Kforce (KFRC) Completes $50M Sale of Kforce Clinical Research; Issues FY12, FY13 Update

Kforce Inc. (Nasdaq: KFRC), announced the completion of the sale of all of the issued and outstanding shares of capital stock of Kforce Clinical Research, Inc. ("KCR") for an aggregate purchase price of $50 million in cash. The transaction will result in a pre-tax book gain of approximately $36 million. In addition, the Firm announced a number of tax planning steps associated with the approximate taxable gain of $41 million, which will allow the Firm to defer all the tax liability related to the gain.

In discussing 2012 trends and expectations, Mr. Dunkel said, "We are very pleased with the Firms positioning and our ability to capture market share, and remain excited about our prospects. Continuing strong demand in our Technology, Finance & Accounting and HIM businesses, which continue to grow at annual rates in excess of 10% should allow us to replace the lost revenue from KCR over the next twelve months. Our KGS business has also performed very well in Q1, with seven new awards that will provide $30 million in additional revenue annually once they are staffed. Early indications of first quarter revenue and gross margin results for all of our remaining businesses are positive and reflect trends we have been experiencing for the last two quarters."

Mr. Liberatore stated, "Our business is performing well and we are prepared to make adjustments as necessary as we move forward to grow earnings as revenues grow. We believe 2012 analyst consensus estimates for revenues, exclusive of KCR, and earnings per share remain reasonable."

Mr. Liberatore continued, "As we look beyond this year and into 2013, we expect to create additional operating leverage and believe analyst consensus EPS estimates in 2013 may be conservative despite the reduction in revenues associated with the sale. This outlook assumes a similar business operating environment and mix as currently exists and does not consider any benefit that we might derive from the redeployment of capital for stock repurchases or acquisitions or any acceleration in gross margin expansion."

Additional information related to the Firm's 2012 continuing operations for quarters 2-4 is as follows:

• Gross margin of approximately 31.5% to 32.5%
  
  
• SG&A of approximately 25.0% to 26.0%
  
  
• Tax rate of approximately 40.0%
  
  
• Fully diluted shares outstanding of approximately 36.9 million

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