Question-and-Answer Session
Operator
(Operator instructions)Your first call comes from the line of James Janesky with Stifel Nicolaus
James Janesky - Stifel Nicolaus
First question is on the margins within the IT segment, IT and engineering segments. I think looking back that these while still very strong were either among the lowest that the segment has ever reported. You mentioned that it was because of pricing, is that what it is due to and do you expect that pricing is going to remain where it is right now as you have said the gain share, or what are your plans?
Peter T. Dameris
Jim, we consciously agreed to relax the bill pay spread and not walk away from good viable business over 60-basis points or 80-basis points. What also added to the compression year-over-year, which generated 35.7% gross margin which is still the highest in the industry, is that there was really no benefit at all from conversion or perm fees which typically help a little bit in expanding the margin. And finally the relative mix as we mentioned in our prepared remarks. Our telecom group is actually flat year-over-year. There was no decline there and as you know working for telecoms that historically has been a slightly lower margin than the reported division consolidated gross margin for the IT Group.
James Janesky - Stifel Nicolaus
Did you indicate how many recruiters you have now in perm within the IT and Engineering segments and where do you think you want to take that over the next 6 months to a year?
Peter T. Dameris
Yes, I think we probably have four right now and I think we might get up to somewhere between 7 and 10 over the next 6 months. We are actually starting to tighten the margin profile up again in the IT Group. And we, unlike many other staffing firms, we have not taken any restructuring charges so, and we are actually starting to add headcount again.
James Janesky - Stifel Nicolaus
Now you said that the Fox Hill acquisition was 9 additional or permanent recruiters in the physician area, can you give us an idea of what type of rep, when you did that, when it closed and what type of revenue profile it has?
Peter T. Dameris
Yes, I will go first and I will let Mark add some operational colors to it. We acquired that about a month ago. It basically was paying someone to shut their business down and become full-time employees of our physician staffing group. I would share with you that financially it is insignificant, strategically it is very significant. I would guess that, it is less than $1 million or so on historical basis and you apply whatever growth rate you want for permanent placement. But it significantly increases our foothold in the permanent space and Mark will speak to their 25-year history and reputation, Mark?
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