Business Wire | Feb 24, 2021 04:15PM EST

Cross Country Healthcare Announces Fourth Quarter and Full Year 2020 Financial Results

Feb. 24, 2021

BOCA RATON, Fla.--(BUSINESS WIRE)--Feb. 24, 2021--Cross Country Healthcare, Inc. (the "Company") (Nasdaq: CCRN) today announced financial results for its fourth quarter and full year ended December 31, 2020.

SELECTED FINANCIAL INFORMATION:

Dollars areinthousands, Variance Variance Full Year Varianceexcept per Q4 2020 Q4 2020 vs Q4 2020 vs 2020 2020 vsshare Q4 2019 Q3 2020 2019amounts

Revenue $ 215,606 - % 11 % $ 836,417 2 %

Gross profit 25.2 % 50 bps 50 bps 24.2 % (60 ) bpsmargin*

Net income(loss)attributable $ 4,612 503 % 446 % $ (12,962 ) 78 %to commonshareholders

Diluted EPS $ 0.13 $ 0.16 $ 0.17 $ (0.36 ) $ 1.25

Adjusted $ 11,500 39 % 34 % $ 36,322 43 %EBITDA*

Adjusted $ 0.19 $ 0.12 $ 0.07 $ 0.46 $ 0.31 EPS*

Cash flowsfrom $ 1,929 136 % 123 % $ 27,204 391 %operations

* Refer to accompanying tables and discussion of Non-GAAP financial measuresbelow.

"Our performance in the fourth quarter once again demonstrates our ability to deliver the critical staff and support needed by our clients. We continue to see significantly higher demand from COVID, driving increases in both the number of clinicians on assignments as well as higher bill rates for the first quarter of 2021," said Kevin Clark, Co-founder and CEO for Cross Country Healthcare.

Fourth quarter consolidated revenue was $215.6 million, representing an increase of 11% sequentially and flat with the prior year. Consolidated gross margin was 25.2%, up 50 basis points year-over-year and sequentially. Net income attributable to common shareholders was $4.6 million compared to losses of $1.1 million in the prior year and $1.3 million in the prior quarter. Diluted EPS was $0.13 per share compared to losses of $0.03 per share in the prior year and $0.04 per share in the prior quarter. Adjusted EBITDA was $11.5 million or 5.3% of revenue, as compared with $8.3 million or 3.9% of revenue in the prior year, and $8.6 million or 4.4% of revenue in the prior quarter. Adjusted EPS was $0.19 compared with $0.07 in the prior year and $0.12 in the prior quarter.

For the year ended December 31, 2020, consolidated revenue was $836.4 million, an increase of 2% over the prior year. Consolidated gross margin was 24.2%, down 60 basis points year-over-year. Net loss attributable to common shareholders was $13.0 million, or a net loss of $0.36 per diluted share, compared to a net loss of $57.7 million, or a loss of $1.61 per diluted share in the prior year. Adjusted EBITDA was $36.3 million or 4.3% of revenue, as compared with $25.5 million or 3.1% of revenue in the prior year. Adjusted EPS was $0.46 compared to $0.15 in the prior year.

Full year 2020 results included non-cash impairment charges of $16.2 million, which was comprised of $10.7 million, primarily related to goodwill and customer relationships for the Search business, and $5.5 million related to right-of-use assets and related property and equipment in connection with leases that were vacated during the year. Results for the year ended December 31, 2020 also included $6.1 million in restructuring costs primarily comprised of employee termination costs and lease-related exit costs.

Quarterly Business Segment Highlights

Nurse and Allied Staffing

Revenue was $196.4 million, representing a 3% increase year-over-year and 12% sequentially. Contribution income was $22.3 million, compared to $17.8 million in the prior year and $18.2 million in the prior quarter. Average field contract personnel on a full-time equivalent (FTE) basis were 5,798 as compared with 7,339 in the prior year and 5,403 in the prior quarter. Revenue per FTE per day was $368 compared to $284 in the prior year and $353 in the prior quarter.

Physician Staffing

Revenue was $16.4 million, a decrease of 18% year-over-year and consistent with the prior quarter. Contribution income was $0.9 million, a decrease compared to $1.0 million in the prior year and an increase compared to $0.8 million in the prior quarter. Total days filled were 9,911 as compared with 11,672 in the prior year and 9,682 in the prior quarter. Revenue per day filled was $1,658 as compared with $1,714 in the prior year and $1,699 in the prior quarter.

Search

Revenue was $2.8 million, a decrease of 24% year-over-year and an increase of 23% sequentially. Contribution income was $0.6 million, compared to losses of $0.3 million in both the prior year and the prior quarter.

Cash Flow and Balance Sheet Highlights

Cash flow provided by operations for the quarter was $1.9 million compared to cash flow used in operations of $5.4 million in the prior year and $8.5 million in the prior quarter, with the principal driver being a six day sequential improvement in days' sales outstanding. Cash flow provided by operating activities for the full year was $27.2 million compared to $5.5 million in the prior year.

At December 31, 2020, the Company had $1.6 million in cash and cash equivalents, $53.4 million of borrowings drawn under its asset-based loan facility (ABL), and $18.5 million of letters of credit outstanding. Availability under the ABL is subject to a borrowing base, which was $125.5 million as of December 31, 2020, with $53.6 million available for borrowing as of December 31, 2020.

Outlook for First Quarter 2021

The guidance below applies only to management's expectations for the first quarter of 2021.

Year-over-Year Q1 2021 Range Change Sequential Change



Revenue $280 million - $295 33% - 40% 30% - 37% million



Gross Profit 21.2% - 21.7% (240) bps - (190) (400) bps - (350)Margin* bps bps



Adjusted EBITDA* $16.0 million - $18.0 247% - 290% 39% - 57% million



Adjusted EPS* $0.32 - $0.37 $0.33 - $0.38 $0.13 - $0.18

* Refer to discussion of Non-GAAP financial measures below.

There remains a high degree of uncertainty regarding the continued impact from COVID-19 on our business. In particular, the outlook above assumes sequential increases in bill rates and the number of clinicians on COVID assignments, and the continued closures of schools in key markets. As a result of the stronger projected performance for both revenue and Adjusted EBITDA, as well as continued uncertainty from the pandemic, the Company continues the use of wider guidance ranges for the first quarter of 2021.

The above estimates are based on current management expectations and, as such, are forward-looking and actual results may differ materially. The above ranges do not include the potential impact of any future divestitures, mergers, acquisitions or other business combinations, changes in debt structure, or future share repurchases. The guidance also reflects the impacts from certain cost actions and actual results may differ depending on timing and further actions it may take. See accompanying Non-GAAP financial measures and tables below.

INVITATION TO CONFERENCE CALL

The Company will hold its quarterly conference call on Wednesday, February 24, 2021, at 5:00 P.M. Eastern Time to discuss its fourth quarter and full year 2020 financial results. This call will be webcast live and can be accessed at the Company's website at www.crosscountryhealthcare.com or by dialing 888-566-1099 from anywhere in the U.S. or by dialing 773-799-3716 from non-U.S. locations - Passcode: Cross Country. A replay of the webcast will be available from February 24th through March 11th at the Company's website and a replay of the conference call will be available by telephone by calling 800-510-0118 from anywhere in the U.S. or 203-369-3808 from non-U.S. locations - Passcode: 2021.

ABOUT CROSS COUNTRY HEALTHCARE

Cross Country Healthcare, Inc. (CCH) is a leader in providing total talent management including strategic workforce solutions, contingent staffing, permanent placement, and consultative services for healthcare customers. Leveraging our 35 years of industry expertise and insight, CCH solves complex labor-related challenges for customers while providing high-quality outcomes and exceptional patient care. As a multi-year Best of Staffing(r) Award winner, CCH is committed to an exceptionally high level of service to both our clients and our healthcare professionals. CCH was the first publicly traded staffing firm to obtain The Joint Commission Certification, which it still holds with a Letter of Distinction. In February 2021, CCH earned Energage's inaugural 2021 Top Workplaces USA award. CCH has a longstanding history of investing in its diversity, equality, and inclusion strategic initiatives as a key component of the organization's overall corporate social responsibility program which is closely aligned with its core values to create a better future for its people, communities, the planet, and its shareholders.

Copies of this and other news releases as well as additional information about Cross Country Healthcare can be obtained online at www.crosscountryhealthcare.com. Shareholders and prospective investors can also register to automatically receive the Company's press releases, made with the Securities and Exchange Commission (SEC) filings and other notices by e-mail.

NON-GAAP FINANCIAL MEASURES

This press release and accompanying financial statement tables reference non-GAAP financial measures, such as gross profit margin, adjusted EBITDA, and adjusted EPS. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for, or superior to, financial measures calculated in accordance with U.S. GAAP. Such non-GAAP financial measures are provided for consistency and comparability to prior year results; furthermore, management believes they are useful to investors when evaluating the Company's performance as they exclude certain items that management believes are not indicative of the Company's future operating performance. Pro forma measures, if applicable, are adjusted to include the results of our acquisitions, and exclude the results of divestments, as if the transactions occurred in the beginning of the periods mentioned. Such non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies. The financial statement tables that accompany this press release include a reconciliation of each non-GAAP financial measure to the most directly comparable U.S. GAAP financial measure and a more detailed discussion of each financial measure; as such, the financial statement tables should be read in conjunction with the presentation of these non-GAAP financial measures.

FORWARD LOOKING STATEMENTS

In addition to historical information, this press release contains statements relating to our future results (including certain projections and business trends) that are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act, and are subject to the "safe harbor" created by those sections. Forward-looking statements consist of statements that are predictive in nature, depend upon or refer to future events. Words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", "suggests", "appears", "seeks", "will", and "could", and variations of such words and similar expressions are intended to identify forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors include, but are not limited to, the following: the potential impacts of the COVID-19 pandemic on our business, financial condition, and results of operations, our ability to attract and retain qualified nurses, physicians and other healthcare personnel, costs and availability of short-term housing for our travel healthcare professionals, demand for the healthcare services we provide, both nationally and in the regions in which we operate, the functioning of our information systems, the effect of cyber security risks and cyber incidents on our business, the effect of existing or future government regulation and federal and state legislative and enforcement initiatives on our business, our clients' ability to pay us for our services, our ability to successfully implement our acquisition and development strategies, including our ability to successfully integrate acquired businesses and realize synergies from such acquisitions, the effect of liabilities and other claims asserted against us, the effect of competition in the markets we serve, our ability to successfully defend the Company, its subsidiaries, and its officers and directors on the merits of any lawsuit or determine its potential liability, if any, and other factors set forth in Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2019, and in our other filings with the SEC. You should consult any further disclosures the Company makes on related subjects in its filings with the SEC.

Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results and readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's opinions only as of the date of this press release. There can be no assurance that (i) we have correctly measured or identified all of the factors affecting our business or the extent of these factors' likely impact, (ii) the available information with respect to these factors on which such analysis is based is complete or accurate, (iii) such analysis is correct or (iv) our strategy, which is based in part on this analysis, will be successful. The Company undertakes no obligation to update or revise forward-looking statements. All references to "we", "us", "our", or "Cross Country" in this press release mean Cross Country Healthcare, Inc. and its subsidiaries.

Cross Country Healthcare, Inc.

Consolidated Statements of Operations

(Unaudited, amounts in thousands, except per share data)



Three Months Ended Year Ended

December December September December December 31, 31, 30, 31, 31,

2020 2019 2020 2020 2019



Revenue from $ 215,606 $ 215,096 $ 193,968 $ 836,417 $ 822,224 services

Operating expenses:

Direct operating 161,214 161,935 145,965 633,685 618,215 expenses

Selling, generaland administrative 44,870 45,572 40,804 173,809 181,959 expenses

Bad debt expense 652 505 946 3,035 2,008

Depreciation and 2,199 4,627 3,247 12,671 14,075 amortization

Acquisition andintegration-related - (184 ) - 77 201 costs

Restructuring costs 842 687 2,316 6,052 3,571

Legal settlement - - - - 1,600 charges

Impairment charges 166 - 1,071 16,248 16,306

Total operating 209,943 213,142 194,349 845,577 837,935 expenses

Income (loss) from 5,663 1,954 (381 ) (9,160 ) (15,711 )operations

Other expenses (income):

Interest expense 671 1,048 608 2,890 5,306

Loss on derivative - - - - 1,284

Loss on earlyextinguishment of - 1,470 - - 1,978 debt

Other expense 326 144 (10 ) 280 (68 )(income), net

Income (loss) 4,666 (708 ) (979 ) (12,330 ) (24,211 )before income taxes

Income tax (156 ) (108 ) 169 (188 ) 31,732 (benefit) expense

Consolidated net 4,822 (600 ) (1,148 ) (12,142 ) (55,943 )income (loss)

Less: Net incomeattributable tononcontrolling 210 544 186 820 1,770 interest insubsidiary

Net income (loss)attributable to $ 4,612 $ (1,144 ) $ (1,334 ) $ (12,962 ) $ (57,713 )common shareholders



Net income (loss)per shareattributable to $ 0.13 $ (0.03 ) $ (0.04 ) $ (0.36 ) $ (1.61 )common shareholders- Basic and Diluted



Weighted averagecommon shares outstanding:

Basic 36,177 35,869 36,176 36,088 35,815

Diluted 36,778 35,869 36,176 36,088 35,815

Cross Country Healthcare, Inc.

Reconciliation of Non-GAAP Financial Measures

(Unaudited, amounts in thousands)



Three Months Ended Year Ended

December December September December December 31, 31, 30, 31, 31,

2020 2019 2020 2020 2019

Adjusted EBITDA:^a

Net income (loss)attributable to $ 4,612 $ (1,144 ) $ (1,334 ) $ (12,962 ) $ (57,713 )common shareholders

Interest expense 671 1,048 608 2,890 5,306

Income tax (156 ) (108 ) 169 (188 ) 31,732 (benefit) expense^b

Depreciation and 2,199 4,627 3,247 12,671 14,075 amortization

Acquisition andintegration-related - (184 ) - 77 201 costs^c

Restructuring costs 842 687 2,316 6,052 3,571 ^d

Legal settlements 600 - 837 2,998 1,600 and fees^e

Impairment charges^ 166 - 1,071 16,248 16,306 f

Loss on derivative^ - - - - 1,284 g

Loss on earlyextinguishment of - 1,470 - - 1,978 debt^h

Loss on disposal of 364 - - 364 - fixed assets

Other expense (38 ) 144 (10 ) (84 ) (68 )(income), net

Equity compensation 1,340 879 1,064 5,403 3,396

Applicant tracking 690 323 444 2,033 2,030 system costs^i

Net incomeattributable tononcontrolling 210 544 186 820 1,770 interest insubsidiary

Adjusted EBITDA^a $ 11,500 $ 8,286 $ 8,598 $ 36,322 $ 25,468



Adjusted EPS:^j

Numerator:

Net income (loss)attributable to $ 4,612 $ (1,144 ) $ (1,334 ) $ (12,962 ) $ (57,713 )common shareholders

Non-GAAPadjustments - pretax:

Acquisition andintegration-related - (184 ) - 77 201 costs^c

Restructuring costs 842 687 2,316 6,052 3,571 ^d

Legal settlements 600 - 837 2,998 1,600 and fees^e

Impairment charges(excluding 166 - 1,071 16,248 1,804 rebranding impacts) ^f

Rebrandingimpairments and - 1,978 938 3,075 17,379 accelerated amortization^f

Loss on derivative^ - - - - 1,284 g

Loss on earlyextinguishment of - 1,470 - - 1,978 debt^h

Applicant tracking 690 323 444 2,033 2,030 system costs^i

Nonrecurring income (18 ) (428 ) - 295 35,247 tax adjustments

Tax impact ofnon-GAAP (2 ) - (20 ) (992 ) (2,044 )adjustments

Adjusted net incomeattributable to $ 6,890 $ 2,702 $ 4,252 $ 16,824 $ 5,337 common shareholders - non-GAAP



Denominator:

Weighted averagecommon shares - 36,177 35,869 36,176 36,088 35,815 basic, GAAP

Dilutive impact ofshare-based 601 472 228 340 251 payments^k

Adjusted weightedaverage common 36,778 36,341 36,404 36,428 36,066 shares - diluted, non-GAAP



Reconciliation:

Diluted EPS, GAAP $ 0.13 $ (0.03 ) $ (0.04 ) $ (0.36 ) $ (1.61 )

Non-GAAPadjustments - pretax:

Acquisition andintegration-related - (0.01 ) - - - costs^c

Restructuring costs 0.02 0.02 0.06 0.16 0.10 ^d

Legal settlements 0.02 - 0.03 0.09 0.05 and fees^e

Impairment charges(excluding - - 0.03 0.45 0.05 rebranding impacts) ^f

Rebrandingimpairments and - 0.05 0.03 0.09 0.48 accelerated amortization^f

Loss on derivative^ - - - - 0.04 g

Loss on earlyextinguishment of - 0.04 - - 0.05 debt^h

Applicant tracking 0.02 0.01 0.01 0.05 0.06 system costs^i

Nonrecurring income - (0.01 ) - 0.01 0.98 tax adjustments

Tax impact ofnon-GAAP - - - (0.03 ) (0.05 )adjustments

Adjusted EPS, $ 0.19 $ 0.07 $ 0.12 $ 0.46 $ 0.15 non-GAAP^j

Cross Country Healthcare, Inc.

Consolidated Balance Sheets

(Unaudited, amounts in thousands)



December December 31, 31,

2020 2019



Assets

Current assets:

Cash and cash equivalents $ 1,600 $ 1,032

Accounts receivable, net 170,003 169,528

Prepaid expenses 5,455 6,097

Insurance recovery receivable 4,698 5,011

Other current assets 1,355 1,689

Total current assets 183,111 183,357

Property and equipment, net 12,351 11,832

Operating lease right-of-use assets 10,447 16,964

Goodwill 90,924 101,066

Trade names, indefinite-lived 5,900 5,900

Other intangible assets, net 34,831 44,957

Other non-current assets 19,409 18,298

Total assets $ 356,973 $ 382,374



Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable and accrued expenses $ 49,877 $ 45,726

Accrued employee compensation and benefits 35,540 31,307

Operating lease liabilities - current 4,509 4,878

Other current liabilities 3,497 3,554

Total current liabilities 93,423 85,465

Revolving credit facility 53,408 70,974

Operating lease liabilities - non-current 15,234 19,070

Non-current deferred tax liabilities 6,592 7,523

Long-term accrued claims 25,412 26,938

Contingent consideration - 4,867

Other long-term liabilities 7,995 4,037

Total liabilities 202,064 218,874



Commitments and contingencies



Stockholders' equity:

Common stock 4 4

Additional paid-in capital 310,388 305,643

Accumulated other comprehensive loss (1,280 ) (1,240 )

Accumulated deficit (154,737 ) (141,775 )

Total Cross Country Healthcare, Inc. stockholders' 154,375 162,632 equity

Noncontrolling interest in subsidiary 534 868

Total stockholders' equity 154,909 163,500

Total liabilities and stockholders' equity $ 356,973 $ 382,374

Cross Country Healthcare, Inc.

Segment Data^l

(Unaudited, amounts in thousands)



Three Months Ended Year-over-Year Sequential

December % of December % of September % of % change % change 31, 31, 30,

2020 Total 2019 Total 2020 Total Fav (Unfav) Fav (Unfav)



Revenue from services:

Nurse and Allied $ 196,374 91 % $ 191,417 89 % $ 175,244 90 % 2.6 % 12.1 %Staffing

Physician Staffing 16,429 8 % 20,011 9 % 16,452 9 % (17.9 )% (0.1 )%

Search 2,803 1 % 3,668 2 % 2,272 1 % (23.6 )% 23.4 %

$ 215,606 100 % $ 215,096 100 % $ 193,968 100 % 0.2 % 11.2 %



Contribution income (loss):^m

Nurse and Allied $ 22,265 $ 17,849 $ 18,233 24.7 % 22.1 %Staffing

Physician Staffing 942 1,034 827 (8.9 )% 13.9 %

Search 570 (297 ) (308 ) 291.9 % 285.1 %

23,777 18,586 18,752 27.9 % 26.8 %



Corporate overhead^ 14,907 11,502 12,499 (29.6 )% (19.3 )%n

Depreciation and 2,199 4,627 3,247 52.5 % 32.3 %amortization

Acquisition andintegration-related - (184 ) - (100.0 )% - %costs^c

Restructuring costs 842 687 2,316 (22.6 )% 63.6 %^d

Impairment charges^ 166 - 1,071 (100.0 )% 84.5 %f

Income (loss) from $ 5,663 $ 1,954 $ (381 ) 189.8 % NM operations



Year Ended Year-over-Year

December % of December % of % change 31, 31,

2020 Total 2019 Total Fav (Unfav)



Revenue from services:

Nurse and Allied $ 757,949 91 % $ 732,815 89 % 3.4 % Staffing

Physician Staffing 67,934 8 % 74,605 9 % (8.9 )%

Search 10,534 1 % 14,804 2 % (28.8 )%

$ 836,417 100 % $ 822,224 100 % 1.7 %



Contribution income (loss):^m

Nurse and Allied $ 75,293 $ 64,353 17.0 % Staffing

Physician Staffing 3,619 2,758 31.2 %

Search (1,124 ) (823 ) (36.6 )%

77,788 66,288 17.3 %



Corporate overhead^ 51,900 46,246 (12.2 )% n

Depreciation and 12,671 14,075 10.0 % amortization

Acquisition andintegration-related 77 201 61.7 % costs^c

Restructuring costs 6,052 3,571 (69.5 )% ^d

Legal settlement - 1,600 100.0 % charges^e

Impairment charges^ 16,248 16,306 0.4 % f

Loss from $ (9,160 ) $ (15,711 ) 41.7 % operations



NM-Not meaningful.

Cross Country Healthcare, Inc.

Summary Condensed Consolidated Statements of Cash Flows

(Unaudited, amounts in thousands)



Three Months Ended Year Ended

December December September December December 31, 31, 30, 31, 31,

2020 2019 2020 2020 2019



Net cash providedby (used in) $ 1,929 $ (5,351 ) $ (8,456 ) $ 27,204 $ 5,542 operating activities

Net cash used ininvesting (956 ) (898 ) (1,169 ) (4,615 ) (2,940 )activities

Net cash (used in)provided by (2,827 ) (2,186 ) 6,818 (22,010 ) (17,599 )financing activities

Effect of exchangerate changes on 8 9 19 (11 ) 10 cash

Change in cash and (1,846 ) (8,426 ) (2,788 ) 568 (14,987 )cash equivalents

Cash and cashequivalents at 3,446 9,458 6,234 1,032 16,019 beginning of period

Cash and cashequivalents at end $ 1,600 $ 1,032 $ 3,446 $ 1,600 $ 1,032 of period



Cross Country Healthcare, Inc.

Other Financial Data

(Unaudited)

Three Months Ended

Year Ended

December 31,

December 31,

September 30,

December 31,

December 31,

2020

2019

2020

2020

2019

Consolidated gross profit margino

25.2

%

24.7

%

24.7

%

24.2

%

24.8

%

Nurse and Allied Staffing statistical data:

FTEsp

5,798

7,339

5,403

6,037

7,113

Average Nurse and Allied Staffing revenue per FTE per dayq

$

368

$

284

$

353

$

343

$

282

Physician Staffing statistical data:

Days filledr

9,911

11,672

9,682

38,987

44,381

Revenue per day filleds

$

1,658

$

1,714

$

1,699

$

1,742

$

1,681

Cross Country Healthcare, Inc.

Other Financial Data

(Unaudited)



Three Months Ended Year Ended

December December September December December 31, 31, 30, 31, 31,

2020 2019 2020 2020 2019



Consolidated gross 25.2 % 24.7 % 24.7 % 24.2 % 24.8 %profit margin^o



Nurse and AlliedStaffing statistical data:

FTEs^p 5,798 7,339 5,403 6,037 7,113

Average Nurse andAllied Staffing $ 368 $ 284 $ 353 $ 343 $ 282 revenue per FTE per day^q



Physician Staffing statistical data:

Days filled^r 9,911 11,672 9,682 38,987 44,381

Revenue per day $ 1,658 $ 1,714 $ 1,699 $ 1,742 $ 1,681 filled^s

Adjusted EBITDA, a non-GAAP (Generally Accepted Accounting Principles) financial measure, is defined as net income (loss) attributable to common shareholders before interest expense, income tax (benefit) expense, depreciation and amortization, acquisition and integration-related costs, restructuring costs, legal settlements and fees, impairment charges, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on disposal of fixed assets, gain or loss on sale of business, other expense (income), net, equity compensation, applicant tracking system costs, and includes net income attributable to noncontrolling interest in(a) subsidiary. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Management presents Adjusted EBITDA because it believes that Adjusted EBITDA is a useful supplement to net income attributable to common shareholders as an indicator of operating performance. Management uses Adjusted EBITDA for planning purposes and as one performance measure in its incentive programs for certain members of its management team. Adjusted EBITDA, as defined, closely matches the operating measure typically used in the Company's credit facilities in calculating various ratios. Adjusted EBITDA Margin is calculated by dividing Adjusted EBITDA by the Company's consolidated revenue.

Income tax expense for the year ended December 31, 2019 includes $35.8(b) million of expense related to the establishment of valuation allowances on our deferred tax assets in the second quarter.

Acquisition and integration-related costs include costs for prior(c) acquisitions, costs incurred for potential transactions, and accretion and valuation adjustments related to the contingent consideration liability for the Mediscan acquisition.

Restructuring costs are primarily comprised of employee termination costs,(d) lease-related exit costs, and reorganization costs as part of planned cost savings initiatives.

Legal settlements and fees include legal settlement charges as presented on the consolidated statements of operations as well as legal fees pertaining to non-operational legal matters which are included in selling, general and administrative expenses. For the year ended December 31, 2019, we incurred(e) legal settlement charges pertaining to the resolution of a medical malpractice lawsuit in excess of carrier limits as well as a California wage and hour class action settlement. For the year ended December 31, 2020, we incurred $3.0 million in legal fees related to an ongoing legal matter outside the normal course of operations.

Impairment charges in 2020 of $16.2 million were comprised of $10.7 million primarily related to goodwill and other intangible assets for the Search business and $5.5 million related to right-of-use assets and related property and equipment in connection with leases that were vacated during the year. Impairment charges in 2019 related to trade name impairment of(f) $14.5 million related to Nurse and Allied Staffing resulting from the Company's rebranding initiative and $1.8 million related to the Company's decision to cease use of certain of its leased properties in conjunction with its restructuring plan. Rebranding impairments and accelerated amortization related to finite-lived trade names in connection with the rebranding initiatives.

(g) Loss on derivative represents the amount paid to terminate an interest rate hedge related to our term loan that was refinanced in October 2019.

Loss on early extinguishment of debt for the year ended December 31, 2019 consists of write-off and extinguishment costs related to the refinancing(h) of our debt in the fourth quarter of 2019, and the write-off of debt issuance costs in the prior quarters related to optional prepayments on our term loan made in the first and second quarters and an optional reduction in borrowing capacity under our prior revolving credit facility.

Applicant tracking system costs are related to the Company's project to replace its legacy system supporting its travel nurse staffing business.(i) These costs are reported in selling, general and administrative expenses on the consolidated statement of operations and included in corporate overhead in segment data.

Adjusted EPS, a non-GAAP financial measure, is defined as net income (loss) attributable to common shareholders per diluted share before the diluted EPS impact of acquisition and integration-related costs, restructuring costs, legal settlements and fees, impairment charges, rebranding impairments and accelerated amortization, gain or loss on derivative, loss on early extinguishment of debt, gain or loss on sale of business,(j) applicant tracking system costs, and nonrecurring income tax adjustments. Adjusted EPS should not be considered a measure of financial performance under GAAP. Management presents Adjusted EPS because it believes that Adjusted EPS is a useful supplement to its reported EPS as an indicator of operating performance. Management believes it provides a more useful comparison of the Company's underlying business performance from period to period and is more representative of the future earnings capacity of the Company.

Due to the net loss for the three months ended December 31, 2019 and(k) September 30, 2020, and for the years ended December 31, 2020 and 2019, 472, 228, 340, and 251 shares (in thousands), respectively, were excluded from diluted weighted average shares.

(l) Segment data provided is in accordance with the Segment Reporting Topic of the FASB ASC.

Contribution income is defined as income (loss) from operations before depreciation and amortization, acquisition and integration-related costs,(m) restructuring costs, legal settlement charges, impairment charges, and corporate overhead. Contribution income is a financial measure used by management when assessing segment performance.

Corporate overhead includes unallocated executive leadership and other(n) centralized corporate functional support costs such as finance, IT, legal, human resources, and marketing, as well as public company expenses and corporate-wide projects (initiatives).

Gross profit is defined as revenue from services less direct operating(o) expenses. The Company's gross profit excludes allocated depreciation and amortization expense. Gross profit margin is calculated by dividing gross profit by revenue from services.

(p) FTEs represent the average number of Nurse and Allied Staffing contract personnel on a full-time equivalent basis.

Average revenue per FTE per day is calculated by dividing the Nurse and(q) Allied Staffing revenue per FTE by the number of days worked in the respective periods. Nurse and Allied Staffing revenue also includes revenue from the permanent placement of nurses.

Days filled is calculated by dividing the total hours invoiced during the(r) period, including an estimate for the impact of accrued revenue, by 8 hours.

(s) Revenue per day filled is calculated by dividing revenue as reported by days filled for the period presented.

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CONTACT: Cross Country Healthcare, Inc. William J. Burns, 561-237-2555 Executive Vice President & Chief Financial Officer wburns@crosscountry.com