Thank you, and good afternoon, everyone. I'm joined today by our President and Chief Executive Officer, John Martins; as well as Bill Burns, our Chief Financial Officer; Dan White, Chief Commercial Officer; and Marc Krug, Group President of Delivery. Today's call will include a discussion of our financial results for the third quarter of 2022 as well as our outlook for the fourth quarter. A copy of our earnings press release is available on our website at crosscountryhealthcare.com. Please note that certain statements made on this call may constitute forward-looking statements. These statements reflect the company's beliefs based upon information currently available to it. 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 2021 annual report on Form 10-K and quarterly reports on Form 10-Q, as well as in other filings with the SEC. The company does not intend to update guidance or any of its forward-looking statements prior to the next earnings release. Additionally, we 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, those calculated in accordance with U.S. GAAP. More information related to these non-GAAP financial measures is contained in our press release. Also during this call, we may refer to pro forma when normalized numbers pertain to our most recent acquisitions as though the results were included or excluded from the periods presented. With that, I will now turn the call over to our Chief Executive Officer, John Martins.

Thanks Josh and thank you to everyone for joining us this afternoon. Before I get started, I'd just like to take a moment to welcome the newest members of the Cross Country family that joined us this past month through our recent acquisitions of Mint and Lotus, two physician staffing companies that we believe not only expands our market presence, but brings us a talented team of professionals to join the ranks of Cross Country Locums and sets the stage for accelerated organic growth. Welcome, Mint and Lotus. The third quarter marks six months for me as CEO of Cross Country, and I'm amazed and excited by what we have achieved during this time, as well as what lies ahead. As an organization, we continue to execute well across so many fronts from sales to delivery and across our technology initiatives. Our unwavering commitment to always act ethically and to deliver best-in-class service has positioned us as an integral partner to the thousands of clients and tens of thousands of clinicians and professionals we serve. Our success is rooted in the dedication of our employees and their commitment to maintaining a vibrant workplace culture that stresses the importance of diversity, equity and inclusion. And the culture of Cross Country has never been stronger as evidenced by our recent recognition with the Best Companies for Happiness Award from Comparably. We take great pride in becoming the employer of choice for so many, and will continue to elevate and evolve our organization by investing in our people and culture. As noted in our press release today, we posted another strong quarter for both revenue and adjusted EBITDA, exceeding the upper end of the guidance ranges we shared at our Investor Day event in mid-September. In addition to highlighting our outstanding leadership team,…

Thanks John, and good afternoon, everyone. Once again, we've delivered results that have exceeded our expectations with both revenue and adjusted EBITDA above the high end of the revised guidance issued during our Investor Day in mid-September. The overachievement relative to the updated guidance was driven by better than expected performance across several lines of business, including education, physician staffing and search, as well as the impact from a small labor disruption we supported in the final weeks of the quarter. We continue to execute well across multiple fronts and experienced robust year-over-year growth across all of our lines of business. And as a result, consolidated revenue for the quarter was $636 million, up 70% over the prior year, and down 16% sequentially. The primary driver of our growth continues to be the number of professionals on assignment and to a much lesser extent the impact from rates. Gross profit was $144 million which was up 71% over the prior year, and down 16% sequentially. Gross margin of 22.6% was flat sequentially, but up 20 basis points over the prior year as we continue to see a decline in COVID-related crisis orders and a normalization in bill pay spreads across our travel business. Our solid topline performance combined with improved productivity and operational efficiencies fueled another quarter of strong earnings with adjusted EBITDA of nearly $64 million representing a margin of 10%, making it the fourth quarter in a row of delivering double-digit adjusted EBITDA margins. Turning to the segments. Nurse and Allied reported revenue of $612 million, representing an increase of 72% over the prior year and a 16% decline sequentially. Our largest business, travel nurse and allied was up nearly 90% over the prior year, fueled by an increase in the number of billable hours of more than…

Thank you. We will now begin our question-and-answer session. Our first question comes from Kevin Fischbeck with Bank of America. Your line is open.

Great. Thanks. I guess maybe the first question. The quarter came in better, the guidance for Q4 is coming in better, but you haven't really changed the outlook for next year. I mean, are you still thinking then, that ultimately the bill rates stabilize at the same rate you thought before or you now certainly think that the starting point for next year is probably going to be higher and that there could be some upside for the next year outlook?

Sure. Hi Kevin, thank you for the first question. This is John. I'll start and then have Bill add some more color. But yes, when we're looking at in terms of our guidance or what our targets were for 2023 that was really the minimum target we are looking at about $2.2 billion and that $200 million of EBITDA and we at this point again not having that perfect crystal ball in front of us. We're looking at where rates have leveled off and if we look at what happened with the rates, we saw the rates going on a decline, as we got -- went through the year. And right now, what's happening is, some of the higher rates that were in the beginning of the year and through second quarter those people are coming out the silence now, and that we've leveled off those bill rates. And so, as we see in the future we're thinking the bill rates are -- will remain stable at current rate they're at. But what I would say is, there is a lot of different trends from the macroeconomic trends that could have impact on those rates. And of course, we will talk about rates, I'd be -- we miss not to talk about the supply and demand that really causes the rates to fluctuate. And so, because there is such a widespread between the demand and supply imbalance, there's a lot of volatility that could happen in next year, but as of now, this $2.2 billion of revenue is the floor we see and we do think that there is potential upside to this, but we're also cautious to say that there could be some headwinds of macroeconomic trends that could impact that. And so, when you look at this $2.2 billion minimum floor we have -- could you think about us hitting that below right down the center of the fairway. Bill, do would you like to...

Yes, sure. John made the point I was going to make, which is, it was minimum guidance as we called out. And look there is a lot of unknowns as we look at 2023, the potential for further economic disruption. The potential pullback in some demand for contingent labor although again not seeing that today. Is it possible rates could go down a little bit further? Of course, I mean, if you recall earlier this year we had thought it would be a sequential double-digit decline, we're now calling for high single. So, there's a little bit more room we would anticipate that is there, potentially on the rate side, but after four months of kind of seeing the stability in the rates, it's hard to see when that might play out that way. But -- so to John's point, there is some potential upside there, I remind you, the other lines of business are growing well, we're seeing phenomenal growth in our homecare, out of our education, our search businesses. So that's why we've not changed the $2.2 billion, but I think as we get through the fourth quarter we'll obviously look to give you a little bit better lens on 2023.

And I guess due to that some of the variability in bill rates is due to the changes in the prices or as a percentage of total. Is there a way to kind of give us that number? Where was that as a percentage of total orders in Q3, and was that normally like 2019 and pre-pandemic?

No. Kevin, we've stopped actually tracking things as crisis orders. I'd say that in the third quarter, even if I look at the labor disruption rates that we saw, they were not like remarkably different than what we're seeing in the broader marketplace. So the market is settling into a more of a premium rate relative to pre-pandemic. I wouldn't call them necessarily premium rates today, it's really just what the market is demanding. So, as far as splitting it down to be an arbitrary split to tell you how the percentages are shaking out relative to pre-pandemic because we just -- we simply are not flagging orders as premium rate orders or price disorders.

And then maybe just last question. You mentioned that the pediatric respiratory cases aren't coming in seasonally the way that you -- I mean you hear a lot about it, I guess in the news about the triple -- calling it now, is that because -- are the hospitals just waiting to actually kind of see it fully come through before they ask for that staff? Is there a reason why they wouldn't be staffing up in front of that, any color there?

Sure. I'll start, and then maybe, Marc, you want to add. But we -- as we said we're seeing cases come up, and obviously, if you watch the news in the media, right, what you're seeing is tons of patients being diverted and going 70 miles to get to a hospital. And so we are seeing an uptick in pediatric specialties, but not at the surge that we would have expected with the triple threat of RSV, of the flu, and a little bit of COVID in there. And so what we're anticipating that could happen to be a scenario as these children are getting with this triple threat and now as we're heading towards the holidays, you have Thanksgiving and the December holidays coming up, plus in most of the country, it's going to become a little bit colder and more people will be inside, we think that, that triple threat has the potential to really cause an increase in demand towards the end of the year, New Year. Now, when we look at our numbers of the $2.2 billion for next year, these potential tailwinds are not baked into those numbers at all. And of course, we're hoping that this doesn't come to fruition, but we are very well prepared with the capacity of our recruitment team, with our sales folks going out to potential new clients to make sure that we can help serve the communities and the hospitals and the patients at the bedside if it comes to fruition that we have this triple threat surge move into the adult population as well. Marc or Dan, do you want to add anything to that?

Sure, John. I mean, we have seen most recently a sharp increase in the pediatric respiratory orders, probably not as strong or as high as we would have expected at this point, but overall pediatric order volume has increased almost 20% since the start of Q4. So that's more in line with what we expect.

And this is Dan. What I will add is that we have a decent number of children's facilities that are in our pipeline for sales and one of the things that we like to do is to have capacity to help those customers that are in our pipeline and so we're getting reached out to kind of in a real-time basis right now for assistance on some of those specialties specifically.

Great. Thank you.

You bet.

Our next question comes from A.J. Rice with Credit Suisse. Your line is open.

Thanks. Hi everybody. Maybe just trying to get my arms around the market dynamics again. I think you guys may have been the ones that had said earlier in the year that maybe in the early part of the summer, the rates had gotten to a level where some travel nurses were saying, hey, at that level, I'm just going to go back into my permanent job, is that -- how much of a constraint is that on seeing declining rates the fact that it hasn't declined? Are we at a point now where if it were to continue to decline, it would start to drive some nurses back? And another dynamic we sometimes see or we saw many years ago at this point is nurses get nervous about whether their permanent job is still available to them and begin to think that maybe they should go back and I wondered if the economic backdrop is unsettled enough or not really that, that may be part of the equation and what you're seeing on nurses that are out on travel, but wondering whether they should go back. Is that entered into the equation at all?

Sure. A.J., it's John. So I would say that when we look at where we are with that core nurses that moved out of their core positions to move in travel, sure, some of them definitely went back -- after Q2 and into Q3, went back to their core jobs. But we don't believe that these -- the nurses are thinking -- it's like musical chairs that if they don't go back into their job -- into a core job there won't be any chairs left. When we look at the macroeconomic trends, unemployment is still at a historic low. And when we look at the JOLTS BLS data, if we look at -- from the Affordable Care Act in 2014 to today, open positions have increased by 233%. And then when we look at the ratio of open jobs to hires from the BLS JOLTS data, historically that number has been a ratio of less than two and probably somewhere between 1.5 to 1.7. It hit a high in March of about 2.94, and currently in September it stands at about 2.8. So the clinicians that we're speaking to they realize there's a lot of jobs out there, hospitals, of course, understand that they need to hire for the core staff. And at Cross Country what we're really doing is, we're looking at how we can help hospitals really solve the challenges of the core staff. Because if you look at the studies that have been out there, I think it was McKinsey, I believe who had study a couple months ago that said there's a 400,000 nurse shortage today in United States. And then, if we look at every study we talk about this all the time, right? If we look at all the different studies out there over the last year or two, in the next 10 years, it's going to be a 1 million nurse shortage. And so, the demand is there, the demand will continue to be there. But for us, it's working with hospitals to say how can we upskill clinicians to get to acute care. How can we create more pre-receptors and educators to create more supply into the hospitals? But what we're looking at is for the foreseeable future there is going to be this incredible CASM of the supply-demand imbalance that's just not going to go away. And even if we were to have a macro economic downturn, it would take a lot for it to turn from this historic high demand where unemployment rates would have to pre-significantly high for clinicians to say hey, I am going to return to a permanent job. Dan?

Yes. A.J., this is Dan. I would like to sort of add to what John said, I think everybody realizes that we have an RPO and search division, which does in fact help people, our customers with filling their permanent positions, that business itself is somewhere between $25 million to $30 million now up over 60% year-over-year. So, we have a huge opportunity to help our customers with these problems. And so, it's beneficial to us to do that about -- I would say about 80% of that is our RPO business, which is more consistent in a recurring revenue. So for us, it's kind of a little bit of both sides of the equation.

And A.J., this is Bill. If I could just put a point on that, how we're seeing it relative to our numbers and we don't guide at the business level, for us sequentially in the fourth quarter we are expecting volumes to essentially be flat. So we're not seeing a falloff in HCPs or healthcare professionals willing to take assignments, and so that's how we see the fourth quarter shaping up.

Yes. And A.J., just to add to all of that, we did see renewal rates drop in Q2, which means a portion were going back to their core jobs, but at this point, we are seeing them back up, which for me means it's probably leveled off at this point as rates have stabilized.

Okay. And then, maybe just looking at the other side of the coin, we're reading so much about hospitals, facing downgrades, swinging to operating losses. You said that hospitals are hurrying out there, but they obviously need nurses to service the patients or it's just a vicious spiral. What -- any interesting aspects to that discussion, ways they're leaning on you that may be different than history to try to figure out ways to address the current environment in which they find themselves?

Yes. A.J., this is Dan. I'll maybe start to add and see if anyone else wants to add in some color. Just this past quarter, we started a team that does workforce optimization for our clients, so we'll go in do an assessment of kind of how their utilization is working on a unit-by-unit basis across the system, and then give them advice for how exactly to fill those gaps, if you will. We are building technology that helps us take that currently a very manual process and make it a deeper part of our Intellify platform. And so, ultimately, what we want to have for our customers is, manage your core staff better, supplement that with regional or local flow pool resources and then bring on your travelers to augment that. And so far the reception on that process, if you will, is really high both from existing customers and prospective customers.

Okay, great. Thanks so much.

You bet.

Our next question comes from Brian Tanquilut with Jefferies. Your line is open.

Hey good morning guys. Good afternoon guys and congrats on the quarter. I guess just a question again on the bill rates, is there a seasonality factor that we should be thinking about it? I appreciate that it's been flattish for the past few weeks, but any thoughts on seasonality and pricing that we should consider?

Hey Brian, it's Bill. Thanks. No, I don't think there's a real seasonality to our bill rates, certainly not across the travel business. We don't typically see that at any point in our history. And I know that in the last couple of years, it's hard to point to history and say that that's a good predictor, but we do not normally see a seasonal fluctuation in bill rates. There may be specialty needs, and then maybe geographic needs that vary throughout the year, but not on the bill rates.

I would just add to that, Brian. This is John. That I think what Bill said is, the geographical and the regional rates have changed. I think when we looked at COVID during most of that two-year period was a national rate because everyone have the same surge in demand. Now, even with pediatric, we're seeing pockets of areas that get hit with the triple threat. Now it's spreading more and more, so it may become a national price, but I think regionalization pricing is really what we're seeing more of.

Got it, okay. And then, as I think about the locums business, I mean, any feedback so far that you've heard from your clients in terms of cross-sell opportunities as you try to get bigger and deeper in that locums space?

Yes, I'll take that one, Brian, this is Dan. We absolutely are getting tons of interest from customers for physicians obviously that helps them on the revenue side of their equation and so on and so forth. So the other thing that I would say is that from a cross-selling opportunity we don't have locums in most of our MSPs. In fact, it's one of the best areas and one of the reasons why we wanted to add this capability. What I might add too is just from integration perspective, we are already seeing those teams fill each other's orders if you follow me. So the existing locums team here at Cross Country is filling orders that were with both Lotus and Mint and vice versa. And so, the kind of integration leverage we're getting out of this is incredibly high which again gives us more confidence to go into our customer base.

Again, this is John. I would just add that also with the acquisitions of Mint and Lotus, that's really helped us create more capacity than we've had before, and that business if we look at where that business is trending Brian, it's going to be roughly $150 million business, giving us more capacity to help us be able to bring that offering to our clients in a larger scale than we could have ever done before.

Awesome. Thanks guys.

Our next question comes from Tobey Sommer with Truist Securities. Your line is open.

Thank you. I wanted to start on gross margins. When do you expect gross margin compression? And what kind of strategies do you have in mind to sort of cost some of that gross margin back?

Hey Tobey, this is Bill. Well, look, I think part of it is, it's always a competitive dynamic, you're in competition for the healthcare professionals, so we're always going to have to make sure that we have a market pay rate that moves along with it. We can see that the pay rates have come down slightly faster than the bill rates. The stubborn piece has been the housing costs and as you can imagine with the inflation backdrop that's the piece that is going to be a little bit harder to call back as you call it. I think the opportunities really lie around other efficiencies within our gross profit. And so, if you think about Intellify for example, that's set to save us millions of dollars in the last -- in part of the third quarter and going into the fourth quarter, we've already begun the conversion of a number of accounts and have gotten north of $100 million in spend, actually migrated onto the platform that's going to drive annual savings just from what we've already migrated over $1 million annually. Obviously, we've got a roadmap to do that throughout the fourth quarter and into the first half of 2023. And then, of course, there's other efficiencies. If we look at everything up and down the line across -- whether it's professional liability insurances, our workers comp insurances, the credentialing costs that we have. So, a lot of it's going to be looking across those opportunities. And then, of course, the broader consolidated impact will come from improving -- continuing to improve the mix. Are there any other comments, John?

Yes, Tobey, this is John. Yes, I would just say -- as we said, we're going to keep increasing our diversification. If we look at or WSG or Workforce Solutions Group that works in the pace centers and home health, that's a business that is also going to be north of $100 million and that's a higher margin business as we continue to invest in those other peripheral businesses of ours that grow -- as we're getting them to grow at a faster rate, that will help drive gross margins. And I think really what's going to propel us to drive gross margins even faster is our movement and entry into the vendor-neutral space with Intellify. Now we announced at our Investor Day that we're moving into this financial space, it's somewhere between a $10 billion to $20 billion market, where we have a zero penetration in. And as we build -- and we're building a pretty long big pipeline right now in MSPs and our vendor-neutral business, Intellify, that's going to help us increase our gross margins and our EBITDA margins, because those vendor-neutral businesses are very highly profitable in the GM, gross margin side, as well as the EBITDA side.

That's helpful from a mix standpoint. If I think about the travel and allied business as it's currently formulated, how do the gross margins, either in the quarter or implied in your guidance compare to what you think 2023 looks like in that business? Just trying to get a sense for whether there is a rebound in the offing or is there further compression that you expect.

I don't think there is further compression, Tobey. I think today, and remember intentionally we've opted to give the majority of the compensation through to the nurse. So our margins have been depressed a little bit of that business. We've seen it in the low 2020s kind of range for our gross margin across travel. I think that while we're still down a couple of 100 basis points. I don't anticipate getting all that back in 2023. I do think that there is room for let's call it somewhere in that 100 basis point improvement over the next 12 months. But Marc, anything you want to add?

No, I think we're going to -- it's going to be slow and gradual, I don't expect it to be overnight. But I think -- I don't expect any further compression. But to John's point earlier, our other businesses, the education division is a high margin business and it's actually a great story, it's up almost 70% Q3 2022 versus Q3 2019. Q4 is shaping up to be our best quarter ever. We're seeing diversification there as well. Paraprofessionals is our fastest-growing segment within the education business. Demand has shifted a little bit. Traditionally, we saw strong demand for speech language pathologists and special ed professionals, but we're also seeing today very strong demand in mainstream teachers and paraprofessionals where we enjoy great margins.

Thank you. How did the volume of travelers in 3Q, which looks like it's down about 7% quarter-over-quarter compared to your expectations when you gave guidance for the third quarter?

Yes, it's a good question, Tobey. I'd say it was probably a little bit deeper decline than we had anticipated. If I go back to when we first gave our guidance, it was down just a little bit more significantly, but as we look across where that came from, it was the wind down of higher bill rate assignments. And -- but we've seen good production and across the weeks throughout the tail end of the third quarter as we're going into the fourth quarter, I think it was really just a step down from the crisis needs from the COVID pandemic, I don't think it was anything more significant than that.

Yes, I'd add probably from towards the end of the second quarter to the middle of the third quarter is probably where we saw a little bit of dip in our volume production, which we didn't anticipate as deep of a volume production, and then we have the steady increase in demand and now our production is catching up to that.

Perfect. Last one for me. Could you comment, John, about what you're thinking about in terms of the timing of deploying some of this cash. You did buy some stock and then put it on halt, the stock kind of went on a tear right when you -- right after you bought some. So, that's understandable, but are multiples coming down from private companies sufficiently such that you could continue to do acquisitions that are accretive like the bolt-ons you did in physician?

Without a doubt, yes. But also on the buyback program -- and yes, our stock did have a run, but we also were in a mandatory blackout period, so that's one of the reasons why we halted -- or the reason why we halted buying. But yes, we did have a nice run on the stock. Yes -- look, when we look at where we're going to be in 2023 and beyond, acquisitions are a large part of what we'll be doing with our capital deployment. And we are slowly seeing multiples coming down, and I anticipate we'll see multiples continue to come down, especially if the broader economic conditions fall unfavorable. But yes, we are still very active in the M&A market.

Our final question comes from Kevin Steinke with Barrington Research.

Good afternoon. I just wanted to ask about your plans for recruiter hiring over the next several quarters, the volume you think you have to add there. And any challenges in finding staff, any pressure on -- upward pressure on compensation costs, et cetera?

Hey Kevin, this is John. I'll start and hand it over to Marc Krug. But -- we're always looking at our capacity model that we have that kind of shows recruiter productivity or producer productivity with how much demand there is, it's kind of a formula that we have an algorithm that shows what we need. But we're growth company and will continue to invest in people and we're going continue to invest where demand is, as long as demand stays strong and continues to increase, we're going to be hiring producers, not only in our nurse and allied business, but in education, in Locums, WSG business, in our RPO and search business. We will continue to invest in those. Marc, did you have anything?

Sure. Kevin, at this point, we really don't have challenges finding staff because we're virtual now, so it's a much bigger pool to select from. We're finding great talent and our compensation costs are steady, they haven't changed a whole lot, recruiter productivity is still very strong, almost double what it was pre-pandemic. And as long as that's the case, we are going to continue to top grade higher and make sure we have enough capacity.

Kevin, this is Bill. Just two quick points. One, I did mention in the prepared remarks that we did grow our staff 4% in the third quarter, so that's just one quarter of sequential change that was quite an investment we made, of course, most of those were in revenue producers. And then just to dovetail into Marc's comment, when you look at our comp structure, I think we're among the most competitive in the marketplace, we give our folks the ability to earn more as they grow their books of business. So I think that's part of what helps it be very attractive for folks to join Cross Country.

All right, that's helpful. And you mentioned there recruiter productivity, and I believe you mentioned that as a contributing factor to the margin improvement in the quarter. Just wondering how much more room there is to run in terms of improving our recruiter productivity. I know newer people can ramp up faster, but just as you look at the staff overall, is there more room to run there on productivity improvement?

This is John, again, I'll start and hand off to Bill and Marc. But I think with our continuing investments in technology, especially with our Gateway portal, which we had rolled out in last -- in April last year -- this year rather and we talked a lot more about it on Investor Day. There is a lot of room and runway for us to have more productivity as we start really becoming a more self-service model for clinicians, our producers will be able to have larger capacity gains which will flow right through the bottom line to our EBITDA lowering SG&A and increasing higher EBITDA. I know Bill or Marc; you want to comment.

I was just going to say the same thing, John. I think when you look at the initial driver of the big gains we've had in productivity you would tie it back to the applicant tracking system we put in for travel, but that's just one piece of the puzzle and there is obviously other levers that we're looking to pull.

Yes, and in addition to what they said, what John and Bill said, we're also doing enhancements to the applicant tracking system right now, and that's really helping drive productivity and we're tweaking the organization to fuel growth and making sure revenue producers focus on revenue producing activity.

All right. Thanks for taking the questions. Appreciate it.

Thank you.

Ladies and gentlemen, this does conclude the Q&A period. I'll now turn it back over to John Martins for closing remarks.

Thank you. In closing, I'd like to thank everyone for participating in today's call. We look forward to updating you on our progress on the next call in February. See you then.

Ladies and gentlemen, this does conclude today's conference. Thank you for your participation. You may now disconnect.