Robert Half International : REPORTS FIRST-QUARTER FINANCIAL RESULTS - Form 8-K
April 26, 2022 at 04:37 pm EDT
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ROBERT HALF REPORTS FIRST-QUARTER FINANCIAL RESULTS
MENLO PARK, Calif., April 26, 2022 - Robert Half International Inc. (NYSE symbol: RHI) today reported revenues and earnings for the first quarter ended March 31, 2022.
For the quarter ended March 31, 2022, net income was $168 million, or $1.52 per share, on revenues of $1.815 billion. Net income for the prior year's first quarter was $111 million, or $.98 per share, on revenues of $1.398 billion.
"We are very pleased to report another very strong quarter driven by a robust demand environment across the globe," said M. Keith Waddell, president and chief executive officer of Robert Half. "First quarter revenues grew 30 percent, and net income grew 52 percent on a year-over-year basis. Our permanent placement talent solutions operations again led the way, achieving year-over-year revenue growth of 67 percent. Our contract talent solutions and Protiviti also continued to post very strong results, growing year-over-year revenues by 30 percent and 19 percent, respectively.
"We are proud to be recently named one of only a select few companies by FORTUNE as a Most Admired Company for 25 consecutive years, in addition to making Barron's annual list of the 100 Most Sustainable Companies and Forbes' list of America's Best Employers for Diversity. This recognition would not be possible without the dedication and exemplary efforts of our employees across the globe," 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 on April 26 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# 9245126. The conference call also will be archived in audio format on the company's website at www.roberthalf.com.
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 talent solutions for finance and accounting, technology, marketing and creative, legal, and administrative and customer support roles.
Named to FORTUNE's World's Most Admired Companies®, the Bloomberg Gender-Equality Index and Forbes' list of America's Best Employers 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
- 2 -
ROBERT HALF INTERNATIONAL INC.
SUMMARY OF OPERATIONS
(in thousands, except per share amounts)
Quarter Ended March 31,
2022
2021
(Unaudited)
Service revenues
$
1,814,834
$
1,398,380
Costs of services
1,042,988
836,669
Gross margin
771,846
561,711
Selling, general and administrative expenses
514,194
423,062
(Income) loss from investments held in employee deferred compensation
trusts (which is completely offset by related costs and expenses)
30,001
(11,988)
Amortization of intangible assets
417
576
Interest income, net
(166)
(45)
Income before income taxes
227,400
150,106
Provision for income taxes
59,161
39,508
Net income
$
168,239
$
110,598
Diluted net income per share
$
1.52
$
.98
Shares:
Basic
109,218
111,424
Diluted
110,591
112,496
- 3 -
ROBERT HALF INTERNATIONAL INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)
Quarter Ended March 31,
2022
2021
(Unaudited)
SELECTED CASH FLOW INFORMATION:
Depreciation
$
11,080
$
13,962
Capitalized cloud computing implementation costs
$
9,464
$
8,488
Capital expenditures
$
14,987
$
9,739
Open market repurchases of common stock (shares)
475
797
March 31,
2022
2021
(Unaudited)
SELECTED BALANCE SHEET INFORMATION:
Cash and cash equivalents
$
550,330
$
497,930
Accounts receivable, net
$
1,071,608
$
799,673
Total assets
$
2,950,766
$
2,565,169
Total current liabilities
$
1,289,031
$
1,076,586
Total stockholders' equity
$
1,452,768
$
1,197,699
- 4 -
ROBERT HALF INTERNATIONAL INC.
SUPPLEMENTAL FINANCIAL INFORMATION (UNAUDITED)
(in thousands)
The Company recently completed a multiyear process to unify its family of Robert Half endorsed divisional brands to one single specialized brand, Robert Half. This simplifies the Company's go-to-market brand structure for clients and candidates and provides leverage for greater brand awareness and allows future flexibility to expand the Company's existing practice groups without the need for new brands. In Q1 2022, the Company's financial disclosures for contract talent solutions (formerly temporary and consultant staffing) are based on functional specialization rather than the previously branded divisions. The functional specializations are: finance and accounting, administrative and customer support, and technology. Finance and accounting combines the former Accountemps and Robert Half Management Resources, administrative and customer support was previously Office Team, and technology was formerly Robert Half Technology. Protiviti and permanent placement talent solutions continue to be reported separately. What was previously referred to as staffing operations is now referred to as talent solutions. There is no change to the underlying business operations or organization.
The Company's presentation of service revenues for finance and accounting, administrative and customer support, and technology include intersegment revenues from services provided to Protiviti in connection with the Company's blended business solutions. This is how the Company measures and manages these businesses 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.
2020
2021
2022
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
SERVICE REVENUES:
Finance and accounting
$
701,762
$
496,573
$
506,515
$
552,116
$
600,387
$
663,892
$
732,365
$
768,204
$
801,690
Administrative and customer support
239,979
136,299
173,685
214,985
220,467
263,192
279,370
295,872
284,906
Technology
196,652
162,028
161,007
175,730
172,239
194,233
215,500
213,414
213,327
Elimination of intersegment revenues
(46,273)
(41,514)
(59,816)
(92,393)
(103,818)
(143,036)
(172,534)
(161,004)
(144,200)
Total contract talent solutions
1,092,120
753,386
781,391
850,438
889,275
978,281
1,054,701
1,116,486
1,155,723
Permanent placement talent solutions
120,489
71,030
87,203
91,387
111,703
143,640
156,444
158,133
186,782
Protiviti
294,082
283,910
321,303
362,261
397,402
458,660
501,421
495,298
472,329
Total service revenues
$
1,506,691
$
1,108,326
$
1,189,897
$
1,304,086
$
1,398,380
$
1,580,581
$
1,712,566
$
1,769,917
$
1,814,834
- 5 -
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 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 management 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 functional specializations and segments 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.
In order to calculate constant currency revenue growth rates, as reported amounts are retranslated using foreign currency exchange rates from the prior year's comparable period. Management then calculates a global, weighted-average number of billing days for each reporting period based upon input from all countries and all functional specializations and segments. 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. Same billing day growth rates are then calculated based upon the per billing day amounts. The term "as adjusted" means that the impact of different billing days and currency fluctuations are removed from the revenue growth rate calculation.
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.
- 6 -
ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED SUMMARY OF OPERATIONS RECONCILIATION (UNAUDITED)
(in thousands)
Quarter Ended March 31,
Relationships
2022
2021
2022
2021
2022
2021
Reported
Adjustments
Adjusted (1)
Reported
Adjustments
Adjusted (1)
Reported
Adjusted
SERVICE REVENUES:
Finance and accounting
$
801,690
$
-
$
801,690
$
600,387
$
-
$
600,387
44.2
%
42.9
%
44.2
%
42.9
%
Administrative and customer support
284,906
-
284,906
220,467
-
220,467
15.7
%
15.8
%
15.7
%
15.8
%
Technology
213,327
-
213,327
172,239
-
172,239
11.7
%
12.3
%
11.7
%
12.3
%
Elimination of intersegment
revenues
(144,200)
-
(144,200)
(103,818)
-
(103,818)
(7.9
%)
(7.4
%)
(7.9
%)
(7.4
%)
Total contract talent solutions
1,155,723
-
1,155,723
889,275
-
889,275
63.7
%
63.6
%
63.7
%
63.6
%
Permanent placement talent solutions
186,782
-
186,782
111,703
-
111,703
10.3
%
8.0
%
10.3
%
8.0
%
Protiviti
472,329
-
472,329
397,402
-
397,402
26.0
%
28.4
%
26.0
%
28.4
%
Total service revenues
$
1,814,834
$
-
$
1,814,834
$
1,398,380
$
-
$
1,398,380
100.0
%
100.0
%
100.0
%
100.0
%
GROSS MARGIN:
Contract talent solutions
$
461,861
$
-
$
461,861
$
344,931
$
-
$
344,931
40.0
%
38.8
%
40.0
%
38.8
%
Permanent placement talent solutions
186,449
-
186,449
111,498
-
111,498
99.8
%
99.8
%
99.8
%
99.8
%
Protiviti
123,536
(3,846)
119,690
105,282
1,688
106,970
26.2
%
26.5
%
25.3
%
26.9
%
Total
$
771,846
$
(3,846)
$
768,000
$
561,711
$
1,688
$
563,399
42.5
%
40.2
%
42.3
%
40.3
%
SELLING GENERAL AND
ADMINISTRATIVE EXPENSE:
Contract talent solutions
$
305,334
$
23,281
$
328,615
$
278,547
$
(9,151)
$
269,396
26.4
%
31.3
%
28.4
%
30.3
%
Permanent placement talent solutions
146,247
2,874
149,121
94,867
(1,149)
93,718
78.3
%
84.9
%
79.8
%
83.9
%
Protiviti
62,613
-
62,613
49,648
-
49,648
13.3
%
12.5
%
13.3
%
12.5
%
Total
$
514,194
$
26,155
$
540,349
$
423,062
$
(10,300)
$
412,762
28.3
%
30.3
%
29.8
%
29.5
%
OPERATING/SEGMENT INCOME:
Contract talent solutions
$
156,527
$
(23,281)
$
133,246
$
66,384
$
9,151
$
75,535
13.5
%
7.5
%
11.5
%
8.5
%
Permanent placement talent solutions
40,202
(2,874)
37,328
16,631
1,149
17,780
21.5
%
14.9
%
20.0
%
15.9
%
Protiviti
60,923
(3,846)
57,077
55,634
1,688
57,322
12.9
%
14.0
%
12.1
%
14.4
%
Total
$
257,652
$
(30,001)
$
227,651
$
138,649
$
11,988
$
150,637
14.2
%
9.9
%
12.5
%
10.8
%
(Income) loss from investments held in
employee deferred compensation trusts
30,001
(30,001)
-
(11,988)
11,988
-
1.7
%
(0.9
%)
-
-
Amortization of intangible assets
417
-
417
576
-
576
0.0
%
0.1
%
0.0
%
0.1
%
Interest income, net
(166)
-
(166)
(45)
-
(45)
0.0
%
0.0
%
0.0
%
0.0
%
Income before income taxes
$
227,400
$
-
$
227,400
$
150,106
$
-
$
150,106
12.5
%
10.7
%
12.5
%
10.7
%
(1) Changes in the Company's deferred compensation obligations are included in selling, general and administrative expense or, in the case of Protiviti, costs of services, while the related investment (income) loss is presented separately. The non-GAAP financial measures shown in the table above are adjusted to reclassify investment (income) loss from investments held in employee deferred compensation trusts to the same line item, which includes the corresponding change in obligation. These adjustments have no impact to income before income taxes.
- 7 -
ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
COMBINED SEGMENT INCOME RECONCILIATION (UNAUDITED):
(1) Service revenues for finance and accounting, administrative and customer support and technology include intersegment revenues, which represent revenues from services provided to Protiviti in connection with the Company's blended business solutions. Intersegment revenues for each functional specialization are aggregated and then eliminated as a single line item.
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 functional specializations. 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 "As Adjusted" means that the impact of different billing days and constant currency fluctuations 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 10-12.
RHI - Robert Half International Inc. published this content on 26 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2022 20:34:12 UTC.
Robert Half International, Inc. is the world leader of specialized recruitment. The group operates essentially in the financial and accounting, bank and insurance, legal and tax sectors. Net sales break down as follows:
- staff temporary investment (62.6%);
- services (27.4%): consulting services on venture managing linked to commercial and technologies activity and internal audit services;
- staff permanent placement (10%).
The United States account for 78.9% of net sales.