KFRC - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Kforce Inc. Q1 2020 Earnings Conference Call. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Instructions] [Operator

like David conference Thank Dunkel, go sir. now speaker to you. hand ahead Mr. today, Chairman to would over the your Please I and CEO.

David Dunkel

subject call like including crisis. forward-looking regarding These risks and upon related the to benefits based you Good to that and statements to current opportunities statements expectations actions I certain statements are would that afternoon. and uncertainties. assumptions health this from may impact the contain are economic are remind and and taken COVID-XX

Actual vary public statements. Exchange forward-looking duty may the and materially results any listed from any and in filings filings the Kforce's Commission. Securities reports undertake update factors We cannot and other to with

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

have within In of published Relations portion remarks website. our Investor prepared our the addition, we

We COVID-XX the economies. impacts are health and unprecedented crisis navigating all global negative U.S. the of the on

very an societies cost impact human real Beyond personal is families. and toll the immeasurable the economic and taken on has which global

jobs At associates, a effect non-profit these are to with futures of churches small on endeavored focus and industries the consultants. large staggering. businesses, each Lost the we balance throughout our and constituencies to clients, responsibility have and particular our Kforce, ripple uncertain

and each with dramatic and simpler families impact in each us sudden the The and other. has of relationships some things reflect our life; of caused appreciate to and important more

We are changed. forever

and team ever a my quarters; none to like tight with have each experienced. I'd their spouses balance often deepest and home lack of executive our schooling and from their people home restrictions, support my to thanks suddenly us children; working to of of who had extend with in

You have been magnificent.

earnings Flex Direct April release, was begin as QX share. our mid-March results FA Kforce's significantly per revenues in felt most mentioned Hire first and didn't The and expectations for in performance quarter to both of respect crisis impact XXth in revenue press the our met our until our businesses. With and

prosper change The and firm directly management recessions a dramatic have experience previous to has through feel to multiple publicly related times survive as very fortunate its itself to a and of economic difficult leadership such that is navigated as team of these I team. quality ability traded to ultimately company. position a the

has team through XXXX's successfully recession Great Recession. on XXXX early XXXX bust navigated the brought and Our dot.com the both to by the

Our been always improves. our as rapidly priority the to take in our growth downturns maintain accelerate during has we well-positioned people market that important situation strategic so great retain and and are to investments economic business share

way. in We approaching the current are the much situation same

moving in spend while have Since cost-containment to prudent normal operations other spend maintained and areas. selectively suspending work measures hires from we including new home, temporarily business discretionary eliminating taking reducing

reduce Rather drastic a disciplined as to are operating We upon to current period costs have through navigate we based to well-positioned take to without manner continue our we trends. or manage actions raise will capital. having the business in always

transition made our and XX technology-enabled As soon business continuity cloud-based to seamlessly us within allowed our remote our necessary, became plans battle-tested operating entire hours. in with as along investments have we technologies to model workforce be it

have all thank responsibilities excelled and consultants, to people our like associates and confident balancing their Our clients successful. be and home. to we new I'd work ingenuity they'll continue service virtual our while perseverance are providing to in at for this exceptional environment while their

world-class to decisions stronger in firm previous critical decisions. emerged strategic each technology more case, on narrow a building key and these resources to to a due was businesses navigating The successfully of of our flexible periods, difficult we focus While most focused our some and and shed as noncore capability provide reliance on total companies. revenue to Direct percent reduce Hire a market-leading focus

technology as disciplines will professional this sets remotely downturn that capable continues. effectively and technology and the of expect the skill of more We in scarcity up during higher-end professionals technical are hold working well

only drivers the secular evaluate crisis supported positions digital and believe that geographical current also their has efforts of risk strengthened projects as demand We and transformation being and the companies internationally. in assess technology

as XXX% domestically organization a our confidence being gives of solutions staffing higher-end XX% business technology in position us Our focused with great forward. moving and concentrated

We will technology priority to on grow place continue our to business. capital allocating

make strategy are and services end focus unchanged being The don't we very expect in IT in of acquisition near-term. cautious the though market is to our higher any solutions acquisitions and the

is Our while position, maintaining current our our financial to and priority capital dividend. preserve

new that already the we As begun emerge. have business practices navigate landscape we strategically and changing planning will through for models rapidly the

changes technology by All resources will expert require execute. enabled of these and need to to be

same People and the way and we the time together or mobility, travel tools the sustaining for home and have alter footprints from meetings use This productivity. embraced real in will needs of at increasing future. collaboration online estate while the with work work

to and lead We to growth improved to technology levels we enhance are expect service accelerating which profitability. investment efficiencies our drive and faster greater in

these future are we about the our times Though are excited firm. for difficult what holds

a employees. are place satisfying for our reason the for realize on our work success past We the in future. environment safe key to hold success consultants they providing continue emphasis We to and an and the and core

crisis, to and into who the COVID-XX over date insights turn President, impacts experienced the now the certain Joe Kelly, capital and position. and I call health opportunities will we've expectations position and our recent to our our other insights flow sheet give address CFO economic from operating trends, Joe? give cash will will areas greater and operating overall balance Liberatore, in into detail Dave then environment.

Joe Liberatore

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

and We significant my years downturns. we now one proactive any client. several companies, economic weather very dot-com client every by have our taken services. with course steps of that out strengthened a concentration subsequent technology diversifying have provider began downturns our portfolio industry top specific who position the firm's virtually as are the ability with and we've Fortune little of Kforce, relationships or would that to strategically economic XX users strategic largest Coming target across client relationships evolving navigated in building flexible During within the recession, of us industry XXXX

better serve base, initial capability. client To out phases began delivery we high-volume of demand the building from our this centralized the

our significantly the profitable as while model reduce on structural percentage stream and adjustments redesigned less to only revenue mid-XXs. the to improve revenue necessary declines overall that Great during declines overall business operating yielded our experienced Hire sector of X.X% as to to Recession and also revenue, XXXX/XXXX results of model the in the X% We our deterioration of revenue in operating a of reliance technology our we comparison than adjustments in making Direct overcome significantly margins. These loss the

growth that and their in as of out Recession, experience business focus focusing largest investing noncore strategic continued consumer-facing business within a began shift in in take our all our Coming Throughout market advantage we mission-critical technology-driven, recent initiatives investments transformation potential emerged. beginning cycle, by models in was demand world-class unfold the Great shedding limited we as the greater organizations efforts to digital new of secular acceleration began narrow strategic journey with to technology the most companies. to size and the business to

be in We performed believe navigate times. driven high-demand technology effectively focused domestically our can these to which offerings well service us unprecedented remotely extremely XXX% has positioned skills,

second first and this quarter belief. early trends support Our quarter

significant initiatives, allowed also delivery Additionally, revenue which us FA support to to COVID-XX-related drive in expected our critical business. have government-sponsored operating are project model and large-scale centralized capability our

X.X% really Let noticeable performance improved were the COVID-XX to as color business, quarter experience crisis the of less down until by up revenues each X% on for me billing-day month on in impacts Flex were technology of month week April a April the business trends. March. second revenues Technology with didn't March, quarter. the last first On respect next basis, We results as week than discuss Flex year-over-year basis the the our line X%. quarter first last of early providing of well With year-over-year down for X% slightly from in a

been might meaningfully greatest widely you geographically has travel travel, early declines virtual the weeks the leisure were significant of in the the sectors, certain have which we have principally April in-store health concentrated medical and impacted relationships. As consumer in deterioration pace both procedures. expect, among significant few spending and and over by clients where occurred by industry more which last retail the care and and majority less shutdown of has decelerated revenue clients of been distributed elective The in the

and recent billable and weeks, of weeks consultants, though may driven a rather job ends or nature perform to to More are a activity been replace flow stabilizing environment order primarily driven to assignments last of lower over the not at declines These lower revenue have from suggest level both clients attrition the to than effectively by prior seem project assignments remotely. stabilized of crisis. those several further have extend Starts work point the than the prematurely. ending see to whose that ability coming choosing complete their in deceleration critical to signs due we their tasks and consultants,

evolve at have the our large sets users our changing to provided positioned meet by solutions, in services managed needs focused technology, With talent and to large-scale We U.S. offerings talent clients' for these deliver capabilities scale large are demand of to and needs matured our for qualified solution revenue have diverse we XX% to well providers. of these inclusive skill further that source priority of historically across expanding

of increasingly our of to economic as to presence collective ours, and with due competitive economic firms the financial staffing allows needs. We companies to viable of in that expand market, consistently The in meet our less stability. during navigate believe look or capable those extremely We share and the uncertainty the capability and their market to these strongly business confident attributes service us especially emerge ability technology periods companies these disruption longevity such scale, financially geographic downturns. positioning offering will in confidently to feel as our combination

in revenues much FA the X.X% X.X% FA first business, our and to On April were began end to April, rate quarter, down including the our XX% as within partner of revenues the the as government's crisis the declines this business specialists. like were were from last roughly service call though we Tech with with week March, current quarter. XX%. and down month companies earlier negative the well of deeply the with decelerating basis, the loan-processing are for felt of business. Flex of We of the for pandemic a center impact that the roughly Flex month associated down more year-over-year several customer line in near response roles Also, is agents supporting the down of

of support to a brought reductions we FA provide revenue the business, by our core on opportunities the crisis. These as navigate level Flex

centralized to disasters support delivery relations a million. natural during source our in of personal fortified talent are ability deliver large uniquely these prior see $XX by and business our on project-related us capability to critical second due million to range long-standing stages, scale, primarily Our these $XX quickly experience clients in positioned to with initiatives. this COVID-XX the and we fluid early in for engagements but quarter can These revenues the the and

X% decreased hiring than revenues a We in impact offering XX.X% Hire to and this of the economy. due March, Direct impact to the crisis less down overall of COVID-XX represented in XX% service revenues. year-over-year nearly in lack which as first the quarter began significant primarily U.S. was the experienced

trends, month year-over-year As of on basis. down to a quarter second for roughly Direct we look the are Hire XX% early revenues April

of concentration over most of peak offering revenue and to Direct be expansion revenues by Hire in to service uncertainty the economic prior Great to And As the the we peak were revenues our the economic bust, cycles, At Recession, XX.X% most of tends at the the the of revenues. Hire Direct revenues. impacted years. expansion, X.X% consistently have Direct the economic Hire recessionary reduced this the dot-com were prior of

Direct Hire revenues the to quarter. than We X% less in expect second of constitute

service the also have Hire in sensitivity to that to offering economic the here, the allocated space. part long term, not the evolve have technologies cycles over in Direct remains an we While our revenue part, disruptive and due of this of significant clients investments important continued to to stream

in capability skill the same our sets our we business, able as practice channel, similar. through provide the service Technology Flex to are technology Additionally, Hire are we Direct utilizing

long Dave to continued As invest the to better term. for stated, have strategic in initiatives position we firm our

in to continue the activities several our our critical Talent to innovative initiatives, system, in talent, deployed and which Relationship identification quarters. with second including of third Management invest expect to matching drive we efficiency the to technology most and We throughout from along the the technologies phases be

productive we levels, market performance elevated continuing in with large-scale our associates, We've currently crisis. so staffing managed to our suspended an as associates navigate this hiring therefore, due the the reductions take declines focus productivity and typically not do, the new anticipate attrition, of best the overall we advantage as but force. crisis in of positioned we to subsequent to to retaining any natural are we We, on most our manage expect do are

has capacity, and, expansion. our situated believe, the ideally environment cycles the Our result clients, for market I thoughts in we an placed and we on team's remarkable trust of through managing been take echo recover Dave's digitally-led candidates in these could to that, in advantage while a accelerated experience conditions competitive recessionary we consultants be shift appreciation what, in and efforts are a the Kforce the fully remote have our times. in executing believe, as

turn over Financial I'll Kelly, the Dave? Chief call Dave to now Kforce's Officer.

Dave Kelly

performance then, details insights give around cash strength the flows. the some first in given into our commentary quarter and some provide first I'll you, liquidity Thank additional and Joe. environment, current and

Revenues share grew quarter X% excluding charge in year-over-year XX.X% per grew KGS or of of the to first the a XXXX. of earnings XX.X%, related a taken million divestiture $XXX.X as result after quarter in $X.XX year-over-year, and the of actions

was quarter result of profit as margins. year-over-year, which of the lower Direct Flex XX partially improved gross in the Our revenue basis percentage decreased points gross Hire by a offset XX.X%, primarily mix,

XX and improved year-over-year by Flex, margins by declines basis on our spreads the a points a tax our from Flex driven basis. a sequentially environment first partially profit margins margins. Bill/pay FA principally FA improvement favorable in Flex business were down in gross Tech XX in Flex benefited which payroll in technology stable year-over-year, quarter basis was slightly in offset point business.

relatively Looking is concentrated reductions been assignment April revenue to seen result lower due seen in Tech of less changes average spreads in and bill/pay criticality Flex we've have combination a The and remained a more an assignments, in rate business speaking, we've our increase while results, sets primarily have work seen rates. in capability. with attrition, skill our rate those at our in technology bill higher-level role business of tech have The likely increase bill stable mix. of remote bill

in large-scale Joe lower result Flex support while FA We initiatives the as margins, the experience will declines revenue, business. overall average which, primarily than margins of of driving a mentioned, core have FA significant COVID-XX-related our

diligently XX flows, associate in as increasing to operating grown and significantly leverage spend, the have initiatives. on significant managing in while first points as through SG&A our year-over-year. gain cash our spend still continued revenues a revenue We've technology quarter improvements improved basis productivity and declined SG&A percentage of

costs several there SG&A of By Roughly $XXX.X way performance while are last nature, and to which revenues operating of earlier us though leverage, years, Dave hires, crisis expenses flat, years typically naturally noted manage with the last current our by in five over stream, been have essentially position some in a grown comparison, quality us of actions associates actions million. allows a have put These revenue our the have gain in our expenses to to along reductions to over continuing navigate XX% taking is slight without taken variable cost-containment by to reduce by the SG&A relative drastic the lag of and new action. suspending reductions. revenue annual the cost significant

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

rate we which was as the to discrete anticipated, in filed tax XX.X%, effective In related divestiture, our a slightly the final item higher was KGS returns. than addition, tax first to we quarter due

dividend repurchases. capital returned XX nearly press in release, and million shareholders April As of our in to share XX, our our quarterly $XX as April we through noted

in upon flows. our positive confidence cash maintain also our to significant our We to generate future quarterly dividend intention continuing based affirmed

future our me few Let liquidity discussing position, as well a spend minutes as flows. cash

as facility have in We eight May Fargo a administrative revolving other $XXX XXXX that with financial top agent, matures million credit institutions. with along Wells

should incremental we XX-month March roughly EBITDA, trailing borrowing Our of roughly XXXX, million. capacity, was currently of provides which million, as $XX need $XXX it, XX,

XX, times trailing roughly EBITDA. of $XX approximately debt, March million, as or was X.X Net XX-month

rates historically swaps noted in interest of release, rate all-in rate entering we low X.XX%. $XXX an on advantage swap on our into debt, of the years. five is three between of decided As we take tenure at these by and to million April XX The interest

on down $XX we balance from currently the our liquidity In on of million. also sitting outstanding credit and so, our sheet, facility, drew doing hand roughly further cash exited is reduce million any incremental We which to with cash quarter $XXX concerns. of borrowings

balance, as as source XXst, of March contract. of net was serves liquidity, approximately which capital cash Our reliable million, working as $XXX on another of revenues hand,

in outstanding, sales payment two to clients. by increased our days days first by due approximately the extensions While quarter,

accounts our is portfolio believe companies. receivable high-quality comprised We of

seen DSOs operating taking time, prudent minimize not future steps three last the significant second have we defer and significant to the quarter. extension where flows expect stabilized. any expenses. to cash cash to have strong, We same be weeks within outflows in and the we Overall, are At requests, possible, quarters

due are enviable resilient cash accounts levels, to We in believe flows, position, low high-quality debt our we an portfolio, revenue stream. and receivable healthy

to business, investments that the continue crisis in position responsible market as believe our in us we to subsides. make the We outperform

safety and be, Our health number our employees, to clients consultants. one priority and continues the of

Given we will were not for in second providing guidance quarter. provided release, that But additional uncertainty, expect noted trends, into press the our and helpful. significant insights be March the April we as the monthly

$XX.X and Great market, Our for XX.X% the weighted are effective tax the and be the outperformed average second Kforce million quarter, outstanding rate shares during to respectively. expected Recession.

economic COVID-XX and At total today. position believe XX% the versus we outperform, that even better time, We we health revenues, an in to are current XX% comprised only of navigate technology as crisis.

that of our brand promise, their efforts the over partnership to a of are you, living prepared six up my ensure remarks, great with to strategic our knowledge end for providing all weeks, to results, through last thank we sincere and sharing. teams, I'll

like the we'd over now turn call Operator, to questions. for

Question-and-Answer Session

Operator

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

is open. line now Your

Tobey Sommer

I quarter. in wanted When it may start quarter? did Thanks. that long said to the how or off might the you you or you. Thank in beyond $XX $XX have million indication start? about, contribute go a F&A for, by projects does do any related question asking business, that And million, the

Joe Liberatore

because we're parts engaged. is crisis engaging months. hearing business this is of this several that most with started is partner, some working to government. are Liberatore. And in different the we're on probably they're Yeah go extend six different from to the Tobey, is, some those some that obviously based overall what could plays those now, already projects overall business out. of weeks it ago, upon, Joe of of The the of how projects the four expected that, -- just than further There's just

Tobey Sommer

Great.

something And the million the less gave growth make -- monthly been to that than rate What a or you ramps, when project out, us to strip so fair quarter that say it $XX $XX is that been is has that? have you figures? did month if the business April, F&A but of would million enough run you not adjustment full of in

Joe Liberatore

necessary. Yeah. was that No, the stripped monthly as in with you do that, so figure that that your I modeling, FA opening comments, business gave could my legacy the out, you

Tobey Sommer

about lockdown back as you perhaps normal it once to this -- of people strings high. isn't kind get holding All How And in cetera. for business that stay-at-home well pull beyond we unfolds to-date, right. maybe they you they do think own functioning rate, Tech they're current, purse a about work, referencing services their realize demand more business own think and the phase? of cycles? at et very As well, prior back their kind way talk obviously up could

Joe Liberatore

general, not Obviously that playbook, leisure, the had have like the in being directly we've say then, they in different what really do being the I that reactions. two travel, clients. and been where impacted. on anything, bricks-and-mortar harsh they've to retail, would put exercised, are obviously, or separate clients playbooks impacted, would everybody industries those is I else, And a are involved, of that one end you but end have experienced to-date really in terms by Yeah. in

based those that eliminating inclusive say, directly projects associated certain how scaling impacted. the been reacted critical upon quickly They very would those expenses I obviously adjust have their resources So, back or of projects. to were. And

that or usual. negatively Clients of a directly operating even into them -- like or so impacted, I services communication, is in are financial they industries shifted as mode business some weren't stabilization would really impact what more say

all subsequent through So to we were see most clients really and roles handled did go initial that, equipped what at, look do not or remotely. What being stop. of basically capable technology hard was

so through alignment went was those. some there And that

just And critical organizations how staff. furloughed reduced the the the people, with of a lot to Some that was. roles had those others of nature do

seen we've nominal ones overall so more portfolio. recently what on. teams the is here our at working of least elimination And their really that really been clients projects, are seeing total evaluating, We've project

out However, we of extend seen have some those further. projects

for what to and project with cost, that. they're extending resources So some the adjust aligning doing is, they're

project it, duration people has costs. fewer manage to to on the but So a go for intended it's longer

and seen exposures for work dealt with, requests at robust also quite hear bids, onshore of have of are to early infrastructure. about looking back organizations that a from bringing which some don't those the because offshore we've for they countries that So, some begun

we're on, are accelerate, at say already in looking business. would is closing, thing digitizing companies terms their last the here working been seeing that to where I in of really then, what is And they've opportunity the

unfortunate area. has to just are It's that this a we real push this big to situation. hearing talk But think too be come little I those there's So may in about early that potential if right companies to that. positives of now, going of a a tell significant be one

Tobey Sommer

been shifting appetite business? little getting organic here six months. cyclical. a more having that for you've do And is XXbX-X Yes, recently. How to and work decline, me, think lapse on on about if your Thank the you comment the think share you. But more Last bit you it's demonstrates next F&A could four repurchase question significant some focus you about the to project for Tech. as more portfolio, over

Joe Liberatore

the the handle let part question, I'll Yeah, of part of handle that and first second Dave the question. then I'll

So, as our be business, handled heard around at able part to to of remotely. that on that in or in competitors the many our capable not and FA space, first what being that roles of many from that of play those you question, we have similar look of really space yeah,

we pretty did role. those see they there couldn't some to their keep because able declines and staff sharp So as just aligned then be people they perform

So we this, business we and opportunity as true going us an to to are this capabilities provide look to that to we to do step resources. will quickly our scale, are rebuild believe be as deliver like? back say, an highly talented we at the taking of do look what business coming what this So opportunity out in-volume at want

So while of aspects firmly still we opportunities in business repositioning what the we very some look some for at. of staying entrenched see

in And in world going the strides those business everything with we've to analyst intelligence that that's else, good skills everything on made in are F&A be happening that and a basis imperative the area. some especially move-forward

So to able push be we've from standpoint. we'll those stay lot continue of be and in to handled directions on-board because positions a a actually remote seen those

we're the FA that's how So overall business. at looking

David Dunkel

and was repurchase, sector the go. Tobey, it how would a was what it that respect was to unfold how deep crisis With staffing long to the the saw collapse it pricing, the Dunkel. watched as we us too in is -- unpredictable to Yes, and Dave share clear know this effectively

capital still let same that So well. that our to to at we performing to time decision shareholders preserve the the and we made were withdraw know

will look needs. we future, balancing As be the capital that any other in against we

on As my I we've got now. M&A mentioned in remarks, prepared right pause an

are in prospects, evaluate to because the continue business capital. to we point improving, that preserve not couple at this quarters are do the next to to allocating look we'll are going going if at or at We look or again. we stabilization we going capital near-term, repurchase certainly to as of back share although the we see pursuing be But

Tobey Sommer

Thank you.

David Dunkel

Thank you.

Operator

you. Thank

Blair. question from Mulrooney William next with Tim comes Our

line Your now is open.

Tim Mulrooney

Tech the in of hours the like And in worked which Can through a that comp looks trended year-over-year Flex It metric were afternoon. did Flex last IT I I think, you. how were business good this April? how trended us April? tell your how your has Thank quarter -- year. pretty in guess did X% Yeah, same bill business, or rates up you how trend that for tough X% up that on thing first through

Dave Kelly

Yeah, Yeah, this Dave is Tim. Kelly.

X%. hours his I of last worked April prepared terms the terms some Joe were sorry, Total last of X% in We March metrics think X%. down had April week well, down as tech to you total I in ended in So -- or We in revenues. given remarks relates in were March. then it ended think in I'm about down that week. revenues

had is seen the bill some actually one of rates. the that that Also I noted tech ends that of things positions we've in our business lower from were

bill really of down hours the we've a it in reduction that and is by rate. from X% Certainly two but number an in precise increase decline we're down, I that don't mix that things. worked bolstered seeing we where are seen entered a that is have of So but a quarter we terms

matter April at about the roles a in we companies speaks versus spot where rate average about helping think I sweet first in We've our needs average the critical the to of here. we always in areas that look rate being have our talked tech. that's tech at $X fact, we if think us As place is up criticality quarter. bill Again of of least that bill and

relatively In FA had it business that about FA week I stable, at our business look are talked clearly. relates XX% We of in last this in the Joe business. As business, April in to as this, bill we decline parsed think. April, the rates core a

Tech worked right? down so about this remote so number again. is on very certainly in. we of And done, capabilities how business business in that this the about is This people less is business you a large part that exist much hours think assignment are business in F&A

Tim Mulrooney

can Thinking And work than in types maybe bit just you Flex the I Yeah, of done, that's the and little where mean you key comments expecting? business, trends softness being were about about skill building your more pockets sets? what where seeing you're strength, on Okay. there's been about of more a your helpful. talk Tech conversely

Joe Liberatore

Yeah. Joe. that's out the rate there we've is other BI areas. skill look high development, is if tech And think management, tech our This and I'd really other what's most I that say that. of positioned competitors see where with our average the you'd project to majority at you bill of business some app versus in causing were of really

don't infrastructure business probably these higher much more move areas we've much that help here desk, some equipped that's have quite seen in others. benefited us skill roles to do think partially And as been because we really I So remote. support

thing much So at strategic we they're the that assignments in other nature critical very more projects. linked to is and look

really operate where we client that's been the we've ourselves base within within. positioning So that

Tim Mulrooney

Thanks, Okay. Joe. one Maybe more from me.

in there about been relationship today other about about anything in but a been you to investments areas. talent focusing competitors prepared these is listen to resources? talking that system, remarks. investments of Can your that talked I some talked technology-based you've you management accelerating also know talk your the of can about talk know different technology So recently? you've I number making you've with investors know you in about Denis where you're your in calls, investments but Obviously, we making

Joe Liberatore

as the competitive guess into core our model. investments allows the say. But to from little our bit it operating how mentioned, been -- technologies us technologies in but I how of And I making versus of a much broadly would more go themselves, and positives our we've it has not processes, in our model faster. a for years maybe that specific they because ties into I'd I team many around just think we've with big just Yeah, operating this been standpoint I'd link simplified one answer

guess I this part So and by is luck. -- part design part by

because really we Outlook we we're over were So remote has system fully paid weeks with years is the our last already us for ties Microsoft seamless made dividends, our several teams. really with now that what platform, because environment, beyond and Relation, for up Teams and just in and the running our transition the fortunate into we these commitments to especially built ago relationship a management customer work a use Talent several which Dynamics

lot I to other actually know a calls gotten kind would virtual video platform. of through gotten their people know and And went meetings the as we is been what show for on really everything cameras. and face-to-face to up interesting. meetings our meant from in is that It's each to I've basically else say you're When have us better they pets overnight. everybody's kids

dealing -- we're as, right? So sure with, I'm all

Tim Mulrooney

exactly. Yes,

Joe Liberatore

practices. is out years six this we best with us, it's it's have several seven environment us up I been in think terms really in played taken of matter an I because But of think probably what coming a current think would for adoption accelerator, or accomplished operating it I what have and weeks,

So, very, powerful just a very platform.

they -- what's the part right? think what I mean I of we're that's But what crisis And of is that old experiencing. staying, invention. mother

CIO, just and CIO operations. a -- I they're is our top So, and they very with well Denis. work would class team mean visionary lot very is to our tech it I top I mean our a attribute

a referrals we lot of around matter example a we everything of that our high-volume XX some platforms prime place area. in in in A capabilities. the and we generating to in with staffing continuing of do are were were innovation is needs hours. thousands have like referral really put I these we So mean when

getting So of past out or four work that dividends we're better the the on we've been working years. part really of three for

David Dunkel

to were to due quickly to on we've we it. be the our do Yeah. in work-from-home. had to weather past systems the conditions This unfortunately, Yes, the we're often how we've battle-tested to to in is test that part of that. And able Dave in Dunkel. A go country being comment able

So fantastic Joe our Tech said, a team and everything went. shocked actually did how job as we were smoothly at

went were on on of our they seen our Boards several any serve other and of on never astounded. We Board have everything of sit and at we've Boards. were how said, They sharing we Boards we other our smoothly -- meeting Directors kind other

BI So truly needs hats as adjusted team. And to our been we've tools. they've and special very to off responsive

the with lot a still us the for as With we as mentioned, done our to leverage was of of to Joe tool have, more there And still is go so there's pay that lot said, that and starting well. work TRM off. in lots past a

optimistic So we're very about it.

thing. If to you one other I add look wanted at other side, the

the going my productivity other greater driving If we're to less at mentioned going tools. more have what's look those real this, look result I of in to of to side travel, using remarks, going it you like? We're as prepared likely. estate doing tools, a be less

gears way that. to about making other do and you like look something add actually adjustments We've thinking else? want So, it. thinking what's shifted and started we're the that Joe, already we're side about to the excited about

Joe Liberatore

other clients. the with to support equation Yeah. add, project-type But the also thing we're the I tools more right, core where upon talking we're didn't side the really of that touch our online working become pretty about was some The I tools. have virtual proficient this, one teams work but really it's going because darn of with our because

really as some from more And gets methodology. as agile these about are of development a is which face-to-face it methodologies,

gone a way in really to virtual handling situation. have able really virtually teams being handle our and But boards a combine come long completely stand-ups daily in

as So no for impacted be we from within doubt that's long efficiencies the drive another is doing area our term how going we're to on end a projects business this client. just

this certain the business we've say because parts picked that day-to-day have is, of experiencing discovered what live past part really will work overall of operations aspects seven better what lot on process. of normal our last I would also there's we're long efficiencies the think some the placement in a we XXX% productivity of our up and weeks over environment, I

come we're about. exciting just So what really seeing

David Dunkel

and invest. to Yes. capture we're other we whatnot, able sheet on enabling be where stand as going Yes. side. mentioned the Because the to to tools in to And we're successfully think factors how share given of balance are going I we really determining with continue the the earlier, one

Tim Mulrooney

all everybody. for Okay, understood. the Thanks color,

David Dunkel

it. Appreciate you. Thank

Operator

you. Thank

McVeigh Our Suisse. next question from Credit with comes Kevin

is now line Your open.

Kevin McVeigh

this whether I safely you other, just Dave to any positioned Joe, this Dave and was Tech Thanks, mean pandemic. definitely hopefully managing event or better or it relative roll into GFC. Great. it than you're seems like

things how about your as share that talked much on I by to impacted. clients And not key shift? think tie you're emerging are impacted You of you of mix directly want you directly focused What just serve a kind of client were lot incremental that some about in kind of into terms the stronger. this versus

Joe Liberatore

Yeah. within we're directly customers there, We percentage a small of in as certain do high industries overall I'll last percentage but some the first. were there, of within take overall clients, in that those our business concentration impacted. Small piece the very portfolio fortunately percentage.

didn't to When it but Tech -- and came time. to part to thought this, of of out in reposition my right comments, basis. long step we of how made the the front-end that go we on to how about at the very moves positioning how and at important look back mean that's what I we're the a to point did business dot-com think the all I we're business thinking I we And move-forward was we on in opening

how we started the crisis did the long hits down we learn the stepped we when back from a we're narrowing have that our we same we what something experience? we can healthier things did be out tech said which really it's right a thing. of we variety in now And sectors back And business next us? business when this We And out time in I saw best domestic the secular think that if today, Tech reasons. is probably the of that It's are and are came XXXX drivers -- to financial then XXXX. of And because you going the lines of for look in. on that's at place of journey the and the are all in, we you where be could

environment look beyond did remote which upper we of that thinking very when you this of our And wasn't in work the and remote obviously so then capable, end now at that. Tech being that, part when are

tells -- They critical nature that it turn not got their down. but But I are of one companies plays well. today So we those cannot customer-facing they turning that just off lucky think it technology the activity. to on you things

more organizations into And fact, those in that migrated laggers their saw in have much up that business, were that have the we pain. the Those retail are they've digitizing what space ones felt held the is better.

we how market are just that positioning looked the So to in done now us they business? for efforts to So and XXXX, out concentration react, portfolio terms their well in of we in we've played really that industry back else went segmentation from we're client our things very those optimistic obviously, at through XXXX going really our everything and where which point. this is have up

David Dunkel

this Kevin, Hey, Dave. is

Sometimes you're lucky.

that role focused at with other President's smart. the which XXXX, businesses tech had we back and and discussion are stepping it domestically. and realized don't a when But here exit know was the where agreed XXXX going transition we the into to in time were. now concentrate look the strategic and XXXX you're XXXX with and on market I Sometimes one and we Joe was

after ago years well So something woke and seven, looking go started said, wasn't we eight gee, one day let's up been tech. that has back and just we've this it that something

coming. were whether about or it been positioned. don't was but we good, know, lucky what we right we saw appears we And where So we've were that

the at the went remarks, in least right our we Dave being XX% see from looks now tech as be. place can And we now today So what opening mentioned like XX%. certainly tech revenue to Kelly in from of future, being to domestic foreseeable his

Kevin McVeigh

opposed to harder remotely potentially say percentage business what exactly but and terms would you I the you on, prone are of was as work be on-prem to business Agreed. Yes. to that other off My truly XXX% -- around is work, too, of or... lucky and cutting in Dave. Tech versus more question is the just the needs able again the

Joe Liberatore

might out of Yes. of high we clients outside overall very the in time, Relative to I in percentage migrating people capacity. very, Again now the this certain office be into that with that was about. population have back our at point tech remote a part was talking those that what marketplaces of in

of capable facilitated as Just do moved the lower-end the of that projects being remotely. that work of the don't nature aren't roles that We a we're and people of lot capability. type putting on

David Dunkel

most they weren't tech Yes. was crisis that remote. nearly, I the were either at that remote of capable off was working would were The nearly rolled the the side. -- skills everybody when peak, ended say working that its of or assignment ones in

a after of told nearly population remote. quarantine at stay and at working Tech So everyone point consultant time to was our home, all in right was

Joe Liberatore

sets. Kforce an population tech the as remote department is inclusive that use We skill entire moved was Tech entire you And and our spectrum. of that our covers all was whole because – example of

to for with the similar work do easier that that because us those Now we functions, all it's end clients with. we control but

things the in geared we to as function is is remote mean hold with a sit and anything up, well fall I very going we environment. are here today now just to know open or pandemic able starting to And be don't what the else. Tech to

blessed very -- the to just are we positioned that footprint way we're confident and with very be the we So have.

Operator

from Our with next Andre Baird. Childress question comes

Your line is now open.

Andre Childress

Marcon. This Childress is calling Mark Andre for in

everyone hope, thank is and taking and healthy. for my you say wanted Just questions I safe

quarter color two? with you expenses you're trend to your provided are of that kind measures. expecting taking How And you XX% SG&A So some variable. well as cost-cutting several is throughout

Dave Kelly

is Dave Kelly. This Yes.

would things. of a I couple say So

is as important as key that is to goal how allow to managing we business, here whereas which have strategic to grow both us critical to our and we keep think think I said, we're make the to quickly Joe continue and position this our enviable things in we're investments David reinforce to philosophy an resources and turn.

say, I So not you're align are a the as where costs see might to would situation have going historically. they going to

business and comment look of to a productivity a lag made as I of bit associates the sometimes there's there. as managing our well we the a

are to know generally because difficult don't well happen. -- what's going as somewhat think think and speaking, to I we predict costs I

point important the generally think to retain the I have. to want note we is that here we So people

drive that very this. of to going that. make they're We that that financial us out productive are to the us got strength want the flows have allow We've do cash sure to we

speaking, the to generally So future. we're looking

looking relatively going are might future. of have terms impact otherwise have they an in been. speaking what to We're that's expenses to where to So the

David Dunkel

two, Number of reductions we other not couple would -- business add and a we this this process done comments. consistently need because don't as so I to have a comments, it one, an number that. with have operationally, there not say Joe's one, even now manage Yes. to to throughout RIF; at just I we our would four-plus moving tenure we wasn't need that and plan really are up their not people due people four there's all. also the continuing of people, do staff to productivity are And performance two any our go and no our and particularly do and to up

retaining them more and focus our the be fact, giving is In them productive. tools on to them help

Andre Childress

on new being lifted on that. seeing color are terms IT the All you And still how for lower. right. about gave prematurely, Flex contracts or a side, in What like Thank year-over-year of weren't you bit basis? new some you a were starts ended but starts

Joe Liberatore

Yes.

I so heard if level probably provided we're would it there you've one in I'm decreased starts not summary, earlier going expect. an historically else to from this haven't you at I like job look will order from indicator We what But call. level as tell experiencing on everybody go

we're orders job fill a actually the we're thing higher that orders the is also that job of are have higher of quality. one getting rate within getting. a However, rates we bill we're They're higher observed experiencing and

by wasted; they client competition, end driven less nature. out in they're times; roles really this results critical better to during So greater ones we run we which reduced have these focus fill believe, the there the over a that can the yield same experience being always just and because the or long time

Andre Childress

Okay.

that. spreads, an pay/bill for have in request on concessions recently? seen With you uptick Following with

Dave Kelly

is Kelly. This Dave Yes.

So significant say about requests. of But in a saw those. were is we those there saw recently would mean, depression that in no. way would most I say, it industries early, not this think some the wave has and to we I heavily I been

seeing said that as things just those aren't just one had stabilization. few weeks So a some as we other much of of of ago. seen signs we we've probably did that That's Joe

by the you in tell that comments would spreads made the our I aggregate I stable. And way comments are –

– from rate being and higher by things those offset we're the bill are that standpoint mix activity some of seeing. So a

we're of good with. whole. place a in we frankly the portfolio as think we inclusive a business really that So in clients And is do terms the of that

So we've relationships great with got them.

color the for. you gives that you're hopefully looking So

Joe Liberatore

can to When with these Yes. little would point I want we clients, on bit? very we relationships. here. I I miss strategic What really important are just add don't add a that there's mean to work think a on – I Because that

they're long-term their partnership through We're for our And $X for periods positioning and out when with are dynamics, certain we of watching them. digging through certain working margin. in So to help time. the them of going we're them just business of not in long-term, a heels with

organizations different some with impacted accomplish were initiatives directly to the strategic they worked we've types day even on because they're end were of the of them our fit So on. different really of trying at what arrangements that certain the they talent organizations those board needed with of of strategically because focused keep that to

last relationships we of a with And things by these it's working tough that you client in a clients for clients handle abandon client and decade. just that with we've been these working just aren't partnership started during So Many year. with these don't clients we because we're times. somebody the

through been those the financial going the and years over dividends decisions kind us paid out in coming there what dot-com, You with of hang of them have the crisis.

long-term And them. our doing clients are relationship and by both so of with our the about and right we with consultants

Andre Childress

for to hear. you good color. Thank the That’s

Operator

Thank you.

Our next Tobey from a with question Sommer is follow-up SunTrust.

now is open. line Your

Tobey Sommer

topics. not be sure Thanks. a as relevant talk two even touch company. I you we topic. being the I'm about would it's on which a One used to how could ago, for the XX, or whether if wondering just was NRC, evolved years XX that's differentiator

to refresh pressure technology you bit on Could us. could pressure there's a competition. why then mentioned respect as the And little to elaborate Flex there you perm, and side? delineate Tech not maybe and If with just you Thanks. but

Joe Liberatore

Yes.

which really we've that we of delivery it's recast capability delivery a centralized more now. capability, how NRC, So handle really

source been has provides building quickly be, identical bulk used journey opportunities out projects. really to – us of in it service and some basically the well some things not it's that capability what essence, platform a that in through to of as these This technologies But our been to and KFORCEconnect we've not service deploying capability. it's efficiently offering technology XX-year that as we've that right? utilized because such as that and to So

estimates a of see I of revenue you And don't Monday. of we but we in can three capability I thousands started by we and I do QX. without that You hundreds able of candidates been a it tens the centralized candidates matter mean to to would say never candidates mean, serviced, gave that. two for or of people want north have those and through days processed that on mid-thousands

in requirements – they – So come because teams seem I arrangement out when credit, to give these in on those work mean the I come Thursday. always on we a

Friday. We lock it down on a

weekend and hundreds on people of people Our a work starting all we're Monday.

deliver that totally that end their And commitments it's Monday. – on blowing. they because will a have done So teams not has have what on the been mind they just our

that side equation. that's the So on of

Direct and the it's a if critical the these Hire consultants it's goes those keep Flex, to place. is cycles thing mode Relative that perm it's of Hire. care are protect a the mean not problem. a into as their delivery problem I to not locks don't in because everybody Hire, Tech Direct I F&A care always It's they Direct And demand want Tech people. first a to supply problem. versus want They – that a it's down mission-critical not I if it's or don't core happen

needs. perm the stop most hiring outside to part having for backfill critical they So of

starts – Flex if back the then they have get that's typically typically to XX.X% in were business perm Direct to And our then where that we And in the the was then when stabilize, started cycle. in the Direct dot-com, back Hire. they we in cycle of kick as Hire cycle confidence in. this confidence in starts revenue to until start When they bring

went XX over industry that quarter a million we later $X Hire million finding And to literally in ourselves years was from was. six $XX doing dot-com virtually then $X That's Direct of into doing quarters million. how because ago. zero this And came Tech-centric how Tech I

over the one this our one decimated the wish of down is this the you Hire last out? I just you this could going go Direct play the through I time why is But tell point Tobey. unfortunately. because happens XX course cycles, mix these years we've shifting How to is every gets been of business

Direct people which try And business Tech through through having be business will then same and many the and you we out we're that so not why as of last Hire exit the as becomes comes is when here repositioned people because, perm resources of carry that that coming service those cycle, you we can, guess back what, people, to same perm hundreds hard around again. our it

Tobey Sommer

have I’ll question – leveling offline. other for Thanks Thanks.

Joe Liberatore

Okay.

Operator

showing not to back call I this over remarks. Thank Dunkel, closing any like turn questions and at you. would I am to Chairman David now time. further CEO the for any

David Dunkel

field our you. to your you Kforce. And like times much, excited Thank very thank the times clients every about for six efforts unprecedented our last we're privilege and teams again interest and all Dale. tremendous trust and partnering talking corporate you the for and next to of very and for weeks of it. We're four truly forward member our our consultants serving each in with their and these you allowing support you to us are tremendously you much. quarter. during you and uncertain thank your future of and looking Thank say I'd to I with These to also appreciate Kforce over

Operator

participating. you conference call. Thank Ladies for concludes today's and gentlemen, this

now may You disconnect.

Kforce (KFRC) 9 May 202020 Q1 Earnings call transcript