PSS loss sees CDI Corp. revenue decline
CDI Corp. has reported its results for the fourth quarter and full year ended December 31st 2015.
Fourth quarter 2015 revenue was $236.6m, a decrease of 11.3% versus fourth quarter 2014. Fiscal 2015 revenue was $985.5m, a decrease of 12.2% versus fiscal 2014.
The company announced fourth quarter 2015 adjusted EBITDA was $0.4m versus $9.0m in the fourth quarter of 2014. It added fiscal 2015 adjusted EBITDA totalled $13.2 million versus $40.1 million in fiscal 2014.
For the fourth quarter 2015, revenue decreased by $30.1 million or 11.3% (8.6% in constant currency) as compared to the prior-year fourth quarter due to a decrease in all three segments, but most significantly, in its professional staffing services (PSS).
PSS revenue declined $22.9 million or 13.3% from the prior-year period. When excluding revenue from EdgeRock Technology Partners, acquired in October 2015, PSS revenue declined $33.1 million or 19.3%. Revenue declined across all North American industry verticals as well as the UK-based staffing business.
Fourth quarter revenue in GETS declined $5.6 million versus the prior year, with declines in the Oil, Gas & Chemicals, Aerospace & Industrial Equipment and Other verticals. Revenue in the Hi-Tech vertical was essentially flat versus the prior-year quarter.
Management Recruiters International, Inc. (MRI) revenue in the fourth quarter decreased 11.4% compared to the prior year, led by a decline in contract staffing and, to a lesser degree, royalty and franchisee fees.
Gross profit decreased by $3.9 million as a decrease in volume was partially offset by the impact of an increase in gross profit margin resulting primarily from a shift in revenue mix toward higher margin GETS business from lower margin PSS business.
The company reported an operating loss in the fourth quarter of $8.8 million compared to an operating loss of $14.8 million in the year-ago quarter primarily due to impairment charges in 2014 partially offset by higher operating and administrative expenses in 2015.
Excluding restructuring and impairment charges, operating and administrative expenses in the fourth quarter increased$4.8 million, or 10.7%, compared to 2014 due primarily to expenses associated with the acquisition and operations of EdgeRock Technology Partners.
"Our fourth quarter results reflect continued pressure from macroeconomic and discrete challenges within our concentrated client base," said president and chief executive officer Scott J. Freidheim. "However, throughout 2015, we strengthened client relationships and retention, increased operational discipline, enhanced our management team, and improved our strategic and financial position."
Freidheim added, "We start 2016 with a strategic plan centered on highly specialized talent deployed through staffing, project and managed solutions. We will transition our North American talent business to focus on high value-added skill-based practices; thus, we are creating a Specialty Talent and Technology segment. In addition, we will integrate and position our new Energy, Chemicals & Infrastructure business as a leading provider of engineering, design and project delivery solutions to small- and mid-cap projects in core infrastructure markets. This strategy embraces our company's 65-year heritage and unique ability to deploy technical skills through flexible delivery models."
The Company estimates revenue for the first quarter of 2016 in the range of $223 million to $228 million. It stated it anticipates continued weakness generally consistent with previously reported trends.