|
Delaware
|
0-33169
|
13-4066229
|
(State or other jurisdiction of
Incorporation or organization)
|
Commission
file number
|
(I.R.S. Employer
Identification Number)
|
|
|
|
PAGE
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30,
2016 |
|
December 31,
2015 |
||||
|
|
|
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
26,707
|
|
|
$
|
2,453
|
|
Accounts receivable, net of allowances of $3,833 in 2016 and $4,045 in 2015
|
147,173
|
|
|
146,873
|
|
||
Prepaid expenses
|
5,271
|
|
|
4,521
|
|
||
Insurance recovery receivable
|
2,704
|
|
|
2,866
|
|
||
Other current assets
|
1,555
|
|
|
2,032
|
|
||
Total current assets
|
183,410
|
|
|
158,745
|
|
||
Property and equipment, net of accumulated depreciation of $42,191 in 2016 and $39,368 in 2015
|
12,434
|
|
|
10,470
|
|
||
Goodwill
|
77,376
|
|
|
95,096
|
|
||
Other intangible assets, net of accumulated amortization of $43,664 in 2016 and $39,754 in 2015
|
72,413
|
|
|
82,914
|
|
||
Debt issuance costs, net
|
981
|
|
|
376
|
|
||
Other non-current assets
|
18,122
|
|
|
17,994
|
|
||
Total assets
|
$
|
364,736
|
|
|
$
|
365,595
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
45,397
|
|
|
$
|
41,098
|
|
Accrued compensation and benefits
|
30,651
|
|
|
29,402
|
|
||
Current portion of long-term debt and capital lease obligations
|
2,272
|
|
|
8,071
|
|
||
Deferred purchase price
|
—
|
|
|
2,184
|
|
||
Other current liabilities
|
6,386
|
|
|
5,291
|
|
||
Total current liabilities
|
84,706
|
|
|
86,046
|
|
||
Long-term debt and capital lease obligations, less current portion
|
70,236
|
|
|
81,301
|
|
||
Non-current deferred tax liabilities
|
12,585
|
|
|
18,475
|
|
||
Long-term accrued claims
|
30,156
|
|
|
30,070
|
|
||
Contingent consideration
|
2,773
|
|
|
3,533
|
|
||
Other long-term liabilities
|
5,037
|
|
|
4,826
|
|
||
Total liabilities
|
205,493
|
|
|
224,251
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
256,118
|
|
|
254,108
|
|
||
Accumulated other comprehensive loss
|
(1,219
|
)
|
|
(1,207
|
)
|
||
Accumulated deficit
|
(96,206
|
)
|
|
(112,056
|
)
|
||
Total Cross Country Healthcare stockholders' equity
|
158,696
|
|
|
140,848
|
|
||
Noncontrolling interest
|
547
|
|
|
496
|
|
||
Total stockholders' equity
|
159,243
|
|
|
141,344
|
|
||
Total liabilities and stockholders' equity
|
$
|
364,736
|
|
|
$
|
365,595
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Revenue from services
|
$
|
214,988
|
|
|
$
|
195,692
|
|
|
$
|
611,014
|
|
|
$
|
574,273
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|||||||
Direct operating expenses
|
156,778
|
|
|
144,206
|
|
|
446,912
|
|
|
427,387
|
|
||||
Selling, general and administrative expenses
|
45,922
|
|
|
39,227
|
|
|
133,530
|
|
|
121,284
|
|
||||
Bad debt expense
|
19
|
|
|
549
|
|
|
496
|
|
|
771
|
|
||||
Depreciation
|
995
|
|
|
953
|
|
|
3,059
|
|
|
2,902
|
|
||||
Amortization
|
1,097
|
|
|
982
|
|
|
3,910
|
|
|
2,947
|
|
||||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
—
|
|
|
2,184
|
|
||||
Acquisition-related contingent consideration
|
237
|
|
|
—
|
|
|
707
|
|
|
—
|
|
||||
Acquisition and integration costs
|
—
|
|
|
584
|
|
|
—
|
|
|
742
|
|
||||
Restructuring costs
|
611
|
|
|
140
|
|
|
611
|
|
|
1,147
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
24,311
|
|
|
—
|
|
||||
Total operating expenses
|
205,659
|
|
|
188,825
|
|
|
613,536
|
|
|
559,364
|
|
||||
Income (loss) from operations
|
9,329
|
|
|
6,867
|
|
|
(2,522
|
)
|
|
14,909
|
|
||||
Other expenses (income):
|
|
|
|
|
|
|
|
|
|
||||||
Interest expense
|
1,435
|
|
|
1,654
|
|
|
4,678
|
|
|
5,163
|
|
||||
(Gain) loss on derivative liability
|
(7,105
|
)
|
|
2,894
|
|
|
(19,970
|
)
|
|
385
|
|
||||
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
1,568
|
|
|
—
|
|
||||
Other income, net
|
(92
|
)
|
|
(100
|
)
|
|
(143
|
)
|
|
(30
|
)
|
||||
Income before income taxes
|
15,091
|
|
|
2,419
|
|
|
11,345
|
|
|
9,391
|
|
||||
Income tax expense (benefit)
|
802
|
|
|
(2,732
|
)
|
|
(5,035
|
)
|
|
(1,490
|
)
|
||||
Consolidated net income
|
14,289
|
|
|
5,151
|
|
|
16,380
|
|
|
10,881
|
|
||||
Less: Net income attributable to noncontrolling interest in subsidiary
|
223
|
|
|
142
|
|
|
529
|
|
|
365
|
|
||||
Net income attributable to common shareholders
|
$
|
14,066
|
|
|
$
|
5,009
|
|
|
$
|
15,851
|
|
|
$
|
10,516
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common shareholders - Basic
|
$
|
0.44
|
|
|
$
|
0.16
|
|
|
$
|
0.49
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders - Diluted
|
$
|
0.22
|
|
|
$
|
0.16
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|||||||
Basic
|
32,221
|
|
|
31,541
|
|
|
32,088
|
|
|
31,412
|
|
||||
Diluted
|
36,255
|
|
|
32,168
|
|
|
36,215
|
|
|
32,048
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
Consolidated net income
|
$
|
14,289
|
|
|
$
|
5,151
|
|
|
$
|
16,380
|
|
|
$
|
10,881
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss), before income tax:
|
|
|
|
|
|
|
|
|
|
||||||
Unrealized foreign currency translation gain (loss)
|
15
|
|
|
(54
|
)
|
|
(12
|
)
|
|
(72
|
)
|
||||
Other comprehensive income (loss), before income taxes
|
15
|
|
|
(54
|
)
|
|
(12
|
)
|
|
(72
|
)
|
||||
Income tax (benefit) expense related to items of other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other comprehensive income (loss), net of tax
|
15
|
|
|
(54
|
)
|
|
(12
|
)
|
|
(72
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Comprehensive income
|
14,304
|
|
|
5,097
|
|
|
16,368
|
|
|
10,809
|
|
||||
Less: Net income attributable to noncontrolling interest in subsidiary
|
223
|
|
|
142
|
|
|
529
|
|
|
365
|
|
||||
Comprehensive income attributable to common shareholders
|
$
|
14,081
|
|
|
$
|
4,955
|
|
|
$
|
15,839
|
|
|
$
|
10,444
|
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2016
|
|
2015
|
||||
Cash flows from operating activities
|
|
|
|
||||
Consolidated net income
|
$
|
16,380
|
|
|
$
|
10,881
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
6,969
|
|
|
5,849
|
|
||
Impairment charges
|
24,311
|
|
|
—
|
|
||
Amortization of debt discount and debt issuance costs
|
1,315
|
|
|
1,411
|
|
||
Provision for allowances
|
3,270
|
|
|
1,550
|
|
||
Loss on early extinguishment of debt
|
1,568
|
|
|
—
|
|
||
Deferred income tax benefit
|
(5,889
|
)
|
|
(1,387
|
)
|
||
(Gain) loss on derivative liability
|
(19,970
|
)
|
|
385
|
|
||
Acquisition-related contingent consideration
|
662
|
|
|
—
|
|
||
Equity compensation
|
2,614
|
|
|
1,773
|
|
||
Loss on sale of business
|
—
|
|
|
2,184
|
|
||
Other non-cash costs
|
6
|
|
|
20
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
(3,571
|
)
|
|
(13,927
|
)
|
||
Prepaid expenses and other assets
|
(1,036
|
)
|
|
1,779
|
|
||
Income taxes
|
(476
|
)
|
|
(407
|
)
|
||
Accounts payable and accrued expenses
|
5,634
|
|
|
7,825
|
|
||
Other liabilities
|
482
|
|
|
930
|
|
||
Net cash provided by operating activities
|
32,269
|
|
|
18,866
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
|
|
||
Proceeds from sale of business
|
500
|
|
|
7,500
|
|
||
Acquisition-related settlements - Medical Staffing Network
|
(2,155
|
)
|
|
(123
|
)
|
||
Acquisition-related settlements - Mediscan
|
297
|
|
|
—
|
|
||
Transaction costs related to sale of business
|
—
|
|
|
(338
|
)
|
||
Purchases of property and equipment
|
(5,024
|
)
|
|
(1,790
|
)
|
||
Net cash (used in) provided by investing activities
|
(6,382
|
)
|
|
5,249
|
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
|
|
||
Proceeds from borrowing on Senior Credit Facility
|
40,000
|
|
|
—
|
|
||
Debt issuance costs
|
(1,182
|
)
|
|
—
|
|
||
Principal payments on Second Lien Term Loan
|
(30,000
|
)
|
|
—
|
|
||
Extinguishment fees
|
(641
|
)
|
|
—
|
|
||
Repayments on Senior Secured Asset-Based revolving credit facility
|
(65,200
|
)
|
|
(42,300
|
)
|
||
Borrowings under Senior Secured Asset-Based revolving credit facility
|
57,200
|
|
|
38,800
|
|
||
Principal payment on Term Loan
|
(500
|
)
|
|
—
|
|
||
Repayments of capital lease obligations
|
(60
|
)
|
|
(80
|
)
|
||
Cash paid for shares withheld for taxes
|
(603
|
)
|
|
(543
|
)
|
||
Payment of contingent consideration
|
(152
|
)
|
|
—
|
|
||
Cash payments to noncontrolling shareholder
|
(478
|
)
|
|
(353
|
)
|
||
Net cash used in financing activities
|
(1,616
|
)
|
|
(4,476
|
)
|
||
|
|
|
|
||||
Effect of exchange rate changes on cash
|
(17
|
)
|
|
(50
|
)
|
||
|
|
|
|
||||
Change in cash and cash equivalents
|
24,254
|
|
|
19,589
|
|
||
Cash and cash equivalents at beginning of period
|
2,453
|
|
|
4,995
|
|
||
Cash and cash equivalents at end of period
|
$
|
26,707
|
|
|
$
|
24,584
|
|
1.
|
ORGANIZATION AND BASIS OF PRESENTATION
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
|
|
Nine Months Ended
|
||
|
|
September 30, 2015
|
||
|
|
(unaudited, amounts in thousands)
|
||
|
|
|
||
Revenue from services
|
|
$
|
603,495
|
|
|
|
|
||
Net income attributable to common shareholders
|
|
$
|
11,964
|
|
|
|
|
||
Net income per share attributable to common shareholders - Basic
|
|
$
|
0.38
|
|
|
|
|
||
Net income per share attributable to common shareholders - Diluted
|
|
$
|
0.37
|
|
5.
|
COMPREHENSIVE INCOME (LOSS)
|
6.
|
EARNINGS PER SHARE
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
September 30,
|
|
September 30,
|
|||||||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||||||
|
(amounts in thousands, except per share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net income attributable to common shareholders - Basic
|
$
|
14,066
|
|
|
$
|
5,009
|
|
|
$
|
15,851
|
|
|
$
|
10,516
|
|
Interest on Convertible Notes
|
853
|
|
|
*
|
|
|
2,529
|
|
|
*
|
|
||||
Gain on derivative liability
|
(7,105
|
)
|
|
*
|
|
|
(19,970
|
)
|
|
*
|
|
||||
Net income (loss) attributable to common shareholders - Diluted
|
$
|
7,814
|
|
|
$
|
5,009
|
|
|
$
|
(1,590
|
)
|
|
$
|
10,516
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares - Basic
|
32,221
|
|
|
31,541
|
|
|
32,088
|
|
|
31,412
|
|
||||
Effective of dilutive shares:
|
|
|
|
|
|
|
|
||||||||
Share-based awards
|
513
|
|
|
627
|
|
|
606
|
|
|
636
|
|
||||
Convertible Notes
|
3,521
|
|
|
—
|
|
|
3,521
|
|
|
—
|
|
||||
Weighted average common shares - Diluted
|
36,255
|
|
|
32,168
|
|
|
36,215
|
|
|
32,048
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income per share attributable to common shareholders - Basic
|
$
|
0.44
|
|
|
$
|
0.16
|
|
|
$
|
0.49
|
|
|
$
|
0.33
|
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders - Diluted
|
$
|
0.22
|
|
|
$
|
0.16
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.33
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
September 30,
|
|
September 30,
|
|||||||||
2016
|
|
2015
|
|
2016
|
|
2015
|
|||||
|
(amounts in thousands)
|
||||||||||
|
|
|
|
|
|
|
|
||||
Convertible Notes and share-based awards
|
2
|
|
|
3,521
|
|
|
13
|
|
|
3,521
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
|
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
|
|
|
$
|
15,646
|
|
|
$
|
15,579
|
|
|
$
|
31,225
|
|
|
$
|
14,150
|
|
|
$
|
17,075
|
|
Customer relationships
|
41,212
|
|
|
22,848
|
|
|
18,364
|
|
|
47,204
|
|
|
20,734
|
|
|
26,470
|
|
||||||
Non-compete agreements
|
3,603
|
|
|
3,516
|
|
|
87
|
|
|
3,603
|
|
|
3,486
|
|
|
117
|
|
||||||
Trade names, definite-lived
|
3,200
|
|
|
269
|
|
|
2,931
|
|
|
3,200
|
|
|
49
|
|
|
3,151
|
|
||||||
|
$
|
79,240
|
|
|
$
|
42,279
|
|
|
$
|
36,961
|
|
|
$
|
85,232
|
|
|
$
|
38,419
|
|
|
$
|
46,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Goodwill
|
|
|
|
|
|
|
$
|
77,376
|
|
|
|
|
|
|
|
|
$
|
95,096
|
|
||||
Trade names
|
|
|
|
|
|
|
35,452
|
|
|
|
|
|
|
|
|
36,101
|
|
||||||
|
|
|
|
|
|
|
$
|
112,828
|
|
|
|
|
|
|
|
|
$
|
131,197
|
|
|
Nurse
And Allied Staffing |
|
Physician
Staffing |
|
Other Human
Capital Management Services |
|
Total
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Balances as of December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
$
|
302,005
|
|
|
$
|
43,405
|
|
|
$
|
19,307
|
|
|
$
|
364,717
|
|
Sale of CCE
|
—
|
|
|
—
|
|
|
(9,889
|
)
|
|
(9,889
|
)
|
||||
Accumulated impairment loss
|
(259,732
|
)
|
|
—
|
|
|
—
|
|
|
(259,732
|
)
|
||||
Goodwill, net of impairment loss
|
42,273
|
|
|
43,405
|
|
|
9,418
|
|
|
95,096
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Changes to aggregate goodwill in 2016
|
|
|
|
|
|
|
|
||||||||
Impairment charges
|
—
|
|
|
(17,720
|
)
|
|
—
|
|
|
(17,720
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balances as of September 30, 2016
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
302,005
|
|
|
43,405
|
|
|
19,307
|
|
|
364,717
|
|
||||
Sale of CCE
|
—
|
|
|
—
|
|
|
(9,889
|
)
|
|
(9,889
|
)
|
||||
Accumulated impairment loss
|
(259,732
|
)
|
|
(17,720
|
)
|
|
—
|
|
|
(277,452
|
)
|
||||
Goodwill, net of impairment loss
|
$
|
42,273
|
|
|
$
|
25,685
|
|
|
$
|
9,418
|
|
|
$
|
77,376
|
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Term Loan, interest 2.77%
|
$
|
39,500
|
|
|
$
|
(388
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Senior Secured Asset-Based, weighted average interest 2.41%
|
—
|
|
|
—
|
|
|
8,000
|
|
|
—
|
|
||||
Second Lien Term Loan, interest 5.75%
|
—
|
|
|
—
|
|
|
30,000
|
|
|
(1,052
|
)
|
||||
Convertible Notes, fixed rate interest of 8.00%
|
25,000
|
|
|
(5,005
|
)
|
|
25,000
|
|
|
(6,007
|
)
|
||||
Convertible Notes derivative liability
|
13,367
|
|
|
—
|
|
|
33,337
|
|
|
—
|
|
||||
Capital lease obligations
|
34
|
|
|
—
|
|
|
94
|
|
|
—
|
|
||||
Total debt
|
77,901
|
|
|
(5,393
|
)
|
|
96,431
|
|
|
(7,059
|
)
|
||||
Less current portion
|
(2,272
|
)
|
|
—
|
|
|
(8,071
|
)
|
|
—
|
|
||||
Long-term debt
|
$
|
75,629
|
|
|
$
|
(5,393
|
)
|
|
$
|
88,360
|
|
|
$
|
(7,059
|
)
|
|
Term Loan
|
|
Convertible Notes
|
|
Capital Leases
|
||||||
|
(amounts in thousands)
|
||||||||||
Through Years Ending December 31:
|
|
|
|
|
|
||||||
2016
|
$
|
500
|
|
|
$
|
—
|
|
|
$
|
11
|
|
2017
|
2,500
|
|
|
—
|
|
|
13
|
|
|||
2018
|
3,000
|
|
|
—
|
|
|
8
|
|
|||
2019
|
3,500
|
|
|
—
|
|
|
2
|
|
|||
2020
|
4,000
|
|
|
25,000
|
|
|
—
|
|
|||
Thereafter
|
26,000
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
39,500
|
|
|
$
|
25,000
|
|
|
$
|
34
|
|
Level
|
Consolidated Net Leverage Ratio
|
Eurodollar Loans, LIBOR Index Rate Loans and Letter of Credit Fee
|
Base Rate Loans
|
Commitment Fee
|
I
|
Less than 1.50:1.00
|
1.75%
|
0.75%
|
0.25%
|
II
|
Greater than or equal to 1.50:1.00
but less than 2.00:1.00 |
2.00%
|
1.00%
|
0.30%
|
III
|
Greater than or equal to 2.00:1.00
but less than 2.50:1.00 |
2.25%
|
1.25%
|
0.30%
|
IV
|
Greater than or equal to 2.50:1.00
but less than 3.00:1.00 |
2.50%
|
1.50%
|
0.35%
|
V
|
Greater than or equal to 3.00:1.00
|
2.75%
|
1.75%
|
0.40%
|
10.
|
FAIR VALUE MEASUREMENTS
|
|
September 30, 2016
|
|
December 31, 2015
|
||||
Financial Liabilities:
|
(amounts in thousands)
|
||||||
(Level 1)
|
|
|
|
|
|
||
Deferred compensation
|
$
|
1,435
|
|
|
$
|
1,412
|
|
(Level 3)
|
|
|
|
||||
Convertible Notes derivative liability
|
$
|
13,367
|
|
|
$
|
33,337
|
|
Contingent purchase price liabilities
|
$
|
4,196
|
|
|
$
|
3,686
|
|
|
Contingent Purchase
|
|
Convertible Notes
|
||||
|
Price Liabilities (a)
|
|
Derivative Liability
|
||||
|
(amounts in thousands)
|
||||||
December 31, 2015
|
$
|
3,686
|
|
|
$
|
33,337
|
|
Payments
|
(17
|
)
|
|
—
|
|
||
Accretion expense
|
287
|
|
|
—
|
|
||
Valuation gain for the period
|
—
|
|
|
(16,436
|
)
|
||
March 31, 2016
|
3,956
|
|
|
16,901
|
|
||
Accretion expense
|
183
|
|
|
—
|
|
||
Valuation loss for the period
|
—
|
|
|
3,571
|
|
||
June 30, 2016
|
4,139
|
|
|
20,472
|
|
||
Payments
|
(135
|
)
|
|
—
|
|
||
Accretion expense
|
192
|
|
|
—
|
|
||
Valuation gain for the period
|
—
|
|
|
(7,105
|
)
|
||
September 30, 2016
|
$
|
4,196
|
|
|
$
|
13,367
|
|
(a)
|
Related to the Mediscan acquisition on October 30, 2015. See Note 3 - Acquisitions. The key assumptions used to calculate the fair value of contingent consideration at the acquisition date remained consistent at
September 30, 2016
. Accretion expense is included as acquisition-related contingent consideration on the condensed consolidated statement of operations. Should the assumptions regarding probability of achievement of certain targets change in future periods, the change in fair value of the contingent consideration will be recognized, along with accretion expense, as acquisition-related contingent consideration.
|
|
September 30, 2016
|
|
December 31, 2015
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
Financial Liabilities:
|
|
|
(amounts in thousands)
|
|
|
||||||||||
(Level 2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second Lien Term Loan, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,948
|
|
|
$
|
30,600
|
|
Term Loan, net
|
$
|
39,112
|
|
|
$
|
39,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible Notes, net
|
$
|
19,995
|
|
|
$
|
28,750
|
|
|
$
|
18,993
|
|
|
$
|
23,250
|
|
Senior Secured Asset-Based Loan
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,000
|
|
|
$
|
8,000
|
|
11.
|
STOCKHOLDERS’ EQUITY
|
|
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, 2016
|
586,488
|
|
|
$
|
7.82
|
|
|
234,138
|
|
|
$
|
9.81
|
|
Granted
|
246,020
|
|
|
$
|
12.01
|
|
|
202,442
|
|
|
$
|
11.63
|
|
Vested
|
(272,597
|
)
|
|
$
|
7.06
|
|
|
—
|
|
|
$
|
—
|
|
Forfeited
|
(14,000
|
)
|
|
$
|
10.93
|
|
|
(10,667
|
)
|
|
$
|
11.77
|
|
Unvested restricted stock awards, September 30, 2016
|
545,911
|
|
|
$
|
10.01
|
|
|
425,913
|
|
|
$
|
10.62
|
|
12.
|
SEGMENT DATA
|
●
|
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 schools 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) 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 on August 31, 2015, Other Human Capital Management Services includes retained and contingent search services for physicians, healthcare executives and other healthcare professionals within the U.S.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing
|
$
|
186,623
|
|
|
$
|
157,338
|
|
|
$
|
527,436
|
|
|
$
|
459,127
|
|
Physician Staffing
|
25,090
|
|
|
30,959
|
|
|
73,470
|
|
|
88,100
|
|
||||
Other Human Capital Management Services
|
3,275
|
|
|
7,395
|
|
|
10,108
|
|
|
27,046
|
|
||||
|
$
|
214,988
|
|
|
$
|
195,692
|
|
|
$
|
611,014
|
|
|
$
|
574,273
|
|
|
|
|
|
|
|
|
|
||||||||
Contribution income: (a)
|
|
|
|
|
|
|
|
||||||||
Nurse and Allied Staffing (b)
|
$
|
19,472
|
|
|
$
|
16,560
|
|
|
$
|
53,877
|
|
|
$
|
40,283
|
|
Physician Staffing
|
2,400
|
|
|
3,197
|
|
|
6,003
|
|
|
7,541
|
|
||||
Other Human Capital Management Services
|
(154
|
)
|
|
372
|
|
|
(196
|
)
|
|
1,721
|
|
||||
|
21,718
|
|
|
20,129
|
|
|
59,684
|
|
|
49,545
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate overhead (b)
|
9,449
|
|
|
8,419
|
|
|
29,608
|
|
|
24,714
|
|
||||
Depreciation
|
995
|
|
|
953
|
|
|
3,059
|
|
|
2,902
|
|
||||
Amortization
|
1,097
|
|
|
982
|
|
|
3,910
|
|
|
2,947
|
|
||||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
—
|
|
|
2,184
|
|
||||
Acquisition and integration costs
|
—
|
|
|
584
|
|
|
—
|
|
|
742
|
|
||||
Acquisition-related contingent consideration
|
237
|
|
|
—
|
|
|
707
|
|
|
—
|
|
||||
Restructuring costs
|
611
|
|
|
140
|
|
|
611
|
|
|
1,147
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
24,311
|
|
|
—
|
|
||||
Income (loss) from operations
|
$
|
9,329
|
|
|
$
|
6,867
|
|
|
$
|
(2,522
|
)
|
|
$
|
14,909
|
|
(a)
|
The Company defines contribution income as income or loss from operations before depreciation, amortization, loss on sale of business, acquisition and integration costs, acquisition-related contingent consideration, restructuring costs, 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.
|
(b)
|
For the
three and nine
months ended
September 30, 2015
,
$0.3 million
and
$0.9 million
, respectively, of expenses were reclassified from Nurse and Allied Staffing to unallocated corporate overhead to conform to the current period presentation.
|
Through Year Ending December 31:
|
(amounts in thousands)
|
||
2016
|
$
|
1,900
|
|
2017
|
6,857
|
|
|
2018
|
5,851
|
|
|
2019
|
4,349
|
|
|
2020
|
3,834
|
|
|
Thereafter
|
16,605
|
|
|
|
$
|
39,396
|
|
14.
|
INCOME TAXES
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
●
|
Nurse and Allied Staffing
– Nurse and Allied Staffing represented approximately
87%
of our total revenue in the third quarter of 2016. Nurse and Allied Staffing provides traditional staffing, including temporary and permanent placement of travel nurses and allied professionals, and branch-based local nurses and allied staffing. Our services include the placement of travel and per diem nurses, allied healthcare professionals, such as rehabilitation therapists, radiology technicians, and respiratory therapists. The results of the Mediscan acquisition have been aggregated with our Nurse and Allied Staffing business segment. See Note 3 - Acquisitions to our condensed consolidated financial statements.
|
●
|
Physician Staffing
– Physician Staffing represented approximately
12%
of our total revenue in the third quarter of 2016. Physician Staffing provides physicians in many specialties, certified registered nurse anesthetists, nurse practitioners and physician assistants under our Medical Doctor Associates (MDA) brand as independent contractors on temporary assignments throughout the U.S.
|
●
|
Other Human Capital Management Services
– Other Human Capital Management Services (OHCMS) represented approximately
1%
of our total revenue in the third quarter of 2016. Subsequent to the sale of our education seminars business, Cross Country Education, LLC ("CCE") on August 31, 2015, OHCMS is comprised of retained and contingent search services for physicians, healthcare executives, and other healthcare professionals within the U.S.
|
Business Segment
|
Business Measurement
|
Nurse and Allied Staffing
|
FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.
|
|
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.
|
|
|
Physician Staffing
|
Days filled is calculated by dividing the total hours invoiced during the period by 8 hours.
|
|
Revenue per day filled is calculated by dividing revenue invoiced by days filled for the period presented. Invoiced revenue excludes revenue from permanent placement and accrued revenue.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||
|
September 30,
|
|
September 30,
|
||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||
Revenue from services
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Direct operating expenses
|
72.9
|
|
|
73.7
|
|
|
73.1
|
|
|
74.5
|
|
Selling, general and administrative expenses
|
21.4
|
|
|
20.0
|
|
|
21.9
|
|
|
21.1
|
|
Bad debt expense
|
—
|
|
|
0.3
|
|
|
0.1
|
|
|
0.1
|
|
Depreciation and amortization
|
1.0
|
|
|
1.0
|
|
|
1.1
|
|
|
1.0
|
|
Loss on sale of business
|
—
|
|
|
1.1
|
|
|
—
|
|
|
0.4
|
|
Acquisition and integration costs
|
—
|
|
|
0.3
|
|
|
—
|
|
|
0.1
|
|
Acquisition-related contingent consideration
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
—
|
|
Restructuring costs
|
0.3
|
|
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Impairment charges
|
—
|
|
|
—
|
|
|
4.0
|
|
|
—
|
|
Income (loss) from operations
|
4.3
|
|
|
3.5
|
|
|
(0.4
|
)
|
|
2.6
|
|
Interest expense
|
0.6
|
|
|
0.9
|
|
|
0.8
|
|
|
0.9
|
|
(Gain) loss on derivative liability
|
(3.3
|
)
|
|
1.5
|
|
|
(3.3
|
)
|
|
0.1
|
|
Loss on early extinguishment of debt
|
—
|
|
|
—
|
|
|
0.2
|
|
|
—
|
|
Other income, net
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|
—
|
|
Income before income taxes
|
7.0
|
|
|
1.2
|
|
|
1.9
|
|
|
1.6
|
|
Income tax expense (benefit)
|
0.4
|
|
|
(1.4
|
)
|
|
(0.8
|
)
|
|
(0.3
|
)
|
Consolidated net income
|
6.6
|
|
|
2.6
|
|
|
2.7
|
|
|
1.9
|
|
Less: Net income attributable to noncontrolling interest in subsidiary
|
0.1
|
|
|
—
|
|
|
0.1
|
|
|
0.1
|
|
Net income attributable to common shareholders
|
6.5
|
%
|
|
2.6
|
%
|
|
2.6
|
%
|
|
1.8
|
%
|
|
Three Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Revenue from services
|
$
|
214,988
|
|
|
$
|
195,692
|
|
|
$
|
19,296
|
|
|
9.9
|
%
|
Direct operating expenses
|
156,778
|
|
|
144,206
|
|
|
12,572
|
|
|
8.7
|
%
|
|||
Selling, general and administrative expenses
|
45,922
|
|
|
39,227
|
|
|
6,695
|
|
|
17.1
|
%
|
|||
Bad debt expense
|
19
|
|
|
549
|
|
|
(530
|
)
|
|
(96.5
|
)%
|
|||
Depreciation and amortization
|
2,092
|
|
|
1,935
|
|
|
157
|
|
|
8.1
|
%
|
|||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
(2,184
|
)
|
|
(100.0
|
)%
|
|||
Acquisition and integration costs
|
—
|
|
|
584
|
|
|
(584
|
)
|
|
(100.0
|
)%
|
|||
Acquisition-related contingent consideration
|
237
|
|
|
—
|
|
|
237
|
|
|
100.0
|
%
|
|||
Restructuring costs
|
611
|
|
|
140
|
|
|
471
|
|
|
336.4
|
%
|
|||
Income from operations
|
9,329
|
|
|
6,867
|
|
|
2,462
|
|
|
35.9
|
%
|
|||
Interest expense
|
1,435
|
|
|
1,654
|
|
|
(219
|
)
|
|
(13.2
|
)%
|
|||
(Gain) loss on derivative liability
|
(7,105
|
)
|
|
2,894
|
|
|
(9,999
|
)
|
|
(345.5
|
)%
|
|||
Other income, net
|
(92
|
)
|
|
(100
|
)
|
|
8
|
|
|
8.0
|
%
|
|||
Income before income taxes
|
15,091
|
|
|
2,419
|
|
|
12,672
|
|
|
523.9
|
%
|
|||
Income tax expense (benefit)
|
802
|
|
|
(2,732
|
)
|
|
3,534
|
|
|
129.4
|
%
|
|||
Consolidated net income
|
14,289
|
|
|
5,151
|
|
|
9,138
|
|
|
177.4
|
%
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
223
|
|
|
142
|
|
|
81
|
|
|
57.0
|
%
|
|||
Net income attributable to common shareholders
|
$
|
14,066
|
|
|
$
|
5,009
|
|
|
$
|
9,057
|
|
|
180.8
|
%
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Revenue from services
|
$
|
611,014
|
|
|
574,273
|
|
|
$
|
36,741
|
|
|
6.4
|
%
|
|
Direct operating expenses
|
446,912
|
|
|
427,387
|
|
|
19,525
|
|
|
4.6
|
%
|
|||
Selling, general and administrative expenses
|
133,530
|
|
|
121,284
|
|
|
12,246
|
|
|
10.1
|
%
|
|||
Bad debt expense
|
496
|
|
|
771
|
|
|
(275
|
)
|
|
(35.7
|
)%
|
|||
Depreciation and amortization
|
6,969
|
|
|
5,849
|
|
|
1,120
|
|
|
19.1
|
%
|
|||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
(2,184
|
)
|
|
(100.0
|
)%
|
|||
Acquisition and integration costs
|
—
|
|
|
742
|
|
|
(742
|
)
|
|
(100.0
|
)%
|
|||
Acquisition-related contingent consideration
|
707
|
|
|
—
|
|
|
707
|
|
|
100.0
|
%
|
|||
Restructuring costs
|
611
|
|
|
1,147
|
|
|
(536
|
)
|
|
(46.7
|
)%
|
|||
Impairment charges
|
24,311
|
|
|
—
|
|
|
24,311
|
|
|
100.0
|
%
|
|||
(Loss) income from operations
|
(2,522
|
)
|
|
14,909
|
|
|
(17,431
|
)
|
|
(116.9
|
)%
|
|||
Interest expense
|
4,678
|
|
|
5,163
|
|
|
(485
|
)
|
|
(9.4
|
)%
|
|||
(Gain) loss on derivative liability
|
(19,970
|
)
|
|
385
|
|
|
(20,355
|
)
|
|
NM
|
|
|||
Loss on early extinguishment of debt
|
1,568
|
|
|
—
|
|
|
1,568
|
|
|
100.0
|
%
|
|||
Other income, net
|
(143
|
)
|
|
(30
|
)
|
|
(113
|
)
|
|
(376.7
|
)%
|
|||
Income before income taxes
|
11,345
|
|
|
9,391
|
|
|
1,954
|
|
|
20.8
|
%
|
|||
Income tax benefit
|
(5,035
|
)
|
|
(1,490
|
)
|
|
(3,545
|
)
|
|
(237.9
|
)%
|
|||
Consolidated net income
|
16,380
|
|
|
10,881
|
|
|
5,499
|
|
|
50.5
|
%
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
529
|
|
|
365
|
|
|
164
|
|
|
44.9
|
%
|
|||
Net income attributable to common shareholders
|
$
|
15,851
|
|
|
$
|
10,516
|
|
|
$
|
5,335
|
|
|
50.7
|
%
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2016
|
|
2015
|
|
2016
|
|
2015
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|||||
Nurse and Allied Staffing
|
$
|
186,623
|
|
|
$
|
157,338
|
|
|
$
|
527,436
|
|
|
$
|
459,127
|
|
Physician Staffing
|
25,090
|
|
|
30,959
|
|
|
73,470
|
|
|
88,100
|
|
||||
Other Human Capital Management Services
|
3,275
|
|
|
7,395
|
|
|
10,108
|
|
|
27,046
|
|
||||
|
$
|
214,988
|
|
|
$
|
195,692
|
|
|
$
|
611,014
|
|
|
$
|
574,273
|
|
|
|
|
|
|
|
|
|
||||||||
Contribution income:
|
|
|
|
|
|
|
|
||||||||
Nurse and Allied Staffing
|
$
|
19,472
|
|
|
$
|
16,560
|
|
|
$
|
53,877
|
|
|
$
|
40,283
|
|
Physician Staffing
|
2,400
|
|
|
3,197
|
|
|
6,003
|
|
|
7,541
|
|
||||
Other Human Capital Management Services
|
(154
|
)
|
|
372
|
|
|
(196
|
)
|
|
1,721
|
|
||||
|
21,718
|
|
|
20,129
|
|
|
59,684
|
|
|
49,545
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Unallocated corporate overhead
|
9,449
|
|
|
8,419
|
|
|
29,608
|
|
|
24,714
|
|
||||
Depreciation
|
995
|
|
|
953
|
|
|
3,059
|
|
|
2,902
|
|
||||
Amortization
|
1,097
|
|
|
982
|
|
|
3,910
|
|
|
2,947
|
|
||||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
—
|
|
|
2,184
|
|
||||
Acquisition and integration costs
|
—
|
|
|
584
|
|
|
—
|
|
|
742
|
|
||||
Acquisition-related contingent consideration
|
237
|
|
|
—
|
|
|
707
|
|
|
—
|
|
||||
Restructuring costs
|
611
|
|
|
140
|
|
|
611
|
|
|
1,147
|
|
||||
Impairment charges
|
—
|
|
|
—
|
|
|
24,311
|
|
|
—
|
|
||||
Income (loss) from operations
|
$
|
9,329
|
|
|
$
|
6,867
|
|
|
$
|
(2,522
|
)
|
|
$
|
14,909
|
|
|
Three Months Ended
|
|
|
|
|
||||||||
|
September 30,
|
|
September 30,
|
|
|
|
Percent
|
||||||
|
2016
|
|
2015
|
|
Change
|
|
Change
|
||||||
|
|
|
|
|
|
|
|
||||||
Nurse and Allied Staffing statistical data: (a)
|
|
|
|
|
|
|
|
||||||
FTEs
|
6,954
|
|
|
6,646
|
|
|
308
|
|
|
4.6
|
%
|
||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
|
292
|
|
|
$
|
257
|
|
|
35
|
|
|
13.6
|
%
|
|
|
|
|
|
|
|
|
||||||
Physician Staffing statistical data: (a)
|
|
|
|
|
|
|
|
||||||
Days filled
|
16,639
|
|
|
20,543
|
|
|
(3,904
|
)
|
|
(19.0
|
)%
|
||
Revenue per day filled
|
$
|
1,576
|
|
|
$
|
1,505
|
|
|
71
|
|
|
4.7
|
%
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
||||||
|
Nine Months Ended
|
|
|
|
|
||||||||
|
September 30,
|
|
September 30,
|
|
|
|
Percent
|
||||||
|
2016
|
|
2015
|
|
Change
|
|
Change
|
||||||
|
|
|
|
|
|
|
|
||||||
Nurse and Allied Staffing statistical data: (a)
|
|
|
|
|
|
|
|
||||||
FTEs
|
6,885
|
|
|
6,569
|
|
|
316
|
|
|
4.8
|
%
|
||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
|
280
|
|
|
$
|
256
|
|
|
24
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
||||||
Physician Staffing statistical data: (a)
|
|
|
|
|
|
|
|
||||||
Days filled
|
47,961
|
|
|
59,470
|
|
|
(11,509
|
)
|
|
(19.4
|
)%
|
||
Revenue per day filled
|
$
|
1,542
|
|
|
$
|
1,485
|
|
|
57
|
|
|
3.8
|
%
|
(a)
|
See definition of Business Measurements under the Operating Metrics section of our Management's Discussion and Analysis.
|
Commitments
|
|
Total
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
Thereafter
|
||||||||||||||
|
|
(Unaudited, amounts in thousands)
|
||||||||||||||||||||||||||
Term Loan (a)
|
|
$
|
39,500
|
|
|
$
|
500
|
|
|
$
|
2,500
|
|
|
$
|
3,000
|
|
|
$
|
3,500
|
|
|
$
|
4,000
|
|
|
$
|
26,000
|
|
Convertible Notes (b)
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|||||||
Interest on debt (c)
|
|
12,012
|
|
|
791
|
|
|
3,103
|
|
|
3,024
|
|
|
2,937
|
|
|
1,816
|
|
|
341
|
|
|||||||
Contingent consideration (d)
|
|
6,335
|
|
|
—
|
|
|
1,423
|
|
|
1,239
|
|
|
265
|
|
|
3,408
|
|
|
—
|
|
|||||||
Capital lease obligations
|
|
34
|
|
|
11
|
|
|
13
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|||||||
Operating lease obligations (e)
|
|
39,396
|
|
|
1,900
|
|
|
6,857
|
|
|
5,851
|
|
|
4,349
|
|
|
3,834
|
|
|
16,605
|
|
|||||||
|
|
$
|
122,277
|
|
|
$
|
3,202
|
|
|
$
|
13,896
|
|
|
$
|
13,122
|
|
|
$
|
11,053
|
|
|
$
|
38,058
|
|
|
$
|
42,946
|
|
(a)
|
Under our 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 senior credit facilities. In the event of any such default and our inability to obtain a waiver of the default, all amounts outstanding under the Senior Credit Facilities 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. See Note 8 - Debt to our condensed consolidated financial statements.
|
(c)
|
Interest on debt represents payments due through maturity for our Term Loan and Convertible Notes. Interest payments on our Term Loan were calculated using the September 30, 2016 applicable LIBOR and margin rate totaling 2.8%. Interest on our Convertible Notes was calculated using the fixed interest rate of 8.0% and assuming no conversion.
|
(d)
|
The contingent consideration amounts represent the estimated payments due to the seller, and the additional contingent purchase price liabilities for a previously acquired business, related to the Mediscan acquisition, including accretion. 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)
|
Represents future minimum lease payments associated with operating lease agreements with original terms of more than one year.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
ITEM 1.
|
LEGAL PROCEEDINGS
|
ITEM 1A.
|
RISK FACTORS
|
ITEM 6.
|
EXHIBITS
|
|
CROSS COUNTRY HEALTHCARE, INC.
|
|
|
|
|
Date: November 4, 2016
|
By:
|
/s/ Christopher R. Pizzi
|
|
|
Christopher R. Pizzi
Chief Financial Officer
|
No.
|
|
Description
|
|
|
|
|
|
|
*10.1
|
|
Tenth Amendment to Lease agreement between Mainstreet CV North 40, LLC and Cross Country Healthcare, Inc., dated September 19, 2016.
|
|
|
|
*10.2
|
|
Amendment to Lease agreement between Mainstreet CV North 40, LLC and Cross Country Healthcare, Inc., dated September 19, 2016.
|
|
|
|
*10.3
|
|
Amendment No. 2, dated October 31, 2016 to Convertible Note Purchase Agreement, dated June 30, 2014, among Cross Country Healthcare, Inc., the Guarantor subsidiaries of the Company named therein, and the Noteholders named therein.
|
|
|
|
*31.1
|
|
Certification pursuant to Rule 13a-14(a) and Rule 15d-14 (a) by William J. Grubbs, President, Chief Executive Officer, Director (Principal Executive Officer)
|
|
|
|
*31.2
|
|
Certification pursuant to Rule 13a-14(a) and Rule 15d-14 (a) by Christopher R. Pizzi, Chief Financial Officer (Principal Accounting and Financial Officer)
|
|
|
|
*32.1
|
|
Certification pursuant to 18 U.S.C. Section 1350 by William J. Grubbs, President, Chief Executive Officer, Director (Principal Executive Officer)
|
|
|
|
*32.2
|
|
Certification pursuant to 18 U.S.C. Section 1350 by Christopher R. Pizzi, Chief Financial Officer (Principal Accounting and 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
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
*
|
|
Filed herewith
|
|
|
|
**
|
|
Furnished herewith
|
in the presence of:
/s/ Tamar Jacobs
Witness:
Tamar Jacobs
/s/ Stephanie Brito
Witness:
Stephanie Brito
|
MAINSTREET CV NORTH 40, LLC, a Delaware limited liability company
By: Mainstreet 40, Ltd, a Florida limited
partnership, Manager
By: Mainstreet N40, Inc., a
Florida corporation, General
Partner
By:
/s/ Paul J. Kilgallon
Paul J. Kilgallon, President
|
|
|
|
CROSS COUNTY HEALTHCARE, INC., a Delaware corporation
|
/s/ Elizabeth M. Berrios
Witness:
Elizabeth M. Berrios
/s/ Jerry Chico
Witness:
Jerry Chico
|
By:
/s/ William J. Burns
Name:
William J. Burns
Title:
CFO
|
|
LANDLORD:
|
MAINSTREET CV NORTH 40, LLC
, a Delaware limited liability company
By: Mainstreet 40, Ltd., a Florida limited partnership,
Manager
By: Mainstreet N40, Inc., a Florida corporation, General Partner
By:
/s/ Paul J. Kilgallon
Name:
Paul J. Kilgallon
Title:
President
Date:
September 19, 2016
|
|
CROSS COUNTRY HEALTHCARE, INC.
, a Delaware
corporation
By:
/s/ William J. Burns
Name:
William J. Burns
Title:
CFO
|
|
|
A.
|
Lease
: Lease Agreement dated ________________ (the “
Lease
”)
|
B.
|
Landlord
: MAINSTREET CV NORTH 40, LLC, a Delaware limited liability company (the “
Landlord
”)
|
C.
|
Tenant
: CROSS COUNTRY HEALTHCARE, INC., a Delaware corporation (the “
Tenant
”)
|
D.
|
Premises
: Certain space containing 48,154 rentable square feet located on the ground floor (the “
Premises
”) of the building located at 5201 Congress Road (the “
Building
”), which building is situated in the land (the “
Land
”) legally described as follows:
|
E.
|
Lien on Landlord’s Interest Prohibited
. Tenant shall never, under any circumstances, have the power to subject the interest of Landlord in the Premises, the Building, or the Land to any mechanic’s, materialmen’s, or construction liens of any kind. In order to comply with the provisions of Chapter 713.10, Florida Statutes, it is specifically provided that neither Tenant nor anyone claiming by, through or under Tenant, including, but not limited to, contractors, subcontractors, materialmen, mechanics and/or laborers, shall have any right to file or place any mechanics’, materialmen’s or construction liens of any kind whatsoever upon the Premises, the Building, the Land, or improvements thereon, and any such liens are hereby specifically prohibited. All parties with whom Tenant may deal are put on notice that Tenant has no power to subject Landlord’s interest to any mechanics’, materialmen’s or construction lien of any kind or character, and all such persons so dealing with Tenant must look solely to the credit of Tenant, and not to Landlord’s interest or assets. IN ADDITION, THE INTEREST OF LANDLORD IN THE PREMISES, THE BUILDING, AND THE LAND SHALL NOT BE SUBJECT TO LIENS FOR IMPROVEMENTS TO THE PREMISES, THE BUILDING, AND/OR THE LAND MADE BY TENANT, NOTWITHSTANDING ANY APPROVAL BY LANDLORD OF ANY CONTRACT(S) WITH ANY CONTRACTOR(S), AND/OR LANDLORD’S APPROVAL OF ANY SUCH IMPROVEMENT(S) AND/OR PLANS. PRIOR TO ENTERING INTO ANY CONTRACT FOR THE CONSTRUCTION OF ANY ALTERATION OR IMPROVEMENT, TENANT SHALL NOTIFY THE CONTRACTOR MAKING IMPROVEMENTS TO THE PREMISES, THE BUILDING AND/OR THE LAND OF THE FOREGOING PROVISION, AND TENANT’S KNOWING OR WILLFUL FAILURE TO PROVIDE SUCH NOTICE TO THE CONTRACTOR SHALL RENDER THE CONTRACT BETWEEN TENANT AND THE CONTRACTOR VOIDABLE AT THE OPTION OF THE CONTRACTOR.
|
By:
|
Mainstreet 40, Ltd., a Florida limited partnership, Manager
|
By:
|
Mainstreet N40, Inc., a Florida corporation, General Partner
|
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: CEO and President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Executive Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Vice President |
By:
|
/s/ William J. Grubbs
Name: William J. Grubbs Title: Vice President |
By:
|
/s/ Bryan Martoken
Name: Bryan Martoken Title: Chief Financial Officer |
1.
|
I have reviewed this quarterly report on Form 10-Q of Cross Country Healthcare, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 4, 2016
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cross Country Healthcare, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 4, 2016
|
/s/ Christopher R. Pizzi
|
|
|
Christopher R. Pizzi
Chief Financial Officer
|
Date:
|
November 4, 2016
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
Date:
|
November 4, 2016
|
/s/ Christopher R. Pizzi
|
|
|
Christopher R. Pizzi
Chief Financial Officer
|