Robert Half Reports Fourth-Quarter Financial Results

PR Newswire

MENLO PARK, Calif., Jan. 28, 2021 /PRNewswire/ — Robert Half International Inc. (NYSE: RHI) today reported revenues and earnings for the fourth quarter ended December 31, 2020.

For the quarter ended December 31, 2020, net income was $94 million, or $.84 per share, on revenues of $1.304 billion. Net income for the prior year’s fourth quarter was $113 million, or $.98 per share, on revenues of $1.537 billion.

For the year ended December 31, 2020, net income was $306 million, or $2.70 per share, on revenues of $5.109 billion. For the year ended December 31, 2019, net income was $454 million, or $3.90 per share, on revenues of $6.074 billion.

“Fourth-quarter results for both our Protiviti and staffing operations were very strong and exceeded the top end of our guidance range,” said M. Keith Waddell, president and CEO of Robert Half. “Protiviti reported its 13th consecutive quarter of year-on-year revenue gains, with particular strength in its technology consulting practice and managed solutions with staffing. Our staffing operations reported broad-based, double-digit, quarter-on-quarter sequential revenue growth on an as-adjusted basis.”

Waddell added, “Return on invested capital for the company was 31 percent in the fourth quarter.”

Robert Half management will conduct a conference call today at 5 p.m. EST. The prepared remarks for this call are available now in the Investor Center of the Robert Half website (www.roberthalf.com/investor-center). Simply click on the Quarterly Conference Calls link. The dial-in number to listen to today’s conference call is 877-814-0475 (+1-706-643-9224 outside the United States). The password is “Robert Half.”

A taped recording of this call will be available for replay beginning at approximately 8 p.m. EST today and ending at 11:59 p.m. EST on February 27. The dial-in number for the replay is 855-859-2056 (+1-404-537-3406 outside the United States). To access the replay, enter conference ID# 1755918. The conference call also will be archived in audio format on the company’s website at www.roberthalf.com/investor-center.

Founded in 1948, Robert Half is the world’s first and largest specialized staffing firm and a recognized leader in professional consulting and staffing services. The company’s specialized staffing divisions include Accountemps^®, Robert Half^® Finance & Accounting and Robert Half^® Management Resources, for contract, full-time and senior-level project professionals, respectively, in the fields of accounting and finance; OfficeTeam^®, for highly skilled administrative support professionals; Robert Half^® Technology, for project and full-time technology professionals; Robert Half^® Legal, for project and full-time staffing of lawyers, paralegals and legal support personnel; and The Creative Group^®, for creative, digital, marketing, advertising and public relations professionals. Robert Half also is the parent company of Protiviti^®, a global consulting firm that provides clients with consulting solutions in finance, technology, operations, data, analytics, governance, risk and internal audit.

Robert Half has staffing and consulting operations in more than 400 locations worldwide.

Certain information contained in this press release and its attachments 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”, “forecast”, “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 to or new interpretations of U.S. or international tax regulations; the global financial and economic situation; the duration and impact of the COVID-19 pandemic and efforts to mitigate its spread; changes in levels of unemployment and other economic conditions in the United States or foreign countries where the company does business, or in particular regions or industries; reduction in the supply of candidates for contract employment or the company’s ability to attract 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 margins; the possibility of the company incurring liability for its activities, including the activities of its contract employees, or for events impacting its contract employees on clients’ premises; the possibility that adverse publicity could impact the company’s ability to attract and retain clients and candidates; the success of the company in attracting, training, and retaining qualified management personnel and other staff employees; the company’s ability to comply with governmental regulations affecting personnel services businesses in particular or employer/employee relationships in general; whether there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; the company’s reliance on short-term contracts for a significant percentage of its business; litigation relating to prior or current transactions or activities, including litigation that may be disclosed from time to time in the company’s SEC filings; the ability of the company to manage its international operations and comply with foreign laws and regulations; the impact of fluctuations in foreign currency exchange rates; the possibility that the additional costs the company will incur as a result of healthcare reform legislation may adversely affect the company’s profit margins or the demand for the company’s services; the possibility that the company’s computer and communications hardware and software systems could be damaged or their service interrupted; and the possibility that the company may fail to maintain adequate financial and management controls and as a result suffer errors in its financial reporting.

Additionally, with respect to Protiviti, other risks and uncertainties include the fact that future success will depend on its ability to retain employees and attract clients; there can be no assurance that there will be ongoing demand for Sarbanes-Oxley or other regulatory compliance services; failure to produce projected revenues could adversely affect financial results; and there is the possibility of involvement in litigation relating to prior or current transactions or activities.

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. The company undertakes no obligation to update information contained in this release.

A copy of this release is available at www.roberthalf.com/investor-center.

ATTACHED:

Summary of Operations

Supplemental Financial Information

Non-GAAP Financial Measures

ROBERT HALF INTERNATIONAL INC.
SUMMARY OF OPERATIONS
(in thousands, except per share amounts)

	Quarter Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019
	(Unaudited)				(Unaudited)

Service revenues	$	1,304,086	$	1,537,385	$	5,109,000	$	6,074,432
Costs of services	789,744		900,524		3,096,389		3,549,303

Gross margin	514,342		636,861		2,012,611		2,525,129

Selling, general and administrative expenses	425,161		503,922		1,666,041		1,958,295
Income from investments held in employee deferred compensation (which is completely offset by related costs and expenses) (1)	(40,542)		(20,289)		(75,188)		(54,917)
Amortization of intangible assets	217		339		1,219		1,361
Interest income, net	(79)		(1,357)		(1,343)		(5,125)

Income before income taxes	129,585		154,246		421,882		625,515
Provision for income taxes	35,169		41,404		115,606		171,082

Net income	$	94,416	$	112,842	$	306,276	$	454,433

Diluted net income per share	$	.84	$	.98	$	2.70	$	3.90

Shares:
Basic	112,059		114,034		112,729		115,656
Diluted	112,941		114,862		113,318		116,411

(1) Selling, general and administrative (“SG&A”) expenses exclude gains and losses on investments held to fund the Company’s obligations under employee deferred compensation plans. Under these plans, employees direct the investment of their account balances, and the Company makes cash deposits into an investment trust consistent with these directions. Changes in the Company’s deferred compensation obligations noted above are included in SG&A or, in the case of Protiviti, direct cost, while investment income is presented separately. Reclassifications have been made to prior periods’ consolidated financial statements to conform to the current presentation. These reclassifications had no impact to previously reported income before income taxes.

ROBERT HALF INTERNATIONAL INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)

	Quarter Ended December 31,								Year Ended December 31,
	2020				2019				2020				2019
	(Unaudited)								(Unaudited)
SERVICE REVENUES:
Accountemps	$	385,000	29.5	%	$	498,650	32.4	%	$	1,558,024	30.5	%	$	1,985,221	32.6	%
OfficeTeam	214,985		16.5	%	259,147		16.9	%	764,947		15.0	%	1,040,755		17.1	%
Robert Half Technology	175,730		13.5	%	198,314		12.9	%	695,418		13.6	%	765,831		12.6	%
Robert Half Management Resources	167,116		12.8	%	201,097		13.1	%	698,942		13.7	%	792,757		13.1	%
Elimination of intersegment revenues (1)	(92,393)		(7.1)	%	(50,883)		(3.3)	%	(239,996)		(4.7)	%	(172,439)		(2.8)	%
Temporary and consultant staffing	850,438		65.2	%	1,106,325		72.0	%	3,477,335		68.1	%	4,412,125		72.6	%
Permanent placement staffing	91,387		7.0	%	126,394		8.2	%	370,109		7.2	%	533,432		8.8	%
Protiviti	362,261		27.8	%	304,666		19.8	%	1,261,556		24.7	%	1,128,875		18.6	%
Total	$	1,304,086	100.0	%	$	1,537,385	100.0	%	$	5,109,000	100.0	%	$	6,074,432	100.0	%

GROSS MARGIN:
Temporary and consultant staffing	$	327,181	38.5	%	$	420,248	38.0	%	$	1,312,797	37.8	%	$	1,677,489	38.0	%
Permanent placement staffing	91,172		99.8	%	126,135		99.8	%	369,401		99.8	%	532,435		99.8	%
Protiviti	95,989		26.5	%	90,478		29.7	%	330,413		26.2	%	315,205		27.9	%
Total	$	514,342	39.4	%	$	636,861	41.4	%	$	2,012,611	39.4	%	$	2,525,129	41.6	%

SEGMENT INCOME:
Temporary and consultant staffing	$	71,346	8.4	%	$	97,469	8.8	%	$	237,279	6.8	%	$	410,153	9.3	%
Permanent placement staffing	8,008		8.8	%	15,167		12.0	%	28,799		7.8	%	83,885		15.7	%
Protiviti	50,369		13.9	%	40,592		13.3	%	155,680		12.3	%	127,713		11.3	%
Combined segment income (2)	$	129,723	9.9	%	$	153,228	10.0	%	$	421,758	8.3	%	$	621,751	10.2	%

SELECTED CASH FLOW INFORMATION:
Depreciation	$	15,184			$	15,779			$	62,281			$	64,264
Capital expenditures	$	4,499			$	14,326			$	33,377			$	59,464
Open market repurchases of common stock (shares)	1,074				988				2,506				4,253

(1) Service revenues for Accountemps, OfficeTeam, Robert Half Technology and Robert Half Management Resources include intersegment revenues, which represent revenues from services provided to Protiviti in connection with the Company’s blended business solutions. Intersegment revenues for each line of business are aggregated and then eliminated as a single line item.

(2) Combined segment income is a non-GAAP measure described further on Page 7.

ROBERT HALF INTERNATIONAL INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)

Beginning in Q3 2020 the Company modified its presentation of service revenues for Accountemps, OfficeTeam, Robert Half Technology and Robert Half Management Resources to include intersegment revenues from services provided to Protiviti in connection with the Company’s blended business solutions. This is how the Company now measures and manages these divisions internally and, prospectively it is how the Company will report them externally. The combined amount of divisional intersegment revenues with Protiviti are aggregated and then eliminated as a single line item. The Company has prepared the below schedule to provide readers with historical comparative information to better evaluate the related trends.

	2018								2019								2020
	Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4		Q1		Q2		Q3		Q4
SERVICE REVENUES:
Accountemps	$	476,055	$	488,400	$	486,240	$	490,849	$	490,084	$	494,582	$	501,905	$	498,650	$	489,884	$	331,542	$	351,598	$	385,000
OfficeTeam	261,642		268,902		265,758		269,125		252,633		261,952		267,023		259,147		239,979		136,299		173,685		214,985
Robert Half Technology	166,102		178,711		185,687		186,666		182,426		189,461		195,630		198,314		196,652		162,028		161,007		175,730
Robert Half Management Resources	186,690		182,737		181,638		187,745		196,003		195,236		200,421		201,097		211,878		165,031		154,917		167,116
Elimination of intersegment revenues	(24,201)		(30,776)		(35,557)		(41,847)		(36,519)		(38,519)		(46,518)		(50,883)		(46,273)		(41,514)		(59,816)		(92,393)
Temporary and consultant staffing	1,066,288		1,087,974		1,083,766		1,092,538		1,084,627		1,102,712		1,118,461		1,106,325		1,092,120		753,386		781,391		850,438
Permanent placement staffing	121,400		135,038		129,667		125,884		131,562		140,894		134,582		126,394		120,489		71,030		87,203		91,387
Protiviti	207,645		234,042		252,793		263,236		252,341		272,779		299,089		304,666		294,082		283,910		321,303		362,261
Total	$	1,395,333	$	1,457,054	$	1,466,226	$	1,481,658	$	1,468,530	$	1,516,385	$	1,552,132	$	1,537,385	$	1,506,691	$	1,108,326	$	1,189,897	$	1,304,086

ROBERT HALF INTERNATIONAL INC.
SUPPLEMENTAL FINANCIAL INFORMATION
(in thousands)

	December 31,
	2020		2019
	(Unaudited)
SELECTED BALANCE SHEET INFORMATION:
Cash and cash equivalents	$	574,426	$	270,478
Accounts receivable, less allowances	$	714,163	$	832,797
Total assets	$	2,557,424	$	2,311,408
Total current liabilities	$	1,046,626	$	940,692
Notes payable, less current portion	$	—	$	239
Total stockholders’ equity	$	1,205,289	$	1,143,683

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES

The financial results of Robert Half International Inc. (the “Company”) are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and the rules of the U.S. Securities and Exchange Commission (“SEC”). To help readers understand the Company’s financial performance, the Company supplements its GAAP financial results with the following non-GAAP measures: as adjusted revenue growth rates; adjusted gross margin; adjusted selling, general and administrative expense; segment income; and combined segment income.

Variations in the Company’s financial results include the impact of changes in foreign currency exchange rates, billing days, and certain intercompany adjustments. The Company provides “as adjusted” revenue growth calculations to remove the impact of these items. These calculations show the year-over-year revenue growth rates for the Company’s lines of business on both a reported basis and also on an as-adjusted basis for global, U.S., and international operations. This information is presented for each of the six most recent quarters. The Company has provided this data because it focuses on the Company’s revenue growth rates attributable to operating activities and aids in evaluating revenue trends over time. The Company expresses year-over-year revenue changes as calculated percentages using the same number of billing days, constant currency exchange rates, and certain intercompany adjustments.

The following measures: adjusted gross margin; adjusted selling, general and administrative expense; and segment income include gains and losses on investments held to fund the Company’s obligations under employee deferred compensation plans. The Company provides these measures because they are used by management to review its operational results.

Combined segment income is income before income taxes adjusted for interest income and amortization of intangible assets. The Company provides combined segment income because it is how the Company evaluates segment performance.

The non-GAAP financial measures provided herein may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies may calculate such financial results differently. The Company’s non-GAAP financial measures are not measurements of financial performance under GAAP and should not be considered as alternatives to amounts presented in accordance with GAAP. The Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided on the following pages.

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATES (%) (UNAUDITED)

	Year-Over-Year Growth Rates (As Reported)						Non-GAAP Year-Over-Year Growth Rates (As Adjusted)
	2019		2020				2019		2020
	Q3	Q4	Q1	Q2	Q3	Q4	Q3	Q4	Q1	Q2	Q3	Q4
Global
Accountemps	3.2	1.6	0.0	-33.0	-29.9	-22.8	2.7	2.1	-0.7	-32.3	-30.2	-23.1
OfficeTeam	0.5	-3.7	-5.0	-48.0	-35.0	-17.0	0.1	-3.1	-5.7	-47.8	-35.8	-18.2
RH Technology	5.4	6.2	7.8	-14.5	-17.7	-11.4	5.2	7.0	6.8	-14.2	-18.2	-11.9
RH Management Resources	10.3	7.1	8.1	-15.5	-22.7	-16.9	13.9	10.3	7.5	-14.8	-23.5	-18.1
Elimination of intersegment revenues (1)	30.8	21.6	26.7	7.8	28.6	81.6	29.3	21.6	24.9	7.7	28.2	81.5
Temporary and consultant staffing	3.2	1.3	0.7	-31.7	-30.1	-23.1	3.4	2.2	0.0	-31.2	-30.7	-23.8
Permanent placement staffing	3.8	0.4	-8.4	-49.6	-35.2	-27.7	3.4	0.9	-9.0	-49.1	-35.7	-28.5
Total staffing	3.3	1.2	-0.3	-33.7	-30.7	-23.6	3.4	2.1	-1.0	-33.2	-31.2	-24.3
Protiviti	18.3	15.7	16.5	4.1	7.4	18.9	14.6	14.1	15.5	4.5	6.4	17.9
Total	5.9	3.8	2.6	-26.9	-23.3	-15.2	5.4	4.3	1.9	-26.4	-23.9	-15.9

United States
Temporary and consultant staffing	5.7	3.0	2.0	-31.7	-31.0	-24.1	4.5	3.2	0.5	-31.7	-31.3	-23.9
Permanent placement staffing	6.5	3.0	-4.9	-51.6	-37.1	-31.3	5.3	3.2	-6.3	-51.6	-37.3	-31.0
Total staffing	5.8	3.0	1.3	-33.7	-31.6	-24.8	4.5	3.2	-0.2	-33.7	-31.9	-24.6
Protiviti	17.5	17.3	21.3	6.4	10.8	22.9	16.2	17.5	19.5	6.3	10.3	23.3
Total	7.9	5.6	4.7	-26.5	-23.3	-15.3	6.6	5.7	3.2	-26.5	-23.7	-15.0

International
Temporary and consultant staffing	-5.0	-4.8	-3.8	-31.8	-27.0	-19.3	-0.2	-1.0	-1.9	-28.9	-28.4	-23.5
Permanent placement staffing	-2.1	-5.3	-15.9	-45.0	-30.9	-19.3	-0.6	-4.1	-14.6	-43.2	-31.7	-23.0
Total staffing	-4.6	-4.8	-5.6	-33.8	-27.6	-19.3	-0.3	-1.5	-3.7	-31.1	-28.9	-23.4
Protiviti	21.2	10.4	1.3	-3.9	-5.0	4.3	9.3	3.3	2.4	-1.5	-8.0	-1.7
Total	-0.7	-2.2	-4.4	-28.4	-23.4	-14.7	1.4	-0.6	-2.7	-25.7	-25.0	-19.2

The non-GAAP financial measures included in the table above adjust for the following items:

Foreign Currency Translation. The “As Reported” revenue growth rates are based upon reported revenues, which include the impact of changes in foreign currency exchange rates. In order to calculate “Constant Currency” revenue growth rates, as reported amounts are retranslated using foreign exchange rates from the prior year’s comparable period.

Billing Days. The “As Reported” revenue growth rates are based upon reported revenues. Management calculates a global, weighted-average number of billing days for each reporting period based upon inputs from all countries and all lines of business. In order to remove the fluctuations caused by comparable periods having different billing days, the company calculates “same billing day” revenue growth rates by dividing each comparative period’s reported revenues by the calculated number of billing days for that period to arrive at a “per billing day” amount. The “same billing day” growth rates are then calculated based upon the “per billing day” amounts.

Intercompany Adjustments. The “As Reported” revenue growth rates are based upon reported revenues. In order to remove the fluctuations caused by the impact of certain intercompany adjustments, applicable comparative period revenues are reclassified to conform with the current period presentation.

The term “As Adjusted” means that the impact of different billing days, constant currency fluctuations, and certain intercompany adjustments are removed from the revenue growth rate calculation. A reconciliation of the non-GAAP year-over-year revenue growth rates to the “As Reported” year-over-year revenue growth rates is included herein on Pages 9-11.

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED)

Year-Over-Year Revenue Growth – GLOBAL
	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020
Accountemps
As Reported	3.2	1.6	0.0	-33.0	-29.9	-22.8
Billing Days Impact	-1.3	0.0	-1.5	-0.1	-0.3	-0.1
Currency Impact	0.8	0.5	0.8	0.8	0.0	-0.2
As Adjusted	2.7	2.1	-0.7	-32.3	-30.2	-23.1
OfficeTeam
As Reported	0.5	-3.7	-5.0	-48.0	-35.0	-17.0
Billing Days Impact	-1.3	0.0	-1.3	-0.1	-0.2	-0.1
Currency Impact	0.9	0.6	0.6	0.3	-0.6	-1.1
As Adjusted	0.1	-3.1	-5.7	-47.8	-35.8	-18.2
Robert Half Technology
As Reported	5.4	6.2	7.8	-14.5	-17.7	-11.4
Billing Days Impact	-1.4	0.1	-1.5	-0.1	-0.2	0.0
Currency Impact	0.5	0.3	0.5	0.4	-0.3	-0.5
Intercompany Adjustments	0.7	0.4	―	―	―	―
As Adjusted	5.2	7.0	6.8	-14.2	-18.2	-11.9
Robert Half Management Resources
As Reported	10.3	7.1	8.1	-15.5	-22.7	-16.9
Billing Days Impact	-1.4	0.0	-1.5	-0.1	-0.2	0.0
Currency Impact	1.1	0.7	0.9	0.8	-0.6	-1.2
Intercompany Adjustments	3.9	2.5	―	―	―	―
As Adjusted	13.9	10.3	7.5	-14.8	-23.5	-18.1
Elimination of intersegment revenues
As Reported	30.8	21.6	26.7	7.8	28.6	81.6
Billing Days Impact	-1.6	0.0	-1.8	-0.2	-0.4	-0.1
Currency Impact	0.1	0.0	0.0	0.1	0.0	0.0
As Adjusted	29.3	21.6	24.9	7.7	28.2	81.5
Temporary and consultant staffing
As Reported	3.2	1.3	0.7	-31.7	-30.1	-23.1
Billing Days Impact	-1.3	0.0	-1.4	-0.1	-0.3	0.0
Currency Impact	0.9	0.5	0.7	0.6	-0.3	-0.7
Intercompany Adjustments	0.6	0.4	―	―	―	―
As Adjusted	3.4	2.2	0.0	-31.2	-30.7	-23.8
Permanent placement staffing
As Reported	3.8	0.4	-8.4	-49.6	-35.2	-27.7
Billing Days Impact	-1.4	0.0	-1.4	-0.1	-0.2	0.0
Currency Impact	1.0	0.5	0.8	0.6	-0.3	-0.8
As Adjusted	3.4	0.9	-9.0	-49.1	-35.7	-28.5
Total staffing
As Reported	3.3	1.2	-0.3	-33.7	-30.7	-23.6
Billing Days Impact	-1.4	0.0	-1.4	-0.1	-0.2	0.0
Currency Impact	0.9	0.5	0.7	0.6	-0.3	-0.7
Intercompany Adjustments	0.6	0.4	―	―	―	―
As Adjusted	3.4	2.1	-1.0	-33.2	-31.2	-24.3
Protiviti
As Reported	18.3	15.7	16.5	4.1	7.4	18.9
Billing Days Impact	-1.4	0.1	-1.6	-0.1	-0.3	0.0
Currency Impact	0.8	0.3	0.6	0.5	-0.7	-1.0
Intercompany Adjustments	-3.1	-2.0	―	―	―	―
As Adjusted	14.6	14.1	15.5	4.5	6.4	17.9
Total
As Reported	5.9	3.8	2.6	-26.9	-23.3	-15.2
Billing Days Impact	-1.4	0.0	-1.4	-0.1	-0.2	0.0
Currency Impact	0.9	0.5	0.7	0.6	-0.4	-0.7
As Adjusted	5.4	4.3	1.9	-26.4	-23.9	-15.9

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED)

Year-Over-Year Revenue Growth – UNITED STATES
	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020
Temporary and consultant staffing
As Reported	5.7	3.0	2.0	-31.7	-31.0	-24.1
Billing Days Impact	-1.2	0.2	-1.5	0.0	-0.3	0.2
Currency Impact	―	―	―	―	―	―
As Adjusted	4.5	3.2	0.5	-31.7	-31.3	-23.9

Permanent placement staffing
As Reported	6.5	3.0	-4.9	-51.6	-37.1	-31.3
Billing Days Impact	-1.2	0.2	-1.4	0.0	-0.2	0.3
Currency Impact	―	―	―	―	―	―
As Adjusted	5.3	3.2	-6.3	-51.6	-37.3	-31.0

Total staffing
As Reported	5.8	3.0	1.3	-33.7	-31.6	-24.8
Billing Days Impact	-1.3	0.2	-1.5	0.0	-0.3	0.2
Currency Impact	―	―	―	―	―	―
As Adjusted	4.5	3.2	-0.2	-33.7	-31.9	-24.6

Protiviti
As Reported	17.5	17.3	21.3	6.4	10.8	22.9
Billing Days Impact	-1.3	0.2	-1.8	-0.1	-0.5	0.4
Currency Impact	―	―	―	―	―	―
As Adjusted	16.2	17.5	19.5	6.3	10.3	23.3

Total
As Reported	7.9	5.6	4.7	-26.5	-23.3	-15.3
Billing Days Impact	-1.3	0.1	-1.5	0.0	-0.4	0.3
Currency Impact	―	―	―	―	―	―
As Adjusted	6.6	5.7	3.2	-26.5	-23.7	-15.0

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
REVENUE GROWTH RATE (%) RECONCILIATION (UNAUDITED)

Year-Over-Year Revenue Growth – INTERNATIONAL
	Q3 2019	Q4 2019	Q1 2020	Q2 2020	Q3 2020	Q4 2020
Temporary and consultant staffing
As Reported	-5.0	-4.8	-3.8	-31.8	-27.0	-19.3
Billing Days Impact	-1.6	-0.4	-1.4	0.0	0.0	-1.0
Currency Impact	3.8	2.4	3.3	2.9	-1.4	-3.2
Intercompany Adjustments	2.6	1.8	―	―	―	―
As Adjusted	-0.2	-1.0	-1.9	-28.9	-28.4	-23.5

Permanent placement staffing
As Reported	-2.1	-5.3	-15.9	-45.0	-30.9	-19.3
Billing Days Impact	-1.5	-0.4	-1.1	-0.1	0.0	-1.0
Currency Impact	3.0	1.6	2.4	1.9	-0.8	-2.7
As Adjusted	-0.6	-4.1	-14.6	-43.2	-31.7	-23.0

Total staffing
As Reported	-4.6	-4.8	-5.6	-33.8	-27.6	-19.3
Billing Days Impact	-1.6	-0.6	-1.3	-0.1	0.0	-1.0
Currency Impact	3.7	2.3	3.2	2.8	-1.3	-3.1
Intercompany Adjustments	2.2	1.6	―	―	―	―
As Adjusted	-0.3	-1.5	-3.7	-31.1	-28.9	-23.4

Protiviti
As Reported	21.2	10.4	1.3	-3.9	-5.0	4.3
Billing Days Impact	-1.8	-0.6	-1.4	0.0	0.1	-1.4
Currency Impact	3.5	1.4	2.5	2.4	-3.1	-4.6
Intercompany Adjustments	-13.6	-7.9	―	―	―	―
As Adjusted	9.3	3.3	2.4	-1.5	-8.0	-1.7

Total
As Reported	-0.7	-2.2	-4.4	-28.4	-23.4	-14.7
Billing Days Impact	-1.6	-0.5	-1.3	0.0	0.1	-1.1
Currency Impact	3.7	2.1	3.0	2.7	-1.7	-3.4
As Adjusted	1.4	-0.6	-2.7	-25.7	-25.0	-19.2

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED SUMMARY OF OPERATIONS RECONCILIATION (UNAUDITED)
(in thousands)

	Quarter Ended December 31,												Relationships
	2020						2019						2020		2019		2020		2019
	Reported		Adjustments		Adjusted (1)		Reported		Adjustments		Adjusted (1)		Reported				Adjusted
SERVICE REVENUES:
Temporary and consultant staffing	850,438				850,438		1,106,325				1,106,325		65.2	%	72.0	%	65.2	%	72.0	%
Permanent placement staffing	91,387				91,387		126,394				126,394		7.0	%	8.2	%	7.0	%	8.2	%
Protiviti	362,261				362,261		304,666				304,666		27.8	%	19.8	%	27.8	%	19.8	%
Total	$	1,304,086			$	1,304,086	$	1,537,385			$	1,537,385	100.0	%	100.0	%	100.0	%	100.0	%

GROSS MARGIN:
Temporary and consultant staffing	$	327,181			$	327,181	$	420,248			$	420,248	38.5	%	38.0	%	38.5	%	38.0	%
Permanent placement staffing	91,172				91,172		126,135				126,135		99.8	%	99.8	%	99.8	%	99.8	%
Protiviti	95,989		5,419		101,408		90,478		2,083		92,561		26.5	%	29.7	%	28.0	%	30.4	%
Total	$	514,342	$	5,419	$	519,761	$	636,861	$	2,083	$	638,944	39.4	%	41.4	%	39.9	%	41.6	%

SELLING GENERAL AND ADMINISTRATIVE EXPENSE:
Temporary and consultant staffing	$	287,550	$	(31,715)	$	255,835	$	339,118	$	(16,339)	$	322,779	33.8	%	30.7	%	30.1	%	29.2	%
Permanent placement staffing	86,572		(3,408)		83,164		112,835		(1,867)		110,968		94.7	%	89.3	%	91.0	%	87.8	%
Protiviti	51,039		—		51,039		51,969		—		51,969		14.1	%	17.1	%	14.1	%	17.1	%
Total	$	425,161	$	(35,123)	$	390,038	$	503,922	$	(18,206)	$	485,716	32.6	%	32.8	%	29.9	%	31.6	%

OPERATING/SEGMENT INCOME:
Temporary and consultant staffing	$	39,631	$	31,715	$	71,346	$	81,130	$	16,339	$	97,469	4.7	%	7.3	%	8.4	%	8.8	%
Permanent placement staffing	4,600		3,408		8,008		13,300		1,867		15,167		5.0	%	10.5	%	8.8	%	12.0	%
Protiviti	44,950		5,419		50,369		38,509		2,083		40,592		12.4	%	12.6	%	13.9	%	13.3	%
Total	$	89,181	$	40,542	$	129,723	$	132,939	$	20,289	$	153,228	6.8	%	8.6	%	9.9	%	10.0	%
Amortization of intangible assets	217		—		217		339		—		339		0.0	%	0.0	%	0.0	%	0.0	%
Income from investments held in employee deferred compensation trusts	(40,542)		40,542		—		(20,289)		20,289		—		3.1	%	1.3	%	0.0	%	0.0	%
Interest income, net	(79)		—		(79)		(1,357)		—		(1,357)		0.0	%	0.1	%	0.0	%	0.0	%
Income before income taxes	$	129,585	$	—	$	129,585	$	154,246	$	—	$	154,246	9.9	%	10.0	%	9.9	%	10.0	%

(1) Changes in the Company’s deferred compensation obligations are included in selling, general and administrative expense or, in the case of Protiviti, direct cost, while investment income is presented separately. The non-GAAP financial measures shown in the table above are adjusted to reclassify investment income from investments held in employee deferred compensation trusts to the same line item which includes the corresponding change in obligation. These adjustments have no impact to income before income taxes.

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
ADJUSTED SUMMARY OF OPERATIONS RECONCILIATION (UNAUDITED)
(in thousands)

	Year Ended December 31,												Relationships
	2020						2019						2020		2019		2020		2019
	Reported		Adjustments		Adjusted (1)		Reported		Adjustments		Adjusted (1)		Reported				Adjusted
SERVICE REVENUES:
Temporary and consultant staffing	3,477,335				3,477,335		4,412,125				4,412,125		68.1	%	72.6	%	68.1	%	72.6	%
Permanent placement staffing	370,109				370,109		533,432				533,432		7.2	%	8.8	%	7.2	%	8.8	%
Protiviti	1,261,556				1,261,556		1,128,875				1,128,875		24.7	%	18.6	%	24.7	%	18.6	%
Total	$	5,109,000			$	5,109,000	$	6,074,432			$	6,074,432	100.0	%	100.0	%	100.0	%	100.0	%

GROSS MARGIN:
Temporary and consultant staffing	$	1,312,797			$	1,312,797	$	1,677,489			$	1,677,489	37.8	%	38.0	%	37.8	%	38.0	%
Permanent placement staffing	369,401				369,401		532,435				532,435		99.8	%	99.8	%	99.8	%	99.8	%
Protiviti	330,413		11,682		342,095		315,205		5,390		320,595		26.2	%	27.9	%	27.1	%	28.4	%
Total	$	2,012,611	$	11,682	$	2,024,293	$	2,525,129	$	5,390	$	2,530,519	39.4	%	41.6	%	39.6	%	41.7	%

SELLING GENERAL AND ADMINISTRATIVE EXPENSE:
Temporary and consultant staffing	$	1,132,915	$	(57,397)	$	1,075,518	$	1,311,521	$	(44,185)	$	1,267,336	32.6	%	29.7	%	30.9	%	28.7	%
Permanent placement staffing	346,711		(6,109)		340,602		453,892		(5,342)		448,550		93.7	%	85.1	%	92.0	%	84.1	%
Protiviti	186,415		—		186,415		192,882		—		192,882		14.8	%	17.1	%	14.8	%	17.1	%
Total	$	1,666,041	$	(63,506)	$	1,602,535	$	1,958,295	$	(49,527)	$	1,908,768	32.6	%	32.2	%	31.4	%	31.4	%

OPERATING/SEGMENT INCOME:
Temporary and consultant staffing	$	179,882	$	57,397	$	237,279	$	365,968	$	44,185	$	410,153	5.2	%	8.3	%	6.8	%	9.3	%
Permanent placement staffing	22,690		6,109		28,799		78,543		5,342		83,885		6.1	%	14.7	%	7.8	%	15.7	%
Protiviti	143,998		11,682		155,680		122,323		5,390		127,713		11.4	%	10.8	%	12.3	%	11.3	%
Total	$	346,570	$	75,188	$	421,758	$	566,834	$	54,917	621,751		6.8	%	9.3	%	8.3	%	10.2	%
Amortization of intangible assets	1,219		—		1,219		1,361		—		1,361		0.0	%	0.0	%	0.0	%	0.0	%
Income from investments held in employee deferred compensation trusts	(75,188)		75,188		—		(54,917)		54,917		—		1.5	%	0.9	%	0.0	%	0.0	%
Interest income, net	(1,343)		—		(1,343)		(5,125)		—		(5,125)		0.0	%	0.1	%	0.0	%	0.1	%
Income before income taxes	$	421,882	$	—	$	421,882	$	625,515	$	—	$	625,515	8.3	%	10.3	%	8.3	%	10.3	%

ROBERT HALF INTERNATIONAL INC.
NON-GAAP FINANCIAL MEASURES
COMBINED SEGMENT INCOME RECONCILIATION (UNAUDITED)
(in thousands)

	Quarter Ended December 31,				Year Ended December 31,
	2020		2019		2020		2019

Income before income taxes	$	129,585	$	154,246	$	421,882	$	625,515
Interest income, net	(79)		(1,357)		(1,343)		(5,125)
Amortization of intangible assets	217		339		1,219		1,361
Combined segment income	$	129,723	$	153,228	$	421,758	$	621,751

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SOURCE Robert Half