##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549





FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended June 30, 2010

OR



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from
 to

Commission File Number 001-05519





CDI Corp.

(Exact name of registrant as specified in its charter)







|                         |  |                                        
|------------------------ |  | ---------------------------------------
|Pennsylvania             |  | 23-2394430                             
|(State of incorporation) |  | (I.R.S. Employer
Identification Number)

1717 Arch Street,
35thFloor, Philadelphia, PA 19103-2768

(Address of principal executive offices)

(215) 569-2200

(Registrants telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes  x    No  
 ̈

Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for shorter period that the registrant was
required to submit and post such files).

Yes   ̈    No  
 ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                           |  |                      |  |                                               |  |                              
|-------------------------- |  | -------------------- |  | --------------------------------------------- |  | -----------------------------
|Large accelerated filer   ̈ |  | Accelerated filer  x |  | Non-accelerated filer    ̈                     |  | Smaller reporting company    ̈
|                           |  |                      |  | (Do not check if a smaller
reporting company) |  |                              

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes   ̈     No  
x

The number of shares outstanding of each of the registrants classes of common stock as
of August 3, 2010 was as follows:



|                                               |  |                  
|---------------------------------------------- |  | -----------------
|Common stock, $.10 par value per share         |  | 19,034,725 shares
|Class B common stock, $.10 par value per share |  | None             









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##### Table of Contents

CDI CORP.

TABLE OF CONTENTS



|                  |  |                       |  |                                                                                                           |  |   
|----------------- |  | --------------------- |  | --------------------------------------------------------------------------------------------------------- |  | --
|Part I:           |  | FINANCIAL INFORMATION |  |                                                                                                          
|                  |  |                       | 
|                  |  | Item 1.               |  | Financial Statements (Unaudited)                                                                          |  | 2 
|                  |  |                       | 
|                  |  |                       |  | Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009                                     |  | 2 
|                  |  |                       | 
|                  |  |                       |  | Consolidated Statements of Operations for the three and six months ended June 30, 2010 and
2009           |  | 3 
|                  |  |                       | 
|                  |  |                       |  | Consolidated Statements of Shareholders Equity for the three and six months endedJune 30, 2010 and
 2009 |  | 4 
|                  |  |                       | 
|                  |  |                       |  | Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009                     |  | 5 
|                  |  |                       | 
|                  |  |                       |  | Notes to Consolidated Financial Statements                                                                |  | 6 
|                  |  |                       | 
|                  |  | Item 2.               |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                     |  | 15
|                  |  |                       | 
|                  |  | Item 3.               |  | Quantitative and Qualitative Disclosures about Market Risks                                               |  | 33
|                  |  |                       | 
|                  |  | Item 4.               |  | Controls and Procedures                                                                                   |  | 34
|                  |  |                      
|Part II:          |  | OTHER INFORMATION     |  |                                                                                                          
|                  |  |                       | 
|                  |  | Item 1.               |  | Legal Proceedings                                                                                         |  | 35
|                  |  |                       | 
|                  |  | Item 1A.              |  | Risk Factors                                                                                              |  | 35
|                  |  |                       | 
|                  |  | Item 2.               |  | Unregistered Sales of Equity Securities and Use of Proceeds                                               |  | 35
|                  |  |                       | 
|                  |  | Item 3.               |  | Defaults Upon Senior Securities                                                                           |  | 35
|                  |  |                       | 
|                  |  | Item 4.               |  | Removed and Reserved                                                                                      |  | 35
|                  |  |                       | 
|                  |  | Item 5.               |  | Other Information                                                                                         |  | 35
|                  |  |                       | 
|                  |  | Item 6.               |  | Exhibits                                                                                                  |  | 36
|                  | 
|SIGNATURE         |  | 37                   
|                  | 
|INDEX TO EXHIBITS |  | 38                   



1



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##### Table of Contents

PART 1. FINANCIAL INFORMATION



|Item 1. | FINANCIAL STATEMENTS(Unaudited)
|------- | -------------------------------

CDI CORP. AND SUBSIDIARIES

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share data)



|                                                                                                                                              |  |              |         |   |                         |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------ | ------- | - | ----------------------- | - | ------- | -
|                                                                                                                                              |  | June 30,2010 |         |   | December 31,       2009 |  
|Assets                                                                                                                                        |  |              |         |   |                         |   |         |  
|Current assets:                                                                                                                               |  |              |         |   |                         |   |         |  
|Cash and cash equivalents                                                                                                                     |  | $            | 27,437  |   |                         | $ | 73,528  |  
|Accounts receivable, less allowance for doubtful accounts of $6,877 - June 30, 2010; $6,887 - December 31, 2009                               |  |              | 213,059 |   |                         |   | 176,677 |  
|Prepaid expenses and other current assets                                                                                                     |  |              | 6,646   |   |                         |   | 6,363   |  
|Prepaid income taxes                                                                                                                          |  |              | 1,872   |   |                         |   | 2,114   |  
|Deferred income taxes                                                                                                                         |  |              | 5,704   |   |                         |   | 6,015   |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total current assets                                                                                                                          |  |              | 254,718 |   |                         |   | 264,697 |  
|Property and equipment, net                                                                                                                   |  |              | 32,983  |   |                         |   | 29,558  |  
|Deferred income taxes                                                                                                                         |  |              | 9,479   |   |                         |   | 9,615   |  
|Goodwill and other intangible assets                                                                                                          |  |              | 80,861  |   |                         |   | 60,914  |  
|Other non-current assets                                                                                                                      |  |              | 9,359   |   |                         |   | 10,250  |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total assets                                                                                                                                  |  | $            | 387,400 |   |                         | $ | 375,034 |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Liabilities and Shareholders Equity                                                                                                          |  |              |         |   |                         |   |         |  
|Current liabilities:                                                                                                                          |  |              |         |   |                         |   |         |  
|Cash overdraft                                                                                                                                |  | $            | 1,227   |   |                         | $ | 2,843   |  
|Accounts payable                                                                                                                              |  |              | 30,754  |   |                         |   | 25,176  |  
|Withheld payroll taxes                                                                                                                        |  |              | 4,007   |   |                         |   | 1,063   |  
|Accrued compensation and related expenses                                                                                                     |  |              | 33,597  |   |                         |   | 28,435  |  
|Unearned revenue                                                                                                                              |  |              | 5,161   |   |                         |   | 64      |  
|Other accrued expenses and other current liabilities                                                                                          |  |              | 27,754  |   |                         |   | 29,612  |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total current liabilities                                                                                                                     |  |              | 102,500 |   |                         |   | 87,193  |  
|Deferred compensation and other non-current liabilities                                                                                       |  |              | 12,710  |   |                         |   | 12,945  |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total liabilities                                                                                                                             |  |              | 115,210 |   |                         |   | 100,138 |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Commitments and Contingencies (Note 9)                                                                                                        |  |              |         |   |                         |   |         |  
|Shareholders equity:                                                                                                                         |  |              |         |   |                         |   |         |  
|Preferred stock, $.10 par value - authorized 1,000,000 shares; none issued                                                                    |  |              |        |   |                         |   |        |  
|Common stock, $.10 par value - authorized 100,000,000 shares; issued 21,476,715 shares - June 30, 2010; 21,428,738 shares -
December 31, 2009 |  |              | 2,148   |   |                         |   | 2,143   |  
|Class B common stock, $.10 par value - authorized 3,174,891 shares; none issued                                                               |  |              |        |   |                         |   |        |  
|Additional paid-in-capital                                                                                                                    |  |              | 58,837  |   |                         |   | 57,577  |  
|Retained earnings                                                                                                                             |  |              | 266,673 |   |                         |   | 269,225 |  
|Accumulated other comprehensive loss                                                                                                          |  |              | (3,337  | ) |                         |   | (1,824  | )
|Less common stock in treasury, at cost - 2,456,175 shares - June 30, 2010 and December 31, 2009                                               |  |              | (52,366 | ) |                         |   | (52,366 | )
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total CDI shareholders equity                                                                                                                |  |              | 271,955 |   |                         |   | 274,755 |  
|Noncontrolling interest                                                                                                                       |  |              | 235     |   |                         |   | 141     |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total shareholders equity                                                                                                                    |  |              | 272,190 |   |                         |   | 274,896 |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  
|Total liabilities and shareholders equity                                                                                                    |  | $            | 387,400 |   |                         | $ | 375,034 |  
|                                                                                                                                              |  |              |         |   |                         |   |         |  

See accompanying notes to consolidated financial statements.



2



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Consolidated Statements of Operations

(Unaudited)

(in thousands, except per share data)



|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|--------------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                |  | Three Months EndedJune 30, |         |   | Six Months
EndedJune 30, |  
|                                                                |  | 2010                       |         |   | 2009                     |   |         | 2010 |  |   | 2009    |  
|Revenue                                                         |  | $                          | 218,982 |   |                          | $ | 215,426 |      |  | $ | 428,922 |   |  | $ | 444,078 |  
|Cost of services                                                |  |                            | 174,279 |   |                          |   | 171,147 |      |  |   | 342,712 |   |  |   | 352,372 |  
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Gross profit                                                    |  |                            | 44,703  |   |                          |   | 44,279  |      |  |   | 86,210  |   |  |   | 91,706  |  
|Operating and administrative expenses                           |  |                            | 41,135  |   |                          |   | 43,751  |      |  |   | 82,027  |   |  |   | 91,829  |  
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Operating profit (loss)                                         |  |                            | 3,568   |   |                          |   | 528     |      |  |   | 4,183   |   |  |   | (123    | )
|Other income (expense), net                                     |  |                            | (130    | ) |                          |   | (143    | )    |  |   | (78     | ) |  |   | 116     |  
|Equity in losses from affiliated companies                      |  |                            | (417    | ) |                          |   | (279    | )    |  |   | (768    | ) |  |   | (581    | )
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Earnings (loss) before income taxes                             |  |                            | 3,021   |   |                          |   | 106     |      |  |   | 3,337   |   |  |   | (588    | )
|Income tax expense                                              |  |                            | 423     |   |                          |   | 50      |      |  |   | 923     |   |  |   | 276     |  
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss)                                               |  |                            | 2,598   |   |                          |   | 56      |      |  |   | 2,414   |   |  |   | (864    | )
|Less: income (loss) attributable to the noncontrolling interest |  |                            | 8       |   |                          |   | (3      | )    |  |   | 15      |   |  |   | (3      | )
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) attributable to CDI                           |  | $                          | 2,590   |   |                          | $ | 59      |      |  | $ | 2,399   |   |  | $ | (861    | )
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Basic net earnings (loss) attributable to CDI per share         |  | $                          | 0.14    |   |                          | $ | 0.00    |      |  | $ | 0.13    |   |  | $ | (0.05   | )
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Diluted net earnings (loss) attributable to CDI per share       |  | $                          | 0.13    |   |                          | $ | 0.00    |      |  | $ | 0.12    |   |  | $ | (0.05   | )
|                                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.



3



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CDI CORP. AND SUBSIDIARIES

Consolidated Statements of Shareholders Equity

(Unaudited)

(in thousands)



|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|-------------------------------------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                           |  | Three Months EndedJune 30, |         |   | Six Months
EndedJune 30, |  
|                                                                           |  | 2010                       |         |   | 2009                     |   |         | 2010 |  |   | 2009    |  
|Common stock                                                               |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                        |  | $                          | 2,146   |   |                          | $ | 2,139   |      |  | $ | 2,143   |   |  | $ | 2,136   |  
|Time-vested deferred stock, stock appreciation rights and restricted stock |  |                            | 2       |   |                          |   | 2       |      |  |   | 5       |   |  |   | 5       |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                              |  | $                          | 2,148   |   |                          | $ | 2,141   |      |  | $ | 2,148   |   |  | $ | 2,141   |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Additional paid-in-capital                                                 |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                        |  | $                          | 58,015  |   |                          | $ | 55,393  |      |  | $ | 57,577  |   |  | $ | 54,377  |  
|Stock-based compensation                                                   |  |                            | 822     |   |                          |   | 992     |      |  |   | 1,260   |   |  |   | 2,283   |  
|Tax shortfall from stock plans                                             |  |                            |        |   |                          |   | (117    | )    |  |   |        |   |  |   | (392    | )
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                              |  | $                          | 58,837  |   |                          | $ | 56,268  |      |  | $ | 58,837  |   |  | $ | 56,268  |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Retained earnings                                                          |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                        |  | $                          | 266,554 |   |                          | $ | 295,596 |      |  | $ | 269,225 |   |  | $ | 298,981 |  
|Net income (loss) attributable to CDI                                      |  |                            | 2,590   |   |                          |   | 59      |      |  |   | 2,399   |   |  |   | (861    | )
|Dividends paid to shareholders                                             |  |                            | (2,471  | ) |                          |   | (2,463  | )    |  |   | (4,951  | ) |  |   | (4,928  | )
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                              |  | $                          | 266,673 |   |                          | $ | 293,192 |      |  | $ | 266,673 |   |  | $ | 293,192 |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Accumulated other comprehensive income (loss)                              |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                        |  | $                          | (3,314  | ) |                          | $ | (13,509 | )    |  | $ | (1,824  | ) |  | $ | (11,743 | )
|Translation adjustments                                                    |  |                            | (23     | ) |                          |   | 10,039  |      |  |   | (1,513  | ) |  |   | 8,273   |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                              |  | $                          | (3,337  | ) |                          | $ | (3,470  | )    |  | $ | (3,337  | ) |  | $ | (3,470  | )
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Treasury stock                                                             |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                        |  | $                          | (52,366 | ) |                          | $ | (52,366 | )    |  | $ | (52,366 | ) |  | $ | (52,366 | )
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                              |  | $                          | (52,366 | ) |                          | $ | (52,366 | )    |  | $ | (52,366 | ) |  | $ | (52,366 | )
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Noncontrolling interest                                                    |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                        |  | $                          | 224     |   |                          | $ |        |      |  | $ | 141     |   |  | $ |        |  
|Contribution from the noncontrolling interest owners                       |  |                            |        |   |                          |   | 152     |      |  |   | 72      |   |  |   | 152     |  
|Translation adjustments                                                    |  |                            | 3       |   |                          |   | 3       |      |  |   | 7       |   |  |   | 3       |  
|Net income (loss) attributable to noncontrolling interest                  |  |                            | 8       |   |                          |   | (3      | )    |  |   | 15      |   |  |   | (3      | )
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total                                                                      |  | $                          | 235     |   |                          | $ | 152     |      |  | $ | 235     |   |  | $ | 152     |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Comprehensive income (loss)                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Net income (loss) attributable to CDI                                      |  | $                          | 2,590   |   |                          | $ | 59      |      |  | $ | 2,399   |   |  | $ | (861    | )
|Translation adjustments attributable to CDI                                |  |                            | (26     | ) |                          |   | 10,039  |      |  |   | (1,520  | ) |  |   | 8,273   |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Comprehensive income attributable to CDI                                   |  |                            | 2,564   |   |                          |   | 10,098  |      |  |   | 879     |   |  |   | 7,412   |  
|Net income (loss) attributable to noncontrolling interest                  |  |                            | 8       |   |                          |   | (3      | )    |  |   | 15      |   |  |   | (3      | )
|Translation adjustments attributable to noncontrolling interest            |  |                            | 3       |   |                          |   | 3       |      |  |   | 7       |   |  |   | 3       |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Comprehensive income attributable to noncontrolling interest               |  |                            | 11      |   |                          |   |        |      |  |   | 22      |   |  |   |        |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total                                                                      |  | $                          | 2,575   |   |                          | $ | 10,098  |      |  | $ | 901     |   |  | $ | 7,412   |  
|                                                                           |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.



4



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)



|                                                                                               |  |                           |         |   |      |   |        |  
|---------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | - | ---- | - | ------ | -
|                                                                                               |  | Six Months Ended June 30, |        
|                                                                                               |  | 2010                      |         |   | 2009 |  
|Operating activities:                                                                          |  |                           |         |   |      |   |        |  
|Net income (loss)                                                                              |  | $                         | 2,414   |   |      | $ | (864   | )
|Adjustments to reconcile net income (loss) to cash (used in) provided by operating activities: |  |                           |         |   |      |   |        |  
|Depreciation                                                                                   |  |                           | 4,795   |   |      |   | 5,468  |  
|Amortization                                                                                   |  |                           | 292     |   |      |   | 270    |  
|Deferred income taxes                                                                          |  |                           | 447     |   |      |   | (226   | )
|Equity in losses of affiliated companies                                                       |  |                           | 768     |   |      |   | 581    |  
|Stock-based compensation                                                                       |  |                           | 1,483   |   |      |   | 1,573  |  
|Foreign currency options                                                                       |  |                           |        |   |      |   | 18     |  
|Changes in operating assets and liabilities, net of effects from acquisitions:                 |  |                           |         |   |      |   |        |  
|Accounts receivable, net                                                                       |  |                           | (20,244 | ) |      |   | 13,860 |  
|Prepaid expenses and other current assets                                                      |  |                           | 149     |   |      |   | 1,833  |  
|Accounts payable                                                                               |  |                           | 3,651   |   |      |   | (1,018 | )
|Accrued expenses and other current liabilities                                                 |  |                           | 4,430   |   |      |   | (603   | )
|Income taxes receivable/payable                                                                |  |                           | 242     |   |      |   | (1,361 | )
|Other assets, non-current liabilities and other                                                |  |                           | (784    | ) |      |   | 226    |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Net cash (used in) provided by operating activities                                            |  |                           | (2,357  | ) |      |   | 19,757 |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Investing activities:                                                                          |  |                           |         |   |      |   |        |  
|Additions to property and equipment                                                            |  |                           | (2,931  | ) |      |   | (3,946 | )
|Reacquired franchise rights                                                                    |  |                           | (285    | ) |      |   |       |  
|Acquisition                                                                                    |  |                           | (34,010 | ) |      |   |       |  
|Other                                                                                          |  |                           | 126     |   |      |   | 274    |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Net cash used in investing activities                                                          |  |                           | (37,100 | ) |      |   | (3,672 | )
|                                                                                               |  |                           |         |   |      |   |        |  
|Financing activities:                                                                          |  |                           |         |   |      |   |        |  
|Dividends paid to shareholders                                                                 |  |                           | (4,951  | ) |      |   | (4,928 | )
|Cash overdraft                                                                                 |  |                           | (1,616  | ) |      |   | 1,915  |  
|Contribution to joint venture by noncontrolling interest                                       |  |                           | 72      |   |      |   |       |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Net cash used in financing activities                                                          |  |                           | (6,495  | ) |      |   | (3,013 | )
|                                                                                               |  |                           |         |   |      |   |        |  
|Effect of exchange rate changes on cash                                                        |  |                           | (139    | ) |      |   | 3,099  |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Net (decrease) increase in cash and cash equivalents                                           |  |                           | (46,091 | ) |      |   | 16,171 |  
|Cash and cash equivalents at beginning of period                                               |  |                           | 73,528  |   |      |   | 61,761 |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Cash and cash equivalents at end of period                                                     |  | $                         | 27,437  |   |      | $ | 77,932 |  
|                                                                                               |  |                           |         |   |      |   |        |  
|Supplemental disclosure of cash flow information:                                              |  |                           |         |   |      |   |        |  
|Cash paid for income taxes, net                                                                |  | $                         | 351     |   |      | $ | 1,254  |  

See accompanying notes
to consolidated financial statements.



5



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



|1. | Basis of Presentation
|-- | ---------------------

The accompanying
consolidated interim financial statements of CDI Corp. (CDI or the Company) are unaudited. The balance sheet as of December 31, 2009 is derived from the audited balance sheet of the Company at that date. These statements
have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission pertaining to reports on Form 10-Q and should be read in conjunction with the Companys consolidated financial statements and the notes
thereto for the year ended December 31, 2009, as included in the Companys Form 10-K filed on March 2, 2010. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. Certain prior period information has been reclassified to conform to the current period presentation.

The consolidated financial statements for the unaudited interim periods presented include all adjustments (consisting only of normal, recurring
adjustments) necessary for a fair presentation of financial position, results of operations and cash flows for such interim periods.

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about future events. These estimates and the related underlying
assumptions affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of revenues and expenses. Such estimates include the valuation of accounts receivable, goodwill, intangible
assets, other long-lived assets, legal contingencies and assumptions used in the calculations of income taxes. These estimates and assumptions are based on managements estimates and judgment, which management believes to be reasonable under
the circumstances. Management adjusts such estimates and assumptions when facts and circumstances dictate. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current
economic environment. Tight credit markets, volatile foreign currency and energy markets have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision,
actual results will differ, and could differ significantly, from these estimates. Results for the three and six months ended June 30, 2010 are not necessarily indicative of results that may be expected for the full year.



|2. | Recent Accounting Pronouncements
|-- | --------------------------------

Effective January 1, 2010, the Company adopted the provisions of Accounting Standards Update (ASU) No. 2010-06 Fair Value
Measurements and Disclosures (Topic 820)  Improving Disclosures about Fair Value Measurements (ASU 2010-06), which requires additional disclosures about the different classes of assets and liabilities measured at fair value,
the valuation techniques and inputs used, the activity in Level 3 fair value measurements, and the transfers between Levels 1, 2 and 3. The adoption of ASU 2010-06 did not have a material impact on the Companys consolidated financial
statements.



|3. | Fair Value Disclosures
|-- | ----------------------

The Company is
exposed to risks associated with foreign currency fluctuations. The Companys exposure to foreign currency fluctuations relates primarily to its operations denominated in British pounds sterling and Canadian dollars. Exchange rate fluctuations
impact the US dollar value of reported earnings derived from these foreign operations, as well as the Companys investment in the net assets related to these operations. The Company engaged in hedging activities with respect to certain of its
foreign operations in 2009, but did not in 2010. See Note 4  Derivative Instruments for additional information related to these hedging activities.

The Company maintains a nonqualified Deferred Compensation Plan for highly compensated employees. The assets of the plan are held in the name of CDI at a
third party financial institution. Separate accounts are maintained for each participant to reflect the amounts deferred by the participant and all earnings and losses on those deferred amounts. The current portion of plan assets are recorded in
prepaid expenses and other current assets and the related liability amounts are recorded in other accrued expenses and other current liabilities, while the long-term portion of plan assets are recorded in other non-current assets and the related
liability amounts are recorded in deferred compensation and other non-current liabilities in the consolidated balance sheets.



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



The following tables outline, by major category, the assets and liabilities measured at fair value on a
recurring basis as of June 30, 2010 and December 31, 2009:



|                                                       |  |                                        |  |                                                              |  |                                             |  |                                         
|------------------------------------------------------ |  | -------------------------------------- |  | ------------------------------------------------------------ |  | ------------------------------------------- |  | ----------------------------------------
|                                                       |  |                                        |  | Fair Value Measurements At June 30, 2010 Using              
|Description                                            |  | Fair
ValueMeasurements atJune 30, 2010 |  | Quoted Prices inActive Markets 
forIdentical
Assets(Level 1) |  | Significant OtherObservable Inputs(Level 2) |  | SignificantUnobservable 
Inputs(Level 3)
|Prepaid expenses and other current assets              |  |                                        |  |                                                              |  |                                             |  |                                         
|Mutual funds included in deferred compensation
plan(1) |  | $      325                             |  | $      325                                                   |  | $                                          |  | $                                      
|                                                       |  |                                        |  |                                                             
|Other non-current assets                               |  |                                        |  |                                                              |  |                                             |  |                                         
|Mutual funds included in deferred compensation
plan(2) |  | 6,618                                  |  | 6,618                                                        |  |                                            |  |                                        
|                                                       |  |                                        |  |                                                              |  |                                             |  |                                         
|Total assets                                           |  | $   6,943                              |  | $   6,943                                                    |  | $                                          |  | $                                      
|                                                       |  |                                        |  |                                                              |  |                                             |  |                                         



|(1) | Included in other accrued expenses and other current liabilities in the consolidated balance sheet is a corresponding liability of the same amount reflecting balances
owed to plan participants.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Included in deferred compensation and other non-current liabilities in the consolidated balance sheet is a corresponding liability of the same amount reflecting
balances owed to plan participants.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                                                       |  |                                            |  |                                                             |  |                                             |  |                                         
|------------------------------------------------------ |  | ------------------------------------------ |  | ----------------------------------------------------------- |  | ------------------------------------------- |  | ----------------------------------------
|                                                       |  |                                            |  | Fair Value Measurements At December 31, 2009 Using         
|Description                                            |  | Fair
ValueMeasurements atDecember 31, 2009 |  | Quoted Prices
inActive Markets forIdentical
Assets(Level 1) |  | Significant OtherObservable Inputs(Level 2) |  | SignificantUnobservable 
Inputs(Level 3)
|Other non-current assets                               |  |                                            |  |                                                             |  |                                             |  |                                         
|Mutual funds included in deferred compensation
plan(1) |  | $  6,870                                   |  | $  6,870                                                    |  | $                                          |  | $                                      
|                                                       |  |                                            |  |                                                             |  |                                             |  |                                         
|Total assets                                           |  | $  6,870                                   |  | $  6,870                                                    |  | $                                          |  | $                                      
|                                                       |  |                                            |  |                                                             |  |                                             |  |                                         



|(1) | Included in deferred compensation and other non-current liabilities in the consolidated balance sheet is a corresponding liability of the same amount reflecting
balances owed to plan participants.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|4. | Derivative Instruments
|-- | ----------------------

The
Companys reported financial condition and results of operations are exposed to the effects (both positive and negative) of fluctuating exchange rates when the financial statements of international operations, which are denominated in
currencies other than the US dollar, are translated into US dollars. CDIs exposure to foreign currency fluctuation risk relates primarily to its operations denominated in British pounds sterling and Canadian dollars. Exchange rate fluctuations
impact the US dollar value of reported earnings derived from these foreign operations, as well as the Companys investment in the net assets related to these operations.

To mitigate this foreign exchange rate risk, in the first quarter of 2009, the Company entered into zero cost collar option contracts
(options) to hedge portions of its British pounds sterling and Canadian dollar currency forecasted earnings. The options were for various amounts in local currency on a quarterly basis and had a range of foreign exchange rates, which
provided a hedge against foreign results translated at rates outside the range. These options did not have a premium and the options expired during 2009. These instruments were accounted for at fair value. Because the Company could not designate
these options as hedges for accounting purposes, foreign exchange revaluation gains or losses were reflected in current earnings, while the impact of translating the foreign based income into US dollars was recognized throughout the year. The
Company did not enter into any option contracts in 2010.



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



For the six months ended June 30, 2009, the Company recorded a net loss of $64 related to these
options, consisting of a realized loss of $46 and an unrealized loss of $18. The net loss was recorded in other income (expense), net in the consolidated statements of operations. The loss was calculated as the difference between the average spot
rate for the period and the ceiling of the option, multiplied by the total local currency hedged. The notional principal of the options at June 30, 2009 was $1.6 million when converted to US dollars.

The following table shows the total fair value of the foreign currency zero cost option contracts included in the Companys consolidated balance
sheets:



|                                                  |  |                                          |      |                       |      |                        |  |                                                    |  |      |  |      
|------------------------------------------------- |  | ---------------------------------------- | ---- | --------------------- | ---- | ---------------------- |  | -------------------------------------------------- |  | ---- |  | -----
|                                                  |  | Fair Value of Derivative
Instruments    
|                                                  |  | Asset Derivatives                        |      | Liability Derivatives
|                                                  |  | Balance Sheet
Location                   |      | Fair Value atJune 30, |      | Balance Sheet
Location |  | Fair Value atJune
30,                             
|                                                  |  |                                          | 2010 |                       | 2009 |                        |  | 2010                                               |  | 2009
|Derivatives not designated as hedging instruments |  |                                          |      |                       |      |                        |  |                                                    |  |      |  |      
|Foreign currency zero cost option contracts       |  | Prepaid expenses
and other currentassets |      | $                    |      | $  24                  |  | Other accrued expensesand other currentliabilities |  | $   |  | $  42

The following table shows
the effect of the foreign currency zero cost option contracts included in the Companys consolidated statements of operations:



|                                                  |  |                                                                               |  |                                                                             |  |                                                                            |  |      |  |        
|------------------------------------------------- |  | ----------------------------------------------------------------------------- |  | --------------------------------------------------------------------------- |  | -------------------------------------------------------------------------- |  | ---- |  | -------
|                                                  |  | Effect of Derivative Instruments on the Consolidated Statement 
of Operations
|                                                  |  | Location of 
lossrecognized in incomeon derivatives                           |  | Amount of loss recognizedin income on
derivativesThree Months EndedJune 30, |  | Amount of loss 
recognizedin income on derivativesSix Months EndedJune 30,
|                                                  |  | 2010                                                                          |  | 2009                                                                        |  | 2010                                                                       |  | 2009
|Derivatives not designated as hedging instruments |  |                                                                               |  |                                                                             |  |                                                                            |  |      |  |        
|Foreign currency zero cost option contracts       |  | Other income (expense), net                                                   |  | $                                                                          |  | $  (231)                                                                   |  | $   |  | $  (64)



|5. | Acquisition
|-- | -----------

On June 28, 2010,the Company acquired substantially all of the assets and certain liabilities of L. Robert Kimball & Associates, Inc. and two affiliated companies (collectively, L.R. Kimball), a professional services firm headquartered in
Ebensburg, Pennsylvania. L.R. Kimball provides architecture, civil and environmental engineering, communication technology and consulting services to governmental, educational and private industry customers, through a network of offices primarily in
the mid-Atlantic region. The acquisition will broaden both the Companys service offering portfolio and engineering skill sets. Because of the purchase, a new vertical, CDI  Infrastructure was established within the Engineering Solutions
(ES) reporting segment.

The purchase price was $34.0 million, which was funded from cash on hand, plus an earnout payment in an
amount to be based on the extent to which L.R. Kimball exceeds an earnings target during the two-year period after the closing. The final earnout payment could range from zero to $6.0 million. The fair value of the estimated contingent liability for
the earnout at the date of acquisition was $0.2 million. The purchase price is also subject to a working capital adjustment, which is expected to be determined during the third quarter of 2010. Acquisition-related costs of $0.1 million are
included in operating and administrative expenses in the consolidated statements of operations.



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



The transaction was accounted for as a business combination. The purchase price has been preliminarily
allocated based upon the estimated fair value of net assets acquired and liabilities assumed at the date of acquisition. Accordingly, the purchase price allocation

is subject to change. The Company expects to finalize the allocation of the purchase price prior to year-end, upon receipt of final valuations for the
intangible assets. The preliminary purchase price allocation for the acquisition is as follows:



|                                                |  |   |        |  
|----------------------------------------------- |  | - | ------ | -
|Cash                                            |  | $ | 4      |  
|Accounts receivable                             |  |   | 16,694 |  
|Prepaid expenses and other current assets       |  |   | 482    |  
|Property and equipment                          |  |   | 5,548  |  
|Trademark                                       |  |   | 5,100  |  
|Customer relationships                          |  |   | 2,600  |  
|Backlog                                         |  |   | 850    |  
|Non-compete agreements                          |  |   | 150    |  
|Goodwill                                        |  |   | 12,495 |  
|Current Liabilities                             |  |   | (9,709 | )
|                                                |  |   |        |  
|Net assets acquired                             |  |   | 34,214 |  
|Less cash acquired                              |  |   | (4     | )
|Contingent liability for earnout, at fair value |  |   | (200   | )
|                                                |  |   |        |  
|Net cash paid                                   |  | $ | 34,010 |  
|                                                |  |   |        |  

The preliminary allocation of the purchase price to the acquired assets and assumed liabilities was based on their fair
values as of the acquisition date, with the amounts exceeding the fair value recorded as goodwill. The fair value of the $21.2 million of acquired identifiable intangible assets is provisional pending receipt of the final valuations for those
assets.

Goodwill of $12.5 million, which is assigned to the Companys ES reporting segment, is expected to be largely tax-deductible.
The goodwill consists primarily of the engineering skill sets of the L.R. Kimball workforce, synergies the Company believes will result from combining the operations of L.R. Kimball with the Company, improvements in operating efficiencies and other
benefits that do not qualify for separate recognition as acquired identifiable intangible assets.

The fair value of the L.R. Kimball
trademark was determined using the income approach, which involves estimating factors such as a royalty rate, royalty revenue stream and discount rate. The fair values of the remaining acquired identifiable intangible assets of $3.6 million were for
customer relationships, backlog and non-compete agreements. The remaining acquired identifiable assets and liabilities were primarily property and equipment, cash, accounts receivable, and payables and accrued liabilities, for which book value
approximated fair value. The gross amount of trade receivables due under contracts acquired from L.R. Kimball is $18.8 million, of which $2.1 million is expected to be uncollectible.

Included in the consolidated statements of operations for the three and six months ended June 30, 2010 were revenue and earnings before income taxes
of $693 and $153, respectively, representing the results of operations of L.R. Kimball from the acquisition date through June 30, 2010.

The unaudited condensed pro forma consolidated statements of operations for the three and six months ended June 30, 2010 and 2009 (assuming the
acquisition of LR. Kimball as of the beginning of each fiscal period) are as follows:



|                                                  |  |                            |         |                          |   |         |  |      |         |  |   |         |  
|------------------------------------------------- |  | -------------------------- | ------- | ------------------------ | - | ------- |  | ---- | ------- |  | - | ------- | -
|                                                  |  | Three Months EndedJune 30, |         | Six Months
EndedJune 30, |  
|                                                  |  | 2010                       |         | 2009                     |   | 2010    |  | 2009 |        
|Revenue                                           |  | $                          | 235,193 |                          | $ | 233,051 |  | $    | 459,878 |  | $ | 477,942 |  
|Net income (loss) attributable to CDI             |  |                            | 1,694   |                          |   | 461     |  |      | 643     |  |   | (429    | )
|Net earnings (loss) per share attributable to CDI |  |                            |         |                          |   |         |  |      |         |  |   |         |  
|Basic                                             |  |                            | 0.09    |                          |   | 0.02    |  |      | 0.03    |  |   | (0.02   | )
|Diluted                                           |  |                            | 0.09    |                          |   | 0.02    |  |      | 0.03    |  |   | (0.02   | )

The pro forma results have been prepared
for comparative purposes only and are not necessarily indicative of the actual results of operations had the acquisition taken place as of the beginning of the periods presented, or the results that may occur in the future. Furthermore, the pro
forma results do not give effect to any potential cost savings or incremental costs that may occur as a result of the integration and consolidation of L.R. Kimball.



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



|6. | Goodwill and Other Intangible Assets
|-- | ------------------------------------

The
Company performs its annual goodwill and other indefinite-lived intangible assets impairment testing by reporting unit as of July 1 of each fiscal year, or whenever events occur or circumstances change, such as an adverse change in business
climate, that would indicate that it is more likely than not that the fair value of a reporting unit was below its carrying amount.

The first
step of the impairment test requires that the Company determine the fair value of each reporting unit and compare the fair value to the reporting units carrying amount. The Company uses a dual approach to determine the fair value of its
reporting units. The Company first uses the income approach, which is based on the present value of discounted cash flows and terminal value projected for each reporting unit. The income approach requires significant judgments, including the
projected results of operations, the weighted average cost of capital (WACC) used to discount the cash flows and terminal value assumptions. The projected results of operations are based on the Companys best estimates of future
economic and market conditions, including growth rates, estimated earnings and cash expenditures. The WACC is determined based on the Companys capital structure, cost of capital, inherent business risk profile and long-term growth
expectations, as reflected in the terminal value. The Company uses peer group market multiples to validate the reasonableness of the fair values as determined using the income approach.

The Company then validates the reasonableness of the total fair value of the reporting units under the income approach by reconciling the aggregate fair
values of the reporting units to the Companys total market capitalization, adjusted to include an estimated control premium. The estimated control premium is based on reviewing observable transactions involving the purchase of controlling
interests in comparable companies. In developing the market capitalization, the Company uses the average stock price over a range of dates prior to the assessment date. There are inherent uncertainties related to the factors used in the income and
market capitalization approaches and to the Companys judgment in applying them in determining the fair value of the reporting units. However, the Company believes that the reconciliation of the income and market capitalization approaches
validate the reasonableness of the total fair value of the reporting units.

The second step of the impairment test is contingent upon the
results of the first step. To the extent a reporting units carrying amount exceeds its fair value, an indication exists that the reporting units goodwill or other indefinite-lived intangible assets may be impaired and the Company must
perform a second more detailed impairment assessment step. The second step of the impairment assessment involves allocating the reporting units fair value to all of its recognized and unrecognized assets and liabilities in order to determine
the implied fair value of the reporting units goodwill and intangible assets as of the assessment date. The implied fair value of the reporting units goodwill and other intangible assets is then compared to the carrying amount of
goodwill and other intangible assets to quantify an impairment charge as of the assessment date.

During the first quarter of 2009, the
Company observed deterioration in its business environment and the Companys stock price declined, causing the Companys market capitalization to be below its book value at March 31, 2009. These adverse changes were determined to be a
triggering event, which indicated that a potential impairment may have occurred. Based on the results of the first step of the impairment test, the Company determined that there was no impairment of goodwill or other indefinite-lived intangible
assets as of March 31, 2009.

As of July 1, 2009, the Company performed its annual impairment testing. Based on the results of the
first step of the impairment test, the Company determined that there was no impairment of goodwill or other indefinite-lived intangible assets as of July 1, 2009. All of the Companys reporting units had fair values substantially in excess
of their carrying value after completion of the first step, except for Anders, which had an excess of approximately 5%. In addition, there were no triggering events subsequent to July 1, 2009 that required additional testing. Goodwill in the
Anders reporting unit was $18.4 million as of June 30, 2010. The Company will continue to closely monitor the recoverability of its goodwill and other indefinite-lived intangible assets.

In December 2009 and January 2010, the Company reacquired certain franchise rights. The Company recorded intangible assets of $150 in December and $285
in January, which are being amortized on a straight-line basis over their ten year useful lives.

On June 28, 2010, the Company acquired
substantially all of the assets and certain liabilities of L.R. Kimball (see Note 5  Acquisition). As part of the purchase price allocation, the Company recorded intangible assets of $2.6 million for customer relationships, which are being
amortized over their eight-year estimated useful life, $0.2 for non-compete agreements, which are being amortized over their five-year life, $0.9 for backlog, which is being amortized over its three-year useful life and $5.1 million and $12.5
million for a trademark and goodwill, respectively, which are not amortized, but instead are subject to annual impairment testing as described above.



10



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



The following table summarizes the changes in the Companys carrying value of goodwill and other
intangible assets by reporting segment from December 31, 2009 to June 30, 2010:



|                                               |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|---------------------------------------------- |  | ---------------------------- | ------ | --------- | - | ------------ |  | - | ------------------------------- | - |  | ------------------------ | ------ | - |  | - | ------
|                                               |  | December 31, 2009Net
Balance |        | Additions |   | Amortization |  |   | Translation andOtherAdjustments |   |  | June 30, 2010Net Balance
|Goodwill                                       |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|CDI - Enginering Solutions
(ES)(1)           |  | $                            | 22,160 |           | $ | 12,495       |  | $ |                                |   |  | $                        |       |   |  | $ | 34,655
|CDI - AndersElite (Anders)                   |  |                              | 19,472 |           |   |             |  |   |                                |   |  |                          | (1,103 | ) |  |   | 18,369
|Management Recruiters International
(MRI)(1) |  |                              | 9,632  |           |   |             |  |   |                                |   |  |                          | (138   | ) |  |   | 9,494 
|                                               |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|Total goodwill                                 |  |                              | 51,264 |           |   | 12,495       |  |   |                                |   |  |                          | (1,241 | ) |  |   | 62,518
|Trademarks                                     |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|MRI                                            |  |                              | 2,165  |           |   |             |  |   |                                |   |  |                          |       |   |  |   | 2,165 
|ES                                             |  |                              |       |           |   | 5,100        |  |   |                                |   |  |                          |       |   |  |   | 5,100 
|                                               |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|                                               |  |                              | 2,165  |           |   | 5,100        |  |   |                                |   |  |                          |       |   |  |   | 7,265 
|Other intangible assets                        |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|Reacquired franchise rights - MRI              |  |                              | 150    |           |   | 285          |  |   | (22                             | ) |  |                          |       |   |  |   | 413   
|Customer relationships - ES(2)                 |  |                              | 7,335  |           |   | 2,600        |  |   | (270                            | ) |  |                          |       |   |  |   | 9,665 
|Non-compete agreements                         |  |                              |       |           |   | 150          |  |   |                                |   |  |                          |       |   |  |   | 150   
|Backlog                                        |  |                              |       |           |   | 850          |  |   |                                |   |  |                          |       |   |  |   | 850   
|                                               |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       
|Total goodwill and other intangible assets     |  | $                            | 60,914 |           | $ | 21,480       |  | $ | (292                            | ) |  | $                        | (1,241 | ) |  | $ | 80,861
|                                               |  |                              |        |           |   |              |  |   |                                 |   |  |                          |        |   |  |   |       



|(1) | The ES and MRI net goodwill balances at December 31, 2009 include impairment charges of $15,171 and $6,230, respectively, which were taken in 2002 upon the
Companys adoption of guidance now codified as FASB ASC 350-20, Goodwill.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The ES net customer relationships balance at December 31, 2009 and June 30, 2010 includes accumulated amortization of $765 and $1,035, respectively.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------



|7. | Earnings (Loss) Attributable to CDI Per Share
|-- | ---------------------------------------------

Both basic and diluted earnings (loss) attributable to CDI per share for all periods are calculated based on the reported earnings (loss) attributable to
CDI in the Companys consolidated statements of operations.

The Companys Board of Directors authorized on February 26, 2008
and the Company announced on February 28, 2008 the repurchase of up to $50 million of the Companys outstanding common stock. Repurchases have been and may be made from time to time beginning March 4, 2008 depending upon the
Companys share price and other relevant factors. Repurchases may be made in the open market or through privately negotiated transactions. The Company is not required to repurchase any specific number of shares, and the Company may terminate
the repurchase program at any time. During the three and six months ended June 30, 2010, the Company did not repurchase any common stock.

The number of common shares used to calculate basic and diluted earnings (loss) per share for the three and six months ended June 30, 2010 and 2009
was determined as follows:



|                                                                   |  |                            |  |            |                          |  |            |  |            |  
|------------------------------------------------------------------ |  | -------------------------- |  | ---------- | ------------------------ |  | ---------- |  | ---------- | -
|                                                                   |  | Three Months EndedJune 30, |  |            | Six Months
EndedJune 30, | 
|                                                                   |  | 2010                       |  | 2009       |                          |  | 2010       |  | 2009       |  
|Basic                                                              |  |                            |  |            |                          |  |            |  |            |  
|Average shares outstanding                                         |  | 19,011,939                 |  | 18,944,810 |                          |  | 18,995,707 |  | 18,928,836 |  
|Restricted shares issued not vested                                |  |                           |  | (10,000    | )                        |  |           |  | (10,000    | )
|                                                                   |  |                            |  |            |                          |  |            |  |            |  
|                                                                   |  | 19,011,939                 |  | 18,934,810 |                          |  | 18,995,707 |  | 18,918,836 |  
|                                                                   |  |                            |  |            |                          |  |            |  |            |  
|Diluted                                                            |  |                            |  |            |                          |  |            |  |            |  
|Shares used for basic calculation                                  |  | 19,011,939                 |  | 18,934,810 |                          |  | 18,995,707 |  | 18,918,836 |  
|Dilutive effect of shares / units granted under Omnibus Stock Plan |  | 122,337                    |  | 11,913     |                          |  | 92,120     |  |           |  
|Dilutive effect of units issuable under Stock Purchase Plan        |  | 107,174                    |  | 115,498    |                          |  | 106,772    |  |           |  
|                                                                   |  |                            |  |            |                          |  |            |  |            |  
|                                                                   |  | 19,241,450                 |  | 19,062,221 |                          |  | 19,194,599 |  | 18,918,836 |  
|                                                                   |  |                            |  |            |                          |  |            |  |            |  



11



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



Outstanding awards granted under both the CDI Corp. 2004 Omnibus Stock Plan (the Omnibus
Plan) and the Amended and Restated CDI Corp. Stock Purchase Plan for Management Employees and Non-Employee Directors (the Stock Purchase Plan) of 813,292 and 1,120,106 shares were excluded from the computation of EPS for the three
months ended June 30, 2010 and 2009, respectively, because their effect would have been anti-dilutive. Outstanding awards granted under both the Omnibus Plan and the Stock Purchase Plan of 890,900 and 1,299,327 shares were excluded from the
computation of EPS for the six months ended June 30, 2010 and 2009, respectively, because their effect would have been anti-dilutive.



|8. | Income Taxes
|-- | ------------

The Company calculates an
effective income tax rate each quarter based upon forecasted annual income by jurisdiction, statutory tax rates and other tax-related items. The impact of discrete items is recognized in the interim period in which they occur.

The effective tax rates for the three months ended June 30, 2010 and 2009 were 14.0% and 47.2%. The effective income tax rate for 2010 was favorably
impacted primarily by a reduction in the reserve for the US Department of Justice (DOJ) matter (see Note 9  Commitments, Contingencies and Legal Proceedings), which is largely not tax deductible. The income tax rate in 2009 was
unfavorably impacted by provisions for state and foreign taxes and projected losses in foreign jurisdictions on which no tax benefit had been recognized or on which the tax benefit was recognized at tax rates lower than the US rate.

The effective tax rates for the six months ended June 30, 2010 and 2009 were 27.7% and (46.9)%. The effective income tax rate for 2010 was favorably
impacted primarily by the reduction in the reserve for the DOJ matter, which is largely not tax deductible, partially offset by adjustments to deferred tax assets and related tax expense for previously issued and unexercised stock options that
expired during the period, as well as other valuation differences for stock awards. The income tax rate for 2009 was unfavorably impacted by projected losses in foreign jurisdictions on which no tax benefit had been recognized or on which the tax
benefit was recognized at tax rates lower than the US rate, an increase related to uncertain tax positions and an adjustment to income taxes payable.



|9. | Commitments, Contingencies and Legal Proceedings
|-- | ------------------------------------------------

Commitments

The Company maintains a
global master agreement with a large on-line job posting and search service for the benefit of its operating segments and MRI franchise network. On September 30, 2009, the parties amended the agreement from a three year term to a four year
term, extending the minimum payments for the last two years over a three year period. On June 28, 2010, the parties amended the agreement to include purchases of $700 of services by the Company to be paid in 2010 and credited toward the 2010
minimum payment; this amendment did not change the overall commitment. $350 of these services will be provided in 2010 and the remaining $350 will be provided in 2011. At June 30, 2010, the aggregate minimum payments remaining for the years
ended 2010 and 2011 were $103 and $2,300, respectively.

Legal Proceedings

The Company has litigation and other claims pending which have arisen in the ordinary course of business. Except as described below, management believes
there are substantive defenses and/or insurance and specific accounting reserves established such that the outcome of these pending matters should not have a material adverse effect on the business, financial condition or results of operations of
the Company.

UK Office of Fair Trading Decision

On September 30, 2009 the United Kingdoms Office of Fair Trading (OFT) issued a decision in its investigation into alleged
anti-competitive behavior by Anders. The OFT had been investigating alleged violations of the UK Competition Act of 1998 by Anders and a number of its competitors in the UK construction recruitment industry during the time period of late 2004 to
early 2006. The Company fully cooperated with the OFT in its investigation under the OFTs leniency program.

In its decision, the OFT
stated that it made a finding that Anders did violate the UK Competition Act of 1998 and imposed a fine of $12.3 million for the violations, which is non-tax deductible. The Company recorded a charge for the full amount of the fine in the third
quarter of 2009. The Company is appealing the OFT decision. No payment has been made pending the outcome of the appeal and the reserve is included in Other accrued expenses and other current liabilities in the consolidated balance sheets
at December 31, 2009 and June 30, 2010.



12



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



Investigation by the US Department of Justice

In August 2009, the Civil Division of the DOJ notified the Company of potential claims against it under the US False Claims Act. The claims stem from
alleged mischarging of time on certain federal government projects. The Company, with assistance from outside legal counsel, conducted a review of these allegations and cooperated with the DOJ in its investigation. The Company established
a reserve of $4.3 million for this matter at December 31, 2009.

In June 2010, the Company and the DOJ reached an agreement in principle
on the financial terms of a settlement regarding this matter. Other terms remain to be negotiated and there is no certainty and the Company can give no assurance that a final agreement will be reached. At June 30, 2010, based upon
this agreement in principle with the DOJ, the Company estimates the loss related to this matter, including the relators individual claims and the relators attorneys cost, to be $2.4 million. This reserve, which is only partially
tax deductible, is included in Other accrued expenses and other current liabilities in the consolidated balance sheet at December 31, 2009 and June 30, 2010. Based upon the reduction in the reserve, the consolidated statements
of operations for the three and six months ended June 30, 2010 include a benefit of $1.9 million recognized in Operating and administrative expenses.



|10. | Reporting Segments
|--- | ------------------

The Company has four
reporting segments: CDI Engineering Solutions (ES), Management Recruiters International (MRI), CDI AndersElite (Anders) and CDI Information Technology Solutions (ITS).

Prior to the purchase of substantially all of the assets and certain liabilities of L.R. Kimball on June 28, 2010 (see Note 5  Acquisition),
ES operated principally through the following three key verticals:



| |  |  | CDI-Process and Industrial (P & I)  P & I provides a full range of engineering, design, project management,
professional staffing and outsourcing solutions to firms in oil, gas, refining, alternative energy, power generation and energy transmission, nuclear, chemicals and heavy manufacturing industries. In addition, P & I offers facility design,
project management, engineering, professional staffing and facility start-up services to customers in the pharmaceutical, bio-pharmaceutical and regulated medical services industries.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | CDI-Government Services (Government Services)  Government Services provides a full range of engineering, design and logistics
services to the defense industry, particularly in marine design, systems development and military aviation support.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | CDI-Aerospace (Aerospace)  Aerospace provides a full range of engineering, design, project management, professional staffing
and outsourcing solutions to both the commercial and military aerospace markets.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Since the purchase of substantially all of
the assets and certain liabilities of L.R. Kimball, ES added the following fourth key vertical:



| |  |  | CDI-Infrastructure (Infrastructure)  Infrastructure provides a full range of architecture, civil and environmental
engineering, communication technology and consulting services to governmental, educational and private industry customers, through a network of offices primarily in the mid-Atlantic region.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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 customers. The MRI franchisees provide permanent placement services primarily under the brand names
Management Recruiters®, Sales
Consultants®,
CompuSearch® and OfficeMates
5®. MRI also provides training, implementation services and back-office services to enable franchisees to pursue
staffing opportunities.

Anders provides contract and permanent placement candidates to customers in the infrastructure environment seeking
staff in building, construction and related professional services through a network of Company offices. The Company maintains offices in the UK and Australia, though many candidates that Anders places in the UK are recruited from around the world.

ITS provides a variety of information technology (IT) related services to its customers, which are primarily large and mid-sized
customers with significant IT requirements and/or the need to augment their own staff on a flexible basis. Services include staffing augmentation, permanent placement, outsourcing (both onsite, under the customers supervision, and offsite) and
consulting.

For purposes of business segment performance measurement, the Company charges certain expenses directly attributable to the
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. Identifiable assets of the business segments exclude
corporate assets, which principally consist of cash and certain prepaid expenses, non-trade accounts receivable, deferred tax assets attributable to the ES and IT segments, property and equipment and other assets.



13



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



Segment data is presented in the following table:



|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------- |  | -------------------------- | ------- | - | ------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                |  | Three MonthsEnded June 30, |         |   | Six MonthsEnded
June 30, |  
|                                                |  | 2010                       |         |   | 2009                     |   |         | 2010 |  |   | 2009    |  
|Revenue:                                        |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|ES                                              |  | $                          | 110,197 |   |                          | $ | 118,456 |      |  | $ | 219,901 |   |  | $ | 247,011 |  
|MRI                                             |  |                            | 15,108  |   |                          |   | 13,233  |      |  |   | 29,470  |   |  |   | 27,854  |  
|Anders                                          |  |                            | 16,930  |   |                          |   | 25,517  |      |  |   | 38,482  |   |  |   | 53,551  |  
|ITS                                             |  |                            | 76,747  |   |                          |   | 58,220  |      |  |   | 141,069 |   |  |   | 115,662 |  
|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                |  | $                          | 218,982 |   |                          | $ | 215,426 |      |  | $ | 428,922 |   |  | $ | 444,078 |  
|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Operating profit (loss):                        |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|ES                                              |  | $                          | 3,094   |   |                          | $ | 3,497   |      |  | $ | 4,564   |   |  | $ | 6,946   |  
|MRI                                             |  |                            | 1,755   |   |                          |   | 470     |      |  |   | 3,186   |   |  |   | 474     |  
|Anders                                          |  |                            | (879    | ) |                          |   | (1,930  | )    |  |   | (1,334  | ) |  |   | (3,129  | )
|ITS                                             |  |                            | 2,866   |   |                          |   | 1,879   |      |  |   | 4,662   |   |  |   | 3,107   |  
|Corporate                                       |  |                            | (3,685  | ) |                          |   | (3,667  | )    |  |   | (7,663  | ) |  |   | (8,102  | )
|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|                                                |  |                            | 3,151   |   |                          |   | 249     |      |  |   | 3,415   |   |  |   | (704    | )
|Less equity in losses from affiliated companies |  |                            | 417     |   |                          |   | 279     |      |  |   | 768     |   |  |   | 581     |  
|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Total operating profit (loss)                   |  |                            | 3,568   |   |                          |   | 528     |      |  |   | 4,183   |   |  |   | (123    | )
|Other income (expense), net                     |  |                            | (130    | ) |                          |   | (143    | )    |  |   | (78     | ) |  |   | 116     |  
|Equity in losses from affiliated companies      |  |                            | (417    | ) |                          |   | (279    | )    |  |   | (768    | ) |  |   | (581    | )
|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  
|Earnings (loss) before income taxes             |  | $                          | 3,021   |   |                          | $ | 106     |      |  | $ | 3,337   |   |  | $ | (588    | )
|                                                |  |                            |         |   |                          |   |         |      |  |   |         |   |  |   |         |  

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

Segment asset data is presented in the table below:



|          |  |              |         |                  |   |        
|--------- |  | ------------ | ------- | ---------------- | - | -------
|          |  | June 30,2010 |         | December 31,2009
|Assets:   |  |              |         |                  |   |        
|ES        |  | $            | 175,506 |                  | $ | 127,213
|MRI       |  |              | 28,866  |                  |   | 26,495 
|Anders    |  |              | 35,727  |                  |   | 39,306 
|ITS       |  |              | 84,142  |                  |   | 71,230 
|Corporate |  |              | 63,159  |                  |   | 110,790
|          |  |              |         |                  |   |        
|          |  | $            | 387,400 |                  | $ | 375,034
|          |  |              |         |                  |   |        



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##### Table of Contents

CDI CORP. AND SUBSIDIARIES

Managements Discussion and Analysis of Financial Condition and Results of Operations

(Amounts in thousands, except share and per share amounts, unless otherwise indicated)

(Unaudited)



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

Caution Concerning Forward-Looking Statements

This report (including Managements Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address expectations or projections about the future, including, but not limited to, statements about the Companys strategies for growth and future
financial results (such as revenues, pre-tax profit and tax rates), are forward-looking statements. Some of the forward-looking statements can be identified by words like anticipates, believes, expects,
may, will, could, should, intends, plans, estimates and similar references to future periods. These statements are not guarantees of future performance and involve a
number of risks, uncertainties and assumptions that are difficult to predict. Because these forward-looking statements are based on estimates and assumptions that are subject to significant business, economic and competitive uncertainties, many of
which are beyond the Companys control or are subject to change, actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. Important factors that could cause actual results to
differ materially from the forward-looking statements include, but are not limited to: weakness in general economic conditions and levels of capital spending by customers in the industries the Company serves; weakness in the financial and capital
markets, which may result in the postponement or cancellation of CDIs customers capital projects or the inability of CDIs customers to pay the Companys fees; loss of business and other adverse consequences as a result of the
UK Office of Fair Trading decision or the Department of Justice investigation; credit risks associated with the Companys customers; difficulties in integrating the recently-acquired L.R. Kimball operations with the Company; competitive market
pressures; the availability and cost of qualified labor; the Companys level of success in attracting, training, and retaining qualified management personnel and other staff employees; changes in tax laws and other government regulations; the
possibility of incurring liability for the Companys activities, including the activities of the Companys temporary employees; the Companys performance on customer contracts; negative outcome of pending and future claims and
litigation; and government policies or judicial decisions adverse to the Companys businesses. More detailed information about some of these and other risks and uncertainties may be found in the Companys filings with the SEC, particularly
in the Risk Factors section in Part 1, Item 1A. of the Companys Annual Report on Form 10-K for the year ended December 31, 2009. 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 statements, whether as a result of new information, future events or otherwise, except as required by law.

Note on Constant Currency Calculations

Constant currency year-over-year changes should be considered in addition to, and not as a substitute for or superior to, changes in
revenue prepared on a US dollar reported basis. Constant currency year-over-year changes in revenue are calculated by translating the prior periods revenue in local currencies into US dollars using the average exchange rates of the current
period.

Unless the context otherwise requires, all references herein to CDI, the Registrant, the
Company, we, us or our are to CDI Corp. and its consolidated subsidiaries.

Executive Overview

On a year-over-year basis, the Companys second quarter revenue increased by 1.7% (0.9% in constant currency), reflecting signs
of a modest recovery in those businesses in which revenue growth historically tends to resume earlier in a typical business recovery cycle. These businesses are generally more dependent on overall growth in GDP and employment rates among
college-educated professionals. These businesses include CDI Information Technology Solutions (ITS) and Management Recruiters International (MRI).

The Companys ITS segment revenue increased 31.8% over the prior year second quarter driven by account expansions with existing customers,
reflecting the investment and improved productivity in sales and recruiting resources, as well as by successful business development efforts across most retail and national accounts. The Companys MRI segment revenue increased by 14.2% over the
prior year second quarter due to increases in royalty, contract staffing and franchise sales revenue, reflecting improved hiring demand for executive, professional, technical and managerial personnel in firms served by MRIs franchise offices.

The Companys businesses in which revenue growth historically tends to resume later in a typical business recovery cycle are generally
more dependent on capital spending decisions by customers. These businesses include CDI Engineering Solutions (ES) and CDI AndersElite (Anders).



15



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##### Table of Contents

The Companys ES segment revenue decreased 7.0% (8.8% in constant currency) versus the prior year
second quarter reflecting reduced demand and continued project delays or postponements of capital investments by customers in the Aerospace, Government Services and the Process and Industrial (P & I) verticals. Based on second
quarter project awards and bid activity, management believes that ES revenue growth could see a moderate rebound in the second half of 2010.

During the second quarter the Company purchased substantially all of the assets and certain liabilities of L. Robert Kimball & Associates, Inc.
and two affiliated companies (collectively, L.R. Kimball), a professional services firm which provides architecture, civil and environmental engineering, communication technology and consulting services to governmental, educational and
private industry customers, through a network of offices primarily in the mid-Atlantic region. See Note 5  Acquisition in the notes to the consolidated financial statements.

This acquisition was consistent with the Companys long-term strategic objectives and will broaden both the Companys service offering
portfolio and engineering skill sets. The acquisition should enhance margins through the delivery of higher-value, higher-margin engineering outsourcing services in a new Infrastructure vertical in the Companys ES segment. Additionally,
the acquisition should help mitigate business cyclicality within ES. Finally, the new Infrastructure vertical should benefit from a recovery of long-term capital spending cycle if US industry and governmental entities increase investment
to replace and upgrade deteriorated infrastructure assets.

The Company continues to look for additional strategic acquisitions that add skill
sets and/or business scale to the Companys project outsourcing capabilities in the Companys ES and ITS business segments.

Continued weak demand in the UK construction industry contributed to the Companys Anders segments second quarter 2010 revenue decline of
33.7% (31.6% in constant currency) versus the prior year second quarter. Commercial and public construction projects have been affected by the weak recovery in UK economy and by significant cuts in government spending. This, in turn, has reduced
hiring demand in virtually all industries served by Anders. However, Anders is beginning to see signs of increased permanent placement demand in Australia driven by the natural resources and extraction industries.

The Companys consolidated gross profit dollars for the second quarter increased by 1.0% versus the prior year second quarter, primarily due to
revenue growth. Gross profit margins decreased from 20.6% in the second quarter of 2009 to 20.4% in 2010, due to a change in service mix with lower margin staffing services becoming a larger part of total revenue.

For the quarter ended June 30, 2010, the Company reported net income of $2.6 million, or $0.13 per diluted share, on revenue of $219.0 million
versus $0.1 million in net income, or $0.00 per diluted share, on revenue of $215.4 million in the prior year second quarter.

Second quarter
2010 results include a reserve reduction of $1.9 million related to an agreement in principle on the financial terms of a settlement in the US Department of Justice (DOJ) matter (see Note 9  Commitments, Contingencies and Legal
Proceedings in the notes to the consolidated financial statements). This benefit was partially offset by second quarter pre-tax charges of $0.4 million for severance and real estate exit costs and $0.1 million in acquisition-related costs associated
with the June 28, 2010 purchase of substantially all of the assets and certain liabilities of L.R. Kimball.

If market conditions
continue to improve into the second half of 2010, the Company believes that, due to previous cost reduction efforts, potential revenue growth could produce meaningful operating leverage.

Consolidated Discussion

Business Strategy

CDIs strategic
objective is to be a leading global provider of engineering and information technology (IT) outsourcing solutions and professional staffing. These services enable CDIs customers to focus on their core competencies and drive
profitable growth and return on capital investment.

The Company seeks to achieve its long-term strategic objectives by focusing on four core
goals. These goals are:



| |  |  | Shift services delivered up the value continuum. The Company is focused on increasing its delivery of higher value, higher-margin and higher-skilled
services through both organic and acquisitive growth.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Build global engineering services delivery capability. The Company is focused on increasing its international reach to: meet its current
customers global engineering needs; broaden the Companys geographic base, particularly in high growth, emerging economies; and increase the Companys access to skilled global engineering talent.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Expand its portfolio of industries served in all reporting units; additionally, utilize acquisitions to expand engineering industries served. The
Company is focused on broadening the base of the industries it serves to mitigate cyclicality in particular industries and to leverage the long-term capital spending cycle in targeted ES verticals.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



16



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##### Table of Contents

| |  |  | Expand its portfolio of services delivered in all reporting segments to, in turn, broaden services provided to each customer organization;
additionally, utilize acquisitions to broaden the service mix in the ES reporting unit. The Company is focused on providing additional high value services to customers to create long-term alliance relationships. Additionally, primarily
through acquisitions, the Company is focused on providing applied proprietary process technology services to its ES customers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Key Performance Indicators

The Company
assesses its performance by monitoring a number of key performance indicators, which include revenue, constant currency revenue, gross profit dollars, gross profit margin, operating profit, operating profit margin, return on net assets and variable
contribution margin.

Revenue is impacted by, among other things, levels of capital spending by customers, particularly in the ES and Anders
business segments. Other external factors, such as the general business environment and employment levels, impact the Companys staffing business. Economic growth or decline typically impacts the demand for labor. In periods of increasing
unemployment and slowing GDP growth, CDI customers tend to first cut-back on their contract workforce. As economic weakness continues, CDI customers then tend to decrease permanent headcount. In a recovering economy, CDI customers tend first to
increase their contract employee headcount and to delay hiring permanent employees until later in the recovery cycle, when they are more certain that the recovery will continue. Operationally, CDIs ability to capitalize on opportunities
created by the economy, its performance on new and existing accounts, new contract and account wins and its ability to mitigate competitive pricing pressures affect the Companys revenue.

The Company conducts its business in several international locations and its reported revenue in US dollars reflects changes in foreign exchange rates as
well as business performance. The Company believes it is important to remove the effects of foreign exchange and to calculate revenue changes in constant currency. Management does not evaluate the Companys growth and performance without
considering year-over-year changes in revenue both on a constant currency basis and on a US dollar reported basis. Constant currency year-over-year changes should be considered in addition to, and not as a substitute for or superior to, changes in
revenue prepared on a US dollar reported basis. Constant currency year-over-year changes in revenue are calculated by translating the prior periods revenue in local currencies into US dollars using the average exchange rates of the current
period.

Gross profit dollars and gross profit margin reflect CDIs ability to realize pricing consistent with value provided, to address
changes in market demand and to control and pass through direct costs. Gross profit margin will shift as a result of the mix of business. The Company is focused on improving margins over time through efforts to grow new higher-margin business and to
cycle out of lower-margin business. Professional services revenue, consisting of royalties, permanent placement fees and franchise related fees, has a significant impact on gross profit margin. Since there are generally no direct costs associated
with professional services revenue, increases or decreases in such revenue can have a disproportionate impact on gross profit margin.

Operating profit is gross profit less operating and administrative expenses. Operating profit margin reflects the Companys ability to adjust
overhead costs to changing business volumes.

Return on net assets (RONA) reflects CDIs ability to generate earnings while
optimizing assets deployed in the business. RONA is calculated as the pre-tax earnings for the current quarter and preceding three quarters, divided by the average net assets at the beginning and end of that four quarter period. Net assets include
total assets minus total liabilities excluding cash and cash equivalents and income tax accounts. A key driver of RONA is the Companys ability to manage its accounts receivable, its largest asset.

Variable contribution margin (VCM) is a measure of the amount of profit that flows to the operating profit line for each dollar of revenue
growth. VCM is calculated as the year-over-year growth in operating profit divided by the year-over-year growth in revenue.

The Company has
established the following long-term performance goals:



| |  |  | Generate operating profit margin of 5% through gross margin expansion, financial discipline and lean headquarters operations;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------



| |  |  | Produce pre-tax RONA of 20% and redeploy assets unable to meet this target; and
| | - |  | -------------------------------------------------------------------------------



| |  |  | Generate VCM in the 12% to 14% range on incremental revenue.
| | - |  | ------------------------------------------------------------

During the second quarter of 2010, the Companys operating profit margin was 1.6% as compared to 0.3% during the second quarter of 2009. This
improvement is the result of the increase in revenue, the reserve reduction of $1.9 million for the DOJ matter and the positive impact of the Companys cost reduction initiatives.

Although the second quarter of 2010 operating profit was positive and improved from the prior year second quarter, the Companys reported RONA was
(7.1)% for the second quarter of 2010 as compared to 2.2% during the second quarter of 2009. This reflects the lagging nature of the calculation, which incorporates the preceding three quarters performance, which included operating losses.



17



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The VCM metric for the second quarter of 2010 is 85.5%, reflecting the impact of the reserve reduction of
$1.9 million for the DOJ matter and operating leverage from the Companys cost reduction initiatives. The VCM metric for the second quarter of 2009 is not considered to be meaningful because operating profit and revenue did not grow in the 2009
reporting period.

Consolidated Results of Operations for the three months ended June 30, 2010 as compared to the three months
ended June 30, 2009

The table that follows presents changes in revenue by service type along with selected financial
information and some key metrics for the three months ended June 30, 2010 and 2009:

Consolidated

|                                            |  |                            |         |    |                     |       |   |      |   |         |                   |  |       |   |  |   |         |   |  |         |   
|------------------------------------------- |  | -------------------------- | ------- | -- | ------------------- | ----- | - | ---- | - | ------- | ----------------- |  | ----- | - |  | - | ------- | - |  | ------- | --
|                                            |  | Three months endedJune
30, |         |    | Increase (Decrease) |      
|(in thousands)                              |  | 2010                       |         |    | % of TotalRevenue   |       |   | 2009 |   |         | % of TotalRevenue |  |       | $ |  |   | %       |  
|Revenue                                     |  |                            |         |    |                     |       |   |      |   |         |                   |  |       |   |  |   |         |   |  |         |   
|Staffing services                           |  | $                          | 159,334 |    |                     | 72.8  | % |      | $ | 149,814 |                   |  | 69.5  | % |  | $ | 9,520   |   |  | 6.4     | % 
|Project outsourcing services                |  |                            | 54,346  |    |                     | 24.8  |   |      |   | 60,214  |                   |  | 28.0  |   |  |   | (5,868  | ) |  | (9.7    | ) 
|Professional services                       |  |                            | 5,302   |    |                     | 2.4   |   |      |   | 5,398   |                   |  | 2.5   |   |  |   | (96     | ) |  | (1.8    | ) 
|                                            |  |                            |         |    |                     |       |   |      |   |         |                   |  |       |   |  |   |         |   |  |         |   
|                                            |  | $                          | 218,982 |    |                     | 100.0 | % |      | $ | 215,426 |                   |  | 100.0 | % |  | $ | 3,556   |   |  | 1.7     | % 
|                                            |  |                            |         |    |                     |       |   |      |   |         |                   |  |       |   |  |   |         |   |  |         |   
|Gross profit                                |  | $                          | 44,703  |    |                     | 20.4  | % |      | $ | 44,279  |                   |  | 20.6  | % |  | $ | 424     |   |  | 1.0     | % 
|Operating and administrative expenses       |  |                            | 41,135  |    |                     | 18.8  |   |      |   | 43,751  |                   |  | 20.3  |   |  |   | (2,616  | ) |  | (6.0    | ) 
|Operating profit                            |  |                            | 3,568   |    |                     | 1.6   |   |      |   | 528     |                   |  | 0.3   |   |  |   | 3,040   |   |  | 575.8   |   
|Net income attributable to CDI              |  | $                          | 2,590   |    |                     | 1.2   | % |      | $ | 59      |                   |  |      | % |  | $ | 2,531   |   |  | 4,289.8 | % 
|Cash flow (used in) provided by operations  |  | $                          | (10,981 | )  |                     |       |   |      | $ | 10,056  |                   |  |       |   |  | $ | (21,037 | ) |  | (209.2  | )%
|Effective income tax rate                   |  |                            | 14.0    | %  |                     |       |   |      |   | 47.2    | %                 |  |       |   |  |   |         |   |  |         |   
|After-tax return on shareholders
equity(1) |  |                            | (5.9    | )% |                     |       |   |      |   | 1.1     | %                 |  |       |   |  |   |         |   |  |         |   
|Pre-tax return on net
assets(2)             |  |                            | (7.1    | )% |                     |       |   |      |   | 2.2     | %                 |  |       |   |  |   |         |   |  |         |   
|Variable contribution
margin(3)             |  |                            | 85.5    | %  |                     |       |   |      |   | NM      |                   |  |       |   |  |   |         |   |  |         |   



|(1) | Net income attributable to CDI for the current quarter combined with the income (loss) attributable to CDI from the three preceding quarters, divided by the average CDI
shareholders equity at the beginning and end of that four quarter period.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | Earnings before income taxes for the current quarter combined with the earnings (loss) before income taxes from the three preceding quarters, divided by the average net
assets at the beginning and end of that four quarter period. Net assets include total assets minus total liabilities excluding cash and cash equivalents and income tax accounts.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | Year-over-year growth in operating profit divided by year-over-year growth in revenues. The calculation for 2009 is not meaningful (NM) because operating profit and/or
revenue did not grow for the reporting period presented.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue increased 1.7% (0.9% in constant currency) for the second
quarter of 2010 as compared to the second quarter of 2009. ITS experienced increased staffing and project outsourcing services revenue, primarily due to account expansions with existing customers, reflecting the investment and improved productivity
in sales and recruiting resources, as well as by business development efforts across most retail and national accounts. MRI also experienced growth in staffing revenue, due to several business wins from franchisees growing their staffing services,
and in professional services revenue, primarily due to increased royalties.

These increases were partially offset by declines in ES revenue,
which were influenced by the uneven economic recovery and continued uncertainty in the energy sector. This resulted in reduced demand and delayed or cancelled projects with oil and gas, refining, chemical and specialty chemical and commercial
aviation customers and reduced revenue from permanent placement. Anders experienced continued declines in staffing services, primarily due to weak demand in the UK construction industry which caused decreases in the volume of staffing projects.

Gross profit increased slightly for the second quarter of 2010 as compared to the second quarter of 2009 primarily due to the increase in
revenue. Gross profit margin decreased slightly due to the change in revenue mix, with lower-margin staffing becoming a larger portion of total revenue, and the decline of higher-margin project outsourcing revenue.

Consolidated operating and administrative expenses decreased for the second quarter of 2010 as compared to the second quarter of 2009, primarily due to a
reserve reduction of $1.9 million related to an agreement in principle on the financial terms of a settlement in the DOJ matter (see Note 9  Commitments, Contingencies and Legal Proceedings in the notes to the consolidated financial



18



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##### Table of Contents

statements). This benefit was partially offset by second quarter pre-tax charges of $0.4 million for severance and real estate exit costs and $0.1 million in acquisition-related costs associated
with the June 28, 2010 purchase of substantially all of the assets and certain liabilities of L.R. Kimball. The second quarter of 2009 included $0.7 million of severance and real estate exit costs.

Operating profit increased for the second quarter of 2010 as compared to the second quarter of 2009 and operating profit margin increased from 0.3% to
1.6% due to increases in revenue, in addition to the reserve reduction of $1.9 million related to the DOJ matter and the cost reduction measures noted above. These were partially offset by the $0.4 million of severance and real estate exit costs and
the $0.1 million in acquisition-related costs noted above.

The Companys effective income tax rate was 14.0% for the second quarter of
2010 as compared to 47.2% for the second quarter of 2009. The effective income tax rate for 2010 was favorably impacted primarily by the reduction in the reserve for the DOJ matter, which is largely not tax deductible. The income tax rate in 2009
was unfavorably impacted by provisions for state and foreign taxes and projected losses in foreign jurisdictions on which no tax benefit had been recognized or on which the tax benefit was recognized at tax rates lower than the US rate.

Consolidated Results of Operations for the six months ended June 30, 2010 as compared to the six months ended June 30, 2009

The table that follows presents changes in revenue by service type along with selected financial information and some key metrics for the six
months ended June 30, 2010 and 2009:

Consolidated

|                                           |  |                          |         |   |                     |       |   |      |   |         |                   |  |       |    |  |                 |   |  |         |   
|------------------------------------------ |  | ------------------------ | ------- | - | ------------------- | ----- | - | ---- | - | ------- | ----------------- |  | ----- | -- |  | --------------- | - |  | ------- | --
|                                           |  | Six months endedJune
30, |         |   | Increase (Decrease) |      
|(in thousands)                             |  | 2010                     |         |   | % of TotalRevenue   |       |   | 2009 |   |         | % of TotalRevenue |  |       | $  |  |                 | % | 
|Revenue                                    |  |                          |         |   |                     |       |   |      |   |         |                   |  |       |    |  |                 |   |  |         |   
|Staffing services                          |  | $                        | 310,154 |   |                     | 72.3  | % |      | $ | 307,205 |                   |  | 69.2  | %  |  | $         2,949 |   |  | 1.0     | % 
|Project outsourcing services               |  |                          | 108,240 |   |                     | 25.2  |   |      |   | 125,737 |                   |  | 28.3  |    |  | (17,497         | ) |  | (13.9   | ) 
|Professional services                      |  |                          | 10,528  |   |                     | 2.5   |   |      |   | 11,136  |                   |  | 2.5   |    |  | (608            | ) |  | (5.5    | ) 
|                                           |  |                          |         |   |                     |       |   |      |   |         |                   |  |       |    |  |                 |   |  |         |   
|                                           |  | $                        | 428,922 |   |                     | 100.0 | % |      | $ | 444,078 |                   |  | 100.0 | %  |  | $    (15,156)   |   |  | (3.4    | )%
|                                           |  |                          |         |   |                     |       |   |      |   |         |                   |  |       |    |  |                 |   |  |         |   
|Gross profit                               |  | $                        | 86,210  |   |                     | 20.1  | % |      | $ | 91,706  |                   |  | 20.7  | %  |  | $      (5,496)  |   |  | (6.0    | )%
|Operating and administrative expenses      |  |                          | 82,027  |   |                     | 19.1  |   |      |   | 91,829  |                   |  | 20.7  |    |  | (9,802          | ) |  | (10.7   | ) 
|Operating profit (loss)                    |  |                          | 4,183   |   |                     | 1.0   |   |      |   | (123    | )                 |  |      |    |  | 4,306           |   |  | 3,500.8 |   
|Net income (loss) attributable to CDI      |  | $                        | 2,399   |   |                     | 0.6   | % |      | $ | (861    | )                 |  | (0.2  | )% |  | $         3,260 |   |  | 378.6   | % 
|Cash flow (used in) provided by operations |  | $                        | (2,357  | ) |                     |       |   |      | $ | 19,757  |                   |  |       |    |  | $    (22,114)   |   |  | (111.9  | )%
|Effective income tax rate                  |  |                          | 27.7    | % |                     |       |   |      | $ | (46.9   | )%                |  |       |    |  |                 |   |  |         |   
|Variable contribution
margin(1)            |  |                          | NM      |   |                     |       |   |      |   | NM      |                   |  |       |    |  |                 |   |  |         |   



|(1) | Year-over-year growth in operating profit divided by year-over-year growth in revenues. The calculations for the periods presented are not meaningful (NM) because
operating profit and/or revenue did not grow for either of the two reporting periods presented.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Revenue declined 3.4% (5.2% in
constant currency) for the first six months of 2010 as compared to the first six months of 2009. ES experienced a continued decline in revenue influenced by the uneven economic recovery and continued uncertainty in the energy sector. This resulted
in reduced demand and delayed or cancelled projects with oil and gas, refining, chemical and specialty chemical and commercial aviation customers and reduced revenue from permanent placement. Anders experienced continued declines in staffing
services, primarily due to weak demand in the UK construction industry, which caused decreases in the volume of staffing demand.

These
declines were partially offset by increased staffing and project outsourcing services revenue from ITS, primarily due to account expansions with existing customers, reflecting the investment and improved productivity in sales and recruiting
resources, as well as by business development efforts across most retail and national accounts. MRI also experienced growth in its staffing business due to several business wins from franchisees growing their staffing services and in its
professional services revenue, primarily due to increased royalties.

Gross profit decreased for the first six months of 2010 as compared to
the first six months of 2009 primarily due to declines in revenue. Gross profit margin decreased due to the change in revenue mix, with lower-margin staffing becoming a larger portion of total revenue, and the decline of higher-margin project
outsourcing revenue.



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##### Table of Contents

Consolidated operating and administrative expenses decreased for the first six months of 2010 as compared to
the first six months of 2009, primarily due to cost reduction initiatives taken through the second quarter of 2010 and the reserve reduction of $1.9 million related to an agreement in principle on the financial terms of a settlement in the DOJ
matter. This benefit was partially offset by second quarter pre-tax charges of $0.4 million for severance and real estate exit costs and $0.1 million in acquisition-related costs associated with the June 28, 2010 purchase of substantially all
of the assets and certain liabilities of L.R. Kimball. The first six months of 2009 included $2.0 million of severance and real estate exit costs.

Operating profit (loss) increased for the first six months of 2010 as compared to the first six months of 2009 and operating profit (loss) margin
increased from (0.0)% to 1.0% primarily due to increased revenue in the second quarter, in addition to the reserve reduction of $1.9 million related to the DOJ matter and the cost reduction measures noted above. These were partially offset by the
$0.4 million of severance and real estate exit costs noted above.

The Companys effective income tax rate was 27.7% for the first six
months of 2010 as compared to (46.9)% for the first six months of 2009. The effective income tax rate for 2010 was favorably impacted primarily by the reduction in the reserve for the DOJ matter, which is largely not tax deductible, partially offset
by adjustments to deferred tax assets and related tax expense for previously issued and unexercised stock options that expired during the period, as well as other valuation differences for stock awards. The income tax rate for 2009 was unfavorably
impacted by projected losses in foreign jurisdictions on which no tax benefit had been recognized or on which the tax benefit was recognized at tax rates lower than the US rate, an increase related to uncertain tax positions and an adjustment to
income taxes payable.

Segment Discussion

ES

Business Strategy

ESs business strategy is to pursue the development of long-term alliances with its customers as a cost-effective, single-source provider of
engineering services and professional staffing. By working as a core supplier and partner with its customers, ES is able to develop an understanding of its customers overall business needs, as well as the unique technical requirements of
their projects. This approach creates the opportunity for ES to provide a greater and more integrated range of services to its customers to facilitate efficient project management, procurement, overall program integration and execution. This
strategy requires ES to develop capabilities to provide services to its customers who have global requirements. The Company formed a joint venture in Kuwait during the fourth quarter of 2008 to provide access to engineering project work in Middle
Eastern petrochemical, industrial and commercial infrastructure projects.

Success of the ES business strategy is dependent upon maintaining
and renewing its existing customers or contracts, continued capital spending by its major engineering customers, the ability to win new contract awards and accounts and the availability of labor at a reasonable cost. ES increased its investment in
business development personnel during the second quarter of 2010. In addition, ES is strategically engaging in global arrangements to lower its labor costs for customers, to access a broader talent pool and to provide worldwide servicing
capabilities for its global customers. As part of this initiative, the Companys joint venture in Mexico commenced operations during the second quarter of 2009.

US and global efforts to limit greenhouse gas emissions, in response to concerns regarding climate change, may present business opportunities for
ES. Regulations, laws and treaties which are designed to reduce greenhouse gas emissions would likely spur increased usage of alternative sources of energy, such as nuclear, solar, wind and biofuels. Such regulations, laws and treaties
would also likely result in greater focus on reducing carbon dioxide emissions at coal and other carbon-based energy-producing facilities, as well as at chemical, refining and other industrial plants. ES currently provides engineering and
design services in connection with alternative energy facilities and with carbon dioxide removal at industrial facilities, and climate change legislation could increase ESs business in those areas. However, the nature and volume of such
additional business would depend on the substantive terms of such legislation, on ESs ability to provide leading-edge technology solutions in these areas, and on ESs ability to compete in what is likely to be a highly competitive
business sector.

ES also provides professional recruitment outsourcing (PRO) services to manage a customers entire
permanent recruitment process. PRO services provide domestic and multi-national customers with a single source of professional and technical permanent placements across an entire organization. ES continues to develop its strategy to acquire broader
skill sets and greater scale leverage.

Key Performance Indicators

ES assesses its performance by monitoring a number of key performance indicators, which include revenue, new contract wins, account growth, contract
renewals, gross profit dollars, gross profit margin, operating profit, operating profit margin and return on net assets.



20



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##### Table of Contents

Revenue reflects performance on both new and existing contracts and accounts. Changes in revenue will not
generally result in proportionate changes in costs, particularly operating and administrative expenses, thus potentially impacting operating profit margins. ESs project outsourcing revenue is affected by levels of capital spending by its
customers. ESs staffing and professional services revenue are affected by the general business environment and employment levels.

New
contract wins, account growth and contract renewals are the primary drivers of future revenue and provide an assessment of ESs ability to compete. New contract wins fluctuate from quarter to quarter, depending on the timing of customer needs
and external factors. Additionally, business development efforts in ES seek to leverage its resume of completed engineering projects, its proven project management skills and its successful management of long-term client relationships to generate
incremental business from new and existing clients.

Gross profit dollars and gross profit margin reflect ESs ability to realize pricing
consistent with value provided, to incorporate changes in market demand and to control and pass through direct costs. ESs focus on maintaining and improving overall margins can lead to improved profitability. Gross margins can also shift as a
result of the mix of business, with project outsourcing services and professional services generally providing higher margins than staffing services. ES utilizes financial modeling and operational reviews in the contracting process to establish
pricing that will lead to acceptable margins and returns.

Operating profit is gross profit less operating and administrative expenses.
Operating profit margin reflects ESs ability to adjust overhead costs to changing business volumes.

Return on net assets
(RONA) reflects ESs ability to generate earnings while optimizing assets deployed in the business. A key driver of RONA is ESs ability to manage its accounts receivable, its largest asset.

Results of Operations

The following
table presents changes in revenue by service type, cost of services, gross profit, operating and administrative expenses and operating profit for ES for the three months ended June 30, 2010 and 2009:

ES

|                                      |  |                            |         |                   |       |   |   |                     |                   |  |       |   |  |   |        |   |  |       |   
|------------------------------------- |  | -------------------------- | ------- | ----------------- | ----- | - | - | ------------------- | ----------------- |  | ----- | - |  | - | ------ | - |  | ----- | --
|                                      |  | Three months endedJune
30, |         |                   |       |   |   |                     |                  
|                                      |  | 2010                       |         |                   | 2009  |   |   | Increase (Decrease) |                  
|(in thousands)                        |  | $                          |         | % of TotalRevenue |       |   | $ |                     | % of TotalRevenue |  |       | $ |  |   | %      |  
|Revenue                               |  |                            |         |                   |       |   |   |                     |                   |  |       |   |  |   |        |   |  |       |   
|Staffing services                     |  | $                          | 63,398  |                   | 57.6  | % |   | $                   | 63,353            |  | 53.5  | % |  | $ | 45     |   |  | 0.1   | % 
|Project outsourcing services          |  |                            | 46,542  |                   | 42.2  |   |   |                     | 53,796            |  | 45.4  |   |  |   | (7,254 | ) |  | (13.5 | ) 
|Professional services                 |  |                            | 257     |                   | 0.2   |   |   |                     | 1,307             |  | 1.1   |   |  |   | (1,050 | ) |  | (80.3 | ) 
|                                      |  |                            |         |                   |       |   |   |                     |                   |  |       |   |  |   |        |   |  |       |   
|                                      |  |                            | 110,197 |                   | 100.0 |   |   |                     | 118,456           |  | 100.0 |   |  |   | (8,259 | ) |  | (7.0  | ) 
|Cost of services                      |  |                            | 89,822  |                   | 81.5  |   |   |                     | 95,191            |  | 80.4  |   |  |   | (5,369 | ) |  | (5.6  | ) 
|                                      |  |                            |         |                   |       |   |   |                     |                   |  |       |   |  |   |        |   |  |       |   
|Gross profit                          |  |                            | 20,375  |                   | 18.5  |   |   |                     | 23,265            |  | 19.6  |   |  |   | (2,890 | ) |  | (12.4 | ) 
|Operating and administrative expenses |  |                            | 17,281  |                   | 15.7  |   |   |                     | 19,768            |  | 16.6  |   |  |   | (2,487 | ) |  | (12.6 | ) 
|                                      |  |                            |         |                   |       |   |   |                     |                   |  |       |   |  |   |        |   |  |       |   
|Operating profit                      |  | $                          | 3,094   |                   | 2.8   | % |   | $                   | 3,497             |  | 3.0   | % |  | $ | (403   | ) |  | (11.5 | )%
|                                      |  |                            |         |                   |       |   |   |                     |                   |  |       |   |  |   |        |   |  |       |   

ESs revenue decreased during the second quarter of 2010 as compared to the second quarter of 2009 primarily
due to:



| |  |  | The uneven economic recovery and continued uncertainty in the energy sector, which resulted in reduced demand and delayed or cancelled projects with
oil and gas, refining, chemical and specialty chemical and commercial aviation customers;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Project stoppage due to a budget funding gap in a defense project in project outsourcing services in the Government Services vertical in combination
with customer delays in other projects; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Declines in professional services related to the completion of a customer contract and declines in customers hiring.
| | - |  | ---------------------------------------------------------------------------------------------------------------------

The decreases listed above were partially offset by increases in work performed on several US Navy shipbuilding, ship
design and refurbishment projects and a slight increase in staffing services, driven by increases in certain staffing projects as companies proceeded with maintenance activities as the economy slowly improved.



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ESs gross profit dollars decreased during the second quarter of 2010 as compared to the second quarter
of 2009 primarily due to declines in revenue. Gross profit margin decreased due to the change in revenue mix, with lower-margin staffing becoming a larger portion of total revenue, as well as the decline in higher-margin revenue from professional
services.

ESs operating and administrative expenses decreased during the second quarter of 2010 as compared to the second quarter of
2009 primarily due to decreased headcount, as well as other cost reduction initiatives taken through the second quarter of 2010 and a reserve reduction of $1.9 million related to an agreement in principle on the financial terms of a settlement in
the DOJ matter (see Note 9  Commitments, Contingencies and Legal Proceedings in the notes to the consolidated financial statements). These were partially offset by $0.3 of severance and real estate exit costs in the second quarter of 2010. The
second quarter of 2009 included $0.3 million of severance costs.

ESs operating profit declined during the second quarter of 2010 as
compared to the second quarter of 2009 primarily due to the decrease in revenue and a decrease in higher margin project outsourcing services, partially offset by decreased operating and administrative expenses related to the cost reduction
activities mentioned above.

The following table presents changes in revenue for each of ESs verticals for the three months ended
June 30, 2010 and 2009:



|                        |      |                            |         |                   |       |   |                     |   |                   |  |       |   |  |   |        |   |  |       |   
|----------------------- | ---- | -------------------------- | ------- | ----------------- | ----- | - | ------------------- | - | ----------------- |  | ----- | - |  | - | ------ | - |  | ----- | --
|                        |      | Three months endedJune
30, |         |                   |       |  
|                        | 2010 |                            |         | 2009              |       |   | Increase (Decrease) |  
|(in thousands)          |      | $                          |         | % of TotalRevenue |       |   | $                   |   | % of TotalRevenue |  |       | $ |  |   | %      |  
|Revenue                 |      |                            |         |                   |       |   |                     |   |                   |  |       |   |  |   |        |   |  |       |   
|CDI-P & I(1)            |      | $                          | 77,476  |                   | 70.3  | % |                     | $ | 81,963            |  | 69.2  | % |  | $ | (4,487 | ) |  | (5.5  | )%
|CDI-Government Services |      |                            | 19,801  |                   | 18.0  |   |                     |   | 22,163            |  | 18.7  |   |  |   | (2,362 | ) |  | (10.7 | ) 
|CDI-Aerospace(1)        |      |                            | 12,227  |                   | 11.1  |   |                     |   | 14,330            |  | 12.1  |   |  |   | (2,103 | ) |  | (14.7 | ) 
|CDI-Infrastructure      |      |                            | 693     |                   | 0.6   |   |                     |   |                  |  |      |   |  |   | 693    |   |  | NM    |   
|                        |      |                            |         |                   |       |   |                     |   |                   |  |       |   |  |   |        |   |  |       |   
|                        |      | $                          | 110,197 |                   | 100.0 | % |                     | $ | 118,456           |  | 100.0 | % |  | $ | (8,259 | ) |  | (7.0  | )%
|                        |      |                            |         |                   |       |   |                     |   |                   |  |       |   |  |   |        |   |  |       |   



|(1) | Revenue for 2009 has been reclassified to conform to the 2010 presentation.
|--- | ---------------------------------------------------------------------------

The P & I vertical provides a full range of engineering, project management, design, professional staffing and outsourcing solutions to firms in oil,
gas, refining, alternative energy, power generation and energy transmission, nuclear, chemical and heavy manufacturing industries. Typically, these customers are large, multi-national companies that use multiple service providers. In addition, P
& I offers facility design, project management, engineering, professional staffing and facility start-up services to customers in the pharmaceutical, bio-pharmaceutical and regulated medical services industries. Contracts are awarded based on
the ability to meet the specific requirements of each individual project. Revenue in the P & I vertical decreased during the second quarter of 2010 as compared to second quarter of 2009 due to the completion of certain staffing projects in
Canada and decreases in project outsourcing services due to the uneven economic recovery and continued uncertainty in the energy sector, resulting in delayed or cancelled projects with oil and gas, refining, chemical and specialty chemical
customers.

The Government Services vertical provides a full range of engineering, design and logistics services to the defense industry,
particularly in marine design, systems development and military aviation support. Revenue decreased within the Government Services vertical during the second quarter of 2010 as compared to second quarter of 2009 primarily due to project stoppage due
to a budget funding gap in a large project in combination with customer delays in other projects, partially offset by continuing work on several US Navy shipbuilding, ship design and refurbishment projects.

The Aerospace vertical provides a full range of engineering, design, project management, professional engineering staffing and outsourcing solutions to
both the commercial and military aerospace markets. Revenue within the Aerospace vertical decreased during the second quarter of 2010 as compared to second quarter of 2009, primarily as a result of continued weak demand from the commercial aviation
industry.

The Infrastructure vertical provides a full range of architecture, civil and environmental engineering, communication technology
and consulting services to governmental, educational and private industry customers, through a network of offices primarily in the mid-Atlantic region. This vertical was established in the second quarter with the June 28, 2010 purchase of
substantially all of the assets and certain liabilities of L.R. Kimball. The results of L.R. Kimball are included in the vertical from the date of acquisition through June 30, 2010.



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##### Table of Contents

The following table presents changes in revenue by service type, cost of services, gross profit, operating
and administrative expenses and operating profit for ES for the six months ended June 30, 2010 and 2009:

ES

|                                      |  |                          |         |                   |       |   |   |                     |                   |  |       |   |  |   |         |   |  |       |   
|------------------------------------- |  | ------------------------ | ------- | ----------------- | ----- | - | - | ------------------- | ----------------- |  | ----- | - |  | - | ------- | - |  | ----- | --
|                                      |  | Six months endedJune
30, |         |                   |       |   |   |                     |                  
|                                      |  | 2010                     |         |                   | 2009  |   |   | Increase (Decrease) |                  
|(in thousands)                        |  | $                        |         | % of TotalRevenue |       |   | $ |                     | % of TotalRevenue |  |       | $ |  |   | %       |  
|Revenue                               |  |                          |         |                   |       |   |   |                     |                   |  |       |   |  |   |         |   |  |       |   
|Staffing services                     |  | $                        | 126,228 |                   | 57.4  | % |   | $                   | 131,675           |  | 53.3  | % |  | $ | (5,447  | ) |  | (4.1  | )%
|Project outsourcing services          |  |                          | 93,127  |                   | 42.4  |   |   |                     | 113,111           |  | 45.8  |   |  |   | (19,984 | ) |  | (17.7 | ) 
|Professional services                 |  |                          | 546     |                   | 0.2   |   |   |                     | 2,225             |  | 0.9   |   |  |   | (1,679  | ) |  | (75.5 | ) 
|                                      |  |                          |         |                   |       |   |   |                     |                   |  |       |   |  |   |         |   |  |       |   
|                                      |  |                          | 219,901 |                   | 100.0 |   |   |                     | 247,011           |  | 100.0 |   |  |   | (27,110 | ) |  | (11.0 | ) 
|Cost of services                      |  |                          | 180,099 |                   | 81.9  |   |   |                     | 198,579           |  | 80.4  |   |  |   | (18,480 | ) |  | (9.3  | ) 
|                                      |  |                          |         |                   |       |   |   |                     |                   |  |       |   |  |   |         |   |  |       |   
|Gross profit                          |  |                          | 39,802  |                   | 18.1  |   |   |                     | 48,432            |  | 19.6  |   |  |   | (8,630  | ) |  | (17.8 | ) 
|Operating and administrative expenses |  |                          | 35,238  |                   | 16.0  |   |   |                     | 41,486            |  | 16.8  |   |  |   | (6,248  | ) |  | (15.1 | ) 
|                                      |  |                          |         |                   |       |   |   |                     |                   |  |       |   |  |   |         |   |  |       |   
|Operating profit                      |  | $                        | 4,564   |                   | 2.1   | % |   | $                   | 6,946             |  | 2.8   | % |  | $ | (2,382  | ) |  | (34.3 | )%
|                                      |  |                          |         |                   |       |   |   |                     |                   |  |       |   |  |   |         |   |  |       |   

ESs revenue decreased during the first six months of 2010 as compared to the first six months of 2009
primarily due to:



| |  |  | The uneven economic recovery and continued uncertainty in the energy sector, which resulted in reduced demand and delayed or cancelled projects with
oil and gas, refining, chemical and specialty chemical, alternative energy and commercial aviation customers;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Project stoppage due to a budget funding gap in a defense project in project outsourcing services in the Government Services vertical in combination
with customer delays in other projects; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Declines in professional services related to the completion of a customer contract and declines in customers hiring.
| | - |  | ---------------------------------------------------------------------------------------------------------------------

The decreases listed above were partially offset by increases in work performed on several US Navy shipbuilding, ship
design and refurbishment projects and increases in certain staffing projects as companies proceeded with maintenance activities as the economy slowly improved.

ESs gross profit dollars decreased during the first six months of 2010 as compared to the first six months of 2009 primarily due to declines in
revenue. Gross profit margin decreased due to the change in revenue mix, with lower-margin staffing becoming a larger portion of total revenue, as well as the decline in higher-margin revenue from professional services.

ESs operating and administrative expenses decreased during the first six months of 2010 as compared to the first six months of 2009 primarily due
to decreased headcount, as well as other cost reduction initiatives taken through the second quarter of 2010 and the reserve reduction of $1.9 million related to an agreement in principle on the financial terms of a settlement in the DOJ matter.
These were partially offset by $0.1 million of acquisition-related costs and $0.3 of severance and real estate exit costs in the second quarter of 2010. The first six months of 2009 included $1.1 million of severance and real estate exit costs.

ESs operating profit declined during the first six months of 2010 as compared to the first six months of 2009 primarily due to the
decrease in revenue and a decrease in higher margin project outsourcing services, partially offset by decreased operating and administrative expenses related to the cost reduction activities mentioned above.



23



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##### Table of Contents

The following table presents changes in revenue for each of ESs verticals for the six months ended
June 30, 2010 and 2009:



|                        |  |                           |  |                   |      |  |   |                     |                   |       |   |   |             |   |        |   
|----------------------- |  | ------------------------- |  | ----------------- | ---- |  | - | ------------------- | ----------------- | ----- | - | - | ----------- | - | ------ | --
|                        |  | Six months ended
June 30, |  |                   |      | 
|                        |  | 2010                      |  |                   | 2009 |  |   | Increase (Decrease) |                  
|(in thousands)          |  | $                         |  | % of TotalRevenue |      |  | $ |                     | % of TotalRevenue |       |   | $ |             | % |       
|Revenue                 |  |                           |  |                   |      |  |   |                     |                   |       |   |   |             |   |        |   
|CDI-P & I(1)            |  | $  155,098                |  | 70.6              | %    |  | $ | 173,642             |                   | 70.3  | % |   | $  (18,544) |   | (10.7  | )%
|CDI-Government Services |  | 39,859                    |  | 18.1              |      |  |   | 44,057              |                   | 17.8  |   |   | (4,198)     |   | (9.5)  |   
|CDI-Aerospace(1)        |  | 24,251                    |  | 11.0              |      |  |   | 29,312              |                   | 11.9  |   |   | (5,061)     |   | (17.3) |   
|CDI-Infrastructure      |  | 693                       |  | 0.3               |      |  |   |                    |                   |      |   |   | 693         |   | NM     |   
|                        |  |                           |  |                   |      |  |   |                     |                   |       |   |   |             |   |        |   
|                        |  | $  219,901                |  | 100.0             | %    |  | $ | 247,011             |                   | 100.0 | % |   | $  (27,110) |   | (11.0  | )%
|                        |  |                           |  |                   |      |  |   |                     |                   |       |   |   |             |   |        |   



|(1) | Revenue for 2009 has been reclassified to conform to the 2010 presentation.
|--- | ---------------------------------------------------------------------------

The P & I vertical provides a full range of engineering, project management, design, professional staffing and outsourcing solutions to firms in oil,
gas, refining, alternative energy, power generation and energy transmission, nuclear, chemical and heavy manufacturing industries. Typically, these customers are large, multi-national companies that use multiple service providers. In addition, P
& I offers facility design, project management, engineering, professional staffing and facility start-up services to customers in the pharmaceutical, bio-pharmaceutical and regulated medical services industries. Contracts are awarded based on
the ability to meet the specific requirements of each individual project. Revenue in the P & I vertical decreased during the first six months of 2010 as compared to first six months of 2009 due to the completion of certain staffing projects in
Canada and decreases in project outsourcing services caused by the uneven economic recovery and continued uncertainty in the energy sector, resulting in delayed or cancelled projects with oil and gas, refining, chemical and specialty chemical and
alternative energy customers.

The Government Services vertical provides a full range of engineering, design and logistics services to the
defense industry, particularly in marine design, systems development and military aviation support. Revenue decreased within the Government Services vertical during the first six months of 2010 as compared to first six months of 2009 primarily due
to project stoppage due to a budget funding gap in a large project in combination with customer delays in other projects, partially offset by continuing work on several US Navy shipbuilding, ship design and refurbishment projects.

The Aerospace vertical provides a full range of engineering, design, project management, professional engineering staffing and outsourcing solutions to
both the commercial and military aerospace markets. Revenue within the Aerospace vertical decreased during the first six months of 2010 as compared to first six months of 2009, primarily as a result of continued weak demand from the commercial
aviation industry.

The Infrastructure vertical provides a full range of architecture, civil and environmental engineering, communication
technology and consulting services to governmental, educational and private industry customers, through a network of offices primarily in the mid-Atlantic region. This vertical was established in the second quarter with the June 28, 2010
purchase of substantially all of the assets and certain liabilities of L.R. Kimball. The results of L.R. Kimball are included in the vertical from the date of acquisition through June 30, 2010.

MRI

Business Strategy

The MRI network is one of the largest search and recruitment organizations in the world. The key to MRIs business model is
delivering value to its franchisees by providing them with the use of its trademarks, business systems and training and support services to enable them to engage in the search and recruitment of managerial, professional, executive, administrative
and technical personnel for employment by their customers. MRIs strategic objectives include expansion of the number of current franchisees search consultants, expansion of the international franchise network and growth in underdeveloped
US markets. On January 22, 2009, the Company terminated its master franchise agreement with MRI Worldwide Network, Limited and had assigned to it the benefit of the franchise agreements of MRI Worldwide Network, Limiteds sub-franchisees.
Subsequently, the Company has been operating the business as a franchisor. MRI believes that the international marketplace provides opportunity for franchise expansion and the potential for franchise sales and royalty revenues.

MRI continues to focus its efforts on growing existing franchisees by devoting resources to field service teams. These teams focus on maximizing customer
contact and developing business plans to establish clear metrics and optimize network member performance. In addition, due to the current economic climate, MRI is providing increased guidance to franchisees, focusing on financial business
operations, cost reduction and business efficiencies. The ability of an individual franchisee to compete and operate successfully may



24



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##### Table of Contents

be affected by the service quality of its office, the number of permanent placement offices operating in a
particular industry segment, company reputation and other general and local economic factors.

MRI continues to provide training and
operations support to enable its franchisees to develop staffing services capabilities in their offices. These capabilities potentially provide a franchise owner with a complementary revenue stream and may improve the potential market value of the
franchise office. MRI also continually works to leverage its size and footprint with vendor alliance relationships that will benefit the franchise owners and their customers.

In response to the tightening credit markets, in 2009 MRI implemented a new pricing structure in the US with an initial fee of approximately $40,000, a
service fee, payable monthly for the first twelve months of operation, totaling $24,000, and a revised royalty rate schedule starting at 9%.

Key Performance Indicators

MRI assesses
its performance by monitoring a number of key performance indicators, which include billings, royalties, number of franchise offices, franchise sales, billable hours, revenue, gross profit dollars, gross profit margin, operating profit, operating
profit margin and return on net assets.

Billings measure the relative success of franchisee sales and recruiting efforts. Permanent
placements are driven by customer demand for mid-to-upper level managerial, professional and sales candidates. This demand provides more opportunities for franchisees to make permanent placements, which lead to increases in franchisee billings and,
consequently, royalty revenues to MRI. Growth in the number of franchise offices provides more opportunity to satisfy this customer demand and over time leads to growth in royalties.

The number of franchise offices measures MRIs overall market penetration and franchise sales measure MRIs ability to expand its market reach.
MRI gauges the strength of its franchise sales program by monitoring the number of referrals, sales presentations and sales, closing percentage and the success of the franchisees.

Billable hours and revenue in staffing services are significantly influenced by MRIs performance in successfully expanding these service offerings
within the franchise network. Factors affecting MRIs revenue include the state of the US and global economies, employment rates and the amount of staffing business done by franchisees. Economic growth or decline typically impacts the demand
for labor. In periods of increasing unemployment and slowing GDP growth, MRI customers tend to first cut-back on their contract workforce. As economic weakness continues, MRI customers then tend to decrease permanent headcount. In a recovering
economy, MRI customers tend first to increase their contract employee headcount and to delay hiring permanent employees until later in the recovery cycle, when they are more certain that the recovery will continue.

Gross profit dollars and gross profit margin reflect MRIs ability to improve its franchisees permanent placement capabilities, thus
increasing royalty payments to MRI. Additionally, gross profit margin reflects MRIs ability to identify and sell franchise territories to new franchise owners, thus producing franchise sales revenue. In both cases, revenues flow directly
through to gross profit dollars and gross profit margin. Revenue from the staffing business has associated direct costs included in gross profit dollars and gross profit margin and therefore growth in this business will reduce overall gross profit
margin. However, MRI believes the staffing offering will create a stronger, more vibrant and profitable franchise business. Within staffing, gross profit dollars and gross profit margin can be increased as franchise owners build their staffing and
recruiting capabilities to generate higher bill rates for the placement of high level professionals.

Operating profit is gross profit less
operating and administrative expenses. Operating profit margin reflects MRIs ability to adjust overhead costs to changing business volumes.

Return on net assets (RONA) reflects MRIs ability to generate earnings while optimizing assets deployed in the business. A key driver
of RONA is MRIs ability to manage its accounts receivable, its largest asset.



25



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##### Table of Contents

Results of Operations

The following table presents changes in revenue by service type, cost of services, gross profit, operating and administrative expenses and operating
profit for MRI for the three months ended June 30, 2010 and 2009:

MRI

|                                      |  |                            |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |  |       |  
|------------------------------------- |  | -------------------------- | ------ | ----------------- | ----- | - | - | ------------------- | ----------------- |  | ----- | - |  | - | ----- |  | ----- | -
|                                      |  | Three months endedJune
30, |        |                   |       |   |   |                    
|                                      |  | 2010                       |        |                   | 2009  |   |   | Increase (Decrease) |                  
|(in thousands)                        |  | $                          |        | % of TotalRevenue |       |   | $ |                     | % of TotalRevenue |  |       | $ |  | % |      
|Revenue                               |  |                            |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |  |       |  
|Staffing services                     |  | $                          | 11,087 |                   | 73.4  | % |   | $                   | 9,749             |  | 73.7  | % |  | $ | 1,338 |  | 13.7  | %
|Professional services                 |  |                            | 4,021  |                   | 26.6  |   |   |                     | 3,484             |  | 26.3  |   |  |   | 537   |  | 15.4  |  
|                                      |  |                            |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |  |       |  
|                                      |  |                            | 15,108 |                   | 100.0 |   |   |                     | 13,233            |  | 100.0 |   |  |   | 1,875 |  | 14.2  |  
|Cost of services                      |  |                            | 7,091  |                   | 46.9  |   |   |                     | 6,735             |  | 50.9  |   |  |   | 356   |  | 5.3   |  
|                                      |  |                            |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |  |       |  
|Gross profit                          |  |                            | 8,017  |                   | 53.1  |   |   |                     | 6,498             |  | 49.1  |   |  |   | 1,519 |  | 23.4  |  
|Operating and administrative expenses |  |                            | 6,262  |                   | 41.5  |   |   |                     | 6,028             |  | 45.5  |   |  |   | 234   |  | 3.9   |  
|                                      |  |                            |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |  |       |  
|Operating profit                      |  | $                          | 1,755  |                   | 11.6  | % |   | $                   | 470               |  | 3.6   | % |  | $ | 1,285 |  | 273.4 | %
|                                      |  |                            |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |  |       |  

MRIs staffing revenue increased for the second quarter of 2010 as compared to the second quarter of 2009 due
to several business wins, resulting from franchisees growing their staffing services. The increase in professional services revenue was primarily due to increased royalties.

MRIs gross profit dollars increased for the second quarter of 2010 as compared to the second quarter of 2009 primarily due to increases in revenue.
Gross profit margin increased primarily due to both increases in higher-margin professional services revenue and growth in certain higher-margin staffing accounts.

MRIs operating and administrative expenses increased during the second quarter of 2010 as compared to the second quarter of 2009 primarily due to
increases in commission costs related to the increased business volumes in staffing services, partially offset by savings realized from cost reduction measures taken throughout 2009 and into the first half of 2010. There was $0.1 million of
severance costs in the second quarter of 2009.

The following table presents changes in revenue by service type, cost of services, gross
profit, operating and administrative expenses and operating profit for MRI for the six months ended June 30, 2010 and 2009:

MRI

|                                      |  |                          |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |   |  |       |  
|------------------------------------- |  | ------------------------ | ------ | ----------------- | ----- | - | - | ------------------- | ----------------- |  | ----- | - |  | - | ----- | - |  | ----- | -
|                                      |  | Six months endedJune
30, |        |                   |       |   |   |                     |                  
|                                      |  | 2010                     |        |                   | 2009  |   |   | Increase (Decrease) |                  
|(in thousands)                        |  | $                        |        | % of TotalRevenue |       |   | $ |                     | % of TotalRevenue |  |       | $ |  |   | %     |  
|Revenue                               |  |                          |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |   |  |       |  
|Staffing services                     |  | $                        | 21,598 |                   | 73.3  | % |   | $                   | 20,633            |  | 74.1  | % |  | $ | 965   |   |  | 4.7   | %
|Professional services                 |  |                          | 7,872  |                   | 26.7  |   |   |                     | 7,221             |  | 25.9  |   |  |   | 651   |   |  | 9.0   |  
|                                      |  |                          |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |   |  |       |  
|                                      |  |                          | 29,470 |                   | 100.0 |   |   |                     | 27,854            |  | 100.0 |   |  |   | 1,616 |   |  | 5.8   |  
|Cost of services                      |  |                          | 14,203 |                   | 48.2  |   |   |                     | 14,301            |  | 51.3  |   |  |   | (98   | ) |  | (0.7  | )
|                                      |  |                          |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |   |  |       |  
|Gross profit                          |  |                          | 15,267 |                   | 51.8  |   |   |                     | 13,553            |  | 48.7  |   |  |   | 1,714 |   |  | 12.6  |  
|Operating and administrative expenses |  |                          | 12,081 |                   | 41.0  |   |   |                     | 13,079            |  | 47.0  |   |  |   | (998  | ) |  | (7.6  | )
|                                      |  |                          |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |   |  |       |  
|Operating profit                      |  | $                        | 3,186  |                   | 10.8  | % |   | $                   | 474               |  | 1.7   | % |  | $ | 2,712 |   |  | 572.2 | %
|                                      |  |                          |        |                   |       |   |   |                     |                   |  |       |   |  |   |       |   |  |       |  

MRIs staffing revenue increased for the first six months of 2010 as compared to the first six months of 2009
due to several business wins in the second quarter, resulting from franchisees growing their staffing services. The increase in professional services revenue was due to increased franchise sales during 2010 and increased royalties.

MRIs gross profit dollars increased for the first six months of 2010 as compared to the first six months of 2009 primarily due to increases in
revenue. Gross profit margin increased primarily due to the increases in higher-margin professional services revenue, as well as growth in certain higher-margin staffing accounts.



26



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##### Table of Contents

MRIs operating and administrative expenses decreased during the first six months of 2010 as compared
to the first six months of 2009 primarily due to:



| |  |  | Decreased headcount and other savings realized from cost reduction measures taken throughout 2009 and into the first six months of 2010, partially
offset by increases in commission costs related to the increased business volumes in staffing services;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Absence of $0.3 million of severance costs and legal fees associated with the termination of the Companys master franchise agreement with MRI
Worldwide Network, Limited in the first six months of 2009; and
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Smaller bad debt reserves related to domestic franchises.
| | - |  | ---------------------------------------------------------

Anders

Business Strategy

Anders is focused on providing recruitment services within the UK and Australian construction and infrastructure environment. Anders seeks
to deliver these services through the management of an efficient operation that provides customers with qualified contract and permanent professionals. Management believes Anders candidate attraction methodology, including use of web-based
recruiting and its candidate database, as well as external databases and referrals, is critical to providing it with a large pool of highly qualified candidates and enhances the Companys ability to filter candidates to meet specific customer
needs. Additionally, Anders seeks to capitalize on and develop its international capabilities in order to provide services to its customers who have global requirements.

The UK infrastructure sector provides opportunities with the rebuilding of the countrys rail system, other government-related projects and private
industry-related projects. Anders is pursuing these opportunities by redeploying producers to areas that are expected to grow in spite of the current economic slowdown, specifically the 2012 London Olympics and government spending-backed
transportation and infrastructure projects. Additionally, Anders is expanding its capabilities to provide centralized, efficient staffing services to national accounts to better serve their business needs.

Anders offices in Australia provide a pool of candidates to the UK labor market, in addition to generating business from Australia-based customers.

Key Performance Indicators

Anders assesses its performance by monitoring a number of key performance indicators, which include revenue, direct margin by recruiter and branch office,
staff payroll costs as a percentage of gross profit, gross profit pounds, gross profit margin, operating profit, operating profit margin and return on net assets.

Revenue reflects performance on both new and existing contracts and accounts. Changes in revenue may not result in proportionate changes in costs, thus
potentially impacting operating profit margins. Anders revenue is affected by levels of capital spending by customers, as well as the general business environment and employment levels.

Monitoring direct margin by recruiter and branch office enables Anders to focus on increasing productivity, thereby increasing profit margins. Anders
also monitors its staff payroll costs as a percentage of gross profit to evaluate recruiter and branch effectiveness. The lower the percentage of staff payroll costs to gross profit, the more efficiently Anders is operating. This allows Anders to
identify the most efficient branches and to apply the methods used in those branches to improve the performance of its other branches. Monitoring recruiter and branch performance also allows Anders to promote delivery of high levels of service to
customers.

Gross profit pounds and gross profit margin reflect Anders ability to realize pricing consistent with value provided, to
incorporate changes in market demand and to control and pass through direct costs. Gross margin may not increase at the same percentage rate as revenue. Permanent placement revenue has a significant impact on gross margin. Since there are no direct
costs associated with permanent placement revenue, increases or decreases in permanent placement revenue can have a disproportionate impact on gross profit margin.

Operating profit is gross profit less operating and administrative expenses. Operating profit margin reflects Anders ability to adjust overhead
costs to changing business volumes.

Return on net assets (RONA) reflects Anders ability to generate earnings while
optimizing assets deployed in the business. A key driver of RONA is Anders ability to manage its accounts receivable, its largest asset.



27



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##### Table of Contents

Results of Operations

The following table presents changes in revenue by service type, cost of services, gross profit, operating and administrative expenses and operating loss
for Anders for the three months ended June 30, 2010 and 2009 in US dollars:

Anders

|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|------------------------------------- |  | -------------------------- | ------ | - | ----------------- | ----- | -- | ------------------- | - | ------ | ----------------- |  | ----- | -- |  | - | ------ | - |  | ----- | --
|                                      |  | Three months endedJune
30, |        |   |                   |       |    |                     |  
|                                      |  | 2010                       |        |   | 2009              |       |    | Increase (Decrease) |  
|(US dollars in thousands)             |  | $                          |        |   | % of TotalRevenue |       |    | $                   |   |        | % of TotalRevenue |  |       | $  |  |   | %      |  
|Revenue                               |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|Staffing services                     |  | $                          | 16,026 |   |                   | 94.7  | %  |                     | $ | 24,979 |                   |  | 97.9  | %  |  | $ | (8,953 | ) |  | (35.8 | )%
|Professional services                 |  |                            | 904    |   |                   | 5.3   |    |                     |   | 538    |                   |  | 2.1   |    |  |   | 366    |   |  | 68.0  |   
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|                                      |  |                            | 16,930 |   |                   | 100.0 |    |                     |   | 25,517 |                   |  | 100.0 |    |  |   | (8,587 | ) |  | (33.7 | ) 
|Cost of services                      |  |                            | 13,788 |   |                   | 81.4  |    |                     |   | 21,563 |                   |  | 84.5  |    |  |   | (7,775 | ) |  | (36.1 | ) 
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|Gross profit                          |  |                            | 3,142  |   |                   | 18.6  |    |                     |   | 3,954  |                   |  | 15.5  |    |  |   | (812   | ) |  | (20.5 | ) 
|Operating and administrative expenses |  |                            | 4,021  |   |                   | 23.8  |    |                     |   | 5,884  |                   |  | 23.1  |    |  |   | (1,863 | ) |  | (31.7 | ) 
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|Operating loss                        |  | $                          | (879   | ) |                   | (5.2  | )% |                     | $ | (1,930 | )                 |  | (7.6  | )% |  | $ | 1,051  |   |  | (54.5 | )%
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   

The following table presents changes in revenue by service type, cost of services, gross profit, operating and
administrative expenses and operating loss for Anders for the six months ended June 30, 2010 and 2009 in US dollars:

Anders



|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|------------------------------------- |  | ------------------------ | ------ | - | ----------------- | ----- | -- | ------------------- | - | ------ | ----------------- |  | ----- | -- |  | - | ------- | - |  | ----- | --
|                                      |  | Six months endedJune
30, |        |   |                   |       |    |                     |  
|                                      |  | 2010                     |        |   | 2009              |       |    | Increase (Decrease) |  
|(US dollars in thousands)             |  | $                        |        |   | % of TotalRevenue |       |    | $                   |   |        | % of TotalRevenue |  |       | $  |  |   | %       |  
|Revenue                               |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|Staffing services                     |  | $                        | 36,683 |   |                   | 95.3  | %  |                     | $ | 52,036 |                   |  | 97.2  | %  |  | $ | (15,353 | ) |  | (29.5 | )%
|Professional services                 |  |                          | 1,799  |   |                   | 4.7   |    |                     |   | 1,515  |                   |  | 2.8   |    |  |   | 284     |   |  | 18.7  |   
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|                                      |  |                          | 38,482 |   |                   | 100.0 |    |                     |   | 53,551 |                   |  | 100.0 |    |  |   | (15,069 | ) |  | (28.1 | ) 
|Cost of services                      |  |                          | 31,619 |   |                   | 82.2  |    |                     |   | 44,698 |                   |  | 83.5  |    |  |   | (13,079 | ) |  | (29.3 | ) 
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|Gross profit                          |  |                          | 6,863  |   |                   | 17.8  |    |                     |   | 8,853  |                   |  | 16.5  |    |  |   | (1,990  | ) |  | (22.5 | ) 
|Operating and administrative expenses |  |                          | 8,197  |   |                   | 21.3  |    |                     |   | 11,982 |                   |  | 22.3  |    |  |   | (3,785  | ) |  | (31.6 | ) 
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|Operating loss                        |  | $                        | (1,334 | ) |                   | (3.5  | )% |                     | $ | (3,129 | )                 |  | (5.8  | )% |  | $ | 1,795   |   |  | (57.4 | )%
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   



28



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##### Table of Contents

To more effectively discuss the comparative results of operations for the three months ended June 30,
2010 and 2009, the following table presents Anders results on a constant currency basis (i.e. British pounds):

Anders

|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|------------------------------------- |  | -------------------------- | ------ | - | ----------------- | ----- | -- | ------------------- | - | ------ | ----------------- |  | ----- | -- |  | - | ------ | - |  | ----- | --
|                                      |  | Three months endedJune
30, |        |   |                   |       |    |                     |  
|                                      |  | 2010                       |        |   | 2009              |       |    | Increase (Decrease) |  
|(British pounds in thousands)         |  | £                          |        |   | % of TotalRevenue |       |    | £                   |   |        | % of TotalRevenue |  |       | £  |  |   | %      |  
|Revenue                               |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|Staffing services                     |  | £                          | 10,729 |   |                   | 94.7  | %  |                     | £ | 16,222 |                   |  | 97.9  | %  |  | £ | (5,493 | ) |  | (33.9 | )%
|Professional services                 |  |                            | 606    |   |                   | 5.3   |    |                     |   | 356    |                   |  | 2.1   |    |  |   | 250    |   |  | 70.2  |   
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|                                      |  |                            | 11,335 |   |                   | 100.0 |    |                     |   | 16,578 |                   |  | 100.0 |    |  |   | (5,243 | ) |  | (31.6 | ) 
|Cost of services                      |  |                            | 9,231  |   |                   | 81.4  |    |                     |   | 14,003 |                   |  | 84.5  |    |  |   | (4,772 | ) |  | (34.1 | ) 
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|Gross profit                          |  |                            | 2,104  |   |                   | 18.6  |    |                     |   | 2,575  |                   |  | 15.5  |    |  |   | (471   | ) |  | (18.3 | ) 
|Operating and administrative expenses |  |                            | 2,688  |   |                   | 23.8  |    |                     |   | 3,831  |                   |  | 23.1  |    |  |   | (1,143 | ) |  | (29.8 | ) 
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   
|Operating loss                        |  | £                          | (584   | ) |                   | (5.2  | )% |                     | £ | (1,256 | )                 |  | (7.6  | )% |  | £ | 672    |   |  | (53.5 | )%
|                                      |  |                            |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |        |   |  |       |   

Anders staffing services revenue decreased during the second quarter of 2010 as compared to the second quarter of 2009
primarily due to continued weak demand in the UK construction industry, which resulted in decreases in staffing demand. The increase in professional services revenue was primarily due to growth in the Australian natural resources market for
permanent placement services.

Anders gross profit pounds decreased during the second quarter of 2010 as compared to the second quarter
of 2009 primarily due to the decline in revenue. Gross profit margin increased during the second quarter of 2010 as compared to the second quarter of 2009 primarily due to a change in mix as higher-margin professional services revenue was a larger
portion of total revenue than in the prior year.

Anders operating and administrative expenses decreased during the second quarter of
2010 as compared to the second quarter of 2009 primarily due to decreases in salaries and variable compensation related to cost reduction measures taken throughout 2009 and early 2010. These cost reduction measures, such as decreases in headcount
and office downsizing, included structural changes and operational alignment with lower business volumes.

Anders operating loss
decreased during the second quarter of 2010 as compared to second quarter of 2009 due to the decrease in operating and administrative expenses exceeding the smaller reduction in gross profit. The cost reduction activities taken throughout 2009 and
early 2010 have provided savings in the second quarter of 2010 and Anders expects to continue to realize savings from these actions in the coming quarters.

To more effectively discuss the comparative results of operations for the six months ended June 30, 2010 and 2009, the following table presents
Anders results on a constant currency basis (i.e. British pounds):

Anders

|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|------------------------------------- |  | ------------------------ | ------ | - | ----------------- | ----- | -- | ------------------- | - | ------ | ----------------- |  | ----- | -- |  | - | ------- | - |  | ----- | --
|                                      |  | Six months endedJune
30, |        |   |                   |       |    |                     |  
|                                      |  | 2010                     |        |   | 2009              |       |    | Increase (Decrease) |  
|(British pounds in thousands)         |  | £                        |        |   | % of TotalRevenue |       |    | £                   |   |        | % of TotalRevenue |  |       | £  |  |   | %       |  
|Revenue                               |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|Staffing services                     |  | £                        | 23,951 |   |                   | 95.3  | %  |                     | £ | 35,215 |                   |  | 97.2  | %  |  | £ | (11,264 | ) |  | (32.0 | )%
|Professional services                 |  |                          | 1,179  |   |                   | 4.7   |    |                     |   | 1,045  |                   |  | 2.8   |    |  |   | 134     |   |  | 12.8  |   
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|                                      |  |                          | 25,130 |   |                   | 100.0 |    |                     |   | 36,260 |                   |  | 100.0 |    |  |   | (11,130 | ) |  | (30.7 | ) 
|Cost of services                      |  |                          | 20,643 |   |                   | 82.2  |    |                     |   | 30,243 |                   |  | 83.5  |    |  |   | (9,600  | ) |  | (31.7 | ) 
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|Gross profit                          |  |                          | 4,487  |   |                   | 17.8  |    |                     |   | 6,017  |                   |  | 16.5  |    |  |   | (1,530  | ) |  | (25.4 | ) 
|Operating and administrative expenses |  |                          | 5,356  |   |                   | 21.3  |    |                     |   | 8,111  |                   |  | 22.3  |    |  |   | (2,755  | ) |  | (34.0 | ) 
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   
|Operating loss                        |  | £                        | (869   | ) |                   | (3.5  | )% |                     | £ | (2,094 | )                 |  | (5.8  | )% |  | £ | 1,225   |   |  | (58.5 | )%
|                                      |  |                          |        |   |                   |       |    |                     |   |        |                   |  |       |    |  |   |         |   |  |       |   



29



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##### Table of Contents

Anders staffing services revenue decreased during the first six months of 2010 as compared to the
first six months of 2009 primarily due to weak demand in the UK construction industry, which resulted in decreases in staffing demand. The increase in professional services revenue was primarily due to growth in the Australian natural resources
market for permanent placement services.

Anders gross profit pounds decreased during the first six months of 2010 as compared to the
first six months of 2009 primarily due to the decline in revenue. Gross profit margin increased during the first six months of 2010 as compared to the first six months of 2009 primarily due to a change in mix as higher-margin professional services
revenue was a larger portion of total revenue than in the prior year.

Anders operating and administrative expenses decreased during the
first six months of 2010 as compared to the first six months of 2009 primarily due to decreases in salaries and variable compensation related to cost reduction measures taken throughout 2009 and early 2010. These cost reduction measures, such as
decreases in headcount and office downsizing, included structural changes and operational alignment with lower business volumes.

Anders
operating loss decreased during the first six months of 2010 as compared to first six months of 2009 due to the decrease in operating and administrative expenses exceeding the smaller reduction in gross profit. The cost reduction activities taken
throughout 2009 and early 2010 have provided the savings in the first six months of 2010 and Anders expects to continue to realize savings from these actions in the coming quarters.

ITS

Business Strategy

ITS provides a variety of information technology related services to its customers. These service offerings include staffing, consulting
and outsourcing. These service offerings require recruiting and retaining IT talent for contract and permanent IT positions, industry expertise and the ability to determine appropriate solutions for IT needs. ITSs customers are primarily large
and mid-sized companies with high volume IT requirements and/or the need to augment their own staff on a flexible basis.

The success of
ITSs staffing services is dependent upon maintaining and increasing penetration of its existing customer base, its ability to win new contract awards and the availability and cost of its skilled labor pool. The market demand for ITSs
services is also heavily dependent upon the pace of technology change and the changes in business requirements and practices of its customers. The IT services industry is highly competitive and is subject to strong pricing pressures from customers
and competition.

While staffing continues to be a core offering, ITS is focusing its efforts on providing higher value IT outsourcing and
consulting services through the development of expertise in three technology areas: quality assurance and testing, application development and maintenance and service desk management. This effort to shift the emphasis towards higher value IT
services is consistent with CDIs core business strategy. ITS also seeks to differentiate itself from the competition and optimize the customers infrastructure, all while targeting improvements in overall customer IT efficiencies and
improved service levels.

Key Performance Indicators

ITS assesses its performance by monitoring a number of key performance indicators, which include revenue, revenue per day, revenue and gross margin per
sales person, gross profit dollars, gross profit margin, recruiter cost per hire, operating profit, operating profit margin and return on net assets.

Changes in revenue and revenue per day reflect performance on both new and existing contracts and accounts. The ITS model is such that changes in revenue
may not result in proportionate changes in operating and administrative costs, thus impacting profitability. Revenue per sales person is an indicator of the productivity of ITSs sales personnel. Market demand for ITSs services is heavily
dependent upon the pace of technology change and the changes in business requirements and practices of its customers.

Gross profit dollars
and gross profit margin reflect ITSs ability to realize pricing consistent with value provided, to incorporate changes in market demand and to control and pass through direct costs. It is also an indication of ITSs ability to shift the
mix of business to higher-margin service offerings. Gross margin per sales person is an indicator of both the productivity of ITSs sales personnel and the value of the services provided to clients.

Operating profit is gross profit less operating and administrative expenses. Operating profit margin reflects the Companys ability to adjust
overhead costs to changing business volumes. Recruiter cost per hire reflects the productivity of ITSs recruiters.

Return on net assets
(RONA) reflects ITSs ability to generate earnings while optimizing assets deployed in the business. A key driver of RONA is ITSs ability to manage its accounts receivable, its largest asset.



30



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##### Table of Contents

Results of Operations

The following table presents changes in revenue by service type, cost of services, gross profit, operating and administrative expenses and operating
profit for ITS for the three months ended June 30, 2010 and 2009:

ITS



|                                      |  |                            |  |                   |      |  |            |                     |                   |   |  |             |  |      |  
|------------------------------------- |  | -------------------------- |  | ----------------- | ---- |  | ---------- | ------------------- | ----------------- | - |  | ----------- |  | ---- | -
|                                      |  | Three months endedJune 30, |  |                   |      |  |            |                    
|                                      |  | 2010                       |  |                   | 2009 |  |            | Increase (Decrease) |                  
|(in thousands)                        |  | $                          |  | % of TotalRevenue |      |  | $          |                     | % of TotalRevenue |   |  | $           |  | %    |  
|Revenue                               |  |                            |  |                   |      |  |            |                     |                   |   |  |             |  |      |  
|Staffing services                     |  | $  68,823                  |  | 89.6              | %    |  | $  51,733  |                     | 88.9              | % |  | $  17,090   |  | 33.0 | %
|Project outsourcing services          |  | 7,804                      |  | 10.2              |      |  | 6,418      |                     | 11.0              |   |  | 1,386       |  | 21.6 |  
|Professional services                 |  | 120                        |  | 0.2               |      |  | 69         |                     | 0.1               |   |  | 51          |  | 73.9 |  
|                                      |  |                            |  |                   |      |  |            |                     |                   |   |  |             |  |      |  
|                                      |  | 76,747                     |  | 100.0             |      |  | 58,220     |                     | 100.0             |   |  | 18,527      |  | 31.8 |  
|Cost of services                      |  | 63,578                     |  | 82.8              |      |  | 47,658     |                     | 81.9              |   |  | 15,920      |  | 33.4 |  
|                                      |  |                            |  |                   |      |  |            |                     |                   |   |  |             |  |      |  
|Gross profit                          |  | 13,169                     |  | 17.2              |      |  | 10,562     |                     | 18.1              |   |  | 2,607       |  | 24.7 |  
|Operating and administrative expenses |  | 10,303                     |  | 13.5              |      |  | 8,683      |                     | 14.9              |   |  | 1,620       |  | 18.7 |  
|                                      |  |                            |  |                   |      |  |            |                     |                   |   |  |             |  |      |  
|Operating profit                      |  | $    2,866                 |  | 3.7               | %    |  | $    1,879 |                     | 3.2               | % |  | $       987 |  | 52.5 | %
|                                      |  |                            |  |                   |      |  |            |                     |                   |   |  |             |  |      |  

ITSs revenue increased for the second quarter of 2010 as compared to the second quarter of 2009 due to
increases in staffing services, primarily due to account expansions with existing customers, reflecting the Companys investment and improved productivity in sales and recruiting resources, as well as by business development efforts across most
retail and national accounts. ITS revenue also increased due to increases in project outsourcing related to several account expansions and professional services revenue, reflecting higher permanent placement opportunities.

ITSs gross profit dollars increased during the second quarter of 2010 as compared to the second quarter of 2009, primarily due to increases in
revenue. ITSs gross profit margin was lower due to increased business volumes with a lower-margin staffing customer and pricing discounts associated with higher business volumes, as well as the mix of business, with lower-margin staffing
increasing as a portion of total revenue.

ITSs operating and administrative expenses increased during the second quarter of 2010 as
compared to the second quarter of 2009 primarily due to increased sales, recruiting and commission costs related to expansions in business volumes, partially offset by cost reduction measures taken throughout 2009. The second quarter of 2009
included $0.1 million of severance costs.

ITSs operating profit increased during the second quarter of 2010 as compared to the second
quarter of 2009 primarily due to increased business volumes.



31



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##### Table of Contents

The following table presents changes in revenue by service type, cost of services, gross profit, operating
and administrative expenses and operating profit for ITS for the six months ended June 30, 2010 and 2009:

ITS



|                                      |  |                          |  |                   |      |  |              |                     |                   |   |  |            |  |      |  
|------------------------------------- |  | ------------------------ |  | ----------------- | ---- |  | ------------ | ------------------- | ----------------- | - |  | ---------- |  | ---- | -
|                                      |  | Six months endedJune
30, |  |                   |      |  |              |                    
|                                      |  | 2010                     |  |                   | 2009 |  |              | Increase (Decrease) |                  
|(in thousands)                        |  | $                        |  | % of TotalRevenue |      |  | $            |                     | % of TotalRevenue |   |  | $          |  | %    |  
|Revenue                               |  |                          |  |                   |      |  |              |                     |                   |   |  |            |  |      |  
|Staffing services                     |  | $  125,645               |  | 89.1              | %    |  | $  102,861   |                     | 88.9              | % |  | $  22,784  |  | 22.2 | %
|Project outsourcing services          |  | 15,113                   |  | 10.7              |      |  | 12,626       |                     | 10.9              |   |  | 2,487      |  | 19.7 |  
|Professional services                 |  | 311                      |  | 0.2               |      |  | 175          |                     | 0.2               |   |  | 136        |  | 77.7 |  
|                                      |  |                          |  |                   |      |  |              |                     |                   |   |  |            |  |      |  
|                                      |  | 141,069                  |  | 100.0             |      |  | 115,662      |                     | 100.0             |   |  | 25,407     |  | 22.0 |  
|Cost of services                      |  | 116,791                  |  | 82.8              |      |  | 94,794       |                     | 82.0              |   |  | 21,997     |  | 23.2 |  
|                                      |  |                          |  |                   |      |  |              |                     |                   |   |  |            |  |      |  
|Gross profit                          |  | 24,278                   |  | 17.2              |      |  | 20,868       |                     | 18.0              |   |  | 3,410      |  | 16.3 |  
|Operating and administrative expenses |  | 19,616                   |  | 13.9              |      |  | 17,761       |                     | 15.3              |   |  | 1,855      |  | 10.4 |  
|                                      |  |                          |  |                   |      |  |              |                     |                   |   |  |            |  |      |  
|Operating profit                      |  | $      4,662             |  | 3.3               | %    |  | $      3,107 |                     | 2.7               | % |  | $    1,555 |  | 50.0 | %
|                                      |  |                          |  |                   |      |  |              |                     |                   |   |  |            |  |      |  

ITSs revenue increased for the first six months of 2010 as compared to the first six months of 2009
primarily due to increases in staffing services, primarily due to account expansions with existing customers, reflecting the Companys investment and improved productivity in sales and recruiting resources, as well as by business development
efforts across most retail and national accounts. ITS revenue also increased due to increases in project outsourcing related to several account expansions and professional services revenue, reflecting higher permanent placement opportunities.

ITSs gross profit dollars increased during the first six months of 2010 as compared to the first six months of 2009, primarily due to
increases in revenue. ITSs gross profit margin was lower due to increased business volumes with a lower-margin staffing customer and pricing discounts associated with higher business volumes.

ITSs operating and administrative expenses increased during the first six months of 2010 as compared to the first six months of 2009 primarily due
to increased sales, recruiting and commission costs related to expansions in business volumes, partially offset by cost reduction measures taken throughout 2009. The first six months of 2009 included $0.3 million of severance costs.

ITSs operating profit increased during the first six months of 2010 as compared to the first six months of 2009 primarily due to increased business
volumes.

Corporate

Corporate expenses totaled $3.7 million in the second quarter of 2010 and 2009. Corporate expenses totaled $7.7 million in the first six months of 2010 as
compared to $8.1 million in the first six months of 2009. The decrease of $0.4 million was principally the result of cost reduction measures taken by the Company throughout 2009.

Liquidity and Capital Resources

The
following table summarizes the net cash provided by (used in) for the major captions from the Companys consolidated statements of cash flows:



|                     |  |                          |         |   |      |   |        |  
|-------------------- |  | ------------------------ | ------- | - | ---- | - | ------ | -
|                     |  | Six months endedJune
30, |        
|(in thousands)       |  | 2010                     |         |   | 2009 |  
|Operating Activities |  | $                        | (2,357  | ) |      | $ | 19,757 |  
|Investing Activities |  |                          | (37,100 | ) |      |   | (3,672 | )
|Financing Activities |  |                          | (6,495  | ) |      |   | (3,013 | )

Operating Activities

During the first six months of 2010, net cash used by operating activities was $2.4 million, despite net income of $2.4 million. The negative cash flow
reflects higher working capital requirements, primarily due to increases in accounts receivable, reflecting growth in select large national accounts whose contract provisions include longer payment terms, partially offset by increases in accounts
payable and accrued expenses and other current liabilities.



32



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##### Table of Contents

Operating cash flow was lower than the prior year by $22.1 million, primarily due to higher working capital
requirements of $26.1 million in the first six months of 2010, reflecting increases in accounts receivable, partially offset by an improvement in earnings of $3.3 million and increases in accounts payable and accrued expenses and other current
liabilities.

Investing Activities

Net cash used in investing activities of $37.1 million increased by $33.4 million during the first six months of 2010, as compared to the same period in
2009. On June 28, 2010, the Company purchased substantially all of the assets and certain liabilities of L.R. Kimball, an architecture and engineering services company, for $34.0 million, which is subject to earnout and working capital
adjustments. Other investing activities consisted primarily of purchases of fixed assets. During 2010, capital expenditures totaled $2.9 million, as compared to $3.9 million in 2009. The decrease in capital spending was primarily due to the absence
of computer software and hardware investments for an ITS project outsourcing customer contract in 2009. In 2009, capital expenditures also related to implementation of a financial system upgrade and software purchases in the Aerospace vertical of
ES. Capital spending in 2010 related primarily to computer hardware and software purchases in the Aerospace vertical of ES and the Companys shared service center. In 2010, the Company also reacquired $0.3 million of certain franchise rights in
its MRI reporting segment.

Financing Activities

Net cash used in financing activities of $6.5 million increased by $3.5 million during the first six months of 2010, as compared to the same period in
2009. The increase in cash used was due to a decrease in cash overdraft accounts. The Company paid shareholders dividends totaling $5.0 million and $4.9 million in 2010 and 2009, respectively. The declaration and payment of future dividends will be
at the discretion of the Companys Board of Directors and will depend upon many factors including the Companys earnings, financial condition and capital requirements. The Company did not repurchase any shares of its common stock under the
repurchase program in 2010 or 2009. As of June 30, 2010, there remained an outstanding authorization to repurchase approximately $20.0 million of outstanding common stock.

Summary

The Companys business
model is expected to generate positive cash flow over the business cycle. However, changes in level of business activity, and to a lesser extent, seasonality, do impact working capital needs and cash flow. In addition, the uncertain global economy
could continue to cause delays in customer payments which could lead to a slower collections process, causing a temporary decline in operating cash flow. While there is no assurance, management believes that the Companys current cash balances
and funds generated from operations will be sufficient to support currently anticipated Company growth and ongoing capital needs.

Critical
Accounting Policies and Estimates

The Companys consolidated interim financial statements were prepared in accordance with generally
accepted accounting principles, which require management to make subjective decisions, assessments and estimates about the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting judgment increases, such
judgments become even more subjective. While management believes its assumptions are reasonable and appropriate, actual results may be materially different than estimated. The critical accounting estimates and assumptions identified in the
Companys 2009 Annual Report on Form 10-K filed on March 2, 2010 with the Securities and Exchange Commission have not materially changed.



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

The Company is exposed to risks associated with foreign currency fluctuations and changes in interest rates. The Companys exposure to foreign
currency fluctuations relates primarily to its operations denominated in British pounds sterling and Canadian dollars. Exchange rate fluctuations impact the US dollar value of reported earnings derived from these foreign operations, as well as the
Companys investment in the net assets related to these operations. The Company sometimes engages in hedging activities with respect to certain of its foreign operations.

During the first quarter of 2009, the Company entered into zero cost collar option contracts (options) to hedge portions of its British
pounds sterling and Canadian dollar currency forecasted earnings. The options were for various amounts in local currency on a quarterly basis and had a range of foreign exchange rates, which provided a hedge against foreign results translated at
rates outside the range. These options did not have a premium and expired respectively at the end of the first, second and third quarters in 2009. These instruments were accounted for at fair value. Because the Company could not designate these
options as hedges for accounting purposes, foreign exchange revaluation gains or losses were reflected in current earnings, while the impact of translating the foreign based income into US dollars was recognized throughout the year. (See Note 4
 Derivative Instruments for additional information in the notes to the consolidated financial statements.) For the six months ended June 30, 2009, the Company recorded a net loss of $64



33



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##### Table of Contents

thousand related to these options, consisting of a realized loss of $46 thousand and an unrealized loss of $18 thousand. The net gains were recorded in other income (expense), net in the
consolidated statements of operations. The Company did not enter into any option contracts in 2010.

The Companys cash balances are
primarily invested in money market investments primarily at variable rates. Due to the Companys cash balance, interest rate fluctuations will affect the Companys return on its investments.



|Item 4. | Controls and Procedures
|------- | -----------------------

Evaluation
of disclosure controls and procedures

The management of the Company, under the supervision and with the participation of the
Companys Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Companys disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act
of 1934, as amended (the Exchange Act)) as of June 30, 2010. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures were
effective as of that date to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported as specified in Securities
and Exchange Commission rules and forms and that such information is accumulated and communicated to the Companys management, including the Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There were no changes in the Companys internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f)
under the Exchange Act) during the Companys second quarter ended June 30, 2010, that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.



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##### Table of Contents

PART II. OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

The Company has
litigation and other claims pending which have arisen in the ordinary course of business. Except as described below, management believes there are substantive defenses and/or insurance and specific accounting reserves established such that the
outcome of these pending matters should not have a material adverse effect on the business, financial condition or results of operations of the Company.

UK Office of Fair Trading Decision

On
September 30, 2009 the United Kingdoms Office of Fair Trading (OFT) issued a decision in its investigation into alleged anti-competitive behavior by Anders. The OFT had been investigating alleged violations of the UK
Competition Act of 1998 by Anders and a number of its competitors in the UK construction recruitment industry during the time period of late 2004 to early 2006. The Company fully cooperated with the OFT in its investigation under the OFTs
leniency program.

In its decision, the OFT stated that it made a finding that Anders did violate the UK Competition Act of 1998 and imposed a
fine of $12.3 million for the violations, which is non-tax deductible. The Company recorded a charge for the full amount of the fine in the third quarter of 2009. The Company is appealing the OFT decision. No payment has been made pending the
outcome of the appeal and the reserve is included in Other accrued expenses and other current liabilities in the consolidated balance sheets at December 31, 2009 and June 30, 2010.

Investigation by the US Department of Justice

In August 2009, the Civil Division of the US Department of Justice (DOJ) notified the Company of potential claims against it under the US
False Claims Act. The claims stem from alleged mischarging of time on certain federal government projects. The Company, with assistance from outside legal counsel, conducted a review of these allegations and cooperated with the DOJ in its
investigation. The Company established a reserve of $4.3 million for this matter at December 31, 2009.

In June 2010, the Company
and the DOJ reached an agreement in principle on the financial terms of a settlement regarding this matter. Other terms remain to be negotiated and there is no certainty and the Company can give no assurance that a final agreement will be
reached. At June 30, 2010, based upon this agreement in principle with the DOJ, the Company estimates the loss related to this matter, including the relators individual claims and the relators attorneys cost, to be $2.4
million. This reserve, which is only partially tax deductible, is included in Other accrued expenses and other current liabilities in the consolidated balance sheet at December 31, 2009 and June 30, 2010. Based upon the
reduction in the reserve, the consolidated statements of operations for the three and six months ended June 30, 2010 include a benefit of $1.9 million recognized in Operating and administrative expenses.



|Item 1A. | Risk Factors
|-------- | ------------

There have been no material
changes from the risk factors disclosed in the Risk Factors section (Part I, Item 1A) of the Companys Annual Report on Form 10-K for the year ended December 31, 2009.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

Share Repurchase Program

The
Companys Board of Directors authorized on February 26, 2008 and the Company announced on February 28, 2008, the repurchase of up to $50 million of the Companys outstanding common stock. Repurchases have been and may be made
from time to time beginning March 4, 2008 depending upon the Companys share price and other relevant factors. Repurchases may be made in the open market or through privately negotiated transactions. The Company is not required to
repurchase any specific number of shares, and the Company may terminate the repurchase program at any time. During the three and six months ended June 30, 2010, the Company did not repurchase any common stock. As of June 30, 2010, there
remained an outstanding authorization to repurchase approximately $20.0 million of outstanding common stock.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Removed and Reserved
|------- | --------------------



|Item 5. | Other Information
|------- | -----------------

None.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | 
|31.1 |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                            
|     | 
|31.2 |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                            
|     | 
|32   |  | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.



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##### Table of Contents

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.



|                     |  |  |  |           |  |                       |  |                             
|-------------------- |  |  |  | --------- |  | --------------------- |  | ----------------------------
|                     |  |  |  | CDI Corp.
|                     |  |  | 
|Date: August 6, 2010 |  |  |  | By:       |  | /s/ Mark A. Kerschner
|                     |  |  |  |           |  |                       |  | Mark A. Kerschner           
|                     |  |  |  |           |  |                       |  | Executive Vice President and
|                     |  |  |  |           |  |                       |  | Chief Financial Officer     



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##### Table of Contents

INDEX TO EXHIBITS



|       |  |                                                                                                                                                                                
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                        
|       | 
|31.1   |  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                            
|       | 
|31.2   |  | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                            
|       | 
|32     |  | Certification of Chief Executive Officer and Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.



38