Q1 2023 AMN Healthcare Services Inc Earnings Call

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Yeah.

Okay.

Good day, and thank you for standing by welcome to the H M M.

Health care first quarter 2023 earnings call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then hear an automated message.

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Please be advised that today's conference is being recorded I would now like to hand, the conference over to our speaker Randle Reece.

And your director of Investor Relations.

Go ahead.

Good afternoon, everyone welcome to Almond Healthcare's first quarter 2023 earnings call.

A replay of this webcast will be available at IR Dot men's health care Dot com following the conclusion.

Paul.

Various remarks, we make during this call about future expectations projections trends plans events or circumstances.

Forward looking statements.

Statements reflect the company's current beliefs based upon information currently available to it.

Our actual results may differ materially from those indicated by these forward looking statements because of various factors and cautionary statements.

Putting those identified in our most recently filed forms 10-K and 10-Q.

Our earnings release, and subsequent filings with the SEC.

Company does not intend to update guidance.

Any forward looking statements provided today prior to its next earnings release.

This call contains 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 IR Docs, and then health care Dot com.

On the call today are Kerry Gress, Chief Executive Officer, Jeff Knudson, Chief Financial Officer, Andrey <unk> group, President and CEO of nursing and Allied solutions, and James Taylor, President and CEO of physician and leadership solutions.

I'll now turn the call over to Kerry.

Thank you Randy and welcome everyone.

<unk> continued the strong partnership with our clients and clinicians in rebuilding a post COVID-19 sustainable workforce, which is evident in our solid first quarter results reported today.

The industry landscape is changing and we are moving quickly to bring clients the breadth of our solutions to help them with their workforce challenges.

The health care workforce landscape was shaken by the pandemic clients.

Clients emerged seeking more sustainable and controllable solutions to achieve their growth targets, while balancing quality and cost.

We see clients more open to change looking at new ideas that could help them create a more sustainable workforce.

Healthcare professionals are also in transition focusing on control flexibility and well being in their work and open to new options to achieve those goals.

All of this change is complicated by the continued shortage of healthcare professionals, which we expect to be a challenge for some time.

Our latest physician and nurse surveys showed rising numbers of professionals, who plan to change jobs or leave the profession.

We expect that the direction changed in the market. This year and we are making decisive moves to operationalize, our growth plans, including technology and analytics to enable more comprehensive and sustainable workforce solutions, greater client focus and enhance speed and efficiency and bringing all our solutions together to benefit our.

Clients and clinicians.

We said last quarter that our solutions that would become even more comprehensive and differentiated and it is happening.

In recent weeks our leadership team came together to develop a 12 month plan to accelerate the evolution of our businesses, starting with nurse and Allied.

Were moving swiftly to the implementation phase with changes that will boost our speed to deliver provides a unified sales experience our clients desire.

<unk> our value proposition.

To drive further engagement with a broader pool of clinicians.

We already built a amen passport into the top rated at most powerful mobile app for nurse job search and career engagement, enabling our recruiters to grow their clinician base more effectively.

And then passport is the only app that combines customized job search and engagement AI job vaccine Credentialing self service and kind of pay.

We will continue to elevate passport to be a digital staffing solution for all health care job seekers at any stage of their careers across all businesses.

To help our clients with workforce management.

[noise] out several new features this year with more.

Just shipped one which we believe is the only scalable enterprise Vms platform need for health care.

We have modernized the architecture of our Vms platforms, using advanced cloud services, and newer web and mobile technologies, bringing a fresh user friendly interface.

Our data cloud for predictive and advanced analytics is powered by Snowflake and other AI technology partners we have.

Also advanced our capabilities to integrate with our clients' HR system to drive digital and automation efficiencies.

We have a strong history of flexing our cost structure to meet changes in demand.

And this current demand environment, we are closely managing our resources, while also sustainably scaling our cost base through platform integration and automation across a M.

We believe these efforts coupled with a favorable revenue mix shift will sustain an adjusted EBITDA margin above 15% for the full year.

Our priorities in capital management remains focused on disciplined growth. This year, we plan to spend approximately $90 million on capital expenditures and prioritizing the key technology and operational initiatives I outlined.

We are also announcing an accelerated share repurchase program given the long term growth opportunities we see ahead.

Our team remains focused on M&A opportunities as well and we are confident in our ability to continue to use M&A to strengthen our solution set and enhanced shareholder value.

Finally, new leadership will bolster our accelerated transformation with three extremely qualified executives reporting directly to me leading areas that empower our delivery of tech enabled workforce solutions and our focus on client Centricity and growth.

Meredith Lapointe is taking a newly created role as chief business officer responsible for strategy workforce optimization marketing and client relations.

Meredith is well known for helping build the health care practice at Mckinsey for the past 16 years.

She knows the best workforce strategies being implemented today and is uniquely qualified to foster strategic conversations with executives across the health care sector.

Meredith withdrawn and then by our powerful set of workforce solutions and technology the opportunity to create value in our client partnerships.

And the strong values and culture of our organization.

Pat recall is coming to an end to serve as our chief growth officer.

Pat's background as a senior strategic sales leader with people to Dato Ronstadt Beeline and other top players already brought him recognition as one of the staffing industry's most influential leaders.

Pat is the ideal leader to develop and operationalized and enterprise wide growth acceleration focused around innovative technology and services.

Similar to our other two segments, our technology and workforce solutions segment will now have a dedicated leader.

This important segment will be led by Mr. <unk>, who served most recently as our chief strategy and experience officer, including business strategy and M&A.

Meredith Pat and Sean are the leaders, we need to accelerate our progress and key client and tech driven solutions to become a central partners, enabling the future of care.

Now I'll turn the call over to Jeff for the details about our results and outlook after which I will return for some final comments.

Thank you Carrie and good afternoon, everyone.

First quarter revenue of 1.126 billion was near the high end of our guidance range with the technology and workforce solutions and physician and leadership solutions segments performing above expectations.

Consolidated revenue was down 27% from the peak quarter of the pandemic last year and flat sequentially.

Gross margin for the quarter was 32, 8% up 80 basis points from the prior year period.

Due to a mix shift in revenue towards higher margin businesses.

Sequentially gross margin decreased 50 basis points, primarily driven by the nurse and Allied solutions segment.

Consolidated SG&A expenses were $206 million or 18, 3% of revenue compared with 258 million or 16, 6% of revenue in the prior year period, and $219 million or 19, 5% of revenue.

In the previous quarter.

The decrease in SG&A expenses year over year was primarily due to our efforts to adjust expenses in the current demand environment, along with less variable compensation with lower revenue.

Sequentially lower credit loss expense variable expenses and legal expenses were the primary reasons for the decrease.

Adjusted SG&A, excluding certain nonrecurring expenses and stock based compensation expense was $191 million in the first quarter or 16, 9% of revenue compared with 239 million or 15, 4% of revenue in the prior year.

<unk>.

The increase in adjusted SG&A margin year over year was mainly driven by lower revenue offset in part by our expense management initiatives.

In the first quarter nurse and Allied revenue was $824 million down 33% from a record high of the prior year period and flat sequentially.

Average bill rate was down 22% year over year and sequentially was up 3%.

Year over year volume was down 11%.

And average hours worked were down 3%.

Sequentially, both volume and average hours were flat.

Travel nurse revenue during the first quarter was $593 million, a decrease of 39% from the prior year period and up 2% versus prior quarter.

Allied revenue during the quarter was $196 million down 8% year over year and flat with prior quarter.

Nurse and Allied gross margin during the first quarter was 25, 9%.

Down 30 basis points from the prior year period, and down 70 basis points sequentially.

Year over year gross margin was lower primarily due to lower average hours worked.

Quarter over quarter higher pay packages and less labor disruption revenue weighed on the margin comparison.

Segment operating margin of 13, 8% was 210 basis points lower year over year due to lower operating leverage.

Sequentially operating margin increased 110 basis points, primarily reflecting lower credit loss expense.

Physician and leadership solutions revenue in the first quarter was $166 million.

Decrease of 8% year over year and 1% sequentially.

Locum tenants revenue was $107 million.

Down 5% from the prior year or growing by 11%, excluding pandemic related assignments and up 3% sequentially.

Interim leadership revenue of $40 million decreased 9% from the prior year period and was down 11% from prior quarter.

Search revenue declined 16% from prior year and was flat sequentially.

Interim and search revenue were down from prior year due to lower demand as hospitals focused on expense management.

Gross margin for the physician leadership solution segment was 35, 2%.

Up 20 basis points, both year over year and sequentially.

The slight margin increase year over year was primarily due to improved gross margins for interim and locum tenants, partially offset by mix.

Sequentially margin growth was driven by the interim business.

Segment operating margin was 15, 1%, which increased 370 basis points year over year, mainly driven by lower SG&A expenses.

Sequentially operating margin decreased 160 basis points, primarily due to favorable prior quarter professional liabilities and other adjustments.

Technology and workforce solutions revenue during the first quarter was $136 million.

6% year over year and up 2% sequentially.

Within this segment language services generated revenue of 62 million, an impressive increase of 25% year over year and 6% quarter over quarter.

Vms revenue up $54 million decreased 28% year over year and 2% sequentially.

Segment gross margin was 71, 4% down 530 basis points from the prior year period, and down 190 basis points sequentially.

The decrease in gross margin year over year was primarily attributable to lower Vms revenue compared with the record high from a year ago.

Sequentially gross margin was lower driven by a mix shift to language services.

Segment operating margin in the first quarter was 49, 3% a decrease of 510 basis points year over year and down 90 basis points sequentially.

Consolidated first quarter, adjusted EBITDA of $180 million decreased 30% year over year and increased 3% sequentially.

Adjusted EBITDA margin of 15, 9% was 70 basis points lower year over year, and up 40 basis points sequentially.

First quarter net income was $84 million down 42% year over year and up 3% sequentially.

First quarter GAAP diluted earnings per share was $2 <unk> in the quarter.

Adjusted earnings per share for the quarter was $2 49.

Compared to $3 49 in the prior year period and $2 48.

In the prior quarter.

Days sales outstanding was 55 days in line with the prior quarter and two days lower than prior year.

Operating cash flow for the first quarter was $43 million and capital expenditures were $17 million.

As of March 31, we had cash and equivalents of $29 million long term debt of $990 million, including a $140 million draw on our revolving line of credit and a net leverage ratio of one three times to one.

Today, we announced that we intend to enter into a $200 million accelerated share repurchase program in the coming days.

Year to date, we have bought back two 4 million shares of stock for $225 million, excluding brokerage fees and excise tax on share repurchase.

As of today $427 million was outstanding on the repurchase program authorized by our board of directors.

Moving to second quarter 2023 guidance, we project consolidated revenue to be in a range of $970 million to 1 billion down 30% to 32% from the prior year period.

Gross margin is projected to be 33, four to 33, 9%.

Reported SG&A expenses are projected to be $19, one to 19, 6% of revenue.

Operating margin is expected to be 10, six to 11, 2%.

And adjusted EBITDA margin is expected to be $15 four to 15, 9%.

Average diluted shares outstanding are projected to be approximately $39 million.

Additional second quarter guidance details can be found in today's earnings release.

Last quarter, we talked about 2023, returning to a normal seasonal pattern after a greater than seasonal drop in second quarter revenue.

The pullback in spending by hospitals intensified in recent months.

The level of travel nurse demand in March and April lead us to expect a third quarter to be our lowest revenue quarter of the year.

Travel nurse demand improved modestly in each of the past four weeks.

We expect to finish 2023 with approximately $4 billion in revenue and an adjusted EBITDA margin of approximately 15, 5%.

This view assumes modest improvement in demand from current levels.

And now I'd like to hand, the call back to Gary.

Thank you, Jeff before we move to Q&A I want to recognize the great work that our health care professionals and team members are doing on the job every day.

Thank you all for your dedication and your consistent excellence.

I also want to give special recognition to our nurses as we celebrate national nurses month.

Recently, our healthcare leadership solutions team known under the AMB East Smith brand was recognized by modern healthcare as the industry leader and executive search.

Our congratulations go out to the whole leadership solutions team, which is well positioned to help clients implement their own change effort in the fast moving post pandemic environment.

The foundation of our company is our shared values, which are demonstrated in our second annual ESG report.

And this is not in your reporting exercise.

We demonstrate how responsible governance strengths that our health and wellness diversity equity equality, and inclusion and sustainability across AML and our community.

<unk> is an industry leader in ESG performance and disclosure and that's something we are very proud of.

Now operator, please open the call for questions.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

To withdraw your question. Please press star one one again, please standby, while we compile the Q&A roster.

Our first question comes from Kevin Fischbeck of Bank of America. Your line is now open.

Great. Thanks.

I appreciate the color on the seasonality through the rest of the year I guess.

Part of the reason why you were expecting.

Some improvement with because you felt like there was.

Kind of a disconnect I think between kind of the orders that were coming in and it's fundamental demand that their clinicians. We're seeing I mean do you still feel like that is there and if so why is it persisting a little bit longer than you thought.

Hey, Kevin.

Thanks for the question.

What I would say overall and particularly if you look at some of the public comments.

The Ceos of some of the largest health care systems have said over the past two weeks I think we were all going into this year, knowing and frankly, we are partnering with our clients to reduce spend on a portion of their workforce that had gotten very escalated in the tail end of the pandemic in the first quarter of.

Last year, so that was something we were doing in partnership.

We worked through that in the last half of last year and into the first part of this year.

So we think we've made progress I think again, if you hear the public comment that some of those.

Hospital executives will say as well as what we're seeing with clients.

Think it is going to continue to be an area of focus from a management standpoint, but we're now getting to the end of how do we really start thinking about how we build our workforce more sustainably in more holistically to grow.

Okay.

I guess, we're hearing.

If you are seeing a bit more about customer churn you mentioned I guess, a little bit that customers are looking for new solutions and it sounds like you are trying to respond to that do you think or do you expect.

Additional contract losses from this type of valuation from the customer base or do you see that there's an opportunity to gain share.

Where are you or does your guidance assume any puts or takes on that dynamic. Thanks.

Yeah.

Let me kind of step back and talk a little bit about what we're seeing in overall market dynamics because the.

The same dynamics.

Reflect clients, who are coming to us.

As potentially looking for solutions.

Away from US overall clients are really sticking their heads up post pandemic.

And looking at how theyre going to rebuild their workforce for the future and so as I mentioned in my opening comments a minute ago. The focus really has been over the past year about how do we really think about cost management and getting cost work for workforce costs into a sustainable level, we're starting to see.

And now of how do I really think about building a sustainable workforce for the future and so we are seeing clients be very open to new ways to do that and so what this means is we have.

Probably the biggest pipeline.

From a depth and robustness standpoint that our team has seen of new opportunities. We've also had clients who have gone to new solutions and so the things and the themes that clients are looking for are they want transparency control and sustainability.

There's not one thing that clients are looking for in terms of.

The change that they want to make it very specific to their starting point and the type of control that they potentially want over their workforce and how theyre going to build their workforce.

Biggest part of our pipeline is MSP. So we're continuing to see a tremendous amount of strength and interest in <unk>.

This P program overall.

And what I would say when we think about the evolution of how clients are thinking.

If a new client comes on to one of our platforms typically their incumbent it could still be very involved in serving them in the future as a supplier and the same thing would be true. If we had a client where we were one of several MSP and they were consolidating that we could still serve.

As a supplier or be part of the solution set so I would say overall when we look at our solutions our scale our brand reputation our team we feel like as clients are looking for sustainable total talent workforce solution.

That type of environment tends to favor us.

Alright, great. Thanks.

One moment for our next question.

Our next question comes from Trevor Romeo.

William Blair Trevor Your line is now open.

Hi, good afternoon. Thanks, so much for taking the questions first one for me is I. Appreciate the commentary you just provided about Q3 kind of being the lowest revenue quarter of the year I was wondering based on the order activity that youre seeing today, if you could kind of parse that out into your expectations for sequential bill rate and volume trends.

Throughout the rest of the year.

Sure Trevor this is Jeff.

So if we just take a step back I would say that our outlook on balance for physician and leadership solutions and for Tw.

In line with our prior view.

And then within nurse and Allied.

The nursing business, followed the trend line, we anticipated, but the industry wide demand ended up lower than we expected and so that's what now leads us to believe that Q3 will be the lowest revenue quarter of the year for the nurse and Allied segment, approximately 10% lower than Q2.

You can think about that pretty evenly split between bill rate and volume and then we would expect as the winter needs orders.

Roll in into the fourth quarter timeframe that we would see a sequential increase in volume in the fourth quarter within nurse and Allied and bill rates would generally be flattish over Q3 levels.

Yes.

Okay, Great. That's really helpful. Thanks, and then just for the follow up I had a question on kind of Boomerang nurses, who had left the hospital during the pandemic only to come back to permanent roles for us.

An article that's on the news recently highlighting that dynamic just kind of curious to hear what youre seeing and hearing from our clients on that topic, given that the travel markets cooled a bit and the economic environment might be driving some nurses back the permanent work.

Yes, Trevor this is landry.

It's pretty hard to measure whenever the nurses are going from a travel assignment to permed float pool to per DM et cetera. We of course have seen similar reports that you've probably seen where hospital hiring is up a little bit but the attrition numbers are are still pretty high so.

Still a lot of churn and turnover that we're seeing.

Maybe I'll just touch on what we're seeing on our own supply and the interest in and working temporary contracts. So.

That flexibility that travel.

Provided these professional is still very attractive to them.

Our new applicants in the first quarter, they were lower than Q1 of prior year, but a lot of that is because Q1 of prior year was the peak in demand in the peak in bill rates.

And then our new applicants hunting new applicants they have been flat for four consecutive quarters now and they are well above our 2019 levels. In fact, there are about two times, what they were before the pandemic. So that interest is definitely there.

Really two pieces to that equation one is the interest they really like the flexibility of working contract.

And then the second thing is a lot of the investments that we've been making.

In our pipeline so our mobile website, and then path toward all of those are paying off its allowing clinicians to be able to find is a lot easier to be able to apply for us easier and faster specific to Amgen passport. It continues to be a success story for us it is.

The number of users that are on the platform continues to grow it is really really strong engagement.

We went to the App store.

See that it has a star rating of $4 seven out of five so really really high and it has over 15000 reviews, which is well above any other competitive back out in the marketplace.

Alright, that's great to hear thank you very much.

One moment for our next question.

Okay.

Our next question comes from Brian <unk> of <unk>.

Jeffrey Your line is now open.

Hey, good afternoon, guys, maybe I'll follow up on that.

Last question.

Q3.

When you think about the business going forward do you think it's right to think that this is basically the bottom and I know you said you've seen some inflection or stabilization in the last few weeks and demand maybe just curious how you're viewing demand in bill rate trend.

We look into next year.

Yes, Brian so each of the last four weeks, we have seen travel nurse demand increased slightly and we would expect that to continue through.

Through the June time period and so.

Sure.

As we look out into Q3 and Q4.

The $4 billion of revenue for the full year that.

That would imply roughly one point just under $1 9 billion.

In the back half at just above 15% adjusted EBITDA margins and we do think Annualizing that back half is a good base to think about the business into 'twenty four and beyond.

Okay that makes sense and then maybe shifting gears a little bit.

The locums business and the Allied side of the business I mean anything we should be thinking about in terms of.

First of all you are seeing and then maybe any factors that could drive some acceleration in growth and demand for those non nursing.

Locals business.

Thank you Brian for the question. This is James will speak to the local side of the marketplace. Welcome Tuesday, a good new story for US you look at their demand is still 50% higher than 2019 and pre COVID-19 levels.

Do you think about our business our business.

<unk> growth is high single digits year over year, our fill rates are up quarter over quarter. Our book spreads are up quarter over quarter and also year over year.

From a Q2 standpoint, we still think that we expect to have very solid growth going into next quarter and also more profitable growth within inside of the local marketplace.

We're looking at it we're very laser focused on the demand that's out there, but we want to be profitable.

<unk> growth not just any growth. So we're laser focused on that and youre able to see that in some of the results to Jeff read out earlier.

Yeah, Hey, Brian It's Landry I'll hit on Allied.

I guess first off on the on the demand demand in Allied is really strong.

More than double what it was before the pandemic. So we're really excited about that there is a little bit of a mix change in there.

Where I would say a slight headwind on volume because you've got the specialties that are tied more towards COVID-19.

They are coming down and kind of hurting the year over year comp a little bit.

This would be things like phlebotomy respiratory therapist in med Tech.

But then it's all offset by really good strength that is tied to therapy, which is usually PTO and speech.

As well as imaging, so really excited about the demand the team's performing really well up against that demand.

It's certainly an area that looks good as we progress through the rest of the year, but then I won't go into detail unless there's another question on it but I would also call out our international business businesses are performing really well.

As well as our schools business.

And the overall comments that I would make which I think your question really high.

Highlights is one of the core positioning for us with our clients is how we help them holistically across all of their clinician need.

And I think when you hear the comments that both James and Landry talked about I think its very reflective of the strong partnerships that we've built with them.

Really being able to help them serve their patients and continue to grow their businesses and their organizations.

Awesome. Thank you guys.

One moment for our next question.

Our next question comes from Jeffrey Silber of BMO capital markets. Your line is now open.

Thank you so much.

Spoke earlier in terms of working with your clients to help them manage their own costs. I'm. Just wondering if you can give us a little bit more color on what youre doing internally to manage your own cost in this environment of declining revenues you try to keep your margins above that 15% level.

Yes.

Take that one first.

For all of you who have been with us throughout the year as you have witnessed firsthand.

And then has always adapted well as market conditions fluctuate whether that is flexing up to demand or flexing down to demand.

And it really is a core value proposition to our clients because we are there to help them in times of need and be able to meet their needs quickly and seamlessly.

So if you look at our.

<unk> to do that particularly even in this quarter, while our revenues went down 27% year over year, our adjusted SG&A is down 20% year over year and the majority of that expense reduction has not impacted head count. So the things that we are doing.

One is we have active active experienced planning.

So we went into this year, knowing that we were working with our clients to reduce key elements of their workforce spend and plans for that.

We're always doing continuous performance management.

Christian as the primary drivers of how we continue to manage those costs.

Okay. That's really helpful. Appreciate that.

Jeff I think you had mentioned that I don't know if you use the word goals, but for 2023.

The revenue and adjusted EBITDA numbers that you gave us assume some modest demand improvement what would those numbers be if there's no demand improvement.

Yes, I would say it's in the low single digits.

Range, Jeff is what the improvement is into Q3 and Q4 in the demand environment.

And again, our viewpoint on bill rates is that there'll be down high single digits in the second quarter down mid single digits in the third quarter and Thats informed on the visibility we have into Q3 right now as well as the open orders that were recruiting for and then.

Sequentially into Q4 so.

That's the bill rate side of that equation and it's not.

A huge lift on the volume side from what we're seeing right now.

Again in that low single digit range.

So the demand improvement is mostly coming in the fourth quarter Thats, what youre, saying.

Sequentially over Q3, because Q2, we do expect Q3 will be down.

Mid single digits for Q2, alright.

Alright, thanks, so much for clarifying that I appreciate it.

Okay.

One moment for our next question.

Our next question comes from tore.

Tobey Sommer of choice Securities Tobey Your line is now open.

Thanks.

As the business and demand trends stabilize I'm curious just if demand picks up do you think you'll be able to grow your.

Travel nurse business.

Above and beyond seasonality at current pricing trends or would it require.

Bill rates out of the market to increase to Lora and some additional supply to generate the growth.

Oh.

Oh.

So if you step back and think a little bit about what we typically see from a volume standpoint.

As volumes go up you tend to see bill rates and pay rates have to go up to be able to attract that.

What we've seen and maybe the balancing piece of that that we have.

Witness over the past couple of quarters as you've actually seen.

Stabilization really since the high point of Q1 2022.

So I would say at this point, we're not assuming that youre going to see a substantial increase in bill rates.

And we still think that.

The balance between bill rates and volume.

It could still be fine if you had a slight increase in volume towards the end of the year.

Yes.

Okay.

Could you talk to us.

Two sort of detailed questions.

How is your spend under management from an MSP perspective in churn within the book of business and maybe could you contextualize winter.

Winter orders sort of size that influence them.

Now how much higher priced that is.

The average thank you.

Let me give some overall context about MSP and then I'll have Landry talk a little bit about the winter orders.

As you have seen as we talked about just.

The significance of our MSP programs.

In terms of spend and I'd say this was particularly true during COVID-19, where we made a very intentional and strategic.

I already to focus our limited supply on our MSP clients are emmis, our MSP spend tends to track what you see overall in our nurse and Allied business because that is the biggest.

Program under our MSP. So when you go through and as we talk about some of what we're seeing overall.

In the nurse and allied business that tends to align well with what we're seeing overall in our MSP now as we've come out of the pandemic.

We have been able to provide more support than we did during the pandemic to some of our Vms program.

And so youre seeing youre seeing that alignment still stay.

And correlated but its not quite as one for one as you may have seen during the pandemic.

Hey, Tobey I'll hit on the winter orders real quick this is landry.

Our definition of winter orders whenever decline is giving us bulk orders kind of in the June to July timeframe for orders or start dates that typically start either at the latter end of Q3 or throughout Q4, So that's kind of the way.

Hey that we label our winter orders.

The last couple of years, it's been hard for some of those accounts to plan for that just with a different fluctuations that were going on in the market.

We are anticipating winter needs this year.

You asked about the bill rates on them I would say the biggest reason for the bill rate increases that we see higher utilization and our clients to drive higher rates. So it's a lot of it is.

More of a geographic phenomenon that it is customers truly paying a higher rate for that time of year.

Okay, one moment our next question.

Our next question.

Comes from a J rice of credit Suisse. Your line is now open.

Hi, everybody. Thanks for the question.

First of all just to make sure because sometimes with big headed here.

Jeff just to take your points. So before you were looking for 2% to $4 3 billion in revenue. This year now youre thinking $4 billion.

The EBITDA margin was previously talked about as being 15% to 50 to have now youre talking about being at the high end of that $50 in half and if I do the math right at the midpoint.

You were at $6 50, before now Youre thinking $620 million of EBITDA, So a $30 million adjustment on a full year basis with first quarter being a little higher third quarter being a little lower admittedly is.

And would you say that is all based on.

Somewhat of a change in view of where you shake out on Allied in travel nursing is there any other change you're making.

To your outlook of significance.

Yeah, Hey, Jay So I would agree with your numbers I would say, it's really a travel nurse change predominantly.

Obviously with some of the demand trends that we talked about in the nursing side that is impacting our vms business as well.

That's largely offset by strength within language services. So language services was up 25% year over year in the first quarter. So any any hit to the Vms businesses, largely being offset by language services within gws and the change is really coming.

Within travel nurse.

Okay, and then when you think.

Think about.

Supply demand of getting nurses, who are willing to step up for assignments.

You talked about volume improves you might have to see a little rate improvement to get that volume what about this concept of at some point you hit a breakpoint, where it's going to be really hard to get nurses in a dramatically.

Pulled back.

Youre looking at where you think rates would bottom in the third quarter are you pretty close to that number where you would see a meaningful percentage of the people that are willing to take travel assignments today might back off.

So that that gives you a second way to consider where our floor might be or are you still think there is some leeway there.

Hey, Jack Landry.

I think that probably the biggest thing that I would say to that is right now what we're experiencing within travel nurses, it's not a supply issue for travel it's a demand issue.

The interest is there are there is not they are certainly not enough nurses to go around to fill all of the permanent and temporary and per diem needs are out in the marketplace, but the desire to work travel is there.

So that hasnt been an issue on the PE the pay piece of it.

It is economics on supply demand. So we've factored all that into where we believe that demand is going to be and where we think pay needs to be and we're having those conversations with our customers, but still pay is only one factor. When these clinicians are making the decision to travel actually location is the number one.

Referenced that goes over everything when they're making decisions to work contracts. So.

Things like location pay does ranked in the top four but the other things that ranked really highest flexibility in working condition. So.

It's right now today, we're not seeing a supply issue. If we can get the demand to pop back up we'll be able to capture it.

Okay.

I would underscore with we just released our nurses survey on Monday, and I think all of the points that Landry put in their underscored. It. So we're still seeing a huge interest in as much as anything it's a lifestyle choice.

Interesting one final last question on you mentioned in the prepared remarks.

Interested M&A willingness to do M&A I know the company has talked about it before but obviously care you've had a little time to be there does that broaden in any way, which you guys might look at it now that you've gotten to understand the organization and the competitive landscape out there or what would sort of latest thinking on where you might look for deals.

Yes overall.

Very consistent thinking with some of my comments last quarter.

I'll start first with we are always interested in looking at M&A as a way to accelerate our growth in key areas.

And so that remains true I think what we saw for some time period and this is a general comment across.

A number of industries as you saw relatively slow M&A environment as there was broader market volatility.

Would expect that you would see that start to stabilize a bit as we go through the year.

And we're interested in opportunities that we think are going to provide.

Better solutions for our clients more touch enablement.

Really strong growth opportunities, particularly in specialized areas, where we see continued demand.

Okay, great. Thanks, a lot.

One moment for our next question.

Our next question is going to be coming from Bill Sutherland airline huh.

Ooh.

Okay. Thanks, Glenn.

Your line your line is now.

I think there's only one number with us.

Where do you think the net net.

One moment.

Okay.

Okay.

Our next question is can be coming from Andre child dress of Baird.

Your line is now open.

Hey, this is Andrew on for Mark Mark Com. Thank you for taking our questions. So my first question just wanted to just wanted to follow up on some previous comments you had on the expectations you laid out where do you now expect bill rates and volumes to exit the year compared to pre pandemic levels.

Yeah on the.

The bill rate side, we would still expect them to be 30% to 35% above pre pandemic Andre and thats roughly 30% lower than they were in the peak of the first quarter of last year.

And then.

Oh, I'm, sorry, yes on the volume side.

It would be in the 20% to 25% range above pre pandemic.

Okay, great. Thank you and then.

The language services business continues to feel a lot of really great strength.

How do you view the opportunities in that space and how large could that business ultimately become.

Yes, let me take it from a general standpoint, so we.

Really love that business for a number of reasons. One is if you look at the biggest macro trends.

One in five patients coming in are not going to speak English as their primary language.

So that demographic is incredibly compelling.

The other piece of it is when you look at how you really create optimized workforces in health systems.

They have a very strong desire to be patient centric and a part of that is language services. This gives them an ability to do that literally across hundreds of languages and a very cost effective way without having to schedule multiple language clinicians during some of those shifts so we love it for.

And overall match against macro demographics as well as how we can serve our clients and patients well and obviously culturally we have a huge diversity and inclusion.

Focus, which that also aligns very nicely too.

You look at the overall growth that they have seen.

Expect for that business to continue to grow.

Now we see.

We still continue to see demand in.

Interest in that space and a big area of focus for US. There is how we continue to build out and scale the business, particularly among different languages to be able to meet that demand.

Great. Thank you and then I guess transitioning over to some capital allocation and strategy questions. I guess, the first quick one will be could you provide some more details on the accelerated buyback program, particularly on the timing.

Yes, so we plan to enter into that in the coming days.

Andre and the size of that would be $200 million.

But we would it would will be a second quarter event, and then completed over a number of months, but at the outside by the midpoint of the fourth quarter.

Great and you spoke about some of the leadership changes some of the initiatives to accelerate the businesses could you provide a little bit more color on some of those initiatives and what are you most excited about.

Yeah.

So I celebrated my five month anniversary.

This weekend, what I committed to all of you when I joined was that I was going to spend and very quickly.

Get a sense of the market talking to our clients our clinicians all of you.

Really better understanding what Ams opportunities, we're as we enter this next chapter of growth.

The announcements that I made today are really intended.

To emphasize our focus around three areas that I think are going to be critical for us.

In the coming years, one is it is incredibly clear that clients focused.

Is is really around how do I build a sustainable workforce.

There is increased utilization demand there is into the intermediate term you could argue into the long term constraints on clinician supply and Theyre looking for partners, who are going to help them be able to very broadly think about different levers and different ways that they can create some.

Staying ability broadly speaking in their workforces that is a huge priority as we think about.

Some of the changes that we made one the other one is we want to grow our business as one I talked about this in the last call, where we have a broad range of over 20 solutions.

We do a very good job of talking to clients about them, we haven't done as good of a job of seamlessly integrating them for the benefit of our clients, which will be an area of focus for us.

And the last piece is we really want to position and highlight our tech enabled solutions and so.

One of the.

One of the Detriments of having such strong MSP programs is under an MSP. Many times our clients don't see our technology that we have underneath it.

We have phenomenal technology that we have continued to invest in and we want to make sure that we are highlighting across the board all of our tech enabled solutions. So we had these three imperatives as we are making the changes and so if you look at the realignment that I do.

Did.

We have a focus with a chief revenue officer, and we have an outstanding leader and patent Mccall who came into that role.

Have a dedicated chief business officer.

We are going to focus not just on our own ameren corporate growth strategy, but importantly, helping our clients be able to develop a sustainable workforce.

Meredith Lapointe coming over from really helping build the health care Mckinsey practice at Mckinsey over the past 16 years, but also her focus on sustainable workforce. We think is going to really accelerate our game in that area and then finally, having the Sean who has been our chief strategy and marketing officer.

<unk> and responsible for our M&A go over and lead in a dedicated way our technology workforce solutions.

It's going to accelerate growth in all those areas. So we have strong leadership alignment around key areas of focus for us.

We are doing the same internally around how we continue to prioritize our one <unk> initiatives.

Okay. Thank you so much.

Okay.

I would now like to turn it back to karri, Great Chief Executive Officer.

Thank you all for joining us in this call.

And thank you for your continued interest in <unk>.

We look forward to talking to you over the coming weeks and months.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

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