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Robert Half International Inc. Q1 2010 Earnings Call Transcript

Robert Half International Inc. Q1 2010 Earnings Call Transcript

Robert Half International Inc. (RHI)

Q1 2010 Earnings Call

April 27, 2010 5:00 pm ET


Harold M. Messmer, Jr - Chairman of the Board and CEO

M. Keith Waddell - Vice Chairman of the Board, President and CFO


Tim McHugh - William Blair & Company

Phil Stiller - Citigroup

Kelly Flynn - Credit Suisse

Andrew Steinerman - JP Morgan

Sara Gubins - Bank of America

Vance Edelson - Morgan Stanley

Frank Pinkerton - SunTrust

Jim Janesky - Stifel Nicolaus

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Gary Bisbee - Barclays Capital

Kevin McVeigh - Macquarie

Paul Condra - BMO Capital Markets

John Healy - Northcoast Research



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Welcome to the Robert Half International Conference Call to discuss First Quarter 2010 Financial Results. Our hosts for today's call are Mr. Max Messmer, Chairman and CEO of Robert Half International and Mr. Keith Waddell, Vice Chairman, President, and Chief Financial Officer. Mr. Messmer, you may begin.

Max Messmer

Thank you and good afternoon. We appreciate you are joining us. Before we begin our prepared remarks, I would like to make customary comments on the call to the effect that this call contains predictions, estimates and other forward-looking statements.

These statements represent our current judgment of what the future holds, they include words such as forecast, estimate, project, expect, believe, guidance, and similar expressions. While we believe these remarks to be reasonable, but they are subject to risks and uncertainties that could cause actual results to differ materially from the forward looking statements.

We describe some of these risks and uncertainties in the press release issued today and in our SEC filings. We assume no obligation to update the statements made in this conference call.

Now let's review the first quarter results. Revenues for the first quarter were $737 million, down 10% in the first quarter of last year. Income per share for the quarter was $0.05 down 7% from the first quarter of 2009.

Cash flow from operations was $15 million during the quarter, capital expenditures were $8 million. In January we raised our quarterly cash dividend to $0.13. Our total dividend paid to stockholders was $20 million during the first quarter. We are beginning to see improvement in the demand for our professional staffing services as a result of better economic conditions in North America and abroad.

First quarter revenues for our staffing operations were up 2% on a constant currency basis from the results we’ve reported for the fourth quarter. Our permanent placement operations performed particularly well during the quarter growing 9% on the constant currency basis versus the fourth quarter of 2009.

We believe this relates directly to the depth and the severity of personnel cuts made during the recession. Many businesses have had to hire at the first sign of a pick and demand as well as immediately replace workers lost due to turnover.

At this point, I will turn the call over to Keith for more detail review of our first quarter financial results.

Keith Waddell

Thanks Max. I'll start with company-wide revenues as Max indicated reported revenues in the first quarter were $737 million down 10% from the first quarter of 2009 and essentially flat on a reported basis sequentially. There were 62 billing days in the first quarter, the same that the first quarter of 2009 and the same as last quarter.

Revenues for Accountemps were $289 million in the first quarter, this is down 12% from a year ago and flat sequentially. Accountemps is our largest staffing division accounts for 39% of company revenues. There are 360 Accountemps location worldwide.

OfficeTeam had revenues of a $141 million in the first quarter, this is down 3% from the first quarter of 2009 and also flat sequentially. OfficeTeam is our administrative staffing division, it represents 19% of company revenues and has 323 locations worldwide.

First quarter revenues for Robert Half Management resources were $93 million. This is an 18% decline from one year ago and at 3% increase sequentially. This division places the senior level accounting and finance professionals on a project basis. It has 149 locations worldwide and makes of 13% of company revenues. Robert Half Technology had first quarter revenues of $75 million, down 10% in the first quarter of 2009, and down 1% sequentially.

Robert Half Technology places Information Technology professionals on a consulting and full time basis, it operates 112 location worldwide and account for 10% of company revenues. Our permanent placement division Robert Half Finance and Accounting have revenues of $49 million in the first quarter, this is a decline of 3% in the first quarter of last year, and an increase of 7% sequentially. This business was established in 1948 operates 360 locations worldwide.

It accounts for 7% of company wide revenues. International staffing operations had revenues of $191 million, down 7% from the first quarter of 2009, and flat sequentially. On a constant currency basis revenues for our international staffing operations were down 16% compared to the first quarter of last year, but up 4% sequentially.

We have staffing operations in a 103 locations in 20 countries outside the US; international staffing operations represent 29% of total staffing revenues. First quarter revenues for Protiviti were $90 million, 11% lower than one year ago and 6% lower than last quarter. Formed in 2002, Protiviti is a global business consulting and internal audit firm providing risk, advisory and transaction services. It has 61 locations in 17 countries and accounts for 12% of total RHI revenues.

Protiviti's international operations represent 29% of total Protiviti revenues. Turning to gross margin, first quarter gross margin in our temporarily and consulting staffing operations was $201 million or 33.6% of applicable revenues. This compares with 34.7% of revenues for the first quarter of 2009 and 34.5% of revenues for the fourth quarter of 2009.

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