Robert Half
RHI
#4322
Rank
A$3.60 B
Marketcap
A$35.63
Share price
-2.87%
Change (1 day)
-57.73%
Change (1 year)

Robert Half - 10-Q quarterly report FY


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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, 1999

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, 1999:

91,434,166 shares of $.001 par value Common Stock

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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,
1999 1998
----------- ------------
<S> <C> <C>
(UNAUDITED)
ASSETS:

Cash and cash equivalents................................................................. $ 187,975 $ 166,060
Accounts receivable, less allowances of $12,196 and $10,176............................... 267,508 240,690
Other current assets...................................................................... 25,835 23,656
----------- ------------
Total current assets.................................................................. 481,318 430,406
Intangible assets, less accumulated amortization of $57,038 and $53,236................... 174,382 178,363
Property and equipment, less accumulated depreciation of $63,208 and $48,900.............. 103,991 94,950
----------- ------------
Total assets.......................................................................... $ 759,691 $ 703,719
----------- ------------
----------- ------------

LIABILITIES AND STOCKHOLDERS' EQUITY:

Accounts payable and accrued expenses..................................................... $ 27,934 $ 23,659
Accrued payroll costs..................................................................... 124,504 124,068
Income taxes payable...................................................................... 9,987 3,810
Current portion of notes payable and other indebtedness................................... 1,807 1,308
----------- ------------
Total current liabilities............................................................. 164,232 152,845
Notes payable and other indebtedness, less current portion................................ 2,624 3,404
Deferred income taxes..................................................................... 22,315 25,000
----------- ------------
Total liabilities..................................................................... 189,171 181,249

Commitments and Contingencies

STOCKHOLDERS' EQUITY:

Common stock, $.001 par value authorized 260,000,000 shares; issued and outstanding
90,378,250 and 91,225,353 shares......................................................... 90 91
Capital surplus........................................................................... 288,349 270,609
Deferred compensation..................................................................... (53,248) (56,790)
Accumulated other comprehensive income.................................................... (2,577) (1,244)
Retained earnings......................................................................... 337,906 309,804
----------- ------------
Total stockholders' equity............................................................ 570,520 522,470
----------- ------------
Total liabilities and stockholders' equity............................................ $ 759,691 $ 703,719
----------- ------------
----------- ------------
</TABLE>

The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.

1
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,
---------------------- ----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)

<S> <C> <C> <C> <C>
Net service revenues............................................. $ 497,060 $ 442,153 $ 982,048 $ 843,449
Direct costs of services, consisting of payroll, payroll taxes
and insurance costs for temporary employees..................... 292,670 264,460 579,763 504,785
---------- ---------- ---------- ----------
Gross margin..................................................... 204,390 177,693 402,285 338,664
Selling, general and administrative expenses..................... 148,710 123,555 287,700 235,525
Amortization of intangible assets................................ 1,254 1,230 2,483 2,463
Interest income, net............................................. (1,517) (1,518) (2,824) (2,692)
---------- ---------- ---------- ----------
Income before income taxes....................................... 55,943 54,426 114,926 103,368
Provision for income taxes....................................... 22,004 22,146 45,677 42,038
---------- ---------- ---------- ----------
Net income....................................................... $ 33,939 $ 32,280 $ 69,249 $ 61,330
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------

Basic net income per share....................................... $ .37 $ .35 $ .76 $ .67
Diluted net income per share..................................... $ .37 $ .34 $ .74 $ .64
</TABLE>

The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.

2
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1999 1998
---------- ----------
(UNAUDITED)
<S> <C> <C>
COMMON STOCK--SHARES:
Balance at beginning of period.......................................................... 91,225 91,208
Issuances of restricted stock........................................................... 349 280
Repurchases of common stock............................................................. (1,408) (354)
Exercises of stock options.............................................................. 212 1,025
---------- ----------
Balance at end of period.............................................................. 90,378 92,159
---------- ----------
---------- ----------
COMMON STOCK--PAR VALUE:
Balance at beginning of period.......................................................... $ 91 $ 91
Repurchases of common stock............................................................. (1) --
Exercises of stock options.............................................................. -- 1
---------- ----------
Balance at end of period.............................................................. $ 90 $ 92
---------- ----------
---------- ----------
CAPITAL SURPLUS:
Balance at beginning of period.......................................................... $ 270,609 $ 196,888
Issuances of restricted stock--excess over par value.................................... 7,866 17,939
Exercises of stock options--excess over par value....................................... 1,367 5,814
Capital impact of equity incentive plans................................................ 8,507 22,273
---------- ----------
Balance at end of period.............................................................. $ 288,349 $ 242,914
---------- ----------
---------- ----------
DEFERRED COMPENSATION:
Balance at beginning of period.......................................................... $ (56,790) $ (44,276)
Issuances of restricted stock........................................................... (7,866) (17,939)
Amortization of deferred compensation................................................... 11,408 9,566
---------- ----------
Balance at end of period.............................................................. $ (53,248) $ (52,649)
---------- ----------
---------- ----------
ACCUMULATED OTHER COMPREHENSIVE INCOME:
Balance at beginning of period.......................................................... $ (1,244) $ (1,347)
Translation adjustments................................................................. (1,333) (204)
---------- ----------
Balance at end of period.............................................................. $ (2,577) $ (1,551)
---------- ----------
---------- ----------
RETAINED EARNINGS:
Balance at beginning of period.......................................................... $ 309,804 $ 267,444
Repurchases of common stock--excess over par value...................................... (41,147) (16,006)
Net income.............................................................................. 69,249 61,330
---------- ----------
Balance at end of period.............................................................. $ 337,906 $ 312,768
---------- ----------
---------- ----------

COMPREHENSIVE INCOME:
Net income.............................................................................. $ 69,249 $ 61,330
Translation adjustments................................................................. (1,333) (204)
---------- ----------
Total comprehensive income............................................................ $ 67,916 $ 61,126
---------- ----------
---------- ----------
</TABLE>

The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.

3
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
----------------------
1999 1998
---------- ----------
(UNAUDITED)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................................................. $ 69,249 $ 61,330
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of intangible assets..................................................... 2,483 2,463
Depreciation expense.................................................................. 14,949 8,508
Provision for deferred income taxes................................................... (2,633) 1,882
Changes in assets and liabilities, net of effects of acquisitions:
Increase in accounts receivable..................................................... (26,818) (30,580)
Increase in accounts payable, accrued expenses and accrued payroll costs............ 5,505 28,918
Increase in income taxes payable.................................................... 6,177 4,913
Change in other assets, net of change in other liabilities.......................... 9,713 4,158
---------- ----------
Total adjustments................................................................. 9,376 20,262
---------- ----------
Net cash and cash equivalents provided by operating activities.......................... 78,625 81,592
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures.................................................................... (25,470) (31,456)
---------- ----------
Net cash and cash equivalents used in investing activities.............................. (25,470) (31,456)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repurchases of common stock and common stock equivalents................................ (41,148) (16,006)
Principal payments on notes payable and other indebtedness.............................. 34 (2,242)
Proceeds and capital impact of equity incentive plans................................... 9,874 28,088
---------- ----------
Net cash and cash equivalents (used in) provided by financing activities.................. (31,240) 9,840
---------- ----------
Net increase in cash and cash equivalents................................................. 21,915 59,976
Cash and cash equivalents at beginning of period.......................................... 166,060 131,349
---------- ----------
Cash and cash equivalents at end of period................................................ $ 187,975 $ 191,325
---------- ----------
---------- ----------

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest................................................................................ $ 182 $ 171
Income taxes............................................................................ $ 23,210 $ 12,483
</TABLE>

The accompanying Notes to Consolidated Financial Statements are
an integral part of these financial statements.

4
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1999

(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-, RHI
MANAGEMENT RESOURCES-REGISTERED TRADEMARK-, THE AFFILIATES-REGISTERED TRADEMARK-
and THE CREATIVE GROUP(SM). 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 highly skilled temporary
administrative support personnel. RHI CONSULTING provides contract information
technology professionals. THE AFFILIATES provides temporary, project, and
full-time staffing of attorneys and specialized support personnel within law
firms and corporate legal departments. THE CREATIVE GROUP provides project
staffing in the advertising, marketing, and Web design fields. Revenues are
predominantly from temporary services. The Company operates in the United
States, Canada, Europe, and Australia. 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 1998 financial statements to conform to
the 1999 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, 1999, and
1998 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, 1998.

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,
1999.

5
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 1999

(UNAUDITED)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.

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--BUSINESS SEGMENTS

In 1998, the Company adopted Statement of Financial Accounting Standard No.
131 (SFAS No. 131), DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED
INFORMATION. The Company has defined its business segments based on the nature
of services for the purposes of reporting under SFAS No. 131. The Company is
managed in a matrix form of organization with certain managers responsible for
service lines while other managers are responsible for geographic territories.
As such, both service line and geographic information is used in allocating
resources and measuring performance.

The Company has two reportable segments: temporary and consultant staffing;
and permanent placement staffing. The temporary and consultant staffing segment
provides specialized personnel in the accounting and finance, administrative and
office, information technology, legal, advertising, marketing, and Web design
fields. The permanent placement staffing segment provides full-time personnel in
the accounting, finance, and information technology fields.

The accounting policies of the segments are the same as those described in
Note A: Summary of Significant Accounting Policies. The Company evaluates
performance based on profit or loss from operations before interest expense,
intangible amortization expense, and income taxes.

6
ROBERT HALF INTERNATIONAL INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 1999

(UNAUDITED)

NOTE B--BUSINESS SEGMENTS (CONTINUED)

The following table provides a reconciliation of revenue and operating
profit by reportable segment to consolidated results (in thousands):

<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C>
Net service revenues
Temporary and consultant staffing.............................. $ 460,505 $ 407,137 $ 909,628 $ 778,304
Permanent placement staffing................................... 36,555 35,016 72,420 65,145
---------- ---------- ---------- ----------
$ 497,060 $ 442,153 $ 982,048 $ 843,449
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Operating income
Temporary and consultant staffing.............................. $ 46,992 $ 44,875 $ 97,283 $ 85,914
Permanent placement staffing................................... 8,688 9,263 17,302 17,225
---------- ---------- ---------- ----------
55,680 54,138 114,585 103,139

Amortization of intangible assets................................ 1,254 1,230 2,483 2,463
Interest income, net............................................. (1,517) (1,518) (2,824) (2,692)
---------- ---------- ---------- ----------
Income before income taxes....................................... $ 55,943 $ 54,426 $ 114,926 $ 103,368
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</TABLE>

7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

Certain information contained in Management's Discussion and Analysis and in
other parts of this report may be deemed forward-looking statements regarding
events and financial trends that may affect the Company's future operating
results or financial positions. Such statements may be identified by words such
as "estimate", "project", "plan", "intend", "believe", "expect", "anticipate",
or variations or negatives thereof or by similar or comparable words or phrases.
Forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed in the
statements. Such risks and uncertainties include, but are not limited to, the
following: changes in general or local economic conditions or in the economic
condition of any industry, the availability of qualified staff employees and
temporary candidates, government regulation of the personnel services industry,
general regulations relating to employers and employees, liability risks
associated with the operation of a personnel services business, competitive
conditions in the personnel services industry, and Year 2000 issues. In
addition, it should be noted that, because long-term contracts are not a
significant portion of the Company's business, future results cannot be reliably
predicted by considering past trends or extrapolating past results.

RESULTS OF OPERATIONS FOR EACH OF THE THREE MONTHS AND SIX MONTHS ENDED JUNE
30, 1999 AND 1998

Temporary services revenues were $460 million and $407 million for the three
months ended June 30, 1999 and 1998, respectively, increasing by 13% during the
three months ended June 30, 1999 compared to the same period in 1998. Temporary
services revenues were $910 million and $778 million for the six months ended
June 30, 1999 and 1998, respectively, increasing by 17% during the six months
ended June 30, 1999 compared to the same period in 1998. Permanent placement
revenues were $37 million and $35 million for the three months ended June 30,
1999 and 1998, respectively, increasing by 6% during the three months ended June
30, 1999 compared to the same period in 1998. Permanent placement revenues were
$72 million and $65 million for the six months ended June 30, 1999 and 1998,
respectively, increasing by 11% during the six months ended June 30, 1999
compared to the same period in 1998. Overall revenue increases reflect continued
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 240 offices in 39 states and six foreign
countries. Domestic operations represented 88% of revenues for both the three
and six months ended June 30, 1999, and 89% and 90% of revenues for the three
and six months ended June 30, 1998, respectively. Foreign operations represented
12% of revenues for both the three and six months ended June 30, 1999, and 11%
and 10% of revenues for the three and six months ended June 30, 1998,
respectively.

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 $167 million and $330 million for the three and six months ended
June 30, 1999, respectively, compared to $143 million and $274 million for the
comparable periods in 1998, increasing by 17% and 20% for the three and six
months ended June 30, 1999, respectively. Gross margin amounts equaled 36% of
revenues for temporary services for both the three and six months ended June 30,
1999, compared to 35% of temporary service revenues for both the three and six
months ended June 30, 1998, 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 $37 million
and $72 million for the three and six months ended June 30, 1999, respectively,
compared to $35 million and $65 million for the comparable periods in 1998,
increasing by 6% and 11% for the three and six months ended June 30, 1999,
respectively.

8
Selling, general and administrative expenses were $149 million and $288
million for the three and six months ended June 30, 1999, respectively, compared
to $124 million and $236 million during the three and six months ended June 30,
1998, respectively. Selling, general and administrative expenses as a percentage
of revenues were 30% and 29% for the three and six months ended June 30, 1999,
respectively, compared to 28% for both the three and six months ended June 30,
1998. Selling, general and administrative expenses consist primarily of staff
compensation, advertising, depreciation 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, 1999. Intangible
assets represented 23% of total assets and 31% of total stockholders' equity at
June 30, 1999.

Interest income for the three months ended June 30, 1999 and 1998 was
$1,604,000 and $1,828,000, respectively, while interest expense for the three
months ended June 30, 1999 and 1998 was $87,000 and $310,000, respectively.
Interest income for the six months ended June 30, 1999 and 1998 was $3,142,000
and $3,278,000, respectively, while interest expense for the six months ended
June 30, 1999 and 1998 was $318,000 and $586,000, respectively.

The provision for income taxes was 39% and 40% for the three and six months
ended June 30, 1999, respectively, compared to 41% for both the three and six
months ended June 30, 1998.

LIQUIDITY AND CAPITAL RESOURCES

The change in the Company's liquidity during the six months ended June 30,
1999 is the net effect of funds generated by operations and the funds used for
capital expenditures and repurchases of common stock. In July 1999, the Company
authorized the repurchase, from time to time, of up to an additional five
million shares of the Company's common stock on the open market or in privately
negotiated transactions, depending on market conditions. This five million share
authorization is in addition to the 1,210,000 shares remaining under the
existing four million share repurchase program. During the six months ended June
30, 1999, the Company repurchased approximately 1,066,000 shares of common stock
on the open market. Repurchases of the securities have been funded with cash
generated from operations. For the six months ended June 30, 1999, the Company
generated $79 million from operations, used $26 million in investing activities
and used $31 million in financing activities.

The Company's working capital at June 30, 1999, included $188 million in
cash and cash equivalents. In addition at June 30, 1999, the Company had
available $75 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, 1999, the Company had no material capital
commitments.

The Company's primary exposures related to the Year 2000 are in its key
internal information systems. The Company is addressing the Year 2000 exposures
as part of its strategic plan for upgrading core systems.

9
Since 1997, the Company has initiated a number of major system projects to
replace core computer hardware, networking, and software systems in the U.S.
with new technology. The Company has purchased software from outside vendors and
is working with outside consultants to install the software and train employees.
The Company's key vendors supplying this technology have asserted that these
hardware, networking, and software systems are Year 2000 compliant. The Company
does not plan to test these systems for Year 2000 compliance given the
contractual representations made by its key vendors.

The Company is currently rolling out these new systems throughout the
organization in phases, by location. The first phase has been completed on
schedule and the remaining are scheduled to be complete before the Year 2000.
The Company is also in the process of upgrading all desktop computers to a model
that is Year 2000 compliant and expects to complete this upgrade in 1999. The
Company expects to spend in excess of $44 million on these systems and desktop
upgrade projects of which approximately $42 million has been incurred to date.

The Company is undertaking steps to assess the effect of the Year 2000 issue
with respect to its foreign operating units and suppliers and at this time,
cannot determine the impact it will have. Contingency plans will be developed if
it appears the Company or its key suppliers will not be Year 2000 compliant as
noncompliance would have a material adverse impact on the Company's operations.

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 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's market risk sensitive instruments do not subject the Company
to material market risk exposures.

10
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 13, 1999, registrant held its annual meeting of stockholders. The two
matters presented to stockholders at the annual meeting were the election of
three directors to Class II and the approval of an amendment to the registrant's
By-laws that continues for an additional five years the classification of the
Board of Directors for purposes of election. The vote for director was as
follows:

<TABLE>
<CAPTION>
NOMINEE SHARES FOR SHARES WITHHELD
- ------------------------------------------------------------------------- ------------ ---------------
<S> <C> <C>
Frederick A. Richman..................................................... 80,134,785 203,024
Thomas J. Ryan........................................................... 80,112,921 224,888
J. Stephen Schaub........................................................ 78,979,662 1,358,147
</TABLE>

The continuing directors, whose terms of office did not expire at the
meeting, are Andrew S. Berwick, Jr., Frederick P. Furth, Edward W. Gibbons, and
Harold M. Messmer, Jr.

The amendment to the By-laws was approved by the following vote:

<TABLE>
<CAPTION>
For: 48,262,595
<S> <C>
Against: 27,529,888
Abstain: 112,994
Broker Non-Vote: 4,432,332
</TABLE>

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>
3.1 By-laws.
4.1 Rights Agreement, dated as of July 23, 1990, between the Registrant and The Chase
Manhattan Bank (formerly Manufacturers Hanover Trust Company of California), as
amended and restated effective May 17, 1999, incorporated by reference to Exhibit
1 to the Registrant's Form 8-A/A Amendment No. 5 filed on May 21, 1999.
10.1 Outside Directors' Option Plan.
10.2 StockPlus Plan.
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.

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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 11, 1999

12