AMN HEALTHCARE SERVICES INC - 10-Q Quarterly Report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the period ended March 31, 2004

Commission File No.: 001-16753

AMN HEALTHCARE SERVICES, INC.

(Exact Name of Registrant as Specified in Its Charter)


Delaware		06-1500476
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

12400 High Bluff Drive, Suite 100 San Diego, California		92130
(Address of principal executive offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (866) 871-8519

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 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 ¨

Indicate by a check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes x No ¨

As of May 10, 2004, there were 28,120,340 shares of common stock, $0.01 par value, outstanding.

AMN HEALTHCARE SERVICES, INC.

TABLE OF CONTENTS


Item		Page
PART I—FINANCIAL INFORMATION

1.	Condensed Consolidated Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets, As of March 31, 2004 and December 31, 2003	1

	Condensed Consolidated Statements of Operations, For the Three Months Ended March 31, 2004 and 2003	2

	Condensed Consolidated Statement of Stockholders’ Equity and Comprehensive Income, For the Three Months Ended March 31, 2004	3

	Condensed Consolidated Statements of Cash Flows, For the Three Months Ended March 31, 2004 and 2003	4

	Notes to Condensed Consolidated Financial Statements	5

2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	8

3.	Quantitative and Qualitative Disclosures About Market Risk	14

4.	Controls and Procedures	14

PART II—OTHER INFORMATION

6.	Exhibits and Reports on Form 8-K	15

	Signatures	16

	Certifications

PART I—FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited and in thousands, except par value)


	March 31, 2004			December 31, 2003
ASSETS
Current assets:
Cash and cash equivalents	$	6,764		$	4,687
Accounts receivable, net		121,968			117,392
Prepaid expenses		15,882			14,027
Other current assets		1,566			1,835

Total current assets		146,180			137,941
Fixed assets, net		18,541			18,414
Deferred income taxes, net		5,384			6,071
Deposits		1,700			1,635
Goodwill, net		135,532			135,532
Other intangibles, net		4,603			4,939

Total assets	$	311,940		$	304,532

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	11,055		$	12,954
Accrued compensation and benefits		36,302			32,117
Income taxes payable		3,769			2,103
Current portion of notes payable		13,000			13,400
Other current liabilities		399			385

Total current liabilities		64,525			60,959
Notes payable, less current portion		124,000			125,500
Other long-term liabilities		2,964			1,976

Total liabilities		191,489			188,435

Stockholders’ equity:
Common stock, $0.01 par value; 200,000 shares authorized; 42,997 shares issued at each March 31, 2004 and December 31, 2003		430			430
Additional paid-in capital		349,813			349,595
Treasury stock, at cost (14,877 shares at each March 31, 2004 and December 31, 2003)		(249,539	)		(249,428	)
Retained earnings		20,368			15,809
Accumulated other comprehensive loss, net		(621	)		(309	)

Total stockholders’ equity		120,451			116,097

Commitments and contingencies
Total liabilities and stockholders’ equity	$	311,940		$	304,532

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except per share amounts)


	Three Months Ended March 31,
	2004		2003
Revenue	$	161,265	$	199,765
Cost of revenue		125,436		155,014

Gross profit		35,829		44,751

Expenses:
Selling, general and administrative, excluding non-cash stock-based compensation		24,598		22,837
Non-cash stock-based compensation		218		218
Amortization		89		95
Depreciation		1,376		1,020

Total expenses		26,281		24,170

Income from operations		9,548		20,581
Interest expense, net		2,134		83

Income before income taxes		7,414		20,498
Income tax expense		2,855		8,099

Net income	$	4,559	$	12,399

Basis and diluted net income per common share:
Basic net income per common share	$	0.16	$	0.31

Diluted net income per common share	$	0.15	$	0.29

Weighted average common shares outstanding:
Basic		28,120		39,834

Diluted		31,294		42,999

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME

(Unaudited and in thousands)


	Three Months Ended March 31, 2004
	Common Stock			Additional Paid-in		Treasury			Retained		Accumulated Other Comprehensive
	Shares	Amount		Capital		Stock			Earnings		Loss			Total
Balance, December 31, 2003	42,997	$	430	$	349,595	$	(249,428	)	$	15,809	$	(309	)	$	116,097
Cost of repurchase of common stock into treasury	—		—		—		(111	)		—		—			(111	)
Stock-based compensation	—		—		218		—			—		—			218
Comprehensive income (loss):
Foreign currency translation adjustment	—		—		—		—			—		(7	)		(7	)
Unrealized loss for derivative financial instruments, net of tax	—		—		—		—			—		(305	)		(305	)
Net income	—		—		—		—			4,559		—			4,559

Total comprehensive income															4,247

Balance, March 31, 2004	42,997	$	430	$	349,813	$	(249,539	)	$	20,368	$	(621	)	$	120,451

See accompanying notes to unaudited condensed consolidated financial statements.

AMN HEALTHCARE SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited and in thousands)


	Three Months Ended March 31,
	2004			2003
Cash flows from operating activities:
Net income	$	4,559		$	12,399
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		1,465			1,115
(Recovery of) provision for bad debts		(250	)		29
Noncash interest expense		247			109
Provision for deferred income taxes		1,024			750
Non-cash stock-based compensation		218			218
Loss on disposal or sale of fixed assets		7			—
Changes in assets and liabilities:
Accounts receivable		(4,326	)		3,743
Prepaid expenses and other current assets		(1,586	)		(3,617	)
Deposits		(65	)		(85	)
Accounts payable and accrued expenses		(1,899	)		(544	)
Accrued compensation and benefits		4,185			2,680
Income taxes payable		1,666			4,865
Other liabilities		438			9

Net cash provided by operating activities		5,683			21,671


Cash flows from investing activities:
Purchase of fixed assets		(1,510	)		(3,260	)

Net cash used in investing activities		(1,510	)		(3,260	)

Cash flows from financing activities:
Capital lease repayments		(83	)		(69	)
Payment of financing costs		—			(955	)
Payments on notes payable		(1,900	)		—
Cost of repurchase of common stock into treasury		(111	)		(31,035	)
Change in bank overdraft		—			2,206

Net cash used in financing activities		(2,094	)		(29,853	)
Effect of exchange rate changes on cash		(2	)		(60	)

Net increase (decrease) in cash and cash equivalents		2,077			(11,502	)
Cash and cash equivalents at beginning of period		4,687			40,135

Cash and cash equivalents at end of period	$	6,764		$	28,633