AMN - Earnings call transcript Q3 2018 | AMN Healthcare Services, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the AMN Healthcare Third Quarter 2018 Earnings Call. At this time, all telephone participants are in a listen only mode. Later we will conduct a question-and-answer session. Instructions will be given at that time [Operator Instructions].

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

Randy Reece

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

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

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

Susan Salka

strategy. progressive earnings complex labor to us very significant decade AMN optimization. third well short-term many quarter, goals, for over workforce met In for this flexibility growth and Halloween Thank also struggling to In organizations. with you happy the Randy. so everyone, call. evolution groundwork long-term very while and last financial has healthcare are healthcare AMN's positioned and our our hiring, organizations welcome important market, diversification tight and much, our the A

most year for of of more within of we system trends To need family partner. their to capital seen deployment. have impact creation healthcare. this and the larger the The fantastic further last year, One increases consolidation end, a three the sophisticated meaningful in strategic health our new and through workforce businesses we the strategic enabling added earlier that diversifying service offerings AMN growth enhancing is

without are For the business. spots across near are many there also not our term, bright but we the challenges,

today. as do We will and be you And provide with will our usual, best we a sharing balanced to some these of review. transparent

now turn let's to outlook. So, and results our current

the Third delivery was at quarter XX.X% X% of revenue be XX.X% EBITDA client of was revenue. grew relationships million, strategic strategy. continues margin $XXX Gross to of year-over-year. $XX or adjusted our million and Growing our consolidated forefront

As and MSPs. have an service this year, example, added existing we XX lines at new

be determine last terrific has renewal and implementation formal process. a have in partner to recognized with doing of best be thorough contract MSP process this their clients very expansions. the of which for Kaiser we clinical honor serving client, new a would through third whom five nine Kaiser through as Our quarter for the is nine the for MSP MSP organization in example AMN's went our had are more next been partner clients six largest MSP delivering the going and Permanente team during new the implementation wins of position the live the leading and RFP years. Permanente, new fantastic to A years. continues job

This as service new strategic into will lines. that has partner. AMN excited that selected We additional to also are you very award share MSP with been expand

work Permanente, to to highly patient with Kaiser labor We having meet partnership force continuing to develop and of we excellence skilled care. ways strategic innovative and forward a the their very proud with team deliver built and diverse of their to are to look goal

back going Now, to the quarter.

X% average premium for Revenues flat nurse rate higher mix largest was travel down Our Nurse staffing million, our assignments. posted Allied was of and segment year-over-year. $XXX bill to lower Volume business which while year-over-year. revenue due a grew the was rate of

and As nurse expected, headwinds up in the total we mix in than environment XX% year-over-year. more has both the some rate has weeks, the business. year, premium improved demand recent travel noted the growth Earlier In with stabilized. affecting new orders

shining we Allied lower travel to X% quarter, nurse a volumes fourth year-over-year partly bill star X% with and the up and revenue continued to bookings As double X% offset booking trends up, was have are the Orders in rate. supporting staffing picked pricing. stable growing overall are range. in year-over-year by expect volume grow X% to year-over-year growth on X% X% strong digits

segment, which quarter, improved allied the For X% X% third million was of largest and revenue nurse about the been Positive hospitalists, was to volume is segment to the pricing growth has for Demand lower fourth one offset of tenens our decline. not year-over-year. In we expect quarter year-over-year. revenue X% for enough declining. $XXX locum of a specialty

most is healthy. other specialties in demand However,

platform is revenue that moved in the a locum the and of to decline after new Our primarily challenges result second emerge disruption we technology quarter.

enhancements we XXXX. and growth than has been to expected, changes make in more process to regain transition this system Although, continue disruptive

and also gained important new growth. sales We be to drive traction will NFP of have in Most new invest which resources to on-boarding future in locum continued contracts. additional winning

to quarter, XX% fourth expected tenens be to is the down For year-over-year. XX% revenue locum

Third including Leadership interim our organically. of revenue $XXX acquisition X% solutions, other April growth our quarter up these about growing and search placement which divisions, businesses workforce XX%, grew permanent as and digits X%. include is benefit and solutions was leadership anticipated returned Revenues of with segment which up XX% to this our for this placement, single segment. revenue XX% with growth in permanent physician million. of organic year-over-year Year-over-year year-over-year. the make mid group Within was growth

through had Health consecutive quarter in third cycle the quarter; and Our of produced mid $XX Peak growth; digit its in April, a in multiple particularly temporary survived double month us experience from healthy integration revenue who their Marcy quarter, joined leader. recovering also million division crash managing of third MedPartners' light MedPartners, and the and a co-founder, Steve had are to husband loss plane injuries. their solid her unexpected demand last revenue Wilham and continued activities in of

they We very that to are report pleased fast recovery. a both are making

strong have way. team third the solutions down other to revenue up also where they leaders We at year-over-year and include impressive are in MedPartners, and Other fortunate was have VMS a stepped in very business our a great quarter. workforce

expected other to X% segment an nearly quarter up is and revenue year-over-year approximately workforce up solutions XX% to the be As we look forward, fourth X% on basis, for overall. organic

team entire our dedication Lastly, give a I and to want our healthcare clients communities. inspiring for thank work outstanding big our their to professionals our to AMN and

opportunity the to initiative a last going have And of members this drive visited country our The I ability offices. more and positive I or forward. I respond of any majority listen team challenge have in heart. a team of as to members to many incredible our impact, with have am months, confidence chat even couple chance make and our with the great of Our across to team so proud

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

Brian Scott

from basis of above points expectations Susan at million $XXX Thank last and third also Gross Company's up good just XX of last range. and line and higher midpoint guidance the of points. XX.X%, The guidance everyone. you, basis XX quarter the higher in margin quarter was by with end the for than was afternoon our at our quarter year

quarter Our margin a business basis April to began as permanent XX.X% for were acquisitions XX% disruption starting that The consolidated reserves shifts recognizing last expenses in in in SG&A margin. our with million, $XX physician was was were the labor two XX about gross sequential the margin basis, quarter, reminder our permanent last of of shift. increase increase. legal certain million And expenses the lower placement quarter. of compared points XX.X% revenue the increase settlements. and placement gross recent the last year-over-year historically $XXX the SG&A large representing a prior due carried cost that basis result margin, representing totaled and mainly revenue, increase accretive year about primarily XX in event points the physician claim year-over-year a of quarter, including SG&A to On or in a cost

and almost increase the having year below average consistent the entirely gross due prior margin also down lower volume increase basis Third a bill an event year higher to The quarter. rate. XXX quarter was the partly hours points of nurse $XXX margin from The last and allied and prior primarily up year. was X% segment a of gross revenue prior allied prior than EBITDA X% Year-over-year was of prior result sequential X% labor quarter the labor with offset increased. decrease higher basis sequential was quarter. was XX.X% by Segment worked points X% disruption was This million disruption XX.X%, XX $XX sequentially. by events margin. was million, the and average from and Nurse

year XX.X% was sequential prior revenue X% lower points margin and than on basis. $XXX the and year of Third-quarter locum points sequentially. X% down down XXX basis of tenens million a prior basis was Locum tenens gross in XXX

margin in the expect conversion quarter. Some related the year-over-year, to of tenens issues leverage Locum EBITDA and operating XXX by negative an this system margin was XX.X%, lower some gross lower down revenue. improvement margin the decline was points basis driven we adjusted fourth and on

was third of points sequentially. sequentially. was has million mainly of recent The of adjusted up margin was up the XX.X% the up basis share lower the the $XX $X.XX prior result by driven other Third year EBITDA segment per was was XX points On in $XX of X% adjusted million acquisitions. year-over-year. a of of $X.XX of above margin solutions by earnings consolidated income year-over-year basis, quarter. up points but million the points acquisition the prior quarter MedPartners, We gross lower average. diluted compared variance basis year-over-year, basis workforce of net XXX with The and revenue which primarily was year-over-year X% than quarter third basis reported a and quarter. XX.X% $XXX sequentially, the earnings and Adjusted segment margin in margin XX XX per share was XX% Gross EBITDA $X.XX

ago be million, quarter Interest the XX%, operations million the in $XX $X.X by expected months of end was a which quarter. In quarter million. At last was up million, million. in was cash the compared operations minority year quarter, expenditures the flow investment. quarter. nine $XX provided the million for fair $XX XXXX, XX Cash were consistent quarter first rate from sales was XX% tax included Capital third expense adjustment at XXth, and to and in XX other of income totaled outstanding totaled days gain September is value on XX% Day quarter. $XXX with the Our a days market in equivalents cash and year-over-year. fourth the a to quarter $X.X

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

$X.X expense approximately XXXX XX.X%. of depreciation quarter amortization expense fourth $X.X $X include to turn million; XX.X%. like of an integration we’d quarter of million; Now, to expected million growth And call of organic count X%. and fourth expense The X% shares. million. approximately X% XX.X% $XXX percentage included is to of up year-over-year. to to Adjusted expense SG&A related to of top the estimates and No XXXX margin to EBITDA to of is of share of stock million; is line represents is XX% approximately $X in XX revenue be guidance. fourth about to to be the based On be XX% disruption as expected revenue Gross significant to to projected interest revenue open $X.X let’s expenses Other expenses This for guidance. Company X% down diluted revenue XX% $XXX a labor consolidated basis, questions. million; margin million million; are following; compensation be expected quarter now, expects

Operator

the Instructions] [Operator line question of Silber Jeff is Capital first from Please go BMO Markets. Our ahead. with

Jeff Silber

the more focus the confidence you of in something conversion what that's to is more some you gives tenens fixable, or the it really shift? wanted segment I locum this know is an problems. is of first. on positioning the internal that this But I market think you mentioned

Ralph Henderson

expect of to challenges, our question, operational benefits that we’re we and that had system. very And recently This question, greater I’ll which we is And we it's the background. talked system get handle cases integration some little issues, the provide Ralph. anticipated, as the year. upgrades give think about than just to going to impacted initial part same productivity in that a challenges first out adoption, add in I And employees are May the due QX on XX who to while fact I’ll they primarily used just and those implementation live of in on to the long-term when expected that well which we and a working new that course XX really it of significant business, now disruptions, -- which your to systems. continue been meaningful into of some And next have in although as years, data is system came to resulted the migration that QX. for slowdown new the

they managers, they activities. pulled distracted daily from into and sales issues of activity account problems because get So of solving and and recruiters recruitment get the those

are starting challenges progress a these the well out sign. about on own is feel recently but little related getting shifts. live even had to a growing and on the bit not the and love and of on more healthy, flat internals actually the clinicians back but demand to through the market challenge activity shifts with to demand been kept compared sales assignment to driving with maybe has we scheduled and the market, on levels, we credentialing demand, to our up and process, only pretty market it's it's the Overall, measures So great which we promising pre-go this

I very, good feel the So about industry. very

our to maybe and piece beginning factor we're advice, more, those among of for And on MSP one so business. in. to growth It’s Susan But double-digit customers, kick again us. also this. -- starting see a think hire I strategy our positive directional maybe seeing We're there large locum's mentioned

we new held wouldn’t period, introduce go-live to timeframe. on the want we and back that During hiring to anyone

program We So, future we our revamped began training to hire expected to add growth. new and replace sales resources. support

Jeff Silber

If to that said I switch rate in think said you think travel the -- the your decline the in the could was decline Susan premium remarks stabilizing. over side, nurse I prepared and you I

back premium rates? side charging I or demand were premium you terms easier of or words. your any hospitals just that from Is are supply nurses have think coming having those time the you the don’t rate, to so Meaning, finding the side? pushing in pay those Thanks.

Susan Salka

because goes back is into And a coming I that bit and that gap began we the then think the demand bit even of stabilized a it saw, tight there as and gap supply. really but the more rise a is previously -- to supply still demand supply industry, got smaller. came between down

on you And year floor, than offer it in and that. they us, rate. seeing many lapping it we're regular so instance started and enabled, a the premium the will, cases recommend at and I assignments stabilization And think for that rate rather to if that now a last process cycle and

couldn’t it's But we bit fourth seeing bit at a again into third as up little swing stable. down we're not and mix pretty Now, little going again. to or say a that look quarter, it

quarter much individuals have forward we some the Now, feels the rate. and that quarter why the we on X% are out degree hit we facing a we fourth can see look the which to first like those quarter, bill our called fourth to But average to we're it headwind at, lap, rate is our bookings about still as still stabilization. that booked I pretty and

Jeff Silber

But sequential typically and Is reason seasonality revenue we giving 'XX, increase XQ queue. I any there should and back jump And not from then XQ perspective. you're I'll XQ for one between not guidance yet in know see like 'XX see XXXX. between more you a that just XQ? and the

Brian Scott

we first year that some MSP There's talked gave the more no of into early into that is an be to see as little that outside locums. quarter. the the with of the reason looking think I That’d with confidence why our the normal about there. move seeing We've along gives we on still And reason wouldn’t the thing one nursing implementations color we’re In the demand of is But seasonality. us where wouldn’t expect that Susan we’re improvement we new that, no that. times, improving, there’s caution guess again program.

that So, as up year. sets about we well all us start think of next of the

Susan Salka

And I'll just add to that.

very In had to really that fantastic. stronger basis. forward. certainly addition allied are is performance in executes then looks doing be we we move about a demand the strongly as some and they where to in feeling in bullish time very And that to addition and nursing more But we consistent felt consistent even strong team that,

to and search us beginning one our mid-revenue joined our about strategy. strategy Kelly brought having just businesses you a as this sales synergies total in MSPs really around together leadership And integrate under will created. MedPartners We’re Rakowski, that recently, be excited we’re know, our really cohesive into the We more cycle executive, summer. who

ahead for a turned So smaller XXXX a the there's locums other bright horizon. and lot couple obviously things, of to spots is lot and we get of need there things but good around on

Operator

next Sommer is Tobey SunTrust. from with our And question

Tobey Sommer

business? about to How we in think do had long little relaying Thanks. than to in a get them, targets thought again internal disruption bit we timeline more term are that the the the your locums

Susan Salka

an So us that I end set fundamentally we margin the organization. changed next us we appropriate get has can’t that believe the for nothing make for to you’re target as think am still by sure We XXXX. is to for milestone XX% out referring of us that And EBITDA there. an target XX%

other growing There’re get at to be the we it as that component as are you’re those other a within the as up new up businesses. may only there other get locum in are businesses, be two quarter get things by margins, would be later. tenens and there’re but was keep faster not well that that XXXX, higher which locums too. And since a might of able solutions the that driven track, want pointing workforce system, potentially bit realistic out, could that we we delayed, of to end from our target our we pace. improvement perhaps us faster on within expect be that a but efficiencies there that not if speed gross might by getting we’re Then little could have Some behind. to margins, of And

possible mean but more probable So it doesn’t delayed. a that that it’s not bit little there, get to would it’s it be

Tobey Sommer

With respect you driving that that? to hearing in from demand What increases the you’re is clients travel seeing that nursing. are

Ralph Henderson

growing right. levels was is about and think higher travel as the is XX%, store little allied. last accounts, the same traditional what recent more client our we MSP saw same optimistic just as you’re a are financially in are it us, actually, above Yes demand year. from across well at telling faster digits, more up than is customers said, The new stable board I Well, bit order double our Susan nurse existing both coming time clients. they're than little But a

think through that internal BLS been in of fill that can so the to hasn’t successful time, the that some hoped. their jobs And And efforts. for I had period numbers you demand repress they as also as they trying see

you this was out QX more flu that. to last at pulling look probably look it's what year's open season year. headwind a issue. And flu of like, is that’s going -- we're or that you stronger know orders should began we models, and we if maybe they and seeing really I only this anticipate than would demand, So year, the would would season up the are to But anticipate probably your as

And I've color now. so, guess that's much as got as I right

as optimistic pretty is change in legislatively, is healthcare. coming everybody think well no I big about,

Tobey Sommer

thinking repurchased cash to deployment rough a With a group given like relatively How you flow of the about respect that guess historic to versus seems be average? leverage amount stock. I are and least looks now capital your by XXs my deployment, you decent price. low your at math,

Brian Scott

flow, this we on as blend generate continue have at Your continue point, acquisitions repay are shares correct. to reductions. math But our to we still of share talked We if we capacity we and wouldn’t ability debt strong as and surprised the cash And more be with repurchases to as likely path still the is about very look revolver own our have well. balance at more sheet down of the we we as well. buyers even these road create levels, of

Tobey Sommer

mention you are within And where locums a any meaningful within occupations you exposures demand. allied is curious then my And are last question demand the there of I where seeing was could best falling? couple

Brian Scott

-- one, radiology some the And first respiratory primarily. in to starting see the the therapies. physicians in allied, the increases On all tech in biggest we are are and improvements of

stronger little the a So others, solid occupational speech, pretty board bit and the allied. across are probably than in so

Strengths On are -- physician practices, demand our largely the pretty as in are all emergency There radiology the very dentistry just have now is internal care, and business. headwinds performing the of some and subspecialties, side, so Susan the mentioned, room And is practices. we are And seeing think management for business also demand right there of our creates there what now, good the that’s well. opposite the the is of down, hospitalists which I locum in locums of down medicine which past. in also, about is advanced movement less actually maybe some well. just all talked is primary we strength one

they'd the ones. So, main be

Operator

A.J. Please Crédit with of Rice line the from question next ahead. Our go Suisse.

A.J. Rice

gets renewed, you them? guys that Susan there guess, I -- know give question forward an ongoing is And Could the in get of margins the congratulations contract have a on you community. you know any some you is there First -- has obviously some contract. if then maybe up you're like some on are going think alluded there new a to I out well, think the expansion pursuing might there when it, guess, big new to contract? sometimes I contract something that. concern terms deal opportunities, investment when I often like get renewal, been the And extended, you the important there from were Kaiser business flush I pricing longer-term of under on renewal, some an with that getting the -- that areas impact a of side. about impacts the that that's

Ralph Henderson

handle if I’ll is overall Susan I’ll I Ralph, thing Dan that. they’ll and very to for where is or want be net probably we add. to that profitability. anything This our expect start The add a positive is that

You’re opportunities, nursing right, there’re working both regions physicians, the locums expansion some that well the not we and of yet as weren’t servicing disciplines that parts side, had with, allied physicians and we organization. been on as those

of as of much months those take away, up get and some them might get implemented running. right to as Now some XX will

all we’re your to up not significant account. those degradation the the question, growth in the terms margin but finished And we So are don't margin opportunities. anticipate quite overall with of in our

have we when that issue and probably a fed. things There some probably to to -- short-term implementation and before if bit wouldn't month I there. costs I sometimes talked a up XX chain to well, in pay supply our anything supply at more account, But we’ve little be initially new this that So might as get related building getting the win that’s a think about all. we plug database MSP

Susan Salka

also greater contract. have their is one placed MSP things, to two add have vendors fantastic opportunity Kaiser our that just will through will our us, affiliate it’s for good for hundreds at but also obviously as it’s clinicians of I

it the about we’re up. excited And opens opportunity so

about drive clinicians can do While area. the hope of us, well we Kaiser with Kaiser this of and to have They’ve made together vendors closely really commitment affiliate for also the industry benefit workforce, the a and more as been our for Kaiser placed and create working of we even a whole. to certainly partner areas in ways in have help much we excited much and bigger, Permanente, for other do Also, did opens helping us and our to today, and can opportunities as fantastic but pushing us clients a then with up group allied as new down more us optimize broader but Permanente we physician a have at also work innovation, we’re for that benefit what again, innovation. innovate

A.J. Rice

a guess particularly year-to-year I this and the guess, headwind and that am year, trying drove other think fourth was volume thing the talked quarter, I what flu severe season flu I facing about thinking hurricane was impacted you’re it’s not that little in last last you through the year. about that this, bit we’re pretty year. to clear some season how

we've that? impacted do But so a like have year it some versus seems as of areas by year, had hurricanes think year, this lost. and a Now, specific how result seen little what that you last about far impacting this you

Susan Salka

minimal, recovery. in wrapped our them to it’s road them and style even impacted. of AMN helped around corporate minimal. our So have we And had to clinicians impact don’t some that usual there’s far get And we the our family But own think any from their arms if is life back there’s, it’s some team to team this year pretty on our members honest. be business. certainly and And been

A.J. Rice

last And be… then would my

Dan White

well, just a our geography We minimal impact think and it year didn’t the pretty had our impact is, I others last same of office because were way impacted. in that

a to as us So, well. nominal it prior was pretty impact

from there. a So comp whole there not lot standpoint, is just a really

A.J. Rice

your question. last of on of of Any figures being and update allied you how by and the those for segments MSPs buckets revenues much know my and fill also what's particular, give that volume the the you driven this and can just rates are and about percent by some then I your nurse sometimes MSPs isolate. happening the versus quarter? that regard, the other on in And statistics

Susan Salka

of revenue. materially, They may general sense, consolidated you our give worth moved just haven’t be a it's But is MSP XX% repeating. about to so not

the keep our Now, quarter added headwind. it bit nursing, total businesses, in denominator, locums, second little running staffing businesses we about Within allied that a were us in bigger XX%. actually and of so gave a mind us and gave

Ralph Henderson

the question, fill rates On the MSPs. think demand across I we've of side And have stable about at level. the that fill rate talked improved

we more we our to consistent nursing And our have now, that’s segments. into business. continue past. capture We business, starting in locums And in business, our than other allied the are internally the see greater penetration with to

executive we then get well. cycle of now partners interim web many added to those as management going to Our and are agreements business our

fill still the So, there we rates upside there but have improved is board. across

Operator

And we Blair William next with ahead. to Please go go McHugh and will Tim Company.

Tim McHugh

I on But it's guess if to I what longer, question aspect of I color just about just think in just you to want taking cohort quarter, I it basically to initial circle is well. tenant. you, understand disruptive, more I and particular wonder going the is you last locum last that could back how provide has talked change surprised responded relative -- through I people of the on, guess, the guess.

you you experience guess what I the is how So as expected? than through play been different

Ralph Henderson

Tim miss start to Ralph, I this -- and the jump ask is if and if anybody, I'll I'll then here in.

design they adoption if There're thought system occurred. And then sessions, Florida XX think talk disruption, just right go-live did to about was from we would days. meetings standard system thousands we training just our get coming get and and had who of off to and significant the in I that maybe that we the anticipate -- development plan pulled of internal into the people man-hours work. run we train, -- to XXX people involved

systems the math our element the was moving the and was on actually in What next So underestimated was operating placement. a important single operating three from think we built of difficulty data to system, the how pretty each and decent anticipated data into successful that. had that I was and

think example. And run and XX to could of would work we that significant hours would because upgrade the takes to a to data, that job the we having in policies when it sub give So specialty in went miss like then like it amounts I not that from system physician there attach in the constantly. another clinician it order things and our But things carried an one specialty new that subspecialty, system recruiter that. to of data to over you compliance

to around do had etc. done, get that placement that So to work we manual meant etc., some

the that bit it handoffs type a a imagine then back So -- client as being migration the issues production that and system, systems. what office compounded back bill were front integration contract not to Those And they as and by did did between sort office into information. office front those little put of issue the new issues work in who bill, smoothly system tells testing. of to data in

that’s the exactly is right same paid so candidate isn’t get the billed either or -- And perfectly. issue, customer doesn't the

I them And to those And gets to way Usually them before to the issue the but customer, -- two the it still manually have so catch they business. or have to compounding, we anticipate we we fix those guess, those clinician things fix not interrupt we their issues. did manually. get

Tim McHugh

your and to you I the us market weakness. this much tell that then much issue specialty of -- locums how the weakness is that Can hospitalist of how And is to big as how and guess of exposure beyond related part the it? that

Ralph Henderson

of you’ve been couple years. The of some their consistently issue has rooms. the over as five, market of hospitalists was seen fastest our rooms is and specialties place, related it emergency been about in emergency Team what’s to outsourced think years our the Envision pretty to three not is and growing top definitely active but of they’ve in -- activities just one -- and and Yes, related happening the converting profitability, I there to the Health, privatization ago

specialties significant did we’ve of seen and that And really slowing those a just so from we amount business down. get our

our I business. others hospitalists that to Our to significant double and that digit talked others customers, and we hospitalists to most declines for also about talk staffing, and -- provide are we talking talk course have of

Tim McHugh

comment as lastly mid workforce the comment I about solutions, then single leadership guess, I about the think guess I Can you because, solutions probably about you the whole, within Avantas. grew I fairly talk didn’t think X% then fees interim up piece, a organically with perm hear any And is And I digits. implication flattish. said

you that… if can talk just So about

Susan Salka

overall Well, flat. was first about on interim. the Yes, revenue

And we Boston a Now fact to very the brand remember, as they’ve strong great region, doing which in out they’re up of for than doing there there, leaders better the team were of we get some in a little good great the added the is slowdown and what. Smith others. job a need brands getting today, that. start to off They and bit summer see String. But the our to is a other across the a a of news But through to time starting at MSPs saw little traction businesses, our on B.E. First we’re pick-up.

they quarter. a had very fact, In fourth to beginning the strong

fundamentally saw markets. I with expect earlier the not businesses think their the little those with themselves, and certainly wrong execution, pickup. anything just don’t again to businesses midyear. or there’s So We slowdown we

about forward. is better then feeling into go fourth in move as we and the doing quarter fantastic. we’re So those And Avantas

because quarter, a quarter fourth they expand clients You’re existing their should well to towards businesses. as and and great right. mentioned had have add great We continuing a them, looking

new they them will some will features, are help new serve better, perhaps our the but help only So, adding decoupled clients not functionality that services. current also to of

are can more of offer an can market in through then get bit a faster, to is longer because we to to bigger and concept they lead things. than to perhaps them a house other that proof get decision want there typically offerings of value be solutions able So set and little just enable ala and that of full to carte

Operator

of go Please Our Marcon is with Baird. next question line the from ahead. Mark R.W.

Mark Marcon

the or the on terms trends a seeing. I both? year-over-year on of basis, could is was little in little Is it? or that are you wondering widespread if a about sequential And you the basis, that talk a bit How order increase. bit

Brian Scott

It but good we think it's is increase, sequential, don’t both well. at as it, gave double-digit the the is year-over-year I

same specialties up jumped The actually the that in stores six more getting take I line than more quarter. so weeks, prior also in and telemetry, we've growing facilities our are is really efficient tough think, PCU the MSP it of in good. ICU, faster others. quite their in good. with this med Those specialty. that's and -- really than driven, to one use seen mentioned number of did is the last ones I surge, is are eight it been It which so the understanding how to

a be probably and bit but little geographically, it. maybe than would well well the the that as in So west, regionally east some and distributed

the more… color that’s or So you for are looking

Susan Salka

as Ralph add mentioned, I'll growth it's work it's through. other But just that seen also we've The things clients. MSP in that -- in on our the is, we Mark it's third companies party

some the And So not market. a these actually and that broader bodes it's are it's It great VMS that increase well orders. a sign for clients, neutral organizations, in our they're also growth. just MSP also other increase the but seeing for shows think that's an vendor market demand, in primarily future we

Mark Marcon

between the the guidance and from that the allied the been that take of of allied from And that's doing with with it lags orders they combined to just when relative still placed are well. Is I nurse, then assigned. has normal rate reconciling in because correct? get reduction premium terms when filled

Ralph Henderson

great got Yes, the as it and things receiving the in getting between two pricing numbers, probably those are not starting to right. feel so and you've -- fourth that The lag an quarter. candidate great order the make

third quarter. Although, stronger year-over-year the than

Brian Scott

of getting look level we you third saw growth volume fourth than quarter. in If the are quarter, it projection is at a higher in the the we

have the more that even I as staffing it in key think and still of talked numbers we've the as got even well us as -- quarter year-over-year. if to confidence still year-over-year these you revenue see and So, you in us confidence drag that that see at a a in live, about of performance through the opportunity base from it gives more quarter, markets. just order new going that the some That’s think good as are growth the of better nursing a it the guidance XXXX in some focusing us with we've quarter consolidated that you allied, but about we starting between fourth first last number talked drag that still And we I levels are look that which overall into level. gives gives flow and we think about we and business about there is impacted in on operations the X% local travel programs

some with we business heading the the strategies it’s a in that started with near term, We’re we’re overall in great But segment. still where really in that place. about have decline business in

Mark Marcon

premium of demand assignments lap with rate to And orders -- the maybe you as When you seeing some any are do back are even or the think premium coming orders or are grows? those assignments. that, rate the regards of we indication for

Susan Salka

No, at it feels pretty consistent point. this

higher year minute might a but last winter last lapping, you were -- that very recall at flu quarter, So also because high rates. the of orders first of we terms orders in premium had flu

it’ll be second really and It’ll quarter think will the that before to drag. be we’ll be think we tighter So second fully quarter the there. as closer lap it. we we’ll get tighter out we of get But

Mark Marcon

to regards are margins locums. terms of quarter? in you with What this then coming And projecting there the

Brian Scott

QX? in -- think I

Mark Marcon

Yes.

Brian Scott

XX% closer range. the We’re to

XX% in lower XX%. quarter, second the We’re little the on up above

to we’ll -- do some that’s still at right So There’s now. XX%. there be it be I we’re something as to work think looking closer what should well but

Mark Marcon

margin, mentioned… you the operating And

Brian Scott

We lower a revenue little It’ll even is of bit down, than improvement QX, slightly SG&A losing little revenue that operating the maybe leverage of little and in drive be being business. adding sales will really margin or But we’re as the probably as resources still that future. in talked more well. investing the near-term, similar still we’re in with with the it a they in more adds

Mark Marcon

caused going trying about issues with are are take migration they you’re are they understanding, of, as in in Has that -- terms or terms all staying And advantage? to data talking mentioned competitors am of at through you, this mean, any I but you issue. client I just

Ralph Henderson

not very ourselves. statistics clinicians or the a seeing watch deflection obviously of We lot of And we're closely clients.

on client side, been through conversions they’ve the think big I themselves. these

shift revenue Probably lost any the is know for instead a the deflection, felt And challenges another competitor maybe us. client where But of department, have gets so nothing don’t ER what the are. we material. that picking up just they actually

Mark Marcon

operational then get to do and of Ralph, think you think we when through terms you’re get in and locums just on perspective like building there? from we’ll going normalized from where an

Ralph Henderson

one I give -- love exact to have that. give would on prediction an I I if it. had would don’t We really one,

that a think I hoped above all get that. had no seeing am that seeing the are in activity of are things we lot prior have be in longer trends. year, that. I and And back QX. one we’re levels to originally we norms But would We as confident of specialties back we positive of

And call to going so I'd now back more to you call, early but give when growth get to maybe in we’re locums. right we’d to able our on next too color be hope by

Mark Marcon

migration issue completely just in the or of being fixed I terms data meant solved?

Ralph Henderson

the didn’t talk This about quite portal a it's features the and team that. the has systems system is credential, has It clinicians that things work, a of basis administrative actually some continue our upload old data a make makes the where upload the operating migration so to bit. systems this can move have. We've It new it like well. systems. from data to to -- changes it and easier really on old regular issues, The other we

you we issue going feel booking as don’t three I like know, migration are an So usually But that the is out. forward. months about

of not credentialing to almost could it it's an impact, in many three cycles be have days XXX a months order in positive cases. on the takes it if because for issue So, today

Mark Marcon

cash And question. be we outflow? about a it. to? nobody Since asked that what's in should the $XX.X think is million reserves, then it? about Does to legal that last referring And How going

Brian Scott

It changes of always it just places our industry be are like in that with on we and of a And unusual. are lot relates having that Brian, I'll though, in particularly will the hour California, line. ensuring adjusting compliant a not we're and claims, pay said waging to keeping pride ultimately practices outflow. one. are take waging And start I'll in cash couple hour with focusing up saying, in is take claims. This -- that a very by

settlements related to are these So, hour waging claims.

confident these are we physicians, our -- all XXXX as feeling feel the a back to about we Going choice and the way tough choice, as settle claims we made beyond. to much move and

can the we on focus So business.

Mark Marcon

forward SG&A follow Brian. Does in of that Just adjustments? going that, or at to a impact as up all terms

Brian Scott

adjusted the we reserves had amount. the settlement to No,

Mark Marcon

as meant it I future practices. relates to

Brian Scott

related to practices don’t change any this. We No.

doesn’t claims to and sure But more -- would making we always these that are SG&A. really go It's through any that decided We we are affect and change are practices settle. forward go filed as again, it compliant.

Operator

Our from go with the will of Plagman be line next Jefferies. ahead. Please question Jason

Jason Plagman

on the of out U.S. question first segment. So

you we'll VMS you some seen start see thinking do expect as in So some be should the revenue see of the how that lap to growth that we given about where your you've will that -- head year? impacted we acceleration headed you XXXX, into softness this in Or XXXX?

Susan Salka

least start just bit start at in short October, some volume fact October, and saw is issue are utilization decline, clients one underlying up of a we the in actually Certainly, will within in would VMS the terms the seen lap was in So, turnaround we decline. the already expect answer had yes. businesses. we And that we was to of the the that changes seeing our We to year some the and utilization VMSs. volumes that of previously in positive in

bit back a the in that as nursing to travel well. goes go So hand-in-hand. little commentary They

and positive a we we that’s there. So to improvement should continue see think sign

more there more have Medefis, It's place. a XX%. think even wise going are the being enhancements within on pretty because technology enhancements. those We able been market competitive of new really and above us will really really much particular, lot been changes that of, features roadmap matter a quarter client shift of in not every wise exciting better had in pass, make we're a the things add some And in have and through good good to on clients, many shift And in there, launched. I were retention, we new much news

job forward; come Avantas doing mighty, see So doing we to should of very that cycle, as us. there; flat; once we small perms turning actually And see mid-revenue bit interim, business. mentioned little while for they should and nice are a nicely; I RPO, a well; but drag as going is is expect a that then growth growth doing

Jason Plagman

items we the the presumably that I premium historic Is from growth the And 'XX, in and digit those But from mean type side, mid-single drag lap and then organic you back had question on the you've similar allied business, expect that should range. pricing. QX as framework? nurse into the gets local appropriate

Susan Salka

can we If it that is. that yes, I lap think pricing,

the up potentially quarter anything of matter, market volumes at environment. now in right can looking course X%. suppose Now, I to we're X% nursing But that for to travel fourth change, change the being

very get get a And just we pricing being just have reasonable to there. these So, if to we forward to basis, through headwind, on place a have pricing we be we'd headwinds. go already can didn’t

Jason Plagman

wins me, on fell Can just QX. And and provide on last there those MSP number segment you color new any into? the from one the in the contract different that

Dan White

gross for more really million have that Of than that’s before. excluding direct It pipeline. us spend, would clinical be in came Kaiser and little in in very $XXX which well. we added variable There the important a than remains nice little sales clinical those feel really about about was brings growth our also more have of you team a It's to sign. about really $XX spend. The About which renewal be the contracting million $XXX in we I our spend. of incremental locums, that, to little also growth was on might That QX is million XX% million projected professionals. bit to is than rewards $XX very -- healthcare top I you always Today, give already quarter bit as QX. as in could color wins a of clients. is think it more for talked revenue to total, little good geographic at that about that nice might little a revenue we diversity, and for robust. a expansions our year-to-date a non-clinical with the total more in

$XXX gives in to last put a of than QX. over clinical to QX, lot expansions last it more as me confidence year. well million were total that gross even continue a spends. very in us So And we're and improve going wins again in this year's to especially pace do about on And reminder,

will on improve to that able like looking we are So as we be well.

talked contracting I've as strong well work. here really about looks below pipeline -- the Beyond the

for bullish really feeling am I next well. So, as year

Jason Plagman

And more one color little million impressive at number, I for just abnormally think follow-up, that said Does any bit include you QX. an that awards large that's you -- what $XXX is or is are looking on that? just

Dan White

spread. It's the a Actually, highest million-ish might in in range. one be there nice $XX the

customers. a of it’s nice So really spread

Operator

line Capital last from with of Lake And question our be O'Neil will Brooks Street the Partners.

line Your open. is

Brooks O'Neil

a I was bit. talk hoping little might you

much a about recent hospitals it in you on talked think quarters, quarter. little I I've staffing. this bit you’ve tactics about designed hospital don’t to think temporary And spending I heard limit say

So am changed they little or the curious eased as on their environment tactics, out a bit has if going there? what’s I

Susan Salka

hospitals or new engaging find of any always to healthcare organization retaining and job trying ways think better do I and a clinicians.

And necessarily if you were And way, the separations not back XX% actually see highest record. like think included, also is that It’s We don’t -- data. should the up. August, they some highest by go just the think that and we this for that they year-over-year, quit, you And on clinicians never well were anything. which that I their I So, doing healthcare stopped and be retirement. are working perhaps were over full in up openings record of to existing as BLS things remained such track tactics, more the the up time did think on year. on reflected as the Separations year-over-year, not job sustainable.

the some working are to against of they’re using they’re actually think cases, And retain some that don’t we people. So enough in tactics them.

by your just people only you If that over more cover if you are long. people shift planning working pay to even lasts so more, time usually

seeing a natural course. those play I So we’re some bit of think just of perhaps their things out

Brooks O'Neil

in to personally there’s have I bumps that tailwinds staffing series sense the if players caused and the at just. My was one of healthcare the things other time, is of quarter-to-quarter, strongly thinking sense been And for a you disruptions of have road in continued that same there’s and industry. you industry. blow will the for disappointments, that the I

in think tailwinds episodic between deliver the the hence of the So, having deal balance about intermediate with consider to and quarter-after-quarter? terms industry to do these results of what ongoing it tailwinds might versus ability take ongoing your you and advantage issues the strong those really term how we and for

Susan Salka

also solutions, facilities. create workforce we’ve would things cost that like healthcare done think the specifically, of when macro but system, shared country. you and best their is for our I tailwinds be It's that really because and also but the across business systems must seeing across certainly and so acuity some you’re really practices of population ageing things hearing larger So MSPs, that’s level And first exist, see tailwinds mentioned think create find one seen become the that more really important talk also ways other really at I the their forms like we over other higher for but the Permanente more about best create and as I think economy, center Dan these synergies trends driving why the the brilliantly more us a years has the practices, across about momentum they Kaiser for that to but of the RPO of services systems more of they different consolidation, in been about that. and trend

And also facilities. clients system tailwind both But so definitely of continue spot. testing. also but Avantas because I solutions trends And really sweet leadership innovate other strong those VMS businesses also help workforce that doesn’t on well a positioned are we our mean existing MSP, will we but very more that’s to that and other for And within hitting in we think so potentially that us, level. are our at focus our like those acquire things to won't individual

market, think which also So, for those it's market the trends that should tight if our means us have build don’t underlying good, that not help I we our us within fulfillment we that only important it's within and labor base of client sight clients. labor but then lose good a

question… we've taking I really it them, short-term that’s but profitability the as that locums and that bumps speed grow be have necessarily, great you your the we in call get helps our turned think that as that revenue we that we shape. is disruptions answer would not to away Now, Once I more. hope around, in had, such should consolidated the opportunity

Brooks O'Neil

I the I appreciate really for am color, future. the excited and

Operator

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

Susan Salka

Well, Halloween about this all evening to very on making learn appreciate business. you terrific. progress We more time and our the

positive we a We trends are up and have, more spots, lot very lot of things set that very bright think before, lot as of well of that for I even a recent said us XXXX.

not our and diligently our We and focused I as those you without but indeed think are tell, are teams we working on very making challenges can are we're progress.

positioned about how we year. next we we are So, excited and are are where moving into

of everyone, rest a evening. have So your great

Operator

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

You may now disconnect.

AMN Healthcare Services (AMN) 31 Oct 182018 Q3 Earnings call transcript