Robert Half(US:RHI)2020-01-31 04:36Financial Data and Key Metrics Changes - Company-wide revenues for Q4 2019 were $1.537 billion, a 4% increase from Q4 2018 on both reported and adjusted basis [7][11] - Net income per share for Q4 2019 was $0.98, up from $0.95 in Q4 2018, representing a 4% year-over-year increase [7] - Cash flow from operations was $81 million, with capital expenditures of $14 million in Q4 2019 [7] - Return on invested capital for the company was 40% in Q4 2019 [9] Business Line Data and Key Metrics Changes - Staffing revenues were $1.233 billion in Q4 2019, with US staffing revenues at $962 million (up 3% year-over-year) and non-US staffing revenues at $271 million (down 1% year-over-year) [11] - Protiviti's global revenues in Q4 2019 were $304 million, with US revenues up 17% year-over-year and non-US revenues up 3% [13] - Overall staffing gross margin decreased by 10 basis points to 44.3% compared to Q4 2018 [14] Market Data and Key Metrics Changes - The US unemployment rate held at 3.5% in December 2019, the lowest in 50 years [24] - The Vistage CEO Confidence Index improved from 85 in the prior quarter to 91.5 in Q4 2019, with 63% of CEOs planning to expand their workforce [24] Company Strategy and Development Direction - The company is focused on professional-level engagements in small and middle-market companies, leveraging its brand recognition and technology investments [27] - Protiviti's collaboration with staffing operations is seen as a key differentiator, providing a full spectrum of staffing and consulting solutions [25] - The company is investing in technology to enhance client and candidate experiences, including improvements to its website and mobile app [26][87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning, citing strong demand in the US job market and ongoing talent shortages [24][27] - The company anticipates continued strong growth in Protiviti, with expectations of maintaining double-digit growth rates [32] - Management noted that the competitive environment remains challenging, particularly in international markets, but they are optimistic about stabilization in Germany [34][90] Other Important Information - The company repurchased approximately 1 million shares for $59 million during the quarter, with 2.5 million shares remaining under the repurchase plan [8] - The company expects Q1 2020 revenues to be between $1.515 billion and $1.580 billion, with EPS guidance of $0.90 to $0.96 [21] Q&A Session Summary Question: Can you discuss the strong growth in Protiviti and its sustainability? - Management highlighted Protiviti's seven straight quarters of double-digit growth, with a strong pipeline and broad-based strength across various practice areas [32] Question: What is the outlook for international markets? - Management noted positive growth in Germany and Australia, but negative growth in France, the UK, and Canada, with expectations of continued moderation in growth rates [34] Question: How did US temp revenue perform in January? - Management indicated that US temp revenue growth picked up in January due to easier comparisons and a strong reentry point post-holidays [39][40] Question: What is the impact of AB5 on the business? - Management stated that many clients prefer to use employees over independent contractors due to uncertainty surrounding AB5, which could benefit staffing firms [110] Question: What are the expectations for CapEx in 2020? - The company expects CapEx to be in the range of $100 million to $110 million, primarily for technology investments [83]