0000890564false00008905642024-10-232024-10-23

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of report (Date of earliest event reported): October 23, 2024 (October 23, 2024)

ASGN Incorporated
(Exact name of registrant as specified in its charter)
 
Delaware 001-35636 95-4023433
(State or other jurisdiction
of incorporation or organization)		 (Commission
File Number)		 (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
Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of exchange on which registered
Common StockASGNNYSE
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
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. ☐


Item 2.02 Results of Operations and Financial Condition.

On October 23, 2024, ASGN Incorporated (the “Company”) announced its financial results for the third quarter of 2024. A copy of the press release is furnished pursuant to Item 2.02 of this Current Report on Form 8-K as Exhibit 99.1. The information in this report, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.


Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
104.1Cover page interactive data file (embedded within the Inline XBRL document)




SIGNATURE

Pursuant to the requirements of the Exchange Act, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized



ASGN Incorporated
Date: October 23, 2024/s/ Marie L. Perry
Marie L. Perry
Executive Vice President and Chief Financial Officer


Exhibit 99.1
ASGN Incorporated Reports Third Quarter 2024 Results
Adjusted EBITDA and gross margins at midpoint or top end of guidance estimates

October 23, 2024

RICHMOND, VA.— (BUSINESS WIRE) -- ASGN Incorporated (NYSE: ASGN), a leading provider of IT services and solutions to the commercial and government sectors, reported financial results for the quarter ended September 30, 2024.

Highlights

•Revenues were $1.031 billion
•Net income was $47.5 million
•Adjusted EBITDA (a non-GAAP measure) was $116.9 million (11.3 percent of revenues)
•Operating cash flows were $135.8 million and Free Cash Flow (a non-GAAP measure) was $127.9 million
•Repurchased approximately 1.0 million shares of the Company's common stock for $95.6 million

IT Consulting Revenues - Approximately 57.9 percent of total revenues

•Commercial Segment - New bookings for the trailing-twelve-month period ("TTM") were $1.2 billion; book-to-bill ratio was 1.1 to 1
•Federal Government Segment - New contract awards for the TTM were $1.1 billion; book-to-bill ratio was 0.9 to 1

Management Commentary

"Our results for the third quarter of 2024 show that market demand remains relatively stable,” said ASGN’s Chief Executive Officer, Ted Hanson. “Revenues of $1.031 billion were similar to the second quarter and within our guidance range. Adjusted EBITDA margin of 11.3 percent was at the midpoint of our guidance range and reflects the continued evolution of our business toward higher-end, high-value IT consulting work, which is approaching 60 percent of total revenues.”

Hanson continued, “Despite tight budgets, clients know that advancing their IT strategies is essential to sustaining their competitive edge. Strong commercial and government bookings in the quarter demonstrate the continued need for ASGN’s IT services and are a sign of pent-up demand. As we complete the final quarter of the year, ASGN remains focused on being positioned to support the business and technology needs of our clients.”



Third Quarter 2024 Financial Results - Summary

Three Months Ended,
September 30,June 30,
(In millions, except per share data)202420232024
Revenues
Commercial Segment$718.8 $782.4 $725.7 
Federal Government Segment312.2 334.4 309.0 
1,031.0 1,116.8 1,034.7 
Gross Margin
Commercial Segment32.8 %32.5 %32.7 %
Federal Government Segment20.7 %20.4 %20.6 %
Consolidated29.1 %28.9 %29.1 %
Net income$47.5 $59.4 $47.2 
Earnings per diluted share$1.06 $1.23 $1.02 
Non-GAAP Financial Measures
Adjusted Net Income$64.3 $81.1 $62.6 
Adjusted Net Income per diluted share$1.43 $1.68 $1.36 
Adjusted EBITDA$116.9 $137.5 $117.1 
Adjusted EBITDA margin11.3 %12.3 %11.3 %
    
__________
Definitions of non-GAAP measures and reconciliation to GAAP measurements are included in the tables that accompany this release.

Consolidated revenues for the quarter were $1.03 billion, compared with $1.12 billion in the third quarter of 2023. From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (69.7 percent of total revenues) totaled $718.8 million, compared with $782.4 million in the third quarter of 2023. Commercial Segment revenues are categorized into five verticals: (i) Consumer and Industrial, (ii) Financial Services, (iii) Technology, Media and Telecom ("TMT"), (iv) Healthcare, and (v) Business Services. Two of these five industry verticals saw growth in the third quarter. TMT increased double digits year-over-year, while Consumer and Industrial improved modestly and was up low single digits year-over-year, and the remaining three verticals declined year-over-year. Federal Government Segment revenues (30.3 percent of total revenues), the sixth industry vertical, were $312.2 million, compared with $334.4 million in the prior-year period.

Total IT consulting revenues were $597.2 million (57.9 percent of total revenues), compared with $608.6 million (54.5 percent of total revenues) in the third quarter of 2023. Commercial Segment consulting revenues were $285.0 million, up 3.9 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $312.2 million, as stated above. Assignment revenues totaled $433.8 million (42.1 percent of total revenues), compared with $508.2 million in the prior-year period, and reflect continued softness in the more cyclical portions of the Commercial Segment business.

Gross margin for the third quarter of 2024 was 29.1 percent, an expansion of 20 basis points from the third quarter of 2023. Gross margin for the Commercial Segment was up 30 basis points, reflecting a higher mix of consulting revenues as well as margin expansion in these revenues. Gross margin for the Federal Government Segment was up 30 basis points.

Selling, general, and administrative (“SG&A”) expenses were $207.5 million, compared with $206.0 million in the third quarter of 2023. SG&A expenses included $1.1 million in acquisition, integration, and strategic planning expenses, and a $3.6 million legal settlement accrual, both of which were not included in the Company's previously-announced guidance estimates.

Net income was $47.5 million ($1.06 per diluted share), compared with $59.4 million ($1.23 per diluted share) in the third quarter of 2023.
2


Adjusted EBITDA (a non-GAAP measure) was $116.9 million, or 11.3 percent of revenues ("Adjusted EBITDA margin," a non-GAAP measure), compared with $137.5 million or 12.3 percent of revenues in the third quarter of 2023.

Capital Resources and Capital Allocation

At September 30, 2024, the Company had:
•Cash and cash equivalents of $166.6 million
•Full availability under its $500.0 million Senior Secured Revolving Credit Facility (due 2028)
•Senior Secured Debt of $495.0 million (term loan B facility due 2030)
•Senior unsecured notes totaling $550.0 million at 4.625 percent (due 2028)

In the third quarter of 2024 the Company repurchased 1.0 million shares of its common stock for $95.6 million at an average price of $92.26 per share. Approximately $572.9 million remained available at quarter end for repurchases under the Company's stock repurchase plan.

Fourth Quarter 2024 Financial Estimates

The Company's financial estimates for the fourth quarter of 2024, which are set forth below, assume no deterioration in the markets ASGN serves. These estimates do not include any acquisition, integration, or strategic planning expenses. Reconciliations of estimated net income to the estimated non-GAAP financial measures are included in the tables that accompany this release.

(In millions, except per share data)LowHigh
Revenues$990.0$1,010.0
SG&A expenses(1)
197.8201.5
Amortization of intangible assets13.913.9
Net income39.242.1
Earnings per diluted share$0.88$0.94
Gross margin28.4 %28.6 %
Effective tax rate(2)
28.0 %28.0 %
Non-GAAP Financial Measures:
Adjusted EBITDA$103.0$107.0
Adjusted Net Income(3)
$52.5$55.4
Adjusted Net Income per diluted share(3)
$1.18$1.24
Adjusted EBITDA margin10.4 %10.6 %
___________
(1) Includes non-cash expenses totaling $19.2 million, comprised of: (i) $9.8 million of stock-based compensation, (ii) $7.7 million of depreciation, and (iii) $1.7 million of amortization related to capitalized cloud-based application implementation costs.
(2) Estimated effective tax rate before any excess tax benefits related to stock-based compensation.
(3) Does not include the “Cash Tax Savings on Indefinite-lived Intangible Assets.” These savings total $8.5 million each quarter, or $0.19 per diluted share, and represent the benefit of the tax deduction that ASGN receives from the amortization of goodwill and trademarks.

The financial estimates above are based on an estimate of “Billable Days,” which 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. There are 61 Billable Days in the fourth quarter of 2024, which is one more day than the year ago period, and 2.5 fewer days than the third quarter of 2024.

3

Conference Call

The Company will hold a conference call today at 4:30 p.m. ET to review its financial results for the third quarter of 2024 and to provide fourth quarter 2024 estimates. The dial-in number is 877-407-0792 (+1-201-689-8263 outside the United States), and the conference ID number is 13748597. Participants should dial in ten minutes before the call. The prepared remarks, supplemental materials and webcast for this call can be accessed at www.asgn.com.

A replay of the conference call will be available beginning today at 7:30 p.m. ET until November 6, 2024. The access number for the replay is 844-512-2921 (+1-412-317-6671 outside the United States for callers outside the United States) and the conference ID number is 13748597.

About ASGN Incorporated

ASGN Incorporated (NYSE: ASGN) is a leading provider of IT services and solutions to the commercial and government sectors. ASGN helps corporate enterprises and government organizations develop, implement, and operate critical IT and business solutions through its integrated offerings. For more information, please visit asgn.com.

Safe Harbor

Certain statements made in this news release are “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and involve a high degree of risk and uncertainty. Forward-looking statements include statements regarding our anticipated financial and operating performance.

All statements in this news release, other than those setting forth strictly historical information, are forward-looking statements. Forward-looking statements are not guarantees of future performance and actual results might differ materially. In particular, we make no assurances that the proposed revenue, expense, and profit estimates outlined above will be achieved. Additional examples of forward-looking statements in this press release include, without limitation, statements regarding our ability to attract, train, and retain qualified internal employees, the availability of qualified billable professionals, management of our growth, continued performance and improvement of our enterprise-wide information systems, our ability to successfully adapt to, integrate, and leverage new and developing technologies, including generative artificial intelligence, our ability to manage our litigation matters, the successful integration of acquisitions, and other risks detailed from time-to-time in our reports filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC on February 23, 2024. We specifically disclaim any intention or duty to update any forward-looking statements contained in this news release.

4

CONSOLIDATED SELECTED FINANCIAL DATA (Unaudited)
(In millions, except per share data)
Three Months EndedNine Months Ended
 September 30,
September 30,June 30,
20242023202420242023
Results of Operations:
Revenues
$1,031.0 $1,116.8 $1,034.7 $3,114.7 $3,376.5 
Costs of services
730.6 794.4 733.6 2,217.0 2,401.4 
Gross profit
300.4 322.4 301.1 897.7 975.1 
Selling, general, and administrative expenses207.5 206.0 205.6 623.3 640.6 
Amortization of intangible assets
14.0 17.8 15.1 44.2 53.8 
Operating income
78.9 98.6 80.4 230.2 280.7 
Interest expense
(16.0)(18.5)(15.8)(49.4)(49.7)
Income before income taxes
62.9 80.1 64.6 180.8 231.0 
Provision for income taxes
15.4 20.7 17.4 48.0 62.0 
Net income$47.5 $59.4 $47.2 $132.8 $169.0 
Earnings per share:
Basic$1.07 $1.23 $1.03 $2.93 $3.46 
Diluted$1.06 $1.23 $1.02 $2.89 $3.43 
Number of shares and share equivalents used to calculate earnings per share:
Basic
44.5 48.1 45.7 45.4 48.8 
Diluted
45.0 48.4 46.1 45.9 49.2 


5

CONSOLIDATED SELECTED FINANCIAL DATA (Continued) (Unaudited)
(In millions)

Three Months EndedNine Months Ended
September 30,
September 30,June 30,
20242023202420242023
Summary Statements of Cash Flow Data:
Cash provided by operating activities$135.8 $147.5 $90.7 $299.8 $340.5 
Cash used in investing activities(8.0)(9.8)(5.2)(24.0)(33.3)
Cash used in financing activities(92.9)(85.6)(110.7)(283.6)(231.6)
Reconciliation of GAAP to Non-GAAP Measure:
Cash provided by operating activities$135.8 $147.5 $90.7 $299.8 $340.5 
Capital expenditures(7.9)(9.8)(5.3)(24.0)(32.7)
Free Cash Flow (non-GAAP measure)$127.9 $137.7 $85.4 $275.8 $307.8 
September 30,December 31,
20242023
Summary Balance Sheet Data:
Cash and cash equivalents$166.6 $175.9 
Working capital503.7 579.2 
Goodwill and intangible assets, net2,348.0 2,392.0 
Total assets3,431.7 3,544.6 
Long-term debt1,034.4 1,036.6 
Total liabilities1,657.3 1,652.5 
Total stockholders’ equity1,774.4 1,892.1 
6

RECONCILIATIONS OF GAAP TO NON-GAAP MEASURES (Unaudited)
(In millions, except per share data)
Three Months EndedNine Months Ended
September 30,
September 30,June 30,
20242023202420242023
Net income$47.5 $59.4 47.2 $132.8 $169.0 
Interest expense16.0 18.5 15.8 49.4 49.7 
Provision for income taxes15.4 20.7 17.4 48.0 62.0 
Depreciation and other amortization(1)
9.4 7.0 9.4 28.2 20.8 
Amortization of intangible assets14.0 17.8 15.1 44.2 53.8 
EBITDA (non-GAAP measure)102.3 123.4 104.9 302.6 355.3 
Stock-based compensation9.9 10.3 11.0 32.6 33.7 
Legal settlement expense3.6 2.7 — 3.6 2.7 
Acquisition, integration, and strategic planning expenses1.1 1.1 1.2 3.5 4.5 
Adjusted EBITDA (non-GAAP measure)$116.9 $137.5 $117.1 $342.3 $396.2 


Three Months EndedNine Months Ended
September 30,June 30,September 30,
20242023202420242023
Net income$47.5 $59.4 $47.2 $132.8 $169.0 
Credit facility amendment expenses— 2.3 — 1.5 2.3 
Legal settlement expense3.6 2.7 — 3.6 2.7 
Acquisition, integration, and strategic planning expenses1.1 1.1 1.2 3.5 4.5 
Tax effect on adjustments(1.3)(1.6)(0.3)(2.3)(2.5)
Non-GAAP net income50.9 63.9 48.1 139.1 176.0 
Amortization of intangible assets14.0 17.8 15.1 44.2 53.8 
Other(0.6)(0.6)(0.6)(1.8)(1.8)
Adjusted Net Income (non-GAAP measure)(2)
$64.3 $81.1 $62.6 $181.5 $228.0 
Per diluted share:
Net income$1.06 $1.23 $1.02 $2.89 $3.43 
Adjustments0.37 0.45 0.34 1.06 1.20 
Adjusted Net Income (non-GAAP measure)(2)
$1.43 $1.68 $1.36 $3.95 $4.63 
Common shares and share equivalents (diluted)45.0 48.4 46.1 45.9 49.2 
_________
(1) The three and nine months ended September 30, 2024, include $1.6 million and $4.1 million, respectively, of amortization related to capitalized cloud-based application implementation costs included in SG&A expenses.
(2)    Does not include the “Cash Tax Savings on Indefinite-lived Intangible Assets,” which currently total approximately $8.5 million per quarter (approximately $0.19 per diluted share) and represent the benefit of the tax deduction for amortization of goodwill and trademarks.

7

FINANCIAL ESTIMATES FOR THE FOURTH QUARTER OF 2024
RECONCILIATIONS OF ESTIMATED GAAP TO NON-GAAP MEASURES
(In millions, except per share data)
LowHigh
Net income(1)
$39.2 $42.1 
Interest expense15.0 15.0 
Provision for income taxes15.3 16.4 
Depreciation and other amortization(2)
9.8 9.8 
Amortization of intangible assets13.9 13.9 
EBITDA (non-GAAP measure)93.2 97.2 
Stock-based compensation9.8 9.8 
Adjusted EBITDA (non-GAAP measure)$103.0 $107.0 


LowHigh
Net income(1)
$39.2 $42.1 
Amortization of intangible assets13.9 13.9 
Other(0.6)(0.6)
Adjusted Net Income (non-GAAP measure)(3)
$52.5 $55.4 
Per diluted share:
Net income$0.88 $0.94 
Adjustments0.30 0.30 
Adjusted Net Income (non-GAAP measure)(3)
$1.18 $1.24 
_______
(1)Does not include acquisition, integration, and strategic planning expenses, or excess tax benefits related to stock-based compensation.
(2)Comprised of (i) $7.7 million of depreciation included in SG&A expenses, (ii) $1.7 million of amortization related to capitalized cloud-based application implementation costs included in SG&A expenses, and (iii) $0.4 million of depreciation included in costs of services.
(3)Does not include the "Cash Tax Savings on Indefinite-lived Intangible Assets". These savings total $8.5 million per quarter ($0.19 per diluted share) and represent the benefit of the tax deduction for amortization of goodwill and trademarks.

8

Non-GAAP Financial Measures

Statements in this release include financial information presented in accordance with accounting principles generally accepted in the United States ("GAAP") and also include non-GAAP financial measures that are provided as additional information to enhance the overall understanding of the Company's current financial performance and not as an alternative to the consolidated interim financial statements presented in accordance with GAAP. Management uses these non-GAAP measures (earnings before interest, taxes, depreciation, and amortization ("EBITDA"), Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share, Free Cash Flow, and Revenues on a same Billable Days basis) to evaluate the Company's financial performance. These terms might not be calculated in the same manner as, and thus might not be comparable to, similarly titled measures reported by other companies. The financial information tables that accompany this press release include reconciliations of net income to non-GAAP financial measures.

EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin provide a measure of the Company's operating results in a manner that is focused on the performance of the Company's core business on an ongoing basis, by removing the effects of non-operating and certain non-cash expenses. These non-operating and non-cash items are specifically identified in the reconciliations of GAAP measures to Non-GAAP measures that accompany this release.

Adjusted Net Income provides a method for assessing the Company's operating results in a manner that is focused on the performance of the Company's core business on an ongoing basis by removing the effects of non-operating and certain non-cash expenses, adjusted for some of the cash flows associated with amortization of intangible assets to more fully present the performance of the Company's acquisitions. The calculation of Adjusted Net Income is presented in the reconciliations of GAAP measures to Non-GAAP measures that accompany this release.

Free Cash Flow provides useful information to investors about the amount of cash generated by the business that can be used for strategic opportunities and is computed as presented in the tables that accompany this release.

Commercial consulting bookings are defined as the value of new contracts entered into during a specified period, including adjustments for the effects of changes in contract scope and contract terminations. The book-to-bill ratio for the Commercial consulting business is the ratio of bookings to revenues for a specified period.

Federal Government Segment new contract awards are defined as 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. The book-to-bill ratio for the Federal Government Segment is the ratio of New Contract Awards to revenues for a specified period.

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; 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.


Contact:

Kimberly Esterkin
Vice President, Investor Relations
kimberly.esterkin@asgn.com


9
v3.24.3
Document and Entity Information
Oct. 23, 2024
Document Information [Line Items]  
Document Period End Date Oct. 23, 2024
Document Type 8-K
Document Period End Date Oct. 23, 2024
Entity Registrant Name ASGN Inc
Entity Incorporation, State or Country Code DE
Entity File Number 001-35636
Entity Tax Identification Number 95-4023433
Entity Address, Address Line One 4400 Cox Road, Suite 110
Entity Address, City or Town Glen Allen,
Entity Address, State or Province VA
Entity Address, Postal Zip Code 23060
City Area Code 888
Local Phone Number 482-8068
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol ASGN
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0000890564
Amendment Flag false
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