Kforce Inc. (NASDAQ:KFRC) Q4 2018 Earnings Conference Call Transcript

Feb 06, 2019 • 08:30 am ET


Kforce Inc. (NASDAQ:KFRC) Q4 2018 Earnings Conference Call Transcript


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Good day, ladies and gentlemen, and welcome to the Q4 2018 Kforce Incorporated Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. (Operator Instructions) As a reminder, this conference call maybe recorded.

I would now like to introduce your host for today's conference, Mr. Michael Blackman, Chief Corporate Development Officer. Sir, you may begin.

Michael Blackman

Good morning. Before we get started, I would like to remind you that this call may contain certain statements that are forward-looking. These statements are based upon current assumptions and expectations and are subject to risks and uncertainties. Actual results may vary materially from the factors listed in Kforce's public filings and other reports and filings with the Securities and Exchange Commission. We cannot undertake any duty to update any forward-looking statements.

I would now like to turn the call over to David Dunkel, Chairman and Chief Executive Officer. Dave?

David Dunkel

Thank you, Michael. You can find additional information about this quarter's results in our earnings release and our SEC filings. In addition, we

have published our prepared remarks within the Investor Relations portion of our website. As I reflect on 2018, in particular, the strong results we delivered in the fourth quarter, I am immensely proud of what our team has accomplished. During the course of the year, we made significant progress in building our Tech Flex business. We have deepened client relationships, and, in many cases, we have become a trusted advisor in helping companies meet their ever-growing technology needs.

We have also continued to invest in tools that should further strengthen our capabilities and generate additional productivity from our associates. These investments included continued enhancements to our CRM and our Business Intelligence platform. A key technology initiative in 2019 will be the initial roll-out of our Talent Relationship Management system which we expect to go live late in the year. We have also continued to incorporate other technologies into our processes which could further enhance our capabilities. We expect the pace of change from a business model and technology standpoint to continue and we believe that we, like virtually every organization, need to maintain high levels of technology investment for the foreseeable future.

In addition, to accelerating revenue growth, we have also significantly improved profitability and generated significant cash for our shareholders. Total revenue of $1.42 billion in 2018 grew 4% year-over-year. We were also able to expand operating margins by 80-basis points and generate earnings per share of $2.30, which is a 46.5% improvement year-over-year. Our strong cash flows in the year and positive outlook allowed us to not only continue to return cash to our shareholders through stock repurchases, but to also increase our quarterly dividend midway through the year to $0.18 per share. All told, we returned $31 million to our shareholders through repurchases and dividends, while also reducing debt by $45 million.

Fourth quarter revenues of $358 million meaningfully exceeded our expectations