Kforce Reports Third Quarter 2024 Revenue of $353.3 Million and EPS of $0.75
TAMPA, Fla., Oct. 28, 2024 (GLOBE NEWSWIRE) -- Kforce Inc. (NYSE:KFRC), a solutions firm that specializes in technology and other professional staffing services, today announced results for the third quarter of 2024. References to "as adjusted" figures within this press release relate to results for the quarter ended September 30, 2023, as adjusted for certain expenses. These references pertain to non-GAAP measures that are more fully described in the Adjusted Financial Performance Measures section of this press release.
Joseph J. Liberatore, President and Chief Executive Officer, said, "We are pleased with our third quarter performance as revenues exceeded the midpoint of our expectations and earnings per share exceeded the top end of our guidance. Our Technology business has largely been stable for the last four quarters and our third quarter performance was no exception. Our internal trends and discussions with our clients continue to indicate to us that the current operating environment is more stable and constructive than it was throughout most of 2023. Clients, broadly speaking, have continued to exercise a degree of caution, though the most critical projects continue to be initiated."
Mr. Liberatore continued, "I'd also like to express my thanks to our team on the actions they have taken related to the recent hurricanes that impacted the Tampa Bay area, where our headquarters is located, and more broadly across Florida, North Carolina and neighboring areas in the Southeast. Hurricanes Helene and Milton had devastating impacts across these areas and many areas have a long road to recovery. Despite these hardships, our teams' resiliency was on full display, and I am simply in awe of the tremendous efforts by our people to balance their personal safety, their families and team members while also ensuring the continuity of Kforce operations. That being said, the impacts are so much larger than Kforce, and I am pleased to announce that Kforce will be donating $500,000 to charitable organizations in the Tampa Bay and North Carolina areas to aid in the broader recovery efforts. We talk about the amazing culture we have at Kforce; seeing it in action, once again, over the last several weeks is truly inspiring."
Quarterly Financial Highlights
Revenue for the quarter ended September 30, 2024 was $353.3 million, a decrease of 0.8% sequentially and 5.3% year over year.
Technology Flex revenue decreased 0.6% sequentially and 3.6% (5.1% on a billing day basis) year over year. FA Flex revenue decreased 4.1% sequentially and 20.7% (21.9% on a billing day basis) year over year.
Gross profit margins of 27.9% increased 10 basis points sequentially and 20 basis points year over year. Flex gross profit margins of 26.3% increased 10 basis points sequentially and 40 basis points year over year.
SG&A expenses as a percentage of revenue was 22.2% for the quarter ended September 30, 2024, which increased 40 basis points sequentially and decreased 90 basis points year over year. As adjusted, SG&A expenses as a percentage of revenue increased 130 basis points year over year.
Operating margins were 5.3% for the quarter ended September 30, 2024, which decreased 20 basis points sequentially and increased 100 basis points year over year. As adjusted, operating margins decreased 120 basis points year over year.
Diluted earnings per share for the quarter ended September 30, 2024 were $0.75, an increase of 38.9% year over year. As adjusted, diluted earnings per share decreased 16.7% year over year.
We returned $17.1 million in capital to our shareholders in the form of open market repurchases and quarterly dividends during the third quarter of 2024.
Our Board of Directors approved a fourth quarter cash dividend of $0.38 per share to shareholders of record as of the close of business on December 6, 2024, which will be payable on December 20, 2024.
Fourth Quarter 2024 - Guidance
Looking forward to the fourth quarter of 2024, there will be 62 billing days, compared to 64 billing days in the third quarter of 2024 and 61 billing days in the fourth quarter of 2023. Current estimates for the fourth quarter of 2024 are:
Revenue of $337 million to $345 million
Earnings per share of $0.56 to $0.64
Gross profit margin of 27.4% to 27.6%
Flex gross profit margin of 25.9% to 26.1%
SG&A expenses as a percent of revenue of 22.4% to 22.6%
Operating margin of 4.3% to 4.7%
WASO of 18.6 million
Effective tax rate of 26.0%
Conference Call
On Monday, October 28, 2024, Kforce will host a conference call at 5:00 p.m. E.T. to discuss these results. The dial-in number is (800) 715-9871 and the conference passcode is "Kforce." The prepared remarks for this call and webcast are available on the Investor Relations page of the Kforce Inc. website in the News and Events section. The replay of the call can be accessed at http://investor.kforce.com.
About Kforce Inc.
Kforce Inc. (the "Firm") is a solutions firm specializing in technology and other professional staffing services. Each year, we provide career opportunities for approximately 20,000 highly skilled professionals on a temporary, consulting or direct-hire basis. These professionals work with approximately 2,500 clients, including a significant majority of the Fortune 500, helping them conquer challenges and meet their digital transformation goals. Together, we reimagine how business gets done. For more than 60 years, we have achieved our clients' objectives by combining a KNOWLEDGEforce®—our namesake—with flexibility and an unmatched drive for excellence.
Michael R. Blackman, Chief Corporate Development Officer
(813) 552-2927
Cautionary Note Regarding Forward-Looking Statements
All statements in this press release, other than those of a historical nature, are forward-looking statements including, but not limited to, statements regarding the trends in the operating environment, and the Firm's guidance for the fourth quarter of 2024. 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; growth rate in temporary staffing and the general economy; competitive factors; risks due to shifts in the market demand; changes in client demand or our ability to adapt to such changes; a constraint in the supply of consultants and candidates or the Firm's ability to attract and retain such individuals; the success of the Firm in attracting and retaining its management team and key operating employees; changes in business or service mix; the ability of the Firm to repurchase shares; the occurrence of unanticipated expenses, income, gains or losses; the effect of adverse weather conditions; changes in our effective tax rate; our ability to comply with government regulations, laws, orders, guidelines and policies that impact our business; risk of contract performance, delays, termination or the failure to obtain new assignments or contracts, or funding under contracts; ability to comply with our obligations in a remote work environment; continued performance and security of, and improvements to, our enterprise information systems; impacts of actual or potential litigation or other legal or regulatory matters or liabilities, including the risk factors and matters listed from time to time in the Firm's reports filed with the Securities and Exchange Commission, including, but not limited to, the Firm's Form 10-K for the fiscal year ended December 31, 2023, as well as assumptions regarding the foregoing. The terms "should," "believe," "estimate," "expect," "intend," "anticipate," "plan" and similar expressions and variations thereof contained in this press release identify certain of such forward-looking statements, which speak only as of the date of this press release. As a result, such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Future events and actual results may differ materially from those indicated in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements and the Firm undertakes no obligation to update any forward-looking statements.
Kforce Inc.Summary of Operations(In Thousands, Except Per Share Amounts)(Unaudited)
Three Months Ended
September 30, 2024
June 30, 2024
September 30, 2023
Revenue
$
353,319
$
356,318
$
373,122
Direct costs
254,752
257,345
269,661
Gross profit
98,567
98,973
103,461
Selling, general and administrative expenses
78,308
77,718
86,226
Depreciation and amortization
1,543
1,555
1,202
Income from operations
18,716
19,700
16,033
Other expense, net
429
504
181
Income from operations, before income taxes
18,287
19,196
15,852
Income tax expense
4,078
5,039
5,277
Net income
$
14,209
$
14,157
$
10,575
Earnings per share, diluted
$
0.75
$
0.75
$
0.54
Weighted average shares outstanding, diluted
18,823
18,886
19,518
Adjusted EBITDA
$
23,808
$
24,753
$
29,039
Billing days
64
64
63
Kforce Inc.Consolidated Balance Sheets(In Thousands)(Unaudited)
September 30, 2024
December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
127
$
119
Trade receivables, net of allowances
229,259
233,428
Prepaid expenses and other current assets
10,553
10,912
Total current assets
239,939
244,459
Fixed assets, net
8,267
9,418
Other assets, net
90,614
75,924
Deferred tax assets, net
5,990
3,138
Goodwill
25,040
25,040
Total assets
$
369,850
$
357,979
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and other accrued liabilities
$
60,265
$
64,795
Accrued payroll costs
46,442
33,968
Current portion of operating lease liabilities
3,325
3,589
Income taxes payable
6,491
623
Total current liabilities
116,523
102,975
Long-term debt, credit facility
26,900
41,600
Other long-term liabilities
59,053
54,324
Total liabilities
202,476
198,899
Commitments and contingencies
Stockholders' equity:
Preferred stock
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