Press Releases

Kforce Reports Fourth Quarter and Full Year 2011 Results

Feb 7, 2012

  • Fourth Quarter Revenues of $285.6 Million and EPS of $0.20
  • Flex Revenues Per Billing Day Increased 4.2% Sequentially
  • Total 2011 Revenue and EPS Growth of 12.1% and 37.3%

TAMPA, Fla., Feb. 7, 2012 (GLOBE NEWSWIRE) -- Kforce Inc. (Nasdaq:KFRC), a provider of professional staffing services and solutions, today announced results for its fourth quarter of 2011. Revenue for the quarter ended December 31, 2011 was $285.6 million compared to $289.0 million for the quarter ended September 30, 2011, a decrease of 1.2% and compared to $258.5 million for the quarter ended December 31, 2010, an increase of 10.5%. For the quarter ended December 31, 2011, Kforce reported net income of $7.1 million, or $0.20 per share, versus $8.4 million, or $0.22 per share, for the quarter ended September 30, 2011, a decrease of 16.1% in net income and 9.1% in earnings per share, respectively. Net income and earnings per share for the fourth quarter of 2011 increased 11.8% and 25.0%, respectively, versus the fourth quarter of 2010, which had net income of $6.3 million, or $0.16 per share.

Kforce reported total revenue for the year ended December 31, 2011 of $1.1 billion as compared to $990.8 million for 2010, an increase of 12.1%. Net income was $27.2 million, or $0.70 per share, for the year ended December 31, 2011, versus net income of $20.6 million, or $0.51 per share, for 2010, which represents an increase of 31.6% in net income and 37.3% in earnings per share.

"We are very pleased with both Q4 and full year 2011 results. Fourth quarter revenues of $285.6 million and earnings per share of $0.20 were both at the top end of our guidance. In the quarter, the Firm also achieved several milestones, establishing record quarterly revenue per billing day for total Firm, total Firm Flex, total Tech, Tech Flex and HIM Flex. Additionally, full year 2011 total Firm Flex revenue increased 12.1%," said David L. Dunkel, Chairman and Chief Executive Officer. "Looking at our service lines, Flex revenues for our Tech, FA, Clinical Research and HIM segments for 2011  experienced increases of 16.1%, 17.2%, 1.8% and 19.7% respectively, while Government Solutions declined 10.4%. We believe that the secular shift towards a flexible staffing model in this temporary employment-led recovery, as evidenced by a disproportionate increase of job creation occurring in temporary staffing, has contributed to our growth in what remains an uncertain macroeconomic environment. In addition, with college educated unemployment at 4.2%, there remains significant demand for professional talent. I wish to thank all of our employees, consultants and clients for making 2011 a very successful year for Kforce and we remain optimistic about the Firm's prospects."

William L. Sanders, President, said, "We are very pleased with the results for the fourth quarter, where we experienced a sequential revenue increase in all Flex business lines on a billing day basis, except for Clinical Research, which is impacted by paid time off around the holidays.  We were able to continue to take advantage of our highly advanced sales and delivery platform that leverages the combination of our field associates, strategic accounts executives and National Recruiting Center to profitably grow revenue with both large and small clients. Our key performance indicators and discussions with clients indicate that demand continues to be solid. Kforce continues to aggressively pursue business opportunities with the goal of continuing to gain client and market share."

Mr. Sanders noted additional operational results for the fourth quarter include:

  • Flex revenue per billing day of $4.5 million in Q4 '11 increased 4.2% over Q3 '11 and increased 11.2% over Q4 '10.
     
  • Flex revenue of $275.2 million in Q4 '11 decreased 0.7% from $277.1 million in Q3 '11 and increased 11.2% from $247.4 million in Q4 '10.
     
  • Sequential percentage changes in Flex revenue on a billing day basis by segment were: 12.3% increase for HIM, 11.2% increase for FA, 2.5% increase for Tech, 2.4% increase for Government Solutions and a 1.6% decrease for Clinical Research.
     
  • Search revenue of $10.4 million in Q4 '11 decreased 12.4% from $11.9 million in Q3 '11 and decreased 6.0% from $11.1 million in Q4 '10.

Joseph J. Liberatore, Chief Financial Officer, said, "The Firm performed well in Q4 '11. We believe our fourth quarter results reflect strong client relationships and an improving pricing environment. Q4 '11 and Q4 '10 each contained 61 billing days while Q3 '11 contained 64 billing days."

Mr. Liberatore continued, "From a financial standpoint, 2011 provided the opportunity for the Firm to take advantage of our flexibility and capacity to gain market share while protecting our strong balance sheet and delivering solid results. Cash flow and EBITDA continued to be strong in 2011. During 2011, the Firm repurchased approximately 5.7 million shares of Kforce common stock which represented 13.8% of outstanding shares at December 31, 2010. We will continue to be opportunistic in future repurchases as cash flow and market conditions warrant. We believe we are well positioned to take advantage of available opportunities in 2012 and return strong results to our shareholders."

Financial highlights for the fourth quarter and 2011 include:

  • Flex gross profit decreased 30 basis points to 28.6% in Q4 '11 from 28.9% in Q3 '11 and decreased 20 basis points from 28.8% in Q4 '10.
     
  • Selling, general and administrative expenses as a percentage of revenue for fiscal 2011 was 26.0% compared to 26.8% for fiscal 2010, reflecting a decrease of 80 basis points.
     
  • Adjusted EBITDA for fiscal 2011 was $69.3 million, an increase of 30.2% from $53.2 million in fiscal 2010.
     
  • Earnings per share for fiscal 2011 was $0.70, an increase of 37.3% from $0.51 per share in fiscal 2010.
     
  • Bank debt at the end of Q4 '11 was $49.5 million, reflecting a decrease of $9.9 million from $59.4 million at the end of Q3 '11.

Mr. Liberatore stated, "In addition, looking forward to the first quarter of 2012, we expect revenues may be in the $293 million to $300 million range and earnings per share in the range of $0.14 to $0.16, which reflects an impact of approximately $0.07 per share of payroll taxes. The first quarter of 2012 has 64 billing days versus 61 billing days in the fourth quarter of 2011."

On Tuesday, February 7, 2012, Kforce will host a conference call to discuss these results. The call will begin at 5:00 p.m. Eastern Time. The dial-in number is 877-344-3890. The replay of the call will be available from 8:00 p.m. Eastern Time Tuesday, February 7 to February 21, 2012 by dialing (800) 642-1687, passcode 51845786.

This call is being webcast by Shareholder.com and can be accessed at Kforce's web site at www.kforce.com (select "Investor Relations"). The webcast replay will be available until February 21, 2012.

About Kforce

Kforce (Nasdaq:KFRC) is a professional staffing and solutions firm providing flexible and permanent staffing solutions in the skill areas of technology, finance & accounting, and health and life sciences. Backed by more than 2,200 associates and approximately 11,100 consultants on assignment, Kforce is committed to "Great People = Great Results" for our valued clients and candidates. Kforce operates with 63 offices located throughout the United States and one office in the Philippines. For more information, please visit our Web site at http://www.kforce.com/.

The Kforce Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3749

Certain of the above statements contained in this press release are forward-looking statements that involve a number of risks and uncertainties. Such forward-looking statements are within the meaning of that term in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Factors that could cause actual results to differ materially include the following: business conditions and growth in the staffing industry and general economy; competitive factors, risks due to shifts in the market demand, including, without limitation, shifts in demand for our Technology, Finance and Accounting, Clinical Research, Health Information Management and Government Solutions segments, as well as the market for search and flexible staffing assignments; changes in the service mix; ability of the Firm to complete acquisitions; and the risk factors listed from time to time in the Firm's reports filed with the Securities and Exchange Commission, as well as assumptions regarding the foregoing. In particular, there can be no assurance that we will continue to increase our market share, successfully manage risks to our revenue stream and successfully put into place the people and processes that will create future success. The words "should," "believe," "estimate," "expect," "intend," "anticipate," "foresee," "plan" and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. The Firm undertakes no obligation to publicly update or revise any forward-looking statements. As a result, such forward looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.

Kforce Inc.
Summary of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
       
  Three Months Ended  
       
  Dec. 31, Sept. 30, Dec. 31,
  2011 2011 2010
       
Revenue by function:      
Technology   $ 160,822  $ 165,476  $ 142,869
Finance & accounting   56,672  54,297  53,449
Health information management   18,578  17,370  15,876
Clinical research   26,210  27,967  22,988
Government solutions   23,269  23,881  23,313
Total revenue 285,551 288,991 258,495
       
Revenue by time:      
Flex 275,154 277,123 247,437
Search 10,397 11,868 11,058
Total revenue 285,551 288,991 258,495
       
Costs of services 196,447 196,953 176,086
Gross profit  89,104  92,038  82,409
GP % 31.2% 31.8% 31.9%
Flex GP % 28.6% 28.9% 28.8%
       
Selling, general & administrative expenses 74,461 75,134 68,700
Depreciation & amortization 3,075 3,072 3,262
       
Income from operations 11,568 13,832 10,447
       
Other expense, net 365 301 266
       
Income before income taxes 11,203 13,531 10,181
       
Income tax expense 4,118 5,085 3,843
       
Net income   $ 7,085  $ 8,446  $ 6,338
       
Earnings per share - diluted  $ 0.20  $ 0.22  $ 0.16
Adjusted EBITDA per share  $ 0.50  $ 0.52  $ 0.37
Shares outstanding - diluted  35,709 38,228 40,848
       
Adjusted EBITDA   $ 17,866  $ 20,084  $ 15,207
       
Other information:      
Capital expenditures  $ 2,445  $ 2,113  $ 3,314
Equity-based compensation expense, net  $ 2,061  $ 1,931  $ 1,383
       
Billing days  61  64  61
 
 
Kforce Inc.
Summary of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
     
  Twelve Months Ended
     
  Dec. 31, Dec. 31,
  2011 2010
     
Revenue by function:    
Technology   $ 624,012  $ 538,566
Finance & accounting   219,575  187,196
Health information management   68,711  57,763
Clinical research   106,172  104,150
Government solutions   92,449  103,132
Total revenue 1,110,919 990,807
     
Revenue by time:    
Flexible 1,066,374 951,430
Perm 44,545 39,377
Total revenue 1,110,919 990,807
     
Costs of services 764,616 678,393
Gross profit  346,303  312,414
GP % 31.2% 31.5%
Flex GP % 28.3% 28.7%
     
Selling, general & administrative expenses 288,981 265,183
Depreciation & amortization 12,694 12,611
     
Income from operations 44,628 34,620
     
Other expense, net 1,317 1,296
     
Income before income taxes 43,311 33,324
     
Income tax expense 16,155 12,690
     
Net income   $ 27,156  $ 20,634
     
Earnings per share - diluted  $ 0.70  $ 0.51
Adjusted EBITDA per share  $ 1.79  $ 1.31
Shares outstanding - diluted  38,831 40,503
     
Adjusted EBITDA   $ 69,314  $ 53,225
     
Other information:    
Capital expenditures  $ 7,662  $ 39,857
Equity-based compensation expense, net  $ 7,534  $ 4,705
     
Billing days  252  251
       
       
    Kforce Inc.  
    Key Statistics  
    (Unaudited)  
       
       
  Q4 2011 Q3 2011 Q4 2010
       
Total Firm      
       
Flex revenue (000's)  $ 275,154  $ 277,123  $ 247,437
Revenue per billing day (000's)  $ 4,511  $ 4,330  $ 4,056
Sequential flex revenue change -0.7% 5.8% -0.6%
Hours (000's)  4,515  4,486  4,184
Flex GP % 28.6% 28.9% 28.8%
       
Search revenue (000's)  $ 10,397  $ 11,868  $ 11,058
Placements   769  884  811
Average fee  $ 13,525  $ 13,424  $ 13,633
Billing days  61  64  61
       
Technology      
       
Flex revenue (000's)  $ 156,543  $ 160,285  $ 138,467
Revenue per billing day (000's)  $ 2,566  $ 2,504  $ 2,270
Sequential flex revenue change -2.3% 6.9% 0.8%
Hours (000's)  2,420  2,520  2,233
Flex GP % 27.8% 27.7% 28.0%
       
Search revenue (000's)  $ 4,279  $ 5,191  $ 4,402
Placements   280  354  309
Average fee  $ 15,318  $ 14,682  $ 14,257
       
Finance & Accounting      
       
Flex revenue (000's)  $ 50,926  $ 48,046  $ 47,512
Revenue per billing day (000's)  $ 835  $ 751  $ 779
Sequential flex revenue change 6.0% 1.1% 6.9%
Hours (000's)  1,517  1,406  1,447
Flex GP % 30.0% 30.1% 30.7%
       
Search revenue (000's)  $ 5,746  $ 6,251  $ 5,937
Placements   450  499  472
Average fee  $ 12,759  $ 12,516  $ 12,570
       
Clinical Research      
       
Flex revenue (000's)  $ 25,971  $ 27,703  $ 22,497
Revenue per billing day (000's)  $ 426  $ 433  $ 369
Sequential flex revenue change -6.3% 7.6% -14.6%
Hours (000's)  290  297  249
Flex GP % 25.5% 26.2% 24.2%
       
Search revenue (000's)  $ 239  $ 264  $ 491
Placements   10  10  12
Average fee  $ 23,876  $ 26,393  $ 40,895
       
Health Information Management      
       
Flex revenue (000's)  $ 18,445  $ 17,208  $ 15,648
Revenue per billing day (000's)  $ 302  $ 269  $ 256
Sequential flex revenue change 7.2% 3.7% 6.6%
Hours (000's)  288  263  255
Flex GP % 34.6% 36.6% 32.7%
       
Search revenue (000's)  $ 133  $ 162  $ 228
Placements   29  21  18
Average fee  $ 4,582  $ 7,678  $ 12,674
       
Government Solutions      
       
Flex revenue (000's)  $ 23,269  $ 23,881  $ 23,313
Revenue per billing day (000's)  $ 382  $ 373  $ 382
Sequential flex revenue change -2.6% 8.8% -11.0%
Flex GP % 29.5% 32.3% 32.0%
 
 
 Kforce Inc. 
 Consolidated Balance Sheets 
 (In Thousands) 
 (Unaudited) 
     
   Dec 31, 2011   Dec 31, 2010 
 ASSETS     
     
 Current Assets:     
 Cash and cash equivalents   $ 939  $ 1,055
 Trade receivables, net of allowances  174,764  148,507
 Income tax refund receivable  250  5,675
 Deferred tax asset, net  4,694  4,950
 Prepaid expenses and other current assets  5,592  5,014
 Total current assets   186,239  165,201
     
 Fixed assets, net   36,124  38,130
 Other assets, net   32,554  32,941
 Deferred tax asset, net   10,042  8,907
 Intangible assets, net   6,635  7,787
 Goodwill   138,078  138,078
 Total assets   $ 409,672  $ 391,044
     
 LIABILITIES AND STOCKHOLDERS' EQUITY     
     
 Current Liabilities:     
 Accounts payable and other accrued liabilities   $ 26,314  $ 30,602
 Accrued payroll costs   55,151  54,461
 Current debt - credit facility   --   10,825
 Other current liabilities   1,463  4,185
 Income taxes payable   236  250
 Total current liabilities   83,164  100,323
     
 Long-term debt - credit facility   49,526  -- 
 Long-term debt - other   1,609  2,103
 Other long-term liabilities   42,258  34,801
 Total liabilities   176,557  137,227
     
 Commitments and contingencies     
     
 Stockholders' Equity:     
 Preferred stock   --  --
 Common stock   686  665
 Additional paid-in capital   372,212  355,869
 Accumulated other comprehensive loss   (4,050)  (1,480)
 Retained earnings   89,135  61,979
 Treasury stock, at cost   (224,868)  (163,216)
 Total stockholders' equity   233,115  253,817
 Total liabilities and stockholders' equity   $ 409,672  $ 391,044
 
 
Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
             
Quarterly Adjusted EBITDA            
  Three Months Ended
  Dec. 31,  Sept. 30, Dec. 31,  
  2011  2011 2010  
  $ Per share $ Per share $ Per share
             
Net income  $ 7,085  $ 0.20  $ 8,446  $ 0.22  $ 6,338  $ 0.16
Depreciation & amortization  3,075  0.09  3,072  0.08  3,262  0.08
Amortization of restricted stock & PARS  3,230   0.09  3,088  0.08  1,499  0.03
Interest expense and other  358   0.01  393  0.01  265  0.01
Income tax expense  4,118   0.11  5,085  0.13  3,843  0.09
Adjusted EBITDA  $ 17,866  $ 0.50  $ 20,084  $ 0.52  $ 15,207  $ 0.37
             
Weighted average shares outstanding - diluted   35,709   38,228    40,848
             
             
Adjusted EBITDA, a non-GAAP financial measure, is defined as net income before non-cash impairment charges, interest, income taxes, depreciation and amortization and amortization of stock-based compensation expense. Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. 
             
Quarterly Net Income before Equity-Based Compensation Expense            
             
  Three Months Ended
  Dec. 31, Sept. 30, Dec. 31,   
  2011 2011 2010
  $ Per share $ Per share $ Per share
             
Net income  $ 7,085  $ 0.20  $ 8,446  $ 0.22  $ 6,338  $ 0.16
Equity-based compensation expense, net:            
Alternative LTI expense  28  0.00  5  0.00  722  0.02
Amortization of restricted stock & PARS  3,230  0.09  3,088  0.08  1,499  0.03
Income tax benefit  (1,197)  (0.03)  (1,162)  (0.03)  (838)  (0.02)
Equity-based compensation expense, net  2,061  0.06  1,931  0.05  1,383  0.03
Net income before equity-based compensation expense  $ 9,146  $ 0.26  $ 10,377  $ 0.27  $ 7,721  $ 0.19
             
 Weighted average shares outstanding - diluted    35,709    38,228    40,848
             
             
             
Net Income before Equity-Based Compensation Expense, a non-GAAP financial measure, is defined as net income before compensation expense incurred in conjunction with share-based payment awards and alternative long-term incentive awards. Kforce measures the cost of employee services received in exchange for an equity based award based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually derived based on the terms of the award but may be the vesting period. 
 
Adjusted EBITDA and Net Income before Equity-Based Compensation Expense are key measures used by management to evaluate its operations and to provide useful information to investors. These measures should not be considered in isolation or as an alternative to net income, cash flows data or other financial statement information presented in the consolidated financial statements as indicators of financial performance or liquidity. These measurements are not determined in accordance with generally accepted accounting principles and are thus susceptible to varying calculations. The measures as presented may not be comparable to similarly titled measures of other companies.
 
Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
         
Year to Date Adjusted EBITDA        
  Twelve Months Ended
  Dec. 31, Dec. 31,   
  2011  2010
  $ Per share $ Per share
         
Net Income  $ 27,156  $ 0.70  $ 20,634  $ 0.51
Depreciation & amortization  12,694  0.33  12,611  0.31
Amortization of restricted stock & PARS  11,976  0.31  6,036  0.15
Interest expense and other  1,333  0.03  1,254  0.03
Income tax expense  16,155  0.42  12,690  0.31
Adjusted EBITDA  $ 69,314  $ 1.79  $ 53,225  $ 1.31
         
Weighted average shares outstanding - diluted     38,831    40,503
         
Adjusted EBITDA, a non-GAAP financial measure, is defined as net income before non-cash impairment charges, interest, income taxes, depreciation and amortization and amortization of stock-based compensation expense. Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance. 
         
Year to Date Net Income before Equity-Based Compensation Expense        
         
  Twelve Months Ended
  Dec. 31, Dec. 31,
  2011 2010
  $ Per share $ Per share
         
Net income  $ 27,156  $ 0.70  $ 20,634  $ 0.51
Equity-based compensation expense, net:        
Alternative LTI expense  40  0.00  1,563  0.04
Amortization of restricted stock & PARS  11,976  0.31  6,036  0.15
Income tax benefit  (4,482)  (0.12)  (2,894)  (0.07)
Equity-based compensation expense, net  7,534  0.19  4,705  0.12
Net income before equity-based compensation expense  $ 34,690  $ 0.89  $ 25,339  $ 0.63
         
Weighted average shares outstanding - diluted    38,831   40,503
         
         
Net Income before Equity-Based Compensation Expense, a non-GAAP financial measure, is defined as net income before compensation expense incurred in conjunction with share-based payment awards and alternative long-term incentive awards. Kforce measures the cost of employee services received in exchange for an equity based award based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually derived based on the terms of the award but may be the vesting period. 
         
Adjusted EBITDA and Net Income before Equity-Based Compensation Expense are key measures used by management to evaluate its operations and to provide useful information to investors. These measures should not be considered in isolation or as an alternative to net income, cash flows data or other financial statement information presented in the consolidated financial statements as indicators of financial performance or liquidity. These measurements are not determined in accordance with generally accepted accounting principles and are thus susceptible to varying calculations. The measures as presented may not be comparable to similarly titled measures of other companies.
CONTACT: Michael R. Blackman

         Chief Corporate Development Officer

         (813) 552-2927

Kforce Inc. Logo

Source: Kforce Inc.

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