I wanna thank everyone for joining us today. It's my pleasure to be introducing Cross Country Healthcare. Cross Country is one of the largest nurse staffing and healthcare staffing companies in the country. Presenting today we have John Martins, who's the President and CEO. Josh Vogel, from Investor Relations is also in the room. Maybe just jump right into questions. Sure. Would love to get kind of an update on just kinda where you see the businesses today. There's been a huge acceleration during COVID, now in normalization. Where, where are we in that normalization process? Sure. Right now we look at... Well, take a couple different parts of our business, right? We do obviously travel nursing, travel allied, but we also have other parts of our businesses, such as locums, education, home health. When, you know, kinda going to that demand, where we're seeing right now, and we're seeing tremendous demand in the locum side right now. We're also seeing tremendous demand in education. Our education business is paraprofessionals and professionals that are placed in schools along with healthcare professionals into public schools, charter schools. We're also seeing tremendous demand in our home health businesses where we focus on PACE centers. Now when it goes to travel nurse and allied, there we definitely have seen, you know, we all expected from the height of COVID to see a pullback in demand. We definitely saw that accelerate a little faster than we had thought in the first quarter. We do think it was overcorrected and some of it was artificially created by the hospitals as they were under immense cost pressures to contingent labor. Even when we start looking and seeing that, we think we hit the trough in demand. Over the last four weeks we're up about 7% in demand in nursing and up about 16% in travel allied. Our allied business is now, demand is similar to where it was in January to start the year. I think allied's back. If we look a little bit deeper and see what the publicly traded hospitals are saying, I think it was Tenet who said that they are at 7% contingent labor, trying to get down to 6%. They thought the 6% would be something that they would see throughout 2024. I think we've seen a couple of the other publicly traded companies say have similar ranges. When we look at those numbers where they were pre-COVID, those were more in the 3% or 4% range. They're still using a lot of contingent labor. We think that they're gonna continue to use contingent labor, and I think a couple of those hospitals also have said that now that prices are moving down, and we anticipated these prices to we model the prices to be down, it makes strategic sense, and this is the hospital saying this, not us, that it strategically it makes sense for them to start using more contingent labor at the price of the rates right now. We think that we will continue to see demand pick up. Of course, we do see and expect to see demand pick up this summer as hospital prepare for flu orders. Those, the flu orders we start seeing at the end of June and into July, and then those orders will then be for placements in late third quarter, call it September through October into the new year. I guess when we think about it from the investor perspective, we're up, we, you know, you start to see, you know, sometimes things go well for four weeks, and they go badly four weeks. Like it's a good trend. It's the start of a trend. It sounds like the Q2 results, you'll be in a better spot to kind of really say that things have come back and that we've reached that stabilization. We do, and we do, and we've called out. We think that, you know, the trough for us on volumes will be in Q3 because it takes you know, somewhere between when you receive an order and then when you place that order, the person goes to work, it's somewhere between four and nine weeks before they go to work. We think that the trough of what we'll see is in the third quarter, but we'll have great visibility by the time we get to the end of the second quarter. When you say that the, you know, the industry demand was kind of overcorrected, you know, how does that functionally work? Like, how is a hospital operating through that labor shortage where they're saying, "We don't want any more"? This is why we believe it was overcorrected. When we look at our renewal rates or our retention rates for a clinician at a hospital, they're at historic highs right now. That means that the hospital couldn't afford to get rid of that nurse. They, or healthcare professional, they need to keep them. In addition, our cancellation rates are at historic lows. Traditionally, if hospitals were looking to not utilize professionals, they would start canceling clinicians, and we're not seeing that at all. Matter of fact, we're seeing the opposite. They're retaining them at any cost. What we believe is happening, and, you know, from what we're talking to some of our clients, there's been, you know, internal conflicts in hospitals between the finance side and the nursing side, where the nursing side needs the people to take care of patients on the bedside, and the finance side is going and trying to reduce and control that contingent labor cost. Yeah. No. That's interesting. I get to the dynamic that I think sometimes from the investor perspective, it's like, well, how does demand drop? Actually, how does pricing continue to normalize but demand increase? Like, it seems like if demand's increasing, the pricing should be stronger. You mentioned a little bit about kinda Tenet's comments, so maybe just walk kinda through why demand should keep going up even if pricing or bill rates still have to normalize a little bit. Yeah. Well, good question. I think we had this unprecedented increase in bill rates. you kinda gotta go back to the beginning of COVID, where bill rates were at crisis rates, and we saw this incredible increase in bill rates, you know, double of what it was pre-COVID. I like to remind people, if you look and think why bill rates were so high in, during COVID, if we go back to March of 2020 when COVID first broke out, I'm sure many of you know people that were Lysol-ing their Amazon packages, they were Lysol-ing their vegetables, their groceries, and we didn't know how you were gonna catch COVID and people forget that. When these nurses were going in to a burning building, literally, they were saying goodbye to their families because they thought they weren't gonna come out, they were gonna die. It sounds dramatic, but that was the truth. We just were, you know, two years ago, we lose the reality of what it was. I don't know how many people are from New York City here, but in New York City, at 7 o'clock every evening, they'd ring a bell and people would clap, right? Because the nurses were going and taking care of patients. These nurses deserve that pay, right? They went in there. Of course, then what happened was, after the first surge of COVID happened in the Northeast, then it moved to the Northeast and the Northw est, Pacific Northwest, then it started popping up all around the country, and we needed to take these nurses and move them. That's why bill rates have stayed at a higher rate. Pre-COVID, we only had about 40,000-50,000 travel nurses in the industry. Now, probably argue there's 150,000-200,000 nurses. There's a much larger pool of nurses, which is why bill rates are now normalizing. When we say bill rates are normalizing, we think the bill rates will hit their normalization in the fourth quarter, and then from there, they'll be stagnant and then grow, you know, throughout the years to come. That normalization floor will be 30-35% higher than where it was pre-COVID. There's still a tremendous differential gap, even if you consider inflation on where those rates are. The other thing I think we have to consider about why bill rate's going down, but demand will go up, is that there is this fundamental shortage that, and structural shortage that hasn't been fixed. I think I called out our earnings call. McKinsey had a study that said there's gonna be a 425,000 nurse shortage by 2024 and a million nurse shortage in the next ten years. No one's solving that problem yet. There is still such a large demand. Hospitals don't have the staff. I think the NSI, there's an NSI report. There's a retention report. They were very much in align with what the publicly traded hospital was saying that attrition rates are about 23-24%. They surveyed 3,000 hospitals and came up with that number. That's, I think, very similar to what the public hospitals have said. What's more interesting, nurses in their first year, not a new nurse graduating, but a nurses who joined a new hospital, their attrition rate was 33%. Nurses are not sticking. This is a leaky bucket that hasn't been solved for. That's why there's continues to be opportunities of demand rising as bill rates are going. Clinicians, you know, it's interesting, during COVID, we hit our highest percentage of millennials or younger coming into the workforce for travel nurse. 65% of our new nurses coming in were millennials or younger. We're bringing in a whole new basket of clinicians into this workforce. If you think we went from 50,000 nurses to 200,000 nurses, a lot of those nurses will not go back into the old workforce and go into becoming the core staff. You know, if you look at the whole number, there's only three million nurses according to the BLS in the United States. 1.7 million nurses are in acute care, and we're talking 200,000 nurses are travelers that work in both acute care and in the sub-acute space. It's a very small population of nurses that are actually travel. We believe that's why we can still continue to find supply because they are embracing this new lifestyle of work, and we believe that demand will still tick up because of the shortages. Yeah. Can you just maybe talk a little bit more about that because it also kind of seems counterintuitive. It's like hospitals can't find nurses, but you can. Like, so where do you find the nurses? What's the draw, to keep that going? Well, like we're a national reach, right? If you look at hospitals, and I usually use this for a client side, but I'm gonna give you the same example. If you picture the map of the United States, and you look at the old commercials between Verizon, T-Mobile, Sprint, they show you all the little pixels of the coverage they have. A hospital that has three hospitals in one city, their coverage to find nurses is very small. They don't have the outreach because they're not looking for nurses to work in San Francisco if they're in New York. They're looking for nurses who want to just work in New York. We have the national reach of having nurses work in all 50 states. We're constantly looking for nurses nationally, where a hospital usually is looking very locally. We'll have a much farther and deeper outreach. I guess, so, like, bill rates have dropped. You know, if they're still gonna be 30-35% above pre-COVID, they're down still 30%. Mm-hmm. from the peak. I guess there's a thought that that bill rate was what drove nurses to want to be travel nurses. Now that it's come out, have all of them left the system now? like, how do you think about that? Well, I think, like I mentioned, more nurses have been exposed to the travel industry, so more people know about it. I think there's a couple factors. First of all, it's new-- a new lifestyle that, you know, how many of us in this room now work from home mostly or full-time? If your spouse, if you're a nurse and your spouse is now working full-time, and the reason I tell the story, my neighbor came across the other day, saw me and said, "Hey, you work in that travel nurse business. My niece is a nurse, and her husband works for some large company, and he's able to work remotely, and now they're going full-time traveling." That's what we're experiencing. I think part of it is this gig economy that really has, really accelerated during COVID is allowing nurses and their families to work from around the world. You'll see so many nurses and travel nurses now being in RVs and camper vans and traveling with their families, you know, homeschooling kids. We're seeing a whole new, you know, market emerge of new nurses into the industry. One of the, I guess, concerns that we get a lot around this industry is about the growth during a recession. How do you guys think about what the impact of a recession would be on the business? Well, I think we are in an unprecedented territory because the last time we had a recession, we didn't have the Affordable Care Act. I think there's some impact that we have many more people in the country with insurance and what does that really do to care, and are people still utilizing the healthcare facilities and doctors? I think that's gonna have an impact. I think the other impact that we have is for Cross Country, it's the diversity play. We're much more diversified than we were built from the last recession. I think, you know, you look at how deep the recession is going to be. When we look at a recession, it depends how deep the unemployment is. I think there's a certain percentage of unemployment that it really impacts our business much deeper. I don't know what that number is, but I would hedge this, I would hedge it and say it's probably, you know, 8% is probably the over/under. You're 8% and above, that will probably have a deeper impact into our business. If you're 8% or under, I think you'll have hospitals still won't be able to find enough clinicians. When you get to that 8%, 9%, 10% or higher unemployment, that's where people defer their retirement, that's where their spouses are losing jobs, and they end up working longer or more, or they come out of retirement to work. I think if you get 8% or less, you'd have less impact on it. I think it really, to answer your question, it really depends how deep the recession is. I do think the world's in a different place, so that because of the Affordable Care Act, we have more people on insurance. I do think for Cross Country, with our lease of IntelliFly, our vendor neutral platform, being able to gain market share in new spaces, you know, the vendor neutral space that we've called out is a $20 billion market that Cross Country has never played in before. If we could capture 10% of that market, which is not unrealistic, we just won our first client last month, and we have a pretty robust pipeline. The way vendor neutral works is it's, we get 5% of all the spend that goes through our program. If you have $2 billion and you have a 5% spend, you'd have $100 million in revenue. The gross margins on the vendor neutral technology are very high. They're 90% gross margins, and your EBITDA is between 60-80%. If we can have a $2 billion at 5%, $100 million of revenue, 60% on the low side of EBITDA, you're gonna add $60 million of EBITDA. you know, again, that would even happen in a down market, in a recession, if we can keep capturing market share. I guess when we think about the, some of these dynamics a little bit more, demand stays more stable during a recession because of the Affordable Care Act. That makes sense. When you think about the MSP relationships that you've been doing, can you talk a little bit about how that is a potentially like a buffer to demand dropping? We theoretically, we could increase our capture rate for MSPs. The MSPs, we control all of the contingent labor spend for a hospital. We currently capture between... Well, actually, I think last quarter was 68% of capture, which I think is too high. I think we should be at 60% because I wanna use my excess capacity to win more MSPs to direct clients, then convert them into MSPs. We could, in a very severe market, we could go from a 68% capture rate to an 80-85% capture if we wanted to. We choose not to do that. We wanna make sure that our partner networks and those are the people, the other agencies that support our programs, we wanna make sure that they are well fed, so to speak, and that they continue to support us and that we're very important to them. Some of our competitors don't do that. They go in and that they increase, in a time like this, they'll increase their capture rate higher for a short-term gain, and we look at it as a more of a long-term play. Everything we do, we really try not to look quarter to quarter, and really look at a long-term plan to have great relationships so that we can, as we're winning more and more deals, we have the support of our partner network to fill our needs. Okay. you know, on the, on the VMS side, you know, I guess can you talk a little bit more about that opportunity? I guess why weren't you there? Why are you just going to do it now? Why would somebody, you know, choose you versus something else? Sure. We've never done it before because we didn't have our own technology. We were renting our competitor's technology, which is not the brightest idea if you're going to try to get into this business. What we did was, for years, we could only be an MSP because we were paying the tech fee to our competitors who had the technology. You know, 2 years ago, 2 and a half years ago, we launched to build our own internal system, our own VMS. At first it was just for MSPs. When I got here, they started building it. I moved it over and said, not only is it for our MSPs, which is very important, but we have to move into this vendor neutral space. If, according to SIA, the 2023 healthcare staffing market will be $50 billion. If you take that $50 billion, it's in three different categories. You could argue four now, but there's three different models. There is the direct model, which is about 20% of the market. 40% is the MSP market and 40% is the VMS vendor neutral market. With IntelliFly, we are now able to access that 40%. Now what differentiates IntelliFly is we believe, of course, we built this, so of course, we're gonna say this, we believe it's the best technology out there. Beyond that, if you look at our competitors, no one's producing as much technology as we are on a consistent basis, we believe, than, we kinda see more than anyone in the industry right now. We think that the technology and from what our clients that are on it think it's incredible. We now have over 4,000 users. Remember, we just launched this in January. We have over 4,000 users, a couple dozen clients, some of them obviously were converted, our own clients. We also have 250 partner networks on our system. The system has been, you know, tested. It's a solid system. What differentiates IntelliFly from our competitors, IntelliFly uses insights and analytics to help clients make the right decision of when and how much labor It's more of a analytics tool. The other thing that differentiates Cross Country from the VMS side. You know, Cross Country was founded by a clinician, co-founded by a clinician, a nurse. That is the, you know, the quality of the clinician is always so important to us. We have what we believe, and I've worked at all the larger companies, we have what we believe is the lowest clinical cancellation rate in the industry. It's less than one half of 1%. We also have the highest, what we believe, highest on-time start rate of 95% from the clinicians starting, which we believe is the highest in the industry. Not only do we have a high tech offering, we also have a very high touch offering. I guess, when we still kind of thinking about the recession dynamic. Actually, no, thinking about the COVID dynamic. It feels like from the provider side, there's always a disconnect between how they talk about temp staffing and how temp staffing companies talk about things, that you guys talk about trying to be partners and helping companies reduce spending, and they kind of view it as this number that we have to reduce to zero if we can. It feels like that kinda reached a head during COVID. I guess we're hearing anecdotally about more and more hospital systems looking for just new solutions. Can you talk about, like, how you're seeing that? What are customers today looking for? How is that different, and how are you positioned to target that? As I mentioned, there were three models out there, the direct vendor management or vendor neutral model or the MSP model. There's really a 4th model reemerging. It's a model that's been around before, but it's becoming the vogue model of the day, and that is a self-managed program where hospitals are saying, "We're gonna do it ourselves. We're going to be our own travel nurse companies." You know, I think HCA does a great job with their own internal travel company, but they still only fill 30-40% of their needs, and they have to use their partner network to fill the rest of it. They have 180 hospitals in 26 states where they can draw a lot of firepower, but you can only still fill or capture 30-40%. Hospitals can go and attempt to try this, and we're gonna be there to support them. How we can actually support them is through IntelliFly technology, so that they can manage their platforms on a technology, a travel technology, and also help them manage their internal resource pools. You know, most hospitals, believe it or not, they manage their internal resource pool on Excel spreadsheets and paper and pencils. By us being able to offer them IntelliFly, giving them the internal resource pool, which is tied to our latest technology that we just launched in the app stores this month, which is Xperience. Xperience is a travel app for travelers to upload documents into also to self-submit to orders, but it also is integrated with our IRP pool, our internal resource pool, that core staff can pick up shifts at their hospital right through the app as well. By giving them that technology, we can now play in this fourth emerging model of the self-managed model as the technology player. I guess you've kind of mentioned that there's a little bit more churn people we're looking at. Like, is that showing up? Are you losing clients? Are you seeing clients switch from one to the next? What does the profitability look like if you go from an MSP to a self-managed? Actually, for us, it's actually working out well. You know, look, we never want to lose exclusivity with our churn, and we have a big sales pipeline, which we believe will make up for the churn that we have. The, you know, the silver lining on this churn is it's moving to a self-directed model, self-managed model, and in that self-managed model, we are in tier zero, meaning we're getting the orders just like we used to, many times with a exclusivity period, or carve-outs where we have to fill them. What we've seen so far as these clients have moved to self-managed, we're not losing traveler on assignment headcount. It's, as we anticipated, it's about the same. In some areas, it's actually larger because where there was a dual MSP, where we may have had the Pacific Northwest and another company may have had California, when we move to the self-managed model, we're now getting access to the entire system where we didn't have before. We're getting larger opportunities. The other area that we've seen, with a couple clients is we're seeing a little bit of margin improvement because when we have an obligation to fill with an MSP, we have to fill at whatever percentage gross margin we need to make sure that the client is fulfilled because we have that, you know, that obligation. When we're in this self-managed, we have no obligation to fill those orders. We can pick and choose the better margin orders and not necessarily utilize and fill those lower margin orders. I've heard a couple people talk about this dual MSP, you know, and open up the opportunity. Does that mean that the other MSP operator also has opportunity in your business too? Like, does that increase competition in your In that particular example, no. We got access. The one from the southern one did not get access to ours. One did. We were already in a side-by-side MSP, let's say, in that one. On that one, a third person did not come in, a third company did not come in, but we were able to get into that third company's territory. It was a net gain for us. Okay. It varies by- Each one is a little bit different. All the relationships are a little bit different. Part of what it, with Cross Country being around for 36 years, some of these MSPs, we've had relationships for a decade. We have long relationships there. When they do turn over to self-directed or self-managed, it's not as much that they're getting rid of us as they're moving to a model, so they keep us into a first poll position, because we've been partners for years. I mean, I guess from that perspective, though, to me, it always feels like shopping creates disruption, right? Like, and it's great that they're looking for a new solution but still using you as a vendor. I would think they're looking for a new solution, you'd say, "Well, I need somebody else to come in and do it." Is there any other model that you currently aren't yourself yet doing that you're seeing take off or what's the risk that new model means new? Yeah. You know, other than the self-managed model, that's the only real new model we've seen emerge. Okay. historically, at least recently, you've been able to still be a main vendor into that... Yes. into that customer. That... New model doesn't mean contract doesn't mean business loss. No, very clear it does not mean business loss for us. Again, in certain times it means business gain. Yeah. Okay. I guess when we think about the margins for the business, you guys went through a big change in your cost structure during COVID. From the outside looking in, it's kinda hard to see it 'cause you guys hadn't been above 5% margin for a decade or more, and then you got to 11, you know, 12, and then you kinda say nine, now you're at eight. Like, where is the right margin? How from the outside can we kinda be sure that this is the sustainable margin from here? Yeah, that's a, that's a great question. I think, you know, I like to say we had the misfortune of having a turnaround during COVID, so it's really hard to see what was real and what was a COVID tailwind, and then where the headwinds that we had in the business I don't know, how much of our digital transformation or optimization really took place. I also say this is really not a complicated business. You know, there's three levers and a result. You have your revenue, you have your gross margin, you have your SG&A, and you have your EBITDA as your result. For us, if we're with our capacity models that we use, if we're managing to an 8% business, you're just pulling the other three levers of can we get higher revenue? Can we have some gross margin improvement? If all else fails, you have to manage the SG&A. Okay. You think that there's enough levers there to do that? We do. 'Cause I guess one of the questions that people have is that bill rate down, you know, 30% off the peak but still 30% off 2019, I think there's just a concern of, well, why can't that be down another 10%? If bill rates still had to normalize another 10%, does that change your view about a sustainable margin or- No, you know, what we're doing with our technology that we're investing in, you hear about IntelliFly, you'll hear about experience. IntelliFly is our client-facing technology. Experience is our clinician-facing technology. We're also using technology to create our teams to be more optimal internally. You know, just as restaurants now have kiosks and don't have people taking orders at McDonald's, you can think of our business the same way. We have a lot of things that are now automated that need less human interaction, that will lower our SG&A. We can always ramp those up. You know, so it's a cost, right? You say, "Well, do I really need to do it today? No, I don't necessarily. I can actually use a person. In the future, we can ramp up our technology spends, instead of moving towards IntelliFly and Experience, we can take those dollars and invest it into automating more processes internally for our own organization to create that SG&A efficiencies. Okay. Going back to, like, the customer switching dynamic 'cause it seems like if customers are looking for change, you're big, but you're not the biggest, and so there's an opportunity to gain share when there's people moving around. How do you convince that system who's looking and saying, "I need a different solution" to say either switch MSP providers to me or switch products to me or, like? How do you really differentiate to them? What makes Cross Country different? Well, it's definitely, I think, the technology for us, as we said. It's that analytics, the insights that our technology offers. It's also looking at what we do is we're very transparent with the clients going in, we talk about, "How can we help you understand what's the market conditions and what the market pricing is?" You know, we don't offer bill rates to our clients. We show them market data, they come up with their bill rates. What we do with our clients, we actually show them real-time market changes in where market rates are heading, they're able to then make sure, it's actually embedded within our technology, to make sure when they place an order, that the rates are actually in that market range or if they're below or above market range. It gives them much greater insight than they've ever had before. That helps drive them to reduce costs and also helps drive them to get the right amount of supply at the right cost. 'Cause there's been. Like, you talk about technology a lot. There's been a number of companies who've kinda come with a more technology-focused manner here. I mean, has that been disruptive at all to you? No. No, No, I'll tell you why. All right. We have all these technology companies that are coming in, and I think the one thing that technology companies really brought to the market started about 2015 with the Nomads and Trusted, and they did a great job of pay transparency. We didn't have pay transparency before. Now you can look at any website ad, and you can see exactly what the clinician will make, and that's something that they brought to the market. If you look at what they did, they don't have the client penetration that some of the larger companies with scale have, and they're having a hard time getting to scale. We don't really see those technology companies as a competitor, or a threat, to us, because, you know, I think it's Larry Ellison who said, "Even my cat can build an app." Technology anyone can build. It's really do you have the infrastructure? Do you have the people? Do you have the sales folks and the sales organization team? Do you have the contacts at hospitals? Do you know who to contact at the hospitals? Then do you have relationships? We think Cross Country, with our 36-year history, has all those. If you don't and you just have technology, maybe you can hit lightning in a bottle and you can have a good run, and there have been a couple companies that have done that. The companies that had success in the vendor neutral space recently, they've been around for six or seven years with their technology. Their technology is also six or seven years old, like no one talks about. It's not as high tech as they think it is. They like to proclaim that it's a lot of high tech technology, but it's not. We really are the people on the block that have the newest technology, which, you know, we think and our clients are saying is beyond what anyone else has right now. All right. Great. I think that's all we have time for. Thank you very much. Thank you, Kevin.