IT Staffing Report: May 8, 2014

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Public IT staffing firm revenues are mixed bag in Q1

Information technology staffing was a bit of a mixed bag among publicly traded IT staffing companies in the first quarter. CDI Corp. (NYSE: CDI) and CTG (NASD: CTG) posted year-over-year declines. On Assignment Inc. (NYSE: ASGN) Oxford division revenue rose thanks to its acquisition of CyberCoders. On Assignment’s Apex division, Robert Half Technology and Mastech Holdings Inc. (NYSE MKT: MHH) posted increases.

On Assignment President and CEO Peter Dameris said in a conference call with analysts that his company’s Apex division has seen an increase in demand from all geographies in the first quarter despite the severe weather in the Northeast. Apex also now includes On Assignment’s US Lab Support scientific staffing business.

On Assignment’s Oxford IT division now includes the company's high-end clinical research business, health information management practice and its CyberCoders business. “The segment grew 14.4 percent year over year on a reported basis in the first quarter including the results of CyberCoders which was acquired on December 5, 2013,” Dameris said. “Excluding the results of CyberCoders, the Oxford segment contracted 2.5 percent year over year and was flat sequentially with the fourth quarter.”

Kforce Inc. technology flex revenue rose 18.4 percent in the first quarter to $192.5 million. “Overall, our key performance indicators for technology remain at high levels for job orders, external submittals and send-outs, and starts have improved in April from Q1 levels,” Kforce President Joe Liberatore said in a conference call with analysts.

“Candidate supply remains tight, particularly in skill sets such as Java, [Epic], .NET, project and program management,” Liberatore said. “We continue to see strong demand in our two largest industry verticals of financial services due to increasing regulatory and compliance needs, coupled with healthcare, our largest industry vertical, as hospitals and healthcare organizations implement systems and transition their platforms to more of a shared services model. However, the demand is broad-based, as we’ve experienced recent gains in telecom, insurance and the computer services industry in particular.”

CTG reported staffing revenue fell by 9.9 percent in the first quarter to $59.3 million. Staffing revenue represents 61 percent of revenue at the Buffalo, N.Y.-based IT staffing and solutions firm. “The IT staffing decrease was primarily due to a significant decrease in demand from our largest staffing customer which originally began in the 2013 second quarter. In the 2014 first quarter, this decrease in demand was partially offset by a modest increase in demand from our other large staffing customers,” the company wrote in a filing with the U.S. Securities and Exchange Commission.

IBM is CTG’s largest customer and accounted for 22.0 percent of revenue, or $21.5 million in the first quarter, according to CTG’s 10-Q.

Revenues

  Revenue ($millions) y/y
  1Q 2014 1Q 2013 Change
CDI Corp. $60.1 $72.0 -16.5%
CTG (1) $59.3 $65.8 -9.9%
Kforce Inc. (2) $192.5 $162.8 18.2%
Mastec Holdings Inc. (3) $28.7 $24.0 19.5%
On Assignment      
     Oxford (4) $117.5 $102.7 14.4%
     Apex (5) $278.4 $239.8 16.1%
Robert Half Technology $132.3 $121.0 9.3%
(1) Includes European revenue      
(2) Technology flex revenue      
(3) Wholesale/retail IT channel revenue; sold healthcare opertions in third quarter of 2013.
(4) Oxford amounts include healthcare information management and CyberCoders acquisition.
(5) Now includes US Lab Support