On Assignment, Inc. (NYSE: ASGN) (“On Assignment” or the “Company”) today announced the completion of its acquisition of CyberCoders Holdings, Inc. (“CyberCoders”), a leading technology-enabled national permanent placement recruiting firm. This closing follows the execution of the Stock Purchase Agreement between the parties on November 25, 2013 which was previously announced on Monday, December 2, 2013. “With CyberCoders as our newest division, On Assignment will be able to expand our activities in permanent placement staffing,” said Peter T. Dameris, President and Chief Executive Officer of On Assignment. “We will be able to better serve our customers with these expanded placement options.” Under terms of the Agreement, On Assignment acquired CyberCoders for $94 million in cash and up to an additional $11 million based on future operating performance. The purchase price was funded out of cash on hand and borrowings under the Company’s revolving credit facility. Estimated 2013 revenues for CyberCoders are $55 million with an EBITDA margin of approximately 25 percent. The inclusion of CyberCoders will increase the Company’s mix of permanent placement revenues to over 4.5 percent of consolidated revenues (currently at 1.7 percent) and result in an expansion of 175 to 200 basis points in consolidated gross margin and 50 basis points in Adjusted EBITDA margin (a non-GAAP term defined below). The Company believes CyberCoders’ growth rate in 2014 will be in the high teens. “We are thrilled to be joining On Assignment,” said Heidi Golledge, CEO and founder of CyberCoders. “On Assignment has a proven track record of partnering with great companies and providing them with the support needed to help them grow and thrive.” CyberCoders will become a division of On Assignment and continue to operate under the CyberCoders brand name. Heidi Golledge and Matt Miller, Chief Technology Officer, will continue to oversee the day-to-day operations of the business. Golledge will report to On Assignment’s Chief Operating Officer Michael McGowan.
In connection with the acquisition, On Assignment granted Ms. Golledge a restricted stock unit award covering 15,000 shares of On Assignment’s common stock, and other members of the management team received an aggregate of 35,000 restricted stock units. The restricted stock unit awards will vest, subject to continued service, with respect to 50% of the units on the second anniversary of the grant date, and with respect to the remaining units, over the following two years in substantially equal quarterly installments. The restricted stock unit award for Ms. Golledge will be granted as an employment inducement award pursuant to the NYSE rules.“We believe all business lines will benefit from the new cross-selling opportunities,” Dameris said. “We are excited to welcome the talented team at CyberCoders to the On Assignment family.” About On Assignment On Assignment, Inc. (NYSE: ASGN), is a leading global provider of in-demand, skilled professionals in the growing technology, healthcare and life sciences 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 their 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 was founded in 1985 and went public in 1992. The Company, which is headquartered in Calabasas, California, operates through a network of approximately 130 branch offices throughout the United States, Canada, United Kingdom, the Netherlands, Ireland and Belgium. Additionally, physician placements are made in Australia and New Zealand. To learn more, visit http://www.onassignment.com . About CyberCoders Founded in 1999, CyberCoders believes in the passionate pursuit of the right candidate for the right job and recruits professionals for all types of jobs including engineering, technology, sales, executive, financial, accounting, scientific, legal and operational positions across all industries. For more information, visit www.CyberCoders.com. Reasons for Presentation of Non-GAAP Financial Measures Statements in this release 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 GAAP, and is intended to enhance an overall understanding of our current financial 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 identifiable intangible assets), other terms include Adjusted EBITDA (EBITDA plus equity-based compensation expense, impairment charges, write-off of loan fees, acquisition-related expenses and strategic planning costs) and Non-GAAP Income from Continuing Operations (Income from continuing operations, plus acquisition-related expenses, deferred financing fees written-off and strategic planning costs, 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 reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure.
Safe HarborCertain 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 2013. 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 (including pro forma) 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, the integration and operation of our acquired businesses, 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, 2012, as filed with the SEC on March 18, 2013, our report on Form 8-K filed with the SEC on June 13, 2013, and our Forms 10-Q for the quarterly periods ended March 31, 2013, June 30, 2013 and September 30, 2013 as filed with the SEC on May 9, 2013, August 2, 2013, and November 5, 2013, respectively. We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release.