Welcome to the first quarter 2008 earnings call. (Operator instructions). Today's call is being recorded. If you have objections you may disconnect at this time. I would now like to turn the meeting over to Mr. Howard Goldman, Director of Investor and Corporate Relations. Sir, you may begin.

Good morning. Thank you for listening to this conference call which is also being webcast and for your interest in the company. With me today are Joe Boshart, our President and Chief Executive Officer, and Emil Hensel, our Chief Financial Officer. On this call we will review our first quarter 2008 results for which we distributed our earnings press release after the close of business yesterday. If you do not have a copy, it is available on our Website at www.crosscountryhealthcare.com. Replay information for this call is also provided in the press release. Before we begin, I would first like to remind everyone that this discussion contains forward-looking statements. Statements that are predictive in nature that depend upon or refer to future events or conditions or includes words such as expects, anticipates, believes, estimates and similar expressions are forward-looking statements. The statements involve known and unknown risks, uncertainties and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. These factors were set forth under the forward-looking statements section of our press release for the first quarter of 2008 as well as under the caption risk factors in our 10K for ended December 31, 2007. Although we believe that these statements are based upon reasonable assumptions, we cannot guarantee future results. Given these uncertainties, the forward-looking statements discussed in this teleconference might not occur. Cross Country Healthcare does not have a policy of updating or revising forward-looking statements and thus it should not be assumed that our silence over time means that actual events are occurring as expressed or implied in such forward-looking statements. And now I will turn the call over to Joe.

Thank you, Howard and thank you to everyone listening in for your continued interest in Cross Country Healthcare. As reported in our press release issued last evening, our revenue for the first quarter of 2008 $179 million, up 2% from a year ago. Our net income in the quarter was $5.9 million, up 22% from the prior year and our earnings per diluted share of $0.19 were up 27% from the prior year, primarily reflecting a substantial improvement in our profit margins along with a reduction in our share count. Cash flow for the first quarter was $11.3 million. Our first quarter performance exceeded the expectations we set forth in March because of a more favorable than expected performance across all of our business segments, especially higher than expected hours worked per week and better margins in our travel nursing business, as well as strong results from our physician and executive search business. Year-over-year result also benefitted from the contributions from the two acquisitions made in our clinical trial services business last summer, which also performed above expectations in the first quarter. I want to thank all of our employees for delivering better than expected results in a difficult operating environment. In our travel nurse staffing business, the story remains much the same as last quarter. We experienced further margin expansion over the prior year quarter, primarily as a result of continuing widening of the bill-pay spread. Our housing cost as a percent of revenue declined sequentially from the fourth quarter, reflecting our continued focus on this important area of cost, and we achieved rise in bill rates in the low single-digit range. Should be noted that all of these positive performance trends have occurred for three consecutive quarters. In addition, we are also encouraged that this surge in demand…

Thank you, Joe, and good morning, everyone. First, I will go over the results for the first quarter and then review our revenue and earnings guidance for the second quarter that we provided in last night's press release. Consolidated revenue in the first quarter came in at $179 million, approximately $1 million above the upper end of the guidance range. Revenue was up 2% versus the prior year but down 1% sequentially. The year-over-year increase was due to the clinical trial services acquisitions as well as our search and education businesses partially offset by lower staffing volume in our nursing and allied staffing business that Joe referred to earlier. On a sequential basis, the modest decline is attributable to one less day in the first quarter as compared to the fourth quarter. Our gross profit margin was 25.2%, up 220 basis points from the prior year but down 50 basis points sequentially. The year-over-year margin improvement was due to the continued improvement in the bill pay spread in our travel nurse staffing business, and secondarily to a higher mix of revenue from our clinical trial services and other human capital management business, which have higher gross profit margins than our nurse and allied staffing business. The sequential margin decline was less than we anticipated as the expected impact of the payroll tax reset was partially offset by the afore mentioned improvement in the bill pay spread. SG&A expenses in the first quarter were up 9% year over year and 1% sequentially. The year-over-year increase was due to the additional overhead associated with the two clinical trial acquisitions as well as higher compensation expenses, which is partially due to the impact of FAS 123(R). The small sequential increase in SG&A was due to the reset of payroll taxes. Net interest expense…

And thank you. We will now begin the question-and-answer session. (Operator instructions) And our first question comes from Bruce Ackermann with Sandhill Equity Research. Bruce Ackermann – Sandhill Equity Research: Good morning, gentlemen. Could you talk a little bit about in the clinical trials sector, the organic revenue growth in margin situation and that was in there?

The organic – our legacy ClinForce business had a essentially flat performance year over year on the top line, but substantial improvement in margin on the bottom line. There is a little bit of lumpiness in terms of the revenue growth of this business as it very much depends on when new trials come on and all the trials get completed. So, it could have some timing issues as to the revenue growth, but the business is performing quite well and we are very pleased by the growth prospects, and the pipeline that the business has in terms of future trials. 7 Bruce Ackermann – Sandhill Equity Research: Okay. Thank you for that. And one other question, in the nursing business, you mentioned Arizona. Is Arizona impacted by that hospital association purchasing group? Is that part of the problems in Arizona

I'm sure there is an impact Bruce. I don't think it's the biggest impact. I think just given the unique geographic features of the – particularly the Phoenix market. If the demand were sufficient, the hospitals would have to go outside their buying group and get nurses to come to their facilities. And we have supplied nurses to hospitals outside that buying group at certain periods in the past. So, I'm not sure that it has been a little disorganized, more disorganized than it had been in previous years as far as who's doing what for whom, given the Justice Department's review of the – into the trade implications of what the association is doing. I think the bigger part of what's going in Arizona is just the demand was less, Bruce. I think it was impacted by the very strong housing and construction market becoming a relatively weak housing and construction market, which encouraged nurses to work more hours and therefore soaked up some of the excess that we might have benefitted from historically in that market, particularly in the winter months that just didn't seem to happen that of the same degree this year. We have seen in Arizona a strengthening of the market, it's still down year over year, but we have seen directionally an improvement in Arizona particularly from that low point in February that we referenced in our formal – in the prepared comment. So, I'm optimistic, but right now it's still relatively weak year over year in positions and working nurses. Bruce Ackermann – Sandhill Equity Research: Okay. Thank you for that. That's all my questions.

Okay, Bruce. Thanks.

And our next question comes from Jeff Silber with BMO Capital Markets Jeff Silber – BMO Capital Markets: Thank so much. Just a quick guidance follow up question. What type of pricing increase assumptions are you using for your nurse and allied business in the second quarter?

3% to 4%, year over year. Jeff Silber – BMO Capital Markets: Great. Okay. And then just moving back to the clinical trails business, I know it's a lumpy business on a quarter-to-quarter basis, but over the long term, do you feel that business is a faster growing business than your traditional nursing business and also what kind of sustainable margins do you think that business can get?

We believe that at least in the short term, I think the answer is yes. We believe it has faster growth prospects. The number of compounds that are in trial has been increasing and ClinForce is very well positioned to – not just ClinForce but all of our clinical trials businesses are very well positioned to take a reasonable share out of this business – potential business. The margin for the segment, the contribution margin within the 15% range, and I think that's a reasonable expectation going forward as well. Jeff Silber – BMO Capital Markets: Okay. Great. Just a few other numbers questions if you don't mind. What kind of share counter are you using for your second quarter guidance?

Approximately $31 million on a fully diluted basis. Jeff Silber – BMO Capital Markets: Okay. And what was stock-based comp in the quarter?

Approximately $200,000, and it's projected to grow to approximately $400,000 in the second quarter. Jeff Silber – BMO Capital Markets: Okay. And then going forward, is that the run rate we should be using?

For the remainder of the year, yes. Jeff Silber – BMO Capital Markets: Okay. Great. You mentioned some of the earn out payments, are there any more earn outs on the AKOS acquisition or you doing [ph] those as well?

No. That still has a fees left, that will based on 2008 performance. Jeff Silber – BMO Capital Markets: And that will be paid in the first or second quarter next year?

First quarter of 2009. Jeff Silber – BMO Capital Markets: First quarter of '09. Great. Okay, I'll let somebody else jump on and I'll get back in the queue. Thanks.

Yes. Thanks, Jeff.

And the next question comes from Jim Janesky with Stifel Nicolaus Jim Janesky – Stifel Nicolaus: Thank you. Good morning Joe and Emil. Couple of questions. First, with respect to the nursing segment, why do you feel or what you are hearing in the field, why increased levels of demand at least in the near term are not translating into bookings at this time? We've seen this happen in the past 3 to 5 years on a couple of different occasions. I'm just interested to know why you think it's happening now.

I would go back to my prepared remarks. If nurses don't – we don't have an inventory of nurses that aren't placed. Generally, the nurses that we have, they want jobs and are willing to travel are placed. So, when we see a spike in demand or particularly an unseasonal spike in demand, that is unanticipated, we don't have nurses. We can't call nurses that, they are thinking about it, may be they'll take an assignment sometime in the future, but they don't jump at opportunities if it doesn't – if they are not confident that they are going to have another really good contract for them in three months when they come off assignment. They are full time nurses, they generally have full time or financial obligations that are consistent with full time employment. So, nurses want to see before they get into our employment model is a sustainable level of demand that they will find attractive high-paying jobs in settings that are interesting to them, and a near term 40% uptick in demand is generally not conducive to them taking that risk. Now, as I said, if we – the level of demand appears to have sustains that I believe it's more than just a flu related activity. I think there may be some uptick relate to non-Medicare admissions as people that have elective surgeries they've been putting up, maybe half those surgeries because they want to make sure they do it while they insurance. There may be other factors, may be we are just seeing a improvement in the secular trends consistent with the demographics of the population which is growing and aging. Whatever the reasons, if we see a continuation of consistent and even growing demand as we head into third quarter and the fourth quarter of next year, I'm actually pretty optimistic that we are going to restore volume growth momentum in this business. That's not where we are today, and we don't want to give you the impression that we have a near-term expectation. We did I think we did get some benefit out of the pick up and demand related to – we've slightly more nurses working, and the nurses we did have worked more hours per week than we anticipated they would work. So, I think there was a – it was reflected in our results in the first quarter, but the second half is when I believe we will see a potential benefit from this pick up and demand assuming it sustains itself through the summer. Jim Janesky – Stifel Nicolaus: If you had more nurses willing to travel, you think you would have better volume trends?

That's always true, Jim. If we had an infinite number of nurses that are willing to go wherever we had jobs, we would be a much bigger company. It's again the consistency with which our recruiters are calling nurses, sharing information on jobs, they are going on to our Website, seeing where we have jobs available. They are talking to other nurses that they are working next (inaudible) in the day or whatever their shift is. And they'd say, there's great opportunities in Seattle and Hawaii and they are getting them excited. They are not hearing that kind of information, they – I'm not going to quit this job. This is a pretty good job. I've good seniority. I get the shift I want. If I leave and come back, maybe I won't – I'll get to the bottom of the line as far as shift preference and I may be working in the night shifts, when I really want to work the day shift. That's just the thought process that a nurse has to go through. She has to have the confidence that we are going to have really good jobs that are great paying jobs and great settings every time she comes off contract, otherwise she's not going to leave that full time employment that she's engaged in. We don't recruit nurses that aren't working full time in a hospital. So, it's not the nurse that coming back into the workforce, and we are only recruiting nurses that are actively engaged, working in a hospital today, a little risk of hers, and are not willing to give up that attractive position that they currently have for a flash in the pan if the flash sustains itself what it appears to be doing then I would be – than I'm more optimistic that the second half will show some better trends. And the dynamics of our bookings do appear to be stabilizing, there was a negative bias really beginning in the second half of last year that carried through the first quarter. It does appear to be stabilizing, and that's what you need to have happen before you can begin the grow your momentum. In the future, we are seeing better trends in our applicant activity, so there are good dynamics. It's just not yet reflected in our booking trends. Jim Janesky – Stifel Nicolaus: And shifting gears to clinical trails business, can you give us an idea what type of visibility you have there in? What is the difference between and backlog and pipeline? Is backlog some business that you won, waiting to start and pipeline is what you are bidding on?

That's exactly Jim. And out backlog would suggest that we continue to have $100 million run rate of business. Having said that and when we speak to the management of this business, there is enough going on that they feel pretty good about and a greater breadth of opportunities that they are viable bidders on. They are optimistic that the second half as business begins to resume organic growth. Jim Janesky – Stifel Nicolaus: Okay. Thank you.

Thanks Jim.

And our next question comes from David Bachman with Longbow Research. David Bachman – Longbow Research: Good morning. How are you?

Good David. David Bachman – Longbow Research: A question on nurse allied. Can you remind me what the breakdown is there between nursing and allied, and then perhaps a little bit more color on what you are seeing in the allied portion of that business?

The allied accounts for about 7% of our revenues, that's a relatively smaller business. And it consists really of three product lines primarily that have different dynamics. The rehab product line is our largest of the three, and it's exhibiting good growth year over year. But the overall performance is being dragged down by negative trends in our imaging business, our radiology tax, as well as our respiratory therapists.

The overall, David, is the business declining year over year. And that's our expectation really for this year. The rehab business is probably not big enough to offset the relative weakness we are seeing, particularly in the rad tech and very disappointing and unexpected to us was the weakness that we are seeing in the repertory therapy area as well. David Bachman – Longbow Research: Right. Okay, okay. Good, that's helpful, and that seems consistent with what we are hearing other places. Can you – when they talk a little bit more about Arizona but just on the geographic bases, you are still seeing some softness. You said that it's continuing to add to the first quarter, can you just give us a little bit more color and maybe where you are seeing pockets of strengths or areas that are still softer than even you've had been expecting?

I would actually qualify the comments. Really for the 16 months, we've been saying that demand is lower year over year. And really today is the first time we can say that demand is up year over year. It is not evenly – our experience is not even across the country. The good news is probably the greatest strength we are seeing today is the biggest state for our placements today, which is California. California is showing strong growth year over year, Arizona is down year over year but so far this year is showing good sequential improvement in demand dynamics. Weakness is the Southeast is pretty weak, Florida in particular is very weak year over year, and doesn't show signs of really resuming growth in the short term, it's been pretty disappointing and that's a very important market to us, it's our second largest market. The Northeast, mid-Atlantic, upper Midwest are showing pretty good demand dynamics. Northwest has been strong for several quarters, continues to be strong. So, it's an uneven performance David, but its' – I'm encouraged that we can actually demand is up year over year, and as we head into the summer the comparisons year over year, particularly in the seasonal markets were so weak last year in Arizona and Florida that I'm optimistic we can show some better trends and better comparisons year over year as we get to the second half. David Bachman – Longbow Research: Great. So, if supply beings to loosen up a bit, there's defiantly some advantage there. And then can you just – we've seen some legislation on the nurse visa renovation [ph] issues brought forward. Just can you remind me what that means for you, is anything I guess looking forward maybe into 2009 story, is a story at all?

We don't – given the dynamics of immigration, we have not invested heavily in a robust pipeline of perspective nurses trained in foreign markets. But there's not a tremendous upside. Today that business represents about 1% of the nurses we have on contract, down from probably a peak of 2% historically as it's a relatively new effort for us. This decade the dynamics haven't been good this decade from a immigration perspective. So, there's not a tremendous upside. There would be an upside, it just probably last time it would be for other companies. David Bachman – Longbow Research: Okay. That's helpful. Good job in the first quarter, and I'll jump off here. Thanks.

Thank you, David. Appreciate it.

Our next question comes from Michel Morin from Merrill Lynch Michel Morin – Merrill Lynch: Yes. Good morning.

Good morning, Michel. Michel Morin – Merrill Lynch: Couple of quick ones. First, the contribution margins in the nurse and allied or in health care staffing were good, but to me it's a little bit lighter than what I would have expected given the stronger top line. You mentioned the headwind from insurance, could you quantify that by any chance?

Well, the impact – well, first I want to give you a little backend. With self-insured on health insurance and given the population of nurses we have insured, we always expect the number of large claims at any given time. This particular quarter, we had just unusually high number about twice as much as you would normally expect at this to claim. So, it's really just driven by current claim experience, and the impact on the contribution income was roughly, it was close to $0.02 a share, it's a little under $1 million. Michel Morin – Merrill Lynch: Great. Okay. And then I wanted to drill down a little bit on the Per Diem. I think your release said that you saw some growth there, and I was wondering Joe, is there any – is that telling us anything about – is it a confirmation of the stronger (inaudible) than your seeing or how should we read that 35% I think was the number increase?

Yes. I don't want to read too much into it. I'm very encouraged by it, Michel. I – again we are not in – we are not a broad nationally positioned Per Diem Company. We are in 17 markets. So, those markets might have different dynamics than other markets nationally. But we are encouraged by the short term, near-term dynamics of our Per Diem business. They tend to have a broader base of customers. For example, they do more businesses with nursing homes than our travel business does. So, again there may be some different dynamics within the mix of where we are generating at FTE growth. Some of the growth probably disproportionately has been in lower value specialties like CNAs and LPMs, then specifically RNs. But we are encouraged. We are not overly excited by it. It's just as nice to see that business get its footing. We have excellent management in that business. We do look to grow that business over time, not through a large acquisition of a broad based provider, but really market by market, where we can achieve a significant market share in the Pre Diem business. We would be very interested in getting into that market through acquisition or organically. So, it's been a pretty disciplined approach so far, but we like the business and we would like to grow in the business. I don't think the dynamics tell us so much about the near-terms opportunity, but they are pointing in the right direction. Michel Morin – Merrill Lynch: And that business is profitable and has remained profitable even as its been under pressure these in the last few year?

It's profitable since we bought it in 2003. Michel Morin – Merrill Lynch: Great. And then finally, just to clarify something on the Assent earn out. Was that also a good will?

Yes. Michel Morin – Merrill Lynch: Great. Thank you.

Thanks Michel.

And our next question comes from Jeff Silber with BMO Capital Markets Jeff Silber – BMO Capital Markets: Thanks. Just a quick a follow up. You mentioned in your remarks, the weakness in the respiratory therapy business. I know it's relatively small piece of the business, but if you can provide a little bit more color what's going on, I would appreciate it?

Well, what we are hearing Jess is there – initially we didn't have a flu season. We did have a flu season, we saw a little bit of pick up later in the first quarter, but not to a point that gives us hope that the worst is behind us in this business. What we are hearing is that, you've just seen greater numbers of respiratory therapists trained and available to work at hospitals. And really the dynamics of these allied disciplines tend to be very different from the nursing business. The nursing business again is it's 25% of a hospital's operating cost. The nurses are perceived to be fungible. The hospital when they are looking to control costs, they typically focus on the nursing segment. A lot of the other disciplines, although, it's not true of respiratory therapy. But a lot of the other disciplines like the rad, the x-ray techs and the MRI techs. If the hospital doesn't have them, they are very expensive capital equipment that's idol. So, they are willing to pay more and is not – there's a handful of those professionals within the acute care hospital. So, the hospitals can double salaries in the short term, so that they have a feel that they are generating revenue from the imaging that they can do with their patient population. Whereas the nurse is really – it's cost center and the opportunity for – sometimes it's actually nurses going back and when they see that ultrasonographers are making more than they are. They will go back and get the certification to be an ultrasonographer. It's not a year long process, it's tends to be weeks to 6 months for a lot of these allied disciplines to get the training for certifications or licenses that you need. So, I think the market can respond more quickly in these smaller professional disciplines than it been in (inaudible) nursing, and that's why we still love the travel nursing business. We think it's the long term, it's a great place to be because of the very unique labor market dynamics that are present in the nursing market. Jeff Silber – BMO Capital Markets: So, given all that would you say that the nurse business is probably a more profitable business than the allied business?

I think if we are only an allied provider, we would have lower profit margins than we do today. Today, we really offer allied as an associated service we are generally to same hospitals. We put the rates for the disciplines on the blanket contract that we have with the hospital. The hardest part is to get the contract. So, once you have that, and you can just add these disciplines. It's a fairly efficient add-on service. If we are purely allied, we would not be as attractive an investment opportunity. Now we said that there are other companies that focus on some of the higher end disciplines in allied CRNA, nurse practitioners, the radiation therapists which are much higher end disciplines. We don't tend to be a strong but in the disciplines that we are in I'm glad they are not our only offering today. Jeff Silber – BMO Capital Markets: Okay. Appreciate the help. Thanks so much.

Yes. Jeff.

(Operator instructions)

Okay. If there are no further questions, and I –

And I'm showing no further questions.

Okay. Thank you. I appreciate that, and I want to thank every one for joining us this morning and we'll look forward to updating you our second quarter this summer. Take care.

And thank you for your participation in today's call. Please disconnect your line at this time.