Daily News

View All News

On Assignment revenue rises 15%, gross margin up on acquisition

July 31, 2014

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.