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View All NewsCross Country pro forma revenue up 7%; travel nurse staffing leads growth
Cross Country Healthcare Inc. (NASD: CCRN) revenue surged 74.9 percent in the third quarter to $188.9 million thanks, in part, to two acquisitions. The company acquired MSN in July for $48 million, and acquired On Assignment Inc.'s (NYSE: ASGN) allied healthcare staffing business in December. Treating the acquisitions on a pro forma basis — as if the acquired business had been owned in the third quarter of last year — revenue rose 7 percent.
Nurse and allied staffing led growth at the Boca Raton, Fla.-based healthcare staffing firm. Revenue in this segment rose 12 percent on a pro forma basis to $147.5 million in the third quarter (up 124.9 percent on a non pro forma basis). Looking at just travel nurse staffing, pro forma revenue was up 22 percent.
Physician staffing revenue fell 3 percent and Cross Country’s “other human capital management services” segment posted flat revenue. The last segment includes retained search and education and training business lines.
Net loss attributable to the company was $7.6 million. In the third quarter, Cross Country posted a $7.3 million non-cash change in the fair value of convertible note derivative liability and $2.4 million of acquisition and integration costs.
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“Our strong results this quarter reflect the excellent progress we have made driving revenue growth and integrating our recent acquisition of MSN. I am particularly pleased with the pro forma year-over-year growth in all three service lines of nurse and allied, led by travel nursing, which was up 22 percent,” said President and CEO William Grubbs. “We expect pro forma year-over-year consolidated revenue growth of 8 to 11 percent and improved profitability in the fourth quarter led by increasing demand for our nurse and allied services, which accelerated throughout the third quarter.”
Revenue
| Q3 2014 ($000s) | Q3 2013 ($000s) | % growth | |
| Revenue | $188,944 | $108,048 | 74.9% |
Revenue by segment
| Q3 2014 (000s) | Q3 2013 (000s) | % growth | |
| Nurse and allied staffing | $147,518 | $65,580 | 124.9% |
| Physician staffing | $32,286 | $33,353 | -3.2% |
| Other human capital management services | $9,140 | $9,115 | 0.3% |
Gross margin
| Q3 2014 | Q3 2013 | |
| Gross margin | 25.0% | 26.1% |
Net income
| Q3 2014 (000s) | Q3 2013 (000s) | % growth | |
| Net loss/income attributable to Cross Country | -$7,602 | $914 | nm |
Guidance
Cross Country anticipates fourth-quarter revenue of between $187 million to $192 million, a year-over-year increase of between 71 percent and 76 percent. The company expects gross margin to range from 25.7 percent to 26.2 percent in the fourth quarter.
Share price and market cap
Shares in Cross Country fell 1.98 percent in early afternoon trading to $9.40, and the company had a market cap of approximately $293.69 million, according to Yahoo!