Kforce Reports Record Revenues of $305.3 Million and Earnings of $0.19 Per Share

Kforce Reports Record Revenues of $305.3 Million and Earnings of $0.19 Per
Share

Flex Staffing Revenue Up 18% Year Over Year

TAMPA, Fla., April 29, 2014 (GLOBE NEWSWIRE) -- Kforce Inc. (Nasdaq: KFRC), a
provider of professional staffing services and solutions, today announced
results for its first quarter of 2014. Revenues for the quarter ended March
31, 2014 were $305.3 million compared to $302.9 million for the quarter ended
December 31, 2013, an increase of 0.8%, and compared to $265.6 million for the
quarter ended March 31, 2013, an increase of 14.9%. In the quarter ended March
31, 2014, Kforce reported net income of $6.2 million, or $0.19 per share,
versus adjusted net income of $9.1 million, or $0.28 per share, which is
defined as net income before an $11.9 million pre-tax realignment charge and a
$14.5 million pre-tax goodwill impairment charge, for the quarter ended
December 31, 2013. On a GAAP basis, Kforce reported a net loss of $8.2
million, or a loss of $0.25 per share, for the quarter ended December 31,
2013. Net income and earnings per share for the first quarter of 2014
increased 102% and 111%, respectively, versus net income of $3.1 million, or
$0.09 per share, for the first quarter of 2013.

David L. Dunkel, Chairman and CEO, said, "We are very pleased with our
performance in the first quarter of 2014, as Kforce achieved record quarterly
revenues of $305.3 million and earnings per share of 19 cents. Our first
quarter growth was broadly driven by the strong growth rates for our Flex
staffing businesses in Tech, FA and HIM, which had year-over-year increases of
18.2%, 14.5% and 25.3%, respectively. We believe these growth rates continue
to demonstrate the fruits of our relentless pursuit of gaining customer
share."

Mr. Dunkel continued, "We believe that professional staffing has entered a new
age with growth being driven by clients increasingly utilizing a flexible
staffing solution to mitigate employment and regulatory risk, as well as the
ubiquitous nature of technology today across our clients' business platforms.
Against a backdrop of tempered GDP growth, we continue to see a
disproportionate share of job growth coming from the temporary staffing
sector. The temporary penetration rate is now at 2.06%, surpassing the prior
all time high of 2.03%. Knowledge workers are in high demand as the
unemployment rate among college-degreed workers is currently 3.4%, about half
of the overall U.S. rate of unemployment, and is substantially lower in
several of the skill sets Kforce specializes in, particularly in technology.
We believe that these secular shifts in the labor market, along with our
domestic revenue footprint, have positioned the Firm for even greater future
success. I want to thank all of our clients, consultants and employees for
making the first quarter of 2014 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, with double digit year-over-year revenue growth rates in Tech Flex, FA
Flex and HIM Flex, collectively contributing a Flex staffing revenue
year-over-year increase of 18%. 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 in our newly aligned and
agile infrastructure."

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

  *Flex revenues of $295.6 million in Q1 '14 increased 1.5% from $291.2
    million in Q4 '13, and increased 16.3% from $254.1 million in Q1 '13.
  *Search revenues of $9.7 million in Q1 '14 decreased 17.1% from $11.8
    million in Q4 '13 and decreased 15.7% from $11.6 million in Q1 '13.
  *Revenue-generating headcount increased 7.2% year-over-year and remained
    flat sequentially. The Firm expects to make continued investments in
    revenue-generating headcount during the remainder of 2014.

David M. Kelly, Chief Financial Officer, said, "The Firm continued to perform
well in Q1 '14 which contained 63 billing days, while Q1 '13 contained 63
billing days and Q4 '13 contained 62 billing days." Mr. Kelly continued, "The
Firm has achieved historical high quarterly revenues. We believe that we are
on track to exceed prior peak operating margins as annualized revenues
approach $1.6 billion through a combination of several factors, including
positive secular drivers in the economic environment, a high proportion of our
business in the fast growing technology sector, increasing productivity from
the investments we have made over the past 18 months in revenue-generating
headcount and our streamlined revenue enabling support structure. We believe
we have set the stage for further revenue acceleration and operating leverage
growth, which will ultimately drive increased value to our shareholders."

Financial highlights for the first quarter include:

  *Selling, general and administrative expense as a percentage of revenues
    was 25.6% in Q1 '14 as compared to 25.9%, excluding an $11.9 million
    realignment charge, for Q4 '13, and as compared to 28.5% in Q1 '13.
  *Flex gross profit decreased 150 basis points to 27.5% in Q1 '14 from 29.0%
    in Q4 '13 and decreased 80 basis points from 28.3% in Q1 '13.
  *Operating margin of 3.4% in Q1 '14 increased 140 basis points from 2.0% in
    Q1 '13.
  *Adjusted EBITDA of $13.7 million, or $0.41 per share, for Q1 '14 increased
    87.2%, or 86.4% per share, from $7.3 million, or $0.22 per share, for Q4
    '13, and increased 73.3%, or 78.3% per share, from $7.9 million, or $0.23
    per share, for Q1 '13.

Mr. Kelly stated, "In addition, looking forward to the second quarter of 2014,
we expect revenues may be in the $323.0 million to $328.0 million range and
earnings per share in the range of $0.30 to $0.33. The second quarter of 2014
has 64 billing days, as compared to 63 billing days in the first quarter of
2014."

On Tuesday, April 29, 2014, 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. EST, Tuesday, April 29,
2014 through May 13, 2014 by dialing (855) 859-2056, passcode 34047942.

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 May 13, 2014.

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 11,700 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.

The Kforce Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3749.

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
Section27A of the Securities Act of 1933, as amended, and Section21E 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, successfully put into place
the people and processes that will create future success or further accelerate
our revenue. 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
                                                              
                                          Mar. 31,   Dec. 31,   Mar. 31,
                                          2014       2013       2013
                                                              
Revenue by function:                                           
Technology                                $196,471 $197,576 $167,635
Finance & accounting                      62,782    62,790    56,526
Health information management             23,288    20,858    18,636
Government solutions                      22,771    21,695    22,830
Total revenue                              305,312    302,919    265,627
                                                              
Costs of services                          214,213    206,802    182,291
Gross profit                               91,099    96,117    83,336
GP %                                       29.8%      31.7%      31.4%
Flex GP %                                  27.5%      29.0%      28.3%
                                                              
Selling, general & administrative expenses 78,210     90,462     75,693
Goodwill impairment                        --        14,510    --
Depreciation & amortization                2,363      2,451      2,397
                                                              
Income (loss) from operations              10,526     (11,306)   5,246
                                                              
Other expense, net                         365        355        256
                                                              
                                                              
Income (loss) before income taxes          10,161     (11,661)   4,990
                                                              
Income tax expense (benefit)               3,912      (3,427)    1,896
                                                              
Net income (loss)                          $6,249   $(8,234) $3,094
                                                              
                                                              
Earnings per share - diluted               $0.19    $(0.25)  $0.09
Adjusted EBITDA per share                  $0.41    $0.22    $0.23
Shares outstanding - diluted               33,168     32,889     34,485
                                                              
Adjusted EBITDA                            $13,701  $7,317   $7,904
                                                              
Other information:                                             
Capital expenditures                       $1,281   $2,075   $2,618
Working capital                            $118,124 $112,913 $89,987
                                                              
Selected balance sheet information:                            
Cash and cash equivalents                  $816     $875     $907
Accounts receivable, less allowances       $187,844 $179,095 $164,487
Total assets                               $352,294 $347,768 $340,981
Bank debt                                  $61,216  $62,642  $39,549
Total liabilities                          $190,891 $190,535 $173,335
Total stockholders' equity                 $161,403 $157,233 $167,646
                                                              
Billing days                               63         62         63


Kforce Inc.
Key Statistics
(Unaudited)
                                                   
                                                   
                               Q1 2014    Q4 2013    Q1 2013
                                                   
Total Firm                                          
Flex revenue (000's)            $295,571 $291,163 $254,075
Revenue per billing day (000's) $4,692   $4,696   $4,033
Sequential flex revenue change  1.5%       1.3%       -1.8%
Hours (000's)                   4,904     4,910     4,287
Flex GP %                       27.5%      29.0%      28.3%
                                                   
Search revenue (000's)          $9,741   $11,756  $11,552
Placements                      802       1,033     865
Average fee                     $12,147  $11,375  $13,352
Billing days                    63        62        63
                                                   
Technology                                          
Flex revenue (000's)            $192,463 $193,238 $162,840
Revenue per billing day (000's) $3,055   $3,117   $2,585
Sequential flex revenue change  -0.4%      2.3%       -0.3%
Hours (000's)                   2,831     2,870     2,517
Flex GP %                       26.5%      27.9%      27.0%
                                                   
Search revenue (000's)          $4,008   $4,338   $4,795
Placements                      257       281       310
Average fee                     $15,621  $15,410  $15,472
                                                   
Finance & Accounting                                
Flex revenue (000's)            $57,100  $55,552  $49,861
Revenue per billing day (000's) $906     $896     $792
Sequential flex revenue change  2.8%       1.4%       -4.0%
Hours (000's)                   1,748     1,717     1,498
Flex GP %                       28.4%      30.3%      29.3%
                                                   
Search revenue (000's)          $5,682   $7,238   $6,665
Placements                      543       743       549
Average fee                     $10,457  $9,743   $12,135
                                                   
Health Information Management                       
Flex revenue (000's)            $23,237  $20,678  $18,544
Revenue per billing day (000's) $369     $333     $294
Sequential flex revenue change  12.4%      5.5%       -4.1%
Hours (000's)                   325       323       272
Flex GP %                       32.4%      31.8%      31.8%
                                                   
Search revenue (000's)          $51      $180     $92
Placements                      2         9         6
Average fee                     $25,453  $19,987  $15,363
                                                   
Government Solutions                                
Flex revenue (000's)            $22,771  $21,695  $22,830
Revenue per billing day (000's) $362     $350     $362
Sequential flex revenue change  5.0%       -10.1%     -5.6%
Flex GP %                       29.0%      32.9%      31.8%



Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
                                                            
Adjusted Net Income and Earnings Per                        
Share
                                          Three Months Ended
                                          Dec. 31,
                                          2013
                                          $                  Per share
Net (loss) income                        $(8,234)         $(0.25)
Goodwill impairment, pre-tax             14,510            0.44
Realignment-related charges, pre-tax:                      
Severance and termination-related         7,097             0.21
expenses
Discretionary bonus related to            4,737             0.14
realignment
Other                                    66                0.01
Realignment-related charges, pre-tax:    11,900            0.36
Income tax benefit                       (9,036)           (0.27)
Adjusted net income                      $9,140           $0.28
                                                            
Weighted average shares outstanding -     32,889            
basic
Weighted average shares outstanding -     33,080            
diluted
                                                            
"Adjusted Net Income and Earnings Per Share", a non-GAAP financial measure, is
defined as net income before the non-cash impairment charge related to
goodwill, realignment and other charges and the related tax benefit."Adjusted
Net Income and Earnings Per Share" has been provided by management to evaluate
its operations and provide useful information to investors in addition to
providing consistency and comparability of the 2013 results with net income
and earnings per share from other periods."Adjusted Net Income and Earnings
Per Share" should not be considered a measure of financial performance under
generally accepted accounting principles.


Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
                                                                 
Quarterly                                                         
Adjusted EBITDA
                Three Months Ended
                Mar. 31,              Dec. 31,               Mar. 31,
                2014                  2013                   2013
                $          Per share  $           Per share  $        Per
                                                                       share
                                                                 
Net income       $6,249   $0.19    $(8,234)  $(0.25)  $3,094 $0.09
(loss)
                                                                 
Goodwill
impairment,      --        --        14,510     0.44      --      --
pre-tax
Depreciation &   2,363     0.07      2,451      0.07      2,397   0.07
amortization
Stock-based
compensation     799       0.02      1,633      0.05      274     0.00
expense
Interest expense 378       0.01      384        0.01      243     0.00
and other
Income tax
expense          3,912     0.12      (3,427)    (0.10)    1,896   0.07
(benefit)
Adjusted EBITDA  $13,701  $0.41    $7,317    $0.22    $7,904 $0.23
                                                                 
Weighted average
shares           32,969              32,889               34,391  
outstanding -
basic
Weighted average
shares           33,168              33,080               34,485  
outstanding -
diluted
                                                                 
Adjusted EBITDA, a non-GAAP financial measure, is defined as earnings before
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.

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

Kforce Inc. Logo
 
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