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AMN revenue up 14% in Q2, nurse and allied segment leads growth

August 03, 2018

Second-quarter revenue rose 13.9% at AMN Healthcare Services Inc. (NYSE: AMN), the largest healthcare staffing firm in the US. On an organic basis, growth was 7%.

The San Diego, Calif.-based firm’s nurse and allied solutions segment led the growth, with revenue up by 10.6% year over year; excluding $25 million of labor disruption revenue, the segment’s revenue rose 2% year over year.

Locum tenens revenue edged down 0.8% in the second quarter.

(US$ thousands) Q2 2018 Q2 2017 % change
Revenue $558,108 $489,803 13.9%
Gross profit $180,956 $161,012 12.4%
Gross margin percentage 32.4% 32.9%  
Net income $35,529 $31,255 13.7%

The company’s “other workforce solutions” segment —  which includes its physician permanent placement, interim leadership and executive search, vendor management system, recruitment process outsourcing, education, medical coding and workforce optimization business lines — jumped on the acquisition of three firms in April: MedPartners, Phillips DiPisa and Leaders for Today. The 2% organic growth in the segment was driven by the mid-revenue cycle and interim leadership businesses.

Quote

“Solid performance in several of our businesses is being offset by a decline in locum tenens, where we continue to see below-market performance due to the disruption from business model and technology changes made earlier this year,” CEO Susan Salka said. “Our recent acquisitions are integrating with the AMN family and are off to a good start. The primary macro drivers of our industry appear favorable for the foreseeable future, and we remain confident in the long-term growth of AMN."

Revenue by segment

(US$ thousands) Q2 2018 Q2 2017 % change
Nurse and allied solutions $332,728 $300,727 10.6%
Locum tenens solutions $107,297 $108,215 -0.8%
Other workforce solutions $118,083 $80,861 46.0%

AMN also this week announced the appointment of Daphne Jones as a new independent director, bringing the size of the board to nine members from eight . Jones has more than 30 years of experience in general management and executive-level roles at IBM, Johnson & Johnson, Hospira (now Pfizer) and GE Healthcare. Prior to her retirement from GE in 2017, Jones’ roles included senior executive for Future of Work; CIO for product engineering, imaging, and ultrasound; and CIO for global services — all comprising a $13 billion segment within GE Healthcare.

Guidance

AMN forecast third-quarter revenue to be between $522 million and $530 million, an increase of approximately 6% to 7% year over year. On an organic basis, revenue is projected to fall approximately 1% due primarily to disruption in the locum tenens business and a mix shift away from premium-rate assignments in travel nursing.

Share price and market cap

Shares in AMN fell 7.74% to $52.72 in trading today as of 12:39 p.m. Eastern time. The company had a market cap of $2.52 billion.

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