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Kforce's CEO Discusses Q1 2011 Results - Earnings Call Transcript

Stocks in this article: KFRC

We also benefit from the strength of our diversified revenue footprint, which is concentrated in some of the highest demand areas in today's knowledge-based economy. While the overall BLS unemployment numbers remains relatively high, college-educated unemployment was just 4.4% in March. Talent shortages are particularly severe in Tech, which is project driven by nature and constitutes over half our revenues.

The operating model we have built is working well and positions us to capture revenue and drive additional EBIT across all customer segments. Our customer mix is evenly distributed among large, medium and small customers. Each of which, we are able to service as a result of this flexible model. Our gross margin profile is already one of the most attractive in the industry, but the capability of the cost effectively meet customer needs for speed and quality, allows us to drive EBIT both through increased margins and through operating efficiencies and flexible compensation structures.

Our operational objectives for 2011 are to further penetrate and accelerate growth at existing Strategic Accounts, compete for additional customer share and selectively target new accounts where our service offerings and business model add value to our clients.

We also expect to continue to improve profitability through the leverage that exists on our highly advanced operating platform and by further revolving the NRC, which allows us to profitably serve certain clients and niches that would not be possible under a traditional staffing model.

As we consider our success in meeting our financial and operational objectives, I note that in the first quarter, the firm was able to grow total revenue year-over-year by 15.8% to $262.4 million and increased net income by 78.7% to $4.8 million.

These gains were driven primarily by the success in our core technology and financing accounting business, which collectively constitute 75% of total revenues and grew first quarter year-over-year 19.6% and 34.1% respectively. Both of these businesses benefit from the continuing maturation of our cost effective and highly flexible national recruiting center, coupled with our Strategic Accounts strategy, as well as our highly tenured workforce.

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