Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 19, 2020 | Jun. 30, 2019 | |
Cover page. | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 753,609,332 | ||
Entity Common Stock, Shares Outstanding | 22,712,952 | ||
Documents Incorporated by Reference | Document Parts Into Which Portions of Proxy Statement for the Annual Meeting of Shareholders scheduled to be held April 28, 2020 (“Proxy Statement”) Part III | ||
Amendment Flag | false | ||
Entity Central Index Key | 0000930420 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | |||
Revenue | $ 1,347,387 | $ 1,303,937 | $ 1,253,646 |
Direct costs | 952,349 | 917,450 | 878,049 |
Gross profit | 395,038 | 386,487 | 375,597 |
Selling, general and administrative expenses | 314,167 | 307,250 | 308,313 |
Depreciation and amortization | 6,050 | 6,836 | 7,266 |
Income from operations | 74,821 | 72,401 | 60,018 |
Other expense, net | 3,425 | 4,521 | 5,100 |
Income from continuing operations, before income taxes | 71,396 | 67,880 | 54,918 |
Income tax expense | 16,830 | 17,004 | 25,324 |
Income from continuing operations | 54,566 | 50,876 | 29,594 |
Income from discontinued operations, net of tax | 76,296 | 7,104 | 3,691 |
Net income | 130,862 | 57,980 | 33,285 |
Other comprehensive (loss) income: | |||
Defined benefit pension plans, net of tax | (2,183) | 881 | (373) |
Change in fair value of interest rate swap, net of tax | (807) | ||
Change in fair value of interest rate swap, net of tax | 315 | 289 | |
Comprehensive income | $ 127,872 | $ 59,176 | $ 33,201 |
Earnings per share - basic: | |||
Continuing operations (in dollars per share) | $ 2.35 | $ 2.05 | $ 1.17 |
Discontinued operations (in dollars per share) | 3.29 | 0.29 | 0.15 |
Earnings per share – basic (in dollars per share) | 5.64 | 2.34 | 1.32 |
Earnings per share - diluted: | |||
Continuing operations (in dollars per share) | 2.29 | 2.02 | 1.16 |
Discontinued operations (in dollars per share) | 3.21 | 0.28 | 0.14 |
Earnings per share – diluted (in dollars per share) | $ 5.50 | $ 2.30 | $ 1.30 |
Weighted average shares outstanding - basic (in shares) | 23,186 | 24,738 | 25,222 |
Weighted average shares outstanding – diluted (in shares) | 23,772 | 25,251 | 25,586 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 19,831 | $ 112 |
Trade receivables, net of allowances of $2,078 and $2,800, respectively | 217,929 | 210,559 |
Prepaid expenses and other current assets | 7,475 | 8,018 |
Current assets held for sale | 0 | 29,773 |
Total current assets | 245,235 | 248,462 |
Fixed assets, net | 29,975 | 34,322 |
Other assets, net | 72,838 | 36,664 |
Deferred tax assets, net | 8,037 | 7,147 |
Goodwill | 25,040 | 25,040 |
Noncurrent assets held for sale | 0 | 28,273 |
Total assets | 381,125 | 379,908 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 33,232 | 32,542 |
Accrued payroll costs | 44,001 | 39,384 |
Current portion of operating lease liabilities | 5,685 | |
Other current liabilities | 1,168 | 1,616 |
Income taxes payable | 878 | 4,553 |
Current liabilities held for sale | 0 | 12,263 |
Total current liabilities | 84,964 | 90,358 |
Long-term debt – credit facility | 65,000 | 71,800 |
Other long-term liabilities | 63,898 | 44,868 |
Noncurrent liabilities held for sale | 0 | 4,551 |
Total liabilities | 213,862 | 211,577 |
Commitments and contingencies (Note 17) | ||
Stockholders’ equity: | ||
Preferred stock, $0.01 par; 15,000 shares authorized, none issued and outstanding | 0 | 0 |
Common stock, $0.01 par; 250,000 shares authorized, 72,202 and 71,856 issued and outstanding, respectively | 722 | 719 |
Additional paid-in capital | 459,545 | 447,337 |
Accumulated other comprehensive (loss) income | (1,526) | 1,296 |
Retained earnings | 350,545 | 237,308 |
Treasury stock, at cost; 49,277 and 45,822 shares, respectively | (642,023) | (518,329) |
Total stockholders’ equity | 167,263 | 168,331 |
Total liabilities and stockholders’ equity | $ 381,125 | $ 379,908 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 2,078 | $ 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) | 72,202,000 | 71,856,000 |
Common stock, shares outstanding (in shares) | 72,202,000 | 71,856,000 |
Treasury stock, shares (in shares) | 49,277,000 | 45,822,000 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS 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 year (in shares) at Dec. 31, 2016 | 71,268 | 44,469 | ||||
Balance at beginning of year at Dec. 31, 2016 | $ 121,736 | $ 713 | $ 428,212 | $ 184 | $ 174,967 | $ (482,340) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 33,285 | 33,285 | ||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures (in shares) | 221 | |||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures | 0 | $ 2 | 494 | (496) | ||
Exercise of stock options (in shares) | 5 | |||||
Exercise of stock options | 72 | 72 | ||||
Stock-based compensation expense | $ 7,600 | 7,600 | ||||
Employee stock purchase plan (in shares) | (25) | (25) | ||||
Employee stock purchase plan | $ 522 | 247 | $ 275 | |||
Dividends | (12,144) | (12,144) | ||||
Defined benefit pension plans, net of tax | (373) | (373) | ||||
Change in fair value of interest rate swap, net of tax | 289 | 289 | ||||
Repurchases of common stock (in shares) | 723 | |||||
Repurchases of common stock | (17,010) | $ (17,010) | ||||
Shares at end of year (in shares) at Dec. 31, 2017 | 71,494 | 45,167 | ||||
Balance at end of year at Dec. 31, 2017 | 134,277 | $ 715 | 437,394 | 100 | 195,143 | $ (499,075) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 57,980 | 57,980 | ||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures (in shares) | 357 | |||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures | 0 | $ 4 | 762 | (766) | ||
Exercise of stock options (in shares) | 5 | 1 | ||||
Exercise of stock options | 0 | 46 | $ (46) | |||
Stock-based compensation expense | $ 8,797 | 8,797 | ||||
Employee stock purchase plan (in shares) | (19) | (19) | ||||
Employee stock purchase plan | $ 549 | 338 | $ 211 | |||
Dividends | (14,870) | (14,870) | ||||
Defined benefit pension plans, net of tax | 881 | 881 | ||||
Change in fair value of interest rate swap, net of tax | 315 | 315 | ||||
Repurchases of common stock (in shares) | 673 | |||||
Repurchases of common stock | (19,419) | $ (19,419) | ||||
Shares at end of year (in shares) at Dec. 31, 2018 | 71,856 | 45,822 | ||||
Balance at end of year at Dec. 31, 2018 | 168,331 | $ 719 | 447,337 | 1,296 | 237,308 | $ (518,329) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 130,862 | 130,862 | ||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures (in shares) | 346 | |||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures | 0 | $ 3 | 846 | (849) | ||
Stock-based compensation expense | $ 11,007 | 11,007 | ||||
Employee stock purchase plan (in shares) | (17) | (17) | ||||
Employee stock purchase plan | $ 558 | 355 | $ 203 | |||
Dividends | (16,608) | (16,608) | ||||
Defined benefit pension plans, net of tax | (2,183) | (2,183) | ||||
Change in fair value of interest rate swap, net of tax | (807) | (807) | ||||
Repurchases of common stock (in shares) | 3,472 | |||||
Repurchases of common stock | (123,897) | $ (123,897) | ||||
Shares at end of year (in shares) at Dec. 31, 2019 | 72,202 | 49,277 | ||||
Balance at end of year at Dec. 31, 2019 | $ 167,263 | $ 722 | $ 459,545 | $ (1,526) | $ 350,545 | $ (642,023) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Dividends declared per share (in dollars per share) | $ 0.72 | $ 0.60 | $ 0.48 |
Accounting Standards Update 2014-09 | |||
Tax effect of new accounting standard | $ 63 | ||
Accumulated Other Comprehensive Income (Loss) | |||
Defined benefit pension plans, tax expense (benefit) | 314 | $ (207) | |
Interest rate swap, tax expense | $ 107 | $ 189 | |
Interest rate swap, tax benefit | $ 272 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | ||
Cash flows from operating activities: | ||||
Net income | $ 130,862 | $ 57,980 | $ 33,285 | |
Adjustments to reconcile net income to cash provided by operating activities: | ||||
Gain on sale of assets held for sale | (79,318) | 0 | ||
Gain on sale of assets held for sale | (3,148) | |||
Deferred income tax provision, net | (49) | 989 | 12,243 | |
Provision for bad debts | 1,209 | 1,820 | 1,031 | |
Depreciation and amortization | 6,481 | 8,265 | 8,508 | |
Stock-based compensation expense | 9,912 | 8,797 | 7,600 | |
Defined benefit pension plans expense | 862 | 1,821 | 937 | |
Loss on deferred compensation plan investments, net | 245 | 563 | 510 | |
Loss on disposal or impairment of assets | 1,084 | 38 | 196 | |
Noncash lease expense | 6,282 | |||
Loss on equity method investment | 831 | 0 | 0 | |
Contingent consideration liability remeasurement | 459 | 0 | 565 | |
Other | 352 | 350 | 692 | |
(Increase) decrease in operating assets | ||||
Trade receivables, net | (5,360) | (10,851) | (20,535) | |
Other assets | (9,639) | 5,741 | (8,971) | |
Increase (decrease) in operating liabilities | ||||
Accrued payroll costs | 4,567 | 1,350 | 1,954 | |
Other liabilities | (2,163) | 10,860 | (5,528) | |
Cash provided by operating activities | 66,617 | 87,723 | 29,339 | |
Cash flows from investing activities: | ||||
Capital expenditures | (10,359) | (5,170) | (5,846) | |
Equity method investment | (9,000) | 0 | 0 | |
Net proceeds from the sale of assets held for sale | 122,544 | 1,000 | 1,000 | |
Cash provided by (used in) investing activities | 103,185 | (4,170) | (4,846) | |
Cash flows from financing activities: | ||||
Proceeds from credit facility | 80,100 | 450,400 | 1,038,593 | |
Payments on credit facility | (86,900) | (495,123) | (1,033,617) | |
Payments on other financing arrangements | (1,720) | (2,039) | (2,148) | |
Repurchases of common stock | (124,453) | (22,187) | (14,622) | |
Cash dividends | (16,608) | (14,871) | (12,144) | |
Payment of contingent consideration liability | (477) | 0 | 0 | |
Other | (25) | 0 | (1,658) | |
Cash used in financing activities | (150,083) | (83,820) | (25,596) | |
Change in cash and cash equivalents | 19,719 | (267) | (1,103) | |
Cash and cash equivalents at beginning of year | 112 | 379 | 1,482 | |
Cash and cash equivalents at end of year | 19,831 | 112 | 379 | |
Cash paid during the year for: | ||||
Income taxes | [1] | 24,935 | 13,442 | 24,330 |
Operating lease liabilities | 8,186 | |||
Interest, net | 1,480 | 3,814 | 3,518 | |
Non-Cash Financing and Investing Transactions: | ||||
ROU assets obtained from operating leases | 9,205 | |||
Employee stock purchase plan | 558 | 549 | 522 | |
Unsettled repurchases of common stock | 0 | 556 | 898 | |
Receivable for sale of Kforce Global Solutions, Inc.'s assets | $ 0 | 0 | $ 1,979 | |
Proceeds from income tax refunds | $ 6,800 | |||
[1] | During the year ended December 31, 2018, cash provided by operating activities included the receipt of an income tax refund in the amount of $6.8 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements have been prepared in conformity with GAAP and the rules of the SEC. Certain prior year amounts have been reclassified to conform with the current period presentation for amounts related to discontinued operations. Refer to Note 2 - “Discontinued Operations” for further information. Principles of Consolidation The 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 the impairment of goodwill, other long-lived assets and the equity method investment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. Revenue Recognition All of our revenue and trade receivables are generated from contracts with customers and substantially all of our revenues are derived from U.S. domestic operations. Revenue is recognized when control of the promised services is transferred to our customers at an amount that reflects the consideration to which we expect to be entitled to in exchange for those services. Revenue is recorded net of sales or other transaction taxes collected from clients and remitted to taxing authorities. For substantially all of our revenue transactions, we have determined that the gross reporting of revenues as a principal versus net as an agent is the appropriate accounting treatment because Kforce: (i) is primarily responsible for fulfilling the promise to provide the specified service to the customer, (ii) has discretion in selecting and assigning the temporary workers to particular jobs and establishing the bill rate, and (iii) bears the risk and rewards of the transaction, including credit risk if the customer fails to pay for services performed. Flex Revenue Flex revenue is recognized over time as temporary staffing services are provided by our consultants at the contractually established bill rates, net of applicable variable consideration. Reimbursements of travel and out-of-pocket expenses ("billable expenses") are also recorded within Flex revenue when incurred and the equivalent amount of expense is recorded in Direct costs in the Consolidated Statements of Operations and Comprehensive Income. We recognize revenue in the amount of consideration to which we have the right to invoice when it corresponds directly to the services transferred to the customer satisfied over time. Direct Hire Revenue Direct Hire revenue is recognized at the agreed upon rate at the point in time when the performance obligation is considered complete. Our policy requires the following criteria to be met in order for the performance obligation to be considered complete: (i) the candidate accepted the position; (ii) the candidate resigned from their current employer; and (iii) the agreed upon start date falls within the following month. Since the client has accepted the candidate and can direct the use of and obtains the significant risk and rewards of the placement, we consider this point as the transfer of control to our client. Variable Consideration Transaction prices for Flex revenue include variable consideration, such as customer rebates and discounts. Management evaluates the facts and circumstances of each contract to estimate the variable consideration using the most likely amount method which utilizes management’s expectation of the volume of services to be provided over the applicable period. Direct Hire revenue is recorded net of a fallout reserve. Direct Hire fallouts occur when a candidate does not remain employed with the client through the respective contingency period (typically 90 days or less). Management uses the expected value method to estimate the fallout reserve based on a combination of past experience and current trends. Variable consideration reduces revenue, but may be constrained to the extent that it is probable a significant reversal will not occur. Payment Terms Our payment terms and conditions vary by arrangement, although terms are typically less than 90 days. Generally, the timing between the satisfaction of the performance obligation and the payment is not significant and we do not currently have any significant financing components. Unsatisfied Performance Obligations We do not disclose the value of unsatisfied performance obligations for contracts if either the original expected length is one year or less or if revenue is recognized at the amount to which we have the right to invoice for services performed. Contract Balances We record accounts receivable when our right to consideration becomes unconditional and services have been performed. Other than our trade receivable balance, we do not have any material contract assets as of December 31, 2019 and 2018. We record a contract liability when we receive consideration from a customer prior to transferring services to the customer. We recognize the contract liability as revenue after we have transferred control of the goods or services to the customer. Contract liabilities are recorded within Accounts payable and other accrued liabilities if expected to be recognized in less than one year and Other long-term liabilities, if over one year, in the Consolidated Balance Sheets. We do not have any material contract liabilities as of December 31, 2019 and 2018. Cost of Services Direct costs are composed of all related costs of employment for consultants, including compensation, payroll taxes, certain fringe benefits and subcontractor costs. Direct costs exclude depreciation and amortization expense, which is presented on a separate line in the accompanying Consolidated Statements of Operations and Comprehensive Income. Associate and field management compensation, payroll taxes and fringe benefits are included in SG&A along with other customary costs such as administrative and corporate costs. Commissions Our associates make placements and earn commissions as a percentage of revenue or gross profit pursuant to a commission plan. The amount of associate commissions paid increases as volume increases. Commissions are accrued at an amount equal to the percent of total expected commissions payable to total revenue or gross profit for the commission-plan period, as applicable. We generally expense sales commissions and any other incremental costs of obtaining a contract as incurred because the amortization period is typically less than one year. Stock-Based Compensation Stock-based compensation is measured using the grant-date fair value of the award of equity instruments. The expense is recognized over the requisite service period and forfeitures are recognized as incurred. Excess tax benefits or deficiencies of deductions attributable to employees’ vesting of restricted stock are reflected in Income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. Income Taxes Income taxes are recorded using the asset and liability approach for deferred tax assets and liabilities and the expected future tax consequences of differences between carrying amounts and the tax basis of assets and liabilities. A valuation allowance is recorded unless it is more likely than not that the deferred tax asset can be utilized to offset future taxes. Management evaluates tax positions taken or expected to be taken in our tax returns and records a liability for uncertain tax positions. We recognize tax benefits from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes. The Company recognizes interest and penalties related to uncertain tax positions in Income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. 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. Trade Receivables and Related Reserves Trade receivables are recorded net of allowance for doubtful accounts. The allowance for doubtful accounts is determined based on factors including recent write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of trade receivables among clients and higher-risk sectors, and the current state of the U.S. economy. Trade receivables are written off after all reasonable collection efforts have been exhausted. Trade accounts receivable reserves as a percentage of gross trade receivables was approximately 1.0% at December 31, 2019 and 2018. Fixed Assets Fixed assets are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the expected terms of the related leases. Upon sale or disposition of our fixed assets, the cost and accumulated depreciation are removed and any resulting gain or loss, net of proceeds, is reflected within SG&A in the Consolidated Statements of Operations and Comprehensive Income. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of the asset group to the future undiscounted net cash flows expected to be generated by those assets. If an analysis indicates the carrying amount of these long-lived assets exceeds the fair value, an impairment loss is recognized to reduce the carrying amount to its fair market value, as determined based on the present value of projected future cash flows. Equity Method Investment In June 2019, we entered into a joint venture whereby Kforce has a 50% noncontrolling interest in WorkLLama, LLC ("WorkLLama"). WorkLLama has and continues to develop the technology for a SaaS platform focused on consultant engagement and referral technologies, which we believe will enhance our opportunities to efficiently and effectively identify and place consultants on assignment. Our noncontrolling interest in WorkLLama, a variable interest entity, is accounted for as an equity method investment. Under the equity method, our carrying value is at cost and adjusted for our proportionate share of earnings or losses. There are no basis differences between our carrying value and the underlying equity in net assets that would result in adjustments to our proportionate share of earnings or losses. We recorded a loss on equity method investment of $0.8 million during the year ended December 31, 2019. The balance of the investment in WorkLLama of $8.2 million was included in Other assets, net in the Consolidated Balance Sheet at December 31, 2019. Under the joint venture operating agreement for WorkLLama, Kforce is obligated to make additional cash contributions subsequent to the initial contribution, contingent on WorkLLama's achievement of certain operational and financial milestones, which are centered around the market acceptance of their technologies and success with internal operating and strategic objectives. Management evaluated the probability of WorkLLama’s achievement of these milestones and recorded the estimated future contributions as part of the initial investment. Under the operating agreement, our maximum potential capital contributions was $22.5 million. During the year ended December 31, 2019, we contributed $9.0 million of capital contributions. We review the equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. An impairment loss is recognized in the event that an other-than-temporary decline in fair value of an investment occurs. Management’s estimate of fair value of an investment is based on the income approach and/or market approach. At December 31, 2019, management determined there was no need to test for impairment for our equity method investment as no events or changes in circumstances indicated that the carrying amount of the investments may not be recoverable. Goodwill Management has determined that the reporting units for the goodwill analysis is consistent with our reporting segments. We evaluate goodwill for impairment either through a qualitative or quantitative approach annually, or more frequently if an event occurs or circumstances change that indicate the carrying value of a reporting unit may not be recoverable. If we perform a quantitative assessment that indicates the carrying amount of a reporting unit exceeds its fair market value, an impairment loss is recognized to reduce the carrying amount to its fair market value. Kforce determines the fair market value of each reporting unit based on a weighting of the present value of projected future cash flows (the “income approach”) and the use of comparative market approaches under both the guideline company method and guideline transaction method (collectively, the “market approach”). Fair market value using the income approach is based on estimated future cash flows on a discounted basis. The market approach compares each reporting unit to other comparable companies based on valuation multiples derived from operational and transactional data to arrive at a fair value. Factors requiring significant judgment include, among others, the assumptions related to discount rates, forecasted operating results, long-term growth rates, the determination of comparable companies, and market multiples. Changes in economic and operating conditions or changes in Kforce’s business strategies that occur after the annual impairment analysis may impact these assumptions and result in a future goodwill impairment charge, which could be material to our consolidated financial statements. Operating Leases Kforce leases property for our field offices as well as certain office equipment, which limits our exposure to risks related to ownership. We determine if a contract or arrangement meets the definition of a lease at inception. We elected not to separate lease and non-lease components when determining the consideration in the contract. Right-of-use (“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 lease agreements do not contain any material residual value guarantees or restrictive covenants. ROU assets for operating leases, net of amortization, are recorded within Other assets, net and operating lease liabilities are recorded within current liabilities if expected to be recognized in less than one year and in Other long-term liabilities, if over one year, in the 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 Consolidated Statement of Cash Flows. Our lease terms typically range from three We elected the short-term practical expedient for leases with an initial term of 12 months or less and do 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. Capitalized Software Kforce purchases, develops and implements software to enhance the performance of our technology infrastructure. Direct internal costs, such as payroll and payroll-related costs, and external costs incurred during the development stage are capitalized and classified as capitalized software. Capitalized software development costs and the associated accumulated amortization are included in Other assets, net in the accompanying Consolidated Balance Sheets. Amortization expense is computed using the straight-line method over the estimated useful lives of the software, which range from one Workers’ Compensation Kforce retains the economic burden for the first $250 thousand per occurrence in workers’ compensation claims except in states that require participation in state-operated insurance funds. Workers’ compensation includes ongoing health care and indemnity coverage for claims and may be paid over numerous years following the date of injury. Workers’ compensation expense includes: insurance premiums paid; claims administration fees charged by Kforce’s workers’ compensation administrator; premiums paid to state-operated insurance funds; and an estimate for Kforce’s liability for IBNR claims and ongoing development of existing claims. Management estimates its workers’ compensation liability based upon historical claims experience, actuarially-determined loss development factors, and qualitative considerations such as claims management activities. 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. Legal Costs Legal costs incurred in connection with loss contingencies are expensed as incurred. Defined Benefit Pension Plan Because our defined benefit pension plan is unfunded as of December 31, 2019, actuarial gains and losses may arise as a result of the actuarial experience of the plan, as well as changes in actuarial assumptions in measuring the associated obligation as of year-end, or an interim date if any re-measurement is necessary. The net after-tax impact of unrecognized actuarial gains and losses related to our defined benefit pension plan is recorded in Accumulated other comprehensive (loss) income in our consolidated financial statements. The unfunded status of the defined benefit pension plan is recorded as a liability in our Consolidated Balance Sheets. Amortization of a net unrecognized gain or loss in accumulated other comprehensive (loss) income is included as a component of net periodic benefit cost if, as of the beginning of the year, that net gain or loss exceeds 10% of the projected benefit obligation. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active plan participants. The interest cost component of the net periodic benefit cost is included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Income. 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 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 years ended December 31, 2019, 2018 and 2017, there were 586 thousand, 513 thousand, and 364 thousand common stock equivalents, respectively, included in the diluted WASO. For the years ended December 31, 2019, 2018 and 2017, there were 1 thousand, nil and 527 thousand, respectively, of anti-dilutive common stock equivalents. Treasury Stock The Board may authorize share repurchases of our common stock. Shares repurchased under Board authorizations are held in treasury for general corporate purposes. Treasury shares are accounted for under the cost method and reported as a reduction of stockholders’ equity in the accompanying consolidated financial statements. Derivative Instrument Our interest rate swap derivative instrument has been designated as a cash flow hedge and is recorded at fair value on the Consolidated Balance Sheets. The effective portion of the gain or loss on the derivative instrument is recorded as a component of Accumulated other comprehensive (loss) income, net of tax, and reclassified into earnings when the hedged item affects earnings and into the line item of the hedged item. Any ineffective portion of the gain or loss is recognized immediately into Other expense, net on the Consolidated Statements of Operations and Comprehensive Income. Cash flows from the derivative instrument are classified in the Consolidated Statements of Cash Flows in the same category as the hedged item. Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy uses a framework which requires categorizing assets and liabilities into one of three levels based on the inputs used in valuing the asset or liability. • Level 1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities. • Level 2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3 inputs include unobservable inputs that are supported by little, infrequent or no market activity and reflect management’s own assumptions about inputs used in pricing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair value measurements include, but are not limited to: the impairment of goodwill, other long-lived assets and the equity method investment; stock-based compensation and the interest rate swap. The carrying values of cash and cash equivalents, trade receivables, other current assets and accounts payable and other accrued liabilities approximate fair value because of the short-term nature of these instruments. Using available market information and appropriate valuation methodologies, management has determined the estimated fair value measurements; however, considerable judgment is required in interpreting data to develop the estimates of fair value. 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. Historically, these implementation costs were recorded as amortization expense in the income statement, capital expenditures within investing cash flows and 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 SG&A, operating cash flows and Prepaid expenses and other current assets if expected to be recognized within one year and Other assets, net, if over one year. As of and for the year ended December 31, 2019, these costs were not material to our operations. In February 2018, the FASB issued authoritative guidance regarding the reclassification of certain stranded tax effects from accumulated other comprehensive (loss) 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 (loss) income to Retained earnings in the consolidated financial statements 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 14 - “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. We recorded approximately $17.6 million of 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 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. We determined that no cumulative effect adjustment to retained earnings was necessary upon adoption. Finance leases are not significant to our operations as of and for the year ended December 31, 2019. Refer to Note 11 - "Operating Leases" for 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. In June 2016, the FASB issued authoritative guidance on accounting for credit losses on financial instruments, including trade receivables, and has since issued subsequent updates to the initial guidance. The amended guidance requires the application of a current expected credit loss model, a new impairment model, which measures expected credit losses based on relevant information, including historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for annual periods beginning after December 15, 2019 and requires adoption using a modified retrospective approach. We finalized the changes to our allowance methodology for our trade receivables as a result of the implementation of this standard, and we expect the cumulative impact of adopting this standard will be immaterial to our financial statements. The cumulative adjustment will be recorded as a reduction to the opening balance of retained earnings with the offset to the allowance for doubtful accounts on January 1, 2020. |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations During 2019, management committed to a plan to divest the 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 KGS, our federal government solutions business, and TFX, our federal government product business. On April 1, 2019, Kforce completed the sale of all of 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. Our 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 for KGS management triggered by a change in control of KGS. On June 7, 2019, Kforce completed the sale of all of the issued and outstanding stock of TFX to an unaffiliated third party for a cash purchase price of $18.4 million less a post-closing working capital adjustment of $0.7 million. Our gain on the sale of TFX, net of transaction costs, was $7.0 million. 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 year ended December 31, 2019. Since the divestitures, 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): YEARS ENDED DECEMBER 31, 2019 2018 2017 Revenue $ 27,737 $ 114,416 $ 104,294 Direct costs 19,494 82,295 71,835 Gross profit 8,243 32,121 32,459 Selling, general and administrative expenses 6,988 21,862 22,861 Depreciation and amortization 307 995 989 Income from discontinued operations 948 9,264 8,609 Gain on sale of discontinued operations 79,318 — — Other (expense) income, net (436) 9 567 Income from discontinued operations, before income taxes 79,830 9,273 9,176 Income tax expense 3,534 2,169 5,485 Income from discontinued operations, net of tax $ 76,296 $ 7,104 $ 3,691 The effective tax rates for discontinued operations, including the gain on sale of discontinued operations, were 4.4%, 23.4%, and 59.8% for the years ended December 31, 2019, 2018 and 2017, respectively. For the year ended December 31, 2019, there was minimal income tax obligation for the sale of KGS due to the efficient tax structure of the transaction. The GS effective tax rate for 2018 was positively impacted by the TCJA. The GS effective tax rate for 2017 was unfavorably impacted by the revaluation of our net deferred tax assets as a result of the TCJA. The following table summarizes the assets and liabilities held for sale for the GS segment as of December 31, 2018 (in thousands): DECEMBER 31, 2018 ASSETS 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 Consolidated Statements of Cash Flows are presented on a combined basis (continuing operations and discontinued operations). The following table provides information for the total operating and investing cash flows for the GS segment (in thousands): YEARS ENDED DECEMBER 31, Cash Provided by (Used in) 2019 2018 2017 GS Operating Activities $ 4,547 $ 10,937 $ 1,098 GS Investing Activities $ 117,798 $ (927) $ (776) |
Reportable Segments
Reportable Segments | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Kforce’s reportable segments are Tech and FA. Historically, and for the year ended December 31, 2019, Kforce has generated only sales and gross profit information on a segment basis. We do not report total assets or income from continuing operations separately by segment as our operations are largely combined. The following table provides information concerning the operations of our segments for the years ended December 31 (in thousands): Tech FA Total 2019 Revenue $ 1,057,859 $ 289,528 $ 1,347,387 Gross profit $ 292,980 $ 102,058 $ 395,038 Operating and other expenses 323,642 Income from continuing operations, before income taxes $ 71,396 2018 Revenue $ 990,089 $ 313,848 $ 1,303,937 Gross profit $ 277,388 $ 109,099 $ 386,487 Operating and other expenses 318,607 Income from continuing operations, before income taxes $ 67,880 2017 Revenue $ 907,511 $ 346,135 $ 1,253,646 Gross profit $ 257,118 $ 118,479 $ 375,597 Operating and other expenses 320,679 Income from continuing operations, before income taxes $ 54,918 |
Disaggregation of Revenue
Disaggregation of Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue The following table provides information about disaggregated revenue by segment and revenue type for the years ended December 31 (in thousands): Tech FA Total 2019 Flex revenue $ 1,037,380 $ 262,307 $ 1,299,687 Direct Hire revenue 20,479 27,221 47,700 Total Revenue $ 1,057,859 $ 289,528 $ 1,347,387 2018 Flex revenue $ 971,310 $ 286,939 $ 1,258,249 Direct Hire revenue 18,779 26,909 45,688 Total Revenue $ 990,089 $ 313,848 $ 1,303,937 2017 Flex revenue $ 887,675 $ 318,294 $ 1,205,969 Direct Hire revenue 19,836 27,841 47,677 Total Revenue $ 907,511 $ 346,135 $ 1,253,646 |
Fixed Assets
Fixed Assets | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | Fixed Assets, Net The following table presents major classifications of fixed assets and related useful lives (in thousands): DECEMBER 31, USEFUL LIFE 2019 2018 Land $ 5,892 $ 5,892 Building and improvements 1-40 years 25,990 25,755 Furniture and equipment 1-20 years 8,760 14,938 Computer equipment 1-5 years 6,446 5,944 Leasehold improvements 1-7 years 9,482 10,484 Total fixed assets 56,570 63,013 Less accumulated depreciation (26,595) (28,691) Total Fixed assets, net $ 29,975 $ 34,322 Depreciation expense was $4.9 million, $5.7 million and $6.4 million during the years ended December 31, 2019, 2018 and 2017, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes from continuing operations consists of the following (in thousands): YEARS ENDED DECEMBER 31, 2019 2018 2017 Current tax expense: Federal $ 12,074 $ 12,032 $ 14,296 State 5,057 5,369 3,004 Deferred tax expense (1) (301) (397) 8,024 Total Income tax expense $ 16,830 $ 17,004 $ 25,324 (1) The TCJA was enacted in December 2017, which reduced the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018. As a result, we revalued our net deferred income tax assets and recorded $3.6 million of additional Income tax expense for continuing operations in the Consolidated Statement of Operations and Comprehensive Income for the year ended December 31, 2017. The provision for income taxes from continuing operations shown above varied from the statutory federal income tax rate for those periods as follows: YEARS ENDED DECEMBER 31, 2019 2018 2017 Federal income tax rate 21.0 % 21.0 % 35.0 % State income taxes, net of Federal tax effect 5.8 6.1 4.4 Non-deductible compensation and meals and entertainment 1.6 1.7 0.8 Tax credits (2.1) (2.5) (1.9) Tax benefit from restricted stock vesting (1.6) (0.8) (1.2) Valuation allowance on foreign tax credit — — 2.5 Enactment of TCJA — — 5.4 Other (1.1) (0.4) 1.1 Effective tax rate 23.6 % 25.1 % 46.1 % The 2019 effective tax rate was favorably impacted primarily by a greater tax benefit from the vesting of restricted stock. The 2018 effective tax rate was favorably impacted by the TCJA. The 2017 effective tax rate was unfavorably impacted due to the revaluation of our net deferred tax assets as a result of TCJA. Refer to Note 2 - "Discontinued Operations" for further discussion of the effective tax rate for the GS segment. Deferred tax assets and liabilities are composed of the following (in thousands): DECEMBER 31, 2019 2018 Deferred tax assets: Accounts receivable reserves $ 542 $ 738 Accrued liabilities 1,161 1,274 Deferred compensation obligation 4,715 5,545 Stock-based compensation 739 723 Operating lease liabilities 5,497 — Pension and post-retirement benefit plans 3,745 3,471 Foreign tax credit — 1,630 Other 160 224 Deferred tax assets 16,559 13,605 Deferred tax liabilities: Prepaid expenses (459) (159) Fixed assets (965) (1,174) Goodwill (1,889) (3,123) ROU assets for operating leases (4,767) — Other (328) (255) Deferred tax liabilities (8,408) (4,711) Valuation allowance (114) (1,747) Total Deferred tax assets, net $ 8,037 $ 7,147 At December 31, 2019, Kforce had approximately $1.0 million of state tax net operating losses (“NOLs”) which will be carried forward to be offset against future state taxable income. The state tax NOLs expire in varying amounts through 2038. In evaluating the realizability of Kforce’s deferred tax assets, management assesses whether it is more likely than not that some portion, or all, of the deferred tax assets, will be realized. Management considers, among other things, the ability to generate future taxable income (including reversals of deferred tax liabilities) during the periods in which the related temporary differences will become deductible. The valuation allowance, as of December 31, 2018, includes a foreign tax credit. In 2019, management elected to treat foreign taxes paid as a deduction on our tax return and, accordingly, reversed the deferred tax asset and corresponding valuation allowance during the year ended December 31, 2019. Kforce is periodically subject to IRS audits, as well as state and other local income tax audits for various tax years. During 2018, the IRS commenced an audit for the tax year ended December 31, 2016. In 2019, the auditor notified the Company that a no-change report was submitted and we are waiting for the IRS to finalize the audit. Although Kforce has not experienced any material liabilities in the past due to income tax audits, Kforce can make no assurances concerning any future income tax audits. Uncertain Income Tax Positions The following table presents a reconciliation of the beginning and ending balance of unrecognized tax benefits for the years ended (in thousands): DECEMBER 31, 2019 2018 2017 Unrecognized tax benefits, beginning $ 906 $ 1,127 $ 1,115 Additions for prior year tax positions — 41 50 Additions for current year tax positions — — 29 Lapse of statute of limitations (497) (248) (67) Reductions for tax positions of prior years — (14) — Settlements (26) — — Unrecognized tax benefits, ending $ 383 $ 906 $ 1,127 As of December 31, 2019, the amount of unrecognized tax benefit that would impact the effective tax rate, if recognized, is $0.4 million. Kforce does not expect any significant changes to its uncertain tax positions in the next 12 months. |
Other Assets, Net
Other Assets, Net | 12 Months Ended |
Dec. 31, 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): DECEMBER 31, 2019 2018 Assets held in Rabbi Trust $ 35,413 $ 29,134 ROU assets for operating leases, net 18,344 — Equity method investment 8,169 — Capitalized software, net (1) 8,759 4,828 Deferred loan costs, net 855 1,182 Interest rate swap derivative instrument — 900 Other non-current assets 1,298 620 Total Other assets, net $ 72,838 $ 36,664 (1) Accumulated amortization of capitalized software was $34.2 million and $34.1 million as of December 31, 2019 and 2018, respectively. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill [Abstract] | |
Goodwill | Goodwill The following table presents the gross amount and accumulated impairment losses for each of our reporting units as of December 31, 2019, 2018 and 2017 (in thousands): Technology Finance and Total Goodwill, gross amount $ 156,391 $ 19,766 $ 176,157 Accumulated impairment losses (139,357) (11,760) (151,117) Goodwill, carrying value $ 17,034 $ 8,006 $ 25,040 There was no impairment expense related to goodwill for each of the years ended December 31, 2019, 2018 and 2017. Throughout 2019, we considered the qualitative and quantitative factors associated with each of our reporting units and determined that there was no indication that the carrying values of any of our reporting units were likely impaired. Management performed its annual impairment assessment of the carrying value of goodwill as of December 31, 2019 and 2018. For each of our reporting units, we assessed qualitative factors to determine whether the existence of events or circumstances indicated that it was more likely than not that the fair value of the reporting units was less than its carrying amount. Based on the qualitative assessments, management determined that it was not more likely than not that the fair values of the reporting units were less than the carrying values at December 31, 2019 and 2018. A deterioration in any of the assumptions could result in an impairment charge in the future. |
Current Liabilities
Current Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Current Liabilities | Current Liabilities The following table provides information on certain current liabilities (in thousands): DECEMBER 31, 2019 2018 Accounts payable $ 20,267 $ 18,793 Accrued liabilities 12,965 13,749 Total Accounts payable and other accrued liabilities $ 33,232 $ 32,542 Payroll and benefits $ 38,035 $ 34,768 Payroll taxes 992 920 Health insurance liabilities 3,907 2,680 Workers’ compensation liabilities 1,067 1,016 Total Accrued payroll costs $ 44,001 $ 39,384 Our accounts payable balance includes vendor and independent contractor payables. Our accrued liabilities balance includes the current portion of our deferred compensation plans liability, contract liabilities from contracts with customers (such as customer rebates), and other accrued liabilities. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): DECEMBER 31, 2019 2018 Deferred compensation plan $ 30,361 $ 25,672 Supplemental executive retirement plan 18,080 15,035 Operating lease liabilities 14,627 — Interest rate swap derivative instrument 179 — Other long-term liabilities 651 4,161 Total Other long-term liabilities $ 63,898 $ 44,868 |
Operating Leases
Operating Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The following table presents weighted-average terms for our operating leases for the year ended December 31, 2019 (in thousands): Weighted-average discount rate 3.8 % Weighted-average remaining lease term 4.5 years The following table presents operating lease expense included in SG&A for the year ended December 31, 2019 (in thousands): Lease Cost Operating lease expense $ 6,847 Variable lease costs 1,689 Short-term lease expense 792 Sublease income (445) Total operating lease expense $ 8,883 The following table presents the maturities of operating lease liabilities as of December 31, 2019 (in thousands): 2020 $ 6,338 2021 4,999 2022 3,304 2023 2,925 2024 2,012 Thereafter 2,595 Total maturities of operating lease liabilities 22,173 Less: imputed interest 1,861 Total operating lease liabilities $ 20,312 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 | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans 401(k) Savings Plans The Firm maintains various qualified defined contribution 401(k) retirement savings plans for eligible employees. Assets of these plans are held in trust for the sole benefit of employees and/or their beneficiaries. Employer matching contributions are discretionary and are funded annually as approved by the Board. Kforce accrued matching 401(k) contributions for continuing operations of $1.4 million and $1.5 million as of December 31, 2019 and 2018, respectively. Employee Stock Purchase Plan Kforce’s employee stock purchase plan allows all eligible employees to enroll each quarter to purchase Kforce’s common stock at a 5% discount from its market price on the last day of the quarter. Kforce issued 17 thousand, 19 thousand, and 25 thousand shares of common stock at an average purchase price of $32.79, $28.93, and $20.65 per share during the years ended December 31, 2019, 2018 and 2017, respectively. All shares purchased under the employee stock purchase plan were settled using Kforce’s treasury stock. Deferred Compensation Plans The Firm maintains various non-qualified deferred compensation plans, pursuant to which eligible management and highly compensated key employees, as defined by IRS regulations, may elect to defer all or part of their compensation to later years. These amounts are classified in Accounts payable and other accrued liabilities if payable within the next year or in Other long-term liabilities if payable after the next year, upon retirement or termination of employment in the accompanying Consolidated Balance Sheets. At December 31, 2019 and 2018, amounts related to the deferred compensation plans included in Accounts payable and other accrued liabilities were $3.6 million and $1.3 million, respectively, and $30.4 million and $25.7 million was included in Other long-term liabilities at December 31, 2019 and 2018, respectively, in the Consolidated Balance Sheets. For the years ended December 31, 2019, 2018 and 2017, we recognized compensation expense for continuing operations for the plans of $0.4 million, $0.8 million and $0.6 million, respectively. Kforce maintains a Rabbi Trust and holds life insurance policies on certain individuals to assist in the funding of the deferred compensation liability. If necessary, employee distributions are funded through proceeds from the sale of assets held within the Rabbi Trust. The balance of the assets held within the Rabbi Trust, including the cash surrender value of the Company-owned life insurance policies, was $35.4 million and $29.1 million as of December 31, 2019 and 2018, respectively, and is recorded in Other assets, net in the accompanying Consolidated Balance Sheets. As of December 31, 2019, the life insurance policies had a cumulative face value of $213.1 million. Supplemental Executive Retirement Plan Kforce maintains a SERP for the benefit of two executive officers. Normal retirement age under the SERP is defined as age 65; however, certain conditions allow for early retirement as early as age 55 or upon a change in control. Both participants are fully vested in accordance with the plan provisions. The SERP will be funded entirely by Kforce, and benefits are taxable to the covered executive officer upon receipt and will be deductible by Kforce when paid. Benefits payable under the SERP upon the occurrence of a qualifying distribution event, as defined, are targeted at 45% of the covered executive officers’ average salary and bonus, as defined, from the three years in which the covered executive officer earned the highest salary and bonus during the last 10 years of employment, which is subject to adjustment for retirement prior to the normal retirement age and the participant’s vesting percentage. The benefits under the SERP are reduced for a participant that has not reached age 62 with 10 years of service or age 55 with 25 years of service with a percentage reduction up to the normal retirement age. Benefits under the SERP are based on the lump sum present value but may be paid over the life of the covered executive officer or 10-year annuity, as elected by the covered executive officer upon commencement of participation in the SERP. None of the benefits earned pursuant to the SERP are attributable to services provided prior to the effective date of the plan. For purposes of the measurement of the benefit obligation as of December 31, 2019, Kforce has assumed that both participants will elect to take the lump sum present value option based on historical trends. Actuarial Assumptions Due to the SERP being unfunded as of December 31, 2019 and 2018, it is not necessary for Kforce to determine the expected long-term rate of return on plan assets. The following table presents the weighted-average actuarial assumptions used to determine the actuarial present value of projected benefit obligations at: DECEMBER 31, 2019 2018 Discount rate 2.75 % 4.00 % Rate of future compensation increase 2.90 % 2.90 % The following table presents the weighted-average actuarial assumptions used to determine net periodic benefit cost for the years ended: DECEMBER 31, 2019 2018 2017 Discount rate 4.00 % 3.25 % 4.00 % Rate of future compensation increase 2.90 % 2.90 % 3.60 % The discount rate was determined using the Moody’s Aa long-term corporate bond yield as of the measurement date with a maturity commensurate with the expected payout of the SERP obligation. This rate is also compared against the Citigroup Pension Discount Curve and Liability Index to ensure the rate used is reasonable and may be adjusted accordingly. This index is widely used by companies throughout the U.S. and is considered to be one of the preferred standards for establishing a discount rate. The assumed rate of future compensation increases is based on a combination of factors, including the historical compensation increases and future target compensation levels for its covered executive officers, taking into account the covered executive officers’ assumed retirement date. The periodic benefit cost is based on actuarial assumptions that are reviewed on an annual basis; however, management monitors these assumptions on a periodic basis to ensure that they accurately reflect current expectations of the cost of providing retirement benefits. Net Periodic Benefit Cost The following table presents the components of net periodic benefit cost for the years ended (in thousands): DECEMBER 31, 2019 2018 2017 Service cost $ 261 $ 1,353 $ 319 Interest cost 601 468 537 Net periodic benefit cost $ 862 $ 1,821 $ 856 The service cost is recorded in SG&A and the interest cost is recorded in Other expense, net in the accompanying Consolidated Statements of Operations and Comprehensive Income. Changes in Benefit Obligation The following table presents the changes in the projected benefit obligation for the years ended (in thousands): DECEMBER 31, 2019 2018 Projected benefit obligation, beginning $ 15,035 $ 14,409 Service cost 261 1,353 Interest cost 601 468 Actuarial experience and changes in actuarial assumptions 2,183 (1,195) Projected benefit obligation, ending $ 18,080 $ 15,035 There were no payments made under the SERP during the years ended December 31, 2019 and 2018, respectively. The projected benefit obligation is recorded in Other long-term liabilities in the accompanying Consolidated Balance Sheets. The accumulated benefit obligation is the actuarial present value of all benefits attributed to past service, excluding future salary increases. The accumulated benefit obligation as of December 31, 2019 and 2018 was $18.1 million and $15.0 million, respectively. Contributions There is no requirement for Kforce to fund the SERP and, as a result, no contributions have been made to the SERP through the year ended December 31, 2019. Kforce does not currently anticipate funding the SERP during the year ending December 31, 2020. Estimated Future Benefit Payments Undiscounted projected benefit payments attributed to the SERP, which reflect the anticipated future service of participants, are expected to be paid as follows during the years ended December 31 (in thousands): Projected Annual 2020 $ — 2021 14,347 2022 — 2023 — 2024 — 2025-2030 8,944 The estimated future benefit amounts and timing of these payments were determined using assumed retirement dates for the participants, among other assumptions, as of December 31, 2019; however, no specific plans or timelines have been established for or by these participants and the assumptions are subject to change, which could impact the future amounts and timing of payments. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility On May 25, 2017, the Firm entered into a credit agreement with Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Securities, LLC, as lead arranger and bookrunner, Bank of America, N.A., as syndication agent, Regions Bank and BMO Harris Bank, N.A., as co-documentation agents, and the lenders referred to therein. Under the Credit Facility, the Firm has a maximum borrowing capacity of $300.0 million, which may, subject to certain conditions and the participation of the lenders, be increased up to an aggregate additional amount of $150.0 million, which is available to the Firm in the form of revolving credit loans, swingline loans, and letters of credit. Letters of credit and swingline loans under the Credit Facility are subject to sublimits of $10.0 million. The maturity date of the Credit Facility is May 25, 2022. Borrowings under the Credit Facility are secured by substantially all of the tangible and intangible assets of the Firm, excluding the Firm’s corporate headquarters and certain other designated collateral. Revolving credit loans under the Credit Facility bears interest at a rate equal to: (a) the Base Rate (as described below) plus the Applicable Margin (as described below); or (b) the LIBOR Rate plus the Applicable Margin. Swingline loans under the Credit Facility bears interest at a rate equal to the Base Rate plus the Applicable Margin. The Base Rate is the highest of: (i) the Wells Fargo Bank, National Association prime rate; (ii) the federal funds rate plus 0.50%; or (iii) one-month LIBOR plus 1.00%, and the LIBOR Rate is reserve-adjusted LIBOR for the applicable interest period, but not less than zero. The Applicable Margin is based on the Firm’s total leverage ratio. The Applicable Margin for Base Rate loans ranges from 0.25% to 0.75% and the Applicable Margin for LIBOR Rate loans ranges from 1.25% to 1.75%. The Firm will pay a quarterly non-refundable commitment fee equal to the Applicable Margin on the average daily unused portion of the Commitment (swingline loans do not constitute usage for this purpose). The Applicable Margin for the commitment fee is based on the Firm’s total leverage ratio and ranges between 0.20% and 0.35%. The Firm is subject to certain affirmative and negative covenants including (but not limited to), the maintenance of a fixed charge coverage ratio of no less than 1.25 to 1.00 and the maintenance of a total leverage ratio of no greater than 3.25 to 1.00. The numerator in the fixed charge coverage ratio is defined pursuant to the Credit Facility as earnings before interest expense, income taxes, depreciation and amortization, stock-based compensation expense and other permitted items pursuant to our Credit Facility, less cash paid for capital expenditures, income taxes and dividends. The denominator is defined as Kforce’s fixed charges such as interest expense and principal payments paid or payable on outstanding debt other than borrowings under the Credit Facility. The total leverage ratio is defined pursuant to the Credit Facility as total indebtedness divided by Consolidated EBITDA. Our ability to make distributions or repurchases of equity securities could be limited if an event of default has occurred. Furthermore, our ability to repurchase equity securities could be limited if: (a) the total leverage ratio is greater than 2.75 to 1.00; and (b) the Firm’s availability, inclusive of unrestricted cash, is less than $25.0 million. At December 31, 2019, Kforce was not limited in making distributions and executing repurchases of our equity securities. As of December 31, 2019 and 2018, $65.0 million and $71.8 million was outstanding on the Credit Facility, respectively. Kforce had $3.4 million and $3.2 million of outstanding letters of credit at December 31, 2019 and 2018, respectively, which pursuant to the Credit Facility, reduces the availability. |
Derivative Instrument and Hedgi
Derivative Instrument and Hedging Activity | 12 Months Ended |
Dec. 31, 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 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, which will decrease to $25.0 million at May 2020 through maturity. The Swap has been designated as a cash flow hedge and was effective as of December 31, 2019. The change in the fair value of the Swap is recorded as a component of Accumulated other comprehensive (loss) income in the consolidated financial statements. The following table sets forth the activity in the accumulated derivative instrument gain (loss) for the year ended December 31, 2019 (in thousands): Accumulated derivative instrument gain, beginning of year $ 900 Net change associated with current period hedging transactions (1,079) Accumulated derivative instrument loss, end of year $ (179) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Swap is measured at fair value using readily observable inputs, such as the LIBOR interest rate, which are considered to be Level 2 inputs. Refer to Note 14 - “Derivative Instrument and Hedging Activity” in the Notes to the Consolidated Financial Statements, included in this report 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, other long-lived assets and the equity method investment. 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 at December 31, 2019 and 2018 were as follows (in thousands): Assets/(Liabilities) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant At December 31, 2019 Recurring basis: Interest rate swap derivative instrument $ (179) $ — $ (179) $ — At December 31, 2018 Recurring basis: Interest rate swap derivative instrument $ 900 $ — $ 900 $ — |
Stock Incentive Plans
Stock Incentive Plans | 12 Months Ended |
Dec. 31, 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 years ended December 31, 2019, 2018 and 2017, stock-based compensation expense from continuing operations was $9.8 million, $8.5 million, and $7.4 million, respectively. The related tax benefit for the years ended December 31, 2019, 2018 and 2017 was $2.3 million, $2.1 million, and $2.9 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. The LTI restricted stock granted during the year ended December 31, 2019, will vest ratably over a period between three 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 containing 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 was 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 year ended December 31, 2019 (in thousands, except per share amounts): Number of Weighted-Average Total Intrinsic Outstanding at December 31, 2018 (1) 1,320 $ 24.94 Granted 399 $ 38.37 Forfeited/Canceled (53) $ 24.68 Vested (2) (486) $ 24.89 $ 18,813 Outstanding at December 31, 2019 1,180 $ 29.51 (1) The weighted-average grant date fair value at December 31, 2018, has been updated to correct an immaterial reporting error in our 2018 Annual Report on Form 10-K. (2) The increase in shares vested during the year ended December 31, 2019, was due to the acceleration of stock-based compensation expense for KGS management triggered by a change in control of KGS. The weighted-average grant date fair value of restricted stock granted was $38.37, $29.72 and $24.03 during the years ended December 31, 2019, 2018 and 2017, respectively. The total intrinsic value of restricted stock vested was $18.8 million, $11.9 million and $13.7 million during the years ended December 31, 2019, 2018 and 2017, respectively. The fair market value of restricted stock is determined based on the closing stock price of Kforce’s common stock at the date of grant, and is amortized on a straight-line basis over the requisite service period. As of December 31, 2019, total unrecognized stock-based compensation expense related to restricted stock was $32.0 million, which will be recognized over a weighted-average remaining period of 3.5 years. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Purchase Commitments Kforce has various commitments to purchase goods and services in the ordinary course of business. These commitments are primarily related to software and online application licenses and hosting. As of December 31, 2019, these purchase commitments amounted to approximately $10.5 million and are expected to be paid as follows: $7.3 million in 2020; $3.0 million in 2021 and $0.2 million in 2022. Letters of Credit Kforce provides letters of credit to certain vendors in lieu of cash deposits. At December 31, 2019, Kforce had letters of credit outstanding for operating lease and insurance coverage deposits totaling $3.4 million. Litigation We are involved in legal proceedings, claims and administrative matters that arise in the ordinary course of business. We have made accruals with respect to certain of these matters, where appropriate, that are reflected in our consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, we have not yet determined that a loss is probable or the amount of loss cannot be reasonably estimated. While the ultimate outcome of the matters cannot be determined, we currently do not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on our financial position, results of operations or cash flows. The outcome of any litigation is inherently uncertain, however, and if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to liability that could have a material adverse effect on our financial position, results of operations or cash flows. Kforce maintains liability insurance in amounts and with such coverage and deductibles as management believes is reasonable. The principal liability risks that Kforce insures against are workers’ compensation, personal injury, bodily injury, property damage, directors’ and officers’ liability, errors and omissions, cyber liability, employment practices liability and fidelity losses. There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities. On August 23, 2019, Kforce Inc. was served with a complaint, as amended, brought in the U.S. District Court, Middle District of Florida, Tampa Division. Maurcus Smith, Alvin Hodge and David Kortright, et al. v. Kforce Inc., Case No.: 8:19-cv-02068-CEH-CPT. The plaintiffs purport to bring claims on their own behalf and on behalf of a putative class of consumers/applicants who were the subject of consumer reports used for employment purposes for alleged violations of the Fair Credit Reporting Act of 1970, as amended, (“FCRA”), 15 U.S.C. § 1681 et seq. based upon the defendant’s purported failure to provide stand-alone FCRA disclosures and obtain valid authorizations. The plaintiffs seek statutory damages, punitive damages, costs, attorney’s fees and other relief under the FCRA. On February 10, 2020, the parties reached a preliminary settlement of the case, which is subject to approval by the Court, however, there can be no assurance that the Court will approve the preliminary settlement. We believe that this matter is unlikely to have a material adverse effect on our business, consolidated financial position, results of operations, or cash flows. On December 17, 2019, Kforce Inc., et al. was served with a complaint brought in Superior Court of the State of California, Alameda County. Kathleen Wahrer, et al. v. Kforce Inc., et al., Case No.: RG19047269. The former employee purports to bring a representative action on her own behalf and on behalf of other current and former aggrieved employees pursuant to Private Attorneys General Act (“PAGA”) alleging violations of the California Labor Code (“Labor Code”). The purported Labor Code violations include failure to provide and pay proper wages for meal and rest periods, failure to properly calculate and pay minimum and overtime wages, failure to provide compliant wage statements, failure to timely pay wages during employment and upon termination, and failure to reimburse business expenses. The plaintiff seeks civil penalties, interest, attorneys’ fees and costs under the Labor Code. At this stage in the litigation it is not feasible to predict the outcome of this matter or reasonably estimate a range of loss, should a loss occur, from this proceeding. Employment Agreements Kforce has employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a six three |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited)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. The following table provides quarterly information for the years ended December 31, 2019 and 2018 (in thousands, except per share amounts): THREE MONTHS ENDED MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 2019 Revenue $ 326,738 $ 338,861 $ 345,558 $ 336,230 Gross profit 93,176 101,026 102,811 98,025 Income from continuing operations 7,974 16,076 15,907 14,609 Income (loss) from discontinued operations, net of tax 18,881 58,783 (967) (401) Net income $ 26,855 $ 74,859 $ 14,940 $ 14,208 Earnings per share – basic, continuing operations $ 0.33 $ 0.67 $ 0.70 $ 0.68 Earnings per share – diluted, continuing operations $ 0.32 $ 0.66 $ 0.68 $ 0.66 Earnings per share-basic $ 1.10 $ 3.13 $ 0.66 $ 0.66 Earnings per share-diluted $ 1.07 $ 3.06 $ 0.64 $ 0.64 2018 Revenue $ 317,441 $ 329,535 $ 326,584 $ 330,377 Gross profit 92,509 100,220 96,045 97,713 Income from continuing operations 7,957 15,173 14,156 13,590 Income from discontinued operations, net of tax 1,218 1,099 2,021 2,766 Net income $ 9,175 $ 16,272 $ 16,177 $ 16,356 Earnings per share – basic, continuing operations $ 0.32 $ 0.61 $ 0.57 $ 0.55 Earnings per share – diluted, continuing operations $ 0.32 $ 0.60 $ 0.56 $ 0.54 Earnings per share-basic $ 0.37 $ 0.66 $ 0.65 $ 0.66 Earnings per share-diluted $ 0.37 $ 0.65 $ 0.64 $ 0.65 During the second quarter of 2019, in connection with the disposition of the GS segment, income from discontinued operations included a gain on the sale of discontinued operations, net of transactions costs, of $80.0 million. There were post-closing working capital adjustments included in the loss from discontinued operations during the third and fourth quarter of 2019 of $0.4 million and $0.3 million, respectively. Refer to Note 2 - “Discontinued Operations” for a more detailed discussion. |
Schedule II Valuation and Quali
Schedule II Valuation and Qualifying Accounts and Reserves Supplemental Schedule | 12 Months Ended |
Dec. 31, 2019 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II Valuation and Qualifying Accounts and Reserves Supplemental Schedule | SCHEDULE II KFORCE INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES SUPPLEMENTAL SCHEDULE (IN THOUSANDS) COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E DESCRIPTION BALANCE AT CHARGED TO CHARGED DEDUCTIONS BALANCE AT Accounts receivable reserves (1) 2017 $ 2,066 1,155 (91) (797) $ 2,333 2018 $ 1,858 1,874 — (932) $ 2,800 2019 $ 2,800 1,255 — (1,977) $ 2,078 Deferred tax assets valuation allowance 2017 $ 85 1,648 — — $ 1,733 2018 $ 1,733 14 — — $ 1,747 2019 $ 1,747 — — (1,633) $ 114 (1) The beginning balance for 2018 was adjusted by $475 thousand due to the adoption of the revenue recognition accounting standard and the reclassification of the Direct Hire fallouts as a contract liability effective January 1, 2018. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The consolidated financial statements have been prepared in conformity with GAAP and the rules of the SEC. |
Reclassification | Certain prior year amounts have been reclassified to conform with the current period presentation for amounts related to discontinued operations. Refer to Note 2 - “Discontinued Operations” for further information. |
Principles of Consolidation | The 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 the impairment of goodwill, other long-lived assets and the equity method investment. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. |
Revenue Recognition | All of our revenue and trade receivables are generated from contracts with customers and substantially all of our revenues are derived from U.S. domestic operations. Revenue is recognized when control of the promised services is transferred to our customers at an amount that reflects the consideration to which we expect to be entitled to in exchange for those services. Revenue is recorded net of sales or other transaction taxes collected from clients and remitted to taxing authorities. For substantially all of our revenue transactions, we have determined that the gross reporting of revenues as a principal versus net as an agent is the appropriate accounting treatment because Kforce: (i) is primarily responsible for fulfilling the promise to provide the specified service to the customer, (ii) has discretion in selecting and assigning the temporary workers to particular jobs and establishing the bill rate, and (iii) bears the risk and rewards of the transaction, including credit risk if the customer fails to pay for services performed. Flex Revenue Flex revenue is recognized over time as temporary staffing services are provided by our consultants at the contractually established bill rates, net of applicable variable consideration. Reimbursements of travel and out-of-pocket expenses ("billable expenses") are also recorded within Flex revenue when incurred and the equivalent amount of expense is recorded in Direct costs in the Consolidated Statements of Operations and Comprehensive Income. We recognize revenue in the amount of consideration to which we have the right to invoice when it corresponds directly to the services transferred to the customer satisfied over time. Direct Hire Revenue Direct Hire revenue is recognized at the agreed upon rate at the point in time when the performance obligation is considered complete. Our policy requires the following criteria to be met in order for the performance obligation to be considered complete: (i) the candidate accepted the position; (ii) the candidate resigned from their current employer; and (iii) the agreed upon start date falls within the following month. Since the client has accepted the candidate and can direct the use of and obtains the significant risk and rewards of the placement, we consider this point as the transfer of control to our client. Variable Consideration Transaction prices for Flex revenue include variable consideration, such as customer rebates and discounts. Management evaluates the facts and circumstances of each contract to estimate the variable consideration using the most likely amount method which utilizes management’s expectation of the volume of services to be provided over the applicable period. Direct Hire revenue is recorded net of a fallout reserve. Direct Hire fallouts occur when a candidate does not remain employed with the client through the respective contingency period (typically 90 days or less). Management uses the expected value method to estimate the fallout reserve based on a combination of past experience and current trends. Variable consideration reduces revenue, but may be constrained to the extent that it is probable a significant reversal will not occur. Payment Terms Our payment terms and conditions vary by arrangement, although terms are typically less than 90 days. Generally, the timing between the satisfaction of the performance obligation and the payment is not significant and we do not currently have any significant financing components. Unsatisfied Performance Obligations We do not disclose the value of unsatisfied performance obligations for contracts if either the original expected length is one year or less or if revenue is recognized at the amount to which we have the right to invoice for services performed. Contract Balances We record accounts receivable when our right to consideration becomes unconditional and services have been performed. Other than our trade receivable balance, we do not have any material contract assets as of December 31, 2019 and 2018. We record a contract liability when we receive consideration from a customer prior to transferring services to the customer. We recognize the contract liability as revenue after we have transferred control of the goods or services to the customer. Contract liabilities are recorded within Accounts payable and other accrued liabilities if expected to be recognized in less than one year and Other long-term liabilities, if over one year, in the Consolidated Balance Sheets. We do not have any material contract liabilities as of December 31, 2019 and 2018. Cost of Services Direct costs are composed of all related costs of employment for consultants, including compensation, payroll taxes, certain fringe benefits and subcontractor costs. Direct costs exclude depreciation and amortization expense, which is presented on a separate line in the accompanying Consolidated Statements of Operations and Comprehensive Income. Associate and field management compensation, payroll taxes and fringe benefits are included in SG&A along with other customary costs such as administrative and corporate costs. |
Commissions | Our associates make placements and earn commissions as a percentage of revenue or gross profit pursuant to a commission plan. The amount of associate commissions paid increases as volume increases. Commissions are accrued at an amount equal to the percent of total expected commissions payable to total revenue or gross profit for the commission-plan period, as applicable. We generally expense sales commissions and any other incremental costs of obtaining a contract as incurred because the amortization period is typically less than one year. |
Stock-Based Compensation | Stock-based compensation is measured using the grant-date fair value of the award of equity instruments. The expense is recognized over the requisite service period and forfeitures are recognized as incurred. Excess tax benefits or deficiencies of deductions attributable to employees’ vesting of restricted stock are reflected in Income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
Income Taxes | Income taxes are recorded using the asset and liability approach for deferred tax assets and liabilities and the expected future tax consequences of differences between carrying amounts and the tax basis of assets and liabilities. A valuation allowance is recorded unless it is more likely than not that the deferred tax asset can be utilized to offset future taxes. Management evaluates tax positions taken or expected to be taken in our tax returns and records a liability for uncertain tax positions. We recognize tax benefits from uncertain tax positions when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes. The Company recognizes interest and penalties related to uncertain tax positions in Income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
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. |
Trade Receivables and Related Reserves | Trade receivables are recorded net of allowance for doubtful accounts. The allowance for doubtful accounts is determined based on factors including recent write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of trade receivables among clients and higher-risk sectors, and the current state of the U.S. economy. Trade receivables are written off after all reasonable collection efforts have been exhausted. |
Fixed Assets | Fixed assets are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the expected terms of the related leases. Upon sale or disposition of our fixed assets, the cost and accumulated depreciation are removed and any resulting gain or loss, net of proceeds, is reflected within SG&A in the Consolidated Statements of Operations and Comprehensive Income. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of the asset group to the future undiscounted net cash flows expected to be generated by those assets. If an analysis indicates the carrying amount of these long-lived assets exceeds the fair value, an impairment loss is recognized to reduce the carrying amount to its fair market value, as determined based on the present value of projected future cash flows. |
Equity Method Investment | In June 2019, we entered into a joint venture whereby Kforce has a 50% noncontrolling interest in WorkLLama, LLC ("WorkLLama"). WorkLLama has and continues to develop the technology for a SaaS platform focused on consultant engagement and referral technologies, which we believe will enhance our opportunities to efficiently and effectively identify and place consultants on assignment. Our noncontrolling interest in WorkLLama, a variable interest entity, is accounted for as an equity method investment. Under the equity method, our carrying value is at cost and adjusted for our proportionate share of earnings or losses. There are no basis differences between our carrying value and the underlying equity in net assets that would result in adjustments to our proportionate share of earnings or losses. We recorded a loss on equity method investment of $0.8 million during the year ended December 31, 2019. The balance of the investment in WorkLLama of $8.2 million was included in Other assets, net in the Consolidated Balance Sheet at December 31, 2019. Under the joint venture operating agreement for WorkLLama, Kforce is obligated to make additional cash contributions subsequent to the initial contribution, contingent on WorkLLama's achievement of certain operational and financial milestones, which are centered around the market acceptance of their technologies and success with internal operating and strategic objectives. Management evaluated the probability of WorkLLama’s achievement of these milestones and recorded the estimated future contributions as part of the initial investment. Under the operating agreement, our maximum potential capital contributions was $22.5 million. During the year ended December 31, 2019, we contributed $9.0 million of capital contributions. We review the equity method investment for impairment whenever events or changes in circumstances indicate that the carrying amount of the investment may not be recoverable. An impairment loss is recognized in the event that an other-than-temporary decline in fair value of an investment occurs. Management’s estimate of fair value of an investment is based on the income approach and/or market approach. At December 31, 2019, management determined there was no need to test for impairment for our equity method investment as no events or changes in circumstances indicated that the carrying amount of the investments may not be recoverable. |
Goodwill | Management has determined that the reporting units for the goodwill analysis is consistent with our reporting segments. We evaluate goodwill for impairment either through a qualitative or quantitative approach annually, or more frequently if an event occurs or circumstances change that indicate the carrying value of a reporting unit may not be recoverable. If we perform a quantitative assessment that indicates the carrying amount of a reporting unit exceeds its fair market value, an impairment loss is recognized to reduce the carrying amount to its fair market value. Kforce determines the fair market value of each reporting unit based on a weighting of the present value of projected future cash flows (the “income approach”) and the use of comparative market approaches under both the guideline company method and guideline transaction method (collectively, the “market approach”). Fair market value using the income approach is based on estimated future cash flows on a discounted basis. The market approach compares each reporting unit to other comparable companies based on valuation multiples derived from operational and transactional data to arrive at a fair value. Factors requiring significant judgment include, among others, the assumptions related to discount rates, forecasted operating results, long-term growth rates, the determination of comparable companies, and market multiples. Changes in economic and operating conditions or changes in Kforce’s business strategies that occur after the annual impairment analysis may impact these assumptions and result in a future goodwill impairment charge, which could be material to our consolidated financial statements. |
Operating Leases | Kforce leases property for our field offices as well as certain office equipment, which limits our exposure to risks related to ownership. We determine if a contract or arrangement meets the definition of a lease at inception. We elected not to separate lease and non-lease components when determining the consideration in the contract. Right-of-use (“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 lease agreements do not contain any material residual value guarantees or restrictive covenants. ROU assets for operating leases, net of amortization, are recorded within Other assets, net and operating lease liabilities are recorded within current liabilities if expected to be recognized in less than one year and in Other long-term liabilities, if over one year, in the 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 Consolidated Statement of Cash Flows. Our lease terms typically range from three We elected the short-term practical expedient for leases with an initial term of 12 months or less and do 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. |
Capitalized Software | Kforce purchases, develops and implements software to enhance the performance of our technology infrastructure. Direct internal costs, such as payroll and payroll-related costs, and external costs incurred during the development stage are capitalized and classified as capitalized software. Capitalized software development costs and the associated accumulated amortization are included in Other assets, net in the accompanying Consolidated Balance Sheets. Amortization expense is computed using the straight-line method over the estimated useful lives of the software, which range from one |
Workers' Compensation | Kforce retains the economic burden for the first $250 thousand per occurrence in workers’ compensation claims except in states that require participation in state-operated insurance funds. Workers’ compensation includes ongoing health care and indemnity coverage for claims and may be paid over numerous years following the date of injury. Workers’ compensation expense includes: insurance premiums paid; claims administration fees charged by Kforce’s workers’ compensation administrator; premiums paid to state-operated insurance funds; and an estimate for Kforce’s liability for IBNR claims and ongoing development of existing claims. Management estimates its workers’ compensation liability based upon historical claims experience, actuarially-determined loss development factors, and qualitative considerations such as claims management activities. |
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. |
Legal Costs | Legal costs incurred in connection with loss contingencies are expensed as incurred. |
Defined Benefit Pension Plan | Because our defined benefit pension plan is unfunded as of December 31, 2019, actuarial gains and losses may arise as a result of the actuarial experience of the plan, as well as changes in actuarial assumptions in measuring the associated obligation as of year-end, or an interim date if any re-measurement is necessary. The net after-tax impact of unrecognized actuarial gains and losses related to our defined benefit pension plan is recorded in Accumulated other comprehensive (loss) income in our consolidated financial statements. The unfunded status of the defined benefit pension plan is recorded as a liability in our Consolidated Balance Sheets. Amortization of a net unrecognized gain or loss in accumulated other comprehensive (loss) income is included as a component of net periodic benefit cost if, as of the beginning of the year, that net gain or loss exceeds 10% of the projected benefit obligation. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active plan participants. The interest cost component of the net periodic benefit cost is included in Other expense, net in the Consolidated Statements of Operations and Comprehensive Income. |
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 unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. |
Treasury Stock | The Board may authorize share repurchases of our common stock. Shares repurchased under Board authorizations are held in treasury for general corporate purposes. Treasury shares are accounted for under the cost method and reported as a reduction of stockholders’ equity in the accompanying consolidated financial statements. |
Derivative Instrument | Our interest rate swap derivative instrument has been designated as a cash flow hedge and is recorded at fair value on the Consolidated Balance Sheets. The effective portion of the gain or loss on the derivative instrument is recorded as a component of Accumulated other comprehensive (loss) income, net of tax, and reclassified into earnings when the hedged item affects earnings and into the line item of the hedged item. Any ineffective portion of the gain or loss is recognized immediately into Other expense, net on the Consolidated Statements of Operations and Comprehensive Income. Cash flows from the derivative instrument are classified in the Consolidated Statements of Cash Flows in the same category as the hedged item. |
Fair Value Measurements | Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy uses a framework which requires categorizing assets and liabilities into one of three levels based on the inputs used in valuing the asset or liability. • Level 1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities. • Level 2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3 inputs include unobservable inputs that are supported by little, infrequent or no market activity and reflect management’s own assumptions about inputs used in pricing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. Fair value measurements include, but are not limited to: the impairment of goodwill, other long-lived assets and the equity method investment; stock-based compensation and the interest rate swap. The carrying values of cash and cash equivalents, trade receivables, other current assets and accounts payable and other accrued liabilities approximate fair value because of the short-term nature of these instruments. Using available market information and appropriate valuation methodologies, management has determined the estimated fair value measurements; however, considerable judgment is required in interpreting data to develop the estimates of fair value. |
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. Historically, these implementation costs were recorded as amortization expense in the income statement, capital expenditures within investing cash flows and 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 SG&A, operating cash flows and Prepaid expenses and other current assets if expected to be recognized within one year and Other assets, net, if over one year. As of and for the year ended December 31, 2019, these costs were not material to our operations. In February 2018, the FASB issued authoritative guidance regarding the reclassification of certain stranded tax effects from accumulated other comprehensive (loss) 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 (loss) income to Retained earnings in the consolidated financial statements 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 14 - “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. We recorded approximately $17.6 million of 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 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. We determined that no cumulative effect adjustment to retained earnings was necessary upon adoption. Finance leases are not significant to our operations as of and for the year ended December 31, 2019. Refer to Note 11 - "Operating Leases" for 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. In June 2016, the FASB issued authoritative guidance on accounting for credit losses on financial instruments, including trade receivables, and has since issued subsequent updates to the initial guidance. The amended guidance requires the application of a current expected credit loss model, a new impairment model, which measures expected credit losses based on relevant information, including historical experience, current conditions and reasonable and supportable forecasts. The guidance is effective for annual periods beginning after December 15, 2019 and requires adoption using a modified retrospective approach. We finalized the changes to our allowance methodology for our trade receivables as a result of the implementation of this standard, and we expect the cumulative impact of adopting this standard will be immaterial to our financial statements. The cumulative adjustment will be recorded as a reduction to the opening balance of retained earnings with the offset to the allowance for doubtful accounts on January 1, 2020. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Discontinued Operations | 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): YEARS ENDED DECEMBER 31, 2019 2018 2017 Revenue $ 27,737 $ 114,416 $ 104,294 Direct costs 19,494 82,295 71,835 Gross profit 8,243 32,121 32,459 Selling, general and administrative expenses 6,988 21,862 22,861 Depreciation and amortization 307 995 989 Income from discontinued operations 948 9,264 8,609 Gain on sale of discontinued operations 79,318 — — Other (expense) income, net (436) 9 567 Income from discontinued operations, before income taxes 79,830 9,273 9,176 Income tax expense 3,534 2,169 5,485 Income from discontinued operations, net of tax $ 76,296 $ 7,104 $ 3,691 The following table summarizes the assets and liabilities held for sale for the GS segment as of December 31, 2018 (in thousands): DECEMBER 31, 2018 ASSETS 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 Consolidated Statements of Cash Flows are presented on a combined basis (continuing operations and discontinued operations). The following table provides information for the total operating and investing cash flows for the GS segment (in thousands): YEARS ENDED DECEMBER 31, Cash Provided by (Used in) 2019 2018 2017 GS Operating Activities $ 4,547 $ 10,937 $ 1,098 GS Investing Activities $ 117,798 $ (927) $ (776) |
Reportable Segments (Tables)
Reportable Segments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Operations of Segments | The following table provides information concerning the operations of our segments for the years ended December 31 (in thousands): Tech FA Total 2019 Revenue $ 1,057,859 $ 289,528 $ 1,347,387 Gross profit $ 292,980 $ 102,058 $ 395,038 Operating and other expenses 323,642 Income from continuing operations, before income taxes $ 71,396 2018 Revenue $ 990,089 $ 313,848 $ 1,303,937 Gross profit $ 277,388 $ 109,099 $ 386,487 Operating and other expenses 318,607 Income from continuing operations, before income taxes $ 67,880 2017 Revenue $ 907,511 $ 346,135 $ 1,253,646 Gross profit $ 257,118 $ 118,479 $ 375,597 Operating and other expenses 320,679 Income from continuing operations, before income taxes $ 54,918 |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table provides information about disaggregated revenue by segment and revenue type for the years ended December 31 (in thousands): Tech FA Total 2019 Flex revenue $ 1,037,380 $ 262,307 $ 1,299,687 Direct Hire revenue 20,479 27,221 47,700 Total Revenue $ 1,057,859 $ 289,528 $ 1,347,387 2018 Flex revenue $ 971,310 $ 286,939 $ 1,258,249 Direct Hire revenue 18,779 26,909 45,688 Total Revenue $ 990,089 $ 313,848 $ 1,303,937 2017 Flex revenue $ 887,675 $ 318,294 $ 1,205,969 Direct Hire revenue 19,836 27,841 47,677 Total Revenue $ 907,511 $ 346,135 $ 1,253,646 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Major Classifications of Fixed Assets and Related Useful Lives | The following table presents major classifications of fixed assets and related useful lives (in thousands): DECEMBER 31, USEFUL LIFE 2019 2018 Land $ 5,892 $ 5,892 Building and improvements 1-40 years 25,990 25,755 Furniture and equipment 1-20 years 8,760 14,938 Computer equipment 1-5 years 6,446 5,944 Leasehold improvements 1-7 years 9,482 10,484 Total fixed assets 56,570 63,013 Less accumulated depreciation (26,595) (28,691) Total Fixed assets, net $ 29,975 $ 34,322 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Expense (Benefit), Continuing Operations | The provision for income taxes from continuing operations consists of the following (in thousands): YEARS ENDED DECEMBER 31, 2019 2018 2017 Current tax expense: Federal $ 12,074 $ 12,032 $ 14,296 State 5,057 5,369 3,004 Deferred tax expense (1) (301) (397) 8,024 Total Income tax expense $ 16,830 $ 17,004 $ 25,324 (1) The TCJA was enacted in December 2017, which reduced the U.S. federal corporate tax rate from 35.0% to 21.0% effective January 1, 2018. As a result, we revalued our net deferred income tax assets and recorded $3.6 million of additional Income tax expense for continuing operations in the Consolidated Statement of Operations and Comprehensive Income for the year ended December 31, 2017. |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation | The provision for income taxes from continuing operations shown above varied from the statutory federal income tax rate for those periods as follows: YEARS ENDED DECEMBER 31, 2019 2018 2017 Federal income tax rate 21.0 % 21.0 % 35.0 % State income taxes, net of Federal tax effect 5.8 6.1 4.4 Non-deductible compensation and meals and entertainment 1.6 1.7 0.8 Tax credits (2.1) (2.5) (1.9) Tax benefit from restricted stock vesting (1.6) (0.8) (1.2) Valuation allowance on foreign tax credit — — 2.5 Enactment of TCJA — — 5.4 Other (1.1) (0.4) 1.1 Effective tax rate 23.6 % 25.1 % 46.1 % |
Components of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities are composed of the following (in thousands): DECEMBER 31, 2019 2018 Deferred tax assets: Accounts receivable reserves $ 542 $ 738 Accrued liabilities 1,161 1,274 Deferred compensation obligation 4,715 5,545 Stock-based compensation 739 723 Operating lease liabilities 5,497 — Pension and post-retirement benefit plans 3,745 3,471 Foreign tax credit — 1,630 Other 160 224 Deferred tax assets 16,559 13,605 Deferred tax liabilities: Prepaid expenses (459) (159) Fixed assets (965) (1,174) Goodwill (1,889) (3,123) ROU assets for operating leases (4,767) — Other (328) (255) Deferred tax liabilities (8,408) (4,711) Valuation allowance (114) (1,747) Total Deferred tax assets, net $ 8,037 $ 7,147 |
Income Tax Uncertainties | The following table presents a reconciliation of the beginning and ending balance of unrecognized tax benefits for the years ended (in thousands): DECEMBER 31, 2019 2018 2017 Unrecognized tax benefits, beginning $ 906 $ 1,127 $ 1,115 Additions for prior year tax positions — 41 50 Additions for current year tax positions — — 29 Lapse of statute of limitations (497) (248) (67) Reductions for tax positions of prior years — (14) — Settlements (26) — — Unrecognized tax benefits, ending $ 383 $ 906 $ 1,127 |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets, Net | Other assets, net consisted of the following (in thousands): DECEMBER 31, 2019 2018 Assets held in Rabbi Trust $ 35,413 $ 29,134 ROU assets for operating leases, net 18,344 — Equity method investment 8,169 — Capitalized software, net (1) 8,759 4,828 Deferred loan costs, net 855 1,182 Interest rate swap derivative instrument — 900 Other non-current assets 1,298 620 Total Other assets, net $ 72,838 $ 36,664 (1) Accumulated amortization of capitalized software was $34.2 million and $34.1 million as of December 31, 2019 and 2018, respectively. |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill [Abstract] | |
Summary of the Gross Amount and Accumulated Impairment Losses of Goodwill | The following table presents the gross amount and accumulated impairment losses for each of our reporting units as of December 31, 2019, 2018 and 2017 (in thousands): Technology Finance and Total Goodwill, gross amount $ 156,391 $ 19,766 $ 176,157 Accumulated impairment losses (139,357) (11,760) (151,117) Goodwill, carrying value $ 17,034 $ 8,006 $ 25,040 |
Current Liabilities (Tables)
Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table provides information on certain current liabilities (in thousands): DECEMBER 31, 2019 2018 Accounts payable $ 20,267 $ 18,793 Accrued liabilities 12,965 13,749 Total Accounts payable and other accrued liabilities $ 33,232 $ 32,542 Payroll and benefits $ 38,035 $ 34,768 Payroll taxes 992 920 Health insurance liabilities 3,907 2,680 Workers’ compensation liabilities 1,067 1,016 Total Accrued payroll costs $ 44,001 $ 39,384 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): DECEMBER 31, 2019 2018 Deferred compensation plan $ 30,361 $ 25,672 Supplemental executive retirement plan 18,080 15,035 Operating lease liabilities 14,627 — Interest rate swap derivative instrument 179 — Other long-term liabilities 651 4,161 Total Other long-term liabilities $ 63,898 $ 44,868 |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Weighted-Average Terms and Operating Lease Expense | The following table presents weighted-average terms for our operating leases for the year ended December 31, 2019 (in thousands): Weighted-average discount rate 3.8 % Weighted-average remaining lease term 4.5 years The following table presents operating lease expense included in SG&A for the year ended December 31, 2019 (in thousands): Lease Cost Operating lease expense $ 6,847 Variable lease costs 1,689 Short-term lease expense 792 Sublease income (445) Total operating lease expense $ 8,883 |
Schedule of Maturities for Operating Lease Liabilities | The following table presents the maturities of operating lease liabilities as of December 31, 2019 (in thousands): 2020 $ 6,338 2021 4,999 2022 3,304 2023 2,925 2024 2,012 Thereafter 2,595 Total maturities of operating lease liabilities 22,173 Less: imputed interest 1,861 Total operating lease liabilities $ 20,312 |
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) | 12 Months Ended |
Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |
Actuarial Assumptions Used to Determine the Actuarial Present Value of Projected Benefit Obligations | The following table presents the weighted-average actuarial assumptions used to determine the actuarial present value of projected benefit obligations at: DECEMBER 31, 2019 2018 Discount rate 2.75 % 4.00 % Rate of future compensation increase 2.90 % 2.90 % |
Actuarial Assumptions Used to Determine Net Periodic Benefit Cost | The following table presents the weighted-average actuarial assumptions used to determine net periodic benefit cost for the years ended: DECEMBER 31, 2019 2018 2017 Discount rate 4.00 % 3.25 % 4.00 % Rate of future compensation increase 2.90 % 2.90 % 3.60 % |
Components of Net Periodic Benefit Cost | The following table presents the components of net periodic benefit cost for the years ended (in thousands): DECEMBER 31, 2019 2018 2017 Service cost $ 261 $ 1,353 $ 319 Interest cost 601 468 537 Net periodic benefit cost $ 862 $ 1,821 $ 856 |
Changes in the Benefit Obligation | The following table presents the changes in the projected benefit obligation for the years ended (in thousands): DECEMBER 31, 2019 2018 Projected benefit obligation, beginning $ 15,035 $ 14,409 Service cost 261 1,353 Interest cost 601 468 Actuarial experience and changes in actuarial assumptions 2,183 (1,195) Projected benefit obligation, ending $ 18,080 $ 15,035 |
Projected Annual Benefit Payment | Undiscounted projected benefit payments attributed to the SERP, which reflect the anticipated future service of participants, are expected to be paid as follows during the years ended December 31 (in thousands): Projected Annual 2020 $ — 2021 14,347 2022 — 2023 — 2024 — 2025-2030 8,944 |
Derivative Instrument and Hed_2
Derivative Instrument and Hedging Activity (Tables) | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2019 (in thousands): Accumulated derivative instrument gain, beginning of year $ 900 Net change associated with current period hedging transactions (1,079) Accumulated derivative instrument loss, end of year $ (179) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 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 at December 31, 2019 and 2018 were as follows (in thousands): Assets/(Liabilities) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant At December 31, 2019 Recurring basis: Interest rate swap derivative instrument $ (179) $ — $ (179) $ — At December 31, 2018 Recurring basis: Interest rate swap derivative instrument $ 900 $ — $ 900 $ — |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Activity | The following table presents the restricted stock activity for the year ended December 31, 2019 (in thousands, except per share amounts): Number of Weighted-Average Total Intrinsic Outstanding at December 31, 2018 (1) 1,320 $ 24.94 Granted 399 $ 38.37 Forfeited/Canceled (53) $ 24.68 Vested (2) (486) $ 24.89 $ 18,813 Outstanding at December 31, 2019 1,180 $ 29.51 (1) The weighted-average grant date fair value at December 31, 2018, has been updated to correct an immaterial reporting error in our 2018 Annual Report on Form 10-K. (2) The increase in shares vested during the year ended December 31, 2019, was due to the acceleration of stock-based compensation expense for KGS management triggered by a change in control of KGS. |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information | The following table provides quarterly information for the years ended December 31, 2019 and 2018 (in thousands, except per share amounts): THREE MONTHS ENDED MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31 2019 Revenue $ 326,738 $ 338,861 $ 345,558 $ 336,230 Gross profit 93,176 101,026 102,811 98,025 Income from continuing operations 7,974 16,076 15,907 14,609 Income (loss) from discontinued operations, net of tax 18,881 58,783 (967) (401) Net income $ 26,855 $ 74,859 $ 14,940 $ 14,208 Earnings per share – basic, continuing operations $ 0.33 $ 0.67 $ 0.70 $ 0.68 Earnings per share – diluted, continuing operations $ 0.32 $ 0.66 $ 0.68 $ 0.66 Earnings per share-basic $ 1.10 $ 3.13 $ 0.66 $ 0.66 Earnings per share-diluted $ 1.07 $ 3.06 $ 0.64 $ 0.64 2018 Revenue $ 317,441 $ 329,535 $ 326,584 $ 330,377 Gross profit 92,509 100,220 96,045 97,713 Income from continuing operations 7,957 15,173 14,156 13,590 Income from discontinued operations, net of tax 1,218 1,099 2,021 2,766 Net income $ 9,175 $ 16,272 $ 16,177 $ 16,356 Earnings per share – basic, continuing operations $ 0.32 $ 0.61 $ 0.57 $ 0.55 Earnings per share – diluted, continuing operations $ 0.32 $ 0.60 $ 0.56 $ 0.54 Earnings per share-basic $ 0.37 $ 0.66 $ 0.65 $ 0.66 Earnings per share-diluted $ 0.37 $ 0.65 $ 0.64 $ 0.65 During the second quarter of 2019, in connection with the disposition of the GS segment, income from discontinued operations included a gain on the sale of discontinued operations, net of transactions costs, of $80.0 million. There were post-closing working capital adjustments included in the loss from discontinued operations during the third and fourth quarter of 2019 of $0.4 million and $0.3 million, respectively. Refer to Note 2 - “Discontinued Operations” for a more detailed discussion. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Contingency period (or less) | 90 days | |
Required payment period (typically less) | 90 days | |
Contract assets | $ 0 | $ 0 |
Contract liabilities | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Trade Receivables and Related Reserves (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Accounts receivable reserves as percentage of gross accounts receivable | 1.00% | 1.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Equity Method Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||
Loss on equity method investment | $ (831) | $ 0 | $ 0 | |
Equity method investment | 8,169 | 0 | ||
Capital contributed | 9,000 | $ 0 | $ 0 | |
WorkLLama, LLC | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Percent ownership of equity method investment | 50.00% | |||
Loss on equity method investment | (800) | |||
Equity method investment | 8,200 | |||
Contingent payments liability, maximum | 22,500 | |||
Capital contributed | $ 9,000 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Operating Leases (Details) | Dec. 31, 2019 |
Minimum | |
Operating Leased Assets [Line Items] | |
Term of lease contract | 3 years |
Maximum | |
Operating Leased Assets [Line Items] | |
Term of lease contract | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Capitalized Software (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Amortization expense of capitalized software | $ 1.1 | $ 1.1 | $ 0.9 |
Computers and Software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization period | 1 year | ||
Computers and Software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Amortization period | 9 years |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Workers' Compensation (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | |
Economic burden for worker's compensation claim per occurrence | $ 250,000 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Health Insurance (Details) | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | |
Health insurance maximum risk of loss liability per employee insurance plan (up to) | $ 500,000 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Earnings per Share (Details) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Common stock equivalents (in shares) | 586 | 513 | 364 |
Antidilutive common stock equivalents (in shares) | 1 | 0 | 527 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - New Accounting Standards (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Dec. 31, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use asset | $ 18,344 | |
Operating lease, liability | $ 20,312 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease, right-of-use asset | $ 17,600 | |
Operating lease, liability | 21,000 | |
Retained Earnings | Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of stranded tax to retained earnings | (168) | |
Accumulated Other Comprehensive Income (Loss) | Accounting Standards Update 2018-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Reclassification of stranded tax to retained earnings | $ 168 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | Jun. 07, 2019 | Apr. 01, 2019 | Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||
Gain on sale of discontinued operations | $ 79,318 | $ 0 | ||||
Effective tax rates for discontinued operations | 4.40% | 23.40% | 59.80% | |||
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 | |||||
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 | 7,000 | |||||
Transaction costs | $ 2,200 | |||||
Working capital adjustment | $ 700 | |||||
Contingent consideration paid | $ 600 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Pretax Profit (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Gain on sale of discontinued operations | $ 79,318 | $ 0 | |||||||||
Income from discontinued operations, net of tax | $ (401) | $ (967) | $ 58,783 | $ 18,881 | $ 2,766 | $ 2,021 | $ 1,099 | $ 1,218 | 76,296 | 7,104 | $ 3,691 |
Discontinued Operations, Disposed of by Sale | GS segment | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Revenue | 27,737 | ||||||||||
Direct costs | 19,494 | ||||||||||
Gross profit | 8,243 | ||||||||||
Selling, general and administrative expenses | 6,988 | ||||||||||
Depreciation and amortization | 307 | ||||||||||
Income from discontinued operations | 948 | ||||||||||
Gain on sale of discontinued operations | $ (300) | $ (400) | $ 80,000 | 79,318 | |||||||
Other (expense) income, net | (436) | ||||||||||
Income from discontinued operations, before income taxes | 79,830 | ||||||||||
Income tax expense | 3,534 | ||||||||||
Income from discontinued operations, net of tax | $ 76,296 | ||||||||||
Discontinued Operations, Held-for-sale | GS segment | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Revenue | 114,416 | 104,294 | |||||||||
Direct costs | 82,295 | 71,835 | |||||||||
Gross profit | 32,121 | 32,459 | |||||||||
Selling, general and administrative expenses | 21,862 | 22,861 | |||||||||
Depreciation and amortization | 995 | 989 | |||||||||
Income from discontinued operations | 9,264 | 8,609 | |||||||||
Gain on sale of discontinued operations | 0 | 0 | |||||||||
Other (expense) income, net | 9 | 567 | |||||||||
Income from discontinued operations, before income taxes | 9,273 | 9,176 | |||||||||
Income tax expense | 2,169 | 5,485 | |||||||||
Income from discontinued operations, net of tax | $ 7,104 | $ 3,691 |
Discontinued Operations - Sched
Discontinued Operations - Schedule of Assets and Liabilities Held For Sale (Details) - USD ($) $ in Thousands | Dec. 31, 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 |
Discontinued Operations - Sum_2
Discontinued Operations - Summary of Cash Flow Information (Details) - GS segment - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Discontinued Operations, Disposed of by Sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
GS Operating Activities | $ 4,547 | ||
GS Investing Activities | $ 117,798 | ||
Discontinued Operations, Held-for-sale | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
GS Operating Activities | $ 10,937 | $ 1,098 | |
GS Investing Activities | $ (927) | $ (776) |
Reportable Segments - Operation
Reportable Segments - Operations of Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 336,230 | $ 345,558 | $ 338,861 | $ 326,738 | $ 330,377 | $ 326,584 | $ 329,535 | $ 317,441 | $ 1,347,387 | $ 1,303,937 | $ 1,253,646 |
Gross profit | $ 98,025 | $ 102,811 | $ 101,026 | $ 93,176 | $ 97,713 | $ 96,045 | $ 100,220 | $ 92,509 | 395,038 | 386,487 | 375,597 |
Operating and other expenses | 323,642 | 318,607 | 320,679 | ||||||||
Income from continuing operations, before income taxes | 71,396 | 67,880 | 54,918 | ||||||||
Tech | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 1,057,859 | 990,089 | 907,511 | ||||||||
Gross profit | 292,980 | 277,388 | 257,118 | ||||||||
FA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 289,528 | 313,848 | 346,135 | ||||||||
Gross profit | $ 102,058 | $ 109,099 | $ 118,479 |
Disaggregation of Revenue - Sch
Disaggregation of Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 336,230 | $ 345,558 | $ 338,861 | $ 326,738 | $ 330,377 | $ 326,584 | $ 329,535 | $ 317,441 | $ 1,347,387 | $ 1,303,937 | $ 1,253,646 |
Flex revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,299,687 | 1,258,249 | 1,205,969 | ||||||||
Direct Hire revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 47,700 | 45,688 | 47,677 | ||||||||
Tech | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,057,859 | 990,089 | 907,511 | ||||||||
Tech | Flex revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 1,037,380 | 971,310 | 887,675 | ||||||||
Tech | Direct Hire revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 20,479 | 18,779 | 19,836 | ||||||||
FA | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 289,528 | 313,848 | 346,135 | ||||||||
FA | Flex revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | 262,307 | 286,939 | 318,294 | ||||||||
FA | Direct Hire revenue | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenue | $ 27,221 | $ 26,909 | $ 27,841 |
Fixed Assets - Major Classifica
Fixed Assets - Major Classifications of Fixed Assets and Related Useful Lives (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 56,570 | $ 63,013 |
Less accumulated depreciation | (26,595) | (28,691) |
Total Fixed assets, net | 29,975 | 34,322 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 5,892 | 5,892 |
Building and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 25,990 | 25,755 |
Building and improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 1 year | |
Building and improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 40 years | |
Furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 8,760 | 14,938 |
Furniture and equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 1 year | |
Furniture and equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 20 years | |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 6,446 | 5,944 |
Computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 1 year | |
Computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 5 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 9,482 | $ 10,484 |
Leasehold improvements | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 1 year | |
Leasehold improvements | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, useful life | 7 years |
Fixed Assets - Narrative (Detai
Fixed Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 4.9 | $ 5.7 | $ 6.4 |
Income Taxes - Income Tax Expen
Income Taxes - Income Tax Expense (Benefit), Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax expense: | |||
Federal | $ 12,074 | $ 12,032 | $ 14,296 |
State | 5,057 | 5,369 | 3,004 |
Deferred tax expense | (301) | (397) | 8,024 |
Total Income tax expense | $ 16,830 | $ 17,004 | 25,324 |
Adjustment of deferred tax assets | $ 3,600 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Federal income tax rate | 21.00% | 21.00% | 35.00% |
State income taxes, net of Federal tax effect | 5.80% | 6.10% | 4.40% |
Non-deductible compensation and meals and entertainment | 1.60% | 1.70% | 0.80% |
Tax credits | (2.10%) | (2.50%) | (1.90%) |
Tax benefit from restricted stock vesting | (1.60%) | (0.80%) | (1.20%) |
Valuation allowance on foreign tax credit | 0.00% | 0.00% | 2.50% |
Enactment of TCJA | 0.00% | 0.00% | 5.40% |
Other | (1.10%) | (0.40%) | 1.10% |
Effective tax rate | 23.60% | 25.10% | 46.10% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Accounts receivable reserves | $ 542 | $ 738 |
Accrued liabilities | 1,161 | 1,274 |
Deferred compensation obligation | 4,715 | 5,545 |
Stock-based compensation | 739 | 723 |
Operating lease liabilities | 5,497 | |
Pension and post-retirement benefit plans | 3,745 | 3,471 |
Foreign tax credit | 0 | 1,630 |
Other | 160 | 224 |
Deferred tax assets | 16,559 | 13,605 |
Deferred tax liabilities: | ||
Prepaid expenses | (459) | (159) |
Fixed assets | (965) | (1,174) |
Goodwill | (1,889) | (3,123) |
ROU assets for operating leases | (4,767) | |
Other | (328) | (255) |
Deferred tax liabilities | (8,408) | (4,711) |
Valuation allowance | (114) | (1,747) |
Total Deferred tax assets, net | $ 8,037 | $ 7,147 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) $ in Millions | Dec. 31, 2019USD ($) |
Operating Loss Carryforwards [Line Items] | |
Unrecognized tax benefits that would impact effective tax rate | $ 0.4 |
State | |
Operating Loss Carryforwards [Line Items] | |
State tax net operating losses | $ 1 |
Income Taxes - Income Tax Uncer
Income Taxes - Income Tax Uncertainties (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits, beginning | $ 906 | $ 1,127 | $ 1,115 |
Additions for prior year tax positions | 0 | 41 | 50 |
Additions for current year tax positions | 0 | 0 | 29 |
Lapse of statute of limitations | (497) | (248) | (67) |
Reductions for tax positions of prior years | 0 | (14) | 0 |
Settlements | (26) | 0 | 0 |
Unrecognized tax benefits, ending | $ 383 | $ 906 | $ 1,127 |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Assets held in Rabbi Trust | $ 35,413 | $ 29,134 |
ROU assets for operating leases, net | 18,344 | |
Equity method investment | 8,169 | 0 |
Capitalized software, net | 8,759 | 4,828 |
Deferred loan costs, net | 855 | 1,182 |
Interest rate swap derivative instrument | 0 | 900 |
Other non-current assets | 1,298 | 620 |
Total Other assets, net | 72,838 | 36,664 |
Accumulated amortization of capitalized software | $ 34,200 | $ 34,100 |
Goodwill - Summary of the Gross
Goodwill - Summary of the Gross Amount and Accumulated Impairment Losses of Goodwill (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill [Line Items] | |||
Goodwill, gross amount | $ 176,157 | $ 176,157 | $ 176,157 |
Accumulated impairment losses | (151,117) | (151,117) | (151,117) |
Goodwill, carrying value | 25,040 | 25,040 | 25,040 |
Technology | |||
Goodwill [Line Items] | |||
Goodwill, gross amount | 156,391 | 156,391 | 156,391 |
Accumulated impairment losses | (139,357) | (139,357) | (139,357) |
Goodwill, carrying value | 17,034 | 17,034 | 17,034 |
Finance and Accounting | |||
Goodwill [Line Items] | |||
Goodwill, gross amount | 19,766 | 19,766 | 19,766 |
Accumulated impairment losses | (11,760) | (11,760) | (11,760) |
Goodwill, carrying value | $ 8,006 | $ 8,006 | $ 8,006 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Goodwill [Abstract] | |||
Goodwill impairment | $ 0 | $ 0 | $ 0 |
Discrete forecast period | 5 years |
Current Liabilities (Details)
Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts payable and other accrued liabilities | ||
Accounts payable | $ 20,267 | $ 18,793 |
Accrued liabilities | 12,965 | 13,749 |
Total Accounts payable and other accrued liabilities | 33,232 | 32,542 |
Accrued payroll costs | ||
Payroll and benefits | 38,035 | 34,768 |
Payroll taxes | 992 | 920 |
Health insurance liabilities | 3,907 | 2,680 |
Workers’ compensation liabilities | 1,067 | 1,016 |
Total Accrued payroll costs | $ 44,001 | $ 39,384 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation plan | $ 30,361 | $ 25,672 |
Supplemental executive retirement plan | 18,080 | 15,035 |
Operating lease liabilities | 14,627 | |
Interest rate swap derivative instrument | 179 | 0 |
Other long-term liabilities | 651 | 4,161 |
Total Other long-term liabilities | $ 63,898 | $ 44,868 |
Operating Leases - Schedule of
Operating Leases - Schedule of Weighted-Average Terms and Operating Lease Expense (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Weighted-average discount rate | 3.80% |
Weighted-average remaining lease term | 4 years 6 months |
Lease Cost | |
Operating lease expense | $ 6,847 |
Variable lease costs | 1,689 |
Short-term lease expense | 792 |
Sublease income | (445) |
Total operating lease expense | $ 8,883 |
Operating Leases - Schedule o_2
Operating Leases - Schedule of Maturities for Operating Lease Liabilities (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 6,338 |
2021 | 4,999 |
2022 | 3,304 |
2023 | 2,925 |
2024 | 2,012 |
Thereafter | 2,595 |
Total maturities of operating lease liabilities | 22,173 |
Less: imputed interest | 1,861 |
Total operating lease liabilities | $ 20,312 |
Operating Leases - Schedule o_3
Operating Leases - Schedule of Expected Future Contractual Operating Lease Obligations (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [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 - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ / shares in Units, shares in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Accrued matching contribution | $ 1,400,000 | $ 1,500,000 | |
Employee stock purchase plan (in shares) | 17 | 19 | 25 |
Average purchase price (in dollars per share) | $ 32.79 | $ 28.93 | $ 20.65 |
Current deferred compensation liability | $ 3,600,000 | $ 1,300,000 | |
Deferred compensation plan | 30,361,000 | 25,672,000 | |
Compensation expenses | 400,000 | 800,000 | $ 600,000 |
Deferred compensation plan assets | 35,413,000 | 29,134,000 | |
Life insurance | $ 213,100,000 | ||
Normal retirement age | 65 years | ||
Early retirement age | 55 years | ||
Benefits payable targeted percentage | 45.00% | ||
Period in which the executive officer earned the highest salary and bonus | 3 years | ||
Employment period for computation of benefit | 10 years | ||
Eligible age under condition one for reduced benefits under the plan | 62 years | ||
Eligible service under condition one for reduced benefits under plan | 10 years | ||
Eligible age under condition two for reduced benefits under plan | 55 years | ||
Eligible service under condition two for reduced benefits under plan | 25 years | ||
Lump sum payment period | 10 years | ||
Payment to participants under the SERP | $ 0 | 0 | |
Accumulated benefit obligation | 18,100,000 | $ 15,000,000 | |
Employer contributions to benefit plans | 0 | ||
Expected future benefit payments, next twelve months | $ 0 | ||
ESPP | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Percentage of discount on shares purchased under employee stock purchase plan | 5.00% |
Employee Benefit Plans - Actuar
Employee Benefit Plans - Actuarial Assumptions Used to Determine the Actuarial Present Value of Projected Benefit Obligations (Details) - Weighted Average | Dec. 31, 2019 | Dec. 31, 2018 |
Defined Benefit Plan Disclosure [Line Items] | ||
Discount rate | 2.75% | 4.00% |
Rate of future compensation increase | 2.90% | 2.90% |
Employee Benefit Plans - Weight
Employee Benefit Plans - Weighted Average Actuarial Assumptions Used To Determine Net Periodic Benefit Cost (Details) - Weighted Average | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Discount rate | 4.00% | 3.25% | 4.00% |
Rate of future compensation increase | 2.90% | 2.90% | 3.60% |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 261 | $ 1,353 | $ 319 |
Interest cost | 601 | 468 | 537 |
Net periodic benefit cost | $ 862 | $ 1,821 | $ 856 |
Employee Benefit Plans - Change
Employee Benefit Plans - Changes in the Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation, beginning | $ 15,035 | $ 14,409 | |
Service cost | 261 | 1,353 | $ 319 |
Interest cost | 601 | 468 | 537 |
Actuarial experience and changes in actuarial assumptions | 2,183 | (1,195) | |
Projected benefit obligation, ending | $ 18,080 | $ 15,035 | $ 14,409 |
Employee Benefit Plans - Projec
Employee Benefit Plans - Projected Annual Benefit Payment (Details) | Dec. 31, 2019USD ($) |
Retirement Benefits [Abstract] | |
2020 | $ 0 |
2021 | 14,347,000 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025-2030 | $ 8,944,000 |
Credit Facility (Details)
Credit Facility (Details) - Line of Credit - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | $ 300,000,000 | |
Possible borrowing capacity increase | 150,000,000 | |
Long-term debt - credit facility | $ 65,000,000 | $ 71,800,000 |
Revolving Credit Facility | Minimum | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.20% | |
Fixed charge coverage ratio | 1.25 | |
Equity securities limitation, leverage ratio | 2.75 | |
Debt instrument, covenant, availability | $ 25,000,000 | |
Revolving Credit Facility | Maximum | ||
Line of Credit Facility [Line Items] | ||
Commitment fee percentage | 0.35% | |
Leverage ratio | 3.25 | |
Letter of Credit | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | $ 10,000,000 | |
Letters of credit outstanding | 3,400,000 | $ 3,200,000 |
Swingline Loan | ||
Line of Credit Facility [Line Items] | ||
Current borrowing capacity | $ 10,000,000 | |
Federal Funds Effective Swap Rate | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.50% | |
LIBOR | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.00% | |
LIBOR | Revolving Credit Facility | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.25% | |
LIBOR | Revolving Credit Facility | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 1.75% | |
Base Rate | Minimum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.25% | |
Base Rate | Maximum | ||
Line of Credit Facility [Line Items] | ||
Basis spread on variable rate | 0.75% |
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 interest rate | 1.81% | ||||
Derivative, notional amount | $ 65,000,000 | $ 65,000,000 | $ 65,000,000 | ||
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 | 12 Months Ended |
Dec. 31, 2019USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance at beginning of year | $ 168,331 |
Balance at end of year | 167,263 |
Accumulated Derivative Instrument Gain | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |
Balance at beginning of year | 900 |
Net change associated with current period hedging transactions | (1,079) |
Balance at end of year | $ (179) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Estimated Fair Values (Details) - Recurring Basis - Interest Rate Swap - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets/(Liabilities) Measured at Fair Value: | ||
Interest rate swap derivative instrument | $ (179) | |
Interest rate swap derivative instrument | $ 900 | |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets/(Liabilities) Measured at Fair Value: | ||
Interest rate swap derivative instrument | 0 | |
Interest rate swap derivative instrument | 0 | |
Significant Other Observable Inputs (Level 2) | ||
Assets/(Liabilities) Measured at Fair Value: | ||
Interest rate swap derivative instrument | (179) | |
Interest rate swap derivative instrument | 900 | |
Significant Unobservable Inputs (Level 3) | ||
Assets/(Liabilities) Measured at Fair Value: | ||
Interest rate swap derivative instrument | $ 0 | |
Interest rate swap derivative instrument | $ 0 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Apr. 23, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 9,800 | $ 8,500 | $ 7,400 | |
Related tax benefit | $ 2,300 | $ 2,100 | $ 2,900 | |
Restricted Stock | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Granted (in dollars per share) | $ 38.37 | $ 29.72 | $ 24.03 | |
Vested | $ 18,813 | $ 11,900 | $ 13,700 | |
Total unrecognized compensation expenses | $ 32,000 | |||
Weighted average period expected to be recognized | 3 years 6 months | |||
Restricted Stock | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock granted, vesting period | 1 year | |||
Restricted Stock | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock granted, vesting period | 10 years | |||
2019 Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares available for grant (in shares) | 2.8 | |||
LTI | Restricted Stock | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock granted, vesting period | 3 years | |||
LTI | Restricted Stock | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock granted, vesting period | 4 years |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Restricted Stock | |||
Outstanding as of beginning of period (in shares) | 1,320 | ||
Granted (in shares) | 399 | ||
Forfeited/Canceled (in shares) | (53) | ||
Vested (in shares) | (486) | ||
Outstanding as of end of period (in shares) | 1,180 | 1,320 | |
Weighted-Average Grant Date Fair Value | |||
Outstanding as of beginning of period (in dollars per share) | $ 24.94 | ||
Granted (in dollars per share) | 38.37 | $ 29.72 | $ 24.03 |
Forfeited/Canceled (in dollars per share) | 24.68 | ||
Vested (in dollars per share) | 24.89 | ||
Outstanding as of end of period (in dollars per share) | $ 29.51 | $ 24.94 | |
Total Intrinsic Value of Restricted Stock Vested | |||
Vested | $ 18,813 | $ 11,900 | $ 13,700 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Commitments [Line Items] | ||
Commitments to be paid | $ 10.5 | |
Commitments to be paid in 2020 | 7.3 | |
Commitments to be paid in 2021 | 3 | |
Commitments to be paid in 2022 | 0.2 | |
Employees under contract terminated by employer without good cause or change in control | 39.4 | |
Employees under contract terminated by employer without good cause or in absence of change in control | 16.5 | |
Letter of Credit | Line of Credit | ||
Other Commitments [Line Items] | ||
Letters of credit outstanding | $ 3.4 | $ 3.2 |
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% |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Summary of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenue | $ 336,230 | $ 345,558 | $ 338,861 | $ 326,738 | $ 330,377 | $ 326,584 | $ 329,535 | $ 317,441 | $ 1,347,387 | $ 1,303,937 | $ 1,253,646 |
Gross profit | 98,025 | 102,811 | 101,026 | 93,176 | 97,713 | 96,045 | 100,220 | 92,509 | 395,038 | 386,487 | 375,597 |
Income from continuing operations | 14,609 | 15,907 | 16,076 | 7,974 | 13,590 | 14,156 | 15,173 | 7,957 | 54,566 | 50,876 | 29,594 |
Income from discontinued operations, net of tax | (401) | (967) | 58,783 | 18,881 | 2,766 | 2,021 | 1,099 | 1,218 | 76,296 | 7,104 | 3,691 |
Net income | $ 14,208 | $ 14,940 | $ 74,859 | $ 26,855 | $ 16,356 | $ 16,177 | $ 16,272 | $ 9,175 | $ 130,862 | $ 57,980 | $ 33,285 |
Earnings per share – basic, continuing operations (in dollars per share) | $ 0.68 | $ 0.70 | $ 0.67 | $ 0.33 | $ 0.55 | $ 0.57 | $ 0.61 | $ 0.32 | $ 2.35 | $ 2.05 | $ 1.17 |
Earnings per share – diluted, continuing operations (in dollars per share) | 0.66 | 0.68 | 0.66 | 0.32 | 0.54 | 0.56 | 0.60 | 0.32 | 2.29 | 2.02 | 1.16 |
Earnings per share – basic (in dollars per share) | 0.66 | 0.66 | 3.13 | 1.10 | 0.66 | 0.65 | 0.66 | 0.37 | 5.64 | 2.34 | 1.32 |
Earnings per share – diluted (in dollars per share) | $ 0.64 | $ 0.64 | $ 3.06 | $ 1.07 | $ 0.65 | $ 0.64 | $ 0.65 | $ 0.37 | $ 5.50 | $ 2.30 | $ 1.30 |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (loss) on the sale of discontinued operations, net of transaction costs | $ 79,318 | $ 0 | |||
Discontinued Operations, Disposed of by Sale | GS segment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain (loss) on the sale of discontinued operations, net of transaction costs | $ (300) | $ (400) | $ 80,000 | $ 79,318 |
Schedule II Valuation and Qua_2
Schedule II Valuation and Qualifying Accounts and Reserves Supplemental Schedule (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts receivable reserves | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 2,800 | $ 1,858 | $ 2,066 |
Charged to Costs and Expenses | 1,255 | 1,874 | 1,155 |
Charged to Other Accounts | 0 | 0 | (91) |
Deductions | (1,977) | (932) | (797) |
Balance at End of Period | 2,078 | 2,800 | 2,333 |
Accounts receivable reserves | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 475 | ||
Deferred tax assets valuation allowance | |||
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 1,747 | 1,733 | 85 |
Charged to Costs and Expenses | 0 | 14 | 1,648 |
Charged to Other Accounts | 0 | 0 | 0 |
Deductions | (1,633) | 0 | 0 |
Balance at End of Period | $ 114 | $ 1,747 | $ 1,733 |
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) |
Accounting Standards Update 2016-09 [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | 300,000 |
Accounting Standards Update 2016-09 [Member] | Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (469,000) |
Accounting Standards Update 2016-09 [Member] | Additional Paid-in Capital [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 769,000 |