Ladies and gentlemen, good afternoon. Thank you for standing by, and welcome to the On Assignment Fourth Quarter 2015 Earnings Conference Call. At this time, all lines are in a listen-only mode. Later, there will be an opportunity for your questions and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference is being recorded. I would now like to turn the conference over to our host Chief Financial Officer, Mr. Ed Pierce. Please go ahead.

Good afternoon and thank you for your time today. Before we get started, I'd like to remind everyone that our presentation contains forward-looking statements, representing our current judgment for what the future holds. Although we believe these statements are reasonable, they are subject to risk and uncertainties and our actual results could differ materially from those statements, some of the risks and uncertainties are described in today's press release and in our SEC filings. We do not assume the obligation to update statements made on this call. Please note that on this call we'll be making reference to pro forma and constant currency information. Pro forma data assume the acquisition of Creative Circle and a small European Life Sciences business occurred at the beginning of 2014. Constant currency data were calculated using the foreign exchange rates in effect during the fourth quarter of 2014. I would now like to introduce Peter Dameris, our CEO and President, who will provide an overview of our results for the quarter. Peter?

Thank you, Ed. Good afternoon. I would like to welcome everyone to the On Assignment 2015 fourth quarter earnings conference call. With Ed and me today are Rand Blazer, President of Apex Systems; Mike McGowan, COO of On Assignment and President of Oxford Global Resources; and Ted Hanson, Executive Vice President of On Assignment. During our call today, I'll give a review of the markets we serve and our operational highlights, followed by a discussion of the performance of our operating segments by Rand and Mike. I will then turn the call over to Ed for a more detailed review and discussion of our fourth quarter results, and our estimates for the first quarter of 2016. We will then open the call up for questions. Now onto the fourth quarter results. Revenues in the fourth quarter were $577.5 million, up 30.9% year-over-year, 31.7% on a constant currency basis. Revenues, excluding the contribution of $77.4 million from acquisitions, were up 13.4% to $500 million and one, and up 14% to $502.9 million on a constant currency basis. Revenues generated outside the United States were $25.1 million or 4.4% of consolidated revenues for the fourth quarter versus $20.6 million or 4.7% in the fourth quarter of 2014. The fourth quarter represents the third consecutive quarter of accelerating revenue growth. Our size and service offerings once again permitted us to grow faster than the published staffing industry growth rate of 6%. Despite there being 2.3 fewer billable days, and the normal holiday seasonal effects on hours worked by our billable consultants, we were able to grow revenues sequentially, 4.8% on a same number of billable day basis versus the immediate prior quarter. For the fourth quarter, adjusted income from continuing operations, adjusted EBITDA and conversion of gross profit to adjusted EBITDA results were…

Great. Thank you, Peter. The Apex Segment, which consists of the Apex Systems, Lab Support, and Creative Circle business units reported strong results for the quarter. Revenues for this segment were $433 million, up 17.4% year-over-year on a pro forma basis. Revenues from Apex Systems, which accounts for 74.3% of the segment’s revenues, were up 17.5% year-over-year. This performance reflects among other things, higher demand in our end markets and improved productivity from our sales consultants, including the contribution from headcount added during the hiring surges of the past year. Lab Support's results were in line with our estimates, and up from the growth rates of the previous three quarters. Creative Circle, which was acquired on June 5, 2015, reported revenues of $74.6 million, which exceeded our revenue targets and the revenue levels in the previous three quarters. On a pro forma basis, Creative Circle's growth rate for the quarter was 22.4%. Our gross margin for this segment was 30.4%, which was in line with our estimates and down slightly 20 basis points from the preceding quarter. Our segments contribution in terms of divisional EBITDA was very strong with solid conversion of gross profit to EBITDA in this segment, as Peter has already mentioned. With respect to Apex Systems, our IT staffing division, revenue growth was propelled by a number of factors, including: first, double-digit Q4 revenue growth on a year-over-year basis in our accounts in six of the seven industry verticals we service and a return to slightly positive growth year-over-year in the seventh industry we service, the government industry set of accounts. Apex local branch mid-market business momentum continued with increasing double-digit revenue growth rates in Q4. Number three, our sales force productivity grew nicely in the quarter with the surge hires now firmly in their assigned markets and producing sales at higher levels. Growth in our top accounts showed continued revenue acceleration in the quarter, although a number of top accounts continuing to lag behind in revenue growth on a year-over-year basis. Our Lab Support and Creative Circle units are also seeing continued good opportunities for growth with a market for creative marketing skills particularly strong. Our Creative Circle unit is performing well at all levels now, six months into the acquisition. Overall, the Apex Segment had a solid quarter with quarterly revenue continuing its growth acceleration on a year-over-year basis, with each of its business units contributing to revenue growth, to stable gross margins and strong conversion of gross profit to divisional EBITDA. I'll now turn the call over to Mike McGowan to discuss the results of our Oxford segment. Mike?

Thanks, Ran. The Oxford segment includes Oxford, CyberCoders, our perm placement business, and Life Sciences Europe. The segment had revenues of $144.5 million for the fourth quarter of 2015, up 8.4% year-over-year. On a constant currency basis, revenues would have been $3.2 million higher and our growth rate would have been 10.8%. Gross margin for the quarter increased to 42.5%, up from 41.5% in the preceding quarter, and 41% in the year ago period on a pro forma basis. Oxford's revenue for the fourth quarter was $109.3 million, up 3.9% year-over-year, and 5.5% on a constant currency basis. Oxford's gross margin improved in quarter four; increasing to 32.9%, up from 32.4% in the preceding quarter. Oxford experience continued consolidated year-over-year growth throughout 2015. This improvement was driven by growth in our key accounts, continued sharp focus on assigning consultants within our targeted skill disciplines, increased demand for EMR implementations, upgrades and optimization projects, and ongoing demand for coding and consulting services. Our segments permanent placement revenues grew 38.4% year-over-year to $22.2 million, and was driven by increases in recruiting staff, and newly implemented training programs for new and experienced staff. We continue to invest in new technology that will more efficiently identify and match relevant candidates to our open job orders. The Oxford segment's European revenues were $22.7 million in the fourth quarter of 2015, up 13% year-over-year, or 28.9% on a constant currency basis. Revenues for the fourth quarter of 2015 include $2.8 million in revenues from the second quarter acquisition that Ed mentioned earlier. The segment's consolidated revenue growth was the result of strong year-over-year growth in all of our business units, and based on recent production activity, our expectation is for continued growth throughout the first quarter of 2016. I will now turn the call over to Ed Pierce. Ed?

Thank you, Mike. As Peter mentioned, our operating results for the quarter were above the high end of our previously announced estimates. Revenues for the quarter were $577.5 million, up 14.4% year-over-year on a pro forma basis. If you exclude the contribution of the two businesses that we acquired in the second quarter, our revenues were up 13.4% year-over-year, and up 14% on a constant currency basis. On a reported basis, our contract revenues were $544.9 million, up from $420.9 million in the fourth quarter of last year. Our direct hire and conversion revenues were $32.6 million, and accounted for 5.7% of total revenues, up from 4.6% of total revenues in Q4 of last year. Our gross margin for the quarter was 33.4%, which was above our previously announced financial estimates and slightly down sequentially. SG&A expenses were $138.8 million or 24% of revenues. SG&A for the quarter included $5 million in acquisition, integration, and strategic planning expenses of which $2.1 million related to an increase in the estimated earn-out obligations for CyberCoders and Creative Circle, and the remainder primarily related to the cost of integrating various divisions onto Oxford's operating and back office platform. Excuse me. SG&A also included $2 million to $2.5 million of expense related to the increase in sales consultants and recruiters added during the second half of 2015. And if you exclude Creative Circle, the average number of sales, consultants and recruiters for the quarter was 2,058, up from 1,811 in the fourth quarter of 2014. The effective tax rate was 43.2% for the quarter, and 41.4% for the full-year. The higher rate for the quarter, primarily related to the increase in the earn-out obligation for CyberCoders, which is not deductible for income tax purposes. Adjusted income from continuing operations for the quarter was $40.6…

Thank you, Ed. We continue to believe that we are well positioned to take advantage of what we believe will be historic secular growth for the staffing industry and dynamic changes in the technology world as it moves more into the digital world. While the entire On Assignment team is very proud of our performance, we remain focused on continuing profitably grow our business and increase our rate of growth. We'd like to once again thank our many loyal, dedicated and talented employees, whose efforts have allowed us to progress to where we are today. I would like to now open the call up to participants for questions. Operator?

Thank you. [Operator Instructions] Our first question today comes from the line of Kevin McVeigh with Macquarie. Please go ahead.

Great, thanks. Hey, congratulations on the results. Hey, Peter, it looks like you’ve really been outpacing the industry in terms of revenue growth relative to where the industry is in Q4. How much of that’s kind of related to the hiring surge and are all of those new hires? Are they scaled now or would you expect continued momentum as we work our way through Q1?

Thank you. First of all, they’re not all productive or to maximum productivity. We’re working to that level, but we still have a lot of opportunity within the base of the new hires and our existing hires, for that matter as we provide them, later productivity tools, new wins of large accounts that we could penetrate and get greater market share, our customer dollar spend. I think what’s really driving it; Kevin is that, we’re in the second largest in the industry; adoption of staff augmentation is healthy and good. And there are only so many companies that can really respond to a certain scale and size projects, and we’re one of them. And we’re lucky that we were probably the first to scale up on employees that are facing customers and recruiters that can build those orders quickly, and we’re benefiting from that and we continue to believe that we’ll benefit from that going into 2016. I mean we’re lucky that our EBITDA margin is 12%. We’re growing our EBITDA twice as fast as the industry growth rates – industry revenue growth rate of 6%. But more importantly, we’ve been able to get ahead of the pack on hiring and I just think it’s going to be harder for people to try to keep up with the hiring pace that we have as their revenues decline or the revenue growth rate decline. So we think we’re in a competitive position right now to continue to gain market share.

Got it. And then just real quick Peter, the revenue, the adjusted EBITDA looks really strong relative to the street EPS. Is there anything kind of in the EPS line in the tax rate or any other nuances that kind of – could EPS relative to where the street was we may have just missed milder, but the revenue beat, the EBITDA beat, anything on the kind of below that that would impact their earnings?

I can’t respond to that off the cuff. I’d say reach out to adding, you can check your model, but the truest measurement of profitability in my mind is EBITDA. And you have the normal kind of decline in the EBITDA margin because of the payroll tax reset, but all-in-all, which is about $5 million. All-in-all, we feel pretty solid about what’s going on.

Awesome.

One second, one second. Ed want to correct something, I miss that.

Okay.

Well, I was just going to mention that, if you look at it as – it depends on how you’re looking at the EPS, whether you’re looking on a GAAP or an adjusted income basis. And on a GAAP basis, as we mentioned in the script, we had $5 billion of acquisition related expenses, which we don’t know – we do not include in the estimates that we gave at the beginning of the quarter. So, if you take that into your account, I think that would probably explain the gap that you’re talking about.

That was more, Ed, for Q1, but I’ll follow-up with you offline. I mean, I’m sure, just record selling items. Thanks again.

Okay.

[Operator Instructions] Our next question, we’ll go to the line of Gary Bisbee with RBC Capital Markets. Please go ahead.

Hey, guys. Congratulations on the results. That it’s nice to see some results that show the staffing world is not ending, like it seems like investors have felt like at any rate, a couple of other questions. Obviously, the hiring has been greatly helpful. Are you seeing any signs at all within any box of the business of either deceleration or slower decision-making from customers or a sense that projects are being consolidated or pushed off or it’s really been not much change other than your internal – how you’ve executed in those hires in the last few months? Thanks.

Gary, I’ll start with just an overarching response, and then, allow Rand and Mike adding color that they want to. But look, we’re not predicting that the economy is not going to face a recession in 2016. What we’re trying to do is give our shareholders a view of what we’re seeing in our business and how we’re facing the marketplace and outside a normal ebbs and flows. The purchasing behavior of our customers is still good, and good enough to permit us to grow an estimated 12% in the first quarter, which is pretty on the size of revenues we have, pretty solid performance, considering what the market – stock market has been doing, and what some people believe the economy may be doing. So, our assignments tend to last anywhere from eight months to 13 months. Our business model gives us a view of the real-time, meaning orders we get today will be filling in five days to six days, and we haven’t seen a slowdown in that order – that order book. And then we have longer extended orders where it maybe two weeks to four weeks before the order starts in. And so that gives us a further outlook into the future and we haven’t seen that order book change a lot. But, with that said, we’re giving you a measurement of how the business is doing, and it feels as if under the current conditions that there hasn’t been a wholesale change with regard utilization of contract labor. Brian, why don’t you go first and then, Mike follow-up with anything you’d like to add.

Well, I think, what you said is great. Gray, listen, I know there is an emphasis here on the hiring surge we went through put more feet on the street if you will. But the real route of growth comes from our accounts and the portfolio of accounts that we’ve cultivated in the industry verticals that we’ve selected and targeted. So, it just so happens, that are set of accounts or portfolio of accounts is performing pretty well. And we’ve said that a couple of quarters to go when there was a different trend, if you will, going on. But, I think building that right portfolio of accounts and providing resources and the skills that are in demand is a key part of this. By the way, we’ve also added feet on the street to attack and continue to build that portfolio of accounts. So far it’s steady as we go.

And I would agree with Gary with what Rand has said and also what Peter has said. The only – the difference being is for the expert side of the business is the skill. So, as Rand talked about the portfolio of accounts, we have our portfolio of skills and we have chosen as of right now those skills that are still in demand and we’re still seeing, as Peter mentioned, that same demand and same fill ratios and all that kind of thing that we’ve been seeing now for quite some time. Other than that I have not much more to say.

And then just one last quick one, I guess, an update on pricing. It looks like bill rate and bill pay spreads soften a bit. Is that more mix than anything else or is that?

That is…

Okay.

Garry, that is exactly it – it’s a mix. We put as you – you’ll note that we put a new footnote on that page because that data is not as relevant because we’re reporting it on a consolidated basis. But as you can tell from our gross margins, which is a more pertinent measurement, we’re not – things maybe moving around with pricing on skill sets and maybe scarcity of resource, but for the most part, we’re not seeing margin compression.

Right, thank you.

You bet.

Our next question today comes from the line of Edward Caso with Wells Fargo. Please go ahead, sir.

Hi, good afternoon and congrats on the numbers. On a recent trip I had in India, I saw an uptick in use of the captive operations of the big clients and particularly for the sort of more newer innovation work. And I was wondering if that – if you’re seeing any of that as opposed to using say Oxford resources?

Well no to be honest with you, Ed. What we’re seeing is actually Oxford’s older adoption technologies are the ones that are growing the slowest and that’s what’s causing their growth rate not to keep pace with like a Creative Circle to be honest with you. So the newer adoption technologies, the digital technologies, the regulatory affairs, the health information management, healthcare IT, those are growing faster than some of the legacy skill sets.

And curious on the tax rate guide seems to be lower than what it is, 39.5%, it was 40% and change this year. Any reason for the lower estimated tax rate and should we assume that 39.5% is the run rate for next year?

Yes. I think the – you should assume that 39.5% for 2016. Just a couple of things, Ed, one is, we had some sort of nonrecurring items firmly differences that flowed through some in Q4 and some earlier in the year. And so that caused an artificial spike in the effective tax rate. So, if you take those things out, normalized rate on an ongoing basis, it should be pretty close to 30 – 39.5%. We’ve done a lot of work over the last year or so, trying to reorganizations and the like to try to reduce our effective tax rate. And I think we’re going to see the benefits of that in this coming year.

Great, thank you.

Our next question today comes from the line of Paul Ginocchio with Deutsche Bank. Please go ahead.

Paul?

Mr. Ginocchio, can you hear us?

Sorry, sorry, I was on mute. Sorry. This is Ato Garrett on for Paul Ginocchio.

Please go ahead.

Look like SG&A, we’re going to look like SG&A as a percent of rev; it looks like there’s a little bit of an uptick in the fourth quarter and along with the guidance. So I’m just curious if you’re making further investments and along the lines of that hiring surge, or if there is something else happening?

So, a couple of explanations, one as we continue to hire throughout the quarter, because our results were strong and we saw good forward demand. But also, our bonus accruals were higher because of higher performance, and our commissions were higher because of higher performance.

Okay, great. Thank you.

You bet.

Our next question will come from the line of Tobey Sommer representing SunTrust. Please go ahead.

Thank you. So, Peter, when you look at the Life Sciences business that kind of has – can give you insight into cyclical trends. Is that telling you that the things are status quo that kind of the deep goes on?

It does, Tobey, because we’ve accelerated that growth rate, and it’s growing, if you look at SIA, kind of double the SIA growth rate. So, it’s not flashing any sort of early indicator now, maybe that’s because of the hard work that Ted, and Rand and David Lee and the whole Apex team has done to get them into a more large customer account base, but the revenue growth trends aren’t flashing any indicators to us yet.

Okay. I wanted to ask you about, I guess, the lower tax rate. Is that a function of various integration efforts, it seems like over the last couple of years, you have stitched together the segments and kind of done some heavy lifting on the back office as well. Are there any other kind of tangible effects that we should look for above the tax line in 2016 from those efforts?

No. I think most of all you’re talking about the restructuring things that have occurred really were done to effectuate reduction and the effective tax rate. The other thing that we’re benefiting from is the WOTC credit, which we’re now able to factor in on the front-end in terms of the estimated rate for the full-year 2016.

I would just add, Tobey, I don’t know if we have the numbers, not real significant. But that was something that we were not pursuing as aggressively and as successfully as someone like Robert have and we put more attention to it and we’re getting a bigger net tax credit on that.

Okay. And then, you talked about the effective the mix of skills on some of the metrics. When you look at your orders in kind of the areas where you’re seeing growth, does that give you any indication as to whether the mix is kind of forecasted to stay the same or is it changing based on your order flow?

The book is getting constructed pretty much the same as it has been. The healthcare IT business we’ve seen, as Mike said in his prepared remarks, some nice projects to bid on and continued optimization. So, we have not seen a healthy dose of integration work from M&A activity. So, it’s just kind of been steady state business to be honest with you.

Okay. And then, my last question is on the dim sum contract with the Defense Department. At what point do you think you participate in that? I guess, the lead – the prime contractor is putting together a pilot now, and then it gets tested, but when do you start to participate more fully?

Rand, would you like to advice on that?

Yes. We’re participating in a very small way now, more around education services to the DOD facilities. You’re correct there is a pilot that will be getting started here. But I think, once I get passed the pilot, which probably will be 2017, maybe late 2016 then we’ll see heavier lifting. So – and that’s kind of what we have been saying. It will take a while to ramp up, but this is going to go on for a quite while.

Terrific, thanks for your help.

We will go to the line of George Tong with Piper Jaffray. Your line is open.

Hi, thanks. Good afternoon. I’d like to explore the growth performance of Creative Circle. Can you talk about the drivers of upside versus your expectation this quarter, and how sustainable 20% plus growth is for the segment?

Well, we’re not going to guide to that, but I can tell you they are the largest in the industry. They’ve got a dominant franchise. Their days were organized where people know exactly what they’re doing every day and they have a very vibrant market, where priority is placed on that type of spend. So, the first quarter looks good. And we continue to be able to thoughtfully open new offices and add additional new employees. So, I’d say, we’re not going to guide to that, but we’ll report it, but things are steady state.

Got it. You’ve talked about some of the high growth skill areas, such as healthcare IT, digital and regulatory. Can you discuss which skill areas are lagging and how much of the business these slower growth areas represent?

Yes, a little bit of custom app development, software engineering, but that’s really, anything that’s kind of later stage adoption, but mobility, security, digitization, data warehousing, all that’s continuing a pace.

Got it. And then, I guess, lastly, can you talk about the likelihood that you’ll hire sales and recruiters in an elevated rate this year to chase after the demand you’re seeing?

Well, we’ve loaded our – we’ve loaded our gun pretty well in 2015. With that said, we’ll probably continue to hire at our normal growth rate, which is typically higher than the industry, and we’ll see how the year unfolds. If there is more opportunity then we’ll look at it. I think we’ve been pretty adept at reading the market and placing our bets early and correctly. But, right now, I think we’re in an absorption and normal growth rate, which is still higher than the industry growth rate for new hires.

Great, very helpful. Thank you.

Thank you. We will go to the line of Tim McHugh with William Blair. Please go ahead.

Yes. Thanks. Just on Oxford, the gross margin there, is that just the impact of the perm trends I mean and I guess how sustainable is the margin trend?

It’s sustainable. And you’re correct, there was – Tim, the perm grew 38%, and – but Oxford’s contract margins were expanded a little bit and they were very stable.

Okay. And is that just bill pay spread, what – or mix that drove the expansion for the core Oxford?

We were able to price a little bit firmer than we had in previous quarters.

Okay. And then, let me just ask you, you gave the revenue growth rate for the last two weeks of – I think it was 14%, 15% on a pro forma basis, and that was I think excluding perm, which is growing faster and Creative Circle, which has been growing faster than that. So, I’ve recognized in this environment the guidance you gave for kind of low-teens growth is still very good. But, I guess, it’s lower than you would even describe seeing lately, I guess, relative to that.

That’s correct.

So how would you read – I mean, what is the thinking on that? I mean, you said you’re not seeing a slowdown, but the guidance would imply, you would expect slower or you did see slower earlier in the year. Can you just kind of talk about that?

Yes. Tim, I’m saying it away really for the investors to understand, I’m not being not cocky, it’s just don’t confuse actual growth rates with guidance growth rates. The actual growth rate is higher in the first quarter. You’ll make a determination whether there has been a deceleration or not in the business, but we gave you a guidance number, it’s a 100% faster than the industry.

Okay, thanks.

Our next question is from Mark Macon with R W Baird. Please go ahead.

Good afternoon. Let me add my congratulations. It’s terrific performance this quarter. Rand, you’ve mentioned in answering one of the first questions, something about our client wins, and I was wondering if you could expand on that. It sounds like you may have had some good ones that that came up?

Yes. Peter, so I’ll go ahead. Yes, I think I was commenting that it’s the portfolio of accounts and we look at our penetration of the Fortune 500, the Fortune 1000 and others, other mid-market accounts and for us it’s always expanding that number. So, we have secured a few additional accounts as we always do during the course of the year, but I think also in different sectors. In other words, as I pointed out, all of our industries – our accounts in the industry sectors are growing double-digit except for one. And the one is we’ve gotten back to a very low positive, which has been sort of on its back, the government sector for a while. So, it’s a matter of penetrating our existing accounts and continue to add to portfolio and we do so with resources and focus around all seven of these industries. Did I answer your question, Mark?

You did. I was wondering if you could talk a little bit to the magnitude of some of those account wins – where they sizable or…

Well look, as you know, it takes years to win the right to be on the account and then it takes performance to get a dominant share of the spend. And in many instances, new awards are not exclusive. So, it’s hard to predict the size. What you should measure and ask, as we go forward, is how we’re doing with getting a greater percentage of the total spend under these new account wins.

All right, I mean just judging by the numbers, you’re clearly gaining more. With regards to the verticals that you’re seeing the double-digit growth rates and everything other than government, so in energy you’re seeing double-digit growth rates right now?

No, but relatively speaking, I don’t think it even represents 3% of Oxford’s – excuse me Apex’s consolidated revenues and it probably doesn’t represent 3% of our consolidated revenues. So…

Yes, and Peter, energy is within our consumer industrial’s vertical, which grow double-digit. So, other parts of consumer industrial are picking up the slot.

That’s great. What are you seeing out of the financial services vertical?

It’s been solid. As everyone knows, people – I guess it’s a negative if interest rates don’t go up, but it’s the same environment we’ve experienced in the last six months to eight months, which has slightly improved from what we experienced in the later half of 2015 – of the later half of 2014, and the first part of 2015. So, no improvement, no deterioration, just kind of the same as what we had been experiencing.

It’s good to hear. And how – what are you thinking about for CapEx for this coming year?

Our target is what it has been in the past, and that is to be above the 1% of total revenues.

Okay, great, terrific. Thank you.

[Operator Instructions] We’ll go to line of Randy Reece with Avondale Partners. Please go ahead.

Good afternoon, excellent performance. When I look at the recruiting world, companies are spending more and more on recruiting to get less and less returns, this even in a market where hiring seems to maybe be choppy. How is the employment environment affecting your internal spend on – not only on recruiting people, but also in processes?

Well, if I am interpreting the question correctly, Randy, we are continuing to spend money on tools to enhance the productivity of our internal recruiters. I would tell you that it’s not just a net incremental increase. There are winners and losers amongst our vendors where we’re focusing our spend and the tools that have proven over the last year to be the most effective and some setting historical tools that aren’t as productive and leading edge as they used to be. So, we are spending more. It has improved predictive analytics kind of pre-screening raw data, and then funneling that screen data to our talented recruiters has increased productivity. So all-in-all, if you’re looking for a read through for human relation – HR solutions and tools, I think it continues to be productive, and it’s embedded in our models going forward and I think for the industry it is. I think like anything, I mean master used to get a premium pricing on their database, but their database is not as proprietary that holds true for any vendor who’s selling data. So, I think that’s a net positive for the industry that pricing will get better for us on some of this data that we purchase.

You had quite a robust year-over-year growth in staffing consultants. Did you succeed in hiring as quickly as you wanted to?

We did.

So rolling into the first quarter, have you made any modification of your plans for a growth of internal staff?

No. I think we have guided you on the third quarter conference call that we have preloaded the 2016, because we saw what we just reported. And so, we’re a little bit ahead of the game. So now it’s just kind of what we budgeted.

Very good. Thank you very much.

And our next question is from Sara Gubins with Bank of America. Please go ahead, ma’am. Mrs. Gubins, is your line muted?

Hi, this is Brent calling in for Sara. I just want to talk about incremental margin expectations for 2016 and recognizing that the environment is uncertain, how should we think about what your margins might look like under weaker or stronger revenue growth trends for the year?

Yes, I think, you should use the guidance that we gave you for the first quarter, and then, we’ll refresh that for the second quarter, but we’ve always kind of give guidance longer term. If you look at our investor presentations, there is stable gross margins and we’ve stated what we think the gross – what that margin is.

Okay, great. And just a follow-up on an earlier question, on financial services. We’ve been hearing from a number of companies that touch IT that banks are being incrementally more cautious in their spend to start the year and you seem like it was more of status quo. And I’m just curious, why do you think you aren’t seeing similar trends in the business and maybe a little bit more color on how financial services are tracking?

Rand?

Well, first of all, our financial services unit and its portfolio of accounts have been tracking very well over the last three – two, three quarters. So, it’s growing now double-digits, where it didn’t do that in the previous quarters. We get that growth first by expanding the number of accounts we have in the portfolio, number one. Number two, by penetrating the accounts we have and taking more market share. Generally speaking, we’re one of the Tier 1 players in many of our – in our accounts. And sometimes they want to consolidate spending with a few – a fewer people and they will do that. And third, it’s a little bit about being at the right place, at the right time and having our people on the street and [indiscernible] reacting to the needs that our individual clients have. So, all three are contributing to that growth. So, it’s hard for us to react, Brent, any one account and say hey that account let’s say they’re not going to spend as much money, but there are some accounts that are saying that but there are a lot of accounts, there are new accounts that we can begin to penetrate and we are.

Great. Thank you very much.

And we will go to the line of [indiscernible] Please go ahead.

Thanks for taking my question. So, you mentioned that weather impact for Q1. I’m kind of new to the story, but could you sort of explain that a little bit, would it just be a reduction in billable days or assignments or something like that, but I thought I heard you say that there might be a little bit of weather headwind in Q1?

Yes, exactly. First of all its de minimus, it’s $2.5 million, but it’s exactly what you said people cannot travel to the location to perform the work and build the time. So, it’s just a deferral.

Okay.

So, instead of billing I’m making it up, but instead of billing 40 hours in a week, they built 30 hours.

Okay, great. Thank you.

And we have a question from the line of Jeff Silber, BMO. Please go ahead.

Thanks so much. Just one more question about your internal hiring. I know you ramped up towards the end of the year, did you have difficulty finding people, wages and/or packages have to increase accordingly?

We’re lucky right now that we have momentum in our business in our scale and size. If someone wants to be in human capital, we got a great chance of persuading them to be with us versus someone else. And we really didn’t see that much wage inflation to be honest with you. And we’re sticking to our guns. And as you know, our model is kind of lower basis and higher percentage commissions and for people who are competitive, and want to grow their income capacity fast that’s the one in combination form. So, we were able to identify and attract people and close a lot of offers that we presented.

Okay, great. And then you mentioned on that call that $30 million that you paid down in debt and expectations to continue to do that going forward. How do you decide, how much to pay down in debt relative to your incoming cash flow?

Well, look, we know what our working capital needs are and we’re positive cash flow every week. Even as low as our interest rate off is – interest rate is, it’s accretive to pay it down. And if we had to re-lever, we have a sizable revolver. And we’ve said, we want to get to 2.5 times as quickly as possible, and we’ll get there at sometime hopefully by the second half of the year.

And is there a minimum of cash that you need on your balance sheet to run your business?

Maybe $20 million, $30 million.

Okay, great. All right, thanks so much.

And there are no other participants – excuse me, we just have one queue up. And we’ll go to line of Gary Bisbee with RBC. Please go ahead.

Yes, just one last follow-up. The Oxford gross margin strength, what in particular drove that? And any guidance on how to think about that trending next quarter, I guess you’ll have more payroll taxes like you’ve cited, but outside of that is there any particular going on? Thank you.

Yes. So they were successful after a couple of quarters of the decline, and their contract gross margin pricing is better. But then there was a bigger contribution from their higher margin businesses on the segment. But when we talk about the Oxford core business, which is predominantly the contract business, it had a nice recovery from a couple of quarters of declining gross margin. It was just our thought disciplined, thoughtful conversations with customers, explaining the scarcity issue and the value of the skill.

Okay, great. Thank you.

We’ll go to the line of Bryan Sekino with Brant Point. Please go ahead.

I just wanted to ask, if you consider buying back stock, looking at the market, where the stock is and deferring debt pay down in the near-term?

We always balanced what’s best with our shareholders capital, and so that’s not a thought that hasn’t been debated. And as we move forward, it’s not a hard fast rule that we have to get to 2.5 times to buy stock. Jim Brill is here, but our covenants and our bank agreement currently allow us to buy up to about $80 million, right now.

Yes.

We have authorization to buy $80 million based on our bank covenants right now. And so, we balanced the best utilization of your capital every day and we’ll see.

Okay, thanks.

Gentlemen, there are no other participants queuing up at this time.

Well, we appreciate your time and attention and look forward to reporting our first quarter results. Thank you for your attention.