ASGN
#The answer is yes, and it has been longer than just the last three or four months.
Over the last 14 months, as our larger, more sophisticated customers become more reliant on our deployment delivery model staff aug and viewing it competitively against project consulting and offshoring, they have been deciding to spend more of their annual budgets on staff aug than offshoring, especially with the uncertainty of that immigration reform.
You've got to remember that these bills have been introduced both by the Democratic members of the House, as well as the Republicans, and so this is something they can probably agree to.
So what we've seen early on is, even before there's any change in the law, that certain customers are hedging their bets and not being as dependent on newer projects being executed on those deployment models versus domestic deployment models.
For the fourth quarter of 2017.
We said it exceeded the growth rate of this segment.
It was almost identical to what we said the Apex Systems was, which was about 15%.
We are anticipating or estimating 249.4 billable days.
And one thing I will point you to is, if you look at our recent investor presentations which you could find on our website, we actually do now have a page that shows that information.
Not only for the year but also by quarter.
I'm going to let <UNK> answer that more fully, but <UNK>, they have been all through 2016, engaging with us in a very productive way.
And I think we stated in our prepared remarks that the financial services grew double digits.
So <UNK>, what would you add.
I think you said it right.
It has been going on for a while, and they are spending money, good IT money to improve themselves, and we've been growing double digits for quite some time now.
Yes, I think for continued constructive execution of their budgets, I think that the budgets weren't constrained in 2016 the way they were in 2015, and the discussions we are having about 2017 are on a more normalized spend that isn't constrained because of outsized litigation expenses or settlements.
So yes, what we're trying to communicate, I apologize, is that we find the financial services industry to continue to be a productive area.
And, as you know, they are classically the fastest spenders and the biggest spenders on technology for our particular deployment model, staff augmentation.
About ---+ I think for the full year of 2016, it was about 11%.
And for 2017, I think it's steady-state unless we really have accelerated growth, which would be somewhere in the 5%, 6%, 7% range.
Well, if we could find it, which we will, but if we could find the right acquisition candidate, we would do that first.
Second, at this stage of our leverage and our cost of debt, which is going down again hopefully, it would be share repurchases.
And third, it would be the continued deleveraging of the business.
We balanced deleveraging and share repurchases through 2016, and we did both.
We could have just done share repurchases, but we elected to do both.
And I think because we did both, that put us in a position to continue to drive pricing of our debt down.
Is that possible, <UNK>.
Well, it's in the estimate.
I'm not sure I'm following, <UNK>y.
Because one of the things we include in our financial estimates is a range ---+
I guess he means by division.
We don't get that granular in the guidance, but I think <UNK>y, you should assume, but for the annual reset of taxes and but for lower contribution of perm placement versus the historical level, that we stick to our public statement that we think we are in a stable gross margin environment.
And, <UNK>y, the reset on payroll taxes we are estimating had ---+ it is going to have about a 1.2 percentage point of sequential impact on gross margin in Q1.
Versus a normalized Q4.
And so, if you normalize Q4, you would get roughly ---+ for the out of period, you get roughly [32.8].
From others.
<UNK> respond and then I will follow up.
So, <UNK>y, that unit has been growing a little slower although in line with the industry growth rates, both in the Apex segment and in the Oxford segment as it relates to life science skillsets.
So I guess if you are trying to put that in perspective of the rest of the business from an IP perspective, we are obviously seeing a lot more growth there, but I guess that's what we're seeing right now within the life science skillset.
Well, I'm going to let <UNK> address that, but what we are doing is not so novel that it's got a high risk of on execution.
This is some stuff that is best practices, and <UNK>, why don't you walk them through your expectations.
Yes, I think on the expense side, we will see that sooner, although that will be a smaller part of the total return in the future, the sales strategy, some small tweak there, as <UNK> put it, not wholesale change, if you will, but some tweaks around that will take a little bit longer to institutionalize and see the return on.
So I think the expense side over the next couple of quarters and on the sales side in the back half of the year and into 2018.
Yes, good question.
I think you should interpret it that we don't have any sort of change in economic activity just the way things are right now because of the results in 2016.
We would hope to be up low mid single digits year over year on an absolute basis.
The word we used was stability, yes.
And I would point out, again, <UNK>, as the year is now over, CyberCoders actually did an admirable job.
We had budgeted for them to be down on revenues and basically flat year over year on EBITDA, and they pretty much hit that budget.
And some of the changes that they have made and the hard work that they have done, I think that they can grow 3%, 4%, 6% this year.
Well, I don't mean this to sound defensive, but I think that what we've been trying to communicate on a very grounded basis is that we see a productive marketplace.
And based on my recollection, we've grown 1000 basis points faster than anybody else that has reported in this cycle organically.
So I point that out just to say we continue to believe because of our size and our positioning that we will continue to have very attractive growth prospects in 2017.
Now the spend in telecom and technology right now wasn't as strong as it was in financial services and health care and that may switch and probably will if there is some tax reform, but all-in-all, we feel fortunate that our positioning permits us to grow fairly significantly.
And we're excited about that opportunity to continue to grow.
No, no, no, I didn't take it that way.
I just ---+ I think it is lost that on a same billable day basis, this Company grew 9.8%.
Let me address it this way.
The only time we have really called out a vertical was in healthcare IT because of the stimulus dollars going away, and then in the financial services, we called out ebbs and flows in the third and fourth quarter of 2015.
But as it relates to spend and telecom and then technology, that may be just a collection of our customers and something like that.
But we feel good about the continued rate of adoption of staff augmentation vis-a-vis other delivery and deployment models.
We feel very good about our positioning, and we continue to believe that we can be a net market share gainer and grow ---+ even though we grew faster in 2016 than the statement discloses, we still think we can grow 200 to 300 basis points faster than the stated industry growth rate.
And if we continue to do that, we will create real value.
So we are feeling as if a company ---+ and it is operating in an industry that is relatively productive and healthy, and so it's our job to go execute.
Yes, the increases just give us greater flexibility.
The real change, which <UNK> is not apparent is, when we have an annual reset and we file our results with the banks that refreshes our restricted payment basket, so we have used a fair amount of our capacity to buy shares, and that has all gotten replenished and sent back down to levels where we could execute the remaining availability under the $150 million repurchase with the refresh of our baskets.
So yes, we have plenty of capacity.
And if we want to do an accelerated repurchase, we could draw on the revolver if we felt that was the most prudent thing to do.
So it was kind of on a GAAP EPS basis.
It was $0.10.
And on an adjusted EPS basis, it was about $0.09.
So based on my calculations, if you accept the adjustments, we would have reported about $0.73 versus $0.64 on an adjusted basis.
And on a ---+ earning on an absolute GAAP basis, we would have reported $0.55 versus $0.45, which is well above consensus, high end of analysts guidance, or at the high end of our range.
I think that's a real compliment to the divisional leadership.
The reason we have been able to grow 1000 basis points faster than others is because we were able to fill the orders ---+ find the people to fill the orders.
And so I think they've done an appropriate balance of sales and fulfillment.
And I think that has been a core competency of our Company and I think it will continue.
We greatly appreciate your attention and look forward to speaking to you on our first-quarter conference call.
