CDI Corp. reports Q1 2014 results
First Quarter Highlights
Revenue of $276.3 million, an increase of 2.5% versus first quarter 2013
Gross profit margin of 18.4% versus 18.6% for first quarter 2013
Operating profit of $4.7 million for first quarter 2014 including a pre-tax restructuring charge of $0.4 million and pre-tax charges associated with CEO separation of $0.7 million first quarter 2013 operating profit was $4.9 million
Earnings per diluted share of $0.10 versus $0.13 for first quarter 2013 first quarter 2014 results include a restructuring charge of $0.01 per diluted share and charges associated with CEO separation of $0.04 per diluted share, as described below
For the first quarter of 2014, the Company reported revenue of $276.3 million, an increase of 2.5% versus the prior- year first quarter. The Company reported first quarter 2014 operating profit of $4.7 million compared to operating profit of $4.9 million in the prior-year first quarter. The Company reported first quarter 2014 net income of $2.0 million, or $0.10 per diluted share, versus net income of $2.5 million, or $0.13 per diluted share, in the prior-year first quarter.
In the first quarter of 2014, the Company recorded an aggregate $0.9 million charge to net income (or $0.04 per diluted share) related to the CEO separation that included (i) a $0.7 million pre-tax charge to operations associated with the CEO’s separation arrangement ($0.4 million after-tax, or $0.02 per diluted share) and (ii) an additional $0.5 million charge for the write-off of certain deferred tax assets associated with the CEO’s forfeiture of outstanding equity awards (or $0.02 per diluted share). Also included in first quarter 2014 results is a pre-tax restructuring charge of $0.4 million ($0.2 million after-tax, or $0.01 per diluted share) related to the Company’s restructuring announced in December 2013.
“We are pleased with our first quarter year-over-year revenue growth, including double digit gains in the OGC and AIE verticals and in the UK staffing business. We continue to face revenue challenges in our government-related businesses, as well as in MRI and non-program staffing. Additionally, sales to our largest customer remain significantly below year-ago levels,” said CDI Interim CEO and president, Robert Larney. “We continue to focus on improving gross margins throughout our operations. Our overhead costs are under control as we execute our previously announced restructuring plan. Based on our current outlook, we anticipate higher revenues and profit for CDI throughout the remainder of 2014.”
Business Segment Discussion
The Company’s Global Engineering and Technology Solutions segment (GETS) reported a 5.4% increase in first quarter revenue to $82.3 million when compared to the prior-year quarter. Revenue rose in the Oil, Gas & Chemicals (OGC), Aerospace & Industrial Equipment (AIE), and Hi-Tech verticals although gains were partially offset by continued revenue challenges in the infrastructure and government services businesses, both reported in “Other.” Operating profit was $1.6 million versus $1.9 million in the prior-year quarter. GETS operating profit in first quarter 2014 includes $0.3 million of restructuring charges.
The Company’s Professional Staffing Services segment (PSS) reported a 1.7% revenue increase in the first quarter to $180.1 million when compared to the prior-year first quarter. Revenue increases in OGC, AIE and “Other” were partially offset by a decline in Hi-Tech. PSS operating profit was flat versus the prior-year first quarter. Management Recruiters International, Inc. (MRI) first quarter revenue decreased 3.1% to $13.9 million compared to the prior-year first quarter, driven by declines in both contract staffing and royalty and franchise fee income. MRI’s first quarter operating profit was $1.3 million compared to $1.6 million in the prior-year first quarter.
The Company anticipates revenues for the second quarter of 2014 in the range of $268 million to $276 million, compared to $263.4 million in the prior year second quarter.