UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 20212022
OR
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☐ | 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)
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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:
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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.
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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 July 31, 2021,August 4, 2022, the total number of outstanding shares of the Common Stock of ASGN Incorporated (the "Company") ($0.01 par value) was 52.950.2 million.
ASGN INCORPORATED AND SUBSIDIARIES
INDEX
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, 2021 | | December 31, 2020 | | June 30, 2022 | | December 31, 2021 |
ASSETS | ASSETS | | | | ASSETS | | | |
Current assets: | Current assets: | | Current assets: | |
Cash and cash equivalents | Cash and cash equivalents | $ | 375.4 | | | $ | 274.4 | | Cash and cash equivalents | $ | 490.6 | | | $ | 529.6 | |
Accounts receivable, net | Accounts receivable, net | 624.7 | | | 602.8 | | Accounts receivable, net | 843.2 | | | 708.2 | |
Prepaid expenses and income taxes | Prepaid expenses and income taxes | 12.7 | | | 22.5 | | Prepaid expenses and income taxes | 17.2 | | | 41.2 | |
Current assets held for sale | 341.9 | | | 77.4 | | |
Other current assets | Other current assets | 16.9 | | | 17.3 | | Other current assets | 15.3 | | | 30.4 | |
Total current assets | Total current assets | 1,371.6 | | | 994.4 | | Total current assets | 1,366.3 | | | 1,309.4 | |
Property and equipment, net | Property and equipment, net | 54.2 | | | 54.9 | | Property and equipment, net | 59.5 | | | 55.0 | |
Operating lease right-of-use assets | Operating lease right-of-use assets | 60.6 | | | 73.0 | | Operating lease right-of-use assets | 55.2 | | | 57.1 | |
Identifiable intangible assets, net | Identifiable intangible assets, net | 475.5 | | | 469.9 | | Identifiable intangible assets, net | 460.5 | | | 487.9 | |
Goodwill | Goodwill | 1,475.5 | | | 1,420.7 | | Goodwill | 1,560.1 | | | 1,569.5 | |
Non-current assets held for sale | 0 | | | 244.5 | | |
Other non-current assets | Other non-current assets | 21.4 | | | 20.6 | | Other non-current assets | 22.9 | | | 23.9 | |
Total assets | Total assets | $ | 3,458.8 | | | $ | 3,278.0 | | Total assets | $ | 3,524.5 | | | $ | 3,502.8 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | LIABILITIES AND STOCKHOLDERS’ EQUITY | | | |
Current liabilities: | Current liabilities: | | Current liabilities: | |
Accounts payable | Accounts payable | $ | 33.1 | | | $ | 38.3 | | Accounts payable | $ | 32.8 | | | $ | 20.1 | |
Accrued payroll and contract professional pay | 278.5 | | | 238.5 | | |
Accrued payroll | | Accrued payroll | 337.3 | | | 305.5 | |
Operating lease liabilities | Operating lease liabilities | 22.6 | | | 24.3 | | Operating lease liabilities | 22.5 | | | 23.3 | |
Current liabilities held for sale | 62.1 | | | 39.7 | | |
| Other current liabilities | Other current liabilities | 102.1 | | | 75.4 | | Other current liabilities | 99.8 | | | 102.0 | |
Total current liabilities | Total current liabilities | 498.4 | | | 416.2 | | Total current liabilities | 492.4 | | | 450.9 | |
Long-term debt | Long-term debt | 1,033.7 | | | 1,033.4 | | Long-term debt | 1,034.5 | | | 1,033.9 | |
Operating lease liabilities | Operating lease liabilities | 44.0 | | | 55.4 | | Operating lease liabilities | 38.4 | | | 40.2 | |
Deferred income tax liabilities | Deferred income tax liabilities | 108.5 | | | 108.5 | | Deferred income tax liabilities | 89.0 | | | 89.0 | |
Long-term liabilities held for sale | 0 | | | 11.5 | | |
Other long-term liabilities | Other long-term liabilities | 54.4 | | | 65.9 | | Other long-term liabilities | 14.1 | | | 23.4 | |
Total liabilities | Total liabilities | 1,739.0 | | | 1,690.9 | | Total liabilities | 1,668.4 | | | 1,637.4 | |
Commitments and contingencies (Note 6) | 0 | | 0 | |
Commitments and contingencies | | Commitments and contingencies | 0 | | 0 |
Stockholders’ equity: | Stockholders’ equity: | | Stockholders’ equity: | |
Preferred stock, $0.01 par value; 1.0 million shares authorized; 0 shares issued | 0 | | | 0 | | |
Common stock, $0.01 par value; 75.0 million shares authorized; 53.2 million and 52.9 million shares outstanding as of June 30, 2021 and December 31, 2020, respectively | 0.5 | | | 0.5 | | |
Preferred stock, $0.01 par value; 1.0 million shares authorized; no shares issued | | 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 | | 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 | Paid-in capital | 683.0 | | | 661.3 | | Paid-in capital | 692.1 | | | 690.8 | |
Retained earnings | Retained earnings | 1,039.2 | | | 926.3 | | Retained earnings | 1,165.5 | | | 1,174.4 | |
Accumulated other comprehensive loss | Accumulated other comprehensive loss | (2.9) | | | (1.0) | | Accumulated other comprehensive loss | (2.0) | | | (0.3) | |
Total stockholders’ equity | Total stockholders’ equity | 1,719.8 | | | 1,587.1 | | Total stockholders’ equity | 1,856.1 | | | 1,865.4 | |
Total liabilities and stockholders’ equity | Total liabilities and stockholders’ equity | $ | 3,458.8 | | | $ | 3,278.0 | | 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 | | | Three Months Ended | | | Six Months Ended |
June 30, | | June 30, | | | June 30, | | | June 30, |
| | 2021 | | 2020 | | 2021 | | 2020 | | | 2022 | | 2021 | | | 2022 | | 2021 |
Revenues | Revenues | $ | 974.9 | | | $ | 831.9 | | | $ | 1,881.9 | | | $ | 1,697.3 | | | Revenues | $ | 1,141.8 | | | $ | 974.9 | | | | $ | 2,232.8 | | | $ | 1,881.9 | |
Costs of services | Costs of services | 698.6 | | | 604.4 | | | 1,361.9 | | | 1,227.2 | | | Costs of services | 797.8 | | | 698.6 | | | | 1,562.2 | | | 1,361.9 | |
Gross profit | Gross profit | 276.3 | | | 227.5 | | | 520.0 | | | 470.1 | | | Gross profit | 344.0 | | | 276.3 | | | | 670.6 | | | 520.0 | |
Selling, general and administrative expenses | Selling, general and administrative expenses | 176.4 | | | 146.0 | | | 340.7 | | | 311.9 | | | Selling, general and administrative expenses | 220.4 | | | 176.4 | | | | 432.5 | | | 340.7 | |
Amortization of intangible assets | Amortization of intangible assets | 12.0 | | | 12.4 | | | 24.0 | | | 24.4 | | | Amortization of intangible assets | 13.5 | | | 12.0 | | | | 27.4 | | | 24.0 | |
Operating income | Operating income | 87.9 | | | 69.1 | | | 155.3 | | | 133.8 | | | Operating income | 110.1 | | | 87.9 | | | | 210.7 | | | 155.3 | |
Interest expense | Interest expense | (9.4) | | | (9.7) | | | (18.6) | | | (21.1) | | | Interest expense | (10.1) | | | (9.4) | | | | (19.4) | | | (18.6) | |
Income before income taxes | Income before income taxes | 78.5 | | | 59.4 | | | 136.7 | | | 112.7 | | | Income before income taxes | 100.0 | | | 78.5 | | | | 191.3 | | | 136.7 | |
Provision for income taxes | Provision for income taxes | 21.2 | | | 15.9 | | | 36.6 | | | 30.1 | | | Provision for income taxes | 27.4 | | | 21.2 | | | | 51.1 | | | 36.6 | |
Income from continuing operations | Income from continuing operations | 57.3 | | | 43.5 | | | 100.1 | | | 82.6 | | | Income from continuing operations | 72.6 | | | 57.3 | | | | 140.2 | | | 100.1 | |
Income from discontinued operations, net of income taxes | 6.9 | | | 5.3 | | | 12.8 | | | 10.0 | | | |
| Income (loss) from discontinued operations, net of income taxes | | Income (loss) from discontinued operations, net of income taxes | (0.1) | | | 6.9 | | | | (0.9) | | | 12.8 | |
Net income | Net income | $ | 64.2 | | | $ | 48.8 | | | $ | 112.9 | | | $ | 92.6 | | | Net income | $ | 72.5 | | | $ | 64.2 | | | | $ | 139.3 | | | $ | 112.9 | |
| Earnings per share: | Earnings per share: | | | Earnings per share: | | | |
Basic | | | |
Basic — | | Basic — | | | |
Continuing operations | Continuing operations | $ | 1.08 | | | $ | 0.83 | | | $ | 1.89 | | | $ | 1.57 | | | Continuing operations | $ | 1.42 | | | $ | 1.08 | | | | $ | 2.73 | | | $ | 1.89 | |
Discontinued operations | Discontinued operations | 0.13 | | | 0.10 | | | 0.24 | | | 0.19 | | | Discontinued operations | — | | | 0.13 | | | | (0.01) | | | 0.24 | |
| | $ | 1.21 | | | $ | 0.93 | | | $ | 2.13 | | | $ | 1.76 | | | | $ | 1.42 | | | $ | 1.21 | | | | $ | 2.72 | | | $ | 2.13 | |
Diluted | | | | | | | | | |
Diluted — | | Diluted — | | | | | | | | |
Continuing operations | Continuing operations | $ | 1.06 | | | $ | 0.82 | | | $ | 1.86 | | | $ | 1.56 | | | Continuing operations | $ | 1.41 | | | $ | 1.06 | | | | $ | 2.70 | | | $ | 1.86 | |
Discontinued operations | Discontinued operations | 0.13 | | | 0.10 | | | 0.24 | | | 0.18 | | | Discontinued operations | — | | | 0.13 | | | | (0.01) | | | 0.24 | |
| | $ | 1.19 | | | $ | 0.92 | | | $ | 2.10 | | | $ | 1.74 | | | | $ | 1.41 | | | $ | 1.19 | | | | $ | 2.69 | | | $ | 2.10 | |
| Shares and share equivalents used to calculate earnings per share: | Shares and share equivalents used to calculate earnings per share: | | | Shares and share equivalents used to calculate earnings per share: | | | |
Basic | Basic | 53.2 | | | 52.5 | | | 53.1 | | | 52.7 | | | Basic | 51.0 | | | 53.2 | | | | 51.3 | | | 53.1 | |
Diluted | Diluted | 53.9 | | | 53.0 | | | 53.8 | | | 53.1 | | | Diluted | 51.6 | | | 53.9 | | | | 52.0 | | | 53.8 | |
| Reconciliation of net income to comprehensive income: | Reconciliation of net income to comprehensive income: | | | Reconciliation of net income to comprehensive income: | | | |
Net income | Net income | $ | 64.2 | | | $ | 48.8 | | | $ | 112.9 | | | $ | 92.6 | | | Net income | $ | 72.5 | | | $ | 64.2 | | | | $ | 139.3 | | | $ | 112.9 | |
Foreign currency translation adjustment | Foreign currency translation adjustment | 1.3 | | | 1.6 | | | (1.9) | | | (0.9) | | | Foreign currency translation adjustment | (1.7) | | | 1.3 | | | | (1.7) | | | (1.9) | |
Comprehensive income | Comprehensive income | $ | 65.5 | | | $ | 50.4 | | | $ | 111.0 | | | $ | 91.7 | | | 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)
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| | Common Stock | | Paid-in Capital | | Retained Earnings | | Other | | Total |
| | Shares | | Par Value | | | | |
Three Months Ended June 30, 2021 | | | | | | | | | | | | |
Balance at March 31, 2021 | | 53.2 | | | $ | 0.5 | | | $ | 674.5 | | | $ | 975.0 | | | $ | (4.2) | | | $ | 1,645.8 | |
Tax withholding on restricted stock vesting | | 0 | | | — | | | (2.3) | | | — | | | — | | | (2.3) | |
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Stock-based compensation expense | | — | | | — | | | 10.8 | | | — | | | — | | | 10.8 | |
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Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | 1.3 | | | 1.3 | |
Net income | | — | | | — | | | — | | | 64.2 | | | — | | | 64.2 | |
Balance at June 30, 2021 | | 53.2 | | | $ | 0.5 | | | $ | 683.0 | | | $ | 1,039.2 | | | $ | (2.9) | | | $ | 1,719.8 | |
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Three Months Ended June 30, 2020 | | | | | | | | | | | | |
Balance at March 31, 2020 | | 52.4 | | | $ | 0.5 | | | $ | 638.7 | | | $ | 769.8 | | | $ | (9.5) | | | $ | 1,399.5 | |
Tax withholding on restricted stock vesting | | 0 | | | — | | | (1.0) | | | — | | | — | | | (1.0) | |
Issuances under equity plans | | 0.1 | | | — | | | 0 | | | — | | | — | | | 0 | |
Stock-based compensation expense | | — | | | — | | | 8.2 | | | — | | | — | | | 8.2 | |
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Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | 1.6 | | | 1.6 | |
Net income | | — | | | — | | | — | | | 48.8 | | | — | | | 48.8 | |
Balance at June 30, 2020 | | 52.5 | | | $ | 0.5 | | | $ | 645.9 | | | $ | 818.6 | | | $ | (7.9) | | | $ | 1,457.1 | |
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| | | Common Stock | | Paid-in Capital | | Retained Earnings | | Other | | Total | | Common Stock | | Paid-in Capital | | Retained Earnings | | Other | | Total |
| | Shares | | Par Value | | | Shares | | Par Value | |
Six Months Ended June 30, 2021 | | | | | | | | | | | | | |
Balance at December 31, 2020 | | 52.9 | | | $ | 0.5 | | | $ | 661.3 | | | $ | 926.3 | | | $ | (1.0) | | | $ | 1,587.1 | | |
Tax withholding on restricted stock vesting | | 0 | | | — | | | (7.1) | | | — | | | — | | | (7.1) | | |
Issuances under equity plans | | 0.3 | | | — | | | 7.7 | | | — | | | — | | | 7.7 | | |
Three Months Ended June 30, 2022 | | Three Months Ended June 30, 2022 | | | | | | | | | | | | |
Balance at March 31, 2022 | | Balance at March 31, 2022 | | 51.3 | | | $ | 0.5 | | | $ | 696.0 | | | $ | 1,173.0 | | | $ | (0.3) | | | $ | 1,869.2 | |
Stock-based compensation expense | Stock-based compensation expense | | — | | | — | | | 21.1 | | | — | | | — | | | 21.1 | | Stock-based compensation expense | | — | | | — | | | 11.2 | | | — | | | — | | | 11.2 | |
| Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | (1.9) | | | (1.9) | | |
Tax withholding on restricted stock vesting | | Tax withholding on restricted stock vesting | | — | | | — | | | (2.5) | | | — | | | — | | | (2.5) | |
Stock repurchases and retirement of shares | | Stock repurchases and retirement of shares | | (0.9) | | | — | | | (12.6) | | | (80.0) | | | — | | | (92.6) | |
Other | | Other | | — | | | — | | | — | | | — | | | (1.7) | | | (1.7) | |
Net income | | Net income | | — | | | — | | | — | | | 72.5 | | | — | | | 72.5 | |
Balance at June 30, 2022 | | 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 | | Three Months Ended June 30, 2021 | |
Balance at March 31, 2021 | | Balance at March 31, 2021 | | 53.2 | | | $ | 0.5 | | | $ | 674.5 | | | $ | 975.0 | | | $ | (4.2) | | | $ | 1,645.8 | |
Stock-based compensation expense | | Stock-based compensation expense | | — | | | — | | | 10.8 | | | — | | | — | | | 10.8 | |
| Tax withholding on restricted stock vesting | | Tax withholding on restricted stock vesting | | — | | | — | | | (2.3) | | | — | | | — | | | (2.3) | |
| Other | | Other | | — | | | — | | | — | | | — | | | 1.3 | | | 1.3 | |
Net income | Net income | | — | | | — | | | — | | | 112.9 | | | — | | | 112.9 | | Net income | | — | | | — | | | — | | | 64.2 | | | — | | | 64.2 | |
Balance at June 30, 2021 | Balance at June 30, 2021 | | 53.2 | | | $ | 0.5 | | | $ | 683.0 | | | $ | 1,039.2 | | | $ | (2.9) | | | $ | 1,719.8 | | Balance at June 30, 2021 | | 53.2 | | | $ | 0.5 | | | $ | 683.0 | | | $ | 1,039.2 | | | $ | (2.9) | | | $ | 1,719.8 | |
| Six Months Ended June 30, 2020 | | |
Balance at December 31, 2019 | | 52.9 | | | $ | 0.5 | | | $ | 638.0 | | | $ | 744.7 | | | $ | (7.0) | | | $ | 1,376.2 | | |
Tax withholding on restricted stock vesting | | 0 | | | — | | | (5.9) | | | — | | | — | | | (5.9) | | |
Issuances under equity plans | | 0.4 | | | — | | | 5.9 | | | — | | | — | | | 5.9 | | |
Stock-based compensation expense | | — | | | — | | | 17.1 | | | — | | | — | | | 17.1 | | |
Stock repurchase and retirement of shares | | (0.8) | | | — | | | (9.2) | | | (18.7) | | | — | | | (27.9) | | |
Foreign currency translation adjustments | | — | | | — | | | — | | | — | | | (0.9) | | | (0.9) | | |
Net income | | — | | | — | | | — | | | 92.6 | | | — | | | 92.6 | | |
Balance at June 30, 2020 | | 52.5 | | | $ | 0.5 | | | $ | 645.9 | | | $ | 818.6 | | | $ | (7.9) | | | $ | 1,457.1 | | |
| | | Common Stock | | Paid-in Capital | | Retained Earnings | | Other | | Total |
| | | Shares | | Par Value | | Paid-in Capital | |
Six Months Ended June 30, 2022 | | Six Months Ended June 30, 2022 | | | | | | | | | | |
Balance at December 31, 2021 | | Balance at December 31, 2021 | | 51.8 | | | $ | 0.5 | | | $ | 690.8 | | | $ | 1,174.4 | | | $ | (0.3) | | | $ | 1,865.4 | |
Stock-based compensation expense | | Stock-based compensation expense | | — | | | — | | | 24.0 | | | — | | | — | | | 24.0 | |
Issuances under equity plans | | Issuances under equity plans | | 0.2 | | | — | | | 10.4 | | | — | | | — | | | 10.4 | |
Tax withholding on restricted stock vesting | | Tax withholding on restricted stock vesting | | — | | | — | | | (11.3) | | | — | | | — | | | (11.3) | |
Stock repurchase and retirement of shares | | Stock repurchase and retirement of shares | | (1.6) | | | — | | | (21.8) | | | (148.2) | | | — | | | (170.0) | |
Other | | Other | | — | | | — | | | — | | | — | | | (1.7) | | | (1.7) | |
Net income | | Net income | | — | | | — | | | — | | | 139.3 | | | — | | | 139.3 | |
Balance at June 30, 2022 | | Balance at June 30, 2022 | | 50.4 | | | $ | 0.5 | | | $ | 692.1 | | | $ | 1,165.5 | | | $ | (2.0) | | | $ | 1,856.1 | |
| Six Months Ended June 30, 2021 | | Six Months Ended June 30, 2021 | |
Balance at December 31, 2020 | | Balance at December 31, 2020 | | 52.9 | | | $ | 0.5 | | | $ | 661.3 | | | $ | 926.3 | | | $ | (1.0) | | | $ | 1,587.1 | |
Stock-based compensation expense | | Stock-based compensation expense | | — | | | — | | | 21.1 | | | — | | | — | | | 21.1 | |
Issuances under equity plans | | Issuances under equity plans | | 0.3 | | | — | | | 7.7 | | | — | | | — | | | 7.7 | |
Tax withholding on restricted stock vesting | | Tax withholding on restricted stock vesting | | — | | | — | | | (7.1) | | | — | | | — | | | (7.1) | |
| Other | | Other | | — | | | — | | | — | | | — | | | (1.9) | | | (1.9) | |
Net income | | Net income | | — | | | — | | | — | | | 112.9 | | | — | | | 112.9 | |
Balance at June 30, 2021 | | Balance at June 30, 2021 | | 53.2 | | | $ | 0.5 | | | $ | 683.0 | | | $ | 1,039.2 | | | $ | (2.9) | | | $ | 1,719.8 | |
See notes to condensed consolidated financial statements.
ASGN INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(in millions)
| | | | | | | | | | | Six Months Ended |
| | Six Months Ended June 30, | | June 30, |
| | 2021 | | 2020 | | 2022 | | 2021 |
Cash Flows from Operating Activities | Cash Flows from Operating Activities | | | | Cash Flows from Operating Activities | | | |
Net income | Net income | $ | 112.9 | | | $ | 92.6 | | Net income | $ | 139.3 | | | $ | 112.9 | |
Adjustments to reconcile net income to net cash provided by operating activities: | Adjustments to reconcile net income to net cash provided by operating activities: | | Adjustments to reconcile net income to net cash provided by operating activities: | |
| Depreciation and amortization | Depreciation and amortization | 43.4 | | | 43.0 | | Depreciation and amortization | 39.8 | | | 43.4 | |
Stock-based compensation | Stock-based compensation | 21.1 | | | 16.9 | | Stock-based compensation | 24.0 | | | 21.1 | |
| Other | Other | 2.8 | | | 3.5 | | Other | 5.1 | | | 2.8 | |
Changes in operating assets and liabilities, net of effects of acquisitions: | | |
Changes in operating assets and liabilities, net of effects of acquisitions and divestiture: | | Changes in operating assets and liabilities, net of effects of acquisitions and divestiture: | |
Accounts receivable | Accounts receivable | (36.0) | | | 40.5 | | Accounts receivable | (136.7) | | | (36.0) | |
Prepaid expenses and income taxes | Prepaid expenses and income taxes | 6.8 | | | 13.5 | | Prepaid expenses and income taxes | 23.7 | | | 6.8 | |
Accounts payable | Accounts payable | (5.8) | | | (0.2) | | Accounts payable | 12.1 | | | (5.8) | |
Accrued payroll and contract professional pay | Accrued payroll and contract professional pay | 50.5 | | | (0.1) | | Accrued payroll and contract professional pay | 31.9 | | | 50.5 | |
Income taxes payable | Income taxes payable | 17.3 | | | 16.7 | | Income taxes payable | 8.0 | | | 17.3 | |
Other | Other | (8.3) | | | 23.8 | | Other | (2.8) | | | (8.3) | |
Net cash provided by operating activities | Net cash provided by operating activities | 204.7 | | | 250.2 | | Net cash provided by operating activities | 144.4 | | | 204.7 | |
Cash Flows from Investing Activities | Cash Flows from Investing Activities | | Cash Flows from Investing Activities | |
Cash paid for property and equipment | Cash paid for property and equipment | (17.6) | | | (22.6) | | Cash paid for property and equipment | (18.4) | | | (17.6) | |
Cash paid for acquisitions, net of cash acquired | Cash paid for acquisitions, net of cash acquired | (85.8) | | | (85.5) | | Cash paid for acquisitions, net of cash acquired | — | | | (85.8) | |
Cash received from sale of the Oxford business | | Cash received from sale of the Oxford business | 9.8 | | | — | |
Other | Other | 0 | | | (0.3) | | Other | 2.5 | | | — | |
Net cash used in investing activities | Net cash used in investing activities | (103.4) | | | (108.4) | | Net cash used in investing activities | (6.1) | | | (103.4) | |
Cash Flows from Financing Activities | Cash Flows from Financing Activities | | Cash Flows from Financing Activities | |
Proceeds from long-term debt | 0 | | | 65.5 | | |
Principal payments of long-term debt | 0 | | | (65.5) | | |
| | Proceeds from option exercises and employee stock purchase plan | | Proceeds from option exercises and employee stock purchase plan | 10.4 | | | 7.7 | |
Repurchases of common stock | | Repurchases of common stock | (168.1) | | | — | |
Payment of employment taxes related to release of restricted stock awards | | Payment of employment taxes related to release of restricted stock awards | (11.3) | | | (7.1) | |
Payment of contingent consideration | | Payment of contingent consideration | (8.1) | | | — | |
Debt issuance and amendment costs | Debt issuance and amendment costs | (0.5) | | | (1.3) | | Debt issuance and amendment costs | — | | | (0.5) | |
Proceeds from option exercises and employee stock purchase plan | 7.7 | | | 5.9 | | |
Payment of employment taxes related to release of restricted stock awards | (7.1) | | | (5.9) | | |
Repurchase of common stock | 0 | | | (27.9) | | |
Net cash provided by (used in) financing activities | Net cash provided by (used in) financing activities | 0.1 | | | (29.2) | | Net cash provided by (used in) financing activities | (177.1) | | | 0.1 | |
Effect of exchange rate changes on cash and cash equivalents | Effect of exchange rate changes on cash and cash equivalents | (0.4) | | | 0.1 | | Effect of exchange rate changes on cash and cash equivalents | (0.2) | | | (0.4) | |
Net Increase in Cash and Cash Equivalents | 101.0 | | | 112.7 | | |
Net increase (decrease) in cash and cash equivalents | | Net increase (decrease) in cash and cash equivalents | (39.0) | | | 101.0 | |
| Cash and cash equivalents at beginning of year | | Cash and cash equivalents at beginning of year | 529.6 | | | 274.4 | |
Cash and cash equivalents at end of period | | Cash and cash equivalents at end of period | $ | 490.6 | | | $ | 375.4 | |
| Cash and Cash Equivalents at Beginning of Year | 274.4 | | | 95.2 | | |
Cash and Cash Equivalents at End of Period | $ | 375.4 | | | $ | 207.9 | | |
| Supplemental Disclosure of Cash Flow Information | Supplemental Disclosure of Cash Flow Information | | Supplemental Disclosure of Cash Flow Information | |
Cash paid for — | Cash paid for — | | Cash paid for — | |
Income taxes | Income taxes | $ | 17.7 | | | $ | 5.3 | | Income taxes | $ | 17.7 | | | $ | 17.7 | |
Interest | Interest | $ | 17.6 | | | $ | 19.7 | | Interest | $ | 18.4 | | | $ | 17.6 | |
Operating leases | Operating leases | $ | 17.2 | | | $ | 16.5 | | Operating leases | $ | 13.6 | | | $ | 17.2 | |
Noncash transactions — | Noncash transactions — | | Noncash transactions — | |
| | Operating lease right of use assets obtained in exchange for operating lease liabilities | Operating lease right of use assets obtained in exchange for operating lease liabilities | $ | 1.5 | | | $ | 10.4 | | Operating lease right of use assets obtained in exchange for operating lease liabilities | $ | 9.8 | | | $ | 1.5 | |
|
See notes to condensed consolidated financial statements.
ASGN INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. General
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, 20202021 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, 20202021 ("20202021 10-K").
Retrospective reclassifications have been made to prior period financial statements and disclosures to present the Oxford Global Resources business unit ("Oxford business") as discontinued operations (see Note 2. Assets Held for Sale and Discontinued Operations). Unless otherwise noted, amounts and disclosures included herein relate to our continuing operations. Certain reclassifications were also made to prior year amounts to conform with current year presentation.
2. Assets Held for Sale and Discontinued Operations
On June 30, 2021, ASGN entered into a definitive agreement to sell its Oxford business to an affiliate of H.I.G. Capital for $525.0 million in cash (approximately $415.0 million in estimated net proceeds after income taxes). The sale is expected to close in August 2021. The sale of the Oxford business is a strategic shift that provides for the redeployment of capital on acquisitions of businesses that enhance ASGN's consulting capabilities and services in the commercial and federal government sectors.
As a result of the decision to divest the Oxford business, the financial results of that business are reported as discontinued operations in the accompanying statements of operations, and its assets and liabilities are reflected as amounts held for sale in the accompanying balance sheets. The Company's reporting segments have also been changed for the effects of the planned divestiture, as described in Note 9. Segment Reporting.
The following table presents the major classes of assets and liabilities of the Oxford business that are classified as held for sale in the accompanying balance sheets (in millions).
| | | | | | | | | | | |
| June 30, 2021 | | December 31, 2020 |
Accounts receivable, net | $ | 96.2 | | | $ | 75.9 | |
Prepaid expenses and income taxes | 4.0 | | | 0.8 | |
Other current assets | 1.0 | | | 0.7 | |
| | | |
| | | |
Property and equipment, net | 13.5 | | | 14.5 | |
Operating lease right-of-use assets | 9.5 | | | 11.9 | |
Identifiable intangible assets, net | 17.7 | | | 18.0 | |
Goodwill | 197.0 | | | 197.7 | |
Other non-current assets | 3.0 | | | 2.4 | |
Total assets held for sale | $ | 341.9 | | | $ | 321.9 | |
| | | |
Accounts payable | $ | 1.8 | | | $ | 1.5 | |
Accrued payroll and contract professional pay | 39.3 | | | 27.5 | |
Operating lease liabilities | 4.2 | | | 5.1 | |
Other current liabilities | 7.3 | | | 5.6 | |
| | | |
| | | |
Operating lease liabilities, long-term | 5.7 | | | 7.5 | |
Other long-term liabilities | 3.8 | | | 4.0 | |
Total liabilities held for sale | $ | 62.1 | | | $ | 51.2 | |
The following table summarizes the results of operations of the Oxford business that are being reported as discontinued operations (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended | | |
June 30, | | June 30, | |
| 2021 | | 2020 | | 2021 | | 2020 | | | | |
Revenues | $ | 134.1 | | | $ | 104.9 | | | $ | 252.8 | | | $ | 230.0 | | | | | |
Costs of services | 92.6 | | | 71.6 | | | 174.0 | | | 158.4 | | | | | |
Gross profit | 41.5 | | | 33.3 | | | 78.8 | | | 71.6 | | | | | |
Selling, general and administrative expenses | 32.9 | | | 26.2 | | | 62.5 | | | 58.1 | | | | | |
Amortization of intangible assets | 0.1 | | | 0.2 | | | 0.3 | | | 0.3 | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Income before income taxes | 8.5 | | | 6.9 | | | 16.0 | | | 13.2 | | | | | |
Provision for income taxes | 1.6 | | | 1.6 | | | 3.2 | | | 3.2 | | | | | |
Income from discontinued operations, net of income taxes | $ | 6.9 | | | $ | 5.3 | | | $ | 12.8 | | | $ | 10.0 | | | | | |
Select cash flow information related to the Oxford business follows (in millions):
| | | | | | | | | | | |
| Six Months Ended |
June 30, |
| 2021 | | 2020 |
Net cash provided by operating activities | $ | 11.5 | | | $ | 28.4 | |
Net cash used in investing activities | (3.2) | | | (12.4) | |
| | | |
3. Acquisitions
Since the beginning of 2020,In 2021, the Company acquired fivethree consulting services businesses for $272.0$221.3 million in aggregate purchase consideration. These acquisitions increased the Company's investment in IT consulting in its Federal Government and Commercial Segments. Nonecash. As of these acquisitions were material individually or in the aggregate. At June 30, 2021,2022, the Company had not finalized the determination of fair values allocated to the assets and liabilities for certain of these acquisitions.acquisitions have been finalized.
4.3. Goodwill and Identifiable Intangible Assets
The following table summarizes the activity related to the carrying amount of goodwill by reportable segment since December 31, 20192020 (in millions). For
| | | | | | | | | | | | | | | | | | | |
| Commercial | | Federal Government | | | | Total |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Balance as of December 31, 2020 | $ | 778.6 | | | $ | 642.1 | | | | | $ | 1,420.7 | |
2021 acquisitions | 51.1 | | | 94.8 | | | | | 145.9 | |
Purchase price adjustments | — | | | 3.3 | | | | | 3.3 | |
Translation adjustment | (0.4) | | | — | | | | | (0.4) | |
Balance as of December 31, 2021 | 829.3 | | | 740.2 | | | | | 1,569.5 | |
| | | | | | | |
Purchase price adjustments | 0.4 | | | (8.5) | | | | | (8.1) | |
Translation adjustment | (1.3) | | | — | | | | | (1.3) | |
| | | | | | | |
| | | | | | | |
Balance as of June 30, 2022 | $ | 828.4 | | | $ | 731.7 | | | | | $ | 1,560.1 | |
Approximately $127.2 million of the businesses acquired since 2019, goodwill for the 2021 acquisitions is deductible for income tax purposes was approximately $124.3 million. See Note 9. Segment Reporting for more information on the change in our reportable segments.
| | | | | | | | | | | | | | | | | | | |
| Commercial | | Federal Government | | | | Total |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Balance as of December 31, 2019 | $ | 738.4 | | | $ | 552.9 | | | | | $ | 1,291.3 | |
2020 acquisitions | 40.3 | | | 89.2 | | | | | 129.5 | |
Translation adjustment | (0.1) | | | — | | | | | (0.1) | |
Balance as of December 31, 2020 | 778.6 | | | 642.1 | | | | | 1,420.7 | |
2021 acquisitions | 51.3 | | | — | | | | | 51.3 | |
Purchase price adjustments | — | | | 3.5 | | | | | 3.5 | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Balance as of June 30, 2021 | $ | 829.9 | | | $ | 645.6 | | | | | $ | 1,475.5 | |
___________________
Note: For the 2021 and 2020 acquisitions, approximately $47.2 million and $77.1 million of the goodwill
was deductible for income tax purposes, respectively.
Acquired identifiable intangible assets consisted of the following (in millions):
| | | June 30, 2021 | | December 31, 2020 | | | June 30, 2022 | | December 31, 2021 | |
| | Estimated Useful Life in Years | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | | Estimated Useful Life in Years | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | | Gross Carrying Amount | | Accumulated Amortization | | Net Carrying Amount | |
Customer and contractual relationships | Customer and contractual relationships | 7.3 - 12.8 | | $ | 457.4 | | | $ | 232.6 | | | $ | 224.8 | | | $ | 428.0 | | | $ | 211.3 | | | $ | 216.7 | | | Customer and contractual relationships | 7 - 13 | | $ | 493.6 | | | $ | 283.8 | | | $ | 209.8 | | | $ | 493.9 | | | $ | 260.2 | | | $ | 233.7 | | |
Contractor relationships | Contractor relationships | 4.0 | | 45.5 | | | 45.4 | | | 0.1 | | | 45.5 | | | 45.3 | | | 0.2 | | | Contractor relationships | 4 | | 45.5 | | | 45.5 | | | — | | | 45.5 | | | 45.5 | | | — | | |
Contract Backlog | Contract Backlog | 1.0 - 2.8 | | 29.3 | | | 28.9 | | | 0.4 | | | 29.3 | | | 28.5 | | | 0.8 | | | Contract Backlog | 1 - 3 | | 34.8 | | | 32.9 | | | 1.9 | | | 34.8 | | | 31.0 | | | 3.8 | | |
Non-compete agreements | Non-compete agreements | 1.0 - 7.0 | | 27.2 | | | 19.6 | | | 7.6 | | | 27.0 | | | 17.4 | | | 9.6 | | | Non-compete agreements | 1 - 7 | | 29.4 | | | 23.2 | | | 6.2 | | | 29.4 | | | 21.6 | | | 7.8 | | |
| | | 559.4 | | | 326.5 | | | 232.9 | | | 529.8 | | | 302.5 | | | 227.3 | | | | 603.3 | | | 385.4 | | | 217.9 | | | 603.6 | | | 358.3 | | | 245.3 | | |
Not subject to amortization: | Not subject to amortization: | | | Not subject to amortization: | | |
Trademarks | Trademarks | | 242.6 | | | — | | | 242.6 | | | 242.6 | | | — | | | 242.6 | | | Trademarks | | 242.6 | | | — | | | 242.6 | | | 242.6 | | | — | | | 242.6 | | |
Total | Total | | $ | 802.0 | | | $ | 326.5 | | | $ | 475.5 | | | $ | 772.4 | | | $ | 302.5 | | | $ | 469.9 | | | Total | | $ | 845.9 | | | $ | 385.4 | | | $ | 460.5 | | | $ | 846.2 | | | $ | 358.3 | | | $ | 487.9 | | |
Estimated future amortization expense follows (in millions):
| Remainder of 2021 | $ | 27.4 | | |
2022 | 43.9 | | |
Remainder of 2022 | | Remainder of 2022 | $ | 27.0 | |
2023 | 2023 | 37.8 | | 2023 | 44.5 | |
2024 | 2024 | 29.7 | | 2024 | 35.2 | |
2025 | 2025 | 24.3 | | 2025 | 28.7 | |
2026 | | 2026 | 25.1 | |
Thereafter | Thereafter | 69.8 | | Thereafter | 57.4 | |
| | $ | 232.9 | | | $ | 217.9 | |
4. Discontinued Operations
On August 17, 2021, the Company sold its Oxford business to an affiliate of H.I.G. Capital for $525.0 million. The gain on the sale was $216.9 million ($168.8 million net of income taxes). The financial results of that business are reported as discontinued operations in the accompanying condensed consolidated statements of operations.
There were no significant operating results from discontinued operations subsequent to December 31, 2021.The following table summarizes the results of operations of the Oxford business (in millions):
| | | | | | | | | | | | | | | | | | | |
| Three Months Ended | | Six Months Ended | | | | |
| | | | | |
| June 30, 2021 | | June 30, 2021 | | | | | | | | |
Revenues | $ | 134.1 | | | $ | 252.8 | | | | | | | | | |
Costs of services | 92.6 | | | 174.0 | | | | | | | | | |
Gross profit | 41.5 | | | 78.8 | | | | | | | | | |
Selling, general and administrative expenses | 32.9 | | | 62.5 | | | | | | | | | |
Amortization of intangible assets | 0.1 | | | 0.3 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Income before income taxes | 8.5 | | | 16.0 | | | | | | | | | |
Provision for income taxes | 1.6 | | | 3.2 | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
Income from discontinued operations, net of income taxes | $ | 6.9 | | | $ | 12.8 | | | | | | | | | |
During the six months ended June 30, 2022, the Company received $9.8 million related to the finalization of the purchase price, which mainly related to the settlement of net working capital. The following table provides select cash flow information related to the Oxford business for the six months ended June 30, 2021 (in millions):
| | | | | | | |
| | | |
| | |
| | | |
Net cash provided by operating activities | | | $ | 11.5 | |
| | | |
| | | |
| | | |
Net cash used in investing activities | | | $ | (3.2) | |
| | | |
5. Long-Term Debt
Long-term debt consisted of the following (in millions):
| | | June 30, 2021 | | December 31, 2020 | | | June 30, 2022 | | December 31, 2021 | |
Senior Secured Credit Facility: | Senior Secured Credit Facility: | | | | | Senior Secured Credit Facility: | | | | |
Borrowings under $250 million revolving credit facility, due 2024 | Borrowings under $250 million revolving credit facility, due 2024 | $ | — | | | $ | — | | | Borrowings under $250 million revolving credit facility, due 2024 | $ | — | | | $ | — | | |
Term B loan facility, due 2025 | Term B loan facility, due 2025 | 490.8 | | | 490.8 | | | Term B loan facility, due 2025 | 490.8 | | | 490.8 | | |
| Unsecured Senior Notes, due 2028 | Unsecured Senior Notes, due 2028 | 550.0 | | | 550.0 | | | Unsecured Senior Notes, due 2028 | 550.0 | | | 550.0 | | |
| | 1,040.8 | | | 1,040.8 | | | | 1,040.8 | | | 1,040.8 | | |
Unamortized deferred loan costs | Unamortized deferred loan costs | (7.1) | | | (7.4) | | | Unamortized deferred loan costs | (6.3) | | | (6.9) | | |
| | $ | 1,033.7 | | | $ | 1,033.4 | | | | $ | 1,034.5 | | | $ | 1,033.9 | | |
Senior Secured Credit Facility — The senior secured credit facility ("Credit Facility") consists of a term B loan and a $250.0 million revolving credit facility ("Revolver").facility. Borrowings under the term B loan bear interest at LIBOR plus 1.75 percent, or the bank’s base rate plus 0.75 percent. Borrowings under the Revolverrevolver bear interest at LIBOR plus 1.25 to 2.25 percent, or the bank’s base rate plus 0.25 to 1.25 percent, depending on leverage levels. A commitment fee of 0.20 to 0.35 percent is payable on the undrawn portion of the Revolver.revolver. There are no required minimum payments on the facility. The Revolverrevolver is limited to a maximum ratio of senior secured debt to trailing 12-months of lender-defined consolidated EBITDA of 4.003.75 to 1.00, which was 1.170.91 to 1.00 at June 30, 2021. There are no required minimum payments on the Credit Facility.2022. The Credit Facilityfacility is secured by substantially all of the Company's assets and includes various restrictive covenants. At June 30, 2021,2022, the Company was in compliance with its debt covenants. As a result of the planned divestiture of the Oxford business,In July 2021, the Company amended its Credit Facilityfacility to, among other things, permit the sale of its Oxford business and allow the salenet cash proceeds (approximately $0.4 billion) to be used for amongfuture acquisitions and other things, future acquisitions.permitted investments. With the acquisition of GlideFast Holdings, LLC and affiliated entities ("GlideFast") on July 6, 2022 (see Note 11. Subsequent Events), and other investments of the net cash proceeds, prepayments, if any, are expected to be insignificant.
Unsecured Senior Notes — The Company has $550.0 million of unsecured senior notes, ("Senior Notes"), which bear interest at 4.625 percent. Interest ispercent payable semiannually in arrears on May 15 and November 15. The Senior NotesThese notes are unsecured obligations and are subordinate to the Company's Credit Facility to the extent of the collateral securing suchsenior secured credit facility. The Senior NotesThese notes also contain certain customary limitations including, among other terms and conditions, the Company's ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets and make certain distributions. Similar to the recently amended terms of the Credit Facility, the Senior Notes permit the planned divestiture of the Oxford business and the sale proceeds to be used for future acquisitions.
6.Commitments and Contingencies
The Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of business. The Company does not believe that the disposition of matters that are pending or asserted will have a material effect on its financial statements.
7. Income 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.
8. Earnings per Share
The following table shows the calculation of basic and diluted earnings per share (in millions, except per share data):.
| | | Three Months Ended | | Six Months Ended | | | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | | | June 30, | | June 30, | |
| | 2021 | | 2020 | | 2021 | | 2020 | | | 2022 | | 2021 | | 2022 | | 2021 | |
Income from continuing operations | Income from continuing operations | $ | 57.3 | | | $ | 43.5 | | | $ | 100.1 | | | $ | 82.6 | | | Income from continuing operations | $ | 72.6 | | | $ | 57.3 | | | $ | 140.2 | | | $ | 100.1 | | |
Income from discontinued operations, net of income taxes | 6.9 | | | 5.3 | | | 12.8 | | | 10.0 | | | |
Income (loss) from discontinued operations, net of income taxes | | Income (loss) from discontinued operations, net of income taxes | (0.1) | | | 6.9 | | | (0.9) | | | 12.8 | | |
Net income | Net income | $ | 64.2 | | | $ | 48.8 | | | $ | 112.9 | | | $ | 92.6 | | | Net income | $ | 72.5 | | | $ | 64.2 | | | $ | 139.3 | | | $ | 112.9 | | |
| Weighted-average number of common shares outstanding - basic | 53.2 | | | 52.5 | | | 53.1 | | | 52.7 | | | |
Weighted-average number of common shares outstanding — basic | | Weighted-average number of common shares outstanding — basic | 51.0 | | | 53.2 | | | 51.3 | | | 53.1 | | |
Dilutive effect of common share equivalents | Dilutive effect of common share equivalents | 0.7 | | | 0.5 | | | 0.7 | | | 0.4 | | | Dilutive effect of common share equivalents | 0.6 | | | 0.7 | | | 0.7 | | | 0.7 | | |
Weighted-average number of common shares and share equivalents outstanding - diluted | 53.9 | | | 53.0 | | | 53.8 | | | 53.1 | | | |
Weighted-average number of common shares and share equivalents outstanding — diluted | | Weighted-average number of common shares and share equivalents outstanding — diluted | 51.6 | | | 53.9 | | | 52.0 | | | 53.8 | | |
| Basic earnings per share: | Basic earnings per share: | | | Basic earnings per share: | | |
Continuing operations | Continuing operations | $ | 1.08 | | | $ | 0.83 | | | $ | 1.89 | | | $ | 1.57 | | | Continuing operations | $ | 1.42 | | | $ | 1.08 | | | $ | 2.73 | | | $ | 1.89 | | |
Discontinued operations | Discontinued operations | 0.13 | | | 0.10 | | | 0.24 | | | 0.19 | | | Discontinued operations | — | | | 0.13 | | | (0.01) | | | 0.24 | | |
| | $ | 1.21 | | | $ | 0.93 | | | $ | 2.13 | | | $ | 1.76 | | | | $ | 1.42 | | | $ | 1.21 | | | $ | 2.72 | | | $ | 2.13 | | |
Diluted earnings per share: | Diluted earnings per share: | | | | | | | | | Diluted earnings per share: | | | | | | | | |
Continuing operations | Continuing operations | $ | 1.06 | | | $ | 0.82 | | | $ | 1.86 | | | $ | 1.56 | | | Continuing operations | $ | 1.41 | | | $ | 1.06 | | | $ | 2.70 | | | $ | 1.86 | | |
Discontinued operations | Discontinued operations | 0.13 | | | 0.10 | | | 0.24 | | | 0.18 | | | Discontinued operations | — | | | 0.13 | | | (0.01) | | | 0.24 | | |
| | $ | 1.19 | | | $ | 0.92 | | | $ | 2.10 | | | $ | 1.74 | | | | $ | 1.41 | | | $ | 1.19 | | | $ | 2.69 | | | $ | 2.10 | | |
|
9. Segment Reporting
Prior to the decision to divest the Oxford business, the Company had three reportable segments: Apex, Oxford and ECS. As a result of the planned divestiture, the Oxford Segment is no longer a reportable segment, the Apex Segment has been renamed the Commercial Segment and the ECS Segment has been renamed the Federal Government Segment. The Company's CyberCoders division, which was previously part of the Oxford Segment, is now included in the Commercial Segment. All segment information included herein reflect these changes.
ASGN provides information technologyIT services and professional services in the technology, digitalsolutions and creative fieldsdigital marketing services across the commercial and government sectors. ASGN operates through its Commercial and Federal Government segments. Virtually all of the Company's revenues are generated in the United States.
The Commercial Segment provides assignmentIT services and consulting information technology,solutions, and creative digital and creativemarketing services to Fortune 1000 and mid-market clients across the United States, Canada and Canada.Europe. The Federal Government Segment delivers advanced solutions in cloud, cybersecurity, artificial intelligence, machine learning, application and IT modernization, science and engineering to defense, intelligence and federal civilian agencies. Management evaluates the performance of each segment primarily based on revenues, gross profit and operating income which is derived directly from internal financial reporting of the segments used for corporate management purposes, which is presented below by segment (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | |
| | June 30, | | June 30, | | |
| | 2021 | | 2020 | | 2021 | | 2020 | | | | |
Commercial | | | | | | | | | | | | |
Revenues | | $ | 712.5 | | | $ | 592.2 | | | $ | 1,361.7 | | | $ | 1,244.9 | | | | | |
Gross profit | | 228.3 | | | 183.7 | | | 426.9 | | | 389.2 | | | | | |
Operating income | | 89.6 | | | 65.3 | | | 160.1 | | | 134.9 | | | | | |
Depreciation | | 3.4 | | | 3.6 | | | 7.0 | | | 7.2 | | | | | |
Amortization | | 5.6 | | | 5.4 | | | 11.3 | | | 10.8 | | | | | |
Federal Government | | | | | | | | | | | | |
Revenues | | $ | 262.4 | | | $ | 239.7 | | | $ | 520.2 | | | $ | 452.4 | | | | | |
Gross profit | | 48.0 | | | 43.8 | | | 93.1 | | | 80.9 | | | | | |
Operating income | | 18.7 | | | 16.3 | | | 33.4 | | | 27.5 | | | | | |
Depreciation | | 2.2 | | | 1.9 | | | 4.6 | | | 4.1 | | | | | |
Amortization | | 6.4 | | | 7.0 | | | 12.7 | | | 13.6 | | | | | |
Consolidated | | | | | | | | | | | | |
Revenues | | $ | 974.9 | | | $ | 831.9 | | | $ | 1,881.9 | | | $ | 1,697.3 | | | | | |
Gross profit | | 276.3 | | | 227.5 | | | 520.0 | | | 470.1 | | | | | |
Operating income(1) | | 87.9 | | | 69.1 | | | 155.3 | | | 133.8 | | | | | |
Depreciation(2) | | 7.1 | | | 6.5 | | | 14.6 | | | 13.2 | | | | | |
Amortization | | 12.0 | | | 12.4 | | | 24.0 | | | 24.4 | | | | | |
___________________
(1)Consolidated operating income includes corporate operating expenses, which are not allocated to the segments. These expenses include, among other
things, stock-based compensation expense, compensation for corporate employees, acquisition, integration and strategic planning expenses and public
company expenses.
(2)Consolidated depreciation includes depreciation expense for corporate assets. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended | | Six Months Ended | | |
| | June 30, | | June 30, | | |
| | 2022 | | 2021 | | 2022 | | 2021 | | | | |
Commercial | | | | | | | | | | | | |
Revenues | | $ | 850.6 | | | $ | 712.5 | | | $ | 1,683.5 | | | $ | 1,361.7 | | | | | |
Gross profit | | 281.7 | | | 228.3 | | | 554.3 | | | 426.9 | | | | | |
Operating income | | 106.0 | | | 89.6 | | | 211.0 | | | 160.1 | | | | | |
Depreciation | | 3.5 | | | 3.4 | | | 7.1 | | | 7.0 | | | | | |
Amortization | | 5.6 | | | 5.6 | | | 11.3 | | | 11.3 | | | | | |
Federal Government | | | | | | | | | | | | |
Revenues | | $ | 291.2 | | | $ | 262.4 | | | $ | 549.3 | | | $ | 520.2 | | | | | |
Gross profit | | 62.3 | | | 48.0 | | | 116.3 | | | 93.1 | | | | | |
Operating income | | 25.7 | | | 18.7 | | | 42.7 | | | 33.4 | | | | | |
Depreciation | | 1.4 | | | 2.2 | | | 2.9 | | | 4.6 | | | | | |
Amortization | | 7.9 | | | 6.4 | | | 16.2 | | | 12.7 | | | | | |
Consolidated | | | | | | | | | | | | |
Revenues | | $ | 1,141.8 | | | $ | 974.9 | | | $ | 2,232.8 | | | $ | 1,881.9 | | | | | |
Gross profit | | 344.0 | | | 276.3 | | | 670.6 | | | 520.0 | | | | | |
Operating income | | 110.1 | | | 87.9 | | | 210.7 | | | 155.3 | | | | | |
Depreciation | | 6.1 | | | 7.1 | | | 12.3 | | | 14.6 | | | | | |
Amortization | | 13.5 | | | 12.0 | | | 27.4 | | | 24.0 | | | | | |
_______ | | | | | | | | | | | | |
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. | | | | |
Virtually all 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. The following table presentsVirtually all of the Company's revenues are recognized over time. Revenues by segment and by type are as follows (in millions):
| | | Three Months Ended | | Six Months Ended | | | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | | | June 30, | | June 30, | |
| | 2021 | | 2020 | | 2021 | | 2020 | | | 2022 | | 2021 | | 2022 | | 2021 | |
Commercial | Commercial | | | | | | | | | | Commercial | | | | | | | | | |
Assignment | Assignment | | $ | 568.1 | | | $ | 506.9 | | | $ | 1,099.8 | | | $ | 1,070.0 | | | Assignment | | $ | 628.4 | | | $ | 568.1 | | | $ | 1,256.6 | | | $ | 1,099.8 | | |
Consulting | Consulting | | 144.4 | | | 85.3 | | | 261.9 | | | 174.9 | | | Consulting | | 222.2 | | | 144.4 | | | 426.9 | | | 261.9 | | |
| | 712.5 | | | 592.2 | | | 1,361.7 | | | 1,244.9 | | | | 850.6 | | | 712.5 | | | 1,683.5 | | | 1,361.7 | | |
Federal Government | Federal Government | | | Federal Government | | |
Firm-fixed-price | Firm-fixed-price | | 62.0 | | | 63.5 | | | 122.6 | | | 120.5 | | | Firm-fixed-price | | 74.3 | | | 62.0 | | | 151.2 | | | 122.6 | | |
Time and materials | Time and materials | | 100.2 | | | 81.4 | | | 190.9 | | | 153.8 | | | Time and materials | | 117.8 | | | 100.2 | | | 224.8 | | | 190.9 | | |
Cost reimbursable | Cost reimbursable | | 100.2 | | | 94.8 | | | 206.7 | | | 178.1 | | | Cost reimbursable | | 99.1 | | | 100.2 | | | 173.3 | | | 206.7 | | |
| | 262.4 | | | 239.7 | | | 520.2 | | | 452.4 | | | | 291.2 | | | 262.4 | | | 549.3 | | | 520.2 | | |
Consolidated | Consolidated | | $ | 974.9 | | | $ | 831.9 | | | $ | 1,881.9 | | | $ | 1,697.3 | | | Consolidated | | $ | 1,141.8 | | | $ | 974.9 | | | $ | 2,232.8 | | | $ | 1,881.9 | | |
The following table presents the Federal Government Segment revenues by customer type are as follows (in millions):
| | | Three Months Ended | | Six Months Ended | | | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | | | June 30, | | June 30, | |
| | 2021 | | 2020 | | 2021 | | 2020 | | | 2022 | | 2021 | | 2022 | | 2021 | |
Department of Defense and Intelligence Agencies | Department of Defense and Intelligence Agencies | | $ | 141.6 | | | $ | 127.1 | | | $ | 284.9 | | | $ | 242.0 | | | Department of Defense and Intelligence Agencies | | $ | 159.3 | | | $ | 141.6 | | | $ | 292.9 | | | $ | 284.9 | | |
Federal Civilian | Federal Civilian | | 98.8 | | | 96.0 | | | 191.4 | | | 180.6 | | | Federal Civilian | | 120.7 | | | 98.8 | | | 237.1 | | | 191.4 | | |
Other | Other | | 22.0 | | | 16.6 | | | 43.9 | | | 29.8 | | | Other | | 11.2 | | | 22.0 | | | 19.3 | | | 43.9 | | |
| | $ | 262.4 | | | $ | 239.7 | | | $ | 520.2 | | | $ | 452.4 | | | | $ | 291.2 | | | $ | 262.4 | | | $ | 549.3 | | | $ | 520.2 | | |
10. Fair Value Measurements
Recurring Fair Value Measurements — The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and accrued payroll and contract professional pay approximate their fair value based on their short-term nature. The carrying amount of long-term debt recorded in the Company’s balance sheet at June 30, 20212022 was $1.0 billion and approximated its fair value (see Note 5. Long-Term Debt), and its fair value was $1.0 billion, which was determined using quoted prices in active markets for identical liabilities (Level 1 inputs).
Certain acquisitions contain provisions requiring the Company to pay contingent consideration in the event the acquired business achieves certain specified earnings results in 2021 or obtains specified contract awards. Contingent consideration liabilities had a fair value of $15.1 million at December 31, 2021. In the six months ended June 30, 2022, $8.1 million of that liability was paid and is reflected in cash flows from financing activities in the accompanying condensed consolidated statement of cash flows and the remaining fair value was reduced to 0 as a measurement period adjustment, with no effect on results of operations. There were no contingent consideration liabilities at June 30, 2022.
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 three and six months ended June 30, 2021 and 2020.2022.
11. Subsequent Events
On July 6, 2022, the Company acquired GlideFast, an Elite ServiceNow provider, for total cash consideration of $350.0 million. The results of operations of GlideFast will be included in the Commercial Segment from the date of acquisition.
On July 27, 2022, the Company's Board of Directors approved a new stock repurchase program under which the Company may repurchase up to $400.0 million of its common stock over the next two years. Under terms of the 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 new program replaces the Company's previous $350.0 million stock repurchase program.
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 matters related to the planned disposition of Oxford Global Resources, LLC, and other factorsthose described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, 20202021 ("20202021 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 technologyIT services and professional services in the technology, digitalsolutions and creative fieldsdigital marketing services across the commercial and government sectors. OurASGN operates through its Commercial businessand Federal Government segments. Virtually all of the Company's revenues are generated in the United States.
The Commercial Segment provides assignmentIT services and consulting information technology,solutions, and creative digital creative marketing services to Fortune 1000 and mid-market clients across the United States, Canada and Canada. OurEurope. The Federal Government businessSegment delivers advanced solutions in cloud, cybersecurity, artificial intelligence, machine learning, application and IT modernization, science and engineering to departmentsdefense, intelligence and agencies in the federal government.
On June 30, 2021 we entered into a definitive agreement to sell our Oxford Global Resources business unit ("Oxford business") to an affiliate of H.I.G. Capital for $525.0 million in cash (approximately $415.0 million in estimated net proceeds after income taxes). The sale is expected to close in the August 2021. The financial results of the Oxford business have been classified as discontinued operations in the statements of operations and its assets and liabilities have been classified as held for sale in the balance sheets included herein. Unless otherwise noted, amounts and disclosures throughout this Management's Discussion and Analysis section relate to our continuing operations.
Prior to the decision to divest the Oxford business, the Company had three reportable segments: Apex, Oxford and ECS. As a result of the planned divestiture, the Oxford Segment is no longer a reportable segment, the Apex Segment has been renamed the Commercial Segment and the ECS Segment has been renamed the Federal Government Segment. The Company's CyberCoders division, which was previously part of the Oxford Segment, is now included in the Commercial Segment. All segment data included herein reflect these changes.civilian agencies.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 20212022 COMPARED WITH THE THREE MONTHS ENDED JUNE 30, 20202021
Revenues
Revenues for the quarter were $974.9 million,$1.1 billion, up 17.217.1 percent fromover the second quarter of 2020 resulting from high growth in our Commercial and Federal Government segments.last year. Revenues for the quarter included approximately $14.7$36.3 million from businesses acquired afterin 2021 accounting for 3.7 percentage points of the second quarter of 2020.year-over-year growth rate. The table below shows our revenues by segmentssegment for the three months ended June 30, 20212022 and 20202021 (in millions):.
| | | | | % of Total | | | | | | % of Total | | |
| | 2021 | | 2020 | | | Change | | | 2021 | | 2020 | | | Change | | | 2022 | | 2021 | | | Change | | | 2022 | | 2021 | | | Change | |
| Commercial | Commercial | | | | | | | | | | | | | | | | | Commercial | | | | | | | | | | | | | | | | |
Assignment | Assignment | | $ | 568.1 | | | $ | 506.9 | | | | 12.1 | % | | | 58.3 | % | | 60.9 | % | | | -2.6 | % | | Assignment | | $ | 628.4 | | | $ | 568.1 | | | | 10.6 | % | | | 55.0 | % | | 58.3 | % | | | -3.3 | % | |
Consulting | Consulting | | 144.4 | | | 85.3 | | | | 69.3 | % | | | 14.8 | % | | 10.3 | % | | | 4.5 | % | | Consulting | | 222.2 | | | 144.4 | | | | 53.9 | % | | | 19.5 | % | | 14.8 | % | | | 4.7 | % | |
| | 712.5 | | | 592.2 | | | | 20.3 | % | | | 73.1 | % | | 71.2 | % | | | 1.9 | % | | | 850.6 | | | 712.5 | | | | 19.4 | % | | | 74.5 | % | | 73.1 | % | | | 1.4 | % | |
Federal Government | Federal Government | | 262.4 | | | 239.7 | | | | 9.5 | % | | | 26.9 | % | | 28.8 | % | | | -1.9 | % | | Federal Government | | 291.2 | | | 262.4 | | | | 11.0 | % | | | 25.5 | % | | 26.9 | % | | | -1.4 | % | |
Consolidated | Consolidated | | $ | 974.9 | | | $ | 831.9 | | | | 17.2 | % | | | 100.0 | % | | 100.0 | % | | | | | Consolidated | | $ | 1,141.8 | | | $ | 974.9 | | | | 17.1 | % | | | 100.0 | % | | 100.0 | % | | | | |
|
Commercial Segment —Revenues from our Commercial Segment (74.5 percent of total revenues) were up 20.319.4 percent year over year, reflecting high growththe second quarter of last year. Assignment revenues totaled $628.4 million (73.9 percent of the segment's revenues), up 10.6 percent year-over-year. Consulting services revenues were $222.2 million (26.1 percent of the segment's revenues), up 53.9 percent year-over-year. Consulting services revenues included approximately $8.8 million revenues from a business acquired in IT2021.
All commercial divisions (IT services and solutions, creative digital marketing and permanent placement) and revenue streams had double-digit growth over the second quarter of last year with the highest growth coming from our commercial consulting, creative digital marketing and permanent placement services. Commercial consulting services revenues, which accounted for 20.3 percent of Commercial revenues, were $144.4 million, up 69.3 percent year over year, reflecting broad-based industry demand and the contribution from acquired businesses. Assignment revenues, which accounted for 79.7 percent of Commercial revenues, were $568.1 million, up 12.1 percent year over year.
From an industry perspective, Commercial revenues fall intoAll five broad industry verticals: (i) financial services, (ii) consumer and industrials, (iii) healthcare, (iv) technology, media and telecom and (v) business and government services. Growthservices, were also up double-digit year-over-year.
Within the Commercial Segment, IT services and solutions revenues, which accounted for 83.1 percent of the segment's revenues in the quarter, was broad based and all five industry verticals experiencedwere up 19.1 percent over the second quarter of last year driven by high growth duringin consulting services and high single-digit growth in assignment revenues. Creative digital marketing and permanent placement revenues, which combined accounted for 16.9 percent of the segment's revenues in the quarter, ranging from 9.9were up 20.6 percent growth in financial services, our largest industry vertical, to 32.5 percent growth in consumer and industrials.over the second quarter of last year.
Federal Government Segment — Revenues from our Federal Government businessSegment (25.5 percent of revenues) were up 9.511.0 percent year overyear-over-year. Revenues for the second quarter included $27.5 million from businesses acquired in the third quarter of last year. Revenues also included $16.0 million from a customer-directed, third-party license purchase under a cost reimbursable contract that had been expected to occur in the second half of the year. The growth was driven bysecond quarter of last year benefited from approximately $11.8 million in low margin revenues under a numberweb services resale program the segment elected not to renew in the third quarter of factors, including increased volume under certain existing programs, new contract awards and the contribution from acquired businesses.last year.
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the three months ended June 30, 20212022 and 20202021 (in millions):.
| | | Gross Profit | | | | Gross Margin | | | | Gross Profit | | | | Gross Margin | | |
| | 2021 | | 2020 | | | Change | | | 2021 | | 2020 | | | Change | | | 2022 | | 2021 | | | Change | | | 2022 | | 2021 | | | Change | |
| Commercial | Commercial | | $ | 228.3 | | | $ | 183.7 | | | | 24.3 | % | | | 32.0 | % | | 31.0 | % | | | 1.0 | % | | Commercial | | $ | 281.7 | | | $ | 228.3 | | | | 23.4 | % | | | 33.1 | % | | 32.0 | % | | | 1.1 | % | |
Federal Government | Federal Government | | 48.0 | | | 43.8 | | | | 9.6 | % | | | 18.3 | % | | 18.3 | % | | | — | % | | Federal Government | | 62.3 | | | 48.0 | | | | 29.8 | % | | | 21.4 | % | | 18.3 | % | | | 3.1 | % | |
Consolidated | Consolidated | | $ | 276.3 | | | $ | 227.5 | | | | 21.5 | % | | | 28.3 | % | | 27.3 | % | | | 1.0 | % | | Consolidated | | $ | 344.0 | | | $ | 276.3 | | | | 24.5 | % | | | 30.1 | % | | 28.3 | % | | | 1.8 | % | |
Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our contract professionals, allowable materials and reimbursable out-of-pocket expenses. Consolidated gross profit was up 21.524.5 percent on revenue growth of 17.217.1 percent.
Gross margin was 28.330.1 percent, an expansion of one percentage point180 basis points over the second quarter of 2020. This improvement2021. Both business segments and all operating divisions reported year-over-year expansion in gross margin. The expansion in gross margin of the Commercial Segment was primarilydriven by the resultdouble-digit growth of improvementsits high-margin services (commercial consulting, creative digital marketing and permanent placement). The expansion in gross margin of the Federal Government Segment was driven by changes in business mix, including (i) a higher mix of revenues from our Commercial Segment, which carries a higher gross margin than our Federal Government Segment, (ii) higher relative growth within our Commercial Segmentthe contribution of high-margin revenue streams (e.g., consulting, creative marketing and placement services) and (iii)businesses acquired in 2021, a lower mix of revenues from cost-reimbursable contracts within our Federal Government Segment.low-margin services and higher profitability under certain firm fixed price contracts.
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 $220.4 million (19.3 percent of revenues), compared with $176.4 million (18.1 percent of revenues), a year-over-year in the second quarter of 2021. This increase of $30.4 million and a 50 basis-point increase in SG&A expenses as a percentage of revenue. This change related towas commensurate with the high year-over-year growth in the business, the increase in headcount to support futureincluding growth of high-margin commercial revenue streams (which carry a higher incentive compensationSG&A expense component than IT staffing and healthcare expenses, which were down in 2020 from historical levels, and $2.2 million more acquisition expenses related to our acquisition program.federal government services revenues).
Amortization of Intangible Assets
Amortization of intangible assets was $12.0 million, consistent with the prior-year period.
Interest Expense
Interest expense was $9.4 million, down from $9.7 million in the second quarter of 2020. Interest expense for the quarter was comprised of $6.4 million of interest on the Senior Notes, $2.4 million of interest on the Credit Facility, $0.4 million in deferred fee amortization and $0.2 million related to an amendment to the Credit Facility. The weighted-average outstanding borrowings were $1.0 billion for the quarter, no change from the second quarter of last year. The weighted-average interest rate for the quarter was 3.3 percent, slightly lower than the 3.5 percent in the second quarter of last year.
Provision for Income Taxes
The provision for income taxes was $21.2 million, up from $15.9 million in the second quarter of 2020 related to the growth in pre-tax income. The effective tax rate for the current quarter was 27.0 percent, which is slightly higher than the second quarter of 2020.
Income from Continuing Operations
Income from continuing operations was $57.3 million, which increased $13.8 million or 31.7 percent year over year from $43.5 million in the second quarter of 2020 due to growth in the business and the expansion of our gross margin.
Net Income
Net income of $64.2 million was comprised of income from continuing operations of $57.3 million (see above) and income from discontinued operations of $6.9 million.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2021 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2020
Revenues
Revenues for the first half of the year were $1.9 billion, up 10.9 percent year over year as a result of high growth of our Commercial and Federal Government segments. Revenues for the period included approximately $28.1 million from businesses acquired after the second quarter of 2020. The table below shows our revenues by segment for the six months ended June 30, 2021 and 2020 (in millions):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | % of Total | | |
| | 2021 | | 2020 | | | | Change | | | | 2021 | | 2020 | | | | Change | | |
| | | | | | | | | | | | | | | | | | | | |
Commercial | | | | | | | | | | | | | | | | | | | | |
Assignment | | $ | 1,099.8 | | | $ | 1,070.0 | | | | | 2.8 | % | | | | 58.5 | % | | 63.0 | % | | | | -4.5 | % | | |
Consulting | | 261.9 | | | 174.9 | | | | | 49.7 | % | | | | 13.9 | % | | 10.3 | % | | | | 3.6 | % | | |
| | 1,361.7 | | | 1,244.9 | | | | | 9.4 | % | | | | 72.4 | % | | 73.3 | % | | | | -0.9 | % | | |
Federal Government | | 520.2 | | | 452.4 | | | | | 15.0 | % | | | | 27.6 | % | | 26.7 | % | | | | 0.9 | % | | |
Consolidated | | $ | 1,881.9 | | | $ | 1,697.3 | | | | | 10.9 | % | | | | 100.0 | % | | 100.0 | % | | | | | | |
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Revenues from our Commercial Segment were up 9.4 percent year over year due to high growth in IT consulting services and solutions, creative marketing and permanent placement services. The growth in our consulting revenues resulted from a combination of factors, including broad-based industry demand, revenue contributions from an acquired business and the expansion of our near-shore delivery center in Mexico.
All of our industry verticals were up year over year, with both financial services (25.0 percent of Commercial revenues) and healthcare (16.7 percent of Commercial revenues) up by double digits year over year.
Revenues from our Federal Government Segment were up 15.0 percent year over year. The increase was driven by a number of factors, including increased volume on certain existing programs, new contract awards and the contribution from acquired businesses.
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the six months ended June 30, 2021 and 2020 (in millions):
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| | Gross Profit | | | | Gross Margin | | |
| | 2021 | | 2020 | | | | Change | | | | 2021 | | 2020 | | | | Change | | |
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Commercial | | 426.9 | | | $ | 389.2 | | | | | 9.7 | % | | | | 31.4 | % | | 31.3 | % | | | | 0.1 | % | | |
Federal Government | | 93.1 | | | 80.9 | | | | | 15.1 | % | | | | 17.9 | % | | 17.9 | % | | | | — | % | | |
Consolidated | | $ | 520.0 | | | $ | 470.1 | | | | | 10.6 | % | | | | 27.6 | % | | 27.7 | % | | | | -0.1 | % | | |
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Consolidated gross profit increased 10.6 percent on revenue growth of 10.9 percent. Gross margins for both segments were essentially flat year over year.
Selling, General and Administrative Expenses
SG&A expenses were $340.7 million (18.1 percent of revenues), a year-over-year increase of $28.8 million and a 30 basis-point decrease in SG&A expense as a percent of revenues. The increase in expenses related to the high year-over-year growth in the business, an increase in headcount to support future growth and higher incentive compensation and healthcare expenses, which were both down in 2020 from historical levels, and $1.8 million more acquisition expenses related to our acquisition program.
Amortization of Intangible Assets
Amortization of intangible assets was $24.0$13.5 million, consistent withup from $12.0 million in the prior-year period.second quarter of 2021. This increase relates to the effects of the three businesses acquired in 2021.
Interest Expense
Interest expense was $18.6$10.1 million down from $21.1 million from the prior year, primarily resulting from the reduction of LIBOR. Interest expenseand was comprised of $12.7$3.3 million of interest on the Senior Notes, $4.9senior secured credit facility, $6.3 million of interest on the Credit Facility, $0.8unsecured senior notes, and $0.5 million in amortization of deferred fee amortization and $0.2 million related to an amendment to the Credit Facility.loan costs. The weighted-average outstanding borrowings outstandingfor the quarter were approximately $1.0 billion forand the first half of 2021 and 2020. The weighted-average interest rate in the first half of the year was 3.3 percent, down from 3.8 percent in the first half of 2020.3.7 percent.
Provision for Income Taxes
The provision for income taxes was $36.6$27.4 million, up from $30.1$21.2 million in the first halfsecond quarter of 2020. The2021, related to the growth in income before income taxes as the effective tax rate for the first halfcurrent quarter was only slightly higher than the second quarter of the year was 26.8 percent, which was consistent with the first half of 2020.2021.
Income from Continuing Operations
Income from continuing operations was $100.1$72.6 million, which increased $17.5up from $57.3 million or 21.2 percentin the second quarter of 2021 driven by the growth in the business and the expansion of our gross margin.
Net Income
Net income of $72.5 million was comprised of income from $82.6continuing operations of $72.6 million and loss from discontinued operations of $0.1 million.
RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2022 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2021
Revenues
Revenues for the first half of 2020 due to highthe year were $2.2 billion, up 18.6 percent year-over-year as a result of double-digit organic growth and the revenue contribution of $76.5 million from businesses acquired during 2021. Excluding the contributions from acquisitions, revenues were up 14.6 percent year-over-year. The table below shows our revenues by segment for the six months ended June 30, 2022 and 2021 (in millions).
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| | | | | | | | | | % of Total | | |
| | 2022 | | 2021 | | | | Change | | | | 2022 | | 2021 | | | | Change | | |
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Commercial | | | | | | | | | | | | | | | | | | | | |
Assignment | | $ | 1,256.6 | | | $ | 1,099.8 | | | | | 14.3 | % | | | | 56.3 | % | | 58.5 | % | | | | -2.2 | % | | |
Consulting | | 426.9 | | | 261.9 | | | | | 63.0 | % | | | | 19.1 | % | | 13.9 | % | | | | 5.2 | % | | |
| | 1,683.5 | | | 1,361.7 | | | | | 23.6 | % | | | | 75.4 | % | | 72.4 | % | | | | 3.0 | % | | |
Federal Government | | 549.3 | | | 520.2 | | | | | 5.6 | % | | | | 24.6 | % | | 27.6 | % | | | | -3.0 | % | | |
Consolidated | | $ | 2,232.8 | | | $ | 1,881.9 | | | | | 18.6 | % | | | | 100.0 | % | | 100.0 | % | | | | | | |
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Commercial Segment — Revenues from our Commercial Segment (75.4 percent of total revenues) were up 23.6 percent over the first half of last year. Assignment revenues totaled $1.3 billion (74.6 percent of the segment's revenues), up 14.3 percent year-over-year. Consulting services revenues were $426.9 million (25.4 percent of the segment's revenues), up 63.0 percent year-over-year. Consulting services included approximately $20.7 million in revenues from a business acquired in 2021.
All commercial divisions (IT services and solutions, creative digital marketing and permanent placement) and revenue streams had double-digit growth over the first half of last year with the highest growth coming from our commercial consulting, creative digital marketing and permanent placement services. All five industry verticals: (i) financial services, (ii) consumer and industrials, (iii) healthcare, (iv) technology, media and telecom and (v) business and government services, were also up double-digit year-over-year.
Within the Commercial Segment, IT services and solutions revenues, which accounted for 82.9 percent of the segment's revenues in the first half of 2022, were up 22.3 percent over the first half of last year driven by high growth in consulting services and low double-digit growth in assignment revenues. Creative digital marketing and permanent placement revenues, which combined accounted for 17.1 percent of the segment's revenues, were up 30.3 percent over the first half of last year.
Federal Government Segment — Revenues from our Federal Government Segment (24.6 percent of revenues) were up 5.6 percent year-over-year. Revenues for the first half of 2022 included $55.8 million from businesses acquired in the third quarter of last year. Revenues also included $16.0 million from a customer-directed, third-party license purchase under a cost reimbursable contract that had been expected to occur in the second half of the year. Last year benefited from higher spending levels on certain cost reimbursable contracts and revenues from a low-margin web services contract that the segment elected to not renew in the third quarter of last year.
Gross Profit and Gross Margin
The table below shows gross profit and gross margin by segment for the six months ended June 30, 2022 and 2021 (in millions).
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| | Gross Profit | | | | Gross Margin | | |
| | 2022 | | 2021 | | | | Change | | | | 2022 | | 2021 | | | | Change | | |
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Commercial | | $ | 554.3 | | | $ | 426.9 | | | | | 29.8 | % | | | | 32.9 | % | | 31.4 | % | | | | 1.5 | % | | |
Federal Government | | 116.3 | | | 93.1 | | | | | 24.9 | % | | | | 21.2 | % | | 17.9 | % | | | | 3.3 | % | | |
Consolidated | | $ | 670.6 | | | $ | 520.0 | | | | | 29.0 | % | | | | 30.0 | % | | 27.6 | % | | | | 2.4 | % | | |
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Consolidated gross profit was up 29.0 percent on revenue growth of 18.6 percent. Gross margin was 30.0 percent, an expansion of 240 basis points over the first half of 2021. Both segments reported expansion in gross margin. The expansion in gross margin of the Commercial Segment was driven by the double-digit growth of its high-margin services (commercial consulting, creative digital marketing and permanent placement services). The expansion in gross margin of the Federal Government Segment was driven by changes in business mix, including the contribution of high-margin businesses acquired in 2021, a lower mix of revenues from low-margin services and higher profitability under certain firm fixed price contracts.
Selling, General and Administrative Expenses
SG&A expenses were $432.5 million (19.4 percent of revenues), compared with $340.7 million (18.1 percent of revenues) in the first six months of 2021. This increase was commensurate with the growth in the business, including growth of high-margin commercial revenue streams (which carry a higher SG&A expense component than IT staffing and federal government services revenues).
Amortization of Intangible Assets
Amortization of intangible assets was $27.4 million, up from $24.0 million in the first six months of 2021. This increase relates to the effects of the three businesses acquired in 2021.
Interest Expense
Interest expense was $19.4 million and was comprised of $5.7 million of interest on the senior secured credit facility, $12.7 million of interest on the unsecured senior notes, and $1.0 million in amortization of deferred loan costs. The weighted-average borrowings outstanding for the first six months of 2022 were approximately $1.0 billion and the weighted-average interest rate was 3.5 percent.
Provision for Income Taxes
The provision for income taxes was $51.1 million, up from $36.6 million in the first six months of 2021, related to the growth in income before taxes as the effective tax rate for the first six months of the year was slightly lower than the first six months of 2021.
Income from Continuing Operations
Income from continuing operations was $140.2 million, up from $100.1 million for the first six months of 2021 driven by the growth in the business and the expansion of our gross margin.
Net Income
Net income of $112.9$139.3 million was comprised of income from continuing operations of $100.1$140.2 million (see above) and incomeloss from discontinued operations of $12.8$0.9 million.
Commercial Segment - Consulting Metrics
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 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 our commercial consulting bookings to the commercial consulting revenues for a specified period. The average duration of commercial consulting projects is one year.
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| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
(dollars in millions) | | 2022 | | 2021 | | 2022 | | 2021 |
Bookings | | $ | 340.6 | | | $ | 217.7 | | | $ | 638.1 | | | $ | 399.7 | |
Book-to-Bill Ratio | | 1.5 to 1.0 | | 1.5 to 1.0 | | 1.5 to 1.0 | | 1.5 to 1.0 |
Federal Government Segment Contract BacklogMetrics
Contract backlog is a useful measure of potential future revenues for our federal government business. Contract backlogFederal Government Segment represents the estimated amount of future revenues to be recognized under awarded contracts including task orders and options. Contract backlog does not include potential value from contract awards that have been protested by competitors until the protest is resolved in our favor. Contract backlog does not include any estimate of future work expected under indefinite delivery, indefinite quantity contracts or U.S. General Services Administration schedules. Contract backlog is segregated into funded contract backlog and negotiated unfunded contract backlog, which together make up total contract backlog.
Funded contract backlog for contracts with U.S. government agencies primarily represents contracts for which funding has been formally awarded less revenues previously recognized on these contracts and does not include the unfunded portion of contracts where funding is incrementally awarded or authorized by the U.S. government even though the contract may call for performance over a number of years. Funded contract backlog for contracts with non-government agencies represents the estimated value of contracts, which may cover multiple future years, less revenues previously recognized on these contracts.
Negotiated unfunded contract backlog represents the estimated future revenues to be earned from negotiated contract awards for which funding has not yet been awarded or authorized and from unexercised priced contract options.
Contract backlogThese 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. Changes in the funded contract backlog are also affected by the funding cycles of the government.
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(in millions) | | June 30, 2021 | | December 31, 2020 |
Funded Contract Backlog | | $ | 449.1 | | | $ | 444.5 | |
Negotiated Unfunded Contract Backlog | | 2,272.5 | | | 2,201.7 | |
Contract Backlog | | $ | 2,721.6 | | | $ | 2,646.2 | |
Federal Government Segment Book-to-Bill Ratio | | | | | | | | | | | | | | | | | | | | |
(in millions) | | June 30, 2022 | | December 31, 2021 | | June 30, 2021 |
Funded Contract Backlog | | $ | 455.5 | | | $ | 529.2 | | | $ | 449.1 | |
Negotiated Unfunded Contract Backlog | | 2,395.2 | | | 2,472.0 | | | 2,272.5 | |
Contract Backlog | | $ | 2,850.7 | | | $ | 3,001.2 | | | $ | 2,721.6 | |
The book-to-bill ratio for our federal government businessFederal Government Segment was 1.20.9 to 1.0 for the second quarter of 2021 and 1.0 to 1.0 for the trailing-twelve-months.trailing-twelve-months ended June 30, 2022. The book-to-bill ratio was calculated as the sum of the change in total contract backlog during the period plus revenues for the period, divided by revenues for the period. The contract backlog coverage ratio (backlog at June 30, 20212022 divided by trailing-twelve-months of federal government businessFederal Government Segment revenues) was 2.5 to 1.0.
Liquidity and Capital Resources
Our working capital at June 30, 20212022 was $873.2$873.9 million, and our cash and cash equivalents were $375.4$490.6 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 June 30, 2021,2022, we had full availability under our $250.0 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 $204.7$144.4 million for the first half of 2021,2022, compared with $250.2$204.7 million in the same periodfirst half of 2020. Operatinglast year. Net cash flowsprovided by operating activities before changes in operating assets and liabilities was $208.2 million, up from $180.2 million in
the first half of last year. Changes in operating assets and liabilities resulted in net cash usage of $63.8 million, compared with net cash generation of $24.5 million in the first half of last year. This change mainly related to the revenue growth in the Commercial Segment and an increase in accounts receivable days sales outstanding.
Net cash used by investing activities was $6.1 million for the first half of 2022 and included $9.8 million in cash received related to the finalization of the purchase price for the sale of the Oxford business and $18.4 million in capital expenditures. Net cash used in investing activities in the first half of last year benefited from (i) lower working capital requirements related to the decline in business activity stemming from COVID-19 and (ii) the deferral of federal payroll taxes as provided by the CARES Act. The year-over-year decrease in net cash from operating activities is mainly the result of investment in working capital to support growth in the business and the expiration at the end of last year of the payroll tax payment deferral under the CARES Act.
Net cash used in investing activities was $103.4 million for the first half of 2021 and was comprised of $85.8 million for acquisitions and $17.6 million for capital expenditures. Net cash used in investing activities in the same period of 2020 was $108.4 million and included $85.5 million for acquisitions and $22.6 million for capital expenditures.
Net cash provided byused in financing activities was $0.1$177.1 million for the first half of 20212022, compared with net cash used in financing activitiesprovided of $29.2$0.1 million in the first half of 2020. Thelast year. Net cash used in financing activities for the first half of 2022 was primarily comprised of $168.1 million to repurchase the last year included $27.9 million of cash used for repurchases of ourCompany's common stock. There were no repurchases of common stock in the first half of thislast year.
Senior Secured Credit Facility — The senior secured credit facility ("Credit Facility") consists of a term B loan and a $250.0 million revolving credit facility ("Revolver").facility. At June 30, 2021,2022, the Company had $490.8 million outstanding under the term B loan and no outstanding borrowings under the Revolver.revolver. Borrowings under the term B loan bear interest at LIBOR plus 1.75 percent, or the bank’s base rate plus 0.75 percent. Borrowings under the Revolverrevolver bear interest at LIBOR plus 1.25 to 2.25 percent, or the bank’s base rate plus 0.25 to 1.25 percent, depending on leverage levels. A commitment fee of 0.20 to 0.35 percent is payable on the undrawn portion of the Revolver.revolver. There are no required minimum principal payments on the Credit Facilityfacility until maturity. The Credit Facilityfacility is secured by substantially all of the Company's assets and includes various restrictive covenants. As a result of the planned divestiture of the Oxford business,In July 2021, the Company amended its Credit Facilityfacility to, among other things, permit the sale of its Oxford business and allow the net sale proceeds (approximately $0.4 billion) to be used for amongfuture acquisitions and other things, future acquisitions.permitted investments. With the acquisition of GlideFast on July 6, 2022 (see Note 11. Subsequent Events), and other investments of the net cash proceeds, required prepayments, if any, are expected to be insignificant.
Unsecured Senior Notes— The Company has $550.0 million of unsecured senior notes due in 2028, ("Senior Notes"). The Senior Noteswhich bear interest at 4.625 percent payable semiannually in arrears on May 15 and November 15. The Senior NotesThese notes are unsecured obligations and are subordinate to the Credit Facility to the extent of the collateral securing suchsenior secured credit facility. The Senior Notes alsoThese notes contain certain customary limitations including, among other terms and conditions, our ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets and make certain distributions. Similar to the recently amended terms of the Credit Facility, the Senior Notes permit the planned divestiture of the Oxford business and the sale proceeds to be used for future acquisitions.
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 second quarter of 20212022 compared with those disclosed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 20202021 10-K.
Commitments
There were no material changes to the significant commitments or contractual obligations that were disclosed in our 20202021 10-K.
Item 3 — Quantitative and Qualitative Disclosures about Market Risks
With respect to our quantitative and qualitative disclosures about foreign currency risks and interest rates risks, there have been no material changes to the information included in our 20202021 10-K. Based on the relative size and nature of our foreign operations, we do not believe that a 10 percent change in the value of foreign currencies relative to the U.S. dollar would have a material impact on our financial statements. A hypothetical 100 basis-point change in interest rates on variable-rate debt would have resulted in an interest expense fluctuation of approximately $4.9 million based on $490.8 million of debt outstanding for any 12-month period.
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 and Accounting 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 and Accounting 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 and Accounting 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 June 30, 20212022 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.
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. 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 20202021 10-K.
Item 2 — Unregistered Sales of Securities and Use of Proceeds
On March 18,December 9, 2021, the Board of Directors approved a two-year stock repurchase program under which the Company may repurchase up to $250.0$350.0 million of its common stock. On July 27, 2022, the Company's Board of Directors approved a new stock repurchase program under which the Company may repurchase up to $400.0 million of its common stock through March 18, 2023.over the next two years. Under terms of the 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 did notto acquire any particular amount of the Company's stock and may be suspended at any time at the Company's discretion. The new program replaces the Company's previous $350.0 million stock repurchase any securities under this programprogram.
The Company's repurchases of its common stock during the three and six months ended June 30, 2021. Following the announcement on July 1, 2021 of the planned divestiture of the Oxford business, the Company began repurchasing its common shares under a 10b5-1 plan and has continued repurchasing2022 are shown in the open market.table below.
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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) |
April | 234,187 | | $ | 115.39 | | 234,187 | | $ | 230.6 | |
May | 199,464 | | $ | 108.30 | | 199,464 | | $ | 209.0 | |
June | 501,936 | | $ | 87.96 | | 501,936 | | $ | 164.9 | |
Total | 935,587 | | $ | 99.16 | | 935,587 | | $ | 164.9 | |
In connection with our stock-based compensation plans, during the three months ended June 30, 2022, 21,892 shares of our common stock with an aggregate value of $2.5 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
None.
Item 6 — Exhibits
INDEX TO EXHIBITS
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Number | | Footnote | | Description |
| | (1) | | |
| | (2) | | |
| | (3) | | |
| | * | | |
4.1 | | (4)(P) | | Specimen Common Stock Certificate |
| | * | | |
| | * | | |
| | * | | |
| | * | | |
| | * | | |
| | * | | |
| | * | | |
| | * | | |
101 | | * | | 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) |
| | | | |
* | Filed herewith. |
(1) | Incorporated by reference from an exhibit to our Current Report on Form 8-K filed with the SEC on July 1, 2021. |
(2) | Incorporated by reference from an exhibit to our Current Report on Form 8-K filed with the SEC on June 25, 2014. |
(3) | Incorporated by reference from an exhibit to our Current Report on Form 8-K filed with the SEC on March 16, 2018. |
(4) | Incorporated by reference from an exhibit to our Registration Statement on Form S-1 (File No. 33-50646) declared effective by the SEC on September 21, 1992. |
(P) | This exhibit has been paper filed and is not subject to the hyperlinking requirements of Item 601 of Regulation S-K. |
| | | | | | | | |
Number | | Description |
3.1 | | |
3.2 | | |
3.3 | | |
4.1 | | Specimen Common Stock Certificate (P) |
31.1* | | |
31.2* | | |
32.1* | | |
32.2* | | |
101 | | 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) |
| | |
* | Filed herewith. |
(P) | This exhibit originally filed in paper format. Accordingly, a hyperlink has not been provided. |
SIGNATURE
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.
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| ASGN Incorporated |
| | |
Date: August 9, 20218, 2022 | By: | /s/ Edward L. Pierce |
| | Edward L. Pierce |
| | Executive Vice President and Chief Financial Officer |
| | (Principal Financial and Accounting Officer and Duly Authorized Officer) |