67 WALL STREET, New York - January 24, 2012 - The Wall Street Transcript has just published its Staffing & Outsourcing Services Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Workforce Flexibility Requirements - Stalwarts Look to Acquire Small Caps - Rich Industry Leaders to Acquire Small Cap Competitors - BPO & IT Outsourcing Reduce Labor Costs
Companies include: Accenture (ACN); Adecco (ADEN.VX); Alliance Data Systems (ADS); CGI Group (GIB); CSC (CSC); and many more.
In the following brief excerpt from the STAFFING & OUTSOURCING SERVICES Report expert analysts discuss the outlook for the sector and for investors.
Peter T. Dameris is President and Chief Executive Officer of On Assignment, Inc. Before joining On Assignment in November 2003, he served as Executive Vice President and Chief Operating Officer of Quanta Services from February 2001 to October 2002, at which time he resigned to pursue other interests. He was recruited by Quanta Services to provide succession planning for the CEO position. Previously, Mr. Dameris served as Chairman of the board, CEO and President of Metamor Worldwide, Inc., an international IT consulting company, after serving in other various capacities at Metamor, including Executive Vice President of Corporate Development and European Operations, General Counsel and Secretary. In March 2000, he negotiated the $1.9 billion sale of Metamor to PSINet, the Internet supercarrier.
TWST: Please start with a brief history and overview of the company.
Mr. Dameris: On Assignment (ASGN) is a professional staffing firm that's focused on math and science skills, and we typically focus on the highest skill sets within the verticals in which we participate that also garner the highest bill rates and gross margins. We've been in business for nearly three decades, and have grown from approximately $7 million in revenues to the current Wall Street projections of close to $600 million in 2011 and upward of $650 million in 2012. We haven't given full-year guidance for 2012, but about a year and a half ago, we stated that we developed a five-year strategic plan that we expected, based on 10% compounded annual growth and about $0.25 billion of acquired revenues, we could achieve $1 billion in revenues and $100 million of EBITDA by the end of that five years.
Currently, there are three and a half years left in that plan. We've been measuring against this goal, and are pleased to be able to state that as of the third quarter of 2011, we were well ahead of where we needed to be to achieve this goal based on the criteria that we set out for our investors. We think our strategy is right for our business and for our industry. There is a high demand for math and science skills - that's where our economy is going, meaning more knowledge based. So we feel that we are incredibly well positioned, and that's why our business grew organically around 30% in 2011. It was a year for professional staffing companies, and our business will continue to take advantage of the structural changes occurring in the U.S. labor market due to some of the mandated legislation that's coming out related to benefits, protections and costs that employers will now have to deal with. Right now, the staffing industry is experiencing more growth from structural and secular changes in the labor market versus classic cyclical growth because of recovery in GDP.
TWST: How much of the company's business is in the U.S. versus overseas?
Mr. Dameris: Approximately 88% of our business is in North America, and approximately 12% is in Europe.
TWST: Are you looking to change or add to your geographic presence?
Mr. Dameris: Not really. Relatively speaking, we're a very profitable business, but we're under $1 billion in sales. I believe that North America is a $115 billion end market, so we have plenty of growth opportunities in our current geographic areas. We're in Europe for some very specific reasons. As you know, we've been in the life science clinical research space for quite some time - you work for the multinational pharmaceutical companies, and they ask you to support them where they perform their trials and research, so we've elected to be available to meet these needs.
TWST: You mentioned plenty of growth opportunities. Do you expect that to be organic growth or through acquisition or a combination of both?
Mr. Dameris: Both. We've publicly stated that we think we can grow better than 10% compounded annually, but we also think we can do $50 million a year of top-line-acquired revenues without really stretching very hard. And we can fund most of these acquisition costs with internally generated cash.
The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.
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