Exhibit 99
CDI Corp. Reports First Quarter 2004 Financial Results and Announces Dividend
PHILADELPHIA, April 22 /PRNewswire-FirstCall/ -- CDI Corp. (NYSE: CDI)
today reported earnings for the first quarter ended March 31, 2004 and
announced a quarterly cash dividend.
For the quarter ended March 31, 2004, the company reported net earnings of
$4.9 million, or $0.25 per diluted share, on revenues of $256 million. The
company also announced a quarterly dividend of $0.09 per share to be paid to
all shareholders of record as of May 5, 2004. The dividend will be paid on
May 19, 2004.
"As we anticipated, revenues and earnings for the first quarter were
essentially flat over the fourth quarter. Earnings were flat, despite
absorbing a substantial rate increase in state unemployment insurance (SUI)
costs and a settlement in excess of our reserve for a prior year SUI dispute,"
said President and Chief Executive Officer Roger H. Ballou. "Additionally,
earnings in the first quarter were affected by unusually high bidding activity
and contract start-up costs related to substantial new business wins that will
produce revenue in the second quarter and throughout the balance of 2004.
During the first quarter, revenue momentum accelerated primarily from
increased job order flow in existing contracts. We anticipate this momentum
will continue during the second quarter as clients increase capital
expenditures to fund engineering projects and increase their rate of hiring
for professional staff.
"In 2003, we decided to integrate CDI Professional Services and CDI
Engineering Solutions into a Business Solutions unit to better meet customer
needs," said Ballou. "As a result of this integration, effective January
2004, CDI will announce results for four business segments: Business
Solutions, AndersElite, Todays Staffing and Management Recruiters
International (MRI). AndersElite, our U.K. subsidiary that was formerly part
of CDI Professional Services, will be its own business segment. Todays
Staffing and MRI remain unchanged. The new Business Solutions unit will
operate through five key verticals: CDI-Aerospace, CDI-Government Services,
CDI-Information Technology (IT) Services, CDI-Life Sciences and CDI-Process &
Industrial. Our financial tables in this release reflect this new reporting
structure."
Business Unit Discussion
The Business Solutions segment reported essentially flat sequential
revenues and slightly lower profits. As previously mentioned, profits were
affected by SUI and start-up costs. Activity picked up as the quarter
progressed with incremental business growth in a number of our industry
verticals.
AndersElite revenue was up substantially year-over-year with much of the
increase derived from favorable exchange rates, but down sequentially due to
normal seasonality. Permanent and temporary placement activity accelerated in
the later half of the quarter underscoring the continued strong demand in the
U.K. construction and infrastructure market. We anticipate this strong demand
will continue into the second quarter.
MRI posted a solid increase in revenue and a significant sequential
increase in operating profits. The revenue and operating profit increase was
due to strong sequential growth in franchise sales, franchise royalties,
growth in mid-management temporary staffing and lower operating expenses. New
job orders and first-time interviews in the later half of the first quarter
augur a possible upswing in permanent placement activity throughout the second
quarter.
Todays Staffing posted a sequential decline in revenue and profits for the
quarter, principally due to seasonal factors and some continuing softness in
local accounts until near the end of the quarter. However, sales momentum in
the later part of the first quarter indicates a potential solidifying of
fundamentals at Todays. We are optimistic these positive trends will continue
into the second quarter.
Corporate Summary
Corporate overhead costs were up slightly from the fourth quarter,
reflecting continuing discipline in the company's headquarter operations.
During the quarter we improved our working capital position as evidenced by
our increase in cash and short-term investments to $79 million.
Business Outlook
"We are optimistic that the economy may have reached a stage that will
translate into increased capital investment and hiring," said Ballou. "As
noted, we are seeing improving trends across our portfolio of businesses and,
barring any unforeseen events, we would expect sequential revenue growth in
the second quarter above 5 percent, which would also translate into the first
positive quarterly year-over-year revenue growth since fourth quarter 2000."
Financial Tables Follow
Conference Call/Webcast
CDI Corp. will conduct a conference call at 11 a.m. (EDT) 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 provider of engineering and information
technology outsourcing solutions and professional staffing. Its subsidiaries
include Todays Staffing, AndersElite in the U.K., 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 and changes in economic
conditions. 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
March 31, December 31, March 31,
2004 2003 2003
Revenues $ 255,987 256,439 269,526
Cost of services 194,739 196,628 201,150
Gross profit 61,248 59,811 68,376
Operating and administrative expenses 53,852 53,030 60,014
Restructuring - (212) -
Operating profit 7,396 6,993 8,362
Interest income, net and other (268) (257) (374)
Earnings before income taxes 7,664 7,250 8,736
Income tax expense 2,728 2,240 3,276
Net earnings $ 4,936 5,010 5,460
Diluted earnings per share $ 0.25 0.25 0.28
Diluted number of shares 19,937 20,043 19,554
March 31, December 31, March 31,
2004 2003 2003
Selected Balance Sheet Data:
Cash, cash equivalents and short-term
investments $ 78,659 72,836 93,369
Accounts receivable, net $ 202,674 199,630 203,939
Accounts receivable as a % of
revenues 79.2% 77.8% 75.7%
Current assets $ 299,691 289,694 322,135
Total assets $ 408,494 401,562 436,108
Current liabilities $ 98,297 95,266 114,539
Shareholders' equity $ 302,535 297,351 313,576
For the three months ended
March 31, December 31, March 31,
2004 2003 2003
Selected Cash Flow Data:
Depreciation expense $ 2,425 2,405 3,085
Capital expenditures $ 1,391 2,981 4,207
Dividends paid $ 1,765 1,759 -
Selected Earnings and Other Financial Data:
Revenues $ 255,987 256,439 269,526
Gross profit $ 61,248 59,811 68,376
Gross profit margin 23.9% 23.3% 25.4%
Operating and administrative expenses
as a percentage of revenue 21.0% 20.7% 22.3%
Corporate expenses $ 3,128 2,960 3,429
Corporate expenses as a percentage of
revenue 1.2% 1.2% 1.3%
Operating profit margin 2.9% 2.7% 3.1%
Effective income tax rate 35.6% 30.9% 37.5%
Pre-tax return on shareholders' equity
last twelve months (a) 10.8% 11.3% 6.0%
(a) Current quarter combined with the three preceding quarters earnings
before income taxes divided by the average shareholders' equity.
For the three months ended
March 31, December 31, March 31,
2004 2003 2003
Selected Segment Data:
Business Solutions
Revenues $ 172,452 171,934 185,559
Gross profit 33,874 34,492 39,752
Gross profit margin 19.6% 20.1% 21.4%
Operating profit 6,224 6,827 7,950
Operating profit margin 3.6% 4.0% 4.3%
AndersElite
Revenues $ 39,515 41,787 33,722
Gross profit 9,837 9,486 8,736
Gross profit margin 24.9% 22.7% 25.9%
Operating profit 1,518 2,099 1,766
Operating profit margin 3.8% 5.0% 5.2%
Todays Staffing
Revenues $ 29,901 30,664 34,572
Gross profit 7,986 8,135 9,821
Gross profit margin 26.7% 26.5% 28.4%
Operating profit 456 862 1,392
Operating profit margin 1.5% 2.8% 4.0%
Management Recruiters International
Revenues $ 14,119 12,054 15,673
Gross profit 9,551 7,698 10,067
Gross profit margin 67.6% 63.9% 64.2%
Operating profit 2,326 165 683
Operating profit margin 16.5% 1.4% 4.4%
SOURCE CDI Corporation
-0- 04/22/2004
/CONTACT: Vincent Webb, Vice President, Corporate Communications and
Marketing, +1-215-636-1240, Vince.Webb@cdicorp.com; or Jay Stuart, Chief
Financial Officer, +1-215-636-1141, Jay.Stuart@cdicorp.com, both of CDI
Corporation/
/Web site: http://www.cdicorp.com/
(CDI)
CO: CDI Corporation
ST: Pennsylvania
IN: CPR
SU: ERN ERP MAV CCA DIV