Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 29, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | KFORCE INC | |
Entity Central Index Key | 930,420 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 27,776,188 |
UNAUDITED CONDENSED CONSOLIDATE
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Net service revenues | $ 322,201 | $ 312,611 |
Direct costs of services | 225,012 | 217,871 |
Gross profit | 97,189 | 94,740 |
Selling, general and administrative expenses | 85,568 | 82,352 |
Depreciation and amortization | 2,327 | 2,397 |
Income from operations | 9,294 | 9,991 |
Other expense, net | 555 | 453 |
Income before income taxes | 8,739 | 9,538 |
Income tax expense | 5,089 | 3,753 |
Net income | 3,650 | 5,785 |
Other comprehensive (loss) income: | ||
Defined benefit pension plans, net of tax | (3) | 1 |
Comprehensive income | $ 3,647 | $ 5,786 |
Earnings per share – basic (in dollars per share) | $ 0.14 | $ 0.20 |
Earnings per share – diluted (in dollars per share) | $ 0.14 | $ 0.20 |
Weighted average shares outstanding – basic (in shares) | 26,693 | 28,276 |
Weighted average shares outstanding – diluted (in shares) | 26,842 | 28,475 |
Dividends declared per share (in dollars per share) | $ 0.12 | $ 0.11 |
UNAUDITED CONDENSED CONSOLIDAT3
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 920 | $ 1,497 |
Trade receivables, net of allowances of $2,468 and $2,121, respectively | 210,444 | 198,933 |
Income tax refund receivable | 67 | 526 |
Deferred tax assets, net | 3,815 | 4,518 |
Prepaid expenses and other current assets | 10,463 | 9,060 |
Total current assets | 225,709 | 214,534 |
Fixed assets, net | 37,599 | 37,476 |
Other assets, net | 28,474 | 28,671 |
Deferred tax assets, net | 18,298 | 20,938 |
Intangible assets, net | 4,043 | 4,235 |
Goodwill | 45,968 | 45,968 |
Total assets | 360,091 | 351,822 |
Current Liabilities: | ||
Accounts payable and other accrued liabilities | 35,667 | 39,227 |
Accrued payroll costs | 50,537 | 46,125 |
Other current liabilities | 1,368 | 1,287 |
Income taxes payable | 1,621 | 1,107 |
Total current liabilities | 89,193 | 87,746 |
Long-term debt – credit facility | 103,454 | 80,472 |
Long-term debt – other | 3,546 | 3,351 |
Other long-term liabilities | 42,311 | 40,626 |
Total liabilities | $ 238,504 | $ 212,195 |
Commitments and contingencies | ||
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, 71,023 and 70,558 issued, respectively | 710 | 705 |
Additional paid-in capital | 422,862 | 420,276 |
Accumulated other comprehensive income | 315 | 318 |
Retained earnings | 155,456 | 155,096 |
Treasury stock, at cost; 43,294 and 42,130 shares, respectively | (457,756) | (436,768) |
Total stockholders’ equity | 121,587 | 139,627 |
Total liabilities and stockholders’ equity | $ 360,091 | $ 351,822 |
UNAUDITED CONDENSED CONSOLIDAT4
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 2,468 | $ 2,121 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 71,023,000 | 70,558,000 |
Treasury stock, shares (in shares) | 43,294,000 | 42,130,000 |
UNAUDITED CONDENSED CONSOLIDAT5
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY - 3 months ended Mar. 31, 2016 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Treasury Stock |
Shares at beginning of period (in shares) at Dec. 31, 2015 | 70,558 | 42,130 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance for stock-based compensation and dividends, net of forfeitures (in shares) | 455 | |||||
Exercise of stock options (in shares) | 10 | |||||
Repurchases of common stock (in shares) | 1,172 | |||||
Employee stock purchase plan (in shares) | (8) | |||||
Shares at end of period (in shares) at Mar. 31, 2016 | 71,023 | 43,294 | ||||
Balance at beginning of period at Dec. 31, 2015 | $ 139,627 | $ 705 | $ 420,276 | $ 318 | $ 155,096 | $ (436,768) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance for stock-based compensation and dividends, net of forfeitures | 5 | 139 | ||||
Exercise of stock options | 0 | 109 | ||||
Income tax benefit from stock-based compensation | 285 | |||||
Stock-based compensation expense | 1,944 | |||||
Repurchases of common stock | (21,071) | |||||
Employee stock purchase plan | 192 | 109 | 83 | |||
Defined benefit pension plans, net of tax | (3) | (3) | ||||
Net income | 3,650 | 3,650 | ||||
Dividends, net of forfeitures ($0.12 per share) | (3,290) | |||||
Balance at end of period at Mar. 31, 2016 | $ 121,587 | $ 710 | $ 422,862 | $ 315 | $ 155,456 | $ (457,756) |
UNAUDITED CONDENSED CONSOLIDAT6
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY (Parenthetical) | 3 Months Ended |
Mar. 31, 2016$ / shares | |
Dividend (in dollars per share) | $ 0.12 |
Retained Earnings | |
Dividend (in dollars per share) | $ 0.12 |
UNAUDITED CONDENSED CONSOLIDAT7
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net income | $ 3,650 | $ 5,785 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Deferred income tax provision, net | 3,343 | 686 |
Provision for bad debts on accounts receivable | 356 | 1,047 |
Depreciation and amortization | 2,337 | 2,400 |
Stock-based compensation expense | 1,944 | 1,291 |
Defined benefit pension plans expense | 497 | 492 |
Excess tax benefit attributable to stock-based compensation | (285) | (236) |
Loss on deferred compensation plan investments, net | 171 | 74 |
Other | 56 | 37 |
(Increase) decrease in operating assets | ||
Trade receivables, net | (11,867) | 180 |
Income tax refund receivable | 459 | 2,588 |
Prepaid expenses and other current assets | (1,404) | (68) |
Other assets, net | (95) | (90) |
(Decrease) increase in operating liabilities | ||
Accounts payable and other current liabilities | (2,548) | (201) |
Accrued payroll costs | 4,604 | (3,385) |
Income taxes payable | 799 | 413 |
Other long-term liabilities | 1,039 | 395 |
Cash provided by operating activities | 3,056 | 11,408 |
Cash flows from investing activities: | ||
Capital expenditures | (1,294) | (1,389) |
Cash used in investing activities | (1,294) | (1,389) |
Cash flows from financing activities: | ||
Proceeds from bank line of credit | 251,095 | 157,806 |
Payments on bank line of credit | (228,113) | (156,813) |
Payments on other financing arrangements | (485) | (324) |
Proceeds from exercise of stock options | 109 | 245 |
Excess tax benefit attributable to stock-based compensation | 285 | 236 |
Repurchases of common stock | (22,084) | (8,507) |
Cash dividend | (3,146) | (3,112) |
Other | 0 | 1,140 |
Cash used in financing activities | (2,339) | (9,329) |
Change in cash and cash equivalents | (577) | 690 |
Cash and cash equivalents at beginning of period | 1,497 | 1,238 |
Cash and cash equivalents at end of period | $ 920 | $ 1,928 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
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 2015 Annual Report on Form 10-K. Organization and Nature of Operations Kforce Inc. and its subsidiaries (collectively, “Kforce”) provide professional staffing services and solutions to customers in the following segments: Technology (“Tech”), Finance and Accounting (“FA”), and Government Solutions (“GS”). Kforce provides flexible staffing services and solutions on both a temporary and full-time basis. Kforce operates through its corporate headquarters in Tampa, Florida and 62 field offices located throughout the United States. Additionally, one of our subsidiaries, Kforce Global Solutions, Inc. (“Global”), provides information technology outsourcing services internationally through an office in Manila, Philippines. Our international operations comprised less than 2% of net service revenues for both the three months ended March 31, 2016 and 2015 and are included in our Tech segment. Kforce serves clients from the Fortune 1000, the Federal Government, state and local governments, local and regional companies and small to mid-sized companies. 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 accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although Kforce believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2015 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of our Unaudited Condensed Consolidated Balance Sheet as of March 31, 2016 , our Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income for the three months ended March 31, 2016 and our Unaudited Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016 . The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015 was derived from our audited Consolidated Balance Sheet as of December 31, 2015 , as presented in our 2015 Annual Report on Form 10-K. Certain prior year amounts have been reclassified in the Unaudited Condensed Consolidated Statements of Cash Flows to conform to the current year presentation. Our quarterly operating results are affected by the number of billing days in a quarter and the seasonality of our customers’ businesses. In addition, we experience an increase in direct costs of services and a corresponding decrease in gross profit in the first fiscal quarter of each year as a result of certain U.S. state and federal employment tax resets. Thus, the results of operations for any interim period 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 wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “the Registrant,” “Kforce,” “the Company,” “we,” “the Firm,” “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 important of these estimates and assumptions relate to the following: allowance for doubtful accounts, fallouts and other accounts receivable reserves; accounting for goodwill and identifiable intangible assets and any related impairment; self-insured liabilities for workers’ compensation and health insurance; stock-based compensation; obligations for pension plans; accounting for income taxes and expected annual commission rates. 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 for each health insurance plan participant up to $350 thousand in claims annually. Additionally, for all claim amounts exceeding $350 thousand, Kforce retains the risk of loss up to an aggregate annual loss of those claims of $450 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 (“IBNR”) 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 earnings divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding excludes unvested shares of restricted stock. Diluted earnings per common share is computed by dividing the earnings attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period plus the dilutive effect of stock options and other 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 months ended March 31, 2016 and 2015 , there were 149 thousand and 199 thousand common stock equivalents included in the diluted weighted average shares outstanding. For the three months ended March 31, 2016 and 2015 , there was an insignificant amount of common stock equivalents excluded from the weighted average diluted common shares based on the fact that their inclusion would have had an anti-dilutive effect on earnings per share. Dividends Kforce’s Board of Directors (“Board”) may, at its discretion, declare and pay dividends on the outstanding shares of Kforce’s common stock out of retained earnings, subject to statutory requirements. Dividends for any outstanding and unvested restricted stock as of the record date are awarded in the form of additional shares of forfeitable restricted stock, at the same rate as the cash dividend on common stock and based on the closing stock price on the record date. Such additional shares have the same vesting terms and conditions as the outstanding and unvested restricted stock. The declaration, payment and amount of future dividends are discretionary and will be subject to determination by Kforce's Board each quarter following its review of, among other things, the Firm's financial performance and its legal ability to pay dividends. New Accounting Standards In March 2016, the FASB issued authoritative guidance regarding the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is to be applied for annual periods beginning after December 15, 2016 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively depending on the amendment(s) applied. Kforce elected not to adopt this standard early. Kforce is currently evaluating the potential impact on the consolidated financial statements. In February 2016, the FASB issued authoritative guidance regarding the accounting for leases. The guidance is to be applied for annual periods beginning after December 15, 2018 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively to all prior periods presented, including interim periods. Kforce elected not to adopt this standard early. Kforce is currently evaluating the potential impact on the consolidated financial statements. In November 2015, the FASB issued authoritative guidance requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is to be applied for annual periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. Kforce elected not to adopt this standard early. Kforce anticipates a change to the presentation of the deferred tax liabilities and assets on the consolidated balance sheets upon adoption. In May 2014, the FASB issued authoritative guidance regarding revenue from contracts with customers, which specifies that revenue should be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued authoritative guidance deferring the effective date of the new revenue standard by one year for all entities. The one-year deferral results in the guidance being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and entities are not permitted to adopt the standard earlier than the original effective date. In March 2016, the FASB issued authoritative guidance clarifying the implementation guidance on principal versus agent consideration. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We have not yet selected a transition method. We do not currently anticipate a material impact to the consolidated financial statements upon adoption; however, we do anticipate an increase in the level of disclosure around our arrangements and resulting revenue recognition. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation We are involved in legal proceedings, claims, and administrative matters that arise in the ordinary course of our business. We have made accruals with respect to certain of these matters, where appropriate, that are reflected in our unaudited condensed 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 such 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, 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. Employment Agreements Kforce has entered into employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a six -month to a three -year period after their employment ends under certain circumstances. Certain of the agreements also provide for a severance payment of one to three times annual salary and one-half to three times average annual bonus if such an agreement is terminated without good cause by Kforce or for good reason by the executive. These agreements contain certain post-employment restrictive covenants. Kforce’s liability at March 31, 2016 would be approximately $49.0 million if, following a change in control, all of the executives under contract were terminated without good cause by the employer or if the executives resigned for good reason and $21.5 million if, in the absence of a change in control, all of the executives under contract were terminated by Kforce without good cause or if the executives resigned for good reason. Kforce has not recorded any liability related to the employment agreements as no events have occurred that would require payment under the agreements. |
Credit Facility
Credit Facility | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility On September 20, 2011, Kforce entered into a Third Amended and Restated Credit Agreement, with a syndicate led by Bank of America, N.A. This was amended on March 30, 2012 through the execution of a Consent and First Amendment, on December 27, 2013 through the execution of a Second Amendment and Joinder, and further amended on December 23, 2014 through the execution of a Third Amendment (as amended to date, the “Credit Facility”) resulting in a maximum borrowing capacity of $170.0 million , as well as an accordion option of $50.0 million . The maximum borrowings available to Kforce under the Credit Facility are limited to: (a) a revolving Credit Facility of up to $170.0 million (the “Revolving Loan Amount”) and (b) a $15.0 million sub-limit included in the Credit Facility for letters of credit. Available borrowings under the Credit Facility are limited to 85% of the net amount of eligible accounts receivable (billed and unbilled), plus 80% of the net amount of eligible employee placement accounts, minus certain minimum availability reserves; provided, that the Firm may, subject to certain conditions, elect to increase the available borrowing limitation based on a percentage of the appraised fair market value of the Firm's corporate headquarters property and/or an additional percentage of net eligible accounts receivable, net eligible unbilled accounts receivable and net eligible employee placement accounts. On April 15, 2016, Kforce executed a consent with each lender electing to increase the available borrowing limitation by including the Firm's corporate headquarters. The corporate headquarters additional borrowing base amount is limited to 80% of the appraised market value, which amount shall be reduced each subsequent quarter by an amount equal to 1/80th of the initial amount. Borrowings under the Credit Facility are secured by substantially all of the assets of the Firm. Outstanding borrowings under the Revolving Loan Amount bear interest at a rate of: (a) LIBOR plus an applicable margin based on various factors; or (b) the higher of (1) the prime rate, (2) the federal funds rate plus 0.50% or (3) LIBOR plus 1.25%. Fluctuations in the ratio of unbilled to billed receivables could result in material changes to availability from time to time. Letters of credit issued under the Credit Facility require Kforce to pay a fronting fee equal to 0.125% of the amount of each letter of credit issued, plus a per annum fee equal to the applicable margin for LIBOR loans based on the total letters of credit outstanding. To the extent that Kforce has unused availability under the Credit Facility, an unused line fee is required to be paid on a monthly basis equal to: (a) if the average daily aggregate revolver outstanding are less than 35% of the amount of the commitments, 0.35% or (b) if the average daily aggregate revolver outstanding are greater than 35% of the amount of the commitments, 0.25% times the amount by which the maximum revolver amount exceeded the sum of the average daily aggregate revolver outstanding, during the immediately preceding month or shorter period if calculated for the first month hereafter or on the termination date. Under the Credit Facility, Kforce is subject to certain affirmative and negative covenants including, but not limited to, a fixed charge coverage ratio, which is only applicable in the event that the Firm’s availability under the Credit Facility falls below the greater of (i) 10% of the aggregate amount of the commitment of all of the lenders under the Credit Facility and (ii) $11 million . 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, including the amortization of stock-based compensation expense, less cash paid for capital expenditures. The denominator is defined as Kforce’s fixed charges such as interest expense, principal payments paid or payable on outstanding debt other than borrowings under the Credit Facility, income taxes payable, and certain other payments. This financial covenant, if applicable, requires that the numerator be equal to or greater than the denominator. Our ability to repurchase equity securities could be limited if the Firm's availability is less than the greater of (i) 15.0% of the aggregate amount of the commitment of all lenders under the Credit Facility or (ii) $15.0 million . Also, our ability to make distributions could be limited if the Firm's availability is less than the greater of (i) 12.5% of the aggregate amount of the commitment of all lenders under the Credit Facility or (ii) $20.6 million . Since Kforce had availability under the Credit Facility of $42.0 million as of March 31, 2016 , the fixed charge coverage ratio covenant was not applicable nor was Kforce limited in making distributions or repurchases of its equity securities. Kforce believes that it will be able to maintain these minimum availability requirements; however, in the event that Kforce is unable to do so, Kforce could fail the fixed charge coverage ratio, which would constitute an event of default, or we could be limited in our ability to make distributions or repurchase equity securities. The Credit Facility expires December 23, 2019. As of March 31, 2016 , $103.5 million was outstanding under the Credit Facility. As of April 29, 2016 , $108.6 million was outstanding and $44.9 million was available under the Credit Facility. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans Supplemental Executive Retirement Plan Kforce maintains a Supplemental Executive Retirement Plan (the “SERP”) for the benefit of certain executive officers. The primary goals of the SERP are to create an additional wealth accumulation opportunity, restore lost qualified pension benefits due to government limitations and retain our covered executive officers. The SERP is a non-qualified benefit plan and does not include elective deferrals of covered executive officers’ compensation. 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. Vesting under the plan is defined as 100% upon a participant’s attainment of age 55 and 10 years of service and 0% prior to a participant’s attainment of age 55 and 10 years of service. Full vesting also occurs if a participant with five years or more of service is involuntarily terminated by Kforce without cause or upon death, disability or a change in control. The SERP will be funded entirely by Kforce, and benefits are taxable to the covered executive officer upon receipt and 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 normally paid based on the lump sum present value but may be paid over the life of the covered executive officer or as a 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, Kforce has assumed that all participants will elect to take the lump sum present value option, based on historical trends. The following represents the components of net periodic benefit cost for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Service cost $ 328 $ 330 Interest cost 113 96 Net periodic benefit cost $ 441 $ 426 The net periodic benefit cost recognized for the three months ended March 31, 2016 was based upon the actuarial valuation as of the beginning of the year, which utilized the assumptions noted in our 2015 Annual Report on Form 10-K. The projected benefit obligation as of March 31, 2016 and December 31, 2015 was $11.8 million and $11.3 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 three months ended March 31, 2016 . Kforce does not currently anticipate funding the SERP during the year ended December 31, 2016 . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy and a framework which requires categorizing assets and liabilities into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. 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. The Company uses the following valuation techniques to measure fair value. The underlying investments within Kforce's deferred compensation plan have included money market funds, which are held within the Rabbi Trust. These money market fund assets are measured on a recurring basis and are recorded at fair value based on each fund's quoted market value per share in an active market, which is considered a Level 1 input. The carrying value of the outstanding borrowings under the credit facility approximates its fair value as it is based on a variable rate that changes based on market conditions. The inputs used to calculate the fair value of the credit facility are considered to be Level 2 inputs. The contingent consideration liability, which is related to a non-significant acquisition of a business within our GS reporting segment in the fourth quarter of 2014, is measured on a recurring basis and is recorded at fair value, determined using the discounted cash flow method. The inputs used to calculate the fair value of the contingent consideration liability are considered to be Level 3 inputs due to the lack of relevant market activity and significant management judgment. An increase in future cash flows may result in a higher estimated fair value while a decrease in future cash flows may result in a lower estimated fair value of the contingent consideration liability. The remeasurements to fair value are recorded in Other expense, net within the Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income. The contingent consideration liability is recorded in Other long-term liabilities within the Unaudited Condensed Consolidated Balance Sheets. Certain assets, in specific circumstances, are measured at fair value on a non-recurring basis utilizing Level 3 inputs such as goodwill, other intangible assets, and other long-lived assets. For these assets, measurement at fair value in periods subsequent to their initial recognition would be applicable if one or more of these assets were determined to be impaired. There were no transfers into or out of Level 1, 2 or 3 assets or liabilities during the three months ended March 31, 2016 . The estimated fair values on Kforce’s financial statements as of March 31, 2016 and December 31, 2015 were as follows (in thousands): Assets/(Liabilities) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant As of March 31, 2016 Recurring basis: Money market funds $ 36 $ 36 $ — $ — Contingent consideration liability $ (798 ) $ — $ — $ (798 ) As of December 31, 2015 Recurring basis: Money market funds $ 36 $ 36 $ — $ — Contingent consideration liability $ (798 ) $ — $ — $ (798 ) |
Stock Incentive Plans
Stock Incentive Plans | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Incentive Plans | Stock Incentive Plans On April 19, 2016, the shareholders approved the 2016 Stock Incentive Plan ("2016 Plan"). The 2016 Plan allows for the issuance of stock options, stock appreciation rights, stock awards (including restricted stock and restricted stock unit awards) and other stock-based awards. The aggregate number of shares of common stock that are subject to awards under the 2016 Plan is 650 thousand shares plus any shares of common stock that, as of the date of the 2016 Plan is approved by the shareholders, are reserved and available for grant or issuance under the 2013 Stock Incentive Plan ("2013 Plan") and the 2006 Stock Incentive Plan ("2006 Plan"). The 2016 Plan terminates on April 19, 2026. Prior to the effective date of the 2016 Plan, the Company granted stock awards to eligible participants under our 2013 Plan and 2006 Plan. As of the effective date of the 2016 Plan, no additional awards may be granted pursuant to the 2013 Plan and 2006 Plan; however, awards outstanding as of the effective date will continue to vest in accordance with the terms of the 2013 Plan and 2006 Plan, respectively. On April 5, 2013, the shareholders approved the 2013 Plan and the aggregate number of shares of common stock that were subject to awards under the 2013 Plan, subject to adjustment upon a change in capitalization, was 4.0 million. On June 20, 2006, the shareholders approved the 2006 Plan and, as amended, the aggregate number of shares of common stock that were subject to awards under the 2006 Plan was 7.9 million. The 2013 Plan and 2006 Plan allowed for the issuance of stock options, stock appreciation rights, restricted stock and common stock, subject to share availability. The 2013 Plan terminates on April 5, 2023 . The 2006 Plan expired on April 28, 2016 . During the three months ended March 31, 2016 and 2015 , Kforce recognized total stock-based compensation expense of $1.9 million and $1.3 million, respectively. Restricted Stock Kforce's annual restricted stock grants made to executives and management are generally based on the extent by which annual long-term incentive performance goals, which are established by Kforce’s Compensation Committee during the first quarter of the year of performance, have been met, as determined by the Compensation Committee. Additionally, Kforce, with the approval of the Compensation Committee, grants restricted stock in varying amounts as determined appropriate during the year to retain executives and management. Restricted stock granted during the three months ended March 31, 2016 will vest over a period of between five to ten years , with equal vesting annually. Restricted stock contain the same voting rights as other common stock and are included in the number of shares of common stock issued and outstanding. Restricted stock contain the right to forfeitable dividends in the form of additional shares of restricted stock at the same rate as the cash dividend on common stock and containing the same vesting provisions as the underlying award. The following table presents the activity for the three months ended March 31, 2016 (in thousands, except per share amounts): Number of Restricted Stock Weighted Average Total Intrinsic Outstanding as of December 31, 2015 1,293 $ 20.89 Granted 538 $ 22.72 Forfeited/Canceled (84 ) $ 21.70 Vested (157 ) $ 21.08 $ 3,972 Outstanding as of March 31, 2016 1,590 $ 21.44 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 March 31, 2016 , total unrecognized compensation expense related to restricted stock was $26.1 million, which will be recognized over a weighted average remaining period of 4.6 years. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table sets forth the activity in goodwill and other intangible assets during the three months ended March 31, 2016 (in thousands): Goodwill Intangible Assets, Net Balance as of December 31, 2015 $ 45,968 $ 4,235 Amortization of intangible assets — (192 ) Balance as of March 31, 2016 $ 45,968 $ 4,043 As of March 31, 2016 and December 31, 2015 , Intangible assets, net in the accompanying Unaudited Condensed Consolidated Balance Sheets consisted of $1.8 million and $2.0 million, respectively, of definite-lived intangible assets including customer relationships, customer contracts, technology and other and $2.2 million of an indefinite-lived intangible asset including a trade name and trademark. As of March 31, 2016 and December 31, 2015 , accumulated amortization for intangible assets was $26.8 million and $26.6 million, respectively. The following table presents the estimated amortization expense for intangibles over the next five years and thereafter (in thousands): Remainder of 2016 $ 401 2017 345 2018 345 2019 334 2020 212 Thereafter 166 Total $ 1,803 |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Kforce’s reportable segments are as follows: (1) Tech; (2) FA; and (3) GS. This determination is supported by, among other factors: the existence of individuals responsible for the operations of each segment and who also report directly to our chief operating decision maker (“CODM”), the nature of the segment’s operations and information presented to the Board and our CODM. Kforce also reports Flexible billings and Direct Hire fees separately by segment, which has been incorporated into the table below. Historically, and for the three months ended March 31, 2016 and 2015 , Kforce has generated only sales and gross profit information on a segment basis. Substantially all operations and long-lived assets are located in the United States. We do not report total assets or income separately by segment as our operations are largely combined. The following table provides information concerning the operations of our segments for the three months ended March 31, 2016 and 2015 (in thousands): Tech FA GS Total Three Months Ended March 31, 2016 Net service revenues: Flexible billings $ 211,209 $ 75,306 $ 23,121 $ 309,636 Direct Hire fees 5,379 7,186 — 12,565 Total net service revenues $ 216,588 $ 82,492 $ 23,121 $ 322,201 Gross profit $ 61,791 $ 28,821 $ 6,577 $ 97,189 Operating expenses 88,450 Income before income taxes $ 8,739 2015 Net service revenues: Flexible billings $ 208,438 $ 66,194 $ 25,900 $ 300,532 Direct Hire fees 5,201 6,878 — 12,079 Total net service revenues $ 213,639 $ 73,072 $ 25,900 $ 312,611 Gross profit $ 60,217 $ 25,689 $ 8,834 $ 94,740 Operating expenses 85,202 Income before income taxes $ 9,538 |
Other Long-Term Liabilities
Other Long-Term Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands): March 31, 2016 December 31, 2015 Deferred compensation plan $ 25,695 $ 24,238 Supplemental executive retirement plan 11,777 11,337 Other 4,839 5,051 $ 42,311 $ 40,626 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is as follows for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Cash paid during the period for: Income taxes, net $ 476 $ 79 Interest, net $ 466 $ 417 Non-Cash Transaction Information: Employee stock purchase plan $ 192 $ 152 Equipment acquired under capital leases $ 788 $ 249 Acquisition of fixed assets through accounts payable $ 32 $ 53 |
Summary of Significant Accoun18
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Organization and Nature of Operations | Kforce Inc. and its subsidiaries (collectively, “Kforce”) provide professional staffing services and solutions to customers in the following segments: Technology (“Tech”), Finance and Accounting (“FA”), and Government Solutions (“GS”). Kforce provides flexible staffing services and solutions on both a temporary and full-time basis. Kforce operates through its corporate headquarters in Tampa, Florida and 62 field offices located throughout the United States. Additionally, one of our subsidiaries, Kforce Global Solutions, Inc. (“Global”), provides information technology outsourcing services internationally through an office in Manila, Philippines. Our international operations comprised less than 2% of net service revenues for both the three months ended March 31, 2016 and 2015 and are included in our Tech segment. Kforce serves clients from the Fortune 1000, the Federal Government, state and local governments, local and regional companies and small to mid-sized companies. |
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 accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements have been condensed or omitted pursuant to those rules and regulations, although Kforce believes that the disclosures made are adequate to make the information not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our 2015 Annual Report on Form 10-K. In management’s opinion, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting of only normal recurring adjustments) considered necessary for a fair presentation of our Unaudited Condensed Consolidated Balance Sheet as of March 31, 2016 , our Unaudited Condensed Consolidated Statement of Operations and Comprehensive Income for the three months ended March 31, 2016 and our Unaudited Condensed Consolidated Statement of Cash Flows for the three months ended March 31, 2016 . The Unaudited Condensed Consolidated Balance Sheet as of December 31, 2015 was derived from our audited Consolidated Balance Sheet as of December 31, 2015 , as presented in our 2015 Annual Report on Form 10-K. Certain prior year amounts have been reclassified in the Unaudited Condensed Consolidated Statements of Cash Flows to conform to the current year presentation. Our quarterly operating results are affected by the number of billing days in a quarter and the seasonality of our customers’ businesses. In addition, we experience an increase in direct costs of services and a corresponding decrease in gross profit in the first fiscal quarter of each year as a result of certain U.S. state and federal employment tax resets. Thus, the results of operations for any interim period 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 wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “the Registrant,” “Kforce,” “the Company,” “we,” “the Firm,” “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 important of these estimates and assumptions relate to the following: allowance for doubtful accounts, fallouts and other accounts receivable reserves; accounting for goodwill and identifiable intangible assets and any related impairment; self-insured liabilities for workers’ compensation and health insurance; stock-based compensation; obligations for pension plans; accounting for income taxes and expected annual commission rates. 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 for each health insurance plan participant up to $350 thousand in claims annually. Additionally, for all claim amounts exceeding $350 thousand, Kforce retains the risk of loss up to an aggregate annual loss of those claims of $450 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 (“IBNR”) 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 earnings divided by the weighted average number of common shares outstanding during the period. The weighted average number of common shares outstanding excludes unvested shares of restricted stock. Diluted earnings per common share is computed by dividing the earnings attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period plus the dilutive effect of stock options and other 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. |
Dividends | Kforce’s Board of Directors (“Board”) may, at its discretion, declare and pay dividends on the outstanding shares of Kforce’s common stock out of retained earnings, subject to statutory requirements. Dividends for any outstanding and unvested restricted stock as of the record date are awarded in the form of additional shares of forfeitable restricted stock, at the same rate as the cash dividend on common stock and based on the closing stock price on the record date. Such additional shares have the same vesting terms and conditions as the outstanding and unvested restricted stock. The declaration, payment and amount of future dividends are discretionary and will be subject to determination by Kforce's Board each quarter following its review of, among other things, the Firm's financial performance and its legal ability to pay dividends. |
New Accounting Standards | In March 2016, the FASB issued authoritative guidance regarding the accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The guidance is to be applied for annual periods beginning after December 15, 2016 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively, modified retrospectively, or prospectively depending on the amendment(s) applied. Kforce elected not to adopt this standard early. Kforce is currently evaluating the potential impact on the consolidated financial statements. In February 2016, the FASB issued authoritative guidance regarding the accounting for leases. The guidance is to be applied for annual periods beginning after December 15, 2018 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively to all prior periods presented, including interim periods. Kforce elected not to adopt this standard early. Kforce is currently evaluating the potential impact on the consolidated financial statements. In November 2015, the FASB issued authoritative guidance requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is to be applied for annual periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. Kforce elected not to adopt this standard early. Kforce anticipates a change to the presentation of the deferred tax liabilities and assets on the consolidated balance sheets upon adoption. In May 2014, the FASB issued authoritative guidance regarding revenue from contracts with customers, which specifies that revenue should be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued authoritative guidance deferring the effective date of the new revenue standard by one year for all entities. The one-year deferral results in the guidance being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and entities are not permitted to adopt the standard earlier than the original effective date. In March 2016, the FASB issued authoritative guidance clarifying the implementation guidance on principal versus agent consideration. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We have not yet selected a transition method. We do not currently anticipate a material impact to the consolidated financial statements upon adoption; however, we do anticipate an increase in the level of disclosure around our arrangements and resulting revenue recognition. |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Postemployment Benefits [Abstract] | |
Components of Net Periodic Benefit Cost | The following represents the components of net periodic benefit cost for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Service cost $ 328 $ 330 Interest cost 113 96 Net periodic benefit cost $ 441 $ 426 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements on a Recurring and Non-Recurring Basis | The estimated fair values on Kforce’s financial statements as of March 31, 2016 and December 31, 2015 were as follows (in thousands): Assets/(Liabilities) Measured at Fair Value: Asset/(Liability) Quoted Prices in Significant Significant As of March 31, 2016 Recurring basis: Money market funds $ 36 $ 36 $ — $ — Contingent consideration liability $ (798 ) $ — $ — $ (798 ) As of December 31, 2015 Recurring basis: Money market funds $ 36 $ 36 $ — $ — Contingent consideration liability $ (798 ) $ — $ — $ (798 ) |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Stock Activity | The following table presents the activity for the three months ended March 31, 2016 (in thousands, except per share amounts): Number of Restricted Stock Weighted Average Total Intrinsic Outstanding as of December 31, 2015 1,293 $ 20.89 Granted 538 $ 22.72 Forfeited/Canceled (84 ) $ 21.70 Vested (157 ) $ 21.08 $ 3,972 Outstanding as of March 31, 2016 1,590 $ 21.44 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | The following table sets forth the activity in goodwill and other intangible assets during the three months ended March 31, 2016 (in thousands): Goodwill Intangible Assets, Net Balance as of December 31, 2015 $ 45,968 $ 4,235 Amortization of intangible assets — (192 ) Balance as of March 31, 2016 $ 45,968 $ 4,043 |
Schedule of Intangible Assets Amortization Expense | The following table presents the estimated amortization expense for intangibles over the next five years and thereafter (in thousands): Remainder of 2016 $ 401 2017 345 2018 345 2019 334 2020 212 Thereafter 166 Total $ 1,803 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Operations of Segments | The following table provides information concerning the operations of our segments for the three months ended March 31, 2016 and 2015 (in thousands): Tech FA GS Total Three Months Ended March 31, 2016 Net service revenues: Flexible billings $ 211,209 $ 75,306 $ 23,121 $ 309,636 Direct Hire fees 5,379 7,186 — 12,565 Total net service revenues $ 216,588 $ 82,492 $ 23,121 $ 322,201 Gross profit $ 61,791 $ 28,821 $ 6,577 $ 97,189 Operating expenses 88,450 Income before income taxes $ 8,739 2015 Net service revenues: Flexible billings $ 208,438 $ 66,194 $ 25,900 $ 300,532 Direct Hire fees 5,201 6,878 — 12,079 Total net service revenues $ 213,639 $ 73,072 $ 25,900 $ 312,611 Gross profit $ 60,217 $ 25,689 $ 8,834 $ 94,740 Operating expenses 85,202 Income before income taxes $ 9,538 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Long-Term Liabilities | Other long-term liabilities consisted of the following (in thousands): March 31, 2016 December 31, 2015 Deferred compensation plan $ 25,695 $ 24,238 Supplemental executive retirement plan 11,777 11,337 Other 4,839 5,051 $ 42,311 $ 40,626 |
Supplemental Cash Flow Inform25
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Supplemental Cash Flow Elements [Abstract] | |
Details of Supplemental Cash Flow Information | Supplemental cash flow information is as follows for the three months ended March 31, 2016 and 2015 (in thousands): Three Months Ended March 31, 2016 2015 Cash paid during the period for: Income taxes, net $ 476 $ 79 Interest, net $ 466 $ 417 Non-Cash Transaction Information: Employee stock purchase plan $ 192 $ 152 Equipment acquired under capital leases $ 788 $ 249 Acquisition of fixed assets through accounts payable $ 32 $ 53 |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Details) shares in Thousands | 3 Months Ended | |
Mar. 31, 2016USD ($)Officesubsidiaryshares | Mar. 31, 2015shares | |
Accounting Policies [Abstract] | ||
Number of domestic field offices of parent company | Office | 62 | |
Number of subsidiaries with international offices | subsidiary | 1 | |
Percentage of net service revenue from international operations (less than) | 2.00% | 2.00% |
Health insurance maximum risk of loss liability per employee insurance plan (up to) | $ 350,000 | |
Health insurance maximum aggregate amount of risk of loss liability for employee insurance plans (up to) | $ 450,000 | |
Common stock equivalents (in shares) | shares | 149 | 199 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Other Commitments [Line Items] | |
Severance payment under agreement description | Certain of the agreements also provide for a severance payment of one to three times annual salary and one half to three times average annual bonus if such an agreement is terminated without good cause by the employer or for good reason by the employee. |
Employees under contract terminated by employer without good cause or change in control | $ 49 |
Employees under contract terminated by employer without good cause or in absence of change in control | $ 21.5 |
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% |
Credit Facility - Additional In
Credit Facility - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Apr. 29, 2016 | Apr. 15, 2016 | Dec. 31, 2015 | |
Line of Credit Facility [Line Items] | ||||
Percentage of accounts receivable | 85.00% | |||
Percentage of unbilled accounts receivable | 85.00% | |||
Percentage of employee placement accounts | 80.00% | |||
Interest rate terms | Outstanding borrowings under the Revolving Loan Amount bear interest at a rate of: (a) LIBOR plus an applicable margin based on various factors; or (b) the higher of (1) the prime rate, (2) the federal funds rate plus 0.50% or (3) LIBOR plus 1.25%. | |||
Percentage of interest rate under revolving loan amount, condition 1 | 1.25% | |||
Percentage of interest rate under revolving loan amount, condition 2 | 0.50% | |||
Percentage of interest rate under revolving loan amount, condition 3 | 0.125% | |||
Percentage of aggregate amount of the commitment | 10.00% | |||
Minimum availability under credit facility to avoid negative covenants | $ 11,000,000 | |||
Long-term debt – credit facility | 103,454,000 | $ 80,472,000 | ||
Credit facility remaining borrowing capacity | 42,000,000 | |||
Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowings percentage of corporate headquarters | 80.00% | |||
Quarterly reduction of additional borrowings, as a percent | 1.25% | |||
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Borrowing capacity under credit facility | 170,000,000 | |||
Remaining credit facility under accordion option | $ 50,000,000 | |||
Unused credit facility commitment fee percentage threshold | 35.00% | |||
Maximum percent availability of borrowing capacity | 15.00% | |||
Availability of borrowing capacity | $ 15,000,000 | |||
Covenant limit on distributions and equity repurchases percent | 12.50% | |||
Covenant limit on distributions and equity repurchases | $ 20,600,000 | |||
Revolving Credit Facility | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Amount outstanding under Credit Facility | $ 108,600,000 | |||
Credit facility remaining borrowing capacity | $ 44,900,000 | |||
Revolving Credit Facility | Below Threshold | ||||
Line of Credit Facility [Line Items] | ||||
Unused credit facility commitment fee percentage | 0.35% | |||
Revolving Credit Facility | Above Threshold | ||||
Line of Credit Facility [Line Items] | ||||
Unused credit facility commitment fee percentage | 0.25% | |||
Letter of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Sub-limit under credit facility for letters of credit | $ 15,000,000 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Supplemental executive retirement plan | $ 11,777,000 | $ 11,337,000 |
Supplemental Executive Retirement Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Normal retirement age | 65 years | |
Early retirement age | 55 years | |
Vesting percentage under the plan for attaining age 55 and 10 years of service | 100.00% | |
Defined benefit plan arrangement minimum age | 55 years | |
Completed at least credited service period | 10 years | |
Vesting percentage under the plan prior to attaining age 55 and 10 years of service | 0.00% | |
Defined benefit plan employees minimum requisition period under specific conditions | 5 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 | |
Supplemental executive retirement plan | $ 11,800,000 | $ 11,300,000 |
Employer contributions to benefit plans | $ 0 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Details) - Supplemental Executive Retirement Plan - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Service cost | $ 328 | $ 330 |
Interest cost | 113 | 96 |
Net periodic benefit cost | $ 441 | $ 426 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Fair Value Disclosures [Abstract] | |
Transfers into or out of Level 1, 2 or 3 assets | $ 0 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring and Non-Recurring Basis (Details) - Recurring Basis - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets/(Liabilities) Measured at Fair Value: | ||
Money market funds | $ 36 | $ 36 |
Contingent consideration liability | (798) | (798) |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets/(Liabilities) Measured at Fair Value: | ||
Money market funds | 36 | 36 |
Contingent consideration liability | 0 | 0 |
Significant Other Observable Inputs (Level 2) | ||
Assets/(Liabilities) Measured at Fair Value: | ||
Money market funds | 0 | 0 |
Contingent consideration liability | 0 | 0 |
Significant Unobservable Inputs (Level 3) | ||
Assets/(Liabilities) Measured at Fair Value: | ||
Money market funds | 0 | 0 |
Contingent consideration liability | $ (798) | $ (798) |
Stock Incentive Plans - Additio
Stock Incentive Plans - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Apr. 19, 2016 | Apr. 05, 2013 | Jun. 20, 2006 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock-based compensation expense | $ 1.9 | $ 1.3 | |||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Total unrecognized compensation expenses | $ 26.1 | ||||
Weighted average period expected to be recognized | 4 years 7 months | ||||
Minimum | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock granted, vesting period | 5 years | ||||
Maximum | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Restricted stock granted, vesting period | 10 years | ||||
2013 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized awards | 4,000,000 | ||||
Equity plan expiration date | Apr. 5, 2023 | ||||
2006 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized awards | 7,900,000 | ||||
Equity plan expiration date | Apr. 28, 2016 | ||||
Subsequent Event | 2016 Stock Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Authorized awards | 650,000 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Restricted Stock Activity (Details) - Restricted Stock $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Number of Restricted Stock | |
Outstanding, as of beginning of period (in shares) | shares | 1,293 |
Granted (in shares) | shares | 538 |
Forfeited/Canceled (in shares) | shares | (84) |
Vested (in shares) | shares | (157) |
Outstanding, as of end of period (in shares) | shares | 1,590 |
Weighted Average Grant Date Fair Value | |
Outstanding, as of beginning of period (in dollars per share) | $ / shares | $ 20.89 |
Granted (in dollars per share) | $ / shares | 22.72 |
Forfeited/Canceled (in dollars per share) | $ / shares | 21.70 |
Vested (in dollars per share) | $ / shares | 21.08 |
Outstanding, as of end of period (in dollars per share) | $ / shares | $ 21.44 |
Vested, total intrinsic value of restricted stock vested | $ | $ 3,972 |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets - Changes in the Carrying Amount of Goodwill in Total and for Each Reporting Unit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill | $ 45,968 | $ 45,968 |
Intangible Assets, Net | ||
Intangible Assets, Net, beginning balance | 4,235 | |
Amortization of intangible assets | (192) | |
Intangible Assets, Net, Ending balance | $ 4,043 |
Goodwill and Intangible Asset36
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets [Line Items] | ||
Intangible assets, net | $ 4,043 | $ 4,235 |
Accumulated amortization | 26,800 | 26,600 |
Remainder of 2016 | 401 | |
2,017 | 345 | |
2,018 | 345 | |
2,019 | 334 | |
2,020 | 212 | |
Thereafter | 166 | |
Total | 1,803 | |
Trademarks and Trade Names | ||
Goodwill And Intangible Assets [Line Items] | ||
Intangible assets, net | 2,200 | 2,200 |
Customer-Related Intangible Assets | ||
Goodwill And Intangible Assets [Line Items] | ||
Intangible assets, net | $ 1,800 | $ 2,000 |
Reportable Segments - Operation
Reportable Segments - Operations of Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net service revenues | $ 322,201 | $ 312,611 |
Gross profit | 97,189 | 94,740 |
Operating expenses | 88,450 | 85,202 |
Income before income taxes | 8,739 | 9,538 |
Flexible Billings | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 309,636 | 300,532 |
Direct Hire Fees | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 12,565 | 12,079 |
Operating Segments | Tech | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 216,588 | 213,639 |
Gross profit | 61,791 | 60,217 |
Operating Segments | Tech | Flexible Billings | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 211,209 | 208,438 |
Operating Segments | Tech | Direct Hire Fees | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 5,379 | 5,201 |
Operating Segments | FA | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 82,492 | 73,072 |
Gross profit | 28,821 | 25,689 |
Operating Segments | FA | Flexible Billings | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 75,306 | 66,194 |
Operating Segments | FA | Direct Hire Fees | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 7,186 | 6,878 |
Operating Segments | GS | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 23,121 | 25,900 |
Gross profit | 6,577 | 8,834 |
Operating Segments | GS | Flexible Billings | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | 23,121 | 25,900 |
Operating Segments | GS | Direct Hire Fees | ||
Segment Reporting Information [Line Items] | ||
Net service revenues | $ 0 | $ 0 |
Other Long-Term Liabilities (De
Other Long-Term Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Other Liabilities Disclosure [Abstract] | ||
Deferred compensation plan | $ 25,695 | $ 24,238 |
Supplemental executive retirement plan | 11,777 | 11,337 |
Other | 4,839 | 5,051 |
Other long-term liabilities | $ 42,311 | $ 40,626 |
Supplemental Cash Flow Inform39
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash paid during the period for: | ||
Income taxes, net | $ 476 | $ 79 |
Interest, net | 466 | 417 |
Non-Cash Transaction Information: | ||
Employee stock purchase plan | 192 | 152 |
Equipment acquired under capital leases | 788 | 249 |
Capital Expenditures Incurred but Not yet Paid | $ 32 | $ 53 |