AMN Healthcare Announces First Quarter 2021 Results

Rhea-AI Summary

AMN Healthcare Services (NYSE: AMN) reported record financial results for Q1 2021, with revenue of $885.9 million, a 47% increase from Q1 2020. Net income surged 443% to $70.4 million, translating to diluted EPS of $1.47. Key growth drivers included nurse staffing and language services, with operating cash flow of $39 million. The company completed the acquisition of Synzi Holdings to enhance its virtual care offerings. Looking ahead, AMN forecasts Q2 2021 revenue between $810 - $830 million, indicating strong growth momentum.

Positive

• Record Q1 2021 revenue of $885.9 million, up 47% YoY.
• Net income increased to $70.4 million, a 443% rise YoY.
• Acquisition of Synzi enhances virtual care capabilities.
• Operating cash flow of $39 million supports financial health.

Negative

• Gross margin decreased to 32.6%, down 90 basis points YoY.

AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in total talent solutions for healthcare organizations across the United States, today announced its first quarter 2021 financial results. Financial highlights are as follows:

Dollars in millions, except per share amounts.

	Q1 2021	% Change Q1 2020
Revenue	$885.9	47%
Gross profit	$288.9	43%
Net income	$70.4	443%
GAAP diluted EPS	$1.47	440%
Adjusted diluted EPS*	$1.70	116%
Adjusted EBITDA*	$140.9	90%

^{* See “Non-GAAP Measures” below for a discussion of our use of non-GAAP items and the table entitled “Non-GAAP Reconciliation Tables” for a reconciliation of non-GAAP items.}

Business Highlights

• First quarter revenue and earnings were the highest in company history.
• All reportable segments had higher demand and placement trends over Q4 2020 as overall healthcare utilization rises across acute and non-acute settings.
• Revenue of $886 million was 47% above prior year, with organic growth of 44%. Growth was driven most by nurse and allied staffing along with our language services and vendor management systems businesses.
• Operating cash flow in the quarter was $39 million, and our leverage ratio at quarter end was 2.2 to 1.
• In early April, we completed the acquisition of Synzi Holdings Inc., a virtual care communication platform that expands our solutions for the home health and outpatient care markets.

“We are in extraordinary times for our country and by far the most dynamic in the history of AMN. We want to express our profound gratitude for the way our healthcare professionals and team members are responding when our clients and communities need them most,” said Susan R. Salka, Chief Executive Officer of AMN Healthcare. “Our work in the healthcare community is vital as we are supporting many facets of healthcare delivery during this time of transition. While the pandemic has moved to a later stage, increasing non-COVID patient volumes, high job vacancy rates and heightened burnout are creating significant need. AMN is uniquely positioned to bring technology solutions and talent to help our clients efficiently address these workforce challenges.

“The impact of severe shortages of talent within healthcare will have lasting effects,” Ms. Salka said. “To ensure AMN is well-prepared to continue evolving and delivering on our promise of total talent solutions, we are increasing investments in our team and technologies, in particular our digital capabilities. At the same time, we are making greater investments in building talent solutions for all reaches of the care continuum. Last month, we were thrilled to close the acquisition of Synzi, adding technology-enabled virtual care solutions for the outpatient and home health markets, where more healthcare will be delivered in the future.”

First Quarter 2021 Results

Consolidated revenue for the quarter was $886 million, a 47% increase over prior year and 40% higher than prior quarter. On an organic basis, consolidated revenue was up 44% over prior year. Consolidated revenue in the quarter included approximately $25 million from vaccination-related projects. Net income was $70 million (7.9% of revenue), or $1.47 per diluted share, compared with $13 million (2.2% of revenue), or $0.27 per diluted share, in the same quarter last year. Adjusted diluted EPS in the first quarter was $1.70.

Revenue for the Nurse and Allied Solutions segment was $657 million up 55% year over year and 47% sequentially. Travel nurse staffing revenue grew 74% year over year. Allied division revenue was higher by 17% year over year. Revenue cycle solutions revenue was down more than 30% from prior year though improved by 8% sequentially.

The Physician and Leadership Solutions segment reported revenue of $141 million, up 2% year over year and 27% sequentially. Locum tenens revenue was $86 million, up 9% year over year and 27% sequentially. Year-over-year growth in locums was driven by stronger revenue per day filled, while sequential growth also saw an 18% increase in days filled. Interim leadership revenue was lower by 3% year over year while growing 34% sequentially. Our physician and leadership search businesses had sequential revenue growth of 12% though being 16% lower compared with a year ago.

Technology and Workforce Solutions segment revenue was $89 million for an increase of 120% year over year (up 84% organic), driven by our February 2020 acquisition of Stratus Video, now known as AMN Language Services. Our language services business achieved $41 million revenue in the quarter with growth in new clients and same-client volumes. Our vendor management systems business rode the healthcare staffing market's strength, growing revenue 91% year over year.

Consolidated gross margin was 32.6%, 90 basis points lower year over year and down 30 basis points sequentially. Year over year, the lower gross margin was driven in large part by margin compression in the Nurse and Allied segment and a higher mix of revenue from this segment. The sequential variance stemmed primarily from the segment mix shift driven by Nurse and Allied growth.

Consolidated SG&A expenses were $161 million, or 18.2% of revenue, compared with $146 million, or 24.3% of revenue, in the same quarter last year. SG&A was $155 million, or 24.6% of revenue, in the previous quarter. The year-over-year increase in SG&A costs was driven by higher employee and related expenses. SG&A margin declined due to operating leverage on increased revenue.

Income from operations was $104 million with an operating margin of 11.8%, compared with $36 million and 5.9%, respectively, in the same quarter last year. Adjusted EBITDA was $141 million, a year-over-year increase of 90%. Adjusted EBITDA margin was 15.9%, representing an increase of 360 basis points year over year.

At March 31, 2021, cash and cash equivalents totaled $78 million. Cash flow from operations was $39 million for the quarter, and capital expenditures were $12 million. The Company ended the quarter with total debt outstanding of $905 million and a leverage ratio of 2.2 to 1 as defined under our credit agreement.

Acquisition of Synzi

In April 2021, we completed the acquisition of Synzi, a full-service virtual care management company, for $42.5 million in cash. Synzi provides virtual care and remote patient monitoring platforms in the home health and outpatient markets. These solutions enable organizations to conduct virtual visits and use secure messaging, text, and email for clinician-to-patient and clinician-to-clinician communications.

“I am excited to welcome the talented Synzi team to the AMN family,” Ms. Salka said. “We believe the combination of the Synzi platform and AMN services will give us a strong offering for post-acute care. Health systems' continuum of care is expanding, and we will use the AMN-Synzi combination to help our clients expand their scope of care.”

Second Quarter 2021 Outlook

Metric	Guidance*
Consolidated revenue	$810 - $830 million
Gross margin	32.4 - 32.8%
SG&A as percentage of revenue	18.6 - 19.0%
Operating margin	10.5 - 11.0%
Adjusted EBITDA margin	14.4 - 14.9%

^{*Note: Guidance percentage metrics are approximate. For a reconciliation of adjusted EBITDA margin, see the table entitled “Reconciliation of Guidance Operating Margin to Guidance Adjusted EBITDA Margin” below.}

Revenue in the second quarter of 2021 is expected to be 33-36% higher than prior year. Nurse and Allied Solutions segment revenue is expected to grow 34-37% year over year. Within this segment, we expect travel nurse staffing revenue to be up 30-33% from prior year. Allied revenue is expected to grow by about 38-40% year over year. In the Physician and Leadership Solutions segment, revenue is expected to be up approximately 20% from prior year. Technology and Workforce Solutions segment revenue is expected to increase by 60-65% compared with the year-ago period. Revenue guidance includes approximately $30 million from vaccination-related projects.

Second quarter estimates for certain other financial items include depreciation of $8 million, non-cash amortization expense of $16 million, stock-based compensation expense of $6 million, interest expense of $10 million, integration and other expenses of $3 million, and an adjusted tax rate of 28%.

Conference Call on May 6, 2021

AMN Healthcare Services, Inc. (NYSE: AMN), the leader and innovator in total talent solutions for healthcare, will host a conference call to discuss its first quarter 2021 financial results and outlook on Thursday, May 6, 2021 at 5:00 p.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare’s website at http://ir.amnhealthcare.com. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (833) 968-2219 in the U.S. or +1 778-560-2894 internationally and using passcode 5248833. Following the conclusion of the call, a replay of the webcast will be available at the Company’s website. Alternatively, a telephonic replay of the call will be available starting at 8:00 p.m. Eastern Time on May 6, 2021 and can be accessed until 11:59 p.m. Eastern Time on May 20, 2021 by calling (800) 585-8367 in the U.S. or +1 416-621-4642 internationally, with access code 5248833.

About AMN Healthcare

AMN Healthcare is the leader and innovator in total talent solutions for healthcare organizations across the nation. The Company provides access to the most comprehensive network of quality healthcare professionals through its innovative recruitment strategies and breadth of career opportunities. With insights and expertise, AMN Healthcare helps providers optimize their workforce to successfully reduce complexity, increase efficiency and improve patient outcomes. AMN total talent solutions include managed services programs, clinical and interim healthcare leaders, temporary staffing, executive search solutions, vendor management systems, recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, credentialing, and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools and many other healthcare settings. AMN Healthcare is committed to fostering and maintaining a diverse team that reflects the communities we serve. Our commitment to the inclusion of many different backgrounds, experiences and perspectives enables our innovation and leadership in the healthcare services industry.

The Company’s common stock is listed on the New York Stock Exchange under the symbol “AMN.” For more information about AMN Healthcare, visit www.amnhealthcare.com, where the Company posts news releases, investor presentations, webcasts, SEC filings and other material information. The Company also utilizes email alerts and Really Simple Syndication (“RSS”) as routine channels to supplement distribution of this information. To register for email alerts and RSS, visit http://ir.amnhealthcare.com.

Non-GAAP Measures

This earnings release and the non-GAAP reconciliation tables included with the earnings release contain certain non-GAAP financial information, which the Company provides as additional information, and not as an alternative, to the Company’s condensed consolidated financial statements presented in accordance with GAAP. These non-GAAP financial measures include (1) adjusted EBITDA, (2) adjusted EBITDA margin, (3) adjusted net income and (4) adjusted diluted EPS. The Company provides such non-GAAP financial measures because management believes that they are useful to both management and investors as a supplement, and not as a substitute, when evaluating the Company’s operating performance. Additionally, management believes that adjusted EBITDA, adjusted EBITDA margin, adjusted net income and adjusted diluted EPS serve as industry-wide financial measures. The Company uses adjusted EBITDA for making financial decisions, allocating resources and for determining certain incentive compensation objectives. The non-GAAP measures in this release are not in accordance with, or an alternative to, GAAP measures and may be different from non-GAAP measures, or may be calculated differently than other similarly titled non-GAAP measures, reported by other companies. They should not be used in isolation to evaluate the Company’s performance. A reconciliation of non-GAAP measures identified in this release, along with further detail about the use an

FAQ

What were AMN Healthcare's Q1 2021 financial results?

AMN Healthcare reported Q1 2021 revenue of $885.9 million, a 47% increase from Q1 2020, and net income of $70.4 million, up 443% from the previous year.

How did AMN's earnings per share change in Q1 2021?

AMN's GAAP diluted EPS for Q1 2021 was $1.47, representing a 440% increase compared to the same quarter in 2020.

What is the guidance for AMN's Q2 2021 revenue?

AMN expects Q2 2021 revenue to be between $810 million and $830 million, reflecting continued growth.

What impact did the Synzi acquisition have on AMN?

The acquisition of Synzi enhances AMN's virtual care communication platforms, expanding its services in home health and outpatient care markets.