asgn-20220630

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, 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 August 4, 2022, the total number of outstanding shares of the Common Stock of ASGN Incorporated (the "Company") ($0.01 par value) was 50.2 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			3

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			17

PART II — OTHER INFORMATION

Item 1 — Legal Proceedings			18

Item 1A — Risk Factors			18

Item 2 — Unregistered Sales of Securities and Use of Proceeds			18

Item 3 — Defaults Upon Senior Securities			18

Item 4 — Mine Safety Disclosures			18

Item 5 — Other Information			18

Item 6 — Exhibits			19

Signature			20

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)


	June 30, 2022		December 31, 2021
ASSETS
Current assets:
Cash and cash equivalents	$	490.6	$	529.6
Accounts receivable, net	843.2		708.2
Prepaid expenses and income taxes	17.2		41.2
Other current assets	15.3		30.4
Total current assets	1,366.3		1,309.4
Property and equipment, net	59.5		55.0
Operating lease right-of-use assets	55.2		57.1
Identifiable intangible assets, net	460.5		487.9
Goodwill	1,560.1		1,569.5
Other non-current assets	22.9		23.9
Total assets	$	3,524.5	$	3,502.8
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	32.8	$	20.1
Accrued payroll	337.3		305.5
Operating lease liabilities	22.5		23.3

Other current liabilities	99.8		102.0
Total current liabilities	492.4		450.9
Long-term debt	1,034.5		1,033.9
Operating lease liabilities	38.4		40.2
Deferred income tax liabilities	89.0		89.0
Other long-term liabilities	14.1		23.4
Total liabilities	1,668.4		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; 50.4 million and 51.8 million shares outstanding at June 30, 2022 and December 31, 2021, respectively	0.5		0.5
Paid-in capital	692.1		690.8
Retained earnings	1,165.5		1,174.4
Accumulated other comprehensive loss	(2.0)		(0.3)
Total stockholders’ equity	1,856.1		1,865.4
Total liabilities and stockholders’ equity	$	3,524.5	$	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					Six Months Ended
	June 30,				June 30,
	2022		2021				2022		2021
Revenues	$	1,141.8	$	974.9			$	2,232.8	$	1,881.9
Costs of services	797.8		698.6				1,562.2		1,361.9
Gross profit	344.0		276.3				670.6		520.0
Selling, general and administrative expenses	220.4		176.4				432.5		340.7
Amortization of intangible assets	13.5		12.0				27.4		24.0
Operating income	110.1		87.9				210.7		155.3
Interest expense	(10.1)		(9.4)				(19.4)		(18.6)
Income before income taxes	100.0		78.5				191.3		136.7
Provision for income taxes	27.4		21.2				51.1		36.6
Income from continuing operations	72.6		57.3				140.2		100.1

Income (loss) from discontinued operations, net of income taxes	(0.1)		6.9				(0.9)		12.8
Net income	$	72.5	$	64.2			$	139.3	$	112.9

Earnings per share:
Basic —
Continuing operations	$	1.42	$	1.08			$	2.73	$	1.89
Discontinued operations	—		0.13				(0.01)		0.24
	$	1.42	$	1.21			$	2.72	$	2.13
Diluted —
Continuing operations	$	1.41	$	1.06			$	2.70	$	1.86
Discontinued operations	—		0.13				(0.01)		0.24
	$	1.41	$	1.19			$	2.69	$	2.10

Shares and share equivalents used to calculate earnings per share:
Basic	51.0		53.2				51.3		53.1
Diluted	51.6		53.9				52.0		53.8

Reconciliation of net income to comprehensive income:
Net income	$	72.5	$	64.2			$	139.3	$	112.9
Foreign currency translation adjustment	(1.7)		1.3				(1.7)		(1.9)
Comprehensive income	$	70.8	$	65.5			$	137.6	$	111.0

See notes to condensed consolidated financial statements.

ASGN INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in millions)


	Common Stock			Paid-in Capital		Retained Earnings		Other		Total
	Shares	Par Value
Three Months Ended June 30, 2022
Balance at March 31, 2022	51.3	$	0.5	$	696.0	$	1,173.0	$	(0.3)	$	1,869.2
Stock-based compensation expense	—	—		11.2		—		—		11.2

Tax withholding on restricted stock vesting	—	—		(2.5)		—		—		(2.5)
Stock repurchases and retirement of shares	(0.9)	—		(12.6)		(80.0)		—		(92.6)
Other	—	—		—		—		(1.7)		(1.7)
Net income	—	—		—		72.5		—		72.5
Balance at June 30, 2022	50.4	$	0.5	$	692.1	$	1,165.5	$	(2.0)	$	1,856.1

Three Months Ended June 30, 2021
Balance at March 31, 2021	53.2	$	0.5	$	674.5	$	975.0	$	(4.2)	$	1,645.8
Stock-based compensation expense	—	—		10.8		—		—		10.8

Tax withholding on restricted stock vesting	—	—		(2.3)		—		—		(2.3)

Other	—	—		—		—		1.3		1.3

SEC Form 10-Q filed by ASGN Incorporated