Daily News
View All NewsKforce revenue rises 12%, gross margin narrows
Kforce Inc. (NASD: KFRC) reported third-quarter revenue rose 12.1 percent year over year to $313.8 million. However, gross margin narrowed to 31.3 percent in the third quarter from 32.5 percent in the same quarter last year.
Net income at the Tampa, Fla.-based professional staffing firm rose to $65.0 million compared to $9.0 million in the third quarter of 2013. However, results for this year’s third quarter were impacted by the $56.1 million net gain on the sale of the company's medical coder segment in August.
Revenue in Kforce’s largest division, technology staffing, rose 12.4 percent year over year in the third quarter to $217.6 million. New starts activity and job order flow for tech flex staffing remain at high levels and strengthened significantly in September, President Joe Liberatore said in a conference call with investors.
“Demand is strong across most industries, with our top five being financial services, communications, health services, insurance and computer manufacturing, which continue to outpace our average 12.4 percent year-over-year tech flex growth rate,” Libertore said.
Finance and accounting revenue rose 14.7 percent in the third quarter to $71.4 million, and third-quarter government solutions revenue rose 2.7 percent to $24.8 million.
Kforce ranks No. 15 on Staffing Industry Analysts’ 2014 list of largest U.S. staffing firms.
Quote
“We are pleased with our performance in the third quarter of 2014,” said Chairman and CEO David Dunkel. “Our third quarter growth was primarily driven by the strong growth rates in both our tech and FA flex staffing businesses, which had year-over-year increases of 12.4 percent and 17.3 percent, respectively. We are also very pleased with KGS, which has posted three consecutive quarters of sequential growth and has now grown 2.7 percent year over year. We believe these growth rates continue to demonstrate our relentless pursuit of gaining customer share coupled with a strong demand environment. Against a backdrop of tempered economic growth, we continue to see a disproportionate share of job growth coming from the temporary staffing sector as we saw another record high achieved in September with the BLS temp penetration rate moving up to 2.1 percent.”
Revenue
| Q3 2014 (000s) | Q3 2013 (000s) | % growth | |
| Revenue | $313,810 | $279,956 | 12.1% |
Revenue by function and segment
| Q3 2014 (000s) | Q3 2013 (000s) | % growth | |
| Total flex revenue | $301,310 | $267,806 | 12.5% |
| Total search revenue | $12,500 | $12,150 | 2.9% |
| Total revenue | $313,810 | $279,956 | 12.1% |
| Technology | |||
| Technology flex revenue | $212,269 | $188,888 | 12.4% |
| Technology search revenue | $5,374 | $4,694 | 14.5% |
| Total technology revenue | $217,643 | $193,582 | 12.4% |
| Finance & Accounting | |||
| Finance & Accounting flex revenue | $64,254 | $54,791 | 17.3% |
| Finance & Accounting search revenue | $7,126 | $7,456 | -4.4% |
| Total Finance & Accounting revenue | $71,380 | $62,247 | 14.7% |
| Government Solutions | $24,787 | $24,127 | 2.7% |
Gross margin
| Q3 2014 | Q3 2013 | |
| Gross margin | 31.3% | 32.5% |
Gross margin by segment
| Q3 2014 | Q3 2013 | |
| Technology flex | 27.4% | 28.4% |
| Finance & Accounting flex | 30.0% | 30.3% |
| Government solutions flex | 33.4% | 36.1% |
Net income
| Q3 2014 (000s) | Q3 2013 (000s) | |
| Net income | $65,018 | $8,979 |
Guidance
Kforce expects fourth-quarter revenue from continuing operations in the $316 million to $322 million range and gross margin of between 31 percent and 31.2 percent.
Share price and market cap
Shares in Kforce rose 4.09 percent to $22.25 in early afternoon trading today and Kforce has a market cap of approximately $712.77 million, according to Yahoo!