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Medical Staffing Network revenue falls 34%

March 26 2010

Fourth-quarter revenue fell 33.5% at Medical Staffing Network Holdings Inc. (OTCBB: MNSW.PK) to $75.7 million. The Boca Raton FL-based healthcare staffing firm and vendor management system operator, which reported earlier this week that it may consider seeking bankruptcy protection, also said its 10-K filing includes a going concern note.

Medical Staffing Network's fourth-quarter per diem revenue fell 29.2% to $55.9 million from $79.0 million in the fourth quarter of 2008.

Fourth-quarter revenue in its travel healthcare business fell 52.4% year-over-year to $9.8 million, and allied healthcare revenue fell 28.6% to $10.0 million.

"Despite the restructuring issues that our company is currently facing, we are continuing to operate with a 'business as usual' attitude, providing high quality service to our clients and field associates," Chairman and CEO Robert Adamson said in a statement. "We are also working hard to continue to build on several recent VMS wins."

Fourth-quarter gross margin improved to 26.4% from 25.6% in the year-ago quarter.

Medical Staffing Network posted a net loss of $31.2 million in the fourth quarter compared with a net loss of $67.5 million in the same period last year. The company recorded a goodwill impairment charge of $27.7 million in the fourth quarter of 2009, and a goodwill impairment charge of $66.9 million in the fourth quarter of 2008.

The company reported full-year 2009 revenue of $340.9 million, down 36.6% from 2008 revenue of $537.8 million.

2009 gross margin rose to 26.3% from 24.9% in 2008.

Medical Staffing Network posted a 2009 net loss of $51.2 million compared with a net loss of $116.9 million in 2008. The company reported a goodwill impairment charge of $43.0 million in 2009 and a goodwill impairment charge of $126.7 million in 2008.

Medical Staffing Network said in a filing with the U.S. Securities and Exchange Commission earlier this week that it was in discussions with lenders over a default, and that a forbearance agreement had expired on Feb. 1. "The company believes that based on currently projected cash inflows generated from operations, it is possible that the company may be unable to pay future scheduled interest and principal payments due to its senior lenders as such obligations become due," according to the filing.

The company's lenders have a lien on most of its assets and could sell those assets under the terms of the credit agreements, and the company could file for Chapter 11 bankruptcy, or Chapter 7 bankruptcy, if lenders take such actions, the filing said.

Medical Staffing Network Holdings ranked No. 4 on Staffing Industry Analysts' 2009 list of largest healthcare staffing firms.

Medical Staffing Network Holdings Inc. (OTCBB: MSNW.PK)
For the fourth quarter ended Dec. 27, 2009, compared with the same period in the previous year.
Revenue: $75.7 million, -33.5%
Net loss: $31.2 million vs. net loss of $67.5 million

For full-year 2009 compared with the previous year.
Revenue: $340.9 million, -36.6%
Net loss: $51.2 million vs. net loss of $116.9 million

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