Kforce reports Q1 revenues of $312.6m
Revenues from continuing operations for the quarter ended March 31, 2015 were $312.6 million compared to $318.7 million for the quarter ended December 31, 2014, a decrease of 1.9%, and compared to $282.0 million for the quarter ended March 31, 2014, an increase of 10.8%.
Income from continuing operations for the quarter ended March 31, 2015 was $5.8 million, or $0.20 per share, as compared to $9.1 million, or $0.31 per share, for the quarter ended December 31, 2014, and compared to $4.4 million, or $0.13 per share, for the quarter ended March 31, 2014. In the quarter ended March 31, 2015, Kforce reported net income of $5.8 million, or $0.20 per share, versus net income of $8.9 million, or $0.30 per share, for the quarter ended December 31, 2014, and net income for the quarter ended March 31, 2014 of $6.2 million, or $0.19 per share.
David L. Dunkel, chairman and CEO, said, "We are pleased with our performance in the first quarter of 2015, as Kforce achieved quarterly revenues of $312.6 million and earnings per share of $0.20. Our first quarter growth was broadly driven by the strong growth rates for all reporting segments. We believe these growth rates continue to demonstrate our relentless pursuit of gaining customer share. Against a backdrop of a non-traditional economic recovery, we continue to see secular drivers of flexible staffing driving growth. This is manifested by the disproportionate share of job growth in this recovery coming from the temporary staffing sector as clients seek increased workforce flexibility."
Dunkel continued, "With our balanced revenue growth across all business lines, we continue to invest in revenue-generating talent in our staffing and solutions businesses to sustain this broad-based growth given the excellent market opportunities. Demand remains very strong across all industries and geographies in both Tech and FA. I want to thank all of our clients, consultants and employees for making the first quarter of 2015 a very successful quarter for Kforce."
Joseph J. Liberatore, President, said, "I am very pleased to see another strong quarter from our team particularly one with success as broad-based as this one, where we saw our Flex business grow 10.4% year-over-year. Our actions in this New Era of Kforce are continuing to drive results and I am proud of the team's execution in meeting the needs of our clients, consultants and employees."
Mr. Liberatore noted additional operational results for the first quarter include:
• Flex revenues of $300.5 million in Q1 '15 increased 10.4% from $272.3 million in Q1 '14.
• Year-over-year growth in Flex revenue was 8.3% for Tech, 15.9% for FA, and 13.7% for GS.
• Direct Hire revenues of $12.1 million in Q1 '15 increased 24.7% from $9.7 million in Q1 '14.
• Revenue-generating headcount increased 8.7% year-over-year. The Firm expects to continue investing in revenue-generating headcount during the remainder of 2015.
David M. Kelly, Chief Financial Officer, said, "We continue to make significant progress toward our revenue and earnings goals. Q1 '15 and Q1 '14 each contained 63 billing days while Q4 '14 contained 62 billing days." Mr. Kelly continued, "We believe that we are still on track to reach operating margins of 7.5% at $1.6 billion of annualized revenues through a combination of several factors, including increasing productivity from our revenue-generating team and continuing to capitalize on additional efficiencies in our support structure."
Highlights for the first quarter include:
• Flex gross profit margin from continuing operations increased 40 basis points to 27.5% in Q1 '15 from 27.1% in Q1 '14.
• Selling, general and administrative expense as a percentage of revenues from continuing operations for Q1 '15 was 26.3% compared to 26.1% for Q1 '14.
• Operating margin of 3.2% in Q1 '15 increased 60 basis points from 2.6% in Q1 '14.
• Adjusted EBITDA of $13.7 million, or $0.48 per share, for Q1 '15 increased 30.0%, or 50.0% per share, from $10.6 million, or $0.32 per share, for Q1 '14.
Mr. Kelly stated, "In addition, looking forward to the second quarter of 2015, we expect revenues may be in the $330 million to $335 million range and earnings per share in the range of $0.34 to $0.36. The second quarter of 2015 has 64 billing days, as compared to 63 billing days in the first quarter of 2015, and 64 billing days in the second quarter of 2014."