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View All NewsOn Assignment revenue rises 15%, gross margin up on acquisition
On Assignment Inc. (NYSE: ASGN) reported revenue rose 14.9 percent in the second quarter to $468.6 million. Revenue was up 8.6 percent on a pro forma basis, which assumes the acquisitions of Whitaker Medical LLC and CyberCoders Holdings Inc. in December 2013 occurred at the beginning of 2013.
Revenue came in slightly below the forecast range of $469.0 million to $472.0 million.
Second-quarter gross margin at the Calabasas, Calif.-based professional staffing firm improved to 32.6 percent from 29.7 percent in the year-ago quarter. The increase was mainly attributable to the inclusion of CyberCoders, which represented $16.0 million of On Assignment’s $22.7 million in permanent placement revenue.
Quote
President and CEO Peter Dameris:
“While we are pleased with our overall performance for the quarter, our revenues were slightly below our estimates. These estimates had assumed higher growth in the number of contract professionals on billing at our Oxford IT division and that Oxford would hit an inflection point during the quarter where the number of contractors on billing would exceed the high-water mark of 1,875 set in the second quarter of 2013. While Oxford did hit this inflection point, it occurred much later in the quarter than expected. Revenue growth at Apex was also slightly lower than expected as a result of lower growth from large accounts, which we believe relates to the normal ebb and flow of these accounts.”
Revenue
Q2 2014 (000s) | Q2 2013 (000s) | % growth | pro forma % growth* | |
Revenue | $468,618 | $407,864 | 14.9% | 8.6% |
*Assumes acquisitions of Whitaker Medical LLC and CyberCoders Holdings Inc. in December 2013 occurred at the beginning of 2013 |
Revenue by segment
Q2 2014 (000s) | Q2 2013 (000s) | % growth | |
Apex | $297,893 | $262,347 | 13.5% |
Oxford | $126,004 | $109,153 | 15.4% |
Physician | $33,657 | $26,466 | 27.2% |
Life Sciences Europe | $11,064 | $9,898 | 11.8% |
Gross margin
Q2 2014 | Q2 2013 | |
Gross margin | 32.6% | 29.7% |
Gross margin by segment
Q2 2014 | Q2 2013 | |
Apex | 28.4% | 27.8% |
Oxford | 42.5% | 34.0% |
Physician | 30.6% | 28.9% |
Life Sciences Europe | 37.4% | 37.0% |
Net income
Q2 2014 (000s) | Q2 2013 (000s) | % growth | |
Net income | $20,789 | $7,339 | 183.3% |
Guidance
Third-quarter revenue estimated at between $479.0 million to $483.0 million.
Share price and market cap
On Assignment shares fell 23.35 percent in early afternoon trading to $26.75. The company had a market cap of $1.46 billion.