Kforce, Inc. · NYSE:KFRC
Kforce — Sidoti & Company, LLC Virtual Investor Conference 2020
15 slides from Kforce's conference presentation, Sep 24, 2020
Slide 1: Kforce Inc.
KFORCE INC. Michael Blackman, Chief Corporate Development Officer Jeffrey Hackman, SVP, Finance & Accounting and Principal Accounting Officer September 24, 2020
Slide 2: Forward Looking Statements
Forward Looking Statements • All of the information presented that is not historical in nature should be considered to be forward- looking statements that are subject to certain risks, uncertainties or assumptions and may be affected by certain other factors, including but not limited to the specifi
Slide 3: Kforce Overview
Kforce Overview We Are… Our Footprint and Scale Lasting Personal Relationships Focus on Technology Offering • Our relationships and client portfolio is • Strategic decision to focus on our technology service a differentiator. Kforce serves offering coming out of the Great Recession. approximately 70
Slide 4: Focus on Core Offerings
Focus on Core Offerings $1,500 $1,360 $1,200 $1,110 Approximately $320m in revenues of non-strategic $301 Revenue (Millions) $92 businesses divested1 $900 $174 $220 $600 $1,059 $624 KCR Sale HIM Sale Global Sale KGS Sale $300 $106m $89m $11m $114m $- 2011 2012 2014 2017 2019 TTM June 2020 • Continue
Slide 5: Kforce COVID-19 Response & Updated Operating Trends
Kforce COVID-19 Response & Updated Operating Trends • Strategy to focus on technical and professional staffing and solutions markets. Tech Flex Our • Strong financial position w/ solid balance sheet, cash flows and ample liquidity. Preparation • Cloud-based and mobile IT investments positioned us we
Slide 6: Key Investment Highlights
Key Investment Highlights Large, attractive end market with positive secular trends • Tech staffing spend projected at $32 billion in 2021; roughly doubled over last 10 years • Strong demand being driven by companies’ investments in technology to improve customer-facing applications and gain operati
Slide 7: Our Technology Business
Our Technology Business Technology Technology Historical The IT temporary staffing market is poised for better relative performance due to solid and Projected Spending secular demand drivers: ($ in billions) 32.3 31.7 • The pandemic and resulting shutdowns have tested every company’s digital 27.5 28
Slide 8: Our FA Business
Our FA Business Key Commentary: Finance & Accounting Historical and Projected Spending • Currently focusing on repositioning the FA business into ($ in billions) more highly-skilled positions that are less susceptible to 8.4 7.6 7.8 8.2 7.8 technological disruption 7.2 7.0 • Our direction is to crea
Slide 9: Financial Overview
Financial Overview my 1 EORCE
Slide 10: Summary of Financial Results
Summary of Financial Results $ in millions Revenues1 $1,347 $1,360 Tech Flex Revenues $1,304 $1,254 $1,222 $1,221 $1,119 $1,021 $982 $914 $844 $726 $631 $489 2007 2020 Exp 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 TTM • CAGR of 8.5% in Tech Flex and 6.0% in FA Flex from 2009 - 2019
Slide 11: Summary of Financial Results
Summary of Financial Results 34.0% 5.7% 6.0% 5.6% 5.5% 32.0% 4.8% 30.8% 5.0% 30.0% 4.5% 30.0% 4.1% 29.6% 29.3% 4.0% 27.9% 28.0% 27.2% 27.1% 3.5% 26.7% 3.0% 26.0% 2.5% 2.0% 24.0% 1.5% 22.0% 1.0% 2016 2017 2018 2019 GP% Flex GP% Operating Margin • We have experienced compression in our GP due primaril
Slide 12: 2020 Financial Performance
2020 Financial Performance • 2019 revenues of $1.347 Billion, up 3.3% on a YoY billing day basis. Q2 ‘20 revenues of $343.0 million, up 1.2% on a YoY billing day basis. • Q2 ’20 Tech Flex down 3.0% on a YoY billing day basis • Despite near-term impacts from COVID-19, we believe we are on track towar
Slide 13: Q3 2020 Financial Estimates
Q3 2020 Financial Estimates Financial Estimates Ranges of Estimates Revenues (in millions) $352 - $362 Gross Margin 28.2% - 28.4% SG&A as a % of Revenue 21.3% - 21.5% Operating Income as a % of Revenue 6.3% - 6.7% EPS $0.72 - $0.80 Effective Tax Rate 26.8% Diluted WASO (in millions) 21.0 Billing Day
Slide 14: Positioned to Excel
Positioned to Excel SOLID DEMAND IN END MARKETS OUR STRONG PERFORMANCE • Given completion of divestitures, we now have a • Achieved CAGR in excess of 8% since 2009 in our high-quality, 100% domestic, professional and Technology business. technical revenue stream. • Expect the full year decline in ou
Slide 15: Summary
Summary ▪ Divestitures have resulted in 80% of our revenues being in Technology, which is experiencing solid secular demand as evidenced by the performance during this pandemic. ▪ 100% domestic revenue stream with market share of 3% in Tech and 4% in FA; creates singular focus on the U.S. markets. ▪
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