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Cross ntry Healthcare(CCRN) - 2021 Q3 - Earnings Call Transcript

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]