Kforce (KFRC) Reports In-Line Q1 EPS; Guides Q2 Above Views

Kforce (NASDAQ: KFRC) reported Q1 EPS of $0.62, in-line with the analyst estimate of $0.62. Revenue for the quarter came in at $363.2 million versus the consensus estimate of $359.24 million.

David L. Dunkel, Chairman and Chief Executive Officer, said, “I am incredibly proud of the continued outstanding execution by the entire Kforce team in delivering first quarter results that were at the high end of our expectations and improved as the quarter progressed. As I reflect on our strategic decision to focus our business on domestic technology staffing and solutions, it is important to remember that prior to the Great Recession, that market was roughly $20 billion in size and was the third largest staffing market segment behind industrial and clerical staffing. The most recent update from Staffing Industry Analysts (SIA) noted that the domestic technology staffing market was the largest market segment in 2020, with spend of nearly $31 billion. Over the same period, our technology business grew in excess of two times the market rate. Additionally, the technology professional services market, where we see significant opportunity, exceeds $100 billion. The momentum we have built and increasing expectations of demand for technology resources have significantly raised our expectations for the second quarter. Given the strength in our balance sheet and our belief in our future growth prospects, we expect to remain active in repurchasing our stock at current levels.”

Joseph J. Liberatore, President, said, “The momentum across the enterprise accelerated as the quarter progressed and that momentum has continued into April. I am extremely pleased that we delivered the best sequential growth in a first quarter that we have on record and perhaps the best March performance we have ever experienced at Kforce. Given the momentum we have carried into the second quarter and continue to build upon, we expect that revenue growth in our Technology business could meaningfully accelerate to the mid to high teens on a year-over-year billing day basis. This significant above-market growth is compounding our success, as Technology revenues significantly outperformed the market in the depths of the pandemic, only declining 3% in the second quarter of 2020 and 1% for the full year 2020. We are clearly continuing to take market share. I greatly appreciate the trust our clients, consultants and candidates have placed in Kforce and I couldn’t be prouder of our teams’ attitude and efforts executing in a fully remote capacity.”

David M. Kelly, Chief Financial Officer, said, “During the first quarter, we generated approximately $22 million of operating cash flows in a period where revenues continued to expand, and we ended the quarter with net cash of approximately $1.3 million. We expect to continue generating positive operating cash flows in the second quarter and, upon close, will generate additional cash from the $24 million sale of our corporate headquarters. We are performing exceptionally well and are in a strong financial position, which we believe gives us optimal financial flexibility to continue investing in our business and returning capital to our shareholders. We are pleased to announce that our Board of Directors approved a second quarter cash dividend of $0.23 per share, which will be payable on June 25, 2021, to shareholders of record as of the close of business on June 11, 2021.”

GUIDANCE:

Kforce sees Q2 2021 EPS of $0.87-$0.95, versus the consensus of $0.71. Kforce sees Q2 2021 revenue of $387-397 million, versus the consensus of $349.11 million.

For earnings history and earnings-related data on Kforce (KFRC) click here.

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