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View All NewsKforce Q4 revenue up 1% on same-billing day basis
Kforce Inc. (NASD: KFRC) reported fourth-quarter revenue rose 1.1% on a same-billing day basis — the fourth quarter of 2016 had one less billing day than the fourth quarter of 2015, the company reported. However, revenue fell 0.5% year over year on a reported basis.
Gross margin at the Tampa, Fla.-based professional staffing narrowed to 30.6% from 31.6% in the year-ago quarter, driven by a 60-basis-point decline in flex gross profit margins as well as a reduced concentration of higher margin direct-hire revenue, the company reported in a conference call with analysts.
| (US$ thousands) | Q4 2016 | Q42015 | % change |
| Revenue | $325,998 | $327,699 | -0.5% |
| Gross profit | $99,648 | $103,515 | -3.7% |
| Gross margin percentage | 30.6% | 31.6% | |
| Net income | $9,239 | $11,901 | -22.4% |
Quote
“The Presidential election and expectations for a slowing period of economic growth caused uncertainty and hesitancy by our clients to make new commitments for 2017 investments,” Chairman and CEO David Dunkel said in a conference call with analysts. “It was widely anticipated that we were approaching the end of the business cycle and the staffing industry was entering a recession.”
But the surprising election results brought optimism and greater clarity for economic prospects, and improving trends were seen later in the fourth quarter, Dunkel said.
“Given the pace of reform under the Trump administration in large and complex areas such as immigration, healthcare, financial regulation and corporate taxation, we are closely monitoring the potential impacts, both positive and negative, on our business,” Dunkel said. “To date, most of the details regarding the potential reform in these areas have not yet been communicated.”
Revenue by function and segment
| (US$ thousands) | Q4 2016 | Q4 2015 | % change |
| Total flex revenue | $314,714 | $314,286 | 0.1% |
| Total direct-hire revenue | $11,284 | $13,413 | -15.9% |
| Technology | |||
| Technology flex revenue | $212,437 | $212,917 | -0.2% |
| Technology direct-hire revenue | $4,370 | $5,109 | -14.5% |
| Total technology revenue | $216,807 | $218,026 | -0.6% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $78,880 | $78,512 | 0.5% |
| Finance & Accounting direct-hire revenue | $6,914 | $8,304 | -16.7% |
| Total Finance & Accounting revenue | $85,794 | $86,816 | -1.2% |
| Government Solutions flex revenue | $23,397 | $22,857 | 2.4% |
Gross margin by segment
| Q4 2016 | Q4 2015 | |
| Technology flex | 27.5% | 27.5% |
| Finance & Accounting flex | 29.1% | 29.9% |
| Government solutions flex | 30.3% | 34.9% |
Full-year results
| (US$ thousands) | 2016 | 2015 | % growth |
| Revenue | $1,319,706 | $1,319,238 | 0.0% |
| Gross profit | $408,499 | $414,114 | -1.4% |
| Gross margin percentage | 31.0% | 31.4% | -1.3% |
| Net income | $32,773 | $42,824 | -23.5% |
Guidance
Kforce forecast first-quarter revenue of between $330 million to $335 million. Gross margins are expected to be between 29.3% and 29.5%.
Share price and market cap
Kforce shares rose 19.44% in early afternoon trading today to $25.50. The company had a market cap of $656.5 million, according to Yahoo.