Healthcare Staffing Report: Aug. 6, 2015

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Q2 financial results: AMN, Cross Country

Second-quarter revenue rose at healthcare staffing providers AMN Healthcare Services Inc. (NYSE: AHS) and Cross Country Healthcare Inc. (NASD: CCRN).

AMN reported revenue rose 39.5% in the second quarter to $350.1 million, including recent acquisitions of Onward Healthcare, Locum Leaders and VMS provider Medefis. Excluding acquisitions, second-quarter revenue rose 24%.

The San Diego-based firm reported revenue rose by 44.7% in its nurse and allied healthcare staffing division to $240.0 million; the increase was 27% excluding acquisitions.

Second-quarter locum tenens revenue at AMN rose 31.1% to $97.4 million; the increase was 19% excluding acquisitions. And physician permanent placement revenue rose 19.0% to $12.7 million.

AMN’s gross margin improved to 31.4% in the second-quarter from 30.8% in the year-ago quarter. Net income rose to $15.9 million from $7.2 million.

“All business segments are executing very strongly amid continued robust market conditions, which drove better than anticipated revenue and profitability growth in the second quarter,” President and CEO Susan Salka said.

At Cross Country, revenue rose 57.0% in the second quarter to $192.6 million, including the acquisition of Medical Staffing Network on June 30, 2014. On a pro forma basis as if the companies had been combined in both quarters, revenue was up 4%.

Second-quarter gross margin at the Boca Raton, Fla.-based firm narrowed to 25.1% from 26.4% in the year-ago quarter. However, Cross Country posted net income of almost $2.6 million, compared to a loss of almost $3.2 million in the second quarter of last year.

Nurse and allied staffing at Cross Country posted an 83.4% jump in revenue to $152.7 million, but the increase was 6% on a pro forma basis.

Second-quarter physician staffing revenue fell 1.4% to $29.8 million. Cross Country’s “other human capital management services” segment saw revenue rise 10.4% to $10.1 million.

Cross Country also posted $1.0 million in restructuring costs in the second quarter.

“We continue to make significant progress improving our financial performance,” President and CEO William Grubbs said. “In addition, we were able to reduce the interest rate on our subordinated term debt and entered into an agreement to sell Cross Country Education, a non-core business. The US Supreme Court’s recent decision regarding the Affordable Care Act was also a favorable development for our industry that should contribute to our continued growth. I remain very optimistic about our performance and the trends in the business.”