CDI Corp. Reports Fourth Quarter and Full Year 2013 Results
• Revenue in fourth quarter 2013 of $277.1 million versus $270.5 million in fourth quarter 2012. Revenue in 2013 of $1.088 billion versus $1.105 billion in 2012
• Gross profit margin of 18.9% for fourth quarter 2013 versus 19.8% for fourth quarter 2012, and 19.0% in 2013 versus 19.9% in 2012
• Operating profit of $3.8 million for fourth quarter 2013 includes a restructuring charge of $5.7 million and the benefit from a previously disclosed legal settlement of $3.3 million. Fourth quarter 2012 operating profit was $8.0 million
• Earnings per diluted share of $0.12 in fourth quarter 2013 and $0.65 for full year 2013
For the fourth quarter 2013, the Company reported revenue of $277.1 million, an increase of 2.4% versus the year-ago quarter. The Company reported fourth quarter 2013 operating profit of $3.8 million compared to operating profit of $8.0 million in the prior-year fourth quarter. The Company reported fourth quarter 2013 net income of $2.4 million, or $0.12 per diluted share, versus net income of $5.0 million, or $0.25 per diluted share, in the prior-year quarter.
Included in fourth quarter 2013 results is a pre-tax restructuring charge of $5.7 million ($3.6 million after-tax, or $0.18 per diluted share) related to the Company’s realignment announced in December 2013, and a pre-tax benefit from a legal settlement of $3.3 million ($2.0 million after-tax, or $0.10 per diluted share).
For the year ended December 31, 2013, the Company reported revenue of $1.088 billion, a 1.5% decrease versus $1.105 billion reported in 2012. Operating profit for the full year was $20.9 million versus $32.3 million in the prior year. Operating profit in 2013 includes the previously mentioned restructuring charge and legal settlement.
Net income in 2013 was $12.9 million, or $0.65 per diluted share, versus $19.1 million, or $0.97 per diluted share, in 2012. Net income and earnings per share for 2013 include the after-tax impacts of the restructuring charge and benefit of the legal settlement.
“2013 was a challenging year for CDI, as substantial growth in both our OGC vertical and international business was offset by top line declines in our AIE and Hi-Tech verticals. In addition, our government, non-program staffing and MRI businesses saw a significant decline in revenues,” said CDI President and CEO, Paulett Eberhart. "We are taking actions to build revenues in all our target verticals and to invest in both non-program staffing and MRI, as we realign the organization to improve operational effectiveness. These actions, combined with a more stable outlook for government agency spending, give us increased confidence that 2014 will be a year of revenue and profit growth.”
Business Segment Discussion
The Company’s Global Engineering and Technology Solutions segment (GETS) reported a 3.0% increase in fourth quarter revenue to $81.8 million when compared to the prior-year quarter. Revenues rose in Oil, Gas & Chemicals (OGC) and Aerospace & Industrial Equipment (AIE), and were partially offset by a decrease in Hi-Tech revenues and continued weakness in the infrastructure and government services businesses, both reported in “Other.” Operating profit increased to $7.4 million versus $6.3 million in the prior-year quarter. GETS operating profit in fourth quarter 2013 includes $2.1 million in restructuring charges and the benefit from a legal settlement of $3.3 million.
For the full-year, GETS reported a 1.2% decrease in revenue to $321.3 million. Full-year operating profit decreased 2.2% to $25.2 million. Full-year 2013 operating profit includes the aforementioned restructuring charge and legal settlement benefit.
The Company’s Professional Services Staffing segment (PSS) reported a 3.3% revenue increase in the fourth quarter to $180.7 million when compared to the prior-year quarter. Revenues increased in OGC and in “Other,” and were partially offset by a decrease in AIE and Hi-Tech. PSS operating profit decreased to $0.9 million versus $5.1 million in the prior-year fourth quarter. Fourth quarter 2013 operating profit includes $2.4 million of the restructuring charge.
For the full-year 2013, PSS revenue was flat at $708.6 million when compared to the prior year as strong growth in OGC was offset by declines in AIE, Hi-Tech and “Other.” Full-year operating profit decreased to $12.6 million versus $20.5 million in the prior year. Full-year 2013 operating profit includes $2.4 million of the restructuring charge.
Management Recruiters International, Inc. (MRI) fourth quarter revenue decreased 10.0% to $14.6 million compared to the prior-year quarter, driven by declines in both contract staffing and royalty and franchise fee income. MRI’s fourth quarter operating profit decreased to $2.3 million compared to $2.5 million in the prior-year quarter. MRI’s operating profit in the fourth quarter of 2013 includes $0.2 million of the restructuring charge.
For the full year, MRI reported a 16.8% revenue decrease to $58.0 million driven by declines in both contract staffing and royalty and franchise fee income. Full-year operating profit decreased to $8.5 million versus $10.2 million in the prior year. Operating profit for the full year 2013 includes $0.2 million of the restructuring charge.
The Company anticipates revenues for the first quarter of 2014 in the range of $264 million to $274 million, compared to $269.5 million in the year-ago first quarter.