CDI Corp. Reports 2012 First Quarter Results

PHILADELPHIA, May 8, 2012 /PRNewswire/ -- CDI Corp. (NYSE: CDI) (the "Company") today reported financial results for the first quarter ended March 31, 2012.

2012 First Quarter Key Points

  • Revenue of $280.6 million, up 9.3% compared to the prior-year first quarter, with all three segments reporting gains
  • Gross profit margin of 19.8% compared to 21.2% in the same period last year
  • Operating profit of $7.4 million up versus $2.8 million in prior-year quarter, leading to an operating margin of 2.6% versus 1.1% in the year-ago period
  • First quarter net income of $3.8 million, or $0.20 per diluted share

"The Company's strong first quarter performance reflects sales growth in all three business segments, and savings from the restructuring we announced last December contributed to significant operating margin expansion," said CDI President and Chief Executive Officer, Paulett Eberhart. "Going forward, we are focused on the successful execution of our strategic plan, designed to accelerate growth in targeted markets with a more efficient operating platform."

For the first quarter ended March 31, 2012, CDI reported revenue of $280.6 million, an increase of 9.3% compared to $256.6 million for the 2011 first quarter.

For the quarter ended March 31, 2012, CDI reported operating profit of $7.4 million versus $2.8 million in 2011. Net income in the first quarter of 2012 increased to $3.8 million, or $0.20 per diluted share, compared to $0.7 million, or $0.04 per diluted share in the prior-year first quarter.

Business Segment Discussion

On December 8, 2011, the Company announced business model and organizational changes aligned with a new strategic plan. Effective this quarter, the Company began reporting on three operating segments: Global Engineering and Technology Solutions (GETS); Professional Services Staffing (PSS); and Management Recruiters International, Inc. (MRI). The restructuring announced in December has resulted in reduced operating expenses, which favorably impacted operating profit in all three business segments.

The Company's Global Engineering and Technology Solutions segment (GETS) reported a 2.9% increase in first quarter revenue compared to the prior-year first quarter. Increases in the Oil, Gas and Chemical, and Hi-Tech verticals were somewhat offset by continued weakness in the Company's infrastructure business and a slight decline in the Aerospace and Industrial Equipment vertical. Operating profit increased 49.1% to $5.9 million versus the prior-year first quarter driven primarily by lower expenses.

The Company's Professional Services Staffing segment (PSS) reported a 12.2% increase in first quarter revenue versus the prior-year first quarter. PSS growth was driven by increased revenue in all three strategic verticals with particularly strong performance in the Oil, Gas and Chemical vertical. Operating profit more than doubled to $5.8 million versus the prior-year first quarter driven by the increased revenue and lower expenses.

The Company's franchised recruitment segment (MRI) reported a 12.2% increase in first quarter revenue versus the prior-year first quarter due largely to increases in contract staffing revenue. Operating profit increased 27.9% to $2.3 million versus the prior year driven by the increased revenue and lower expenses.

Business Outlook

For the second quarter ending June 30, 2012, CDI anticipates a revenue increase in the range of 5% to 7% compared to the year-ago second quarter. 

Conference Call

At 11:00 a.m. Eastern Time today, Paulett Eberhart, President and CEO, and Bob Larney, Executive Vice President and CFO, will host a conference call to discuss the 2012 first quarter results and business outlook.  The call can be accessed live, via the Internet, at www.cdicorp.com

Company Information
CDI Corp. (NYSE: CDI) is an integrated, market-leading engineering and technology services firm providing differentiated, client-focused solutions in select global industries.  CDI provides Global Engineering and Technology Solutions and Professional Services Staffing through its global business operations in the Americas, EMEA and APAC.  The Company also provides staffing services through its franchised Management Recruiters International, Inc. (MRI) operating unit.  Learn more at www.cdicorp.com.

Caution Concerning Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements that address expectations or projections about the future, including, but not limited to, statements about our strategies for growth and future financial results (such as revenues and cost savings), are forward-looking statements. Some of the forward-looking statements can be identified by words like "anticipates," "believes," "expects," "may," "will," "could," "should," "intends," "plans," "estimates" and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions that are difficult to predict. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of which are beyond our control or are subject to change, actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to: weakness in general economic conditions and levels of capital spending by clients in the industries we serve; weakness or volatility in the financial and capital markets, which may result in the postponement or cancellation of our clients' capital projects or the inability of our clients to pay our fees; the inability to successfully implement our new strategic plan; the termination or non-renewal of a major client contract or project; our ability to maintain or expand our existing bank credit facility on satisfactory terms; credit risks associated with our clients; competitive market pressures; the availability and cost of qualified personnel; our level of success in attracting, training and retaining qualified management personnel and other staff employees; changes in tax laws and other government regulations; the possibility of incurring liability for our business activities, including the activities of our temporary employees; our performance on client contracts; negative outcome of pending and future claims and litigation; and government policies, legislation or judicial decisions adverse to our businesses.  More detailed information about these and other risks and uncertainties may be found in our filings with the SEC, particularly in the "Risk Factors" section of our Form 10-K and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our Form 10-Ks and Form 10-Qs. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. We assume no obligation to update such statements, whether as a result of new information, future events or otherwise, except as required by law. 

 

Financial Tables Follow

 

 

CDI CORP. AND SUBSIDIARIES
(Amounts in thousands, except per share data)
(Unaudited)


Three Months Ended


March 31,

Consolidated Statements of Income:

2012


2011





Revenue

$

280,627


$

256,636

Cost of services

224,942


202,306

Gross profit

55,685


54,330

Operating and administrative expenses

48,296


51,577

Operating profit

7,389


2,753

Other income (expense), net

(38)


(43)

Income before income taxes

7,351


2,710

Income tax expense

3,437


1,970

Net income

3,914


740

Less: Income attributable to the noncontrolling interest

91


46

Net income attributable to CDI

$

3,823


$

694





Earnings per common share:




Basic

$

0.20


$

0.04

Diluted

$

0.20


$

0.04

Basic weighted-average shares

19,200


19,082

Diluted weighted-average shares

19,573


19,327

Selected Balance Sheet Data:

 

March 31,
2012


December 31,
2011





Cash and cash equivalents

$

6,476


$

26,644

Accounts receivable, net

246,340


222,889

Total current assets

270,518


271,730

Total assets

389,067


390,696

Total current liabilities

103,937


109,961

Total CDI shareholders' equity

270,489


266,575


 

Three Months Ended


March 31,

Selected Cash Flow Data:

2012


2011





Net cash (used in) provided by operating activities

$

(14,837)


$

1,979

Depreciation and amortization

2,534


2,745

Capital expenditures

1,259


1,638

Dividends paid to shareholders

2,500


2,484

 


Three Months Ended


March 31,

Selected Earnings and Other Financial Data:

2012


2011





Revenue

$

280,627


$

256,636

Gross profit

$

55,685


$

54,330

Gross profit margin

19.8%


21.2%

Operating and administrative expenses as a percentage of revenue

17.2%


20.1%

Operating profit margin

2.6%


1.1%

Effective income tax rate

46.8%


72.7%

After-tax return on CDI shareholders' equity (1)

6.8%


(3.8)%

Pre-tax return on net assets (2)

10.0%


(0.4)%


 

Three Months Ended


March 31,

Selected Segment Data:

2012


2011





Global Engineering and Technology Solutions ("GETS")




Revenue:




Oil, Gas and Chemicals ("OGC")

$

28,264


$

23,141

Aerospace and Industrial Equipment ("AIE")

16,912


17,691

Hi-Tech

8,065


7,429

Other

28,034


30,736

Total revenue

$

81,275


$

78,997

Gross profit

$

23,247


$

23,945

Gross profit margin

28.6%


30.3%

Operating profit

$

5,938


$

3,982

Operating profit margin

7.3%


5.0%





Professional Services Staffing ("PSS")




Revenue:




Oil, Gas and Chemicals

$

30,994


$

17,219

Aerospace and Industrial Equipment

19,791


14,530

Hi-Tech

74,307


70,766

Other

56,641


59,425

Total revenue

$

181,733


$

161,940

Gross profit

$

24,438


$

22,735

Gross profit margin

13.4%


14.0%

Operating profit

$

5,794


$

2,198

Operating profit margin

3.2%


1.4%





Management Recruiters International ("MRI")




Revenue:




Contract Staffing

$

13,681


$

11,822

Royalties and Franchise Fees

3,938


3,877

Total revenue

$

17,619


$

15,699

Gross profit

$

8,000


$

7,650

Gross profit margin

45.4%


48.7%

Operating profit

$

2,253


$

1,761

Operating profit margin

12.8%


11.2%


 

(1) After-tax return on CDI shareholders' equity is calculated as net income (loss) attributable to CDI divided by the average of the beginning and ending period balances of CDI shareholders' equity for the prior 12 consecutive months.


 

(2) Pre-tax return on net assets is calculated as earnings before income taxes divided by the average of the beginning and ending period net assets for the prior 12 consecutive months. Net assets include total assets minus total liabilities excluding cash and cash equivalents and income tax accounts.

 

 

SOURCE CDI Corp.



RELATED LINKS
http://www.cdicorp.com

More by this Source


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

 

PR Newswire Membership

Fill out a PR Newswire membership form or contact us at (888) 776-0942.

Learn about PR Newswire services

Request more information about PR Newswire products and services or call us at (888) 776-0942.