EXECUTIVE SUMMARY The following is an executive summary of what Kforce believes are highlights as of and for the three months endedMarch 31, 2021 , which should be considered in the context of the additional discussions herein and in conjunction with the unaudited condensed consolidated financial statements and notes thereto. •Revenue for the three months endedMarch 31, 2021 , increased 8.4%, to$363.2 million from$335.2 million in the comparable period in 2020. Revenue increased 4.8% and 22.3% for Tech and FA, respectively. •Flex revenue for the three months endedMarch 31, 2021 , increased 10.2% on a billing day basis, to$353.8 million from$326.1 million in the comparable period in 2020. Flex revenue increased 6.3% and 26.4%, on a billing day basis for Tech and FA, respectively, on a year-over-year basis. •Revenues from contracts we secured to support government-sponsored COVID-19 related initiatives (the "COVID-19 Business") was$24.0 million for the three months endedMarch 31, 2021 , which benefited our FA Flex business. Excluding revenues from the COVID- 19 Business, our FA Flex business would have declined 12.8% in 2021 on a year-over-year basis. •Direct Hire revenue for the three months endedMarch 31, 2021 , increased 3.1% to$9.4 million from$9.1 million in the comparable period in 2020 . •Gross profit margin for the three months endedMarch 31, 2021 , decreased 100 basis points to 27.2%. Flex gross profit margin for the three months endedMarch 31, 2021 , decreased 100 basis points to 25.2% from 26.2% in the comparable period in 2020. Flex gross profit margin decreased 70 basis points for Tech due primarily to spread compression as a result of business mix but also a result of higher health insurance and payroll tax costs and decreased 200 basis points for FA primarily as a result of the COVID-19 Business carrying a lower Flex gross profit margin. •SG&A as a percentage of revenue for the three months endedMarch 31, 2021 , decreased to 21.5% from 23.6% in the comparable period in 2020 due to leverage gained from our revenue growth, associate productivity improvements, reductions in certain areas such as travel and office related expenses given ongoing travel restrictions and a decline in our credit expense. •Income from continuing operations for the three months endedMarch 31, 2021 , increased 45.6% to$13.3 million , or$0.62 per share, from$9.1 million , or$0.42 per share, in the comparable period in 2020. •The Firm returned$21.0 million of capital to our shareholders in the form of open market repurchases totaling$16.2 million and quarterly dividends totaling$4.8 million during the year endingMarch 31, 2021 . We have$68.4 million under our current Board authorization. •Cash provided by operating activities was$22.4 million during the three months endedMarch 31, 2021 , as compared to$3.0 million for the three months endedMarch 31, 2020 . Our operating cash flows were positively impacted by improved profitability, solid management of our working capital and payment delays by our clients at the onset of the pandemic in 2020 that impacted operating cash flows in the first quarter of 2020. •Cash and cash equivalents, net of long-term debt of$100.0 million , was$1.3 million as ofMarch 31, 2021 . 16
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RESULTS OF OPERATIONS Business Overview Kforce provides professional staffing services and solutions to our clients on both a temporary ("Flex") and permanent ("Direct Hire") basis through our Tech and FA segments. We operate through our corporate headquarters inTampa, Florida and our various field offices located throughoutthe United States (U.S. ). As ofMarch 31, 2021 , Kforce employed approximately 2,000 associates, including approximately 1,300 supporting the revenue-generating aspects of our business and approximately 700 supporting the revenue-enabling aspects. We also had approximately 12,100 consultants on assignment providing flexible staffing services and solutions to our clients. Kforce serves clients across many industries and geographies as well as organizations of all sizes, with a particular focus on Fortune 1000 and other large companies. We believe that our portfolio of service offerings and client portfolio are key contributors to our performance during the COVID-19 pandemic and long-term financial stability. InDecember 2020 and early 2021, theU.S. Food and Drug Administration authorized the distribution and administration of certain vaccines for the prevention of COVID-19 in theU.S. The availability of COVID-19 vaccines, economic stimulus measures initiated in theU.S. , among other factors, has significantly lifted the prospects of economic growth in theU.S. While the level of vaccinations and potential variants of COVID-19 are difficult to predict and could negatively impact our business, growth in our business as accelerated over the last several quarters. From an economic standpoint, total and temporary employment figures and trends have historically been important indicators of staffing demand. Based on information published by theBureau of Labor Statistics and Staffing Industry Analysts ("SIA"), these figures and trends have been trending positively since the end of the third quarter of 2020. While uncertainty still remains around the future trends and impact on staffing demand, the penetration rate (the percentage of temporary staffing to total employment) remained at 1.9% and the unemployment rate decreased again to 6.0% inMarch 2021 , down from 6.2% inDecember 2020 . In the latestU.S. staffing industry forecast published by SIA inApril 2021 , the technology temporary staffing industry and finance and accounting temporary staffing industry are estimated to grow by 9% and 14%, respectively, in 2021, and by 6% and 5%, respectively, in 2022. In addition, SIA noted that the domestic technology staffing market became the largest market segment in 2020, with spend of nearly$31 billion , and overtaking industrial staffing for the first time. We were successful delivering strong results in 2020 with our largest business, Technology, only being down 1% for the full year 2020. Our client relationships and capability to source and deliver resources at scale significantly contributed to us securing the COVID-19 Business during 2020. While trends related to our COVID-19 Business are difficult to predict, it contributed$24.0 million in FA Flex revenue for the three months endedMarch 31, 2021 and is expected to continue into the second quarter of 2021. While the business climate related to this economic and health crisis, along with related governmental legislation (including that which is aimed at stimulating the economy) is still extremely fluid, we believe that we are very well positioned to continue capturing additional market share in our Technology business and delivering strong operating results to our shareholders. We have conducted multiple employee satisfaction surveys during this pandemic and the results indicate that our associates have embraced the ingenuity required to work remotely and have been successful in establishing new, productive routines. We continue to make great progress in our "Kforce Reimagined" initiative that was started in 2020, which is an effort to position Kforce to provide a more flexible work environment for our associates. This initiative involves efforts to streamline our real estate footprint and make investments in technology and other tools necessary to provide a seamless in-office and remote experience. We believe that the culmination of these efforts will provide significant contributions to improving productivity and profitability. 17
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Operating Results - Three Months EndedMarch 31, 2021 and 2020 The following table presents certain items in our Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income as a percentage of revenue: Three Months Ended March 31, 2021 2020 Revenue by segment: Tech 77.0 % 79.6 % FA 23.0 20.4 Total Revenue 100.0 % 100.0 % Revenue by type: Flex 97.4 % 97.3 % Direct Hire 2.6 2.7 Total Revenue 100.0 % 100.0 % Gross profit 27.2 % 28.2 % Selling, general and administrative expenses 21.5 % 23.6 % Depreciation and amortization 0.3 % 0.4 % Income from operations 5.4 % 4.2 % Income from operations, before income taxes 5.0 % 3.7 % Net income 3.7 % 2.7 %
Revenue. The following table presents revenue by type for each segment and the percentage change from the prior period (in thousands):
Three Months Ended March 31, Increase 2021 (Decrease) 2020 Tech Flex revenue$ 274,784 4.7 %$ 262,569 Direct Hire revenue 4,776 13.3 % 4,215 Total Tech revenue$ 279,560 4.8 %$ 266,784 FA Flex revenue$ 79,063 24.4 %$ 63,540 Direct Hire revenue 4,602 (5.8) % 4,884 Total FA revenue$ 83,665 22.3 %$ 68,424 Total Flex revenue$ 353,847 8.5 %$ 326,109 Total Direct Hire revenue 9,378 3.1 % 9,099 Total Revenue$ 363,225 8.4 %$ 335,208 18
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Our quarterly operating results are affected by the number of billing days in a quarter. The following table presents the year-over-year revenue growth rates, on a billing day basis, for the last five quarters: Year-Over-Year Revenue
Growth Rates
(Per Billing Day) Q1 2021 Q4 2020 Q3
2020 Q2 2020 Q1 2020
Billing Days 63 62 64 64 64 Tech Flex 6.3 % 0.8 % (4.2) % (3.0) % 3.3 % FA Flex 26.4 % 26.0 % 51.6 % 28.7 % (3.4) % Total Flex 10.2 % 5.9 % 6.9 % 3.4 % 1.9 % Flex Revenue. The key drivers of Flex revenue are the number of consultants on assignment, billable hours, the bill rate per hour and, to a limited extent, the amount of billable expenses incurred by Kforce. Flex revenue for Tech increased 6.3% on a billing day basis, during the three months endedMarch 31, 2021 , as compared to the same period in 2020. Flex revenue in our Tech business improved 3.1%, on billing day basis sequentially in the first quarter of 2021, which is the strongest sequential performance that we have on record. Importantly, the growth we experienced during the first quarter of 2021 accelerated as the quarter progressed. The growth we are experiencing in Tech is being driven by higher levels of consultants on assignment as well as an increase in average bill rates, which increased 1.3% sequentially and 4.5% year-over-year in the first quarter of 2021. While the overall economy is still feeling the effects of the COVID-19 pandemic, our Tech Flex business displayed a high level of resiliency during the COVID-19 pandemic with Tech Flex revenues only being down approximately 1% for the full year 2020. We have made significant progress in growing our technology consultants on assignment sinceJune 2020 . Given the acceleration we are experiencing in Tech Flex growth, we expect revenues in the second quarter of 2021 to grow in the mid to high teens on a year-over-year billing day basis. We believe the secular drivers of demand in technology have only strengthened as companies continue to assess their digital transformation efforts and capabilities to conduct business in a more virtual operating environment. Our FA segment experienced an increase in Flex revenue of 24.4% during the three months endedMarch 31, 2021 , as compared to the same period in 2020, primarily driven by the COVID-19 Business, which contributed approximately$24.0 million in revenue during the three months endedMarch 31, 2021 . This positively impacted FA Flex revenue growth rates by 37.8% for the three months endedMarch 31, 2021 . As we move into the second quarter of 2021, we expect overall revenues in the FA business to remain relatively stable year-over-year as we continue to migrate our FA business towards highly-skilled roles that are less susceptible to technological change, location and automation. Future forecasts and predictions about the demand for temporary staffing and solutions are inherently uncertain due to the unknown and continued impacts of the current macro-economic environment as a result of the COVID-19 economic and health crisis and political uncertainty, and any forward-looking information could fluctuate materially. The following table presents the key drivers for the change in Flex revenue by segment over the prior period (in thousands): Three Months Ended March 31, 2021 vs. March 31, 2020 Tech FA Key Drivers - Increase (Decrease) Volume - hours billed$ 1,363 $ 27,264 Bill rate 11,686 (11,603) Billable expenses (834) (138) Total change in Flex revenue$ 12,215 $ 15,523 19
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The following table presents total Flex hours billed by segment and percentage change over the prior period (in thousands):
Three Months Ended March 31, Increase 2021 (Decrease) 2020 Tech 3,428 0.5 % 3,410 FA 2,376 43.0 % 1,662 Total Flex hours billed 5,804 14.4 % 5,072 For the three months endedMarch 31, 2021 , FA Flex hours billed included 849 thousand hours from the COVID-19 Business. Direct Hire Revenue. The key drivers of Direct Hire revenue are the number of placements and the associated placement fee. Direct Hire revenue also includes conversion revenue, which may occur when a consultant initially assigned to a client on a temporary basis is later converted to a permanent placement for a fee. Direct Hire revenue increased 3.1% during the three months endedMarch 31, 2021 , as compared to the same period in 2020, primarily driven by a significant increase in the average placement fee during the first quarter of 2021. As we look to the second quarter, we expect Direct Hire revenue could approximate first quarter levels. The following table presents the key drivers for the change in Direct Hire revenue by segment over the prior period (in thousands): Three Months Ended March 31, 2021 vs. March 31, 2020 Tech FA Key Drivers - Increase (Decrease) Volume - number of placements$ 21 $ (973) Placement fee 540 691 Total change in Direct Hire revenue$ 561 $ (282)
The following table presents the total number of placements by segment and percentage change over the prior period:
Three Months Ended March 31, Increase 2021 (Decrease) 2020 Tech 244 0.4 % 243 FA 294 (19.9) % 367 Total number of placements 538 (11.8) % 610
The following table presents the average placement fee by segment and percentage change over the prior period:
Three Months Ended March 31, Increase 2021 (Decrease) 2020 Tech$ 19,559 12.8 %$ 17,347 FA$ 15,643 17.7 %$ 13,294 Total average placement fee$ 17,419 16.8 %$ 14,908 Gross Profit. Gross profit is calculated by deducting direct costs (primarily consultant compensation, payroll taxes, payroll-related insurance and certain fringe benefits, as well as independent contractor costs) from total revenue. There are no consultant payroll costs associated with Direct Hire placements, thus all Direct Hire revenue increases gross profit by the full amount of the placement fee. 20
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The following table presents the gross profit percentage (gross profit as a percentage of total revenue) by segment and percentage change over the prior period: Three Months Ended March 31, Increase 2021 (Decrease) 2020 Tech 26.6 % (2.2) % 27.2 % FA 29.2 % (9.6) % 32.3 % Total gross profit percentage 27.2 % (3.5) % 28.2 % The change in total gross profit percentage for the three months endedMarch 31, 2021 , as compared to the same period in 2020, is primarily driven by a 100 basis point decrease in our Flex gross profit margin driven by spread compression, higher healthcare costs, higher payroll taxes and lower margins from the COVID-19 Business. A lower mix of Direct Hire revenues also contributed to the decline. Flex gross profit percentage (Flex gross profit as a percentage of Flex revenue) provides management with helpful insight into the other drivers of total gross profit percentage driven by our Flex business such as changes in the spread between the consultants' bill rate and pay rate, changes in payroll tax rates or benefits costs, as well as the impact of billable expenses, which provide no profit margin. The following table presents the Flex gross profit percentage by segment and percentage change over the prior period: Three Months Ended March 31, Increase 2021 (Decrease) 2020 Tech 25.3 % (2.7) % 26.0 % FA 25.0 % (7.4) % 27.0 % Total Flex gross profit percentage 25.2 % (3.8) % 26.2 % Overall, our Flex gross profit percentage decreased slightly for the three months endedMarch 31, 2021 , as compared to 2020, although there were notable fluctuations within our segments. •Tech Flex gross profit margin decreased 70 basis points for the three months endedMarch 31, 2021 , as compared to the same period in 2020, primarily due to spread compression as a result of changes in business mix, higher healthcare costs and higher payroll taxes. •FA Flex gross profit margin decreased 200 basis points for the three months endedMarch 31, 2021 , as compared to the same periods in 2020, primarily due to spread compression and higher healthcare costs. The decrease was also impacted by the COVID-19 Business, which contributed a lower gross profit margin than the rest of the FA portfolio. For the three months endedMarch 31, 2021 , the estimated Flex gross profit margin for the COVID-19 Business was 23.3%, which is roughly 250 basis points lower than the remaining FA Flex business. The following table presents the key drivers for the change in Flex gross profit by segment over the prior period (in thousands): Three Months Ended March 31, 2021 vs. March 31, 2020 Tech FA Key Drivers - Increase (Decrease) Revenue impact$ 3,174 $ 4,199 Profitability impact (1,909) (1,585) Total change in Flex gross profit $
1,265
SG&A Expenses. Total compensation, commissions, payroll taxes and benefit costs as a percentage of SG&A represented 85.7% for the three months endedMarch 31, 2021 , as compared to 81.3% for the comparable period in 2020. We believe this increase mostly results from the fact that in the first quarter of 2020, we had lower bonus accruals due to the uncertainty of the potential impact of the pandemic on our business. Commissions and other bonus incentives for our revenue-generating talent are variable costs driven primarily by revenue and gross profit levels. Therefore, as gross profit levels change, these expenses would also generally be anticipated to change, but remain relatively consistent as a percentage of revenue. The following table presents components of SG&A as a percentage of revenue (in thousands): 21
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Table of Contents 2021 % of Revenue 2020 % of Revenue Three Months EndedMarch 31 , Compensation, commissions, payroll taxes and benefits costs$ 66,874 18.4 %$ 64,367 19.2 % Other (1) 11,155 3.1 % 14,849 4.4 % Total SG&A$ 78,029 21.5 %$ 79,216 23.6 % (1) Includes credit loss expense, lease expense, professional fees, travel, telephone, computer and certain other expenses. SG&A as a percentage of revenue decreased 210 basis points for the three months endedMarch 31, 2021 , as compared to the same periods in 2020. The decrease is primarily related to leverage from our revenue growth, continued improvements in associate productivity, reductions in certain areas such as travel and office related expenses, declines in credit expense due to larger reserves taken in the first quarter of 2020 at the onset of the pandemic given inherent risk and our efforts to manage spend. These decreases were partially offset by an increase in professional fess driven by our investments in information technology initiatives and increased legal costs. The Firm continues to focus on generating increased operating leverage by improved productivity of our associates and continuing to exercise solid expense discipline. Depreciation and Amortization. The following table presents depreciation and amortization expense and percentage change over the prior period by major category (in thousands): Three Months Ended March 31, Increase 2021 (Decrease) 2020 Fixed asset depreciation (includes finance leases)$ 810 (31.1) %$ 1,176 Capitalized software amortization 392 80.6 % 217 Total Depreciation and amortization$ 1,202 (13.7) %$ 1,393 Other Expense, Net. Other expense, net for the three months endedMarch 31, 2021 and 2020 was$1.3 million and$1.4 million , respectively. Other expense, net includes interest expense related to outstanding borrowings under our credit facility, which is partially offset by the interest income on cash held in government money market funds. During the three months endedMarch 31, 2021 , Other expense, net also includes our proportionate share of the loss from WorkLLama, our equity method investment, of$0.5 million . The impact of the COVID-19 economic and health crisis remains highly uncertain. Therefore, it could have a material adverse impact on the fair value of our equity method investment in WorkLLama and if the fair value falls below the book value of the equity method investment, we would be required to evaluate whether an other-than-temporary impairment has occurred. Income Tax Expense. Income tax expense as a percentage of income from continuing operations, before income taxes (our "effective tax rate" from continuing operations) for the three months endedMarch 31, 2021 and 2020 was 27.0% and 27.3%, respectively. Non-GAAP Financial Measures Free Cash Flow. "Free Cash Flow," a non-GAAP financial measure, is defined by Kforce as net cash provided by operating activities determined in accordance with GAAP, less capital expenditures. Management believes this provides an additional way of viewing our liquidity that, when viewed with our GAAP results, provides a more complete understanding of factors and trends affecting our cash flows and is useful information to investors as it provides a measure of the amount of cash generated from the business that can be used for strategic opportunities including investing in our business, making acquisitions, repurchasing common stock or paying dividends. Free Cash Flow is limited, however, because it does not represent the residual cash flow available for discretionary expenditures. Therefore, we believe it is important to view Free Cash Flow as a complement to (but not a replacement of) our Unaudited Condensed Consolidated Statements of Cash Flows. 22
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The following table presents Free Cash Flow (in thousands):
Three Months Ended March 31, 2021 2020 Net cash provided by operating activities$ 22,426 $ 3,005 Capital expenditures (1,350) (1,971) Free cash flow 21,076 1,034 Change in debt - 35,000 Repurchases of common stock (16,313) (19,470) Cash dividends (4,786) (4,293) Equity method investment (2,000) - Other (122) (328) Change in cash and cash equivalents$ (2,145)
Adjusted EBITDA. "Adjusted EBITDA", a non-GAAP financial measure, is defined by Kforce as net income before depreciation and amortization, stock-based compensation expense, interest expense, net, income tax expense and loss from equity method investment. Adjusted EBITDA should not be considered a measure of financial performance under GAAP. Items excluded from Adjusted EBITDA are significant components in understanding and assessing our past and future financial performance, and this presentation should not be construed as an inference by us that our future results will be unaffected by those items excluded from Adjusted EBITDA. Adjusted EBITDA is a key measure used by management to assess our operations including our ability to generate cash flows and our ability to repay our debt obligations and management believes it provides a good metric of our core profitability in comparing our performance to our competitors, as well as our performance over different time periods. Consequently, management believes it is useful information to investors. The measure should not be considered in isolation or as an alternative to net income, cash flows or other financial statement information presented in the consolidated financial statements as indicators of financial performance or liquidity. The measure is not determined in accordance with GAAP and is thus susceptible to varying calculations. Also, Adjusted EBITDA, as presented, may not be comparable to similarly titled measures of other companies. In addition, although we excluded amortization of stock-based compensation expense because it is a non-cash expense, we expect to continue to incur stock-based compensation in the future and the associated stock issued may result in an increase in our outstanding shares of stock, which may result in the dilution of our shareholder ownership interest. We suggest that you evaluate these items and the potential risks of excluding such items when analyzing our financial position. The following table presents a reconciliation of Adjusted EBITDA to net income (in thousands): 2021 2020 Three Months EndedMarch 31 , Net income$ 13,261 $ 9,106 Depreciation and amortization 1,202 1,393
Stock-based compensation expense 3,403 2,896 Interest expense, net
797 791 Income tax expense 4,905 3,428 Loss from equity method investment 491 595 Adjusted EBITDA$ 24,059 $ 18,209 23
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LIQUIDITY AND CAPITAL RESOURCES To meet our capital and liquidity requirements, we primarily rely on our operating cash flow as well as borrowings under our credit facility. AtMarch 31, 2021 andDecember 31, 2020 , we had$101.3 million and$103.5 million in cash and cash equivalents, respectively, which consisted primarily of government money market funds. At bothMarch 31, 2021 andDecember 31, 2020 , we had$100.0 million outstanding under our credit facility, and$198.5 million available under our credit facility. The amounts outstanding under our credit facility were hedged by interest rate swaps, as discussed below. Cash Flows We are principally focused on achieving an appropriate balance of cash flow across several areas of opportunity such as: generating positive cash flow from operating activities; returning capital to our shareholders through our quarterly dividends and common stock repurchase program; maintaining appropriate leverage under our credit facility; investing in our infrastructure to allow sustainable growth via capital expenditures; selectively pursuing acquisition opportunities; and maintaining sufficient liquidity for operations. Cash provided by operating activities was$22.4 million during the three months endedMarch 31, 2021 , as compared to$3.0 million during the three months endedMarch 31, 2020 . Our largest source of operating cash flows is the collection of trade receivables, and our largest use of operating cash flows is the payment of our associate and consultant compensation. The increase was primarily driven by the continued positive performance of our accounts receivable portfolio and profitable revenue growth. Cash used in investing activities was$3.4 million and$2.0 million , during the three months endedMarch 31, 2021 andMarch 31, 2020 , respectively. Cash used in investing activities during the three months endedMarch 31, 2021 includes capital expenditures and payments for capital invested in WorkLLama. We expect to continue selectively investing in our infrastructure, primarily focusing on implementing new and upgrading existing technologies that will provide the most benefit. Assuming that the sale of our corporate headquarters closes in the second quarter, we expect to receive net cash proceeds of approximately$23.0 million . Refer to Note M - "Subsequent Events" in the Notes to Unaudited Condensed Consolidated Financial Statements, included in this report on Form 10-Q, for a complete discussion of the sale of our corporate headquarters. Cash used in financing activities was$21.2 million during the three months endedMarch 31, 2021 , as compared to cash provided by financing activities of$10.9 million during the three months endedMarch 31, 2020 . The change was primarily driven by the$35.0 million draw down on our credit facility during the three months endedMarch 31, 2020 , partially offset by a decrease in cash used for repurchases of common stock. The following table presents the cash flow impact of the common stock repurchase activity (in thousands): Three Months EndedMarch 31, 2021 2020 Open market repurchases $
16,190
123 88 Total cash flow impact of common stock repurchases $
16,313
During the three months endedMarch 31, 2021 and 2020, Kforce declared and paid quarterly dividends of$4.8 million ($0.23 per share) and$4.3 million ($0.20 per share), respectively. The declaration, payment and amount of future dividends are discretionary and will be subject to determination by our Board each quarter following its review of, among other things, the Firm's current and expected financial performance as well as the ability to pay dividends under applicable law. We believe that existing cash and cash equivalents, cash flow from operations and available borrowings under our credit facility will be adequate to meet the capital expenditure and working capital requirements of our operations for at least the next 12 months. However, a material deterioration in the economic environment or market conditions, among other things, could adversely affect operating results and liquidity, as well as the ability of our lenders to fund borrowings. Actual results could also differ materially from these indicated as a result of a number of factors, including the use of currently available resources for capital expenditures, investments, additional common stock repurchases or dividends. Credit Facility OnMay 25, 2017 , the Firm entered into a credit agreement withWells Fargo Bank, National Association , as administrative agent,Wells Fargo Securities, LLC , as lead arranger and bookrunner,Bank of America, N.A ., as syndication agent,Regions Bank andBMO Harris Bank, N.A ., as co-documentation agents, and the lenders referred to therein (the "Credit Facility"). The maturity date of the Credit Facility isMay 25, 2022 . Borrowings under the Credit Facility are secured by substantially all of the tangible and intangible assets of the Firm, excluding the Firm's corporate headquarters and certain other designated collateral. As ofMarch 31, 2021 ,$100.0 million was outstanding and$198.5 million was available on our Credit Facility, subject to certain covenants, and as ofDecember 31, 2020 ,$100.0 million was outstanding. As ofMarch 31, 2021 , we are in compliance with our credit facility covenants as described in the 2020 Annual Report on Form 10-K and currently expect that we will be able to maintain compliance with these covenants. However, we cannot predict the impact from the COVID-19 pandemic, which could have a material adverse effect on our results of operations that could result in an event of default. 24
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Kforce has two forward-starting interest rate swap agreements, which have been designated as cash flow hedges, to mitigate the risk of rising interest rates. Refer to Note K - "Derivative Instruments and Hedging Activity" in the Notes to Unaudited Condensed Consolidated Financial Statements, included in this report on Form 10-Q, for a complete discussion of our interest rate swaps. AtMarch 31, 2021 andDecember 31, 2020 , the fair value of our interest rate swaps were a liability of$0.5 million and$1.8 million , respectively. Stock Repurchases InMarch 2020 , the Board approved an increase in our stock repurchase authorization to an aggregate total of$100.0 million . During the three months endedMarch 31, 2021 , Kforce repurchased approximately 0.3 million shares of common stock on the open market at a total cost of approximately$16.2 million and$68.4 million remained available for further repurchases under the Board-authorized common stock repurchase program atMarch 31, 2021 . Contractual Obligations and Commitments Other than the changes described elsewhere in this Quarterly Report, there have been no material changes during the period covered by this report on Form 10-Q to our contractual obligations previously disclosed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in our 2020 Annual Report on Form 10-K. CRITICAL ACCOUNTING ESTIMATES Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of our unaudited condensed consolidated financial statements, we are required to make assumptions and estimates about future events, and apply judgments that affect the reported amount of assets, liabilities, revenues, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our unaudited condensed consolidated financial statements are prepared. On a regular basis, management reviews the accounting policies, estimates, assumptions and judgments to ensure that our unaudited condensed consolidated financial statements are presented fairly and in accordance with GAAP. However, because future events and their effects cannot be determined with certainty, actual results could differ from our assumptions and estimates, and such differences could be material. Refer to Note A - "Summary of Significant Accounting Policies" in the Notes to Consolidated Financial Statements and "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in our 2020 Annual Report on Form 10-K for a more detailed discussion of our significant accounting policies and critical accounting estimates. NEW ACCOUNTING STANDARDS Refer to Note A - "Summary of Significant Accounting Policies" in the Notes to Unaudited Condensed Consolidated Financial Statements, included in Item 1. Financial Statements of this report for a discussion of new accounting standards.
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