XML 222 R20.htm IDEA: XBRL DOCUMENT v3.5.0.2
Reporting Segments
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Reporting Segments
Reporting Segments

During December 2015, the Company adopted a plan to deliver improved performance and efficiencies through increased strategic focus and operational realignment. As a result of this realignment, certain historical segment financial information has been reclassified to conform to the current period segment presentation that became effective during the first quarter of 2016. This reclassification did not impact any previously reported consolidated revenues, gross profit or results of operations.
The Company's reporting segments are as follows:
•
Enterprise Talent - Enterprise Talent provides staff augmentation, placement and other staffing-related services to support its clients’ access to engineering and technology personnel on a temporary or permanent basis. Enterprise Talent focuses on delivering its services to medium and larger sized enterprises that have ongoing needs for skilled and technical labor. The duration of individual client engagements can range from several months to multiple years based on a client’s project, seasonal or business cycle needs. In addition, Enterprise Talent offers enterprise clients managed staffing program services, vendor management solutions, certification management solutions, and recruitment process outsourcing solutions. Enterprise Talent currently operates in North America under the CDI® brand name. On September 16, 2016, CDI completed the sale of Anders, the Company's UK staffing and recruitment business. See Note—7 Acquisitions and Dispositions.
•
Specialty Talent and Technology Solutions - Specialty Talent and Technology Solutions provides clients with specialized technology talent and solutions through a flexible delivery model that spans staff augmentation and placement services, project execution and management services, and outsourced managed services. Specialty Talent, currently comprised entirely of EdgeRock, provides staff augmentation services focused on highly specialized information technology skillsets, including enterprise resource planning, business intelligence, analytics, infrastructure and application management and development. Technology Solutions provides a range of information technology professional services in a consult, integrate and operate model. These services include IT strategy and consulting, assessments, execution of IT infrastructure and IT engineering solutions, business application solutions, digital marketing services, service management, quality assurance and testing, and program management.
•
Engineering Solutions - Engineering Solutions provides engineering design, as well as complete physical asset and product delivery solutions for its clients. Engineering design principally involves the production of construction and/or technical documentation and specifications performed at a CDI facility or at a client's facility under the supervision of CDI personnel. Complete physical asset and product delivery solutions involve services that manage the integration of all supply chain contributors to a new or upgraded industrial production or infrastructure asset, naval asset or in support of aerospace and industrial original equipment manufacturers. Engineering Solutions is organized around the following business verticals: Energy, Chemicals and Infrastructure (EC&I), Aerospace and Industrial Equipment (AIE) and Government Services.
◦
EC&I serves producers and operators of energy, chemicals, industrial, education and civil infrastructures with a full range of engineering solutions. Specific services including up-front planning, engineering design, industrial and commercial architecture, design/build, transportation and civil engineering, site services, procurement, construction management, start up and commissioning.
◦
AIE serves commercial and defense aviation, as well as industrial original equipment manufacturers, with design and manufacturing engineering services, including mechanical and electrical systems design, drafting, engineering analysis, software design and verification, validation and testing, and tooling design and development.
◦
Government Services primarily serves the U.S. Department of Defense and, in particular the U.S. Navy, with a variety of design and engineering services, including naval architecture, ship alteration, systems modification and installation, technical documentation and training, logistics management, marine manufacturing and aviation engineering.
Within each of the verticals, Engineering Solutions provides these solutions through a services delivery model consisting of skill-based centers of excellence, together with regional offices to serve more localized project or client needs.
•
Management Recruiters International (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 MRINetwork®, Management Recruiters®and Sales Consultants®. MRI also provides training and support, implementation and back-office services to enable franchisees to pursue contract staffing opportunities.
Inter-segment revenue is eliminated in consolidation and is not significant. For purposes of performance measurement, the Company charges certain expenses directly attributable to the reporting segments and allocates certain other expenses and support costs. Support costs consist principally of employee benefits 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 all cash and cash equivalents, all current and deferred income tax assets, certain prepaid expenses, other current assets, certain property and equipment and certain other non-current assets.

Reporting segment operations data is presented in the following table for the indicated periods:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Revenue:
 
 
 
 
 
 
 
Enterprise Talent (1)
$
127,488

 
$
146,863

 
$
400,617

 
$
457,681

Specialty Talent and Technology Solutions (2)
18,938

 
7,724

 
56,460

 
23,315

Engineering Solutions
60,852

 
76,570

 
185,259

 
227,937

MRI
12,982

 
13,505

 
38,141

 
40,008

Total revenue
$
220,260

 
$
244,662

 
$
680,477

 
$
748,941

 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
Enterprise Talent (1)
$
13,848

 
$
18,165

 
$
45,763

 
$
55,751

Specialty Talent and Technology Solutions (2)
5,626

 
2,422

 
16,448

 
7,579

Engineering Solutions
14,859

 
19,624

 
45,112

 
57,257

MRI
6,200

 
6,616

 
18,580

 
19,657

Total gross profit
$
40,533

 
$
46,827

 
$
125,903

 
$
140,244

 
 
 
 
 
 
 
 
Operating profit (loss):
 
 
 
 
 
 
 
Enterprise Talent (1), (3), (4)
$
(10,299
)
 
$
(8,955
)
 
$
(9,622
)
 
$
(1,686
)
Specialty Talent and Technology Solutions (2), (4), (5)
(575
)
 
188

 
(566
)
 
1,357

Engineering Solutions (3), (4), (6)
(3,856
)
 
(10,123
)
 
(8,734
)
 
(9,613
)
MRI (4)
1,102

 
1,927

 
2,766

 
4,957

Corporate (4), (7)
(4,293
)
 
(5,166
)
 
(12,046
)
 
(14,801
)
Total operating loss
(17,921
)
 
(22,129
)
 
(28,202
)
 
(19,786
)
Other income (expense), net
(112
)
 
683

 
(713
)
 
599

Loss before income taxes
$
(18,033
)
 
$
(21,446
)
 
$
(28,915
)
 
$
(19,187
)

 
(1) 
On September 16, 2016, the Company completed the sale of Anders, the Company's UK staffing and recruitment business, which is included in Enterprise Talent, and recorded a charge of $11.3 million on disposition. Anders results are presented in the following table for the indicated periods (excluding allocation of corporate costs):
    
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Revenue
$
15,835

 
$
25,812

 
$
59,302

 
$
79,972

Gross Profit
2,446

 
4,504

 
9,758

 
13,507

Operating and administrative expenses
2,874

 
4,755

 
11,542

 
14,545

Operating loss
(428
)
 
(251
)
 
(1,784
)
 
(1,058
)

(2) 
On October 6, 2015, the Company acquired EdgeRock, which is included in Specialty Talent and Technology Solutions.
(3) 
In the third quarter of 2015, the Company recorded an aggregate charge of $21.5 million related to the impairment of goodwill and certain fixed assets, comprised of Enterprise Talent $10.7 million and Engineering Solutions $10.9 million.
(4) 
The following table summarizes the amount of restructuring and other related costs recognized by reporting segment for the indicated periods:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Restructuring and other related costs:
 
 
 
 
 
 
 
Enterprise Talent
$
331

 
$
331

 
$
433

 
$
378

Specialty Talent and Technology Solutions
215

 
—

 
215

 
—

Engineering Solutions
2,504

 
235

 
2,690

 
235

MRI
206

 
—

 
206

 
—

Corporate
222

 
—

 
223

 
—

Total restructuring and other related costs
$
3,478

 
$
566

 
$
3,767

 
$
613


(5) 
In the first quarter of 2016, the Company's Specialty Talent and Technology Solutions segment recorded a benefit to "Operating and administrative expenses" of $0.8 million related to the reversal of the EdgeRock acquisition earnout liability.
(6) 
In the first quarter of 2015, the Company's Engineering Solutions segment recorded a charge of $0.3 million related to the loss on disposition of the Company's controlling interest in a Mexico-based engineering design company.
(7) 
In the third quarter of 2015, the Company recorded a pre-tax gain of $0.8 million for a sale of a non-operating corporate asset. Proceeds from the sale were $1.2 million.


Reporting segment asset data is presented in the following table for the indicated periods:
 
 
September 30,
 
December 31,
 
 
2016
 
2015
 
 
 
 
 
Assets:
 
 
 
 
Enterprise Talent (1)
 
$
121,862

 
$
137,695

Specialty Talent and Technology Solutions
 
39,531

 
40,127

Engineering Solutions
 
88,294

 
93,810

MRI
 
23,023

 
23,273

Corporate
 
41,231

 
44,192

Total assets
 
$
313,941

 
$
339,097


 
(1) 
On September 16, 2016, the Company completed the sale of Anders, the Company's UK staffing and recruitment business, which is included in Enterprise Talent.


Reporting segment depreciation and amortization data is presented in the following table for the indicated periods:
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
2016
 
2015
 
2016
 
2015
 
 
 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
 
 
Enterprise Talent (1)
$
278

 
$
259

 
$
909

 
$
925

Specialty Talent and Technology Solutions (2)
522

 
88

 
2,176

 
233

Engineering Solutions
1,117

 
1,431

 
3,585

 
4,447

MRI
73

 
65

 
205

 
227

Corporate
414

 
456

 
1,236

 
1,479

Total Depreciation and amortization
$
2,404

 
$
2,299

 
$
8,111

 
$
7,311


 
(1) 
On September 16, 2016, the Company completed the sale of Anders, the Company's UK staffing and recruitment business, which is included in Enterprise Talent. Anders depreciation and amortization included in the three months ended September 30, 2016 and 2015 was $0.1 million and $0.1 million. Anders depreciation and amortization included in the nine months ended September 30, 2016 and 2015 was $0.4 million and $0.5 million.
(2) 
On October 6, 2015, the Company acquired EdgeRock, which is included in Specialty Talent and Technology Solutions.