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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
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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 consultative approach to address total talent management, 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 and standardization of total contract labor spend. This MSP model has become a desired practice of healthcare systems seeking to drive financial and operating efficiencies, while ensuring quality of care.
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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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Education Healthcare Staffing 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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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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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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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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December 31, 2017
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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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100,000
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Total Cross Country Healthcare, Inc. stockholders' equity
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$
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237,089
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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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Boca Raton, Florida
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Corporate headquarters
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48,154
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November 30, 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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Creve Coeur, Missouri
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Physician and Executive search headquarters
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27,051
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August 31, 2024
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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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2017
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Quarter Ended March 31, 2017
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$
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14.96
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$
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14.48
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Quarter Ended June 30, 2017
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$
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13.11
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$
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12.69
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Quarter Ended September 30, 2017
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$
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12.73
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$
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12.32
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Quarter Ended December 31, 2017
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$
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13.44
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$
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13.02
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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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Year Ended December 31,
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2017
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2016
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2015
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2014
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2013
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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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865,048
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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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Income (loss) from operations
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11,748
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6,184
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20,565
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(10,468
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)
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(8,022
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)
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Consolidated net income (loss)
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38,802
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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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Net income (loss) attributable to common shareholders
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37,513
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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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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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1.07
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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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Net income (loss) per share attributable to common shareholders - Diluted
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$
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1.01
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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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Weighted Average Common Shares Outstanding:
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Basic
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35,018
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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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Diluted
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36,166
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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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Other Operating Data:
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Cash and cash equivalents
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$
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25,537
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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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Total assets
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467,687
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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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Total debt at par
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100,000
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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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|||||
Total stockholders’ equity
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237,719
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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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|||||
Net cash provided by (used in) operating activities
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45,508
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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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•
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Consolidated net income (loss) for the years ended December 31, 2017, 2016, 2015, and 2014, respectively, includes amounts attributable to noncontrolling interest of
$1.3 million
,
$0.8 million
,
$0.5 million
, and
$0.2
million. See Note 1 - Organization and Basis of Presentation to our consolidated financial statements.
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•
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We acquired all of the assets of Advantage effective July 1, 2017, 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 effective dates of acquisition. For the years ended December 31, 2017, 2016, 2015, 2014, and 2013, we recognized
$2.0 million
,
$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 years ended
December 31, 2017
and 2016 include less than
$0.1 million
and
$0.8 million
, respectively, of acquisition-related contingent consideration expense primarily related to the USR and Mediscan acquisitions. See Note 3 - Acquisitions and Note 10 - Fair Value Measurements to our consolidated financial statements.
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•
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We incurred restructuring costs in the years ended
December 31, 2017
,
2016
,
2015
, 2014, and 2013, for
$1.0 million
,
$0.8 million
,
$1.3 million
,
$0.8 million
, and
$0.5 million
, respectively. Restructuring costs relate to discrete cost savings initiatives in each year.
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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.
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•
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Non-cash impairment charges of
$14.4 million
,
$24.3 million
,
$2.1 million
,
$10.0 million
, and
$6.4 million
, respectively, were incurred in the years ended December 31, 2017, 2016, 2015, 2014, and 2013. See Note 5 - Goodwill, Trade Names, and Other Intangible Assets to our consolidated financial statements.
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•
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The years ended December 31, 2017 and 2016 include the impact of a gain on derivative liability of
$1.6
million and
$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 related 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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•
|
We incurred a loss on sale of business of
$2.2 million
(an after-tax gain of
$1.3 million
), in the year ended December 31, 2015, related to the sale of our education seminars business, Cross Country Education, LLC (CCE) on August 31, 2015. See Note 4 - Disposal to our consolidated financial statements.
|
•
|
The years ended December 31, 2017, 2016, and 2013 include a loss on early extinguishment of debt of
$5.0
million,
$1.6 million
, and
$1.4 million
, respectively, related to extinguishment fees and the write-off of unamortized loan fees and net debt discount and issuance costs related to prior credit agreements. See Note 8 - Debt to our consolidated financial statements.
|
•
|
The income tax benefit for the year ended December 31, 2017 was primarily the result of reducing federal and certain state valuation allowances on our deferred tax assets totaling
$45.4 million
, offset by an
$8.0
million reduction in our net
deferred tax assets (relating to the impact from the 2017 Tax Act signed into legislation on December 22, 2017). Previously, in the year ended December 31, 2013, we recorded valuation allowances of
$52.0 million
covering all of our net deferred tax assets. The valuation allowance was maintained and reflected in the years ended December 31, 2014 through December 31, 2016.
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●
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Nurse and Allied Staffing
– For the year ended December 31, 2017, Nurse and Allied Staffing represented approximately
88%
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. Substantially all of the results of the acquisition of Advantage have been aggregated with our Nurse and Allied Staffing business segment. See Note 3 - Acquisitions to our consolidated financial statements.
|
●
|
Physician Staffing
– For the year ended December 31, 2017, Physician Staffing represented approximately 11% of our total revenue. Physician Staffing provides physicians in many specialties, as well as CRNAs, NP, and PAs under our Medical Doctor Associates (MDA) brand as independent contractors on temporary assignments throughout the U.S. Less than 2% of the business related to the Advantage acquisition is managed by, and included in, the Physician Staffing business segment.
|
●
|
Other Human Capital Management Services
– For the year ended December 31, 2017, Other Human Capital Management Services (OHCMS) represented approximately 1% 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 per FTE 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. This method does not reflect the impact of
revenue generated from permanent placements, reimbursed
expenses, discounts and allowances, and the impact from accruals
and adjustments recorded for financial statement purposes.
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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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2017
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2016
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|
2015
|
|||
Revenue from services
|
100.0
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%
|
|
100.0
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%
|
|
100.0
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%
|
Direct operating expenses
|
73.6
|
|
|
73.4
|
|
|
74.3
|
|
Selling, general, and administrative expenses
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21.7
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|
|
21.5
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|
|
21.0
|
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Bad debt expense
|
0.2
|
|
|
0.1
|
|
|
0.1
|
|
Depreciation and amortization
|
1.2
|
|
|
1.1
|
|
|
1.0
|
|
Loss on sale of business
|
—
|
|
|
—
|
|
|
0.3
|
|
Acquisition and integration costs
|
0.2
|
|
|
—
|
|
|
0.1
|
|
Acquisition-related contingent consideration
|
—
|
|
|
0.1
|
|
|
—
|
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Restructuring costs
|
0.1
|
|
|
0.1
|
|
|
0.2
|
|
Impairment charges
|
1.6
|
|
|
2.9
|
|
|
0.3
|
|
Income from operations
|
1.4
|
|
|
0.8
|
|
|
2.7
|
|
Interest expense
|
0.5
|
|
|
0.7
|
|
|
0.9
|
|
(Gain) loss on derivative liability
|
(0.2
|
)
|
|
(0.7
|
)
|
|
1.3
|
|
Loss on early extinguishment of debt
|
0.6
|
|
|
0.2
|
|
|
—
|
|
Income before income taxes
|
0.5
|
|
|
0.6
|
|
|
0.5
|
|
Income tax benefit
|
(4.0
|
)
|
|
(0.5
|
)
|
|
(0.1
|
)
|
Consolidated net income
|
4.5
|
|
|
1.1
|
|
|
0.6
|
|
Less: Net income attributable to noncontrolling interest in subsidiary
|
0.2
|
|
|
0.1
|
|
|
—
|
|
Net income attributable to common shareholders
|
4.3
|
%
|
|
1.0
|
%
|
|
0.6
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
|
|
|
|
Increase (Decrease)
|
|
Increase (Decrease)
|
|||||||
|
2017
|
|
2016
|
|
$
|
|
%
|
|||||||
|
(Dollars in thousands)
|
|||||||||||||
Revenue from services
|
$
|
865,048
|
|
|
$
|
833,537
|
|
|
$
|
31,511
|
|
|
3.8
|
%
|
Direct operating expenses
|
636,462
|
|
|
611,802
|
|
|
24,660
|
|
|
4.0
|
%
|
|||
Selling, general, and administrative expenses
|
187,435
|
|
|
179,820
|
|
|
7,615
|
|
|
4.2
|
%
|
|||
Bad debt expense
|
1,828
|
|
|
593
|
|
|
1,235
|
|
|
208.3
|
%
|
|||
Depreciation and amortization
|
10,174
|
|
|
9,182
|
|
|
992
|
|
|
10.8
|
%
|
|||
Acquisition-related contingent consideration
|
44
|
|
|
814
|
|
|
(770
|
)
|
|
(94.6
|
)%
|
|||
Acquisition and integration costs
|
1,975
|
|
|
78
|
|
|
1,897
|
|
|
2,432.1
|
%
|
|||
Restructuring costs
|
1,026
|
|
|
753
|
|
|
273
|
|
|
36.3
|
%
|
|||
Impairment charges
|
14,356
|
|
|
24,311
|
|
|
(9,955
|
)
|
|
(40.9
|
)%
|
|||
Income from operations
|
11,748
|
|
|
6,184
|
|
|
5,564
|
|
|
90.0
|
%
|
|||
Interest expense
|
4,214
|
|
|
6,106
|
|
|
(1,892
|
)
|
|
(31.0
|
)%
|
|||
Gain on derivative liability
|
(1,581
|
)
|
|
(5,805
|
)
|
|
4,224
|
|
|
72.8
|
%
|
|||
Loss on early extinguishment of debt
|
4,969
|
|
|
1,568
|
|
|
3,401
|
|
|
216.9
|
%
|
|||
Other income, net
|
(155
|
)
|
|
(230
|
)
|
|
75
|
|
|
32.6
|
%
|
|||
Income before income taxes
|
4,301
|
|
|
4,545
|
|
|
(244
|
)
|
|
(5.4
|
)%
|
|||
Income tax benefit
|
(34,501
|
)
|
|
(4,186
|
)
|
|
(30,315
|
)
|
|
(724.2
|
)%
|
|||
Consolidated net income
|
38,802
|
|
|
8,731
|
|
|
30,071
|
|
|
344.4
|
%
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
1,289
|
|
|
764
|
|
|
525
|
|
|
68.7
|
%
|
|||
Net income attributable to common shareholders
|
$
|
37,513
|
|
|
$
|
7,967
|
|
|
$
|
29,546
|
|
|
370.9
|
%
|
|
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,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
Revenue from services:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing
|
$
|
758,267
|
|
|
$
|
721,486
|
|
|
$
|
621,258
|
|
Physician Staffing
|
93,610
|
|
|
98,283
|
|
|
115,336
|
|
|||
Other Human Capital Management Services
|
13,171
|
|
|
13,768
|
|
|
30,827
|
|
|||
|
$
|
865,048
|
|
|
$
|
833,537
|
|
|
$
|
767,421
|
|
|
|
|
|
|
|
||||||
Contribution income (loss):
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing
|
$
|
73,614
|
|
|
$
|
71,992
|
|
|
$
|
55,718
|
|
Physician Staffing
|
5,256
|
|
|
8,265
|
|
|
10,213
|
|
|||
Other Human Capital Management Services
|
(357
|
)
|
|
(535
|
)
|
|
1,863
|
|
|||
|
78,513
|
|
|
79,722
|
|
|
67,794
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead
|
39,190
|
|
|
38,400
|
|
|
32,703
|
|
|||
Depreciation and amortization
|
10,174
|
|
|
9,182
|
|
|
8,066
|
|
|||
Loss on sale of business
|
—
|
|
|
—
|
|
|
2,184
|
|
|||
Acquisition and integration costs
|
1,975
|
|
|
78
|
|
|
902
|
|
|||
Acquisition-related contingent consideration
|
44
|
|
|
814
|
|
|
—
|
|
|||
Restructuring costs
|
1,026
|
|
|
753
|
|
|
1,274
|
|
|||
Impairment charges
|
14,356
|
|
|
24,311
|
|
|
2,100
|
|
|||
Income from operations
|
$
|
11,748
|
|
|
$
|
6,184
|
|
|
$
|
20,565
|
|
|
Year Ended December 31,
|
|
|
|
Percent
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
FTEs
|
7,397
|
|
|
6,953
|
|
|
444
|
|
|
6.4
|
%
|
|||
Average Nurse and Allied Staffing revenue per FTE per day
|
$
|
281
|
|
|
$
|
284
|
|
|
$
|
(3
|
)
|
|
(1.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Physician Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
Days filled
|
61,148
|
|
|
62,482
|
|
|
(1,334
|
)
|
|
(2.1
|
)%
|
|||
Revenue per day filled
|
$
|
1,549
|
|
|
$
|
1,549
|
|
|
$
|
—
|
|
|
—
|
%
|
|
Year Ended December 31,
|
|
|
|
Percent
|
|||||||||
|
2016
|
|
2015
|
|
Change
|
|
Change
|
|||||||
|
|
|
|
|
|
|
|
|||||||
Nurse and Allied Staffing statistical data:
|
|
|
|
|
|
|
|
|||||||
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:
|
|
|
|
|
|
|
|
|||||||
Days filled
|
62,482
|
|
|
77,601
|
|
|
(15,119
|
)
|
|
(19.5
|
)%
|
|||
Revenue per day filled
|
$
|
1,549
|
|
|
$
|
1,463
|
|
|
$
|
86
|
|
|
5.9
|
%
|
Commitments
|
|
Total
|
|
2018
|
|
2019
|
|
2020
|
|
2021
|
|
2022
|
|
Thereafter
|
||||||||||||||
|
|
(Unaudited, amounts in thousands)
|
||||||||||||||||||||||||||
Term Loan (a)
|
|
$
|
100,000
|
|
|
$
|
6,875
|
|
|
$
|
7,500
|
|
|
$
|
8,125
|
|
|
$
|
10,000
|
|
|
$
|
67,500
|
|
|
$
|
—
|
|
Interest on debt (b)
|
|
18,395
|
|
|
5,371
|
|
|
4,025
|
|
|
3,758
|
|
|
3,418
|
|
|
1,823
|
|
|
—
|
|
|||||||
Contingent consideration (c)
|
|
7,391
|
|
|
280
|
|
|
399
|
|
|
6,712
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Operating lease obligations (d)
|
|
32,741
|
|
|
6,700
|
|
|
5,180
|
|
|
4,438
|
|
|
3,993
|
|
|
3,698
|
|
|
8,732
|
|
|||||||
|
|
$
|
158,527
|
|
|
$
|
19,226
|
|
|
$
|
17,104
|
|
|
$
|
23,033
|
|
|
$
|
17,411
|
|
|
$
|
73,021
|
|
|
$
|
8,732
|
|
(a)
|
Under our Amended Term Loan, we are required to comply with certain financial covenants. Our inability to comply with the required covenants or other provisions could result in default under our amended credit facilities. In the event of any such default and our inability to obtain a waiver of the default, all amounts outstanding under the Amended Credit Facilities could be declared immediately due and payable. As of
December 31, 2017
, we are in compliance with the financial covenants and other covenants contained in the Credit Agreement.
|
(b)
|
Interest on debt represents payments due through maturity for our Term Loan, calculated using the December 31, 2017 applicable LIBOR and margin rate totaling 3.6%.
|
(c)
|
The contingent consideration represents the estimated payments due to the sellers related to the Mediscan and USR acquisitions, including accretion. In the third quarter of 2017, we determined that one of the contingent consideration earnouts related to the Mediscan acquisition would not be achieved for 2017 and, as a result, the entire earnout liability was reversed. See Note 3 - Acquisitions to our consolidated financial statements. While it is not certain if, or when, the remaining 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.
|
(d)
|
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.
|
/s/ DELOITTE & TOUCHE LLP
|
|
Certified Public Accountants
|
|
|
|
Boca Raton, Florida
|
|
March 2, 2018
|
|
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)
(1)
|
||||
Equity compensation plans approved by
security holders
|
94,500
|
|
|
$
|
5.19
|
|
|
2,338,804
|
|
Equity compensation plans not approved by
security holders
|
None
|
|
|
N/A
|
|
|
N/A
|
|
|
Total
|
94,500
|
|
|
$
|
5.19
|
|
|
2,338,804
|
|
|
CROSS COUNTRY HEALTHCARE, INC.
|
|
|
|
|
|
By:
|
/s/ William J. Grubbs
|
|
|
Name: William J. Grubbs
|
|
|
Title: President, Chief Executive Officer, Director
|
|
|
Principal Executive Officer
|
|
|
Date: March 2, 2018
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
|
|
|
|
|
/s/ William J. Grubbs
|
|
President, Chief Executive Officer, Director
|
|
March 2, 2018
|
William J. Grubbs
|
|
(Principal Executive Officer)
|
|
|
|
|
|
|
|
/s/ Christopher R. Pizzi
|
|
SVP & Chief Financial Officer
|
|
March 2, 2018
|
Christopher R. Pizzi
|
|
(Principal Accounting and Financial Officer)
|
|
|
|
|
|
|
|
/s/ W. Larry Cash
|
|
Director
|
|
March 2, 2018
|
W. Larry Cash
|
|
|
|
|
|
|
|
|
|
/s/ Thomas C. Dircks
|
|
Director
|
|
March 2, 2018
|
Thomas C. Dircks
|
|
|
|
|
|
|
|
|
|
/s/ Gale Fitzgerald
|
|
Director
|
|
March 2, 2018
|
Gale Fitzgerald
|
|
|
|
|
|
|
|
|
|
/s/ Richard M. Mastaler
|
|
Director
|
|
March 2, 2018
|
Richard M. Mastaler
|
|
|
|
|
|
|
|
|
|
/s/ Mark Perlberg
|
|
Director
|
|
March 2, 2018
|
Mark Perlberg
|
|
|
|
|
|
|
|
|
|
/s/ Joseph A. Trunfio
|
|
Director
|
|
March 2, 2018
|
Joseph A. Trunfio
|
|
|
|
|
No.
|
|
Description
|
3.1
|
|
|
*3.2
|
|
|
3.3
|
|
|
4.1
|
|
|
4.2 #
|
|
|
4.3 #
|
|
|
4.4
|
|
|
10.1 #
|
|
|
10.2 #
|
|
|
10.3
|
|
|
10.4
|
|
|
10.5
|
|
|
10.6 #
|
|
|
10.7 #
|
|
|
10.8
|
|
|
10.90
|
|
|
10.10 #
|
|
|
10.11
|
|
|
10.12
|
|
|
10.13
|
|
No.
|
|
Description
|
10.14
|
|
|
10.15 #
|
|
|
10.16
|
|
|
10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20 #
|
|
|
10.21
|
|
|
10.22
|
|
|
10.23
|
|
|
10.24
|
|
|
10.25
|
|
|
10.26
|
|
|
10.27
|
|
|
10.28
|
|
|
10.29
|
|
|
10.30
|
|
No.
|
|
Description
|
10.31
|
|
|
10.32
|
|
|
10.33
|
|
|
10.34
|
|
|
10.35
|
|
|
10.36
|
|
|
10.37 #
|
|
|
10.38 #
|
|
|
10.39 #
|
|
|
10.40
|
|
|
10.41
|
|
|
10.42
|
|
|
10.43 #
|
|
|
10.44
|
|
|
10.45
|
|
|
10.46
|
|
|
10.47
|
|
|
10.48
|
|
No.
|
|
Description
|
10.49
|
|
|
10.5
|
|
|
10.51
|
|
|
10.52
|
|
|
10.53
|
|
|
10.54 #
|
|
|
*10.55 #
|
|
|
*10.56
|
|
|
14.1
|
|
|
16.1
|
|
|
*21.1
|
|
|
*23.1
|
|
|
*31.1
|
|
|
*31.2
|
|
|
*32.1
|
|
|
*32.2
|
|
**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 2, 2018
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
25,537
|
|
|
$
|
20,630
|
|
Accounts receivable, net of allowances of $3,688 in 2017 and $3,245 in 2016
|
173,603
|
|
|
173,620
|
|
||
Prepaid expenses
|
5,287
|
|
|
6,126
|
|
||
Insurance recovery receivable
|
3,497
|
|
|
3,037
|
|
||
Other current assets
|
963
|
|
|
2,198
|
|
||
Total current assets
|
208,887
|
|
|
205,611
|
|
||
Property and equipment, net
|
14,086
|
|
|
12,818
|
|
||
Goodwill
|
117,589
|
|
|
79,648
|
|
||
Trade names
|
26,702
|
|
|
35,402
|
|
||
Other intangible assets, net
|
60,976
|
|
|
36,835
|
|
||
Non-current deferred tax assets
|
20,219
|
|
|
—
|
|
||
Other non-current assets
|
19,228
|
|
|
18,064
|
|
||
Total assets
|
$
|
467,687
|
|
|
$
|
388,378
|
|
|
|
|
|
||||
Liabilities and Stockholders' Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Accounts payable and accrued expenses
|
$
|
50,597
|
|
|
$
|
58,850
|
|
Accrued compensation and benefits
|
34,271
|
|
|
33,243
|
|
||
Current portion of long-term debt
|
6,875
|
|
|
2,250
|
|
||
Other current liabilities
|
2,845
|
|
|
2,749
|
|
||
Total current liabilities
|
94,588
|
|
|
97,092
|
|
||
Long-term debt, less current portion
|
92,259
|
|
|
84,750
|
|
||
Non-current deferred tax liabilities
|
105
|
|
|
13,154
|
|
||
Long-term accrued claims
|
28,757
|
|
|
28,870
|
|
||
Contingent consideration
|
5,088
|
|
|
5,301
|
|
||
Other long-term liabilities
|
9,171
|
|
|
7,409
|
|
||
Total liabilities
|
229,968
|
|
|
236,576
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
|
|
||
Common stock—$0.0001 par value; 100,000,000 shares authorized; 35,838,108 and 32,339,285 shares issued and outstanding at December 31, 2017 and 2016, respectively
|
4
|
|
|
3
|
|
||
Additional paid-in capital
|
305,362
|
|
|
256,570
|
|
||
Accumulated other comprehensive loss
|
(1,166
|
)
|
|
(1,241
|
)
|
||
Accumulated deficit
|
(67,111
|
)
|
|
(104,089
|
)
|
||
Total Cross Country Healthcare, Inc. stockholders' equity
|
237,089
|
|
|
151,243
|
|
||
Noncontrolling interest in subsidiary
|
630
|
|
|
559
|
|
||
Total stockholders' equity
|
237,719
|
|
|
151,802
|
|
||
Total liabilities and stockholders' equity
|
$
|
467,687
|
|
|
$
|
388,378
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Revenue from services
|
$
|
865,048
|
|
|
$
|
833,537
|
|
|
$
|
767,421
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Direct operating expenses
|
636,462
|
|
|
611,802
|
|
|
570,056
|
|
|||
Selling, general, and administrative expenses
|
187,435
|
|
|
179,820
|
|
|
161,275
|
|
|||
Bad debt expense
|
1,828
|
|
|
593
|
|
|
999
|
|
|||
Depreciation and amortization
|
10,174
|
|
|
9,182
|
|
|
8,066
|
|
|||
Loss on sale of business
|
—
|
|
|
—
|
|
|
2,184
|
|
|||
Acquisition-related contingent consideration
|
44
|
|
|
814
|
|
|
—
|
|
|||
Acquisition and integration costs
|
1,975
|
|
|
78
|
|
|
902
|
|
|||
Restructuring costs
|
1,026
|
|
|
753
|
|
|
1,274
|
|
|||
Impairment charges
|
14,356
|
|
|
24,311
|
|
|
2,100
|
|
|||
Total operating expenses
|
853,300
|
|
|
827,353
|
|
|
746,856
|
|
|||
Income from operations
|
11,748
|
|
|
6,184
|
|
|
20,565
|
|
|||
Other expenses (income):
|
|
|
|
|
|
||||||
Interest expense
|
4,214
|
|
|
6,106
|
|
|
6,810
|
|
|||
(Gain) loss on derivative liability
|
(1,581
|
)
|
|
(5,805
|
)
|
|
9,901
|
|
|||
Loss on early extinguishment of debt
|
4,969
|
|
|
1,568
|
|
|
—
|
|
|||
Other income, net
|
(155
|
)
|
|
(230
|
)
|
|
(306
|
)
|
|||
Income before income taxes
|
4,301
|
|
|
4,545
|
|
|
4,160
|
|
|||
Income tax benefit
|
(34,501
|
)
|
|
(4,186
|
)
|
|
(794
|
)
|
|||
Consolidated net income
|
38,802
|
|
|
8,731
|
|
|
4,954
|
|
|||
Less: Net income attributable to noncontrolling interest in subsidiary
|
1,289
|
|
|
764
|
|
|
536
|
|
|||
Net income attributable to common shareholders
|
$
|
37,513
|
|
|
$
|
7,967
|
|
|
$
|
4,418
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common shareholders - Basic
|
$
|
1.07
|
|
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common shareholders - Diluted
|
$
|
1.01
|
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
35,018
|
|
|
32,132
|
|
|
31,514
|
|
|||
Diluted
|
36,166
|
|
|
36,246
|
|
|
32,162
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
|
|
|
|
|
||||||
Consolidated net income
|
$
|
38,802
|
|
|
$
|
8,731
|
|
|
$
|
4,954
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss), before income tax:
|
|
|
|
|
|
|
|
|
|||
Unrealized foreign currency translation gain (loss)
|
75
|
|
|
(34
|
)
|
|
(89
|
)
|
|||
Other comprehensive income (loss), net of tax
|
75
|
|
|
(34
|
)
|
|
(89
|
)
|
|||
Comprehensive income
|
38,877
|
|
|
8,697
|
|
|
4,865
|
|
|||
Less: Comprehensive income attributable to noncontrolling interest in subsidiary
|
1,289
|
|
|
764
|
|
|
536
|
|
|||
Comprehensive income attributable to common shareholders
|
$
|
37,588
|
|
|
$
|
7,933
|
|
|
$
|
4,329
|
|
|
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, 2014
|
31,292
|
|
|
$
|
3
|
|
|
$
|
247,467
|
|
|
$
|
(1,118
|
)
|
|
$
|
(116,474
|
)
|
|
$
|
454
|
|
|
$
|
130,332
|
|
Exercise of share options
|
119
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock
|
191
|
|
|
—
|
|
|
(543
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(543
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
2,460
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,460
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(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 share options
|
103
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock and performance stock awards
|
284
|
|
|
—
|
|
|
(917
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(917
|
)
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
3,379
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,379
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(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
|
|
||||||
Exercise of share options
|
41
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Vesting of restricted stock and performance stock awards
|
282
|
|
|
—
|
|
|
(1,774
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,774
|
)
|
||||||
Shares issued for Convertible Notes
|
3,176
|
|
|
1
|
|
|
45,951
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
45,952
|
|
||||||
Equity compensation
|
—
|
|
|
—
|
|
|
4,080
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,080
|
|
||||||
Cumulative-effect adjustment - share-based compensation
|
—
|
|
|
—
|
|
|
535
|
|
|
—
|
|
|
(535
|
)
|
|
—
|
|
|
—
|
|
||||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
75
|
|
|
—
|
|
|
—
|
|
|
75
|
|
||||||
Distribution to noncontrolling shareholder
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,218
|
)
|
|
(1,218
|
)
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37,513
|
|
|
1,289
|
|
|
38,802
|
|
||||||
Balances at December 31, 2017
|
35,838
|
|
|
$
|
4
|
|
|
$
|
305,362
|
|
|
$
|
(1,166
|
)
|
|
$
|
(67,111
|
)
|
|
$
|
630
|
|
|
$
|
237,719
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows from operating activities
|
|
|
|
|
|
||||||
Consolidated net income
|
$
|
38,802
|
|
|
$
|
8,731
|
|
|
$
|
4,954
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|||
Depreciation and amortization
|
10,174
|
|
|
9,182
|
|
|
8,066
|
|
|||
Amortization of debt discount and debt issuance costs
|
651
|
|
|
1,728
|
|
|
1,886
|
|
|||
Provision for allowances
|
4,705
|
|
|
4,034
|
|
|
1,779
|
|
|||
Deferred income tax benefit
|
(33,812
|
)
|
|
(5,322
|
)
|
|
(1,544
|
)
|
|||
(Gain) loss on derivative liability
|
(1,581
|
)
|
|
(5,805
|
)
|
|
9,901
|
|
|||
Acquisition-related contingent consideration
|
44
|
|
|
769
|
|
|
—
|
|
|||
Impairment charges
|
14,356
|
|
|
24,311
|
|
|
2,100
|
|
|||
Loss on early extinguishment of debt
|
4,969
|
|
|
1,568
|
|
|
—
|
|
|||
Equity compensation
|
4,080
|
|
|
3,379
|
|
|
2,460
|
|
|||
Other noncash costs, including loss on sale of business
|
24
|
|
|
6
|
|
|
2,204
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
||||
Accounts receivable
|
9,708
|
|
|
(30,781
|
)
|
|
(28,708
|
)
|
|||
Prepaid expenses and other assets
|
1,816
|
|
|
(1,882
|
)
|
|
2,663
|
|
|||
Accounts payable and accrued expenses
|
(9,275
|
)
|
|
20,370
|
|
|
11,213
|
|
|||
Other liabilities
|
847
|
|
|
(143
|
)
|
|
1,261
|
|
|||
Net cash provided by operating activities
|
45,508
|
|
|
30,145
|
|
|
18,235
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from sale of business
|
—
|
|
|
500
|
|
|
7,500
|
|
|||
Acquisitions, net of cash acquired
|
(85,977
|
)
|
|
(1,900
|
)
|
|
(28,721
|
)
|
|||
Acquisition-related settlements
|
(292
|
)
|
|
(1,858
|
)
|
|
(149
|
)
|
|||
Transaction costs related to sale of business
|
—
|
|
|
—
|
|
|
(338
|
)
|
|||
Purchases of property and equipment
|
(5,111
|
)
|
|
(6,522
|
)
|
|
(2,362
|
)
|
|||
Net cash used in investing activities
|
(91,380
|
)
|
|
(9,780
|
)
|
|
(24,070
|
)
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|||
Proceeds from Term Loans
|
62,000
|
|
|
40,000
|
|
|
—
|
|
|||
Principal payments on Term Loans
|
(1,500
|
)
|
|
(30,500
|
)
|
|
—
|
|
|||
Convertible Note cash payment
|
(5,000
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings on revolving credit facility
|
39,000
|
|
|
59,800
|
|
|
64,100
|
|
|||
Repayments on revolving credit facility
|
(39,000
|
)
|
|
(67,800
|
)
|
|
(59,600
|
)
|
|||
Debt issuance costs
|
(901
|
)
|
|
(1,182
|
)
|
|
—
|
|
|||
Extinguishment fees
|
(578
|
)
|
|
(641
|
)
|
|
—
|
|
|||
Cash paid for shares withheld for taxes
|
(1,774
|
)
|
|
(917
|
)
|
|
(543
|
)
|
|||
Payment of contingent consideration
|
(261
|
)
|
|
(152
|
)
|
|
—
|
|
|||
Cash payments to noncontrolling shareholder
|
(1,217
|
)
|
|
(701
|
)
|
|
(494
|
)
|
|||
Other
|
(13
|
)
|
|
(71
|
)
|
|
(108
|
)
|
|||
Net cash provided by (used in) financing activities
|
50,756
|
|
|
(2,164
|
)
|
|
3,355
|
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash
|
23
|
|
|
(24
|
)
|
|
(62
|
)
|
|||
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
4,907
|
|
|
18,177
|
|
|
(2,542
|
)
|
|||
Cash and cash equivalents at beginning of year
|
20,630
|
|
|
2,453
|
|
|
4,995
|
|
|||
Cash and cash equivalents at end of year
|
$
|
25,537
|
|
|
$
|
20,630
|
|
|
$
|
2,453
|
|
|
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|
|||
Interest paid
|
$
|
3,408
|
|
|
$
|
3,893
|
|
|
$
|
5,052
|
|
Income taxes paid
|
$
|
697
|
|
|
$
|
1,773
|
|
|
$
|
1,035
|
|
|
Year Ended December 31,
|
|||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
(amounts in thousands)
|
|||||||||||||||||||
|
On-Going Benefit Costs
|
Exit Costs
|
|
On-Going Benefit Costs
|
Exit Costs
|
|
On-Going Benefit Costs
|
Exit Costs
|
||||||||||||
Balance at beginning of period
|
$
|
325
|
|
$
|
273
|
|
|
$
|
44
|
|
$
|
338
|
|
|
$
|
—
|
|
$
|
—
|
|
Charged to restructuring costs
|
522
|
|
504
|
|
|
563
|
|
190
|
|
|
633
|
|
641
|
|
||||||
Payments
|
(760
|
)
|
(336
|
)
|
|
(282
|
)
|
(255
|
)
|
|
(589
|
)
|
(303
|
)
|
||||||
Balance at end of period
|
$
|
87
|
|
$
|
441
|
|
|
$
|
325
|
|
$
|
273
|
|
|
$
|
44
|
|
$
|
338
|
|
|
Year Ended December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(unaudited, amounts in thousands except per share data)
|
||||||
Revenue from services
|
$
|
916,149
|
|
|
$
|
934,904
|
|
|
|
|
|
||||
Net income attributable to common shareholders
|
$
|
40,255
|
|
|
$
|
11,391
|
|
|
|
|
|
||||
Net income per common share attributable to common shareholders - basic
|
$
|
1.16
|
|
|
$
|
0.35
|
|
|
|
|
|
||||
Net income per common share attributable to common shareholders - diluted
|
$
|
1.09
|
|
|
$
|
0.25
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
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
|
$
|
42,909
|
|
|
$
|
18,702
|
|
|
$
|
24,207
|
|
|
$
|
31,609
|
|
|
$
|
16,147
|
|
|
$
|
15,462
|
|
Customer relationships
|
55,524
|
|
|
25,912
|
|
|
29,612
|
|
|
41,724
|
|
|
23,316
|
|
|
18,408
|
|
||||||
Non-compete agreements
|
3,919
|
|
|
3,600
|
|
|
319
|
|
|
3,619
|
|
|
3,527
|
|
|
92
|
|
||||||
Trade names
|
7,716
|
|
|
878
|
|
|
6,838
|
|
|
3,216
|
|
|
343
|
|
|
2,873
|
|
||||||
Other intangible assets, net
|
$
|
110,068
|
|
|
$
|
49,092
|
|
|
$
|
60,976
|
|
|
$
|
80,168
|
|
|
$
|
43,333
|
|
|
$
|
36,835
|
|
Intangible assets not subject to amortization:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Trade names
|
|
|
|
|
|
|
26,702
|
|
|
|
|
|
|
|
|
35,402
|
|
||||||
|
|
|
|
|
|
|
$
|
87,678
|
|
|
|
|
|
|
|
|
$
|
72,237
|
|
|
Nurse and
Allied Staffing
Segment
|
|
Physician
Staffing
Segment
|
|
Other Human
Capital
Management
Services
Segment
|
|
Total
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
Balances as of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
$
|
304,277
|
|
|
$
|
43,405
|
|
|
$
|
19,307
|
|
|
$
|
366,989
|
|
Sale of CCE
|
—
|
|
|
—
|
|
|
(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
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Changes to aggregate goodwill in 2017
|
|
|
|
|
|
|
|
||||||||
Goodwill acquired (a)
|
43,596
|
|
|
—
|
|
|
—
|
|
|
43,596
|
|
||||
Impairment charges
|
—
|
|
|
(5,655
|
)
|
|
—
|
|
|
(5,655
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Balances as of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Aggregate goodwill acquired
|
347,873
|
|
|
43,405
|
|
|
19,307
|
|
|
410,585
|
|
||||
Sale of CCE
|
—
|
|
|
—
|
|
|
(9,889
|
)
|
|
(9,889
|
)
|
||||
Accumulated impairment loss
|
(259,732
|
)
|
|
(23,375
|
)
|
|
—
|
|
|
(283,107
|
)
|
||||
Goodwill, net of impairment loss
|
$
|
88,141
|
|
|
$
|
20,030
|
|
|
$
|
9,418
|
|
|
$
|
117,589
|
|
(a)
|
Goodwill acquired from the acquisition of Advantage. See Note 3 - Acquisitions.
|
|
|
|
December 31,
|
||||||
|
Useful Lives
|
|
2017
|
|
2016
|
||||
|
|
|
(amounts in thousands)
|
||||||
|
|
|
|
|
|
||||
Computer equipment
|
3-5 years
|
|
$
|
6,432
|
|
|
$
|
13,584
|
|
Computer software
|
3-5 years
|
|
24,933
|
|
|
28,752
|
|
||
Office equipment
|
5-7 years
|
|
1,379
|
|
|
2,397
|
|
||
Furniture and fixtures
|
5-7 years
|
|
4,680
|
|
|
3,969
|
|
||
Leasehold improvements
|
(a)
|
|
7,340
|
|
|
7,257
|
|
||
|
|
|
44,764
|
|
|
55,959
|
|
||
Less accumulated depreciation and amortization
|
|
|
(30,678
|
)
|
|
(43,141
|
)
|
||
|
|
|
$
|
14,086
|
|
|
$
|
12,818
|
|
(a)
|
See Note 2 – Summary of Significant Accounting Policies.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(amounts in thousands)
|
||||||
Insurance recovery receivable:
|
|
|
|
||||
Insurance recovery for health
|
$
|
—
|
|
|
$
|
279
|
|
Insurance recovery for workers’ compensation
|
1,623
|
|
|
1,271
|
|
||
Insurance recovery for professional liability
|
1,874
|
|
|
1,487
|
|
||
|
$
|
3,497
|
|
|
$
|
3,037
|
|
|
|
|
|
||||
Other non-current assets:
|
|
|
|
||||
Insurance recovery for workers’ compensation claims
|
$
|
6,093
|
|
|
$
|
5,857
|
|
Insurance recovery for professional liability claims
|
10,011
|
|
|
10,353
|
|
||
Non-current security deposits
|
1,095
|
|
|
925
|
|
||
Non-current income tax receivable
|
1,044
|
|
|
—
|
|
||
Net debt issuance costs
|
985
|
|
|
929
|
|
||
|
$
|
19,228
|
|
|
$
|
18,064
|
|
|
|
|
|
||||
Accrued compensation and benefits:
|
|
|
|
||||
Salaries and payroll taxes
|
$
|
16,342
|
|
|
$
|
15,480
|
|
Bonuses
|
2,067
|
|
|
3,915
|
|
||
Accrual for workers’ compensation claims
|
5,957
|
|
|
5,266
|
|
||
Accrual for professional liability claims
|
2,683
|
|
|
2,433
|
|
||
Accrual for healthcare benefits
|
5,105
|
|
|
4,053
|
|
||
Accrual for vacation
|
2,117
|
|
|
2,096
|
|
||
|
$
|
34,271
|
|
|
$
|
33,243
|
|
|
|
|
|
||||
Long-term accrued claims:
|
|
|
|
||||
Accrual for workers’ compensation claims
|
$
|
13,160
|
|
|
$
|
12,817
|
|
Accrual for professional liability claims
|
15,597
|
|
|
16,053
|
|
||
|
$
|
28,757
|
|
|
$
|
28,870
|
|
|
|
|
|
||||
Other long-term liabilities:
|
|
|
|
||||
Deferred compensation
|
$
|
1,467
|
|
|
$
|
1,472
|
|
Deferred rent
|
6,875
|
|
|
5,011
|
|
||
Long-term unrecognized tax benefits
|
485
|
|
|
874
|
|
||
Other
|
344
|
|
|
52
|
|
||
|
$
|
9,171
|
|
|
$
|
7,409
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
||||||||
|
(amounts in thousands)
|
||||||||||||||
|
|
|
|
|
|
|
|
||||||||
Term Loan, interest of 3.61% and 2.62% at December 31, 2017 and 2016, respectively
|
$
|
100,000
|
|
|
$
|
(866
|
)
|
|
$
|
39,500
|
|
|
$
|
(363
|
)
|
Convertible Notes, fixed rate interest of 8.00%
|
—
|
|
|
—
|
|
|
25,000
|
|
|
(4,669
|
)
|
||||
Convertible Notes derivative liability
|
—
|
|
|
—
|
|
|
27,532
|
|
|
—
|
|
||||
Total debt
|
100,000
|
|
|
(866
|
)
|
|
92,032
|
|
|
(5,032
|
)
|
||||
Less current portion
|
(6,875
|
)
|
|
—
|
|
|
(2,250
|
)
|
|
—
|
|
||||
Long-term debt
|
$
|
93,125
|
|
|
$
|
(866
|
)
|
|
$
|
89,782
|
|
|
$
|
(5,032
|
)
|
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, 2017
|
|
December 31, 2016
|
||||
Financial Liabilities:
|
(amounts in thousands)
|
||||||
(Level 1)
|
|
|
|
||||
Deferred compensation
|
$
|
1,467
|
|
|
$
|
1,472
|
|
(Level 3)
|
|
|
|
|
|
||
Convertible Notes derivative liability
|
$
|
—
|
|
|
$
|
27,532
|
|
Contingent purchase price liabilities
|
$
|
5,368
|
|
|
$
|
5,603
|
|
|
Contingent Purchase
|
|
Convertible Notes
|
||||
|
Price Liabilities (a)
|
|
Derivative Liability
|
||||
|
(amounts in thousands)
|
||||||
|
|
|
|
||||
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
|
|
||
Payments/Settlements
|
(280
|
)
|
|
(25,951
|
)
|
||
Accretion expense
|
967
|
|
|
—
|
|
||
Valuation gain for the period
|
(922
|
)
|
|
(1,581
|
)
|
||
December 31, 2017
|
$
|
5,368
|
|
|
$
|
—
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||||
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
|||||||||
|
(amounts in thousands)
|
||||||||||||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
(Level 2)
|
|
|
|
|
|
|
|
|
|
|
|
||||
Term Loan, net
|
$
|
99,134
|
|
|
$
|
100,500
|
|
|
$
|
39,137
|
|
|
$
|
41,500
|
|
Convertible Notes, net
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
20,331
|
|
|
$
|
27,250
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
United States
|
$
|
3,826
|
|
|
$
|
3,309
|
|
|
$
|
3,565
|
|
Foreign
|
475
|
|
|
1,236
|
|
|
595
|
|
|||
Income before income taxes
|
$
|
4,301
|
|
|
$
|
4,545
|
|
|
$
|
4,160
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
(555
|
)
|
|
$
|
227
|
|
|
$
|
551
|
|
State
|
(273
|
)
|
|
587
|
|
|
(21
|
)
|
|||
Foreign
|
139
|
|
|
322
|
|
|
220
|
|
|||
Total
|
(689
|
)
|
|
1,136
|
|
|
750
|
|
|||
Deferred:
|
|
|
|
|
|
|
|
|
|||
Federal
|
(23,245
|
)
|
|
(4,114
|
)
|
|
(1,819
|
)
|
|||
State
|
(10,684
|
)
|
|
(866
|
)
|
|
8
|
|
|||
Foreign
|
117
|
|
|
(342
|
)
|
|
267
|
|
|||
Total
|
(33,812
|
)
|
|
(5,322
|
)
|
|
(1,544
|
)
|
|||
Total income tax benefit
|
$
|
(34,501
|
)
|
|
$
|
(4,186
|
)
|
|
$
|
(794
|
)
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
|
(amounts in thousands)
|
||||||
Deferred Tax Assets:
|
|
|
|
||||
Accrued other and prepaid expenses
|
$
|
2,955
|
|
|
$
|
3,494
|
|
Allowance for doubtful accounts
|
624
|
|
|
704
|
|
||
Intangible Assets
|
7,776
|
|
|
10,725
|
|
||
Net operating loss carryforwards
|
14,718
|
|
|
17,228
|
|
||
Derivative interest
|
—
|
|
|
7,940
|
|
||
Accrued professional liability claims
|
1,709
|
|
|
2,632
|
|
||
Accrued workers’ compensation claims
|
2,512
|
|
|
3,439
|
|
||
Share-based compensation
|
734
|
|
|
—
|
|
||
Credit carryforwards
|
189
|
|
|
1,055
|
|
||
Other
|
444
|
|
|
584
|
|
||
Gross deferred tax assets
|
31,661
|
|
|
47,801
|
|
||
Valuation allowance
|
(1,076
|
)
|
|
(46,454
|
)
|
||
|
30,585
|
|
|
1,347
|
|
||
Deferred Tax Liabilities:
|
|
|
|
||||
Depreciation
|
(41
|
)
|
|
(70
|
)
|
||
Indefinite intangibles
|
(9,964
|
)
|
|
(13,971
|
)
|
||
Tax on unrepatriated earnings
|
(466
|
)
|
|
(263
|
)
|
||
Share-based compensation
|
—
|
|
|
(197
|
)
|
||
|
(10,471
|
)
|
|
(14,501
|
)
|
||
Net deferred taxes
|
$
|
20,114
|
|
|
$
|
(13,154
|
)
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
Tax at U.S. statutory rate
|
$
|
1,506
|
|
|
$
|
1,591
|
|
|
$
|
1,456
|
|
State taxes, net of federal benefit
|
(1,374
|
)
|
|
344
|
|
|
(13
|
)
|
|||
Noncontrolling interest
|
(455
|
)
|
|
(260
|
)
|
|
—
|
|
|||
Non-deductible meals and entertainment
|
2,676
|
|
|
1,546
|
|
|
1,510
|
|
|||
Foreign tax expense
|
175
|
|
|
(5
|
)
|
|
(6
|
)
|
|||
Valuation allowances
|
(45,354
|
)
|
|
(8,379
|
)
|
|
(5,078
|
)
|
|||
Uncertain tax positions
|
1,145
|
|
|
1,090
|
|
|
917
|
|
|||
Federal rate change
|
8,011
|
|
|
—
|
|
|
—
|
|
|||
Other
|
(831
|
)
|
|
(113
|
)
|
|
420
|
|
|||
Total income tax benefit
|
$
|
(34,501
|
)
|
|
$
|
(4,186
|
)
|
|
$
|
(794
|
)
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
Balance at January 1
|
$
|
5,180
|
|
|
$
|
4,071
|
|
|
$
|
3,777
|
|
Additions based on tax positions related to the current year
|
1,145
|
|
|
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
|
(439
|
)
|
|
—
|
|
|
(624
|
)
|
|||
2017 Tax Act federal tax rate change
|
(1,859
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(220
|
)
|
|
—
|
|
|
(5
|
)
|
|||
Balance at December 31
|
$
|
3,807
|
|
|
$
|
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, 2017
|
532,294
|
|
|
$
|
9.98
|
|
|
332,092
|
|
|
$
|
11.73
|
|
Granted
|
323,503
|
|
|
$
|
13.70
|
|
|
181,067
|
|
|
$
|
14.36
|
|
Vested
|
(292,615
|
)
|
|
$
|
8.64
|
|
|
(124,568
|
)
|
|
$
|
11.86
|
|
Forfeited
|
(47,581
|
)
|
|
$
|
10.41
|
|
|
(131,016
|
)
|
|
$
|
11.78
|
|
Unvested restricted stock awards, December 31, 2017
|
515,601
|
|
|
$
|
13.03
|
|
|
257,575
|
|
|
$
|
13.49
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
Total intrinsic value of options exercised
|
$
|
516
|
|
|
$
|
1,323
|
|
|
$
|
1,610
|
|
|
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, January 1, 2017
|
188,213
|
|
|
$4.16-$22.50
|
|
$5.72
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
—
|
|
|
|
|
||
Exercised
|
(74,625
|
)
|
|
$4.35-$8.09
|
|
$5.71
|
|
|
|
|
||
Forfeited/expired
|
(19,088
|
)
|
|
$5.21-$22.50
|
|
$8.43
|
|
|
|
|
||
Share options outstanding and exercisable, December 31, 2017
|
94,500
|
|
|
$4.16-$7.44
|
|
$5.19
|
|
1.85
|
|
$
|
716
|
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands, except per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Net income attributable to common shareholders - Basic
|
$
|
37,513
|
|
|
$
|
7,967
|
|
|
$
|
4,418
|
|
Interest on Convertible Notes
|
694
|
|
|
3,383
|
|
|
*
|
|
|||
Gain on derivative liability
|
(1,581
|
)
|
|
(5,805
|
)
|
|
*
|
|
|||
Net income attributable to common shareholders - Diluted
|
$
|
36,626
|
|
|
$
|
5,545
|
|
|
$
|
4,418
|
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Weighted average common shares - Basic
|
35,018
|
|
|
32,132
|
|
|
31,514
|
|
|||
Effective of diluted shares:
|
|
|
|
|
|
||||||
Share-based awards
|
425
|
|
|
593
|
|
|
648
|
|
|||
Convertible Notes
|
723
|
|
|
3,521
|
|
|
—
|
|
|||
Weighted average common shares - Diluted
|
36,166
|
|
|
36,246
|
|
|
32,162
|
|
|||
|
|
|
|
|
|
||||||
Net income per share attributable to common shareholders - Basic
|
$
|
1.07
|
|
|
$
|
0.25
|
|
|
$
|
0.14
|
|
|
|
|
|
|
|
||||||
Net income per share attributable to common shareholders - Diluted
|
$
|
1.01
|
|
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
|
(amounts in thousands)
|
|||||||
Convertible notes and share-based awards
|
118
|
|
|
—
|
|
|
3,521
|
|
•
|
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. Substantially all of the results of the Advantage 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. Less than
2%
of the business related to the Advantage acquisition is managed by, and included in, the Physician Staffing business segment.
|
•
|
Other Human Capital Management Services -
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,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
|
(amounts in thousands)
|
||||||||||
Revenues:
|
|
|
|
|
|
||||||
Nurse and Allied Staffing
|
$
|
758,267
|
|
|
$
|
721,486
|
|
|
$
|
621,258
|
|
Physician Staffing
|
93,610
|
|
|
98,283
|
|
|
115,336
|
|
|||
Other Human Capital Management Services
|
13,171
|
|
|
13,768
|
|
|
30,827
|
|
|||
|
$
|
865,048
|
|
|
$
|
833,537
|
|
|
$
|
767,421
|
|
Contribution income:
|
|
|
|
|
|
|
|
|
|||
Nurse and Allied Staffing
|
$
|
73,614
|
|
|
$
|
71,992
|
|
|
$
|
55,718
|
|
Physician Staffing
|
5,256
|
|
|
8,265
|
|
|
10,213
|
|
|||
Other Human Capital Management Services
|
(357
|
)
|
|
(535
|
)
|
|
1,863
|
|
|||
|
78,513
|
|
|
79,722
|
|
|
67,794
|
|
|||
|
|
|
|
|
|
||||||
Unallocated corporate overhead (a)
|
39,190
|
|
|
38,400
|
|
|
32,703
|
|
|||
Depreciation and amortization
|
10,174
|
|
|
9,182
|
|
|
8,066
|
|
|||
Loss on sale of business (b)
|
—
|
|
|
—
|
|
|
2,184
|
|
|||
Acquisition and integration costs
|
1,975
|
|
|
78
|
|
|
902
|
|
|||
Acquisition-related contingent consideration
|
44
|
|
|
814
|
|
|
—
|
|
|||
Restructuring costs
|
1,026
|
|
|
753
|
|
|
1,274
|
|
|||
Impairment charges (c)
|
14,356
|
|
|
24,311
|
|
|
2,100
|
|
|||
Income from operations
|
$
|
11,748
|
|
|
$
|
6,184
|
|
|
$
|
20,565
|
|
(a)
|
The Company has been centralizing administrative functions to gain efficiencies, which have been recorded in unallocated corporate overhead.
|
(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.
|
(c)
|
During the years ended December 31, 2017, 2016, and 2015, the Company recorded non-cash impairment charges of
$14.4 million
,
$24.3 million
, and
$2.1 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Intangible Assets.
|
|
First
Quarter |
|
Second
Quarter |
|
Third
Quarter |
|
Fourth
Quarter |
||||||||
2017
|
(amounts in thousands, except per share data)
|
||||||||||||||
Revenue from services
|
$
|
207,573
|
|
|
$
|
209,313
|
|
|
$
|
228,488
|
|
|
$
|
219,674
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit (a)
|
53,275
|
|
|
56,528
|
|
|
60,480
|
|
|
58,303
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Consolidated net (loss) income
|
(1,718
|
)
|
|
5,220
|
|
|
7,044
|
|
|
28,256
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net (loss) income attributable to common shareholders
|
(2,010
|
)
|
|
4,850
|
|
|
6,723
|
|
|
27,950
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per share attributable to common shareholders - Basic
|
$
|
(0.06
|
)
|
|
$
|
0.14
|
|
|
$
|
0.19
|
|
|
$
|
0.78
|
|
|
|
|
|
|
|
|
|
||||||||
Net (loss) income per share attributable to common shareholders - Diluted
|
$
|
(0.08
|
)
|
|
$
|
0.13
|
|
|
$
|
0.19
|
|
|
$
|
0.77
|
|
|
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 (a)
|
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
|
)
|
•
|
The Company recorded changes in the fair value of Convertible Notes derivative liability, recording a gain in the first quarter of 2017 of
$1.6 million
, 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. See Note 9 - Convertible Notes Derivative Liability.
|
•
|
During the fourth quarter of 2017 and the second quarter of 2016, the Company recorded non-cash impairment charges of
$14.4 million
and
$24.3 million
, respectively. See Note 5 - Goodwill, Trade Names, and Other Intangible Assets.
|
•
|
During the first quarter of 2017, the Company settled its Convertible Notes and recognized a loss on extinguishment of debt of
$5.0 million
. 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 July 1, 2017, the Company acquired all of the assets of Advantage. The acquisition has been accounted for in accordance with the
Business Combinations
Topic of the FASB ASC
,
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 2017 and 2016, the Company recorded acquisition-related contingent consideration expense primarily related to the Mediscan and USR acquisitions, recording expense of
$0.3 million
in the first and second quarters of 2017, a credit of
$0.6 million
in the third quarter of 2017, and expense of
$0.1 million
in the fourth quarter of 2017, and
|
•
|
In the third and fourth quarters of 2017, the Company recorded restructuring costs of
$0.7 million
and
$0.3 million
, respectively, primarily related to a cost saving initiative, and in the third and fourth quarters of 2016,
$0.6 million
and
$0.2 million
, respectively, primarily related to the centralization of corporate functions. See Note 2 - Summary of Significant Accounting Policies.
|
•
|
In the fourth quarter of 2017, the Company benefited from a
$43.3 million
reversal of valuation allowance on its net deferred tax assets, offset by additional income tax expense of
$8.0 million
related to the remeasurement of its deferred tax assets as a result of the 2017 Tax Act. See Note 13 - Income Taxes.
|
|
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, 2017
|
$
|
3,245
|
|
|
$
|
4,705
|
|
|
$
|
(4,804
|
)
|
|
$
|
542
|
|
|
$
|
—
|
|
|
$
|
3,688
|
|
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
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Valuation Allowance for Deferred Tax Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Year Ended December 31, 2017
|
$
|
46,454
|
|
|
$
|
(3,007
|
)
|
|
$
|
(43,333
|
)
|
(a)
|
$
|
—
|
|
|
$
|
962
|
|
(c)
|
$
|
1,076
|
|
Year Ended December 31, 2016
|
$
|
55,336
|
|
|
$
|
(8,894
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
46,454
|
|
Year Ended December 31, 2015
|
$
|
63,616
|
|
|
$
|
(7,518
|
)
|
(b)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(762
|
)
|
(c)
|
$
|
55,336
|
|
(a)
|
Release of valuation allowances on the Company’s deferred tax assets.
|
(b)
|
Includes a reversal of valuation allowance related to CCE.
|
(c)
|
Valuation allowance on deferred tax asset related to share-based compensation.
|
XX
|
(a) This is a newly-established Plan, and the Effective Date of the Plan is
January 1, 2018
.
|
__
|
(b) This is an amendment of a plan named _____________________ dated _____________ and governing all contributions to the plan through _________________. The Effective Date of this amended Plan is ___________.
|
__
|
(b) The later of age ___ or the _______ anniversary of the participation commencement date. The participation commencement date is the first
|
2.23
|
Participating Employer(s):
As of the Effective Date, the following Participating Employer(s) are parties to the Plan:
|
Name of Employer
|
|
EIN
|
Cross Country Healthcare, Inc.
|
|
13-4066229
|
2.26
|
Plan:
The name of the Plan is
|
__
|
(b) Completed __ Years of Service from First Date of Service.
|
__
|
(c) Attained age __ and completed __ Years of Service from First Date of Service.
|
XX
|
(d) Not applicable – distribution elections for Separation from Service are not based on Seniority Date.
|
minimum deferral:
|
0
|
%
|
maximum deferral:
|
50
|
%
|
minimum deferral:
|
0
|
%
|
maximum deferral:
|
100
|
%
|
minimum deferral:
|
0
|
%
|
maximum deferral:
|
100
|
%
|
minimum deferral:
|
0
|
%
|
maximum deferral:
|
100
|
%
|
minimum deferral:
|
|
%
|
maximum deferral:
|
|
%
|
minimum deferral:
|
0
|
%
|
maximum deferral:
|
100
|
%
|
XX
|
(a)
Employer Discretionary Credits
: The Employer may make discretionary credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows:
|
XX
|
(i) An amount determined each Plan Year by the Employer.
|
__
|
(b)
Other Employer Credits
: The Employer may make other credits to the Deferred Compensation Account of each Active Participant in an amount determined as follows:
|
__
|
(i) An amount determined each Plan Year by the Employer.
|
5.6
|
Unforeseeable Emergency Event:
|
XX
|
(a) Participants may apply to have accounts distributed upon an Unforeseeable Emergency event.
|
__
|
(b) An Unforeseeable Emergency shall
not
be a Qualifying Distribution Event.
|
Less than
|
1
|
|
%
|
|
1
|
|
%
|
|
2
|
|
%
|
|
3
|
|
%
|
|
4
|
|
%
|
|
5
|
|
%
|
|
6
|
|
%
|
|
7
|
|
%
|
|
8
|
|
%
|
|
9
|
|
%
|
|
10 or more
|
|
%
|
XX
|
(v) Other:
TBD Vesting- Vesting schedule to be determined by the Company at the time of the contribution subject to approval by Principal.
|
Less than
|
1
|
|
%
|
|
1
|
|
%
|
|
2
|
|
%
|
|
3
|
|
%
|
|
4
|
|
%
|
|
5
|
|
%
|
|
6
|
|
%
|
|
7
|
|
%
|
|
8
|
|
%
|
|
9
|
|
%
|
|
10 or more
|
|
%
|
XX
|
(i) A lump sum.
|
XX
|
(ii) Annual installments over a term certain as elected by the Participant not to exceed
10
years.
|
__
|
(i) A lump sum.
|
XX
|
(ii) Not Applicable.
|
__
|
(i) A lump sum.
|
__
|
(ii) Annual installments over a term certain as elected by the Participant not to exceed ___ years.
|
XX
|
(i) A lump sum.
|
XX
|
(i) A lump sum.
|
__
|
(ii) Annual installments over a term certain as elected by the Participant not to exceed ___ years.
|
XX
|
(i) A lump sum.
|
__
|
(ii) Annual installments over a term certain as elected by the Participant not to exceed ___ years.
|
XX
|
(i) A lump sum.
|
7.4
|
De Minimis Amounts.
|
__
|
(a) Notwithstanding any payment election made by the Participant, the vested balance in all Deferred Compensation Account(s) of the Participant will be distributed in a single lump sum payment at the time designated under the Plan if at the time of a permitted Qualifying Distribution Event that is either a Separation from Service, death, Disability (if applicable) or Change in Control Event (if applicable) the vested balance does not exceed $ ___________. In addition, the Employer may distribute a Participant's vested balance in all Deferred Compensation Account(s) of the Participant at any time if the balance does not exceed the limit in Section 402(g)(1)(B) of the Code and results in the termination of the Participant's entire interest in the Plan.
|
XX
|
(b) There shall be no pre-determined de minimis amount under the Plan.
|
__
|
(b) Employer or Participating Employer who employed the Participant when amounts were deferred.
|
1.
|
Under Section 4.1 of the Adoption Agreement, the maximum deferral of 100% of the Service Bonus, Performance-Based Compensation, and Commissions will be subject to payroll accommodations to the extent necessary to pay all applicable taxes owed.
|
2.
|
For the purpose of this Plan, all uses of the term “Independent Contractor” throughout the Plan document, including but not limited to the definition of Independent Contractor in Section 2.18, will refer instead to a “Non-Employee Director,” defined as a director of the Employer who is not an Employee.
|
3.
|
For purposes of this Plan, the following definition of Change in Control Event will be used instead of the definition in Section 2.5 of the Plan document:
|
4.
|
For purposes of this Plan, in Section 10.2 of the Plan document the reference to Revenue Procedure 92-65 will be disregarded, and any subsequent related guidance to Revenue Procedure 92-64 will be applied instead.
|
SUNTRUST BANK
|
|
CROSS COUNTRY HEALTHCARE,
|
|
|
INC.
|
|
|
|
1.
|
Interpretation
|
2.
|
Obligations
|
(c)
|
Netting of Payments.
If on any date amounts would otherwise be payable:―
|
(i)
|
in the same currency; and
|
(ii)
|
in respect of the same Transaction,
|
(d)
|
Deduction or Withholding for Tax.
|
(ii)
|
Liability.
If:―
|
(2)
|
X does not so deduct or withhold; and
|
(3)
|
a liability resulting from such Tax is assessed directly against X,
|
3.
|
Representations
|
4.
|
Agreements
|
(ii)
|
any other documents specified in the Schedule or any Confirmation; and
|
5.
|
Events of Default and Termination Events
|
(ii)
|
Breach of Agreement; Repudiation of Agreement.
|
(iii)
|
Credit Support Default.
|
(c)
|
Hierarchy of Events.
|
6.
|
Early Termination; Close-Out Netting
|
(b)
|
Right to Terminate Following Termination Event.
|
(iv)
|
Right to Terminate.
|
(c)
|
Effect of Designation.
|
(d)
|
Calculations; Payment Date.
|
(ii)
|
Termination Events.
If the Early Termination Date results from a Termination Event:―
|
7.
|
Transfer
|
8.
|
Contractual Currency
|
9.
|
Miscellaneous
|
(e)
|
Counterparts and Confirmations.
|
(h)
|
Interest and Compensation.
|
(A)
|
below), at the Default Rate.
|
(3)
|
Interest on Deferred Payments.
If:―
|
(4)
|
Compensation for Deferred Deliveries.
If:―
|
(B)
|
a delivery is deferred pursuant to Section 5(d); or
|
10.
|
Offices; Multibranch Parties
|
11.
|
Expenses
|
12.
|
Notices
|
(ii)
|
if sent by telex, on the date the recipient’s answerback is received;
|
(v)
|
if sent by electronic messaging system, on the date it is received; or
|
(vi)
|
if sent by e-mail, on the date it is delivered,
|
13.
|
Governing Law and Jurisdiction
|
14.
|
Definitions
|
(a)
|
in respect of the determination of an Unpaid Amount:―
|
(b)
|
in respect of an Early Termination Amount:―
|
(3)
|
in all other cases, the Applicable Deferral Rate; and
|
(4)
|
in all other cases, the Termination Rate.
|
SUNTRUST BANK
|
CROSS COUNTRY HEALTHCARE, INC.
|
SUNTRUST BANK
(“Party A”)
|
and
|
CROSS COUNTRY HEALTHCARE, INC.
(“Party B”)
|
(a)
|
“
Specified Entity
”
means in relation to Party A for the purposes of:
|
(i)
|
by the addition of the following at the end thereof:
|
(i)
|
if the indebtedness under the Loan Agreement is (for whatever reason, in whatever manner) (x) fully repaid before the scheduled maturity date, or (y) repaid in part (other than in accordance with any scheduled amortization or mandatory prepayment), provided that, in such case, the Affected Transaction(s) shall only be that portion of any Transaction(s) having a notional amount equivalent to the principal amount of the indebtedness so repaid (for added clarity, with respect to any payment of principal under the Loan Agreement that is a scheduled payment or a mandatory prepayment, no close-out damages will be applicable, and as to any such scheduled payment or mandatory prepayment when made, the affected Transaction will have the notional amount automatically reduced by an amount such that the proportion of the loan hedged in the Transaction on the initial date thereof will remain unchanged);
|
(ii)
|
if Party A no longer has any commitments to lend or outstanding loans under the Loan Agreement based on assignment or transfer thereof to one or more unaffiliated third parties; provided that Party A shall not be a Defaulting Lender under the terms of the Loan Agreement;
|
(iii)
|
if at any time Party A, in its capacity as a party to this Agreement and any Transaction hereunder, is not entitled to the same rights, privileges, and interest in any collateral and/or guaranty agreements
|
(iv)
|
Party A is a Defaulting Lender under the Loan Agreement.
|
(a)
|
Payer Representations.
For the purpose of Section 3(e) of this Agreement, Party A and Party B each make the following representation:
|
(i)
|
the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement;
|
(ii)
|
the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement; and
|
(iii)
|
the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.
|
(b)
|
Payee Representations.
For
the
purpose of Section 3(f) of this Agreement:
|
(a)
|
Tax forms, documents or certificates to be delivered are:
|
(b)
|
Other documents to be delivered are:
|
(a)
|
Addresses for Notices
.
For the purpose of Section 12(a) of this Agreement:
|
(b)
|
Process Agent
.
|
(c)
|
Offices
.
The provisions of Section 10(a) of this Agreement will apply to this Agreement.
|
(d)
|
Multibranch Party
. For purposes of Section 10(b) of this Agreement:
|
(e)
|
Calculation Agent
.
The Calculation Agent is Party A, unless otherwise specified in a Confirmation in relation to the relevant Transaction, or unless in respect of any Transaction an Event of Default has occurred and is continuing with respect to Party A, in which case Party B may appoint a Leading Dealer, mutually agreed to and such approval not to be unreasonably withheld (provided, however that Party A’s acceptance will be deemed given if Party A fails to respond within five (5) Local Business Days to a written request from Party B to appoint a Leading Dealer), to act as substitute Calculation Agent for so long as such Event of Default is continuing. A “Leading Dealer” means a leading dealer in the relevant market that is not an Affiliate of either of the parties.
|
(f)
|
Credit Support Document
.
|
(g)
|
Credit Support Provider
.
|
(h)
|
Governing Law
.
This Agreement will be governed by and construed in accordance with the laws of the State of New York without reference to choice of law doctrine, but giving effect to Sections 5-1401 and 5-1402 of the New York General Obligations Law.
|
(i)
|
Netting of Payments
.
“Multiple Transaction Payment Netting” will not apply for the purpose of Section 2(c) of this Agreement. Both parties may agree at least one Local Business Day in advance of one or more Scheduled Settlement Dates that, with regard to payments due on such date(s), Multiple Transaction Payment Netting will apply. Unless otherwise so agreed, Multiple Transaction Payment Netting will not apply for purposes of Section 2(c) of this Agreement.
|
(m)
|
Additional Representation
will apply. For the purpose of Section 3 of this Agreement, each of the following will constitute an Additional Representation:
|
(i)
|
Relationship Between the Parties
.
Each party will be deemed to represent to the other party on the date on which it enters into a Transaction (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):
|
(a)
|
2002 Master Agreement Protocol.
The parties agree that the definitions and provisions of the ISDA 2002 Master Agreement Protocol as published by the International Swaps and Derivatives Association, Inc. on July 15, 2003 (the “
Protocol
”) are incorporated into and apply to this Agreement as if set out in full herein, for the purpose of indicating agreement by the parties to the amendments set out in Annexes 1 to 18 of the Protocol. References in the Protocol to a 2002 Master shall be deemed to be references to this Agreement.
|
(b)
|
Escrow Payments.
If by reason of the time difference between the cities in which payments are to be made, it is not possible for simultaneous payments to be made on any date on which both parties are required to make payments hereunder, either party may at its option and in its sole discretion notify the other party that payments on that date are to be made in escrow. In this case the deposit of the payment due earlier on that date shall be made by 2:00 p.m. (local time at the place for the earlier payment) on that date with an escrow agent selected by the party giving the notice, accompanied by irrevocable payment instructions (i) to release the deposited payment to the intended recipient upon receipt by the escrow agent of the required deposit of the corresponding payment from the other party on the same date accompanied by the irrevocable payment instructions to the same effect or (ii) if the required deposit of the corresponding payment is not made on the same date, to return the payment deposited to the party that paid it into escrow. The party that elects to have payments made in escrow shall pay the costs of the escrow arrangements and shall cause those arrangements to provide that the intended recipient of the payment due to be deposited first shall be entitled to interest on that deposited payment for each day in the period of its deposit at the rate offered by the escrow agent for that day for overnight deposits in the relevant currency in the office where it holds that deposited payment (at 11:00 a.m. local time on that day) if that payment is not released by 5:00 p.m. on the date it is deposited for any reason other than the intended recipients’ failure to make the escrow deposit it is required to make hereunder in a timely fashion.
|
(c)
|
Set Off
. Section 6 (f) of the Agreement is amended by deleting the first paragraph thereof and replacing it with the following:
|
(d)
|
Change of Account.
Section 2(b) of this Agreement is hereby amended by the addition of the following after the word “delivery” in the first line thereof: “to another account in the same legal and tax jurisdiction as the original account.”
|
(e)
|
Waiver of Jury Trial
. Each party hereby irrevocably waives any and all right to trial by jury in any suit, action or proceeding arising out of or relating to this Agreement or any Transaction and acknowledges that this waiver is a material inducement to the other party’s entering into this Agreement.
|
(f)
|
Execution in Counterparts
. This Agreement may be executed in any number of counterparts, each of which shall be an original with the same effect as if the signatures thereto and hereto were upon the same instrument. Delivery of an executed counterpart by facsimile or by email delivery of a “.pdf” or “.tiff” data file shall be valid and binding on the parties with the same effect as if original signatures had been exchanged.
|
(g)
|
Amendment and Restatement
. The Master Agreement (including the Schedule) between SunTrust Bank and Cross Country Healthcare, Inc. dated as of September 29, 2008 (the “Prior Agreement”) is hereby amended and restated in its entirety in the form of this Agreement (including this Schedule). Any transaction (however described or defined) existing under the Prior Agreement shall be, and shall be deemed to be, a Transaction governed by this Agreement, and any confirmation (however described or defined) under the Prior Agreement for any such transaction shall be a Confirmation under this Agreement, but otherwise, any Transaction under the Prior Agreement extant at the time of entry into this Agreement (including this Schedule) shall continue in full force and effect.
|
(h)
|
[RESERVED]
|
(i)
|
Accuracy of Specified Information
. Section 3(d) of this Agreement is hereby amended by adding the following after the word “respect” and before the full stop:
|
(j)
|
Transfer.
Section 7 is hereby amended by inserting the following phrase "which consent shall not be unreasonably withheld or delayed" in the third line thereof after the word "party" and before the word "except".
|
SUNTRUST BANK
By
: /s/ Edgar Joya
Name: Edgar Joya
Title: Vice President
|
CROSS COUNTRY HEALTHCARE, INC.
By
: /s/ Christopher R. Pizzi
Name: Christopher R. Pizzi
Title: Chief Financial Officer
|
Subsidiary
|
|
Place of Incorporation
|
Advantage On Call, LLC
|
|
Delaware
|
Advantage RN, LLC
|
|
Delaware
|
Advantage RN Local Staffing, LLC
|
|
Delaware
|
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.
|
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 2, 2018
|
/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;
|
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 2, 2018
|
/s/ Christopher R. Pizzi
|
|
|
Christopher R. Pizzi
SVP & Chief Financial Officer
(Principal Accounting and Financial Officer)
|
Date:
|
March 2, 2018
|
/s/ William J. Grubbs
|
|
|
William J. Grubbs
President, Chief Executive Officer, Director
(Principal Executive Officer)
|
Date:
|
March 2, 2018
|
/s/ Christopher R. Pizzi
|
|
|
Christopher R. Pizzi
SVP & Chief Financial Officer
(Principal Accounting and Financial Officer)
|