On Assignment Q3 revenue rises, will step up sales and recruitment hiring
October 30, 2014
On Assignment Inc. (NYSE: ASGN) revenue rose 13.4 percent year over year in the third quarter to $477.9 million. The company had forecast third-quarter revenue of between $479.0 million and $483.0 million. In Wednesday’s earnings release, On Assignment also reported plans to aggressively step up hiring of sales and recruiting personnel.
On a pro forma basis, revenue was up 7.2 percent. Pro forma assumes the acquisitions of Whitaker Medical LLC and CyberCoders Holdings Inc. in December 2013 had occurred at the beginning of 2013.
Third-quarter gross margin improved to 32.6 percent from 30.2 percent in the year-ago quarter.
Quote
“We continue to benefit from greater adoption of staff augmentation as an attractive alternative to full-time and outsourcing solutions,” said President and CEO Peter Dameris. “Currently enterprisewide IT spending in large customers, specifically in financial services, is more measured than in small to medium sized customers. We believe this difference in spending cycles between the sub-segments of customers in the IT services market will return to the norm in 2015. While our revenues are growing above market, our rate of growth is below our potential and historical performance. In the second half of this year, especially in the fourth quarter, we are aggressively stepping up our hiring of sales and recruiting personnel to accelerate our future growth rates.”
Revenue
|
| Q3 2014 (000s)
| Q3 2013 (000s)
| % growth
| pro forma % growth*
|
|
| Revenue
| $477,824
| $421,491
| 13.4%
| 7.2%
|
|
|
|
|
|
|
|
|
| *Assumes acquisitions of Whitaker Medical LLC and CyberCoders Holdings Inc. in December 2013 occurred at the beginning of 2013
|
Revenue by segment
|
| Q3 2014 (000s)
| Q3 2013 (000s)
| % growth
|
| Apex**
| $306,027
| $276,849
| 10.5%
|
| Oxford**
| $125,944
| $107,413
| 17.3%
|
| Physician
| $34,948
| $26,223
| 33.3%
|
| Life Sciences Europe**
| $10,905
| $11,006
| -0.9%
|
Gross margin
|
| Q3 2014
| Q3 2013
|
| Gross margin
| 32.6%
| 30.2%
|
Gross margin by segment
|
| Q3 2014
| Q3 2013
|
| Apex**
| 28.5%
| 28.5%
|
| Oxford**
| 43.1%
| 34.3%
|
| Physician
| 29.6%
| 28.2%
|
| Life Sciences Europe**
| 33.7%
| 37.7%
|
Direct hire and conversion revenue
|
| Q3 2014 (000s)
| Q3 2013 (000s)
| % growth
|
| Apex**
| $3,930
| $3,414
| 15.1%
|
| Oxford**
| $18,245
| $1,613
| nm
|
| Physician
| $793
| $1,033
| -23.2%
|
| Life Sciences Europe**
| $698
| $1,120
| -37.7%
|
| Consolidated
| $23,666
| $7,180
| nm
|
Average number of staffing consultants
|
| Q3 2014
| Q3 2013
|
| Apex**
| 875
| 796
|
| Oxford**
| 813
| 580
|
| Physician
| 142
| 93
|
| Life Sciences Europe**
| 49
| 63
|
| Consolidated
| 1,879
| 1,532
|
Average number of customers
|
| Q3 2014
| Q3 2013
|
| Apex**
| 1,475
| 1,345
|
| Oxford**
| 863
| 757
|
| Physician
| 261
| 188
|
| Life Sciences Europe**
| 150
| 148
|
| Consolidated
| 2,749
| 2,438
|
Top 10 customers as a percentage of revenue
|
| Q3 2014
| Q3 2013
|
| Apex**
| 29.8%
| 35.1%
|
| Oxford**
| 13.6%
| 17.2%
|
| Physician
| 19.0%
| 21.4%
|
| Life Sciences Europe**
| 50.9%
| 55.0%
|
| Consolidated
| 19.1%
| 20.5%
|
Average bill rate
|
| Q3 2014
| Q3 2013
|
| Apex**
| $54.65
| $54.10
|
| Oxford**
| $112.33
| $116.80
|
| Physician
| $176.80
| $182.71
|
| Life Sciences Europe**
| $54.06
| $51.68
|
| Consolidated
| $65.57
| $65.29
|
Gross profit per staffing consultant
|
| Q3 2014
| Q3 2013
|
| Apex**
| $100,000
| $99,000
|
| Oxford**
| $67,000
| $63,000
|
| Physician
| $73,000
| $79,000
|
| Life Sciences Europe**
| $75,000
| $66,000
|
| Consolidated
| $83,000
| $83,000
|
|
|
|
|
| ** Lab support US, formerly part of the life sciences segment, is now reported under Apex. Clinical research, also formerly part of life sciences, is now reported under Oxford. European life sciences is now reported in its own segment.
|
Net income
|
| Q3 2014 (000s)
| Q3 2013 (000s)
| % growth
|
| Net income
| $22,005
| $20,789
| 5.8%
|
Guidance
On Assignment estimates fourth-quarter revenue of between $467.0 and $473.0 million; those are below Yahoo!'s average analyst esimate of $478.5 million in fourth-quarter revenue. However, the fourth-quarter revenue estimates are up between 10.2 percent and 11.7 percent over the fourth quarter of 2013.
Share price and market cap
On Assignment shares fell 7.15 percent in early afternoon trading to 27.77. The company had a market cap of $1.51 billion.
