On July 31, 2024, Cross Country Healthcare Inc (CCRN, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. Cross Country Healthcare Inc is a provider of total talent management services, including strategic workforce solutions, contingent staffing, permanent placement, and consultative services for healthcare customers. The company operates in two business segments: the nurse and allied staffing segment and the physician staffing segment, with the majority of its revenue generated in the United States.
Performance Overview
Cross Country Healthcare Inc (CCRN, Financial) reported a consolidated revenue of $339.8 million for Q2 2024, a 37% decrease year-over-year and a 10% decline sequentially. This figure exceeded the analyst estimate of $334.76 million. The company posted a net loss attributable to common stockholders of $16.1 million, translating to a diluted loss per share (EPS) of $0.47, which missed the analyst estimate of $0.12 EPS.
Segment Performance
The Nurse and Allied Staffing segment, which constitutes the bulk of the company's revenue, saw a significant decline. Revenue for this segment was $291.5 million, down 41% year-over-year and 12% sequentially. Contribution income for this segment also plummeted to $5.8 million from $56.5 million year-over-year and $27.2 million sequentially.
Conversely, the Physician Staffing segment experienced growth. Revenue increased by 7% year-over-year and 3% sequentially to $48.3 million. Contribution income for this segment rose to $4.0 million from $3.5 million year-over-year and $3.1 million sequentially.
Financial Metrics and Achievements
Despite the challenging environment, Cross Country Healthcare Inc (CCRN, Financial) achieved several financial milestones:
- Gross profit margin stood at 20.8%, down 200 basis points year-over-year but up 40 basis points sequentially.
- Adjusted EBITDA was $14.2 million, representing 4.2% of revenue, compared to $44.4 million (8.2% of revenue) in the prior year and $15.3 million (4.0% of revenue) in the prior quarter.
- Cash flows provided by operations were robust at $82.4 million, primarily driven by strong collections.
- The company repurchased approximately 980,000 shares of common stock for $14.9 million.
Balance Sheet Highlights
As of June 30, 2024, Cross Country Healthcare Inc (CCRN, Financial) maintained a strong balance sheet with $69.6 million in cash and cash equivalents and no debt. The company had $166.7 million in borrowing base availability under its revolving senior secured asset-based credit facility, with $152.9 million of availability net of $13.8 million of letters of credit.
Challenges and Outlook
The company faced significant challenges in its core nurse and allied staffing segment, which impacted overall performance. However, the management remains cautiously optimistic about the future. John A. Martins, President and Chief Executive Officer of Cross Country Healthcare, stated,
“Our second quarter results were in line with expectations, reflecting our ability to execute in a challenging environment for core nurse and allied. Coming into the back half of the year, I am encouraged by a rise in the level of demand for our services and cautiously optimistic that we are nearing an inflection point in our ability to grow the number of professionals on assignment.”
Income Statement Summary
| Metric | Q2 2024 | Q2 2023 | Q1 2024 |
|---|---|---|---|
| Revenue | $339.8 million | $540.7 million | $379.2 million |
| Net (Loss) Income | $(16.1) million | $21.3 million | $2.7 million |
| Diluted EPS | $(0.47) | $0.60 | $0.08 |
| Adjusted EBITDA | $14.2 million | $44.4 million | $15.3 million |
| Adjusted EPS | $0.10 | $0.69 | $0.19 |
Conclusion
Cross Country Healthcare Inc (CCRN, Financial) faced a challenging second quarter with significant declines in revenue and net income. However, the company demonstrated resilience through strong cash flow and strategic share repurchases. As the company navigates through these challenges, the management's cautious optimism and strategic initiatives may pave the way for future growth.
Explore the complete 8-K earnings release (here) from Cross Country Healthcare Inc for further details.
