EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

CORRECTING and REPLACING - Kforce Reports 2007 Record Revenue of $1.037 Billion

In a release issued earlier today under the same headline, paragraphs after the Selected Financial Information and Reconciliations EBITDA and Net Income before Equity-Based Compensation Expense tables were omitted. The corrected release follows:

 

   

Record 2007 Net Income of $40.4 Million

   

Record 2007 Earnings Per Share of $.95

   

Record Q4 Quarterly Revenue Of $262.6 Million

   

Q4 Earnings Per Share of $.24

TAMPA, Fla., Feb. 5, 2008 (PRIME NEWSWIRE) — Kforce Inc. (Nasdaq:KFRC), a professional staffing and solutions firm, today announced results for the fourth quarter of 2007. For the full year 2007, revenue increased 10.5% to $1.037 billion, compared to revenue of $938.4 million for 2006. For 2007, the Firm reported net income of $40.4 million, or $.95 per share, versus net income of $32.5 million and $.77 per share for 2006 representing a year-over-year improvement of 24.1% in net income and 23.4% in EPS. Revenue for the quarter ended December 31, 2007 were $262.6 million compared to $243.1 million for the quarter ended December 31, 2006 and $262.1 million for the quarter ended September 30, 2007. The Firm reported net income for the fourth quarter of 2007 of $10.0 million, or $.24 per share, versus net income of $9.3 million, or $.22 per share, for the fourth quarter of 2006, representing a year-over-year improvement of 7.7% in net income and 9.1% in EPS. Net income for the quarter ended September 30, 2007 was $11.0 million, or $.26 per share.

“The year 2007 was a very successful one for the Firm in which we achieved record revenue of $1.037 billion and EPS of $.95, which we believe further demonstrates the enhanced operating leverage of the Firm,” said David L. Dunkel, Chairman and CEO. Continued Mr. Dunkel, “We believe the environment for professional staffing and government solutions remains positive, particularly in the skilled niches we serve across a broad spectrum of industries. We believe this demand is underpinned by solid secular trends that bode well for the future of Kforce.”

William L. Sanders, President, said, “As we enter 2008, we are pleased with the quality and diversification of our revenue stream and we believe we are prepared to successfully manage the business as it continues to grow. Our vision is to be the Firm most respected by those we serve. A key aspect of our vision is building a Firm that delivers sustainable and consistent revenue and earnings performance.”

Mr. Sanders continued, “Total revenue of $262.6 million in Q4 2007 represents a 3.5% increase on a billing day basis when compared to Q3 2007 and an 8.1% increase year-over-year. We are particularly pleased with the continued strong flex revenue performance of our largest operating segment, Technology, which has now grown eight consecutive quarters. Additionally, our Government Solutions and HLS operating segments exhibited another good quarter of growth, particularly in the Clinical Research and Health Information Management specialties. We are also pleased that our Finance and Accounting flex revenue was up sequentially.”

Mr. Sanders noted additional operational highlights of the fourth quarter include:

 

   

Record revenue per billing day of $4.3 million in Q4 ‘07 improved 3.5% from $4.2 million in Q3 ‘07 and 8.1% from $4.0 million in Q4 ‘06

 

   

All business segments had sequential flex revenue per billing day growth in Q4 ‘07. Increases by segment were 7.6% for Government Solutions, 5.7% for F&A, 4.2% for HLS and 3.7% for Technology


   

Flex revenue of $244.4 million increased 8.1% from $226.1 million in Q4 ‘06

 

   

Search revenue of $18.2 million improved 7.6% from $16.9 million in Q4 ‘06

Joe Liberatore, Chief Financial Officer said, “We are pleased with our positive revenue and earnings results which were driven by revenue growth in our Technology segment which increased 13.7% year over year, HLS which was up 11.8% and our Government Solutions segment which increased 87.9% coupled with a 130 basis point improvement in total Firm flex margins. Additionally, the Board of Directors has approved an authorization to purchase up to an additional $50 million in Kforce stock.”

Financial highlights for the fourth quarter include:

 

   

Income from operations of $17.4 million, or 6.6%, improved 20 basis points from 6.4%, or $15.6 million, in Q4 ‘06

 

   

Earnings per share before the impact of equity based compensation expense was $.25, an 8.7% increase from $.23 in Q4 ‘06

 

   

EBITDA of $22.0 million increased 12.6% year-over year from $19.5 in Q4 ‘06

 

   

Bank debt at the end of the fourth quarter was $50.3 million, reflecting a reduction of $36.1 million from $86.4 million at the end of 2006

Mr. Liberatore continued, “Looking forward to the first quarter of 2008 we expect revenue may be in the $266 million to $272 million range, and earnings per share of $0.18 to $0.21, which reflects an impact of approximately $.05 per share of payroll tax related costs.”

On Wednesday, February 6, 2008, Kforce will host a conference call to discuss these results. The call will begin at 8:30 a.m. Eastern Time. The dial-in number is 888-609-5693. The replay of the call will be available from 10:30 a.m. Eastern Time Wednesday, February 6, 2008 to February 20, 2008, by dialing 888-203-1112, passcode 4990901.

This call is being webcast by CCBN and can be accessed at Kforce’s web site at www.kforce.com (select “Investor Relations”). The webcast replay will be available until February 20, 2008.

About Kforce

Kforce (Nasdaq:KFRC) is a professional staffing firm providing flexible and permanent staffing solutions for commercial and governmental organizations in the skill areas of technology, finance & accounting, and health and life sciences. Backed by over 2,000 staffing specialists, Kforce operates with 67 offices in 41 markets in North America and one in Manila, Philippines. For more information, please visit our Web site at www.kforce.com.

About Kforce Government Solutions

Kforce Government Solutions provides innovative technology and finance and accounting solutions to federal government clients. For more information, visit www.kforcegov.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 Kforce Government Solutions, Health and Life Sciences, Finance and Accounting and Technology groups, as well as the market for search and flexible staffing assignments; changes in the service mix; ability of the Firm to complete acquisitions; and the risk factors listed from time to time in the Firm’s reports filed with the Securities and Exchange Commission, as well as assumptions regarding the foregoing. In particular, there can be no assurance that the above estimates of revenue and earnings per share will be achieved. The words “should,” “believe,” “estimate,” “expect,” “intend,” “anticipate,” “foresee,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. The Firm undertakes no obligation to publicly update or revise any forward-looking statements. As a result, such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.

Kforce Inc.

Summary of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

     Quarter Ended  
     Dec. 31,
2007
    Sept. 30,
2007
    Dec. 31,
2006
 

Revenue by Function:

      

Technology

   $ 131,664     $ 132,340     $ 120,661  

Finance & Accounting

     56,392       56,028       60,073  

Health & Life Sciences

     58,116       57,868       48,937  

Government Solutions

     16,451       15,824       13,380  
                        

Total Revenue

     262,623       262,060       243,051  

Revenue by Time:

      

Perm

     18,195       20,377       16,917  

Flexible

     244,428       241,683       226,134  
                        

Total Revenue

     262,623       262,060       243,051  

Cost Of Sales

     169,116       165,783       157,282  
                        

Gross Profit

     93,507       96,277       85,769  

GP%

     35.6 %     36.7 %     35.3 %

Flex GP%

     30.8 %     31.4 %     30.5 %

Selling, General & Administrative

     72,452       73,146       66,548  

Depreciation & Amortization

     3,687       3,842       3,607  
                        

Income from Operations

     17,368       19,289       15,614  

Other Expense

     1,191       1,069       1,692  
                        


Earnings Before Taxes

     16,177      18,220      13,922  

Income Tax Expense

     6,206      7,196      4,667  
                      

Net Income

   $ 9,971    $ 11,024    $ 9,255  
                      

Earnings Per Share - Diluted

   $ 0.24    $ 0.26    $ 0.22  

EBITDA Per Share

   $ 0.52    $ 0.56    $ 0.46  

Shares Outstanding - Diluted

     42,209      42,544      42,284  

EBITDA

   $ 21,980    $ 24,033    $ 19,527  

Selected Cash Flow Information:

        

Bad Debt Expense (Recovery)

   $ 72    $ 21    $ (1,261 )

Capital Expenditures

   $ 3,533    $ 3,221    $ 2,627  

Selected Balance Sheet Information:

        

Total Cash and Short-term Investments

   $ 1,083    $ 1,052    $ 1,589  

Accounts Receivable, less allowances

   $ 166,777    $ 166,465    $ 134,453  

Total Assets

   $ 476,136    $ 476,075    $ 442,618  

Bank Debt

   $ 50,330    $ 54,320    $ 86,435  

Other Current Liabilities

   $ 85,566    $ 93,715    $ 76,029  

Other Long-Term Liabilities

   $ 27,772    $ 26,726    $ 18,229  

Total Stockholders’ Equity

   $ 312,468    $ 301,314    $ 261,925  

Other Information:

        

Equity-Based Compensation Expense, net

   $ 426    $ 492    $ 341  

Billing Days

     61      63      61  

KFORCE INC.

Summary of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

 

     Twelve Months Ended
     Dec. 31,
2007
   Dec. 31,
2006

Revenue by Function:

     

Technology

   $ 518,788    $ 456,369

Finance & Accounting

     233,125      249,503

Health & Life Sciences

     223,238      199,699

Government Solutions

     61,764      32,877
             

Total Revenue

     1,036,915      938,448

Revenue by Time:

     

Perm

     78,066      70,863

Flexible

     958,849      867,585
             

Total Revenue

     1,036,915      938,448

Cost Of Sales

     664,572      612,349
             


Gross Profit

     372,343       326,099  

GP %

     35.9 %     34.8 %

Flex GP%

     30.7 %     29.4 %

Selling, General & Administrative

     286,369       257,187  

Depreciation & Amortization

     14,487       11,552  
                

Income from Operations

     71,487       57,360  

Other Expense

     5,039       4,354  
                

Earnings Before Taxes

     66,448       53,006  

Income Tax Expense

     26,081       20,487  
                

Net Income

   $ 40,367     $ 32,519  
                

Earnings Per Share - Diluted

   $ 0.95     $ 0.77  

EBITDA Per Share

   $ 2.11     $ 1.67  

Shares Outstanding - Diluted

     42,294       42,012  

EBITDA

   $ 89,424     $ 70,172  

Selected Cash Flow Information:

    

Bad Debt Expense (Recovery)

   $ 1,214     $ (1,721 )

Capital Expenditures

   $ 14,815     $ 9,169  

Other Information:

    

Equity-Based Compensation Expense, net

   $ 2,473     $ 1,218  

Billing Days

     251       250  

Kforce Inc.

Key Statistics

(Unaudited)

 

     Q4 2007     Q3 2007     Q4 2006  

Total Firm

      

Flex Revenue (000’s)

   $ 244,428     $ 241,683     $ 226,134  

Revenue per billing day (000’s)

   $ 4,007     $ 3,836     $ 3,707  

Sequential Flex Revenue Change

     1.1 %     0.8 %     3.2 %

Hours (000’s)

     4,277       4,271       4,307  

Flex GP %

     30.8 %     31.4 %     30.5 %

Search Revenue (000’s)

   $ 18,195     $ 20,377     $ 16,917  

Placements

     1,379       1,411       1,264  

Average Fee

   $ 13,193     $ 14,438     $ 13,380  

Billing days

     61       63       61  

Technology

      

Flex Revenue (000’s)

   $ 124,897     $ 124,373     $ 114,180  

Revenue per billing day (000’s)

   $ 2,047     $ 1,974     $ 1,872  

Sequential Flex Revenue Change

     0.4 %     1.3 %     3.1 %

Hours (000’s)

     1,881       1,863       1,757  

Flex GP %

     28.0 %     29.3 %     28.9 %


Search Revenue (000’s)

   $ 6,767     $ 7,967     $ 6,481  

Placements

     468       492       447  

Average Fee

   $ 14,463     $ 16,184     $ 14,512  

Finance & Accounting

      

Flex Revenue (000’s)

   $ 46,163     $ 45,082     $ 50,712  

Revenue per billing day (000’s)

   $ 757     $ 716     $ 831  

Sequential Flex Revenue Change

     2.4 %     -5.5 %     -4.9 %

Hours (000’s)

     1,277       1,251       1,444  

Flex GP %

     33.8 %     34.2 %     33.1 %

Search Revenue (000’s)

   $ 10,229     $ 10,946     $ 9,361  

Placements

     797       811       729  

Average Fee

   $ 12,825     $ 13,501     $ 12,834  

Health & Life Sciences

      

Flex Revenue (000’s)

   $ 56,917     $ 56,404     $ 47,862  

Revenue per billing day (000’s)

   $ 933     $ 895     $ 785  

Sequential Flex Revenue Change

     0.9 %     4.5 %     -1.9 %

Hours (000’s)

     947       988       950  

Flex GP %

     32.7 %     31.6 %     29.6 %

Search Revenue (000’s)

   $ 1,199     $ 1,464     $ 1,075  

Placements

     114       108       88  

Average Fee

   $ 10,544     $ 13,519     $ 12,174  

Government Solutions

      

Flex Revenue (000’s)

   $ 16,451     $ 15,824     $ 13,380  

Revenue per billing day (000’s)

   $ 270     $ 251     $ 219  

Sequential Flex Revenue Change

     4.0 %     4.0 %     109.9 %

Hours (000’s)

     172       169       156  

Flex GP %

     37.4 %     39.1 %     36.6 %

Kforce Inc.

Key Statistics - Health & Life Sciences

(Unaudited)

 

     Q4 2007     Q3 2007     Q4 2006  

Clinical Research

      

Flex Revenue (000’s)

   $ 24,676     $ 24,913     $ 19,401  

Revenue per billing day (000’s)

   $ 404     $ 395     $ 318  

Sequential Flex Revenue Change

     -1.0 %     6.8 %     -6.3 %

Hours (000’s)

     277       299       271  

Flex GP %

     31.7 %     30.2 %     26.8 %

Search Revenue (000’s)

   $ 439     $ 686     $ 569  

Placements

     27       38       27  

Average Fee

   $ 16,143     $ 18,047     $ 21,128  

Health Information Management

      

Flex Revenue (000’s)

   $ 17,114     $ 16,450     $ 11,694  

Revenue per billing day (000’s)

   $ 281     $ 261     $ 192  


Sequential Flex Revenue Change

     4.0 %     10.5 %     7.9 %

Hours (000’s)

     224       236       181  

Flex GP %

     36.9 %     35.8 %     34.8 %

Search Revenue (000’s)

   $ 219     $ 229     $ 88  

Placements

     16       16       7  

Average Fee

   $ 13,683     $ 14,353     $ 12,613  

Healthcare-Nursing

      

Flex Revenue (000’s)

   $ 8,120     $ 8,075     $ 9,014  

Revenue per billing day (000’s)

   $ 133     $ 128     $ 148  

Sequential Flex Revenue Change

     0.6 %     -10.9 %     -1.2 %

Hours (000’s)

     197       197       220  

Flex GP %

     29.0 %     29.4 %     29.3 %

Search Revenue (000’s)

   $ 14     $ (1 )   $ (1 )

Placements

     3       —         1  

Average Fee

   $ 4,834       N/A     $ (863 )

Scientific

      

Flex Revenue (000’s)

   $ 7,007     $ 6,966     $ 7,753  

Revenue per billing day (000’s)

   $ 115     $ 111     $ 127  

Sequential Flex Revenue Change

     0.6 %     3.7 %     -4.6 %

Hours (000’s)

     249       256       278  

Flex GP %

     30.0 %     28.9 %     29.4 %

Search Revenue (000’s)

   $ 527     $ 550     $ 419  

Placements

     68       54       53  

Average Fee

   $ 7,799     $ 10,125     $ 7,850  

KFORCE INC.

Consolidated Balance Sheet

(In Thousands)

(Unaudited)

 

     Dec. 31,
2007
   Dec. 31,
2006
Assets      

Current Assets:

     

Cash and cash equivalents

   $ 1,083    $ 1,589

Trade receivables, net of allowance for doubtful accounts and fallouts

     166,777      134,453

Income tax refund receivable

     377      1,067

Deferred tax asset, net

     8,409      8,892

Prepaid expenses and other current assets

     4,268      4,453
             

Total current assets

     180,914      150,454

Fixed assets, net

     13,355      12,610

Other assets, net

     31,982      32,993

Intangible assets, net

     12,276      24,259

Goodwill

     237,609      222,302
             

Total assets

   $ 476,136    $ 442,618
             


Liabilities and Stockholders’ Equity     

Current Liabilities:

    

Accounts payable and other accrued liabilities

   $ 22,743     $ 24,169  

Accrued payroll costs

     53,613       46,455  

Bank overdrafts

     2,479       631  

Credit facility - current portion

     —         10,000  

Other current debt

     3,859       3,375  

Income taxes payable

     2,872       1,399  
                

Total current liabilities

     85,566       86,029  

Long-term debt - credit facility

     50,330       76,435  

Long-term debt - other

     2,670       2,084  

Deferred tax liability, net

     6,624       1,004  

Other long term liabilities

     18,478       15,141  
                

Total liabilities

     163,668       180,693  
                

Commitments and contingencies

    

Stockholders’ Equity:

    

Preferred stock

     —         —    

Common stock

     609       604  

Additional paid in capital

     310,165       300,485  

Retained earnings

     112,580       72,213  

Less reaquired shares at cost

     (110,886 )     (111,377 )
                

Total stockholders’ equity

     312,468       261,925  
                

Total liabilities and stockholders’ equity

   $ 476,136     $ 442,618  
                

Kforce Inc.

Selected Financial Information and Reconciliations

(In Thousands, Except Per Share Amounts)

(Unaudited)

EBITDA

 

     Q4 2007     Q3 2007      Q4 2006  
     $     Per
Share
    $     Per
share
     $      Per
share
 

EBITDA

   $ 21,980     $ 0.52     $ 24,033     $ 0.56      $ 19,527      $ 0.46  

Depreciation & Amortization

     (3,687 )     (0.09 )     (3,842 )     (0.09 )      (3,607 )      (0.08 )

Amortization of Stock Options & SARS

     (611 )     (0.01 )     (595 )     (0.01 )      (52 )      (0.00 )

Amortization of Restricted Stock & PARS

     (303 )     (0.01 )     (302 )     (0.01 )      (251 )      (0.01 )

Interest Expense and Other

     (1,202 )     (0.03 )     (1,074 )     (0.02 )      (1,695 )      (0.04 )

Income Tax Expense

     (6,206 )     (0.14 )     (7,196 )     (0.17 )      (4,667 )      (0.11 )
                                                  

Net Income

   $ 9,971     $ 0.24     $ 11,024     $ 0.26      $ 9,255      $ 0.22  
                                                  

Outstanding Shares - Diluted

     42,209         42,544          42,284     

EBITDA, a non-GAAP financial measure, is defined as earnings before interest, income taxes, depreciation and amortization, including amortization of stock-based compensation. 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.


Net Income before Equity-Based Compensation Expense

 

     Q4 2007     Q3 2007      Q4 2006  
     $     Per
share
    $     Per
Share
     $      Per
Share
 

Net Income

   $ 9,971     $ 0.24     $ 11,024     $ 0.26      $ 9,255      $ 0.22  

Equity-Based Compensation Expense, net:

              

Alternative LTI Valuation Expense

     (213 )     0.00       (84 )     (0.00 )      265        0.01  

Amortization of Stock Options & SARS

     611       0.01       595       0.01        52        0.00  

Amortization of Restricted Stock & PARS

     303       0.01       302       0.01        251        0.01  

Income Tax Benefit

     (275 )     (0.01 )     (321 )     (0.01 )      (227 )      (0.01 )
                                                  

Equity-Based Compensation Expense, net

     426       0.01       492       0.01        341        0.01  
                                                  

Net Income before Equity-Based Compensation Expense

   $ 10,397     $ 0.25     $ 11,516     $ 0.27      $ 9,596      $ 0.23  
                                                  

Outstanding Shares - Diluted

     42,209         42,544          42,284     

“Net Income before Equity-Based Compensation Expense”, a non-GAAP financial measure, is defined as net income before compensation expense incurred in conjunction with awards accounted for under Statement of Financial Accounting Standards No. 123R “Share-Based Payment” (“SFAS 123R”). SFAS 123R requires Kforce to measure the cost of employee services received in exchange for an equity based award based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually the vesting period.

EBITDA and Net Income before Equity-Based Compensation Expense are key measures used by management to evaluate its operations and to provide useful information to investors. These measures should not be considered in isolation or as an alternative to net income, cash flows data or other financial statement information presented in the consolidated financial statements as indicators of financial performance or liquidity. These measurements are not determined in accordance with generally accepted accounting principles and are thus susceptible to varying calculations. The measures as presented may not be comparable to similarly titled measures of other companies.

Kforce Inc.

Selected Financial Information and Reconciliations

(In Thousands, Except Per Share Amounts)

(Unaudited)

EBITDA

 

     YTD 2007     YTD 2006  
     $     Per
share
    $     Per
Share
 

EBITDA

   $ 89,424     $ 2.11     $ 70,172     $ 1.67  

Depreciation and Amortization

     (14,487 )     (0.34 )     (11,552 )     (0.27 )

Amortization of Stock Options & SARS

     (2,310 )     (0.05 )     (66 )     (0.00 )

Amortization of Restricted Stock & PARS

     (1,120 )     (0.03 )     (1,094 )     (0.03 )

Interest Expense and Other

     (5,059 )     (0.12 )     (4,454 )     (0.11 )

Income Tax Expense

     (26,081 )     (0.62 )     (20,487 )     (0.49 )
                                

Net Income

   $ 40,367     $ 0.95     $ 32,519     $ 0.77  
                                

Outstanding Shares - Diluted

     42,294         42,012    


Net Income before Equity-Based Compensation Expense

 

     YTD 2007     YTD 2006  
     $     Per
share
    $     Per
Share
 

Net Income

   $ 40,367     $ 0.95     $ 32,519     $ 0.77  

Equity-Based Compensation Expense, net:

        

Alternative LTI Valuation Expense

     641       0.02       867       0.02  

Amortization of Stock Options & SARS

     2,310       0.05       66       0.00  

Amortization of Restricted Stock & PARS

     1,120       0.03       1,094       0.03  

Income Tax Benefit

     (1,598 )     (0.04 )     (809 )     (0.02 )
                                

Equity-Based Compensation Expense, net

     2,473       0.06       1,218       0.03  
                                

Net Income before Equity-Based Compensation Expense

   $ 42,840     $ 1.01     $ 33,737     $ 0.80  
                                

Outstanding Shares - Diluted

     42,294         42,012    

 

CONTACT:

  Kforce Inc.
  Michael Blackman, Senior Vice President - Investor Relations
  (813) 552-2927