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US - CDI revenue falls 4%, converting wins takes longer than expected

August 01 2013

CDI Corp. (NYSE: CDI) reported a 4.0 percent decline in second-quarter revenue to $263.4 million compared to the same quarter last year. President and CEO Paulett Eberhart said it’s taking longer than expected to convert contract wins into revenue.

“We anticipate our new wins to convert into revenue at a progressively faster pace through the third and fourth quarters,” Eberhart said in a press release. “In addition, we saw declines in non-program staffing and MRI revenue as well as lower spending by our largest client and government accounts during the second quarter.”

The second-quarter revenue number is within the firm’s guidance of $260 million to $270 million.

Revenue fell across segments. Revenue fell 3.7 percent in the firm’s professional services staffing segment to $168.8 million.

Revenue in its global engineering and technology solutions segment fell 1.0 percent to $80.0 million.

CDI’s Management Recruiters International segment posted a 20.2 percent decline in second-quarter revenue to $14.7 million. However, gross margin in the segment improved to 47.2 percent from 45.3 percent in the year-ago quarter. It was the only segment of the three to record an increase in gross margin.

Second-quarter gross margin for CDI as a whole narrowed to 19.6 percent from 20.2 percent.

Net income fell 31.0 percent to $3.5 million.

CDI estimates third-quarter revenue of between $263 million and $273 million, a year-over-year decline of between 2.3 percent and 5.9 percent.

The Philadelphia-based firm ranks as the fifth-largest U.S. engineering staffing firm and 13th-largest U.S. information technology staffing firm.

CDI Corp. (NYSE: CDI)
 For the second quarter ended June 30, 2013, compared with the same period in the previous year.
 Revenue: $263.4 million, -4.0 percent
 Net income: $3.5 million, -31.0 percent

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