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8-K - FORM 8 K - KFORCE INC | d296856d8k.htm |
Exhibit 99.1
Kforce Inc.
1001 East Palm Ave.
Tampa, FL 33605
(NASDAQ: KFRC)
AT THE FIRM
Michael R. Blackman
Chief Corporate Development Officer
(813) 552-2927
KFORCE REPORTS FOURTH QUARTER AND FULL YEAR 2011 RESULTS
| FOURTH QUARTER REVENUES OF $285.6 MILLION AND EPS OF $0.20 |
| FLEX REVENUES PER BILLING DAY INCREASED 4.2% SEQUENTIALLY |
| TOTAL 2011 REVENUE AND EPS GROWTH OF 12.1% AND 37.3% |
TAMPA, FL, February 7, 2012 (GLOBE NEWSWIRE) Kforce Inc. (Nasdaq: KFRC), a provider of professional staffing services and solutions, today announced results for its fourth quarter of 2011. Revenue for the quarter ended December 31, 2011 was $285.6 million compared to $289.0 million for the quarter ended September 30, 2011, a decrease of 1.2% and compared to $258.5 million for the quarter ended December 31, 2010, an increase of 10.5%. For the quarter ended December 31, 2011, Kforce reported net income of $7.1 million, or $0.20 per share, versus $8.4 million, or $0.22 per share, for the quarter ended September 30, 2011, a decrease of 16.1% in net income and 9.1% in earnings per share, respectively. Net income and earnings per share for the fourth quarter of 2011 increased 11.8% and 25.0%, respectively, versus the fourth quarter of 2010, which had net income of $6.3 million, or $0.16 per share.
Kforce reported total revenue for the year ended December 31, 2011 of $1.1 billion as compared to $990.8 million for 2010, an increase of 12.1%. Net income was $27.2 million, or $0.70 per share, for the year ended December 31, 2011, versus net income of $20.6 million, or $0.51 per share, for 2010, which represents an increase of 31.6% in net income and 37.3% in earnings per share.
We are very pleased with both Q4 and full year 2011 results. Fourth quarter revenues of $285.6 million and earnings per share of $0.20 were both at the top end of our guidance. In the quarter, the Firm also achieved several milestones, establishing record quarterly revenue per billing day for total Firm, total Firm Flex, total Tech, Tech Flex and HIM Flex. Additionally, full year 2011 total Firm Flex revenue increased 12.1%, said David L. Dunkel, Chairman and Chief Executive Officer. Looking at our service lines, Flex revenues for our Tech, FA, Clinical Research and HIM segments for 2011 experienced increases of 16.1%, 17.2%, 1.8% and 19.7%, respectively, while Government Solutions declined 10.4%. We believe that the secular shift towards a flexible staffing model in this temporary employment-led recovery, as evidenced by a disproportionate increase of job creation occurring in temporary staffing, has contributed to our growth in what remains an uncertain macroeconomic environment. In addition, with college educated unemployment at 4.1%, there remains significant demand for professional talent. I wish to thank all of our employees, consultants and clients for making 2011 a very successful year for Kforce and we remain optimistic about the Firms prospects.
William L. Sanders, President, said, We are very pleased with the results for the fourth quarter, where we experienced a sequential revenue increase in all Flex business lines on a billing day basis, except for Clinical Research, which is impacted by paid time off around the holidays. We were able to continue to take advantage of our highly advanced sales and delivery platform that leverages the combination of our field associates, strategic accounts executives and National Recruiting Center to profitably grow revenue with both large and small clients. Our key performance indicators and discussions with clients indicate that demand continues to be solid. Kforce continues to aggressively pursue business opportunities with the goal of continuing to gain client and market share.
Mr. Sanders noted additional operational results for the fourth quarter include:
| Flex revenue per billing day of $4.5 million in Q4 11 increased 4.2% over Q3 11 and increased 11.2% over Q4 10. |
| Flex revenue of $275.2 million in Q4 11 decreased 0.7% from $277.1 million in Q3 11 and increased 11.2% from $247.4 million in Q4 10. |
| Sequential percentage changes in Flex revenue on a billing day basis by segment were: 12.3% increase for HIM, 11.2% increase for FA, 2.5% increase for Tech, 2.4% increase for Government Solutions and a 1.6% decrease for Clinical Research. |
| Search revenue of $10.4 million in Q4 11 decreased 12.4% from $11.9 million in Q3 11 and decreased 6.0% from $11.1 million in Q4 10. |
Joseph J. Liberatore, Chief Financial Officer, said, The Firm performed well in Q4 11. We believe our fourth quarter results reflect strong client relationships, and an improving pricing environment Q4 11 and Q4 10 each contained 61 billing days while Q3 11 contained 64 billing days.
Mr. Liberatore continued, From a financial standpoint, 2011 provided the opportunity for the Firm to take advantage of our flexibility and capacity to gain market share while protecting our strong balance sheet and delivering solid results. Cash flow and EBITDA continued to be strong in 2011. During 2011, the Firm repurchased approximately 5.7 million shares of Kforce common stock which represented 13.8% of outstanding shares at December 31, 2010. We will continue to be opportunistic in future repurchases as cash flow and market conditions warrant. We believe we are well positioned to take advantage of available opportunities in 2012 and return strong results to our shareholders.
Financial highlights for the fourth quarter and 2011 include:
| Flex gross profit decreased 30 basis points to 28.6% in Q4 11 from 28.9% in Q3 11 and decreased 20 basis points from 28.8% in Q4 10. |
| Selling, general and administrative expenses as a percentage of revenue for fiscal 2011 was 26.0% compared to 26.8% for fiscal 2010, reflecting a decrease of 80 basis points. |
| Adjusted EBITDA for fiscal 2011 was $69.3 million, an increase of 30.2% from $53.2 million in fiscal 2010. |
| Earnings per share for fiscal 2011 was $0.70, an increase of 37.3% from $0.51 per share in fiscal 2010. |
| Bank debt at the end of Q4 11 was $49.5 million, reflecting a decrease of $9.9 million from $59.4 million at the end of Q3 11. |
Mr. Liberatore stated, In addition, looking forward to the first quarter of 2012, we expect revenues may be in the $293 million to $300 million range and earnings per share in the range of $0.14 to $0.16, which reflects an impact of approximately $0.07 per share of payroll taxes. The first quarter of 2012 has 64 billing days versus 61 billing days in the fourth quarter of 2011.
On Tuesday, February 7, 2012, 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 replay of the call will be available from 8:00 p.m. Eastern Time Tuesday, February 7 to February 21, 2012 by dialing (800) 642-1687, passcode 51845786.
This call is being webcast by Shareholder.com and can be accessed at Kforces web site at www.kforce.com (select Investor Relations). The webcast replay will be available until February 21, 2012.
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 and life sciences. Backed by more than 2,200 associates and approximately 11,100 consultants on assignment, Kforce is committed to Great People = Great Results for our valued clients and candidates. Kforce operates with 63 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 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, Clinical Research, 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 Firms 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 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 | ||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | ||||||||||
2011 | 2011 | 2010 | ||||||||||
Revenue by function: |
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Technology |
$ | 160,822 | $ | 165,476 | $ | 142,869 | ||||||
Finance & accounting |
56,672 | 54,297 | 53,449 | |||||||||
Health information management |
18,578 | 17,370 | 15,876 | |||||||||
Clinical research |
26,210 | 27,967 | 22,988 | |||||||||
Government solutions |
23,269 | 23,881 | 23,313 | |||||||||
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Total revenue |
285,551 | 288,991 | 258,495 | |||||||||
Revenue by time: |
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Flex |
275,154 | 277,123 | 247,437 | |||||||||
Search |
10,397 | 11,868 | 11,058 | |||||||||
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Total revenue |
285,551 | 288,991 | 258,495 | |||||||||
Costs of services |
196,447 | 196,953 | 176,086 | |||||||||
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Gross profit |
89,104 | 92,038 | 82,409 | |||||||||
GP % |
31.2 | % | 31.8 | % | 31.9 | % | ||||||
Flex GP % |
28.6 | % | 28.9 | % | 28.8 | % | ||||||
Selling, general & administrative expenses |
74,461 | 75,134 | 68,700 | |||||||||
Depreciation & amortization |
3,075 | 3,072 | 3,262 | |||||||||
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Income from operations |
11,568 | 13,832 | 10,447 | |||||||||
Other expense, net |
365 | 301 | 266 | |||||||||
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Income before income taxes |
11,203 | 13,531 | 10,181 | |||||||||
Income tax expense |
4,118 | 5,085 | 3,843 | |||||||||
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Net income |
$ | 7,085 | $ | 8,446 | $ | 6,338 | ||||||
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Earnings per share - diluted |
$ | 0.20 | $ | 0.22 | $ | 0.16 | ||||||
Adjusted EBITDA per share |
$ | 0.50 | $ | 0.52 | $ | 0.37 | ||||||
Shares outstanding - diluted |
35,709 | 38,228 | 40,848 | |||||||||
Adjusted EBITDA |
$ | 17,866 | $ | 20,084 | $ | 15,207 | ||||||
Other information: |
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Capital expenditures |
$ | 2,445 | $ | 2,113 | $ | 3,314 | ||||||
Equity-based compensation expense, net |
$ | 2,061 | $ | 1,931 | $ | 1,383 | ||||||
Billing days |
61 | 64 | 61 |
Kforce Inc.
Summary of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Twelve Months Ended | ||||||||
Dec. 31, | Dec. 31, | |||||||
2011 | 2010 | |||||||
Revenue by function: |
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Technology |
$ | 624,012 | $ | 538,566 | ||||
Finance & accounting |
219,575 | 187,196 | ||||||
Health information management |
68,711 | 57,763 | ||||||
Clinical research |
106,172 | 104,150 | ||||||
Government solutions |
92,449 | 103,132 | ||||||
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Total revenue |
1,110,919 | 990,807 | ||||||
Revenue by time: |
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Flexible |
1,066,374 | 951,430 | ||||||
Perm |
44,545 | 39,377 | ||||||
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Total revenue |
1,110,919 | 990,807 | ||||||
Costs of services |
764,616 | 678,393 | ||||||
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Gross profit |
346,303 | 312,414 | ||||||
GP % |
31.2 | % | 31.5 | % | ||||
Flex GP % |
28.3 | % | 28.7 | % | ||||
Selling, general & administrative expenses |
288,981 | 265,183 | ||||||
Depreciation & amortization |
12,694 | 12,611 | ||||||
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Income from operations |
44,628 | 34,620 | ||||||
Other expense, net |
1,317 | 1,296 | ||||||
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Income before income taxes |
43,311 | 33,324 | ||||||
Income tax expense |
16,155 | 12,690 | ||||||
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Net income |
$ | 27,156 | $ | 20,634 | ||||
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Earnings per share - diluted |
$ | 0.70 | $ | 0.51 | ||||
Adjusted EBITDA per share |
$ | 1.79 | $ | 1.31 | ||||
Shares outstanding - diluted |
38,831 | 40,503 | ||||||
Adjusted EBITDA |
$ | 69,314 | $ | 53,225 | ||||
Other information: |
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Capital expenditures |
$ | 7,662 | $ | 39,857 | ||||
Equity-based compensation expense, net |
$ | 7,534 | $ | 4,705 | ||||
Billing days |
252 | 251 |
Kforce Inc.
Key Statistics
(Unaudited)
Q4 2011 | Q3 2011 | Q4 2010 | ||||||||||
Total Firm | ||||||||||||
Flex revenue (000s) |
$ | 275,154 | $ | 277,123 | $ | 247,437 | ||||||
Revenue per billing day (000s) |
$ | 4,511 | $ | 4,330 | $ | 4,056 | ||||||
Sequential flex revenue change |
-0.7 | % | 5.8 | % | -0.6 | % | ||||||
Hours (000s) |
4,515 | 4,486 | 4,184 | |||||||||
Flex GP % |
28.6 | % | 28.9 | % | 28.8 | % | ||||||
Search revenue (000s) |
$ | 10,397 | $ | 11,868 | $ | 11,058 | ||||||
Placements |
769 | 884 | 811 | |||||||||
Average fee |
$ | 13,525 | $ | 13,424 | $ | 13,633 | ||||||
Billing days |
61 | 64 | 61 | |||||||||
Technology | ||||||||||||
Flex revenue (000s) |
$ | 156,543 | $ | 160,285 | $ | 138,467 | ||||||
Revenue per billing day (000s) |
$ | 2,566 | $ | 2,504 | $ | 2,270 | ||||||
Sequential flex revenue change |
-2.3 | % | 6.9 | % | 0.8 | % | ||||||
Hours (000s) |
2,420 | 2,520 | 2,233 | |||||||||
Flex GP % |
27.8 | % | 27.7 | % | 28.0 | % | ||||||
Search revenue (000s) |
$ | 4,279 | $ | 5,191 | $ | 4,402 | ||||||
Placements |
280 | 354 | 309 | |||||||||
Average fee |
$ | 15,318 | $ | 14,682 | $ | 14,257 | ||||||
Finance & Accounting | ||||||||||||
Flex revenue (000s) |
$ | 50,926 | $ | 48,046 | $ | 47,512 | ||||||
Revenue per billing day (000s) |
$ | 835 | $ | 751 | $ | 779 | ||||||
Sequential flex revenue change |
6.0 | % | 1.1 | % | 6.9 | % | ||||||
Hours (000s) |
1,517 | 1,406 | 1,447 | |||||||||
Flex GP % |
30.0 | % | 30.1 | % | 30.7 | % | ||||||
Search revenue (000s) |
$ | 5,746 | $ | 6,251 | $ | 5,937 | ||||||
Placements |
450 | 499 | 472 | |||||||||
Average fee |
$ | 12,759 | $ | 12,516 | $ | 12,570 | ||||||
Clinical Research | ||||||||||||
Flex revenue (000s) |
$ | 25,971 | $ | 27,703 | $ | 22,497 | ||||||
Revenue per billing day (000s) |
$ | 426 | $ | 433 | $ | 369 | ||||||
Sequential flex revenue change |
-6.3 | % | 7.6 | % | -14.6 | % | ||||||
Hours (000s) |
290 | 297 | 249 | |||||||||
Flex GP % |
25.5 | % | 26.2 | % | 24.2 | % | ||||||
Search revenue (000s) |
$ | 239 | $ | 264 | $ | 491 | ||||||
Placements |
10 | 10 | 12 | |||||||||
Average fee |
$ | 23,876 | $ | 26,393 | $ | 40,895 | ||||||
Health Information Management | ||||||||||||
Flex revenue (000s) |
$ | 18,445 | $ | 17,208 | $ | 15,648 | ||||||
Revenue per billing day (000s) |
$ | 302 | $ | 269 | $ | 256 | ||||||
Sequential flex revenue change |
7.2 | % | 3.7 | % | 6.6 | % | ||||||
Hours (000s) |
288 | 263 | 255 | |||||||||
Flex GP % |
34.6 | % | 36.6 | % | 32.7 | % | ||||||
Search revenue (000s) |
$ | 133 | $ | 162 | $ | 228 | ||||||
Placements |
29 | 21 | 18 | |||||||||
Average fee |
$ | 4,582 | $ | 7,678 | $ | 12,674 | ||||||
Government Solutions | ||||||||||||
Flex revenue (000s) |
$ | 23,269 | $ | 23,881 | $ | 23,313 | ||||||
Revenue per billing day (000s) |
$ | 382 | $ | 373 | $ | 382 | ||||||
Sequential flex revenue change |
-2.6 | % | 8.8 | % | -11.0 | % | ||||||
Flex GP % |
29.5 | % | 32.3 | % | 32.0 | % |
Kforce Inc.
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
Dec 31, 2011 |
Dec 31, 2010 |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ | 939 | $ | 1,055 | ||||
Trade receivables, net of allowances |
174,764 | 148,507 | ||||||
Income tax refund receivable |
250 | 5,675 | ||||||
Deferred tax asset, net |
4,694 | 4,950 | ||||||
Prepaid expenses and other current assets |
5,592 | 5,014 | ||||||
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Total current assets |
186,239 | 165,201 | ||||||
Fixed assets, net |
36,124 | 38,130 | ||||||
Other assets, net |
32,554 | 32,941 | ||||||
Deferred tax asset, net |
10,042 | 8,907 | ||||||
Intangible assets, net |
6,635 | 7,787 | ||||||
Goodwill |
138,078 | 138,078 | ||||||
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Total assets |
$ | 409,672 | $ | 391,044 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current Liabilities: |
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Accounts payable and other accrued liabilities |
$ | 26,314 | $ | 30,602 | ||||
Accrued payroll costs |
55,151 | 54,461 | ||||||
Current debt - credit facility |
| 10,825 | ||||||
Other current liabilities |
1,463 | 4,185 | ||||||
Income taxes payable |
236 | 250 | ||||||
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Total current liabilities |
83,164 | 100,323 | ||||||
Long-term debt - credit facility |
49,526 | | ||||||
Long-term debt - other |
1,609 | 2,103 | ||||||
Other long-term liabilities |
42,258 | 34,801 | ||||||
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Total liabilities |
176,557 | 137,227 | ||||||
Commitments and contingencies |
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Stockholders Equity: |
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Preferred stock |
| | ||||||
Common stock |
686 | 665 | ||||||
Additional paid-in capital |
372,212 | 355,869 | ||||||
Accumulated other comprehensive loss |
(4,050 | ) | (1,480 | ) | ||||
Retained earnings |
89,135 | 61,979 | ||||||
Treasury stock, at cost |
(224,868 | ) | (163,216 | ) | ||||
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Total stockholders equity |
233,115 | 253,817 | ||||||
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Total liabilities and stockholders equity |
$ | 409,672 | $ | 391,044 | ||||
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Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Quarterly Adjusted EBITDA
Three Months Ended | ||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | ||||||||||||||||||||||
2011 | 2011 | 2010 | ||||||||||||||||||||||
$ | Per share |
$ | Per share |
$ | Per share |
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Net income |
$ | 7,085 | $ | 0.20 | $ | 8,446 | $ | 0.22 | $ | 6,338 | $ | 0.16 | ||||||||||||
Depreciation & amortization |
3,075 | 0.09 | 3,072 | 0.08 | 3,262 | 0.08 | ||||||||||||||||||
Amortization of restricted stock & PARS |
3,230 | 0.09 | 3,088 | 0.08 | 1,499 | 0.03 | ||||||||||||||||||
Interest expense and other |
358 | 0.01 | 393 | 0.01 | 265 | 0.01 | ||||||||||||||||||
Income tax expense |
4,118 | 0.11 | 5,085 | 0.13 | 3,843 | 0.09 | ||||||||||||||||||
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Adjusted EBITDA |
$ | 17,866 | $ | 0.50 | $ | 20,084 | $ | 0.52 | $ | 15,207 | $ | 0.37 | ||||||||||||
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Weighted average shares outstanding - diluted |
35,709 | 38,228 | 40,848 |
Adjusted EBITDA, a non-GAAP financial measure, is defined as net income before non-cash impairment charges, interest, income taxes, depreciation and amortization and amortization of 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.
Quarterly Net Income before Equity-Based Compensation Expense
Three Months Ended | ||||||||||||||||||||||||
Dec. 31, | Sept. 30, | Dec. 31, | ||||||||||||||||||||||
2011 | 2011 | 2010 | ||||||||||||||||||||||
$ | Per share |
$ | Per share |
$ | Per share |
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Net income |
$ | 7,085 | $ | 0.20 | $ | 8,446 | $ | 0.22 | $ | 6,338 | $ | 0.16 | ||||||||||||
Equity-based compensation expense, net: |
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Alternative LTI expense |
28 | 0.00 | 5 | 0.00 | 722 | 0.02 | ||||||||||||||||||
Amortization of restricted stock & PARS |
3,230 | 0.09 | 3,088 | 0.08 | 1,499 | 0.03 | ||||||||||||||||||
Income tax benefit |
(1,197 | ) | (0.03 | ) | (1,162 | ) | (0.03 | ) | (838 | ) | (0.02 | ) | ||||||||||||
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Equity-based compensation expense, net |
2,061 | 0.06 | 1,931 | 0.05 | 1,383 | 0.03 | ||||||||||||||||||
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Net income before equity-based compensation expense |
$ | 9,146 | $ | 0.26 | $ | 10,377 | $ | 0.27 | $ | 7,721 | $ | 0.19 | ||||||||||||
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Weighted average shares outstanding - diluted |
35,709 | 38,228 | 40,848 |
Net Income before Equity-Based Compensation Expense, a non-GAAP financial measure, is defined as net income before compensation expense incurred in conjunction with share-based payment awards and alternative long-term incentive awards. Kforce measures the cost of employee services received in exchange for an equity based award based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually derived based on the terms of the award but may be the vesting period.
Adjusted EBITDA and Net Income before Equity-Based Compensation Expense are key measures used by management to evaluate its operations and to provide useful information to investors. These measures 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. These measurements are 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.
Kforce Inc.
Selected Financial Information and Reconciliations
(In Thousands, Except Per Share Amounts)
(Unaudited)
Year to Date Adjusted EBITDA
Twelve Months Ended | ||||||||||||||||
Dec. 31, | Dec. 31, | |||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Per share |
$ | Per share |
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Net Income |
$ | 27,156 | $ | 0.70 | $ | 20,634 | $ | 0.51 | ||||||||
Depreciation & amortization |
12,694 | 0.33 | 12,611 | 0.31 | ||||||||||||
Amortization of restricted stock & PARS |
11,976 | 0.31 | 6,036 | 0.15 | ||||||||||||
Interest expense and other |
1,333 | 0.03 | 1,254 | 0.03 | ||||||||||||
Income tax expense |
16,155 | 0.42 | 12,690 | 0.31 | ||||||||||||
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Adjusted EBITDA |
$ | 69,314 | $ | 1.79 | $ | 53,225 | $ | 1.31 | ||||||||
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Weighted average shares outstanding - diluted |
38,831 | 40,503 |
Adjusted EBITDA, a non-GAAP financial measure, is defined as net income before non-cash impairment charges, interest, income taxes, depreciation and amortization and amortization of 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.
Year to Date Net Income before Equity-Based Compensation Expense
Twelve Months Ended | ||||||||||||||||
Dec. 31, | Dec. 31, | |||||||||||||||
2011 | 2010 | |||||||||||||||
$ | Per share |
$ | Per share |
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Net income |
$ | 27,156 | $ | 0.70 | $ | 20,634 | $ | 0.51 | ||||||||
Equity-based compensation expense, net: |
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Alternative LTI expense |
40 | 0.00 | 1,563 | 0.04 | ||||||||||||
Amortization of restricted stock & PARS |
11,976 | 0.31 | 6,036 | 0.15 | ||||||||||||
Income tax benefit |
(4,482 | ) | (0.12 | ) | (2,894 | ) | (0.07 | ) | ||||||||
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Equity-based compensation expense, net |
7,534 | 0.19 | 4,705 | 0.12 | ||||||||||||
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Net income before equity-based compensation expense |
$ | 34,690 | $ | 0.89 | $ | 25,339 | $ | 0.63 | ||||||||
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Weighted average shares outstanding - diluted |
38,831 | 40,503 |
Net Income before Equity-Based Compensation Expense, a non-GAAP financial measure, is defined as net income before compensation expense incurred in conjunction with share-based payment awards and alternative long-term incentive awards. Kforce measures the cost of employee services received in exchange for an equity based award based on the grant-date fair value of the award (with limited exceptions). That cost is recognized over the period in which the employee is required to provide service in exchange for the award, which is usually derived based on the terms of the award but may be the vesting period.
Adjusted EBITDA and Net Income before Equity-Based Compensation Expense are key measures used by management to evaluate its operations and to provide useful information to investors. These measures 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. These measurements are 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.