EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

 

   

Kforce Inc.

1001 East Palm Ave.

Tampa, FL 33605

(NASDAQ: KFRC)

AT THE FIRM

Michael Blackman

Senior Vice President – Investor Relations

(813) 552-2927

KFORCE REPORTS REVENUE OF $231.3 MILLION AND EPS OF $0.08

TAMPA, Fla., May 5, 2009 (GLOBE NEWSWIRE) — Kforce Inc. (Nasdaq:KFRC), a provider of professional staffing services and solutions, today announced results for its first quarter of 2009. For the quarter ended March 31, 2009, total revenue was $231.3 million, a decrease of 7.5% and 4.0% over the quarters ended March 31, 2008 and December 31, 2008, respectively. For the quarter ended March 31, 2009, Kforce reported net income of $3.2 million, or $0.08 per share, versus $7.2 million, or $0.18 per share, in the comparable quarter in 2008, which represents a year-over-year decline of 56.0% in net income and 55.6% in earnings per share. Excluding the non-cash goodwill and other intangible assets impairment charge recorded in the quarter ended December 31, 2008, Kforce reported net income of $7.4 million, or $0.19 per share. On a GAAP basis, Kforce reported a net loss for the quarter ended December 31, 2008 of $107.9 million, or $2.81 per share.

“We believe the Firm continues to perform well in what remains a highly uncertain macroeconomic environment,” said David L. Dunkel, Chairman and CEO. Mr. Dunkel continued, “While there remains very little clarity as to the length and depth of this recession, we believe the secular drivers for our service offerings remain intact. Kforce has an experienced management team and a strong balance sheet, which we believe allows us to be flexible from an operational and financial standpoint. Our priorities during this phase of the economic cycle are to maintain positive cash flow and retain the highly talented people that are the lifeblood of our future success. We will continue to use cash flow for debt retirement, share repurchases and acquisitions that meet our very high thresholds.”

Mr. Dunkel continued, “As challenging as the environment is, we are aggressively pursuing business opportunities with the goal of gaining customer and market share. We believe that Kforce has developed a highly leverageable and flexible platform that can deliver solid results across our service spectrum. We are not simply waiting for a cyclical turn, but instead are proactively putting in place the people and processes that we believe will create our future successes and earn Kforce an enhanced leadership role in the sector.”

William L. Sanders, President, said, “From our experience in past recessions, we believe we have carefully managed the risks to our revenue stream, particularly our exposure to the highly volatile permanent placement business. In addition, our diversified mix of service offerings and the longer term nature of assignments in our growing Government segment may provide an increased degree of revenue stability. This stability coupled with the creation of our centralized National Recruiting Center, which did not exist in the last downturn, and the implementation at scale of a volume account strategy has, we believe, enhanced the Firm’s ability to capitalize on taking market share and positioned us well for the eventual economic up-cycle.”


Mr. Sanders noted additional operational results of the first quarter include:

 

   

Flex revenue of $223.5 million in Q1 ‘09 decreased 2.1% from $228.2 million in Q4 ‘08 and decreased 3.8% from $232.2 million in Q1 ‘08.

 

   

Search revenue of $7.8 million in Q1 ‘09 decreased 38.8% from $12.8 million in Q4 ‘08 and decreased 56.0% from $17.8 million in Q1 ‘08.

 

   

Flex revenue per billing day of $3.6 million in Q1 ‘09 decreased 2.1% and 2.2% over Q4 ‘08 and Q1’ 08, respectively.

 

   

Flex revenue per billing day in Q1 ‘09 by segment was $1.9 million for Technology, $0.6 million for F&A, $0.7 million for HLS and $0.5 million for Government Solutions. Sequential percentage changes on a billing day basis by segment were a 7.1% decrease for Technology, 8.1% decrease for F&A, 0.1% decrease for HLS and a 35.1% increase for Government Solutions.

 

   

Flex gross profit declined 100 basis points to 28.8% in Q1 ‘09 from 29.8% in Q4 ‘08 and 60 basis points from 29.4% in Q1 ‘08.

Joe Liberatore, Chief Financial Officer, said, “In the face of a very difficult macro-economic environment, we are pleased with our Q1 results. We believe that our revenue footprint, cost conscious culture, leverageable operating model and strong balance sheet have positioned the Firm well.”

Financial highlights for Q1 ‘09:

 

   

Total revenue for Q1 ‘09 was $231.3 million, a decrease of 7.5% from $250.0 million in Q1 ‘08.

 

   

Selling, general and administrative expenses as a percentage of revenue for Q1 ‘09 were 27.4% compared to 28.2% for Q1 ‘08.

 

   

Adjusted EBITDA for Q1 ‘09 was $9.8 million, a decrease of 44.0% from $17.5 million in Q1 ‘08.

 

   

Bank debt at the end of Q1 ‘09 was $44.0 million, reflecting an increase of $6.0 million from $38.0 million at the end of 2008, which was primarily related to certain routine cash expenditures that occur annually in the first quarter.

 

   

Working capital at the end of Q1 ‘09 is $71.3 million and our current ratio is 2.0.

Mr. Liberatore continued, “Looking forward to the second quarter of 2009 we expect revenue may be in the $220 million to $227 million range, and earnings per share in the range of $0.05 to $0.09.”

On Tuesday, May 5, 2009, Kforce will host a conference call to discuss these results. The call will begin at 5:00 p.m. Eastern Time. The dial-in number is 800-811-0667. The replay of the call will be available from 7:00 p.m. Eastern Time Tuesday, May 5 to May 19, 2009 by dialing 888-203-1112, passcode 1077246.


This call is being webcast by Shareholder.com and can be accessed at Kforce’s web site at www.kforce.com (select “Investor Relations”). The webcast replay will be available until May 19, 2009.

About Kforce

Kforce (Nasdaq: KFRC) is a professional staffing firm providing flexible and permanent staffing solutions in the skill areas of technology, finance & accounting, and health and life sciences. Backed by approximately 2,000 staffing specialists, Kforce is committed to “Great People = Great Results” for our valued clients and candidates. Kforce operates with 61 offices in 41 markets in North America and two in the Philippines. For more information, please visit our Web site at http://www.kforce.com/.

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

About Kforce Government Solutions (KGS)

KGS provides innovative technology, financial management, data architecture and continuous process improvement and finance and accounting solutions to federal government clients. KGS, with over 700 professionals currently on assignment, has been partnering with our clients since 1970 to successfully solve their challenges. KGS’ in-depth operational knowledge and understanding of Federal Agencies, the Defense Department, Homeland Security and industry best practices, combined with expert and highly-skilled professionals, have resulted in a comprehensive portfolio of technologically advanced and innovative consulting solutions designed to guide clients through today’s environment of complex challenges, risk, and cost. For more information, visit http://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 Technology, Finance and Accounting, Health and Life Sciences and Government Solutions segments, as well as the market for search and flexible staffing assignments; changes in the service mix; ability of the Firm to complete acquisitions; and the risk factors listed from time to time in the Firm’s reports filed with the Securities and Exchange Commission, as well as assumptions regarding the foregoing. The words “should,” “believe,” “estimate,” “expect,” “intend,” “anticipate,” “foresee,” “plan” and similar expressions and variations thereof identify certain of such forward-looking statements, which speak only as of the dates on which they were made. The Firm undertakes no obligation to publicly update or revise any forward-looking statements. As a result, such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those indicated in the forward-looking statements as a result of various factors. Readers are cautioned not to place undue reliance on these forward-looking statements.


Kforce Inc.

Summary of Operations

(In Thousands, Except Per Share Amounts)

(Unaudited)

     Three Months Ended  
     Mar. 31,
2009
    Dec. 31,
2008
    Mar. 31,
2008
 

Revenue by Function:

      

Technology

   $ 117,538     $ 128,781     $ 128,100  

Finance & Accounting

     40,574       46,428       57,582  

Health & Life Sciences

     45,240       45,048       46,237  

Government Solutions

     27,957       20,697       18,093  
                        

Total Revenue

     231,309       240,954       250,012  

Revenue by Time:

      

Perm

     7,822       12,775       17,773  

Flexible

     223,487       228,179       232,239  
                        

Total Revenue

     231,309       240,954       250,012  

Direct Costs Of Services

     159,088       160,249       163,997  
                        

Gross Profit

     72,221       80,705       86,015  

GP %

     31.2 %     33.5 %     34.4 %

Flex GP %

     28.8 %     29.8 %     29.4 %

Selling, General & Administrative:

      

Selling, General & Administrative, Excluding Impairment

     63,410       65,785       70,381  

Goodwill & Intangible Assets Impairment

     —         129,409       —    
                        

Total Selling, General & Administrative

     63,410       195,194       70,381  

Depreciation & Amortization

     3,040       3,174       3,952  
                        

Income (Loss) from Operations

     5,771       (117,663 )     11,682  

Other Expense, Net

     349       371       792  
                        

Income (Loss) from Continuing Operations, Before Income Taxes

     5,422       (118,034 )     10,890  

Income Tax Expense (Benefit)

     2,261       (10,196 )     4,270  
                        

Income (Loss) from Continuing Operations

     3,161       (107,838 )     6,620  

(Loss) Income from Discontinued Operations, Net of Income Taxes

     —         (40 )     558  
                        

Net Income (Loss)

   $ 3,161     $ (107,878 )   $ 7,178  
                        

Earnings (Loss) Per Share - Diluted

   $ 0.08     $ (2.81 )   $ 0.18  

Adjusted EBITDA Per Share

   $ 0.25     $ 0.40     $ 0.43  

Shares Outstanding - Diluted

     38,542       38,408       40,900  

Adjusted EBITDA

   $ 9,799     $ 15,634     $ 17,486  

Selected Cash Flow Information:

      

Bad Debt (Recovery) Expense from Continuing Operations

   $ (523 )   $ (183 )   $ 1,043  

Capital Expenditures

   $ 904     $ 1,471     $ 2,820  

Selected Balance Sheet Information:

      

Total Cash and Cash Equivalents

   $ 900     $ 660     $ 834  

Accounts Receivable, Less Allowances

   $ 131,085     $ 132,428     $ 163,715  

Total Assets

   $ 349,143     $ 350,815     $ 473,040  

Bank Debt

   $ 44,000     $ 38,022     $ 53,000  

Other Current Liabilities

   $ 74,113     $ 85,444     $ 84,009  

Other Long-Term Liabilities

   $ 21,335     $ 21,506     $ 27,416  

Total Stockholders’ Equity

   $ 209,695     $ 205,843     $ 308,615  

Other Information:

      

Equity-Based Compensation Expense, Net

   $ 735     $ 462     $ 1,058  

Billing Days

     62       62       63  


Kforce Inc.

Key Statistics

(Unaudited)

 

     Q1 2009     Q4 2008     Q1 2008  

Total Firm

      

Flex Revenue (000’s)

   $ 223,487     $ 228,179     $ 232,239  

Revenue per billing day (000’s)

   $ 3,605     $ 3,680     $ 3,686  

Sequential Flex Revenue Change

     -2.1 %     -3.1 %     1.3 %

Hours (000’s)

     3,670       3,794       3,876  

Flex GP %

     28.8 %     29.8 %     29.4 %

Search Revenue (000’s)

   $ 7,822     $ 12,775     $ 17,773  

Placements

     585       840       1,313  

Average Fee

   $ 13,372     $ 15,207     $ 13,537  

Billing days

     62       62       63  

Technology

      

Flex Revenue (000’s)

   $ 114,928     $ 123,648     $ 120,731  

Revenue per billing day (000’s)

   $ 1,854     $ 1,994     $ 1,916  

Sequential Flex Revenue Change

     -7.1 %     -1.1 %     -3.3 %

Hours (000’s)

     1,806       1,920       1,855  

Flex GP %

     26.4 %     27.4 %     26.7 %

Search Revenue (000’s)

   $ 2,610     $ 5,133     $ 7,369  

Placements

     188       313       477  

Average Fee

   $ 13,915     $ 16,414     $ 15,438  

Finance & Accounting

      

Flex Revenue (000’s)

   $ 36,000     $ 39,192     $ 47,591  

Revenue per billing day (000’s)

   $ 581     $ 632     $ 756  

Sequential Flex Revenue Change

     -8.1 %     -8.0 %     3.1 %

Hours (000’s)

     1,048       1,127       1,308  

Flex GP %

     31.6 %     34.0 %     32.4 %

Search Revenue (000’s)

   $ 4,574     $ 7,236     $ 9,991  

Placements

     353       491       806  

Average Fee

   $ 12,945     $ 14,727     $ 12,390  

Health & Life Sciences

      

Flex Revenue (000’s)

   $ 44,602     $ 44,642     $ 45,824  

Revenue per billing day (000’s)

   $ 719     $ 720     $ 727  

Sequential Flex Revenue Change

     -0.1 %     -9.4 %     9.7 %

Hours (000’s)

     502       505       522  

Flex GP %

     28.8 %     29.2 %     30.7 %

Search Revenue (000’s)

   $ 638     $ 406     $ 413  

Placements

     44       36       30  

Average Fee

   $ 14,491     $ 11,287     $ 14,206  

Government Solutions

      

Flex Revenue (000’s)

   $ 27,957     $ 20,697     $ 18,093  

Revenue per billing day (000’s)

   $ 451     $ 334     $ 287  

Sequential Flex Revenue Change

     35.1 %     11.7 %     10.0 %

Hours (000’s)

     314       242       191  

Flex GP %

     35.1 %     37.1 %     35.9 %


Kforce Inc.

Key Statistics - Health & Life Sciences

(Unaudited)

 

     Q1 2009     Q4 2008     Q1 2008  

Clinical Research

      

Flex Revenue (000’s)

   $ 29,525     $ 27,058     $ 28,636  

Revenue per billing day (000’s)

   $ 476     $ 436     $ 454  

Sequential Flex Revenue Change

     9.1 %     -9.7 %     16.0 %

Hours (000’s)

     326       304       315  

Flex GP %

     25.5 %     26.7 %     28.4 %

Search Revenue (000’s)

   $ 184     $ 272     $ 209  

Placements

     13       24       13  

Average Fee

   $ 14,110     $ 11,343     $ 17,247  

Healthcare

      

Flex Revenue (000’s)

   $ 15,077     $ 17,584     $ 17,188  

Revenue per billing day (000’s)

   $ 243     $ 284     $ 273  

Sequential Flex Revenue Change

     -14.3 %     -8.9 %     0.4 %

Hours (000’s)

     176       201       207  

Flex GP %

     35.3 %     33.1 %     34.6 %

Search Revenue (000’s)

   $ 454     $ 134     $ 204  

Placements

     31       12       17  

Average Fee

   $ 14,650     $ 11,176     $ 12,042  


Kforce Inc.

Selected Financial Information and Reconciliations

(In Thousands, Except Per Share Amounts)

(Unaudited)

Quarterly Adjusted EBITDA

 

     Three Months Ended
     Mar. 31,
2009
   Dec. 31,
2008
    Mar. 31,
2008
     $    Per
share
   $     Per
share
    $    Per
share

GAAP Net Income (Loss)

   $ 3,161    $ 0.08    $ (107,878 )   $ (2.81 )   $ 7,178    $ 0.18

(Loss) Income from Discontinued Operations, Net of Income Taxes

     —        —        (40 )     (0.00 )     558      0.01
                                           

Income (Loss) from Continuing Operations

   $ 3,161    $ 0.08    $ (107,838 )   $ (2.81 )   $ 6,620    $ 0.17

Goodwill & Intangible Assets Impairment, Pre-Tax

     —        —        129,409       3.37       —        —  

Depreciation & Amortization

     3,040      0.08      3,174       0.08       3,952      0.10

Amortization of Stock Options & SARS

     56      0.00      147       0.00       832      0.02

Amortization of Restricted Stock & PARS

     846      0.02      571       0.01       908      0.02

Interest Expense and Other

     435      0.01      367       0.01       904      0.02

Income Tax Expense (Benefit)

     2,261      0.06      (10,196 )     (0.27 )     4,270      0.10

Earnings Per Share Adjustment (*)

     —        —        —         0.01       —        —  
                                           

Adjusted EBITDA

   $ 9,799    $ 0.25    $ 15,634     $ 0.40     $ 17,486    $ 0.43
                                           

Weighted Average Shares Outstanding - Basic

     38,143         38,408         40,587   

Weighted Average Shares Outstanding - Diluted

     38,542         38,860         40,900   

Adjusted EBITDA, a non-GAAP financial measure, is defined as earnings before income (loss) from discontinued operations, non-cash impairment charges, interest, income taxes, depreciation and amortization and amortization of stock-based compensation expense. Adjusted EBITDA should not be considered a measure of financial performance under generally accepted accounting principles. Items excluded from Adjusted EBITDA are significant components in understanding and assessing financial performance.

 

(*) This earnings per share adjustment is necessary to properly reconcile net loss per share on a GAAP basis to Adjusted EBITDA per share. Adjusted EBITDA Per Share, a non-GAAP financial measure, is based on Adjusted EBITDA and diluted weighted average shares outstanding; however, the reconciling items within the table above are based on basic weighted average shares outstanding, as the inclusion of dilutive securities such as stock options and stock awards would have an anti-dilutive effect on loss per share.


Quarterly Net Income before Equity-Based Compensation Expense and Impairment Charge

 

     Three Months Ended  
     Mar. 31,
2009
    Dec. 31,
2008
    Mar. 31,
2008
 
     $     Per
share
    $     Per
share
    $     Per
share
 

GAAP Net Income (Loss)

   $ 3,161     $ 0.08     $ (107,878 )   $ (2.81 )   $ 7,178     $ 0.18  

(Loss) Income from Discontinued Operations, Net of Income Taxes

     —         —         (40 )     (0.00 )     558       0.01  
                                                

Income (Loss) from Continuing Operations

   $ 3,161     $ 0.08     $ (107,838 )   $ (2.81 )   $ 6,620     $ 0.17  

Goodwill & Intangible Assets Impairment, Net of Income Taxes

     —         —         115,235       3.00       —         —    

Equity-Based Compensation Expense, Net:

            

Alternative LTI Valuation Expense

     359       0.01       —         —         —         —    

Amortization of Stock Options & SARS

     56       0.00       147       0.00       832       0.02  

Amortization of Restricted Stock & PARS

     846       0.02       571       0.01       908       0.02  

Income Tax Benefit

     (526 )     (0.01 )     (256 )     (0.00 )     (682 )     (0.02 )
                                                

Equity-Based Compensation Expense, Net

     735       0.02       462       0.01       1,058       0.02  
                                                

Net Income before Equity-Based Compensation Expense and Impairment Charge

   $ 3,896     $ 0.10     $ 7,859     $ 0.20     $ 7,678     $ 0.19  
                                                

Weighted Average Shares Outstanding - Basic

     38,143         38,408         40,587    

Weighted Average Shares Outstanding - Diluted

     38,542         38,860         40,900    

“Net Income before Equity-Based Compensation Expense and Impairment Charge”, a non-GAAP financial measure, is defined as income from continuing operations, excluding non-cash impairment charges, before compensation expense incurred in conjunction with awards (both liability and equity 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.

Adjusted EBITDA and Net Income before Equity-Based Compensation Expense and Impairment Charge 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.