Kforce Inc. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Kforce Inc. filed its Q1 2024 10-Q report, detailing financial performance and operations.</b>

AI Summary

KFORCE INC (KFRC) filed a Quarterly Report (10-Q) with the SEC on May 1, 2024. Kforce Inc. filed its 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of 2024. The company's fiscal year ends on December 31. Kforce Inc. is incorporated in Florida. The company's SIC code is 7363 for Help Supply Services.

Why It Matters

For investors and stakeholders tracking KFORCE INC, this filing contains several important signals. This 10-Q filing provides investors with an updated view of Kforce's financial health and operational performance for the first quarter of 2024. Understanding the details within this report is crucial for assessing the company's current standing and future prospects in the competitive staffing and talent solutions market.

Risk Assessment

Risk Level: medium — KFORCE INC shows moderate risk based on this filing. The filing is a standard quarterly report, indicating ongoing operational and financial reporting requirements. Specific risks are not detailed in this header information.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the full 10-Q filing to understand Kforce's performance drivers and potential risks.

Key Numbers

• 2024-03-31 — Report Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-01 — Filing Date (FILED AS OF DATE)
• 2024-01-01 — Quarter Start Date (2024-01-01)
• 2023-03-31 — Prior Year Q1 End Date (2023-01-01)

Key Players & Entities

• KFORCE INC (company) — FILER
• KFORCE INC (company) — COMPANY CONFORMED NAME
• ROMAC INTERNATIONAL INC (company) — FORMER COMPANY
• FL (location) — STATE OF INCORPORATION
• TAMPA (location) — CITY
• 7363 (other) — STANDARD INDUSTRIAL CLASSIFICATION

FAQ

Industry Context

Kforce Inc. operates in the professional staffing and talent solutions industry, providing services to clients across various sectors.

Regulatory Implications

The filing is made under the Securities Exchange Act of 1934, requiring public companies to submit regular financial disclosures.

What Investors Should Do

1. Analyze Kforce's revenue breakdown by segment (Technology, Finance & Accounting) for Q1 2024.
2. Compare key financial metrics (e.g., revenue, net income, EPS) with the prior year's Q1.
3. Review any disclosed risk factors or management commentary for insights into operational challenges or opportunities.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-01: Filing Date — Date Kforce Inc. submitted the 10-Q to the SEC.

Year-Over-Year Comparison

This is the initial 10-Q filing for the fiscal year 2024, following the 2023 annual report.

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 per share KFRC NASDAQ Indicate by che
• $351.9 million — ended March 31, 2024 decreased 13.3% to $351.9 million from $406.0 million in the comparable p
• $406.0 million — decreased 13.3% to $351.9 million from $406.0 million in the comparable period in 2023. Reven
• $344.7 million — ended March 31, 2024 decreased 12.8% to $344.7 million from $395.5 million in the comparable p
• $395.5 million — decreased 12.8% to $344.7 million from $395.5 million in the comparable period in 2023. Flex
• $7.2 million — ended March 31, 2024 decreased 31.5% to $7.2 million from $10.5 million in the comparable pe
• $10.5 million — 24 decreased 31.5% to $7.2 million from $10.5 million in the comparable period in 2023. Gros
• $11.0 m — ended March 31, 2024 decreased 32.2% to $11.0 million, or $0.58 per share, from $16.2 m
• $0.58 — 24 decreased 32.2% to $11.0 million, or $0.58 per share, from $16.2 million, or $0.82
• $16.2 m — $11.0 million, or $0.58 per share, from $16.2 million, or $0.82 per share, for the thre
• $0.82 — $0.58 per share, from $16.2 million, or $0.82 per share, for the three months ended M
• $9.1 million — nded March 31, 2023. The Firm returned $9.1 million of capital to our shareholders in the f
• $2.0 million — orm of open market repurchases totaling $2.0 million and quarterly dividends totaling $7.1 m
• $7.1 million — illion and quarterly dividends totaling $7.1 million during the three months ended March 31,
• $13.2 million — sh provided by operating activities was $13.2 million during the three months ended March 31,

Filing Documents

• kfrc-20240331.htm (10-Q) — 678KB
• exhibit311q12024.htm (EX-31.1) — 8KB
• exhibit312q12024.htm (EX-31.2) — 8KB
• exhibit321q12024.htm (EX-32.1) — 4KB
• exhibit322q12024.htm (EX-32.2) — 4KB
• kfrc-20240331_g1.jpg (GRAPHIC) — 30KB
• 0000930420-24-000080.txt (&nbsp;) — 3530KB
• kfrc-20240331.xsd (EX-101.SCH) — 26KB
• kfrc-20240331_cal.xml (EX-101.CAL) — 48KB
• kfrc-20240331_def.xml (EX-101.DEF) — 65KB
• kfrc-20240331_lab.xml (EX-101.LAB) — 374KB
• kfrc-20240331_pre.xml (EX-101.PRE) — 245KB
• kfrc-20240331_htm.xml (XML) — 288KB

Financial Statements

Item 1. Financial Statements. 3

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 12

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk. 20

Controls and Procedures

Item 4. Controls and Procedures. 20 PART II OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings. 21

Risk Factors

Item 1A. Risk Factors. 21

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds. 21

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities. 21

Mine Safety Disclosures

Item 4. Mine Safety Disclosures. 21

Other Information

Item 5. Other Information. 21

Exhibits

Item 6. Exhibits. 22

SIGNATURES

SIGNATURES 23 CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS References in this document to the "Registrant," "Kforce," the "Company," "we," the "Firm," "management," "our" or "us" refer to Kforce Inc. and its subsidiaries, except where the context otherwise requires or indicates. This report, particularly Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A"), and Part II, Item 1A. Risk Factors, and the documents we incorporate into this report contain certain statements that are, or may be deemed to be, forward-looking statements 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 (the "Exchange Act"), and are made in reliance upon the protections provided by such acts for forward-looking statements. Such statements may include, but may not be limited to: expectations of financial or operational performance, including the possibility and potential effects of an economic recession on the Firm's business; the impacts of SG&A deleveraging in connection with expected demand for the Firm's services; our expectations regarding the future changes in revenue of each segment of our business; the impact of the economic environment on our business; our ability to control discretionary spending and decrease operating costs; the Firm's commitment and ability to return significant capital to its shareholders; our ability to meet capital expenditure and working capital requirements of our operations; the intent and ability to declare and pay quarterly dividends; growth rates in temporary staffing; a constraint in the supply of consultants and candidates, or the Firm's ability to attract such individuals; changes in client demand for our services and our ability to adapt to such changes; the ability of the Firm to maintain and attract clients in the face of changing economic or competitive conditions; our abili

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS. KFORCE INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS ) Three Months Ended March 31, 2024 2023 Revenue $ 351,889 $ 405,997 Direct costs 256,639 292,021 Gross profit 95,250 113,976 Selling, general and administrative expenses 78,190 89,339 Depreciation and amortization 1,333 1,234 Income from operations 15,727 23,403 Other expense, net 656 1,045 Income from operations, before income taxes 15,071 22,358 Income tax expense 4,084 6,148 Net income $ 10,987 $ 16,210 Earnings per share – basic $ 0.59 $ 0.83 Earnings per share – diluted $ 0.58 $ 0.82 Weighted average shares outstanding – basic 18,726 19,455 Weighted average shares outstanding – diluted 18,932 19,667 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Contents KFORCE INC. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) March 31, 2024 December 31, 2023 ASSETS Current assets: Cash and cash equivalents $ 106 $ 119 Trade receivables, net of allowances of $ 1,670 and $ 1,643 , respectively 236,923 233,428 Prepaid expenses and other current assets 9,146 10,912 Total current assets 246,175 244,459 Fixed assets, net 8,936 9,418 Other assets, net 82,800 75,924 Deferred tax assets, net 3,382 3,138 Goodwill 25,040 25,040 Total assets $ 366,333 $ 357,979 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and other accrued liabilities $ 59,415 $ 64,795 Accrued payroll costs 39,746 33,968 Current portion of operating lease liabilities 3,423 3,589 Income taxes payable 3,520 623 Total current liabilities 106,104 102,975 Long-term debt – credit facility 40,800 41,600 Other long-term liabilities 54,924 54,324 Total liabilities 201,828 198,899 Commitments and contingencies (Note J) Stockholders' equity: Preferred stoc

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. EXECUTIVE SUMMARY The following is an executive summary of what Kforce believes are highlights as of and for the three months ended March 31, 2024, which should be considered in the context of the additional discussions herein and in conjunction with the unaudited condensed consolidated financial statements and notes thereto. Revenue for the three months ended March 31, 2024 decreased 13.3% to $351.9 million from $406.0 million in the comparable period in 2023. Revenue decreased 11.7% and 27.6% for Technology and FA, respectively, primarily driven by the ongoing macroeconomic uncertainty. Flex revenue for the three months ended March 31, 2024 decreased 12.8% to $344.7 million from $395.5 million in the comparable period in 2023. Flex revenue decreased 11.4% for Technology and 27.2% for FA. Direct Hire revenue for the three months ended March 31, 2024 decreased 31.5% to $7.2 million from $10.5 million in the comparable period in 2023. Gross profit margin for the three months ended March 31, 2024 decreased 100 basis points to 27.1% from 28.1% in the comparable period in 2023, primarily due to a decline in the mix of Direct Hire revenue and Technology Flex gross profit margins. Flex gross profit margin for the three months ended March 31, 2024 decreased 60 basis points to 25.6% from 26.2% in the comparable period in 2023, primarily due to a tighter pricing environment. SG&A expenses as a percentage of revenue for the three months ended March 31, 2024, increased to 22.2% from 22.0% in the comparable period in 2023. Net income for the three months ended March 31, 2024 decreased 32.2% to $11.0 million, or $0.58 per share, from $16.2 million, or $0.82 per share, for the three months ended March 31, 2023. The Firm returned $9.1 million of capital to our shareholders in the form of open market repurchases totaling $2.0 million and quarterly dividends totaling $7.1 millio

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