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On Assignment revenue falls, gross margin up

November 03 2009
Staffing Industry Analysts North American Daily News

On Assignment Inc. (NASD: ASGN) reported third-quarter revenue fell 39.5% to $98.1 million from $161.9 million in the same period last year. Gross margin improved.

Third-quarter physician staffing revenue fell just 4.3% on a year-over-year basis to $22.6 million, the Calabasas CA-based healthcare and professional staffing firm reported.

In other staffing segments, life sciences third-quarter revenue fell 33.5% to $22.6 million from the year-ago quarter, allied healthcare revenue fell 29.3% to $10.3 million, nurse travel revenue fell 67.9% to $10.7 million, and information technology and engineering revenue fell 43.5% to $31.9 million.

Third-quarter gross margin improved to 33.4% from 32.6% in the year-ago quarter. The improvements in gross margin came from the healthcare and physician staffing segments. Healthcare segments' third-quarter gross margin rose to 29.9% from 25.6%, and physician staffing gross margin improved to 33.4% from 31.6%. Life sciences gross margin fell to 33.6% from 34.2%, and IT and engineering gross margin fell to 35.7% from 38.1%.

Third-quarter net income fell 79.0% to $1.5 million from $6.9 million in the same period last year.

On Assignment estimated fourth-quarter revenue of between $93 million to $98 million, a year-over-year decrease of between approximately 33.5% and 37%.

"For the first time since the third quarter of 2008, the number of billable consultants out on assignment was greater at the end of the quarter than at the beginning," said President and CEO Peter Dameris. "This placement trend should permit us to grow revenues sequentially on a same number of billable day basis in the seasonally impacted fourth quarter."

On Assignment Inc. (NASD: ASGN)
For the third quarter ended Sept. 30, 2009, compared with the same period in 2008.
Revenue: $98.1 million, -39.5%
Net income: $1.5 million, -79.0%


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