Robert Half International Inc. (RHI) Q4 2015 Earnings Report, Transcript and Summary

Hello and welcome to the Robert Half Fourth Quarter 2015 Conference Call. Our hosts 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. Harold M. Messmer - Chairman & Chief Executive Officer: Thank you, and good afternoon, everyone. Thanks you for joining us. As is our custom, I would like to remind you there are comments on the call today that 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 such expressions. We believe these remarks to be reasonable; however, 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 the statements made on today's call. For your convenience, our prepared remarks also are available on our website at roberthalf.com. From the About Us tab, go to our Investor Center, where you will find the Quarterly Conference Calls link. Now let's review our fourth quarter 2015 results. Quarterly revenues were $1.305 billion, up 7% from the fourth quarter one year ago, or up 9% on a same-day constant currency basis. Income per share was $0.71, up 14% from this time last year. Cash flow from operations was $111 million in the fourth quarter. Capital expenditures were $27 million. We returned $27 million to our stockholders during the quarter through a $0.20 per share cash dividend. We also repurchased 1.4 million Robert Half shares for $67 million. In October, our board of directors approved the repurchase from time to time of an additional 10 million shares of common stock. All told, we have 10.4 million shares available for repurchase under our board-approved stock repurchase plan. Demand for our professional staffing and consulting services remained strong in the fourth quarter fueled by a healthy U.S. job market and low unemployment in numerous professional occupations, as well as a more positive economic backdrop in many of our non-U.S. markets. We saw year-over-year revenue growth across the board in our staffing and consulting operations both in the United States and abroad. This was the company's 23rd straight quarter of double-digit net income and earnings per share percentage growth on a year-over-year basis. Our unlevered return on equity was 37%. I'll turn the call over to Keith now for a closer look at our fourth quarter results. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Thank you. As Max said, global revenues were $1.305 billion in the fourth quarter. This is up 7% from the fourth quarter one year ago on a reported basis and up 9% on a same-day constant currency basis. Fourth quarter staffing revenues were up 8% on a same-day constant currency basis. U.S. staffing revenues were $892 million in the fourth quarter, up 8%. Non-U.S. staffing revenues were $217 million, up 4% when adjusted for billing days and currency exchange rates. We have 332 staffing locations worldwide, including 92 locations in 17 countries outside the U.S. The fourth quarter had 62.3 billing days compared to 61.7 billing days in the fourth quarter a year ago. The current first quarter has 62.7 billing days compared to 62 billing days in the first quarter of last year. Accompanying our earnings release is a supplemental schedule showing year-over-year revenue growth rates for our staffing lines of business on both the reported and same-day constant currency basis. This is further broken down by U.S. and non-U.S. operations. This is a non-GAAP financial measure that offers insight into certain revenue trends in our operations. Currency exchange rates have the effect of decreasing reported year-over-year staffing revenues by $30 million in the fourth quarter, exchange rates also decreased year-over-year reported staffing growth rates by 3 points. Global revenues for Protiviti were $195 million in the fourth quarter with $164 million in revenues in the United States and $31 million in revenues outside the U.S. Protiviti revenues were up 15% year-over-year on a same-day constant currency basis. U.S. revenues were up 15% and non-U.S. revenues were up 17% from the prior year. Exchange rates had the effect of decreasing year-over-year Protiviti revenues by $3 million in the fourth quarter and decreasing year-over-year reported growth rate by 2%. Protiviti and its independently-owned member firms serve clients through a network of 75 locations in 25 countries. Gross margin in our temporary and consulting staffing operations in the fourth quarter was 37.3% of applicable revenues. This is a 40-basis-point improvement from the same period a year ago. The improvement relates primarily to higher pay/bill spreads. The fourth quarter of 2015 also includes a $1.2 million workers' compensation and other payroll-related credits. Fourth quarter revenues for our permanent placement operations were 9.2% of consolidated staffing revenues, which is unchanged from last year's fourth quarter. Together with temporary and consulting gross margin, overall staffing gross margin improved 40 basis points versus a year ago to 43.0%. Fourth quarter gross margin for Protiviti was $62 million or 32% of Protiviti revenues. Gross margin one year ago for Protiviti was $53 million, or 30.7% of Protiviti revenues. Staffing SG&A costs were 32.5% of staffing revenues in the fourth quarter versus 32.0% in last year's fourth quarter. We ended 2015 with $12,800 full-time employees in our staffing divisions, up 14% from the prior year. SG&A costs for Protiviti were 18% of Protiviti revenues in the fourth quarter, compared to 18.3% of Protiviti revenues in the year-ago period. We ended 2015 with 3,800 full-time Protiviti employees and contractors, up 15% from the prior year. Operating income from our staffing operations was $117 million in the fourth quarter, up 5% from the prior year. Operating margin was 10.5%. Our temporary and consulting staffing divisions reported $99 million in operating income, an increase of 5% over the prior year. This resulted in an operating margin of 9.9%. Operating income for our permanent placement division was $18 million in the fourth quarter, up 2% from the prior year and producing an operating margin of 17.3%. Fourth quarter operating profit for Protiviti was $27 million, an increase of 29% from the prior year. This produced an operating margin of 14.0%. At the end of the fourth quarter, accounts receivable were $705 million. Implied days sales outstanding, DSO was 49.2 days. Before we move to first quarter guidance, let's review the monthly revenue trends we saw in the fourth quarter and in January, all adjusted for currency. Globally, year-over-year revenue growth rates for our temporary and consultant staffing divisions accelerated modestly in October, then decelerated in the latter part of the quarter. We exited the quarter with December growing 6% compared to 7% for the full fourth quarter. Revenue growth for the first three weeks of January was also up 6% compared to the prior year. Global permanent placement revenue growth rates also accelerated in October then moderated the balance of the quarter with December growing 8% compared to 8% for the full quarter and then for first four weeks in January, permanent placement revenues increased 7% compared to the same period last year. This information designed to offer a glimpse into trends we saw during the fourth quarter and in January. But, as you know, we hesitate to read too much into these numbers, as they represent very brief periods of time. That said, we offer the following first quarter guidance: revenues $1.270 billion to $1.330 billion, income per share $0.61 to $0.67. The midpoint of our guidance implies year-over-year revenue growth of 8% on a reported basis and adjusted for currency, including Protiviti and EPS growth of 10%. We limit our guidance to one quarter. All estimates we provide on the call are subject to the risks mentioned in today's press release and in our SEC filings. Now I'll turn the call back over to Max. Harold M. Messmer - Chairman & Chief Executive Officer: Thank you, Keith. We were pleased with the company's performance during the fourth quarter and we are optimistic about our prospects. Annual revenues in 2015 crossed the $5 billion mark for the first time. We anticipate the high demand for skilled talent will remain a growth driver for us, and we have every confidence in the opportunities ahead for Protiviti. While the stock market has been volatile and economic uncertainty persists, the U.S. labor market remains strong and international markets have also started to rebound. In the United States, nearly 300,000 jobs were created in December alone, and 2.7 million jobs were added over the course of the year in 2015. A number of professional occupations are near full employment, which is placing pressure on the supply of available talent and increasing our value to clients. This is particularly true in technology staffing, and we are responding with investments to capitalize on this potential; locating hard-to-find talent is a specialty at Robert Half. The secular demand for temporary staffing also is ongoing. The use of flexible workers matched an all-time high during the fourth quarter. Temporary employees now represent 2.06% of the U.S. workforce. And the word about Protiviti, we continue to be pleased with how Protiviti is performing. This is a very good business with an excellent management team. Protiviti has successfully diversified its service offerings, built a loyal and growing client base, and is seeing steady demand in all of its major consulting segments. Protiviti serves its clients in areas such as internal audit and financial advisory services, risk and compliance, and information technology consulting, among others. At this time, Keith and I'd be happy to answer questions. We ask that you please limit yourself as usual to one question and a single follow-up as needed. If time permits, we'll certainly try to return to you. Thank you.

Your first question comes from the line of Jeff Silber with BMO Capital Markets. Your line is open.

Thanks so much. Wanted to focus on the additions of full-time employees you'd mentioned in your staffing divisions. I think you said it was up about 14% year-over-year. Were they weighted to any specific area? And if you could also talk about when was most of the hiring done? Was it done throughout the year, towards the beginning, or the end? Thanks. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Jeff, we did add about 14% to our staff. It was very back-loaded to the second half of the year. We talked about that a little bit on the last call. Our thoughts are the quarter we're now in, the first quarter, we will absorb the hiring that we did in the second half of 2015 and wouldn't add significantly to head count during this quarter. As to the line of business, it was pretty broad-based. It was a little heavier toward permanent placement, a little heavier toward technology, but certainly all of the divisions participated in the head count increase.

Okay. Great. And then, just a couple of numbers related questions. I was hoping you can give us what your expected tax rate and capital spending budget will be for 2016. Thanks. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Sure. The tax rate, volatile as always. It was low in the fourth quarter because we had more benefits from foreign operations than we expected, plus when Congress passed in late quarter the tax extenders, which I guess was the PATH Act, that freed up some payroll tax credits that we recognized. We would not expect those to continue to that degree into the current first quarter. So the tax rate we're using for the first quarter and 2016 is around 39%, but as you know from prior quarters, that means somewhere between 38% and 40%. CapEx, we do expect to increase our capital expenditures during 2016. The range we would give would be somewhere between $90 million and $100 million; midpoint would be $95 million. That's up from $75 million in 2015. Two or three things going on there. We're upgrading our IT internal infrastructure to cloud-based systems, both for our front office client and candidate relationship management systems on the staffing side. We're converting to a cloud-based HR and staff payroll system as well. Further, we continue to invest in data science, data analytics, artificial intelligence as it relates to identifying, matching, prioritizing both leads, clients and candidates. And then further, we've got more lease expirations in 2016 than in 2015 and there would be more tenant improvement costs that relate to that. But as a percent of revenue, CapEx in 2016 would be a little bit higher. I think the historical average is 1.5% of revenue. And I think 2016, it's going to be 1.7%, 1.8% of revenue.

Okay. Great. Thank you so much.

Your next question comes from the line of Andrew Steinerman with JPMorgan. Your line is open. Andrew Charles Steinerman - JPMorgan Chase & Co.: Hi. Keith, could you make a comment about the Protiviti fundamentals that are implied in the fourth quarter guide, particularly on both the revenue side and the profitability side, noting first quarter is usually a lower profitability seasonally for Protiviti. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Sure. So for the fourth quarter, Protiviti had another very good quarter of mid top line growth, much better than that bottom line growth. Going into the first quarter, year-on-year, we would again expect a mid double-digit top line growth and bottom line growth at as least as much as that. Sequentially, because the first quarter seasonally is Protiviti's slowest, sequentially it will be down as it is as always the case. But year-over-year, we expect very solid revenue growth. We expect a little bit of margin expansion, which means nice operating income growth. Andrew Charles Steinerman - JPMorgan Chase & Co.: Right. And when you say mid double-digit, you mean mid-teens, right? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Correct. Andrew Charles Steinerman - JPMorgan Chase & Co.: Thank you. Appreciate it.

Your next question comes from the line of Tim McHugh with William Blair. Your line is open. Tim J. McHugh - William Blair & Co. LLC: Yeah, thanks. I just wanted to ask, you gave the color obviously by month. And I know you caution us not to over-read them, but given the stock market movements, I guess, what's your read of just sentiment from clients? Is there something to read into the difference in growth rates later in the quarter and in January even though they're not very much. But are you hearing any different? Are you sensing any different I guess environment out there right now? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, I would say that our people would observe that in November, December the clients got a little more cautious, whether that's due to market uncertainty or other reasons, the headlines about China, oil, et cetera, we could all debate. But our clients did get a little more cautious, not significantly more cautious. Further, December is always a somewhat odd month, because our internal staff have had a very good year in 2015. They probably checked out a little earlier, as did our clients frankly. So we felt like we've had a little more December effect than we would typically have. But, generally speaking, the fourth quarter was in line with our expectations. I mean, I think we were within $5 million of the midpoint of our $1.3 billion estimate. And generally speaking, our guidance for the first quarter isn't significantly different. So it's mostly more of the same. The fourth quarter wasn't that different from the third quarter. The first quarter guidance isn't that different than the fourth quarter. Now the tax rate swings things around. So the tax rate Q4 was low as we talked about, the tax rate Q1 goes back up. So if you look at sequential progress, one to the other, the tax rate has a big impact. Tim J. McHugh - William Blair & Co. LLC: What about with perm? I mean, was that sensitivity more felt in perm? I guess, the growth rate there is just – the year-over-year growth rate was a little slower in Q4 versus before, what would you, I guess, attribute that to? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, we would say, the clients becoming more cautious certainly impacted perm. It's odd in that on the one hand clients are still picky; candidates are also harder to close. They're accepting counteroffers, they're accepting competing offers, they're declining offers. So it's a little odd that at the same time clients and candidates are being picky. And that has the effect of increasing the days to fill or increasing the sales cycle, however, you'd like to describe it. But the point is perm was a little bit light of what we had projected for the fourth quarter. It wasn't dramatically light. We believe that current tone of business in perm is solid, and the guidance we've given for the first quarter reflects that. Tim J. McHugh - William Blair & Co. LLC: Okay. Thanks.

Your next question comes from the line of Mark Marcon with Baird. Your line is open. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Good afternoon. Just in light of your – the comments that you just made, Max and Keith, how are you thinking about adding to head count over the course of the coming year? I mean, you've got solid business, but, obviously, there is some concerns and maybe on the margin some increased cautiousness among both candidates as well as employers. So I was just wondering how you're thinking that through. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, just as we back-loaded the head count growth in 2015, we've essentially front-loaded the head count for 2016. So clearly, in the first quarter that we're now in, we don't expect virtually any net additions to head count. We'll see how that goes. We'll then look toward the end of the first quarter as to what we do in the second quarter. But it's not that unlike 2015, where the head count was backend-loaded and the first half of 2015, there wasn't a lot of head count addition, either. So we should have a couple of quarters where we leverage our SG&A better than what we've done intentionally the second half of 2015 by being more aggressive with the heads. I mean, frankly, it's been a few years since we've added more heads than our top line grew by. I think in rough numbers, we added 14% to our staffing head count and our revenues were up 10%. So simple math says, we've front-loaded, we've added to capacity at the beginning of 2016, we'll play it by here for the rest of the year. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Great. And the 10-K is going to be out shortly. But do you have the actual number in terms of the internal head count? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Yes. The staffing number was 12,800. The Protiviti number was – just a second – 3,800. So staffing up 14%, Protiviti up 15%. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Great. And then, one last question, if I may. Just with regards to RH Technology, on a sequential basis, it was down a little bit. Is there anything that you're seeing there? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: The theme is similar to the theme we just talked about. Clients got a little more cautious in the fourth quarter. We had the December wealth effect, where internal staff checked out sooner, clients checked out sooner. There is always natural project ends near the end of the year. That's something you deal with every year. So tech was a little bit lighter than we would have expected for the quarter, but not significantly so. Similarly, as we roll into 2015, tech is solid. Our Q1 guidance reflects that. We feel good about tech. But it was a little light, but not significantly so for the fourth quarter. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Great. Thank you for the color.

Your next question comes from the line of Paul Ginocchio with Deutsche Bank. Your line is open.

Hey, Keith. Thanks so much for the color into January from December and the fourth quarter globally for both perm and temp. Was there anything to talk about U.S. versus international as the trends went from December into January? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: There's no significant different story there, Paul. I would say, generally speaking, when we look outside the U.S., the UK remains solid, Germany remains solid. We had a nice quarter in Belgium, which should continue into the first quarter. Those were the three markets outside the U.S. that were the strongest. We've talked about Canada with energy impact, we've talked about Australia with energy impact. And France, that's running a little behind for us what the other Continental European countries are. But no major difference between how we re-enter 2016 versus how we exited 2015 between U.S. and non-U.S.

Great. Thank you.

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

Thanks. Good afternoon. Could you run us through your expectations for the first quarter in a bit more detail around temp versus perm expectations, how you're thinking about gross margins in temp and SG&A trends overall? Thanks. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Sure. So embedded to the midpoint of our guidance and all of this is adjusted for currency and days, we see temp growth continuing to decelerate slightly. We see perm growth stay bullish. The comps helped us out there a year ago. The comps get a little easier. We see Protiviti year-on-year growth flat to down a little bit on very tough comps. Sequentially, due to normal seasonality, Protiviti will be down. Temp gross margin, year-on-year we see 10 basis points to 30 basis points of improvement, which is principally a carryover of the higher pay/bill spreads that we've experienced through 2015. SG&A, year-on-year will still be up 10 basis points, 20 basis points, because of the carryover impact of the head count additions. But, sequentially, we should be down 10 basis points to 30 basis points as we lever that head count as revenues grow in the first quarter. Protiviti SG&A year-on-year flat to up slightly as they make some infrastructure investments, they also are redoing their front office over the course of 2016. Staffing operating income, flat to down, slightly year-over-year for the reasons I just talked about. Protiviti up 30 basis points to 50 basis points year-on-year; strong mid-teen top line growth, bottom line growth at least to that degree; tax rate 39% as I talked about earlier, which is about flat year-on-year, it's up sequentially as we discussed; shares down 1 million or so as a flow-through of the buybacks that we did during the fourth quarter. We – again, as we've done many, many, many, many, many quarters, we spend our cash flow – our free cash flow on some combination of dividends and share repurchases. And then, CapEx, as we mentioned earlier, our 2016 range is $90 million to $100 million as we make the infrastructure investments as I talked about.

Great. Thank you. Very thorough. And then, just two other quick ones. Perm operating margins were down year-over-year in the fourth quarter. I'm assuming that's because of the hiring, but wanted to check. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Perm's internal cost structure is more payroll-dependent than any division we have. So it's almost per se. If it's up or down, it's going to be because of head count.

And presumably, you expect to see some leverage on that as the new staff gets ramped up? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Sequentially, yes. Year-over-year, it will take some time to absorb that.

Got it. And then, last question. Could you update us on bill rate trends? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Sure. Bill rates for the quarter were up 5%. Globally, adjusted for currency, that was up a touch relative to last quarter. It's essentially the first time in this cycle, we've gotten a 5% in front of a bill rate increase. Our pay rate increases lag a little bit, the 5%. All this discussion on cycle (31:31) we continue to believe as you compare to prior cycles. From a GDP standpoint, this cycle has been much more sluggish. From a wage inflation standpoint, not only for the economy generally, where the Employment Cost Index is up 2%-ish rather than high 2s in prior cycles. But for Robert Half, we've also seen a lot more wage inflation in cycles past than we've seen in this cycle. But we are, as I just mentioned, for the first time, seeing bill rate increases begin to touch 5%.

Thank you.

Your next question comes from the line of Anj Singh with Credit Suisse. Your line is open. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC (Broker): Hi. Thanks for taking my questions. I was hoping to dig into the perm side of the business a little bit. I appreciate the comments earlier. But just wondering, are you seeing any difference in the tone between your U.S. clients and your international clients? Just trying to get a sense of if there is more apprehension on a relative basis to the recent trends in the respective regions as you look ahead? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: I'd say that we continue to be bullish in the UK and Germany, particularly in perm placement. We added head count later last year outside the U.S. in those countries than we did in the U.S. So IZ, the international zone perm growth has lagged what's happened in the U.S. and that's in part because we haven't invested the head count. But we did do that more recently late in the fourth quarter. So we're hoping that that will help see some acceleration in perm growth in the UK and Germany. Other than that, I would say the general discussion of clients got a little more cautious during the quarter would also apply outside the U.S., particularly to Europe as it did inside the U.S. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC (Broker): Okay. Got it. And obviously you guys have been through several cycles. And I also realize you've noted that this cycle is unlike others. So hoping you can discuss a little bit more about what your outlook is for perm as we get further into this cycle? Should we be taking the wage inflation that we're seeing, the bill rates that you're seeing increasing as a sign that the perm acceleration is still yet to come? Or do you think it should still be a little bit stubborn as you said earlier? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well as I said earlier, this recovery has been very sluggish relative to the past. And you can look at peak-to-peak growth rates during past to peak-to-now growth rates perm and temp. And clearly, this recovery has been more sluggish. Outlook-wise, we continue to be positive about perm. If you look at perm versus temp last cycle, every year during the last recovery cycle, perm outgrew temp. That's no surprise. A perm takes a much bigger hit during a downturn does than does temp. If you look at this cycle so far, while more sluggish than past cycles, perm has also outgrown temp every year and this cycle as well. So that's not unusual. The degrees or something, I guess we could have a discussion about. Our outlook for 2016 and our guidance for the first quarter of 2016 essentially assumes we continue to see more sluggish growth the way we have for several quarters. Yet quite frankly, we're pretty proud of how we've done the last several quarters. So to tell us there is more sluggish growth ahead, we can deal with that. We've shown the world what we have done with that. Our planning is that that's what continues for the near term. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC (Broker): Okay. I appreciate those thoughts. One quick one if I may. On your business levered to energy in Canada and Australia, could you just talk a little bit about what your client conversations there are like? Are you seeing more declines with oil at these levels? Or are you perhaps seeing cuts beginning to stabilize? Just any color as we try to understand the go-forward impact energy may have. Thank you. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well first of all, none of those operations are material to Robert Half. So we don't have a lot of super-detailed discussions on the topic. Those discussions we have certainly aren't getting any more positive. We'll put it that way. Anjaneya K. Singh - Credit Suisse Securities (USA) LLC (Broker): Okay. Thank you.

Your next question comes from the line of Manav Patnaik with Barclays. Your line is open.

Thank you. Good evening, gentlemen. The first question I wanted to ask was, in the prepared remarks, you said you guys were planning to respond with investments to capitalize on the technology staffing opportunity. I was just wondering, are those the same things as you refer to around data quality and artificial intelligence and so forth? Or is there something different to it? And just around that like, is that going to be all internal build? Or is there an opportunity to acquire a technology or so forth with respect to that? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: So when we talk about investing in our technology division, it's a combination of adding more head count, which is a combination of recruiters and salespeople. It's also investing in internal tools. Those internal tools for the most part relate to all of our lines of business. Some because our technology clients and candidates are more technology savvy, we often go first to our technology division as we roll out new initiatives. So the data analytics, the data science, the use of algorithms, all the things that I talked about would particularly relate to our technology division, clients, candidates, leads, but those relate more broadly to all of our lines of business, perm and temp.

Okay. Fair enough. And then just around the geographic comment, you mentioned France was lagging behind. I was just curious if you could elaborate on if that was internal factors, external factors, combination of both, just any color there. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well first of all, France is not a very large portion of our business. And when I say lagged, I mean it was a few percentage points behind the rest. So I certainly don't want everybody in France to be mad at me because I singled them out negatively, because I didn't intend to do so. But while they're listening and being competitive, they didn't do quite as well as the UK and Germany.

Okay. And then just last one. Modeling-wise, do you have the number of billing days for each quarter for this year? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Sure. Let me find out and I'll tell you. So Q1 62.7, Q2 63.9, Q3 64.1 and Q4 is 61.4 to give you 252.1 for the year.

All right. Thanks a lot, gentlemen. Appreciate it.

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

Thank you. I'm curious if you noticed any differences in the technology segment among your traditional small- and medium-sized business customers and the slightly larger ones that occasionally you touch in that line of business? Thank you. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, since most of our business in tech is small- or middle-sized businesses, while they're modestly larger companies than we service with Accountemps and OfficeTeam, there's still significantly smaller than the Fortune 1000. So we don't tend to do a whole lot of analysis between our typical sweet spot middle market tech firms and those, let's call it, Fortune – the minority of those Fortune 1000 firms that we also work with. But having said that, there's certainly nothing that screams at us that would bubble up a trend worth noting.

Okay. And then, within the Accountemps segment was the business in The Creative line of business, was that a wizard – kind of a discernible difference in the growth rates or trends there? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, it seems like you're trying to get read through potentially to others. Our Creative business did very nicely in the fourth quarter. We don't break that out, as we've talked about in the past. But we're very pleased with our Creative business. There's synergies between our Creative business and our Technology business, among others. They're managed by the same leadership group at Robert Half. We're pleased with how Creative performed.

Thank you. My last question has to do with the Technology segment, do you expect that to be the fastest rate of your bill rate growth in 2016? Or should it just be kind of on par with the company average? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: No. I would say, more than likely it will be mostly on par. On the one hand, the candidate shortages are more acute than they are in our other divisions. On the other hand, Technology clients tend to be more dollar-per-hour-sensitive on bill rates than they are either mark-up percentage or gross margin percentage, which some of our other divisions would be more attuned to. So I wouldn't think that Technology bill rates would grow that differently than our other divisions. And for the fourth quarter just ended, our bill rate increases in Technology were not that different from the bill rate increases we saw in the other lines of business.

Thank you very much.

Your next question comes from the line of Gary Bisbee with RBC Capital Markets. Your line is open.

Hi, guys. Good afternoon. I guess, I just wanted to ask you, a year ago you discussed the potential for temp margins to potentially go 100 to 150 basis points above prior cycle, if the cycle kept going based on unemployment taxes, rising wages, a bunch of different things. I guess, given a somewhat slower pace of revenue today, is it still reasonable to think if the cycle goes on for a while that is something that could happen? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, so first of all, let's talk about 2015. And I think we absolutely delivered everything we talked about with respect to gross margin expansion. And, in fact, if you look up and down our P&L, probably, the single most impressive thing that happened in 2015 is the way we expanded our gross margins led by pay/bill spreads. As we move into 2016, given where our margins start from, incrementally, you shouldn't expect as much improvement in 2016, as you saw in 2015. But, our conversions, as an example, are still low relative to the past 3.2% versus a range of 3.0% to 5.0%, midpoint being 4%. We still have that upside on state unemployment rates. As the national unemployment rate goes down, as the unemployment claims that get filed against Robert Half go down, our unemployment rate as we go forward, should continue to trend down. There's upside there. Let's call that another, I don't know, at least 10 basis points to 30 basis points depending on how aggressive you want to be. So that's still ahead of us. Just on the pay/bill spreads, we brought those a long way already. And while the environment will be conducive, if there is wage inflation to us getting not only that pass-through, but a little more for the House, incrementally, that won't be what it was in 2015.

Okay. Great. Thank you.

Your next question comes from the line of Kevin McVeigh with Macquarie. Your line is open. Kevin McVeigh - Macquarie Capital (USA), Inc.: Great. Thanks. Hey, Keith, can you give us a sense of how much FX weighs on the Q1 revenue guidance and earnings from a dollar perspective? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, so from an earnings standpoint, it's probably no more than $0.01 per share. From a revenue perspective, it's certainly not as impactful as it has been for the last few quarters. I want to say it's in the neighborhood of half of what it's been. So I think we're $30 million this quarter, it's $15 million, call it, half of that in the current quarter, because you're starting to anniversary FX rates that are less different than it has been the case the last couple years. So if you look at our Q1 guidance, essentially, the extra billing day due to leap year offsets the impact of FX and your reported and your currency-adjusted growth rates are about the same orders of magnitude. Kevin McVeigh - Macquarie Capital (USA), Inc.: Got it. And then, given where we are, it definitely sounds like there's some candidate shortages out there, is there any way to frame how much of that impacted revenue in the fourth quarter? And was that primarily in Technology? Or was that across all segments in terms of just sourcing tougher-to-fill slots and things like that? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: So clearly, in technology, we're seeing technology development, the programmers, the engineers. We're seeing the most acute shortages, accounting, internal audit, financial services, regulatory compliance. There are also pockets of accounting and finance where there are also candidate shortages. As I talked about earlier, we're simultaneously dealing with pickier clients and pickier candidates. Candidates are getting more counteroffers. Candidates are getting competing offers. Candidates are turning down offers that our clients give them. There's an art to deciding whether to work with a candidate as to whether they're a tire kicker that you're going to take through the process, and at the end of the day, they're not going to take the job or whether they're sincerely interested. There's an art to deciding which orders to work, whether it's an impossible to fill order that you spend a lot of time on, that you never fill, or it's a fillable order. So there's an art to deciding, which candidates. There's an art to deciding, which clients. But there's no question that there are candidates shortages. But we believe manageable candidate shortages with there is more exposure, there is more transparency to the candidate, the availability of candidates than ever with social media, with the job boards, with job aggregators. We feel like we're exposed to a larger portion of the labor market than has ever been the case. And that's certainly something we're trying to address with our technology initiatives, so that we continue to manage our way through the candidate shortage. Kevin McVeigh - Macquarie Capital (USA), Inc.: Thank you.

Your next question comes from the line of Randy Reece with Avondale Partners. Your line is open.

Afternoon. Various people in the recruiting business keep telling me that any day now we're going to see some alternatives to contingent search are taking share in that neighborhood. I'm just wondering if there are any new entrant adjacent to your business that really matter at all yet. Or if that is more just marketing noise? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, as I just explained, it's getting harder and harder to close deals, because you've got to close the client, you've got to close the candidate. There's an art to both of those. As to new entrants, there certainly has nothing that's come around in the last couple of years. We've talked about LinkedIn at length in calls past, and LinkedIn is still there. It's a source; it's not the source of perm candidates for us. It's not particularly impactful to sourcing candidates for our temporary businesses. So on balance, are there any new entrants that are moving the needle? I'd say no.

Yeah. Are there any sources of candidates coming out of weaker industries that might help a little bit as we go through 2016? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, our candidates tend to be geographically-focused. So if we're talking Houston, so clearly, we have Houston oil and gas candidates that are freed up by those economic conditions. But for the most part, they're available to the Houston market and not available to markets all over the country. So there is some availability created by pockets of weakness. But it's not like we can transport everybody around the country to fill a three-month engagement in Boston because we have somebody available in Houston. For the most part, it's a local business. The temp business particularly is a local business that's confined to the local market.

It's been a few years since we've seen U.S. Protiviti be sequentially down in revenue in the fourth quarter. Is there any message there or any carryover? Or is it more of a timing issue? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, let's remember now that year-on-year Protiviti grew 15% on monster comps. So Protiviti had a wonderful fourth quarter. It is true that during the fourth quarter in the financial services, regulatory compliance area, they had a couple of projects that ended earlier than expected. They had one larger project where the client ran out of budget and delayed the project for a few weeks until the new year when they got a new budget. So there is always going to be project variation with Protiviti. And by the way, management resources, which nobody's asked about, it actually did better than expectation in the fourth quarter sequentially and year-on-year. And it's just the opposite story where again in financial services they had some big projects come online better than expectation. So project timing hurt Protiviti a little bit. Project timing helped management resources. So it's just kind of the ebb and flow of projects that impacts those results. So there's nothing particularly earth-shattering about Protiviti's fourth quarter sequential performance. And here again, Protiviti had a great quarter. Protiviti had a great year. They've had the toughest comps. They've grown the fastest top line and bottom line; profitability 14% for the quarter is wonderful. We're at that mid double-digit profitability level we've long talked about. We couldn't be happier with Protiviti. But there is project variability in their revenues.

Yeah. I learn something every quarter. I'm not used to seeing you beat my expectations in temp staffing and miss on the perm side. Usually when one is stronger, the other one doesn't fall short, but this is an interesting environment. Thanks a lot.

Your next question comes from the line of George Tong with Piper Jaffray. Your line is open. George K. F. Tong - Piper Jaffray & Co (Broker): Hi. Thanks. Good afternoon. Keith, I'd like to further explore the growth outlook for Protiviti. What trends are you seeing in pricing and competitive dynamics, customer demand and customer penetration that could have contributed to the deceleration in growth and that might impact longer-term growth? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, so the deceleration in growth we're talking about, rather than growing 20% on 20% on 20%, or instead growing 15% on tough comps. So it certainly isn't viewed as a major issue that Protiviti slowed down from 20% to 15%. The underlying trends in internal audit, financial services, regulatory compliance, technology security, privacy, infrastructure, we did a small acquisition during the quarter that relates to IT, business intelligence, data analytics. We're very proud to have them part of our team. We feel good about Protiviti. We feel good about its prospects. We've posted very good numbers for two or three years running. We expect that to follow into 2016. Competitively, we're very well-positioned against the Big Four. We believe we've got Big Four level resources that are much more responsive and much more agile for clients given our relative sizes, so. George K. F. Tong - Piper Jaffray & Co (Broker): Got it. And I guess as a follow-up, Max, a follow-up on the question around the rebound in international markets. Can you provide some data points that show which verticals or end markets are seeing the most positive inflection? Harold M. Messmer - Chairman & Chief Executive Officer: Well, we talked about the UK and Germany of course. And they've been strong more or less across the board I would argue. M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Yeah. It's just not necessarily any vertical, just as we are in the United States, we're very diversified. We don't have a huge client concentration by industry, et cetera. And therefore, while our non-U.S. clients are modestly larger than our U.S. clients, we still don't have any big concentration. George K. F. Tong - Piper Jaffray & Co (Broker): Great. Thank you.

Your final question comes from the line of Mark Marcon with Baird. Your line is open. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Thanks for taking my follow-up. I was just wondering, are you seeing anything that's different in California or elsewhere on the regulatory front that's impacting the business in any way, shape or form? M. Keith Waddell - Vice Chairman, President & Chief Financial Officer: Well, the only regulatory thing I can think of, there are sick pay regulations that initially were limited to Northern California, San Francisco more specifically, that have now been extended statewide. There are a few other cities slash states around the country that have also mandated sick pay benefits for temporary employees. Those put a little bit of pressure on gross margin. We're trying to pass those through. But I can't think of a regulatory requirement, a new regulatory requirement that's moving the needle in any way. Harold M. Messmer - Chairman & Chief Executive Officer: It's not exactly a response of your question, but let me just add that I was at a business meeting with the bunch of CEOs recently, and it was noted that there are over 75,000 pages in the Federal Register this year alone. I would say that the regulatory state is a great ally of Robert Half. We live in an environment, where there are more and more rules and regulations, and of course, we're in the business of helping people deal with those. So on a positive note, regulations can be our friend as well as our enemy. Mark S. Marcon - Robert W. Baird & Co., Inc. (Broker): Fully appreciate that, Max. Thank you. Harold M. Messmer - Chairman & Chief Executive Officer: That was our last question. We'd 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's 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.