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 |
Or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the period ended June 30, 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 August 4, 2004 there were 28,284,962 shares of common stock, $0.01 par value, outstanding.
AMN HEALTHCARE SERVICES, INC.
| Item |
Page | |||
| PART I—FINANCIAL INFORMATION | ||||
| 1. |
Condensed Consolidated Financial Statements (unaudited): |
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| 1 | ||||
| 2 | ||||
| Condensed Consolidated Statement of Stockholders’ Equity and Comprehensive Income (Loss), |
3 | |||
| 4 | ||||
| 5 | ||||
| 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
9 | ||
| 3. |
18 | |||
| 4. |
18 | |||
| PART II—OTHER INFORMATION | ||||
| 4. |
19 | |||
| 6. |
20 | |||
| 21 | ||||
| 22 | ||||
Item 1. Condensed Consolidated Financial Statements
AMN HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except par value)
| June 30, 2004 |
December 31, 2003 |
|||||||
| ASSETS | ||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 13,831 | $ | 4,687 | ||||
| Accounts receivable, net |
111,024 | 117,392 | ||||||
| Prepaid expenses |
12,342 | 14,027 | ||||||
| Other current assets |
1,659 | 1,835 | ||||||
| Total current assets |
138,856 | 137,941 | ||||||
| Fixed assets, net |
18,125 | 18,414 | ||||||
| Deferred income taxes, net |
4,102 | 6,071 | ||||||
| Deposits and other assets |
2,418 | 1,635 | ||||||
| Goodwill, net |
135,532 | 135,532 | ||||||
| Other intangibles, net |
4,271 | 4,939 | ||||||
| Total assets |
$ | 303,304 | $ | 304,532 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: |
||||||||
| Accounts payable and accrued expenses |
$ | 10,752 | $ | 12,954 | ||||
| Accrued compensation and benefits |
33,629 | 32,117 | ||||||
| Income taxes payable |
151 | 2,103 | ||||||
| Current portion of notes payable |
6,000 | 13,400 | ||||||
| Other current liabilities |
373 | 385 | ||||||
| Total current liabilities |
50,905 | 60,959 | ||||||
| Notes payable, less current portion |
122,500 | 125,500 | ||||||
| Other long-term liabilities |
2,520 | 1,976 | ||||||
| Total liabilities |
175,925 | 188,435 | ||||||
| Stockholders’ equity: |
||||||||
| Common stock, $0.01 par value; 200,000 shares authorized; 43,162 and 42,997 shares issued at June 30, 2004 and December 31, 2003, respectively |
432 | 430 | ||||||
| Additional paid-in capital |
351,535 | 349,595 | ||||||
| Treasury stock, at cost (14,877 shares at each June 30, 2004 and December 31, 2003) |
(249,538 | ) | (249,428 | ) | ||||
| Retained earnings |
24,691 | 15,809 | ||||||
| Accumulated other comprehensive income (loss), net |
259 | (309 | ) | |||||
| Total stockholders’ equity |
127,379 | 116,097 | ||||||
| Commitments and contingencies |
||||||||
| Total liabilities and stockholders’ equity |
$ | 303,304 | $ | 304,532 | ||||
See accompanying notes to unaudited condensed consolidated financial statements.
1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except per share amounts)
| Three Months Ended June 30, |
Six Months Ended June 30, | |||||||||||
| 2004 |
2003 |
2004 |
2003 | |||||||||
| Revenue |
$ | 153,368 | $ | 183,364 | $ | 314,633 | $ | 383,129 | ||||
| Cost of revenue |
118,386 | 141,373 | 243,822 | 296,387 | ||||||||
| Gross profit |
34,982 | 41,991 | 70,811 | 86,742 | ||||||||
| Expenses: |
||||||||||||
| Selling, general and administrative, excluding non-cash stock-based compensation |
24,023 | 22,012 | 48,621 | 44,849 | ||||||||
| Non-cash stock-based compensation |
219 | 219 | 437 | 437 | ||||||||
| Amortization |
89 | 96 | 178 | 191 | ||||||||
| Depreciation |
1,447 | 1,054 | 2,823 | 2,074 | ||||||||
| Total expenses |
25,778 | 23,381 | 52,059 | 47,551 | ||||||||
| Income from operations |
9,204 | 18,610 | 18,752 | 39,191 | ||||||||
| Interest expense, net |
2,118 | 114 | 4,252 | 197 | ||||||||
| Income before income taxes |
7,086 | 18,496 | 14,500 | 38,994 | ||||||||
| Income tax expense |
2,763 | 7,306 | 5,618 | 15,405 | ||||||||
| Net income |
$ | 4,323 | $ | 11,190 | $ | 8,882 | $ | 23,589 | ||||
| Basic and diluted net income per common share: |
||||||||||||
| Basic |
$ | 0.15 | $ | 0.29 | $ | 0.32 | $ | 0.60 | ||||
| Diluted |
$ | 0.14 | $ | 0.27 | $ | 0.28 | $ | 0.56 | ||||
| Weighted average common shares outstanding: |
||||||||||||
| Basic |
28,203 | 38,287 | 28,162 | 39,056 | ||||||||
| Diluted |
31,332 | 41,767 | 31,313 | 42,379 | ||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
2
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
AND COMPREHENSIVE INCOME (LOSS)
(Unaudited and in thousands)
| Six Months Ended June 30, 2004 |
|||||||||||||||||||||||
| Common Stock |
Additional Paid-in Capital |
Treasury Stock |
Retained Earnings |
Accumulated Other Comprehensive Income (Loss) |
Total |
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| Shares |
Amount |
||||||||||||||||||||||
| Balance, December 31, 2003 |
42,997 | $ | 430 | $ | 349,595 | $ | (249,428 | ) | $ | 15,809 | $ | (309 | ) | $ | 116,097 | ||||||||
| Cost of repurchase of common stock into treasury |
— | — | — | (110 | ) | — | — | (110 | ) | ||||||||||||||
| Exercise of stock options |
165 | 2 | 1,503 | — | — | — | 1,505 | ||||||||||||||||
| Stock-based compensation |
— | — | 437 | — | — | — | 437 | ||||||||||||||||
| Comprehensive income (loss): |
|||||||||||||||||||||||
| Foreign currency translation adjustment |
— | — | — | — | — | (37 | ) | (37 | ) | ||||||||||||||
| Unrealized gain on derivative financial instruments, net of tax |
— | — | — | — | — | 605 | 605 | ||||||||||||||||
| Net income |
— | — | — | — | 8,882 | — | 8,882 | ||||||||||||||||
| Total comprehensive income |
9,450 | ||||||||||||||||||||||
| Balance, June 30, 2004 |
43,162 | $ | 432 | $ | 351,535 | $ | (249,538 | ) | $ | 24,691 | $ | 259 | $ | 127,379 | |||||||||
See accompanying notes to unaudited condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
| Six Months Ended June 30, |
||||||||
| 2004 |
2003 |
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| Cash flows from operating activities: |
||||||||
| Net income |
$ | 8,882 | $ | 23,589 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization |
3,001 | 2,265 | ||||||
| (Recovery of) provision for bad debts |
(549 | ) | 23 | |||||
| Noncash interest expense |
490 | 218 | ||||||
| Provision for deferred income taxes |
1,728 | 2,350 | ||||||
| Non-cash stock-based compensation |
437 | 437 | ||||||
| Loss on disposal or sale of fixed assets |
7 | 65 | ||||||
| Changes in assets and liabilities: |
||||||||
| Accounts receivable |
6,917 | 21,093 | ||||||
| Prepaid expenses and other current assets |
1,874 | (2,387 | ) | |||||
| Deposits and other assets |
(120 | ) | (162 | ) | ||||
| Accounts payable and accrued expenses |
(2,202 | ) | (1,362 | ) | ||||
| Accrued compensation and benefits |
1,512 | (727 | ) | |||||
| Income taxes payable |
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