ASGN Inc

Previous wording

Revenues for the year were $4.5 billion, down 2.8 percent year-over-year. Revenues in 2023 included approximately $128.0 million from businesses acquired in the prior year through their acquisition date anniversaries. Excluding the contributions from acquisitions, revenues declined 5.6 percent year-over-year. The table below shows our revenues by segment (in millions).

Current wording

Revenues for the year were $4.1 billion, down 7.9 percent year-over-year. The table below shows our revenues by segment (in millions).

Previous wording

From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (71.3 percent of total revenues) were down 7.6 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. Commercial revenues fall into five broad industry verticals: (i) Financial Services, (ii) Consumer and Industrials, (iii) Healthcare, (iv) Technology, Media and Telecom, and (v) Business and Government Services. The Consumer and Industrials industry vertical had low single-digit growth, while the remaining four industry verticals declined year-over-year. Federal Government Segment revenues (28.7 percent of total revenues), the sixth industry vertical, were up 11.4 percent year-over-year and included $74.3 million from Iron Vine through its acquisition date anniversary, which was at the beginning of October 2023.

Current wording

From an industry perspective, the Company operates in six broad industry verticals. Commercial Segment revenues (70.0 percent of total revenues) were down 9.6 percent year-over-year and are categorized into five broad industry verticals: (i) Financial Services, (ii) Consumer and Industrials, (iii) Healthcare, (iv) Technology, Media and Telecom ("TMT"), and (v) Business and Government Services. The TMT industry vertical had low single-digit growth, while the remaining four industry verticals declined year-over-year. Federal Government Segment revenues (30.0 percent of total revenues), the sixth industry vertical, were down 3.5 percent year-over-year, reflecting lower third-party software licenses revenues compared with the prior year.

Previous wording

Total IT consulting services revenues were $2.4 billion (53.3 percent of total revenues), up 12.7 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $1.3 billion, up 11.4 percent year-over-year as stated above, and Commercial Segment consulting revenues were $1.1 billion, up 14.2 percent year-over-year. The growth in IT consulting services revenues was offset by a 16.0 percent year-over-year decline in assignment revenues which totaled $2.1 billion (46.7 percent of total revenues), reflecting continued softness in the more discretionary and cyclical portions of the Commercial Segment business.

Current wording

Total IT consulting services revenues were $2.4 billion (57.5 percent of total revenues), down 0.5 percent year-over-year. Federal Government Segment revenues, which are all consulting revenues, were $1.2 billion, down 3.5 percent year-over-year as stated above. Commercial Segment consulting revenues were $1.1 billion, up 3.0 percent year-over-year. Assignment revenues, which totaled $1.7 billion (42.5 percent of total revenues), were down 16.3 percent year-over-year, reflecting continued softness in the portions of the Commercial Segment Business that are more sensitive to changes in the macroeconomic cycles (i.e., more cyclical).

Previous wording

Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our billable professionals, other direct costs, and reimbursable out-of-pocket expenses.

Current wording

Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our contract professionals, other

Previous wording

Selling, general, and administrative ("SG&A") expenses were $844.2 million (19.0 percent of revenues), compared with $895.0 million (19.5 percent of revenues) in 2022. This improvement was primarily due to lower incentive compensation expense.

Current 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 $821.2 million (20.0 percent of revenues), compared with $844.2 million (19.0 percent of revenues) in 2023. The decrease in SG&A expenses was primarily due to lower compensation-related expense.

Previous wording

Interest expense was $66.4 million up from $45.9 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 were $1.1 billion and 5.9 percent (excluding costs related to the aforementioned amendments) in 2023, and $1.0 billion and 4.1 percent in 2022.

Current wording

Interest expense, net, which consists primarily of cash-based interest expense, amortization and adjustments to deferred loan costs, and interest income, was $64.3 million, down from $66.4 million in 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 2024 and 2023 were $1.05 billion and the cash-based interest expense rate was 6.0 percent and 5.9 percent (excluding interest income and costs related to debt amendments), respectively.

Previous wording

The provision for income taxes was $78.4 million, down from $96.7 million in 2022 due to lower income before income taxes. The effective tax rate of 26.3 percent was slightly lower than the effective tax rate of 26.6 percent for 2022.

Current wording

The provision for income taxes was $64.9 million, down from $78.4 million in 2023 due to lower income before income taxes. The effective tax rate of 27.0 percent was slightly higher than the effective tax rate of 26.3 percent in 2023.

Previous wording

Net income was $219.3 million in 2023, down from $268.1 million in 2022.

Current wording

Net income was $175.2 million, down from $219.3 million in 2023.

Previous wording

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. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an analysis of reported revenues. 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.

Current wording

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. Measuring Bookings involves the use of estimates and judgments and there are no independent standards or requirements governing the calculation of bookings. Information regarding Bookings is not comparable to, nor should it be substituted for, an analysis of reported revenues. 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 approximately one year.

Previous wording

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”). Information regarding New Contract Awards is not comparable to, nor should it be substituted for, an analysis of reported revenues. 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.

Current wording

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. There is no assurance our contract backlog will result in future revenues. 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”). Information regarding New Contract Awards is not comparable to, nor should it be substituted for, an analysis of reported revenues. 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.

Previous wording

Our working capital, which is current assets less current liabilities, at December 31, 2023 was $579.2 million, and our cash and cash equivalents were $175.9 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to fund our working capital and capital expenditure needs. At December 31, 2023, we had full availability of our $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 December 31, 2024 was $550.6 million, and our cash and cash equivalents were $205.2 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 December 31, 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 $456.9 million in 2023, compared with $307.8 million in 2022. Net cash provided by operating activities before changes in operating assets and liabilities was $400.8 million, compared with $448.5 million in 2022. Changes in operating assets and liabilities resulted in net cash generation of $56.1 million, compared with net cash usage of $140.7 million in 2022. This year-over-year change primarily related to lower accounts receivable due to lower revenues as well as improvement in accounts receivable days sales outstanding ("DSO"), compared with 2022 which had increasing accounts receivable due to revenue growth as well as an increase in DSO.

Current wording

Net cash provided by operating activities was $400.0 million in 2024, compared with $456.9 million in 2023. Net cash provided by operating activities before changes in operating assets and liabilities was $353.9 million, compared with $400.8 million in 2023. Net cash provided by changes in operating assets and liabilities was $46.1 million, compared with $56.1 million in 2023.

Previous wording

Net cash used in financing activities in 2023 was $310.9 million, and primarily consisted of $273.1 million to repurchase the Company's common stock, net repayments of borrowings under the revolving credit facility totaling $31.5 million, a required quarterly principal payment of $1.3 million on the term loan B, as well as 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. In 2022, net cash used in financing activities was $256.5 million and primarily consisted of $281.4 million of stock repurchases, as well as net borrowings under the revolving credit facility totaling $31.5 million.

Current wording

Net cash used in financing activities in 2024 was $333.2 million, and primarily consisted of $327.2 million to repurchase the Company's common stock and required principal payments of $5.0 million on the term loan B. Net cash used in financing activities in 2023 was $310.9 million and primarily consisted of $273.1 million to repurchase the Company's common stock, net repayments of borrowings under the revolving credit facility totaling $31.5 million, a required quarterly principal payment of $1.3 million on the term loan B, as well as 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

For additional information about these contractual cash obligations, see Notes 5. Leases, 9. Long-Term Debtand 10. Commitments and Contingencies in Item 8. Financial Statements and Supplementary Data.

Current wording

For additional information about these contractual cash obligations, see Notes 4. Leases, 8. Long-Term Debtand 9. Commitments and Contingencies in Item 8. Financial Statements and Supplementary Data.

Previous wording

We have retention policies for our workers’ compensation liability exposures. The workers' compensation loss reserves are based upon an actuarial report obtained from a third party and determined based on claims filed and claims incurred but not reported. We account for claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes in estimates, differences in estimates, and actual payments for claims are recognized in the period that the estimates changed or the payments were made. The workers' compensation loss reserves were $3.0 million and $2.6 million, net of anticipated insurance and indemnification recoveries of $10.5 million and $10.2 million, at December 31, 2023 and 2022, respectively. We have undrawn stand-by letters of credit outstanding to secure obligations for workers’ compensation claims and other obligations. The undrawn stand-by letters of credit were $3.9 million at December 31, 2023 and 2022.

Current wording

We have retention policies for our workers’ compensation liability exposures. The workers' compensation loss reserves are based upon an actuarial report obtained from a third party and are determined based on claims filed and claims incurred but not reported. We account for claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes in estimates, differences in estimates, and actual payments for claims are recognized in the period that the estimates changed or the payments were made. The workers' compensation loss reserves were $2.8 million and $3.0 million, net of anticipated insurance and indemnification recoveries of $10.5 million and $10.5 million, at December 31, 2024 and 2023, respectively. We have undrawn stand-by letters of credit outstanding to secure obligations for workers’ compensation claims and other obligations. The undrawn stand-by letters of credit were $3.7 million at December 31, 2024 and 2023.

Previous wording

We have a deferred compensation plan liability of $16.6 million and $13.6 million at December 31, 2023 and 2022, which was primarily included in other long-term liabilities. We established a rabbi trust to fund the deferred compensation plan (see Note 12. Stock-Based Compensation and Other Employee Benefit Plansin Item 8. Financial Statements and Supplementary Data).

Current wording

We have a deferred compensation plan liability of $17.8 million and $16.6 million at December 31, 2024 and 2023, which was primarily included in other long-term liabilities in the accompanying consolidated balance sheets. We established a rabbi trust to fund the deferred compensation plan, which is primarily comprised of mutual funds measured at fair value using the net asset value practical expedient, and approximates the deferred compensation plan liability balances (see Note 11. Stock-Based Compensation and Other Employee Benefit Plansin Item 8. Financial Statements and Supplementary Data).