On Assignment, Inc. (NYSE: ASGN), a leading global provider of diversified professional staffing solutions, today reported results for the quarter ended September 30, 2013.
Third Quarter Highlights
- Revenues were $432.2 million, up 15.4 percent year-over-year and 3.4 percent sequentially.
- Gross margin was 30.2 percent, up from 29.8 percent in the preceding quarter.
- Income from continuing operations was $20.2 million ($0.37 per diluted share), up from $14.7 million ($0.28 per diluted share) in the third quarter of 2012.
- Adjusted income from continuing operations (a non-GAAP measure set forth in the table below) was $28.5 million ($0.52 per diluted share).
- Adjusted EBITDA (a non-GAAP measure defined below) was $48.8 million, up from $43.8 million in third quarter of 2012.
- Percentage of gross profit converted into Adjusted EBITDA was 37.4 percent, up from 35.5 percent in second quarter of 2013.
- Leverage ratio (total indebtedness to trailing twelve months Adjusted EBITDA) was 2.16 to 1, down from 2.88 to 1 at December 31, 2012.
Commenting on the results, Peter Dameris, President and Chief Executive Officer of On Assignment, Inc., said, “We reported a very strong quarter. Revenues, gross margin, EPS and Adjusted EBITDA were at or above the high-end of our estimates. We continued to improve our operating leverage as evidenced by the percentage of gross profit converted into Adjusted EBITDA. Our conversion of gross profit into Adjusted EBITDA for the quarter was 37.4 percent, up from 35.5 percent in the second quarter of 2013.”
“Our strong revenue growth for the quarter was mainly driven by our IT businesses, Apex Systems and Oxford, which account for approximately 80 percent of our operations. Revenues from our IT businesses grew 19.1 percent year-over-year and 3.4 percent sequentially. In that sector of the market, we are the second largest provider of staffing services and we continue to grow faster than the overall market reflecting the benefit of our scale and operating models. We also continue to believe we are benefiting from a shift in spending toward IT staffing and away from other IT services delivery models, such as consulting and offshoring, as CIOs continue to focus sharply on project flexibility and accountability and cost control.”