Reporting Segments

The Company has the following three reporting segments:

•

Global Engineering and Technology Solutions (“GETS”) - The Company provides engineering and information technology solutions for its clients that involve the production of deliverable work products or services performed at a CDI facility or at a client's facility under the supervision of CDI personnel. These solutions typically include analysis of a client's engineering or information technology needs and the development of a solution that generally ranges in duration from several months to multiple years. Depending on the industry, engineering services can include such functions as feasibility studies, technology assessment, conceptual design, cost estimating, preliminary design, execution planning, procurement optimization, detailed design, testing and validation of regulatory compliance, technology integration and operating and maintenance support. Information technology services can include assessments, execution of business application services, web development, help desk support, quality assurance and testing and program management. GETS provides these solutions through a delivery model consisting of: centers of excellence, with concentrated skill sets required for larger, more complex projects; regional centers to service local needs of clients; client-centered offices to deliver site-specific services; and off-shore and near-shore centers to leverage low-cost design resources.

•

Professional Services Staffing (“PSS”) - The Company provides skilled technical and professional personnel to its clients for discrete periods of time to augment the client's workforce in times of project, seasonal, peak period or business cycle needs. These engagements can range from several months to multiple years in duration. The Company also provides permanent placement services. The Company provides professional staffing services to targeted industries that include managed services and managed staffing programs, functional staffing outsourcing and business advisory services. The Company delivers these services through its PSS delivery organization, which provides centralized global staffing delivery focused on select engineering and technology skill sets and competencies. During 2012, 2011 and 2010, IBM accounted for approximately 20%, 21% and 20%, respectively, of the Company’s consolidated revenue. In December 2011, the Company and IBM executed a new Master Statement of Work effective as of December 31, 2011 with a term of three years. IBM may terminate the contract with or without cause at any time and has the option to extend the contract by an additional three years, in one-year increments.

•

Management Recruiters International, Inc. (“MRI”) - MRI is a global franchisor that does business as MRINetwork^® and provides the use of its trademarks, business systems and training and support services to its franchisees who engage in the search and recruitment of executive, technical, professional and managerial personnel for employment by their clients. The MRI franchisees provide permanent placement services primarily under the brand names Management Recruiters^®, Sales Consultants^®, CompuSearch^® and OfficeMates 5^®. MRI also provides training and support, implementation services and back-office services to enable franchisees to pursue contract staffing opportunities.

For purposes of performance measurement, the Company charges certain expenses directly attributable to the reporting segments and allocates certain expenses and support costs. Support costs consist principally of employee benefit administration, accounting support, IT services and shared service center costs. Operating and administrative expenses that are not directly attributable to the reporting segments are classified as corporate. Identifiable assets of the reporting segments exclude corporate assets. Corporate assets consist principally of cash and certain prepaid expenses, non-trade accounts receivable, deferred tax assets attributable to the reporting segments, property and equipment and other assets.

Reporting segment data is presented in the following table:



	Year ended December 31,
	2012			2011			2010

Revenue:
GETS	$	325,046		$	323,546		$	280,552
PSS	710,268			667,662			584,421
MRI	69,644			68,595			61,316
Total revenue	$	1,104,958		$	1,059,803		$	926,289

Gross profit:
GETS	$	93,718		$	96,808		$	76,903
PSS	94,185			95,569			84,685
MRI	31,506			32,924			32,375
Total gross profit	$	219,409		$	225,301		$	193,963

Operating profit (loss):
GETS	$	25,725		$	14,979		$	11,828
PSS	20,528			22,187			(2,118		)
MRI	10,201			9,468			6,943
Corporate	(24,188		)	(26,259		)	(16,960		)
Operating profit (loss) ^{(1), (2), (3)}	32,266			20,375			(307		)
Equity in losses from affiliated companies	—			—			(2,299		)
Other (expense) income, net	(251		)	(245		)	(540		)
Income (loss) before income taxes	$	32,015		$	20,130		$	(3,146	)


⁽¹⁾	In 2011, the Company recorded an aggregate pre-tax charge of $8.1 million to "Restructuring and other related costs" in the consolidated statement of operations. The following table summarizes the amount of restructuring and other related costs recognized during the year ended December 31, 2011, by reporting segment:



	2011

GETS	$	4,467
PSS	2,622
MRI	372
Corporate	639
Restructuring and other related costs	$	8,100


⁽²⁾	In 2011, the Company's PSS segment recorded a $9.7 million benefit related to the successful legal appeal of the UK OFT matter.


⁽³⁾	In 2010, the Company's PSS segment recorded an $8.3 million goodwill impairment charge.

Inter-segment activity is not significant; therefore, revenue reported for each operating segment is substantially from external clients.

Total depreciation and amortization by reporting segment is presented in the table below for the indicated periods:



	Year ended December 31,
	2012		2011		2010

Depreciation and amortization:
GETS	$	5,171	$	5,761	$	5,265
PSS	840		1,210		1,281
MRI	538		400		443
Corporate	3,716		3,637		3,668
Total depreciation and amortization	$	10,265	$	11,008	$	10,657

Reporting segment asset data is presented in the following table for the indicated periods:



	December 31,
	2012		2011		2010

Assets:
GETS	$	144,055	$	130,730	$	135,179
PSS	150,318		162,835		163,727
MRI	26,723		28,697		26,698
Corporate	79,609		70,254		72,907
Total assets	$	400,705	$	392,516	$	398,511

Capital expenditure data by reporting segment is presented in the table below for the indicated periods:



	Year ended December 31,
	2012		2011		2010

Purchases of property and equipment:
GETS ⁽¹⁾	$	4,082	$	2,734	$	8,473
PSS	837		757		538
MRI	116		649		312
Corporate	1,190		1,518		2,526
Total purchases of property and equipment	$	6,225	$	5,658	$	11,849


⁽¹⁾	GETS purchases of property and equipment in 2010 include $5.7 million and $0.3 million of property and equipment purchases in the acquisitions of L.R. Kimball and DSPCon, respectively.

The Company is domiciled in the U.S. and its reporting segments (other than PSS) operate primarily in the U.S. and Canada. Revenue attributable to foreign countries is determined based on the client’s country of domicile. Revenue and fixed assets by geographic area are presented in the tables below for the indicated periods:



	Year ended December 31,
	2012		2011		2010

Revenue:
US	$	869,679	$	889,671	$	785,227
Canada	144,089		99,541		68,753
UK	59,967		55,900		62,467
Other	31,223		14,691		9,842
Total revenue	$	1,104,958	$	1,059,803	$	926,289



	December 31,
	2012		2011		2010

Property and equipment, net:
US	$	19,902	$	23,335	$	28,437
Canada	301		402		402
UK	1,724		1,404		1,946
Other	163		154		234
Total property and equipment, net	$	22,090	$	25,295	$	31,019