Exhibit 99
CDI Corp. Reports Second Quarter 2004 Financial Results and Announces Dividends
PHILADELPHIA, July 22 /PRNewswire-FirstCall/ -- CDI Corp. (NYSE: CDI)
today reported earnings for the second quarter ended June 30, 2004. The
company also announced a special and a quarterly cash dividend.
For the quarter ended June 30, 2004, the company reported net earnings of
$5.2 million, or $0.26 per diluted share, on revenues of $264.8 million. The
company also announced that its Board of Directors voted on July 20, 2004 to
pay a special dividend of $2.00 per share and to pay a quarterly dividend of
$0.11 per share. Both dividends will be paid on August 18, 2004 to
shareholders of record as of August 4, 2004.
"CDI continues to generate sufficient cash to fund its ongoing operations,
has $79.1 million in cash and short-term investments, and has untapped
borrowing capacity. We believe this is more cash than we need and our
shareholders will be best served by returning a portion of the cash to them
through a special dividend," said President and Chief Executive Officer Roger
H. Ballou.
"Revenues for the quarter were softer than anticipated since activity on
previously announced new contracts ramped up at a slower rate than we had
expected; however, we are pleased that the sequential revenue uptick was above
normal seasonal growth patterns.
"Earnings in the second quarter were also up sequentially, but there were
a number of specific items that adversely affected earnings results in the
quarter. We incurred a pre-tax charge of $1.0 million related to real estate
that was vacated during the quarter, primarily associated with the contraction
of our Life Sciences vertical. Additionally, compared to our first-quarter
spending, we incurred an incremental $400,000 in second quarter expenses
related to Sarbanes-Oxley compliance. Further, the company incurred
additional expenses as a result of ramping up sales and recruiting staff at
Todays Staffing and AndersElite.
"In the second quarter we recognized a $1.3 million pre-tax gain from the
previously announced sale of Banister International, an executive search and
consulting business owned by our Management Recruiters International segment."
Business Segment Discussion
The Business Solutions segment reported a sequential increase in revenues
in the second quarter. This revenue gain of 4.2% was less than anticipated
since activity on previously announced new contracts picked up at a slower
rate than had been expected. Operating profits were adversely affected by the
aforementioned costs associated with the contraction in the segment's Life
Sciences vertical.
AndersElite's second quarter revenues were up 2.2% sequentially, fueled by
normal seasonal increases in U.K. infrastructure spending. However, operating
profits were adversely affected by the aforementioned ramp up of sales and
recruiting staff.
Seasonal project work boosted Todays Staffing revenues by 4.4%
sequentially and operating profits increased even after absorbing the
aforementioned increase in revenue-producing personnel. Fundamentals continue
to improve at Todays with sequential increases in billable hours.
At Management Recruiters International (MRI), second quarter franchise
royalty revenues increased 13.2% sequentially. However, MRI posted a slight
sequential revenue decline caused by a decline in franchise sales during the
quarter. As previously noted, MRI's operating profits also included the $1.3
million pre-tax gain on the sale of Banister International.
Corporate Summary
Corporate overhead costs were up sequentially primarily reflecting
incremental Sarbanes-Oxley compliance spending. During the quarter, the
company maintained a strong working capital position with cash and short-term
investments aggregating $79.1 million at June 30, 2004.
Business Outlook
"Looking forward, we anticipate sequential revenue growth in the third
quarter," said Ballou. "If this revenue momentum, combined with anticipated
revenue from new account wins, continues through the remainder of the year, it
will hopefully translate into a 10% annualized revenue growth rate by the end
of the fourth quarter."
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
http://www.cdicorp.com. An online replay will be available at
http://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, and Management Recruiters International, the world's
largest executive search and recruitment organization. Visit CDI on the web
at http://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," "hopes," "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 For the six months ended
June 30, March 31, June 30,
2004 2003 2004 2004 2003
Revenues $264,839 269,994 255,987 520,826 539,520
Cost of services 201,806 204,824 194,739 396,545 405,974
Gross profit 63,033 65,170 61,248 124,281 133,546
Operating and
administrative
expenses 56,781 56,452 53,852 110,633 116,466
Gain on sale of assets (1,295) - - (1,295) -
Operating profit 7,547 8,718 7,396 14,943 17,080
Interest income, net
and other (136) (252) (268) (404) (626)
Earnings before income
taxes 7,683 8,970 7,664 15,347 17,706
Income tax expense 2,474 2,867 2,728 5,202 6,143
Net earnings 5,209 6,103 4,936 10,145 11,563
Diluted earnings
per share $0.26 0.31 0.25 0.51 0.59
Diluted number of
shares 20,099 19,739 19,937 20,018 19,647
June 30, December 31, March 31, June 30,
2004 2003 2004 2003
Selected Balance Sheet Data:
Cash, cash equivalents and
short-term investments $79,052 72,836 78,659 105,378
Accounts receivable, net $203,600 199,630 202,674 204,175
Current assets $299,711 289,694 299,691 331,259
Total assets $407,662 401,562 408,494 444,435
Current liabilities $95,954 95,266 98,667 122,639
Shareholders' equity $307,102 297,351 302,165 323,204
For the three months ended For the six months ended
June 30, March 31, June 30,
2004 2003 2004 2004 2003
Selected Cash Flow
Data:
Depreciation expense $2,414 3,808 2,425 4,839 6,893
Capital expenditures $1,715 3,579 1,391 3,106 7,786
Dividends paid $1,767 None 1,765 3,532 None
For the three months ended For the six months ended
June 30, March 31, June 30,
2004 2003 2004 2004 2003
Selected Earnings and
Other Financial Data:
Revenues $264,839 269,994 255,987 520,826 539,520
Gross profit $63,033 65,170 61,248 124,281 133,546
Gross profit margin 23.8% 24.1% 23.9% 23.9% 24.8%
Operating and
administrative
expenses as a
percentage of
revenue 21.4% 20.9% 21.0% 21.2% 21.6%
Corporate expenses $3,672 3,690 3,128 6,800 7,119
Corporate expenses
as a percentage
of revenue 1.4% 1.4% 1.2% 1.3% 1.3%
Operating profit
margin 2.8% 3.2% 2.9% 2.9% 3.2%
Effective income
tax rate 32.2% 32.0% 35.6% 33.9% 34.7%
Pre-tax return on
shareholders' equity
- last twelve
months (a) 10.1% 8.6% 10.8% N/A N/A
(a) Current quarter combined with the three preceding quarters' pre-tax
net earnings or (loss) from continuing operations divided by the
average shareholders' equity.
For the three months ended For the six months ended
June 30, March 31, June 30,
2004 2003 2004 2004 2003
Selected Segment Data:
Business Solutions
Revenues $179,634 182,046 172,452 352,086 367,605
Gross profit 35,530 35,896 33,874 69,404 75,648
Gross profit margin 19.8% 19.7% 19.6% 19.7% 20.6%
Operating profit 5,741 6,330 6,224 11,965 14,280
Operating profit margin 3.2% 3.5% 3.6% 3.4% 3.9%
AndersElite
Revenues $40,387 35,403 39,515 79,902 69,125
Gross profit 9,926 8,760 9,837 19,763 17,496
Gross profit margin 24.6% 24.7% 24.9% 24.7% 25.3%
Operating profit 851 2,064 1,518 2,369 3,830
Operating profit margin 2.1% 5.8% 3.8% 3.0% 5.5%
Todays Staffing
Revenues $31,223 36,441 29,901 61,124 71,013
Gross profit 8,241 10,070 7,986 16,227 19,891
Gross profit margin 26.4% 27.6% 26.7% 26.5% 28.0%
Operating profit 834 2,145 456 1,290 3,537
Operating profit margin 2.7% 5.9% 1.5% 2.1% 5.0%
Management Recruiters
International
Revenues $13,595 16,104 14,119 27,714 31,777
Gross profit 9,336 10,444 9,551 18,887 20,511
Gross profit margin 68.7% 64.9% 67.6% 68.1% 64.5%
Operating profit 3,793 1,869 2,326 6,119 2,552
Operating profit margin 27.9% 11.6% 16.5% 22.1% 8.0%
SOURCE CDI Corp.
-0- 07/22/2004
/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 Corp./
/Web site: http://www.cdicorp.com /
(CDI)
CO: CDI Corp.
ST: Pennsylvania
IN: CPR
SU: ERN DIV ERP CCA MAV