EX-99.1 3 dex991.htm PRESS RELEASE PRESS RELEASE

Exhibit 99.1

 

    Kforce Inc.
   

1001 East Palm Ave.

   

Tampa, FL 33605

   

(NASDAQ: KFRC)

 

AT THE COMPANY

Michael Blackman

Vice President – Investor Relations

813- 552-2927

 

Derrell E. Hunter

Chief Financial Officer

813-552-2770

 

KFORCE ANNOUNCES FOURTH QUARTER 2003 RESULTS

 

Q4 EPS OF $.09 AND REVENUE OF $125.7 MILLION EXCEED STREET CONSENSUS

 

KFORCE EARNED $.16 IN 2003

 

TAMPA, FL – February 4, 2004 – Kforce Inc. (NASDAQ: KFRC), a professional staffing firm, announces results for the fourth quarter ended December 31, 2003. Revenue for the quarter ended December 31, 2003 was $125.7 million compared to $123.0 million for the quarter ended September 30, 2003 and $123.5 million for the fourth quarter of 2002. The firm reported a profit for the fourth quarter of 2003 of $2.8 million or $.09 per share compared to earnings in the third quarter of 2003 of $1.4 million or $.04 per share, and a loss in the fourth quarter of 2002 of $11.0 million or $.35 per share before the effect of a change in accounting principle. For the year 2003, the firm reported net income of $.16 per share versus a loss of $.42 for the year 2002 (before the accounting change).

 

“Kforce had indicated on December 2, 2003, that revenue in the fourth quarter was trending towards the upper end of our Q4 guidance (revenue of $120 - $124 million and EPS of $.02 - $.04), and that EPS looked as if it might exceed that range. Indeed, the fourth quarter finished very positively with the eight best flex revenue weeks of 2003 occurring in the fourth quarter. Total revenue in Q4 2003 was up 2.3% sequentially (5.6% on a billing day basis). All three of our business segments, Information Technology, Finance and Accounting and Health and Life Sciences, posted sequential increases in flex revenue in the holiday-shortened fourth quarter,” said David L. Dunkel, Chairman and CEO. “The hard work and dedication of our associates continues to be strong. In the face of a stable to improving, but still challenging macro-environment, our people delivered solid performance in 2003. We believe that we are seeing the fruits of the proactive steps that we have taken to drive revenue growth, gain market share and enhance operating leverage. In addition to retaining the best of our core sales force, we have attracted what we believe are some of the best operating people in the industry. We believe that Kforce today is well positioned for continued future profitability and growth, as evidenced by our lower break-even threshold and healthy balance sheet. We maintain our long term commitment to delivering exceptional customer service and achieving operational excellence.”


Bill Sanders, Chief Operating Officer, added highlights, “We are particularly proud of our F&A flex group which was up in the fourth quarter by 3.9 % sequentially (7.2 % on a billing day basis) and 10.0% Q4 year over year. IT full time equivalents on assignment have increased sequentially over four straight quarters with IT flex revenue up 2.2% sequentially (5.5% on a billing day basis) in the fourth quarter and 3.3% Q4 year over year. Our Pharmaceutical unit posted a 7.4% sequential increase and Q4 year over year increase of 24.6% in flex revenue. We believe that we are making excellent progress on the Hall Kinion integration process, working closely with our colleagues at Hall Kinion. We continue to be impressed by the breadth and depth of the talent in the Hall Kinion organization. Our expectation remains to close the transaction in the first quarter of 2004 and have the integration substantially complete by June 30, 2004. We have a ruthless focus on execution and cadence and we are expanding and accelerating the synergy capture.”

 

In addition to the improved revenues, Derrell Hunter, Chief Financial Officer, commented on other financial highlights for the year 2003 and the fourth quarter. “Kforce was profitable and increased earnings per share in each of the four quarters of 2003. Operating expenses were reduced to 29.7% for 2003 versus 34.6% for 2002, and were down to 28.2% in the fourth quarter. Days sales outstanding (DSO) in accounts receivable continue to be among the best in the industry and is at 37.5 days at the end of 2003 versus 38.5 days in 2002. The year end cash balance increased to $13.7 million from $13.2 million in Q3’03, and $1.1 million at the end of 2002; the outstanding debt was maintained at $22.0 million throughout 2003.”

 

Mr. Hunter continued, “Profitable revenue growth continues to be Kforce’s highest priority. Revenue trends indicate that there was a flex activity surge in the fourth quarter. This higher level of activity is being reaffirmed in early Q1’04 in the midst of normal seasonal project ends. We remain cautious but hopeful about further increases in Q1 that will allow us to maintain upward momentum.” Mr. Hunter added, “Also, the cost structure of Q1’04 will include the effects of seasonal and certain one-time expenses. Without considering any of the effects of the merger except the integration expenses already being incurred by Kforce, we currently expect that revenue for the first quarter of 2004 may be in the range of $129 to $133 million while earnings may be between break-even and $.02 per share. We believe the proactive measures taken have strengthened both the financial and operating leverage of Kforce and that the revenue growth in Q4’03 demonstrated the positive effects of those measures.”

 

Today, Kforce will host a conference call to discuss these results. The call will begin at 11:00 a.m. EST. The dial-in number is 1-617-786-2903, passcode 82882448. The replay of the call will be available from 1:00 p.m. EST Wednesday, February 4 through February 9, 2004, by dialing 1-617-801-6888, passcode 40657662.

 

It will also be Webcast live at www.kforce.com (select “Investor Relations”) and will be available for Webcast replay until February 25, 2004.

 

The webcast is also being distributed over CCBN’s Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN’s individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN’s Individual Investor Network. Institutional investors can access the call via CCBN’s password-protected event management site, StreetEvents (www.streetevents.com).


About Kforce

 

Kforce (NASDAQ: KFRC) is a professional staffing firm providing flexible and permanent staffing solutions for organizations in the skill areas of information technology, finance & accounting, pharmaceutical, healthcare and scientific. Backed by more than 1,000 staffing specialists, Kforce operates in more than 40 markets in North America. For more information, please visit our Web site at www.kforce.com.

 

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 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 Health and Life Sciences, Finance and Accounting and Information Technology Groups, as well as the market for search and flexible staffing assignments; changes in the service mix; ability of the Company to complete acquisitions; and the risk factors listed from time to time in the Company’s reports filed with the Securities and Exchange Commission, as well as assumptions regarding the foregoing. In particular, any statement related to Kforce’s expected revenues or earnings or Kforce being well positioned for future profitability and growth are forward-looking statements. 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. Additionally, any statements related to future improved performance and estimates of revenues and earnings per share are forward-looking statements. The Company 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

(000’s Omitted)

(Unaudited)

 

     Quarter Ended

 
     December 31,
2003


    September 30,
2003


    December 31,
2002


 

Revenue by Function:

                        

Information Tech.

   $ 57,557     $ 55,779     $ 55,651  

Finance/Accounting

     31,509       30,477       28,647  

Health and Life Sciences

     36,672       36,702       39,209  
    


 


 


Total Revenue

     125,738       122,958       123,507  

Revenue by Time:

                        

Perm

     7,313       6,837       6,791  

Flexible

     118,425       116,121       116,716  
    


 


 


Total Revenue

     125,738       122,958       123,507  

Cost Of Sales

     86,841       85,109       84,681  

Gross Profit

     38,897       37,849       38,826  

GP %

     30.9 %     30.8 %     31.4 %

Flex GP%

     26.7 %     26.7 %     27.4 %

Selling, General & Admin.

     34,266       35,175       44,533  

Deprec. & Amort.

     1,168       1,027       2,016  
    


 


 


Income (Loss) from Operations

     3,463       1,647       (7,723 )

Other Expense

     (316 )     (291 )     (1,676 )
    


 


 


Earnings (Loss) Before Taxes

     3,147       1,356       (9,399 )

Income Tax Expense (Benefit)

     358       2       1,629  

Change in Accounting Principle

     —         —         (33,823 )
    


 


 


Net Income (Loss)

   $ 2,789     $ 1,354     $ (44,851 )
    


 


 


Earnings (Loss) Per Share - Diluted

   $ 0.09     $ 0.04     $ (1.45 )

EBITDA Per Share

   $ 0.15     $ 0.09     $ (0.23 )

Shares Outstanding - Diluted

     32,360       31,874       30,947  

EBITDA

   $ 4,808     $ 2,880     $ (6,964 )

Selected Cash Flow Information:

                        

Bad Debt Expense (Recovery)

   $ 5     $ (745 )   $ (42 )

Capital Expenditures

   $ 143     $ 615     $ 251  

Selected Balance Sheet Information:

                        

Total Cash and Cash Equivalents

   $ 13,714     $ 13,227     $ 1,053  

Accounts Receivable, less allowance

   $ 62,274     $ 63,965     $ 63,092  

Total Assets

   $ 160,317     $ 161,447     $ 151,435  

Current Liabilities

   $ 36,861     $ 42,618     $ 36,666  

Long-Term Liabilities

   $ 32,051     $ 30,777     $ 29,923  

Total Stockholders’ Equity

   $ 91,405     $ 88,052     $ 84,846  

Other Information:

                        

Billing Days

     62       64       62  


Kforce Inc.

Key Statistics

(Unaudited)

 

     Q4 2003

    Q3 2003

    Q4 2002

 
Total Company                         

Flex Revenue (000’s)

   $ 118,425     $ 116,121     $ 116,716  

Revenue per billing day (000’s)

   $ 1,910     $ 1,814     $ 1,882  

Sequential Revenue Change

     2.0 %     0.8 %     -2.7 %

Hours (000’s)

     2,713       2,653       2,700  

Flex GP %

     26.7 %     26.7 %     27.4 %

Search Revenue (000’s)

   $ 7,313     $ 6,837     $ 6,791  

Placements

     635       608       596  

Average Fee

   $ 11,581     $ 11,294     $ 11,414  

Billing days

     62       64       62  
Information Technology                         

Flex Revenue (000’s)

   $ 55,615     $ 54,402     $ 53,831  

Revenue per billing day (000’s)

   $ 897     $ 850     $ 868  

Sequential Revenue Change

     2.2 %     1.6 %     -1.6 %

Hours (000’s)

     971       939       896  

Flex GP %

     25.3 %     25.5 %     26.0 %

Search Revenue (000’s)

   $ 1,942     $ 1,377     $ 1,820  

Placements

     150       111       136  

Average Fee

   $ 13,045     $ 12,379     $ 13,493  
Finance and Accounting                         

Flex Revenue (000’s)

   $ 26,936     $ 25,934     $ 24,487  

Revenue per billing day (000’s)

   $ 434     $ 405     $ 395  

Sequential Revenue Change

     3.9 %     4.5 %     2.5 %

Hours (000’s)

     952       912       922  

Flex GP %

     28.6 %     28.2 %     30.2 %

Search Revenue (000’s)

   $ 4,573     $ 4,543     $ 4,160  

Placements

     404       414       389  

Average Fee

   $ 11,383     $ 11,038     $ 10,690  
Health & Life Sciences                         

Flex Revenue (000’s)

   $ 35,874     $ 35,785     $ 38,398  

Revenue per billing day (000’s)

   $ 579     $ 559     $ 619  

Sequential Revenue Change

     0.2 %     -2.9 %     -7.0 %

Hours (000’s)

     790       802       882  

Flex GP %

     27.3 %     27.4 %     27.8 %

Search Revenue (000’s)

   $ 798     $ 917     $ 811  

Placements

     81       83       71  

Average Fee

   $ 9,854     $ 11,114     $ 11,403  


Kforce Inc.

Key Statistics - Health & Life Sciences

(Unaudited)

 

     Q4 2003

    Q3 2003

    Q4 2002

 

Healthcare-Nursing

                        

Flex Revenue (000’s)

   $ 9,415     $ 9,634     $ 11,739  

Revenue per billing day (000’s)

   $ 152     $ 151     $ 189  

Sequential Revenue Change

     -2.3 %     -5.9 %     -18.2 %

Hours (000’s)

     236       243       295  

Flex GP %

     25.3 %     25.8 %     26.7 %

Search Revenue (000’s)

   $ 55     $ 99     $ 52  

Placements

     11       9       6  

Average Fee

   $ 5,027     $ 10,962     $ 8,616  

Billing days

     62       64       62  

Healthcare-Non Nursing

                        

Flex Revenue (000’s)

   $ 5,933     $ 6,240     $ 7,831  

Revenue per billing day (000’s)

   $ 96     $ 97     $ 126  

Sequential Revenue Change

     -4.9 %     0.5 %     -0.8 %

Hours (000’s)

     93       93       122  

Flex GP %

     30.9 %     29.4 %     33.5 %

Search Revenue (000’s)

   $ 55     $ 113     $ 68  

Placements

     4       12       8  

Average Fee

   $ 13,715     $ 9,410     $ 8,525  

Pharmaceutical

                        

Flex Revenue (000’s)

   $ 13,347     $ 12,430     $ 10,709  

Revenue per billing day (000’s)

   $ 215     $ 194     $ 173  

Sequential Revenue Change

     7.4 %     -2.4 %     6.8 %

Hours (000’s)

     182       171       148  

Flex GP %

     27.4 %     28.8 %     27.3 %

Search Revenue (000’s)

   $ 414     $ 410     $ 380  

Placements

     28       25       22  

Average Fee

   $ 14,769     $ 16,418     $ 17,261  

Scientific

                        

Flex Revenue (000’s)

   $ 7,179     $ 7,481     $ 8,119  

Revenue per billing day (000’s)

   $ 116     $ 117     $ 131  

Sequential Revenue Change

     -4.0 %     -2.3 %     -10.3 %

Hours (000’s)

     279       295       317  

Flex GP %

     27.0 %     25.5 %     24.4 %

Search Revenue (000’s)

   $ 274     $ 295     $ 311  

Placements

     38       37       35  

Average Fee

   $ 7,223     $ 8,078     $ 8,864  


Kforce Inc.

EBITDA Reconciliation

(000’s Omitted)

(Unaudited)

 

     Q4 2003

    Q3 2003

    Q4 2002

 
     $

    Per share

    $

    Per share

    $

    Per share

 

EBITDA

   $ 4,808     $ 0.15     $ 2,880     $ 0.09     $ (6,964 )   $ (0.23 )

Depreciation and Amortization

     (1,168 )   $ (0.04 )     (1,027 )     (0.03 )     (2,016 )     (0.06 )

Interest Expense and Other

     (493 )   $ (0.01 )     (497 )     (0.02 )     (419 )     (0.01 )

Tax Benefit (Expense)

     (358 )   $ (0.01 )     (2 )     (0.00 )     (1,629 )     (0.05 )

Change in Accounting Principle

     —         —         —         —         (33,823 )     (1.10 )
    


 


 


 


 


 


Net Income

   $ 2,789     $ 0.09     $ 1,354     $ 0.04     $ (44,851 )   $ (1.45 )
    


 


 


 


 


 


Outstanding Shares - Diluted

     32,360               31,874               30,947          

 

EBITDA, a non-GAAP financial measure, is defined as earnings before interest, income taxes, depreciation, amortization and change in accounting principle. EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA is a key measure used by management to evaluate its operations and to provide useful information to investors. EBITDA 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. EBITDA is not a measurement determined in accordance with generally accepted accounting principles and is thus susceptible to varying calculations. EBITDA as presented may not be comparable to similarly titled measures of other companies.