Q2 2022 Investor Relations September 2022 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, uncert ...

Cross Country Healthcare, Inc. (NASDAQ:CCRN) Q2 2022 Earnings Conference Call August 3, 2022 5:00 PM ET Company Participants Josh Vogel - Vice President, Investor Relations John A. Martins - President and Chief Executive Officer William J. Burns - Executive Vice President and Chief Financial Officer Daniel J. White - Chief Commercial Officer Conference Call Participants Kevin Fischbeck - Bank of America Taji Phillips - Jefferies Financial Group Inc. Tobey Sommer - Truist Securities William Sutherland - The ...

Revenue Growth - Revenue from services increased 127.1% year-over-year to $753.6 million for the three months ended June 30, 2022, compared to $331.8 million for the same period in 2021[138]. - Revenue from services increased 133.3% to $1.5 billion for the six months ended June 30, 2022, compared to $661.1 million for the same period in 2021, driven by strong performance in Nurse and Allied Staffing and Physician Staffing segments[152]. - Revenue from Physician Staffing increased by $6.5 million, or 41.4%, to $22.1 million for the three months ended June 30, 2022, compared to $15.6 million for the same period in 2021[171]. - Revenue for Nurse and Allied Staffing increased by $867.8 million, or 137.9%, to $1.5 billion for the six months ended June 30, 2022, compared to $629.2 million for the same period in 2021[175]. Net Income and Profitability - Net income attributable to common stockholders for the second quarter of 2022 was $52.9 million, up from $11.5 million in the prior year, representing a 358.0% increase[137]. - Net income attributable to common shareholders was $114.9 million for the six months ended June 30, 2022, compared to $31.0 million for the same period in 2021, reflecting a 270.6% increase[151]. - Contribution income increased by $62.3 million, or 176.5%, to $97.6 million for the three months ended June 30, 2022, compared to $35.3 million for the same period in 2021, with a contribution income margin of 13.3%[169]. - Contribution income for the six months ended June 30, 2022, increased by $135.0 million, or 185.6%, to $207.7 million, with a contribution income margin of 13.9%[176]. Expenses - Direct operating expenses rose 125.0% to $583.2 million, accounting for 77.4% of total revenue, down from 78.1% in the prior year[139]. - Selling, general, and administrative expenses increased 70.8% to $86.0 million, representing 11.4% of total revenue, down from 15.2% in the prior year[140]. - Direct operating expenses rose 131.5% to $1.2 billion for the six months ended June 30, 2022, compared to $517.0 million in the prior year, with a decrease in direct operating expenses as a percentage of total revenue to 77.6%[153]. - Selling, general and administrative expenses increased 68.4% to $162.8 million for the six months ended June 30, 2022, compared to $96.7 million in 2021, with a decrease in these expenses as a percentage of total revenue to 10.5%[154]. Cash Flow and Financial Management - Cash flow from operating activities was $18.1 million, with net borrowings of $33.5 million on the senior-secured asset-based credit facility[130]. - The company made a $50.0 million optional prepayment on its term loan to reduce interest costs, reflecting positive cash flow management[131]. - Net cash used in operating activities was $10.9 million for the six months ended June 30, 2022, compared to $9.4 million in the prior year, driven by a $215.2 million increase in receivables[186]. - Working capital increased by $141.2 million to $449.7 million as of June 30, 2022, primarily due to an increase in accounts receivable[183]. Staffing and Workforce - The Nurse and Allied Staffing segment represented approximately 97% of total revenue in the second quarter of 2022, highlighting its dominance in the company's service offerings[125]. - Physician Staffing accounted for approximately 3% of total revenue, indicating a smaller but essential segment of the business[126]. - The number of full-time equivalents (FTEs) in Nurse and Allied Staffing increased by 78.1% to 13,494 for the three months ended June 30, 2022, compared to 7,578 in the prior year[166]. - Average revenue per FTE per day in Nurse and Allied Staffing increased by 30.2% to $591 for the three months ended June 30, 2022, compared to $454 in the same period in 2021[166]. - The average number of FTEs on contract increased by 78.1% for the three months ended June 30, 2022, with average revenue per FTE per day rising by 30.2%[170]. Tax and Interest Expenses - Income tax expense increased to $46.4 million for the six months ended June 30, 2022, from $4.3 million in the prior year, primarily due to federal and state taxes[163]. - Interest expense was $7.4 million for the six months ended June 30, 2022, compared to $1.9 million for the same period in 2021, attributed to higher average borrowings and an increase in the effective interest rate to 6.6%[160]. - The company reported a loss on early extinguishment of debt of $1.9 million for the six months ended June 30, 2022, with no such expenses in the prior year[161]. - Non-cash impairment charges totaled $1.7 million for the six months ended June 30, 2022, down from $2.1 million in the same period in 2021[159]. Corporate Overhead - Corporate overhead increased to $17.6 million for the three months ended June 30, 2022, from $14.1 million in the prior year, with a decrease in corporate overhead as a percentage of consolidated revenue to 2.3%[174]. Future Outlook - Average travel bill rates are anticipated to decline in the mid-teens sequentially for the remainder of 2022, impacting future revenue[129]. - The company plans to double its IT project budget for 2022 compared to 2021, indicating a commitment to technology investment[129]. Risk and Exposures - The company highlights interest rate risk related to the phase-out of LIBOR as discussed in the 2021 Form 10-K[204]. - There have been no material changes to the company's other exposures as disclosed in the 2021 Form 10-K[205].

Q1 2022 Investor Relations June 2022 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, uncertainti ...

Financial Data and Key Metrics Changes - Consolidated revenue for Q1 2022 reached an all-time high of $789 million, up 140% year-over-year and more than 20% sequentially [13][32] - Adjusted EBITDA was reported at $97 million, representing a margin above 12% for the second consecutive quarter [17] - Gross margin improved to 22.2%, up 50 basis points year-over-year, driven by a higher mix of profitable business [33] Business Line Data and Key Metrics Changes - Nurse and Allied segment reported revenue of $766 million, a 145% increase year-over-year and 23% sequentially, with the highest number of travelers on assignment in company history [34] - Local staffing business showed growth due to a shift in assignment types, with a notable increase in average bill rates [36] - Education business recovered significantly, achieving the highest single revenue quarter in its history as in-class learning resumed [37] - Physician staffing segment revenue reached $23 million, marking a 43% growth year-over-year, driven by increased billable days [38] Market Data and Key Metrics Changes - Overall demand remains strong, although it has decreased from pandemic peaks, with a noted decline in travel orders [18] - The company anticipates a modest sequential decline in bill rates throughout the year, projecting a 35% decrease compared to Q1 [21] - Demand for healthcare professionals remains elevated, with a 30% increase compared to pre-pandemic levels [61] Company Strategy and Development Direction - The company aims to establish itself as a digital leader in healthcare staffing, focusing on self-service solutions for clients and candidates [12] - Significant investments in technology and personnel are being made to enhance operational efficiency and service delivery [25][40] - The company is actively working to normalize bill rates while addressing labor shortages and increasing core staff through recruitment processing outsourcing [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a run-rate exceeding $2 billion in annualized revenue by year-end, supported by strong demand across all business lines [30][62] - The company is optimistic about future growth, citing a diversified business model and ongoing investments in non-travel segments [63] - Management acknowledged the challenges posed by rising labor costs and the need for flexibility in staffing solutions [20][19] Other Important Information - The company hired over 1,000 new employees in the past year, with a focus on revenue-producing and operational support roles [40] - Technology investments in Q1 2022 amounted to nearly $4 million, more than double the previous year, with a focus on client-facing tools [25] Q&A Session Summary Question: Insights on staffing demand related to COVID - Management indicated that they cannot discern specific COVID-related staffing needs but noted a minimal impact from COVID cases among their clinicians [49][51] Question: Factors supporting bill rates - Management explained that while bill rates are expected to decline, the mix of skills and demand for specific specialties will influence rates [52] Question: Efficiency gains versus increased demand - Management confirmed that productivity improvements are due to both increased demand and enhancements in processes and technology [54][56] Question: Dynamics of nurse placements - Management observed a strong demand for travel nursing, with clinicians preferring flexible work arrangements [58][59] Question: Update on fill rates - Management stated that fill rates are challenging to quantify due to the volume of orders but noted sequential growth in travel assignments [75][76] Question: Capital deployment and M&A strategy - Management reiterated a disciplined approach to M&A, focusing on strategic fits that are accretive to the business [77]

Revenue Growth - Revenue from services increased 139.6% year-over-year to $788.7 million for the quarter ended March 31, 2022, compared to $329.2 million in the same quarter of 2021, driven by strong performance in both Nurse and Allied and Physician Staffing segments [129]. - Revenue from Nurse and Allied Staffing increased by $452.6 million, or 144.6%, to $765.6 million for the three months ended March 31, 2022, compared to $313.0 million for the same period in 2021 [141]. - Revenue from Physician Staffing increased by $7.0 million, or 42.6%, to $23.2 million for the three months ended March 31, 2022, primarily due to increased volume [145]. Profitability - Net income attributable to common stockholders for the first quarter of 2022 was $62.0 million, a significant increase from $19.4 million in the prior year, reflecting a growth of 218.7% [128]. - Income from operations for the first quarter of 2022 was $90.6 million, a 331.7% increase from $21.0 million in the same quarter of 2021 [128]. - Contribution income for Nurse and Allied Staffing rose by $72.7 million, or 194.3%, to $110.1 million for the three months ended March 31, 2022, with a contribution income margin of 14.4% [142]. Expenses - Direct operating expenses rose 138.2% to $613.9 million for the three months ended March 31, 2022, compared to $257.8 million in the same period of 2021, while as a percentage of total revenue, these expenses decreased to 77.8% from 78.3% [130]. - Selling, general and administrative expenses increased 65.8% to $76.8 million for the first quarter of 2022, down to 9.7% of total revenue from 14.1% in the prior year [131]. - Corporate overhead increased to $16.3 million for the three months ended March 31, 2022, from $14.2 million in the prior year, representing 2.1% of consolidated revenue [148]. Cash Flow and Financing - Cash flow used in operating activities was $29.0 million for the quarter ended March 31, 2022, with net borrowings of $42.3 million on the senior-secured asset-based credit facility [121]. - Net cash used in operating activities was $29.0 million for the three months ended March 31, 2022, compared to $24.9 million in the same period in 2021, primarily due to increased receivables [153]. - The company reported net borrowings of $41.9 million on its debt during the three months ended March 31, 2022 [155]. Capital and Investments - The company amended the ABL Credit Agreement, increasing the committed size from $150.0 million to $300.0 million and extending the credit facility for an additional five years [120]. - The company plans to double its IT project budget for 2022 compared to 2021, indicating a commitment to investing in technology and personnel [119]. - The company has an effective "shelf" registration statement on file with the SEC to sell up to 5,000,000 shares of common stock for general corporate purposes or acquisitions [152]. Operational Metrics - The average number of FTEs on contract increased by 103.4% to 13,454 for the three months ended March 31, 2022, driven by headcount growth and the WSG acquisition [144]. - Working capital increased by $100.6 million to $409.1 million as of March 31, 2022, compared to $308.5 million as of December 31, 2021 [150]. Interest and Risk Factors - Interest expense increased to $3.5 million for the first quarter of 2022, compared to $0.7 million in the prior year, due to higher average borrowings and a higher effective interest rate of 6.4% [136]. - A 1% change in interest rates would have resulted in interest expense fluctuating approximately $0.5 million and $0.2 million for the three months ended March 31, 2022 and 2021, respectively [170]. - The interest rates under the Term Loan Agreement and ABL Credit Agreement may be impacted by the phase-out of LIBOR, presenting a risk factor for the company [171]. - There have been no material changes to the company's other exposures as disclosed in the 2021 Form 10-K [172].

Company Structure and Segments - In 2021, the company modified its reportable segments, consolidating the previously reported Search segment into Nurse and Allied Staffing, resulting in two main segments: Nurse and Allied Staffing and Physician Staffing [35]. - The company generated a majority of its revenue from staffing registered nurses on long-term travel contract assignments, typically lasting 13 weeks [38]. - The company entered into an asset purchase agreement with Workforce Solutions Group, Inc. in June 2021 to enhance service delivery to needy populations [38]. - The company acquired Selected, a subscription-based platform, in 2021 to improve direct hire candidate review processes [44]. - The company utilizes artificial intelligence and a proprietary on-demand staffing platform, Cross Country Marketplace, to enhance recruitment and candidate experience [42]. - The company employs an average of 8,679 full-time equivalent field employees in Nurse and Allied Staffing as of 2021 [79]. Market Overview - The healthcare staffing market size was estimated at $24.7 billion in 2021, with travel nursing accounting for $11.8 billion, per diem nursing at $4.6 billion, allied health at $4.4 billion, and locum tenens and advanced practitioners at $4.0 billion [57]. - The U.S. telehealth market was valued at $10 billion in 2020 and is expected to reach $43 billion by 2026, growing at an annual rate of 28% [64]. - The nursing home and assisted living facilities market is valued at $450 billion and is expanding annually [63]. - The U.S. is expected to face a physician shortage ranging between 37,800 and 124,000 by 2034 [68]. - More than 80,000 qualified applicants to nursing programs have been turned away due to insufficient faculty and resources [67]. Employment Trends - The U.S. Bureau of Labor Statistics reported a national unemployment rate of 4.2% in November 2021, with temporary help services gaining 6,200 jobs [58]. - The healthcare sector lost 527,000 jobs during the COVID pandemic but gained back 77,000 jobs by November 2021, with overall employment in healthcare projected to grow by 7.7% over the next decade [61]. - Employment of registered nurses is projected to grow 9% from 2020 to 2030, increasing from 3.1 million to 3.4 million [65]. - The company anticipates a 4% growth in the U.S. staffing industry in 2022, although the healthcare staffing segment is expected to decline by 9% due to easing pandemic conditions [58]. Nurse Satisfaction and Retention - 32% of surveyed nurses are "very/completely" satisfied with their occupation, down from 52% prior to the pandemic [62]. - 97% of surveyed nurses agreed that increasing pay rates and incentives would help attract and retain more nurses [62]. Financial and Operational Insights - A 1% change in interest rates on variable rate debt would have resulted in interest expense fluctuating approximately $1.1 million for the year ended December 31, 2021 [278]. - Approximately 1% of selling, general and administrative expenses are related to software development and IT support in Pune, India [280]. - Fluctuations in foreign currency values impact reported results, as expenses in foreign currencies are translated into U.S. dollars at monthly average exchange rates [281]. - The translation of non-U.S. subsidiary assets and liabilities into U.S. dollars affects stockholders' equity, recorded as accumulated other comprehensive loss [282]. Company Ranking - The company ranks as the seventh-largest healthcare staffing firm in the U.S., with a 4% market share in 2020 [74].

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)