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Robert Half Reports First-Quarter Financial Results

Revenues Up 5 Percent (9 Percent Adjusted for Currency and Billing Days); EPS Growth of 19 Percent

MENLO PARK, Calif., April 23, 2019 /PRNewswire/ -- Robert Half International Inc. (RHI) today reported revenues and earnings for the first quarter ended March 31, 2019.

Robert Half (PRNewsfoto/Robert Half)

For the quarter ended March 31, 2019, net income was $110 million, or $.93 per share, on revenues of $1.47 billion. Net income for the prior year's first quarter was $96 million, or $.78 per share, on revenues of $1.40 billion.

"We saw solid revenue growth in our staffing and Protiviti operations during the quarter, both in our U.S. and non-U.S. operations," said Harold M. Messmer, Jr., chairman and CEO of Robert Half. "Persistent tight labor markets globally continue to result in heightened demand for our professional staffing services."

Messmer added, "During the first quarter, return on invested capital for the company was 41 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 (+1-706-643-9224 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 11:59 p.m. EDT on May 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# 5879907. The conference call also will be archived in audio format on the company's website at www.roberthalf.com/investor-center.

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 creative, digital, marketing, advertising and public relations professionals. Robert Half also is the parent company of Protiviti®, a global consulting firm that provides clients with consulting solutions in finance, technology, operations, data, analytics, 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: changes to or new interpretations of U.S. or international tax regulations; 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 March 31,


2019


2018


(Unaudited)





Net service revenues

$

1,468,530



$

1,395,333


Direct costs of services

860,942



822,967






Gross margin

607,588



572,366






Selling, general and administrative expenses

461,359



437,999


Amortization of intangible assets

342



463


Interest income, net

(1,496)



(735)






Income before income taxes

147,383



134,639


Provision for income taxes

37,585



38,472






Net income

$

109,798



$

96,167






Diluted net income per share

$

.93



$

.78






Shares:




Basic

117,068



121,934


Diluted

117,966



122,887


 

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(in thousands)



Quarter Ended March 31,


2019


2018


(Unaudited)

REVENUES:








Accountemps

$

483,473



32.9

%


$

471,589



33.8

%

OfficeTeam

252,035



17.2

%


261,152



18.7

%

Robert Half Technology

171,928



11.7

%


160,062



11.5

%

Robert Half Management Resources

177,191



12.1

%


173,485



12.4

%

Robert Half Finance & Accounting

131,562



8.9

%


121,400



8.7

%

Protiviti

252,341



17.2

%


207,645



14.9

%

Total

$

1,468,530



100.0

%


$

1,395,333



100.0

%









GROSS MARGIN:








Temporary and consultant staffing

$

412,465



38.0

%


$

396,321



37.2

%

Permanent placement staffing

131,308



99.8

%


121,169



99.8

%

Risk consulting and internal audit services

63,815



25.3

%


54,876



26.4

%

Total

$

607,588



41.4

%


$

572,366



41.0

%









OPERATING INCOME:








Temporary and consultant staffing

$

106,018



9.8

%


$

96,723



9.1

%

Permanent placement staffing

21,557



16.4

%


22,379



18.4

%

Risk consulting and internal audit services

18,654



7.4

%


15,265



7.4

%

Total

$

146,229



10.0

%


$

134,367



9.6

%









SELECTED CASH FLOW INFORMATION:








Amortization of intangible assets

$

342





$

463




Depreciation expense

$

15,652





$

16,253




Capital expenditures

$

12,670





$

7,965




Open market repurchases of common stock (shares)

781





1,065




 

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

SUPPLEMENTAL FINANCIAL INFORMATION

(in thousands)



March 31,


2019


2018


(Unaudited)

SELECTED BALANCE SHEET INFORMATION:




Cash and cash equivalents

$

269,645



$

291,987


Accounts receivable, less allowances

$

826,366



$

784,889


Total assets

$

2,204,607



$

1,893,860


Current liabilities

$

900,730



$

764,440


Notes payable and other indebtedness, less current portion

$

404



$

608


Total stockholders' equity

$

1,077,029



$

1,114,797


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, billing days, and certain intercompany adjustments. The Company provides "as adjusted" 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 an as adjusted 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, constant currency exchange rates, and certain intercompany adjustments.

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

(As Adjusted)


2017


2018


2019


2017


2018


2019


Q4


Q1


Q2


Q3


Q4


Q1


Q4


Q1


Q2


Q3


Q4


Q1

Global
























Accountemps

4.9


8.0


9.3


8.1


8.4


2.5


3.6


6.6


7.8


8.6


8.7


5.6

OfficeTeam

7.6


10.6


9.8


7.7


4.0


-3.5


5.9


8.2


7.7


7.8


4.1


-0.4

RH Technology

-1.5


1.7


8.6


12.4


11.4


7.4


-2.2


1.2


7.5


12.6


11.4


10.7

RH Management Resources

9.9


10.2


7.2


2.8


4.1


2.1


7.5


7.0


7.9


8.1


9.1


14.3

Temporary and consultant staffing

5.3


8.0


9.0


7.9


7.1


1.7


3.8


6.2


7.7


8.9


8.0


6.2

Permanent placement staffing

18.1


17.1


19.9


16.5


12.8


8.4


16.1


15.0


18.0


17.4


13.5


12.3

Total staffing

6.4


8.8


10.1


8.7


7.6


2.4


4.9


7.0


8.8


9.8


8.5


6.9

Protiviti

6.5


5.9


18.5


21.2


22.8


21.5


5.5


4.7


14.2


17.5


19.2


17.3

Total

6.4


8.4


11.4


10.7


10.1


5.2


5.0


6.7


9.6


11.1


10.3


8.5

























United States






















Temporary and consultant staffing

1.2


3.4


5.6


6.8


7.4


3.4


1.3


3.9


5.3


6.5


6.3


5.1

Permanent placement staffing

13.1


14.2


17.6


17.0


16.4


10.0


13.2


14.8


17.3


16.7


15.3


11.8

Total staffing

2.1


4.3


6.7


7.7


8.1


4.0


2.2


4.8


6.4


7.4


7.1


5.7

Protiviti

2.2


1.0


11.8


17.3


17.6


14.9


2.3


1.5


11.5


17.1


16.4


16.8

Total

2.1


3.7


7.5


9.3


9.7


5.7


2.2


4.2


7.2


9.0


8.7


7.4

























International






















Temporary and consultant staffing

22.0


26.0


22.0


11.6


6.1


-3.7


14.0


15.5


16.7


17.8


14.1


10.2

Permanent placement staffing

29.5


23.6


25.0


15.4


5.6


4.9


22.8


16.0


18.8


18.8


10.4


12.8

Total staffing

23.0


25.7


22.4


12.1


6.0


-2.5


15.2


15.5


17.0


17.9


13.6


10.5

Protiviti

29.3


32.2


51.9


38.3


45.1


48.8


22.7


22.0


25.5


19.5


29.5


18.9

Total

23.8


26.5


26.0


15.5


11.2


3.7


16.1


16.3


18.1


18.2


16.0


11.9

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 inputs 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.

Intercompany Adjustments. The "As Reported" revenue growth rates are based upon reported revenues. In order to remove the fluctuations caused by the impact of certain intercompany adjustments, applicable comparative period revenues are reclassified to conform with the current period presentation.

The term "As Adjusted" means that the impact of different billing days, constant currency fluctuations, and certain intercompany adjustments are removed from the revenue growth rate 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


 Q4 2017


 Q1 2018


 Q2 2018


 Q3 2018


 Q4 2018


 Q1 2019

Accountemps








As Reported

4.9



8.0



9.3



8.1



8.4



2.5


Billing Days Impact

0.1



0.9



-0.3



-0.3



-0.7



1.4


Currency Impact

-1.4



-2.3



-1.2



0.8



1.0



1.7


As Adjusted

3.6



6.6



7.8



8.6



8.7



5.6


OfficeTeam












As Reported

7.6



10.6



9.8



7.7



4.0



-3.5


Billing Days Impact

0.1



0.8



-0.3



-0.4



-0.7



1.3


Currency Impact

-1.8



-3.2



-1.8



0.5



0.8



1.8


As Adjusted

5.9



8.2



7.7



7.8



4.1



-0.4


Robert Half Technology












As Reported

-1.5



1.7



8.6



12.4



11.4



7.4


Billing Days Impact



0.8



-0.3



-0.3



-0.9



1.4


Currency Impact

-0.7



-1.3



-0.8



0.5



0.7



1.2


Intercompany Adjustments









0.2



0.7


As Adjusted

-2.2



1.2



7.5



12.6



11.4



10.7


Robert Half Management Resources












As Reported

9.9



10.2



7.2



2.8



4.1



2.1


Billing Days Impact

0.1



0.8



-0.4



-0.4



-0.8



1.5


Currency Impact

-2.5



-4.0



-2.2



1.0



1.4



2.8


Intercompany Adjustments





3.3



4.7



4.4



7.9


As Adjusted

7.5



7.0



7.9



8.1



9.1



14.3


Temporary and consultant staffing












As Reported

5.3



8.0



9.0



7.9



7.1



1.7


Billing Days Impact

0.1



0.8



-0.4



-0.4



-0.8



1.4


Currency Impact

-1.6



-2.6



-1.4



0.7



1.0



1.8


Intercompany Adjustments





0.5



0.7



0.7



1.3


As Adjusted

3.8



6.2



7.7



8.9



8.0



6.2


Permanent placement staffing












As Reported

18.1



17.1



19.9



16.5



12.8



8.4


Billing Days Impact

0.1



0.9



-0.4



-0.4



-0.7



1.4


Currency Impact

-2.1



-3.0



-1.5



1.3



1.4



2.5


As Adjusted

16.1



15.0



18.0



17.4



13.5



12.3


Total staffing












As Reported

6.4



8.8



10.1



8.7



7.6



2.4


Billing Days Impact

0.1



0.8



-0.4



-0.4



-0.7



1.4


Currency Impact

-1.6



-2.6



-1.4



0.8



1.0



1.9


Intercompany Adjustments





0.5



0.7



0.6



1.2


As Adjusted

4.9



7.0



8.8



9.8



8.5



6.9


Protiviti












As Reported

6.5



5.9



18.5



21.2



22.8



21.5


Billing Days Impact



0.7



-0.4



-0.4



-0.8



1.5


Currency Impact

-1.0



-1.9



-1.2



0.6



0.9



1.7


Intercompany Adjustments





-2.7



-3.9



-3.7



-7.4


As Adjusted

5.5



4.7



14.2



17.5



19.2



17.3


Total












As Reported

6.4



8.4



11.4



10.7



10.1



5.2


Billing Days Impact

0.1



0.8



-0.4



-0.3



-0.8



1.4


Currency Impact

-1.5



-2.5



-1.4



0.7



1.0



1.9


As Adjusted

5.0



6.7



9.6



11.1



10.3



8.5


 

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES


REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):


Year-Over-Year Revenue Growth – UNITED STATES


 Q4 2017


 Q1 2018


 Q2 2018


 Q3 2018


 Q4 2018


 Q1 2019

Temporary and consultant staffing




As Reported

1.2


3.4


5.6



6.8



7.4



3.4

Billing Days Impact

0.1


0.5


-0.3



-0.3



-1.1



1.7

Currency Impact









As Adjusted

1.3


3.9


5.3



6.5



6.3



5.1













Permanent placement staffing












As Reported

13.1


14.2


17.6



17.0



16.4



10.0

Billing Days Impact

0.1


0.6


-0.3



-0.3



-1.1



1.8

Currency Impact









As Adjusted

13.2


14.8


17.3



16.7



15.3



11.8













Total staffing












As Reported

2.1


4.3


6.7



7.7



8.1



4.0

Billing Days Impact

0.1


0.5


-0.3



-0.3



-1.0



1.7

Currency Impact









As Adjusted

2.2


4.8


6.4



7.4



7.1



5.7













Protiviti












As Reported

2.2


1.0


11.8



17.3



17.6



14.9

Billing Days Impact

0.1


0.5


-0.3



-0.2



-1.2



1.9

Currency Impact









As Adjusted

2.3


1.5


11.5



17.1



16.4



16.8













Total












As Reported

2.1


3.7


7.5



9.3



9.7



5.7

Billing Days Impact

0.1


0.5


-0.3



-0.3



-1.0



1.7

Currency Impact









As Adjusted

2.2


4.2


7.2



9.0



8.7



7.4

 

ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NON-GAAP FINANCIAL MEASURES


REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED):


Year-Over-Year Revenue Growth – INTERNATIONAL


 Q4 2017


 Q1 2018


 Q2 2018


 Q3 2018


 Q4 2018


 Q1 2019

Temporary and consultant staffing




As Reported

22.0



26.0



22.0



11.6



6.1



-3.7


Billing Days Impact

0.1



2.3



-1.2



-0.5



0.4



0.4


Currency Impact

-8.1



-12.8



-6.9



3.2



4.4



8.1


Intercompany Adjustments





2.8



3.5



3.2



5.4


As Adjusted

14.0



15.5



16.7



17.8



14.1



10.2














Permanent placement staffing












As Reported

29.5



23.6



25.0



15.4



5.6



4.9


Billing Days Impact

0.1



2.2



-1.2



-0.6



0.5



0.3


Currency Impact

-6.8



-9.8



-5.0



4.0



4.3



7.6


As Adjusted

22.8



16.0



18.8



18.8



10.4



12.8














Total staffing












As Reported

23.0



25.7



22.4



12.1



6.0



-2.5


Billing Days Impact

0.1



2.2



-1.1



-0.5



0.5



0.3


Currency Impact

-7.9



-12.4



-6.7



3.3



4.4



8.0


Intercompany Adjustments





2.4



3.0



2.7



4.7


As Adjusted

15.2



15.5



17.0



17.9



13.6



10.5














Protiviti












As Reported

29.3



32.2



51.9



38.3



45.1



48.8


Billing Days Impact



2.3



-1.3



-0.5



0.6



0.3


Currency Impact

-6.6



-12.5



-6.4



2.7



4.2



7.1


Intercompany Adjustments





-18.7



-21.0



-20.4



-37.3


As Adjusted

22.7



22.0



25.5



19.5



29.5



18.9














Total












As Reported

23.8



26.5



26.0



15.5



11.2



3.7


Billing Days Impact



2.2



-1.3



-0.6



0.4



0.4


Currency Impact

-7.7



-12.4



-6.6



3.3



4.4



7.8


As Adjusted

16.1



16.3



18.1



18.2



16.0



11.9


 

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