Exhibit 99
CDI CORP. REPORTS SECOND QUARTER FINANCIAL RESULTS AND ANNOUNCES DIVIDEND
PHILADELPHIA, Aug. 4 /PRNewswire-FirstCall/ -- CDI Corp. (NYSE: CDI) today
reported earnings for the second quarter ended June 30, 2005 and announced a
quarterly cash dividend.
For the quarter ended June 30, 2005, the company reported net earnings of
$4.0 million, or $0.20 per diluted share, on revenues of $286.4 million. The
company also announced a quarterly dividend of $0.11 per share to be paid on
September 1, 2005 to all shareholders of record as of August 18, 2005.
"We saw continued solid revenue momentum in many of CDI's business sectors
as revenues grew 7.7% sequentially and 8.1% on a year-over-basis," said
President and Chief Executive Officer Roger H. Ballou. "Increases in capital
spending by clients in our key vertical markets and continued robust hiring for
both permanent and contingent staffing positions are driving this broad
recovery.
"Additionally, we saw continued benefits from our 2004 investments in
sales-building capabilities with significant new account wins. We were also
pleased with the sequential improvement in pre-tax earnings as we generated a
low to mid-teen variable contribution margin on incremental revenue."
Business Segment Discussion
The Business Solutions segment reported solid sequential revenue growth of
5.4%. Revenue gains were driven by new account wins and ramp-up of existing
accounts primarily in the Process & Industrial and IT Services verticals.
Operating profits increased sequentially but were affected by spending
associated with new project start-up activity which should produce profitable
revenue growth in later quarters.
AndersElite revenues grew sequentially by 11.7% as solid demand continued in
the U.K. construction marketplace. Sequential operating profits more than
doubled as earlier hiring and training investments in revenue-generating staff
resulted in improved productivity.
Todays Staffing second quarter revenues increased sequentially by 13.8%,
driven by an up-tick in demand by current clients and success in new account
sales both on a retail and national level. Sequential operating profits
rebounded solidly as previous investments in hiring sales personnel began to
bear fruit. However, operating profit margins remain below historic levels due
to business mix changes.
Management Recruiters International (MRI) second quarter revenues increased
sequentially by 10.8%. Royalty trends remained strong with 13.3% sequential
growth reflecting continued strength in mid-management hiring - particularly in
the United States. Operating profits continued to be strong with sequential
growth of 15.0%. On a year-over-year basis operating profits were essentially
flat due to a pre-tax gain of $1.3 million realized from the sale of a
company-owned office in the second quarter of 2004.
Corporate Summary
Corporate overhead costs were $4.0 million, slightly below the previous
quarter reflecting lower Sarbanes-Oxley compliance costs partially offset by
investments in the accounting and finance organization. On a year-over-year
basis, corporate overhead costs have increased primarily due to increased
Sarbanes-Oxley compliance costs which began to ramp-up in the second half of
2004.
CDI ended the quarter with approximately $22.5 million in cash and cash
equivalents compared to $26.4 million at the end of quarter one. The decline is
primarily due to higher working capital requirements driven by substantially
higher revenue run rates during the second quarter. Additionally, the decline in
cash reflects start-up costs of new projects in our Business Solutions segment
and higher seasonal tax payments made during the second quarter.
"We expect to continue to generate sufficient cash in 2005 to support
accelerating organic growth and anticipated capital spending," said Ballou. "We
also have significant untapped debt capacity if necessary to fund potential
acquisitions."
Business Outlook
"Looking ahead," said Ballou, "we anticipate sequential revenue growth in
the third quarter reflecting continued strength in capital spending by key
process and industrial clients, permanent placement demand for mid-management
personnel, and increased staffing requisition activity in all levels of
temporary hiring from office support help to technical and IT professionals.
"We believe that the revenue momentum, combined with anticipated revenue
from our pipeline of new account wins, could now translate into 7 to 9% revenue
growth for the entire year. Our business model is sound and we should be able to
generate low to mid-teen variable contribution margins on these incremental
revenues."
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 leading provider of engineering and information
technology outsourcing solutions and professional staffing. Its operating units
include CDI Business Solutions, CDI AndersElite Limited, Todays Staffing, Inc.
and Management Recruiters International, Inc. Visit CDI 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," "could," "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. Readers are urged to note the various risks and
uncertainties described in our public filings. In particular, these risks and
uncertainties include: 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, June 30,
---------------------------- March 31, ----------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
As As
Restated Restated
(a) (a)
Revenues $ 286,411 264,839 265,919 552,330 520,826
Cost of services 220,165 201,912 205,134 425,299 396,735
Gross profit 66,246 62,927 60,785 127,031 124,091
Operating and administrative
expenses 59,980 57,371 57,665 117,645 111,485
Gain on sale of asset - (1,295) (420) (420) (1,295)
Operating profit 6,266 6,851 3,540 9,806 13,901
Interest income, net and
other (99) (136) (147) (246) (404)
Earnings before income taxes 6,365 6,987 3,687 10,052 14,305
Income tax expense 2,367 2,214 1,373 3,740 4,813
Net earnings $ 3,998 4,773 2,314 6,312 9,492
Diluted earnings per share:
Net earnings $ 0.20 0.24 0.12 0.32 0.48
Diluted number of shares (000) 19,871 20,099 19,878 19,875 20,018
June 30, December 31, March 31, June 30,
2005 2004 2005 2004
------------ ------------ ------------ ------------
As
Restated
(a)
Selected Balance Sheet Data:
Cash, cash equivalents
and short-term
investments $ 22,455 32,716 26,439 79,112
Accounts receivable, net $ 213,477 192,145 208,795 201,812
Current assets $ 249,626 242,628 251,185 298,756
Total assets $ 363,312 359,019 366,196 410,952
Current liabilities $ 88,192 83,623 92,004 93,935
Shareholders' equity $ 268,394 267,190 266,708 309,411
For the three months ended
-------------------------------------------- For the six months ended
` June 30, June 30,
---------------------------- March 31, ----------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
Selected Cash
Flow Data:
Depreciation
expense $ 2,526 2,414 2,537 5,063 4,839
Capital expenditures $ 4,000 1,715 2,513 6,513 3,106
Dividends paid $ 2,172 1,767 2,168 4,340 3,532
Free cash flow for
the quarter ended
June 30, 2005
is shown below:
Net cash flow
provided by
operating
activities $ 5,505
Less: capital
expenditures (4,000)
Less: dividend
paid (2,172)
Free cash flow for
the quarter ended
June 30, 2005 $ (667)
For the three months ended
-------------------------------------------- For the six months ended
` June 30, June 30,
---------------------------- March 31, ----------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
As As
Restated Restated
(a) (a)
Selected Earnings and Other
Financial Data:
Revenues $ 286,411 264,839 265,919 552,330 520,826
Gross profit $ 66,246 62,927 60,785 127,031 124,091
Gross profit margin 23.1% 23.8% 22.9% 23.0% 23.8%
Operating and administrative
expenses as a percentage of
revenue 20.9% 21.7% 21.7% 21.3% 21.4%
Corporate expenses $ 4,043 3,672 4,190 8,233 6,800
Corporate expenses as a
percentage of revenue 1.4% 1.4% 1.6% 1.5% 1.3%
Operating profit margin 2.2% 2.6% 1.3% 1.8% 2.7%
Effective income tax rate 37.2% 31.7% 37.2% 37.2% 33.6%
Pre-tax return on
shareholders' equity - last
twelve months (b) 2.0% 9.2% 2.2% N/A N/A
For the three months ended
-------------------------------------------- For the six months ended
` June 30, June 30,
---------------------------- March 31, ----------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
As As
Restated Restated
(a) (a)
Selected Segment Data:
Business Solutions
Revenues $ 186,508 179,634 176,997 363,505 352,086
Gross profit 34,636 35,424 32,445 67,081 69,214
Gross profit margin 18.6% 19.7% 18.3% 18.5% 19.7%
Operating profit 3,753 5,045 3,336 7,089 10,923
Operating profit margin 2.0% 2.8% 1.9% 2.0% 3.1%
AndersElite
Revenues $ 46,695 40,387 41,810 88,505 79,902
Gross profit 11,687 9,926 10,542 22,229 19,763
Gross profit margin 25.0% 24.6% 25.2% 25.1% 24.7%
Operating profit 1,963 851 893 2,856 2,369
Operating profit margin 4.2% 2.1% 2.1% 3.2% 3.0%
Todays Staffing
Revenues $ 37,795 31,223 33,207 71,002 61,123
Gross profit 9,421 8,241 8,345 17,766 16,227
Gross profit margin 24.9% 26.4% 25.1% 25.0% 26.5%
Operating profit 839 834 (184) 655 1,290
Operating profit margin 2.2% 2.7% (0.6)% 0.9% 2.1%
Management Recruiters
International
Revenues $ 15,413 13,595 13,905 29,318 27,715
Gross profit 10,502 9,336 9,453 19,955 18,887
Gross profit margin 68.1% 68.7% 68.0% 68.1% 68.1%
Operating profit (c) 3,754 3,793 3,265 7,019 6,119
Operating profit margin 24.4% 27.9% 23.5% 23.9% 22.1%
For the three months ended
-------------------------------------------- For the six months ended
` June 30, June 30,
---------------------------- March 31, ----------------------------
2005 2004 2005 2005 2004
------------ ------------ ------------ ------------ ------------
As As
Restated Restated
(a) (a)
Business Solutions
Revenue by
Vertical:
CDI Information
Technology Services $ 65,536 73,112 63,783 129,319 142,375
CDI Process and
Industrial 87,055 69,190 79,675 166,730 134,536
CDI Aerospace 20,666 22,202 20,118 40,784 45,057
CDI Government
Services 11,228 12,866 11,321 22,549 25,526
CDI Life Sciences 2,023 2,264 2,100 4,123 4,592
Total Business
Solutions Revenue $ 186,508 179,634 176,997 363,505 352,086
(a) As disclosed previously in the company's Form 10-K for 2004, CDI restated
its earnings for the first three quarters of 2004 for adjustments impacting
its Business Solutions segment.
(b) Current quarter combined with the three preceding quarters earnings or
(loss) from operations before income taxes divided by the average
shareholders' equity.
(c) The three and six months operating profits in 2004 include a $1.3 million
gain from the sale of an MRI company-owned office.
SOURCE CDI Corp.
-0- 08/04/2005
/CONTACT: Vincent Webb, Vice President, Corporate Communications &
Marketing, +1-215-636-1240, Vince.Webb@cdicorp.com; or John Fanelli, Vice
President and Chief AccountingOfficer, +1-215-282-8180,
John.Fanelli@cdicorp.com, both of CDI Corp./
/First Call Analyst: /
/FCMN Contact: vince.webb@cdicorp.com /
/Web site: http://www.cdicorp.com