-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RlZm/AYSTcmomTWTts7+xqva/a/e1RNuu6U0mu6kw29nJtEFuRKWogiA33Uv20la tA/lmsWsJPT1pQhpCBzoWg== 0000912057-95-009300.txt : 19951106 0000912057-95-009300.hdr.sgml : 19951106 ACCESSION NUMBER: 0000912057-95-009300 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951103 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALF ROBERT INTERNATIONAL INC /DE/ CENTRAL INDEX KEY: 0000315213 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EMPLOYMENT AGENCIES [7361] IRS NUMBER: 941648752 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10427 FILM NUMBER: 95586933 BUSINESS ADDRESS: STREET 1: 2884 SAND HILL ROAD STREET 2: STE 200 CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 4158549700 MAIL ADDRESS: STREET 1: 2884 SAND HILL ROAD STREET 2: STE 200 CITY: MENLO PARK STATE: CA ZIP: 94025 FORMER COMPANY: FORMER CONFORMED NAME: BOOTHE FINANCIAL CORP /DE/ DATE OF NAME CHANGE: 19870721 FORMER COMPANY: FORMER CONFORMED NAME: BOOTHE INTERIM CORP DATE OF NAME CHANGE: 19600201 10-Q 1 10-Q - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------ FORM 10-Q (MARK ONE) /X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 OR / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO . ------------------------ COMMISSION FILE NUMBER 1-10427 ROBERT HALF INTERNATIONAL INC. (Exact name of registrant as specified in its charter) DELAWARE 94-1648752 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 2884 SAND HILL ROAD SUITE 200 MENLO PARK, CALIFORNIA 94025 (Address of principal executive offices) (zip-code) Registrant's telephone number, including area code: (415) 854-9700 ------------------------ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) had been subject to such filing requirements for the past 90 days. Yes _X_ No ____ Indicate the number of shares outstanding of each of the issuer's classes of common stock as of September 30, 1995: 28,587,167 shares of $.001 par value Common Stock - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (IN THOUSANDS, EXCEPT SHARE AMOUNTS) ASSETS:
SEPTEMBER 30, 1995 DECEMBER 31, 1994 ------------------ ----------------- (UNAUDITED) Cash and cash equivalents....................................................... $ 31,732 $ 2,638 Accounts receivable, less allowances of $2,814 in 1995 and $2,600 in 1994....... 79,918 60,025 Other current assets............................................................ 5,666 5,040 ---------- ----------------- Total current assets........................................................ 117,316 67,703 Intangible assets, less accumulated amortization of $31,801 in 1994 and $28,243 in 1994........................................................................ 154,897 152,824 Other assets.................................................................... 10,724 7,234 ---------- ----------------- Total assets................................................................ $ 282,937 $ 227,761 ---------- ----------------- ---------- ----------------- LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable and accrued expenses........................................... $ 9,805 $ 7,232 Accrued payroll costs........................................................... 31,706 19,133 Income taxes payable............................................................ 4,363 2,181 Current portion of notes payable and other indebtedness......................... 3,632 1,081 ---------- ----------------- Total current liabilities................................................... 49,506 29,627 Notes payable and other indebtedness, less current portion...................... 2,089 3,133 Deferred income taxes........................................................... 19,775 18,006 ---------- ----------------- Total liabilities........................................................... 71,370 50,766 STOCKHOLDERS' EQUITY: Common stock, $.001 par value, authorized 100,000,000, issued and outstanding 28,589,890 in 1995 and 28,152,201 in 1994...................................... 29 28 Capital surplus................................................................. 90,888 82,655 Deferred compensation........................................................... (6,850) (5,533) Accumulated translation adjustments............................................. 181 (541) Retained earnings............................................................... 127,319 100,386 ---------- ----------------- Total stockholders' equity.................................................. 211,567 176,995 ---------- ----------------- Total liabilities and stockholders' equity.................................. $ 282,937 $ 227,761 ---------- ----------------- ---------- -----------------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 1 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------- -------------------- 1995 1994 1995 1994 -------- -------- -------- -------- (UNAUDITED) (UNAUDITED) Net service revenues.................................................. $159,303 $114,903 $452,612 $321,313 Direct costs of services, consisting of payroll, payroll taxes and insurance costs for temporary employees.............................. 97,107 70,259 276,645 196,676 -------- -------- -------- -------- Gross margin.......................................................... 62,196 44,644 175,967 124,637 Selling, general and administrative expenses.......................... 43,358 31,455 123,251 87,540 Amortization of intangible assets..................................... 1,190 1,152 3,496 3,431 Interest.............................................................. (217) 371 (200) 1,326 -------- -------- -------- -------- Income before income taxes............................................ 17,865 11,666 49,420 32,340 Provision for income taxes............................................ 7,402 4,924 20,603 13,721 -------- -------- -------- -------- Net income............................................................ $ 10,463 $ 6,742 $ 28,817 $ 18,619 -------- -------- -------- -------- -------- -------- -------- -------- Net income per share.................................................. $ .35 $ .24 $ .98 $ .66 -------- -------- -------- -------- -------- -------- -------- --------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 2 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, ------------------- 1995 1994 -------- -------- (UNAUDITED) COMMON STOCK: Balance at beginning of period.................................................. $ 28 $ 26,837 Issuance of restricted stock, net -- par value.................................. -- 334 Exercise of stock options -- par value.......................................... 1 213 Repurchases of common stock -- par value........................................ -- (59) Change in par value............................................................. -- (27,298) -------- -------- Balance at end of period...................................................... $ 29 $ 27 -------- -------- -------- -------- CAPITAL SURPLUS: Balance at beginning of period.................................................. $ 82,655 $ 33,113 Issuance of restricted stock, net -- excess over par value...................... 3,290 5,025 Exercises of stock options -- excess over par value............................. 2,498 1,387 Tax benefits from exercises of stock options.................................... 2,445 1,536 Change in par value............................................................. -- 27,298 -------- -------- Balance at end of period...................................................... $ 90,888 $ 68,359 -------- -------- -------- -------- DEFERRED COMPENSATION: Balance at beginning of period.................................................. $ (5,533) $ (2,113) Issuance of restricted stock, net............................................... (3,290) (5,359) Amortization of deferred compensation........................................... 1,973 1,348 -------- -------- Balance at end of period...................................................... $ (6,850) $ (6,124) -------- -------- -------- -------- ACCUMULATED TRANSLATION ADJUSTMENTS: Balance at beginning of period.................................................. $ (541) $ (589) Translation adjustments......................................................... 722 267 -------- -------- Balance at end of period...................................................... $ 181 $ (322) -------- -------- -------- -------- RETAINED EARNINGS: Balance at beginning of period.................................................. $100,386 $ 76,354 Repurchases of common stock -- excess over par value............................ (1,884) (1,012) Net income...................................................................... 28,817 18,619 -------- -------- Balance at end of period...................................................... $127,319 $ 93,961 -------- -------- -------- --------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 3 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30, -------------------- 1995 1994 -------- -------- (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income...................................................................... $ 28,817 $ 18,619 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets............................................. 3,496 3,431 Depreciation expense.......................................................... 2,489 1,952 Deferred income taxes......................................................... 1,069 1,077 Changes in assets and liabilities, net of effects of acquisitions: Increase in accounts receivable............................................. (19,252) (13,060) Increase in accounts payable, accrued expenses and accrued payroll costs.... 13,520 6,689 Increase in income taxes payable............................................ 2,182 635 Change in other assets, net of change in other liabilities.................. 1,987 2,740 -------- -------- Total adjustments........................................................... 5,491 3,464 -------- -------- Net cash and cash equivalents provided by operating activities.................. 34,308 22,083 CASH FLOWS USED IN INVESTING ACTIVITIES: Acquisitions, net of cash acquired............................................ (1,024) (4,406) Capital expenditures.......................................................... (5,957) (3,422) -------- -------- Cash and cash equivalents used in investing activities.......................... (6,981) (7,828) CASH FLOWS USED IN FINANCING ACTIVITIES: Borrowings under credit agreement............................................. -- 79,000 Repayments under credit agreement............................................. -- (95,600) Repurchases of common stock or common stock equivalents....................... (1,884) (1,071) Principal payments on notes payable and other indebtedness.................... (1,292) (351) Proceeds and tax benefits from exercise of stock options...................... 4,943 3,136 -------- -------- Net cash and cash equivalents used in financing activities...................... 1,767 (14,886) -------- -------- Net decrease in cash and cash equivalents....................................... 29,094 (631) Cash and cash equivalents at beginning of period................................ 2,638 1,773 -------- -------- Cash and cash equivalents at end of period...................................... $ 31,732 $ 1,142 -------- -------- -------- -------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest...................................................................... $ 384 $ 1,230 Income taxes.................................................................. 6,393 10,035 Acquisitions: Fair value of assets acquired -- Intangible assets........................................................... $ 4,697 $ 5,452 Other....................................................................... 753 1,694 Liabilities incurred -- Notes payable and contracts................................................. (2,800) (2,158) Other....................................................................... (1,626) (582) -------- -------- Cash paid, net of cash acquired............................................... $ 1,024 $ 4,406 -------- -------- -------- --------
The accompanying Notes to Consolidated Financial Statements are an integral part of these financial statements. 4 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (UNAUDITED) NOTE A -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include the accounts of Robert Half International Inc. (the "Company") and its subsidiaries, all of which are wholly-owned. The company is a Delaware corporation. All significant intercompany balances have been eliminated. Certain reclassifications have been made to the 1994 financial statements to conform to the 1995 presentation. INTERIM FINANCIAL INFORMATION. The Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC") and, in management's opinion, include all adjustments necessary for a fair statement of results for such interim periods. Certain information and note disclosures normally included in annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to SEC rules or regulations; however, the Company believes that the disclosures made are adequate to make the information presented not misleading. The interim results for the three and nine months ended September 30, 1995, and 1994 are not necessarily indicative of results for the full year. It is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 1994. REVENUE RECOGNITION. Temporary service revenues are recognized when the services are rendered by the Company's temporary employees. Permanent placement revenues are recognized when employment candidates accept offers of permanent employment. Reserves are established to estimate losses due to placed candidates not remaining in employment for the Company's guarantee period, typically 90 days. FOREIGN CURRENCY TRANSLATION. Foreign income statement items are translated at the monthly average exchange rates prevailing during the period. Foreign balance sheets are translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as part of Stockholders' Equity. Gains and losses resulting from foreign currency transactions are included in the consolidated statements of income. CASH AND CASH EQUIVALENTS. For purposes of the Consolidated Statements of Cash Flows, the Company classifies all highly-liquid investments with a maturity of three months or less as cash equivalents. INTANGIBLE ASSETS. Intangible assets represent the cost of acquired companies in excess of the fair market value of their net tangible assets at the acquisition date, and are being amortized on a straight-line basis over a period of 40 years. The carrying value of intangible assets is periodically reviewed by the Company and impairments are recognized when the expected future operating cash flows derived from such intangible assets are less than their carrying value. Based upon its most recent analysis, the Company believes that no material impairment of intangibles exists at September 30, 1995. INCOME TAXES. Deferred taxes are computed based on the difference between the financial statement and income tax bases of assets and liabilities using the enacted marginal tax rate. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR EACH OF THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994. Net service revenues increased 38.6% during the third quarter of 1995 compared to the same period in 1994. Net service revenues for the nine months ending September 30, 1995 increased 40.9% compared to the nine months ending September 30, 1994. Temporary service revenues increased approximately 38.9% and 41.4% during the three and nine months ended September 30, 1995, relative to the three and nine months ended September 30, 1994, including the revenues from the Company's OFFICETEAM-REGISTERED TRADEMARK- division which was started in 1991 to provide skilled office and administrative personnel. Permanent placement revenues increased 36.9% and 36.3% during the comparable three and nine months ending September 30, 1995 and 1994. The revenue comparisons reflect continued improvement in the demand for the Company's services. Gross margin dollars increased 39.3% and 41.2% during the three and nine month periods ending September 30, 1995, compared with the corresponding three and nine month periods ending September 30, 1994. Gross margin amounts equaled 39.0% and 38.9% of revenue for the three and nine month periods ending September 30, 1995 and 38.9% and 38.8% of revenue for the three and nine month periods ending September 30, 1994. The percentage increase relates primarily to the strengthening of gross margins in the Company's temporary staffing divisions. Selling, general and administrative expenses were approximately $43 million and $123 million during the three and nine months ended September 30, 1995 compared to approximately $31 million and $88 million during the three and nine months ended September 30, 1994. Selling, general and administrative expenses as a percentage of revenues was 27.2% for both the three and nine months ended September 30, 1995 compared to 27.4% and 27.2% in the three and nine months ended September 30, 1994. Interest income/expense for the three and nine months ended September 30, 1995 decreased by 158.5% and 115.1% over the comparable 1994 periods due to an increase in interest income from an increase in cash and cash equivalents and a decrease in interest expense due to a reduction of outstanding indebtedness. The provision for income taxes for the three and nine months ended September 30, 1995, was 41.4% and 41.7% compared to 42.2% and 42.4% of income before taxes for the same periods in 1994. The decrease in 1995 is the result of a smaller percentage of non-deductible intangible expenses relative to income. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1995, the Company's sources of liquidity included approximately $31.7 million in cash and cash equivalents and $67.8 million in net working capital. In addition, as of September 30, 1995, approximately $77.1 million remained available for borrowing under the Company's $80 million bank revolving credit facility at interest rates of either the Eurodollar rate plus 1% or at prime. The Company's liquidity during the first nine months of 1995 was increased by $34.3 million from funds generated by operating activities. These funds were used for personnel services acquisitions, capital expenditures and payments on outstanding indebtedness. The Company's working capital requirements consist primarily of the financing of accounts receivable. While there can be no assurances in this regard, the Company expects that internally generated cash plus the bank revolving credit facility will be sufficient for the foreseeable future to support the working capital needs of the Company. 6 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None ITEM 2. CHANGES IN SECURITIES None ITEM 3. DEFAULTS UPON SENIOR SECURITIES None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
EXHIBIT NO. - ----------- 11 Computation of Per Share Earnings. 27 Financial Data Schedules.
(b) The registrant filed no current report on Form 8-K during the quarter covered by this report. 7 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ROBERT HALF INTERNATIONAL INC. (Registrant) /s/ BARBARA J. FORSBERG -------------------------------------- Barbara J. Forsberg VICE PRESIDENT AND CONTROLLER, (CHIEF ACCOUNTING OFFICER AND DULY AUTHORIZED SIGNATORY) Date: November 2, 1995 8 INDEX TO EXHIBITS
SEQUENTIALLY NUMBER EXHIBIT NUMBERED PAGE - ------- -------------------------------------------------------------------------------- ------------- 11 Computation of Per Share Earnings. 27 Financial Data Schedules.
EX-11 2 EXHIBIT 11. EXHIBIT 11 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, -------------------- -------------------- 1995 1994 1995 1994 --------- --------- --------- --------- (UNAUDITED) (UNAUDITED) Net Income......................................................... $ 10,463 $ 6,742 $ 28,817 $ 18,619 --------- --------- --------- --------- --------- --------- --------- --------- Weighted Average Number Of Shares Outstanding: Primary: Common stock................................................... 28,490 27,357 28,393 27,203 Common stock equivalents -- Stock options (A)............................................ 996 1,032 967 955 --------- --------- --------- --------- Primary shares outstanding..................................... 29,486 28,389 29,360 28,158 --------- --------- --------- --------- --------- --------- --------- --------- Fully Diluted: Common stock................................................... 28,490 27,357 28,393 27,203 Common stock equivalents -- Stock options (A)............................................ 1,084 1,031 1,161 1,010 --------- --------- --------- --------- Fully diluted shares outstanding............................... 29,574 28,388 29,554 28,213 --------- --------- --------- --------- --------- --------- --------- --------- Net Income Per Share: Primary........................................................ $ .35 $ .24 $ .98 $ .66 Fully diluted.................................................. $ .35 $ .24 $ .98 $ .66
- ------------------------ (A) The treasury stock method was used to determine the weighted average number of shares of common stock equivalents outstanding during the periods. EX-27 3 EX-27 (FDS)
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1994 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS YEAR DEC-31-1995 DEC-31-1994 JAN-01-1995 JAN-01-1994 SEP-30-1995 DEC-31-1994 31,732 2,638 0 0 82,732 62,625 2,814 2,600 0 0 117,316 67,703 0 0 0 0 282,937 227,761 49,506 29,627 0 3,133 29 28 0 0 0 0 211,538 176,995 282,937 227,761 0 0 452,612 446,328 0 0 276,645 273,327 3,496 4,584 0 0 (200) 1,570 49,420 45,207 20,603 19,090 28,817 26,117 0 0 0 0 0 0 28,817 26,117 .98 .92 .98 .92
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