Hello and welcome to the Robert Half Second Quarter 2014 Conference Call. Our host for today’s call are Mr. Max Messmer, Chairman and CEO of Robert Half, and Mr. Keith Waddell, Vice Chairman, President and Chief Financial Officer. Mr. Messmer, you may begin.

Thank you and hello, everyone. We appreciate your time today. 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 they are subject to risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Some of these risks and uncertainties are described 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 statements made on today’s call. For your convenience, we have published our prepared remarks for this conference call on the Robert Half website at www.roberthalf.com. Simply click on the Quarterly Conference Calls link from the home page of the Investor Center. Now, let’s discuss the second quarter. Second-quarter revenues were $1.16 billion, up 10% from the second quarter of 2013. Income per share was $0.55, up 21% year-over-year. Cash flow from operations was $105 million during the second quarter. Capital expenditures were $11 million. We paid an $0.18 quarterly cash dividend to shareholders on June 16, 2014, at a cost of $24 million. We also repurchased 500,000 Robert Half shares during the second quarter, at a cost of $21 million Approximately 6.8 million shares remain available for repurchase under our board approved stock repurchase plan. We were pleased with Robert Half’s performance in the second quarter. The company’s growth was broad-based and reflective of improving labor markets and higher global demand for our professional staffing services. Year-over-year revenue growth rates accelerated nicely during the quarter, both in the United States and in our international operations. Protiviti also continued to post very strong operating results. The highest sequential and year-over-year revenue growth rates were reported by our permanent placement operations and Protiviti. This was Robert Half’s 17th consecutive quarter of double-digit net income and earnings-per-share growth on a year-over-year basis. Return on equity, on an unlevered basis, was 31% for the quarter. Now, I’ll turn the call over to Keith for a more detailed review of our second-quarter financial results.

Thank you, Max. Global revenues were $1.16 billion in the second quarter. This is up 10% year-over-year on both a reported and same-day, constant-currency basis. Global staffing revenues were up 9% on a same-day, constant-currency basis. U.S. staffing revenues were $772 million in the second quarter, up 10% on a same-day basis. International staffing revenues were $242 million in the second quarter, up 4% on a same-day, constant-currency basis. We have 342 staffing locations worldwide, including 99 locations in 18 countries outside the United States. We had 63.2 billing days in the second quarter, compared to 63.5 days in the second quarter of 2013. This had the effect of decreasing reported year-over-year staffing growth rates by 0.6%. The current quarter has 64.2 billing days, compared to 64.0 days in the third quarter a year-ago. Currency exchange rates increased second quarter year-over-year staffing revenues by $4 million and reported staffing growth rates by 0.4%. The strengthening of the Euro and Pound Sterling were partially offset by weaknesses in the Canadian and Aussie dollars. We provide a supplemental schedule of our earnings release that shows year-over-year revenue growth rates for our various staffing lines of business on a reported basis, as well as on a same-day, constant-currency basis. The schedule 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. This is a non-GAAP financial measure. We provide it to give you information on certain revenue trends in our staffing operations. Global revenues for Protiviti were $151 million in the second quarter, with $122 million in revenues in the United States and $29 million in revenues outside the United States. Global revenues for Protiviti were up 14% year-over-year on a same-day, constant-currency basis, with U.S. revenues…

Thank you, Keith. As noted earlier, we were pleased with the company’s performance during the quarter. Revenue growth was broad-based as a result of improving labor markets in many of the countries where we do business. We’ve seen notable improvement in Europe, for example. In the United States, the unemployment rate is at its lowest level since September 2008. The number of temporary workers as a percentage of total employment reached an all-time high in June, which means that companies are using temporary professionals as part of their staffing mix to a larger extent than ever before. The demand for skilled talent continues to outpace the supply in many of our specialty areas. Our strength is in helping companies locate and hire this hard-to-find talent. As a result, we saw greater demand for our professional staffing and recruitment services in the second quarter. This was the case among our small and midsize clients, in particular. These firms often lack an internal human resources function and turn to us for help filling their open temporary and full-time positions. As noted earlier on the call, Protiviti also had another excellent quarter. We were pleased to see continued growth in IT consulting, risk and compliance, and internal audit, in addition to Protiviti’s other service areas. Protiviti has an excellent reputation in the marketplace and has developed a loyal client base. Better market conditions and a stricter regulatory environment also are contributing to the higher demand for Protiviti’s consulting solutions At this time, Keith and I’ll be happy to answer questions. We would request that you please limit yourself as usual to one question and a single follow-up. If time permits, we will certainly try to return to you later in the call if you have additional questions. Thank you.

(Operator Instructions).Your first question comes from the line of Gary Bisbee with RBC Capital Market. Your line is open.

Good afternoon and congratulations on this strong quarter and outlook. If we just take -- I know you gave one quarter guidance but if we were to think about the next couple of years, you have revenue that’s approaching the prior peak levels. Your temp margins still are at a reasonable amount below those peak margins, but how do we think about the ability for margins to trend, if we were to continue to see healthy revenues growth for a while? Are there any puts and takes versus the last cycle costs that have changed anything about the environment that would make it unlikely to exceed the prior margins or any commentary that will be helpful?

Sure. So, on the temp side our current margins are about 50 basis points below peak. That’s notwithstanding, that conversions are at the lower end of 3% to 5% range, notwithstanding a little strength this quarter. So even to the midpoints you got 100 basis points of upside there. The fringe costs we have on our temporary payroll are high, now by 30 to 40 basis points primarily because of unemployment tax rates that are high post in the downturn that typically trail off as things improve. Further, as the labor markets improved, there’s typically wage pressure, that wage pressure so far and prior recoveries has allowed us to pass through not only that additional costs, but to expand our pay bill spreads as well. So, in our mind we have three sources of additional temp gross margin as we go forward. At the SG&A line, the traditional fixed cost, rent depreciation, administrative compensation, you typically lever as you move forward into recovery. On the perm side, we had nice 20% plus operating margins this quarter. If you look back in history, we’ve had periods of sustained operating margins of greater than 20% like at 2005, 2006, 2007. So we do think operating margins in the 20 plus percent range for permanent placement are sustainable and might even expand a bit as you lever the fixed cost of our recruiters, as you grow revenues. And then finally on Protiviti, while Protiviti’s operating margins expanded this quarter to 8.2%. Our objective is to get them into at least double-digits. We saw that double-digits last quarter -- excuse me, in the fourth quarter of last year, we’ve seen a nice progression so far this year, and our hope is that we get to a double-digit annualized operating margin in Protiviti. So quite frankly we’re pretty optimistic in all of the major segments of our business and as things improved not only will we benefit from the operating leverage of the additional revenues relative to our fixed costs, but we have other very discrete sources of additional operating margin improvement as well.

Thanks for all that color.

You next question comes from the line of Andrew Steinerman with JPMorgan. Your line is open.

Good evening, gentlemen. I wanted to ask about internal investment, your own staff. I remember in the first quarter you made some headcount additions. In the first quarter, it was more kind of holding steady on headcount additions, and I wondering where you stand on that now. Are we adding to our internal resources and if so what would be the SG&A effect when we get to the third quarter?

So, Andrew you’re correct that in the first quarter we held headcounts fairly steady, although towards the backend of the first quarter, we did start adding more aggressively to staff. Given the revenue performance the demand we’re now seeing, we do intent to ratchet up our headcounts in the second quarter. From a SG&A and margin impact that will have a modest negative impact on our incremental operating margins and that’s measured on a year-over-year basis in Q3, but it won’t be dramatic. So we still think we can report very nice incremental operating margins in Q3 not withstanding that we’re going to ratchet to headcounts so given the strong demand environment that for quite frankly we are seeing on a global basis. Right. Andrew Steinerman – JPMorgan: And I just think you just mentioned any skill set and is it more temp versus perm?

Well the skill sets that are the tightest from a supply standpoint are in the technology segment, the application developers, the data base, it’s the higher level development side of technology and Management Resources, it’s the higher level financial analysts, business systems analysts anything to do with regulatory compliance. So we are clearly beginning to see more chronic skill shortages that the past would say it’s in those environments where we do best because we get our permanent placement fees and its harder for our clients to find candidates either full time or on a temporary basis, that’s good for our temporary division while they feel there was orders temporarily while clients look for full time. Andrew Steinerman – JPMorgan: Okay. Perfect, thank you Keith.

Your next question comes from the line of Mark Marcon with Robert W. Baird. Please go ahead.

Good afternoon and congratulations on the great results. Just wondering if you could talk a little bit about two things. One, the trends that you are seeing internationally you mentioned Europe was stronger if there’s any additional color that you can provide in terms of the countries that you are seeing that in. And then secondly, how we should think about RH Technology in terms of the potential growth rates that you could achieve there, that’s the only area that didn’t accelerate and I was wondering if there is anything specific that’s occurring there, the results have been fantastic.

Okay on the international front we saw particular strength in the U.K. and on Australia we saw accelerating topline growth in Belgium, in Germany in France the only of our major six international countries that did not see acceleration was Canada that decelerated somewhat the labor markets up there aren’t quite as robust as they are in the U.S. But five of our big six non-U.S. countries all had nice accelerating growth and that accelerating growth is baked into our guidance to continue accelerating even more. As to Robert Half Technology, the growth rates while they did decelerate slightly from 9.5% to 8.5% they weren’t bad clearly technology is in the area that is in most supply constraints. We felt like we got a little bit behind with the headcount and our recruiters and so part of what we did late first quarter and into excuse me, late second quarter and into this quarter is hiring more recruiters in technology as well as adding to headcount in their other divisions. But we felt like we got a little bit behind adding to recruit their internal staff which impacted our growth rates attached.

Great. Thanks for the color.

Your next question comes from the line of Sara Gubins with Bank of America Merrill Lynch. Your line is open.

Thank you, good afternoon. The midpoint of your guidance suggest about 11% same day revenue growth which looks like it’s pretty close to where temp was in July but over above where perm was. Does the guidance expect perm to improve versus what you saw in July, or is it you are keeping it where it is, and maybe strong growth and Protiviti will make up the difference?

Well so I wont’ get too carried away with a couple of three weeks of post quarter performance. I think if you go back and look in time and compare what hindsight, how did we start a quarter versus how did the whole quarter pan out while temp is -- the early start is more predictive than is perm, neither one of them is terribly predictive. When we did the midpoint of the guidance it shows some acceleration from what we reported and Q2 temp and perm, but not as much acceleration as is implied by our July start in temp and not the deceleration that would be implied if you look at our July start in perm. But again, if you go back and look with the benefit of hindsight, you would see that our post quarter perm results are the least predictive.

That makes sense, thanks. And then, turning to Protiviti 18% growth in the U.S. on a 10-day basis is very impressive. Can you talk a little bit more about where that’s coming from. And maybe what percent of Protiviti work is now being done in conjunction with one of the temp groups? Thanks.

Well Protiviti was very strong in the quarter and the nice part of that is the strength was very broad-based, internal audit did very well. IT consulting including security business continuity, application controls did very well and in financial services risk and compliance regulatory anti-money laundering, model validation they all performed quite well and it was very broad-based, and they were very encouraged by. As far as the work done in conjunction with our staffing divisions while we don’t publish that exact percentage, we can tell you that the picture there is quite positive. We have an ever-growing relationship between staffing and Protiviti that go to market together. Protiviti relies on staffing to provide staff when it doesn’t and otherwise fill the positions internally. If you’ll note Management Resources was particularly strong this quarter more so than any other division. Taking a page from Protiviti’s playbook they had a lot of success in the financial services risk and regulatory area primarily anti-money laundering, so the strong demand that we see in Protiviti spills over to the strong demand we see in Management Resources as well. So we are very pleased not only with how Protiviti is doing in its own right, but also how it’s partnering with our staffing divisions in going to market.

Thank you.

Your next question comes from the line of Jeff Silber with BMO Capital Markets. Please go ahead.

Thanks so much. Sorry to focus on a small negative, but it looks like your Protiviti gross margins declined slightly on a year-over-year basis. Can you just give us a little bit of color why that happened, and is that something we expect to continue for the rest of the year?

So Jeff that happened because Protiviti has added some higher level Managing Director to their cost structure in these high areas of their practice and in the short term that depresses gross margin we think in the long term will do just the opposite. So for Protiviti to get the double digit operating margins that it aspires to, that’s got to come primarily from expanding gross margins. And we are very committed to seeing that happen but in the short term sometimes you make investment hires and particularly at the Managing Director levels that depress your reported gross margins a little bit.

Okay. That makes sense. Just the quick numbers questions. What are you budgeting for capital spending for the year and what should we expect for tax rates?

The tax rates would be in the 39% range maybe a little higher and maybe a little lower, call it plus or minus half a point. And on the CapEx side we typically back load our CapEx, so we spend $23 million so far I think the range we gave was $50 million to $60 million earlier maybe would be towards the low end of that range, but that’s in a range.

Okay. Great, thanks so much.

Your next question comes from the line of Tobey Sommer with SunTrust.

Thank you very much. I am interested to know what you feel like the bill rate environment may materialize, and how it may evolve over the next couple quarters, given that the demand environment is improving. And how you feel about your ability to harness those rising bill rates, and retain them in your gross margins versus prior cycles? Thanks.

Okay. So the good news on Bill rates is that whereas last quarter bill rates were up 2.6% year-over-year, this quarter bill rates are up 3.5% year-over-year. So we are beginning to see some wage inflation. Typically that’s a good thing for our business and our expansion of gross margins as we talked about earlier. We’re optimistic that higher wage rates mean higher bill rates, which means, higher pay bill spreads. If you look back in the last cycle, we had four or five years of uninterrupted mid single-digit inflation that allowed us to expand our pay bill spreads and we haven’t even gotten into that sweet spot yet. We’re certainly moving into right direction. If you look at the last three quarters, year-over-year we were up 1.7% then we were up 2.6% and now we’re up 3.5%, so its clearly going into right direction, but it still below the sweet spot that we’ve experienced in the past and when we’ve gotten to that sweet spot in the past, we stayed there four, five years. So we’re quite -- we feel quite good about that and we feel quite good about our ability to manage and hopefully expand gross margins as we move forward in time.

Appreciate that. In terms of your efforts on the technology side, are you satisfied the Company is keeping up with the market rate of growth, and do you have any intentions to substantially increase the number of recruiters you have there, or do you feel like you've been kind of feeding the fire there, with fuel over the last several quarters and years, so that you're in position to grow as you would like?

You’d always like more growth whatever it is and clearly technology, the demand is not a problem as we speak. The issue is recruiting the candidates. And as we said a few minutes ago, we got a little bit behind in adding to recruiters internally, and we’re ramping that up somewhat. It’s a long race rather than higher huge numbers and then digest them over time, our style is to do it more steadily as you go along. We are pleased with the progress we’ve made in technology. We feel like the demand that in prior years was primarily focused on larger companies particularly in application development has now drifted down to our middle market sweet spot, which gives us a unique opportunity. At the moment, demand isn’t the problem. The problem is getting the candidates. And as I said earlier, we’re in the process of adding to our recruiter base. But more growth is always better and what the market is for technology staffing services, for companies that service middle market companies who knows what that market is.

Thank you very much.

Your next question comes from the line of Randle Reece with Avondale Partners. Please go ahead.

Good afternoon. I wanted to talk about the level of conservatism of your guidance, over time. Just looking at the past few quarters, how have the moving parts changed in how you roll up your guidance? How many pieces are out-performing now? Is there some core that's driving the out-performance or have you seen a broadening of success?

Well I think for this quarter particularly its pretty broad based, if you look in the U.S., you like at temp, you look perm, you look at non-U.S., you look at temp, you look at perm, you look at Protiviti, quite frankly it just broad-based, as I can remember the out performance. But it changes quarter-by-quarter and every quarter we do our best to give a range of where we think we’ll perform and within that range we’ve done reasonable well.

There's a piece that I've a hard time understanding, and we all do, I guess. Within the brands, between U.S. and other markets, if there is a hot spot, or something that really blew out your expectations, and I would think Accountemps was it this quarter?

Well, I’d say it was two-fold. Accountemps was a very broad-based three yards and cloud of dust, every little small business, every market there was better demand. In Management Resources where the growth rate accelerate at the most, it was most related to risk and regulatory related assignments at some larger financial institutions that were more discrete and more limited to a smaller number of clients. But Accountemps was very broad-based led by Texas and California, but frankly virtually every market improved.

In Management Resources, do you have much participation outside U.S. in terms of regulatory demand?

We participate. We certainly don’t participate to the extent we do in the United States and we also have the greater possibility of collaboration with Protiviti with financial service firms in the US where we have more Protiviti exposure to financial services.

Within your guidance range for this quarter, is there more play in your assumptions for temp or perm?

More play, it’s hard to react to. perm seasonally is typically flat relative to the second quarter. Perm outside the U.S. typically is impacted by August in Europe which is a heavy vacation month. So perm overall is usually flattish. On the temp side, again the summary months are pretty much flat with the prior quarter. It starts to get better seasonally toward the end of the third quarter. So I’m not sure how to react to where there is more play perm is always a bit more volatile and harder to forecast than as temp, but that’s not unique now, that’s always been the case.

Yeah, I’m just trying to figure out how the heck I’m going to get into your guidance range. Thanks.

Be gentle.

Your next question comes from the line of Tim McHugh with William Blair Inc. Your line is open.

Hi. Thanks. I guess, just somewhat following up on some of the prior questions there, the Accountemps and strength in Management Resources, I guess, on the Management Resources side, how much of -- what's the length or the sustainability of some of the upside there, some of those large regulatory projects can flash and burn kind of quickly. Does it feel more sustained, or are there any large projects that we have to be aware of, that drove some of the acceleration there?

There are some large projects in Management Resources and the duration of those projects is unknown. So there is some risk that they fall off more discretely than our other projects typically would. I mean, as we sit today we don’t see that on the horizon, but the nature of the business is such that could be the case. But from an overall consolidated standpoint Management Resources isn’t going to move -- if one of those projects falls off its not going to moved overall needle in a huge way.

Okay. Is it fair to say it’s not on the order of magnitude of the mortgage related projects that you kind of just finish comping against or are they -- is it that big of an impact?

It’s not on that order of magnitude, but from Management Resources only standpoint, it definitely move the needle relative to that line of business.

Okay. And then as Europe is getting better here, how should we think about the profitability of Europe relative to the U.S. And I guess, in the context of how much room is there for leverage as that comes back as we think about that as a driver of margins in the next couple of years here. I mean, is there a fair amount of I guess, underutilized capacity that you can leverage as that bounces back?

Well I think the biggest upside is the fact that Europe we have more exposure to perm placement that we do in the United States. And Europe has more operating leverage inherently than is the case in temp. So as Europe improve, perm will improve and if perm improves you’ll enjoy the higher operating margins we get from the perm business. Further as Europe improves you’ll see more temp expansion in Belgium and in Germany where we get better temp margins than we do in our non-U.S. locations overall. So I do think there’s some margin expansion that we could get from Europe for the reasons I just mentioned. I wouldn’t however place a lot of weight on that we have a lot of excess capacity with our existing staff in Europe, because quite frankly we managed those headcounts fairly, aggressively in the downturn, so there’s not a huge amount of capacity utilization benefit to get as Europe improves. We would instead have to add heads, but probably not disproportionate to the revenues.

Okay. Thanks.

(Operator Instructions) Your next question comes from the line of Hamzah Mazari with Credit Suisse. Your line is open.

Hi. This is Anj Singh dialing in for Hamzah. I was just wondering on a broader level. If you can comment on the temp penetration rates, you spoke to earlier. We know they’ve reached or surpassed prior peaks without really a strong cyclical driver. I was wondering if you have view as to what sort of rates might be reasonable to expect in this cycle or what your general view might be as to what we might seen the cycle?

Without giving a specific percentage, we’ve long held that temp penetration rate recovery has been principally secular to this point. The percentage of new jobs represented by temp jobs is much higher; in fact, double what it was in the prior recovery. And we therefore think what is ahead of us is the penetration benefit you typically get from a cyclical recovery of which we’re seeing very little so far. So we’re quite bullish that temp penetration rates for the entire industry and for us more specifically have the potential to go much higher than where they are.

Okay. Thank you. And one quick follow-up on perm if I may. I was wondering where you are seeing most of your strength internationally. It seems like in Europe the environment there still hasn’t quite recovered enough to have perm growth there and earnest. Wondering what you’re seeing as far as perm growth or perm strength in Europe?

Actually it’s a very easy question to answer, because the U.K. is actually in a league of its own. As far as perm growth rates for Europe broadly defined. We’ve made decision some time ago to focus and provide resources to grow our permanent placement in the U.K. and it’s paid off quite nicely and we had very significant growth in this quarter and project in the next quarter for perm in the U.K.

Okay, great. Thank you.

Your next question comes from the line of Kevin D. McVeigh with Macquarie. Your line is open.

Great, thanks. Hey, Keith, I think one of the big differences this cycle is Protiviti seems like it set up to peak in conjunction with the rest of the segments as oppose to two years earlier last cycle. As you think about that from an EPS contribution, how are we thinking about that number one, as we get later into this cycle. And then, if you can, how exposure does MRI, Management Resources, have Protiviti today versus the last cycle kind of 2005, 2006?

Okay. So, we’ve told you that we wand to get Protiviti’s operating margins to double-digit. So, given that you can model the EPS benefit to the total you get versus in the last peak for the company it was a post SOX, it was during a SOX fatigue period where Protiviti didn’t contribute much to the bottom line. So, I think you can do your own math if you start with the model that has low double-digit Protiviti operating margins. As far as the exposure or the cost selling between Management Resources and Protiviti now versus last cycle, clearly one Protiviti users Management Resources are contractors and staff on a much larger percentage of their engagements today than is the case back in the last cycle. And in those situations by the way, the revenues are reported by Protiviti. So Protiviti has a client and lets say they have five staff on their engagement and one of those five is from Management Resources. In the numbers you see all of that revenue was reported as Protiviti and none of that revenue was reported as Management Resources. So Protiviti is clearly using more Management Resources staff on their engagements generally today than they were in the last cycle. You see that in Protiviti Management Resources is exclusive of any inter company activity with Protiviti. In addition the situations where Protiviti and Management Resources go to market together they literally join together and make a client visit and sell the four enterprises all the way from staff augmentation before outsourcing. There it’s a matter of who has the client relationship following from that meeting, following from those approaches and that the division that has a relationship is the division that reports the revenue.

Got it. And then if you gave this, I missed it but how were conversions trending in the quarter and it sounds like these lag a little bit relative to the rest of perm, any reason for that?

Conversions are improving. We reported that I think it was they are up, they accounted for 16 basis points of the gross margin improvement. But they are still at the low end of the 3% to 5% of revenue, maybe not the absolute low but they have come off, they are off the bottom but still low traditionally. You know perm and conversions march through their own drummers, they don’t necessarily go hand-in-hand but generally as one improves the other improves. So we don’t feel differently about the future for conversions than we do for the future of perm itself. We think it was upside there.

Super, thanks.

Our final question comes from the line of Gary Bisbee - RBC Capital Markets. Your line is open.

Hi, just one quick follow up. Despite the return of cash that you are doing in the dividend, the buyback, the cash balance keeps growing. I guess you know as we think out looking forward is the mix that you’ve had the last two years between the way you’ve grown the dividend and use excess cash for buybacks. Is that a level you are comfortable with? Would you think about maybe you know raising the dividend a bit more, any commentary on how you are thinking about that? Thank you.

Also the cash balance has grown a little bit if you look for the first six months, I think we spend about 80% of our free cash flow on some combination of dividends and repurchases. So we’re a little wide of 100% but not you know significantly in light of that. As for the mix of dividends and buybacks I think if you look at the last few years, you’ll see that we’ve grown the mix related to dividends a bit and while this is a decision our board makes every year, I think it would be reasonable to expect that overtime we tend to favor dividends or little more, but you know 50:50, 40:60, 55:45 it’s not grossly out of balance.

Thank you.

That was our last question. We 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, it will be archived in audio format in the Investor Center of Robert Half website at www.roberthalf.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. You may now disconnect.