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View All NewsCDI revenue falls 4% in Q4, posts net loss
Fourth-quarter revenue fell 3.8% at CDI Corp. (NYSE: CDI) to $266.7 million. And the Philadelphia-based staffing provider announced a net loss of $8.9 million in the fourth quarter compared to net income of $2.3 million in the year-ago quarter.
CDI reported $14.7 million in impairment charges in the fourth quarter in its global engineering and technology solutions segment. The charges were related to impairment of goodwill, definite-lived intangibles and other assets.
The company, which ranks as the 21st-largest US staffing provider, also reported $3.6 million in restructuring costs for the quarter from a restructuring plan begun in December.
| (US$ thousands) | Q4 2014 | Q4 2013 | % growth |
| Revenue | $266,686 | $277,114 | -3.8% |
| Gross profit | $48,509 | $52,248 | -7.2% |
| Gross margin percentage | 18.2% | 18.9% | |
| Net income/loss | -$8,917 | $2,332 | nm |
Quote
“We faced multiple challenges during the quarter including lower volumes from the company’s largest client and declining performance in the North America regional staffing business both as highlighted on our last earnings call,” CEO Scott Freidheim said in a conference call with analysts. “We also recognized project cost overruns related to certain fixed price contracts in [the global engineering and technology solutions segment’s oil, gas and chemicals business]. CDI reported a similar problem in the second quarter related to those same contracts. And we saw negative foreign currency impact related to the Canadian dollar and the British pound. Despite these challenges, we have strengthened multiple areas. We experienced solid revenue growth in [oil, gas and chemicals], both staffing and engineering. We saw continued revenue growth in the UK, and improvement in those bottom-line economics. And we continued to demonstrate cost management discipline.”
Revenue by segment
| (US$ thousands) | Q4 2014 | Q4 2013 | % growth |
| Global Engineering and Technology Solutions | |||
| Oil, gas and chemicals | $35,297 | $31,015 | 13.8% |
| Aerospace and industrial equipment | $15,968 | $20,334 | -21.5% |
| Hi-Tech | $7,854 | $7,705 | 1.9% |
| Other | $21,333 | $22,752 | -6.2% |
| Total | $80,452 | $81,806 | -1.7% |
| Professional Staffing Services | |||
| Oil, gas and chemicals | $43,423 | $42,928 | 1.2% |
| Aerospace and industrial equipment | $21,194 | $18,144 | 16.8% |
| Hi-Tech | $50,333 | $65,803 | -23.5% |
| Other | $56,441 | $53,854 | 4.8% |
| Total | $171,391 | $180,729 | -5.2% |
| Management Recruiters International | |||
| Contract staffing | $11,327 | $11,047 | 2.5% |
| Royalties and franchise fees | $3,516 | $3,532 | -0.5% |
| Total | $14,843 | $14,579 | 1.8% |
Gross margin by segment
| Q4 2014 | Q4 2013 | |
| Global Engineering and Technology Solutions | 25.5% | 27.9% |
| Professional Services Staffing | 12.2% | 12.4% |
| Management Recruiters International | 48.2% | 47.9% |
Full-year results
| (US$ thousands) | 2014 | 2013 | % growth |
| Revenue | $1,122,972 | $1,087,859 | 3.2% |
| Gross profit | $206,557 | $206,641 | 0.0% |
| Gross margin percentage | 18.4% | 19.0% | |
| Net income | $3,017 | $12,948 | -76.7% |
Guidance
CDI expects first-quarter revenue in the range of $250 million to $260 million.
Share price and market cap
Shares in CDI fell 14.37% to $15.78 in early afternoon trading today and CDI has a market cap of approximately $309.61 million, according to Yahoo!