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Robert Half International's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Currency exchange rates reduced first quarter 2012 sequential revenues by $1 million and first quarter year-over-year revenues by $6 million. This had the effect of reducing first quarter 2012 sequential growth rates by 0.1% and year-over-year growth rates by 0.8%. Beginning this quarter, we've added a new supplemental schedule to the investor center of our website at It shows the year-over-year revenue growth rates for each of our staffing lines of business on both a reported basis and also a same-day constant currency basis. It further splits the data between U.S. and non-U.S. operations. This information is presented for each of the quarters, beginning with the first quarter of 2011. We provided this data because we believe that better reflects our actual growth rate and aids in the evaluation of revenue trends over time. This data is considered to be a non-GAAP financial measure.

Additional information, including a reconciliation of these growth rates to reported growth rates also is available on our website. On a same-day constant currency basis, global staffing revenues grew 16% year-over-year compared to the first quarter of 2011, with the U.S. growing 20% and international locations growing 9% on this basis. U.S. staffing revenues were $652 million in the first quarter of this year, while International Staffing revenues for the quarter were $260 million. We have 353 staffing locations worldwide, including 104 locations in 19 countries outside the U.S.

First quarter global revenues for Protiviti were at $103 million, including $78 million in United States and $25 million outside the U.S. Year-over-year growth rates were 4% globally, with U.S. revenue up 9% and non-U.S. revenue down 7%. Protiviti and its independently-owned member firms serve clients through a network of 71 locations in 22 countries.

Now, let's look at gross margin. First quarter gross margin in our temporary and consulting staffing operations was 35.6% of applicable revenues. This was 125 basis point increase over the first quarter of last year, and only a 16 basis point decline from the fourth quarter of 2011. We were very pleased with our ability during the quarter to adjust our pay bill spreads to absorb the anticipated state unemployment tax increases, and also the absence of prior quarter workers' compensation credits. Temp-to-hire conversions also rose modestly during quarter. Our mix of permanent placement revenues increased to 9.1% of staffing revenues for the quarter versus 8.6% a year ago. Together with the higher temporary and consulting gross margins previously discussed, this resulted in a 150 basis point increase in overall staffing gross margin compared to the first quarter of 2011. Protiviti's gross margin was $24 million or 23% of Protiviti were revenues, compared to 25% of revenues a year-ago.

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