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Cross Country revenue up, but travel taking hit

March 04 2009

Fourth-quarter revenue at Cross Country Healthcare Inc. (NASD: CCRN) rose 13.3% year-over-year to $205.9 million reflecting its acquisition of Medical Doctro Associates. However, the market for travel nurse and allied health staffing worsened in the last three months, President and CEO Joseph Boshart said in a statement Wednesday. The Boca Raton FL-based healthcare staffing firm posted a fourth-quarter net loss of $161.3 million.

Cross Country's nurse and allied staffing revenue fell 13.8% year-over-year to $123.5 million in the fourth quarter.

"We believe this deterioration has resulted from tighter credit markets, which have increased hospital borrowing costs; dramatically weaker labor markets and economic conditions, which are encouraging staff nurses to work more hours to bolster household income; and relatively weak hospital admission trends," Boshart said. "These factors have combined to produce the weakest demand environment we've seen for this segment since the mid-1990s."

The situation likely won't change in the near term, and Boshart said the company is cutting employee headcount, spending less on advertising and lowering capital expenditures.

Cross Country's clinical trials fourth-quarter revenue fell 4.9% to $23.9 million, and revenue in its other human capital management services segment fell 4.2% to $12.7 million.

The company posted $45.7 million in physician staffing revenue. It gained the physician business in its acquisition of Medical Doctor Associates in September.

Fourth-quarter gross margin for the company rose to 26.4% from 25.7%.

Cross Country posted a fourth-quarter net loss of $161.3 million. The loss includes a before-tax impairment charges of $244.1 million. The charges relate mostly to goodwill impairment from difficult market conditions and low equity market values.

Full-year 2008 revenue rose 2.2% to $734.2 million, and 2008 gross margin improved to 26.2% from 24.3%.

The company posted a net loss of $142.9 million for 2008 compared with net income of $24.6 million in 2007.

Cross Country estimated first-quarter revenue of between $173 million to $176 million — a year-over-year decline of between 1.8% and 3.5%.

Cross Country Healthcare Inc. (NASD: CCRN)
For the fourth quarter ended Dec. 31, 2008, compared with the same period in the previous year.
Revenue: $205.9 million, +13.3%
Net loss: $161.3 million vs. net income of $7.3 million

For the full year ended Dec. 31, 2008, compared with the previous year.
Revenue: $734.2 million, +2.2%
Net loss: $142.9 million vs. net income of $24.6 million

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