Hello, and welcome to the Robert Half International Third Quarter 2012 Conference Call. 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.

Thank you, and hello, everyone. Thank you for joining us. Before we begin, we would like to remind you that comments made on today's call contain predictions, estimates and other forward-looking statements. These statements represent our current judgment of what the future holds and include words such as forecast, estimate, project, expect, believe, guidance and similar expressions. We believe these remarks to be reasonable but would remind you that they are subject to risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. We've described some of these risks and uncertainties in today's press release and in our SEC filings, including our 10-Ks, 10-Qs and today's 8-K. We assume no obligation to update the statements made on this conference call. Now let's discuss the third quarter. Global revenues for the third quarter were $1.03 billion, an increase of 8% from the third quarter of 2011 on a same-day constant currency basis. Income per share was $0.41, up 33% from the third quarter of last year. Cash flow from operations during the third quarter was $76 million. Capital expenditures were $12 million. We paid our stockholders a cash dividend of $0.15 per share at a cost of $21 million. We also repurchased 1 million RHI shares during the third quarter at a cost of $27 million. In August, our board authorized the repurchase from time to time of up to an additional 10 million shares of the company's common stock. There are approximately 12.6 million shares still available under this board-approved stock repurchase plan. We were pleased with the company's operating performance during the third quarter. For the ninth consecutive quarter, U.S. staffing revenues saw double-digit year-over-year growth rates. In addition, global operating income grew by 31% with higher gross margins, lower selling, general and administrative expense ratios and strong Protiviti results. Now turning the call over to Keith Waddell for a more detailed review of our third quarter financial results.

Thank you, Max. As you noted, third quarter revenues were $1.03 billion, a reported increase of 5% over last year. On a same-day constant currency basis, global staffing revenues increased 8% year-over-year with the U.S. growing by 12% and international locations declining 1% on this basis. U.S. staffing revenues were $674 million on the third quarter, while international staffing revenues were $240 million. We have 351 staffing locations worldwide, including 103 locations in 19 countries outside the U.S. We calculated 63.3 billing days in the third quarter compared to 64.1 days in last year's third quarter, the effect of which was a 1.3% reduction in year-over-year staffing growth rates in the third quarter. The current fourth quarter has 62 billing days. Currency exchange rates reduced third quarter 2012 sequential revenues by $1 million and third quarter year-over-year revenues by $19 million. This had the effect of reducing year-over-year staffing growth rates by 2% in the third quarter. Earlier this year, we began providing a supplemental schedule with our earnings results. The supplemental schedule is a non-GAAP financial measure that shows year-over-year revenue growth rates for each of our staffing lines of business on a reported basis, as well as same-day constant currency basis. It further divides the data between U.S. and non-U.S. operations. You can find the schedule in today's press release and in the investor center of our website. Third quarter global revenues for Protiviti were $119 million, including $93 million in the U.S. and $26 million outside the U.S. Year-over-year growth rates were 8% globally, with U.S. revenue up 10% and non-U.S. revenue remaining flat. 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. Third quarter gross margin in our temporary and consulting…

Thank you, Keith. Year-over-year growth rates for the staffing business in Protiviti remained solid during the quarter, particularly in the United States. International operations were impacted by continued economic uncertainty in parts of Europe. We have limited exposure in the hardest hit European countries, but the debt crisis resulted in a more cautious business climate overall, which did affect international operations. As we noted on last quarter's call, we are taking proactive steps to reduce our non-U.S. operating cost. Taking a look at Protiviti, as noted earlier, we were pleased to see solid year-over-year growth in this business. As was the case with our staffing divisions, growth in U.S. operations was largely responsible for the strong results. Information technology consulting and financial services risk and compliance services remain 2 of the fastest-growing business segments for Protiviti's services. In our staffing operations, our U.S. offices are seeing rising demand for professional staffing and consulting services. This was evidenced by solid growth rates for account temps in Robert Half Management Resources during the quarter. Demand for flexible staffing solutions also has remained strong. Temporary and contingent workers now make up 1.9% of total U.S. non-farm employment, up from a low of 1.34% in June 2009. Current penetration rates are approaching the all-time high level of 2% in April 2000, notwithstanding the high current U.S. unemployment rates. That U.S. unemployment rate declined from 8.1% to 7.8% in September. The unemployment rate for skilled college degree workers, which is our sweet spot, remains at approximately 1/2 that rate. This underscores the dual job market we have referenced many times. Our clients are facing candidate shortages in many of the fields in which we specialize. Helping them to hire this hard-to-find talent is what we do. Our professionals have both the time and expertise it takes for personal interviews, technical skills evaluations, reference checks, soft skills assessments and finally, making the best match with a company's unique culture. We do bring the clients a unique insight into candidate skills and personality fit gained through our proprietary testing processes, direct interaction with the people we place and most important, direct client feedback. At this time, Keith and I will be happy to answer questions. [Operator Instructions] If time permits, as usual, we will certainly try to return to you later in the call.

[Operator Instructions] And our first question comes from the line of Mark Marcon with R.W. Baird. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Congratulations on the strong results, particularly in light of what's happening internationally. I was wondering if you could just talk a little bit more about what you're doing in some of the international markets in terms of the cost reduction that certainly comes through in terms of taking a look at the SG&A as a percentage of revenue, but I'm wondering if you can just talk a little bit more about that. And then if you could also discuss 2 other things, one would be the perm revenue, what your expectations are over there for the fourth quarter that's implied in your guidance. And then lastly, Max, I appreciate the comments that you gave at the very end of your prepared remarks with regards to the value that you add. Can you talk a little bit about -- obviously, I think most of the people on this call are aware of that one report that came out from somebody who doesn't follow the industry about potential disintermediation. Can you talk just a little bit about the client profile that you have, particularly on the perm side on both domestically and international just in terms of the size of those clients, and how likely it would be that they might disintermediate you?

Okay. You had a lot of questions. I'll let Keith start.

Yes. So international market's SG&A. First of all, if you look country by country, we still had very strong numbers in Germany that were up solid double digits. We were up year-over-year in Australia. The other European and other global markets did have negative year-over-year growth rates, which were expected. As we talked about last quarter, we have more intently focused on our SG&A cost outside the U.S. They again did a very good job matching their cost structure with their revenues. We would expect that to continue into the fourth quarter. We are reducing headcount where the revenues dictate. By the same token we are investing headcount in the countries where that makes sense, principally Germany. Regarding perm revenue expectations for Q4 internationally, understand that unlike Q3 where the August holidays have an impact disproportionately on perm non-U.S., you have a longer quarter in the fourth quarter. That said, there's always uncertainty about December with clients running out of hiring authority from a budget standpoint. If you look historically, perm, globally, U.S. and non-U.S., in the fourth quarter, is flattish to slightly down sequentially with the third, and our guidance wouldn't be that different. This issue around disintermediation, client size, et cetera, so I'll get to the clients -- the easy part first, is our client size, in our sweet spot, is 75 to 100 employees. That client group, for the most part, chooses not to have the fixed cost of carrying their own recruiters and instead, outsources that to us on a risk-free contingency basis. And the social media opportunities of the last few years haven't really changed that. But let me back up a little and just to make sure we level set and everybody's talking about the same information, first of all, with respect to our…

Mark, I think Keith pretty much said it all. There's not a whole lot to add. I would mention that with respect to the temporary business, when Keith referred to co-employment risks, you might remember that Microsoft paid over $100 million in damages when they attempted to manage their own temp pool. They got in trouble with the IRS and had all sorts of other legal issues. I think surveys of HR managers will convince you that at companies large, small and in between, there's no desire to try to manage their own temp pools. And you'll find that virtually almost no temps are recruited via social networking sites. Again, I think there's also a misunderstanding about the percentage of our net income that comes from our permanent job business. As Keith noted, it's more like 13%. I've talked to some investors that think it's half and so forth. But I think Keith laid out the case pretty well. I -- my personal opinion is you'll continue to see our permanent job business do very, very well. And you'll find that just as the job boards didn't seem to hurt us, nor have the social networking sites. And in fact, they're probably helping us. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Everything you just said is consistent with my following of the industry for the last 18 years so including when the first round of the job boards came around and the same sort of discussions. The one question that I do think is legitimate is just what percentage of the perm business would come from larger clients? I'm talking about FORTUNE 1000 clients.

Yes, Mark, just as on the temp side, we focus on middle market companies. The same is true on the perm side. Might it be slightly larger on the perm side than temp? Yes. But it's a relatively small percentage even on the perm side. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: So somewhere in that 20% to 30% range?

Yes. Remember that on the perm side, with larger companies, they're more apt to have their own HR recruiters. Mark S. Marcon - Robert W. Baird & Co. Incorporated, Research Division: Right. But that's precisely the reason...

Therefore, they're less -- they've always been less apt to use our services, which has not been our focus or sweet spot.

Sometimes when the larger companies [indiscernible] markets for harder-to-fill positions. What I think gets lost in the discussion sometimes about both agencies, social networking sites and so forth is that what's really expensive are not agency fees. What's expensive is hiring the wrong person. And again, as Keith said, we have a no-cost contingency approach. If we don't fill the order properly, we don't get paid. So we're a pretty attractive alternative for a lot of companies. The bulk of that, again, is our small to mid-size client base. But larger companies will use us sometimes for harder-to-fill assignments.

Our next question comes from the line of Sara Gubins with Bank of America Merrill Lynch.

Could you talk about what you were seeing in bill rate trends? And if you could talk about -- in terms of any pay rate inflation that you might be seeing in the U.S., I'm particularly wondering given that it is, in fact, a relatively low unemployment rate for a college professional.

So bill rate trends globally, our bill rates were up 0.2% year-over-year. And that's down about a point from last quarter. That said, that's currency impacted and it's non-U.S. impacted such that in the U.S., we've still got low- to mid-single digit year-over-year bill rate increases we've enjoyed for some number of quarters. As to pay rate information, given lower white-collar unemployment, there clearly are some positions where there are supply shortages, notably some tech positions. In accounting/finance, senior accountants, financial analysts would be more in demand. And where there's somewhat short supply, frankly, that's usually an environment where we add even more value, where we're able to source that where others aren't and charge for it accordingly.

Okay. And then just as a separate follow-up, really impressive reacceleration in Protiviti's revenue. Could you talk about what you're seeing in terms of the flow of projects? Do you think that kind of growth rate is durable? And I'm wondering if the fourth quarter flow should be helped by internal audit projects flows?

So Protiviti revenue, seasonally the third quarter is typically its best. That has happened again. We were quite pleased with how it's gone with internal audit, with financial services risk and compliance and with IT, security and asset management. So it's the same solutions that we focused on now for some quarter, performed quite well during this quarter. In addition, we've gotten more and more traction going to market together with our staffing divisions where Protiviti manages the project for the client and many of the arms and legs are provided by our staffing division consultants. So good, solid quarter for Protiviti. The fourth quarter, because of the holiday impact, which is somewhat greater in Protiviti than for staffing, where many of its clients take the entire period between Christmas and New Year's, there's typically a larger fourth quarter holiday impact for Protiviti. And that usually shows up in slightly lower sequential revenues. But year-over-year, we still feel good, and Protiviti is very optimistic.

Our next question comes from the line of Andrew Steinerman with JPMorgan. Andrew C. Steinerman - JP Morgan Chase & Co, Research Division: Max and Keith, I wanted to jump in on the 7% growth for flex staffing in October, same-day basis constant currency year-over-year. Keith, that's for worldwide, right? And if you could, so at 7%, really, it's not that much different than what you just grew in the quarter overall. Does the business in October feel quite as good as it had kind of earlier in the summer?

The short answer is yes, and I would make these observations. I would say that intra-quarter trends in the third quarter were better than they were in the second quarter. If you remember, in the second quarter, there was a consistent deceleration such that we grew 13% during the quarter, and then post quarter, it dropped down to 8%. In the third quarter, we dropped down somewhat in July. It's been consistent thereafter such that for the third quarter, we've reported 8% growth, and we're out of the gate at 7%, roughly the same number. So we do feel that the trends are solid as we speak. Clients have gotten a little more cautious. It is a modestly tougher market condition. There is economic uncertainty that's impacting our clients. But that said, the intra-quarter trends and post-quarter are better this quarter than they were a quarter ago. Andrew C. Steinerman - JP Morgan Chase & Co, Research Division: Cool. And also, Max, you said something quickly in your last remarks about flex staffing penetration coming back to a high. I hope -- just to make sure we got your point right, you, in no way, were suggesting that penetration rates for flex staffing or for professional flex staffing was peaking, right?

I think I was trying to imply we're going to go past those peaks, at least that's our view. If you think about it from our perspective, we feel like we've been doing very well in a very difficult labor market. So we would expect if and as the labor markets improve, and we get some clarification in terms of the fiscal cliff and all the other things going on out there, that frankly, the converts to the use of flexible staffing that have been the silver lining of this recession will come into play, and that you'll see new penetration and new peak rates achieved. That's our hope.

Our next question comes from Tim McHugh with William Blair. Timothy McHugh - William Blair & Company L.L.C., Research Division: Yes. Maybe just at a high level, can you talk a little bit about kind of the incremental profit margins here? It seems during the last couple of quarters, in particular, this quarter on, even on slower growth, the pace of margin expansion on a year-over-year basis is picking up. Is that just leveraging some of the tech investments you've made or more aggressively managing international as you talked about, or are there other factors we should think about?

Well, Tim, we have expanded our margins. We're pleased with that. We've continued to expand our gross margins starting with our pay bill spreads. That's certainly a major contributor to the higher incremental margins. In addition, we've done a better job at controlling our costs, starting with non-U.S. But we have leveraged some of the earlier investments we made in tech, all of which have our operating margins approaching prior levels, but by no means peaked out. Again, as we've said on prior calls, look at what we're doing at high 7s, low 8 unemployment rates, and imagine what we could be doing with typical mid-cycle unemployment rates, which are much lower. But I think our margin recovery in this cycle so far is one of the highlights of how we performed. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay, that's great. And the gross margin here, what's your outlook kind of moving into the fourth quarter? I know sometimes you'll have adjustments to the accruals. And I guess just in the context of the bill rate, at least on a global basis flattening out, can you continue to expand that?

Well, on a sequential basis, our modeling would say that gross margins would be flattish. But that still gives you growth year-over-year. So no big changes in the fourth quarter. You always have the -- to the extent you've estimated unemployment, FICA, workers' comp, those things all get trued up at the end of the year, which will result in little adjustments, but we don't think anything big's coming of that. Timothy McHugh - William Blair & Company L.L.C., Research Division: Okay, and last, just numbers question quickly, the tax rate. Was that improved profitability internationally, or was there something unusual that brought it down to 39% and then kind of what should we think about going forward?

Well, depending on whether you're comparing to a year ago or to the last quarter, it goes down or up. But I think the important thing is, as we look forward, we think the tax rate for the fourth quarter will be in the ballpark, around the same level that it was in the third quarter. That said, there's always -- I mean, there's more variability, let's call it a point or 2 in either direction based on the composition of your income from a country standpoint, and whether there are any settlements with taxing authorities. There's a lot of moving parts when it comes to the tax rate. But I don't think there's going to be any major change from the third quarter just ended to the fourth quarter.

Our next question comes from Paul Ginocchio with Deutsche Bank.

Just 2, first on Germany -- I'm sorry, France, Belgium, U.K., your major European operations. Can you talk about which is the most difficult and if things are stable there over the last couple of months? And then just looking at your SG&A growth over the last sort of 5 quarters, it's been decelerating. Do you think we're now -- on a year-on-year growth basis, it's been decelerating, so we try to look at it organically. But do you think we're sort of at the growth rate now that where SG&A growth starts to accelerate again?

All right. So let me -- I'm writing here. The -- as to Germany, France, U.K., Belgium, the most challenged is the U.K. consistent with prior quarters, combination of tougher market conditions, and we walked away from lower margin business. The sense is the U.K. has stabilized and maybe bottomed out, only time will tell. Belgium, slightly negative this quarter for the first time. Those market conditions clearly impacted by the debt crisis there. France, a little better than Belgium from a growth rate standpoint, not significantly different. And then Germany, as I said before, just solid finance and accounting, as well as tech, temp, as well as perm. As to SG&A growth decelerating, so now I guess we're talking dollars and not percentages of revenue. As we move forward in time, as our revenues grow, we should cover our fixed cost better, be it administrative compensation out in the field, be it the back office central cost out here in California, which would say you get some operating leverage from future revenue growth. I'm confusing myself a little bit about accelerating, decelerating, depending on whether we're talking percentages or dollars. But I guess the point is, we should get more operating leverage as a percentage of revenue as we move forward and grow our revenue as we expect our headcount additions to swing, as do revenues, and not necessarily make outsized headcount investments on the one hand or reductions on the other.

Yes, I was trying to get whether you were just sort of following your revenue trends, or you were coming to the end of an investment cycle. I didn't know which was the bigger driver.

I'd say we're following our revenue trends. The end of the investment cycle, we are always investing according to the revenue trends based on productivity as we've done forever. So I would say we will continue to invest proportionate to our revenue growth, or we'll continue to reduce proportionate to our revenue decline, depending on the country that you're talking about.

Our next question comes from Jeff Silber with BMO Capital Markets.

Just wanted to circle back quickly to Protiviti. You guys did a great job expanding operating margins despite the fact that gross margins fell. Can you just talk about why gross margins contracted? Is that something we should expect going forward?

The seemingly anomaly there, Jeff, is actually pretty easy to understand. You have a much higher percentage of contractors from staffing on Protiviti engagements than we did a year ago, and you get a lower gross margin from those individuals than you do on Protiviti full-time individuals. So given the mix shift, the overall gross margin declined a bit. But that gets more than made up at the operating income line, and we want as much of that as we can get.

All right, got it. Just a couple of quick numbers questions. Just in terms of what's embedded in your guidance for share count for the fourth quarter and what we should expect for capital spend.

Share count should be flat to down a bit as our repurchases follow us in the share count. CapEx, we're talking around $15 million, which gets you to $50 million for the year, which is a little light of what we expected, but it's more timing than it is any absolute reduction. But some of that will carry over into next year.

All right, great. And then just jumping ahead, I know you're not giving first quarter guidance. Is there a -- are there fewer billing days in the first quarter 2013 because we're lapping the leap year?

Okay. So first quarter 2013, I don't have in front of me -- I'll just have to get, but we haven't -- we actually go through this calculation based on actual experience around holidays. The issue is the day before a holiday, the day after a holiday, based on the day and week of the holiday, based on our history, how many effective days do we have? So it's not as easy as looking at the calendar and figuring out what the billing days are. And we just haven't made those calculations yet.

Our next question comes from Anj Singh with Crédit Suisse.

Just a couple of quick questions from my end. I noticed that your Robert Half Technology business declined the most on a relative basis, Q-over-Q and year-over-year. I was wondering if you can talk about what drove that weakness and just generally if you could talk about pockets of strength or weakness by a vertical market within your U.S. client base.

Okay. So first of all, on a same-day constant currency basis, Tech sequentially grew the fastest during the quarter because a year ago, it also grew the fastest. On a year-over-year basis, it had the toughest comparisons. So while its year-over-year growth rate looks lower, it's because it had the toughest comparisons of the group. If you just look quarter-on-quarter, second quarter versus third, you adjust for currency and billing days, tech grew the fastest. As to pockets of vertical strength, we are very diversified with our middle-market client base by geography, by vertical, and there's no vertical that's driving our growth.

Okay. And just -- I know last quarter, you gave out a percentage of revenue mix internationally and by European countries. Would you be able to provide that again?

Sure. It's not that different, and we will probably post updates within the next few weeks to our website, but I'll tell you what we're going to show. So international overall is 27%; Europe would be 13%, and that 13% would further break down 5% Germany, 4% Belgium, 3% France, 1% other. The most noteworthy thing there is for the first time ever, Germany is bigger than Belgium, both in terms of revenues and in terms of operating income, which is no surprise given the growth rates we've talked about. So that's Europe. Outside of Europe, you've got Canada, which is 6%; Asia-Pac, which is 4%; and the U.K., which is 4%. So no major swings there relative to a quarter ago.

Next, we have Gary Bisbee with Barclays.

I guess the first question, I'd like to go back for a second to the SG&A. The year-over-year growth in absolute dollar terms was 0 or flat for the whole company. I'm sure that part of that was the FX impact. But following on Paul's question, it's decelerated sharply. Just based on the revenue guidance and how you're thinking about this, are we likely to see SG&A costs in aggregate begin to grow again, or is this sort of sustainable for another quarter or 2 based on how you're thinking about the revenue outlook?

Well, our field compensation plans are highly variable and tied directly to revenues. So you first have to start with your revenue assumption to determine that cost component. Outside of that, just as we focused on SG&A costs this quarter, we plan to continue that into the fourth quarter. And traditionally, in the fourth quarter, we do pretty well with our SG&A cost. So we're cautiously optimistic that when we talk a quarter from now, you'll be similarly pleased with our SG&A costs, either because, on an absolute basis, they were flat to down again or because revenues grew more than you expected. We paid our people more.

Okay, fair enough. And then just a follow-up, can you give us a sense as to how to think about the trend line of activity on the international business? I mean, does it feel like it's getting worse and the growth rate could get worse for a couple of quarters, or is it -- is enough of it like Germany doing okay, that it's likely to be weak, but stabilizing, and not seeing the pace of decline accelerate?

Well, if you look at the last few quarters and the trend line in the IT business, clearly, the growth has decelerated. So in this quarter overall, it was down 1%. Last quarter, it was up 3%. Quite frankly, that's less deceleration than we would have expected for the third quarter. Into the fourth quarter, our people are cautiously optimistic that it's leveled out. But I think it's prudent to consider a similar amount of deceleration into the fourth quarter that we've seen in the third. The economic conditions haven't changed dramatically. We're not in free fall. It's not panic time in the countries we operate, which are mostly northern Europe. But I think it would be reasonable and prudent to model further international deceleration into the fourth quarter. And, hopefully, we're all pleasantly surprised.

Next, we have Randy Reece with Avondale Partners.

Avon calling. I was wondering, the year-over-year change in temp staffing gross margin, how much came from geographic mix shift. How much came from the faster growth of Management Resources and Tech versus the rest of the business?

So the pay bill spread strengthening was pretty broad-based in the U.S., clearly, non-U.S. when you say geo, if we're talking U.S. versus non-U.S., it's totally A Tale of Two Cities there. But as I said in the prepared remarks, we also benefited from modestly lower fringe benefit cost, which are primarily how many temporaries qualify for holiday pay, which moves around within the course of a year. So those -- that wasn't necessarily MR or Tech. So I don't think you can look at the mix shift as principally driving the improvement in gross margin. But instead, a more broad-based pay bill spread expansion as well as modestly lower fringe benefit cost, which is also pretty broad-based.

Also, can you give the depreciation expense for the quarter?

Depreciation for the quarter, hold on. Let's see. It's $12 million.

Next, we have Tobey Sommer with SunTrust.

I was wondering if you could give some commentary specifically with regards to the IT growth rates and kind of bill pay rate spreads domestically. Were they -- you do give extra information in the tables over the last couple of quarters, I appreciate that. But I was wondering if you could give commentary specifically on the IT portion?

Well, as I think we discussed last quarter, we don't break out our lines of business between U.S. and non-U.S. But I would say that the technology U.S. trend isn't that different than the overall trend, U.S. versus non-U.S. And the comments I previously made about sequential versus year-over-year and tougher comps apply in spades to the U.S.

And could you give us a sense of your capacity now in your recruiter base? Because I guess you did show some impressive SG&A control, I think in the quarter, that contributed to good margins. And I'm just kind of -- want to get a sense for what kind of positive revenue growth, like kind of reacceleration may require you to kind of shift and start adding more resources.

So there were 2 types of investments we made in Tech. One, I'll call field managerial infrastructure, which would be branch managers and above. That was largely a 2- to 4-quarter phenomenon that we continue to lever to this day. The other were recruiters and account managers on the ground. We made outsized investments in those particularly early. They've grown into the size of their businesses such that as we continue to grow in Tech, we will need to add more Tech recruiters. However, we will not need to add more Tech managerial infrastructure, so you -- we would still expect to see operating leverage in Tech even as we continue to add recruiters commensurate with revenue growth.

Next we have Kevin McVeigh with Macquarie.

Keith, it sounds like the revenue guide is pretty similar to Q3 yet you've 1 fewer day sequentially and going into kind of Q4, some holiday impact. Can we kind of assume things are getting a little bit better, or is it just a function of additional contribution from different regions? Just any thoughts around that. Again, it sounds like there's 1 fewer billing days. Is there anything to read into there?

So it's true that our revenue guidance for Q4 is the same as Q3, and it's true that notwithstanding the same revenue guidance, the earnings guidance is $0.02 higher at the low and at the high. And so what we're doing is, we're rolling forward the higher gross margins that we actually experienced in the third quarter. And to some degree, we're rolling forward the lower SG&A costs, neither of which we anticipated in the third quarter to the extent that were actually realized. So said differently, the better-than-expected profitability in the third quarter, to some degree, got dialed into our fourth quarter guidance on the same revenue base that we -- the range of revenues that we guided last quarter.

Understood. And then just -- as far as I can remember, this is the first time where there's kind of been a decoupling between Europe and the U.S. in terms of overall GDP. How does that impact the way you're managing the business? And what's kind of been some challenges around that?

Well, the challenge has been that the revenues outside the U.S., given economic and market conditions, are slightly declining, and we're having to adjust our cost structures accordingly. But that's something we've now dealt with, with a few quarter -- for a few quarters. I think our teams outside the United States are doing a very nice job doing that. And, oh, by the way, it's actually tougher to adjust downwards your headcounts outside the U.S., and they're still doing a nice job with it. So that's the biggest differential between how we're managing the U.S. and how we're managing Europe.

And as we are approaching the end of our time today, our last question comes from Jennifer Huang with UBS.

Just a follow-up on the expense question one more time. Can you comment on how much of your SG&A expenses are more or less variable, sort of like compensation, versus fixed?

It's somewhat difficult to answer that question crisply because it depends on your time horizon. So is the cost of one of our recruiters, one could say, well, their salary is fixed and their incentive pay is variable. But if in your time horizon, you're willing to reduce that headcount, the whole cost is variable. So we've shied away from fixed versus variable because our history and our intent is to manage our headcounts as closely as we can to the top line, which makes it more variable than the salary incentive pay mix would otherwise indicate.

Okay. And maybe in a slightly different way, I noticed that the office count actually was flat in Europe and was down by 2 offices in the U.S. Are there opportunities as you look forward given the environment in Europe to manage the office counts down in Europe for -- in the relatively near term?

We have many fewer offices than most staffing firms. We cover a broader territory than most staffing firms. The -- while there might be some satellite locations that we'll consolidate in Europe, there's not going to be a major reduction in the number of locations in the U.S. or in Europe.

Stated differently, since we deal with higher skilled workers, they are readily willing to travel greater distances between offices. We don't have to have offices every few blocks, so to speak, as some light industrial firms might. So that's why we don't need as many offices.

Okay. And then last question on -- just digging deeper into Germany. You've obviously seen very solid growth there. Do you think the growth that you're seeing is a function of the investments that you've made in the past year or so, or are there actually pockets of strength within the German economy that is also supporting this double-digit growth rate? And if it's the former, can you maybe comment on where you're seeing sort of market share shift in your favor?

Well, the 2 are very related because Germany, I think virtually everybody would agree, is the big winner in Europe, it certainly -- the markets there are much stronger than they are in most places. For that reason, we've been willing to invest. We've made outsized investments in Tech because we didn't have much of a tech presence there. So because the market was stronger, we made more investments. Because we made more investments, our growth rates were higher. And as we sit here today, our intention is to continue to make investments in Germany because our market outlook there remains very positive.

And we have a very strong management team and, obviously, our goal is to gain market share everywhere, and we hope that's happening in Germany, but that's hard to measure. But we do have a very good team on the field. That was our last question. Keith and I would like to thank everyone again for joining us on today's call.

This concludes today's teleconference. If you missed any part of the call today, it will be archived in audio format in the investors center of Robert Half International's website at www.rhi.com. You can also dial the conference call replay. Dial in details and the conference ID are contained in the company's press release issued earlier today.