What changed in this filing

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Item 1. Financial Statements

2023-08-01 compared with 2023-05-03 · 129 added, 86 removed, 398 unchanged (35% of the section changed)

FINANCIAL STATEMENTS

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)

8 unchanged sentences

Right-of-use assets 184,484 201,998

Other intangible assets, net 4,596 5,317

Goodwill 238,222 237,810

Noncurrent deferred income taxes 128,245 124,564

Other noncurrent assets 32,319 5,317

Total assets $ 3,067,641 $ 2,964,488

8 unchanged sentences

Total liabilities 1,442,370 1,395,930

Commitments and Contingencies (Note J)

Commitments and Contingencies (Note K)

STOCKHOLDERS’ EQUITY

11 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Service revenues $ 1,639,478 $ 1,862,827 $ 3,355,813 $ 3,677,661

17 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

1 unchanged sentence

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

COMPREHENSIVE INCOME (LOSS):

7 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

13 unchanged sentences

107,763 $ 108 $ 1,308,998 $ ( 38,737 ) $ 328,112 $ 1,598,481

Net income — — — — 106,292 106,292

Other comprehensive income (loss) — — — 2,148 — 2,148

Dividends declared ($ 0.48 per share)

— — — — ( 51,565 ) ( 51,565 )

Net issuances of restricted stock 23 — — — — —

Stock-based compensation — — 15,453 — — 15,453

Repurchases of common stock ( 654 ) ( 1 ) — — ( 45,537 ) ( 45,538 )

Balance at June 30, 2023 107,132 $ 107 $ 1,324,451 $ ( 36,589 ) $ 337,302 $ 1,625,271

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

9 unchanged sentences

Balance at March 31, 2022 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

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in thousands)

Three Months Ended

Six Months Ended

CASH FLOWS FROM OPERATING ACTIVITIES:

40 unchanged sentences

are an integral part of these financial statements.

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

March 31, 2023

June 30, 2023

Note A— Summary of Significant Accounting Policies

Nature of Operations .

Robert Half International Inc.

Robert Half Inc.

(the “Company”) is a specialized talent solutions and business consulting firm that connects opportunities at great companies with highly skilled job seekers.

15 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, 2023, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, accrued medical expenses, income and other taxes, and assumptions used in the Company’s goodwill impairment assessment and in the valuation of stock grants subject to market conditions.

As of June 30, 2023, such estimates include allowances for credit losses, variable consideration, workers’ compensation losses, accrued medical expenses, income and other taxes, and 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.

10 unchanged sentences

The Company expenses all advertising costs as incurred.

Advertising costs were $ 13.3 million and $ 14.2 million for the three months ended March 31, 2023, and 2022, respectively.

Advertising costs were $ 14.6 million and $ 27.9 million for the three and six months ended June 30, 2023, respectively, and $ 14.5 million and $ 28.7 million for the three and six months ended June 30, 2022, respectively.

ROBERT HALF INC.

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

June 30, 2023

(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 and adjustments are recorded 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 employee deferred compensation plan obligations change 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 and is presented separately on the unaudited Condensed Consolidated Statements of Operations.

ROBERT HALF INTERNATIONAL INC.

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

March 31, 2023

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

2023 2022 2023 2022

Dividend income $ ( 2,232 ) $ ( 2,315 ) $ ( 3,795 ) $ ( 2,610 )

11 unchanged sentences

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).

ROBERT HALF INTERNATIONAL INC.

ROBERT HALF INC.

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

March 31, 2023

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

June 30, 2023

The following tables set 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, 2023

Balance at June 30, 2023

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.

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

The following table sets forth the activity in the allowance for credit losses from December 31, 2022 through March 31, 2023 (in thousands):

The following table sets forth the activity in the allowance for credit losses from December 31, 2022 through June 30, 2023 (in thousands):

Allowance for Credit Losses

3 unchanged sentences

Other, including foreign currency translation adjustments 164

Balance as of March 31, 2023

ROBERT HALF INTERNATIONAL INC.

Balance as of June 30, 2023

ROBERT HALF INC.

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

March 31, 2023

June 30, 2023

Internal-use Software.

The Company develops and implements software for internal use to enhance the performance and capabilities of the operating technology infrastructure.

Direct costs incurred for the development of internal-use software are capitalized from the time when the completion of the internal-use software is considered probable until the software is ready for use.

All other preliminary and planning stage costs are expensed as incurred.

Cloud computing implementation costs incurred in hosting arrangements are capitalized and reported as a component of other current assets and other noncurrent assets, while all other capitalized internal-use software development costs are reported as a component of computer software within property and equipment on the unaudited Condensed Consolidated Statements of Financial Position.

Capitalized software costs are amortized using the straight-line method over the estimated useful life of the software, ranging from two to five years .

Note B— New Accounting Pronouncements

21 unchanged sentences

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

ROBERT HALF INC.

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

June 30, 2023

Protiviti revenues.

6 unchanged sentences

The Company periodically evaluates the need to provide for any losses on these projects, and losses are recognized when it is probable that a loss will be incurred.

ROBERT HALF INTERNATIONAL INC.

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

March 31, 2023

The following table presents the Company’s revenues disaggregated by functional specialization and segment (in thousands):

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Contract talent solutions

12 unchanged sentences

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, 2023, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 151.8 million.

As of June 30, 2023, aggregate transaction price allocated to the performance obligations that were unsatisfied for contracts with an expected duration of greater than one year was $ 160.3 million.

Of this amount, $ 144.1 million is expected to be recognized within the next twelve months .

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.

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.

ROBERT HALF INC.

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

June 30, 2023

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, 2022 through March 31, 2023 (in thousands):

The following table sets forth the activity in contract liabilities from December 31, 2022 through June 30, 2023 (in thousands):

Contract Liabilities

3 unchanged sentences

Other, including translation adjustments ( 408 )

Balance as of March 31, 2023

ROBERT HALF INTERNATIONAL INC.

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

March 31, 2023

Balance as of June 30, 2023

Note D— Other Current Assets

15 unchanged sentences

Property and equipment, net $ 106,267 $ 109,687

Note F— Leases

Note F— Other Noncurrent Assets

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

2023 December 31,

Unamortized cloud computing implementation costs $ 28,444 $ —

Other intangible assets, net 3,875 5,317

Other noncurrent assets $ 32,319 $ 5,317

ROBERT HALF INC.

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

June 30, 2023

Note G— Leases

The Company has operating leases for corporate and field offices, and certain equipment.

The Company’s leases have remaining lease terms of less than 1 year to 9 years, some of which include options to extend the leases for up to 7 years, and some of which include options to terminate the leases within 1 year.

Operating lease expense was $ 22.4 million and $ 22.6 million for the three months ended March 31, 2023 and 2022, respectively.

Operating lease expense was $ 22.5 million and $ 44.9 million for the three and six months ended June 30, 2023, respectively, and $ 22.5 million and $ 45.1 million for the three and six months ended June 30, 2022, 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 $ 48,145 $ 46,743

4 unchanged sentences

Weighted average discount rate for operating leases 2.6 % 2.2 %

ROBERT HALF INTERNATIONAL INC.

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

March 31, 2023

Future minimum lease payments under non-cancellable leases as of March 31, 2023, were as follows (in thousands):

2023 (excluding the three months ended March 31, 2023)

Future minimum lease payments under non-cancellable leases as of June 30, 2023, were as follows (in thousands):

2023 (excluding the six months ended June 30, 2023)

Thereafter 10,036

2 unchanged sentences

(a) Includes the current portion of $ 82.3 million for operating leases.

As of March 31, 2023, the Company had additional future minimum lease obligations totaling $ 6.1 million under executed operating lease contracts that had not yet commenced.

As of June 30, 2023, the Company had additional future minimum lease obligations totaling $ 2.3 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.

Note G— Goodwill

The following table sets forth the activity in goodwill from December 31, 2022 through March 31, 2023 (in thousands):

ROBERT HALF INC.

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

June 30, 2023

Note H— Goodwill

The following table sets forth the activity in goodwill from December 31, 2022 through June 30, 2023 (in thousands):

Contract talent solutions Permanent placement talent solutions Protiviti Total

1 unchanged sentence

$ 134,118 $ 26,098 $ 77,594 $ 237,810

Foreign currency translation adjustments 27 6 68 101

Balance as of March 31, 2023

Foreign currency translation and other adjustments 132 26 254 412

Balance as of June 30, 2023

$ 134,250 $ 26,124 $ 77,848 $ 238,222

Note H— Accrued Payroll and Benefit Costs

The Company completed its annual assessment of the recoverability of goodwill during the three months ended June 30, 2023, 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 I— Accrued Payroll and Benefit Costs

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

4 unchanged sentences

Accrued payroll and benefit costs $ 447,714 $ 472,310

Note I— Employee Deferred Compensation Plan Obligations

Note J— Employee Deferred Compensation Plan Obligations

The Company provides various qualified defined contribution 401(k) plans covering eligible employees.

3 unchanged sentences

These plans include provisions for salary deferrals and discretionary contributions.

The asset value of the nonqualified plans was $ 511.2 million and $ 432.7 million as of March 31, 2023 and December 31, 2022, respectively.

The asset value of the nonqualified plans was $ 542.2 million and $ 432.7 million as of June 30, 2023 and December 31, 2022, 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 $ 496.1 million and $ 474.1 million as of March 31, 2023 and December 31, 2022, respectively.

ROBERT HALF INTERNATIONAL INC.

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

March 31, 2023

The liability value for the nonqualified plans was $ 530.5 million and $ 474.1 million as of June 30, 2023 and December 31, 2022, respectively.

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

2023 2022 2023 2022

Contribution expense $ 11,498 $ 12,794 $ 22,778 $ 24,996

2 unchanged sentences

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

ROBERT HALF INC.

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

June 30, 2023

Note K— Commitments and Contingencies

On March 23, 2015, Plaintiff Jessica Gentry, on her own behalf and on behalf of a putative class of allegedly similarly situated individuals, filed a complaint against the Company in the Superior Court of California, San Francisco County, which was subsequently amended on October 23, 2015.

18 unchanged sentences

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

The Company has an unsecured revolving credit facility (the “Credit Agreement”) of $ 100.0 million which matures in 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.

ROBERT HALF INTERNATIONAL INC.

In May 2023, the Company entered into an amendment to extend the maturity of its $ 100.0 million unsecured revolving credit facility (the “Credit Agreement”) to May 2026.

Borrowings under the Credit Agreement will bear interest in accordance with the terms of the borrowing which, effective May 2023, will be calculated according to the Adjusted Term Secured Overnight Financing Rate ("SOFR"), 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, 2023.

There were no borrowings under the Credit Agreement as of June 30, 2023, or December 31, 2022.

ROBERT HALF INC.

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

March 31, 2023

Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of March 31, 2023.

There were no borrowings under the Credit Agreement as of March 31, 2023, or December 31, 2022.

Note K— Stockholders’ Equity

June 30, 2023

Note L— Stockholders’ Equity

Stock Repurchase Program.

As of March 31, 2023, the Company is authorized to repurchase, from time to time, up to 13.3 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, 2023 and 2022, are reflected in the following table (in thousands):

Three Months Ended

As of June 30, 2023, the Company is authorized to repurchase, from time to time, up to 12.7 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 six months ended June 30, 2023 and 2022, are reflected in the following table (in thousands):

Six Months Ended

Common stock repurchased (in shares) 1,137 1,386

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, 2023 and 2022, 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, 2023 and 2022, are reflected in the following table (in thousands):

Six Months Ended

Repurchases related to employee stock plans (in shares) 283 295

2 unchanged sentences

Treasury stock is accounted for using the cost method.

Treasury stock activity for the three months ended March 31, 2023 and 2022, (consisting of purchases 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, 2023 and 2022, (consisting of purchases 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)

March 31, 2023

Note L— Net Income Per Share

The calculation of net income per share for the three months ended March 31, 2023 and 2022, is reflected in the following table (in thousands, except per share amounts):

Note M— Net Income Per Share

The calculation of net income per share for the three and six months ended June 30, 2023 and 2022, is reflected in the following table (in thousands, except per share amounts):

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Net income $ 106,292 $ 175,821 $ 228,297 $ 344,060

8 unchanged sentences

Diluted $ 1.00 $ 1.60 $ 2.14 $ 3.12

Note M— Business Segments

ROBERT HALF INC.

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

June 30, 2023

Note N— Business Segments

The Company has three reportable segments:

5 unchanged sentences

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

ROBERT HALF INTERNATIONAL INC.

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

March 31, 2023

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, 2023 and 2022 (in thousands):

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, 2023 and 2022 (in thousands):

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Service revenues

12 unchanged sentences

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

Intersegment revenues between contract talent solutions segment and Protiviti segment were $ 125.8 million and $ 144.2 million for the three months ended March 31, 2023 and 2022, respectively.

Intersegment revenues between contract talent solutions segment and Protiviti segment were $ 114.8 million and $ 240.6 million for the three and six months ended June 30, 2023, respectively, and $ 137.5 million and $ 281.7 million for the three and six months ended June 30, 2022, 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 May 2, 2023, the Company announced the following:

Note O— Subsequent Events

On July 31, 2023, the Company announced the following:

Quarterly dividend per share $ 0.48

Declaration date May 2, 2023

Record date May 25, 2023

Payment date June 15, 2023

Declaration date July 31, 2023

Record date August 25, 2023

Payment date September 15, 2023

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