KFRC Kforce Inc.

Risks

• The U.S. professional staffing industry in which we operate is significantly affected by fluctuations in general economic and employment conditions.
• Kforce may not be able to recruit and retain qualified consultants and candidates.
• Kforce faces significant employment-related legal risk.
• Our failure to keep pace with technological change in our industry could potentially place us at a competitive disadvantage.
• Declines in business or a loss of our major client accounts could have a material adverse effect on our revenues and financial results.
• Kforce may be adversely affected by government regulation of the staffing business and of the workplace.
• Kforce may be adversely affected by immigration restrictions and reform.
• Reclassification of our independent contractors by tax or regulatory authorities could have a material adverse effect on our business model and/or could require us to pay significant retroactive wages, taxes and penalties.
• Kforce may be exposed to unforeseeable negative acts by our personnel that could have a material adverse effect on our business.
• Significant increases in wages or payroll-related costs could have a material adverse effect on our financial results.
• Kforce’s success depends upon retaining the services of its management team and key operating employees.
• Kforce depends on the proper functioning of its information systems.
• New business initiatives and strategic changes may divert management’s attention from normal business operations, which could have an adverse effect on our performance.
• Kforce’s current market share may decrease as a result of limited barriers to entry for new competitors and discontinuation of clients outsourcing their staffing needs.
• Adverse results in tax audits or interpretations of tax laws could have an adverse impact on our business.
• Impairment charges relating to our goodwill, long-lived assets and equity method investment could have a material adverse effect on our operating results.
• Delays in collecting our trade accounts receivable could have an adverse effect on our business.
• Kforce maintains debt that exposes us to interest rate risk and contains restrictive covenants that could trigger prepayment of obligations or additional costs.
• Due to inherent limitations, there can be no assurance that our system of disclosure and internal controls and procedures will be successful in preventing all errors and fraud, or in making all material information known in a timely manner to management.
• Kforce’s stock price may be volatile.
• Provisions in Kforce’s articles and bylaws and Florida law may have certain anti-takeover effects.