CDI Corp. Reports Stronger Third Quarter 2002 Earnings
Philadelphia, Pa. (October 23, 2002) - CDI Corp. (NYSE: CDI) today reported earnings for the third quarter of 2002.
The company reported earnings per diluted share of $0.27 on an after-tax basis, excluding pre-tax charges of approximately $9.8 million ($0.30 per share on an after-tax basis), which reflect restructuring charges and a loss on sale of certain company-owned offices of Management Recruiters International. Including these items, the company reported a net loss from continuing operations of $0.03 per diluted share.
Consolidated revenues from continuing operations for the third quarter of 2002 were $287.8 million, compared with $298.4 million in the second quarter of 2002. Excluding revenue related to exited accounts, consolidated revenues were essentially flat in comparison with the second quarter of 2002.
"We expect this quarter to mark the end of a year-long series of restructuring initiatives, assuming no marked deterioration of the national economy," said President and Chief Executive Officer Roger H. Ballou. "CDI is financially strong and in an outstanding position to create profitable growth, particularly once the economy begins to rebound.
"Looking ahead, the current business climate gives us no reason to change our conservative outlook," said Ballou. "We expect our profit performance in the fourth quarter of 2002 to be generally consistent with the third quarter before charges, and our current expectation is to have minimal charges. Our business plan is not predicated on material economic improvement. We will achieve our financial targets through disciplined cost control and strict adherence to our strategic growth plan."
Conference Call/Webcast
CDI Corp. will conduct a conference call at 11 a.m. (Eastern) today to discuss this announcement. The conference call will be broadcast live over the Internet and can be accessed by any interested party at www.cdicorp.com. An online replay will be available at www.cdicorp.com for 14 days after the call.
Company Information
CDI Corp. (NYSE: CDI) is a global provider of engineering and information technology project delivery and specialized staffing. Subsidiaries include Todays Staffing and Management Recruiters International, the world's largest executive search and recruitment organization. CDI and its franchisees operate more than 1,400 offices in 27 countries. Visit CDI on the web at www.cdicorp.com.
Safe Harbor Statement
Certain information in this news release contains forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Certain forward-looking statements can be identified by the use of forward-looking terminology such as "believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans," "estimates," or "anticipates" or the negative thereof or other comparable terminology, or by discussions of strategy, plans or intentions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include risks and uncertainties such as competitive market pressures, material changes in demand from larger customers, availability of labor, the company's performance on contracts, changes in customers' attitudes towards outsourcing, government policies or judicial decisions adverse to the staffing industry, changes in economic conditions, and delays or unexpected costs associated with its restructuring program. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The company assumes no obligation to update such information.
For more information, contact:
Barbara Leary
Vice President, Corporate Communications
Tel: (215) 636-1133
E-mail: barbara.leary@cdicorp.com
Greg Cowan
Executive Vice President, Chief Financial Officer
Tel: (215) 636-1207
E-mail: greg.cowan@cdicorp.com
CDI CORP.
Financial Summary
($000s except per share)
|
Summary of Earnings |
Three months ended September 30, |
Nine months ended September 30, |
|
|
2002 |
2001 |
2002 |
2001 |
|
Revenues |
$287,788 |
$351,756 |
$899,337 |
$1,129,069 |
|
|
|
|
|
|
|
Gross
profit |
76,819 |
87,142 |
234,069 |
289,371 |
|
|
|
|
|
|
|
Operating (loss)/profit |
(1,165) |
(2,496) |
(3,176) |
6,010 |
|
Interest (income)/expense |
(111) |
867 |
17 |
2,729 |
|
(Loss)/earningsbefore income taxes and minority interests |
(1,054) |
(3,363) |
(3,193) |
3,281 |
|
Income tax benefit/(expense) |
457 |
1,273 |
1,248 |
(1,280) |
|
(Loss)/earnings from continuing operations before minority interests |
(597) |
(2,090) |
(1,945) |
2,001 |
|
Minority
interests |
-- |
100 |
135 |
344 |
|
(Loss)/earnings from continuing operations |
(597) |
(2,190) |
(2,080) |
1,657 |
|
Discontinued operations (net of tax) |
27 |
220 |
425 |
1,107 |
|
Change in accounting for goodwill, net of tax |
-- |
-- |
(13,968) |
-- |
|
Net (loss)/earnings |
$(570) |
$(1,970) |
$(15,623) |
$2,764 |
|
Per diluted share |
|
|
|
|
|
(Loss)/earnings from continuing operations |
$(0.03) |
$(0.11) |
$(0.11) |
$0.09 |
|
Discontinued operations (net of tax) |
-- |
$0.01 |
$0.02 |
$0.06 |
|
Change in accounting for goodwill, net of tax |
-- |
-- |
$(0.73) |
-- |
|
Net (loss)/earnings |
($0.03) |
$(0.10) |
$(0.81) |
$0.14 |
|
Diluted shares (000) |
19,248 |
19,080 |
19,182 |
19,193 |
|
|
|
|
|
|
|
Segment Data |
|
|
|
|
|
Revenues |
|
|
|
|
|
Professional
Services |
$153,203 |
$197,107 |
$481,057 |
$626,726 |
|
Project
Management |
76,203 |
85,421 |
235,934 |
269,233 |
|
Todays
Staffing |
35,735 |
45,388 |
114,547 |
151,400 |
|
Management
Recruiters |
22,647 |
23,840 |
67,799 |
81,710 |
|
|
|
|
|
|
|
Operating (loss)/profit |
|
|
|
|
|
Professional
Services |
$1,992 |
$1,650 |
$2,892 |
$7,280 |
|
Project
Management |
4,660 |
(1,851) |
4,669 |
(1,117) |
|
Todays
Staffing |
(2,939) |
(492) |
(720) |
2,882 |
|
Management
Recruiters |
(169) |
3,089 |
4,058 |
13,482 |
|
Corporate
Expenses |
(4,709) |
(4,892) |
(14,075) |
(16,517) |
|
|
|
|
|
|
|
Operating profit/(loss) before restructuring and event-driven charges |
|
Professional
Services |
$3,934 | $2,217 |
$11,200 | $9,047 |
|
Project
Management |
5,227 | (1,202) |
10,220 | (368) |
|
Todays
Staffing |
914 | 551 |
3,361 | 4,025 |
|
Management
Recruiters |
2,685 | 3,089 |
6,912 | 13,545 |
|
Corporate
Expenses |
(4,113) | (4,778) |
(13,450) | (14,803) |
| | | | | | |
Note: "Revenues" and "Cost of Services" have been restated to reflect the inclusion of certain reimbursable costs on a gross basis pursuant to Emerging Issues Task Force Consensus No. 01-14, which became effective in January 2002. In addition, goodwill amortization of approximately $1.5 million per quarter pre-tax is no longer being recorded in accordance with new accounting rules effective January 1, 2002.
CDI CORP.
Financial Summary
($000s)
|
Summary Balance Sheet |
September 30,
2002 |
September 30,
2001 |
December 31,
2001 |
|
|
|
|
|
|
Assets |
|
|
|
|
Cash and cash equivalents |
$72,232 |
$6,038 |
$26,255 |
|
Receivables |
199,656 |
308,943 |
252,721 |
|
Short term investments |
15,129 |
-- |
-- |
|
Prepaid expenses |
6,639 |
7,152 |
6,577 |
|
Income taxes recoverable |
7,111 |
-- |
-- |
|
Deferred taxes |
15,124 |
13,000 |
16,786 |
|
Assets of discontinued operations |
-- |
17,333 |
14,840 |
|
Current assets |
315,891 |
352,466 |
317,179 |
|
|
|
|
|
|
Fixed assets, net |
30,769 |
62,997 |
49,989 |
|
Deferred taxes |
12,169 |
-- |
5,709 |
|
Goodwill, net |
68,334 |
90,257 |
87,469 |
|
Other assets |
10,988 |
11,962 |
12,226 |
|
|
$438,151 |
$517,682 |
$472,572 |
|
|
|
|
|
|
Liabilities and
Shareholders' Equity |
|
|
|
|
Outstanding checks |
$9,073 |
$13,854 |
$10,304 |
|
Accounts payable |
31,545 |
40,622 |
35,281 |
|
Accrued expenses |
85,606 |
82,934 |
88,628 |
|
Current taxes |
-- |
7,297 |
2,512 |
|
Current portion of long-term debt |
675 |
-- |
7,913 |
|
Liabilities of discontinued operations |
-- |
4,455 |
3,513 |
|
Current liabilities |
126,899 |
149,162 |
148,151 |
|
|
|
|
|
|
Long-term debt |
-- |
25,040 |
-- |
|
Deferred income taxes |
-- |
1,194 |
-- |
|
Deferred compensation |
11,017 |
12,412 |
12,396 |
|
Minority interests |
-- |
1,313 |
1,375 |
|
Shareholders' equity |
300,235 |
328,561 |
310,650 |
|
|
$438,151 |
$517,682 |
$472,572 |
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