<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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, 1998
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, 1998:
92,145,575 shares of $.001 par value Common Stock
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS:
Cash and cash equivalents................................................................. $ 191,325 $ 131,349
Accounts receivable, less allowances of $8,426 and $7,164................................. 217,479 186,899
Other current assets...................................................................... 24,542 15,757
----------- ------------
Total current assets.................................................................. 433,346 334,005
Intangible assets, less accumulated amortization of $49,566 and $46,001................... 173,747 177,425
Property and equipment, less accumulated depreciation of $38,353 and $29,962.............. 71,283 49,937
----------- ------------
Total assets.......................................................................... $ 678,376 $ 561,367
----------- ------------
----------- ------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accrued expenses..................................................... $ 22,130 $ 20,285
Accrued payroll costs..................................................................... 122,093 95,925
Income taxes payable...................................................................... 7,171 2,258
Current portion of notes payable and other indebtedness................................... 1,050 3,627
----------- ------------
Total current liabilities............................................................. 152,444 122,095
Notes payable and other indebtedness, less current portion................................ 4,235 4,530
Deferred income taxes..................................................................... 20,123 15,942
----------- ------------
Total liabilities..................................................................... 176,802 142,567
Commitments and Contingencies
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value authorized 160,000,000 shares; issued and outstanding
92,159,116 and 91,208,029 shares......................................................... 92 91
Capital surplus........................................................................... 242,914 196,888
Deferred compensation..................................................................... (52,649) (44,276)
Accumulated other comprehensive income.................................................... (1,551) (1,347)
Retained earnings......................................................................... 312,768 267,444
----------- ------------
Total stockholders' equity............................................................ 501,574 418,800
----------- ------------
Total liabilities and stockholders' equity............................................ $ 678,376 $ 561,367
----------- ------------
----------- ------------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
1
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net service revenues............................................. $ 442,153 $ 311,622 $ 843,449 $ 594,645
Direct costs of services, consisting of payroll, payroll taxes
and insurance costs for temporary employees..................... 264,460 187,482 504,785 358,611
---------- ---------- ---------- ----------
Gross margin..................................................... 177,693 124,140 338,664 236,034
Selling, general and administrative expenses..................... 123,555 86,229 235,525 163,870
Amortization of intangible assets................................ 1,230 1,235 2,463 2,460
Interest income.................................................. (1,518) (937) (2,692) (1,686)
---------- ---------- ---------- ----------
Income before income taxes....................................... 54,426 37,613 103,368 71,390
Provision for income taxes....................................... 22,146 15,403 42,038 29,260
---------- ---------- ---------- ----------
Net income....................................................... $ 32,280 $ 22,210 $ 61,330 $ 42,130
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic net income per share....................................... $ .35 $ .25 $ .67 $ .47
Diluted net income per share..................................... $ .34 $ .24 $ .64 $ .45
</TABLE>
All shares and amounts have been restated to retroactively reflect the
three-for-two stock split effected in the form of a stock dividend in September
1997.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
2
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1997
---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period.......................................................... 91,208 89,622
Issuances of restricted stock........................................................... 280 484
Repurchases of common stock............................................................. (354) (409)
Exercises of stock options.............................................................. 1,025 995
Issuance of common stock for acquisition................................................ -- 14
---------- ----------
Balance at end of period.............................................................. 92,159 90,706
---------- ----------
---------- ----------
COMMON STOCK--PAR VALUE:
Balance at beginning of period.......................................................... $ 91 $ 90
Exercises of stock options.............................................................. 1 1
---------- ----------
Balance at end of period.............................................................. $ 92 $ 91
---------- ----------
---------- ----------
CAPITAL SURPLUS:
Balance at beginning of period.......................................................... $ 196,888 $ 140,473
Issuances of restricted stock--excess over par value.................................... 17,939 14,014
Exercises of stock options--excess over par value....................................... 5,814 3,928
Issuance of common stock for acquisition................................................ -- 400
Tax benefits from exercises of stock options and restricted stock vesting............... 22,273 12,808
---------- ----------
Balance at end of period.............................................................. $ 242,914 $ 171,623
---------- ----------
---------- ----------
DEFERRED COMPENSATION:
Balance at beginning of period.......................................................... $ (44,276) $ (26,802)
Issuances of restricted stock........................................................... (17,939) (14,014)
Amortization of deferred compensation................................................... 9,566 5,652
---------- ----------
Balance at end of period.............................................................. $ (52,649) $ (35,164)
---------- ----------
---------- ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period.......................................................... $ (1,347) $ 23
Translation adjustments................................................................. (204) (856)
---------- ----------
Balance at end of period.............................................................. $ (1,551) $ (833)
---------- ----------
---------- ----------
RETAINED EARNINGS:
Balance at beginning of period.......................................................... $ 267,444 $ 194,691
Repurchases of common stock--excess over par value...................................... (16,006) (10,766)
Net income.............................................................................. 61,330 42,130
---------- ----------
Balance at end of period.............................................................. $ 312,768 $ 226,055
---------- ----------
---------- ----------
COMPREHENSIVE INCOME:
Net income.............................................................................. $ 61,330 $ 42,130
Translation adjustments................................................................. (204) (856)
---------- ----------
Total comprehensive income............................................................ $ 61,126 $ 41,274
---------- ----------
---------- ----------
</TABLE>
All shares and amounts have been restated to retroactively reflect the
three-for-two stock split effected in the form of a stock dividend in September
1997.
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
3
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1998 1997
---------- ----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................................................. $ 61,330 $ 42,130
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets..................................................... 2,463 2,460
Depreciation expense.................................................................. 8,508 5,643
Provision for deferred income taxes................................................... 1,882 (2,015)
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable..................................................... (30,580) (28,708)
Increase in accounts payable, accrued expenses and accrued payroll costs............ 28,918 16,968
Increase (decrease) in income taxes payable......................................... 4,913 587
Change in other assets, net of change in other liabilities.......................... 4,158 4,672
---------- ----------
Total adjustments................................................................. 20,262 (393)
---------- ----------
Net cash and cash equivalents provided by operating activities.......................... 81,592 41,737
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions, net of cash acquired...................................................... -- (3,338)
Capital expenditures.................................................................... (31,456) (16,616)
---------- ----------
Net cash and cash equivalents used in investing activities.............................. (31,456) (19,954)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock............................................................. (16,006) (10,766)
Principal payments on notes payable and other indebtedness.............................. (2,242) (1,503)
Proceeds and tax benefits from exercises of stock options and restricted stock
vesting............................................................................... 28,088 16,736
---------- ----------
Net cash and cash equivalents provided by financing activities............................ 9,840 4,467
---------- ----------
Net increase in cash and cash equivalents................................................. 59,976 26,250
Cash and cash equivalents at beginning of period.......................................... 131,349 80,181
---------- ----------
Cash and cash equivalents at end of period................................................ $ 191,325 $ 106,431
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest................................................................................ $ 171 $ 223
Income taxes............................................................................ $ 12,483 $ 17,910
Acquisitions:
Assets acquired--
Intangible assets..................................................................... $ -- $ 4,079
Other................................................................................. -- 499
Liabilities incurred--
Notes payable and contracts........................................................... -- (536)
Other................................................................................. -- (304)
Common stock issued..................................................................... -- (400)
---------- ----------
Cash paid, net of cash acquired......................................................... $ -- $ 3,338
---------- ----------
---------- ----------
</TABLE>
The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.
4
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1998
(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- and RHI
MANAGEMENT RESOURCES-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 skilled
temporary administrative personnel. RHI CONSULTING provides contract information
technology professionals. RHI MANAGEMENT RESOURCES places senior-level
accounting and financial professionals on longer term, more complex projects
lasting for several months to a year or longer. Revenues are predominantly from
temporary services. The Company operates in the United States, Canada and
Europe. 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 1997 financial statements to conform to
the 1998 presentation.
INTERIM FINANCIAL INFORMATION. The Consolidated Financial Statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC") and, in management's opinion, include all
adjustments necessary for a fair statement of results for such interim periods.
Certain information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to SEC rules or regulations; however,
the Company believes that the disclosures made are adequate to make the
information presented not misleading.
The interim results for the three and six months ended June 30, 1998, and
1997 are not necessarily indicative of results for the full year. It is
suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997.
REVENUE RECOGNITION. Temporary services 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 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,
1998.
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.
5
<PAGE>
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 1998
(UNAUDITED)
NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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 part of
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 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.
NOTE B--NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income", which defines the concept of "comprehensive
income" and establishes reporting requirements effective for financial
statements beginning in the first quarter of 1998. The adoption of SFAS No. 130
does not affect the Company's earnings, liquidity, or capital resources.
Currently, foreign currency translation adjustments is the only "comprehensive
income" item relevant to the Company. The Company has adopted SFAS No. 130 and
"comprehensive income" is presented in the Consolidated Statements of
Stockholders' Equity.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND SIX MONTHS ENDED JUNE
30, 1998 AND 1997
Temporary services revenues were $407 million and $288 million for the three
months ended June 30, 1998 and 1997, respectively, increasing by 41% during the
three months ended June 30, 1998 compared to the same period in 1997. Temporary
services revenues were $778 million and $549 million for the six months ended
June 30, 1998 and 1997, respectively, increasing by 42% during the six months
ended June 30, 1998 compared to the same period in 1997. Permanent placement
revenues were $35 million and $24 million for the three months ended June 30,
1998 and 1997, respectively, increasing by 46% during the three months ended
June 30, 1998 compared to the same period in 1997. Permanent placement revenues
were $65 million and $46 million for the six months ended June 30, 1998 and
1997, respectively, increasing by 41% during the six months ended June 30, 1998
compared to the same period in 1997. Overall revenue increases reflect continued
improvement in demand for the Company's services, which the Company believes is
a result of increased acceptance in the use of professional staffing services.
The Company currently has more than 225 offices in 39 states and five
foreign countries. Domestic operations represented 89% and 90% of revenues for
the three and six months ended June 30, 1998, respectively, and 90% of revenues
for both the three and six months ended June 30, 1997. Foreign operations
represented 11% and 10% of revenues for the three and six months ended June 30,
1998, respectively, and 10% of revenues for both the three and six months ended
June 30, 1997.
Gross margin dollars from the Company's temporary 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
services were $143 million and $274 million for the three and six months ended
June 30, 1998, respectively, compared to $100 million and $190 million for the
comparable periods in 1997, increasing by 43% and 44% for the three and six
months ended June 30, 1998, respectively. Gross margin amounts equaled 35% of
revenues for temporary services for both the three and six months ended June 30,
1998, compared to 35% of temporary service revenues for both the three and six
months ended June 30, 1997, 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 $35 million
and $65 million for the three and six months ended June 30, 1998, respectively,
compared to $24 million and $46 million for the comparable periods in 1997,
increasing by 46% and 41% for the three and six months ended June 30, 1998,
respectively.
Selling, general and administrative expenses were $124 million and $236
million for the three and six months ended June 30, 1998, respectively, compared
to $86 million and $164 million during the three and six months ended June 30,
1997, respectively. Selling, general and administrative expenses as a percentage
of revenues were 28% in both the three and six months ended June 30, 1998
compared to 28% for both the three and six months ended June 30, 1997. Selling,
general and administrative expenses consist primarily of staff compensation,
advertising and occupancy costs, most of which generally follow changes in
revenues.
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
strategy of making 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, 1998. Intangible
assets represented 26% of total assets and 35% of total stockholders' equity at
June 30, 1998.
7
<PAGE>
Interest income for the three months ended June 30, 1998 and 1997 was
$1,828,000 and $1,148,000, respectively, while interest expense for the three
months ended June 30, 1998 and 1997 was $310,000 and $211,000, respectively.
Interest income for the six months ended June 30, 1998 and 1997 was $3,278,000
and $2,097,000, respectively, while interest expense for the six months ended
June 30, 1998 and 1997 was $586,000 and $411,000, respectively. The change in
interest income reflects an increase in cash and cash equivalents.
The provision for income taxes was 41% for all periods presented.
LIQUIDITY AND CAPITAL RESOURCES
The change in the Company's liquidity during the six months ended June 30,
1998 is the net effect of funds generated by operations and the funds used for
capital expenditures and principal payments on outstanding notes payable. For
the six months ended June 30, 1998, the Company generated $81.6 million from
operations, used $31.5 million in investing activities and provided $9.8 million
by financing activities.
The Company's working capital at June 30, 1998, included $191.3 million in
cash and cash equivalents. In addition at June 30, 1998, the Company had
available $73.8 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, 1998, the Company had no material capital
commitments.
In 1997, the Company initiated a number of major system projects to replace
core systems. Management expects these new systems to be in place before Year
2000 and to resolve any major existing Year 2000 issues. The Company expects to
spend in excess of $40 million on these projects.
The Company will adopt SOP 98-1, "Accounting for the Costs of Computer
Software Developed for Internal Use," which requires the capitalization of
certain costs related to the development of software for internal use in fiscal
year 1999. The Company believes that the adoption of this standard will not have
a material impact on its financial results.
ITEM 2A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's market risk sensitive instruments do not subject the Company
to material market risk exposures.
8
<PAGE>
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 6, 1998, 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:
<TABLE>
<CAPTION>
NOMINEE SHARES FOR SHARES WITHHELD
- --------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Edward W. Gibbons.............................................. 80,244,170 525,832
Harold M. Messmer, Jr.......................................... 80,226,779 543,223
</TABLE>
The continuing directors, whose terms of office did not expire at the
meeting, are Andrew S. Berwick, Jr., Frederick P. Furth, Frederick A. Richman,
Thomas J. Ryan and J. Stephen Schaub.
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.
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ------------- ----------------------------------------
<C> <S>
11 Computation of Per Share Earnings.
27 Financial Data Schedule.
</TABLE>
(b) The registrant filed no current report on Form 8-K during the quarter
covered by this report.
9
<PAGE>
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
SENIOR VICE PRESIDENT,
CHIEF FINANCIAL OFFICER
AND TREASURER
(PRINCIPAL FINANCIAL OFFICER AND
DULY AUTHORIZED SIGNATORY)
Date: August 5, 1998
10
<PAGE>
Exhibit 11
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
1998 1997 1998 1997
--------- --------- --------- ---------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net Income............................................................ $ 32,280 $ 22,210 $ 61,330 $ 42,130
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted Average Number Of Shares Outstanding:
Basic:
Weighted average shares........................................... 92,071 90,513 91,849 90,342
--------- --------- --------- ---------
--------- --------- --------- ---------
Diluted:
Weighted average shares........................................... 92,071 90,513 91,849 90,342
Common stock equivalents--Stock options (A)....................... 3,415 3,094 3,381 3,186
--------- --------- --------- ---------
Diluted shares outstanding........................................ 95,486 93,607 95,230 93,528
--------- --------- --------- ---------
--------- --------- --------- ---------
Net Income Per Share:
Basic............................................................... $ 0.35 $ 0.25 $ 0.67 $ 0.47
Diluted............................................................. $ 0.34 $ 0.24 $ 0.64 $ 0.45
</TABLE>
- ------------------------
(A) The treasury stock method was used to determine the weighted average number
of shares of common stock equivalents outstanding during the periods.
All shares and amounts have been restated to retroactively reflect the
three-for-two stock split effected in the form of a stock dividend in
September 1997.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 191,325
<SECURITIES> 0
<RECEIVABLES> 225,905
<ALLOWANCES> 8,426
<INVENTORY> 0
<CURRENT-ASSETS> 433,346
<PP&E> 109,636
<DEPRECIATION> 38,353
<TOTAL-ASSETS> 678,376
<CURRENT-LIABILITIES> 152,444
<BONDS> 4,235
0
0
<COMMON> 92
<OTHER-SE> 501,482
<TOTAL-LIABILITY-AND-EQUITY> 678,376
<SALES> 0
<TOTAL-REVENUES> 843,449
<CGS> 0
<TOTAL-COSTS> 504,785
<OTHER-EXPENSES> 2,463
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (2,692)
<INCOME-PRETAX> 103,368
<INCOME-TAX> 42,038
<INCOME-CONTINUING> 61,330
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 61,330
<EPS-PRIMARY> .67
<EPS-DILUTED> .64
</TABLE>
