AndersElite Revenues Down 50%
AndersElite Revenues Down 50%
CDI Corp. has reported for the quarter ended March 31, 2009, the company reported a net loss of $0.9 million, compared to net earnings of $7.9 million, in the prior-year quarter. Included in the current quarter results are $1.3 million in reorganization charges associated with severance payments and real estate exit costs. Excluding the reorganization charges, net earnings for the first quarter were essentially breakeven.
First quarter revenue decreased 22.2% to $228.7 million compared to revenue of $293.9 million in the prior-year quarter.
As anticipated, the companys first quarter results were driven by the same factors that influenced fourth quarter 2008 performance. We continued to see weakness in hiring demand, particularly in the U.K. construction market, and in permanent placement demand in the industries served by our Management
Recruiters International segment resulting in reduced royalty payments, said President and CEO, Roger H. Ballou. We also saw further staffing reductions and project delays in CDI Engineering Solutions
Business Segment Discussion
CDI Engineering Solutions revenue declined 17.7% versus the prior-year quarter driven by weakening in the Process & Industrial vertical somewhat offset by organic growth in Government Services and growth due to a previously announced 2008 acquisition in the Aerospace vertical. Operating profit declined to $3.4 million, a decrease of 68.1% versus the prior-year quarter driven primarily by a reduction in higher-margin project engineering and permanent placement revenue and reorganization charges of $0.8 million. Operating profit for the quarter also includes $0.3 million of operating losses associated with the companys ownership in joint ventures. Management Recruiters International, Inc. revenue declined 25.5% versus the prior-year quarter reflecting continued declines in royalty revenue, contract staffing and franchise sales. Operating profit
decreased $2.2 million to essentially breakeven on a year-over-year basis primarily due to the decline in high margin royalties and reorganization charges of $0.2 million.
U.K.-based AndersElite (Anders) revenue declined 54.6% (36.7% on a constant currency basis) versus the prior-year quarter driven by a steep drop in construction industry permanent placement revenue and by weakness in contract staffing. Anders reported an operating loss of $1.2 million versus an operating profit of $2.8 million in the prior-year quarter primarily reflecting a decline in high-margin permanent placement revenue.
CDI IT Solutions reported a 1.9% increase in first quarter revenue driven by continued growth in a large staffing account somewhat offset by declines in automotive accounts. Operating profit increased more than $1.0 million on a year-over-year basis to $1.2 million reflecting effective expense controls, somewhat offset by $0.2 million in reorganization charges.