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US – Cross Country Revenue Falls 2%

November 07 2012

Cross Country Healthcare Inc. (NASD: CCRN) reported third-quarter revenue fell 1.6 percent to $129.1 million from the same period a year ago. The Boca Raton, Fla.-based healthcare staffing firm reported third-quarter revenue in its nurse and allied staffing division fell 4.9 percent on a year-over-year basis to $69.8 million, due primarily to lower staffing volume.

Clinical trial services revenue rose 0.7 percent in the third quarter to $16.9 million, aided by higher placement fees and staffing volume and partially offset by lower average bill rates and one less billable day in the current quarter.

Third-quarter revenue in other human capital management services — which include education, training and retained search — fell 3.9 percent to $9.8 million. The year-over-year decrease was primarily due to lower seminar attendance in the education and training business and a decrease in retainer revenue in the search.

However, physician staffing revenue rose 6.1 percent to $32.7 million in the third quarter due primarily to higher bill rates, as well as the sequential benefit of seasonality.

Third-quarter gross margin was 24.6 percent compared to 27.2 percent in the year-ago quarter.

Cross Country incurred a net loss in the third quarter of $17.6 million compared to net income of $1.8 million in the same quarter of the prior year. The company reported a noncash goodwill and trademark impairment charge of $17.0 million related to its clinical trial services business.

“While revenue was in-line with our expectations, our earnings performance was below expectations as we continue to face unusually severe direct cost pressure — primarily from insurance claims, bill-pay spread compression, and housing costs in our nurse and allied staffing segment — in an operating environment that, until recently, has provided little opportunity to raise bill rates,”  said President and CEO Joseph Boshart.

However, demand for travel nurse staffing has almost doubled since February and the company is talking to hospitals about raising billing rates, Boshart said.

For the fourth quarter, the company forecasts revenue in the $126.0 million to $129.0 million, a year-over-year increase of between 1.0 percent and 3.4 percent.

Cross Country Healthcare Inc. (NASD: CCRN)
 For third quarter ended Sept. 30, 2012, compared with the same period a year ago.
 Revenue: $129.1 million, -1.6 percent
 Net loss: $17.6 million vs. net income of $1.8 million

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