On November 6, 2024, Cross Country Healthcare Inc (CCRN, Financial) released its 8-K filing detailing the financial results for the third quarter ended September 30, 2024. Cross Country Healthcare Inc, a provider of total talent management services for healthcare customers, operates primarily in the United States through its Nurse and Allied Staffing and Physician Staffing segments.
Performance Overview
Cross Country Healthcare Inc reported a revenue of $315.1 million for Q3 2024, surpassing the analyst estimate of $310.22 million. However, the company's diluted earnings per share (EPS) of $0.08 fell short of the estimated $0.10. The revenue represented a 29% decrease year-over-year and a 7% decline sequentially. The gross profit margin was 20.4%, down 160 basis points from the previous year.
Financial Achievements and Challenges
Despite the revenue beat, Cross Country Healthcare Inc faced significant challenges, including an 80% drop in net income attributable to common stockholders, which stood at $2.6 million compared to $12.8 million in the prior year. The adjusted EBITDA was $10.3 million, a 62% decrease year-over-year. The company highlighted the stabilization of its core business and growth in its Homecare, Physician, and Education Staffing segments. However, margins remain under pressure due to market conditions.
“Our third quarter results reflect the continued stabilization across our core business as well as the ongoing momentum in our Homecare, Physician, and Education Staffing businesses. Though margins remain under pressure, I am encouraged to see demand for our services continue to rise amidst bill rate stability,” said John A. Martins, President and Chief Executive Officer of Cross Country Healthcare.
Segment Performance
The Nurse and Allied Staffing segment generated $264.9 million in revenue, a 33% decline year-over-year. The Physician Staffing segment, however, saw a 10% increase in revenue to $50.3 million. The company noted a sequential increase in contribution income for the Nurse and Allied Staffing segment due to a $19.4 million credit loss expense recognized in the previous quarter.
Cash Flow and Balance Sheet
Cross Country Healthcare Inc reported $7.5 million in cash flows from operations for Q3 2024, a significant decrease from $70.3 million in the same period last year. The company maintained a strong balance sheet with $64 million in cash and no debt as of September 30, 2024. During the quarter, the company repurchased over 800,000 shares of common stock for $11.9 million.
Analysis and Outlook
Cross Country Healthcare Inc's performance in Q3 2024 highlights the challenges faced by the healthcare staffing industry amidst fluctuating demand and pricing pressures. The company's ability to maintain revenue growth in its Physician Staffing segment and its strong cash position are positive indicators. However, the decline in net income and adjusted EBITDA underscores the need for strategic adjustments to improve profitability.
Looking ahead, Cross Country Healthcare Inc has provided guidance for Q4 2024, with expected revenue between $300 million and $310 million and adjusted EPS ranging from $0.10 to $0.14. The company remains focused on leveraging its strong balance sheet to make strategic investments aimed at long-term profitability.
Explore the complete 8-K earnings release (here) from Cross Country Healthcare Inc for further details.
