QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
State or other jurisdiction of incorporation or organization | IRS Employer Identification No. |
Address of principal executive offices | Zip Code |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
x | Accelerated filer | ☐ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Direct costs | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Income from operations | |||||||||||||||||||||||
Other (income) expense, net | ( | ( | |||||||||||||||||||||
Income from operations, before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income | |||||||||||||||||||||||
Other comprehensive income, net of tax: | |||||||||||||||||||||||
Defined benefit pension plans | |||||||||||||||||||||||
Change in fair value of interest rate swaps | ( | ( | |||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share – basic | $ | $ | $ | $ | |||||||||||||||||||
Earnings per share – diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted average shares outstanding – basic | |||||||||||||||||||||||
Weighted average shares outstanding – diluted |
June 30, 2022 | December 31, 2021 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade receivables, net of allowances of $ | |||||||||||
Income tax refund receivable | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Total current assets | |||||||||||
Fixed assets, net | |||||||||||
Other assets, net | |||||||||||
Deferred tax assets, net | |||||||||||
Goodwill | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable and other accrued liabilities | $ | $ | |||||||||
Accrued payroll costs | |||||||||||
Current portion of operating lease liabilities | |||||||||||
Income taxes payable | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt – credit facility | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note L) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, $ | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive income | |||||||||||
Retained earnings | |||||||||||
Treasury stock, at cost; | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Retained Earnings | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance for stock-based compensation and dividends, net of forfeitures | ( | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swaps, net of tax benefit of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2022 | $ | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance for stock-based compensation and dividends, net of forfeitures | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swaps, net of tax expense of $ | — | — | — | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2022 | ( | ||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive (Loss) Income | Treasury Stock | Total Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Retained Earnings | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance for stock-based compensation and dividends, net of forfeitures | — | — | ( | — | — | ||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Defined benefit pension plan, no tax benefit | |||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap, net of tax benefit of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | ( | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Issuance for stock-based compensation and dividends, net of forfeitures | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Employee stock purchase plan | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Dividends ($ | — | — | — | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||
Defined benefit pension plan, net of tax provision of $ | |||||||||||||||||||||||||||||||||||||||||||||||
Change in fair value of interest rate swap, net of tax benefit of $ | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Repurchases of common stock | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Balance, June 30, 2021 | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to cash provided by operating activities: | |||||||||||
Deferred income tax provision, net | |||||||||||
Provision for credit losses | ( | ( | |||||||||
Depreciation and amortization | |||||||||||
Stock-based compensation expense | |||||||||||
Defined benefit pension plan expense | |||||||||||
Loss (Gain) on disposal or impairment of assets | ( | ||||||||||
Noncash lease expense | |||||||||||
Loss on equity method investment | |||||||||||
Other | |||||||||||
Increase in operating assets | |||||||||||
Trade receivables, net | ( | ( | |||||||||
Other assets | ( | ( | |||||||||
Increase in operating liabilities | |||||||||||
Accrued payroll costs | |||||||||||
Other liabilities | |||||||||||
Cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | ( | ( | |||||||||
Contributions to WorkLLama, joint venture | ( | ( | |||||||||
Note receivable issued to WorkLLama, joint venture | ( | ||||||||||
Net proceeds from the sale of assets | |||||||||||
Cash (used in) provided by investing activities | ( | ||||||||||
Cash flows from financing activities: | |||||||||||
Payments on credit facility | ( | ||||||||||
Repurchases of common stock | ( | ( | |||||||||
Cash dividends | ( | ( | |||||||||
Payments on other financing arrangements | ( | ( | |||||||||
Cash used in financing activities | ( | ( | |||||||||
Change in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents, beginning of period | |||||||||||
Cash and cash equivalents, end of period | $ | $ |
Six Months Ended June 30, | |||||||||||
Supplemental Disclosure of Cash Flow Information | 2022 | 2021 | |||||||||
Cash Paid During the Period For: | |||||||||||
Income taxes | $ | $ | |||||||||
Operating lease liabilities | |||||||||||
Interest, net | |||||||||||
Non-Cash Investing and Financing Transactions: | |||||||||||
ROU assets obtained from operating leases | $ | $ | |||||||||
Employee stock purchase plan | |||||||||||
Unsettled repurchases of common stock | |||||||||||
Technology | FA | Total | |||||||||||||||
Three Months Ended June 30, | |||||||||||||||||
2022 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Gross profit | $ | $ | $ | ||||||||||||||
Operating and other expenses | $ | ||||||||||||||||
Income from operations, before income taxes | $ | ||||||||||||||||
2021 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Gross profit | $ | $ | $ | ||||||||||||||
Operating and other expenses | $ | ||||||||||||||||
Income from operations, before income taxes | $ | ||||||||||||||||
Six Months Ended June 30, | |||||||||||||||||
2022 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Gross profit | $ | $ | $ | ||||||||||||||
Operating and other expenses | $ | ||||||||||||||||
Income from operations, before income taxes | $ | ||||||||||||||||
2021 | |||||||||||||||||
Revenue | $ | $ | $ | ||||||||||||||
Gross profit | $ | $ | $ | ||||||||||||||
Operating and other expenses | $ | ||||||||||||||||
Income from operations, before income taxes | $ |
Technology | FA | Total | |||||||||||||||
Three Months Ended June 30, | |||||||||||||||||
2022 | |||||||||||||||||
Revenue by type: | |||||||||||||||||
Flex revenue | $ | $ | $ | ||||||||||||||
Direct Hire revenue | |||||||||||||||||
Total Revenue | $ | $ | $ | ||||||||||||||
2021 | |||||||||||||||||
Revenue by type: | |||||||||||||||||
Flex revenue | $ | $ | $ | ||||||||||||||
Direct Hire revenue | |||||||||||||||||
Total Revenue | $ | $ | $ | ||||||||||||||
Six Months Ended June 30, | |||||||||||||||||
2022 | |||||||||||||||||
Revenue by type: | |||||||||||||||||
Flex revenue | $ | $ | $ | ||||||||||||||
Direct Hire revenue | |||||||||||||||||
Total Revenue | $ | $ | $ | ||||||||||||||
2021 | |||||||||||||||||
Revenue by type: | |||||||||||||||||
Flex revenue | $ | $ | $ | ||||||||||||||
Direct Hire revenue | |||||||||||||||||
Total Revenue | $ | $ | $ |
Allowance for credit losses, January 1, 2022 | $ | ||||
Current period provision (credit) | ( | ||||
Write-offs charged against the allowance, net of recoveries of amounts previously written off | ( | ||||
Allowance for credit losses, June 30, 2022 | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Assets held in Rabbi Trust | $ | $ | |||||||||
Capitalized software, net (1) | |||||||||||
Equity method investment (2) | |||||||||||
Deferred loan costs, net | |||||||||||
Interest rate swap derivative instruments | |||||||||||
Other non-current assets (3) | |||||||||||
Total Other assets, net | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Accounts payable and other accrued liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Total Accounts payable and other accrued liabilities | $ | $ | |||||||||
Accrued payroll costs: | |||||||||||
Payroll and benefits | $ | $ | |||||||||
Payroll taxes | |||||||||||
Health insurance liabilities | |||||||||||
Workers’ compensation liabilities | |||||||||||
Total Accrued payroll costs | $ | $ |
June 30, 2022 | December 31, 2021 | ||||||||||
Deferred compensation plan | $ | $ | |||||||||
Other long-term liabilities | |||||||||||
Total Other long-term liabilities | $ | $ |
Number of Restricted Stock | Weighted-Average Grant Date Fair Value | Total Intrinsic Value of Restricted Stock Vested | |||||||||||||||
Outstanding at December 31, 2021 | $ | ||||||||||||||||
Granted | $ | ||||||||||||||||
Forfeited | ( | $ | |||||||||||||||
Vested | ( | $ | $ | ||||||||||||||
Outstanding at June 30, 2022 | $ |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Accumulated derivative instrument gain (loss), beginning of period | $ | $ | ( | ||||||||
Net change associated with current period hedging transactions (1) | ( | ||||||||||
Accumulated derivative instrument gain (loss), end of period | $ | — | $ | ( |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
Revenue by segment: | |||||||||||||||||||||||
Technology | 88.1 | % | 77.0 | % | 87.2 | % | 77.0 | % | |||||||||||||||
FA | 11.9 | 23.0 | 12.8 | 23.0 | |||||||||||||||||||
Total Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Revenue by type: | |||||||||||||||||||||||
Flex | 96.1 | % | 97.0 | % | 96.3 | % | 97.2 | % | |||||||||||||||
Direct Hire | 3.9 | 3.0 | 3.7 | 2.8 | |||||||||||||||||||
Total Revenue | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Gross profit | 30.0 | % | 29.5 | % | 29.9 | % | 28.4 | % | |||||||||||||||
Selling, general and administrative expenses | 22.0 | % | 21.0 | % | 22.4 | % | 21.2 | % | |||||||||||||||
Depreciation and amortization | 0.2 | % | 0.3 | % | 0.3 | % | 0.3 | % | |||||||||||||||
Income from operations | 7.8 | % | 8.2 | % | 7.2 | % | 6.9 | % | |||||||||||||||
Income from operations, before income taxes | 8.4 | % | 7.4 | % | 7.4 | % | 6.3 | % | |||||||||||||||
Net income | 6.2 | % | 5.2 | % | 5.4 | % | 4.5 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Technology | |||||||||||||||||||||||||||||||||||
Flex revenue | $ | 375,507 | 23.3 | % | $ | 304,645 | $ | 727,223 | 25.5 | % | $ | 579,429 | |||||||||||||||||||||||
Direct Hire revenue | 9,088 | 49.4 | % | 6,083 | 17,277 | 59.1 | % | 10,859 | |||||||||||||||||||||||||||
Total Technology revenue | $ | 384,595 | 23.8 | % | $ | 310,728 | $ | 744,500 | 26.1 | % | $ | 590,288 | |||||||||||||||||||||||
FA | |||||||||||||||||||||||||||||||||||
Flex revenue | $ | 44,193 | (49.0) | % | $ | 86,717 | $ | 94,343 | (43.1) | % | $ | 165,780 | |||||||||||||||||||||||
Direct Hire revenue | 7,728 | 25.3 | % | 6,169 | 14,640 | 35.9 | % | 10,771 | |||||||||||||||||||||||||||
Total FA revenue | $ | 51,921 | (44.1) | % | $ | 92,886 | $ | 108,983 | (38.3) | % | $ | 176,551 | |||||||||||||||||||||||
Total Flex revenue | $ | 419,700 | 7.2 | % | $ | 391,362 | $ | 821,566 | 10.2 | % | $ | 745,209 | |||||||||||||||||||||||
Total Direct Hire revenue | 16,816 | 37.3 | % | 12,252 | 31,917 | 47.6 | % | 21,630 | |||||||||||||||||||||||||||
Total Revenue | $ | 436,516 | 8.2 | % | $ | 403,614 | $ | 853,483 | 11.3 | % | $ | 766,839 |
Year-Over-Year Revenue Growth Rates | ||||||||||||||||||||||||||||||||
(Per Billing Day) | ||||||||||||||||||||||||||||||||
Q2 2022 | Q1 2022 | Q4 2021 | Q3 2021 | Q2 2021 | ||||||||||||||||||||||||||||
Billing Days | 64 | 64 | 61 | 64 | 64 | |||||||||||||||||||||||||||
Technology | 23.3 | % | 26.0 | % | 31.0 | % | 28.9 | % | 20.9 | % | ||||||||||||||||||||||
FA | (49.0) | % | (37.6) | % | (28.9) | % | (41.3) | % | 2.7 | % | ||||||||||||||||||||||
Total Flex | 7.2 | % | 11.8 | % | 16.6 | % | 9.1 | % | 16.3 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, 2022 vs. June 30, 2021 | June 30, 2022 vs. June 30, 2021 | ||||||||||||||||||||||
Technology | FA | Technology | FA | ||||||||||||||||||||
Key Drivers - Increase (Decrease) | |||||||||||||||||||||||
Volume - hours billed | $ | 42,330 | $ | (53,490) | $ | 97,888 | $ | (94,021) | |||||||||||||||
Bill rate | 27,874 | 10,978 | 48,620 | 22,572 | |||||||||||||||||||
Billable expenses | 658 | (12) | 1,286 | 12 | |||||||||||||||||||
Total change in Flex revenue | $ | 70,862 | $ | (42,524) | $ | 147,794 | $ | (71,437) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Technology | 4,292 | 14.0 | % | 3,766 | 8,414 | 17.0 | % | 7,194 | |||||||||||||||||||||||||||
FA | 938 | (61.7) | % | 2,449 | 2,088 | (56.7) | % | 4,825 | |||||||||||||||||||||||||||
Total Flex hours billed | 5,230 | (15.8) | % | 6,215 | 10,502 | (12.6) | % | 12,019 |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, 2022 vs. June 30, 2021 | June 30, 2022 vs. June 30, 2021 | ||||||||||||||||||||||
Technology | FA | Technology | FA | ||||||||||||||||||||
Key Drivers - Increase (Decrease) | |||||||||||||||||||||||
Volume - number of placements | $ | 1,480 | $ | 496 | $ | 4,343 | $ | 2,593 | |||||||||||||||
Placement fee | 1,525 | 1,063 | 2,075 | 1,276 | |||||||||||||||||||
Total change in Direct Hire revenue | $ | 3,005 | $ | 1,559 | $ | 6,418 | $ | 3,869 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Technology | 369 | 24.2 | % | 297 | 757 | 39.9 | % | 541 | |||||||||||||||||||||||||||
FA | 431 | 8.3 | % | 398 | 860 | 24.1 | % | 693 | |||||||||||||||||||||||||||
Total number of placements | 800 | 15.1 | % | 695 | 1,617 | 31.0 | % | 1,234 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Technology | $ | 24,654 | 20.2 | % | $ | 20,517 | $ | 22,826 | 13.7 | % | $ | 20,084 | |||||||||||||||||||||||
FA | 17,946 | 15.9 | % | 15,478 | $ | 17,033 | 9.6 | % | $ | 15,548 | |||||||||||||||||||||||||
Total average placement fee | $ | 21,040 | 19.4 | % | $ | 17,628 | $ | 19,746 | 12.6 | % | $ | 17,537 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Technology | 28.6 | % | 0.7 | % | 28.4 | % | 28.5 | % | 3.6 | % | 27.5 | % | |||||||||||||||||||||||
FA | 40.7 | % | 23.3 | % | 33.0 | % | 39.1 | % | 25.3 | % | 31.2 | % | |||||||||||||||||||||||
Total gross profit percentage | 30.0 | % | 1.7 | % | 29.5 | % | 29.9 | % | 5.3 | % | 28.4 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Technology | 26.9 | % | (0.4) | % | 27.0 | % | 26.8 | % | 2.3 | % | 26.2 | % | |||||||||||||||||||||||
FA | 30.4 | % | 7.4 | % | 28.3 | % | 29.6 | % | 10.9 | % | 26.7 | % | |||||||||||||||||||||||
Total Flex gross profit percentage | 27.2 | % | (0.4) | % | 27.3 | % | 27.1 | % | 3.0 | % | 26.3 | % |
Three Months Ended | Six Months Ended | ||||||||||||||||||||||
June 30, 2022 vs. June 30, 2021 | June 30, 2022 vs. June 30, 2021 | ||||||||||||||||||||||
Technology | FA | Technology | FA | ||||||||||||||||||||
Key Drivers - Increase (Decrease) | |||||||||||||||||||||||
Revenue impact | $ | 19,109 | $ | (12,028) | $ | 38,683 | $ | (19,101) | |||||||||||||||
Profitability impact | (432) | 928 | 4,751 | 2,725 | |||||||||||||||||||
Total change in Flex gross profit | $ | 18,677 | $ | (11,100) | $ | 43,434 | $ | (16,376) |
2022 | % of Revenue | 2021 | % of Revenue | ||||||||||||||||||||
Three Months Ended June 30, | |||||||||||||||||||||||
Compensation, commissions, payroll taxes and benefits costs | $ | 82,368 | 18.9 | % | $ | 73,914 | 18.3 | % | |||||||||||||||
Other (1) | 13,779 | 3.2 | % | 10,702 | 2.7 | % | |||||||||||||||||
Total SG&A | $ | 96,147 | 22.0 | % | $ | 84,616 | 21.0 | % | |||||||||||||||
Six Months Ended June 30, | |||||||||||||||||||||||
Compensation, commissions, payroll taxes and benefits costs | $ | 162,592 | 19.1 | % | $ | 140,788 | 18.4 | % | |||||||||||||||
Other (1) | 28,604 | 3.4 | % | 21,857 | 2.9 | % | |||||||||||||||||
Total SG&A | $ | 191,196 | 22.4 | % | $ | 162,645 | 21.2 | % |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
2022 | Increase (Decrease) | 2021 | 2022 | Increase (Decrease) | 2021 | ||||||||||||||||||||||||||||||
Fixed asset depreciation (includes finance leases) | $ | 628 | (15.7) | % | $ | 745 | $ | 1,305 | (16.0) | % | $ | 1,554 | |||||||||||||||||||||||
Capitalized software amortization | 448 | 0.2 | % | 447 | 864 | 2.9 | % | 840 | |||||||||||||||||||||||||||
Total Depreciation and amortization | $ | 1,076 | (9.7) | % | $ | 1,192 | $ | 2,169 | (9.4) | % | $ | 2,394 |
Six Months Ended June 30, | |||||||||||
2022 | 2021 | ||||||||||
Net cash provided by operating activities | $ | 70,760 | $ | 36,574 | |||||||
Capital expenditures | (3,458) | (2,919) | |||||||||
Free cash flow | 67,302 | 33,655 | |||||||||
Payments on credit facility | (100,000) | — | |||||||||
Repurchases of common stock | (19,600) | (29,371) | |||||||||
Cash dividends | (12,187) | (9,532) | |||||||||
Contributions to WorkLLama, joint venture | (500) | (4,500) | |||||||||
Net proceeds from the sale of assets | — | 23,742 | |||||||||
Note receivable issued to WorkLLama, joint venture | (2,000) | — | |||||||||
Other | (30) | (201) | |||||||||
Change in cash and cash equivalents | $ | (67,015) | $ | 13,793 |
2022 | 2021 | ||||||||||
Three Months Ended June 30, | |||||||||||
Net income | $ | 26,916 | $ | 21,188 | |||||||
Depreciation and amortization | 1,076 | 1,192 | |||||||||
Gain on sale of corporate headquarters | — | (2,051) | |||||||||
Stock-based compensation expense | 4,410 | 3,532 | |||||||||
Interest expense, net | 371 | 765 | |||||||||
Gain from swap termination | (4,059) | — | |||||||||
Income tax expense | 9,605 | 8,823 | |||||||||
SERP termination expense | — | 1,821 | |||||||||
Loss from equity method investment | 1,015 | 531 | |||||||||
Adjusted EBITDA | $ | 39,334 | $ | 35,801 | |||||||
Six Months Ended June 30, | |||||||||||
Net income | $ | 46,097 | $ | 34,449 | |||||||
Depreciation and amortization | 2,169 | 2,394 | |||||||||
Gain on sale of corporate headquarters | — | (2,051) | |||||||||
Stock-based compensation expense | 8,848 | 6,935 | |||||||||
Interest expense, net | 979 | 1,562 | |||||||||
Gain from swap termination | (4,059) | — | |||||||||
Income tax expense | 16,735 | 13,728 | |||||||||
SERP termination expense | — | 1,821 | |||||||||
Loss from equity method investment | 1,840 | 1,022 | |||||||||
Adjusted EBITDA | $ | 72,609 | $ | 59,860 |
Six Months Ended June 30, | ||||||||||||||
2022 | 2021 | |||||||||||||
Open market repurchases | $ | 19,136 | $ | 29,591 | ||||||||||
Repurchase of shares related to tax withholding requirements for vesting of restricted stock | 464 | 336 | ||||||||||||
Total cash flow impact of common stock repurchases | $ | 19,600 | $ | 29,927 | ||||||||||
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||
April 1, 2022 to April 30,2022 | — | $ | — | — | $ | 98,787,598 | |||||||||||||||||
May 1, 2022 to May 31, 2022 | 4,009 | $ | 70.40 | — | $ | 98,787,598 | |||||||||||||||||
June 1, 2022 to June 30, 2022 | 158,783 | $ | 62.98 | 158,783 | $ | 88,786,772 | |||||||||||||||||
Total | 162,792 | $ | 63.17 | 158,783 | $ | 88,786,772 |
Exhibit Number | Description | |||||||
3.1 | Amended and Restated Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 33-91738) filed with the SEC on April 28, 1995. | |||||||
Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | ||||||||
Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | ||||||||
Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | ||||||||
Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on May 17, 2000. | ||||||||
Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 29, 2002. | ||||||||
Amended & Restated Bylaws, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on April 29, 2013. | ||||||||
Certification by the Chief Executive Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification by the Chief Financial Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification by the Chief Executive Officer of Kforce Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
Certification by the Chief Financial Officer of Kforce Inc. pursuant to 18 U.S.C. Section 2350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
101.1 | The following material from this Quarterly Report on Form 10-Q of Kforce Inc. for the period ended June 30, 2022, formatted in XBRL Part I, Item 1 of this Form 10-Q formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income; (ii) Unaudited Condensed Consolidated Balance Sheets; (iii) Unaudited Condensed Consolidated Statement of Changes in Stockholders’ Equity; (iv) Unaudited Condensed Consolidated Statements of Cash Flows; and (v) related notes to these financial statements. | |||||||
104 | Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |
KFORCE INC. | ||||||||||||||
Date: | August 3, 2022 | By: | /s/ DAVID M. KELLY | |||||||||||
David M. Kelly | ||||||||||||||
Executive Vice President, Chief Financial Officer | ||||||||||||||
(Principal Financial Officer) | ||||||||||||||
Date: | August 3, 2022 | By: | /s/ JEFFREY B. HACKMAN | |||||||||||
Jeffrey B. Hackman | ||||||||||||||
Senior Vice President, Finance and Accounting | ||||||||||||||
(Principal Accounting Officer) |
/s/ JOSEPH J. LIBERATORE | |||||
Joseph J. Liberatore | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) |
/s/ DAVID M. KELLY | |||||
David M. Kelly, | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) |
Date: August 3, 2022 | /s/ JOSEPH J. LIBERATORE | ||||
Joseph J. Liberatore | |||||
Chief Executive Officer | |||||
(Principal Executive Officer) |
/s/ DAVID M. KELLY | |||||
David M. Kelly, | |||||
Executive Vice President and Chief Financial Officer | |||||
(Principal Financial Officer) |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Income Statement [Abstract] | ||||
Revenue | $ 436,516 | $ 403,614 | $ 853,483 | $ 766,839 |
Direct costs | 305,444 | 284,683 | 598,525 | 549,226 |
Gross profit | 131,072 | 118,931 | 254,958 | 217,613 |
Selling, general and administrative expenses | 96,147 | 84,616 | 191,196 | 162,645 |
Depreciation and amortization | 1,076 | 1,192 | 2,169 | 2,394 |
Income from operations | 33,849 | 33,123 | 61,593 | 52,574 |
Other (income) expense, net | (2,672) | 3,112 | (1,239) | 4,397 |
Income from operations, before income taxes | 36,521 | 30,011 | 62,832 | 48,177 |
Income tax expense | 9,605 | 8,823 | 16,735 | 13,728 |
Net income | 26,916 | 21,188 | 46,097 | 34,449 |
Other comprehensive income, net of tax: | ||||
Defined benefit pension plans | 0 | 3,056 | 0 | 3,103 |
Change in fair value of interest rate swaps | (2,917) | 10 | (615) | 949 |
Comprehensive income | $ 23,999 | $ 24,254 | $ 45,482 | $ 38,501 |
Earnings per share – basic (in dollars per share) | $ 1.33 | $ 1.02 | $ 2.27 | $ 1.66 |
Earnings per share - diluted (in dollars per share) | $ 1.30 | $ 1.00 | $ 2.22 | $ 1.61 |
Weighted average shares outstanding – basic (in shares) | 20,283 | 20,673 | 20,300 | 20,802 |
Weighted average shares outstanding – diluted (in shares) | 20,718 | 21,282 | 20,725 | 21,331 |
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 1,931 | $ 2,342 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 73,007,000 | 72,997,000 |
Treasury stock, shares (in shares) | 51,794,000 | 51,493,000 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
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Jun. 30, 2022 |
Mar. 31, 2022 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Jun. 30, 2021 |
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Statement of Stockholders' Equity [Abstract] | |||||
Dividend (in dollars per share) | $ 0.30 | $ 0.30 | $ 0.23 | $ 0.23 | |
Tax provision on defined benefit pension plan | $ 283 | ||||
Tax benefit on interest rate swap | $ (989) | $ 780 | $ 3 | $ 319 |
Summary of Significant Accounting Policies |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 1 - “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of the 2021 Annual Report on Form 10-K. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2021 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2021, was derived from our audited Consolidated Balance Sheet as of December 31, 2021, as presented in our 2021 Annual Report on Form 10-K. Our quarterly operating results are affected by the number of billing days in a particular quarter, the seasonality of our clients’ businesses and increased holiday and vacation days taken. In addition, we typically experience higher costs in the first quarter of each fiscal year as a result of certain U.S. state and federal employment tax resets, which adversely affects our gross profit and overall profitability relative to the remainder of the fiscal year. As such, the results of operations for any interim period may be impacted by these factors, among others, and are not necessarily indicative of, nor comparable to, the results of operations for a full year. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” “we,” the “Firm,” “management,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions relate to the following: allowance for credit losses; income taxes; self-insured liabilities for health insurance; and the impairment of goodwill, other long-lived assets and the equity method investment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. In addition, the potential economic consequences of the COVID-19 pandemic, inflationary pressures, and supply constraints, among others, have been and may continue to be uncertain, rapidly changing and difficult to predict. Therefore, our accounting estimates and assumptions might change materially in future periods. Health Insurance Except for certain fully insured health insurance lines of coverage, Kforce retains the risk of loss per participant for each health insurance claim up to $600 thousand in claims annually. Additionally, for all claim amounts exceeding $600 thousand, Kforce retains the risk of loss up to an aggregate annual loss of those claims of $200 thousand. For its partially self-insured lines of coverage, health insurance costs are accrued using estimates to approximate the liability for reported claims and incurred but not reported claims, which are primarily based upon an evaluation of historical claims experience, completion factors determined by an actuary and a qualitative review of our health insurance exposure including the extent of outstanding claims and expected changes in health insurance costs. Earnings per Share Basic earnings per share is computed as net income divided by the weighted average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the dilutive effect of potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. For the three and six months ended June 30, 2022, 435 thousand and 425 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2021, 609 thousand and 529 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2022, there were 168 thousand and 304 thousand anti-dilutive common stock equivalents, respectively. For the three and six months ended June 30, 2021, there was an insignificant amount of anti-dilutive common stock equivalents. Recently adopted accounting standards There were no new accounting standards adopted during the twenty-six weeks ended June 26, 2022 that had an impact on our financial statements. Recently Issued Accounting Standards Not Yet Adopted There are no accounting standards which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures.
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Reportable Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments Kforce provides services through our Technology and Finance and Accounting (“FA”) segments. Historically, and for the three and six months ended June 30, 2022, we have reported sales and gross profit information on a segment basis. Total assets, liabilities and operating expenses are not reported separately by segment as our operations are largely combined. The following table provides information on the operations of our segments (in thousands):
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Disaggregation of Revenue |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of Revenue | Disaggregation of RevenueThe following table provides the disaggregation of revenue by segment and type (in thousands):
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Allowance for Credit Losses |
6 Months Ended | ||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses on trade receivables is determined based on a number of factors such as recent and historical write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of trade receivables among clients and the current state of the U.S. economy. As part of our analysis, we apply credit loss rates to outstanding receivables by aging category. For certain clients, we perform a quarterly credit review, which considers the client’s credit rating and financial position as well as our total credit loss exposure. Trade receivables are written off after all reasonable collection efforts have been exhausted. Recoveries of trade receivables previously written off are recorded when received and are immaterial for the three and six months ended June 30, 2022. The following table presents the activity within the allowance for credit losses on trade receivables for the six months ended June 30, 2022 (in thousands):
The allowances on trade receivables presented in the Unaudited Condensed Consolidated Balance Sheets include $0.6 million and $0.6 million at June 30, 2022 and December 31, 2021, respectively, for reserves unrelated to credit losses.
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Other Assets, Net |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets, Net | Other Assets, Net Other assets, net consisted of the following (in thousands):
(1) Accumulated amortization of capitalized software was $35.9 million and $35.5 million as of June 30, 2022 and December 31, 2021, respectively. (2) In June 2019, Kforce entered into a joint venture resulting in a 50% noncontrolling interest in WorkLLama, LLC (“WorkLLama”), which is accounted for as an equity method investment. The loss on this WorkLLama investment was $1.0 million and $1.8 million for the three months and six months ended June 30, 2022, respectively. In addition, Kforce contributed $0.5 million and $9.0 million of capital during the six months ended June 30, 2022 and the year ended December 31, 2021, respectively. Refer to Note L - “Commitments and Contingencies” for more information on contingencies related to WorkLLama. (3)I Balance at June 30, 2022 Includes a promissory note receivable issued to WorkLLama for $2.0 million.
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Current Liabilities |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Current Liabilities | Current Liabilities The following table provides information on certain current liabilities (in thousands):
Our accounts payable balance includes vendor and third party payables. Our accrued liabilities balance includes the current portion of our deferred compensation plans liability, contract liabilities from contracts with customers (such as customer rebates), other accrued liabilities and amounts owed under the Supplemental Executive Retirement Plan (‘SERP ”). Effective April 30, 2021, Kforce’s Board of Directors irrevocably terminated the SERP. The benefits owed to the two participants under the SERP, as of June 30, 2022 and December 31, 2021, was $20.0 million in the aggregate, and were fully paid in July 2022, relieving us of any future obligation related to the SERP. Our payroll taxes as of June 30, 2022 and December 31, 2021 include approximately $19.3 million in payroll tax payments as a result of the application of the CARES Act 2020, which is anticipated to be repaid no later than December 31, 2022.
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Credit Facility |
6 Months Ended |
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Jun. 30, 2022 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit FacilityOn October 20, 2021, the Firm entered into an amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Securities, LLC, as lead arranger and bookrunner, Bank of America, N.A., as syndication agent, BMO Harris Bank, N.A., as documentation agent, and the lenders referred to therein (the “Amended and Restated Credit Facility”). Under the Amended and Restated Credit Facility, the Firm has a maximum borrowing capacity of $200.0 million, which may, subject to certain conditions and the participation of the lenders, be increased up to an aggregate additional amount of $150.0 million. The maturity date of the Amended and Restated Credit Facility is October 20, 2026. In May 2022, the Firm repaid the outstanding balance of $100.0 million in connection with the termination of its Swap B (as defined in Note J - “Derivative Instruments and Hedging Activity” to these financial statements) with a notional amount of $100.0 million. As of June 30, 2022 and December 31, 2021, $0 and $100.0 million was outstanding under the Amended and Restated Credit Facility.
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Other Long-Term Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands):
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Stock Incentive Plans |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plans | Stock Incentive Plans On April 22, 2021, Kforce’s shareholders approved the 2021 Stock Incentive Plan (the “2021 Plan”). The 2021 Plan allows for the issuance of stock options, stock appreciation rights (“SAR”), stock awards (including restricted stock awards (“RSAs”) and restricted stock units (“RSUs”)) and other stock-based awards. The aggregate number of shares reserved under the 2021 Plan is approximately 3.9 million. Grants of an option or SAR reduce the reserve by one share, while a stock award reduces the reserve by 2.72 shares. The 2021 Plan terminates on April 22, 2031. Restricted stock (including RSAs and RSUs) is granted to directors, executives and management either for awards related to Kforce’s annual long-term incentive program or as part of a compensation package for attraction and retention purposes. Restricted stock granted during the six months ended June 30, 2022 will vest over a period of to ten years, with vesting occurring in equal annual installments. During the three and six months ended June 30, 2022, stock-based compensation expense was $4.4 million and $8.8 million, respectively. During the three and six months ended June 30, 2021, stock-based compensation expense was $3.5 million and $6.9 million, respectively. The following table presents the restricted stock activity for the six months ended June 30, 2022 (in thousands, except per share amounts): As of June 30, 2022, total unrecognized stock-based compensation expense related to restricted stock was $42.0 million, which will be recognized over a weighted-average remaining period of 4.3 years
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Derivative Instrument and Hedging Activity |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instrument and Hedging Activity | Derivative Instruments and Hedging Activity As of June 30, 2022, the Firm did not have any outstanding derivative instruments. On April 21, 2017, Kforce entered into a forward-starting interest rate swap agreement with Wells Fargo Bank, N.A (“Swap A”). Swap A was effective on May 31, 2017 and matured on April 29, 2022. Other information related to Swap A is as follows: Notional amount - $25.0 million; and Fixed interest rate - 1.81%. On March 12, 2020, Kforce entered into a forward-starting interest rate swap agreement with Wells Fargo Bank, N.A (“Swap B”, together with Swap A, the "Swaps"). Swap B was effective on March 17, 2020. Other information related to Swap B is as follows: Scheduled maturity date - May 30, 2025; Fixed interest rate - 0.61%; and Notional amount - $100.0 million. The Firm used the Swaps as an interest rate risk management tool to mitigate the potential impact of rising interest rates on variable rate debt. The fixed interest rate for each Swap plus the applicable interest margin under our credit facility, was included in interest expense and recorded in Other (income) expense, net in the accompanying Consolidated Financial Statements of Operations and Comprehensive Income. In May 2022, the Firm terminated Swap B in anticipation of paying the outstanding amount on its credit facility, which was $100.0 million. At the termination of Swap B, the amount recorded in Accumulated other comprehensive income was recognized. The Firm received $4.1 million, which represented the gain and fair value of Swap B at the time of termination, and is included in other income in the accompanying Consolidated Financial Statements of Operations and Comprehensive Income. Both Swap A and B were designated as cash flow hedges. The change in the fair value of the Swaps was previously recorded as a component of Accumulated other comprehensive income (loss) in the unaudited consolidated financial statements. The following table sets forth the activity in the accumulated derivative instrument activity (in thousands):
(1) The accumulated derivative instrument activity as of the end the six month period ending June 30, 2022, includes the beginning balance of $823 thousand, a change in fair value of $3.1 million and a reversal due to termination of $3.9 million resulting in an ending balance of zero.
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Fair Value Measurements |
6 Months Ended |
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Jun. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Our interest rate swaps were previously measured at fair value using readily observable inputs, which are considered to be Level 2 inputs and were recorded in Other long-term liabilities within the accompanying Unaudited Condensed Consolidated Balance Sheets. In April 2022, Swap A matured and in May 2022, we terminated Swap B. Refer to Note J - “Derivative Instruments and Hedging Activity” for a complete discussion of our interest rate swaps. There were no transfers into or out of Level 1, 2 or 3 assets or liabilities during the six months ended June 30, 2022. The fair value of the interest rate swap derivative instrument asset at December 31, 2021 was $823 thousand and was classified as a Level 2 instrument.
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Commitments and Contingencies |
6 Months Ended |
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Jun. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Employment Agreements Kforce has employment agreements with certain executives that provide for certain post-employment benefits under certain circumstances. At June 30, 2022, our liability would be approximately $38.2 million if, following a change in control, all of the executives under contract were terminated without cause by the employer or if the executives resigned for good reason and $13.7 million if, in the absence of a change in control, all of the executives under contract were terminated by Kforce without cause or if the executives resigned for good reason. Litigation and Loss Contingencies Except as stated below, there have been no material developments with regard to the legal proceedings previously disclosed in our 2021 Annual Report on Form 10-K or in our Form 10-Q for the quarter ending March 31, 2022. On December 17, 2019, Kforce Inc., et al. was served with a complaint brought in Superior Court of the State of California, Alameda County. Kathleen Wahrer, et al. v. Kforce Inc., et al., Case Number: RG19047269. The former employee purports to bring a representative action on her own behalf and on behalf of other allegedly aggrieved employees pursuant to California Private Attorneys General Act of 2004, California Labor Code Section 2968, et seq. (“PAGA”) alleging violations of the California Labor Code, §201, et seq. (“Labor Code”). The plaintiff seeks civil penalties, interest, attorneys’ fees, and costs under the Labor Code for alleged failure to: provide and pay for work performed during meal and rest periods; properly calculate and pay all earned minimum and overtime wages; provide compliant wage statements; timely pay wages during employment and upon termination; and reimburse business expenses. At this stage in the litigation, it is not feasible to predict the outcome of this matter or reasonably estimate a range of loss, should a loss occur, from this proceeding. We intend to continue to vigorously defend the claims. On November 18, 2020, Kforce Inc., et al. was served with a complaint brought in the Superior Court of the State of California, San Diego County, which was subsequently amended on January 21, 2021, to add Kforce Flexible Solutions as a party. Bernardo Buchsbaum, et al. v. Kforce Inc., et al., Case Number: 37-2020-00030994-CU-OE-CTL. The former employee purports to bring a representative action on his own behalf and on behalf of other allegedly aggrieved employees pursuant to PAGA alleging violations of the Labor Code. The plaintiff seeks civil penalties, interest, attorney’s fees, and costs under the Labor Code for alleged failure to: properly calculate and pay all earned minimum and overtime wages; provide and pay for work performed during meal and rest periods; reimburse business expenses; provide compliant wage statements; and provide unused vacation wages upon termination. The parties reached a preliminary settlement agreement to resolve this matter along with Elliott-Brand, et al. v. Kforce Inc., et al. and Lewis, et al. v. Kforce Inc., which is subject to approval by the Court. Plaintiff Buchsbaum has been added as a plaintiff to the Elliott-Brand lawsuit, and this lawsuit will be dismissed after the Court’s approval of the settlement. We believe that this matter is unlikely to have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. On December 11, 2020, a complaint was filed against Kforce and its client, Verity Health System of California (Verity) in the Superior Court of California, County of Los Angeles, which was subsequently amended on February 19, 2021. Ramona Webb v. Kforce Flexible Solutions, LLC, et al., Case Number: 20STCV47529. Former consultant Ramona Webb has sued both Kforce and Verity alleging certain individual claims in addition to a PAGA claim based on alleged violations of various provisions of the Labor Code. With respect to the PAGA claim, Plaintiff seeks to recover on her behalf, on behalf of the State of California, and on behalf of all allegedly aggrieved employees, the civil penalties provided by PAGA, attorney’s fees and costs. At this stage in the litigation, it is not feasible to predict the outcome of this matter or reasonably estimate a range of loss, should a loss occur, from this proceeding. We intend to continue to vigorously defend the claims. On December 24, 2020, a complaint was filed against Kforce Inc., et al. in Superior Court of the State of California, Los Angeles County. Sydney Elliott-Brand, et al. v. Kforce Inc., et al., Case Number: 20STCV49193. On January 7, 2022, the lawsuit was amended to add Bernardo Buchsbaum and Josie Meister as plaintiffs and to add claims under PAGA and the Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. On behalf of themselves and a putative class and collective of talent recruiters and allegedly aggrieved employees in California and nationwide, the plaintiffs purport to bring a class action for alleged violations of the Labor Code, Industrial Welfare Commission Wage Orders, and the California Business and Professions Code, §17200, et seq., a collective action for alleged violations of FLSA, and a PAGA action for alleged violations of the Labor Code. The plaintiffs seek payment to recover unpaid wages and benefits, interest, attorneys’ fees, costs and expenses, penalties, and liquidated damages for alleged failure to: properly calculate and pay all earned minimum and overtime wages; provide meal and rest periods or provide compensation in lieu thereof; provide accurate itemized wage statements; reimburse for all business expenses; pay wages due upon separation; and pay for all hours worked over forty in one or more workweeks. Plaintiffs also seek an order requiring defendants to restore and disgorge all funds acquired by means of unfair competition under the California Business and Professions Code. The parties reached a preliminary agreement to resolve this matter along with Lewis, et al. v. Kforce Inc. and Buchsbaum, et al. v. Kforce Inc., et al., which is subject to approval by the Court, and we have set reserves accordingly. We believe that this matter is unlikely to have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. On August 30, 2021, Kforce Inc. was served with a complaint brought in the U.S. District Court, Southern District of California. Darryn Lewis, et al. v. Kforce Inc., Case Number: 3:21-cv-01375-AJB-JLB. On behalf of himself and others similarly situated, the plaintiff brings a one-count class action complaint for alleged violations of the FLSA, and specifically, failure to pay overtime wages to a putative class of commissioned employees who work or have worked for Kforce, nationwide, in the past three (3) years. Plaintiff and class members seek the amounts of unpaid wages and benefits allegedly owed to them, liquidated damages, compensatory damages, economic and/or special damages, attorneys’ fees and costs, interest, and other legal and equitable relief for alleged failure to: maintain a policy that compensates its employees for all hours worked; properly classify employees as nonexempt from overtime; and pay overtime pay for all hours worked over forty in one or more workweeks. The parties reached a settlement agreement to resolve the matter. On June 15, 2022, the Court entered an Order granting the parties’ joint motion to dismiss Plaintiff’s individual claims with prejudice and his putative collective claims without prejudice. This matter did not result in a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. On January 6, 2022, a complaint was filed against Kforce Inc. in the Superior Court of the State of California for the County of Los Angeles and was served on January 21, 2022. Jessica Cook and Brianna Pratt, et al. v. Kforce Inc., Case Number: 22STCV00602. On behalf of themselves and others similarly situated, plaintiffs purport to bring a class action alleging violations of Labor Code and the California Business and Professional Code and challenging the exempt classification of a select class of recruiters. Plaintiffs and class members seek damages for all earned wages, statutory penalties, injunctive relief, attorney’s fees, and interest for alleged failure to: properly classify certain recruiters as nonexempt from overtime; timely pay all wages earned, including overtime premium pay; provide accurate wage statements; provide meal and rest periods; and comply with California's Unfair Competition Law. Kforce anticipated this action would be filed as a result of failed early resolution attempts in the previously disclosed Jessica Cook v. Kforce, et al. lawsuit. At this stage in the litigation, it is not feasible to predict the outcome of this matter or reasonably estimate a range of loss, should a loss occur, from this proceeding. We intend to vigorously defend the claims. On January 6, 2022, a complaint was filed against Kforce Inc. in the United States District Court for the Middle District of Florida and was served on February 4, 2022. Sam Whiteman, et al. v. Kforce Inc., Case Number: 8:22-cv-00056. On behalf of himself and all others similarly situated, the plaintiff brings a one-count collective action complaint for alleged violations of the FLSA by failing to pay overtime wages. Plaintiff, on behalf of himself and the putative collective, seeks to recover unpaid wages, liquidated damages, attorneys’ fees and costs, and prejudgment interest for alleged failure to properly classify specified recruiters as nonexempt from overtime and properly compensate for all hours worked over 40 hours in one or more workweeks. At this stage in the litigation, it is not feasible to predict the outcome of this matter or reasonably estimate a range of loss, should a loss occur, from this proceeding. We intend to vigorously defend the claims. We are involved in legal proceedings, claims, and administrative matters from time to time, and may also be exposed to loss contingencies, that arise in the ordinary course of business. We have made accruals with respect to certain of these matters, where appropriate, that are reflected in our consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, we have not yet determined that a loss is probable, or the amount of loss cannot be reasonably estimated. While the ultimate outcome of the matters cannot be determined, we currently do not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on our financial position, results of operations or cash flows. The outcome of any litigation is inherently uncertain, however, and if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to liability that could have a material adverse effect on our financial position, results of operations or cash flows. Kforce maintains liability insurance in amounts and with such coverage and deductibles as management believes is reasonable. The principal liability risks that Kforce insures against are workers’ compensation, personal injury, bodily injury, property damage, directors’ and officers’ liability, errors and omissions, cyber liability, employment practices liability and fidelity losses. There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities. Equity Method Investment In June 2019, we entered into a joint venture whereby Kforce obtained a 50% noncontrolling interest in WorkLLama. We determined, based on the corporate structure and governance, that WorkLLama is a variable interest entity and not subject to consolidation, as we are not the primary beneficiary of WorkLLama because we do not have the power to direct the activities that most significantly impact WorkLLama’s economic performance. As a result, WorkLLama is accounted for as an equity method investment. Under the joint venture operating agreement for WorkLLama, Kforce was originally obligated to make additional cash contributions subsequent to the initial contribution, contingent on WorkLLama's achievement of certain operational and financial milestones. Under the operating agreement, our maximum potential capital contributions were $22.5 million. Although the operational and financial milestones were not achieved, we contributed the full $22.5 million as of June 30, 2022. We contributed $0.5 million and $9.0 million of capital during the six months ended June 30, 2022 and the year ended December 31, 2021, respectively. \We review the equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. An impairment loss is recognized in the event that an other-than-temporary decline in the fair value of the investment occurs. Management’s estimate of the fair value of an investment is based on the income approach and market approach. Like most developing business enterprises, WorkLLama was impacted by the COVID-19 pandemic over the last two years. Additionally, in 2021, WorkLLama also strategically repositioned its business to focus its platform on providing its clients with an ability to directly source and engage talent. While WorkLLama is seeing demand for its platform, it has taken longer than expected to achieve its financial expectations. Given this, Kforce management determined that a triggering event had occurred. Thus, we performed an impairment test as of June 30, 2022, utilizing the market and income approaches. For the income approach, we utilized estimated discounted future cash flows expected to be generated by WorkLLama. For the market approach, we utilized market multiples of revenue and earnings derived from comparable publicly-traded companies. These types of analyses contain uncertainties because they require management to make significant assumptions and judgments, including: (1) an appropriate rate to discount the expected future cash flows; (2) the inherent risk in achieving forecasted operating results; (3) long-term growth rates; (4) expectations for future economic cycles; (5) market comparable companies and appropriate adjustments thereto; and (6) market multiples. The fair value determined in our impairment test is highly sensitive to changes in key assumptions, including but not limited to the discount rate that is applied to the financial projections. As a result of the impairment test, we concluded that the carrying value of the equity method investment was not impaired. However, if the joint venture is unable to achieve its financial projections or if there is a change in the assumptions used to value our interest in the joint venture, then it is reasonably possible that the carrying value of the equity investment may need to be written down to the fair value resulting in an impairment charge in a future quarter. As of June 30, 2022, the fair value of the equity investment, determined in our impairment test, exceeded the carrying value by less than ten percent. Lease commitments We lease office space and certain equipment under operating leases that expire between 2022 and 2033. The terms of the leases provide for rental payments on a graduated scale, options to renew the leases ( to five years), landlord incentives or allowances, and periods of free rent. During the year ended December 31, 2021, we entered into a lease agreement for office space in Tampa, Florida, that will become our new corporate headquarters. This new lease for office space is intended to replace our current headquarters, also in Tampa, Florida, the lease for which expires November 2022. Lease payments will be required beginning July 1, 2023, however, we expect the accounting lease commencement date for this initial portion of the lease for financial reporting purposes to begin at the start of the fourth quarter of 2022.
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Summary of Significant Accounting Policies (Policies) |
6 Months Ended |
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Jun. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2021 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2021, was derived from our audited Consolidated Balance Sheet as of December 31, 2021, as presented in our 2021 Annual Report on Form 10-K.
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Principles of Consolidation | Principles of ConsolidationThe unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” “we,” the “Firm,” “management,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions relate to the following: allowance for credit losses; income taxes; self-insured liabilities for health insurance; and the impairment of goodwill, other long-lived assets and the equity method investment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. In addition, the potential economic consequences of the COVID-19 pandemic, inflationary pressures, and supply constraints, among others, have been and may continue to be uncertain, rapidly changing and difficult to predict. Therefore, our accounting estimates and assumptions might change materially in future periods.
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Earnings per Share | Earnings per ShareBasic earnings per share is computed as net income divided by the weighted average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the dilutive effect of potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. |
New Accounting Standards | Recently adopted accounting standards There were no new accounting standards adopted during the twenty-six weeks ended June 26, 2022 that had an impact on our financial statements. Recently Issued Accounting Standards Not Yet Adopted There are no accounting standards which have not yet been adopted that are expected to have a significant impact on our financial statements and related disclosures.
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Reportable Segments (Tables) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Operations of Reportable Segments | The following table provides information on the operations of our segments (in thousands):
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Disaggregation of Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenues | The following table provides the disaggregation of revenue by segment and type (in thousands):
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Allowance for Credit Losses (Tables) |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||
Schedule of Allowance for Credit Losses | The following table presents the activity within the allowance for credit losses on trade receivables for the six months ended June 30, 2022 (in thousands):
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Other Assets, Net (Tables) |
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Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other assets, net | Other assets, net consisted of the following (in thousands):
(1) Accumulated amortization of capitalized software was $35.9 million and $35.5 million as of June 30, 2022 and December 31, 2021, respectively. (2) In June 2019, Kforce entered into a joint venture resulting in a 50% noncontrolling interest in WorkLLama, LLC (“WorkLLama”), which is accounted for as an equity method investment. The loss on this WorkLLama investment was $1.0 million and $1.8 million for the three months and six months ended June 30, 2022, respectively. In addition, Kforce contributed $0.5 million and $9.0 million of capital during the six months ended June 30, 2022 and the year ended December 31, 2021, respectively. Refer to Note L - “Commitments and Contingencies” for more information on contingencies related to WorkLLama. (3)I Balance at June 30, 2022 Includes a promissory note receivable issued to WorkLLama for $2.0 million.
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Current Liabilities (Tables) |
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Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | The following table provides information on certain current liabilities (in thousands):
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Other Long-Term Liabilities (Tables) |
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Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands):
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Stock Incentive Plans (Tables) |
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Restricted Stock Activity | The following table presents the restricted stock activity for the six months ended June 30, 2022 (in thousands, except per share amounts):
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Derivative Instrument and Hedging Activity (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Activity in the Accumulated Derivative Instrument Gain | The following table sets forth the activity in the accumulated derivative instrument activity (in thousands):
(1) The accumulated derivative instrument activity as of the end the six month period ending June 30, 2022, includes the beginning balance of $823 thousand, a change in fair value of $3.1 million and a reversal due to termination of $3.9 million resulting in an ending balance of zero.
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Summary of Significant Accounting Policies (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Accounting Policies [Abstract] | ||||
Health insurance maximum risk of loss liability per employee insurance plan (up to) | $ 600 | |||
Health insurance maximum aggregate amount of risk of loss liability for employee insurance plans (up to) | $ 200 | |||
Common stock equivalents (in shares) | (435) | (609) | (425) | (529) |
Anti-dilutive common stock equivalents (in shares) | (168) | (304) |
Reportable Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Jun. 30, 2022 |
Jun. 30, 2021 |
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Segment Reporting Information [Line Items] | ||||
Revenue | $ 436,516 | $ 403,614 | $ 853,483 | $ 766,839 |
Gross profit | 131,072 | 118,931 | 254,958 | 217,613 |
Operating and other expenses | 94,551 | 88,920 | 192,126 | 169,436 |
Income from operations, before income taxes | 36,521 | 30,011 | 62,832 | 48,177 |
Technology | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 384,595 | 310,728 | 744,500 | 590,288 |
Gross profit | 109,917 | 88,235 | 212,367 | 162,515 |
FA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 51,921 | 92,886 | 108,983 | 176,551 |
Gross profit | $ 21,155 | $ 30,696 | $ 42,591 | $ 55,098 |
Allowance for Credit Losses (Details) - USD ($) $ in Thousands |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
Dec. 31, 2021 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Allowance for credit losses, beginning balance | $ 1,729 | ||
Current period provision (credit) | (172) | $ (181) | |
Write-offs charged against the allowance, net of recoveries of amounts previously written off | (201) | ||
Allowance for credit losses, ending balance | 1,356 | ||
Trade receivables allowance unrelated to accounts receivable | $ 600 | $ 600 |
Current Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Accounts payable and other accrued liabilities: | ||
Accounts payable | $ 56,537 | $ 40,241 |
Accrued liabilities | 38,079 | 41,167 |
Total Accounts payable and other accrued liabilities | 94,616 | 81,408 |
Accrued payroll costs: | ||
Payroll and benefits | 56,226 | 43,738 |
Payroll taxes | 27,126 | 22,466 |
Health insurance liabilities | 4,309 | 4,474 |
Workers’ compensation liabilities | 793 | 746 |
Total Accrued payroll costs | $ 88,454 | $ 71,424 |
Current Liabilities - Narrative (Details) $ in Millions |
Jul. 31, 2022
USD ($)
|
Jun. 30, 2022
USD ($)
executive
|
Dec. 31, 2021
USD ($)
executive
|
---|---|---|---|
Unusual or Infrequent Item, or Both [Line Items] | |||
Number of executives participating in SERP | executive | 2 | 2 | |
Subsequent Event | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Supplemental executive retirement plan | $ 20.0 | ||
Deferred Payroll Taxes | COVID-19 | |||
Unusual or Infrequent Item, or Both [Line Items] | |||
Payroll tax payments deferred by CARES Act | $ 19.3 | $ 19.3 |
Credit Facility (Details) - USD ($) $ in Millions |
Jun. 30, 2022 |
May 31, 2022 |
Dec. 31, 2021 |
Oct. 20, 2021 |
---|---|---|---|---|
Line of Credit | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Line of credit outstanding | $ 0.0 | $ 100.0 | ||
Credit Facility | Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Initial maximum borrowing capacity | $ 200.0 | |||
Accordion feature, increase limit | $ 150.0 | |||
Derivative, notional amount | $ 100.0 |
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands |
Jun. 30, 2022 |
Dec. 31, 2021 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation plan | $ 33,030 | $ 42,623 |
Operating lease liabilities | $ 8,959 | $ 11,919 |
Operating lease liabilities, financial statement location | Total Other long-term liabilities | Total Other long-term liabilities |
Other long-term liabilities | $ 14 | $ 22 |
Total Other long-term liabilities | $ 42,003 | $ 54,564 |
Stock Incentive Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock $ / shares in Units, shares in Thousands, $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2022
USD ($)
$ / shares
shares
| |
Number of Restricted Stock | |
Outstanding, at beginning of period (in shares) | shares | 1,083 |
Granted (in shares) | shares | 31 |
Forfeited (in shares) | shares | (21) |
Vested (in shares) | shares | (40) |
Outstanding, at end of period (in shares) | shares | 1,053 |
Weighted-Average Grant Date Fair Value | |
Outstanding, as of beginning of period (in dollars per share) | $ / shares | $ 48.86 |
Granted (in dollars per share) | $ / shares | 63.93 |
Forfeited (in dollars per share) | $ / shares | 44.46 |
Vested (in dollars per share) | $ / shares | 47.15 |
Outstanding, as of end of period (in dollars per share) | $ / shares | $ 49.70 |
Total Intrinsic Value of Restricted Stock Vested | |
Vested | $ | $ 2,628 |
Derivative Instrument and Hedging Activity - Accumulated Derivative Instrument Gain (Loss) Activity (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning of period | $ 188,406 | $ 179,935 |
End of period | 210,533 | 186,279 |
Accumulated Derivative Instrument Gain | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning of period | 823 | (1,774) |
Net change associated with current period hedging transactions (1) | (823) | 1,271 |
End of period | 823 | $ (503) |
Change in fair value | 3,100 | |
Accumulated Derivative Instrument Gain | Interest Rate Swap B | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Termination, reversal from AOCI | $ 3,900 |
Fair Value Measurements (Details) $ in Thousands |
Dec. 31, 2021
USD ($)
|
---|---|
Interest Rate Swap | Fair Value, Recurring | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Derivative liability | $ 823 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2022 |
Jun. 30, 2021 |
|
Other Commitments [Line Items] | ||
Unemployment benefits, possible liability with a change in control | $ 38,200 | |
Unemployment benefits, possible liability without a change in control | 13,700 | |
Maximum potential capital contributions | 22,500 | |
Contributions to date to equity method investment | 22,500 | |
Contributions to WorkLLama, joint venture | $ (500) | $ (4,500) |
Minimum | ||
Other Commitments [Line Items] | ||
Renewal terms of current operating leases | 1 year | |
Maximum | ||
Other Commitments [Line Items] | ||
Renewal terms of current operating leases | 5 years |
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