Kforce Inc. (KFRC, Financial) filed Quarterly Report for the period ended 2012-03-31.
Kforce Inc has a market cap of $562.2 million; its shares were traded at around $12.97 with a P/E ratio of 20.8 and P/S ratio of 0.5.
Flex gross profit margins decreased 10 basis points to 27.1% compared to 27.2% for the three months ended March 31, 2012 and 2011, respectively. Kforce experienced increases in Flex gross profit margins for the FA and GS segments of 180 and 130 basis points, respectively, on a year-over-year basis. The decreases in both Tech and HIM Flex gross profit margins of 90 and 10 basis points, respectively, were primarily attributable to the recording of a contingent liability of $1.9 million ($1.4 million impact to gross profit; $0.5 million impact to SG&A) related to sales, income and gross receipts tax audits in the first quarter of 2012 and an increase in payroll taxes, particularly unemployment taxes. SG&A expenses as a percentage of net service revenues were 40.3% and 26.9% for the three months ended March 31, 2012 and 2011, respectively. The increase in SG&A expenses as a percentage of net service revenues was primarily the result of the acceleration of substantially all of the outstanding and unvested PARS, RS and ALTI awards on March 31, 2012, which resulted in the recognition of incremental compensation expense of $31.3 million, including payroll taxes, during the three months ended March 31, 2012.
Our FA segment experienced an increase in Flex revenues of 14.2% during the three months ended March 31, 2012 compared to 2011. According to a Staffing Industry Analysts report, the overall finance and accounting segment is expected to experience a deceleration of growth to 8% in 2012 from 10% in 2011. Consistent with Tech, we believe that the success of our FA segment has been enabled by our NRC, which has been particularly effective in meeting the demand of our Strategic Accounts. We expect to see continued growth in 2012 within our FA segment.
The increase in Search gross profit for the three months ended March 31, 2012, compared to the same period in 2011, was $1.2 million, composed of a $0.9 million increase in volume and a $0.3 million increase in rate.
The increase in Flex gross profit for the three months ended March 31, 2012, compared to the same period in 2011, was $8.2 million, composed of an $8.4 million increase in volume and a $0.2 million decrease in rate.
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Kforce Inc has a market cap of $562.2 million; its shares were traded at around $12.97 with a P/E ratio of 20.8 and P/S ratio of 0.5.
Highlight of Business Operations:
Net service revenues for the three months ended March 31, 2012 and 2011 were $268.4 million and $236.4 million, respectively, which represents an increase of 13.5%. The increase was primarily due to our Tech (which represents approximately 62% of our total net service revenues) and FA segments (which represents approximately 23% of our net service revenues), which had year-over-year increases in net service revenues of 15.7% and 11.9%, respectively. Net service revenues for HIM increased 21.6% while our GS segment experienced a 1.6% decline in net service revenues during the three months ended March 31, 2012 compared to the three months ended March 31, 2011. Search revenues increased 12.3% on a year-over-year basis.Flex gross profit margins decreased 10 basis points to 27.1% compared to 27.2% for the three months ended March 31, 2012 and 2011, respectively. Kforce experienced increases in Flex gross profit margins for the FA and GS segments of 180 and 130 basis points, respectively, on a year-over-year basis. The decreases in both Tech and HIM Flex gross profit margins of 90 and 10 basis points, respectively, were primarily attributable to the recording of a contingent liability of $1.9 million ($1.4 million impact to gross profit; $0.5 million impact to SG&A) related to sales, income and gross receipts tax audits in the first quarter of 2012 and an increase in payroll taxes, particularly unemployment taxes. SG&A expenses as a percentage of net service revenues were 40.3% and 26.9% for the three months ended March 31, 2012 and 2011, respectively. The increase in SG&A expenses as a percentage of net service revenues was primarily the result of the acceleration of substantially all of the outstanding and unvested PARS, RS and ALTI awards on March 31, 2012, which resulted in the recognition of incremental compensation expense of $31.3 million, including payroll taxes, during the three months ended March 31, 2012.
Our FA segment experienced an increase in Flex revenues of 14.2% during the three months ended March 31, 2012 compared to 2011. According to a Staffing Industry Analysts report, the overall finance and accounting segment is expected to experience a deceleration of growth to 8% in 2012 from 10% in 2011. Consistent with Tech, we believe that the success of our FA segment has been enabled by our NRC, which has been particularly effective in meeting the demand of our Strategic Accounts. We expect to see continued growth in 2012 within our FA segment.
The increase in Search gross profit for the three months ended March 31, 2012, compared to the same period in 2011, was $1.2 million, composed of a $0.9 million increase in volume and a $0.3 million increase in rate.
The increase in Flex gross profit for the three months ended March 31, 2012, compared to the same period in 2011, was $8.2 million, composed of an $8.4 million increase in volume and a $0.2 million decrease in rate.
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