July 30, 2009

CDI Corp. Reports Second Quarter 2009 Results and Announces Dividend

PHILADELPHIA, July 30, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- CDI Corp. (NYSE: CDI) today reported financial results for the second quarter ended June 30, 2009 and announced a quarterly cash dividend.

For the quarter ended June 30, 2009, the company reported net earnings of $0.1 million, or $0.00 per diluted share, compared to net earnings of $7.0 million, or $0.34 per diluted share, in the prior-year quarter. Included in the current quarter results are $0.7 million in pre-tax severance charges. Excluding the severance charges, net earnings for the second quarter were approximately $0.5 million or $0.03 per diluted share.

Second quarter revenue decreased 25.5% (or 20.9% on a constant currency basis) to $215.4 million compared to revenue of $289.2 million in the prior-year quarter.

A quarterly cash dividend of $0.13 per share will be paid on August 27, 2009 to all shareholders of record as of August 13, 2009.

"We were somewhat encouraged by revenue trends during the second quarter which indicate that our business could be emerging from the trough that we saw in the previous two quarters," said President and CEO, Roger H. Ballou.

"During the quarter we saw month to month increases in project bid activity and in staffing services revenue in both our Engineering Solutions and IT Solutions segments. If these trends continue we do not anticipate further cost reduction charges, however we will remain vigilant to ensure that our structural costs are aligned with revenue run rates."

Business Segment Discussion

CDI Engineering Solutions revenue declined 22.6% (21.0% in constant currency) versus the year-ago quarter, driven by continued weakness in the Process & Industrial vertical somewhat offset by organic growth in Government Services and growth resulting from an acquisition in the Aerospace vertical during the third quarter 2008. Operating profit declined to $3.5 million, a decrease of 60.9% versus the prior-year quarter driven primarily by reductions in higher-margin project engineering and permanent placement revenue, as well as severance charges of $0.3 million. Operating profit for the quarter also includes $0.3 million in operating losses associated with the company's ownership in joint ventures.

Management Recruiters International, Inc. revenue decreased 31.8% versus the year-ago quarter, reflecting continued weakness in royalty revenue (driven by a decline in permanent placement activity by franchise offices) and by declines in contract staffing and franchise sales. Operating profit decreased $3.0 million to $0.5 million on a year-over-year basis primarily due to the decline in higher-margin royalties and severance charges of $0.1 million.

U.K.-based AndersElite (Anders) revenue declined 57.6% (45.3% in constant currency) versus the year-ago quarter driven by continued weakness both in permanent placement and contract staffing in the U.K. construction industry. Revenue did however stabilize during the quarter. Anders reported an operating loss of $1.9 million versus an operating profit of $1.5 million in the year-ago quarter primarily reflecting a decline in higher-margin permanent placement revenue. Operating profit for the quarter also includes $0.2 million in severance charges.

CDI IT Solutions revenue increased 3.1% versus the prior-year quarter driven by broad-based growth in staffing services. Operating profit increased 64.8% on a year-over-year basis to $1.9 million reflecting effective cost controls and the aforementioned revenue growth, somewhat offset by $0.1 million in severance charges.

Corporate Summary

Corporate overhead costs decreased by 15.1% on a year-over-year basis, primarily reflecting cost control steps.

"Cash and cash equivalents increased to $77.9 million during the quarter," said Ballou. "With cash on-hand and untapped borrowing capacity, we should have sufficient resources to support organic revenue growth, capital expenditures and shareholder dividends, as well as potential stock repurchases and acquisitions."

Business Outlook

"Based on prudent steps taken in previous periods and continuing into this quarter, we were able to reduce total operating and administrative expenses for the second quarter by $13.1 million versus the year-ago quarter and $4.3 million versus the first quarter," said Ballou. "Our reduced operating expense run rate and anticipated stabilization in revenue should produce an increase in profitability in the third quarter.

"While we anticipate continued weakness in permanent placement hiring demand, we anticipate improvement in segments of our business throughout the third quarter. Due to these factors, we expect that overall third quarter 2009 revenue could be 18-25% below the year-ago quarter - or 15-21% on a constant currency basis assuming recent foreign exchange rates."

Financial Tables Follow

Conference Call/Webcast

CDI Corp. will conduct a conference call at 11 a.m. (ET) 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

Headquartered in Philadelphia, CDI Corp. (NYSE: CDI) is a leading provider of engineering & information technology outsourcing solutions and professional staffing. Its operating units include CDI Engineering Solutions, CDI IT Solutions, CDI AndersElite Limited, and Management Recruiters International, Inc. Visit CDI 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 statements about our strategies for growth and future financial results (such as revenues, pre-tax profit and tax rates), 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: continued weakness in general economic conditions and levels of capital spending by customers in the industries that we serve; further weakness in the financial and capital markets which may result in the postponement or cancellation of our customers' capital projects or the inability of our customers to pay our fees; competitive market pressures; our ability to maintain and grow our revenue base; the availability and cost of qualified labor; adverse consequences arising out of the U.K. Office of Fair Trading investigation; credit risks associated with our customers; our level of success in attracting, training, and retaining qualified management personnel and other staff employees; changes in customers' attitudes towards outsourcing; changes in tax laws and other government regulations; the possibility of incurring liability for our activities, including the activities of our temporary employees; our performance on customer contracts; and government policies or judicial decisions adverse to our businesses. More detailed information about some of these risks and uncertainties may be found in our filings with the SEC, particularly in the "Risk Factors" section of our Form 10-K's and the "Management's Discussion and Analysis of Financial Condition and Results of Operations" section of our Form 10-K's and Form 10-Q's. 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.

                          CDI Corp. and Subsidiaries
                     Consolidated Earnings Release Tables
                                  (Unaudited)
                     (in thousands, except per share data)


                               For the three               For the six
                                months ended              months ended
                               --------------             -------------
                             June 30,          March 31,       June 30,
                             --------                          --------
                          2009       2008         2009      2009      2008
                          ----       ----         ----      ----      ----

    Revenue           $215,426   $289,211     $228,652  $444,078  $583,091

    Cost of service    171,147    221,629      181,225   352,372   444,254
                       -------    -------      -------   -------   -------

    Gross profit        44,279     67,582       47,427    91,706   138,837

    Operating and
     administrative
     expenses           43,751     56,826       48,078    91,829   117,118
                        ------     ------       ------    ------   -------

    Operating profit
     (loss)                528     10,756         (651)     (123)   21,719

    Other income
     (expense), net       (143)       613          259       116     1,861

    Equity in losses
     from affiliated
     companies            (279)         -         (302)     (581)        -
                          ----        ---         ----      ----       ---

    Earnings (loss)
     before income
     taxes                 106     11,369         (694)     (588)   23,580

    Income tax
     expense                50      4,390          226       276     8,677
                            --      -----          ---       ---     -----

    Net earnings
     (loss)                 56      6,979         (920)     (864)   14,903

    Less: loss
     attributable to
     the noncontrolling
     interest               (3)         -            -        (3)        -
                            --        ---          ---        --       ---

    Net earnings
     (loss) attributable
      to CDI               $59     $6,979        $(920)    $(861)  $14,903
                           ===     ======        =====     =====   =======


    Diluted net
     earnings (loss)
     per share           $0.00      $0.34       $(0.05)   $(0.05)    $0.73

    Average diluted
     number of shares   19,062     20,409       18,903    18,919    20,407





    Selected Balance    June 30,  March 31, December 31, June 30,
     Sheet Data:          2009       2009         2008      2008
    ----------------      ----       ----         ----      ----

    Cash and cash
     equivalents       $77,932    $66,019      $61,761  $121,423

    Accounts
     receivable, net  $182,277   $195,567     $193,338  $214,073

    Current assets    $277,903   $279,666     $273,293  $347,864

    Total assets      $388,530   $386,661     $383,199  $449,536

    Current
     liabilities       $81,014    $87,901      $79,993   $92,289

    CDI shareholders'
     equity           $295,765   $287,253     $291,385  $344,319

    Noncontrolling
     interest             $152         $-           $-        $-



                              For the three             For the six
                               months ended             months ended
                              --------------            -------------
                             June 30,         March 31,    June 30,
                             --------                      --------
    Selected Cash
     Flow Data:           2009      2008       2009      2009      2008
    -------------         ----      ----       ----      ----      ----

    Depreciation and
     amortization
     expense            $2,844    $2,848     $2,894    $5,738    $5,698

    Capital
     expenditures       $2,225    $1,514     $1,721    $3,946    $5,958

    Dividends paid      $2,463    $2,637     $2,465    $4,928    $5,283

    Free cash flow for
     the quarter ended
     June 30, 2009 is
     shown below:
        Net cash
         provided by
         operating
         activities    $10,059
        Less:
         capital
         expenditures
                        (2,225)
        Less:
         dividends
         paid           (2,463)
                        ------
        Free cash
         flow           $5,371
                        ======



                              For the three             For the six
                               months ended             months ended
                              --------------            -------------
                           June 30,          March 31,    June 30,
                           ---------                      --------
    Selected
     Earnings and
     Other Financial
     Data:                2009      2008       2009      2009      2008
    ----------------      ----      ----       ----      ----      ----

    Revenue           $215,426  $289,211   $228,652  $444,078  $583,091

    Gross profit       $44,279   $67,582    $47,427   $91,706  $138,837

    Gross profit
     margin               20.6%     23.4%      20.7%     20.7%     23.8%

    Operating and
     administrative
     expenses as a
     percentage of
     revenue              20.3%     19.6%      21.0%     20.7%     20.1%

    Corporate
     expenses           $3,667    $4,319     $4,435    $8,102    $9,405
    Corporate
     expenses as a
     percentage of
     revenue               1.7%      1.5%       1.9%      1.8%      1.6%

    Operating profit
     margin                0.3%      3.7%      -0.3%      0.0%      3.7%

    Effective income
     tax rate             47.2%     38.6%     -32.6%    -46.9%     36.8%

    After-tax return
     on shareholders'
     equity (a)            1.1%      9.3%       3.4%

    Pre-tax return
     on net assets (b)     2.2%     22.1%       7.5%



                               For the three             For the six
                               months ended              months ended
                               --------------            -------------
                             June 30,       March 31,       June 30,
                            ---------                       --------
    Selected Segment
     Data:                2009      2008       2009      2009      2008
    ----------------      ----      ----       ----      ----      ----

    Engineering
     Solutions
    Revenue           $118,456  $153,100   $128,555  $247,011  $309,252
    Gross profit        23,265    32,600     25,167    48,432    67,300
    Gross profit
     margin               19.6%     21.3%      19.6%     19.6%     21.8%

    Operating profit (c) 3,497     8,953      3,449     6,946    19,774
    Operating profit
     margin                3.0%      5.9%       2.7%      2.8%      6.4%

    Management
     Recruiters
     International
    Revenue            $13,233   $19,401    $14,621   $27,854   $39,032
    Gross profit         6,498    10,533      7,055    13,553    21,227
    Gross profit
     margin               49.1%     54.3%      48.3%     48.7%     54.4%

    Operating profit       470     3,493          4       474     5,743
    Operating profit
     margin                3.6%     18.0%       0.0%      1.7%     14.7%

    AndersElite
    Revenue            $25,517   $60,245    $28,034   $53,551  $121,985
    Gross profit         3,954    13,529      4,899     8,853    29,193
    Gross profit
     margin               15.5%     22.5%      17.5%     16.5%     23.9%

    Operating profit
     (loss)             (1,930)    1,489     (1,199)   (3,129)    4,264
    Operating profit
     margin               -7.6%      2.5%      -4.3%     -5.8%      3.5%

    IT Solutions
    Revenue            $58,220   $56,465    $57,442  $115,662  $112,822
    Gross profit        10,562    10,920     10,306    20,868    21,117
    Gross profit
     margin               18.1%     19.3%      17.9%     18.0%     18.7%

    Operating profit     1,879     1,140      1,228     3,107     1,343
    Operating profit
     margin                3.2%      2.0%       2.1%      2.7%      1.2%



                              For the three             For the six
                               months ended             months ended
                              --------------            -------------
    Engineering
     Solutions
     Revenue                June 30,        March 31,       June 30,
    -----------             ---------                       --------
    by Vertical:          2009      2008       2009      2009      2008
    ------------          ----      ----       ----      ----      ----

    CDI Process and
     Industrial        $81,135  $118,598    $90,606  $171,741  $241,266
    CDI Government
     Services           22,163    21,257     21,894    44,057    41,102
    CDI Aerospace       15,158    13,245     16,055    31,213    26,884
                        ------    ------     ------    ------    ------

    Total
     Engineering
     Solutions
     Revenue          $118,456  $153,100   $128,555  $247,011  $309,252
                      ========  ========   ========  ========  ========



    (a) Current quarter combined with the three preceding quarters' net
        earnings attributable to CDI divided by the average CDI
        shareholders' equity.

    (b) Current quarter combined with the three preceding quarters'
        pre-tax earnings divided by the average net assets.  Net assets
        include total assets minus total liabilities excluding cash,
        external debt and income tax accounts.

    (c) Includes $279, $302 and $581 of equity in losses associated with the
        Company's non-consolidated joint ventures for the three months ended
        June 30, 2009, the three months ended March 31, 2009 and the six
        months ended June 30, 2009, respectively.




SOURCE CDI Corp.

http://www.cdicorp.com

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