May 9, 2016 – CDI Corp./(NYSE:CDI) posted first quarter revenues of $233.5 million, a decrease of 9.3 percent from revenues of $257.5 million a year ago. The Philadelphia-based company had expected revenue in the range of $223 million to $228 million.
Results include $10 million in revenue from EdgeRock Technologies LLC, acquired in October and now comprising CDI’s specialty talent vertical within its talent and technology solutions segment.
CDI posted a net loss of $4.8 million, or $0.24 per diluted share, compared to earnings of $0.5 million, or $0.02 per diluted share, during the same period last year.
Effective this quarter, CDI reports on four new operating segments: Enterprise talent, specialty talent & technology solutions, engineering solutions, and Management Recruiters International (MRINetwork).
During the quarter, MRINetwork, the company’s executive search subsidiary, posted a revenue drop of $1.3 million or 9.5 percent compared to the prior year. MRI appointed Jill Albrinck as its new president in January. She previously served as chief operating officer of DeVry University.
Revenue decreased year-over-year in the three other operating segments as well. Revenue in CDI’s enterprise talent segment, which includes North America and U.K. staffing, fell 13.5 percent. North America staffing revenue fell 12.6 percent, or 10.2 percent in constant currency, driven primarily by decreased spending among certain oil & gas pipeline clients and the company’s largest client. U.K. staffing fell 17.8 percent, or 13.3 percent in constant currency, driven by softness in both network rail and general construction contract hiring.
“Jill will drive a new phase of strategic growth for MRINetwork,” said Scott J. Freidheim, CSI president and chief executive officer. “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.”
During the quarter, CDI’s board of directors approved a stock repurchase program. The company is authorized to repurchase up to $20 million of its common stock from time to time and at prices considered appropriate by the company. In connection with the repurchase program, the board also approved the elimination of the company’s dividend, currently at a quarterly rate of $0.13 per share.
“During the first quarter we made progress on implementing our long-term strategic plan. In multiple areas of our business, we are beginning to realize the benefits of our focus on client service and new business development,” said Mr. Freidheim. “While there is evidence of success from our performance improvement programs, much work remains. We will continue to channel resources to our strategic areas of focus to execute our plan.”
CDI estimates second quarter revenue in the range of $225 million to $235 million. The company anticipates some sequential improvement in specialty talent and technology solutions, engineering solutions and MRI.
Shares in CDI fell 5.58 percent to $6.09 in afternoon trading Friday; CDI has a market cap of approximately $120 million.
Contributed by Dale M. Zupsansky, Managing Editor, Hunt Scanlon Media