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United States
Securities And Exchange Commission
Washington, DC 20549
_______________
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FORM 10-Q
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[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Quarterly Period Ended March 31, 2003
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Or
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[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period From _________________ to _________________
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Commission file number 0-33169
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![[q10310qcrosscountry001.jpg]](q10310qcrosscountry001.jpg)
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CROSS COUNTRY HEALTHCARE, INC.
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(Exact name of registrant as specified in its charter)
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Delaware
| 13-4066229
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(State or other jurisdiction of
Incorporation or organization)
| (I.R.S. Employer
Identification Number)
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6551 Park of Commerce Blvd, N.W.
Boca Raton, Florida
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33487
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(Address of principal executive offices)
| (Zip Code)
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(561) 998-2232
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(Registrant's telephone number, including area code)
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Former name: Cross Country, Inc.
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(Former name, former address and former fiscal year, if changed since last report)
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_______________
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
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The Registrant had outstanding 32,275,382 shares of Common Stock, par value $.0001 per share, as of April 30, 2003.
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Index
CROSS COUNTRY HEALTHCARE, INC.
INDEX
FORM 10-Q
MARCH 31, 2003
2
Index
PART I. FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Cross Country Healthcare, Inc.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
| | March 31,
2003
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| December 31,
2002
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
|
| | (Unaudited)
| |
Current assets:
| | |
Cash and cash equivalents
| $ 14,221
| $ 17,210
|
Accounts receivable, net
| 96,498
| 97,641
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Assets from discontinued operations, net
| 10
| 248
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Other current assets
| 11,160
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 12,979
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total current assets
| 121,889
| 128,078
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Property and equipment, net
| 11,900
| 12,394
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Goodwill, net
| 229,310
| 226,116
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Trademarks, net
| 15,749
| 15,749
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Other identifiable intangible assets, net
| 6,449
| 7,113
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Other assets
| 1,114
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 1,150
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total assets
| $ 386,411
————————
| $ 390,600
————————
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Current liabilities:
| | |
Accounts payable and accrued expenses
| $ 2,195
| $ 3,297
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Accrued employee compensation and benefits
| 31,242
| 29,663
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Current portion of debt and note payable
| 9,532
| 14,362
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Income taxes payable
| 2,235
| —
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Liabilities from discontinued operations, net
| 25
| 186
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Other current liabilities
| 3,650
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 2,422
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total current liabilities
| 48,879
| 49,930
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Interest rate swap
| —
| 606
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Deferred income taxes
| 11,014
| 10,779
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Long-term debt
| 17,963
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 28,453
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total liabilities
| 77,856
| 89,768
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Commitments and contingencies
| | |
Stockholders' equity:
| | |
Common stock
| 3
| 3
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Additional paid-in capital
| 258,790
| 258,489
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Other stockholders' equity
| 49,762
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 42,340
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total stockholders' equity
| 308,555
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 300,832
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total liabilities and stockholders' equity
| $ 386,411
————————
| $ 390,600
————————
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See accompanying notes to the condensed consolidated financial statements
3
Index
Cross Country Healthcare, Inc.
Condensed Consolidated Statements of Operations
(Unaudited, amounts in thousands, except per share data)
| | | Three Months Ended
March 31,
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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| | 2003
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 2002
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Revenue from services
| $ 161,003
| $ 158,166
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Operating expenses:
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Direct operating expenses
| 121,481
| 120,155
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Selling, general and administrative expenses
| 25,013
| 22,072
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Bad debt expense
| —
| 285
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Depreciation
| 1,068
| 731
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Amortization
| 747
| 770
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Non-recurring secondary offering costs
| —
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 1,008
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Total operating expenses
| 148,309
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 145,021
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Income from operations
| 12,694
| 13,145
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Other expenses:
| | |
Interest expense, net
| 586
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 1,147
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Income from continuing operations before income taxes
| 12,108
| 11,998
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Income tax expense
| 4,686
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 4,785
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Income from continuing operations
| 7,422
| 7,213
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Discontinued operations
| (371)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| (216)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net income
| $ 7,051
———————
| $ 6,997
———————
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Net income/(loss) per common share - basic:
| | |
Income from continuing operations
| $ 0.23
| $ 0.23
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Discontinued operations
| (0.01)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| (0.01)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net income
| $ 0.22
———————
| $ 0.22
———————
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Net income/(loss) per common share - diluted:
| | |
Income from continuing operations
| $ 0.23
| $ 0.21
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Discontinued operations
| (0.01)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| (0.00)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net income
| $ 0.22
———————
| $ 0.21
———————
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| | | |
Weighted average common shares outstanding-basic
| 32,247
| 32,231
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Weighted average common shares outstanding-diluted
| 32,607
| 33,995
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See accompanying notes to the condensed consolidated financial statements
4
Index
Cross Country Healthcare, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited, amounts in thousands)
| | | Three Months Ended
March 31,
¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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| | 2003
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 2002
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Operating activities
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Net income
| $ 7,051
| $ 6,997
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Adjustments to reconcile net income to net cash provided by operating activities:
| | |
Amortization
| 747
| 770
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Depreciation
| 1,068
| 731
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Bad debt expense
| —
| 285
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Loss from discontinued operations
| 371
| 216
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Changes in operating assets and liabilities:
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Accounts receivable
| 1,143
| (4,547)
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Prepaid rent, deposits, and other current assets
| 1,819
| 1,927
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Accounts payable and accrued expenses
| 478
| 4,156
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Other current liabilities
| 3,490
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| 4,368
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net cash provided by continuing operations
| 16,167
| 14,903
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Loss from discontinued operations, net
| (371)
| (216)
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Change in net assets from discontinued operations
| 77
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| (62)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net cash used in discontinued operations
| (294)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| (278)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net cash provided by operating activities
| 15,873
| 14,625
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Investing activities
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Acquisitions and earnout payments
| (3,195)
| (11,000)
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Purchases of property and equipment
| (573)
| (1,688)
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Other investing activities
| (47)
| (3)
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Investing activities of discontinued operations
| —
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
| (884)
¯¯¯¯¯¯¯¯¯¯¯¯¯¯
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Net cash used in investing activities
| (3,815)
| (13,575)
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Financing activities
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Repayment of debt
| (15,320)
| (26,899)
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Proceeds from issuance of debt
| —
| 23,750
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Other financing activities
| 273
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