* 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.
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 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, Sept. 30, Dec. 31,
2007 2007 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, Dec. 31,
2007 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, Dec. 31,
2007 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 Per Per
$ share $ share $ 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 Per Per
$ share $ share $ 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 Per
$ share $ 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 Per
$ share $ 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