Kforce Reports Record Quarterly Revenue of $264.5 Million




 * Flex Revenue of $246.3 Million, up 5.7% Year over Year
 * Net Income of $7.2 Million, EPS of $0.18
 * Sold Scientific Unit and Pursuing Strategic Alternatives for Nursing

TAMPA, Fla., April 29, 2008 (PRIME NEWSWIRE) -- Kforce Inc. (Nasdaq:KFRC), a provider of professional and technical specialty staffing services and solutions, today announced results for the first quarter of 2008. Revenues for the quarter ended March 31, 2008 were an all time high of $264.5 million compared to $252.3 million for the quarter ended March 31, 2007, an increase of 4.8%, and compared to $262.6 for the quarter ended December 31, 2007, an increase of 0.7%. Net income for the quarter ended March 31, 2008 was $7.2 million, or $0.18 per share, compared to $8.8 million for the quarter ended March 31, 2007, or $0.21 per share, representing a year over year decline in net income and earnings per share of 18.4% and 14.3%, respectively. Net income for the quarter ended December 31, 2007 was $10.0 million, or $0.24 per share.

"The first quarter ended March 31, 2008 was a solid one for the Firm in which we achieved record revenue of $264.5 million and also achieved EPS of $0.18 during a period where there were growing concerns about the macroeconomic environment," said David L. Dunkel, Chairman and CEO. Mr. Dunkel continued, "As the quarter unfolded, our clients became increasingly cautious, which dampened the normal post year-end acceleration. We are making adjustments to position Kforce for continued strong performance in the future as the economy improves. We believe our diversified revenue stream and demand environment for professional staffing and government solutions that is underpinned by solid secular trends, have positioned Kforce well for the future."

William L. Sanders, President, said, "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. We are extremely pleased that our quarterly revenues have now increased sequentially for nine straight quarters."

Mr. Sanders continued, "We are pleased with the year over year flex revenue performance of Technology ("Tech"), our largest operating segment, as well as our Health and Life Sciences ("HLS") and Government Solutions ("GS") segments, which achieved growth of 3.2%, 17.5% and 26.8%, respectively. We are also pleased with the flex revenue growth demonstrated by our Finance and Accounting ("FA") segment, which increased 3.1% sequentially."

Mr. Sanders noted additional operational highlights for the first quarter included:



 *  Revenue per billing day of $4.2 million in Q1 '08 improved
    4.8% from $4.0 million in Q1 '07,

 *  Sequential revenue changes by segment for Q1 '08 were as follows:
    2.7% decline for Tech; 4.5% increase for HLS; 2.1% increase for
    FA and 10.0% increase for GS,

 *  Flex revenue of $246.3 million increased 5.7% from $233.1
    million in Q1 '07, and

 *  Search revenue of $18.2 million was essentially flat over
    Q4 '07.

Continued Mr. Sanders, "The Firm has concluded a review of the services we offer clients. The outcome was the sale of our Scientific unit today. In addition, we are evaluating strategic alternatives for our Nursing unit."

Joe Liberatore, Chief Financial Officer said, "We are pleased to report earnings results for Q1 '08 that were in line with the guidance provided in our 2007 year-end press release despite coming in slightly below our revenue guidance for the quarter. We believe the earnings results were driven by the efforts of the Firm in recent years to enhance the operating leverage as well as the extensive experience senior management has managing operations through different economic scenarios. Additionally, the Firm repurchased 1.5 million shares of common stock during Q1 '08 at a total cost of $13.0 million."

Financial highlights for the first quarter included:



 *  Cash flow from operations for Q1 '08 of $14.2 million compared
    to $9.4 million for Q1 '07, an increase of 51.0%,

 *  Total Firm bill rate for Q1 '08 of $56.07 compared to $52.75 for
    Q1 '07, an increase of 6.3%,

 *  Including the aforementioned stock repurchases, the Firm's
    outstanding borrowings under the Credit Facility at the end of
    Q1 '08 were $53.0 million compared to $50.3 at the end of 2007.

Mr. Liberatore continued, "Looking forward to the second quarter, we expect revenue may be in the $250 million to $256 million range. We have excluded revenues from our Scientific business, which was sold today. We have also excluded Nursing revenues from the guidance as we evaluate strategic alternatives; however, no decision has been made as to the ultimate outcome of our Nursing business. The midpoint of revenue guidance assumes flat sequential search revenue and flat sequential flex revenue per billing day. Total Firm earnings per share may be between 18 and 22 cents. The first quarter of 2008 had 63 billing days versus 64 billing days in the second quarter of 2008."

On Wednesday, April 30, 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, April 30, 2008 to May 21, 2008, by dialing 888-203-1112, passcode 8124851.

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 May 21, 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 two in the 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
                                      --------------------------------
                                      March 31   December 31   March 31
                                        2008        2007        2007
                                      --------    --------    --------
 Revenue by Function:
  Technology                          $128,100    $131,664    $124,466
  Finance & Accounting                  57,582      56,392      61,531
  Health & Life Sciences                60,729      58,116      52,041
  Government Solutions                  18,093      16,451      14,270
                                      --------    --------    --------
 Total Revenue                         264,504     262,623     252,308

 Revenue by Time:
  Perm                                  18,202      18,195      19,252
  Flexible                             246,302     244,428     233,056
                                      --------    --------    --------
 Total Revenue                         264,504     262,623     252,308

 Costs of Services                     174,266     169,116     163,867
                                      --------    --------    --------
 Gross Profit                           90,238      93,507      88,441
  GP%                                     34.1%       35.6%       35.1%
  Flex GP%                                29.2%       30.8%       29.7%

 Selling, General & Administrative      73,550      72,452      68,921
 Depreciation & Amortization             3,952       3,687       3,460
                                      --------    --------    --------

 Income from Operations                 12,736      17,368      16,060

 Other Expense                             936       1,191       1,524
                                      --------    --------    --------

 Income Before Income Taxes             11,800      16,177      14,536

 Income Tax Expense                      4,622       6,206       5,741
                                      --------    --------    --------
 Net Income                           $  7,178    $  9,971    $  8,795
                                      ========    ========    ========

 Earnings Per Share - Diluted         $   0.18    $   0.24    $   0.21
 EBITDA Per Share                     $   0.45    $   0.52    $   0.48
 Shares Outstanding - Diluted           40,900      42,209      42,182

         EBITDA                       $ 18,540    $ 21,980    $ 20,345

 Selected Cash Flow Information:
 Bad Debt Expense                     $  1,046    $     72    $    699
 Capital Expenditures                 $  2,820    $  3,533    $  3,579

 Selected Balance Sheet Information:
 Cash and Cash Equivalents            $    834    $  1,083    $    566
 Accounts Receivable, less allowances $163,715    $166,777    $150,645
 Total Assets                         $473,040    $476,136    $457,208
 Bank Debt                            $ 53,000    $ 50,330    $ 80,515
 Other Current Liabilities            $ 84,009    $ 85,566    $ 82,275
 Other Long-Term Liabilities          $ 27,416    $ 27,772    $ 21,911
 Total Stockholders' Equity           $308,615    $312,468    $272,507

 Other Information:
 Equity-Based Compensation
  Expense, net                        $  1,058    $    426    $    733

 Billing Days                               63          61          63


                              Kforce Inc.
                            Key Statistics
                              (Unaudited)

                                   Q1 2008     Q4 2007     Q1 2007
                                   --------    --------    --------
             Total Firm
             ----------
 Flex Revenue (000's)              $246,302    $244,428    $233,056
 Revenue per billing day (000's)   $  3,910    $  4,007    $  3,699
 Sequential Flex Revenue Change         0.8%        1.1%        3.1%
 Hours (000's)                        4,290       4,277       4,323
 Flex GP %                             29.2%       30.8%       29.7%

 Search Revenue (000's)            $ 18,202    $ 18,195    $ 19,252
 Placements                           1,365       1,379       1,431
 Average Fee                       $ 13,331    $ 13,193    $ 13,457
 Billing days                            63          61          63


             Technology
             ----------
 Flex Revenue (000's)              $120,731    $124,897    $116,931
 Revenue per billing day (000's)   $  1,916    $  2,047    $  1,856
 Sequential Flex Revenue Change        -3.3%        0.4%        2.4%
 Hours (000's)                        1,855       1,881       1,784
 Flex GP %                             26.7%       28.0%       27.9%

 Search Revenue (000's)            $  7,369    $  6,767    $  7,535
 Placements                             477         468         501
 Average Fee                       $ 15,438    $ 14,463    $ 15,059


        Finance & Accounting
        --------------------
 Flex Revenue (000's)              $ 47,591    $ 46,163    $ 50,881
 Revenue per billing day (000's)   $    756    $    757    $    808
 Sequential Flex Revenue Change         3.1%        2.4%        0.3%
 Hours (000's)                        1,308       1,277       1,431
 Flex GP %                             32.4%       33.8%       32.1%

 Search Revenue (000's)            $  9,991    $ 10,229    $ 10,650
 Placements                             806         797         839
 Average Fee                       $ 12,390    $ 12,825    $ 12,692


        Health & Life Sciences
        ----------------------
 Flex Revenue (000's)              $ 59,887    $ 56,917    $ 50,974
 Revenue per billing day (000's)   $    951    $    933    $    809
 Sequential Flex Revenue Change         5.2%        0.9%        6.5%
 Hours (000's)                          940         947         944
 Flex GP %                             29.8%       32.7%       28.9%

 Search Revenue (000's)            $    842    $  1,199    $  1,067
 Placements                              82         114          91
 Average Fee                       $ 10,306    $ 10,544    $ 11,713


         Government Solutions
         --------------------
 Flex Revenue (000's)              $ 18,093    $ 16,451    $ 14,270
 Revenue per billing day (000's)   $    287    $    270    $    226
 Sequential Flex Revenue Change        10.0%        4.0%        6.7%
 Hours (000's)                          187         172         164
 Flex GP %                             35.9%       37.4%       38.0%


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

                                   Q1 2008     Q4 2007     Q1 2007
                                   --------    --------    --------
          Clinical Research
          -----------------
 Flex Revenue (000's)              $ 28,636    $ 24,676    $ 21,694
 Revenue per billing day (000's)   $    454    $    404    $    344
 Sequential Flex Revenue Change        16.0%       -1.0%       11.8%
 Hours (000's)                          316         277         288
 Flex GP %                             28.4%       31.7%       25.9%

 Search Revenue (000's)            $    209    $    439    $    387
 Placements                              12          27          20
 Average Fee                       $ 17,247    $ 16,143    $ 19,340

     Health Information Management
     -----------------------------
 Flex Revenue (000's)              $ 16,931    $ 17,114    $ 13,418
 Revenue per billing day (000's)   $    269    $    281    $    213
 Sequential Flex Revenue Change        -1.1%        4.0%       14.7%
 Hours (000's)                          201         224         200
 Flex GP %                             34.8%       36.9%       34.9%

 Search Revenue (000's)            $    182    $    219    $    137
 Placements                              13          16          10
 Average Fee                       $ 14,029    $ 13,683    $ 13,694

          Healthcare-Nursing
          ------------------
 Flex Revenue (000's)              $  7,917    $  8,120    $  9,178
 Revenue per billing day (000's)   $    126    $    133    $    146
 Sequential Flex Revenue Change        -2.5%        0.6%        1.8%
 Hours (000's)                          192         197         222
 Flex GP %                             26.3%       29.0%       28.1%

 Search Revenue (000's)            $     31    $     14    $      8
 Placements                               5           3           2
 Average Fee                       $  6,164    $  4,834    $  3,876

              Scientific
              ----------
 Flex Revenue (000's)              $  6,403    $  7,007    $  6,684
 Revenue per billing day (000's)   $    102    $    115    $    106
 Sequential Flex Revenue Change        -8.6%        0.6%      -13.8%
 Hours (000's)                          231         249         234
 Flex GP %                             27.5%       30.0%       28.1%

 Search Revenue (000's)            $    420    $    527    $    535
 Placements                              52          68          59
 Average Fee                       $  8,142    $  7,799    $  9,061

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

 Pro Forma Revenue and Flex GP

                                   Total Revenue   Flex GP   Flex GP %
                                   -------------  ---------  ----------

 Q1 2008 - Actual                     $264,504     $ 72,036    29.2%
  Less: Nursing and Scientific          14,771        3,843     0.2%
                                   -------------  ---------  ----------
 Q1 2008 - Pro Forma                  $249,733     $ 68,193    29.4%
                                   =============  =========  ==========

 Q2 2008 Pro Forma Guidance:
  Low End                             $250,000     $ 69,500    29.9%
  High End                            $256,000     $ 70,800    29.9%


 The "Pro Forma" financial information provided above for our first
 quarter ended March 31, 2008, a non-GAAP financial measure, excludes
 the results of our Scientific business, which was sold today. It also
 excludes the results of our Nursing business as we evaluate strategic
 alternatives; however, no decision has been made as to the ultimate
 outcome of our Nursing business. Pursuant to Statement of Financial
 Accounting Standards No. 144 "Accounting for the Impairment or
 Disposal of Long-Lived Assets," discontinued operations treatment for
 these businesses was not required based on an evaluation of the facts
 and circumstances that existed as of March 31, 2008.

 The guidance provided by management to our shareholders for Q2 2008
 also excludes the results for these businesses. Management has elected
 to provide the pro forma financial information for Q1 2008, as
 presented above, solely so that our shareholders can more clearly
 understand our guidance. Management does not anticipate providing this
 non-GAAP financial measure in the future. This measure should not be
 considered in isolation or as an alternative to the financial
 statement information presented in the consolidated financial
 statements as indicators of financial performance or liquidity. This
 measure is not determined in accordance with generally accepted
 accounting principles.


 EBITDA                Q1 2008           Q4 2007           Q1 2007
                   ----------------  ---------------  ----------------
                              Per              Per               Per
                      $      share      $     share      $      share
                   ----------------  ---------------  ----------------
 EBITDA            $18,540   $ 0.45  $21,980  $ 0.52  $20,345   $ 0.48
 Depreciation
  & Amortization    (3,952)  $(0.10)  (3,687) $(0.09)  (3,460)  $(0.08)
 Amortization of
  Stock Options
  & SARS              (832)  $(0.02)    (611) $(0.01)    (552)  $(0.01)
 Amortization of
  Restricted Stock
  & PARS              (908)  $(0.02)    (303) $(0.01)    (270)  $(0.01)
 Interest Expense
  and Other         (1,048)  $(0.02)  (1,202) $(0.03)  (1,527)  $(0.03)
 Income Tax Expense (4,622)  $(0.11)  (6,206) $(0.14)  (5,741)  $(0.14)
                   ----------------  ---------------  ----------------
 Net Income        $ 7,178   $ 0.18  $ 9,971  $ 0.24  $ 8,795   $ 0.21
                   ================  ===============  ================

 Outstanding Shares
  - Diluted         40,900            42,209           42,182

 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

                         Q1 2008          Q4 2007          Q1 2007
                     ---------------  ---------------  ---------------
                                Per              Per              Per 
                        $      share     $      share     $      share
                     ---------------  ---------------  ---------------

 Net Income          $ 7,178  $ 0.18  $  9,971 $ 0.24  $ 8,795  $ 0.21
 Equity-Based
  Compensation
  Expense, net:
  Alternative LTI
   Valuation Expense      --      --     (213)   0.00      390    0.01
  Amortization of
   Stock Options &
   SARS                  832    0.02      611    0.01      552    0.01
  Amortization of
   Restricted Stock
   & PARS                908    0.02      303    0.01      270    0.01
  Income Tax Expense    (682)  (0.02)    (275)  (0.01)    (479)  (0.01)
                     ---------------  ---------------  ---------------
  Equity-Based
   Compensation
   Expense, net        1,058    0.02      426    0.01      733    0.02
                     ---------------  ---------------  ---------------
 Net Income before
  Equity-Based
  Compensation
  Expense            $ 8,236  $ 0.20  $10,397  $ 0.25  $ 9,528  $ 0.23
                     ===============  ===============  ===============

 Outstanding Shares
  - Diluted           40,900           42,209           42,182

 "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.


            

Tags


Contact Data