What changed in this filing

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Item 1. Financial Statements

2022-10-28 compared with 2022-08-03 · 104 added, 71 removed, 468 unchanged (27% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30,

2022 December 31, 2021

37 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

6 unchanged sentences

Amortization of intangible assets 417 572 1,250 1,724

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

Interest income, net ( 2,346 ) ( 238 ) ( 3,230 ) ( 145 )

Income before income taxes 225,624 227,658 693,857 581,638

13 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

32 unchanged sentences

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

Net income — — — — 166,206 166,206

Other comprehensive income (loss) — — — ( 24,152 ) — ( 24,152 )

Dividends declared ($ 0.43 per share)

— — — — ( 46,944 ) ( 46,944 )

Net issuances of restricted stock — — — — — —

Stock-based compensation — — 14,081 — — 14,081

Repurchases of common stock ( 1,109 ) ( 2 ) — — ( 85,940 ) ( 85,942 )

Balance at September 30, 2022

108,498 $ 108 $ 1,279,576 $ ( 71,759 ) $ 282,992 $ 1,490,917

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in thousands, except per share amounts)

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

17 unchanged sentences

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

Net income — — — — 170,871 170,871

Other comprehensive income (loss) — — — ( 10,008 ) — ( 10,008 )

Dividends declared ($ 0.38 per share)

— — — — ( 42,463 ) ( 42,463 )

Net issuances of restricted stock 1 — — — — —

Stock-based compensation — — 14,061 — — 14,061

Repurchases of common stock ( 742 ) ( 1 ) — — ( 75,667 ) ( 75,668 )

Balance at September 30, 2021 111,229 $ 111 $ 1,222,117 $ ( 19,100 ) $ 112,915 $ 1,316,043

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

41 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2022

September 30, 2022

Note A— Summary of Significant Accounting Policies

4 unchanged sentences

Robert Half is also the parent company of Protiviti ® , a global consulting firm that provides internal audit, risk, business, and technology consulting solutions.

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

The Company 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, provides leverage for greater brand awareness, and allows future flexibility to expand the Company’s existing functional specializations.

20 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 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.

As of September 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)

June 30, 2022

September 30, 2022

Costs of Services.

4 unchanged sentences

The Company expenses all advertising costs as incurred.

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.

Advertising costs were $ 13.5 million and $ 42.2 million for the three and nine months ended September 30, 2022, respectively, and $ 13.9 million and $ 34.1 million for the three and nine months ended September 30, 2021, respectively.

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

Under the Company’s employee deferred compensation plans, employees direct the investment of their account balances, and the Company invests amounts held in the associated investment trusts consistent with these directions.

As realized and unrealized investment gains and losses occur, the Company’s deferred compensation obligation to employees changes accordingly.

Changes in the Company’s deferred compensation obligations remain in selling, general and administrative expenses or, in the case of Protiviti, costs of services.

As realized and unrealized investment gains and losses occur, the Company’s deferred compensation obligation to employees changes and adjustments are recorded in selling, general and administrative expenses or, in the case of Protiviti, costs of services.

The value of the related investment trust assets also changes by an equal and offsetting amount, leaving no net cost to the Company.

The Company’s (income) loss from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments.

The Company’s (income) loss from investments held in employee deferred compensation trusts consists primarily of unrealized and realized gains and losses and dividend income from trust investments and is presented separately on the unaudited Condensed Consolidated Statements of Operations.

The following table presents the Company’s (income) loss from investments held in employee deferred compensation trusts (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

14 unchanged sentences

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

June 30, 2022

September 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 June 30, 2022

Balance at September 30, 2022

Quoted Prices

24 unchanged sentences

The Company applies credit loss estimates to these pooled receivables to determine expected credit losses.

ROBERT HALF INTERNATIONAL INC.

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

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):

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

Allowance for Credit Losses

3 unchanged sentences

Other, including foreign currency translation adjustments ( 1,655 )

Balance as of June 30, 2022

Balance as of September 30, 2022

ROBERT HALF INTERNATIONAL INC.

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

September 30, 2022

Note B— New Accounting Pronouncements

22 unchanged sentences

Fees paid to Time Management or Vendor Management service providers selected by clients are recorded as a reduction of revenues, as the Company is not the primary obligor with respect to those services.

ROBERT HALF INTERNATIONAL INC.

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

June 30, 2022

Permanent placement talent solutions revenues.

4 unchanged sentences

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

ROBERT HALF INTERNATIONAL INC.

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

September 30, 2022

Protiviti revenues.

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

13 unchanged sentences

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.

As of September 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 $ 164.8 million.

Of this amount, $ 150.1 million is expected to be recognized within the next twelve months .

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.

As of September 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 $ 135.4 million.

ROBERT HALF INTERNATIONAL INC.

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

June 30, 2022

September 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 June 30, 2022 (in thousands):

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

Contract Liabilities

3 unchanged sentences

Other, including translation adjustments ( 2,103 )

Balance as of June 30, 2022

Balance as of September 30, 2022

Note D— Other Current Assets

Other current assets consisted of the following (in thousands):

September 30,

2022 December 31, 2021

5 unchanged sentences

Property and equipment consisted of the following (in thousands):

September 30,

2022 December 31, 2021

8 unchanged sentences

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

June 30, 2022

September 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 $ 22.5 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.

Operating lease expenses were $ 22.0 million and $ 67.1 million for the three and nine months ended September 30, 2022, respectively, and $ 21.6 million and $ 64.8 million for the three and nine months ended September 30, 2021, respectively.

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

Six Months Ended

Nine Months Ended

September 30,

Cash paid for operating lease liabilities $ 69,696 $ 68,509

Right-of-use assets obtained in exchange for operating lease liabilities from new leases $ 17,384 $ 8,467

Right-of-use assets obtained in exchange for operating lease liabilities from lease

modifications or reassessments

$ 17,744 $ 13,829

Right-of-use assets obtained in exchange for new operating lease liabilities $ 41,916 $ 32,888

Supplemental balance sheet information related to leases consisted of the following:

September 30,

2022 December 31,

1 unchanged sentence

Weighted average discount rate for operating leases 2.3 % 2.3 %

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)

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

2022 (excluding the nine months ended September 30, 2022)

Thereafter 15,481

1 unchanged sentence

Present value of operating lease liabilities (a) $ 232,010

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

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.

(a) Includes the current portion of $ 81.1 million for operating leases.

As of September 30, 2022, the Company had additional future minimum lease obligations totaling $ 5.7 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)

June 30, 2022

September 30, 2022

Note G— Goodwill

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

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

Contract talent solutions Permanent placement talent solutions Protiviti Total

2 unchanged sentences

Foreign currency translation adjustments ( 821 ) ( 160 ) ( 448 ) ( 1,429 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ 133,763 $ 26,029 $ 61,634 $ 221,426

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

Accrued payroll and benefit costs consisted of the following (in thousands):

September 30,

2022 December 31, 2021

3 unchanged sentences

Accrued payroll and benefit costs $ 553,606 $ 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 June 30, 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 September 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 $ 416.7 million and $ 495.0 million as of June 30, 2022 and December 31, 2021, respectively.

The asset value of the nonqualified plans was $ 404.0 million and $ 495.0 million as of September 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 $ 440.3 million and $ 535.3 million as of June 30, 2022 and December 31, 2021, respectively.

The liability value for the nonqualified plans was $ 435.0 million and $ 535.3 million as of September 30, 2022 and December 31, 2021, respectively.

ROBERT HALF INTERNATIONAL INC.

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

June 30, 2022

September 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

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

27 unchanged sentences

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

June 30, 2022

September 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.

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

There were no borrowings under the Credit Agreement as of September 30, 2022, or December 31, 2021.

Note K— Stockholders’ Equity

Stock Repurchase Program.

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

As of September 30, 2022, the Company is authorized to repurchase, from time to time, up to 4.7 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 nine months ended September 30, 2022 and 2021, are reflected in the following table (in thousands):

Nine Months Ended

September 30,

Common stock repurchased (in shares) 2,493 2,254

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 six months ended June 30, 2022 and 2021, are reflected in the following table (in thousands):

Six Months Ended

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

Nine Months Ended

September 30,

Repurchases related to employee stock plans (in shares) 297 253

2 unchanged sentences

Treasury stock is accounted for using the cost method.

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.

Treasury stock activity for the nine months ended September 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.

1 unchanged sentence

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

June 30, 2022

September 30, 2022

Note L— Net Income Per Share

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):

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

16 unchanged sentences

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) expense, intangible assets amortization expense, and income taxes.

The Company evaluates performance based on income before net interest income, 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):

September 30, 2022

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

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

Amortization of intangible assets 417 572 1,250 1,724

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

Interest income, net ( 2,346 ) ( 238 ) ( 3,230 ) ( 145 )

Income before income taxes $ 225,624 $ 227,658 $ 693,857 $ 581,638

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

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.

Intersegment revenues between the contract talent solutions segment and Protiviti segment were $ 132.7 million and $ 414.5 million for the three and nine months ended September 30, 2022, respectively, and $ 172.5 million and $ 419.4 million nine months ended September 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.

Note N— Subsequent Events

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

On October 27, 2022, the Company announced the following:

Quarterly dividend per share $ 0.43

Declaration date August 2, 2022

Record date August 25, 2022

Payment date September 15, 2022

Declaration date October 27, 2022

Record date November 25, 2022

Payment date December 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