ASGN Incorporated Q4 2019 Earnings Release Supplemental ...

1© 2019 ASGN Incorporated. All rights reserved.

ASGN Incorporated Q4 2019 Earnings Release

Supplemental Materials

ASGN Incorporated. All rights reserved.

© 2020 ASGN Incorporated. All rights reserved.

2

Safe Harbor

Certain statements made in this presentation are “forward-looking statements” within the

meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and involve a

high degree of risk and uncertainty. Forward looking statements include statements regarding

our anticipated financial and operating performance.

All statements in this presentation, other than those setting forth strictly historical information,

are forward-looking statements. Forward-looking statements are not guarantees of future

performance, and actual results might differ materially. In particular, we make no assurances

that the estimates of revenues, gross margin, SG&A, amortization, effective tax rate, net

income, diluted shares outstanding, contract backlog, book-to-bill ratio, Adjusted EBITDA,

Adjusted Net Income, and related per share amounts (as applicable) set forth below will be

achieved. Factors that could cause or contribute to such differences include actual demand for

our services, our ability to attract, train and retain qualified staffing consultants, our ability to

remain competitive in obtaining and retaining clients, the availability of qualified contract

professionals, management of our growth, continued performance and improvement of our

enterprise-wide information systems, our ability to manage our litigation matters, the successful

integration of our acquired subsidiaries, and other risks detailed from time to time in our reports

filed with the SEC, including our Annual Report on Form 10-K for the year ended December 31,

2018, as filed with the SEC on March 1, 2019 and our Quarterly Reports on Form 10-Q for the

quarters ended March 31,2019, June 30, 2019 and September 30, 2019 as filed with the SEC

on May 10, 2019, August 8, 2019 and November 8, 2019. We specifically disclaim any intention

or duty to update any forward-looking statements contained in this presentation.


Reasons for Presentation of Operating Metrics

3

Operating metrics are intended to enhance the overall understanding of our business and our

current financial performance. These operating metrics might not be calculated in the same

manner as, and thus might not be comparable to, similarly titled metrics reported by other

companies.

Contract backlog for our ECS segment represents the estimated amount of future revenues to

be recognized under negotiated contracts and task orders. Book-to-bill ratio for our ECS

segment is calculated as the sum of the change in total backlog during the quarter plus

revenues for the quarter, divided by revenues for the quarter. The operating metrics for the

Apex and Oxford segments are calculated as follows: assignment revenue hours worked are

billable hours for work performed by contract professionals in the quarter; average number of

staffing consultants are the sales and recruiting personnel employed for the quarter; gross

profit per staffing consultant is gross profit for the quarter divided by the average number of

staffing consultants; average assignment revenue per hour is reported assignment revenue in

the quarter divided by total assignment revenue hours worked in the quarter.


International

95.6% of Consolidated Revenues 4.4% of Consolidated Revenues

Strategic Acquisitions

$116.4MDHA on 1/25/2019

Intersys on 10/17/2019

Debt Payment

$83.2MYear-to-date 12/31/2019

Q4 2019 Q4 2018Assignment 74.1% 77.5%

Perm Placement 3.1% 3.8%

ECS 22.8% 18.7%

Free Cash Flow

$280.5MYear-to-date 12/31/2019

Q4 2019 Q4 2018GAAP $0.74 $0.86

Adjusted $1.28 $1.14

Avg. Assignment Revenue Per Hour Worked

Assignment Revenue Hours

Worked1

-1.1%

11.1M

-2.3%

2,583

Avg. Staffing Consultants

Gross Profit Per Staffing Consultant

$97K

5.2%6.6%

$68.36

4

Q4 2019 Consolidated Performance

EPS (DILUTED)

STRONG FREE CASH FLOW GENERATION

CONSOLIDATED REVENUES

$923.7M

10.7% Pro Forma Growth

34.8%

SIA ‘19/’18 Growth Estimates:

Industry: 4%

IT: 4% Q4 2019$116.2M

11.3%

GROSS MARGIN REVENUE MIX

Q4 2019 Q4 201828.2% 29.2%

Q4 2018$109.1M

11.7%

This presentation includes non-GAAP financial measures. A description of these non-GAAP financial measures and the reconciliation from the comparable GAAP measures

to the non-GAAP measures are included in our earnings releases.

GEOGRAPHIC FOOTPRINT

Domestic

APEX & OXFORD SEGMENTS SELECT OPERATING METRICS (Y/Y Growth) ECS SELECT OPERATING METRICS

ContractBacklog

$2.6B

Book-to-Bill Ratio

0.5

BillableProfessionals

2,711 $979.9M $45.3M

CONSOLIDATED REVENUES

$1,025.2M

10.3%

SIA ‘19/’18 Growth Estimates:

Industry: 3%

IT: 3%

Select Financial Metrics

ADJUSTED EBITDA

Share Repurchases

$20.0M(324,373 Shares)

Year-to-date 12/31/2019

1 See slide 6 for additional information.


Q4 2019 Segment Performance

5

ContractBacklog

Revenues byContract Type

Revenues byCustomer

$2.6B

CONSOLIDATED REVENUESREVENUES

$641.3M62.6% of Consolidated

Revenues

GROSS MARGIN

29.7%

6.1% $150.4M14.6% of Consolidated

Revenues

GROSS MARGIN

39.6%

-0.6%

ETURNING CASFLOW TO INVESTORS

-3.1%-7.7%

APEX OXFORD


-0.8%

9.9M


Worked

0.6%

1,744



Worked


GP Per Staffing

Consultant

$109K


GP Per Staffing

Consultant

4.3%7.3%

$63.54 $71K$107.281.2M839

SELECT OPERATING METRICS (Y/Y Growth)

Mission critical IT skills and solutions

4.4% 4.9%

SERVICE OFFERINGS

Clinical and Scientific skills and solutions

Creative/Digital skills and solutions

High-end IT and Engineering skills and solutions

Permanent Placement solutions

Clinical and Scientific skills and solutions in Europe

ECS $233.5M22.8% of Consolidated

Revenues

GROSS MARGIN

16.8%

34.3%

APEX OXFORD ECS

Critical Government IT services and solutions

Infrastructure

Agile Software & Cloud Solutions

Advanced Science & Engineering

ECSOXFORDAPEX


Q1 2020 Financial Estimates and Key Takeaways

6

1 Does not include the “Cash Tax Savings on Indefinite-lived Intangible Assets.” These savings total $7.1 million each quarter, or $0.13 per diluted share, and represent the economic value of the tax deduction that ASGN receives from

the amortization of goodwill and trademarks.2 Stock-based compensation expense of $9.0 million, depreciation of $8.1 million in SG&A expenses and depreciation of $1.4 million in costs of services are added back in the determination of Adjusted EBITDA..

(In millions, except per share amounts)

Low High Mid-Point

Revenues 990.0$ 1,000.0$ 995.0$

Y-Y growth rate 7.2% 8.3% 7.7%

Gross Margin 28.1% 28.4% 28.3%

SG&A Expenses 196.7 197.5 197.1

Amortization of Intangible Assets 12.2 12.2 12.2

Net Income:

GAAP 42.3$ 45.9$ 44.1$

Adjusted1 54.4$ 58.1$ 56.3$

EPS (Diluted):

GAAP 0.79$ 0.86$ 0.82$

Adjusted1 1.02$ 1.09$ 1.05$

Effective Tax Rate 27.1% 27.1% 27.1%

Adjusted EBITDA2 100.0$ 105.0$ 102.5$

Adjusted EBITDA Margin 10.1% 10.5% 10.3%

Diluted Shares 53.5 53.5 53.5


7

Apex & Oxford Segments Business & Billable Days

1 Business days are weekdays less observable holidays: New Year’s Day, Memorial Day, Independence Day, Labor Day, Veteran’s Day, Thanksgiving Day, Day after Thanksgiving and Christmas.2 Besides weekends and holidays, Billable Days consider other factors, such as the day of the week a holiday occurs and additional time taken off around holidays.

Q1 Q2 Q3 Q4 Full Year

Business Days1

2020 64.00 64.00 64.00 62.00 254.00

2019 63.00 64.00 64.00 62.00 253.00

2018 64.00 64.00 63.00 62.00 253.00

2020/19 1.00 - - - 1.00

2019/18 -1.00 - 1.00 - -

Billable Days2

2020 Est. 63.00 63.75 64.00 60.50 251.25

2019 62.00 64.00 63.00 60.50 249.50

2018 63.00 64.00 62.50 60.50 250.00

2020/19 1.00 -0.25 1.00 - 1.75

2019/18 -1.00 - 0.50 - -0.50

ASGN Incorporated 26745 Malibu Hills Road

Calabasas, CA 91301

818.878.7900

asgn.com

ASGN Incorporated Q4 2019 Earnings Release Supplemental ...

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