Revenues, Adjusted EPS & 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 September 30, 2015.
Third Quarter Highlights
-
Revenues were $572.1 million; up 29.3 percent year-over-year (30.3
percent on a constant currency basis). 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 on a pro forma basis were up 13.4 percent year-over-year
(14.2 percent on a constant currency basis). Pro forma results assume
the acquisitions of Creative Circle, LLC ("Creative Circle") and a
small Life Sciences business in Europe (the "Acquisitions") occurred
at the beginning of 2014.
-
Revenues, excluding the contribution from the Acquisitions, were
$496.4 million, up 12.2 percent year-over-year (up 13.1 percent, on a
constant currency basis).
-
Adjusted EBITDA (a non-GAAP measure defined below) was $74.9 million,
or 13.1 percent of revenues.
-
Adjusted income from continuing operations (a non-GAAP measure defined
below) was $43.8 million ($0.82 per diluted share).
-
Leverage ratio (total indebtedness to trailing 12 months Adjusted
EBITDA) was 3.21 to 1 at September 30, 2015, down from 3.51 to 1 at
June 30, 2015.
-
Raising revenue estimates for the fourth quarter of 2015 to $563
million to $568 million (an increase of $15 million to $20 million).
Commenting on the results, Peter Dameris, President and Chief Executive
Officer of On Assignment, Inc., said, "Our third quarter results were
strong on all financial metrics. Revenue growth, Adjusted EBITDA,
Adjusted EPS and free cash flow generation exceeded our initial
expectations. We are particularly pleased with our higher revenue growth
rates, which reflect, among other things, the contributions from our
"hiring surge" of sales consultants and recruiters that began in the
second half of 2014.
"We are raising our revenue estimates for the fourth quarter (implied
from the high end of our previously announced estimates for the second
half and the third quarter of 2015) to $563 million to $568 million, an
increase of $15 million to $20 million. As a result of the strength we
are seeing in business and the favorable demand outlook, we are making
additional investments in the number of recruiters and sales
consultants. We have added approximately 100 staffing consultants since
the end of the second quarter. We believe that this additional headcount
and the improving contribution from the headcount added during our
hiring surge in the second half of 2014, will better position us to
capture the current market opportunity and improve our growth in 2016."
Dameris concluded, "We believe the secular trend of customers wanting to
share human capital has driven attractive growth for the entire
professional staffing industry. Customers are continuing to embrace the
realization that the best way to "fractionalize"/share human capital and
avoid the legal risks of misclassifying employees is by working with a
staffing firm. As the secular trend of sharing human capital gains
speed, we believe the professional staffing industry will be the net
beneficiary of customers refusing to use independent contractors and
instead, using professional staffing firms."
Third Quarter 2015 Financial Results
Revenues for the quarter were $572.1 million ($576.6 million on a
constant currency basis), up 29.3 percent year-over-year (30.3 percent
on a constant currency basis). Constant currency revenues and growth
rates were calculated using the foreign exchange rates from the third
quarter of 2014. Revenues on a pro forma basis, which assumes the
Acquisitions occurred at the beginning of 2014 were up 13.4 percent
year-over-year (14.2 percent on a constant currency basis).
Revenues from the Acquisitions (which were acquired in the second
quarter of 2015) totaled $75.7 million for the current quarter. The
revenue contribution from Creative Circle was $73.0 million, and the
contribution from the Life Sciences business was $2.7 million. Operating
results of Creative Circle are included in the Apex Segment. The Life
Sciences European business is included in the Oxford Segment.
Revenues, excluding the contribution from the Acquisitions, were $496.4
million ($500.3 million on a constant currency basis), up 12.2 percent
year-over-year (13.1 percent, on a constant currency basis).
Direct hire and conversion revenues were $32.7 million, up 45.8 percent
year-over-year, which included $5.4 million from Creative Circle.
CyberCoders accounted for 63.0 percent of the total and was up 19.6
percent year-over-year. Direct hire and conversion revenues were 5.7
percent of total revenues for the quarter, up from 5.1 percent in the
third quarter of 2014.
Our largest segment, Apex, accounted for 73.6 percent of total revenues.
Apex grew 37.6 percent year-over-year, and 15.2 percent on a pro forma
basis. Excluding the revenue contribution of $73.0 million from Creative
Circle, the Apex Segment grew 13.7 percent year-over-year.
Our Oxford Segment accounted for 26.4 percent of total revenues. Oxford
grew 10.7 percent year-over-year, and 8.6 percent on a pro forma basis
(11.8 percent on constant currency basis). Excluding the revenue
contribution of $2.7 million from an acquired business, the Oxford
Segment grew 8.7 percent (11.6 percent on a constant currency basis).
Gross profit was $191.4 million, up $46.6 million or 32.2 percent
year-over-year. Gross margin for the quarter was 33.5 percent.
Selling, general and administrative (“SG&A”) expenses were $128.6
million (22.5 percent of revenues), up from $100.6 million (22.7 percent
of revenues) in the third quarter of 2014. SG&A expenses for the quarter
included SG&A expense of $15.0 million from Creative Circle, and
acquisition, integration and strategic planning expenses of $1.7 million.
Amortization of intangible assets was $11.3 million, compared with $5.5
million in the third quarter of 2014. The increase in amortization is
mainly related to the acquisition of Creative Circle.
Interest expense for the quarter was $9.5 million compared with $3.1
million in the third quarter of 2014. Interest expense for the quarter
was comprised of (i) interest on the credit facility of $7.9 million,
(ii) amortization of deferred loan costs of $0.9 million, and (iii)
accretion of $0.7 million on the contingent consideration liability
related to acquisitions.
Adjusted income from continuing operations (a non-GAAP measure as
calculated in an accompanying table) was $43.8 million ($0.82 per
diluted share). Net income on a GAAP basis was $24.9 million ($0.47 per
diluted share).
Adjusted EBITDA (a non-GAAP measure defined below) was $74.9 million, or
13.1 percent of revenues. The Adjusted EBITDA contribution from Creative
Circle was $16.6 million.
Cash flows from operating activities were $35.3 million and free cash
flow was $30.4 million. During the quarter, we repaid $46.0 million of
long-term debt and at September 30, 2015, our leverage ratio (total
indebtedness to trailing 12 months Adjusted EBITDA) was 3.21 to 1, down
from 3.51 to 1 at June 30, 2015.
Financial Estimates for Q4 2015
On Assignment is providing financial estimates for the fourth 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
deterioration in foreign exchange rates.
-
Revenues of $563.0 million to $568.0 million
-
Gross margin of 32.8 percent to 33.2 percent
-
SG&A expense (excludes amortization of intangible assets) of $128.3 to
$129.3 million (includes $4.7 million in depreciation and $5.6 million
in equity-based compensation expense)
-
Amortization of intangible assets of $11.3 million
-
Adjusted EBITDA of $66.7 million to $69.6 million
-
Effective tax rate of 40.8 percent
-
Adjusted income from continuing operations of $38.4 million to $40.1
million
-
Adjusted income from continuing operations per diluted share of $0.72
to $0.75
-
Income from continuing operations of $21.2 million to $22.9 million
-
Income from continuing operations per diluted share of $0.40 to $0.43
-
Diluted shares outstanding of 53.5 million
These estimates assume year-over-year revenue growth on a reported basis
of approximately 35.0 percent for the Apex Segment (13.0 percent on a
pro forma basis) and approximately 10.8 percent for the Oxford Segment.
The above estimates assume billable days of 60.7 for the quarter, which
are 3.1 fewer days than the preceding quarter. Based on the average
revenue per billable day in the third quarter of 2015, the effect on
revenues for the fourth quarter of fewer billable days than the
preceding quarter is approximately $28 million.
Conference Call
On Assignment will hold a conference call today at 4:30 p.m. EDT to
review its third quarter financial results. The dial-in number is
800-288-8976 (+1-612-332-0634 for callers outside the United States) and
the conference ID number is 370869. Participants should dial in ten
minutes before the call.
A replay of the conference call will be available beginning Wednesday,
October 28, 2015 at 6:30 p.m. EDT and ending at 11:59 p.m. EST on
Thursday, November 12, 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 370869.
This call is being webcast by CCBN and can be accessed via On
Assignment's web site at www.onassignment.com.
Individual investors can also listen at CCBN's site at www.fulldisclosure.com
or by visiting any of the investor sites in 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 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 Reports on Form 10-Q
for the quarters ended March 31, 2015 and June 30, 2015 as filed with
the SEC on May 8, 2015 and August 7, 2015, respectively, 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
|
|
Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
|
|
2015
|
|
|
|
2014 (1)
|
|
|
|
2015
|
|
|
|
2015
|
|
|
|
2014 (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
572,123
|
|
|
$
|
442,443
|
|
|
$
|
485,323
|
|
|
$
|
1,487,491
|
|
|
$
|
1,283,718
|
|
|
Cost of services
|
|
|
380,719
|
|
|
|
297,605
|
|
|
|
326,789
|
|
|
|
1,001,678
|
|
|
|
868,820
|
|
|
Gross profit
|
|
|
191,404
|
|
|
|
144,838
|
|
|
|
158,534
|
|
|
|
485,813
|
|
|
|
414,898
|
|
|
Selling, general and administrative expenses
|
|
|
128,614
|
|
|
|
100,608
|
|
|
|
118,867
|
|
|
|
353,416
|
|
|
|
296,331
|
|
|
Amortization of intangible assets
|
|
|
11,325
|
|
|
|
5,532
|
|
|
|
6,957
|
|
|
|
23,151
|
|
|
|
16,592
|
|
|
Operating income
|
|
|
51,465
|
|
|
|
38,698
|
|
|
|
32,710
|
|
|
|
109,246
|
|
|
|
101,975
|
|
|
Interest expense, net
|
|
|
(9,543
|
)
|
|
|
(3,101
|
)
|
|
|
(4,736
|
)
|
|
|
(17,346
|
)
|
|
|
(9,532
|
)
|
|
Write-off of loan costs
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,751
|
)
|
|
|
(3,751
|
)
|
|
|
—
|
|
|
Income before income taxes
|
|
|
41,922
|
|
|
|
35,597
|
|
|
|
24,223
|
|
|
|
88,149
|
|
|
|
92,443
|
|
|
Provision for income taxes
|
|
|
17,031
|
|
|
|
14,874
|
|
|
|
9,888
|
|
|
|
35,900
|
|
|
|
38,474
|
|
|
Income from continuing operations
|
|
|
24,891
|
|
|
|
20,723
|
|
|
|
14,335
|
|
|
|
52,249
|
|
|
|
53,969
|
|
|
Gain on sale of discontinued operations, net of tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
25,703
|
|
|
|
—
|
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
34
|
|
|
|
1,282
|
|
|
|
(83
|
)
|
|
|
360
|
|
|
|
2,742
|
|
|
Net income
|
|
$
|
24,925
|
|
|
$
|
22,005
|
|
|
$
|
14,252
|
|
|
$
|
78,312
|
|
|
$
|
56,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.47
|
|
|
$
|
0.39
|
|
|
$
|
0.28
|
|
|
$
|
1.00
|
|
|
$
|
1.00
|
|
|
Income (loss) from discontinued operations
|
|
|
—
|
|
|
|
0.02
|
|
|
|
(0.01
|
)
|
|
|
0.50
|
|
|
|
0.05
|
|
|
|
|
$
|
0.47
|
|
|
$
|
0.41
|
|
|
$
|
0.27
|
|
|
$
|
1.50
|
|
|
$
|
1.05
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted earnings per common share:
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$
|
0.47
|
|
|
$
|
0.38
|
|
|
$
|
0.27
|
|
|
$
|
0.99
|
|
|
$
|
0.98
|
|
|
Income from discontinued operations
|
|
|
—
|
|
|
|
0.03
|
|
|
|
—
|
|
|
|
0.49
|
|
|
|
0.05
|
|
|
|
|
$
|
0.47
|
|
|
$
|
0.41
|
|
|
$
|
0.27
|
|
|
$
|
1.48
|
|
|
$
|
1.03
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of shares and share equivalents used to calculate earnings
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
52,654
|
|
|
|
53,374
|
|
|
|
51,978
|
|
|
|
52,053
|
|
|
|
53,955
|
|
|
Diluted
|
|
|
53,304
|
|
|
|
54,129
|
|
|
|
52,633
|
|
|
|
52,759
|
|
|
|
54,804
|
|
|
__________
|
|
(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 (Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
|
2015
|
|
2014 (1)
|
|
2015
|
|
2015
|
|
2014 (1)
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
421,067
|
|
$
|
306,027
|
|
$
|
338,704
|
|
$
|
1,054,064
|
|
$
|
882,328
|
|
Oxford
|
|
|
151,056
|
|
|
136,416
|
|
|
146,619
|
|
|
433,427
|
|
|
401,390
|
|
|
|
$
|
572,123
|
|
$
|
442,443
|
|
$
|
485,323
|
|
$
|
1,487,491
|
|
$
|
1,283,718
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit:
|
|
|
|
|
|
|
|
|
|
|
|
Apex
|
|
$
|
128,731
|
|
$
|
87,323
|
|
$
|
97,652
|
|
$
|
306,026
|
|
$
|
247,506
|
|
Oxford
|
|
|
62,673
|
|
|
57,515
|
|
|
60,882
|
|
|
179,787
|
|
|
167,392
|
|
|
|
$
|
191,404
|
|
$
|
144,838
|
|
$
|
158,534
|
|
$
|
485,813
|
|
$
|
414,898
|
|
__________
|
|
(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.
|
|
|
|
SELECTED CASH FLOW INFORMATION (Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
September 30,
|
|
June 30,
|
|
September 30,
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2015 (1)
|
|
2014
|
|
Cash provided by operations
|
|
$
|
35,277
|
|
$
|
42,949
|
|
$
|
32,477
|
|
$
|
87,697
|
|
$
|
67,958
|
|
Capital expenditures
|
|
$
|
4,846
|
|
$
|
4,622
|
|
$
|
5,331
|
|
$
|
18,177
|
|
$
|
14,260
|
|
|
|
SELECTED CONSOLIDATED BALANCE SHEET DATA (Unaudited)
|
|
(In thousands)
|
|
|
|
|
|
September 30,
|
|
June 30,
|
|
|
|
2015
|
|
2015
|
|
Cash and cash equivalents
|
|
$
|
28,916
|
|
$
|
41,863
|
|
Accounts receivable, net
|
|
|
358,649
|
|
|
330,958
|
|
Total current assets
|
|
|
432,104
|
|
|
417,698
|
|
Goodwill and intangible assets, net (2)
|
|
|
1,305,335
|
|
|
1,316,461
|
|
Total assets (2)
|
|
|
1,796,800
|
|
|
1,793,848
|
|
Total current liabilities (2)
|
|
|
182,149
|
|
|
167,861
|
|
Working capital (2)
|
|
|
249,955
|
|
|
249,837
|
|
Long-term debt (3)
|
|
|
784,797
|
|
|
830,085
|
|
Other long-term liabilities
|
|
|
71,266
|
|
|
70,806
|
|
Stockholders’ equity
|
|
|
758,588
|
|
|
725,096
|
|
__________
|
|
(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, and
September 30, 2015.
|
|
|
|
(2)
|
|
June 30, 2015 balance reflects purchase accounting adjustments which
are presented retrospectively to the acquisition date.
|
|
|
|
(3)
|
|
Long-term debt is net of $19.2 million and $19.9 million unamortized
deferred loan costs at September 30, 2015 and June 30, 2015,
respectively.
|
|
|
|
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
|
|
|
September 30,
|
|
|
|
|
|
2015
|
|
2014 (1)
|
|
June 30, 2015
|
|
Net income
|
|
$
|
24,925
|
|
$
|
0.47
|
|
$
|
22,005
|
|
$
|
0.41
|
|
$
|
14,252
|
|
|
$
|
0.27
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
34
|
|
|
—
|
|
|
1,282
|
|
|
0.03
|
|
|
(83
|
)
|
|
|
—
|
|
Income from continuing operations
|
|
|
24,891
|
|
|
0.47
|
|
|
20,723
|
|
|
0.38
|
|
|
14,335
|
|
|
|
0.27
|
|
Interest expense, net
|
|
|
9,543
|
|
|
0.18
|
|
|
3,101
|
|
|
0.07
|
|
|
4,736
|
|
|
|
0.09
|
|
Write-off of loan costs
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,751
|
|
|
|
0.07
|
|
Provision for income taxes
|
|
|
17,031
|
|
|
0.32
|
|
|
14,874
|
|
|
0.27
|
|
|
9,888
|
|
|
|
0.19
|
|
Depreciation
|
|
|
4,356
|
|
|
0.08
|
|
|
3,316
|
|
|
0.06
|
|
|
4,191
|
|
|
|
0.08
|
|
Amortization of intangible assets
|
|
|
11,325
|
|
|
0.21
|
|
|
5,532
|
|
|
0.10
|
|
|
6,957
|
|
|
|
0.13
|
|
EBITDA
|
|
|
67,146
|
|
|
1.26
|
|
|
47,546
|
|
|
0.88
|
|
|
43,858
|
|
|
|
0.83
|
|
Equity-based compensation
|
|
|
6,054
|
|
|
0.12
|
|
|
4,458
|
|
|
0.08
|
|
|
5,236
|
|
|
|
0.10
|
|
Acquisition, integration and strategic planning expenses
|
|
|
1,714
|
|
|
0.03
|
|
|
940
|
|
|
0.02
|
|
|
6,932
|
|
|
|
0.13
|
|
Adjusted EBITDA
|
|
$
|
74,914
|
|
$
|
1.41
|
|
$
|
52,944
|
|
$
|
0.98
|
|
$
|
56,026
|
|
|
$
|
1.06
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
53,304
|
|
|
|
|
54,129
|
|
|
|
|
52,633
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
2014 (1)
|
|
Net income
|
|
$
|
78,312
|
|
$
|
1.48
|
|
$
|
56,711
|
|
$
|
1.03
|
|
Income from discontinued operations, net of tax
|
|
|
26,063
|
|
|
0.49
|
|
|
2,742
|
|
|
0.05
|
|
Income from continuing operations
|
|
|
52,249
|
|
|
0.99
|
|
|
53,969
|
|
|
0.98
|
|
Interest expense, net
|
|
|
17,346
|
|
|
0.33
|
|
|
9,532
|
|
|
0.19
|
|
Write-off of loan costs
|
|
|
3,751
|
|
|
0.07
|
|
|
—
|
|
|
—
|
|
Provision for income taxes
|
|
|
35,900
|
|
|
0.68
|
|
|
38,474
|
|
|
0.70
|
|
Depreciation
|
|
|
12,079
|
|
|
0.23
|
|
|
8,886
|
|
|
0.16
|
|
Amortization of intangible assets
|
|
|
23,151
|
|
|
0.44
|
|
|
16,592
|
|
|
0.30
|
|
EBITDA
|
|
|
144,476
|
|
|
2.74
|
|
|
127,453
|
|
|
2.33
|
|
Equity-based compensation
|
|
|
15,244
|
|
|
0.29
|
|
|
11,466
|
|
|
0.21
|
|
Acquisition, integration and strategic planning expenses
|
|
|
9,924
|
|
|
0.19
|
|
|
3,502
|
|
|
0.06
|
|
Adjusted EBITDA
|
|
$
|
169,644
|
|
$
|
3.22
|
|
$
|
142,421
|
|
$
|
2.60
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,759
|
|
|
|
|
54,804
|
|
|
|
__________
|
|
(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
|
|
|
September 30,
|
|
June 30,
|
|
|
|
2015
|
|
2014 (1)
|
|
2015
|
|
Net income
|
|
$
|
24,925
|
|
$
|
0.47
|
|
$
|
22,005
|
|
$
|
0.41
|
|
$
|
14,252
|
|
|
$
|
0.27
|
|
Income (loss) from discontinued operations, net of tax
|
|
|
34
|
|
|
—
|
|
|
1,282
|
|
|
0.02
|
|
|
(83
|
)
|
|
|
—
|
|
Income from continuing operations
|
|
|
24,891
|
|
|
0.47
|
|
|
20,723
|
|
|
0.39
|
|
|
14,335
|
|
|
|
0.27
|
|
Write-off of loan costs, net of tax
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,288
|
|
|
|
0.04
|
|
Acquisition, integration and strategic planning expenses, net of tax (2)
|
|
|
1,612
|
|
|
0.03
|
|
|
573
|
|
|
0.01
|
|
|
4,578
|
|
|
|
0.09
|
|
Non-GAAP income from continuing operations
|
|
$
|
26,503
|
|
$
|
0.50
|
|
$
|
21,296
|
|
$
|
0.40
|
|
$
|
21,201
|
|
|
$
|
0.40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
53,304
|
|
|
|
|
54,129
|
|
|
|
|
52,633
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30,
|
|
|
|
2015
|
|
2014 (1)
|
|
Net income
|
|
$
|
78,312
|
|
$
|
1.48
|
|
$
|
56,711
|
|
$
|
1.03
|
|
Income from discontinued operations, net of tax
|
|
|
26,063
|
|
|
0.49
|
|
|
2,742
|
|
|
0.05
|
|
Income from continuing operations
|
|
|
52,249
|
|
|
0.99
|
|
|
53,969
|
|
|
0.98
|
|
Write-off of loan costs, net of tax
|
|
|
2,288
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
Acquisition, integration and strategic planning expenses, net of tax (2)
|
|
|
6,970
|
|
|
0.14
|
|
|
2,136
|
|
|
0.04
|
|
Non-GAAP income from continuing operations
|
|
$
|
61,507
|
|
$
|
1.17
|
|
$
|
56,105
|
|
$
|
1.02
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
52,759
|
|
|
|
|
54,804
|
|
|
|
__________
|
|
(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.
|
|
(2)
|
|
Included in the three and nine months ended September 30, 2015 is
interest expense of $0.7 million ($0.5 million net of tax), for
accretion of discount, reflected in our contingent consideration
liability that is associated with our acquisitions.
|
|
|
|
CALCULATION OF ADJUSTED EARNINGS PER DILUTED SHARE (Unaudited)
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|
|
|
September 30,
|
|
|
|
|
2015
|
|
|
|
2014 (5)
|
|
|
|
2015
|
|
|
|
2014 (5)
|
|
|
Non-GAAP income from continuing operations (1)
|
|
$
|
26,503
|
|
|
$
|
21,296
|
|
|
$
|
61,507
|
|
|
$
|
56,105
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets (2)
|
|
|
11,325
|
|
|
|
5,532
|
|
|
|
23,151
|
|
|
|
16,592
|
|
|
Cash tax savings on indefinite-lived intangible assets (3)
|
|
|
6,593
|
|
|
|
3,808
|
|
|
|
15,266
|
|
|
|
11,422
|
|
|
Income taxes on amortization for financial reporting purposes not
deductible for income tax purposes (4)
|
|
|
(621
|
)
|
|
|
(531
|
)
|
|
|
(1,733
|
)
|
|
|
(1,593
|
)
|
|
Adjusted income from continuing operations
|
|
$
|
43,800
|
|
|
$
|
30,105
|
|
|
$
|
98,191
|
|
|
$
|
82,526
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted income from continuing operations per diluted share
|
|
$
|
0.82
|
|
|
$
|
0.56
|
|
|
$
|
1.86
|
|
|
$
|
1.51
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common and common equivalent shares outstanding
(diluted)
|
|
|
53,304
|
|
|
|
54,129
|
|
|
|
52,759
|
|
|
|
54,804
|
|
|
__________
|
|
(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 (Unaudited)
|
|
|
|
|
|
Apex
|
|
Oxford
|
|
Consolidated 1
|
|
Revenues (in thousands):
|
|
|
|
|
|
|
|
Q3 2015
|
|
$
|
421,067
|
|
|
$
|
151,056
|
|
|
$
|
572,123
|
|
|
Q2 2015
|
|
$
|
338,704
|
|
|
$
|
146,619
|
|
|
$
|
485,323
|
|
|
% Sequential change
|
|
|
24.3
|
%
|
|
|
3.0
|
%
|
|
|
17.9
|
%
|
|
Q3 2014
|
|
$
|
306,027
|
|
|
$
|
136,416
|
|
|
$
|
442,443
|
|
|
% Year-over-year change
|
|
|
37.6
|
%
|
|
|
10.7
|
%
|
|
|
29.3
|
%
|
|
|
|
|
|
|
|
|
|
Direct hire and conversion revenues (in thousands):
|
|
|
|
|
|
|
|
Q3 2015
|
|
$
|
10,574
|
|
|
$
|
22,166
|
|
|
$
|
32,740
|
|
|
Q2 2015
|
|
$
|
6,285
|
|
|
$
|
22,446
|
|
|
$
|
28,731
|
|
|
Q3 2014
|
|
$
|
3,930
|
|
|
$
|
18,523
|
|
|
$
|
22,453
|
|
|
|
|
|
|
|
|
|
|
Gross margins:
|
|
|
|
|
|
|
|
Q3 2015
|
|
|
30.6
|
%
|
|
|
41.5
|
%
|
|
|
33.5
|
%
|
|
Q2 2015
|
|
|
28.8
|
%
|
|
|
41.5
|
%
|
|
|
32.7
|
%
|
|
Q3 2014
|
|
|
28.5
|
%
|
|
|
42.2
|
%
|
|
|
32.7
|
%
|
|
|
|
|
|
|
|
|
|
Average number of staffing consultants: 2
|
|
|
|
|
|
|
|
Q3 2015
|
|
|
1,266
|
|
|
|
966
|
|
|
|
2,232
|
|
|
Q2 2015
|
|
|
1,067
|
|
|
|
935
|
|
|
|
2,002
|
|
|
Q3 2014
|
|
|
875
|
|
|
|
845
|
|
|
|
1,720
|
|
|
|
|
|
|
|
|
|
|
Average number of customers: 3
|
|
|
|
|
|
|
|
Q3 2015
|
|
|
3,207
|
|
|
|
1,114
|
|
|
|
4,321
|
|
|
Q2 2015
|
|
|
1,766
|
|
|
|
1,092
|
|
|
|
2,858
|
|
|
Q3 2014
|
|
|
1,475
|
|
|
|
1,013
|
|
|
|
2,488
|
|
|
|
|
|
|
|
|
|
|
Top 10 customers as a percentage of revenue:
|
|
|
|
|
|
|
|
Q3 2015
|
|
|
22.7
|
%
|
|
|
8.7
|
%
|
|
|
16.7
|
%
|
|
Q2 2015
|
|
|
25.2
|
%
|
|
|
11.2
|
%
|
|
|
17.6
|
%
|
|
Q3 2014
|
|
|
29.8
|
%
|
|
|
13.3
|
%
|
|
|
20.6
|
%
|
|
|
|
|
|
|
|
|
|
Average bill rate:
|
|
|
|
|
|
|
|
Q3 2015
|
|
$
|
55.51
|
|
|
$
|
99.33
|
|
|
$
|
61.64
|
|
|
Q2 2015
|
|
$
|
54.99
|
|
|
$
|
101.01
|
|
|
$
|
62.54
|
|
|
Q3 2014
|
|
$
|
54.65
|
|
|
$
|
102.33
|
|
|
$
|
62.56
|
|
|
|
|
|
|
|
|
|
|
Gross profit per staffing consultant:
|
|
|
|
|
|
|
|
Q3 2015
|
|
$
|
102,000
|
|
|
$
|
65,000
|
|
|
$
|
86,000
|
|
|
Q2 2015
|
|
$
|
92,000
|
|
|
$
|
65,000
|
|
|
$
|
79,000
|
|
|
Q3 2014
|
|
$
|
100,000
|
|
|
$
|
68,000
|
|
|
$
|
84,000
|
|
|
__________
|
|
(1)
|
|
Prior year amounts have been restated to exclude discontinued
operations.
|
|
(2)
|
|
Excluding Creative Circle, the average number of staffing
consultants for the Apex Segment is 1,073 for the third quarter of
2015 and 1,007 for the second quarter of 2015.
|
|
(3)
|
|
Excluding Creative Circle, the average number of customers for the
Apex Segment is 1,375 for the third quarter of 2015 and 1,359 for
the second quarter of 2015.
|
|
|
|
SUPPLEMENTAL FINANCIAL INFORMATION – KEY METRICS (Unaudited)
|
|
|
|
|
|
Three Months Ended
|
|
|
September 30, 2015
|
|
June 30, 2015
|
|
Percentage of revenues:
|
|
|
|
|
|
Top ten clients
|
|
16.7%
|
|
17.6%
|
|
Direct hire/conversion
|
|
5.7%
|
|
5.9%
|
|
|
|
|
|
|
|
Bill rate:
|
|
|
|
|
|
% Sequential change
|
|
(1.4%)
|
|
0.8%
|
|
% Year-over-year change
|
|
(1.5%)
|
|
—%
|
|
|
|
|
|
|
|
Bill/Pay spread:
|
|
|
|
|
|
% Sequential change
|
|
0.5%
|
|
1.2%
|
|
% Year-over-year change
|
|
(1.0%)
|
|
(3.8%)
|
|
|
|
|
|
|
|
Average headcount:
|
|
|
|
|
|
Contract professionals (CP)
|
|
16,633
|
|
15,506
|
|
Staffing consultants (SC)
|
|
2,232
|
|
2,002
|
Contact:
On Assignment, Inc.
Ed Pierce
Chief Financial Officer
(818) 878-7900