Robert Half(US:RHI)2021-10-29 20:46PART I—FINANCIAL INFORMATION Financial Statements The unaudited financial statements show significant year-over-year growth in revenues and net income Condensed Consolidated Financial Statements The company's financial position strengthened with asset growth and a significant increase in net income Condensed Consolidated Statements of Financial Position (in thousands) | | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Total current assets | $2,233,751 | $1,842,738 | | Total assets | $2,931,718 | $2,557,424 | | Total current liabilities | $1,341,602 | $1,046,626 | | Total liabilities | $1,615,675 | $1,352,135 | | Total stockholders' equity | $1,316,043 | $1,205,289 | Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Service revenues | $1,712,566 | $1,189,897 | $4,691,527 | $3,804,914 | | Gross margin | $725,327 | $467,346 | $1,951,909 | $1,498,284 | | Net income | $170,871 | $75,749 | $430,682 | $211,860 | | Diluted EPS | $1.53 | $0.67 | $3.85 | $1.87 | Condensed Consolidated Statements of Cash Flows (Nine Months Ended Sep 30, in thousands) | | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $458,265 | $564,641 | | Net cash used in investing activities | $(49,798) | $(43,432) | | Net cash used in financing activities | $(340,602) | $(208,476) | | Change in cash and cash equivalents | $59,293 | $316,522 | Notes to Condensed Consolidated Financial Statements Notes detail revenue disaggregation, segment performance, stock repurchases, and dividend declarations Service Revenues by Line of Business (Nine Months Ended Sep 30, in thousands) | Line of Business | 2021 | 2020 | | :--- | :--- | :--- | | Temporary and consultant staffing | $2,922,257 | $2,626,897 | | Permanent placement staffing | $411,788 | $278,722 | | Risk consulting and internal audit services | $1,357,482 | $899,295 | | Total Service revenues | $4,691,527 | $3,804,914 | Segment Income (Nine Months Ended Sep 30, in thousands) | Segment | 2021 | 2020 | | :--- | :--- | :--- | | Temporary and consultant staffing | $279,697 | $165,933 | | Permanent placement staffing | $79,264 | $20,791 | | Risk consulting and internal audit services | $224,256 | $105,311 | | Combined segment income | $583,217 | $292,035 | - The company is authorized to repurchase up to 7.7 million additional shares of common stock as of September 30, 2021; during the first nine months of 2021, 2.25 million shares were repurchased for $199.6 million87 - On October 28, 2021, the company declared a quarterly dividend of $0.38 per share, payable on December 15, 2021100 Management's Discussion and Analysis (MD&A) Management attributes record Q3 results to strong global demand for staffing and consulting services Executive Overview and Results of Operations Record Q3 2021 revenues were driven by strong demand, talent shortages, and expanded gross margins - The company achieved record service revenues and earnings in Q3 2021 due to a broad-based, global acceleration in demand; for the first nine months of 2021, service revenues increased 23.3% to $4.69 billion, and net income increased 103.3% to $431 million102 - Key market trends driving growth include the adoption of flexible, hybrid, and remote work models, along with elevated employee attrition rates at client companies103 As-Adjusted Revenue Growth vs. Reported (Q3 2021 vs Q3 2020) | Segment | Global Reported Growth | Global As-Adjusted Growth | | :--- | :--- | :--- | | Temporary and consultant staffing | 35.0% | 34.0% | | Permanent placement staffing | 79.4% | 77.7% | | Risk consulting and internal audit services | 56.1% | 55.1% | - For Q3 2021, combined segment income increased to $228 million (13.3% of revenues) from $103 million (8.6% of revenues) in Q3 2020, demonstrating significant operating leverage136 Liquidity and Capital Resources The company maintains a robust liquidity position with strong operating cash flow funding shareholder returns - Cash and cash equivalents stood at $634 million as of September 30, 2021158 - During the first nine months of 2021, the company used $212 million for stock repurchases and $129 million for dividend payments161 - The company has a $100 million unsecured revolving credit facility maturing in May 2024, with no borrowings outstanding as of September 30, 2021165 Market Risk Disclosures The primary market risk is foreign currency fluctuation, with a weak U.S. dollar positively impacting results - Approximately 22.7% of the company's revenues were generated outside of the United States in the first nine months of 2021169 - For the first nine months of 2021, currency exchange rate fluctuations increased reported service revenues by $63.6 million (1.7%) and net income by $3.6 million (1.7%) compared to the same period in 2020170171 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period173 PART II—OTHER INFORMATION Legal Proceedings and Risk Factors No material changes in legal proceedings or risk factors were reported since the last annual filing - There have been no material developments in legal proceedings or material changes to risk factors since the last annual report175176 Issuer Purchases of Equity Securities The company details its common stock repurchases for Q3 2021 and the remaining authorized amount Issuer Purchases of Equity Securities (Q3 2021) | Period | Total Number of Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | July 2021 | — | $— | | August 2021 | 214,178 | $101.42 | | September 2021 | 527,749 | $102.08 | | Total Q3 2021 | 741,927 | N/A | - As of September 30, 2021, the company may yet purchase up to 7,694,176 shares under its publicly announced repurchase plan177 Other Items (Items 3, 4, 5, 6) This section confirms no defaults, mine safety issues, or other material information to disclose - The company reports no defaults upon senior securities, no mine safety disclosures, and no other information under Item 5178179181