well, because earlier staff hasn't aren't just -- any no, more kind going growth of that's demand? they're more are still more permanent grown

demand that sort new bit referring not a it's MSP we're orders call it's is third stable, so stable. really or the doesn't party say third that growing. whether to -- from around what relatively more of It we direct. move would tepid as come and But clients So I'd in or

assignment. For MSP we has where where our on actually business us, in best the very seen the strong. growth fill have rates. travelers That's we've greatest That's been

I have client of and mature much maybe those So just strategic relationships variation built as that it's many we different and a wouldn't perhaps we've are of just relationships very strong, and base. we see that think because

rates. that we fill MSPs opportunity improve We have over the improve clients. at more to or And these also our two, new year we've still last to maturing as ability won fill we have rates of are seen

is or where that we really, client, is that from. clients jobs. last we are their to management. see our still rate. averages the over their in ramping, and then our gross could Our of because candidate filling the to many course, the for to, high fill overall we think, are fill that we of fill our terms two And first objective comes matter the opportunities who below under fill still no I at the we've second have of And for of where we're of in think year get terms But rates spend job goal won of, MSPs again, historical

know relationships? Dan, don't to those add more strategic MSP anything if, regarding I want So you

Dan White

of things you, there's I think Yes, A.J. couple add for would I

MSPs have at talked about net the about much there. have grow higher we top you look of Susan more and room a XX year-over-year. little XX those bit revenue we Across it's of to all If fill a rate. our we that our XX%, XX have, average think MSPs,

have into from On hand, from new clients, the in entering other second go-live, in expansions. we MSPs six expecting just or of year QX had $XX half revenue leaving XX the see that million implementation, the been go-lives the in We're we about to see five them.

to expect also We the in going continue into those are to fourth some of nine into really to well. expecting all and contribute QX another are to live as grow go quarter But XXXX.

A.J. Rice

Okay.

clean-up Just two questions.

for update a I contract that MSP think these any there have on might very about both out Is discussion be come bid. up last some quarter. There large was that?

Susan Salka

asked think yes, that. strong about -- that just as information we've we talking don't don't pipeline. I about our provided much very I as been

we if would to there you that assume that so And mix be the in certainly opportunities, are those. would want on large

alluded Dan second certainly we management. really the I in be since rolling we and some to, close wins think characterize would year-to-date and nice and $XX I spend as just out even will those even under as So million, one to have gross rather -- large, quarter,

of kind work then ones actually and and a begin to over kind to that sense give signed board, about talking implementation. of are we've of we'll you towards sizes I'm just the the all So

helped. that So hopefully,

A.J. Rice

a in exploring. manner but I'm it doing discussion branch other potentially update virtual on like Any the on almost wrong some there to were was too, opportunity you but more network place seemed that one, Okay. -- about this, And then branch maybe an it put that? sort or operations electronic of

Ralph Henderson

Yes, in that Ralph. more one. deployed think we this call to is a centralized with talked the have a that it wouldn't down about the we've model What as digitally staffing. part quarter The than last to We of I'll model. I the be. is staffing number the and start think, credential is over short-term inconvenience about model, service of -- time efficient local shifting that as for just branches. our assignments lengthy on less attractive being that used bit, talked that business as in diem not per is well, -- expand little and We the staffing made

So have some in job attractive. otherwise. -- make Hopefully increase give, it who we then to and and mobile putting a full-time cut might growth we RNs -- that deploying mobile-y, expenses and by there. that creating and not that would some think, more operate our some working think internal talent profitability are little taken our devices moonlighting I might they opportunities Certainly,

Operator

Tobey We Sommer from have a SunTrust. with question

Tobey Sommer

I this important kind delve if in be I of little speak kind do precise you fill the magnitude, two points points of demand of pockets What or weakness, bit percentage ability or want one rates the an five grow from to tepid or rate kind fill potential given topic? to shield would a And to know more. helpful. of it's you say or order of don't environment, or XX wanted kind to yourself have improvement a of the

Ralph Henderson

Travel guessing and our Travel upside Tobey, the business this there's is in but highest well. our is allied Nurse. Ralph. business as Nurse, interest with But I'm I'll locums start

we've We're -- be there are We -- remaining. fill a do been we Our improvement. upside still points higher Certainly, there's are got percentage X X decent would very rates think than probably good. -- today. X

implement MSP new a good bit accounts, lag. a there's of When probably upside. that's little we a So

said to before, filled we XX% rates the kind out XX% XXs, think I and -- the fill get and by the see internal in as mature at we to I've and fill as our internal even high start might XXs But And they of affiliate this in vendors. rest just fill. up is higher start so

certainly -- level we're have we that all our So of not accounts. at across

Tobey Sommer

Susan, that you hires greater participated felt to mentioned it Or single full-time those business? Is sort hires? question the not AMN helping that internal of your kind RPO in in, a achieve really thing efforts of customers that you in more clients of of [indiscernible] making more is staff. terms hire has

Susan Salka

Yes, asking, thanks for Tobey.

second the actually nice about talked while, a in did a quarter. have they haven't We in RPO uptick but

their really clients. business yet but to But in their we our importantly, results. with characterize still nice to small also material want they their most improvement Now a sales, had both as relatively and that not placements -- in

And that? on more so you know, Dan, little don't I give a if color to want

Dan White

was Sure. your volume-specific to. and of business signs XX% To kinds Tobey, really agreements to quarter-over-quarter. that I'd prior XX% exclusive get business up with year happy over that to X-year be programs. X- point,

lot more And not thing. in to That kinds programs you before. news of than I referring that kind of these been of there's team good kind a is there have onesie, The interest so does. that is were whole what twosie think

so team so expanding -- of and and couple and And the is deals -- They've those in now. the quarter, customers, a worked new customers. new deals are renewing signed being

lot of continued prosperity seeing to comfortable same So -- well. into care, from more. but do really of for going the lot is kind talked about in that large really see not the that say about outsourcing a we're still a whole leaders I into transitioning it business something I would overall QX being health as is message

Tobey Sommer

the when kind delve stage job it's I'm and to GDP what's propensity time a would this there? luring reason at to full-time with got nurses as growth, in good into at can -- what jobs but why you full-time of pretty we them maybe growth, of an be fast relatively into And details think work the some additional would I wages guessing decline? compensation, economy

Susan Salka

I as -- as Tobey, upfront. don't it it enticements is it's much wages think onetime is

level probably and you of portion wage or center, increase will, if from that a rising rising by that because hospital to the done what not a years expense are at comes than in at higher prior than inflation. that cost wages large the more nurse typical they're wages, budget certainly While likely of they've

But stay So we're probably upfront: sort times, or isn't not the are which would beyond years. a hearing it's onetime than of not again, one reimbursement of are many lucrative tuition thrown sense make other there. wages lot What we it maybe since If sign in. X%. of for two sorts enticements. bonus more all being anything are typical unusual the hearing They're X%, your happening, bonuses, of and is ongoing, upfront requirement to things to raise they're $XX,XXX of on; particularly maybe sustainable nurses the overall incentives usually Other one-off. X%, a would and like incentives that costs,

it travel, onetime assignments being pay the Looks that mind, more a the number bonuses travel see come even though or premium like assignments within to they're in has keep has industry might to travel of go down. get many has open nurse down. of But could have where opportunity rates if maybe So they the that, with perm, stabilized. within rate I those higher still to options like the come presented a They attached it. bonus take And exists. number

take who So the of you decided to some go sign-on traveling and might nurses even perm have some bonuses. that those of maybe were expect

Tobey Sommer

year. elaborate half you one, on kind the and year of the the a orders Like, the has Can tough been what's an next what shape and up relative premium might rate you glimpse typical elevated demand what Difficulty] you bit early normally of to kind of exiting winter looks your year? Could seasonal little of contours early describe conversation, expect? [Technical in like since first into a that? more the

Ralph Henderson

were to of winter still a to a and it. just basis year comparison time year, orders We That's to year-over-year other how seeing a are equal for thanks. and levels Appreciate bit sat submit through demand a to Yes, quite against us. we actually on those see question. there's we're tracking of clients prior prior great that

category, of that the do rates same bill premium rate of kind they in far, because that premium those prior it they're the and they're bill premium do so initial hit the rate year. often we at relates received As assignments holidays levels orders sets they a demand to of peak were the over period,

a drag positive. more be unfold shouldn't this no, could be So potentially still on It business. our to actually

Tobey Sommer

know quarter term? might get all medium kind guide of necessarily more sense little for how but a this little model a bit kind with -- bit down guide of we a organically, to longer, to gets you third the out don't trying I And think about the

Brian Scott

Brian. a look It's Ralph as we quarter, said, behavior. normal the we're like feel we fourth to Well, as seeing

a kind of the of expect see of So But we from in off QX. that point, this little we're the we'd would a it at winter lower seasonal trends assignments. normally bit from point coming normal seeing, a uptick isn't

kind that pretty And I of think of but can so off the of that build we've you for seasonality the fourth normal quarter. third applied guidance quarter given, off

a orders I amount, our as those have implemented fourth not look get we quarter. and huge at newer upside some normal rate quickly impact we and that's still of have is much think We're they'll the how awards they the MSP but in just beyond little a in how can as for that optimistic bit when unknown but see, of the seasonality. maybe the come of us we some,

Operator

Mark And our next with question Baird. Marcon R.W. from

Mark Marcon

standard percentage bill premium on up nurse side? trends it quarter rates, you orders seeing last think orders? should relative wondering talk you of of ended a or to how I'm Like, the travel rate this about we can sort of year-over-year What composition bill during on on basis?

Ralph Henderson

just basis. bit if being where on it. I'll a start. decrease year-over-year basis, it's at of projected the bill year-over-year basis all -- it. end right about guidance lowering Overall, you year-over-year into The little a down X%, a QX, on the Brian is detail rates which in premium a the might of forward-look the percentage look we orders our of our some up on And to same add is of there. rate bill

just utilization last it. year, there more of So was

I the capacity about but hadn't the think kept were up. demand industry same, levels

full-time So to orders -- people lever out were to, and time of we those that at get trying remember, filled. jobs

premium now. run rates are little a bill So higher did they the than right

Mark Marcon

ahead, Brian. they go What like -- were

Brian Scott

I'll Mark, color. can and you No, just question, follow give then up the

Mark Marcon

wondering just should to, say, premium a past at Or level filled that? were how quarter orders the think of percentage relative about ago? was what this we year a I

Brian Scott

Yes, our XXX I was percentage second quarter, the points. It down talked that at it's assignments -- we the the it's to the of of in basis rate the premium think guidance, -- placements about after last third kind of were from this that we've assignment. talked Nurse around call Travel maybe XX%

So it does seem to stabilize.

as that the our last talked of down at little in bookings, the We percentage of in just Really a even rate. expected at call kind looked it way. pretty the has the bit been quarter premium in that. stable we out that that We July QX, terms played was

to down. segment that So QX again, is pretty the and the average consistent bill rates with QX in X%

we're assignments no as still changes third we're large of the rates up the So on are I'd say the holding average well. business, that seeing taking. increases quarter, overall from core real and in And clients we're and rates rate again, the types the second getting to certain

Mark Marcon

of much? percentage this And rate the for how orders premium quarter so is are that

Brian Scott

Yes, not we're time. going going we're to to giving -- keep every that

that been say. -- okay, kind to But to stable we're we'd QX what to pretty pass going it's So I'm answering going again, if you're of on directly. QX in is just

Mark Marcon

it in Or QX? what was

Susan Salka

you we gave we because in higher I assignment that now, rates, the travelers those our June and mix higher received Right volume. for honestly. be and have and our quite example, the premium the of July, at winter would orders, the mix would rates. don't on orders gave are winter expect We think we that the rates,

earlier little received, around said to those what a And orders of is have rates. the so been going bit. that's we've Ralph majority winter at premium the move And

So we're feeling good about that.

Mark Marcon

MSP sounds are it orders, ramping. side, mature terms that the obviously, of like on in MSPs, do more to then some And trends? you you in of what see continue the The there fill with order MSPs

Dan White

was in this little So -- I of revenue, that made is bit earlier. Dan. That terms a comment the the was

count I for of mature, order XX, flat. pretty the ones? the and Is we're seeing So mature true that the about revenue most most are higher actual which think of itself top is year-over-year,

Ralph Henderson

Yes.

Susan Salka

some and actual maturity, portion fill rate, our I grow. what to think got said, is room And as our at direct also fill were we've you asking Ralph

quickly. candidates fill accounts, us mature -- to great placed measurably changed every we're we have of order. get fantastic we with basis. do can't more, needs we affiliate a client's because helping also job it's quality a the of For or opportunity But going vendors work that not XX% and year-over-year that's If on to fill a

an relationship clients. important those the of of they're part success with our So

the So level. mature are over have we'll fill less been nor not, at we MSPs But be, that that we at XXX% maybe implemented last MSPs. year, maturity are our below for the ever direct

below fill at be that's to direct XX%, increase of rates. some them, have could our we and XX% where more we opportunity So probably

helpful, that's hopefully Mark. So

Dan White

ramped months And about is direction some they about Mark, reach I MSPs had last after XX to average, XX days, go-live. after Typical our time. implementation and months the maturity On half after over. implementation that their X maturity given is about then

time So get even takes you're to about. maturity you can talking see the us a the level for to of of amount ramp decent

Mark Marcon

nurse three expect disruption -- old quick would any one the go would would on And their be malpractice or -- the the margins was on reserve when work? new and in with be, without and in productivity internal of one. so, labor Two, feel would what how the systems expected there locum of couple levels? questions. it really was another could labor of One, really impact what That's In if back QX gross the and a allied disruption? then much? And adjustment margin any and gross words, then other way be to quarter? would the third this that in comfortable this And acclimated personnel that you tenens, phrasing your

Brian Scott

segment a of couple impact points the was This terms drag. basis take is questions first in about the The I'll there. XX to Brian. strike of

you to normalize we at talking of gross being about second the appropriate about that what segment. been as of of the kind that play is So forward results, that margin, XX%, the about look for the more QX, is which years quarter had say that's range we've think, in if would couple last you the

then prior kind a it look overall had if on nurse, And what the you quarter $X million quarter allied at into year and second million allied. reserve quarter mentioned across And of year-over-year, about a our nurse over adjustment, favorable spread $X adjustment. of expectations. second built in that's of an lot I that and adjustment, kind the just third So we've locum, malpractice

of EBITDA I'll both probably the -- year-over-year, Ralph. those comparative margin basis for you combination that factors. and why on the of a tenens, So locum pass gross that's margin the then see to down And

Ralph Henderson

to about curve by on prior and from our seen learning individual, days days releases Yes, XX ranges the the period the go-live XX by activities, and that is XX then adoption XX training disrupted almost. are -- to what we've from

quarter So we be great, the see that. like are expected. anticipating is be improvements some to business locums start the but to that first Late in fourth will quarter would

Susan Salka

That's the impacted. see beginning would the booking improvement when revenue productivity the quarter. and in start and third to the be quarter would We actually of fourth

Operator

And we Tim go McHugh to next Blair. William with

Tim McHugh

Are normally give up just in what the following you locums optimism? that change guess, guess, you I be clear. is this? you you more, expect I last was to last question, for like based seeing what -- on of given that on which kind Just signs it Or that, more activity yet would answer, just the

Ralph Henderson

live early we went teams couple prior -- year already. that back groups production up we're those is above in of mid-March, had of and back Yes, a the

built sign one candidate and are the weren't well as some flow tool. margins in increased our model have has previous our there pricing our that's that in improved as tools are So that

bit when to trying basis. little near. anticipated, positives It's of disruption of on more appreciate there's there's question while harder the yes, to just We're is a the predict plenty -- side can lots XXX the we line. people So you looking that I when positive to point But the of than it because cross other small make that signs. a at it confident us that is than

Tim McHugh

just And MSP I on guess. comment the then go-live,

metrics. guess, an of expecting go-live last or how we've I seeing the this normal abnormal here? from MSPs? with an Or incremental is the But years? couple seeing relative basically you some revenue -- of consistent level what is gave level pace been You to, Are that us abnormal of

Dan White

pretty was quite was normal. and that -- a customer thorough go-lives large one extent, the did deals outlier, they're we required We have So year, integrations. a large that to all that extensive a we very Tim, that the last they're an had analysis of one, of

by go-live And back about pushed they their so X months.

of have of now this as year. All live of those MSPs gone May

talking now half back XXXX. about all through of that cadence I the year flow of this to So beginning into of sort and was that is

Operator

Plagman And Jefferies with we Jason and go Company. to

Jason Plagman

question, so drag the was segment? on EBITDA nurse first your well a strike revenue allied The as and on the margin

Brian Scott

below a was little just EBITDA It consolidated margin. our

margin, lower lot of driven So large gross that it amount a and of was expenses. by had pass-through actually a a

margin We the have and pulls number of margin have like you costs the have of like down that travel that. you favorable and the workers but hotels very little margin, a on because brought no that on where in, we either size And SG&A things or gross that. and

prepared but it of drag on for not material a enough end in obviously consolidated nominal So the day, our the note margin us had remarks. to

Jason Plagman

see your you the on revenue to see your stability you ability MSP clients then comment you'd volumes of if any push their client's hypothetical your and that can scenario? ability order long-term -- pullback flows? from the of you And to just pullback sold some several that weather How just their and in capture much impact an to a of of rate higher offset in

Susan Salka

well. help quickly And the more to them. newer I again, those us the a our upon we very hard clients have vendors we ones, with there need our to what and increase orders more rate fill then Obviously, have and current to it So it's be rate, increase affiliate percentage. we that depends And high going would as to to think need difficult for filled that for fill to always opportunity Jason, and fill already be is.

on would room obviously we number some specific, what dependent be upon because But softness a positions. upon it to sorry of where can't kinds I that happen. confident that occur. and put it to where it would depends decline where would more the we've I'm upon feel occur that absorb of it but got is hard it's So some really depending

Jason Plagman

amount of you quarter wins seeing from mentioned discussed think since don't QX one a No, the hypothetical think closed. specified understood. then there? clients. was but and pullback What you've in those I since think we've MSP focus MSPs, on you've And aren't Completely I I maybe the the level the

Dan White

a quarter. worth that nice was XX% It had of solid question new of I specific, really team million our good performance. the So which had is then because nice be wins. number are We locum really and all, is for available. clinicians first recruiting a departments $XX allied. geographic and of because terrific appreciate really for of also and to the sourcing It's diversity, nurse our get rest new business very of choices the which is that would helpful that

that the about quite going The pipeline is other into also QX part this robust. is

already July. As couple in you mentioned, we've here a signed

on in last in So year's most I'm ever done. to that confident that again, what total we already on overall QX we'll really was had do which, than more we would've the we're well I referenced, QX and pace done improve

we really a bigger market So MSP feel have adopting manage we're tools than clients. to really we about The spend three thought this years with ago. where our is two going might these good them in or much help way about

things. So I'm really bullish that on of side

Operator

with ahead. We go go Sidoti to Company. Mitra Please and Ramgopal

Mitra Ramgopal

to demand can be attributed in the maybe believe and I OT more reason softness questions, the Two you terms mentioned more hiring. of in perm

also in terms also setting the rates seeing wondering that care what some seeing you're of that what Just comment potential non-acute side some shifting seeing if you're renewal -- to terms the And you're business in opportunities you could side? maybe on of on affecting non-acute of if also?

Susan Salka

it Mitra, happens. I recent material shift the can't sort I'm we've some say in a sure trends. to degree of seen that

course, it's change. as at of continued from setting. estimate more care bit revenue, generating But sort little business we two health and we where and happening are non-acute, acute look step quarters shift but revenue, our when comes last within the generally XX% to look about book of care. it's people at and placing it's placements we Of a towards the we not if we've that roughly seen When some our

which would [Indiscernible] categories those of of other XX% that XX%. surgery, one comes home ambulatory categories The non-acute, schools, dominates clinics, sort all rehab, include from health, those subacute, no

and we'll themselves, And continue with they larger organizations. that those sign it and us contracts larger have sure types to gives So make as with we them. MSPs opportunity of to become relationships contracts

Mitra Ramgopal

maybe of quickly might or the looking et upon? specialties into probably then terms enter Is you're demand in terms to you seeing rates, any be in particular cetera. there driving And expand fill some of of

Ralph Henderson

at large the And that or We aren't we side, the recruiting The for doctors. well. but are your trends fairly covered -- we'd in there us. second space, strong nursing maybe space on just physician the covered the we're pretty be opportunity psych side seeing, of right, on traditional like probably ICU, demand med-surg. to from between largest, an That's that recent We're the acquisitions, them. many first tele,

it be there's of -- So an would opportunity upside there.

we've conversation had health care; are about that specialties at recent we new with physicians like clients acquisition. document through informatics our which improvement now Some specialists, doing

nothing there's like seems it replaced. eye that's lot really get what of big So is a on we physicians to our but there, low-skilled And we out have it. keep seen start

being drag that or And video that our local working sitting things there. are patients things so bit a physicians a little on a of technology few and with in is were like replaced, homes business and

-- from things would eventually and potential away profit focus but away, stay and to higher try on have go we those So we markets. bigger think that things

Operator

The go Sutherland we'll And Company. with to Benchmark Bill

Bill Sutherland

about more and thinking quarter. you I'm what down bit about I in that's OWS, said, little just one Susan, a think, to question, I'm the third

there. having you I do about the to that? And to how think think X% shakeout might to components growth kind you're of speak X% to can

Susan Salka

in although But I'm expect third the digit down a mentioned gross they're second filled corner, the management we're not growing to earlier, very basis is and though under grow the organic at to It's Peak client year-over-year that and turning low felt single-digit RPO, still we of for Health, new replaced so being well Health Physician set looking So it's was some some growth year. Peak as nice if with the even spend in of we're sort we been clients the year-over-year I feeling in a nicely. of the better small. their very quarter. is and jobs. seeing on business, that, attrition slowdown VMS expected up double that be mentioned, notable. half our It's growth. combination perm, we admittedly,

Today tepid relatively acquisition, our that for interim staffing is adding mentioned. So the that's And I'm that businesses of business including care which, -- a little bit excluding course, leadership demand we've sorry, leadership flat, are then indicative health Leaders revenue. environment of -- within

parts. get hopefully quarter. in to sorry, and for I'm smaller important at very of oh, business, helpful not had and double-digit nice So the want to third clients continuing because Again, in and growth quarter doing but moving that's do a the we're And fantastic. those growth strategically kinds so bit look they to They about you -- seeing the our forget Avantas solutions. growth second of continued workforce are appetite

Bill Sutherland

the the interim as what business, might look Anything fact notable and what you at the be be? factors the what might outlook --

Ralph Henderson

in have the business. flat levels Demand pretty been

gone rates and increase have MSP -- inclusion we're up, fill in seeing an agreements. in Our MSP

of kind not and probably and slightly the -- you're in say would up super leadership but I So interim nothing -- anything. business double-digits or

single-digit Just kind of increase. just low probably single --

Susan Salka

them it them leadership just is so perm convert our talent difficult they that how conversions, they more want always few permanent as when into much permanent like and of well. reflective recruit a a role, compliment is it to talent for to A is which

that they our in sort it and can so see them works. talent try sometimes of how bring they And

did So of the in uptick to be ongoing a much see the we people team. clients, went wanting slight driven that's of the them number that by again, and permanent, an very part

Operator

from line the Brooks for Street we I Lake be That have will O'Neil with believe question. one Capital. last time And of

Brooks O'Neil

of are your Or from would seen over perspective permanently. big different be the they side I a nurses behavior softer different Why really trends both what will inducements curious. historically? secular just time? on of your historically and quarters trying the about have maybe other And a tailwinds to your hire the on supply to part demand of at business. equation. and get thought normal something change -- I positive few pretty demand customers is have are you side this of curious, on positive now I'm and I a and love I'm seen the staff Clearly, this why extraordinarily paying guess this very is today? pattern you've

Susan Salka

say would this cycle would I we Brooks, is a see. normal I -- fairly that

and staff been they expensive of they run core nevertheless, they bonuses, and the very a who've those and using, inducements the have some are in that such the Although, that But recruiting, often have see the you because having high tenured while. are high up doing facilities there their for they're perm -- like attrition challenges something have because stepping to you don't different. risk start upsetting of

burnout seen recruitment like working And remains remains this. more nurses The the overtime tuition past. not new not about in so I'd extra hours. be say be we've increase to what higher going particularly more many sure bonuses using or are seen the whether sustainable Whether to hours through and too notion to efforts thing reimbursement and these the people I'm in sustainable. that's Most seen. time work they're tactics worked complain or that you're is than going and start pretty they'll are to a not hire when of -- they're our and not and internal throwing a we're

historical though being frustration they're likely forced we're up pick to their and higher nurses. pushed by highs, translate at that's and And so attrition, if even already into even to extra shifts, or hours

bit they're new So trend to I a but this trying that in press environment. think just a particularly probably one, not that harder little lever is

Operator

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

Susan Salka

look on appreciate next Wonderful. we and you of forward our the today, end everybody much us earnings Well, we updating joining October. very call at to

Operator

Thank you. Ladies you and gentlemen, for Service. this will Thank our TeleConference Executive for AT&T conclude today. teleconference using

You disconnect. may now

AMN Healthcare Services (AMN) 4 Aug 182018 Q2 Earnings call transcript