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(Exact name of registrant as specified in its charter)
iDelaware
i95-4023433
(State
of Incorporation)
(I.R.S. Employer Identification No.)
i4400 Cox Road, Suite 110
iGlen Allen, iVirginiai23060
(Address, including zip code, of Principal Executive Offices)
(i888) i482-8068
(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
iCommon Stock
iASGN
iNYSE
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. ☒iYes☐ 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). ☒iYes☐ 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.
iLarge
accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
i☐
Emerging
growth company
i☐
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).
i☐ Yes ☒ No
At October 31, 2023, the total number of outstanding shares of the Common Stock of ASGN Incorporated (the "Company") ($0.01 par value) was i47.2
million.
Preferred
stock, $ii0.01/ par value; ii1.0/
million shares authorized; iino/ shares issued
i—
i—
Common
stock, $ii0.01/ par value; ii75.0/
million shares authorized; i47.5 million and i49.5 million shares outstanding at September 30, 2023 and December 31, 2022, respectively
i0.5
i0.5
Paid-in
capital
i701.9
i703.5
Retained earnings
i1,207.9
i1,200.0
Accumulated
other comprehensive loss
(i1.6)
(i2.7)
Total
stockholders’ equity
i1,908.7
i1,901.3
Total liabilities
and stockholders’ equity
$
i3,578.9
$
i3,585.7
See
notes to condensed consolidated financial statements.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. iGeneral
Basis
of presentation — The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and the rules of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The December 31, 2022 balance sheet was derived from audited financial statements. The financial statements include adjustments consisting of normal recurring items, which, in the opinion of management, are necessary for a fair presentation of the financial position of ASGN Incorporated and its subsidiaries ("ASGN" or the "Company") and its results of operations
for the interim dates and periods set forth herein. The results for any of the interim periods are not necessarily indicative of the results to be expected for the full year or any other period. This Quarterly Report on Form 10-Q should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 10-K").
2. iGoodwill
and Identifiable Intangible Assets
i
The following table summarizes the activity related to the carrying amount of goodwill by segment since December 31, 2021 (in millions).
Term
loan B, principal payments due in the next 12 months(1)
(i5.0)
i—
Long-term
debt
$
i1,037.5
$
i1,066.6
__________
(1)
In connection with the amendments described below, the Company is required to make quarterly minimum principal payments totaling $i5.0 million annually on the term loan until its maturity date; this amount is included in other current liabilities on the accompanying condensed consolidated balance sheet as of September 30, 2023.
/
Senior
Secured Credit Facility — In August 2023, the Company amended its senior secured credit facility (the "facility") to extend the maturity date of the term loan B ("term loan") to August 2030 and the maturity date of the revolving credit facility (the "revolver") to February 2028 and increased the borrowing capacity of the revolver to $i500.0 million. Borrowings under the $i500.0
million term loan bear interest, at the Company's election, at (i) the secured overnight financing rate ("SOFR") plus i2.25 percent, or (ii) the bank’s base rate plus i1.25
percent. Borrowings under the revolver bear interest, at the Company's election, at (i) SOFR plus a 10 basis points adjustment plus i2.00 to i3.00
percent, or (ii) the bank’s base rate plus i1.00 to i2.00 percent, depending on leverage levels. A commitment fee of i0.30
to i0.45 percent is payable on the undrawn portion of the revolver. The facility is subject to various restrictive covenants including, when amounts are drawn under the revolver, a maximum ratio of senior secured debt to trailing-twelve-months of lender-defined consolidated EBITDA of i3.75
to 1, which was i0.95 to 1 at September 30, 2023. The facility is secured by substantially all of the Company's assets and at September 30, 2023, the Company was in compliance with its debt covenants.
Unsecured Senior Notes — The Company
has $i550.0 million of unsecured senior notes, due in 2028, which bear interest at i4.625 percent payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and are subordinate to the senior secured credit facility.
These notes also contain certain customary limitations including, the Company's ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets and make certain distributions.
4.iCommitments and Contingencies
The
Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of business, and collective class and Private Attorneys General Act ("PAGA") actions alleging violations of wage and hour laws. The Company does not believe that the disposition of matters that are pending or asserted will have a material effect on its consolidated financial statements.
5. iIncome
Taxes
For interim reporting periods, the Company’s provision for income taxes is calculated using its annualized estimated effective tax rate for the year. This rate is based on its estimated full year income and the related income tax expense for each jurisdiction in which the Company operates. The effective tax rate can be affected by changes in the geographical mix, permanent differences and the estimate of full year pretax accounting income. This rate is adjusted for the effects of discrete items occurring in the period. Income taxes payable were $i33.9
million at September 30, 2023 and $i1.1 million at December 31, 2022, and are included in other current liabilities in the condensed consolidated balance sheets. Prepaid income taxes were $i16.3 million at December 31,
2022, and are included in prepaid expenses and income taxes in the condensed consolidated balance sheets.
8
6. iEarnings per Share
i
The
following table shows the calculation of basic and diluted earnings per share (in millions, except per share data).
Loss
from discontinued operations, net of income taxes
i—
i2.1
i—
i1.2
Net
income
$
i59.4
$
i73.2
$
i169.0
$
i212.5
Weighted-average
number of common shares outstanding — basic
i48.1
i50.1
i48.8
i50.9
Dilutive
effect of common share equivalents
i0.3
i0.6
i0.4
i0.7
Weighted-average
number of common shares and share equivalents outstanding — diluted
i48.4
i50.7
i49.2
i51.6
Basic
earnings per share:
Continuing operations
$
i1.23
$
i1.42
$
i3.46
$
i4.15
Discontinued
operations
i—
i0.04
i—
i0.02
$
i1.23
$
i1.46
$
i3.46
$
i4.17
Diluted
earnings per share:
Continuing operations
$
i1.23
$
i1.40
$
i3.43
$
i4.09
Discontinued
operations
i—
i0.04
i—
i0.02
$
i1.23
$
i1.44
$
i3.43
$
i4.11
/
9
7.
iSegment Reporting
ASGN provides information technology ("IT") services and professional solutions across the commercial and government sectors. ASGN operates through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing and permanent placement services primarily to large enterprises and Fortune 1000 companies. The Federal Government Segment provides mission-critical solutions to the Department of Defense, the intelligence community and federal civilian agencies.
Virtually all of the Company's revenues are generated in the United States.
Management evaluates the performance of each segment primarily based on revenues, gross profit and operating income derived directly from internal financial reporting of the segments used for corporate management purposes, which is presented below by segment (in millions):
Consolidated
operating income includes corporate operating expenses, which are not allocated to the segments. These include stock-based compensation expense, depreciation expense, compensation for corporate employees, acquisition, integration and strategic planning expenses, and public company expenses.
/
10
The majority of the revenues from the Commercial Segment are generated from
time-and-materials ("T&M") contracts where payments are based on fixed hourly rates for each direct labor hour expended and reimbursements for allowable material costs and out-of-pocket expenses. Revenues from the Federal Government Segment are generated from: (i) firm-fixed-price, (ii) T&M, and (iii) cost reimbursable contracts. iRevenues by segment and by type are as follows (in millions):
Recurring Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued payroll approximate their fair value based on their short-term nature.
Nonrecurring Fair Value Measurements — Certain assets, such as goodwill and trademarks, are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain
circumstances, such as, when there is evidence of impairment. There were no fair value adjustments for non-financial assets or liabilities during the nine months ended September 30, 2023.
The carrying amount of long-term debt recorded in the Company’s accompanying condensed consolidated balance sheet at September 30, 2023 was $i1.1 billion (see Note
3. Long-Term Debt) and its fair value, determined using quoted prices in active markets for identical liabilities (iLevel 1 inputs), was $i1.0 billion.
11
Item
2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations
The information in this discussion contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations, as well as management's beliefs and assumptions, and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words "believes,""anticipates,""plans,""expects,""intends," and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Our actual results
could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to such differences include those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 2022 ("2022 10-K"). In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the filing date of this Quarterly Report on Form 10-Q and we assume no obligation to update any forward-looking statements or the reasons why our actual results may differ.
OVERVIEW
ASGN
provides information technology ("IT") services and professional solutions to the commercial and government sectors. We operate through two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing and permanent placement services primarily to large enterprises and Fortune 1000 companies. Our Federal Government Segment provides mission-critical solutions to the Department of Defense, the intelligence community and federal civilian agencies. Virtually all of the Company's revenues are generated in the United States.
Billable Days are business days (calendar days for the period less weekends and holidays) adjusted for other factors, such as the day of the week a holiday occurs, additional time taken off around
holidays, year-end client furloughs and inclement weather. Revenues calculated on a same Billable Days basis provide more comparable information by removing the effect of differences in the number of Billable Days on a year-over-year basis. Revenues on a same Billable Days basis are adjusted for the following items: differences in Billable Days during the period by taking the current-period average revenue per Billable Day, multiplied by the number of Billable Days from the same period in the prior year.
Revenues
for the quarter were $1.1 billion, down 6.8 percent over the third quarter of last year. The table below shows our revenues by segment for the three months ended September 30, 2023 and 2022 (in millions).
%
of Total
2023
2022
Change
2023
2022
Change
Commercial
Assignment
$
508.2
$
631.4
(19.5
%)
45.5
%
52.7
%
(7.2
%)
Consulting
274.2
268.6
2.1
%
24.6
%
22.4
%
2.2
%
782.4
900.0
(13.1
%)
70.1
%
75.1
%
(5.0
%)
Federal
Government
334.4
297.9
12.3
%
29.9
%
24.9
%
5.0
%
Consolidated
$
1,116.8
$
1,197.9
(6.8
%)
100.0
%
100.0
%
From
an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (70.1 percent of total revenues) were down 13.1 percent year-over-year and are categorized in five verticals: (i) Financial Services, (ii) Consumer and Industrial, (iii) Technology, Media and Telecom ("TMT"), (iv) Healthcare, and (v) Business and Government Services. Consumer and Industrial and Healthcare verticals saw low single-digit revenue declines year-over-year and the remaining three verticals saw double-digit declines year-over-year. Federal Government Segment revenues (29.9 percent of total revenues), the sixth industry vertical, were up 12.3 percent year-over-year and included $24.6 million from Iron Vine Security, LLC ("Iron Vine"), which was acquired in October 2022.
Total
IT consulting services revenues were $608.6 million (54.5 percent of total revenues), up 7.4 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $334.4 million, up 12.3 percent year-over-year as stated above, and Commercial Segment consulting revenues were $274.2 million, up 2.1 percent year-over-year. The growth in IT consulting services revenues was offset by a 19.5 percent year-over-year decline in assignment revenues which totaled $508.2 million (45.5 percent of total revenues), reflecting continued softness in the more discretionary and cyclical portions of the Commercial Segment business. On a same Billable Day basis, adjusting for 1.5 fewer Billable Days in the third quarter of 2023 compared to the third quarter of 2022, assignment revenues declined 17.6 percent.
12
Gross
Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the three months ended September 30, 2023 and 2022 (in millions).
Gross
Profit
Gross Margin
2023
2022
Change
2023
2022
Change
Commercial
$
254.2
$
297.8
(14.6
%)
32.5
%
33.1
%
(0.6
%)
Federal
Government
68.2
61.1
11.6
%
20.4
%
20.5
%
(0.1
%)
Consolidated
$
322.4
$
358.9
(10.2
%)
28.9
%
30.0
%
(1.1
%)
Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our contract professionals, other direct costs and reimbursable out-of-pocket expenses. Consolidated gross profit was down 10.2 percent year-over-year on a revenue decline of 6.8 percent.
Gross margin was 28.9 percent, a compression of 110 basis points from the third quarter of 2022. The compression mainly related to business mix: (i) within the Commercial Segment, a lower mix of certain high-margin assignment revenues, namely, creative digital marketing and permanent placement revenues, which was partially offset by a higher mix of high-margin IT consulting revenues
with a year-over-year expansion in margin and (ii) a higher mix of revenues from the Federal Government Segment, which have a lower gross margin than commercial revenues.
Selling, General and Administrative Expenses
Selling, general and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, rent, information systems, marketing, telecommunications, public company expenses and other general and administrative expenses. SG&A expenses were $206.0 million (18.4 percent of revenues), compared with $232.6 million (19.4 percent of revenues) in the third quarter of 2022. This improvement was primarily due to lower incentive compensation expense.
Amortization
of Intangible Assets
Amortization of intangible assets was $17.8 million, compared with $17.9 million in the third quarter of 2022.
Interest Expense
Interest expense was $18.5 million, up from $12.1 million in the third quarter of 2022, primarily as a result of higher interest rates on the senior secured credit facility, and also included $2.3 million of costs related to the August 2023 amendments to the senior secured credit facility. The weighted-average outstanding borrowings and cash-based interest rate in the third quarter of 2023 and 2022 were $1.0 billion and 6.0 percent (excluding costs related to aforementioned amendments), and $1.0 billion and 4.4 percent, respectively.
Provision
for Income Taxes
The provision for income taxes was $20.7 million, down from $25.2 million in the third quarter of 2022 due to lower income before income taxes. The effective tax rate was 25.8 percent, down from 26.2 percent in the third quarter of 2022.
Income from Continuing Operations
Income from continuing operations was $59.4 million, down from $71.1 million in the third quarter of 2022.
Income from Discontinued Operations
Income from discontinued operations was $2.1 million in the third quarter of 2022.
Net
Income
Net income was $59.4 million, down from $73.2 million in the third quarter of 2022.
Revenues
for the first nine months of the year were $3.4 billion, down 1.6 percent year-over-year. Revenues for the period included approximately $128.0 million from businesses acquired during the last 12 months. Excluding the contributions from acquisitions, revenues declined 5.3 percent year-over-year. The table below shows our revenues by segment for the nine months ended September 30, 2023 and 2022 (in millions).
%
of Total
2023
2022
Change
2023
2022
Change
Commercial
Assignment
$
1,598.8
$
1,888.0
(15.3)
%
47.3
%
55.0
%
(7.7
%)
Consulting
827.0
695.5
18.9
%
24.5
%
20.3
%
4.2
%
2,425.8
2,583.5
(6.1)
%
71.8
%
75.3
%
(3.5
%)
Federal
Government
950.7
847.2
12.2
%
28.2
%
24.7
%
3.5
%
Consolidated
$
3,376.5
$
3,430.7
(1.6)
%
100.0
%
100.0
%
Commercial
Segment revenues (71.8 percent of total revenues) were down 6.1 percent year-over-year and included $53.6 million of revenues from the GlideFast business through its acquisition date anniversary, which was at the beginning of July 2023. From an industry vertical perspective: Consumer and Industrial and Healthcare verticals saw low single-digit revenue increases year-over-year. Financial services saw low single-digit revenue decline year-over-year. TMT and Business and Government Services saw double-digit declines year-over-year. Federal Government Segment revenues (28.2 percent of total revenues), the sixth industry vertical, were up 12.2 percent year-over-year and included $74.3 million from Iron Vine, which was acquired in October 2022.
Total IT consulting services revenues were $1.78 billion (52.6 percent of total revenues), up 15.2 percent year-over-year. Federal Government Segment
revenues, which are all consulting revenues, were $950.7 million, up 12.2 percent year-over-year as stated above, and Commercial Segment consulting revenues were $827.0 million, up 18.9 percent year-over-year. The growth in IT consulting services revenues was offset by a 15.3 percent year-over-year decline in assignment revenues which totaled $1.60 billion (47.4 percent of total revenues), reflecting continued softness in the more discretionary and cyclical portions of the Commercial Segment business. On a same Billable Day basis, adjusting for 1.75 fewer Billable Days in the first nine months of 2023 compared to the same period in 2022, assignment revenues declined 14.5 percent.
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the nine months ended September
30, 2023 and 2022 (in millions).
Gross
Profit
Gross Margin
2023
2022
Change
2023
2022
Change
Commercial
$
777.5
$
852.1
(8.8
%)
32.1
%
33.0
%
(0.9
%)
Federal
Government
197.6
177.4
11.4
%
20.8
%
20.9
%
(0.1
%)
Consolidated
$
975.1
$
1,029.5
(5.3
%)
28.9
%
30.0
%
(1.1
%)
Consolidated
gross profit declined 5.3 percent on revenue decline of 1.6 percent. Gross margin was 28.9 percent, a compression of 110 basis points over the first nine months of 2022. The compression mainly related to business mix: (i) within the Commercial Segment, a lower mix of certain high-margin assignment revenues, namely, creative digital marketing and permanent placement revenues, which was partially offset by a higher mix of high-margin IT consulting revenues with a year-over-year expansion in margin, and (ii) a higher mix of revenues from the Federal Government Segment, which have a lower gross margin than commercial revenues.
Selling, General and Administrative Expenses
SG&A expenses were $640.6 million (19.0 percent of revenues), compared with $665.1 million (19.4 percent of revenues) in the
first nine months of 2022. This improvement was primarily due to lower incentive compensation expense.
Amortization of Intangible Assets
Amortization of intangible assets was $53.8 million, up from $45.3 million in the first nine months of 2022. This increase reflects amortization expense related to businesses acquired in the second half of last year.
14
Interest Expense
Interest expense was $49.7 million up from $31.5 million in 2022, primarily as a result of higher interest rates
on the senior secured credit facility, and also included $2.3 million of costs related to the August 2023 amendments to the senior secured credit facility. The weighted-average outstanding borrowings and cash-based interest rate in the first nine months of 2023 and 2022 were $1.1 billion and 5.8 percent (excluding costs related to aforementioned amendments), and $1.0 billion and 3.8 percent, respectively.
Provision for Income Taxes
The provision for income taxes was $62.0 million, down from $76.3 million in the first nine months of 2022 due to lower income before income taxes. The effective tax rate was 26.8 percent, up from 26.5 percent in the first nine months of 2022.
Income from Continuing Operations
Income
from continuing operations was $169.0 million, down from $211.3 million in the first nine months of 2022.
Income from Discontinued Operations
Income from discontinued operations was $1.2 million in the first nine months of 2022.
Net Income
Net income of $169.0 million, down from $212.5 million in the first nine months of 2022.
Commercial Segment - Consulting Metrics
Commercial
consulting bookings are the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations ("Bookings"). The underlying contracts are terminable by the client on short notice with little or no termination penalties. The book-to-bill ratio for our commercial consulting revenues is the ratio of Bookings to commercial consulting revenues for a specified period. The average duration of commercial consulting projects is one year.
Three
Months Ended
Trailing-Twelve-Months Ended
September 30,
September 30,
(Dollars in millions)
2023
2022
2023
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
Federal Government Segment Metrics
Contract backlog for our Federal Government Segment represents the estimated amount of future revenues to be recognized under awarded contracts,
including task orders and options, at a point in time ("Contract Backlog"). These estimates are subject to change and may be affected by the execution of new contracts, the extension or early termination of existing contracts, the non-renewal or completion of current contracts and adjustments to estimates for previously included contracts. The timing of the execution of new contracts and other changes are affected by the funding
cycles of the government and can vary from quarter to quarter. New contract awards are the estimated amount of future revenues to be recognized under contracts awarded during a specified period, including adjustments to estimates for contracts awarded in previous periods (“New Contract Awards”). Due to variability, New Contract Awards are presented on a trailing-twelve-months (“TTM”) basis. The book-to-bill ratio for our Federal Government Segment is the ratio of New Contract
Awards to revenues for a specified period. Contract backlog coverage ratio is calculated as total Contract Backlog divided by TTM revenues.
Our working capital, which is current assets less current liabilities, at September 30, 2023 was $550.7 million, and our cash and cash equivalents were $145.6 million. Our cash flows from operating activities have been our
primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At September 30, 2023, we had full availability under the $500.0 million revolving credit facility. We believe that our cash and cash equivalents on hand, expected operating cash flows and availability under our revolving credit facility will be sufficient to fulfill our obligations, working capital requirements and capital expenditures for the next 12 months.
Net cash provided by operating activities was $340.5 million for the first nine months of 2023, compared with $232.5 million in the same period of 2022. Net cash provided by operating activities before changes in operating assets and liabilities was $286.6 million, compared with $320.0 million in the same period of 2022. Changes in operating assets and liabilities resulted
in net cash generation of $53.9 million, compared with net cash usage of $87.5 million in the same period of 2022. This year-over-year change primarily related to lower accounts receivable due to decreasing revenues in the first nine months of 2023 as well as improvement in accounts receivable days sales outstanding ("DSO"), compared with the same period of 2022 which had increasing accounts receivable due to revenue growth as well as an increase in DSO.
Net cash used in investing activities was $33.3 million for the first nine months of 2023 and was primarily comprised of $32.7 million for capital expenditures. Net cash used in investing activities in the first nine months of the prior year was $366.6 million and included $351.8 million for the acquisition of GlideFast and $27.0 million for capital expenditures, partially offset by $9.8 million from the sale of a business.
Net
cash used in financing activities was $231.6 million for the first nine months of 2023 and included $197.7 million to repurchase the Company's common stock, net repayments of borrowings under the revolving credit facility totaling $31.5 million, and the effects of the August 2023 amendments to the Company's senior secured credit facility which generated net proceeds of $8.0 million that were offset by related amendment costs. Net cash used in financing activities in the first nine months of the prior year was $183.7 million and was primarily comprised of $227.6 million for stock repurchases, partially offset by $46.0 million of borrowings under the revolving credit facility.
For details on the
Company’s senior secured credit facility, comprised of a revolving credit facility and term loan B, and unsecured senior notes, see Note 3. Long-Term Debt in Part I Item 1.
Recent Accounting Pronouncements
There have been no recent accounting pronouncements that significantly impact the Company.
Critical Accounting Policies
There
were no significant changes to our critical accounting policies and estimates during the third quarter of 2023 compared with those disclosed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2022 10-K.
Commitments
There were no material changes to the significant commitments or contractual obligations that were disclosed in our 2022 10-K.
Item
3 — Quantitative and Qualitative Disclosures about Market Risks
With respect to our quantitative and qualitative disclosures about interest rates risks, there have been no material changes to the information included in our 2022 10-K. A hypothetical 100 basis-point change in interest rates on variable-rate debt would have resulted in an interest expense fluctuation of approximately $5.0 million based on $500.0 million of debt outstanding for any 12-month period.
16
Item
4 — Controls and Procedures
As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act). Based on this evaluation, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. The term "disclosure controls and procedures" means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within required time periods. We have established disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
There were no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2023 that have
materially affected, or are reasonably likely to affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1 — Legal Proceedings
We are involved in various legal proceedings, claims and litigation arising in the ordinary
course of business, and collective class and PAGA actions alleging violations of wage and hour laws. However, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations or cash flows.
Item 1A — Risk Factors
There have been no material changes to the risk factors previously described in our 2022 10-K.
Item
2 — Unregistered Sales of Securities and Use of Proceeds
On April 24, 2023, the Company's Board of Directors approved a new stock repurchase program under which the Company may repurchase $500.0 million of its common stock over the following two years and this replaces the previous program. Under terms of this program, purchases can be made in the open market or under a Rule 10b5-1 trading plan. The stock repurchase program does not obligate the Company to acquire any particular amount of the
Company's stock and may be suspended at any time at the Company's discretion.
The Company's repurchases of its common stock during the three months ended September 30, 2023 are shown in the table below.
Period
Total
Number of Shares Purchased
Average Price Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or Programs (in millions)
July
166,175
$
78.26
166,175
$
427.8
August
550,322
$
80.12
550,322
$
383.7
September
434,284
$
79.87
434,284
$
349.1
Total
1,150,781
$
79.76
1,150,781
$
349.1
In
connection with our stock-based compensation plans, during the three months ended September 30, 2023, 18,683 shares of our common stock with an aggregate value of $1.5 million were tendered by employees for payment of applicable statutory tax withholding. These shares are excluded from the table above.
Item 3 — Defaults Upon Senior Securities
None.
Item 4 —
Mine Safety Disclosures
None.
Item 5 — Other Information
(c) During the three months ended September 30, 2023, no director or officer of the Companyiadopted
or iterminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
The following material from this Quarterly
Report on Form 10-Q of ASGN Incorporated, Part I, Item 1 of this Form 10-Q formatted in Inline XBRL (Extensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations and Comprehensive Income; (iii) Condensed Consolidated Statement of Stockholders’ Equity; (iv) Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements.
104
Cover page interactive data file (formatted in Inline XBRL and contained in Exhibit 101)
This exhibit originally filed in paper format. Accordingly, a hyperlink has not been provided.
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SIGNATURES
Pursuant to the requirements of the Exchange Act, the Registrant has duly caused this report
to be signed on its behalf by the undersigned thereunto duly authorized.