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On Assignment Reports Results For Fourth Quarter 2012

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 Forms 10-Q for the quarterly periods ended March 31, 2012, June 30, 2012 and September 30, 2012 as filed with the SEC on May 9, 2012, July 30, 2012 and November 8, 2012, respectively. 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 Year Ended
December 31,     September 30, December 31,
2012   2011   2012 2012   2011
 
Revenues $ 401,659 $ 161,790 $ 388,283 $ 1,239,705 $ 597,281
Cost of services   280,377     108,161     269,244     855,382     397,176  
Gross profit 121,282 53,629 119,039 384,323 200,105
Selling, general and

administrative expenses

82,743 39,447 79,223 273,528 153,360
Amortization of intangible

assets

  11,857     713     3,320     18,016     2,346  
 
Operating income 26,682 13,469 36,496 92,779 44,399
Interest expense (5,947 ) (711 ) (6,317 ) (17,872 ) (2,975 )
Interest income   10       33     49     39  
Income before income

taxes

20,745 12,758 30,212 74,956 41,463
Provision for income taxes   9,423     5,257     12,779     32,303     17,166  
Net income $ 11,322   $ 7,501   $ 17,433   $ 42,653   $ 24,297  
Earnings per share:
Basic $ 0.22   $ 0.20   $ 0.33   $ 0.91   $ 0.66  
Diluted $ 0.21   $ 0.20   $ 0.33   $ 0.89   $ 0.64  
Number of shares and

share equivalents used to

calculate earnings per

share:

Basic   52,581     36,903     52,131     46,739     36,876  
Diluted   53,680     37,773     53,162     47,826     37,758  
 
 
     
 

SUPPLEMENTAL SEGMENT FINANCIAL INFORMATION (Unaudited)

(In thousands)

 
Three Months Ended Year Ended
December 31,   September 30, December 31,
2012   2011 2012 2012   2011
Revenues:
Technology –
Apex $ 207,576 $ ― $ 202,664 $ 508,743 $ ―
Oxford   90,410   71,230   88,104   345,380   266,742
297,986 71,230 290,768 854,123 266,742
 
Life Sciences 40,293 40,921 40,646 162,799 155,324
Healthcare 37,308 25,927 29,390 120,104 94,598
Physician   26,072   23,712   27,479   102,679   80,617
$ 401,659 $ 161,790 $ 388,283 $ 1,239,705 $ 597,281
 
Gross profit:
Technology –
Apex $ 56,752 $ ― $ 56,934 $ 140,669 $ ―
Oxford   31,777   25,484   31,250   122,043   94,967
88,529 25,484 88,184 262,712 94,967
 
Life Sciences 14,225 13,618 14,002 55,874 52,643
Healthcare 10,660 7,395 8,483 34,282 26,637
Physician   7,868   7,132   8,370   31,455   25,858
$ 121,282 $ 53,629 $ 119,039 $ 384,323 $ 200,105
 
 
     
 

SELECTED CASH FLOW INFORMATION (Unaudited)

(In thousands)

 
Three Months Ended Year Ended
December 31,   September 30, December 31,
2012   2011 2012 2012   2011
Cash (used in) provided

by operations

$ 26,059 $ 8,365 $ 23,531 $ 40,698 $ 23,419
Capital expenditures $ 3,471 $ 2,365 $ 3,712 $ 14,354 $ 8,411
 
     

SELECTED CONSOLIDATED BALANCE SHEET DATA (Unaudited)

(In thousands)

 
December 31, September 30,
2012   2011 2012
Cash and cash equivalents $ 27,479 $ 17,739 $ 13,873
Accounts receivable, net 243,003 93,925 247,731
Goodwill and intangible assets, net 763,239 259,440 772,598
Total assets 1,099,064 410,665 1,098,935
Current portion of long-term debt 10,000 5,000 10,000
Total current liabilities 119,770 56,409 129,480
Working capital 173,987 74,705 155,414
Long-term debt 416,588 81,750 429,088
Other long-term liabilities 29,983 25,763 23,912
Stockholders’ equity 532,723 246,743 516,455
 
 
   
 

RECONCILIATION OF GAAP NET INCOME AND EARNINGS PER SHARE TO NON-GAAP ADJUSTED EBITDA AND ADJUSTED EBITDA PER DILUTED SHARE (Unaudited)

(In thousands, except per share amounts)

 
Three Months Ended
December 31,   September 30,
2012   2011 2012
Net income $ 11,322   $ 0.21 $ 7,501   $ 0.20 $ 17,433   $ 0.33
Interest expense, net 5,937 0.11 711 0.02 6,284 0.12
Provision for income taxes 9,423 0.18 5,257 0.14 12,779 0.24
Depreciation 1,860 0.03 1,594 0.04 1,817 0.03
Amortization of intangibles   11,857   0.22   713   0.02   3,320   0.06
EBITDA 40,399 0.75 15,776 0.42 41,633 0.78
Equity-based compensation 3,132 0.06 1,843 0.05 3,075 0.06
Acquisition-related costs   730   0.01   64   0.00   784   0.01
Adjusted EBITDA $ 44,261 $ 0.82 $ 17,683 $ 0.47 $ 45,492 $ 0.86 (1 )
 

Weighted average common and common equivalent shares outstanding (diluted)

  53,680   37,773   53,162
 
      Year Ended
December 31,
2012       2011
Net income $ 42,653     $ 0.89 $ 24,297     $ 0.64
Interest expense, net 17,823 0.37 2,936 0.08
Provision for income taxes 32,303 0.68 17,166 0.45
Depreciation 6,686 0.14 6,505 0.17
Amortization of intangibles   18,016   0.38   2,346   0.06
EBITDA 117,481 2.46 53,250 1.41
Equity-based compensation 9,706 0.20 6,927 0.18
Acquisition-related costs   10,568   0.22   1,056   0.03
Adjusted EBITDA $ 137,755 $ 2.88 $ 61,233 $ 1.62 (1 )
 

Weighted average common

and common equivalent

shares outstanding (diluted)

  47,826   37,758

_______

(1) Does not foot due to rounding

 
 
   
 

RECONCILIATION OF GAAP NET INCOME AND EARNINGS PER SHARE TO NET INCOME BEFORE ACQUISITION-RELATED COSTS AND EARNINGS PER SHARE BEFORE ACQUISITION-RELATED COSTS (Unaudited)

(In thousands, except per share amounts)

 
Three Months Ended
December 31,   September 30,
2012   2011 2012
Net income $ 11,322   $ 0.21 $ 7,501   $ 0.20 $ 17,433   $ 0.33
Acquisition-related costs, net of income taxes   126   38   0.00   649   0.01
Net income before

acquisition-related costs

$ 11,448 $ 0.21 $ 7,539 $ 0.20 $ 18,082 $ 0.34
 

Weighted average common and common equivalent shares outstanding (diluted)

  53,680

 

  37,773   53,162

 

 
    Year Ended
December 31,
2012   2011
Net income $ 42,653   $ 0.89 $ 24,297   $ 0.64
Non-recurring charges related to refinancing, net of income taxes 701 0.01
Acquisition-related costs, net of income taxes   6,014   0.13   605   0.02
Net income before acquisition-related costs $ 49,368 $ 1.03 $ 24,902 $ 0.66
 

Weighted average common and common equivalent shares outstanding (diluted)

  47,826

 

  37,758
 
 
                   
 

SUPPLEMENTAL FINANCIAL INFORMATION – REVENUES AND GROSS MARGINS (Unaudited)

(Dollars in thousands)

 
 
Technology Healthcare
Apex     Oxford     Total Life Sciences Allied Healthcare     Nurse Travel     Total Physician Consolidated
Revenues:
Q4 2012 $ 207,576 $ 90,410 $ 297,986 $ 40,293 $ 16,056 $ 21,252 $ 37,308 $ 26,072 $ 401,659
Q3 2012 $ 202,664 $ 88,104 $ 290,768 $ 40,646 $ 15,594 $ 13,796 $ 29,390 $ 27,479 $ 388,283
% Sequential change 2.4 % 2.6 % 2.5 % (0.9 %) 3.0 % 54.0 % 26.9 % (5.1 %) 3.4 %
Q4 2011 $ 71,230 $ 71,230 $ 40,921 $ 12,166 $ 13,761 $ 25,927 $ 23,712 $ 161,790
% Year-over-year change 26.9 % N/M (1.5 %) 32.0 % 54.4 % 43.9 % 10.0 % 148.3 %
 
Gross margins:
Q4 2012 27.3 % 35.1 % 29.7 % 35.3 % 31.2 % 26.6 % 28.6 % 30.2 % 30.2 %
Q3 2012 28.1 % 35.5 % 30.3 % 34.4 % 32.5 % 24.8 % 28.9 % 30.5 % 30.7 %
Q4 2011 35.8 % 35.8 % 33.3 % 32.2 % 25.3 % 28.5 % 30.1 % 33.1 %
 
Average number of staffing consultants:
Q4 2012 658 547 1,205 178 86 45 131 108 1,622
Q3 2012 650 512 1,162 166 83 42 125 103 1,556
Q4 2011 478 478 167 78 37 115 95 855
_______
N/M – not meaningful
 
 
                   
 

SUPPLEMENTAL FINANCIAL INFORMATION – KEY METRICS (Unaudited)

 
Technology Healthcare
Apex     Oxford     Total Life Sciences Allied Healthcare     Nurse Travel     Total Physician Consolidated
Average number of customers:
Q4 2012 606 651 1,257 934 519 131 650 180 3,021
Q3 2012 607 650 1,257 928 529 142 671 194 3,050
Q4 2011 606 606 945 493 128 621 171 2,343
 
Top 10 customers as a percentage of revenue:
Q4 2012 34.4 % 15.8 % 24.7 % 23.3 % 30.6 % 30.6 % 24.3 % 22.1 % 18.3 %
Q3 2012 33.2 % 15.5 % 23.5 % 22.6 % 29.4 % 34.7 % 23.4 % 19.2 % 17.6 %
Q4 2011 13.8 % 13.8 % 23.0 % 24.4 % 30.7 % 20.3 % 23.7 % 8.3 %
 
Average bill rate:
Q4 2012 $ 58.7 $ 122.2 $ 69.5 $ 35.1 $ 37.5 $ 67.8 $ 47.4 $ 184.6 $ 63.6
Q3 2012 $ 59.1 $ 120.2 $ 69.4 $ 35.2 $ 37.2 $ 68.3 $ 46.7 $ 181.6 $ 63.5
Q4 2011 $ 116.3 $ 116.3 $ 35.1 $ 35.7 $ 71.3 $ 47.4 $ 179.0 $ 66.7
 
Gross profit per staffing consultants:
Q4 2012 $ 86,000 $ 58,000 $ 73,000 $ 80,000 $ 58,000 $ 126,000 $ 82,000 $ 73,000 $ 75,000
Q3 2012 $ 88,000 $ 61,000 $ 76,000 $ 84,000 $ 61,000 $ 81,000 $ 68,000 $ 82,000 $ 76,000
Q4 2011 $ 53,000 $ 53,000 $ 82,000 $ 50,000 $ 93,000 $ 64,000 $ 75,000 $ 63,000
 
 
   
 

SUPPLEMENTAL FINANCIAL INFORMATION – KEY METRICS (Unaudited)

 
 
Three Months Ended
December 31,

2012

    September 30,

2012

Percentage of revenues:
Top ten clients 18.3 % 17.6 %
Direct hire/conversion 1.7 % 1.9 %
 
Bill rate:
% Sequential change 0.1 % (2.2 %)
% Year-over-year change (4.6 %) (3.2 %)
 
Bill/Pay spread:
% Sequential change (0.2 %) (4.7 %)
% Year-over-year change (12.9 %) (12.0 %)
 
Average headcount:
Contract professionals (CP) 11,987 11,871
Staffing consultants (SC) 1,622 1,556
 
Productivity:
Gross profit per SC $ 75,000 $ 76,000
 




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