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Medical Staffing Network posts loss, margins up

November 07 2007

Medical Staffing Network Holdings Inc. (NYSE: MRN) posted a third-quarter loss of $1.7 million, compared with net income of $1.1 million a year ago. The company said the loss included $3.0 million restructuring charge, a $1.9 million goodwill charge related to the acquisition of InteliStaf Holdings Inc., and a loss of $300,000 on early retirement of debt.

However, Medical Staffing Network's third-quarter revenue rose 61.7% to $154.7 million from $95.6 million in the same period last year. Gross margin improved to 23.9% from 22.7%.

Adjusted earnings before interest, taxes, depreciation, and amortization rose 144%, according to the company.

"The significant improvement in our third-quarter results was driven by the contribution of revenues from the recent InteliStaf acquisition coupled with continued organic volume growth and gross margin expansion," said Chairman and CEO Robert Adamson.

Medical Staffing Network acquired InteliStaf Holdings Inc. earlier this year for $92 million in cash. InteliStaf provides per diem, travel nurse, and VMS services. InteliStaf ranked No. 8 on Staffing Industry Analysts' 2006 list of largest healthcare staffing companies, while Medical Staffing Network ranked No. 4.

In addition, Medical Staffing Network announced in September it acquired AMR ProNurse for $11.0 million in cash. AMR provides nurses, allied healthcare, other medical professionals and operates the OneSource VMS program.

Adamson also said there's a blurring of the line between per diem nursing and travel nursing, and the company has been working on contract services for clients using a new hybrid option.

"A growing percentage of our business is neither travel assignments nor single per diem shifts but rather demand for local nurses working periods from a few weeks up to and beyond the traditional 13-week contract period of travel assignments," Adamson said. "We believe that demand for this local contract service will continue to grow as availability of travel nurses remains challenging and clients look for greater continuity from local supplemental nurse providers."

Medical Staffing Network Holdings Inc. (NYSE: MRN)

For the third quarter ended Sept. 30, 2007, compared with the same period in 2006.

Revenue: $154.7 million, +61.7%

Net loss: $1.7 million vs. net income of $1.1 million

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