Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 05, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-26058 | |
Entity Registrant Name | Kforce Inc | |
Entity Incorporation, State or Country Code | FL | |
Entity Tax Identification Number | 59-3264661 | |
Entity Address, Address Line One | 1001 East Palm Avenue | |
Entity Address, City or Town | Tampa | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33605 | |
City Area Code | 813 | |
Local Phone Number | 552-5000 | |
Title of 12(b) Security | Common Stock, $0.01 per share | |
Trading Symbol | KFRC | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,947,455 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0000930420 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 343,020 | $ 338,861 | $ 678,228 | $ 665,599 |
Direct costs | 245,659 | 237,835 | 486,343 | 471,397 |
Gross profit | 97,361 | 101,026 | 191,885 | 194,202 |
Selling, general and administrative expenses | 80,546 | 78,017 | 159,762 | 157,830 |
Depreciation and amortization | 1,380 | 1,542 | 2,773 | 3,192 |
Income from operations | 15,435 | 21,467 | 29,350 | 33,180 |
Other expense, net | 1,427 | 403 | 2,808 | 1,326 |
Income from continuing operations, before income taxes | 14,008 | 21,064 | 26,542 | 31,854 |
Income tax expense | 4,123 | 4,988 | 7,551 | 7,804 |
Income from continuing operations | 9,885 | 16,076 | 18,991 | 24,050 |
Income from discontinued operations, net of tax | 0 | 58,783 | 0 | 77,664 |
Net income | 9,885 | 74,859 | 18,991 | 101,714 |
Other comprehensive loss: | ||||
Change in fair value of interest rate swaps, net of tax | (470) | (478) | (1,591) | (758) |
Comprehensive income | $ 9,415 | $ 74,381 | $ 17,400 | $ 100,956 |
Earnings per share – basic: | ||||
Continuing operations (in dollars per share) | $ 0.48 | $ 0.67 | $ 0.90 | $ 0.99 |
Discontinued operations (in dollars per share) | 0 | 2.46 | 0 | 3.21 |
Earnings per share - basic (in dollars per share) | 0.48 | 3.13 | 0.90 | 4.20 |
Earnings per share – diluted: | ||||
Continuing operations (in dollars per share) | 0.47 | 0.66 | 0.89 | 0.97 |
Discontinued operations (in dollars per share) | 0 | 2.40 | 0 | 3.14 |
Earnings per share – diluted (in dollars per share) | $ 0.47 | $ 3.06 | $ 0.89 | $ 4.11 |
Weighted average shares outstanding – basic (in shares) | 20,790 | 23,901 | 21,171 | 24,207 |
Weighted average shares outstanding – diluted (in shares) | 21,078 | 24,458 | 21,469 | 24,745 |
UNAUDITED CONDENSED CONSOLIDA_2
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 52,371 | $ 19,831 |
Trade receivables, net of allowances of $4,572 and $2,078, respectively | 242,391 | 217,929 |
Prepaid expenses and other current assets | 7,563 | 7,475 |
Total current assets | 302,325 | 245,235 |
Fixed assets, net | 28,425 | 29,975 |
Other assets, net | 70,721 | 72,838 |
Deferred tax assets, net | 12,322 | 8,037 |
Goodwill | 25,040 | 25,040 |
Total assets | 438,833 | 381,125 |
Current liabilities: | ||
Accounts payable and other accrued liabilities | 38,371 | 33,232 |
Accrued payroll costs | 54,314 | 44,001 |
Current portion of operating lease liabilities | 4,942 | 5,685 |
Income taxes payable | 11,353 | 878 |
Other current liabilities | 736 | 1,168 |
Total current liabilities | 109,716 | 84,964 |
Long-term debt – credit facility | 100,000 | 65,000 |
Other long-term liabilities | 76,641 | 63,898 |
Total liabilities | 286,357 | 213,862 |
Commitments and contingencies (Note M) | ||
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, 72,237 and 72,202 issued, respectively | 722 | 722 |
Additional paid-in capital | 465,957 | 459,545 |
Accumulated other comprehensive loss | (3,117) | (1,526) |
Retained earnings | 360,409 | 350,545 |
Treasury stock, at cost; 50,295 and 49,277 shares, respectively | (671,495) | (642,023) |
Total stockholders’ equity | 152,476 | 167,263 |
Total liabilities and stockholders’ equity | $ 438,833 | $ 381,125 |
UNAUDITED CONDENSED CONSOLIDA_3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 4,572 | $ 2,078 |
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) | 72,237,000 | 72,202,000 |
Treasury stock, shares (in shares) | 50,295,000 | 49,277,000 |
UNAUDITED CONDENSED CONSOLIDA_4
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period of Adoption, Adjustment | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Retained EarningsCumulative Effect, Period of Adoption, Adjustment | Treasury Stock |
Shares at beginning of period (in shares) at Dec. 31, 2018 | 71,856 | 45,822 | ||||||
Balance at beginning of period at Dec. 31, 2018 | $ 168,331 | $ 719 | $ 447,337 | $ 1,296 | $ 237,308 | $ (518,329) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 26,855 | 26,855 | ||||||
Reclassification of stranded tax effects | 0 | 168 | (168) | |||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 4 | |||||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 233 | (233) | |||||
Stock-based compensation expense | 2,620 | 2,620 | ||||||
Employee stock purchase plan (in shares) | (5) | |||||||
Employee stock purchase plan | 140 | 86 | $ 54 | |||||
Dividends | (4,406) | (4,406) | ||||||
Change in fair value of interest rate swaps, net of tax | (280) | (280) | ||||||
Repurchases of common stock (in shares) | 432 | |||||||
Repurchases of common stock | (14,688) | $ (14,688) | ||||||
Shares at end of period (in shares) at Mar. 31, 2019 | 71,860 | 46,249 | ||||||
Balance at end of period at Mar. 31, 2019 | 178,572 | $ 719 | 450,276 | 1,184 | 259,356 | $ (532,963) | ||
Shares at beginning of period (in shares) at Dec. 31, 2018 | 71,856 | 45,822 | ||||||
Balance at beginning of period at Dec. 31, 2018 | 168,331 | $ 719 | 447,337 | 1,296 | 237,308 | $ (518,329) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 101,714 | |||||||
Employee stock purchase plan | 283 | |||||||
Change in fair value of interest rate swaps, net of tax | (758) | |||||||
Shares at end of period (in shares) at Jun. 30, 2019 | 71,865 | 47,293 | ||||||
Balance at end of period at Jun. 30, 2019 | 214,856 | $ 719 | 454,071 | 706 | 329,760 | $ (570,400) | ||
Shares at beginning of period (in shares) at Mar. 31, 2019 | 71,860 | 46,249 | ||||||
Balance at beginning of period at Mar. 31, 2019 | 178,572 | $ 719 | 450,276 | 1,184 | 259,356 | $ (532,963) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 74,859 | 74,859 | ||||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 5 | |||||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 177 | (177) | |||||
Stock-based compensation expense | 3,524 | 3,524 | ||||||
Employee stock purchase plan (in shares) | (4) | |||||||
Employee stock purchase plan | 143 | 94 | $ 49 | |||||
Dividends | (4,278) | (4,278) | ||||||
Change in fair value of interest rate swaps, net of tax | (478) | (478) | ||||||
Repurchases of common stock (in shares) | 1,048 | |||||||
Repurchases of common stock | (37,486) | $ (37,486) | ||||||
Shares at end of period (in shares) at Jun. 30, 2019 | 71,865 | 47,293 | ||||||
Balance at end of period at Jun. 30, 2019 | 214,856 | $ 719 | 454,071 | 706 | 329,760 | $ (570,400) | ||
Shares at beginning of period (in shares) at Dec. 31, 2019 | 72,202 | 49,277 | ||||||
Balance at beginning of period at Dec. 31, 2019 | 167,263 | $ (214) | $ 722 | 459,545 | (1,526) | 350,545 | $ (214) | $ (642,023) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 9,106 | 9,106 | ||||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 4 | |||||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 218 | (218) | |||||
Stock-based compensation expense | 2,896 | 2,896 | ||||||
Employee stock purchase plan (in shares) | (4) | |||||||
Employee stock purchase plan | 142 | 93 | $ 49 | |||||
Dividends | (4,293) | (4,293) | ||||||
Change in fair value of interest rate swaps, net of tax | (1,121) | (1,121) | ||||||
Repurchases of common stock (in shares) | 685 | |||||||
Repurchases of common stock | (20,380) | $ (20,380) | ||||||
Shares at end of period (in shares) at Mar. 31, 2020 | 72,198 | 49,958 | ||||||
Balance at end of period at Mar. 31, 2020 | 153,399 | $ 722 | 462,752 | (2,647) | 354,926 | $ (662,354) | ||
Shares at beginning of period (in shares) at Dec. 31, 2019 | 72,202 | 49,277 | ||||||
Balance at beginning of period at Dec. 31, 2019 | 167,263 | $ (214) | $ 722 | 459,545 | (1,526) | 350,545 | $ (214) | $ (642,023) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 18,991 | |||||||
Employee stock purchase plan | 276 | |||||||
Change in fair value of interest rate swaps, net of tax | (1,591) | |||||||
Shares at end of period (in shares) at Jun. 30, 2020 | 72,237 | 50,295 | ||||||
Balance at end of period at Jun. 30, 2020 | 152,476 | $ 722 | 465,957 | (3,117) | 360,409 | $ (671,495) | ||
Shares at beginning of period (in shares) at Mar. 31, 2020 | 72,198 | 49,958 | ||||||
Balance at beginning of period at Mar. 31, 2020 | 153,399 | $ 722 | 462,752 | (2,647) | 354,926 | $ (662,354) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 9,885 | 9,885 | ||||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 39 | |||||||
Issuance for stock-based compensation and dividends, net of forfeitures | 0 | 240 | (240) | |||||
Stock-based compensation expense | 2,903 | 2,903 | ||||||
Employee stock purchase plan (in shares) | (5) | |||||||
Employee stock purchase plan | 134 | 62 | $ 72 | |||||
Dividends | (4,162) | (4,162) | ||||||
Change in fair value of interest rate swaps, net of tax | (470) | (470) | ||||||
Repurchases of common stock (in shares) | 342 | |||||||
Repurchases of common stock | (9,213) | $ (9,213) | ||||||
Shares at end of period (in shares) at Jun. 30, 2020 | 72,237 | 50,295 | ||||||
Balance at end of period at Jun. 30, 2020 | $ 152,476 | $ 722 | $ 465,957 | $ (3,117) | $ 360,409 | $ (671,495) |
UNAUDITED CONDENSED CONSOLIDA_5
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | |
Income tax expense | $ 4,123 | $ 4,988 | ||
Dividend (in dollars per share) | $ 0.20 | $ 0.20 | $ 0.18 | $ 0.18 |
Tax benefit | $ 160 | $ 384 | $ 162 | $ 95 |
Cumulative Effect, Period of Adoption, Adjustment | Retained Earnings | ||||
Income tax expense | $ 75 |
UNAUDITED CONDENSED CONSOLIDA_6
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||||||
Net income | $ 9,885 | $ 9,106 | $ 74,859 | $ 26,855 | $ 18,991 | $ 101,714 | |
Adjustments to reconcile net income to cash provided by operating activities: | |||||||
Deferred income tax provision, net | (3,741) | 1,735 | |||||
Provision for credit losses | 2,835 | 797 | |||||
Depreciation and amortization | 2,773 | 3,623 | |||||
Stock-based compensation expense | 5,799 | 5,050 | |||||
Defined benefit pension plan expense | 422 | 431 | |||||
Loss (gain) on deferred compensation plan investments, net | 424 | (10) | |||||
Loss on disposal or impairment of assets | 1,092 | 970 | |||||
Noncash lease expense | 3,086 | 3,187 | |||||
Loss on equity method investment | 1,134 | 0 | |||||
Gain on sale of discontinued operations | 0 | (80,004) | |||||
Other | 176 | 636 | |||||
(Increase) decrease in operating assets | |||||||
Trade receivables, net | (27,585) | (12,829) | |||||
Other assets | (2,510) | (3,269) | |||||
Increase (decrease) in operating liabilities | |||||||
Accrued payroll costs | 10,588 | 1,298 | |||||
Other liabilities | 25,482 | (999) | |||||
Cash provided by operating activities | 38,966 | 22,330 | |||||
Cash flows from investing activities: | |||||||
Capital expenditures | (3,793) | (4,184) | |||||
Equity method investment | (2,500) | (7,500) | |||||
Proceeds from the sale of assets held within the Rabbi Trust | 3,548 | 0 | |||||
Net proceeds from the sale of assets held for sale | 0 | 122,696 | |||||
Cash (used in) provided by investing activities | (2,745) | 111,012 | |||||
Cash flows from financing activities: | |||||||
Proceeds from credit facility | 35,000 | 80,100 | |||||
Payments on credit facility | 0 | (86,900) | |||||
Repurchases of common stock | (29,593) | (51,546) | |||||
Cash dividends | (8,455) | (8,684) | |||||
Payments on other financing arrangements | (633) | (875) | |||||
Other | 0 | (502) | |||||
Cash used in financing activities | (3,681) | (68,407) | |||||
Change in cash and cash equivalents | 32,540 | 64,935 | |||||
Cash and cash equivalents, beginning of period | 19,831 | 112 | 19,831 | 112 | $ 112 | ||
Cash and cash equivalents, end of period | 52,371 | 65,047 | 52,371 | 65,047 | $ 19,831 | ||
Cash Paid During the Period For: | |||||||
Income taxes | 1,043 | 8,447 | |||||
Operating lease liabilities | 3,949 | 4,025 | |||||
Interest, net | 1,281 | 788 | |||||
Non-Cash Investing and Financing Transactions: | |||||||
ROU assets obtained from operating leases | 2,971 | 1,355 | |||||
Employee stock purchase plan | $ 134 | $ 142 | $ 143 | $ 140 | 276 | 283 | |
Contingent contribution for equity method investment | 0 | 1,500 | |||||
Unsettled repurchases of common stock | $ 0 | $ 1,183 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Unless otherwise noted below, there have been no material changes to the accounting policies presented in Note 1 - “Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of the 2019 Annual Report on Form 10-K. Basis of Presentation The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2019 was derived from our audited Consolidated Balance Sheet as of December 31, 2019, as presented in our 2019 Annual Report on Form 10-K. 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 higher costs in the first quarter of each fiscal year as a result of certain U.S. state and federal employment tax resets, which adversely affects our gross profit and overall profitability. The results of operations for any interim period may be impacted by these factors, among others, and are not necessarily indicative of, nor comparable to, the results of operations for a full year. Principles of Consolidation The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” “we,” the “Firm,” “management,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions relate to the following: allowance for credit losses; income taxes; self-insured liabilities for health insurance and workers’ compensation; obligations for the pension plan; variable consideration for revenue recognition; and any asset impairments. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. Health Insurance Except for certain fully insured health insurance lines of coverage, Kforce retains the risk of loss per participant for each health insurance claim up to $600 thousand in claims annually. Additionally, for all claim amounts exceeding $600 thousand, Kforce retains the risk of loss up to an aggregate annual loss of those claims of $200 thousand. For its partially self-insured lines of coverage, health insurance costs are accrued using estimates to approximate the liability for reported claims and incurred but not reported claims, which are primarily based upon an evaluation of historical claims experience, actuarially-determined completion factors and a qualitative review of our health insurance exposure including the extent of outstanding claims and expected changes in health insurance costs. Earnings per Share Basic earnings per share is computed as net income divided by the weighted average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the dilutive effect of potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. For the three and six months ended June 30, 2020, 288 thousand and 298 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2019, 557 thousand and 538 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2020, there were 352 thousand and 346 thousand anti-dilutive common stock equivalents, respectively. For the three and six months ended June 30, 2019, there were insignificant anti-dilutive common stock equivalents. New Accounting Standards Recently Adopted Accounting Standards 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. We adopted this standard using the modified retrospective approach as of January 1, 2020, as required. Refer to Note E - “Allowance for Credit Losses” additional accounting policy and transition disclosures related to our allowance for credit losses. In March 2020, the FASB issued authoritative guidance, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR and are affected by reference rate reform if certain criteria are met. Entities may adopt the provisions of the new standard as of the beginning of the reporting period when the election is made between March 12, 2020 through December 31, 2022. We adopted this optional standard effective January 1, 2020 using the prospective method, and utilized the optional expedients for cash flow hedges to assume that a hedged forecasted transaction is probable of occurring and that the reference rate will not be replaced for the remainder of a hedging relationship. 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 we do not expect this standard to have a material effect on our consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations During 2019, management completed the sale of our Government Solutions (“GS”) segment as a result of the Firm’s decision to focus solely on the commercial technical and professional staffing services and solutions space. The GS segment consisted of Kforce Government Solutions, Inc. (“KGS”), our federal government solutions business, and TraumaFX® Solutions, Inc. (“TFX”), our federal government product business. The results of operations for both KGS and TFX have been reported as discontinued operations in our consolidated financial statements for all prior periods presented. The following table summarizes the line items of pretax profit of the GS segment (in thousands): Three Months Ended Six Months Ended Revenue $ 1,311 $ 27,737 Direct costs 479 19,494 Gross profit 832 8,243 Selling, general and administrative expenses 1,424 6,842 Depreciation and amortization 58 307 (Loss) income from discontinued operations (650) 1,094 Gain on sale of discontinued operations 80,004 80,004 Other income (expense), net 428 (436) Income from discontinued operations, before income taxes 79,782 80,662 Income tax expense (1) 20,999 2,998 Income from discontinued operations, net of tax $ 58,783 $ 77,664 (1) During the three months ended March 31, 2019, we entered into a definitive agreement to sell KGS and recorded $18.5 million to deferred tax assets and income tax benefit since it became apparent that the temporary difference for the excess of the outside tax basis in the equity of KGS over the amount of the inside basis in the assets of KGS would reverse in the foreseeable future. This deferred tax asset of $18.5 million was utilized and recorded as income tax expense during the three months ended June 30, 2019 when the divestiture was completed. For the six months ended June 30, 2019, the accompanying Unaudited Condensed Consolidated Statements of Cash Flows are presented on a combined basis (continuing operations and discontinued operations) and cash provided by operating activities and cash provided by investing activities for discontinued operations were $5.1 million and $118.9 million, respectively. |
Reportable Segments
Reportable Segments | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Kforce provides services through our Technology (“Tech”) and Finance and Accounting (“FA”) segments. Historically, and for the three and six months ended June 30, 2020 and 2019, we have reported sales and gross profit information on a segment basis. Total assets, liabilities and operating expenses are not reported separately by segment as our operations are largely combined. The following table provides information on the operations of our segments (in thousands): Tech FA Total Three Months Ended June 30, 2020 Revenue $ 255,750 $ 87,270 $ 343,020 Gross profit $ 72,192 $ 25,169 $ 97,361 Operating and other expenses $ 83,353 Income from continuing operations, before income taxes $ 14,008 2019 Revenue $ 265,305 $ 73,556 $ 338,861 Gross profit $ 74,172 $ 26,854 $ 101,026 Operating and other expenses $ 79,962 Income from continuing operations, before income taxes $ 21,064 Six Months Ended June 30, 2020 Revenue $ 522,534 $ 155,694 $ 678,228 Gross profit $ 144,646 $ 47,239 $ 191,885 Operating and other expenses $ 165,343 Income from continuing operations, before income taxes $ 26,542 2019 Revenue $ 520,948 $ 144,651 $ 665,599 Gross profit $ 142,995 $ 51,207 $ 194,202 Operating and other expenses $ 162,348 Income from continuing operations, before income taxes $ 31,854 |
Disaggregation of Revenue
Disaggregation of Revenue | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregation of Revenue The following table provides the disaggregation of revenue by segment and type (in thousands): Tech FA Total Three Months Ended June 30, 2020 Revenue by type: Flex revenue $ 251,948 $ 84,469 $ 336,417 Direct Hire revenue 3,802 2,801 6,603 Total Revenue $ 255,750 $ 87,270 $ 343,020 2019 Revenue by type: Flex revenue $ 259,707 $ 65,647 $ 325,354 Direct Hire revenue 5,598 7,909 13,507 Total Revenue $ 265,305 $ 73,556 $ 338,861 Six Months Ended June 30, 2020 Revenue by type: Flex revenue $ 514,517 $ 148,009 $ 662,526 Direct Hire revenue 8,017 7,685 15,702 Total Revenue $ 522,534 $ 155,694 $ 678,228 2019 Revenue by type: Flex revenue $ 509,923 $ 130,412 $ 640,335 Direct Hire revenue 11,025 14,239 25,264 Total Revenue $ 520,948 $ 144,651 $ 665,599 |
Allowance for Credit Losses
Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses on trade receivables is determined based on a number of factors such as recent and historical write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of trade receivables among clients and the current state of the U.S. economy. As part of our analysis, we apply credit loss rates to outstanding receivables by aging category. For certain clients, we perform a quarterly credit review, which considers the client’s credit rating and financial position as well as our total credit loss exposure. Trade receivables are written off after all reasonable collection efforts have been exhausted. Recoveries of trade receivables previously written off are recorded when received and are immaterial for the three and six months ended June 30, 2020. The following table presents the activity within the allowance for credit losses on trade receivables for the six months ended June 30, 2020 (in thousands): Allowance for credit losses, January 1, 2020 (1) $ 1,843 Current period provision 2,835 Write-offs charged against the allowance, net of recoveries of amounts previously written off (548) Allowance for credit losses, June 30, 2020 $ 4,130 (1) As a result of the adoption of the new credit losses accounting standard, we recorded a cumulative effect adjustment to increase the allowance for credit losses of $0.3 million as of January 1, 2020. |
Other Assets, Net
Other Assets, Net | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets, Net | Other Assets, Net Other assets, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Assets held in Rabbi Trust $ 31,276 $ 35,413 Right-of-use assets for operating leases, net (1) 17,162 18,344 Capitalized software, net (2) 11,100 8,759 Equity method investment (3) 9,535 8,169 Deferred loan costs, net 678 855 Other non-current assets 970 1,298 Total Other assets, net $ 70,721 $ 72,838 (1) During the three months ended June 30, 2020, we recognized $0.9 million of expense related to impairment of certain ROU assets, which was recorded in SG&A in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income, due to the Firm’s decisions not to reoccupy certain of our leased offices. (2) Accumulated amortization of capitalized software was $34.7 million and $34.2 million as of June 30, 2020 and December 31, 2019, respectively. (3) In June 2019, Kforce entered into a joint venture resulting in a 50% noncontrolling interest in WorkLLama, LLC (“WorkLLama”), which is accounted for as an equity method investment. The loss on equity method investment was $0.5 million and $1.1 million for the three and six months ended June 30, 2020, respectively. Refer to Note M - “Commitments and Contingencies” for more information on contingencies related to WorkLLama. |
Current Liabilities
Current Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Current Liabilities | Current Liabilities The following table provides information on certain current liabilities (in thousands): June 30, 2020 December 31, 2019 Accounts payable and other accrued liabilities: Accounts payable $ 23,293 $ 20,267 Accrued liabilities 15,078 12,965 Total Accounts payable and other accrued liabilities $ 38,371 $ 33,232 Accrued payroll costs: Payroll and benefits $ 44,738 $ 38,035 Health insurance liabilities 5,155 3,907 Payroll taxes 3,395 992 Workers’ compensation liabilities 1,026 1,067 Total Accrued payroll costs $ 54,314 $ 44,001 Our accounts payable balance includes vendor and independent contractor payables. Our accrued liabilities balance includes the current portion of the deferred compensation plans liability, contract liabilities from contracts with customers (such as rebates) and other accrued liabilities. |
Other Long-Term Liabilities
Other Long-Term Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): June 30, 2020 December 31, 2019 Deferred compensation plan $ 28,237 $ 30,361 Supplemental executive retirement plan 18,501 18,080 Operating lease liabilities 14,834 14,627 Interest rate swap derivative instruments 2,314 179 Other long-term liabilities (1) 12,755 651 Total Other long-term liabilities $ 76,641 $ 63,898 |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Supplemental Executive Retirement Plan Kforce maintains a Supplemental Executive Retirement Plan (“SERP”) for the benefit of two executives. The SERP is a non-qualified benefit plan and does not include elective deferrals of covered executive officers’ compensation. The following table presents the components of net periodic benefit cost (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Service cost $ 86 $ 65 $ 172 $ 130 Interest cost 125 151 250 302 Net periodic benefit cost $ 211 $ 216 $ 422 $ 432 The service cost is recorded in SG&A and the interest cost is recorded in Other expense, net in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. The projected benefit obligation as of June 30, 2020 and December 31, 2019 was $18.5 million and $18.1 million, respectively, and is recorded in Other long-term liabilities in the accompanying Unaudited Condensed Consolidated Balance Sheets. There is no requirement for Kforce to fund the SERP and, as a result, no contributions were made to the SERP during the six months ended June 30, 2020. Kforce does not currently anticipate funding the SERP during the year ended December 31, 2020. |
Stock Incentive Plans
Stock Incentive Plans | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans On April 28, 2020, Kforce’s shareholders approved the 2020 Stock Incentive Plan (the “2020 Plan”). The 2020 Plan allows for the issuance of stock options, stock appreciation rights (“SAR”), stock awards (including restricted stock awards (“RSAs”) and restricted stock units (“RSUs”)) and other stock-based awards. The aggregate number of shares reserved under the 2020 Plan is approximately 3.6 million. Grants of an option or SAR reduce the reserve by one share, while a stock award reduces the reserve by 2.72 shares. The 2020 Plan terminates on April 28, 2030. Restricted stock (including RSAs and RSUs) are granted to directors, executives and management either for awards related to Kforce’s annual long-term incentive program or as part of a compensation package in order to retain directors, executives and management. Restricted stock granted during the six months ended June 30, 2020 will vest over a period of one During the three and six months ended June 30, 2020, stock-based compensation expense from continuing operations was $2.9 million and $5.8 million, respectively. During the three and six months ended June 30, 2019, stock-based compensation expense from continuing operations was $2.4 million and $5.0 million, respectively. The following table presents the restricted stock activity for the six months ended June 30, 2020 (in thousands, except per share amounts): Number of Weighted-Average Total Intrinsic Outstanding at December 31, 2019 1,180 $ 29.51 Granted 47 $ 28.44 Forfeited (12) $ 22.62 Vested (49) $ 29.64 $ 1,414 Outstanding at June 30, 2020 1,166 $ 29.53 As of June 30, 2020, total unrecognized stock-based compensation expense related to restricted stock was $26.8 million, which will be recognized over a weighted-average remaining period of 3.2 years. |
Derivative Instrument and Hedgi
Derivative Instrument and Hedging Activity | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instrument and Hedging Activity | Derivative Instruments and Hedging Activity On April 21, 2017, Kforce entered into a forward-starting interest rate swap agreement with Wells Fargo Bank, N.A (“Swap A”). Swap A was effective on May 31, 2017 and matures on April 29, 2022. Swap A has a fixed interest rate of 1.81% and a notional amount of $25.0 million at June 30, 2020. On March 12, 2020, Kforce entered into a forward-starting interest rate swap agreement with Wells Fargo Bank, N.A. (“Swap B”). Swap B was effective on March 17, 2020 and matures on May 30, 2025. Swap B has a fixed interest rate of 0.61% and a notional amount of $75.0 million at June 30, 2020, which increases to $100.0 million in May 2022, and subsequently decreases to $75.0 million and $40.0 million in May 2023 and May 2024, respectively. The increase in the notional amount of Swap B in May 2022 corresponds to the decrease in the notional amount for Swap A. The Firm uses interest rate swaps as an interest rate risk management tool to mitigate the potential impact of rising interest rates on variable rate debt. The fixed interest rate for each swap, plus the applicable interest margin under our credit facility, is included in interest expense and recorded in Other expense, net in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. Both Swap A and B have been designated as cash flow hedges and were effective at June 30, 2020. The change in the fair value of the swaps is recorded as a component of other comprehensive income in the consolidated financial statements. The following table sets forth the activity in the accumulated derivative instrument activity (in thousands): Six Months Ended June 30, 2020 2019 Accumulated derivative instrument (loss) gain, beginning of period $ (179) $ 900 Net change associated with current period hedging transactions (2,135) (1,015) Accumulated derivative instrument loss, end of period $ (2,314) $ (115) |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsOur interest rate swaps are measured at fair value using readily observable inputs, which are considered to be Level 2 inputs and are recorded in Other long-term liabilities within the accompanying Unaudited Condensed Consolidated Balance Sheets. Refer to Note K - “Derivative Instruments and Hedging Activity” for a complete discussion of our interest rate swaps. There were no transfers into or out of Level 1, 2 or 3 assets or liabilities during the six months ended June 30, 2020. The following table sets forth by level, within the fair value hierarchy, estimated fair values on a recurring basis (in thousands): Asset/(Liability) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant At June 30, 2020 Interest rate swap derivative instruments $ (2,314) $ — $ (2,314) $ — At December 31, 2019 Interest rate swap derivative instrument $ (179) $ — $ (179) $ — |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Employment Agreements Kforce has employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a six three Litigation and Loss Contingencies Unless otherwise noted below, there have been no material developments with regard to the legal proceedings previously disclosed in our 2019 Annual Report on Form 10-K. On August 23, 2019, Kforce Inc. was served with a complaint, as amended, which was 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’ allegations on behalf of themselves and a putative class of consumers/applicants who were the subject of consumer reports used for employment purposes, include 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 alleged 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, which was subject to approval by the Court. On June 18, 2020, the parties appeared before the Court for the hearing on the preliminary approval of the settlement. The Court verbally approved the settlement, and ordered the parties to submit a written order for rendering. Such order was submitted to the Court, and the parties are waiting for entry. 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. We are involved in legal proceedings, claims and administrative matters, and may also be exposed to loss contingencies, that arise in the ordinary course of business. We have made accruals with respect to certain of these matters, where appropriate, which are reflected in our unaudited condensed consolidated financial statements. While the ultimate outcome of these matters cannot be determined and any amounts accrued are inherently uncertain estimates, we currently do not expect that these matters, individually or in the aggregate, will have a material effect on our financial position. Equity Method Investment Under the joint venture operating agreement for WorkLLama, Kforce is obligated to make additional cash contributions, which are contingent on WorkLLama's achievement of certain operational and financial milestones. Our maximum potential capital contributions were $22.5 million. We contributed $9.0 million during the year ended December 31, 2019 and $2.5 million during the six months ended June 30, 2020. Refer to Note F - “Other Assets, Net” for more details on WorkLLama. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and footnotes normally required by GAAP for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although management believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2019 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments considered necessary for a fair presentation. The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2019 was derived from our audited Consolidated Balance Sheet as of December 31, 2019, as presented in our 2019 Annual Report on Form 10-K. |
Principles of Consolidation | The unaudited condensed consolidated financial statements include the accounts of Kforce Inc. and its subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “Kforce,” the “Company,” “we,” the “Firm,” “management,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context indicates otherwise. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most critical of these estimates and assumptions relate to the following: allowance for credit losses; income taxes; self-insured liabilities for health insurance and workers’ compensation; obligations for the pension plan; variable consideration for revenue recognition; and any asset impairments. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. |
Earnings per Share | Basic earnings per share is computed as net income divided by the weighted average number of common shares outstanding (“WASO”) during the period. WASO excludes unvested shares of restricted stock. Diluted earnings per share is computed by dividing net income by diluted WASO. Diluted WASO includes the dilutive effect of potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. For the three and six months ended June 30, 2020, 288 thousand and 298 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2019, 557 thousand and 538 thousand common stock equivalents were included in the diluted WASO, respectively. For the three and six months ended June 30, 2020, there were 352 thousand and 346 thousand anti-dilutive common stock equivalents, respectively. For the three and six months ended June 30, 2019, there were insignificant anti-dilutive common stock equivalents. |
New Accounting Standards, Recently Adopted and Accounting Standards Not Yet Adopted | Recently Adopted Accounting Standards 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. We adopted this standard using the modified retrospective approach as of January 1, 2020, as required. Refer to Note E - “Allowance for Credit Losses” additional accounting policy and transition disclosures related to our allowance for credit losses. In March 2020, the FASB issued authoritative guidance, which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference LIBOR and are affected by reference rate reform if certain criteria are met. Entities may adopt the provisions of the new standard as of the beginning of the reporting period when the election is made between March 12, 2020 through December 31, 2022. We adopted this optional standard effective January 1, 2020 using the prospective method, and utilized the optional expedients for cash flow hedges to assume that a hedged forecasted transaction is probable of occurring and that the reference rate will not be replaced for the remainder of a hedging relationship. 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 we do not expect this standard to have a material effect on our consolidated financial statements. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Pretax Profit for GS Segment | The following table summarizes the line items of pretax profit of the GS segment (in thousands): Three Months Ended Six Months Ended Revenue $ 1,311 $ 27,737 Direct costs 479 19,494 Gross profit 832 8,243 Selling, general and administrative expenses 1,424 6,842 Depreciation and amortization 58 307 (Loss) income from discontinued operations (650) 1,094 Gain on sale of discontinued operations 80,004 80,004 Other income (expense), net 428 (436) Income from discontinued operations, before income taxes 79,782 80,662 Income tax expense (1) 20,999 2,998 Income from discontinued operations, net of tax $ 58,783 $ 77,664 (1) During the three months ended March 31, 2019, we entered into a definitive agreement to sell KGS and recorded $18.5 million to deferred tax assets and income tax benefit since it became apparent that the temporary difference for the excess of the outside tax basis in the equity of KGS over the amount of the inside basis in the assets of KGS would reverse in the foreseeable future. This deferred tax asset of $18.5 million was utilized and recorded as income tax expense during the three months ended June 30, 2019 when the divestiture was completed. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Operations of Segments | The following table provides information on the operations of our segments (in thousands): Tech FA Total Three Months Ended June 30, 2020 Revenue $ 255,750 $ 87,270 $ 343,020 Gross profit $ 72,192 $ 25,169 $ 97,361 Operating and other expenses $ 83,353 Income from continuing operations, before income taxes $ 14,008 2019 Revenue $ 265,305 $ 73,556 $ 338,861 Gross profit $ 74,172 $ 26,854 $ 101,026 Operating and other expenses $ 79,962 Income from continuing operations, before income taxes $ 21,064 Six Months Ended June 30, 2020 Revenue $ 522,534 $ 155,694 $ 678,228 Gross profit $ 144,646 $ 47,239 $ 191,885 Operating and other expenses $ 165,343 Income from continuing operations, before income taxes $ 26,542 2019 Revenue $ 520,948 $ 144,651 $ 665,599 Gross profit $ 142,995 $ 51,207 $ 194,202 Operating and other expenses $ 162,348 Income from continuing operations, before income taxes $ 31,854 |
Disaggregation of Revenue (Tabl
Disaggregation of Revenue (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenues | The following table provides the disaggregation of revenue by segment and type (in thousands): Tech FA Total Three Months Ended June 30, 2020 Revenue by type: Flex revenue $ 251,948 $ 84,469 $ 336,417 Direct Hire revenue 3,802 2,801 6,603 Total Revenue $ 255,750 $ 87,270 $ 343,020 2019 Revenue by type: Flex revenue $ 259,707 $ 65,647 $ 325,354 Direct Hire revenue 5,598 7,909 13,507 Total Revenue $ 265,305 $ 73,556 $ 338,861 Six Months Ended June 30, 2020 Revenue by type: Flex revenue $ 514,517 $ 148,009 $ 662,526 Direct Hire revenue 8,017 7,685 15,702 Total Revenue $ 522,534 $ 155,694 $ 678,228 2019 Revenue by type: Flex revenue $ 509,923 $ 130,412 $ 640,335 Direct Hire revenue 11,025 14,239 25,264 Total Revenue $ 520,948 $ 144,651 $ 665,599 |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Allowance for Credit Losses | The following table presents the activity within the allowance for credit losses on trade receivables for the six months ended June 30, 2020 (in thousands): Allowance for credit losses, January 1, 2020 (1) $ 1,843 Current period provision 2,835 Write-offs charged against the allowance, net of recoveries of amounts previously written off (548) Allowance for credit losses, June 30, 2020 $ 4,130 (1) As a result of the adoption of the new credit losses accounting standard, we recorded a cumulative effect adjustment to increase the allowance for credit losses of $0.3 million as of January 1, 2020. |
Other Assets, Net (Tables)
Other Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets, Net | Other assets, net consisted of the following (in thousands): June 30, 2020 December 31, 2019 Assets held in Rabbi Trust $ 31,276 $ 35,413 Right-of-use assets for operating leases, net (1) 17,162 18,344 Capitalized software, net (2) 11,100 8,759 Equity method investment (3) 9,535 8,169 Deferred loan costs, net 678 855 Other non-current assets 970 1,298 Total Other assets, net $ 70,721 $ 72,838 (1) During the three months ended June 30, 2020, we recognized $0.9 million of expense related to impairment of certain ROU assets, which was recorded in SG&A in the accompanying Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income, due to the Firm’s decisions not to reoccupy certain of our leased offices. (2) Accumulated amortization of capitalized software was $34.7 million and $34.2 million as of June 30, 2020 and December 31, 2019, respectively. (3) In June 2019, Kforce entered into a joint venture resulting in a 50% noncontrolling interest in WorkLLama, LLC (“WorkLLama”), which is accounted for as an equity method investment. The loss on equity method investment was $0.5 million and $1.1 million for the three and six months ended June 30, 2020, respectively. Refer to Note M - “Commitments and Contingencies” for more information on contingencies related to WorkLLama. |
Current Liabilities (Tables)
Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | The following table provides information on certain current liabilities (in thousands): June 30, 2020 December 31, 2019 Accounts payable and other accrued liabilities: Accounts payable $ 23,293 $ 20,267 Accrued liabilities 15,078 12,965 Total Accounts payable and other accrued liabilities $ 38,371 $ 33,232 Accrued payroll costs: Payroll and benefits $ 44,738 $ 38,035 Health insurance liabilities 5,155 3,907 Payroll taxes 3,395 992 Workers’ compensation liabilities 1,026 1,067 Total Accrued payroll costs $ 54,314 $ 44,001 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): June 30, 2020 December 31, 2019 Deferred compensation plan $ 28,237 $ 30,361 Supplemental executive retirement plan 18,501 18,080 Operating lease liabilities 14,834 14,627 Interest rate swap derivative instruments 2,314 179 Other long-term liabilities (1) 12,755 651 Total Other long-term liabilities $ 76,641 $ 63,898 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The following table presents the components of net periodic benefit cost (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Service cost $ 86 $ 65 $ 172 $ 130 Interest cost 125 151 250 302 Net periodic benefit cost $ 211 $ 216 $ 422 $ 432 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Activity | The following table presents the restricted stock activity for the six months ended June 30, 2020 (in thousands, except per share amounts): Number of Weighted-Average Total Intrinsic Outstanding at December 31, 2019 1,180 $ 29.51 Granted 47 $ 28.44 Forfeited (12) $ 22.62 Vested (49) $ 29.64 $ 1,414 Outstanding at June 30, 2020 1,166 $ 29.53 |
Derivative Instrument and Hed_2
Derivative Instrument and Hedging Activity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
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 activity (in thousands): Six Months Ended June 30, 2020 2019 Accumulated derivative instrument (loss) gain, beginning of period $ (179) $ 900 Net change associated with current period hedging transactions (2,135) (1,015) Accumulated derivative instrument loss, end of period $ (2,314) $ (115) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table sets forth by level, within the fair value hierarchy, estimated fair values on a recurring basis (in thousands): Asset/(Liability) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant At June 30, 2020 Interest rate swap derivative instruments $ (2,314) $ — $ (2,314) $ — At December 31, 2019 Interest rate swap derivative instrument $ (179) $ — $ (179) $ — |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Accounting Policies [Abstract] | ||||
Common stock equivalents (in shares) | (288) | (557) | (298) | (538) |
Anti-dilutive common stock equivalents (in shares) | 352 | 346 | ||
Health insurance maximum risk of loss liability per employee insurance plan (up to) | $ 600 | |||
Health insurance maximum aggregate amount of risk of loss liability for employee insurance plans (up to) | $ 200 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - Discontinued Operations, Disposed of by Sale - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2020 | Mar. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash provided by (used in) operating activities for discontinued operations | $ 5,100 | ||
Cash provided by (used in) investing activities for discontinued operations | $ 118,900 | ||
Kforce Government Solutions, Inc.("KGS") | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Increase in deferred tax assets | $ 18,500 | ||
Deferred tax asset utilized | $ 18,500 |
Discontinued Operations - Summa
Discontinued Operations - Summary of Pretax Profit (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Gain on sale of discontinued operations | $ 0 | $ 80,004 | ||
Income from discontinued operations, net of tax | $ 0 | $ 58,783 | $ 0 | 77,664 |
Discontinued Operations, Disposed of by Sale | GS segment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenue | 1,311 | 27,737 | ||
Direct costs | 479 | 19,494 | ||
Gross profit | 832 | 8,243 | ||
Selling, general and administrative expenses | 1,424 | 6,842 | ||
Depreciation and amortization | 58 | 307 | ||
(Loss) income from discontinued operations | (650) | 1,094 | ||
Gain on sale of discontinued operations | 80,004 | 80,004 | ||
Other income (expense), net | 428 | (436) | ||
Income from discontinued operations, before income taxes | 79,782 | 80,662 | ||
Income tax expense | 20,999 | 2,998 | ||
Income from discontinued operations, net of tax | 58,783 | $ 77,664 | ||
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] | ||||
Income tax expense | $ 18,500 |
Reportable Segments - Schedule
Reportable Segments - Schedule (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Revenue | $ 343,020 | $ 338,861 | $ 678,228 | $ 665,599 |
Gross profit | 97,361 | 101,026 | 191,885 | 194,202 |
Operating and other expenses | 83,353 | 79,962 | 165,343 | 162,348 |
Income from continuing operations, before income taxes | 14,008 | 21,064 | 26,542 | 31,854 |
Tech | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 255,750 | 265,305 | 522,534 | 520,948 |
Gross profit | 72,192 | 74,172 | 144,646 | 142,995 |
FA | ||||
Segment Reporting Information [Line Items] | ||||
Revenue | 87,270 | 73,556 | 155,694 | 144,651 |
Gross profit | $ 25,169 | $ 26,854 | $ 47,239 | $ 51,207 |
Disaggregation of Revenue (Deta
Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 343,020 | $ 338,861 | $ 678,228 | $ 665,599 |
Flex revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 336,417 | 325,354 | 662,526 | 640,335 |
Direct Hire revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 6,603 | 13,507 | 15,702 | 25,264 |
Tech | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 255,750 | 265,305 | 522,534 | 520,948 |
Tech | Flex revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 251,948 | 259,707 | 514,517 | 509,923 |
Tech | Direct Hire revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 3,802 | 5,598 | 8,017 | 11,025 |
FA | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 87,270 | 73,556 | 155,694 | 144,651 |
FA | Flex revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 84,469 | 65,647 | 148,009 | 130,412 |
FA | Direct Hire revenue | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 2,801 | $ 7,909 | $ 7,685 | $ 14,239 |
Allowance for Credit Losses (De
Allowance for Credit Losses (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Allowance for credit losses, beginning balance | $ 1,843 | $ 1,843 | ||
Provision for credit losses | 2,835 | $ 797 | ||
Write-offs charged against the allowance, net of recoveries of amounts previously written off | (548) | |||
Allowance for credit losses, ending balance | 4,130 | |||
Reserves unrelated to credit losses | $ 400 | $ 500 | ||
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | ||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Cumulative effect adjustment to increase allowance for credit losses | $ 300 |
Other Assets, Net (Details)
Other Assets, Net (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Assets held in Rabbi Trust | $ 31,276 | $ 35,413 |
Right-of-use assets for operating leases, net (1) | 17,162 | 18,344 |
Capitalized software, net | 11,100 | 8,759 |
Equity method investment | 9,535 | 8,169 |
Deferred loan costs, net | 678 | 855 |
Other non-current assets | 970 | 1,298 |
Total Other assets, net | 70,721 | 72,838 |
Impairment of Right-of-Use assets | 900 | |
Accumulated amortization of capitalized software | $ 34,700 | $ 34,200 |
Other Assets, Net - Equity Meth
Other Assets, Net - Equity Method Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Schedule of Equity Method Investments [Line Items] | |||
Loss on equity method investment | $ 1,134 | $ 0 | |
WorkLLama | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership percentage | 50.00% | ||
Loss on equity method investment | $ 500 | $ 1,100 |
Current Liabilities (Details)
Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts payable and other accrued liabilities: | ||
Accounts payable | $ 23,293 | $ 20,267 |
Accrued liabilities | 15,078 | 12,965 |
Total Accounts payable and other accrued liabilities | 38,371 | 33,232 |
Accrued payroll costs: | ||
Payroll and benefits | 44,738 | 38,035 |
Health insurance liabilities | 5,155 | 3,907 |
Payroll taxes | 3,395 | 992 |
Workers’ compensation liabilities | 1,026 | 1,067 |
Total Accrued payroll costs | $ 54,314 | $ 44,001 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation plan | $ 28,237 | $ 30,361 |
Supplemental executive retirement plan | 18,501 | 18,080 |
Operating lease liabilities | 14,834 | 14,627 |
Interest rate swap derivative instruments | 2,314 | 179 |
Other long-term liabilities | 12,755 | 651 |
Total Other long-term liabilities | 76,641 | $ 63,898 |
Deferred 2020 FICA payroll tax payments, CARES Act | $ 12,300 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Retirement Benefits [Abstract] | ||||
Service cost | $ 86 | $ 65 | $ 172 | $ 130 |
Interest cost | 125 | 151 | 250 | 302 |
Net periodic benefit cost | $ 211 | $ 216 | $ 422 | $ 432 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | ||
Supplemental executive retirement plan | $ 18,501,000 | $ 18,080,000 |
Employer contributions to benefit plans | 0 | |
Expected funding of the SERP in the current year | $ 0 |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 28, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 2.9 | $ 2.4 | $ 5.8 | $ 5 | |
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total unrecognized compensation expenses | $ 26.8 | $ 26.8 | |||
Weighted average period expected to be recognized | 3 years 2 months 12 days | ||||
Restricted Stock | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | ||||
Restricted Stock | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 10 years | ||||
2020 Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares available for grant (in shares) | 3.6 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Number of Restricted Stock | |
Outstanding, at beginning of period (in shares) | shares | 1,180 |
Granted (in shares) | shares | 47 |
Forfeited (in shares) | shares | (12) |
Vested (in shares) | shares | (49) |
Outstanding, at end of period (in shares) | shares | 1,166 |
Weighted Average Grant Date Fair Value | |
Outstanding, as of beginning of period (in dollars per share) | $ / shares | $ 29.51 |
Granted (in dollars per share) | $ / shares | 28.44 |
Forfeited (in dollars per share) | $ / shares | 22.62 |
Vested (in dollars per share) | $ / shares | 29.64 |
Outstanding, as of end of period (in dollars per share) | $ / shares | $ 29.53 |
Total Intrinsic Value of Restricted Stock Vested | |
Vested | $ | $ 1,414 |
Derivative Instrument and Hed_3
Derivative Instrument and Hedging Activity - Narrative (Details) - Designated as Hedging Instrument - USD ($) | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2020 | Mar. 17, 2020 | May 31, 2017 |
Interest Rate Swap A | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative rate | 1.81% | |||||
Derivative, notional amount | $ 25,000,000 | |||||
Interest Rate Swap B | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative rate | 0.61% | |||||
Derivative, notional amount | $ 75,000,000 | |||||
Interest Rate Swap B | Scenario, Forecast | ||||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||||||
Derivative, notional amount | $ 40,000,000 | $ 75,000,000 | $ 100,000,000 |
Derivative Instrument and Hed_4
Derivative Instrument and Hedging Activity - Accumulated Derivative Instrument Gain (Loss) Activity (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at beginning of period | $ 167,263 | $ 168,331 |
Balance at end of period | 152,476 | 214,856 |
Accumulated Derivative Instrument Gain | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Balance at beginning of period | (179) | 900 |
Net change associated with current period hedging transactions | (2,135) | (1,015) |
Balance at end of period | $ (2,314) | $ (115) |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Estimated Fair Values (Details) - Recurring Basis - Interest Rate Swap - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instruments | $ (2,314) | $ (179) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instruments | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instruments | (2,314) | (179) |
Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap derivative instruments | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Other Commitments [Line Items] | |||
Unemployment benefits, possible liability with a change in control | $ 39,700 | ||
Unemployment benefits, possible liability without a change in control | 16,800 | ||
Maximum potential capital contributions | 22,500 | ||
Payments to acquire equity method investment | 2,500 | $ 7,500 | |
WorkLLama | |||
Other Commitments [Line Items] | |||
Payments to acquire equity method investment | $ 2,500 | $ 9,000 | |
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% |