CDI Corp Expects Q4 Revenue to Be In-line with Previous Guidance

CDI Corp. CDI today announced that its 2010 fourth quarter revenue will be in-line with previously provided guidance. The revenue growth reflects the continued underlying strength of the company's business in an improving economic environment. Subsequent to the company's revised guidance on January 10, 2011 and in connection with its year-end financial closing process, the company will record $3.0 million of additional operating charges. In addition, the company will record a number of other charges and impairments for the fourth quarter 2010 totaling $12.4 million, which are described below. The company will record an $8.0 million impairment charge related to a goodwill write-down in the company's AndersElite segment. This goodwill impairment charge is an estimate and will be finalized through a third-party valuation process. The final goodwill impairment charge, along with its effects on the company's provision for income taxes, if any, will be included in results of operations, planned to be filed in March with the company's Annual Report on Form 10-K. The company will also record a $1.0 million charge for writing off the company's investment in its Kuwait-based joint venture in its Engineering Solutions segment. Additionally, the company had a deferred tax asset of $2.8 million as a result of AndersElite's net operating losses. Because of a three year cumulative loss at AndersElite, the company is required to record a 100% valuation allowance against this deferred tax asset. Notwithstanding this write off, net operating losses can be carried forward indefinitely under current law in the UK and can be used against future profits. Finally, the company will record a tax expense of $0.6 million related to a non-realizable tax asset.