AMN Healthcare Services CEO Discusses Q4 2010 Results - Earnings Call Transcript

AMN Healthcare Services, Inc. (AHS)

Q4 2010 Earnings Conference Call

March 09, 2011 5:00 pm ET

Executives

Amy Chang - Vice President, Investor Relations

Susan Salka - President and Chief Executive Officer

Brian Scott - Chief Financial Officer and Chief Accounting Officer

Analysts

Tobey Sommer - SunTrust Robinson Humphrey

A.J. Rice - Susquehanna Financial

Jeff Silber - BMO Capital Markets

Gary Taylor - Citigroup

Presentation

Operator

Ladies and gentlemen, thank you for standing by. Welcome to the AMN Healthcare Fourth Quarter 2010 Earnings Call. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session. The instructions will be given at that time. (Operator Instructions). And as a reminder, the conference is being recorded. I would now like to turn the conference over to our host, Ms. Amy Chang, Vice President of Investor Relations for AMN Healthcare. Please go ahead.

Amy Chang - Vice President, Investor Relations

Thanks Laurie [ph]. Good afternoon everyone. Welcome to AMN Healthcare’s fourth quarter 2010 earnings call. A replay of this webcast will be available at amnhealthcare.com/investors and will be available until March 29, 2011. Details for the audio replay of the conference call can be found in our earnings press release.

I would also like to mention our policy regarding forward-looking statements. As we conduct this call, various remarks that we make about future expectations, plans and prospects constitute forward-looking statements. Forward-looking statements are identified by words such as believe, anticipate, expect, intend, plan, will, may and other similar expressions. Any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

It is possible that our actual results may differ materially from those indicated by these forward-looking statements, as a result of various important factors, including those identified in our S-3 filed on December 21 st, 2010, annual report on Form 10-K for the year ended December 31 st, 2009 and other periodic reports, which have been filed with and are publicly available from the SEC. The results reported in this call may not be indicative of results for future quarters.

These statements reflect the Company's current beliefs and are based upon information currently available to it. Developments subsequent to this call may cause these statements to become outdated. The Company does not intend, however, to update the guidance provided today prior to its next earnings release.

I will now turn the call over to Susan Salka, AMN Healthcare's President and Chief Executive Officer.

Susan Salka - President and Chief Executive Officer

Thank you, Amy. Good afternoon everyone and welcome to AMN Healthcare’s 2010 fourth quarter earnings conference call. I’m sure like everyone on this call the AMN team is keenly focused on the current and future opportunities in our business. But as much as we would like to jump right into the New Year with you, it is important to first reflect back on 2010 as our actions and performance last year have a lot to do with why we are starting 2011 in such a stronger position.

After weathering through 2009 and the most severe contraction in the history of healthcare staffing, 2010 represented a year of stabilization and transition back to growth. During such turbulent times, companies can choose to either take a hunker down approach or use the opportunity to consolidate and make important strides in their long-term strategies.

Just as we have done in prior contractions, we chose the latter approach to position AMN to build for the future. There were two key events that occurred for the company during 2010. First, the market began to stabilize and improve. Overall, for AMN, we bottomed out in the fourth quarter of 2009 and stabilized going into the first quarter of last year. Then we experienced modest sequential growth in Q2, Q3 and now Q4.

The travel nurse business experienced the strongest sequential growth during 2010. And the other staffing division stabilized and have also begun to show positive indicators. The second key event was our acquisition of Medfinders, which closed last September. This transaction not only delivered some immediate tangible benefits, but it also has a significant impact on our ability to deliver more sophisticated workforce solutions. These address the changing needs and buying behaviors of healthcare organizations.

In our call today, I will be giving an update on our top three priorities. The first is the integration of the Medfinders acquisition to achieve the targeted EBITDA synergies. The second is to grow market share through the expansion of our managed services programs and cross-selling of our services. And third and probably always at the top of our list is the everyday execution in our core businesses to ensure solid performance and to deliver on our promises to our clients.

The integration of the Medfinders organization is progressing very well. As we reported in our last call, the integration of the overlapping travel nursing businesses was completed in November. Since then, we have also completed the integration of certain corporate functions including marketing, HR, IT, risk management, and legal. The finance function will complete its integration by the end of March. We will also complete the full integration of the Medfinders allied brands onto our platform in April.

And then finally, we are continuing to streamline clients and clinical operational functions into our shared services model. With this steady effort from our team, we are on track to achieve the targeted 8 million in annualized EBITDA cost synergies by the fourth quarter. The second key focus for the team has been to increase the direct fill rates in our existing managed services programs through the sharing of our expanded local and national candidate supply, whereas AMN previously used sub-contractors to fill our local per diem orders. We are now able to partially fill that demand directly through our own newly acquired Nursefinders’ local office network.

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