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Cross Country Healthcare Inc. (NASD: CCRN) reported the loss of a large managed service provider contract in September contributed to lower-than-expected first-quarter revenue in the company’s nurse and allied staffing segment. However, the company cited a new, large MSP deal from a national healthcare system that will represent triple the revenue of the lost account.
“The start to 2012 has been disappointing, considering the momentum we had generated in our nurse and allied staffing business in the first 10 months of 2011,” President and CEO Joseph Boshart said.
“I believe the slowing of momentum in this segment reflected a greater focus by hospitals on temporary nurse staffing usage during year-end budget discussions that, along with seasonality and a weak flu season, caused demand for contract nurses to decrease by more than one-third from mid-November through mid-February,” Boshart said. “Further exacerbating this was the loss of a large managed service provider account in September of 2011, just prior to the year-end contraction in demand.”
Still, the Boca Raton, Fla.-based healthcare staffing firm reported first-quarter revenue in its nurse and allied staffing division rose 4.0 percent on a year-over-year basis to $69.5 million. The company noted higher volume and average bill rates along with an additional billable day helped boost revenue.
In other segments:
- Physician staffing revenue edged down 0.6 percent to $29.3 million in the first quarter. The company cited a change in mix toward a higher staffing volume of lower bill-rate specialties.
- Clinical trial services revenue at the company rose 7.9 percent in the first quarter to $16.9 million.
- First-quarter revenue in “other human capital management services” rose 8.7 percent to $11.0 million. The other human capital management services segment includes education, training and retained search.
Total first-quarter revenue at Cross Country rose 3.8 percent year over year to $126.7 million.
First-quarter gross margin narrowed to 26.5 percent from 27.0 percent in the year-ago quarter.
The staffing firm posted a first-quarter net loss of $584,000 compared to net income of $207,000 million in the year-ago quarter.
Cross Country forecast second-quarter revenue of between $128 million and $130 million, a year-over-year increase of between 1.6 percent and 3.1 percent.
The company reported demand for contract nurses rose by more than 30 percent since mid-February through the first week of May. Cross Country also expects the new, large MSP account and several smaller MSP deals to begin ramping up in the third quarter and be fully in place by the fourth quarter.
In addition, Cross Country said it is providing nurse and allied staffing services during electronic medical records implementations, and the company is continuing to pursue that business.
Cross Country Healthcare Inc. (NASD: CCRN)
For the first quarter ended March 31, 2012, compared with the same period a year ago.
Revenue: $126.7 million, +3.8 percent
Net loss: $584,000 vs. net income of $207,000