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View All NewsCDI reports Q4 revenue falls 11%
Engineering and IT staffing provider CDI Corp. (NYSE: CDI) reported fourth-quarter revenue fell 11.3%, but the decrease was 8.6% in constant currency. Revenue fell in all segments and net loss increased. However, gross margin edged up resulting primarily from a shift toward higher margin global engineering and technology solutions business from lower margin professional staffing services business.
| (US$ thousands) | Q4 2015 | Q4 2014 | % change |
| Revenue | $236,553 | $266,686 | -11.3% |
| Gross profit | $44,657 | $48,509 | -7.9% |
| Gross margin percentage | 18.9% | 18.2% | |
| Net income/loss | -$17,114 | -$8,917 | nm |
Philadelphia-based CDI ranks No. 20 on Staffing Industry Analysts’ list of largest staffing firms in the US.
Quote
“Our fourth quarter results reflect continued pressure from macroeconomic and discrete challenges within our concentrated client base,” said President and CEO Scott Freidheim. “However, throughout 2015, we strengthened client relationships and retention, increased operational discipline, enhanced our management team, and improved our strategic and financial position.”
Freidheim continued, “We start 2016 with a strategic plan centered on highly specialized talent deployed through staffing, project and managed solutions. We will transition our North American talent business to focus on high value-added skill-based practices; thus, we are creating a specialty talent and technology segment. In addition, we will integrate and position our new energy, chemicals and infrastructure business as a leading provider of engineering, design and project delivery solutions to small- and mid-cap projects in core infrastructure markets. This strategy embraces our company’s 65-year heritage and unique ability to deploy technical skills through flexible delivery models.”
Revenue by segment
| (US$ thousands) | Q4 2015 | Q4 2014 | % change |
| Global Engineering and Technology Solutions | |||
| Oil, gas and chemicals | $32,620 | $35,297 | -7.6% |
| Aerospace and industrial equipment | $13,691 | $15,968 | -14.3% |
| Hi-Tech | $7,872 | $7,854 | 0.2% |
| Other | $20,693 | $21,333 | -3.0% |
| Total | $74,876 | $80,452 | -6.9% |
| Professional Staffing Services | |||
| Oil, gas and chemicals | $31,370 | $43,423 | -27.8% |
| Aerospace and industrial equipment | $16,814 | $21,194 | -20.7% |
| Hi-Tech | $45,422 | $50,333 | -9.8% |
| Other | $54,919 | $56,441 | -2.7% |
| Total | $148,525 | $171,391 | -13.3% |
| Management Recruiters International | |||
| Contract staffing | $9,992 | $11,327 | -11.8% |
| Royalties and franchise fees | $3,160 | $3,516 | -10.1% |
| Total | $13,152 | $14,843 | -11.4% |
Gross margin by segment
| Q4 2015 | Q4 2014 | |
| Global Engineering and Technology Solutions | 25.2% | 25.5% |
| Professional Services Staffing | 13.0% | 12.2% |
| Management Recruiters International | 49.4% | 48.2% |
Full-year results
| (US$ thousands) | 2015 | 2014 | % change |
| Revenue | $985,494 | $1,122,972 | -12.2% |
| Gross profit | $184,901 | $206,557 | -10.5% |
| Gross margin percentage | 18.8% | 18.4% | |
| Net income/loss | -$37,086 | $3,082 | nm |
Guidance
CDI estimates first-quarter revenue in the range of $223 million to $228 million. The company reports the guidance anticipates continued weakness generally consistent with previously reported trends.
Share price and market cap
Shares in CDI fell 6.08% to $5.10 in afternoon trading today; CDI has a market cap of approximately $100.57 million, according to Yahoo!