AMN Healthcare Services Inc Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Trevor Romeo - William Blair & Company - Analyst : Good afternoon. Thanks for taking the questions, team. I think, one, it would just be great if you could provide any details you have on the bill rate and volume assumptions for nurse and allied that are embedded in the Q3 guide. And then thinking to Q4, I think Cary talked about a range of potential outcomes relative to Q3. And Jeff, I kind of always appreciate the look you tend to give on these calls for two quarters ahead. So, any thoughts on how you'd see Q4 shaping up for bill rates and volumes, just based on what you could see at this point would be really helpful.

Question: Trevor Romeo - William Blair & Company - Analyst : Got it. Okay, thank you both. That was helpful.

Question: Brian Tanquilut - Jefferies Group LLC - Analyst : Got it. Thank you.

Question: Jeffrey Silber - BMO Capital Markets - Analyst : Thanks so much. And wanted to dig into some of the demand trends that you've been talking about. I know it's tough to gauge, but do you think most of your hospital clients are you comfortable with the mix of permanent and temporary staff? And we think that's going to go lower what it will take to get that moving in the right direction. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, AMN.N - Q2 2024 AMN Healthcare Services Inc Earnings Call

Question: Jeffrey Silber - BMO Capital Markets - Analyst : All right, that's helpful. If I could ask a similar question about your own workforce. Are you at the point where you think you've rightsized enough that your workforce can handle the current demand environment? And how quickly can you turn if things start to move in the right direction?

Question: Jeffrey Silber - BMO Capital Markets - Analyst : Great. Thanks so much for the color.

Question: A.J. Rice - UBS Group AG - Analyst : Hi, thanks, Evert everybody. Maybe just following on Jeff's comment about, I guess, carry to some degree of fourth quarter with what you're envisioning with revenue down well, how does that translate into? Do you think we're at a stable point with gross margin from Q3 to Q4? How about SG&A? Is that sort of flatten out? Or is there any reason that would step up or down? I think and I'm not looking for necessarily a specific estimate, but directionally, where we're at is we think we're bottoming out here generally? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, AMN.N - Q2 2024 AMN Healthcare Services Inc Earnings Call

Question: A.J. Rice - UBS Group AG - Analyst : Okay. That's helpful. Just thinking about the use of cash flow from here on, I guess by our calculation, you ended the quarter at 2.6 times debt to EBITDA. I think you'll be at three or above as you exit the year is paying down debt a priority. Where are you comfortable on that leverage ratio as you go forward?

Question: A.J. Rice - UBS Group AG - Analyst : And how I guess I'm trying to get at what is what leverage ratio would you sort of be back to a balance between potentially acquisitions, buybacks and leverage that wherever you guys feel comfortable and it's sort of at a good point.

Question: A.J. Rice - UBS Group AG - Analyst : Okay. Thanks a lot.

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Good afternoon and thanks for taking my questions. Really found the comments on the volumes on helpful. I was wondering, can you talk a little bit about what you're seeing just in terms of the pay rates on what some of the traveling nurses are looking for? You did mention that the premiums are coming down to 15% to 20% above perm for contingent. And so is that sufficient to to fill demand? That's the first question. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, AMN.N - Q2 2024 AMN Healthcare Services Inc Earnings Call

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Great. So it sounds scary like the on the fill rates are in line with what your expectations would be and filling the orders is not an issue. It's still just demand from the clients. Is that correct?

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Okay, great. And then can you just talk a little bit? I mean, obviously, everybody in the entire space is facing the same sort of demand characteristics. It sounds like the bill rates are holding up relatively well. Can you just talk a little bit about competition and what you're seeing on that front and how confident are you in terms of the prognostication that you gave with regards to how you would expect the bill rates to flow through the balance of this year?

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Great. And then on a positive note, you're seeing really nice traction with ShiftWise. You mentioned getting up to 50%. Where do you think that can get to and what would be the implications of that?

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Great. What are the financial implications of that?

Question: Mark Marcon - Robert W. Baird & Co. - Analyst : Great. Thanks for the color. Appreciate it.

Question: Kevin Fischbeck - BofA Securities - Analyst : Great, thanks. I guess you're the second company to say that the orders are up about 20% since the beginning of Q2, but still talking about stable but below Q2 average revenue, and then Q4 sounds like still also kind of stable-ish, despite the orders going up. So, does that that mean something around, I guess you mentioned that orders are able to be filled if they're at market. Does that mean that these orders that are coming in are not at market? Or why isn't there a better correlation between 20% and the revenue numbers over the next couple of quarters? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, AMN.N - Q2 2024 AMN Healthcare Services Inc Earnings Call

Question: Kevin Fischbeck - BofA Securities - Analyst : Okay. And then I guess the winter orders because I think historically you'd have a little bit of color at this point. It sounds like it sounds like it's kind of been pushed back a little bit as far as when those quarters come in. Is that is there an implication for that? I guess in the past, if they come in a little bit later, does that it doesn't mean that the orders are going to be lower or does it or does that not necessarily follow through?

Question: Kevin Fischbeck - BofA Securities - Analyst : And is that a new normal? Does that mean that hospitals are just waiting a little bit longer to use temp staffing and that's just the way it's going to be but could you is there if any that they need it and eventually?

Question: Kevin Fischbeck - BofA Securities - Analyst : Okay. And then I guess last question on the SG&A side, you spiked out to $7 million. Is there anything else there because I guess in the press release there's commentary about lower compensation costs and with lower demand, is that something that we should be on the lookout for? If demand does improve, will there be pressure on the SG&A next year, or is this a good base to be thinking about SG&A as a percentage of revenue going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, AMN.N - Q2 2024 AMN Healthcare Services Inc Earnings Call

Question: Kevin Fischbeck - BofA Securities - Analyst : Is there a way to size that?

Question: Kevin Fischbeck - BofA Securities - Analyst : Perfect. Thanks.

Question: Tobey Sommer - Truist Securities - Analyst : Thank you. I was wondering if you could talk about how you feel you're doing with all the internal idiosyncratic changes, you could make tore to address the marketplace as demand has fallen now for a protracted period of time on you consolidated some brands, if you're trying to cross-sell more services. Is my understanding how do you feel like like you're prosecuting the changes you can control?

Question: Tobey Sommer - Truist Securities - Analyst : At this juncture, how do you think it's influencing market share or wallet share how we choose to think about it.

Question: Tobey Sommer - Truist Securities - Analyst : And what are the signs telling you with respect to your international business and Visa Direct progression? Are there any updates that you've either seen that indicate when you could see a turn or dates out in the future that you're anticipating some sort of an update? Thanks.

Question: Tobey Sommer - Truist Securities - Analyst : Thank you.

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Hi, everybody. I was just wondering at this point; I think we've checked all the questions here. Jeff, on in locum, the MSDR acquisition, did you call out the impact in 2Q and what's in it? What's in the 3Q guidance?

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Is that seasonality?

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : And what I was sort of taking away from earlier comments is that the bill pay spread in the the Travelers is just getting kind of back to something it's normal, but that's what's weighing on the spread. Gross margin is lodging and other costs related to one cannot accomplish expenses. Is that on that is that what you guys are saying?

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Okay. And then just zooming out a little bit, Tom, kind of curious about the marketplace's impact on on your just competitively in the past. They haven't I don't think I made it. It's a big difference in how you do, but curious how you have what looks like today. Thanks.

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : The marketplaces that are, designed to be very automated as far as building positions. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 08, 2024 / 9:00PM, AMN.N - Q2 2024 AMN Healthcare Services Inc Earnings Call

Question: Bill Sutherland - The Benchmark Company, LLC - Analyst : Makes sense. Okay. Thanks, everybody.