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On Assignment Reports Record Second Quarter 2012 Results

Stocks in this article: ASGN

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 2012. 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, net income, 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 nurses and other qualified temporary professionals, management of our growth, continued performance of our enterprise-wide information systems, and other risks detailed from time to time in our reports filed with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC on March 14, 2012 and our Form 10Q for the period ended March 31, 2012, as filed with the SEC on May 9, 2012. We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release.

   
SUMMARY CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended Six Months Ended

June 30,2012

 

June 30,2011

 

March 31,2012

June 30,2012

 

June 30,2011

 
Revenues $ 283,186 $ 143,683 $ 167,078 $ 450,264 $ 273,121
Cost of services 194,232   94,889   112,030   306,262  

181,173

 
Gross profit 88,954 48,794 55,048 144,002 91,948
Selling, general and

administrative expenses

69,300   37,999   45,101   114,401   74,754  
Operating income 19,654 10,795 9,947 29,601 17,194
Interest expense (4,906 ) (784 ) (702 ) (5,608 ) (1,514 )
Interest income 5   4   1   6   21  
Income before income taxes 14,753 10,015 9,246 23,999 15,701
Income tax provision 6,238   4,150   3,863   10,101   6,672  
Net income $ 8,515   $ 5,865   $ 5,383   $ 13,898   $ 9,029  
Earnings per share:
Basic $ 0.19   $ 0.16   $ 0.14   $ 0.34   $ 0.25  
Diluted $ 0.19   $ 0.16   $ 0.14   $ 0.33   $ 0.24  
Number of shares and share equivalents used to calculate earnings per share:
Basic 44,852   36,971   37,269   41,060   36,798  
Diluted 45,879   37,718   38,154   42,067   37,623  
 
 
   
SUPPLEMENTAL SEGMENT FINANCIAL INFORMATION
(In thousands)
(Unaudited)
 
Three Months Ended Six Months Ended

June 30,2012

 

June 30,2011

 

March 31,2012

June 30,2012

 

June 30,2011

Revenues:
Apex $ 99,004 $ ― $ ― $ 99,004 $ ―
Oxford 88,107 65,319 78,759 166,866 125,438
Life Sciences 40,509 39,626 41,351 81,860 72,583
Healthcare 30,527 21,736 22,879 53,406 41,580
Physician 25,039   17,002   24,089   49,128   33,520
Consolidated revenues $ 283,186   $ 143,683   $ 167,078   $ 450,264   $ 273,121
 
Gross profit:
Apex $ 26,983 $ ― $ ― $ 26,983 $ ―
Oxford 31,646 23,412 27,370 59,016 44,370
Life Sciences 13,808 13,592 13,839 27,647 24,862
Healthcare 8,799 6,157 6,340 15,139 11,784
Physician 7,718   5,633   7,499   15,217   10,932
Consolidated gross profit $ 88,954   $ 48,794   $ 55,048   $ 144,002   $ 91,948
 
 
   
SELECTED CASH FLOW INFORMATION
(In thousands)
(Unaudited)
 
Three Months Ended Six Months Ended

June 30,2012

 

June 30,2011

 

March 31,2012

June 30,2012

 

June 30,2011

Cash (used in) provided by operations $ (22,889 ) $ 7,167 $ 6,973 $ (15,916 ) $ 12,945
Capital expenditures 5,255 2,022 2,119 7,374 4,672
 
 
 
SELECTED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
(Unaudited)
 
As of
June 30, 2012   June 30, 2011   March 31, 2012
Cash and cash equivalents $ 18,423 $ 19,183 $ 17,685
Accounts receivable, net 238,535 80,831 102,026
Goodwill and intangible assets, net 774,942 246,766 260,626
Total assets 1,094,748 383,673 419,989
Current portion of long-term debt 13,650 5,000 5,000
Total current liabilities 125,823 60,246 62,541
Long-term debt 452,938 72,250 75,500
Other long-term liabilities 25,401 18,249 25,932
Stockholders’ equity 490,586 232,928 256,016
 
 
 
RECONCILIATION OF GAAP NET INCOME AND EARNINGS PER SHARE TO NON-GAAP
ADJUSTED EBITDA AND ADJUSTED EBITDA PER DILUTED SHARE
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
June 30, 2012 (1)   June 30, 2011   March 31, 2012 (1)
Net income $ 8,515     $ 0.19 $ 5,865     $ 0.16 $ 5,383     $ 0.14
Interest expense, net 4,901 0.11 780 0.02 701 0.02
Income tax provision 6,238 0.14 4,150 0.11 3,863 0.10
Depreciation 1,580 0.03 1,686 0.04 1,429 0.04
Amortization of intangibles 2,205   0.05   554   0.02   634   0.02
EBITDA 23,439 0.51 13,035 0.35 12,010 0.31
Equity-based compensation 2,308 0.05 1,621 0.04 1,191 0.03
Acquisition costs expensed 6,562   0.14   175   2,492   0.07
Adjusted EBITDA $ 32,309   $ 0.70   $ 14,831   $ 0.39   $ 15,693   $ 0.41
 
Weighted Average Common and Common Equivalent Shares Outstanding 45,879   37,718   38,154  
 

(1) Column does not foot due to rounding

 
  Six Months Ended
June 30, 2012   June 30, 2011
Net income $ 13,898     $ 0.33 $ 9,029     $ 0.24
Interest expense, net 5,602 0.13 1,493 0.04
Income tax provision 10,101 0.24 6,672 0.18
Depreciation 3,009 0.07 3,234 0.08
Amortization of intangibles 2,839   0.07   970   0.03
EBITDA 35,449 0.84 21,398 0.57
Equity-based compensation 3,499 0.08 3,246 0.08
Acquisition related costs 9,054   0.22   727   0.02
Adjusted EBITDA $ 48,002   $ 1.14   $ 25,371   $ 0.67
 
Weighted Average Common and Common Equivalent Shares Outstanding 42,067   37,623  
 
 
 
RECONCILIATION OF GAAP NET INCOME AND EARNINGS PER SHARE TO NET INCOME
BEFORE ACQUISITION RELATED COSTS AND EARNINGS PER SHARE BEFORE
ACQUISITION RELATED COSTS
(In thousands, except per share amounts)
(Unaudited)
 
Three Months Ended
June 30, 2012 (1)   June 30, 2011   March 31, 2012
Net income $ 8,515     $ 0.19 $ 5,865   $ 0.16 $ 5,383   $ 0.14
Non-recurring charges related to refinancing, net of income taxes 701 0.02
Acquisition expenses, net of income taxes 3,788   0.08   102   1,451   0.04
Net income before acquisition related costs $ 13,004   $ 0.28   $ 5,967   $ 0.16   $ 6,834   $ 0.18
 
Weighted Average Common and Common Equivalent Shares Outstanding 45,879   37,718   38,154  

 

 
  Six Months Ended
June 30, 2012   June 30, 2011
Net income $ 13,898     $ 0.33 $ 9,029   $ 0.24
Non-recurring charges related to refinancing, net of income taxes 701 0.02
Acquisition expenses, net of income taxes 5,239   0.12   418   0.01
Net income before acquisition related costs $ 19,838   $ 0.47   $ 9,447   $ 0.25
 
Weighted Average Common and Common Equivalent Shares Outstanding 42,067   37,623  
 

(1) Column does not foot due to rounding

 
 
 
RECONCILIATION OF ESTIMATED GAAP NET INCOME TO ESTIMATED NON-GAAP
EBITDA AND ADJUSTED EBITDA
(In thousands)
(Unaudited)
 
Estimated Range of Results
Quarter Ending
September 30, 2012
Net income $ 14,800     $ 16,500
Interest expense, net 6,300 6,300
Income tax provision 10,700 11,900
Depreciation and amortization 5,700   5,700
EBITDA 37,500 40,400
Equity-based compensation 2,800 2,800
Acquisition expenses 0   0
Adjusted EBITDA $ 40,300   $ 43,200
 
 
           
SUPPLEMENTAL FINANCIAL INFORMATION – REVENUES AND GROSS MARGINS
(Dollars in thousands)
(Unaudited)
 
 
Healthcare
Apex Oxford Life Sciences Allied Healthcare   Nurse Travel   Total Healthcare Physician Consolidated
Revenues:
Q2 2012 $ 99,004 $ 88,107 $ 40,509 $ 13,704 $ 16,823 $ 30,527 $ 25,039 $ 283,186
Q1 2012 $ 78,759 $ 41,351 $ 12,561 $ 10,318 $ 22,879 $ 24,089 $ 167,078
% Sequential change N/A 11.9 % (2.0)% 9.1 % 63.0 % 33.4 % 3.9 % 69.5 %
Q2 2011 $ 65,319 $ 39,626 $ 10,915 $ 10,821 $ 21,736 $ 17,002 $ 143,683
% Year-over-year change N/A 34.9 % 2.2 % 25.6 % 55.5 % 40.4 % 47.3 % 97.1 %
Gross margins:
Q2 2012 27.3 % 35.9 % 34.1 % 32.0 % 26.3 % 28.8 % 30.8 % 31.4 %
Q1 2012 34.8 % 33.5 % 32.2 % 22.3 % 27.7 % 31.1 % 32.9 %
Q2 2011 35.8 % 34.3 % 32.5 % 24.2 % 28.3 % 33.1 % 34.0 %
 
 
Average number of staffing consultants:  
Q2 2012 633 501 160 81 42 123 98 1,515
Q1 2012 488 169 78 41 119 95 871
Q2 2011 419 164 83 36 119 74 776
 
 
               
Healthcare
Apex Oxford Life Sciences Allied Healthcare     Nurse Travel     Total Healthcare Physician Consolidated  
Average number of customers:
Q2 2012 585 648 914     508 139   647 186 2,980
Q1 2012 625 918 478 120   598 175 2,316
Q2 2011 560 877 480 120 600 145 2,182
 
Top 10 customers as a percentage of revenue:
Q2 2012 33.3 %

(1)

16.4 % 23.3 % 24.6 % 23.3 % 17.3 % 19.8 % 17.5%

(1)

Q1 2012 15.6 % 22.6 % 25.6 % 36.0 % 21.2 % 22.0 % 9.2%
Q2 2011 13.5 % 21.2 % 21.3 % 34.6 % 20.8 % 22.9 % 7.8%

(1)  Top 10 customers as a percentage of revenue for Apex and Consolidated includes pro forma Apex Systems data for the quarter ended June 30, 2012.

 
 
Average bill rate:
Q2 2012 $ 59.1 $ 119.5 $ 35.2 $ 37.4 $ 68.5 $ 47.7 $ 175.1 $ 65.0
Q1 2012 $ 117.6 $ 34.9 $ 36.7 $ 69.3 $ 47.2 $ 175.6 $ 67.9
Q2 2011 $ 113.6 $ 35.6 $ 37.0 $ 67.8 $ 47.6 $ 182.9 $ 64.5
 
Gross profit per staffing consultants:
Q2 2012 $

43,000

(2)

 

$ 63,000 $ 86,000 $ 54,000 $ 105,000 $ 72,000 $ 79,000 $

59,000

(2)

Q1 2012 $ 56,000 $ 82,000 $ 52,000 $ 56,000 $ 53,000 $ 79,000 $ 63,000
Q2 2011 $ 56,000 $ 83,000 $ 43,000 $ 73,000 $ 52,000 $ 76,000 $ 63,000

(2) Actual, reported Apex and Consolidated metrics reflect six weeks of Apex data. A full quarter would have been $85,000 for Apex and $77,000 for Consolidated.

 
 
SUPPLEMENTAL FINANCIAL INFORMATION – KEY METRICS
(Unaudited)
 

Three Months Ended (3)

June 30,

2012

  March 31,

2012

Percentage of revenues:
Top ten clients 17.5 % 9.2 %
Direct hire/conversion 2.1 % 3.1 %
Bill rate:
% Sequential change (4.3 )% 1.9 %
% Year-over-year change 0.7 % 4.9 %
Bill/Pay spread:
% Sequential change (10.5 )% 2.3 %
% Year-over-year change (6.9 )% 4.9 %
Average headcount:
Contract professionals (CP) 11,462 4,941
Staffing consultants (SC) 1,515 871
Productivity:
Gross profit per SC $ 59,000

(4)

$ 63,000

(3) Information for the three months ended June 30, 2012 includes six weeks of Apex activity, whereas information for the three months ended March 31, 2012 does not include any Apex activity.

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