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 Marion Paige (Admin) posted on Friday, September 29, 2000 - 05:13 pm
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CDI Corp. Announces Anticipated EPS for the Third Quarter 2000
September 29, 2000 8:33 AM
PHILADELPHIA, Sept. 29 /PRNewswire/ -- CDI Corp. (NYSE: CDI) today announced that it anticipates
earnings per share from continuing operations in the range of $0.58 to $0.61 per share for the third
quarter ending September 30, 2000. CDI earned $0.70 per diluted share from continuing operations in
the third quarter of 1999.
The company anticipates that it will achieve year-over-year growth in consolidated revenue for the third
quarter of approximately 7 percent, generally consistent with its rate of revenue growth during the first
half of the year. However, a significant decrease in third quarter earnings per share is primarily
attributable to the rapid wind-down of a high-margin telecommunications project. When the contract
was signed in March, it was to encompass a period of four years and communities in two states.
However, following the completion of the customer's merger on June 30, there has been a reduction in
requirements which dramatically escalated in September. CDI anticipates a continuing negative impact
on earnings per share continuing into the fourth quarter.
During the second quarter, the project contributed approximately $0.08 in earnings per share. In the
third quarter, the impact of the project winding down is a negative $0.04 in earnings per share,
representing a $0.12 swing in earnings per share quarter to quarter. A portion of this loss is attributable
to CDI's expansion of its telecommunication division infrastructure, including its truck fleet, technician
equipment, facility leases and management personnel.
The project has enabled CDI's telecommunications division to develop considerable expertise and
experience in supporting the installation and maintenance of broadband technology. As a result, the
company has signed a new contract to support the broadband deployment initiatives of another
telecommunications customer and is close to agreements with several additional prospects at this
time. In the fourth quarter, this new business will contribute only a small percentage of the profits CDI
had anticipated from the lost work.
"Significant growth was being driven in the first half of 2000 within Technical Services'
telecommunications division by a large customer which in the latter part of the third quarter significantly
and unexpectedly reduced its support for the deployment of the specific broadband video technology
involved in this project. Because this involved some of our highest-margin services, we are seeing a
disproportionately negative impact on our earnings although we have maintained solid revenue growth
for the company as a whole," said Mitch Wienick, CDI Corp. President and Chief Executive Officer.
"Despite this short-term setback, we are continuing to execute our strategy of expanding the customer
base of our telecommunications operation and we are achieving success in developing a pipeline of
new business, although it will take some time to replace the lost earnings. We believe there is a
significant opportunity for long term growth in broadband technology and telecommunications in
general," Wienick said.
Wienick said the company expects to achieve solid year-over-year growth in consolidated revenue
during the fourth quarter of 2000 but the company anticipates fourth quarter 2000 earnings per share
will be approximately 10 to 15 percent lower than earnings per share in the same period a year ago,
primarily as a result of the wind-down of the high-margin telecommunications project. CDI Corp. earned
$0.64 per share from continuing operations in the fourth quarter of 1999.
CDI will report third quarter financial results on October 23, 2000.
Conference Call/Webcast
CDI Corp. will conduct a conference call at 11 a.m. (EDT) today to further discuss this announcement.
The conference call will be broadcast live over the Internet and can be accessed by any interested
party at www.streetfusion.com. An online replay will be available at www.streetfusion.com for 14 days
after the call.
Company Information
Philadelphia-based CDI Corp., including its Management Recruiters International and Todays Staffing
subsidiaries, comprises the world's largest search and recruitment organization and is a global top 10
provider of staffing, outsourcing and technical consulting services. In 1999, nearly 100,000 people
worked on company assignments, including specialists in information technology, engineering and
engineering support and telecommunications, and legal, administrative and office support. MRI placed
another 35,000 people in a wide range of careers. In 1999, CDI had revenues of more than $1.6 billion.
CDI and its franchisees operate more than 1,325 offices in 18 countries. For more information about
CDI services and job opportunities, visit www.cdicorp.com .
Safe Harbor Statement
Certain information in this news release contains forward-looking statements as such term is defined in
Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Certain forward-looking statements can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "will," "should," "seeks," "approximately," "intends," "plans,"
"estimates," or "anticipates" or the negative thereof or other comparable terminology, or by discussions
of strategy, plans or intentions. Forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those in the forward-looking statements. These include
risks and uncertainties such as competitive market pressures, material changes in demand from larger
customers, availability of labor, the company's performance on contracts, changes in customers'
attitudes towards outsourcing, government policies or judicial decisions adverse to the staffing industry,
changes in economic conditions, unforeseen events associated with the disposition of discontinued
operations, delays or unexpected costs associated with implementation of computer systems, delays
or unexpected costs in making modifications to existing software and converting to new software to
resolve issues related to Year 2000 and failure of third parties to provide Year 2000 compliant products
and services. Readers are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof. The company assumes no obligation to update such
information.
CONTACT: Greg Cowan, Executive Vice President, Chief Financial Officer, 215-636-1207, or e-mail,
greg.cowan@cdicorp.com, or Tim Fitzpatrick, Vice President, Corporate Communications,
215-636-1107, or e-mail, tim.fitzpatrick@cdicorp.com
08:17 EDT |
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