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View All NewsOn Assignment Q2 revenue up 29%, including aquisitions
Third-quarter revenue rose 29.3% at On Assignment Inc. (NYSE: ASGN) to $572.1 million. The increase was 30.3% on a constant currency basis.
Excluding acquisitions, third-quarter revenue was $496.4 million, up 12% (or up 13.1% on a constant currency basis).
On Assignment in June acquired Creative Circle LLC, a digital/creative staffing firm, for $570 million in cash and stock plus up to $30 million in contingent consideration. It also acquired a small life sciences business in Europe in the second quarter. Excluding contribution from acquisitions, third-quarter revenue rose 12.2%, or 13.1% in constant currency.
| (US$ thousands) | Q3 2015 | Q3 2014 | % growth |
| Revenue | $572,123 | $442,443 | 29.3% |
| Gross profit | $191,404 | $144,838 | 32.2% |
| Gross margin | 33.5% | 32.7% | |
| Net income | $24,925 | $22,005 | 13.3% |
Revenues from the acquisitions totaled $75.7 million in the third quarter; Creative Circle contributed $73.0 million in revenue and the acquired European life sciences business contributed $2.7 million. Operating results of Creative Circle are included in the Apex segment while the life sciences business is included in the Oxford segment.
Quote
“We believe the secular trend of customers wanting to share human capital has driven attractive growth for the entire professional staffing industry,” said President and CEO Peter Dameris. “Customers are continuing to embrace the realization that the best way to ‘fractionalize’/share human capital and avoid the legal risks of misclassifying employees is by working with a staffing firm. As the secular trend of sharing human capital gains speed, we believe the professional staffing industry will be the net beneficiary of customers refusing to use independent contractors and instead, using professional staffing firms.”
Revenue by segment
| (US$ thousands) | Q3 2015 | Q3 2014 | % growth |
| Apex | $421,067 | $306,027 | 37.6% |
| Oxford | $151,056 | $136,416 | 10.7% |
Direct hire and conversion revenue
| (US$ thousands) | Q3 2015 | Q3 2014 | % growth |
| Apex | $10,574 | $3,930 | 169.1% |
| Oxford | $22,166 | $18,523 | 19.7% |
| Consolidated | $32,740 | $22,453 | 45.8% |
Gross margin by segment
| Q3 2015 | Q3 2014 | |
| Apex | 30.6% | 28.5% |
| Oxford | 41.5% | 42.2% |
Average bill rates
| Q3 2015 | Q3 2014 | |
| Apex | $55.51 | $54.65 |
| Oxford | $99.33 | $102.33 |
| Consolidated | $61.64 | $62.56 |
Guidance
On Assignment estimates fourth-quarter revenue of $563.0 million to $568.0 million, up 18.3% to 19.4% on a year-over-year basis. It forecast gross margin of 32.8% to 33.2%.
Share price and market cap
On Assignment shares rose 7.79% to $44.70 in late morning trading today. The company had a market cap of approximately $2.35 billion, according to Yahoo!