Good evening, ladies and gentlemen, and welcome to the Cross Country Healthcare Earnings Conference Call for the Second Quarter 2019. This call is being simultaneously webcast live.

A replay of this call will also be available until August 15, 2019, and can be accessed at or on the company's website or by dialing 1-800-839-5574 for domestics call, and 203-369-3669 for international calls, and by entering the passcode 2019. I will now turn the call over to Bill Burns, Cross Country Healthcare's Chief Financial Officer.

Please go ahead, sir..

Thank you, and good afternoon, everyone. I'm joined today by our President and Chief Executive Officer, Kevin Clark. Today's call will include a discussion of our financial results for the second quarter and our outlook for the third quarter of 2019 as contained in our press release, a copy of which is available at www.crosscountryhealthcare.com.

At the conclusion of our prepared remarks, we will open the lines for questions. Before we begin, we need to remind everyone that certain statements made on this call may constitute forward-looking statements.

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 2018 Annual Report on Form 10-K and quarterly reports on Form 10-Q, as well as in other filings with the SEC.

The company undertakes no obligation to update any of its forward-looking statements. Also, comments made during this teleconference 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 substituted for or superior to financial measures calculated in accordance with U.S. GAAP. More information related to these non-GAAP financial measures is contained in our press release.

Lastly, in order to facilitate a better understanding of our underlying trends, we may refer to pro forma information on this call, giving effect to acquisitions and divestitures as though the transactions had occurred the start of the periods impacted.

With that, I will now turn the call over to our President and Chief Executive Officer, Kevin Clark..

Thank you, Bill, and thank you to everyone for joining us this afternoon. This is my first full quarter since returning to Cross Country, and I'm pleased with the progress we are making, though we still have a ways to go.

We experienced sequential growth across all of our segments as our investments in revenue producers are beginning to have an impact, and we continue to experience favorable market conditions. Our nurse and Allied segment reported year-over-year growth fueled by continued strong performance in both travel Allied and education.

In addition, we continued to generate significant cash from operations and made an additional $5 million payment on our debt. Bill will go into more details on the numbers; therefore, I would like to provide you with an update on the status of the company and our turnaround.

We are clearly a people business, and it is our employees that make Cross Country special. Just this month, we celebrated the more than 30 individuals that have been with us for more than 25 years, some of whom have been here since the company was founded.

We see similar loyalty from many of our healthcare professionals who have also made Cross Country their employer of choice. Last quarter, we celebrated one of our nurses who began her 100th assignment with Cross Country since 1992.

With our employees being the foundation, it has been my priority to ensure that we have a clear strategic plan that not only provides a framework to guide decision-making, but also establishes a blueprint for the changes we need to make.

As I shared on the last call, the core tenets of our strategy include evolving our go-to-market approach, reinvigorating our culture, and the infusion of technology throughout the organization. We are well on our way to operationalizing our strategy, and I believe we are on the right path.

Having infused new talent into the organization and better aligning our organization to leverage our tenured employees, I am confident that we have the right team in place to continue driving the changes necessary for better performance.

I am incredibly proud of our employees for embracing all the changes we are making in such a relatively short period of time. As part of our evolving our go-to-market approach, we need to refresh our branding, and we are nearly complete with that effort.

We have reduced our portfolio from over 20 disparate brands to 8 core brands, leveraging the Cross Country name to the greatest extent. Cross Country Healthcare is a market leader due to both the breadth and depth of our services as well as the strength of our clinical reputation for excellence.

This realignment will help us be both more efficient and drive growth. In combination with the brand refresh, we are also making significant changes in our candidate attraction, engagement, and marketing efforts that will strengthen our ability to continue to attract the highest quality professionals.

Modest improvements in our lead-to-applicant conversions can have a meaningful impact on our revenue and greatly improve the return on investment. The plan for improving our go-to-market approach extends well beyond just changing the brands.

We are continuing to evolve our organizational structure to ensure we not only have the right talent, but also to optimize our ability to deliver solutions to our clients. Our teams are working more closely and collaboratively to ensure that we can successfully convey that message to our clients.

It is clear that we offer a compelling value proposition and, just this month, we won a significant new managed service program, or MSP. This new client is a large teaching system in the Southeast with over 1,000 beds and estimated spend of more than $20 million.

It was great to witness firsthand the passion and dedication of our team as we met with the client to discuss our highly differentiated, total talent solutions. Another key element of the strategy for turning the company around and propelling us to be the number one provider of total talent solutions is our digital transformation.

Internally, the major focus is around implementing a unified applicant tracking and credentialing platform. The project is estimated to cost between $12 million and $14 million, and we expect to begin piloting with a smaller part of our business later this year, and full implementation is scheduled for the second half of next year.

As the market continues to shift towards more mobile-enabled models and data-centric tools, our beacon is the customer, and, therefore, we are looking to create the easiest and most seamless way to interact with our clients.

As I mentioned on the last call, the path for realizing the technology vision will take time, so it's important to note we are continuing to move swiftly along many other fronts. In the last 6 months, we've added a significant number of incremental revenue producers across the company funded primarily through reductions in overhead.

We are already seeing returns on the investments as the number of working nurses on assignment rose steadily throughout the second quarter and is expected to continue to grow throughout the third quarter. Our physician staffing business also experienced a better second quarter than we anticipated, with revenue growth sequentially by 12%.

It seems clear to me that the organizational changes, along with investments in revenue producers and other cross-selling initiatives are starting to show progress. Advanced practitioners have been a fairly steady contributor, but I was especially pleased to see that the majority of the sequential growth came from physicians.

I remain confident that the business is a vital and core part of our service offering, and that we can return it to year-over-year growth in the coming quarters. From an MSP perspective, spend under management increased 5% sequentially as programs continue to ramp or expand to include additional services, such as Allied and Locums.

Overall, our capture rate was 57%, down slightly largely due to the mix of spend and the impact from new wins, which tend to have a lower capture rate following implementation. As of the end of the second quarter, we have approximately $75 million of spend that has yet to ramp.

As we look at the third quarter and the rest of 2019, I am encouraged by the level of demand and activity across all of our lines of business, and especially in our travel business.

With the exception of our education business, which is impacted by the timing for summer vacation, we expect all of our businesses to report sequential improvement for the third quarter and expect to see year-over-year growth in most of our businesses for the first time in more than 2 years.

With that, let me turn the call over to Bill Burns, who will review our results in more detail..

Thanks, Kevin. As Kevin already mentioned, we were pleased that our second quarter results exceeded the top end of our guidance ranges for revenue, gross margin, and adjusted EBITDA, with adjusted EPS at the upper end of our range.

The 2 main drivers for the over-achievement on revenue and gross margin were better-than-expected performance from our physician business and, to a lesser extent, incremental revenue related to labor disruptions. For the quarter, consolidated revenue was $202.8 million, representing a 1% decline over the prior year and a 4% sequential improvement.

Revenue for our largest segment, nurse and Allied, was up 1% over the prior year and 3% sequentially. Year-over-year growth for nurse and Allied was driven by favorable price and mix, and partly offset by a decline in volume.

The increase in bill rates was due primarily to a rise in the volume of premium rate assignments associated with a large electronic medical records project and, to a lesser extent, the labor disruption I mentioned earlier. On a sequential basis, the increase was driven by both volume and price.

Revenue for our physician staffing segment was $18 million, down 15% year-over-year but up 12% sequentially. Year-over-year, the decline continues to be driven primarily by volume, partly offset by increases in pricing across most specialties and a favorable mix.

On a sequential basis, the growth was driven by increased volume for both physicians and advanced practice specialties. With the changes in investments we have made, we believe this business is well-positioned to continue its progression and return to year-over-year growth.

Gross profit margin for the quarter was 25.4%, above the high end of our guidance range, as we experienced favorable impacts from pricing across most segments, as well as favorable impacts from lower workers' compensation costs.

As we enter the second half, we continue to closely monitor our healthcare costs, which were slightly above our expectations for the quarter. Sequentially, gross margin improved 70 basis points largely due to the impact of the annual payroll tax reset in the first quarter.

On a year-over-year basis, gross margin was down 80 basis points due predominantly to lower bill-pay spreads. Total SG&A was $45.9 million, up 1% over the prior year and flat sequentially.

The main drivers of the increase were higher health insurance costs, as well as other professional and consulting fees, including consulting expenses in connection with the replacement of our applicant tracking system.

On a sequential basis, increases in compensation associated with our annual merit cycle, as well as higher health insurance costs, were offset by lower professional and consulting fees and payroll taxes.

From a cost perspective, we continue to make progress on identifying and realizing savings; and, as a result, we now expect total gross savings of between $9 million and $10 million when fully implemented. We estimate that we have realized $1.5 million of the savings to date, and we'll realize $6 million for the full year.

Given the rise in level of demand, we are reinvesting the majority of the realized savings in incremental revenue producers in order to drive organic growth.

Adjusted EBITDA for the quarter was $6.3 million, above the high end of our guidance range, driven largely by better operating leverage associated with higher revenue and favorable bill-pay spreads. Below adjusted EBITDA, there are a couple of items to call out.

First, we recognized $14.5 million in impairment charges related entirely to our rebranding initiatives. The second item was a $1.6 million charge for two legal matters pertaining to a medical liability case we disclosed earlier in the quarter, as well as the California wage and hour class action case.

And finally, we recorded a tax provision of $34.8 million related primarily to the establishment of valuation reserves on deferred tax assets. Unfortunately, our cumulative three year results were negatively impacted by items such as the brand impairment and other charges requiring us to establish this valuation allowance.

It's important to note that we continue to have more than $70 million in net operating losses that we would be able to utilize in the future and should continue to greatly offset cash tax liabilities.

Due to the impact of these items, net loss attributable to common shareholders for the quarter was $51.7 million, or $1.44 per share, as compared to net income of $1.5 million, or $0.04 per diluted share in the prior year. Turning to the balance sheet, we ended the quarter with $24.8 million of cash and $71.4 million of senior debt outstanding.

As of June 30, we did not have any amounts drawn on our $75 million revolving credit facility. This was another strong quarter for generating cash, with $12.4 million generated from operations due primarily to continued favorable collection activity, bringing our year-to-date operating cash to $25.1 million.

Our days sales outstanding for the quarter was 51 days, representing a 6-day improvement over the first quarter and 11 days since the start of the year. Capital expenditures were $500,000, including costs related to replacing our legacy applicant tracking system.

Spend for this project is expected to ramp in the second half, and we estimate the total project will cost between $12 million and $14 million to complete. Due to our strong cash collections in the quarter, we were once again able to reduce our debt by making an additional $5 million prepayment on our term loan.

As we mentioned on previous calls, we are committed to reducing the level of indebtedness, and we continue to explore options for our debt structure. Our goal is to ensure we have the optimal capital structure that is not only cost-effective, but flexible to support our growth. This brings me to our third quarter guidance for 2019.

Our outlook is for revenue to be between $200 million and $205 million, reflecting sequential growth in most lines of business with the exception of education due to the impact from summer break.

On a year-over-year basis, this range reflects an expectation from nurse and Allied to grow between 1% and 3%, with travel nurse anticipated to grow in the mid-single digits.

From a profitability perspective, gross margin is expected to be between 24.5% and 25%, slightly below the current quarter due to the impact from changes in mix with the education and the higher bill rates we experienced pertaining to the EMR and labor disruption in the second quarter.

Adjusted EBITDA is projected to be between $5.5 million and $6.5 million, and adjusted earnings per share between $0.00 and $0.02. Also implied in the guidance is $3 million of depreciation and amortization, $1.3 million of interest expense, $1 million of stock comp expense, a tax expense of $300,000, and a diluted share count of 35.8 million shares.

This concludes our prepared remarks; and, at this point, I'd like to open the lines for questions.

Operator?.

[Operator Instructions] Our first question comes from A.J. Rice, Credit Suisse..

Maybe just a couple quick questions here. First of all, obviously there's a lot of company-specific things going on to improve performance, and it seems like you're making good progress there.

I wonder if we could get you to, if it's possible, maybe it's not possible, to talk about the underlying tone of the market, particularly in the nurse and Allied and what you're seeing just generally in market developments beyond obviously all the company-specific things you're doing..

Yes, great question. Nurse and Allied, our orders are up. They're up sequentially. They're up year-over-year. The market backdrop is really very positive. We haven't seen an increase in our bill rates, but demand is certainly there.

So we're calling out with our main core business mid-single digits growth quarter-over-quarter for the travel nurse business, so we're bullish. The Allied component of our business is up about 15% year-over-year year-to-date. And as we just described, our segment is up year-over-year even for Q2.

So we're seeing the market remain strong, and the actions that we've been taking since I joined the company in January are having traction. We've spent the time not just getting our strategic plan in place and consolidating our brands, but reorganizing and restructuring the company for success.

And so, I'd say we're bullish on Q3, and we're bullish as we head towards the end of the year..

I guess one thing that's sort of floated around intra-quarter was this concept that maybe there was a little tightening, supply-demand, but the hospitals were still somewhat reluctant to boost the amount they're willing to pay, not willing to pay premiums to get positions filled.

Are you seeing any of that in the marketplace?.

Yes. I mean, if you look at the marketplace for hospitals, I mean, they're calling out 3% growth for hospital revenues this year. So the hospital business is growing even though there is this massive consolidation going on. So what's happening is hospital systems are aggregating.

They are expanding the continuum of care from urgent care to home healthcare and hospice. And there is a lot of cost pressure in the industry. So that cost pressure, we see it in terms of there's no upward pressure on bill rates right now outside of labor disruption or EMRs or special premium rates..

And quickly on the Locums sequential improvement, is that concentrated in any particular specialties? Is it mostly just the internal things you've done? Is there a dynamic going on in the marketplace where maybe the pressure from hospitalists, less demand, has sort of abated now or been worked through, and you're targeting areas where there is more growth? Just a little bit more color on exactly where you're seeing the pickup sequentially..

Yes, so that's a great question. So our surgery specialty and anesthesiology are the most rapidly growing segments quarter-over-quarter. And on the advanced practice side, our CRNA demand is up substantially.

Our largest lines of business continue to be primary care and hospital medicine, and followed closely behind by ER, but we're seeing this anesthesiology and surgery pickup. And it's really been great to see the physician part of that business pick up in terms of demand.

But I would also say that a lot of that is coming from the leadership changes that we made, creating trust and respect among the employees there. A couple client wins, one in particular in California.

So we've restructured the business so we have regional account managers that are focused on selling, and just the whole opportunity across the Cross Country Healthcare enterprise to cross-sell our services around this notion of total talent solutions. And that's how we go to market now.

So we're talking to these large health systems, and we're providing the services around contingent labor across nursing Allied physician, in addition to our advisory services and our permanent and RPO business. And that's working and gaining traction. So it's really a combination of things.

I think demand is probably up, but I think it's also just better management and the reorganization that we've created there..

Last question, a technical one. On the DSOs, you had 2 good quarters of obviously bringing those down, which helps your cash flow significantly.

Are we sort of at a normalized run rate at this point, or is there more opportunity there?.

Yes, A.J. I think 51 days for us is a pretty low point. I don't know that we'll stay at the 51-day mark. I mean, we've historically run in that 54 to 55 days. It drifted up throughout part of '18 and, since the start of this year, we've just had a concerted effort on bringing that down.

Obviously, we're going to stay focused on it and continue to push hard for collections, but the more normalized is probably somewhere a little bit north of the 51 days..

Our next question comes from Jeff Silber, BMO Capital Markets..

Can you just remind us where you stand on the recruiter side in terms of where you were, where you are now, what your plans are, going forward?.

Well, we've added about 10% to our revenue-producing employees year-to-date. And Jeff, I would say that we're now kind of at -- we've optimized our revenue producer headcount, so it's more about backing and filling, adding as we grow, and we're back to kind of where we think the optimal level is in terms of staffing, if that answers your question..

Yes, that does. And I'm just curious. How are you able to find these people? Are these people that are new to the business? Are you taking them from competitors? Any colors would be great..

Yes. I mean, we always look for experience recruiters. We're very respectful of recruiting away from our competitors. We certainly honor things like non-competes, et cetera. But Cross Country Healthcare is a fantastic story.

I mean, we are a bit of an underdog, but we're in a position where we are relaunching the company, creating this digital transformation about our business. We have had a lot of applications. We've had a lot of candidates.

So it's been a good situation, because we've been able to really screen and pick the very best recruiter candidates, as an example, our account managers. And part of that is also the changes that we've made when we reorganized the company. I've also brought into the company some terrific executives from the industry.

And so, not just myself, but others that have come to the company over the past two quarters are attracting and creating that momentum behind some of the folks that we're hiring..

Okay, that's helpful. You mentioned the capital -- I guess is the capital spend, the $12 million to $14 million.

First of all, is that all capital spending? Is any of that going to be expense?.

Yes. Jeff, this is Bill. I think about a third of that would wind up being operating expense. The rest would be capitalized onto the balance sheet, is how we're seeing it right now..

And again, can you just give us a little bit more color exactly what you're spending on and what benefits you think you'll see? Thanks..

That project is tied entirely to the replacement of our applicant tracking system, predominantly for our legacy travel nurse business, but it will also cover all of travel nursing, and eventually will be the backbone for travel Allied and other parts of the business.

But the initial project is replacing that, as well as other functionality that exists, particularly around credentialing, as an example..

And is this a third-party system you're using, or are you building something in-house?.

It is sourced by a third party..

Sorry, one more.

The labor disruption revenues in the quarter, can you quantify that for us?.

Yes, it's about $1 million. It wasn't a big number, but it was -- part of the reason I was speaking to that was the overdrive relative to our expectations. It was a strong quarter on its own without that, but it was part of the driver for beating expectation on revenues..

Our next question comes from Jason Plagman, Jeffries..

Just taking it one step further on the demand trends, any difference -- are you seeing it broad-based, or any variation you'd call out between your MSP business versus non-MSP? And if you could separate into those buckets, that'd be helpful..

Well, our MSP -- look, we're very excited about -- we had a large win in the second quarter, the first since I've been back here at Cross Country, so I was very excited about that. That particular win includes not just our clinicians, but also non-clinical requirements. So that was great to see. But look, it's a healthy marketplace.

There's healthy demand. There is a tremendous shortage across all the specialties that we do business in, which is a great backdrop for our company. Just a couple additional points. What is a little bit different is, for example, in the Florida market, some of what is typically seasonal needs are actually becoming chronic.

We have Southwest System that we do a fair amount of business with, and we have as many healthcare professionals there this summer as we did in this winter. So I think it's a little too early to make the all on Florida, Texas, Arizona and the other Sun Belt markets in terms of the seasonal needs, but we remain optimistic.

And we're also -- I'd say what's different about the company is I think we are ultra-focused on filling the right orders. And that's a bit of a change. And we've proven in the marketplace that our reputation as the most clinically excellent company, that we can provide the very best quality candidates.

And when we do lead to a client, we typically get high conversions..

And one other, switching gears. I noticed I don't think you mentioned performance in the per diem or branch business.

Any update there on how they performed in Q2 or year-to-date, and outlook for the second half?.

We also are seeing very positive trends in the second quarter on a sequential basis for our branch local business. We expect to see growth again in the third quarter in terms of sequential growth. So it's actually, again, it's strong, and we've also made a number of changes to that business.

We've spent a fair amount of time the first 2 quarters rethinking the delivery model here at Cross Country. And so we're getting better at, I think, filling some of the hard-to-fill open job orders.

And just going back to your other question just on the Allied component of the demand side, I did want to say that, for example, this business is constantly changing, but our biggest needs on the Allied front are in imaging and respiratory, and even for medical technologists. It seems like less millennials want to be working in the lab these days.

But what's interesting for me to think about, and for our market, is that respiratory, as an example, is now more of a year-round need for our company in terms of healthcare professionals. It's less seasonal around allergies. It seems to be more year-round.

So there's a lot more procedures, more people being insured, more insurance requirements, requiring more diagnostic and care. So that's part of what's driving the Allied business, as well..

Our next question comes from Kevin Steinke of Barrington Research..

So on the evolution of your go-to-market strategy, the consolidation of your brands down to a more manageable handful of brands, can you just give us any sense of how that brand rollout is proceeding, or maybe any reception to that change that you're seeing into the marketplace?.

Yes, it's a great question. Love to answer it, too. It's gone really, really fantastic. We launched Cross Country nurses, relaunched Cross Country Nurses in early June. We consolidated all of our brands other than Advantage RN, which we will consolidate downstream once we are on the same ATS platform. But it's been terrific.

The reception in the marketplace has been great to all of the branding around Cross Country Healthcare and our divisional approach. So we just, as a kind of recap, we relaunched Cross Country Nurses. We relaunched our new branding around Cross Country Allied.

Cross Country Healthcare, of course, the parent brand, our workforce solutions group, Cross Country Search, which is our perm and RPO division, went live July 1, and orders are very strong on that business. And next months, in a couple weeks, we'll be relaunching our medical doctors' associates under the Cross Country moniker, as well.

So we're very, very excited about what's happening. It's created an opportunity for us to concentrate our resources and investment, especially around talent acquisition, on a single brand and build the brand awareness and equity, enabling us to spend more of our capital engaging and nurturing the talent pools that we're reaching for our customers..

And then, on the $20 million-plus MSP that you won, I'm assuming that was a competitive process, and if so, what were some of the points of differentiation that came out for Cross Country that enabled you to win that business?.

Yes. Well, we took, first of all, it was great. We're very excited because we won the business against the biggest competitors that we have. And so it was great to kind of knock them down. And we went to market with our whole total talent solutions marketplace.

And what that means, of course, is that we were able to bring not just travel nursing, but also our local nursing, our travel allied, our local allied. We could bring our perm, our RPO, all of our services into this total talent management offering, as I mentioned before, both clinical and non-clinical. And we have a robust MSP expertise.

We have a lot of experience. We were the first company to win an MSP in the marketplace back in 1998, and we've been at this a long time. So we are excited about that win, and the pipeline is solid. We expect to win more business and report on that in the coming quarters..

And then, just lastly, I think there was maybe just an incremental increase in the dollar amount being allocated to the applicant tracking system, $12 million to $14 million. I think previously it was $10 million to $12 million.

I don't know if there's anything significant to that, or maybe if it's being expanded just a bit, but any comment on that would be helpful..

I think it's really just refining the estimates that we've had for the project. We made a change to the project plan at the early part of the second quarter.

And as we refined our estimates, just looking to see what the total project spend would be, including the pilot program, to launch some of that functionality earlier this year, or later this year, ahead of the full implementation. So I think that's really, it is slightly higher than what we had originally called out..

Our last question in queue comes from Tobey Sommer of SunTrust..

In terms of the new system, when would you anticipate the timing of a cut-over and actual migration at this stage?.

Yes, so we roll out our pilot this fall, so we're a few months away from going live. And it's a smaller part of our business. We want to make sure that, although we feel like we've got a terrific plan, we want to make sure we get it right and we do a terrific job of on-boarding the team that we're piloting with.

And then, we will, from there, onboard bigger pieces of the business..

Based on your experience, would these systems, what kind of disruption risk do you think there is, and maybe how does your vendor selection and philosophy about what systems to deploy either mitigate that risk?.

Yes. Well, look, we chose a partner here, an applicant tracking software company which is the largest ATS technology company for the staffing industry. And it's a company that I have used in my prior company for 11 years, so I have a strong track record of experience. I'm familiar with their management team. It's a very successful company.

It's growing dynamically. And the attributes about it that we like the most are, number one, not just the big footprint, and it's well-tested in that there's much larger staffing companies than ours that are using their platform. But it is an open platform, and they have the largest ecosystem of tools and applications for integration.

And that's important, because the system we have now, even though it's a legacy system, it's a system that I helped create back in the '80s and '90s, but we also leverage very sophisticated tools today. And those tools we can continue to use.

So there's components of the architecture of this applicant tracking software system that we're going to continue to be very familiar to our recruiters because they've been using tools, for example, around texting and around workflows and various other things, how we -- price assignments and so forth.

So that's part of our rollout on a planned basis, but we feel very confident about the partner. We feel confident about the business process that we've put around it, the teams of people that we have engaged the entire year. And so, again, we're going to be careful, and we're going to make sure that we don't lose traction in the marketplace.

We have a lot of momentum. The turnaround is on. We are growing year-over-year this quarter. We're growing sequentially. There's a lot of terrific morale and momentum at the company, and we want to keep that on a sustained track..

What does your experience tell you in terms of the orders for travelers as being up year-over-year now for a decent period of time without a lot of growth in new supply.

And what I'm trying to get at is how long historically would you say this persists before we start to get some favorable movement in bill rates to attract in new supply and get volume growth?.

Yes, that's another great question, Tobey. I think bill rate expansion is coming.

I mean, it's not here today, but I think it's coming, because my experience, to your question, is when you see kind of the orders up double-digits as they are, getting not yet all the way back to where they were in 2014 to 2016, but moving in the right direction, that we'll start to see bill rate expansion.

We are seeing bill rate expansion in hard-to-find specialties, like for example cardiac cath positions. We're seeing bill rates approaching $100 an hour. We're seeing bill rates around certain geography markets for, say, OR nurses up in the $90 bill rate range. So we're seeing expansion in certain specialties.

It's just, across the board, not here to date. So I also would say that we think, for example, our main line of business will be up mid to single digits this next quarter because I think we're also managing that business much more tightly with laser focus.

We've improved the whole candidate funnel, the algorithm around how we convert leads into submissions and submitted candidates to working. So we're working better, and the market is remaining strong. The economic backdrop is very solid. The aging demographics of our country work to our favor, as we know. There's also a mix.

It's interesting to note, about 50% of our travel nurse business are millennials. That's a big shift over the last 5 years. We've seen the millennials become our largest segment. And so, a lot of things we're doing with digital transformation address kind of the market segment that we're in. So I would say, look, demand is healthy.

It's due to continue severe shortages, and I would think fill rates will probably follow modestly in the coming year..

Last question from me.

From a liquidity standpoint, I know you've been making some voluntary payments of debt, but I'm just trying to get a sense for whether you have the access to the resources that you need now to execute your strategy over the mid-term, or the company would look to get access to more funds to be able to give you all the latitude you need to execute your strategy..

Thanks, Tobey. Yes. I think today we're certainly, have adequate funds for everything we need to do that we have line of sight on. The current structure we're in does have governors as to how much access we have and availability.

And then, that was the point in the earlier remarks about looking at our capital structure for what is the optimal debt structure that would work well for us as we continue to move forward. And the opportunities are that we'll continue to look at acquisitions. We'll continue to look at other capital investments that we need to make.

And to this point, we've been very successful. I noted earlier with the cash generation in the company, we closed the quarter with about $25 million in cash. So that's just what's on the balance sheet above and beyond what we have in terms of availability on the revolver. So, sufficient cash to do all the things we need to do internally right now.

But as we look out, and if we want to have maximum flexibility, we are certainly looking at our debt structure..

Well, I think that was the last question. We want to thank everybody for taking the time to join us on our earnings call, and we look forward to reporting in the future, in the next earnings call, a continuation of our turnaround. Thanks, everybody..

Thank you, speakers. And that concludes today's conference. Thank you all for joining. You may disconnect at this time..