QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||
(Address of principal executive offices) | (zip-code) |
☒ | Accelerated filer | ☐ | ||||
Non-accelerated filer | ☐ | (Do not check if a smaller reporting company) | ||||
Smaller reporting company | Emerging growth company |
June 30, 2019 | December 31, 2018 |
ASSETS | |||||||
Cash and cash equivalents | $ | $ | |||||
Accounts receivable, less allowances of $25,931 and $27,678 | |||||||
Other current assets | |||||||
Total current assets | |||||||
Goodwill | |||||||
Other intangible assets, net | |||||||
Property and equipment, net | |||||||
Right-of-use assets | |||||||
Noncurrent deferred income taxes | |||||||
Total assets | $ | $ | |||||
LIABILITIES | |||||||
Accounts payable and accrued expenses | $ | $ | |||||
Accrued payroll and benefit costs | |||||||
Income taxes payable | |||||||
Current portion of notes payable and other indebtedness | |||||||
Current operating lease liabilities | |||||||
Total current liabilities | |||||||
Notes payable and other indebtedness, less current portion | |||||||
Noncurrent operating lease liabilities | |||||||
Other liabilities | |||||||
Total liabilities | |||||||
Commitments and Contingencies (Note I) | |||||||
STOCKHOLDERS’ EQUITY | |||||||
Preferred stock, $.001 par value authorized 5,000,000 shares; issued and outstanding zero shares | |||||||
Common stock, $.001 par value authorized 260,000,000 shares; issued and outstanding 117,561,005 shares and 119,078,491 shares | |||||||
Capital surplus | |||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | |||
Retained earnings | |||||||
Total stockholders’ equity | |||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net service revenues | $ | $ | $ | $ | |||||||||||
Direct costs of services, consisting of payroll, payroll taxes, benefit costs and reimbursable expenses | |||||||||||||||
Gross margin | |||||||||||||||
Selling, general and administrative expenses | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Interest income, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income before income taxes | |||||||||||||||
Provision for income taxes | |||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Net income per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ | |||||||||||
Shares: | |||||||||||||||
Basic | |||||||||||||||
Diluted | |||||||||||||||
Cash dividends declared per share | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
COMPREHENSIVE INCOME: | |||||||||||||||
Net income | $ | 114,612 | $ | $ | $ | 205,482 | |||||||||
Foreign currency translation adjustments, net of tax | 2,146 | ( | ) | ( | ) | ||||||||||
Total comprehensive income | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
COMMON STOCK—SHARES: | |||||||||||||||
Balance at beginning of period | |||||||||||||||
Net issuances of restricted stock | |||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Balance at end of period | |||||||||||||||
COMMON STOCK—PAR VALUE: | |||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||
Net issuances of restricted stock | |||||||||||||||
Repurchases of common stock | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Balance at end of period | $ | $ | $ | $ | |||||||||||
CAPITAL SURPLUS: | |||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||
Net issuances of restricted stock at par value | ( | ) | ( | ) | ( | ) | |||||||||
Stock-based compensation expense | |||||||||||||||
Balance at end of period | $ | $ | $ | $ | |||||||||||
ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME: | |||||||||||||||
Balance at beginning of period | $ | ( | ) | $ | $ | ( | ) | $ | |||||||
Foreign currency translation adjustments, net of tax | ( | ) | ( | ) | |||||||||||
Balance at end of period | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||
RETAINED EARNINGS: | |||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||
Net income | |||||||||||||||
Repurchases of common stock—excess over par value | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Cash dividends ($.31 per share, $.28 per share, $.62 per share, and $.56 per share) | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Balance at end of period | $ | $ | $ | $ |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net income | $ | $ | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Amortization of intangible assets | |||||||
Depreciation expense | |||||||
Stock-based compensation expense—restricted stock and stock units | |||||||
Deferred income taxes | ( | ) | ( | ) | |||
Provision for doubtful accounts | |||||||
Changes in assets and liabilities: | |||||||
Increase in accounts receivable | ( | ) | ( | ) | |||
Increase in accounts payable, accrued expenses, accrued payroll and benefit costs | |||||||
Increase in income taxes payable | |||||||
Change in other assets, net of change in other liabilities | ( | ) | |||||
Net cash flows provided by operating activities | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Capital expenditures | ( | ) | ( | ) | |||
Payments to trusts for employee deferred compensation plans | ( | ) | ( | ) | |||
Net cash flows used in investing activities | ( | ) | ( | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Repurchases of common stock | ( | ) | ( | ) | |||
Cash dividends paid | ( | ) | ( | ) | |||
Payments for notes payable and other indebtedness | ( | ) | ( | ) | |||
Net cash flows used in financing activities | ( | ) | ( | ) | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ) | |||||
Net (decrease) increase in cash and cash equivalents | ( | ) | |||||
Cash and cash equivalents at beginning of period | |||||||
Cash and cash equivalents at end of period | $ | $ | |||||
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||||||
Non-cash items: | |||||||
Stock repurchases awaiting settlement | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Advertising costs | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||
Internal-use software development costs | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||||||
Accountemps | $ | $ | $ | $ | ||||||||||||||
OfficeTeam | ||||||||||||||||||
Robert Half Technology | ||||||||||||||||||
Robert Half Management Resources | ||||||||||||||||||
Temporary and consulting staffing | ||||||||||||||||||
Permanent placement staffing | ||||||||||||||||||
Risk consulting and internal audit services | ||||||||||||||||||
Net service revenues | $ | $ | $ | $ |
Contract Liabilities | ||||
Balance as of December 31, 2018 | $ | |||
Payments in advance of satisfaction of performance obligations | ||||
Revenue recognized | ( | ) | ||
Other, including translation adjustments | ( | ) | ||
Balance as of June 30, 2019 | $ |
June 30, 2019 | December 31, 2018 | ||||||||
Deposits in trusts for employee deferred compensation plans | $ | $ | |||||||
Other | |||||||||
Other current assets | $ | $ |
Goodwill | |||||||||||||||
Temporary and consultant staffing | Permanent placement staffing | Risk consulting and internal audit services | Total | ||||||||||||
Balance as of December 31, 2018 | $ | $ | $ | $ | |||||||||||
Foreign currency translation adjustments | |||||||||||||||
Balance as of June 30, 2019 | $ | $ | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||||
Computer hardware | $ | $ | |||||||
Computer software | |||||||||
Furniture and equipment | |||||||||
Leasehold improvements | |||||||||
Other | |||||||||
Property and equipment, cost | |||||||||
Accumulated depreciation | ( | ) | ( | ) | |||||
Property and equipment, net | $ | $ |
Six Months Ended June 30, 2019 | |||
Cash paid for operating lease liabilities | $ | ||
Right-of-use assets obtained in exchange for new operating lease liabilities | $ |
June 30, 2019 | ||
Weighted average remaining lease term for operating leases | ||
Weighted average discount rate for operating leases | % |
2019 (excluding the six months ended June 30, 2019) | $ | ||
2020 | |||
2021 | |||
2022 | |||
2023 | |||
Thereafter | |||
Less: Imputed interest | ( | ) | |
Present value of operating lease liabilities (a) | $ |
June 30, 2019 | December 31, 2018 | ||||||||
Payroll and benefits | $ | $ | |||||||
Employee deferred compensation plans | |||||||||
Workers’ compensation | |||||||||
Payroll taxes | |||||||||
Accrued payroll and benefit costs | $ | $ |
June 30, 2019 | December 31, 2018 | ||||||||
Deferred compensation plan and other benefits related to the Company’s Chief Executive Officer | $ | $ |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Common stock repurchased (in shares) | |||||||
Common stock repurchased | $ | $ |
Six Months Ended June 30, | |||||||
2019 | 2018 | ||||||
Repurchases related to employee stock plans (in shares) | |||||||
Repurchases related to employee stock plans | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net income | $ | $ | $ | $ | |||||||||||
Basic: | |||||||||||||||
Weighted average shares | |||||||||||||||
Diluted: | |||||||||||||||
Weighted average shares | |||||||||||||||
Dilutive effect of potential common shares | |||||||||||||||
Diluted weighted average shares | |||||||||||||||
Net income per share: | |||||||||||||||
Basic | $ | $ | $ | $ | |||||||||||
Diluted | $ | $ | $ | $ |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net service revenues | |||||||||||||||
Temporary and consultant staffing | $ | $ | $ | $ | |||||||||||
Permanent placement staffing | |||||||||||||||
Risk consulting and internal audit services | |||||||||||||||
$ | $ | $ | $ | ||||||||||||
Operating income | |||||||||||||||
Temporary and consultant staffing | $ | $ | $ | $ | |||||||||||
Permanent placement staffing | |||||||||||||||
Risk consulting and internal audit services | |||||||||||||||
Amortization of intangible assets | |||||||||||||||
Interest income, net | ( | ) | ( | ) | ( | ) | ( | ) | |||||||
Income before income taxes | $ | $ | $ | $ |
Quarterly dividend per share | $ |
Declaration date | |
Record date | |
Payment date |
Global | United States | International | ||||||
Temporary and consultant staffing | ||||||||
As Reported | 1.4 | % | 3.5 | % | -5.9 | % | ||
Billing Days Impact | 0.2 | % | 0.3 | % | -0.2 | % | ||
Currency Impact | 1.3 | % | — | 5.7 | % | |||
Intercompany Adjustments | 0.8 | % | — | 3.5 | % | |||
As Adjusted | 3.7 | % | 3.8 | % | 3.1 | % | ||
Permanent placement staffing | ||||||||
As Reported | 4.3 | % | 6.6 | % | -0.6 | % | ||
Billing Days Impact | 0.2 | % | 0.3 | % | -0.2 | % | ||
Currency Impact | 1.7 | % | — | 5.2 | % | |||
As Adjusted | 6.2 | % | 6.9 | % | 4.4 | % | ||
Risk consulting and internal audit services | ||||||||
As Reported | 16.6 | % | 14.7 | % | 23.2 | % | ||
Billing Days Impact | 0.3 | % | 0.4 | % | -0.1 | % | ||
Currency Impact | 1.2 | % | — | 5.0 | % | |||
Intercompany Adjustments | -4.3 | % | — | -18.7 | % | |||
As Adjusted | 13.8 | % | 15.1 | % | 9.4 | % |
Global | United States | International | ||||||
Temporary and consultant staffing | ||||||||
As Reported | 1.5 | % | 3.5 | % | -4.8 | % | ||
Billing Days Impact | 0.8 | % | 0.9 | % | 0.2 | % | ||
Currency Impact | 1.5 | % | — | 6.8 | % | |||
Intercompany Adjustments | 1.1 | % | — | 4.4 | % | |||
As Adjusted | 4.9 | % | 4.4 | % | 6.6 | % | ||
Permanent placement staffing | ||||||||
As Reported | 6.2 | % | 8.2 | % | 2.1 | % | ||
Billing Days Impact | 0.9 | % | 1.1 | % | — | |||
Currency Impact | 2.0 | % | — | 6.3 | % | |||
As Adjusted | 9.1 | % | 9.3 | % | 8.4 | % | ||
Risk consulting and internal audit services | ||||||||
As Reported | 18.9 | % | 14.8 | % | 34.7 | % | ||
Billing Days Impact | 0.9 | % | 1.1 | % | 0.1 | % | ||
Currency Impact | 1.4 | % | — | 5.9 | % | |||
Intercompany Adjustments | -5.7 | % | — | -26.8 | % | |||
As Adjusted | 15.5 | % | 15.9 | % | 13.9 | % |
Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans | Maximum Number of Shares that May Yet Be Purchased Under Publicly Announced Plans (b) | ||||||||||
April 1, 2019 to April 30, 2019 | 100,000 | $ | 62.13 | 100,000 | 5,826,337 | ||||||||
May 1, 2019 to May 31, 2019 | 430,471 | $ | 58.68 | 430,471 | 5,395,866 | ||||||||
June 1, 2019 to June 30, 2019 | 500,945 | (a) | $ | 56.21 | 500,713 | 4,895,153 | |||||||
Total April 1, 2019 to June 30, 2019 | 1,031,416 | 1,031,184 |
(a) | Includes 232 shares repurchased in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of applicable withholding taxes and/or exercise price. |
(b) | Commencing in October 1997, the Company's Board of Directors has, at various times, authorized the repurchase, from time to time, of the Company's common stock on the open market or in privately negotiated transactions depending on market conditions. Since plan inception, a total of 118,000,000 shares have been authorized for repurchase of which 113,104,847 shares have been repurchased as of June 30, 2019. |
3.1 | Restated Certificate of Incorporation, incorporated by reference to Exhibit 3.1 to Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2009. |
3.2 | Amended and Restated By-Laws, incorporated by reference to Exhibit 3.2 to Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017. |
31.1 | |
31.2 | |
32.1 | |
32.2 | |
101.1 | Part I, Item 1 of this Form 10-Q formatted in XBRL. |
ROBERT HALF INTERNATIONAL INC. (Registrant) | |
/S/ M. KEITH WADDELL | |
M. Keith Waddell Vice Chairman, President and Chief Financial Officer (Principal Financial Officer and duly authorized signatory) |
1. | I have reviewed this report on Form 10-Q of Robert Half International Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Harold M. Messmer, Jr. | |
Harold M. Messmer, Jr. Chairman & CEO |
1. | I have reviewed this report on Form 10-Q of Robert Half International Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
(b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
(c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and |
(d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
(a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
(b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ M. Keith Waddell | |
M. Keith Waddell Vice Chairman, President & CFO |
August 2, 2019 | /s/ Harold M. Messmer, Jr. | |||||
Harold M. Messmer, Jr. Chief Executive Officer Robert Half International Inc. |
August 2, 2019 | /s/ M. Keith Waddell | |||||
M. Keith Waddell Chief Financial Officer Robert Half International Inc. |
Condensed Consolidated Statements of Financial Position (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowances | $ 25,931 | $ 27,678 |
Preferred stock, par value (in usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common stock, par value (in usd per shares) | $ 0.001 | $ 0.001 |
Common stock, authorized (in shares) | 260,000,000 | 260,000,000 |
Common stock, issued (in shares) | 117,561,005 | 119,078,491 |
Common stock, outstanding (in shares) | 117,561,005 | 119,078,491 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Income Statement [Abstract] | ||||
Net service revenues | $ 1,516,385 | $ 1,457,054 | $ 2,984,915 | $ 2,852,387 |
Direct costs of services, consisting of payroll, payroll taxes, benefit costs and reimbursable expenses | 878,844 | 849,936 | 1,739,786 | 1,672,903 |
Gross margin | 637,541 | 607,118 | 1,245,129 | 1,179,484 |
Selling, general and administrative expenses | 478,139 | 457,607 | 939,498 | 895,606 |
Amortization of intangible assets | 341 | 442 | 683 | 905 |
Interest income, net | (1,042) | (1,006) | (2,538) | (1,741) |
Income before income taxes | 160,103 | 150,075 | 307,486 | 284,714 |
Provision for income taxes | 45,491 | 40,760 | 83,076 | 79,232 |
Net income | $ 114,612 | $ 109,315 | $ 224,410 | $ 205,482 |
Net income per share: | ||||
Basic (in usd per share) | $ 0.98 | $ 0.90 | $ 1.92 | $ 1.69 |
Diluted (in usd per share) | $ 0.98 | $ 0.89 | $ 1.91 | $ 1.68 |
Shares: | ||||
Basic (in shares) | 116,381 | 121,307 | 116,722 | 121,619 |
Diluted (in shares) | 116,988 | 122,268 | 117,475 | 122,576 |
Cash dividends declared per share (in usd per share) | $ 0.31 | $ 0.28 | $ 0.62 | $ 0.56 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
COMPREHENSIVE INCOME: | ||||
Net income | $ 114,612 | $ 109,315 | $ 224,410 | $ 205,482 |
Foreign currency translation adjustments, net of tax | (15,424) | 249 | (9,916) | |
Total comprehensive income | $ 116,758 | $ 93,891 | $ 224,659 | $ 195,566 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
RETAINED EARNINGS | ||||
Cash dividends, per share (in usd per share) | $ 0.31 | $ 0.28 | $ 0.62 | $ 0.56 |
Summary of Significant Accounting Policies |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half® Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider of temporary, full-time, and senior-level project professionals in the fields of accounting and finance. OfficeTeam specializes in highly skilled temporary administrative support professionals. Robert Half Technology provides project and full-time technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers, paralegals and legal support personnel. The Creative Group provides creative, digital, marketing, advertising and public relations professionals. Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, data, analytics, governance, risk and internal audit, and is a wholly-owned subsidiary of the Company. Revenues are predominantly derived from specialized staffing services. The Company operates in North America, South America, Europe, Asia and Australia. The Company is a Delaware corporation. Basis of Presentation. The unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). The comparative year-end Condensed Consolidated Statement of Financial Position data presented was derived from audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of the financial position and results of operations for the periods presented have been included. These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of the Company for the year ended December 31, 2018, included in its Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for a full year. Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances have been eliminated. Use of Estimates. 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, 2019, such estimates also include allowances for uncollectible accounts receivable, sales adjustments and allowances, workers’ compensation losses, 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. Advertising Costs. The Company expenses all advertising costs as incurred. Advertising costs for the three and six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
Leases. The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s Condensed Consolidated Statement of Financial Position. The Company does not currently have finance leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease payments included in the present value are fixed lease payments and index-based variable lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have subleases. The Company does not currently have residual value guarantees or restrictive covenants in its leases. The Company has contracts with lease and non-lease components, which are accounted for on a combined basis. Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software. Implementation costs incurred in hosting arrangements are capitalized and reported as a component of other current assets. All other internal-use software development costs are capitalized and reported as a component of computer software within property and equipment. Internal-use software development costs capitalized for the three and six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
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New Accounting Pronouncements |
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Jun. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements Recently Adopted Accounting Pronouncements Lease Accounting. In February 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which changes financial reporting as it relates to leasing transactions. Under the new guidance, lessees are required to recognize a lease liability, measured on a discounted basis; and a right-of-use asset, for the lease term. The Company adopted this guidance as of January 1, 2019, using the transition method that allowed it to initially apply the guidance as of the adoption date. The Company elected the package of practical expedients available under the new standard, which allowed the Company to forgo a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) the initial direct costs for any existing leases. The adoption of this guidance had a material impact on the Company’s Condensed Consolidated Statement of Financial Position beginning January 1, 2019. Prior periods were not restated. See Note G for further discussion of leases. Internal-use Software—Cloud Computing. In August 2018, the FASB issued authoritative guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Entities are required to present the expense related to capitalized implementation costs in the same line item in the statement of operations as the fees associated with the hosting elements of the arrangement and classify the payments for the capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. Entities are also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment of the fees of the associated hosting arrangement would be presented. The new guidance is effective for annual and interim periods beginning after December 15, 2019, although early adoption is permitted. The Company has adopted the new guidance prospectively as of January 1, 2019, and the impact of adoption was not material to its financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted Current Expected Credit Losses Model. In June 2016, the FASB issued authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is effective for the Company for fiscal years beginning after December 15, 2019, although early adoption is permitted. The Company believes the adoption of this guidance will not have a material impact on its financial statements.
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Revenue Recognition |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue Recognition | Revenue Recognition Revenues from contracts with customers are generated in three segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. Revenues are recognized when promised goods or services are delivered to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Net service revenues, as presented in the unaudited Condensed Consolidated Statements of Operations, represent services rendered to customers less variable consideration, such as sales adjustments and allowances. Reimbursements, including those related to travel and out-of-pocket expenses, are recorded on a gross basis and included in net service revenues, with equivalent amounts of reimbursable expenses included in direct costs of services. Temporary and consultant staffing revenues. Temporary and consultant staffing revenues from contracts with customers are recognized in the amount to which the Company has a right to invoice, when the services are rendered by the Company’s temporary employees. The Company records temporary and consultant staffing revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of revenues and expenses. The Company has concluded that gross reporting is appropriate because the Company (i) has the risk of identifying and hiring qualified employees, (ii) has the discretion to select the employees and establish their price and duties and (iii) bears the risk for services that are not fully paid for by customers. 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. The substantial majority of employees placed on temporary assignment by the Company are the Company’s legal employees while they are working on assignments. The Company pays all related costs of employment, including workers’ compensation insurance, state and federal unemployment taxes, social security and certain fringe benefits. The Company assumes the risk of acceptability of its employees to its customers. Permanent placement staffing revenues. Permanent placement staffing revenues from contracts with customers are primarily recognized when employment candidates accept offers of permanent employment. The Company has a substantial history of estimating the financial impact of permanent placement candidates who do not remain with its clients through the 90-day guarantee period. These amounts are established based primarily on historical data and are recorded as liabilities. Fees to clients are generally calculated as a percentage of the new employee’s annual compensation. No fees for permanent placement services are charged to employment candidates. Risk consulting and internal audit services revenues. Risk consulting and internal audit services generally contain one or more performance obligation(s) which are satisfied over a period of time. Revenues are recognized over time as the performance obligations are satisfied, because the services provided do not have any alternative use to the Company, and contracts generally include language giving the Company an enforceable right to payment for services provided to date. Revenue is measured using cost incurred relative to total estimated cost for the engagement to measure progress towards satisfying the Company’s performance obligations. Cost incurred represents work performed and thereby best depicts the transfer of control to the customer. The following table presents the Company’s revenues disaggregated by line of business (in thousands):
Payment terms in the Company’s contracts vary by the type and location of the Company’s customer and the services offered. 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 June 30, 2019, aggregate transaction price allocated to the performance obligations that are unsatisfied for contracts with an expected duration of greater than one year was $94.5 million. Of this amount, $89.9 million is expected to be recognized within the next twelve months. 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 Statement of Financial Position. The following table sets forth the activity in contract liabilities from December 31, 2018, through June 30, 2019 (in thousands):
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Other Current Assets |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets | Other Current Assets Other current assets consisted of the following (in thousands):
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Goodwill |
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Goodwill | Goodwill The following table sets forth the activity in goodwill from December 31, 2018 through June 30, 2019 (in thousands):
The Company completed its annual goodwill impairment analysis as of June 30, 2019, and determined that no adjustment to the carrying value of goodwill was required.
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Property and Equipment, Net |
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Property and Equipment, Net | Property and Equipment, Net Property and equipment consisted of the following (in thousands):
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Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company has operating leases for corporate and field offices, and certain equipment. The Company’s leases have remaining lease terms of 1 year to 10 years, some of which include options to extend the leases for up to 5 years, and some of which include options to terminate the leases within 1 year. Operating lease expenses for the three and six months ended June 30, 2019, were $17.9 million and $35.9 million, respectively. Supplemental cash flow information related to leases consisted of the following (in thousands):
Supplemental balance sheet information related to leases consisted of the following:
Future minimum lease payments under non-cancellable leases as of June 30, 2019, were as follows (in thousands):
(a) Includes current portion of $70.2 million for operating leases.
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Accrued Payroll and Benefit Costs |
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Accrued Payroll and Benefit Costs | Accrued Payroll and Benefit Costs Accrued payroll and benefit costs consisted of the following (in thousands):
Included in employee deferred compensation plans is the following (in thousands):
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Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 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. The complaint alleges that a putative class of current and former employees of the Company working in California since March 13, 2010 were denied compensation for the time they spent interviewing “for temporary and permanent employment opportunities” as well as performing activities related to the interview process. Gentry seeks recovery on her own behalf and on behalf of the putative class in an unspecified amount for this allegedly unpaid compensation. Gentry also seeks recovery of an unspecified amount for the alleged failure of the Company to provide her and the putative class with accurate wage statements. Gentry also seeks an unspecified amount of other damages, attorneys’ fees, and statutory penalties, including penalties for allegedly not paying all wages due upon separation to former employees and statutory penalties on behalf of herself and other allegedly “aggrieved employees” as defined by California’s Labor Code Private Attorney General Act (“PAGA”). On January 4, 2016, the Court denied a motion by the Company to compel all of Gentry’s claims, except the PAGA claim, to individual arbitration. 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. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation. On April 6, 2018, Plaintiff Shari Dorff, 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, County of Los Angeles. In addition to certain claims individual to Plaintiff Dorff, the complaint alleges that salaried recruiters based in California have been misclassified as exempt employees and seeks an unspecified amount for: unpaid wages resulting from such alleged misclassification; alleged failure to provide a reasonable opportunity to take meal periods and rest breaks; alleged failure to pay wages on a timely basis both during employment and upon separation; alleged failure to comply with California requirements regarding wage statements and record-keeping; and alleged improper denial of expense reimbursement. 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. The Company believes it has meritorious defenses to the allegations and the Company intends to continue to vigorously defend against the litigation. The Company is involved in a number of other lawsuits arising in the ordinary course of business. While management does not expect any of these other matters to have a material adverse effect on the Company’s results of operations, financial position or cash flows, litigation is subject to certain inherent uncertainties. Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred. In March 2019, the Company entered into an uncommitted credit facility (the “Credit Agreement”) of up to $100 million. The Company may request borrowings under the Credit Agreement that are denominated in U.S. dollars and each request is subject to approval by the lender. The Company must repay the aggregate principal amount of loans outstanding under the Credit Agreement on the termination date of each borrowing. 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 plus an applicable margin. There were no borrowings under the Credit Agreement as of June 30, 2019. The Company intends to renew this facility prior to its March 19, 2020 expiration.
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Stockholders' Equity |
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Stockholders' Equity | Stockholders’ Equity Stock Repurchase Program. As of June 30, 2019, the Company is authorized to repurchase, from time to time, up to 4.9 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, 2019 and 2018, are reflected in the following table (in thousands):
Additional stock repurchases were made in connection with employee stock plans, whereby Company shares were tendered by employees for the payment of exercise price and applicable statutory withholding taxes. The number and the cost of repurchases related to employee stock plans made during the six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for using the cost method. Repurchase activity for the three and six months ended June 30, 2019 and 2018, is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity. Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any remaining amounts are applied to capital surplus.
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Net Income Per Share |
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Net Income Per Share | Net Income Per Share The calculation of net income per share for the three and six months ended June 30, 2019 and 2018, is reflected in the following table (in thousands, except per share amounts):
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Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company has three reportable segments: temporary and consultant staffing, permanent placement staffing, and risk consulting and internal audit services. The temporary and consultant staffing segment provides specialized staffing in the accounting and finance, administrative and office, information technology, legal, advertising, marketing and web design fields. The permanent placement staffing segment provides full-time personnel in the accounting, finance, administrative and office, and information technology fields. The risk consulting and internal audit services 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, 2018. The Company evaluates performance based on income from operations before net interest income, intangible asset amortization expense, and income taxes. The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the three and six months ended June 30, 2019 and 2018 (in thousands):
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Subsequent Events |
6 Months Ended | ||||||||||||
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Jun. 30, 2019 | |||||||||||||
Subsequent Events [Abstract] | |||||||||||||
Subsequent Events | Subsequent Events On August 1, 2019, the Company announced the following:
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations | Nature of Operations. Robert Half International Inc. (the “Company”) provides specialized staffing and risk consulting services through such divisions as Accountemps®, Robert Half® Finance & Accounting, OfficeTeam®, Robert Half® Technology, Robert Half® Management Resources, Robert Half® Legal, The Creative Group®, and Protiviti®. The Company, through its Accountemps, Robert Half Finance & Accounting, and Robert Half Management Resources divisions, is a specialized provider of temporary, full-time, and senior-level project professionals in the fields of accounting and finance. OfficeTeam specializes in highly skilled temporary administrative support professionals. Robert Half Technology provides project and full-time technology professionals. Robert Half Legal provides temporary, project, and full-time staffing of lawyers, paralegals and legal support personnel. The Creative Group provides creative, digital, marketing, advertising and public relations professionals. Protiviti is a global consulting firm that helps companies solve problems in finance, technology, operations, data, analytics, governance, risk and internal audit, and is a wholly-owned subsidiary of the Company. Revenues are predominantly derived from specialized staffing services. The Company operates in North America, South America, Europe, Asia and Australia. The Company is a Delaware corporation.
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Basis of Presentation | Basis of Presentation. The unaudited Condensed Consolidated Financial Statements (“Financial Statements”) of the Company are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the Securities and Exchange Commission (“SEC”). The comparative year-end Condensed Consolidated Statement of Financial Position data presented was derived from audited financial statements. In the opinion of management, all adjustments (consisting of only normal recurring adjustments) necessary for a fair statement of the financial position and results of operations for the periods presented have been included. These Financial Statements should be read in conjunction with the audited Consolidated Financial Statements of the Company for the year ended December 31, 2018, included in its Annual Report on Form 10-K. The results of operations for any interim period are not necessarily indicative of, nor comparable to, the results of operations for a full year.
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Principles of Consolidation | Principles of Consolidation. The Financial Statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All intercompany balances have been eliminated.
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Use of Estimates | Use of Estimates. 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, 2019, such estimates also include allowances for uncollectible accounts receivable, sales adjustments and allowances, workers’ compensation losses, 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. |
Advertising Costs | Advertising Costs. The Company expenses all advertising costs as incurred. |
Leases | Leases. The Company determines if a contractual arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities, and noncurrent operating lease liabilities on the Company’s Condensed Consolidated Statement of Financial Position. The Company does not currently have finance leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. The lease payments included in the present value are fixed lease payments and index-based variable lease payments. As most of the Company’s leases do not provide an implicit rate, the Company estimates its collateralized incremental borrowing rate, based on information available at the commencement date, in determining the present value of lease payments. The Company applies the portfolio approach in applying discount rates to its classes of leases. The operating lease ROU assets include any payments made before the commencement date and exclude lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not currently have subleases. The Company does not currently have residual value guarantees or restrictive covenants in its leases. The Company has contracts with lease and non-lease components, which are accounted for on a combined basis.
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Internal-use Software | Internal-use Software. The Company capitalizes direct costs incurred in the development of internal-use software. Implementation costs incurred in hosting arrangements are capitalized and reported as a component of other current assets. All other internal-use software development costs are capitalized and reported as a component of computer software within property and equipment. |
New Accounting Pronouncements | Recently Adopted Accounting Pronouncements Lease Accounting. In February 2016, the Financial Accounting Standards Board (“FASB”) issued authoritative guidance which changes financial reporting as it relates to leasing transactions. Under the new guidance, lessees are required to recognize a lease liability, measured on a discounted basis; and a right-of-use asset, for the lease term. The Company adopted this guidance as of January 1, 2019, using the transition method that allowed it to initially apply the guidance as of the adoption date. The Company elected the package of practical expedients available under the new standard, which allowed the Company to forgo a reassessment of (1) whether any expired or existing contracts are or contain leases, (2) the lease classification for any expired or existing leases, and (3) the initial direct costs for any existing leases. The adoption of this guidance had a material impact on the Company’s Condensed Consolidated Statement of Financial Position beginning January 1, 2019. Prior periods were not restated. See Note G for further discussion of leases. Internal-use Software—Cloud Computing. In August 2018, the FASB issued authoritative guidance which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Entities are required to present the expense related to capitalized implementation costs in the same line item in the statement of operations as the fees associated with the hosting elements of the arrangement and classify the payments for the capitalized implementation costs in the statement of cash flows in the same manner as payments made for fees associated with the hosting element. Entities are also required to present the capitalized implementation costs in the statement of financial position in the same line item that a prepayment of the fees of the associated hosting arrangement would be presented. The new guidance is effective for annual and interim periods beginning after December 15, 2019, although early adoption is permitted. The Company has adopted the new guidance prospectively as of January 1, 2019, and the impact of adoption was not material to its financial statements. Recently Issued Accounting Pronouncements Not Yet Adopted Current Expected Credit Losses Model. In June 2016, the FASB issued authoritative guidance amending how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance requires the application of a current expected credit loss model, which is a new impairment model based on expected losses. The new guidance is effective for interim and annual reporting periods beginning after December 15, 2019, with early adoption permitted for annual reporting periods beginning after December 15, 2018. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures. Simplifying the Test for Goodwill Impairment. In January 2017, the FASB issued authoritative guidance to simplify the goodwill impairment testing process. The new standard eliminates Step 2 of the goodwill impairment test. If a company determines in Step 1 of the goodwill impairment test that the carrying value of goodwill is greater than the fair value, an impairment in that amount should be recorded to the income statement, rather than proceeding to Step 2. The new guidance is effective for the Company for fiscal years beginning after December 15, 2019, although early adoption is permitted. The Company believes the adoption of this guidance will not have a material impact on its financial statements.
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Commitments and Contingencies | Legal costs associated with the resolution of claims, lawsuits and other contingencies are expensed as incurred.
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Treasury Stock | The repurchased shares are held in treasury and are presented as if constructively retired. Treasury stock is accounted for using the cost method. Repurchase activity for the three and six months ended June 30, 2019 and 2018, is presented in the unaudited Condensed Consolidated Statements of Stockholders’ Equity. Repurchases of shares and issuances of cash dividends are applied first to the extent of retained earnings and any remaining amounts are applied to capital surplus.
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Summary of Significant Accounting Policies (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Advertising Costs | Advertising costs for the three and six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
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Internal-Use Software Development Costs Capitalized | Internal-use software development costs capitalized for the three and six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
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Revenue Recognition (Tables) |
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revenue Disaggregated by Line of Business | The following table presents the Company’s revenues disaggregated by line of business (in thousands):
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Schedule of Contract Liability Activity | The following table sets forth the activity in contract liabilities from December 31, 2018, through June 30, 2019 (in thousands):
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Other Current Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Current Assets | Other current assets consisted of the following (in thousands):
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Goodwill (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table sets forth the activity in goodwill from December 31, 2018 through June 30, 2019 (in thousands):
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Property and Equipment, Net (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Property and Equipment | Property and equipment consisted of the following (in thousands):
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Supplemental cash flow information related to leases consisted of the following (in thousands):
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Supplemental Balance Sheet Information | Supplemental balance sheet information related to leases consisted of the following:
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Schedule of Future Minimum Lease Payments | Future minimum lease payments under non-cancellable leases as of June 30, 2019, were as follows (in thousands):
(a) Includes current portion of $70.2 million for operating leases.
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Accrued Payroll and Benefit Costs (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Payroll Costs and Retirement Obligations | Accrued payroll and benefit costs consisted of the following (in thousands):
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Employee Retirement Obligations | Included in employee deferred compensation plans is the following (in thousands):
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Stockholders' Equity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Number and Cost of Common Stock Shares Repurchased | The number and the cost of common stock shares repurchased during the six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
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Number and Cost of Employee Stock Plan Repurchases | The number and the cost of repurchases related to employee stock plans made during the six months ended June 30, 2019 and 2018, are reflected in the following table (in thousands):
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Net Income Per Share (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Net Income Per Share | The calculation of net income per share for the three and six months ended June 30, 2019 and 2018, is reflected in the following table (in thousands, except per share amounts):
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Business Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Revenue and Operating Income by Reportable Segment to Consolidated Results | The following table provides a reconciliation of revenue and operating income by reportable segment to consolidated results for the three and six months ended June 30, 2019 and 2018 (in thousands):
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Subsequent Events (Tables) |
6 Months Ended | ||||||||||||
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Jun. 30, 2019 | |||||||||||||
Subsequent Events [Abstract] | |||||||||||||
Subsequent Events | On August 1, 2019, the Company announced the following:
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Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
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Accounting Policies [Abstract] | ||||
Advertising costs | $ 14,992 | $ 14,416 | $ 27,829 | $ 27,497 |
Internal-use software development costs | $ 7,864 | $ 1,812 | $ 12,900 | $ 2,267 |
Revenue Recognition - Remaining Performance Obligation (Details) $ in Millions |
Jun. 30, 2019
USD ($)
|
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Revenue from Contract with Customer [Abstract] | |
Aggregate transaction price allocated to performance obligations | $ 94.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2019-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Aggregate transaction price allocated to performance obligations | $ 89.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Remaining performance obligation, expected duration | 12 months |
Revenue Recognition - Schedule of Contract Liability Activity (Details) $ in Thousands |
6 Months Ended |
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Jun. 30, 2019
USD ($)
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Change in Contract with Customer, Liability [Abstract] | |
Balance as of December 31, 2018 | $ 12,997 |
Payments in advance of satisfaction of performance obligations | 6,932 |
Revenue recognized | (6,771) |
Other, including translation adjustments | (3,285) |
Balance as of June 30, 2019 | $ 9,873 |
Other Current Assets (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Deposits in trusts for employee deferred compensation plans | $ 360,949 | $ 311,708 |
Other | 92,236 | 90,877 |
Other current assets | $ 453,185 | $ 402,585 |
Goodwill (Details) |
6 Months Ended |
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Jun. 30, 2019
USD ($)
| |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | $ 209,958,000 |
Foreign currency translation adjustments | 291,000 |
Balance as of June 30, 2019 | 210,249,000 |
Goodwill impairment | 0 |
Temporary and consulting staffing | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 134,067,000 |
Foreign currency translation adjustments | 77,000 |
Balance as of June 30, 2019 | 134,144,000 |
Permanent placement staffing | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 26,058,000 |
Foreign currency translation adjustments | 20,000 |
Balance as of June 30, 2019 | 26,078,000 |
Risk consulting and internal audit services | |
Goodwill [Roll Forward] | |
Balance as of December 31, 2018 | 49,833,000 |
Foreign currency translation adjustments | 194,000 |
Balance as of June 30, 2019 | $ 50,027,000 |
Property and Equipment, Net - Components of Property and Equipment (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | $ 855,268 | $ 834,232 |
Accumulated depreciation | (727,280) | (709,056) |
Property and equipment, net | 127,988 | 125,176 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 183,287 | 177,237 |
Computer software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 378,948 | 378,734 |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 112,506 | 107,421 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | 168,881 | 160,521 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, cost | $ 11,646 | $ 10,319 |
Leases - Narrative (Details) $ in Millions |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
|
Operating Leased Assets [Line Items] | ||
Option to extend lease term | 5 years | 5 years |
Option to terminate lease term | 1 year | |
Operating lease expense | $ 17.9 | $ 35.9 |
Minimum | ||
Operating Leased Assets [Line Items] | ||
Remaining lease terms | 1 year | |
Maximum | ||
Operating Leased Assets [Line Items] | ||
Remaining lease terms | 10 years |
Leases - Lease Cost and Other Information (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2019
USD ($)
| |
Cash Flow, Operating Activities, Lessee [Abstract] | |
Cash paid for operating lease liabilities | $ 39,291 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 19,823 |
Weighted average remaining lease term: | |
Operating leases (in years) | 3 years 1 month 6 days |
Operating Leases, Weighted Average Discount Rate, Percent [Abstract] | |
Operating leases (percent) | 3.50% |
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2019 (excluding the six months ended June 30, 2019) | $ 38,978 | |
2020 | 74,052 | |
2021 | 57,776 | |
2022 | 44,509 | |
2023 | 37,221 | |
Thereafter | 54,259 | |
Less: Imputed interest | (36,783) | |
Present value of lease liabilities | 270,012 | |
Current operating lease liabilities | $ 70,175 | $ 0 |
Accrued Payroll and Benefit Costs (Detail) - USD ($) $ in Thousands |
Jun. 30, 2019 |
Dec. 31, 2018 |
---|---|---|
Payables and Accruals [Abstract] | ||
Payroll and benefits | $ 290,156 | $ 263,072 |
Employee deferred compensation plans | 371,898 | 333,528 |
Workers’ compensation | 19,715 | 18,251 |
Payroll taxes | 14,862 | 23,918 |
Accrued payroll and benefit costs | 696,631 | 638,769 |
Chief Executive Officer | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Deferred compensation plan and other benefits related to the Company’s Chief Executive Officer | $ 90,194 | $ 89,212 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
Jun. 30, 2019 |
Mar. 31, 2019 |
---|---|---|
Credit Agreement | Line of Credit | ||
Loss Contingencies [Line Items] | ||
Credit facility (up to) | $ 100,000,000 | |
Borrowings outstanding | $ 0 | |
Jessica Gentry | ||
Loss Contingencies [Line Items] | ||
Loss contingency | 0 | |
Shari Dorff | ||
Loss Contingencies [Line Items] | ||
Loss contingency | $ 0 |
Stockholders' Equity - Additional Information (Detail) shares in Millions |
Jun. 30, 2019
shares
|
---|---|
Equity [Abstract] | |
Maximum number of shares authorized to be repurchased (in shares) | 4.9 |
Stockholders' Equity - Number and Cost of Common Stock Shares Repurchased (Details) - USD ($) shares in Thousands, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Equity [Abstract] | ||
Common stock repurchased (in shares) | 1,812 | 2,194 |
Common stock repurchased | $ 111,228 | $ 135,989 |
Stockholders' Equity - Number and Cost of Employee Stock Plan Repurchases (Details) - USD ($) shares in Thousands, $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Equity [Abstract] | ||
Repurchases related to employee stock plans (in shares) | 257 | 147 |
Repurchases related to employee stock plans | $ 16,721 | $ 8,496 |
Net Income Per Share - Calculation of Net Income Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Earnings Per Share [Abstract] | ||||
Net income | $ 114,612 | $ 109,315 | $ 224,410 | $ 205,482 |
Basic: | ||||
Weighted average shares (in shares) | 116,381 | 121,307 | 116,722 | 121,619 |
Diluted: | ||||
Weighted average shares (in shares) | 116,381 | 121,307 | 116,722 | 121,619 |
Dilutive effect of potential common shares (in shares) | 607 | 961 | 753 | 957 |
Diluted weighted average shares (in shares) | 116,988 | 122,268 | 117,475 | 122,576 |
Net income per share: | ||||
Basic (in usd per share) | $ 0.98 | $ 0.90 | $ 1.92 | $ 1.69 |
Diluted (in usd per share) | $ 0.98 | $ 0.89 | $ 1.91 | $ 1.68 |
Business Segments - Additional Information (Detail) |
6 Months Ended |
---|---|
Jun. 30, 2019
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Business Segments - Reconciliation of Revenue and Operating Income by Reportable Segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Segment Reporting Information [Line Items] | ||||
Net service revenues | $ 1,516,385 | $ 1,457,054 | $ 2,984,915 | $ 2,852,387 |
Operating income | 159,402 | 149,511 | 305,631 | 283,878 |
Amortization of intangible assets | 341 | 442 | 683 | 905 |
Interest income, net | (1,042) | (1,006) | (2,538) | (1,741) |
Income before income taxes | 160,103 | 150,075 | 307,486 | 284,714 |
Operating Segments | Temporary and consultant staffing | ||||
Segment Reporting Information [Line Items] | ||||
Net service revenues | 1,102,712 | 1,087,974 | 2,187,339 | 2,154,262 |
Operating income | 105,238 | 103,570 | 211,256 | 200,293 |
Operating Segments | Permanent placement staffing | ||||
Segment Reporting Information [Line Items] | ||||
Net service revenues | 140,894 | 135,038 | 272,456 | 256,438 |
Operating income | 25,344 | 27,436 | 46,901 | 49,815 |
Operating Segments | Risk consulting and internal audit services | ||||
Segment Reporting Information [Line Items] | ||||
Net service revenues | 272,779 | 234,042 | 525,120 | 441,687 |
Operating income | $ 28,820 | $ 18,505 | $ 47,474 | $ 33,770 |
Subsequent Events - Dividend Announced (Details) - $ / shares |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Aug. 01, 2019 |
Jun. 30, 2019 |
Jun. 30, 2018 |
Jun. 30, 2019 |
Jun. 30, 2018 |
|
Subsequent Event [Line Items] | |||||
Quarterly dividend per share (in usd per share) | $ 0.31 | $ 0.28 | $ 0.62 | $ 0.56 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Quarterly dividend per share (in usd per share) | $ 0.31 | ||||
Declaration date | Aug. 01, 2019 | ||||
Record date | Aug. 23, 2019 | ||||
Payment date | Sep. 16, 2019 |
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