Q2 2020 AMN Healthcare Services Inc Earnings Call
[music].
Ladies and gentlemen, thank you for standing by and welcome to A.M. and health care second quarter 2020 earnings call.
At this time, all participants are any listen only mode.
After the speaker presentation, there will be a question and answer session.
To ask a question during the session you will need to press Star and then one on your telephone.
Please be advised that today's conference call is being recorded any require any further assistance. Please press star zero I.
I would now like to end the conference over to Randle Reece director of Investor Relations. Thank you. Please go ahead.
Good afternoon, everyone. Welcome to aim in health care second quarter 2020 earnings call.
A replay of this webcast will be available at <unk> am in health care Dot Investor room Dot com following the conclusion of this call.
Tails for the audio replay of the conference call or in our earnings release issued this afternoon.
Various remarks, we make during this call about future expectations projections trends plan events or circumstances constitute forward looking statements.
These statements reflect the company's current beliefs based on information currently available to it.
Our actual results may differ materially from those indicated by these forward looking statements as a result at various factors in cautionary statements, including those identified in our most recently filed forms 10-K in 10-Q.
Our earnings release, and subsequent filings with the FCC.
The company does not intend to update the guidance or any forward looking statements provided today prior to its next earnings release.
This call contain certain non-GAAP financial information.
Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at <unk> am in health care Dot Investor room Dot com.
On the call today, our Susan Salka, Chief Executive Officer.
Brian Scott Chief Financial Officer.
Kelly Rekow ski group, President and COO of strategic talent solutions, Landry CJ group, President and COO of nursing and Allied solutions, and Dr. coal Edmonton, Chief experiencing clinical officer, I will now turn the call overdue Susan.
Thank you so much Randy and welcome everyone to our second quarter 2020 conference call.
The beginning of March then nation and the healthcare industry have been really from the I'm sad and because of 19 pandemic.
Early stages at the crisis, the healthcare industry with grappling with this surge of cobot 19 patients and managing through a shutdown of non emergency care. The airmen team rose to this challenge and pivoted to help health care professionals and organization.
We quickly expanded existing services and launched new solutions to help the healthcare sector handle ways of dramatic change, but the greatest impact with made by our health care professionals, who have been on the front line caring for patients through out the crisis they have borne the greatest burden.
And I am man has dedicated even more resources to support them and understand their challenges.
We recently completed a survey of nurses across the country that provided further insight into their experience and intention to that end, we invited our colleague Dr. coal Edmondson Ammons, chief experience and clinical officer to answer any questions about what we are doing to support our health care.
Fashionable and our current engagement with clients.
Today, the outlook for the U.S. economy, and health care remains clouded coven 19 has spread and surge in states that were little affected three months ago.
Many health care organization have resumed the full spectrum of care with patient volumes in an uptrend, but still below pre crisis levels.
And then has adjusted to this dynamic environment and our business is positioned to better than ever to handle this demand volatility and capture long term growth opportunities.
With our country under pressure from a pandemic and social upheaval, it's in vitally important that am and demonstrate our commitment to our core values.
We are fortifying our actions supporting social justice and diversity goals with even greater urgency.
And then health care has a longstanding commitment to diversity equity the quality and inclusion our values inherently include the need to fight systemic racism and biases and during this important time, we've taken action to increase our investments in activities both internally.
And externally as one example, recently and extended financial support to 100, historically underrepresented businesses to attain diverse suppliers certification.
We have also amplified our sensitivity training and leadership development programs to foster and even more diverse and inclusive work for.
Our seven employee resource group had been critical and ensuring we're educating ourselves and taking specific actions as a leader in our industry, but also as individuals who want to do our part to affect positive change.
During this time of turmoil. We also find that our clients are maintaining their long term vision, despite the near term headwinds.
Our strategic accounts team has been highly engaged with health systems that are looking for more complete and robust solutions to their talent challenges.
They also want a strategic workforce partner, who is serious about social issues and collaborating to create more meaningful change.
In recent months, we were pleased to be awarded several new or expanded strategic relationship covering many of our service line and we are excited about the increased opportunities can make a difference on the front lines of health care.
Now, let's turn to second quarter financial results and business trends.
Revenue in the second quarter set another record high for the company at 608 million with adjusted EBITDA of 81 million.
Our nurse and Allied segment produced revenue of 444 million up 21% year over year with 13% organic growth.
Our largest business travel nurse staffing grew 41% year over year.
Allied staffing revenue was up 10% year over year due to last year's acquisition of advanced New for Allied was down 13% due in large part to weakness in physical therapy demand.
In the third quarter nurse and Allied solutions revenue is expected to be down approximately 10% from prior year.
Travel nurse staffing revenue is expected to be higher by 3% to 5% over prior year with lower volumes offset by higher rate and hours work.
Over the last six weeks travel nurse orders have arisen from a combination of a recovery in hospital census, and resurgence of cobot 19 activity in many state.
Current travel nurse orders are significantly above prior year.
Allied revenue is expected to be lower than prior year in the third quarter by 27% to 29%.
I like demand has picked up in the last few weeks, which we expect to drive improving volumes as we move through the third quarter.
Our physician and leadership solutions segment of 109 million, which was down 24% year over year within this segment locum Tenens saw a revenue decline of 25% year over year, driven by cancellations related to the pandemic.
Advanced practice revenue was up year over year, but that was more than offset by declines in other specialties.
More recently, we began to see some increased demand for other disciplines as non emergency care has continued to recover.
The second largest part of this segment, our interim leadership business had a revenue decline of 17% year over year in the second quarter.
Revenue for our permanent placement businesses fell by a combined 34% year over year in the second quarter as many search engagement were put on hold and new search needs declined.
Though business trends have stabilized, we expect third quarter revenue for physician and leadership solutions to be down year over year by nearly 30%.
Our third segment technology, and workforce solutions reported revenue of 55 million up 123% year over year, including the acquisitions a strategy video in February and before health in December.
Organic revenue was up 3% year over year, our Vms business grew 15% year over year in the second quarter with 5% organic growth.
Gratis contributed 28 million of revenue in the quarter and recovered more quickly than we had anticipated when we provided guidance.
After a slow start minutes build increased throughout the second quarter and exceeded pre covert 19 levels by in late June.
Our language interpretation services are particularly important at this time, because they provide critical support for at risk patient populations across the country.
We expect technology and workforce solutions revenue to be up approximately 140% year over year, including about 35 million from the strategy and be Fourhealth acquisition.
We expect organic revenue to be down slightly year over year in this segment.
As we anticipated and overall revenue declined from the second to the third quarter, we began taking cost savings actions.
As a result, even with the lower expected revenue, we anticipate that our adjusted EBITDA margin will remain above 13%. This kinda performance would not have been possible without the important technology investments we have made over the past few years.
Got a strategic shift toward total talent solutions that and then made over a decade ago.
We are continuing to make these important investments, including our digital capabilities that create a more positive experience for our clients and health care professionals and enable further efficiencies.
Beyond the third quarter uncertainties remain about the state of the U.S. economy health care demand and public policy. We can assure use. This however, the amgen team is committed to helping health care professionals and our clients navigate through this fast changing environment, bringing the strongest set.
Total talent solutions in the industry.
We along with our extensive network of strategic partners will continue to work tirelessly to meet the ongoing need for quality health care professionals.
Our amazing and team members are the lifeblood of these solutions and every day I am so impressed with their energy creativity and commitment even though we're all working remotely from one another we have actually grown closer as a team in these past few months <unk>.
I recognize how much everyone has been asked to change the way they do business and I want our remarkable team to know that their efforts are greatly appreciated and essential.
In addition, one of the many things I love about the and then inclusive culture, it's how supportive and engaged our family and friends are in our mission.
So I want to extend a huge things to the spouses partners parents children and other family and friends of our team members and of our health care professionals Youre support also makes a very positive impact and especial shout out and happy 10th anniversary to my wonderful has been slow.
Got who has been so supportive to me in the am and family I promise I'll be home at a decent time after our analyst calls to toast and to celebrate with you.
And a few minutes Kelly Landry and Dr. coal will join us for the acuity session, but for now I will turn the call over to Brian who will provide more insight into our financial results.
Thank you Susan the PUC anniversary and good afternoon, everyone.
Second quarter revenue of 608 million was.
Well above our guidance range due to outperformance in our nurse Allied and language interpretation businesses.
Got a segment level nurse and Allied solutions and technology workforce solutions performed better than expected.
While physician and leadership solutions was in line with their expectations.
Consolidated revenue grew 1% sequentially and 14% year over year.
On an organic basis revenue was down 1% sequentially and up 2% year over year.
Gross margin for the quarter was 32.5% down 100 basis points, both sequentially and year over year.
The gross margin decline was due to a mix shift toward lower margin staffing revenue and a reduced margin in the nurse and Allied segment.
Consolidated restaurant expenses were 137 million or 22.5% of revenue compared with a 122 million or 22.7% of revenue in the same quarter last year.
The year over year increase included about 10 million of additional as today from the acquisitions of Stratus video before health and advanced medical.
4 million of restructuring expenses associated with our cost reduction efforts.
4 million of integration related expenses.
And a $5 million increase in the earn out liability for the before health acquisition.
This was partly offset by a reduction expenses to align our cost structure to the lower expected revenue in the third quarter.
We expect our third quarter as you know run rate to be about 20% lower than the first quarter of this year.
We are very proud the aim and teams agility, while remaining focused on delivering great service to our clients in health care professionals in this unprecedented environment.
Second quarter nurse and Allied segment revenue was 100 was 444 million, 21% higher than prior year end up 5% sequentially.
On organic basis revenue grew 13% over prior year with strong growth in trouble broken travel nurse, partly offset by declines in allied staffing revenue cycle solutions and labor disruption.
Travelers revenue was higher by 41% with organic revenue up by 35% during the quarter.
Although second quarter travelers volume was relatively flat with prior year. The average bill rate was up more than 25%. An average hours worked were also higher due to covert lysine related crisis rate assignments.
Followed revenue was up 10 for 10% from prior year.
And revenue cycle solutions was down over 40% due to impact from the pandemic.
Nurse and Allied gross margin of 27% was 110 basis points lower than prior year and down a 150 basis points sequentially.
The year over year and sequential decline stem from a lower gross margin related to covert 19 assignments and the decline in revenue cycle solutions.
Year over year gross margin was also impacted from 11 million less labor disruption revenue.
Segment EBITDA margin of 13.8% was 60 basis points lower than prior year and down 20 basis points sequentially.
Second quarter physician and leadership solution segment revenue of $109 million was 24% below prior year and down 21% sequentially.
Gross margin of 36.4% was 80 basis points lower than the prior year end down 30 basis points sequentially due mainly to a lower mix of permanent placement revenue.
Segment, EBITDA margin was 14.1% up 90 basis points from last year, and up 350 basis points sequentially driven in large part by cost savings initiatives and lower bad debt expense.
The technology workforce solutions revenue was 55 million in the second quarter up 123% year over year and 37% sequentially.
Organic revenue was up 3% both year over year and sequentially.
Gross margin was 68.7% lower year over year end sequentially due to the acquisition of Stratus video.
EBITDA margin of 39.5% was also down year over year because of the Stratus acquisition, but was 150 basis points higher sequentially.
Consolidated second quarter, adjusted EBITDA of 81 million was 21% higher year over year, driven by acquisitions and better operating leverage.
Adjusted EBITDA margin of 13.2% was 70 basis points higher year over year, and better by 90 basis points sequentially.
We reported net income of 22 million diluted earnings per share a 47 cents in the second quarter.
Adjusted earnings per share was 83 cents compared with 77 cents in the year ago quarter.
Our GAAP income tax rate in the quarter was 17% and was approximately 32% on an adjusted basis.
The low GAAP tax rate was driven by the effects of non taxable investment gains on our deferred compensation plan.
Days sales outstanding at quarter end was 55 days and eight day improvement from the same quarter year ago, and two days better than last quarter.
The vast majority of our clients have continued to pay according to normal terms.
As of June Thirtyth cash equivalents stood at 43 million and we ended the quarter with $973 million long term debt at a leverage ratio of 2.7 times to one.
And since quarter end, we have paid off an additional $45 million of revolver debt.
Capital expenditures in the quarter were 6 million.
Second quarter operating cash flow was 77 million driven by several factors, including the lower DSO and the deferral of tax payments from the cares Act.
Turning to third quarter guidance.
Endemic continues to create a volatile demand environment as clients deal with a cross currents of an uneven recovery in healthcare utilization along with more recent increases in cobot 19, hospitalizations across many parts of the country.
We expected economic and labor market challenges will also influenced the healthcare industry.
These uncertainties are reflected in our third quarter outlook, and we expect them to continue at least through the remainder of the year.
Within our nurse and Allied segment travel nurse revenue is expected to be up 3% to 5% over prior year.
With an expected volume decline of over 10% being offset by higher bill rates and hours worked through covert related placements across the country.
Sequentially, we expect travel nurse volume and bill rates to both decline about 10%.
Valid revenue is expected to be lower than prior year by 27% to 29%.
Overall nurse and Allied revenue is expected to be down about 10% from the prior year.
Perfect Vision and leadership solution segment, we expect third quarter revenue to be down nearly 30% from the prior year.
Within the technology and workforce solutions segment, our language interpretation business has experienced steady growth and bill will minutes since may which we expect to continue through the third quarter.
Our Vms and scheduling predictive analytics businesses grew year over year in the second quarter and recent trends indicate similar performance in the third quarter.
Based on these trends, we expect segment revenue to be up about 140% year over year.
Overall, we are projecting third quarter consolidated revenue to be in a range of 510 to 525 million.
Third quarter gross margin is projected to be at approximately 33% to 33.5%.
Third quarter operating margin is expected to be above 7% and adjusted EBITDA margin is expected to be greater than 13%.
Other third quarter estimates include the following depreciation expense of 7 million.
Non cash amortization expense of 15 million.
Stock based compensation expense of 4 million.
Interest expense of 10 million.
Great and expenses of 6 million and an adjusted tax rate above 30%.
And now we'd like to open the call for questions.
Ladies and gentlemen in order to ask a question you will need to press Star and then one the on your telephone please standby, where we can both you and they roster.
Our first question comes from AJ Rice with credit Suisse. Your line is open.
Hi, This is rob moving on to for AJ Rice.
Just wondering if you guys could talk to the recovery in.
Regions, where you were not seeing co with surges. What is demand are you seeing demand started to recover in July in early August in the regions, where things have come down a bit.
Hi, Rob.
I'll have both Kelly and Landry weigh in on that on Kelly from the client perspective, but also Landry, maybe more specifically for nursing and Allied at the short answer. However is yes, we are seeing recovery of non coal vid related orders.
Cost most all of our businesses I'd say less evidence in our permanent placement businesses, but across nursing Allied and locum, we are starting to see the noncovered orders return, albeit at a slower trajectory we are seeing.
Some recovery, which is why we now have a combination of both the coated related surge orders and a growing base of what we would consider to be more normalized orders, but I'll ask Kelly Onest away and then Landry yeah, just to add to that thank you Susan we.
Adding onto her perspective, just from a market perspective, we have been doing some modeling. In addition to those areas that have had a high demand we've been modeling some other areas and we're expecting to see regular I would say on pre coated volumes and hospitals, particularly getting up to now.
90% to 95% levels of volume.
Tober November so with that is coming the normal demand as Susan said, both in our contingent staffing needs as well as in our on Perm hiring and we are seeing in some of those markets on that the permanent hiring has resumed on to higher levels are getting back to pre covered levels as well.
Yes, I did landry.
I would just add to that the the area, where we saw the highest need in the first surge was New York and specifically New York City.
Then in that area right now as Susan and Kelly mentioned.
We are seeing new demand a new placements in areas such as like a lower.
But even say I see you are our travelers on assignment is still a.
Year over year.
In New York, and specifically New York City So.
I think that says a lot of males.
The permanent nurses that were there.
Do you still need support from our seed nurses in that area.
Okay.
Great.
Thank you and then just on the follow up.
When I look at the Q3 guide I see rental revenues are coming down in that 7% to 10% range, but your margin is improving can you kind of talk that puts and takes on how you're getting that margin progression even in the headwinds to revenue.
Sure. This is Brian HERA.
If you look at the guidance, we gave for EBITDA margin, we said over 13% so.
That would be relatively consistent with what we reported in the second quarter getting there kind of slightly differently. The gross margin, we do expect to be up a bit in the third quarter. It's in part driven by just the change in the mix as I mentioned in her prepared remarks, the margin was a little bit lower than we expected in the second quarter as we had a higher mix of nursing revenue.
As that is coming down as a percentage of the total revenue in the third quarter. It did naturally has a bit of lifting the gross margin as we see the physician and leadership and technology workforce segments that have higher gross margins.
Increase the consolidated margin and then as we gone through some cost reduction efforts, we've talked about and so although we are losing a little bit of operating leverage the teams done a fantastic job of rightsize the expenses to to match the revenue and so we all that we lose a little bit of operating leverage we're making that up with a higher gross margin.
So we end up at a pretty similar EBITDA margin level quarter to quarter.
Great. Thank you guys really appreciate it.
Our next question is from Tobey Sommer with Truest Securities. Your line is open.
Thank you I was wondering if you could.
Give a comment on what you're seeing from a supply standpoint across your.
Your main categories.
And I'll pause there as well.
Thanks, Tobey its a great question because as you can imagine supply is critically important now, particularly in nursing, where we are at all time high levels of demand and I mean that literally in the history of the company and so the supply that we saw come into the engine.
History and into our business in the early.
Part of the second quarter has been very helpful. As our recruiters continuing to engage with them, but we have to continue to recruit new candidates and we are seeing increased applicants in other areas like in overcome some of that displaced individuals that perhaps have.
Been forced to rethink their career within physician and advanced practice or even allied has helped bring in more supply, but I'd like Landry to comment a little debt on the nursing supply in particular, because the team has done a really great job of making sure that we leverage the investments.
That we've made including some of the digital investments we've made it like in Amazon passport. So Landry you want to add little more commentary around that.
Yes, sure Hey, Toby.
Thats upon numbers look really good specific to travel nursing.
Every month this year, so far in 2020, our new applications have been.
Prior year end as well as just over our goal that we set for ourselves at the beginning of the year.
A lot of that has to do with some of the investments that we've been making loans thats in our like digital or mobile initiatives.
Specific to the am and passport that's of mobile App, that's really taken off for us and it's kind of proven that conditions want to work with us digitally and they can do things such as search jobs on there.
They can self select a certain jobs. They can review there are weekly pay.
And other self service things like a floating or credentialing documents.
So it's really helping with the whole onboarding process, but just in general on a lot of those initiatives and the digital initiatives specifically in the mobile.
The investments that we've made is really helping drive supplied to us.
It Tobey I think it this might be a really great opportunity for Dr. Edmonson to weigh in on the nurse survey that I referenced and for the sentiment of nurses in the level of burn out and how they're thinking about their career going forward because that effects if not just now.
But it affects the workforce for our clients going into the future. So call. If you wouldn't mind Pratt paying a few words about that.
Thank you Susan.
What we found as we were serving nurses in the field was 87% of them plan on continuing to work in nursing.
We did see that about 26% of those that are currently working our planning on making some kind of a change in the next year that could be a new specialty a change in their status.
Even potentially their employee or their practice settings, but we think about that is that it really represents some nice stability in the workforce, but it also has some potential disruption for us in terms of the supply I'm also really encouraged that we continue to see the nursing school enrollments be strong most programs are really reporting an increase in enrollment.
And they're working really hard to increase capacity in their programs because as we know last year 70000 qualified nursing students were turned away based on a lack of faculty and the shortages within that industry. So we're very encouraged by what we're seeing on but we also realized that this is one sample that gives us kind of where we are today.
And as we go forward, we did see deferring workforce trends as well. So it's really important we pay attention to the wellness of our clinicians and we also make sure that we're taking care of folks who are on assignment as well as making sure that we have the ability to make their experience great was aimed at which we do.
Thank you.
Could you comment on what you're hearing from customers about there.
Intention to utilize Tim perhaps.
Penetration within their workforces.
Specifically in the MSP book in maybe you could update us on how how big that is for your various lines of business.
If you're able to stitch together any of your technology services, including Stratus into your MSP.
I Tobey its kelly be happy to address I'm all of those points first of all.
We continue to see a strong need coming from particularly our most strategic clients not only to support current covance needs. But also there is a level of stream. That's on the current workforce even for some of those organizations are start coming out of coded where they've had hi, hi overtime.
And they're just generally have some levels of burn out so and they're coming into now a more seasonal on time, where they have higher demand. So we are already I'm working with some of our most strategic customers on their future a winter orders and their needs and they are very similar if not higher than what we saw.
And prior year, so we believe that demand, particularly from our MSP clients is going to continue.
They've been I'm extremely and appreciative of the kind of partnership they've had with us our ability to fulfill.
Dr. As Dr. call mentioned the level support that Weve continued to provide our clinicians while they're on assignment supporting their safety, there mental health and wellbeing and additional clinical support is really appreciated by our clients and we have been able to extend.
Additional services to them throughout and we have a very.
Very good place around our new renewals for this year and expansions many of which the have expanded into providing additional services like strata and in some of the new our components of our total talent management portfolio. So I would say, we're seeing uneven closer alliance and.
Dependency and much deeper relationships and partnership with our MSP clients were very very encouraged about the.
The trajectory there.
Thanks last question for me, maybe a numbers one for Brian.
What is all of us a better than expected EBITDA going to due to the leverage ratio and when do you think you could have it back down to two times.
We've got a better ways to go to get the two times you were very very pleased with.
Where we sit today in terms of just our our credit facility overall in the maturities of our of our dad and do you see no. We were a little above right at three times at into last quarter. So with the debt reduction during the quarter, we got down to 2.7. It I'd expect will be down closer to two and a half times by the end of the year, maybe a little bit lower.
On that.
That it'll it'll take a bit more time to get to two times, but you know we're in a very healthy place in the balance sheet and field feel good about it.
Thank you.
Our next question is from Jeff Silber with BMO capital markets. Your line is open.
Thanks, So much based on your comments earlier on the volume central getting back to 90% to 95% by October November.
Is it safe to say that you expect three to to be the bottom in terms of revenue.
Well the need to fourth quarter wouldn't normally be a sequential uptick for us, particularly in nursing in as Kelly eluded, where we're starting to see the winter orders come in at at a good rate again sort of as good if not in some case.
Leases, a little bit better than last year, and we're adding on many new clients and so we would expect that can contribute to the fourth quarter you only hear hesitancy in my voice because you know, it's just hard to tell in this environment in the volatility as what the actual volumes might be but I also think.
We are going to continue to have surges across the country. That's absolutely what we're hearing from.
HHS as well as from our clients. It's I think we have to be ready for both we have to be ready for resumption of normal care in normal settings, as well as cobot patients that might have a spike in demand.
Well, that's what we're anticipating right now.
Right. That's really helpful. I appreciate that you all talked at the beginning about.
The fact could you stand up maybe investments in technology being able to to have I will say a smooth.
Kind of transition here, but sooner than most.
Do you think once we get through this that the business might be structurally different than it wasn't the past potentially getting you back towards that I can 14% margin.
Margin goal that you talked about earlier. Thanks, Yes, we do think Thats still a very achievable goal for us and if anything this crisis has forced us or enabled us to perhaps make some of the investment even faster because we needed to move quickly to get automation in place and.
We saw what was possible and the benefit that could be achieved in so a lot with accomplish already in the first part of this year and we absolutely have our sights set on accomplishing a lot more in the next six to 12 months inciting based on those investments, which create efficiency. It's was just our continued improve.
Isn't a processes and making sure that were streamlining things internally as well as externally with our clients should should lead us towards that we're not putting a timeframe on it yet, but I actually have even greater confidence in achieving that goal now or at least sooner than I did at the beginning of year.
Okay, Great that's really helpful. Thanks, so much.
Thanks.
Our next question is from Brian Thanks, Len with Jefferies. Your line is open.
Hi, good afternoon.
Just a follow up on your.
The answer to just first question. So I know your visibility kind of limited, but if we're thinking about continued surges right into next year and do you feel like that's a good baseline to be thinking about in terms of the stress. So the business. It will build audit from what we're seeing right now in terms of Q4 demand for travel nursing.
Yes, so I want to make sure I understand the question. So if we have a kind of undercurrent of normal growth and a resumption of normal services and as Kelly alluded to that predictive analytics said that we put in place I'm using our clients in for me.
Asian would suggest that we'd be back to those levels and on top of that you would have cobot related needs as well I don't know that what it means that we'd be fully back to normal in all of our businesses by the first part of next year, but we would be moving in that direction. Some such as permanent placement are.
Absolutely going to take longer to achieve that and I do think even in Locums for example, where there's been greater disruption it could take longer but in other areas such as nursing and Allied I think we're seeing the signs of a earlier recovery.
I appreciate that and my second question you know over the years as people look at your story what are the things that you guys always said is that.
During the MSP angle to the story.
The way to reduce risk from whether its economic shock or external risks right and as we sit here. This is really the first quarter, where you had a big test in terms of macro disruption to your business with co bid.
You look at it do you think you believe that the strategy with MSP and and growing that side of the business has worked in terms of shielding.
Were visits from increased volatility.
Yes, I absolutely do in fact, if you look at the second quarter in particular, where our clients of course, our emmis peak clients needed us.
So desperately we were able to fill their jobs and certainly we had a great help from our strategic partners in affiliate vendors and they also deserve a lot of credit for ensuring we got clinicians to the front lines. They were fantastic collaborative partners, but and then.
Also really stepped up to the plate in fact, we had our highest levels of direct fill or capture a across.
Most of our businesses in particular nursing, but overall, we hit a high point for the company in terms of our direct capture of MSP revenue. So hopefully that helps answer your question.
Thank you. So my thought okay. Brian This is Brian welcome back up walk on the other thing I'd. Just add is you know MSP is really just part of our total talent strategy. So we think about these clients now we can help them. It's just only one element now so we've been that's all I mentioned earlier really I'm excited about our ability to add other service lines, where we can.
Let them as well, whether its permanent services or a predictive and scheduling capabilities now is stratus as well so we're seeing.
Hi involvement Maher from those clients in wind to engage further beyond just that traditional MSP for contingent labor and finding other ways that we can help them deliver great patient care and be more efficient at the same time. The other thing I think for us.
As you look at the DSL coming down in the strong collections. The fact that we have more of our business through some of them you know that really strong large systems in the country. I think is also a benefit for us in terms of the predictability of revenue and ability to collect that as well.
Awesome. Thank you.
Well again, ladies and gentlemen, it is star one to queue for questions.
Ladies and gentlemen, this does conclude the Q Napier I'll now turn it back over to Susan Salka for any closing remarks.
Well. Thank you everyone for joining us today were very grateful for your time and your support of and then our purpose in mission across the organization Hope you have a wonderful evening and of course as always be well.
Ladies and gentlemen, this does conclude todays conference call. Thank you for your participation and you may now disconnect.
Okay.
[music].