Cross Country Healthcare, Inc. (NASDAQ:CCRN) Q4 2021 Earnings Conference Call February 23, 2022 5:00 PM ET Company Participants William Burns - CFO Kevin Clark - CEO John Martins - Group President, Delivery Buffy White - Group President, Workforce Solutions Conference Call Participants A.J. Rice - Credit Suisse Tobey Sommer - Truist Securities Courtney Fondufe - Bank of America Brian Tanquilut - Jefferies Operator Good afternoon, everyone. Welcome to the Cross Country Healthcare's Earnings Conference Call f ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q3 2021 was $374.9 million, representing a 93% increase year-over-year and a 13% sequential increase [26] - Adjusted EBITDA exceeded $30 million for Q3 2021, with year-to-date adjusted EBITDA surpassing $80 million [7] - The company expects Q4 2021 consolidated revenue to be between $580 million and $590 million, indicating a sequential growth of 55% to 57% [22][32] Business Line Data and Key Metrics Changes - Revenue for the Nurse and Allied segment was $356.1 million, up 101% year-over-year and 13% sequentially, driven primarily by travel nurse and allied businesses [26] - The local business experienced an 11% increase in revenue year-over-year, while the education business grew 77% over the prior year despite a seasonal decline [17][28] - The recent acquisition of Workforce Solutions Group contributed significantly, with pro forma revenue up more than 75% [19] Market Data and Key Metrics Changes - The number of unique facilities requesting travel clinicians has doubled since Q1, and total travel orders have nearly tripled [12] - Demand for healthcare professionals remains at historic highs, with tens of thousands of openings across various specialties [11] - The company anticipates that average bill rates for travel business will increase by 25% to 30% in Q4 2021 [22] Company Strategy and Development Direction - The company is focused on digital transformation and operational effectiveness to respond to high demand across various specialties [9] - Cross Country Healthcare aims to build long-lasting relationships with clients and maintain ethical practices in its operations [13] - The company is well-positioned to capitalize on emerging trends in the gig economy, particularly among millennial healthcare professionals [15] Management's Comments on Operating Environment and Future Outlook - Management noted that while COVID-19 continues to impact demand, there is also a growing need for non-COVID assignments due to clinician burnout and retirement [11] - The company expects to face headwinds from declining rates in 2022 but anticipates continued volume growth across its portfolio [23] - Management expressed confidence in the company's strategic plan and its ability to maintain a strong market position moving forward [41] Other Important Information - The company has increased its workforce by nearly 30% in 2021, with over 90% in revenue-producing roles [20] - The gross profit for Q3 2021 was $83.8 million, with a gross margin of 22.4%, reflecting a sequential improvement [29] - The company expects to fully utilize its federal net operating losses nearly two years ahead of projections due to profitability [34] Q&A Session Summary Question: Can you break out the revenue growth this quarter between organic and acquisitions? - The company reported about $5 million of revenue from the recent acquisition in Q2 and a run rate of about $20 million in Q3 [35] Question: How do bill rates and demand trends compare in the home health segment? - The home health segment is experiencing growth but not at the same higher bill rates as the travel business [38] Question: Will 2022 be a top-line growth year? - Management indicated uncertainty regarding bill rates but expects performance in the first half of 2022 to be above Q3 levels [40] Question: How are fill rates trending? - Fill rates are challenging to quantify due to unprecedented job openings, but more clinicians are being placed [53] Question: What is the trend with bill pay spread? - The company has maintained a strong relationship with clients, and as the market normalizes, margins are expected to improve [56]

PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The unaudited statements show significant growth in assets, revenue, and a shift to net income driven by high market demand [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects substantial growth in assets and equity, driven by increased accounts receivable and acquisition-related goodwill Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | **Total Current Assets** | $313,273 | $183,111 | | **Total Assets** | $520,420 | $356,973 | | **Total Current Liabilities** | $144,662 | $93,423 | | **Total Liabilities** | $303,621 | $202,064 | | **Total Stockholders' Equity** | $216,799 | $154,909 | - Accounts receivable, net, increased significantly to **$301.0 million** as of September 30, 2021, from $170.0 million at year-end 2020, reflecting strong business growth[9](index=9&type=chunk) - Goodwill increased to **$113.0 million** from $90.9 million, primarily due to the acquisition of Workforce Solutions Group (WSG)[9](index=9&type=chunk)[49](index=49&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) The company achieved a significant profitability turnaround with a 93% Q3 revenue surge and substantial net income Statement of Operations Summary (in thousands, except per share data) | Metric | Q3 2021 | Q3 2020 | Nine Months 2021 | Nine Months 2020 | | :--- | :--- | :--- | :--- | :--- | | **Revenue from services** | $374,905 | $193,968 | $1,035,973 | $620,811 | | **Income (loss) from operations** | $26,447 | ($381) | $63,342 | ($14,823) | | **Net income (loss) attributable to common shareholders** | $23,433 | ($1,334) | $54,429 | ($17,574) | | **Diluted net income (loss) per share** | $0.62 | ($0.04) | $1.46 | ($0.49) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow turned negative due to a large increase in accounts receivable, while financing activities provided cash from new debt Cash Flow Summary for Nine Months Ended Sep 30 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | **Net cash (used in) provided by operating activities** | ($12,253) | $25,275 | | **Net cash used in investing activities** | ($29,360) | ($3,659) | | **Net cash provided by (used in) financing activities** | $40,869 | ($19,183) | - The significant use of cash in operations was driven by a **$122.9 million increase in accounts receivable**, reflecting strong business growth[20](index=20&type=chunk)[200](index=200&type=chunk) - Financing activities were primarily driven by **$100.0 million in proceeds from a new term loan**, partially offset by net repayments of $49.4 million on the revolving credit facility[20](index=20&type=chunk)[201](index=201&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Key disclosures cover the WSG acquisition, a change in segment reporting, new debt agreements, and the pandemic's impact on demand - The company acquired Workforce Solutions Group, Inc. (WSG) on June 8, 2021, for **$25.0 million in cash and $5.0 million in stock**, with a potential additional earnout of up to $15.0 million[44](index=44&type=chunk)[45](index=45&type=chunk) - In Q1 2021, the company modified its reportable segments into two: **Nurse and Allied Staffing and Physician Staffing**[43](index=43&type=chunk)[110](index=110&type=chunk) - On June 8, 2021, the company entered into a new six-year, **$100.0 million Term Loan Credit Agreement** to fund the WSG acquisition and pay down its ABL facility[71](index=71&type=chunk) - The COVID-19 pandemic, particularly the Delta variant, continued to drive **high demand and elevated bill rates** for the company's healthcare staffing services[28](index=28&type=chunk)[142](index=142&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes strong revenue growth to the Nurse and Allied segment, discusses rising costs, and maintains a positive outlook - **Q3 2021 revenue increased 93% year-over-year to $374.9 million**, driven by strong performance in the Nurse and Allied Staffing segment[137](index=137&type=chunk) - For the first time in company history, revenue for the nine-month period **exceeded $1.0 billion**[137](index=137&type=chunk) - Average bill rates are **expected to rise again in the fourth quarter** due to both COVID-19 and non-COVID-19 related needs, coupled with a tight labor market[138](index=138&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Q3 revenue grew 93.3%, outpacing SG&A growth and indicating improved operating leverage despite higher direct operating costs Comparison of Q3 2021 vs Q3 2020 (in thousands) | Item | Q3 2021 | Q3 2020 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Revenue from services** | $374,905 | $193,968 | $180,937 | 93.3% | | **Direct operating expenses** | $291,111 | $145,965 | $145,146 | 99.4% | | **SG&A expenses** | $52,847 | $40,804 | $12,043 | 29.5% | | **Income (loss) from operations** | $26,447 | ($381) | $26,828 | NM | - Direct operating expenses as a percentage of revenue increased to **77.6% in Q3 2021** from 75.2% in Q3 2020, as compensation costs rose at a higher percentage than bill rates[153](index=153&type=chunk) [Segment Results](index=37&type=section&id=Segment%20Results) The Nurse and Allied segment drove growth with a 100.6% revenue increase, while the Physician Staffing segment also grew Segment Performance - Q3 2021 vs Q3 2020 | Segment / Metric | Q3 2021 | Q3 2020 | % Change | | :--- | :--- | :--- | :--- | | **Nurse and Allied Revenue** | $356.1M | $177.5M | +100.6% | | - FTEs | 9,003 | 5,403 | +66.6% | | - Avg. Revenue per FTE per day | $425 | $353 | +20.4% | | **Physician Staffing Revenue** | $18.8M | $16.5M | +14.1% | | - Days filled | 12,187 | 9,682 | +25.9% | | - Revenue per day filled | $1,540 | $1,699 | -9.4% | - The Nurse and Allied Staffing segment's contribution income margin **improved to 11.4% in Q3 2021** from 10.1% in Q3 2020[179](index=179&type=chunk) [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) The company managed liquidity with a new term loan and ABL facility, despite negative operating cash flow from receivable growth - **Net cash used in operating activities was $12.3 million** for the nine months of 2021, compared to $25.3 million provided in the same 2020 period, primarily due to a **$122.9 million increase in receivables** from strong growth[200](index=200&type=chunk) - The company entered into a new **$100.0 million term loan** on June 8, 2021, and amended its ABL credit facility, increasing its size to **$150.0 million**[202](index=202&type=chunk)[204](index=204&type=chunk) - As of September 30, 2021, the company had **$126.7 million available for borrowing** under its ABL facility[139](index=139&type=chunk)[207](index=207&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is variable interest rate exposure on its debt and the upcoming LIBOR phase-out - The company is exposed to **variable interest rate risk** from its Term Loan Agreement and ABL Credit Agreement[213](index=213&type=chunk) - A **1% change in interest rates** would have fluctuated interest expense by approximately **$0.7 million** for the nine months ended September 30, 2021[214](index=214&type=chunk) - The company notes the risk related to the potential **phase-out of LIBOR** and its impact on its credit agreements[215](index=215&type=chunk) [Item 4. Controls and Procedures](index=43&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are **effective as of September 30, 2021**[217](index=217&type=chunk) - **No changes occurred** during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[218](index=218&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=44&type=section&id=Item%201.%20Legal%20Proceedings) The company faces routine litigation deemed immaterial and secured a $1.6 million reimbursement for prior legal fees - The company is involved in various litigation, claims, and proceedings that arise in the **ordinary course of business**, primarily related to employee matters, professional liability, and tax practices[116](index=116&type=chunk)[221](index=221&type=chunk) - In Q3 2021, the company arranged for a **$1.6 million reimbursement for legal fees** incurred in 2020 and 2021 related to a grand jury subpoena[116](index=116&type=chunk) [Item 1A. Risk Factors](index=44&type=section&id=Item%201A.%20Risk%20Factors) Updated risks include potential pandemic impacts, uncertainty from the LIBOR phase-out, and liabilities from the WSG acquisition - The ongoing COVID-19 pandemic and related issues, such as **vaccine mandates** for healthcare workers, could negatively impact the supply of healthcare professionals and demand for services[222](index=222&type=chunk)[224](index=224&type=chunk) - The planned **phase-out of LIBOR** by the end of 2021 creates uncertainty and could lead to **higher interest payments** on the company's variable-rate debt[229](index=229&type=chunk)[230](index=230&type=chunk) - The company may face **unforeseen liabilities from the WSG acquisition**, and the sellers' indemnification obligations are limited, which could adversely impact financial results[231](index=231&type=chunk)[233](index=233&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including Sarbanes-Oxley certifications from the CEO and CFO, and XBRL data files - The filing includes **certifications by the CEO and CFO** pursuant to Sarbanes-Oxley Act requirements[235](index=235&type=chunk) - **Interactive Data Files (XBRL)** are included as exhibits to the filing[235](index=235&type=chunk)

Cross Country Healthcare, Inc. (NASDAQ:CCRN) Q2 2021 Earnings Conference Call August 4, 2021 5:00 PM ET Company Participants William Burns - CFO Kevin Clark - Co-Founder and CEO Buffy White - Group President, Workforce Solutions and Services John Martins - Group President, Delivery Pamela Young - Founder and the President, Workforce Solutions Group Conference Call Participants Brian Tanquilut - Jefferies Kevin Fischbeck - Bank of America A.J. Rice - Credit Suisse Tobey Sommer - Truist Securities Kevin Stein ...

[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) This section provides key administrative details of the quarterly report, including filing type, registrant information, and shares outstanding - Filing Type: Quarterly Report on Form **10-Q** for the period ended June 30, **2021**[1](index=1&type=chunk) - Registrant: **CROSS COUNTRY HEALTHCARE, INC.**[1](index=1&type=chunk) - Stock Symbol: **CCRN**, listed on The Nasdaq Stock Market[1](index=1&type=chunk) - Filer Status: Accelerated filer[1](index=1&type=chunk) - Shares Outstanding: **38,003,670** shares of common stock as of July 31, **2021**[1](index=1&type=chunk) [INFORMATION RELATING TO FORWARD-LOOKING STATEMENTS](index=2&type=section&id=INFORMATION%20RELATING%20TO%20FORWARD-LOOKING%20STATEMENTS) This section outlines forward-looking statements, associated risks, and the Company's policy on updating such information - Statements about future results are forward-looking and subject to 'safe harbor' provisions[3](index=3&type=chunk) - Known and unknown risks, uncertainties, and other factors may cause actual results to differ materially from projections[3](index=3&type=chunk) - Key risk factors include the potential impacts of **COVID-19**, ability to attract and retain qualified healthcare personnel, costs and availability of short-term housing, demand for services, cybersecurity risks, government regulation, client payment ability, acquisition and development strategies, liabilities and claims, and competition[3](index=3&type=chunk) - The Company undertakes no obligation to update or revise forward-looking statements, which reflect management's opinions only as of the filing date[4](index=4&type=chunk) [INDEX](index=3&type=section&id=INDEX) This section provides an overview of the report's structure, detailing the contents of Part I and Part II - The report is structured into Part I (Financial Information) and Part II (Other Information)[7](index=7&type=chunk) - Part I includes Condensed Consolidated Financial Statements, Management's Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures About Market Risk, and Controls and Procedures[7](index=7&type=chunk) - Part II includes Legal Proceedings, Risk Factors, and Exhibits[7](index=7&type=chunk) [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part encompasses unaudited condensed consolidated financial statements, management's discussion, and market risk disclosures [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income, stockholders' equity, and cash flows, along with detailed notes explaining the Company's accounting policies, recent acquisition, debt structure, leases, fair value measurements, equity, segment data, contingencies, income taxes, and related party transactions [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This section presents the Company's financial position, detailing assets, liabilities, and equity at specific reporting dates Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | Change ($ in thousands) | Change (%) | | :------------------------------------------ | :------------ | :---------------- | :--------- | :--------- | | Total Assets | $493,638 | $356,973 | $136,665 | 38.3% | | Total Liabilities | $301,507 | $202,064 | $99,443 | 49.2% | | Total Stockholders' Equity | $192,131 | $154,909 | $37,222 | 24.0% | | Cash and cash equivalents | $18,127 | $1,600 | $16,527 | 1032.9% | | Accounts receivable, net | $256,487 | $170,003 | $86,484 | 50.9% | | Goodwill | $127,995 | $90,924 | $37,071 | 40.8% | | Long-term debt, less current portion | $110,777 | $53,408 | $57,369 | 107.4% | | Long-term contingent consideration | $15,000 | — | $15,000 | NM | [Condensed Consolidated Statements of Operations (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) This section details the Company's financial performance, including revenue, operating income, and net income Condensed Consolidated Statements of Operations (Three Months Ended June 30, in thousands) | Metric | 2021 (in thousands) | 2020 (in thousands) | Change ($ in thousands) | Change (%) | | :------------------------------------------ | :--------- | :--------- | :--------- | :--------- | | Revenue from services | $331,827 | $216,779 | $115,048 | 53.1% | | Income (loss) from operations | $15,901 | $(13,688) | $29,589 | 216.2% | | Consolidated net income (loss) | $11,548 | $(14,048) | $25,596 | 182.2% | | Net income (loss) attributable to common shareholders | $11,548 | $(14,151) | $25,699 | 181.6% | | Basic EPS | $0.32 | $(0.39) | $0.71 | NM | | Diluted EPS | $0.31 | $(0.39) | $0.70 | NM | Condensed Consolidated Statements of Operations (Six Months Ended June 30, in thousands) | Metric | 2021 (in thousands) | 2020 (in thousands) | Change ($ in thousands) | Change (%) | | :------------------------------------------ | :--------- | :--------- | :--------- | :--------- | | Revenue from services | $661,068 | $426,843 | $234,225 | 54.9% | | Income (loss) from operations | $36,895 | $(14,442) | $51,337 | 355.5% | | Consolidated net income (loss) | $30,996 | $(15,816) | $46,812 | 296.0% | | Net income (loss) attributable to common shareholders | $30,996 | $(16,240) | $47,236 | 290.9% | | Basic EPS | $0.85 | $(0.45) | $1.30 | NM | | Diluted EPS | $0.84 | $(0.45) | $1.29 | NM | [Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)%20(Unaudited)) This section presents comprehensive income, including net income and other comprehensive income items Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30, in thousands) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :------------------------------------------ | :--------- | :--------- | | Consolidated net income (loss) | $11,548 | $(14,048) | | Unrealized foreign currency translation loss | $(24) | $(9) | | Comprehensive income (loss) attributable to common shareholders | $11,524 | $(14,160) | Condensed Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30, in thousands) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :------------------------------------------ | :--------- | :--------- | | Consolidated net income (loss) | $30,996 | $(15,816) | | Unrealized foreign currency translation loss | $(30) | $(87) | | Comprehensive income (loss) attributable to common shareholders | $30,966 | $(16,327) | [Condensed Consolidated Statements of Stockholders' Equity (Unaudited)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders'%20Equity%20(Unaudited)) This section outlines changes in the Company's equity, reflecting net income, share issuances, and other equity transactions - Total stockholders' equity increased from **$173.67 million** at March 31, **2021**, to **$192.13 million** at June 30, **2021**[14](index=14&type=chunk) - Key drivers for the increase in Q2 **2021** were net income of **$11.55 million** and **$5.0 million** from the acquisition of **WSG** (shares)[14](index=14&type=chunk) - For the six months ended June 30, **2021**, total stockholders' equity increased from **$154.91 million** at December 31, **2020**, to **$192.13 million**, primarily due to net income of **$30.99 million** and the **WSG** acquisition[18](index=18&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section details cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30, in thousands) | Activity | 2021 (in thousands) | 2020 (in thousands) | Change ($ in thousands) | | :------------------------------------------ | :--------- | :--------- | :--------- | | Net cash (used in) provided by operating activities | $(9,422) | $33,731 | $(43,153) | | Net cash used in investing activities | $(27,472) | $(2,490) | $(24,982) | | Net cash provided by (used in) financing activities | $53,438 | $(26,001) | $79,439 | | Change in cash and cash equivalents | $16,527 | $5,202 | $11,325 | | Cash and cash equivalents at end of period | $18,127 | $6,234 | $11,893 | - Net cash used in operating activities in H1 **2021** was primarily due to a **$76.27 million** increase in accounts receivable[20](index=20&type=chunk) - Net cash used in investing activities in H1 **2021** included **$24.47 million** for the **WSG** acquisition[20](index=20&type=chunk) - Net cash provided by financing activities in H1 **2021** was driven by **$100.0 million** proceeds from a new term loan[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed explanations supporting financial statements, covering accounting policies, acquisitions, and debt [1. ORGANIZATION AND BASIS OF PRESENTATION](index=10&type=section&id=1.%20ORGANIZATION%20AND%20BASIS%20OF%20PRESENTATION) This note describes the Company's organizational structure and the accounting principles used in financial statements - The condensed consolidated financial statements include Cross Country Healthcare, Inc. and its subsidiaries, and a joint venture (Cross Country Talent Acquisition Group, LLC) expected to dissolve in fiscal **2021** after its sole staffing agreement terminated on December 31, **2020**[21](index=21&type=chunk) - Statements are prepared in accordance with U.S. GAAP for interim financial information and SEC instructions, and should be read in conjunction with the **2020** Form **10-K**[22](index=22&type=chunk)[23](index=23&type=chunk) [2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=2.%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines key accounting policies and estimates applied in financial statements, including revenue and goodwill - Management makes significant estimates for financial reporting, including accounts receivable valuation, goodwill, intangible assets, share-based compensation, insurance claims, deferred tax assets, legal contingencies, and income taxes, with consideration for the impacts of **COVID-19**[25](index=25&type=chunk) - Accounts receivable are presented net of allowances for doubtful accounts and sales allowances; unbilled receivables were **$76.3 million** at June 30, **2021**, up from **$48.3 million** at December 31, **2020**[26](index=26&type=chunk) Allowance for Doubtful Accounts Reconciliation (in thousands) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :-------------------------------- | :----- | :----- | | Balance at January 1 | $3,416 | $2,406 | | Bad Debt Expense (Q1) | $504 | $539 | | Write-Offs, net of Recoveries (Q1) | $(699) | $(349) | | Balance at March 31 | $3,221 | $2,596 | | Bad Debt Expense (Q2) | $466 | $898 | | Write-Offs, net of Recoveries (Q2) | $(358) | $(532) | | Balance at June 30 | $3,329 | $2,962 | - Restructuring costs primarily include employee termination costs and lease-related exit costs, totaling **$0.8 million** for Q2 **2021** and **$2.3 million** for Q2 **2020**[31](index=31&type=chunk)[32](index=32&type=chunk)[144](index=144&type=chunk) - The Company prospectively adopted ASU No. **2019-12**, Income Taxes (Topic **740**), effective January 1, **2021**, with no material impact on its consolidated financial statements[35](index=35&type=chunk) [3. REVENUE RECOGNITION](index=12&type=section&id=3.%20REVENUE%20RECOGNITION) This note details revenue recognition policies and presents revenue breakdown by reportable segments - In Q1 **2021**, the Company modified its reportable segments to Nurse and Allied Staffing and Physician Staffing, reclassifying the previously-reported Search segment into Nurse and Allied Staffing[38](index=38&type=chunk) Revenue from Services by Segment (Three Months Ended June 30, in thousands) | Segment/Service | 2021 Revenue (in thousands) | 2020 Revenue (in thousands) | Change ($ in thousands) | Change (%) | | :------------------------------ | :--------- | :--------- | :--------- | :--------- | | Nurse And Allied Staffing | $316,188 | $199,907 | $116,281 | 58.2% | | Physician Staffing | $15,639 | $16,872 | $(1,233) | (7.3%) | | **Total Revenue** | **$331,827** | **$216,779** | **$115,048** | **53.1%** | Revenue from Services by Segment (Six Months Ended June 30, in thousands) | Segment/Service | 2021 Revenue (in thousands) | 2020 Revenue (in thousands) | Change ($ in thousands) | Change (%) | | :------------------------------ | :--------- | :--------- | :--------- | :--------- | | Nurse And Allied Staffing | $629,196 | $391,790 | $237,406 | 60.6% | | Physician Staffing | $31,872 | $35,053 | $(3,181) | (9.1%) | | **Total Revenue** | **$661,068** | **$426,843** | **$234,225** | **54.9%** | [4. ACQUISITION](index=13&type=section&id=4.%20ACQUISITION) This note provides details on the recent acquisition of Workforce Solutions Group, Inc., including purchase price and financing - On June 8, **2021**, the Company acquired substantially all assets of **Workforce Solutions Group, Inc.** (**WSG**) for a purchase price of **$25.0 million** in cash and **$5.0 million** in common stock (**307,730** shares)[39](index=39&type=chunk) - The acquisition was financed using a portion of a new **$100.0 million**, six-year term loan[39](index=39&type=chunk) - Sellers are eligible for an earnout of up to an additional **$15.0 million** in cash based on business performance through three years post-acquisition, recorded as a contingent consideration liability[40](index=40&type=chunk) - The acquisition resulted in **$37.1 million** recorded as goodwill and **WSG's** results are included in the Nurse and Allied Staffing segment[42](index=42&type=chunk)[43](index=43&type=chunk) [5. COMPREHENSIVE INCOME (LOSS)](index=14&type=section&id=5.%20COMPREHENSIVE%20INCOME%20(LOSS)) This note explains the components of comprehensive income, including net income and foreign currency adjustments - Total comprehensive income (loss) includes net income or loss and foreign currency translation adjustments, net of any related deferred taxes[45](index=45&type=chunk) - The cumulative unrealized foreign currency translation loss was **$1.3 million** at June 30, **2021**, consistent with December 31, **2020**[45](index=45&type=chunk) [6. EARNINGS PER SHARE](index=14&type=section&id=6.%20EARNINGS%20PER%20SHARE) This note presents the calculation of basic and diluted earnings per share, including anti-dilutive shares Earnings Per Share (Three Months Ended June 30) | Metric | 2021 | 2020 | | :------------------------------------------ | :----- | :----- | | Net income (loss) attributable to common shareholders | $11,548 | $(14,151) | | Weighted average common shares - Basic | 36,625 | 36,123 | | Weighted average common shares - Diluted | 37,203 | 36,123 | | Basic EPS | $0.32 | $(0.39) | | Diluted EPS | $0.31 | $(0.39) | Earnings Per Share (Six Months Ended June 30) | Metric | 2021 | 2020 | | :------------------------------------------ | :----- | :----- | | Net income (loss) attributable to common shareholders | $30,996 | $(16,240) | | Weighted average common shares - Basic | 36,404 | 35,998 | | Weighted average common shares - Diluted | 37,120 | 35,998 | | Basic EPS | $0.85 | $(0.45) | | Diluted EPS | $0.84 | $(0.45) | - Due to net losses in **2020**, **75,688** shares (three months) and **265,304** shares (six months) were excluded from diluted weighted average shares due to their anti-dilutive effect[47](index=47&type=chunk) [7. GOODWILL, TRADE NAMES, AND OTHER INTANGIBLE ASSETS](index=15&type=section&id=7.%20GOODWILL%2C%20TRADE%20NAMES%2C%20AND%20OTHER%20INTANGIBLE%20ASSETS) This note details goodwill and other intangible assets, including amortization schedules and impairment assessments Intangible Assets Subject to Amortization (June 30, 2021, in thousands) | Category | Gross Carrying Amount (in thousands) | Accumulated Amortization (in thousands) | Net Carrying Amount (in thousands) | | :----------------------- | :-------------------- | :----------------------- | :------------------ | | Databases | $30,530 | $16,849 | $13,681 | | Customer relationships | $33,538 | $15,431 | $18,107 | | Non-compete agreements | $304 | $242 | $62 | | **Total** | **$64,372** | **$32,522** | **$31,850** | Estimated Annual Amortization Expense (in thousands) | Years Ending December 31 | Amount (in thousands) | | :----------------------- | :----- | | 2021 (remaining) | $2,982 | | 2022 | $5,933 | | 2023 | $5,875 | | 2024 | $5,238 | | 2025 | $4,679 | | Thereafter | $7,143 | | **Total** | **$31,850** | Goodwill, Net of Impairment Loss by Segment (in thousands) | Segment | December 31, 2020 (in thousands) | June 30, 2021 (in thousands) | Change ($ in thousands) | Change (%) | | :------------------------ | :---------------- | :------------ | :--------- | :--------- | | Nurse and Allied Staffing | $88,117 | $125,188 | $37,071 | 42.1% | | Physician Staffing | $2,807 | $2,807 | $0 | 0.0% | | **Total** | **$90,924** | **$127,995** | **$37,071** | **40.8%** | - The increase in goodwill is primarily due to the **$37.07 million** acquired from the **WSG** acquisition[53](index=53&type=chunk) - A qualitative assessment as of June 30, **2021**, determined no impairment indicators for reporting units, contrasting with a **$10.2 million** goodwill impairment for the Search reporting unit in Q2 **2020** due to **COVID-19** impacts[56](index=56&type=chunk)[57](index=57&type=chunk) - Accelerated amortization of trade names in Q2 **2020** resulted in **$1.4 million** (three months) and **$2.1 million** (six months) in expense due to rebranding initiatives[61](index=61&type=chunk) [8. DEBT](index=17&type=section&id=8.%20DEBT) This note describes the Company's debt structure, including term loans, asset-based loans, and compliance with covenants Long-Term Debt Composition (Principal, in thousands) | Debt Type | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :------------ | :---------------- | | Term Loan | $100,000 | — | | Senior Secured Asset-Based Loan | $15,989 | $53,408 | | Note Payable | $2,426 | $4,851 | | **Total Debt** | **$118,415** | **$58,259** | - On June 8, **2021**, the Company entered into a new **$100.0 million**, six-year second lien subordinated term loan with an interest rate of one-month **LIBOR** plus **5.75%** (**0.75% LIBOR** floor), used to finance the **WSG** acquisition and pay down the ABL[64](index=64&type=chunk) - The ABL Credit Agreement's committed size was increased to **$150.0 million** through three amendments; as of June 30, **2021**, **$16.0 million** was drawn, with **$115.5 million** available for borrowing[65](index=65&type=chunk)[188](index=188&type=chunk)[190](index=190&type=chunk) - The Company was in compliance with all debt covenants, including the minimum net leverage ratio for the Term Loan and the minimum fixed charge coverage ratio for the ABL, as of June 30, **2021**[64](index=64&type=chunk)[68](index=68&type=chunk)[187](index=187&type=chunk)[190](index=190&type=chunk) - A note payable of **$2.43 million** remains, with the final **$2.5 million** installment (plus **2%** interest) due on January 31, **2022**[69](index=69&type=chunk) [9. LEASES](index=19&type=section&id=9.%20LEASES) This note provides information on lease arrangements, including right-of-use assets, liabilities, and expenses Lease-Related Assets and Liabilities (in thousands) | Category | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :------------------------------------------ | :------------ | :---------------- | | Operating lease right-of-use assets | $8,625 | $10,447 | | Operating lease liabilities - current | $4,381 | $4,509 | | Operating lease liabilities - non-current | $13,467 | $15,234 | | Weighted-average remaining lease term | 3.7 years | 4.1 years | | Weighted average discount rate | 6.37% | 6.32% | - Restructuring efforts due to **COVID-19** led to a **$1.7 million** right-of-use asset impairment charge for the three months ended June 30, **2021**, and **$3.8 million** for the same period in **2020**, due to vacated office space[71](index=71&type=chunk) - The **WSG** acquisition added **$1.1 million** in operating lease right-of-use assets and **$1.1 million** in operating lease liabilities[74](index=74&type=chunk) Components of Lease Expense (Three Months Ended June 30, in thousands) | Expense Type | 2021 (in thousands) | 2020 (in thousands) | | :----------------------- | :----- | :----- | | Operating lease expense | $938 | $1,407 | | Short-term lease expense | $641 | $1,451 | | Variable and other lease costs | $751 | $482 | [10. FAIR VALUE MEASUREMENTS](index=21&type=section&id=10.%20FAIR%20VALUE%20MEASUREMENTS) This note explains the fair value hierarchy and the measurement of financial and non-financial instruments - The Company uses a three-level fair value hierarchy (Level **1**: quoted prices in active markets; Level **2**: observable inputs; Level **3**: unobservable inputs)[78](index=78&type=chunk)[79](index=79&type=chunk) - Recurring fair value measurements for deferred compensation assets and liabilities utilize Level **1** inputs[80](index=80&type=chunk)[81](index=81&type=chunk) - Non-recurring fair value measurements for non-financial assets (goodwill, intangibles, right-of-use assets, property and equipment) occur only upon impairment recognition, using Level **3** inputs[82](index=82&type=chunk)[86](index=86&type=chunk) Financial Instruments (Carrying Amount vs. Fair Value, in thousands) | Instrument | June 30, 2021 Carrying Amount (in thousands) | June 30, 2021 Fair Value (in thousands) | December 31, 2020 Carrying Amount (in thousands) | December 31, 2020 Fair Value (in thousands) | | :-------------------------------- | :---------------------------- | :----------------------- | :-------------------------------- | :----------------------- | | Note Payable | $2,426 | $2,426 | $4,851 | $4,851 | | Senior Secured Asset-Based Loan | $15,989 | $15,989 | $53,408 | $53,408 | | Term Loan, net | $100,000 | $100,000 | — | — | | Contingent Consideration | $15,000 | $15,000 | — | — | - The carrying amounts of the note payable, ABL, term loan, and contingent consideration approximate their fair values[88](index=88&type=chunk) [11. STOCKHOLDERS' EQUITY](index=22&type=section&id=11.%20STOCKHOLDERS'%20EQUITY) This note details changes in stockholders' equity, including share repurchase programs and share-based compensation - The Company did not repurchase any shares of common stock during the six months ended June 30, **2021** or **2020**; **510,004** shares remain available under the current repurchase program[91](index=91&type=chunk) - The **2020** Omnibus Incentive Plan, approved May 19, **2020**, replaced the **2017** Plan and reserves **3,000,000** shares for awards, generally subject to a minimum one-year vesting schedule[92](index=92&type=chunk)[94](index=94&type=chunk) - Share-based compensation expense for the six months ended June 30, **2021**, was **$3.5 million**, with **476,630** shares of common stock issued upon vesting of restricted stock[97](index=97&type=chunk) [12. SEGMENT DATA](index=23&type=section&id=12.%20SEGMENT%20DATA) This note provides financial information by the Company's reportable segments, Nurse and Allied Staffing and Physician Staffing - In Q1 **2021**, the Company modified its reportable segments to Nurse and Allied Staffing and Physician Staffing, consolidating the former Search segment into Nurse and Allied Staffing[99](index=99&type=chunk) - Nurse and Allied Staffing represented approximately **95%** of total revenue in Q2 **2021**, providing a wide range of staffing, recruiting, and total talent solutions[99](index=99&type=chunk)[124](index=124&type=chunk) - Physician Staffing represented approximately **5%** of total revenue in Q2 **2021**, providing temporary assignments for physicians and advanced practice providers[100](index=100&type=chunk)[101](index=101&type=chunk)[125](index=125&type=chunk) Segment Revenue and Contribution Income (Three Months Ended June 30, in thousands) | Segment | 2021 Revenue (in thousands) | 2020 Revenue (in thousands) | 2021 Contribution Income (in thousands) | 2020 Contribution Income (in thousands) | | :------------------------ | :----------- | :----------- | :----------------------- | :----------------------- | | Nurse and Allied Staffing | $316,188 | $199,907 | $35,284 | $19,587 | | Physician Staffing | $15,639 | $16,872 | $562 | $1,219 | | **Total** | **$331,827** | **$216,779** | **$35,846** | **$20,806** | Segment Revenue and Contribution Income (Six Months Ended June 30, in thousands) | Segment | 2021 Revenue (in thousands) | 2020 Revenue (in thousands) | 2021 Contribution Income (in thousands) | 2020 Contribution Income (in thousands) | | :------------------------ | :----------- | :----------- | :----------------------- | :----------------------- | | Nurse and Allied Staffing | $629,196 | $391,790 | $72,701 | $33,409 | | Physician Staffing | $31,872 | $35,053 | $1,990 | $1,850 | | **Total** | **$661,068** | **$426,843** | **$74,691** | **$35,259** | [13. CONTINGENCIES](index=26&type=section&id=13.%20CONTINGENCIES) This note discusses the Company's legal proceedings, tax audits, and other potential liabilities - The Company is involved in various legal proceedings, primarily employee-related matters, professional liability, tax, and payroll practices, for which it maintains a liability of **$0.8 million** as of June 30, **2021**[106](index=106&type=chunk) - Sales and other state non-income tax filings are subject to routine audits, and the Company accrues liabilities based on its best estimate of probable liability[107](index=107&type=chunk) - Management believes the outcome of any outstanding loss contingencies as of June 30, **2021**, will not have a material adverse effect on its business, financial condition, results of operations, or cash flows[106](index=106&type=chunk) [14. INCOME TAXES](index=26&type=section&id=14.%20INCOME%20TAXES) This note provides details on income tax expense, effective tax rates, and valuation allowances Effective Tax Rates (Including Discrete Items) | Period | 2021 | 2020 | | :-------------------- | :----- | :----- | | Three months ended June 30 | 22.5% | 2.6% | | Six months ended June 30 | 12.1% | 1.3% | - Income tax expense for H1 **2021** was primarily impacted by international and state taxes and an additional valuation allowance required as a result of the **WSG** acquisition[108](index=108&type=chunk) - The valuation allowance decreased by **$8.1 million** for the six months ended June 30, **2021**, due to estimated taxable income, partially offset by a **$2.1 million** increase from the **WSG** acquisition[109](index=109&type=chunk) - As of June 30, **2021**, the Company had approximately **$1.0 million** of unrecognized tax benefits included in other long-term liabilities[110](index=110&type=chunk) [15. RELATED PARTY TRANSACTIONS](index=27&type=section&id=15.%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions with related parties, including joint ventures, affiliated firms, and individuals - No revenue from the joint venture, Cross Country Talent Acquisition Group, LLC, in H1 **2021**, as its staffing agreement terminated in **2020** and the JV is expected to dissolve[113](index=113&type=chunk) - Incurred immaterial digital marketing fees from a firm related to the Company's CEO[114](index=114&type=chunk) - Generated **$0.2 million** in revenue from a health system affiliated with a Board member in H1 **2021**[115](index=115&type=chunk) - Rents **WSG's** headquarters from a lessor whose agent is **WSG's** former CEO (now a business unit president with the Company)[116](index=116&type=chunk) - A **$2.5 million** note payable balance at June 30, **2021**, is related to contingent consideration from a prior acquisition, payable to an employee of the sellers[117](index=117&type=chunk) [16. RECENT ACCOUNTING PRONOUNCEMENTS](index=27&type=section&id=16.%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) This note discusses recently issued accounting standards and their potential impact on financial statements - The Company is assessing ASU No. **2020-04** and ASU No. **2021-01** (Reference Rate Reform) which provide optional expedients for accounting for contracts and hedging relationships affected by the **LIBOR** phase-out[118](index=118&type=chunk) - As of June 30, **2021**, no material impact on consolidated financial statements is anticipated, but the Company will continue to assess potential effects on debt contracts and future hedging relationships[118](index=118&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=27&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on the Company's financial condition, operating results, and cash flows, detailing business segments, key operating metrics, and a comprehensive analysis of revenue and expenses. It also discusses liquidity, capital resources, critical accounting policies, and recent accounting pronouncements [Business Overview](index=28&type=section&id=Business%20Overview) This section provides an overview of the Company's services, market position, and segment structure - Cross Country Healthcare provides total talent management services, including strategic workforce solutions, contingent staffing, permanent placement, and consultative services for healthcare customers[122](index=122&type=chunk) - In Q1 **2021**, reportable segments were modified to Nurse and Allied Staffing (approximately **95%** of Q2 **2021** revenue) and Physician Staffing (approximately **5%** of Q2 **2021** revenue), with the former Search segment consolidated into Nurse and Allied Staffing[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk) - Nurse and Allied Staffing offers diverse solutions including travel/local nurse and allied professionals, managed services programs (MSP), internal resource pool (IRP), recruitment process outsourcing (RPO), and consulting services[124](index=124&type=chunk) [Summary of Operations](index=28&type=section&id=Summary%20of%20Operations) This section summarizes key financial highlights, including revenue growth, net income, acquisitions, and liquidity - For Q2 **2021**, revenue from services increased **53%** year-over-year to **$331.8 million**, driven by strong performance in Nurse and Allied Staffing and higher bill rates, resulting in a net income of **$11.5 million** (compared to a **$14.2 million** net loss in Q2 **2020**)[126](index=126&type=chunk) - The Company acquired **Workforce Solutions Group, Inc.** (**WSG**) on June 8, **2021**, for **$25.0 million** cash and **$5.0 million** in common stock, with a potential **$15.0 million** earnout[128](index=128&type=chunk) - A new **$100.0 million**, six-year Term Loan Agreement was entered into to finance the **WSG** acquisition and pay down a portion of the ABL[128](index=128&type=chunk) - As of June 30, **2021**, the Company had **$18.1 million** in cash and cash equivalents, **$100.0 million** term loan outstanding, and **$115.5 million** available under its ABL facility[129](index=129&type=chunk) - **COVID-19** is expected to continue impacting the business, with average bill and pay rates remaining higher than the prior year but declining sequentially for certain assignments[130](index=130&type=chunk) [Operating Metrics](index=29&type=section&id=Operating%20Metrics) This section identifies key performance indicators used to evaluate operational efficiency and business trends - Key operating metrics for Nurse and Allied Staffing include FTEs (average number of contract personnel on a full-time equivalent basis) and average revenue per FTE per day[132](index=132&type=chunk) - Key operating metrics for Physician Staffing include days filled (total hours invoiced divided by eight hours) and revenue per day filled[132](index=132&type=chunk) - Other metrics monitored include open orders, candidate applications, contract bookings, length of assignment, bill and pay rates, and renewal and fill rates[132](index=132&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of revenue, direct operating expenses, SG&A, and income taxes - Revenue from services increased **53.1%** to **$331.8 million** for Q2 **2021** and **54.9%** to **$661.1 million** for H1 **2021**, driven by strong Nurse and Allied Staffing performance, increased volume, and higher bill rates due to **COVID-19**[138](index=138&type=chunk)[151](index=151&type=chunk) - Direct operating expenses increased **56.1%** to **$259.2 million** (Q2 **2021**) and **58.3%** to **$517.0 million** (H1 **2021**), primarily due to compensation costs rising at a higher percentage than bill rates[139](index=139&type=chunk)[152](index=152&type=chunk) - Selling, general and administrative expenses increased **19.1%** to **$50.3 million** (Q2 **2021**) and **9.7%** to **$96.7 million** (H1 **2021**), but decreased as a percentage of total revenue due to office closures and reduced legal/IT/consulting expenses[140](index=140&type=chunk)[153](index=153&type=chunk) - Impairment charges significantly decreased to **$1.9 million** (Q2 **2021**) and **$2.1 million** (H1 **2021**), primarily related to real estate restructuring, compared to **$15.0 million** in the prior year periods which included charges for the Search business[145](index=145&type=chunk)[158](index=158&type=chunk) - Income tax expense was **$3.4 million** (Q2 **2021**) and **$4.3 million** (H1 **2021**), primarily impacted by international and state taxes and additional valuation allowance from the **WSG** acquisition[147](index=147&type=chunk)[160](index=160&type=chunk) [Segment Results](index=35&type=section&id=Segment%20Results) This section analyzes financial performance of Nurse and Allied Staffing and Physician Staffing segments - Nurse and Allied Staffing revenue increased **58.2%** to **$316.2 million** in Q2 **2021** and **60.6%** to **$629.2 million** in H1 **2021**, driven by volume and higher bill rates, leading to significant increases in contribution income and margins[165](index=165&type=chunk)[166](index=166&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - Physician Staffing revenue decreased **7.3%** to **$15.6 million** in Q2 **2021** and **9.1%** to **$31.9 million** in H1 **2021**, primarily due to a mix shift to lower bill-rate specialties and volume declines, impacting contribution income margins[168](index=168&type=chunk)[169](index=169&type=chunk)[176](index=176&type=chunk)[177](index=177&type=chunk) - Corporate overhead increased to **$14.1 million** (Q2 **2021**) and **$28.3 million** (H1 **2021**) due to compensation and benefits, but decreased as a percentage of consolidated revenue[172](index=172&type=chunk)[179](index=179&type=chunk) Nurse and Allied Staffing Statistical Data | Metric | Q2 2021 | Q2 2020 | Change | Percent Change | | :------------------------------------------ | :------ | :------ | :----- | :------------- | | FTEs | 7,578 | 5,801 | 1,777 | 30.6% | | Average Revenue per FTE per day | $454 | $375 | $79 | 21.1% | Physician Staffing Statistical Data | Metric | Q2 2021 | Q2 2020 | Change | Percent Change | | :------------------------------------------ | :------ | :------ | :----- | :------------- | | Days filled | 9,775 | 9,195 | 580 | 6.3% | | Revenue per day filled | $1,600 | $1,835 | $(235) | (12.8%) | [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses cash position, working capital, cash flow activities, and available credit facilities - As of June 30, **2021**, the Company had **$18.1 million** in cash and cash equivalents, **$100.0 million** term loan outstanding, **$16.0 million** drawn on its ABL, and **$115.5 million** ABL availability[181](index=181&type=chunk) - Working capital increased by **$73.6 million** to **$163.3 million** as of June 30, **2021**, from **$89.7 million** at December 31, **2020**[181](index=181&type=chunk) - Net cash used in operating activities was **$9.4 million** in H1 **2021** (compared to **$33.7 million** provided in H1 **2020**), primarily due to a **$76.3 million** increase in receivables[184](index=184&type=chunk) - Net cash used in investing activities was **$27.5 million** in H1 **2021**, mainly for the **WSG** acquisition (**$24.5 million**)[185](index=185&type=chunk) - Net cash provided by financing activities was **$53.4 million** in H1 **2021**, primarily from **$100.0 million** in proceeds from the new term loan[185](index=185&type=chunk) - The Company expects to meet future liquidity needs from cash on hand, operating cash flows, and funds available through the ABL[183](index=183&type=chunk) [Critical Accounting Policies and Estimates](index=40&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights significant accounting policies and estimates requiring management's judgment - Critical accounting policies and estimates remain consistent with those reported in the **2020** Form **10-K**, except for the adoption of ASU No. **2019-12**, Income Taxes (Topic **740**), as discussed in Note **2**[193](index=193&type=chunk) [Recent Accounting Pronouncements](index=40&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to disclosures regarding new accounting standards and their potential impact - Refer to Note **16** - Recent Accounting Pronouncements for details on ASU No. **2020-04** and ASU No. **2021-01** regarding Reference Rate Reform[194](index=194&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=41&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section discusses the Company's exposure to market risks, primarily focusing on interest rate risk associated with its variable-rate debt. It highlights the potential impact of the LIBOR phase-out on interest payments and confirms no material changes to other risk exposures [Interest Rate Risk](index=41&type=section&id=Interest%20Rate%20Risk) This section details exposure to interest rate fluctuations, particularly concerning variable-rate debt and LIBOR transition - The Company is exposed to variable interest rate risk associated with its Term Loan Agreement and ABL Credit Agreement, which are based on **LIBOR** or Base Rate[196](index=196&type=chunk) - A **1%** change in interest rates would have resulted in approximately **$0.5 million** fluctuation in interest expense for the six months ended June 30, **2021**[197](index=197&type=chunk) - The phase-out of **LIBOR** by the end of **2021** poses a risk, as the transition to alternative benchmark rates (like **SOFR**) may result in less favorable rates and higher interest payments[198](index=198&type=chunk)[208](index=208&type=chunk) [Other Risks](index=41&type=section&id=Other%20Risks) This section confirms no new material market risk exposures have emerged since the previous annual report - There have been no material changes to the Company's other risk exposures as disclosed in its **2020** Form **10-K**[199](index=199&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=41&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The Company's CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2021. No material changes occurred in internal control over financial reporting during the quarter, and the Company has managed to avoid material impact despite widespread remote work due to COVID-19 - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of June 30, **2021**[200](index=200&type=chunk) - There were no material changes in internal control over financial reporting during the most recently completed fiscal quarter[201](index=201&type=chunk) - The Company has not experienced any material impact to its internal controls over financial reporting despite most employees working remotely due to the **COVID-19** pandemic[201](index=201&type=chunk) [PART II. OTHER INFORMATION](index=42&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part includes disclosures on legal proceedings, updated risk factors, a list of exhibits, and official signatures [ITEM 1. LEGAL PROCEEDINGS](index=42&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section incorporates legal proceedings information by reference from Note 13 - Contingencies - Information regarding legal proceedings is incorporated by reference from Note **13** - Contingencies - Legal Proceedings in Part I, Item **1** of this Quarterly Report on Form **10-Q**[204](index=204&type=chunk) [ITEM 1A. RISK FACTORS](index=42&type=section&id=ITEM%201A.%20RISK%20FACTORS) This section updates risk factors, addressing new acquisition-related risks and interest rate risk from LIBOR phase-out - New risks related to the **WSG** acquisition include potential unknown liabilities, losses, or other exposures for which the Company may not have adequate insurance or indemnification[205](index=205&type=chunk) - The sellers' obligations to indemnify the Company for breaches of representations and warranties are limited, potentially leaving the Company without sufficient recourse for post-closing issues[207](index=207&type=chunk) - The phase-out of **LIBOR** by the end of **2021** may impact interest rates under the Term Loan Agreement and ABL Credit Agreement, potentially resulting in less favorable rates and higher interest payments[208](index=208&type=chunk) - The Term Loan Agreement and ABL Credit Agreement contain fallback provisions for alternative rate calculations in the event **LIBOR** is unavailable[208](index=208&type=chunk) [ITEM 6. EXHIBITS](index=43&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed with the Form 10-Q, including key agreements and certifications - Key exhibits include the Asset Purchase Agreement for **Workforce Solutions Group, Inc.**, the Term Loan Credit Agreement, and Amendment No. **3** to the ABL Credit Agreement[210](index=210&type=chunk) - Certifications pursuant to Rule **13a-14(a)** and **18** U.S.C. Section **1350** by the Co-Founder, Chief Executive Officer, and Executive Vice President, Chief Financial Officer are included[210](index=210&type=chunk) - XBRL Instance Document and other XBRL Taxonomy Extension documents are also filed[210](index=210&type=chunk) [SIGNATURES](index=44&type=section&id=SIGNATURES) This section confirms the official signing of the report by the Executive Vice President & Chief Financial Officer - The report was signed on behalf of Cross Country Healthcare, Inc. by **William J. Burns**, Executive Vice President & Chief Financial Officer (Principal Accounting and Financial Officer)[215](index=215&type=chunk) - The signing date was August **5**, **2021**[215](index=215&type=chunk)

INVESTOR RELATIONS Q1 2021 Forward Looking Statements This presentation contains forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", "appears", "seeks", "will" and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and ot ...

Cross Country Healthcare, Inc. (NASDAQ:CCRN) Q1 2021 Earnings Conference Call May 5, 2021 5:00 PM ET Company Participants William Burns - CFO Kevin Clark - Co-Founder and CEO Buffy White - Group President, Workforce Solutions and Services John Martins - Group President, Nurse and Allied Conference Call Participants A.J. Rice - Credit Suisse Kevin Steinke - Barrington Research Kevin Fischbeck - Bank of America Tobey Sommer - Truist Securities Brian Tanquilut - Jefferies Operator Good afternoon, ladies and ge ...

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 March 31, 2021 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 (S ...

INVESTOR RELATIONS Q4 2020 Forward Looking Statements This presentation contains forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions or that include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", "appears", "seeks", "will" and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and ot ...

Cross Country Healthcare, Inc. (NASDAQ:CCRN) Q4 2020 Earnings Conference Call February 24, 2021 5:00 PM ET Company Participants William Burns - Executive VP, CFO & Principal Accounting Officer Kevin Clark - Co-Founder, President, CEO Buffy White - Group President of Workforce Solutions & Services Stephen Saville - Group President, Locums, Education and Corporate Development John Martins - Group President of Nurse & Allied Conference Call Participants A.J. Rice - Credit Suisse Jeff Silber - BMO Capital Marke ...