-----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, GNvzEDNQnvSGq036StdmMqqI5IfqZwTZ/VD5g/7UozY/3mRaqWa5ogCNB2LI9Or+ O8qeJpuUoihwRdyKQEEKLQ== 0000912057-01-525947.txt : 20010801 0000912057-01-525947.hdr.sgml : 20010801 ACCESSION NUMBER: 0000912057-01-525947 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010630 FILED AS OF DATE: 20010731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HALF ROBERT INTERNATIONAL INC /DE/ CENTRAL INDEX KEY: 0000315213 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-HELP SUPPLY SERVICES [7363] IRS NUMBER: 941648752 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-10427 FILM NUMBER: 1694310 BUSINESS ADDRESS: STREET 1: 2884 SAND HILL RD STREET 2: STE 200 CITY: MENLO PARK STATE: CA ZIP: 94025 BUSINESS PHONE: 6502346000 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 a2053706z10-q.txt 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 JUNE 30, 2001 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 94025 SUITE 200 (zip-code) MENLO PARK, CALIFORNIA (Address of principal executive offices)
Registrant's telephone number, including area code: (650) 234-6000 ------------------------ 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 June 30, 2001: 175,681,314 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)
JUNE 30, DECEMBER 31, 2001 2000 ---------- ------------ (UNAUDITED) ASSETS: Cash and cash equivalents................................... $ 278,343 $239,192 Accounts receivable, less allowances of $16,807 and $17,207.................................................... 353,550 390,369 Other current assets........................................ 56,149 42,049 ---------- -------- Total current assets.................................... 688,042 671,610 Intangible assets, less accumulated amortization of $73,328 and $69,290................................................ 163,094 168,050 Property and equipment, less accumulated depreciation of $149,901 and $118,940...................................... 151,460 131,369 ---------- -------- Total assets............................................ $1,002,596 $971,029 ========== ======== LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable and accrued expenses....................... $ 37,104 $ 51,073 Accrued payroll costs....................................... 158,606 182,241 Income taxes payable........................................ 7,937 2,619 Current portion of notes payable and other indebtedness..... 1,157 1,223 ---------- -------- Total current liabilities............................... 204,804 237,156 Notes payable and other indebtedness, less current portion.................................................... 2,511 2,541 Deferred income taxes and other liabilities................. 15,622 12,793 ---------- -------- Total liabilities....................................... 222,937 252,490 Commitments and Contingencies STOCKHOLDERS' EQUITY: Common stock, $.001 par value authorized 260,000,000 shares; issued and outstanding 175,051,194 and 176,050,349 shares......................................... 175 176 Capital surplus............................................. 445,819 406,471 Deferred compensation....................................... (60,176) (72,870) Accumulated other comprehensive income...................... (7,933) (4,192) Retained earnings........................................... 401,774 388,954 ---------- -------- Total stockholders' equity.............................. 779,659 718,539 ---------- -------- Total liabilities and stockholders' equity.............. $1,002,596 $971,029 ========== ========
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 SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------- ----------------------- 2001 2000 2001 2000 -------- -------- ---------- ---------- (UNAUDITED) (UNAUDITED) Net service revenues............................. $648,404 $671,000 $1,367,677 $1,303,846 Direct costs of services, consisting of payroll, payroll taxes and insurance costs for temporary employees....................................... 375,641 381,534 783,928 743,331 -------- -------- ---------- ---------- Gross margin..................................... 272,763 289,466 583,749 560,515 Selling, general and administrative expenses..... 212,552 214,752 447,536 415,696 Amortization of intangible assets................ 1,333 1,251 2,669 2,504 Interest income, net............................. (2,250) (2,458) (4,661) (3,914) -------- -------- ---------- ---------- Income before income taxes....................... 61,128 75,921 138,205 146,229 Provision for income taxes....................... 23,412 29,078 52,932 56,006 -------- -------- ---------- ---------- Net income....................................... $ 37,716 $ 46,843 $ 85,273 $ 90,223 ======== ======== ========== ========== Basic net income per share....................... $ .22 $ .26 $ .49 $ .51 Diluted net income per share..................... $ .21 $ .25 $ .47 $ .49
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)
SIX MONTHS ENDED JUNE 30, ------------------- 2001 2000 -------- -------- (UNAUDITED) COMMON STOCK--SHARES: Balance at beginning of period............................ 176,050 176,148 Issuances of restricted stock............................. 89 1,152 Repurchases of common stock............................... (2,861) (1,512) Exercises of stock options................................ 1,773 2,222 -------- -------- Balance at end of period................................ 175,051 178,010 ======== ======== COMMON STOCK--PAR VALUE: Balance at beginning of period............................ $ 176 $ 176 Issuances of restricted stock............................. -- 1 Repurchases of common stock............................... (3) (1) Exercises of stock options................................ 2 2 -------- -------- Balance at end of period................................ $ 175 $ 178 ======== ======== CAPITAL SURPLUS: Balance at beginning of period............................ $406,471 $303,004 Issuances of restricted stock--excess over par value...... 3,466 43,512 Exercises of stock options--excess over par value......... 20,702 14,790 Impact of equity incentive plans.......................... 15,180 14,114 -------- -------- Balance at end of period................................ $445,819 $375,420 ======== ======== DEFERRED COMPENSATION: Balance at beginning of period............................ $(72,870) $(54,127) Issuances of restricted stock............................. (3,466) (43,513) Amortization of deferred compensation..................... 16,160 16,026 -------- -------- Balance at end of period................................ $(60,176) $(81,614) ======== ======== ACCUMULATED OTHER COMPREHENSIVE INCOME: Balance at beginning of period............................ $ (4,192) $ (2,420) Translation adjustments................................... (3,741) (1,435) -------- -------- Balance at end of period................................ $ (7,933) $ (3,855) ======== ======== RETAINED EARNINGS: Balance at beginning of period............................ $388,954 $329,469 Repurchases of common stock--excess over par value........ (72,453) (37,550) Net income................................................ 85,273 90,223 -------- -------- Balance at end of period................................ $401,774 $382,142 ======== ======== COMPREHENSIVE INCOME: Net income................................................ $ 85,273 $ 90,223 Translation adjustments................................... (3,741) (1,435) -------- -------- Total comprehensive income.............................. $ 81,532 $ 88,788 ======== ========
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)
SIX MONTHS ENDED JUNE 30, ------------------- 2001 2000 -------- -------- (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income................................................ $ 85,273 $ 90,223 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets..................... 2,669 2,504 Depreciation expense.................................. 32,221 24,584 Provision for deferred income taxes................... (5,978) (14,214) Tax impact of equity incentive plans.................. 15,180 14,114 Changes in assets and liabilities, net of effects of acquisitions: (Increase) decrease in accounts receivable............ 36,819 (54,896) Increase (decrease) in accounts payable, accrued expenses and accrued payroll costs.................. (37,242) 50,258 Increase in income taxes payable...................... 5,318 2,451 Change in other assets, net of change in other liabilities......................................... 9,562 14,534 -------- -------- Total adjustments....................................... 58,549 39,335 -------- -------- Net cash and cash equivalents provided by operating activities.............................................. 143,822 129,558 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisitions, net of cash acquired........................ -- (693) Capital expenditures...................................... (52,823) (27,996) -------- -------- Net cash and cash equivalents used in investing activities.............................................. (52,823) (28,689) CASH FLOWS FROM FINANCING ACTIVITIES: Repurchases of common stock and common stock equivalents............................................. (72,456) (37,551) Principal payments on notes payable and other indebtedness............................................ (96) (556) Proceeds and capital impact of equity incentive plans..... 20,704 14,792 -------- -------- Net cash and cash equivalents used in financing activities.............................................. (51,848) (23,315) -------- -------- Net increase in cash and cash equivalents................... 39,151 77,554 Cash and cash equivalents at beginning of period............ 239,192 151,074 -------- -------- Cash and cash equivalents at end of period.................. $278,343 $228,628 ======== ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest.................................................. $ 150 $ 165 Income taxes.............................................. $ 38,385 $ 49,741 Acquisitions: Asset acquired-- Intangible assets....................................... $ -- $ 703 Other................................................... -- 90 Liabilities incurred-- Other................................................... -- (100) -------- -------- Cash paid, net of cash acquired........................... $ -- $ 693 ======== ========
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 JUNE 30, 2001 (UNAUDITED) NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NATURE OF OPERATIONS. Robert Half International Inc. (the "Company") provides specialized staffing services through such divisions as ACCOUNTEMPS-REGISTERED TRADEMARK-, ROBERT HALF-REGISTERED TRADEMARK-, OFFICETEAM-REGISTERED TRADEMARK-, RHI CONSULTING-REGISTERED TRADEMARK-, RHI MANAGEMENT RESOURCES-REGISTERED TRADEMARK-, THE AFFILIATES-REGISTERED TRADEMARK-, and THE CREATIVE GROUP-REGISTERED TRADEMARK-. The Company, through its ACCOUNTEMPS, ROBERT HALF, and RHI MANAGEMENT RESOURCES divisions, is the world's largest specialized provider of temporary, full-time, and project professionals in the fields of accounting and finance. OFFICETEAM specializes in highly skilled temporary administrative support personnel. RHI CONSULTING provides information technology professionals. THE AFFILIATES provides temporary, project, and full-time staffing of attorneys and specialized support personnel within law firms and corporate legal departments. THE CREATIVE GROUP provides project staffing in the advertising, marketing, and web design fields. Revenues are predominantly from temporary services. The Company operates in the United States, Canada, Europe, Australia, and New Zealand. The Company is a Delaware corporation. PRINCIPLES OF CONSOLIDATION. The Consolidated Financial Statements include the accounts of the Company and its subsidiaries, all of which are wholly-owned. All significant intercompany balances have been eliminated. Certain reclassifications have been made to the 2000 financial statements to conform to the 2001 presentation. REVENUE RECOGNITION. Temporary and consultant staffing services revenues are recognized when the services are rendered by the Company's temporary employees. Permanent placement staffing revenues are recognized when employment candidates accept offers of permanent employment. Allowances are established to estimate losses due to placed candidates not remaining employed for the Company's guarantee period, typically 90 days. CASH AND CASH EQUIVALENTS. The Company considers all highly liquid investments with a maturity of three months or less as cash equivalents. INTANGIBLE ASSETS. Intangible assets primarily consist of the cost of acquired companies in excess of the fair market value of their net tangible assets at acquisition date, which 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 intangible assets existed at June 30, 2001. 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 rates. FOREIGN CURRENCY TRANSLATION. The results of operations of the Company's foreign subsidiaries are translated at the monthly average exchange rates prevailing during the period. The financial position of the Company's foreign subsidiaries is translated at the current exchange rates at the end of the period, and the related translation adjustments are recorded as a component of comprehensive income within Stockholders' Equity. Gains and losses resulting from foreign currency transactions are included in the Consolidated Statements of Income. USE OF ESTIMATES. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported 5 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2001 (UNAUDITED) NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. PROPERTY AND EQUIPMENT. Property and equipment are recorded at cost. Depreciation expense is computed using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the life of the related asset or the life of the lease. ADVERTISING COSTS. The Company expenses all advertising costs as incurred. NOTE B--NET INCOME PER SHARE The calculation of net income per share for the three and six months ended June 30, 2001 and 2000 is reflected in the following table (in thousands, except per share amounts):
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------- ------------------- 2001 2000 2001 2000 -------- -------- -------- -------- (UNAUDITED) (UNAUDITED) Net Income.......................... $ 37,716 $ 46,843 $ 85,273 $ 90,223 Basic: Weighted average shares........... 174,474 178,447 174,806 177,790 ======== ======== ======== ======== Diluted: Weighted average shares........... 174,474 178,447 174,806 177,790 Common stock equivalents--stock options......................... 7,549 8,795 7,400 7,489 -------- -------- -------- -------- Diluted shares.................... 182,023 187,242 182,206 185,279 ======== ======== ======== ======== Net Income Per Share: Basic............................. $ .22 $ .26 $ .49 $ .51 Diluted........................... $ .21 $ .25 $ .47 $ .49
NOTE C--BUSINESS SEGMENTS The Company has two reportable segments: temporary and consultant staffing, and permanent placement staffing. The temporary and consultant staffing segment provides specialized personnel 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, and information technology fields. The accounting policies of the segments are the same as those described in Note A: Summary of Significant Accounting Policies. The Company evaluates performance based on profit or loss from operations before interest expense, intangible amortization expense, and income taxes. 6 ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) JUNE 30, 2001 (UNAUDITED) NOTE C--BUSINESS SEGMENTS (CONTINUED) The following table provides a reconciliation of revenue and operating profit by reportable segment to consolidated results (in thousands):
THREE MONTHS ENDED SIX MONTHS ENDED JUNE 30, JUNE 30, ------------------- ----------------------- 2001 2000 2001 2000 -------- -------- ---------- ---------- (UNAUDITED) (UNAUDITED) Net service revenues Temporary and consultant staffing.............. $594,176 $605,605 $1,248,409 $1,180,350 Permanent placement staffing................... 54,228 65,395 119,268 123,496 -------- -------- ---------- ---------- $648,404 $671,000 $1,367,677 $1,303,846 ======== ======== ========== ========== Operating income Temporary and consultant staffing.............. $ 49,901 $ 56,883 $ 112,665 $ 111,040 Permanent placement staffing................... 10,310 17,831 23,548 33,779 -------- -------- ---------- ---------- 60,211 74,714 136,213 144,819 Amortization of intangible assets................ 1,333 1,251 2,669 2,504 Interest income, net............................. (2,250) (2,458) (4,661) (3,914) -------- -------- ---------- ---------- Income before income taxes....................... $ 61,128 $ 75,921 $ 138,205 $ 146,229 ======== ======== ========== ==========
NOTE D--NEW ACCOUNTING PRONOUNCEMENTS In July 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 141, BUSINESS COMBINATIONS, and No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS. SFAS No. 141 requires all business combinations initiated after June 30, 2001, to be accounted for using the purchase method. Under SFAS No. 142, goodwill is no longer subject to amortization over its estimated useful life. The Company will adopt SFAS No. 142 on January 1, 2002, resulting in the discontinuance of the amortization of certain intangible assets currently amortized over 40 years. The methods used for evaluating and measuring impairment of those assets will change. While the Company has not applied the new impairment analysis, it is not expected to have a material effect on the financial statements. 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Certain information contained in Management's Discussion and Analysis and in other parts of this report may be deemed forward-looking statements regarding events and financial trends that may affect the Company's future operating results or financial positions. These statements may be identified by words such as "estimate", "project", "plan", "intend", "believe", "expect", "anticipate", or variations or negatives thereof or by similar or comparable words or phrases. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the statements. These risks and uncertainties include, but are not limited to, the following: changes in levels of unemployment and other economic conditions in the U.S. or foreign countries where the Company does business, or in particular regions or industries; reduction in the supply of qualified candidates for temporary employment or the Company's ability to attract qualified candidates; the entry of new competitors into the marketplace or expansion by existing competitors; the ability of the Company to maintain existing client relationships and attract new clients in the context of changing economic or competitive conditions; the impact of competitive pressures, including any change in the demand for the Company's services, on the Company's ability to maintain its profit margins; the possibility of the Company incurring liability for the activities of its temporary employees or for events impacting its temporary employees on clients' premises; the success of the Company in attracting, training and retaining qualified management personnel and other staff employees; and whether governments will impose additional regulations or licensing requirements on personnel services businesses in particular or on employer/ employee relationships in general. Because long-term contracts are not a significant part of the Company's business, future results cannot be reliably predicted by considering past trends or extrapolating past results. RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2001 AND 2000 Temporary and consultant staffing services revenues were $594 million and $606 million for the three months ended June 30, 2001 and 2000, respectively, decreasing by 2% during the three months ended June 30, 2001 compared to the same period in 2000. Temporary and consultant staffing services revenues were $1,249 million and $1,180 million for the six months ended June 30, 2001 and 2000, respectively, increasing by 6% during the six months ended June 30, 2001 compared to the same period in 2000. Permanent placement revenues were $54 million and $65 million for the three months ended June 30, 2001 and 2000, respectively, decreasing by 17% during the three months ended June 30, 2001 compared to the same period in 2000. Permanent placement revenues were $119 million and $124 million for the six months ended June 30, 2001 and 2000, respectively, decreasing by 3% during the six months ended June 30, 2001 compared to the same period in 2000. Results were impacted by the weakening economy. As of June 30, 2001, the Company had 334 offices in 40 states and the District of Columbia and ten foreign countries. Revenues from domestic operations represented 86% of revenues for both the three and six months ended June 30, 2001, and 89% of revenues for both the three and six months ended June 30, 2000. Revenues from foreign operations represented 14% of revenues for both the three and six months ended June 30, 2001, and 11% of revenues for both the three and six months ended June 30, 2000. Gross margin dollars from the Company's temporary and consultant staffing services represent revenues less direct costs of services, which consist of payroll, payroll taxes and insurance costs for temporary employees. Gross margin dollars from permanent placement services are equal to revenues, as there are no direct costs associated with such revenues. Gross margin dollars for the Company's temporary and consultant staffing services were $219 million and $465 million for the three and six months ended June 30, 2001, respectively, compared to $224 million and $437 million for the comparable periods in 2000, decreasing by 2% for the three months ended June 30, 2001, and increasing by 6% for the six months ended June 30, 2001. Gross margin amounts equaled 37% of revenues for temporary and consultant staffing services for both the three and six months ended June 30, 2001, compared to 37% of temporary and consultant staffing service revenues for both the three and six months ended June 30, 2000, which the Company believes reflects its ability to adjust billing rates and wage rates to underlying market conditions. Gross margin dollars for the Company's permanent placement division were $54 million and $119 million 8 for the three and six months ended June 30, 2001, respectively, compared to $65 million and $124 million for the comparable periods in 2000, decreasing by 17% and 3% for the three and six months ended June 30, 2001, respectively. Selling, general and administrative expenses were $213 million and $448 million for the three and six months ended June 30, 2001, respectively, compared to $215 million and $416 million during the three and six months ended June 30, 2000, respectively. Selling, general and administrative expenses as a percentage of revenues were 33% for both the three and six months ended June 30, 2001, compared to 32% for both the three and six months ended June 30, 2000, respectively. Selling, general and administrative expenses consist primarily of staff compensation, advertising, depreciation, and occupancy costs. The increase in 2001 relates primarily to additional field staff and ongoing technology investments. The Company allocates the excess of cost over the fair market value of the net tangible assets first to identifiable intangible assets, if any, and then to goodwill. Although management believes that goodwill has an unlimited life, the Company amortizes these costs over 40 years. Management believes that its previous acquisitions of established companies in established markets and maintaining its presence in these markets preserves the goodwill for an indeterminate period. 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 is less than their carrying value. Based upon its most recent analysis, the Company believes that no material impairment of intangible assets existed at June 30, 2001. Net intangible assets represented 16% of total assets and 21% of total stockholders' equity at June 30, 2001. Interest income for the three months ended June 30, 2001 and 2000 was $2.4 million and $2.7 million respectively. Interest expense for both the three months ended June 30, 2001 and 2000 was $.2 million. Interest income for the six months ended June 30, 2001 and 2000 was $5.1 million and $4.4 million respectively, while interest expense for the six months ended June 30, 2001 and 2000 was $.4 million and $.5 million, respectively. The provision for income taxes was 38% for both the three and six months ended June 30, 2001, respectively, and 38% for both the three and six months ended June 30, 2000, respectively. LIQUIDITY AND CAPITAL RESOURCES The change in the Company's liquidity during the six months ended June 30, 2001 is the net effect of funds generated by operations and the funds used for capital expenditures, repurchases of common stock and principal payments on outstanding notes payable. As of June 30, 2001, the Company has authorized the repurchase, from time to time, of up to 28 million shares of the Company's common stock on the open market or in privately negotiated transactions, depending on market conditions. During the six months ended June 30, 2001, the Company repurchased approximately 2.1 million shares of common stock on the open market bringing the total shares repurchased under the authorization to 17.8 million. Repurchases of the securities have been funded with cash generated from operations. For the six months ended June 30, 2001, the Company generated $144 million from operations, used $53 million in investing activities and used $52 million in financing activities. The Company's working capital at June 30, 2001, included $278 million in cash and cash equivalents. In addition at June 30, 2001, the Company had available $75 million of its $80 million bank revolving line of credit. 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 line of credit will be sufficient to support the working capital needs of the Company, the Company's fixed payments, and other obligations on both a short and long-term basis. As of June 30, 2001, the Company had no material capital commitments. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company's market risk sensitive instruments do not subject the Company to material market risk exposures. 9 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 On May 3, 2001, registrant held its annual meeting of stockholders. The only matter presented to stockholders at the annual meeting was the election of two directors to Class III. The vote for director was as follows:
NOMINEE SHARES FOR SHARES WITHHELD - ------- ----------- --------------- Edward W. Gibbons........................................ 158,075,079 1,350,741 Harold M. Messmer, Jr.................................... 157,639,727 1,786,093
The continuing directors, whose terms of office did not expire at the meeting, are Andrew S. Berwick, Jr., Frederick P. Furth, Thomas J. Ryan, J. Stephen Schaub and M. Keith Waddell. No other matters were voted upon at the annual meeting. ITEM 5. OTHER INFORMATION None ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits.
EXHIBIT NO. EXHIBIT ----------- ------- 3.1 Restated Certificate of Incorporation
(b) The registrant filed no current report on Form 8-K during the quarter covered by this report. 10 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/ M. KEITH WADDELL -------------------------------------- M. Keith Waddell VICE CHAIRMAN, CHIEF FINANCIAL OFFICER AND TREASURER (PRINCIPAL FINANCIAL OFFICER AND DULY AUTHORIZED SIGNATORY) Date: July 31, 2001 11 EX-3.1 3 a2053706zex-3_1.txt EXHIBIT 3.1 EXHIBIT 3.1 RESTATED CERTIFICATE OF INCORPORATION OF ROBERT HALF INTERNATIONAL INC., A DELAWARE CORPORATION Robert Half International Inc., a corporation organized and existing under the laws of the State of Delaware, DOES HEREBY CERTIFY: FIRST: The present name of the Corporation is Robert Half International Inc. SECOND: The Corporation was originally incorporated under the name Boothe Interim Corporation and subsequently changed its name to Boothe Financial Corporation before taking its present name. THIRD: The date of filing of the Corporation's original Certificate of Incorporation with the Secretary of State of the State of Delaware was October 18, 1979. FOURTH: This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Corporation's Certificate of Incorporation as previously restated, amended or supplemented, and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation. FIFTH: This Restated Certificate of Incorporation has been duly adopted by the Corporation's Board of Directors in accordance with the applicable provisions of Section 245 of the General Corporation Law of the State of Delaware. SIXTH: The Certificate of Incorporation is hereby restated to read in full as follows: 1. NAME. The name of the Corporation is Robert Half International Inc. 2. REGISTERED OFFICE. The address of the registered office of the Corporation in the State of Delaware is 1209 Orange Street, in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. 3. PURPOSES. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. 4. CAPITAL STOCK. A. AUTHORIZED CAPITAL. The Corporation is authorized to issue two classes of shares of stock to be designated respectively "preferred" and "common." The total number of shares which the Corporation is authorized to issue is two hundred sixty-five million (265,000,000), and the aggregate par value of all shares that are to have a par value shall be $265,000. The number of common shares authorized is two hundred sixty million (260,000,000), each such share to have a par value of $.001, and the number of preferred shares authorized is five million (5,000,000), each such share to have a par value of $.001. B. COMMON STOCK. The holders of shares of common stock shall be entitled to receive such dividends as may be declared by the Board of Directors. In the event of voluntary or involuntary liquidation of the Corporation, the holders of shares of common stock shall be entitled to receive pro rata all of the remaining assets of the Corporation available for distribution to its stockholders after all amounts to which the holders of shares of preferred stock are entitled have been paid or set aside in cash for payment. Except as may be otherwise required by law or this Certificate of Incorporation, each holder of record of each share of common stock shall be entitled to one vote for each such share standing in his name on the books of the Corporation. C. PREFERRED STOCK. The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof, of the preferred stock shall be as follows: The preferred stock may be issued from time to time in one or more series. The Board of Directors is expressly authorized at any time, and from time to time, to provide for the issuance of shares of preferred stock in one or more series, with such voting powers, full or limited, or without voting powers and with such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereon, as shall be stated and expressed in the resolution or resolutions providing for the issue thereof adopted by the Board of Directors, and as are not stated and expressed in this Certificate of Incorporation, or any amendment thereto, including (but without limiting the generality of the foregoing) the following: (a) the distinctive serial designation of such series and the number of shares constituting a series; (b) the dividend rate of such series, the conditions and dates upon which such dividends shall be payable, the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or of any other series of capital stock, and whether such dividends shall be cumulative or noncumulative; (c) whether the shares of such series shall be subject to redemption by the Corporation, and, if made subject to such redemption, the times, prices and other terms and conditions of such redemption; (d) whether the shares are entitled to the benefit of a sinking or retirement fund to be applied to the purchase or redemption of shares of a series and, if so entitled, the amount of the fund and the manner of its application, including the price or prices at which the shares may be redeemed or purchased through the application of the fund; (e) whether or not the shares of such series shall be convertible into or exchangeable for, shares of any other class or classes or of any other series of any class or classes of capital stock of the Corporation, and, if provision be made for conversion or exchange, the times, prices, rates, adjustments, and other terms and conditions of such conversion or exchange; (f) the voting powers, full or limited, if any, of the shares of the series; (g) the restrictions, if any, on the issue or reissue of any additional preferred stock; (h) the rights of the holders of the shares of such series upon the dissolution of, or upon the distribution of assets of, the Corporation. There is hereby expressly granted to the Board of Directors of the Corporation authority to increase or decrease the number of shares of any series subsequent to the issue of shares of that series, but not below the number of shares of that series then outstanding. In case the number of shares of any series shall be so decreased, the shares constituting such decrease shall resume the status which they had prior to the adoption of the resolution originally fixing the number of shares of such series. 5. MANAGEMENT OF BUSINESS. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors and the directors need not be elected by ballot unless required by the By-laws of the Corporation. 6. BY-LAWS. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, alter or repeal the By-laws of the Corporation. 7. CERTAIN TRANSACTIONS WITH RELATED CORPORATIONS. Except as expressly provided in this Article 7, the affirmative vote or consent of the holders of at least 66-2/3% of the outstanding shares of capital stock of the Corporation entitled to vote in the election of directors shall be required to authorize, adopt or approve any of the following: (i) Any plan of merger or consolidation of the Corporation with or into any Related Corporation or any affiliate of a Related Corporation or of any Related Corporation or any affiliate of a Related Corporation into the Corporation; (ii) Any sale, lease, exchange or other disposition of all or substantially all the property and assets of the Corporation to or with any Related Corporation or any affiliate of a Related Corporation, whether or not in connection with the dissolution of the Corporation; or (iii) Any issuance of capital stock or other securities of the Corporation in exchange or payment for any properties or assets of any Related Corporation or any affiliate of a Related Corporation in a transaction for which the approval of stockholders of the Corporation is required by law or by any national securities exchange on which outstanding securities of the Corporation are listed as a prerequisite to the listing thereon of the additional securities being issued. The provisions of this Article 7 shall not be applicable to any merger or consolidation of the Corporation with or into, or any sale, lease, exchange or other disposition of all or substantially all the property of the Corporation to or with a corporation of which the Corporation owns, of record or beneficially, a majority of the outstanding shares of all classes of stock entitled to vote in the election of directors of that corporation. Should a majority of the disinterested members of the Board of Directors so authorize by express resolution, the affirmative vote or consent of the holders of at least a majority of the outstanding shares of capital stock of the Corporation entitled to vote in the election of directors may authorize, adopt, or approve any of the transactions specified in this Article 7. As used in this Article 7, the following terms shall have the following meanings: (i) "Related Corporation" shall mean any corporation which together with its affiliates and associated persons owns or has presently exercisable rights to acquire, as of the record date for the determination of stockholders entitled to vote on the transaction in question, of record or beneficially, directly or indirectly, 10% or more of the outstanding shares of capital stock of the Corporation entitled to vote on such transaction; (ii) An "affiliate" of a Related Corporation shall mean any individual, partnership, joint venture, trust, corporation or other entity which, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such Related Corporation; (iii) An "associated person" of a Related Corporation shall mean any beneficial owner, directly or indirectly, of 10% or more of any class of equity security of such Related Corporation or any of its affiliates; and (iv) A "disinterested member" shall refer to a director who is not a director, officer, associated person, or affiliate of a Related Corporation or of an affiliate (other than the Corporation or any of its subsidiaries) of a Related Corporation, and who is not a nominee of such a director, officer, associated person, or affiliate of a Related Corporation. Any determination made in good faith by the Board of Directors, on the basis of information at the time available to it, as to whether any corporation is a Related Corporation or whether any person is an affiliate or an associated person of a Related Corporation, shall be conclusive and binding for all purposes of this Article 7. This Article 7 shall not be altered, amended or repealed, and no amendment of this Certificate of Incorporation inconsistent with any provision of this Article 7 shall be adopted, unless the holders of at least 66-2/3% of the outstanding shares of capital stock of the Corporation entitled to vote thereon, shall have approved such alteration, amendment, repeal or adoption. 8. AMENDMENTS. Subject to Article 7, the Corporation reserves the right to amend and repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware. All rights herein conferred are granted subject to this reservation. 9. ELIMINATION OF CERTAIN LIABILITY OF DIRECTORS. A director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director's duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived any improper personal benefit. Any repeal or modification of the preceding sentence by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification. 10. INDEMNIFICATION AND INSURANCE. (a) RIGHT TO INDEMNIFICATION. Each person who was or is made a party or is threatened to be made a party to or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (hereinafter a "proceeding"), by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director, officer or employee of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans (hereinafter an "indemnitee"), whether the basis of such proceeding is alleged action in an official capacity as a director, officer, employee or agent or in any other capacity while serving as a director, officer, employee or agent, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the Delaware General Corporation Law, against all expense, liability and loss (including attorneys' fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the indemnitee's heirs, executors and administrators; PROVIDED, HOWEVER, that, except as provided in paragraph (b) hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Article shall be a contract right and shall include the right to be paid by the Corporation the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "advancement of expenses"); PROVIDED, HOWEVER, that, if the Delaware General Corporation Law requires, an advancement of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking, by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that such indemnitee is not entitled to be indemnified for such expenses under this Article or otherwise (hereinafter an "undertaking"). (b) RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under paragraph (a) of this Article is not paid in full by the Corporation within sixty days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be twenty days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such suit. In (i) any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that, and (ii) any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard of conduct set forth in the Delaware General Corporation Law. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Delaware General Corporation Law, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified or to such advancement of expenses under this Article or otherwise shall be on the Corporation. (c) NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification and to the advancement of expenses conferred in this Article shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, this Certificate of Incorporation, by-law, agreement, vote of stockholders or disinterested directors or otherwise. (d) INSURANCE. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the Delaware General Corporation Law. (e) INDEMNIFICATION OF AGENTS OF THE CORPORATION. The Corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any agent of the Corporation to the fullest extent of the provisions of this Article with respect to the indemnification and advancement of expenses of directors, officers and employees of the Corporation. IN WITNESS WHEREOF, Robert Half International Inc. has caused this Restated Certificate of Incorporation to be signed by its Senior Vice President and attested by its Secretary this 15th day of May, 2001. ROBERT HALF INTERNATIONAL INC. By /s/ ROBERT W. GLASS ----------------------- Name: Robert W. Glass Title: Senior Vice President Attest: By /s/STEVEN KAREL ------------------- Name: Steven Karel Title: Secretary -----END PRIVACY-ENHANCED MESSAGE-----