What changed in this filing

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Item 1. Financial Statements

2022-08-03 compared with 2022-05-04 · 102 added, 75 removed, 437 unchanged (29% of the section changed)

30 unchanged sentences

authorized 260,000,000 shares;

outstanding 110,746,970 shares and 110,685,989 shares

issued and outstanding 109,606,600 shares and 110,685,989 shares

Additional paid-in capital 1,265,495 1,235,903

9 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Service revenues $ 1,862,827 $ 1,580,581 $ 3,677,661 $ 2,978,961

5 unchanged sentences

Amortization of intangible assets 416 576 833 1,152

Interest income, net ( 166 ) ( 45 )

Interest (income) expense, net ( 718 ) 151 ( 884 ) 105

Income before income taxes 240,833 203,862 468,233 353,968

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

COMPREHENSIVE INCOME (LOSS):

2 unchanged sentences

Foreign currency translation adjustments, net of tax ( 24,048 ) 4,398 ( 25,016 ) ( 4,439 )

Foreign defined benefit plans, net of tax 16 40

Foreign defined benefit plan adjustments, net of tax 15 39 31 79

Total other comprehensive income (loss) ( 24,033 ) 4,437 ( 24,985 ) ( 4,360 )

18 unchanged sentences

110,747 $ 111 $ 1,251,086 $ ( 23,574 ) $ 225,145 $ 1,452,768

Net income — $ — $ — $ — $ 175,821 $ 175,821

Other comprehensive income (loss) — — — ( 24,033 ) — ( 24,033 )

Dividends declared ($ 0.43 per share)

— — — — ( 47,325 ) ( 47,325 )

Net issuances of restricted stock 4 — — — — —

Stock-based compensation — — 14,409 — — 14,409

Repurchases of common stock ( 1,144 ) ( 1 ) — — ( 103,971 ) ( 103,972 )

Balance at June 30, 2022 109,607 $ 110 $ 1,265,495 $ ( 47,607 ) $ 249,670 $ 1,467,668

Common Stock Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total

9 unchanged sentences

Balance at March 31, 2021 112,682 $ 113 $ 1,194,153 $ ( 13,529 ) $ 16,962 $ 1,197,699

Net income — $ — $ — $ — $ 149,213 $ 149,213

Other comprehensive income (loss) — — — 4,437 — 4,437

Dividends declared ($ 0.38 per share)

— — — — ( 42,720 ) ( 42,720 )

Net issuances of restricted stock 5 — — — — —

Stock-based compensation — — 13,903 — — 13,903

Repurchases of common stock ( 717 ) ( 1 ) — — ( 63,281 ) ( 63,282 )

Balance at June 30, 2021 111,970 $ 112 $ 1,208,056 $ ( 9,092 ) $ 60,174 $ 1,259,250

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

3 unchanged sentences

(in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

14 unchanged sentences

Accounts payable and accrued expenses ( 8,374 ) 17,138

Accrued payroll and benefit cost ( 39,435 ) 13,009

Accrued payroll and benefit costs 15,848 68,340

Employee deferred compensation plan obligations ( 94,957 ) 46,236

18 unchanged sentences

Non-cash items:

Stock repurchases awaiting settlement $ 5,872 $ 3,912

Repurchases of common stock awaiting settlement $ 11,296 $ 1,345

Fund exchanges within employee deferred compensation trusts $ 66,645 $ 63,154

3 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2022

June 30, 2022

Note A— Summary of Significant Accounting Policies

5 unchanged sentences

The Company recently completed a multiyear process to unify its family of Robert Half endorsed divisional brands to a single 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 functional specializations.

This simplifies the Company’s go-to-market brand structure for clients and candidates, provides leverage for greater brand awareness, and allows future flexibility to expand the Company’s existing functional specializations.

In connection with this process, the Company’s current financial statement disclosures reflect new names for its reportable segments, including contract talent solutions (formerly temporary and consultant staffing), permanent placement talent solutions (formerly permanent placement staffing) and Protiviti (formerly risk consulting and internal audit services).

19 unchanged sentences

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

As of March 31, 2022, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, accrued medical expenses, income and other taxes, assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock grants subject to market conditions.

We continue to monitor the global economic uncertainty as a result of coronavirus (“COVID-19”) to assess the impact on the Company’s results of operations, financial condition, and liquidity.

As of June 30, 2022, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, accrued medical expenses, income and other taxes, assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock grants subject to market conditions.

Actual results and outcomes may differ from management’s estimates and assumptions.

6 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

Costs of Services.

4 unchanged sentences

The Company expenses all advertising costs as incurred.

Advertising costs were $ 14.2 million and $ 8.4 million for the three months ended March 31, 2022 and 2021, respectively.

Advertising costs were $ 14.5 million and $ 28.7 million for the three and six months ended June 30, 2022, respectively, and $ 11.8 million and $ 20.2 million for the three and six months ended June 30, 2021, respectively.

(Income) Loss from Investments Held in Employee Deferred Compensation Trusts .

6 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Dividend income $ ( 2,315 ) $ ( 2,556 ) $ ( 2,610 ) $ ( 2,848 )

8 unchanged sentences

inputs other than the quoted prices in active markets that are observable either directly or indirectly

unobservable inputs in which there is little or no market data, which requires management’s best

estimates and assumptions that market participants would use in pricing the asset or liability

The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximates fair value because of their short-term nature.

unobservable inputs in which there is little or no market data, which requires management’s best estimates and assumptions that market participants would use in pricing the asset or liability

The carrying value of cash and cash equivalents, net accounts receivable, and accounts payable and accrued expenses approximates fair value because of their short-term nature.

The Company holds mutual funds and money market funds to satisfy its obligations under its employee deferred compensation plans, which are carried at fair value based on quoted market prices in active markets for identical assets (level 1).

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

The following table sets forth the composition of the underlying assets which comprise the Company’s deferred compensation trust assets (in thousands):

Fair Value Measurements Using

Balance at March 31, 2022

Balance at June 30, 2022

Quoted Prices

21 unchanged sentences

The Company is exposed to credit losses resulting from the inability of its customers to make required payments.

The Company establishes an allowance for these potential credit losses based on its review of customers’ credit profiles, historical loss statistics, prepayments, recoveries, age of customer receivable balances, current business conditions and macro-economic trends.

The Company considers risk characteristics of trade receivables based on asset type and geographical locations to evaluate trade receivables on a collective basis.

2 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

The following table sets forth the activity in the allowance for credit losses from December 31, 2021 through March 31, 2022 (in thousands):

June 30, 2022

The following table sets forth the activity in the allowance for credit losses from December 31, 2021 through June 30, 2022 (in thousands):

Allowance for Credit Losses

2 unchanged sentences

Deductions ( 2,206 )

Other, including translation adjustments ( 123 )

Balance as of March 31, 2022

Other, including foreign currency translation adjustments ( 805 )

Balance as of June 30, 2022

Note B— New Accounting Pronouncements

24 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

Permanent placement talent solutions revenues.

3 unchanged sentences

Fees to clients are generally calculated as a percentage of the new employee’s annual compensation.

No fees for permanent placement talent solution services are charged to employment candidates.

No fees for permanent placement talent solutions services are charged to employment candidates.

Protiviti revenues.

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Contract talent solutions

11 unchanged sentences

The term between invoicing and when payment is due is not significant.

Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract value is allocated based on relative stand-alone selling values of the services and products in the arrangement.

As of March 31, 2022, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 147.7 million.

Contracts with multiple performance obligations are recognized as performance obligations are delivered, and contract value is allocated based on relative standalone selling values of the services and products in the arrangement.

As of June 30, 2022, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 202.4 million.

Of this amount, $ 183.6 million is expected to be recognized within the next twelve months .

As of March 31, 2021, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 170.0 million.

As of June 30, 2021, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 173.5 million.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

Contract liabilities are recorded when cash payments are received or due in advance of performance and are reflected in accounts payable and accrued expenses on the unaudited Condensed Consolidated Statements of Financial Position.

The following table sets forth the activity in contract liabilities from December 31, 2021 through March 31, 2022 (in thousands):

The following table sets forth the activity in contract liabilities from December 31, 2021 through June 30, 2022 (in thousands):

Contract Liabilities

3 unchanged sentences

Other, including translation adjustments ( 876 )

Balance as of March 31, 2022

Balance as of June 30, 2022

Note D— Other Current Assets

17 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

Note F— Leases

1 unchanged sentence

The Company’s leases have remaining lease terms of less than 1 year to 8 years, some of which include options to extend the leases for up to 10 years, and some of which include options to terminate the leases within 1 year.

Operating lease expenses were $ 22.6 million and $ 21.5 million for the three months ended March 31, 2022 and 2021, respectively.

Operating lease expenses were $ 22.5 million and $ 45.1 million for the three and six months ended June 30, 2022, respectively, and $ 21.7 million and $ 43.2 million for the three and six months ended June 30, 2021, respectively.

Supplemental cash flow information related to leases consisted of the following (in thousands):

Three Months Ended

Six Months Ended

Cash paid for operating lease liabilities $ 46,743 $ 45,531

7 unchanged sentences

Weighted average discount rate for operating leases 2.3 % 2.3 %

Future minimum lease payments under non-cancellable leases as of March 31, 2022 were as follows (in thousands):

2022 (excluding the three months ended March 31, 2022)

Future minimum lease payments under non-cancellable leases as of June 30, 2022, were as follows (in thousands):

2022 (excluding the six months ended June 30, 2022)

Thereafter 14,623

2 unchanged sentences

(a) Includes current portion of $ 84.4 million for operating leases.

As of March 31, 2022, the Company had additional future minimum lease obligations totaling $ 6.0 million under executed operating lease contracts that had not yet commenced.

As of June 30, 2022, the Company had additional future minimum lease obligations totaling $ 6.1 million under executed operating lease contracts that had not yet commenced.

These operating leases include agreements for corporate and field office facilities with lease terms of 1 to 6 years.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

Note G— Goodwill

The following table sets forth the activity in goodwill from December 31, 2021 through March 31, 2022 (in thousands):

The following table sets forth the activity in goodwill from December 31, 2021 through June 30, 2022 (in thousands):

Contract talent solutions Permanent placement talent solutions Protiviti Total

2 unchanged sentences

Foreign currency translation adjustments ( 369 ) ( 72 ) ( 146 ) ( 587 )

Balance as of March 31, 2022

Balance as of June 30, 2022

$ 134,215 $ 26,117 $ 61,936 $ 222,268

The Company completed its annual assessment of the recoverability of goodwill during the quarter ended June 30, 2022, and determined there were no events or circumstances that would more likely than not reduce the fair value of the Company’s reporting units below their carrying value.

Note H— Accrued Payroll and Benefit Costs

5 unchanged sentences

Accrued payroll and benefit costs $ 545,342 $ 540,183

The Company, under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, deferred paying $ 51.1 million of applicable payroll taxes as of both March 31, 2022 and December 31, 2021, which is expected to be paid during the next 12 months and is included in payroll taxes .

The Company, under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act, deferred paying $ 51.1 million of applicable payroll taxes as of both June 30, 2022 and December 31, 2021, which is expected to be paid during the next 12 months and is included in payroll taxes .

Note I— Employee Deferred Compensation Plan Obligations

4 unchanged sentences

These plans include provisions for salary deferrals and discretionary contributions.

The asset value of the nonqualified plans was $ 476.8 million and $ 495.0 million as of March 31, 2022 and December 31, 2021, respectively.

The asset value of the nonqualified plans was $ 416.7 million and $ 495.0 million as of June 30, 2022 and December 31, 2021, respectively.

The Company holds these assets to satisfy the Company’s liabilities under its deferred compensation plans.

The liability value for the nonqualified plans was $ 495.3 million and $ 535.3 million as of March 31, 2022 and December 31, 2021, respectively.

The liability value for the nonqualified plans was $ 440.3 million and $ 535.3 million as of June 30, 2022 and December 31, 2021, respectively.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

June 30, 2022

The following table presents the Company’s compensation expense related to its qualified defined contribution plans and nonqualified plans (in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Contribution expense $ 12,794 $ 13,918 $ 24,996 $ 23,472

1 unchanged sentence

$ ( 52,828 ) $ 41,728 $ ( 70,627 ) $ 63,269

The Company has statutory defined contribution plans and defined benefit plans outside the U.S., which are not material.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

The Company has statutory defined contribution plans and defined benefit plans outside the United States of America, which are not material.

Note J— Commitments and Contingencies

20 unchanged sentences

Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.

In May 2021, the Company entered into an amendment to extend the maturity of its $ 100 million unsecured revolving credit facility (the “Credit Agreement”) to May 2024.

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing, which typically will be calculated according to the LIBOR, or an alternative base rate, plus an applicable margin.

The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of March 31, 2022.

There were no borrowings under the Credit Agreement as of March 31, 2022.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

June 30, 2022

In May 2021, the Company entered into an amendment to extend the maturity of its $ 100.0 million unsecured revolving credit facility (the “Credit Agreement”) to May 2024.

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing, which typically will be calculated according to the London Interbank Offered Rate or an alternative base rate, plus an applicable margin.

The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of June 30, 2022.

There were no borrowings under the Credit Agreement as of June 30, 2022.

Note K— Stockholders’ Equity

Stock Repurchase Program.

As of March 31, 2022, the Company is authorized to repurchase, from time to time, up to 6.7 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.

The number and the cost of common stock shares repurchased during the three months ended March 31, 2022 and 2021 are reflected in the following table (in thousands):

Three Months Ended

As of June 30, 2022, the Company is authorized to repurchase, from time to time, up to 5.8 million additional shares of the Company’s common stock on the open market or in privately negotiated transactions, depending on market conditions.

The number and the cost of common stock shares repurchased during the six months ended June 30, 2022 and 2021, are reflected in the following table (in thousands):

Six Months Ended

Common stock repurchased (in shares) 1,386 1,514

1 unchanged sentence

Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable statutory withholding taxes.

The number and the cost of employee stock plan repurchases made during the three months ended March 31, 2022 and 2021 are reflected in the following table (in thousands):

Three Months Ended

The number and the cost of employee stock plan repurchases made during the six months ended June 30, 2022 and 2021, are reflected in the following table (in thousands):

Six Months Ended

Repurchases related to employee stock plans (in shares) 295 251

2 unchanged sentences

Treasury stock is accounted for using the cost method.

Treasury stock activity for the three months ended March 31, 2022 and 2021 (consisting of purchase of shares for the treasury) is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

Treasury stock activity for the six months ended June 30, 2022 and 2021, (consisting of purchase of shares for the treasury) is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity.

Repurchases of shares and issuances of dividends are applied first to the extent of retained earnings and any remaining amounts are applied to additional paid-in capital.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

June 30, 2022

Note L— Net Income Per Share

The calculation of net income per share for the three months ended March 31, 2022 and 2021 is reflected in the following table (in thousands, except per share amounts):

The calculation of net income per share for the three and six months ended June 30, 2022 and 2021, is reflected in the following table (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Net income $ 175,821 $ 149,213 $ 344,060 $ 259,811

8 unchanged sentences

Diluted $ 1.60 $ 1.33 $ 3.12 $ 2.32

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

Note M— Business Segments

2 unchanged sentences

Operating segments are defined as components of the Company for which separate financial information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and assess performance.

The contract talent solutions segment provides specialized engagement professionals in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and web design fields.

The permanent placement talent solutions segment provides full-time personnel in the accounting, finance, administrative and office, legal, and information technology fields.

The contract talent solutions and permanent placement talent solutions segments provide specialized engagement professionals and full-time personnel, respectively, for finance and accounting, technology, marketing and creative, legal, administrative and customer support roles.

The Protiviti segment provides business and technology risk consulting and internal audit services.

The accounting policies of the segments are set forth in Note A—“Summary of Significant Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.

The Company evaluates performance based on income before net interest income, intangible assets amortization expense, and income taxes.

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three months ended March 31, 2022 and 2021 (in thousands):

The Company evaluates performance based on income before net interest (income) expense, intangible assets amortization expense, and income taxes.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

June 30, 2022

The following table provides a reconciliation of service revenues and segment income by reportable segment to consolidated results for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Service revenues

9 unchanged sentences

Amortization of intangible assets 416 576 833 1,152

Interest income, net ( 166 ) ( 45 )

Interest (income) expense, net ( 718 ) 151 ( 884 ) 105

Income before income taxes $ 240,833 $ 203,862 $ 468,233 $ 353,968

Service revenues presented above are shown net of eliminations of intersegment revenues.

Intersegment revenues

between the contract talent solutions segment and Protiviti segment were $ 144.2 million and $ 103.8 million three months ended March 31, 2022 and 2021, respectively.

Intersegment revenues between the contract talent solutions segment and Protiviti segment were $ 137.5 million and $ 281.7 million for the three and six months ended June 30, 2022, respectively, and $ 143.0 million and $ 246.8 million six months ended June 30, 2021, respectively.

Revenue and direct costs related to the intersegment activity are reflected in the Protiviti segment, including the costs of candidate payroll, fringe benefits and incremental recruiter compensation.

ROBERT HALF INTERNATIONAL INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)—(Continued)

March 31, 2022

Note N— Subsequent Events

On May 3, 2022, the Company announced the following:

On August 2, 2022, the Company announced the following:

Quarterly dividend per share $ 0.43

Declaration date May 3, 2022

Record date May 25, 2022

Payment date June 15, 2022

Declaration date August 2, 2022

Record date August 25, 2022

Payment date September 15, 2022

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements