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CDI Corp. Reports First Quarter 2013 Results

CDI Corp. Reports First Quarter 2013 Results

CDI Corp. has reported results for the first quarter ended March 31, 2013.

First Quarter Highlights

??Revenue of $269 million, a decline of 4.0% during the first quarter 2013 versus the first quarter 2012

??Gross profit margin of 18.6% for the first quarter 2013 versus 19.8% for the first quarter 2012

??Operating and administrative expenses as a percentage of revenue of 16.8% for the first quarter

2013 versus 17.2% for the first quarter 2012

??Earnings per share of $0.13 in the first quarter 2013 versus $0.20 for the first quarter 2012

“During the first quarter, gross profit margin was below last year as revenue in the higher-margin government business within GETS declined versus the year-ago quarter,” said CDI President and CEO Paulett Eberhart. “In addition, we saw a shift to lower margin business within PSS, as well as continued weakness in higher-margin MRI permanent placement and contract business. We were pleased to sustain our competitive cost structure during the first quarter, as reflected by lower operating and administrative expenses as a percentage of revenue. Also encouraging are recent wins and increased bid activity in engineering and staffing. We remain confident in our strategy of focusing on select verticals, higher-margin engineering projects, and client service excellence.”

For the first quarter 2013, the Company reported revenue of $269 million, a decrease of 4.0% versus the year-ago quarter. The Company reported first quarter 2013 operating profit of $4.9 million compared to an operating profit of $7.4 million in the prior-year first quarter. The Company reported first quarter 2013 net income of $2.5 million, or $0.13 per diluted share, versus net income of $3.8 million, or $0.20 per diluted share, in the prior-year quarter.

Business Segment Discussion

The Company’s Global Engineering and Technology Solutions segment (GETS) reported first quarter revenue of $78.0 million, a 4.0% decrease when compared to the prior-year quarter. Increased revenue in the Oil, Gas & Chemicals (OGC) vertical was offset by declines in the infrastructure and government services businesses, both reported in “Other,” as well as by lower Hi-Tech revenue. Aerospace and Industrial Equipment (AIE) revenue was essentially flat versus the year-ago quarter. Operating profit declined to $5.3 million versus $5.9 million in the prior-year quarter, driven primarily by the revenue decrease offset somewhat by additional cost savings.

The Company’s Professional Services Staffing segment (PSS) reported a 2.5% revenue decrease in the first quarter to $177.1 million when compared to the prior-year quarter. Revenue gains in the OGC vertical were offset by lower revenue driven by project completions in “Other” as well as by declines in Hi-Tech and AIE. PSS operating profit fell to $4.1 million versus $5.8 million in the prior-year first quarter, driven primarily by the revenue decrease offset somewhat by additional cost savings.

Management Recruiters International (MRI) first quarter revenue decreased 18.7% to $14.3 million, compared to the prior-year quarter, driven by lower contract staffing and royalty and franchise fee income. MRI’s first quarter operating profit fell to $1.9 million compared to $2.3 million in the prior-year quarter, driven primarily by the revenue decrease offset somewhat by additional cost savings.

Business Outlook

The Company anticipates revenue for the second quarter of 2013 in the range of $260 million to $270 million, compared to $274 million in the year-ago second quarter, with gross profit margin at a level similar to that of the first quarter 2013.

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