Caution Concerning Forward-Looking Statements

This report (including Management's Discussion and Analysis of Financial Condition and Results of Operations) contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that address expectations or projections about the future, including, but not limited to, statements about the Company's strategies for growth and future financial results (such as revenues, pre-tax profit and tax rates), are forward-looking statements. Some of the forward-looking statements can be identified by words like "anticipates," "believes," "expects," "may," "will," "could," "should," "intends," "plans," "estimates" and similar 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 the Company's control or are subject to change, actual outcomes and results may differ materially from what is expressed or forecasted in these forward-looking statements. Important factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to: continued weakness in general economic conditions and levels of capital spending by customers in the industries the Company serves; further weakness in the financial and capital markets, which may result in the postponement or cancellation of the CDI customers' capital projects or the inability of CDI's customers to pay the Company's fees; competitive market pressures; the Company's ability to maintain and grow its revenue base; the availability and cost of qualified labor; adverse consequences arising out of the UK Office of Fair Trading investigation; credit risks associated with the Company's customers; the Company's level of success in attracting, training, and retaining qualified management personnel and other staff employees; changes in customers' attitudes towards outsourcing; changes in tax laws and other government regulations; the possibility of incurring liability for the Company's activities, including the activities of the Company's temporary employees; the Company's performance on customer contracts; and government policies or judicial decisions adverse to the Company's businesses. More detailed information about some of these risks and uncertainties may be found in the Company's filings with the SEC, particularly in the section entitled "Risk Factors" in Part 1, Item 1A. of the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company assumes no obligation to update such statements, whether as a result of new information, future events or otherwise, except as required by law.

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

Executive Overview

Continued weak macroeconomic conditions influenced the Company's second quarter 2009 results. A very weak permanent placement hiring environment in a broad sector of US industries and in the UK construction industry caused significant year-over-year declines in higher-margin permanent placement revenue at CDI AndersElite ("Anders") and royalty revenue at Management Recruiters International, Inc. ("MRI").

Additionally, continued weakness in global credit markets, as well as weak demand for commodity chemicals, specialty chemicals and oil, caused project delays and project cancellations in the CDI-Process and Industrial ("P&I") vertical within the CDI Engineering Solutions ("ES") business segment.

Increased US Government defense spending and the ramp-up of a previously announced US Navy contract contributed to quarterly year-over-year revenue gains in CDI-Government Services ("Government Services") within ES. Additionally, CDI-Aerospace ("Aerospace") revenue for the quarter increased due to the July 2008 acquisition of TK Engineering Associates ("TK Engineering"). P&I also commenced operation of its joint venture with Proyectos y Construcciónes del Puerto, S.A. de C.V. ("Pycopsa"), a Mexico-based construction and industrial maintenance company during the quarter. The Company's CDI IT Solutions ("ITS") business segment experienced continued growth in its staffing services business. During the quarter, the Company continued to reduce costs of operations to align structural costs with lower revenue levels.

The Company reported a revenue decrease of 25.5% for the second quarter of 2009 versus the second quarter of 2008 (20.9% in constant currency). As the second quarter of 2009 developed, the Company had increased project bid activity and increased revenue in staffing services in both its ES and ITS business segments. Should these trends continue, it could indicate a potential reversal of the revenue declines that the Company has recently experienced.

Declines in the Company's higher-margin permanent placement revenue and declines in revenue from higher-margin outsourcing projects during the quarter contributed to a decline in the Company's gross profit margin from 23.4% to 20.6% when compared to the prior year second quarter.

For the second quarter of 2009, the Company reported net earnings of $0.1 million, or $0.00 per diluted share versus net earnings of $7.0 million, or $0.34 per diluted share in the prior year quarter. Cost reduction initiatives implemented in late 2008 and during the first half of 2009 should enable the Company to be profitable if current business levels continue in subsequent quarters.

Consolidated Discussion

Business Strategy

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

The Company seeks to achieve its strategic objectives by focusing on three core goals. These goals are:

• Shift service delivery up the value continuum, which requires the Company to focus business development efforts among existing and new customers on higher value, higher margin and higher skill services.

• Build international reach and global services delivery capabilities, particularly in engineering outsourcing, engineering project management and professional services.

• Leverage the long-term capital spending cycle by building skill sets and business scale in targeted ES verticals and Anders.

Key Performance Indicators

The Company manages and assesses its performance through various means, with the primary financial and operational measures including revenue, constant currency revenue, contract renewals, new contract wins, gross profit dollars and gross profit margin, operating profit, return on net assets and variable contribution margin.

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

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

Gross profit dollars and gross profit margin reflect CDI's ability to realize pricing consistent with value provided, to address changes in market demand and to control and pass through direct costs. Gross profit margin will shift as a result of the mix of business. The Company is focused on improving margins over time through efforts to grow new higher margin business and to cycle out of lower margin business. Professional services revenue, consisting of permanent placement and franchise related services, has a significant 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.

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

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

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

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

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

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

• Generate VCM in the 12% to 14% range on revenue growth.

During the second quarter of 2009, the Company achieved a RONA of 2.2%, primarily reflecting reduced profit levels. Operating profit margin for the quarter declined from 3.7% to 0.3%, primarily due to reduced capital spending by petrochemical, chemical and industrial customers in the P & I vertical and the significant decline in permanent placement hiring in the Anders and MRI business segments, resulting in decreased revenue and profits. VCM was not calculated for 2009 and 2008 because both revenue and operating profit declined.

Consolidated Results of Operations for the three months ended June 30, 2009 as compared to the three months ended June 30, 2008

The table that follows presents changes in revenue by service type along with selected financial information and some key metrics for the three-month periods ended June 30, 2009 and 2008:

                                                         Three months ended
                                                              June 30,                                Increase (Decrease)
                                                     % of Total                     % of Total
(in thousands)                          2009          Revenue          2008          Revenue             $              %
Revenue
Staffing services                     $ 149,814            69.5 %    $ 199,358            69.0 %    $    (49,544 )    (24.9 )%
Project outsourcing services             60,214            28.0         75,317            26.0           (15,103 )    (20.1 )
Professional services                     5,398             2.5         14,536             5.0            (9,138 )    (62.9 )

                                      $ 215,426           100.0 %    $ 289,211           100.0 %    $    (73,785 )    (25.5 )%

Gross profit                          $  44,279            20.6 %    $  67,582            23.4 %    $    (23,303 )    (34.5 )%
Operating and administrative
expenses                                 43,751            20.3         56,826            19.7           (13,075 )    (23.0 )
Operating profit                            528             0.3         10,756             3.7           (10,228 )    (95.1 )
Net earnings attributable to CDI      $      59              -  %    $   6,979             2.4 %    $     (6,920 )    (99.2 )%
Cash and cash equivalents             $  77,932                      $ 121,423                      $    (43,491 )    (35.8 )%
Cash flow provided by operations      $  10,056                      $  13,694                      $     (3,638 )    (26.6 )%
Effective income tax rate                  47.2 %                         38.6 %
After-tax return on shareholders'
equity(1)                                   1.1 %                          9.3 %
Pre-tax return on net assets(2)             2.2 %                         22.1 %
Variable contribution margin(3)              NM                             NM

(1) Current quarter combined with the three preceding quarters' earnings attributable to CDI divided by the average CDI shareholders' equity.

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

(3) Year-over-year growth in operating profit divided by year-over-year growth in revenue. The calculation for the periods presented are not meaningful (NM) because both revenue and operating profit declined in 2009 and 2008.

Revenue by service type includes the following:

• Staffing services - Staffing services include providing the Company's skilled engineering, IT, project management, architecture, construction and other professionals to work at a customer's location under the supervision of customer personnel on a contractual basis for assignments that could range from several months to over one year. The Company also provides managed staffing services where the Company assumes overall management of a customer's contract staffing functions. All of the Company's four business segments provide customers with staffing services.

• Project outsourcing services - Project outsourcing services include engineering and IT projects, often performed at a CDI facility or at a customer's location under the supervision of CDI personnel, which provide a deliverable work product or service to the customer. These services are performed in the Company's ES and ITS segments.

• Professional services - Professional services include search, recruitment and permanent placement of technical, professional and managerial personnel; sales of new franchises; and services provided to franchisees to help them generate permanent placements. All of the Company's four business segments provide customers with professional services.

Revenue for the second quarter of 2009 declined as compared to the second quarter of 2008. Anders and MRI experienced significant declines in professional services revenue due to a drop in permanent placement hiring as a result of declining employment markets in North America and the UK. Anders also experienced reduced staffing services revenue due to the conclusion of customer projects in early 2009 and a decline in new project starts, as the construction industry in the UK continues to be weakened by the global economic downturn. ES experienced a decline in revenue in its P & I vertical due to reduced capital spending by petrochemical, chemical and industrial customers and the ending of several alternative energy projects in late 2008 and early 2009.

These declines were partially offset by increased revenue from ITS, due primarily to a major account expansion in staffing services, partially offset by reduced demand from customers in the automotive sector. Revenue also increased in ES's Government Services vertical due to continuing work on several US Navy shipbuilding and ship design projects related to a contract awarded in 2008 and in ES's Aerospace vertical, resulting from the July 2008 acquisition of TK Engineering.

Gross profit decreased primarily due to declines in revenue. Gross profit margin decreased due to the rapid decline of professional services revenue, lower levels of higher-margin outsourcing projects and direct costs decreasing at a slower pace than revenue.

Consolidated operating and administrative expenses, including $0.7 million of severance charges, decreased primarily due to decreased headcount, cost containment measures and lower business volumes.

Operating profit declined to $0.1 million and operating profit margin decreased from 3.7% to 0.3% due to the factors noted above and infrastructure costs declining at a slower pace than revenue.

The effective tax rates for the three months ended June 30, 2009 and 2008 were 47.2% and 38.6%, respectively. The income tax rate in 2009 was unfavorably impacted by provisions for state and foreign taxes and projected losses in foreign jurisdictions on which no tax benefit has been recognized or on which the tax benefit was recognized at tax rates lower than the US rate.

Cash balances increased by $16.2 million to $77.9 million from December 31, 2008 to June 30, 2009. The increase in cash was due to decreased working capital requirements, primarily resulting from decreases in accounts receivable.

On April 30, 2009, Chrysler LLC and certain of its affiliates ("Chrysler") filed voluntary petitions for a structured bankruptcy under Chapter 11 of the US Bankruptcy Code. As of April 30, 2009, the Company had approximately $1.1 million in net accounts receivable due from Chrysler. Subsequent to Chrysler's bankruptcy, the Company received full payment of the entire pre-petition balance. Chrysler emerged from bankruptcy on June 11, 2009.

Consolidated Results of Operations for the six months ended June 30, 2009 as compared to the six months ended June 30, 2008

The table that follows presents changes in revenue by service type along with selected financial information and some key metrics for the six-month periods ended June 30, 2009 and 2008:

                                                               Six months ended
                                                                   June 30,                                 Increase (Decrease)
                                                          % of Total                      % of Total
(in thousands)                              2009           Revenue           2008          Revenue             $             %
Revenue
Staffing services                         $ 307,205             69.2 %     $ 398,629            68.3 %    $   (91,424 )     (22.9 )%
Project outsourcing services                125,737             28.3         152,580            26.2          (26,843 )     (17.6 )
Professional services                        11,136              2.5          31,882             5.5          (20,746 )     (65.1 )

                                          $ 444,078            100.0 %     $ 583,091           100.0 %    $  (139,013 )     (23.8 )%

Gross profit                              $  91,706             20.7 %     $ 138,837            23.8 %    $   (47,131 )     (33.9 )%
Operating and administrative expenses        91,829             20.7         117,118            20.1          (25,289 )     (21.6 )
Operating profit (loss)                        (123 )             -           21,719             3.7          (21,842 )    (100.6 )
Net earnings (loss) attributable to CDI   $    (861 )           (0.2 )%    $  14,903             2.6 %    $   (15,764 )    (105.8 )%
Cash flow provided by operations          $  19,757                        $   8,210                      $    11,547       140.6 %
Effective income tax rate                     (46.9 )%                          36.8 %
Variable contribution margin(1)                  NM                               NM

(1) Year-over-year growth in operating profit divided by year-over-year growth in revenue. The calculation for the periods presented are not meaningful (NM) because both revenue and operating profit declined in 2009 and 2008.

Revenue for the six months ended June 30, 2009 declined as compared to the six months ended June 30, 2008. Anders and MRI experienced significant declines in professional services revenue due to a drop in permanent placement hiring as a result of declining employment markets in North America and the UK. Anders also experienced reduced staffing services revenue due to the conclusion of customer projects in early 2009 and a decline in new project starts, as the construction industry in the UK continues to be weakened by the global economic downturn. ES experienced a decline in revenue in its P & I vertical due to reduced capital spending by petrochemical, chemical and industrial customers, reduced revenue from permanent placement and the ending of several alternative energy projects in late 2008 and early 2009.

These declines were partially offset by increased revenue from ITS, due primarily to a major account expansion in staffing services, partially offset by reduced demand from customers in the automotive sector. Revenue also increased in ES's Government Services vertical due to continuing work on several US Navy shipbuilding and ship design projects related to a contract awarded in 2008 and in ES's Aerospace vertical, resulting from the July 2008 acquisition of TK Engineering.

Gross profit decreased primarily due to declines in revenue. Gross profit margin decreased due to the rapid decline of professional services revenue, lower levels of higher-margin outsourcing projects and direct costs decreasing at a slower pace than revenue.

Consolidated operating and administrative expenses, including $2.0 million of severance and real estate exit charges, decreased primarily due to decreased headcount, cost containment measures and lower business volumes.

Operating profit declined to a $0.1 million loss and operating profit margin decreased from 3.7% to 0% due to the factors noted above and infrastructure costs declining at a slower pace than revenue.

The effective tax rates for the six months ended June 30, 2009 and 2008 were
(46.9)% and 36.8%, respectively. The income tax rate for 2009 was unfavorably impacted by projected losses in foreign jurisdictions on which no tax benefit has been recognized or on which the tax benefit was recognized at tax rates lower than the US rate, an increase related to uncertain tax positions and an adjustment to income taxes payable.

Segment Discussion

ES

Business Strategy

ES's business strategy is to pursue the development of long-term alliances with its customers as a cost-effective source provider of engineering services and professional staffing. By working as a core supplier and partner with its customers, ES is able to develop an understanding of its customers' overall business needs as well as the unique technical requirements of their projects. This approach creates the opportunity for ES to provide a greater and more integrated range of services to its customers to facilitate efficient project management, procurement, overall program integration and execution. This strategy requires ES to develop capabilities to provide services to its customers who have global requirements. The Company formed a joint venture in Kuwait during the fourth quarter of 2008 to provide access to engineering project work in Middle Eastern petrochemical, industrial and commercial infrastructure projects. Success of the ES business strategy is dependent upon maintaining and renewing its existing customers or contracts, continued capital spending by its major engineering customers, the ability to win new contract awards and accounts and the availability of labor at a reasonable cost. In addition, ES is strategically engaging in global arrangements to lower its labor costs for customers, to access a broader talent pool and to provide worldwide servicing capabilities for its global customers. As part of this initiative, the Company's joint venture in Mexico commenced operations during the second quarter of 2009. ES provides professional recruitment outsourcing ("PRO") services to manage a customer's entire recruitment process. PRO services provide domestic and multi-national customers with a single source of professional and technical permanent placements across an entire organization. ES continues to develop its strategy to acquire broader skill sets and greater leverage for servicing the alternative energy markets, as it continues to pursue further business opportunities in those markets.

Key Performance Indicators

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

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

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.

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

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