Robert Half Reports Third-Quarter Financial Results

MENLO PARK, Calif., Oct. 21, 2015 /CNW/ -- Robert Half International Inc. (NYSE symbol: RHI) today reported revenues and earnings for the third quarter ended September 30, 2015.

For the quarter ended September 30, 2015, net income was $97 million, or $.73 per share, on revenues of $1.31 billion. Net income for the prior year's third quarter was $85 million, or $.63 per share, on revenues of $1.22 billion.

For the nine months ended September 30, 2015, net income was $264 million, or $1.98 per share, on revenues of $3.79 billion. For the nine months ended September 30, 2014, net income was $222 million, or $1.63 per share, on revenues of $3.47 billion.

"Improving labor markets, particularly in the United States, contributed to higher demand for Robert Half's professional staffing and consulting services during the third quarter," said Harold M. Messmer, Jr., chairman and CEO of Robert Half. "Consolidated quarterly revenues reached record levels, fueled by strong results from Protiviti, Robert Half Technology and our permanent placement operations. Protiviti had an outstanding quarter, with revenues up 23 percent from one year ago when adjusted for currency."

Messmer continued, "This was Robert Half's 22nd straight quarter of double-digit net income and earnings per share growth on a year-over-year percentage basis. Unlevered return on equity was 38 percent."

Robert Half management will conduct a conference call today at 5 p.m. EDT. The prepared remarks for this call are available now in the Investor Center of the Robert Half website (www.roberthalf.com/investor-center). Simply click on the Quarterly Conference Calls link. The dial-in number to listen to today's conference call is 877-814-0475 ([phone] outside the United States). The password 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. EST on November 21. The dial-in number for the replay is 855-859-2056 ([phone] outside the United States). To access the replay, enter conference ID# 48008972. The conference call also will be archived in audio format on the company's website at www.roberthalf.com.

Founded in 1948, Robert Half is the world's first and largest specialized staffing firm and a recognized leader in professional consulting and staffing 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 administrative support professionals; Robert Half^® Technology, for project and full-time technology professionals; Robert Half^® Legal, for project and full-time staffing of lawyers, paralegals and legal support personnel; and The Creative Group^®, for interactive, design, marketing, advertising and public relations professionals. Robert Half also is the parent company of Protiviti^®, a global consulting firm that helps companies solve problems in finance, technology, operations, governance, risk and internal audit.

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

Certain information contained in this press release and its attachments 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 healthcare 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.roberthalf.com/investor-center.

ATTACHED:		Summary of Operations   Supplemental Financial Information   Non-GAAP Financial Measures

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
SUMMARY OF OPERATIONS
(in thousands, except per share amounts)
		Quarter Ended September 30,								Nine Months Ended September 30,
		2015				2014				2015				2014
		(Unaudited)								(Unaudited)
Net service revenues		$	1,312,718			$	1,224,308			$	3,790,339			$	3,473,564
Direct costs of services		762,917				719,088				2,215,949				2,051,405
Gross margin		549,801				505,220				1,574,390				1,422,159
Selling, general and administrative expenses		390,735				366,967				1,138,075				1,058,144
Amortization of intangible assets		—				—				—				557
Interest income, net		(240)				(108)				(400)				(570)
Income before income taxes		159,306				138,361				436,715				364,028
Provision for income taxes		62,581				53,177				172,362				142,153
Net income		$	96,725			$	85,184			$	264,353			$	221,875
Diluted net income per share		$	.73			$	.63			$	1.98			$	1.63
Shares:
Basic		131,285				134,054				132,280				134,690
Diluted		132,488				135,366				133,436				135,740

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)
		Quarter Ended September 30,														Nine Months Ended September 30,
		2015							2014							2015							2014
		(Unaudited)														(Unaudited)
REVENUES:
Accountemps		$	434,152			33.1	%		$	416,413			34.0	%		$	1,277,527			33.6	%		$	1,202,433			34.6	%
OfficeTeam		249,087				19.0	%		237,723				19.4	%		722,282				19.4	%		675,288				19.5	%
Robert Half Technology		170,211				13.0	%		150,166				12.3	%		489,573				12.8	%		424,459				12.2	%
Robert Half Management Resources		146,372				11.1	%		149,923				12.2	%		433,560				11.4	%		420,653				12.1	%
Robert Half Finance & Accounting		110,748				8.4	%		102,345				8.4	%		319,744				8.4	%		297,797				8.6	%
Protiviti		202,148				15.4	%		167,738				13.7	%		547,653				14.4	%		452,934				13.0	%
Total		$	1,312,718			100.0	%		$	1,224,308			100.0	%		$	3,790,339			100.0	%		$	3,473,564			100.0	%
GROSS MARGIN:
Temporary and consultant staffing		$	372,762			37.3	%		$	351,791			36.9	%		$	1,087,324			37.2	%		$	993,714			36.5	%
Permanent placement staffing		110,610				99.9	%		102,314				100.0	%		319,226				99.8	%		297,697				100.0	%
Risk consulting and internal audit services		66,429				32.9	%		51,115				30.5	%		167,840				30.6	%		130,748				28.9	%
Total		$	549,801			41.9	%		$	505,220			41.3	%		$	1,574,390			41.5	%		$	1,422,159			40.9	%
OPERATING INCOME:
Temporary and consultant staffing		$	102,991			10.3	%		$	97,660			10.2	%		$	300,404			10.3	%		$	263,901			9.7	%
Permanent placement staffing		24,377				22.0	%		21,380				20.9	%		67,460				21.1	%		61,103				20.5	%
Risk consulting and internal audit services		31,698				15.7	%		19,213				11.5	%		68,451				12.5	%		39,011				8.6	%
Total		$	159,066			12.1	%		$	138,253			11.3	%		$	436,315			11.5	%		$	364,015			10.5	%
SELECTED CASH FLOW INFORMATION:
Amortization of intangible assets		$	—						$	—						$	—						$	557
Depreciation expense		$	12,919						$	12,107						$	39,487						$	36,170
Capital expenditures		$	18,753						$	13,122						$	48,276						$	36,207
Open market repurchases of common stock (shares)		1,551							1,237							2,932							2,543

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)
		September 30,
		2015				2014
		(Unaudited)
SELECTED BALANCE SHEET INFORMATION:
Cash and cash equivalents		$	251,818			$	290,876
Accounts receivable, less allowances		$	731,574			$	657,105
Total assets		$	1,713,873			$	1,627,013
Current liabilities		$	664,169			$	623,905
Notes payable and other indebtedness, less current portion		$	1,046			$	1,196
Total stockholders' equity		$	1,006,476			$	972,583

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 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 six most recent 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.

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATES (%) (UNAUDITED):
		Year-Over-Year Growth Rates (As Reported)												Non-GAAP Year-Over-Year Growth Rates (Same Billing Days and Constant Currency)
		2014						2015						2014						2015
		Q2		Q3		Q4		Q1		Q2		Q3		Q2		Q3		Q4		Q1		Q2		Q3
Global
Accountemps		6.5		10.1		9.6		8.0		6.6		4.3		6.5		9.8		11.6		12.2		10.1		7.6
OfficeTeam		9.1		14.1		12.6		9.5		6.9		4.8		9.0		14.0		14.7		14.1		10.8		8.3
RH Technology		7.8		11.0		11.4		16.2		16.6		13.3		8.5		10.9		12.7		19.0		18.8		15.4
RH Management Resources		12.4		18.9		14.1		10.4		2.0		-2.4		12.2		18.4		17.3		17.3		7.9		2.9
Temporary and consultant staffing		8.2		12.5		11.3		10.0		7.5		4.8		8.3		12.3		13.4		14.5		11.3		8.3
Permanent placement staffing		13.8		16.0		12.8		6.2		7.5		8.2		14.2		15.7		15.7		11.9		13.0		13.6
Total staffing		8.7		12.9		11.5		9.7		7.5		5.1		8.9		12.6		13.6		14.2		11.5		8.8
Protiviti		15.5		20.7		20.9		22.0		20.4		20.5		14.4		18.3		22.5		26.6		23.4		23.0
Total		9.6		13.9		12.7		11.2		9.2		7.2		9.6		13.4		14.9		15.9		13.1		10.9
United States
Temporary and consultant staffing		9.3		13.2		13.8		14.8		12.4		9.9		9.8		13.0		14.0		15.6		12.4		9.8
Permanent placement staffing		15.8		21.8		20.8		15.6		18.7		16.2		16.3		21.6		21.0		16.4		18.6		16.1
Total staffing		9.8		13.9		14.3		14.8		12.9		10.4		10.3		13.7		14.6		15.7		12.9		10.3
Protiviti		19.0		22.0		26.9		26.2		24.3		24.6		18.4		19.9		27.1		27.9		24.1		24.4
Total		11.0		15.0		16.0		16.3		14.5		12.5		11.4		14.6		16.4		17.5		14.5		12.6
International
Temporary and consultant staffing		4.6		10.4		3.1		-6.0		-9.3		-12.8		3.3		9.9		11.4		10.6		7.7		3.1
Permanent placement staffing		10.6		6.3		-0.6		-9.8		-11.9		-7.3		10.7		5.6		6.8		4.0		3.1		8.9
Total staffing		5.4		9.8		2.6		-6.6		-9.7		-12.1		4.4		9.3		10.8		9.6		7.0		3.9
Protiviti		2.4		14.6		-1.2		4.8		4.0		1.2		-0.2		11.0		5.4		21.3		20.4		16.4
Total		5.1		10.3		2.1		-5.4		-8.2		-10.7		3.9		9.5		10.1		11.0		8.5		5.3

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 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 8-10.

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):
Year-Over-Year Revenue Growth – GLOBAL
		Q2 2014		Q3 2014		Q4 2014		Q1 2015		Q2 2015		Q3 2015
Accountemps
As Reported		6.5		10.1		9.6		8.0		6.6		4.3
Billing Days Impact		0.4		-0.1		0.3		0.9		-0.1		-0.2
Currency Impact		-0.4		-0.2		1.7		3.3		3.6		3.5
Same Billing Days and Constant Currency		6.5		9.8		11.6		12.2		10.1		7.6
OfficeTeam
As Reported		9.1		14.1		12.6		9.5		6.9		4.8
Billing Days Impact		0.5		-0.2		0.2		0.8		-0.1		-0.2
Currency Impact		-0.6		0.1		1.9		3.8		4.0		3.7
Same Billing Days and Constant Currency		9.0		14.0		14.7		14.1		10.8		8.3
Robert Half Technology
As Reported		7.8		11.0		11.4		16.2		16.6		13.3
Billing Days Impact		0.5		-0.2		0.3		0.9		0.0		-0.1
Currency Impact		0.2		0.1		1.0		1.9		2.2		2.2
Same Billing Days and Constant Currency		8.5		10.9		12.7		19.0		18.8		15.4
Robert Half Management Resources
As Reported		12.4		18.9		14.1		10.4		2.0		-2.4
Billing Days Impact		0.6		-0.2		0.2		0.9		0.0		0.0
Currency Impact		-0.8		-0.3		3.0		6.0		5.9		5.3
Same Billing Days and Constant Currency		12.2		18.4		17.3		17.3		7.9		2.9
Temporary and consultant staffing
As Reported		8.2		12.5		11.3		10.0		7.5		4.8
Billing Days Impact		0.5		-0.1		0.3		0.9		0.0		-0.1
Currency Impact		-0.4		-0.1		1.8		3.6		3.8		3.6
Same Billing Days and Constant Currency		8.3		12.3		13.4		14.5		11.3		8.3
Permanent placement staffing
As Reported		13.8		16.0		12.8		6.2		7.5		8.2
Billing Days Impact		0.6		-0.1		0.2		0.9		0.0		-0.2
Currency Impact		-0.2		-0.2		2.7		4.8		5.5		5.6
Same Billing Days and Constant Currency		14.2		15.7		15.7		11.9		13.0		13.6
Total staffing
As Reported		8.7		12.9		11.5		9.7		7.5		5.1
Billing Days Impact		0.6		-0.2		0.2		0.8		0.0		-0.1
Currency Impact		-0.4		-0.1		1.9		3.7		4.0		3.8
Same Billing Days and Constant Currency		8.9		12.6		13.6		14.2		11.5		8.8
Protiviti
As Reported		15.5		20.7		20.9		22.0		20.4		20.5
Billing Days Impact		-0.7		-2.1		0.2		1.6		-0.1		-0.2
Currency Impact		-0.4		-0.3		1.4		3.0		3.1		2.7
Same Billing Days and Constant Currency		14.4		18.3		22.5		26.6		23.4		23.0
Total
As Reported		9.6		13.9		12.7		11.2		9.2		7.2
Billing Days Impact		0.4		-0.4		0.3		1.1		0.0		0.0
Currency Impact		-0.4		-0.1		1.9		3.6		3.9		3.7
Same Billing Days and Constant Currency		9.6		13.4		14.9		15.9		13.1		10.9

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):
Year-Over-Year Revenue Growth – UNITED STATES
		Q2 2014			Q3 2014			Q4 2014		Q1 2015		Q2 2015			Q3 2015
Temporary and consultant staffing
As Reported		9.3			13.2			13.8		14.8		12.4			9.9
Billing Days Impact		0.5			-0.2			0.2		0.8		0.0			-0.1
Currency Impact		—			—			—		—		—			—
Same Billing Days and Constant Currency		9.8			13.0			14.0		15.6		12.4			9.8
Permanent placement staffing
As Reported		15.8			21.8			20.8		15.6		18.7			16.2
Billing Days Impact		0.5			-0.2			0.2		0.8		0.0			-0.1
Currency Impact		—			—			—		—		—			—
Same Billing Days and Constant Currency		16.3			21.6			21.0		16.4		18.7			16.1
Total staffing
As Reported		9.8			13.9			14.3		14.8		12.9			10.4
Billing Days Impact		0.5			-0.2			0.3		0.9		0.0			-0.1
Currency Impact		—			—			—		—		—			—
Same Billing Days and Constant Currency		10.3			13.7			14.6		15.7		12.9			10.3
Protiviti
As Reported		19.0			22.0			26.9		26.2		24.3			24.6
Billing Days Impact		-0.6			-2.1			0.2		1.7		-0.2			-0.2
Currency Impact		—			—			—		—		—			—
Same Billing Days and Constant Currency		18.4			19.9			27.1		27.9		24.1			24.4
Total
As Reported		11.0			15.0			16.0		16.3		14.5			12.5
Billing Days Impact		0.4			-0.4			0.4		1.2		0.0			0.1
Currency Impact		—			—			—		—		—			—
Same Billing Days and Constant Currency		11.4			14.6			16.4		17.5		14.5			12.6

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):
Year-Over-Year Revenue Growth – INTERNATIONAL
		Q2 2014			Q3 2014			Q4 2014			Q1 2015			Q2 2015			Q3 2015
Temporary and consultant staffing
As Reported		4.6			10.4			3.1			-6.0			-9.3			-12.8
Billing Days Impact		0.4			-0.2			0.2			0.8			0.0			-0.2
Currency Impact		-1.7			-0.3			8.1			15.8			17.0			16.1
Same Billing Days and Constant Currency		3.3			9.9			11.4			10.6			7.7			3.1
Permanent placement staffing
As Reported		10.6			6.3			-0.6			-9.8			-11.9			-7.3
Billing Days Impact		0.5			-0.2			0.2			0.7			0.0			-0.1
Currency Impact		-0.4			-0.5			7.2			13.1			15.0			16.3
Same Billing Days and Constant Currency		10.7			5.6			6.8			4.0			3.1			8.9
Total staffing
As Reported		5.4			9.8			2.6			-6.6			-9.7			-12.1
Billing Days Impact		0.5			-0.2			0.3			0.8			0.0			-0.1
Currency Impact		-1.5			-0.3			7.9			15.4			16.7			16.1
Same Billing Days and Constant Currency		4.4			9.3			10.8			9.6			7.0			3.9
Protiviti
As Reported		2.4			14.6			-1.2			4.8			4.0			1.2
Billing Days Impact		-0.6			-2.0			0.1			1.6			-0.1			-0.2
Currency Impact		-2.0			-1.6			6.5			14.9			16.5			15.4
Same Billing Days and Constant Currency		-0.2			11.0			5.4			21.3			20.4			16.4
Total
As Reported		5.1			10.3			2.1			-5.4			-8.2			-10.7
Billing Days Impact		0.4			-0.3			0.2			1.1			0.0			0.0
Currency Impact		-1.6			-0.5			7.8			15.3			16.7			16.0
Same Billing Days and Constant Currency		3.9			9.5			10.1			11.0			8.5			5.3

SOURCE Robert Half

M. Keith Waddell, Vice Chairman, President and Chief Financial Officer, [phone], http://www.roberthalf.com