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Kforce Management Discusses Q2 2012 Results - Earnings Call Transcript

David L. Dunkel

Thank you, Michael. You can find additional information about Kforce in our 10-Q, 10-K and 8-K filings with the SEC. We provide substantial disclosure in our release, and our hope is that this will improve the dissemination of information about our performance and the quality of this call.

We are pleased with our Q2 results as Kforce reported revenue for the quarter of $274.1 million, a year-over-year increase of 10.5%. Earnings per share of $0.24 after adjusting for the noncash goodwill impairment charge came in a bit stronger than expected. The strong bottom line results were driven by improving bill/pay spreads across all of our staffing businesses, strong performance in search and continued SG&A discipline.

The environment for professional staffing and in particular, technology staffing, continues to be strong. Certain industry segments such as health care remain very strong, but these gains are being partially offset by declines in some of our financial services clients, which comprise about 16% of our business. The war for talent across our staffing businesses continues to be heated. The unemployment rate among college degree workers is currently 4.1%, roughly half that of the overall U.S. rate of unemployment and is substantially lower in several of the skill sets Kforce specializes in, particularly technology.

Bill rates continue to increase, and supply for candidates is still tight. We are aggressively managing our client portfolio to optimize both volume and rate, which was exhibited in the margin expansion we experienced in Q2. Our revenue footprint, which now is comprised of approximately 70% technology staffing, inclusive of those technology portions of our government and HIM businesses, remain in the areas of greatest demand in today's economy. We continue to benefit from our clients' desire for a flexible workforce during this uncertain economy, combined with significant uncertainty in regulatory tax and health care reform.

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