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View All NewsOn Assignment Q1 revenue up 6%, but weather and foreign currency impact earnings
On Assignment Inc. (NYSE: ASGN) reported revenue rose 5.7% in the first quarter to $430.0 million; it had estimated revenue of between $432.0 million to $439.0 million. The increase was 6.7% on a constant currency basis. The company reported revenues were adversely affected by $4.5 million to $5.5 million from inclement weather. Foreign currency exchange also adversely affected revenues $4.0 million year over year.
On Assignment on Feb. 1 closed the sale of its physician segment, Vista Staffing Solutions Inc., to Envision Healthcare (NYSE: EVHC) for $123.0 million. Operating results of this segment, as well as the European retained search unit closed in December, are included in discontinued operations for all periods presented.
Net income rose to $39.1 million from $13.9 million in the first quarter of 2014; it included income from discontinued operations of $26.1 million, mainly related to the gain on the sale of the physician segment.
| (US$ thousands) | Q1 2015 | Q1 2014 | % growth |
| Revenue | $430,045 | $406,851 | 5.7% |
| Gross profit | $135,875 | $128,155 | 6.0% |
| Gross margin | 31.6% | 31.5% | |
| Net income | $39,135 | $13,917 | 181.2% |
Quote
“During the quarter, we believe we made important progress in expanding our internal staff of sales consultants and recruiters and positioning ourselves to continue our growth through strategic acquisitions,” said President and CEO Peter Dameris. “The average number of sales consultants and recruiters during the quarter was 1,887, which is up 14.6% year-over-year. We expect to see higher revenues from this investment beginning in the third quarter as the typical ramp up time for new staff is nine to 12 months.”
Revenue by segment
| (US$ thousands) | Q1 2015 | Q1 2014 | % growth |
| Apex | $294,293 | $278,408 | 5.7% |
| Oxford | $127,471 | $117,500 | 8.5% |
| Life Sciences Europe | $8,281 | $10,943 | -24.3% |
Direct hire and conversion revenue
| (US$ thousands) | Q1 2015 | Q1 2014 | % growth |
| Apex | $4,079 | $3,682 | 10.8% |
| Oxford | $19,628 | $15,027 | 30.6% |
| Life Sciences Europe | $197 | $285 | -30.9% |
| Consolidated | $23,904 | $18,994 | 25.9% |
Gross margin by segment
| Q1 2015 | Q1 2014 | |
| Apex | 27.1% | 27.1% |
| Oxford | 42.0% | 41.7% |
| Life Sciences Europe | 32.7% | 33.1% |
Average bill rates
| Q1 2015 | Q1 2014 | |
| Apex | $54.02 | $53.89 |
| Oxford | $113.02 | $110.55 |
| Life Sciences Europe | $47.68 | $53.66 |
| Consolidated | $62.06 | $61.93 |
Guidance
On Assignment forecasts second-quarter revenue of between $454.0 million to $459.0 million.
Share price and market cap
Shares in On Assignment fell 10.15% in early afternoon trading today to $34.00. The company had a market cap of $1.75 billion, according to Yahoo!