Cross Country Healthcare, Inc. (NASDAQ:CCRN) Q1 2018 Earnings Conference Call - Final Transcript
May 03, 2018 • 09:00 am ET
for the full year.
Before going into more detail on each of the businesses, I want to provide an update on the headwinds we faced in the fourth quarter of last year. The headwinds came from the impact of hurricanes in September, a lower renewal rate or a pullback in spend from certain large customers, and a lower percentage of our billable hours for premium rate business.
Let's start with the travel nurse impact from the hurricanes and from the reduction in renewal rates. Both of these events resulted in the base number of nurses out on billing for travel nurse to be reduced. Because of the historical nature of travel nursing, it takes a while to grow back to previous levels, when a step change like this occurs. Now, obviously the impact from the hurricanes was an isolated event and we've also not seen any further pullback in spend from customers in the first quarter. Therefore, we expect to return to the previous levels in travel nursing by the second half of the year.
I was originally going to wait until the Q&A to talk about the specific numbers related to the full impact and the progress we've made, but I think adding that color here is probably important. So I'm going to go over some numbers and these are variance numbers based on the endpoint data of the period of what we had on our billing for travel nursing.
So if you start with the end of the third quarter of last year and then the end of the fourth quarter, we dropped almost 550 travel nurse assignments out on billing in that quarter. That's not the average, that's from the beginning to the end of the quarter. That's a big change for us, that's a big drop, significantly more than you would normally see from one quarter to the next. If we had stayed at that reduced level, going forward from the end of Q4, it would have been about a $19 million per quarter impact or a $75 million to $80 million full year impact, if we had stayed at that reduced level.
Now, we have continued to grow from that bottom point at the end of Q4 throughout the first four months of 2018 and we've grown back just short of about half of what we had dropped in the fourth quarter. I hoped to get about half of it in the first quarter and half of it in the second quarter, so we're about a month behind where we expected to be, but we believe over the next three or four months as we go into Q3, we'll be able to get back to the levels we were at before. So I wanted to give the color as to that impact and where we were. So it's not really about the averages in each of the quarters, which is what we normally publish, it really is about the endpoints and the starting points of