Exhibit 99.1
CDI Corp. Reports Profitable Third Quarter 2003 and Announces Dividend
PHILADELPHIA, Oct. 22 /PRNewswire-FirstCall/ -- CDI Corp. (NYSE: CDI)
today reported earnings for the quarter ended September 30, 2003 and announced
a quarterly cash dividend.
For the quarter ended September 30, 2003, the company reported net
earnings of $6.0 million, or $0.30 per diluted share, on revenues of
$264.4 million. The company also announced that its Board of Directors voted
on October 21, 2003 to pay a quarterly dividend of $0.09 per share to all
shareholders of record as of November 4, 2003. The dividend will be paid on
November 18, 2003.
"Revenues were down slightly to the second quarter as we experienced some
business softening due to the continued sluggish economy. In addition, we
decided to dispose of the last of the company-owned MRI offices to a
franchisee which resulted in lower revenues," said President and Chief
Executive Officer Roger H. Ballou. "We also experienced a loss in billable
employee hours due to the September hurricane in the Mid-Atlantic States and
the blackout that affected many of our Northeast U.S.-based clients.
Nevertheless, CDI remains solidly profitable, achieving net earnings of
$6.0 million in this quarter versus a net loss of $0.6 million in the previous
year," said Ballou.
Business Unit Discussion
Revenue for the CDI Professional Services segment was up 1.6% from the
second quarter reflecting continued strength in CDI Anders Elite and a slight
uptick in information technology staffing. These gains offset a decline in
domestic technical staffing. Gross profit margins moved up slightly as
Professional Services continued to focus on higher margin engagements.
CDI's Project Management segment showed a slight sequential decline in
operating profit as revenue softness and start up expenses on new contracts
were largely offset by an increase in gross profit margin. "Our Project
Management business is solid, but we have not seen a broad recovery that
extends across all of our industry verticals," said Ballou.
Management Recruiters International revenue showed a sequential decline of
19.0%. Most of that decline reflects the disposition of the last of the
company-owned offices to a franchisee and some softness in placements in MRI's
specialty staffing group. Overall, franchise royalties remained relatively
flat to the second quarter.
Todays Staffing revenue was down 6.5% on a sequential basis due to a
seasonal decline in banking project business versus the second quarter.
Corporate Summary
Corporate overhead costs decreased both sequentially and year-over-year as
CDI continued to maintain spending discipline in its headquarter operations.
Business Outlook
"While heartened by the government's statistics on the economic recovery,
we have yet to see any real improvement in our business, nor would we expect
to for three to six months after the beginning of a turnaround due to our mix
of business," said Ballou. "If economic statistics continue to be positive,
we hope to see significant improvement in hiring and capital investment three
to six months into fiscal year 2004. In the interim, we expect continued
revenue softness in the fourth quarter due to typical seasonality as clients
idle plants in some of our key vertical markets."
Conference Call/Webcast
CDI Corp will conduct a conference call at 11 a.m. (EST) today to discuss
this announcement. The conference call will be broadcast live over the
Internet and can be accessed by any interested party at www.cdicorp.com. An
online replay will be available at www.cdicorp.com for 14 days after the call.
Company Information
CDI Corp. (NYSE: CDI) is a Fortune 1000 professional services and
outsourcing company. Its divisions and subsidiaries include CDI Engineering
Solutions, CDI Professional Services, Todays Staffing, and Management
Recruiters International, the world's largest executive search and recruitment
organization. Visit CDI on the web at www.cdicorp.com
Safe Harbor Statement
Certain information in this news release contains forward-looking
statements as such term is defined in Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. Certain
forward-looking statements can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," "seeks,"
"approximately," "intends," "plans," "estimates," or "anticipates" or the
negative thereof or other comparable terminology, or by discussions of
strategy, plans or intentions. Forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from those
in the forward-looking statements. These include risks and uncertainties such
as competitive market pressures, material changes in demand from larger
customers, availability of labor, the company's performance on contracts,
changes in customers' attitudes towards outsourcing, government policies or
judicial decisions adverse to the staffing industry, changes in economic
conditions, and delays or unexpected costs associated with its restructuring
program. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The
company assumes no obligation to update such information.
CDI CORP. AND SUBSIDIARIES
Consolidated Statements of Earnings
Unaudited
(in thousands, except per share data)
For the three months ended For the nine months ended
September 30, September 30,
2003 2002 2003 2002
Revenues $264,355 287,788 803,875 899,337
Cost of services 200,888 210,969 606,862 665,268
Gross profit 63,467 76,819 197,013 234,069
Operating and
administrative
expenses 54,278 68,227 170,744 223,435
Provision for
restructure 69 8,498 69 12,551
Loss on sale of assets - 1,259 - 1,259
Operating profit (loss) 9,120 (1,165) 26,200 (3,176)
Interest (income)
expense, net (170) (111) (796) 17
Earnings (loss) from
continuing operations
before income taxes,
minority interests
and cumulative
effect of accounting
change 9,290 (1,054) 26,996 (3,193)
Income tax expense
(benefit) 3,317 (457) 9,460 (1,248)
Earnings (loss) from
continuing operations
before minority
interests and
cumulative effect of
accounting change 5,973 (597) 17,536 (1,945)
Minority interests - - - 135
Earnings (loss) from
continuing operations
before cumulative
effect of accounting
change 5,973 (597) 17,536 (2,080)
Discontinued operations - 27 - 425
Cumulative effect of
accounting change,
net of tax - - - (13,968)
Net earnings (loss) $5,973 (570) 17,536 (15,623)
Diluted earnings
(loss) per share:
Earnings (loss) from
continuing operations
before cumulative
effect of accounting
change $0.30 (0.03) 0.89 (0.11)
Discontinued operations - - - 0.02
Cumulative effect of
accounting change,
net of tax - - - (0.73)
Net earnings (loss) $0.30 (0.03) 0.89 (0.81)
Diluted number of
shares (000) 19,749 19,248 19,681 19,182
September 30,
2003 2002
Selected Balance Sheet Data:
Cash, cash equivalents and short-term
Investments $55,808 87,361
Accounts receivable, net $209,323 199,656
Accounts receivable as a % of
YTD revenues 26.0% 22.2%
Current assets $287,379 315,891
Total assets $399,459 438,151
Current liabilities $102,455 126,899
Shareholders' equity $288,360 300,235
For the three months ended For the nine months ended
September 30, September 30,
2003 2002 2003 2002
Selected Cash Flow Data:
Depreciation expense $2,565 4,275 9,458 20,456
Capital expenditures $3,991 1,905 11,776 6,758
Dividends paid $40,660 - 40,660 -
Selected Earnings and
Other Financial Data:
Revenues $264,355 287,788 803,875 899,337
Gross profit $63,467 76,819 197,013 234,069
Gross profit margin 24.0% 26.7% 24.5% 26.0%
Operating and
administrative
expenses as a
percentage of
revenue 20.5% 23.7% 21.2% 24.8%
Corporate expenses $2,872 4,709 9,991 14,075
Corporate expenses as a
percentage of revenue 1.1% 1.6% 1.2% 1.6%
Operating profit
(loss) margin 3.4% (0.4)% 3.3% (0.4)%
Effective income tax
expense (benefit) 35.7% (43.4)% 35.0% (39.1)%
Pre-tax return on
shareholders' equity
- last Twelve months (a) 12.4% (10.7)% N/A N/A
(a) Current quarter combined with the three preceding quarters earnings
(loss) from continuing operations before income taxes, minority
interests and cumulative effect of accounting change divided by the
average shareholders' equity. Included in pre-tax earnings (loss)
in the previous twelve months for the 2003 and 2002 calculations are
$0.1 and $46.7 million, respectively of pre-tax event-driven and
restructuring expenses.
For the three months ended For the nine months ended
September 30, September 30,
2003 2002 2003 2002
Selected Segment Data:
Professional Services
Revenues $142,495 153,203 423,130 481,057
Gross profit 29,023 30,627 86,185 93,884
Gross profit margin 20.4% 20.0% 20.4% 19.5%
Operating profit 5,193 1,992 14,020 2,892
Operating profit margin 3.6% 1.3% 3.3% 0.6%
Project Management
Revenues $74,746 76,203 230,841 235,934
Gross profit 16,899 19,052 52,881 56,409
Gross profit margin 22.6% 25.0% 22.9% 23.9%
Operating profit 3,922 4,660 13,205 4,669
Operating profit margin 5.2% 6.1% 5.7% 2.0%
Todays Staffing
Revenues $34,069 35,735 105,082 114,547
Gross profit 9,313 10,210 29,204 2,089
Gross profit margin 27.3% 28.6% 27.8% 28.0%
Operating profit 1,972 (2,939) 5,509 (720)
Operating profit margin 5.8% (8.2)% 5.2% (0.6)%
Management Recruiters International
Revenues $13,045 22,647 44,822 67,799
Gross profit 8,232 16,930 28,743 51,687
Gross profit margin 63.1% 74.8% 64.1% 76.2%
Operating profit 905 (169) 3,457 4,058
Operating profit margin 6.9% (0.7)% 7.7% 6.0%