On Assignment (NYSE: ASGN) reported Q1 EPS of $0.42, $0.15 worse than the analyst estimate of $0.57. Revenue for the quarter came in at $626.5 million versus the consensus estimate of $619.83 million.

GUIDANCE:

On Assignment sees Q2 2017 EPS of $0.70-$0.73, versus the consensus of $0.73. On Assignment sees Q2 2017 revenue of $650-660 million, versus the consensus of $648.46 million.

Financial Estimates for Q2 2017

On Assignment is providing financial estimates for the second quarter of 2017.

• Revenues of $650.0 million to $660.0 million
• Gross margin of 32.5 percent to 32.7 percent
• SG&A expense (excludes amortization of intangible assets) of $148.3 to $149.9 (includes $6.4 million in depreciation and $6.3 million in stock-based compensation expense)
• Amortization of intangible assets of $8.3 million
• Effective tax rate of 39 percent(1)
• Net income of $29.4 million to $31.3 million
• Earnings per diluted share of $0.55 to $0.59
• Diluted shares outstanding of 53.3 million
• Adjusted EBITDA (a non-GAAP measure) of $76.0 million to $79.0 million
• Adjusted Net Income(2) (a non-GAAP measure) of $37.3 million to $39.0 million
• Adjusted Net Income per diluted share(2) (a non-GAAP measure) of $0.70 to $0.73

First Quarter Highlights

• Revenues were $626.5 million, up 7.6 percent over the first quarter of 2016 (up 8.2 percent on a same \"Billable Day\" basis, a non-GAAP measure).
• Net income was $22.4 million ($0.42 per diluted share), up from $17.4 million ($0.32 per diluted share) in the first quarter of 2016.
• Adjusted EBITDA (a non-GAAP measure) was $64.6 million (10.3 percent of revenues), compared with $62.4 million (10.7 percent of revenues) in the first quarter of 2016.
• Operating results included the following items that were not in our previously announced estimates: (i) interest expense of $2.0 million ($1.2 million after tax, or $0.02 per diluted share) related to the amendment of the credit facility in February, (ii) acquisition, strategy and integration expenses of $0.9 million ($0.5 million after tax, or $0.01 per diluted share) and (iii) tax benefits of $1.1 million ($0.02 per diluted share) related to a change in accounting for the tax effect of equity-based compensation (tax effect of a higher tax than book deduction for equity-based compensation, which now is included in the calculation of the provision for income taxes for financial reporting purposes, whereas in prior periods it was treated as an adjustment to stockholders\' equity).
• Repurchased 228,831 shares for $10.1 million during the quarter, at an average per share price of $44.31.
• Since our $150 million repurchase authorization began in June 2016, we have purchased approximately 1.4 million shares for $53.2 million, at an average per share price of $39.07.
• Leverage ratio (a non-GAAP measure) was 2.21 to 1 at March 31, 2017, down from 2.32 to 1 at December 31, 2016.
• Amended credit facility on February 21, 2017, resulting in a 50 basis point reduction in the interest rate for the term B loan and the revolving credit facility was increased to $200.0 million, with its maturity date extended to February 21, 2022.

For earnings history and earnings-related data on On Assignment (ASGN) click here.