Cincinnati-based contract research organization (CRO) Kendle warned investors earlier this month that first quarter 2009 profits would be down, and down they are.

The company reported net income of $886,000 or $0.06 per share for the first quarter 2009, compared with net income of $4.1 million or $0.27 per diluted share for the same period last year. Net service revenues for the quarter totaled $108.1 million, compared with $1.14 million in the first quarter 2008.

Kendle chairman and CEO Candace Kendle warned shareholders earlier this month that first quarter revenues would be significantly lower than original forecasts. That news caused the company’s shares to plummet more than 50%. Following the company’s earnings release yesterday, Kendle’s share price increased in after-hours trading by half a percentage point to $9.61.

To cut costs, Kendle has implemented strict controls over discretionary spending, a hiring and wage freeze and “workforce optimization initiatives.”  The company said it plans to reorganize its leadership structure, ultimately saving between $17.5 million and $22.5 million in the second half of 2009.

“We are taking aggressive steps to enhance our business development efforts, realign our leadership and organizational structure and implement a series of margin improvement and cost reduction initiatives to move our business to the next level,” Kendle said in a company statement.

Senior vice president and chief financial officer (CFO) and secretary Karl “Buzz” Brenkert III abruptly left the CRO last week, after six years as CFO. He was replaced by Kendle’s vice president of accounting Keith Cheesman.