ASGN Inc (ASGN) came out with quarterly earnings of $1.45 per share, beating the Zacks Consensus Estimate of $1.37 per share. This compares to earnings of $1.51 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 5.84%. A quarter ago, it was expected that this staffing company would post earnings of $1.56 per share when it actually produced earnings of $1.68, delivering a surprise of 7.69%.Over the last four quarters, the company ...

Core Insights - Apex Systems is collaborating with Salesforce to implement Einstein, Salesforce's AI technology, to enhance customer experience and gain a competitive edge in the technology services sector [1][2] - The integration of Einstein generative AI into Apex's operations is expected to transform business results and improve client interactions [3][4] Company Overview - Apex Systems is a technology services firm that provides a range of solutions, including workforce mobilization and digital innovation, to help clients achieve their digital visions [5] - The company operates in over 70 markets across North America, Europe, and India, and is part of ASGN Incorporated [5] Industry Impact - The collaboration between Apex and Salesforce is seen as a catalyst for advancement in the IT industry, supporting sales teams and aiding in digital transformation goals for customers [4] - Salesforce's generative AI capabilities are enabling Apex to analyze data more effectively, automate processes, and create personalized marketing campaigns, thereby increasing productivity and client engagement [3]

[PART I — FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20%E2%80%94%20FINANCIAL%20INFORMATION) [Item 1 — Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201%20%E2%80%94%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the company's unaudited condensed consolidated financial statements and accompanying notes for the reported periods [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) **Condensed Consolidated Balance Sheets (in millions):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Total current assets | $993.9 | $981.1 | | Property and equipment, net | $78.6 | $66.3 | | Operating lease right-of-use assets | $60.1 | $51.1 | | Identifiable intangible assets, net | $515.7 | $569.6 | | Goodwill | $1,893.5 | $1,892.0 | | Total assets | $3,578.9 | $3,585.7 | | **Liabilities & Stockholders' Equity** | | | | Total current liabilities | $443.2 | $441.9 | | Long-term debt | $1,037.5 | $1,066.6 | | Total liabilities | $1,670.2 | $1,684.4 | | Total stockholders' equity | $1,908.7 | $1,901.3 | | Total liabilities and stockholders' equity | $3,578.9 | $3,585.7 | [Condensed Consolidated Statements of Operations and Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income) **Condensed Consolidated Statements of Operations and Comprehensive Income (in millions, except per share data):** | Item | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Revenues | $1,116.8 | $1,197.9 | $3,376.5 | $3,430.7 | | Gross profit | $322.4 | $358.9 | $975.1 | $1,029.5 | | Operating income | $98.6 | $108.4 | $280.7 | $319.1 | | Interest expense | $(18.5) | $(12.1) | $(49.7) | $(31.5) | | Income before income taxes | $80.1 | $96.3 | $231.0 | $287.6 | | Provision for income taxes | $20.7 | $25.2 | $62.0 | $76.3 | | Income from continuing operations | $59.4 | $71.1 | $169.0 | $211.3 | | Net income | $59.4 | $73.2 | $169.0 | $212.5 | | Basic EPS (Continuing operations) | $1.23 | $1.42 | $3.46 | $4.15 | | Diluted EPS (Continuing operations) | $1.23 | $1.40 | $3.43 | $4.09 | | Comprehensive income | $58.1 | $71.0 | $170.1 | $208.6 | [Condensed Consolidated Statements of Stockholders' Equity](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) - Total stockholders' equity decreased from $1,926.6 million at June 30, 2023, to **$1,908.7 million** at September 30, 2023, primarily due to stock repurchases and retirement of shares (**$92.6 million**) partially offset by net income (**$59.4 million**) and stock-based compensation expense (**$10.3 million**)[13](index=13&type=chunk) - For the nine months ended September 30, 2023, total stockholders' equity increased from $1,901.3 million at December 31, 2022, to **$1,908.7 million**, driven by net income (**$169.0 million**) and stock-based compensation expense (**$33.7 million**), partially offset by stock repurchases (**$199.6 million**)[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) **Condensed Consolidated Statements of Cash Flows (in millions):** | Cash Flow Activity | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $340.5 | $232.5 | | Net cash used in investing activities | $(33.3) | $(366.6) | | Net cash used in financing activities | $(231.6) | $(183.7) | | Net increase (decrease) in cash and cash equivalents | $75.3 | $(318.4) | | Cash and cash equivalents at end of period | $145.6 | $211.2 | - Operating cash flow significantly increased to **$340.5 million** in the first nine months of 2023, up from $232.5 million in the same period of 2022, primarily due to lower accounts receivable from decreasing revenues and improved DSO[17](index=17&type=chunk)[78](index=78&type=chunk) - Investing activities used less cash in 2023 (**$33.3 million**) compared to 2022 (**$366.6 million**), as 2022 included a **$351.8 million acquisition** (GlideFast)[17](index=17&type=chunk)[79](index=79&type=chunk) - Financing activities used **$231.6 million** in 2023, mainly for common stock repurchases (**$197.7 million**) and net debt repayments, compared to $183.7 million in 2022, which also included significant stock repurchases[17](index=17&type=chunk)[80](index=80&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. General](index=9&type=section&id=1.%20General) - The unaudited financial statements are prepared in accordance with GAAP and SEC rules, with certain information condensed or omitted; the December 31, 2022 balance sheet was derived from audited statements, and interim results are not necessarily indicative of full-year results[20](index=20&type=chunk) [2. Goodwill and Identifiable Intangible Assets](index=9&type=section&id=2.%20Goodwill%20and%20Identifiable%20Intangible%20Assets) **Goodwill by Segment (in millions):** | Segment | Dec 31, 2021 | 2022 Acquisitions | Purchase Price Adjustments | Translation Adjustment | Dec 31, 2022 | Purchase Price Adjustments | Translation Adjustment | Sep 30, 2023 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial | $829.3 | $246.4 | $0.4 | $(1.4) | $1,074.7 | — | $0.5 | $1,075.2 | | Federal Government | $740.2 | $85.5 | $(8.5) | — | $817.2 | $1.1 | — | $818.3 | | Total | $1,569.5 | $331.9 | $(8.1) | $(1.4) | $1,891.9 | $1.1 | $0.5 | $1,893.5 | **Acquired Identifiable Intangible Assets (in millions):** | Asset Type | Estimated Useful Life (Years) | Gross Carrying Amount (Sep 30, 2023) | Accumulated Amortization (Sep 30, 2023) | Net Carrying Amount (Sep 30, 2023) | Net Carrying Amount (Dec 31, 2022) | | :--- | :--- | :--- | :--- | :--- | :--- | | Customer and contractual relationships | 1 - 13 | $589.3 | $360.4 | $228.9 | $273.6 | | Contract backlog | 1 - 3 | $44.1 | $42.2 | $1.9 | $7.6 | | Non-compete agreements | 1 - 7 | $41.2 | $29.1 | $12.1 | $15.6 | | Trademarks (not subject to amortization) | N/A | $272.8 | — | $272.8 | $272.8 | | Total | | $947.4 | $431.7 | $515.7 | $569.6 | **Estimated Future Amortization Expense (in millions):** | Period | Amount | | :--- | :--- | | Remainder of 2023 | $17.9 | | 2024 | $58.1 | | 2025 | $48.8 | | 2026 | $41.8 | | 2027 | $32.0 | | Thereafter | $44.3 | | Total | $242.9 | [3. Long-Term Debt](index=11&type=section&id=3.%20Long-Term%20Debt) **Long-Term Debt (in millions):** | Item | Sep 30, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Revolving credit facility | $— | $31.5 | | Term loan B | $500.0 | $490.8 | | Unsecured Senior Notes | $550.0 | $550.0 | | Total | $1,050.0 | $1,072.3 | | Unamortized deferred loan costs | $(7.5) | $(5.7) | | Term loan B, principal payments due in next 12 months | $(5.0) | $— | | Long-term debt | $1,037.5 | $1,066.6 | - In August 2023, the Company amended its senior secured credit facility, extending the term loan B maturity to August 2030 and the revolving credit facility to February 2028, and increasing the revolver's borrowing capacity to **$500.0 million**[28](index=28&type=chunk) - The term loan B bears interest at SOFR plus 2.25% or the bank's base rate plus 1.25%; the revolver's interest rate varies based on SOFR/base rate and leverage levels, and the facility is secured by substantially all Company assets[28](index=28&type=chunk) - The Company has **$550.0 million** in unsecured senior notes due in 2028, bearing 4.625% interest, subordinate to the senior secured credit facility[29](index=29&type=chunk) [4. Commitments and Contingencies](index=11&type=section&id=4.%20Commitments%20and%20Contingencies) - The Company is involved in various legal proceedings and claims in the ordinary course of business, including wage and hour law actions, but does not believe their disposition will materially affect its financial statements[30](index=30&type=chunk) [5. Income Taxes](index=11&type=section&id=5.%20Income%20Taxes) - The interim provision for income taxes is calculated using an annualized estimated effective tax rate, adjusted for discrete items; income taxes payable increased significantly to **$33.9 million** at September 30, 2023, from $1.1 million at December 31, 2022[31](index=31&type=chunk) [6. Earnings per Share](index=12&type=section&id=6.%20Earnings%20per%20Share) **Earnings per Share (in millions, except per share data):** | Item | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Income from continuing operations | $59.4 | $71.1 | $169.0 | $211.3 | | Net income | $59.4 | $73.2 | $169.0 | $212.5 | | Weighted-average common shares outstanding — basic | 48.1 | 50.1 | 48.8 | 50.9 | | Weighted-average common shares and share equivalents outstanding — diluted | 48.4 | 50.7 | 49.2 | 51.6 | | Basic EPS (Continuing operations) | $1.23 | $1.42 | $3.46 | $4.15 | | Diluted EPS (Continuing operations) | $1.23 | $1.40 | $3.43 | $4.09 | [7. Segment Reporting](index=13&type=section&id=7.%20Segment%20Reporting) - ASGN operates through two segments: Commercial (consulting, creative digital marketing, permanent placement) and Federal Government (mission-critical solutions), with virtually all revenues generated in the United States[36](index=36&type=chunk) **Segment Revenues (in millions):** | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Commercial | $782.4 | $900.0 | $2,425.8 | $2,583.5 | | Federal Government | $334.4 | $297.9 | $950.7 | $847.2 | | Consolidated | $1,116.8 | $1,197.9 | $3,376.5 | $3,430.7 | **Segment Gross Profit (in millions):** | Segment | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Commercial | $254.2 | $297.8 | $777.5 | $852.1 | | Federal Government | $68.2 | $61.1 | $197.6 | $177.4 | | Consolidated | $322.4 | $358.9 | $975.1 | $1,029.5 | **Federal Government Segment Revenues by Customer Type (in millions):** | Customer Type | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Department of Defense and Intelligence Agencies | $164.8 | $165.5 | $452.7 | $458.4 | | Federal Civilian | $159.5 | $124.8 | $468.3 | $361.9 | | Other | $10.1 | $7.6 | $29.7 | $26.9 | | Total | $334.4 | $297.9 | $950.7 | $847.2 | [8. Fair Value Measurements](index=14&type=section&id=8.%20Fair%20Value%20Measurements) - The carrying amounts of current assets and liabilities approximate their fair value due to their short-term nature; long-term debt had a carrying amount of **$1.1 billion** and a fair value of **$1.0 billion** at September 30, 2023[42](index=42&type=chunk) - No fair value adjustments for non-financial assets or liabilities occurred during the nine months ended September 30, 2023[42](index=42&type=chunk) [Item 2 — Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202%20%E2%80%94%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance and operational results for the three and nine months ended September 30, 2023, detailing revenue trends, expenses, and segment metrics [Overview](index=15&type=section&id=Overview) - ASGN provides IT services and professional solutions across two segments: Commercial (consulting, creative digital marketing, permanent placement) and Federal Government (mission-critical solutions)[44](index=44&type=chunk) - The Company's revenues are almost entirely generated in the United States[44](index=44&type=chunk) [Results of Operations for the Three Months Ended September 30, 2023 Compared with the Three Months Ended September 30, 2022](index=15&type=section&id=Results%20of%20Operations%20for%20the%20Three%20Months%20Ended%20September%2030%2C%202023%20Compared%20with%20the%20Three%20Months%20Ended%20September%2030%2C%202022) [Revenues](index=15&type=section&id=Revenues_3M) **Revenues by Segment (Three Months Ended September 30, in millions):** | Segment | 2023 | 2022 | Change (%) | % of Total 2023 | % of Total 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial | $782.4 | $900.0 | (13.1%) | 70.1% | 75.1% | | Federal Government | $334.4 | $297.9 | 12.3% | 29.9% | 24.9% | | Consolidated | $1,116.8 | $1,197.9 | (6.8%) | 100.0% | 100.0% | - Commercial Segment revenues **declined 13.1% YoY**, with low single-digit declines in Consumer and Industrial and Healthcare, and double-digit declines in other key verticals[47](index=47&type=chunk) - Federal Government Segment revenues **increased 12.3% YoY**, including **$24.6 million** from the Iron Vine Security acquisition[47](index=47&type=chunk) - Total IT consulting services revenues **grew 7.4% YoY** to $608.6 million, while assignment revenues **declined 19.5% YoY** to $508.2 million, reflecting softness in discretionary Commercial Segment business[48](index=48&type=chunk) [Gross Profit and Gross Margin](index=16&type=section&id=Gross%20Profit%20and%20Gross%20Margin_3M) **Gross Profit and Gross Margin by Segment (Three Months Ended September 30, in millions):** | Segment | Gross Profit 2023 | Gross Profit 2022 | Change (%) | Gross Margin 2023 | Gross Margin 2022 | Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial | $254.2 | $297.8 | (14.6%) | 32.5% | 33.1% | (60) | | Federal Government | $68.2 | $61.1 | 11.6% | 20.4% | 20.5% | (10) | | Consolidated | $322.4 | $358.9 | (10.2%) | 28.9% | 30.0% | (110) | - Consolidated gross profit **decreased 10.2% YoY**, leading to a **110 basis point gross margin compression** to 28.9%, driven by business mix shifts[52](index=52&type=chunk)[53](index=53&type=chunk) [Selling, General and Administrative Expenses](index=16&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses_3M) - SG&A expenses decreased to **$206.0 million (18.4% of revenues)** from $232.6 million (19.4% of revenues) in Q3 2022, primarily due to lower incentive compensation expense[54](index=54&type=chunk) [Amortization of Intangible Assets](index=16&type=section&id=Amortization%20of%20Intangible%20Assets_3M) - Amortization of intangible assets remained stable at **$17.8 million** in Q3 2023, compared to $17.9 million in Q3 2022[55](index=55&type=chunk) [Interest Expense](index=16&type=section&id=Interest%20Expense_3M) - Interest expense increased to **$18.5 million** from $12.1 million in Q3 2022, driven by higher interest rates and **$2.3 million** in costs related to August 2023 amendments[56](index=56&type=chunk) - The weighted-average cash-based interest rate rose to **6.0%** in Q3 2023 from 4.4% in Q3 2022, on approximately **$1.0 billion** in outstanding borrowings[56](index=56&type=chunk) [Provision for Income Taxes](index=16&type=section&id=Provision%20for%20Income%20Taxes_3M) - Provision for income taxes decreased to **$20.7 million** from $25.2 million in Q3 2022 due to lower income before taxes; the effective tax rate slightly decreased to **25.8%** from 26.2%[57](index=57&type=chunk) [Income from Continuing Operations](index=16&type=section&id=Income%20from%20Continuing%20Operations_3M) - Income from continuing operations decreased to **$59.4 million** in Q3 2023 from $71.1 million in Q3 2022[58](index=58&type=chunk) [Income from Discontinued Operations](index=16&type=section&id=Income%20from%20Discontinued%20Operations_3M) - No income from discontinued operations was reported in Q3 2023, compared to **$2.1 million** in Q3 2022[59](index=59&type=chunk) [Net Income](index=16&type=section&id=Net%20Income_3M) - Net income for Q3 2023 was **$59.4 million**, down from $73.2 million in Q3 2022[60](index=60&type=chunk) [Results of Operations for the Nine Months Ended September 30, 2023 Compared with the Nine Months Ended September 30, 2022](index=17&type=section&id=Results%20of%20Operations%20for%20the%20Nine%20Months%20Ended%20September%2030%2C%202023%20Compared%20with%20the%20Nine%20Months%20Ended%20September%2030%2C%202022) [Revenues](index=17&type=section&id=Revenues_9M) **Revenues by Segment (Nine Months Ended September 30, in millions):** | Segment | 2023 | 2022 | Change (%) | % of Total 2023 | % of Total 2022 | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial | $2,425.8 | $2,583.5 | (6.1%) | 71.8% | 75.3% | | Federal Government | $950.7 | $847.2 | 12.2% | 28.2% | 24.7% | | Consolidated | $3,376.5 | $3,430.7 | (1.6%) | 100.0% | 100.0% | - Consolidated revenues **decreased 1.6% YoY** to $3.4 billion; excluding **$128.0 million** from recent acquisitions, revenues **declined 5.3% YoY**[62](index=62&type=chunk) - Commercial Segment revenues **declined 6.1% YoY**, including $53.6 million from GlideFast; Federal Government Segment revenues **increased 12.2% YoY**, including $74.3 million from Iron Vine[63](index=63&type=chunk) - Total IT consulting services revenues **grew 15.2% YoY** to $1.78 billion, while assignment revenues **declined 15.3% YoY** to $1.60 billion, reflecting continued softness in discretionary Commercial Segment business[64](index=64&type=chunk) [Gross Profit and Gross Margin](index=17&type=section&id=Gross%20Profit%20and%20Gross%20Margin_9M) **Gross Profit and Gross Margin by Segment (Nine Months Ended September 30, in millions):** | Segment | Gross Profit 2023 | Gross Profit 2022 | Change (%) | Gross Margin 2023 | Gross Margin 2022 | Change (bps) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial | $777.5 | $852.1 | (8.8%) | 32.1% | 33.0% | (90) | | Federal Government | $197.6 | $177.4 | 11.4% | 20.8% | 20.9% | (10) | | Consolidated | $975.1 | $1,029.5 | (5.3%) | 28.9% | 30.0% | (110) | - Consolidated gross profit **declined 5.3% YoY**, resulting in a **110 basis point gross margin compression** to 28.9%, primarily due to a business mix shift[66](index=66&type=chunk) [Selling, General and Administrative Expenses](index=17&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses_9M) - SG&A expenses decreased to **$640.6 million (19.0% of revenues)** from $665.1 million (19.4% of revenues) in the first nine months of 2022, mainly due to lower incentive compensation expense[67](index=67&type=chunk) [Amortization of Intangible Assets](index=17&type=section&id=Amortization%20of%20Intangible%20Assets_9M) - Amortization of intangible assets increased to **$53.8 million** from $45.3 million in the first nine months of 2022, reflecting amortization from businesses acquired in the latter half of the previous year[68](index=68&type=chunk) [Interest Expense](index=19&type=section&id=Interest%20Expense_9M) - Interest expense increased to **$49.7 million** from $31.5 million in the first nine months of 2022, primarily due to higher interest rates and **$2.3 million** in amendment-related costs[69](index=69&type=chunk) - The weighted-average cash-based interest rate rose to **5.8%** in the first nine months of 2023 from 3.8% in the same period of 2022, on approximately **$1.1 billion** in outstanding borrowings[69](index=69&type=chunk) [Provision for Income Taxes](index=19&type=section&id=Provision%20for%20Income%20Taxes_9M) - Provision for income taxes decreased to **$62.0 million** from $76.3 million in the first nine months of 2022 due to lower income before taxes; the effective tax rate slightly increased to **26.8%** from 26.5%[70](index=70&type=chunk) [Income from Continuing Operations](index=19&type=section&id=Income%20from%20Continuing%20Operations_9M) - Income from continuing operations decreased to **$169.0 million** in the first nine months of 2023 from $211.3 million in the same period of 2022[71](index=71&type=chunk) [Income from Discontinued Operations](index=19&type=section&id=Income%20from%20Discontinued%20Operations_9M) - No income from discontinued operations was reported in the first nine months of 2023, compared to **$1.2 million** in the same period of 2022[71](index=71&type=chunk) [Net Income](index=19&type=section&id=Net%20Income_9M) - Net income for the first nine months of 2023 was **$169.0 million**, down from $212.5 million in the same period of 2022[71](index=71&type=chunk) [Commercial Segment - Consulting Metrics](index=19&type=section&id=Commercial%20Segment%20-%20Consulting%20Metrics) **Commercial Consulting Bookings and Book-to-Bill Ratio (in millions):** | Metric | Three Months Ended Sep 30, 2023 | Three Months Ended Sep 30, 2022 | Trailing-Twelve-Months Ended Sep 30, 2023 | Trailing-Twelve-Months Ended Sep 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | Bookings | $291.0 | $254.3 | $1,340.0 | $1,117.3 | | Book-to-Bill Ratio | 1.1 to 1 | 0.9 to 1 | 1.2 to 1 | 1.3 to 1 | - Commercial consulting bookings increased to **$291.0 million** in Q3 2023 from $254.3 million in Q3 2022, resulting in a book-to-bill ratio of **1.1 to 1**, up from 0.9 to 1[73](index=73&type=chunk) - The average duration of commercial consulting projects is one year[72](index=72&type=chunk) [Federal Government Segment Metrics](index=19&type=section&id=Federal%20Government%20Segment%20Metrics) **Federal Government Segment New Contract Awards and Book-to-Bill Ratio (in millions):** | Metric | TTM Ended Sep 30, 2023 | TTM Ended Sep 30, 2022 | | :--- | :--- | :--- | | New Contract Awards | $1,080.8 | $1,089.6 | | Book-to-Bill Ratio | 0.9 to 1 | 1.0 to 1 | **Federal Government Segment Contract Backlog (in millions):** | Metric | Sep 30, 2023 | Dec 31, 2022 | Sep 30, 2022 | | :--- | :--- | :--- | :--- | | Funded Contract Backlog | $701.0 | $582.3 | $548.0 | | Negotiated Unfunded Contract Backlog | $2,577.8 | $2,681.2 | $2,564.6 | | Contract Backlog | $3,278.8 | $3,263.5 | $3,112.6 | | Contract Backlog Coverage Ratio | 2.6 to 1 | 2.9 to 1 | 2.8 to 1 | - New Contract Awards for the TTM ended September 30, 2023, were **$1,080.8 million**, with a book-to-bill ratio of **0.9 to 1**[75](index=75&type=chunk) - Total Contract Backlog increased to **$3,278.8 million** at September 30, 2023, from $3,263.5 million at December 31, 2022, driven by an increase in funded backlog[76](index=76&type=chunk) [Liquidity and Capital Resources](index=20&type=section&id=Liquidity%20and%20Capital%20Resources) - Working capital was **$550.7 million** and cash and cash equivalents were **$145.6 million** at September 30, 2023[77](index=77&type=chunk) - Net cash provided by operating activities was **$340.5 million** for the first nine months of 2023, up from $232.5 million in 2022, primarily due to lower accounts receivable and improved DSO[78](index=78&type=chunk) - The Company had full availability under its **$500.0 million** revolving credit facility and believes current liquidity sources are sufficient for the next 12 months[77](index=77&type=chunk) - Net cash used in financing activities was **$231.6 million**, including **$197.7 million** for common stock repurchases and net debt repayments[80](index=80&type=chunk) [Recent Accounting Pronouncements](index=20&type=section&id=Recent%20Accounting%20Pronouncements) - There have been no recent accounting pronouncements that significantly impact the Company[81](index=81&type=chunk) [Critical Accounting Policies](index=20&type=section&id=Critical%20Accounting%20Policies) - No significant changes to critical accounting policies and estimates occurred during Q3 2023 compared to those disclosed in the 2022 10-K[82](index=82&type=chunk) [Commitments](index=20&type=section&id=Commitments) - There were no material changes to the significant commitments or contractual obligations disclosed in the 2022 10-K[83](index=83&type=chunk) [Item 3 — Quantitative and Qualitative Disclosures about Market Risks](index=20&type=section&id=Item%203%20%E2%80%94%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) The company's exposure to market risks, primarily interest rate risk, is discussed with no material changes from previous disclosures - No material changes to interest rate risks were reported compared to the 2022 10-K[84](index=84&type=chunk) - A hypothetical **100 basis-point change** in interest rates on **$500.0 million** of variable-rate debt would result in an approximate **$5.0 million** fluctuation in interest expense over a 12-month period[84](index=84&type=chunk) [Item 4 — Controls and Procedures](index=21&type=section&id=Item%204%20%E2%80%94%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2023, with no material changes to internal controls - The Chief Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures were **effective** as of September 30, 2023[85](index=85&type=chunk) - **No material changes** in internal controls over financial reporting occurred during the three months ended September 30, 2023[86](index=86&type=chunk) [PART II — OTHER INFORMATION](index=22&type=section&id=PART%20II%20%E2%80%94%20OTHER%20INFORMATION) [Item 1 — Legal Proceedings](index=22&type=section&id=Item%201%20%E2%80%94%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings that are not expected to have a material financial impact - The Company is involved in various legal proceedings, claims, and litigation, including collective class and PAGA actions alleging wage and hour law violations[88](index=88&type=chunk) - Management does not believe the disposition of these pending or asserted matters will have a **material effect** on the Company's financial position, results of operations, or cash flows[88](index=88&type=chunk) [Item 1A — Risk Factors](index=22&type=section&id=Item%201A%20%E2%80%94%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the 2022 Annual Report on Form 10-K - **No material changes** to the risk factors previously described in the Company's 2022 10-K have occurred[89](index=89&type=chunk) [Item 2 — Unregistered Sales of Securities and Use of Proceeds](index=22&type=section&id=Item%202%20%E2%80%94%20Unregistered%20Sales%20of%20Securities%20and%20Use%20of%20Proceeds) A new $500.0 million stock repurchase program was approved, under which over 1.15 million shares were repurchased in Q3 2023 - On April 24, 2023, the Board approved a new **$500.0 million stock repurchase program** over two years, replacing the previous program[90](index=90&type=chunk) **Common Stock Repurchases (Three Months Ended September 30, 2023):** | Period | Total Number of Shares Purchased | Average Price per Share | Maximum Number (or Value) Yet to be Purchased Under Plans (in millions) | | :--- | :--- | :--- | :--- | | July | 166,175 | $78.26 | $427.8 | | August | 550,322 | $80.12 | $383.7 | | September | 434,284 | $79.87 | $349.1 | | Total | 1,150,781 | $79.76 | $349.1 | - In Q3 2023, 18,683 shares (**$1.5 million value**) were tendered by employees for tax withholding related to restricted stock awards, excluded from the repurchase table[91](index=91&type=chunk) [Item 3 — Defaults Upon Senior Securities](index=22&type=section&id=Item%203%20%E2%80%94%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - There were **no defaults** upon senior securities[92](index=92&type=chunk) [Item 4 — Mine Safety Disclosures](index=22&type=section&id=Item%204%20%E2%80%94%20Mine%20Safety%20Disclosures) No mine safety disclosures are reported for the period - There are **no mine safety disclosures**[92](index=92&type=chunk) [Item 5 — Other Information](index=22&type=section&id=Item%205%20%E2%80%94%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the quarter - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the three months ended September 30, 2023[93](index=93&type=chunk) [Item 6 — Exhibits](index=23&type=section&id=Item%206%20%E2%80%94%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including key corporate documents, agreements, and certifications - Key exhibits include the Amended and Restated Certificate of Incorporation, Fifth Amended and Restated Bylaws, Specimen Common Stock Certificate, Third Amended and Restated Credit Agreement, and certifications from the CEO and CFO[94](index=94&type=chunk) - The report also includes Inline XBRL formatted financial statements and cover page interactive data file[94](index=94&type=chunk)

Financial Data and Key Metrics Changes - Third quarter 2023 revenues were $1.12 billion, down 6.8% year-over-year, but above the midpoint of guidance [19][4] - Adjusted EBITDA was $137.5 million, with an adjusted EBITDA margin of 12.3%, above the top end of guidance [19][5] - Gross margin was 28.9%, down 110 basis points year-over-year, primarily due to a lower mix of high-margin revenues [21][19] - Free cash flow for the quarter was $137.7 million, an increase of 73.2% year-over-year [23] Business Line Data and Key Metrics Changes - Commercial segment revenues were $782.4 million, down 13.1% year-over-year, with consulting revenues increasing 2.1% to $274.2 million [19][7] - Federal Government segment revenues were $334.4 million, up 12.3% year-over-year, with a contract backlog of approximately $3.3 billion [20][14] - Assignment revenues in the Commercial segment declined by 19.5% year-over-year, reflecting softness in discretionary areas [19][20] Market Data and Key Metrics Changes - The IT spending market remains challenging, but ASGN is well-positioned to capture in-demand IT opportunities [5][6] - The Federal Government segment showed resilience with a book-to-bill ratio of 1.5x for the quarter [14] - Commercial consulting bookings were solid at $291 million, translating to a book-to-bill of 1.1x for the quarter [7][32] Company Strategy and Development Direction - The company is evolving towards IT consulting, with over half of consolidated revenues now from higher-value project capabilities [6][5] - There is a focus on AI and data engineering projects, with generative AI creating new opportunities in the pipeline [10][11] - The company completed a refinancing transaction to enhance financial flexibility and prepare for strategic acquisitions [27][23] Management's Comments on Operating Environment and Future Outlook - Management remains cautious about near-term market demand due to uncertain macroeconomic conditions [26][66] - The company expects revenues to remain soft in the Commercial segment in Q4, partially offset by growth in the Federal Government segment [25][66] - There is optimism regarding future IT spending growth as clients become more confident in their financial outlook [44][75] Other Important Information - The company has a remaining share repurchase authorization of approximately $349.1 million [23] - Management highlighted the importance of maintaining a diverse client base across industries to mitigate risks [20][21] Q&A Session All Questions and Answers Question: Insights on commercial consulting and elongation of decision-making - Management noted solid bookings with a book-to-bill of 1.1x, but clients are elongating project timelines due to cautious spending [32][33] Question: Market share and competitive positioning - Management feels they are holding or slightly expanding market share, particularly in data-related projects [34][35] Question: M&A market conditions - High-quality assets are not entering the market due to valuation concerns, leading to a focus on lower-quality assets [38] Question: Government business performance during shutdowns - Less than 10% of Federal Government work could be impacted by a shutdown, with mission-critical projects continuing [15][70] Question: Client budgeting processes for 2024 - There is cautious optimism regarding client budgets, with a focus on earnings impacting IT spending [42][45] Question: Margin expansion opportunities - Management sees potential for margin expansion as the consulting segment grows, which typically has better margins [46][47] Question: Internal headcount and margin preservation - The company is managing headcount carefully to preserve margins while monitoring productivity improvements [49][51] Question: Transition of AI work from exploratory to larger engagements - Management is optimistic about becoming a prime contractor for larger AI projects as data work progresses [52][54] Question: Stability in TMT accounts - There are signs of stability in TMT accounts, with some indicators suggesting a potential turnaround [58][60] Question: Comparison of current commercial trends to past cycles - Current cycles are characterized by prolonged caution among large enterprises, differing from previous cycles [62][64] Question: Federal Government business mechanics during a shutdown - Projects deemed non-mission-critical may be delayed, but critical work will continue [70][71]

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 June 30, 2023 OR ☐ 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.) 4 ...

Financial Data and Key Metrics Changes - ASGN's Q2 2023 revenues were $1.1 billion, slightly above the midpoint of guidance, but down 1% year-over-year [19][24] - Adjusted EBITDA margin improved to 12%, exceeding the top end of guidance, driven by effective expense management and growth in high-margin consulting revenues [8][22] - Free cash flow for the quarter totaled $101.3 million, up 27.3% from Q2 2022, indicating strong cash generation capabilities [23] Business Line Data and Key Metrics Changes - Commercial Segment revenues declined by 4.6% year-over-year to $811.3 million, with consulting revenues increasing by 26.5% year-over-year to $281.1 million [20][10] - Federal Government Segment revenues increased by 9.8% year-over-year to $319.6 million, driven by the Iron Vine acquisition [21][15] - Assignment revenues in the Commercial Segment declined by 15.6% year-over-year, reflecting challenges in discretionary services [20] Market Data and Key Metrics Changes - The Mexican Delivery Center has seen increased usage, contributing to consulting growth and margin expansion [11] - The Consumer & Industrial vertical was the fastest-growing segment, while Financial Services and Technology, Media, and Telecommunications experienced declines [12] Company Strategy and Development Direction - ASGN is focusing on high-end, higher-value IT consulting services, aiming to adapt to client needs and market conditions [26] - The company is investing in AI capabilities and developing AI roadmaps to assist clients in leveraging new technologies [60][64] - The strategic emphasis on a variable cost structure and expense management is intended to sustain margins during challenging macro conditions [25] Management's Comments on Operating Environment and Future Outlook - Management noted that macro conditions remain challenging, particularly for discretionary services, but the business is performing to expectations [26][32] - There is cautious client spending, with a trend towards extending project durations to manage costs [40][41] - The company anticipates continued growth in the Federal Government Segment, while the Commercial Segment may face headwinds [24][25] Other Important Information - The company has a contract backlog of over $3.1 billion in the Federal Segment, indicating strong future revenue visibility [16] - SG&A expenses decreased by 4.5% year-over-year due to effective expense management [22] Q&A Session Summary Question: Can you compare the current state of the environment to when you last reported earnings? - Management indicated that clients remain cautious, with more bookings occurring late in the quarter, reflecting a careful approach to new work [32][33] Question: Do you think AI could become a catalyst for the M&A pipeline? - Management confirmed that AI technologies are on their radar, and they are looking at potential acquisitions to enhance capabilities in this area [35][36] Question: Can you provide more color on the change in the pace of work stretching project durations? - Management noted that clients are opting to extend project timelines to manage expenses, which affects short-term revenues [39][40] Question: Are you adding or subtracting headcount? - Management stated that headcount is trending down due to natural attrition, but they are investing in areas with growth potential [42] Question: What measures are being taken to improve the book-to-bill ratio? - Management acknowledged the need for improvement and is making investments in business development to increase bid activity [45][46] Question: How would you characterize bill rates and pay spreads? - Management reported steady bill rates with slight increases, particularly in the commercial consulting business [84] Question: What is the status of the Mexican Delivery Center? - Management indicated that the Mexican Delivery Center is a key investment area, with plans to continue expanding its capabilities [86]

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 March 31, 2023 OR ☐ 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.) ...

ASGN Incorporated (NYSE:ASGN) Q1 2023 Earnings Conference Call April 26, 2023 4:30 PM ET Company Participants Kimberly Esterkin - Investor Relations Theodore Hanson - Chief Executive Officer Marie Perry - Chief Financial Officer Rand Blazer - President Conference Call Participants Maggie Nolan - William Blair Heather Balsky - Bank of America Jeff Silber - BMO Capital Markets Surinder Thind - Jefferies Operator Greetings, and welcome to the ASGN Incorporated First Quarter 2023 Earnings Call. [Operator Instru ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (the "Act") For the fiscal year ended December 31, 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 R ...

ASGN Incorporated (NYSE:ASGN) Q4 2022 Results Conference Call February 8, 2023 4:30 PM ET Company Participants Kimberly Esterkin - Investor Relations Ted Hanson - Chief Executive Officer Rand Blazer - President Marie Perry - Chief Financial Officer Conference Call Participants Maggie Nolan - William Blair Heather Balsky - Bank of America Tobey Sommer - Truist Securities Jeff Silber - BMO Capital Markets Surinder Thind - Jefferies Operator Greetings. Welcome to the ASGN Incorporated Fourth Quarter 2022 Earni ...