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Robert Half Reports Third-Quarter Financial Results

·13-min read

MENLO PARK, Calif., Oct. 21, 2021 /CNW/ -- Robert Half International Inc. (NYSE: RHI) today reported revenues and earnings for the third quarter ended September 30, 2021.

Robert Half (PRNewsfoto/Robert Half)
Robert Half (PRNewsfoto/Robert Half)

For the quarter ended September 30, 2021, net income was $171 million, or $1.53 per share, on revenues of $1.713 billion. Net income for the prior year's third quarter was $76 million, or $.67 per share, on revenues of $1.190 billion.

"We once again achieved a record level of both revenues and earnings in the third quarter, exceeding the high end of our guidance, as a result of continued broad-based acceleration in the demand for our staffing and business consulting services," said M. Keith Waddell, president and CEO of Robert Half. "Our permanent placement and Protiviti operations continued to show very strong results, growing year-over-year revenues by 79% and 56%, respectively. Our temporary and consultant staffing operations also accelerated in the quarter with year-over-year revenue growth of 35%. Overall, our total revenues were 10% higher than the pre-pandemic third quarter of 2019. Return on invested capital for the Company was 53% in the third quarter.

"We are proud that our commitment to success has earned us several recent accolades, including the Forbes' World's Best Employers and Newsweek's America's Most Responsible Companies lists for 2021," Waddell concluded.

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 10:59 p.m. EST on November 20. 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# 5657603. The conference call also will be archived in audio format on the Company's website, at www.roberthalf.com/investor-center.

Robert Half is the world's first and largest specialized talent solutions and business consulting firm that connects opportunities at great companies with highly skilled job seekers. The Company offers contract and permanent placement solutions for finance and accounting, technology, marketing and creative, legal, and administrative and customer support roles. Named to FORTUNE's Most Admired Companies and 100 Best Companies to Work For lists and a Forbes Best Employer for Diversity, Robert Half is the parent company of Protiviti®, a global consulting firm that provides internal audit, risk, business and technology consulting solutions.

Robert Half has 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; the duration and impact of the COVID-19 pandemic and efforts to mitigate its spread; 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 contract 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; the Company's ability to maintain its margins; the possibility of the Company incurring liability for its activities, including the activities of its contract employees, or for events impacting its contract 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 broad-based consulting, regulatory compliance, technology services, public sector or other high-demand advisory 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.

SUMMARY OF OPERATIONS

(in thousands, except per share amounts)



Quarter Ended
September 30,


Nine Months
Ended September 30,


2021


2020


2021


2020


(Unaudited)


(Unaudited)









Service revenues

$

1,712,566



$

1,189,897



$

4,691,527



$

3,804,914


Costs of services

987,239



722,551



2,739,618



2,306,630










Gross margin

725,327



467,346



1,951,909



1,498,284










Selling, general and administrative expenses (1)

495,576



390,799



1,406,731



1,240,879


(Income) loss from investments held in employee deferred compensation
trusts (which is completely offset by related costs and expenses) (1)

1,759



(26,095)



(38,039)



(34,630)


Amortization of intangible assets

572



334



1,724



1,002


Interest income, net

(238)



(202)



(145)



(1,264)










Income before income taxes

227,658



102,510



581,638



292,297


Provision for income taxes

56,787



26,761



150,956



80,437










Net income

$

170,871



$

75,749



$

430,682



$

211,860










Diluted net income per share

$

1.53



$

.67



$

3.85



$

1.87










Shares:








Basic

110,176



112,809



110,816



112,953


Diluted

111,490



113,355



111,954



113,444



(1) Selling, general and administrative ("SG&A") expenses exclude gains and losses on investments held to fund the Company's obligations under employee deferred compensation plans. Under these plans, employees direct the investment of their account balances, and the Company makes cash deposits into an investment trust consistent with these directions. Changes in the Company's deferred compensation obligations noted above are included in SG&A or, in the case of Protiviti, costs of services, while investment (income) loss is presented separately.

ROBERT HALF INTERNATIONAL INC.

SUPPLEMENTAL FINANCIAL INFORMATION

(in thousands)




Nine Months Ended
September 30,



2021


2020



(Unaudited)

SELECTED CASH FLOW INFORMATION:





Depreciation


$

40,536



$

47,097


Capitalized cloud computing implementation costs


$

23,735



$

26,121


Capital expenditures


$

24,797



$

28,878


Open market repurchases of common stock (shares)


2,254



1,432




September 30,



2021


2020



(Unaudited)

SELECTED BALANCE SHEET INFORMATION:





Cash and cash equivalents


$

633,719



$

587,000


Accounts receivable, net


$

1,005,633



$

690,259


Total assets


$

2,931,718



$

2,563,092


Total current liabilities


$

1,341,602



$

1,052,785


Total stockholders' equity


$

1,316,043



$

1,194,029


ROBERT HALF INTERNATIONAL INC.
SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED)
(in thousands)

Beginning in Q3 2020, the Company modified its presentation of service revenues for Accountemps, OfficeTeam, Robert Half Technology and Robert Half Management Resources to include inter-segment revenues from services provided to Protiviti in connection with the Company's managed business solutions. This is how the Company measures and manages these divisions internally. The combined amount of divisional intersegment revenues with Protiviti are aggregated and then eliminated as a single line item. The Company has prepared the below schedule to provide readers with historical comparative information to better evaluate the related trends.


2019


2020


2021


Q1


Q2


Q3


Q4


Q1


Q2


Q3


Q4


Q1


Q2


Q3

SERVICE REVENUES:






















Accountemps

$

490,084



$

494,582



$

501,905



$

498,650



$

489,884



$

331,542



$

351,598



$

385,000



$

417,116



$

453,342



$

492,558


OfficeTeam

252,633



261,952



267,023



259,147



239,979



136,299



173,685



214,985



220,467



263,192



279,370


Robert Half Technology

182,426



189,461



195,630



198,314



196,652



162,028



161,007



175,730



172,239



194,233



215,500


Robert Half Management Resources

196,003



195,236



200,421



201,097



211,878



165,031



154,917



167,116



183,271



210,550



239,807


Elimination of intersegment revenues

(36,519)



(38,519)



(46,518)



(50,883)



(46,273)



(41,514)



(59,816)



(92,393)



(103,818)



(143,036)



(172,534)


Temporary and consultant staffing

1,084,627



1,102,712



1,118,461



1,106,325



1,092,120



753,386



781,391



850,438



889,275



978,281



1,054,701


Permanent placement staffing

131,562



140,894



134,582



126,394



120,489



71,030



87,203



91,387



111,703



143,640



156,444


Protiviti

252,341



272,779



299,089



304,666



294,082



283,910



321,303



362,261



397,402



458,660



501,421


Total

$

1,468,530



$

1,516,385



$

1,552,132



$

1,537,385



$

1,506,691



$

1,108,326



$

1,189,897



$

1,304,086



$

1,398,380



$

1,580,581



$

1,712,566
























ROBERT HALF INTERNATIONAL INC.
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 the following non-GAAP measures: adjusted gross margin; adjusted selling, general and administrative expense; segment income; combined segment income; and as adjusted revenue growth rates.

The following measures: adjusted gross margin; adjusted selling, general and administrative expense; and segment income include gains and losses on investments held to fund the Company's obligations under employee deferred compensation plans. The Company provides these measures because they are used by management to review its operational results.

Combined segment income is income before income taxes, adjusted for interest income, net and amortization of intangible assets. The Company provides combined segment income because it is how the Company evaluates segment performance.

Variations in the Company's financial results include the impact of changes in foreign currency exchange rates and billing days. 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 it focuses on the Company's revenue growth rates attributable to operating activities 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 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.

NON-GAAP FINANCIAL MEASURES

ADJUSTED SUMMARY OF OPERATIONS RECONCILIATION (UNAUDITED)

(in thousands)



Quarter Ended September 30,


Relationships


2021


2020


2021


2020


2021


2020


Reported


Adjustments


Adjusted (1)


Reported


Adjustments


Adjusted (1)


Reported


Adjusted

SERVICE REVENUES:




















Accountemps

$

492,558



$



$

492,558



$

351,598



$



$

351,598



28.8

%


29.5

%


28.8

%


29.6

%

OfficeTeam

279,370





279,370



173,685





173,685



16.3

%


14.6

%


16.3

%


14.6

%

Robert Half Technology

215,500





215,500



161,007





161,007



12.6

%


13.5

%


12.6

%


13.5

%

Robert Half Management Resources

239,807





239,807



154,917





154,917



14.0

%


13.0

%


14.0

%


13.0

%

Elimination of intersegment revenues

(172,534)





(172,534)



(59,816)





(59,816)



(10.1)

%


(5.0)

%


(10.1)

%


(5.0)

%

Temporary and consultant staffing

1,054,701





1,054,701



781,391





781,391



61.6

%


65.7

%


61.6

%


65.7

%

Permanent placement staffing

156,444





156,444



87,203





87,203



9.1

%


7.3

%


9.1

%


7.3

%

Protiviti

501,421





501,421



321,303





321,303



29.3

%


27.0

%


29.3

%


27.0

%

Total

$

1,712,566



$



$

1,712,566



$

1,189,897



$



$

1,189,897



100.0

%


100.0

%


100.0

%


100.0

%





















GROSS MARGIN:




















Temporary and consultant staffing

$

421,419



$



$

421,419



$

293,318



$



$

293,318



40.0

%


37.5

%


40.0

%


37.5

%

Permanent placement staffing

156,170





156,170



87,043





87,043



99.8

%


99.8

%


99.8

%


99.8

%

Protiviti

147,738



(277)



147,461



86,985



3,392



90,377



29.5

%


27.1

%


29.4

%


28.1

%

Total

$

725,327



$

(277)



$

725,050



$

467,346



$

3,392



$

470,738



42.4

%


39.3

%


42.3

%


39.6

%





















SELLING GENERAL AND ADMINISTRATIVE EXPENSE:




















Temporary and consultant staffing

$

310,112



$

1,297



$

311,409



$

269,963



$

(20,424)



$

249,539

...

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