Everforth, Inc. (EFOR) 2006 Q2 法說會逐字稿

Good morning. My name is Michelle, and I will be your conference facilitator today. At this time I would like to welcome everyone to the On Assignment second quarter 2006 earnings conference call. [OPERATOR INSTRUCTIONS]

早安。我叫 Michelle，今天將擔任本次會議的主持人。此刻我想歡迎各位參加 On Assignment 2006 年第二季財報電話會議。[OPERATOR INSTRUCTIONS]

Mr. Holtzman, you may begin your conference.

Holtzman 先生，您可以開始您的會議。

Thank you, Michelle. Before we begin I would like to remained everyone, as we do each quarter, that our presentation contains predictions, estimates, and other forward-looking statements representing our current judgment on what the future holds. These include words such as forecasts, estimate, project, expect, believe, and similar expressions. We believe these remarks to be reasonable, but they are subject to the risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. We described some of these risks and uncertainties in yesterday's press release and in our filings with the SEC. We do not assume the obligation to update statements made in this conference call.

謝謝你，Michelle。在開始之前，我想提醒各位，如同我們每一季都會做的，我們的簡報包含預測、估計以及其他前瞻性陳述，代表我們目前對未來情勢的判斷。這些陳述包括如 forecasts、estimate、project、expect、believe 等字眼，以及類似的表述。我們相信這些說法是合理的，但仍可能受到風險與不確定性的影響，導致實際結果與前瞻性陳述出現重大差異。我們已在昨日的新聞稿以及向美國證券交易委員會（SEC）提交的文件中說明其中部分風險與不確定性。我們不承擔更新本次電話會議中所作陳述的義務。

Peter Dameris, our CEO and President, will now provide you an overview of our second quarter results. Pete?

我們的執行長兼總裁 Peter Dameris 現在將為各位概述我們第二季的業績結果。Pete？

Thank you, Mike. Good morning. I would like to welcome everyone to the On Assignment 2006 second quarter earnings conference call. With me are Mike Holtzman, our CFO, Emmett McGrath, President of Lab Support, and Shawn Mohr, President of Healthcare Staffing. During our call today I will give a review of the markets we serve and our operational highlights, followed by a more detailed discussion of the performance of our operating segments by their respective presidents. I will then turn the call over to Mike for a more detailed review and discussion of our second quarter financial performance and our financial guidance for the third quarter of 2006 and the full year. We will then open the call up for questions.

謝謝你，Mike。早安。歡迎各位參加 On Assignment 2006 年第二季財報電話會議。與我一同出席的有：我們的財務長（CFO）Mike Holtzman、Lab Support 總裁 Emmett McGrath，以及 Healthcare Staffing 總裁 Shawn Mohr。在今天的電話會議中，我將先回顧我們所服務的市場與營運重點，接著由各營運部門的總裁更詳細地說明其部門表現。之後我會把電話交給 Mike，由他更深入回顧並討論我們第二季的財務表現，以及我們對 2006 年第三季與全年財務指引。接著我們將開放提問。

This quarter's performance was the strongest since our new management team took over in September 2004. Our EBITDA and EPS grew 106.5% and 600% respectively on a sequential basis and 257% and 600% respectively year over year. All divisions contributed to our strong reported results. Consolidated revenues for the quarter grew year over year by $11.2 million or 19.6% to $68.6 million. Consolidated gross margin was 28.1%. This represents a 140-basis point improvement year over year and a 260-basis point improvement sequentially. Gross margins expanded year over year in both of our segments. Our consolidated hourly bill pay spread also increased year over year. In the five quarters since the first quarter 2005, we have grown revenues $74.4 million cumulatively, while our consolidated quarterly SG&A has remained essentially flat at $16.1 million, excluding FAS 123(R). Operating income for the quarter was $2.6 million, which includes $555,000 of FAS 123(R) expense, up $2.8 million from the year-ago period. For those investors who have followed our Company over the last three years, our second quarter EBITDA exceeded the full-year EBITDA generated by the Company in 2003, excluding goodwill impairment charges. Our performance this quarter is a testament to the strength of our business and the labor markets we serve.

本季表現是自我們新管理團隊於 2004 年 9 月接手以來最強勁的一季。我們的 EBITDA 與 EPS 分別在季比基礎上成長 106.5% 與 600%，並分別在年比基礎上成長 257% 與 600%。所有事業部門都對我們強勁的公告結果有所貢獻。本季合併營收年增 1,120 萬美元（或 19.6%），達 6,860 萬美元。合併毛利率為 28.1%。這代表毛利率年增 140 個基點，且季增 260 個基點。我們兩個事業部門的毛利率皆較去年同期擴張。我們的合併每小時開票與支付薪資之價差（bill-pay spread）亦較去年同期增加。自 2005 年第一季以來的五個季度中，我們累計營收成長 7,440 萬美元；同時，在排除 FAS 123(R) 的情況下，我們合併每季的銷售、一般及管理費用（SG&A）基本維持持平，約為 1,610 萬美元。本季營業利益為 260 萬美元，其中包含 55.5 萬美元的 FAS 123(R) 費用，較去年同期增加 280 萬美元。對於過去三年持續關注本公司的投資人而言，我們第二季的 EBITDA 已超過公司在 2003 年全年的 EBITDA（不含商譽減損費用）。本季表現證明了我們業務的實力以及我們所服務之勞動市場的強勁。

Exiting the quarter demand accelerated for all of our division services. Our weekly revenues averaged $5.6 million for the two weeks ended July 23rd of this year, excluding Conversion and Direct Placement revenues. We averaged $4.6 million in weekly revenues for the same two-week period one year ago. In addition, our number of hours billed, billable headcount and client count continues to exceed the highest levels of 2005. The actions we put in place regarding reduction of cost of services and bill rate increases over the last eight quarters increased our consolidated gross margin by 140-basis points over the prior-year period, and allowed us to grow our profits faster than our revenues. During the quarter, we increased our year over year productivity per staffing consultant by 19.5% and we achieved the fifth consecutive quarter of net income. I'm also pleased that we are well ahead of schedule in achieving our targeted EBITDA margin of 7% by the end of 2007. Adjusted EBITDA this quarter, which excluded FAS 123(R) expense, was 6.5%, up from 1.9% in the year-ago period. All of our divisions positively contributed to our revenue growth and net income generation.

在本季結束時，我們各事業部門服務的需求皆加速成長。以截至今年 7 月 23 日止的兩週計算（不含 Conversion 與 Direct Placement 營收），我們每週平均營收為 560 萬美元。一年前同一兩週期間，我們每週平均營收為 460 萬美元。此外，我們的開票工時數、可計費人數（billable headcount）與客戶數，持續高於 2005 年的最高水準。過去八個季度中，我們推動降低服務成本與提高開票費率的措施，使合併毛利率較去年同期提升 140 個基點，並讓我們的獲利成長速度快於營收成長。本季，我們每位派遣顧問的人均生產力年增 19.5%，並達成連續第五個季度的淨利。我也很高興我們在達成 2007 年底 EBITDA 利潤率 7% 的目標上，進度明顯超前。本季調整後 EBITDA（排除 FAS 123(R) 費用）為 6.5%，高於去年同期的 1.9%。我們所有事業部門皆對營收成長與淨利創造做出正面貢獻。

To fully appreciate the performance of our Company during the second quarter investors should evaluate each operating group's performance separately. The Lab segment generated $29.1 million in revenues, up 21.5% year over year and had gross margins of 33.4%. Lab support billed approximately 1,400 clients, up 1,334 in the prior quarter, and added 256 new or reactivated clients in the quarter. The average number of contract professionals on billing increased 246 or 13.8% year over year. The average bill rate for this group increased 5.3% year over year. Our European operations generate $4.3 million in revenues, up 23.5% from the year-ago period, and had gross margins of 34.9%. During the second quarter our top ten customers represented 15% of Lab support segments total revenues and the average number of staffing consultants was 113, down two sequentially.

為了充分理解本公司第二季的表現，投資人應分別評估各營運群組的表現。Lab 事業部本季營收為 2,910 萬美元，年增 21.5%，毛利率為 33.4%。Lab Support 約對 1,400 家客戶開票，高於前一季的 1,334 家，且本季新增或重新啟用 256 家客戶。平均可計費的合約專業人員數年增 246 人（或 13.8%）。該群組的平均開票費率年增 5.3%。我們的歐洲營運營收為 430 萬美元，較去年同期成長 23.5%，毛利率為 34.9%。第二季我們 Lab Support 事業部的前十大客戶占該事業部總營收的 15%，平均派遣顧問人數為 113 人，較前一季減少 2 人。

The MF&A group generated $12.6 million in revenues for the quarter, up approximately 34% year over year. MF&A billed 1,090 clients, up from 1,033 in the prior quarter, and added 293 new or reactivated clients in the quarter. The average number of contract professionals on billing increased 160 or nearly 21% year over year. The average bill rate of the group increased nearly 6% year over year. For the second quarter our top ten customers in MF&A represented 22.4% of total MF&A revenues and the average number of staffing consultants was 86, flat sequentially.

MF&A 事業群本季營收為 1,260 萬美元，年增約 34%。MF&A 對 1,090 家客戶開票，高於前一季的 1,033 家，且本季新增或重新啟用 293 家客戶。平均可計費的合約專業人員數年增 160 人，接近 21%。該群組的平均開票費率年增近 6%。第二季 MF&A 的前十大客戶占 MF&A 總營收的 22.4%，平均派遣顧問人數為 86 人，與前一季持平。

The Nurse Travel group generated $26.9 million in revenues, up 12% year over year. Gross margin was 27 -- excuse me, 20.7%, flat to the second quarter of 2005. The number of nurses billed averaged 684 compared to 593 in the year-ago period, and the total number of clients billed was 260, up 86 from the year-ago period. The average bill rate for the group increased 2% over the year-ago period. For the second quarter we add 69 new or reactivated clients, and our top ten clients in Nurse Travel represented 48.6% of Nurse Travel revenues versus 57.2% in the year-ago period. During the week of July 23rd this year, we billed 206 customers and had 783 nurses on assignment. New nurse orders continue to be at the highest levels.

Nurse Travel 事業群本季營收為 2,690 萬美元，年增 12%。毛利率為 27——抱歉，是 20.7%，與 2005 年第二季持平。平均開票的護理人員數為 684 人，相較去年同期為 593 人；開票客戶總數為 260 家，較去年同期增加 86 家。該群組的平均開票費率較去年同期增加 2%。第二季我們新增 69 家新客戶或重新啟用客戶；Nurse Travel 的前十大客戶占 Nurse Travel 營收的 48.6%，相較去年同期為 57.2%。在今年 7 月 23 日當週，我們對 206 家客戶開票，並有 783 名護理人員在派遣中。新的護理人員訂單持續維持在最高水準。

We remain focused on our newer lines of business, including H.I.M., Clinical Research, Engineering, Local RN and Direct Hire. These lines of business generated $5.1 million in revenues or 7.4% of total revenues for the quarter, compared to 4.6% in the second quarter of 2005. If you remember, most of these businesses were launched in 2004 on an organic basis. I would continue to describe each of the end markets we serve as very productive and improved over the second quarter of 2006. The labor markets have not tightened to the point that we are experiencing rapid contract employee wage inflation that we cannot pass along to our clients. This is our eighth consecutive quarter that the Company has met or exceeded its operating objectives and remain consistent with the operating plans that management has set forth previously.

我們仍專注於較新的業務線，包括 H.I.M.、臨床研究、工程、本地 RN 以及直接聘僱。這些業務線本季創造了 510 萬美元營收，占總營收的 7.4%，相較於 2005 年第二季的 4.6%。如各位所記得，這些業務多數於 2004 年以有機方式推出。我仍會將我們所服務的各終端市場描述為非常具生產力，且較 2006 年第二季有所改善。勞動市場尚未緊縮到我們出現無法轉嫁給客戶的合約員工薪資快速上漲。這是公司連續第八個季度達成或超越營運目標，並且與管理層先前提出的營運計畫保持一致。

Going forward our focus will remain on growing our EBITDA faster than our gross profits, and growing our operating income faster than our revenues. Our fifth consecutive quarter of net income was achieved by continuing to increase revenues, expanding gross margin and focusing on our SG&A expenses. Towards the end of the call today Mike will speak to you regarding the forward guidance that we announced in our earnings release. As for the updated 2006 guidance, we continue to remain excited about the groundwork we have laid and the strength of the end markets we serve.

展望未來，我們的重點仍將是讓 EBITDA 的成長速度快於毛利，並讓營業利益的成長速度快於營收。我們連續第五個季度達成淨利，係透過持續提升營收、擴大毛利率並聚焦於 SG&A 費用所致。在今天電話會議接近尾聲時，Mike 將就我們在財報新聞稿中公布的前瞻指引與各位說明。至於更新後的 2006 年指引，我們仍對已奠定的基礎以及所服務終端市場的強勁表現感到振奮。

We'd now like to turn the call over to Shawn and then Emmett for a more detailed review of our operations. Shawn?

接下來我們想把電話會議交給 Shawn，然後由 Emmett 進行更詳細的營運回顧。Shawn？

Thank you, Peter. On Assignment Healthcare Staffing's Q2 results continue to show steady progress. Our market share and continued client growth over the last several quarters, combined with a strong demand for our Healthcare Staffing services, all resulted in an 18% year over year increase in Healthcare Staffing revenues. Revenues for the segment represented 57.6% of the total revenues for the quarter. Gross margin for the segment was 24.1% for the quarter, up 90-basis points year over year and 200-basis points sequentially.

謝謝你，Peter。On Assignment Healthcare Staffing 的第二季結果持續展現穩健進展。過去幾個季度我們的市占率提升與客戶持續成長，再加上對我們醫療人力派遣服務的強勁需求，共同帶動醫療人力派遣營收年增 18%。該部門營收占本季總營收的 57.6%。該部門本季毛利率為 24.1%，較去年同期提高 90 個基點，並較前一季提高 200 個基點。

Highlights of the Q2 results for our Medical, Financial, and Allied business unit are as follows. MF&A revenues were up 34% year over year and 9% sequentially. This performance continues, as the trailing average assignment numbers, not including direct hire, conversion or billable expenses, for the two weeks ended July 23, 2006 versus the same two-week period in the prior quarter were $984,000 in revenues versus $902,000, 955 professionals on assignment versus 912, and 604 billed clients versus 546. All of these early third quarter results are above the second quarter averages, and are being achieved with staffing consultant levels consistent with 2005 and the previous quarter. The market demand for all of our Healthcare professional services remain strong. We continue to gain market share, are seeing expanding staffing consultant productivity levels, and the positive market momentum continues.

我們醫療、財務與輔助（Medical, Financial, and Allied）事業單位第二季結果重點如下。MF&A 營收年增 34%，季增 9%。此一表現仍在延續：截至 2006 年 7 月 23 日止兩週的追蹤平均派遣數（不含直接聘僱、轉任或可計費費用），相較於前一季同一兩週期間，營收為 98.4 萬美元對 90.2 萬美元；在派遣中的專業人員為 955 人對 912 人；計費客戶為 604 家對 546 家。這些第三季初期結果皆高於第二季平均水準，且是在派遣顧問人力水準與 2005 年及前一季一致的情況下達成。我們所有醫療專業服務的市場需求仍然強勁。我們持續提升市占率，派遣顧問的生產力水準也在擴大，正向的市場動能仍在延續。

Now let me turn to our Nurse Travel division. Nurse Travel revenues for Q2 increased 12% year over year. Excluding $211,000 in revenues derived from labor disruptions occuring in Q1, revenues declined 5.4% sequentially. As discussed in the Q1 conference call, we anticipated that our Q2 revenues would be affected from a conscious decision made to focus on shifting our client concentration and expand our client count.

接下來我談談我們的護理旅行（Nurse Travel）事業部。護理旅行第二季營收年增 12%。若排除第一季因勞資糾紛所帶來的 21.1 萬美元營收，營收則季減 5.4%。如第一季法說會所討論，我們預期第二季營收會受到影響，原因是我們有意識地決定將重點放在調整客戶集中度並擴大客戶數。

As you recall, in Q1 of 2006 we'd experienced a much faster ramping of nurses almost immediately within the quarter, as several of our largest clients had sizable needs at the start of the year that we were able to fill. Some of these clients have now returned to more normalized nurse count levels. As these nurses began to come off assignments early in Q2, we took the opportunity during a tight labor market to reassign many of these nurses to newly-developed clients, in order to diversify our client base and revenue streams. These reassignments could not all occur simultaneously during the varied assignment end dates and, therefore, took about eight weeks to complete and affected revenues during this time span. The net effect of this client diversification effort is that we have, over the last quarter, experienced an increase of nearly 29% in clients billed and put On Assignment Nurse Travel in a much better position to grow future revenues off of an expanded client base, as the nurse pool loosens up during the second half of the year.

如各位所記得，2006 年第一季我們在該季度內幾乎立即就看到護理人員快速到位，因為我們幾家最大客戶在年初有相當大的需求，而我們得以補足。其中部分客戶目前已回到較正常的護理人數水準。當這些護理人員在第二季初開始結束派遣時，我們把握勞動市場緊俏的機會，將其中許多人重新派遣至新開發的客戶，以分散客戶基礎與營收來源。由於各派遣案的結束日期不同，這些重新派遣無法同時完成，因此約花了八週才完成，並在此期間影響了營收。此一客戶多元化努力的淨效果是：在過去一季，我們的計費客戶數增加近 29%，並使 On Assignment Nurse Travel 在今年下半年護理人力供給逐步寬鬆時，能以更擴大的客戶基礎處於更有利的位置來推動未來營收成長。

This concerted effort to change our client concentration mix has already begun to positively affect our revenues in Q3. Demands across this expanded client base continues to remain strong, as the trailing average weeks numbers for the two-weeks ended July 23, 2006, versus the same two-week period in the prior quarter were $2.4 million in revenues versus $2 million, 785 nurse on assignment versus 652, and 205 billed clients versus 167. As Peter said, our top ten clients in Nurse Travel represented 48.6% of Nurse Travel revenues versus 53.2% in Q1 and 57.2% in the year-ago period.

這項有計畫的客戶集中度組合調整，已開始在第三季對我們的營收產生正面影響。在這個擴大的客戶基礎之下，需求仍然強勁；截至 2006 年 7 月 23 日止兩週的追蹤平均數據，相較於前一季同一兩週期間，營收為 240 萬美元對 200 萬美元；在派遣中的護理人員為 785 人對 652 人；計費客戶為 205 家對 167 家。如 Peter 所說，我們護理旅行業務的前十大客戶占護理旅行營收的 48.6%，相較於第一季的 53.2% 以及去年同期的 57.2%。

Our highly focused efforts over the last two years have made us more diversified, niche focused, and less susceptible to large client demands. We've focused on broadening client base with great success, while at the same time working to maintain a high nurse reassignment ratio. We also continued to experience increases in market demand within the types of high-skilled nurse disciplines we place, and our biggest challenge is always in continuing to attract new highly-skilled nurses to our supply pool. So I'm pleased to say that our new nurse applicant numbers increased sequentially, and we're beginning to see an expanding nurse pool late into Q2 and early Q3, as we had hoped. Our value propositions deliver a model and focus on placing high-demand and high-skilled nursing positions continues to make us uniquely diversified and different from other travel nurse companies.

過去兩年我們高度聚焦的努力，使我們更加多元化、更聚焦於利基市場，且較不易受大型客戶需求波動影響。我們成功地擴大客戶基礎，同時也致力於維持較高的護理人員重新派遣比率。我們也持續看到在我們所派遣的高技能護理專科類別中，市場需求增加；而我們最大的挑戰始終是持續吸引新的高技能護理人員加入我們的人才供給池。因此我很高興地表示，新申請的護理人員人數較前一季增加，且如我們所期望的，我們在第二季末至第三季初開始看到護理人力供給池擴大。我們的價值主張所提供的模式，以及持續聚焦於派遣高需求與高技能護理職缺，使我們在多元化程度上獨具特色，並與其他旅行護理公司有所不同。

With that I will pass the call along to Emmett McGrath, our President for Lab Support. Emmett?

接下來我將把電話交給我們 Lab Support 的總裁 Emmett McGrath。Emmett？

Thank you, Shawn, and good morning. As you have heard earlier today, the Lab Support segment had a very strong quarter. Both our U.S. and European operations generated impressive results, consistently reaching new highs in key performance areas. I am pleased to report that revenues for the segment increased 21.5% year over year and 9.9% sequentially. Revenues for the segment represented 42.4% of the total revenues for the quarter. Gross margin for the segment was 33.4% for the quarter, representing an all-time high. This represents 180-basis point increase over the same quarter last year, a 290-basis point improvement sequentially.

謝謝你，Shawn，各位早安。如各位今天稍早所聽到的，Lab Support 部門本季表現非常強勁。我們在美國與歐洲的營運都交出亮眼成果，在關鍵績效領域持續創下新高。我很高興報告，該部門營收年增 21.5%，季增 9.9%。該部門營收占本季總營收的 42.4%。該部門本季毛利率為 33.4%，創歷史新高。這代表較去年同期提高 180 個基點，並較前一季改善 290 個基點。

I attribute this performance to a number of key operational factors. First, our immediate focus during the quarter was to continue to build upon the momentum realized in the first quarter. Key focus areas were, and continue to be, effective delivery of high-margin contracts in direct-hire service offerings, new business development, reactivation of former clients, execution of newer contract awards, and greater penetration with existing clients. As a result, we were successful in improving gross profit by expanding bill and pay rate, increasing the number of contract professionals on assignment, and growing our client base. We expanded the hourly bill pay spread 4.4% over the same period last year and 3.4% sequentially, through higher level placement and a greater contribution from our newer service lines. We also increased the number of contract professionals placed on assignment by 13.8% year over year and 4.3% sequentially, and we billed approximately 1,400 clients and generated 256 new and reactivated clients.

我將此一表現歸因於多項關鍵營運因素。首先，我們本季的即時重點是持續延續第一季所建立的動能。關鍵聚焦領域包括且仍將包括：在直接聘僱服務方案中有效交付高毛利合約、新業務開發、重新啟用過往客戶、執行新取得的合約案，以及在既有客戶中提高滲透率。因此，我們成功透過擴大計費與支付費率、增加在派遣中的合約專業人員數量，以及擴大客戶基礎來提升毛利。我們透過更高層級的派遣配置以及較新的服務線帶來更高的貢獻，使每小時計費與支付價差較去年同期擴大 4.4%，並較前一季擴大 3.4%。我們也使在派遣中的合約專業人員數量年增 13.8%、季增 4.3%；並對約 1,400 家客戶進行計費，新增及重新啟用 256 家客戶。

Second, our commitment to maintain and expand gross margin through internal and external efforts. Internally, we have been successful in reducing and controlling our cost of services. We are now realizing margin expansion, as a result of prior decisions to modify contractor benefits and minimize nonbillable expenses. Externally, our staffing consultants excelled in maximizing margin through consistent pricing practices, engaging clients that value our specialized services, increasing Direct Hire and Conversion activity, avoiding high-risk work environments, passing through expenses and tax increases, and, finally, migrating to higher-level skill disciplines. Third, our attention to individual productivity. During the quarter, gross profit per staffing consultant increased approximately 17% over the same quarter last year and 23.1% sequentially. This improvement is in direct response to operational excellence, demand for our services, and the quality of our staffing consultants.

第二，我們致力於透過內部與外部的努力維持並擴大毛利率。在內部方面，我們已成功降低並控制服務成本。由於先前決定調整承包商福利並將不可計費費用降至最低，我們目前正實現毛利率擴張。在外部方面，我們的人力派遣顧問透過一致的定價作法、與重視我們專業服務的客戶合作、提高直接聘僱（Direct Hire）與轉任（Conversion）活動、避免高風險的工作環境、轉嫁費用與稅負增加，以及最後轉向更高階技能領域等方式，在最大化毛利方面表現出色。第三，我們對個別生產力的關注。本季每位人力派遣顧問的毛利較去年同期約增加17%，較前一季增加23.1%。此項改善直接反映了營運卓越、對我們服務的需求，以及我們人力派遣顧問的品質。

Fourth, our growth in the newer business lines. Clinical Research and Engineering grew revenues nearly 122% over the same quarter last year, and 31.6% sequentially. I attribute this performance to our dedicated sales and recruitment professionals, and the strength of the markets that we serve. Early into the third quarter of 2006 I am encouraged with our operating trends, job order flow and pipeline of new business opportunities. To ensure continued profitable growth, we remain committed to maintaining and expanding gross margin, gaining greater operational leverage, building our client base, and controlling costs. I am confident that we have the necessary leadership, field staff, and demand for our services to make the third quarter a success.

第四，我們在較新業務線的成長。臨床研究與工程業務的營收較去年同期成長近122%，較前一季成長31.6%。我將此表現歸功於我們專注投入的銷售與招募專業人員，以及我們所服務市場的強勁。進入2006年第三季初期，我對我們的營運趨勢、職缺訂單流量以及新商機管線感到鼓舞。為確保持續的獲利成長，我們仍致力於維持並擴大毛利率、取得更高的營運槓桿、建立客戶基礎並控制成本。我有信心，我們具備必要的領導團隊、前線人員以及對我們服務的需求，能使第三季取得成功。

I would now like to turn the call over to Mike. Mike?

我現在想把電話會議交給Mike。Mike？

Thanks, Emmett. Consolidated revenues were $68.6 million, up 2.9% sequentially. Excluding $211,000 in revenues derived from staffing hospitals experiencing labor disruptions in the first quarter, consolidated revenues were up 3.2% sequentially. There were no such revenues in the second quarter of this year. There were 63.5 billion days in this quarter, compared with 64 days in Q2 of '05 and 64.5 days in Q1 of '06. For Nurse Travel there were 91 billing days compared with 91 days in Q1 of '05 and 90 days in Q1 2006. Lab Support segment revenues were $29.1 million, up 9.9% sequentially, and represent a 42.4% of total revenues. Lab Support Europe revenues were $4.3 million, up 18% sequentially. On a constant currency basis, revenues were up 13.2% sequentially. Lab Europe revenues were 6.2% of total revenues for the quarter.

謝謝你，Emmett。合併營收為6,860萬美元，較前一季成長2.9%。若排除第一季因為為發生勞資糾紛的醫院提供人力派遣所產生的21.1萬美元營收，合併營收較前一季成長3.2%。本年度第二季並無此類營收。本季共有63.5個十億天（billion days），相較之下，2005年第二季為64天，2006年第一季為64.5天。就護理差旅（Nurse Travel）而言，本季有91個計費天數，對比2005年第一季為91天、2006年第一季為90天。實驗室支援（Lab Support）部門營收為2,910萬美元，較前一季成長9.9%，占總營收的42.4%。歐洲實驗室支援（Lab Support Europe）營收為430萬美元，較前一季成長18%。以固定匯率基礎計算，營收較前一季成長13.2%。本季歐洲實驗室（Lab Europe）營收占總營收的6.2%。

Healthcare Staffing revenues were $39.6 million, down 1.7% sequentially, and represented 57.6% of total revenues. Within Healthcare Staffing Nurse Travel revenues were $26.9 million, down 6.1 sequentially, and represented 39.2% of total revenues. Excluding $211,000 in revenues derived from staffing hospitals experiencing labor disruptions in the first quarter, Nurse Travel revenues were down 5.4% sequentially. MF&A revenues were $12.6 million, up 9.1% sequentially, and comprised 18.4% of total revenue. Conversion and Direct Hire revenues totaled $1.7 million, compared with $963,000 for Q2, 2005, and $1 million in Q1, 2006. Conversion and Direct Hire revenues represented 2.5% of total revenues, versus 1.7% for Q2 of 2005 and 1.5% in Q1 2006. Consolidated gross profit was $19.3 million for the quarter, compared with $15.3 million in the year-ago period and $17 million in the previous quarter. Consolidated gross margin was 28.1%, compared with 26.7% in Q2, 2005, and 25.5% in Q1 2006.

醫療人力派遣（Healthcare Staffing）營收為3,960萬美元，較前一季下降1.7%，占總營收的57.6%。在醫療人力派遣中，護理差旅（Nurse Travel）營收為2,690萬美元，較前一季下降6.1%，占總營收的39.2%。若排除第一季因為為發生勞資糾紛的醫院提供人力派遣所產生的21.1萬美元營收，護理差旅營收較前一季下降5.4%。MF&A營收為1,260萬美元，較前一季成長9.1%，占總營收的18.4%。轉任（Conversion）與直接聘僱（Direct Hire）營收合計170萬美元，相較之下，2005年第二季為96.3萬美元，2006年第一季為100萬美元。轉任與直接聘僱營收占總營收的2.5%，相較之下，2005年第二季為1.7%，2006年第一季為1.5%。本季合併毛利為1,930萬美元，相較去年同期為1,530萬美元、前一季為1,700萬美元。合併毛利率為28.1%，相較之下，2005年第二季為26.7%，2006年第一季為25.5%。

Lab Support gross profit was $9.7 million for the quarter, which was a gross margin of 33.4% compared to 31.6% for Q2 2005 and 30.5% for Q1 2006. The 180-basis point increase year over year was primarily related to lower Workers' Comp expense, lower appreciation and holiday pay expense, and higher Direct Hire revenues. Healthcare Staffing gross profit was $9.6 million for the quarter, which was a gross margin of 24.1% compared to 23.2% for 2Q 2005 and 22.1% for Q1 2006. Within the Healthcare Staffing segment, Nurse Travel gross profit was $5.6 million, which was a gross margin of 20.7%, flat to Q2 2005 and up from 20.2% for Q1 2006. For MF&A, gross profit was $4 million for the quarter, which was a gross margin of 31.5%, compared with 25.8% for Q2 2005 and 27% for Q1 2006. A 170-basis point increase year over year was primarily related to higher bill pay spreads, lower appreciation and holiday pay expense, and higher conversion revenues. These favorable adjustments were partially offset by increased expenses related to Workers' Comp and higher travel and housing costs for contract professionals.

本季實驗室支援（Lab Support）毛利為970萬美元，毛利率為33.4%，相較之下，2005年第二季為31.6%，2006年第一季為30.5%。年增180個基點主要與較低的勞工補償（Workers' Comp）費用、較低的表揚與假日薪資費用，以及較高的直接聘僱（Direct Hire）營收有關。本季醫療人力派遣（Healthcare Staffing）毛利為960萬美元，毛利率為24.1%，相較之下，2005年第二季為23.2%，2006年第一季為22.1%。在醫療人力派遣部門內，護理差旅（Nurse Travel）毛利為560萬美元，毛利率為20.7%，與2005年第二季持平，並高於2006年第一季的20.2%。就MF&A而言，本季毛利為400萬美元，毛利率為31.5%，相較之下，2005年第二季為25.8%，2006年第一季為27%。年增170個基點主要與較高的計費與支付價差（bill pay spreads）、較低的表揚與假日薪資費用，以及較高的轉任營收有關。上述有利調整部分被與勞工補償（Workers' Comp）相關的費用增加，以及合約專業人員較高的差旅與住宿成本所抵銷。

Total SG&A expense for the second quarter was $16.6 million, or 24.2% of total revenues. Excluding $555,000 related of FAS 123(R) expense, SG&A expense was $16.1 million, or 23.4% of total revenues. For Q2, 2005, SG&A was $15.6 million, or 27.1% of revenues, and did not include FAS 123(R) expense. The year-over-year increase was primarily tew to a higher number of staffing consultants and commissions due to higher revenues. The sequential increase in SG&A was $86,000, excluding accelerated depreciation in the first quarter and FAS 123(R) expense. Depreciation expense for the quarter was $1 million compared with $1 million in Q2, 2005, and $1.5 million for Q1 2006. Amortization expense in the quarter decreased to $237,000 from $282,000 in the year-ago period, and was $235,000 for Q1 2006. The year-over-year decrease was primarily due to the step down amortization of our identifiable intangible assets. Our operating income was $2.6 million for the quarter, compared with an operating loss of $221,000 for Q2 2005, a year-over-year improvement of $2.8 million.

第二季總銷售、一般及行政（SG&A）費用為1,660萬美元，占總營收的24.2%。若排除與FAS 123(R)費用相關的55.5萬美元，SG&A費用為1,610萬美元，占總營收的23.4%。2005年第二季SG&A為1,560萬美元，占營收的27.1%，且未包含FAS 123(R)費用。年增主要是由於人力派遣顧問人數增加，以及因營收較高而產生的佣金增加。若排除第一季的加速折舊以及FAS 123(R)費用，SG&A較前一季增加8.6萬美元。本季折舊費用為100萬美元，相較之下，2005年第二季為100萬美元，2006年第一季為150萬美元。本季攤銷費用由去年同期的28.2萬美元降至23.7萬美元，2006年第一季為23.5萬美元。年減主要是由於我們可辨認無形資產的攤銷逐步下降（step down amortization）。本季營業利益為260萬美元，相較之下，2005年第二季為營業損失22.1萬美元，年增改善280萬美元。

We believe it is meaningful to compare EBITDA when comparing the current quarter's results to prior quarters. EBITDA for the quarter was $3.9 million. Excluding FAS 123[R] expense of $555,000, adjusted EBITDA was $4.4 million, compared with $1.1 million for 2005 and $2.3 million in Q1 2006, excluding $459,000 in FAS 123(R) expense. We ended the quarter with cash, cash equivalents and restricted cash of $33.8 million, up from $27.4 million for the preceding quarter. For the quarter, cash provided by operations was $6.9 million, cash provided by stock option exercises was $630,000, and cash used for investing activities was $1.9 million. CapEx was $660,000, down from $1.6 million in the prior quarter, due to completion of our front office IT project for Lab U.S. and MF&A. Net accounts receivable were $35.1 million at the end of the second quarter, a decrease of approximately $2.1 million sequentially. On a consolidated basis, days sales outstanding were 48 days, down from 52 days in the prior quarter. During the quarter, there were no repurchases of our shares in the open market.

我們認為，在將本季業績與前幾季比較時，對 EBITDA 進行比較是有意義的。本季 EBITDA 為 390 萬美元。扣除 FAS 123[R] 費用 55.5 萬美元後，調整後 EBITDA 為 440 萬美元；相較之下，2005 年為 110 萬美元，而 2006 年第一季為 230 萬美元（均已扣除 FAS 123(R) 費用 45.9 萬美元）。本季結束時，我們的現金、約當現金及受限制現金為 3,380 萬美元，高於前一季的 2,740 萬美元。本季營運活動提供的現金為 690 萬美元，員工認股權行使提供的現金為 63 萬美元，用於投資活動的現金為 190 萬美元。資本支出（CapEx）為 66 萬美元，低於前一季的 160 萬美元，原因是我們為 Lab U.S. 與 MF&A 的前台 IT 專案已完成。第二季末淨應收帳款為 3,510 萬美元，較前一季約減少 210 萬美元。以合併基礎計算，應收帳款週轉天數（DSO）為 48 天，低於前一季的 52 天。本季我們未在公開市場回購公司股票。

Now turning to productivity, which we define to be the quarterly gross profit generated per staffing consultant. For the second quarter, we averaged 252 staffing consultants, including two who were dedicated to Direct Hire activity. They each generated $76,500 of gross profit, a 13.5% sequential increase and nearly 20% increase year over year. In the previous quarter, we averaged 252 staffing consultants and they each generated $67,400 in gross profit. In the year-ago period we averaged 240 staffing consultants and they each generated $63,900 in gross profit. Each staffing consultant had an average of 14.6 contract professionals out on assignment, up from 13.1 in the year-ago period and 14.1 in the previous quarter. Lab productivity was 18.1 versus 17.4 in the year ago period, and 16.9 in the previous quarter. MF&A productivity was 11.1 versus 8.6 in the year ago period and 10.1 in the previous quarter. And Nurse Travel was 12.7 versus 12.4 in the year ago period and 14.3 in the previous quarter.

接著談生產力，我們將其定義為每位派遣顧問每季所創造的毛利。第二季我們平均有 252 位派遣顧問，其中包含 2 位專責於直接招募（Direct Hire）業務。每位顧問各自創造 76,500 美元毛利，較前一季成長 13.5%，年增近 20%。上一季我們平均同樣有 252 位派遣顧問，每位創造 67,400 美元毛利。去年同期我們平均有 240 位派遣顧問，每位創造 63,900 美元毛利。每位派遣顧問平均有 14.6 位合約專業人員在外派任，較去年同期的 13.1 以及上一季的 14.1 增加。Lab 生產力為 18.1，相較去年同期 17.4，以及上一季 16.9。MF&A 生產力為 11.1，相較去年同期 8.6，以及上一季 10.1。而 Nurse Travel 為 12.7，相較去年同期 12.4，以及上一季 14.3。

Now turning to guidance. For Lab and MF&A, there were 62.5 billing days in the third quarter compared with 63.5 for Q2 2006. For Nurse Travel, there were 92 days compared with 91 days in Q2 2006. Based on the first three weeks of the third quarter of 2006, we currently expect revenues of $73.5 to $74.5 million for the quarter ending September 30, 2006. We are projecting consolidated gross margin of 27.5% to 28% and SG&A of $16.2 to $16.6 million, including depreciation and amortization of $1.4 million, and excluding approximately $850,000 in FAS 123(R) expense. Using an effective tax rate of 30%, we project earnings per share of $0.08 to $0.10, which includes FAS 123(R) expense of approximately $0.02 per share.

接著談財測指引。就 Lab 與 MF&A 而言，第三季有 62.5 個計費日，較 2006 年第二季的 63.5 個計費日為少。就 Nurse Travel 而言，有 92 天，較 2006 年第二季的 91 天為多。根據 2006 年第三季前 3 週的表現，我們目前預期截至 2006 年 9 月 30 日止之季度營收為 7,350 萬至 7,450 萬美元。我們預估合併毛利率為 27.5% 至 28%，SG&A 為 1,620 萬至 1,660 萬美元（包含折舊與攤銷 140 萬美元），並排除約 85 萬美元的 FAS 123(R) 費用。以有效稅率 30% 計算，我們預估每股盈餘為 0.08 至 0.10 美元，其中包含約每股 0.02 美元的 FAS 123(R) 費用。

For the year, assuming fairly stable labor markets and no loss of major clients in Nurse Travel, we are raising our guidance for revenues to $279 to $282 million from $270 to $275 million, which represents growth of 17.3% to 18.6% over 2005. We are projecting average gross margin for the year of approximately 27%, SG&A of $64.5 to $65.5 million, excluding $2.6 to $2.8 million in FAS 123(R) expense, and raising our earnings per share guidance to $0.21 to $0.24 from $0.15 to $0.18, including FAS 123(R) expense of $0.08 per share. We'll continue to review our annual guidance on a quarterly basis and update it, as appropriate. As you know, these estimates are subject to the risks mentioned in yesterday's release and at the beginning of this conference call.

就全年而言，假設勞動市場相對穩定，且 Nurse Travel 不流失主要客戶，我們將營收指引自 2.70 億至 2.75 億美元上調至 2.79 億至 2.82 億美元，代表較 2005 年成長 17.3% 至 18.6%。我們預估全年平均毛利率約為 27%，SG&A 為 6,450 萬至 6,550 萬美元（不含 260 萬至 280 萬美元的 FAS 123(R) 費用），並將每股盈餘指引自 0.15 至 0.18 美元上調至 0.21 至 0.24 美元，其中包含每股 0.08 美元的 FAS 123(R) 費用。我們將持續以季度為基礎檢視年度指引，並在適當時更新。如各位所知，這些估計值仍受昨日新聞稿及本次電話會議開場提及之風險影響。

Now back to Pete for some closing comments before we open up the lines for questions.

接下來在開放提問之前，交回給 Pete 做一些結語。

Thanks, Mike. On Assignment's growth opportunities still continue to be largely dependent on our internal execution and not on any improvement in the end markets we serve. This quarter's performance substantiates the strength of our diversified business model and are a direct result of the operational and management changes we have made over the last 30 months. Would like to once again thank our many loyal, dedicated, and talented employees whose efforts have allowed us to progress to where we are today.

謝謝你，Mike。On Assignment 的成長機會仍主要取決於我們內部的執行力，而非我們所服務終端市場的任何改善。本季表現印證了我們多元化商業模式的強韌性，並且是我們在過去 30 個月所做的營運與管理變革的直接成果。我想再次感謝我們眾多忠誠、敬業且才華洋溢的員工，正是他們的努力讓我們得以進展到今天的成果。

So I'd like to now open the call up to participants for questions. Operator?

那麼我現在想開放電話會議讓與會者提問。接線員？

[OPERATOR INSTRUCTIONS] And your first question comes from Jim Janesky.

[接線員指示] 第一個問題來自 Jim Janesky。

Yes, good morning. I have a couple of questions. My first one is for Emmett. Emmett, can you give us an idea of what's driving the growth within Lab Support? Is it market share? Is it the end markets growing? A combination of both? Just give us an idea of what the trends are.

是的，早安。我有幾個問題。第一個是問 Emmett 的。Emmett，你能否讓我們了解一下，Lab Support 內部成長的驅動因素是什麼？是市占率嗎？是終端市場在成長嗎？還是兩者兼具？請讓我們了解一下趨勢。

Good morning, Jim. I think the driver is the combination of both. We have strong markets, and another thing is we have great contract awards that we're executing well on, that are adding momentum to the business. Also, people are ramping up. We hired some people, we invested in the Company and they're ramping up. So there's strong demand for our services. We're in good markets -- you know, biotechnology, pharmaceutical, food and beverage. These markets are growing and we're capturing that. Also, it's our focus on certain markets, too; the small middle market where we're getting more traction. And overall, everybody's just executing well. We have good leaders that are holding people accountable. We have metrics in place and incentive programs to drive the performance.

早安，Jim。我認為驅動因素是兩者的結合。我們所處市場很強勁；另外，我們也拿到一些大型合約並且執行得很好，為業務增添動能。此外，人員也在加速到位。我們招募了一些人、對公司進行投資，而他們正在逐步上手、提升產能。因此，我們的服務需求相當強。我們所在的市場不錯——例如生物科技、製藥、食品與飲料。這些市場正在成長，而我們正在掌握這些機會。同時，我們也聚焦於特定市場；也就是我們正在取得更多進展的中小型中端市場。整體而言，每個人都執行得很好。我們有優秀的領導者，能讓大家對成果負責。我們建立了衡量指標與獎勵制度，以推動績效表現。

You know, Jim, I would just add -- this is Pete. I mean, you've followed the Company probably longer than most, but Lab Support brand is probably one of the strongest specialty brands in the staffing industry. And we've got the right management and the right staffing consultants, and we're really regaining market share, along with just the expanding economic environment.

你知道，Jim，我再補充一下——我是 Pete。我的意思是，你追蹤這家公司可能比多數人都久，但 Lab Support 品牌大概是人力派遣產業中最強的專業品牌之一。而且我們有合適的管理團隊與合適的派遣顧問；在經濟環境擴張的同時，我們也確實正在重新奪回市占率。

All right. Thanks. Shifting to Shawn, did you say that there were no labor disruption revenues this quarter, Shawn?

好的。謝謝。轉到 Shawn，你是說這一季沒有任何勞資中斷（labor disruption）相關營收嗎，Shawn？

That's correct, Jim.

沒錯，Jim。

Okay. And something I wanted to follow up on was a comment that you made. You do expect the supply of nurses to loosen up in the -- supply of nurses willing to travel, I think is a better way of putting it, to loosen up in the second half of the year. What do you think is going on in that area that's going to loosen up that supply?

好的。另外我想追問一下你剛才提到的一點。你確實預期護理人力的供給會在——更精確地說，是願意外派（travel）的護理人員供給——在今年下半年變得寬鬆一些。你認為那個領域發生了什麼，會讓供給變得更寬鬆？

Good question, Jim. First off, it's a general market trend. In the second half of the year, generally there are more nurses that looking to take on travel assignments, as they end through the summertime and move into the third quarter. Secondly, we seem to see our applicant flow, based on some of the things we're doing from a marketing perspective right now, that are really opening up the doors for us to be able to provide opportunities for nurses in a great demand market space right now. So we see our applicant flow increasing. We see some of the just general market trends moving in the right direction. And as nurses exit the summertime, we're starting to see a bigger applicant pool entering our market space.

好問題，Jim。首先，這是一個整體市場趨勢。一般來說，下半年會有更多護理人員在暑期結束、進入第三季時，開始尋找外派任務。其次，從我們目前在行銷面所做的一些事情來看，我們似乎看到應徵者流量正在增加，這些作法確實為我們打開了大門，使我們能在目前需求非常強勁的市場中，為護理人員提供更多機會。因此我們看到應徵者流量上升。我們也看到一些整體市場趨勢朝正向發展。而當護理人員結束暑期後，我們開始看到更大的應徵者池進入我們的市場。

Okay. And that makes sense that, you know, as we -- as these assignments do take sometimes a little bit of time to organize, there is more of a seasonal flow as we -- I know, no one can think when it's like 150 degrees here on the East Coast about colder months, but that movement into warmer areas. But are you at all looking out towards the -- you know, the seasonal impact towards the end of the year in some of the, you know, vacation parts of the country? Or just give us an idea of what the trends are in volume, because, frankly, it appears as if you folks are outgrowing the market on the volume side and are in line, maybe, on the pricing side.

好的。這也合理，因為你知道，這些任務有時需要一點時間來安排，所以會有比較明顯的季節性流動——我知道，當東岸這裡熱到像 150 度時，沒人會去想冷的月份——但確實會有往較溫暖地區移動的情況。不過你們是否也在關注——你知道——年底在國內一些度假地區的季節性影響？或者請你們談談量的趨勢，因為坦白說，看起來你們在量的成長上似乎跑贏市場，而在價格面可能只是跟市場差不多。

Yes. I mean, Jim -- this is Pete, I would tell you that our volume growth has to do with direct correlation to expansion of our client list. We are trying to avoid these kind of temporary spikes because of fluctuations, because of a flu season or because the snow birds. This is all directly related to volume growth created by new clients and our value proposition. We're not trying to pick up 150 nurses at Cedar Sinai Hospital. We're trying to pick up the ten to 15 most difficult assignments with the highest skill sets, and that's what's driving it.

是的。我是說，Jim——我是 Pete，我會告訴你，我們的量的成長與客戶名單的擴張有直接的相關性。我們正試著避免因波動而出現這種短期尖峰，例如流感季，或是候鳥族（snow birds）。這完全是由新客戶與我們的價值主張所帶來的量的成長。我們不是要在 Cedar Sinai Hospital 一口氣補進 150 名護理人員。我們要的是拿下最困難、技能要求最高的 10 到 15 個任務，而這才是驅動成長的因素。

Okay. And then a question for you, Pete. What are -- you know, from the whole Company perspective, is there any hesitation on the part of clients due to economic trends and concerns and so there's any type of pull-back in demand? Or I guess, even directional nervousness as the quarter progressed and as you went into the third quarter?

好的。接著有個問題想問你，Pete。從整個公司角度來看，客戶端是否因為經濟趨勢與擔憂而有所猶豫，因而出現任何需求回縮？或者我想說，隨著本季推進、進入第三季時，是否出現任何方向性的緊張情緒？

I'll give you my experience here at On Assignment and then my broader staffing experience. The things that we look for in a staff augmentation environment is cancellation of projects, delay of projects, lengthening of decision making with regard to candidates that are presented, slowdown in conversion or firm placement fees. We've seen none of that. All we have seen is a strengthening in demand and an increase in our headcount. And a lot of our contracts, in like some of the other companies or the commercial staffing companies, are longer-term assignments. So, you know, people haven't pulled back yet. They're not seeing it in their business. They still have work that has to be delivered to their superiors, and they're continuing to execute on their business plan. The public equity markets are saying that the expansion cycle is over with, but I think I remember someone telling me a long time ago that Wall Street's collectively -- correctly predicted 13 out of the last six recessions. [LAUGHTER]

我先分享我在 On Assignment 的經驗，再談我更廣泛的人力派遣經驗。在增補人力（staff augmentation）的環境中，我們會觀察的指標包括：專案取消、專案延後、對已推薦候選人的決策時間拉長、轉正（conversion）或正式安置費（firm placement fees）放緩。我們完全沒有看到這些情況。我們看到的只有需求轉強，以及我們的人數增加。而且我們很多合約，跟一些其他公司或商業派遣公司一樣，都是較長期的派遣任務。所以，你知道，人們還沒有縮手。他們在自己的業務裡也還沒看到那種情況。他們仍有必須交付給上級的工作，並且持續執行他們的營運計畫。公開股票市場在說擴張循環已經結束，但我記得很久以前有人跟我說過，華爾街集體——正確地——預測了過去六次衰退中的 13 次。[笑聲]

Yes, okay. Thanks.

是的，好的。謝謝。

Your next question comes from Tobey Sommer with SunTrust Robinson Humphrey.

下一個問題來自 SunTrust Robinson Humphrey 的 Tobey Sommer。

Thanks. I wanted to ask a question about your cash flow and balance sheet. The performance in the quarter, cash from operations, was very good. Want to know, you know, kind of if you expect cash from operations to continue to track nicely over the balance of the year, given your revised guidance for profitability? Peter, maybe looking at the balance sheet, shoring up that cash position even further, how do you look to deploy that? What do things look like out in the acquisition market? Thanks.

謝謝。我想問一個關於你們現金流與資產負債表的問題。本季的表現、營運活動現金流非常好。想了解一下，考量你們修正後的獲利指引，你們是否預期營運活動現金流在今年剩餘期間仍能維持良好走勢？Peter，另外從資產負債表角度來看，若要進一步強化現金部位，你們打算如何運用？併購市場那邊的情況如何？謝謝。

Yes, we -- On Assignment is a great little cash generator. We've gotten through this prior excessive CapEx spending, and we've also gotten through some required CapEx spending in '06 for our front office system. But if you remember back, Tobey, this Company, from basically 1992 through 2000 generated $110 million in free cash that found its way onto the balance sheet. So this is a little cash generator. So we fully expect that, absent our working capital needs, that we'll continue to generate positive cash.

是的，我們——On Assignment 是個很棒的小型現金產生器。我們已經度過先前過度的資本支出（CapEx）投入，也完成了 2006 年為前台系統所需的一些必要資本支出。但如果你還記得，Tobey，這家公司從大約 1992 年到 2000 年，產生了 1.10 億美元的自由現金流，最後都累積在資產負債表上。所以這是一個小型現金產生器。因此我們完全預期，扣除營運資金需求之外，我們將持續產生正向現金流。

With regard to acquisitions, you know, we feel that we're acquisition ready, meaning that we've got our front-end systems and our back-end systems working appropriately, that we could accretively add revenues to our existing portfolio of services, and effectively cut out some back office costs that would accrete to us. You know, the pricing environment is still rather robust. We're seeing financial buyers outbidding strategic buyers, but we will find the right thing. We have the benefit of being able to post the type of organic growth, and we don't have a positioning problem, so we're being very patient. We filed a shelf, and we really have no immediate needs or plans to do anything with the shelf, especially at this price. It's just -- doesn't make any sense to raise capital at these prices. But we were going to prefund our acquisition program. We're not going to take any risk on the capital side, whether it's raising capital at a low price or putting an excessive amount of debt to EBITDA ratios on the Company. We are see going opportunities. We're just being very patient about it.

至於併購，你知道，我們覺得我們已經準備好進行併購，也就是說，我們的前端系統與後端系統都運作得很到位，我們可以以增益（accretive）的方式把營收加到既有的服務組合中，並有效削減一些後勤成本，進而對我們帶來增益。你知道，目前的估值／價格環境仍相當強勁。我們看到財務型買家出價高於策略型買家，但我們會找到合適的標的。我們的優勢在於能交出這種有機成長，而且我們沒有定位問題，所以我們非常有耐心。我們已提交 shelf registration（擱置式註冊），而且我們目前沒有任何立即需求或計畫要動用這個 shelf，尤其是在這個價格水準下。這只是——在這些價格下募資完全沒有意義。但我們原本是打算為併購計畫預先籌資（prefund）。我們不會在資本面承擔任何風險，不管是在低價時募資，或是讓公司承擔過高的債務對 EBITDA 比率。我們確實看到一些機會。只是我們在這方面非常有耐心。

Maybe shifting gears a little bit and looking at your revised revenue guidance for the balance of the year, understand some of the diversification in the Travel Nurse side, which gives you optimism. Are you getting a further visibility in terms of how far out your orders are stretching? Any changes in either assignment length or how far out you're getting an order for a temporary assignment?

換個角度，看看你們對今年剩餘期間修正後的營收指引，我理解 Travel Nurse 業務端的一些多元化讓你們更樂觀。就可見度而言，你們是否能看得更遠，例如訂單能延伸到多遠？在派遣任務的長度，或是你們能提前多久拿到臨時派遣訂單方面，有沒有任何變化？

Yes, I mean, that's a good question. I don't think our orders -- the initial contracted order is elongating, but I think our reassignment and the number of, as we say, tours of duty that a nurse does at a given hospital have increased, which means that, you know, I guess the hospital has more visibility, because they're -- even though they're keeping the assignment a certain length, they're renewing it on a more frequent basis. So that gives us, you know, comfort that the customer is more predictable with regard to their ongoing demand. But we haven't seen kind of a sea shift change in how the hospitals are viewing the length of assignments. And I think that may be particular to us because of our business model.

是的，我是說，這是個好問題。我不認為我們的訂單——最初簽約的訂單——有拉長，但我認為我們的續派（reassignment）以及我們所說的護理人員在某家醫院執行的「任務輪次」（tours of duty）數量增加了；這表示，你知道，我想醫院的可見度更高，因為——即使他們把每次任務維持在一定的長度，他們也更頻繁地續約。因此這讓我們更有信心，客戶在持續需求方面更可預測。但我們沒有看到醫院對任務長度的看法出現那種結構性的大轉變。而我認為這可能也與我們的商業模式有關。

Right. Thanks. The gross margin kind of surprised us in terms of being a little bit better in -- I was wondering if could you kind of parse out the drivers there? I know you touched on it in your prepared remarks between, you know, bill and pay rate spread, and then maybe some of the things internally that you've talked about in the past in terms of, you know, some opportunities for you to harvest a little bit more margin. If could you add a little color there, that would be great.

對。謝謝。毛利率有點讓我們意外，表現比預期稍微好一些——我想請問你能否拆解一下背後的驅動因素？我知道你在事先準備的發言中有提到，像是帳單費率與支付費率之間的價差，另外也可能有一些你們過去談過的內部因素，例如有些機會可以多收割一點毛利。如果你能再補充一些細節就太好了。

Yes, a couple of things. The number one driver, we've been very thoughtful and have implemented a pretty consistent billing -- or pricing discussion with our customers, And we've had some success in raising our bill rates with our customers in a collaborative fashion. The second thing is on the cost of services, we had better Workers' Comp expense. We continue to only try to sell quality business. We're pretty unique with regard to our risk management. We actually -- unlike a lot of staffing companies, we actually do site reviews as to the safety of the environment we're putting our temp in. So we think that the Workers' Comp trends will continue, going forward.

是的，有幾個因素。第一大驅動因素是，我們一直很審慎，並且已經與客戶建立並落實相當一致的開票——或定價——溝通機制；我們也以協作的方式，成功把對客戶的開票費率提高了一些。第二點是在服務成本方面，我們的勞工補償保險（Workers' Comp）費用表現更好。我們持續只嘗試銷售高品質的業務。在風險管理方面我們相當獨特。事實上——不同於許多人力派遣公司——我們會做現場勘查，確認我們派遣臨時人員所處環境的安全性。因此我們認為勞工補償的趨勢在未來仍會延續。

We did make some changes to some appreciation holiday pay. We were -- we were some pioneers with regard to appreciation and holiday pay, and had not revisited those programs in about ten years. And we revised them,and it provided a positive impact to our income statement. And even with the revisions, we're still better than the majority of the staffing industry with regard to how lucrative the programs are. And just finally, you know, it's just a better pricing environment. We did have a little impact, as well, from higher conversion and perm placement revenues.

我們也對員工表揚獎金與假日薪資做了一些調整。我們——我們在表揚獎金與假日薪資方面算是先行者，但大約十年都沒有重新檢視這些方案。我們做了修訂，並對損益表帶來正面影響。即使修訂後，就這些方案的優渥程度而言，我們仍優於多數人力派遣產業同業。最後，你知道，整體就是更好的定價環境。此外，較高的轉任（conversion）與永久派遣（perm placement）收入也帶來了一點影響。

Well, you dovetailed into my follow-up question, then I'll get back in the queue. It would be any changes in your thoughts as to how big you'd like to have conversion and perm fees be as a percentage of revenue? And then, does your guidance incorporate any kind of strike or any other kind of revenue in there? Thanks.

好，你剛好接到我接下來的追問，那我問完就回到隊列。你們對於轉任與永久派遣費用占營收比重希望達到多大，想法有沒有任何改變？另外，你們的財測是否有納入任何罷工相關或其他類型的收入？謝謝。

We never predict strike revenue, nor do we ever budget it. We really use that as a tool to stay close to our customers, so we're not out seeking it. We actually react to inbound calls for it. The second thing is, with regard perm placement, we've publicly stated to our investors that we think that we never want to get much more than 3.5%, 5%. Perm placement is extremely lucrative right now, but as you know, it's kind of an all-or-none service offering. And with us being able to maintain the type of margins we do on contract labor, we just don't think we need to layer that type of risk object to generate the type of operating leverage and profitability leverage that we think this business can generate. So we haven't changed our view of, you know, 3.5% to 5% max.

我們從不預測罷工收入，也從不把它編入預算。我們主要把它當作與客戶保持緊密關係的工具，所以我們不會主動去尋找這類業務。我們其實是對客戶打進來的需求做出回應。第二點，關於永久派遣，我們已公開對投資人表示，我們認為占比不希望高於約3.5%到5%。永久派遣目前確實非常賺錢，但如你所知，它有點像是全有或全無的服務型態。而且我們能在合約派遣勞務上維持目前這樣的毛利水準，我們不認為有必要再疊加那種風險屬性，來產生我們認為這個業務能帶來的營運槓桿與獲利槓桿。所以我們對於上限3.5%到5%的看法沒有改變。

Thanks a lot, Peter.

非常感謝，Peter。

Your next question comes from Josh Vogel.

下一個問題來自 Josh Vogel。

Hi. Good morning, fellows. Have you thought about maybe looking at the temporary physician sector? I think the industry term is locum tenants.

嗨。各位早安。你們有沒有考慮過看看臨時醫師這個領域？我想業界術語叫 locum tenants。

Yes, Josh, we look at -- we do strategic thinking about all the lines of business and that's a very nice line of business. My preference would be to find a higher-margin business that has lower risk, i.e. no malpractice, that's also a bigger annual spend. I think the staffing industry report pegs it at kind of a 12% growth and $1.4 billion. When you look at other sectors that have multi, multi-billion dollar annual spend, I think there are other areas we can go into. The other thing is that a lot of the locums business has a retained search feature to it, and a lot of people think that retained search in healthcare is a lot more insulated and defensive than the other industries. But we're trying to have the vast majority of our revenues generated from contract ongoing assignments versus retained search or permanent placement.

有的，Josh，我們會——我們會對所有業務線做策略性思考，而那確實是一條很不錯的業務線。但我個人偏好尋找毛利更高、風險更低的業務，例如沒有醫療疏失（malpractice）風險，同時年度支出規模也更大。我記得人力派遣產業報告把它估在大約12%的成長、規模約14億美元。當你看其他一些年度支出達到數十億美元的領域，我認為我們還有其他可以切入的方向。另外，很多 locums 業務帶有保留式搜尋（retained search）的特性，許多人認為醫療保健的保留式搜尋比其他產業更具防禦性、更不受景氣影響。但我們希望絕大多數營收來自合約型、持續性的派遣任務，而不是保留式搜尋或永久派遣。

Okay. That's helpful. I guess this question's more for Emmett. We had the strong year over year sequential jump in gross margins in Lab Support. I was just wondering if could you go into more detail into which business lines within the segment specifically drove this margin expansion?

了解。這很有幫助。我想這個問題比較是問 Emmett。我們看到 Lab Support 的毛利率年比、季比都有很強勁的跳升。我想請問你能否更詳細說明，是該部門內哪些業務線特別帶動了這次毛利擴張？

All three business lines. Lab Support is really a majority of the business that we're reporting on. Clinical Research and Engineering are fairly newer business, but all contribute to the overall margin. Back to what Peter said, we improved our margins, modifying our appreciation pay and our holiday pay program. But also there's been a great embracement of direct hire with all three divisions and greater conversion activity. But we have a very good pricing culture in Lab Support. Everyone is committed to maximizing their gross margins. We have also incentive programs that drive the desired behavior, as well. So I would single out, probably, our cost of services, our pricing culture, direct hire, and new business operations.

三條業務線都有。Lab Support 其實占了我們所揭露業務的大多數。臨床研究（Clinical Research）與工程（Engineering）是相對較新的業務，但也都對整體毛利有所貢獻。回到 Peter 剛才說的，我們透過調整表揚獎金與假日薪資方案來改善毛利。此外，三個事業部對直接雇用（direct hire）的接受度大幅提升，轉任活動也更活躍。但我們在 Lab Support 有非常好的定價文化。每個人都致力於把毛利率最大化。我們也有激勵方案來驅動所期望的行為。所以如果要我點出幾個重點，我會說是服務成本、定價文化、直接雇用，以及新業務營運。

Okay. And just finally, as we look in the third quarter, are there any seasonal factors that should contribute to strength or weakness in each of the segments, and could you just go over a broad overview there?

了解。最後，展望第三季，各部門是否有任何季節性因素會造成強或弱？你能否就此做一個概括性的說明？

Let me start, and then, Mike, you can remind them the number of billable days and if there's any differential. But typically, Josh, here at On Assignment, our third quarter is the strongest for Lab Support and MF&A. First is typically our seasonally weakest, and the third is typically our seasonally strongest. On number of billable days, Mike?

我先說明，然後 Mike 你可以提醒他們可計費天數，以及是否有任何差異。不過通常，Josh，在 On Assignment 這裡，我們第三季對 Lab Support 與 MF&A 來說是最強的一季。第一季通常是季節性最弱，第三季通常是季節性最強。至於可計費天數，Mike？

Yes, we have one fewer for the legacy lines of business. It's now down to 62.5 from 63.5.

是的，傳統業務線少了一天。現在從63.5降到62.5。

That's based on number of holidays, Josh.

這是依假日天數來算的，Josh。

And then there's actually one additional day for Nurse Travel.

另外，Nurse Travel 則是多了一天。

Okay. Great. That's helpful. Thank you.

了解。很好。這很有幫助。謝謝。

Yes.

是的。

Your next question comes from Jeff Silber.

下一個問題來自 Jeff Silber。

Looking at your guidance for the remainder of the year and backing out the third quarter, it looks like you're looking for a sequential drop, or slight sequential drop in revenues in the fourth quarter. Again, is that seasonality related?

看你們對今年剩餘期間的財測，並把第三季扣除後，看起來你們預期第四季營收會季比下滑，或小幅季比下滑。同樣地，這是季節性因素所致嗎？

Yes, Jeff, good morning. A couple of things. The first thing, Jeff, I would say, is that, you know, you have the Christmas and Thanksgiving holidays, and Nurse -- in the Nurse Travel business, it's just hard to predict how many of the nurses just flat say, I want to go home and not be in an apartment in San Diego on December 24th through January 1. So we're always a little more conservative than normal, because we just don't know how that's going to swing. If you look at our historical performance in '05 and see what the sequential drop fourth over third was, when you exclude the strike revenue that we had in the third quarter of '05, it wasn't a big -- it wasn't a big drop. But for the time being, we think that the guidance we've given is an appropriate guidance. And then on the third quarter conference call, if things are shaping up differently, we'll revise.

是的，Jeff，早安。有幾點。第一點，Jeff，我會說，你知道，有聖誕節和感恩節假期，而在護理師差旅（Nurse Travel）業務中，很難預測有多少護理師會直接說：我想回家，而不是在 12 月 24 日到 1 月 1 日期間待在聖地牙哥的一間公寓裡。所以我們一向會比平常更保守一些，因為我們不知道這會怎麼擺動。如果你看我們 2005 年的歷史表現，看看第四季相較第三季的連續下滑幅度，當你排除 2005 年第三季我們的罷工收入後，其實不是很大——不是很大的下滑。但就目前而言，我們認為我們給出的指引是適當的指引。然後在第三季法說會上，如果情況呈現不同走勢，我們會修正。

Jeff,there is -- for the legacy lines of business, there's one fewer business days. And then we also get impacted by plant closures between Christmas and New Year's at some of our clients.

Jeff，對於既有業務線（legacy lines of business），營業日少了一天。另外，我們也會受到部分客戶在聖誕節到新年期間工廠停工的影響。

Okay. Great. That's helpful. Just one question on the income statement. The tax rate was a little bit higher than we had projected. Was there something going on in the quarter that's in the going to continue?

好的。很好。這很有幫助。關於損益表我只有一個問題。稅率比我們預估的稍微高一些。本季是不是有什麼因素，而且會持續下去？

Yes, we actually closed two IRS audits, and related -- there weren't any adjustments for the '04 audit but in the '03, there was -- we had a receivable $100,000 higher. It was a timing difference. Normally, we would have recorded a deferred tax asset, but given that we have a full valuation allowance against those, we had to run it through the provision. So it's a timing difference. We think we'll get the benefit down the road. It's just because of a valuation allowance, we had to record it in the quarter.

是的，我們實際上結案了兩個 IRS（美國國稅局）稽核，相關——2004 年的稽核沒有任何調整，但在 2003 年，有——我們的應收款項高了 10 萬美元。那是時間性差異。通常我們會認列遞延所得稅資產，但由於我們對那些項目有全額估值備抵（full valuation allowance），所以必須透過所得稅費用（provision）入帳。所以這是時間性差異。我們認為之後會取得這個利益。只是因為有估值備抵，我們必須在本季認列。

Okay, great. And just getting back to the core business, you mentioned the range of bill rate increases. Can you give us some comparable pay rate increases?

好的，很好。回到核心業務，你提到帳單費率（bill rate）上調的區間。你能給我們一些可比的薪資費率（pay rate）上調幅度嗎？

Yes, Mike?

是的，Mike？

Yes, overall the weighted average was 3.9%. Breaking out by segment, Lab was 5.8%, MF&A 2.8%, and Nurse Travel 2.2%.

是的，整體加權平均是 3.9%。按部門拆分，Lab 是 5.8%，MF&A 是 2.8%，護理師差旅（Nurse Travel）是 2.2%。

I'm sorry, is that something you expect to continue in those kind of ranges going forward?

不好意思，這是你預期未來也會在這些區間內持續嗎？

Yes. As we said in our prepared comments, wage inflation hasn't gotten out of hand to date.

是的。正如我們在事先準備的發言中所說，到目前為止薪資通膨尚未失控。

Great. Just on the Nurse Travel side, you mentioned the diversification in terms of the client base. Are you getting similar billing rates at some of these new clients relative to your legacy client?

很好。就護理師差旅這邊，你提到客戶基礎多元化。相較於你們的既有客戶，在這些新客戶那邊你們拿到的計費費率（billing rates）是否相近？

Actually, they're slightly higher.

其實略高一些。

Okay, great. Then one final one. Last quarter you gave us a little bit of an update on the PeopleSoft. [inaudible] if we can just get an update as well now?

好的，很好。最後一個。上季你們給了我們 PeopleSoft 的一些更新。[聽不清] 我們現在也可以再聽一次更新嗎？

Right. Actually the RecruitMax. PeopleSoft was rolled out 2003 and we spent all of '04 and '05 getting it corrected and properly implemented, and we feel pretty good about the platform. RecruitMax we started rolling out kind of in May of '06, and we fully implemented it, and we're tracking it, and it's flowing very well. These results that you're looking at were substantially booked off of our new RecruitMax system.

對。其實是 RecruitMax。PeopleSoft 在 2003 年上線，我們花了 2004 和 2005 年整整兩年把它修正並正確導入，我們對這個平台感覺相當不錯。RecruitMax 我們大概在 2006 年 5 月開始逐步上線，現在已經全面導入，我們也在追蹤，它運作得非常順暢。你們看到的這些結果，主要都是透過我們新的 RecruitMax 系統入帳的。

Great. Sorry I got the vendor wrong. Thanks again.

很好。抱歉我把供應商搞錯了。再次感謝。

Absolutely.

當然。

Your next question comes from -- is a follow-up question from Jim Janesky.

下一個問題來自——是 Jim Janesky 的追問。

Mike, can you give us the weekly revenue statistics that you gave earlier in the call? I missed them.

Mike，你能把你在電話會議前面提到的每週營收統計再說一次嗎？我漏聽了。

Yes. Jim, I gave those.

可以。Jim，我已經講過那些了。

Oh, okay.

喔，好。

It was -- for the last two weeks ending July 23rd -- and the reason we do that is to back out the July 4th, which, you know, causes the revenues to move around were -- I'm just flipping to my script -- were $5.6 million, excluding Conversion and Direct Placement, and for that same two-week period ending July 23rd of '05 it was 4.6.

是——截至 7 月 23 日的最後兩週——我們這麼做的原因是要把 7 月 4 日的影響扣除掉，因為你知道那會讓營收上下波動——我正在翻我的講稿——是 560 萬美元，不含 Conversion 和 Direct Placement；而在 2005 年截至 7 月 23 日的同一個兩週期間是 460 萬。

Okay. Thanks. And then a question about the gross profit per account manager. Big jump there. Where do you think that tops out in terms of average? In terms of recruiter productivity or number of temps per recruiter, I should say, you said that that could get into maybe inching toward 20, so I would imagine the gross profit metrics could go up, as well. Is that correct? Is that a correct assumption --

好的。謝謝。接著一個關於每位客戶經理的毛利問題。那裡跳升很大。你認為平均而言那會在什麼水準見頂？就招募人員生產力或每位招募人員負責的派遣人數（我應該說每位招募人員的臨時人員數）而言，你說那可能會逐步接近 20，所以我想毛利指標也可能上升。對嗎？這個假設正確嗎——

That's correct. That's correct.

正確。正確。

Okay. Alright, thank you.

好的。好，謝謝你。

[OPERATOR INSTRUCTIONS] And at this time there are no further questions.

[接線員指示] 目前沒有其他問題。

Thank you very much. We appreciate your attention to the Company and we look tore ward to reporting our next quarter results. Good-bye.

非常感謝。我們感謝各位對本公司的關注，並期待在下一季公布我們的業績。再見。

Thank you for participating in today's conference call. You may now disconnect.

感謝您參與今天的電話會議。您現在可以掛線。