AMN Healthcare Services Inc

Good day, and thank you for standing by. Welcome to AMN Healthcare Second Quarter 2021 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star zero. I would now like to hand the conference over to your speaker today, Randy Reese, Director of Investor Relations. Please go ahead.

Good afternoon, everyone. Welcome to AMN Healthcare's second quarter 2021 earnings call. A replay of this webcast will be available at ir.amnhealthcare.com following the conclusion of this call. Details for the audio replay of the conference call are in our earnings release issued this afternoon. Various remarks we make during this call about future expectations, projections, trends, plans, events, or circumstances constitute forward-looking statements. These statements reflect the company's current beliefs based upon information currently available to it. Our actual results may differ materially from those indicated by these forward-looking statements. as a result of various factors and cautionary statements, including those identified in our most recently filed Forms 10-K and 10-Q, our earnings release, and subsequent filings with the SEC. The company does not intend to update guidance or any forward-looking statements provided today prior to its next earnings release. This call contains certain non-GAAP financial information, Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at ir.amnhealthcare.com. On the call today are Susan Salka, Chief Executive Officer, Brian Scott, Chief Financial Officer, Kelly Rakowski, Group President and COO of Strategic Talent Solutions, Landry Cedig, Group President and COO of Nursing and Allied Solutions. James Taylor, Group President and COO of Physician and Leadership Solutions. Also joining for the first time is Chris Schwartz, AMN Controller, who will serve as our Interim Principal Financial Officer due to the impending departure of our friend and colleague Brian Scott from AMN. I will now turn the call over to Susan.

Thank you so much, Randy, and welcome, everyone, to our earnings call, Zoe. It's a pleasure and honor to be with this team and with all of you today. The AMN team continues to make a greater impact in healthcare, and this last quarter was another testament to our relentless commitment to patients nationwide. More than 330 million Americans depend on 8 million professionals who provide healthcare in this country. AMN and our industry have always been an important part of the healthcare ecosystem. The pandemic has created short-term and permanent workforce shifts that increase our opportunity and the need to help change the paradigm of staffing for the future. Creating, supporting, and empowering a quality and agile workforce requires a multifaceted approach, particularly in the face of persistent workforce challenges. Healthcare organizations are increasing their hiring efforts as regular patient care volume is getting back to normal. However, they continue to struggle with a high volume of quits and long-term vacancies. On top of this, the pandemic is resurging. Our colleagues at AMN have stepped up in a way true to our values to help our clients deliver great patient care. Demand for contingent labor increased throughout the second quarter, and that trend has accelerated through today. Most of our staffing businesses are experiencing record high levels of demand across all geographies and almost all specialties. Our team has addressed the growing client need by expanding our technology solution footprint and placing tens of thousands of healthcare professionals where needed most. We are simultaneously investing heavily in our people and infrastructure to ensure that we're able to empower the future of care with our growing and new solutions. Our positive impact enabled us to exceed financial expectations in the second quarter. Consolidated revenue was $857 million, 41% higher than prior year, with outperformance and growth year over year from all segments. Our largest segment, Nurse and Allied Solutions, reported revenue of $624 million, up 41% year over year. We hit another record high for average travelers on assignment. including supplier partners through our MSP and VMS platforms, our program placed over 70,000 nurse and allied clinicians during the quarter. Travel nurse staffing grew above our expectations at 37% year over year. This increase was driven primarily by volume growth. After a brief decline in demand earlier in the year, orders began climbing again in April and now are at record levels. Total orders in nursing doubled in July compared with the second quarter level. Our allied staffing team hit another record with 113 million second quarter revenue, up 44% year over year. Our imaging, respiratory, and lab revenue led our allied growth again, rising 76% year over year. Also important was the continued comeback of therapy, which had been slower in 2020. New therapy orders in the second quarter were more than 50% higher than the first quarter level. Overall, Ally demand has seen consistent growth over the last three quarters, and today the demand is at record high levels. Across nursing and Ally, the labor market is experiencing extreme supply constraints, high demand, and intense competition for talent. Clients are citing problems not only with permanent hiring, but also with retention. We're hearing about vacancy rates at very high levels all across the board, all across the country. Most of the demand is not related to COVID patients, but rather leaves of absence, clinician fatigue, normal patient volumes rising, and operating room backlog. Our clients are telling us that this is unlikely to change anytime soon. In anticipation of these trends continuing, we have increased investment in each phase of the recruiting, placement, and onboarding process. We continue to hire additional recruiters and invest in our digital platform. These are leading to higher new applicants, although not enough to satisfy the extraordinary demand. For the third quarter of 2021, we expect nurse and allied solution segment revenue to be approximately 45% higher year over year. Physician and leadership solution segment revenue for the second quarter was 139,028% higher year over year, which was better than our guidance of 20% growth. Locum Tenens' revenue was $78 million, up 26% over prior year. Overall, Locum's demand has recovered nicely, with many specialties exceeding the pre-pandemic levels. Our highest demand specialties include anesthesiology, advanced practitioners, internal medicine, primary care, and psychiatry. Interim leadership revenue grew 30% year-over-year as the business delivered a third consecutive quarter of strong sequential volume growth. Core demand for interim leaders is growing and has recovered to pre-pandemic levels. Physician and executive search revenue rose by 33% over the year-ago quarter and permanent placement demand continues to strengthen. For the third quarter, we expect physician and leadership solutions revenue to be 25% to 27% higher year-over-year. Second quarter revenue for the technology and workforce solutions segment grew 70% year-over-year. Language services excelled again with revenue of 46 million, 61% higher than the year-ago period. This is due to strong demand as healthcare utilization has returned to normal levels, but also due to new and expanded clients and the appeal of our video platform that enables virtual on-demand service. Second quarter revenue for our VMS business was $31 million, growing an incredible 76% year-over-year. The primary drivers here is the continued high demand across all clinician needs and the several new customers added over the last year. In the third quarter, we expect revenue for the technology and workforce solutions segment to be up 44 to 48% compared with the prior year. Over the past decade, we invested significantly in the evolution of AMN to become the leading, largest, and most diversified total talent solutions partner that we are today. Healthcare organizations continue to turn to AMN as a strategic partner, finding ways to increase the efficiency of the workforce and improve access to care. As an outcome, we have seen strong growth in our outsource and technology solutions, including remote language services, telehealth, workforce and scheduling optimization, and recruitment process outsourcing. In addition, our managed services programs continue to grow. We are adding new clients, and existing clients are engaging us for additional solutions. I am very proud of the AMN team and the recognition they are receiving for their outstanding efforts. For example, AMN recently earned HRO today's highest ranking for customer satisfaction in healthcare MSP. We have nearly $5 billion gross spend under management through our MSP and VMS platform, by far the leader in healthcare. Also, Avantis currently has the highest overall class score for nurse and staff scheduling. Our RPO solution was recently recognized as a star performer by Everest Group. These honors are just a few examples of how the AMN team is making a difference for healthcare professionals and clients. We work in a great industry with lots of amazing partners and people, which makes these accolades that much more meaningful. We are particularly proud of the positive impact we are having on health equity and access. We are honored to have been awarded the Eastern Region of the FEMA Vaccine Administration Program for underserved communities. We mobilized clinicians who administered nearly 100,000 vaccines, many delivered by mobile units to limited access areas. Our telehealth and remote language services are enabling care in alternative and rural settings. In their first quarter with AMN, CINCY delivered 60,000 telehealth visits. Our Televate platform for schools supports remote access to critical therapeutic services for students and supporting over 130,000 sessions throughout the pandemic. Over the last year, we have increased investments across our operations to be the best partner possible for our clients and our candidates. The most important investment we can make is always within our own team. Of course, we've added many wonderful new colleagues to the AMN family over the last year. We have also increased our investment in our team members to ensure that we're supporting them and helping them to achieve their personal and professional goals. We've increased our benefits. We've increased our wellness and mental health support. We have increased our actions in line with our commitment to diversity, equality, equity, inclusion, and other critical social issues. We've seen tremendous participation in our employee resource groups and now have eight thriving ERGs to support our increasingly diverse team. We've increased our charitable activities and community impact, which is a very important part of the AMN culture and team member engagement. The benefit of all of this can be measured in our strong retention levels. But most importantly, we see the strong engagement of our team show up every day in the caring, courageous, and committed support that they give our clients, our clinicians, and to one another. Now and then, one of our great colleagues does decide to depart and pursue a new personal or professional goal outside of AMN. You're all aware, I believe, that Brian Scott made that decision recently. Brian has been an amazing friend and colleague to me and many of us over the past 17 years, including the last 10 years. Plus, as our CFO. Since that's more than twice the average tenure of a typical public company CFO, I think that says a lot about Brian's talents, but also his commitment to his colleagues and to our purpose. I've learned a great deal from you, Brian, over the years, and I will forever be grateful, as I know we all will be, for all you've done to evolve AMN. One of the greatest legacies that Brian leaves for us is the strength of his team, the team that he's created and developed. All of the leaders across our finance, accounting, tax audit, customer service teams are exceptionally strong, which is why we did not feel the need to name an interim CFO when we are conducting the search for Brian's replacement. We are super fortunate that Chris Schwartz is seamlessly stepping into the role as interim principal financial officer, which is, of course, a natural extension for him as controller, since he's already responsible for most of the elements of financial SEC reporting and the interface with our auditors, amongst many other things. Chris has been a colleague with AMN since 2005 and has done a phenomenal job in a variety of financial leadership and investor relations roles. And he too has been instrumental in our evolution. He also happens to be a great role model for our culture and our values. So I thank you and all of our leaders, Chris, for everything you do, including through this transition. In a few minutes, Kelly, Landry, James, and Chris will join us for the Q&A session. But for now, I will turn the call over to Brian, who will give us more insights.