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US - On Assignment revenue rises 15%

February 20 2014

On Assignment Inc. (NYSE: ASGN) reported revenue rose 14.7 percent in the fourth quarter to $423.6 million. “We reported strong financial performance for the quarter, completed the sale of our allied healthcare unit and acquired two businesses, which we believe further solidify our position as a top player in each of the markets we serve,” said President and CEO Peter Dameris. “Revenues, gross profit, income from continuing operations and adjusted EBITDA were above the high-end of our estimates. We believe we are well positioned and have good momentum going into 2014.”

Shares in the Calabasas, Calif.-based company rose 5.20 percent in early afternoon trading.

On Assignment closed the sale of its allied healthcare unit to Cross Country Healthcare Inc. (NASD: CCRN) for $28.7 million during the quarter. It also acquired physician staffing business Whitaker Medical LLC and permanent placement firm CyberCoders Holdings Inc., which combined to contributed $5.9 million in revenue for the quarter. To read about the transactions, click here.

Excluding results from two firms acquired during the quarter, revenues rose 13.1 percent to $417.7 million.

On Assignment’s largest business segment, IT staffing provider Apex, posted a 20.4 percent in increase in fourth-quarter revenue to $249.9 million. On Assignment’s other IT segment, Oxford, posted 6.6 percent growth in fourth-quarter revenue to $101.8 million.

Life sciences staffing revenue rose 11.8 percent in the fourth quarter to $45.0 million. Physician staffing revenue rose 2.9 percent in the fourth quarter to $26.8 million.

On Assignment’s fourth-quarter gross margin edged up to 30.6 percent from 30.3 percent in the fourth quarter of 2012. The company attributed the year-over-year expansion in gross margin to a higher mix of permanent placement revenues (2.1 percent of revenues for the quarter compared with 1.8 percent in the fourth quarter of 2012) and slightly higher contract margins. The higher mix of permanent placement revenues in the quarter was attributable to the inclusion of CyberCoders, which accounted for $2.7 million of the $8.9 million in permanent placement revenues.

Net income rose 128.2 percent to $32.4 million in the fourth quarter from $14.2 million in the fourth quarter of 2012.

On Assignment has a market cap of $1.73 billion, according to Yahoo!

Full-year 2013 revenue at On Assignment rose 43.4 percent to $1.63 billion. Full-year net income rose 98.1 percent to $84.5 million.

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