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View All NewsOn Assignment revenue up 9% in Q4, growth is in Apex division
On Assignment Inc. (NYSE: ASGN) reported revenue rose 9.4% in the fourth quarter. The increase was 8.6% excluding revenue from Stratacuity, a Boston-based provider of clinical and scientific staffing that On Assignment acquired in August.
The Calabasas, Calif.-based staffing provider reported revenue rose in 12.3% in its Apex division, which includes Apex Systems, Apex Life Sciences and Creative Circle. Revenue edged down 0.3% at the company’s Oxford division, which includes Oxford Global Resources, CyberCoders and Life Sciences Europe.
| (US$ thousands) | Q4 2017 | Q4 2016 | % growth |
| Revenue | $679,035 | $620,884 | 9.4% |
| Gross profit | $220,677 | $198,195 | 11.3% |
| Gross margin | 32.5% | 31.9% | |
| Net income | $67,331 | $24,028 | 180.2% |
Gross margin improved and net income increased. The company reported a one-time, noncash benefit of $31.4 million from the reduction in deferred tax liabilities related to the new tax legislation.
As previously announced, On Assignment in January struck a deal to acquire government services contractor ECS Federal LLC for $775 million and also announced it will change its name to ASGN. The acquisition is now expected to close April 2. On a stand-alone basis, On Assignment estimates full-year 2018 revenue of $620.0 million to $640.0 million and a net loss of between $14.3 million and $19.0 million for ECS.
Quote
“We are well positioned going into 2018,” On Assignment CEO Peter Dameris said. “Our previously announced acquisition of ECS will strengthen our position as one of the largest and fasting growing IT services firms in North America and increase our addressable end market to $279 billion by virtue of our entering the $129 billion government services space.”
Revenue by segment
| (US$ thousands) | Q4 2017 | Q4 2016 | % growth |
| Apex | $534,700 | $476,100 | 12.3% |
| Oxford | $144,400 | $144,800 | -0.3% |
Permanent placement revenue
| (US$ thousands) | Q4 2017 | Q4 2016 | % growth |
| Apex | $10,400 | $10,000 | 3.9% |
| Oxford | $21,200 | $18,900 | 12.0% |
| Consolidated | $31,600 | $28,900 | 9.2% |
Gross margin by segment
| Q4 2017 | Q4 2016 | |
| Apex | 30.0% | 29.5% |
| Oxford | 41.8% | 39.9% |
Average bill rates
| Q4 2017 | Q4 2016 | |
| Apex | $57.46 | $56.57 |
| Oxford | $101.16 | $99.12 |
| Consolidated | $62.88 | $62.12 |
Full-year results
| (US$ thousands) | 2017 | 2016 | % growth |
| Revenue | $2,625,924 | $2,440,413 | 7.6% |
| Gross profit | $850,073 | $795,183 | 6.9% |
| Gross margin | 32.4% | 32.6% | |
| Net income | $157,675 | $97,201 | 62.2% |
Guidance
On Assignment forecast first-quarter revenue of $672.0 million to $682.0 million and gross margin of 31.5% to 31.8%. This forecast does not include operating results from ECS
Share price and market cap
Shares in On Assignment edged down 0.34% to $74.01 as of 1:28 p.m. Eastern time today. The company had a market cap of $3.85 billion.