Cross Country Healthcare Inc (CCRN) 2015 Q2 法說會逐字稿

Good morning ladies and gentlemen and welcome to the Cross Country Healthcare conference call for the second quarter of 2015. This call is being recorded, simultaneously webcast live. A replay of this call will also be available until August 20, 2015 and can be accessed either on the Company's website or by dialing 800b395-7443 for domestic calls and 203-369-3271 for international calls and by entering the passcode 2015.

I will now turn the call over to Bill Burns, Cross Country Healthcare's Chief Financial Officer. Please go ahead sir.

Good morning, everyone, and thank you for joining us. With me today is our Chief Executive Officer Bill Grubbs. This call will include a discussion of our second-quarter results for 2015 as disclosed in our press release and will also include a discussion of our financial Outlook for the third quarter of 2015. After our prepared remarks, you will have an opportunity to ask questions. I would like to remind everyone that the press release is also available on our website at www.CrossCountryHealthcare.com.

Before we begin, we need to remind you that certain statements made on this call may constitute forward-looking statements. As noted in our press release, forward-looking statements can vary materially from actual results and are subject to known and unknown risks, uncertainties and other factors, including those contained in the Company's 2014 annual report on Form 10-K and quarterly reports on Form 10-Q as well as in other filings with the SEC. I would encourage all of you to review the risk factors listed in these documents. The Company undertakes no obligation to update any of its forward-looking statements.

Also, comments during this teleconference reference non-GAAP financial measures such as adjusted EBITDA or adjusted earnings per share. Such non-GAAP financial measures are provided as additional information and should not be considered substitutes for or superior to financial measures calculated in accordance with US GAAP. More information related to these non-GAAP financial measures is contained in our press release.

In order to facilitate a better understanding of the underlying trends for our business, we will also refer to pro forma information on this call, giving effect to acquisitions as though they were included in the prior-period results.

With that, I will now turn the call over to our CEO, Bill Grubbs.

Thank you Bill, and thank you to everyone for joining us this morning.

Well, we have a lot going on here at Cross Country Healthcare. Besides delivering a very strong quarter, we reduced our interest expense, signed an agreement to divest a non-core business, and made significant progress in our cost optimization efforts.

Before getting into the results for the quarter, I will provide a short overview of our debt refinancing and Bill Burns will discuss this later in the call. We have transformed the Company over the past two years and it is in a much better place today, which has resulted in significant improvement in our financial performance. Cross Country Healthcare's adjusted EBITDA has improved from $4 million in 2012 to $8 million in 2013, $17 million in 2014 at our last 12 months have produced $27 million of adjusted EBITDA. Because of this improved performance, we were able to negotiate an amendment with our second lien lender which should save us over $500,000 per year in cash interest costs based on our current leverage ratio.

Let me next discuss the sale of our Cross Country Education business which we expect to close during the third quarter. Although this is a good business and has improved its performance this year, it was never really core to our strategy. We are a workforce solutions, staffing and recruiting company, and as such, we were not making the investments that the Education business needed. I'm happy that we found a good home for the team with an organization that can help them grow and flourish. We will utilize the proceeds from the divestiture to pay down debt and for potential acquisitions that should be accretive to the Company.

Now let's turn to our second-quarter performance. We had a very strong quarter and I'm pleased that we exceeded both market consensus as well as the upper end of our guidance. The actions we have taken over the past two years to transform our company continue to support revenue growth and improved profitability. Revenue growth during the quarter came from both our nurse and allied segment and our search business, which has been growing at a pace of 35% or more on a year-over-year basis for three consecutive quarters.

We also saw progress in our physician staffing segment. While revenue did decline by 1% in the quarter, it is much improved from previous quarters.

The one area that disappointed me is our gross profit percentage. We had expected a 50 basis point improvement from the first quarter as we worked through the normal payroll tax reset that reduces the first-quarter gross profit percentage. Instead, We experienced a sequential decline of 20 basis points. This was predominately due to wages in our travel and nursing business rising faster than the bill rate. After nine consecutive quarters of bill pay spread improvements in our nurse and allied business, this was the first quarter we did not experience an increase.

MSP bill rates are taking longer to renegotiate and in order to maintain our SLAs during that process, we made a decision to continue to direct our supply to these accounts to meet their needs. We are continuing our efforts to increase prices to offset these rising costs. We have had some success in price increases but they are not showing up in our numbers yet. Despite the pressure on gross margins, we improved our profitability, in line with our goals.

But let me stop here and explain a little bit. We anticipated that we would get more traction in negotiating prices in the second quarter, especially in our MSPs. But we didn't and it's a miss on our part. It is more of a timing issue though that anything else because we are already seeing improvement in the third quarter. As we continue to process -- as we continue the process to get Cross Country Healthcare on the right path, we are bound to hit a few bumps in the road. I see this as one of those bumps.

I'm not disappointed that we decided to continue servicing our top clients without a price increase. That was the right decision. I am disappointed that we were not successful in negotiating increases fast enough. But the good news is that we had a good quarter without it and, once achieved, will only help to improve future quarters. We as a company are in the right place at the right time, making good progress on fixing the Company. A bump in the road will not take us off that track.

Okay, let me get back on with the quarterly performance. Regarding profitability, our adjusted EBITDA also exceeded consensus and guidance. This is the best quarter for adjusted EBITDA, both dollars and percentage, in more than five years. The 4.25% rate achieved in the second quarter continues the path towards our 5% adjusted EBITDA goal by the fourth quarter of 2015 and our 8% goal by the fourth quarter of 2017.

nurse and allied, which represented 79% of our total revenue, continues to lead the way with a year-over-year growth rate of 83%, or 6% on a pro forma basis, against a tough comp of 11% pro forma year-over-year growth in the same quarter last year. Demand for our nurse and allied services remains strong, still near historic highs. With the recent Supreme Court decision, we anticipate continued strong demand for the foreseeable future and as a result, we continue to invest in recruiters and candidate acquisition.

We started to see some stability in physician staffing with a decline in revenue of 1%. Revenue per day billed increased 11% from $1,468 to $1,623. We also saw an improvement in gross profit margins and contribution income over last year. With these trends, I am encouraged that the actions we have taken over the past three quarters are starting to have a positive impact. We ended the quarter with a pretty strong June and actually a little bit better July, so I am encouraged that the performance coming out of the quarter was actually better than the quarter overall.

Other human capital management services had 10% year-over-year revenue growth driven by our search business, which grew at 35%. Contribution income improved by almost $1 million from a loss of $200,000 last year to income of $750,000 this year, again predominately due to our search business.

Workforce solutions continues to be robust with several EMR and MSP programs ramping up through the end of the year. We also have quite a bit of interest in our optimal workforce solutions offering and expect to sign one or two new contracts this quarter. Just to remind you, optimal workforce solutions is where we outsource some of our power professional skills or non-core departments of our customers.

Additionally, we have signed a contract to provide predictive analytics services to a large hospital system in addition to the several pilots we are running. I think we talked about three or four pilots last quarter. One of those has turned into a real program and we believe some of the other pilots will do that as well. There remains strong interest in predictive analytics to provide efficiencies and cost savings for our customers.

So, some very good things happening right now with the Company. We started implementing our cost optimization program. Bill will talk about that in a minute. We reduced the cost of our debt, and we expect to raise additional cash through the sale of a non-core business. But most importantly, we had a very strong quarterly financial performance and the market remains favorable. We believe this momentum will continue and supports our goal of achieving 5% adjusted EBITDA by the fourth quarter.

July marks the two-year anniversary of my becoming CEO of Cross Country Healthcare. I'm very proud of what we have accomplished in that time and I want to thank the management team and all of our employees for getting us through what has been an enormous amount of change. In addition to the many operational changes we have made, we have also successfully integrated two acquisitions. We continue to execute our strategy and are making tremendous progress.

So, again, let me wrap up by thanking all of our employees for getting us to this point in our transformation. In addition, I would like to thank our healthcare professionals for their continued support.

Let me turn the call over to Bill Burns to go into the numbers in more detail.

Thanks Bill. We are very pleased with our second-quarter and year-to-date performance as well as the progress on many key initiatives like the divestiture of a non-core business, reducing the cost of our debt, and realizing additional cost savings through our cost optimization project. I will go into more detail on though initiatives a little later in the call.

So, let me first review the consolidated results for the quarter. Total revenue for the quarter was $192.6 million, up 57% from the prior year and 4% sequentially. On a pro forma basis, total revenue for the quarter was up 4% from the prior year. The year-over-year and sequential increases were driven by continued robust demand in our largest segment, nurse and allied Staffing, as well as strong results in our other human capital management services segment, led entirely by our search business.

Gross profit margin for the quarter was 25.1%, down 130 basis points from the prior year and 20 basis points sequentially. The year-over-year decline was partly attributable to the impact of the MSN acquisition. However, for the second quarter, wages rose faster than our bill rates, contributing to both the year-over-year and sequential declines. As Bill mentioned, we have several initiatives underway to better align bill rates with increasing wages.

Moving down the income statement, SG&A for the quarter was $40.9 million, up 40% on a year-over-year basis and down 1% sequentially. The year-over-year increase was attributable to the impact of the MSN acquisition. As a percent of revenue, SG&A was 21.2%, down nearly 260 basis points year-over-year and 90 basis points sequentially. During the second quarter, we continued to manage our overall costs to improve the operating leverage in our business.

Adjusted EBITDA was $8.2 million, representing a 4.25% margin, which was slightly above our expected range. We remain on track to realize an adjusted EBITDA margin of 5% by the fourth quarter of 2013.

For the quarter, we recorded restructuring charges of approximately $1 million related to the actions being taken under the cost optimization project. As I mentioned last quarter, we expect to achieve annualized savings of approximately $4 million to $5 million by the fourth quarter of 2015.

Interest expense was $1.8 million, up over the prior year and essentially flat from the prior quarter. In July, we announced an amendment to our $30 million subordinated term debt agreement to lower our interest costs. Based on the improved performance of the Company and relative low leverage, we expect this will lower the interest rate 175 basis points, thereby saving a little over $500,000 in interest annually. We also recorded a $400,000 non-cash gain in the change of the fair value of the embedded derivative from our convertible notes during the period.

Income tax expense for the quarter was approximately $200,000, primarily due to the impact from the continued amortization of indefinite-lived intangible assets. This expense was partly offset by the release of reserves for uncertain tax positions on the settlement of certain state tax examinations.

Net income attributable to common shareholders was $2.6 million, or $0.08 per diluted share, as compared to a net loss in the prior-year period of $3.2 million, or $0.10 per share. Adjusted EPS, which excludes items like restructuring and changes in the value of the derivative, was $0.10.

Let me next review the results for our three business segments. Revenue for nurse and allied staffing was $152.7 million for the second quarter, up 83% year-over-year or 6% on a pro forma basis and up 2% sequentially. As we mentioned last quarter, 2014 benefited from a higher level of electronic medical record projects which do not necessarily repeat from one quarter to the next. Revenues related to

EMRs were approximately $9 million in the second quarter of 2014 as compared to approximately $3 million in 2015. Excluding the negative headwind from EMRs, pro forma revenue for this segment would've been up more than 10%.

We averaged 6,607 field FTEs for the quarter, up 107% from the prior year and 2% sequentially. Revenue per FTE per day was $254, up 1% year-over-year on a pro forma basis and down 1% sequentially. Segment contribution income for the quarter was $12.5 million, representing an 8.2% contribution margin, up 10 basis points year-over-year and 110 basis points sequentially.

Turning next to our physician staffing segment, revenue was $29.8 million, down 1% from the prior year and up 9% sequentially. On a pro forma basis, physician staffing would have been down approximately 7% from the prior year. The year-over-year and sequential declines were entirely due to the lower volume of days filled, which were down 10% year-over-year for the second quarter. The decline in volume was partly offset by an 11% increase in the revenue per day filled from $1,468 in 2014 to $1,623 in 2015. Segment contribution income for the second quarter was $2.2 million, representing a 7.5% contribution margin, up 150 basis points from the prior year and down 20 basis point sequentially. The year-over-year improvement was primarily attributable to improved pricing and lower operating costs.

Finally, revenue for the other human capital management services segment was $10.1 million, representing an increase of 10% over the prior year and 7% sequentially. The year-over-year and sequential increases were entirely driven by the strength in our search business, which grew by 35% over the prior year and 12% sequentially. Segment contribution income was approximately $750,000, or 7.4% of revenue, as compared with a loss of $200,000 in the prior year and income of $600,000 in the prior quarter.

Turning to cash, we ended the quarter with $8.7 million of cash and cash equivalents and $58 million in outstanding debt. Days sales outstanding were 57 days, which was two days lower than the prior quarter. Net cash provided by operations for the quarter was $5.7 million compared to $3.7 million in the prior year and $300,000 in the prior quarter. Capital expenditures totaled $450,000, in line with our expectations.

During the quarter, we repaid $3.5 million under our ABL and had approximately $46 million of availability at June 30. This brings me to our guidance.

For the third quarter of 2015, we expect consolidated revenue to be in the $192 million to $197 million range, which assumes a year-over-year growth rate of 2% to 4%. While we don't provide specific guidance for segments, we expect that the year-over-year growth will come from nurse and allied staffing and other human capital management services.

Turning to margins, consolidated gross profit margin is expected to be between 25.2% and 25.7% while our adjusted EBITDA margin is expected to be between 4.2% and 4.7%. We expect adjusted earnings per diluted share to be between $0.10 and $0.12, assuming a diluted share count of 32.1 million shares. This guidance continues to include the results of our Education business for the entire quarter.

This concludes our prepared remarks. And at this point, I would like to open up the lines for questions. Operator?

Thank you speakers. We will now begin the question-and-answer session. (Operator Instructions). A.J. Rice, UBS.

Hi everybody. Thanks for the question. First off, let me just ask about the Education business. So you are saying that is included in the guidance for the third quarter. Can you give us some flavor for what the revenues of the business are? I know you have given us a price that you are -- proceeds you're going to get, but revenues so we can think about how that will impact you going forward.

Sure. This is Bill. Revenue for that business is about a little less than $6 million per quarter, so about $5.8 million, $5.9 million. The divestiture is expected to have a negative impact on the gross profit margin by about 70 basis points and minimal impact on the adjusted EBITDA margin because it was essentially a breakeven business for the first half.

Okay. And so you're not going to put that in discontinued? You're going to maintain that in the consolidated results (multiple speakers)

You are sounding like me A.J., but Bill will explain.

They recently enacted some new accounting guidance on the treatment of disc ops. And unfortunately, it doesn't look like it will qualify for disc ops treatment because it is not significant enough to the business.

Okay. Then switching gears, in the nursing business, obviously with MSN you now have a fairly significant per diem side. Can you give us some sense about travel versus per diem? Are the trends similar or is there any divergence there?

That is a good question. We -- branch operations are actually doing very well. They do kind of go hand-in-hand. We actually had a little bit better performance on the pricing in the per diem because it is kind of done on a case-by-case basis and we actually had bill pay expansion in our branch operations and a little bit higher bill rate increase overall. But generally the trends are kind of moving in the same direction. Ours were up about 6% year-over-year in the quarter. It is kind of going hand-in-hand I think with the travel business.

Okay, all right. And then just to flesh out that issue on bill pace a little more so, it sounds like the bill rates in the nursing side are up about 1% year-over-year. What was the rate of increase in nurse compensation, sort of if that is the right way to think about it?

Yes, it is. But I'm going to give it to you slightly different. Bill rates in nurse and allied overall were up about 1.7%, down from the 2.2% we had. You can't look at the revenue per day. You've got to look at the actual bill rate. So we didn't put that in the press release, but 1.7%. Travel and nursing was up 2.3%. We think those are very low compared to what the market is driving on the pay rate side. So basically that was an $0.83 increase in our nurse and allied bill rate. And we gave an extra $1.23 in pay to the nurse and allied healthcare professionals. So we basically went back with by about $0.40 an hour overall.

Okay. And you said that you are moving to correct that as you progress in the third quarter. How quick do you think you can normalize that? Will that normalize in the third quarter or you've really going to wait to the fourth quarter, or even longer?

Yes, it is interesting. As we went through the end of last year, we got a lot of skepticism from our clients whether the high demand was sustainable or not and then whether a lot more people would come into the of Affordable Care Act or not. And then as we got into the beginning of this year, we got some pushback because people wanted to take a wait-and-see attitude on the Supreme Court decision and whether that was going to change demand or not. And maybe we just didn't do a good enough job or didn't get at it fast enough, but it is just taking longer than we anticipated and we have had some pushback at our bigger customers. But we have made some progress and I think we are starting to realize that the market has changed and is probably at a new level that is probably going to continue for a while. We are starting to see some of that in July already. I don't think we will get the full effect of it in Q3, but I think we will get some affect in Q3 and probably more in Q4. So we just got at it too late and didn't negotiate it fast enough.

And just one last aspect of that and then I will let someone else go. But your decision to not push more aggressively on the bill rates, is that just trying to maintain good relations with the clients, or is that in response to something you are seeing competitively that gave you pause that if you didn't take that posture you would have potentially been in trouble?

No, it wasn't about competitive pressure at all. It was more just about the negotiations with those particular customers. I mean I have been involved in a couple of the conversations with customers, and it is just taking some of our customers to get their head around the changes in the marketplace. But it wasn't competitive pressure at all. We haven't lost any customers and we don't anticipate that we will lose any through price negotiations. We have pretty good relationships with our customers and that seems to continue on. We just have not gotten to the point where we think the market probably should be moving yet.

Okay. All right. Thanks a lot.

Thank you. Jeff Silber, BMO.

Good morning. It's Henry Chien calling in for Jeff. I just wanted to clarify. The numbers you gave, the 1.7% in the travel, nurse 2.3%, is that the bill rate or the wage rate? I didn't get that.

That is the bill rate increase on a year-over-year basis.

Year-over-year basis, got it. Okay. Would you be able to share the wage rate increases of those two?

Yes. It is weird because the wage percentage versus the bill rate percentage kind of gets wacky. But the bill rate was up a little over 4%.

The pay rate.

Or the pay rate, sorry. It's the pay rate.

Pay rate, okay. Got it. Okay. And just turning back to the Education business, the $5.9 million quarterly run rate, is that assumed for the third quarter and does that represent any year-over-year growth?

That is the Q2 run rate. There is not large sequential growth expected in that business in the third quarter, so it wouldn't be materially different from that number.

We have just lapped the date of the MSN acquisition and we are hoping not to do pro forma numbers anymore. And my goal was to count this has discontinued ops but unfortunately the rules have changed and we are not going to be able to do that. We will show pro forma numbers going forward without the Education business and that is so you can see what it looks like. It depends on when it closes, but we are most likely to have at least probably two months of the quarter in this quarter. So we are going to have to show you what it looks like without it.

Yes, we just didn't want to predict in the guidance the exact timing of the divestiture, so it was cleaner to leave it in and we figured we would get the question and we would be able to tell you what -- how to size that.

Okay. Thanks so much.

Tobey Sommer, SunTrust.

Thanks. In the physician business, how do you feel like you are pricing in the market and kind of getting the pieces in place so that you can start to build some sustainable momentum of growth? Thanks.

Yes, we had talked in the -- about it in the first quarter, that we had a 20% drop in volume and I think a 12% increase in pricing year-over-year. That kind of reduced to about a 10% or 11% price increase year-over-year in the second quarter. I think we are okay there on the price side of it. We are seeing some stability in the revenue side of it and we are seeing increased activity in submittals and interviews and all of that. As I mentioned, we came out of the quarter with a bit better performance in June and July looks even better than June did. So we are seeing the stability we expected.

I think we are okay on the price side of it. We may balance it a little bit against volume and see if we can't manage that a little bit better, but I think we are on the right track.

Okay. I think I may have confused the bill rates a little bit. Did you say that overall bill rate was up 1.7% for nurse and allied?

For nurse and allied yes.

And that travel was up 2.2%?

2.3%, yes.

2.3%. So per diem is up a little bit less than that?

No. Allied was down a little bit. That is mostly mix. Allied is a bunch of, you know, a variety of skill sets, but branch operations, which is mostly per diem, was up 3.3%.

I'm curious. If you think your bill rate growth -- you started the conversations a little bit late or so forth and therefore you are liking the market a bit. Did you see a corresponding increase in your fill rates that may have offset that? Because if the market is moving up a little bit higher, then seemingly your bill rates would be more competitive.

Yes, but it doesn't quite work that way because -- especially at our MSPs. We have those jobs to fill regardless. But actually I'm encouraged by this. This looks like I'm trying to put a positive spin on a negative, but I am not honestly. It is a miss. We should have got some pay rates. The market says that we should have been able to align our bill rates more with the pay rate increases and we didn't. So we are never going to get back what we didn't get in Q2.

But what I am encouraged by is I don't believe that as we get approval for these rate increases, I don't think it will change our volume at all. So if we are growing nurse and allied at 6% or 7% and we can increase our price from that 1.7% to maybe 4% or 5%, we are bumping up on double digit year-over-year growth. So I am encouraged that we actually have an opportunity here to maintain our volume growth and lay on top of that some price increases and we will be in pretty good shape.

Okay. Thanks. And then what is the outlook for EMR work in the second half of this year or maybe even into 2016, if you have that kind of visibility? And could you remind us on how the comps proceed for the back half of the year so we can get a sense for what the net effect may be from that small piece of the business?

Yes, so it was in 2014, the quarters looks like this. First quarter, we had about $13 million of EMR. The second quarter, we had about $9 million of EMR. The third quarter, we had about $5 million of EMR. In the fourth quarter, it was $2 million to $2.5 million, something like that. So this year, we came in at about $2.5 million in the first quarter, about $3 million in the second quarter. We will probably be up a little bit in the third quarter, so the comp between what we will do and what the negative on the previous year will be less in this quarter. And we have two or three that are ramping up already. We just won another one this week actually that will be a fourth-quarter EMR project. So we will probably exceed the EMR rate in the fourth quarter that we had at $2.5 million last year.

We don't give out exact numbers, but we were $3 million in the second quarter. I am guessing it will be a little bit higher in the third and fourth quarter.

Okay. And from a balance sheet perspective and lapping the MSN acquisition, how do you feel about your appetite to continue to add scale to the businesses that you are in? Thanks.

We have done a good job with acquisitions. The board looks at it. Did we get a good price for it? Did we integrate it well and did it perform well ongoing? And I think we've ticked the box in all three of those areas for both of the acquisitions we made. I believe we have the right team and processes in place to be able to do acquisitions well.

We are looking at things. We think there will be more consolidation in the marketplace.

We did the last two acquisitions really to kind of make sure we were positioned correctly in the market, so they were strategic from a go-to-market standpoint. I think now we are kind of looking at would we beef-up locum tenens? Would we beef-up our allied? Those would be beneficial. We are looking for other growth engines that could help us going forward on a strategic basis. So we are looking at those and we will see what happens. I'm not going to do a deal that doesn't make sense both strategically of financially. So, we are looking what is in the market and we will see how it goes in the next few quarters.

Thanks for your help.

Randy Reece, Avondale Partners.

Good morning. I was wondering if you could maybe give us a little explanation of the difference between your same customer growth rate, like your comparisons on how much revenue you are getting from the customers that you had last year and the change in your customer count on a year-over-year basis and how those are trending over the past few quarters.

Yes, so I don't think I have that other than for my MSPs. I don't have it generally for kind of same customer versus new customers. You don't have that do you?

I do not have the specific data on same client sales. But to your point on the MSPs, sequentially there was growth in the MSPs.

Well, it's really year-over-year.

Yes, year-over-year and sequentially there was growth in the MSP business. We haven't lost any of the major MSPs. So I think it is an apples-to-apples comparison.

How much is MSP revenue as a percentage of the segments now?

For the second quarter of 2015, it's 31% of our nurse and allied business and it is 25% of our overall business. Okay, Bill?

Yes.

Just making sure.

I was just, with my original question, I was just trying to get a feel for how much -- how different your growth rate looked on a same client basis, whether you were getting more significant volume increases per customer than your overall (multiple speakers).

(multiple speakers) MSPs. The MSPs were up double digits year-over-year. I will give you what the percent is. So second quarter of last year, MSPs were 29% of our nurse and allied and now they are 31%, and they were 22% of our overall business and now they are 25%. So, we have seen an uptick in at least our MSP business, and some of that is new wins along with existing customers. But we do look at existing customers and how they grow year-over-year. I just don't have that available right now.

Okay. The discussion about gross margin and how to pass it on, we've talked about this quite a bit over the last year or so. You have been implementing processes to improve your visibility of the markets that are happening in the field and your control over them. Could you update us on where you stand, how you feel about how much progress you have made there in getting control over that, and maybe if this quarter was a step in that process?

Yes, we didn't that the price increase because we didn't have visibility. It was more about execution and getting at it fast enough. But you are right. We have made some investments in better reporting. I have dashboards on the business that I can see not real-time but certainly daily changes in what our billings are and our rates are. We implemented new metrics for all of our businesses on productivity and activity as well as the financial metrics that we see, both from our physician staffing as well as our nurse and allied. So we do have better visibility than we have ever had into what is going on in the business, but that is just kind of running in parallel with all of the other changes we are making in the business. It wasn't really a factor in whether we got -- our bill rates were aligned with the pay rate changes or not. That was more of a -- as I said, we just didn't get at it fast enough.

Very good. Thank you.

Thank you. At this time, speakers, there are no further questions on queue.

Okay, great. Well, thanks, everyone, for joining us this morning and we look for to updating you with our third-quarter results in November. Thank you.

Thank you. A replay of today's conference will be available through August 20, 2015. You may access the replay by dialing 1-800-395-7443 or 1-203-369-3271. Please use the passcode 2015. Thank you for joining and you may now disconnect.