On Assignment revenue beats forecast in fourth quarter

On Assignment Inc. (NYSE: ASGN) reported fourth-quarter revenue of $577.5 million, beating the top end of its forecast of $568.0 million.

The Calabasas, Calif.-based company ranked as the 11th-largest US staffing firms with top segments served including IT and life sciences based on 2014 revenue. On Assignment acquired marketing/creative staffing firm Creative Circle in the second quarter of 2015.

Fourth-quarter revenue rose 30.9% year over year in the fourth quarter. However, revenue rose 14.4% on a pro forma basis, which treats the acquisitions of Creative Circle and a life sciences business in Europe, also in the second quarter of 2015, as if they had occurred at the beginning of 2014.

In constant currency, fourth-quarter revenue rose 31.7% (not on a pro forma basis).

Creative Circle’s results are included in On Assignment’s Apex segment, where revenue rose 40.7% to $433.0 million. Creative Circle added $74.6 million in revenue to the fourth quarter and the life sciences business added $2.8 million in revenue for the fourth quarter.

On Assignment also beat its forecast on gross margin. The company reported gross margin of 33.4% in the fourth quarter, compared with 33.2% at the high end of its forecast.

Quote

“While we are sensitive and conscious of the fears of an economic slowdown in the US, to date we have not seen a change in our customers’ normal purchasing behavior,” President and CEO Peter Dameris said in a conference call with analysts. “We continue to see solid demand from end markets we serve, and we are benefiting from the improved productivity of the additional headcount we added during our hiring surge last year.”