-----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, NfCY0IoOnFQgQFtVRK91gowZ0ARmX5wrPVAgaGb3BKGfdaNPrpNUZ40ZvCYPL/M8 c17HJAxvH+FqNEzCwPr1tQ== 0000912057-96-009085.txt : 19960514 0000912057-96-009085.hdr.sgml : 19960514 ACCESSION NUMBER: 0000912057-96-009085 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 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: 96560943 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 MARCH 31, 1996 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 March 31, 1996: 29,024,851 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)
MARCH 31, 1996 DECEMBER 31, 1995 ------------------ ----------------- (UNAUDITED) ASSETS: Cash and cash equivalents....................................................... $ 50,165 $ 41,346 Accounts receivable, less allowances of $3,392 and $3,067....................... 96,038 84,955 Other current assets............................................................ 8,034 7,349 ---------- ----------------- Total current assets.......................................................... 154,237 133,650 Intangible assets, less accumulated amortization of $34,369 and $33,071......... 158,103 155,441 Other assets.................................................................... 13,087 12,049 ---------- ----------------- Total assets.................................................................. $ 325,427 $ 301,140 ---------- ----------------- ---------- ----------------- LIABILITIES AND STOCKHOLDERS' EQUITY: Accounts payable and accrued expenses........................................... $ 12,191 $ 12,631 Accrued payroll costs........................................................... 43,240 33,853 Income taxes payable............................................................ 7,521 5,157 Current portion of notes payable and other indebtedness......................... 1,003 4,239 ---------- ----------------- Total current liabilities..................................................... 63,955 55,880 Notes payable and other indebtedness, less current portion...................... 1,093 1,486 Deferred income taxes........................................................... 15,877 15,844 ---------- ----------------- Total liabilities............................................................. 80,925 73,210 STOCKHOLDERS' EQUITY: Common stock, $.001 par value, authorized -- 100,000,000 shares; issued and outstanding -- 58,102,248 and 57,784,622 shares.............................. 58 58 Capital surplus............................................................... 107,041 99,768 Deferred compensation......................................................... (12,166) (9,642) Accumulated translation adjustments........................................... (122) 51 Retained earnings............................................................. 149,691 137,695 ---------- ----------------- Total stockholders' equity.................................................. 244,502 227,930 ---------- ----------------- Total liabilities and stockholders' equity.................................... $ 325,427 $ 301,140 ---------- ----------------- ---------- -----------------
All share amounts have been restated to retroactively reflect the two-for-one stock split declared on May 1, 1996. 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 MARCH 31, -------------------- 1996 1995 -------- -------- (UNAUDITED) Net service revenues.................................................. $196,239 $144,739 Direct costs of services, consisting of payroll, payroll taxes and insurance costs for temporary employees.............................. 119,597 88,700 -------- -------- Gross margin.......................................................... 76,642 56,039 Selling, general and administrative expenses.......................... 53,244 39,285 Amortization of intangible assets..................................... 1,308 1,152 Interest expense (income)............................................. (388) 100 -------- -------- Income before income taxes............................................ 22,478 15,502 Provision for income taxes............................................ 9,239 6,497 -------- -------- Net income............................................................ $ 13,239 $ 9,005 -------- -------- -------- -------- Net income per share.................................................. $ .22 $ .15 -------- -------- -------- --------
All per share amounts have been restated to retroactively reflect the two-for-one stock split declared on May 1, 1996. 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)
THREE MONTHS ENDED MARCH 31, ------------------- 1996 1995 -------- -------- (UNAUDITED) COMMON STOCK: Balance at beginning of period.................................................. $ 58 $ 56 Issuance of restricted stock, net -- par value.................................. -- 1 Exercise of stock options -- par value.......................................... -- -- Repurchases of common stock -- par value........................................ -- -- -------- -------- Balance at end of period........................................................ $ 58 $ 57 -------- -------- -------- -------- CAPITAL SURPLUS: Balance at beginning of period.................................................. $ 99,768 $ 82,627 Issuance of restricted stock, net -- excess over par value...................... 3,622 3,289 Exercises of stock options -- excess over par value............................. 1,140 729 Tax benefits from exercises of stock options.................................... 2,511 700 -------- -------- Balance at end of period........................................................ $107,041 $ 87,345 -------- -------- -------- -------- DEFERRED COMPENSATION: Balance at beginning of period.................................................. $ (9,642) $ (5,533) Issuance of restricted stock, net............................................... (3,622) (3,290) Amortization of deferred compensation........................................... 1,098 639 -------- -------- Balance at end of period........................................................ $(12,166) $ (8,184) -------- -------- -------- -------- ACCUMULATED TRANSLATION ADJUSTMENTS: Balance at beginning of period.................................................. $ 51 $ (541) Translation adjustments......................................................... (173) 345 -------- -------- Balance at end of period........................................................ $ (122) $ (196) -------- -------- -------- -------- RETAINED EARNINGS: Balance at beginning of period.................................................. $137,695 $100,386 Repurchases of common stock -- excess over par value............................ (1,243) (612) Net income...................................................................... 13,239 9,005 -------- -------- Balance at end of period........................................................ $149,691 $108,779 -------- -------- -------- --------
All share amounts have been restated to retroactively reflect the two-for-one stock split declared on May 1, 1996. 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)
THREE MONTHS ENDED MARCH 31, -------------------- 1996 1995 -------- -------- (UNAUDITED) CASH FLOWS FROM OPERATING ACTIVITIES: Net income...................................................................... $ 13,239 $ 9,005 Adjustments to reconcile net income to net cash provided by operating activities: Amortization of intangible assets............................................. 1,308 1,152 Depreciation expense.......................................................... 1,158 725 Deferred income taxes......................................................... 827 656 Changes in assets and liabilities, net of effects of acquisitions: Increase in accounts receivable............................................. (11,083) (8,328) Increase in accounts payable, accrued expenses and accrued payroll costs.... 4,898 7,373 Increase in income tax payable.............................................. 2,364 2,654 Change in other assets, net of change in other liabilities.................. (380) 394 -------- -------- Total adjustments............................................................... (908) 4,626 -------- -------- Net cash and cash equivalents provided by operating activities.................. 12,331 13,631 CASH FLOWS USED IN INVESTING ACTIVITIES: Capital expenditures.......................................................... (2,290) (1,123) -------- -------- Cash and cash equivalents used in investing activities.......................... (2,290) (1,123) CASH FLOWS USED IN FINANCING ACTIVITIES: Repurchases of common stock or common stock equivalents....................... (1,243) (612) Principal payments on notes payable and other indebtedness.................... (3,630) (1,019) Proceeds and tax benefits from exercise of stock options...................... 3,651 1,429 -------- -------- Net cash and cash equivalents used in financing activities...................... (1,222) (202) -------- -------- Net increase in cash and cash equivalents....................................... 8,819 12,306 Cash and cash equivalents at beginning of period................................ 41,346 2,638 -------- -------- Cash and cash equivalents at end of period...................................... $ 50,165 $ 14,944 -------- -------- -------- -------- SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest...................................................................... $ 273 $ 234 Income taxes.................................................................. $ 4,255 $ 2,401
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 MARCH 31, 1996 (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 1995 financial statements to conform to the 1996 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 months ended March 31, 1996, and 1995 are not necessarily indicative of the 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, 1995. 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. Allowances 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 intangible assets exist at March 31, 1996. 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. NOTE B -- SUBSEQUENT EVENT On May 1, 1996, the Company announced the declaration of a two-for-one stock split in the form of a stock dividend on its common stock. The record date for determining those stockholders entitled to receive the stock dividend will be May 17, 1996. The payment date for the stock dividend will be June 7, 1996. All share and per share amounts have been restated to retroactively reflect the two-for-one stock split. 5 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995. Net service revenues increased approximately 35.6% during the first quarter of 1996 compared to the same period in 1995. Temporary service revenues increased approximately 36.8% during the three months ended March 31, 1996, relative to the three months ended March 31, 1995. Permanent placement revenues increased 23.5% during the comparable three months ending March 31, 1996 and 1995. The revenue comparisons reflect continued improvement in the demand for the Company's specialized staffing services. Gross margin dollars increased 40.8% during the three month period ending March 31, 1996, compared with the corresponding three month period ending March 31, 1995. Gross margin amounts equaled 39.1% and 38.7% of revenue for the three months ended March 31, 1996 and March 31, 1995, respectively. Selling, general and administrative expenses were approximately $53 million during the three months ended March 31, 1996 compared to approximately $39 million during the three months ended March 31, 1995. Selling, general and administrative expenses as a percentage of revenues was 27.1% for both the three months ended March 31, 1996 and 1995. Interest income/expense for the three months ended March 31, 1996 decreased 488% over the comparable 1995 period 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 months ended March 31, 1996, was 41.1% compared to 41.9% of income before taxes for the same period in 1995. The decrease in 1996 is the result of a smaller percentage of non-deductible intangible expenses relative to income. LIQUIDITY AND CAPITAL RESOURCES As of March 31, 1996 the Company's sources of liquidity included approximately $50 million in cash and cash equivalents and $84 million in net working capital. In addition, as of March 31, 1996 $77.5 million is available for borrowing under the Company's $77.5 million bank revolving credit facility at interest rates of either the Eurodollar rate plus .6% or at prime. The Company's liquidity during the first quarter of 1996 was increased by $12.3 million from funds generated by operating activities. 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's offices, fixed payments and other long-term obligations. On May 1, 1996, the Company announced the declaration of a two-for-one stock split in the form of a stock dividend on its common stock. The record date for determining those stockholders entitled to receive the stock dividend will be May 17, 1996. The payment date for the stock dividend will be June 7, 1996. All share and per share amounts have been restated to retroactively reflect the two-for-one stock split. 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. EXHIBIT - ----------- ---------------------------------------------------------------------------------------------------- 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) Date: May 10, 1996 /s/ M. KEITH WADDELL -------------------------------------- M. Keith Waddell Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer and duly authorized signatory) 8 EXHIBIT INDEX
SEQUENTIALLY NUMBERED EXHIBIT NO. DESCRIPTION PAGE - ----------- --------------------------------------------------------------------------------------------------- 11 Computation of Per Share Earnings.............................................................. 27 Financial Data Schedules.......................................................................
EX-11 2 EXHIBIT 11 EXHIBIT 11 EXHIBIT 11 TO FORM 10-Q ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE MONTHS ENDED MARCH 31, -------------------- 1996 1995 --------- --------- Net income................................................................................. $ 13,239 $ 9,005 --------- --------- --------- --------- Weighted average number of shares outstanding (A) Primary: Common stock........................................................................... 57,988 56,607 Common stock equivalents -- stock options (B).......................................... 2,018 1,956 --------- --------- Primary shares outstanding............................................................. 60,006 58,563 --------- --------- --------- --------- Fully Diluted: Common stock........................................................................... 57,988 56,607 Common stock equivalents -- stock options (B).......................................... 2,195 2,068 --------- --------- Fully diluted shares outstanding....................................................... 60,183 58,675 --------- --------- --------- --------- Net income per share: Primary.................................................................................. $ .22 $ .15 Fully diluted............................................................................ $ .22 $ .15
(A) All share and per share amounts have been restated to retroactively reflect the two-for-one stock split declared on May 1, 1996. (B) 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 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S ANNUAL REPORT FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 YEAR YEAR DEC-31-1996 DEC-31-1995 JAN-01-1996 JAN-01-1995 MAR-31-1996 DEC-31-1995 50,165 41,346 0 0 99,430 88,022 3,392 3,067 0 0 154,237 133,650 0 0 0 0 325,427 301,140 63,955 55,880 1,093 1,486 58 58 0 0 0 0 244,444 227,872 325,427 301,140 0 0 196,239 628,526 0 0 119,597 384,449 1,308 4,767 0 0 (388) (463) 22,478 69,089 9,239 28,791 13,239 40,298 0 0 0 0 0 0 13,239 40,298 .22 .68 .22 .68
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