Daily News
View All NewsCDI revenue falls 7% in Q1, implementing improvement initiatives
First-quarter revenue fell 6.8% year over year at CDI Corp. (NYSE: CDI) to $257.5 million. Revenue fell in its professional staffing services and Management Recruiters International segments but edged up in its global engineering and technology solutions segment.
The Philadelphia-based staffing provider reported it is implementing multiple business improvement initiatives to deliver profitable growth and transform the company.
The company had announced a restructuring plan in December.
CDI ranks No. 21 on the US list of largest staffing and talent engagement firms. CDI also ranks No. 6 on the list of largest US engineering staffing providers, and No. 16 on the list of largest US providers of IT staffing.
| (US$ thousands) | Q1 2015 | Q1 2014 | % growth |
| Revenue | $257,458 | $276,272 | -6.8% |
| Gross profit | $46,770 | $50,763 | -7.9% |
| Gross margin percentage | 18.2% | 18.4% | |
| Net income | $387 | $2,041 | -81.0% |
Quote
“We are implementing with a sense of urgency multiple business improvement initiatives to deliver profitable growth and transform CDI,” said CEO and President Scott Freidheim. “We are adding new leadership in key corporate and operational roles, restoring revenue production capacity, enhancing service delivery, and pursuing corporate development opportunities. We look forward to communicating results of these and other actions in the coming quarters.”
Revenue by segment
| (US$ thousands) | Q1 2015 | Q1 2014 | % growth |
| Global Engineering and Technology Solutions | |||
| Oil, gas and chemicals | $38,792 | $32,543 | 19.2% |
| Aerospace and industrial equipment | $15,697 | $19,846 | -20.9% |
| Hi-Tech | $7,690 | $7,910 | -2.8% |
| Other | $20,342 | $21,955 | -7.3% |
| Total | $82,521 | $82,254 | 0.3% |
| Professional Staffing Services | |||
| Oil, gas and chemicals | $39,623 | $45,063 | -12.1% |
| Aerospace and industrial equipment | $19,351 | $19,917 | -2.8% |
| Hi-Tech | $51,326 | $60,134 | -14.6% |
| Other | $51,126 | $55,025 | -7.1% |
| Total | $161,426 | $180,139 | -10.4% |
| Management Recruiters International | |||
| Contract staffing | $10,318 | $11,072 | -6.8% |
| Royalties and franchise fees | $3,193 | $2,807 | 13.8% |
| Total | $13,511 | $13,879 | -2.7% |
Gross margin by segment
| Q1 2015 | Q1 2014 | |
| Global Engineering and Technology Solutions | 25.4% | 27.2% |
| Professional Services Staffing | 11.9% | 12.2% |
| Management Recruiters International | 48.6% | 46.2% |
Guidance
CDI expects second-quarter revenue in the range of $245 million to $255 million. The guidance reflects expected weakness in its North American staffing business, particularly within the oil, gas and chemicals vertical in its professional staffing services segment. The company expects the weakness to be partially offset by sequential growth in its global engineering and technology solutions segment in the oil, gas and chemicals vertical and the government services vertical as well as in its UK-based AndersElite staffing business.
Share price and market cap
Shares in CDI rose 1.17% to $13.86 in early afternoon trading today; CDI has a market cap of approximately $272.29 million, according to Yahoo!