Kforce Revenues Increase 13.5% Year Over Year
Kforce Revenues Increase 13.5% Year Over Year
Kforce Inc. has announced its results for its first quarter of 2012. Revenues from continuing operations for the quarter ended March 31, 2012 was $268.4 million compared to $259.3 million for the quarter ended December 31, 2011, an increase of 3.5% and compared to $236.4 million for the quarter ended March 31, 2011, an increase of 13.5%. For the quarter ended March 31, 2012, Kforce reported net income of $4.1 million, or $0.12 per share, versus $7.1 million, or $0.20 per share, for the quarter ended December 31, 2011, a decrease of 42.5% in net income and 40.0% in earnings per share. Net income for the first quarter of 2012 decreased 15.8%, versus the first quarter of 2011, which had net income of $4.8 million. Earnings per share for both the first quarter of 2012 and 2011 remained flat at $0.12 per share. First quarter results were impacted by the sale of Kforce Clinical Research, Inc. ("KCR"), which is now reported as discontinued operations. Please refer to our SEC filings for complete information related to the KCR transaction and related activities.
"We are pleased with our first quarter results, particularly the year-over-year Flex revenue increases in HIM, Tech and FA of 21.3%, 15.0% and 14.2%, respectively. Additionally, total Firm Flex revenues from continuing operations for Q1 '12 of $257.3 million increased 13.6% year-over-year from $226.6 million in Q1 '11. We believe Kforce is well positioned to service our clients' increasing desire for a more flexible workforce during this unique temporary employment-led recovery. We are pleased with our Q1 '12 results and remain optimistic about the Firm's prospects. As we celebrate the 50th anniversary of Kforce in May 2012, I want to thank all of our employees, consultants and clients for making Q1 '12 another successful quarter for Kforce," said David L. Dunkel, Chairman and CEO.
William L. Sanders, President, said, "We are pleased with the results of the first quarter of 2012, where we experienced sequential and year-over-year increases in Flex revenues for all of our staffing segments. We were able to continue to take advantage of our highly advanced sales and delivery platform that leverages our field associates, Strategic Accounts executives and National Recruiting Center to profitably grow revenues with both large and small clients. Discussions with our clients and certain key performance indicators have indicated demand for temporary staffing continues to be stable. Kforce continues to aggressively pursue business opportunities with the goal of continuing to gain client and market share."
Mr. Sanders noted additional operational results for the first quarter include:
? Flex revenues from continuing operations of $257.3 million in Q1 '12 increased 3.3% from $249.2 million in Q4 '11 and increased 13.6% from $226.6 million in Q1 '11.
? Sequential percentage changes in Flex revenues by segment were a 7.3% increase for FA, 4.8% increase for HIM, 2.5% increase for Tech and a 1.2% decrease for Government Solutions.
? Search revenues from continuing operations of $11.0 million in Q1 '12 increased 8.4% from $10.2 million in Q4 '11 and increased 12.3% from $9.8 million in Q1 '11.
Joseph J. Liberatore, Chief Financial Officer, said, "The Firm continued to perform well in Q1 '12. The first quarter of 2012 contained 64 billing days compared to 61 billing days in Q4 '11, and 63 billing days in Q1 '11. We believe our first quarter results reflect our strong culture, tenured sales associate population and a continued focus on execution in all aspects of the business, including improving client relationships, solid expense management and continued efficiencies and operating leverage provided by the NRC."
Financial highlights for the first quarter include:
? Flex gross profit from continuing operations decreased 180 basis points to 27.1% in Q1 '12 from 28.9% in Q4 '11 and decreased 10 basis points from 27.2% in Q1 '11, which was primarily attributable to increases in employer payroll taxes.
? Selling, general and administrative expenses as a percentage of revenues increased to 40.3% in Q1 '12 from 27.3% in Q4 '11 and from 26.9% in Q1 '11 primarily related to the acceleration of substantially all unvested and outstanding long-term incentive awards, which resulted in an incremental charge of $31.3 million.
? At the end of Q1 '12, there was no bank debt, which reflected a decrease of $49.5 million from the end of Q4 '11. This decrease was primarily related to the divestiture of KCR.
? Earnings per share for Q1 '12 was $0.12, a decrease of 40.0% from $0.20 per share in Q4 '11 and remained flat from $0.12 in Q1' 11.
Mr. Liberatore stated, "In addition, looking forward to the second quarter of 2012, we expect revenues may be in the $274 million to $281 million range and earnings per share in the range of $0.21 to $0.23. The second quarter of 2012 has 64 billing days, the same as the first quarter of 2012.
Mr. Liberatore continued "Our business is performing well and, as revenues grow, we are prepared to make necessary adjustments to grow earnings. We believe 2012 analyst consensus estimates remain reasonable for revenues, exclusive of KCR, and earnings per share. This outlook assumes a static business operating environment and mix and does not consider any benefit that we might derive from the redeployment of capital for stock repurchases or acquisitions or any acceleration in gross margin expansion."