Daily News

View All News

On Assignment Q2 revenue up 12%, including Creative Circle buy

July 30, 2015

Second-quarter revenue rose 11.7% at On Assignment Inc. (NYSE: ASGN) to $485.3 million.

Excluding contribution from acquisitions, second-quarter revenue rose 6.7%, but was up 7.8% on a constant currency basis. On Assignment acquired Creative Circle LLC, a digital/creative staffing firm, effective June 5 for $570 million in cash and stock plus up to $30 million in contingent consideration.

(US$ thousands) Q2 2015 Q2 2014 % growth
Revenue $485,323 $434,424 11.7%
Gross profit   $158,534 $141,905 11.7%
Gross margin   32.7% 32.7%  
Net income $14,252 $20,789 -31.4%

Creative Circle contributed $19.6 million in revenue for the quarter. On Assignment also acquired a small life sciences business in Europe that contributed $2.2 million in revenue to the quarter.

The Creative Circle business is included in On Assignment’s Apex segment and life sciences Europe revenue is included in the Oxford segment.

Quote

“Excluding the contribution from Creative Circle, our results (adjusted mainly for acquisition-related costs and the write-off of loan costs associated with our old credit facility) were at or above the high-end of our previously announced financial estimates for the quarter,” said President and CEO Peter Dameris. “Our revenue growth rates were higher than expected and reflected a slight re-acceleration in our growth rate for the first time in four quarters. Our cash generation during the quarter was strong and permitted us to pay down our indebtedness by $25 million prior to the end of the quarter and we expect to voluntarily pay down an additional $25 million by the end of July.”

Revenue by segment

(US$ thousands) Q2 2015 Q2 2014 % growth
Apex $338,704 $297,893 13.7%
Oxford $146,619 $136,531 7.4%

Direct hire and conversion revenue

(US$ thousands) Q2 2015 Q2 2014 % growth
Apex $6,285 $3,988 57.6%
Oxford $22,446 $17,483 28.4%
Consolidated $28,731 $21,471 33.8%

Gross margin by segment

  Q2 2015 Q2 2014
Apex 28.8% 28.4%
Oxford 41.5% 41.9%

Average bill rates

  Q2 2015 Q2 2014
Apex $54.99 $54.16
Oxford $101.01 $102.95
Consolidated $62.54 $62.51

Guidance

On Assignment estimates third-quarter revenue of $550.0 million to $555.0 million, up 15.1% to 16.2% on a year-over-year basis. It forecast gross margin of between 33.5% to 33.8%.

Share price and market cap

On Assignment shares rose 6.13% to $39.80 in late morning trading. The company had a market cap of $2.09 billion, according to Yahoo!