Medical Staffing Network Announces Realignment of Its Business Model
October 30 2008 - 5:08PM
Business Wire
Medical Staffing Network Holdings, Inc. (NYSE:�MRN) today announced
that it is realigning its per diem branch network. The Company will
be increasingly focused on expanding its local contract business.
Local contract staffing is assignments that range two weeks in
length or longer and are filled through a local branch. Over the
past few months, the Company has increased its local contract
staffing to approximately 25% of the per diem division�s revenue.
In addition, the Company�s actions are in response to recent
successes in its vendor management services (VMS) operations. The
VMS group has been awarded six contracts during 2008, which further
reduces its dependency on daily transactional business. The success
of the VMS division together with the focus on local contract
staffing has enabled the Company to increase the visibility of its
revenue stream. As a result, on October 28, 2008, the Company
decided to consolidate its national branch footprint by closing 20
per diem locations where local contract and VMS business
opportunities were less evident. Through technological advancements
and focusing on local contract business, a majority of these closed
branch locations will be serviced either from a nearby location or
from a �virtual� office setting from the Company�s corporate
location. The Company anticipates that the loss of the closed
locations� income from operations will be entirely offset by a
reduction in salaries and related expenses for operations and
corporate personnel. The Company expects to incur a charge of
approximately $6.7 million in the fourth quarter of 2008. The
charge will be comprised of approximately $1.0 million relating to
severance costs and lease termination and approximately $5.7
million in non-cash goodwill impairment relating to the closure of
the branches. Commenting on the action plan, Robert Adamson,
Chairman and Chief Executive Officer, stated, �While the current
environment of the temporary nurse staffing industry remains
difficult, our third quarter AEBITDA will be sequentially higher
than that of the second quarter. Over the past few quarters, we
have considered fine tuning our per diem division�s business plan
model as we believe local contract staffing and VMS arrangements
provide more visibility to the Company�s revenue stream as well as
more stability to a local healthcare professional�s work week. We
expect that this realignment to the per diem division�s business
model in conjunction with the recent VMS wins will increase the
quality of our future earnings as well as allow us to focus more of
our attention on increasing local contract staffing and our other
product lines.� Company Summary Medical Staffing Network Holdings,
Inc. is the third largest diversified healthcare staffing company
in the United States as measured by revenues. The Company is the
leading provider of per diem nurse staffing services and is also a
leading provider of travel, allied health and vendor managed
services. Discussion of AEBITDA AEBITDA consists of net income
(loss) before income taxes, interest, loss on early extinguishment
of debt, depreciation and amortization, restructuring and other
charges, outsourcing implementation costs and non-cash impairment
of goodwill, which might not be calculated in the same manner as,
and thus might not be comparable to, similarly titled measures
reported by other companies. This press release includes certain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements include
all statements other than those made solely with respect to
historical fact. These statements involve known and unknown risks,
uncertainties and other factors that may cause the registrant�s
actual results and performance to be materially different from any
future results or performance expressed or implied by these
forward-looking statements. These factors include our ability to
recognize the benefits of the realignment of our per diem branch
network, the amount of costs, expenses, and charges related to the
realignment of our per diem branch network, and other factors,
which can be found in our Form 10-K for the year ended December�30,
2007 and our other filings with the Securities and Exchange
Commission. Forward-looking statements in this press release should
be evaluated in light of these important factors. Although the
registrant believes that these statements are based upon reasonable
assumptions, the registrant cannot provide any assurances regarding
future results. The registrant undertakes no obligation to revise
or update any forward-looking statements, or to make any other
forward-looking statements, whether as a result of new information,
future events or otherwise.
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