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On Assignment Revenue Up, Apex Acquisition Nears Close

April 27 2012

On Assignment Inc. (NASD: ASGN) first-quarter revenue topped analyst estimates and the company’s own guidance, rising 29.1 percent to $167.1 million. The Calabasas, Calif.-based staffing firm also reported it expects that its acquisition of Apex Systems will close May 15 assuming shareholders approve the deal, according to a conference call with analysts.

On Assignment plans to buy Apex for $383 million in cash plus stock. Apex ranks as the sixth largest U.S. IT staffing firms, according to Staffing Industry Analysts.

First-quarter revenue numbers do not include Apex revenue. However, On Assignments’ first-quarter revenue rose in all segments. Revenue by segment includes:

  • First-quarter revenue in information technology and engineering, the company’s largest segment, rose 31.0 percent to $78.8 million.
  • Physician staffing revenue jumped 45.8 percent to $24.1 million. The company acquired Health Care Partners, a locum tenens and physician staffing firm in July 2011
  • Life sciences revenue rose 25.5 percent to $41.4 million. The company acquired Valesta, a European-based provider of clinical research staffing, in the first quarter of 2011.
  • Allied healthcare revenue rose 23.9 percent to $12.6 million.
  • Travel nurse revenue rose 6.3 percent to $10.3 million.

On Assignment’s first-quarter gross margin narrowed to 32.9 percent from 33.3 percent a year ago.

Net income jumped 70.1 percent on a year-over-year basis to $5.4 million.

Excluding revenue from Apex Systems, On assignment forecast second-quarter revenue of between $177 million to $180 million, an increase of between 23.2 percent and 25.3 percent. It forecast second-quarter gross margin of approximately 33 percent.

On Assignment Inc. (NASD: ASGN)
For the quarter ended March 31, 2012, compared with the year-ago quarter.
Revenue: $167.1 million, +29.1 percent
Net income: $5.4 million, +70.1 percent

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