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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 $0.0001 per share
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The NASDAQ Stock Market
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Page
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PART I
I
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Item 1.
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Business.
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Item 1A.
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Risk Factors.
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December 31, 2015
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||
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(amounts in thousands)
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||
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Total principal amount of debt
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$
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63,000
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Total Cross Country Healthcare, Inc. stockholders' equity
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$
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140,848
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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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Nurse and Allied Staffing administration and general office use
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70,406
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December 31, 2025
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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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Boca Raton, Florida
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Corporate headquarters
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36,919
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November 30, 2025
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Creve Coeur, Missouri
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Retained search headquarters
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27,051
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August 31, 2024
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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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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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2015
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Quarter Ended March 31, 2015
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$
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11.72
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$
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11.16
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Quarter Ended June 30, 2015
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$
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11.52
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$
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11.14
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Quarter Ended September 30, 2015
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$
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13.85
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$
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13.33
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Quarter Ended December 31, 2015
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$
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16.31
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$
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15.49
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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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Item 6.
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Selected Financial Data.
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Year Ended December 31,
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2015
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2014
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2013
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2012
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2011
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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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767,421
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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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Income (loss) from continuing operations
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4,954
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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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|||||
Net income (loss) attributable to common shareholders
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4,418
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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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Per Share Data:
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Income (loss) from continuing operations attributable to common shareholders - Basic and Diluted
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$
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0.14
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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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Weighted Average Common Shares Outstanding:
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Basic
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31,514
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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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Diluted
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32,162
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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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Other Operating Data:
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Cash and cash equivalents
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$
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2,453
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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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Total assets
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366,097
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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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Total debt
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89,874
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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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Stockholders’ equity
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141,344
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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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Net cash provided by (used in) operating activities
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18,235
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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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•
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Income (loss) from continuing operations for the years ended December 31, 2015 and 2014, respectively, includes amounts attributable to noncontrolling interest of
$0.5 million
and
$0.2 million
.
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•
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We acquired all of the membership interests of New Mediscan II, LLC, Mediscan Diagnostic Services, LLC, and Mediscan Nursing Staffing, LLC (collectively "Mediscan") on October 30, 2015, substantially all of the assets and certain liabilities of Medical Staffing Network Healthcare, LLC (MSN) on June 30, 2014, and the operating assets of On Assignment, Inc.’s Allied Healthcare Staffing division on December 2, 2013. The results of these acquisition's operations have been included in our consolidated statements of operations since their respective dates of acquisition. For the years ended
December 31, 2015
,
2014
and
2013
, we recognized
$0.9 million
,
$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, 2015
,
2014
and
2013
include
$1.3 million
,
$0.8 million
and
$0.5 million
, respectively, of restructuring costs primarily related to our cost optimization project in 2015, and senior management employee severance pay in 2014 and 2013.
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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, 2015, 2014, 2013 and 2012 include non-cash impairment charges of approximately
$2.1 million
,
$10.0 million
,
$6.4 million
, and
$18.7 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 years ended
December 31, 2015
and 2014 include the impact of a loss on derivative liability of approximately
$9.9 million
and
$16.7 million
, respectively. 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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The year ended December 31, 2015 includes a loss on sale of business of
$2.2 million
(an after-tax gain of
$1.3 million
) related to the sale of our education seminars business, Cross Country Education, LLC on August 31, 2015. See Note 4 - Disposal and Discontinued Operations to our consolidated financial statements.
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•
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The year ended December 31, 2013 includes a loss on early extinguishment and modification of debt of
$1.4 million
related to the write-off of unamortized debt issuance costs related to our prior credit agreement. See Note 8 - Debt to our consolidated financial statements.
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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
81%
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. Its services include the placement of travel and per diem nurses, allied healthcare professionals, such as rehabilitation therapists, radiology technicians, and respiratory therapists.
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●
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Physician Staffing
– Physician Staffing represented approximately
15%
of our total revenue. Physician Staffing provides physicians in many specialties, CRNAs, NPs and PAs under our Medical Doctor Associates (MDA) and Saber-Salisbury brands as independent contractors on temporary assignments throughout the U.S.
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●
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Other Human Capital Management Services
– Other Human Capital Management Services represented approximately
4%
of our total revenue. Subsequent to the sale of CCE on August 31, 2015, Other Human Capital Management Services is comprised of 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 by Physician Staffing by days filled for the period presented. Revenue per day filled excludes permanent placement and unbilled revenue.
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Year Ended December 31,
|
|||||||
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2015
|
|
2014
|
|
2013
|
|||
Revenue from services
|
100.0
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%
|
|
100.0
|
%
|
|
100.0
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%
|
Direct operating expenses
|
74.3
|
|
|
74.5
|
|
|
74.1
|
|
Selling, general and administrative expenses
|
21.0
|
|
|
22.8
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|
24.2
|
|
Bad debt expense
|
0.1
|
|
|
0.2
|
|
|
0.2
|
|
Depreciation and amortization
|
1.0
|
|
|
1.2
|
|
|
1.4
|
|
Loss on sale of business
|
0.3
|
|
|
—
|
|
|
—
|
|
Acquisition and integration costs
|
0.1
|
|
|
1.3
|
|
|
0.1
|
|
Restructuring costs
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
Legal settlement charge
|
—
|
|
|
—
|
|
|
0.2
|
|
Impairment charges
|
0.3
|
|
|
1.6
|
|
|
1.5
|
|
Income (loss) from operations
|
2.7
|
|
|
(1.7
|
)
|
|
(1.8
|
)
|
Interest expense
|
0.9
|
|
|
0.7
|
|
|
0.2
|
|
Loss on derivative liability
|
1.3
|
|
|
2.7
|
|
|
—
|
|
Loss on early extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
0.3
|
|
Income (loss) from continuing operations before income taxes
|
0.5
|
|
|
(5.1
|
)
|
|
(2.3
|
)
|
Income tax (benefit) expense
|
(0.1
|
)
|
|
—
|
|
|
10.1
|
|
Income (loss) from continuing operations
|
0.6
|
|
|
(5.1
|
)
|
|
(12.4
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)
|
Income from discontinued operations, net of tax
|
—
|
|
|
—
|
|
|
0.5
|
|
Consolidated net income (loss)
|
0.6
|
|
|
(5.1
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)
|
|
(11.9
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)
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Less: Net income attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
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|
|
—
|
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Net income (loss) attributable to common shareholders
|
0.6
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%
|
|
(5.1
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)%
|
|
(11.9
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)%
|
|
Year Ended December 31,
|
|||||||||||||
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|
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Increase (Decrease)
|
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Increase (Decrease)
|
|||||||
|
2015
|
|
2014
|
|
$
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Revenue from services
|
$
|
767,421
|
|
|
$
|
617,825
|
|
|
$
|
149,596
|
|
|
24.2
|
%
|
Direct operating expenses
|
570,056
|
|
|
460,021
|
|
|
110,035
|
|
|
23.9
|
%
|
|||
Selling, general and administrative expenses
|
161,275
|
|
|
141,018
|
|
|
20,257
|
|
|
14.4
|
%
|
|||
Bad debt expense
|
999
|
|
|
1,016
|
|
|
(17
|
)
|
|
(1.7
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)%
|
|||
Depreciation and amortization
|
8,066
|
|
|
7,441
|
|
|
625
|
|
|
8.4
|
%
|
|||
Loss on sale of business
|
2,184
|
|
|
—
|
|
|
2,184
|
|
|
100.0
|
%
|
|||
Acquisition and integration costs
|
902
|
|
|
7,957
|
|
|
(7,055
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)
|
|
(88.7
|
)%
|
|||
Restructuring costs
|
1,274
|
|
|
840
|
|
|
434
|
|
|
51.7
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%
|
|||
Impairment charges
|
2,100
|
|
|
10,000
|
|
|
(7,900
|
)
|
|
(79.0
|
)%
|
|||
Income (loss) from operations
|
20,565
|
|
|
(10,468
|
)
|
|
31,033
|
|
|
296.5
|
%
|
|||
Interest expense
|
6,810
|
|
|
4,160
|
|
|
2,650
|
|
|
63.7
|
%
|
|||
Loss on derivative liability
|
9,901
|
|
|
16,671
|
|
|
(6,770
|
)
|
|
(40.6
|
)%
|
|||
Other income, net
|
(306
|
)
|
|
19
|
|
|
(325
|
)
|
|
(1,710.5
|
)%
|
|||
Income (loss) from continuing operations before income taxes
|
4,160
|
|
|
(31,318
|
)
|
|
35,478
|
|
|
113.3
|
%
|
|||
Income tax (benefit) expense
|
(794
|
)
|
|
216
|
|
|
(1,010
|
)
|
|
(467.6
|
)%
|
|||
Consolidated net income (loss)
|
4,954
|
|
|
(31,534
|
)
|
|
36,488
|
|
|
115.7
|
%
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
536
|
|
|
249
|
|
|
287
|
|
|
115.3
|
%
|
|||
Net income (loss) attributable to common shareholders
|
$
|
4,418
|
|
|
$
|
(31,783
|
)
|
|
$
|
36,201
|
|
|
113.9
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
|
2014
|
|
2013
|
|
$
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Revenue from services
|
$
|
617,825
|
|
|
$
|
438,311
|
|
|
$
|
179,514
|
|
|
41.0
|
%
|
Direct operating expenses
|
460,021
|
|
|
324,851
|
|
|
135,170
|
|
|
41.6
|
%
|
|||
Selling, general and administrative expenses
|
141,018
|
|
|
106,117
|
|
|
34,901
|
|
|
32.9
|
%
|
|||
Bad debt expense
|
1,016
|
|
|
1,078
|
|
|
(62
|
)
|
|
(5.8
|
)%
|
|||
Depreciation and amortization
|
7,441
|
|
|
6,180
|
|
|
1,261
|
|
|
20.4
|
%
|
|||
Acquisition and integration costs
|
7,957
|
|
|
473
|
|
|
7,484
|
|
|
1,582.2
|
%
|
|||
Restructuring costs
|
840
|
|
|
484
|
|
|
356
|
|
|
73.6
|
%
|
|||
Legal settlement charge
|
—
|
|
|
750
|
|
|
(750
|
)
|
|
(100.0
|
)%
|
|||
Impairment charges
|
10,000
|
|
|
6,400
|
|
|
3,600
|
|
|
56.3
|
%
|
|||
Income (loss) from operations
|
(10,468
|
)
|
|
(8,022
|
)
|
|
(2,446
|
)
|
|
(30.5
|
)%
|
|||
Interest expense
|
4,160
|
|
|
849
|
|
|
3,311
|
|
|
390.0
|
%
|
|||
Loss on derivative liability
|
16,671
|
|
|
—
|
|
|
16,671
|
|
|
100.0
|
%
|
|||
Loss on early extinguishment and modification of debt
|
—
|
|
|
1,419
|
|
|
(1,419
|
)
|
|
(100.0
|
)%
|
|||
Other income, net
|
19
|
|
|
(251
|
)
|
|
270
|
|
|
107.6
|
%
|
|||
Income (loss) from continuing operations before income taxes
|
(31,318
|
)
|
|
(10,039
|
)
|
|
(21,279
|
)
|
|
(212.0
|
)%
|
|||
Income tax expense
|
216
|
|
|
44,211
|
|
|
(43,995
|
)
|
|
(99.5
|
)%
|
|||
Income (loss) from continuing operations
|
(31,534
|
)
|
|
(54,250
|
)
|
|
22,716
|
|
|
41.9
|
%
|
|||
Income from discontinued operations, net of tax
|
—
|
|
|
2,281
|
|
|
(2,281
|
)
|
|
(100.0
|
)%
|
|||
Consolidated net income (loss)
|
(31,534
|
)
|
|
(51,969
|
)
|
|
20,435
|
|
|
39.3
|
%
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
249
|
|
|
—
|
|
|
249
|
|
|
100.0
|
%
|
|||
Net income (loss) attributable to common shareholders
|
$
|
(31,783
|
)
|
|
$
|
(51,969
|
)
|
|
$
|
20,186
|
|
|
38.8
|
%
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(Amounts in thousands)
|
||||||||||
Revenue from services:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing (a)
|
$
|
621,258
|
|
|
$
|
459,195
|
|
|
$
|
274,219
|
|
Physician Staffing
|
115,336
|
|
|
121,145
|
|
|
126,125
|
|
|||
Other Human Capital Management Services
|
30,827
|
|
|
37,485
|
|
|
37,967
|
|
|||
|
$
|
767,421
|
|
|
$
|
617,825
|
|
|
$
|
438,311
|
|
|
|
|
|
|
|
||||||
Contribution income: (b)
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing (a)
|
$
|
54,499
|
|
|
$
|
36,486
|
|
|
$
|
18,668
|
|
Physician Staffing
|
10,213
|
|
|
6,540
|
|
|
8,695
|
|
|||
Other Human Capital Management Services
|
1,863
|
|
|
514
|
|
|
746
|
|
|||
|
66,575
|
|
|
43,540
|
|
|
28,109
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead
|
31,484
|
|
|
27,770
|
|
|
21,844
|
|
|||
Depreciation
|
3,856
|
|
|
3,866
|
|
|
3,886
|
|
|||
Amortization
|
4,210
|
|
|
3,575
|
|
|
2,294
|
|
|||
Loss on sale of business (c)
|
2,184
|
|
|
—
|
|
|
—
|
|
|||
Acquisition and integration costs
|
902
|
|
|
7,957
|
|
|
473
|
|
|||
Restructuring costs
|
1,274
|
|
|
840
|
|
|
484
|
|
|||
Legal settlement charge
|
—
|
|
|
—
|
|
|
750
|
|
|||
Impairment charges (d)
|
2,100
|
|
|
10,000
|
|
|
6,400
|
|
|||
Loss from operations
|
$
|
20,565
|
|
|
$
|
(10,468
|
)
|
|
$
|
(8,022
|
)
|
|
Year Ended December 31,
|
|
|
|
Percent
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
FTEs
|
6,624
|
|
|
4,764
|
|
|
1,860
|
|
|
39.0
|
%
|
|||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
|
257
|
|
|
$
|
264
|
|
|
$
|
(7
|
)
|
|
(2.7
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Physician Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
Days filled
|
77,601
|
|
|
82,473
|
|
|
(4,872
|
)
|
|
(5.9
|
)%
|
|||
Revenue per day filled
|
$
|
1,463
|
|
|
$
|
1,457
|
|
|
$
|
6
|
|
|
0.4
|
%
|
|
Year Ended December 31,
|
|
|
|
Percent
|
|||||||||
|
2014
|
|
2013
|
|
Change
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
FTEs
|
4,764
|
|
|
2,393
|
|
|
2,371
|
|
|
99.1
|
%
|
|||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
|
264
|
|
|
$
|
314
|
|
|
$
|
(50
|
)
|
|
(15.9
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Physician Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
Days filled
|
82,473
|
|
|
87,386
|
|
|
(4,913
|
)
|
|
(5.6
|
)%
|
|||
Revenue per day filled
|
$
|
1,457
|
|
|
$
|
1,524
|
|
|
$
|
(67
|
)
|
|
(4.4
|
)%
|
Commitments
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
|
|
(Unaudited, amounts in thousands)
|
||||||||||||||||||||||||||
Senior Secured Asset-Based Loan (a)
|
|
$
|
8,000
|
|
|
$
|
8,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Second Lien Term Loan
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
30,000
|
|
|
—
|
|
|
—
|
|
|||||||
Convertible Notes (b)
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|||||||
Interest on debt (c)
|
|
16,782
|
|
|
4,249
|
|
|
3,845
|
|
|
4,102
|
|
|
3,064
|
|
|
1,522
|
|
|
—
|
|
|||||||
Contingent purchase price liability (d)
|
|
3,687
|
|
|
1,005
|
|
|
820
|
|
|
203
|
|
|
199
|
|
|
1,460
|
|
|
—
|
|
|||||||
Deferred purchase price liability (e)
|
|
2,184
|
|
|
2,184
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Capital lease obligations
|
|
94
|
|
|
71
|
|
|
13
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Operating lease obligations (f)
|
|
41,377
|
|
|
6,662
|
|
|
6,114
|
|
|
5,204
|
|
|
4,143
|
|
|
3,781
|
|
|
15,473
|
|
|||||||
|
|
$
|
127,124
|
|
|
$
|
22,171
|
|
|
$
|
10,792
|
|
|
$
|
9,517
|
|
|
$
|
37,408
|
|
|
$
|
31,763
|
|
|
$
|
15,473
|
|
(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)
|
The Convertible Notes are convertible into shares of our common stock at the option of the holders thereof at any time. After three years from the issuance date, we have the right to force a conversion of the Convertible Notes if the volume-weighted average price per share of our Common Stock exceeds
125%
of the then conversion price for
20
days of a
30
day trading period, which could be as early as 2017. See Note 8 - Debt to our consolidated financial statements.
|
(c)
|
Interest on debt represents payments due through maturity for our Second Lien Term Loan and Convertible Notes. Interest payments on our Second Lien Term Loan were calculated using a estimated forward LIBOR rate plus the current margin rate of 4.75%. Interest on our Convertible Notes were calculated using the fixed interest rate of 8.0% and assuming no conversion. Interest payments on our Senior Secured Asset-Based Loan were calculated using the current rate of interest and projected repayments.
|
(d)
|
The contingent purchase price liability represents the fair value of the potential earnout liability due the seller related to the Mediscan acquisition. While it is not certain if, or when, these contingent payments will be made, we have included the payments in the table based on our best estimates of the amounts and dates when the contingencies may be resolved.
|
(e)
|
The deferred purchase price liability represents the expected amount due the seller on March 31, 2016, related to the MSN acquisition.
|
(f)
|
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 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 business 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.
|
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
|
395,625
|
|
|
$
|
6.28
|
|
|
1,023,133
|
|
Equity compensation plans not approved by
security holders
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
395,625
|
|
|
$
|
6.28
|
|
|
1,023,133
|
|
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: President and Chief Executive Officer
|
|
|
Date: March 11, 2016
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ William J. Grubbs
|
|
President, Chief Executive Officer,
|
|
March 11, 2016
|
William J. Grubbs
|
|
Director (Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ William J. Burns
|
|
Chief Financial Officer
|
|
March 11, 2016
|
William J. Burns
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
|
|
|
/s/ W. Larry Cash
|
|
Director
|
|
March 11, 2016
|
W. Larry Cash
|
|
|
|
|
|
|
|
|
|
/s/ Thomas C. Dircks
|
|
Director
|
|
March 11, 2016
|
Thomas C. Dircks
|
|
|
|
|
|
|
|
|
|
/s/ Gale Fitzgerald
|
|
Director
|
|
March 11, 2016
|
Gale Fitzgerald
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Mastaler
|
|
Director
|
|
March 11, 2016
|
Richard M. Mastaler
|
|
|
|
|
|
|
|
|
|
/s/ Mark Perlberg
|
|
Director
|
|
March 11, 2016
|
Mark Perlberg
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Trunfio
|
|
Director
|
|
March 11, 2016
|
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
|
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
|
|
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.)
|
10.6
|
|
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.)
|
10.7 #
|
|
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.)
|
10.8 #
|
|
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.)
|
10.9
|
|
Lease Agreement, dated July 1, 2010, between Goldberg Brothers Real Estate LLC and MCVT, Inc. (Previously filed as an incorporated by reference herein.)
|
10.10
|
|
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.)
|
10.11 #
|
|
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.)
|
10.12
|
|
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.)
|
10.13
|
|
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.)
|
10.14
|
|
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.)
|
No.
|
|
Description
|
10.15
|
|
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.)
|
10.16 #
|
|
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.)
|
10.17
|
|
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.)
|
10.18
|
|
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.)
|
10.19
|
|
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.)
|
10.20
|
|
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.)
|
10.21 #
|
|
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.)
|
10.22
|
|
Lease Agreement, dated November 22, 1999, by and between Fairfax Boca 92, L.P. and Medical Staffing Network, Inc. (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.23
|
|
First Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated July 31, 2001 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.24
|
|
Second Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated March 20, 2002 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.25
|
|
Third Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated May 14, 2002 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.26
|
|
Fourth Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated December 13, 2002 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.27
|
|
Fifth Amendment to Lease Agreement by and between Fairfax Boca 92 L.P. and Medical Staffing Network, Inc., dated February 11, 2003 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.28
|
|
Sixth Amendment to Lease Agreement by and between Teachers Insurance and Annuity Association of America and Medical Staffing Network, LLC, dated January 3, 2011 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.29
|
|
Seventh Amendment to Lease Agreement by and between Teachers Insurance and Annuity Association of America and Medical Staffing Network, LLC, dated March 1, 2011 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.30
|
|
Eighth Amendment to Lease Agreement by and between Teachers Insurance and Annuity Association of America, and Medical Staffing Network, LLC, dated November 22, 2011 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2014 and incorporated by reference herein.)
|
10.31
|
|
Second Amendment to Second Lien Loan and Security Agreement, dated July 22, 2015, by and among Cross Country Healthcare, Inc., as borrower, certain of its domestic subsidiaries, as guarantors, the lenders party thereto, and BSP Agency, LLC, as agent (Previously filed as an exhibit to the Company’s Form 8-K dated July 23, 2015 and incorporated by reference herein.)
|
No.
|
|
Description
|
10.32
|
|
Agreement and Plan of Merger, dated as of July 27, 2015, by and among Cross Country Education, LLC, Cross Country Healthcare, Inc., CC Education, LLC and PES, Inc. (Previously filed as an exhibit to the Company's Form 8-K dated July 30, 2015 and incorporated by reference herein)
|
10.33
|
|
Fourth Amendment to Lease Agreement by and between Granite Meridian LLC and Cross Country Healthcare, Inc., dated September 29, 2015 (Previously filed as an exhibit to the Company’s Form 8-K dated October 2, 2015 and incorporated by reference herein.)
|
10.34
|
|
Ninth Amendment to Lease Agreement by and between Mainstreet CV North 40, LLC and Cross Country Healthcare, Inc., dated September 29, 2015 (Previously filed as an exhibit to the Company’s Form 8-K dated October 2, 2015 and incorporated by reference herein.)
|
10.35
|
|
Lease Agreement by and between Mainstreet CV North 40, LLC and Cross Country Healthcare, Inc., dated September 29, 2015 (Previously filed as an exhibit to the Company’s Form 8-K dated October 2, 2015 and incorporated by reference herein.)
|
10.36
|
|
Stock Purchase Agreement, dated October 19, 2015, by and among Cross Country Healthcare, Inc. and Dennis Ducham, Emily Serebryany, Emily Serebryany Trust dated 4/16/14, Val Serebryany, and Val Serebryany Family Trust dated 2/18/14 (Previously filed as an exhibit to the Company's Form 8-K dated October 20, 2015 and incorporated by reference herein)
|
10.37
|
|
Asset Purchase Agreement between Mediscan, Inc. and Direct Ed Solutions, Inc. and Mihal Spiegel, dated August 19, 2014 (Previously filed as an exhibit to the Company's Form 8-K dated November 3, 2015 and incorporated by reference herein.)
|
10.38
|
|
Employment Agreement between Cross Country Healthcare, Inc. and Dennis Ducham, dated October 30, 2015 (Previously filed as an exhibit to the Company's Form 8-K dated November 3, 2015 and incorporated by reference herein.)
|
10.39
|
|
Employment Agreement between Cross Country Healthcare, Inc. and Val Serebryany, dated October 30, 2015 (Previously filed as an exhibit to the Company's Form 8-K dated November 3, 2015 and incorporated by reference herein.)
|
10.40
|
|
Restricted Stock Agreement between Cross Country Healthcare, Inc. and New Mediscan Diagnostic Services, Inc., dated October 30, 2015 (Previously filed as an exhibit to the Company's Form 8-K dated November 3, 2015 and incorporated by reference herein.)
|
10.41
|
|
Lease Agreement between Golden Egg, LLC and Mediscan Staffing Services, dba Mediscan Diagnostics, Mediscan Therapy Inc., Direct Ed Solutions, and Direct Ed Specialized Services, dated August 4, 2015 (Previously filed as an exhibit to the Company's Form 8-K dated November 3, 2015 and incorporated by reference herein.)
|
10.42
|
|
First Amendment to Lease Agreement between Golden Egg, LLC and Mediscan Diagnostic Services, Mediscan Nursing Staffing, Direct Ed Solutions, and Direct Ed Specialized Services, dated October 30, 2015 (Previously filed as an exhibit to the Company's Form 8-K dated November 3, 2015 and incorporated by reference herein.)
|
*10.43
|
|
Third Amendment to Lease Agreement between RNSI City Place Owner, LLC and Cejka Search, Inc., dated December 2, 2015
|
*10.44 #
|
|
Employment Agreement, dated as of March 9, 2016, between William J. Grubbs and the Registrant
|
*14.1
|
|
Code of Ethics, revised February 2, 2016
|
16.1
|
|
Letter re Change in Certifying Accountant (Previously filed as exhibit to the Company's Form 8-K dated March 13, 2015 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 Deloitte & Touche LLP, Independent Registered Public Accounting Firm
|
*23.2
|
|
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/ DELOITTE & TOUCHE LLP
|
|
Certified Public Accountants
|
|
|
|
Boca Raton, Florida
|
|
March 11, 2016
|
|
|
/s/ Ernst & Young LLP
|
|
Certified Public Accountants
|
|
|
Boca Raton, Florida
|
|
March 6, 2015
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
2,453
|
|
|
$
|
4,995
|
|
Accounts receivable, net of allowances of $4,045 in 2015 and $1,425 in 2014
|
146,873
|
|
|
113,129
|
|
||
Income taxes receivable
|
—
|
|
|
307
|
|
||
Prepaid expenses
|
4,521
|
|
|
6,073
|
|
||
Insurance recovery receivable
|
2,866
|
|
|
5,624
|
|
||
Other current assets
|
2,032
|
|
|
1,055
|
|
||
Total current assets
|
158,745
|
|
|
131,183
|
|
||
Property and equipment
|
10,470
|
|
|
12,133
|
|
||
Trade Names, net
|
39,252
|
|
|
38,201
|
|
||
Goodwill
|
95,096
|
|
|
90,647
|
|
||
Other identifiable intangible assets, net of accumulated amortization of $38,370 in 2015 and $34,209 in 2014
|
43,662
|
|
|
33,823
|
|
||
Debt issuance costs, net
|
878
|
|
|
1,257
|
|
||
Other non-current assets
|
17,994
|
|
|
17,889
|
|
||
Total assets
|
$
|
366,097
|
|
|
$
|
325,133
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
41,098
|
|
|
$
|
27,314
|
|
Accrued compensation and benefits
|
29,402
|
|
|
28,731
|
|
||
Current portion of long-term debt and capital lease obligations
|
8,071
|
|
|
3,607
|
|
||
Sales tax payable
|
2,411
|
|
|
2,573
|
|
||
Deferred purchase price
|
2,184
|
|
|
—
|
|
||
Deferred tax liabilities
|
—
|
|
|
1,981
|
|
||
Other current liabilities
|
2,880
|
|
|
2,790
|
|
||
Total current liabilities
|
86,046
|
|
|
66,996
|
|
||
Long-term debt and capital lease obligations, less current portion
|
81,803
|
|
|
70,467
|
|
||
Non-current deferred tax liabilities
|
18,475
|
|
|
18,038
|
|
||
Long-term accrued claims
|
30,070
|
|
|
32,068
|
|
||
Long-term deferred purchase price
|
3,533
|
|
|
2,333
|
|
||
Other long-term liabilities
|
4,826
|
|
|
4,899
|
|
||
Total liabilities
|
224,753
|
|
|
194,801
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock—$0.0001 par value; 100,000,000 shares authorized; 31,951,960 and 31,292,596 shares issued and outstanding at December 31, 2015 and 2014, respectively
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
254,108
|
|
|
247,467
|
|
||
Accumulated other comprehensive loss
|
(1,207
|
)
|
|
(1,118
|
)
|
||
Accumulated deficit
|
(112,056
|
)
|
|
(116,474
|
)
|
||
Total Cross Country Healthcare stockholders' equity
|
140,848
|
|
|
129,878
|
|
||
Noncontrolling interest
|
496
|
|
|
454
|
|
||
Total stockholders' equity
|
141,344
|
|
|
130,332
|
|
||
Total liabilities and stockholders' equity
|
$
|
366,097
|
|
|
$
|
325,133
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Revenue from services
|
$
|
767,421
|
|
|
$
|
617,825
|
|
|
$
|
438,311
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Direct operating expenses
|
570,056
|
|
|
460,021
|
|
|
324,851
|
|
|||
Selling, general and administrative expenses
|
161,275
|
|
|
141,018
|
|
|
106,117
|
|
|||
Bad debt expense
|
999
|
|
|
1,016
|
|
|
1,078
|
|
|||
Depreciation
|
3,856
|
|
|
3,866
|
|
|
3,886
|
|
|||
Amortization
|
4,210
|
|
|
3,575
|
|
|
2,294
|
|
|||
Loss on sale of business
|
2,184
|
|
|
—
|
|
|
—
|
|
|||
Acquisition and integration costs
|
902
|
|
|
7,957
|
|
|
473
|
|
|||
Restructuring costs
|
1,274
|
|
|
840
|
|
|
484
|
|
|||
Legal settlement charge
|
—
|
|
|
—
|
|
|
750
|
|
|||
Impairment charges
|
2,100
|
|
|
10,000
|
|
|
6,400
|
|
|||
Total operating expenses
|
746,856
|
|
|
628,293
|
|
|
446,333
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) from operations
|
20,565
|
|
|
(10,468
|
)
|
|
(8,022
|
)
|
|||
|
|
|
|
|
|
||||||
Other expenses (income):
|
|
|
|
|
|
||||||
Interest expense
|
6,810
|
|
|
4,160
|
|
|
849
|
|
|||
Loss on derivative liability
|
9,901
|
|
|
16,671
|
|
|
—
|
|
|||
Loss on early extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
1,419
|
|
|||
Other (income) expense, net
|
(306
|
)
|
|
19
|
|
|
(251
|
)
|
|||
Income (loss) from continuing operations before income taxes
|
4,160
|
|
|
(31,318
|
)
|
|
(10,039
|
)
|
|||
Income tax (benefit) expense
|
(794
|
)
|
|
216
|
|
|
44,211
|
|
|||
Income (loss) from continuing operations
|
4,954
|
|
|
(31,534
|
)
|
|
(54,250
|
)
|
|||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
2,281
|
|
|||
Consolidated net income (loss)
|
4,954
|
|
|
(31,534
|
)
|
|
(51,969
|
)
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
536
|
|
|
249
|
|
|
—
|
|
|||
Net income (loss) attributable to common shareholders
|
$
|
4,418
|
|
|
$
|
(31,783
|
)
|
|
$
|
(51,969
|
)
|
|
|
|
|
|
|
||||||
Basic and diluted income (loss) per share attributable to common shareholders
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
$
|
(1.75
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.07
|
|
|||
Net income (loss)
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
$
|
(1.68
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
31,514
|
|
|
31,190
|
|
|
31,009
|
|
|||
Diluted
|
32,162
|
|
|
31,190
|
|
|
31,009
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
Consolidated net income (loss)
|
$
|
4,954
|
|
|
$
|
(31,534
|
)
|
|
$
|
(51,969
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive income, before income tax:
|
|
|
|
|
|
|
|
|
|||
Unrealized foreign currency translation (loss) gain
|
(89
|
)
|
|
14
|
|
|
(386
|
)
|
|||
Reclassification of currency translation adjustments (see Note 2 - Comprehensive Income)
|
—
|
|
|
—
|
|
|
2,336
|
|
|||
Other comprehensive (loss) income, before income taxes
|
(89
|
)
|
|
14
|
|
|
1,950
|
|
|||
Income tax expense (benefit) related to items of other comprehensive income
|
—
|
|
|
162
|
|
|
(162
|
)
|
|||
Other comprehensive (loss) income, net of tax
|
(89
|
)
|
|
(148
|
)
|
|
2,112
|
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
4,865
|
|
|
(31,682
|
)
|
|
(49,857
|
)
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
536
|
|
|
249
|
|
|
—
|
|
|||
Comprehensive income (loss) attributable to common shareholders
|
$
|
4,329
|
|
|
$
|
(31,931
|
)
|
|
$
|
(49,857
|
)
|
|
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, 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
|
—
|
|
|
—
|
|
|
—
|
|
|
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
|
|
||||||
Exercise of stock options
|
119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock
|
191
|
|
|
—
|
|
|
(543
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(543
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,460
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,460
|
|
||||||
Foreign currency translation adjustment, net of deferred taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
|
—
|
|
|
—
|
|
|
(89
|
)
|
||||||
Acquisition of Mediscan
|
350
|
|
|
—
|
|
|
4,724
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,724
|
|
||||||
Distribution to noncontrolling shareholder
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(494
|
)
|
|
(494
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,418
|
|
|
536
|
|
|
4,954
|
|
||||||
Balances at December 31, 2015
|
31,952
|
|
|
$
|
3
|
|
|
$
|
254,108
|
|
|
$
|
(1,207
|
)
|
|
$
|
(112,056
|
)
|
|
$
|
496
|
|
|
$
|
141,344
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Consolidated net income (loss)
|
$
|
4,954
|
|
|
$
|
(31,534
|
)
|
|
$
|
(51,969
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
8,066
|
|
|
7,441
|
|
|
6,180
|
|
|||
Amortization of debt discount and debt issuance costs
|
1,886
|
|
|
1,064
|
|
|
233
|
|
|||
Provision for allowances
|
1,779
|
|
|
1,016
|
|
|
1,083
|
|
|||
Deferred income tax (benefit) expense
|
(1,544
|
)
|
|
(857
|
)
|
|
45,900
|
|
|||
Loss on derivative liability
|
9,901
|
|
|
16,671
|
|
|
—
|
|
|||
Impairment charges
|
2,100
|
|
|
10,000
|
|
|
6,400
|
|
|||
Loss on early extinguishment and modification of debt
|
—
|
|
|
—
|
|
|
1,419
|
|
|||
Equity compensation
|
2,460
|
|
|
1,387
|
|
|
2,100
|
|
|||
Loss (gain) on sale of business
|
2,184
|
|
|
—
|
|
|
(3,969
|
)
|
|||
Other noncash costs
|
20
|
|
|
114
|
|
|
12
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(28,708
|
)
|
|
(16,119
|
)
|
|
2,036
|
|
|||
Prepaid expenses and other assets
|
2,663
|
|
|
1,371
|
|
|
(1,848
|
)
|
|||
Income taxes
|
375
|
|
|
58
|
|
|
(138
|
)
|
|||
Accounts payable and accrued expenses
|
11,213
|
|
|
5,654
|
|
|
(320
|
)
|
|||
Other liabilities
|
886
|
|
|
(338
|
)
|
|
1,540
|
|
|||
Net cash provided by (used in) operating activities
|
18,235
|
|
|
(4,072
|
)
|
|
8,659
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of businesses
|
7,500
|
|
|
3,750
|
|
|
45,655
|
|
|||
Acquisitions, net of cash acquired
|
(28,870
|
)
|
|
(44,631
|
)
|
|
(28,700
|
)
|
|||
Transaction costs related to sale of business
|
(338
|
)
|
|
—
|
|
|
—
|
|
|||
Purchases of property and equipment
|
(2,362
|
)
|
|
(4,571
|
)
|
|
(1,750
|
)
|
|||
Net cash (used in) provided by investing activities
|
(24,070
|
)
|
|
(45,452
|
)
|
|
15,205
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from borrowing on Second Lien Term Loan
|
—
|
|
|
28,875
|
|
|
—
|
|
|||
Proceeds from borrowing on Convertible Note
|
—
|
|
|
24,063
|
|
|
—
|
|
|||
Borrowings under Senior Secured Asset-Based revolving credit facility
|
64,100
|
|
|
61,205
|
|
|
63,444
|
|
|||
Repayments on Senior Secured Asset-Based revolving credit facility
|
(59,600
|
)
|
|
(66,105
|
)
|
|
(55,044
|
)
|
|||
Principal payments on term loan
|
—
|
|
|
—
|
|
|
(23,125
|
)
|
|||
Repayments on revolving credit facility
|
—
|
|
|
—
|
|
|
(10,000
|
)
|
|||
Repayments of capital lease obligations
|
(108
|
)
|
|
(122
|
)
|
|
(530
|
)
|
|||
Repurchase of stock for tax withholdings
|
(543
|
)
|
|
(245
|
)
|
|
(300
|
)
|
|||
Cash payment to noncontrolling shareholder
|
(494
|
)
|
|
(119
|
)
|
|
—
|
|
|||
Debt issuance costs
|
—
|
|
|
(1,093
|
)
|
|
(506
|
)
|
|||
Net cash provided by (used in) financing activities
|
3,355
|
|
|
46,459
|
|
|
(26,061
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
(62
|
)
|
|
5
|
|
|
(211
|
)
|
|||
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
(2,542
|
)
|
|
(3,060
|
)
|
|
(2,408
|
)
|
|||
Cash and cash equivalents at beginning of year
|
4,995
|
|
|
8,055
|
|
|
10,463
|
|
|||
Cash and cash equivalents at end of year
|
$
|
2,453
|
|
|
$
|
4,995
|
|
|
$
|
8,055
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
5,052
|
|
|
$
|
2,512
|
|
|
$
|
622
|
|
Income taxes paid
|
$
|
1,035
|
|
|
$
|
1,374
|
|
|
$
|
1,164
|
|
Income tax refunds
|
$
|
(51
|
)
|
|
$
|
(61
|
)
|
|
$
|
(323
|
)
|
|
(amounts in thousands)
|
||
Cash acquired
|
$
|
79
|
|
Accounts receivable
|
6,851
|
|
|
Other current assets
|
140
|
|
|
Property and equipment
|
20
|
|
|
Goodwill
|
14,338
|
|
|
Other intangible assets
|
17,200
|
|
|
Total assets acquired
|
38,628
|
|
|
Accounts payable and accrued expenses
|
306
|
|
|
Accrued employee compensation and benefits
|
1,410
|
|
|
Total liabilities assumed
|
1,716
|
|
|
Net assets acquired
|
$
|
36,912
|
|
|
(amounts in thousands)
|
||
Cash acquired
|
$
|
989
|
|
Accounts receivable
|
37,275
|
|
|
Other current assets
|
3,378
|
|
|
Property and equipment
|
5,329
|
|
|
Goodwill
|
13,381
|
|
|
Other intangible assets
|
17,100
|
|
|
Other assets
|
2,325
|
|
|
Total assets acquired
|
79,777
|
|
|
|
|
||
Accounts payable
|
6,736
|
|
|
Accrued employee compensation and benefits
|
14,731
|
|
|
Other liabilities
|
9,867
|
|
|
Total liabilities assumed
|
31,334
|
|
|
|
|
||
Noncontrolling interest
|
324
|
|
|
|
|
||
Net assets acquired
|
$
|
48,119
|
|
|
(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,
|
||||||||||||
|
2015
|
|
2014
|
||||||||||
|
(amounts in thousands)
|
||||||||||||
|
On-going Benefit Costs
|
Exit Costs
|
|
On-going Benefit Costs
|
Exit Costs
|
||||||||
Balance at beginning of period
|
$
|
762
|
|
$
|
868
|
|
|
$
|
—
|
|
$
|
—
|
|
Charged to acquisition and integration costs
|
17
|
|
88
|
|
|
1,453
|
|
1,132
|
|
||||
Reclassifications (a)
|
—
|
|
(255
|
)
|
|
—
|
|
—
|
|
||||
Payments
|
(732
|
)
|
(655
|
)
|
|
(691
|
)
|
(264
|
)
|
||||
Balance at end of period
|
$
|
47
|
|
$
|
46
|
|
|
$
|
762
|
|
$
|
868
|
|
(a)
|
Exit liability has been reduced as a result of a lease amendment and has been reclassified to deferred rent, which will be amortized over the remaining lease term.
|
|
Year Ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(unaudited, amounts in thousands except per share data)
|
||||||
|
|
|
|
||||
Revenue from services
|
$
|
800,353
|
|
|
$
|
771,955
|
|
|
|
|
|
||||
Net income (loss) attributable to common shareholders
|
$
|
5,436
|
|
|
$
|
(30,104
|
)
|
|
|
|
|
||||
Net income (loss) per common share attributable to common shareholders - basic and diluted
|
$
|
0.17
|
|
|
$
|
(0.97
|
)
|
|
Year Ended December 31, 2013
|
||
|
|
||
Revenue
|
$
|
7,939
|
|
|
|
||
Income from discontinued operations before gain on sale and income taxes
|
434
|
|
|
Gain on sale of discontinued operations
|
3,969
|
|
|
Income tax expense
|
(2,122
|
)
|
|
Income from discontinued operations, net of income taxes
|
$
|
2,281
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||
|
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
|
$
|
31,225
|
|
|
$
|
14,150
|
|
|
$
|
17,075
|
|
|
$
|
22,425
|
|
|
$
|
12,893
|
|
|
$
|
9,532
|
|
Customer relationships
|
47,204
|
|
|
20,734
|
|
|
26,470
|
|
|
42,004
|
|
|
17,870
|
|
|
24,134
|
|
||||||
Non-compete agreements
|
3,603
|
|
|
3,486
|
|
|
117
|
|
|
3,603
|
|
|
3,446
|
|
|
157
|
|
||||||
Trade names, definite-lived
|
3,200
|
|
|
49
|
|
|
3,151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
|
$
|
85,232
|
|
|
$
|
38,419
|
|
|
$
|
46,813
|
|
|
$
|
68,032
|
|
|
$
|
34,209
|
|
|
$
|
33,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
$
|
95,096
|
|
|
|
|
|
|
|
$
|
90,647
|
|
|||||
Trade names
|
|
|
|
|
|
|
36,101
|
|
|
|
|
|
|
|
|
38,201
|
|
||||||
|
|
|
|
|
|
|
$
|
131,197
|
|
|
|
|
|
|
|
|
$
|
128,848
|
|
Years Ending December 31:
|
(amounts in thousands)
|
||
2016
|
$
|
5,623
|
|
2017
|
5,578
|
|
|
2018
|
5,493
|
|
|
2019
|
5,457
|
|
|
2020
|
4,873
|
|
|
Thereafter
|
19,789
|
|
|
|
$
|
46,813
|
|
|
Nurse and
Allied Staffing
Segment
|
|
Physician
Staffing
Segment
|
|
Other Human
Capital
Management
Services
Segment
|
|
Total
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
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
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Changes to aggregate goodwill in 2015
|
|
|
|
|
|
|
|
||||||||
Sale of CCE (a)
|
—
|
|
|
—
|
|
|
(9,889
|
)
|
|
(9,889
|
)
|
||||
Goodwill acquired (b)
|
14,338
|
|
|
—
|
|
|
—
|
|
|
14,338
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Balances as of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
302,005
|
|
|
43,405
|
|
|
19,307
|
|
|
364,717
|
|
||||
Sale of CCE (a)
|
—
|
|
|
—
|
|
|
(9,889
|
)
|
|
(9,889
|
)
|
||||
Accumulated impairment loss
|
(259,732
|
)
|
|
—
|
|
|
—
|
|
|
(259,732
|
)
|
||||
Goodwill, net of impairment loss
|
$
|
42,273
|
|
|
$
|
43,405
|
|
|
$
|
9,418
|
|
|
$
|
95,096
|
|
(a)
|
See Note 4 - Disposal and Discontinued Operations.
|
(b)
|
Goodwill acquired from the acquisition of Mediscan. See Note 3 - Acquisitions.
|
|
|
|
December 31,
|
||||||
|
Useful Lives
|
|
2015
|
|
2014
|
||||
|
|
|
(amounts in thousands)
|
||||||
|
|
|
|
|
|
||||
Computer equipment
|
3-5 years
|
|
$
|
12,335
|
|
|
$
|
13,572
|
|
Computer software
|
3-5 years
|
|
27,565
|
|
|
34,100
|
|
||
Office equipment
|
5-7 years
|
|
2,241
|
|
|
3,846
|
|
||
Furniture and fixtures
|
5-7 years
|
|
3,411
|
|
|
3,562
|
|
||
Leasehold improvements
|
(a)
|
|
4,286
|
|
|
4,643
|
|
||
|
|
|
49,838
|
|
|
59,723
|
|
||
Less accumulated depreciation and amortization
|
|
|
(39,368
|
)
|
|
(47,590
|
)
|
||
|
|
|
$
|
10,470
|
|
|
$
|
12,133
|
|
(a)
|
See Note 2 – Summary of Significant Accounting Policies.
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(amounts in thousands)
|
||||||
Insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for workers’ compensation
|
$
|
1,403
|
|
|
$
|
3,316
|
|
Insurance recovery for professional liability
|
1,463
|
|
|
2,308
|
|
||
|
$
|
2,866
|
|
|
$
|
5,624
|
|
|
|
|
|
||||
Other non-current assets:
|
|
|
|
||||
Insurance recovery for workers’ compensation – long-term
|
$
|
6,281
|
|
|
$
|
5,677
|
|
Insurance recovery for professional liability – long-term
|
10,722
|
|
|
11,148
|
|
||
Non-current security deposits
|
991
|
|
|
1,064
|
|
||
|
$
|
17,994
|
|
|
$
|
17,889
|
|
|
|
|
|
||||
Accrued compensation and benefits:
|
|
|
|
||||
Salaries and payroll taxes
|
$
|
11,976
|
|
|
$
|
8,406
|
|
Bonuses
|
4,584
|
|
|
4,050
|
|
||
Accrual for workers’ compensation claims
|
5,151
|
|
|
6,996
|
|
||
Accrual for professional liability insurance
|
2,516
|
|
|
4,652
|
|
||
Accrual for health care benefits
|
3,009
|
|
|
2,206
|
|
||
Accrual for vacation
|
2,166
|
|
|
2,421
|
|
||
|
$
|
29,402
|
|
|
$
|
28,731
|
|
|
|
|
|
||||
Long-term accrued claims:
|
|
|
|
||||
Accrual for workers’ compensation claims
|
$
|
14,014
|
|
|
$
|
14,221
|
|
Accrual for professional liability insurance
|
16,056
|
|
|
17,847
|
|
||
|
$
|
30,070
|
|
|
$
|
32,068
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred compensation
|
$
|
1,412
|
|
|
$
|
1,510
|
|
Deferred rent
|
2,473
|
|
|
2,453
|
|
||
Long-term unrecognized tax benefits
|
819
|
|
|
889
|
|
||
Other
|
122
|
|
|
47
|
|
||
|
$
|
4,826
|
|
|
$
|
4,899
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(amounts in thousands)
|
||||||
Senior Secured Asset-Based, weighted average interest of 2.41% and 2.61% at December 31, 2015 and 2014, respectively
|
$
|
8,000
|
|
|
$
|
3,500
|
|
Second Lien Term Loan, net of unamortized discount of $786 and$1,011 at December 31, 2015 and 2014, respectively, interest 5.75% and 7.50% at December 31, 2015 and 2014, respectively
|
29,214
|
|
|
28,989
|
|
||
Convertible Notes, net of unamortized discount of $5,771 and $7,053 at December 31, 2015 and 2014, respectively, fixed rate interest 8.00%
|
19,229
|
|
|
17,947
|
|
||
Convertible Notes derivative liability
|
33,337
|
|
|
23,436
|
|
||
Capital lease obligations
|
94
|
|
|
202
|
|
||
Total debt
|
89,874
|
|
|
74,074
|
|
||
Less current portion
|
(8,071
|
)
|
|
(3,607
|
)
|
||
Long-term debt
|
$
|
81,803
|
|
|
$
|
70,467
|
|
|
Term Loan
|
|
Convertible Notes
|
|
Revolver
|
|
Capital Leases
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Through Years Ending December 31:
|
|
|
|
|
|
|
|
||||||||
2016
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,000
|
|
|
$
|
71
|
|
2017
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
||||
2018
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
||||
2019
|
30,000
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
2020
|
—
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
||||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
30,000
|
|
|
$
|
25,000
|
|
|
$
|
8,000
|
|
|
$
|
94
|
|
Pricing Level
|
Total Net Leverage Ratio
|
Applicable Margin
|
I
|
Less than 2.50:1.00
|
4.75%
|
II
|
Greater than or equal to 2.50:1.00
but less than or equal to 3.25:1.00
|
5.25%
|
III
|
Greater than 3.25:1.00
but less than or equal to 4:00:1.00
|
5.75%
|
IV
|
Greater than 4.00:1.00
|
6.50%
|
Above terms defined in accordance with the Second Lien Term Loan Agreement.
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
Financial Liabilities:
|
(amounts in thousands)
|
||||||
(Level 1)
|
|
|
|
||||
Deferred compensation
|
$
|
1,412
|
|
|
$
|
1,510
|
|
(Level 3)
|
|
|
|
|
|
||
Convertible notes derivative liability
|
$
|
33,337
|
|
|
$
|
23,436
|
|
Contingent purchase price liabilities
|
$
|
3,686
|
|
|
$
|
—
|
|
|
Contingent Purchase
|
|
Convertible Notes
|
||||
|
Price Liabilities
|
|
Derivative Liability
|
||||
|
(amounts in thousands)
|
||||||
|
|
|
|
||||
December 31, 2013
|
$
|
—
|
|
|
$
|
—
|
|
Additions
|
—
|
|
|
6,765
|
|
||
Valuation loss for the period
|
—
|
|
|
16,671
|
|
||
December 31, 2014
|
—
|
|
|
23,436
|
|
||
Additions
|
3,686
|
|
|
—
|
|
||
Valuation loss for the period
|
—
|
|
|
9,901
|
|
||
December 31, 2015
|
$
|
3,686
|
|
|
$
|
33,337
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||
|
(amounts in thousands)
|
||||||
(Level 3)
|
|
|
|
||||
MDA trade names
|
$
|
15,599
|
|
|
$
|
17,699
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
|||||||||
|
(amounts in thousands)
|
||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
(Level 2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second Lien Term Loan, net
|
$
|
29,214
|
|
|
$
|
30,600
|
|
|
$
|
28,989
|
|
|
$
|
29,900
|
|
Convertible Notes, net
|
$
|
19,229
|
|
|
$
|
23,250
|
|
|
$
|
17,947
|
|
|
$
|
19,200
|
|
Senior Secured Asset-Based Loan
|
$
|
8,000
|
|
|
$
|
8,000
|
|
|
$
|
3,500
|
|
|
$
|
3,500
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(amounts in thousands)
|
||||||||||
Continuing operations:
|
|
|
|
|
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
551
|
|
|
$
|
—
|
|
|
$
|
—
|
|
State
|
(21
|
)
|
|
811
|
|
|
540
|
|
|||
Foreign
|
220
|
|
|
262
|
|
|
416
|
|
|||
Total
|
750
|
|
|
1,073
|
|
|
956
|
|
|||
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
|
|
|
|||
Federal
|
(1,819
|
)
|
|
(1,320
|
)
|
|
37,822
|
|
|||
State
|
8
|
|
|
68
|
|
|
5,134
|
|
|||
Foreign
|
267
|
|
|
395
|
|
|
299
|
|
|||
Total
|
(1,544
|
)
|
|
(857
|
)
|
|
43,255
|
|
|||
Total income tax (benefit) expense for continuing operations
|
$
|
(794
|
)
|
|
$
|
216
|
|
|
$
|
44,211
|
|
|
|
|
|
|
|
||||||
The total income tax (benefit) provision is summarized as follows:
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
(794
|
)
|
|
$
|
216
|
|
|
$
|
44,211
|
|
Discontinued operations
|
—
|
|
|
—
|
|
|
2,122
|
|
|||
|
$
|
(794
|
)
|
|
$
|
216
|
|
|
$
|
46,333
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
|
(amounts in thousands)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Accrued other and prepaid expenses
|
$
|
2,973
|
|
|
$
|
2,823
|
|
Allowance for doubtful accounts
|
1,278
|
|
|
589
|
|
||
Intangible Assets
|
11,365
|
|
|
13,716
|
|
||
Net operating loss carryforwards
|
22,662
|
|
|
38,144
|
|
||
Derivative interest
|
10,144
|
|
|
6,370
|
|
||
Accrued professional liability
|
2,536
|
|
|
—
|
|
||
Accrued workers’ compensation
|
3,061
|
|
|
1,356
|
|
||
Share-based compensation
|
891
|
|
|
959
|
|
||
Depreciation
|
—
|
|
|
105
|
|
||
Credit carryforwards
|
797
|
|
|
—
|
|
||
Other
|
595
|
|
|
822
|
|
||
Gross deferred tax assets
|
56,302
|
|
|
64,884
|
|
||
Valuation allowance
|
(55,336
|
)
|
|
(63,616
|
)
|
||
|
966
|
|
|
1,268
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Depreciation
|
(123
|
)
|
|
—
|
|
||
Accrued professional liability
|
—
|
|
|
(92
|
)
|
||
Indefinite intangibles
|
(18,714
|
)
|
|
(19,683
|
)
|
||
Tax on unrepatriated earnings
|
(604
|
)
|
|
(336
|
)
|
||
Other
|
—
|
|
|
(1,176
|
)
|
||
|
(19,441
|
)
|
|
(21,287
|
)
|
||
Net deferred taxes
|
$
|
(18,475
|
)
|
|
$
|
(20,019
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(amounts in thousands)
|
||||||||||
Tax at U.S. statutory rate
|
$
|
1,456
|
|
|
$
|
(10,961
|
)
|
|
$
|
(3,514
|
)
|
State taxes, net of federal benefit
|
611
|
|
|
219
|
|
|
(190
|
)
|
|||
Non-deductible meals and entertainment
|
1,510
|
|
|
1,425
|
|
|
450
|
|
|||
Foreign tax expense
|
(6
|
)
|
|
44
|
|
|
554
|
|
|||
Valuation allowances
|
(5,078
|
)
|
|
12,038
|
|
|
48,556
|
|
|||
Uncertain tax positions
|
917
|
|
|
(996
|
)
|
|
(257
|
)
|
|||
Deferred tax write-offs
|
—
|
|
|
—
|
|
|
221
|
|
|||
Audit settlements
|
(624
|
)
|
|
—
|
|
|
160
|
|
|||
Tax on unrepatriated earnings
|
—
|
|
|
—
|
|
|
(1,465
|
)
|
|||
Tax true ups and other
|
420
|
|
|
(1,553
|
)
|
|
(304
|
)
|
|||
Total income tax (benefit) expense for continuing operations
|
$
|
(794
|
)
|
|
$
|
216
|
|
|
$
|
44,211
|
|
|
2015
|
|
2014
|
||||
|
(amounts in thousands)
|
||||||
Balance at January 1
|
$
|
3,777
|
|
|
$
|
4,986
|
|
Additions based on tax positions related to the current year
|
861
|
|
|
709
|
|
||
Additions based on tax positions related to prior years
|
62
|
|
|
91
|
|
||
Reductions based on settlements of tax positions related to prior years
|
(624
|
)
|
|
(344
|
)
|
||
Reductions for tax positions as a result of a lapse of the applicable statute of limitations
|
—
|
|
|
(1,578
|
)
|
||
Other
|
(5
|
)
|
|
(87
|
)
|
||
Balance at December 31
|
$
|
4,071
|
|
|
$
|
3,777
|
|
|
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, 2015
|
659,650
|
|
|
$
|
5.72
|
|
|
218,175
|
|
|
$
|
5.82
|
|
Granted
|
220,160
|
|
|
$
|
11.52
|
|
|
163,340
|
|
|
$
|
11.86
|
|
Vested
|
(239,062
|
)
|
|
$
|
5.75
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(54,260
|
)
|
|
$
|
6.48
|
|
|
(147,377
|
)
|
|
$
|
6.18
|
|
Unvested restricted stock awards, December 31, 2015
|
586,488
|
|
|
$
|
7.82
|
|
|
234,138
|
|
|
$
|
9.81
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Share option grants
|
—
|
|
|
—
|
|
|
324,000
|
|
|||
Weighted average grant date fair value of options granted during the period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.77
|
|
Total intrinsic value of options exercised
|
$
|
1,610,392
|
|
|
$
|
695,286
|
|
|
$
|
12,465
|
|
|
Year Ended December 31, 2013
|
|
Expected dividend yield
|
—
|
%
|
Expected volatility
|
48.00
|
%
|
Risk-free interest rate
|
0.79
|
%
|
Expected life
|
4.2 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
|
935,095
|
|
|
$4.16-$22.50
|
|
$8.27
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
—
|
|
|
|
|
||
Exercised
|
(293,625
|
)
|
|
$4.35-$8.56
|
|
$7.27
|
|
|
|
|
||
Forfeited/expired
|
(245,845
|
)
|
|
$4.35-$22.50
|
|
$12.68
|
|
|
|
|
||
Share options outstanding at end of year
|
395,625
|
|
|
$4.16-$22.50
|
|
$6.28
|
|
3.18
|
|
$
|
4,031,858
|
|
Share options exercisable at end of year
|
261,500
|
|
|
$4.16-$22.50
|
|
$6.91
|
|
2.67
|
|
$
|
2,509,977
|
|
Share options unvested at end of year
|
134,125
|
|
|
$4.16-$5.61
|
|
$5.04
|
|
4.17
|
|
$
|
1,521,881
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(amounts in thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
4,954
|
|
|
$
|
(31,534
|
)
|
|
$
|
(54,250
|
)
|
Less: Income attributable to noncontrolling interest in subsidiary
|
536
|
|
|
249
|
|
|
—
|
|
|||
Income (loss) from continuing operations attributable to common shareholders
|
4,418
|
|
|
(31,783
|
)
|
|
(54,250
|
)
|
|||
Income from discontinued operations, net of income taxes
|
—
|
|
|
—
|
|
|
2,281
|
|
|||
Net income (loss) attributable to common shareholders
|
$
|
4,418
|
|
|
$
|
(31,783
|
)
|
|
$
|
(51,969
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Basic weighted average common shares
|
31,514
|
|
|
31,190
|
|
|
31,009
|
|
|||
Effective of diluted shares:
|
|
|
|
|
|
||||||
Share-based awards
|
648
|
|
|
—
|
|
|
—
|
|
|||
Diluted weighted average common shares outstanding
|
32,162
|
|
|
31,190
|
|
|
31,009
|
|
|||
|
|
|
|
|
|
||||||
Basic and diluted income (loss) per share attributable to common shareholders
|
|
|
|
|
|
|
|
|
|||
Continuing operations
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
$
|
(1.75
|
)
|
Discontinued operations
|
—
|
|
|
—
|
|
|
0.07
|
|
|||
Net income (loss)
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
$
|
(1.68
|
)
|
|
Year Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Convertible notes and share-based awards
|
3,521,126
|
|
|
3,855,954
|
|
|
149,453
|
|
•
|
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, public and charter schools, outpatient clinics, ambulatory care facilities, physician practice groups, retailers, and many other healthcare providers throughout the U.S. The results of the Mediscan acquisition have been aggregated with the Company's Nurse and Allied Staffing business segment. See Note 3 - Acquisitions.
|
•
|
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 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.
|
•
|
Other Human Capital Management Services -
Subsequent to the sale of CCE, the education seminars business, on August 31, 2015, Other Human Capital Management Services includes retained and contingent search services for physicians and healthcare executives within the U.S.
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
|
(amounts in thousands)
|
||||||||||
Revenue from unaffiliated customers:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing (a)
|
$
|
621,258
|
|
|
$
|
459,195
|
|
|
$
|
274,219
|
|
Physician Staffing (a)
|
115,336
|
|
|
121,145
|
|
|
126,125
|
|
|||
Other Human Capital Management Services
|
30,827
|
|
|
37,485
|
|
|
37,967
|
|
|||
|
$
|
767,421
|
|
|
$
|
617,825
|
|
|
$
|
438,311
|
|
Contribution income: (b)
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing (a)
|
$
|
54,499
|
|
|
$
|
36,486
|
|
|
$
|
18,668
|
|
Physician Staffing (a)
|
10,213
|
|
|
6,540
|
|
|
8,695
|
|
|||
Other Human Capital Management Services
|
1,863
|
|
|
514
|
|
|
746
|
|
|||
|
66,575
|
|
|
43,540
|
|
|
28,109
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead
|
31,484
|
|
|
27,770
|
|
|
21,844
|
|
|||
Depreciation
|
3,856
|
|
|
3,866
|
|
|
3,886
|
|
|||
Amortization
|
4,210
|
|
|
3,575
|
|
|
2,294
|
|
|||
Loss on sale of business (c)
|
2,184
|
|
|
—
|
|
|
—
|
|
|||
Acquisition and integration costs
|
902
|
|
|
7,957
|
|
|
473
|
|
|||
Restructuring costs
|
1,274
|
|
|
840
|
|
|
484
|
|
|||
Legal settlement charge
|
—
|
|
|
—
|
|
|
750
|
|
|||
Impairment charges (d)
|
2,100
|
|
|
10,000
|
|
|
6,400
|
|
|||
Income (loss) from operations
|
$
|
20,565
|
|
|
$
|
(10,468
|
)
|
|
$
|
(8,022
|
)
|
(a)
|
Effective January 1, 2015, the Company reclassified a portion of its business from the Physician Staffing segment to the Nurse and Allied Staffing segment. For the years ended December 31, 2014 and 2013, revenue of
$2.2 million
and
$2.7 million
, respectively, and contribution income of
$0.2 million
for both 2014 and 2013, have been reclassified to conform to the current period presentation.
|
(b)
|
The Company defines contribution income as income or loss from operations before depreciation, amortization, loss on sale of business, 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)
|
On August 31, 2015, the Company completed the sale of CCE, and recognized a pre tax loss of
$2.2 million
related to the divestiture of the business. See Note 4 - Disposal and Discontinued Operations.
|
(d)
|
During the years ended December 31, 2015, 2014 and 2013, the Company recorded trade name impairment charges of
$2.1 million
,
$10.0 million
and
$6.4 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Identifiable Intangible Assets.
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2015
|
(amounts in thousands, except per share data)
|
||||||||||||||
Revenue from services
|
$
|
185,964
|
|
|
$
|
192,617
|
|
|
$
|
195,692
|
|
|
$
|
193,148
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
47,037
|
|
|
48,363
|
|
|
51,486
|
|
|
50,479
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated net income (loss)
|
3,050
|
|
|
2,680
|
|
|
5,151
|
|
|
(5,927
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders
|
2,934
|
|
|
2,573
|
|
|
5,009
|
|
|
(6,098
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders - Basic
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
$
|
0.16
|
|
|
$
|
(0.19
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders - Diluted
|
$
|
0.05
|
|
|
$
|
0.08
|
|
|
$
|
0.16
|
|
|
$
|
(0.19
|
)
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2014
|
(amounts in thousands, except per share data)
|
||||||||||||||
Revenue from services
|
$
|
118,091
|
|
|
$
|
122,656
|
|
|
$
|
188,944
|
|
|
$
|
188,134
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
30,450
|
|
|
32,436
|
|
|
47,277
|
|
|
47,641
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated net loss
|
(782
|
)
|
|
(3,181
|
)
|
|
(7,484
|
)
|
|
(20,087
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss attributable to common shareholders
|
(782
|
)
|
|
(3,181
|
)
|
|
(7,602
|
)
|
|
(20,218
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net loss per share attributable to common shareholders - Basic and Diluted
|
$
|
(0.03
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.24
|
)
|
|
$
|
(0.65
|
)
|
•
|
The Company recorded changes in the fair value of convertible notes derivative liability, recording a gain in the first and second quarters of 2015 of
$2.1 million
and
$0.4 million
, respectively, a loss in the third and fourth quarters of 2015 of
$2.9 million
and
$9.5 million
, respectively, and a loss in the third and fourth quarters of 2014 of
$7.3 million
and
$9.4 million
, respectively. See Note 9 - Convertible Notes Derivative Liability.
|
•
|
During the fourth quarter of 2015 and 2014, the Company recorded a trade name impairment charge of
$2.1 million
and
$10.0 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Identifiable Intangible Assets.
|
•
|
On August 31, 2015, the Company completed the sale of its education seminars business, CCE. Since the disposal did not represent a strategic shift that will have a major effect on the Company's operations and financial results, it was not reflected as discontinued operations. The transaction resulted in a pre tax loss of
$2.2 million
, and an after tax gain on the sale of CCE of
$1.3 million
. See Note 4 - Disposals and Discontinued Operations.
|
•
|
On October 30, 2015, the Company acquired all of the membership interests of Mediscan. 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 its date of acquisition. See Note 3 - Acquisitions.
|
•
|
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.
|
|
Balance at
Beginning of Period |
|
Charged to Operations
|
|
Write-offs
|
|
Recoveries
|
|
Other
Changes |
|
Balance at
End of Period |
||||||||||||
|
(amounts in thousands)
|
||||||||||||||||||||||
Allowances for Accounts Receivable
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Year Ended December 31, 2015
|
$
|
1,425
|
|
|
$
|
2,414
|
|
|
$
|
(923
|
)
|
|
$
|
1,129
|
|
|
$
|
—
|
|
|
$
|
4,045
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Valuation Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2015
|
$
|
63,616
|
|
|
$
|
(7,518
|
)
|
(a)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(762
|
)
|
(b)
|
$
|
55,336
|
|
Year Ended December 31, 2014
|
$
|
52,001
|
|
|
$
|
12,038
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(423
|
)
|
(c)
|
$
|
63,616
|
|
Year Ended December 31, 2013
|
$
|
4,033
|
|
|
$
|
48,406
|
|
|
$
|
(438
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
52,001
|
|
(a)
|
Current year charge includes a reversal of valuation allowance related to CCE.
|
(b)
|
Valuation allowance on deferred tax asset related to share-based compensation.
|
(c)
|
Related to foreign valuation allowance adjustment.
|
1.
|
MEETINGS OF STOCKHOLDERS
.
|
2.
|
BOARD OF DIRECTORS
.
|
3.
|
COMMITTEES
.
|
4.
|
OFFICERS
.
|
5.
|
SHARES
.
|
6.
|
INDEMNIFICATION AND INSURANCE
.
|
7.
|
MISCELLANEOUS
.
|
1.
|
Receipt of compensation, gifts, entertainment, discounts, services, loans or anything of value from suppliers, customers or other persons with whom the Company and its subsidiaries do business or any competitor of the Company or its subsidiaries (other than the receipt of minor gifts, entertainment, discounts, services or things of value not exceeding $200 in value in any one year from any one firm or person).
|
2.
|
Retention of a stock or other financial interest in any firm described in (1) above. This would not usually apply to the investment in securities of a publicly held corporation listed on a national securities exchange or traded in the over-the-counter market, unless the investor's judgment in transactions involving Cross Country and its subsidiaries might be affected by reason of the size of the investment, the amount of business done with the Company and its subsidiaries or other factors. As a general rule, a 2% aggregate interest by a person, members of his/her family and associated individuals or companies would present no problem.
|
3.
|
Acting as a director, officer, consultant, agent, employee, independent contractor or in some other capacity for a person or firm described in (1). In addition, certain statutes and regulations prohibit or restrict individuals from holding interlocking directorships and offices in certain situations. All directors and officers of the Company are required to inform the Chief Executive Officer prior to accepting any directorship or office with another corporation to ensure compliance with any such statutory requirements.
|
4.
|
Existence of an interest in any transaction involving the Company or its subsidiaries where such interest does or may affect the objective and impartial representation of the Company.
|
5.
|
Disclosure or other misuse of confidential information concerning Cross Country and its subsidiaries.
|
6.
|
Speculation or dealing in goods, commodities or products purchased, sold or otherwise dealt in or required or utilized by the Company and its subsidiaries.
|
7.
|
Appropriation to oneself of a business opportunity in which the Company or a subsidiary might reasonably be expected to be interested, without first making available the opportunity to the Company or subsidiary. For instance, a person might learn of a business, an invention or other property that is for sale and which the Company or a subsidiary might be interested in acquiring. A person who fails to disclose this knowledge to the Company and acquires the property may be legally accountable to the Company for any profits that might be realized.
|
1.
|
The use, directly or indirectly, of any funds or other assets of the Company or of any subsidiary for any purpose which would be in violation of any applicable law or regulation or would otherwise be unlawful is strictly prohibited.
|
2.
|
Even though lawful, the use, directly or indirectly, of any funds or other assets of the Company or any subsidiary for political contributions of any kind or in any form (whether cash, other property services or the furnishing of facilities), or the establishment or administration by the Company or any subsidiary of any committee or other organization for the raising or making of political contributions, is generally prohibited, whether within or without the United States. In jurisdictions where political contributions are lawful, exceptions to the prohibition may be authorized in rare cases and in limited amounts only in writing by one of the officers of the Company.
|
3.
|
No undisclosed or unrecorded bank account or other fund or asset of the Company or of any subsidiary shall be established or maintained for any purpose.
|
4.
|
All funds and assets of the Company and its subsidiaries shall be fully and properly recorded in the appropriate books and records of the Company and its subsidiaries.
|
5.
|
No false, misleading or artificial entries shall be made or permitted for any reason in the books and records of the Company or of any subsidiary. All transactions shall be appropriately authorized, evidenced by proper supporting documentation and recorded in accordance with generally accepted accounting practices.
|
6.
|
No transaction shall be effected and no payment shall be made on behalf of the Company or any of its subsidiaries with the intention or understanding that any part of the transaction or payment is effected or made for any purpose other than as described in the supporting documents and as described in the books and records of the Company.
|
7.
|
All payments shall be made in accordance with prevailing exchange control and tax regulations.
|
8.
|
No bribes, kickbacks, payoffs or other illegal or improper payments shall be made to commercial customers or suppliers or their intermediaries or to governmental officials for any purpose.
|
9.
|
No individual may enter or sign a transaction, contract order or Statement of Work, or approve an invoice, unless authorized in the Delegation of Authority, which is posted on the Company’s Intranet.
|
1.
|
Financial data (operating results, capital plans and expenditures, budget, etc.);
|
2.
|
Business forecasts and financial analyses;
|
3.
|
Development plans and strategies;
|
4.
|
Business programs, policies, plans, manuals, strategies and methods of operations;
|
5.
|
Customer and supplier lists and identity of outside consultants as well as customer identities and other basic customer information;
|
6.
|
Information obtained during the course of employment about another company, supplier or customer; 7.
Marketing and advertising plans, programs, strategies, analyses and research;
|
Subsidiary
|
|
Place of Incorporation
|
Assignment America, LLC
|
|
Delaware
|
Cejka Search, Inc.
|
|
Delaware
|
Credent Verification and Licensing Services, LLC
|
|
Delaware
|
Cross Country Holdco (Cyprus) Limited
|
|
Cyprus
|
Cross Country Infotech, Pvt. Ltd.
|
|
India
|
Cross Country Staffing, Inc.
|
|
Delaware
|
Intelistaf of Oklahoma LLC*
|
|
Delaware
|
Local Staff, LLC
|
|
Delaware
|
MDA Holdings, Inc.
|
|
Delaware
|
Medical Doctor Associates, LLC
|
|
Delaware
|
Mediscan Diagnostic Services, LLC
|
|
California
|
Mediscan Nursing Services, LLC
|
|
California
|
New Mediscan II, LLC
|
|
California
|
OWS, LLC
|
|
Delaware
|
Travel Staff, LLC
|
|
Delaware
|
/s/
DELOITTE & TOUCHE LLP
|
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;
|
3.
|
Registration Statement (Form S-8 No. 333-188519) pertaining to Cross Country Healthcare, Inc. and subsidiaries registration of additional shares of common stock under the Amended and Restated 2007 Stock Incentive Plan; and
|
4.
|
Registration Statement (Form S-8 No. 333-196639) pertaining to Cross Country Healthcare, Inc. and subsidiaries registration of additional shares of common stock under the Amended and Restated 2007 Stock Incentive Plan; and
|
5.
|
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;
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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;
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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 the 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 11, 2016
|
/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 the 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 11, 2016
|
/s/ William J. Burns
|
|
|
William J. Burns
Chief Financial Officer
|
Date:
|
March 11, 2016
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President and Chief Executive Officer
|
Date:
|
March 11, 2016
|
/s/ William J. Burns
|
|
|
William J. Burns
Chief Financial Officer
|