KFRC - Earnings call transcript Q4 2019

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2019 Kforce Inc. Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Mr. Michael Blackman, Chief Corporate Development Officer. Thank you. ahead. go Please

Michael Blackman

Good morning.

assumptions would contain call forward-looking. certain are may Commission. results the from upon any I any to you These started, to We are filings cannot materially Kforce’s with the forward-looking factors based remind and and update like other undertake statements current this get reports risks may vary that filings we statements in statements. subject Securities Before to public expectations and and that Actual uncertainties. listed and and Exchange duty are

I would turn the Officer. to over and call Chairman Chief now like Dave? to David Dunkel, Executive

David Dunkel

you, Thank Michael.

additional You find earnings release quarter’s our information can results in our about this filings. SEC in

otherwise have remarks to our prepared relates we operations. Relations results within from addition, our portion published our website. indicated, continuing commentary Investor In Unless the of our

Trauma I focus staffing our Last by complement our of make solutions combined would a by FX one investments served and on which and positions the offerings These and our significant the on efforts footprint the these organizations. the activities most massive in segments domestic up to the some firm markets. organizations taking within and our completion success non-core solely professional and us place and to with to our investments XXXX all of accounting, multi-year exit resources data specialty allocate firms. and strategic technical year, arguably, future all of of The long-term the largest businesses, transformation and service commentary for finance within efforts effort technology and dedicate offerings and businesses to and solutions growing and digital like position divestitures to we KGS our begin staffing completed success. completed providing to successful areas

of XX% on across for nearly skill Clients looking comprises range revenues. at a to that of technology scale looking are geographies partners meet project and across management are their compliance. provide focus models needs resources a diverse talent overall multiple in sets now and able to Technology with

business a us just built increase share. distraction do have is helping market clients is and and that to to able without We that it

the immediate shares XX% earnings the of approximately of Our We from recapture of the from the the divestitures lost $XXX of firm outstanding all end share repurchases highly profitable net of more forward. the gained benefit the EPS were through a the by able share through from year resulting approximately operations utilizing going KGS proceeds repurchase per million of our shareholders in the focused derived XXXX accretion transactions. to

to Additionally, and process our the the and in invest of candidates improvements enhancing improving aimed XXXX, continued we our associates. clients and of in productivity experience technology at

XXXX, performance business, our growth With increased over during Flex were XXXX. significant successful X.X% respect to Tech we our driving in above-market again once at financial which

annual Flex compound in been the Tech has growth Our X.X%. revenues rate over years last XX

improved We XX%. and year a significantly as our in on profitability the return demonstrated also invested for of in per share XX.X% by approximately capital earnings increase XXXX

and to their are without and also and landscape technology project-driven execute understand technical their provide flexibility to of of on of teams to companies across critical strategy. to companies every projects flexible preferences meet to flexible resources a look changing leading to is confronted be model specialized assume Discussions resource project where models, solutions. of element the in and these quite imperative industry the companies for skills, teams Kforce a role the overall such ahead, leveraging continues partners, execute many increasingly on resources with looking talent Every changing complex to managed sacrificing this vital greater organization value and their As we needs projects as Market both within address competitors a rapidly to critical remains more the business being technology quality. new invest demand necessary customers. these with are their strong. ever-changing indicate necessary adapt to resources These work that the require speed for

serve staffing desire engagements. technology the technology clients have alternative services drivers a the have believe market cost to to Our to engage larger flexible integrators IT our meet of expressed of demand demand. recently with the increasingly effective, secular us growing demand of larger changed $XX than significantly technology in billion which winning an investments as fundamentally our the addressable market, by is evidenced the scale into market. several as to utilization complement or expands more and efficient and significantly labor this persistence domestic in We strategic success This trajectory

the we well, secular to speaking environments. expect domestic drivers, performance of market in these Given technology relatively would the adverse the during strength even perform macroeconomic

Directors’ you strength business share in flows Our our of to our operating confidence in and dividend effective update is the I on approval in our XX% in an wanted $X.XX first our Directors by Board of of also continued the increase activities. Board our in further demonstrated per to annually future cash quarter. refreshment

to entrance knowing week, stages These from its added Gordon XXXX stand they point Allred, members made growth. at public and Over been not Simmons distinguished after each through to members board, April our critical reelection the the Last into partners and the to that outstanding have would Mehl all individuals years, Meeting. Dunwoody, board advisors John Ann the down five of Tunstall Shareholders for and have some Richard three and Annual three board. choose have bring firm long and markets would three These the Cocchiaro John unique board our long-time its been informed new step valuable each tenures. Randall additions last we at experience to

service very been have and be they We blessed missed. by their will

have we serve the independent the well and made should more results However, in board upcoming that in a diverse shareholders additions years.

celebrating forward looking as to public year are a We our XXth company.

XXXX since return X.Xx total over going same shareholder our approximately the public reflection, period. Russell of has than moment XXXX%, roughly the been a As greater

we has brighter. the Given innings early of we future of transformation the the been are economy, that U.S. never massive digital of believe the in Kforce

Joe turn and call Liberatore, add quarter with the to and give into on of intentions will greater detail over QX. now on operating provide further results, who will our trends CFO, will use color the I Kelly, cash Joe? then fourth results guidance Dave our and President, proceeds

Joe Liberatore

interest Dave of you, and Thank thanks to you your for all Kforce. in

to would and we Before the results, our our have congratulate I like quarter specifically progress begin over discussion and Dave’s comments fourth on many on thank the team years. made I of course echo

client competitors client talent us finance allow platform, for a and that to in skill the the should and sets. future key are win We of accounting talent needs top believe industries technology intense and built given and in will meeting significantly where portfolio have growing team the that across client secular and the We is demands outperform consistently our for drivers. strong focus the war

to $XXX.X expectations relates total remarks. number revenues to throughout fourth of quarter factors that guidance, our a enumerate it As certainly will within below I million our performance, our were of due of but range these

providing our Let in me some begin by the each quarterly of details about business lines. performance the discussion

business trends X.X% quarter. experienced we of growth and market through growth In continues driver business QX the Flex grew this The and for consecutive in business November. October has year-over-year. trends our exceeded Technology technology ninth operating rate the the the our the to fourth strong majority in quarter, now Our be sustained

season, entered the upcoming our we minimize the However, planning large quarter as also significant for increase by we clients talent activities to saw year. expense some year-end and crucial holiday in both of fourth secure

greater than than activity level had conversions, significant furlough we fourth a of more Specifically, in XXXX. already we the saw elevated in spike coupled almost with were experienced XX% the anticipated quarter which

assignments the industry Flex hadn’t These in the negatively vertical. experienced consultant specific revenues. client consequently services impacted performance at We will in particularly impact Year, quarter financial levels which the also base also of coming into first some Tech New consultants negatively we billable the quarter and factors reduced ends on anticipated,

have focus beyond XX% our Fortune but of the diversifying our which has it our clients in relates continue be above while technology continue to even These believe generate been largest path. largest is our of our The to experienced the have base, XXXX includes to rates, largest talent continued these portfolio relationships clients some XXX of we our management and As on to activities us roughly clients, with companies growth our growth client driving existing within the allowed right during market strategy, consumers growth. declines.

we top XX products respect serve, experienced out industries and are with With portfolio. the services, and to in particular year-over-year manufacturing healthcare. our professional our of within business in strength diversified growth We insurance, industries we X well

increased were down X.X% However, which in approximately financial stable we our broad experienced in bill X% vertical, rates services but year-over-year, technology was sequentially. year-over-year. Overall, average weakness

this are which client which higher the skilled of the the at Our to high provide is Flex executed and the clients a projects solution contributing core in assignments, nearly talent strong quality We growth scarcity continued projects and may of duration way the grow our relationships, we business. of months. believe supply nature technology XX faster we technology to is than in trend teams average and levels and remain value-add are our due which higher managed experiencing historic to Tech

of we XXXX clients may high continue in rates resources trends Tech to that levels later slightly quarter our we in we experienced from as demand. Given ongoing business quarter, growth fourth year-over-year the the levels Flex decelerate repositioning expect demonstrating

business this grew stable Flex for Our QX second were revenues as quarter. on consecutive to declined Trends the from billing in sequentially year-over-year. business QX a day basis FA X.X%

trends reoccur quarter to market and this to project XXXX. into discrete year single-digits FA which Flex a continues stable last year-over-year business our did be a distorts low expect year. the drove quarter However, declines the decline in of hurricane in year-over-year we year-over-year the support higher to The not first decelerate relief for fourth efforts, and

Direct seasonal X.X% a year-over-year result decreased as Hire of declines. primarily revenue

ensuring Our they to of clients meet talent in can Direct through means that whatever needs important capability our Hire we be business prefer. continues the an

typically revenues have sequential Direct in Hire in experienced a first We the quarter. improvement

We also highly due are the softer of to skilled counteroffers. the is However, start tightness receiving to multiple believe and the professionals options partially have many due and the but to of levels initial expected. markets the timing have quarter of continued this of been heightened where labor trends than offers holiday,

make drive our to to improvements investments associate process technology in and order significant continue further We productivity. in

be will which expect new Talent through available We are XXXX. midway particularly to on associates, focused system, our Management Relationship we our

We also candidates of retaining areas technology and effectively with of in and with to matching, qualifying, goal sourcing, that more continue efficiently the focused interaction improve and make the deploying experience our investments talent.

to in technology associates. drive stable improvements business, us accelerate of our which level a a and maintaining and revenue growth reduced productivity has delivery to relatively continue while allowed sales turnover level We of

significant and drive to trend continue this to we growth. expect believe We further have capacity available

productivity where areas We are and expect specific is levels don’t make headcounts material warranted. additions to capacity further extremely to high beyond building

Our us client offerings and portfolio for service simplified model, long-term business focused growth. has well positioned

continue well candidates the have focus with within and trust Glassdoor’s we world our candidates and promoter our our Our firm net appreciate on in and recognized is to rating score efforts from class in I a clients team’s forward. our carry clients relationship Kforce driving highest industry. clients placed the our and as the

who over I the insights call Dave Kforce’s Officer, trends additional will provide operating will on turn Kelly, to expectations. Dave? now Chief and Financial

Dave Kelly

X.X% very Revenues per year-over-year. in the grew of $XXX.X XX.X% share much, $X.XX year-over-year operations grew from Thanks continuing million and Joe. earnings of quarter

decline in percentage profit a of in a basis gross mix decreased points gross XX.X% Direct Hire revenue of a year-over-year result percentage. profit Flex our Our lower as and XX the quarter

Flex percentage XX Our points basis gross year-over-year. profit decreased

the year specifically margin to diversifying our XX in of This As and stable our more business due spreads has attractive clients largest a relates slightly the healthcare basis of point have business, decline result of expanding outside past Tech this clients. relationships been is Bill/pay year-over-year typically costs. primarily over the next Flex tier it to profile. very higher

managed from which spreads. Flex attractive also point projects, more margins by decline lower services basis have XX in also margin increasing. a is profile, revenue Additionally, driven FA slightly is The being

portfolio we and from services expect management the projects. growth both in our continued success managed Looking forward, in activities revenue

stable in seasonality margins result prospectively impacts. exclusive expect of tech We to these efforts

margins impacted negatively approximately be due QX Specifically, that to in basis XXX we the to overall first will Flex payroll quarter, seasonal expect tax points by relative resets.

as a basis This technology significantly a consistent to the dollars operating maintain drive We and improving year-over-year been SG&A investments. the year-over-year. efficiencies continuing and operating to able and of XX leverage our while revenues productivity revenue SG&A spent drive of is of result increasing growing points level of have percent associates. declined

Our fourth margin of quarter was our with track margin operating X.X% on operating objectives.

of success to Flex our basis due nearly in in this basis During by spreads. the gross economic existing clients. compression, reflects, complex base deepening Direct have in in these this operating our aligning while percentage our both serving points in cycle, our infrastructure Hire XXX client business declined a points, to efficiency compression our relationships approximately Despite improved margins decline XXX large optimize which have margins and

The entirely incremental Due year. each reflected of benefit to basis rate the XX% Our grants, effective which in by expectations. consistent a of The fourth points. of a stock in the Kforce’s was quarter during rate almost million the the increase the year-over-year quarter related of reduced benefit our our tax basis to quarter the stock with fourth was the adjustment incentive tax is driven $X.X by long-term this was approximately XX%, XXXX. of quarter schedules impact the which fourth vesting discrete approximately on vesting XXX in in included restricted

which continues of to in Kforce $XXX the in repurchased the the $XX.X XXX,XXX quarter. in than $XX.X divestiture more for fourth the completed significant business were deployment flows, the quickly proceeds stock of we cash million. from anticipated. KGS million This had repurchase million Our shares operating We quarter generate net

forward, been EPS with to from have the accretion from able the operating we fully result EPS repurchases. as we performance a generated As replace KGS look

operating full dividends million and by nearly our XXXX, the through cash allowed divestitures, reduced net coupled also $XXX million. For in repurchases cash shareholders to from our share debt year our $XX.X capital the to us with cash return and proceeds in flows,

quarter fourth EBITDA. the enhance strength approximately million facility operating and both approximately pursue provide of requirements quarter cash flows, balance Our end The $XX or our XX-month net that flexibility debt $XXX trailing healthy the X.Xx capital low maximum sheet, million at and to of also credit are and was strategic to $X.X acquisitions us than quarter, capital A shareholders. XX QX offerings our more day which day the is more single revenue. days There million than days first XXXX. X service equates in of X first our is in billing roughly billing return to the

$XXX Flex SG&A average respect be to to we are XX.X%, expect range are million. in margins X.X% to are be XX.X%. XX.X% of between as expected of to QX and between earnings shares be $X.XX guidance, between and the operating is $X.XX. Gross outstanding for while be million between XX.X% expected to and between margins million XX.X% and percent With to to a and X.X%. revenues be per share be should XX.X% be to and and Weighted diluted expected XX.X revenue expected $XXX margins approximately

first Our anticipated effective tax rate is XX.X% in quarter. the

by the As impacted due a first points approximately tax basis to earnings by reminder, of are quarter approximately impacts impacts This share also XXX per margins seasonal $X.XX. resets. payroll operating typically annual

several the statement. are established that income levels the WorkLLama to in calls, of reflected quarters. related As we venture mentioned losses other have on the losses These an $X.XX We these prior should joint venture our next anticipate in on of this share share approximate impact of we we from the expense approximately over in joint quarterly anticipate June XXXX. our costs

any, legal not if Our one-time any or future in law charges to costs, the legal any of does consider the the revenues or regulatory, response tax impact charges pending of guidance matters, or government firm’s disruption on tax any related to related costs changes. funding, or effect,

an rate and million X% through in at a at last rate program. $XXX of XX%. returned same grown time dividend revenues to million at also exceeding compound we compound $XX.XX decade, of our stock cost and we a a annual this total grown the of growth During average share $XXX per our period, continuing in have operations shareholders Over earnings repurchased annual

dividend the dividends the XX% outlays which share effective our quarter, mentioned, in an our bring Dave cash approximating increase yield those anticipated quarterly Board prior to levels year repurchases in this return for first to will our quarterly As X%. approximately approved experienced dividend to and

talent to and client our acquisition particularly market, quarter spending that of and While the growth results, strategic occur strength unexpected in the above-market ability and direction will continue remain improve to fourth overall we with our rates we weren’t confident sustain pleased however operating We profitability. periodically understand patterns. in volatility

expect as be We progresses. Kforce year XXXX year the accelerate growth another to for strong for and to

differentiators to footprint. We advantage take focused competitive poised and are of our

have Jimmy, the to call for open prospects been questions? think future never Our ready now I we’re brighter.

Operator

Sommer first Instructions] Thank question SunTrust. comes you. [Operator Our from with Tobey

open. now is line Your

Tobey Sommer

Thank you.

Tech business, elevated Within the impact Flex quantify line rate could of the on you of conversions the top furloughs and growth?

Dave Kelly

in I Hi, would tell magnified the have this Dave Tobey. year, is This number. as that in we they precise get past have typically were furloughs we don’t the but I late year. the certainly you Kelly.

both fell, time how had Christmas very we Years and holidays and short Wednesday that was I a we think, between because of the fact of probably period New on Thanksgiving.

tell anticipated furloughs, have than I anticipated. So we more but I you I some would materially would we think mean,

as we demand Additionally, the Joe important of more – than elevated talking $X talent, you somewhere that that about are I can probably about, things, those talked level really I we we sorry we bind to had think talks for or collectively about anticipated. tech saw, of million million am convergence talked furloughs $X about

Tobey Sommer

to think year be – Thank over to in your differential you. business your Thanks. And on acquisitions? then about some period, are book hitting versus part and to target a a the of require what I margin services, the there to it wanted sort going your or able that organically of the you is you of as multiple rest accomplish managed that ask going is question

David Dunkel

Hi, Tobey.

end, start I’ll he me if to. Joe with wants back let the So, after elaborate

our is and part been excess rates. Tech in overall well of important an of this it’s clearly growing So, business Flex

we think in is it at our organically. acquisitions the additive. these have that targets accelerated internally and focus, we as reach said I clearly not we about think we potentially this we past growth area, think of necessary, but that But have some the can in rates,

In assignments good are speaking, revenue number the margin term I so you’d first terms stream. these of the generally expect, of one, for stability all, profile guess the as longer of overall

I think projects. important to are note, more sophisticated they

have. we So, by these points are but have least what Flex it’s on Tech we projects. far, are project different, that If XXX margins would in bill strong to augmentation Obviously look margins, the better Tech the are typical done of at project rates project. they a basis than staff kind we at hard average so Flex measure

Tobey Sommer

I kind illustrative necessarily stretch And Thanks. and an comfortable Tech of of gave a but longer for the X% quarter question of bit over longer are with Flex? queue, a view little term us still better me last you mean you last into get of will in kind guidance, back not rate time growth or of cadence,

David Dunkel

business Hi. Yes, believe on this again. reminder quarterly bring you the of appreciate kind environment of that. is our Flex. some is strong a And basis Dave a as very better what so as seasonality some wanted a what Tobey, Tech of your give point, impacts reflection we were. Yes, of understanding to to I obviously, the to we

you, that last environment rate growth will comment to continues compound in remind resources an I decade, over has continues annual X.X%. think been So, our Dave’s more to require I the evolve and tech

is. think expect history we number X% is do So, suggests sustained from us? on a reasonable that Clearly, basis it a to

the Flex, the environment, as we in So, by, we again very think I deployed. sets the we because will mentioned of see year Tech growth demand skill have improvement of goes rates our in feel we because good. have

very and market about our feel still prospects. the confident So, yes,

Tobey Sommer

you. Thank

Operator

Thank you.

next question Mark comes with Baird. Our from Marcon

Your line is open. now

Mark Marcon

my Thanks for questions. taking morning. Good

level how Just quarter started when stat the end we conversions, broad-based the that? fourth was seeing of of elevated at

Joe Liberatore

it’s concentrated saw would highly space. on is but definitely consumers largest which Mark. levels call more the I taking we are within this We customers. it Liberatore. of enterprise Joe in Yes, some our elevated what much in clients, place very This those say, was our broad-based,

in of they than fact, have came out past of statement converted actually and one reviews people ever of In made QX. we they just customers that more with one key our in quarterly they the done the those

clients also So, see services, certain we did key We number well. but in we that specifically saw as customers. that financial of across out a large other called

Mark Marcon

of rationale my but in about provided, what just they of what which they the have And the Joe, thoughts mean, got then that I’ve was are articulating? same were underlying seem articulating obvious, activity going they level suspicions wondering I forward? what terms

Joe Liberatore

– they secular for this associated nature Yes. of real I’d really cycle are key it engagement the the the and the foresee say that talent the on. with talent. to that need the driver They aspects deploying this long-term the is

there are certain this they even know from organization they saying services contract preparing basically have some are their those read services need They in out I as what is resources people And as securing the So, financial given I a it’s we believe, happening been these leaves know to executives time. the gotten recession talent imminent been are on to irrespective have with of for capabilities. has the that and there the at happens to through say gotten what see in tea within point financial organization, they long-term going standpoint. in and I’d stating the market. are in we

in those going a non-traditional that players. customer-facing, they traditional have consumer with to to are to applications deploy period, even driven stay recessionary continue competitive So, to are and

playing I part it. a in So big that’s think

Mark Marcon

extent to at it it to rate? up more goes the and that that longer term X% continues a growth what potentially making difficult achieve rate, increasing is If end

Joe Liberatore

Hire Yes, partially are you in Direct here, we these seeing we Direct to conversions. feel from in that would with the for typically What where happen moving X%. things a basically are see confident Hire right-to-hire is the Mark,

kind – other to the space. moving of overall bucket from the the change doesn’t it’s bucket it’s So, demand within one just

that. really So, have about we don’t concerns

XX% particular, last higher higher talent to their and And very they It QX, levels. had in I than certain for was X ago, we experienced have clients X probably in about X conversion that saw we those specific years us where of and We year. what start we had remained escalate strategies. is This levels as better David past the was at have for mentioned or been this the stating last part – experienced than as years. to

was I So, across something extrapolate was that the broad-based that wouldn’t that entire sector.

Dave Kelly

bit would just more Yes, little add, I a color. Mark,

during but last the said cycle Joe as generally activity even I our that obviously, mentioned have of elevated This amount are conversion So with seen a we quarter conversion heightened Tech consistently. Flex fair still was activity to growth as just a cycle relative rates X.X%. here,

as difficult about we and about assignment individuals lengthening might of have to we more that that Additionally, talk also convert. are assignments some talk an the we

frankly revenue feel very got course I think but confidence. stream we good about going and that want of we talent, the to sustainability able are degree outrun a the being of to of have clients high

Joe Liberatore

are in The in front past, that and back that, with a I consultant there getting no an last right when this that means add on our compliments industry employment the on we right Direct our to mission, than vision people are piece our XXXX, full have get this to converts out living Hire Mark really entered we with the of mentioned is I the having time would grater organization, that people because the organization.

loosing So out worked doing term what it client we I people’s how for solve a that the their terms that are is pain career plays pain felt having the while that we organization gain billable, the to with long-term ally some an and organization and somebody there well from by with the inside it’s furthered careers. associated associated of that near-term also problem, mean, in near

Mark Marcon

bit the expense how that little up deployed, perspective. also are be a productivity to about talk may getting end to great regards can that’s you going talent well thinking potential system about With gains that management you that? savings and as That’s and

Joe Liberatore

This our and to the what talent Dave so over we table. it the to productivity it management, candidates of we will we on hand are Yes, done standpoint. from allows solutions us a I then digitizing relationship mirrors are interacting management. I within kind our doing reality, have that touch what In moving we relationship will client completely and are here from talk holistic bring to kind of with is about be to the expense clients into how

us So can technology things what to people we time of people people of in capable foresee aspects the those which our their spend so accelerating, only things time more what that to is focused their especially much allow the highly do, employment business. are leverage of careers. over space, is can is navigating technology will on that The that is complex the the relationship as do

as So, those it drive standpoint. our identification to talent, lot come human or relationship a types when for for where and it to opportunity comes individuals comes matching things productivity things, play to when efficiencies of technology such of of see the and through to Hire into a that’s through with people can full-time whether so it’s take of working focus in, the on that they that time complex interaction employment, any more employment access Direct place we really from temporary

Dave Kelly

Kelly. Dave is this Mark, Yes,

end, about margin. we are investments technology therefore which operating going expectation me operating the and to these have with margin talked productivity start. that continue let starting increasing commitments the expense made increasing is drive by you So full to with When

the they in years, few the because of making expectations So that have CRM are the those other productivity inclusive driving know that technology we we the last already CRM implemented had. to And and of in improvement. we investments over are process currently of course the baked have beginning

So They SG&A, to is SaaS-based baked but flat. in these licenses. staying are SG&A being are

year-over-year. are had SG&A flat dollars I think mentioned year-over-year I

incremental over we So is improve. get and revenue down these go we to with going even efficiency, EPS of very actually productivity, are a improved improved continue confident are feel to obviously going that to percentage SG&A as dollars costs time to going

have about this for the than So what last is all part been we of strategy, long-term talking X no different a years.

Mark Marcon

there in done will old to everybody of terms function be function. step would is go was were you that. if efficiencies the up, otherwise, it be assuming costs that sort the like if would you and a once and be was dual that step was for and I implementation is Thanks any there go Thanks. I confirming of over and costs on wondering any just in. down putting would the systems off running time

So I to at? what get that’s just was trying

Joe Liberatore

Okay.

Mark Marcon

would is of done? there any the be once sort And completion function step potentially

Joe Liberatore

that Because That would opportunities of a to that then are with to now in realize It’s productivity more Mark, cost. being of step because plug CapEx the will to licensing. everything leverage to really that SaaS from is the productivity, see our is basically just The lot are improve going nature of associates. there what technologies a of for would to through we gain acceleration our TRM in platform. function to there come marketplace operating innovative the you us item in systems TRM migrating how have core changed comparison accelerators that which evolving allows doing be platform kind of

Mark Marcon

and you’ve Thanks. it were opening you’ve Can add-on of in given of did you that that the just lessons platform? experiences you a services, terms already managed David, to potentially wide decades been you like ideal acquisitions. potentially about little – are selecting characteristics what of terms the the your the at things in looking potential bit all of for in the And over seem give comments, more a learned some doing had overall like the be talking – that looking would

David Dunkel

ad, thinking were running we about a Super Actually, Mark…. Bowl

Mark Marcon

remember. wonder I many people how

David Dunkel

By were we now had with to was of just indicated how the and matter technology We the the miss meeting we to back that the strategy as infrastructure were the to on a we prophetic, in be now Bowl happen we that was do vision, it at who Monster reminiscing the that that brilliant we firms a we us gone. the board we the record, look our HotJobs are had. Super things ran As ad. about ad, of Bowl and deliver the and couple going we Super XX-year gone, had anticipated looked way, opened that to identified were that surprisingly necessary

we to also come back if We we focus look that that upstream. shift our are clients during coming made methodologies technology the So to on seen and on our and and as the we have with see call migration particularly up in innovation back a it, to the utilize with ‘XX speed tools the and secular domestic services agile tech. other firm ‘XX clearly time, looking they of to could are the us, in,

So seen disciplined acquisition past as over several that, look years. very have at the we the We’ve opportunity. had strategy we

that we acquisition done will XXXX. an out point since We haven’t

team skill We have whole have looking identified are size to we we for, characteristics focused that that. had that are looking we for, A accomplish for. very effort are looking a that we sets

very from One have populate feel we tell they is where well going that but we believe we have like have are But us? tech it, will business. we do, fit while it. not don’t sets to within skill than and at culture, we to of we well something, we Number than It’s into going rates something. based that have would growing contribution stay integrate important continuing do the substantially elements how with a management, grow as can grow consideration faster great to but do the identify We be our one our and So additive. and we our we the demonstrated we on to something team story as it’s will do organically organization. we disciplined. businesses are is solutions identify we that confident we believe we that do to to do very rates still When are traditional tech

the that have be on to happy would those team all we join to listening call So, that a the like conversation. are would

Mark Marcon

you strategic ideal – perspective, obviously know and kind David, culture size is parameter? preeminent I fit. of From and the what’s a

David Dunkel

into but something go they make already that would with get it we of plus. our rolled can coming, to in that but with to in I done We some a would other us platform, give the qualifications scale enough would allow certainly sense, time would at us hundreds to that have they the that XXX to course, demonstrated. out area, we take of in We don’t billions have can yet, maybe what hundreds. like the clients the do something same also going and the revenue already but are depending that on the do think pricing, anywhere

we’ve some of we managed see able of substantial. already we have to businesses. very – It’s by solutions a is bring kinds So hold way also with grab would our accomplished that significant been how the which amazing what just in pretty quickly to

Joe Liberatore

organizations associated we value It’s the one, one they with big portfolio and pedigree Mark. being client have of to to that have scale of nurtured those point big, as Kforce a see in with It’s access people somebody time, the the up opportunities our the spoke at this the that relationships.

are two So targets we those that plus are consider scenarios to we pursuing. one for greater as we where one this is one be those of than looking much

Mark Marcon

appreciate Terrific. you. perspective. Thank I the

Operator

Thank you.

question with Our Blair. next Tim from comes William Mulrooney

is now open. line Your

Tim Mulrooney

everybody. morning, Good

David Dunkel

morning. Good

Tim Mulrooney

it you driving in and I So if Flex, that assignment wasn’t even length long in XX X that mentioned Tech X remarks, it of ago your correctly, months recall now prepared was months implications what length the a profile your increase it if to only any has and continues increase? if financial of the ago. that few What’s on are years that in months assignment

Joe Liberatore

just non-traditionals so applications these consumer are part of Kelly well the are what’s a business. type then financials. customer-facing disruptive of Dave to we the the their I’ll they can that that the are either I’ll it? on Yes, first work standpoint, now serve at strides addressing From what’s of the Much from nature and front. on base that are in they doing the let address other them a standpoint It’s organizations footholds competitors address as as of can their organizations the is communications focus traditional and on driving happening coming relative making that that protect

environment. figured internet we business and what improve So dotcom am and – there these customer operational customer dotcom, the in nature medium happening days saw coming and are I what’s of is during the do technology this figure has experience somewhat new which medium? on plays do past is how how the like drive Those to going the out. are journey. platform comparison now about, now what’s With And out, to is everybody everybody leverage we the efficiencies trying environment I and this was a to this to new not

see the one I duration from to as and those we assignment of driving project ongoing next is it’s so And next to think project that’s the project. part the moving of what’s

and this So when X engagement. ERP engagement past massive somebody and was be enrolling are system in is Unlike the them and and going because on. might somebody to the consultants on keeping on engagement project years, and an there from basically for it just implementing was that they

I’d one that’s So driver. say

The other end engagement. driver responsibility our little is with the bit nature of they within the to on looking more types are the are the with, where customers, us of for engagements that a of take we working

different up are chain on are spot staff value project versus team. moving we we just in, So a role the playing and somebody that a that in putting on

nature in work putting are groups project of of that’s We individuals in the taking key the playing that place. are roles

some of drivers it’s this when the kind those to are durations. of really things the market are of is together, put project those two extending just really third stool easy And top not So of leg you those that is the find. talent piece

even market, is where it. difficult to talent, are So have they to and if again when because into realize talent procuring that to top know it they they talent, and other they get of can procure go they can over organizations they opportunities redeploy on talent out that to how all looking talent wanting same that back top level hold are that for the

Dave Kelly

financials, of average on So, Joe’s hour. point, the $XX first amplify Tim, a but rate our little an just remember is before bill all, to

find also it’s You highest hardest across technology talent. the look the the place where is space that to it’s amongst

find paid is desire that our the firm. So something think our for talent differentiates higher again, I clients to

of So I some tenure that, that think increase. driving is

with assignments, of got our I you have what opportunity for mean, for associates. would meeting of expect. surprising on with with it the right different you lengthening productivity. helps got growth, our fronts When again, our to helps associates as does it not things, many again, other needs. financials, helps to terms It In the those what on clients’ you’ve work it and revenue helps turnover Certainly, it

Our again not to to access opportunity top see. give us have clients were opportunities are others that an to come They for because talent that happy. going us and might we

us. So it’s gotten positive multiple impacts for

Tim Mulrooney

Thank and this Got luck it. Very good year. helpful. you

Dave Kelly

you very much. Thank

Operator

John Northcoast Thank with you. Our Research. [Operator Healy question comes Instructions] from next

is now line Your open.

John Healy

looked that assignments, growth to for in ask revenue there Thank you. I question, orders rear on but view, or and the flex and that to a a XXXX, maybe characterize compare you to have with parts might of potential client lot activity know the Want the IT like relative just and looking things growth XXXX of is kind picture moving that, you of side would last big the company how at couple years? how at weather

Joe Liberatore

levels. and say be Joe. flow. from would levels elevated continued is to at this order I Order has Yes, been flow elevated an at has

as it fact back where up saw order started left flow In out, to this right we year off. pick immediately

closest in the the this demand that going give of I of this dotcom health can now. the was marketplace, on market era. of the been XX So doing the demand peak I’ve in environment The years comparison terms the

panic investments standpoint from dealing versus dotcom different, secular the from I much terms driving dotcom the driven in out I standpoint. was. very business be believe more Organizations versus is today are obtainable real proving results, As cyclical, realize technology different making The are mentioned because that of they that what investments. need to so to much these we are earlier, a and with drivers like do business be

have seen, no standpoint. and So standpoint have an seen from order we really at flow all we blips demand

John Healy

any for me, potential year? Great. That’s there then as And as to housekeeping is helpful. just think couple tax this a rate CapEx way year just of about for questions for this well

Dave Kelly

Yes, Kelly. so is Dave John, this

So CapEx about has be where is to been, going it right.

typically some making. that technology investments of of we are about we So couple the last the see years, $XX million because of

the we that So you cash generate. about meaningful think when flows that’s

is. XXX lesser a of to fourth as tranche high again, It’s the But of again, see year difference next be would on that this mentioned I passed. think I as same the quarter indicated impact don’t expectation of big to credit I expectation it is tax year first to how going terms point. you quarter basis how In throughout tax we it stock – the think the to goes depends probably it’s this that in long-term rate tax I a had obviously, incentives would have a XX.X, quarter is although the the of basis that an in I regular and rate, on the a

year, kind XX%. to closer are looking full You fourth of of you in, quarter the kind you blend look the for probably it

John Healy

Great. Thank you guys.

Dave Kelly

bet. You John. Thanks,

Operator

the no Dunkel, David questions and turn I showing further time. Chairman in for remarks. now CEO I And closing queue call back at any you. this Thank am to will the

David Dunkel

Okay, our all to you support as consultants Kforce you we very clients of and that very your and our I’d corporate every again, we great. And we allowing do, future is field serving privilege say and member bright. each for believe to you Thank much. of and thank our interest stated always for Well, And much teams for to to and have while the thank like you. have us for Kforce. the

Operator

gentlemen, thank Ladies may your you today’s program conclude on for now and you This disconnect. your and participation conference. does

Kforce (KFRC) 5 Feb 202019 Q4 Earnings call transcript