AMN Healthcare Services Inc

Good afternoon and welcome to AMN Healthcare First Quarter 2022 Earnings Call. My name is Brika and I'll be today's event specialist. There will be a question and answer session and if you wish to ask a question you may press star followed by the number one on your telephone keypad. Our host for today's call will be Randy Rees, Senior Director of Investor Relations. So Randy, please go ahead when you're ready.

Good afternoon, everyone. Welcome to AMN Healthcare's first quarter 2022 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. Because of various factors in cautionary statements, including those identified in our most recently filed forms 10-K and 10-Q, our earnings relief 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 are the most directly comparable GAAP measures, including in our earnings release and on our financial reports page at ir.mnhealthcare.com. On the call today are Susan Salka, Chief Executive Officer, Jeff Knudson, Chief Financial Officer, Kelly Rakowski, Group President and COO of Strategic Talent Solutions, Landry Siedig, Group President and COO of Nursing and Allied Solutions, and James Taylor, Group President and COO of Physician and Leadership Solutions. I will now turn the call over to Susan.

Thank you so much, Randy, and welcome, everyone. We're very grateful that you're here with us today and pleased to be able to share some good news. We are reporting strong results and a positive outlook, very consistent with what we discussed on our last earnings call. Over the last two years, the dedicated AMN team and our healthcare professionals enabled an all out response to the pandemic. And now we are seeing light at the end of the tunnel. However, the pandemic has taken a significant toll on the healthcare workforce and, in particular, frontline clinicians. The extreme shortages of healthcare professionals have been accelerated and exacerbated in a way that we could not have foreseen. We are now in a situation that requires new methods of how the healthcare community approaches staffing and support of our workforce. A little over a decade ago, AMN identified the need and opportunity to bring workforce solutions into healthcare and create efficiencies for our clients, clinicians, and the industry. We and other innovative partners paved the way for technology-enabled solutions. Our MSP relationships and the diversification of our revenue mix have reduced our risk exposure to market and economic fluctuations. All stakeholders benefited from these evolutionary leaps, and with AMN as the leader in total talent solutions, our shareholders certainly experienced a significant benefit. I believe we are at the beginning of another evolutionary time in our industry. Healthcare job openings stand at an unprecedented 2.9 times the number of monthly hires. Clinicians are insisting on more flexibility and higher compensation, as well as faster, more digital, seamless experience. Because of these factors, clients are reimagining their staffing paradigm. AMN is well positioned to deliver what healthcare professionals and clients need and want in the coming years. Prior to the pandemic, AMN was already making significant investments in our digital platforms and tech-enabled solutions. Over the past two years, we have supercharged those investments and launched several new capabilities. Our conversations with clients today include questions like how can they embrace the changing preferences of a younger workforce? How can they attract clinicians from outside their region? And how can they embrace the local professionals who want flexibility to work across multiple facilities and get experiences to advance their careers? These all pose significant challenges for the healthcare ecosystem, but also great opportunities for those organizations able and willing to collaborate and drive innovation. AMN is the only organization capable of delivering large-scale managed services programs, as well as providing three of the top VMS platforms. Just this week, we were again named the number one healthcare MSP provider by HRO today. We hit a new record high in the first quarter at an annualized rate of approximately $15 billion in VMS and MSP gross spend under management. While this run rate will come down as pricing returns to a sustainable level, we believe these relationships and the volume opportunity will largely continue into the future. Healthcare employers are increasingly requesting our comprehensive solutions to address the recruitment and staffing challenges. The power of our diversified solutions allows us to help clients with temporary, permanent, short-term, and long-term workforce challenges. We are clearly differentiated by our unmatched portfolio of more than 20 distinct workforce solutions, working closely with clients to address their complex labor needs. Over the last few years, our clients have increased the number of AMN solutions they use. Today, AMN's top 30 clients use on average eight of our solutions, which represents great progress, but also gives us tremendous growth potential. Before we talk more about the future, I'd like to first recognize the outstanding achievements of the AMN team in the first quarter. Consolidated revenue for the quarter was $1.55 billion, and adjusted EBITDA was 258 million, both record levels. Our nurse and allied solution segment reported revenue of 1.23 billion with growth of 87% year-over-year. Travel nurse staffing grew by 95% year-over-year due to both volume and bill rate growth driven by higher compensation for clinicians. Allied staffing revenue increased by 64% year-over-year in the first quarter, including more than 40% growth in volume. Imaging, lab, respiratory, and therapy were all strong. As we projected, and we are very pleased to see, the crisis demand has subsided since the peak earlier in the year. In the nurse and allied segment, we are now seeing a more normalized demand level which is still more than 80% higher than the same time period before the pandemic. This also means compensation expectations have come down and resulting bill rates have reduced. This is in line with where we thought we would be as we move through the second quarter. Based on this, we expect our nurse and allied segment revenue to grow approximately 70% year over year in the second quarter. More than half of our growth is coming from increased volume of clinicians on assignment. Our physician and leadership solutions segment reached a new record with first quarter revenue of $180 million, up 28% year-over-year. Locum Tenens had its highest quarterly revenue ever, reaching $113 million with 30% year-over-year growth. Core business grew 60% year-over-year while pandemic-related revenue was down. Interim leadership also had record revenue with mid-teens growth year-over-year. Physician and executive search revenue grew an impressive 46% year-over-year in the first quarter. New physician searches remained strong, and the pipeline for mid-level and executive search is strong, bolstered by multi-search opportunities from larger clients. In the second quarter of 2022, we expect revenue for the physician and leadership solution segment to grow approximately 20% year over year. Our technology and workforce solution segment reached another new high with first quarter revenue of $145 million, up 64% year over year. The greatest portion of revenue growth came from our VMS technology business. Language services and recruitment process outsourcing also delivered strong growth as clients are requesting more diversified solutions. In the second quarter of 2022, we expect technology and workforce solutions segment revenue to be up about 45% year-over-year. With most of the pandemic behind us and certainly many lessons learned and relationships strengthened, Our focus is on how we make a greater impact and deliver greater value for all stakeholders in the future. The pandemic accelerated workforce and market changes that would have otherwise taken many years to unfold. Because of the strategic actions we took during the pandemic, AMN moves forward in a better position than ever before. We swiftly embraced operational changes and made technology investments that are making us faster, more agile, and empowered with real-time views of healthcare professionals and clients. We proved our business and our team can scale effectively across a wide range of market conditions. And we showed that we can manage strong growth while increasing our commitment to ambitious environmental, social, and governance goals. Over the last year, we increased our alignment with organizations focused on diversity, equity, inclusion, and resiliency of the healthcare workforce. The crisis amplified the strength of our values, and that has enabled AMN to create opportunities for talented people who seek meaningful work in a purpose-driven culture. In fact, in an environment where most companies are experiencing higher than normal levels of attrition, In the first quarter, AMN saw lower than normal attrition. In our latest employee engagement survey, team members ranked AMN well above industry benchmarks across all key categories. Team members specifically called out the strength of AMN's culture and the fact that their colleagues and the organization care about supporting them in pursuing their personal and professional goals. We remain confident that the post-pandemic environment will include persistent labor shortages, increasing need for flexibility, and a growing appetite for total talent solutions. These significant market drivers give our industry a long-term growth opportunity. AMN is uniquely positioned to excel in the market with the power of our diversified portfolio. Our team, our leadership, and our culture are exceptionally strong and We have strengthened our customer intimacy, giving us great insight into what clients need from us now and in the future. In just a few minutes, James, Kelly, and Landry will join us for the Q&A session. For now, though, I will turn the call over to our colleague, Jeff, who will provide more insight into our financial results.