Revenues & Adjusted EBITDA above Previously Announced Estimates
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 June 30, 2015.
Second Quarter Highlights
-
Effective June 5, 2015, acquired Creative Circle, LLC ("Creative
Circle"), one of the largest digital/creative staffing firms in North
America, for $570 million in cash and stock, plus contingent
consideration of up to $30 million.
-
Revenues were $485.3 million; up 11.7 percent year-over-year (12.8
percent on a constant currency basis).
-
Revenues, excluding the contribution from acquisitions, were $463.5
million ($468.1 million on a constant currency basis), up 6.7 percent
(7.8 percent on a constant currency basis) and above the high-end of
our financial estimates.
-
Adjusted EBITDA (a non-GAAP measure defined below) was $56.0 million.
Adjusted EBITDA included $4.9 million from Creative Circle. Excluding
the contribution from Creative Circle, Adjusted EBITDA was $51.1
million and towards the high-end of our financial estimates.
-
Adjusted income from continuing operations (a non-GAAP measure defined
below) was $32.3 million ($0.61 per diluted share). Excluding the
contribution from Creative Circle, Adjusted income from continuing
operations was $28.8 million ($0.55 per share) and was towards the
high-end of our financial estimates.
-
In conjunction with the Creative Circle acquisition, entered into a
new $975 million credit facility, comprised of an $825 million
seven-year term loan and a $150 million revolving credit facility.
After the closing of Creative Circle, $875 million was outstanding
under the facility.
-
Leverage ratio (total indebtedness to trailing 12 months Adjusted
EBITDA) was 3.51 to 1 at June 30, 2015, up 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, "We are pleased with our strategic
and operational accomplishments during the quarter. The acquisition of
Creative Circle positions us well in the fast growing digital/creative
staffing space allowing us to engage the CMO along with the CIO to
provide solutions that meet the growing needs of both groups while
driving greater demand for our traditional services.
"Our financial performance for the quarter was enhanced by the
acquisition of Creative Circle, which was accretive on a GAAP and an
Adjusted Earnings basis. Excluding the contribution from Creative
Circle, our results (adjusted mainly for acquisition-related costs and
the write-off of loan costs associated with our old credit facility)
were at or above the high-end of our previously announced financial
estimates for the quarter. Our revenue growth rates were higher than
expected and reflected a slight re-acceleration in our growth rate for
the first time in four quarters. Our cash generation during the quarter
was strong and permitted us to pay down our indebtedness by $25 million
prior to the end of the quarter and we expect to voluntarily pay down an
additional $25 million by the end of July."
Second Quarter 2015 Financial Results
Revenues for the quarter were $485.3 million ($489.9 million on a
constant currency basis), up 11.7 percent (12.8 percent on a constant
currency basis) year-over-year. Constant currency revenues and growth
rates for the quarter were calculated using the foreign currency
exchange rates from the same period in the prior year.
Revenues included $21.8 million from two businesses acquired during the
quarter (Creative Circle and a small Life Sciences business in Europe),
which are included in consolidated results from the date of acquisition.
The revenue contribution from Creative Circle was $19.6 million, and the
contribution from the Life Sciences business was $2.2 million. Revenues,
excluding the contribution from acquisitions, were $463.5 million
($468.1 million on a constant currency basis), up 6.7 percent (7.8
percent on a constant currency basis) and above the high-end of our
financial estimates.
Operating results of Creative Circle are included in the Apex Segment.
The Life Sciences European business is now included in the Oxford
Segment for reporting purposes. The operating and statistical data for
the Oxford Segment have been adjusted to reflect this change in
reporting.
Direct hire and conversion revenues were $28.7 million, up 33.8 percent
year-over-year, which included $1.5 million from Creative Circle.
CyberCoders accounted for 72.6 percent of the total and was up 28.0
percent year-over-year. Direct hire and conversion revenues were 5.9
percent of total revenues for the quarter, up from 4.9 percent in the
second quarter of 2014.
Our largest segment, Apex, accounted for 69.8 percent of total revenues.
Apex grew 13.7 percent year-over-year, on a reported basis, which
included $19.6 million in revenues from Creative Circle. Excluding the
contribution from Creative Circle, Apex grew 7.1 percent year-over-year
for the quarter.
Our Oxford Segment accounted for 30.2 percent of total revenues. Oxford
grew 7.4 percent year-over-year on a reported basis, which included $2.2
million in revenues from an acquired business. On a constant currency
basis and excluding the contribution from the acquired Life Sciences
business, Oxford grew 9.1 percent year-over-year for the quarter.
Gross profit was $158.5 million, up $16.6 million or 11.7 percent
year-over-year. Gross margin for the quarter was 32.7 percent.
Selling, general and administrative (“SG&A”) expenses were $118.9
million (24.5 percent of revenues), up from $99.6 million (22.9 percent
of revenues) in the second quarter of 2014. SG&A expenses for the
quarter included SG&A from Creative Circle of $4.0 million, acquisition,
integration and strategic planning expenses of $6.9 million, and $0.5
million related to the write-off of an IT application. Excluding these
expenses, SG&A expense was approximately $107.5 million and within our
previously announced financial estimates.
Amortization of intangible assets was $7.0 million, compared with $5.5
million in the second quarter of 2014. The increase in amortization
mainly related to the acquisition of Creative Circle.
Interest expense for the quarter was $4.7 million compared with $3.1
million in the second quarter of 2014. Interest expense for the quarter
was comprised of interest on the credit facility of $4.2 million and
amortization of deferred loan costs of $0.5 million.
Write-off of loan costs totaled $3.8 million ($2.3 million, $0.04 per
diluted share, after tax) and related to the refinancing of the credit
facility in June.
The leverage ratio (total indebtedness to trailing 12 months Adjusted
EBITDA) at June 30, 2015 was 3.51 to 1, up from 2.06 to 1 at December
31, 2014. The increase in the leverage ratio related to borrowing to
fund the acquisition of Creative Circle.
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 (a non-GAAP measure defined below) was $56.0 million.
The Adjusted EBITDA contribution from Creative Circle was $4.9 million.
Excluding the contribution from Creative Circle, Adjusted EBITDA was
$51.1 million and towards the high-end of our previously announced
financial estimates.
Adjusted income from continuing operations (a non-GAAP measure as
calculated in an accompanying table) was $32.3 million ($0.61 per
diluted share). Net income on a GAAP basis was $14.3 million ($0.27 per
diluted share). Net income included acquisition, integration and
strategic planning expenses of $6.9 million ($4.6 million after tax, or
$0.09 per diluted share), $0.5 million related to the write-off of an IT
application ($0.3 million after tax or $0.01 per diluted share) and the
write-off of deferred loan costs of $3.8 million ($2.3 million after tax
or $0.04 per diluted share).
Creative Circle Acquisition
On June 5, 2015 the Company completed its acquisition of privately-held
Creative Circle, LLC for $570 million, and up to an additional $30
million based on operating performance during 2015. In connection with
the acquisition, the Company obtained a secured financing commitment for
$975 million from Wells Fargo Bank, National Association. The new credit
facility consists of a $150 million revolving credit facility and an
$825 million term loan. Proceeds from the facility were used to fund the
cash portion of the purchase price and refinance the Company's existing
debt.
Financial Estimates for Q3 2015
On Assignment is providing financial estimates for continuing operations
for the third 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. The
following estimates assume billable days of 63.5 for the quarter, which
is the same as the preceding quarter. These estimates also assume no
further deterioration in foreign exchange rates.
-
Revenues of $550.0 million to $555.0 million
-
Gross margin of 33.5 percent to 33.8 percent
-
SG&A expense (excludes amortization of intangible assets) of $124.8 to
$125.8 million (includes $4.3 million in depreciation and $5.5 million
in equity-based compensation expense)
-
Amortization of intangible assets of $11.4 million
-
Adjusted EBITDA of $69.0 million to $71.5 million
-
Effective tax rate of 40.9 percent
-
Adjusted income from continuing operations of $39.7 million to $41.2
million
-
Adjusted income from continuing operations per diluted share of $0.74
to $0.77
-
Income from continuing operations of $22.6 million to $24.1 million
-
Income from continuing operations per diluted share of $0.42 to $0.45
-
Diluted shares outstanding of 53.4 million
Conference Call
On Assignment will hold a conference call today at 4:30 p.m. EDT to
review its second quarter financial results. The dial-in number is
800-553-0318 (+1-612-332-0107 for callers outside the United States) and
the conference ID number is 364192. 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 August 13, 2015. The
access number for the replay is 800-475-6701 (+1-320-365-3844 outside
the United States) and the conference ID number is 364192.
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 technology, life sciences, and creative
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, and
Europe. 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 United States ("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, our Quarterly Report on Form 10-Q
for the quarter ended March 31, 2015 as filed with the SEC on May 8,
2015, and our Current Report on Form 8-K filed with the SEC on June 5,
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
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
|
2015
|
|
|
|
2014 (1)
|
|
|
|
2015
|
|
|
|
2015
|
|
|
|
2014 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
485,323
|
|
|
$
|
434,424
|
|
|
$
|
430,045
|
|
|
$
|
915,368
|
|
|
$
|
841,275
|
|
|
Cost of services
|
|
|
326,789
|
|
|
|
292,519
|
|
|
|
294,170
|
|
|
|
620,959
|
|
|
|
571,215
|
|
|
Gross profit
|
|
|
158,534
|
|
|
|
141,905
|
|
|
|
135,875
|
|
|
|
294,409
|
|
|
|
270,060
|
|
|
Selling, general and administrative expenses
|
|
|
118,867
|
|
|
|
99,614
|
|
|
|
105,935
|
|
|
|
224,802
|
|
|
|
195,723
|
|
|
Amortization of intangible assets
|
|
|
6,957
|
|
|
|
5,522
|
|
|
|
4,869
|
|
|
|
11,826
|
|
|
|
11,060
|
|
|
Operating income
|
|
|
32,710
|
|
|
|
36,769
|
|
|
|
25,071
|
|
|
|
57,781
|
|
|
|
63,277
|
|
|
Interest expense, net
|
|
|
(4,736
|
)
|
|
|
(3,103
|
)
|
|
|
(3,067
|
)
|
|
|
(7,803
|
)
|
|
|
(6,431
|
)
|
|
Write-off of loan costs
|
|
|
(3,751
|
)
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,751
|
)
|
|
|
—
|
|
|
Income before income taxes
|
|
|
24,223
|
|
|
|
33,666
|
|
|
|
22,004
|
|
|
|
46,227
|
|
|
|
56,846
|
|
|
Provision for income taxes
|
|
|
9,888
|
|
|
|
14,025
|
|
|
|
8,981
|
|
|
|
18,869
|
|
|
|
23,600
|
|
|
Income from continuing operations
|
|
|
14,335
|
|
|
|
19,641
|
|
|
|
13,023
|
|
|
|
27,358
|
|
|
|
33,246
|
|
|
Gain on sale of discontinued operations, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
25,703
|
|
|
|
25,703
|
|
|
|
—
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
(83
|
)
|
|
|
1,148
|
|
|
|
409
|
|
|
|
326
|
|
|
|
1,460
|
|
|
Net income
|
|
$
|
14,252
|
|
|
$
|
20,789
|
|
|
$
|
39,135
|
|
|
$
|
53,387
|
|
|
$
|
34,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.28
|
|
|
$
|
0.36
|
|
|
$
|
0.25
|
|
|
$
|
0.53
|
|
|
$
|
0.61
|
|
|
Income (loss) from discontinued operations
|
|
|
(0.01
|
)
|
|
|
0.02
|
|
|
|
0.51
|
|
|
|
0.50
|
|
|
|
0.03
|
|
|
|
|
$
|
0.27
|
|
|
$
|
0.38
|
|
|
$
|
0.76
|
|
|
$
|
1.03
|
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.27
|
|
|
$
|
0.36
|
|
|
$
|
0.25
|
|
|
$
|
0.52
|
|
|
$
|
0.60
|
|
|
Income from discontinued operations
|
|
|
—
|
|
|
|
0.02
|
|
|
|
0.50
|
|
|
|
0.50
|
|
|
|
0.03
|
|
|
|
|
$
|
0.27
|
|
|
$
|
0.38
|
|
|
$
|
0.75
|
|
|
$
|
1.02
|
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares and share equivalents used to calculate earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
51,978
|
|
|
|
54,372
|
|
|
|
51,519
|
|
|
|
51,749
|
|
|
|
54,239
|
|
|
Diluted
|
|
|
52,633
|
|
|
|
55,173
|
|
|
|
52,209
|
|
|
|
52,435
|
|
|
|
55,098
|
|
|
______
|
|
(1)
|
|
Amounts have been restated to give retroactive effect to the sale of
our Physician Segment on February 1, 2015, and the closure of our
European retained search unit in the fourth quarter of 2014. The
results of these businesses 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 ("SEC").
|
|
|
|
SUPPLEMENTAL SEGMENT FINANCIAL INFORMATION(1)
(Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
2015
|
|
2014 (2)
|
|
2015
|
|
2015
|
|
2014 (2)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
338,704
|
|
$
|
297,893
|
|
$
|
294,293
|
|
$
|
632,997
|
|
$
|
576,301
|
|
Oxford
|
|
|
146,619
|
|
|
136,531
|
|
|
135,752
|
|
|
282,371
|
|
|
264,974
|
|
|
|
$
|
485,323
|
|
$
|
434,424
|
|
$
|
430,045
|
|
$
|
915,368
|
|
$
|
841,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
97,652
|
|
$
|
84,677
|
|
$
|
79,643
|
|
$
|
177,295
|
|
$
|
160,183
|
|
Oxford
|
|
|
60,882
|
|
|
57,228
|
|
|
56,232
|
|
|
117,114
|
|
|
109,877
|
|
|
|
$
|
158,534
|
|
$
|
141,905
|
|
$
|
135,875
|
|
$
|
294,409
|
|
$
|
270,060
|
|
______
|
|
(1)
|
|
The segments reported above reflect our new segment configuration.
The Oxford segment now includes our former Life Sciences Europe
segment.
|
|
(2)
|
|
Amounts have been restated to give retroactive effect to the sale of
our Physician Segment on February 1, 2015, and the closure of our
European retained search unit in the fourth quarter of 2014. The
results of these businesses are included in discontinued operations
for all periods presented. Accordingly, the results shown above
differ from the results in our previous filings with the SEC.
|
|
|
|
SELECTED CASH FLOW INFORMATION (Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
June 30,
|
|
|
|
2015
|
|
2014
|
|
2015 (1)
|
|
2015 (1)
|
|
2014
|
|
Cash provided by operations
|
|
$
|
32,477
|
|
$
|
29,330
|
|
$
|
19,943
|
|
$
|
52,420
|
|
$
|
25,009
|
|
Capital expenditures
|
|
$
|
5,331
|
|
$
|
5,618
|
|
$
|
8,000
|
|
$
|
13,331
|
|
$
|
9,638
|
|
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA (Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2015
|
|
2015
|
|
Cash and cash equivalents
|
|
$
|
41,863
|
|
$
|
76,363
|
|
Accounts receivable, net
|
|
|
330,958
|
|
|
287,759
|
|
Goodwill and intangible assets, net
|
|
|
1,319,747
|
|
|
755,574
|
|
Total assets
|
|
|
1,797,134
|
|
|
1,214,229
|
|
Current portion of long-term debt (2)
|
|
|
—
|
|
|
17,353
|
|
Total current liabilities
|
|
|
171,147
|
|
|
153,794
|
|
Working capital
|
|
|
246,551
|
|
|
255,080
|
|
Long-term debt (2)
|
|
|
830,085
|
|
|
313,801
|
|
Other long-term liabilities
|
|
|
70,806
|
|
|
71,806
|
|
Stockholders’ equity
|
|
|
725,096
|
|
|
674,828
|
|
______
|
|
(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 three months
ended March 31, 2015. There were no cash flows from the Physician
Segment in the three months ended June 30, 2015.
|
|
|
|
|
|
(2)
|
|
March 31, 2015 balances have been adjusted to reflect unamortized
deferred loan costs attributable to term loans as a reduction of
the related debt balances. This change in presentation was the
result of early adopting Accounting Standard Update 2015-03 Imputation
of Interest (Subtopic 835-30) Simplifying the Presentation of Debt
Issuance Cost. The March 31, 2015 balances are net of $0.9
million unamortized deferred loan costs for the current portion of
debt, and $2.5 million unamortized deferred loan costs for the
long term portion. The June 30, 2015 balance is net of $19.9
million unamortized deferred loan costs.
|
|
|
|
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
|
|
|
June 30,
|
|
|
|
|
|
2015
|
|
2014 (1)
|
|
March 31, 2015
|
|
Net income
|
|
$
|
14,252
|
|
|
$
|
0.27
|
|
$
|
20,789
|
|
$
|
0.38
|
|
$
|
39,135
|
|
$
|
0.75
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
(83
|
)
|
|
|
—
|
|
|
1,148
|
|
|
0.02
|
|
|
26,112
|
|
|
0.50
|
|
Income from continuing operations
|
|
|
14,335
|
|
|
|
0.27
|
|
|
19,641
|
|
|
0.36
|
|
|
13,023
|
|
|
0.25
|
|
Interest expense, net
|
|
|
4,736
|
|
|
|
0.09
|
|
|
3,103
|
|
|
0.05
|
|
|
3,067
|
|
|
0.06
|
|
Write-off of loan costs
|
|
|
3,751
|
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Provision for income taxes
|
|
|
9,888
|
|
|
|
0.19
|
|
|
14,025
|
|
|
0.25
|
|
|
8,981
|
|
|
0.17
|
|
Depreciation
|
|
|
4,191
|
|
|
|
0.08
|
|
|
3,048
|
|
|
0.06
|
|
|
3,532
|
|
|
0.07
|
|
Amortization of intangible assets
|
|
|
6,957
|
|
|
|
0.13
|
|
|
5,522
|
|
|
0.10
|
|
|
4,869
|
|
|
0.09
|
|
EBITDA
|
|
|
43,858
|
|
|
|
0.83
|
|
|
45,339
|
|
|
0.82
|
|
|
33,472
|
|
|
0.64
|
|
Equity-based compensation
|
|
|
5,236
|
|
|
|
0.10
|
|
|
3,926
|
|
|
0.07
|
|
|
3,954
|
|
|
0.08
|
|
Acquisition, integration and strategic planning expenses
|
|
|
6,932
|
|
|
|
0.13
|
|
|
1,974
|
|
|
0.04
|
|
|
1,278
|
|
|
0.02
|
|
Adjusted EBITDA
|
|
$
|
56,026
|
|
|
$
|
1.06
|
|
$
|
51,239
|
|
$
|
0.93
|
|
$
|
38,704
|
|
$
|
0.74
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,633
|
|
|
|
|
|
55,173
|
|
|
|
|
52,209
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
2014 (1)
|
|
Net income
|
|
$
|
53,387
|
|
$
|
1.02
|
|
$
|
34,706
|
|
$
|
0.63
|
|
Income from discontinued operations, net of tax
|
|
|
26,029
|
|
|
0.50
|
|
|
1,460
|
|
|
0.03
|
|
Income from continuing operations
|
|
|
27,358
|
|
|
0.52
|
|
|
33,246
|
|
|
0.60
|
|
Interest expense, net
|
|
|
7,803
|
|
|
0.14
|
|
|
6,431
|
|
|
0.12
|
|
Write-off of loan costs
|
|
|
3,751
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
Provision for income taxes
|
|
|
18,869
|
|
|
0.36
|
|
|
23,600
|
|
|
0.43
|
|
Depreciation
|
|
|
7,723
|
|
|
0.15
|
|
|
5,570
|
|
|
0.10
|
|
Amortization of intangible assets
|
|
|
11,826
|
|
|
0.23
|
|
|
11,060
|
|
|
0.20
|
|
EBITDA
|
|
|
77,330
|
|
|
1.47
|
|
|
79,907
|
|
|
1.45
|
|
Equity-based compensation
|
|
|
9,190
|
|
|
0.18
|
|
|
7,008
|
|
|
0.12
|
|
Acquisition, integration and strategic planning expenses
|
|
|
8,210
|
|
|
0.16
|
|
|
2,562
|
|
|
0.05
|
|
Adjusted EBITDA
|
|
$
|
94,730
|
|
$
|
1.81
|
|
$
|
89,477
|
|
$
|
1.62
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,435
|
|
|
|
|
55,098
|
|
|
|
______
|
|
(1)
|
|
Amounts have been restated to give retroactive effect to the sale of
our Physician Segment on February 1, 2015, and the closure of our
European retained search unit in the fourth quarter of 2014. The
results of these businesses are included in discontinued operations
for all periods presented. Accordingly, the results shown above
differ from the results in our previous filings with the SEC.
|
|
|
|
RECONCILIATION OF GAAP INCOME AND DILUTED EPS TO NON-GAAP
INCOME AND DILUTED EPS (Unaudited)
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
|
June 30,
|
|
March 31,
|
|
|
|
2015
|
|
2014 (1)
|
|
2015
|
|
Net income
|
|
$
|
14,252
|
|
|
$
|
0.27
|
|
$
|
20,789
|
|
$
|
0.38
|
|
$
|
39,135
|
|
$
|
0.75
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
(83
|
)
|
|
|
—
|
|
|
1,148
|
|
|
0.02
|
|
|
26,112
|
|
|
0.50
|
|
Income from continuing operations
|
|
|
14,335
|
|
|
|
0.27
|
|
|
19,641
|
|
|
0.36
|
|
|
13,023
|
|
|
0.25
|
|
Write-off of loan costs, net of tax
|
|
|
2,288
|
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Acquisition, integration and strategic planning expenses, net of tax
|
|
|
4,578
|
|
|
|
0.09
|
|
|
1,204
|
|
|
0.02
|
|
|
780
|
|
|
0.01
|
|
Non-GAAP income from continuing operations
|
|
$
|
21,201
|
|
|
$
|
0.40
|
|
$
|
20,845
|
|
$
|
0.38
|
|
$
|
13,803
|
|
$
|
0.26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,633
|
|
|
|
|
|
55,173
|
|
|
|
|
52,209
|
|
|
|
|
|
|
|
Six Months Ended June 30,
|
|
|
|
2015
|
|
2014 (1)
|
|
Net income
|
|
$
|
53,387
|
|
$
|
1.02
|
|
$
|
34,706
|
|
$
|
0.63
|
|
Income from discontinued operations, net of tax
|
|
|
26,029
|
|
|
0.50
|
|
|
1,460
|
|
|
0.03
|
|
Income from continuing operations
|
|
|
27,358
|
|
|
0.52
|
|
|
33,246
|
|
|
0.60
|
|
Write-off of loan costs, net of tax
|
|
|
2,288
|
|
|
0.05
|
|
|
0
|
|
|
—
|
|
Acquisition, integration and strategic planning expenses, net of tax
|
|
|
5,358
|
|
|
0.10
|
|
|
1,563
|
|
|
0.03
|
|
Non-GAAP income from continuing operations
|
|
$
|
35,004
|
|
$
|
0.67
|
|
$
|
34,809
|
|
$
|
0.63
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,435
|
|
|
|
|
55,098
|
|
|
|
______
|
|
(1)
|
|
Amounts have been restated to give retroactive effect to the sale of
our Physician Segment on February 1, 2015, and the closure of our
European retained search unit in the fourth quarter of 2014. The
results of these businesses are included in discontinued operations
for all periods presented. Accordingly, the results shown above
differ from the results in our previous filings with the SEC.
|
|
|
|
CALCULATION OF ADJUSTED EARNINGS PER DILUTED SHARE (Unaudited)
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
|
|
2015
|
|
|
|
2014 (5)
|
|
|
|
2015
|
|
|
|
2014 (5)
|
|
|
Non-GAAP income from continuing operations (1)
|
|
$
|
21,201
|
|
|
$
|
20,845
|
|
|
$
|
35,004
|
|
|
$
|
34,809
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets (2)
|
|
|
6,957
|
|
|
|
5,522
|
|
|
|
11,826
|
|
|
|
11,060
|
|
|
Cash tax savings on indefinite-lived intangible assets (3)
|
|
|
4,791
|
|
|
|
3,807
|
|
|
|
8,673
|
|
|
|
7,614
|
|
|
Income taxes on amortization for financial reporting purposes not
deductible for income tax purposes (4)
|
|
|
(607
|
)
|
|
|
(531
|
)
|
|
|
(1,112
|
)
|
|
|
(1,062
|
)
|
|
Adjusted income from continuing operations
|
|
$
|
32,342
|
|
|
$
|
29,643
|
|
|
$
|
54,391
|
|
|
$
|
52,421
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income from continuing operations per diluted share
|
|
$
|
0.61
|
|
|
$
|
0.54
|
|
|
$
|
1.04
|
|
|
$
|
0.95
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,633
|
|
|
|
55,173
|
|
|
|
52,435
|
|
|
|
55,098
|
|
|
______
|
|
(1)
|
|
Non-GAAP income from continuing operations as calculated on
preceding page. Non-GAAP income from continuing operations
excludes the write-off of loan costs, and 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)
|
|
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).
|
|
(5)
|
|
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.
|
|
|
|
SUPPLEMENTAL FINANCIAL AND OPERATING DATA (1)
(Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
Mar. 31,
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
|
|
2015
|
|
2014 (2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
338,704
|
|
|
$
|
294,293
|
|
|
$
|
307,724
|
|
|
$
|
306,027
|
|
|
$
|
297,893
|
|
|
$
|
278,408
|
|
|
Oxford
|
|
|
146,619
|
|
|
|
135,752
|
|
|
|
133,299
|
|
|
|
136,416
|
|
|
|
136,531
|
|
|
|
128,443
|
|
|
Consolidated
|
|
$
|
485,323
|
|
|
$
|
430,045
|
|
|
$
|
441,023
|
|
|
$
|
442,443
|
|
|
$
|
434,424
|
|
|
$
|
406,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct hire and conversion revenues (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
6,285
|
|
|
$
|
4,079
|
|
|
$
|
4,146
|
|
|
$
|
3,930
|
|
|
$
|
3,988
|
|
|
$
|
3,682
|
|
|
Oxford
|
|
|
22,446
|
|
|
|
19,825
|
|
|
|
15,970
|
|
|
|
18,523
|
|
|
|
17,483
|
|
|
|
15,312
|
|
|
Consolidated
|
|
$
|
28,731
|
|
|
$
|
23,904
|
|
|
$
|
20,116
|
|
|
$
|
22,453
|
|
|
$
|
21,471
|
|
|
$
|
18,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margins:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
28.8
|
%
|
|
|
27.1
|
%
|
|
|
28.5
|
%
|
|
|
28.5
|
%
|
|
|
28.4
|
%
|
|
|
27.1
|
%
|
|
Oxford
|
|
|
41.5
|
%
|
|
|
41.4
|
%
|
|
|
41.1
|
%
|
|
|
42.2
|
%
|
|
|
41.9
|
%
|
|
|
41.0
|
%
|
|
Consolidated
|
|
|
32.7
|
%
|
|
|
31.6
|
%
|
|
|
32.3
|
%
|
|
|
32.7
|
%
|
|
|
32.7
|
%
|
|
|
31.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of staffing consultants:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
1,067
|
|
|
|
965
|
|
|
|
942
|
|
|
|
875
|
|
|
|
835
|
|
|
|
818
|
|
|
Oxford
|
|
|
983
|
|
|
|
922
|
|
|
|
870
|
|
|
|
845
|
|
|
|
835
|
|
|
|
828
|
|
|
Consolidated
|
|
|
2,050
|
|
|
|
1,887
|
|
|
|
1,812
|
|
|
|
1,720
|
|
|
|
1,670
|
|
|
|
1,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of customers:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
1,766
|
|
|
|
1,293
|
|
|
|
1,276
|
|
|
|
1,475
|
|
|
|
1,431
|
|
|
|
1,375
|
|
|
Oxford
|
|
|
1,092
|
|
|
|
1,027
|
|
|
|
1,050
|
|
|
|
1,013
|
|
|
|
1,005
|
|
|
|
985
|
|
|
Consolidated
|
|
|
2,858
|
|
|
|
2,320
|
|
|
|
2,326
|
|
|
|
2,488
|
|
|
|
2,436
|
|
|
|
2,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Top 10 customers as a percentage of revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
25.2
|
%
|
|
|
27.0
|
%
|
|
|
29.0
|
%
|
|
|
29.8
|
%
|
|
|
29.7
|
%
|
|
|
30.6
|
%
|
|
Oxford
|
|
|
11.2
|
%
|
|
|
11.5
|
%
|
|
|
12.6
|
%
|
|
|
13.3
|
%
|
|
|
13.0
|
%
|
|
|
13.7
|
%
|
|
Consolidated
|
|
|
17.6
|
%
|
|
|
18.5
|
%
|
|
|
20.3
|
%
|
|
|
20.6
|
%
|
|
|
20.4
|
%
|
|
|
20.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average bill rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
54.99
|
|
|
$
|
54.02
|
|
|
$
|
54.59
|
|
|
$
|
54.65
|
|
|
$
|
54.16
|
|
|
$
|
53.89
|
|
|
Oxford
|
|
$
|
101.01
|
|
|
$
|
103.17
|
|
|
$
|
103.92
|
|
|
$
|
102.33
|
|
|
$
|
102.95
|
|
|
$
|
100.64
|
|
|
Consolidated
|
|
$
|
62.54
|
|
|
$
|
62.06
|
|
|
$
|
65.01
|
|
|
$
|
62.56
|
|
|
$
|
62.51
|
|
|
$
|
61.93
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit per staffing consultant:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
92,000
|
|
|
$
|
83,000
|
|
|
$
|
93,000
|
|
|
$
|
100,000
|
|
|
$
|
101,000
|
|
|
$
|
92,000
|
|
|
Oxford
|
|
$
|
62,000
|
|
|
$
|
61,000
|
|
|
$
|
63,000
|
|
|
$
|
68,000
|
|
|
$
|
69,000
|
|
|
$
|
64,000
|
|
|
Consolidated
|
|
$
|
77,000
|
|
|
$
|
72,000
|
|
|
$
|
79,000
|
|
|
$
|
84,000
|
|
|
$
|
85,000
|
|
|
$
|
78,000
|
|
|
______
|
|
(1)
|
|
The segments reported above reflect our new segment configuration.
The Oxford segment now includes our former Life Sciences Europe
segment.
|
|
(2)
|
|
Amounts have been restated to give retroactive effect to the sale of
our Physician Segment on February 1, 2015, and the closure of our
European retained search unit in the fourth quarter of 2014.
|
|
|
|
SUPPLEMENTAL FINANCIAL AND OPERATING DATA (1)
(2) (Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
|
Dec. 31,
|
|
Sept. 30,
|
|
June 30,
|
|
Mar. 31,
|
|
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
Revenues (in thousands):
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
281,032
|
|
|
$
|
276,849
|
|
|
$
|
262,347
|
|
|
$
|
239,765
|
|
|
Oxford
|
|
|
115,038
|
|
|
|
117,551
|
|
|
|
118,431
|
|
|
|
112,087
|
|
|
Consolidated
|
|
$
|
396,070
|
|
|
$
|
394,400
|
|
|
$
|
380,778
|
|
|
$
|
351,852
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct hire and conversion revenues (in thousands):
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
3,221
|
|
|
$
|
3,414
|
|
|
$
|
2,968
|
|
|
$
|
3,229
|
|
|
Oxford
|
|
|
4,085
|
|
|
|
1,915
|
|
|
|
2,038
|
|
|
|
2,073
|
|
|
Consolidated
|
|
$
|
7,306
|
|
|
$
|
5,329
|
|
|
$
|
5,006
|
|
|
$
|
5,302
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margins:
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
28.1
|
%
|
|
|
28.5
|
%
|
|
|
27.8
|
%
|
|
|
26.7
|
%
|
|
Oxford
|
|
|
36.6
|
%
|
|
|
34.2
|
%
|
|
|
33.9
|
%
|
|
|
33.7
|
%
|
|
Consolidated
|
|
|
30.5
|
%
|
|
|
30.2
|
%
|
|
|
29.7
|
%
|
|
|
28.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average number of staffing consultants:
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
805
|
|
|
|
796
|
|
|
|
777
|
|
|
|
772
|
|
|
Oxford
|
|
|
695
|
|
|
|
616
|
|
|
|
612
|
|
|
|
599
|
|
|
Consolidated
|
|
|
1,500
|
|
|
|
1,412
|
|
|
|
1,389
|
|
|
|
1,371
|
|
|
|
|
|
|
|
|
|
|
|
|
Average number of customers:
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
1,381
|
|
|
|
1,345
|
|
|
|
1,331
|
|
|
|
1,312
|
|
|
Oxford
|
|
|
1,048
|
|
|
|
905
|
|
|
|
917
|
|
|
|
891
|
|
|
Consolidated
|
|
|
2,429
|
|
|
|
2,250
|
|
|
|
2,248
|
|
|
|
2,203
|
|
|
|
|
|
|
|
|
|
|
|
|
Top 10 customers as a percentage of revenue:
|
|
|
|
|
|
|
|
|
|
Apex
|
|
|
31.1
|
%
|
|
|
31.3
|
%
|
|
|
30.3
|
%
|
|
|
29.7
|
%
|
|
Oxford
|
|
|
14.4
|
%
|
|
|
16.8
|
%
|
|
|
18.3
|
%
|
|
|
15.4
|
%
|
|
Consolidated
|
|
|
22.1
|
%
|
|
|
21.9
|
%
|
|
|
21.2
|
%
|
|
|
20.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Average bill rate:
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
53.41
|
|
|
$
|
54.10
|
|
|
$
|
54.26
|
|
|
$
|
53.59
|
|
|
Oxford
|
|
$
|
102.24
|
|
|
$
|
105.27
|
|
|
$
|
107.94
|
|
|
$
|
107.07
|
|
|
Consolidated
|
|
$
|
61.55
|
|
|
$
|
62.76
|
|
|
$
|
63.84
|
|
|
$
|
63.09
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit per staffing consultant:
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
98,000
|
|
|
$
|
99,000
|
|
|
$
|
94,000
|
|
|
$
|
83,000
|
|
|
Oxford
|
|
$
|
61,000
|
|
|
$
|
65,000
|
|
|
$
|
66,000
|
|
|
$
|
63,000
|
|
|
Consolidated
|
|
$
|
81,000
|
|
|
$
|
84,000
|
|
|
$
|
81,000
|
|
|
$
|
74,000
|
|
|
______
|
|
(1)
|
|
The segments reported above reflect our new segment configuration.
The Oxford segment now includes our former Life Sciences Europe
segment.
|
|
(2)
|
|
Amounts have been restated to give retroactive effect to the sale of
our Physician Segment on February 1, 2015, and the closure of our
European retained search unit in the fourth quarter of 2014.
|
|
|
|
SUPPLEMENTAL FINANCIAL INFORMATION – KEY METRICS (Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
June 30, 2015
|
|
March 31, 2015
|
|
Percentage of revenues:
|
|
|
|
|
|
Top ten clients
|
|
17.6%
|
|
18.5%
|
|
Direct hire/conversion
|
|
5.9%
|
|
5.6%
|
|
|
|
|
|
|
|
Bill rate:
|
|
|
|
|
|
% Sequential change
|
|
0.8%
|
|
(4.5%)
|
|
% Year-over-year change
|
|
—%
|
|
0.2%
|
|
|
|
|
|
|
|
Bill/Pay spread:
|
|
|
|
|
|
% Sequential change
|
|
1.2%
|
|
(5.2%)
|
|
% Year-over-year change
|
|
(3.8%)
|
|
(2.2%)
|
|
|
|
|
|
|
|
Average headcount:
|
|
|
|
|
|
Contract professionals (CP)
|
|
15,506
|
|
12,318
|
|
Staffing consultants (SC)
|
|
2,050
|
|
1,887
|
Contact:
On Assignment, Inc.
Ed Pierce
Chief Financial Officer
(818) 878-7900