Kforce (KFRC) Tops Q2 EPS by 16c; Guides Higher

Kforce (NASDAQ: KFRC) reported Q2 EPS of $0.47, $0.16 better than the analyst estimate of $0.31. Revenue for the quarter came in at $343 million versus the consensus estimate of $313.8 million.

David L. Dunkel, Chairman and Chief Executive Officer, commented, “We believe the strength in our second quarter results speaks to the resiliency of our business to perform during an adverse economic environment, particularly in our technology business, which was down 3% on a year-over-year basis. Our strategic decision to focus in technology, which is now roughly 80% of revenue, was due to our expectations regarding the longer-term secular drivers of demand in this space. Our belief for years has been that technology-focused businesses, when combined with a client portfolio comprised of world-class companies, should perform relatively well in all economic climates. We believe our second quarter results and early third quarter trends are highly supportive of this secular theory. Further, in our opinion, this pandemic has only further strengthened the secular drivers of demand as companies now understand more fully the business imperative to accelerate their digitalization and technology transformation efforts. We may well be looking at digitalization as the next industrial revolution.”

Joseph J. Liberatore, President, said, “I could not be prouder of how our people have adapted and executed over the last four months, while working almost 100% remotely. The strength and resiliency of our revenue stream has been encouraging and the business we secured to support several critical government-sponsored initiatives has provided an important level of support to our business as we navigate this pandemic. We have held on to our most tenured and productive associates and are looking at areas of technology investment that we believe will bring greater effectiveness to what could be a more flexible future work environment.”

David M. Kelly, Chief Financial Officer, said, “During the second quarter, we generated $36.0 million of operating cash flows while also growing our business and ended the quarter with net debt of approximately $48 million, or roughly 0.5 trailing twelve months Adjusted EBITDA. We are performing well and are in an excellent financial position, which we believe gives us the financial flexibility to continue investing in our business and deploying our capital in other areas.

“We are also pleased to announce that our Board of Directors approved a third quarter cash dividend of $0.20 per share, which will be payable on September 25, 2020 to shareholders of record as of the close of business on September 11, 2020.”

GUIDANCE:

Kforce sees Q3 2020 EPS of $0.72-$0.80, versus the consensus of $0.40. Kforce sees Q3 2020 revenue of $352-362 million, versus the consensus of $316.48 million.

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

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