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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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-
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MSP Capabilities
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Rather than an acute care facility’s talent management team working with multiple staffing agencies, our MSP model offers a single point of contact, access to a nationwide network of subcontractors, uniform rates and terms, and accountability for the quality of healthcare professionals to our clients through the aggregation
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-
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Predictive Analytics. We offer predictive analytics to hospitals that need decision support for staffing in real time. Generally, hospitals spend between 45-50% of their net patient revenue on labor, and typically half of that amount is spent on clinical labor, the majority of which is nursing. By providing a solution that allows staffing managers and unit directors the ability to forecast census based on historical trend data, they are better able to staff their units more scientifically rather using anecdotal information.
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OWS. These services allow our clients to outsource certain non-core department staff that may be particularly challenging to recruit and retain. By outsourcing these departments to our OWS team, our clients can better control their operating costs, gain access to our talent management expertise, free their internal resources for other purposes, streamline or increase efficiency for certain functions and improve their overall focus.
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-
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IRP. We consult with our clients to structure groups of their staff professionals that can be called upon when shortages exist or are expected. These professionals agree to fill positions when necessary and are available when called upon. They have experience with the facilities where they will work, so they are immediately up to speed with how things are done and what is expected from them the moment they arrive. This type of pool promotes quality of care and is cost efficient for our clients.
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-
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Education Healthcare Services. By providing consultative and staffing services to traditional public and charter school clients, we help them achieve performance and cost savings goals while experiencing greater flexibility in their operations.
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-
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RPO. We offer business process outsourcing where a client transfers all or part of its talent management recruitment processes to us and we can assume the design and management of the recruitment process and the responsibility for the results. The structure of this solution differs greatly from client to client as there is a continuum of scope of the services that may be provided (e.g. end to end services or hybrid solutions).
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-
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EMR. Based on the government mandate for hospitals to convert to Electronic Medical Records to ensure payment for services, we developed a sound transition and implementation process to help our clients backfill staffing needs while they adopt a new or upgraded EMR platform. Staffing plans are created in collaboration with our clients so they have adequate, planned, quality staffing to cover these peak vacancies.
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December 31, 2016
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||
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(amounts in thousands)
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||
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Total debt at par
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$
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64,523
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Total Cross Country Healthcare, Inc. stockholders' equity
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$
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151,243
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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 interests;
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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 payment of principal and interest on our debt, reducing the available cash flow to fund other investments;
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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 less leveraged; and
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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 unfavorable terms, in order to meet payment obligations.
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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 31, 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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Sale Prices
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||||||
Calendar Period
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High
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Low
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2016
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Quarter Ended March 31, 2016
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$
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13.10
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$
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12.31
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Quarter Ended June 30, 2016
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$
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13.48
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$
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12.93
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Quarter Ended September 30, 2016
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$
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13.40
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$
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12.94
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Quarter Ended December 31, 2016
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$
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13.93
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$
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13.45
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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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Year Ended December 31,
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2016
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2015
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2014
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2013
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2012
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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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833,537
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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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Consolidated net income (loss)
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8,731
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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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Net income (loss) attributable to common shareholders
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7,967
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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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Per Share Data:
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Net income (loss) per share attributable to common shareholders - Basic
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$
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0.25
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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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Net income (loss) per share attributable to common shareholders - Diluted
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$
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0.15
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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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Weighted Average Common Shares Outstanding:
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Basic
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32,132
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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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Diluted
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36,246
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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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Other Operating Data:
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Cash and cash equivalents
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$
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20,630
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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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Total assets
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388,378
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365,595
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324,502
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248,245
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305,626
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|||||
Total debt at par
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64,523
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63,094
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58,702
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8,576
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33,859
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|||||
Stockholders’ equity
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151,802
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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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|||||
Net cash provided by (used in) operating activities
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30,145
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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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•
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Consolidated net income (loss) for the years ended December 31, 2016, 2015, and 2014, respectively, includes amounts attributable to noncontrolling interest of
$0.8 million
,
$0.5 million
, and
$0.2 million
.
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•
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We acquired all of the membership interests of Mediscan on October 30, 2015, substantially all of the assets and certain liabilities of 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, 2016, 2015, 2014 and 2013, we recognized $0.1 million,
$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 year ended
December 31, 2016
includes
$0.8 million
of acquisition-related contingent consideration expense primarily related to the Mediscan acquisition. See Note 3 - Acquisitions and Note 10 - Fair Value Measurements to our consolidated financial statements.
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•
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The years ended
December 31, 2016
,
2015
,
2014
, and 2013 include
$0.8 million
,
$1.3 million
,
$0.8 million
, and
$0.5 million
, respectively, of restructuring costs primarily related to the centralization of corporate functions in 2016, 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, 2016, 2015, 2014, 2013, and 2012 include non-cash impairment charges of approximately
$24.3 million
,
$2.1 million
,
$10.0 million
,
$6.4 million
, and
$18.7 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Intangible Assets to our consolidated financial statements.
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•
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The year ended December 31, 2016 includes the impact of a gain on derivative liability of approximately
$5.8 million
, while the years ended December 31, 2015 and 2014 include the impact of a loss on derivative liability of
$9.9 million
and
$16.7 million
, respectively. The 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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•
|
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 (CCE) on August 31, 2015. See Note 4 - Disposal and Discontinued Operations to our consolidated financial statements.
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•
|
The years ended December 31, 2016 and 2013 include a loss on early extinguishment of debt of
$1.6 million
and
$1.4 million
, respectively, related to extinguishment fees and the write-off of unamortized net debt discount and issuance costs related to prior credit agreements. See Note 8 - Debt to our consolidated financial statements.
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●
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Nurse and Allied Staffing
– Nurse and Allied Staffing represented approximately
86%
of our total revenue. Nurse and Allied Staffing provides traditional staffing, recruiting, and value-added workforce solutions including: temporary and permanent placement of travel and local branch-based nurse and allied professionals, MSP services, education healthcare services, and outsourcing services. The results of our MSN, Mediscan and USR acquisitions have been aggregated with our Nurse and Allied Staffing business segment. See Note 3 - Acquisitions to our consolidated financial statements.
|
●
|
Physician Staffing
– Physician Staffing represented approximately 12% of our total revenue. 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.
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●
|
Other Human Capital Management Services
– Other Human Capital Management Services (OHCMS) represented approximately
2%
of our total revenue. Subsequent to the sale of our education seminars business, 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.
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Business Segment
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Business Measurement
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Nurse and Allied Staffing
|
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 invoiced during the period by 8 hours.
|
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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.
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Year Ended December 31,
|
|||||||
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2016
|
|
2015
|
|
2014
|
|||
Revenue from services
|
100.0
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%
|
|
100.0
|
%
|
|
100.0
|
%
|
Direct operating expenses
|
73.4
|
|
|
74.3
|
|
|
74.5
|
|
Selling, general, and administrative expenses
|
21.5
|
|
|
21.0
|
|
|
22.8
|
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Bad debt expense
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Depreciation and amortization
|
1.1
|
|
|
1.0
|
|
|
1.2
|
|
Loss on sale of business
|
—
|
|
|
0.3
|
|
|
—
|
|
Acquisition and integration costs
|
—
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|
|
0.1
|
|
|
1.3
|
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Acquisition-related contingent consideration
|
0.1
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|
|
—
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|
|
—
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Restructuring costs
|
0.1
|
|
|
0.2
|
|
|
0.1
|
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Impairment charges
|
2.9
|
|
|
0.3
|
|
|
1.6
|
|
Income (loss) from operations
|
0.8
|
|
|
2.7
|
|
|
(1.7
|
)
|
Interest expense
|
0.7
|
|
|
0.9
|
|
|
0.7
|
|
(Gain) loss on derivative liability
|
(0.7
|
)
|
|
1.3
|
|
|
2.7
|
|
Loss on early extinguishment of debt
|
0.2
|
|
|
—
|
|
|
—
|
|
Income (loss) before income taxes
|
0.6
|
|
|
0.5
|
|
|
(5.1
|
)
|
Income tax (benefit) expense
|
(0.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
Consolidated net income (loss)
|
1.1
|
|
|
0.6
|
|
|
(5.1
|
)
|
Less: Net income attributable to noncontrolling interest in subsidiary
|
0.1
|
|
|
—
|
|
|
—
|
|
Net income (loss) attributable to common shareholders
|
1.0
|
%
|
|
0.6
|
%
|
|
(5.1
|
)%
|
|
Year Ended December 31,
|
|||||||||||||
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
|
2016
|
|
2015
|
|
$
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Revenue from services
|
$
|
833,537
|
|
|
$
|
767,421
|
|
|
$
|
66,116
|
|
|
8.6
|
%
|
Direct operating expenses
|
611,802
|
|
|
570,056
|
|
|
41,746
|
|
|
7.3
|
%
|
|||
Selling, general, and administrative expenses
|
179,820
|
|
|
161,275
|
|
|
18,545
|
|
|
11.5
|
%
|
|||
Bad debt expense
|
593
|
|
|
999
|
|
|
(406
|
)
|
|
(40.6
|
)%
|
|||
Depreciation and amortization
|
9,182
|
|
|
8,066
|
|
|
1,116
|
|
|
13.8
|
%
|
|||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
(2,184
|
)
|
|
(100.0
|
)%
|
|||
Acquisition-related contingent consideration
|
814
|
|
|
—
|
|
|
814
|
|
|
100.0
|
%
|
|||
Acquisition and integration costs
|
78
|
|
|
902
|
|
|
(824
|
)
|
|
(91.4
|
)%
|
|||
Restructuring costs
|
753
|
|
|
1,274
|
|
|
(521
|
)
|
|
(40.9
|
)%
|
|||
Impairment charges
|
24,311
|
|
|
2,100
|
|
|
22,211
|
|
|
1,057.7
|
%
|
|||
Income from operations
|
6,184
|
|
|
20,565
|
|
|
(14,381
|
)
|
|
(69.9
|
)%
|
|||
Interest expense
|
6,106
|
|
|
6,810
|
|
|
(704
|
)
|
|
(10.3
|
)%
|
|||
(Gain) loss on derivative liability
|
(5,805
|
)
|
|
9,901
|
|
|
(15,706
|
)
|
|
(158.6
|
)%
|
|||
Loss on early extinguishment of debt
|
1,568
|
|
|
—
|
|
|
1,568
|
|
|
100.0
|
%
|
|||
Other income, net
|
(230
|
)
|
|
(306
|
)
|
|
76
|
|
|
24.8
|
%
|
|||
Income before income taxes
|
4,545
|
|
|
4,160
|
|
|
385
|
|
|
9.3
|
%
|
|||
Income tax benefit
|
(4,186
|
)
|
|
(794
|
)
|
|
(3,392
|
)
|
|
(427.2
|
)%
|
|||
Consolidated net income
|
8,731
|
|
|
4,954
|
|
|
3,777
|
|
|
76.2
|
%
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
764
|
|
|
536
|
|
|
228
|
|
|
42.5
|
%
|
|||
Net income attributable to common shareholders
|
$
|
7,967
|
|
|
$
|
4,418
|
|
|
$
|
3,549
|
|
|
80.3
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
|
|
|
|
Increase (Decrease)
|
|
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
|
)%
|
|||
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
|
)
|
|
(88.7
|
)%
|
|||
Restructuring costs
|
1,274
|
|
|
840
|
|
|
434
|
|
|
51.7
|
%
|
|||
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) loss, net
|
(306
|
)
|
|
19
|
|
|
(325
|
)
|
|
(1,710.5
|
)%
|
|||
Income (loss) 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,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands)
|
||||||||||
Revenue from services:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing
|
$
|
721,486
|
|
|
$
|
621,258
|
|
|
$
|
459,195
|
|
Physician Staffing
|
98,283
|
|
|
115,336
|
|
|
121,145
|
|
|||
Other Human Capital Management Services
|
13,768
|
|
|
30,827
|
|
|
37,485
|
|
|||
|
$
|
833,537
|
|
|
$
|
767,421
|
|
|
$
|
617,825
|
|
|
|
|
|
|
|
||||||
Contribution income (loss):
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing
|
$
|
71,992
|
|
|
$
|
55,718
|
|
|
$
|
36,486
|
|
Physician Staffing
|
8,265
|
|
|
10,213
|
|
|
6,540
|
|
|||
Other Human Capital Management Services
|
(535
|
)
|
|
1,863
|
|
|
514
|
|
|||
|
79,722
|
|
|
67,794
|
|
|
43,540
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead
|
38,400
|
|
|
32,703
|
|
|
27,770
|
|
|||
Depreciation
|
4,168
|
|
|
3,856
|
|
|
3,866
|
|
|||
Amortization
|
5,014
|
|
|
4,210
|
|
|
3,575
|
|
|||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
—
|
|
|||
Acquisition and integration costs
|
78
|
|
|
902
|
|
|
7,957
|
|
|||
Acquisition-related contingent consideration
|
814
|
|
|
—
|
|
|
—
|
|
|||
Restructuring costs
|
753
|
|
|
1,274
|
|
|
840
|
|
|||
Impairment charges
|
24,311
|
|
|
2,100
|
|
|
10,000
|
|
|||
Income (loss) from operations
|
$
|
6,184
|
|
|
$
|
20,565
|
|
|
$
|
(10,468
|
)
|
|
Year Ended December 31,
|
|
|
|
Percent
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing statistical data: (a)
|
|
|
|
|
|
|
|
|||||||
FTEs
|
6,953
|
|
|
6,624
|
|
|
329
|
|
|
5.0
|
%
|
|||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
|
284
|
|
|
$
|
257
|
|
|
$
|
27
|
|
|
10.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Physician Staffing statistical data: (a)
|
|
|
|
|
|
|
|
|||||||
Days filled
|
62,482
|
|
|
77,601
|
|
|
(15,119
|
)
|
|
(19.5
|
)%
|
|||
Revenue per day filled
|
$
|
1,549
|
|
|
$
|
1,463
|
|
|
$
|
86
|
|
|
5.9
|
%
|
|
Year Ended December 31,
|
|
|
|
Percent
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing statistical data: (a)
|
|
|
|
|
|
|
|
|||||||
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: (a)
|
|
|
|
|
|
|
|
|||||||
Days filled
|
77,601
|
|
|
82,473
|
|
|
(4,872
|
)
|
|
(5.9
|
)%
|
|||
Revenue per day filled
|
$
|
1,463
|
|
|
$
|
1,457
|
|
|
$
|
6
|
|
|
0.4
|
%
|
(a)
|
See definition of Business Measurements under the Operating Metrics section of our Management's Discussion and Analysis.
|
Commitments
|
|
Total
|
|
2017
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
Thereafter
|
||||||||||||||
|
|
(Unaudited, amounts in thousands)
|
||||||||||||||||||||||||||
Term Loan (a)
|
|
$
|
39,500
|
|
|
$
|
2,250
|
|
|
$
|
3,750
|
|
|
$
|
3,500
|
|
|
$
|
4,000
|
|
|
$
|
26,000
|
|
|
$
|
—
|
|
Convertible Notes (b)
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
25,000
|
|
|
—
|
|
|
—
|
|
|||||||
Interest on debt (c)
|
|
13,836
|
|
|
3,797
|
|
|
3,946
|
|
|
3,621
|
|
|
2,137
|
|
|
335
|
|
|
—
|
|
|||||||
Contingent purchase price liability (d)
|
|
8,986
|
|
|
303
|
|
|
1,867
|
|
|
1,070
|
|
|
5,746
|
|
|
—
|
|
|
—
|
|
|||||||
Capital lease obligations
|
|
23
|
|
|
13
|
|
|
8
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating lease obligations (e)
|
|
39,494
|
|
|
7,249
|
|
|
6,240
|
|
|
4,826
|
|
|
4,145
|
|
|
3,843
|
|
|
13,191
|
|
|||||||
|
|
$
|
126,839
|
|
|
$
|
13,612
|
|
|
$
|
15,811
|
|
|
$
|
13,019
|
|
|
$
|
41,028
|
|
|
$
|
30,178
|
|
|
$
|
13,191
|
|
(a)
|
Under our senior credit agreement which provides 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. In the event of any such default and our inability to obtain a waiver of the default, all amounts outstanding under the Term Loan 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 Senior Credit Facilities and Convertible Notes. Interest payments on our Senior Credit Facilities were calculated using a estimated forward LIBOR rate plus the current margin rate of 2.00%. Interest on our Convertible Notes were calculated using the fixed interest rate of 8.0% and assuming no conversion. Amounts also include other fees related to our Senior Credit Facilities which were based on amounts outstanding and pricing as of December 31, 2016.
|
(d)
|
The contingent purchase price liability represents the estimated payments due to the sellers related to the Mediscan and USR acquisitions, 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.
|
•
|
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.
|
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
|
188,213
|
|
|
$
|
5.72
|
|
|
589,269
|
|
Equity compensation plans not approved by
security holders
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
188,213
|
|
|
$
|
5.72
|
|
|
589,269
|
|
|
CROSS COUNTRY HEALTHCARE, INC.
|
|
|
|
|
|
By:
|
/s/ William J. Grubbs
|
|
|
Name: William J. Grubbs
|
|
|
Title: President, Chief Executive Officer, Director
|
|
|
Principal Executive Officer
|
|
|
Date: March 3, 2017
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ William J. Grubbs
|
|
President, Chief Executive Officer, Director
|
|
March 3, 2017
|
William J. Grubbs
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ William J. Burns
|
|
EVP & Chief Financial Officer
|
|
March 3, 2017
|
William J. Burns
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
|
|
|
/s/ W. Larry Cash
|
|
Director
|
|
March 3, 2017
|
W. Larry Cash
|
|
|
|
|
|
|
|
|
|
/s/ Thomas C. Dircks
|
|
Director
|
|
March 3, 2017
|
Thomas C. Dircks
|
|
|
|
|
|
|
|
|
|
/s/ Gale Fitzgerald
|
|
Director
|
|
March 3, 2017
|
Gale Fitzgerald
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Mastaler
|
|
Director
|
|
March 3, 2017
|
Richard M. Mastaler
|
|
|
|
|
|
|
|
|
|
/s/ Mark Perlberg
|
|
Director
|
|
March 3, 2017
|
Mark Perlberg
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Trunfio
|
|
Director
|
|
March 3, 2017
|
Joseph A. Trunfio
|
|
|
|
|
No.
|
|
Description
|
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A, Commission File No. 333-64914, and incorporated by reference herein.)
|
3.2
|
|
Amended and Restated By-laws of the Registrant (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2015 and incorporated by reference herein.)
|
4.1
|
|
Form of specimen common stock certificate (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1/A, Commission File No. 333-64914, and incorporated by reference herein.)
|
4.2 #
|
|
2014 Omnibus Incentive Plan - Restricted Stock Agreement Form (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2014 and incorporated by reference herein.)
|
4.3 #
|
|
2014 Omnibus Incentive Plan - Performance Share and Restricted Stock Agreement Form (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2014 and incorporated by reference herein.)
|
4.4
|
|
Registration Rights Agreement, dated June 30, 2014, by and among Cross Country Healthcare, Inc. and the noteholders party thereto (Previously filed as an exhibit to the Company’s Form 8-K dated July 2, 2014 and incorporated by reference herein.)
|
10.1 #
|
|
Employment Agreement, dated as of March 20, 2013, between William J. Grubbs and the Registrant (Previously filed as an exhibit to the Company’s Form 8-K dated March 22, 2013 and incorporated by reference herein.)
|
10.2 #
|
|
Cross Country, Inc. Deferred Compensation Plan (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2002, and incorporated by reference herein.)
|
10.3 #
|
|
Form of Incentive Stock Option Agreement (Previously filed as an exhibit to the Company’s Registration Statement on Form S-1, Commission File No. 333-74403, and incorporated by reference herein.)
|
10.4
|
|
Lease Agreement between Cornerstone Opportunity Ventures, LLC and Cejka Search, Inc., dated February 2, 2007 (Previously filed as an exhibit to the Company’s Form 10-K for the year ended December 31, 2006 and incorporated by reference herein.)
|
10.5
|
|
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 exhibit to the Company’s Form 10-Q for the quarter ended June 30, 2010 and 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 J. 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 (Previously filed as an exhibit to the Company's Form 10-KA for the year ended December 31, 2015 and incorporated by reference herein.)
|
10.44 #
|
|
Employment Agreement, dated as of March 9, 2016, between William J. Grubbs and the Registrant (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2015 and incorporated by reference herein.)
|
10.45
|
|
Credit Agreement, dated June 22, 2016, by and among Cross Country Healthcare, Inc., as borrower, certain of its domestic subsidiaries, as guarantors, the Lenders referenced therein, and Suntrust Bank, as agent (previously filed as an exhibit to the Company's Form 8-K dated June 22, 2016 and incorporated by reference herein.)
|
10.46
|
|
Tenth Amendment to Lease agreement between Mainstreet CV North 40, LLC and Cross Country Healthcare, Inc., dated September 19, 2016 (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2016 and incorporated by reference herein.)
|
10.47
|
|
Amendment to Lease agreement between Mainstreet CV North 40, LLC and Cross Country Healthcare, Inc., dated September 19, 2016 (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2016 and incorporated by reference herein.)
|
10.48
|
|
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 (Previously filed as an exhibit to the Company’s Form 10-Q for the quarter ended September 30, 2016 and incorporated by reference herein.)
|
*10.49
|
|
Amendment No. 3, dated December 27, 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.
|
14.1
|
|
Code of Ethics, revised February 2, 2016 (Previously filed as an exhibit to the Company's Form 10-K for the year ended December 31, 2015 and incorporated by reference herein.)
|
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, Chief Executive Officer, Director (Principal 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, EVP & Chief Financial Officer (Principal Accounting and 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, President, Chief Executive Officer, Director (Principal 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, EVP & 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
|
|
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 3, 2017
|
|
|
/s/ Ernst & Young LLP
|
|
Certified Public Accountants
|
|
|
Boca Raton, Florida
|
|
March 6, 2015
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
20,630
|
|
|
$
|
2,453
|
|
Accounts receivable, net of allowances of $3,245 in 2016 and $4,045 in 2015
|
173,620
|
|
|
146,873
|
|
||
Prepaid expenses
|
6,126
|
|
|
4,521
|
|
||
Insurance recovery receivable
|
3,037
|
|
|
2,866
|
|
||
Other current assets
|
2,198
|
|
|
2,032
|
|
||
Total current assets
|
205,611
|
|
|
158,745
|
|
||
Property and equipment
|
12,818
|
|
|
10,470
|
|
||
Trade names, indefinite-lived
|
35,402
|
|
|
36,101
|
|
||
Goodwill
|
79,648
|
|
|
95,096
|
|
||
Other intangible assets subject to amortization, net of accumulated amortization of $43,333 in 2016 and $38,419 in 2015
|
36,835
|
|
|
46,813
|
|
||
Debt issuance costs, net
|
929
|
|
|
376
|
|
||
Other non-current assets
|
17,135
|
|
|
17,994
|
|
||
Total assets
|
$
|
388,378
|
|
|
$
|
365,595
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
58,837
|
|
|
$
|
41,098
|
|
Accrued compensation and benefits
|
33,243
|
|
|
29,402
|
|
||
Current portion of long-term debt and capital lease obligations
|
2,263
|
|
|
8,071
|
|
||
Deferred purchase price
|
—
|
|
|
2,184
|
|
||
Other current liabilities
|
2,749
|
|
|
5,291
|
|
||
Total current liabilities
|
97,092
|
|
|
86,046
|
|
||
Long-term debt and capital lease obligations, less current portion
|
84,760
|
|
|
81,301
|
|
||
Non-current deferred tax liabilities
|
13,154
|
|
|
18,475
|
|
||
Long-term accrued claims
|
28,870
|
|
|
30,070
|
|
||
Contingent consideration
|
5,301
|
|
|
3,533
|
|
||
Other long-term liabilities
|
7,399
|
|
|
4,826
|
|
||
Total liabilities
|
236,576
|
|
|
224,251
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock—$0.0001 par value; 100,000,000 shares authorized; 32,339,285 and 31,951,960 shares issued and outstanding at December 31, 2016 and 2015, respectively
|
3
|
|
|
3
|
|
||
Additional paid-in capital
|
256,570
|
|
|
254,108
|
|
||
Accumulated other comprehensive loss
|
(1,241
|
)
|
|
(1,207
|
)
|
||
Accumulated deficit
|
(104,089
|
)
|
|
(112,056
|
)
|
||
Total Cross Country Healthcare, Inc. stockholders' equity
|
151,243
|
|
|
140,848
|
|
||
Noncontrolling interest
|
559
|
|
|
496
|
|
||
Total stockholders' equity
|
151,802
|
|
|
141,344
|
|
||
Total liabilities and stockholders' equity
|
$
|
388,378
|
|
|
$
|
365,595
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Revenue from services
|
$
|
833,537
|
|
|
$
|
767,421
|
|
|
$
|
617,825
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Direct operating expenses
|
611,802
|
|
|
570,056
|
|
|
460,021
|
|
|||
Selling, general, and administrative expenses
|
179,820
|
|
|
161,275
|
|
|
141,018
|
|
|||
Bad debt expense
|
593
|
|
|
999
|
|
|
1,016
|
|
|||
Depreciation
|
4,168
|
|
|
3,856
|
|
|
3,866
|
|
|||
Amortization
|
5,014
|
|
|
4,210
|
|
|
3,575
|
|
|||
Loss on sale of business
|
—
|
|
|
2,184
|
|
|
—
|
|
|||
Acquisition-related contingent consideration
|
814
|
|
|
—
|
|
|
—
|
|
|||
Acquisition and integration costs
|
78
|
|
|
902
|
|
|
7,957
|
|
|||
Restructuring costs
|
753
|
|
|
1,274
|
|
|
840
|
|
|||
Impairment charges
|
24,311
|
|
|
2,100
|
|
|
10,000
|
|
|||
Total operating expenses
|
827,353
|
|
|
746,856
|
|
|
628,293
|
|
|||
|
|
|
|
|
|
||||||
Income (loss) from operations
|
6,184
|
|
|
20,565
|
|
|
(10,468
|
)
|
|||
|
|
|
|
|
|
||||||
Other expenses (income):
|
|
|
|
|
|
||||||
Interest expense
|
6,106
|
|
|
6,810
|
|
|
4,160
|
|
|||
(Gain) loss on derivative liability
|
(5,805
|
)
|
|
9,901
|
|
|
16,671
|
|
|||
Loss on early extinguishment of debt
|
1,568
|
|
|
—
|
|
|
—
|
|
|||
Other (income) expense, net
|
(230
|
)
|
|
(306
|
)
|
|
19
|
|
|||
Income (loss) before income taxes
|
4,545
|
|
|
4,160
|
|
|
(31,318
|
)
|
|||
Income tax (benefit) expense
|
(4,186
|
)
|
|
(794
|
)
|
|
216
|
|
|||
Consolidated net income (loss)
|
8,731
|
|
|
4,954
|
|
|
(31,534
|
)
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
764
|
|
|
536
|
|
|
249
|
|
|||
Net income (loss) attributable to common shareholders
|
$
|
7,967
|
|
|
$
|
4,418
|
|
|
$
|
(31,783
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to common shareholders - Basic
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to common shareholders - Diluted
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
32,132
|
|
|
31,514
|
|
|
31,190
|
|
|||
Diluted
|
36,246
|
|
|
32,162
|
|
|
31,190
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Consolidated net income (loss)
|
$
|
8,731
|
|
|
$
|
4,954
|
|
|
$
|
(31,534
|
)
|
|
|
|
|
|
|
||||||
Other comprehensive (loss) income, before income taxes:
|
|
|
|
|
|
|
|
|
|||
Unrealized foreign currency translation (loss) gain
|
(34
|
)
|
|
(89
|
)
|
|
14
|
|
|||
Other comprehensive (loss) income, before income taxes
|
(34
|
)
|
|
(89
|
)
|
|
14
|
|
|||
Income tax expense related to items of other comprehensive (loss) income
|
—
|
|
|
—
|
|
|
162
|
|
|||
Other comprehensive loss, net of taxes
|
(34
|
)
|
|
(89
|
)
|
|
(148
|
)
|
|||
|
|
|
|
|
|
||||||
Comprehensive income (loss)
|
8,697
|
|
|
4,865
|
|
|
(31,682
|
)
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
764
|
|
|
536
|
|
|
249
|
|
|||
Comprehensive income (loss) attributable to common shareholders
|
$
|
7,933
|
|
|
$
|
4,329
|
|
|
$
|
(31,931
|
)
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated Other Total
Comprehensive Loss, net |
|
(Accumulated Deficit) Retained Earnings
|
|
Noncontrolling Interest in Subsidiary
|
|
Stockholders’ Equity
|
|||||||||||||||
Shares
|
|
Dollars
|
||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balances at December 31, 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
|
|
||||||
Exercise of stock options
|
103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock and performance stock awards
|
284
|
|
|
—
|
|
|
(917
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(917
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
3,379
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,379
|
|
||||||
Foreign currency translation adjustment, net of deferred taxes
|
—
|
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
|
—
|
|
|
—
|
|
|
(34
|
)
|
||||||
Distribution to noncontrolling shareholder
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(701
|
)
|
|
(701
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,967
|
|
|
764
|
|
|
8,731
|
|
||||||
Balances at December 31, 2016
|
32,339
|
|
|
$
|
3
|
|
|
$
|
256,570
|
|
|
$
|
(1,241
|
)
|
|
$
|
(104,089
|
)
|
|
$
|
559
|
|
|
$
|
151,802
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Consolidated net income (loss)
|
$
|
8,731
|
|
|
$
|
4,954
|
|
|
$
|
(31,534
|
)
|
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
9,182
|
|
|
8,066
|
|
|
7,441
|
|
|||
Amortization of debt discount and debt issuance costs
|
1,728
|
|
|
1,886
|
|
|
1,064
|
|
|||
Provision for allowances
|
4,034
|
|
|
1,779
|
|
|
1,016
|
|
|||
Deferred income tax benefit
|
(5,322
|
)
|
|
(1,544
|
)
|
|
(857
|
)
|
|||
(Gain) loss on derivative liability
|
(5,805
|
)
|
|
9,901
|
|
|
16,671
|
|
|||
Acquisition-related contingent consideration
|
769
|
|
|
—
|
|
|
—
|
|
|||
Impairment charges
|
24,311
|
|
|
2,100
|
|
|
10,000
|
|
|||
Loss on early extinguishment of debt
|
1,568
|
|
|
—
|
|
|
—
|
|
|||
Equity compensation
|
3,379
|
|
|
2,460
|
|
|
1,387
|
|
|||
Other noncash costs, including loss on sale of business
|
6
|
|
|
2,204
|
|
|
114
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
(30,781
|
)
|
|
(28,708
|
)
|
|
(16,119
|
)
|
|||
Prepaid expenses and other assets
|
(1,882
|
)
|
|
2,663
|
|
|
1,371
|
|
|||
Income taxes
|
(497
|
)
|
|
375
|
|
|
58
|
|
|||
Accounts payable and accrued expenses
|
20,370
|
|
|
11,213
|
|
|
5,654
|
|
|||
Other liabilities
|
354
|
|
|
886
|
|
|
(338
|
)
|
|||
Net cash provided by (used in) operating activities
|
30,145
|
|
|
18,235
|
|
|
(4,072
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of business
|
500
|
|
|
7,500
|
|
|
3,750
|
|
|||
Acquisitions, net of cash acquired
|
(1,900
|
)
|
|
(28,721
|
)
|
|
(44,631
|
)
|
|||
Acquisition-related settlements - Medical Staffing Network
|
(2,155
|
)
|
|
(149
|
)
|
|
—
|
|
|||
Acquisition-related settlements - Mediscan
|
297
|
|
|
—
|
|
|
—
|
|
|||
Transaction costs related to sale of business
|
—
|
|
|
(338
|
)
|
|
—
|
|
|||
Purchases of property and equipment
|
(6,522
|
)
|
|
(2,362
|
)
|
|
(4,571
|
)
|
|||
Net cash used in investing activities
|
(9,780
|
)
|
|
(24,070
|
)
|
|
(45,452
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from borrowing on Senior Credit Facility
|
40,000
|
|
|
—
|
|
|
—
|
|
|||
Debt issuance costs
|
(1,182
|
)
|
|
—
|
|
|
(1,093
|
)
|
|||
Principal payment on Senior Credit Facility
|
(500
|
)
|
|
—
|
|
|
—
|
|
|||
Principal payments on Second Lien Term Loan
|
(30,000
|
)
|
|
—
|
|
|
—
|
|
|||
Extinguishment fees
|
(641
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings under Senior Secured Asset-Based revolving credit facility
|
59,800
|
|
|
64,100
|
|
|
61,205
|
|
|||
Repayments on Senior Secured Asset-Based revolving credit facility
|
(67,800
|
)
|
|
(59,600
|
)
|
|
(66,105
|
)
|
|||
Proceeds from borrowing on Second Lien Term Loan
|
—
|
|
|
—
|
|
|
28,875
|
|
|||
Proceeds from borrowing on Convertible Note
|
—
|
|
|
—
|
|
|
24,063
|
|
|||
Repayments of capital lease obligations
|
(71
|
)
|
|
(108
|
)
|
|
(122
|
)
|
|||
Cash paid for shares withheld for taxes
|
(917
|
)
|
|
(543
|
)
|
|
(245
|
)
|
|||
Payment of contingent consideration
|
(152
|
)
|
|
—
|
|
|
—
|
|
|||
Cash payments to noncontrolling shareholder
|
(701
|
)
|
|
(494
|
)
|
|
(119
|
)
|
|||
Net cash (used in) provided by financing activities
|
(2,164
|
)
|
|
3,355
|
|
|
46,459
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
(24
|
)
|
|
(62
|
)
|
|
5
|
|
|||
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
18,177
|
|
|
(2,542
|
)
|
|
(3,060
|
)
|
|||
Cash and cash equivalents at beginning of year
|
2,453
|
|
|
4,995
|
|
|
8,055
|
|
|||
Cash and cash equivalents at end of year
|
$
|
20,630
|
|
|
$
|
2,453
|
|
|
$
|
4,995
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
3,893
|
|
|
$
|
5,052
|
|
|
$
|
2,512
|
|
Income taxes paid
|
$
|
1,773
|
|
|
$
|
1,035
|
|
|
$
|
1,374
|
|
|
Year Ended December 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
(amounts in thousands)
|
||||||||||||
|
On-Going Benefit Costs
|
Exit Costs
|
|
On-Going Benefit Costs
|
Exit Costs
|
||||||||
Balance at beginning of period
|
$
|
44
|
|
$
|
338
|
|
|
$
|
—
|
|
$
|
—
|
|
Charged to restructuring costs
|
563
|
|
190
|
|
|
633
|
|
641
|
|
||||
Payments
|
(282
|
)
|
(255
|
)
|
|
(589
|
)
|
(303
|
)
|
||||
Balance at end of period
|
$
|
325
|
|
$
|
273
|
|
|
$
|
44
|
|
$
|
338
|
|
|
(amounts in thousands)
|
||
Cash purchase price paid at closing
|
$
|
28,000
|
|
Fair value of shares
|
4,723
|
|
|
Fair value of contingent consideration
|
3,686
|
|
|
Net working capital adjustment, including receivable
|
503
|
|
|
Total consideration
|
$
|
36,912
|
|
|
Year Ended December 31,
|
||||||||||||
|
2016
|
|
2015
|
||||||||||
|
(amounts in thousands)
|
||||||||||||
|
On-Going Benefit Costs
|
Exit Costs
|
|
On-Going Benefit Costs
|
Exit Costs
|
||||||||
Balance at beginning of period
|
$
|
47
|
|
$
|
46
|
|
|
$
|
762
|
|
$
|
868
|
|
Charged to acquisition and integration costs
|
—
|
|
—
|
|
|
17
|
|
88
|
|
||||
Reclassifications (a)
|
—
|
|
—
|
|
|
—
|
|
(255
|
)
|
||||
Payments
|
(47
|
)
|
(46
|
)
|
|
(732
|
)
|
(655
|
)
|
||||
Balance at end of period
|
$
|
—
|
|
$
|
—
|
|
|
$
|
47
|
|
$
|
46
|
|
(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
|
)
|
|
December 31, 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
|
$
|
31,609
|
|
|
$
|
16,147
|
|
|
$
|
15,462
|
|
|
$
|
31,225
|
|
|
$
|
14,150
|
|
|
$
|
17,075
|
|
Customer relationships
|
41,724
|
|
|
23,316
|
|
|
18,408
|
|
|
47,204
|
|
|
20,734
|
|
|
26,470
|
|
||||||
Non-compete agreements
|
3,619
|
|
|
3,527
|
|
|
92
|
|
|
3,603
|
|
|
3,486
|
|
|
117
|
|
||||||
Trade names, definite-lived
|
3,216
|
|
|
343
|
|
|
2,873
|
|
|
3,200
|
|
|
49
|
|
|
3,151
|
|
||||||
|
$
|
80,168
|
|
|
$
|
43,333
|
|
|
$
|
36,835
|
|
|
$
|
85,232
|
|
|
$
|
38,419
|
|
|
$
|
46,813
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade names
|
|
|
|
|
|
|
35,402
|
|
|
|
|
|
|
|
|
36,101
|
|
||||||
|
|
|
|
|
|
|
$
|
72,237
|
|
|
|
|
|
|
|
|
$
|
82,914
|
|
|
Nurse and
Allied Staffing
Segment
|
|
Physician
Staffing
Segment
|
|
Other Human
Capital
Management
Services
Segment
|
|
Total
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
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
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Changes to aggregate goodwill in 2016
|
|
|
|
|
|
|
|
||||||||
Goodwill acquired (b)
|
2,272
|
|
|
—
|
|
|
—
|
|
|
2,272
|
|
||||
Impairment charges
|
—
|
|
|
(17,720
|
)
|
|
—
|
|
|
(17,720
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balances as of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
304,277
|
|
|
43,405
|
|
|
19,307
|
|
|
366,989
|
|
||||
Sale of CCE (a)
|
—
|
|
|
—
|
|
|
(9,889
|
)
|
|
(9,889
|
)
|
||||
Accumulated impairment loss
|
(259,732
|
)
|
|
(17,720
|
)
|
|
—
|
|
|
(277,452
|
)
|
||||
Goodwill, net of impairment loss
|
$
|
44,545
|
|
|
$
|
25,685
|
|
|
$
|
9,418
|
|
|
$
|
79,648
|
|
(a)
|
See Note 4 - Disposal and Discontinued Operations.
|
(b)
|
Goodwill acquired from the acquisition of USR. See Note 3 - Acquisitions.
|
|
|
|
December 31,
|
||||||
|
Useful Lives
|
|
2016
|
|
2015
|
||||
|
|
|
(amounts in thousands)
|
||||||
|
|
|
|
|
|
||||
Computer equipment
|
3-5 years
|
|
$
|
13,584
|
|
|
$
|
12,335
|
|
Computer software
|
3-5 years
|
|
28,752
|
|
|
27,565
|
|
||
Office equipment
|
5-7 years
|
|
2,397
|
|
|
2,241
|
|
||
Furniture and fixtures
|
5-7 years
|
|
3,969
|
|
|
3,411
|
|
||
Leasehold improvements
|
(a)
|
|
7,257
|
|
|
4,286
|
|
||
|
|
|
55,959
|
|
|
49,838
|
|
||
Less accumulated depreciation and amortization
|
|
|
(43,141
|
)
|
|
(39,368
|
)
|
||
|
|
|
$
|
12,818
|
|
|
$
|
10,470
|
|
(a)
|
See Note 2 – Summary of Significant Accounting Policies.
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(amounts in thousands)
|
||||||
Insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for health
|
$
|
279
|
|
|
$
|
—
|
|
Insurance recovery for workers’ compensation
|
1,271
|
|
|
1,403
|
|
||
Insurance recovery for professional liability
|
1,487
|
|
|
1,463
|
|
||
|
$
|
3,037
|
|
|
$
|
2,866
|
|
|
|
|
|
||||
Other non-current assets:
|
|
|
|
||||
Insurance recovery for workers’ compensation – long-term
|
$
|
5,857
|
|
|
$
|
6,281
|
|
Insurance recovery for professional liability – long-term
|
10,353
|
|
|
10,722
|
|
||
Non-current security deposits
|
925
|
|
|
991
|
|
||
|
$
|
17,135
|
|
|
$
|
17,994
|
|
|
|
|
|
||||
Accrued compensation and benefits:
|
|
|
|
||||
Salaries and payroll taxes
|
$
|
15,480
|
|
|
$
|
11,976
|
|
Bonuses
|
3,915
|
|
|
4,584
|
|
||
Accrual for workers’ compensation claims
|
5,266
|
|
|
5,151
|
|
||
Accrual for professional liability insurance
|
2,433
|
|
|
2,516
|
|
||
Accrual for health care benefits
|
4,053
|
|
|
3,009
|
|
||
Accrual for vacation
|
2,096
|
|
|
2,166
|
|
||
|
$
|
33,243
|
|
|
$
|
29,402
|
|
|
|
|
|
||||
Long-term accrued claims:
|
|
|
|
||||
Accrual for workers’ compensation claims
|
$
|
12,817
|
|
|
$
|
14,014
|
|
Accrual for professional liability insurance
|
16,053
|
|
|
16,056
|
|
||
|
$
|
28,870
|
|
|
$
|
30,070
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred compensation
|
$
|
1,472
|
|
|
$
|
1,412
|
|
Deferred rent
|
5,011
|
|
|
2,473
|
|
||
Long-term unrecognized tax benefits
|
874
|
|
|
819
|
|
||
Other
|
42
|
|
|
122
|
|
||
|
$
|
7,399
|
|
|
$
|
4,826
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Term Loan, interest 2.62%
|
$
|
39,500
|
|
|
$
|
(363
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
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
|
|
|
(4,669
|
)
|
|
25,000
|
|
|
(6,007
|
)
|
||||
Convertible Notes derivative liability
|
27,532
|
|
|
—
|
|
|
33,337
|
|
|
—
|
|
||||
Capital lease obligations
|
23
|
|
|
—
|
|
|
94
|
|
|
—
|
|
||||
Total debt
|
92,055
|
|
|
(5,032
|
)
|
|
96,431
|
|
|
(7,059
|
)
|
||||
Less current portion
|
(2,263
|
)
|
|
—
|
|
|
(8,071
|
)
|
|
—
|
|
||||
Long-term debt
|
$
|
89,792
|
|
|
$
|
(5,032
|
)
|
|
$
|
88,360
|
|
|
$
|
(7,059
|
)
|
|
Term Loan
|
|
Convertible Notes
|
|
Capital Leases
|
||||||
|
(amounts in thousands)
|
||||||||||
Through Years Ending December 31:
|
|
|
|
|
|
||||||
2017
|
$
|
2,250
|
|
|
$
|
—
|
|
|
$
|
13
|
|
2018
|
3,750
|
|
|
—
|
|
|
8
|
|
|||
2019
|
3,500
|
|
|
—
|
|
|
2
|
|
|||
2020
|
4,000
|
|
|
25,000
|
|
|
—
|
|
|||
2021
|
26,000
|
|
|
—
|
|
|
—
|
|
|||
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total
|
$
|
39,500
|
|
|
$
|
25,000
|
|
|
$
|
23
|
|
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%
|
|
December 31, 2016
|
|
December 31, 2015
|
||||
Financial Liabilities:
|
(amounts in thousands)
|
||||||
(Level 1)
|
|
|
|
||||
Deferred compensation
|
$
|
1,472
|
|
|
$
|
1,412
|
|
(Level 3)
|
|
|
|
|
|
||
Convertible Notes derivative liability
|
$
|
27,532
|
|
|
$
|
33,337
|
|
Contingent purchase price liabilities
|
$
|
5,603
|
|
|
$
|
3,686
|
|
|
Contingent Purchase
|
|
Convertible Notes
|
||||
|
Price Liabilities (a)
|
|
Derivative Liability
|
||||
|
(amounts in thousands)
|
||||||
|
|
|
|
||||
December 31, 2014
|
$
|
—
|
|
|
$
|
23,436
|
|
Additions
|
3,686
|
|
|
—
|
|
||
Valuation loss for the period
|
—
|
|
|
9,901
|
|
||
December 31, 2015
|
3,686
|
|
|
33,337
|
|
||
Additions
|
1,300
|
|
|
—
|
|
||
Payments
|
(152
|
)
|
|
—
|
|
||
Accretion expense
|
887
|
|
|
—
|
|
||
Valuation gain for the period
|
(118
|
)
|
|
(5,805
|
)
|
||
December 31, 2016
|
$
|
5,603
|
|
|
$
|
27,532
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
|||||||||
|
(amounts in thousands)
|
||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
(Level 2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Second Lien Term Loan, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,948
|
|
|
$
|
30,600
|
|
Term Loan, net
|
$
|
39,137
|
|
|
$
|
41,500
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Convertible Notes, net
|
$
|
20,331
|
|
|
$
|
27,250
|
|
|
$
|
18,993
|
|
|
$
|
23,250
|
|
Senior Secured Asset-Based Loan
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,000
|
|
|
$
|
8,000
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands)
|
||||||||||
United States
|
$
|
3,309
|
|
|
$
|
3,565
|
|
|
$
|
(33,574
|
)
|
Foreign
|
1,236
|
|
|
595
|
|
|
2,256
|
|
|||
Income (loss) before income taxes
|
$
|
4,545
|
|
|
$
|
4,160
|
|
|
$
|
(31,318
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
227
|
|
|
$
|
551
|
|
|
$
|
—
|
|
State
|
587
|
|
|
(21
|
)
|
|
811
|
|
|||
Foreign
|
322
|
|
|
220
|
|
|
262
|
|
|||
Total
|
1,136
|
|
|
750
|
|
|
1,073
|
|
|||
|
|
|
|
|
|
||||||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(4,114
|
)
|
|
(1,819
|
)
|
|
(1,320
|
)
|
|||
State
|
(866
|
)
|
|
8
|
|
|
68
|
|
|||
Foreign
|
(342
|
)
|
|
267
|
|
|
395
|
|
|||
Total
|
(5,322
|
)
|
|
(1,544
|
)
|
|
(857
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(4,186
|
)
|
|
$
|
(794
|
)
|
|
$
|
216
|
|
|
December 31,
|
||||||
|
2016
|
|
2015
|
||||
|
(amounts in thousands)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Accrued other and prepaid expenses
|
$
|
3,494
|
|
|
$
|
2,973
|
|
Allowance for doubtful accounts
|
704
|
|
|
1,278
|
|
||
Intangible Assets
|
10,725
|
|
|
11,365
|
|
||
Net operating loss carryforwards
|
17,228
|
|
|
22,662
|
|
||
Derivative interest
|
7,940
|
|
|
10,144
|
|
||
Accrued professional liability
|
2,632
|
|
|
2,536
|
|
||
Accrued workers’ compensation
|
3,439
|
|
|
3,061
|
|
||
Share-based compensation
|
—
|
|
|
891
|
|
||
Credit carryforwards
|
1,055
|
|
|
797
|
|
||
Other
|
584
|
|
|
595
|
|
||
Gross deferred tax assets
|
47,801
|
|
|
56,302
|
|
||
Valuation allowance
|
(46,454
|
)
|
|
(55,336
|
)
|
||
|
1,347
|
|
|
966
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Depreciation
|
(70
|
)
|
|
(123
|
)
|
||
Indefinite intangibles
|
(13,971
|
)
|
|
(18,714
|
)
|
||
Tax on unrepatriated earnings
|
(263
|
)
|
|
(604
|
)
|
||
Share-based compensation
|
(197
|
)
|
|
—
|
|
||
|
(14,501
|
)
|
|
(19,441
|
)
|
||
Net deferred taxes
|
$
|
(13,154
|
)
|
|
$
|
(18,475
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands)
|
||||||||||
Tax at U.S. statutory rate
|
$
|
1,591
|
|
|
$
|
1,456
|
|
|
$
|
(10,961
|
)
|
State taxes, net of federal benefit
|
344
|
|
|
611
|
|
|
219
|
|
|||
Noncontrolling interest
|
(260
|
)
|
|
—
|
|
|
—
|
|
|||
Non-deductible meals and entertainment
|
1,546
|
|
|
1,510
|
|
|
1,425
|
|
|||
Foreign tax expense
|
(5
|
)
|
|
(6
|
)
|
|
44
|
|
|||
Valuation allowances
|
(8,379
|
)
|
|
(5,078
|
)
|
|
12,038
|
|
|||
Uncertain tax positions
|
1,090
|
|
|
917
|
|
|
(996
|
)
|
|||
Audit settlements
|
—
|
|
|
(624
|
)
|
|
—
|
|
|||
Other
|
(113
|
)
|
|
420
|
|
|
(1,553
|
)
|
|||
Total income tax (benefit) expense
|
$
|
(4,186
|
)
|
|
$
|
(794
|
)
|
|
$
|
216
|
|
|
2016
|
|
2015
|
||||
|
(amounts in thousands)
|
||||||
Balance at January 1
|
$
|
4,071
|
|
|
$
|
3,777
|
|
Additions based on tax positions related to the current year
|
1,054
|
|
|
861
|
|
||
Additions based on tax positions related to prior years
|
55
|
|
|
62
|
|
||
Reductions based on settlements of tax positions related to prior years
|
—
|
|
|
(624
|
)
|
||
Other
|
—
|
|
|
(5
|
)
|
||
Balance at December 31
|
$
|
5,180
|
|
|
$
|
4,071
|
|
|
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
|
|
|
(79,636
|
)
|
|
$
|
5.82
|
|
Forfeited
|
(27,617
|
)
|
|
$
|
11.11
|
|
|
(24,852
|
)
|
|
$
|
11.75
|
|
Unvested restricted stock awards, December 31, 2016
|
532,294
|
|
|
$
|
9.98
|
|
|
332,092
|
|
|
$
|
11.73
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands)
|
||||||||||
Total intrinsic value of options exercised
|
$
|
1,323
|
|
|
$
|
1,610
|
|
|
$
|
695
|
|
|
Number of Shares
|
|
Option Price
|
|
Weighted
Average Exercise Price |
|
Weighted-
Average Remaining Contractual Life (in years) |
|
Aggregate
Intrinsic Value (amounts in thousands) |
|||
Share options outstanding at beginning of year
|
395,625
|
|
|
$4.16-$22.50
|
|
$6.28
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
—
|
|
|
|
|
||
Exercised
|
(195,312
|
)
|
|
$4.35-$8.56
|
|
$6.08
|
|
|
|
|
||
Forfeited/expired
|
(12,100
|
)
|
|
$5.21-$22.50
|
|
$17.97
|
|
|
|
|
||
Share options outstanding at end of year
|
188,213
|
|
|
$4.16-$22.50
|
|
$5.72
|
|
2.62
|
|
$
|
1,870
|
|
Share options exercisable at end of year
|
137,087
|
|
|
$4.16-$22.50
|
|
$5.90
|
|
2.33
|
|
$
|
1,341
|
|
Share options unvested at end of year
|
51,126
|
|
|
$4.92-$5.61
|
|
$5.26
|
|
3.40
|
|
$
|
529
|
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income (loss) attributable to common shareholders - Basic
|
$
|
7,967
|
|
|
$
|
4,418
|
|
|
$
|
(31,783
|
)
|
Interest on Convertible Notes
|
3,383
|
|
|
*
|
|
|
*
|
|
|||
(Gain) loss on derivative liability
|
(5,805
|
)
|
|
*
|
|
|
*
|
|
|||
Net income (loss) attributable to common shareholders - Diluted
|
$
|
5,545
|
|
|
$
|
4,418
|
|
|
$
|
(31,783
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares - Basic
|
32,132
|
|
|
31,514
|
|
|
31,190
|
|
|||
Effective of diluted shares:
|
|
|
|
|
|
||||||
Share-based awards
|
593
|
|
|
648
|
|
|
—
|
|
|||
Convertible Notes
|
3,521
|
|
|
—
|
|
|
—
|
|
|||
Weighted average common shares - Diluted
|
36,246
|
|
|
32,162
|
|
|
31,190
|
|
|||
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to common shareholders - Basic
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
|
|
|
|
|
||||||
Net income (loss) per share attributable to common shareholders - Diluted
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
(1.02
|
)
|
|
Year Ended December 31,
|
|||||||
|
2016
|
|
2015
|
|
2014
|
|||
|
(amounts in thousands)
|
|||||||
Convertible notes and share-based awards
|
—
|
|
|
3,521
|
|
|
3,856
|
|
•
|
Nurse and Allied Staffing -
Nurse and Allied Staffing provides traditional staffing, recruiting, and value-added workforce solutions including: temporary and permanent placement of travel and local branch-based nurse and allied professionals, MSP services, education healthcare services, and outsourcing services. 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.
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
||||||
|
(amounts in thousands)
|
||||||||||
Revenue from services:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing (a)
|
$
|
721,486
|
|
|
$
|
621,258
|
|
|
$
|
459,195
|
|
Physician Staffing
|
98,283
|
|
|
115,336
|
|
|
121,145
|
|
|||
Other Human Capital Management Services
|
13,768
|
|
|
30,827
|
|
|
37,485
|
|
|||
|
$
|
833,537
|
|
|
$
|
767,421
|
|
|
$
|
617,825
|
|
Contribution income (loss):
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing (a)
|
$
|
71,992
|
|
|
$
|
55,718
|
|
|
$
|
36,486
|
|
Physician Staffing
|
8,265
|
|
|
10,213
|
|
|
6,540
|
|
|||
Other Human Capital Management Services
|
(535
|
)
|
|
1,863
|
|
|
514
|
|
|||
|
79,722
|
|
|
67,794
|
|
|
43,540
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead (a)
|
38,400
|
|
|
32,703
|
|
|
27,770
|
|
|||
Depreciation
|
4,168
|
|
|
3,856
|
|
|
3,866
|
|
|||
Amortization
|
5,014
|
|
|
4,210
|
|
|
3,575
|
|
|||
Loss on sale of business (b)
|
—
|
|
|
2,184
|
|
|
—
|
|
|||
Acquisition and integration costs
|
78
|
|
|
902
|
|
|
7,957
|
|
|||
Acquisition-related contingent consideration
|
814
|
|
|
—
|
|
|
—
|
|
|||
Restructuring costs
|
753
|
|
|
1,274
|
|
|
840
|
|
|||
Impairment charges (c)
|
24,311
|
|
|
2,100
|
|
|
10,000
|
|
|||
Income (loss) from operations
|
$
|
6,184
|
|
|
$
|
20,565
|
|
|
$
|
(10,468
|
)
|
(a)
|
The Company has been centralizing administrative functions to gain efficiencies and, as a result, certain prior periods have been restated for comparability purposes. For the year ended December 31, 2015,
$1.2 million
of expenses were reclassified from Nurse and Allied Staffing to unallocated corporate overhead to conform to the current period presentation. It was not practicable to reclassify these amounts for the year ended December 31, 2014.
|
(b)
|
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.
|
(c)
|
During the years ended December 31, 2016, 2015, and 2014, the Company recorded impairment charges of
$24.3 million
,
$2.1 million
, and
$10.0 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Intangible Assets.
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2016
|
(amounts in thousands, except per share data)
|
||||||||||||||
Revenue from services
|
$
|
196,583
|
|
|
$
|
199,443
|
|
|
$
|
214,988
|
|
|
$
|
222,523
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit
|
51,046
|
|
|
54,846
|
|
|
58,210
|
|
|
57,633
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated net income (loss)
|
19,186
|
|
|
(17,095
|
)
|
|
14,289
|
|
|
(7,649
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to common shareholders
|
19,022
|
|
|
(17,237
|
)
|
|
14,066
|
|
|
(7,884
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders - Basic
|
$
|
0.60
|
|
|
$
|
(0.54
|
)
|
|
$
|
0.44
|
|
|
$
|
(0.24
|
)
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to common shareholders - Diluted
|
$
|
0.09
|
|
|
$
|
(0.54
|
)
|
|
$
|
0.22
|
|
|
$
|
(0.24
|
)
|
|
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
|
)
|
•
|
The Company recorded changes in the fair value of convertible notes derivative liability, recording a gain in the first and third quarters of 2016 of
$16.4 million
and
$7.1 million
, respectively, and a loss in the second and fourth quarters of 2016 of
$3.6 million
and
$14.2 million
, respectively. The Company also recorded a gain in the first and second quarters of 2015 of
$2.1 million
and
$0.4 million
, respectively, and a loss in the third and fourth quarters of 2015 of
$2.9 million
and
$9.5 million
, respectively. See Note 9 - Convertible Notes Derivative Liability.
|
•
|
During the second quarter of 2016 and the fourth quarter of 2015, the Company recorded impairment charges of
$24.3 million
and
$2.1 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Intangible Assets.
|
•
|
During the second quarter of 2016, the Company repaid its Second Lien Term Loan and recognized a loss on extinguishment of debt of
$1.6 million
. See Note 8 - Debt.
|
•
|
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.
|
•
|
In 2016, the Company recorded acquisition-related contingent consideration expense primarily related to the Mediscan acquisition, recording
$0.3 million
in the first quarter,
$0.2 million
in the second and third quarters, and
$0.1 million
in the fourth quarter. There were no similar costs recorded in 2015. See Note 3 - Acquisitions and Note 10 - Fair Value Measurements.
|
•
|
In the third and fourth quarters of 2016, the Company recorded restructuring costs of
$0.6 million
and
$0.2 million
, respectively, primarily related to the centralization of corporate functions. In the second, third, and fourth quarters of 2015, the Company recorded restructuring costs of
$1.0 million
,
$0.2 million
, and
$0.1 million
, respectively. See Note 2 - Summary of Significant Accounting Policies.
|
|
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, 2016
|
$
|
4,045
|
|
|
$
|
4,034
|
|
|
$
|
(5,149
|
)
|
|
$
|
315
|
|
|
$
|
—
|
|
|
$
|
3,245
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Valuation Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2016
|
$
|
55,336
|
|
|
$
|
(8,894
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
46,454
|
|
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
|
|
(a)
|
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.
|
|
|
|
|
2
|
|
|
3
|
|
|
4
|
|
|
5
|
|
By:
|
/s/ William J. Burns
Name: William J. Burns Title: EVP & Chief Financial Officer |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
|
6
|
|
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
|
7
|
|
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
By:
|
/s/ William J. Burns
Name: William J. Burns Title: Vice President |
|
8
|
|
By:
|
/s/ Bryan Martoken
Name: Bryan Martoken Title: Chief Financial Officer |
|
9
|
|
|
10
|
|
|
11
|
|
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
|
Cross Country Support Services, LLC
|
|
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;
|
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 3, 2017
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President, Chief Executive Officer, Director
(Principal 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;
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c.
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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
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d.
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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
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5.
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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):
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a.
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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
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b.
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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.
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Date:
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March 3, 2017
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/s/ William J. Burns
|
|
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William J. Burns
EVP & Chief Financial Officer
(Principal Accounting and Financial Officer)
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Date:
|
March 3, 2017
|
/s/ William J. Grubbs
|
|
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William J. Grubbs
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
Date:
|
March 3, 2017
|
/s/ William J. Burns
|
|
|
William J. Burns
EVP & Chief Financial Officer
(Principal Accounting and Financial Officer)
|