asgn-20220930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-35636

ASGN Incorporated

(Exact name of registrant as specified in its charter)

Delaware

95-4023433

(State of Incorporation)

(I.R.S. Employer Identification No.)

4400 Cox Road, Suite 110

Glen Allen, Virginia 23060

(Address, including zip code, of Principal Executive Offices)

(888) 482-8068

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock

ASGN

NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

At October 31, 2022, the total number of outstanding shares of the Common Stock of ASGN Incorporated (the "Company") ($0.01 par value) was 49.9 million.

ASGN INCORPORATED AND SUBSIDIARIES

INDEX


PART I — FINANCIAL INFORMATION

Item 1 — Condensed Consolidated Financial Statements (Unaudited)			3

Condensed Consolidated Balance Sheets			3

Condensed Consolidated Statements of Operations and Comprehensive Income			4

Condensed Consolidated Statements of Stockholders’ Equity			5

Condensed Consolidated Statements of Cash Flows			6

Notes to Condensed Consolidated Financial Statements			7

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			13

Item 3 — Quantitative and Qualitative Disclosures about Market Risks			17

Item 4 — Controls and Procedures			18

PART II — OTHER INFORMATION

Item 1 — Legal Proceedings			19

Item 1A — Risk Factors			19

Item 2 — Unregistered Sales of Securities and Use of Proceeds			19

Item 3 — Defaults Upon Senior Securities			19

Item 4 — Mine Safety Disclosures			19

Item 5 — Other Information			19

Item 6 — Exhibits			20

Signature			21

PART I — FINANCIAL INFORMATION

Item 1 — Condensed Consolidated Financial Statements (Unaudited)

ASGN INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in millions, except share data)


	September 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	211.2	$	529.6
Accounts receivable, net	877.9		708.2
Prepaid expenses and income taxes	15.3		41.2
Other current assets	15.6		30.4
Total current assets	1,120.0		1,309.4
Property and equipment, net	62.3		55.0
Operating lease right-of-use assets	55.4		57.1
Identifiable intangible assets, net	545.4		487.9
Goodwill	1,805.9		1,569.5
Other non-current assets	22.2		23.9
Total assets	$	3,611.2	$	3,502.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	33.5	$	20.1
Accrued payroll	329.2		305.5
Operating lease liabilities	23.5		23.3

Other current liabilities	106.1		102.0
Total current liabilities	492.3		450.9
Long-term debt	1,080.8		1,033.9
Operating lease liabilities	37.2		40.2
Deferred income tax liabilities	98.2		89.0
Other long-term liabilities	13.6		23.4
Total liabilities	1,722.1		1,637.4
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 1.0 million shares authorized; no shares issued	—		—
Common stock, $0.01 par value; 75.0 million shares authorized; 50.0 million and 51.8 million shares outstanding at September 30, 2022 and December 31, 2021, respectively	0.5		0.5
Paid-in capital	702.7		690.8
Retained earnings	1,190.1		1,174.4
Accumulated other comprehensive loss	(4.2)		(0.3)
Total stockholders’ equity	1,889.1		1,865.4
Total liabilities and stockholders’ equity	$	3,611.2	$	3,502.8

See notes to condensed consolidated financial statements.

ASGN INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)

(in millions, except per share data)


	Three Months Ended					Nine Months Ended
	September 30,				September 30,
	2022		2021				2022		2021
Revenues	$	1,197.9	$	1,073.8			$	3,430.7	$	2,955.7
Costs of services	839.0		765.1				2,401.2		2,127.0
Gross profit	358.9		308.7				1,029.5		828.7
Selling, general and administrative expenses	232.6		192.7				665.1		533.4
Amortization of intangible assets	17.9		15.9				45.3		39.9
Operating income	108.4		100.1				319.1		255.4
Interest expense	(12.1)		(9.6)				(31.5)		(28.2)
Income before income taxes	96.3		90.5				287.6		227.2
Provision for income taxes	25.2		24.2				76.3		60.8
Income from continuing operations	71.1		66.3				211.3		166.4

Income from discontinued operations, net of income taxes	2.1		145.7				1.2		158.5
Net income	$	73.2	$	212.0			$	212.5	$	324.9

Earnings per share:
Basic —
Continuing operations	$	1.42	$	1.26			$	4.15	$	3.14
Discontinued operations	0.04		2.76				0.02		2.99
	$	1.46	$	4.02			$	4.17	$	6.13
Diluted —
Continuing operations	$	1.40	$	1.24			$	4.09	$	3.10
Discontinued operations	0.04		2.73				0.02		2.95
	$	1.44	$	3.97			$	4.11	$	6.05

Shares and share equivalents used to calculate earnings per share:
Basic	50.1		52.7				50.9		53.0
Diluted	50.7		53.4				51.6		53.7

Reconciliation of net income to comprehensive income:
Net income	$	73.2	$	212.0			$	212.5	$	324.9
Foreign currency translation adjustment	(2.2)		2.6				(3.9)		0.7
Comprehensive income	$	71.0	$