CDI Corp. Reports 2012 Third Quarter Results

                 CDI Corp. Reports 2012 Third Quarter Results

PR Newswire

PHILADELPHIA, Oct. 30, 2012

PHILADELPHIA, Oct. 30, 2012 /PRNewswire/ --CDI Corp. (NYSE: CDI) (the
"Company") today reported financial results for the third quarter ended
September 30, 2012.

2012 Third Quarter Key Points

  oRevenue of $279.4 million, up 2.5% compared to the prior-year third
    quarter
  oGross profit margin of 19.6% compared to 21.2% in the same period last
    year
  oOperating profit of $9.0 million versus $4.4 million in prior-year
    quarter, leading to an operating margin of 3.2% versus 1.6% in the year
    ago period. Operating profit in the third quarter ended September 30,
    2011, included $0.6 million of severance expense related to senior level
    executives
  oNet income of $5.3 million, or $0.27 per diluted share, versus net income
    of $2.8 million, or $0.15 per diluted share, in the prior-year quarter.
    Net income in the third quarter ended September 30, 2011, included the
    benefit of an income tax credit of $0.3 million under the Hiring
    Incentives to Restore Employment (HIRE) Act.

"We are pleased with the Company's third quarter performance as we achieved
revenue growth within our target range, and operating income, net income and
earnings per share all showed significant gains," said CDI President and Chief
Executive Officer, Paulett Eberhart. "We reported solid revenue increases in
each of our strategic industry verticals, and we continued to focus
aggressively on cost containment efforts that are appropriate with current
economic conditions."

Business Segment Discussion

The Company's Global Engineering and Technology Solutions segment (GETS)
reported revenue of $83.6 million in the third quarter, essentially flat
compared to the prior-year third quarter. Revenue rose in each of the
segment's three strategic verticals, Oil, Gas & Chemicals, Aerospace &
Industrial Equipment, and Hi-Tech, but was offset by continued weakness in the
infrastructure business results in the "Other" vertical. Operating profit
increased 30.3% to $7.5 million versus the prior-year third quarter driven by
lower operating expenses related to the restructuring announced in December
2011 as well as by additional cost savings realized during the quarter.

The Company's Professional Services Staffing segment (PSS) reported a 4.0%
increase in third quarter revenue versus the prior-year third quarter. PSS
revenue growth was driven by gains in all three strategic verticals, Oil, Gas
& Chemicals, Aerospace & Industrial Equipment, and Hi-Tech, partially offset
by lower revenues in the "Other" vertical.  Operating profit was $4.5 million
during the third quarter of 2012, an increase of 9.7% versus the 2011 third
quarter. Improvement in PSS operating profit was driven by lower operating
expenses related to the 2011 restructuring as well as by additional expense
reductions realized during the quarter.

The Company's franchised Management Recruiters International, Inc. segment
(MRI) reported a 1.3% decline in third quarter revenue versus the prior-year
third quarter due to lower royalty and franchise fee revenue. Operating profit
increased 10.8% to $2.7 million versus the prior year quarter driven primarily
by lower operating expenses related the 2011 restructuring.

Business Outlook

For the fourth quarter ending December 31, 2012, CDI anticipates a revenue
increase in the range of 0% to 2% compared to the year-ago fourth 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 third 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 & 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 revenue), 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 expand or replace our existing bank credit facility on terms
comparable to, or more favorable than, those currently in place; 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 including the impact of
healthcare reform laws and 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      Nine Months Ended
                                September30,           September30,
Consolidated Statements of      2012        2011        2012        2011
Income:
Revenue                         $ 279,390   $ 272,474   $ 834,415   $ 791,849
Cost of services                224,670     214,732     668,482     622,817
Gross profit                    54,720      57,742      165,933     169,032
Operating and administrative    45,711      53,321      141,671     148,154
expenses (1)
Operating profit                9,009       4,421       24,262      20,878
Other income (expense), net     (47)        (63)        (165)       (222)
Income before income taxes      8,962       4,358       24,097      20,656
Income tax expense              3,556       1,496       9,706       5,038
Net income                      5,406       2,862       14,391      15,618
Less: Income attributable to    57          48          267         128
the noncontrolling interest
Net income attributable to CDI  $ 5,349     $ 2,814     $ 14,124    $ 15,490
Earnings per common share:
Basic                           $ 0.27      $ 0.15      $ 0.73      $ 0.81
Diluted                         $ 0.27      $ 0.15      $ 0.72      $ 0.80
Basic weighted-average shares   19,541      19,170      19,342      19,133
outstanding
Diluted weighted-average shares 19,970      19,338      19,750      19,338
outstanding





Selected Balance Sheet Data:   September 30,  December31,
                               2012           2011
Cash and cash equivalents      $   17,074     $  26,644
Accounts receivable, net       248,822        222,889
Total current assets           286,218        271,730
Total assets                   398,331        390,696
Total current liabilities      106,147        109,961
Total CDI shareholders' equity 279,055        266,575





                                                    Nine Months Ended
                                                    September 30,
Selected Cash Flow Data:                            2012      2011
Net cash provided by (used in) operating activities $ 1,182   $ (1,877)
Depreciation and amortization                       7,667     8,343
Capital expenditures                                4,609     4,946
Dividends paid to shareholders                      7,517     7,463





                            Three Months Ended        Nine Months Ended
                            September30,             September30,
Selected Earnings and Other 2012         2011         2012         2011
Financial Data:
Revenue                     $ 279,390    $ 272,474    $ 834,415    $ 791,849
Gross profit                $ 54,720     $ 57,742     $ 165,933    $ 169,032
Gross profit margin         19.6      %  21.2      %  19.9      %  21.3      %
Operating and
administrative expenses as  16.4      %  19.6      %  17.0      %  18.7      %
a
 percentage of revenue
Operating profit margin     3.2       %  1.6       %  2.9       %  2.6       %
Effective income tax rate   39.7      %  34.3      %  40.3      %  24.4      %
After-tax return on CDI     4.9       %  0.2       %
shareholders' equity (2)
Pre-tax return on net       9.1       %  3.9       %
assets (3)





                            Three Months Ended        Nine Months Ended
                            September30,             September30,
Selected Segment Data:      2012         2011         2012         2011
Global Engineering and
Technology Solutions
("GETS")
Revenue:
Oil, Gas and Chemicals      $ 27,713     $ 26,026     $ 83,908     $ 72,942
("OGC")
Aerospace and Industrial    19,500       18,094       53,918       54,431
Equipment ("AIE")
Hi-Tech                     8,502        7,381        24,653       22,163
Other                       27,835       31,728       83,108       92,859
Total revenue               $ 83,550     $ 83,229     $ 245,587    $ 242,395
Gross profit                $ 24,241     $ 24,586     $ 70,942     $ 73,230
Gross profit margin         29.0      %  29.5      %  28.9      %  30.2      %
Operating profit            $ 7,515      $ 5,768      $ 19,474     $ 13,887
Operating profit margin     9.0       %  6.9       %  7.9       %  5.7       %
Professional Services
Staffing ("PSS")
Revenue:
Oil, Gas and Chemicals      $ 31,551     $ 22,855     $ 85,589     $ 56,508
("OGC")
Aerospace and Industrial    21,555       16,351       62,743       46,264
Equipment ("AIE")
Hi-Tech                     72,136       69,930       222,869      213,785
Other                       53,130       62,403       164,179      182,092
Total revenue               $ 178,372    $ 171,539    $ 535,380    $ 498,649
Gross profit                $ 22,679     $ 24,875     $ 70,878     $ 71,486
Gross profit margin         12.7      %  14.5      %  13.2      %  14.3      %
Operating profit (1)        $ 4,525      $ 4,125      $ 15,388     $ 19,318
Operating profit margin     2.5       %  2.4       %  2.9       %  3.9       %
Management Recruiters
International ("MRI")
Revenue:
Contract Staffing           $ 13,430     $ 13,436     $ 41,240     $ 38,385
Royalties and Franchise     4,038        4,270        12,208       12,420
Fees
Total revenue               $ 17,468     $ 17,706     $ 53,448     $ 50,805
Gross profit                $ 7,800      $ 8,281      $ 24,113     $ 24,316
Gross profit margin         44.7      %  46.8      %  45.1      %  47.9      %
Operating profit            $ 2,727      $ 2,461      $ 7,718      $ 6,699
Operating profit margin     15.6      %  13.9      %  14.4      %  13.2      %

(1) In the second quarter of 2011, the Company's PSS segment recorded a $9.7
million benefit related to the successful legal appeal of the United Kingdom
Office of Fair Trading matter.

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

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

SOURCE CDI Corp.

Website: http://www.cdicorp.com
Contact: Vincent Webb, Vice President, Investor Relations, +1-215-636-1240,
Vince.Webb@cdicorp.com
 
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