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CDI revenue flat, net income down

April 30 2008

First-quarter revenue was flat at CDI Corp. (NYSE: CDI). The Philadelphia-based staffing and engineering services company posted revenue of $293.9 million in the first quarter.

CDI's first-quarter net income fell 6.4% to $7.9 million from $8.5 million in the first quarter of last year. Gross margin, however, improved to 24.2% from 23.2%.

"As anticipated, year-over-year revenue momentum slowed during the quarter, driven primarily by continued softness in IT staffing and some reductions in lower-margin engineering work," said President and CEO Roger Ballou. "We also saw flattening of permanent placement activity at MRI and Anders as client uncertainty led to delayed hiring decisions."

Revenue fell 14.1% to $56.4 million in its IT solutions segment, but rose 21.4% to $19.6 million in its Management Recruiters International unit.

CDI's engineering solutions division, its largest segment, posted a 3.7% increase in revenue to $156.2 million.

"The current environment is creating some headwind, particularly in the area of permanent placement as clients slow their hiring processes," Ballou said. "We anticipate that these general conditions could persist for several quarters and have made, and will continue to make, appropriate adjustments to our cost structure."

Second-quarter revenue could rise 2% to 4% year-over-year, he said.

For the first quarter ended March 31, 2008, compared with the same period in 2007.
Revenue: $293.9 million, +0.0%
Net income: $7.9 million, -6.4%


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