Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2019 | Jul. 29, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 000-26058 | |
Entity Registrant Name | Kforce Inc | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-3264661 | |
Entity Address, Address Line One | 1001 East Palm Avenue | |
Entity Address, City or Town | Tampa | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33605 | |
City Area Code | 813 | |
Local Phone Number | 552-5000 | |
Title of 12(b) Security | Common Stock, $0.01 per share | |
Trading Symbol | KFRC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,255,086 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000930420 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 338,861 | $ 329,535 | $ 665,599 | $ 646,976 |
Direct costs | 237,835 | 229,315 | 471,397 | 454,247 |
Gross profit | 101,026 | 100,220 | 194,202 | 192,729 |
Selling, general and administrative expenses | 78,017 | 76,901 | 157,830 | 155,698 |
Depreciation and amortization | 1,542 | 1,692 | 3,192 | 3,443 |
Income from operations | 21,467 | 21,627 | 33,180 | 33,588 |
Other expense, net | 403 | 1,258 | 1,326 | 2,602 |
Income from continuing operations, before income taxes | 21,064 | 20,369 | 31,854 | 30,986 |
Income tax expense | 4,988 | 5,196 | 7,804 | 7,856 |
Income from continuing operations | 16,076 | 15,173 | 24,050 | 23,130 |
Income from discontinued operations, net of tax | 58,783 | 1,099 | 77,664 | 2,317 |
Net income | 74,859 | 16,272 | 101,714 | 25,447 |
Other comprehensive (loss) income: | ||||
Change in fair value of interest rate swap, net of tax | (478) | (758) | ||
Change in fair value of interest swap, net of tax | 180 | 697 | ||
Comprehensive income | $ 74,381 | $ 16,452 | $ 100,956 | $ 26,144 |
Earnings per share – basic: | ||||
Continuing operations (in dollars per share) | $ 0.67 | $ 0.61 | $ 0.99 | $ 0.94 |
Discontinued operations (in dollars per share) | 2.46 | 0.05 | 3.21 | 0.09 |
Earnings per share - basic (in dollars per share) | 3.13 | 0.66 | 4.20 | 1.03 |
Earnings per share – diluted: | ||||
Continuing operations (in dollars per share) | 0.66 | 0.60 | 0.97 | 0.92 |
Discontinued operations (in dollars per share) | 2.40 | 0.05 | 3.14 | 0.09 |
Earnings per share – diluted (in dollars per share) | $ 3.06 | $ 0.65 | $ 4.11 | $ 1.01 |
Weighted average shares outstanding – basic (in shares) | 23,901 | 24,705 | 24,207 | 24,744 |
Weighted average shares outstanding – diluted (in shares) | 24,458 | 25,178 | 24,745 | 25,142 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 65,047 | $ 112 |
Trade receivables, net of allowances of $3,039 and $2,800, respectively | 225,810 | 210,559 |
Income tax refund receivable | 218 | 319 |
Prepaid expenses and other current assets | 8,692 | 7,699 |
Current assets held for sale | 0 | 29,773 |
Total current assets | 299,767 | 248,462 |
Fixed assets, net | 29,095 | 34,322 |
Other assets, net | 66,045 | 36,664 |
Deferred tax assets, net | 6,238 | 7,147 |
Goodwill | 25,040 | 25,040 |
Noncurrent assets held for sale | 0 | 28,273 |
Total assets | 426,185 | 379,908 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 35,855 | 32,542 |
Accrued payroll costs | 41,008 | 39,384 |
Current portion of operating lease liabilities | 5,931 | |
Other current liabilities | 1,405 | 1,616 |
Income taxes payable | 5,611 | 4,553 |
Current liabilities held for sale | 0 | 12,263 |
Total current liabilities | 89,810 | 90,358 |
Long-term debt – credit facility | 65,000 | 71,800 |
Long-term debt – other | 909 | 1,359 |
Other long-term liabilities | 55,610 | 43,509 |
Noncurrent liabilities held for sale | 0 | 4,551 |
Total liabilities | 211,329 | 211,577 |
Commitments and contingencies (Note E) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par; 15,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par; 250,000 share authorized, 71,865 and 71,856 issued and outstanding, respectively | 719 | 719 |
Additional paid-in capital | 454,071 | 447,337 |
Accumulated other comprehensive income | 706 | 1,296 |
Retained earnings | 329,760 | 237,308 |
Treasury stock, at cost; 47,293 and 45,822 shares, respectively | (570,400) | (518,329) |
Total stockholders’ equity | 214,856 | 168,331 |
Total liabilities and stockholders’ equity | $ 426,185 | $ 379,908 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 3,039 | $ 2,800 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 71,865,000 | 71,856,000 |
Common stock, shares outstanding (in shares) | 71,865,000 | 71,856,000 |
Treasury stock, shares (in shares) | 47,293,000 | 45,822,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Shares at beginning of period (in shares) at Dec. 31, 2017 | 71,494 | 45,167 | ||||
Balance at beginning of period at Dec. 31, 2017 | $ 134,277 | $ 715 | $ 437,394 | $ 100 | $ 195,143 | $ (499,075) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 9,175 | 9,175 | ||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 63 | |||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | $ 1 | 166 | (167) | ||
Exercise of stock options (in shares) | 5 | 1 | ||||
Exercise of stock options | 0 | 46 | $ (46) | |||
Stock-based compensation expense | 2,260 | 2,260 | ||||
Employee stock purchase plan (in shares) | (6) | |||||
Employee stock purchase plan | 132 | 71 | $ 61 | |||
Dividends | (2,973) | (2,973) | ||||
Change in fair value of interest swap, net of tax | 517 | 517 | ||||
Repurchases of common stock (in shares) | 319 | |||||
Repurchases of common stock | (8,715) | $ (8,715) | ||||
Shares at end of period (in shares) at Mar. 31, 2018 | 71,562 | 45,481 | ||||
Balance at end of period at Mar. 31, 2018 | 134,494 | $ 716 | 439,937 | 617 | 200,999 | $ (507,775) |
Shares at beginning of period (in shares) at Dec. 31, 2017 | 71,494 | 45,167 | ||||
Balance at beginning of period at Dec. 31, 2017 | 134,277 | $ 715 | 437,394 | 100 | 195,143 | $ (499,075) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 25,447 | |||||
Employee stock purchase plan | 261 | |||||
Change in fair value of interest swap, net of tax | 697 | |||||
Shares at end of period (in shares) at Jun. 30, 2018 | 71,596 | 45,479 | ||||
Balance at end of period at Jun. 30, 2018 | 150,306 | $ 716 | 442,460 | 797 | 214,143 | $ (507,810) |
Shares at beginning of period (in shares) at Mar. 31, 2018 | 71,562 | 45,481 | ||||
Balance at beginning of period at Mar. 31, 2018 | 134,494 | $ 716 | 439,937 | 617 | 200,999 | $ (507,775) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 16,272 | 16,272 | ||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 34 | |||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 158 | (158) | |||
Stock-based compensation expense | 2,292 | 2,292 | ||||
Employee stock purchase plan (in shares) | (5) | |||||
Employee stock purchase plan | 129 | 73 | $ 56 | |||
Dividends | (2,970) | (2,970) | ||||
Change in fair value of interest swap, net of tax | 180 | 180 | ||||
Repurchases of common stock (in shares) | 3 | |||||
Repurchases of common stock | (91) | $ (91) | ||||
Shares at end of period (in shares) at Jun. 30, 2018 | 71,596 | 45,479 | ||||
Balance at end of period at Jun. 30, 2018 | 150,306 | $ 716 | 442,460 | 797 | 214,143 | $ (507,810) |
Shares at beginning of period (in shares) at Dec. 31, 2018 | 71,856 | 45,822 | ||||
Balance at beginning of period at Dec. 31, 2018 | 168,331 | $ 719 | 447,337 | 1,296 | 237,308 | $ (518,329) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 26,855 | 26,855 | ||||
Reclassification of stranded tax effects (Note A) | Accounting Standards Update 2018-02 | 0 | 168 | (168) | |||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 4 | |||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 233 | (233) | |||
Stock-based compensation expense | 2,620 | 2,620 | ||||
Employee stock purchase plan (in shares) | (5) | |||||
Employee stock purchase plan | 140 | 86 | $ 54 | |||
Dividends | (4,406) | (4,406) | ||||
Change in fair value of interest rate swap, net of tax | (280) | (280) | ||||
Repurchases of common stock (in shares) | 432 | |||||
Repurchases of common stock | (14,688) | $ (14,688) | ||||
Shares at end of period (in shares) at Mar. 31, 2019 | 71,860 | 46,249 | ||||
Balance at end of period at Mar. 31, 2019 | 178,572 | $ 719 | 450,276 | 1,184 | 259,356 | $ (532,963) |
Shares at beginning of period (in shares) at Dec. 31, 2018 | 71,856 | 45,822 | ||||
Balance at beginning of period at Dec. 31, 2018 | 168,331 | $ 719 | 447,337 | 1,296 | 237,308 | $ (518,329) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 101,714 | |||||
Employee stock purchase plan | 283 | |||||
Change in fair value of interest rate swap, net of tax | (758) | |||||
Shares at end of period (in shares) at Jun. 30, 2019 | 71,865 | 47,293 | ||||
Balance at end of period at Jun. 30, 2019 | 214,856 | $ 719 | 454,071 | 706 | 329,760 | $ (570,400) |
Shares at beginning of period (in shares) at Mar. 31, 2019 | 71,860 | 46,249 | ||||
Balance at beginning of period at Mar. 31, 2019 | 178,572 | $ 719 | 450,276 | 1,184 | 259,356 | $ (532,963) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 74,859 | 74,859 | ||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 5 | |||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 177 | (177) | |||
Stock-based compensation expense | 3,524 | 3,524 | ||||
Employee stock purchase plan (in shares) | (4) | |||||
Employee stock purchase plan | 143 | 94 | $ 49 | |||
Dividends | (4,278) | (4,278) | ||||
Change in fair value of interest rate swap, net of tax | (478) | (478) | ||||
Repurchases of common stock (in shares) | 1,048 | |||||
Repurchases of common stock | (37,486) | $ (37,486) | ||||
Shares at end of period (in shares) at Jun. 30, 2019 | 71,865 | 47,293 | ||||
Balance at end of period at Jun. 30, 2019 | $ 214,856 | $ 719 | $ 454,071 | $ 706 | $ 329,760 | $ (570,400) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Mar. 31, 2018 | |
Dividend (in dollars per share) | $ 0.18 | $ 0.18 | $ 0.12 | $ 0.12 |
Tax benefit | $ 162 | $ 95 | ||
Interest rate swap tax | $ 61 | $ 176 | ||
Accounting Standards Update 2014-09 | ||||
Tax effect of new accounting standard | $ 63 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 101,714 | $ 25,447 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Gain on sale of discontinued operations | (80,004) | 0 |
Deferred income tax provision, net | 1,735 | (498) |
Provision for bad debts | 797 | 961 |
Depreciation and amortization | 3,623 | 4,172 |
Stock-based compensation expense | 5,050 | 4,552 |
Defined benefit pension plan expense | 431 | 910 |
(Gain) loss on deferred compensation plan investments, net | (10) | 248 |
Loss on disposal or impairment of property and equipment | 970 | 22 |
Contingent consideration liability remeasurement | 459 | 0 |
Noncash lease expense | 3,187 | |
Other | 177 | 178 |
(Increase) decrease in operating assets | ||
Trade receivables, net | (12,829) | (14,179) |
Income tax refund receivable | 101 | 6,170 |
Prepaid expenses and other current assets | (1,321) | (1,904) |
Other assets, net | (2,049) | 101 |
Increase (decrease) in operating liabilities | ||
Accounts payable and other accrued liabilities | 2,333 | 3,841 |
Accrued payroll costs | 1,298 | 2,403 |
Income taxes payable | 753 | 5,387 |
Other long-term liabilities | (4,085) | 448 |
Cash provided by operating activities | 22,330 | 38,259 |
Cash flows from investing activities: | ||
Capital expenditures | (4,184) | (3,116) |
Equity method investment | (7,500) | 0 |
Net proceeds from the sale of assets held for sale | 122,696 | 0 |
Cash provided by (used in) investing activities | 111,012 | (3,116) |
Cash flows from financing activities: | ||
Proceeds from credit facility | 80,100 | 334,600 |
Payments on credit facility | (86,900) | (350,523) |
Payments on other financing arrangements | (875) | (1,054) |
Repurchases of common stock | (51,546) | (12,129) |
Cash dividends | (8,684) | (5,943) |
Payment of contingent consideration liability | (477) | 0 |
Other | (25) | 0 |
Cash used in financing activities | (68,407) | (35,049) |
Change in cash and cash equivalents | 64,935 | 94 |
Cash and cash equivalents, beginning of period | 112 | 379 |
Cash and cash equivalents, end of period | 65,047 | 473 |
Cash Paid During the Period For: | ||
Income taxes | 8,447 | 4,343 |
Interest, net | 788 | 2,199 |
Operating lease liabilities | 4,025 | |
Non-Cash Financing and Investing Transactions: | ||
ROU assets obtained from new operating leases | 1,355 | |
Unsettled repurchases of common stock | 1,183 | 0 |
Contingent contribution for equity method investment | 1,500 | 0 |
Employee stock purchase plan | 283 | 261 |
Equipment acquired under finance leases | 192 | 424 |
Shares tendered in payment of exercise price of stock options | $ 0 | 46 |
Proceeds from income tax refunds | $ 6,800 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 1 - “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of the 2018 Annual Report on Form 10-K. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although Kforce believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2018 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2018 was derived from our audited Consolidated Balance Sheet as of December 31, 2018, as presented in our 2018 Annual Report on Form 10-K. Certain prior year amounts have been reclassified to conform with the current period presentation for amounts related to discontinued operations. Refer to Note B - “Discontinued Operations” for further information. Our quarterly operating results are affected by the number of billing days in a particular quarter, the seasonality of our clients’ businesses and increased holiday and vacation days taken. In addition, we typically experience an increase in costs in the first quarter of each fiscal year as a result of certain U.S. state and federal employment tax resets, which negatively impacts our gross profit and overall profitability. The results of operations for any interim period may be impacted by these factors and are not necessarily indicative of, nor comparable to, the results of operations for a full year. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” “we,” the “Firm,” “management,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions relate to the following: allowance for doubtful accounts; income taxes; self-insured liabilities for workers’ compensation and health insurance; obligations for the pension plan and goodwill and any related impairment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. Cash and Cash Equivalents All highly liquid investments with original maturity dates of three months or less at the time of purchase are classified as cash equivalents. Cash and cash equivalents are stated at cost, which approximates fair value because of the short-term nature of these instruments. Our cash equivalents are held in government money market funds and at times may exceed federally insured limits. Equity Method Investment In June 2019, we entered into a joint venture whereby Kforce has a 50% ownership in WorkLLama, LLC ("WorkLLama"). WorkLLama has and continues to develop the technology for a SaaS platform focused on consultant engagement and referral technologies; we believe our involvement in this joint venture will enhance our opportunities to efficiently and effectively identify and place consultants on assignment. Our non-controlling interest in WorkLLama, a variable interest entity, is accounted for as an equity method investment. Under the equity method, the carrying value is at cost and adjusted for our proportionate share of earnings or losses. Under the joint venture operating agreement for WorkLLama, Kforce is obligated to make additional future cash contributions that are contingent upon WorkLLama's achievement of certain operational and financial milestones, which are centered around the market acceptance of their technologies and success with Kforce's internal objectives. While there is uncertainty as to the attainment of these milestones given the joint venture is in the early stages of its evolution, we believe that $1.5 million of the maximum $15.0 million future contingent contributions is probable and, thus, have recorded this amount in Accounts payable and other accrued liabilities at June 30, 2019. At June 30, 2019, the balance of the investment in WorkLLama of $9.0 million was included in Other assets, net, which includes our initial cash contribution of $7.5 million and the $1.5 million probable contingent contribution. Health Insurance Except for certain fully insured health insurance lines of coverage, Kforce retains the risk of loss for each health insurance plan participant up to $500 thousand in claims annually. For its partially self-insured lines of coverage, health insurance costs are accrued using estimates to approximate the liability for reported claims and incurred but not reported claims, which are primarily based upon an evaluation of historical claims experience, actuarially-determined completion factors and a qualitative review of our health insurance exposure including the extent of outstanding claims and expected changes in health insurance costs. Earnings per Share Basic earnings per share is computed as net income divided by the weighted average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the dilutive effect of potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. For the three and six months ended June 30, 2019, 557 thousand and 538 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2018, 473 thousand and 398 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2019 and 2018, there were insignificant anti-dilutive common stock equivalents. New Accounting Standards Recently Adopted Accounting Standards In August 2018, the FASB issued authoritative guidance regarding a customer's accounting for implementation costs incurred for a cloud computing arrangement that is a service contract. The amendment aligns the requirements for capitalizing these implementation costs with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, and defer these costs over the non-cancelable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised. This amendment also requires entities to present cash flows, capitalized costs and amortization expense in the same financial statement line items as the service costs incurred for such arrangements. The guidance is effective for fiscal periods beginning after December 15, 2019 with retrospective application or prospective to all implementation costs incurred after the date of adoption. We early adopted this standard effective January 1, 2019, using the prospective method. Our hosting arrangements that are service contracts relate to technology solutions applicable to our business. Historically, these implementation costs were recorded as capital expenditures within investing cash flows and the capitalized costs were included in Other assets, net in the consolidated balance sheets. Due to the adoption of this standard and effective January 1, 2019, these implementation costs are recorded within operating cash flows. Capitalized costs are recorded in Prepaids and other current assets if expected to be recognized within one year and Other assets, net, if over one year, in the Unaudited Condensed Consolidated Balance Sheets. As of June 30, 2019, implementation costs capitalized were $0.2 million, with no accumulated amortization or amortization expense recorded during the three and six months ended June 30, 2019. In February 2018, the FASB issued authoritative guidance regarding the reclassification of certain stranded tax effects from accumulated other comprehensive income to retained earnings as a result of the change in tax rates related to the Tax Cuts and Jobs Act. The guidance is effective for fiscal periods beginning after December 15, 2018. We elected to adopt this optional standard and reclassified approximately $168 thousand from accumulated other comprehensive income to retained earnings on January 1, 2019 using the period of adoption method. In August 2017, the FASB issued authoritative guidance targeting improvements to accounting for hedging activities, which expands and clarifies hedge accounting for nonfinancial and financial risk components, aligns the recognition and presentation of the effects of the hedging instrument and hedged item in the financial statements, and simplifies the requirements for assessing effectiveness in a hedging relationship. The guidance is effective for annual periods beginning after December 15, 2018. We adopted this standard as of January 1, 2019 using the modified retrospective approach with no cumulative adjustment required. Additionally, we adopted the presentation and disclosure requirements using the prospective method as required. Refer to Note L - “Derivative Instrument and Hedging Activity” for the additional disclosures of the Firm’s derivative instrument. In February 2016, the FASB issued authoritative guidance regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The guidance is effective for annual periods beginning after December 15, 2018. We adopted this standard using the optional transition method as of January 1, 2019, without retrospective application to comparative periods. Refer to Note I - "Leases" for additional accounting policy and transition disclosures related to our operating leases. Accounting Standards Not Yet Adopted In August 2018, the FASB issued authoritative guidance regarding changes to the disclosure requirement for defined benefit plans including additions and deletions to certain disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The guidance is effective for fiscal periods beginning after December 15, 2020 with the retrospective method required for all periods presented. The adoption of this guidance will modify our disclosures but is not expected to have a material effect on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations During the three months ended March 31, 2019, management committed to a plan to divest of our Government Solutions ("GS") segment as a result of the Firm's decision to focus solely on the commercial technical and professional staffing services and solutions space. The GS segment consisted of Kforce Government Solutions, Inc. (“KGS”), our federal government solutions business, and TraumaFX® Solutions, Inc. ("TFX"), our federal government product business. On April 1, 2019, Kforce completed the sale of all the issued and outstanding stock of Kforce Government Holdings, Inc., including its wholly-owned subsidiary KGS, to ManTech International Corporation for a cash purchase price of $115.0 million. The gain on the sale of KGS, net of transaction costs, was $72.3 million. Total transaction costs were $9.6 million, which primarily includes legal and broker fees, transaction bonuses and accelerated stock-based compensation expense triggered by a change in control of KGS. On June 7, 2019, Kforce completed the sale of all the issued and outstanding stock of TFX to an unaffiliated third party for a cash purchase price of $18.4 million, subject to a post-closing working capital adjustment. Our gain on the sale of TFX, net of transaction costs, was $7.7 million and total transaction costs were $2.2 million, which primarily includes legal and broker fees and transaction bonuses. Due to the sale of TFX, we finalized the settlement of a contingent consideration liability related to the acquisition of TFX in 2014 and paid $0.6 million during the three months ended June 30, 2019. Since the dispositions, Kforce has no significant continuing involvement in the operations of KGS and TFX. The results of operations for both KGS and TFX have been reported as discontinued operations in our consolidated financial statements prior to their disposition. The following table summarizes the line items of pretax profit for the GS segment (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenue $ 1,311 $ 29,089 $ 27,737 $ 57,941 Direct costs 479 21,826 19,494 42,999 Gross profit 832 7,263 8,243 14,942 Selling, general and administrative expenses 1,424 5,534 6,842 11,329 Depreciation and amortization 58 245 307 501 (Loss) income from discontinued operations (650) 1,484 1,094 3,112 Gain on sale of discontinued operations 80,004 — 80,004 — Other income (expense), net 428 (11) (436) (8) Income from discontinued operations, before income taxes 79,782 1,473 80,662 3,104 Income tax expense 20,999 374 2,998 787 Income from discontinued operations, net of tax $ 58,783 $ 1,099 $ 77,664 $ 2,317 There was no income tax obligation for the sale of KGS due to an effective tax structure and Kforce’s significant outside tax basis. Historically, Kforce was not required to record a deferred tax asset for the excess of the outside tax basis in the equity of KGS over the amount of the inside basis in the assets of KGS used for external reporting under GAAP, as it was not apparent that this deferred tax asset would be realized. During the three months ended March 31, 2019, we entered into a definitive agreement to sell the stock of KGS and recorded $18.5 million to deferred tax assets and income tax benefit since it became apparent that the temporary difference would reverse in the foreseeable future. This deferred tax asset of $18.5 million was utilized and recorded as income tax expense during the three months ended June 30, 2019. The following table summarizes the assets and liabilities held for sale for the GS segment as of December 31, 2018 (in thousands): ASSETS December 31, 2018 Current assets held for sale: Trade receivables $ 24,336 Prepaid expenses and other current assets 5,437 Total Current assets held for sale $ 29,773 Noncurrent assets held for sale: Fixed assets, net $ 1,496 Other assets, net 293 Deferred tax assets, net 2,604 Intangible assets 2,952 Goodwill 20,928 Total Noncurrent assets held for sale $ 28,273 LIABILITIES Current liabilities held for sale: Accounts payable and other accrued liabilities $ 6,064 Accrued payroll costs 5,878 Other current liabilities 16 Income taxes payable 305 Total Current liabilities held for sale $ 12,263 Noncurrent liabilities held for sale: Other long-term liabilities $ 4,551 Total Noncurrent liabilities held for sale $ 4,551 The accompanying Unaudited Condensed Consolidated Statements of Cash Flows are presented on a combined basis (continuing operations and discontinued operations). For the six months ended June 30, 2019, cash provided by operating activities and cash provided by investing activities for discontinued operations were $5.1 million and $118.9 million, respectively. For the six months ended June 30, 2018, cash used in operating activities and cash used in investing activities for discontinued operations were $2.7 million and $0.8 million, respectively. |
Reportable Segments
Reportable Segments | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Kforce provides services through our Technology (“Tech”) and Finance and Accounting (“FA”) segments. Historically, and for the three and six months ended June 30, 2019 and 2018, we have reported sales and gross profit information on a segment basis. Total assets, liabilities and operating expenses are not reported separately by segment as our operations are largely combined. The following table provides information on the operations of our segments (in thousands): Tech FA Total Three Months Ended June 30, 2019 Revenue $ 265,305 $ 73,556 $ 338,861 Gross profit $ 74,172 $ 26,854 $ 101,026 Operating expenses and other expenses 79,962 Income from continuing operations, before income taxes $ 21,064 2018 Revenue $ 249,763 $ 79,772 $ 329,535 Gross profit $ 71,830 $ 28,390 $ 100,220 Operating expenses and other expenses 79,851 Income from continuing operations, before income taxes $ 20,369 Six Months Ended June 30, 2019 Revenue $ 520,948 $ 144,651 $ 665,599 Gross profit $ 142,995 $ 51,207 $ 194,202 Operating expenses and other expenses 162,348 Income from continuing operations, before income taxes $ 31,854 2018 Revenue $ 486,260 $ 160,716 $ 646,976 Gross profit $ 137,178 $ 55,551 $ 192,729 Operating expenses and other expenses 161,743 Income from continuing operations, before income taxes $ 30,986 |
Disaggregation of Revenue
Disaggregation of Revenue | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue The following table provides the disaggregation of revenue by segment and type (in thousands): Tech FA Total Three Months Ended June 30, 2019 Revenue by type: Flex revenue $ 259,707 $ 65,647 $ 325,354 Direct Hire revenue 5,598 7,909 13,507 Total Revenue $ 265,305 $ 73,556 $ 338,861 2018 Revenue by type: Flex revenue $ 244,509 $ 72,490 $ 316,999 Direct Hire revenue 5,254 7,282 12,536 Total Revenue $ 249,763 $ 79,772 $ 329,535 Six Months Ended June 30, 2019 Revenue by type: Flex revenue $ 509,923 $ 130,412 $ 640,335 Direct Hire revenue 11,025 14,239 25,264 Total Revenue $ 520,948 $ 144,651 $ 665,599 2018 Revenue by type: Flex revenue $ 476,005 $ 147,040 $ 623,045 Direct Hire revenue 10,255 13,676 23,931 Total Revenue $ 486,260 $ 160,716 $ 646,976 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Employment Agreements Kforce has employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a six three |
Other Assets, Net
Other Assets, Net | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets, Net | Other Assets, Net Other assets, net consisted of the following (in thousands): June 30, 2019 December 31, 2018 Assets held in Rabbi Trust $ 33,703 $ 29,134 Right-of-use assets for operating leases, net 14,887 — Equity method investment 9,000 — Capitalized software, net 6,309 4,828 Deferred loan costs, net 1,032 1,182 Interest rate swap derivative instrument — 900 Other non-current assets 1,114 620 Total Other assets, net $ 66,045 $ 36,664 |
Current Liabilities
Current Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Current Liabilities | Current Liabilities The following table provides information on certain current liabilities (in thousands): June 30, 2019 December 31, 2018 Accounts payable and other accrued liabilities: Accounts payable $ 20,515 $ 18,793 Accrued liabilities 15,340 13,749 Total Accounts payable and other accrued liabilities $ 35,855 $ 32,542 Accrued payroll costs: Payroll and benefits $ 35,052 $ 34,768 Health insurance liabilities 3,864 2,680 Payroll taxes 1,075 920 Workers’ compensation liabilities 1,017 1,016 Total Accrued payroll costs $ 41,008 $ 39,384 Our accounts payable balance includes vendor and independent contractor payables. Our accrued liabilities balance includes the current portion of the deferred compensation plans liability, contract liabilities from contracts with customers (such as rebates) and other accrued liabilities. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): June 30, 2019 December 31, 2018 Deferred compensation plan $ 27,857 $ 25,672 Supplemental executive retirement plan 15,466 15,035 Operating lease liabilities 10,941 — Interest rate swap derivative instrument 115 — Other long-term liabilities 1,231 2,802 Total Other long-term liabilities $ 55,610 $ 43,509 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases Kforce leases property for our field offices as well as certain office equipment. We determine if a contract or arrangement meets the definition of a lease at inception. We recorded approximately $17.6 million of right-of-use (“ROU”) assets and $21.0 million of lease liabilities on our consolidated balance sheet on January 1, 2019 related to operating leases upon adoption of the new lease standard. The difference between the ROU assets and lease liabilities balances relates to the lease incentive liabilities recorded as of December 31, 2018 in accordance with the previous lease accounting guidance. We determined that no cumulative effect adjustment to retained earnings was necessary upon adoption. We elected the package of practical expedients and did not reassess our prior conclusions regarding lease identification, lease classification and initial direct costs. We did not elect the hindsight practical expedient. ROU assets for operating leases, net of amortization, are recorded within Other assets, net and operating lease liabilities are recorded within Other current liabilities if expected to be recognized in less than one year and Other long-term liabilities, if over one year, in the Unaudited Condensed Consolidated Balance Sheet. Operating lease additions are non-cash transactions and the amortization of the ROU assets is reflected as Noncash lease expense within operating activities in the Unaudited Condensed Consolidated Statement of Cash Flows. Finance leases are not significant to our operations as of and for the three and six months ended June 30, 2019. Operating Leases We elected not to separate lease and non-lease components when determining the consideration in the contract. ROU assets and lease liabilities are recognized based on the present value of the lease payments over the lease term at the commencement date. If there is no rate implicit in the lease, we use our incremental borrowing rate in the present value calculation, which is based on our collateralized borrowing rate and determined based on the terms of our leases and the economic environment in which they exist. Our weighted-average discount rate was 4.0% on June 30, 2019. Our lease agreements do not contain any material residual value guarantees or restrictive covenants. Our lease terms typically range from three five We elected the short term practical expedient for leases with an initial term of 12 months or less and did not recognize ROU assets or lease liabilities for these short term leases. In addition to base rent, certain of our operating leases require variable payments of property taxes, insurance and common area maintenance. These variable lease costs, other than those dependent upon an index or rate, are expensed when the obligation for those payments is incurred. The following table presents operating lease expense included in selling, general and administrative expenses ("SG&A") for the three and six months ended June 30, 2019 (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Operating lease expense $ 1,667 $ 3,435 Variable lease costs 397 779 Short term lease expense 220 400 Sublease income (107) (213) Total operating lease expense $ 2,177 $ 4,401 The following table presents the maturities of operating lease liabilities as of June 30, 2019 (in thousands): Remainder of 2019 $ 2,911 2020 6,248 2021 3,834 2022 2,127 2023 1,713 2024 846 Thereafter 459 Total maturities of operating lease liabilities 18,138 Less: interest 1,266 Total operating lease liabilities $ 16,872 The following table presents the expected future contractual operating lease obligations as of December 31, 2018 in accordance with the previous guidance (in thousands): 2019 $ 6,994 2020 6,177 2021 3,731 2022 2,142 2023 1,745 Thereafter 1,199 Total future contractual operating lease obligations $ 21,988 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Supplemental Executive Retirement Plan Kforce maintains a Supplemental Executive Retirement Plan (“SERP”) for the benefit of certain executive officers. The primary goals of the SERP are to create an additional wealth accumulation opportunity, restore lost qualified pension benefits due to government limitations and retain our covered executive officers. The SERP is a non-qualified benefit plan and does not include elective deferrals of covered executive officers’ compensation. The following table presents the components of net periodic benefit cost (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Service cost $ 65 $ 338 $ 130 $ 676 Interest cost 151 117 302 234 Net periodic benefit cost $ 216 $ 455 $ 432 $ 910 The service cost is recorded in SG&A and the interest cost is recorded in Other expense, net in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. The projected benefit obligation as of June 30, 2019 and December 31, 2018 was $15.5 million and $15.0 million, respectively, and is recorded in Other long-term liabilities in the accompanying Unaudited Condensed Consolidated Balance Sheets. There is no requirement for Kforce to fund the SERP and, as a result, no contributions were made to the SERP during the six months ended June 30, 2019. Kforce does not currently anticipate funding the SERP during the year ended December 31, 2019. |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans On April 23, 2019, the Kforce shareholders approved the 2019 Stock Incentive Plan (the “2019 Plan”). The 2019 Plan allows for the issuance of stock options, stock appreciation rights, stock awards (including restricted stock awards (“RSAs”) and restricted stock units (“RSUs”)) and other stock-based awards. The aggregate number of shares of common stock that are subject to awards under the 2019 Plan is approximately 2.8 million shares. The 2019 Plan terminates on April 23, 2029. Prior to the effective date of the 2019 Plan, the Company granted stock awards to eligible participants under our 2017 Stock Incentive Plan, 2016 Stock Incentive Plan and 2013 Stock Incentive Plan (collectively the “Prior Plans”). As of the effective date of the 2019 Plan, no additional awards may be granted pursuant to the Prior Plans; however, awards outstanding as of the effective date will continue to vest in accordance with the terms of the Prior Plans. During the three and six months ended June 30, 2019, stock-based compensation expense from continuing operations was $2.4 million and $5.0 million, respectively. During the three and six months ended June 30, 2018, stock-based compensation expense from continuing operations was $2.2 million and $4.4 million, respectively. Restricted Stock Restricted stock (including RSAs and RSUs) are granted to executives and management either: for awards related to Kforce’s annual long-term incentive (“LTI”) compensation program or as part of a compensation package in order to retain directors, executives and management. The LTI award amounts are generally based on total shareholder return performance goals. Restricted stock granted during the six months ended June 30, 2019 will vest over a period of one RSAs contain the same voting rights as other common stock as well as the right to forfeitable dividends in the form of additional RSAs at the same rate as the cash dividend on common stock and containing the same vesting provisions as the underlying award. RSUs contain no voting rights, but have the right to forfeitable dividend equivalents in the form of additional RSUs at the same rate as the cash dividend on common stock and the same vesting provisions as the underlying award. The distribution of shares of common stock for each RSU, pursuant to the terms of the Kforce Inc. Director’s Restricted Stock Unit Deferral Plan, can be deferred to a date later than the vesting date if an appropriate election is made. In the event of such deferral, vested RSUs have the right to dividend equivalents. The following table presents the restricted stock activity for the six months ended June 30, 2019 (in thousands, except per share amounts): Number of Restricted Stock Weighted-Average Total Intrinsic Outstanding at December 31, 2018 1,320 $ 24.94 Granted 56 $ 34.04 Forfeited (47) $ 23.03 Vested (1) (105) $ 24.72 $ 3,521 Outstanding at June 30, 2019 1,224 $ 25.44 (1) The increase in shares vested during the six months ended June 30, 2019 was due to the acceleration of stock-based compensation expense triggered by a change in control of KGS. The weighted-average grant date fair value at December 31, 2018 has been updated in the table above to correct an immaterial reporting error in our 2018 Annual Report on Form 10-K. As of June 30, 2019, total unrecognized stock-based compensation expense related to restricted stock was $23.9 million, which will be recognized over a weighted-average remaining period of 3.7 years. |
Derivative Instrument and Hedgi
Derivative Instrument and Hedging Activity | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instrument and Hedging Activity | Derivative Instrument and Hedging Activity Kforce is exposed to interest rate risk as a result of our corporate borrowing activities. The Firm uses an interest rate swap derivative as a risk management tool to mitigate the potential impact of rising interest rates on our variable rate debt. On April 21, 2017, Kforce entered into a forward-starting interest rate swap agreement with Wells Fargo Bank, N.A. (the “Swap”). The Swap was effective on May 31, 2017 and matures on April 29, 2022. The Swap rate is 1.81%, which is added to our interest rate margin to determine the fixed rate that the Firm will pay to the counterparty during the term of the Swap based on the notional amount of the Swap. The notional amount of the Swap is $65.0 million for the first three years and decreases to $25.0 million for years four and five. The Swap has been designated as a cash flow hedge and was effective as of June 30, 2019. The change in the fair value of the Swap is recorded as a component of Accumulated other comprehensive income in the Unaudited Condensed Consolidated Balance Sheets. The following table sets forth the activity in the accumulated derivative instrument gain (loss) for the six months ended June 30, 2019 (in thousands): Accumulated derivative instrument gain, beginning of period $ 900 Net change associated with current period hedging transactions (1,015) Accumulated derivative instrument loss, end of period $ (115) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Kforce’s interest rate swap is measured at fair value using readily observable inputs, such as the LIBOR interest rate, which are considered to be Level 2 inputs. At June 30, 2019 and December 31, 2018, the Swap is recorded in Other long-term liabilities and Other assets, net, respectively, within the accompanying Unaudited Condensed Consolidated Balance Sheets. Refer to Note L - “Derivative Instrument and Hedging Activity” for a complete discussion of the Firm’s derivative instrument. Certain assets, in specific circumstances, are measured at fair value on a non-recurring basis utilizing Level 3 inputs such as goodwill and other long-lived assets. For these assets, measurement at fair value in periods subsequent to their initial recognition would be applicable if one or more of these assets were determined to be impaired. The following table sets forth by level, within the fair value hierarchy, estimated fair values on a recurring basis (in thousands): Assets/(Liabilities) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant At June 30, 2019 Recurring basis: Interest rate swap derivative instrument $ (115) $ — $ (115) $ — At December 31, 2018 Recurring basis: Interest rate swap derivative instrument $ 900 $ — $ 900 $ — There were no transfers into or out of Level 1, 2 or 3 assets or liabilities during the six months ended June 30, 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although Kforce believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2018 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2018 was derived from our audited Consolidated Balance Sheet as of December 31, 2018, as presented in our 2018 Annual Report on Form 10-K. |
Reclassification | Certain prior year amounts have been reclassified to conform with the current period presentation for amounts related to discontinued operations. |
Principles of Consolidation | The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” “we,” the “Firm,” “management,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions relate to the following: allowance for doubtful accounts; income taxes; self-insured liabilities for workers’ compensation and health insurance; obligations for the pension plan and goodwill and any related impairment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. |
Cash and Cash Equivalents | All highly liquid investments with original maturity dates of three months or less at the time of purchase are classified as cash equivalents. Cash and cash equivalents are stated at cost, which approximates fair value because of the short-term nature of these instruments. Our cash equivalents are held in government money market funds and at times may exceed federally insured limits. |
Equity Method Investment | In June 2019, we entered into a joint venture whereby Kforce has a 50% ownership in WorkLLama, LLC ("WorkLLama"). WorkLLama has and continues to develop the technology for a SaaS platform focused on consultant engagement and referral technologies; we believe our involvement in this joint venture will enhance our opportunities to efficiently and effectively identify and place consultants on assignment. Our non-controlling interest in WorkLLama, a variable interest entity, is accounted for as an equity method investment. Under the equity method, the carrying value is at cost and adjusted for our proportionate share of earnings or losses.Under the joint venture operating agreement for WorkLLama, Kforce is obligated to make additional future cash contributions that are contingent upon WorkLLama's achievement of certain operational and financial milestones, which are centered around the market acceptance of their technologies and success with Kforce's internal objectives. |
Health Insurance | Except for certain fully insured health insurance lines of coverage, Kforce retains the risk of loss for each health insurance plan participant up to $500 thousand in claims annually. For its partially self-insured lines of coverage, health insurance costs are accrued using estimates to approximate the liability for reported claims and incurred but not reported claims, which are primarily based upon an evaluation of historical claims experience, actuarially-determined completion factors and a qualitative review of our health insurance exposure including the extent of outstanding claims and expected changes in health insurance costs. |
Earnings per Share | Basic earnings per share is computed as net income divided by the weighted average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the dilutive effect of potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. |
New Accounting Standards, Recently Adopted and Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards In August 2018, the FASB issued authoritative guidance regarding a customer's accounting for implementation costs incurred for a cloud computing arrangement that is a service contract. The amendment aligns the requirements for capitalizing these implementation costs with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software, and defer these costs over the non-cancelable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised. This amendment also requires entities to present cash flows, capitalized costs and amortization expense in the same financial statement line items as the service costs incurred for such arrangements. The guidance is effective for fiscal periods beginning after December 15, 2019 with retrospective application or prospective to all implementation costs incurred after the date of adoption. We early adopted this standard effective January 1, 2019, using the prospective method. Our hosting arrangements that are service contracts relate to technology solutions applicable to our business. Historically, these implementation costs were recorded as capital expenditures within investing cash flows and the capitalized costs were included in Other assets, net in the consolidated balance sheets. Due to the adoption of this standard and effective January 1, 2019, these implementation costs are recorded within operating cash flows. Capitalized costs are recorded in Prepaids and other current assets if expected to be recognized within one year and Other assets, net, if over one year, in the Unaudited Condensed Consolidated Balance Sheets. As of June 30, 2019, implementation costs capitalized were $0.2 million, with no accumulated amortization or amortization expense recorded during the three and six months ended June 30, 2019. In February 2018, the FASB issued authoritative guidance regarding the reclassification of certain stranded tax effects from accumulated other comprehensive income to retained earnings as a result of the change in tax rates related to the Tax Cuts and Jobs Act. The guidance is effective for fiscal periods beginning after December 15, 2018. We elected to adopt this optional standard and reclassified approximately $168 thousand from accumulated other comprehensive income to retained earnings on January 1, 2019 using the period of adoption method. In August 2017, the FASB issued authoritative guidance targeting improvements to accounting for hedging activities, which expands and clarifies hedge accounting for nonfinancial and financial risk components, aligns the recognition and presentation of the effects of the hedging instrument and hedged item in the financial statements, and simplifies the requirements for assessing effectiveness in a hedging relationship. The guidance is effective for annual periods beginning after December 15, 2018. We adopted this standard as of January 1, 2019 using the modified retrospective approach with no cumulative adjustment required. Additionally, we adopted the presentation and disclosure requirements using the prospective method as required. Refer to Note L - “Derivative Instrument and Hedging Activity” for the additional disclosures of the Firm’s derivative instrument. In February 2016, the FASB issued authoritative guidance regarding the accounting for leases, and has since issued subsequent updates to the initial guidance. The amended guidance requires the recognition of assets and liabilities for operating leases. The guidance is effective for annual periods beginning after December 15, 2018. We adopted this standard using the optional transition method as of January 1, 2019, without retrospective application to comparative periods. Refer to Note I - "Leases" for additional accounting policy and transition disclosures related to our operating leases. Accounting Standards Not Yet Adopted In August 2018, the FASB issued authoritative guidance regarding changes to the disclosure requirement for defined benefit plans including additions and deletions to certain disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The guidance is effective for fiscal periods beginning after December 15, 2020 with the retrospective method required for all periods presented. The adoption of this guidance will modify our disclosures but is not expected to have a material effect on our consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Pretax Profit for GS Segment | The following table summarizes the line items of pretax profit for the GS segment (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Revenue $ 1,311 $ 29,089 $ 27,737 $ 57,941 Direct costs 479 21,826 19,494 42,999 Gross profit 832 7,263 8,243 14,942 Selling, general and administrative expenses 1,424 5,534 6,842 11,329 Depreciation and amortization 58 245 307 501 (Loss) income from discontinued operations (650) 1,484 1,094 3,112 Gain on sale of discontinued operations 80,004 — 80,004 — Other income (expense), net 428 (11) (436) (8) Income from discontinued operations, before income taxes 79,782 1,473 80,662 3,104 Income tax expense 20,999 374 2,998 787 Income from discontinued operations, net of tax $ 58,783 $ 1,099 $ 77,664 $ 2,317 |
Summary of Assets and Liabilities Held For Sale for GS | The following table summarizes the assets and liabilities held for sale for the GS segment as of December 31, 2018 (in thousands): ASSETS December 31, 2018 Current assets held for sale: Trade receivables $ 24,336 Prepaid expenses and other current assets 5,437 Total Current assets held for sale $ 29,773 Noncurrent assets held for sale: Fixed assets, net $ 1,496 Other assets, net 293 Deferred tax assets, net 2,604 Intangible assets 2,952 Goodwill 20,928 Total Noncurrent assets held for sale $ 28,273 LIABILITIES Current liabilities held for sale: Accounts payable and other accrued liabilities $ 6,064 Accrued payroll costs 5,878 Other current liabilities 16 Income taxes payable 305 Total Current liabilities held for sale $ 12,263 Noncurrent liabilities held for sale: Other long-term liabilities $ 4,551 Total Noncurrent liabilities held for sale $ 4,551 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Segment Reporting [Abstract] | |
Operations of Segments | The following table provides information on the operations of our segments (in thousands): Tech FA Total Three Months Ended June 30, 2019 Revenue $ 265,305 $ 73,556 $ 338,861 Gross profit $ 74,172 $ 26,854 $ 101,026 Operating expenses and other expenses 79,962 Income from continuing operations, before income taxes $ 21,064 2018 Revenue $ 249,763 $ 79,772 $ 329,535 Gross profit $ 71,830 $ 28,390 $ 100,220 Operating expenses and other expenses 79,851 Income from continuing operations, before income taxes $ 20,369 Six Months Ended June 30, 2019 Revenue $ 520,948 $ 144,651 $ 665,599 Gross profit $ 142,995 $ 51,207 $ 194,202 Operating expenses and other expenses 162,348 Income from continuing operations, before income taxes $ 31,854 2018 Revenue $ 486,260 $ 160,716 $ 646,976 Gross profit $ 137,178 $ 55,551 $ 192,729 Operating expenses and other expenses 161,743 Income from continuing operations, before income taxes $ 30,986 |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | The following table provides the disaggregation of revenue by segment and type (in thousands): Tech FA Total Three Months Ended June 30, 2019 Revenue by type: Flex revenue $ 259,707 $ 65,647 $ 325,354 Direct Hire revenue 5,598 7,909 13,507 Total Revenue $ 265,305 $ 73,556 $ 338,861 2018 Revenue by type: Flex revenue $ 244,509 $ 72,490 $ 316,999 Direct Hire revenue 5,254 7,282 12,536 Total Revenue $ 249,763 $ 79,772 $ 329,535 Six Months Ended June 30, 2019 Revenue by type: Flex revenue $ 509,923 $ 130,412 $ 640,335 Direct Hire revenue 11,025 14,239 25,264 Total Revenue $ 520,948 $ 144,651 $ 665,599 2018 Revenue by type: Flex revenue $ 476,005 $ 147,040 $ 623,045 Direct Hire revenue 10,255 13,676 23,931 Total Revenue $ 486,260 $ 160,716 $ 646,976 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets, Net | Other assets, net consisted of the following (in thousands): June 30, 2019 December 31, 2018 Assets held in Rabbi Trust $ 33,703 $ 29,134 Right-of-use assets for operating leases, net 14,887 — Equity method investment 9,000 — Capitalized software, net 6,309 4,828 Deferred loan costs, net 1,032 1,182 Interest rate swap derivative instrument — 900 Other non-current assets 1,114 620 Total Other assets, net $ 66,045 $ 36,664 |
Current Liabilities (Tables)
Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table provides information on certain current liabilities (in thousands): June 30, 2019 December 31, 2018 Accounts payable and other accrued liabilities: Accounts payable $ 20,515 $ 18,793 Accrued liabilities 15,340 13,749 Total Accounts payable and other accrued liabilities $ 35,855 $ 32,542 Accrued payroll costs: Payroll and benefits $ 35,052 $ 34,768 Health insurance liabilities 3,864 2,680 Payroll taxes 1,075 920 Workers’ compensation liabilities 1,017 1,016 Total Accrued payroll costs $ 41,008 $ 39,384 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): June 30, 2019 December 31, 2018 Deferred compensation plan $ 27,857 $ 25,672 Supplemental executive retirement plan 15,466 15,035 Operating lease liabilities 10,941 — Interest rate swap derivative instrument 115 — Other long-term liabilities 1,231 2,802 Total Other long-term liabilities $ 55,610 $ 43,509 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Leases [Abstract] | |
Schedule of Lease Expense | The following table presents operating lease expense included in selling, general and administrative expenses ("SG&A") for the three and six months ended June 30, 2019 (in thousands): Three Months Ended Six Months Ended June 30, 2019 June 30, 2019 Operating lease expense $ 1,667 $ 3,435 Variable lease costs 397 779 Short term lease expense 220 400 Sublease income (107) (213) Total operating lease expense $ 2,177 $ 4,401 |
Schedule of Future Minimum Lease Payments | The following table presents the maturities of operating lease liabilities as of June 30, 2019 (in thousands): Remainder of 2019 $ 2,911 2020 6,248 2021 3,834 2022 2,127 2023 1,713 2024 846 Thereafter 459 Total maturities of operating lease liabilities 18,138 Less: interest 1,266 Total operating lease liabilities $ 16,872 |
Schedule of Expected Future Contractual Operating Lease Obligations | The following table presents the expected future contractual operating lease obligations as of December 31, 2018 in accordance with the previous guidance (in thousands): 2019 $ 6,994 2020 6,177 2021 3,731 2022 2,142 2023 1,745 Thereafter 1,199 Total future contractual operating lease obligations $ 21,988 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The following table presents the components of net periodic benefit cost (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Service cost $ 65 $ 338 $ 130 $ 676 Interest cost 151 117 302 234 Net periodic benefit cost $ 216 $ 455 $ 432 $ 910 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Activity | The following table presents the restricted stock activity for the six months ended June 30, 2019 (in thousands, except per share amounts): Number of Restricted Stock Weighted-Average Total Intrinsic Outstanding at December 31, 2018 1,320 $ 24.94 Granted 56 $ 34.04 Forfeited (47) $ 23.03 Vested (1) (105) $ 24.72 $ 3,521 Outstanding at June 30, 2019 1,224 $ 25.44 (1) The increase in shares vested during the six months ended June 30, 2019 was due to the acceleration of stock-based compensation expense triggered by a change in control of KGS. |
Derivative Instrument and Hed_2
Derivative Instrument and Hedging Activity (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Activity in the Accumulated Derivative Instrument Gain | The following table sets forth the activity in the accumulated derivative instrument gain (loss) for the six months ended June 30, 2019 (in thousands): Accumulated derivative instrument gain, beginning of period $ 900 Net change associated with current period hedging transactions (1,015) Accumulated derivative instrument loss, end of period $ (115) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth by level, within the fair value hierarchy, estimated fair values on a recurring basis (in thousands): Assets/(Liabilities) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant At June 30, 2019 Recurring basis: Interest rate swap derivative instrument $ (115) $ — $ (115) $ — At December 31, 2018 Recurring basis: Interest rate swap derivative instrument $ 900 $ — $ 900 $ — |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) shares in Thousands | Jan. 01, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Equity Method Investment | |||||||
Equity method investment | $ 9,000,000 | $ 9,000,000 | $ 0 | ||||
Initial cash contribution | 7,500,000 | $ 0 | |||||
Health Insurance | |||||||
Risk of loss for each health insurance plan participant | $ 500,000 | ||||||
Earnings per Share | |||||||
Common stock equivalents (in shares) | 557 | 473 | 538 | 398 | |||
Anti-dilutive common stock equivalents (in shares) | 0 | 0 | 0 | 0 | |||
Accounting Standards Update 2018-15 | |||||||
New Accounting Standards | |||||||
Implementation costs capitalized | $ 200,000 | $ 200,000 | |||||
Accumulated amortization | 0 | 0 | |||||
Amortization expense | $ 0 | $ 0 | |||||
Accounting Standards Update 2018-02 | |||||||
New Accounting Standards | |||||||
Reclassification of stranded tax effects | $ 168,000 | $ 0 | |||||
WorkLLama | |||||||
Equity Method Investment | |||||||
Percent ownership of equity method investment | 50.00% | 50.00% | |||||
Contingent payments liability | $ 1,500,000 | $ 1,500,000 | |||||
Contingent payments liability, maximum | 15,000,000 | 15,000,000 | |||||
Equity method investment | $ 9,000,000 | 9,000,000 | |||||
Initial cash contribution | $ 7,500,000 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | Jun. 07, 2019 | Apr. 01, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Gain on sale of discontinued operations | $ 80,004 | $ 0 | ||||||
Deferred tax assets, net | $ 6,238 | 6,238 | $ 7,147 | |||||
Cash provided by (used in) operating activities for discontinued operations | 5,100 | (2,700) | ||||||
Cash provided by (used in) investing activities for discontinued operations | 118,900 | (800) | ||||||
Discontinued Operations, Disposed of by Sale | Kforce Government Solutions, Inc.("KGS") | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Total cash purchase price | $ 115,000 | |||||||
Gain on sale of discontinued operations | 72,300 | |||||||
Transaction costs | $ 9,600 | |||||||
Deferred tax assets, net | $ 18,500 | |||||||
Tax expense (benefit) | 18,500 | $ (18,500) | ||||||
Discontinued Operations, Disposed of by Sale | TraumaFX | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Total cash purchase price | $ 18,400 | |||||||
Gain on sale of discontinued operations | 7,700 | |||||||
Transaction costs | $ 2,200 | |||||||
Contingent consideration paid | 600 | |||||||
Discontinued Operations, Disposed of by Sale | GS segment | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Gain on sale of discontinued operations | 80,004 | $ 0 | 80,004 | 0 | ||||
Tax expense (benefit) | $ 20,999 | $ 374 | $ 2,998 | $ 787 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Pretax Profit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of discontinued operations | $ 80,004 | $ 0 | ||
Income from discontinued operations, net of tax | $ 58,783 | $ 1,099 | 77,664 | 2,317 |
Discontinued Operations, Disposed of by Sale | GS segment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 1,311 | 29,089 | 27,737 | 57,941 |
Direct costs | 479 | 21,826 | 19,494 | 42,999 |
Gross profit | 832 | 7,263 | 8,243 | 14,942 |
Selling, general and administrative expenses | 1,424 | 5,534 | 6,842 | 11,329 |
Depreciation and amortization | 58 | 245 | 307 | 501 |
(Loss) income from discontinued operations | (650) | 1,484 | 1,094 | 3,112 |
Gain on sale of discontinued operations | 80,004 | 0 | 80,004 | 0 |
Other income (expense), net | 428 | (11) | (436) | (8) |
Income from discontinued operations, before income taxes | 79,782 | 1,473 | 80,662 | 3,104 |
Tax expense (benefit) | 20,999 | 374 | 2,998 | 787 |
Income from discontinued operations, net of tax | $ 58,783 | $ 1,099 | $ 77,664 | $ 2,317 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities Held For Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets held for sale: | ||
Total Current assets held for sale | $ 0 | $ 29,773 |
Noncurrent assets held for sale: | ||
Total Noncurrent assets held for sale | 0 | 28,273 |
Current liabilities held for sale: | ||
Total Current liabilities held for sale | 0 | 12,263 |
Noncurrent liabilities held for sale: | ||
Total Noncurrent liabilities held for sale | $ 0 | 4,551 |
Discontinued Operations, Held-for-sale | GS segment | ||
Current assets held for sale: | ||
Trade receivables | 24,336 | |
Prepaid expenses and other current assets | 5,437 | |
Total Current assets held for sale | 29,773 | |
Noncurrent assets held for sale: | ||
Fixed assets, net | 1,496 | |
Other assets, net | 293 | |
Deferred tax assets, net | 2,604 | |
Intangible assets | 2,952 | |
Goodwill | 20,928 | |
Total Noncurrent assets held for sale | 28,273 | |
Current liabilities held for sale: | ||
Accounts payable and other accrued liabilities | 6,064 | |
Accrued payroll costs | 5,878 | |
Other current liabilities | 16 | |
Income taxes payable | 305 | |
Total Current liabilities held for sale | 12,263 | |
Noncurrent liabilities held for sale: | ||
Other long-term liabilities | 4,551 | |
Total Noncurrent liabilities held for sale | $ 4,551 |
Reportable Segments - Schedule
Reportable Segments - Schedule (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 338,861 | $ 329,535 | $ 665,599 | $ 646,976 |
Gross profit | 101,026 | 100,220 | 194,202 | 192,729 |
Operating expenses and other expenses | 79,962 | 79,851 | 162,348 | 161,743 |
Income from continuing operations, before income taxes | 21,064 | 20,369 | 31,854 | 30,986 |
Tech | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 265,305 | 249,763 | 520,948 | 486,260 |
Gross profit | 74,172 | 71,830 | 142,995 | 137,178 |
FA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 73,556 | 79,772 | 144,651 | 160,716 |
Gross profit | $ 26,854 | $ 28,390 | $ 51,207 | $ 55,551 |
Disaggregation of Revenue - Sch
Disaggregation of Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 338,861 | $ 329,535 | $ 665,599 | $ 646,976 |
Flex revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 325,354 | 316,999 | 640,335 | 623,045 |
Direct Hire revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 13,507 | 12,536 | 25,264 | 23,931 |
Tech | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 265,305 | 249,763 | 520,948 | 486,260 |
Tech | Flex revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 259,707 | 244,509 | 509,923 | 476,005 |
Tech | Direct Hire revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 5,598 | 5,254 | 11,025 | 10,255 |
FA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 73,556 | 79,772 | 144,651 | 160,716 |
FA | Flex revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 65,647 | 72,490 | 130,412 | 147,040 |
FA | Direct Hire revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 7,909 | $ 7,282 | $ 14,239 | $ 13,676 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Other Commitments [Line Items] | |
Unemployment benefits, possible liability with a change in control | $ 32.4 |
Unemployment benefits, possible liability without a change in control | $ 14.8 |
Minimum | |
Other Commitments [Line Items] | |
Period for providing minimum compensation salary and continuation of certain benefits to executives under employment agreements | 6 months |
Severance payment as a percentage of annual salary | 100.00% |
Severance payment as a percentage of annual bonus | 50.00% |
Maximum | |
Other Commitments [Line Items] | |
Period for providing minimum compensation salary and continuation of certain benefits to executives under employment agreements | 3 years |
Severance payment as a percentage of annual salary | 300.00% |
Severance payment as a percentage of annual bonus | 300.00% |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Assets held in Rabbi Trust | $ 33,703 | $ 29,134 |
Right-of-use assets for operating leases, net | 14,887 | |
Equity method investment | 9,000 | 0 |
Capitalized software, net | 6,309 | 4,828 |
Deferred loan costs, net | 1,032 | 1,182 |
Interest rate swap derivative instrument | 0 | 900 |
Other non-current assets | 1,114 | 620 |
Total Other assets, net | $ 66,045 | $ 36,664 |
Current Liabilities (Details)
Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accounts payable and other accrued liabilities: | ||
Accounts payable | $ 20,515 | $ 18,793 |
Accrued liabilities | 15,340 | 13,749 |
Total Accounts payable and other accrued liabilities | 35,855 | 32,542 |
Accrued payroll costs: | ||
Payroll and benefits | 35,052 | 34,768 |
Health insurance liabilities | 3,864 | 2,680 |
Payroll taxes | 1,075 | 920 |
Workers’ compensation liabilities | 1,017 | 1,016 |
Total Accrued payroll costs | $ 41,008 | $ 39,384 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation plan | $ 27,857 | $ 25,672 |
Supplemental executive retirement plan | 15,466 | 15,035 |
Operating lease liabilities | 10,941 | 0 |
Interest rate swap derivative instrument | 115 | 0 |
Other long-term liabilities | 1,231 | 2,802 |
Total Other long-term liabilities | $ 55,610 | $ 43,509 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jan. 01, 2019 |
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets | $ 14,887 | |
Lease liabilities | $ 16,872 | |
Weighted-average discount rate | 4.00% | |
Weighted-average remaining lease term | 3 years 6 months | |
Accounting Standards Update 2016-02 | ||
Lessee, Lease, Description [Line Items] | ||
Right-of-use assets | $ 17,600 | |
Lease liabilities | $ 21,000 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms | 3 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Lease terms | 5 years |
Leases - Schedule of Lease Expe
Leases - Schedule of Lease Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2019 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Operating lease expense | $ 1,667 | $ 3,435 |
Variable lease costs | 397 | 779 |
Short term lease expense | 220 | 400 |
Sublease income | (107) | (213) |
Total operating lease expense | $ 2,177 | $ 4,401 |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
Remainder of 2019 | $ 2,911 | |
2020 | 6,248 | |
2021 | 3,834 | |
2022 | 2,127 | |
2023 | 1,713 | |
2024 | 846 | |
Thereafter | 459 | |
Total maturities of operating lease liabilities | 18,138 | |
Less: interest | 1,266 | |
Total operating lease liabilities | $ 16,872 | |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2019 | $ 6,994 | |
2020 | 6,177 | |
2021 | 3,731 | |
2022 | 2,142 | |
2023 | 1,745 | |
Thereafter | 1,199 | |
Total future contractual operating lease obligations | $ 21,988 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | ||
Supplemental executive retirement plan | $ 15,466,000 | $ 15,035,000 |
Employer contributions to benefit plans | 0 | |
Expected funding of the SERP in the current year | $ 0 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 65 | $ 338 | $ 130 | $ 676 |
Interest cost | 151 | 117 | 302 | 234 |
Net periodic benefit cost | $ 216 | $ 455 | $ 432 | $ 910 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Apr. 23, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 2.4 | $ 2.2 | $ 5 | $ 4.4 | |
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total unrecognized compensation expenses | $ 23.9 | $ 23.9 | |||
Weighted average period expected to be recognized | 3 years 8 months 12 days | ||||
Two Thousand Nineteen Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant (in shares) | 2.8 | ||||
Minimum | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock granted, vesting period | 1 year | ||||
Maximum | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock granted, vesting period | 10 years |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Number of Restricted Stock | |
Outstanding, at beginning of period (in shares) | shares | 1,320 |
Granted (in shares) | shares | 56 |
Forfeited (in shares) | shares | (47) |
Vested (in shares) | shares | (105) |
Outstanding, at end of period (in shares) | shares | 1,224 |
Weighted Average Grant Date Fair Value | |
Outstanding, as of beginning of period (in dollars per share) | $ / shares | $ 24.94 |
Granted (in dollars per share) | $ / shares | 34.04 |
Forfeited (in dollars per share) | $ / shares | 23.03 |
Vested (in dollars per share) | $ / shares | 24.72 |
Outstanding, as of end of period (in dollars per share) | $ / shares | $ 25.44 |
Total Intrinsic Value of Restricted Stock Vested | |
Vested | $ | $ 3,521 |
Derivative Instrument and Hed_3
Derivative Instrument and Hedging Activity - Narrative (Details) - Designated as Hedging Instrument - Interest Rate Swap - USD ($) | May 31, 2021 | May 31, 2020 | May 31, 2019 | May 31, 2018 | May 31, 2017 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative rate | 1.81% | ||||
Derivative, notional amount | $ 65,000,000 | $ 65,000,000 | $ 65,000,000 | ||
Scenario, Forecast | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative, notional amount | $ 25,000,000 | $ 25,000,000 |
Derivative Instrument and Hed_4
Derivative Instrument and Hedging Activity - Accumulated Derivative Instrument Gain (Loss) Activity (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance at beginning of period | $ 168,331 |
Balance at end of period | 214,856 |
Accumulated Derivative Instrument Gain | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance at beginning of period | 900 |
Net change associated with current period hedging transactions | (1,015) |
Balance at end of period | $ (115) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Estimated Fair Values (Details) - Recurring Basis - Interest Rate Swap - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instrument | $ (115) | |
Interest rate swap derivative instrument | $ 900 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instrument | 0 | |
Interest rate swap derivative instrument | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instrument | (115) | |
Interest rate swap derivative instrument | 900 | |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instrument | $ 0 | |
Interest rate swap derivative instrument | $ 0 |
Uncategorized Items - kfrc-2019
Label | Element | Value |
Accounting Standards Update 2014-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (179,000) |
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (179,000) |