What changed in this filing

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Item 1. Financial Statements

2023-10-31 compared with 2023-08-01 · 116 added, 77 removed, 450 unchanged (30% of the section changed)

3 unchanged sentences

(in thousands, except share amounts)

September 30,

2023 December 31,

17 unchanged sentences

Noncurrent operating lease liabilities 134,706 151,768

Other liabilities 29,787 27,960

Other noncurrent liabilities 30,095 27,960

Total liabilities 1,441,079 1,395,930

17 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

22 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

32 unchanged sentences

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

Net income — — — — 95,545 95,545

Other comprehensive income (loss) — — — ( 13,408 ) — ( 13,408 )

Dividends declared ($ 0.48 per share)

— — — — ( 51,228 ) ( 51,228 )

Net issuances of restricted stock ( 10 ) — — — — —

Stock-based compensation — — 15,233 — — 15,233

Repurchases of common stock ( 1,227 ) ( 1 ) — — ( 91,441 ) ( 91,442 )

Balance at September 30, 2023

105,895 $ 106 $ 1,339,684 $ ( 49,997 ) $ 290,178 $ 1,579,971

The accompanying Notes to Condensed Consolidated Financial Statements (Unaudited)

are an integral part of these financial statements.

ROBERT HALF 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, 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)

3 unchanged sentences

(in thousands)

Six Months Ended

Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

35 unchanged sentences

Non-cash items:

Repurchases of common stock awaiting settlement $ 3,684 $ 11,296

Fund exchanges within employee deferred compensation trusts $ 88,758 $ 82,410

4 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2023

September 30, 2023

Note A— Summary of Significant Accounting Policies

18 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, 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 September 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 $ 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

Advertising costs were $ 13.4 million and $ 41.3 million for the three and nine months ended September 30, 2023, respectively, and $ 13.5 million and $ 42.2 million for the three and nine months ended September 30, 2022, respectively.

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

2 unchanged sentences

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.

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

ROBERT HALF INC.

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

September 30, 2023

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,

2023 2022 2023 2022

12 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 INC.

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

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 June 30, 2023

Balance at September 30, 2023

Quoted Prices

6 unchanged sentences

$ 523,843 $ 523,843 — —

ROBERT HALF INC.

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

September 30, 2023

Fair Value Measurements Using

16 unchanged sentences

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 June 30, 2023 (in thousands):

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

Allowance for Credit Losses

3 unchanged sentences

Other, including foreign currency translation adjustments 564

Balance as of June 30, 2023

ROBERT HALF INC.

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

June 30, 2023

Balance as of September 30, 2023

Internal-use Software.

4 unchanged sentences

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

ROBERT HALF INC.

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

September 30, 2023

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 INC.

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

September 30, 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

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

13 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 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.

As of September 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 $ 150.2 million.

Of this amount, $ 131.5 million is expected to be recognized within the next twelve months .

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

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.

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 June 30, 2023 (in thousands):

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

Contract Liabilities

3 unchanged sentences

Other, including translation adjustments ( 578 )

Balance as of June 30, 2023

Balance as of September 30, 2023

ROBERT HALF INC.

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

September 30, 2023

Note D— Other Current Assets

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

September 30,

2023 December 31,

5 unchanged sentences

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

September 30,

2023 December 31,

8 unchanged sentences

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

September 30,

2023 December 31,

2 unchanged sentences

Other noncurrent assets $ 30,508 $ 5,317

ROBERT HALF INC.

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

June 30, 2023

Note G— Leases

1 unchanged sentence

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 $ 22.5 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.

Operating lease expense was $ 22.2 million and $ 67.1 million for the three and nine months ended September 30, 2023, respectively, and $ 22.0 million and $ 67.1 million for the three and nine months ended September 30, 2022, 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 $ 71,633 $ 69,696

Right-of-use assets obtained in exchange for new operating lease liabilities $ 46,838 $ 41,916

ROBERT HALF INC.

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

September 30, 2023

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

September 30,

2023 December 31,

1 unchanged sentence

Weighted average discount rate for operating leases 2.8 % 2.2 %

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)

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

2023 (excluding the nine months ended September 30, 2023)

Thereafter 15,822

2 unchanged sentences

(a) Includes the current portion of $ 80.7 million for operating leases.

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.

As of September 30, 2023, the Company had additional future minimum lease obligations totaling $ 2.0 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.

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):

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

Contract talent solutions Permanent placement talent solutions Protiviti Total

2 unchanged sentences

Foreign currency translation and other adjustments ( 64 ) ( 12 ) ( 159 ) ( 235 )

Balance as of June 30, 2023

Balance as of September 30, 2023

$ 134,054 $ 26,086 $ 77,435 $ 237,575

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):

September 30,

2023 December 31,

3 unchanged sentences

Accrued payroll and benefit costs $ 435,330 $ 472,310

ROBERT HALF INC.

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

September 30, 2023

Note J— 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 $ 542.2 million and $ 432.7 million as of June 30, 2023 and December 31, 2022, respectively.

The asset value of the nonqualified plans was $ 523.8 million and $ 432.7 million as of September 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 $ 530.5 million and $ 474.1 million as of June 30, 2023 and December 31, 2022, respectively.

The liability value for the nonqualified plans was $ 518.9 million and $ 474.1 million as of September 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

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

3 unchanged sentences

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

ROBERT HALF INC.

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

June 30, 2023

Note K— Commitments and Contingencies

14 unchanged sentences

Plaintiff Dorff also seeks an unspecified amount of other damages, attorneys’ fees, and penalties, including but not limited to statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by PAGA.

At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts have been provided in the Company’s Financial Statements.

At this stage of the litigation, it is not feasible to predict the outcome of or a range of loss, should a loss occur, from this proceeding and, accordingly, no amounts

ROBERT HALF INC.

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

September 30, 2023

have been provided in the Company’s Financial Statements.

The Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation.

4 unchanged sentences

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)

June 30, 2023

The Credit Agreement is subject to certain financial covenants and the Company was in compliance with these covenants as of September 30, 2023.

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

Note L— Stockholders’ Equity

Stock Repurchase Program.

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

As of September 30, 2023, the Company is authorized to repurchase, from time to time, up to 11.5 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, 2023 and 2022, are reflected in the following table (in thousands):

Nine Months Ended

September 30,

Common stock repurchased (in shares) 2,362 2,493

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

Nine Months Ended

September 30,

Repurchases related to employee stock plans (in shares) 285 297

2 unchanged sentences

Treasury stock is accounted for using the cost method.

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.

Treasury stock activity for the nine months ended September 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 INC.

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

September 30, 2023

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):

The calculation of net income per share for the three and nine months ended September 30, 2023 and 2022, 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,

2023 2022 2023 2022

9 unchanged sentences

Diluted $ 0.90 $ 1.53 $ 3.04 $ 4.65

ROBERT HALF INC.

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

June 30, 2023

Note N— Business Segments

6 unchanged sentences

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

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):

ROBERT HALF INC.

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

September 30, 2023

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, 2023 and 2022 (in thousands):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

13 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 $ 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.

Intersegment revenues between contract talent solutions segment and Protiviti segment were $ 100.6 million and $ 341.2 million for the three and nine months ended September 30, 2023, respectively, and $ 132.7 million and $ 414.5 million for the three and nine months ended September 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 O— Subsequent Events

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

On October 30, 2023, the Company announced the following:

Quarterly dividend per share $ 0.48

Declaration date July 31, 2023

Record date August 25, 2023

Payment date September 15, 2023

Declaration date October 30, 2023

Record date November 24, 2023

Payment date December 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