Cross ntry Healthcare(US:CCRN)2019-02-28 04:46Financial Data and Key Metrics Changes - Revenue for Q4 2018 was $200.9 million, down 9% year-over-year and slightly up sequentially [25] - Adjusted EBITDA for the quarter was $6.2 million, or 3.1% of revenue, compared to $12.3 million, or 5.6% in the prior year [30] - Net loss attributable to common shareholders for the quarter was $19.7 million, or $0.55 per share, compared to net income of $28 million, or $0.77 per diluted share in the prior year [34] Business Line Data and Key Metrics Changes - Revenue for the Nurse and Allied segment was $179.5 million, down 7% year-over-year and up 2% sequentially [35] - Revenue for the Physician Staffing segment was $18.3 million, down 19% year-over-year and down 14% sequentially [38] - Contribution margin for the Nurse and Allied segment was 9%, down 90 basis points year-over-year [37] Market Data and Key Metrics Changes - Overall demand in the market has remained fairly high, with 13 new managed service programs won in 2018, projected to generate approximately $80 million in incremental spend [21] - The company manages approximately $400 million in spend with a capture rate of 61% as of Q4 [22] - Orders at the start of 2019 were 20% ahead of where they were at the start of 2018 [23] Company Strategy and Development Direction - The company aims to return to consolidated organic growth and expand profitability, focusing on technology investments and operational efficiency [17][18] - Leadership changes have been made to align teams for better performance, including the appointment of a new President for Physician Staffing [11][12] - The company is reviewing its cost structure, targeting $6 million to $7 million in annualized savings, with $5 million expected to be realized in 2019 [29] Management's Comments on Operating Environment and Future Outlook - Management acknowledges that the turnaround may not be a straight line and emphasizes the need for tighter alignment between business units [18] - The company expects to see normalization in premium rates in the second half of 2019 [44] - Management is optimistic about the potential for growth in the locum tenens market, which is projected to grow at 4% annually [59] Other Important Information - The company ended the quarter with $16 million in cash and $83.9 million in term loans outstanding [40] - Capital expenditures for the quarter were $1.2 million, in line with expectations [42] - The company repurchased 432,000 shares for an aggregate purchase price of $5 million during the full year [42] Q&A Session Summary Question: What is the company's view on expertise or talent acquisition for future success? - Management is focused on developing a cohesive strategic plan and assessing areas for improvement, including potential acquisitions [47][48] Question: How does the company view the locum tenens business? - Management believes the locum tenens business can be turned around by leveraging existing strengths and improving execution [52][54] Question: What are the current trends in the physician staffing market? - The locum tenens market is growing, and management sees opportunities for improvement in execution and leadership [59][60] Question: What is the expected impact of technology investments? - Management plans to invest between $10 million and $12 million in IT infrastructure to enhance operational efficiency [121] Question: Can the company achieve more than the targeted $5 million in cost savings? - There is potential for additional savings beyond the $5 million target as the company centralizes operations and improves productivity [108]