SAN DIEGO, July 28 /PRNewswire-FirstCall/ -- AMN Healthcare Services, Inc. (NYSE: AHS) today announced operating results for the second quarter of 2010. Financial highlights are as follows:

(Dollars in millions, except per share amounts)

                                % Chg    % Chg
                           Q2      Q2       Q1
                          2010    2009     2010

    Revenue             $149.3    (25%)      4%
    Gross Profit         $41.2    (23%)      3%
    Net Income            $0.1    (97%)    (82%)
    Diluted Earnings
     per Share           $0.00     NM       NM
    Cash Flow from
     Operations           $6.8    (81%)   (42%)
    Adjusted EBITDA*      $9.7    (46%)    (7%)
    Adjusted EPS*        $0.02    (88%)     NM

    * See notes (2) and (3) under "Supplemental Financial and Operating
     Data" for a reconciliation of non-GAAP items.

    NM - Not meaningful

Key business highlights for the second quarter are as follows:

• Revenues were up 4% sequentially, compared with guidance of 1 to 3%
• Locum Tenens and Physician Permanent Placement revenues were both sequentially up 8%
• Nurse and Allied revenues were sequentially flat
• SG&A levels as a percentage of revenues remain steady, excluding acquisition-related costs

"The industry appears to be entering a modest recovery phase, with second quarter consolidated revenues growing sequentially for the first time in seven quarters, and exceeding our expectations due to better than anticipated volumes," said Susan R. Nowakowski, President and Chief Executive Officer of AMN Healthcare. "Although we are experiencing positive indicators and steady progress, we retain a conservative view of the near-term trajectory for healthcare staffing due to the continued high general unemployment and apprehension in the economic environment. We continue to be positive about the industry's long-term growth prospects and are positioning our service offerings to meet the strategic needs of our clients and their growth and financial objectives."

In support of its long-term strategy, AMN Healthcare announced earlier today that it has entered into a definitive agreement to acquire the parent company of Nursefinders, Inc. (dba Medfinders), the nation's leading provider of clinical workforce managed services programs. Through its multi-brand strategy, Medfinders also provides travel nurse and allied staffing, locum tenens, physician search services, and home healthcare services, as well as local nurse and allied staffing in support of its managed services programs. The transaction is expected to close in the third quarter of 2010, and additional details of the agreement can be found in a separate press release issued today.

"This acquisition is a natural step in our long-term growth strategy as it directly contributes to the delivery of greater value and innovative workforce solutions to our clients. In addition to enhancing the capabilities of our existing businesses and expanding into new complementary service lines, we will also be able to achieve immediate sales and operating efficiencies. We believe this is the perfect addition to AMN to enhance shareholder value in both the short and long term," added Nowakowski.

Second Quarter 2010 Results

For the second quarter of 2010, revenue was $149 million, a decrease of 25% from prior year and up 4% from prior quarter. Second quarter revenue for the Nurse and Allied staffing segment was $76 million, a decrease of 32% from the same quarter last year and up 1% sequentially. The Locum Tenens staffing segment generated revenue of $65 million, a decrease of 17% from prior year and up 8% sequentially. Second quarter Physician Permanent Placement revenue was $8 million, a decrease of 7% from prior year and up 8% sequentially.

Gross margin in the second quarter of 2010 was 27.6%, an increase of 60 bps from prior year and a decrease of 30 bps compared to the previous quarter. The improvement as compared to the prior year was driven primarily by an increase in gross margin in the Nurse and Allied segment and the increased revenue mix from the higher margin Physician Permanent Placement segment. The decrease as compared to prior quarter was mainly attributable to a decrease in Nurse and Allied gross margin.

Selling, general and administrative ("SG&A") expenses for the second quarter of 2010 were 23% as a percentage of revenue compared to 19% in the same quarter last year. Second quarter SG&A declined by $3 million, or 9%, over the same period in the prior year, and increased by $3 million, or 8%, as compared to the prior quarter, due in part to acquisition-related costs incurred during the quarter.

As of June 30, 2010, cash and cash equivalents totaled $41 million, compared to $27 million as of December 31, 2009. Total term debt outstanding, net of discount, as of June 30, 2010 was $104 million, with no borrowings on the revolver portion of the credit facility.

Business Trends and Outlook

Going into the third quarter, demand continues to trend up slightly across all business lines. With all business segments anticipating sequential improvement in volumes, consolidated revenue is expected to be up 4-6% compared with the second quarter, excluding the impact of any acquisitions. Gross margin is anticipated to remain sequentially steady.

About AMN Healthcare Services

AMN Healthcare Services, Inc. is the nation's largest provider of comprehensive healthcare staffing and workforce solutions. As a leading provider of travel nurse and allied staffing services, locum tenens (temporary physician staffing) and physician permanent placement services, AMN Healthcare recruits and places healthcare professionals on assignments of variable lengths and in permanent positions with clients throughout the United States, ranging from acute-care hospitals and physician practice groups to other healthcare settings. AMN Healthcare also offers flexible, customized workforce management solutions to healthcare organizations through its managed services program and recruitment process outsourcing services. For more information, visit http://www.amnhealthcare.com.

Conference Call on July 29, 2010

AMN Healthcare Services, Inc.'s second quarter 2010 conference call will be held on Thursday, July 29, 2010, at 9:00 a.m. Eastern Time. A live webcast of the call can be accessed through AMN Healthcare's website at http://amnhealthcare.investorroom.com/presentations. Please log in at least 10 minutes prior to the conference call in order to download the applicable audio software. Interested parties may participate live via telephone by dialing (800) 553-0326 in the U.S. or (612) 332-0720 internationally. A telephonic replay of the call will be available at 11:00 a.m. Eastern Time on July 30, 2010, and can be accessed until 11:59 p.m. Eastern Time on August 19, 2010, by calling (800) 475-6701 in the U.S. or (320) 365-3844 internationally, with access code 163114. Alternatively, a replay of the webcast will be available at the company's website at 11:00 a.m. Eastern Time on July 30, 2010.

Non-GAAP Measures

This earnings release contains certain non-GAAP financial information. These measures are not in accordance with, or an alternative to, generally accepted accounting principles in the United States ("GAAP"), and may be different from non-GAAP measures reported by other companies. From time to time, additional information regarding non-GAAP financial measures may be made available on the company's website at http://www.amnhealthcare.com/investors.

Forward-Looking Statements

This press release contains "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. Such statements include expectations regarding third quarter demand, revenue and gross margin, the industry's growth prospects and company's positioning, the proposed acquisition's enhancement of the company's existing capabilities and expansion into complementary service lines and its impact on sales and operating efficiencies and on shareholder value. The company based these forward-looking statements on its current expectations and projections about future events. Actual results could differ materially from those discussed in, or implied by, these forward-looking statements. Forward-looking statements are identified by words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Factors that could cause actual results to differ from those implied by the forward-looking statements contained in this press release are set forth in the company's Annual Report on Form 10-K for the year ended December 31, 2009 and its other quarterly and periodic reports filed with the SEC. These statements reflect the company's current beliefs and are based upon information currently available to it. Be advised that developments subsequent to this press release are likely to cause these statements to become outdated with the passage of time.

Important Information

AMN Healthcare intends to file a proxy statement and other relevant materials with the SEC to obtain shareholder approval of (i) the convertibility of the preferred stock to be issued to Medfinders' shareholders in the acquisition into shares of AMN Healthcare common stock and (ii) the voting rights of such preferred stock (the "Stockholder Approval"). INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT AND OTHER RELEVANT MATERIALS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY AS THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE STOCKHOLDER APPROVAL. The proxy statement, any amendments or supplements to the proxy statement and other relevant documents filed by AMN Healthcare with the SEC will be available free of charge through the web site maintained by the SEC at www.sec.gov or by calling the SEC at telephone number 1-800-SEC-0330. Free copies of these documents may also be obtained from AMN Healthcare's website at www.amnhealthcare.com or by writing to: AMN Healthcare Services, Inc., 12400 High Bluff Drive, Suite 100, San Diego, California 92130, Attention: Investor Relations.

AMN Healthcare and its directors and executive officers are deemed to be participants in the solicitation of proxies from the stockholders of AMN Healthcare in connection with the Stockholder Approval. Information regarding AMN Healthcare's directors and executive officers is included in AMN Healthcare's definitive proxy statement for its 2010 annual meeting of stockholders held on April 14, 2010, which was filed with the SEC on March 12, 2010. Other information regarding the participants in such proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the proxy statement to be filed in connection with the Stockholder Approval.

    Contact:
    Amy C. Chang
    Vice President, Investor Relations
    866.861.3229

                            AMN Healthcare Services, Inc.
                   Condensed Consolidated Statements of Operations
                  (dollars in thousands, except per share amounts)
                                     (unaudited)

                             Three Months Ended        Six Months Ended
                             ------------------        ----------------
                           June 30,       March 31,        June 30,
                           --------       ---------        --------
                        2010      2009      2010       2010        2009
                        ----      ----      ----       ----        ----

    Revenue           $149,282  $199,140  $143,294   $292,576    $448,735
     Cost of revenue   108,111   145,463   103,250    211,361     331,075
                       -------   -------   -------    -------     -------
       Gross profit     41,171    53,677    40,044     81,215     117,660
                        ------    ------    ------     ------     -------
                          27.6%     27.0%     27.9%      27.8%       26.2%
    Operating expenses:
        Selling, general
         and
         administrative 34,594    37,840    31,950     66,544      87,920
                          23.2%     19.0%     22.3%      22.7%       19.6%
        Depreciation
         and
         amortization    3,163     3,442     3,298      6,461       6,909

        Impairment
         and
         restructuring
         charges             -     2,152         -          -     180,777
                           ---     -----       ---        ---     -------

             Total
              operating
              expenses  37,757    43,434    35,248     73,005     275,606
                        ------    ------    ------     ------     -------
    Income (loss)
     from operations     3,414    10,243     4,796      8,210    (157,946)
                           2.3%      5.1%      3.3%       2.8%      (35.2%)
    Interest expense,
     net                 2,583     2,320     2,637      5,220       4,519
                         -----     -----     -----      -----       -----
              Income
               (loss)
               before
               income
               taxes       831     7,923     2,159      2,990    (162,465)
    Income tax expense
     (benefit)             694     3,549     1,379      2,073     (45,005)
                           ---     -----     -----      -----     -------
             Net income
              (loss)      $137    $4,374      $780       $917   $(117,460)
                          ====    ======      ====       ====   =========
                           0.1%      2.2%      0.5%       0.3%     (26.2%)
    Net income (loss)
     per common share:
           Basic         $0.00     $0.13     $0.02      $0.03      $(3.60)
                         =====     =====     =====      =====      ======
           Diluted       $0.00     $0.13     $0.02      $0.03      $(3.60)
                         =====     =====     =====      =====      ======

    Weighted average
     common shares
     outstanding:
           Basic        32,760    32,621    32,631     32,696      32,599
                        ======    ======    ======     ======      ======
           Diluted      33,566    32,918    33,471     33,519      32,599
                        ======    ======    ======     ======      ======

                                AMN Healthcare Services, Inc.
                          Supplemental Financial and Operating Data
          (dollars in thousands, except per share amounts and operating data)
                                         (unaudited)

                                Three Months Ended        Six Months Ended
                                ------------------        ----------------
                           June 30,          March 31,        June 30,
                           --------          --------         --------
                       2010       2009         2010       2010         2009
    Revenue
       Nurse and
        allied
        healthcare
        staffing     $75,606    $111,136     $75,191    $150,796     $274,986
       Locum
        tenens
        staffing      65,348      79,097      60,388     125,737      153,888
       Physician
        permanent
        placement
        services       8,328       8,907       7,715      16,043       19,861
                    $149,282    $199,140    $143,294    $292,576     $448,735
                    ========    ========    ========    ========     ========

    Reconciliation
     of Non- GAAP
     Items:

    Segment Operating
     Income(1)
       Nurse and
        allied
        healthcare
        staffing      $7,250     $11,076      $8,734     $15,984      $25,798
       Locum
        tenens
        staffing       6,399      10,154       5,471      11,870       14,807
       Physician
        permanent
        placement
        services       1,978       2,387       1,966       3,944        5,662
                       -----       -----       -----       -----        -----
                      15,627      23,617      16,171      31,798       46,267
         Unallocated
          corporate
          overhead     5,916       5,625       5,728      11,644       11,697
                       -----       -----       -----      ------       ------
    Adjusted
     EBITDA(2)         9,711      17,992      10,443      20,154       34,570

    Depreciation and
     amortization      3,163       3,442       3,298       6,461        6,909
    Stock- based
     compensation      2,040       2,155       2,349       4,389        4,830
    Acquisition
    -related costs     1,094           -           -       1,094            -
    Impairment and
     restructuring
     charges               -       2,152           -           -      180,777
    Interest
     expense, net      2,583       2,320       2,637       5,220        4,519
                       -----       -----       -----       -----        -----
    Income (loss)
     before income
     taxes               831       7,923       2,159       2,990     (162,465)
    Income tax
     expense (benefit)   694       3,549       1,379       2,073      (45,005)
    Net income (loss)   $137      $4,374        $780        $917    $(117,460)
                        ====      ======        ====        ====     =========


    GAAP based
     diluted net
     income (loss)
     per share (EPS)      $-       $0.13                   $0.03       $(3.60)
       Adjustments:
       Acquisition
       -related
        costs           0.02                                0.02
       Impairment
        and
        restructuring
        charges                     0.04                                 3.86
       Non-recurring
        legal expense                                                    0.02
    Adjusted diluted
     earnings per
     share (3)         $0.02       $0.17                   $0.05        $0.28
                       =====       =====                   =====        =====


                              Three Months Ended             Six Months Ended
                              ------------------             ----------------
                           June 30,           March 31,          June 30,
                           --------           --------           --------
                       2010         2009        2010         2010        2009
    Gross Margin
       Nurse and
        allied
        healthcare
        staffing        25.5%       25.0%       26.3%       25.9%        23.8%
       Locum
        tenens
        staffing        26.2%       26.1%       26.2%       26.2%        26.2%
       Physician
        permanent
        placement
        services        56.9%       58.8%       57.9%       57.4%        60.3%

     Operating Data:
     ---------------
    Nurse and allied
     healthcare staffing
         Average
          travelers
          on
          assignment
          (4)          2,475       3,661       2,505       2,490        4,575
         Revenue
          per
          traveler
          per
          day (5)    $335.65     $333.59      333.51      334.59      $332.08
         Gross
          profit
          per
          traveler
          per
          day (5)     $85.66      $83.36       87.68       86.67       $78.99


    Locum tenens
     staffing
         Days
          filled (6)  46,456      54,708      43,065      89,521      107,105
         Revenue
          per day
          filled
          (6)      $1,406.66   $1,445.80       1,402    1,404.55    $1,436.80
         Gross
          profit
          per
          day
          filled (6) $368.89     $377.79      367.08      368.02      $375.94



                                                   
                                  As of June 30         As of March 31,
                                  -------------         ---------------
                              2010           2009             2010
     Leverage ratio (7)       2.5            1.1              2.1

    (1)  Segment Operating Income represents net income (loss) plus interest 
         expense (net of interest income), income taxes, depreciation and 
         amortization, impairment and restructuring charges, unallocated 
         corporate expenses, and stock-based compensation expense. Management 
         believes that Segment Operating Income is an industry wide financial 
         measure that is useful both to management and investors when 
         evaluating the company's performance. Management also uses Segment 
         Operating Income for planning purposes. Segment Operating Income is 
         not necessarily comparable to other similarly titled captions of 
         other companies due to potential inconsistencies in the method of 
         calculation and allocation of costs.

    (2)  Adjusted EBITDA represents net income (loss) plus interest expense 
         (net of interest income), income taxes, depreciation and 
         amortization, acquisition-related costs, impairment and restructuring
         charges, and stock-based compensation expense. Management presents 
         adjusted EBITDA because it believes that adjusted EBITDA is a useful 
         supplement to net income as an indicator of operating performance. 
         Management believes that adjusted EBITDA is an industry wide 
         financial measure that is useful both to management and investors 
         when evaluating the company's performance. Management also uses 
         adjusted EBITDA for planning purposes. Management uses adjusted 
         EBITDA to evaluate the company's performance because it believes that
         adjusted EBITDA provides an effective measure of the company's 
         results, as it excludes certain items that management believes are 
         not indicative of the company's operating performance and considers 
         measures used in credit facilities. However, adjusted EBITDA is not 
         intended to represent cash flows for the period, nor has it been 
         presented as an alternative to income (loss) from operations or net 
         income (loss) as an indicator of operating performance, and it should
         not be considered in isolation or as a substitute for measures of 
         performance prepared in accordance with GAAP. As defined, adjusted 
         EBITDA is not necessarily comparable to other similarly titled 
         captions of other companies due to potential inconsistencies in the 
         method of calculation. While management believes that some of the 
         items excluded from adjusted EBITDA are not indicative of the 
         company's operating performance, these items do impact the income 
         statement, and management therefore utilizes adjusted EBITDA as an 
         operating performance measure in conjunction with GAAP measures such 
         as net income.

    (3)  Adjusted EPS represents GAAP EPS plus acquisition-related costs, 
         restructuring and impairment charges and non-recurring legal 
         expenses. Management presents adjusted EPS because it believes that 
         adjusted EPS is a useful supplement to diluted net loss per share as 
         an indicator of operating performance. Management believes such a 
         measure provides a picture of the company's results that is more 
         comparable among periods since it excludes the impact of items that 
         may recur occasionally, but tend to be irregular as to timing, 
         thereby distorting comparisons between periods. However, investors 
         should note that this non-GAAP measure involves judgment by 
         management (in particular, judgment as to what is classified as a 
         special item to be excluded from adjusted EPS). As defined, adjusted 
         EPS is not necessarily comparable to other similarly titled captions 
         of other companies due to potential inconsistencies in the method of 
         calculation. While management believes that some of the items 
         excluded from adjusted EPS are not indicative of the company's 
         operating performance, these items do impact the income statement, 
         and management therefore utilizes adjusted EPS as an operating 
         performance measure in conjunction with GAAP measures such as GAAP 
         EPS.
    (4)  Average travelers on assignment represents the average number of 
         nurse and allied healthcare professionals on assignment during the 
         period presented.

    (5)  Revenue per traveler per day and gross profit per traveler per day 
         represent the revenue and gross profit of the company's nurse and 
         allied healthcare staffing segment divided by average travelers on 
         assignment, divided by the number of days in the period presented.

    (6)  Days filled is calculated by dividing the locum tenens hours filled 
         during the period by 8 hours. Revenue per day filled and gross profit
         per day filled represent revenue and gross profit of the company's 
         locum tenens staffing segment divided by days filled for the period 
         presented.

    (7)  Leverage ratio represents the ratio of the total debt outstanding at 
         the end of the period to the Adjusted EBITDA for the past twelve 
         months.

                            AMN Healthcare Services, Inc.
                        Condensed Consolidated Balance Sheets
                                    (in thousands)
                                      (unaudited)

                                                                    
                                            June 30,    March 31, December 31,
                                              2010         2010      2009
                                              ----         ----      ----
    Assets
    Current assets:
      Cash and cash equivalents              $41,368      $36,567   $27,053
      Accounts receivable, net                89,746       89,085    89,150
      Accounts receivable, subcontractor       7,309        4,624       348
      Prepaid expenses                         6,595        7,152     6,550
      Income taxes receivable                  2,666        2,735     3,900
      Deferred income taxes, net               8,534        8,534     8,534
      Other current assets                     1,209        1,415     1,902
                                               -----        -----     -----
        Total current assets                 157,427      150,112   137,437
    Restricted cash and cash equivalents      20,961       22,022    22,025
    Fixed assets, net                         17,103       18,538    19,970
    Deposits and other assets                 13,898       14,432    14,368
    Goodwill                                  79,868       79,868    79,868
    Intangible assets, net                   112,947      114,135   115,336
                                             -------      -------   -------

             Total assets                   $402,204     $399,107  $389,004
                                            ========     ========  ========

    Liabilities and stockholders' equity
    Current liabilities:
      Accounts payable and accrued
       expenses                              $28,294       24,493    18,057
      Accrued compensation and benefits       27,405       28,178    24,054
      Current portion of notes payable         8,250        6,875     5,500
      Deferred revenue                         6,018        5,158     5,084
      Other current liabilities                9,055       10,042    10,404
                                               -----       ------    ------
        Total current liabilities             79,022       74,746    63,099

    Notes payable, less current portion
     and discount                             95,317       97,721   100,121
    Deferred income taxes, net                   406            -       789
    Other long-term liabilities               52,488       52,664    54,151
                                              ------       ------    ------
        Total liabilities                    227,233      225,131   218,160
                                             -------      -------   -------

          Stockholders' equity               174,971      173,976   170,844
                                             -------      -------   -------

     Total liabilities and stockholders'
      equity                                $402,204     $399,107  $389,004
                                            ========     ========  ========

                     AMN Healthcare Services, Inc.
               Condensed Consolidated Statements of Cash
                                 Flows
                            (in thousands)
                              (unaudited)


                             Three Months Ended         Six Months Ended
                             ------------------         ----------------
                            June 30,        March 31,      June 30,
                            --------        ---------      --------
                         2010       2009      2010      2010       2009
                         ----       ----      ----      ----       ----

    Net cash provided
     by operating
     activities        $6,794    $36,388   $11,715   $18,509    $73,945

    Net cash
     provided by
     (used in)
     investing
     activities           462     (1,204)     (668)     (206)    (2,434)

    Net cash used
     in financing
     activities        (2,459)   (28,420)   (1,536)   (3,995)   (59,374)

    Effect of
     exchange
     rates on
     cash                   4         49         3         7         35
                          ---        ---       ---       ---        ---

      Net increase
       in cash and
       cash
       equivalents      4,801      6,813     9,514    14,315     12,172

      Cash and cash
       equivalents
       at beginning
       of period       36,567     16,675    27,053    27,053     11,316
                       ------     ------    ------    ------     ------

      Cash and cash
       equivalents
       at end of
       period         $41,368    $23,488   $36,567   $41,368    $23,488
                      =======    =======   =======   =======    =======

SOURCE AMN Healthcare Services, Inc.