Cross ntry Healthcare(CCRN) - 2019 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements Unaudited condensed consolidated financial statements, including balance sheets, income statements, cash flows, and equity, are presented with detailed notes on accounting policies, acquisitions, debt, and leases - The financial statements are unaudited and prepared in accordance with U.S. GAAP for interim financial information and Form 10-Q instructions[21] - These interim statements should be read in conjunction with the audited consolidated financial statements from the Company's Annual Report on Form 10-K for the year ended December 31, 2018[22] Condensed Consolidated Balance Sheets (Unaudited) Condensed Consolidated Balance Sheet Highlights (Amounts in thousands) | Metric | March 31, 2019 | December 31, 2018 | | :-------------------------------- | :------------- | :---------------- | | Assets: | | | | Total Assets | $441,435 | $427,003 | | Cash and cash equivalents | $18,286 | $16,019 | | Accounts receivable, net | $154,758 | $166,128 | | Total current assets | $186,484 | $194,905 | | Liabilities and Stockholders' Equity: | | | | Total Liabilities | $225,425 | $208,805 | | Total Stockholders' Equity | $216,010 | $218,198 | Condensed Consolidated Statements of Operations (Unaudited) Condensed Consolidated Statements of Operations Highlights (Three Months Ended March 31, Amounts in thousands, except per share data) | Metric | 2019 | 2018 | | :-------------------------------------------------- | :----- | :----- | | Revenue from services | $195,171 | $210,288 | | Total operating expenses | $197,859 | $206,040 | | (Loss) income from operations | $(2,688) | $4,248 | | Consolidated net (loss) income | $(1,376) | $1,920 | | Net (loss) income attributable to common shareholders | $(1,767) | $1,642 | | Net (loss) income per share - Basic | $(0.05) | $0.05 | | Net (loss) income per share - Diluted | $(0.05) | $0.05 | Condensed Consolidated Statements of Comprehensive (Loss) Income (Unaudited) Condensed Consolidated Statements of Comprehensive (Loss) Income Highlights (Three Months Ended March 31, Amounts in thousands) | Metric | 2019 | 2018 | | :---------------------------------------------------- | :----- | :----- | | Consolidated net (loss) income | $(1,376) | $1,920 | | Other comprehensive loss, net of tax | $(199) | $(194) | | Comprehensive (loss) income | $(1,575) | $1,726 | | Comprehensive (loss) income attributable to common shareholders | $(1,966) | $1,448 | Condensed Consolidated Statements of Stockholders' Equity (Unaudited) Condensed Consolidated Statements of Stockholders' Equity Highlights (Amounts in thousands) | Metric | March 31, 2019 | December 31, 2018 | March 31, 2018 | | :------------------------------------------ | :------------- | :---------------- | :------------- | | Total Stockholders' Equity | $216,010 | $218,198 | $236,101 | | Additional Paid-In Capital | $302,802 | $303,048 | $302,325 | | Accumulated Other Comprehensive Loss, net | $(1,661) | $(1,462) | $(1,360) | | Accumulated Deficit | $(85,829) | $(84,062) | $(65,469) | - Net loss attributable to common shareholders was $1,767 thousand for the three months ended March 31, 2019, compared to net income of $1,642 thousand for the same period in 2018[17] Condensed Consolidated Statements of Cash Flows (Unaudited) Condensed Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, Amounts in thousands) | Metric | 2019 | 2018 | | :------------------------------------------ | :----- | :----- | | Net cash provided by operating activities | $12,787 | $13,273 | | Net cash used in investing activities | $(1,245) | $(1,027) | | Net cash used in financing activities | $(9,295) | $(5,149) | | Change in cash and cash equivalents | $2,267 | $7,084 | | Cash and cash equivalents at end of period | $18,286 | $32,621 | Notes to Condensed Consolidated Financial Statements (Unaudited) This section provides detailed notes on the company's accounting policies, acquisitions, debt, leases, fair value measurements, segment data, and recent accounting pronouncements 1. ORGANIZATION AND BASIS OF PRESENTATION This section outlines the company's organizational structure and the basis for preparing its condensed consolidated financial statements - The condensed consolidated financial statements include Cross Country Healthcare, Inc. and its direct and indirect wholly-owned subsidiaries, as well as Cross Country Talent Acquisition Group, LLC (controlled but not wholly-owned)[20] - On March 29, 2019, the Company amended its senior credit facility and made an optional prepayment of $7.5 million on its outstanding debt, remaining in compliance with financial covenants[23] 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This section details the significant accounting policies used in preparing the condensed consolidated financial statements - Management makes significant estimates for items such as accounts receivable valuation, goodwill, intangible assets, share-based compensation, insurance claims, deferred tax assets, and contingent considerations[24] - Restructuring costs include ongoing benefit costs, exit costs, and write-offs related to abandoned locations due to fundamental changes in operations[25] - Effective January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842), recognizing right-of-use assets of $22.0 million and total lease liabilities of $28.6 million at the transition date[29][30] 3. REVENUE RECOGNITION This section describes the company's revenue recognition policies and disaggregates revenue by segment Revenue Disaggregation by Segment (Three Months Ended March 31, 2019, Amounts in thousands) | Segment | Temporary Staffing Services | Other Services | Total | | :------------------- | :-------------------------- | :------------- | :---- | | Nurse and Allied Staffing | $172,653 | $3,420 | $176,073 | | Physician Staffing | $15,154 | $1,005 | $16,159 | | Search Services | — | $2,939 | $2,939 | | Total | $187,807 | $7,364 | $195,171 | - Accounts receivable includes an estimated $43.0 million for worked but unbilled amounts as of March 31, 2019, a decrease from $44.1 million at December 31, 2018[32] 4. ACQUISITIONS This section provides details on the accounting for the company's acquisitions, including deferred purchase price and contingent consideration - For the Advantage RN acquisition, the remaining $0.1 million deferred purchase price was released to the seller in February 2019, and $2.9 million from tax liability escrow was released in April 2019[34][35] - Contingent consideration for the Mediscan acquisition, based on performance criteria through 2019, had an estimated fair value of $7.8 million as of March 31, 2019[36] 5. COMPREHENSIVE INCOME This section outlines the components of comprehensive income, including foreign currency translation adjustments and derivative instrument changes - The cumulative unrealized foreign currency translation loss was $1.2 million at March 31, 2019, a slight decrease from $1.3 million at December 31