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þ
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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13-4066229
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.0001 per share
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The NASDAQ Stock Market
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Page
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Exhibits, Financial Statement Schedules
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Item 1.
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Business.
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l
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traditional recruiting and staffing of temporary and permanent placement of travel nurses and allied professionals, branch-based local nurses and allied staffing and locum tenens physicians; and
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Item 1A.
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Risk Factors.
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December 31, 2014
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||
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(amounts in thousands)
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||
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Total principal amount of debt
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$
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58,500
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Total Cross Country Healthcare, Inc. stockholders' equity
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$
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129,878
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-
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we may be more vulnerable to general adverse economic and industry conditions;
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-
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we may have to pay higher interest rates upon refinancing or on our variable rate indebtedness if interest rates rise, thereby reducing our cash flows;
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-
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we may find it more difficult to obtain additional financing to fund future working capital, capital expenditures and other general corporate requirements that would be in our long-term
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-
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we may be required to dedicate a substantial portion of our cash flow from operations to the
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-
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we may have limited flexibility in planning for, or reacting to, changes in our business or in the industry;
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-
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we may have a competitive disadvantage relative to other companies in our industry that are
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-
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we may be required to sell debt or equity securities or sell some of our core assets, possibly on
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Item 1B.
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Unresolved Staff Comments.
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Item 2.
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Properties.
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Location
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Function
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Square
Feet
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Lease Expiration
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Boca Raton, Florida
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Headquarters and Nurse and Allied Staffing administration
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70,406
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May 1, 2018
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Boca Raton, Florida
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Staffing administration
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44,675
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December 31, 2015
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Berkeley Lake, Georgia
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Physician Staffing office
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41,607
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October 7, 2024
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Creve Coeur, Missouri
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Retained search headquarters
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27,051
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June 14, 2017
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Malden, Massachusetts
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Nurse and Allied Staffing administration and general office use
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22,767
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June 30, 2017
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Pune, India
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In-house information systems and
development support
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20,700
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November 30, 2015
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Brentwood, Tennessee
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Education and training headquarters
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16,884
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August 31, 2017
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Newtown Square, Pennsylvania
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Nurse and Allied Staffing administration and general office use
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16,304
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December 31, 2018
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Item 3.
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Legal Proceedings.
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Item 4.
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Mine Safety Disclosures.
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Item 5.
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Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
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Sale Prices
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||||||
Calendar Period
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High
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Low
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||||
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2014
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Quarter Ended March 31, 2014
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$
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10.08
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$
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9.65
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Quarter Ended June 30, 2014
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$
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6.78
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$
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6.46
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Quarter Ended September 30, 2014
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$
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7.81
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$
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7.45
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Quarter Ended December 31, 2014
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$
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10.47
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$
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9.96
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2013
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Quarter Ended March 31, 2013
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$
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6.23
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$
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4.86
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Quarter Ended June 30, 2013
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$
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5.60
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$
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4.59
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Quarter Ended September 30, 2013
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$
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6.19
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$
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5.14
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Quarter Ended December 31, 2013
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$
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10.53
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$
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5.55
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Item 6.
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Selected Financial Data.
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Year Ended December 31,
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||||||||||||||||||
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2014
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2013
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2012
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2011
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2010
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(Amounts in thousands, except per share data)
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Consolidated Statements of Operations Data:
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Revenue from services
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$
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617,825
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$
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438,311
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$
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442,635
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$
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439,377
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$
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406,604
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(Loss) income from continuing operations
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(31,534
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)
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(54,250
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)
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(20,745
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)
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1,548
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(5,257
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)
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|||||
Net (loss) income attributable to common shareholders
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(31,783
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)
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(51,969
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)
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(42,221
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)
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4,098
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(2,775
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)
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Per Share Data:
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(Loss) income from continuing operations attributable to common shareholders - Basic
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$
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(1.02
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)
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$
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(1.75
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)
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$
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(0.67
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)
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$
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0.05
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$
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(0.17
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)
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(Loss) income from continuing operations attributable to common shareholders - Diluted
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$
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(1.02
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)
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$
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(1.75
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)
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$
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(0.67
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)
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$
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0.05
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$
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(0.17
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)
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Weighted Average Common Shares Outstanding:
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Basic
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31,190
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31,009
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30,843
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31,146
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31,060
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Diluted
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31,190
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31,009
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30,843
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31,192
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31,060
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Other Operating Data:
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Cash and cash equivalents
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$
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4,995
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$
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8,055
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$
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10,463
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$
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10,648
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$
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10,957
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Total assets
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325,133
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248,245
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305,924
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347,884
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358,359
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|||||
Total debt
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74,074
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8,576
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33,859
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42,046
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53,513
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|||||
Stockholders’ equity
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130,332
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160,667
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209,123
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249,300
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246,009
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|||||
Net cash (used in) provided by operating activities
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(4,072
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)
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8,659
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10,146
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18,296
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31,522
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•
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Loss from continuing operations for the year ended
December 31, 2014
includes amount attributable to noncontrolling interest of $0.2 million.
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•
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On June 30, 2014, the Company acquired substantially all of the assets and certain liabilities of Medical Staffing Network Healthcare, LLC (MSN) and on December 2, 2013, the Company acquired the operating assets of On Assignment, Inc.’s Allied Healthcare Staffing division. The results of MSN and On Assignment's operations have been included in the Company's consolidated statements of operations since their respective dates of acquisition. For the years ended
December 31, 2014
and
2013
, the Company recognized
$8.0 million
and
$0.5 million
of acquisition and integration costs, respectively. See Note 3 - Acquisitions to our consolidated financial statements.
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•
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The years ended
December 31, 2014
and
2013
, include
$0.8 million
and
$0.5 million
, respectively, of restructuring costs primarily related to senior management employee severance pay.
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•
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The year ended December 31, 2013, includes a legal settlement charge of $0.8 million related to a wage and hour class action lawsuit in California. See Note 12 - Commitments and Contingencies to our consolidated financial statements.
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•
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The years ended
December 31, 2014
, 2013, 2012 and 2010, include non-cash impairment charges of approximately $10.0 million, $6.4 million, $18.7 million and $10.8 million, respectively. See Note 5 – Goodwill, Trade Names, and Other Identifiable Intangible Assets to our consolidated financial statements.
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•
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The year ended
December 31, 2014
, includes the impact of a change in fair value of Convertible Notes Derivative liability of approximately
$16.7 million
. Convertible Notes Derivative liability relates to the Convertible Notes issued in conjunction with the acquisition of MSN. See Note 9 - Convertible Notes Derivative Liability to our consolidated financial statements.
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•
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For purposes of calculating diluted earnings per common share in 2014, 2013, 2012 and 2010 potentially dilutive shares are excluded from the calculation as their effect would have been anti-dilutive, due to the Company’s net loss from continuing operations in those years.
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Item 7.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations.
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●
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Nurse and Allied Staffing
– Nurse and Allied Staffing represented approximately
74%
of our total revenue. Nurse and Allied Staffing provides traditional staffing, including temporary and permanent placement of travel nurses and allied professionals, and branch-based local nurses and allied staffing. Our services include the placement of travel and per diem nurse, allied healthcare professionals, such as rehabilitation therapists, radiology technicians, and respiratory therapists. Its clients include: public and private acute care and non-acute care hospitals, government facilities, schools, outpatient clinics, ambulatory care facilities, retailers, and many other healthcare providers throughout the U.S. The Company aggregates various brands that it markets to its customers in this business segment.
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●
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Physician Staffing
– Physician Staffing represented approximately
20%
of our total revenue. Physician Staffing provides physicians in many specialties, certified registered nurse anesthetists (CRNAs), nurse practitioners (NPs) and physician assistants (PAs) under the Company's Medical Doctor Associates (MDA) brand as independent contractors on temporary assignments throughout the U.S. at various healthcare facilities, such as acute and non-acute care facilities, medical group practices, government facilities, and managed care organizations.
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●
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Other Human Capital Management Services
– Other Human Capital Management Services represented approximately
6%
of our total revenue. Other Human Capital Management Services provides education and training programs to the healthcare industry and retained and contingent search services for physicians and healthcare executives within the U.S.
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Business Segment
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Business Measurement
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Nurse and Allied Staffing
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FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.
|
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Average revenue per FTE per day is calculated by dividing the Nurse and Allied Staffing revenue by the number of days worked in the respective periods. Nurse and Allied Staffing revenue also includes revenue from the permanent placement of nurses.
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Physician Staffing
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Days filled is calculated by dividing the total hours filled during the period by 8 hours.
|
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Revenue per day filled is calculated by dividing the actual revenue invoiced (excluding permanent placement fees) by Physician Staffing days filled for the period presented.
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Year Ended December 31,
|
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||||||||
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2014
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|
2013
|
|
Change
|
|
Change
|
||||||
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||||||
Nurse and Allied Staffing statistical data:
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|
||||||
FTEs
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4,751
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|
2,378
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|
|
2,373
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|
|
99.8
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%
|
||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
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264
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|
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$
|
313
|
|
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(49
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)
|
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(15.7
|
)%
|
|
|
|
|
|
|
|
|
||||||
Physician Staffing statistical data:
|
|
|
|
|
|
|
|
||||||
Days filled
|
85,457
|
|
|
90,881
|
|
|
(5,424
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)
|
|
(6.0
|
)%
|
||
Revenue per day filled
|
$
|
1,436
|
|
|
$
|
1,405
|
|
|
31
|
|
|
2.2
|
%
|
|
Year Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Revenue from services
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Direct operating expenses
|
74.5
|
|
|
74.1
|
|
|
74.8
|
|
Selling, general and administrative expenses
|
22.8
|
|
|
24.2
|
|
|
24.7
|
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Bad debt expense
|
0.2
|
|
|
0.2
|
|
|
0.2
|
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Depreciation and amortization
|
1.2
|
|
|
1.4
|
|
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1.6
|
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Acquisition and integration costs
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1.3
|
|
|
0.1
|
|
|
—
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Restructuring costs
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0.1
|
|
|
0.1
|
|
|
—
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Legal settlement charge
|
—
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0.2
|
|
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—
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Impairment charges
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1.6
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|
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1.5
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4.2
|
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Loss from operations
|
(1.7
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)
|
|
(1.8
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)
|
|
(5.5
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)
|
Interest expense
|
0.7
|
|
|
0.2
|
|
|
0.6
|
|
Change in fair value of convertible note derivative liability
|
2.7
|
|
|
—
|
|
|
—
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Loss on early extinguishment and modification of debt
|
—
|
|
|
0.3
|
|
|
—
|
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Loss from continuing operations before income taxes
|
(5.1
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)
|
|
(2.3
|
)
|
|
(6.1
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)
|
Income (benefit) tax expense
|
—
|
|
|
10.1
|
|
|
(1.4
|
)
|
Loss from continuing operations
|
(5.1
|
)
|
|
(12.4
|
)
|
|
(4.7
|
)
|
Income (Loss) from discontinued operations, net of tax
|
—
|
|
|
0.5
|
|
|
(4.8
|
)
|
Consolidated net loss
|
(5.1
|
)
|
|
(11.9
|
)
|
|
(9.5
|
)
|
Less: Net income attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
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|
|
—
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Net loss attributable to common shareholders
|
(5.1
|
)%
|
|
(11.9
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)%
|
|
(9.5
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)%
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013 (a)
|
|
2012 (a)
|
||||||
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(Amounts in thousands)
|
||||||||||
Revenue from services:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing
|
$
|
457,034
|
|
|
$
|
271,563
|
|
|
$
|
272,136
|
|
Physician Staffing
|
123,306
|
|
|
128,781
|
|
|
129,162
|
|
|||
Other Human Capital Management Services
|
37,485
|
|
|
37,967
|
|
|
41,337
|
|
|||
|
$
|
617,825
|
|
|
$
|
438,311
|
|
|
$
|
442,635
|
|
|
|
|
|
|
|
||||||
Contribution income: (b)
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing (a)
|
$
|
36,326
|
|
|
$
|
18,424
|
|
|
$
|
10,277
|
|
Physician Staffing
|
6,700
|
|
|
8,939
|
|
|
10,863
|
|
|||
Other Human Capital Management Services
|
514
|
|
|
746
|
|
|
1,943
|
|
|||
|
43,540
|
|
|
28,109
|
|
|
23,083
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead (a)
|
27,770
|
|
|
21,844
|
|
|
21,701
|
|
|||
Depreciation
|
3,866
|
|
|
3,886
|
|
|
4,905
|
|
|||
Amortization
|
3,575
|
|
|
2,294
|
|
|
2,263
|
|
|||
Acquisition and integration costs (c)
|
7,957
|
|
|
473
|
|
|
—
|
|
|||
Restructuring costs
|
840
|
|
|
484
|
|
|
—
|
|
|||
Legal settlement charge
|
—
|
|
|
750
|
|
|
—
|
|
|||
Impairment charges (c)
|
10,000
|
|
|
6,400
|
|
|
18,732
|
|
|||
Loss from operations
|
$
|
(10,468
|
)
|
|
$
|
(8,022
|
)
|
|
$
|
(24,518
|
)
|
(a)
|
In 2014, the Company reclassified the revenue and contribution income of certain higher level staffing professionals previously included with Nurse and Allied Staffing to Physician Staffing. In addition, in 2014, we refined our methodology for allocating certain corporate overhead expenses to our Nurse and Allied Staffing segment to more accurately reflect this segment’s profitability. Prior year information has been reclassified to conform to current year presentation.
|
(b)
|
We define contribution income as loss from operations before depreciation, amortization, acquisition and integration costs, restructuring costs, legal settlement charges, impairment charges, and other corporate expenses not specifically identified to a reporting segment. Contribution income is a measure used by management to assess operations and is provided in accordance with ASC 280,
Segment Reporting
.
|
(c)
|
During 2014, we incurred acquisition and integration costs related to our MSN acquisition and the acquired allied healthcare staffing business. See Note 3 - Acquisitions to the consolidated financial statements. In addition, during 2014, 2013, and 2012 we recognized impairment charges in related to our Physician Staffing and Nurse and Allied segments. See Note 5 - Goodwill, Trade Names, and Other Identifiable Intangible Assets.
|
Commitments
|
|
Total
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
Thereafter
|
||||||||||||||
|
|
(Unaudited, amounts in thousands)
|
||||||||||||||||||||||||||
Senior Secured Asset Based Loan (a)
|
|
$
|
3,500
|
|
|
$
|
3,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Second Lien Term Loan
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|||||||
Convertible Notes
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|||||||
Capital lease obligations
|
|
202
|
|
|
107
|
|
|
72
|
|
|
13
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|||||||
Operating lease obligations (b)
|
|
20,912
|
|
|
7,202
|
|
|
5,581
|
|
|
3,884
|
|
|
1,613
|
|
|
486
|
|
|
2,146
|
|
|||||||
|
|
$
|
79,614
|
|
|
$
|
10,809
|
|
|
$
|
5,653
|
|
|
$
|
3,897
|
|
|
$
|
1,621
|
|
|
$
|
30,488
|
|
|
$
|
27,146
|
|
(a)
|
Under our Senior Secured Asset-Based Loan and Second Lien Term Loan, we are required to comply with certain financial covenants. Our inability to comply with the required covenants or other provisions could result in default under our credit facility. In the event of any such default and our inability to obtain a waiver of the default, all amounts outstanding under the credit facility could be declared immediately due and payable.
|
(b)
|
Represents future minimum lease payments associated with operating lease agreements with original terms of more than one year. See Note 12 - Commitments and Contingencies to our consolidated financial statements.
|
•
|
We have also entered into certain contracts with acute care facilities to provide comprehensive managed service programs (MSP) solutions. Under these contract arrangements, we use our nurses primarily, along with those of third party subcontractors, to fulfill customer orders. If a subcontractor is used, we invoice our customer for these services, but revenue is recorded at the time of billing, net of any related subcontractor liability. The resulting net revenue represents the administrative fee charged by us for our MSP services.
|
•
|
Revenue from our physician staffing and education and training businesses is recognized on a gross basis as we believe we are the principal in the arrangements.
|
Item 7A.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 8.
|
Financial Statements and Supplementary Data.
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
|
Item 9A.
|
Controls and Procedures.
|
1.
|
We have expanded the Company’s complement of qualified finance, accounting and tax personnel. Specific personnel changes made within the leadership team within these areas included the appointment of the following positions:
|
•
|
New Chief Financial Officer in April 2014,
|
•
|
New Vice President, Corporate Controller in December 2014, and
|
•
|
New Vice President, Tax in December 2014
|
2.
|
We have increased our reliance on third party experts for the review of significant non-routine accounting transactions or matters, such as:
|
•
|
Goodwill and other indefinite-lived intangible assets - Valuation experts were engaged to review the Company’s impairment models, to challenge the assumptions utilized, and to perform the impairment test if there was an indicator of impairment.
|
•
|
Income taxes - Tax experts were engaged to assist management in its review of the income tax provision workpapers, review the tax treatment of the MSN acquisition, and review several key income tax returns.
|
•
|
Other significant non-routine accounting matters - Accounting experts were engaged to assist management in reviewing and evaluating the accounting implications of technical accounting matters including the
|
3.
|
We have implemented process improvements that permit more effective and efficient management of the accounting and financial reporting processes, including those related to non-routine transactions, such as:
|
•
|
Annual impairment testing - We changed our annual impairment test date to October 1st, which allows adequate time for management review as well as better alignment with the annual budget process. We improved the overall quality of the documentation surrounding managements’ assumptions utilized within the impairment models. Finally, we shifted the responsibility for the preparation of the analysis away from the Chief Financial Officer so that it could be reviewed initially by the Vice President, Corporate Controller and then by the Chief Financial Officer as the Company’s final reviewer.
|
•
|
Tax account reconciliations - We undertook steps to improve the overall quality of our deferred tax accounts analysis. Additional procedures were implemented in which we employed a more granular approach to calculate our deferred taxes that considered the location, timing, legal entities, jurisdictions, and the nature of the taxes. These steps improved the quality of the current deferred and long-term deferred tax and provided a reliable base of calculation for the deferred tax asset valuation allowance.
|
|
/s/ Ernst & Young LLP
|
|
Certified Public Accountants
|
Boca Raton, Florida
|
|
March 6, 2015
|
|
Item 9B.
|
Other Information.
|
Item 10.
|
Directors, Executive Officers and Corporate Governance.
|
Item 11.
|
Executive Compensation.
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholders Matters.
|
Plan Category
|
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights (a)
|
|
Weighted-average
exercise price of
outstanding options,
warrants and
rights (b)
|
|
Number of securities
remaining available for
future issuance under
equity compensation
plans (excluding
securities reflected in
column (a)) (c)
|
||||
Equity compensation plans approved by
security holders
|
935,095
|
|
|
$
|
8.27
|
|
|
1,205,908
|
|
Equity compensation plans not approved by
security holders
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
935,095
|
|
|
$
|
8.27
|
|
|
1,205,908
|
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence.
|
Item 14.
|
Principal Accountant Fees and Services.
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
CROSS COUNTRY HEALTHCARE, INC.
|
|
|
|
|
|
By:
|
/s/ William J. Grubbs
|
|
|
Name: William J. Grubbs
|
|
|
Title: Chief Executive Officer and President
|
|
|
Date: March 6, 2015
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/s/ William J. Grubbs
|
|
President, Chief Executive Officer,
|
|
March 6, 2015
|
William J. Grubbs
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ William J. Burns
|
|
Chief Financial Officer
|
|
March 6, 2015
|
William J. Burns
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
|
|
|
/s/ Thomas C. Dircks
|
|
Director
|
|
March 6, 2015
|
Thomas C. Dircks
|
|
|
|
|
|
|
|
|
|
/s/ W. Larry Cash
|
|
Director
|
|
March 6, 2015
|
W. Larry Cash
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Mastaler
|
|
Director
|
|
March 6, 2015
|
Richard M. Mastaler
|
|
|
|
|
|
|
|
|
|
/s/ Gale Fitzgerald
|
|
Director
|
|
March 6, 2015
|
Gale Fitzgerald
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Trunfio
|
|
Director
|
|
March 6, 2015
|
Joseph A. Trunfio
|
|
|
|
|
No.
|
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A, Commission File No. 333-64914, and incorporated by reference herein.)
|
3.2
|
|
Amended and Restated By-laws of the Registrant (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A, Commission File No. 333-64914, and incorporated by reference herein.)
|
4.1
|
|
Form of specimen common stock certificate (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A, Commission File No. 333-64914, and incorporated by reference herein.)
|
4.2 #
|
|
2014 Omnibus Incentive Plan - Restricted Stock Agreement Form (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2014 and incorporated by reference herein.)
|
4.3 #
|
|
2014 Omnibus Incentive Plan - Performance Share and Restricted Stock Agreement Form (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2014 and incorporated by reference herein.)
|
4.4
|
|
Registration Rights Agreement, dated June 30, 2014, by and among Cross Country Healthcare, Inc. and the noteholders party thereto (Previously filed as an exhibit to the Company’s Form 8-K dated July 2, 2014 and incorporated by reference herein.)
|
10.1 #
|
|
Employment Agreement, dated as of March 20, 2013, between William J. Grubbs and the Registrant (Previously filed as an exhibit to the Company’s Form 8-K dated March 22, 2013 and incorporated by reference herein.)
|
10.2 #
|
|
Cross Country, Inc. Deferred Compensation Plan (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2002, and incorporated by reference herein.)
|
10.3 #
|
|
Form of Incentive Stock Option Agreement (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1, Commission File No. 333-74403, and incorporated by reference herein.)
|
10.4
|
|
Lease Agreement between Cornerstone Opportunity Ventures, LLC and Cejka Search, Inc., dated February 2, 2007 (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.)
|
10.5
|
|
Lease Agreement between Self Service Mini Storage, L.P. and Cross Country Education, LLC, dated February 2, 2007 (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.)
|
10.6
|
|
Second Amendment to Lease Agreement by and between Meridian Commercial Properties Limited Partnership and Cross Country Healthcare, Inc., dated February 17, 2007 (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.)
|
10.7
|
|
First Amendment to Lease Agreement dated as of September 1, 2007, by and between Cornerstone Opportunity Ventures, LLC and Cejka Search, Inc. (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2008 and incorporated by reference herein.)
|
10.8 #
|
|
Form of Non-Employee Directors’ Restricted Stock Agreement under Cross Country Healthcare, Inc. 2007 Stock Incentive Plan (Previously filed as an exhibit to the Company’s 8-K dated May 15, 2007 and incorporated by reference herein.)
|
10.9 #
|
|
Form of Stock Appreciation Rights Agreement under Cross Country Healthcare, Inc. 2007 Stock Incentive Plan (Previously filed as an exhibit to the Company’s Form 8-K dated October 15, 2007 and incorporated by reference herein.)
|
10.10 #
|
|
Amended and Restated Executive Severance Policy of Cross Country Healthcare, Inc. dated as of January 1, 2008 (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2008 and incorporated by reference herein.)
|
10.11
|
|
Lease Agreement, dated July 1, 2010, between Goldberg Brothers Real Estate LLC and MCVT, Inc. (Previously filed as an incorporated by reference herein.)
|
10.12
|
|
Leave and License Agreement dated October 15, 2010 between Cross Country InfoTech, Ltd. and Shri Subhash Dattatraya Angal (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2010 and incorporated by reference herein.)
|
10.13
|
|
Lease Agreement, dated July 18, 2013, between Peachtree II and III, LLC and MDA Holdings, Inc. (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2013 and incorporated by reference herein.)
|
10.14 #
|
|
Amended and Restated Executive Severance Plan of Cross Country Healthcare, Inc. (Previously filed as an exhibit to the Company’s Form 8-K dated May 28, 2010 and incorporated by reference herein.)
|
No.
|
|
Description
|
10.15
|
|
First Amendment to Lease Agreement, dated April 22, 2011, between Self Service Mini Storage, L.P. and Cross Country Education, LLC, dated February 2, 2007 (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2011 and incorporated by reference herein.)
|
10.16
|
|
Loan and Security Agreement, dated January 9, 2013, by and among Cross Country Healthcare, Inc. and certain of its subsidiaries, as Borrowers, the Lenders referenced therein, and Bank of America, N.A., as Agent (Previously filed as an exhibit to the Company’s Form 8-K dated January 11, 2013 and incorporated by reference herein.)
|
10.17
|
|
Consent, Waiver and Third Amendment, dated as of June 30, 2014, to Loan and Security Agreement dated January 9, 2013, by and among Cross Country Healthcare, Inc. and certain of its subsidiaries, as Borrowers, the Lenders referenced therein, and Bank of America, N.A., as Agent (Previously filed as an exhibit to the Company’s Form 8-K dated July 2, 2014 and incorporated by reference herein.)
|
10.18
|
|
Stock Purchase Agreement, dated February 2, 2013, by and among ICON Clinical Research, Inc. and ICON Clinical Research UK Limited, as Buyers, and Cross Country Healthcare, Inc., Local Staff, LLC and Cross Country Healthcare UK Holdco Ltd., as Sellers (Previously filed as an exhibit to the Company’s Form 8-K dated February 5, 2013 and incorporated by reference herein.)
|
10.19
|
|
Asset Purchase Agreement, dated December 2, 2013, between Local Staff, LLC, as Buyer, Cross Country Healthcare, Inc., as Parent and On Assignment Staffing Services, Inc., Assignment Ready, Inc., and On Assignment, Inc., collectively as Seller (Previously filed as an exhibit to the Company’s Form 8-K dated December 3, 2013 and incorporated by reference herein.)
|
10.20 #
|
|
Employment Agreement, dated March 3, 2014, between William Burns and Cross Country Healthcare, Inc. (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2013 and incorporated by reference herein.)
|
10.21
|
|
Asset Purchase Agreement, dated June 2, 2014, by and among Cross Country Healthcare, Inc., as Purchaser, and MSN Holdco, LLC, MSN Holding Company Inc., Medical Staffing Network Healthcare, LLC and Optimal Workforce Solutions, LLC, as Seller (Previously filed as an exhibit to the Company’s Form 8-K dated June 3, 2014 and incorporated by reference herein.)
|
10.22
|
|
Second Lien Loan and Security Agreement, dated June 30, 2014, by and among Cross Country Healthcare, Inc., as borrower, certain of its domestic subsidiaries, as guarantors, and BSP Agency, LLC, as agent (Previously filed as an exhibit to the Company’s Form 8-K dated July 2, 2014 and incorporated by reference herein.)
|
10.23
|
|
Convertible Note Purchase Agreement, dated as of June 30, 2014, by and among Cross Country Healthcare, Inc. and certain of its domestic subsidiaries and Benefit Street Partners SMA LM L.P., PECM Strategic Funding L.P. and Providence Debt Fund III L.P. and other noteholders defined therein (Previously filed as an exhibit to the Company’s Form 8-K dated July 2, 2014 and incorporated by reference herein.)
|
10.24
|
|
Fourth Amendment, dated as of October 20, 2014, to Loan and Security Agreement dated January 9, 2013, by and among Cross Country Healthcare, Inc. and certain of its subsidiaries, as Borrowers, the Lenders referenced therein, and Bank of America, N.A., as Agent (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2014 and incorporated by reference herein.)
|
10.25 #
|
|
Transition Agreement, dated March 3, 2014, between Emil Hensel and the Registrant (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2013 and incorporated by reference herein.)
|
*10.26
|
|
Lease Agreement, dated November 22, 1999, by and between Fairfax Boca 92, L.P. and Medical Staffing Network, Inc.
|
*10.27
|
|
First Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated July 31, 2001
|
*10.28
|
|
Second Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated March 20, 2002
|
*10.29
|
|
Third Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated May 14, 2002
|
*10.30
|
|
Fourth Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated December 13, 2002
|
*10.31
|
|
Fifth Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated February 11, 2003
|
*10.32
|
|
Six Amendment to Lease Agreement by and between Teachers Insurance and Annuity Association of America and Medical Staffing Network, LLC, dated January 3, 2011
|
*10.33
|
|
Seventh Amendment to Lease Agreement by and between Teachers Insurance and Annuity Association of America and Medical Staffing Network, LLC, dated March 1, 2011
|
No.
|
|
Description
|
*10.34
|
|
Eighth Amendment to Lease Agreement by and between Teachers Insurance and Annuity Association of America, and Medical Staffing Network, LLC, dated November 22, 2011
|
14.1
|
|
Code of Ethics (Previously filed as exhibits in the Company’s Form 10-K for the year ended December 31, 2004 and incorporated by reference herein.)
|
18.1
|
|
Letter re Change in Accounting Principles (Previously filed as exhibit to the Company's Form 10-Q for the quarter ended September 30, 2014 and incorporated by reference herein.)
|
*21.1
|
|
List of subsidiaries of the Registrant
|
*23.1
|
|
Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm
|
*31.1
|
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by William J. Grubbs, President and Chief Executive Officer
|
*31.2
|
|
Certification Pursuant to Rule 13a-14(a)/15d-14(a) and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by William J. Burns, Chief Financial Officer
|
*32.1
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by William J. Grubbs, Chief Executive Officer
|
*32.2
|
|
Certification Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by William J. Burns, Chief Financial Officer
|
**101.INS
|
|
XBRL Instance Document
|
**101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
**101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
**101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
**101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
**101.PRE
|
|
PRE XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Page
|
Cross Country Healthcare, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Statement Schedule
|
|
|
|
|
/s/ Ernst & Young LLP
|
|
Certified Public Accountants
|
Boca Raton, Florida
|
|
March 6, 2015
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,995
|
|
|
$
|
8,055
|
|
Accounts receivable, less allowance for doubtful accounts
of $1,425 and $1,651 at December 31, 2014 and 2013, respectively |
113,129
|
|
|
60,750
|
|
||
Income taxes receivable
|
307
|
|
|
538
|
|
||
Prepaid expenses
|
6,073
|
|
|
6,163
|
|
||
Insurance recovery receivable
|
5,624
|
|
|
3,886
|
|
||
Indemnity escrow receivable
|
—
|
|
|
3,750
|
|
||
Other current assets
|
1,055
|
|
|
793
|
|
||
Total current assets
|
131,183
|
|
|
83,935
|
|
||
Property and equipment, net of accumulated depreciation
|
12,133
|
|
|
6,170
|
|
||
Trade Names, net
|
38,201
|
|
|
42,301
|
|
||
Goodwill
|
90,647
|
|
|
77,266
|
|
||
Other identifiable intangible assets, net
|
33,823
|
|
|
26,198
|
|
||
Debt issuance costs, net of accumulated amortization of $522 and $222 at December 31, 2014 and 2013, respectively
|
1,257
|
|
|
464
|
|
||
Non-current insurance recovery receivable
|
16,825
|
|
|
10,914
|
|
||
Non-current security deposits
|
1,064
|
|
|
997
|
|
||
Total assets
|
$
|
325,133
|
|
|
$
|
248,245
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
27,314
|
|
|
$
|
10,272
|
|
Accrued compensation and benefits
|
28,731
|
|
|
19,148
|
|
||
Current portion of long-term debt and capital lease obligations
|
3,607
|
|
|
8,483
|
|
||
Sales tax payable
|
2,573
|
|
|
2,404
|
|
||
Deferred tax liabilities
|
1,981
|
|
|
535
|
|
||
Other current liabilities
|
2,790
|
|
|
4,063
|
|
||
Total current liabilities
|
66,996
|
|
|
44,905
|
|
||
Long-term debt and capital lease obligations, less current portion
|
70,467
|
|
|
93
|
|
||
Non-current deferred tax liabilities
|
18,038
|
|
|
16,849
|
|
||
Long-term accrued claims
|
32,068
|
|
|
18,303
|
|
||
Long-term deferred purchase price
|
2,333
|
|
|
—
|
|
||
Long-term unrecognized tax benefits
|
889
|
|
|
4,013
|
|
||
Other long-term liabilities
|
4,010
|
|
|
3,415
|
|
||
Total liabilities
|
194,801
|
|
|
87,578
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock—$0.0001 par value; 100,000,000 shares authorized; 31,292,596 and 31,085,289 shares issued and outstanding at December 31, 2014 and 2013, respectively
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
247,467
|
|
|
246,325
|
|
||
Accumulated other comprehensive loss
|
(1,118
|
)
|
|
(970
|
)
|
||
Accumulated deficit
|
(116,474
|
)
|
|
(84,691
|
)
|
||
Total Cross Country Healthcare, Inc. stockholders' equity
|
129,878
|
|
|
160,667
|
|
||
Noncontrolling interest
|
454
|
|
|
—
|
|
||
Total stockholders' equity
|
130,332
|
|
|
160,667
|
|
||
Total liabilities and stockholders' equity
|
$
|
325,133
|
|
|
$
|
248,245
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Revenue from services
|
$
|
617,825
|
|
|
$
|
438,311
|
|
|
$
|
442,635
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Direct operating expenses
|
460,021
|
|
|
324,851
|
|
|
331,050
|
|
|||
Selling, general and administrative expenses
|
141,018
|
|
|
106,117
|
|
|
109,417
|
|
|||
Bad debt expense
|
1,016
|
|
|
1,078
|
|
|
786
|
|
|||
Depreciation
|
3,866
|
|
|
3,886
|
|
|
4,905
|
|
|||
Amortization
|
3,575
|
|
|
2,294
|
|
|
2,263
|
|
|||
Acquisition and integration costs
|
7,957
|
|
|
473
|
|
|
—
|
|
|||
Restructuring costs
|
840
|
|
|
484
|
|
|
—
|
|
|||
Legal settlement charge
|
—
|
|
|
750
|
|
|
—
|
|
|||
Impairment charges
|
10,000
|
|
|
6,400
|
|
|
18,732
|
|
|||
Total operating expenses
|
628,293
|
|
|
446,333
|
|
|
467,153
|
|
|||
|
|
|
|
|
|
||||||
Loss from operations
|
(10,468
|
)
|
|
(8,022
|
)
|
|
(24,518
|
)
|
|||
|
|
|
|
|
|
||||||
Other expenses (income):
|
|
|
|
|
|
||||||
Foreign exchange loss (gain)
|
49
|
|
|
(132
|
)
|
|
(62
|
)
|
|||
Interest expense
|
4,160
|
|
|
849
|
|
|
2,341
|
|
|||
Change in fair value of convertible notes derivative liability
|
16,671
|
|
|
—
|
|
|
—
|
|
|||
Loss on early extinguishment and modification of debt
|
—
|
|
|
1,419
|
|
|
82
|
|
|||
Other (income) expense, net
|
(30
|
)
|
|
(119
|
)
|
|
16
|
|
|||
Loss from continuing operations before income taxes
|
(31,318
|
)
|
|
(10,039
|
)
|
|
(26,895
|
)
|
|||
Income tax expense (benefit)
|
216
|
|
|
44,211
|
|
|
(6,150
|
)
|
|||
Loss from continuing operations
|
(31,534
|
)
|
|
(54,250
|
)
|
|
(20,745
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
2,281
|
|
|
(21,476
|
)
|
|||
Consolidated net loss
|
(31,534
|
)
|
|
(51,969
|
)
|
|
(42,221
|
)
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
249
|
|
|
—
|
|
|
—
|
|
|||
Net loss attributable to common shareholders
|
$
|
(31,783
|
)
|
|
$
|
(51,969
|
)
|
|
$
|
(42,221
|
)
|
|
|
|
|
|
|
||||||
Basic (loss) income per share attributable to common shareholders
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(1.02
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
Discontinued operations
|
—
|
|
|
0.07
|
|
|
(0.70
|
)
|
|||
Net loss
|
$
|
(1.02
|
)
|
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
|
|
|
|
|
||||||
Diluted (loss) income per share attributable to common shareholders
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(1.02
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
Discontinued operations
|
—
|
|
|
0.07
|
|
|
(0.70
|
)
|
|||
Net loss
|
$
|
(1.02
|
)
|
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding—basic
|
31,190
|
|
|
31,009
|
|
|
30,843
|
|
|||
|
|
|
|
|
|
||||||
Weighted average common shares outstanding—diluted
|
31,190
|
|
|
31,009
|
|
|
30,843
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
|
|
|
|
|
||||||
Consolidated net loss
|
$
|
(31,534
|
)
|
|
$
|
(51,969
|
)
|
|
$
|
(42,221
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income, before income taxes:
|
|
|
|
|
|
|
|
|
|||
Unrealized foreign currency translation gain (loss)
|
14
|
|
|
(386
|
)
|
|
268
|
|
|||
Reclassification of currency translation adjustments
related to sale of clinical trial services business (See Note 2 - Summary of Significant Accounting Policies)
|
—
|
|
|
2,336
|
|
|
—
|
|
|||
Write-down of marketable securities
|
—
|
|
|
—
|
|
|
38
|
|
|||
Net change in fair value of marketable securities
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||
Other comprehensive income, before income taxes
|
14
|
|
|
1,950
|
|
|
305
|
|
|||
|
|
|
|
|
|
||||||
Income tax expense (benefit) related to
items of other comprehensive income |
162
|
|
|
(162
|
)
|
|
15
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, net of tax
|
(148
|
)
|
|
2,112
|
|
|
290
|
|
|||
Consolidated comprehensive loss
|
(31,682
|
)
|
|
(49,857
|
)
|
|
(41,931
|
)
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
249
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive loss attributable to common shareholders
|
$
|
(31,931
|
)
|
|
$
|
(49,857
|
)
|
|
$
|
(41,931
|
)
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated Other Total
Comprehensive Loss, net |
|
(Accumulated Deficit) Retained Earnings
|
|
Noncontrolling Interest in Subsidiary
|
|
Stockholders’ Equity
|
|||||||||||||||
Shares
|
|
Dollars
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 2011
|
30,812
|
|
|
$
|
3
|
|
|
$
|
243,171
|
|
|
$
|
(3,373
|
)
|
|
$
|
9,499
|
|
|
—
|
|
|
$
|
249,300
|
|
|
Vesting of restricted stock
|
162
|
|
|
—
|
|
|
(153
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(153
|
)
|
||||||
Tax deficit of share-based compensation
|
—
|
|
|
—
|
|
|
(314
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(314
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,594
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,594
|
|
||||||
Stock repurchase and retirement
|
(72
|
)
|
|
—
|
|
|
(374
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(374
|
)
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
268
|
|
|
—
|
|
|
—
|
|
|
268
|
|
||||||
Net change in fair value of marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
23
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42,221
|
)
|
|
—
|
|
|
(42,221
|
)
|
||||||
Balances at December 31, 2012
|
30,902
|
|
|
3
|
|
|
244,924
|
|
|
(3,082
|
)
|
|
(32,722
|
)
|
|
—
|
|
|
209,123
|
|
||||||
Exercise of stock options
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock
|
181
|
|
|
—
|
|
|
(300
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(300
|
)
|
||||||
Tax deficit of share-based compensation
|
—
|
|
|
—
|
|
|
(399
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(399
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,100
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,100
|
|
||||||
Foreign currency translation adjustment, net of deferred taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(224
|
)
|
|
—
|
|
|
—
|
|
|
(224
|
)
|
||||||
Reclassification of currency translation adjustments related to sale of clinical trial services business
|
—
|
|
|
—
|
|
|
—
|
|
|
2,336
|
|
|
—
|
|
|
—
|
|
|
2,336
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(51,969
|
)
|
|
—
|
|
|
(51,969
|
)
|
||||||
Balances at December 31, 2013
|
31,085
|
|
|
3
|
|
|
246,325
|
|
|
(970
|
)
|
|
(84,691
|
)
|
|
—
|
|
|
160,667
|
|
||||||
Exercise of stock options
|
66
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock
|
141
|
|
|
—
|
|
|
(245
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(245
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
1,387
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,387
|
|
||||||
Foreign currency translation adjustment, net of deferred taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
(148
|
)
|
||||||
Acquisition of InteliStaf of Oklahoma, LLC
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
324
|
|
|
324
|
|
||||||
Distribution to noncontrolling shareholder
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(119
|
)
|
|
(119
|
)
|
||||||
Net (loss) income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31,783
|
)
|
|
249
|
|
|
(31,534
|
)
|
||||||
Balances at December 31, 2014
|
31,292
|
|
|
$
|
3
|
|
|
$
|
247,467
|
|
|
$
|
(1,118
|
)
|
|
$
|
(116,474
|
)
|
|
$
|
454
|
|
|
$
|
130,332
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Consolidated net loss
|
$
|
(31,534
|
)
|
|
$
|
(51,969
|
)
|
|
$
|
(42,221
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Bad debt expense
|
1,016
|
|
|
1,083
|
|
|
871
|
|
|||
Depreciation
|
3,866
|
|
|
3,886
|
|
|
5,566
|
|
|||
Amortization
|
3,575
|
|
|
2,294
|
|
|
3,382
|
|
|||
Amortization of debt discount and debt issuance costs
|
1,064
|
|
|
233
|
|
|
606
|
|
|||
Impairment charges
|
10,000
|
|
|
6,400
|
|
|
54,132
|
|
|||
Loss on early extinguishment and modification of debt
|
—
|
|
|
1,419
|
|
|
82
|
|
|||
Deferred income tax (benefit) expense
|
(857
|
)
|
|
45,900
|
|
|
(18,520
|
)
|
|||
Change in fair value of convertible note derivatives liability
|
16,671
|
|
|
—
|
|
|
—
|
|
|||
Equity compensation
|
1,387
|
|
|
2,100
|
|
|
2,594
|
|
|||
Gain on sale of clinical trial services business
|
—
|
|
|
(3,969
|
)
|
|
—
|
|
|||
Other noncash costs
|
114
|
|
|
12
|
|
|
822
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(16,119
|
)
|
|
2,036
|
|
|
(4,256
|
)
|
|||
Prepaid expenses and other assets
|
1,371
|
|
|
(1,848
|
)
|
|
(444
|
)
|
|||
Income taxes
|
58
|
|
|
(138
|
)
|
|
1,748
|
|
|||
Accounts payable and accrued expenses
|
5,654
|
|
|
(320
|
)
|
|
4,128
|
|
|||
Other liabilities
|
(338
|
)
|
|
1,540
|
|
|
1,656
|
|
|||
Net cash (used in) provided by operating activities
|
(4,072
|
)
|
|
8,659
|
|
|
10,146
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of business segment, net of cash sold and transaction costs
|
3,750
|
|
|
45,655
|
|
|
—
|
|
|||
Acquisition of assets of Medical Staffing Network, net of cash acquired
|
(44,631
|
)
|
|
—
|
|
|
—
|
|
|||
Acquisition of assets of On Assignment, Inc.
|
—
|
|
|
(28,700
|
)
|
|
—
|
|
|||
Purchases of property and equipment
|
(4,571
|
)
|
|
(1,750
|
)
|
|
(2,219
|
)
|
|||
Liquidation of foreign cash investments
|
—
|
|
|
—
|
|
|
2,652
|
|
|||
Other investing activities
|
—
|
|
|
—
|
|
|
(258
|
)
|
|||
Net cash (used in) provided by investing activities
|
(45,452
|
)
|
|
15,205
|
|
|
175
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Debt issuance costs
|
(1,093
|
)
|
|
(506
|
)
|
|
(1,377
|
)
|
|||
Repurchase of stock for tax withholdings
|
(245
|
)
|
|
(300
|
)
|
|
(153
|
)
|
|||
Stock repurchase and retirement
|
—
|
|
|
—
|
|
|
(374
|
)
|
|||
Cash payment to noncontrolling shareholder
|
(119
|
)
|
|
—
|
|
|
—
|
|
|||
Proceeds from borrowing on Second Lien Term Loan
|
28,875
|
|
|
—
|
|
|
25,000
|
|
|||
Principal payments on term loan
|
—
|
|
|
(23,125
|
)
|
|
(43,326
|
)
|
|||
Proceeds from borrowing on Convertible Notes
|
24,063
|
|
|
—
|
|
|
—
|
|
|||
Borrowings under revolving credit facility
|
—
|
|
|
—
|
|
|
26,900
|
|
|||
Repayments on revolving credit facility
|
—
|
|
|
(10,000
|
)
|
|
(16,900
|
)
|
|||
Borrowings under Senior Secured Asset-Based revolving credit facility
|
61,205
|
|
|
63,444
|
|
|
—
|
|
|||
Repayments on Senior Secured Asset-Based revolving credit facility
|
(66,105
|
)
|
|
(55,044
|
)
|
|
—
|
|
|||
Repayments of capital lease obligations and note payable
|
(122
|
)
|
|
(530
|
)
|
|
(353
|
)
|
|||
Net cash provided by (used in) financing activities
|
46,459
|
|
|
(26,061
|
)
|
|
(10,583
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
5
|
|
|
(211
|
)
|
|
77
|
|
|||
Net decrease in cash and cash equivalents
|
(3,060
|
)
|
|
(2,408
|
)
|
|
(185
|
)
|
|||
Cash and cash equivalents at beginning of year
|
8,055
|
|
|
10,463
|
|
|
10,648
|
|
|||
Cash and cash equivalents at end of year
|
$
|
4,995
|
|
|
$
|
8,055
|
|
|
$
|
10,463
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of noncash investing and financing activities:
|
|
|
|
|
|
|
|
|
|||
Equipment purchased through capital lease obligations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
302
|
|
Insurance premium financing
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
190
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
2,512
|
|
|
$
|
622
|
|
|
$
|
1,467
|
|
Income taxes paid
|
$
|
1,374
|
|
|
$
|
1,164
|
|
|
$
|
1,682
|
|
Income tax refunds
|
$
|
(61
|
)
|
|
$
|
(323
|
)
|
|
$
|
(564
|
)
|
•
|
The subcontractor is the primary obligor in the arrangement and is responsible for fulfillment.
|
•
|
The amount the Company earns is fixed, typically a stated percentage of the amount billed to the customer.
|
•
|
The subcontractor bears the credit risk, not the Company.
|
•
|
The Company maintains the direct contractual relationship with the customer.
|
•
|
The Company performs part of the service by credentialing all of the providers and providing them with professional liability insurance.
|
•
|
The Company establishes the price for its services.
|
•
|
The Company bears the risk and rewards of the transaction including credit risk if the customer fails to pay for services performed.
|
•
|
The Company bears the risk and rewards of the transaction including credit risk if the customer fails to pay for services performed.
|
•
|
The Company performs part of the service by being involved with the program development and handling accreditation of the courses.
|
•
|
The Company establishes the price for its service.
|
|
(amounts in thousands)
|
||
Other current assets
|
$
|
62
|
|
Property and equipment
|
161
|
|
|
Goodwill
|
14,554
|
|
|
Other intangible assets
|
14,000
|
|
|
Other assets
|
52
|
|
|
Total assets acquired
|
28,829
|
|
|
|
|
||
Accrued employee compensation and benefits
|
112
|
|
|
Total liabilities assumed
|
112
|
|
|
|
|
||
Net assets acquired
|
$
|
28,717
|
|
|
Year Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(unaudited, amounts in thousands except per share data)
|
||||||
|
|
|
|
||||
Revenue from services
|
$
|
739,895
|
|
|
$
|
705,477
|
|
|
|
|
|
||||
Net loss attributable to common shareholders
|
$
|
(29,797
|
)
|
|
$
|
(66,232
|
)
|
|
|
|
|
||||
Net loss per common share attributable to common shareholders - basic
|
$
|
(0.96
|
)
|
|
$
|
(2.14
|
)
|
|
|
|
|
||||
Net loss per common share attributable to common shareholders - diluted
|
$
|
(0.96
|
)
|
|
$
|
(2.14
|
)
|
|
Years Ended December 31,
|
|||||||
|
|
2013
|
|
2012
|
||||
|
(amounts in thousands)
|
|||||||
|
|
|
|
|
||||
Revenue
|
|
$
|
7,939
|
|
|
$
|
67,627
|
|
|
|
|
|
|
||||
Income (loss) from discontinued operations before gain on sale and income taxes
|
|
434
|
|
|
(30,973
|
)
|
||
Gain on sale of discontinued operations
|
|
3,969
|
|
|
—
|
|
||
Income tax (expense) benefit
|
|
(2,122
|
)
|
|
9,497
|
|
||
Income (loss) from discontinued operations, net of income taxes
|
|
$
|
2,281
|
|
|
$
|
(21,476
|
)
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Net
Carrying Amount |
||||||||||||
|
(amounts in thousands)
|
||||||||||||||||||||||
Intangible assets subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Databases
|
$
|
22,425
|
|
|
$
|
12,893
|
|
|
$
|
9,532
|
|
|
$
|
15,925
|
|
|
$
|
12,103
|
|
|
$
|
3,822
|
|
Customer relationships
|
42,004
|
|
|
17,870
|
|
|
24,134
|
|
|
37,304
|
|
|
15,125
|
|
|
22,179
|
|
||||||
Non-compete agreements
|
3,603
|
|
|
3,446
|
|
|
157
|
|
|
3,603
|
|
|
3,406
|
|
|
197
|
|
||||||
|
$
|
68,032
|
|
|
$
|
34,209
|
|
|
$
|
33,823
|
|
|
$
|
56,832
|
|
|
$
|
30,634
|
|
|
$
|
26,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
$
|
90,647
|
|
|
|
|
|
|
|
$
|
77,266
|
|
|||||
Trade names
|
|
|
|
|
|
|
38,201
|
|
|
|
|
|
|
|
|
42,301
|
|
||||||
|
|
|
|
|
|
|
$
|
128,848
|
|
|
|
|
|
|
|
|
$
|
119,567
|
|
Years Ending December 31:
|
(amounts in thousands)
|
||
2015
|
$
|
3,929
|
|
2016
|
3,929
|
|
|
2017
|
3,885
|
|
|
2018
|
3,800
|
|
|
2019
|
3,763
|
|
|
Thereafter
|
14,517
|
|
|
|
$
|
33,823
|
|
|
Nurse and
Allied Staffing
Segment
|
|
Physician
Staffing
Segment
|
|
Other Human
Capital
Management
Services
Segment
|
|
Total
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Balances as of December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
$
|
274,286
|
|
|
$
|
43,405
|
|
|
$
|
19,307
|
|
|
$
|
336,998
|
|
Accumulated impairment loss (a)
|
(259,732
|
)
|
|
—
|
|
|
—
|
|
|
(259,732
|
)
|
||||
Goodwill, net of impairment loss
|
14,554
|
|
|
43,405
|
|
|
19,307
|
|
|
77,266
|
|
||||
Changes to aggregate goodwill in 2014
|
|
|
|
|
|
|
|
||||||||
Goodwill acquired (b)
|
13,381
|
|
|
—
|
|
|
—
|
|
|
13,381
|
|
||||
Balances as of December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
287,667
|
|
|
43,405
|
|
|
19,307
|
|
|
350,379
|
|
||||
Accumulated impairment loss
|
(259,732
|
)
|
|
—
|
|
|
—
|
|
|
(259,732
|
)
|
||||
Goodwill, net of impairment loss
|
$
|
27,935
|
|
|
$
|
43,405
|
|
|
$
|
19,307
|
|
|
$
|
90,647
|
|
(a)
|
A non-cash pretax impairment charge of approximately
$241.0
million was recorded to reduce the carrying value of goodwill to its estimated fair value in the fourth quarter of 2008 for its Nurse and Allied Staffing reporting unit. The majority of the goodwill impairment was attributable to the Company’s initial capitalization in 1999, which was accounted for as an asset purchase (See Note 1 – Organization and Basis of Presentation), and subsequent Nurse and Allied Staffing acquisitions made through 2003. In addition, in the second quarter of 2012, a non-cash pretax impairment charge of approximately
$18.7
million was recorded for the Company’s Nurse and Allied Staffing reporting unit. See impairment review disclosures that follow.
|
(b)
|
Goodwill acquired from the acquisition of Medical Staffing Network. See Note 3 - Acquisitions.
|
|
|
|
December 31,
|
||||||
|
Useful Lives
|
|
2014
|
|
2013
|
||||
|
|
|
(amounts in thousands)
|
||||||
|
|
|
|
|
|
||||
Computer equipment
|
3-5 years
|
|
$
|
13,572
|
|
|
$
|
12,115
|
|
Computer software
|
3-5 years
|
|
34,100
|
|
|
30,059
|
|
||
Office equipment
|
5-7 years
|
|
3,846
|
|
|
3,307
|
|
||
Furniture and fixtures
|
5-7 years
|
|
3,562
|
|
|
1,752
|
|
||
Leasehold improvements
|
(a)
|
|
4,643
|
|
|
3,716
|
|
||
|
|
|
59,723
|
|
|
50,949
|
|
||
Less accumulated depreciation and amortization
|
|
|
(47,590
|
)
|
|
(44,779
|
)
|
||
|
|
|
$
|
12,133
|
|
|
$
|
6,170
|
|
(a)
|
See Note 2 – Summary of Significant Accounting Policies.
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(amounts in thousands)
|
||||||
Insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for workers’ compensation
|
$
|
3,316
|
|
|
$
|
2,093
|
|
Insurance recovery for professional liability
|
2,308
|
|
|
1,793
|
|
||
|
$
|
5,624
|
|
|
$
|
3,886
|
|
|
|
|
|
||||
Non-current insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for workers’ compensation – long-term
|
$
|
5,677
|
|
|
$
|
3,336
|
|
Insurance recovery for professional liability – long-term
|
11,148
|
|
|
7,578
|
|
||
|
$
|
16,825
|
|
|
$
|
10,914
|
|
|
|
|
|
||||
Accrued compensation and benefits:
|
|
|
|
||||
Salaries and payroll taxes
|
$
|
8,406
|
|
|
$
|
6,875
|
|
Bonuses
|
4,050
|
|
|
2,200
|
|
||
Accrual for workers’ compensation claims
|
6,996
|
|
|
3,236
|
|
||
Accrual for health care benefits
|
2,206
|
|
|
1,385
|
|
||
Accrual for professional liability insurance
|
4,652
|
|
|
4,091
|
|
||
Accrual for vacation
|
2,421
|
|
|
1,361
|
|
||
|
$
|
28,731
|
|
|
$
|
19,148
|
|
|
|
|
|
||||
Long-term accrued claims:
|
|
|
|
||||
Accrual for workers’ compensation claims
|
$
|
14,221
|
|
|
$
|
5,076
|
|
Accrual for professional liability insurance
|
17,847
|
|
|
13,227
|
|
||
|
$
|
32,068
|
|
|
$
|
18,303
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred compensation
|
$
|
1,510
|
|
|
$
|
1,638
|
|
Deferred rent
|
2,453
|
|
|
1,777
|
|
||
Other
|
47
|
|
|
—
|
|
||
|
$
|
4,010
|
|
|
$
|
3,415
|
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(amounts in thousands)
|
||||||
Senior Secured Asset-Based, interest 2.61% and 3.27% at December 31, 2014 and December 31, 2013, respectively
|
$
|
3,500
|
|
|
$
|
8,400
|
|
Second Lien Term Loan, net of unamortized discount of $1,011, interest 7.50% at December 31, 2014
|
28,989
|
|
|
—
|
|
||
Convertible Notes, net of unamortized discount of $7,053, interest 8.00% at December 31, 2014
|
17,947
|
|
|
—
|
|
||
Convertible Notes derivative liability
|
23,436
|
|
|
—
|
|
||
Capital lease obligations
|
202
|
|
|
176
|
|
||
Total debt
|
74,074
|
|
|
8,576
|
|
||
Less current portion
|
(3,607
|
)
|
|
(8,483
|
)
|
||
Long-term debt
|
$
|
70,467
|
|
|
$
|
93
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Financial Assets:
|
(amounts in thousands)
|
||||||
(Level 3)
|
|
|
|
||||
Escrow receivable
|
$
|
—
|
|
|
$
|
3,750
|
|
|
|
|
|
||||
Financial Liabilities:
|
|
|
|
||||
(Level 1)
|
|
|
|
|
|
||
Deferred compensation
|
$
|
1,510
|
|
|
$
|
1,638
|
|
(Level 3)
|
|
|
|
||||
Convertible Notes derivative liability
|
$
|
23,436
|
|
|
$
|
—
|
|
|
Escrow
|
|
Convertible Notes
|
||||
|
Receivable
|
|
Derivative Liability (a)
|
||||
|
(amounts in thousands)
|
||||||
|
|
|
|
||||
December 31, 2012
|
$
|
—
|
|
|
$
|
—
|
|
Additions
|
3,750
|
|
|
—
|
|
||
December 31, 2013
|
3,750
|
|
|
—
|
|
||
Additions
|
—
|
|
|
6,765
|
|
||
Settlements
|
(3,750
|
)
|
|
—
|
|
||
Valuation loss for the period
|
—
|
|
|
16,671
|
|
||
December 31, 2014
|
$
|
—
|
|
|
$
|
23,436
|
|
(a)
|
Embedded derivative included in long-term debt on consolidated balance sheets. Embedded derivative of
$6.8 million
added as of June 30, 2014. Change in valuation of derivative for the year ended
December 31, 2014
was
$16.7 million
and is included in other expenses (income) on the consolidated statement of operations. See Note 9 - Convertible Notes Derivative Liability and Note 2 - Summary of Significant Accounting Policies for further information.
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
|
(amounts in thousands)
|
||||||
(Level 3)
|
|
|
|
||||
MDA trade names
|
$
|
17,699
|
|
|
$
|
28,836
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||||||||
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
|||||||||
|
(amounts in thousands)
|
||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
(Level 2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second Lien Term Loan, net (a)
|
$
|
28,989
|
|
|
$
|
29,900
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible Notes, net (a)
|
$
|
17,948
|
|
|
$
|
19,200
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Senior Secured Asset-Based Loan (b)
|
$
|
3,500
|
|
|
$
|
3,500
|
|
|
$
|
8,400
|
|
|
$
|
8,400
|
|
(a)
|
The Second Lien Term Loan and Convertible Notes are reported at their carrying value in the accompanying consolidated balance sheets. The Company determined their fair value, as presented in the table using an income approach, utilizing a discounted cash flow analysis based on current market interest rates for debt issuances with similar remaining years to maturity, adjusted for credit risk.
|
(b)
|
Carrying value of the Senior Secured Asset-Based Loan approximates estimated fair value based on the short-term nature and the pricing at varying interest rates.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(amounts in thousands)
|
||||||||||
Continuing operations:
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
412
|
|
State
|
811
|
|
|
540
|
|
|
812
|
|
|||
Foreign
|
262
|
|
|
416
|
|
|
1,561
|
|
|||
Total
|
1,073
|
|
|
956
|
|
|
2,785
|
|
|||
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
|
|
|
|||
Federal
|
(1,320
|
)
|
|
37,822
|
|
|
(4,048
|
)
|
|||
State
|
68
|
|
|
5,134
|
|
|
(5,251
|
)
|
|||
Foreign
|
395
|
|
|
299
|
|
|
364
|
|
|||
Total
|
(857
|
)
|
|
43,255
|
|
|
(8,935
|
)
|
|||
Total income tax expense (benefit) for continuing operations
|
$
|
216
|
|
|
$
|
44,211
|
|
|
$
|
(6,150
|
)
|
|
|
|
|
|
|
||||||
The total income tax provision is summarized as follows:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
216
|
|
|
$
|
44,211
|
|
|
$
|
(6,150
|
)
|
Discontinued operations
|
—
|
|
|
2,122
|
|
|
(9,497
|
)
|
|||
|
$
|
216
|
|
|
$
|
46,333
|
|
|
$
|
(15,647
|
)
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
|
(amounts in thousands)
|
||||||
Current deferred tax assets (liabilities):
|
|
|
|
||||
Accrued other and prepaid expenses
|
$
|
2,823
|
|
|
$
|
2,592
|
|
Accrued settlement charge
|
—
|
|
|
283
|
|
||
Allowance for doubtful accounts
|
589
|
|
|
650
|
|
||
Other
|
822
|
|
|
468
|
|
||
Gross deferred tax assets
|
4,234
|
|
|
3,993
|
|
||
Valuation allowance
|
(6,215
|
)
|
|
(4,528
|
)
|
||
Deferred tax liabilities
|
(1,981
|
)
|
|
(535
|
)
|
||
Non-current deferred tax (liabilities) and assets:
|
|
|
|
|
|
||
Amortization
|
(5,967
|
)
|
|
(1,314
|
)
|
||
Depreciation
|
105
|
|
|
(384
|
)
|
||
Identifiable intangibles
|
—
|
|
|
(2,237
|
)
|
||
Net operating loss carryforwards
|
38,144
|
|
|
32,531
|
|
||
Derivative interest
|
6,370
|
|
|
—
|
|
||
Accrued professional liability
|
(92
|
)
|
|
(118
|
)
|
||
Accrued workers’ compensation
|
1,356
|
|
|
675
|
|
||
Tax on unrepatriated earnings
|
(336
|
)
|
|
(453
|
)
|
||
Share-based compensation
|
959
|
|
|
1,610
|
|
||
Other
|
(1,176
|
)
|
|
314
|
|
||
Gross deferred tax assets
|
39,363
|
|
|
30,624
|
|
||
Valuation allowance
|
(57,401
|
)
|
|
(47,473
|
)
|
||
Deferred tax liabilities
|
(18,038
|
)
|
|
(16,849
|
)
|
||
Net deferred taxes
|
$
|
(20,019
|
)
|
|
$
|
(17,384
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(amounts in thousands)
|
||||||||||
Tax at U.S. statutory rate
|
$
|
(10,961
|
)
|
|
$
|
(3,514
|
)
|
|
$
|
(9,413
|
)
|
State taxes, net of federal benefit
|
219
|
|
|
(190
|
)
|
|
(1,226
|
)
|
|||
Non-deductible meals and entertainment
|
1,425
|
|
|
450
|
|
|
962
|
|
|||
Foreign tax expense
|
44
|
|
|
554
|
|
|
(222
|
)
|
|||
Valuation allowances
|
12,038
|
|
|
48,556
|
|
|
(44
|
)
|
|||
Uncertain tax positions
|
(996
|
)
|
|
(257
|
)
|
|
648
|
|
|||
Deferred tax rate differential
|
—
|
|
|
—
|
|
|
150
|
|
|||
Deferred tax write-offs (a)
|
—
|
|
|
221
|
|
|
—
|
|
|||
Audit settlements
|
—
|
|
|
160
|
|
|
—
|
|
|||
Tax on unrepatriated earnings
|
—
|
|
|
(1,465
|
)
|
|
2,005
|
|
|||
Tax on repatriated earnings
|
—
|
|
|
—
|
|
|
519
|
|
|||
Tax true ups and other
|
(1,553
|
)
|
|
(304
|
)
|
|
471
|
|
|||
Total income tax expense (benefit) for continuing operations
|
$
|
216
|
|
|
$
|
44,211
|
|
|
$
|
(6,150
|
)
|
|
2014
|
|
2013
|
||||
|
(amounts in thousands)
|
||||||
Balance at January 1
|
$
|
4,986
|
|
|
$
|
5,204
|
|
Additions based on tax positions related to the current year
|
709
|
|
|
496
|
|
||
Additions based on tax positions related to prior years
|
91
|
|
|
681
|
|
||
Reductions based on settlements of tax positions related to the prior year
|
(344
|
)
|
|
(292
|
)
|
||
Reductions for tax positions as a result of a lapse of the applicable statute of limitations
|
(1,578
|
)
|
|
(1,076
|
)
|
||
Other
|
(87
|
)
|
|
(27
|
)
|
||
Balance at December 31
|
$
|
3,777
|
|
|
$
|
4,986
|
|
|
Restricted Stock Awards
|
|
Performance Stock Awards
|
||||||||||
|
Number of
Shares |
|
Weighted
Average Grant Date Fair Value |
|
Number of Target
Shares |
|
Weighted
Average Grant Date Fair Value |
||||||
Unvested restricted stock awards, January 1, 2014
|
552,231
|
|
|
$
|
5.37
|
|
|
—
|
|
|
$
|
—
|
|
Granted
|
377,308
|
|
|
$
|
6.18
|
|
|
239,585
|
|
|
$
|
5.81
|
|
Vested
|
(181,354
|
)
|
|
$
|
5.77
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(88,535
|
)
|
|
$
|
5.39
|
|
|
(21,410
|
)
|
|
$
|
5.77
|
|
Unvested restricted stock awards, December 31, 2014
|
659,650
|
|
|
$
|
5.72
|
|
|
218,175
|
|
|
$
|
5.82
|
|
|
Year Ended December 31,
|
|||||
|
|
2013
|
|
2012
|
||
Expected dividend yield
|
|
—
|
%
|
|
—
|
%
|
Expected volatility
|
|
48.00
|
%
|
|
47.00
|
%
|
Risk-free interest rate
|
|
0.79
|
%
|
|
0.58
|
%
|
Expected life
|
|
4.2 years
|
|
|
4.3 years
|
|
|
Shares
|
|
Option Price
|
|
Weighted
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value |
|||
Share options outstanding at beginning of year
|
1,546,299
|
|
|
$4.16-$22.50
|
|
$8.93
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
—
|
|
|
|
|
||
Exercised
|
(228,500
|
)
|
|
$4.35-$8.56
|
|
$7.47
|
|
|
|
|
||
Forfeited/expired
|
(382,704
|
)
|
|
$4.35-$22.50
|
|
$11.41
|
|
|
|
|
||
Share options outstanding at end of year
|
935,095
|
|
|
$4.16-$22.50
|
|
$8.27
|
|
2.94
|
|
$
|
4,464,160
|
|
Share options exercisable at end of year
|
655,468
|
|
|
$4.16-$22.50
|
|
$9.58
|
|
2.07
|
|
$
|
2,430,566
|
|
Share options unvested at end of year
|
279,627
|
|
|
$4.16-$7.44
|
|
$5.21
|
|
4.96
|
|
$
|
2,033,594
|
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
|
(amounts in thousands, except per share data)
|
||||||||||
Loss from continuing operations
|
$
|
(31,534
|
)
|
|
$
|
(54,250
|
)
|
|
$
|
(20,745
|
)
|
Less: Income attributable to noncontrolling interest in subsidiary
|
249
|
|
|
—
|
|
|
—
|
|
|||
Loss from continuing operations attributable to common shareholders
|
(31,783
|
)
|
|
(54,250
|
)
|
|
(20,745
|
)
|
|||
Income (loss) from discontinued operations, net of income taxes
|
—
|
|
|
2,281
|
|
|
(21,476
|
)
|
|||
Net loss attributable to common shareholders
|
$
|
(31,783
|
)
|
|
$
|
(51,969
|
)
|
|
$
|
(42,221
|
)
|
|
|
|
|
|
|
||||||
Basic (loss) income per share attributable to common shareholders
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
(1.02
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
Discontinued operations
|
—
|
|
|
0.07
|
|
|
(0.70
|
)
|
|||
Net loss
|
$
|
(1.02
|
)
|
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
|
|
|
|
|
||||||
Diluted (loss) income per share attributable to common shareholders
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
(1.02
|
)
|
|
$
|
(1.75
|
)
|
|
$
|
(0.67
|
)
|
Discontinued operations
|
—
|
|
|
0.07
|
|
|
(0.70
|
)
|
|||
Net loss
|
$
|
(1.02
|
)
|
|
$
|
(1.68
|
)
|
|
$
|
(1.37
|
)
|
|
|
|
|
|
|
||||||
Weighted-average number of shares outstanding-basic
|
31,190
|
|
|
31,009
|
|
|
30,843
|
|
|||
Plus dilutive equity awards
|
—
|
|
|
—
|
|
|
—
|
|
|||
Weighted-average number of shares outstanding-diluted
|
31,190
|
|
|
31,009
|
|
|
30,843
|
|
•
|
Nurse and Allied Staffing -
Nurse and Allied Staffing provides traditional staffing, including temporary and permanent placement of travel nurses and allied professionals, and branch-based local nurses and allied staffing. Its clients include: public and private acute-care and non-acute care hospitals, government facilities, schools, outpatient clinics,
|
•
|
Physician Staffing –
Physician Staffing provides physicians in many specialties, certified registered nurse anesthetists (CRNAs), nurse practitioners (NPs), and physician assistants (PAs) under the Company's Medical Doctor Associates (MDA) and Saber-Salisbury brands as independent contractors on temporary assignments throughout the U.S. at various healthcare facilities, such as acute and non-acute care facilities, medical group practices, government facilities, and managed care organizations. The Physician Staffing business also provides certain other employees on a temporary basis to its customers.
|
•
|
Other Human Capital Management Services -
Other Human Capital Management Services provides education and training programs to the healthcare industry and retained and contingent search services for physicians and healthcare executives, within the U.S.
|
|
Year Ended December 31,
|
||||||||||
|
2014
|
|
2013 (a)
|
|
2012 (a)
|
||||||
|
(amounts in thousands)
|
||||||||||
Revenue from unaffiliated customers:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing
|
$
|
457,034
|
|
|
$
|
271,563
|
|
|
$
|
272,136
|
|
Physician Staffing
|
123,306
|
|
|
128,781
|
|
|
129,162
|
|
|||
Other Human Capital Management Services
|
37,485
|
|
|
37,967
|
|
|
41,337
|
|
|||
|
$
|
617,825
|
|
|
$
|
438,311
|
|
|
$
|
442,635
|
|
Contribution income: (b)
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing
|
$
|
36,326
|
|
|
$
|
18,424
|
|
|
$
|
10,277
|
|
Physician Staffing
|
6,700
|
|
|
8,939
|
|
|
10,863
|
|
|||
Other Human Capital Management Services
|
514
|
|
|
746
|
|
|
1,943
|
|
|||
|
43,540
|
|
|
28,109
|
|
|
23,083
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead
|
27,770
|
|
|
21,844
|
|
|
21,701
|
|
|||
Depreciation
|
3,866
|
|
|
3,886
|
|
|
4,905
|
|
|||
Amortization
|
3,575
|
|
|
2,294
|
|
|
2,263
|
|
|||
Acquisition and integration costs
|
7,957
|
|
|
473
|
|
|
—
|
|
|||
Restructuring costs
|
840
|
|
|
484
|
|
|
—
|
|
|||
Legal settlement charge
|
—
|
|
|
750
|
|
|
—
|
|
|||
Impairment charges (c)
|
10,000
|
|
|
6,400
|
|
|
18,732
|
|
|||
Loss from operations
|
$
|
(10,468
|
)
|
|
$
|
(8,022
|
)
|
|
$
|
(24,518
|
)
|
(a)
|
In 2014, the Company reclassified the revenue and contribution income of certain higher level staffing professionals previously included with Nurse and Allied Staffing to Physician Staffing. In addition, in 2014, the Company refined its methodology for allocating certain corporate overhead expenses to its Nurse and Allied Staffing segment to more
|
(b)
|
The Company defines contribution income as loss from operations before depreciation, amortization, acquisition and integration costs, restructuring costs, legal settlement charges, impairment charges, and corporate expenses not specifically identified to a reporting segment. Contribution income is a financial measure used by management when assessing segment performance and is provided in accordance with ASC 280,
Segment Reporting
Topic of the FASB ASC.
|
(c)
|
During the years ended December 31, 2014 and 2013, the Company recorded trade names impairment charges of
$10.0
million and
$6.4
million, respectively.
During the year ended December 31, 2012, the Company recorded pretax impairment charges in its continuing operations of
$18.7
million. See Note 5 - Goodwill, Trade Names, and Other Identifiable Intangible Assets for further information.
|
|
First
Quarter (a) |
|
Second
Quarter (b) |
|
Third
Quarter (c) |
|
Fourth
Quarter (d) |
||||||||
2014
|
(amounts in thousands)
|
||||||||||||||
Revenue from services
|
$
|
118,091
|
|
|
$
|
122,656
|
|
|
$
|
188,944
|
|
|
$
|
188,134
|
|
Gross profit
|
30,450
|
|
|
32,436
|
|
|
47,277
|
|
|
47,641
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations, net of tax
|
(782
|
)
|
|
(3,181
|
)
|
|
(7,484
|
)
|
|
(20,087
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Consolidated net loss
|
(782
|
)
|
|
(3,181
|
)
|
|
(7,484
|
)
|
|
(20,087
|
)
|
||||
Less: Net income attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
118
|
|
|
131
|
|
||||
Net loss attributable to common shareholders
|
(782
|
)
|
|
(3,181
|
)
|
|
(7,602
|
)
|
|
(20,218
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic (loss) income per share attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
(0.03
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.65
|
)
|
Discontinuing operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
$
|
(0.03
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.65
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) income per share attributable to common shareholders
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.03
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.65
|
)
|
Discontinuing operations
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net loss
|
$
|
(0.03
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.65
|
)
|
|
First
Quarter (e) |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter (f) |
||||||||
2013
|
(amounts in thousands)
|
||||||||||||||
Revenue from services
|
$
|
110,316
|
|
|
$
|
110,768
|
|
|
$
|
108,048
|
|
|
$
|
109,179
|
|
Gross profit
|
28,876
|
|
|
27,838
|
|
|
28,184
|
|
|
28,562
|
|
||||
|
|
|
|
|
|
|
|
||||||||
(Loss) income from continuing operations, net of tax
|
(1,346
|
)
|
|
(1,435
|
)
|
|
1,453
|
|
|
(52,922
|
)
|
||||
Income (loss) from discontinued operations, net of tax
|
2,504
|
|
|
(22
|
)
|
|
(539
|
)
|
|
338
|
|
||||
Consolidated net income (loss)
|
1,158
|
|
|
(1,457
|
)
|
|
914
|
|
|
(52,584
|
)
|
||||
Less: Net income attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income (loss) attributable to common shareholders
|
1,158
|
|
|
(1,457
|
)
|
|
914
|
|
|
(52,584
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Basic (loss) income per share attributable to common shareholders
|
|
|
|
|
|
|
|
|
|
|
|
||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(1.70
|
)
|
Discontinuing operations
|
0.08
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.01
|
|
||||
Net income (loss)
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.03
|
|
|
$
|
(1.69
|
)
|
|
|
|
|
|
|
|
|
||||||||
Diluted (loss) income per share attributable to common shareholders
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
(0.04
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
0.05
|
|
|
$
|
(1.70
|
)
|
Discontinuing operations
|
0.08
|
|
|
—
|
|
|
(0.02
|
)
|
|
0.01
|
|
||||
Net income (loss)
|
$
|
0.04
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.03
|
|
|
$
|
(1.69
|
)
|
(a)
|
During the first quarter of 2014, the Company recorded acquisition and integration costs of
0.3 million
. See Note 3 - Acquisitions.
|
(b)
|
During the second quarter of 2014, the Company recorded acquisition and integration costs of
$2.7 million
. See Note 3 - Acquisitions.
|
(c)
|
On June 30, 2014, the Company acquired substantially all of the assets and certain liabilities of Medical Staffing Network Healthcare, LLC. The acquisition has been accounted for in accordance with FASB ASC 805,
Business Combinations,
using the acquisition method. The results of the acquisition's operations have been included in the consolidated statements of operations from July 1, 2014 due to their immaterial impact on June 30, 2014, the date of the acquisition. See Note 3 - Acquisitions. During the third quarter of 2014, the Company recorded acquisition and integration costs of
$2.4 million
and a change in fair value of convertible notes derivative liability of
$7.3 million
. See Note 3 - Acquisitions and Note 9 - Convertible Notes Derivative Liability.
|
(d)
|
During the fourth quarter of 2014, the Company recorded acquisition and integration costs of
$2.5 million
, a trade name impairment charge of
$10.0 million
, and a change in fair value of convertible notes derivative liability of
$9.4 million
. See Note 3 - Acquisitions, Note 5 - Goodwill, Trade Names, and Other Identifiable Intangible Assets, and Note 9 - Convertible Notes Derivative Liability.
|
(e)
|
The Company sold its Clinical Trial Services business on February 15, 2013. The Clinical Trial Services business has been classified as discontinued operations. The transaction resulted in a gain on sale of
$4.0 million
pretax, or
$2.1 million
after tax. See Note 4 – Discontinued Operations.
|
(f)
|
On December 2, 2013, the Company acquired the operating assets of On Assignment, Inc.’s Allied Healthcare Staffing division. The acquisition has been accounted for in accordance with FASB ASC Topic 805,
Business Combinations
, using the acquisition method. The results of these allied healthcare staffing operations have been included in the Company's consolidated statements of operations since December 2, 2013, the date of the acquisition. See Note 3 - Acquisitions. During the fourth quarter of 2013, the Company recorded a deferred tax assets valuation allowance of approximately
$48.4
million and a trade names impairment charge of
$6.4
million. See Note 13 - Income Taxes and Note 5 - Goodwill, Trade Names, and Other Identifiable Intangible Assets.
|
|
Balance at
Beginning of Period |
|
Charged to
Costs and Expenses |
|
Write-offs
|
|
Recoveries
|
|
Other
Changes |
|
Balance at
End of Period |
||||||||||||
|
(amounts in thousands)
|
||||||||||||||||||||||
Allowance for Doubtful Accounts
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year ended December 31, 2014
|
$
|
1,651
|
|
|
$
|
1,016
|
|
|
$
|
(1,257
|
)
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
1,425
|
|
Year ended December 31, 2013
|
$
|
1,841
|
|
|
$
|
1,078
|
|
|
$
|
(1,324
|
)
|
|
$
|
56
|
|
|
$
|
—
|
|
|
$
|
1,651
|
|
Year ended December 31, 2012
|
$
|
2,180
|
|
|
$
|
786
|
|
|
$
|
(913
|
)
|
|
$
|
16
|
|
|
$
|
(228
|
)
|
(a)
|
$
|
1,841
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Valuation Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year ended December 31, 2014
|
$
|
52,001
|
|
|
$
|
12,038
|
|
(b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(423
|
)
|
(c)
|
$
|
63,616
|
|
Year ended December 31, 2013
|
$
|
4,033
|
|
|
$
|
48,406
|
|
(d)
|
$
|
(438
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,001
|
|
Year ended December 31, 2012
|
$
|
3,678
|
|
|
$
|
355
|
|
(e)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,033
|
|
(a)
|
Represents the reclassification of the allowance for doubtful accounts related to Assets Held for Sale. See Note 4 – Discontinued Operations.
|
(b)
|
Related to deferred tax assets.
|
(c)
|
Related to foreign valuation allowance adjustment.
|
(d)
|
Related to deferred tax assets, Cyprus NOL's, and reversal of deferred tax assets related to the Clinical Trial Services business.
|
(e)
|
Related to deferred tax assets on state net operating losses and a particular subsidiary’s state portion of its deferred tax asset that arose from goodwill impairment.
|
Subsidiary
|
|
Place of Incorporation
|
Assignment America, LLC
|
|
Delaware
|
Cejka Search, Inc.
|
|
Delaware
|
Credent Verification and Licensing Services, LLC
|
|
Delaware
|
Cross Country Healthcare UK Holdco Limited *
|
|
United Kingdom
|
Cross Country Holdco (Cyprus) Limited
|
|
Cyprus
|
Cross Country Infotech, Pvt. Ltd.
|
|
India
|
Cross Country Education, LLC
|
|
Delaware
|
Cross Country Publishing, LLC
|
|
Delaware
|
Cross Country Staffing, Inc.
|
|
Delaware
|
Intelistaf of Oklahoma LLC**
|
|
Delaware
|
Jamestown Indemnity, Ltd.
|
|
Cayman Islands
|
Local Staff, LLC
|
|
Delaware
|
MDA Holdings, Inc.
|
|
Delaware
|
Medical Doctor Associates, LLC
|
|
Delaware
|
OWS, LLC
|
|
Delaware
|
Travel Staff, LLC
|
|
Delaware
|
(1)
|
Registration Statement (Form S-8 No. 333-74862) pertaining to Cross Country Healthcare, Inc. and subsidiaries Amended and Restated 1999 Stock Option Plan and Cross Country Healthcare, Inc. and subsidiaries Amended and Restated Equity Participation Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-145484) pertaining to Cross Country Healthcare, Inc. and subsidiaries 2007 Stock Incentive Plan, and
|
(3)
|
Registration Statement (Form S-1 No. 333-200827) of Cross Country Healthcare, Inc. and Subsidiaries;
|
/s/
Ernst & Young LLP
|
Certified Public Accountants
|
1.
|
I have reviewed this annual report on Form 10-K of Cross Country Healthcare, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 6, 2015
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President and Chief Executive Officer
|
1.
|
I have reviewed this annual report on Form 10-K of Cross Country Healthcare, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 6, 2015
|
/s/ William J. Burns
|
|
|
William J. Burns
Chief Financial Officer
|
Date:
|
March 6, 2015
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
Chief Executive Officer
|
Date:
|
March 6, 2015
|
/s/ William J. Burns
|
|
|
William J. Burns
Chief Financial Officer
|