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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Cross Country Health | NASDAQ:CCRN | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 14.60 | 5.88 | 16.00 | 0 | 09:09:38 |
Cross Country Healthcare, Inc. (the "Company") (Nasdaq: CCRN) today announced financial results for its second quarter ended June 30, 2023.
SELECTED FINANCIAL INFORMATION:
Variance
Variance
Q2 2023 vs
Q2 2023 vs
Dollars are in thousands, except per share amounts
Q2 2023
Q2 2022
Q1 2023
Revenue
$
540,695
(28
)
%
(13
)
%
Gross profit margin*
22.8
%
20
bps
40
bps
Net income attributable to common stockholders
$
21,345
(60
)
%
(27
)
%
Diluted EPS
$
0.60
$
(0.80
)
$
(0.21
)
Adjusted EBITDA*
$
44,440
(47
)
%
(15
)
%
Adjusted EBITDA margin*
8.2
%
(290
)
bps
(20
)
bps
Adjusted EPS*
$
0.69
$
(0.71
)
$
(0.15
)
Cash flows provided by operations
$
119,248
557
%
154
%
* Refer to accompanying tables and discussion of non-GAAP (Generally Accepted Accounting Principles) financial measures below.
Second Quarter Business Highlights
“We are pleased that second quarter results met or exceeded our guidance ranges, reflecting strong execution in an environment where health systems remain focused on managing contingent labor spend,” said John A. Martins, President and Chief Executive Officer of Cross Country Healthcare. He continued, “Since the launch of Intellify, our proprietary vendor management system, we have successfully converted nearly half of our Managed Service Programs, saving us millions of dollars annually. Beyond the efficiencies this brings to Cross Country, we are excited about the opportunity that our technology offers clients to optimize their workforce, and to further improve our profitability as we continue to penetrate the vendor neutral space.”
Second quarter consolidated revenue was $540.7 million, a decrease of 28% year-over-year and 13% sequentially. Consolidated gross profit margin was 22.8%, up 20 basis points year-over-year and 40 basis points sequentially. Net income attributable to common stockholders was $21.3 million compared to $52.9 million in the prior year and $29.4 million in the prior quarter. Diluted earnings per share (EPS) was $0.60 compared to $1.40 in the prior year and $0.81 in the prior quarter. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $44.4 million or 8.2% of revenue, as compared with $83.5 million or 11.1% of revenue in the prior year, and $52.1 million or 8.4% of revenue in the prior quarter. Adjusted EPS was $0.69 compared to $1.40 in the prior year and $0.84 in the prior quarter.
For the six months ended June 30, 2023, consolidated revenue was $1.2 billion, a decrease of 25% year-over-year. Consolidated gross profit margin was 22.6%, up 20 basis points year-over-year. Net income attributable to common stockholders was $50.8 million, or $1.41 per diluted share, compared to $114.9 million, or $3.03 per diluted share, in the prior year. Adjusted EBITDA was $96.6 million or 8.3% of revenue, as compared with $180.9 million or 11.7% of revenue in the prior year. Adjusted EPS was $1.53 compared to $3.10 in the prior year.
Quarterly Business Segment Highlights
Nurse and Allied Staffing
Revenue was $495.4 million, a decrease of 32% year-over-year and 15% sequentially. Contribution income was $56.5 million, a decrease from $97.6 million year-over-year and $67.2 million sequentially. Average field contract personnel on a full-time equivalent (FTE) basis were 11,385 as compared with 13,494 in the prior year and 12,518 in the prior quarter. Revenue per FTE per day was $474 compared to $591 in the prior year and $513 in the prior quarter. As expected, travel bill rates continued to normalize throughout the quarter and the number of professionals on assignment declined as clients continue to right-size their needs.
Physician Staffing
Revenue was $45.3 million, an increase of 105% year-over-year and 12% sequentially. Contribution income was $3.5 million, an increase from $1.2 million year-over-year and $1.7 million sequentially. Total days filled were 23,826 as compared with 12,416 in the prior year and 22,097 in the prior quarter. Revenue per day filled was $1,902 as compared with $1,781 in the prior year and $1,829 in the prior quarter. The year-over-year increase in revenue was driven by an increase in volume in several specialties. The year-over-year increase in contribution income was driven by higher revenue.
Cash Flow and Balance Sheet Highlights
Net cash provided by operating activities for the quarter was $119.2 million, due to continued profitability as well as a seven day sequential improvement in days' sales outstanding. For the six months ended June 30, 2023, net cash provided by operating activities was $166.1 million as compared to $10.9 million used in operating activities in the prior year.
During the second quarter, the Company repurchased and retired a total of 0.2 million shares of the Company's common stock for an aggregate price of $4.7 million, at an average market price of $23.78 per share. During the second quarter of 2023, the Company's Board of Directors authorized the replenishment of the amount remaining for share repurchases back to $100 million, effective for trades after May 3, 2023. As of June 30, 2023, the Company had 35.3 million unrestricted shares outstanding and $98.4 million remaining for share repurchases.
On June 30, 2023, the Company repaid outstanding obligations of $73.9 million under the term loan, and terminated the debt agreement. At June 30, 2023, the Company had $0.7 million in cash and cash equivalents, with $31.0 million of borrowings drawn under its revolving senior secured asset-based credit facility (ABL), and $18.2 million of letters of credit outstanding. As of June 30, 2023, borrowing base availability under the ABL was $289.2 million, with $240.0 million of excess availability.
Outlook for Third Quarter 2023
The guidance below applies to management’s expectations for the third quarter of 2023.
Q3 2023 Range
Year-over-Year
Sequential
Change
Change
Revenue
$440 million - $450 million
(31)% - (29)%
(19)% - (17)%
Adjusted EBITDA*
$27.0 million - $32.0 million
(58)% - (50)%
(39)% - (28)%
Adjusted EPS*
$0.35 - $0.45
$(0.72) - $(0.62)
$(0.34) - $(0.24)
* Refer to discussion of non-GAAP financial measures below.
The above estimates are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future significant share repurchases. The Company has updated its 2023 annual minimum guidance to at least $2.05 billion in revenue and a full year Adjusted EBITDA margin of approximately 8%.
See accompanying non-GAAP financial measures and tables below.
INVITATION TO CONFERENCE CALL
The Company will hold its quarterly conference call on Wednesday, August 2, 2023, at 5:00 P.M. Eastern Time to discuss its second quarter 2023 financial results. This call will be webcast live and can be accessed at the Company’s website at ir.crosscountry.com or by dialing 888-566-1290 from anywhere in the U.S. or by dialing 773-799-3776 from non-U.S. locations - Passcode: Cross Country. A replay of the webcast will be available from August 2nd through August 16th on the Company’s website and a replay of the conference call will be available by telephone by calling 800-819-5743 from anywhere in the U.S. or 203-369-3828 from non-U.S. locations - Passcode: 1402.
ABOUT CROSS COUNTRY HEALTHCARE
Cross Country Healthcare, Inc. is a market-leading, tech-enabled workforce solutions and advisory firm with 37 years of industry experience and insight. We help clients tackle complex labor-related challenges and achieve high-quality outcomes, while reducing complexity and improving visibility through data-driven insights. Diversity, equality, and inclusion is at the heart of the organization’s overall corporate social responsibility program, and closely aligned with our core values to create a better future for its people, communities, and its stockholders.
Copies of this and other press releases, as well as additional information about the Company, can be accessed online at ir.crosscountry.com. Stockholders and prospective investors can also register to automatically receive the Company’s press releases, filings with the Securities and Exchange Commission (SEC), and other notices by e-mail.
NON-GAAP FINANCIAL MEASURES
This press release and the accompanying financial statement tables reference non-GAAP financial measures, such as gross profit margin, adjusted EBITDA, and adjusted EPS. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in accordance with United States generally accepted accounting principles (GAAP). Such non-GAAP financial measures are provided for consistency and comparability to prior year results; furthermore, management believes they are useful to investors when evaluating the Company's performance as they exclude certain items that management believes are not indicative of the Company's future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned. Such non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. The financial statement tables that accompany this press release include a reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure and a more detailed discussion of each financial measure; as such, the financial statement tables should be read in conjunction with the presentation of these non-GAAP financial measures.
In addition, forward-looking adjusted EBITDA and adjusted EPS for fiscal 2023 exclude potential charges or gains that may be recorded during the fiscal year, including among other things, the potential impact of any future divestitures, mergers, acquisitions, or other business combinations, changes in debt structure, or future significant share repurchases. We have not attempted to provide reconciliations of such forward-looking non-GAAP earnings guidance to the comparable GAAP measure, as permitted by Item 10(e)(1)(i)(B) of Regulation S-K, because the impact and timing of these potential charges or gains is inherently uncertain and difficult to predict and is unavailable without unreasonable efforts. In addition, the Company believes such reconciliations would imply a degree of precision and certainty that could be confusing to investors. Such items could have a substantial impact on GAAP measures of our financial performance.
FORWARD-LOOKING STATEMENTS
In addition to historical information, this press release contains statements relating to our future results (including certain projections and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, and are subject to the "safe harbor" created by those sections. Forward-looking statements consist of statements that are predictive in nature and/or depend upon or refer to future events. Words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", "suggests", "appears", "seeks", "will", "could", and variations of such words and similar expressions are intended to identify forward-looking statements. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: the overall macroeconomic environment, including increased inflation and interest rates, demand for the healthcare services we provide, both nationally and in the regions in which we operate, our ability to attract and retain qualified nurses, physicians and other healthcare personnel, costs and availability of short-term housing for our travel healthcare professionals, the functioning of our information systems, the effect of cyber security risks and cyber incidents on our business, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our customers’ ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors, including, without limitation, the risk factors set forth in Item 1A. "Risk Factors" in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022, as filed and updated in our Quarterly Reports on Form 10-Q and other filings with the SEC. You should consult any further disclosures the Company makes on related subjects in its filings with the SEC.
Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management’s opinions only as of the date of this press release. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors’ likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct, or (iv) our strategy, which is based in part on this analysis, will be successful. Except as may be required by law, the Company undertakes no obligation to update or revise forward-looking statements. All references to "the Company", "we", "us", "our", or "Cross Country" in this press release mean Cross Country Healthcare, Inc. and its consolidated subsidiaries.
Cross Country Healthcare, Inc.
Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
March 31,
June 30,
June 30,
2023
2022
2023
2023
2022
Revenue from services
$
540,695
$
753,561
$
622,707
$
1,163,402
$
1,542,293
Operating expenses:
Direct operating expenses
417,556
583,156
483,284
900,840
1,197,094
Selling, general and administrative expenses
78,938
86,009
84,260
163,198
162,862
Bad debt expense
3,134
3,192
4,908
8,042
5,561
Depreciation and amortization
4,432
3,481
4,904
9,336
6,200
Restructuring costs (benefits)
913
(1,114
)
429
1,342
(634
)
Legal settlement charges
—
—
1,125
1,125
—
Impairment charges
533
—
—
533
1,741
Total operating expenses
505,506
674,724
578,910
1,084,416
1,372,824
Income from operations
35,189
78,837
43,797
78,986
169,469
Other expenses (income):
Interest expense
3,149
3,857
3,690
6,839
7,378
Loss on early extinguishment of debt
1,723
1,912
—
1,723
1,912
Other expense (income), net
11
(1,084
)
(12
)
(1
)
(1,092
)
Income before income taxes
30,306
74,152
40,119
70,425
161,271
Income tax expense
8,961
21,258
10,683
19,644
46,394
Net income attributable to common stockholders
$
21,345
$
52,894
$
29,436
$
50,781
$
114,877
Net income per share attributable to common stockholders - Basic
$
0.60
$
1.41
$
0.82
$
1.43
$
3.08
Net income per share attributable to common stockholders - Diluted
$
0.60
$
1.40
$
0.81
$
1.41
$
3.03
Weighted average common shares outstanding:
Basic
35,351
37,471
35,864
35,606
37,251
Diluted
35,524
37,757
36,560
36,041
37,866
Cross Country Healthcare, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited, amounts in thousands, except per share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
March 31,
June 30,
June 30,
2023
2022
2023
2023
2022
Adjusted EBITDA:a
Net income attributable to common stockholders
$
21,345
$
52,894
$
29,436
$
50,781
$
114,877
Interest expense
3,149
3,857
3,690
6,839
7,378
Income tax expenseb
8,961
21,258
10,683
19,644
46,394
Depreciation and amortization
4,432
3,481
4,904
9,336
6,200
Acquisition and integration-related costs (benefits)
64
—
(18
)
46
40
Restructuring costs (benefits)c
913
(1,114
)
429
1,342
(634
)
Legal settlements and feesd
—
—
1,125
1,125
—
Impairment chargese
533
—
—
533
1,741
Loss on disposal of fixed assets
—
6
—
—
25
Loss on early extinguishment of debtf
1,723
1,912
—
1,723
1,912
(Gain) loss on lease terminationg
—
(1,064
)
8
8
(1,085
)
Other expense (income), net
11
(26
)
(20
)
(9
)
(32
)
Equity compensation
2,205
2,114
1,775
3,980
3,715
System conversion costsh
1,104
172
129
1,233
367
Adjusted EBITDAa
$
44,440
$
83,490
$
52,141
$
96,581
$
180,898
Adjusted EBITDA margina
8.2
%
11.1
%
8.4
%
8.3
%
11.7
%
Adjusted EPS:i
Numerator:
Net income attributable to common stockholders
$
21,345
$
52,894
$
29,436
$
50,781
$
114,877
Non-GAAP adjustments - pretax:
Acquisition and integration-related costs (benefits)
64
—
(18
)
46
40
Restructuring costs (benefits)c
913
(1,114
)
429
1,342
(634
)
Legal settlements and feesd
—
—
1,125
1,125
—
Impairment chargese
533
—
—
533
1,741
Loss on early extinguishment of debtf
1,723
1,912
—
1,723
1,912
System conversion costsh
1,104
172
129
1,233
367
Tax impact of non-GAAP adjustments
(1,132
)
(1,061
)
(427
)
(1,559
)
(878
)
Adjusted net income attributable to common stockholders - non-GAAP
$
24,550
$
52,803
$
30,674
$
55,224
$
117,425
Denominator:
Weighted average common shares - basic, GAAP
35,351
37,471
35,864
35,606
37,251
Dilutive impact of share-based payments
173
286
696
435
615
Adjusted weighted average common shares - diluted, non-GAAP
35,524
37,757
36,560
36,041
37,866
Reconciliation:
Diluted EPS, GAAP
$
0.60
$
1.40
$
0.81
$
1.41
$
3.03
Non-GAAP adjustments - pretax:
Restructuring costs (benefits)c
0.03
(0.03
)
0.01
0.04
(0.02
)
Legal settlements and feesd
—
—
0.03
0.03
—
Impairment chargese
0.01
—
—
0.01
0.05
Loss on early extinguishment of debtf
0.05
0.05
—
0.05
0.05
System conversion costsh
0.03
—
—
0.03
0.01
Tax impact of non-GAAP adjustments
(0.03
)
(0.02
)
(0.01
)
(0.04
)
(0.02
)
Adjusted EPS, non-GAAPi
$
0.69
$
1.40
$
0.84
$
1.53
$
3.10
Cross Country Healthcare, Inc.
Consolidated Balance Sheets
(Unaudited, amounts in thousands)
June 30,
December 31,
2023
2022
Assets
Current assets:
Cash and cash equivalents
$
673
$
3,604
Accounts receivable, net
484,885
641,611
Income taxes receivable
4,128
10,915
Prepaid expenses
6,753
11,067
Insurance recovery receivable
7,828
7,434
Other current assets
1,367
1,042
Total current assets
505,634
675,673
Property and equipment, net
24,844
19,662
Operating lease right-of-use assets
2,306
3,254
Goodwill
137,020
163,268
Other intangible assets, net
60,171
44,723
Non-current deferred tax assets
7,618
7,092
Non-current insurance recovery receivable
21,946
23,058
Other non-current assets
11,591
11,109
Total assets
$
771,130
$
947,839
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses
$
139,555
$
185,507
Accrued compensation and benefits
56,021
72,605
Operating lease liabilities - current
3,292
4,132
Current portion of earnout liability
15,800
7,500
Other current liabilities
1,359
1,896
Total current liabilities
216,027
271,640
Non-current debt
31,000
148,735
Operating lease liabilities - non-current
3,150
4,880
Non-current accrued claims
32,235
35,881
Non-current earnout liability
5,200
18,000
Uncertain tax positions - non-current
9,194
7,646
Other non-current liabilities
3,976
3,838
Total liabilities
300,782
490,620
Commitments and contingencies
Stockholders' equity:
Common stock
4
4
Additional paid-in capital
255,216
292,876
Accumulated other comprehensive loss
(1,379
)
(1,387
)
Retained earnings
216,507
165,726
Total stockholders' equity
470,348
457,219
Total liabilities and stockholders' equity
$
771,130
$
947,839
Cross Country Healthcare, Inc.
Segment Dataj
(Unaudited, amounts in thousands)
Three Months Ended
Year-over-Year
Sequential
June 30,
% of
June 30,
% of
March 31,
% of
% change
% change
2023
Total
2022
Total
2023
Total
Fav (Unfav)
Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing
$
495,376
92
%
$
731,443
97
%
$
582,302
94
%
(32
)%
(15
)%
Physician Staffing
45,319
8
%
22,118
3
%
40,405
6
%
105
%
12
%
$
540,695
100
%
$
753,561
100
%
$
622,707
100
%
(28
)%
(13
)%
Contribution income:k
Nurse and Allied Staffing
$
56,481
$
97,567
$
67,169
(42
)%
(16
)%
Physician Staffing
3,541
1,220
1,724
190
%
105
%
60,022
98,787
68,893
(39
)%
(13
)%
Corporate overheadl
18,891
17,583
18,656
(7
)%
(1
)%
Depreciation and amortization
4,432
3,481
4,904
(27
)%
10
%
Restructuring costs (benefits)c
913
(1,114
)
429
(182
)%
(113
)%
Legal settlement chargesd
—
—
1,125
—
%
100
%
Impairment chargese
533
—
—
(100
)%
(100
)%
Other costs (benefits)
64
—
(18
)
(100
)%
(456
)%
Income from operations
$
35,189
$
78,837
$
43,797
(55
)%
(20
)%
Six Months Ended
Year-over-Year
June 30,
% of
June 30,
% of
% change
2023
Total
2022
Total
Fav (Unfav)
Revenue from services:
Nurse and Allied Staffing
$
1,077,678
93
%
$
1,497,023
97
%
(28
)%
Physician Staffing
85,724
7
%
45,270
3
%
89
%
$
1,163,402
100
%
$
1,542,293
100
%
(25
)%
Contribution income:k
Nurse and Allied Staffing
$
123,650
$
207,668
(40
)%
Physician Staffing
5,265
2,985
76
%
128,915
210,653
(39
)%
Corporate overheadl
37,547
33,837
(11
)%
Depreciation and amortization
9,336
6,200
(51
)%
Restructuring costs (benefits)c
1,342
(634
)
(312
)%
Legal settlement chargesd
1,125
—
(100
)%
Impairment chargese
533
1,741
69
%
Other costs
46
40
(15
)%
Income from operations
$
78,986
$
169,469
(53
)%
Other costs (benefits) include acquisition and integration-related costs (benefits).
Cross Country Healthcare, Inc.
Summary Condensed Consolidated Statements of Cash Flows
(Unaudited, amounts in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
March 31,
June 30,
June 30,
2023
2022
2023
2023
2022
Net cash provided by (used in) operating activities
$
119,248
$
18,141
$
46,865
$
166,113
$
(10,897
)
Net cash used in investing activities
(3,996
)
(1,752
)
(3,496
)
(7,492
)
(3,848
)
Net cash (used in) provided by financing activities
(114,871
)
(17,321
)
(46,681
)
(161,552
)
13,987
Effect of exchange rate changes on cash
1
3
(1
)
—
1
Change in cash and cash equivalents
382
(929
)
(3,313
)
(2,931
)
(757
)
Cash and cash equivalents at beginning of period
291
1,208
3,604
3,604
1,036
Cash and cash equivalents at end of period
$
673
$
279
$
291
$
673
$
279
Cross Country Healthcare, Inc.
Other Financial Data
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
June 30,
March 31,
June 30,
June 30,
2023
2022
2023
2023
2022
Revenue from services
$
540,695
$
753,561
$
622,707
$
1,163,402
$
1,542,293
Less: Direct operating expenses
417,556
583,156
483,284
900,840
1,197,094
Gross profit
$
123,139
$
170,405
$
139,423
$
262,562
$
345,199
Consolidated gross profit marginm
22.8
%
22.6
%
22.4
%
22.6
%
22.4
%
Nurse and Allied Staffing statistical data:
FTEsn
11,385
13,494
12,518
11,952
13,474
Average Nurse and Allied Staffing revenue per FTE per dayo
$
474
$
591
$
513
$
494
$
609
Physician Staffing statistical data:
Days filledp
23,826
12,416
22,097
45,923
25,484
Revenue per day filledq
$
1,902
$
1,781
$
1,829
$
1,867
$
1,776
(a)
Adjusted EBITDA, a non-GAAP financial measure, is defined as net income (loss) attributable to common stockholders before interest expense, income tax expense (benefit), depreciation and amortization, acquisition and integration-related (benefits) costs, restructuring (benefits) costs, legal settlements and fees, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on disposal of fixed assets, gain or loss on lease termination, gain or loss on sale of business, other expense (income), net, equity compensation, and system conversion costs. Adjusted EBITDA is not and should not be considered a measure of financial performance under GAAP. Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to net income attributable to common stockholders as an indicator of operating performance. Management uses Adjusted EBITDA for planning purposes and as one performance measure in its incentive programs for certain members of its management team. Adjusted EBITDA, as defined, closely matches the operating measure as defined by the Company's credit facilities. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by the Company's consolidated revenue.
(b)
Income taxes for the three months ended March 31, 2023 and June 30, 2023 reflected a decrease in book income.
(c)
Restructuring costs were primarily comprised of employee termination costs, lease-related exit costs, and reorganization costs as part of planned cost savings initiatives. Amounts for the three and six months ended June 30, 2022 include a benefit associated with the early termination of one of the Company's corporate offices which was previously restructured.
(d)
Legal settlements and fees included legal settlement charges as presented on the consolidated statements of operations, as well as legal fees pertaining to non-operational legal matters outside the normal course of operations, which are included in selling, general and administrative expenses. For the three months ended March 31, 2023 and six months ended June 30, 2023, the Company incurred $1.1 million, including legal fees, to settle a wage and hour class action lawsuit.
(e)
Impairment charges of $0.5 million for the three and six months ended June 30, 2023 related to the write-off of an abandoned IT project. Impairment charges for the six months ended June 30, 2022 were comprised of $1.7 million related to right-of-use assets and related property in connection with vacated leases.
(f)
Loss on early extinguishment of debt for the three and six months ended June 30, 2023 consisted of the write-off of debt issuance costs related to the payoff and termination of the term loan on June 30, 3023. Loss on early extinguishment of debt for the three and six months ended June 30, 2022 consisted of a prepayment premium and the write-off of debt issuance costs related to an optional prepayment on the term loan in the second quarter of 2022.
(g)
The gain on lease termination for the three and six months ended June 30, 2022 was primarily a result of the early termination of the lease for one of the Company's corporate offices, recognized in the second quarter of 2022.
(h)
System conversion costs include ERP system costs related to the upgrading and integrating of our middle and back-office platforms, with certain development costs capitalized and amortized in accordance with the Company's policies, and applicant tracking system costs related to the Company's project to replace its legacy system supporting its travel nurse staffing business.
(i)
Adjusted EPS, a non-GAAP financial measure, is defined as net income (loss) attributable to common stockholders per diluted share before the diluted EPS impact of acquisition and integration-related (benefits) costs, restructuring (benefits) costs, legal settlements and fees, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on sale of business, system conversion costs, and nonrecurring income tax adjustments. Adjusted EPS is not and should not be considered a measure of financial performance under GAAP. Management presents Adjusted EPS because it believes that Adjusted EPS is a useful supplement to its reported EPS as an indicator of operating performance. Management believes it provides a more useful comparison of the Company's underlying business performance from period to period and is more representative of the future earnings capacity of the Company. Quarterly non-GAAP adjustment may vary due to rounding.
(j)
Segment data is provided in accordance with the Segment Reporting Topic of the Financial Accounting Standards Board Accounting Standards Codification.
(k)
Contribution income is defined as income (loss) from operations before depreciation and amortization, acquisition and integration-related (benefits) costs, restructuring (benefits) costs, legal settlement charges, impairment charges, and corporate overhead. Contribution income is a financial measure used by management when assessing segment performance.
(l)
Corporate overhead includes unallocated executive leadership and other centralized corporate functional support costs such as finance, IT, legal, human resources, and marketing, as well as public company expenses and corporate-wide projects (initiatives).
(m)
Gross profit is defined as revenue from services less direct operating expenses. The Company's gross profit excludes allocated depreciation and amortization expense. Gross profit margin is calculated by dividing gross profit by revenue from services.
(n)
FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.
(o)
Average revenue per FTE per day is calculated by dividing Nurse and Allied Staffing revenue, excluding permanent placement, per FTE by the number of days worked in the respective periods.
(p)
Days filled is calculated by dividing the total hours invoiced during the period, including an estimate for the impact of accrued revenue, by 8 hours.
(q)
Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented.
View source version on businesswire.com: https://www.businesswire.com/news/home/20230801362759/en/
Cross Country Healthcare, Inc. William J. Burns, Executive Vice President & Chief Financial Officer 561-237-2555 wburns@crosscountry.com
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