Cross Country Healthcare Announces Fourth Quarter and Full Year 2021 Financial Results

Rhea-AI Summary

Cross Country Healthcare (Nasdaq: CCRN) reported robust fourth quarter and full-year 2021 results, with revenue reaching $640.7 million, a 197% increase from Q4 2020. For the year, total revenue was $1.68 billion, up 100%. Net income soared to $77.6 million, up from $4.6 million year-over-year. Diluted EPS was $2.07, compared to $0.13. Despite strong growth, gross profit margin declined to 23.0%. The company's outlook for Q1 2022 projects revenues between $740 million and $750 million, representing a 125%-128% year-over-year increase.

Positive

• Fourth quarter revenue increased 197% year-over-year and 71% sequentially.
• Net income attributable to common stockholders rose to $77.6 million, a 1,582% increase year-over-year.
• Diluted EPS reached $2.07, significantly improving from $0.13 in the prior year.
• Adjusted EBITDA margin improved to 12.6% for Q4 2021, compared to 5.3% in the prior year.

Negative

• Gross profit margin decreased by 220 basis points year-over-year to 23.0%.
• Cash flow used in operations was $73.4 million for Q4 2021, indicating high working capital investment.

BOCA RATON, Fla.--(BUSINESS WIRE)-- Cross Country Healthcare, Inc. (the "Company") (Nasdaq: CCRN) today announced financial results for its fourth quarter and full year ended December 31, 2021.

SELECTED FINANCIAL INFORMATION:

Dollars are in thousands, except per share amounts	Q4 2021				Variance Q4 2021 vs Q4 2020				Variance Q4 2021 vs Q3 2021				Full Year 2021				Variance 2021 vs 2020
Revenue	$	640,679				197		%		71		%	$	1,676,652				100		%
Gross profit margin*		23.0		%		(220	)	bps		60		bps		22.4		%		(180	)	bps
Net income attributable to common stockholders	$	77,573				1,582		%		231		%	$	132,002				1,118		%
Diluted EPS	$	2.07			$	1.94			$	1.45			$	3.53			$	3.89
Adjusted EBITDA*	$	80,933				604		%		169		%	$	162,053				346		%
Adjusted EBITDA margin*		12.6		%		730		bps		460		bps		9.7		%		540		bps
Adjusted EPS*	$	1.40			$	1.21			$	0.79			$	3.06			$	2.60
Cash flows from operations	$	(73,365	)			(3,903	)	%		(2,491	)	%	$	(85,618	)			(415	)	%

* Refer to accompanying tables and discussion of non-GAAP (Generally Accepted Accounting Principles) financial measures below.

Business Highlights

• Historic fourth quarter and full year financial performance due to solid execution
• Fourth quarter financial performance exceeded all original guidance ranges
• Year-over-year and sequential volume growth across all lines of business
• Adjusted EBITDA margin of 12.6% for the quarter and 9.7% for the year
• Strong double digit growth from Cross Country Workforce Solutions Group
• Two strategic acquisitions consummated in 2021 for home health and education
• Increased borrowing capacity by $75.0 million during the quarter to fund organic growth

"Over the last three years, we have completely transformed the way Cross Country Healthcare does business and it shows in our historic results. Clients and clinicians alike are increasingly seeing the tremendous value proposition of working with this amazing team, and we are on a solid trajectory as we enter 2022 for continued growth amidst a continued environment of robust demand and elevated rates," said Kevin Clark, Co-Founder and CEO of Cross Country Healthcare. He continued, "As its chairman and with John Martins assuming the CEO role in March, I am confident that we can continue to deliver exceptional performance for quarters to come."

Fourth quarter consolidated revenue was $640.7 million, an increase of 197% year-over-year and 71% sequentially. Consolidated gross profit margin was 23.0%, down 220 basis points year-over-year and up 60 basis points sequentially. Net income attributable to common stockholders was $77.6 million compared to $4.6 million in the prior year and $23.4 million in the prior quarter. Diluted earnings per share (EPS) was $2.07 per share compared to $0.13 per share in the prior year and $0.62 per share in the prior quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $80.9 million or 12.6% of revenue, as compared with $11.5 million or 5.3% of revenue in the prior year, and $30.1 million or 8.0% of revenue in the prior quarter. Adjusted EPS was $1.40 compared to $0.19 in the prior year and $0.61 in the prior quarter.

For the year ended December 31, 2021, consolidated revenue was $1.7 billion, an increase of 100% year-over-year. Consolidated gross profit margin was 22.4%, down 180 basis points year-over-year. Net income attributable to common stockholders was $132.0 million, or 3.53 per diluted share, compared to a net loss of $13.0 million, or $0.36 per diluted share, in the prior year. Adjusted EBITDA was $162.1 million or 9.7% of revenue, as compared with $36.3 million or 4.3% of revenue in the prior year. Adjusted EPS was $3.06 compared to $0.46 in the prior year.

Quarterly Business Segment Highlights

Nurse and Allied Staffing

Revenue was $620.4 million, a 212% increase year-over-year and 74% sequentially. Contribution income was $92.4 million, compared to $22.8 million in the prior year and $40.6 million in the prior quarter. Average field contract personnel on a full-time equivalent (FTE) basis were 11,520 as compared with 5,798 in the prior year and 9,003 in the prior quarter. Revenue per FTE per day was $582 compared to $368 in the prior year and $425 in the prior quarter. The increase in the average number of FTEs was primarily due to headcount growth in travel nurse and allied which grew by more than double over the prior year, as well as additional headcount resulting from the Cross Country Workforce Solutions Group (WSG) acquisition. In the fourth quarter, average bill rates rose as we continued to experience significant demand for our services, due to the continuing impacts from COVID-19, as well as the overall tight labor supply for clinicians and professionals. Throughout the pandemic, we have acted with the utmost integrity, working collaboratively with clients on adjusting bill rates in order to adapt to the rapidly changing market conditions. Ensuring our clients have the continuing supply of clinicians and professionals has remained our top priority, and as a result, for the year ended December 31, 2021, our consolidated gross profit margin decreased 180 basis points year-over-year.

Physician Staffing

Revenue was $20.2 million, an increase of 23% year-over-year and 8% sequentially. Contribution income was $1.4 million, an increase compared to $0.9 million in both the prior year and the prior quarter. Total days filled were 12,739 as compared with 9,911 in the prior year and 12,187 in the prior quarter. Revenue per day filled was $1,588 as compared with $1,658 in the prior year and $1,540 in the prior quarter. The increase in revenue was primarily due to an increase in volume in several specialties. The increase in contribution income was driven by higher revenue, partially offset by higher direct costs.

Cash Flow and Balance Sheet Highlights

Cash flow used in operations was $73.4 million for the quarter and $85.6 million for the full year. The primary driver of the use of cash for both the quarter and the year has been due to the investment in net working capital associated with the historic growth in our business, with accounts receivable increasing $318.4 million since the start of the year. Our DSO or days' sales outstanding was 58 days as of December 31, 2021, flat year-over-year and down 3 days sequentially.

As previously announced in an 8-K filed December 16, 2021, the Company entered into an asset purchase agreement with Selected on December 16, 2021. The purchase price included $3.5 million in cash and $1.5 million in shares of the Company's common stock. The Company also amended its Term Loan Credit Agreement on November 18, 2021, which provided for an incremental term loan in the amount of $75.0 million.

At December 31, 2021, the Company had $1.0 million in cash and cash equivalents and $174.3 million principal balance on its term loan, with $9.2 million of borrowings drawn under its asset-based loan facility (ABL), and $18.2 million of letters of credit outstanding. Availability under the ABL is subject to a borrowing base, which was $150.0 million as of December 31, 2021, with $122.6 million available for borrowing as of December 31, 2021.

Outlook for First Quarter 2022

The guidance below applies only to management’s expectations for the first quarter of 2022.

			Year-over-Year		Sequential
	Q1 2022 Range		Change		Change
Revenue	$740 million - $750 million		125% - 128%		16% - 17%
Gross Profit Margin*	21.5% - 22.0%		(20) bps - 30 bps		(150) bps - (100) bps
Adjusted EBITDA*	$80.0 million - $85.0 million		199% - 218%		(1)% - 5%
Adjusted EPS*	$1.38 - $1.48		$0.80 - $0.90		($0.02) - $0.08

* Refer to discussion of non-GAAP financial measures below.

The above estimates are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future share repurchases.

For the first quarter of 2022, average bill rates are anticipated to remain elevated at or slightly above the fourth quarter. As we progress throughout 2022, we anticipate that rates will likely decline as COVID-19 hospitalizations decline. However, demand remains robust amidst a backdrop of tight supply for clinicians and professionals, which will likely continue throughout much of 2022. Though we do not give full year guidance, we do believe that the company will continue to see volume growth throughout 2022, as we continue to invest in both added capacity and our technologies. For the coming year, we anticipate expanding our IT projects, more than doubling the level of investments from 2021.

See accompanying non-GAAP financial measures and tables below.

INVITATION TO CONFERENCE CALL

The Company will hold its quarterly conference call on Wednesday, February 23, 2022, at 5:00 P.M. Eastern Time to discuss its fourth quarter and full year 2021 financial results. This call will be webcast live and can be accessed at the Company's website at ir.crosscountryhealthcare.com or by dialing 888-566-1290 from anywhere in the U.S. or by dialing 773-799-3776 from non-U.S. locations - Passcode: Cross Country. A replay of the webcast will be available from February 23rd through March 9th at the Company's website and a replay of the conference call will be available by telephone by calling 800-391-9853 from anywhere in the U.S. or 203-369-3269 from non-U.S. locations - Passcode: 2022.

ABOUT CROSS COUNTRY HEALTHCARE

Cross Country Healthcare, Inc. (CCH) is a market leading workforce solutions tech-enabled staffing, recruitment, and advisory firm that has 35 years of industry experience and insight. We solve complex labor-related challenges for customers while providing high-quality outcomes and exceptional patient care. As a multi-year Best of Staffing^® award winner, we are committed to an exceptionally high level of service to both our clients and our homecare, education, and clinical and non-clinical healthcare professionals. Our Company was the first publicly traded staffing firm to obtain The Joint Commission Certification, which we still hold with a Letter of Distinction. In 2021, we were listed as one of the top four staffing and recruiting employers for women by InHerSights and earned Energage's inaugural 2021 Top Workplaces USA award. We were also Certified™ by Great Place to Work^®. We have a longstanding history of investing in diversity, equality, and inclusion as a key component of the organization’s overall corporate social responsibility program which is closely aligned with its core values to create a better future for its people, communities, the planet, and its shareholders.

Copies of this and other news releases as well as additional information about the Company can be obtained online at ir.crosscountryhealthcare.com. Shareholders and prospective investors can also register to automatically receive the Company's press releases, filings with the Securities and Exchange Commission (SEC), and other notices by e-mail.

NON-GAAP FINANCIAL MEASURES

This press release and the accompanying financial statement tables reference non-GAAP financial measures, such as gross profit margin, adjusted EBITDA, and adjusted EPS. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in accordance with U.S. GAAP. Such non-GAAP financial measures are provided for consistency and comparability to prior year results; furthermore, management believes they are useful to investors when evaluating the Company's performance as they exclude certain items that management believes are not indicative of the Company's future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned. Such non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. The financial statement tables that accompany this press release include a reconciliation of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure and a more detailed discussion of each financial measure; as such, the financial statement tables should be read in conjunction with the presentation of these non-GAAP financial measures.

FORWARD LOOKING STATEMENTS

In addition to historical information, this press release contains statements relating to our future results (including certain projections and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act, and are subject to the "safe harbor" created by those sections. Forward-looking statements consist of statements that are predictive in nature, depend upon or refer to future events. Words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", "suggests", "appears", "seeks", "will", "could", and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: the potential impacts of the COVID-19 pandemic on our business, financial condition, and results of operations, our ability to attract and retain qualified nurses, physicians and other healthcare personnel, costs and availability of short-term housing for our travel healthcare professionals, demand for the healthcare services we provide, both nationally and in the regions in which we operate, the functioning of our information systems, the effect of cyber security risks and cyber incidents on our business, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our clients' ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, the effect of potential liabilities, loses, or other exposures in connection with the WSG acquisition, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors set forth in Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, and in our other filings with the SEC. You should consult any further disclosures the Company makes on related subjects in its filings with the SEC.

Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this press release. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors' likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct and/or (iv) our strategy, which is based in part on this analysis, will be successful. The Company undertakes no obligation to update or revise forward-looking statements. All references to "we", "us", "our", or "Cross Country" in this press release mean Cross Country Healthcare, Inc. and its subsidiaries.

Cross Country Healthcare, Inc.
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share data)
	Three Months Ended												Year Ended
	December 31,				December 31,				September 30,				December 31,				December 31,
	2021				2020				2021				2021				2020
Revenue from services	$	640,679			$	215,606			$	374,905			$	1,676,652			$	836,417
Operating expenses:
Direct operating expenses		493,529				161,214				291,111				1,301,653				633,685
Selling, general and administrative expenses		65,774				44,870				52,847				215,292				173,809
Bad debt expense		2,372				652				1,441				4,783				3,035
Depreciation and amortization		2,720				2,199				2,680				9,852				12,671
Acquisition and integration-related costs		83				—				61				1,068				77
Restructuring costs		239				842				318				2,630				6,052
Impairment charges		—				166				—				2,070				16,248
Total operating expenses		564,717				209,943				348,458				1,537,348				845,577
Income (loss) from operations		75,962				5,663				26,447				139,304				(9,160	)
Other expenses (income):
Interest expense		2,817				671				2,182				6,866				2,890
Other (income) expense, net		(154	)			326				(375	)			(770	)			280
Income (loss) before income taxes		73,299				4,666				24,640				133,208				(12,330	)
Income tax (benefit) expense		(4,274	)			(156	)			1,207				1,206				(188	)
Consolidated net income (loss)		77,573				4,822				23,433				132,002				(12,142	)
Less: Net income attributable to noncontrolling interest in subsidiary		—				210				—				—				820
Net income (loss) attributable to common stockholders	$	77,573			$	4,612			$	23,433			$	132,002			$	(12,962	)
Net income (loss) per share attributable to common stockholders - Basic	$	2.10			$	0.13			$	0.63			$	3.60			$	(0.36	)
Net income (loss) per share attributable to common stockholders - Diluted	$	2.07			$	0.13			$	0.62			$	3.53			$	(0.36	)
Weighted average common shares outstanding:
Basic		36,974				36,177				36,963				36,689				36,088
Diluted		37,736				36,778				37,582				37,392				36,088

Cross Country Healthcare, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands)
	Three Months Ended												Year Ended
	December 31,				December 31,				September 30,				December 31,				December 31,
	2021				2020				2021				2021				2020
Adjusted EBITDA:a
Net income (loss) attributable to common stockholders	$	77,573			$	4,612			$	23,433			$	132,002			$	(12,962	)
Interest expense		2,817				671				2,182				6,866				2,890
Income tax (benefit) expenseb		(4,274	)			(156	)			1,207				1,206				(188	)
Depreciation and amortization		2,720				2,199				2,680				9,852				12,671
Acquisition and integration-related costsc		83				—				61				1,068				77
Restructuring costsd		239				842				318				2,630				6,052
Legal settlements and feese		12				600				(1,556	)			(1,141	)			2,998
Impairment chargesf		—				166				—				2,070				16,248
Loss on disposal of fixed assets		159				364				60				219				364
Gain on lease termination		(308	)			(45	)			(10	)			(542	)			(64	)
Other (income) expense, net		(5	)			7				(425	)			(447	)			(20	)
Equity compensation		1,637				1,340				1,771				6,894				5,403
Applicant tracking system costsg		280				690				406				1,376				2,033
Net income attributable to noncontrolling interest in subsidiaryh		—				210				—				—				820
Adjusted EBITDAa	$	80,933			$	11,500			$	30,127			$	162,053			$	36,322
Adjusted EBITDA margina		12.6	%			5.3	%			8.0	%			9.7	%			4.3	%
Adjusted EPS:i
Numerator:
Net income (loss) attributable to common stockholders	$	77,573			$	4,612			$	23,433			$	132,002			$	(12,962	)
Non-GAAP adjustments - pretax:
Acquisition and integration-related costsc		83				—				61				1,068				77
Restructuring costsd		239				842				318				2,630				6,052
Legal settlements and feese		12				600				(1,556	)			(1,141	)			2,998
Impairment charges (excluding rebranding impacts)f		—				166				—				2,070				16,248
Rebranding impairments and accelerated amortizationf		—				—				—				—				3,075
Applicant tracking system costsg		280				690				406				1,376				2,033
Nonrecurring income tax adjustmentsj		(25,188	)			(18	)			—				(23,246	)			295
Tax impact of non-GAAP adjustments		(158	)			(2	)			(1	)			(172	)			(992	)
Adjusted net income attributable to common stockholders - non-GAAP	$	52,841			$	6,890			$	22,661			$	114,587			$	16,824
Denominator:
Weighted average common shares - basic, GAAP		36,974				36,177				36,963				36,689				36,088
Dilutive impact of share-based paymentsk		762				601				619				703				340
Adjusted weighted average common shares - diluted, non-GAAP		37,736				36,778				37,582				37,392				36,428
Reconciliation:
Diluted EPS, GAAP	$	2.07			$	0.13			$	0.62			$	3.53			$	(0.36	)
Non-GAAP adjustments - pretax:
Acquisition and integration-related costsc		—				—				—				0.03				—
Restructuring costsd		—				0.02				0.01				0.06				0.16
Legal settlements and feese		—				0.02				(0.03	)			(0.02	)			0.09
Impairment charges (excluding rebranding impacts)f		—				—				—				0.05				0.45
Rebranding impairments and accelerated amortizationf		—				—				—				—				0.09
Applicant tracking system costsg		—				0.02				0.01				0.03				0.05
Nonrecurring income tax adjustmentsj		(0.67	)			—				—				(0.62	)			0.01
Tax impact of non-GAAP adjustments		—				—				—				—				(0.03	)
Adjusted EPS, non-GAAPi	$	1.40			$	0.19			$	0.61			$	3.06			$	0.46

Cross Country Healthcare, Inc.
Consolidated Balance Sheets
(Unaudited, amounts in thousands)
	December 31,				December 31,
	2021				2020
Assets
Current assets:
Cash and cash equivalents	$	1,036			$	1,600
Accounts receivable, net		493,910				170,003
Prepaid expenses		7,648				5,455
Insurance recovery receivable		5,041				4,698
Other current assets		638				1,355
Total current assets		508,273				183,111
Property and equipment, net		15,833				12,351
Operating lease right-of-use assets		7,488				10,447
Goodwill		119,490				90,924
Trade names, indefinite-lived		5,900				5,900
Other intangible assets, net		42,344				34,831
Non-current deferred tax assets		11,525				—
Other non-current assets		21,956				19,409
Total assets	$	732,809			$	356,973
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses	$	109,753			$	49,877
Accrued employee compensation and benefits		65,580				35,540
Current portion of debt		4,176				2,425
Operating lease liabilities - current		4,090				4,509
Income tax payable		7,307				8
Current portion of earnout liability		7,500				—
Other current liabilities		1,364				1,064
Total current liabilities		199,770				93,423
Long-term debt, less current portion		176,366				53,408
Operating lease liabilities - non-current		10,853				15,234
Non-current deferred tax liabilities		190				6,592
Long-term accrued claims		25,314				25,412
Non-current earnout liability		9,000				—
Other long-term liabilities		13,788				7,995
Total liabilities		435,281				202,064
Commitments and contingencies
Stockholders' equity:
Common stock		4				4
Additional paid-in capital		321,552				310,388
Accumulated other comprehensive loss		(1,293	)			(1,280	)
Accumulated deficit		(22,735	)			(154,737	)
Total Cross Country Healthcare, Inc. stockholders' equity		297,528				154,375
Noncontrolling interest in subsidiary		—				534
Total stockholders' equity		297,528				154,909
Total liabilities and stockholders' equity	$	732,809			$	356,973

Cross Country Healthcare, Inc.
Segment Datal
(Unaudited, amounts in thousands)
	Three Months Ended																					Year-over-Year			Sequential
	December 31,				% of			December 31,				% of			September 30,				% of			% change			% change
	2021				Total			2020				Total			2021				Total			Fav (Unfav)			Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing	$	620,446			97	%		$	199,177			92	%		$	356,139			95	%		211.5	%		74.2	%
Physician Staffing		20,233			3	%			16,429			8	%			18,766			5	%		23.2	%		7.8	%
	$	640,679			100	%		$	215,606			100	%		$	374,905			100	%		197.2	%		70.9	%
Contribution income:m
Nurse and Allied Staffing	$	92,392						$	22,835						$	40,645						304.6	%		127.3	%
Physician Staffing		1,428							942							910						51.6	%		56.9	%
		93,820							23,777							41,555						294.6	%		125.8	%
Corporate overheadn		14,816							14,907							12,049						0.6	%		(23.0	)%
Depreciation and amortization		2,720							2,199							2,680						(23.7	) %		(1.5	)%
Acquisition and integration-related costsc		83							—							61						(100.0	) %		(36.1	)%
Restructuring costsd		239							842							318						71.6	%		24.8	%
Impairment chargesf		—							166							—						100.0	%		—	%
Income from operations	$	75,962						$	5,663						$	26,447						NM			187.2	%
	Year Ended																					Year-over-Year
	December 31,				% of			December 31,				% of										% change
	2021				Total			2020				Total										Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing	$	1,605,781			96	%		$	768,483			92	%									109.0	%
Physician Staffing		70,871			4	%			67,934			8	%									4.3	%
	$	1,676,652			100	%		$	836,417			100	%									100.5	%
Contribution income:m
Nurse and Allied Staffing	$	205,738						$	74,169													177.4	%
Physician Staffing		4,328							3,619													19.6	%
		210,066							77,788													170.0	%
Corporate overheadn		55,142							51,900													(6.2	)%
Depreciation and amortization		9,852							12,671													22.2	%
Acquisition and integration-related costsc		1,068							77													NM
Restructuring costsd		2,630							6,052													56.5	%
Impairment chargesf		2,070							16,248													87.3	%
Income (loss) from operations	$	139,304						$	(9,160	)												NM
NM-Not meaningful.

Cross Country Healthcare, Inc.
Summary Condensed Consolidated Statements of Cash Flows
(Unaudited, amounts in thousands)
	Three Months Ended															Year Ended
	December 31,					December 31,					September 30,					December 31,				December 31,
	2021					2020					2021					2021				2020
Net cash (used in) provided by operating activities	$	(73,365	)			$	1,929				$	(2,831	)			$	(85,618	)		$	27,204
Net cash used in investing activities		(4,686	)				(956	)				(1,888	)				(34,046	)			(4,615	)
Net cash provided by (used in) financing activities		78,226					(2,827	)				(12,569	)				119,094				(22,010	)
Effect of exchange rate changes on cash		19					8					3					6				(11	)
Change in cash and cash equivalents		194					(1,846	)				(17,285	)				(564	)			568
Cash and cash equivalents at beginning of period		842					3,446					18,127					1,600				1,032
Cash and cash equivalents at end of period	$	1,036				$	1,600				$	842				$	1,036			$	1,600

Cross Country Healthcare, Inc.
Other Financial Data
(Unaudited)
	Three Months Ended															Year Ended
	December 31,					December 31,					September 30,					December 31,				December 31,
	2021					2020					2021					2021				2020
Consolidated gross profit margino		23.0	%				25.2	%				22.4	%				22.4	%			24.2	%
Nurse and Allied Staffing statistical data:
FTEsp		11,520					5,798					9,003					8,679				6,037
Average Nurse and Allied Staffing revenue per FTE per dayq	$	582				$	368				$	425				$	503			$	343
Physician Staffing statistical data:
Days filledr		12,739					9,911					12,187					44,169				38,987
Revenue per day filleds	$	1,588				$	1,658				$	1,540				$	1,605			$	1,742

(a)	Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss) attributable to common stockholders before interest expense, income tax expense (benefit), depreciation and amortization, acquisition and integration-related costs, restructuring costs, legal settlements and fees, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on disposal of fixed assets, gain or loss on sale of business, other expense (income), net, equity compensation, applicant tracking system costs, and includes net income attributable to noncontrolling interest in subsidiary. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to net income attributable to common stockholders as an indicator of operating performance. Management uses Adjusted EBITDA for planning purposes and as one performance measure in its incentive programs for certain members of its management team. Adjusted EBITDA, as defined, closely matches the operating measure as defined by the Company's credit facilities. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by the Company's consolidated revenue.
(b)	The release of the majority of the valuation allowance on deferred tax assets as of December 31, 2021 resulted in an income tax benefit of $4.3 million for the three months ended December 31, 2021 and income tax expense of $1.2 million for the year ended December 31, 2021.
(c)	Acquisition and integration-related costs include costs for legal and advisory fees, as well as integration costs, for the WSG acquisition that closed late in the second quarter of 2021, and legal and professional fees for the Selected acquisition that closed late in the fourth quarter of 2021, and valuation adjustments related to the contingent consideration liability for the Mediscan acquisition that were incurred in 2020.
(d)	Restructuring costs are primarily comprised of employee termination costs, lease-related exit costs, and reorganization costs as part of planned cost savings initiatives.
(e)	Legal settlements and fees include legal settlement charges as presented on the consolidated statements of operations as well as legal fees pertaining to non-operational legal matters outside the normal course of operations which are included in selling, general and administrative expenses. For the year ended December 31, 2021, legal settlements and fees resulted in a net benefit of $1.1 million due to a recovery in the third quarter of $1.6 million. For the year ended December 31, 2020, we incurred $3.0 million in legal fees related to an ongoing legal matter outside the normal course of operations.
(f)	Impairment charges for the year ended December 31, 2021 were comprised of $2.0 million related to right-of-use assets and related property in connection with leases that were vacated during the second quarter and $0.1 million related to the write-off of a discontinued software development project. Impairment charges in 2020 of $16.2 million were comprised of $10.7 million primarily related to goodwill and other intangible assets for the former Search business and $5.5 million related to right-of-use assets and related property and equipment in connection with leases that were vacated during the year. Rebranding impairments and accelerated amortization related to finite-lived trade names in connection with the rebranding initiatives.
(g)	Applicant tracking system costs are related to the Company's project to replace its legacy system supporting its travel nurse staffing business. These costs are reported in selling, general and administrative expenses on the consolidated statement of operations and included in corporate overhead in segment data.
(h)	Cross Country Talent Acquisition Group, LLC was controlled by the Company but not wholly owned. The Company recorded the ownership interest of the noncontrolling shareholder as noncontrolling interest in subsidiary. Effective December 31, 2020, the sole professional staffing services agreement held by this joint venture was terminated and, as a result, the Company dissolved Cross Country Talent Acquisition Group, LLC in the third quarter of 2021. The Company subsequently entered into a direct staffing agreement with the hospital system.
(i)	Adjusted EPS, a non-GAAP financial measure, is defined as net income (loss) attributable to common stockholders per diluted share before the diluted EPS impact of acquisition and integration-related costs, restructuring costs, legal settlements and fees, impairment charges, rebranding impairments and accelerated amortization, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on sale of business, applicant tracking system costs, and nonrecurring income tax adjustments. Adjusted EPS should not be considered a measure of financial performance under GAAP. Management presents Adjusted EPS because it believes that Adjusted EPS is a useful supplement to its reported EPS as an indicator of operating performance. Management believes it provides a more useful comparison of the Company's underlying business performance from period to period and is more representative of the future earnings capacity of the Company.
(j)	Non-recurring income tax adjustment for the year ended December 31, 2021 reflects the reversal of the majority of the valuation allowance on deferred tax assets, as well as the establishment of a valuation allowance related to a state rate change as a result of the WSG acquisition.
(k)	Due to the net loss for the year ended December 31, 2020, 340 shares (in thousands) were excluded from diluted weighted average shares.
(l)	Segment data provided is in accordance with the Segment Reporting Topic of the FASB ASC. In the first quarter of 2021, the Company modified its reportable segments and now discloses two reportable segments - Nurse and Allied Staffing and Physician Staffing beginning in the first quarter of 2021. Revenue in the amount of $2.8 million and $10.5 million, and contribution income of $0.6 million and contribution loss of $1.1 million, included in the previously-reported Search segment have been reclassified to Nurse and Allied Staffing for the three months and year ended December 31, 2020, respectively.
(m)	Contribution income is defined as income (loss) from operations before depreciation and amortization, acquisition and integration-related costs, restructuring costs, legal settlement charges, impairment charges, and corporate overhead. Contribution income is a financial measure used by management when assessing segment performance.
(n)	Corporate overhead includes unallocated executive leadership and other centralized corporate functional support costs such as finance, IT, legal, human resources, and marketing, as well as public company expenses and corporate-wide projects (initiatives).
(o)	Gross profit is defined as revenue from services less direct operating expenses. The Company's gross profit excludes allocated depreciation and amortization expense. Gross profit margin is calculated by dividing gross profit by revenue from services.
(p)	FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.
(q)	Average revenue per FTE per day is calculated by dividing the Nurse and Allied Staffing revenue, excluding permanent placement, per FTE by the number of days worked in the respective periods.
(r)	Days filled is calculated by dividing the total hours invoiced during the period, including an estimate for the impact of accrued revenue, by 8 hours.
(s)	Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented.

 

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Cross Country Healthcare, Inc.

William J. Burns, 561-237-2555

Executive Vice President & Chief Financial Officer

wburns@crosscountry.com

Source: Cross Country Healthcare, Inc.

FAQ

What are Cross Country Healthcare's Q4 2021 financial results?

Cross Country Healthcare reported Q4 2021 revenue of $640.7 million, with a net income of $77.6 million.

How did Cross Country Healthcare perform in 2021?

The company achieved $1.68 billion in revenue for the full year 2021, a 100% increase from 2020.

What is the earnings per share for CCRN in Q4 2021?

Diluted EPS for Q4 2021 was $2.07, up from $0.13 in the prior year.

What is Cross Country Healthcare's revenue guidance for Q1 2022?

The company projects Q1 2022 revenue between $740 million and $750 million, representing a 125%-128% year-over-year increase.

How much did Cross Country Healthcare's adjusted EBITDA change in Q4 2021?

Adjusted EBITDA for Q4 2021 was $80.9 million, compared to $11.5 million in Q4 2020.