Kforce Inc. Reports Record Revenues of $299.7 Million and Earnings of $0.27 Per Share

Kforce Inc. Reports Record Revenues of $299.7 Million and Earnings of $0.27
Per Share

  *Tech Flex Revenue Up 7.8% Sequentially and 14.2% Year-Over-Year
  *Total Firm Revenues Up 5.6% Sequentially and 10.9% Year-Over-Year
  *Firm Announces Operational Streamlining Expected to Improve EPS 3 to 5
    Cents Quarterly

TAMPA, Fla., Oct. 29, 2013 (GLOBE NEWSWIRE) -- Kforce Inc. (Nasdaq:KFRC), a
provider of professional staffing services and solutions, today announced
results for its third quarter of 2013. Revenues for the quarter ended
September 30, 2013 were $299.7 million compared to $283.7 million for the
quarter ended June 30, 2013, an increase of 5.6%, and compared to $270.2
million for the quarter ended September 30, 2012, an increase of 10.9%. For
the quarter ended September 30, 2013, Kforce reported net income of $9.0
million, or $0.27 per share, versus $6.9 million, or $0.21 per share, for the
quarter ended June 30, 2013, an increase of 29.2% in net income and 28.6% in
earnings per share. Net income and earnings per share for the third quarter of
2013 decreased 3.1% and increased 3.8%, respectively, versus net income of
$9.3 million, or $0.26 per share, for the third quarter of 2012.

Additionally, during October 2013, the Firm commenced a plan to streamline its
leadership and support structure to better align a higher percentage of roles
closer to the customer. As a result of this realignment, the Firm is expected
to incur one-time pre-tax charges related to severance, benefits and related
costs in the range of $6 to $7 million during the fourth quarter.
Additionally, the Firm expects these actions to improve quarterly earnings per
share in the range of $0.03 to $0.05 per share from a reduction in Selling,
General and Administrative expenses once all actions are complete.

David L. Dunkel, Chairman and Chief Executive Officer commented, "We are very
pleased with our performance in the third quarter, as Kforce achieved record
high quarterly revenues of $299.7 million and earnings per share of 27 cents
driven by Tech Flex, our largest business segment, whose growth accelerated to
14.2% year-over-year. Given the many positive growth characteristics driving
Tech Flex, we continue to invest in this service line. All of our businesses
grew sequentially for the second consecutive quarter, driving year-over-year
total revenue growth above 10%. The talent investments we have made are taking
hold, demand is strong, and we expect an acceleration of year-over-year growth
in Q4."

Continued Mr. Dunkel, "We believe this new organizational design will provide
improved accountability and will enable the Firm to move at an accelerated
pace in our efforts to service our clients, consultants and core personnel.
These changes, coupled with our excellent operating platform, should allow us
to accelerate operating margin improvements and continue to fuel our revenue
growth, allowing Kforce to more quickly achieve prior peak earnings levels.

As demonstrated by our Q3 '13 results and Q4 '13 guidance, we believe we are
building meaningful momentum in a very positive operating environment for the
Firm, particularly in Tech Flex. Technology demand remains strong as we
continue to see a secular shift where our clients are increasingly utilizing
staffing to meet their requirements, particularly in this highly project
driven environment. We remain confident in our strategic direction and believe
there are significant opportunities in a growing domestic professional
staffing market as Kforce has only a three percent market share. Thank you to
all of our employees and consultants for their hard work and dedication in
striving to achieve the goals of the Firm." 

Joseph J. Liberatore, President, said, "I am excited about this New Era for
Kforce, as we continue to strategically align our focus to better meet the
needs of our customers.I believe that we have the opportunity to accelerate
revenue growth by expanding within our existing clients and selectively adding
new clients.We continue to evolve our processes and tools to simplify and
improve how we do business with our clients and consultants.We believe this
focus was critical to the widespread productivity gains of our associates at
all tenure levels and was the key to our success in the quarter."

Mr. Liberatore noted additional operational results for the third quarter
include:

  *Flex revenue of $287.4 million in Q3 '13 increased 6.3% from $270.4
    million in Q2 '13 and increased 11.5% from $257.8 million in Q3 '12.
  *Search revenues of $12.2 million in Q3 '13 decreased 8.0% from $13.3
    million in Q2 '13 and decreased 1.0% from $12.4 million in Q3 '12.
  *Sequential increases in Flex revenues on a billing day basis by segment
    were: 7.8% for Tech, 3.5% for FA, 3.6% for HIM and 3.6% for Government
    Solutions.
  *Year-over-year increases in Flex revenues by segment were: 14.2% in Tech,
    6.1% in FA, 8.4% in HIM, and a 6.3% Government Solutions.
  *Revenue-responsible headcount increased 21% year-over-year.

David M. Kelly, Chief Financial Officer, said, "Third quarter revenue and
earnings represent historical highs for the Firm.As we look forward, we
believe sustained revenue growth along with the operating leverage in our
recently realigned operating platform and our significantly productive revenue
responsible team will allow us to exceed prior peak operating margins more
quickly."Kforce is scheduled to present at the JPMC Business Services
Conference, a Regulation FD compliant event, on November 13, 2013 at 10:45 am
(ET) at which point management is expected to provide additional information
on the realignment. Financial highlights for the third quarter include:

  *Flex gross profit increased 20 basis points to 29.6% in Q3 '13 from 29.4%
    in Q2 '13 and was flat as compared to Q2 '12.
  *Selling, general and administrative expenses as a percentage of revenues
    was 26.5% in Q3 '13 as compared to 27.7% in Q2 '13 and 26.0% in Q3 '12.
  *In the third quarter of 2013, the Firm repurchased 0.3 million shares for
    $5.8 million; $63.3 million remains available for future repurchases under
    the Board authorization.
  *Bank debt under the Credit Facility increased to $53.4 million at the end
    of Q3 '13 as compared to $50.1 million at the end of Q2 '13, which was
    primarily attributable to the common stock repurchases.

Mr. Kelly stated, "In addition, looking forward to the fourth quarter of 2013,
we expect revenues may be in the $300 million to $304 million range and
earnings per share in the range of $0.27 to $0.29, excluding one-time charges
related to the realignment. The fourth quarter of 2013 has 62 billing days,
versus 64 days in the third quarter of 2013."

On Tuesday, October 29, 2013, Kforce will host a conference call to discuss
these results. The call will begin at 5:00 p.m. Eastern Time.

The dial-in number is (877) 344-3890. The conference passcode is Kforce. The
replay of the call will be available from 8:00 p.m. EDT, Tuesday, October 29,
2013 through November 12, 2013 by dialing (855) 859-2056, passcode 86990708.

This call is being webcast by Shareholder.com and can be accessed at Kforce's
web site at www.kforce.com (select "Investor Relations"). The webcast replay
will be available until November 12, 2013.

About Kforce

Kforce (Nasdaq:KFRC) is a professional staffing and solutions firm providing
flexible and permanent staffing solutions in the skill areas of technology,
finance & accounting, and health information management. Backed by more than
2,600 associates and approximately 11,400 consultants on assignment, Kforce is
committed to "Great People = Great Results" for our valued clients and
candidates. Kforce operates with 62 offices located throughout the United
States and one office in the Philippines. For more information, please visit
our Web site at http://www.kforce.com.

Certain of the above statements contained in this press release are
forward-looking statements that involve a number of risks and uncertainties.
Such forward-looking statements are within the meaning of that term in Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Factors that could cause actual
results to differ materially include the following: business conditions and
growth in the staffing industry and general economy; competitive factors,
risks due to shifts in the market demand, including, without limitation,
shifts in demand for our Technology, Finance and Accounting, Health
Information Management and Government Solutions segments, as well as the
market for search and flexible staffing assignments; changes in the service
mix; ability of the Firm to complete acquisitions; and the risk factors listed
from time to time in the Firm's reports filed with the Securities and Exchange
Commission, as well as assumptions regarding the foregoing. In particular,
there can be no assurance that we will continue to increase our market share,
successfully manage risks to our revenue stream, improve operating leverage
and successfully put into place the people and processes that will create
future success. The words "should," "believe," "estimate," "expect," "intend,"
"anticipate," "foresee," "plan" and similar expressions and variations thereof
identify certain of such forward-looking statements, which speak only as of
the dates on which they were made. The Firm undertakes no obligation to
publicly update or revise any forward-looking statements. As a result, such
forward looking statements are not guarantees of future performance and
involve risks and uncertainties, and actual results may differ materially from
those indicated in the forward-looking statements as a result of various
factors. Readers are cautioned not to place undue reliance on these
forward-looking statements.

                                                                 
                                                                 
Kforce Inc.
Summary of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
                                                                 
                                             Three Months Ended
                                             Sept. 30,  June 30,   Sept. 30,
                                              2013       2013       2012
                                                                 
Revenue by function:                                              
Technology                                  $193,582 $180,569 $170,577
Finance & accounting                        62,247    60,854    58,729
Health information management               19,696    18,969    18,157
Government solutions                        24,127    23,297    22,698
Total revenue                                 299,652    283,689    270,161
                                                                 
Costs of services                             202,340    190,842    181,399
Gross profit                                  97,312    92,847    88,762
GP %                                          32.5%      32.7%      32.9%
Flex GP %                                     29.6%      29.4%      29.6%
                                                                 
Selling, general & administrative expenses    79,275     78,503     70,367
Depreciation & amortization                   2,536      2,462      2,659
                                                                 
Income from operations                        15,501     11,882     15,736
                                                                 
Other expense, net                            409        205        288
                                                                 
Income from continuing operations before      15,092     11,677     15,448
income taxes
                                                                 
Income tax expense                            6,113      4,729      6,173
                                                                 
Income from continuing operations             8,979      6,948      9,275
                                                                 
Loss from discontinued operations, net of     --        --        (7)
income taxes
                                                                 
Net income                                    $8,979   $6,948   $9,268
                                                                 
                                                                 
Earnings per share - diluted                  $0.27    $0.21    $0.26
Adjusted EBITDA per share                     $0.55    $0.44    $0.51
Shares outstanding - diluted                 33,130     33,859     36,243
                                                                 
Adjusted EBITDA                              $18,337  $14,755  $18,415
                                                                 
Other information:                                                
Capital expenditures                          $2,389   $2,992   $1,568
Equity-based compensation expense, net        $200     $194     $23
Working capital                               $102,580 $94,614  $98,199
                                                                 
Selected balance sheet information:                               
Cash and cash equivalents                     $803     $1,064   $5,418
Accounts receivable, less allowances          $181,934 $164,713 $168,954
Total assets                                  $362,302 $345,169 $352,722
Bank debt                                     $53,411  $50,113  $--
Total liabilities                             $198,064 $184,743 $135,985
Total stockholders' equity                    $164,238 $160,426 $216,737
                                                                 
Billing days                                  64         64         63

                                                   
                                                   
                               Kforce Inc.
                               Key Statistics
                               (Unaudited)
                                                   
                               Q3 2013    Q2 2013    Q3 2012
                                                   
Total Firm                                          
Flex revenue (000's)            $287,408 $270,385 $257,790
Revenue per billing day (000's) $4,490   $4,225   $4,092
Sequential flex revenue change  6.3%       6.4%       -1.2%
Hours (000's)                   4,858     4,598     4,328
Flex GP %                       29.6%      29.4%      29.6%
                                                   
Search revenue (000's)          $12,244  $13,304  $12,371
Placements                     857       939       856
Average fee                     $14,292  $14,166  $14,456
Billing days                    64        64        63
                                                   
Technology                                          
Flex revenue (000's)            $188,888 $175,213 $165,342
Revenue per billing day (000's) $2,951   $2,738   $2,625
Sequential flex revenue change  7.8%       7.6%       -0.4%
Hours (000's)                   2,854     2,688     2,520
Flex GP %                       28.4%      27.8%      28.4%
                                                   
Search revenue (000's)          $4,694   $5,356   $5,235
Placements                     295       336       337
Average fee                     $15,907  $15,955  $15,536
                                                   
Finance & Accounting                                
Flex revenue (000's)            $54,791  $52,954  $51,661
Revenue per billing day (000's) $856     $827     $820
Sequential flex revenue change  3.5%       6.2%       -3.5%
Hours (000's)                   1,707     1,628     1,545
Flex GP %                       30.3%      30.9%      30.9%
                                                   
Search revenue (000's)          $7,456   $7,900   $7,068
Placements                     557       600       513
Average fee                     $13,396  $13,156  $13,783
                                                   
Health Information Management                       
Flex revenue (000's)            $19,602  $18,921  $18,089
Revenue per billing day (000's) $306     $296     $287
Sequential flex revenue change  3.6%       2.0%       -8.5%
Hours (000's)                   297       282       263
Flex GP %                       31.4%      32.8%      35.9%
                                                   
Search revenue (000's)          $94      $48      $68
Placements                      5         3         6
Average fee                     $18,643  $16,167  $11,384
                                                   
Government Solutions                                
Flex revenue (000's)            $24,127  $23,297  $22,698
Revenue per billing day (000's) $377     $364     $360
Sequential flex revenue change  3.6%       2.0%       5.4%
Flex GP %                       36.1%      35.4%      30.5%

                                                                 
                                                                 
Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
                                                                 
Quarterly                                                         
Adjusted EBITDA
                 Three Months Ended
                 Sept. 30,             June 30,            Sept. 30,
                  2013                  2013                2012
                 $          Per share  $          Per      $          Per
                                                   share               share
                                                                 
Net income        $8,979   $0.27    $6,948   $0.21  $9,268   $0.26
Loss from
discontinued      --       --       --       --     (7)        (0.00)
operations, net
of income taxes
Income from
continuing        $8,979   $0.27    $6,948   $0.21  $9,275   $0.26
operations
Depreciation &    2,536     0.08      2,462     0.07    2,659     0.07
amortization
Amortization of   336       0.01      326       0.01    38        0.00
restricted stock
Interest expense  373       0.01      290       0.01    270       0.01
and other
Income tax        6,113     0.18      4,729     0.14    6,173     0.17
expense
Adjusted EBITDA   $18,337  $0.55    $14,755  $0.44  $18,415  $0.51
                                                                 
                                                                 
Weighted average
shares            32,985              33,754            36,204    
outstanding -
basic
Weighted average
shares            33,130              33,859            36,243    
outstanding -
diluted
                                                                 
Adjusted EBITDA, a non-GAAP financial measure, is defined as earnings before
discontinued operations, non-cash impairment charges, interest, income taxes,
depreciation and amortization and stock-based compensation expense.Adjusted
EBITDA should not be considered a measure of financial performance under
generally accepted accounting principles.Items excluded from Adjusted EBITDA
are significant components in understanding and assessing financial
performance.

Adjusted EBITDA is a key measure used by management to evaluate its operations
and to provide useful information to investors. This measure should not be
considered in isolation or as an alternative to net income, cash flows data or
other financial statement information presented in the consolidated financial
statements as indicators of financial performance or liquidity. This
measurement is not determined in accordance with generally accepted accounting
principles and are thus susceptible to varying calculations. The measures as
presented may not be comparable to similarly titled measures of other
companies.

CONTACT: Michael R. Blackman
         Chief Corporate Development Officer
         (813) 552-2927

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