Kforce Inc. Reports Q3 Earnings Per Share of $0.26




 * Record Quarterly Revenue of $262.1 Million
 * Record Income From Operations of $19.3 Million
 * Record EBITDA of $24.0 Million

TAMPA, Fla., Oct. 30, 2007 (PRIME NEWSWIRE) -- Kforce Inc. (Nasdaq:KFRC), a professional staffing and solutions firm, today announced results for the third quarter of 2007. Revenues for the quarter ended September 30, 2007 were an all time quarterly high of $262.1 million compared to $238.7 million for the quarter ended September 30, 2006 and $259.9 million for the quarter ended June 30, 2007. The Firm reported net income for the third quarter of 2007 of $11.0 million or $.26 per share versus net income of $8.8 million or $.21 per share for the third quarter of 2006, representing a year-over-year improvement of 24.7% in net income. Net income for the quarter ended June 30, 2007 was $10.6 million or $.25 per share.

"We are very pleased to again report a record revenue quarter. This is also our highest third quarter EPS, 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. We continue to see strong demand for highly skilled workers both on a permanent and flexible basis. We believe this demand is being driven by both secular and cyclical trends that bode well for the future of Kforce."

William L. Sanders, President said, "Q3 2007 was the seventh consecutive quarter of record Firm revenue, and many other Firm milestones as well. We are extremely pleased with the progress we are making on all fronts as we continue to gain momentum during phase two of our current three year strategic plan. We are pleased that we are meeting our objective for 2007 to be a year of profitable growth."

"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. Total revenues of $262.1 million in Q3 2007 represents a 0.8% increase sequentially on one less billing day than Q2 and a 9.8% increase year-over-year. We are particularly excited by the continued strong performance of our largest operating segment, Technology, which has now grown 11 consecutive quarters, as well as another good quarter of growth from our Clinical Research, Health Information Management and Government Solutions groups. With Q3 2007 results and what we believe are positive trends to begin Q4 2007, we believe that 2007 will be our year to hit $1.0 billion in total revenues."

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



 * Record revenue per billing day of $4.2 million in Q3 '07 improved
   2.4% from $4.1 million in Q2 '07 and 9.8% from $3.8 million in Q3
   '06

 * Flex revenue of $241.7 million increased 10.3% from $219.2 million
   in Q3 '06

 * Search revenue of $20.4 million improved 4.6% from $19.5 million in
   Q3 '06

 * Revenues for Government Solutions were $15.8 million in Q3 '07, up
   4.0% sequentially and 148.2% year-over-year, fueled by our Bradson
   acquisition

 * Total gross profit percentage improved 90 basis points to 36.7% in
   Q3 '07 from 35.8% in Q3 '06

 * Flex gross profit percentage improved 130 basis points to 31.4% in
   Q3 '07 from 30.1% in Q3 '06

Joe Liberatore, Chief Financial Officer said, "We continue to translate revenue growth into improving bottom line results, as net income has increased 24.7% year over year. We believe we are making excellent progress toward achieving our goal of 10 percent operating margins at the peak of the current cycle."

Financial highlights for the third quarter include:



 * Income from operations of $19.3 million or 7.4% improved 80 basis
   points from 6.6% or $15.7 million in Q3 '06

 * Earnings per share before the impact of equity-based compensation
   expense of $.27, a 22.7% increase from $.22 in Q3 '06

 * EBITDA in Q3 '07 of $24.0 million increased 27.1% year-over year

 * Bank debt at the end of the third quarter of $54.3 million,
   reflecting a reduction of $11.2 million from $65.5 million at the
   end of the second quarter

Mr. Liberatore continued, "Looking forward to the fourth quarter of 2007, we expect revenues to be impacted by the reduction in billing days and anticipated holiday slowdowns which particularly impact our CRS and government businesses. The fourth quarter of 2007 has 61 billing days versus 63 billing days in the third quarter of 2007. We expect revenues may be in the $256 million to $262 million range, and earnings per share of $0.24 to $0.26 which reflects approximately 42.5 million weighted average diluted shares outstanding."

On Wednesday, October 31, 2007, 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 888-593-6050. The replay of the call will be available from 10:30 a.m. Eastern Time Wednesday, October 31 to November 15, 2007, by dialing 888-203-1112, passcode 3540996.

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 November 14, 2007.

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 68 offices in 41 markets in North America. For more information, please visit our Web site at www.kforce.com.

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

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 revenues and earnings per share will be achieved or that the Firm will reach $1.0 billion in revenue in 2007. 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
                                 -----------------------------------
                                 Sept. 30,     June 30,    Sept. 30,
                                   2007         2007         2006
                                 ---------    ---------    ---------
 Revenue by Function:
  Technology                     $ 132,340    $ 130,318    $ 118,137
  Finance & Accounting              56,028       59,174       64,066
  Health & Life Sciences            57,868       55,213       50,122
  Government Solutions              15,824       15,219        6,375
                                 ---------    ---------    ---------
 Total Revenue                     262,060      259,924      238,700


 Revenue by Time:
  Perm                              20,377       20,243       19,488
  Flexible                         241,683      239,681      219,212
                                 ---------    ---------    ---------
 Total Revenue                     262,060      259,924      238,700


 Cost Of Sales                     165,783      165,806      153,299
                                 ---------    ---------    ---------
 Gross Profit                       96,277       94,118       85,401
  GP %                                36.7%        36.2%        35.8%
  Flex GP%                            31.4%        30.8%        30.1%

 Selling, General &
  Administrative                    73,146       71,850       66,872
 Depreciation & Amortization         3,842        3,498        2,798
                                 ---------    ---------    ---------

 Income from Operations             19,289       18,770       15,731

 Other Expense                       1,069        1,256          820
                                 ---------    ---------    ---------

 Earnings Before Taxes              18,220       17,514       14,911

 Income Tax Expense                  7,196        6,937        6,069
                                 ---------    ---------    ---------

 Net Income                      $  11,024    $  10,577    $   8,842
                                 =========    =========    =========


 Earnings Per Share - Diluted    $    0.26    $    0.25    $    0.21
 EBITDA Per Share                $    0.56    $    0.54    $    0.45
 Shares Outstanding - Diluted       42,544       42,407       42,091

  EBITDA                         $  24,033    $  23,066    $  18,913

 Selected Cash Flow Information:

 Bad Debt Expense (Recovery)     $      21    $     422    $    (485)
 Capital Expenditures            $   3,221    $   4,481    $   2,923

 Selected Balance Sheet
  Information:

 Total Cash and Short-term
  Investments                    $   1,052    $   1,322    $     782
 Accounts Receivable, less
  allowances                     $ 166,465    $ 152,170    $ 146,939
 Total Assets                    $ 476,075    $ 464,768    $ 391,464
 Bank Debt                       $  54,320    $  65,530    $  38,315
 Other Current Liabilities       $  93,715    $  86,220    $  83,088
 Other Long-Term Liabilities     $  26,726    $  25,099    $  16,758
 Total Stockholders' Equity      $ 301,314    $ 287,919    $ 253,303

 Other Information:
 Equity-Based Compensation
  Expense, net                   $     492    $     814    $     265

 Billing Days                           63           64           63

                                  Kforce Inc.
                                Key Statistics
                                 (Unaudited)

                                    Q3 2007      Q2 2007     Q3 2006
                                   --------     --------     --------

        Total Firm
        ----------
 Flex Revenue (000's)              $241,683     $239,681     $219,212
 Revenue per billing day (000's)   $  3,836     $  3,745     $  3,480
 Sequential Flex Revenue Change         0.8%         2.8%         1.1%
 Hours (000's)                        4,271        4,338        4,247
 Flex GP %                             31.4%        30.8%        30.1%

 Search Revenue (000's)            $ 20,377     $ 20,243     $ 19,488
 Placements                           1,411        1,366        1,440
 Average Fee                       $ 14,438     $ 14,819     $ 13,531
 Billing days                            63           64           63

        Technology
        ----------
 Flex Revenue (000's)              $124,373     $122,765     $110,720
 Revenue per billing day (000's)   $  1,974     $  1,918     $  1,758
 Sequential Flex Revenue Change         1.3%         5.0%         3.2%
 Hours (000's)                        1,863        1,838        1,714
 Flex GP %                             29.3%        28.9%        28.2%

 Search Revenue (000's)            $  7,967     $  7,553     $  7,417
 Placements                             492          441          524
 Average Fee                       $ 16,184     $ 17,137     $ 14,148

    Finance & Accounting
    --------------------
 Flex Revenue (000's)              $ 45,082     $ 47,698     $ 53,329
 Revenue per billing day (000's)   $    716     $    745     $    846
 Sequential Flex Revenue Change        -5.5%        -6.3%         2.8%
 Hours (000's)                        1,251        1,345        1,499
 Flex GP %                             34.2%        33.4%        33.3%

 Search Revenue (000's)            $ 10,946     $ 11,476     $ 10,737
 Placements                             811          825          816
 Average Fee                       $ 13,501     $ 13,905     $ 13,172

  Health & Life Sciences
  ----------------------
 Flex Revenue (000's)              $ 56,404     $ 53,999     $ 48,788
 Revenue per billing day (000's)   $    895     $    844     $    775
 Sequential Flex Revenue Change         4.5%         5.9%        -2.3%
 Hours (000's)                          988          986          958
 Flex GP %                             31.6%        30.1%        30.9%

 Search Revenue (000's)            $  1,464     $  1,214     $  1,334
 Placements                             108          100          100
 Average Fee                       $ 13,519     $ 12,150     $ 13,280

  Government Solutions
  --------------------
 Flex Revenue (000's)              $ 15,824     $ 15,219     $  6,375
 Revenue per billing day (000's)   $    251     $    238     $    101
 Sequential Flex Revenue Change         4.0%         6.6%       -17.0%
 Hours (000's)                          169          169           76
 Flex GP %                             39.1%        40.9%        29.6%

                                Kforce Inc.
                  Key Statistics - Health & Life Sciences
                                (Unaudited)

                                      Q3 2007     Q2 2007    Q3 2006
                                     --------    --------   --------
      Clinical Research
      -----------------
 Flex Revenue (000's)                $ 24,913    $ 23,324   $ 20,703
 Revenue per billing day (000's)     $    395    $    364   $    329
 Sequential Flex Revenue Change           6.8%        7.5%      -4.1%
 Hours (000's)                            299         303        284
 Flex GP %                               30.2%       26.3%      29.2%

 Search Revenue (000's)              $    686    $    401   $    662
 Placements                                38          19         36
 Average Fee                         $ 18,047    $ 21,120   $ 18,313

  Health Information Management
  -----------------------------
 Flex Revenue (000's)                $ 16,450    $ 14,890   $ 10,840
 Revenue per billing day (000's)     $    261    $    233   $    172
 Sequential Flex Revenue Change          10.5%       11.0%      -4.1%
 Hours (000's)                            236         226        165
 Flex GP %                               35.8%       36.3%      37.9%

 Search Revenue (000's)              $    229    $    127   $     61
 Placements                                16          10          5
 Average Fee                         $ 14,353    $ 12,686   $ 12,260

      Healthcare-Nursing
      ------------------
 Flex Revenue (000's)                $  8,075    $  9,067   $  9,122
 Revenue per billing day (000's)     $    128    $    142   $    145
 Sequential Flex Revenue Change         -10.9%       -1.2%      -1.7%
 Hours (000's)                            197         219        218
 Flex GP %                               29.4%       30.0%      28.0%

 Search Revenue (000's)              $     (1)   $     23   $     38
 Placements                                --           6          3
 Average Fee                              N/A    $  3,912   $ 12,611

         Scientific
         ----------
 Flex Revenue (000's)                $  6,966    $  6,718   $  8,123
 Revenue per billing day (000's)     $    111    $    105   $    129
 Sequential Flex Revenue Change           3.7%        0.5%       5.0%
 Hours (000's)                            256         238        291
 Flex GP %                               28.9%       29.4%      29.5%

 Search Revenue (000's)              $    550    $    663   $    573
 Placements                                54          65         56
 Average Fee                         $ 10,125    $ 10,203   $ 10,176

                                     Kforce Inc.
                 Selected Financial Information and Reconciliations
                     (In Thousands, Except Per Share Amounts)
                                     (Unaudited)

 EBITDA

                      Q3 2007          Q2 2007            Q3 2006
                 ----------------  ----------------  ----------------
                             Per               Per               Per
                     $      share     $       share      $      share
                 ----------------  ----------------  ----------------
 EBITDA          $ 24,033  $ 0.56  $ 23,066  $ 0.54  $ 18,913  $ 0.45
 Depreciation &
  Amortization     (3,842)  (0.09)   (3,498)  (0.08)   (2,798)  (0.07)
 Amortization of
  Stock Options
  & SARS             (594)  (0.01)     (554)  (0.01)      (13)  (0.00)
 Amortization of
  Restricted
  Stock & PARS       (302)  (0.01)     (245)  (0.01)     (281)  (0.01)
 Interest
  Expense and
  Other            (1,075)  (0.02)   (1,255)  (0.03)     (910)  (0.02)
 Tax Expense       (7,196)  (0.17)   (6,937)  (0.16)   (6,069)  (0.14)
                 ----------------  ----------------  ----------------
 Net Income      $ 11,024  $ 0.26  $ 10,577  $ 0.25  $  8,842  $ 0.21
                 ================  ================  ================

 Outstanding
  Shares -
  Diluted          42,544            42,407            42,091

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

                      Q3 2007          Q2 2007            Q3 2006
                 ----------------  ----------------  ----------------
                             Per               Per               Per
                     $      share     $       share      $      share
                 ----------------  ----------------  ----------------
 Net Income
  before
  Equity-Based
  Compensation
  Expense        $ 11,516  $ 0.27  $ 11,391  $ 0.27  $  9,107  $ 0.22
 Equity-Based
  Compensation
  Expense, net:
   Alternative
    LTI
    Valuation
    Expense            85    0.00      (548)  (0.01)     (146)  (0.00)
   Amortization
    of Stock
    Options &
    SARS             (594)  (0.01)     (554)  (0.01)      (13)  (0.00)
   Amortization
    of
    Restricted
    Stock & PARS     (302)  (0.01)     (245)  (0.01)     (281)  (0.01)
   Tax Benefit        319    0.01       533    0.01       175    0.00
   Equity-Based
    Compensation
                 ----------------  ----------------  ----------------
    Expense, net     (492)  (0.01)     (814)  (0.02)     (265)  (0.01)
                 ----------------  ----------------  ----------------
 Net Income      $ 11,024  $ 0.26  $ 10,577  $ 0.25   $ 8,842  $ 0.21
                 ================  ================  ================

 Outstanding
  Shares -
  Diluted          42,544            42,407            42,091

"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.



            

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