UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2022~~2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 001-35636

ASGN Incorporated

(Exact name of registrant as specified in its charter)

Delaware

95-4023433

(State of Incorporation)

(I.R.S. Employer Identification No.)

4400 Cox Road, Suite 110

Glen Allen, Virginia 23060

(Address, including zip code, of Principal Executive Offices)

(888) 482-8068

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of exchange on which registered

Common Stock

ASGN

NYSE

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

At ~~October~~July 31, ~~2022,~~2023, the total number of outstanding shares of the Common Stock of ASGN Incorporated (the "Company") ($0.01 par value) was ~~49.9~~48.4 million.

ASGN INCORPORATED AND SUBSIDIARIES

INDEX


PART I — FINANCIAL INFORMATION

Item 1 — Condensed Consolidated Financial Statements (Unaudited)			3

Condensed Consolidated Balance Sheets			3

Condensed Consolidated Statements of Operations and Comprehensive Income			4

Condensed Consolidated Statements of Stockholders’ Equity			5

Condensed Consolidated Statements of Cash Flows			6

Notes to Condensed Consolidated Financial Statements			7

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations			1312

Item 3 — Quantitative and Qualitative Disclosures about Market Risks			1716

Item 4 — Controls and Procedures			1816

PART II — OTHER INFORMATION

Item 1 — Legal Proceedings			1917

Item 1A — Risk Factors			1917

Item 2 — Unregistered Sales of Securities and Use of Proceeds			1917

Item 3 — Defaults Upon Senior Securities			1917

Item 4 — Mine Safety Disclosures			1917

Item 5 — Other Information			1917

Item 6 — Exhibits			2018

Signature			2119

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)


		September 30, 2022		December 31, 2021			June 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	211.2	$	529.6	Cash and cash equivalents	$	93.8	$	70.3
Accounts receivable, net	Accounts receivable, net	877.9		708.2		Accounts receivable, net	828.9		853.6
Prepaid expenses and income taxes	Prepaid expenses and income taxes	15.3		41.2		Prepaid expenses and income taxes	33.2		39.9
Other current assets	Other current assets	15.6		30.4		Other current assets	16.4		17.3
Total current assets	Total current assets	1,120.0		1,309.4		Total current assets	972.3		981.1
Property and equipment, net	Property and equipment, net	62.3		55.0		Property and equipment, net	76.1		66.3
Operating lease right-of-use assets	Operating lease right-of-use assets	55.4		57.1		Operating lease right-of-use assets	53.0		51.1
Identifiable intangible assets, net	Identifiable intangible assets, net	545.4		487.9		Identifiable intangible assets, net	533.5		569.6
Goodwill	Goodwill	1,805.9		1,569.5		Goodwill	1,894.0		1,892.0
Other non-current assets	Other non-current assets	22.2		23.9		Other non-current assets	32.4		25.6
Total assets	Total assets	$	3,611.2	$	3,502.8	Total assets	$	3,561.3	$	3,585.7
LIABILITIES AND STOCKHOLDERS’ EQUITY	LIABILITIES AND STOCKHOLDERS’ EQUITY					LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	33.5	$	20.1	Accounts payable	$	24.3	$	35.2
Accrued payroll	Accrued payroll	329.2		305.5		Accrued payroll	266.5		285.1
Operating lease liabilities	Operating lease liabilities	23.5		23.3		Operating lease liabilities	19.7		22.9

Other current liabilities	Other current liabilities	106.1		102.0		Other current liabilities	106.1		98.7
Total current liabilities	Total current liabilities	492.3		450.9		Total current liabilities	416.6		441.9
Long-term debt	Long-term debt	1,080.8		1,033.9		Long-term debt	1,035.7		1,066.6
Operating lease liabilities	Operating lease liabilities	37.2		40.2		Operating lease liabilities	37.4		32.3
Deferred income tax liabilities	Deferred income tax liabilities	98.2		89.0		Deferred income tax liabilities	129.2		129.2
Other long-term liabilities	Other long-term liabilities	13.6		23.4		Other long-term liabilities	15.8		14.4
Total liabilities	Total liabilities	1,722.1		1,637.4		Total liabilities	1,634.7		1,684.4
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
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	—		—		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; 50.0 million and 51.8 million shares outstanding at September 30, 2022 and December 31, 2021, respectively		0.5		0.5
Common stock, $0.01 par value; 75.0 million shares authorized; 48.5 million and 49.5 million shares outstanding at June 30, 2023 and December 31, 2022, respectively						Common stock, $0.01 par value; 75.0 million shares authorized; 48.5 million and 49.5 million shares outstanding at June 30, 2023 and December 31, 2022, respectively	0.5		0.5
Paid-in capital	Paid-in capital	702.7		690.8		Paid-in capital	702.8		703.5
Retained earnings	Retained earnings	1,190.1		1,174.4		Retained earnings	1,223.6		1,200.0
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(4.2)		(0.3)		Accumulated other comprehensive loss	(0.3)		(2.7)
Total stockholders’ equity	Total stockholders’ equity	1,889.1		1,865.4		Total stockholders’ equity	1,926.6		1,901.3
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	3,611.2	$	3,502.8	Total liabilities and stockholders’ equity	$	3,561.3	$	3,585.7

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					Nine Months Ended				Three Months Ended								Six Months Ended
		September 30,				September 30,				June 30,							June 30,
		2022		2021						2022				2021				2023			2022			2023			2022
Revenues	Revenues	$	1,197.9	$	1,073.8			$	3,430.7			$	2,955.7		Revenues	$	1,130.9		$	1,141.8		$	2,259.7		$	2,232.8
Costs of services	Costs of services	839.0		765.1				2,401.2				2,127.0			Costs of services	804.6			797.8			1,607.0			1,562.2
Gross profit	Gross profit	358.9		308.7				1,029.5				828.7			Gross profit	326.3			344.0			652.7			670.6
Selling, general and administrative expenses	Selling, general and administrative expenses	232.6		192.7				665.1				533.4			Selling, general and administrative expenses	210.5			220.4			434.6			432.5
Amortization of intangible assets	Amortization of intangible assets	17.9		15.9				45.3				39.9			Amortization of intangible assets	17.9			13.5			36.0			27.4
Operating income	Operating income	108.4		100.1				319.1				255.4			Operating income	97.9			110.1			182.1			210.7
Interest expense	Interest expense	(12.1)		(9.6)				(31.5)				(28.2)			Interest expense	(15.8)			(10.1)			(31.2)			(19.4)
Income before income taxes	Income before income taxes	96.3		90.5				287.6				227.2			Income before income taxes	82.1			100.0			150.9			191.3
Provision for income taxes	Provision for income taxes	25.2		24.2				76.3				60.8			Provision for income taxes	22.0			27.4			41.3			51.1
Income from continuing operations	Income from continuing operations	71.1		66.3				211.3				166.4			Income from continuing operations	60.1			72.6			109.6			140.2

Income from discontinued operations, net of income taxes		2.1		145.7				1.2				158.5
Loss from discontinued operations, net of income taxes															Loss from discontinued operations, net of income taxes	—			(0.1)			—			(0.9)
Net income	Net income	$	73.2	$	212.0			$	212.5			$	324.9		Net income	$	60.1		$	72.5		$	109.6		$	139.3

Earnings per share:	Earnings per share:														Earnings per share:
Basic —	Basic —														Basic —
Continuing operations	Continuing operations	$	1.42	$	1.26			$	4.15			$	3.14		Continuing operations	$	1.23		$	1.42		$	2.23		$	2.73
Discontinued operations	Discontinued operations	0.04		2.76				0.02				2.99			Discontinued operations	—			—			—			(0.01)
		$	1.46	$	4.02			$	4.17			$	6.13			$	1.23		$	1.42		$	2.23		$	2.72
Diluted —	Diluted —														Diluted —
Continuing operations	Continuing operations	$	1.40	$	1.24			$	4.09			$	3.10		Continuing operations	$	1.22		$	1.41		$	2.21		$	2.70
Discontinued operations	Discontinued operations	0.04		2.73				0.02				2.95			Discontinued operations	—			—			—			(0.01)
		$	1.44	$	3.97			$	4.11			$	6.05			$	1.22		$	1.41		$	2.21		$	2.69

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	50.1		52.7				50.9				53.0			Basic	49.0			51.0			49.1			51.3
Diluted	Diluted	50.7		53.4				51.6				53.7			Diluted	49.2			51.6			49.5			52.0

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	$	73.2	$	212.0			$	212.5			$	324.9		Net income	$	60.1		$	72.5		$	109.6		$	139.3
Foreign currency translation adjustment	Foreign currency translation adjustment	(2.2)		2.6				(3.9)				0.7			Foreign currency translation adjustment	1.4			(1.7)			2.4			(1.7)
Comprehensive income	Comprehensive income	$	71.0	$	214.6			$	208.6			$	325.6		Comprehensive income	$	61.5		$	70.8		$	112.0		$	137.6

See notes to condensed consolidated financial statements.

ASGN INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)

(in millions)


		Common Stock			Paid-in Capital		Retained Earnings		Other			Total				Common Stock			Paid-in Capital		Retained Earnings		Other		Total
		Shares	Par Value								Shares				Par Value
Three Months Ended September 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, 2023														Three Months Ended June 30, 2023
Balance at March 31, 2023														Balance at March 31, 2023		49.2	$	0.5	$	714.4	$	1,210.3	$	(1.7)	$	1,923.5
Stock-based compensation expense	Stock-based compensation expense	—	—		11.9		—		—			11.9		Stock-based compensation expense		—	—		11.3		—		—		11.3
Issuances under equity plans	Issuances under equity plans	0.2	—		8.5		—		—			8.5		Issuances under equity plans		0.2	—		—		—		—		—
Tax withholding on restricted stock vesting	Tax withholding on restricted stock vesting	—	—		(1.6)		—		—			(1.6)		Tax withholding on restricted stock vesting		—	—		(10.0)		—		—		(10.0)
Stock repurchases and retirement of shares	Stock repurchases and retirement of shares	(0.6)	—		(8.2)		(48.6)		—			(56.8)		Stock repurchases and retirement of shares		(0.9)	—		(12.9)		(46.8)		—		(59.7)
Other	Other	—	—		—		—		(2.2)			(2.2)		Other		—	—		—		—		1.4		1.4
Net income	Net income	—	—		—		73.2		—			73.2		Net income		—	—		—		60.1		—		60.1
Balance at September 30, 2022		50.0	$	0.5	$	702.7	$	1,190.1	$	(4.2)		$	1,889.1
Balance at June 30, 2023														Balance at June 30, 2023		48.5	$	0.5	$	702.8	$	1,223.6	$	(0.3)	$	1,926.6

Three Months Ended September 30, 2021
Balance at June 30, 2021		53.2	$	0.5	$	683.0	$	1,039.2	$	(2.9)		$	1,719.8
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	—	—		20.5		—		—			20.5		Stock-based compensation expense		—	—		11.2		—		—		11.2
Issuances under equity plans		0.1	—		6.6		—		—			6.6

Tax withholding on restricted stock vesting	Tax withholding on restricted stock vesting	0.2	—		(6.7)		—		—			(6.7)		Tax withholding on restricted stock vesting		—	—		(2.5)		—		—		(2.5)
Stock repurchases and retirement of shares	Stock repurchases and retirement of shares	(1.2)	—		(14.7)		(105.7)		—			(120.4)		Stock repurchases and retirement of shares		(0.9)	—		(12.6)		(80.0)		—		(92.6)
Other	Other	—	—		—		—		2.6			2.6		Other		—	—		—		—		(1.7)		(1.7)
Net income	Net income	—	—		—		212.0		—			212.0		Net income		—	—		—		72.5		—		72.5
Balance at September 30, 2021		52.3	$	0.5	$	688.7	$	1,145.5	$	(0.3)		$	1,834.4
Balance at June 30, 2022														Balance at June 30, 2022		50.4	$	0.5	$	692.1	$	1,165.5	$	(2.0)	$	1,856.1

		Common Stock			Paid-in Capital		Retained Earnings		Other			Total				Common Stock			Paid-in Capital		Retained Earnings		Other		Total
		Shares	Par Value								Shares				Par Value
Nine Months Ended September 30, 2022
Six Months Ended June 30, 2023														Six Months Ended June 30, 2023
Balance at December 31, 2022														Balance at December 31, 2022		49.5	$	0.5	$	703.5	$	1,200.0	$	(2.7)	$	1,901.3
Stock-based compensation expense														Stock-based compensation expense		—	—		23.4		—		—		23.4
Issuances under equity plans														Issuances under equity plans		0.4	—		11.1		—		—		11.1
Tax withholding on restricted stock vesting														Tax withholding on restricted stock vesting		—	—		(14.2)		—		—		(14.2)
Stock repurchase and retirement of shares														Stock repurchase and retirement of shares		(1.4)	—		(21.0)		(86.0)		—		(107.0)
Other														Other		—	—		—		—		2.4		2.4
Net income														Net income		—	—		—		109.6		—		109.6
Balance at June 30, 2023														Balance at June 30, 2023		48.5	$	0.5	$	702.8	$	1,223.6	$	(0.3)	$	1,926.6

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	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	—	—		35.9		—		—			35.9		Stock-based compensation expense		—	—		24.0		—		—		24.0
Issuances under equity plans	Issuances under equity plans	0.4	—		18.9		—		—			18.9		Issuances under equity plans		0.2	—		10.4		—		—		10.4
Tax withholding on restricted stock vesting	Tax withholding on restricted stock vesting	—	—		(12.9)		—		—			(12.9)		Tax withholding on restricted stock vesting		—	—		(11.3)		—		—		(11.3)
Stock repurchase and retirement of shares	Stock repurchase and retirement of shares	(2.2)	—		(30.0)		(196.8)		—			(226.8)		Stock repurchase and retirement of shares		(1.6)	—		(21.8)		(148.2)		—		(170.0)
Other	Other	—	—		—		—		(3.9)			(3.9)		Other		—	—		—		—		(1.7)		(1.7)
Net income	Net income	—	—		—		212.5		—			212.5		Net income		—	—		—		139.3		—		139.3
Balance at September 30, 2022		50.0	$	0.5	$	702.7	$	1,190.1	$	(4.2)		$	1,889.1

Nine Months Ended September 30, 2021
Balance at December 31, 2020		52.9	$	0.5	$	661.3	$	926.3	$	(1.0)		$	1,587.1
Stock-based compensation expense		—	—		41.7		—		—			41.7
Issuances under equity plans		0.2	—		14.3		—		—			14.3
Tax withholding on restricted stock vesting		0.4	—		(13.9)		—		—			(13.9)
Stock repurchase and retirement of shares		(1.2)	—		(14.7)		(105.7)		—			(120.4)
Other		—	—		—		—		0.7			0.7
Net income		—	—		—		324.9		—			324.9
Balance at September 30, 2021		52.3	$	0.5	$	688.7	$	1,145.5	$	(0.3)		$	1,834.4
Balance at June 30, 2022														Balance at June 30, 2022		50.4	$	0.5	$	692.1	$	1,165.5	$	(2.0)	$	1,856.1

See notes to condensed consolidated financial statements.

ASGN INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(in millions)


		Nine Months Ended					Six Months Ended
		September 30,					June 30,
		2022		2021			2023		2022
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net income	Net income	$	212.5	$	324.9	Net income	$	109.6	$	139.3
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:
Gain on sale of discontinued operations		—		(218.6)

Depreciation and amortization	Depreciation and amortization	64.8		67.5		Depreciation and amortization	49.8		39.8
Stock-based compensation	Stock-based compensation	35.9		41.7		Stock-based compensation	23.4		24.0
Deferred income taxes		0.3		(42.4)

Other	Other	6.5		3.7		Other	3.4		5.1
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:					Changes in operating assets and liabilities, net of effects of acquisitions and divestiture:
Accounts receivable	Accounts receivable	(154.2)		(99.5)		Accounts receivable	24.7		(136.7)
Prepaid expenses and income taxes	Prepaid expenses and income taxes	26.4		12.6		Prepaid expenses and income taxes	6.8		23.7
Accounts payable	Accounts payable	10.0		(12.0)		Accounts payable	(10.4)		12.1
Accrued payroll	Accrued payroll	20.0		75.3		Accrued payroll	(19.3)		31.9
Income taxes payable	Income taxes payable	15.1		130.6		Income taxes payable	16.1		8.0
Other	Other	(4.8)		(7.9)		Other	(11.1)		(2.8)
Net cash provided by operating activities	Net cash provided by operating activities	232.5		275.9		Net cash provided by operating activities	193.0		144.4
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	(27.0)		(25.6)		Cash paid for property and equipment	(22.9)		(18.4)
Cash paid for acquisitions, net of cash acquired		(351.8)		(224.4)
Cash received from sale of the Oxford business		9.8		499.1

Cash received from the sale of a business						Cash received from the sale of a business	—		9.8
Other	Other	2.4		0.1		Other	(0.6)		2.5
Net cash provided by (used in) investing activities		(366.6)		249.2
Net cash used in investing activities						Net cash used in investing activities	(23.5)		(6.1)
Cash Flows from Financing Activities	Cash Flows from Financing Activities					Cash Flows from Financing Activities

Proceeds from long term debt	Proceeds from long term debt	46.0		—		Proceeds from long term debt	73.0		—
Principal payments of long term debt						Principal payments of long term debt	(104.5)		—
Proceeds from employee stock purchase plan	Proceeds from employee stock purchase plan	18.9		14.3		Proceeds from employee stock purchase plan	11.1		10.4
Repurchases of common stock	Repurchases of common stock	(227.6)		(118.4)		Repurchases of common stock	(106.4)		(168.1)
Payment of employment taxes related to release of restricted stock awards	Payment of employment taxes related to release of restricted stock awards	(12.9)		(13.9)		Payment of employment taxes related to release of restricted stock awards	(14.2)		(11.3)
Payment of contingent consideration	Payment of contingent consideration	(8.1)		—		Payment of contingent consideration	(5.0)		(8.1)
Debt issuance and amendment costs		—		(1.4)

Net cash used in financing activities	Net cash used in financing activities	(183.7)		(119.4)		Net cash used in financing activities	(146.0)		(177.1)
Effect of exchange rate changes on cash and cash equivalents	Effect of exchange rate changes on cash and cash equivalents	(0.6)		(0.7)		Effect of exchange rate changes on cash and cash equivalents	—		(0.2)
Net increase (decrease) in cash and cash equivalents	Net increase (decrease) in cash and cash equivalents	(318.4)		405.0		Net increase (decrease) in cash and cash equivalents	23.5		(39.0)

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 beginning of year	70.3		529.6
Cash and cash equivalents at end of period	Cash and cash equivalents at end of period	$	211.2	$	679.4	Cash and cash equivalents at end of period	$	93.8	$	490.6


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	$	33.4	$	39.6	Income taxes	$	8.0	$	17.7
Interest	Interest	$	23.6	$	20.1	Interest	$	30.1	$	18.4
Operating leases	Operating leases	$	20.4	$	25.3	Operating leases	$	13.2	$	13.6
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	$	15.5	$	3.4	Operating lease right of use assets obtained in exchange for operating lease liabilities	$	13.9	$	9.8

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, ~~2021~~2022 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, ~~2021~~2022 ("~~2021~~2022 10-K").

2. ~~Accounting Standards Update~~

~~In October 2021, the Financial Accounting Standards Board issued Accounting Standards Update 2021-08,~~ ~~Business Combinations (Topic 805) Accounting for Acquired Contract Assets and Contract Liabilities~~, which requires an acquirer to recognize and measure contract assets and liabilities in a business combination in accordance with Accounting Standards Codification Topic 606 Revenue from Contracts with Customers, rather than adjust them to fair value at the acquisition date. The Company early adopted this standard and it had no impact on the condensed consolidated financial statements.

~~3. Acquisitions~~

On July 6, 2022, the Company acquired GlideFast Holdings, LLC and affiliated entities ("GlideFast"), a ServiceNow consulting company, for $351.8 million in cash. GlideFast is part of the Commercial Segment and its results of operations are included in the consolidated results of the Company from the date of its acquisition. The purchase accounting for this acquisition remains incomplete with respect to the provisional fair value of assets acquired and liabilities assumed, as management continues to gather and evaluate information about circumstances that existed as of the acquisition date. Measurement period adjustments will be recognized prospectively within 12 months from the date of acquisition. The preliminary fair value of the identifiable intangible assets related to this acquisition totaled $102.8 million, including a trademark of $30.2 million which has an indefinite life. Other acquired identifiable intangible assets have useful lives ranging from three to nine years.

In 2021, the Company acquired three consulting services businesses for $221.3 million in cash. These acquisitions increased the Company's investment in IT consulting in its Commercial and Federal Government segments. The fair values allocated to the assets and liabilities for these acquisitions have been finalized.

4. Goodwill and Identifiable Intangible Assets

The following table summarizes the activity related to the carrying amount of goodwill by segment since December 31, ~~2020~~2021 (in millions).


		Commercial		Federal Government		Total			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
Balance as of December 31, 2021								Balance as of December 31, 2021	$	829.3	$	740.2	$	1,569.5
2022 acquisitions								2022 acquisitions	246.4		85.5		331.9
Purchase price adjustments	Purchase price adjustments	—		3.3		3.3		Purchase price adjustments	0.4		(8.5)		(8.1)
Translation adjustment	Translation adjustment	(0.4)		—		(0.4)		Translation adjustment	(1.4)		—		(1.4)
Balance as of December 31, 2021		829.3		740.2		1,569.5
2022 acquisition		246.9		—		246.9
Balance as of December 31, 2022								Balance as of December 31, 2022	1,074.7		817.2		1,891.9

Purchase price adjustments	Purchase price adjustments	0.4		(8.5)		(8.1)		Purchase price adjustments	—		1.1		1.1
Translation adjustment	Translation adjustment	(2.4)		—		(2.4)		Translation adjustment	1.0		—		1.0

Balance as of September 30, 2022		$	1,074.2	$	731.7	$	1,805.9
Balance as of June 30, 2023								Balance as of June 30, 2023	$	1,075.7	$	818.3	$	1,894.0

Approximately ~~$163.6 million and $127.2~~$250.7 million of the goodwill for the 2022 ~~and 2021~~ acquisitions ~~respectively,~~ is deductible for income tax purposes.

Acquired identifiable intangible assets consisted of the following (in millions):


			September 30, 2022						December 31, 2021								June 30, 2023						December 31, 2022
		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 - 13	$	555.9	$	299.7	$	256.2	$	493.9	$	260.2	$	233.7	Customer and contractual relationships	1 - 13	$	589.3	$	345.6	$	243.7	$	589.3	$	315.7	$	273.6
Contractor relationships		4	—		—		—		45.5		45.5		—
Contract Backlog		1 - 3	34.8		33.8		1.0		34.8		31.0		3.8

Contract backlog															Contract backlog	1 - 3	44.1		40.3		3.8		44.1		36.5		7.6
Non-compete agreements	Non-compete agreements	1 - 7	39.7		24.3		15.4		29.4		21.6		7.8		Non-compete agreements	1 - 7	41.2		28.0		13.2		41.2		25.6		15.6

			630.4		357.8		272.6		603.6		358.3		245.3				674.6		413.9		260.7		674.6		377.8		296.8
Not subject to amortization:	Not subject to amortization:														Not subject to amortization:
Trademarks	Trademarks		272.8		—		272.8		242.6		—		242.6		Trademarks		272.8		—		272.8		272.8		—		272.8
Total	Total		$	903.2	$	357.8	$	545.4	$	846.2	$	358.3	$	487.9	Total		$	947.4	$	413.9	$	533.5	$	947.4	$	377.8	$	569.6

Estimated future amortization expense follows (in millions):

Remainder of 2022 $ 17.8
2023 59.3
2024 49.8
2025 41.8
2026 35.4
Thereafter 68.5
$ 272.6

~~5. Discontinued Operations~~

On August 17, 2021, the Company sold its Oxford business to an affiliate of H.I.G. Capital for $525.0 million. Included in the nine months ended September 30, 2021, was a $218.6 million ($149.3 million net of income taxes) gain from the sale. 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 Nine Months Ended
September 30, 2021 September 30, 2021
Revenues $ 71.6 $ 324.3
Costs of services 49.0 223.0
Gross profit 22.6 101.3
Selling, general and administrative expenses 27.5 89.9
Amortization of intangible assets 0.1 0.4
Income (loss) before income taxes (5.0) 11.0
Provision (benefit) for income taxes (1.4) 1.8
Gain on sale, net of income taxes 149.3 149.3
Income from discontinued operations, net of income taxes $ 145.7 $ 158.5


Remainder of 2023	$	35.7
2024	58.1
2025	48.8
2026	41.8
2027	32.0
Thereafter	44.3
	$	260.7

During the nine months ended September 30, 2022, the Company received $9.8 million related to the finalization of the purchase price. The following table provides select cash flow information related to the Oxford business for the nine months ended September 30, 2021 (in millions):





~~Net cash provided by operating activities~~	$	~~8.2~~
~~Net cash provided by (used in) investing activities~~
~~Cash received from sale of discontinued operations~~	~~499.1~~
~~Other~~	~~(3.9)~~
	$	~~495.2~~

6.3. Long-Term Debt

Long-term debt consisted of the following (in millions):

September 30,
2022 December 31,
2021
Senior Secured Credit Facility:
Borrowings under $250 million revolving credit facility, due 2024 $ 46.0 $ —
Term B loan facility, due 2025 490.8 490.8
Unsecured Senior Notes, due 2028 550.0 550.0
1,086.8 1,040.8
Unamortized deferred loan costs (6.0) (6.9)
$ 1,080.8 $ 1,033.9


	June 30, 2023		December 31, 2022
Senior Secured Credit Facility:
Borrowings under $460 million revolving credit facility, due November 2024	$	—	$	31.5
Term B loan facility, due April 2025	490.8		490.8

Unsecured Senior Notes, due May 2028	550.0		550.0
	1,040.8		1,072.3
Unamortized deferred loan costs	(5.1)		(5.7)
	$	1,035.7	$	1,066.6

Senior Secured Credit Facility — The senior secured credit facility (the "facility") consists of a term B loan and a ~~$250.0~~$460.0 million revolving credit ~~facility.~~facility (the "revolver"). Borrowings under the term B loan bear interest at ~~LIBOR~~the secured overnight financing rate plus a 10 basis points adjustment ("SOFR") plus 1.75 percent, or the bank’s base rate plus 0.75 percent. Borrowings under the revolver bear interest at ~~LIBOR~~SOFR 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. There are no required minimum payments on the facility. The revolver is limited to a maximum ratio of senior secured debt to ~~trailing 12-months~~trailing-twelve-months of lender-defined consolidated EBITDA of 3.75 to 1, which was ~~0.96~~0.91 to 1 at ~~September~~June 30, ~~2022.~~2023. The facility is secured by substantially all of the Company's assets and includes various restrictive covenants. At ~~September~~June 30, ~~2022,~~2023, the Company was in compliance with its debt covenants. In July 2021, the Company amended its facility to, among other things, permit the sale of its Oxford business and allow the net cash proceeds (approximately $0.4 billion) to be used for future acquisitions and other permitted investments. With the acquisition of GlideFast on July 6, 2022 (~~see Note 3. Acquisitions) and other investments of the net cash proceeds, no debt prepayments were required.~~

Unsecured Senior Notes — The Company has $550.0 million of unsecured senior notes, which bear interest at 4.625 percent payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and are subordinate to the senior secured credit facility. These notes also contain certain customary limitations including, the Company's ability to incur additional indebtedness, engage in mergers and acquisitions, transfer or sell assets and make certain distributions.

7.4. Commitments and Contingencies

The Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of ~~business.~~business, and collective class and Private Attorneys General Act ("PAGA") actions alleging violations of wage and hour laws. The Company does not believe that the disposition of matters that are pending or asserted will have a material effect on its consolidated financial statements.

5. 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.

9.6. 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 Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Income from continuing operations $ 71.1 $ 66.3 $ 211.3 $ 166.4
Income from discontinued operations, net of income taxes 2.1 145.7 1.2 158.5
Net income $ 73.2 $ 212.0 $ 212.5 $ 324.9
Weighted-average number of common shares outstanding — basic 50.1 52.7 50.9 53.0
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 50.7 53.4 51.6 53.7
Basic earnings per share:
Continuing operations $ 1.42 $ 1.26 $ 4.15 $ 3.14
Discontinued operations 0.04 2.76 0.02 2.99
$ 1.46 $ 4.02 $ 4.17 $ 6.13
Diluted earnings per share:
Continuing operations $ 1.40 $ 1.24 $ 4.09 $ 3.10
Discontinued operations 0.04 2.73 0.02 2.95
$ 1.44 $ 3.97 $ 4.11 $ 6.05


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Income from continuing operations	$	60.1	$	72.6	$	109.6	$	140.2
Loss from discontinued operations, net of income taxes	—		(0.1)		—		(0.9)
Net income	$	60.1	$	72.5	$	109.6	$	139.3

Weighted-average number of common shares outstanding — basic	49.0		51.0		49.1		51.3
Dilutive effect of common share equivalents	0.2		0.6		0.4		0.7
Weighted-average number of common shares and share equivalents outstanding — diluted	49.2		51.6		49.5		52.0

Basic earnings per share:
Continuing operations	$	1.23	$	1.42	$	2.23	$	2.73
Discontinued operations	—		—		—		(0.01)
	$	1.23	$	1.42	$	2.23	$	2.72
Diluted earnings per share:
Continuing operations	$	1.22	$	1.41	$	2.21	$	2.70
Discontinued operations	—		—		—		(0.01)
	$	1.22	$	1.41	$	2.21	$	2.69

109

~~10.~~7. Segment Reporting

ASGN provides ITinformation technology ("IT") services and professional solutions, including technology and creative digital marketing, ~~services~~ across the commercial and government sectors. ASGN operates through ~~its~~two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing and permanent placement services primarily to large enterprises and Fortune 1000 companies. The Federal Government ~~segments.~~Segment provides mission-critical solutions to the Department of Defense, the intelligence community and federal civilian agencies. Virtually all of the Company's revenues are generated in the United States.

The Commercial Segment provides IT services and solutions, and creative digital marketing services to Fortune 1000 and mid-market clients across the United States, Canada and 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 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 Nine Months Ended
September 30, September 30,
2022 2021 2022 2021
Commercial
Revenues $ 900.0 $ 774.9 $ 2,583.5 $ 2,136.7
Gross profit 297.8 251.1 852.1 678.1
Operating income 108.7 98.5 319.6 258.8
Depreciation 5.0 3.5 12.0 10.4
Amortization 9.9 7.3 21.1 18.6
Federal Government
Revenues $ 297.9 $ 298.9 $ 847.2 $ 819.0
Gross profit 61.1 57.6 177.4 150.6
Operating income 23.0 23.3 66.4 56.8
Depreciation 1.3 2.3 4.2 6.8
Amortization 8.0 8.6 24.2 21.3
Consolidated
Revenues $ 1,197.9 $ 1,073.8 $ 3,430.7 $ 2,955.7
Gross profit 358.9 308.7 1,029.5 828.7
Operating income 108.4 100.1 319.1 255.4
Depreciation 7.2 7.1 19.5 21.7
Amortization 17.9 15.9 45.3 39.9
_______
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.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2023		2022		2023		2022
Commercial
Revenues	$	811.3	$	850.6	$	1,643.4	$	1,683.5
Gross profit	260.9		281.7		523.3		554.3
Operating income	91.7		106.0		175.6		211.0
Depreciation	4.9		3.5		9.5		7.1
Amortization	8.7		5.6		17.5		11.3
Federal Government
Revenues	$	319.6	$	291.2	$	616.3	$	549.3
Gross profit	65.4		62.3		129.4		116.3
Operating income	25.1		25.7		47.7		42.7
Depreciation	1.5		1.4		2.9		2.9
Amortization	9.2		7.9		18.5		16.2
Consolidated
Revenues	$	1,130.9	$	1,141.8	$	2,259.7	$	2,232.8
Gross profit	326.3		344.0		652.7		670.6
Operating income	97.9		110.1		182.1		210.7
Depreciation	7.0		6.1		13.8		12.3
Amortization	17.9		13.5		36.0		27.4
_______
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.

1110

~~Substantially all~~The majority 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. ~~Virtually all of the Company's revenues are recognized over time.~~ Revenues by segment and by type are as follows (in millions):


		Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
		September 30,				September 30,				June 30,				June 30,
		2022		2021		2022		2021				2023		2022		2023		2022
Commercial	Commercial										Commercial
Assignment	Assignment	$	631.4	$	587.3	$	1,888.0	$	1,687.2		Assignment	$	530.2	$	628.4	$	1,090.6	$	1,256.6
Consulting	Consulting	268.6		187.6		695.5		449.5			Consulting	281.1		222.2		552.8		426.9
		900.0		774.9		2,583.5		2,136.7				811.3		850.6		1,643.4		1,683.5
Federal Government	Federal Government										Federal Government
Firm-fixed-price	Firm-fixed-price	91.7		94.5		242.9		217.0			Firm-fixed-price	97.8		74.3		190.6		151.2
Time and materials	Time and materials	113.7		106.0		338.5		296.9			Time and materials	129.2		117.8		251.1		224.8
Cost reimbursable	Cost reimbursable	92.5		98.4		265.8		305.1			Cost reimbursable	92.6		99.1		174.6		173.3
		297.9		298.9		847.2		819.0				319.6		291.2		616.3		549.3
Consolidated	Consolidated	$	1,197.9	$	1,073.8	$	3,430.7	$	2,955.7		Consolidated	$	1,130.9	$	1,141.8	$	2,259.7	$	2,232.8

Federal Government Segment revenues by customer type are as follows (in millions):


		Three Months Ended				Nine Months Ended				Three Months Ended				Six Months Ended
		September 30,				September 30,				June 30,				June 30,
		2022		2021		2022		2021				2023		2022		2023		2022
Department of Defense and Intelligence Agencies	Department of Defense and Intelligence Agencies	$	165.5	$	166.0	$	458.4	$	450.8		Department of Defense and Intelligence Agencies	$	155.0	$	159.3	$	287.9	$	292.9
Federal Civilian	Federal Civilian	124.8		112.1		361.9		303.5			Federal Civilian	155.7		120.7		308.8		237.1
Other	Other	7.6		20.8		26.9		64.7			Other	8.9		11.2		19.6		19.3
		$	297.9	$	298.9	$	847.2	$	819.0			$	319.6	$	291.2	$	616.3	$	549.3

~~11.~~8. 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 accompanying condensed consolidated balance sheet at September 30, 2022 was $1.1 billion (see~~ ~~Note 6. Long-Term Debt~~) and its fair value was $1.0 billion. The fair value for the term B loan and senior notes was determined using quoted prices in active markets for identical liabilities (Level 1 inputs) and the carrying value of the revolving credit facility approximates its fair value.

Certain acquisition agreements contained provisions requiring the Company to pay contingent consideration in the event the underlying acquired business achieved certain specified earnings results or obtained certain contract awards. Contingent consideration liabilities had a fair value of $15.1 million at December 31, 2021, of which $8.1 million was paid and the remaining amount was reduced to zero as a measurement period adjustment, with no effect on results of operations. There were no contingent consideration liabilities at September 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 nine~~ months ended ~~September~~June 30, ~~2022.~~2023.

~~12. Subsequent Events~~

~~On October 3, 2022, the Company acquired Iron Vine Security, LLC ("Iron Vine") a leading cybersecurity company that designs, implements and executes cybersecurity programs for federal customers.~~ The ~~results~~carrying amount of ~~operations of Iron Vine will be included~~long-term debt recorded in the ~~Federal Government Segment from~~Company’s accompanying condensed consolidated balance sheet at June 30, 2023 was $1.0 billion (see Note 3. Long-Term Debt) and its fair value, determined using quoted prices in active markets for identical liabilities (Level 1 inputs), was slightly less than the ~~date of acquisition.~~

carrying amount.

1211

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 those described in Item 1A. Risk Factors of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 ("~~2021~~2022 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 ITinformation technology ("IT") services and professional solutions, including technology and creative digital marketing, ~~services~~ across the commercial and government sectors. ~~ASGN operates~~We operate through ~~its~~two segments, Commercial and Federal Government. The Commercial Segment, which is the largest segment, provides consulting, creative digital marketing and permanent placement services primarily to large enterprises and Fortune 1000 companies. Our Federal Government ~~segments.~~Segment provides mission-critical solutions to the Department of Defense, the intelligence community and federal civilian agencies. Virtually all of the Company's revenues are generated in the United States.

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2022~~2023 COMPARED WITH THE THREE MONTHS ENDED ~~SEPTEMBER~~JUNE 30, ~~2021~~2022

Revenues

Revenues for the quarter were ~~$1.2~~$1.1 billion, ~~up 11.6~~down 1.0 percent over the ~~third~~second quarter of last year. Revenues for the quarter included approximately ~~$34.2~~$52.9 million from businesses acquired in the last ~~twelve~~12 months. Excluding the contributions from these recent acquisitions, revenue ~~growth was 8.4~~declined 5.6 percent year-over-year. The table below shows our revenues by segment for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 (in millions).


								% of Total												% of Total
		2022		2021		Change			2022		2021		Change			2023		2022			Change		2023		2022		Change

Commercial	Commercial														Commercial
Assignment	Assignment	$	631.4	$	587.3	7.5	%		52.7	%	54.7	%	-2.0	%	Assignment	$	530.2	$	628.4		(15.6	%)	46.8	%	55.0	%	(8.2	%)
Consulting	Consulting	268.6		187.6		43.2	%		22.4	%	17.5	%	4.9	%	Consulting	281.1		222.2			26.5	%	24.9	%	19.5	%	5.4	%
		900.0		774.9		16.1	%		75.1	%	72.2	%	2.9	%		811.3		850.6			(4.6	%)	71.7	%	74.5	%	(2.8	%)
Federal Government	Federal Government	297.9		298.9		-0.3	%		24.9	%	27.8	%	-2.9	%	Federal Government	319.6		291.2			9.8	%	28.3	%	25.5	%	2.8	%
Consolidated	Consolidated	$	1,197.9	$	1,073.8	11.6	%		100.0	%	100.0	%			Consolidated	$	1,130.9	$	1,141.8		(1.0	%)	100.0	%	100.0	%

Commercial Segment — Revenues from our Commercial Segment ~~(75.1~~(71.7 percent of total revenues) were ~~up 16.1~~down 4.6 percent ~~over the third quarter of last year.~~year-over-year. Assignment revenues were ~~$631.4~~$530.2 million ~~(70.2~~(65.4 percent of the segment's revenues), down 15.6 percent year-over-year. Consulting services revenues were $281.1 million (34.6 percent of the segment's revenues), up ~~7.5 percent year-over-year. Consulting services revenues were $268.6 million (29.8 percent of the segment's revenues), up 43.2~~26.5 percent year-over-year. Excluding the contribution of ~~$25.1~~$27.7 million from GlideFast, ~~which was acquired on July 6, 2022,~~ consulting services revenues were up ~~29.8 percent year-over-year.~~14.1 percent.

From an industry perspective, Commercial revenues fall into five broad industry verticals: (i) Financial Services, (ii) Consumer and ~~Industrials,~~Industrial, (iii) ~~Healthcare, (iv)~~ Technology, Media and Telecom ("TMT"), (iv) Healthcare, and (v) Business and Government Services. ~~Four out of our five industry~~Our Consumer and Industrial and Healthcare verticals ~~achieved double-digit~~saw single-digit revenue growth ~~over the third quarter of last year, while our~~year-over-year. The TMT, Business and Government Services, ~~vertical was slightly up over last year.~~and Financial Services verticals were down compared with the second quarter of 2022.

Within the Commercial Segment, IT services and solutions ~~revenues,~~division, which accounted for ~~84.1~~86.0 percent of the segment's revenues in the quarter, were ~~up 18.3~~down 1.3 percent ~~over the third quarter of last year driven by double-digit growth in consulting services, the contribution from GlideFast~~year-over-year. The segment's more discretionary and ~~high single-digit growth in IT staffing services. Creative~~cyclical divisions, creative digital marketing and permanent placement, ~~revenues, which combined~~ accounted for ~~15.9~~14.0 percent of the segment's revenues ~~in the quarter,~~and were ~~up 6.1 percent over the third quarter of last year.~~down 21.0 percent.

Federal Government Segment — Revenues from our Federal Government Segment ~~(24.9~~(28.3 percent of revenues) were ~~down slightly year-over-year and included $9.1~~up 9.8 percent year-over-year. Excluding the contribution from Iron Vine of $25.2 million, ~~from the two businesses acquired subsequent to June 30, 2021. The third quarter of last year benefited from approximately $13.4 million in low-margin~~ revenues ~~under a web services resale program the segment elected not to renew in the third quarter of last year.~~increased by 1.1 percent.

1312

Gross Profit and Gross Margin

The table below shows gross profit and gross margin by segment for the three months ended ~~September~~June 30, ~~2022~~2023 and ~~2021~~2022 (in millions).


		Gross Profit						Gross Margin					Gross Profit								Gross Margin
		2022		2021		Change			2022		2021			Change			2023		2022			Change		2023		2022		Change

Commercial	Commercial	$	297.8	$	251.1	18.6	%		33.1	%	32.4	%		0.7	%	Commercial	$	260.9	$	281.7		(7.4	%)	32.2	%	33.1	%	(0.9	%)
Federal Government	Federal Government	61.1		57.6		6.1	%		20.5	%	19.3	%		1.2	%	Federal Government	65.4		62.3			5.0	%	20.5	%	21.4	%	(0.9	%)
Consolidated	Consolidated	$	358.9	$	308.7	16.3	%		30.0	%	28.7	%		1.3	%	Consolidated	$	326.3	$	344.0		(5.1	%)	28.9	%	30.1	%	(1.2	%)

Gross profit is comprised of revenues less costs of services, which consist primarily of compensation for our contract professionals, ~~allowable materials~~other direct costs and reimbursable out-of-pocket expenses. Consolidated gross profit was ~~up 16.3~~down 5.1 percent year-over-year on a revenue ~~growth~~decline of ~~11.6~~1.0 percent.

Gross margin was ~~30.0~~28.9 percent, ~~an expansion~~a compression of ~~130~~120 basis points ~~over~~from the ~~third~~second quarter of ~~2021.~~2022. Both ~~business~~ segments ~~and all operating divisions~~ reported ~~year-over-year expansion~~compression in gross margin. The ~~expansion~~compression in gross margin of the Commercial Segment was ~~driven by double-digit growth of its high-margin commercial consulting~~primarily due to a lower contribution from our more discretionary and cyclical permanent placement ~~services.~~and creative digital marketing revenues. The ~~expansion~~compression in gross margin of the Federal Government Segment was driven by ~~changes in business mix, including a lower contribution from cost reimbursable contracts, which carry a lower~~certain higher margin ~~than other contract types, the contribution from higher-margin businesses acquired subsequent to June 30, 2021, and the decision not to renew a low-margin web services resale program~~fixed price programs in the ~~third quarter of last~~previous year.

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 ~~$232.6~~$210.5 million ~~(19.4~~(18.6 percent of revenues), compared with ~~$192.7~~$220.4 million ~~(17.9~~(19.3 percent of revenues) in the ~~third~~second quarter of ~~2021.~~2022. This ~~increase was commensurate with the growth in the business~~decrease reflected effective expense management and ~~also included investments in headcount to support future growth.~~lower incentive compensation expense.

~~Amortization of Intangible Assets~~

~~Amortization of intangible assets was $17.9 million, up from $15.9 million in the third quarter of 2021. This increase relates to the effects of businesses acquired.~~

~~Interest Expense~~

Interest expense was $12.1 million and was comprised of $5.2 million of interest on the senior secured credit facility, $6.4 million of interest on the unsecured senior notes, and $0.5 million in amortization of deferred loan costs. The weighted-average outstanding borrowings were $1.0 billion in both periods and the weighted-average interest rate was 4.4 percent, up from 3.4 percent in the third quarter of 2021.

~~Provision for Income Taxes~~

The provision for income taxes was $25.2 million, up from $24.2 million in the third quarter of 2021. The increase was related to the growth in income before income taxes as the effective tax rate for the current quarter was slightly lower than in the third quarter of 2021.

~~Income from Continuing Operations~~

~~Income from continuing operations was $71.1 million, up from $66.3 million in the third quarter of 2021 driven by the growth in the business and the expansion of our gross margin.~~

~~Income from Discontinued Operations~~

Income from discontinued operations was $2.1 million, compared with $145.7 million in the third quarter of 2021. In the prior year, virtually all of the income from discontinued operations related to the gain, net of income taxes, on the sale of the Oxford business.

~~Net Income~~

~~Net income of $73.2 million was comprised of income from continuing operations of $71.1 million and discontinued operations of $2.1 million.~~

~~RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022 COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 2021~~

~~Revenues~~

Revenues for the first nine months of the year were $3.4 billion, up 16.1 percent year-over-year. Revenues for the nine-month period included approximately $110.7 million from businesses acquired during the last twelve months. Excluding the contributions from acquisitions, revenue growth was 12.3 percent year-over-year. The table below shows our revenues by segment for the nine months ended September 30, 2022 and 2021 (in millions).

% of Total
2022 2021 Change 2022 2021 Change
Commercial
Assignment $ 1,888.0 $ 1,687.2 11.9 % 55.0 % 57.1 % -2.1 %
Consulting 695.5 449.5 54.7 % 20.3 % 15.2 % 5.1 %
2,583.5 2,136.7 20.9 % 75.3 % 72.3 % 3.0 %
Federal Government 847.2 819.0 3.4 % 24.7 % 27.7 % -3.0 %
Consolidated $ 3,430.7 $ 2,955.7 16.1 % 100.0 % 100.0 %

~~Commercial Segment —~~ Revenues from our Commercial Segment (75.3 percent of total revenues) were up 20.9 percent over the first nine months of last year. Assignment revenues were $1.9 billion (73.1 percent of the segment's revenues), up 11.9 percent year-over-year. Consulting services revenues were $695.5 million (26.9 percent of the segment's revenues), up 54.7 percent year-over-year. Excluding the contribution of $45.8 million from GlideFast, consulting services revenues were up 44.5 percent year-over-year. All five industry verticals were up double-digits year-over-year.

Within the Commercial Segment, IT services and solutions revenues, which accounted for 83.3 percent of the segment's revenues in the first nine months of 2022, were up 20.9 percent over the same period last year driven by high growth in consulting services, the contribution from GlideFast and high single-digit growth in IT staffing services. Creative digital marketing and permanent placement revenues, which combined accounted for 16.7 percent of the segment's revenues, were up 21.1 percent over the same period last year.

~~Federal Government Segment~~ — Revenues from our Federal Government Segment (24.7 percent of revenues) were up 3.4 percent year-over-year. Revenues for the first nine months of 2022 included $64.9 million from the two businesses acquired subsequent to June 30, 2021. Last year benefited from higher spending levels on certain cost reimbursable contracts and approximately $38.6 million in 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 nine months ended September 30, 2022 and 2021 (in millions).~~

Gross Profit Gross Margin
2022 2021 Change 2022 2021 Change
Commercial $ 852.1 $ 678.1 25.7 % 33.0 % 31.7 % 1.3 %
Federal Government 177.4 150.6 17.8 % 20.9 % 18.4 % 2.5 %
Consolidated $ 1,029.5 $ 828.7 24.2 % 30.0 % 28.0 % 2.0 %

Consolidated gross profit was up 24.2 percent on revenue growth of 16.1 percent. Gross margin was 30.0 percent, an expansion of 200 basis points over the first nine months of 2021. Both segments reported expansion in gross margin. The expansion in gross margin of the Commercial Segment was driven by 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 a lower contribution from cost reimbursable contracts, which carry a lower margin than other contract types, the contribution from higher-margin businesses acquired subsequent to June 30, 2021, and the decision not to renew a low-margin web services resale program in the third quarter of last year.

~~Selling, General and Administrative Expenses~~

SG&A expenses were $665.1 million (19.4 percent of revenues), compared with $533.4 million (18.0 percent of revenues) in the first nine 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 ~~$45.3~~$17.9 million, up from ~~$39.9~~$13.5 million in the ~~first nine months~~second quarter of ~~2021.~~2022. This increase reflects amortization expense related to businesses acquired in the ~~effects~~second half of ~~businesses acquired.~~

last year.

Interest Expense

Interest expense was ~~$31.5~~$15.8 million, ~~and~~up from $10.1 million in the second quarter of 2022, primarily as a result of higher interest rates on the senior secured credit facility. Interest expense was comprised of ~~$10.9~~$8.8 million of interest on the senior secured credit facility, ~~$19.1~~$6.4 million of interest on the unsecured senior notes, and ~~$1.5~~$0.6 million in amortization of deferred loan costs. The weighted-average outstanding borrowings and interest rate in the second quarter of 2023 and 2022 were $1.0 billion and 5.8 percent, and $1.0 billion and 3.7 percent, respectively.

Provision for Income Taxes

The provision for income taxes was $22.0 million, down from $27.4 million in the second quarter of 2022 due to lower income before income taxes. The effective tax rate was 26.8 percent, down from 27.4 percent in the second quarter of 2022.

Income from Continuing Operations

Income from continuing operations was $60.1 million, down from $72.6 million in the second quarter of 2022.

Loss from Discontinued Operations

Loss from discontinued operations was $0.1 million in the second quarter of 2022.

Net Income

Net income was $60.1 million, down from $72.5 million in the second quarter of 2022.

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 2023 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2022

Revenues

Revenues for the first half of the year were $2.3 billion, up 1.2 percent year-over-year. Revenues for the period included approximately $103.3 million from businesses acquired during the last 12 months. Excluding the contributions from acquisitions, revenues declined 3.4 percent year-over-year. The table below shows our revenues by segment for the six months ended June 30, 2023 and 2022 (in millions).


							% of Total
	2023		2022		Change			2023		2022		Change

Commercial
Assignment	$	1,090.6	$	1,256.6	(13.2)	%		48.2	%	56.3	%	(8.1	%)
Consulting	552.8		426.9		29.5	%		24.5	%	19.1	%	5.4	%
	1,643.4		1,683.5		(2.4)	%		72.7	%	75.4	%	(2.7	%)
Federal Government	616.3		549.3		12.2	%		27.3	%	24.6	%	2.7	%
Consolidated	$	2,259.7	$	2,232.8	1.2	%		100.0	%	100.0	%

Commercial Segment — Revenues from our Commercial Segment (72.7 percent of total revenues) declined 2.4 percent over the first half of last year. Assignment revenues were $1.1 billion (66.4 percent of the segment's revenues), down 13.2 percent year-over-year. Consulting services revenues were $552.8 million (33.6 percent of the segment's revenues), up 29.5 percent year-over-year. Excluding the contribution of $53.6 million from GlideFast, consulting services revenues were up 16.9 percent.

Within the Commercial Segment, IT services and solutions division, which accounted for 85.7 percent of the segment's revenues in the first half of 2022, were up 0.9 percent over the same period last year driven by growth in consulting services and the contribution from GlideFast. The creative digital marketing and permanent placement divisions, which combined accounted for 14.3 percent of the segment's revenues, declined 18.2 percent.

Federal Government Segment — Revenues from our Federal Government Segment (27.3 percent of revenues) were up 12.2 percent year-over-year. Excluding the contribution from Iron Vine of $49.7 million, revenues increased by 3.2 percent.

Gross Profit and Gross Margin

The table below shows gross profit and gross margin by segment for the six months ended June 30, 2023 and 2022 (in millions).


	Gross Profit						Gross Margin
	2023		2022		Change			2023		2022		Change

Commercial	$	523.3	$	554.3	(5.6	%)		31.8	%	32.9	%	(1.1	%)
Federal Government	129.4		116.3		11.3	%		21.0	%	21.2	%	(0.2	%)
Consolidated	$	652.7	$	670.6	(2.7	%)		28.9	%	30.0	%	(1.1	%)

Consolidated gross profit declined 2.7 percent on revenue growth of 1.2 percent. Gross margin was 28.9 percent, a compression of 110 basis points over the first half of 2022. The compression mainly related to business mix, including a slightly higher mix of revenues from the Federal Government Segment, which have a lower gross margin than commercial revenues, and, within the Commercial Segment, a lower mix of creative digital marketing and permanent placement revenues, which have higher gross margins.

Selling, General and Administrative Expenses

SG&A expenses were $434.6 million (19.2 percent of revenues), compared with $432.5 million (19.4 percent of revenues) in the first six months of 2022. The decrease as a percent of revenues reflects effective expense management and lower incentive compensation expense.

Amortization of Intangible Assets

Amortization of intangible assets was $36.0 million, up from $27.4 million in the first six months of 2022. This increase reflects amortization expense related to businesses acquired in the second half of last year.

Interest Expense

Interest expense was $31.2 million and was comprised of $17.3 million of interest on the senior secured credit facility, $12.8 million of interest on the unsecured senior notes, and $1.1 million in amortization of deferred loan costs. The weighted-average outstanding borrowings were $1.0 billion in both periods and the weighted-average interest rate was ~~3.8~~5.8 percent, up from ~~3.4~~3.5 percent in the first ~~nine~~six months of ~~2021.~~2022.

Provision for Income Taxes

The provision for income taxes was ~~$76.3~~$41.3 million, updown from ~~$60.8~~$51.1 million in the first ~~nine~~six months of ~~2021. The increase related~~2022 due to ~~the growth in~~lower income before income ~~taxes as the~~taxes. The effective tax rate ~~for~~was 27.4 percent, up from 26.7 percent in the first ~~nine~~six months of ~~the year was slightly lower than the first nine months of 2021.~~2022.

Income from Continuing Operations

Income from continuing operations was ~~$211.3~~$109.6 million, updown from ~~$166.4~~$140.2 million in the first ~~nine~~six months of ~~2021 driven by the growth in the business and the expansion of our gross margin.~~2022.

Income from Discontinued Operations

~~Income~~Loss from discontinued operations was ~~$1.2 million, compared with $158.5~~$0.9 million in the first ~~nine~~six months of ~~2021. In the prior year, virtually all of the income from discontinued operations related to the gain, net of income taxes, on the sale of the Oxford business.~~2022.

Net Income

Net income of ~~$212.5~~$109.6 million, ~~was comprised~~down from $139.3 million in the first six months of ~~income from continuing operations of $211.3 million and discontinued operations of $1.2 million.~~2022.

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.~~terminations ("Bookings"). 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~~Bookings to ~~the~~ commercial consulting revenues for a specified period. The average duration of commercial consulting projects is one year.


		Three Months Ended				Nine Months Ended				Trailing-Twelve-Months Ended					Three Months Ended				Trailing-Twelve-Months Ended
		September 30,				September 30,				September 30,					June 30,				June 30,
(Dollars in millions)	(Dollars in millions)	2022		2021		2022		2021		2022		2021		(Dollars in millions)	2023		2022			2023		2022
Bookings	Bookings	$	254.3	$	185.7	$	892.4	$	585.4	$	887.2	$	558.9	Bookings	$	357.3	$	340.6		$	1,303.3	$	1,048.7
Book-to-Bill Ratio	Book-to-Bill Ratio	0.9 to 1		1.0 to 1		1.3 to 1		1.3 to 1		1.3 to 1		1.3 to 1		Book-to-Bill Ratio	1.3 to 1		1.5 to 1			1.2 to 1		1.3 to 1

Federal Government Segment Metrics

Contract backlog for our Federal Government Segment represents the estimated amount of future revenues to be recognized under awarded contracts, including task orders and ~~options.~~options, at a point in time ("Contract Backlog"). These estimates are subject to change and may be affected by the execution of new contracts, the extension or early termination of existing contracts, the non-renewal or completion of current contracts and adjustments to estimates for previously included contracts. ~~Changes in~~The timing of the ~~funded contract backlog~~execution of new contracts and other changes are ~~also~~ affected by the funding cycles of the ~~government.~~

(Dollars in millions) September 30,
2022 December 31,
2021 September 30,
2021
Funded Contract Backlog $ 548.0 $ 529.2 $ 558.3
Negotiated Unfunded Contract Backlog 2,564.6 2,472.0 2,575.1
Contract Backlog $ 3,112.6 $ 3,001.2 $ 3,133.4
Contract Backlog Coverage Ratio 2.8 to 1 2.6 to 1 2.6 to 1

~~___~~

government and can vary from quarter to quarter. New contract awards are the estimated amount of future revenues to be recognized under contracts awarded during a specified period, including adjustments to estimates for contracts awarded in previous periods (“New Contract Awards”). Due to variability, New Contract Awards are presented on a trailing-twelve-months (“TTM”) basis. The book-to-bill ratio for our Federal Government Segment is the ratio of New Contract Awards to revenues for a specified period. Contract backlog coverage ratio is calculated as total ~~contract backlog~~Contract Backlog divided by ~~trailing-twelve-months of Federal Government Segment~~TTM revenues.

The book-to-bill ratio for our Federal Government Segment was 1.0 to 1 and 1.1 to 1 for the trailing-twelve-months ended September 30, 2022 and 2021, respectively. 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.


	TTM Ended June 30,
(Dollars in millions)	2023		2022
New Contract Awards	$	1,139.4	$	960.1
Book-to-Bill Ratio	0.9 to 1		0.9 to 1


(Dollars in millions)	June 30, 2023		December 31, 2022		June 30, 2022
Funded Contract Backlog	$	595.3	$	582.3	$	455.5
Negotiated Unfunded Contract Backlog	2,516.6		2,681.2		2,395.2
Contract Backlog	$	3,111.9	$	3,263.5	$	2,850.7

Contract Backlog Coverage Ratio	2.6 to 1		2.9 to 1		2.5 to 1

1615

Liquidity and Capital Resources

Our working capital, which is current assets less current liabilities, at ~~September~~June 30, ~~2022~~2023 was ~~$627.7~~$555.7 million, and our cash and cash equivalents were ~~$211.2~~$93.8 million. Our cash flows from operating activities have been our primary source of liquidity and have been sufficient to meet our working capital and capital expenditure needs. At ~~September~~June 30, ~~2022,~~2023, we had ~~$204.0 million available~~full availability under the ~~$250.0~~$460.0 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 ~~$232.5~~$193.0 million for the first ~~nine~~six months of ~~2022,~~2023, compared with ~~$275.9~~$144.4 million in the same period of ~~2021. This change~~2022. The year-over-year increase mainly ~~related~~relates to ~~an increase~~changes in accounts receivable and accounts receivable days sales ~~outstanding and timing of certain payments.~~outstanding.

Net cash used in investing activities was ~~$366.6~~$23.5 million for the first ~~nine~~six months of ~~2022~~2023 and included ~~$351.8~~$22.9 million for capital expenditures. Net cash used in investing activities in the ~~acquisition~~first six months of ~~GlideFast~~the prior year was $6.1 million and ~~$27.0~~included $18.4 million for capital expenditures, partially offset by $9.8 million in cash received related to the finalization of the purchase price for the sale of the Oxford business. Net cash provided by investing activities in the first nine months of last year was $249.2 million and was comprised of $499.1 million from the sale of ~~Oxford, partially offset by $224.4 million for acquisitions and $25.6 million for capital expenditures.~~a business.

Net cash used in financing activities was ~~$183.7~~$146.0 million for the first ~~nine~~six months of ~~2022, compared with net cash used of $119.4 million in the same period of 2021. Net cash used in financing activities for the first nine months of 2022 was primarily comprised of $227.6~~2023 and included $106.4 million to repurchase the Company's common stock, ~~partially offset by $46.0 million~~as well as net repayments of borrowings under the revolving credit ~~facility. There were $118.4 million of common stock repurchases~~facility totaling $31.5 million. Net cash used in financing activities in the first ~~nine~~six months of ~~last year.~~the prior year was $177.1 million and primarily consisted of $168.1 million for stock repurchases.

~~Senior Secured Credit Facility~~ ~~— The~~For details on the Company’s senior secured facility, comprised of a revolving credit facility ~~consists of a~~and term B loan, and a $250.0 million revolving credit facility. At September 30, 2022, the Company had $490.8 million outstanding under the term B loan and $46.0 million outstanding under the 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 revolver 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. There are no required minimum principal payments on the facility until maturity. The facility is secured by substantially all of the Company's assets and includes various restrictive covenants. At September 30, 2022, the Company was in compliance with its debt covenants. In July 2021, the Company amended its facility to, among other things, permit the sale of its Oxford business and allow the net cash proceeds (approximately $0.4 billion) to be used for future acquisitions and other permitted investments. With the acquisition of GlideFast on July 6, 2022 (unsecured senior notes, see ~~see~~ Note 3. ~~Acquisitions to the condensed consolidated financial statements~~ Long-Term Debt in Part I Item 1.~~) and other investments of the net cash proceeds, no debt prepayments were required.~~

~~Unsecured Senior Notes~~ — The Company has $550.0 million of unsecured senior notes due in 2028, which bear interest at 4.625 percent payable semiannually in arrears on May 15 and November 15. These notes are unsecured obligations and subordinate to the senior secured credit facility. These 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.

Recent Accounting Pronouncements

~~See “Note 2 - Accounting Standards Update” in~~There have been no recent accounting pronouncements that significantly impact the ~~notes to the condensed consolidated financial statements in Part I, Item 1.~~Company.

Critical Accounting Policies

There were no significant changes to our critical accounting policies and estimates during the ~~third~~second quarter of ~~2022~~2023 compared with those disclosed in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations of our ~~2021~~2022 10-K.

Commitments

There were no material changes to the significant commitments or contractual obligations that were disclosed in our ~~2021~~2022 10-K.

Item 3 — Quantitative and Qualitative Disclosures about Market Risks

With respect to our quantitative and qualitative disclosures about interest rates risks, there have been no material changes to the information included in our ~~2021~~2022 10-K. A hypothetical 100 basis-point change in interest rates on variable-rate debt would have resulted in an interest expense fluctuation of approximately ~~$5.4~~$4.9 million based on ~~$536.8~~$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 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 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 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 ~~September~~June 30, ~~2022~~2023 that have materially affected, or are reasonably likely to affect, our internal control over financial reporting.

1816

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.~~business, and collective class and PAGA actions alleging violations of wage and hour laws. 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 ~~2021~~2022 10-K.

Item 2 — Unregistered Sales of Securities and Use of Proceeds

On ~~December 9, 2021, the Board of Directors approved a two-year stock repurchase program under which the Company may repurchase up to $350.0 million of its common stock. On July 27, 2022,~~April 24, 2023, the Company's Board of Directors approved a new stock repurchase program under which the Company may repurchase ~~up to $400.0~~$500.0 million of its common stock over the ~~next~~following two ~~years.~~years and this replaces the previous program. Under terms of ~~the~~this 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 superseded and replaced any remaining availability under the Company's previous $350.0 million stock repurchase program.~~

The Company's repurchases of its common stock during the three months ended ~~September~~June 30, ~~2022~~2023 are shown in the table below.

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)
July 286,580 $ 92.85 286,580 $ 398.5
August 161,303 $ 102.68 161,303 $ 381.9
September 145,456 $ 92.88 145,456 $ 368.4
Total 593,339 $ 95.53 593,339 $ 368.4


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	58,399	$	71.50	58,399	$	495.8
May	504,914	$	67.34	504,914	$	461.8
June	292,842	$	71.66	292,842	$	440.8
Total	856,155	$	69.10	856,155	$	440.8

In connection with our stock-based compensation plans, during the three months ended ~~September~~June 30, ~~2022, 17,490~~2023, 125,625 shares of our common stock with an aggregate value of ~~$1.6~~$10.0 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.~~(c) During the three months ended June 30, 2023, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

1917

Item 6 — Exhibits

INDEX TO EXHIBITS


Number		Description
3.1		Amended and Restated Certificate of Incorporation of On Assignment, Inc., effective June 23, 2014 (incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on June 25, 2014)
3.2		Certificate of Amendment of Amended and Restated Certificate of Incorporation of On Assignment, Inc. effective April 2, 2018 (incorporated by reference from Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the SEC on March 16, 2018)
3.3		~~Fourth~~Fifth Amended and Restated Bylaws of ASGN Incorporated, effective ~~March 18, 2021~~December 7, 2022 (incorporated by reference from Exhibit ~~3.3~~3.1 to the Company's ~~Quarterly~~Current Report on Form ~~10-Q~~8-K filed with the SEC on ~~August 9, 2021)~~December 13, 2022)
4.1		Specimen Common Stock Certificate (incorporated by reference from an exhibit to the Company's Registration Statement on Form S-1 (File No. 33-50646) declared effective on September 21, 1992) (P)
10.1*		~~Employment Agreement,~~ ~~effective~~ ~~as of January 3~~1 ~~, 2022, by and between~~ ~~the Company~~ ~~and Marie L. Perry~~
31.1*		Certification of Theodore S. Hanson,, Chief Executive Officer,, pursuant to Rule 13a-14(a) or 15d-14(a)
31.2*		Certification of Marie L. Perry, Chief Financial Officer,, pursuant to Rule 13a-14(a) or 15d-14(a)
32.1*		Certification of Theodore S. Hanson, Chief Executive Officer,, pursuant to 18 U.S.C. Section 1350
32.2*		Certification of Marie L. Perry, Chief Financial Officer,, pursuant to 18 U.S.C. Section 1350
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.

2018

SIGNATURES

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.


	ASGN Incorporated

Date: ~~November 4, 2022~~August 2, 2023	By:	/s/ Marie L. Perry
		Marie L. Perry
		Executive Vice President and Chief Financial Officer
		(Principal Financial Officer and Duly Authorized Officer)


Date: ~~November 4, 2022~~August 2, 2023	By:	/s/ Rose L. Cunningham
		Rose L. Cunningham
		Vice President, ~~Finance~~Chief Accounting Officer and ~~Corporate~~ Controller

2119


Remainder of 2022	$	17.8
2023	59.3
2024	49.8
2025	41.8
2026	35.4
Thereafter	68.5
	$	272.6


	Three Months Ended		Nine Months Ended
	September 30, 2021		September 30, 2021
Revenues	$	71.6	$	324.3
Costs of services	49.0		223.0
Gross profit	22.6		101.3
Selling, general and administrative expenses	27.5		89.9
Amortization of intangible assets	0.1		0.4


Income (loss) before income taxes	(5.0)		11.0
Provision (benefit) for income taxes	(1.4)		1.8

Gain on sale, net of income taxes	149.3		149.3
Income from discontinued operations, net of income taxes	$	145.7	$	158.5