"CDI continues to perform well in a still fluid economic environment and our second quarter and first half 2011 revenue performance reflects the underlying strength of our core business," commented
For the second quarter ended
For the quarter ended
Second quarter 2011 pre-tax earnings includes a non-taxable benefit of
Second quarter 2011 pre-tax earnings also includes expenses of
Second quarter 2010 pre-tax earnings included a benefit of
Business Segment Discussion
CDI Engineering Solutions reported a 27.1% increase in second quarter revenue versus the prior-year second quarter. Excluding Kimball results, revenue increased 15.7% driven by increases in the Process & Industrial and Aerospace verticals offset by a decrease in the Government Services vertical. Operating profit increased to
CDI IT Solutions revenue increased 18.2% compared to the prior-year second quarter driven by continued growth in larger accounts. Operating profit increased 22.9% to
Corporate Summary
On
Business Outlook
For the third quarter ending
Conference Call
At
Company Information
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, profits 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: weakness in general economic conditions and levels of capital spending by customers in the industries we serve; weakness or volatility 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; uncertainties regarding whether the U.S. federal government debt ceiling will be raised and the impact of a failure to do so and of a possible default on U.S. government obligations; the termination of a major customer contract or project; credit risks
associated with the our customers; competitive market pressures; the availability and cost of qualified labor; 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 activities, including the activities of the our temporary employees; our performance on customer 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
Financial Tables Follow
CDI Corp. and Subsidiaries | |||||||||||||
Consolidated Earnings Release Tables | |||||||||||||
(Unaudited) | |||||||||||||
(in thousands, except per share data) | |||||||||||||
For the three months ended | For the six months ended | ||||||||||||
June 30, | March 31, | June 30, | |||||||||||
2011 | 2010 | 2011 | 2011 | 2010 | |||||||||
Revenue | $ 262,739 | $ 218,982 | $ 256,636 | $ 519,375 | $ 428,922 | ||||||||
Cost of services | 205,779 | 174,279 | 202,306 | 408,085 | 342,712 | ||||||||
Gross profit | 56,960 | 44,703 | 54,330 | 111,290 | 86,210 | ||||||||
Operating and administrative expenses | 43,256 | 41,135 | 51,577 | 94,833 | 82,027 | ||||||||
Operating profit | 13,704 | 3,568 | 2,753 | 16,457 | 4,183 | ||||||||
Other expense, net | (116) | (130) | (43) | (159) | (78) | ||||||||
Equity in losses from affiliated companies | - | (417) | - | - | (768) | ||||||||
Earnings before income taxes | 13,588 | 3,021 | 2,710 | 16,298 | 3,337 | ||||||||
Income tax expense | 1,572 | 423 | 1,970 | 3,542 | 923 | ||||||||
Net income | 12,016 | 2,598 | 740 | 12,756 | 2,414 | ||||||||
Less: gain attributable to the noncontrolling | |||||||||||||
interest | 34 | 8 | 46 | 80 | 15 | ||||||||
Net income attributable to CDI | $ 11,982 | $ 2,590 | $ 694 | $ 12,676 | $ 2,399 | ||||||||
Diluted net income attributable to CDI per share | $ 0.62 | $ 0.13 | $ 0.04 | $ 0.66 | $ 0.12 | ||||||||
Average diluted number of shares | 19,348 | 19,241 | 19,327 | 19,338 | 19,195 | ||||||||
June 30, | March 31, | December 31, | June 30, | ||||||||
Selected Balance Sheet Data: | 2011 | 2011 | 2010 | 2010 | |||||||
Cash and cash equivalents | $ 24,692 | $ 26,702 | $ 28,746 | $ 27,437 | |||||||
Accounts receivable, net | $ 236,797 | $ 229,788 | $ 222,999 | $ 213,059 | |||||||
Current assets | $ 278,562 | $ 276,046 | $ 270,011 | $ 254,718 | |||||||
Total assets | $ 404,326 | $ 401,656 | $ 398,511 | $ 387,400 | |||||||
Current liabilities | $ 119,385 | $ 126,947 | $ 124,088 | $ 102,500 | |||||||
CDI shareholders' equity | $ 269,860 | $ 259,973 | $ 258,582 | $ 271,955 | |||||||
For the three months ended | For the six months ended | ||||||||||||
June 30, | March 31, | June 30, | |||||||||||
Selected Cash Flow Data: | 2011 | 2010 | 2011 | 2011 | 2010 | ||||||||
Depreciation and amortization expense | $ 2,810 | $ 2,533 | $ 2,745 | $ 5,555 | $ 5,087 | ||||||||
Capital expenditures | $ 1,890 | $ 908 | $ 1,638 | $ 3,528 | $ 2,931 | ||||||||
Dividends paid | $ 2,487 | $ 2,471 | $ 2,484 | $ 4,971 | $ 4,951 | ||||||||
Free cash flow for the quarter ended June 30, 2011 is shown below: | |||||||||||||
Net cash used in operating activities | $ (2,246) | ||||||||||||
Less: capital expenditures | (1,890) | ||||||||||||
Less: dividends paid | (2,487) | ||||||||||||
Free cash flow | $ (6,623) | ||||||||||||
For the three months ended | For the six months ended | |||||||||||||
Selected Earnings and Other Financial | June 30, | March 31, | June 30, | |||||||||||
Data: | 2011 | 2010 | 2011 | 2011 | 2010 | |||||||||
Revenue | $ 262,739 | $ 218,982 | $ 256,636 | $ 519,375 | $ 428,922 | |||||||||
Gross profit | $ 56,960 | $ 44,703 | $ 54,330 | $ 111,290 | $ 86,210 | |||||||||
Gross profit margin | 21.7 | % | 20.4 | % | 21.2 | % | 21.4 | % | 20.1 | % | ||||
Operating and administrative expenses as a percentage of revenue | 16.5 | % | 18.8 | % | 20.1 | % | 18.3 | % | 19.1 | % | ||||
Operating profit margin | 5.2 | % | 1.6 | % | 1.1 | % | 3.2 | % | 1.0 | % | ||||
Effective income tax rate | 11.6 | % | 14.0 | % | 72.7 | % | 21.7 | % | 27.7 | % | ||||
After-tax return on CDI shareholders' equity (a) | (0.2) | % | (5.9) | % | (3.8) | % | ||||||||
Pre-tax return on net assets (b) | 4.0 | % | (7.1) | % | (0.4) | % | ||||||||
For the three months ended | For the six months ended | |||||||||||||
June 30, | March 31, | June 30, | ||||||||||||
Selected Segment Data: | 2011 | 2010 | 2011 | 2011 | 2010 | |||||||||
Engineering Solutions | ||||||||||||||
Revenue | $ 140,112 | $ 110,197 | $ 137,786 | $ 277,898 | $ 219,901 | |||||||||
Gross profit | 30,721 | 20,375 | 29,659 | 60,380 | 39,802 | |||||||||
Gross profit margin | 21.9 | % | 18.5 | % | 21.5 | % | 21.7 | % | 18.1 | % | ||||
Operating profit (c) (f) | 4,140 | 3,094 | 3,419 | 7,559 | 4,564 | |||||||||
Operating profit margin | 3.0 | % | 2.8 | % | 2.5 | % | 2.7 | % | 2.1 | % | ||||
IT Solutions | ||||||||||||||
Revenue | $ 90,747 | $ 76,747 | $ 89,424 | $ 180,171 | $ 141,069 | |||||||||
Gross profit | 14,548 | 13,169 | 13,944 | 28,492 | 24,278 | |||||||||
Gross profit margin | 16.0 | % | 17.2 | % | 15.6 | % | 15.8 | % | 17.2 | % | ||||
Operating profit | 3,521 | 2,866 | 3,461 | 6,981 | 4,662 | |||||||||
Operating profit margin | 3.9 | % | 3.7 | % | 3.9 | % | 3.9 | % | 3.3 | % | ||||
Management Recruiters International | ||||||||||||||
Revenue | $ 17,400 | $ 15,108 | $ 15,699 | $ 33,099 | $ 29,470 | |||||||||
Gross profit | 8,385 | 8,017 | 7,650 | 16,035 | 15,267 | |||||||||
Gross profit margin | 48.2 | % | 53.1 | % | 48.7 | % | 48.4 | % | 51.8 | % | ||||
Operating profit | 2,240 | 1,755 | 1,560 | 3,801 | 3,186 | |||||||||
Operating profit margin | 12.9 | % | 11.6 | % | 9.9 | % | 11.5 | % | 10.8 | % | ||||
AndersElite | ||||||||||||||
Revenue | $ 14,480 | $ 16,930 | $ 13,727 | $ 28,207 | $ 38,482 | |||||||||
Gross profit | 3,306 | 3,142 | 3,077 | 6,383 | 6,863 | |||||||||
Gross profit margin | 22.8 | % | 18.6 | % | 22.4 | % | 22.6 | % | 17.8 | % | ||||
Operating profit (loss) (d) | 9,316 | (879) | (897) | 8,419 | (1,334) | |||||||||
Operating profit (loss) margin | 64.3 | % | (5.2) | % | (6.5) | % | 29.8 | % | (3.5) | % | ||||
For the three months ended | For the six months ended | ||||||||||||
Engineering Solutions Revenue | June 30, | March 31, | June 30, | ||||||||||
by Vertical: | 2011 | 2010 | 2011 | 2011 | 2010 | ||||||||
CDI Process and Industrial | $ 93,407 | $ 77,476 | $ 91,345 | $ 184,754 | $ 155,098 | ||||||||
CDI Government Services | 18,308 | 19,801 | 19,067 | 37,375 | 39,859 | ||||||||
CDI Aerospace | 14,954 | 12,227 | 14,126 | 29,079 | 24,251 | ||||||||
CDI Infrastructure (e) | 13,443 | 693 | 13,248 | 26,690 | 693 | ||||||||
Total Engineering Solutions Revenue | $ 140,112 | $ 110,197 | $ 137,786 | $ 277,898 | $ 219,901 | ||||||||
(a) Net income attributable to CDI for the current quarter combined with the income (loss) attributable to CDI from the three preceding quarters, divided by the average CDI shareholders' equity at the beginning and end of that four quarter period. | |
(b) Earnings before income taxes for the current quarter combined with the earnings (loss) before income taxes from the three preceding quarters, divided by the average net assets at the beginning and end of that four quarter period. Net assets include total assets minus total liabilities excluding cash and cash equivalents and income tax accounts. | |
(c) Includes $0, $417, $0, $0, and $768 of equity in losses associated with the Company's non-consolidated joint ventures for the three months ended June 30, 2011 and 2010, the three months ended March 31, 2011 and the six months ended June 30, 2011 and 2010, respectively. | |
(d) Includes adjustment to reduce OFT fine by $9.7 million (6.0 million pounds Sterling) during the second quarter of 2011. | |
(e) During the second quarter of 2010, Engineering Solutions began reporting a new vertical - CDI Infrastructure, which includes results from the purchase of the business of L. Robert Kimball & Associates, Inc. on June 28, 2010. | |
(f) Includes benefit from $1.8 million legal settlement in the second quarter of 2010. | |
SOURCE
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