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View All NewsCDI reports Q3 revenue falls 17%
Engineering and IT staffing provider CDI Corp. (NYSE: CDI) reported third-quarter revenue fell 17.3%. Third-quarter revenue was down in all segments. However, gross margin improved.
CDI also reported a third-quarter net loss of $20.2 million compared to net income of $5.4 million in the year-ago quarter. The company recorded an impairment charge of $21.5 million in the third quarter that included charges to goodwill in the aerospace and industrial equipment business within its “global engineering and technology solutions” segment and in its UK-based AndersElite business in its “professional staffing services” segment.
Philadelphia-based CDI ranks No. 20 on Staffing Industry Analysts’ list of largest US staffing firms.
(US$ thousands) | Q3 2015 | Q3 2014 | % growth |
Revenue | $244,662 | $295,732 | -17.3% |
Gross profit | $46,827 | $54,488 | -14.1% |
Gross margin percentage | 19.1% | 18.4% | |
Net income/loss | -$20,202 | $5,441 | nm |
Quote
“We are continuing to make progress on key elements of our transformation and operational turnaround,” said CEO and President Scott Freidheim. “While consistent with previously articulated expectations, our third quarter 2015 results reflect the continuing macroeconomic and discrete challenges associated with our concentrated client base. As we move into 2016, our business should benefit from improving new business development and client retention, the strengthening of our operational leadership team, strategic transactions that enrich our client offerings, and our enhanced financial flexibility.”
Revenue by segment
(US$ thousands) | Q3 2015 | Q3 2014 | % growth |
Global Engineering and Technology Solutions | |||
Oil, gas and chemicals | $38,750 | $39,786 | -2.6% |
Aerospace and industrial equipment | $14,877 | $17,799 | -16.4% |
Hi-Tech | $7,724 | $8,273 | -6.6% |
Other | $22,942 | $22,530 | 1.8% |
Total | $84,293 | $88,388 | -4.6% |
Professional Staffing Services | |||
Oil, gas and chemicals | $32,583 | $51,386 | -36.6% |
Aerospace and industrial equipment | $17,038 | $21,216 | -19.7% |
Hi-Tech | $49,514 | $57,837 | -14.4% |
Other | $47,729 | $61,987 | -23.0% |
Total | $146,864 | $192,426 | -23.7% |
Management Recruiters International | |||
Contract staffing | $10,106 | $11,600 | -12.9% |
Royalties and franchise fees | $3,399 | $3,318 | 2.4% |
Total | $13,505 | $14,918 | -9.5% |
Gross margin by segment
Q3 2015 | Q3 2014 | |
Global Engineering and Technology Solutions | 26.2% | 27.6% |
Professional Services Staffing | 12.4% | 12.0% |
Management Recruiters International | 49.0% | 46.6% |
Guidance
CDI expects fourth-quarter revenue in the range of $230 million to $240 million, including revenue related to the EdgeRock and Ship Shape acquisition. The guidance reflects expected continued weakness in CDI’s staffing business, as well as reduced demand in its oil, gas and chemicals vertical in its global engineering and technology solutions segment largely resulting from reductions and delays in project spending.
Share price and market cap
Shares in CDI rose 4.12% to $8.60 in early afternoon trading today and CDI has a market cap of approximately $169.37 million, according to Yahoo!