x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FLORIDA | 59-3264661 | |
(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
1001 EAST PALM AVENUE, TAMPA, FLORIDA | 33605 | |
(Address of principal executive offices) | (Zip Code) |
TITLE OF EACH CLASS | NAME OF EACH EXCHANGE ON WHICH REGISTERED | |
Common Stock, $0.01 par value | The NASDAQ Stock Market LLC (NASDAQ Global Select Market) |
Large accelerated filer | ¨ | Accelerated filer | x | |||
Non-accelerated filer | ¨ (Do not check if a smaller reporting company) | Smaller reporting company | ¨ |
Document | Parts Into Which Incorporated | |
Portions of Proxy Statement for the Annual Meeting of Shareholders scheduled to be held April 19, 2016 (“Proxy Statement”) | Part III |
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Item 7. | ||
Item 7A. | ||
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Item 9. | ||
Item 9A. | ||
Item 9B. | ||
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Item 13. | ||
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Item 15. | ||
Three Months Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
2015 | |||||||||||||||
High | $ | 24.99 | $ | 23.92 | $ | 29.33 | $ | 28.84 | |||||||
Low | $ | 21.34 | $ | 20.32 | $ | 21.83 | $ | 22.90 | |||||||
2014 | |||||||||||||||
High | $ | 22.59 | $ | 23.80 | $ | 22.76 | $ | 24.72 | |||||||
Low | $ | 17.30 | $ | 19.97 | $ | 17.20 | $ | 18.65 |
Three Months Ended | |||||||||||||||
March 31, | June 30, | September 30, | December 31, | ||||||||||||
2015 | $ | 0.11 | $ | 0.11 | $ | 0.11 | $ | 0.12 | |||||||
2014 | $ | 0.10 | $ | 0.10 | $ | 0.10 | $ | 0.11 |
Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) (1) | Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) (2) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (c) (Excluding Securities Reflected in Column (a)) (3) (4) | |||||||
Equity compensation plans approved by shareholders | ||||||||||
Kforce Inc. 2013 Stock Incentive Plan | — | — | 1,638,581 | |||||||
Kforce Inc. 2006 Stock Incentive Plan | 25,000 | $ | 11.58 | 34,425 | ||||||
Kforce Inc. 2009 Employee Stock Purchase Plan | N/A | N/A | 2,790,395 | |||||||
Kforce Inc. Incentive Stock Option Plan (5) | — | $ | — | — | ||||||
Total | 25,000 | $ | 11.58 | 4,463,401 |
(1) | In addition to the number of securities listed in this column, 1,179,094 shares and 114,223 shares of restricted stock granted under the 2013 Stock Incentive Plan and 2006 Stock Incentive Plan, respectively, have been issued and are unvested as of December 31, 2015. |
(2) | The weighted-average exercise price excludes unvested restricted stock because there is no exercise price associated with these equity awards. |
(3) | All of the shares of common stock that remain available for future issuance under the Kforce Inc. 2006 and 2013 Stock Incentive Plans may be issued in connection with options, warrants, rights and restricted stock awards. Each future grant of options or stock appreciation rights shall reduce the available shares under the Kforce Inc. 2006 and 2013 Stock Incentive Plans by an equal amount while each future grant of restricted stock shall reduce the available shares by 1.58 shares for each share awarded. In order to maximize our share reserves, the prevailing practice over the last few years has been for Kforce to issue full value awards as opposed to options and stock appreciation rights. |
(4) | As of December 31, 2015, there were options outstanding under the Kforce Inc. 2009 Employee Stock Purchase Plan (“2009 ESPP”) to purchase 7,997 shares of common stock at a discounted purchase price of $24.02. |
(5) | Issuances of options under the Incentive Stock Option Plan ceased in 2005. All of the outstanding options issued pursuant to this plan expired in March 2015. |
Period | Total Number of Shares Purchased (1) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
October 1, 2015 to October 31, 2015 | — | $ | — | — | $ | 66,199,289 | |||||||
November 1, 2015 to November 30, 2015 | 331,912 | $ | 26.99 | 319,200 | $ | 57,584,351 | |||||||
December 1, 2015 to December 31, 2015 | 184,204 | $ | 25.15 | 184,204 | $ | 52,951,890 | |||||||
Total | 516,116 | $ | 26.33 | 503,404 | $ | 52,951,890 |
(1) | Includes 12,712 shares of stock received upon vesting of restricted stock to satisfy statutory minimum tax withholding requirements for the period November 1, 2015 to November 30, 2015. |
Years Ended December 31, | |||||||||||||||||||
2015 | 2014 (1) | 2013 (2)(3) | 2012 (4)(5) | 2011 | |||||||||||||||
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | |||||||||||||||||||
Net service revenues | $ | 1,319,238 | $ | 1,217,331 | $ | 1,073,728 | $ | 1,005,487 | $ | 936,036 | |||||||||
Gross profit | 414,114 | 374,581 | 344,376 | 320,586 | 293,271 | ||||||||||||||
Selling, general and administrative expenses | 330,416 | 315,338 | 307,944 | 305,940 | 258,578 | ||||||||||||||
Goodwill impairment | — | — | 14,510 | 69,158 | — | ||||||||||||||
Depreciation and amortization | 9,831 | 9,894 | 9,846 | 10,789 | 12,505 | ||||||||||||||
Other expense, net | 2,195 | 1,392 | 1,147 | 1,057 | 1,220 | ||||||||||||||
Income (loss) from continuing operations, before income taxes | 71,672 | 47,957 | 10,929 | (66,358 | ) | 20,968 | |||||||||||||
Income tax expense (benefit) | 28,848 | 18,559 | 5,635 | (24,227 | ) | 7,339 | |||||||||||||
Income (loss) from continuing operations | 42,824 | 29,398 | 5,294 | (42,131 | ) | 13,629 | |||||||||||||
Income from discontinued operations, net of income taxes | — | 61,517 | 5,493 | 28,428 | 13,527 | ||||||||||||||
Net income (loss) | $ | 42,824 | $ | 90,915 | $ | 10,787 | $ | (13,703 | ) | $ | 27,156 | ||||||||
Earnings (loss) per share – basic, continuing operations | $ | 1.53 | $ | 0.94 | $ | 0.16 | $ | (1.18 | ) | $ | 0.36 | ||||||||
Earnings (loss) per share – diluted, continuing operations | $ | 1.52 | $ | 0.93 | $ | 0.16 | $ | (1.18 | ) | $ | 0.35 | ||||||||
Earnings (loss) per share – basic | $ | 1.53 | $ | 2.89 | $ | 0.32 | $ | (0.38 | ) | $ | 0.72 | ||||||||
Earnings (loss) per share – diluted | $ | 1.52 | $ | 2.87 | $ | 0.32 | $ | (0.38 | ) | $ | 0.70 | ||||||||
Weighted average shares outstanding – basic | 27,910 | 31,475 | 33,511 | 35,791 | 37,835 | ||||||||||||||
Weighted average shares outstanding – diluted | 28,190 | 31,691 | 33,643 | 35,791 | 38,831 | ||||||||||||||
Cash dividends declared per share | $ | 0.45 | $ | 0.41 | $ | 0.10 | $ | 1.00 | $ | — | |||||||||
As of December 31, | |||||||||||||||||||
2015 | 2014 | 2013 | 2012 | 2011 | |||||||||||||||
(IN THOUSANDS) | |||||||||||||||||||
Working capital | $ | 126,788 | $ | 130,226 | $ | 112,913 | $ | 72,685 | $ | 103,075 | |||||||||
Total assets | $ | 351,822 | $ | 363,922 | $ | 347,768 | $ | 325,149 | $ | 409,672 | |||||||||
Total outstanding borrowings on credit facility | $ | 80,472 | $ | 93,333 | $ | 62,642 | $ | 21,000 | $ | 49,526 | |||||||||
Total long-term liabilities | $ | 124,449 | $ | 130,351 | $ | 100,562 | $ | 56,429 | $ | 93,393 | |||||||||
Stockholders’ equity | $ | 139,627 | $ | 139,388 | $ | 157,233 | $ | 169,846 | $ | 233,115 |
(1) | During the year ended December 31, 2014, Kforce terminated the Company's Supplemental Executive Retirement Health Plan ("SERHP") and settled all future benefit obligations by making lump sum payments totaling approximately $3.9 million, which resulted in a net settlement loss of approximately $0.7 million. The termination effectively removed Kforce's related post-retirement benefit obligation. |
(2) | Kforce recognized a goodwill impairment charge of $14.5 million related to the GS reporting unit during 2013. The tax benefit associated with this impairment charge was $5.2 million, resulting in an after-tax impairment charge of $9.3 million. |
(3) | During the three months ended December 31, 2013, Kforce commenced a plan to streamline its leadership and support-related structure to better align a higher percentage of personnel in roles that are closest to the customer through an organizational realignment. As a result of the organizational realignment, Kforce incurred severance and termination-related expenses of $7.1 million during 2013 which were recorded within selling, general and administrative expense. Additionally, in connection with the realignment and succession planning, the Compensation Committee approved discretionary bonuses of $3.6 million paid to a broad group of senior management during the fourth quarter of 2013. |
(4) | Kforce recognized a goodwill impairment charge of $69.2 million related to the GS reporting unit during 2012. The tax benefit associated with this impairment charge was $24.7 million, resulting in an after-tax impairment charge of $44.5 million. |
(5) | In connection with the disposition of Kforce Clinical Research, Inc. (“KCR”), the Board exercised its discretion, as permitted within the Kforce Inc. 2006 Stock Incentive Plan, to accelerate the vesting, for tax planning purposes, of substantially all of the outstanding and unvested restricted stock and alternative long-term incentive (“ALTI”) awards on March 31, 2012, which resulted in the acceleration of $31.3 million of compensation expense and payroll taxes recorded during the three months ended March 31, 2012. |
• | Executive Summary – an executive summary of our results of operations for 2015. |
• | Critical Accounting Estimates – a discussion of the accounting estimates that are most critical to aid in fully understanding and evaluating our reported financial results and that require management’s most difficult, subjective or complex judgments. |
• | New Accounting Standards – a discussion of recently issued accounting standards and their potential impact on our consolidated financial statements. |
• | Results of Operations – an analysis of Kforce’s consolidated results of operations for the three years presented in its consolidated financial statements. In order to assist the reader in understanding our business as a whole, certain metrics are presented for each of our segments. |
• | Liquidity and Capital Resources – an analysis of cash flows, off-balance sheet arrangements, stock repurchases and contractual obligations and commitments and the impact of changes in interest rates on our business. |
• | Net service revenues increased 8.4% to $1.32 billion in 2015 from $1.22 billion in 2014. Net service revenues increased 6.3% for Tech and 17.7% for FA and decreased 0.7% for GS. |
• | Flex revenues increased 8.1% to $1.27 billion in 2015 from $1.17 billion in 2014. |
• | Direct Hire revenues increased 15.8% to $54.1 million in 2015 from $46.7 million in 2014. |
• | Flex gross profit margin increased 50 basis points to 28.5% in 2015 from 28.0% in 2014 principally as a result of an expansion in the spread between our bill rates and pay rates in the FA segment, improved profitability from our GS segment primarily as a result of growth in its product business which carries a higher margin profile, and a more favorable payroll tax environment. Flex gross profit margin increased 20 basis points for Tech, 20 basis points for FA and 330 basis points for GS year-over-year. |
• | Selling, general and administrative ("SG&A") expenses as a percentage of revenues for the year ended December 31, 2015 was 25.0% compared to 25.9% in 2014 reflecting the leverage provided by our revenue growth, lower relative compensation costs and, we believe, continued spending discipline. |
• | Income from continuing operations of $42.8 million in 2015 increased $13.4 million compared with income from continuing operations of $29.4 million in 2014. |
• | Net income of $42.8 million for the year ended December 31, 2015 decreased $48.1 million from net income of $90.9 million for the year ended December 31, 2014 due primarily to the gain on sale of HIM in 2014. |
• | Diluted earnings per share from continuing operations for the year ended December 31, 2015 increased to $1.52, or 63.4%, from $0.93 per share in 2014. |
• | During 2015, Kforce repurchased 1.5 million shares of common stock on the open market at a total cost of approximately $36.7 million. |
• | The Firm declared and paid dividends totaling $0.45 per share during the year ended December 31, 2015 resulting in an aggregated cash payout of $12.5 million. The dividend in the fourth quarter increased to $0.12 per share. |
• | The total amount outstanding under the credit facility decreased $12.8 million to $80.5 million as of December 31, 2015 as compared to $93.3 million as of December 31, 2014 resulting primarily from strong operating cash flows of $70.2 million. |
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||
Allowance for Doubtful Accounts, Fallouts and Other Accounts Receivable Reserves | ||||
See Note 1 – “Summary of Significant Accounting Policies” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report, for a complete discussion of our policies related to determining our allowance for doubtful accounts, fallouts and other accounts receivable reserves. | Kforce performs an ongoing analysis of factors including recent write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of accounts receivable among clients and higher-risk sectors, and the current state of the U.S. economy, in establishing its allowance for doubtful accounts. Kforce estimates its allowance for Direct Hire fallouts based on our historical experience with the actual occurrence of fallouts. Kforce estimates its reserve for future revenue adjustments (e.g. bill rate adjustments, time card adjustments, early pay discounts) based on our historical experience. | We have not made any material changes in the accounting methodology used to establish our allowance for doubtful accounts, fallouts and other accounts receivable reserves. As of December 31, 2015 and 2014, these allowances were 1.1% and 1.0% as a percentage of gross accounts receivable, respectively. We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to calculate our allowance for doubtful accounts, fallouts and other accounts receivable reserves. However, if our estimates regarding estimated accounts receivable losses are inaccurate, we may be exposed to losses or gains that could be material. A 10% difference in actual accounts receivable losses reserved at December 31, 2015, would have impacted our net income for 2015 by approximately $0.1 million. |
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||
Goodwill Impairment | ||||
We evaluate goodwill for impairment annually or more frequently whenever events or circumstances indicate that the fair value of a reporting unit is below its carrying value. We monitor the existence of potential impairment indicators throughout the year. See Note 6 – “Goodwill and Other Intangible Assets” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report for a complete discussion of the valuation methodologies employed. The carrying value of goodwill as of December 31, 2015 by reporting unit was approximately $17.0 million, $8.0 million and $20.9 million for our Tech, FA and GS reporting units, respectively. | We determine the fair value of our reporting units using widely accepted valuation techniques, including the discounted cash flow, guideline transaction method and guideline company method. These types of analyses contain uncertainties because they require management to make significant assumptions and judgments including: (1) an appropriate rate to discount the expected future cash flows; (2) the inherent risk in achieving forecasted operating results; (3) long-term growth rates; (4) expectations for future economic cycles; (5) market comparable companies and appropriate adjustments thereto; and (6) market multiples. It is our policy to conduct impairment testing based on our current business strategy in light of present industry and economic conditions, as well as future expectations. | For our Tech and FA reporting units, Kforce assessed the qualitative factors of each reporting unit to determine if it was more likely than not that the fair value of the reporting unit was less than its carrying amount. Based upon the qualitative assessments, it was determined that it was not more likely than not that the fair values of the reporting units were less than the carrying values. For our GS reporting unit, however, a quantitative step one impairment assessment was performed as of December 31, 2015. We compared the carrying value of the GS reporting unit to its estimated fair value noting that the fair value exceeded carrying value by 63%. As a result, no goodwill impairment charges were recognized during the year ended December 31, 2015. Although the valuation of the business supported its carrying value in 2015, a deterioration in any of the assumptions discussed in Note 6 – “Goodwill and Other Intangible Assets” in the Notes to Consolidated Financial Statements included in Item 8. Financial Statements and Supplementary Data of this report, could result in an additional impairment charge in the future. |
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||
Self-Insured Liabilities | ||||
We are self-insured for certain losses related to health insurance and workers’ compensation claims that are below insurable limits. However, we obtain third-party insurance coverage to limit our exposure to claims in excess of insurable limits. When estimating our self-insured liabilities, we consider a number of factors, including historical claims experience, plan structure, internal claims management activities, demographic factors and severity factors. Periodically, management reviews its assumptions to determine the adequacy of our self-insured liabilities. Our liabilities for health insurance and workers’ compensation claims as of December 31, 2015 were $3.0 million and $1.3 million, respectively. | Our self-insured liabilities contain uncertainties because management is required to make assumptions and to apply judgment to estimate the ultimate total cost to settle reported claims and claims incurred but not reported (“IBNR”) as of the balance sheet date. | We have not made any material changes in the accounting methodologies used to establish our self-insured liabilities during 2015 and 2014. We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate our self-insured liabilities. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material. A 10% change in our self-insured liabilities related to health insurance and workers’ compensation as of December 31, 2015 would have impacted our net income for 2015 by approximately $0.3 million. | ||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||
Stock-Based Compensation | ||||
We have stock-based compensation programs, which include options, stock appreciation rights (“SARs”) and restricted stock awards. See Note 1 – “Summary of Significant Accounting Policies” and Note 13 – “Stock Incentive Plans” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report for a complete discussion of our stock-based compensation programs. We have not granted any stock options or SARs over the last three years. We determine the fair market value of our restricted stock based on the closing stock price of Kforce’s common stock on the date of grant. | The stock compensation expense recorded is impacted by our estimated forfeiture rates, which are based on historical forfeitures. | We do not believe there is a reasonable likelihood that there will be a material change in the future estimates or assumptions we use to determine stock-based compensation expense. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to changes in stock-based compensation expense that could be material or the stock-based compensation expense reported in our financial statements may not be representative of the actual economic cost of the stock-based compensation. A 10% change in unrecognized stock-based compensation expense would have impacted our net income by $1.1 million for 2015. |
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||
Defined Benefit Pension Plan – U.S. | ||||
We have a defined benefit pension plan that benefits certain named executive officers, the Supplemental Executive Retirement Plan (“SERP”). See Note 11 – “Employee Benefit Plans” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report for a complete discussion of the terms of this plan. The SERP was not funded as of December 31, 2015 or 2014. | When estimating the obligation for our pension benefit plan, management is required to make certain assumptions and to apply judgment with respect to determining an appropriate discount rate, bonus percentage assumptions and expected effect of future compensation increases for the participants in the plan. | We do not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions we use to calculate our obligation. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses or gains that could be material. A 10% change in the discount rate used to measure the net periodic pension cost for the SERP during 2015 would have had an insignificant impact on our net income for 2015. | ||
Description | Judgments and Uncertainties | Effect if Actual Results Differ From Assumptions | ||
Accounting for Income Taxes | ||||
See Note 4 – “Income Taxes” in the Notes to Consolidated Financial Statements, included in Item 8. Financial Statements and Supplementary Data of this report for a complete discussion of the components of Kforce’s income tax expense, as well as the temporary differences that exist as of December 31, 2015. | Our consolidated effective income tax rate is influenced by tax planning opportunities available to us in the various jurisdictions in which we conduct business. Significant judgment is required in determining our effective tax rate and in evaluating our tax positions, including those that may be uncertain. Kforce is also required to exercise judgment with respect to the realization of our net deferred tax assets. Management evaluates all positive and negative evidence and exercises judgment regarding past and future events to determine if it is more likely than not that all or some portion of the deferred tax assets may not be realized. If appropriate, a valuation allowance is recorded against deferred tax assets to offset future tax benefits that may not be realized. | We do not believe that there is a reasonable likelihood that there will be a material change in our liability for uncertain income tax positions or our effective income tax rate. However, if actual results are not consistent with our estimates or assumptions, we may be exposed to losses that could be material. Kforce recorded a valuation allowance of approximately $0.1 million as of December 31, 2015 related primarily to state net operating losses. A 0.50% change in our effective income tax rate would have impacted our net income for 2015 by approximately $0.4 million. |
December 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Revenues by Segment: | ||||||||
Tech | 67.9 | % | 69.2 | % | 68.9 | % | ||
FA | 24.7 | 22.7 | 22.6 | |||||
GS | 7.4 | 8.1 | 8.5 | |||||
Net service revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||
Revenues by Type: | ||||||||
Flex | 95.9 | % | 96.2 | % | 95.5 | % | ||
Direct Hire | 4.1 | 3.8 | 4.5 | |||||
Net service revenues | 100.0 | % | 100.0 | % | 100.0 | % | ||
Gross profit | 31.4 | % | 30.8 | % | 32.1 | % | ||
Selling, general and administrative expenses | 25.0 | % | 25.9 | % | 28.7 | % | ||
Goodwill impairment | — | % | — | % | 1.4 | % | ||
Depreciation and amortization | 0.7 | % | 0.8 | % | 0.9 | % | ||
Income from continuing operations, before income taxes | 5.4 | % | 3.9 | % | 1.0 | % | ||
Income from continuing operations | 3.2 | % | 2.4 | % | 0.5 | % | ||
Net income | 3.2 | % | 7.5 | % | 1.0 | % |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | |||||||||||||
Tech | |||||||||||||||||
Flex | $ | 873,609 | 6.1 | % | $ | 823,311 | 14.3 | % | $ | 720,179 | |||||||
Direct Hire | 22,333 | 16.6 | % | 19,158 | (0.1 | )% | 19,183 | ||||||||||
Total Tech | $ | 895,942 | 6.3 | % | $ | 842,469 | 13.9 | % | $ | 739,362 | |||||||
FA | |||||||||||||||||
Flex | $ | 294,186 | 18.0 | % | $ | 249,274 | 16.9 | % | $ | 213,158 | |||||||
Direct Hire | 31,738 | 15.3 | % | 27,537 | (5.9 | )% | 29,259 | ||||||||||
Total FA | $ | 325,924 | 17.7 | % | $ | 276,811 | 14.2 | % | $ | 242,417 | |||||||
GS | |||||||||||||||||
Flex | $ | 97,372 | (0.7 | )% | $ | 98,051 | 6.6 | % | $ | 91,949 | |||||||
Total GS | $ | 97,372 | (0.7 | )% | $ | 98,051 | 6.6 | % | $ | 91,949 | |||||||
Total Flex | $ | 1,265,167 | 8.1 | % | $ | 1,170,636 | 14.2 | % | $ | 1,025,286 | |||||||
Total Direct Hire | 54,071 | 15.8 | % | 46,695 | (3.6 | )% | 48,442 | ||||||||||
Total Net Service Revenues | $ | 1,319,238 | 8.4 | % | $ | 1,217,331 | 13.4 | % | $ | 1,073,728 |
Three Months Ended | |||||||||||||||||||||||||||
December 31 | September 30 | June 30 | March 31 | ||||||||||||||||||||||||
Revenues | Year-Over-Year Growth Rates | Revenues | Year-Over-Year Growth Rates | Revenues | Year-Over-Year Growth Rates | Revenues | Year-Over-Year Growth Rates | ||||||||||||||||||||
Flex | |||||||||||||||||||||||||||
Tech | $ | 212,917 | 0.2 | % | $ | 226,381 | 6.6 | % | $ | 225,873 | 9.6 | % | $ | 208,438 | 8.3 | % | |||||||||||
FA | 78,512 | 15.7 | % | 76,707 | 19.4 | % | 72,773 | 21.2 | % | 66,194 | 15.9 | % | |||||||||||||||
GS | 22,857 | (13.9 | )% | 24,351 | (1.8 | )% | 24,264 | 1.3 | % | 25,900 | 13.7 | % | |||||||||||||||
Total Flex | $ | 314,286 | 2.4 | % | $ | 327,439 | 8.7 | % | $ | 322,910 | 11.3 | % | $ | 300,532 | 10.4 | % | |||||||||||
Direct Hire | |||||||||||||||||||||||||||
Tech | $ | 5,109 | 7.8 | % | $ | 5,732 | 6.7 | % | $ | 6,291 | 24.9 | % | $ | 5,201 | 29.8 | % | |||||||||||
FA | 8,304 | 15.7 | % | 8,404 | 17.9 | % | 8,152 | 7.9 | % | 6,878 | 21.0 | % | |||||||||||||||
Total Direct Hire | $ | 13,413 | 12.6 | % | $ | 14,136 | 13.1 | % | $ | 14,443 | 14.7 | % | $ | 12,079 | 24.7 | % | |||||||||||
Total | |||||||||||||||||||||||||||
Tech | $ | 218,026 | 0.4 | % | $ | 232,113 | 6.6 | % | $ | 232,164 | 9.9 | % | $ | 213,639 | 8.7 | % | |||||||||||
FA | 86,816 | 15.7 | % | 85,111 | 19.2 | % | 80,925 | 19.7 | % | 73,072 | 16.4 | % | |||||||||||||||
GS | 22,857 | (13.9 | )% | 24,351 | (1.8 | )% | 24,264 | 1.3 | % | 25,900 | 13.7 | % | |||||||||||||||
Total | $ | 327,699 | 2.8 | % | $ | 341,575 | 8.8 | % | $ | 337,353 | 11.4 | % | $ | 312,611 | 10.8 | % | |||||||||||
Billing Days | 62 | 64 | 64 | 63 |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | ||||||||||
Tech | 12,885 | 7.2 | % | 12,024 | 10.0 | % | 10,929 | |||||||
FA | 9,008 | 17.1 | % | 7,691 | 17.4 | % | 6,550 | |||||||
Total hours | 21,893 | 11.0 | % | 19,715 | 12.8 | % | 17,479 |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | |||||||||||||
Tech | $ | 5,584 | (8.4 | )% | $ | 6,093 | 8.2 | % | $ | 5,630 | |||||||
FA | 282 | (8.7 | )% | 309 | (27.0 | )% | 423 | ||||||||||
GS | 363 | (7.2 | )% | 391 | 12.4 | % | 348 | ||||||||||
Total billable expenses | $ | 6,229 | (8.3 | )% | $ | 6,793 | 6.1 | % | $ | 6,401 |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | ||||||||||
Tech | 1,395 | 16.9 | % | 1,193 | (2.4 | )% | 1,222 | |||||||
FA | 2,505 | 11.0 | % | 2,256 | (7.9 | )% | 2,449 | |||||||
Total placements | 3,900 | 13.1 | % | 3,449 | (6.0 | )% | 3,671 |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | |||||||||||||
Tech | $ | 16,014 | (0.3 | )% | $ | 16,062 | 2.3 | % | $ | 15,695 | |||||||
FA | 12,668 | 3.8 | % | 12,205 | 2.2 | % | 11,946 | ||||||||||
Total average placement fee | $ | 13,864 | 2.4 | % | $ | 13,539 | 2.6 | % | $ | 13,194 |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | ||||||||||
Tech | 29.2 | % | 1.0 | % | 28.9 | % | (2.7 | )% | 29.7 | % | ||||
FA | 36.5 | % | — | % | 36.5 | % | (5.4 | )% | 38.6 | % | ||||
GS | 34.3 | % | 10.6 | % | 31.0 | % | (9.1 | )% | 34.1 | % | ||||
Total gross profit percentage | 31.4 | % | 1.9 | % | 30.8 | % | (4.0 | )% | 32.1 | % |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | ||||||||||
Tech | 27.4 | % | 0.7 | % | 27.2 | % | (2.2 | )% | 27.8 | % | ||||
FA | 29.7 | % | 0.7 | % | 29.5 | % | (2.3 | )% | 30.2 | % | ||||
GS | 34.3 | % | 10.6 | % | 31.0 | % | (9.1 | )% | 34.1 | % | ||||
Total Flex gross profit percentage | 28.5 | % | 1.8 | % | 28.0 | % | (3.1 | )% | 28.9 | % |
2015 | % of Revenues | 2014 | % of Revenues | 2013 | % of Revenues | |||||||||||||||
Compensation, commissions, payroll taxes and benefits costs | $ | 278,207 | 21.1 | % | $ | 267,471 | 22.0 | % | $ | 264,636 | 24.7 | % | ||||||||
Other | 52,209 | 3.9 | % | 47,867 | 3.9 | % | 43,308 | 4.0 | % | |||||||||||
Total SG&A | $ | 330,416 | 25.0 | % | $ | 315,338 | 25.9 | % | $ | 307,944 | 28.7 | % |
2015 | Increase (Decrease) | 2014 | Increase (Decrease) | 2013 | |||||||||||||
Fixed asset depreciation | $ | 6,738 | 6.2 | % | $ | 6,345 | 8.2 | % | $ | 5,863 | |||||||
Capitalized software amortization | 2,318 | (20.2 | )% | 2,904 | (10.3 | )% | 3,236 | ||||||||||
Intangible asset amortization | 775 | 20.2 | % | 645 | (13.7 | )% | 747 | ||||||||||
Total depreciation and amortization | $ | 9,831 | (0.6 | )% | $ | 9,894 | 0.5 | % | $ | 9,846 |
Years Ended December 31, | |||||||||||||||||||||||
2015 | Per Share | 2014 | Per Share | 2013 | Per Share | ||||||||||||||||||
Net income | $ | 42,824 | $ | 1.52 | $ | 90,915 | $ | 2.87 | $ | 10,787 | $ | 0.32 | |||||||||||
Income from discontinued operations, net of income taxes | — | — | 61,517 | 1.94 | 5,493 | 0.16 | |||||||||||||||||
Income from continuing operations | $ | 42,824 | $ | 1.52 | $ | 29,398 | $ | 0.93 | $ | 5,294 | $ | 0.16 | |||||||||||
Goodwill impairment, pre-tax | — | — | — | — | 14,510 | 0.43 | |||||||||||||||||
Depreciation and amortization | 9,831 | 0.35 | 9,894 | 0.31 | 9,846 | 0.29 | |||||||||||||||||
Stock-based compensation expense | 5,819 | 0.21 | 2,969 | 0.09 | 2,555 | 0.07 | |||||||||||||||||
Interest expense and other | 1,960 | 0.07 | 1,396 | 0.04 | 1,212 | 0.04 | |||||||||||||||||
Income tax expense | 28,848 | 1.02 | 18,559 | 0.59 | 5,635 | 0.17 | |||||||||||||||||
Adjusted EBITDA | $ | 89,282 | $ | 3.17 | $ | 62,216 | $ | 1.96 | $ | 39,052 | $ | 1.16 | |||||||||||
Weighted average shares outstanding - basic | 27,910 | 31,475 | 33,511 | ||||||||||||||||||||
Weighted average shares outstanding - diluted | 28,190 | 31,691 | 33,643 |
Years Ended December 31, | ||||||||||||
2015 | 2014 | 2013 | ||||||||||
Net income | $ | 42,824 | $ | 90,915 | $ | 10,787 | ||||||
Gain on sale of discontinued operations | — | (64,600 | ) | — | ||||||||
Goodwill impairment | — | — | 14,510 | |||||||||
Non-cash provisions and other | 21,602 | 15,376 | 17,906 | |||||||||
Changes in operating assets/liabilities | 5,754 | (67,273 | ) | (42,738 | ) | |||||||
Capital expenditures | (8,328 | ) | (6,011 | ) | (8,145 | ) | ||||||
Free cash flow | 61,852 | (31,593 | ) | (7,680 | ) | |||||||
Proceeds from disposition of business | — | 117,887 | — | |||||||||
Change in debt | (12,861 | ) | 30,726 | 41,607 | ||||||||
Repurchases of common stock | (38,471 | ) | (101,771 | ) | (29,810 | ) | ||||||
Cash dividend | (12,545 | ) | (12,776 | ) | (3,297 | ) | ||||||
Other | 2,284 | (2,110 | ) | (1,326 | ) | |||||||
Change in cash | $ | 259 | $ | 363 | $ | (506 | ) |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cash provided by (used in): | |||||||||||
Operating activities | $ | 70,180 | $ | (25,582 | ) | $ | 465 | ||||
Investing activities | (8,364 | ) | 110,535 | (8,547 | ) | ||||||
Financing activities | (61,557 | ) | (84,590 | ) | 7,576 | ||||||
Net increase (decrease) in cash and cash equivalents | $ | 259 | $ | 363 | $ | (506 | ) |
Payments due by period | ||||||||||||||||||||
Total | Less than 1 year | 1-3 Years | 3-5 Years | More than 5 years | ||||||||||||||||
Operating lease obligations | $ | 20,212 | $ | 7,970 | $ | 9,722 | $ | 2,520 | $ | — | ||||||||||
Capital lease obligations | 2,023 | 943 | 1,006 | 74 | — | |||||||||||||||
Credit Facility (a) | 80,472 | — | — | 80,472 | — | |||||||||||||||
Interest payable – Credit Facility (b) | 7,845 | 1,569 | 3,138 | 3,138 | — | |||||||||||||||
Equipment notes (c) | 2,914 | 575 | 1,150 | 1,189 | — | |||||||||||||||
Interest payable - equipment notes (c) | 206 | 75 | 98 | 33 | — | |||||||||||||||
Purchase obligations | 15,307 | 9,627 | 5,562 | 118 | — | |||||||||||||||
Liability for unrecognized tax positions (d) | — | — | — | — | — | |||||||||||||||
Deferred compensation plan liability (e) | 26,526 | 2,288 | 2,895 | 1,326 | 20,017 | |||||||||||||||
Other (f) | — | — | — | — | — | |||||||||||||||
Supplemental executive retirement plan (g) | 14,284 | — | — | 10,297 | 3,987 | |||||||||||||||
Foreign defined benefit pension plan (h) | 7,504 | 376 | 4 | 82 | 7,042 | |||||||||||||||
Total | $ | 177,293 | $ | 23,423 | $ | 23,575 | $ | 99,249 | $ | 31,046 |
(a) | The Credit Facility expires December 23, 2019. |
(b) | Kforce’s weighted average interest rate as of December 31, 2015 was 1.95%, which was utilized to forecast the expected future interest rate payments. These payments are inherently uncertain due to interest rate and outstanding borrowings fluctuations that will occur over the remaining term of the Credit Facility. |
(c) | Kforce entered into separate notes with Wells Fargo and Bank of America N.A for the purchase of furniture, fixtures and equipment during 2015. The aggregate outstanding amounts under these notes as of December 31, 2015 are included in the accompanying Consolidated Balance Sheets and classified in Other current liabilities if payable within the next year or in Long-term debt - other if payable after the next year. The interest rate on the notes are 2.80% and 2.64%, respectively. The equipment notes expire in November 2020. |
(d) | Kforce’s liability for unrecognized tax positions as of December 31, 2015 was $0.8 million. This balance has been excluded from the table above due to the significant uncertainty with respect to the timing and amount of settlement, if any. |
(e) | Kforce has a non-qualified deferred compensation plan pursuant to which eligible highly-compensated key employees may elect to defer part of their compensation to later years. These amounts, which are included in the accompanying Consolidated Balance Sheets and classified as Accounts payable and other accrued liabilities and Other long-term liabilities, respectively, are payable based upon the elections of the plan participants (e.g. retirement, termination of employment, change-in-control). Amounts payable upon the retirement or termination of employment may become payable during the next five years if covered employees schedule a distribution, retire or terminate during that time. |
(f) | Kforce provides letters of credit to certain vendors in lieu of cash deposits. Kforce currently has letters of credit totaling $3.7 million outstanding as security for workers’ compensation and property insurance policies, as well as facility lease deposits. Kforce maintains a sub-limit for letters of credit of $15.0 million under its Credit Facility. |
(g) | There is no funding requirement associated with the SERP. Kforce does not currently anticipate funding the SERP during 2015. Kforce has included the total undiscounted projected benefit payments, as determined at December 31, 2015, in the table above. See Note 11 – “Employee Benefit Plans” in the Notes to Consolidated Financial Statements for more detail. |
(h) | There is no funding requirement associated with this plan. Kforce has included the total undiscounted projected benefit payments, as determined at December 31, 2015 in the table above. See Note 11 – “Employee Benefit Plans” in the Notes to Consolidated Financial Statements for more detail. |
/s/ Deloitte & Touche LLP |
Certified Public Accountants |
Tampa, Florida |
February 26, 2016 |
YEARS ENDED DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Net service revenues | $ | 1,319,238 | $ | 1,217,331 | $ | 1,073,728 | |||||
Direct costs of services | 905,124 | 842,750 | 729,352 | ||||||||
Gross profit | 414,114 | 374,581 | 344,376 | ||||||||
Selling, general and administrative expenses | 330,416 | 315,338 | 307,944 | ||||||||
Goodwill impairment | — | — | 14,510 | ||||||||
Depreciation and amortization | 9,831 | 9,894 | 9,846 | ||||||||
Income from operations | 73,867 | 49,349 | 12,076 | ||||||||
Other expense (income): | |||||||||||
Interest expense | 1,982 | 1,411 | 1,225 | ||||||||
Other expense (income) | 213 | (19 | ) | (78 | ) | ||||||
Income from continuing operations, before income taxes | 71,672 | 47,957 | 10,929 | ||||||||
Income tax expense | 28,848 | 18,559 | 5,635 | ||||||||
Income from continuing operations | 42,824 | 29,398 | 5,294 | ||||||||
Income from discontinued operations, net of income taxes | — | 61,517 | 5,493 | ||||||||
Net income | 42,824 | 90,915 | 10,787 | ||||||||
Other comprehensive income (loss): | |||||||||||
Defined benefit pension and post-retirement plans, net of tax | 689 | (688 | ) | 3,030 | |||||||
Comprehensive income | $ | 43,513 | $ | 90,227 | $ | 13,817 | |||||
Earnings per share – basic: | |||||||||||
From continuing operations | $ | 1.53 | $ | 0.94 | $ | 0.16 | |||||
From discontinued operations | $ | — | $ | 1.95 | $ | 0.16 | |||||
Earnings per share – basic | $ | 1.53 | $ | 2.89 | $ | 0.32 | |||||
Earnings per share – diluted | |||||||||||
From continuing operations | $ | 1.52 | $ | 0.93 | $ | 0.16 | |||||
From discontinued operations | $ | — | $ | 1.94 | $ | 0.16 | |||||
Earnings per share – diluted | $ | 1.52 | $ | 2.87 | $ | 0.32 | |||||
Weighted average shares outstanding – basic | 27,910 | 31,475 | 33,511 | ||||||||
Weighted average shares outstanding – diluted | 28,190 | 31,691 | 33,643 | ||||||||
Cash dividends declared per share | $ | 0.45 | $ | 0.41 | $ | 0.10 |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
ASSETS | |||||||
Current Assets: | |||||||
Cash and cash equivalents | $ | 1,497 | $ | 1,238 | |||
Trade receivables, net of allowances of $2,121 and $2,040, respectively | 198,933 | 204,710 | |||||
Income tax refund receivable | 526 | 3,311 | |||||
Deferred tax assets, net | 4,518 | 4,980 | |||||
Prepaid expenses and other current assets | 9,060 | 10,170 | |||||
Total current assets | 214,534 | 224,409 | |||||
Fixed assets, net | 37,476 | 35,330 | |||||
Other assets, net | 28,671 | 30,349 | |||||
Deferred tax assets, net | 20,938 | 22,855 | |||||
Intangible assets, net | 4,235 | 5,011 | |||||
Goodwill | 45,968 | 45,968 | |||||
Total assets | $ | 351,822 | $ | 363,922 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Current Liabilities: | |||||||
Accounts payable and other accrued liabilities | $ | 39,227 | $ | 38,104 | |||
Accrued payroll costs | 46,125 | 52,208 | |||||
Other current liabilities | 1,287 | 986 | |||||
Income taxes payable | 1,107 | 2,885 | |||||
Total current liabilities | 87,746 | 94,183 | |||||
Long-term debt – credit facility | 80,472 | 93,333 | |||||
Long-term debt – other | 3,351 | 562 | |||||
Other long-term liabilities | 40,626 | 36,456 | |||||
Total liabilities | 212,195 | 224,534 | |||||
Commitments and contingencies (see Note 15) | |||||||
Stockholders’ Equity: | |||||||
Preferred stock, $0.01 par; 15,000 shares authorized, none issued and outstanding | — | — | |||||
Common stock, $0.01 par; 250,000 shares authorized, 70,558 and 70,029 issued, respectively | 705 | 700 | |||||
Additional paid-in capital | 420,276 | 412,642 | |||||
Accumulated other comprehensive income (loss) | 318 | (371 | ) | ||||
Retained earnings | 155,096 | 125,378 | |||||
Treasury stock, at cost; 42,130 and 40,616 shares, respectively | (436,768 | ) | (398,961 | ) | |||
Total stockholders’ equity | 139,627 | 139,388 | |||||
Total liabilities and stockholders’ equity | $ | 351,822 | $ | 363,922 |
YEARS ENDED DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Common stock – shares: | |||||||||||
Shares at beginning of period | 70,029 | 69,480 | 68,531 | ||||||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures | 497 | 444 | 882 | ||||||||
Exercise of stock options | 32 | 105 | 67 | ||||||||
Shares at end of period | 70,558 | 70,029 | 69,480 | ||||||||
Common stock – par value: | |||||||||||
Balance at beginning of period | $ | 700 | $ | 695 | $ | 685 | |||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures | 5 | 4 | 9 | ||||||||
Exercise of stock options | 0 | 1 | 1 | ||||||||
Balance at end of period | $ | 705 | $ | 700 | $ | 695 | |||||
Additional paid-in capital: | |||||||||||
Balance at beginning of period | $ | 412,642 | $ | 404,600 | $ | 400,688 | |||||
Issuance for stock-based compensation and dividend equivalents, net of forfeitures | 556 | 369 | 72 | ||||||||
Exercise of stock options | 381 | 1,213 | 597 | ||||||||
Income tax benefit from stock-based compensation | 551 | 595 | 399 | ||||||||
Stock-based compensation expense | 5,819 | 5,475 | 2,570 | ||||||||
Employee stock purchase plan | 327 | 390 | 274 | ||||||||
Balance at end of period | $ | 420,276 | $ | 412,642 | $ | 404,600 | |||||
Accumulated other comprehensive income (loss): | |||||||||||
Balance at beginning of period | $ | (371 | ) | $ | 317 | $ | (2,713 | ) | |||
Pension and post-retirement plans, net of tax of $429, $394 and $1,919, respectively | 689 | (688 | ) | 3,030 | |||||||
Balance at end of period | $ | 318 | $ | (371 | ) | $ | 317 | ||||
Retained earnings: | |||||||||||
Balance at beginning of period | $ | 125,378 | $ | 47,612 | $ | 40,203 | |||||
Net income | 42,824 | 90,915 | 10,787 | ||||||||
Dividends and dividend equivalents, net of forfeitures ($0.45, $0.41 and $0.10 per share, respectively) | (13,106 | ) | (13,149 | ) | (3,378 | ) | |||||
Balance at end of period | $ | 155,096 | $ | 125,378 | $ | 47,612 | |||||
Treasury stock – shares: | |||||||||||
Shares at beginning of period | 40,616 | 35,751 | 33,980 | ||||||||
Repurchases of common stock | 1,540 | 4,896 | 1,812 | ||||||||
Shares tendered in payment of the exercise price of stock options | — | 4 | — | ||||||||
Employee stock purchase plan | (26 | ) | (35 | ) | (41 | ) | |||||
Shares at end of period | 42,130 | 40,616 | 35,751 | ||||||||
Treasury stock – cost: | |||||||||||
Balance at beginning of period | $ | (398,961 | ) | $ | (295,991 | ) | $ | (269,017 | ) | ||
Repurchases of common stock | (38,058 | ) | (103,195 | ) | (27,313 | ) | |||||
Shares tendered in payment of the exercise price of stock options | — | (84 | ) | — | |||||||
Employee stock purchase plan | 251 | 309 | 339 | ||||||||
Balance at end of period | $ | (436,768 | ) | $ | (398,961 | ) | $ | (295,991 | ) |
YEARS ENDED DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 42,824 | $ | 90,915 | $ | 10,787 | |||||
Adjustments to reconcile net income to cash provided by (used in) operating activities: | |||||||||||
Gain on sale of discontinued operations | — | (64,600 | ) | — | |||||||
Goodwill impairment | — | — | 14,510 | ||||||||
Deferred income tax provision, net | 2,380 | 491 | 1,166 | ||||||||
Provision for bad debts on accounts receivable | 1,553 | 825 | 546 | ||||||||
Depreciation and amortization | 9,849 | 10,058 | 9,846 | ||||||||
Stock-based compensation | 5,819 | 3,028 | 2,570 | ||||||||
Pension and post-retirement benefit plans expense | 1,846 | 1,424 | 3,237 | ||||||||
Amortization of deferred financing costs | 122 | 105 | 90 | ||||||||
Excess tax benefit attributable to stock-based compensation | (551 | ) | — | (110 | ) | ||||||
Loss on deferred compensation plan investments, net | 77 | 446 | 304 | ||||||||
Gain from Company-owned life insurance proceeds | — | (849 | ) | — | |||||||
Contingent consideration liability remeasurement | 321 | — | — | ||||||||
Other | 186 | (152 | ) | 257 | |||||||
Decrease (increase) in operating assets: | |||||||||||
Trade receivables, net | 4,223 | (40,339 | ) | (28,071 | ) | ||||||
Income tax refund receivable | 2,785 | 4,409 | (5,970 | ) | |||||||
Prepaid expenses and other current assets | 1,110 | 530 | (3,170 | ) | |||||||
Other assets, net | (298 | ) | (27 | ) | (57 | ) | |||||
Increase (decrease) in operating liabilities: | |||||||||||
Accounts payable and other current liabilities | 1,788 | 5,653 | (12,471 | ) | |||||||
Accrued payroll costs | (5,503 | ) | (248 | ) | 7,422 | ||||||
Income taxes payable | (1,657 | ) | (34,934 | ) | (504 | ) | |||||
Other long-term liabilities | 3,306 | (2,317 | ) | 83 | |||||||
Cash provided by (used in) operating activities | 70,180 | (25,582 | ) | 465 | |||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (8,328 | ) | (6,011 | ) | (8,145 | ) | |||||
Acquisition, net of cash received | — | (2,611 | ) | — | |||||||
Proceeds from disposition of business | — | 117,887 | — | ||||||||
Proceeds from the disposition of assets held within the Rabbi Trust | 445 | 2,668 | 3,278 | ||||||||
Purchase of assets held within the Rabbi Trust | (481 | ) | (2,436 | ) | (3,697 | ) | |||||
Proceeds from Company-owned life insurance | — | 1,037 | — | ||||||||
Other | — | 1 | 17 | ||||||||
Cash (used in) provided by investing activities | (8,364 | ) | 110,535 | (8,547 | ) | ||||||
Cash flows from financing activities: | |||||||||||
Proceeds from bank line of credit | 604,668 | 684,427 | 591,688 | ||||||||
Payments on bank line of credit | (617,529 | ) | (653,701 | ) | (550,081 | ) | |||||
Proceeds from financing agreement | 2,914 | — | — | ||||||||
Payments of capital expenditure financing | (1,274 | ) | (1,280 | ) | (1,452 | ) | |||||
Payments of loan financing costs | — | (460 | ) | — | |||||||
Short-term vendor financing | (252 | ) | (160 | ) | (180 | ) | |||||
Proceeds from exercise of stock options, net of shares tendered in payment of exercise | 381 | 1,131 | 598 | ||||||||
Excess tax benefit attributable to stock-based compensation | 551 | — | 110 | ||||||||
Repurchases of common stock | (38,471 | ) | (101,771 | ) | (29,810 | ) | |||||
Cash dividend | (12,545 | ) | (12,776 | ) | (3,297 | ) | |||||
Cash (used in) provided by financing activities | (61,557 | ) | (84,590 | ) | 7,576 | ||||||
Change in cash and cash equivalents | 259 | 363 | (506 | ) | |||||||
Cash and cash equivalents at beginning of year | 1,238 | 875 | 1,381 | ||||||||
Cash and cash equivalents at end of year | $ | 1,497 | $ | 1,238 | $ | 875 |
• | Revenues for time-and-materials contracts, which accounts for approximately 62% of this segment’s revenue, are recognized based on contractually established billing rates at the time services are provided. |
• | Revenues for fixed-price contracts are recognized on the basis of the estimated percentage-of-completion. Approximately 16% of this segment’s revenues are recognized under this method. Progress towards completion is typically measured based on costs incurred as a proportion of estimated total costs or other measures of progress when applicable. Profit in a given period is reported at the expected profit margin to be achieved on the overall contract. |
• | Revenues for cost-plus arrangements are recognized based on allowable costs incurred plus an estimate of the applicable fees earned. Approximately 6% of this segment’s revenues are recognized under these arrangements. |
• | Revenues for the product-based business, which accounts for approximately 16% of this segment's revenues, are recognized at the time of shipment. |
Years Ended December 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Numerator: | |||||||||||
Income from continuing operations | $ | 42,824 | $ | 29,398 | $ | 5,294 | |||||
Income from discontinued operations, net of tax | — | 61,517 | 5,493 | ||||||||
Net income | $ | 42,824 | $ | 90,915 | $ | 10,787 | |||||
Denominator: | |||||||||||
Weighted average shares outstanding – basic | 27,910 | 31,475 | 33,511 | ||||||||
Common stock equivalents | 280 | 216 | 132 | ||||||||
Weighted average shares outstanding – diluted | 28,190 | 31,691 | 33,643 | ||||||||
Earnings per share – basic: | |||||||||||
From continuing operations | $ | 1.53 | $ | 0.94 | $ | 0.16 | |||||
From discontinued operations | — | 1.95 | 0.16 | ||||||||
Earnings per share – basic | $ | 1.53 | $ | 2.89 | $ | 0.32 | |||||
Earnings per share – diluted: | |||||||||||
From continuing operations | $ | 1.52 | $ | 0.93 | $ | 0.16 | |||||
From discontinued operations | — | 1.94 | 0.16 | ||||||||
Earnings per share – diluted | $ | 1.52 | $ | 2.87 | $ | 0.32 |
YEARS ENDED DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Cash dividends declared per share | $ | 0.45 | $ | 0.41 | $ | 0.10 |
YEARS ENDED DECEMBER 31, | ||||||||
2014 | 2013 | |||||||
Net service revenues | $ | 56,670 | $ | 78,159 | ||||
Income from discontinued operations, before income taxes | $ | 103,512 | $ | 9,169 |
DECEMBER 31, | |||||||||
USEFUL LIFE | 2015 | 2014 | |||||||
Land | $ | 5,892 | $ | 5,892 | |||||
Building and improvements | 5-40 years | 25,516 | 25,304 | ||||||
Furniture and equipment | 5-10 years | 11,802 | 10,881 | ||||||
Computer equipment | 3-5 years | 11,393 | 10,380 | ||||||
Leasehold improvements | 3-5 years | 11,632 | 8,347 | ||||||
66,235 | 60,804 | ||||||||
Less accumulated depreciation and amortization | (28,759 | ) | (25,474 | ) | |||||
$ | 37,476 | $ | 35,330 |
YEARS ENDED DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Current: | |||||||||||
Federal | $ | 22,265 | $ | 15,782 | $ | 4,140 | |||||
State | 4,632 | 2,527 | 449 | ||||||||
Deferred | 1,951 | 250 | 1,046 | ||||||||
$ | 28,848 | $ | 18,559 | $ | 5,635 |
YEARS ENDED DECEMBER 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | ||
State income taxes, net of Federal tax effect | 6.1 | 3.2 | 4.1 | |||||
Non-deductible goodwill impairment | — | — | 4.3 | |||||
Non-deductible compensation | — | 1.1 | — | |||||
Non-deductible meals and entertainment | 0.7 | 1.1 | 5.2 | |||||
Other | (1.5 | ) | (1.7 | ) | 3.0 | |||
Effective tax rate | 40.3 | % | 38.7 | % | 51.6 | % |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
Deferred taxes, current: | |||||||
Assets: | |||||||
Accounts receivable reserves | $ | 982 | $ | 804 | |||
Accrued liabilities | 2,753 | 3,123 | |||||
Deferred compensation obligation | 895 | 1,426 | |||||
Other | 74 | 75 | |||||
Deferred tax assets, current | 4,704 | 5,428 | |||||
Liabilities: | |||||||
Prepaid expenses | (186 | ) | (448 | ) | |||
Deferred tax asset, net – current | 4,518 | 4,980 | |||||
Deferred taxes, non-current: | |||||||
Assets: | |||||||
Accrued liabilities | 613 | 649 | |||||
Deferred compensation obligation | 6,956 | 6,324 | |||||
Stock-based compensation | 1,817 | 1,185 | |||||
Pension and post-retirement benefit plans | 5,303 | 5,125 | |||||
Goodwill and intangible assets | 7,543 | 10,407 | |||||
Deferred revenue | 27 | 28 | |||||
Other | 293 | 995 | |||||
Deferred tax assets, non-current | 22,552 | 24,713 | |||||
Liabilities: | |||||||
Fixed assets | (1,198 | ) | (1,651 | ) | |||
Other | (331 | ) | (122 | ) | |||
Deferred tax liabilities, non-current | (1,529 | ) | (1,773 | ) | |||
Valuation allowance | (85 | ) | (85 | ) | |||
Deferred tax asset, net – non-current | 20,938 | 22,855 | |||||
Net deferred tax asset | $ | 25,456 | $ | 27,835 |
DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Beginning balance | $ | 278 | $ | 403 | $ | 133 | |||||
Additions for tax positions of prior years | 625 | 90 | 269 | ||||||||
Additions for tax positions of current year | — | — | 25 | ||||||||
Reductions for tax positions of prior years – lapse of applicable statutes | (33 | ) | (35 | ) | (24 | ) | |||||
Settlements | (82 | ) | (180 | ) | — | ||||||
Ending balance | $ | 788 | $ | 278 | $ | 403 |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
Assets held in Rabbi Trust | $ | 25,489 | $ | 25,715 | |||
Capitalized software, net of amortization | 2,049 | 3,678 | |||||
Deferred loan costs, net of amortization | 487 | 608 | |||||
Other non-current assets | 646 | 348 | |||||
$ | 28,671 | $ | 30,349 |
Technology | Finance and Accounting | Health Information Management | Government Solutions | Total | |||||||||||||||
Balance as of December 31, 2013 | $ | 17,034 | $ | 8,006 | $ | 4,887 | $ | 18,973 | $ | 48,900 | |||||||||
Additions (a) | — | — | — | 1,955 | 1,955 | ||||||||||||||
Disposition of HIM (b) | — | — | (4,887 | ) | — | (4,887 | ) | ||||||||||||
Balance as of December 31, 2014 | $ | 17,034 | $ | 8,006 | $ | — | $ | 20,928 | $ | 45,968 | |||||||||
Balance as of December 31, 2015 | $ | 17,034 | $ | 8,006 | $ | — | $ | 20,928 | $ | 45,968 |
(a) | The increase is due to a non-significant acquisition of a business within our GS reporting unit in the fourth quarter of 2014. |
(b) | The decrease is due to the disposition of our HIM reporting segment. See Note 2 – “Discontinued Operations” for additional discussion. |
Goodwill Carrying Value by Reporting Unit as of: | |||||||||||
December 31, 2015 | December 31, 2014 | December 31, 2013 | |||||||||
Technology | |||||||||||
Gross amount | $ | 156,391 | $ | 156,391 | $ | 156,391 | |||||
Accumulated impairment losses | (139,357 | ) | (139,357 | ) | (139,357 | ) | |||||
Carrying value | $ | 17,034 | $ | 17,034 | $ | 17,034 | |||||
Finance and Accounting | |||||||||||
Gross amount | $ | 19,766 | $ | 19,766 | $ | 19,766 | |||||
Accumulated impairment losses | (11,760 | ) | (11,760 | ) | (11,760 | ) | |||||
Carrying value | $ | 8,006 | $ | 8,006 | $ | 8,006 | |||||
Government Solutions | |||||||||||
Gross amount | $ | 104,596 | $ | 104,596 | $ | 102,641 | |||||
Accumulated impairment losses | (83,668 | ) | (83,668 | ) | (83,668 | ) | |||||
Carrying value | $ | 20,928 | $ | 20,928 | $ | 18,973 |
December 31, 2015 | December 31, 2014 | ||||||
Definite-lived intangible assets | |||||||
Customer relationships, customer contracts, technology and other | |||||||
Gross amount | $ | 28,603 | $ | 28,603 | |||
Accumulated amortization | (26,608 | ) | (25,832 | ) | |||
Carrying value | $ | 1,995 | $ | 2,771 | |||
Indefinite-lived intangible assets | |||||||
Trade name and trademark carrying value | $ | 2,240 | $ | 2,240 |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
Accounts payable | $ | 23,513 | $ | 21,863 | |||
Accrued liabilities | 15,714 | 16,241 | |||||
$ | 39,227 | $ | 38,104 |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
Payroll and benefits | $ | 39,043 | $ | 43,797 | |||
Payroll taxes | 2,832 | 3,062 | |||||
Health insurance liabilities | 2,968 | 3,417 | |||||
Workers’ compensation liabilities | 1,282 | 1,932 | |||||
$ | 46,125 | $ | 52,208 |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
Deferred compensation plan (Note 11) | $ | 24,238 | $ | 22,425 | |||
Supplemental executive retirement plan (Note 11) | 11,337 | 10,197 | |||||
Other | 5,051 | 3,834 | |||||
$ | 40,626 | $ | 36,456 |
DECEMBER 31, | |||||
2015 | 2014 | ||||
Discount rate | 4.00 | % | 3.75 | % | |
Rate of future compensation increase | 4.00 | % | 4.00 | % |
DECEMBER 31, | ||||||||
2015 | 2014 | 2013 | ||||||
Discount rate | 3.75 | % | 3.75 | % | 2.50 | % | ||
Rate of future compensation increase | 4.00 | % | 4.00 | % | 4.00 | % |
DECEMBER 31, | |||||||||||
2015 | 2014 | 2013 | |||||||||
Service cost | $ | 1,323 | $ | 1,164 | $ | 2,018 | |||||
Interest cost | 383 | 294 | 471 | ||||||||
Amortization of actuarial loss | — | — | 97 | ||||||||
Settlement loss | — | — | 24 | ||||||||
Net periodic benefit cost | $ | 1,706 | $ | 1,458 | $ | 2,610 |
DECEMBER 31, | |||||||
2015 | 2014 | ||||||
Projected benefit obligation, beginning | $ | 10,197 | $ | 7,852 | |||
Service cost | 1,323 | 1,164 | |||||
Interest cost | 383 | 294 | |||||
Actuarial experience and changes in actuarial assumptions | (566 | ) | 887 | ||||
Projected benefit obligation, ending | $ | 11,337 | $ | 10,197 |
PROJECTED ANNUAL BENEFIT PAYMENTS | |||
2016 | $ | — | |
2017 | — | ||
2018 | — | ||
2019 | 10,297 | ||
2020 | — | ||
2021-2025 | — | ||
Thereafter | 3,987 |
DECEMBER 31, | |||||||
2014 | 2013 | ||||||
Service cost | $ | 174 | $ | 649 | |||
Interest cost | 78 | 134 | |||||
Amortization of actuarial loss | — | 86 | |||||
Settlement/curtailment loss/(gain) | 725 | (359 | ) | ||||
Net periodic benefit cost | $ | 977 | $ | 510 |
DECEMBER 31, | |||
2014 | |||
Accumulated post-retirement benefit obligation, beginning | $ | 2,674 | |
Service cost | 174 | ||
Interest cost | 78 | ||
Actuarial experience and changes in actuarial assumptions | 234 | ||
Settlement/curtailment loss/(gain) | 725 | ||
Benefits Paid | (3,885 | ) | |
Accumulated post-retirement benefit obligation, ending | $ | — |
Assets/(Liabilities) Measured at Fair Value: | Asset/(Liability) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||
As of December 31, 2015 | |||||||||||||||
Money market funds | $ | 36 | $ | 36 | $ | — | $ | — | |||||||
Contingent consideration liability | $ | (798 | ) | $ | — | $ | — | $ | (798 | ) | |||||
As of December 31, 2014 | |||||||||||||||
Contingent consideration liability | $ | (477 | ) | $ | — | $ | — | $ | (477 | ) |
Incentive Stock Option Plan | 2006 Stock Incentive Plan | Total | Weighted Average Exercise Price Per Share | Total Intrinsic Value of Options Exercised | ||||||||||||
Exercisable as of December 31, 2012 | 154 | 93 | 247 | $ | 10.87 | |||||||||||
Exercised | (57 | ) | (10 | ) | (67 | ) | $ | 8.98 | $ | 573 | ||||||
Exercisable as of December 31, 2013 | 97 | 83 | 180 | $ | 11.57 | |||||||||||
Exercised | (57 | ) | (48 | ) | (105 | ) | $ | 11.61 | $ | 1,029 | ||||||
Forfeited/Cancelled | (18 | ) | — | (18 | ) | $ | 11.00 | |||||||||
Exercisable as of December 31, 2014 | 22 | 35 | 57 | $ | 11.69 | |||||||||||
Exercised | (22 | ) | (10 | ) | (32 | ) | $ | 11.78 | $ | 359 | ||||||
Exercisable as of December 31, 2015 | — | 25 | 25 | $ | 11.58 |
OUTSTANDING AND EXERCISABLE | ||||||||||||
Range of Exercise Prices | Number of Awards (#) | Weighted Average Remaining Contractual Term (Yrs) | Weighted Average Exercise Price ($) | Total Intrinsic Value | ||||||||
$9.13 - $14.45 | 25 | 1.57 | $ | 11.58 | $ | 342 |
Number of Restricted Stock | Weighted Average Grant Date Fair Value | Total Intrinsic Value of Restricted Stock Vested | ||||||||
Outstanding as of December 31, 2012 | 38 | $ | 12.11 | |||||||
Granted | 904 | $ | 16.72 | |||||||
Vested | (109 | ) | $ | 14.15 | $ | 2,092 | ||||
Forfeited | (22 | ) | $ | 15.43 | ||||||
Outstanding as of December 31, 2013 | 811 | $ | 16.89 | |||||||
Granted | 528 | $ | 20.18 | |||||||
Vested | (273 | ) | $ | 17.37 | $ | 5,624 | ||||
Forfeited | (84 | ) | $ | 18.38 | ||||||
Outstanding as of December 31, 2014 | 982 | $ | 18.55 | |||||||
Granted | 556 | $ | 24.01 | |||||||
Vested | (186 | ) | $ | 18.28 | $ | 4,580 | ||||
Forfeited | (59 | ) | $ | 19.37 | ||||||
Outstanding as of December 31, 2015 | 1,293 | $ | 20.89 |
2016 | 2017 | 2018 | 2019 | 2020 | Thereafter | Total | |||||||||||||||||||||
Capital leases | |||||||||||||||||||||||||||
Present value of payments | $ | 837 | $ | 594 | $ | 351 | $ | 67 | $ | — | $ | — | $ | 1,849 | |||||||||||||
Interest | 106 | 36 | 25 | 7 | — | — | 174 | ||||||||||||||||||||
Capital lease payments | $ | 943 | $ | 630 | $ | 376 | $ | 74 | $ | — | $ | — | $ | 2,023 | |||||||||||||
Operating leases | |||||||||||||||||||||||||||
Facilities | $ | 7,886 | $ | 6,031 | $ | 3,691 | $ | 1,914 | $ | 606 | $ | — | $ | 20,128 | |||||||||||||
Furniture and equipment | 84 | — | — | — | — | — | 84 | ||||||||||||||||||||
Total operating leases | $ | 7,970 | $ | 6,031 | $ | 3,691 | $ | 1,914 | $ | 606 | $ | — | $ | 20,212 | |||||||||||||
Total leases | $ | 8,913 | $ | 6,661 | $ | 4,067 | $ | 1,988 | $ | 606 | $ | — | $ | 22,235 |
Tech | FA | GS | Total | ||||||||||||
2015 | |||||||||||||||
Net service revenues | |||||||||||||||
Flexible billings | $ | 873,609 | $ | 294,186 | $ | 97,372 | $ | 1,265,167 | |||||||
Direct Hire fees | 22,333 | 31,738 | — | 54,071 | |||||||||||
Total revenue | $ | 895,942 | $ | 325,924 | $ | 97,372 | $ | 1,319,238 | |||||||
Gross profit | $ | 261,721 | $ | 119,036 | $ | 33,357 | $ | 414,114 | |||||||
Operating expenses | 342,442 | ||||||||||||||
Income from continuing operations, before income taxes | $ | 71,672 | |||||||||||||
2014 | |||||||||||||||
Net service revenues | |||||||||||||||
Flexible billings | $ | 823,311 | $ | 249,274 | $ | 98,051 | $ | 1,170,636 | |||||||
Direct Hire fees | 19,158 | 27,537 | — | 46,695 | |||||||||||
Total revenue | $ | 842,469 | $ | 276,811 | $ | 98,051 | $ | 1,217,331 | |||||||
Gross profit | $ | 243,085 | $ | 101,071 | $ | 30,425 | $ | 374,581 | |||||||
Operating expenses | 326,624 | ||||||||||||||
Income from continuing operations, before income taxes | $ | 47,957 | |||||||||||||
2013 | |||||||||||||||
Net service revenues | |||||||||||||||
Flexible billings | $ | 720,179 | $ | 213,158 | $ | 91,949 | $ | 1,025,286 | |||||||
Direct Hire fees | 19,183 | 29,259 | — | 48,442 | |||||||||||
Total revenue | $ | 739,362 | $ | 242,417 | $ | 91,949 | $ | 1,073,728 | |||||||
Gross profit | $ | 219,360 | $ | 93,663 | $ | 31,353 | $ | 344,376 | |||||||
Operating expenses | 333,447 | ||||||||||||||
Income from continuing operations, before income taxes | $ | 10,929 |
THREE MONTHS ENDED | |||||||||||||||
March 31 | June 30 | September 30 | December 31 | ||||||||||||
2015 | |||||||||||||||
Net service revenues | $ | 312,611 | $ | 337,353 | $ | 341,575 | $ | 327,699 | |||||||
Gross profit | 94,740 | 106,038 | 109,821 | 103,515 | |||||||||||
Income from continuing operations, net of income taxes | 5,785 | 11,593 | 13,545 | 11,901 | |||||||||||
Income from discontinued operations, net of income taxes | — | — | — | — | |||||||||||
Net income | 5,785 | 11,593 | 13,545 | 11,901 | |||||||||||
Earnings per share-basic | $ | 0.20 | $ | 0.41 | $ | 0.49 | $ | 0.43 | |||||||
Earnings per share-diluted | $ | 0.20 | $ | 0.41 | $ | 0.48 | $ | 0.43 | |||||||
2014 | |||||||||||||||
Net service revenues | $ | 282,024 | $ | 302,758 | $ | 313,810 | $ | 318,739 | |||||||
Gross profit | 83,526 | 94,386 | 98,291 | 98,378 | |||||||||||
Income from continuing operations, net of income taxes | 4,389 | 7,953 | 7,995 | 9,061 | |||||||||||
Income (loss) from discontinued operations, net of income taxes | 1,860 | 2,750 | 57,023 | (116 | ) | ||||||||||
Net income | 6,249 | 10,703 | 65,018 | 8,945 | |||||||||||
Earnings per share-basic | $ | 0.19 | $ | 0.33 | $ | 2.07 | $ | 0.30 | |||||||
Earnings per share-diluted | $ | 0.19 | $ | 0.33 | $ | 2.06 | $ | 0.30 |
2015 | 2014 | 2013 | |||||||||
Cash paid during the period for: | |||||||||||
Income taxes, net | $ | 25,395 | $ | 52,565 | $ | 14,789 | |||||
Interest, net | $ | 1,609 | $ | 1,048 | $ | 800 | |||||
Non-Cash Transaction Information: | |||||||||||
Shares tendered in payment of exercise price of stock options | $ | — | $ | 84 | $ | — | |||||
Employee stock purchase plan | $ | 578 | $ | 699 | $ | 613 | |||||
Equipment acquired under capital leases | $ | 1,470 | $ | 313 | $ | 1,929 | |||||
Unsettled repurchases of common stock | $ | 1,012 | $ | 1,425 | $ | — | |||||
Contingent consideration for acquisition | $ | — | $ | 477 | $ | — |
(a) | The following documents are filed as part of this Report: |
(b) | Exhibits. The exhibits listed on the Exhibit Index are incorporated by reference into this Item 15(b) and are a part of this report. |
Consolidated Financial Statements: | |
Consolidated Financial Statement Schedule: | |
COLUMN A | COLUMN B | COLUMN C | COLUMN D | COLUMN E | ||||||||||||||
DESCRIPTION | BALANCE AT BEGINNING OF PERIOD | CHARGED TO COSTS AND EXPENSES (RECOVERY) | CHARGED TO OTHER ACCOUNTS (a) | DEDUCTIONS (b) | BALANCE AT END OF PERIOD | |||||||||||||
Accounts receivable reserves | 2013 | $ | 2,153 | 382 | (54 | ) | (453 | ) | $ | 2,028 | ||||||||
2014 | $ | 2,028 | 530 | 31 | (549 | ) | $ | 2,040 | ||||||||||
2015 | $ | 2,040 | 1,653 | 1 | (1,573 | ) | $ | 2,121 |
(a) | Charged to other accounts includes the provision for fallouts of Direct Hire placements that has been deducted from net service revenues in the accompanying Consolidated Statements of Income and Comprehensive Income. |
(b) | Deductions include write-offs of uncollectible accounts receivable and fallouts of Direct Hire placements that have been charged against the allowance for doubtful accounts, fallouts and other accounts receivables reserves. |
KFORCE INC. | ||||||
Date: February 26, 2016 | By: | /s/ DAVID L. DUNKEL | ||||
David L. Dunkel | ||||||
Chairman of the Board, Chief Executive Officer and Director |
Date: February 26, 2016 | By: | /s/ DAVID L. DUNKEL | ||||
David L. Dunkel | ||||||
Chairman of the Board, Chief Executive Officer and Director | ||||||
(Principal Executive Officer) | ||||||
Date: February 26, 2016 | By: | /s/ DAVID M. KELLY | ||||
David M. Kelly | ||||||
Senior Vice President and Chief Financial Officer | ||||||
(Principal Financial Officer) | ||||||
Date: February 26, 2016 | By: | /s/ JEFFREY B. HACKMAN | ||||
Jeffrey B. Hackman | ||||||
Senior Vice President, Finance and Accounting | ||||||
(Principal Accounting Officer) | ||||||
Date: February 26, 2016 | By: | /s/ JOHN N. ALLRED | ||||
John N. Allred | ||||||
Director | ||||||
Date: February 26, 2016 | By: | /s/ RICHARD M. COCCHIARO | ||||
Richard M. Cocchiaro | ||||||
Director | ||||||
Date: February 26, 2016 | By: | /s/ MARK F. FURLONG | ||||
Mark F. Furlong | ||||||
Director |
Date: February 26, 2016 | By: | /s/ ELAINE D. ROSEN | ||||
Elaine D. Rosen | ||||||
Director | ||||||
Date: February 26, 2016 | By: | /s/ A. GORDON TUNSTALL | ||||
A. Gordon Tunstall | ||||||
Director | ||||||
Date: February 26, 2016 | By: | /s/ RALPH E. STRUZZIERO | ||||
Ralph E. Struzziero | ||||||
Director | ||||||
Date: February 26, 2016 | By: | /s/ HOWARD W. SUTTER | ||||
Howard W. Sutter | ||||||
Vice Chairman and Director | ||||||
Date: February 26, 2016 | By: | /s/ N. JOHN SIMMONS | ||||
N. John Simmons | ||||||
Director |
Exhibit Number | Description | |
3.1 | Amended and Restated Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-1 (File No. 33-91738) filed with the SEC on May 9, 1996. | |
3.1a | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | |
3.1b | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | |
3.1c | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Registration Statement on Form S-4/A (File No. 333-111566) filed with the SEC on February 9, 2004, as amended. | |
3.1d | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on May 17, 2000. | |
3.1e | Articles of Amendment to Articles of Incorporation, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 29, 2002. | |
3.2 | Amended & Restated Bylaws, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on April 29, 2013. | |
4.1 | Form of Stock Certificate, incorporated by reference to the Registrant’s Registration Statement on Form S-3 (File No. 333-158086) filed with the SEC on March 18, 2009. | |
4.2 | Form of Indenture, incorporated by reference to the Registrant’s Registration Statement on Form S-3 (File No. 333-181004) filed with the SEC on April 27, 2012. | |
10.1 | Third Amended and Restated Credit Agreement, dated September 20, 2011, between Kforce Inc. and its subsidiaries and Bank of America, N.A. and the other lenders thereto, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on September 23, 2011. | |
10.2 | Consent and First Amendment, dated March 30, 2012, to Third Amended and Restated Credit Agreement between Kforce Inc. and its subsidiaries and Bank of America, N.A. and other lenders thereto, incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-26058) filed with the SEC on May 7, 2012. | |
10.3 | Second Amendment and Joinder, dated December 27, 2013, to Third Amended and Restated Credit Agreement between Kforce Inc. and its subsidiaries and Bank of America, N.A. and other lenders thereto, incorporated by reference to the Registrant's Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on February 27, 2014. | |
10.4 | Third Amendment, dated December 23, 2014, to Third Amended and Restated Credit Agreement, Second Amendment to Second Amended and Restated Security Agreement and Joinder between Kforce Inc. and its subsidiaries and Bank of America, N.A. and other lenders thereto, incorporated by reference to the Registrant's Current Report on Form 8-K (File No. 000-26058) filed with the SEC on December 23, 2014. | |
Exhibit Number | Description | |
10.5* | Amended and Restated Employment Agreement, dated as of December 31, 2006, between the Registrant and David L. Dunkel, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on January 8, 2007. | |
10.6* | Amendment to Employment Agreement, dated as of December 24, 2008, between Kforce Inc. and David L. Dunkel, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on December 29, 2008. |
10.7* | Employment Agreement, dated as of December 31, 2006, between the Registrant and Joseph J. Liberatore, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on January 8, 2007. | |
10.8* | Amendment to Employment Agreement, dated as of December 24, 2008, between Kforce Inc. and Joseph J. Liberatore, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on December 29, 2008. | |
10.9* | Employment Agreement, dated as of July 1, 2003, between the Registrant and Howard Sutter, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 11, 2009. | |
10.10* | Amendment to Employment Agreement, dated as of December 30, 2008, between Kforce Inc. and Howard Sutter, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 11, 2009. | |
10.11 | Administrative Agreement, dated as of December 29, 2009, between and among Kforce Government Solutions, Inc., on behalf of itself, Kforce Global Solutions, Inc., and Bradson Corporation and the U.S. Department of the Interior, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on December 30, 2009. | |
10.12 | Amended Administrative Agreement, dated as of May 3, 2012, between and among Kforce Government Solutions, Inc. and the U.S. Department of the Interior, incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-26058) filed with the SEC on May 7, 2012. | |
10.13* | Kforce Inc. 2006 Stock Incentive Plan, incorporated by reference to the Registrant’s Registration Statement on Form S-8 (File No. 333-168529) filed with the SEC on August 4, 2010. | |
10.14* | Kforce Inc. 2013 Stock Incentive Plan, incorporated by reference to the Registrant’s Registration Statement on Form S-8 (File No. 333-188631) filed with the SEC on May 15, 2013. | |
10.15* | Employment Agreement, dated as of June 1, 2011, between the Registrant and Richard M. Cocchiaro, incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-26058) filed with the SEC on August 4, 2011. | |
10.16* | Form of Restricted Stock Award Agreement, incorporated by reference to the Registrant’s Annual Report on Form 10-K (File No. 000-26058) filed with the SEC on March 4, 2011. | |
10.17 | Stock Purchase Agreement, dated as of August 4, 2014, by and among Kforce Inc. and RCM Acquisition, Inc. incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on August 6, 2014. | |
10.18 | Amendment #1 to Stock Ownership Guidelines, dated September 28, 2012, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on October 4, 2012. | |
10.19* | Amended and Restated Employment Agreement, dated as of January 1, 2013, between Kforce Inc. and David M. Kelly, incorporated by reference to the Registrant’s Current Report on Form 8-K (File No. 000-26058) filed with the SEC on January 3, 2013. | |
10.20* | Form of Restricted Stock Award Agreement, incorporated by reference to the Registrant’s Quarterly Report on Form 10-Q (File No. 000-26058) filed with the SEC on October 30, 2013. | |
10.21* | Kforce Inc. Directors' Restricted Stock Unit Deferral Plan, filed electronically herewith. |
Exhibit Number | Description | |
21 | List of Subsidiaries. | |
23 | Consent of Deloitte & Touche LLP. | |
31.1 | Certification by the Chief Executive Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 | Certification by the Chief Financial Officer of Kforce Inc. pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 | Certification by the Chief Executive Officer of Kforce Inc. pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 | Certification by the Chief Financial Officer of Kforce Inc. pursuant to 18 U.S.C. Section 2350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101.1 | The Consolidated Financial Statements and Schedule listed in Part IV, Item 15 of this Form 10-K are formatted in XBRL. |
* | Management contract or compensatory plan or arrangement. |
Article I. | Establishment and Purpose. | 3 | |
Article II. | Definitions. | 3 | |
Article III. | Deferrals. | 5 | |
Article IV. | Benefits. | 6 | |
Article V. | Modifications to Payment Schedules. | 7 | |
Article VI. | Administration. | 7 | |
Article VII. | Amendment and Termination. | 8 | |
Article VIII. | Claims. | 8 | |
Article IX. | General Provisions. | 9 |
2.1 | Account. Account means a bookkeeping account maintained by the Company to record the Company’s obligation to a Participant under this Plan. The Company may maintain a Termination Account and up to five Specified Date Accounts as subaccounts to record amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Company, as the context requires. |
2.2 | Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the applicable Valuation Date. Accounts Balances on any Valuation Date shall equal the number and value of deferred RSUs (determined as of the closing of the markets) credited to an Account, plus any Dividend Equivalents credited to such Account since the last Valuation Date, less distributed RSUs and Dividend Equivalents and any expenses charged to such Account. |
2.3 | Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s estate, shall be the Beneficiary if: (i) the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant. |
2.4 | Change in Control. Change in Control means any of the following events: (i) a change in the ownership of the Company, (ii) a change in the effective control of the Company, or (iii) a change in the ownership of a substantial portion of the assets of the Company. |
2.5 | Code. Code means the Internal Revenue Code of 1986, as amended from time to time. |
2.6 | Code Section 409A. Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder. |
2.7 | Committee. Committee means the Compensation Committee of the Company’s Board of Directors. |
2.8 | Common Stock. Common Stock means the common stock, par value $0.01, of the Company. |
2.9 | Company. Company means Kforce Inc. |
2.10 | Deferral Agreement. Deferral Agreement means an agreement between a Participant and the Company that specifies: (i) the number of RSUs that the Participant has elected to defer in accordance with the provisions of Article III, and (ii) the Payment Schedule applicable to one or more Accounts to which such RSUs are allocated. Unless otherwise specified by the Committee, Participants may defer up to 100% of their RSUs. Any Deferral Agreement that would produce a fractional number of RSUs shall be rounded down to the next whole number of RSUs. |
2.11 | Deferral. Deferral means a credit to a Participant’s Account(s) that records the RSUs that the Participant has elected to defer in accordance with the provisions of Article III and any Dividend Equivalents credited with respect to such RSUs in accordance with Section 3.1(c). |
2.12 | Director. Director means a non-employee member of the Board of Directors of the Company. |
2.13 | Dividend Equivalent. Dividend Equivalent means the amount of cash dividends and value of other distributions declared and made with respect to the Common Stock that would have been payable to a Participant had he or she been the owner, on the record dates for the payment of such dividends and distributions, of the number of shares of Common Stock equal to the number of RSUs in his or her Account on such dates. |
2.14 | Effective Date. Effective Date means December 1, 2015. |
2.15 | Participant. Participant means any Director who has elected to defer RSUs in accordance with the provisions of Article III and any individual with an Account Balance greater than zero. |
2.16 | Plan. Generally, the term Plan means the “Kforce Inc. Directors' Restricted Stock Unit Deferral Plan” as documented herein and as may be amended from time to time hereafter. |
2.17 | Plan Year. Plan Year means January 1 through December 31. |
2.18 | Restricted Stock Unit or RSU. Restricted Stock Unit or RSU means a unit of measurement that is the economic equivalent of one share of Common Stock and that is granted by the Company to a Director in accordance with and subject to the terms and conditions of the Stock Incentive Plan and any applicable Award Agreement. |
2.19 | Separation from Service. Separation from Service means a termination of a Director’s Continuous Status as an Employee or Consultant that constitutes a "separation from service" within the meaning of Treasury Regulation § 1.409A-1(h). |
2.20 | Specified Date Account. Specified Date Account means an Account established by the Committee to record the amounts payable in a future year as specified in the Participant’s Deferral Agreement. Unless otherwise determined by the Committee, a Participant may maintain no more than five Specified Date Accounts. |
2.21 | Stock Incentive Plan. Stock Incentive Plan means the Kforce Inc. 2016 Stock Incentive Plan, and any other compensatory plan, agreement, or arrangement providing for the grant or issuance of Company Stock or Company Stock-based awards to Directors, in each case, as amended from time to time. |
2.22 | Termination Account. Termination Account means the Account established by the Committee to record the amounts payable to a Participant upon Separation from Service. Unless the Participant has established a Specified Date Account, all Deferrals and Company Contributions shall be allocated to the Termination Account on behalf of the Participant. |
2.23 | Valuation Date. Valuation Date means each day on which the New York Stock Exchange is open for business. |
3.1 | Deferral Elections, Generally. |
(a) | Each Director may become a Participant by electing to defer the settlement of all or a portion of an Award of RSUs. For the avoidance of doubt, an election to defer the settlement of an RSU shall be described in the Plan as a deferral of the RSU. A Participant may elect to defer RSUs by submitting a Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 3.2. A Deferral Agreement that is not timely filed with respect to a service period or an RSU shall be considered void and shall have no effect with respect to such service period or RSU. The Committee may modify any Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 3.2. The provisions of this Section 3.2 shall be construed in accordance with the requirements of Code Section 409A. |
(b) | The Participant shall specify on his or her Deferral Agreement the percentage or number of RSUs to be deferred and whether to allocate the deferred RSUs and any Dividend Equivalents credited with respect to such RSUs, in the manner specified in Section 3.1(c), to the Termination Account or to one or more Specified Date Accounts. An allocation of a deferred Award to a Specified Date Account is valid only if the payment date is later than the date the Award vests. If no Account designation is made in a Deferral Agreement, or if the Account designation made in a Deferral Agreement is impermissible, or the Account designation cannot be determined from the terms of a Deferral Agreement, the deferred portion of the Award that is the subject of the Deferral Agreement shall be allocated to the Termination Account. If more than one of the election timing rules described in Section 3.2 could apply to the deferral of an Award, a Deferral Agreement shall be considered filed under the rule resulting in the latest date on which the election becomes irrevocable. |
(c) | Each Dividend Equivalent shall be credited to the Participant's Account as of the record date of the cash dividend or other distribution declared and made with respect to the Common Stock that would have been payable to the Participant had he or she been the owner, on the record date for the payment of such dividend or distribution, of the number of shares of Common Stock equal to the number of RSUs in his or her Account on such date. The Dividend Equivalent shall be converted into RSUs based on the Fair Market Value (as defined in the Stock Incentive Plan) of the Common Stock on the record date of such dividend or distribution. Any conversion of Dividend Equivalents that would produce a fractional number of RSUs shall be rounded to the nearest whole number of RSUs. The crediting of Dividend Equivalents provided by this paragraph shall be in lieu of and shall supersede any conflicting provisions of any Award Agreement issued pursuant to the Stock Incentive Plan for any RSUs and Dividend Equivalents that a Participant has elected to defer under the Plan that provides for the accumulation and payment of Dividend Equivalents with respect to the RSUs granted under such Award Agreement. |
(a) | Prior Year Election. A Participant may defer an Award by filing a Deferral Agreement no later than December 31 of the year prior to the year in which such Award is granted in accordance with the Stock Incentive Plan. A Deferral Agreement described in this paragraph shall become irrevocable with respect to such Award as of January 1 of the year in which such Award is granted in accordance with the Stock Incentive Plan. |
(b) | First Year of Eligibility. A Director may file a Deferral Agreement within 30 days after being seated as a member of the Board of Directors. Such election shall become irrevocable on the 30th day. A Deferral Agreement filed under this paragraph (b) applies to Awards granted in accordance with the Stock Incentive Plan on and after the date the Deferral Agreement becomes irrevocable. No election may be made by a Director pursuant to this paragraph (b) if the Committee determines in its sole discretion that, prior to becoming a Director, such Director was eligible to participate in any other deferred compensation plan that must be aggregated with the Plan under Code Section 409A. |
(c) | Forfeitable Rights. A Participant may defer an Award on or before the 30th day following the date on which the Award is granted in accordance with the Stock Incentive Plan, provided that no Deferral Agreement made pursuant to this paragraph (c) shall be effective with respect to any RSUs that become vested prior to the date that is 12 months after the date of such Deferral Agreement, unless the vesting of such RSUs during such 12-month period may only occur in the event of the Participant's death or a Change in Control. |
3.3 | Vesting. Participant Deferrals shall be vested in accordance with the same vesting schedule and same vesting conditions applicable to the deferred Award under the terms of the Stock Incentive Plan and the applicable Award Agreement. The portion of a Participant’s Accounts that remains unvested upon his or her Separation from Service after the application of the terms of this Section 3.5 shall be forfeited. |
4.1 | Benefits, Generally. A Participant shall be entitled to the following benefits under the Plan: |
(a) | Separation from Service. Upon the Participant’s Separation from Service, he or she shall be entitled to payment of his entire vested Account Balance. Except as otherwise provided in Section 4.1(c) below, the Account is valued as of the first day of the month following the Participant’s Separation from Service and payable in a single lump sum as soon as administratively practicable following the Participant’s Separation from Service. At the time of payment, each vested RSU in the Participant's Account shall be converted into one share of Common Stock, and such share shall be distributed to the Participant. Each share of Common Stock issued pursuant to the Plan shall be made from the previously authorized and registered shares of Common Stock under the Stock Incentive Plan. |
(b) | Specified Date Accounts. A Specified Date Account is payable in a single lump sum on March 15 of the year designated by the Participant. At the time of payment, each vested RSU in the Participant's Specified Date Account shall be converted into one share of Common Stock, and such share shall be distributed to the Participant. Each share of Common Stock issued pursuant to the Plan shall be made from the previously authorized and registered shares of Common Stock under the Stock Incentive Plan. |
(c) | Delay for Specified Employees. Notwithstanding any provision of the Plan to the contrary, if at the time of the Participant's Separation from Service, the Participant is a "specified employee," as defined in Code Section 409A, as reasonably determined by the Company in accordance with Code Section 409A, and the delay of the commencement of any distributions that would otherwise be made under the Plan as a result of such Separation from Service is necessary in order to prevent any accelerated or additional tax under Code Section 409A, then payment of his or her Account shall be delayed until the first day of the seventh (7th) calendar month after the Participant's Separation from Service. |
(d) | Application of Payment Provisions. The payment provisions of the Plan shall be in lieu of and shall supersede the payment provisions of the Award Agreements issued pursuant to the Stock Incentive Plan for any RSUs and Dividend Equivalents that a Participant has elected to defer under the Plan. |
4.2 | Acceleration of or Delay in Payments. The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum. |
5.1 | Participant’s Right to Modify. A Participant may modify the payment year for an Account provided such modification complies with the requirements of this Article V. |
5.2 | Time of Election. The date on which a modification election is submitted in accordance with the procedures established by the Committee must be at least 12 months prior to the date on which payment is scheduled to commence prior to the modification. |
5.3 | Date of Payment under Modified Payment Schedule. The date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced prior to the modification. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A. |
5.4 | Effective Date. A modification election submitted in accordance with this Article V is irrevocable upon receipt by the Committee and becomes effective 12 months after such date. |
5.5 | Effect on Accounts. An election to modify the payment year of a Specified Date Account is limited to such Account, and shall not be construed to affect the payment year of any other Specified Date Account. The modification of the payment year upon Separation applies to the entire Plan Account. The Committee may restrict the ability to modify Accounts in its sole discretion, but no such restriction shall modify an election that has become effective under this Article IV. |
6.1 | Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article X. |
6.2 | Indemnification. The Company shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or her or it (including but not limited to reasonable attorneys’ fees) which arise as a result of his or her or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Company. Notwithstanding the foregoing, the Company shall not indemnify any person or organization if his or her or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Company consents in writing to such settlement or compromise. |
6.3 | Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company. |
6.4 | Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan. |
7.1 | Amendment. The Committee may at any time and from time to time amend the Plan. An amendment shall not reduce the vested Account Balances of any Participant or reduce any rights of a Participant under the Plan or other Plan features with respect to Deferrals made prior to the date of any such amendment or restatement without the consent of the Participant. |
7.2 | Termination. The Company’s Board of Directors may terminate the Plan at any time. Upon termination of the Plan, the distribution of Account Balances as of the date of termination shall be made in the manner and at the time prescribed in the Plan, except as otherwise permitted under Code Section 409A. |
8.1 | Stock Incentive Plan Controls. Except as otherwise provided in Section 4.1(d) of the Plan, the RSUs credited to a Participant's Account shall be subject to the provisions of the Stock Incentive Plan and any applicable Award Agreement, which provisions are incorporated herein by reference, including without limitation the provisions of the Stock Incentive Plan providing for the adjustment of Awards upon certain events. Section 8.2 and 8.3 of the Plan shall apply to any controversy or claim that cannot be resolved under the provisions of the Stock Incentive Plan. |
8.2 | Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing a claim (“Claimant”). Notice of a denial of benefits will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision. |
8.3 | Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures. Any such legal action must be commenced within one year of a final determination hereunder with respect to such claim. |
9.1 | Application of Code Section 409A. Although the Company makes no guarantee with respect to the tax treatment of Deferrals, payments and benefits under the Plan, the Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A, and shall be limited, construed, administered and interpreted in accordance with such intent. Accordingly, the Committee and the Company reserves the right to amend the provisions of the Plan at any time in order to avoid the imposition of additional tax, interest or penalties under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A. In no event shall the Company or any officer, employee, director, or agent of the Company be liable for any tax, interest or penalty that may be imposed on a Participant or his or her beneficiary. |
9.2 | Assignment. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)). |
9.3 | No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. The Company make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan. |
9.4 | Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control. |
9.5 | Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included. |
9.6 | Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored. |
9.7 | Facility of Payment to a Minor. If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its discretion, make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or committee or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, and the Plan from further liability on account thereof. |
9.8 | Governing Law. To the extent not preempted by ERISA, the laws of the State of Florida shall govern the construction and administration of the Plan. |
Name of Subsidiary | Jurisdiction of Incorporation or Formation | |
Kforce Airlines, Inc. | Florida | |
Kforce.com, Inc. | Florida | |
Romac International, Inc. | Florida | |
Kforce Flexible Solutions, LLC | Florida | |
Kforce Staffing Solutions of California, LLC | Florida | |
Kforce Global Solutions, Inc. | Pennsylvania | |
Kforce Government Solutions, Inc. | Pennsylvania | |
Kforce Government Holdings, Inc. | Florida | |
Kforce Services Corporation | Florida | |
Kforce Training Systems, Inc. | Florida | |
KGS Training Technologies, Inc. | Florida |
/s/ Deloitte & Touche LLP |
Tampa, Florida |
February 26, 2016 |
/s/ DAVID L. DUNKEL | |
David L. Dunkel, | |
Chief Executive Officer | |
(Principal Executive Officer) |
/s/ DAVID M. KELLY | |
David M. Kelly, | |
Senior Vice President, Chief Financial Officer | |
(Principal Financial Officer) |
/s/ DAVID L. DUNKEL | |
David L. Dunkel, | |
Chief Executive Officer | |
(Principal Executive Officer) |
/s/ DAVID M. KELLY | |
David M. Kelly, | |
Senior Vice President, Chief Financial Officer | |
(Principal Financial Officer) |
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Document and Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Feb. 23, 2016 |
Jun. 30, 2015 |
|
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2015 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | KFORCE INC | ||
Entity Central Index Key | 0000930420 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 28,356,369 | ||
Entity Public Float | $ 574,771,356 |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade receivables, allowances | $ 2,121 | $ 2,040 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 15,000,000 | 15,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares issued (in shares) | 70,558,000 | 70,029,000 |
Treasury stock, shares (in shares) | 42,130,000 | 40,616,000 |
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Dividends (in dollars per share) | $ 0.45 | $ 0.41 | $ 0.10 |
Accumulated Other Comprehensive Income (Loss) | |||
Pension and postretirement plans, net of tax | $ 429 | $ 394 | $ 1,919 |
Retained Earnings | |||
Dividends (in dollars per share) | $ 0.45 | $ 0.41 | $ 0.10 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Organization and Nature of Operations Kforce Inc. and its subsidiaries (collectively, “Kforce”) provide professional staffing services and solutions to customers in the following segments: Technology (“Tech”), Finance and Accounting (“FA”), and Government Solutions (“GS”). Kforce provides flexible staffing services and solutions on both a temporary and full-time basis. Kforce operates through its corporate headquarters in Tampa, Florida and 62 field offices located throughout the United States. Additionally, one of our subsidiaries, Kforce Global Solutions, Inc. (“Global”), provides information technology outsourcing services internationally through an office in Manila, Philippines. Our international operations comprised less than 2% of net service revenues for each of the three years ended December 31, 2015 and are included in our Tech segment. Kforce serves clients from the Fortune 1000, the Federal Government, state and local governments, local and regional companies and small to mid-sized companies. Basis of Presentation The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP") and the rules of the SEC. Certain prior year amounts have been reclassified in the Consolidated Statements of Cash Flows to conform to the current year presentation. Principles of Consolidation The consolidated financial statements include the accounts of Kforce Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “the Registrant,” “Kforce,” “the Company,” “we,” “the Firm,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context otherwise requires or indicates. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most important of these estimates and assumptions relate to the following: allowance for doubtful accounts, fallouts and other accounts receivable reserves; accounting for goodwill and identifiable intangible assets and any related impairment; self-insured liabilities for workers’ compensation and health insurance; stock-based compensation; obligations for pension plans and accounting for income taxes. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. Cash and Cash Equivalents Kforce classifies all highly liquid investments with an original initial maturity of three months or less as cash equivalents. Cash and cash equivalents consist of cash on hand with banks, either in commercial accounts, or overnight interest-bearing money market accounts and at times may exceed federally insured limits. Cash and cash equivalents are stated at cost, which approximates fair value due to the short duration of their maturities. Accounts Receivable Reserves Kforce establishes its reserves for expected credit losses, fallouts, early payment discounts and revenue adjustments based on past experience and estimates of potential future activity. Specific to our allowance for doubtful accounts, which comprises a majority of our accounts receivable reserves, Kforce performs an ongoing analysis of factors including recent write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of accounts receivable among clients and higher-risk sectors, and the current state of the U.S. economy. Trade receivables are written off by Kforce after all reasonable collection efforts have been exhausted. Accounts receivable reserves as a percentage of gross accounts receivable was 1.1% and 1.0% as of December 31, 2015 and December 31, 2014, respectively. Revenue Recognition Kforce considers amounts to be earned once evidence of an arrangement has been obtained, delivery has occurred, fees are fixed or determinable, and collectability is reasonably assured. We earn revenues from two primary sources: Flexible billings and Direct Hire fees. Flexible billings are recognized as the services are provided by Kforce’s Flexible Consultants. Net service revenues represent services rendered to customers less credits, discounts, rebates and revenue-related reserves. Revenues include reimbursements of travel and out-of-pocket expenses (“billable expenses”) with equivalent amounts of expense recorded in direct costs of services. Direct Hire fees are recognized by Kforce when employment candidates accept offers of permanent employment and are scheduled to commence employment within 30 days. Kforce records revenues net of an estimated reserve for “fallouts,” which is based on Kforce’s historical fallout experience. Fallouts occur when a candidate does not remain employed with the client through the contingency period, which is typically 90 days or less. Our GS segment generates its revenues under contracts that are, in general, greater in duration than our other segments and which can often span several years, inclusive of renewal periods. Our GS segment does not generate any Direct Hire fees. Our GS segment, which represents approximately 7% of total revenues, generates revenues under the following contract arrangements.
Direct Costs of Services Direct costs of services are composed of all related costs of employment for its Flexible Consultants, including payroll wages, payroll taxes, payroll-related insurance and certain fringe benefits, as well as subcontractor costs. Direct costs of services exclude depreciation and amortization expense, which is presented on a separate line in the accompanying Consolidated Statements of Operations and Comprehensive Income. Taxes Assessed by Governmental Agencies – Revenue Producing Transactions Kforce collects sales tax for various taxing authorities and it is our policy to record these amounts on a net basis; thus, sales tax amounts are not included in net service revenues. Income Taxes Kforce accounts for income taxes using the asset and liability approach to the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Unless it is more likely than not that a deferred tax asset can be utilized to offset future taxes, a valuation allowance is recorded against that asset. The excess tax benefits of deductions attributable to employees’ disqualifying dispositions of shares obtained from incentive stock options, exercises of non-qualified stock options, and vesting of restricted stock are reflected as increases in additional paid-in capital. Kforce evaluates tax positions that have been taken or are expected to be taken in its tax returns, and records a liability for uncertain tax positions. Kforce uses a two-step approach to recognize and measure uncertain tax positions. First, tax positions are recognized if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. Second, tax positions are measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement. Kforce recognizes interest and penalties related to unrecognized tax benefits in Income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. Fair Value Measurements Kforce uses fair value measurements in areas that include, but are not limited to: the impairment testing of goodwill and intangible and long-lived assets; stock-based compensation arrangements; valuing the investment in money market funds within Kforce’s deferred compensation plan; and a contingent consideration liability. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate fair value because of the short-term nature of these instruments. Using available market information and appropriate valuation methodologies, Kforce has determined the estimated fair value measurements; however, considerable judgment is required in interpreting data to develop the estimates of fair value. Fixed Assets Fixed assets are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the terms of the related leases, which generally range from three to five years. Upon sale or disposition of our fixed assets, the cost and accumulated depreciation are removed and any resulting gain or loss, net of proceeds, is reflected in the Consolidated Statements of Operations and Comprehensive Income. Goodwill and Other Intangible Assets Goodwill Kforce performs a goodwill impairment analysis, using the two-step analysis method, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable unless it is determined, based upon a review of the qualitative factors of a reporting unit, that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Under the two-step analysis method, the recoverability of goodwill is measured at the reporting unit level, which Kforce has determined to be consistent with its operating segments, by comparing the reporting unit’s carrying amount, including goodwill, to the fair market value of the reporting unit. Kforce determines the fair market value of its reporting units based on a weighting of the present value of projected future cash flows (the “income approach”) and the use of comparative market approaches under both the guideline company method and guideline transaction method (collectively, the “market approach”). Fair market value using the income approach is based on Kforce’s estimated future cash flows on a discounted basis. The market approach compares each of Kforce’s reporting units to other comparable companies based on valuation multiples derived from operational and transactional data to arrive at a fair value. Factors requiring significant judgment include, among others, the assumptions related to discount rates, forecasted operating results, long-term growth rates, the determination of comparable companies, and market multiples. Changes in economic or operating conditions or changes in Kforce’s business strategies that occur after the annual impairment analysis and which impact these assumptions may result in a future goodwill impairment charge, which could be material to Kforce’s consolidated financial statements. Other Intangible Assets Identifiable intangible assets arising from certain of Kforce’s acquisitions include non-compete and employment agreements, contractual relationships, customer contracts, technology, and a trade name and trademark. Our trade names and trademarks, and derivatives thereof, and GS’s “Data Confidence” trademark are important to our business. Our primary trade names and trademark are registered with the United States Patent and Trademark Office. For definite-lived intangible assets, Kforce has determined that the straight-line method is an appropriate methodology to allocate the cost over the period of expected benefit, which ranges from one to fifteen years. The impairment evaluation for indefinite-lived intangible assets, which for Kforce consists of a trademark and trade name, is conducted on an annual basis or more frequently if events or changes in circumstances indicate that an asset may be impaired. Impairment of Long-Lived Assets Kforce reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of the asset group to the future undiscounted net cash flows expected to be generated by those assets. If such assets are considered to be impaired, the impairment charge recognized is the amount by which the carrying amounts of the assets exceed the fair value of the assets, as determined based on the present value of projected future cash flows. Capitalized Software Kforce purchases, develops, and implements new computer software to enhance the performance of our technology infrastructure. Direct internal costs, such as payroll and payroll-related costs, and external costs incurred during the development stage are capitalized and classified as capitalized software. Kforce capitalized development-stage implementation costs of $0.3 million, $0.4 million and $1.0 million during the years ended December 31, 2015, 2014 and 2013, respectively. Capitalized software development costs are classified as Other assets, net in the accompanying Consolidated Balance Sheets and are being amortized over the estimated useful lives of the software, which range from one to five years, using the straight-line method. Commissions Our associates make placements and earn commissions as a percentage of revenues (for Direct Hire revenues) or gross profit (for Flex revenues) pursuant to a calendar-year-basis commission plan. The amount of commissions paid as a percentage of revenues or gross profit increases as volume increases. Kforce accrues commissions for revenues or gross profit at a percentage equal to the percent of total expected commissions payable to total revenues or gross profit for the year, as applicable. Stock-Based Compensation Kforce accounts for stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the requisite service period, net of estimated forfeitures. If the actual number of forfeitures differs from those estimated, additional adjustments to compensation expense may be required in future periods. Workers’ Compensation Kforce retains the economic burden for the first $250 thousand per occurrence in workers’ compensation claims except: (1) in states that require participation in state-operated insurance funds and (2) for its GS segment which is fully insured for workers’ compensation claims. Workers’ compensation includes ongoing health care and indemnity coverage for claims and may be paid over numerous years following the date of injury. Workers’ compensation expense includes insurance premiums paid, claims administration fees charged by Kforce’s workers’ compensation administrator, premiums paid to state-operated insurance funds and an estimate for Kforce’s liability for IBNR claims and for the ongoing development of existing claims. Kforce estimates its workers’ compensation liability based upon historical claims experience, actuarially determined loss development factors, and qualitative considerations such as claims management activities. Health Insurance Except for certain fully insured health insurance lines of coverage, Kforce retains the risk of loss for each health insurance plan participant up to $300 thousand in claims annually. Additionally, for all claim amounts exceeding $300 thousand, Kforce retains the risk of loss up to an aggregate annual loss of those claims of $450 thousand. For its partially self-insured lines of coverage, health insurance costs are accrued using estimates to approximate the liability for reported claims and IBNR claims, which are primarily based upon an evaluation of historical claims experience, actuarially-determined completion factors and a qualitative review of our health insurance exposure including the extent of outstanding claims and expected changes in health insurance costs. Accounting for Pension Benefits Kforce recognizes the underfunded status of its defined benefit pension plans as a liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which the changes occur through other comprehensive income (loss). Kforce also measures the funded status of the defined benefit pension plans as of the date of its fiscal year-end, with limited exceptions. Amortization of a net unrecognized gain or loss in accumulated other comprehensive income (loss) is included as a component of net periodic benefit cost if, as of the beginning of the year, that net gain or loss exceeds 10% of the projected benefit obligation. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active plan participants. Earnings per Share Basic earnings per share is computed as earnings divided by the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding excludes unvested shares of restricted stock. Diluted earnings per common share is computed by dividing the earnings attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period plus the dilutive effect of stock options and other potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. The following table sets forth the computation of basic and diluted earnings per share for the three years ended December 31 (in thousands, except per share amounts):
For the years ended December 31, 2015, 2014 and 2013, there were inconsequential common stock equivalents excluded from the weighted average diluted common shares based on the fact that their inclusion would have had an anti-dilutive effect on earnings per share. Treasury Stock Kforce’s Board of Directors (“Board”) may authorize share repurchases of Kforce’s common stock. Shares repurchased under Board authorizations are held in treasury for general corporate purposes, including issuances under the 2009 ESPP. Treasury shares are accounted for under the cost method and reported as a reduction of stockholders’ equity in the accompanying consolidated financial statements. Comprehensive Income (Loss) Accumulated other comprehensive income (loss) represents the net after-tax impact of unrecognized actuarial gains and losses related to the SERP which covers a limited number of executives and a defined benefit plan covering all eligible employees in our Philippine operations. Because each of these plans is unfunded as of December 31, 2015, the actuarial gains and losses arise as a result of the actuarial experience of the plans, as well as changes in actuarial assumptions in measuring the associated obligation as of year-end, or an interim date if any re-measurement is necessary. This information is provided in our Consolidated Statements of Operations and Comprehensive Income. Dividends Kforce’s Board may, at its discretion, declare and pay dividends on the outstanding shares of Kforce’s common stock out of retained earnings, subject to statutory requirements. Dividends for any outstanding and unvested restricted stock as of the record date are awarded in the form of additional shares of forfeitable restricted stock, at the same rate as the cash dividend on common stock and based on the closing stock price on the record date. Such additional shares have the same vesting terms and conditions as the outstanding and unvested restricted stock. The following summarizes the cash dividends declared for the three years ended December 31:
Kforce currently expects to continue to declare and pay quarterly dividends of a similar amount. However, the declaration, payment and amount of future dividends are discretionary and will be subject to determination by Kforce’s Board of Directors each quarter following its review of, among other things, the Firm’s financial performance and our legal ability to pay dividends. New Accounting Standards In February 2016, the FASB issued authoritative guidance regarding the accounting for leases. The guidance is to be applied for annual periods beginning after December 15, 2018 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively to all prior periods presented, including interim periods. Kforce elected not to adopt this standard early. Kforce is currently evaluating the potential impact on the consolidated financial statements. In November 2015, the FASB issued authoritative guidance requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is to be applied for annual periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. Kforce is still determining if it will early adopt this standard. Kforce anticipates a change to the presentation of the deferred tax liabilities and assets on the consolidated balance sheets upon adoption. In April 2015, the FASB issued authoritative guidance regarding a customer's accounting for fees paid in a cloud computing arrangement. This guidance is to be applied for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and early adoption is permitted. Kforce elected not to adopt this standard early. Kforce does not anticipate a material impact to the consolidated financial statements upon adoption. In April 2015, the FASB issued authoritative guidance requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, similar to debt discounts. The guidance is to be applied for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years, and early adoption is permitted. Kforce elected not to adopt this standard early. Kforce does not anticipate a material impact to the consolidated financial statements upon adoption. In May 2014, the FASB issued authoritative guidance regarding revenue from contracts with customers, which specifies that revenue should be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued authoritative guidance deferring the effective date of the new revenue standard by one year for all entities. The one year deferral results in the guidance being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and entities are not permitted to adopt the standard earlier than the original effective date. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We have not yet selected a transition method. We do not currently anticipate a material impact to the consolidated financial statements upon adoption; however, we do anticipate an increase in the level of disclosure around revenue. |
Discontinued Operations |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations | Discontinued Operations Effective August 3, 2014, Kforce sold to RCM Acquisition, Inc. (the “Purchaser”), under a Stock Purchase Agreement (the “SPA”) dated August 4, 2014, all of the issued and outstanding stock of KHI, a wholly-owned subsidiary of Kforce Inc. and operator of the former HIM reporting segment, for a total cash purchase price of $119.0 million plus a post-closing working capital adjustment of $96 thousand. In connection with the sale, Kforce entered into a Transition Services Agreement (the “TSA”) with the Purchaser to provide certain post-closing transitional services for a period not to exceed 12 months. Services provided by Kforce under the TSA ceased during the three months ended September 30, 2015. The fees for the services under the TSA were generally equivalent to Kforce's cost. In accordance with and defined within the SPA, Kforce was obligated to indemnify the Purchaser for certain losses, as defined, in excess of $1.19 million, although this deductible does not apply to certain specified losses. Kforce’s obligations under the indemnification provisions of the SPA, with the exception of certain items, ceased 12 months from the closing date and were limited to an aggregate of $8.925 million, although these time and monetary caps do not apply to certain specified losses. While it cannot be certain, Kforce believes any material exposure under the indemnification provisions is remote, particularly given that the 12 month time period for general indemnification claims has now passed and, as a result, Kforce has not recorded a liability as of December 31, 2015. The total financial results of HIM have been presented as discontinued operations in the accompanying Consolidated Statements of Operations and Comprehensive Income. The following summarizes the revenues and pretax profits of HIM for the two years ended December 31 (in thousands):
For the year ended December 31, 2014, the income from discontinued operations included a gain, net of transaction costs, on the sale of HIM of $94.3 million pretax, or $56.1 million after tax. The transaction costs primarily included legal fees, stock-based compensation related to the acceleration of restricted stock, commissions and transaction bonuses in the form of cash and common stock, which, in the aggregate, totaled $11.0 million. Stock-based compensation related to acceleration of restricted stock and transaction bonuses paid in stock in lieu of cash was $2.4 million. Kforce utilized the proceeds from the sale of HIM initially to pay down the outstanding borrowings under our Credit Facility and ultimately to repurchase shares of common stock. Income tax expense as a percentage of income from discontinued operations, before income taxes, for the year ended December 31, 2014 and 2013 was 40.6% and 40.1%, respectively. |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets | Fixed Assets Major classifications of fixed assets and related useful lives are summarized as follows (in thousands):
Computer equipment at December 31, 2015 includes equipment acquired under capital leases of $4.7 million and related accumulated depreciation of $2.9 million. Computer equipment at December 31, 2014 includes equipment acquired under capital leases of $3.8 million and related accumulated depreciation of $2.3 million. Depreciation and amortization expense, which includes amortization of capital leases, during the years ended December 31, 2015, 2014 and 2013 was $6.7 million, $6.3 million and $5.9 million, respectively. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision for income taxes from continuing operations consists of the following (in thousands):
The provision for income taxes from continuing operations shown above varied from the statutory federal income tax rate for those periods as follows:
The 2015 rate was unfavorably impacted by a change in the overall mix of income in the various state jurisdictions and the increase in particular uncertain tax positions. Deferred income tax assets and liabilities are composed of the following (in thousands):
At December 31, 2015, Kforce had approximately $4.7 million of state tax net operating losses (“NOLs”) which will be carried forward to be offset against future state taxable income. The state tax NOLs expire in varying amounts through 2033. In evaluating the realizability of Kforce’s deferred tax assets, management assesses whether it is more likely than not that some portion, or all, of the deferred tax assets, will be realized. Management considers, among other things, the ability to generate future taxable income (including reversals of deferred tax liabilities) during the periods in which the related temporary differences will become deductible. Kforce is periodically subject to IRS audits, as well as state and other local income tax audits for various tax years. During 2015, there were no ongoing IRS examinations. During 2014, the IRS finished an examination of Kforce’s U.S. income tax return for 2010 and 2011 with no material adjustments. Although Kforce has not experienced any material liabilities in the past due to income tax audits, Kforce can make no assurances concerning any future income tax audits. Uncertain Income Tax Positions An uncertain income tax position taken on the income tax return must be recognized in the consolidated financial statements at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013 is as follows (in thousands):
The entire amount of these unrecognized tax benefits as of December 31, 2015, if recognized, would not significantly impact the effective tax rate. Kforce does not expect any significant changes to its uncertain tax positions in the next 12 months. Kforce and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various states. Global files income tax returns in the Philippines. With a few exceptions, Kforce is no longer subject to federal, state, local, or non-U.S. income tax examinations by tax authorities for years before 2011. |
Other Assets |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets Other assets consisted of the following (in thousands):
As of December 31, 2015 and 2014, the assets held in Rabbi Trust were $25.5 million and $25.7 million, respectively, which was primarily related to the cash surrender value of life insurance policies. The cash surrender value of Company-owned life insurance policies relates to policies maintained by Kforce on certain participants in its deferred compensation plan, which could be used to fund the related obligations. Kforce capitalized software purchases, as well as direct costs associated with software developed for internal use of approximately $0.7 million and $1.2 million during the years ended December 31, 2015 and 2014, respectively. Accumulated amortization of capitalized software was $37.7 million and $37.6 million as of December 31, 2015 and 2014, respectively. Amortization expense of capitalized software during the years ended December 31, 2015, 2014 and 2013 was $2.3 million, $2.9 million and $3.2 million, respectively. |
Goodwill and Other Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets Goodwill The following table contains a disclosure of changes in the carrying amount of goodwill in total and for each reporting unit for the two years ended December 31, 2015 and 2014 (in thousands):
Throughout 2015, we considered the qualitative and quantitative factors associated with each of our reporting units and determined that there was no indication that the carrying values of any of our reporting units were likely impaired. Kforce performed its annual impairment assessment of the carrying value of goodwill as of December 31, 2015. For our Technology and Finance and Accounting reporting units, we assessed qualitative factors to determine whether the existence of events or circumstances indicated that it was more likely than not that the fair value of the reporting units was less than its carrying amount. We concluded that it was more likely than not that the fair value of these reporting units was more than their carrying amounts. For our GS reporting unit, we compared its carrying value to the estimated fair value based on a weighting of both the income approach and market approaches. Discounted cash flows, which serve as the primary basis for the income approach, were based on a discrete financial forecast which was developed by management for planning purposes and was consistent with those distributed within Kforce. Cash flows beyond the discrete forecast period of five years were estimated using a terminal value calculation, which incorporated historical and forecasted financial trends and also considered long-term earnings growth rates for publicly-traded peer companies, as well as the risk-free rate of return. The discrete financial forecast includes certain adjustments of costs that Kforce believes a market participant buyer, such as a large government contractor, would incur to operate the GS reporting unit. The market approaches consist of: (1) the guideline company method and (2) the guideline transaction method. The guideline company method applies pricing multiples derived from publicly-traded guideline companies that are comparable to the reporting unit to determine its value. The guideline transaction method applies pricing multiples derived from recently completed acquisitions that we believe are reasonably comparable to the reporting unit to determine fair value. Our assessment indicated that the fair value of the GS reporting unit exceeded its carrying value. Based on our impairment assessments results, no impairment charges were recognized for the Tech, FA and GS reporting units during the year ended December 31, 2015. For the impairment test performed as of December 31, 2014, Kforce performed a step 1 analysis for each reporting unit and compared the carrying value of Tech, FA and GS to the respective estimated fair values. Kforce concluded there were no indications of impairment for its reporting units during the December 31, 2014 annual impairment tests and as a result no impairment charges were recognized. For the impairment tests performed as of December 31, 2013, for our Tech and FA reporting units, we assessed qualitative factors to determine whether the existence of events or circumstances indicated that it was more likely than not that the fair value of the reporting units was less than its carrying amount. We concluded that it was more likely than not that the fair value of these reporting units was more than its carrying amount. During the fourth quarter of 2013, Kforce management made a strategic business decision with regard to the GS segment to focus its service offerings and efforts on prime integrated business solutions. Upon completion of the first step of the goodwill impairment analysis as of December 31, 2013 for our GS reporting unit, it was determined that there was an indication of impairment. Because indicators of impairment existed, we performed the second step of the goodwill impairment analysis. The goodwill impairment loss for the reporting unit was measured by the amount the carrying value of goodwill exceeded the implied fair value of the goodwill. Based on this assessment, we recorded an impairment charge of $14.5 million which is presented separately in the Consolidated Statements of Operations and Comprehensive Income. A tax benefit in the amount of $5.2 million was recorded related to the goodwill impairment charge. Total goodwill impairment for the years ending December 31, 2015, 2014 and 2013 was nil, nil and $14.5 million, respectively. The following table contains a disclosure of the gross amount and accumulated impairment losses of goodwill for Tech, FA and GS reporting units for the three years ended December 31, 2015 (in thousands):
Other Intangible Assets The gross and net carrying values of intangible assets as of December 31, 2015 and 2014, by major intangible asset class, are as follows (in thousands):
Amortization expense on intangible assets for each of the three years ended December 31, 2015, 2014, and 2013 was $0.8 million, $0.7 million and $0.7 million, respectively. Amortization expense for 2016, 2017, 2018, 2019, 2020 and thereafter is expected to be approximately $0.6 million, $0.3 million, $0.3 million, $0.3 million, $0.2 million and $0.2 million, respectively. There was no impairment expense related to indefinite-lived intangible assets during the years ended December 31, 2015, 2014 or 2013. |
Accounts Payable and Other Accrued Liabilities |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounts Payable and Other Accrued Liabilities | Accounts Payable and Other Accrued Liabilities Accounts payable and other accrued liabilities consisted of the following (in thousands):
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Accrued Payroll Costs |
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Accrued Payroll Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Payroll Costs | Accrued Payroll Costs Accrued payroll costs consisted of the following (in thousands):
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Credit Facility |
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Dec. 31, 2015 | |
Debt Disclosure [Abstract] | |
Credit Facility | Credit Facility On September 20, 2011, Kforce entered into a Third Amended and Restated Credit Agreement, with a syndicate led by Bank of America, N.A. This was amended on March 30, 2012 through the execution of a Consent and First Amendment, on December 27, 2013 through the execution of a Second Amendment and Joinder, and further amended on December 23, 2014 through the execution of a Third Amendment resulting in a maximum borrowing capacity of $170.0 million, as well as an accordion option of $50.0 million. The maximum borrowings available to Kforce under the Credit Facility are limited to: (a) a revolving Credit Facility of up to $170.0 million (the “Revolving Loan Amount”) and (b) a $15.0 million sub-limit included in the Credit Facility for letters of credit. Available borrowings under the Credit Facility are limited to 85% of the net amount of eligible accounts receivable, plus 85% of the net amount of eligible unbilled accounts receivable, plus 80% of the net amount of eligible employee placement accounts, minus certain minimum availability reserve; provided, that the Firm may, subject to certain conditions, elect to increase the available borrowing limitation based on a percentage of the appraised fair market value of the Firm's corporate headquarters property and/or an additional percentage of net eligible accounts receivable, net eligible unbilled accounts receivable and net eligible employee placement accounts. Borrowings under the Credit Facility are secured by substantially all of the assets of the Firm, excluding the real estate located at the Firm's corporate headquarters in Tampa, Florida, unless the eligible real estate conditions are met. Outstanding borrowings under the Revolving Loan Amount bear interest at a rate of: (a) LIBOR plus an applicable margin based on various factors; or (b) the higher of (1) the prime rate, (2) the federal funds rate plus 0.50% or (3) LIBOR plus 1.25%. Fluctuations in the ratio of unbilled to billed receivables could result in material changes to availability from time to time. Letters of credit issued under the Credit Facility require Kforce to pay a fronting fee equal to 0.125% of the amount of each letter of credit issued, plus a per annum fee equal to the applicable margin for LIBOR loans based on the total letters of credit outstanding. To the extent that Kforce has unused availability under the Credit Facility, an unused line fee is required to be paid on a monthly basis equal to: (a) if the average daily aggregate revolver outstanding are less than 35% of the amount of the commitments, 0.35% or (b) if the average daily aggregate revolver outstanding are greater than 35% of the amount of the commitments, 0.25% times the amount by which the maximum revolver amount exceeded the sum of the average daily aggregate revolver outstanding, during the immediately preceding month or shorter period if calculated for the first month hereafter or on the termination date. Under the Credit Facility, Kforce is subject to certain affirmative and negative covenants including, but not limited to, a fixed charge coverage ratio, which is only applicable in the event that the Firm’s availability under the Credit Facility falls below the greater of (i) 10% of the aggregate amount of the commitment of all of the lenders under the Credit Facility and (ii) $11 million. The numerator in the fixed charge coverage ratio is defined pursuant to the Credit Facility as earnings before interest expense, income taxes, depreciation and amortization, including the amortization of stock-based compensation expense, less cash paid for capital expenditures. The denominator is defined as Kforce’s fixed charges such as interest expense, principal payments paid or payable on outstanding debt other than borrowings under the Credit Facility, income taxes payable, and certain other payments. This financial covenant, if applicable, requires that the numerator be equal to or greater than the denominator. Also, our ability to make distributions or repurchase equity securities could be limited if the Firm's availability is less than the greater of (i) 12.5% of the aggregate amount of the commitment of all lenders under the Credit Facility or (ii) $20.6 million. Since Kforce had availability under the Credit Facility of $48.5 million as of December 31, 2015, the fixed charge coverage ratio covenant was not applicable nor was Kforce limited in making distributions or repurchases of its equity securities. Kforce believes that it will be able to maintain these minimum availability requirements; however, in the event that Kforce is unable to do so, Kforce could fail the fixed charge coverage ratio, which would constitute an event of default, or could be limited in our ability to make distributions or repurchase equity securities. Kforce believes the likelihood of default is remote. The Credit Facility expires December 23, 2019. As of December 31, 2015 and 2014, $80.5 million and $93.3 million was outstanding under the Credit Facility, respectively. As of February 23, 2016, $88.4 million was outstanding and $43.5 million was available under the Credit Facility. |
Other Long-Term Liabilities |
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Long-Term Liabilities | Other Long-Term Liabilities Other long-term liabilities consisted of the following (in thousands):
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Employee Benefit Plans |
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Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans 401(k) Savings Plans Kforce has a qualified defined contribution 401(k) Retirement Savings Plan (the “Kforce 401(k) Plan”) covering substantially all Kforce employees. Assets of the Kforce 401(k) Plan are held in trust for the sole benefit of employees and/or their beneficiaries. On October 2, 2006, Kforce created the Kforce Government Practice Plan, a qualified defined contribution 401(k) retirement savings plan (the “Government 401(k) Plan”), which covers all eligible employees of GS. Assets of the Government 401(k) Plan are held in trust for the sole benefit of employees and/or their beneficiaries. Employer matching contributions are discretionary and are funded annually as approved by the Board of Directors. Kforce accrued matching contributions of $1.4 million and $1.3 million for the above plans as of December 31, 2015 and 2014, respectively. The Kforce 401(k) Plan and Government 401(k) Plan held a combined 218 thousand and 229 thousand shares of Kforce’s common stock as of December 31, 2015 and 2014, respectively. Employee Stock Purchase Plan Kforce’s employee stock purchase plan allows all eligible employees to purchase Kforce’s common stock at a 5% discount from its market price at the end of a rolling three-month offering period. Kforce issued 26 thousand, 35 thousand and 41 thousand shares of common stock at an average purchase price of $22.61, $19.76 and $14.88 per share during the years ended December 31, 2015, 2014 and 2013, respectively. All shares purchased under the employee stock purchase plan were settled using Kforce’s treasury stock. Deferred Compensation Plan Kforce has a Non-Qualified Deferred Compensation Plan (the “Kforce NQDC Plan”) and a Kforce Non-Qualified Deferred Compensation Government Practice Plan (the “Government NQDC Plan”), pursuant to which eligible management and highly compensated key employees, as defined by IRS regulations, may elect to defer all or part of their compensation to later years. These amounts are classified in accounts payable and other accrued liabilities if payable within the next year or as other long-term liabilities if payable after the next year, upon retirement or termination of employment. At December 31, 2015 and 2014, amounts included in accounts payable and other accrued liabilities related to the deferred compensation plan totaled $2.3 million and $3.7 million, respectively. Amounts included in other long-term liabilities related to the deferred compensation plan totaled $24.2 million and $22.4 million as of December 31, 2015 and 2014, respectively. Kforce has insured the lives of certain participants in the deferred compensation plan to assist in the funding of the deferred compensation liability. Compensation expense of $401 thousand was recognized for the plans for the year ended December 31, 2015. Compensation income from continuing operations of $187 thousand was recognized for the plans for the year ended December 31, 2014 and compensation expense from continuing operations of $566 thousand was recognized for the plans for the year ended December 31, 2013. Employee distributions are being funded through proceeds from the sale of assets held within our Rabbi Trust. The fair value of the assets within the Rabbi Trust, including the cash surrender value of the Company-owned life insurance policies and money market funds, was $25.5 million and $25.7 million as of December 31, 2015 and 2014, respectively, and is recorded in Other assets, net in the accompanying Consolidated Balance Sheets. For the years ended December 31, 2015, 2014 and 2013, there was nil, nil and $15 thousand in losses, respectively, attributable to the investments in trading securities, including money market funds, which is included in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income. Foreign Pension Plan Kforce maintains a foreign defined benefit pension plan (the “Foreign Pension Plan”) for eligible employees of the Philippine branch of Global that is required by Philippine labor laws. The Foreign Pension Plan defines retirement as those employees who have attained the age of 60 and have completed at least five years of credited service. Benefits payable under the Foreign Pension Plan equate to one-half month’s salary for each year of credited service. Benefits under the Foreign Pension Plan are paid out as a lump sum to eligible employees at retirement. The significant assumptions used by Kforce in the actuarial valuation include the discount rate, the estimated rate of future annual compensation increases and the estimated turnover rate. As of December 31, 2015, 2014 and 2013, the discount rate used to determine the actuarial present value of the projected benefit obligation and pension expense was 5.2%, 4.7% and 5.0%, respectively. The discount rate was determined based on long-term Philippine government securities yields commensurate with the expected payout of the benefit obligation. The estimated rate of future annual compensation increases as of December 31, 2015, 2014 and 2013 was 3.0%, and was based on historical compensation increases, as well as future expectations. The Company applies a turnover rate to the specific age of each group of employees, which ranges from 20 to 64 years of age. For the years ended December 31, 2015, 2014 and 2013, net periodic benefit cost was $280 thousand, $124 thousand and $92 thousand, respectively. As of December 31, 2015 and 2014, the projected benefit obligation associated with our foreign defined benefit pension plan was $1.2 million and $1.6 million, respectively, which is classified in Other long-term liabilities in the accompanying Consolidated Balance Sheets. The decrease in the projected benefit obligation is the result of changes in the actuarial assumptions and a reduction in the number of plan participants. There is no requirement for Kforce to fund the Foreign Pension Plan and, as a result, no contributions were made to the Foreign Pension Plan during the year ended December 31, 2015. Kforce does not currently anticipate funding the Foreign Pension Plan during the year ending December 31, 2016. Supplemental Executive Retirement Plan Kforce maintains a SERP for the benefit of certain executive officers. The primary goals of the SERP are to create an additional wealth accumulation opportunity, restore lost qualified pension benefits due to government limitations and retain our covered executive officers. The SERP is a non-qualified benefit plan and does not include elective deferrals of covered executive officers’ compensation. Normal retirement age under the SERP is defined as age 65; however, certain conditions allow for early retirement as early as age 55 or upon a change in control. Vesting under the plan is defined as 100% upon a participant’s attainment of age 55 and 10 years of service and 0% prior to a participant’s attainment of age 55 and 10 years of service. Full vesting also occurs if a participant with five years or more of service is involuntarily terminated by Kforce without cause or upon death, disability or a change in control. The SERP will be funded entirely by Kforce, and benefits are taxable to the covered executive officer upon receipt and deductible by Kforce when paid. Benefits payable under the SERP upon the occurrence of a qualifying distribution event, as defined, are targeted at 45% of the covered executive officers’ average salary and bonus, as defined, from the three years in which the covered executive officer earned the highest salary and bonus during the last 10 years of employment, which is subject to adjustment for retirement prior to the normal retirement age and the participant’s vesting percentage. The benefits under the SERP are reduced for a participant that has not reached age 62 with 10 years of service or age 55 with 25 years of service with a percentage reduction up to the normal retirement age. Benefits under the SERP are normally paid based on the lump sum present value but may be paid over the life of the covered executive officer or 10-year annuity, as elected by the covered executive officer upon commencement of participation in the SERP. None of the benefits earned pursuant to the SERP are attributable to services provided prior to the effective date of the plan. For purposes of the measurement of the benefit obligation as of December 31, 2015, Kforce has assumed that all participants will elect to take the lump sum present value option based on historical trends. Actuarial Assumptions Due to the SERP being unfunded as of December 31, 2015 and 2014, it is not necessary for Kforce to determine the expected long-term rate of return on plan assets. The following represents the actuarial assumptions used to determine the actuarial present value of projected benefit obligations at:
The following represents the weighted average actuarial assumptions used to determine net periodic benefit cost for the years ended:
The discount rate was determined using the Moody’s Aa long-term corporate bond yield as of the measurement date with a maturity commensurate with the expected payout of the SERP obligation. This rate is also compared against the Citigroup Pension Discount Curve and Liability Index to ensure the rate used is reasonable and may be adjusted accordingly. This index is widely used by companies throughout the United States and is considered to be one of the preferred standards for establishing a discount rate. The assumed rate of future compensation increases is based on a combination of factors, including the historical compensation increases for its covered executive officers and future target compensation levels for its covered executive officers taking into account the covered executive officers' assumed retirement date. The periodic benefit cost is based on actuarial assumptions that are reviewed on an annual basis; however, Kforce monitors these assumptions on a periodic basis to ensure that they accurately reflect current expectations of the cost of providing retirement benefits. Net Periodic Benefit Cost The following represents the components of net periodic benefit cost for the years ended (in thousands):
Changes in Benefit Obligation The following represents the changes in the benefit obligation for the years ended (in thousands):
There were no payments made under the SERP during the years ended December 31, 2015 and 2014, respectively. The projected benefit obligation is recorded in Other long-term liabilities in the accompanying Consolidated Balance Sheets. The accumulated benefit obligation is the actuarial present value of all benefits attributed to past service, excluding future salary increases. The accumulated benefit obligation as of December 31, 2015 and 2014 was $11.0 million and $9.5 million, respectively. Contributions There is no requirement for Kforce to fund the SERP and, as a result, no contributions have been made to the SERP through the year ended December 31, 2015. Kforce does not currently anticipate funding the SERP during the year ending December 31, 2016. Estimated Future Benefit Payments Undiscounted benefit payments by the SERP, which reflect the anticipated future service of participants, expected to be paid are as follows (in thousands):
Supplemental Executive Retirement Health Plan Kforce maintained a SERHP to provide post-retirement health and welfare benefits to certain executives. The vesting and eligibility requirements mirrored that of the SERP, and no advance funding was required by Kforce or the participants. Consistent with the SERP, none of the benefits earned were attributable to services provided prior to the effective date of the plan. During the year ended December 31, 2014, Kforce terminated the Company's SERHP and settled all future benefit obligations by making lump sum payments totaling approximately $3.9 million, which resulted in a net settlement loss of $0.7 million recorded in Selling, general and administrative expenses in the corresponding Consolidated Statements of Operations and Comprehensive Income. The termination effectively removed Kforce's related post-retirement benefit obligation. During the year ended December 31, 2013, in connection with the Firm’s organizational realignment, two participants in the SERHP were terminated, resulting in a curtailment of $785 thousand to the projected benefit obligation and in the recognition of a curtailment gain of $359 thousand recorded in Selling, general and administrative expenses in the corresponding Consolidated Statements of Operations and Comprehensive Income. Net Periodic Post-retirement Benefit Cost The following represents the components of net periodic post-retirement benefit cost for the years ended (in thousands):
Changes in Post-retirement Benefit Obligation The following represents the changes in the post-retirement benefit obligation for the year ended (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., an exit price) in an orderly transaction between market participants at the measurement date. It establishes a fair value hierarchy and a framework which requires categorizing assets and liabilities into one of three levels based on the assumptions (inputs) used in valuing the asset or liability. Level 1 provides the most reliable measure of fair value, while Level 3 generally requires significant management judgment. Level 1 inputs are unadjusted, quoted market prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. Level 3 inputs include unobservable inputs that are supported by little, infrequent, or no market activity and reflect management’s own assumptions about inputs used in pricing the asset or liability. The Company uses the following valuation techniques to measure fair value. The carrying value of the outstanding borrowings under the Credit Facility approximates its fair value as it is based on a variable rate that changes based on market conditions. The inputs used to calculate the fair value of the Credit Facility are considered to be Level 2 inputs. The underlying investments within Kforce’s deferred compensation plan have included money market funds, which are held within the Rabbi Trust. Assets held within the money market funds are measured on a recurring basis and are recorded at fair value based on each fund’s quoted market value per share in an active market, which is considered a Level 1 input. Refer to Note 11 – “Employee Benefit Plans” and Note 5 – “Other Assets” for additional discussion. The contingent consideration liability, which is related to a non-significant acquisition of a business within our GS reporting segment in the fourth quarter of 2014, is measured on a recurring basis and is recorded at fair value, determined using the discounted cash flow method. The inputs used to calculate the fair value of the contingent consideration liability are considered to be Level 3 inputs due to the lack of relevant market activity and significant management judgment. An increase in future cash flows may result in a higher estimated fair value while a decrease in future cash flows may result in a lower estimated fair value of the contingent consideration liability. The remeasurements to fair value are recorded in Other expense, net within the Consolidated Statements of Operations and Comprehensive Income. For the year ended December 31, 2015, $0.3 million was recognized in Other expense, net due to the remeasurement of our contingent consideration liability. The contingent consideration liability is recorded in Other long-term liabilities within the Consolidated Balance Sheets. Certain assets, in specific circumstances, are measured at fair value on a non-recurring basis utilizing Level 3 inputs such as goodwill, other intangible assets and other long-lived assets. For these assets, measurement at fair value in periods subsequent to their initial recognition would be applicable if one or more of these assets were determined to be impaired. There were no transfers into or out of Level 1, 2 or 3 assets during the years ended December 31, 2015 and 2014. Transfers between levels are deemed to have occurred if the lowest level of input were to change. Kforce’s measurements at fair value on a recurring basis as of December 31, 2015 and 2014 were as follows (in thousands):
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Stock Incentive Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Incentive Plans | Stock Incentive Plans On April 5, 2013, the shareholders approved the 2013 Stock Incentive Plan, which was previously adopted by the Board on March 1, 2013, subject to shareholder approval. The aggregate number of shares of common stock that are subject to awards under the 2013 Stock Incentive Plan, subject to adjustment upon a change in capitalization, is 4.0 million. On June 20, 2006, the shareholders approved the 2006 Stock Incentive Plan and, as amended, the aggregate number of shares of common stock that are subject to awards is 7.9 million. The 2013 Stock Incentive Plan and 2006 Stock Incentive Plan allow for the issuance of stock options, SARs, restricted stock and common stock, subject to share availability. Vesting of equity instruments is determined on a grant-by-grant basis. Options expire at the end of 10 years from the date of grant, and Kforce issues new shares upon exercise of options. The 2013 Stock Incentive Plan terminates on April 5, 2023 and the 2006 Stock Incentive Plan terminates on April 28, 2016. The Incentive Stock Option Plan expired in 2005. Total stock-based compensation expense recognized related to all equity awards during the years ended December 31, 2015, 2014 and 2013 was $5.8 million, $5.5 million and $2.6 million, respectively. During the years ended December 31, 2015, 2014 and 2013, Kforce recognized stock-based compensation expense from continuing operations of $5.8 million, $3.0 million and $2.6 million, respectively. The related tax benefit for the years ended December 31, 2015, 2014 and 2013 was $2.3 million, $1.2 million and $1.0 million, respectively. Stock Options The following table presents the activity under each of the stock incentive plans discussed above for the three years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):
The following table summarizes information about employee and director stock options under all of the plans mentioned above as of December 31, 2015 (in thousands, except per share amounts):
No compensation expense was recorded during the years ended December 31, 2015, 2014 or 2013 as a result of the grant date fair value having been fully amortized as of December 31, 2009. As of December 31, 2015, there was no unrecognized compensation cost related to non-vested options. Restricted Stock Kforce's annual restricted stock grants made to executives and management are generally based on the extent by which annual long-term incentive performance goals, which are established by Kforce’s Compensation Committee during the first quarter of the year of performance, have been met, as determined by the Compensation Committee. Additionally, Kforce, with the approval of the Compensation Committee, grants restricted stock in varying amounts as determined appropriate during the year to retain executives and management. Restricted stock granted during the year ended December 31, 2015 will vest over a period of between one to ten years, with equal vesting annually. During the three months ended March 31, 2014, the Firm modified all awards containing a performance-acceleration feature that were granted during the three months ended December 31, 2013, as follows: (1) eliminated the performance-acceleration feature and (2) changed the time-based vesting term to five years, with equal vesting annually. The total number of restricted shares impacted by this modification was 268 thousand, excluding already forfeited shares, and the number of employees impacted was 87. The total incremental compensation cost resulting from the modification was $109 thousand, which will be amortized on a straight-line basis over the requisite service period of the modified awards. Restricted stock contain the same voting rights as other common stock and are included in the number of shares of common stock issued and outstanding. Restricted stock contain the right to forfeitable dividends in the form of additional shares of restricted stock at the same rate as the cash dividend on common stock and containing the same vesting provisions as the underlying award. The following table presents the activity for the three years ended December 31, 2015 (in thousands, except per share amounts):
The fair market value of restricted stock is determined based on the closing stock price of Kforce’s common stock at the date of grant, and is amortized on a straight-line basis over the requisite service period. In connection with the disposition of HIM, as discussed within Note 2 – “Discontinued Operations,” stock-based compensation related to acceleration of restricted stock was approximately $0.6 million during the year ended December 31, 2014. In connection with the Firm’s organizational realignment, Kforce terminated two of its covered executive officers during the three months ended December 31, 2013. In connection with their termination, Kforce accelerated the vesting of their restricted stock and, as a result, accelerated all of the related unrecognized compensation expense associated with these awards of $1.1 million during the year ended December 31, 2013. As of December 31, 2015, total unrecognized compensation expense related to restricted stock was $18.4 million, which will be recognized over a weighted average remaining period of 4.4 years. Common Stock As discussed within Note 2 – “Discontinued Operations,” the transaction expense related to the sale of HIM included commissions and transaction bonuses paid by the Firm in the form of Kforce common stock. As a result, during the year ended December 31, 2014, Kforce issued 92 thousand shares of common stock and recognized stock-based compensation expense of approximately $1.8 million. |
Organizational Realignment |
12 Months Ended |
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Dec. 31, 2015 | |
Restructuring and Related Activities [Abstract] | |
Organizational Realignment | Organizational Realignment During October 2013, the Firm commenced a plan to streamline its leadership and support-related structure to better align a higher percentage of personnel in roles that are closest to the customer through an organizational realignment. The new organizational design was intended to provide improved accountability and deliver better results for our clients, consultants and core personnel. As a result of the organizational realignment, Kforce incurred severance and termination-related expenses of $7.1 million during the three months ended December 31, 2013, which was recorded within Selling, general and administrative expenses in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Lease Commitments Kforce leases space and operating assets under operating and capital leases expiring at various dates, with some leases cancelable upon 30 to 90 days' notice and with some leases containing escalation in rent clauses. The leases require Kforce to pay taxes, insurance and maintenance costs, in addition to rental payments. Future minimum lease payments, inclusive of accelerated lease payments, under non-cancelable capital and operating leases are summarized as follows (in thousands):
The present value of the minimum lease payments for capital lease obligations has been classified in Other current liabilities and Long-term debt – other in the accompanying Consolidated Balance Sheets, according to their respective maturities. Rental expense under operating leases was $6.7 million, $5.6 million and $5.3 million for the years ended December 31, 2015, 2014 and 2013, respectively. Purchase Commitments Kforce has entered into various commitments including, among others, a compensation software hosting and licensing arrangement, and a commitment for data center fees for certain of our information technology applications. As of December 31, 2015, these commitments amounted to approximately $15.3 million and are expected to be paid as follows: $9.6 million in 2016; $4.5 million in 2017; $1.1 million in 2018; $0.1 million in 2019; and nil in 2020. Letters of Credit Kforce provides letters of credit to certain vendors in lieu of cash deposits. At December 31, 2015, Kforce had letters of credit outstanding for workers’ compensation and other insurance coverage totaling $3.2 million, and for facility lease deposits totaling $0.5 million. Litigation We are involved in legal proceedings, claims, and administrative matters that arise in the ordinary course of our business. We have made accruals with respect to certain of these matters, where appropriate, that are reflected in our consolidated financial statements but are not, individually or in the aggregate, considered material. For other matters for which an accrual has not been made, we have not yet determined that a loss is probable or the amount of loss cannot be reasonably estimated. While the ultimate outcome of the matters cannot be determined, we currently do not expect that these proceedings and claims, individually or in the aggregate, will have a material effect on our financial position, results of operations, or cash flows. The outcome of any litigation is inherently uncertain, however, and if decided adversely to us, or if we determine that settlement of particular litigation is appropriate, we may be subject to liability that could have a material adverse effect on our financial position, results of operations, or cash flows. Kforce maintains liability insurance in such amounts and with such coverage and deductibles as management believes is reasonable. The principal liability risks that Kforce insures against are workers’ compensation, personal injury, bodily injury, property damage, directors’ and officers’ liability, errors and omissions, employment practices liability and fidelity losses. There can be no assurance that Kforce’s liability insurance will cover all events or that the limits of coverage will be sufficient to fully cover all liabilities. Tax Audits Kforce is periodically subject to IRS audits, as well as state and other local income tax audits for various tax years. During 2015, there were no on-going IRS examinations. During 2014, the IRS finished an examination of Kforce’s U.S. income tax return for 2010 and 2011 with no material adjustments. Although Kforce has not experienced any material liabilities in the past due to income tax audits, Kforce can make no assurances concerning any future income tax audits. Employment Agreements Kforce has entered into employment agreements with certain executives that provide for minimum compensation, salary and continuation of certain benefits for a six-month to a three-year period after their employment ends under certain circumstances. Certain of the agreements also provide for a severance payment of one to three times annual salary and one-half to three times average annual bonus if such an agreement is terminated without good cause by Kforce or for good reason by the executive. These agreements contain certain post-employment restrictive covenants. Kforce’s liability at December 31, 2015 would be approximately $46.3 million if, following a change in control, all of the executives under contract were terminated without good cause by the employer or if the executives resigned for good reason and $19.8 million if, in the absence of a change in control, all of the executives under contract were terminated by Kforce without good cause or if the executives resigned for good reason. Kforce has not recorded any liability related to the employment agreements as no events have occurred that would require payment under the agreements. |
Reportable Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments | Reportable Segments Kforce’s reportable segments are as follows: (1) Tech; (2) FA; and (3) GS. This determination is supported by, among other factors: the existence of individuals responsible for the operations of each segment and who also report directly to our chief operating decision maker (“CODM”), the nature of the segment’s operations and information presented to the Board of Directors and our CODM. Kforce also reports Flexible billings and Direct Hire fees separately by segment, which has been incorporated into the table below. The following table has been updated to reflect the disposition of HIM. As described in Note 2 – “Discontinued Operations,” all revenues and gross profit associated with the discontinued operations have been recorded within Income from discontinued operations, net of taxes, in the accompanying Consolidated Statements of Operations and Comprehensive Income. Historically, and through our year ended December 31, 2015, Kforce has generated only sales and gross profit information on a segment basis. Substantially all operations and long-lived assets are located in the United States. We do not report total assets or income from continuing operations separately by segment as our operations are largely combined. The following table provides information concerning the operations of our segments for the years ended December 31, 2015, 2014 and 2013 (in thousands):
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Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited) The quarterly financial data presented below has been adjusted, where applicable, to reflect the discontinued operations of HIM, which is more fully described in Note 2 – “Discontinued Operations.” Certain prior quarter amounts have been reclassified to conform with current year presentation and may not tie back to quarterly filings. The following table provides quarterly information for the years ended December 31, 2015 and 2014 (in thousands, except per share amounts):
During the third quarter of 2014, in connection with the disposition of HIM, the income from discontinued operations included a gain, net of transactions costs, on the sale of discontinued operations of $94.3 million pretax, or $56.1 million after tax. The transactions costs primarily included legal fees, stock-based compensation related to the acceleration of restricted stock, commissions and transaction bonuses in the form of cash and common stock, which in the aggregate, totaled $11.0 million. Stock-based compensation related to the acceleration of restricted stock and transaction bonuses paid in stock in lieu of cash was $2.4 million. |
Supplemental Cash Flow Information |
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Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | Supplemental Cash Flow Information Supplemental cash flow information is as follows for the year ended December 31 (in thousands):
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Schedule II Valuation and Qualifying Accounts and Reserves Supplemental Schedule |
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Schedule II Valuation and Qualifying Accounts and Reserves Supplemental Schedule | SCHEDULE II KFORCE INC. AND SUBSIDIARIES VALUATION AND QUALIFYING ACCOUNTS AND RESERVES SUPPLEMENTAL SCHEDULE (in thousands)
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Summary of Significant Accounting Policies (Policies) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization and Nature of Operations | Kforce Inc. and its subsidiaries (collectively, “Kforce”) provide professional staffing services and solutions to customers in the following segments: Technology (“Tech”), Finance and Accounting (“FA”), and Government Solutions (“GS”). Kforce provides flexible staffing services and solutions on both a temporary and full-time basis. Kforce operates through its corporate headquarters in Tampa, Florida and 62 field offices located throughout the United States. Additionally, one of our subsidiaries, Kforce Global Solutions, Inc. (“Global”), provides information technology outsourcing services internationally through an office in Manila, Philippines. Our international operations comprised less than 2% of net service revenues for each of the three years ended December 31, 2015 and are included in our Tech segment. Kforce serves clients from the Fortune 1000, the Federal Government, state and local governments, local and regional companies and small to mid-sized companies. |
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Basis of Presentation | The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP") and the rules of the SEC. Certain prior year amounts have been reclassified in the Consolidated Statements of Cash Flows to conform to the current year presentation. |
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Principles of Consolidation | The consolidated financial statements include the accounts of Kforce Inc. and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. References in this document to “the Registrant,” “Kforce,” “the Company,” “we,” “the Firm,” “our” or “us” refer to Kforce Inc. and its subsidiaries, except where the context otherwise requires or indicates. |
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Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The most important of these estimates and assumptions relate to the following: allowance for doubtful accounts, fallouts and other accounts receivable reserves; accounting for goodwill and identifiable intangible assets and any related impairment; self-insured liabilities for workers’ compensation and health insurance; stock-based compensation; obligations for pension plans and accounting for income taxes. Although these and other estimates and assumptions are based on the best available information, actual results could be materially different from these estimates. |
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Cash and Cash Equivalents | Kforce classifies all highly liquid investments with an original initial maturity of three months or less as cash equivalents. Cash and cash equivalents consist of cash on hand with banks, either in commercial accounts, or overnight interest-bearing money market accounts and at times may exceed federally insured limits. Cash and cash equivalents are stated at cost, which approximates fair value due to the short duration of their maturities. |
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Accounts Receivable Reserves | Kforce establishes its reserves for expected credit losses, fallouts, early payment discounts and revenue adjustments based on past experience and estimates of potential future activity. Specific to our allowance for doubtful accounts, which comprises a majority of our accounts receivable reserves, Kforce performs an ongoing analysis of factors including recent write-off and delinquency trends, a specific analysis of significant receivable balances that are past due, the concentration of accounts receivable among clients and higher-risk sectors, and the current state of the U.S. economy. Trade receivables are written off by Kforce after all reasonable collection efforts have been exhausted. |
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Revenue Recognition | Kforce considers amounts to be earned once evidence of an arrangement has been obtained, delivery has occurred, fees are fixed or determinable, and collectability is reasonably assured. We earn revenues from two primary sources: Flexible billings and Direct Hire fees. Flexible billings are recognized as the services are provided by Kforce’s Flexible Consultants. Net service revenues represent services rendered to customers less credits, discounts, rebates and revenue-related reserves. Revenues include reimbursements of travel and out-of-pocket expenses (“billable expenses”) with equivalent amounts of expense recorded in direct costs of services. Direct Hire fees are recognized by Kforce when employment candidates accept offers of permanent employment and are scheduled to commence employment within 30 days. Kforce records revenues net of an estimated reserve for “fallouts,” which is based on Kforce’s historical fallout experience. Fallouts occur when a candidate does not remain employed with the client through the contingency period, which is typically 90 days or less. Our GS segment generates its revenues under contracts that are, in general, greater in duration than our other segments and which can often span several years, inclusive of renewal periods. Our GS segment does not generate any Direct Hire fees. Our GS segment, which represents approximately 7% of total revenues, generates revenues under the following contract arrangements.
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Direct Costs of Services | Direct costs of services are composed of all related costs of employment for its Flexible Consultants, including payroll wages, payroll taxes, payroll-related insurance and certain fringe benefits, as well as subcontractor costs. Direct costs of services exclude depreciation and amortization expense, which is presented on a separate line in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
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Taxes Assessed by Governmental Agencies - Revenue Producing Transactions | Kforce collects sales tax for various taxing authorities and it is our policy to record these amounts on a net basis; thus, sales tax amounts are not included in net service revenues. |
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Income Taxes | Kforce accounts for income taxes using the asset and liability approach to the recognition of deferred tax assets and liabilities for the expected future tax consequences of differences between the financial statement carrying amounts and the tax basis of assets and liabilities. Unless it is more likely than not that a deferred tax asset can be utilized to offset future taxes, a valuation allowance is recorded against that asset. The excess tax benefits of deductions attributable to employees’ disqualifying dispositions of shares obtained from incentive stock options, exercises of non-qualified stock options, and vesting of restricted stock are reflected as increases in additional paid-in capital. Kforce evaluates tax positions that have been taken or are expected to be taken in its tax returns, and records a liability for uncertain tax positions. Kforce uses a two-step approach to recognize and measure uncertain tax positions. First, tax positions are recognized if the weight of available evidence indicates that it is more likely than not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any. Second, tax positions are measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon settlement. Kforce recognizes interest and penalties related to unrecognized tax benefits in Income tax expense in the accompanying Consolidated Statements of Operations and Comprehensive Income. |
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Fair Value Measurements | Kforce uses fair value measurements in areas that include, but are not limited to: the impairment testing of goodwill and intangible and long-lived assets; stock-based compensation arrangements; valuing the investment in money market funds within Kforce’s deferred compensation plan; and a contingent consideration liability. The carrying values of cash and cash equivalents, accounts receivable, accounts payable, and other current assets and liabilities approximate fair value because of the short-term nature of these instruments. Using available market information and appropriate valuation methodologies, Kforce has determined the estimated fair value measurements; however, considerable judgment is required in interpreting data to develop the estimates of fair value. |
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Fixed Assets | Fixed assets are carried at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the shorter of the estimated useful lives of the assets or the terms of the related leases, which generally range from three to five years. Upon sale or disposition of our fixed assets, the cost and accumulated depreciation are removed and any resulting gain or loss, net of proceeds, is reflected in the Consolidated Statements of Operations and Comprehensive Income. |
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Goodwill and Other Intangible Assets | Goodwill Kforce performs a goodwill impairment analysis, using the two-step analysis method, on an annual basis and whenever events or changes in circumstances indicate that the carrying value may not be recoverable unless it is determined, based upon a review of the qualitative factors of a reporting unit, that it is more likely than not that the fair value of a reporting unit exceeds its carrying amount, including goodwill. Under the two-step analysis method, the recoverability of goodwill is measured at the reporting unit level, which Kforce has determined to be consistent with its operating segments, by comparing the reporting unit’s carrying amount, including goodwill, to the fair market value of the reporting unit. Kforce determines the fair market value of its reporting units based on a weighting of the present value of projected future cash flows (the “income approach”) and the use of comparative market approaches under both the guideline company method and guideline transaction method (collectively, the “market approach”). Fair market value using the income approach is based on Kforce’s estimated future cash flows on a discounted basis. The market approach compares each of Kforce’s reporting units to other comparable companies based on valuation multiples derived from operational and transactional data to arrive at a fair value. Factors requiring significant judgment include, among others, the assumptions related to discount rates, forecasted operating results, long-term growth rates, the determination of comparable companies, and market multiples. Changes in economic or operating conditions or changes in Kforce’s business strategies that occur after the annual impairment analysis and which impact these assumptions may result in a future goodwill impairment charge, which could be material to Kforce’s consolidated financial statements. Other Intangible Assets Identifiable intangible assets arising from certain of Kforce’s acquisitions include non-compete and employment agreements, contractual relationships, customer contracts, technology, and a trade name and trademark. Our trade names and trademarks, and derivatives thereof, and GS’s “Data Confidence” trademark are important to our business. Our primary trade names and trademark are registered with the United States Patent and Trademark Office. For definite-lived intangible assets, Kforce has determined that the straight-line method is an appropriate methodology to allocate the cost over the period of expected benefit, which ranges from one to fifteen years. The impairment evaluation for indefinite-lived intangible assets, which for Kforce consists of a trademark and trade name, is conducted on an annual basis or more frequently if events or changes in circumstances indicate that an asset may be impaired. |
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Impairment of Long-Lived Assets | Kforce reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of long-lived assets is measured by a comparison of the carrying amount of the asset group to the future undiscounted net cash flows expected to be generated by those assets. If such assets are considered to be impaired, the impairment charge recognized is the amount by which the carrying amounts of the assets exceed the fair value of the assets, as determined based on the present value of projected future cash flows. |
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Capitalized Software | Kforce purchases, develops, and implements new computer software to enhance the performance of our technology infrastructure. Direct internal costs, such as payroll and payroll-related costs, and external costs incurred during the development stage are capitalized and classified as capitalized software. Kforce capitalized development-stage implementation costs of $0.3 million, $0.4 million and $1.0 million during the years ended December 31, 2015, 2014 and 2013, respectively. Capitalized software development costs are classified as Other assets, net in the accompanying Consolidated Balance Sheets and are being amortized over the estimated useful lives of the software, which range from one to five years, using the straight-line method. |
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Commissions | Our associates make placements and earn commissions as a percentage of revenues (for Direct Hire revenues) or gross profit (for Flex revenues) pursuant to a calendar-year-basis commission plan. The amount of commissions paid as a percentage of revenues or gross profit increases as volume increases. Kforce accrues commissions for revenues or gross profit at a percentage equal to the percent of total expected commissions payable to total revenues or gross profit for the year, as applicable. |
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Stock-Based Compensation | Kforce accounts for stock-based compensation by measuring the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. The cost is recognized over the requisite service period, net of estimated forfeitures. If the actual number of forfeitures differs from those estimated, additional adjustments to compensation expense may be required in future periods. |
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Workers' Compensation | Kforce retains the economic burden for the first $250 thousand per occurrence in workers’ compensation claims except: (1) in states that require participation in state-operated insurance funds and (2) for its GS segment which is fully insured for workers’ compensation claims. Workers’ compensation includes ongoing health care and indemnity coverage for claims and may be paid over numerous years following the date of injury. Workers’ compensation expense includes insurance premiums paid, claims administration fees charged by Kforce’s workers’ compensation administrator, premiums paid to state-operated insurance funds and an estimate for Kforce’s liability for IBNR claims and for the ongoing development of existing claims. Kforce estimates its workers’ compensation liability based upon historical claims experience, actuarially determined loss development factors, and qualitative considerations such as claims management activities. |
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Health Insurance | Except for certain fully insured health insurance lines of coverage, Kforce retains the risk of loss for each health insurance plan participant up to $300 thousand in claims annually. Additionally, for all claim amounts exceeding $300 thousand, Kforce retains the risk of loss up to an aggregate annual loss of those claims of $450 thousand. For its partially self-insured lines of coverage, health insurance costs are accrued using estimates to approximate the liability for reported claims and IBNR claims, which are primarily based upon an evaluation of historical claims experience, actuarially-determined completion factors and a qualitative review of our health insurance exposure including the extent of outstanding claims and expected changes in health insurance costs. |
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Accounting for Pension Benefits | Kforce recognizes the underfunded status of its defined benefit pension plans as a liability in its Consolidated Balance Sheets and recognizes changes in that funded status in the year in which the changes occur through other comprehensive income (loss). Kforce also measures the funded status of the defined benefit pension plans as of the date of its fiscal year-end, with limited exceptions. Amortization of a net unrecognized gain or loss in accumulated other comprehensive income (loss) is included as a component of net periodic benefit cost if, as of the beginning of the year, that net gain or loss exceeds 10% of the projected benefit obligation. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active plan participants. |
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Earnings Per Share | Basic earnings per share is computed as earnings divided by the weighted average number of common shares outstanding during the period. Basic weighted average shares outstanding excludes unvested shares of restricted stock. Diluted earnings per common share is computed by dividing the earnings attributable to common shareholders for the period by the weighted average number of common shares outstanding during the period plus the dilutive effect of stock options and other potentially dilutive securities such as unvested shares of restricted stock using the treasury stock method, except where the effect of including potential common shares would be anti-dilutive. |
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Treasury Stock | Kforce’s Board of Directors (“Board”) may authorize share repurchases of Kforce’s common stock. Shares repurchased under Board authorizations are held in treasury for general corporate purposes, including issuances under the 2009 ESPP. Treasury shares are accounted for under the cost method and reported as a reduction of stockholders’ equity in the accompanying consolidated financial statements. |
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Comprehensive Income (Loss) | Accumulated other comprehensive income (loss) represents the net after-tax impact of unrecognized actuarial gains and losses related to the SERP which covers a limited number of executives and a defined benefit plan covering all eligible employees in our Philippine operations. Because each of these plans is unfunded as of December 31, 2015, the actuarial gains and losses arise as a result of the actuarial experience of the plans, as well as changes in actuarial assumptions in measuring the associated obligation as of year-end, or an interim date if any re-measurement is necessary. This information is provided in our Consolidated Statements of Operations and Comprehensive Income. |
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Dividends | Kforce’s Board may, at its discretion, declare and pay dividends on the outstanding shares of Kforce’s common stock out of retained earnings, subject to statutory requirements. Dividends for any outstanding and unvested restricted stock as of the record date are awarded in the form of additional shares of forfeitable restricted stock, at the same rate as the cash dividend on common stock and based on the closing stock price on the record date. Such additional shares have the same vesting terms and conditions as the outstanding and unvested restricted stock. The following summarizes the cash dividends declared for the three years ended December 31:
Kforce currently expects to continue to declare and pay quarterly dividends of a similar amount. However, the declaration, payment and amount of future dividends are discretionary and will be subject to determination by Kforce’s Board of Directors each quarter following its review of, among other things, the Firm’s financial performance and our legal ability to pay dividends. |
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New Accounting Standards | In February 2016, the FASB issued authoritative guidance regarding the accounting for leases. The guidance is to be applied for annual periods beginning after December 15, 2018 and interim periods within those annual periods, and early adoption is permitted. The guidance requires companies to apply the requirements retrospectively to all prior periods presented, including interim periods. Kforce elected not to adopt this standard early. Kforce is currently evaluating the potential impact on the consolidated financial statements. In November 2015, the FASB issued authoritative guidance requiring that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This guidance is to be applied for annual periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. Kforce is still determining if it will early adopt this standard. Kforce anticipates a change to the presentation of the deferred tax liabilities and assets on the consolidated balance sheets upon adoption. In April 2015, the FASB issued authoritative guidance regarding a customer's accounting for fees paid in a cloud computing arrangement. This guidance is to be applied for annual periods beginning after December 15, 2015 and interim periods within those annual periods, and early adoption is permitted. Kforce elected not to adopt this standard early. Kforce does not anticipate a material impact to the consolidated financial statements upon adoption. In April 2015, the FASB issued authoritative guidance requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of the debt liability, similar to debt discounts. The guidance is to be applied for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years, and early adoption is permitted. Kforce elected not to adopt this standard early. Kforce does not anticipate a material impact to the consolidated financial statements upon adoption. In May 2014, the FASB issued authoritative guidance regarding revenue from contracts with customers, which specifies that revenue should be recognized when promised goods or services are transferred to customers in an amount that reflects the consideration which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued authoritative guidance deferring the effective date of the new revenue standard by one year for all entities. The one year deferral results in the guidance being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017 and entities are not permitted to adopt the standard earlier than the original effective date. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. We have not yet selected a transition method. We do not currently anticipate a material impact to the consolidated financial statements upon adoption; however, we do anticipate an increase in the level of disclosure around revenue. |
Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share for the three years ended December 31 (in thousands, except per share amounts):
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Summary of Cash Dividends Declared | The following summarizes the cash dividends declared for the three years ended December 31:
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Discontinued Operations (Tables) |
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Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Income From Discontinued Operations | The following summarizes the revenues and pretax profits of HIM for the two years ended December 31 (in thousands):
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Fixed Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Major Classifications of Fixed Assets and Related Useful Lives | Major classifications of fixed assets and related useful lives are summarized as follows (in thousands):
|
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Expense (Benefit), Continuing Operations | The provision for income taxes from continuing operations consists of the following (in thousands):
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Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation | The provision for income taxes from continuing operations shown above varied from the statutory federal income tax rate for those periods as follows:
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Components of Deferred Tax Assets and Liabilities | Deferred income tax assets and liabilities are composed of the following (in thousands):
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Income Tax Uncertainties | A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013 is as follows (in thousands):
|
Other Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Assets | Other assets consisted of the following (in thousands):
|
Goodwill and Other Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in the Carrying Amount of Goodwill in Total and for Each Reporting Unit | The following table contains a disclosure of changes in the carrying amount of goodwill in total and for each reporting unit for the two years ended December 31, 2015 and 2014 (in thousands):
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Summary of the Gross Amount and Accumulated Impairment Losses of Goodwill | The following table contains a disclosure of the gross amount and accumulated impairment losses of goodwill for Tech, FA and GS reporting units for the three years ended December 31, 2015 (in thousands):
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Summary of the Gross and Net Carrying Values of Intangible Assets | The gross and net carrying values of intangible assets as of December 31, 2015 and 2014, by major intangible asset class, are as follows (in thousands):
|
Accounts Payable and Other Accrued Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and other accrued liabilities consisted of the following (in thousands):
|
Accrued Payroll Costs (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Payroll Costs [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Accrued Payroll Costs | Accrued payroll costs consisted of the following (in thousands):
|
Other Long-Term Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Other- Long Term Liabilities | Other long-term liabilities consisted of the following (in thousands):
|
Employee Benefit Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Postemployment Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Actuarial Assumptions Used to Determine the Actuarial Present Value of Projected Benefit Obligations | The following represents the actuarial assumptions used to determine the actuarial present value of projected benefit obligations at:
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Actuarial Assumptions Used to Determine Net Periodic Benefit Cost | The following represents the weighted average actuarial assumptions used to determine net periodic benefit cost for the years ended:
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Components of Net Periodic Benefit Cost | The following represents the components of net periodic benefit cost for the years ended (in thousands):
The following represents the components of net periodic post-retirement benefit cost for the years ended (in thousands):
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Changes in the Benefit Obligation | The following represents the changes in the benefit obligation for the years ended (in thousands):
The following represents the changes in the post-retirement benefit obligation for the year ended (in thousands):
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Projected Annual Benefit Payment | Undiscounted benefit payments by the SERP, which reflect the anticipated future service of participants, expected to be paid are as follows (in thousands):
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Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements on a Recurring and Non-Recurring Basis | Kforce’s measurements at fair value on a recurring basis as of December 31, 2015 and 2014 were as follows (in thousands):
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Stock Incentive Plans (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity | The following table presents the activity under each of the stock incentive plans discussed above for the three years ended December 31, 2015, 2014 and 2013 (in thousands, except per share amounts):
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Summary of Employee and Director Stock Option Activity | The following table summarizes information about employee and director stock options under all of the plans mentioned above as of December 31, 2015 (in thousands, except per share amounts):
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Summary of Restricted Stock Activity | The following table presents the activity for the three years ended December 31, 2015 (in thousands, except per share amounts):
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Future Minimum Lease Payments for Capital and Operating Lease | Future minimum lease payments, inclusive of accelerated lease payments, under non-cancelable capital and operating leases are summarized as follows (in thousands):
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Reportable Segments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operations of Segments | The following table provides information concerning the operations of our segments for the years ended December 31, 2015, 2014 and 2013 (in thousands):
|
Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Quarterly Financial Information | The quarterly financial data presented below has been adjusted, where applicable, to reflect the discontinued operations of HIM, which is more fully described in Note 2 – “Discontinued Operations.” Certain prior quarter amounts have been reclassified to conform with current year presentation and may not tie back to quarterly filings. The following table provides quarterly information for the years ended December 31, 2015 and 2014 (in thousands, except per share amounts):
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Supplemental Cash Flow Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Elements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Details of Supplemental Cash Flow Information | Supplemental cash flow information is as follows for the year ended December 31 (in thousands):
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Summary of Significant Accounting Policies - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Numerator: | |||||||||||
Income from continuing operations | $ 11,901 | $ 13,545 | $ 11,593 | $ 5,785 | $ 9,061 | $ 7,995 | $ 7,953 | $ 4,389 | $ 42,824 | $ 29,398 | $ 5,294 |
Income from discontinued operations, net of tax | 0 | 0 | 0 | 0 | (116) | 57,023 | 2,750 | 1,860 | 0 | 61,517 | 5,493 |
Net income | $ 11,901 | $ 13,545 | $ 11,593 | $ 5,785 | $ 8,945 | $ 65,018 | $ 10,703 | $ 6,249 | $ 42,824 | $ 90,915 | $ 10,787 |
Denominator: | |||||||||||
Weighted average shares outstanding - basic (in shares) | 27,910 | 31,475 | 33,511 | ||||||||
Common stock equivalents (in shares) | 280 | 216 | 132 | ||||||||
Weighted average shares outstanding – diluted (in shares) | 28,190 | 31,691 | 33,643 | ||||||||
Earnings per share – basic: | |||||||||||
From continuing operations (in dollars per share) | $ 1.53 | $ 0.94 | $ 0.16 | ||||||||
From discontinued operations (in dollars per share) | 0.00 | 1.95 | 0.16 | ||||||||
Earnings per share – basic (in dollars per share) | $ 0.43 | $ 0.49 | $ 0.41 | $ 0.20 | $ 0.30 | $ 2.07 | $ 0.33 | $ 0.19 | 1.53 | 2.89 | 0.32 |
Earnings per share – diluted: | |||||||||||
From continuing operations (in dollars per share) | 1.52 | 0.93 | 0.16 | ||||||||
From discontinued operations (in dollars per share) | 0.00 | 1.94 | 0.16 | ||||||||
Earnings per share – diluted (in dollars per share) | $ 0.43 | $ 0.48 | $ 0.41 | $ 0.20 | $ 0.30 | $ 2.06 | $ 0.33 | $ 0.19 | $ 1.52 | $ 2.87 | $ 0.32 |
Summary of Significant Accounting Policies - Summary of Cash Dividend Declared (Detail) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Accounting Policies [Abstract] | |||
Cash dividends declared per share (in dollars per share) | $ 0.45 | $ 0.41 | $ 0.10 |
Discontinued Operations - Summary of Revenues and Pretax Profits (Details) - Health Information Management - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Net service revenues | $ 56,670 | $ 78,159 |
Income from discontinued operations, before income taxes | $ 103,512 | $ 9,169 |
Fixed Assets - Additional information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | $ 66,235 | $ 60,804 | |
Accumulated depreciation and amortization | 28,759 | 25,474 | |
Depreciation and amortization | 6,700 | ||
Assets Held under Capital Leases | |||
Property, Plant and Equipment [Line Items] | |||
Fixed assets, gross | 4,700 | 3,800 | |
Accumulated depreciation and amortization | $ 2,900 | 2,300 | |
Depreciation and amortization | $ 6,300 | $ 5,900 |
Income Taxes - Income Tax Expense (Benefit), Continuing Operations (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Current: | |||
Federal | $ 22,265 | $ 15,782 | $ 4,140 |
State | 4,632 | 2,527 | 449 |
Deferred | 1,951 | 250 | 1,046 |
Income tax expense (benefit) | $ 28,848 | $ 18,559 | $ 5,635 |
Income Taxes - Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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Income Tax Disclosure [Abstract] | |||
Federal income tax rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of Federal tax effect | 6.10% | 3.20% | 4.10% |
Non-deductible goodwill impairment | 0.00% | 0.00% | 4.30% |
Non-deductible compensation | 0.00% | 1.10% | 0.00% |
Non-deductible meals and entertainment | 0.70% | 1.10% | 5.20% |
Other | (1.50%) | (1.70%) | 3.00% |
Effective tax rate | 40.30% | 38.70% | 51.60% |
Income Taxes - Components of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Assets: | ||
Accounts receivable reserves | $ 982 | $ 804 |
Accrued liabilities | 2,753 | 3,123 |
Deferred compensation obligation | 895 | 1,426 |
Other | 74 | 75 |
Deferred tax assets, current | 4,704 | 5,428 |
Liabilities: | ||
Prepaid expenses | (186) | (448) |
Deferred tax asset, net – current | 4,518 | 4,980 |
Assets: | ||
Accrued liabilities | 613 | 649 |
Deferred compensation obligation | 6,956 | 6,324 |
Stock-based compensation | 1,817 | 1,185 |
Pension and post-retirement benefit plans | 5,303 | 5,125 |
Goodwill and intangible assets | 7,543 | 10,407 |
Deferred revenue | 27 | 28 |
Other | 293 | 995 |
Deferred tax assets, non-current | 22,552 | 24,713 |
Liabilities: | ||
Fixed assets | (1,198) | (1,651) |
Other | (331) | (122) |
Deferred tax liabilities, non-current | (1,529) | (1,773) |
Valuation allowance | (85) | (85) |
Deferred tax asset, net – non-current | 20,938 | 22,855 |
Net deferred tax asset | $ 25,456 | $ 27,835 |
Income Taxes - Additional Information (Detail) $ in Millions |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
| |
Operating Loss Carryforwards [Line Items] | |
Likelihood of an uncertain income tax position not being recognized | 50.00% |
State | |
Operating Loss Carryforwards [Line Items] | |
State tax net operating losses | $ 4.7 |
Income Taxes - Income Tax Uncertainties (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Beginning balance | $ 278 | $ 403 | $ 133 |
Additions for tax positions of prior years | 625 | 90 | 269 |
Additions for tax positions of current year | 0 | 0 | 25 |
Reductions for tax positions of prior years – lapse of applicable statutes | (33) | (35) | (24) |
Settlements | (82) | (180) | 0 |
Ending balance | $ 788 | $ 278 | $ 403 |
Other Assets - Other Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Other Assets Non Current [Line Items] | ||
Capitalized software, net of amortization | $ 2,049 | $ 3,678 |
Deferred loan costs, net of amortization | 487 | 608 |
Other non-current assets | 646 | 348 |
Total other assets | 28,671 | 30,349 |
Rabbi Trust | ||
Other Assets Non Current [Line Items] | ||
Assets held in Rabbi Trust | $ 25,489 | $ 25,715 |
Other Assets - Additional Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Other Assets [Line Items] | |||
Capitalized software purchases and direct costs associated with software developed for internal use | $ 700 | $ 1,200 | |
Accumulated amortization of capitalized software | 37,700 | 37,600 | |
Amortization expense of capitalized software | 2,300 | 2,900 | $ 3,200 |
Rabbi Trust | |||
Other Assets [Line Items] | |||
Assets held in Rabbi Trust | $ 25,489 | $ 25,715 |
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Goodwill And Other Intangible Assets [Line Items] | |||
Discrete forecast period | 5 years | ||
Goodwill impairment | $ 0 | $ 0 | $ 14,510,000 |
Amortization of intangible assets | 800,000 | 700,000 | 700,000 |
Estimated remaining amortization expense, 2016 | 600,000 | ||
Estimated remaining amortization expense, 2017 | 300,000 | ||
Estimated remaining amortization expense, 2018 | 300,000 | ||
Estimated remaining amortization expense, 2019 | 300,000 | ||
Estimated remaining amortization expense, 2020 | 200,000 | ||
Estimated remaining amortization expense, thereafter | 200,000 | ||
Impairment expense | $ 0 | $ 0 | 0 |
Operating Segments | Government Solutions | |||
Goodwill And Other Intangible Assets [Line Items] | |||
Goodwill impairment | 14,510,000 | ||
Goodwill related tax benefit | $ 5,200,000 |
Goodwill and Other Intangible Assets - Summary of the Gross Amount and Accumulated Impairment Losses of Goodwill (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
---|---|---|---|
Goodwill [Line Items] | |||
Carrying value | $ 45,968 | $ 45,968 | $ 48,900 |
Operating Segments | Technology | |||
Goodwill [Line Items] | |||
Gross amount | 156,391 | 156,391 | 156,391 |
Accumulated impairment losses | (139,357) | (139,357) | (139,357) |
Carrying value | 17,034 | 17,034 | 17,034 |
Operating Segments | Finance and Accounting | |||
Goodwill [Line Items] | |||
Gross amount | 19,766 | 19,766 | 19,766 |
Accumulated impairment losses | (11,760) | (11,760) | (11,760) |
Carrying value | 8,006 | 8,006 | 8,006 |
Operating Segments | Government Solutions | |||
Goodwill [Line Items] | |||
Gross amount | 104,596 | 104,596 | 102,641 |
Accumulated impairment losses | (83,668) | (83,668) | (83,668) |
Carrying value | $ 20,928 | $ 20,928 | $ 18,973 |
Goodwill and Other Intangible Assets - Summary of the Gross and Net Carrying Values of Intangible Assets (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Indefinite-lived intangible assets | ||
Trade name and trademark carrying value | $ 4,235 | $ 5,011 |
Customer relationships, customer contracts, technology and other | ||
Definite-lived intangible assets | ||
Gross amount | 28,603 | 28,603 |
Accumulated amortization | (26,608) | (25,832) |
Carrying value | 1,995 | 2,771 |
Trade name and trademark | ||
Indefinite-lived intangible assets | ||
Trade name and trademark carrying value | $ 2,240 | $ 2,240 |
Accounts Payable and Other Accrued Liabilities - Schedule of Accounts Payable and Accrued Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accounts payable | $ 23,513 | $ 21,863 |
Accrued liabilities | 15,714 | 16,241 |
Total | $ 39,227 | $ 38,104 |
Accrued Payroll Costs - Components of Accrued Payroll Costs (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Accrued Payroll Costs [Abstract] | ||
Payroll and benefits | $ 39,043 | $ 43,797 |
Payroll taxes | 2,832 | 3,062 |
Health insurance liabilities | 2,968 | 3,417 |
Workers’ compensation liabilities | 1,282 | 1,932 |
Total | $ 46,125 | $ 52,208 |
Other Long-Term Liabilities - Components of Other- Long Term Liabilities (Detail) - USD ($) $ in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Deferred Compensation Liability, Classified, Noncurrent | $ 24,238 | $ 22,425 |
Supplemental executive retirement plan | 11,337 | 10,197 |
Other | 5,051 | 3,834 |
Total | $ 40,626 | $ 36,456 |
Employee Benefit Plan - Actuarial Assumptions Used to Determine the Actuarial Present Value of Projected Benefit Obligations (Detail) - Supplemental Executive Retirement Plan |
Dec. 31, 2015 |
Dec. 31, 2014 |
---|---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Discount rate | 4.00% | 3.75% |
Rate of future compensation increase | 4.00% | 4.00% |
Employee Benefit Plans - Weighted Average Actuarial Assumptions Used To Determine Net Periodic Benefit Cost (Detail) - Weighted Average - Supplemental Executive Retirement Plan |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Discount rate | 3.75% | 3.75% | 2.50% |
Rate of future compensation increase | 4.00% | 4.00% | 4.00% |
Employee Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Supplemental Executive Retirement Health Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 174 | $ 649 | |
Interest cost | 78 | 134 | |
Amortization of actuarial loss | 0 | 86 | |
Settlement/curtailment loss/(gain) | 725 | (359) | |
Net periodic benefit (gain) cost | 977 | 510 | |
Supplemental Executive Retirement Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Service cost | $ 1,323 | 1,164 | 2,018 |
Interest cost | 383 | 294 | 471 |
Amortization of actuarial loss | 0 | 0 | 97 |
Settlement loss | 0 | 0 | 24 |
Net periodic benefit (gain) cost | $ 1,706 | $ 1,458 | $ 2,610 |
Employee Benefit Plans - Projected Annual Benefit Payment (Detail) - Supplemental Executive Retirement Plan $ in Thousands |
Dec. 31, 2015
USD ($)
|
---|---|
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |
2016 | $ 0 |
2017 | 0 |
2018 | 0 |
2019 | 10,297 |
2020 | 0 |
2021-2025 | 0 |
Thereafter | $ 3,987 |
Employee Benefit Plans - Changes in the Benefit Obligation (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Supplemental Executive Retirement Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation, beginning | $ 10,197 | $ 7,852 | |
Service cost | 1,323 | 1,164 | $ 2,018 |
Interest cost | 383 | 294 | 471 |
Actuarial experience and changes in actuarial assumptions | (566) | 887 | |
Projected benefit obligation, ending | 11,337 | 10,197 | 7,852 |
Supplemental Executive Retirement Health Plan | |||
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligation, beginning | $ 0 | 2,674 | |
Service cost | 174 | 649 | |
Interest cost | 78 | 134 | |
Actuarial experience and changes in actuarial assumptions | 234 | ||
Settlement/curtailment loss/(gain) | 725 | (359) | |
Benefits Paid | (3,885) | ||
Projected benefit obligation, ending | $ 0 | $ 2,674 |
Fair Value Measurements - Additional Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration for acquisition | $ 321,000 | $ 0 | $ 0 |
Transfers into or out of Level 1, 2 or 3 assets | 0 | $ 0 | |
Other Expense | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Contingent consideration for acquisition | $ 300,000 |
Stock Incentive Plans - Range of Outstanding and Exercisable Option Exercise Prices (Detail) - $9.13 - $14.45 $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2015
USD ($)
$ / shares
shares
| |
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items] | |
Lower range (in dollars per share) | $ 9.13 |
Upper range (in dollars per share) | $ 14.45 |
Number of Awards (in shares) | shares | 25 |
Weighted Average Remaining Contractual Term (Yrs) | 1 year 6 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $ 11.58 |
Total Intrinsic Value | $ | $ 342 |
Stock Incentive Plans - Summary of Restricted Stock Activity (Detail) - Restricted Stock - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Number of Restricted Stock | |||
Outstanding as of beginning of period (in shares) | 982 | 811 | 38 |
Granted (in shares) | 556 | 528 | 904 |
Vested (in shares) | (186) | (273) | (109) |
Forfeited (in shares) | (59) | (84) | (22) |
Outstanding as of end of period (in shares) | 1,293 | 982 | 811 |
Weighted Average Grant Date Fair Value | |||
Outstanding as of beginning of period (in dollars per share) | $ 18.55 | $ 16.89 | $ 12.11 |
Granted (in dollars per share) | 24.01 | 20.18 | 16.72 |
Vested (in dollars per share) | 18.28 | 17.37 | 14.15 |
Forfeited/Canceled (in dollars per share) | 19.37 | 18.38 | 15.43 |
Outstanding as of end of period (in dollars per share) | $ 20.89 | $ 18.55 | $ 16.89 |
Total Intrinsic Value of Restricted Stock Vested | |||
Vested | $ 4,580 | $ 5,624 | $ 2,092 |
Organizational Realignment - Additional Information (Detail) $ in Millions |
3 Months Ended |
---|---|
Dec. 31, 2013
USD ($)
| |
Selling, General and Administrative Expenses | |
Restructuring Cost and Reserve [Line Items] | |
Severance and termination-related expenses | $ 7.1 |
Quarterly Financial Data (Unaudited) - Summary of Quarterly Financial Information (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Sep. 30, 2015 |
Jun. 30, 2015 |
Mar. 31, 2015 |
Dec. 31, 2014 |
Sep. 30, 2014 |
Jun. 30, 2014 |
Mar. 31, 2014 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net service revenues | $ 327,699 | $ 341,575 | $ 337,353 | $ 312,611 | $ 318,739 | $ 313,810 | $ 302,758 | $ 282,024 | $ 1,319,238 | $ 1,217,331 | $ 1,073,728 |
Gross profit | 103,515 | 109,821 | 106,038 | 94,740 | 98,378 | 98,291 | 94,386 | 83,526 | 414,114 | 374,581 | 344,376 |
Income from continuing operations, net of income taxes | 11,901 | 13,545 | 11,593 | 5,785 | 9,061 | 7,995 | 7,953 | 4,389 | 42,824 | 29,398 | 5,294 |
Income (loss) from discontinued operations, net of income taxes | 0 | 0 | 0 | 0 | (116) | 57,023 | 2,750 | 1,860 | 0 | 61,517 | 5,493 |
Net income | $ 11,901 | $ 13,545 | $ 11,593 | $ 5,785 | $ 8,945 | $ 65,018 | $ 10,703 | $ 6,249 | $ 42,824 | $ 90,915 | $ 10,787 |
Earnings per share – basic (in dollars per share) | $ 0.43 | $ 0.49 | $ 0.41 | $ 0.20 | $ 0.30 | $ 2.07 | $ 0.33 | $ 0.19 | $ 1.53 | $ 2.89 | $ 0.32 |
Earnings per share – diluted (in dollars per share) | $ 0.43 | $ 0.48 | $ 0.41 | $ 0.20 | $ 0.30 | $ 2.06 | $ 0.33 | $ 0.19 | $ 1.52 | $ 2.87 | $ 0.32 |
Quarterly Financial Data (Unaudited) - Additional Information (Detail) $ in Millions |
3 Months Ended |
---|---|
Sep. 30, 2014
USD ($)
| |
Quarterly Financial Information Disclosure [Abstract] | |
Gain on sale of discontinued operations, net of transaction costs | $ 94.3 |
Gain on sale of discontinued operations, after tax | 56.1 |
Transaction costs | 11.0 |
Stock-based compensation | $ 2.4 |
Supplemental Cash Flow Information - Details of Supplemental Cash Flow Information (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Cash paid during the period for: | |||
Income taxes, net | $ 25,395 | $ 52,565 | $ 14,789 |
Interest, net | 1,609 | 1,048 | 800 |
Non-Cash Transaction Information: | |||
Shares tendered in payment of exercise price of stock options | 0 | 84 | 0 |
Employee stock purchase plan | 578 | 699 | 613 |
Equipment acquired under capital leases | 1,470 | 313 | 1,929 |
Unsettled repurchases of common stock | 1,012 | 1,425 | 0 |
Contingent consideration for acquisition | $ 0 | $ 477 | $ 0 |
Schedule II - Valuation and Qualifying Accounts and Reserves Supplemental Schedule (Detail) - Accounts Receivable Reserves - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 2,040 | $ 2,028 | $ 2,153 |
Charged to Costs and Expenses (Recovery) | 1,653 | 530 | 382 |
Charged to Other Accounts | 1 | 31 | (54) |
Deductions | (1,573) | (549) | (453) |
Balance at End of Period | $ 2,121 | $ 2,040 | $ 2,028 |