Cross Country Healthcare Reports Second Quarter 2008 Results

BOCA RATON, Fla.--(Business Wire)--
Cross Country Healthcare, Inc. (Nasdaq:CCRN) today reported
revenue of $171.0 million in the second quarter ended June 30, 2008, a
3% decrease from revenue of $175.3 million in the prior year quarter.
Net income for the second quarter of 2008 increased 17% to $6.4
million, or $0.21 per diluted share, versus net income of $5.5
million, or $0.17 per diluted share in the prior year quarter. Cash
flow from operations for the second quarter of 2008 was $15.8 million.

For the six months ended June 30, 2008, the Company generated
revenue of $350.2 million and net income of $12.2 million, or $0.39
per diluted share. This compares to revenue of $351.4 million and net
income of $10.3 million, or $0.31 per diluted share, in the first six
months of the prior year. Cash flow from operations for the first six
months of 2008 was $27.2 million.

"I'm pleased with our second quarter results, especially
considering the challenging operating environment in our nurse and
allied staffing business. Our profitability met the high end of our
guidance for the second quarter, reflecting improved profit margins in
all three business segments despite our top-line performance coming in
below our range of expectations. While staffing volume in our nurse
and allied segment is likely to remain under pressure in the
short-term due to weak booking trends, we believe that business
strategies we are executing will begin to reverse these negative
volume trends later this year," said Joseph A. Boshart, President and
Chief Executive Officer of Cross Country Healthcare, Inc. "In our
clinical trials services segment, the 27% increase in revenue was due
to the acquisitions we made in mid-2007. We continue to work hard to
diversify our client base and add new contracts in an effort to
counteract delays in the start-up of certain clinical trials and
replace large contracts that have and will be ending. As a result, we
expect modest sequential segment revenue improvement in the third
quarter," added Mr. Boshart.

On July 22, 2008, Cross Country Healthcare announced a definitive
agreement to acquire substantially all of the assets of locum tenens
(physician staffing) provider MDA Holdings, Inc. (MDA) and its
subsidiaries for $112.3 million in cash, plus additional earn-out
payments based on 2008 and 2009 performance criteria. In 2007, MDA
generated revenue of $158 million. The Company anticipates closing
this transaction next month.

"Our second quarter results and the pending acquisition of MDA are
consistent with the strategy we have previously communicated. This
strategy includes: strengthening our market position and margins in
our nurse and allied staffing business, which continues to generate
strong cash flow; making strategic acquisitions in high growth, high
margin businesses; opportunistically buying back our common stock; and
maintaining a strong balance sheet to provide financial flexibility.
It is, in part, due to our financial flexibility that the Company has
been able to secure attractive financing for this strategic
transaction in a difficult credit environment," Mr. Boshart stated.

Nurse and Allied Staffing

For the second quarter of 2008, the nurse and allied staffing
business segment (travel and per diem nurse and travel allied
staffing) generated revenue of $132.7 million, a 7% decline from the
prior year quarter and a 6% decline sequentially from the first
quarter of 2008. The revenue decrease reflects a 10% decline in
staffing volume from the prior year quarter that was partially offset
by a 4% year-over-year increase in travel nurse staffing revenue per
hour.

Contribution income (defined as income from operations before
depreciation, amortization, and corporate expenses not specifically
identified to a reporting segment) increased to $13.9 million in the
second quarter of 2008 from $12.9 million in the same quarter a year
ago, increasing 8% compared to the prior year quarter as well as
sequentially from the first quarter of 2008. This increase primarily
reflected further expansion of the bill-pay spread and an improvement
in housing costs as a percent of revenue.

For the first six months of 2008, segment revenue decreased 5% on
a year-over-year basis to $273.3 million from $287.7 million in the
same period a year ago, while contribution income increased 7% to
$26.8 million from $25.1 million in the prior year period.

Clinical Trials Services

For the second quarter of 2008, the clinical trials services
segment generated revenue of $24.9 million, an increase of 27% from
$19.6 million in the prior year quarter. The year-over-year
improvement was due to the additional revenue from the acquisitions
made during 2007. Contribution income increased 49% in the second
quarter of 2008 to $4.4 million from $3.0 million in the same quarter
of 2007, reflecting higher contribution from all business units in
this segment.

For the first six months of 2008, segment revenue increased 27% on
a year-over-year basis to $49.8 million from $39.3 million in the same
period a year ago, while contribution income increased 48% to $8.2
million from $5.5 million in the prior year period.

Other Human Capital Management Services

For the second quarter of 2008, the other human capital management
services business segment (education and training and retained search)
generated revenue of $13.4 million, a 6% increase from revenue of
$12.6 million in the same quarter in the prior year, reflecting higher
revenue in both the retained search business and the education and
training business. Segment contribution income increased 6% to $2.1
million in the second quarter of 2008, from $2.0 million in the prior
year quarter, reflecting greater contribution from both the retained
search and the education and training businesses.

For the first six months of 2008, segment revenue increased 11% on
a year-over-year basis to $27.1 million from $24.4 million in the same
period a year ago, while contribution income increased 10% to $4.5
million from $4.1 million in the prior year period.

Debt Repayments/Borrowings

During the second quarter of 2008, the Company decreased its
borrowings under its revolving credit facility by $7.5 million from
the end of the prior quarter. At June 30, 2008, the Company had $34.3
million of total debt on its balance sheet and a debt, net of cash, to
total capitalization ratio of 6.9%. In addition, the Company utilized
$4.6 million to complete the earnout related to the 2007 Assent
acquisition.

Stock Repurchase Program Update

Cross Country Healthcare repurchased 53,962 shares of its common
stock during the second quarter of 2008 at a total cost of $0.7
million, which equates to an average cost of $12.31 per share. These
purchases occurred early in the quarter. The Company refrained from
repurchasing any additional shares during the quarter due to the
timing of negotiations with MDA. As of June 30, 2008, the Company can
repurchase up to 1,441,139 shares of its common stock under the
current authorization approved in February 2008. Under this
authorization, the shares may be repurchased from time-to-time in the
open market subject to the terms of the Company's credit agreement and
such repurchases may be discontinued at any time at the discretion of
the Company. At June 30, 2008, the Company had approximately 30.7
million shares outstanding.

Guidance for Third Quarter 2008

The following statements are based on current management
expectations. Such statements are forward-looking and actual results
may differ materially. These statements assume the pending acquisition
of MDA will close next month and the Company's guidance includes the
expected contribution from MDA. These statements do not include the
potential impact of any other future mergers, acquisitions, and other
business combinations, any significant legal proceedings or any
significant repurchases of our common stock.

The Company expects revenue in the third quarter of 2008 to be in
the $176 million to $184 million range and earnings per diluted share
to be in the range of $0.19 to $0.21. Subject to timing of the close
of the MDA acquisition, these estimates include approximately $8
million to $12 million of revenue from MDA and an immaterial
contribution to earnings per diluted share.

Quarterly Conference Call

Cross Country Healthcare will hold a conference call on Wednesday,
August 6th at 10:00 a.m. Eastern Time to discuss its second quarter
2008 financial results. This call will be webcast live by CCBN/Thomson
and may be accessed at the Company's web site at
www.crosscountryhealthcare.com or by dialing 888-455-9639 from
anywhere in the U.S. or by dialing 210-234-0001 from non-U.S.
locations - Passcode: Cross Country. A replay of the webcast will be
available through August 20th. A replay of the conference call will be
available by telephone from approximately noon on August 6th until
August 20th by calling 866-457-5706 from anywhere in the U.S. or
203-369-1289 from non-U.S. locations.

About Cross Country Healthcare

Cross Country Healthcare, Inc. is a leading provider of nurse and
allied staffing services in the United States, a provider of clinical
trials services to global pharmaceutical and biotechnology customers,
as well as a provider of other human capital management services
focused on healthcare. The Company has approximately 4,000 contracts
with hospital, pharmaceutical and biotechnology customers, and other
healthcare organizations. Copies of this and other news releases as
well as additional information about Cross Country Healthcare can be
obtained online at www.crosscountryhealthcare.com. Shareholders and
prospective investors can also register at the corporate website to
automatically receive the Company's press releases, SEC filings and
other notices by e-mail.

In addition to historical information, this press release contains
statements relating to our future results (including certain
projections and business trends) that are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and are subject to the "safe harbor"
created by those sections. Forward-looking statements consist of
statements that are predictive in nature, depend upon or refer to
future events. Words such as "expects", "anticipates", "intends",
"plans", "believes", "estimates", "suggests", "seeks", "will", and
variations of such words and similar expressions intended to identify
forward-looking statements. Forward-looking 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 include, without limitation,
the following: our ability to attract and retain qualified nurses and
other healthcare personnel, costs and availability of short-term
leases for our travel nurses, demand for the healthcare services we
provide, both nationally and in the regions in which we operate, the
functioning of our information systems, the effect of existing or
future government regulation and federal and state legislative and
enforcement initiatives on our business, our clients' ability to pay
us for our services, our ability to successfully implement our
acquisition and development strategies, the effect of liabilities and
other claims asserted against us, the effect of competition in the
markets we serve, our ability to successfully defend the Company, its
subsidiaries, and its officers and directors on the merits of any
lawsuit or determine its potential liability, if any, and other
factors set forth in Item 1A. "Risk Factors" in the Company's Annual
Report on Form 10-K for the year ended December 31, 2007, as filed and
updated in our Quarterly Reports on Form 10-Q and other filings with
the Securities and Exchange Commission.

Although we believe that these statements are based upon
reasonable assumptions, we cannot guarantee future results and readers
are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's opinions only as of the date of
this press release. There can be no assurance that (i) we have
correctly measured or identified all of the factors affecting our
business or the extent of these factors' likely impact, (ii) the
available information with respect to these factors on which such
analysis is based is complete or accurate, (iii) such analysis is
correct, or (iv) our strategy, which is based in part on this
analysis, will be successful. The Company undertakes no obligation to
update or revise forward-looking statements. All references to "we,"
"us," "our," or "Cross Country" in this press release mean Cross
Country Healthcare, Inc., its subsidiaries and affiliates.

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Cross Country Healthcare, Inc.
Consolidated Statements of Income
(Unaudited, amounts in thousands, except per share data)

Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
% %
2008 2007 Change 2008 2007 Change
--------- -------- ------ --------- -------- ------

Revenue from
services $170,951 $175,339 (3%) $350,202 $351,432 0%
Operating
expenses:
Direct
operating
expenses 125,311 133,736 (6%) 259,385 269,340 (4%)
Selling,
general
and
administrative
expenses 32,123 29,923 7% 64,288 59,441 8%
Bad debt
expense - 480 (100%) 484 1,265 (62%)
Depreciation 1,777 1,505 18% 3,563 2,989 19%
Amortization 643 370 74% 1,316 739 78%
Legal
settlement
charge - 21 (100%) - 34 (100%)
--------- -------- --------- --------
Total operating
expenses 159,854 166,035 (4%) 329,036 333,808 (1%)
--------- -------- --------- --------
Income from
operations 11,097 9,304 19% 21,166 17,624 20%
Other expenses:
Foreign ND ND
exchange loss
(gain) (34) - (40) -
Interest
expense, net 533 529 1% 1,172 1,015 15%
--------- -------- --------- --------
Income before
income taxes 10,598 8,775 21% 20,034 16,609 21%
Income tax expense 4,227 3,314 28% 7,813 6,346 23%
--------- -------- --------- --------
Net income $ 6,371 $ 5,461 17% $ 12,221 $ 10,263 19%
========= ======== ========= ========

Net income per
common share:
Basic $ 0.21 $ 0.17 24% $ 0.40 $ 0.32 25%
========= ======== ========= ========
Diluted $ 0.21 $ 0.17 24% $ 0.39 $ 0.31 26%
========= ======== ========= ========

Weighted average
common shares
outstanding:
Basic 30,667 32,038 30,908 32,086
Diluted 30,853 32,613 31,093 32,730

ND - Not
determinable
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Cross Country Healthcare, Inc.
Condensed Consolidated Balance Sheets
(Unaudited, amounts in thousands)

June 30,
December 31,
2008 2007
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 4,812 $ 9,066
Accounts receivable, net 107,503 116,133
Deferred tax assets 6,531 6,172
Other current assets 17,209 17,768
------------ ------------
Total current assets 136,055 149,139
Property and equipment, net 22,147 23,460
Trademarks, net 19,073 19,153
Goodwill, net 339,602 326,119
Other identifiable intangible assets, net 14,740 15,996
Debt issuance costs, net 549 424
Other long-term assets 1,060 1,017
------------ ------------
Total assets $ 533,226 $ 535,308
============ ============

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses $ 7,365 $ 10,203
Accrued employee compensation and benefits 27,514 26,102
Current portion of long-term debt 3,093 5,067
Income taxes payable 3,829 1,222
Other current liabilities 8,279 7,815
------------ ------------
Total current liabilities 50,080 50,409
Non-current deferred tax liabilities 49,544 49,547
Long-term debt 31,248 34,385
Other long-term liabilities 9,962 10,530
------------ ------------
Total liabilities 140,834 144,871

Commitments and contingencies

Stockholders' equity:
Common stock 3 3
Additional paid-in capital 235,714 245,844
Other stockholders' equity 156,675 144,590
------------ ------------
Total stockholders' equity 392,392 390,437

------------ ------------
Total liabilities and stockholders' equity $ 533,226 $ 535,308
============ ============
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Cross Country Healthcare, Inc.
Segment Data (a)
(Unaudited, amounts in thousands)

Three Months Ended
June 30,
-----------------------------------
% of % of
Total Total %
2008 Revenue 2007 Revenue Change
-------- -------- -------- -------- ------

Revenue:
Nurse and allied
staffing $132,665 78% $143,195 82% (7%)
Clinical trials services 24,898 14% 19,569 11% 27%
Other human capital
management services 13,388 8% 12,575 7% 6%
-------- --------
$170,951 100% $175,339 100% (3%)
======== ========

Contribution income (b)
Nurse and allied
staffing $ 13,939 $ 12,863 8%
Clinical trials services 4,412 2,971 49%
Other human capital
management services 2,108 1,990 6%
-------- --------
20,459 17,824 15%

Unallocated corporate
overhead 6,942 6,624 5%
Depreciation 1,777 1,505 18%
Amortization 643 370 74%
Legal settlement charge - 21 (100%)
-------- --------
Income from operations $ 11,097 $ 9,304 19%
======== ========

Six Months Ended
June 30,
-----------------------------------
% of % of
Total Total %
2008 Revenue 2007 Revenue Change
-------- -------- -------- -------- ------

Revenue:
Nurse and allied
staffing $273,331 78% $287,717 82% (5%)
Clinical trials services 49,767 14% 39,280 11% 27%
Other human capital
management services 27,104 8% 24,435 7% 11%
-------- --------
$350,202 100% $351,432 100% 0%
======== ========

Contribution income (b)
Nurse and allied
staffing $ 26,800 $ 25,056 7%
Clinical trials services 8,182 5,533 48%
Other human capital
management services 4,503 4,089 10%
-------- --------
39,485 34,678 14%

Unallocated corporate
overhead 13,440 13,292 1%
Depreciation 3,563 2,989 19%
Amortization 1,316 739 78%
Legal settlement charge - 34 (100%)
-------- --------
Income from operations $ 21,166 $ 17,624 20%
======== ========
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Cross Country Healthcare , Inc.
Other Financial Data
(Unaudited)

Three Months Ended Six Months Ended
June 30, June 30,
------------------- -----------------
2008 2007 2008 2007
----------- ------- -------- --------
Net cash provided by operating
activities
(in thousands) $ 15,837 $ 8,923 $ 27,172 $ 7,355

Nurse and allied staffing
statistical data:
-------------------------------
FTEs (c) 4,541 5,067 4,681 5,101
Weeks worked (d) 59,033 65,871 121,706 132,626
Average nurse and allied
staffing revenue per FTE per
week (e) $ 2,247 $ 2,174 $ 2,246 $ 2,169
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(a) Segment data provided is in accordance with FASB Statement 131.
(b) Defined as income from operations before depreciation,
amortization, and corporate expenses not specifically identified to a
reporting segment. Contribution income is a financial measure used by
management when assessing segment performance.
(c) FTEs represent the average number of nurse and allied contract
staffing personnel on a full-time equivalent basis.
(d) Weeks worked is calculated by multiplying the FTEs by the number
of weeks during the respective period.
(e) Average nurse and allied staffing revenue per FTE per week is
calculated by dividing the nurse and allied staffing revenue by the
number of week worked in the respective periods. Nurse and allied
staffing revenue includes revenue from permanent placement of nurses.
*T

Cross Country Healthcare, Inc., Boca Raton
Howard A. Goldman, Director/Investor &
Corporate Relations, 877-686-9779
hgoldman@crosscountry.com

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