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Player Avatar NetscribeBusServ (< 20) Submitted: 2/26/2007 8:05:54 AM : Outperform Start Price: $12.78 KFRC Score: +30.63

Kforce Inc is one of the tenth largest professional staffing firms, with 80 offices in 45 markets in the U.S, providing flexible and permanent staffing solutions to its clients in three segments namely, Technology, Finance and Accounting, and Health and Life Sciences. The company’s staffing solutions includes flexible staffing services called Flex, which provides temporary staffing requirements, and search services called Search, providing permanent placement services. Flex and Search comprised 92% and 8% of revenues for nine months ending September 2006.

In the occupational category, as per Bureau of Labor Statistics of the U.S, employment services are expected to be the second fastest growing category with a 3.8 % growth rate annually till 2014, adding nearly 1.6 million jobs. Also more and more companies are seeking to hire workers on a temporary basis for their non-core projects. A tighter labor market and a shift in the employee preferences towards work should push more employers to seek help from temporary staffing experts.

Recently the company acquired Bradson Corporation, which is a provider of finance and accounting professional services to the federal government for the last two decades. This acquisition is strategic, considering Bradson’s topline growth, profitability and earnings visibility. Also it would extend Kforce reach to the attractive government services sector. Endorsing the same, Kforce is now in a better position to garner a healthy share of the $7 billion annual expenditure made by the Government on finance and accounting.

The shares of Kforce are expected to overperform the Standard and Poor’s index, given its focus on specialized end markets and by providing expertise in the areas of temporary skilled workforce in the highly fragmented and under penetrated market.

Member Avatar NetscribeBusServ (< 20) Submitted: 5/8/2007 8:31:52 AM
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Kforce has bolstered its presence in the Federal Government vertical. During October 2006, Kforce Inc completed the acquisition of Bradson Corporation based in Virginia for a sum of $73 million. Bradson has been a prime contractor for financial and accounting professional services to the Federal Government for over 20 years. Together Bradson’s unique characteristics, capabilities and assets would bring Kforce Inc’s prime and subcontract revenues to over 100 million annually. As compared to other sectors in staffing, profit margins in the Government practice tends to be higher.

The secular demand for highly skilled, tight supplied people mainly emerging federal business is favorable as in these occupations there exists scarcity of qualified talent as compared to broader staffing sector. Kforce’s professional staffing niche is particularly attractive as providers of higher skill staffing typically enjoy better earnings visibility and higher margins compared with their unskilled labor counterparts due to higher bill rates and longer contract terms associated with professional placements.

Kforce came up with strong results for the first quarter of fiscal 2007. Revenues increased by 13.5% on the back of 162% rise in revenues from Government Solutions segment. Also revenue per billing day improved from $3.5 million to $ 4 million for the same period. The company has set a target of achieving 10% operating margins. For the second quarter of current ficscal the company expects revenues in the range of $253-$260 million, with earning per share to be in the range of $0.23 to $ 0.25. The shares of Kforce offer potential for long-term investors.

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