CDI Corp. (NYSE: CDI), Ciber Inc. (NYSE: CBR) and RCM Technologies Inc. (NASD GM: RCMT) reported first-quarter earnings results.
CDI first-quarter revenue falls 9%
Engineering and IT staffing provider CDI Corp. (NYSE: CDI) reported first-quarter revenue fell 9.3%. The decrease was 7.6% in constant currency.
Results include $10.0 million in revenue from EdgeRock Technologies LLC, acquired in October 2015 and now comprising CDI’s specialty talent vertical within its specialty talent and technology solutions segment.
Effective in the first quarter, CDI reports on four new operating segments: Enterprise talent, specialty talent and technology solutions, engineering solutions, and Management Recruiters International. Historical results have been reclassified for the sake of comparison.
Revenue decreased year over year in three of the company’s four reporting segments. Revenue in CDI’s enterprise talent segment, which includes North America and UK staffing, fell 13.5%. North America staffing revenue fell 12.6%, or 10.2% in constant currency, driven primarily by decreased spending among certain oil and gas pipeline clients and the company’s largest client. UK Staffing fell 17.8%, or 13.3% in constant currency, driven by softness in both network rail and general construction contract hiring.
Philadelphia-based CDI ranks No. 20 on Staffing Industry Analysts’ list of largest staffing firms in the US.
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“During the first quarter we made progress on implementing our long-term strategic plan. In multiple areas of our business, we are beginning to realize the benefits of our focus on client service and new business development,” CEO and President Scott Freidheim said. “While there is evidence of success from our performance improvement programs, much work remains. We will continue to channel resources to our strategic areas of focus to execute our plan.”
Revenue by segment
Gross margin by segment
Guidance
CDI estimates second-quarter revenue in the range of $225 million to $235 million. The company anticipates some sequential improvement in specialty talent and technology solutions, engineering solutions and MRI, offset by enterprise talent as a result of seasonality in the Western Canada oil and gas business within North America staffing.
Ciber Q1 revenue down 11% in constant currency
IT solutions and staffing provider Ciber Inc. (NYSE: CBR) reported first-quarter revenue fell 11% on a constant-currency basis.
North America revenue fell 6% while revenue in Ciber’s international division fell 21% year over year, down 16% in constant currency.
Ciber reported a net loss of $97.0 million in the first quarter, and gross margin narrowed.
Ciber recorded a non-cash goodwill impairment charge in the first quarter of $85.9 million for the write-down of goodwill related to its International segment.
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“We had a number of positive developments during the first quarter, including one of our strongest year-over-year bookings increases in recent periods, driven by last year’s focus on product, sales and marketing investments,” said President and CEO Michael Boustridge. “Nonetheless, it was a challenging period as weaker bookings during the first half of 2015, as well as our focus on removing poor business and a more rigorous financial review of new deals, resulted in a substantial revenue decline and greater margin pressure early in 2016.”
Revenue by segment
RCM revenue falls 2%
RCM Technologies Inc. (NASD GM: RCMT) — a provider of engineering, IT and healthcare staffing — reported revenue fell 1.6% in its first quarter ended April 2. Net income also declined.
On the last day of fiscal 2015, RCM disposed of its QAD Software Solutions business unit, part of the company’s IT segment, which generated $1.0 million in revenue and $600,000 in gross profit in the fiscal first quarter of 2015.
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“Consolidated results for the first quarter of fiscal 2016 were in line with management’s expectations,” said CFO Kevin Miller. “We expect a significant increase in demand from our Canadian Engineering clients in the second half of fiscal 2016 and beyond. We are ready to meet that demand; however, predicting the quarterly timing of the increase in demand can be a challenge. We anticipate that our second-quarter operating income results will continue to be soft as we manage our bench in Canada.”
