##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549



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FORM 10-Q



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

For the quarterly period ended September 30, 2007

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



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CDI Corp.

(Exact name of Registrant as specified in its charter)



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

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

(Address of principal executive offices)

Registrants telephone number, including area code: (215) 569-2200



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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 is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

Large accelerated filer ̈Accelerated filer  x  Non-accelerated filer ̈

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).    Yes ̈No  x

Outstanding shares of each of the Registrants classes of common stock as of October 31, 2007 were:



|                                     |  |                  
|------------------------------------ |  | -----------------
|Common stock, $.10 par value         |  | 20,330,371 shares
|Class B common stock, $.10 par value |  | None             



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##### Table of Contents

CDI CORP.

Table of Contents



|                              |  |          |  |                                                                                                                         |  |   
|----------------------------- |  | -------- |  | ----------------------------------------------------------------------------------------------------------------------- |  | --
|Part I: FINANCIAL INFORMATION |  |         
|                              |  |          | 
|                              |  | Item 1.  |  | Financial Statements                                                                                                    |  |   
|                              |  |          | 
|                              |  |          |  | Consolidated Balance Sheets as of September 30, 2007 and December 31, 2006                                              |  | 2 
|                              |  |          | 
|                              |  |          |  | Consolidated Statements of Earnings for the three- and nine-month periods ended September 30, 2007 and 2006             |  | 4 
|                              |  |          | 
|                              |  |          |  | Consolidated Statements of Shareholders Equity for the three- and nine-month periods ended September 30, 2007 and 2006 |  | 5 
|                              |  |          | 
|                              |  |          |  | Consolidated Statements of Cash Flows for the nine-month periods ended September 30, 2007 and 2006                      |  | 6 
|                              |  |          | 
|                              |  |          |  | Notes to Consolidated Financial Statements                                                                              |  | 7 
|                              |  |          | 
|                              |  | 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                                                                                                 |  | 33
|                              | 
|Part II: OTHER INFORMATION    |  |         
|                              |  |          | 
|                              |  | Item 1.  |  | Legal Proceedings                                                                                                       |  | 33
|                              |  |          | 
|                              |  | Item 1A. |  | Risk Factors                                                                                                            |  | 34
|                              |  |          | 
|                              |  | Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                             |  | 34
|                              |  |          | 
|                              |  | Item 3.  |  | Defaults Upon Senior Securities                                                                                         |  | 34
|                              |  |          | 
|                              |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                     |  | 34
|                              |  |          | 
|                              |  | Item 5.  |  | Other Information                                                                                                       |  | 34
|                              |  |          | 
|                              |  | Item 6.  |  | Exhibits                                                                                                                |  | 34
|                              | 
|SIGNATURE                     |  | 35      
|                              | 
|INDEX TO EXHIBITS             |  | 36      



1



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##### Table of Contents

PART 1. FINANCIAL INFORMATION



|Item 1. | FINANCIAL STATEMENTS
|------- | --------------------

CDI Corp. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)



|                                                                                                                     |  |                   |         |                  |   |        
|-------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|                                                                                                                     |  | September 30,2007 |         | December 31,2006
|                                                                                                                     |  | (Unaudited)       |         |                 
|Assets                                                                                                               |  |                   |         |                  |   |        
|Current assets:                                                                                                      |  |                   |         |                  |   |        
|Cash and cash equivalents                                                                                            |  | $                 | 113,582 |                  | $ | 33,551 
|Accounts receivable, less allowance for doubtful accounts of $3,068 - September 30, 2007; $3,294 - December 31, 2006 |  |                   | 232,283 |                  |   | 224,334
|Prepaid expenses and other assets                                                                                    |  |                   | 5,555   |                  |   | 7,159  
|Deferred income taxes                                                                                                |  |                   | 4,893   |                  |   | 5,834  
|Current assets of discontinued operations (Note 6)                                                                   |  |                   |        |                  |   | 19,805 
|                                                                                                                     |  |                   |         |                  |   |        
|Total current assets                                                                                                 |  |                   | 356,313 |                  |   | 290,683
|                                                                                                                     |  |                  
|Property and equipment, net                                                                                          |  |                   | 35,110  |                  |   | 37,240 
|Deferred income taxes                                                                                                |  |                   | 9,582   |                  |   | 2,412  
|Goodwill                                                                                                             |  |                   | 51,520  |                  |   | 50,685 
|Other assets                                                                                                         |  |                   | 7,252   |                  |   | 5,610  
|Non-current assets of discontinued operations (Note 6)                                                               |  |                   |        |                  |   | 26,489 
|                                                                                                                     |  |                   |         |                  |   |        
|Total assets                                                                                                         |  | $                 | 459,777 |                  | $ | 413,119
|                                                                                                                     |  |                   |         |                  |   |        

See accompanying notes to consolidated financial statements.



2



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##### Table of Contents

CDI Corp. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share data)



|                                                                                                                                                   |  |                   |         |   |                  |   |         |  
|-------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---------------- | - | ------- | -
|                                                                                                                                                   |  | September 30,2007 |         |   | December 31,2006 |  
|                                                                                                                                                   |  | (Unaudited)       |         |   |                  |  
|Liabilities and Shareholders Equity                                                                                                               |  |                   |         |   |                  |   |         |  
|Current liabilities:                                                                                                                               |  |                   |         |   |                  |   |         |  
|Cash overdraft                                                                                                                                     |  | $                 | 2,514   |   |                  | $ | 2,508   |  
|Accounts payable                                                                                                                                   |  |                   | 30,313  |   |                  |   | 33,930  |  
|Withheld payroll taxes                                                                                                                             |  |                   | 2,626   |   |                  |   | 2,313   |  
|Accrued compensation and related expenses                                                                                                          |  |                   | 57,800  |   |                  |   | 40,446  |  
|Other accrued expenses and other liabilities                                                                                                       |  |                   | 18,964  |   |                  |   | 17,908  |  
|Income taxes payable                                                                                                                               |  |                   | 4,750   |   |                  |   | 2,259   |  
|Current liabilities of discontinued operations (Note 6)                                                                                            |  |                   |        |   |                  |   | 5,540   |  
|                                                                                                                                                   |  |                   |         |   |                  |   |         |  
|Total current liabilities                                                                                                                          |  |                   | 116,967 |   |                  |   | 104,904 |  
|                                                                                                                                                   |  |                  
|Deferred compensation and other non-current liabilities                                                                                            |  |                   | 12,841  |   |                  |   | 8,883   |  
|                                                                                                                                                   |  |                   |         |   |                  |   |         |  
|Total liabilities                                                                                                                                  |  |                   | 129,808 |   |                  |   | 113,787 |  
|                                                                                                                                                   |  |                   |         |   |                  |   |         |  
|                                                                                                                                                   |  |                  
|Commitments and Contingencies (Note 10)                                                                                                            |  |                   |         |   |                  |   |         |  
|                                                                                                                                                   |  |                  
|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 21,291,832 shares - September 30, 2007; 20,975,230 shares - December 31,
2006 |  |                   | 2,129   |   |                  |   | 2,098   |  
|Class B common stock, $.10 par value - authorized 3,174,891 shares; none issued                                                                    |  |                   |        |   |                  |   |        |  
|Additional paid-in-capital                                                                                                                         |  |                   | 50,133  |   |                  |   | 41,443  |  
|Retained earnings                                                                                                                                  |  |                   | 284,741 |   |                  |   | 265,015 |  
|Accumulated other comprehensive income                                                                                                             |  |                   | 15,350  |   |                  |   | 13,160  |  
|Less common stock in treasury, at cost - 966,706 shares                                                                                            |  |                   | (22,384 | ) |                  |   | (22,384 | )
|                                                                                                                                                   |  |                   |         |   |                  |   |         |  
|Total shareholders equity                                                                                                                         |  |                   | 329,969 |   |                  |   | 299,332 |  
|                                                                                                                                                   |  |                   |         |   |                  |   |         |  
|Total liabilities and shareholders equity                                                                                                         |  | $                 | 459,777 |   |                  | $ | 413,119 |  
|                                                                                                                                                   |  |                   |         |   |                  |   |         |  

See accompanying notes to consolidated financial statements.



3



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##### Table of Contents

CDI Corp. and Subsidiaries

Consolidated Statements of Earnings

(Unaudited)

(in thousands, except
share data)



|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|---------------------------------------------------------- |  | ------------------------------- | ------- | ---- | ------------------------------ | ------- | ---- |  | ---- | ------- |  | - | ------- | -
|                                                           |  | Three months endedSeptember 30, |         |      | Nine months endedSeptember 30, |        
|                                                           |  | 2007                            |         | 2006 |                                |         | 2007 |  | 2006 |        
|Revenue                                                    |  | $                               | 298,708 |      | $                              | 285,905 |      |  | $    | 888,339 |  | $ | 828,469 |  
|Cost of services                                           |  |                                 | 226,315 |      |                                | 219,676 |      |  |      | 676,106 |  |   | 638,064 |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Gross profit                                               |  |                                 | 72,393  |      |                                | 66,229  |      |  |      | 212,233 |  |   | 190,405 |  
|                                                           |  |                                 |         |     
|Operating and administrative expenses                      |  |                                 | 60,825  |      |                                | 56,473  |      |  |      | 177,091 |  |   | 166,655 |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Operating profit                                           |  |                                 | 11,568  |      |                                | 9,756   |      |  |      | 35,142  |  |   | 23,750  |  
|Interest income and other (expense), net                   |  |                                 | 508     |      |                                | (42     | )    |  |      | 1,207   |  |   | (576    | )
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Earnings before income taxes from continuing operations    |  |                                 | 12,076  |      |                                | 9,714   |      |  |      | 36,349  |  |   | 23,174  |  
|Income tax expense                                         |  |                                 | 4,109   |      |                                | 4,024   |      |  |      | 12,692  |  |   | 8,452   |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Earnings from continuing operations                        |  |                                 | 7,967   |      |                                | 5,690   |      |  |      | 23,657  |  |   | 14,722  |  
|Earnings from discontinued operations, net of tax (Note 6) |  |                                 | 1,622   |      |                                | 412     |      |  |      | 2,729   |  |   | 1,740   |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Net earnings                                               |  | $                               | 9,589   |      | $                              | 6,102   |      |  | $    | 26,386  |  | $ | 16,462  |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|                                                           |  |                                 |         |     
|Basic earnings per share:                                  |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Continuing operations                                      |  | $                               | 0.39    |      | $                              | 0.28    |      |  | $    | 1.17    |  | $ | 0.74    |  
|Discontinued operations                                    |  |                                 | 0.08    |      |                                | 0.02    |      |  |      | 0.14    |  |   | 0.09    |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Net earnings                                               |  | $                               | 0.47    |      | $                              | 0.30    |      |  | $    | 1.31    |  | $ | 0.83    |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|                                                           |  |                                 |         |     
|Diluted earnings per share:                                |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Continuing operations                                      |  | $                               | 0.39    |      | $                              | 0.28    |      |  | $    | 1.17    |  | $ | 0.73    |  
|Discontinued operations                                    |  |                                 | 0.08    |      |                                | 0.02    |      |  |      | 0.13    |  |   | 0.09    |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  
|Net earnings                                               |  | $                               | 0.47    |      | $                              | 0.30    |      |  | $    | 1.30    |  | $ | 0.82    |  
|                                                           |  |                                 |         |      |                                |         |      |  |      |         |  |   |         |  

See accompanying notes to consolidated financial statements.



4



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##### Table of Contents

CDI Corp. and Subsidiaries

Consolidated Statements of Shareholders Equity

(Unaudited)

(in thousands, except
share data)



|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                                                                                                                              |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |  
|                                                                                                                              |  | 2007                            |         |   | 2006                           |   |         | 2007 |  |   | 2006    |  
|Common stock                                                                                                                  |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                                                                           |  | $                               | 2,127   |   |                                | $ | 2,096   |      |  | $ | 2,098   |   |  | $ | 2,079   |  
|Exercise of stock options                                                                                                     |  |                                 | 1       |   |                                |   | 1       |      |  |   | 29      |   |  |   | 13      |  
|Stock purchase plan                                                                                                           |  |                                 | 1       |   |                                |   |        |      |  |   | 2       |   |  |   | 5       |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                                                                                 |  | $                               | 2,129   |   |                                | $ | 2,097   |      |  | $ | 2,129   |   |  | $ | 2,097   |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                                                                                                                              |  |                                 |         |  
|Additional paid-in-capital                                                                                                    |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                                                                           |  | $                               | 49,155  |   |                                | $ | 40,168  |      |  | $ | 41,443  |   |  | $ | 35,459  |  
|Reclassification from unamortized value of restricted stock                                                                   |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   | (32     | )
|Exercise of stock options                                                                                                     |  |                                 | 189     |   |                                |   | 236     |      |  |   | 5,517   |   |  |   | 2,579   |  
|Stock-based compensation                                                                                                      |  |                                 | 757     |   |                                |   | 480     |      |  |   | 2,135   |   |  |   | 2,573   |  
|Tax benefit from stock plans                                                                                                  |  |                                 | 32      |   |                                |   | 141     |      |  |   | 1,038   |   |  |   | 446     |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                                                                                 |  | $                               | 50,133  |   |                                | $ | 41,025  |      |  | $ | 50,133  |   |  | $ | 41,025  |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                                                                                                                              |  |                                 |         |  
|Retained earnings                                                                                                             |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                                                                           |  | $                               | 277,380 |   |                                | $ | 256,514 |      |  | $ | 265,015 |   |  | $ | 250,534 |  
|Net earnings                                                                                                                  |  |                                 | 9,589   |   |                                |   | 6,102   |      |  |   | 26,386  |   |  |   | 16,462  |  
|Dividends paid to shareholders                                                                                                |  |                                 | (2,228  | ) |                                |   | (2,202  | )    |  |   | (6,660  | ) |  |   | (6,582  | )
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                                                                                 |  | $                               | 284,741 |   |                                | $ | 260,414 |      |  | $ | 284,741 |   |  | $ | 260,414 |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                                                                                                                              |  |                                 |         |  
|Accumulated other comprehensive income                                                                                        |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                                                                           |  | $                               | 15,875  |   |                                | $ | 9,279   |      |  | $ | 13,160  |   |  | $ | 5,822   |  
|Reclassification adjustment for foreign currency translation gain included in net income (relates to discontinued operations) |  |                                 | (2,506  | ) |                                |   |        |      |  |   | (2,506  | ) |  |   |        |  
|Foreign currency translation adjustment                                                                                       |  |                                 | 1,981   |   |                                |   | 2,935   |      |  |   | 4,696   |   |  |   | 6,392   |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                                                                                 |  | $                               | 15,350  |   |                                | $ | 12,214  |      |  | $ | 15,350  |   |  | $ | 12,214  |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                                                                                                                              |  |                                 |         |  
|Unamortized value of restricted stock issued                                                                                  |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Beginning of period                                                                                                           |  | $                               |        |   |                                | $ |        |      |  | $ |        |   |  | $ | (32     | )
|Reclassification to additional paid in capital                                                                                |  |                                 |        |   |                                |   |        |      |  |   |        |   |  |   | 32      |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|End of period                                                                                                                 |  | $                               |        |   |                                | $ |        |      |  | $ |        |   |  | $ |        |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                                                                                                                              |  |                                 |         |  
|Treasury stock                                                                                                                |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Beginning and end of period                                                                                                   |  | $                               | (22,384 | ) |                                | $ | (22,384 | )    |  | $ | (22,384 | ) |  | $ | (22,384 | )
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                                                                                                                              |  |                                 |         |  
|Comprehensive income                                                                                                          |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Net earnings                                                                                                                  |  | $                               | 9,589   |   |                                | $ | 6,102   |      |  | $ | 26,386  |   |  | $ | 16,462  |  
|Reclassification adjustment for foreign currency translation gain included in net income (relates to discontinued operations) |  |                                 | (2,506  | ) |                                |   |        |      |  |   | (2,506  | ) |  |   |        |  
|Foreign currency translation adjustment                                                                                       |  |                                 | 1,981   |   |                                |   | 2,935   |      |  |   | 4,696   |   |  |   | 6,392   |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|Total                                                                                                                         |  | $                               | 9,064   |   |                                | $ | 9,037   |      |  | $ | 28,576  |   |  | $ | 22,854  |  
|                                                                                                                              |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  

See accompanying notes to consolidated financial statements.



5



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##### Table of Contents

CDI Corp. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands, except
share data)



|                                                                                |  |                                |         |   |      |   |         |  
|------------------------------------------------------------------------------- |  | ------------------------------ | ------- | - | ---- | - | ------- | -
|                                                                                |  | Nine months endedSeptember 30, |        
|                                                                                |  | 2007                           |         |   | 2006 |  
|Operating activities from continuing operations:                                |  |                                |         |   |      |   |         |  
|Net earnings                                                                    |  | $                              | 26,386  |   |      | $ | 16,462  |  
|Less: earnings from discontinued operations, net of tax                         |  |                                | (2,729  | ) |      |   | (1,740  | )
|                                                                                |  |                                |         |   |      |   |         |  
|Earnings from continuing operations                                             |  |                                | 23,657  |   |      |   | 14,722  |  
|Adjustments to reconcile net earnings to cash provided by operating activities: |  |                                |         |   |      |   |         |  
|Depreciation and amortization                                                   |  |                                | 8,097   |   |      |   | 7,267   |  
|Deferred income taxes                                                           |  |                                | (6,206  | ) |      |   | 2,304   |  
|Stock-based compensation                                                        |  |                                | 2,366   |   |      |   | 1,585   |  
|Impairment of asset held for sale                                               |  |                                |        |   |      |   | 611     |  
|Changes in operating assets and liabilities:                                    |  |                                |         |   |      |   |         |  
|Accounts receivable, net                                                        |  |                                | (3,930  | ) |      |   | (32,029 | )
|Prepaid expenses                                                                |  |                                | (694    | ) |      |   | (2,623  | )
|Accounts payable                                                                |  |                                | (4,136  | ) |      |   | (13     | )
|Accrued expenses and other current liabilities                                  |  |                                | 14,469  |   |      |   | 18,534  |  
|Income taxes                                                                    |  |                                | 1,908   |   |      |   | (569    | )
|Other assets, non-current liabilities and other                                 |  |                                | 1,252   |   |      |   | (231    | )
|                                                                                |  |                                |         |   |      |   |         |  
|Net cash provided by operating activities                                       |  |                                | 36,783  |   |      |   | 9,558   |  
|                                                                                |  |                                |         |   |      |   |         |  
|                                                                                |  |                               
|Investing activities from continuing operations:                                |  |                                |         |   |      |   |         |  
|Additions to property and equipment                                             |  |                                | (5,844  | ) |      |   | (8,250  | )
|Net proceeds from sale of property (Note 5)                                     |  |                                | 915     |   |      |   |        |  
|Net proceeds from sale of business (Note 6)                                     |  |                                | 39,776  |   |      |   |        |  
|Other                                                                           |  |                                | 148     |   |      |   | 56      |  
|                                                                                |  |                                |         |   |      |   |         |  
|Net cash provided by (used in) investing activities                             |  |                                | 34,995  |   |      |   | (8,194  | )
|                                                                                |  |                                |         |   |      |   |         |  
|                                                                                |  |                               
|Financing activities from continuing operations:                                |  |                                |         |   |      |   |         |  
|Dividends paid to shareholders                                                  |  |                                | (6,660  | ) |      |   | (6,582  | )
|Cash overdraft                                                                  |  |                                | 6       |   |      |   | 804     |  
|Proceeds from exercises of employee stock options                               |  |                                | 5,545   |   |      |   | 2,592   |  
|Tax benefit from equity compensation plans                                      |  |                                | 1,038   |   |      |   | 446     |  
|                                                                                |  |                                |         |   |      |   |         |  
|Net cash used in financing activities                                           |  |                                | (71     | ) |      |   | (2,740  | )
|                                                                                |  |                                |         |   |      |   |         |  
|                                                                                |  |                               
|Discontinued operations:                                                        |  |                                |         |   |      |   |         |  
|Cash provided by operating activities                                           |  |                                | 7,072   |   |      |   | 6,453   |  
|Cash used in investing activities                                               |  |                                | (307    | ) |      |   | (534    | )
|Cash provided by financing activities                                           |  |                                | 92      |   |      |   |        |  
|                                                                                |  |                                |         |   |      |   |         |  
|Net cash provided by discontinued operations                                    |  |                                | 6,857   |   |      |   | 5,919   |  
|                                                                                |  |                                |         |   |      |   |         |  
|                                                                                |  |                               
|Effect of exchange rate changes on cash                                         |  |                                | 1,467   |   |      |   | 932     |  
|                                                                                |  |                                |         |   |      |   |         |  
|Net increase in cash and cash equivalents                                       |  |                                | 80,031  |   |      |   | 5,475   |  
|                                                                                |  |                               
|Cash and cash equivalents at beginning of period                                |  |                                | 33,551  |   |      |   | 13,407  |  
|                                                                                |  |                                |         |   |      |   |         |  
|Cash and cash equivalents at end of period                                      |  | $                              | 113,582 |   |      | $ | 18,882  |  
|                                                                                |  |                                |         |   |      |   |         |  
|                                                                                |  |                               
|Supplemental disclosure of cash flow information:                               |  |                                |         |   |      |   |         |  
|Cash paid for interest                                                          |  | $                              |        |   |      | $ | 80      |  
|Cash paid for income taxes, net                                                 |  |                                | 14,713  |   |      |   | 7,392   |  

See accompanying notes to consolidated financial statements.



6



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements

(Dollars 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, 2006 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, 2006 included in the Companys Annual Report Form 10-K for such period, filed on March 7, 2007. Certain information and footnote disclosures normally included in financial statements prepared in accordance with
generally accepted accounting principles in the United States of America 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 that affect the reported amounts of assets and liabilities, revenue and expenses
and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Results for the three- and nine-months ended September 30, 2007 are not necessarily indicative of results that may be expected for the full
year.



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

In February 2007, the Financial
Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 159, The Fair Value Option for Financial Assets and Financial Liabilities  Including an amendment of FASB Statement
No. 115, which allows companies the option of electing fair value accounting to measure certain financial instruments and other items. SFAS 159 will be effective for the Company as of January 1, 2008. The Company does not expect that the
adoption of SFAS No. 159 will have a material impact on the financial statements of the Company.

Effective January 1, 2007, the Company adopted
the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48), an interpretation of FASB Statement No. 109 (SFAS 109). FIN 48 prescribes a model for the recognition and
measurement of a tax position taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. Implementation of FIN 48 did not result in a cumulative effect
adjustment to retained earnings. On January 1, 2007 and at September 30, 2007, the Company had $1.5 million and $1.7 million, respectively, of unrecognized tax benefits, all of which would affect the effective tax rate if recognized. As
required by FIN 48, at September 30, 2007, the Company has included $1.6 million of the unrecognized tax benefits in Deferred compensation and other non-current liabilities with the balance of $0.1 million in current Income
taxes payable. At December 31, 2006, the entire balance was included in current Income taxes payable. The Companys policy is to recognize interest and penalties related to uncertain tax positions in income tax expense if
warranted. As of September 30, 2007, the Company has approximately $0.4 million of accrued interest and no accrued penalties related to uncertain tax positions. The Company files a consolidated U.S. federal income tax return, along with state
and foreign income tax returns in various jurisdictions as required. The U.S. federal tax return is open for examination back to 2004. State income tax returns are open as far back as 2002. Foreign income tax returns are open as far back as 1998.

In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements. SFAS No. 157 defines fair value, establishes a framework for measuring
fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 will be effective for the Company as of January 1, 2008. The Company does not expect that the adoption of SFAS
No. 157 will have a material impact on the financial statements of the Company.



7



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



|3. | Goodwill
|-- | --------

In accordance with SFAS No. 142,Goodwill and
Other Intangible Assets, the Company performs its annual goodwill impairment testing, by reportable segment, in the third quarter, or more frequently if events or changes in circumstances indicate that goodwill may be impaired. Application of
the goodwill impairment test requires significant judgments, including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for the businesses, the period over which cash flows will
occur, and determination of the Companys weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or conclusions on goodwill impairment for each reporting unit.
The Company conducted its latest annual goodwill impairment test as of July 1, 2007 and identified no impairments.

The following table summarizes the
changes in the Companys carrying value of goodwill by reportable segment from December 31, 2006 to September 30, 2007:



|                      |  |                            |        |                        |   |                             |  |   |       
|--------------------- |  | -------------------------- | ------ | ---------------------- | - | --------------------------- |  | - | ------
|                      |  | Balance atDecember 31,2006 |        | TranslationAdjustments |   | Balance atSeptember 30,2006
|Engineering Solutions |  | $                          | 16,588 |                        | $ |                            |  | $ | 16,588
|AndersElite           |  |                            | 23,906 |                        |   | 741                         |  |   | 24,647
|MRI                   |  |                            | 10,191 |                        |   | 94                          |  |   | 10,285
|                      |  |                            |        |                        |   |                             |  |   |       
|                      |  | $                          | 50,685 |                        | $ | 835                         |  | $ | 51,520
|                      |  |                            |        |                        |   |                             |  |   |       



|4. | Short-term Borrowings
|-- | ---------------------

On February 28, 2007, the Company
entered into an unsecured, committed credit agreement, which provides for a revolving credit facility of up to $45.0 million. The credit agreement expires on February 27, 2008. Interest on borrowings under the facility is based on the nature
and tenure of the borrowings and may be (a) in the case of U.S. dollar borrowings, the greater of the Prime Rate or the Federal Funds Effective Rate (as defined in the agreement) plus 0.50% or (b) in the case of Eurodollar borrowings, the
Adjusted LIBOR Rate (as defined in the credit agreement). The restrictive covenants contained in the credit agreement limit the Company with respect to, among other things, subsidiary indebtedness, creating liens on its assets, mergers or
consolidations, disposition of assets other than in the ordinary course of business, acquisitions and investments. Additionally, the Company is required to maintain a minimum Adjusted EBITDA (as defined in the credit agreement) to interest expense
ratio of 1.5 to 1, not to exceed a maximum Debt to Consolidated EBITDA ratio of 2.5 to 1 and maintain a minimum shareholders equity of $228 million plus 35% of consolidated net income for each fiscal quarter ending after the credit agreement
was signed. During the nine-months ended September 30, 2007, the Company did not have any borrowings under this facility and is in compliance with all such covenants.

In 2006, the Company had an uncommitted, unsecured line of credit, which provided for borrowings of up to $35.0 million for short-term working capital needs. The line expired on February 28, 2007. Interest on
outstanding borrowings under this line was determined, at the option of the Company, either by the Prime Rate or the Adjusted LIBOR Rate (as defined in the related promissory note) plus 0.60%. There were no commitment or facility fees associated
with this line of credit.

During the first nine months of 2006, the Companys outstanding borrowings ranged from $0.1 million to $16.0 million and
the weighted average interest rate on short-term borrowings was 7.8%. Interest expense for the three- and nine-month periods ended September 30, 2006 was less than $0.1 million.



|5. | Property Held for Sale
|-- | ----------------------

On August 26, 2005, the Company
entered into a relocation agreement with an MRI executive. During the third quarter of 2006, the association between the executive and the Company ceased. Under the terms of the relocation agreement, the former executive transferred beneficial
ownership of his principal residence to the Company in exchange for $2.0 million. At the time of the transfer, the property had a fair value, net of costs to sell, of $3.2 million with an outstanding mortgage of $1.4 million. In accordance with SFAS
No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the asset held for sale was carried at fair value less costs to sell. The property was sold on June 11, 2007, and the Company received net cash proceeds of
$0.9 million from the sale.



8



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



For the three- and nine-month periods ended September 30, 2006, the Company recorded impairment charges of $
0.1 million and $0.6 million, respectively, with regard to this asset, which charges are included in operating and administrative expenses in the consolidated statements of earnings. At December 31, 2006, the asset of $2.4 million was
included in the consolidated balance sheet in Prepaid expenses and other assets and the mortgage payable of $1.4 million was presented in Other accrued expenses and other liabilities. The value of the asset was included in
MRI for segment reporting purposes (see Note 8).



|6. | Discontinued Operations
|-- | -----------------------

On September 19, 2007, the Company
signed a definitive agreement to sell all of the issued and outstanding common stock of its Todays Staffing, Inc. (Todays) subsidiary to Spherion Corporation. The sale closed on September 28, 2007. The sale price was $40.1 million
in cash and the Company retained responsibility for certain liabilities and certain current and deferred income taxes directly related to the business. The Company recorded a gain of $2.1 million ($1.4 million after-tax) in connection with the sale.
The sale price is subject to a working capital adjustment which is expected to be determined during the fourth quarter of 2007. Included in Accrued compensation and related expenses and Other accrued expenses and other
liabilities of continuing operations at September 30, 2007 are $2.0 million of estimated working capital and other transaction-related liabilities.

In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets (SFAS 144), the financial results of the Todays business segment have been presented as discontinued operations in the
consolidated financial statements for all periods presented.

The results of discontinued operations are summarized as follows:



|                                                                    |  |                                 |        |                                |   |        |  |      |         |  |   |        
|------------------------------------------------------------------- |  | ------------------------------- | ------ | ------------------------------ | - | ------ |  | ---- | ------- |  | - | -------
|                                                                    |  | Three months endedSeptember 30, |        | Nine months endedSeptember 30,
|                                                                    |  | 2007                            |        | 2006                           |   | 2007   |  | 2006
|Net Revenue                                                         |  | $                               | 36,720 |                                | $ | 36,546 |  | $    | 117,168 |  | $ | 115,791
|                                                                    |  |                                 |        |                               
|Earnings before income taxes from discontinued operations           |  |                                 | 443    |                                |   | 651    |  |      | 2,211   |  |   | 2,750  
|Income tax expense                                                  |  |                                 | 166    |                                |   | 239    |  |      | 827     |  |   | 1,010  
|                                                                    |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Earnings from discontinued operations, net of taxes                 |  |                                 | 277    |                                |   | 412    |  |      | 1,384   |  |   | 1,740  
|Gain from disposal of discontinued operations, net of taxes of $741 |  |                                 | 1,345  |                                |   |       |  |      | 1,345   |  |   |       
|                                                                    |  |                                 |        |                                |   |        |  |      |         |  |   |        
|Total earnings from discontinued operations, net of taxes           |  | $                               | 1,622  |                                | $ | 412    |  | $    | 2,729   |  | $ | 1,740  
|                                                                    |  |                                 |        |                                |   |        |  |      |         |  |   |        



|7. | Earnings per Share
|-- | ------------------

Both basic and diluted earnings per share for
all periods are calculated based on the reported earnings in the Companys consolidated statements of earnings.



9



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



The number of common shares used to calculate basic and diluted earnings per share for the three- and nine-months
ended September 30, 2007 and 2006 was determined as follows:



|                                                                   |  |                                 |   |  |                                |   |  |            |   |  |            |  
|------------------------------------------------------------------ |  | ------------------------------- | - |  | ------------------------------ | - |  | ---------- | - |  | ---------- | -
|                                                                   |  | Three months endedSeptember 30, |   |  | Nine months endedSeptember 30, |  
|                                                                   |  | 2007                            |   |  | 2006                           |   |  | 2007       |   |  | 2006       |  
|Basic                                                              |  |                                 |   |  |                                |   |  |            |   |  |            |  
|Average shares outstanding                                         |  | 20,314,276                      |   |  | 20,000,944                     |   |  | 20,184,823 |   |  | 19,928,877 |  
|Restricted shares issued not vested                                |  | (16,829                         | ) |  | (5,783                         | ) |  | (12,190    | ) |  | (4,811     | )
|                                                                   |  |                                 |   |  |                                |   |  |            |   |  |            |  
|                                                                   |  | 20,297,447                      |   |  | 19,995,161                     |   |  | 20,172,633 |   |  | 19,924,066 |  
|                                                                   |  |                                 |   |  |                                |   |  |            |   |  |            |  
|Diluted                                                            |  |                                 |   |  |                                |   |  |            |   |  |            |  
|Shares used for basic calculation                                  |  | 20,297,447                      |   |  | 19,995,161                     |   |  | 20,172,633 |   |  | 19,924,066 |  
|Dilutive effect of shares / units granted under Omnibus Stock Plan |  | 105,038                         |   |  | 65,153                         |   |  | 123,892    |   |  | 107,415    |  
|Dilutive effect of units issuable under Stock Purchase Plan        |  | 51,584                          |   |  | 42,063                         |   |  | 54,940     |   |  | 47,705     |  
|                                                                   |  |                                 |   |  |                                |   |  |            |   |  |            |  
|                                                                   |  | 20,454,069                      |   |  | 20,102,377                     |   |  | 20,351,465 |   |  | 20,079,186 |  
|                                                                   |  |                                 |   |  |                                |   |  |            |   |  |            |  



|8. | Reporting Segments
|-- | ------------------

Through December 31, 2006, the Company
operated through four reporting segments: Business Solutions (BS), AndersElite (Anders), Todays Staffing (Todays), and Management Recruiters International (MRI). As of January 1, 2007, the Company
began separately reporting CDI Engineering Solutions (ES) and CDI IT Solutions (ITS), which previously comprised the BS segment. This change reflects the Companys new operating structure and is intended to provide
investors with additional information on the Companys engineering versus its information technology revenue and operating profit.

As discussed in
Note 6 - Discontinued Operations, the Company sold its Todays business segment on September 28, 2007. As of September 30, 2007, the Company has four reporting segments: ES, MRI, Anders and ITS.

ES operates principally through four key verticals: CDI-Process & Industrial, CDI-Aerospace, CDI-Government Services and CDI-Life Sciences.



| |  |  | CDI-Process & Industrial  Provides a full range of engineering, project management, design, professional staffing and outsourcing solutions to firms
in two different sectors: the process sector that includes firms in oil, gas, alternative energy and chemicals; and the industrial sector, covering firms in power generation and energy transmission, telecommunications and heavy manufacturing.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | CDI-Government Services  Focuses on providing engineering, design and logistics services to the defense industry.
| | - |  | ------------------------------------------------------------------------------------------------------------------



| |  |  | CDI-Life Sciences  Offers design, validation, project management, engineering, professional staffing and outsourcing solutions to customers in the
pharmaceutical, bio-pharmaceutical and regulated medical services industries.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

MRI is a franchisor providing support services to its
franchisees who engage in the search and recruitment of executive, technical, professional and managerial personnel for employment by their customers. MRI also provides back office services that enable its franchisees to pursue temporary staffing
opportunities.

Anders provides temporary and permanent candidates to customers in the infrastructure environment seeking staff in



10



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



building, construction and related professional services, through a network of company offices. The Company maintains offices in the United Kingdom, although
it sources some candidates from Australia and New Zealand for the United Kingdom market. The Company also has offices in Australia where it provides temporary and permanent candidates to customers.

ITS provides a variety of information technology related services to its clients. These services include staffing (temporary, managed and permanent), consulting and
outsourcing (onsite and offsite). These service offerings require recruiting and retaining IT talent for temporary and permanent IT positions, industry expertise and the ability to determine appropriate solutions for business service needs.

In accordance with SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information, 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
former BS segment, property and equipment, and other assets.

The Company has revised the reporting segments prior year revenue and operating profit
for the ES and ITS split only for comparative purposes. Operating segment data is presented in the following table:



|                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|------------------------ |  | ------------------------------- | ------- | - | ------------------------------ | - | ------- | ---- |  | - | ------- | - |  | - | ------- | -
|                         |  | Three months endedSeptember 30, |         |   | Nine months endedSeptember 30, |  
|                         |  | 2007                            |         |   | 2006                           |   |         | 2007 |  |   | 2006    |  
|Revenue:                 |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|ES                       |  | $                               | 154,647 |   |                                | $ | 140,230 |      |  | $ | 458,781 |   |  | $ | 417,342 |  
|MRI                      |  |                                 | 20,830  |   |                                |   | 17,623  |      |  |   | 56,500  |   |  |   | 49,769  |  
|Anders                   |  |                                 | 66,356  |   |                                |   | 58,639  |      |  |   | 191,144 |   |  |   | 158,848 |  
|ITS                      |  |                                 | 56,875  |   |                                |   | 69,413  |      |  |   | 181,914 |   |  |   | 202,510 |  
|                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                         |  | $                               | 298,708 |   |                                | $ | 285,905 |      |  | $ | 888,339 |   |  | $ | 828,469 |  
|                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                         |  |                                 |         |  
|Operating profit (loss): |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|ES                       |  | $                               | 8,070   |   |                                | $ | 4,916   |      |  | $ | 25,696  |   |  | $ | 17,057  |  
|MRI                      |  |                                 | 4,240   |   |                                |   | 4,069   |      |  |   | 11,840  |   |  |   | 10,860  |  
|Anders                   |  |                                 | 3,857   |   |                                |   | 2,706   |      |  |   | 10,070  |   |  |   | 5,724   |  
|ITS                      |  |                                 | 327     |   |                                |   | 2,523   |      |  |   | 2,311   |   |  |   | 4,220   |  
|Corporate                |  |                                 | (4,926  | ) |                                |   | (4,458  | )    |  |   | (14,775 | ) |  |   | (14,111 | )
|                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  
|                         |  | $                               | 11,568  |   |                                | $ | 9,756   |      |  | $ | 35,142  |   |  | $ | 23,750  |  
|                         |  |                                 |         |   |                                |   |         |      |  |   |         |   |  |   |         |  



11



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



The following table reconciles the amount of revenue and operating profit reported for the prior year periods to the
revised amounts as shown above:



|                  |  |                                       |         |                   |   |          |            |  |   |        
|----------------- |  | ------------------------------------- | ------- | ----------------- | - | -------- | ---------- |  | - | -------
|                  |  | Three months ended September 30, 2006
|                  |  | Amountspreviouslyreported             |         | Reclassifications |   |          | As Revised
|Revenue:          |  |                                       |         |                   |   |          |            |  |   |        
|BS                |  | $                                     | 209,643 |                   | $ | (209,643 | )          |  | $ |       
|ES                |  |                                       |         |                   |   | 140,230  |            |  |   | 140,230
|ITS               |  |                                       |         |                   |   | 69,413   |            |  |   | 69,413 
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  |  | $                                     | 209,643 |                   | $ |         |            |  | $ | 209,643
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  | 
|                  |  | Nine months ended September 30, 2006 
|                  |  | Amountspreviouslyreported             |         | Reclassifications |   |          | As Revised
|Revenue:          |  |                                       |         |                   |   |          |            |  |   |        
|BS                |  | $                                     | 619,852 |                   | $ | (619,852 | )          |  | $ |       
|ES                |  |                                       |         |                   |   | 417,342  |            |  |   | 417,342
|ITS               |  |                                       |         |                   |   | 202,510  |            |  |   | 202,510
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  |  | $                                     | 619,852 |                   | $ |         |            |  | $ | 619,852
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  | 
|                  |  | Three months ended September 30, 2006
|                  |  | Amountspreviouslyreported             |         | Reclassifications |   |          | As Revised
|Operating profit: |  |                                       |         |                   |   |          |            |  |   |        
|BS                |  | $                                     | 7,439   |                   | $ | (7,439   | )          |  | $ |       
|ES                |  |                                       |         |                   |   | 4,916    |            |  |   | 4,916  
|ITS               |  |                                       |         |                   |   | 2,523    |            |  |   | 2,523  
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  |  | $                                     | 7,439   |                   | $ |         |            |  | $ | 7,439  
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  | 
|                  |  | Nine months ended September 30, 2006 
|                  |  | Amountspreviouslyreported             |         | Reclassifications |   |          | As Revised
|Operating profit: |  |                                       |         |                   |   |          |            |  |   |        
|BS                |  | $                                     | 21,277  |                   | $ | (21,277  | )          |  | $ |       
|ES                |  |                                       |         |                   |   | 17,057   |            |  |   | 17,057 
|ITS               |  |                                       |         |                   |   | 4,220    |            |  |   | 4,220  
|                  |  |                                       |         |                   |   |          |            |  |   |        
|                  |  | $                                     | 21,277  |                   | $ |         |            |  | $ | 21,277 
|                  |  |                                       |         |                   |   |          |            |  |   |        



12



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



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. Segment assets at December 31, 2006 have been reclassified to
conform to the current period presentation.



|          |  |                   |         |                  |   |         | 
|--------- |  | ----------------- | ------- | ---------------- | - | ------- | 
|          |  | September 30,2007 |         | December 31,2006 |  
|Assets:   |  |                   |         |                  |   |         | 
|ES        |  | $                 | 146,397 |                  | $ | 139,036 | 
|MRI       |  |                   | 33,461  |                  |   | 31,689  | 
|Anders    |  |                   | 81,093  |                  |   | 70,819  | 
|ITS       |  |                   | 51,031  |                  |   | 67,313  | 
|Corporate |  |                   | 147,795 |                  |   | 57,968  | 
|          |  |                   |         |                  |   |         | 
|          |  | $                 | 459,777 |                  | $ | 366,825 | 
|          |  |                   |         |                  |   |         | 

The following table reconciles the amount of assets previously reported to the revised amounts as shown above:



|                                                                                                               |  |                           |         |            |   |        |                   |  |   |            |   |  |   |        
|-------------------------------------------------------------------------------------------------------------- |  | ------------------------- | ------- | ---------- | - | ------ | ----------------- |  | - | ---------- | - |  | - | -------
|                                                                                                               |  | December 31, 2006        
|                                                                                                               |  | Amountspreviouslyreported |         | Adjustment |   |        | Reclassifications |  |   | As Revised
|Assets:                                                                                                        |  |                           |         |            |   |        |                   |  |   |            |   |  |   |        
|BS                                                                                                             |  | $                         | 233,946 |            | $ |       |                   |  | $ | (233,946   | ) |  | $ |       
|ES                                                                                                             |  |                           |         |            |   |       |                   |  |   | 139,036    |   |  |   | 139,036
|ITS                                                                                                            |  |                           |         |            |   |       |                   |  |   | 67,313     |   |  |   | 67,313 
|Corporate                                                                                                      |  |                           | 34,163  |            |   | (3,792 | )(1)              |  |   | 23,597     |   |  |   | 57,967 
|                                                                                                               |  |                           |         |            |   |        |                   |  |   |            |   |  |   |        
|                                                                                                               |  | $                         | 268,109 |            | $ | (3,792 | )(1)              |  | $ |           |   |  | $ | 264,316
|                                                                                                               |  |                           |         |            |   |        |                   |  |   |            |   |  |   |        
|(1)    Adjusted for the impact of $3,792 in net deferred taxes retained as a result of the disposal of Todays. |  |                           |         |           



|9. | International Master Franchise Agreement
|-- | ----------------------------------------

Effective April 1,
2006, the Company entered into an international master franchise agreement, which transferred to a third party all existing international franchise agreements as well as the right to enter into new franchise agreements abroad, with the exception of
existing or future franchises in Japan. The Company received an initial franchise fee of $0.3 million upon execution of the agreement and receives a portion of the franchise fees for all new franchises sold by the master franchisee. The Company also
receives continuing royalty payments. The Company also transferred an office lease and certain employees and sold fixed assets for $0.1 million, which amount approximated the aggregate net book value of those fixed assets.



13



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##### Table of Contents

CDI Corp. and Subsidiaries

Notes to Consolidated Financial Statements (continued)

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

(unaudited)



|10. | Commitments, Contingencies and Legal Proceedings
|--- | ------------------------------------------------

The Company has
litigation and other claims pending which have arisen in the ordinary course of business.

In March 2007, the Company received notification of its
successful appeal of a 2004 judgment against the Company. Thereafter, the other party petitioned the state supreme court to accept the appeal of this decision and that petition has been denied. The other party subsequently petitioned the state
supreme court for re-consideration, but management believes it is very unlikely the decision will be overturned. In March 2007, the Company reversed the $1.6 million legal accrual previously recorded for this matter to operating and administrative
expenses.

In June 2006, the United Kingdoms Office of Fair Trading (OFT) opened an investigation into alleged anti-competitive behavior
by Anders and a number of its competitors in the U.K. construction recruitment industry. The allegations being investigated include, among others, the competitors agreeing to minimum fees in their contracts with U.K. intermediary recruitment
companies and declining to work with one particular U.K. intermediary recruitment company. Anders is cooperating with the OFT in the investigation under the OFTs corporate leniency program. We believe it is likely that the OFT will ultimately
impose a fine on Anders. Although we cannot yet determine with any reliability the amount of the fine, the fine could be material and this matter could have a material adverse effect on the Companys financial position and results of
operations. The Company has not made any provision for any fine or other liabilities relating to this matter in its consolidated financial statements as of September 30, 2007.

In January 2007, the Company received a claim from a customer seeking $1.8 million due to alleged errors in the Companys engineering design work. The parties have resolved the matter and the Company has been
formally released from the claim. The Company recorded a $0.1 million provision to reflect resolution of this matter.



|11. | Subsequent Event
|--- | ----------------

On October 23, 2007, the Company declared a
quarterly dividend of $0.13 per share to be paid on November 21, 2007 to all shareholders of record as of November 7, 2007. As of October 31, 2007, there were 20,330,371 shares outstanding.



14



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##### Table of Contents

CDI Corp. and Subsidiaries

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

(Dollars 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 statements about the Companys strategy for growth, expected expenditures and future financial results, 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 expressions. 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 our 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, the following: changes in general economic conditions and levels of capital spending by customers in the industries that we serve; the impact of
a potential reduction in demand in our staffing business; possible inaccurate assumptions or forecasts regarding the bill rate, profit margin and duration of assignment applicable to billable personnel (and regarding the utilization rate of billable
personnel in our project business); competitive market pressures; the availability and cost of qualified labor; changes in customers attitudes towards outsourcing; our level of success in attracting, training and retaining qualified management
personnel and other staff employees; the ability to pass on to customers increases in costs (such as those relating to workers compensation, unemployment insurance, medical insurance coverage or other costs which may arise from regulatory
requirements); our performance on customer contracts; the possibility of incurring liability for our activities, including the activities of our temporary employees; adverse consequences arising out of the U.K. Office of Fair Trading investigation;
and government policies or judicial decisions adverse to the staffing industry. More detailed information about some of these risks and uncertainties may be found in other filings by the Company with the SEC, particularly in the section entitled
Risk Factors in Part 1, Item 1A of the Companys Annual Report Form 10-K for the year ended December 31, 2006. 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.

Overview

Results of Operations

On September 28, 2007, the Company sold its Todays Staffing, Inc. (Todays) subsidiary for $40.1 million and realized an after tax gain of $1.4 million on the sale. This is a significant step in the Companys efforts
over the past few years to refocus CDIs business on engineering and IT project outsourcing and professional staffing services. As a result of the sale, the financial results of Todays business segment have been presented as discontinued
operations in the financial statements for all periods presented. The discussion that follows in the remainder of this Managements Discussion and Analysis of Financial Condition and Results of Operations will pertain to continuing
operations only.

CDIs operating performance in the third quarter of 2007 continued to demonstrate positive momentum as revenue from continuing
operations increased 4.5% as compared to the same period in 2006. This increase was due to a number of factors, including increased capital spending by customers in many of the Companys business units, a relatively healthy economic environment
and continued strength in hiring and employment levels. Engineering Solutions, Management Recruiters International and AndersElite each reported double-digit revenue growth in the third quarter of 2007, while Information Technology Solutions
reported a revenue decline.

During the third quarter of 2007, CDIs net earnings from continuing operations increased 40.0% as compared to the same
period in 2006. This increase was due primarily to revenue growth in longer duration, higher margin accounts along with significant growth in permanent placements, both of which enabled gross profit dollars to grow 9.3%, more than double the 4.5%
growth in revenue. This produced a variable contribution margin (VCM) of 14.2% and an operating profit margin of 3.9% for the third quarter of 2007.



15



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



Business Strategy

CDIs strategic objective is to be a leading global provider of engineering and information technology 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.

CDIs business model is based on certain critical elements. CDI strives to meet the
needs of its customers through its ability to develop cost-effective engineering and IT solutions, to manage the implementation of complex projects and to provide highly-qualified technical and managerial personnel. A key strategic objective of the
Company is to focus more on higher value, higher margin and longer cycle business, such as engineering project outsourcing and solutions business and professional services, consisting of permanent placement and franchise-related services. Over the
past, the Company has developed more efficient business processes, instituted cost containment measures and increased productivity.

Key Performance
Indicators

Revenue growth is favorably impacted by external factors such as a strong business environment, an increase in capital spending related to
many of CDIs business units and low unemployment rates. Improving economic growth typically results in increasing demand for labor. Low unemployment rates often correlate with strong demand for the types of employees CDIs customers hire
on a permanent and contract basis. Operationally, CDIs ability to capitalize on opportunities created by economic expansion, its performance on new and existing accounts, new contract and account wins, and its ability to mitigate competitive
pricing pressures affect the Companys ability to increase revenue.

Gross profit and gross profit margin reflect CDIs ability to realize
pricing consistent with value provided, to incorporate changes in market demand, and to control and pass through direct costs. While gross profit margin can shift as a result of the mix of business, the Company believes that a focus on maintaining
and improving overall margins will lead to improved profitability. Professional services revenue, consisting of permanent placement and franchise related services, also has an impact on gross profit margin. Since there are no direct costs associated
with professional services revenue, increases or decreases in such revenue can have a disproportionate impact on gross profit margin.

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 change in operating profit divided by the year-over-year
change in revenue.

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



| |  |  | Produce pretax return on net assets (RONA) of 20% and redeploy assets unable to meet this target;
| | - |  | ---------------------------------------------------------------------------------------------------



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



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

During the third quarter of 2007, the Company achieved the RONA and VCM goals and made progress on the operating profit margin goal as a result of improved business performance and the sale of Todays.

Investigation by the U.K. Office of Fair Trading

In June 2006, the
United Kingdoms Office of Fair Trading (OFT) opened an investigation into alleged anti-competitive behavior by Anders and a number of its competitors in the U.K. construction recruitment industry. The allegations being investigated
include, among others, the competitors agreeing to minimum fees in their contracts with U.K. intermediary recruitment companies and declining to work with one particular U.K. intermediary recruitment company. Anders is cooperating with the OFT in
the investigation under the OFTs corporate leniency program. It is likely that the OFT will ultimately impose a fine on Anders. Although we cannot yet determine with any reliability the amount of the fine, the fine could be material and this
matter could have a material adverse effect on the Companys financial position and results of operations. The Company has not made any provision for any fine or other liabilities relating to this matter in the Companys consolidated
financial statements as of and for the periods ended September 30, 2007.



16



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



Consolidated Results of Operations for the three months ended September 30, 2007 as compared to the three
months ended September 30, 2006

The table that follows presents revenue by service type along with certain key metrics (in percentages) for
the three-month periods ended September 30, 2007 and 2006:



|                                            |  |                                 |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|------------------------------------------- |  | ------------------------------- | ------- | - | ------------------- | ----- | - | ---- | - | ------- | ----------------- |  | ----- | - |  | - | ------ |  | ----- | -
|                                            |  | Three months endedSeptember 30, |         |   | Increase (Decrease) |      
|(in thousands)                              |  | 2007                            |         |   | % of TotalRevenue   |       |   | 2006 |   |         | % of TotalRevenue |  |       | $ |  | % |       
|Revenue(1)                                  |  |                                 |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|Staffing services                           |  | $                               | 197,511 |   |                     | 66.1  | % |      | $ | 195,793 |                   |  | 68.5  | % |  | $ | 1,718  |  | 0.9   | %
|Project outsourcing                         |  |                                 | 80,853  |   |                     | 27.1  |   |      |   | 74,473  |                   |  | 26.0  |   |  |   | 6,380  |  | 8.6   |  
|Professional services                       |  |                                 | 20,344  |   |                     | 6.8   |   |      |   | 15,639  |                   |  | 5.5   |   |  |   | 4,705  |  | 30.1  |  
|                                            |  |                                 |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|                                            |  | $                               | 298,708 |   |                     | 100.0 | % |      | $ | 285,905 |                   |  | 100.0 | % |  | $ | 12,803 |  | 4.5   | %
|                                            |  |                                 |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|Gross profit                                |  | $                               | 72,393  |   |                     | 24.2  | % |      | $ | 66,229  |                   |  | 23.2  | % |  | $ | 6,164  |  | 9.3   | %
|Operating and administrative expenses       |  |                                 | 60,825  |   |                     | 20.4  |   |      |   | 56,473  |                   |  | 19.8  |   |  |   | 4,352  |  | 7.7   |  
|Operating profit                            |  |                                 | 11,568  |   |                     | 3.9   |   |      |   | 9,756   |                   |  | 3.4   |   |  |   | 1,812  |  | 18.6  |  
|Net earnings from continuing operations     |  |                                 | 7,967   |   |                     | 2.7   |   |      |   | 5,690   |                   |  | 2.0   |   |  |   | 2,277  |  | 40.0  |  
|                                            |  |                                 |         |   |                     |      
|Cash and cash equivalents                   |  |                                 | 113,582 |   |                     |       |   |      |   | 18,882  |                   |  |       |   |  |   | 94,700 |  | 501.5 |  
|Cash flow provided by operations            |  |                                 | 24,662  |   |                     |       |   |      |   | 13,011  |                   |  |       |   |  |   | 11,651 |  | 89.5  |  
|Effective tax rate                          |  |                                 | 34.0    | % |                     |       |   |      |   | 41.4    | %                 |  |       |   |  |   |        |  |       |  
|After-tax return on shareholders equity(2) |  |                                 | 9.5     | % |                     |       |   |      |   | 6.1     | %                 |  |       |   |  |   |        |  |       |  
|Pre-tax return on net assets(3)             |  |                                 | 20.5    | % |                     |       |   |      |   | 11.9    | %                 |  |       |   |  |   |        |  |       |  
|Variable contribution margin(4)             |  |                                 | 14.2    | % |                     |       |   |      |   | 11.2    | %                 |  |       |   |  |   |        |  |       |  

---

|(1) | Revenue for 2006 has been reclassified to conform to the current years presentation.
|--- | -------------------------------------------------------------------------------------

|(2) | Current quarter combined with the three preceding quarters net earnings from continuing operations divided by the average shareholders equity.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Current quarter combined with the three preceding quarters pre-tax earnings from continuing operations divided by the average net assets. Net assets include total assets from
continuing operations minus total liabilities from continuing operations excluding cash, external debt and income tax accounts.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(4) | Year-over-year change in operating profit from continuing operations divided by year-over-year change in revenue from continuing operations.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

Revenue increased primarily due to increased demand for engineering project outsourcing services in the oil and gas, alternative energy and defense industries, and
strong capital spending by the construction industry in the U.K. and Australia. The revenue increases were partially offset by a decline in IT staffing services revenue.

Gross profit margins increased as a result of a shift in business toward higher margin project outsourcing services in Engineering Solutions and permanent placement services revenue in Engineering Solutions and
Anders.

Consolidated operating and administrative expenses increased primarily due to higher staff salaries, incentive-based and stock-based compensation
largely driven by the improved financial performance discussed above.

Operating profit grew 18.6% and operating profit margin increased from 3.4% to 3.9%,
demonstrating progress towards the Companys goal of 5%. VCM of 14.2% slightly exceeded our target range of 12-14%. The increase in VCM was primarily due to the shift in the Companys business to higher value, higher margin, longer cycle
business, which led to gross margin and operating profit growing faster than revenue. RONA of 20.5% slightly exceed our target of 20.0%. The increase in RONA is primarily the result of higher earnings combined with improved accounts receivable
collections.



17



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



The Companys effective income tax rate was 34.0% in the third quarter of 2007 and 41.4% in the third quarter of
2006. The rate in 2007 was favorably impacted by investments in tax-exempt instruments and a higher proportion of foreign earnings taxed at lower rates, while the rate in 2006 was unfavorably impacted by an increase in the valuation allowance
recorded against certain deferred tax assets. The Company expects the full year 2007 effective tax rate to be in the range of 34-36%.

Consolidated
Results of Operations for the nine months ended September 30, 2007 as compared to the nine months ended September 30, 2006

The table that
follows presents revenue by service type along with some key metrics (in percentages) for the nine-month periods ended September 30, 2007 and 2006:



|                                        |  |                                |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|--------------------------------------- |  | ------------------------------ | ------- | - | ------------------- | ----- | - | ---- | - | ------- | ----------------- |  | ----- | - |  | - | ------ |  | ----- | -
|                                        |  | Nine months endedSeptember 30, |         |   | Increase (Decrease) |      
|(in thousands)                          |  | 2007                           |         |   | % of TotalRevenue   |       |   | 2006 |   |         | % of TotalRevenue |  |       | $ |  | % |       
|Revenue(1)                              |  |                                |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|Staffing services                       |  | $                              | 588,207 |   |                     | 66.2  | % |      | $ | 558,975 |                   |  | 67.5  | % |  | $ | 29,232 |  | 5.2   | %
|Project outsourcing                     |  |                                | 244,228 |   |                     | 27.5  |   |      |   | 225,634 |                   |  | 27.2  |   |  |   | 18,594 |  | 8.2   |  
|Professional services                   |  |                                | 55,904  |   |                     | 6.3   |   |      |   | 43,860  |                   |  | 5.3   |   |  |   | 12,044 |  | 27.5  |  
|                                        |  |                                |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|                                        |  | $                              | 888,339 |   |                     | 100.0 | % |      | $ | 828,469 |                   |  | 100.0 | % |  | $ | 59,870 |  | 7.2   | %
|                                        |  |                                |         |   |                     |       |   |      |   |         |                   |  |       |   |  |   |        |  |       |  
|Gross profit                            |  |                                | 212,233 |   |                     | 23.9  | % |      |   | 190,405 |                   |  | 23.0  | % |  |   | 21,828 |  | 11.5  | %
|Operating and administrative expenses   |  |                                | 177,091 |   |                     | 19.9  |   |      |   | 166,655 |                   |  | 20.1  |   |  |   | 10,436 |  | 6.3   |  
|Operating profit                        |  |                                | 35,142  |   |                     | 4.0   |   |      |   | 23,750  |                   |  | 2.9   |   |  |   | 11,392 |  | 48.0  |  
|Net earnings from continuing operations |  |                                | 23,657  |   |                     | 2.7   |   |      |   | 14,722  |                   |  | 1.8   |   |  |   | 8,935  |  | 60.7  |  
|                                        |  |                                |         |   |                     |      
|Cash flow provided by operations        |  | $                              | 36,783  |   |                     |       |   |      | $ | 9,558   |                   |  |       |   |  | $ | 27,225 |  | 284.8 | %
|Effective tax rate                      |  |                                | 34.9    | % |                     |       |   |      |   | 36.5    | %                 |  |       |   |  |   |        |  |       |  
|Variable contribution margin(2)         |  |                                | 19.0    | % |                     |       |   |      |   | 8.5     | %                 |  |       |   |  |   |        |  |       |  

---

|(1) | Revenue for 2006 has been reclassified to conform to the current years presentation.
|--- | -------------------------------------------------------------------------------------

|(2) | Year-over-year change in operating profit from continuing operations divided by year-over-year change in revenue from continuing operations.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------

Revenue increased primarily due to increased demand for engineering project outsourcing services in the oil and gas, alternative energy, life sciences and defense
industries and strong capital spending by the construction industry in the U.K. and Australia.

Gross profit margins increased as a result of a shift in
business toward higher margin project outsourcing services in Engineering Solutions and permanent placement services revenue in Engineering Solutions and Anders.

Consolidated operating and administrative expenses increased primarily due to higher staff salaries, incentive-based and stock-based compensation largely driven by the improved financial performance discussed above.

Partially offsetting these expense increases were:



| |  |  | Reversal of a legal accrual of $1.6 million in the first quarter of 2007; and
| | - |  | -----------------------------------------------------------------------------



18



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



| |  |  | Impairment charges of $0.6 million recorded in 2006 related to declines in the fair value of an asset held for sale.
| | - |  | --------------------------------------------------------------------------------------------------------------------

Operating profit grew 48.0% and operating profit margin increased from 2.9% to 4.0%, demonstrating progress towards the Companys goal of 5%. VCM of 19.0%, or 14.6%
when adjusted for certain previously disclosed pre-tax adjustments to earnings, slightly exceeded our target range of 12-14%. The increase in VCM was primarily due to the shift in mix to higher value, higher margin, longer cycle business, which led
to margins growing faster than expenses.

The Companys effective income tax rate was 34.9% and 36.5% for the nine months ended September 30,
2007 and 2006, respectively. The rate in 2007 was favorably impacted by investments in tax-exempt instruments and a higher proportion of foreign earnings taxed at lower rates, while the rate in 2006 was unfavorably impacted by an increase in the
valuation allowance recorded against certain deferred tax assets.

Segment Discussion

Effective January 1, 2007, the Company began separately reporting the Engineering Solutions and IT Solutions segments. These operations were previously reported
within the Business Solutions segment. This change reflects the Companys new operating structure and provides investors with additional information regarding the Companys engineering versus its information technology financial results.

Engineering Solutions (ES)

Business
Strategy

ES 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 needs 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. 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 and
cost of labor. In addition, ES is strategically engaging in global arrangements to lower its cost of services for clients, to access a broader talent pool and to provide worldwide servicing capability for its global clients. ES has developed
professional recruitment outsourcing (PRO) services to manage a clients entire recruitment process. PRO provides U.S. clients with a single source of professional and technical permanent placements across an entire organization.

Key Performance Indicators

The Company manages and
assesses ESs performance through various means, with the primary financial and operational measures including revenue growth, contract renewals, new contract wins, account growth, gross profit margin, operating profit and return on net assets.

Revenue growth reflects performance on both new and existing contracts and accounts. Incremental increases in revenue will not generally result in
proportionate increases in costs, particularly operating and administrative expenses, thus potentially improving operating profit margins.

New contracts,
account wins 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. ES employs financial and operational reviews in the contracting process to evaluate risks and seeks to generate appropriate margins and returns.

Gross profit 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 has led to improved profitability. Gross margins can also shift as a result of the mix of business, with project outsourcing business generally providing higher margins than staffing services.



19



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



Return on net assets (RONA) reflects ESs ability to generate profitable growth while optimizing
assets deployed in the business. A key metric to drive RONA is Accounts Receivable Days Sales Outstanding (DSO). Reduction in DSO will contribute to improvement in RONA.

Results of Operations

The following table presents changes in revenue by category, cost of services, gross profit,
operating and administrative expenses and operating profit for ES for the three months ended September 30, 2007 and 2006:



|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |       |  
|------------------------------------- |  | ------------------------------- | ------- | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ------ |  | ----- | -
|                                      |  | Three months endedSeptember 30, |         |                   | Increase (Decrease) |  
|                                      |  | 2007                            |         |                   | 2006                |   |  
|(in thousands)                        |  | $                               |         | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  | % |       
|Revenue(1)                            |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |       |  
|Staffing services                     |  | $                               | 77,382  |                   | 50.0                | % |   | $ | 73,721            |  | 52.6  | % |  | $ | 3,661  |  | 5.0   | %
|Project outsourcing                   |  |                                 | 73,898  |                   | 47.8                |   |   |   | 65,743            |  | 46.9  |   |  |   | 8,155  |  | 12.4  |  
|Professional Services                 |  |                                 | 3,367   |                   | 2.2                 |   |   |   | 766               |  | 0.5   |   |  |   | 2,601  |  | 339.6 |  
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |       |  
|                                      |  |                                 | 154,647 |                   | 100.0               |   |   |   | 140,230           |  | 100.0 |   |  |   | 14,417 |  | 10.3  |  
|Cost of services                      |  |                                 | 122,772 |                   | 79.4                |   |   |   | 113,777           |  | 81.1  |   |  |   | 8,995  |  | 7.9   |  
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |       |  
|Gross profit                          |  |                                 | 31,875  |                   | 20.6                |   |   |   | 26,453            |  | 18.9  |   |  |   | 5,422  |  | 20.5  |  
|Operating and administrative expenses |  |                                 | 23,805  |                   | 15.4                |   |   |   | 21,537            |  | 15.4  |   |  |   | 2,268  |  | 10.5  |  
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |       |  
|Operating profit                      |  | $                               | 8,070   |                   | 5.2                 | % |   | $ | 4,916             |  | 3.5   | % |  | $ | 3,154  |  | 64.2  | %
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |       |  

---

|(1) | Revenue for 2006 has been reclassified to conform to the 2007 presentation.
|--- | ---------------------------------------------------------------------------

ESs revenue increased in 2007 for all three categories, largely due to:



| |  |  | Increased capital spending by major customers, especially within project outsourcing,
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Average bill rate increases, reflecting our ability to pass on higher labor costs to our clients; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Increased permanent placement revenue primarily from project recruitment outsourcing in the Process & Industrial (P&I) vertical.
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------

Gross profit dollars increased due to volume increases in the P&I and Government Services verticals, offset by a decrease in
Aerospace volume.

Gross profit margins increased primarily due to:



| |  |  | Improved mix of higher margin, longer cycle project outsourcing in the P&I and Government Services verticals and an increase in higher margin permanent
placement revenue (PRO services) in the P&I vertical; and
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decline in lower margin technical staffing revenue within the Aerospace vertical.
| | - |  | ---------------------------------------------------------------------------------

ESs operating and administrative expenses increased in 2007 primarily due to:



| |  |  | Higher staff salaries and incentive-based compensation associated with the increase in revenue and profit, primarily in the P&I vertical; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increased computer and facilities costs within the P&I vertical associated with the increase in revenue.
| | - |  | --------------------------------------------------------------------------------------------------------

The following table presents changes in revenue from each of ESs verticals for the three months ended September 30, 2007 and 2006.



20



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



|                           |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |   |  |       |  
|-------------------------- |  | ------------------------------- | ------- | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ------ | - |  | ----- | -
|                           |  | Three months endedSeptember 30, |         |                   | Increase (Decrease) |  
|                           |  | 2007                            |         |                   | 2006                |   |  
|(in thousands)             |  | $                               |         | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  |   | %      |  
|Revenue(1)                 |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |   |  |       |  
|CDI-Process and Industrial |  | $                               | 117,994 |                   | 76.3                | % |   | $ | 102,247           |  | 72.9  | % |  | $ | 15,747 |   |  | 15.4  | %
|CDI-Aerospace              |  |                                 | 16,888  |                   | 10.9                |   |   |   | 20,616            |  | 14.7  |   |  |   | (3,728 | ) |  | (18.1 | )
|CDI-Government Services    |  |                                 | 17,642  |                   | 11.4                |   |   |   | 14,188            |  | 10.1  |   |  |   | 3,454  |   |  | 24.3  |  
|CDI-Life Sciences          |  |                                 | 2,123   |                   | 1.4                 |   |   |   | 3,179             |  | 2.3   |   |  |   | (1,056 | ) |  | (33.2 | )
|                           |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |   |  |       |  
|                           |  | $                               | 154,647 |                   | 100.0               | % |   | $ | 140,230           |  | 100.0 | % |  | $ | 14,417 |   |  | 10.3  | %
|                           |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |   |  |       |  

---

|(1) | Revenue for 2006 has been reclassified to conform to the current years presentation.
|--- | -------------------------------------------------------------------------------------

The P&I vertical focuses on small to medium-sized engineering projects within the process sector, which includes the oil refining, chemical and alternative energy industries, as well as oil and gas in western
Canada. The industrial sector includes power generation, telecommunications and heavy manufacturing. Typically, these customers are large, multi-national companies that use multiple service providers. Contracts are awarded based on the ability to
meet the specific requirements of each individual project. The increase in revenue within this vertical was largely attributable to strong capital spending by customers within the process sector, and to a lesser extent, within the industrial sector,
resulting in both new account wins and a ramp-up of existing accounts. Two significant account wins, late in the third quarter of 2007 in the alternative energy industry are expected to begin contributing to revenue growth in the fourth quarter. The
increase in permanent placement revenue was primarily a result of PRO services and to a lesser extent increased volumes in Canada.

The Aerospace vertical
provides outsourcing and staffing services to the commercial and military aerospace industries, which are dominated by major national and international conglomerates. Revenue within the Aerospace vertical decreased in 2007, primarily as a result of
exiting certain lower margin domestic technical staffing business and project delays by an international client.

The Government Services vertical focuses
on providing services primarily to U.S. Government agencies and prime contractors in the shipbuilding, military aviation and marine design industries. Revenue increases within this vertical in 2007 were driven primarily by renewed U.S. federal
government funding of a major U.S. Navy shipbuilding and ship design contract, as well as increased revenue from a major national staffing contract.

The
Life Sciences vertical provides engineering design, procurement and construction management to customers in the pharmaceutical and biotechnology industries. Customers range from start-up entities to large multinational organizations. Life Sciences
revenue decreases were primarily due to several projects winding down, while new projects have not fully ramped up, including those related to a significant account win late in the third quarter.



21



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



The following table presents changes in revenue by category, cost of services, gross profit, operating and
administrative expenses and operating profit for ES for the nine months ended September 30, 2007 and 2006:



|                                      |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |        |  |       |  
|------------------------------------- |  | ------------------------------ | ------- | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | ------ |  | ----- | -
|                                      |  | Nine months endedSeptember 30, |         |                   | Increase (Decrease) |  
|                                      |  | 2007                           |         |                   | 2006                |   |  
|(in thousands)                        |  | $                              |         | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  | %      | 
|Revenue(1)                            |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |        |  |       |  
|Staffing services                     |  | $                              | 228,425 |                   | 49.8                | % |   | $ | 215,395           |  | 51.6  | % |  | 13,030 |  | 6.0   | %
|Project outsourcing                   |  |                                | 223,478 |                   | 48.7                |   |   |   | 199,517           |  | 47.8  |   |  | 23,961 |  | 12.0  |  
|Professional Services                 |  |                                | 6,878   |                   | 1.5                 |   |   |   | 2,430             |  | 0.6   |   |  | 4,448  |  | 183.0 |  
|                                      |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |        |  |       |  
|                                      |  |                                | 458,781 |                   | 100.0               |   |   |   | 417,342           |  | 100.0 |   |  | 41,439 |  | 9.9   |  
|Cost of services                      |  |                                | 365,343 |                   | 79.6                |   |   |   | 337,877           |  | 81.0  |   |  | 27,466 |  | 8.1   |  
|                                      |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |        |  |       |  
|Gross profit                          |  |                                | 93,438  |                   | 20.4                |   |   |   | 79,465            |  | 19.0  |   |  | 13,973 |  | 17.6  |  
|Operating and administrative expenses |  |                                | 67,742  |                   | 14.8                |   |   |   | 62,408            |  | 14.9  |   |  | 5,334  |  | 8.5   |  
|                                      |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |        |  |       |  
|Operating profit                      |  | $                              | 25,696  |                   | 5.6                 | % |   | $ | 17,057            |  | 4.1   | % |  | 8,639  |  | 50.6  | %
|                                      |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |        |  |       |  

---

|(1) | Revenue for 2006 has been reclassified to conform to the 2007 presentation.
|--- | ---------------------------------------------------------------------------

ESs revenue increased in 2007, largely due to:



| |  |  | Increased capital spending by major customers, especially within project outsourcing;
| | - |  | -------------------------------------------------------------------------------------



| |  |  | Average bill rate increases, reflecting our ability to pass on higher labor costs to our clients; and
| | - |  | -----------------------------------------------------------------------------------------------------



| |  |  | Increased permanent placement revenue primarily from project recruitment outsourcing in the P&I vertical.
| | - |  | ---------------------------------------------------------------------------------------------------------

Gross profit dollars increased due to volume increases in the P&I, Government Services and Life Sciences verticals, offset by a decrease in Aerospace volume.

Gross profit margins increased primarily due to:



| |  |  | Improved mix of higher margin, longer cycle project outsourcing in the P&I, Government Services and Life Sciences verticals and an increase in higher margin
permanent placement revenue (PRO services) in the P&I vertical; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Decline in lower margin technical staffing revenue within the Aerospace vertical.
| | - |  | ---------------------------------------------------------------------------------

ESs operating and administrative expenses increased in 2007 primarily due to:



| |  |  | Higher staff salaries and incentive-based compensation associated with the increase in sales volume and profit, primarily in the P&I vertical;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Start-up costs of $0.8 million in early 2007 associated with two account wins; and
| | - |  | ----------------------------------------------------------------------------------



| |  |  | Increased computer and facilities costs within the P&I vertical associated with the increase in revenue.
| | - |  | --------------------------------------------------------------------------------------------------------

These increases were partially offset by the reversal of a legal accrual of $1.6 million in the first quarter of 2007.



22



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



The following table presents changes in revenue from each of ESs verticals for the nine months ended
September 30, 2007 and 2006:



|                           |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |  
|-------------------------- |  | ------------------------------ | ------- | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ------- | - |  | ----- | -
|                           |  | Nine months endedSeptember 30, |         |                   | Increase (Decrease) |  
|                           |  | 2007                           |         |                   | 2006                |   |  
|(in thousands)             |  | $                              |         | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  |   | %       |  
|Revenue(1)                 |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |  
|CDI-Process and Industrial |  | $                              | 346,041 |                   | 75.4                | % |   | $ | 302,331           |  | 72.5  | % |  | $ | 43,710  |   |  | 14.5  | %
|CDI-Aerospace              |  |                                | 52,299  |                   | 11.4                |   |   |   | 64,250            |  | 15.4  |   |  |   | (11,951 | ) |  | (18.6 | )
|CDI-Government Services    |  |                                | 51,387  |                   | 11.2                |   |   |   | 42,774            |  | 10.2  |   |  |   | 8,613   |   |  | 20.1  |  
|CDI-Life Sciences          |  |                                | 9,054   |                   | 2.0                 |   |   |   | 7,987             |  | 1.9   |   |  |   | 1,067   |   |  | 13.4  |  
|                           |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |  
|                           |  | $                              | 458,781 |                   | 100.0               | % |   | $ | 417,342           |  | 100.0 | % |  | $ | 41,439  |   |  | 9.9   | %
|                           |  |                                |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |  

---

|(1) | Revenue for 2006 has been
reclassified to conform to the current years presentation.
|--- | -------------------------------------------------------------------------------------

The increase in P&I revenue was largely attributable
to strong capital spending by customers within the process sector, and to a lesser extent, within the industrial sector, resulting from both new account wins and a ramp-up of existing accounts. Also contributing to the increase was higher permanent
placement revenue as a result of PRO services and to a lesser extent increased volumes in Canada.

Aerospace revenue decreased in 2007, primarily as a
result of the exiting of certain lower margin domestic technical staffing business and project delays by an international client.

Revenue increases in
Government Services in 2007 were driven primarily by renewed U.S. federal government funding of a major U.S. Navy shipbuilding and ship design contract, as well as increased revenue from a major national staffing contract.

Life Sciences revenue increases were largely attributable to the ramp up of several new contracts awarded in 2006 in the bio-technology sector.

Management Recruiters International (MRI)

Business
Strategy

The MRI network is one of the largest search and recruitment organizations in the world. The key to MRIs success is delivering value to
its franchisees by providing products, services and business planning assistance to help maximize their business growth and productivity. MRIs strategic growth objectives include expansion of current franchisees staffs to include more
search consultants, expansion of the international franchise network and continued growth in underdeveloped U.S. market areas. In April 2006, the Company sold an international master franchise. Under the sale agreement, MRI assigned the rights to
all of its existing international franchise agreements as well as the right to enter into any new franchise agreements abroad, with the exception of existing or future franchises in Japan. Although royalties initially declined as a result of the
sale, operating expenses have also been reduced, and this arrangement is expected to be potentially accretive to operating profit. MRI believes that the master franchisee has the capability to expand the international franchise network, thereby
increasing the flow of royalty payments to MRI.

Factors affecting MRIs revenue include a strong U.S. and global economy, low unemployment rates and
increased offerings of temporary staffing by franchisees. Permanent placement and royalty fees are driven by employer demand for mid-to-upper level managerial, professional and sales candidates, as well as the number of new franchise offices and
franchise contract renewals. MRI continues to focus its efforts on growing existing franchisees by redeploying its personnel to field service teams. These teams focus on maximizing customer contact and developing customer-level business plans to
establish clear metrics and optimize network member performance. During 2006, MRI was able to renegotiate two franchise agreements to permit the sale of additional franchises in certain under-penetrated areas.



23



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



MRI currently provides back-office services that enable its franchisees to pursue temporary staffing opportunities.
As part of MRIs strategy to strengthen the franchise network and improve franchise productivity, a larger number of franchised offices are expected to use these services in the future.

Key Performance Indicators

MRI manages and assesses its performance
through various means, with the primary operational and financial measures including weekly job orders, placements and billings, cash collections, royalties, number of franchise offices, franchise sales and renewals, billable hours, revenue growth
and return on net assets.

The number of franchise offices measures MRIs overall market penetration, franchise sales measure MRIs ability to
expand its market reach and renewals indicate MRIs ability to maintain, and the franchisees satisfaction with, its network.

MRI gauges the
strength of its franchise sales program by monitoring presentations, sales and closing percentage.

Billable hours and revenue growth in temporary staffing
services reflect MRIs performance in expanding the support services within the franchise network.

Gross profit and gross profit margin reflect
MRIs ability to realize pricing consistent with value provided, to incorporate changes in market demand, and to control and pass through direct costs. MRIs focus on maintaining and improving overall margins has led to improved
profitability. Gross margins can also shift as a result of the mix of business, with professional services generally providing higher margins than staffing services.

Return on net assets (RONA) reflects MRIs ability to generate profitable growth while optimizing assets deployed in the business. A key metric to drive RONA is Accounts Receivable Days Sales
Outstanding (DSO). Reduction in DSO will contribute to improvement in RONA.

Results of Operations

The following table presents changes in revenue, cost of services, gross profit, operating and administrative expenses and operating profit for MRI for the three months
ended September 30, 2007 and 2006:



|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|------------------------------------- |  | ------------------------------- | ------ | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ----- | - |  | ---- | -
|                                      |  | Three months endedSeptember 30, |        |                   | Increase (Decrease) |  
|                                      |  | 2007                            |        |                   | 2006                |   |  
|(in thousands)                        |  | $                               |        | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  |   | %     |  
|Revenue                               |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|Staffing services                     |  | $                               | 12,994 |                   | 62.4                | % |   | $ | 9,431             |  | 53.5  | % |  | $ | 3,563 |   |  | 37.8 | %
|Professional Services                 |  |                                 | 7,836  |                   | 37.6                |   |   |   | 8,192             |  | 46.5  |   |  |   | (356  | ) |  | (4.3 | )
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|                                      |  |                                 | 20,830 |                   | 100.0               |   |   |   | 17,623            |  | 100.0 |   |  |   | 3,207 |   |  | 18.2 |  
|Cost of services                      |  |                                 | 8,879  |                   | 42.6                |   |   |   | 6,633             |  | 37.6  |   |  |   | 2,246 |   |  | 33.9 |  
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|Gross profit                          |  |                                 | 11,951 |                   | 57.4                |   |   |   | 10,990            |  | 62.4  |   |  |   | 961   |   |  | 8.7  |  
|Operating and administrative expenses |  |                                 | 7,711  |                   | 37.0                |   |   |   | 6,921             |  | 39.3  |   |  |   | 790   |   |  | 11.4 |  
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|Operating profit                      |  | $                               | 4,240  |                   | 20.4                | % |   | $ | 4,069             |  | 23.1  | % |  | $ | 171   |   |  | 4.2  | %
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  

MRIs staffing services revenue increased in the third quarter of 2007 due to growth in franchise temporary
staffing services revenue, reflecting the placement of higher level professionals at higher bill rates. MRIs professional services revenue decreased primarily due to lower average royalty rates and timing of franchise sales activity.

Gross profit dollars increased due to the growth of staffing services. Overall gross profit margin decreased as the growth of lower margin staffing
services exceeded the growth of professional services.



24



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



The increase in operating and administrative expenses was largely due to sales commissions associated with the
revenue growth in staffing services. This increase was partially offset by a severance charges of $0.4 million recorded in the third quarter of 2006.

The
following table presents changes in revenue, cost of services, gross profit, operating and administrative expenses and operating profit for MRI for the nine months ended September 30, 2007 and 2006:



|                                      |  |                                |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|------------------------------------- |  | ------------------------------ | ------ | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ----- | - |  | ---- | -
|                                      |  | Nine months endedSeptember 30, |        |                   | Increase (Decrease) |  
|                                      |  | 2007                           |        |                   | 2006                |   |  
|(in thousands)                        |  | $                              |        | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  |   | %     |  
|Revenue                               |  |                                |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|Staffing services                     |  | $                              | 33,161 |                   | 58.7                | % |   | $ | 26,351            |  | 52.9  | % |  | $ | 6,810 |   |  | 25.8 | %
|Professional Services                 |  |                                | 23,339 |                   | 41.3                |   |   |   | 23,418            |  | 47.1  |   |  |   | (79   | ) |  | (0.3 | )
|                                      |  |                                |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|                                      |  |                                | 56,500 |                   | 100.0               |   |   |   | 49,769            |  | 100.0 |   |  |   | 6,731 |   |  | 13.5 |  
|Cost of services                      |  |                                | 22,983 |                   | 40.7                |   |   |   | 18,418            |  | 37.0  |   |  |   | 4,565 |   |  | 24.8 |  
|                                      |  |                                |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|Gross profit                          |  |                                | 33,517 |                   | 59.3                |   |   |   | 31,351            |  | 63.0  |   |  |   | 2,166 |   |  | 6.9  |  
|Operating and administrative expenses |  |                                | 21,677 |                   | 38.3                |   |   |   | 20,491            |  | 41.2  |   |  |   | 1,186 |   |  | 5.1  |  
|                                      |  |                                |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  
|Operating profit                      |  | $                              | 11,840 |                   | 21.0                | % |   | $ | 10,860            |  | 21.8  | % |  | $ | 980   |   |  | 9.0  | %
|                                      |  |                                |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |   |  |      |  

MRIs revenue increased in 2007 as a result of higher staffing services revenue, reflecting placement of
higher level professionals at higher average bill rates. Professional services revenue was largely flat reflecting increased sales of domestic franchises of $0.6 million, offset by the impact of the sale of the master franchise license, which
lowered royalty revenue.

Gross profit dollars increased due to the sales growth mentioned above. Overall gross profit margin decreased as lower margin
staffing services exceeded the growth of professional services.

The increase in operating and administrative expenses was largely due to:



| |  |  | Sales commissions associated with the revenue growth in staffing services; and
| | - |  | ------------------------------------------------------------------------------



| |  |  | Variable expenses related to incremental franchise sales.
| | - |  | ---------------------------------------------------------

This increase was partially offset by the absence of impairment charges of $0.6 million recorded in 2006, related to declines in the fair value of an asset held for sale, severance charges of $0.4 million recorded in the third quarter of
2006, and lower office and facility expenses associated with the sale of the international master franchise in April 2006.

AndersElite
(Anders)

Business Strategy

Anders is
focused on providing the highest quality candidate and recruitment services within the infrastructure environment. Management believes Anders utilization of web-based recruiting is very effective, provides it with a large pool of highly
qualified candidates, and enhances the Companys ability to filter candidates to meet specific customer needs.

Demand in the U.K. infrastructure
sector continues to grow with the rebuilding of the countrys rail system, other government-related projects, and private industry-related projects. While the demand for staffing services remains strong, the U.K. marketplace is experiencing a
shift from staffing services to permanent placement services. Anders is capitalizing on this marketplace shift by enhancing the permanent placement process by focusing more resources, including recruiter assistants on this area, resulting in
improving recruiter productivity. In addition, Anders anticipates that the 2012 London Olympics will provide opportunities for future revenue and operating profit growth. Demand in Australia continues to grow in the construction, mining, rail,
shipping, engineering and power and processing sectors.



25



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



Anders has generated new business growth due to the opening of new offices in the U.K. and Australia. The Australian
offices provide a pool of candidates to a tight U.K. labor market, in addition to generating business from Australia-based customers. Anders plans to expand its network of offices in Australia, in order to capitalize on the strong demand.

Key Performance Indicators

Anders relies on various
operational and financial metrics to manage its business. Key metrics include direct margin by recruiter and branch office, staff payroll costs as a percentage of gross profit, gross profit as a percentage of revenue and return on net assets.

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 productivity. 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 ensure that high levels of services are delivered to customers.

Gross profit 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 margins. A focus on maintaining and improving overall margins leads to improved profitability.

Return on net
assets (RONA) reflects Anders ability to generate profitable growth while optimizing assets deployed in the business. A key metric to drive RONA is Accounts Receivable Days Sales Outstanding (DSO). Reduction in DSO will
contribute to improvement in RONA.

Results of Operations

The following table presents changes in revenue, cost of services, gross profit, operating and administrative expenses and operating profit for Anders for the three months ended September 30, 2007 and 2006 in U.S. dollars:



|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|------------------------------------- |  | -------------------------------- | ------ | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ----- |  | ---- | -
|                                      |  | Three months ended September 30, |        |                   | Increase (Decrease) |  
|                                      |  | 2007                             |        |                   | 2006                |   |  
|(U.S. dollars, in thousands)          |  | $                                |        | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  | % |      
|Revenue                               |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Staffing services                     |  | $                                | 57,456 |                   | 86.6                | % |   | $ | 52,195            |  | 89.0  | % |  | $ | 5,261 |  | 10.1 | %
|Professional Services                 |  |                                  | 8,900  |                   | 13.4                |   |   |   | 6,444             |  | 11.0  |   |  |   | 2,456 |  | 38.1 |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|                                      |  |                                  | 66,356 |                   | 100.0               |   |   |   | 58,639            |  | 100.0 |   |  |   | 7,717 |  | 13.1 |  
|Cost of services                      |  |                                  | 48,333 |                   | 72.8                |   |   |   | 43,701            |  | 74.5  |   |  |   | 4,632 |  | 10.6 |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Gross profit                          |  |                                  | 18,023 |                   | 27.2                |   |   |   | 14,938            |  | 25.5  |   |  |   | 3,085 |  | 20.7 |  
|Operating and administrative expenses |  |                                  | 14,166 |                   | 21.4                |   |   |   | 12,232            |  | 20.9  |   |  |   | 1,934 |  | 15.8 |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Operating profit                      |  | $                                | 3,857  |                   | 5.8                 | % |   | $ | 2,706             |  | 4.6   | % |  | $ | 1,151 |  | 42.5 | %
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  



26



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



The following table presents changes in revenue, cost of services, gross profit, operating and administrative
expenses, and operating profit for Anders for the nine months ended September 30, 2007 and 2006 in U.S. dollars:



|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |      |  
|------------------------------------- |  | ------------------------------- | ------- | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ------ |  | ---- | -
|                                      |  | Nine months ended September 30, |         |                   | Increase (Decrease) |  
|                                      |  | 2007                            |         |                   | 2006                |   |  
|(U.S. dollars, in thousands)          |  | $                               |         | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  | % |       
|Revenue                               |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |      |  
|Staffing services                     |  | $                               | 166,214 |                   | 87.0                | % |   | $ | 141,498           |  | 89.1  | % |  | $ | 24,716 |  | 17.5 | %
|Professional Services                 |  |                                 | 24,930  |                   | 13.0                |   |   |   | 17,350            |  | 10.9  |   |  |   | 7,580  |  | 43.7 |  
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |      |  
|                                      |  |                                 | 191,144 |                   | 100.0               |   |   |   | 158,848           |  | 100.0 |   |  |   | 32,296 |  | 20.3 |  
|Cost of services                      |  |                                 | 139,490 |                   | 73.0                |   |   |   | 118,495           |  | 74.6  |   |  |   | 20,995 |  | 17.7 |  
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |      |  
|Gross profit                          |  |                                 | 51,654  |                   | 27.0                |   |   |   | 40,353            |  | 25.4  |   |  |   | 11,301 |  | 28.0 |  
|Operating and administrative expenses |  |                                 | 41,584  |                   | 21.8                |   |   |   | 34,629            |  | 21.8  |   |  |   | 6,955  |  | 20.1 |  
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |      |  
|Operating profit                      |  | $                               | 10,070  |                   | 5.2                 | % |   | $ | 5,724             |  | 3.6   | % |  | $ | 4,346  |  | 75.9 | %
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |        |  |      |  

To more effectively discuss the comparative results of operations for the three months ended September 30,
2007 and 2006, the following table presents Anders results on a local currency basis (i.e., British Pounds - £):



|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|------------------------------------- |  | -------------------------------- | ------ | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ----- |  | ---- | -
|                                      |  | Three months ended September 30, |        |                   | Increase (Decrease) |  
|                                      |  | 2007                             |        |                   | 2006                |   |  
|(British pounds, in thousands)        |  | £                                |        | % of TotalRevenue |                     |   | £ |   | % of TotalRevenue |  |       | £ |  | % |      
|Revenue                               |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Staffing services                     |  | £                                | 28,532 |                   | 86.6                | % |   | £ | 27,999            |  | 89.0  | % |  | £ | 533   |  | 1.9  | %
|Professional Services                 |  |                                  | 4,422  |                   | 13.4                |   |   |   | 3,458             |  | 11.0  |   |  |   | 964   |  | 27.9 |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|                                      |  |                                  | 32,954 |                   | 100.0               |   |   |   | 31,457            |  | 100.0 |   |  |   | 1,497 |  | 4.8  |  
|Cost of services                      |  |                                  | 24,002 |                   | 72.8                |   |   |   | 23,441            |  | 74.5  |   |  |   | 561   |  | 2.4  |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Gross profit                          |  |                                  | 8,952  |                   | 27.2                |   |   |   | 8,016             |  | 25.5  |   |  |   | 936   |  | 11.7 |  
|Operating and administrative expenses |  |                                  | 7,031  |                   | 21.4                |   |   |   | 6,552             |  | 20.9  |   |  |   | 479   |  | 7.3  |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Operating profit                      |  | £                                | 1,921  |                   | 5.8                 | % |   | £ | 1,464             |  | 4.6   | % |  | £ | 457   |  | 31.2 | %
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  

The increase in revenue was primarily due to:



| |  |  | Strong capital spending on infrastructure, which drives demand for services, particularly permanent placement services; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------



| |  |  | Increased productivity among recruiting and sales personnel due to increased administrative support to key producers.
| | - |  | ---------------------------------------------------------------------------------------------------------------------

Gross profit dollars increased due to sales growth and improved productivity mentioned above.

Gross profit margins increased primarily due to:



| |  |  | Increases in higher margin permanent placement revenue due to a shift from staffing services to permanent placement services in the U.K.; and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Average permanent placement fee increase of approximately 8%.
| | - |  | -------------------------------------------------------------



27



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



Anders operating and administrative expenses increase was largely due to higher staff salaries and incremental
incentive-based compensation of £0.7 million associated with the increase in sales volume, partially offset by lower advertising and marketing expenses.

To more effectively discuss the comparative results of operations for the nine months ended September 30, 2007 and 2006, the following table presents Anders results on a local currency basis (i.e., British Pounds - £):



|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|------------------------------------- |  | ------------------------------- | ------ | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ----- |  | ---- | -
|                                      |  | Nine months ended September 30, |        |                   | Increase (Decrease) |  
|                                      |  | 2007                            |        |                   | 2006                |   |  
|(British pounds, in thousands)        |  | £                               |        | % of TotalRevenue |                     |   | £ |   | % of TotalRevenue |  |       | £ |  | % |      
|Revenue                               |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Staffing services                     |  | £                               | 83,613 |                   | 87.0                | % |   | £ | 78,130            |  | 89.1  | % |  | £ | 5,483 |  | 7.0  | %
|Professional Services                 |  |                                 | 12,541 |                   | 13.0                |   |   |   | 9,580             |  | 10.9  |   |  |   | 2,961 |  | 30.9 |  
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|                                      |  |                                 | 96,154 |                   | 100.0               |   |   |   | 87,710            |  | 100.0 |   |  |   | 8,444 |  | 9.6  |  
|Cost of services                      |  |                                 | 70,169 |                   | 73.0                |   |   |   | 65,427            |  | 74.6  |   |  |   | 4,742 |  | 7.2  |  
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Gross profit                          |  |                                 | 25,985 |                   | 27.0                |   |   |   | 22,283            |  | 25.4  |   |  |   | 3,702 |  | 16.6 |  
|Operating and administrative expenses |  |                                 | 20,918 |                   | 21.8                |   |   |   | 19,126            |  | 21.8  |   |  |   | 1,792 |  | 9.4  |  
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  
|Operating profit                      |  | £                               | 5,067  |                   | 5.2                 | % |   | £ | 3,157             |  | 3.6   | % |  | £ | 1,910 |  | 60.5 | %
|                                      |  |                                 |        |                   |                     |   |   |   |                   |  |       |   |  |   |       |  |      |  

The increase in revenue was primarily due to:



| |  |  | Strong capital spending on infrastructure, which continued to drive demand for both staffing and permanent placement services; and
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------



| |  |  | Increased productivity among recruiting and sales personnel due to lower recruiter turnover rates and increased support to key producers.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------

Gross profit dollars increased due to sales growth and improved productivity mentioned above.

Gross profit margins increased primarily due to:



| |  |  | Increases in higher margin permanent placement revenue due to a shift from staffing services to permanent placement services in the U.K. and growth in Australia;
and
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | Average permanent placement fee increase of approximately 11%.
| | - |  | --------------------------------------------------------------

Anders operating and administrative expenses increase was largely due to higher staff salaries and incremental incentive-based compensation of £2.0 million associated with the increase in sales
volume, partially offset by lower advertising and marketing expenses of £0.3 million.

Information Technology Solutions (ITS)

Business Strategy

ITS provides a variety of
information technology related services for its clients. These services include staffing, consulting and project outsourcing. These service offerings require recruiting and retaining information technology talent for temporary and permanent
information technology positions, industry expertise and the ability to determine appropriate solutions for business service needs. These services are primarily provided to Fortune 1000 companies who have high volume information technology
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 client base,



28



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



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 clients. The IT services industry is highly competitive and is subject to strong pricing pressures from customers and competition. New
contracts are generally awarded through a formalized competitive bid process.

While staffing continues to be a fundamental service, ITS has increased its
efforts to provide higher-value IT project outsourcing and consulting services through the development of expertise in specific service lines. This shift in emphasis towards higher value IT services realigns ITS with CDIs core business
strategy. When providing a full range of integrated IT services to a client, ITS will seek to differentiate itself from the competition and optimize the clients infrastructure, all while targeting a reduction in overall IT costs and improved
service levels.

Key Performance Indicators

The
Company manages and assesses ITSs performance through various means, with the primary financial and operational measures including revenue growth, gross profit margin, direct margin per hour, operating profit margin and return on net assets.

Revenue growth reflects performance on both new and existing contracts and accounts. The business model is such that incremental revenue may not result in
proportionate increases in operating and administrative costs, thus contributing to an improvement in profitability.

Gross profit 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.

Return on net assets (RONA) reflects ITSs ability to generate profitable growth while optimizing assets
deployed in the business. A key metric to drive RONA is Accounts Receivable Days Sales Outstanding (DSO). Reduction in DSO will contribute to improvement in RONA.

Results of Operations

The following table presents changes in revenue by category, cost of services, gross profit,
operating and administrative expenses, and operating profit for ITS for the three months ended September 30, 2007 and 2006:



|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|------------------------------------- |  | -------------------------------- | ------ | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ------- | - |  | ----- | --
|                                      |  | Three months ended September 30, |        |                   | Increase (Decrease) |  
|                                      |  | 2007                             |        |                   | 2006                |   |  
|(in thousands)                        |  | $                                |        | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  |   | %       |  
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Revenue(1)                            |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Staffing services                     |  | $                                | 49,745 |                   | 87.5                | % |   | $ | 60,483            |  | 87.2  | % |  | $ | (10,738 | ) |  | (17.8 | )%
|Project outsourcing                   |  |                                  | 6,889  |                   | 12.1                |   |   |   | 8,694             |  | 12.5  |   |  |   | (1,805  | ) |  | (20.8 | ) 
|Professional Services                 |  |                                  | 241    |                   | 0.4                 |   |   |   | 236               |  | 0.3   |   |  |   | 5       |   |  | 2.1   |   
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|                                      |  |                                  | 56,875 |                   | 100.0               |   |   |   | 69,413            |  | 100.0 |   |  |   | (12,538 | ) |  | (18.1 | ) 
|Cost of services                      |  |                                  | 46,331 |                   | 81.5                |   |   |   | 55,564            |  | 80.0  |   |  |   | (9,233  | ) |  | (16.6 | ) 
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Gross profit                          |  |                                  | 10,544 |                   | 18.5                |   |   |   | 13,849            |  | 20.0  |   |  |   | (3,305  | ) |  | (23.9 | ) 
|Operating and administrative expenses |  |                                  | 10,217 |                   | 17.9                |   |   |   | 11,326            |  | 16.4  |   |  |   | (1,109  | ) |  | (9.8  | ) 
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Operating profit                      |  | $                                | 327    |                   | 0.6                 | % |   | $ | 2,523             |  | 3.6   | % |  | $ | (2,196  | ) |  | (87.0 | )%
|                                      |  |                                  |        |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   

---

|(1) | Revenue for 2006 has been reclassified to conform to the 2007 presentation.
|--- | ---------------------------------------------------------------------------



29



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



ITSs revenue decreased from the prior year primarily due to staffing cutbacks by a large IT client.
Additionally, ITS has experienced a reduced demand for its staffing services provided to smaller accounts due to competitive pricing pressures within the marketplace.

ITSs gross profit dollars decreased due to a reduction in staffing services and project outsourcing revenue categories. Gross profit margin declined due to the reduction in outsourcing revenue and the
aforementioned pricing pressures experienced within staffing services.

ITSs operating and administrative expenses decreased primarily due to
headcount reductions and other cost control initiatives implemented as a result of the same large IT clients cutbacks as well as recent softness in staffing demand.

The following table presents changes in revenue by category, cost of services, gross profit, operating and administrative expenses, and operating profit for ITS for the nine months ended September 30, 2007 and
2006:



|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|------------------------------------- |  | ------------------------------- | ------- | ----------------- | ------------------- | - | - | - | ----------------- |  | ----- | - |  | - | ------- | - |  | ----- | --
|                                      |  | Nine months ended September 30, |         |                   | Increase (Decrease) |  
|                                      |  | 2007                            |         |                   | 2006                |   |  
|(in thousands)                        |  | $                               |         | % of TotalRevenue |                     |   | $ |   | % of TotalRevenue |  |       | $ |  |   | %       |  
|Revenue(1)                            |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Staffing services                     |  | $                               | 160,406 |                   | 88.2                | % |   | $ | 175,731           |  | 86.8  | % |  | $ | (15,325 | ) |  | (8.7  | )%
|Project outsourcing                   |  |                                 | 20,750  |                   | 11.4                |   |   |   | 26,118            |  | 12.9  |   |  |   | (5,368  | ) |  | (20.6 | ) 
|Professional Services                 |  |                                 | 758     |                   | 0.4                 |   |   |   | 661               |  | 0.3   |   |  |   | 97      |   |  | 14.6  |   
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|                                      |  |                                 | 181,914 |                   | 100.0               |   |   |   | 202,510           |  | 100.0 |   |  |   | (20,596 | ) |  | (10.2 | ) 
|Cost of services                      |  |                                 | 148,290 |                   | 81.5                |   |   |   | 163,274           |  | 80.6  |   |  |   | (14,984 | ) |  | (9.2  | ) 
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Gross profit                          |  |                                 | 33,624  |                   | 18.5                |   |   |   | 39,236            |  | 19.4  |   |  |   | (5,612  | ) |  | (14.3 | ) 
|Operating and administrative expenses |  |                                 | 31,313  |                   | 17.2                |   |   |   | 35,016            |  | 17.3  |   |  |   | (3,703  | ) |  | (10.6 | ) 
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   
|Operating profit                      |  | $                               | 2,311   |                   | 1.3                 | % |   | $ | 4,220             |  | 2.1   | % |  | $ | (1,909  | ) |  | (45.2 | )%
|                                      |  |                                 |         |                   |                     |   |   |   |                   |  |       |   |  |   |         |   |  |       |   

---

|(1) | Revenue for 2006 has been reclassified to conform to the 2007 presentation.
|--- | ---------------------------------------------------------------------------

ITSs revenue decreased from the prior year primarily due to staffing cutbacks by a large IT client as well as continued
competitive pricing pressures within the staffing services marketplace.

ITSs gross profit dollars decreased due to a reduction in staffing services
and project outsourcing. Gross profit margin declined due to the reduction in outsourcing revenue and pricing pressures experienced within staffing services.

ITSs operating and administrative expenses decreased primarily due to headcount reduction and other cost control initiatives implemented throughout 2006 and into 2007.

Corporate

Corporate expenses increased $0.4 million for a total of $4.9 million for the third quarter of 2007, as
compared to $4.5 million for the third quarter of 2006. For the nine months ended September 30, 2007, corporate expenses increased $0.7 million for a total of $14.8 million as compared to $14.1 million for the nine months ended 2006. These
increases were primarily due to variable compensation costs as well as higher stock-based compensation expenses, partially offset by reductions in consulting fees, audit fees and compliance costs related to the Sarbanes-Oxley Act of 2002 for the
nine-months ended September 30, 2007.



30



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##### Table of Contents

CDI Corp. and Subsidiaries

Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



Liquidity and Capital Resources

The following table summarizes the major captions from the Companys Consolidated Statements of Cash Flows:



|                                                |  |                                |        |   |      |   |        |  
|----------------------------------------------- |  | ------------------------------ | ------ | - | ---- | - | ------ | -
|                                                |  | Nine months endedSeptember 30, |       
|(in thousands)                                  |  | 2007                           |        |   | 2006 |  
|Operating activities from continuing operations |  | $                              | 36,783 |   |      | $ | 9,558  |  
|Investing activities from continuing operations |  |                                | 34,995 |   |      |   | (8,194 | )
|Financing activities from continuing operations |  |                                | (71    | ) |      |   | (2,740 | )

Operating Activities

During the first nine months of 2007, the Company generated $36.8 million in cash from operating activities as compared to $9.6 million in 2006. The increase in operating cash flow versus the first nine months of 2006
was primarily due to higher earnings of $9.0 million, improvements in accounts receivable collections and business changes with certain key customers.

Investing Activities

Net cash generated from investing activities of $35.0 million primarily consisted of (1) net
proceeds of $39.8 million from the sale of the Todays business segment included in discontinued operations plus (2) net proceeds of $0.9 million from the sale of an MRI asset, partially offset by capital expenditures of $5.8 million. The 2007
capital expenditures were for computer hardware and software to support the growth in engineering services in the P&I vertical and continued development of new recruiting software to support the ES and ITS segments. The 2006 capital spending of
$8.2 million reflects investments in equipment at certain engineering centers and leasehold improvements and the implementation of a new franchise reporting system for MRI. Capital expenditures for the full year 2007 are expected to be approximately
$7.0 million.

Financing Activities

Net cash provided by financing activities from continuing operations increased by $2.7 million during the first nine months 2007, as compared to the same period in 2006. The Company received $5.5 million in proceeds from stock options
exercised during the first nine months of 2007 as compared to $2.6 million received during the same period in 2006. The level of cash overdrafts decreased by $0.8 million as compared to the same period in 2006, principally due to timing of payments.

The Company paid shareholders dividends totaling $6.7 and $6.6 million during the nine months ended 2007 and 2006, 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.

Summary

The Companys business model is
expected to generate positive cash flow over the business cycle. However, periods of growth, and to a lesser extent, seasonality, do impact working capital needs and cash flow. Management believes that the Companys current funds, funds
generated from operations and funds available under its short-term debt facility will be sufficient to meet currently anticipated working capital, capital expenditures, dividends and potential acquisitions. Should the Company require additional
funds in the future, management believes that it will be able to obtain these funds at competitive rates.

Critical Accounting Policies and Estimates

The Companys interim financial statements were prepared in accordance with generally accepted accounting principles in the United States of
America, which require management to make subjective decisions, assessments and estimates about



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Managements Discussion and Analysis of Financial Condition and Results of Operations (continued)

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

(unaudited)



the effect of matters that are inherently uncertain. As the number of variables and assumptions affecting managements judgments 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 2006 Annual Report on Form 10-K filed on March 7, 2007 with the Securities and Exchange Commission have not materially changed except as noted below;

FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48)

In July 2006, the
FASB released FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxesan Interpretation of FASB Statement 109 (FIN 48). FIN 48 prescribes a model for the recognition and measurement of a tax position
taken or expected to be taken in a tax return, and provides guidance on derecognition, classification, interest and penalties, disclosure and transition. The Company adopted FIN 48 on January 1, 2007. See Note 2 for further discussion regarding
our adoption of this standard.



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|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 to its operations in foreign countries conducted through subsidiaries
operating primarily in the United Kingdom, Canada, Germany and Australia. Exchange rate fluctuations impact the U. S. dollar value of reported earnings derived from these foreign operations as well as from the Companys investment in the net
assets related to these operations. The Company engages in hedging activities with respect to its foreign operations.

In the first quarter of 2007, the
Company purchased Canadian dollar, British pound sterling and Euro currency options at a cost of $451,000. The options are for various amounts in local currency on a quarterly basis and the remaining outstanding options will expire at the end of
2007.

The Companys direct exposure to interest rate changes is not significant. The company had no borrowings during the first nine months of 2007.
During the first nine months of 2006, the Companys outstanding borrowings ranged from $0.1 million to $16.0 million and the average interest rate on short-term borrowings was 7.8%. At September 30, 2006, the Company had no bank borrowings
outstanding. The Companys investments in money market instruments are primarily at variable rates.



|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 September 30, 2007. Based on this 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 was no change 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 third quarter ended September 30, 2007 that have materially affected, or is reasonably likely to materially affect, the Companys internal control over financial reporting.

PART II. OTHER INFORMATION



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

In June 2006, the United Kingdoms Office
of Fair Trading (OFT) opened an investigation into alleged anti-competitive behavior by Anders and a number of its competitors in the U.K. construction recruitment industry. The allegations being investigated include, among others, the
competitors agreeing to minimum fees in their contracts with U.K. intermediary recruitment companies and declining to work with one particular U.K. intermediary recruitment company. Anders is cooperating with the OFT in the investigation under the
OFTs corporate leniency program. It is likely that the OFT will ultimately impose a fine on Anders. Although we cannot yet determine with any reliability the amount and materiality of that fine, the fine could be material and this matter could
have a material adverse effect on the Companys financial position and results of operations. The Company has not made any provision for any fine or other liabilities relating to this matter in its consolidated financial statements as of
September 30, 2007.



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In March 2007, the Company received notification of its successful appeal of a 2004 judgment against the Company. The
other party petitioned the state supreme court to accept the appeal of this decision and that petition has been denied. The other party subsequently petitioned the state supreme court for re-consideration, but management believes it is very unlikely
the decision will be overturned. In March 2007, the Company reversed the $1.6 million legal accrual previously recorded to operating and administrative expenses.



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

There have been no material changes from the risk
factors disclosed in the Risk Factors section (Item 1A) of the Companys Annual Report on Form 10-K for the year ended December 31, 2006.



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

None.



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

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



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

None.



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



|     |  |                                                                                                                                                                                
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.a |  | Form of Directors Time-Vested Deferred Stock Award.                                                                                                                           
|     | 
|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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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.
|                 |  |          
|November 7, 2007 |  | By:       |  | /s/ Mark A. Kerschner                               
|                 |  |           |  | Mark A. Kerschner                                   
|                 |  |           |  | Executive Vice President and Chief Financial Officer



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INDEX TO EXHIBITS



|       |  |                                                                                                                                                                                
|------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |  | Exhibit                                                                                                                                                                        
|10.a   |  | Form of Directors Time-Vested Deferred Stock Award.                                                                                                                           
|       | 
|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.



36