TAMPA, Fla., Aug. 01, 2018 (GLOBE NEWSWIRE) -- Kforce Inc. (Nasdaq: KFRC), a provider of professional staffing services and solutions, today announced results for its second quarter of 2018. Revenues for the quarter ended June 30, 2018 were $358.6 million compared to $340.3 million for the quarter ended June 30, 2017, an increase of 5.4%. Net income for the quarter ended June 30, 2018 was $16.3 million, or $0.65 per share, as compared to $11.1 million, or $0.44 per share, for the quarter ended June 30, 2017.
David L. Dunkel, Chairman and CEO, commented, “We are very pleased with our second quarter results as our year-over-year growth rate in our largest business, Tech Flex, meaningfully accelerated to 9.8% from 6.7% in the first quarter of 2018 while also improving our Tech Flex gross profit margin by 30 basis points year-over-year. We reached the first milestone in our continued objective of providing greater levels of profitability as our business grows with operating margins in the second quarter of 6.4%. We are firmly on the path of reaching our next milestone of achieving an operating margin of at least 7.5% when quarterly revenues reach $400 million. As we head into the second half of 2018, we expect continued strength in our Tech Flex business, as companies continue to invest in technology to more effectively and efficiently meet the needs of their customers and improve their profitability, and are also focused on positioning our FA Flex business for future growth. I want to thank all of our clients, consultants and core employees for making our mutual success possible."
Joseph J. Liberatore, President, said, “We believe that the broad-based growth we are experiencing in Tech Flex is a result of the actions taken and investments made over the last couple of years to better segment our client portfolio, optimize the alignment of our revenue-generating associates within our client portfolios, and improve the productivity of our associates. The productivity of our revenue-generating associates has improved approximately 14% on a year-over-year basis. We expect to further accelerate Tech Flex revenue growth in the third quarter of 2018, while also continuing to improve productivity."
Mr. Liberatore noted additional operational results for the second quarter include:
- Flex revenues of $342.1 million in Q2 2018 increased 5.6% from $324.0 million in Q2 2017.
- Quarterly year-over-year growth in Flex revenues for Tech and GS was 9.8% and 18.2%, respectively, while FA experienced a decrease of 9.4%.
David M. Kelly, Chief Financial Officer, said, “Our Flex gross profit margins in Tech improved 30 basis points on a year-over-year basis in the second quarter, which we believe is reflective of strong demand and our focus around pricing discipline as well as the mix of growth that we are experiencing within our client portfolio."
Mr. Kelly continued, "Operating cash flows were $28 million in the quarter and our profitability continues to improve as revenues grow. We are pleased to announce that our Board of Directors has approved a 50% increase in our quarterly dividend, which better aligns to our objective of efficiently and consistently returning capital to shareholders. The third quarter cash dividend of $0.18 per share, up from $0.12 per share in the second quarter, will be payable on September 21, 2018 to shareholders of record as of the close of business on September 7, 2018."
Looking forward to the third quarter of 2018, there will be 63 billing days, which is the same as the third quarter of 2017, as compared to 64 billing days in second quarter of 2018. The revenue per billing day in the second quarter of 2018 was $5.6 million. Current estimates for the third quarter of 2018 are:
- Revenue of $359 million to $364 million
- Earnings per share of $0.65 to $0.67
- Gross profit margin of 29.7% to 29.9%
- Flex gross profit margin of 26.9% to 27.1%
- SG&A expense as a percent of revenue of 22.7% to 22.9%
- Operating margin of 6.4% to 6.6%
- Effective tax rate of 25.7%
On Wednesday, August 1, 2018, Kforce will host a conference call to discuss these results. The call will begin at 8:30 a.m. Eastern Time. The prepared remarks for this call are available on the Investor Relations page of the Kforce Inc. website (http://investor.kforce.com/) under Events & Presentations.
The dial-in number is (877) 344-3890. The conference passcode is Kforce. The replay of the call will be available from 11:30 a.m. Eastern Time, Wednesday, August 1, 2018 through August 8, 2018 by dialing (855) 859-2056, passcode 1596885.
This call is being webcast by Shareholder.com and can be accessed on the Investor Relations page of the Kforce Inc. website (http://investor.kforce.com/). The webcast replay will be available until August 8, 2018.
About Kforce
Kforce (Nasdaq: KFRC) is a professional staffing services and solutions firm that specializes in the areas of Technology and Finance & Accounting. Each year, our network of over 50 offices and two national recruiting centers provide opportunities for 36,000 highly skilled professionals who work with over 4,000 clients, including 70% of the Fortune 100. At Kforce, our promise is to deliver great results through strategic partnership and knowledge sharing. For more information, please visit our Web site at http://www.kforce.com.
