Exhibit 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
Kforce’s ratio of earnings to fixed charges for each of the periods indicated is as follows:
Fiscal Year Ended December 31, (in thousands) | ||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | ||||||||||||||||
Computation of Earnings | ||||||||||||||||||||
Pre-tax income (loss) from continuing operations | 60,779 | (87,193 | ) | 21,893 | 33,324 | 43,311 | ||||||||||||||
Add: Fixed charges | 8,497 | 5,764 | 4,774 | 3,914 | 3,317 | |||||||||||||||
Add: Amortization of capitalized interest | 46 | 115 | 119 | 125 | 142 | |||||||||||||||
Add Distributed income of equity investees | — | — | 86 | 176 | 39 | |||||||||||||||
Add: Share of pre-tax losses of equity investees | — | — | — | — | 96 | |||||||||||||||
Less: Interest capitalized | 312 | 26 | 20 | 79 | 52 | |||||||||||||||
Less: Preference security dividend requirements of consolidated subsidiaries | — | — | — | — | — | |||||||||||||||
Less: Non-controlling interest in pre-tax income of subsidiaries that have not incurred fixed charges | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total earnings (loss) | 69,010 | (81,340 | ) | 26,852 | 37,460 | 46,853 | ||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Computation of Fixed Charges | ||||||||||||||||||||
Interest expensed and capitalized | 4,762 | 2,206 | 1,306 | 1,202 | 1,169 | |||||||||||||||
Amortized premiums, discounts and capitalized expenses related to indebtedness | 153 | 151 | 151 | 151 | 139 | |||||||||||||||
Estimate of the interest within rental expense | 3,582 | 3,407 | 3,317 | 2,561 | 2,009 | |||||||||||||||
Preference security dividend requirements of consolidated subsidiaries | — | — | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Total fixed charges | 8,497 | 5,764 | 4,774 | 3,914 | 3,317 | |||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||
Ratio of earnings to fixed charges | 8.1 | (1)(2) | 5.6 | 9.6 | 14.1 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | During 2008, we recognized a goodwill and other intangible asset impairment charge of $129,409, which resulted in a pre-tax net loss from continuing operations for 2008. |
(2) | Due to our losses in 2008, the coverage ratio was less than 1:1. We must have generated additional earnings before income taxes of $87,104 in 2008 to achieve a coverage ratio of 1:1. |