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8-K - FORM 8-K - ROBERT HALF INTERNATIONAL INC.d378324d8k.htm

Exhibit 99.1

FOR IMMEDIATE RELEASE

 

   Contact:   

M. Keith Waddell

Vice Chairman, President and

Chief Financial Officer

(650) 234-6000

ROBERT HALF INTERNATIONAL REPORTS SECOND-QUARTER FINANCIAL RESULTS

U.S. Staffing Revenue Up 17 Percent on Continued Demand for Skilled Talent

MENLO PARK, California, July 24, 2012 — Robert Half International Inc. (NYSE symbol: RHI) today reported revenues and earnings for the second quarter ended June 30, 2012.

For the quarter ended June 30, 2012, net income was $45.3 million, or $.32 per share, on revenues of $1.03 billion. Net income and income per share this quarter were reduced by $8.1 million, or $.06 per share, related to a nonrecurring litigation settlement and the resolution of certain tax matters disclosed in the company’s July 5, 2012, Form 8-K filing. Net income for the prior year’s second quarter was $36.4 million, or $.25 per share, on revenues of $938.0 million.

For the six months ended June 30, 2012, net income was $93.7 million, or $.67 per share, on revenues of $2.04 billion. For the six months ended June 30, 2011, net income was $63.1 million, or $.43 per share, on revenues of $1.82 billion.

“Demand for our specialized staffing and consulting services remained strong during the quarter, particularly in our U.S. staffing operations, which grew 17 percent versus the prior year,” said Harold M. Messmer, Jr., chairman and CEO of Robert Half International. “Gross margins continued to expand with an increasing mix of permanent placement and temp-to-hire conversion revenues.”

Robert Half International management will conduct a conference call today at 5 p.m. EDT. The dial-in number is 877-814-0475 (+1-706-643-9224 outside the United States). The password to access the call is “Robert Half.” A taped recording of this call will be available for replay beginning at approximately 8 p.m. EDT today and ending at 8 p.m. EDT on August 24. The dial-in number for the replay is 855-859-2056 (+1-404-537-3406 outside the United States). To access the replay, enter conference ID# 97002140. The conference call also will be archived in audio format on the company’s website at www.rhi.com.

Founded in 1948, Robert Half International Inc., the world’s first and largest specialized staffing firm, is a recognized leader in professional consulting and staffing services, and is the parent company of Protiviti®, a global consulting and internal audit firm composed of experts in risk, advisory and transaction services. The company’s specialized staffing divisions include Accountemps®, Robert Half® Finance & Accounting and Robert Half® Management Resources, for temporary, full-time and senior-level project professionals, respectively, in the fields of accounting and finance; OfficeTeam®, for highly skilled temporary administrative support personnel; Robert Half® Technology, for information technology professionals; Robert Half® Legal, for legal personnel; and The Creative Group®, for interactive, design, marketing, advertising and public relations professionals.

Robert Half International has staffing and consulting operations in more than 400 locations worldwide.

Certain information contained in this press release may be deemed forward-looking statements regarding events and financial trends that may affect the company’s future operating results or financial positions. These statements may be identified by words such as “estimate”, “forecast”, “project”, “plan”, “intend”, “believe”,


“expect”, “anticipate”, or variations or negatives thereof, or by similar or comparable words or phrases. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements.

These risks and uncertainties include, but are not limited to, the following: the global financial and economic situation; changes in levels of unemployment and other economic conditions in the United States or foreign countries where the company does business, or in particular regions or industries; reduction in the supply of candidates for temporary employment or the company’s ability to attract candidates; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the company’s services, on the company’s ability to maintain its margins; the possibility of the company incurring liability for its activities, including the activities of its temporary employees, or for events impacting its temporary employees on clients’ premises; the possibility that adverse publicity could impact the company’s ability to attract and retain clients and candidates; the success of the company in attracting, training, and retaining qualified management personnel and other staff employees; the company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; the company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the company’s SEC filings; the ability of the company to manage its international operations and comply with foreign laws and regulations; the impact of fluctuations in foreign currency exchange rates; the possibility that the additional costs the company will incur as a result of health care reform legislation may adversely affect the company’s profit margins or the demand for the company’s services; the possibility that the company’s computer and communications hardware and software systems could be damaged or their service interrupted; and the possibility that the company may fail to maintain adequate financial and management controls and as a result suffer errors in its financial reporting.

Additionally, with respect to Protiviti, other risks and uncertainties include the fact that future success will depend on its ability to retain employees and attract clients; there can be no assurance that there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; failure to produce projected revenues could adversely affect financial results; and there is the possibility of involvement in litigation relating to prior or current transactions or activities.

Because long-term contracts are not a significant part of the company’s business, future results cannot be reliably predicted by considering past trends or extrapolating past results. The company undertakes no obligation to update information contained in this release.

A copy of this release is available at www.rhi.com.

 

ATTACHED: Summary of Operations

 

     Supplemental Financial Information

 

     Non-GAAP Financial Measures

 

2


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

SUMMARY OF OPERATIONS

(in thousands, except per share amounts)

 

     Quarter
Ended June 30,
    Six Months
Ended June 30,
 
     2012     2011     2012     2011  
     (Unaudited)     (Unaudited)  

Net service revenues

   $ 1,028,383      $ 937,966      $ 2,043,827      $ 1,818,835   

Direct costs of services

     613,080        565,678        1,226,441        1,108,458   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross margin

     415,303        372,288        817,386        710,377   

Selling, general and administrative expenses

     343,264        311,202        665,282        604,888   

Amortization of intangible assets

     52        40        87        79   

Interest income

     (285     (238     (519     (450
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     72,272        61,284        152,536        105,860   

Provision for income taxes

     26,943        24,859        58,873        42,730   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 45,329      $ 36,425      $ 93,663      $ 63,130   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income available to common stockholders – diluted

   $ 45,101      $ 35,890      $ 93,171      $ 62,194   
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per share

   $ .32      $ .25      $ .67      $ .43   

Shares:

        

Basic

     138,588        141,286        138,986        141,966   

Diluted

     139,739        142,585        140,036        143,357   

 

3


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(in thousands)

 

    Quarter
Ended June 30,
    Six Months
Ended June 30,
 
    2012     2011     2012     2011  
    (Unaudited)     (Unaudited)  

REVENUES:

               

Accountemps

  $ 381,000        37.1   $ 345,272        36.8   $ 766,418        37.5   $ 675,598        37.1

OfficeTeam

    202,764        19.7     188,681        20.1     403,229        19.7     365,012        20.1

Robert Half Technology

    119,576        11.6     105,100        11.2     235,213        11.5     201,659        11.1

Robert Half Management Resources

    125,668        12.2     113,316        12.1     253,805        12.4     224,782        12.4

Robert Half Finance & Accounting

    89,141        8.7     80,663        8.6     172,003        8.4     148,267        8.1

Protiviti

    110,234        10.7     104,934        11.2     213,159        10.5     203,517        11.2
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 1,028,383        100.0   $ 937,966        100.0   $ 2,043,827        100.0   $ 1,818,835        100.0
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

GROSS MARGIN:

               

Temporary and consultant staffing

  $ 297,056        35.8   $ 263,485        35.0   $ 592,572        35.7   $ 509,153        34.7

Permanent placement staffing

    89,117        100.0     80,583        99.9     171,944        100.0     148,172        99.9

Risk consulting and internal audit services

    29,130        26.4     28,220        26.9     52,870        24.8     53,052        26.1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 415,303        40.4   $ 372,288        39.7   $ 817,386        40.0   $ 710,377        39.1
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

OPERATING INCOME:

               

Temporary and consultant staffing

  $ 51,668        6.2   $ 46,241        6.1   $ 120,822        7.3   $ 84,311        5.7

Permanent placement staffing

    18,358        20.6     13,875        17.2     31,624        18.4     21,742        14.7

Risk consulting and internal audit services

    2,013        1.8     970        0.9     (342     -0.2     (564     -0.3
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

  $ 72,039        7.0   $ 61,086        6.5   $ 152,104        7.4   $ 105,489        5.8
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

SELECTED CASH FLOW INFORMATION:

               

Amortization of intangible assets

  $ 52        $ 40        $ 87        $ 79     

Depreciation expense

  $ 12,034        $ 12,947        $ 24,280        $ 25,703     

Capital expenditures

  $ 13,839        $ 13,812        $ 24,211        $ 28,375     

Open market repurchases of common stock (shares)

    1,486          2,000          2,503          2,958     

 

4


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(in thousands)

 

     June 30,  
     2012      2011  
     (Unaudited)  

SELECTED BALANCE SHEET INFORMATION:

     

Cash and cash equivalents

   $ 258,578       $ 261,071   

Accounts receivable, less allowances

   $ 531,848       $ 495,381   

Total assets

   $ 1,344,399       $ 1,301,781   

Current liabilities

   $ 496,317       $ 453,228   

Notes payable and other indebtedness, less current portion

   $ 1,487       $ 1,600   

Total stockholders’ equity

   $ 809,360       $ 816,630   

 

5


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

The financial results of Robert Half International Inc. (the “company”) are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the U.S. Securities and Exchange Commission (“SEC”). To help readers understand the company’s financial performance, the company supplements its GAAP financial results with revenue growth rates derived from Non-GAAP revenue amounts.

Variations in the company’s financial results include the impact of changes in foreign currency exchange rates and billing days. The company provides “same billing days and constant currency” revenue growth calculations to remove the impact of these items. These calculations show the year-over-year revenue growth rates for the company’s staffing lines of business on both a reported basis and also on a same-day, constant-currency basis for Global, U.S. and International operations. This information is presented for each of the five previous quarters. The company has provided this data because management believes it better reflects the company’s actual revenue growth rates and aids in evaluating revenue trends over time. The company expresses year-over-year revenue changes as calculated percentages using the same number of billing days and constant currency exchange rates.

The Non-GAAP financial measures provided herein may not provide information that is directly comparable to that provided by other companies in the company’s industry, as other companies may calculate such financial results differently. The company’s Non-GAAP financial measures are not measurements of financial performance under GAAP, and should not be considered as alternatives to actual revenue growth derived from revenue amounts presented in accordance with GAAP. The company does not consider these Non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of the Non-GAAP financial measures to the most directly comparable GAAP financial measures is provided on the following pages.

 

6


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

STAFFING REVENUE GROWTH RATES (%) (UNAUDITED):

 

     Year-Over-Year Growth Rates
(As Reported)
       Non-GAAP Year-Over-Year
Growth Rates
(Same Billing Days and
Constant Currency)
 
     2011      2012        2011      2012  
     Q2      Q3      Q4      Q1      Q2        Q2      Q3      Q4      Q1      Q2  

Global

                               

Accountemps

     17.2         17.3         14.0         16.7         10.3           13.6         14.9         15.4         16.3         12.8   

OfficeTeam

     25.4         20.1         12.3         13.7         7.5           21.6         17.6         13.8         13.6         10.3   

RH Technology

     28.5         30.4         22.7         19.8         13.8           27.3         29.8         24.1         18.8         14.8   

RH Management Resources

     21.7         20.5         13.0         15.0         10.9           15.4         16.5         14.6         15.1         14.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Temporary and consultant staffing

     21.4         20.2         14.6         16.1         10.2           17.6         17.8         16.2         15.8         12.8   

Permanent placement staffing

     43.7         38.3         26.2         22.6         10.5           36.9         34.0         28.1         22.5         14.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     23.2         21.6         15.5         16.6         10.2           19.2         19.1         17.1         16.3         13.0   

United States

                               

Temporary and consultant staffing

     16.4         17.1         16.1         20.2         16.5           16.3         17.4         17.5         19.0         16.9   

Permanent placement staffing

     44.2         44.3         35.2         29.3         22.0           44.1         44.6         36.8         28.1         22.4   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     18.1         18.6         17.2         20.8         16.9           18.0         18.9         18.6         19.6         17.3   

International

                               

Temporary and consultant staffing

     35.4         28.8         10.7         6.2         -5.2           21.3         19.0         12.6         7.8         2.8   

Permanent placement staffing

     43.2         32.0         16.6         15.4         -1.9           29.3         22.9         18.9         16.5         6.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     36.5         29.2         11.5         7.5         -4.7           22.4         19.5         13.5         9.0         3.3   

The Non-GAAP financial measures included in the table above adjust for the following items:

Foreign Currency Translation. The “As Reported” revenue growth rates are based upon reported revenues which include the impact of changes in foreign currency exchange rates. In order to calculate “Constant Currency” revenue growth rates, as-reported amounts are retranslated using foreign exchange rates from the prior year’s comparable period.

Billing Days. The “As Reported” revenue growth rates are based upon reported revenues. Management calculates a global, weighted-average number of billing days for each reporting period based upon input from all countries and all Staffing lines of business. In order to remove the fluctuations caused by comparable periods having different billing days, the company calculates “same billing day” revenue growth rates by dividing each comparative period’s reported revenues by the calculated number of billing days for that period, to arrive at a “per billing day” amount. The “Same Billing Day” growth rates are then calculated based upon the “per billing day” amounts.

The term “same billing days and constant currency” means that the impact of different billing days has been removed from constant currency calculation. A reconciliation of the Non-GAAP year-over-year revenue growth rates to the “As Reported” year-over-year revenue growth rates is included herein on Pages 8-9.

 

7


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

STAFFING REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):

 

Year-Over-Year Staffing Revenue Growth – GLOBAL

 
     Q2 2011      Q3 2011      Q4 2011      Q1 2012      Q2 2012  

Accountemps

              

As Reported

     17.2         17.3         14.0         16.7         10.3   

Billing Days Impact

     -0.1         0.2         1.3         -1.1         0.4   

Currency Impact

     -3.5         -2.6         0.1         0.7         2.1   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     13.6         14.9         15.4         16.3         12.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

OfficeTeam

              

As Reported

     25.4         20.1         12.3         13.7         7.5   

Billing Days Impact

     -0.1         0.3         1.3         -1.1         0.3   

Currency Impact

     -3.7         -2.8         0.2         1.0         2.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     21.6         17.6         13.8         13.6         10.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Robert Half Technology

              

As Reported

     28.5         30.4         22.7         19.8         13.8   

Billing Days Impact

     0.0         0.3         1.4         -1.1         0.3   

Currency Impact

     -1.2         -0.9         0.0         0.1         0.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     27.3         29.8         24.1         18.8         14.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Robert Half Management Resources

              

As Reported

     21.7         20.5         13.0         15.0         10.9   

Billing Days Impact

     -0.1         0.2         1.3         -1.1         0.3   

Currency Impact

     -6.2         -4.2         0.3         1.2         3.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     15.4         16.5         14.6         15.1         14.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Temporary and consultant staffing

              

As Reported

     21.4         20.2         14.6         16.1         10.2   

Billing Days Impact

     -0.1         0.3         1.4         -1.1         0.4   

Currency Impact

     -3.7         -2.7         0.2         0.8         2.2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     17.6         17.8         16.2         15.8         12.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permanent placement staffing

              

As Reported

     43.7         38.3         26.2         22.6         10.5   

Billing Days Impact

     -0.1         0.3         1.5         -1.2         0.3   

Currency Impact

     -6.7         -4.6         0.4         1.1         3.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     36.9         34.0         28.1         22.5         14.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

              

As Reported

     23.2         21.6         15.5         16.6         10.2   

Billing Days Impact

     -0.1         0.3         1.4         -1.1         0.4   

Currency Impact

     -3.9         -2.8         0.2         0.8         2.4   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     19.2         19.1         17.1         16.3         13.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

8


ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES

STAFFING REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):

 

Year-Over-Year Staffing Revenue Growth – UNITED STATES

 
     Q2 2011      Q3 2011      Q4 2011      Q1 2012      Q2 2012  

Temporary and consultant staffing

              

As Reported

     16.4         17.1         16.1         20.2         16.5   

Billing Days Impact

     -0.1         0.3         1.4         -1.2         0.4   

Currency Impact

     —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     16.3         17.4         17.5         19.0         16.9   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permanent placement staffing

              

As Reported

     44.2         44.3         35.2         29.3         22.0   

Billing Days Impact

     -0.1         0.3         1.6         -1.2         0.4   

Currency Impact

     —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     44.1         44.6         36.8         28.1         22.4   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

              

As Reported

     18.1         18.6         17.2         20.8         16.9   

Billing Days Impact

     -0.1         0.3         1.4         -1.2         0.4   

Currency Impact

     —           —           —           —           —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     18.0         18.9         18.6         19.6         17.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Year-Over-Year Staffing Revenue Growth – INTERNATIONAL

 
     Q2 2011      Q3 2011      Q4 2011      Q1 2012      Q2 2012  

Temporary and consultant staffing

              

As Reported

     35.4         28.8         10.7         6.2         -5.2   

Billing Days Impact

     -0.1         0.3         1.4         -1.0         0.3   

Currency Impact

     -14.0         -10.1         0.5         2.6         7.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     21.3         19.0         12.6         7.8         2.8   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Permanent placement staffing

              

As Reported

     43.2         32.0         16.6         15.4         -1.9   

Billing Days Impact

     -0.1         0.3         1.4         -1.1         0.4   

Currency Impact

     -13.8         -9.4         0.9         2.2         8.0   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     29.3         22.9         18.9         16.5         6.5   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

              

As Reported

     36.5         29.2         11.5         7.5         -4.7   

Billing Days Impact

     -0.1         0.3         1.4         -1.0         0.3   

Currency Impact

     -14.0         -10.0         0.6         2.5         7.7   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Same Billing Days and Constant Currency

     22.4         19.5         13.5         9.0         3.3   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

9