CDI Corp. Posts 12 Percent Decline; Stock Remains in Free Fall
March 4, 2016 – CDI Corp./(NYSE:CDI) posted 2015 revenues of $985.5 million, a decline of 12.2 percent from revenues of $1.123 billion the previous year. The company reported a loss of $37 million, or $1.88 per share. At Management Recruiters International, Inc. (MRI), the company’s executive search subsidiary, revenue fell 14.5 percent from $45.8 million to $40.0 million.
Fourth quarter revenue was $236.6 million, a decrease of 11.3 percent from the same period a year ago. Also in the quarter, the Philadelphia-based company reported a loss of $17.1 million or a loss of 87 cents. MRI’s revenue during the quarter decreased 11.4 percent compared to the prior year.
“Our fourth quarter results reflect continued pressure from macroeconomic and discrete challenges within our concentrated client base,” said Scott J. Freidheim, president and chief executive officer. Mr. Freidheim said that although the year’s performance was subpar, CDI strengthened many client relationships, increased operational discipline, enhanced its management team, and improved its strategic position.
“We start 2016 with a strategic plan centered on highly specialized talent deployed through staffing, project and managed solutions,” said Mr. Freidheim. “We will transition our North American talent business to focus on high, value-added skill-based practices.” To accomplish this, the company is creating a specialty talent and technology segment.
For the current quarter ending in April, CDI said it expects revenue in the range of $223 million to $228 million, a bit below its current quarter just reported.
During the fourth quarter, its board of directors approved a stock repurchase program. Under the plan, CDI is authorized to repurchase up to $20 million of its common stock from time to time and at prices considered appropriate by the company.
During the quarter, MRINetwork, the company’s search subsidiary, appointed Jill Albrinck as its new president. She previously served as chief operating officer of DeVry University.
“Jill will drive a new phase of strategic growth for MRINetwork,” said Mr. Freidheim. “Her leadership experience and track record of successfully growing businesses makes her the right person to leverage MRINetwork’s 50 years of innovation in talent solutions.”
To augment its new technology business segment, CDI closed its acquisition of EdgeRock Technologies during the quarter. EdgeRock is a privately held, specialist IT staffing firm headquartered in Boston. The acquisition provides CDI with a national platform for providing highly-skilled specialist IT staffing to companies like SAP, Oracle and PeopleSoft. EdgeRock is now a division of CDI but will continue to operate under the EdgeRock Technology Partners brand name.
CDI’s shares have declined 20 percent since the beginning of the year. In the final minutes of trading on Wednesday, shares hit $5.43, a fall of 71 percent in the last 12 months.
Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media
