Adjusted EPS & Adjusted EBITDA within Previously Announced Estimates
Closes Sale of Physician Segment
CALABASAS, Calif.--(BUSINESS WIRE)--On Assignment, Inc. (NYSE: ASGN), a leading global provider of
diversified professional staffing solutions, today reported results for
the quarter ended March 31, 2015. Operating results of the Physician
Segment, which was sold effective February 1, 2015, are included in
discontinued operations for all periods presented.
First Quarter Highlights
-
Revenues were $430.0 million; up 5.7 percent year-over-year (6.7
percent on a constant currency basis). Adverse effect of inclement
weather on revenues was approximately $4.5 to $5.5 million ($2.0
million higher than previous estimates) and foreign currency exchange
rates adversely affected revenues $0.9 million more than expected.
-
Adjusted income from continuing operations (a non-GAAP measure defined
below) was $21.6 million ($0.41 per diluted share).
-
Excluding the $1.3 million ($0.8 million after income taxes) in
acquisition, integration and strategic planning expenses incurred
during the quarter, which was not included in our earnings estimates,
income from continuing operations was $13.8 million ($0.26 per diluted
share).
-
Adjusted EBITDA (a non-GAAP measure defined below) was $38.7 million.
-
Closed the sale of the Physician Segment for $123.0 million ($25.7
million gain, net of tax). Operating results of this segment are
included in Discontinued Operations for all periods presented.
-
Repurchased 43,000 shares of Common Stock at average price per share
of $38.26. (Total share repurchases since June 30, 2014 were 3.4
million at an average price of $29.89.)
-
Leverage ratio (total indebtedness to trailing 12 months Adjusted
EBITDA) was 1.77 to 1 at March 31, 2015, down from 2.06 to 1 at
December 31, 2014.
Commenting on the results, Peter Dameris, President and Chief Executive
Officer of On Assignment, Inc., said, "Despite lower than estimated
revenues, our Adjusted Earnings and Adjusted EBITDA were within our
financial estimates for the quarter. Our revenues for the quarter were
adversely effected more than expected by the inclement weather in March
and the further strengthening of the US dollar relative to the Euro,
which combined caused an unfavorable revenue variance of approximately
$3.0 million. Our Oxford Segment for the quarter grew 10.4 percent on a
constant currency basis, its highest quarterly growth rate since 2013.
Our Apex Segment, grew 5.7 percent, and continues to be hampered by
spending at certain of its large financial services and government
customers.
During the quarter, we believe we made important progress in expanding
our internal staff of sales consultants and recruiters and positioning
ourselves to continue our growth through strategic acquisitions. The
average number of sales consultants and recruiters during the quarter
was 1,887, which is up 14.6 percent year-over-year. We expect to see
higher revenues from this investment beginning in the third quarter as
the typical ramp up time for new staff is 9 to 12 months."
First Quarter 2015 Financial Results
Revenues for the quarter were $430.0 million, up 5.7 percent
year-over-year (6.7 percent on a constant currency basis). Revenues for
the quarter were adversely affected $4.5 to $5.5 million from inclement
weather. Foreign currency exchange adversely affected revenues $4.0
million year-over-year.
Our largest segment, Apex, which accounts for approximately 68.4 percent
of total revenues, grew 5.7 percent year-over-year and our second
largest segment, Oxford, which accounts for approximately 29.6 percent
of total revenues, grew 8.5 percent year-over-year (10.4 percent on a
constant currency basis).
Gross profit was $135.9 million, up 6.0 percent year-over-year. This
improvement was primarily due to growth in revenues and expansion in
gross margin. Gross margin for the quarter was 31.6 percent, up from
31.5 percent in the first quarter of 2014. The year-over-year expansion
in gross margin related to the higher mix of direct hire and conversion
revenues, which were 5.6 percent of total revenues, up from 4.7 percent
in the first quarter of 2014.
Selling, general and administrative (“SG&A”) expenses were $105.9
million (24.6 percent of revenues), up from $96.1 million (23.6 percent
of revenues) in the first quarter of 2014. SG&A expenses for the quarter
included acquisition, integration and strategic planning expenses of
$1.3 million and approximately $2.0 million related to our accelerated
hiring of sales consultants and recruiters.
Amortization of intangible assets was $4.9 million, compared with $5.5
million in the first quarter of 2014.
Interest expense for the quarter was $3.1 million compared with $3.3
million in the first quarter of 2014. Interest expense for the quarter
was comprised of interest on the credit facility of $2.7 million and
amortization of capitalized loan costs of $0.4 million. The leverage
ratio (total indebtedness to trailing 12 months Adjusted EBITDA) at
March 31, 2015 was 1.77 to 1, down from 2.06 to 1 at December 31, 2014.
The effective income tax rate for the quarter was 40.8 percent, a slight
decrease from the 41.2 percent for the full year 2014.
Adjusted EBITDA (earnings before interest, taxes, depreciation, and
amortization of intangible assets plus equity-based compensation
expense, impairment charges, acquisition, integration and strategic
planning expenses), was $38.7 million, up from $38.2 million in the
first quarter of 2014.
Adjusted income from continuing operations was $21.6 million ($0.41 per
diluted share). Income from continuing operations (which includes
acquisition, integration and strategic planning expenses of $1.3
million, or $0.8 million net of tax) was $13.0 million ($0.25 per
diluted share) compared with $13.6 million ($0.25 per diluted share) in
the first quarter of 2014.
Net income was $39.1 million ($0.75 per diluted share) compared with
$13.9 million ($0.25 per diluted share) in the first quarter of 2014.
Net income included income from discontinued operations of $26.1 million
($0.50 per diluted share), mainly related to the gain on the sale of the
Physician Segment.
Sale of Physician Segment
On February 1, 2015 the Company completed the sale of its Physician
Segment for $123.0 million and recognized a gain of $25.7 million, net
of tax. After tax proceeds from the sale were approximately $108 million.
Share Repurchase Program
During the quarter, the Company repurchased 43,000 shares of its common
stock. Since June 30, 2014, the Company has repurchased approximately
3.4 million shares at an average price per share of $29.89. The amount
remaining under the current board-approved share repurchase program is
approximately $98.4 million.
Financial Estimates for Q2 2015
On Assignment is providing financial estimates for continuing operations
for the second quarter of 2015. These estimates do not include
acquisition, integration, or strategic planning expenses and assume no
deterioration in the staffing markets that On Assignment serves. These
estimates also assume no further deterioration in foreign exchange rates.
-
Revenues of $454.0 million to $459.0 million
-
Gross margin of 32.5 percent to 33.0 percent
-
SG&A expense (excludes amortization of intangible assets) of $107.0 to
$108.0 million (includes $3.7 million in depreciation and $5.0 million
in equity-based compensation expense)
-
Amortization of intangible assets of $5.1 million
-
Adjusted EBITDA of $49.0 million to $52.0 million
-
Effective tax rate of 40.0 percent
-
Adjusted income from continuing operations of $27.5 million to $29.3
million
-
Adjusted income from continuing operations per diluted share of $0.53
to $0.56
-
Income from continuing operations of $19.5 million to $21.3 million
-
Income from continuing operations per diluted share of $0.37 to $0.41
-
Diluted shares outstanding of 52.1 million
The above estimates assume billable days of 63.5 for the quarter, which
are 1.5 days more than the preceding quarter and 0.3 fewer days than the
second quarter of 2014. The estimates also assume a foreign currency
exchange rate of 1.08 (US dollar to the Euro).
The mid-point of the revenue range above implies year-over-year growth
of 5.1 percent (6.4 percent on a constant currency basis). The revenue
estimates assume mid-single digit growth for Apex, mid-to-high
single-digit growth at Oxford and a year-over-year decline for Life
Sciences Europe on a constant currency basis.
Conference Call
On Assignment will hold a conference call today at 4:30 p.m. EDT to
review its first quarter financial results. The dial-in number is
800-230-1059 (+1-612-234-9959 for callers outside the United States) and
the conference ID number is 357396. Participants should dial in ten
minutes before the call.
A replay of the conference call will be available beginning today at
6:30 p.m. EDT and ending at 11:59 p.m. EDT on May 13, 2015. The access
number for the replay is 800-475-6701 (+1-320-365-3844 for callers
outside the United States) and the conference ID number is 357396.
This call is being webcast by Thomson/CCBN and can be accessed via On
Assignment's web site at www.onassignment.com.
Individual investors can also listen at Thomson/CCBN's site at www.fulldisclosure.com
or by visiting any of the investor sites in Thomson/CCBN's Individual
Investor Network.
About On Assignment
On Assignment, Inc. is a leading global provider of in-demand, skilled
professionals in the growing life sciences, engineering and technology
sectors, where quality people are the key to success. The Company goes
beyond matching résumés with job descriptions to match people they know
into positions they understand for temporary, contract-to-hire, and
direct hire assignments. Clients recognize On Assignment for its quality
candidates, quick response, and successful assignments. Professionals
think of On Assignment as career-building partners with the depth and
breadth of experience to help them reach their goals.
On Assignment, which is based in Calabasas, California, was founded in
1985 and went public in 1992. The Company has a network of branch
offices throughout the United States, Canada, United Kingdom,
Netherlands, Ireland, Belgium, Spain, and Switzerland. To learn more,
visit http://www.onassignment.com.
Reasons for Presentation of Non-GAAP Financial Measures
Statements in this release and the accompanying Supplemental Financial
Information include non-GAAP financial measures. Such information is
provided as additional information, not as an alternative to our
consolidated financial statements presented in accordance with Generally
Accepted Accounting Principles in the US ("GAAP"), and is intended to
enhance an overall understanding of our current financial performance.
The Supplemental Financial Information sets forth financial measures
reviewed by our management to evaluate our operating performance. Such
measures also are used to determine a portion of the compensation for
some of our executives and employees. We believe the non-GAAP financial
measures provide useful information to management, investors and
prospective investors by excluding certain charges and other amounts
that we believe are not indicative of our core operating results. These
non-GAAP measures are included to provide management, our investors and
prospective investors with an alternative method for assessing our
operating results in a manner that is focused on the performance of our
ongoing operations and to provide a more consistent basis for comparison
between quarters. One of the non-GAAP financial measures presented is
EBITDA (earnings before interest, taxes, depreciation, and amortization
of intangible assets), other terms include Adjusted EBITDA (EBITDA plus
equity-based compensation expense, impairment charges, write-off of loan
costs, and acquisition, integration and strategic planning expenses) and
Non-GAAP income from continuing operations (Income from continuing
operations, plus write-off of loan costs, and acquisition, integration
and strategic planning expenses, net of tax) and Adjusted income from
continuing operations and related per share amounts. These terms might
not be calculated in the same manner as, and thus might not be
comparable to, similarly titled measures reported by other companies.
The financial statement tables that accompany this press release include
a reconciliation of each non-GAAP financial measure to the most directly
comparable GAAP financial measure.
Safe Harbor
Certain statements made in this news release are “forward-looking
statements” within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended, and involve a high degree of risk and
uncertainty. Forward-looking statements include statements regarding the
Company's anticipated financial and operating performance in 2015. All
statements in this release, other than those setting forth strictly
historical information, are forward-looking statements. Forward-looking
statements are not guarantees of future performance, and actual results
might differ materially. In particular, the Company makes no assurances
that the estimates of revenues, gross margin, SG&A, Adjusted EBITDA,
income from continuing operations, adjusted income from continuing
operations, earnings per share or earnings per diluted share set forth
above will be achieved. Factors that could cause or contribute to such
differences include actual demand for our services, our ability to
attract, train and retain qualified staffing consultants, our ability to
remain competitive in obtaining and retaining temporary staffing
clients, the availability of qualified temporary professionals,
management of our growth, continued performance of our enterprise-wide
information systems, our ability to manage our potential or actual
litigation matters, the successful integration of our recently acquired
subsidiaries, the successful implementation of our five-year strategic
plan, and other risks detailed from time to time in our reports filed
with the Securities and Exchange Commission ("SEC"), including our
Annual Report on Form 10-K for the year ended December 31, 2014, as
filed with the SEC on March 2, 2015. We specifically disclaim any
intention or duty to update any forward-looking statements contained in
this news release.
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
December 31,
|
|
|
2015
|
|
2014 (1)(2)
|
|
2014 (1)
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
430,045
|
|
|
$
|
406,851
|
|
|
$
|
441,023
|
|
Cost of services
|
|
294,170
|
|
|
278,696
|
|
|
298,486
|
|
Gross profit
|
|
135,875
|
|
|
128,155
|
|
|
142,537
|
|
Selling, general and administrative expenses
|
|
105,935
|
|
|
96,109
|
|
|
101,192
|
|
Amortization of intangible assets
|
|
4,869
|
|
|
5,538
|
|
|
5,538
|
|
Operating income
|
|
25,071
|
|
|
26,508
|
|
|
35,807
|
|
Interest expense, net
|
|
(3,067
|
)
|
|
(3,328
|
)
|
|
|
(3,198
|
)
|
|
Income before income taxes
|
|
22,004
|
|
|
23,180
|
|
|
32,609
|
|
Provision for income taxes
|
|
8,981
|
|
|
9,575
|
|
|
13,083
|
|
Income from continuing operations
|
|
13,023
|
|
|
13,605
|
|
|
19,526
|
|
Gain on sale of discontinued operations, net of tax
|
|
25,703
|
|
|
—
|
|
|
—
|
|
Income from discontinued operations, net of tax
|
|
409
|
|
|
312
|
|
|
947
|
|
Net income
|
|
$
|
39,135
|
|
|
$
|
13,917
|
|
|
$
|
20,473
|
|
|
|
|
|
|
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.38
|
|
Income from discontinued operations
|
|
0.51
|
|
|
0.01
|
|
|
0.01
|
|
|
|
$
|
0.76
|
|
|
$
|
0.26
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.25
|
|
|
$
|
0.25
|
|
|
$
|
0.37
|
|
Income from discontinued operations
|
|
0.50
|
|
|
—
|
|
|
0.02
|
|
|
|
$
|
0.75
|
|
|
$
|
0.25
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
Number of shares and share equivalents used to calculate earnings
per share:
|
|
|
|
|
|
|
Basic
|
|
51,519
|
|
|
54,104
|
|
|
51,900
|
|
Diluted
|
|
52,209
|
|
|
54,975
|
|
|
52,679
|
|
______
(1) Amounts have been restated to give retroactive effect to the
sale of our Physician Segment on February 1, 2015. The results of this
segment are included in discontinued operations for all periods
presented. Accordingly, the results shown above differ from the results
in our previous filings with the Securities and Exchange Commission.
(2) Amounts have been restated to give retroactive effect to the
closure of the European retained search unit in the fourth quarter of
2014. The results of this unit are included in discontinued operations
for all periods presented. Accordingly, the results shown above differ
from the results in our previous filings with the Securities and
Exchange Commission.
SUPPLEMENTAL SEGMENT FINANCIAL INFORMATION(1)
(Unaudited)
(In thousands)
|
|
|
|
Three Months Ended
|
March 31,
|
|
December 31,
|
|
2015
|
|
2014 (1)(2)
|
|
2014 (1)
|
Revenues:
|
|
|
|
|
|
Apex
|
$
|
294,293
|
|
|
$
|
278,408
|
|
|
$
|
307,724
|
|
Oxford
|
127,471
|
|
|
117,500
|
|
|
123,872
|
|
Life Sciences Europe
|
8,281
|
|
|
10,943
|
|
|
9,427
|
|
|
$
|
430,045
|
|
|
$
|
406,851
|
|
|
$
|
441,023
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
Apex
|
$
|
79,643
|
|
|
$
|
75,506
|
|
|
$
|
87,816
|
|
Oxford
|
53,524
|
|
|
49,026
|
|
|
51,703
|
|
Life Sciences Europe
|
2,708
|
|
|
3,623
|
|
|
3,018
|
|
|
$
|
135,875
|
|
|
$
|
128,155
|
|
|
$
|
142,537
|
|
______
(1) Amounts have been restated to give retroactive effect to the
sale of our Physician Segment on February 1, 2015. The results of this
segment are included in discontinued operations for all periods
presented. Accordingly, the results shown above differ from the results
in our previous filings with the Securities and Exchange Commission.
(2) Amounts have been restated to give retroactive effect to the
closure of the European retained search unit in the fourth quarter of
2014. The results of this unit are included in discontinued operations
for all periods presented. Accordingly, the results shown above differ
from the results in our previous filings with the Securities and
Exchange Commission.
SELECTED CASH FLOW INFORMATION (Unaudited)
(In thousands)
|
|
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
December 31,
|
|
|
2015 (1)
|
|
2014
|
|
2014
|
Cash provided by (used in) operations
|
|
$
|
19,943
|
|
|
$
|
(4,321
|
)
|
|
$
|
28,064
|
Capital expenditures
|
|
$
|
8,000
|
|
|
$
|
4,020
|
|
|
$
|
5,469
|
|
|
|
|
|
|
|
|
|
|
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA (Unaudited)
(In thousands)
|
|
|
|
|
|
March 31,
|
|
December 31,
|
|
2015
|
|
2014 (2)
|
Cash and cash equivalents
|
$
|
76,363
|
|
|
$
|
28,860
|
|
Accounts receivable, net
|
287,759
|
|
|
277,146
|
|
Goodwill and intangible assets, net
|
755,574
|
|
|
762,669
|
|
Total assets of discontinued operations
|
—
|
|
|
108,026
|
|
Total assets
|
1,217,638
|
|
|
1,274,174
|
|
Current portion of long-term debt
|
18,250
|
|
|
18,250
|
|
Total current liabilities
|
154,691
|
|
|
165,566
|
|
Working capital
|
255,080
|
|
|
220,338
|
|
Long-term debt
|
316,313
|
|
|
396,875
|
|
Other long-term liabilities
|
71,806
|
|
|
71,758
|
|
Total liabilities of discontinued operations
|
—
|
|
|
25,762
|
|
Stockholders’ equity
|
674,828
|
|
|
634,408
|
|
____
(1) Amounts include cash flows from our Physician Segment. This
segment generated a negative $1.8 million of cash flows from operations
and its capital expenditures were negligible during the first quarter of
2015.
(2) Balances have been restated to present assets and liabilities
of the Physician Segment in discontinued operations.
RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS AND
EARNINGS PER DILUTED SHARE TO NON-GAAP ADJUSTED EBITDA AND
ADJUSTED EBITDA
PER DILUTED SHARE (Unaudited)
(In thousands, except per share amounts)
|
|
|
|
Three Months Ended
|
March 31,
|
|
December 31,
|
|
2015
|
|
2014 (1)(2)
|
|
2014 (1)
|
Net income
|
$
|
39,135
|
|
|
$
|
0.75
|
|
|
$
|
13,917
|
|
|
$
|
0.25
|
|
|
$
|
20,473
|
|
|
$
|
0.39
|
Income from discontinued operations, net of tax
|
26,112
|
|
|
0.50
|
|
|
312
|
|
|
—
|
|
|
947
|
|
|
0.02
|
Income from continuing operations
|
13,023
|
|
|
0.25
|
|
|
13,605
|
|
|
0.25
|
|
|
19,526
|
|
|
0.37
|
Interest expense, net
|
3,067
|
|
|
0.06
|
|
|
3,328
|
|
|
0.06
|
|
|
3,198
|
|
|
0.06
|
Provision for income taxes
|
8,981
|
|
|
0.17
|
|
|
9,575
|
|
|
0.17
|
|
|
13,083
|
|
|
0.25
|
Depreciation
|
3,532
|
|
|
0.07
|
|
|
2,522
|
|
|
0.05
|
|
|
3,379
|
|
|
0.06
|
Amortization of intangible assets
|
4,869
|
|
|
0.09
|
|
|
5,538
|
|
|
0.10
|
|
|
5,538
|
|
|
0.11
|
EBITDA
|
33,472
|
|
|
0.64
|
|
|
34,568
|
|
|
0.63
|
|
|
44,724
|
|
|
0.85
|
Equity-based compensation
|
3,954
|
|
|
0.08
|
|
|
3,082
|
|
|
0.06
|
|
|
4,157
|
|
|
0.08
|
Acquisition, integration and strategic planning expenses
|
1,278
|
|
|
0.02
|
|
|
588
|
|
|
0.01
|
|
|
1,762
|
|
|
0.03
|
Adjusted EBITDA
|
$
|
38,704
|
|
|
$
|
0.74
|
|
|
$
|
38,238
|
|
|
$
|
0.70
|
|
|
$
|
50,643
|
|
|
$
|
0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
52,209
|
|
|
|
|
54,975
|
|
|
|
|
52,679
|
|
|
|
______
(1) Amounts have been restated to give retroactive effect to the
sale of our Physician Segment on February 1, 2015. The results of this
segment are included in discontinued operations for all periods
presented. Accordingly, the results shown above differ from the results
in our previous filings with the Securities and Exchange Commission.
(2) Amounts have been restated to give retroactive effect to the
closure of the European retained search unit in the fourth quarter of
2014. The results of this unit are included in discontinued operations
for all periods presented. Accordingly, the results shown above differ
from the results in our previous filings with the Securities and
Exchange Commission.
RECONCILIATION OF GAAP INCOME AND DILUTED EPS TO NON-GAAP
INCOME AND
DILUTED EPS (Unaudited)
(In thousands, except per share amounts)
|
|
|
|
Three Months Ended
|
March 31,
|
|
December 31,
|
|
2015
|
|
2014 (1)(2)
|
|
2014 (1)
|
Net income
|
$
|
39,135
|
|
|
$
|
0.75
|
|
|
$
|
13,917
|
|
|
$
|
0.25
|
|
|
$
|
20,473
|
|
|
$
|
0.39
|
|
Income from discontinued operations, net of tax
|
26,112
|
|
|
0.50
|
|
|
312
|
|
|
—
|
|
|
947
|
|
|
0.02
|
|
Income from continuing operations
|
13,023
|
|
|
0.25
|
|
|
13,605
|
|
|
0.25
|
|
|
19,526
|
|
|
0.37
|
|
Acquisition, integration and strategic planning expenses, net of tax
|
780
|
|
|
0.01
|
|
|
359
|
|
|
—
|
|
|
1,075
|
|
|
0.02
|
|
Non-GAAP income from continuing operations
|
$
|
13,803
|
|
|
$
|
0.26
|
|
|
$
|
13,964
|
|
|
$
|
0.25
|
|
|
$
|
20,601
|
|
|
$
|
0.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
52,209
|
|
|
|
|
54,975
|
|
|
|
|
52,679
|
|
|
|
_____
(1) Amounts have been restated to give retroactive effect to the
sale of our Physician Segment on February 1, 2015. The results of this
segment are included in discontinued operations for all periods
presented. Accordingly, the results shown above differ from the results
in our previous filings with the Securities and Exchange Commission.
(2) Amounts have been restated to give retroactive effect to the
closure of the European retained search unit in the fourth quarter of
2014. The results of this unit are included in discontinued operations
for all periods presented. Accordingly, the results shown above differ
from the results in our previous filings with the Securities and
Exchange Commission.
CALCULATION OF ADJUSTED EARNINGS PER DILUTED SHARE (Unaudited)
(In thousands, except per share amounts)
|
|
|
|
Three Months Ended
|
|
March 31,
|
|
2015
|
|
2014 (6)
|
Non-GAAP income from continuing operations (1)
|
$
|
13,803
|
|
|
$
|
13,964
|
|
Adjustments:
|
|
|
|
Amortization of intangible assets (2)
|
4,869
|
|
|
5,538
|
|
Cash tax savings on indefinite-lived intangible assets (3)
|
3,882
|
|
|
3,807
|
|
Excess of capital expenditures over depreciation, net of tax (4)
|
(470
|
)
|
|
(1,025
|
)
|
|
Income taxes on amortization for financial reporting purposes not
deductible for income tax purposes (5)
|
(505
|
)
|
|
(531
|
)
|
|
Adjusted income from continuing operations
|
$
|
21,579
|
|
|
$
|
21,753
|
|
|
|
|
|
Adjusted income from continuing operations per diluted share
|
$
|
0.41
|
|
|
$
|
0.40
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
52,209
|
|
|
54,975
|
|
______
(1) Non-GAAP income from continuing operations as calculated
on preceding page. Non-GAAP income from continuing operations
excludes acquisition, integration and strategic planning expenses.
(2) Amortization of intangible assets of acquired businesses.
(3) Income tax benefit (using 39 percent marginal tax rate)
from amortization for income tax purposes of certain indefinite-lived
intangible assets (goodwill and trademarks), on acquisitions in which
the Company received a step-up tax basis. For income tax
purposes, these assets are amortized on a straight-line basis over 15
years. For financial reporting purposes, these assets are not
amortized and a deferred tax provision is recorded that fully offsets
the cash tax benefit in the determination of net income.
(4) Excess capital expenditures over depreciation is equal to
one-quarter of the estimated full year difference between capital
expenditures less depreciation, tax affected using an estimated marginal
combined federal and state tax rate of 39 percent.
(5) Income taxes (assuming a 39 percent marginal rate) on the
portion of amortization of intangible assets, which is not deductible
for income tax purposes (mainly amortization associated with the
acquisition of CyberCoders, Inc. that the Company was not able to
step-up the tax basis in those acquired assets for tax purposes).
(6) Amounts have been restated to exclude results of the
Physician Segment from continuing operations. The Physician
Segment was sold on February 1, 2015 and its results are now included in
discontinued operations.
RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO
NON-GAAP ADJUSTED INCOME FROM CONTINUING OPERATIONS FOR EACH OF
THE THREE-MONTH PERIODS IN THE YEAR ENDED DECEMBER 31, 2014 AND
THE YEAR ENDED DECEMBER 31, 2014 (1)
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
Year Ended
Dec. 31
|
|
Mar. 31
|
|
June 30
|
|
Sept. 30
|
|
Dec. 31
|
|
Income from continuing operations
|
$
|
13,605
|
|
|
$
|
19,641
|
|
|
$
|
20,723
|
|
|
$
|
19,526
|
|
|
$
|
73,495
|
|
Acquisition, integration and strategic planning expenses, net of tax
|
359
|
|
|
1,204
|
|
|
573
|
|
|
1,075
|
|
|
3,211
|
|
Non-GAAP income from continuing operations
|
13,964
|
|
|
20,845
|
|
|
21,296
|
|
|
20,601
|
|
|
76,706
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments to calculate adjusted income from continuing operations (2):
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
5,538
|
|
|
5,522
|
|
|
5,532
|
|
|
5,538
|
|
|
22,130
|
|
Cash tax savings on indefinite-lived intangible assets
|
3,807
|
|
|
3,807
|
|
|
3,808
|
|
|
3,808
|
|
|
15,230
|
|
Excess of capital expenditures over depreciation, net of tax
|
(1,025
|
)
|
|
(1,025
|
)
|
|
(1,025
|
)
|
|
(1,025
|
)
|
|
(4,100
|
)
|
Income taxes on amortization for financial reporting purposes not
deductible for income tax purposes
|
(531
|
)
|
|
(531
|
)
|
|
(531
|
)
|
|
(532
|
)
|
|
(2,125
|
)
|
Adjusted income from continuing operations
|
$
|
21,753
|
|
|
$
|
28,618
|
|
|
$
|
29,080
|
|
|
$
|
28,390
|
|
|
$
|
107,841
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income from continuing operations per diluted share
|
$
|
0.40
|
|
|
$
|
0.52
|
|
|
$
|
0.54
|
|
|
$
|
0.54
|
|
|
$
|
1.99
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
54,975
|
|
|
55,173
|
|
|
54,129
|
|
|
52,679
|
|
|
54,294
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
$
|
38,238
|
|
|
$
|
51,239
|
|
|
$
|
52,944
|
|
|
$
|
50,643
|
|
|
$
|
193,064
|
|
______
(1) This table has been restated to exclude results of the
Physician Segment from continuing operations. The Physician Segment was
sold on February 1, 2015 and its results are now included in
discontinued operations.
(2) Descriptions of these adjustments are set forth on the
preceding page.
SUPPLEMENTAL FINANCIAL AND OPERATING DATA (Unaudited)
|
|
|
|
|
|
|
|
|
|
Apex
|
|
Oxford
|
|
Life Sciences Europe (1)
|
|
Consolidated (1)
|
Revenues (in thousands):
|
|
|
|
|
|
|
|
Q1 2015
|
$
|
294,293
|
|
|
$
|
127,471
|
|
|
$
|
8,281
|
|
|
$
|
430,045
|
|
Q4 2014
|
$
|
307,724
|
|
|
$
|
123,872
|
|
|
$
|
9,427
|
|
|
$
|
441,023
|
|
% Sequential change
|
(4.4
|
)%
|
|
2.9
|
%
|
|
(12.2
|
)%
|
|
(2.5
|
)%
|
Q1 2014
|
$
|
278,408
|
|
|
$
|
117,500
|
|
|
$
|
10,943
|
|
|
$
|
406,851
|
|
% Year-over-year change
|
5.7
|
%
|
|
8.5
|
%
|
|
(24.3
|
)%
|
|
5.7
|
%
|
|
|
|
|
|
|
|
|
Direct hire and conversion revenues (in thousands):
|
|
|
|
|
|
|
|
Q1 2015
|
$
|
4,079
|
|
|
$
|
19,628
|
|
|
$
|
197
|
|
|
$
|
23,904
|
|
Q4 2014
|
$
|
4,146
|
|
|
$
|
15,782
|
|
|
$
|
226
|
|
|
$
|
20,154
|
|
Q1 2014
|
$
|
3,682
|
|
|
$
|
15,027
|
|
|
$
|
285
|
|
|
$
|
18,994
|
|
|
|
|
|
|
|
|
|
Gross margins:
|
|
|
|
|
|
|
|
Q1 2015
|
27.1
|
%
|
|
42.0
|
%
|
|
32.7
|
%
|
|
31.6
|
%
|
Q4 2014
|
28.5
|
%
|
|
41.7
|
%
|
|
32.0
|
%
|
|
32.3
|
%
|
Q1 2014
|
27.1
|
%
|
|
41.7
|
%
|
|
33.1
|
%
|
|
31.5
|
%
|
|
|
|
|
|
|
|
|
Average number of staffing consultants:
|
|
|
|
|
|
|
|
Q1 2015
|
965
|
|
|
886
|
|
|
36
|
|
|
1,887
|
|
Q4 2014
|
942
|
|
|
836
|
|
|
33
|
|
|
1,811
|
|
Q1 2014
|
818
|
|
|
796
|
|
|
32
|
|
|
1,646
|
|
|
|
|
|
|
|
|
|
Average number of customers:
|
|
|
|
|
|
|
|
Q1 2015
|
1,293
|
|
|
886
|
|
|
141
|
|
|
2,320
|
|
Q4 2014
|
1,276
|
|
|
897
|
|
|
153
|
|
|
2,326
|
|
Q1 2014
|
1,375
|
|
|
849
|
|
|
136
|
|
|
2,360
|
|
|
|
|
|
|
|
|
|
Top 10 customers as a percentage of revenue:
|
|
|
|
|
|
|
|
Q1 2015
|
27.0
|
%
|
|
11.6
|
%
|
|
55.9
|
%
|
|
18.5
|
%
|
Q4 2014
|
29.1
|
%
|
|
12.9
|
%
|
|
55.4
|
%
|
|
20.3
|
%
|
Q1 2014
|
30.6
|
%
|
|
13.8
|
%
|
|
59.3
|
%
|
|
20.9
|
%
|
|
|
|
|
|
|
|
|
Average bill rate:
|
|
|
|
|
|
|
|
Q1 2015
|
$
|
54.02
|
|
|
$
|
113.02
|
|
|
$
|
47.68
|
|
|
$
|
62.06
|
|
Q4 2014
|
$
|
54.59
|
|
|
$
|
114.35
|
|
|
$
|
51.01
|
|
|
$
|
65.01
|
|
Q1 2014
|
$
|
53.89
|
|
|
$
|
110.55
|
|
|
$
|
53.66
|
|
|
$
|
61.93
|
|
|
|
|
|
|
|
|
|
Gross profit per staffing consultant:
|
|
|
|
|
|
|
|
Q1 2015
|
$
|
83,000
|
|
|
$
|
60,000
|
|
|
$
|
75,000
|
|
|
$
|
72,000
|
|
Q4 2014
|
$
|
93,000
|
|
|
$
|
62,000
|
|
|
$
|
91,000
|
|
|
$
|
79,000
|
|
Q1 2014
|
$
|
92,000
|
|
|
$
|
62,000
|
|
|
$
|
113,000
|
|
|
$
|
78,000
|
|
_______
(1) Amounts have been restated to exclude discontinued operations.
SUPPLEMENTAL FINANCIAL INFORMATION – KEY METRICS (Unaudited)
|
|
|
|
Three Months Ended
|
March 31, 2015
|
|
December 31, 2014 (1)
|
Percentage of revenues:
|
|
|
|
Top ten clients
|
18.5
|
%
|
|
20.3
|
%
|
Direct hire/conversion
|
5.6
|
%
|
|
4.6
|
%
|
|
|
|
|
Bill rate:
|
|
|
|
% Sequential change
|
(4.5
|
%)
|
|
3.9
|
%
|
% Year-over-year change
|
0.2
|
%
|
|
1.4
|
%
|
|
|
|
|
Bill/Pay spread:
|
|
|
|
% Sequential change
|
(5.2
|
%)
|
|
2.6
|
%
|
% Year-over-year change
|
(2.2
|
%)
|
|
(0.1
|
%)
|
|
|
|
|
Average headcount:
|
|
|
|
Contract professionals (CP)
|
12,318
|
|
|
12,164
|
|
Staffing consultants (SC)
|
1,887
|
|
|
1,811
|
|
_____
(1) Amounts have been restated to exclude results of the
Physician Segment from continuing operations. The Physician Segment was
sold on February 1, 2015 and its results are now included in
discontinued operations.
Contact:
On Assignment, Inc.
Ed Pierce
Chief Financial Officer
(818) 878-7900