Cross ntry Healthcare(US:CCRN)2023-02-22 16:00Financial Performance - For the year ended December 31, 2022, total revenue increased by 67% year-over-year to $2.8 billion, driven by strong performance in both Nurse and Allied Staffing and Physician Staffing segments[162]. - Nurse and Allied Staffing represented approximately 96% of total revenue for the year ended December 31, 2022, with revenue from this segment reaching $2.7 billion, an increase of 68.2% from $1.6 billion in 2021[161][179]. - Net income attributable to common stockholders for the year ended December 31, 2022, was $188.5 million, compared to $132.0 million in 2021, reflecting a year-over-year increase of 42.7%[162]. - Contribution income for the year ended December 31, 2022, increased by $149.7 million or 72.8% to $355.4 million, with a contribution income margin of 13.2%[224]. Cash Flow and Expenses - Cash flow provided by operating activities was $134.1 million for the year ended December 31, 2022, compared to a cash outflow of $85.6 million in 2021, indicating a significant improvement in operational cash flow[184]. - Direct operating expenses increased by 67.4% to $2.2 billion for the year ended December 31, 2022, as a result of revenue increases, maintaining a consistent percentage of total revenue at 77.6%[168]. - Selling, general and administrative expenses rose by 50.6% to $324.2 million for the year ended December 31, 2022, but decreased as a percentage of total revenue to 11.6% from 12.8% in 2021[169]. - Corporate overhead increased to $67.1 million for the year ended December 31, 2022, but decreased as a percentage of consolidated revenue to 2.4% from 3.3% in 2021[181]. - Income tax expense for the year ended December 31, 2022, totaled $67.9 million, up from $1.2 million in 2021, with an effective tax rate of 26.5% compared to 1.0% in 2021[196]. Staffing and Workforce - The average number of FTEs in Nurse and Allied Staffing increased by 49.6% to 12,980 in 2022, driven by headcount growth and the WSG acquisition[198][200]. - Average revenue per FTE per day in Nurse and Allied Staffing rose by 12.3% to $565 in 2022, reflecting increased travel bill rates[198][200]. - Total days filled in Physician Staffing increased by 35.9% to 60,038 in 2022, with revenue per day filled at $1,769, up 10.2% from $1,605 in 2021[198][225]. - The healthcare workforce shortage has been exacerbated by the pandemic, but the company has successfully hired and retained healthcare professionals due to its strong culture and operational performance[266]. Investments and Acquisitions - The company made optional prepayments on its term loan totaling $100 million in 2022 to reduce interest costs[163]. - The company entered into asset purchase agreements in 2022 to expand its locum tenens portfolio and strengthen its position in talent management[163]. - The company acquired HireUp Leadership Inc. in December 2022, enhancing its ability to recruit healthcare leaders across various specialties[262]. - The company’s acquisitions in 2022 and 2021 are part of its strategy to expand its service offerings and support critical healthcare needs[262]. Technology and Operations - The proprietary vendor management system, Intellify, is expected to be fully deployed by 2024, enhancing customer visibility and management of spend[264]. - The company has improved its applicant tracking system and on-demand staffing platform, leading to increased efficiency and candidate conversion ratios[264]. - The healthcare staffing industry is increasingly relying on technology, with over 66% of health systems and hospitals using automation tools for revenue cycle operations[263]. - The company continues to modernize its technologies and processes to optimize relationships with healthcare professionals and customers[265]. Financial Position and Capital Management - Working capital increased by $95.5 million to $404.0 million as of December 31, 2022, compared to $308.5 million in 2021, primarily due to an increase in accounts receivable[202]. - Net cash used in financing activities for the year ended December 31, 2022, was $87.6 million, compared to net cash provided of $119.1 million in 2021[204]. - Net cash used in investing activities for the year ended December 31, 2022, was $43.9 million, an increase from $34.0 million in 2021, primarily due to acquisitions of Mint and HireUp totaling $35.1 million[228]. - The company authorized a new repurchase program for up to $100.0 million of its common stock in the third quarter of 2022[227]. Compliance and Risk Management - The company was in compliance with its minimum net leverage ratio covenant as of December 31, 2022[229]. - The company maintains various insurance policies to cover potential liabilities arising from its operations[271]. - As of December 31, 2022, total unrecognized tax benefits recorded was $7.6 million[223]. - The company recorded a valuation allowance release of $37.5 million for deferred tax assets in 2021, indicating improved realizability of these assets[252]. Community and Employee Engagement - The company believes that taking care of its people and communities will lead to overall success, a mindset that has resonated with employees and customers[266]. - The company offers competitive compensation and benefits, including professional liability insurance, a 401(k) plan, health insurance, and reimbursed travel[268]. - The number of students receiving special education services was 7.2 million, or 15% of all public school students, highlighting the increased need for healthcare services in schools[274]. - The company is positioned to assist healthcare systems in managing costs through vendor-neutral and tech-enabled platforms, such as Intellify[275].