Cross Country Q2 revenue rises 5%, all divisions post growth

Second-quarter revenue at Cross Country Healthcare Inc. (NASD: CCRN) rose 4.9% to $209.3 million, within guidance provided with the prior quarter’s earnings report.

Revenue rose in nurse and allied staffing and in physician staffing, primarily due to increases in volume. Revenue in Cross Country’s human capital management services division also increased.

Net income attributable to common shareholders improved to $4.9 million from a net loss of $17.2 million in the prior year. The year-ago quarter’s loss included a loss on early extinguishment of debt, a loss on derivative liability, and impairment charges, totaling $22.4 million after taxes.

However, consolidated gross profit margin slipped in the second quarter to 27.0% from 27.5% in the year-ago quarter.

Cross Country acquired substantially all of the assets of Advantage RN on July 1 for a total purchase price of $88 million, using available cash and borrowings of approximately $67.5 million under the existing credit facility, including a $40 million incremental term loan. On Aug. 1, the company renewed and increased the size of its credit agreement to $215 million, including a $100 million term loan and a $115 million revolving credit facility.

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“We had a solid second quarter highlighted by year-over-year revenue growth in all three reporting segments,” said President and CEO William Grubbs. “With revenue in line with expectations, I was pleased that we exceeded guidance for gross margin, adjusted EBITDA and adjusted EPS. Our new MSP implementations are progressing and we expect an increase in demand from these programs through the third and fourth quarters. Coupled with the delivery capabilities from the Advantage RN acquisition, we expect to see stronger revenue growth as we enter 2018.”