Investors in Cross Country Healthcare, Inc. (CCRN) need to pay close attention to the stock based on moves in the options market lately. That is because the Dec 20, 2024 $2.5 Call had some of the highest implied volatility of all equity options today. What is Implied Volatility? Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ——————— FORM 10-Q ——————— ☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Quarterly Period Ended June 30, 2024 Or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the Transition Period From _________ to _________ ——————— CROSS COUNTRY HEALTHCARE, INC. (Exact name of registrant as specified in its charter) ——————— Delaware 0-33169 13-4066229 (St ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2024 was $340 million, down 10% sequentially and 37% year-over-year, primarily due to declines in travel and local assignments [16][20] - Adjusted EBITDA was $14 million for the quarter, near the high end of guidance, representing an adjusted EBITDA margin of 4.2% [19][25] - Gross profit was $71 million, with a gross margin of 20.8%, up 40 basis points sequentially but down 200 basis points year-over-year due to higher lodging subsidies and insurance costs [16][20] Business Line Data and Key Metrics Changes - Travel Nurse and Allied revenue was $292 million, down 12% sequentially and 41% year-over-year, driven by a decline in billable hours [20][21] - Physician Staffing reported a record $48 million in revenue, up 7% year-over-year and 3% sequentially, with billable days increasing by 2% [22] - Homecare Staffing was up 6% sequentially and 12% year-over-year, supported by recent PACE program wins [21][22] Market Data and Key Metrics Changes - Travel demand has increased by more than 20% since the start of Q2 2024, with open order rates also showing modest improvement [6][8] - The company anticipates third quarter revenue between $305 million and $315 million, reflecting a sequential decline of 7% to 10% [25][24] - The overall effective tax rate was impacted by non-deductible expenses and reserves for uncertain tax positions [20] Company Strategy and Development Direction - The company is focused on leveraging client and candidate-facing technologies to expand market share, particularly in Locums, Homecare, and Education [13][14] - Continued investment in technology, particularly the Intellify platform, is a priority to enhance operational efficiency and client service [10][12] - The company is exploring M&A opportunities to diversify its business and improve its margin profile [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recent trends in travel demand and believes the market is nearing an inflection point [15] - The company is adjusting its cost structure proactively to align with market demand while preserving shareholder value [10][17] - Management noted that hospitals are becoming comfortable with their staffing levels, which may lead to market share growth rather than overall market expansion [56][58] Other Important Information - The company has reduced its U.S. headcount by more than 20% over the last 18 months, partly due to operational expansions in India [10][17] - The company repurchased nearly 1 million shares in Q2 2024, totaling 5 million shares repurchased since August 2022 [14][24] - Cash flow from operations was $82 million in Q2 2024, with days sales outstanding improving to 56 days [23] Q&A Session Summary Question: Can you provide more insight into the volume outlook? - Management noted a steady increase in demand over the last couple of months, with a broad spectrum of specialties seeing growth [27][28] Question: What is the general consensus among clients regarding demand? - Clients are comfortable with their current staffing levels, and there is a recognition of the ongoing supply and demand imbalance in the market [38][40] Question: How do you view the competitive landscape? - The market remains highly competitive, with smaller companies facing challenges due to constrained margins [54][56] Question: What are the expectations for the fourth quarter? - Management anticipates that any winter orders will be incremental and not factored into current projections [62]

Core Insights - Cross Country Healthcare (CCRN) reported a revenue of $339.77 million for the quarter ended June 2024, reflecting a year-over-year decline of 37.2% and an EPS of $0.10 compared to $0.69 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $334.33 million by 1.63%, while the EPS fell short of the consensus estimate of $0.14 by 28.57% [1] Revenue and Earnings Performance - The company experienced a significant decline in revenue from nurse and allied staffing, reporting $291.45 million, which is a 41.2% decrease year-over-year, but above the average estimate of $284.91 million [6] - Physician staffing revenue was reported at $48.32 million, slightly above the estimated $48.15 million, marking a 6.6% increase compared to the same quarter last year [5] Staffing Metrics - Nurse and allied staffing FTEs were reported at 8,415, surpassing the average estimate of 8,093 [3] - Physician staffing days filled reached 24,252, exceeding the average estimate of 18,924 [3] - Revenue per day filled for physician staffing was $1,992, higher than the average estimate of $1,894 [3] - Average revenue per FTE per day for nurse and allied staffing was $377, slightly below the average estimate of $387.50 [4] Stock Performance - Over the past month, shares of Cross Country have returned 32.2%, contrasting with the Zacks S&P 500 composite's decline of 0.4% [6] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [6]

Cross Country Healthcare (CCRN) came out with quarterly earnings of $0.10 per share, missing the Zacks Consensus Estimate of $0.14 per share. This compares to earnings of $0.69 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -28.57%. A quarter ago, it was expected that this provider of health care staffing and workforce management services would post earnings of $0.17 per share when it actually produced earnings of $0.19, del ...

Financial Performance Overview [Second Quarter 2024 Financial Highlights](index=1&type=section&id=Second%20Quarter%202024%20Financial%20Highlights) Cross Country Healthcare reported a challenging Q2 2024, with consolidated revenue declining 37% to **$339.8 million**, leading to a net loss and significantly reduced Adjusted EBITDA Q2 2024 Financial Performance | Metric | Q2 2024 | YoY Change | QoQ Change | | :--- | :--- | :--- | :--- | | Revenue | $339.8 M | (37)% | (10)% | | Gross Profit Margin | 20.8% | (200) bps | 40 bps | | Net (Loss) Income | ($16.1 M) | (175)% | (696)% | | Diluted EPS | ($0.47) | ($1.07) | ($0.55) | | Adjusted EBITDA | $14.2 M | (68)% | (7)% | | Adjusted EBITDA Margin | 4.2% | (400) bps | 20 bps | | Adjusted EPS | $0.10 | ($0.59) | ($0.09) | | Cash Flows from Operations | $82.4 M | (31)% | 1,271% | - CEO John A. Martins noted the results were in line with expectations in a challenging environment for nurse and allied staffing, expressing cautious optimism about nearing an inflection point due to a rise in demand for services[3](index=3&type=chunk) - Key operational achievements in Q2 2024 include sequential and year-over-year revenue growth in Physician Staffing and Homecare Staffing, strong operating cash flow of **$82.4 million** driven by robust collections, and a **7-day year-over-year and 18-day sequential decrease in Days Sales Outstanding (DSO)**[3](index=3&type=chunk) [Six-Month 2024 Financial Highlights](index=2&type=section&id=Six-Month%202024%20Financial%20Highlights) For the first six months of 2024, consolidated revenue decreased 38% to **$718.9 million**, resulting in a net loss of **$13.4 million** and a 69% decline in Adjusted EBITDA Six-Month Financial Performance | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | $718.9 M | $1,163.4 M | (38)% | | Gross Profit Margin | 20.6% | 22.6% | (200) bps | | Net (Loss) Income | ($13.4 M) | $50.8 M | (126)% | | Diluted EPS | ($0.39) | $1.41 | ($1.80) | | Adjusted EBITDA | $29.5 M | $96.6 M | (69)% | | Adjusted EPS | $0.29 | $1.53 | ($1.24) | Business Segment Performance [Nurse and Allied Staffing](index=2&type=section&id=Nurse%20and%20Allied%20Staffing) The Nurse and Allied Staffing segment faced significant headwinds in Q2 2024, with revenue declining 41% year-over-year to **$291.5 million** due to reduced FTEs and average revenue per FTE per day Nurse and Allied Staffing Performance | Metric | Q2 2024 | Q2 2023 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $291.5 M | $495.4 M | $332.2 M | | Contribution Income | $5.8 M | $56.5 M | $27.2 M | | Average FTEs | 8,415 | 11,385 | 9,124 | | Revenue per FTE per day | $377 | $474 | $397 | [Physician Staffing](index=2&type=section&id=Physician%20Staffing) The Physician Staffing segment demonstrated strong Q2 2024 performance, with revenue increasing 7% year-over-year to **$48.3 million**, driven by growth in total days filled and higher revenue per day Physician Staffing Performance | Metric | Q2 2024 | Q2 2023 | Q1 2024 | | :--- | :--- | :--- | :--- | | Revenue | $48.3 M | $45.3 M | $47.0 M | | Contribution Income | $4.0 M | $3.5 M | $3.1 M | | Total Days Filled | 24,252 | 23,826 | 23,785 | | Revenue per Day Filled | $1,992 | $1,902 | $1,976 | Financial Position and Cash Flow [Balance Sheet and Capital Allocation](index=2&type=section&id=Balance%20Sheet%20and%20Capital%20Allocation) As of June 30, 2024, the company maintained a robust balance sheet with **$69.6 million** in cash and no outstanding debt, while continuing its share repurchase program - As of June 30, 2024, the company had **$69.6 million** in cash and cash equivalents and no debt outstanding[8](index=8&type=chunk) - Borrowing availability under the ABL credit facility was **$152.9 million**, net of letters of credit[8](index=8&type=chunk) - In Q2 2024, the company repurchased approximately **980,000 shares** of common stock for **$14.9 million**, at an average price of **$15.23 per share**, with **$56.0 million** remaining available for future repurchases[7](index=7&type=chunk) [Cash Flow Highlights](index=2&type=section&id=Cash%20Flow%20Highlights) Net cash provided by operating activities was strong at **$82.4 million** for Q2 2024, marking a substantial sequential improvement due to robust collections and an 18-day sequential DSO improvement Cash Flow Summary | Cash Flow Metric | Q2 2024 | Q2 2023 | Q1 2024 | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | $82.4 M | $119.2 M | $6.0 M | - The company experienced an **18-day sequential improvement in days' sales outstanding (DSO)**, returning to a more historic level of below 60 days[7](index=7&type=chunk) Outlook and Other Information [Third Quarter 2024 Outlook](index=3&type=section&id=Third%20Quarter%202024%20Outlook) For Q3 2024, management anticipates revenue between **$305 million and $315 million**, with Adjusted EBITDA projected between **$10.0 million and $13.0 million**, indicating continued declines Q3 2024 Guidance | Metric | Q3 2024 Guidance Range | Year-over-Year Change | Sequential Change | | :--- | :--- | :--- | :--- | | Revenue | $305 M - $315 M | (31)% - (29)% | (10)% - (7)% | | Adjusted EBITDA | $10.0 M - $13.0 M | (63)% - (52)% | (29)% - (8)% | | Adjusted EPS | $0.08 - $0.12 | ($0.31) - ($0.27) | ($0.02) - $0.02 | [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) Future results are subject to various risks and uncertainties, including macroeconomic conditions, demand for healthcare services, personnel retention, competition, and government regulation - Future results are subject to risks including the macroeconomic environment, inflation, interest rates, demand for healthcare services, and the ability to attract and retain qualified healthcare professionals[18](index=18&type=chunk) - Other risk factors mentioned include cybersecurity risks, data privacy laws, the use of artificial intelligence, customer ability to pay, and successful implementation of acquisition strategies[18](index=18&type=chunk)[20](index=20&type=chunk) Detailed Financial Statements [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) The Consolidated Statement of Operations for Q2 2024 shows revenue of **$339.8 million** and a net loss of **$16.1 million**, primarily driven by a **$18.9 million** credit loss expense Consolidated Statements of Operations (Thousands) | (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenue from services | $339,771 | $540,695 | | Total operating expenses | $358,977 | $505,506 | | (Loss) income from operations | ($19,206) | $35,189 | | Net (loss) income | ($16,050) | $21,345 | | Diluted (loss) income per share | ($0.47) | $0.60 | [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2024, total assets were **$602.9 million**, down from year-end 2023 due to decreased accounts receivable, with total liabilities at **$163.8 million** Consolidated Balance Sheets (Thousands) | (In thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $69,601 | $17,094 | | Accounts receivable, net | $242,333 | $372,352 | | Total current assets | $337,758 | $415,153 | | Total assets | $602,883 | $679,317 | | Total current liabilities | $110,115 | $148,587 | | Total liabilities | $163,821 | $205,924 | | Total stockholders' equity | $439,062 | $473,393 | [Summary Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Summary%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2024, the company generated **$88.4 million** in cash from operating activities, resulting in a net increase in cash of **$52.5 million** for the period Summary Condensed Consolidated Statements of Cash Flows (Thousands) | (In thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $88,412 | $166,113 | | Net cash used in investing activities | ($5,059) | ($7,492) | | Net cash used in financing activities | ($30,846) | ($161,552) | | Change in cash and cash equivalents | $52,507 | ($2,931) | [Reconciliation of Non-GAAP Financial Measures](index=7&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) For Q2 2024, the GAAP net loss of **$16.1 million** was reconciled to an Adjusted EBITDA of **$14.2 million** by adjusting for items such as legal losses, D&A, and restructuring costs - For Q2 2024, Adjusted EBITDA of **$14.2 million** was derived from a Net Loss of **($16.1 million)** by adding back items including interest, taxes, D&A, restructuring costs, and legal/other losses[24](index=24&type=chunk) - For Q2 2024, Adjusted EPS of **$0.10** was derived from a GAAP Diluted EPS of **($0.47)** by adjusting for the per-share impact of restructuring costs, legal losses, and other items, net of tax[24](index=24&type=chunk)

Market Trends - Investors are currently focused on the technology sector, particularly those involved in artificial intelligence, but there is a growing sentiment that better opportunities are emerging in other sectors, indicating a potential market rotation [1] - The Federal Reserve is expected to cut interest rates by September 2024, with a probability exceeding 90%, influenced by rising unemployment trends [2] Employment and Healthcare Sector - The healthcare sector added 48,600 jobs in the past month, contributing to a total of 206,000 jobs added across the economy, which represents 23.5% of total employment [3] - Cross Country Healthcare is highlighted as a stock to watch due to its alignment with the positive employment trends in the healthcare sector [3][11] Stock Analysis and Valuation - Barrington Research values Cross Country Healthcare stock at $21 per share, suggesting a 26.5% upside from its current price, which is only 62% of its 52-week high [4] - Cross Country Healthcare is projected to have a 39.73% earnings growth over the next 12 months, supporting a higher valuation [3][13] Small-Cap Stocks and Interest Rates - Small-cap stocks are expected to benefit significantly from lower interest rates, as reduced interest expenses will enhance earnings per share (EPS) [5] - Denny's balance sheet shows over 90% debt, indicating that lower interest rates will positively impact its future earnings potential, with analysts forecasting up to 11.5% EPS growth in the next year [7] Analyst Ratings and Institutional Investment - Denny's has seen an influx of institutional capital, raising its ownership rate to 85.1%, reflecting strong confidence from Wall Street [15] - ZipRecruiter has a current "Hold" rating among analysts, but its price target is set at $12.42, indicating a potential upside of 36.8% [16][25] Future Outlook - The consensus price target for ZipRecruiter is $12.4 per share, suggesting a net upside of 40.1% as employment prospects improve with potential Fed rate cuts [25] - Analysts believe that the same trends benefiting Cross Country Healthcare will also support ZipRecruiter, as both companies are positioned to gain from a recovery in employment [23][26]

The accompanying condensed consolidated financial statements include the accounts of Cross Country Healthcare, Inc. and its direct and indirect wholly-owned subsidiaries (collectively, the Company). In the opinion of management, all adjustments necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. All such adjustments consisted of all normal recurring items, including the elimination of all intercompany transactions and balances. These unaudited ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2024 was $379 million, down 8% sequentially and 39% year-over-year, primarily due to declines in travel and local assignments [92] - Gross profit for the quarter was $77 million, representing a gross margin of 20.4%, down 150 basis points sequentially and 200 basis points year-over-year [42] - Adjusted EBITDA for the quarter was $15 million, with an adjusted EBITDA margin of 4% [71] Business Line Data and Key Metrics Changes - Nurse and Allied reported revenue of $332 million, down 10% sequentially and 43% year-over-year [50] - Travel Nurse and Allied revenue was down 11% sequentially and 48% year-over-year, with billable hours down 9% sequentially [50] - Physician Staffing revenue was $47 million, up 16% year-over-year and flat sequentially, driven by higher billable days and revenue per day [73] Market Data and Key Metrics Changes - The local business experienced a revenue decline of 36% year-over-year and 19% sequentially, primarily due to fewer billable hours [50] - The home care business was up mid-single digits both sequentially and year-over-year, indicating growth potential [87] - Demand for locum tenens is expected to grow as hospitals seek more flexible staffing solutions [6] Company Strategy and Development Direction - The company is focused on targeted investments in technology and businesses to enhance competitive positioning and operational excellence [89] - The Intellify platform is seen as a critical component of the company's value proposition, with strong interest in the market [89] - The company aims to close several accretive acquisitions to diversify its platform and improve margin profiles [90] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand leveling off, although it is too early to confirm a trend [5] - The company anticipates a further sequential decline in revenue for Q2 in the mid-teens due to continued softness in travel demand [50] - Management highlighted the importance of maintaining capacity to capitalize on market rebounds [66] Other Important Information - The company has reduced its U.S. headcount by over 20% since the beginning of the year, reflecting efforts to align costs with market conditions [66] - The company ended Q1 with $5 million in cash and no outstanding debt, positioning it well for future investments [96] - The company was recently recognized as one of Newsweek's Greatest Workplaces for Diversity in 2024, reflecting its strong workplace culture [68] Q&A Session Summary Question: What are the demand trends for the first four months of the year? - Management noted that demand has remained soft and has not yet rebounded, with opportunities in programs that have been won still ramping up [77] Question: How is the locum space performing? - Management expressed bullishness on the locum space, citing the need for physicians as a key component for hospital systems to drive revenue [79] Question: What is the outlook for the second quarter? - The company is guiding for revenue between $330 million and $340 million, representing a sequential decline of 10% to 13% [74] Question: How is the company managing its cost structure? - The company has proactively managed costs, resulting in a significant reduction in headcount and leveraging operations in India for cost savings [66] Question: What is the status of the Intellify platform? - Management confirmed that the Intellify platform has a robust pipeline and is expected to contribute to stronger results in the second half of 2024 [30]

For the quarter ended March 2024, Cross Country Healthcare (CCRN) reported revenue of $379.17 million, down 39.1% over the same period last year. EPS came in at $0.19, compared to $0.84 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $373.73 million, representing a surprise of +1.46%. The company delivered an EPS surprise of +11.77%, with the consensus EPS estimate being $0.17.While investors closely watch year-over-year changes in headline numbers -- revenue and ear ...