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Kforce Inc. Message Board

  • solidcitizen123 solidcitizen123 Aug 22, 2003 2:56 PM Flag

    Anyone comment on stock price?

    Doesn't anyone have a stake in this company and therefore have a comment about the rise in the stock price since there appears to be no real reason to have it go up almost 300% in the last three months?

    While other staffing firms are getting whacked around today this stock is up again on increasing volume. Is it smoke and mirrors or something that is different this time?

    Anyone!!!!

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    • Once again, to illustrate my point, this is exactly what the street wants and demands of a publicly held staffing company. The sooner that we all realize that Kforce and every other publicly-held staffing company out there is just a puppet to the demands of "the street" we will be better off. Analysts want:
      - more stabilized revenue, i.e. flex business
      - higher margins
      - lower costs of sales
      - profits, oh and if we can get them through revenue growth that would be nice but at this stage of the economy, it's not necessary. It may be necessary in a few quarters, but right now we just want profits.

      The problem that we all have, and I am one of us, is that we continue to compare the driving forces of a privately-held staffing company vs. a publicly-held company. Or we are comparing a staffing company in good times vs. a staffing company in tough times.

      The Romac and Source of old had things right on the money! Your #1 customer is your internal personnel - period! Provide an exceptional environment, comp pkg, training and culture and as Ray Kinsella heard through the clouds "if you build it they will come." These two companies were built as privately held corporations and were able to place priority where it should be and that is on your people inside the house. When times got tough, you tightened your belt in many areas but rarely did the top 50-75% of the players feel the pinch. And, if they did, the company made up for it in other ways.

      In today's world the top priority isn't you, it isn't me and it isn't even the external customer whether that be IBM, Compaq, Harry's donut shop or whoever a top dollar account might be. Today, the top concern is the analysts and then the shareholders. While this goes along with being a publicly-held company in any business it really doesn't bode well for staffing companies who have no manufactured product, no equipment, no hard assets, no tangible service - it's all about the people. And let's face it when people are your only REAL asset, how easy is it to justify rightly or wrongly (if there is such words) the loss of one of those top players?

      When a machine breaks the cost or hit to your P/L for repair or replacement is quantifiable; as is the loss of a building; a client that has a signed contract for a certain amount of money (we're going to buy $3.3MM worth of goods from you in the next 36 monthes, etc.). Hard dollars can be assigned to these losses. But, when you talk about the loss of people we tend to soften the blow since it is truly unquantifiable and you never have to disclose that to the street because in the end THEY DON'T CARE. If they did, then publicly-held staffing companies would find additional line items on their P/L:
      - Turnover % YTD
      - Turnover % Current Quarter
      - Revenue billed prior year from lost recruiters
      - Revenue billed current year from lost recruiters
      - % of local operations revenue generated YTD from lost recruiters
      - % of overall operations revenue generated YTD from lost recruiters.

      Only with this type of disclosure would people begin to understand how important the guy or girl at the desk truly is in our business. In the end, Bill, Dave and anyone else that is charged with mastering a publicy-held companies ship is at the mercy of the winds or should we say the hot-air of those damn analysts. I'm off the soap box for a while.

    • Here is my hypothesis:

      This company took a HUGE risk when they named Bill as the COO/CFO. Putting a pure numbers guy in the operational driver's seat was a very large risk by all accounts. What credibility that the company and the senior leadership still maintained with the street would be ultimately lost if this proved to be a losing move.

      I have to believe that one of the things that was part of the deal was to paint as bad of a picture as possible for Q4 2002 and FY 2002 so as to make the picture look brighter in the coming year. It's sales 101 - underpromise and over deliver.

      I have to believe that Bill had a little "nest egg" set aside somewhere in the closet in Ybor and short of him kicking some pennies in out of his pocket this guy is going to do everything up to and including moving heaven and earth to hit and/or surpass the street's expectations for each quarter and the entire year.

      Dave placed 100% of his faith and committment behind Bill and he (Bill) is not going to take that too lightly. Say what you want about the guy and the company, but they are delivering and I am not complaining. I bought in at $1.97 sold at $4.55, bought back in at $3.25 and sold earlier this week at just over $7.00. If it drops back down to a low six or a high five, I will again buy back in and hold till it hits the eight to 10 mark by year's end.

      Kforce is not perfect they still have some weaknesses and shortcomings that need to be addressed. But, please point out one company in this or any industry that is hitting fundamentally on each and every cylinder? What it boils down to is that they are hitting the kind of numbers that the street is liking and in a publicly-held company regardless of whether or not you or I agree with it, that truly is the name of the game. Whether that growth is in top-line revenue or bottom-line cost cutting all that the street cares about is the end result and that is the name of the game and Sanders as much as anyone, knows how to play that game. And for that, I say good job!

      By the way, I am not a current employee of the company so hold back on the "Tampa flunky" comments or "Corporate Marketing whacko" editorials. I am an ex-employee who still believes that the company is doing some things fundamentally sound and still believe there are some solid contributors in the house. Whatever it is that has changed lately, it seems to be working and all I can say as an outsider now is keep doing whatever it is.

      • 2 Replies to usedtobewiththeforce
      • I promise to tell every one of the people who were thrown to the curb over the last several months you made a profit on a non commodity stock.

        The street only cares about end results? Ok, where are the results? The company has not made money in 2 years, I am not seeing the results you are talking about in your post. Revenue is down, cash flow is up due soley on cuts and turnover is higher than ever, last time I looked the street frowned on these complex issues. The street does care about whether a company is growing by sales and revenue and the street does care if a company is growing so to speak by cutting people and expenses.

        Kforce took a risk putting Bill over operations? How about the company could only afford one high priced CFO or COO so Larry drew the short straw and Bill was awarded victor. And where is the nest egg you speak about in your post? I have looked all over the financials and I do not see a nest egg and if the nest egg is not being reported, well that would not be a good way of conducting business now would it.

        You say the company is doing some good things, what?

        The company has cut heads and expenses which will dilute their ability to do business when the market picks up. In some markets, Kforce is only chasing light industrial, no IT or Finance anymore. The company is being run both operationally and financially by the same person which in the history of business never works. I would have to agree and say a HUGE risk is obvious, because no other company really has prospered by putting one person in charge.

        I mean for real, how much money are you making anyway on a non commodity stock? Next to nothing so before you commend your great business move remember the people or families who took the losses in personal income so you could take a small but humble gain. The cuts, you mention, have a direct effect on the bloated stock price because if the cuts were not present, imagine the numbers which would have been reported. Though in your world, I wonder to myself if the street would have cared?

      • nice post.
        Arctic.

 
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