Cross Country Healthcare, Inc. Q1 2008 Earnings Call Transcript

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2008-05-08 11:20:12.0

Tags: Cross Country Healthcare Inc.

Question-and-Answer Session

Operator

And thank you. We will now begin the question-and-answer session. (Operator instructions) And our first question comes from Bruce Ackermann with Sandhill Equity Research.

Bruce AckermannSandhill Equity Research

Good morning, gentlemen. Could you talk a little bit about in the clinical trials sector, the organic revenue growth in margin situation and that was in there?

Emil Hensel

The organic – our legacy ClinForce business had a essentially flat performance year over year on the top line, but substantial improvement in margin on the bottom line. There is a little bit of lumpiness in terms of the revenue growth of this business as it very much depends on when new trials come on and all the trials get completed. So, it could have some timing issues as to the revenue growth, but the business is performing quite well and we are very pleased by the growth prospects, and the pipeline that the business has in terms of future trials.

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Bruce AckermannSandhill Equity Research

Okay. Thank you for that. And one other question, in the nursing business, you mentioned Arizona. Is Arizona impacted by that hospital association purchasing group? Is that part of the problems in Arizona

Joe Boshart

I'm sure there is an impact Bruce. I don't think it's the biggest impact. I think just given the unique geographic features of the – particularly the Phoenix market. If the demand were sufficient, the hospitals would have to go outside their buying group and get nurses to come to their facilities. And we have supplied nurses to hospitals outside that buying group at certain periods in the past. So, I'm not sure that it has been a little disorganized, more disorganized than it had been in previous years as far as who's doing what for whom, given the Justice Department's review of the – into the trade implications of what the association is doing. I think the bigger part of what's going in Arizona is just the demand was less, Bruce. I think it was impacted by the very strong housing and construction market becoming a relatively weak housing and construction market, which encouraged nurses to work more hours and therefore soaked up some of the excess that we might have benefitted from historically in that market, particularly in the winter months that just didn't seem to happen that of the same degree this year. We have seen in Arizona a strengthening of the market, it's still down year over year, but we have seen directionally an improvement in Arizona particularly from that low point in February that we referenced in our formal – in the prepared comment. So, I'm optimistic, but right now it's still relatively weak year over year in positions and working nurses.

 

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