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CDI Corp. Reports Fourth Quarter and Full Year 2012 Results

CDI Corp. Reports Fourth Quarter and Full Year 2012 Results

CDI Corp has  today reported results for the fourth quarter and full year ended December 31, 2012.

Fourth Quarter and Full Year Highlights

• Revenue of $271 million, up 1.0% during the fourth quarter and $1.105 billion, up 4.3% in 2012

• Revenue in strategic verticals increased 9.1% in the fourth quarter and 13.1% in 2012

• Gross profit margin of 19.8% for the fourth quarter 2012 versus 21.0% for the fourth quarter 2011 and 19.9% in 2012 versus 21.3% in 2011

• Operating and administrative expenses as a percentage of revenue of 16.8% for the fourth quarter

2012 versus 18.2% for the fourth quarter 2011 and 16.9% in 2012 versus 18.6% in 2011

• Earnings per share of $0.25 in the fourth quarter and $0.97 in 2012

• Operating cash flow of $37 million in 2012, an increase of $9 million versus 2011

“Our restructuring and the execution of our strategic plan resulted in improved profitability for the Company and higher revenue in all of our key vertical markets,” said CDI President and CEO Paulett Eberhart. “I was particularly pleased with our establishment of a competitive operating cost structure and with our ability to generate increased operating cash flow in 2012. While the economic environment remains challenging, we look forward to continued profitable revenue growth in 2013.”

For the fourth quarter 2012, the Company reported revenue of $271 million, an increase of 1% versus the year ago quarter. The Company reported fourth quarter 2012 operating profit of $8.0 million compared to an operating loss of $0.5 million in the prior-year fourth quarter. The 2011 fourth quarter results included a restructuring charge of $8.1 million related to the Company’s strategic plan announced in December 2011.

The Company reported fourth quarter 2012 net income of $5.0 million, or $0.25 per diluted share, versus a net loss of $0.7 million, or $0.03 per diluted share, in the prior-year quarter. Fourth quarter 2011 results included a $5.0 million after-tax charge for restructuring ($0.26 per diluted share) partially offset by a $0.2 million HIRE Act income tax credit ($0.01 per diluted share).

For the year ended December 31, 2012, the Company reported revenue of $1.105 billion, a 4.3% increase over $1.060 billion reported in 2011.

Operating profit for the full year was $32.3 million versus $20.4 million in the prior year. Operating profit in 2011 included a benefit of $9.7 million related to a successful legal appeal and the previously mentioned $8.1 million restructuring charge.

Net income in 2012 increased to $19.1 million, or $0.97 per diluted share, versus net income of $14.8

million, or $0.77 per diluted share, in 2011. Net income in 2011 included several previously disclosed items: (i) an after-tax restructuring charge of $5.0 million ($0.26 per diluted share), (ii) the non-taxable legal appeal benefit of $9.7 million ($0.50 per diluted share), and (iii) a $0.9 million HIRE Act income tax credit   ($0.05 per diluted share).

Business Segment Discussion

The Company’s Global Engineering and Technology Solutions segment (GETS) reported a 2.1% decrease in fourth quarter revenue to $79.5 million when compared to the prior-year quarter. Revenues rose in the three strategic verticals, Oil, Gas & Chemicals (OGC), Aerospace & Industrial Equipment (AIE) and Hi- Tech, and were offset by continued weakness in the infrastructure business and lower government services revenue, both reported in “Other”. Operating profit increased to $6.3 million versus $1.1 million in the prior-year quarter. GETS operating profit in the fourth quarter of 2011 included $4.5 million of the $8.1 million restructuring charge.

For the full year, GETS reported a 0.5% increase in revenue to $325.0 million. Full year operating profit increased 71.7% to $25.7 million. Full year 2011 operating profit included $4.5 million of the restructuring charge.

The Company’s Professional Services Staffing segment (PSS) reported a 3.5% revenue increase in the fourth quarter to $174.9 million when compared to the prior-year quarter. Revenues increased in the three strategic verticals, OGC, AIE and Hi-Tech, partially offset by a decrease in “Other”. PSS operating profit increased to $5.1 million versus $2.9 million in the prior-year fourth quarter. Fourth quarter 2011 operating profit included $2.6 million of the restructuring charge.

For the full year 2012, PSS revenue rose 6.4% to $710.3 million driven by increases in the three strategic verticals. Full year operating profit decreased 7.5% to $20.5 million. Full year 2011 operating profit included the $9.7 million benefit of the aforementioned favourable legal settlement and $2.6 million of the restructuring charge.

Management Recruiters International, Inc. (MRI) fourth quarter revenue decreased 9.0% to $16.2 million, compared to the prior-year quarter driven by decreases in both contract staffing and royalty and franchise fee income. MRI’s fourth quarter operating profit decreased 10.3% to $2.5 million compared to the prior year quarter. MRI’s operating profit in the fourth quarter of 2011 included $0.4 million of the restructuring charge.

For the full year, MRI reported a 1.5% revenue increase to $69.6 million driven by growth in contract staffing services. Full year operating profit increased 7.7% to $10.2 million. Operating profit for the full year 2011 included $0.4 million of the restructuring charge.

Business Outlook

The Company anticipates revenues for the first quarter of 2013 in the range of $265 million to $275 million, compared to $281 million in the year-ago first quarter.

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