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Kforce revenue rises 13%, posts Q4 net income

February 11, 2015

Kforce Inc. (NASD: KFRC) reported fourth-quarter revenue rose 13.0%. The Tampa, Fla.-based professional staffing provider reported net income of $8.9 million compared to a net loss of $8.2 million in the year-ago quarter. The fourth quarter of 2013 had included a $14.5 million charge related to goodwill impairment.

Kforce ranks No. 15 on Staffing Industry Analysts’ 2014 list of largest U.S. staffing firms.

(US$ thousands) Q4 2014 Q4 2013 % growth
Revenue $318,739 $282,061 13.0%
Gross profit $98,378 $89,371 10.1%
Gross margin percentage 30.9% 31.7%  
Net income/loss $8,945 -$8,234 nm

Quote

“The industry is very healthy, with specialty firms leading the way,” Kforce Chairman and CEO David Dunkel said in a conference call with analysts. “The tech space continued its strong growth trends in 2014 and is projected to grow at high levels for the next several years. The FA market also was robust which contributed to our strong growth performance. The secular shift continues as the need for flexibility and specialized skills, the project nature of work and the regulatory environment drive customers to greater use of flexible resources.”

Revenue by function and segment

(US$ thousands) Q4 2014 Q4 2013 % growth
Total flex revenue $306,824 $270,485 13.4%
Total search revenue $11,915 $11,576 2.9%
       
Technology      
Technology flex revenue $212,414 $193,238 9.9%
Technology search revenue $4,740 $4,338 9.3%
Total technology revenue $217,154 $197,576 9.9%
       
Finance & Accounting      
Finance & Accounting flex revenue $67,863 $55,552 22.2%
Finance & Accounting search revenue $7,175 $7,238 -0.9%
Total Finance & Accounting revenue $75,038 $62,790 19.5%
       
Government Solutions $26,547 $21,695 22.4%

Gross margin by segment

  Q4 2014  Q4 2013 
Technology flex 27.4% 27.9%
Finance & Accounting flex 29.6% 30.3%
Government solutions flex 31.0% 32.9%

Full-year results

(US$ thousands) 2014 2013 % growth
Revenue $1,217,331 $1,073,728 13.4%
Gross profit $374,581 $344,376 8.8%
Gross margin percentage 30.8% 32.1%  
Net income/loss $90,915 $10,787 nm

Guidance

Kforce expects first-quarter revenue from continuing operations in the $312 million to $317 million range.

Share price and market cap

Shares in Kforce fell 3.11% to $23.68 in early afternoon trading; Kforce has a market cap of approximately $717.20 million, according to Yahoo!