ASGN Inc
For the period ended Sep 30, 2024. Filed Oct 31, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Oct 31, 2024
EFOR$34.34-3.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0000890564-24-000019
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0000890564-24-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 57 previous paragraphs and 57 current paragraphs.
31 unchanged; 24 reworded; 2 added; 2 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (2)
Current report
Net income was $47.5 million, down from $59.4 million in the third quarter of 2023.
Current report
Net income was $132.8 million, down from $169.0 million in the first nine months of 2023.
Removed paragraphs (2)
Previous report
Net income was $47.2 million, down from $60.1 million in the second quarter of 2023.
Previous report
Net income was $85.3 million, down from $109.6 million in the first six months of 2023.
Reworded paragraphs (24)
Previous wording
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. Anystatements 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, 2023 ("2023 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.
Current wording
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 (the "Exchange Act"). Such statements are based upon current expectations, as well as management's beliefs and assumptions, and involve a high degree of risk and uncertainty. Anystatements 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, 2023 ("2023 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.
Previous wording
Revenues for the quarter were $1.0 billion, down 8.5 percent year-over-year. The table below shows our revenues by segment for the three months ended June 30, 2024 and 2023 (in millions).
Current wording
Revenues for the quarter were $1.0 billion, down 7.7 percent year-over-year. The table below shows our revenues by segment for the three months ended September 30, 2024 and 2023 (in millions).
Previous wording
From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (70.1 percent of total revenues) were down 10.6 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 Services. The TMT industry vertical had mid single-digit growth, while the remaining four industry verticals declined year-over-year. Federal Government Segment revenues (29.9 percent of total revenues), the sixth industry vertical, were down 3.3 percent year-over-year.
Current wording
From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (69.7 percent of total revenues) were down 8.1 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 Services. The TMT industry vertical had double-digit growth, while Consumer and Industrial was up low single digits year-over-year. The remaining three industry verticals declined year-over-year. Federal Government Segment revenues (30.3 percent of total revenues), the sixth industry vertical, were down 6.6 percent year-over-year, reflecting lower third-party software licenses revenues compared with the prior year.
Previous wording
Total IT consulting revenues were $590.5 million (57.1 percent of total revenues), down 1.7 percent year-over-year. Commercial Segment consulting revenues were $281.5 million, essentially flat year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $309.0 million, down 3.3 percent year-over-year as stated above. Assignment revenues, which totaled $444.2 million (42.9 percent of total revenues), were down 16.2 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles (i.e., more cyclical).
Current wording
Total IT consulting revenues were $597.2 million (57.9 percent of total revenues), down 1.9 percent year-over-year. 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, down 6.6 percent year-over-year as stated above. Assignment revenues, which totaled $433.8 million (42.1 percent of total revenues), were down 14.6 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment business that are more sensitive to changes in macroeconomic cycles (i.e., more cyclical).
Previous wording
Consolidated gross profit declined 7.7 percent year-over-year on a revenue decline of 8.5 percent. Gross margin for the second quarter of 2024 was 29.1 percent, an expansion of 20 basis points from the second quarter of 2023. Gross margin for the Commercial Segment was up 50 basis points, reflecting a higher mix of consulting revenues as well as margin expansion for both consulting and assignment revenues. Gross margin for the Federal Government Segment was up 10 basis points.
Current wording
Consolidated gross profit declined 6.8 percent year-over-year on a revenue decline of 7.7 percent. Gross margin for the third quarter of 2024 was 29.1 percent, an expansion of 20 basis points compared with 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 due to lower third-party software licenses revenues, which carry lower margins.
Previous wording
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 $205.6 million, down from $210.5 million in the second quarter of 2023. The decrease in SG&A expense reflected, among other things, lower compensation-related expenses.
Current wording
Selling, general, and administrative ("SG&A") expenses consist primarily of compensation expense for our field operations and corporate staff, information systems, rent, public company expenses, and other general and administrative expenses. SG&A expenses were $207.5 million, compared with $206.0 million in the third quarter of 2023. The higher SG&A expenses reflected higher legal settlement expenses and depreciation and amortization of capitalized cloud implementation costs.
Previous wording
Amortization of intangible assets was $15.1 million, compared with $17.9 million in the second quarter of 2023. The decrease was due to the accelerated amortization method of certain acquired intangibles, which have high amortization rates at the beginning of their useful lives.
Current wording
Amortization of intangible assets was $14.0 million, compared with $17.8 million in the third quarter of 2023. The decrease was due to the accelerated amortization method of certain acquired intangibles, which have high amortization rates at the beginning of their useful lives.
Previous wording
Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and interest income, was $15.8 million for the second quarter of 2024 and 2023. The weighted-average outstanding borrowings and cash-based interest expense rate in the second quarter of 2024 and 2023 were $1.0 billion and 6.0 percent, and $1.0 billion and 5.8 percent, respectively.
Current wording
Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and interest income, was $16.0 million, down from $18.5 million in the third quarter of 2023. The decrease is attributable to $2.3 million of costs in the prior year period that 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 2024 and 2023 were $1.0 billion and 6.0 percent for both periods.
Previous wording
The provision for income taxes was $17.4 million, down from $22.0 million in the second quarter of 2023 due to lower income before income taxes. The effective tax rate was 26.9 percent, up from 26.8 percent in the second quarter of 2023.
Current wording
The provision for income taxes was $15.4 million, down from $20.7 million in the third quarter of 2023 due to lower income before income taxes. The effective tax rate was 24.5 percent, down from 25.8 percent in the third quarter of 2023.
Previous wording
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2024 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2023
Current wording
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024 COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 2023
Previous wording
Revenues for the first half of the year were $2.1 billion, down 7.8 percent over the first half of 2023. The table below shows our revenues by segment for the six months ended June 30, 2024 and 2023 (in millions).
Current wording
Revenues for the first nine months of the year were $3.1 billion, down 7.8 percent year-over-year. The table below shows our revenues by segment for the nine months ended September 30, 2024 and 2023 (in millions).
Previous wording
Commercial Segment revenues (69.9 percent of total revenues) were down 11.3 percent year-over-year, and all five of the industry verticals were down. Federal Government Segment revenues (30.1 percent of total revenues), the sixth industry vertical, were up 1.7 percent year-over-year.
Current wording
Commercial Segment revenues (69.9 percent of total revenues) were down 10.3 percent year-over-year. The TMT industry vertical had low single-digit growth. The remaining four industry verticals declined year-over-year. Federal Government Segment revenues (30.1 percent of total revenues), the sixth industry vertical, were down 1.3 percent year-over-year.
Previous wording
Total IT consulting services revenues were $1.2 billion (56.9 percent of total revenues), up 1.4 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $626.5 million, up 1.7 percent year-over-year as stated above. Commercial Segment consulting revenues were $558.5 million, up 1.0 percent year-over-year. Assignment revenues, which totaled $898.7 million (43.1 percent of total revenues), were down 17.6 percent year-over-year reflecting continued softness in the more cyclical portions of the Commercial Segment business.
Current wording
Total IT consulting services revenues were $1.8 billion (57.2 percent of total revenues), up 0.3 percent year-over-year. Commercial Segment consulting revenues were $843.5 million, up 2.0 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $938.7 million, down 1.3 percent year-over-year as stated above. Assignment revenues, which totaled $1.3 billion (42.8 percent of total revenues), were down 16.7 percent year-over-year, reflecting continued softness in the more cyclical portions of the Commercial Segment business.
Previous wording
The table below shows gross profit and gross margin by segment for the six months ended June 30, 2024 and 2023 (in millions).
Current wording
The table below shows gross profit and gross margin by segment for the nine months ended September 30, 2024 and 2023 (in millions).
Previous wording
Consolidated gross profit declined 8.5 percent year-over-year on a revenue decline of 7.8 percent. Gross margin was 28.7 percent, a compression of 20 basis points from the first half of 2023. The compression mainly related to business mix, including a higher mix of revenues from the Federal Government Segment, which have a lower gross margin than Commercial Segment revenues.
Current wording
Consolidated gross profit declined 7.9 percent year-over-year on a revenue decline of 7.8 percent. Gross margin was 28.8 percent, a compression of 10 basis points from the first nine months of 2023. The compression mainly related to business mix, including a higher mix of revenues from the Federal Government Segment, which have a lower gross margin than Commercial Segment revenues.
Previous wording
SG&A expenses were $415.8 million, down from $434.6 million in the first six months of 2023. The decrease in SG&A expenses reflected, among other things, lower compensation-related expenses.
Current wording
SG&A expenses were $623.3 million, down from $640.6 million in the first nine months of 2023. The decrease in SG&A expenses was primarily related to lower compensation-related expenses.
Previous wording
Amortization of intangible assets was $30.2 million, compared with $36.0 million in the first six months of 2023. The decrease was due to the accelerated amortization method of certain acquired intangibles, which have high amortization rates at the beginning of their useful lives.
Current wording
Amortization of intangible assets was $44.2 million, compared with $53.8 million in the first nine months of 2023. The decrease was due to the accelerated amortization method of certain acquired intangibles, which have high amortization rates at the beginning of their useful lives.
Previous wording
Interest expense, net was $33.4 million, up from $31.2 million in the first six months of 2023. The increase was primarily a result of higher interest rates on the senior secured credit facility and $1.5 million of costs related to the March 2024 amendment to the senior secured credit facility, which was partially offset by interest income in the current year. The weighted-average outstanding borrowings and cash-based interest expense rate for the first six months of 2024 and 2023 were $1.0 billion and 6.1 percent (excluding costs related to aforementioned amendment), and $1.0 billion and 5.8 percent, respectively.
Current wording
Interest expense, net was $49.4 million, down from $49.7 million in the first nine months of 2023. The decrease was primarily the result of higher interest income and lower debt amendment fees (related to refinancing the senior secured credit facility in both periods), partially offset by higher interest expense on the senior secured credit facility. The weighted-average outstanding borrowings for the first nine months of 2024 and 2023 were $1.05 billion and the cash-based interest rate was 6.1 percent and 5.8 percent (excluding costs related to debt amendments), respectively.
Previous wording
The provision for income taxes was $32.6 million, down from $41.3 million in the first six months of 2023 due to lower income before income taxes. The effective tax rate was 27.7 percent, up from 27.4 percent in the first six months of 2023.
Current wording
The provision for income taxes was $48.0 million, down from $62.0 million in the first nine months of 2023 due to lower income before income taxes. The effective tax rate was 26.5 percent, down from 26.8 percent in the first nine months of 2023.
Previous wording
Our working capital, which is current assets less current liabilities, at June 30, 2024 was $523.8 million, and our cash and cash equivalents were $132.2 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 June 30, 2024, 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.
Current wording
Our working capital, which is current assets less current liabilities, at September 30, 2024 was $503.7 million, and our cash and cash equivalents were $166.6 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, 2024, 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.
Previous wording
Net cash provided by operating activities was $164.0 million for the first six months of 2024, compared with $193.0 million in the same period of 2023. Net cash provided by operating activities before changes in operating assets and liabilities was $162.6 million, compared with $186.2 million in the same period of 2023. Net cash provided by changes in operating assets and liabilities was $1.4 million for the first six months of 2024, compared with $6.8 million in the same period of 2023.
Current wording
Net cash provided by operating activities was $299.8 million for the first nine months of 2024, compared with $340.5 million in the same period of 2023. Net cash provided by operating activities before changes in operating assets and liabilities was $245.0 million, compared with $286.6 million in the same period of 2023. Net cash provided by changes in operating assets and liabilities was $54.8 million for the first nine months of 2024, compared with $53.9 million in the same period of 2023.
Previous wording
Net cash used in investing activities was $16.0 million and $23.5 million for the first six months of 2024 and 2023, respectively, and primarily related to capital expenditures.
Current wording
Net cash used in investing activities was $24.0 million and $33.3 million for the first nine months of 2024 and 2023, respectively, and primarily related to capital expenditures.
Previous wording
Net cash used in financing activities was $190.7 million for the first six months of 2024 and included $187.7 million to repurchase the Company's common stock. Net cash used in financing activities in the first six months of the prior year was $146.0 million and included $106.4 million to repurchase the Company's common stock, as well as net repayments of borrowings under the revolving credit facility totaling $31.5 million.
Current wording
Net cash used in financing activities was $283.6 million for the first nine months of 2024 and included $283.3 million to repurchase the Company's common stock. Net cash used in financing activities in the first nine months of the prior year was $231.6 million 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.
Previous wording
There were no significant changes to our critical accounting policies and estimates during thesecond quarter of 2024 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 10-K.
Current wording
There were no material changes to our critical accounting policies and estimates during thethird quarter of 2024 compared with those disclosed in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2023 10-K.