AMN HEALTHCARE SERVICES INC

Previous wording

We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. The Company helps providers optimize their workforce to reduce complexity and increase efficiency. The Company’s total talent solutions include managed services programs, clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems, recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools and many other healthcare settings.

Current wording

We provide technology-enabled healthcare workforce solutions and staffing services to healthcare organizations across the nation. The Company provides access to a comprehensive network of healthcare professionals through its recruitment strategies and breadth of career opportunities. The Company helps providers optimize their workforce to reduce complexity and increase efficiency. The Company’s total talent solutions include vendor neutral and managed services programs, clinical and interim healthcare leaders, temporary staffing, permanent placement, executive search, vendor management systems, recruitment process outsourcing, predictive modeling, language services, revenue cycle solutions, and other services. Clients include acute-care hospitals, community health centers and clinics, physician practice groups, retail and urgent care centers, home health facilities, schools and many other healthcare settings.

Previous wording

We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended March 31, 2024, we recorded revenue of $820.9 million, as compared to $1,126.2 million for the same period last year.

Current wording

We conduct business through three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. For the three months ended June 30, 2024, we recorded revenue of $740.7 million, as compared to $991.3 million for the same period last year. For the six months ended June 30, 2024, we recorded revenue of $1,561.6 million, as compared to $2,117.5 million for the same period last year.

Previous wording

Nurse and allied solutions segment revenue comprised 63% and 73% of total consolidated revenue for the three months ended March 31, 2024 and 2023, respectively. Through our nurse and allied solutions segment, we provide hospitals and other healthcare facilities with a comprehensive managed services solution in which we manage and staff all the temporary and permanent nursing and allied staffing needs of a client. We also provide revenue cycle solutions, which include skilled labor solutions for remote medical coding, clinical documentation improvement, case management, and clinical data registry, and provide auditing and advisory services. A majority of our placements in this segment are under our managed services solution, however, we also provide traditional direct nurse and allied healthcare staffing solutions of variable assignment lengths.

Current wording

Nurse and allied solutions segment revenue comprised 62% and 72% of total consolidated revenue for the six months ended June 30, 2024 and 2023, respectively. Through our nurse and allied solutions segment, we provide hospitals and other healthcare facilities with a comprehensive set of staffing solutions, including direct, vendor neutral, and managed services solutions in which we manage and staff all the temporary and permanent nursing and allied staffing needs, as well as the revenue cycle management needs, of a client. A majority of our placements in this segment are under our managed services solution.

Previous wording

Physician and leadership solutions segment revenue comprised 23% and 15% of total consolidated revenue for the three months ended March 31, 2024 and 2023, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives across all healthcare settings. The interim healthcare leaders and executives we place are typically placed on contracts with assignment lengths ranging from a few days to one year.

Current wording

Physician and leadership solutions segment revenue comprised 24% and 16% of total consolidated revenue for the six months ended June 30, 2024 and 2023, respectively. Through our physician and leadership solutions segment, we place physicians of all specialties, as well as dentists and advanced practice providers, with clients on a temporary basis, generally as independent contractors. We also recruit physicians and healthcare leaders for permanent placement and place interim leaders and executives across all healthcare settings. The interim healthcare leaders and executives we place are typically placed on contracts with assignment lengths ranging from a few days to one year.

Previous wording

Technology and workforce solutions segment revenue comprised 14% and 12% of total consolidated revenue for both of the three months ended March 31, 2024 and 2023, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service (“SaaS”)-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.

Current wording

Technology and workforce solutions segment revenue comprised 14% and 12% of total consolidated revenue for both of the six months ended June 30, 2024 and 2023, respectively. Through our technology and workforce solutions segment, we provide hospitals and other healthcare facilities with a range of workforce solutions, including: (1) language services, (2) software-as-a-service (“SaaS”)-based VMS technologies through which our clients can self-manage the procurement of contingent clinical labor and their internal float pool, (3) workforce optimization services that include consulting, data analytics, predictive modeling, and SaaS-based scheduling technology, and (4) recruitment process outsourcing services in which we recruit, hire and/or onboard permanent clinical and nonclinical positions on behalf of our clients.

Previous wording

From late 2020 through most of 2022, the COVID-19 pandemic resulted in historically high demand for and utilization of our nurses, allied healthcare professionals and vendor-neutral VMS technologies supporting the placement of these professionals. Since 2022, healthcare organizations have aggressively hired permanent staff and focused on cost containment and alternative staffing models that enable them to reduce utilization of contingent labor. As a result, industry demand and demand in our travel nurse business has declined significantly to below pre-pandemic levels and we saw this trend continue in the first quarter of 2024. In our allied staffing business, demand continues to be above pre-pandemic levels, and certain specialties such as therapy and imaging are up significantly year over year, offsetting the decline in laboratory and other specialties involved in treating COVID-19 patients.

Current wording

Since the COVID-19 pandemic, healthcare organizations have aggressively hired permanent staff and focused on cost containment and alternative staffing models that enable them to reduce utilization of contingent labor across the industry. As a result, demand in our travel nurse business has declined significantly to below pre-pandemic levels. While our largest clients continue to reduce spend on contingent labor, we began to see demand increase during the second quarter, although still below pre-pandemic levels. In our allied staffing business, demand continues to be above pre-pandemic levels, and certain specialties such as therapy and imaging are up significantly year-over-year, offsetting the decline in laboratory and other specialties involved in treating COVID-19 patients.

Previous wording

In our nurse and allied solutions segment, we have seen a decrease in overall staffing volume from prior year and prior quarter primarily due to lower travel nurse demand. Bill rates in the first quarter were relatively flat to prior quarter, but down year-over-year.

Current wording

In our nurse and allied solutions segment, we have seen a decrease in overall staffing volume from prior year due to lower travel nurse demand. Compared to the prior quarter, the average number of travelers on assignment in the second quarter was down due to seasonality, as well as visa retrogression impacting international nurse staffing. Bill rates in the second quarter were down modestly sequentially due to seasonal trends and continued client focus on cost savings.

Previous wording

In our physician and leadership solutions segment, demand for our locum tenens staffing business declined from prior year and prior quarter. Certified registered nurse anesthetists (CRNAs) continue to be the largest specialty for our locum tenens staffing business. Revenue per day filled increased in the first quarter as compared to the prior year and prior quarter. Demand for our interim leadership business is leveling out after several quarters of decline. Demand for our physician permanent placement and executive search businesses continues to be soft as some healthcare organizations streamlined leadership roles, deferred hiring decisions, or increased insourcing.

Current wording

In our physician and leadership solutions segment, demand for our locum tenens staffing business declined from prior year and prior quarter. Certified registered nurse anesthetists (CRNAs) continue to be the largest specialty for our locum tenens staffing business. Revenue per day filled increased in the second quarter as compared to the prior year. Demand for our interim leadership and search businesses continues to be below prior year as some healthcare organizations defer hiring decisions or increase insourcing.

Previous wording

In our technology and workforce solutions segment, our language services business continued to experience increased utilization in our existing clients and growth from new clients. Volumes in our VMS business followed similar trends, although to a greater extent, as our nurse and allied solutions segment, declining from historic highs. Bill rates continued to decrease in the first quarter.

Current wording

In our technology and workforce solutions segment, our language services business continued to experience increased utilization in our existing clients and growth from new clients. Volumes in our VMS business followed similar trends as our travel nurse business, although to a greater extent as compared to the prior year. VMS bill rates in the second quarter were flat sequentially, but down year-over-year.

Previous wording

The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The MSDR acquisition impacts the comparability of the results between the three months ended March 31, 2024 and 2023. See additional information in the accompanying Note (2), “Acquisitions.” Our historical results are not necessarily indicative of our future results of operations.

Current wording

The following table sets forth, for the periods indicated, selected unaudited condensed consolidated statements of operations data as a percentage of revenue. Our results of operations include three reportable segments: (1) nurse and allied solutions, (2) physician and leadership solutions, and (3) technology and workforce solutions. The MSDR acquisition impacts the comparability of the results between the three and six months ended June 30, 2024 and 2023. See additional information in the accompanying Note (2), “Acquisitions.” Our historical results are not necessarily indicative of our future results of operations.

Previous wording

Revenue. Revenue decreased 27% to $820.9 million for the three months ended March 31, 2024 from $1,126.2 million for the same period in 2023, attributable to a decline in organic revenue across our segments with the greatest decline in our nurse and allied solutions segment.

Current wording

Revenue. Revenue decreased 25% to $740.7 million for the three months ended June 30, 2024 from $991.3 million for the same period in 2023, attributable to a decline in organic revenue across our segments with the greatest decline in our nurse and allied solutions segment.

Previous wording

Nurse and allied solutions segment revenue decreased 37% to $519.3 million for the three months ended March 31, 2024 from $824.5 million for the same period in 2023. The $305.2 million decrease was primarily attributable to a 24% decrease in the average number of travelers on assignment, an approximately 15% decrease in the average bill rate, and a 3% decrease in billable hours.

Current wording

Nurse and allied solutions segment revenue decreased 36% to $442.4 million for the three months ended June 30, 2024 from $689.0 million for the same period in 2023. The $246.6 million decrease was primarily attributable to a 24% decrease in the average number of travelers on assignment, an approximately 12% decrease in the average bill rate, and a 1% decrease in billable hours.

Previous wording

Physician and leadership solutions segment revenue increased 14% to $188.8 million for the three months ended March 31, 2024 from $165.8 million for the same period in 2023. The $23.0 million increase was attributable to higher revenue in our locum tenens business, which was partially offset by lower revenue in our interim leadership, physician permanent placement and executive search businesses. Revenue in our locum tenens business grew approximately 36% during the three months ended March 31, 2024 primarily due to additional revenue of $37.1 million in connection with the MSDR acquisition and a 10% increase in the revenue per day filled on an organic basis, partially offset by an 8% decrease in the number of days filled on an organic basis. Our interim leadership business experienced a 25% decline and our physician permanent placement and executive search businesses declined 29% during the three months ended March 31, 2024, primarily due to lower demand.

Current wording

Physician and leadership solutions segment revenue increased 6% to $186.1 million for the three months ended June 30, 2024 from $176.2 million for the same period in 2023. The $9.9 million increase was attributable to higher revenue in our locum tenens business, which was partially offset by lower revenue in our interim leadership, physician permanent placement and executive search businesses. Revenue in our locum tenens business grew approximately 17% during the three months ended June 30, 2024 primarily due to additional revenue of $34.1 million in connection with the MSDR acquisition and a 3% increase in the revenue per day filled on an organic basis, partially offset by a 13% decrease in the number of days filled on an organic basis. Our interim leadership business experienced a 17% decline and our physician permanent placement and executive search businesses declined 27% during the three months ended June 30, 2024, primarily due to lower demand.

Previous wording

Technology and workforce solutions segment revenue decreased 17% to $112.8 million for the three months ended March 31, 2024 from $136.0 million for the same period in 2023. The $23.2 million decrease was primarily attributable to a decline within our VMS and outsourced solutions businesses, partially offset by growth within our language services business. Revenue for our VMS business declined 46% for similar reasons as nurse and allied solutions segment revenue and our outsourced solutions business experienced a 49% decline primarily due to lower demand, while our language services business grew 16% primarily due to a 19% increase in minutes during the three months ended March 31, 2024.

Current wording

Technology and workforce solutions segment revenue decreased 11% to $112.2 million for the three months ended June 30, 2024 from $126.1 million for the same period in 2023. The $13.9 million decrease was primarily attributable to a decline within our VMS and outsourced solutions businesses, partially offset by growth within our language services business. Revenue for our VMS business declined 41% for similar reasons as nurse and allied solutions segment revenue and our outsourced solutions business experienced a 58% decline primarily due to lower demand, while our language services business grew 18% primarily due to a 19% increase in minutes during the three months ended June 30, 2024.

Previous wording

Gross Profit. Gross profit decreased 30% to $257.5 million for the three months ended March 31, 2024 from $368.8 million for the same period in 2023, representing gross margins of 31.4% and 32.8%, respectively. The decline in consolidated gross margin for the three months ended March 31, 2024, as compared to the same period in 2023, was primarily due to (1) a lower margin in our technology and workforce solutions segment primarily due to a change in sales mix resulting from lower revenue in our VMS business and its higher margins as compared to our other businesses within the segment and (2) lower margins in our nurse and allied solutions and physician and leadership solutions segments driven by higher clinician compensation. The overall decline was partially offset by a change in sales mix resulting from lower revenue in our nurse and allied solutions segment. Gross margin by reportable segment for the three months ended March 31, 2024 and 2023 was 25.1% and 25.9% for nurse and allied solutions, 31.6% and 35.2% for physician and leadership solutions, and 59.9% and 71.4% for technology and workforce solutions, respectively.

Current wording

Gross Profit. Gross profit decreased 30% to $229.8 million for the three months ended June 30, 2024 from $330.3 million for the same period in 2023, representing gross margins of 31.0% and 33.3%, respectively. The decline in consolidated gross margin for the three months ended June 30, 2024, as compared to the same period in 2023, was primarily due to (1) a lower margin in our technology and workforce solutions segment primarily due to a change in sales mix resulting from lower revenue in our higher-margin VMS business and higher revenue in our lower-margin language services business and (2) lower margins in our nurse and allied solutions and physician and leadership solutions segments driven by compression in clinician pay packages, including housing and travel. The overall decline was partially offset by a change in sales mix resulting from lower revenue in our nurse and allied solutions segment. Gross margin by reportable segment for the three months ended June 30, 2024 and 2023 was 23.8% and 26.7% for nurse and allied solutions, 30.5% and 35.1% for physician and leadership solutions, and 60.2% and 66.7% for technology and workforce solutions, respectively.

Previous wording

Depreciation and Amortization Expenses. Amortization expense increased 15% to $24.9 million for the three months ended March 31, 2024 from $21.7 million for the same period in 2023, primarily attributable to additional amortization expense related to the intangible assets acquired in the MSDR acquisition. Depreciation expense (exclusive of depreciation included in cost of revenue) increased 12% to $17.8 million for the three months ended March 31, 2024 from $15.9 million for the same period in 2023, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing technology investments to support our tech-centric total talent solutions initiatives and to optimize our internal front and back-office systems. Additionally, $1.8 million and $1.3 million of depreciation expense for our language services business is included in cost of revenue for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Depreciation and Amortization Expenses. Amortization expense increased 12% to $24.7 million for the three months ended June 30, 2024 from $22.1 million for the same period in 2023, primarily attributable to additional amortization expense related to the intangible assets acquired in the MSDR acquisition. Depreciation expense (exclusive of depreciation included in cost of revenue) increased 24% to $18.4 million for the three months ended June 30, 2024 from $14.7 million for the same period in 2023, primarily attributable to an increase in purchased and developed hardware and software placed in service for our ongoing technology investments to support our tech-centric total talent solutions initiatives and to optimize our internal front and back-office systems. Additionally, $1.6 million and $1.4 million of depreciation expense for our language services business is included in cost of revenue for the three months ended June 30, 2024 and 2023, respectively.

Previous wording

Interest Expense, Net, and Other. Interest expense, net, and other was $16.6 million during the three months ended March 31, 2024 as compared to $10.3 million for the same period in 2023. The increase was primarily due to a higher average debt outstanding balance during the three months ended March 31, 2024.

Current wording

Interest Expense, Net, and Other. Interest expense, net, and other was $15.7 million during the three months ended June 30, 2024 as compared to $12.2 million for the same period in 2023. The increase was primarily due to a higher average debt outstanding balance during the three months ended June 30, 2024.

Previous wording

Income Tax Expense. Income tax expense was $6.0 million for the three months ended March 31, 2024 as compared to $31.3 million for the same period in 2023, reflecting effective income tax rates of 26% and 27% for these periods, respectively. The decrease in the effective income tax rate was primarily attributable to the recognition of $2.4 million of net discrete tax benefit during the three months ended March 31, 2024 compared to a $0.8 million net discrete tax benefit during the same period in 2023, in relation to income before income taxes of $23.3 million and $115.4 million for the three months ended March 31, 2024 and 2023, respectively. We currently estimate our annual effective tax rate to be approximately 31% for 2024. The 26% effective tax rate for the three months ended March 31, 2024 differs from our estimated annual effective tax rate of 31% primarily due to certain discrete tax benefits recognized during the three months ended March 31, 2024, in relation to income before income taxes.

Current wording

Income Tax Expense. Income tax expense was $5.7 million for the three months ended June 30, 2024 as compared to $18.6 million for the same period in 2023, reflecting effective income tax rates of 26% and 23% for these periods, respectively. Although the amount of annual non discrete items has remained relatively similar year-over-year, income before income taxes has significantly declined year-over-year resulting in an increase in the effective income tax rate. We currently estimate our annual effective tax rate to be approximately 28% for 2024. The 26% effective tax rate for the three months ended June 30, 2024 differs from our estimated annual effective tax rate of 28% primarily due to certain discrete tax benefits recognized during the three months ended June 30, 2024, in relation to income before income taxes.

Previous wording

For the three months ended March 31, 2024 and 2023, revenue under our MSP arrangements comprised approximately 48% and 57% of our consolidated revenue, 70% and 74% of our nurse and allied solutions segment revenue, 13% and 21% of our physician and leadership solutions segment revenue, and 3% and 2% of our technology and workforce solutions segment revenue, respectively.

Current wording

For the six months ended June 30, 2024 and 2023, revenue under our MSP arrangements comprised approximately 47% and 56% of our consolidated revenue, 70% and 73% of our nurse and allied solutions segment revenue, 13% and 21% of our physician and leadership solutions segment revenue, and 3% and 2% of our technology and workforce solutions segment revenue, respectively.

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative (“SG&A”) expenses were $174.8 million, representing 21.3% of revenue, for the three months ended March 31, 2024, as compared to $205.6 million, representing 18.3% of revenue, for the same period in 2023. The decrease in SG&A expenses was primarily due to $17.1 million of lower employee compensation and benefits (inclusive of share-based compensation), a $2.9 million decrease in the provision for expected credit losses, and an approximately $7.0 million decrease in other expenses associated with our revenue decline. The year-over-year increase in SG&A expenses in our physician and leadership solutions segment was driven by $7.5 million of additional SG&A expenses from the MSDR acquisition, partially offset by the aforementioned decreases. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:

Current wording

Selling, General and Administrative Expenses. SG&A expenses were $323.9 million, representing 20.7% of revenue, for the six months ended June 30, 2024, as compared to $407.4 million, representing 19.2% of revenue, for the same period in 2023. The decrease in SG&A expenses was primarily due to $41.8 million of lower employee compensation and benefits (inclusive of share-based compensation), a $20.6 million decrease in professional services, legal and other expenses, an approximately $11.0 million decrease in other expenses associated with our revenue decline, and a $2.4 million decrease related to changes in the fair value of contingent consideration liabilities from acquisitions recognized in the prior year. The year-over-year increase in SG&A expenses in our physician and leadership solutions segment was driven by $13.4 million of additional SG&A expenses from the MSDR acquisition, partially offset by the aforementioned decreases. SG&A expenses broken down among the reportable segments, unallocated corporate overhead, and share-based compensation are as follows:

Previous wording

As of March 31, 2024, (1) $425.0 million was drawn with $304.2 million of available credit under our $750.0 million secured revolving credit facility (the “Senior Credit Facility”), (2) the aggregate principal amount of our 4.625% senior notes due 2027 (the “2027 Notes”) outstanding was $500.0 million, and (3) the aggregate principal amount of our 4.000% senior notes due 2029 (the “2029 Notes”) outstanding was $350.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2027 Notes, and the 2029 Notes in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2023 Annual Report.

Current wording

As of June 30, 2024, (1) $345.0 million was drawn with $384.6 million of available credit under our $750.0 million secured revolving credit facility (the “Senior Credit Facility”), (2) the aggregate principal amount of our 4.625% senior notes due 2027 (the “2027 Notes”) outstanding was $500.0 million, and (3) the aggregate principal amount of our 4.000% senior notes due 2029 (the “2029 Notes”) outstanding was $350.0 million. We describe in further detail our Amended Credit Agreement (as defined below), under which the Senior Credit Facility is governed, the 2027 Notes, and the 2029 Notes in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (8), Notes Payable and Credit Agreement” of our 2023 Annual Report.

Previous wording

As of March 31, 2024, the total of our contractual obligations under operating leases with initial terms in excess of one year was $55.3 million. We describe in further detail our operating lease arrangements in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (5), Leases” of our 2023 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on our consolidated balance sheets. See additional information in the accompanying Note (7), “Fair Value Measurement,” Note (8), “Income Taxes,” Note (9), “Commitments and Contingencies,” and Note (10), “Balance Sheet Details.”

Current wording

As of June 30, 2024, the total of our contractual obligations under operating leases with initial terms in excess of one year was $54.9 million. We describe in further detail our operating lease arrangements in Part II, Item 8, “Financial Statements and Supplementary Data—Notes to Consolidated Financial Statements—Note (5), Leases” of our 2023 Annual Report. We also have various obligations and working capital requirements, such as certain tax and legal matters, contingent consideration and other liabilities, that are recorded on our consolidated balance sheets. See additional information in the accompanying Note (7), “Fair Value Measurement,” Note (8), “Income Taxes,” Note (9), “Commitments and Contingencies,” and Note (10), “Balance Sheet Details.”

Previous wording

We believe that cash generated from operations and available borrowings under the Senior Credit Facility will be sufficient to fund our operations and liquidity requirements, including expected capital expenditures, for the next 12 months and beyond. We intend to finance potential future acquisitions with cash provided from operations, borrowings under the Senior Credit Facility or other borrowings under our Amended Credit Agreement (as defined below), bank loans, debt or equity offerings, or some combination of the foregoing. The following discussion provides further details of our liquidity and capital resources.

Current wording

We believe that cash generated from operations and available borrowings under the Senior Credit Facility will be sufficient to fund our operations and liquidity requirements, including expected capital expenditures, for the next 12 months and beyond. We intend to finance potential future acquisitions with cash provided from operations, borrowings under the Senior Credit Facility or other borrowings under our Amended Credit Agreement, bank loans, debt or equity offerings, or some combination of the foregoing. The following discussion provides further details of our liquidity and capital resources.

Previous wording

Net cash provided by operating activities for the three months ended March 31, 2024 was $81.4 million, compared to $43.4 million for the same period in 2023. The increase in net cash provided by operating activities was primarily attributable to (1) a decrease in accounts receivable and subcontractor receivables between periods of $106.9 million primarily due to declines in revenue and associate vendor usage during the three months ended March 31, 2024 along with timing of collections, and (2) an increase in accrued compensation and benefits between periods of $64.7 million primarily due to bonuses and commissions that were paid during the three months ended March 31, 2023. The overall increase in net cash provided by operating activities was partially offset by (1) a decrease in net income excluding non-cash expenses of $92.7 million primarily due to a decline in segment operating income across our segments, (2) a decrease in accounts payable and accrued expenses between periods of $23.4 million primarily due to a decline in associate vendor usage and timing of payments, and (3) a decrease in other liabilities between periods of $17.6 million primarily due to an increase in income taxes payable during the prior year resulting from the timing of income tax payments. Our Days Sales Outstanding (“DSO”) was 64 days at March 31, 2024, 70 days at December 31, 2023, and 55 days at March 31, 2023.

Current wording

Net cash provided by operating activities for the six months ended June 30, 2024 was $180.9 million, compared to $241.1 million for the same period in 2023. The decrease in net cash provided by operating activities was primarily attributable to (1) a decrease in net income excluding non-cash expenses of $114.1 million primarily due to a decline in segment operating income across our segments, (2) a decrease in other liabilities between periods of $63.9 million primarily due to prior year increases in income taxes payable (resulting from the timing of income tax payments) and accrued loss contingencies, (3) an increase in accounts receivable and subcontractor receivables between periods of $27.3 million primarily due to declines in revenue and associate vendor usage during the six months ended June 30, 2024 along with timing of collections, and (4) an increase in income taxes receivable between periods of $12.5 million primarily due to an overpayment of estimated taxes during prior year. The overall decrease in net cash provided by operating activities was partially offset by (1) an increase in accounts payable and accrued expenses between periods of $100.1 million primarily due to a smaller decrease in the subcontractor payable balance in the current year as compared to the prior year, which was the result of decreases in associate vendor usage and timing of payments, and (2) an increase in accrued compensation and benefits between periods of $63.8 million primarily due to bonuses and commissions that were paid during the three months ended March 31, 2023. Our Days Sales Outstanding (“DSO”) was 63 days at June 30, 2024, 70 days at December 31, 2023, and 53 days at June 30, 2023.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2024 was $21.4 million, compared to net cash used in investing activities of $32.4 million for the same period in 2023. The decrease was primarily due to $4.5 million of payments to fund the deferred compensation plan during the three months ended March 31, 2024, as compared to $17.0 million of payments during the three months ended March 31, 2023. In addition, capital expenditures were $18.1 million and $17.5 million for the three months ended March 31, 2024 and 2023, respectively.

Current wording

Net cash used in investing activities for the six months ended June 30, 2024 was $43.7 million, compared to net cash used in investing activities of $54.9 million for the same period in 2023. The decrease was primarily due to $4.5 million of payments to fund the deferred compensation plan during the six months ended June 30, 2024, as compared to $17.9 million of payments during the six months ended June 30, 2023. In addition, capital expenditures were $45.4 million and $43.9 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Net cash used in financing activities during the three months ended March 31, 2024 was $39.0 million, due to repayments of $50.0 million under the Senior Credit Facility and $4.0 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $15.0 million under the Senior Credit Facility. Net cash used in financing activities during the three months ended March 31, 2023 was $44.5 million, due to (1) $174.7 million paid in connection with the repurchase of our common stock, (2) repayments of $70.0 million under the Senior Credit Facility, (3) $6.1 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, and (4) $3.6 million payment of financing costs in connection with the Third Amendment (as defined below), all of which was partially offset by borrowings of $210.0 million under the Senior Credit Facility.

Current wording

Net cash used in financing activities during the six months ended June 30, 2024 was $119.1 million, due to repayments of $140.0 million under the Senior Credit Facility and $4.1 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, partially offset by borrowings of $25.0 million under the Senior Credit Facility. Net cash used in financing activities during the six months ended June 30, 2023 was $247.7 million, due to (1) $424.7 million paid in connection with the repurchase of our common stock, (2) repayments of $220.0 million under the Senior Credit Facility, (3) $9.4 million in cash paid for shares withheld for payroll taxes resulting from the vesting of employee equity awards, and (4) $3.6 million payment of financing costs in connection with the Third Amendment (as defined below), all of which was partially offset by borrowings of $410.0 million under the Senior Credit Facility.

Previous wording

At March 31, 2024, we maintained outstanding standby letters of credit totaling $21.3 million as collateral in relation to our workers’ compensation insurance agreements and a corporate office lease agreement. Of the $21.3 million of outstanding letters of credit, we have collateralized $0.6 million in cash and cash equivalents and the remaining $20.8 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2023 totaled $21.3 million.

Current wording

At June 30, 2024, we maintained outstanding standby letters of credit totaling $20.9 million as collateral in relation to our workers’ compensation insurance agreements and a corporate office lease agreement. Of the $20.9 million of outstanding letters of credit, we have collateralized approximately $0.6 million in cash and cash equivalents and the remaining approximately $20.4 million is collateralized by the Senior Credit Facility. Outstanding standby letters of credit at December 31, 2023 totaled $21.3 million.

Previous wording

•the extent to which a spike in the COVID-19 pandemic may disrupt our operations due to the unavailability of our employees or healthcare professionals because of illness, risk of illness, quarantines, travel restrictions, mandatory vaccination requirements, desire to travel and work on temporary assignments or other factors that limit our existing or potential workforce and pool of candidates;

Current wording

•the extent to which a resurgence in the COVID-19 pandemic may disrupt our operations due to the unavailability of our employees or healthcare professionals because of illness, risk of illness, quarantines, travel restrictions, mandatory vaccination requirements, desire to travel and work on temporary assignments or other factors that limit our existing or potential workforce and pool of candidates;