CDI CORP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

(x) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
-----------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-5519
------
CDI CORP.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)

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

1717 Arch Street, 35th Floor, Philadelphia, PA 19103-2768
- ---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (215) 569-2200
--------------
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Common stock, $.10 par value New York Stock Exchange
- ---------------------------- --------------------------------------
(Title of each class) (Name of exchange on which registered)

Indicate 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 if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained,
to the best of Registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value as of February 21, 1996 of voting stock
of the Registrant held by shareholders other than officers, directors
or known beneficial owners of 10% or more of such stock of the
Registrant was:
Common stock, $.10 par value $238,200,000
Class B common stock, $.10 par value Not applicable

The outstanding shares of each of the Registrant's classes of
common stock as of February 21, 1996 were:
Common stock, $.10 par value 19,820,428 shares
Class B common stock, $.10 par value None

DOCUMENTS INCORPORATED BY REFERENCE

Part of Form 10-K into
Documents which incorporated
--------- ----------------------
Proxy Statement for Annual Meeting
of Shareholders to be Held May 7, 1996 Part III

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PART I

Item 1. BUSINESS.

BUSINESS SEGMENTS

The following table sets forth (in thousands) the revenues and
operating profit attributable to the business segments of the
Registrant and its consolidated subsidiaries during the years indicated
and the identifiable assets attributable to each segment as of the end
of each such year. At the end of 1995 the Company adopted a plan to
sell the manufacturing technology division of a Technical Services
subsidiary which serves the automotive market. That division had been
a separate line of business within the Technical Services segment and,
accordingly, it has been classified as a discontinued operation in the
Registrant s results for the years indicated. All financial data has
been restated to reflect this division as a discontinued operation.

Years ended
December 31,
-----------------------------
1995 1994 1993
--------- --------- -------
Revenues:
Technical Services $ 1,062,045 839,245 712,128
Temporary Services 141,779 121,180 111,739
Management Recruiters 66,629 52,350 33,107
--------- --------- -------
$ 1,270,453 1,012,775 856,974
========= ========= =======
Operating profit:
Technical Services $ 45,322 27,764 18,459
Temporary Services 7,174 5,002 2,015
Management Recruiters 9,993 7,240 3,856
Corporate expenses (6,652) (6,749) (5,719)
--------- --------- -------
$ 55,837 33,257 18,611
========= ========= =======
Identifiable assets:
Technical Services $ 263,974 195,677 165,418
Temporary Services 30,418 22,924 23,033
Management Recruiters 11,961 8,390 5,585
Corporate 4,412 5,756 21,936
--------- --------- -------
310,765 232,747 215,972
Net assets of discontinued
operations 18,011 53,112 42,999
--------- --------- -------
$ 328,776 285,859 258,971
========= ========= =======

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TECHNICAL SERVICES

The Registrant's Technical Services segment, which management
believes is the nation's largest organization of its kind, offers four
types of technical personnel services: technical staffing, managed
staffing, managed technical outsourcing and consulting.

The segment s fundamental, and predominant, service is technical
staffing, in which the segment locates, recruits and hires a wide
variety of technical personnel and provides their services to customers
principally on a temporary or project basis. Customers retain
Technical Services for expansion and development programs, to staff
special projects, to meet peak period manpower needs, to provide skills
which the customers' employees may not possess or which are not
available locally and to staff non-core, peripheral functions.

In managed staffing, the segment not only provides the temporary
personnel but also manages the customer s entire temporary staffing
needs. Typically, the core of its managed staffing services is
technical personnel, but in certain instances the segment will also
provide, or will manage subcontractors who will provide, peripheral
non-technical personnel, such as office/clerical personnel. When it
provides managed staffing services Technical Services usually
establishes a branch office on site at the customer s facilities,
staffs it with the segment s human resources experts, and equips it
with computer terminals linked to the segment s main personnel
database.

In managed technical outsourcing, Technical Services takes over a
customer s entire technical department, staffing the department with
technical personnel and managing the production of the department s
technical output. Most managed technical outsourcing relationships
are currently in the computer-aided-design area. In most instances the
managed department is located on-site at the customer s premises ( in-
customer ) but in some cases the customer may prefer an off-site
location, and in this case the segment might be called upon to furnish
the site (referred to by the segment as an in-house location) as well
as to furnish the computer systems needed to support the operations.

Technical Services performs engineering and information systems
consulting, providing its customers with product, manufacturing
process, facilities and information systems design services. These
activities typically take place at the segment s own in-house
facilities where the segment furnishes the computer systems support.

During the year ended December 31, 1995, Technical Services
provided services to approximately 3,000 customers. Much of its
business is performed for large industrial corporations in the
aircraft/aerospace, automotive, chemicals, electronics, industrial
equipment, information processing, marine, petroleum/petrochemicals,
power/energy, telecommunications and other fields. Technical Services'
customers are widely dispersed geographically. Managed staffing,
managed technical outsourcing and consulting services are concentrated
among a small number of these customers, which tend to be among the
very largest U.S. industrial corporations.

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During the years ended December 31, 1995 and 1994, the
Registrant's consolidated revenues derived from various divisions of
General Motors Corporation and its subsidiaries were less than 10%,
compared with 10% in 1993. During the year ended December 31, 1995,
approximately 2% of the Registrant's consolidated revenues were derived
directly from prime contracts with the United States Government and an
additional approximately 10% of the consolidated revenues were derived
from subcontracts for the United States Government. Most of the
Government business is defense related and is attributable to the
Technical Services business segment.

Services rendered by Technical Services generally are not of a
concept-originating nature, but, rather, are directed toward the
implementation of a customer's previously conceived concepts and
programs. Services are performed both in customers' facilities
("in-customer") and in Technical Services' own facilities ("in-house")
depending upon industry practice and the needs and preferences of
customers. During the year ended December 31, 1995, approximately 75%
of Technical Services' revenues were generated through in-customer work
with the remaining 25% generated in-house. As of December 31, 1995
Technical Services had approximately 15,700 employees providing
services in-customer and 2,800 employees providing services in-house.

In-customer staffing services are rendered by employees who are
hired by Technical Services and assigned to work on a specific project
of a customer. The period of assignment depends upon the duration of
the need for the skills possessed by an individual employee. At the
end of an assignment, an employee is either assigned to perform
services with another customer, or employment is terminated.

Technical personnel are attracted to this type of employment by
the opportunity to frequently work on "state-of-the-art" projects and
by the geographic and industry diversity of the projects. In addition,
technical personnel may be compensated at higher rates than the hourly
rate equivalent paid to personnel with similar backgrounds and
experience who are employed by industry or government. In many
instances Technical Services' employees work substantial overtime.

When performing services on an in-customer basis, Technical
Services personnel so assigned are on Technical Services' payroll and
are subject to its administrative control. The customer retains
technical and supervisory control over the performance of in-customer
services. When services are provided to staff and manage non-core
peripheral functions of customers, Technical Services may provide
additional supervision for employees and may have greater
responsibilities for performance.

When services are performed in-house, Technical Services generally
provides supervision for employees, and may have increased
responsibility for the performance of work which is monitored in
conjunction with customer personnel. Typically, in-house facilities
are established only at locations where there is a reasonably
concentrated customer base that uses Technical Services continuously.

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In-house operations offer services from one location to customers
in the vicinity of such operations. The demand for in-house services
is generally more constant than at a customer's facility.
Consequently, the duration of employment of employees working in-house
is usually greater than for employees working in-customer. Supervisory
personnel at in-house facilities are generally long-term employees and
are important in the continuing relationship with customers.

Industry continues to expand its use of computerized systems to do
engineering and design work. In order to continue to provide
state-of-the-art services to its customers, Technical Services has made
substantial investments in computer-aided-design systems supporting a
wide range of disciplines at its in-house engineering facilities. The
computer technology surrounding these systems continues to change
rapidly. It is expected that additional fixed capital investments in
CAD systems will continue to be made.

The ability of Technical Services to locate and hire personnel
with the capabilities required by customers is critical to its
operations. Such personnel have prior experience in their area of
expertise. During periods of high demand for specific skills, it is
not uncommon for Technical Services to experience pressure to pay
higher wage rates or lose employees to competitors who will pay such
rates in an attempt to attract personnel with the required skills. To
assist in fulfilling its personnel needs, a computerized retrieval
system facilitates the rapid selection of resumes on file so that
customers' requirements around the country may be filled quickly.

Pricing under most contracts between Technical Services and its
customers is based on prevailing hourly rates of pay, and contracts
generally (i) do not obligate the customer to pay for any fixed number
of hours, (ii) give the customer the right to vary the number of
technical personnel assigned and (iii) give both the customer and the
segment the right to terminate the contract, usually on short notice.
Similarly, Technical Services has the right to terminate the employment
of its technical employees without notice. Some of these customer
contracts contain limitations on the maximum cost to the customer
expressed either in a dollar amount or a maximum number of worker hours
to be provided.

Technical Services operated through a network of approximately 150
sales/recruiting offices and in-house engineering/drafting facilities
which are situated in major markets throughout the United States, with
3 offices in Canada and 9 offices located overseas. Each office is
responsible for determining the potential market for services in its
geographic and industrial area, and developing that market through
personal contact with prospective and existing customers.
Additionally, Technical Services' operating management stays abreast of
emerging demand for services so that efforts can be expanded or
redirected to take advantage of potential business either in
established or new marketing areas.

Customers typically invite several companies to bid for contracts,
which are awarded primarily on the basis of price, prior performance
and previous experience in successful project completion. Many times

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customers on in-customer work grant contracts to more than one company
to perform work on the same project. Because prices charged to
customers are primarily based upon prevailing wage rates in the market-
place, customers are aware of these rates and are readily able to judge
the reasonableness of competing bids. Consequently, Technical Services
competes for contracts based upon price and performance capability and
also upon the ability to recruit personnel with the requisite
capabilities.

Reliable statistical information on the technical services
industry is not available. It is estimated that approximately 600
companies are engaged in the business of providing engineering,
technical and information systems personnel generating combined annual
revenues of approximately $9 billion. No single company or small group
of companies is dominant. Competition in the industry is intense both
from national as well as smaller local or regional companies, some of
which serve only selected markets.

TEMPORARY SERVICES

The Registrant's Temporary Services segment provides clerical,
secretarial, office support, new product demonstration and survey and
some semi-skilled light industrial personnel to customers on a
temporary basis. The Registrant has de-emphasized light industrial
during recent years.

Customers retain Temporary Services to meet peak period manpower
needs, to temporarily replace employees on vacation and to staff
special projects. During the year ended December 31, 1995, these
services were provided to approximately 11,000 customers.

Services are performed in customers' facilities by Temporary
Services' employees who are hired to work on customers' projects. The
period of assignment depends upon the duration of the need for the
skills possessed by an individual employee. At the end of an
assignment, an employee is assigned to perform services with another
customer, or employment is terminated. Temporary Services personnel so
assigned are on Temporary Services' payroll and are subject to its
administrative control. The customer retains supervisory control and
responsibility for the performance of the employee's services. As of
December 31, 1995 Temporary Services had approximately 9,000 employees
providing services to customers. The ability of Temporary Services to
locate and hire personnel with capabilities required by customers is
critical to its operations.

Pricing under contracts between Temporary Services and its
customers is based on prevailing hourly rates of pay, and contracts (i)
do not obligate the customer to pay for any fixed number of hours, (ii)
give the customer the right to vary the number of temporary personnel
assigned and (iii) give both the customer and the segment the right to
terminate the contract on short notice. Similarly, Temporary Services
has the right to terminate the employment of its temporary employees
without notice.

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Competition for contracts is based upon price, successful
recruiting of personnel with requisite capabilities and, in numerous
instances, prior experience with customers.

Temporary Services operates through a network of approximately 104
sales and recruiting offices, 30 of which are franchised, situated in
the United States and Canada. Each office is responsible for
determining the potential market for services in its geographic area
and developing that market through personal contact with prospective
and existing customers.

Revenues from both company and franchised offices are reflected in
the segment's revenues. Temporary Services employs all the temporary
personnel, including those recruited by the franchised offices, and
also bears the responsibility for billing services to customers and for
collection of billings. Franchisees are responsible for selling
services to customers, recruiting temporary personnel and their
administrative costs. Franchisees are paid a portion of the gross
profit on their accounts by Temporary Services.

Industry leaders Kelly Services, Manpower and Olsten each has U.S.
annual revenues exceeding $2 billion. Temporary Services competes with
these leaders as well as with a second tier of approximately a dozen
companies in the $100 million to $1 billion revenues range and
additionally with hundreds of companies in regional and local markets.
The Registrant estimates that companies in those categories of the
temporary services industry that it addresses generate annual revenues
of approximately $14 billion.

MANAGEMENT RECRUITERS

The Registrant's Management Recruiters segment is believed by
management to be the nation's largest professional contingency search
and recruiting organization. This segment primarily recruits
management, technical, sales and clerical personnel for permanent
employment positions. Candidates are recruited for many different
capacities including accounting, administrative, data processing,
managerial, personnel, production, research and development, sales,
supervision and technical. Fees are paid only when a candidate is
hired by the customer-employer.

Services are performed solely for employers. The fees paid by the
employers are generally a percentage of the annual compensation to be
paid to the new employee. A fee is earned only after a qualified
candidate has been hired and remains employed for a trial period,
generally 30 days. There is no additional cost for Management
Recruiters' services. Management Recruiters markets its services to
employers through personal and telephone contact, direct mail and
national advertising in newspapers and periodicals.

Management Recruiters also provides professional, executive,
middle management and clerical personnel on a temporary basis with the
objective of permanently placing such personnel with the customer-
employer. Fee schedules are developed to provide for reduced rates on

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permanent placement fees in recognition of the temporary services fees
paid prior to permanent employment. Management Recruiters will provide
these temporary services to customers in situations where eventual
permanent employment is not contemplated. Management Recruiters
employs the temporary personnel.

As of December 31, 1995 Management Recruiters had 586 franchised
offices and 46 company-owned offices throughout the United States,
providing services to both large and small employers in virtually all
industries, including nearly all of the Fortune 1,000 companies. The
broad geographic scope of operations enables franchisees and company-
owned offices to provide nationwide recruiting and matching of
employers with job candidates. The network utilizes an inter-office
referral system on both national and regional levels which enables all
offices to cooperate in fulfilling a customer's requirements.

Franchisees pay an initial fee generally approximating $50,000 to
acquire a franchise. The fee is designed to cover the cost of
establishing and bringing a new franchise into the system. Franchisees
also pay ongoing royalties based on a percentage of the franchisee's
placement fees. Franchisees benefit from Management Recruiters'
expertise in the business, and from its national marketing, public
relations and advertising campaigns. Further, they receive extensive
pre-opening training and start-up assistance on site, such as help in
office location and lease negotiation. Franchisees also have the
rights to use Management Recruiters' trade names, trademarks, the
inter-office referral system, operating techniques, advertising
materials, sales programs, video and live interactive video training
programs, computer programs, manuals and forms.

A large number of companies are engaged in the recruitment
business and Management Recruiters encounters competition from many of
these. Employers commonly offer to more than one company the
opportunity to find qualified candidates for a position making
competition for qualified individuals intense. Management Recruiters'
ability to obtain placements with employers is determined more on its
ability to find qualified candidates than on its fee structure.

EMPLOYEES

At December 31, 1995, the Registrant had approximately 1,700 sales
and administrative staff employees. The Registrant believes that its
relations with its employees are generally good.

Item 2. PROPERTIES.

The Technical Services business segment had approximately 150
facilities throughout the United States, 3 facilities in Canada and 9
facilities overseas, occupying a total of approximately 1.4 million
square feet of space. Approximately 900,000 square feet was

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devoted to in-house technical services and the balance to sales,
marketing and administrative functions. Facilities containing 60,000
square feet were owned. The remaining facilities were leased under
terms generally extending up to five years.

The Temporary Services business segment occupied 130,000 square
feet of office space at approximately 74 locations for its company-
owned temporary services offices. These facilities are leased for
varying terms generally extending up to eight years. Temporary
Services also has 30 franchised offices. Franchisees enter into their
own leases for which the segment assumes no obligation.

The Management Recruiters business segment occupied 100,000 square
feet of office space at 46 locations, primarily for its company-owned
personnel placement offices. These facilities were leased for varying
terms, the majority of which extend up to five years. Management
Recruiters also had 586 franchised offices. Franchisees enter into
their own leases for which the segment assumes no obligation.

The Registrant s corporate headquarters are located in
Philadelphia, Pennsylvania where office space of approximately 40,000
square feet is leased.

Facilities are considered suitable and adequate for present levels
of operation.

Item 3. LEGAL PROCEEDINGS.

Not Applicable.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

Not applicable.

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PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS.

Stock price and other information regarding the Registrant's
common stock is for the years ended December 31, 1995 and 1994. The
Registrant's common stock is traded on the New York Stock Exchange.

1995 1994
------------- -------------
High Low High Low
------ ----- ------ -----
First quarter 26-5/8 18-5/8 14-1/2 10-1/4
Second quarter 26-1/8 19-3/8 15 10-3/8
Third quarter 22-3/4 16-7/8 14-1/8 12-1/4
Fourth quarter 21-1/8 13-1/2 19-7/8 12-7/8

No cash dividends were declared during the years ended December
31, 1995 and 1994. The Company has no present intention of paying cash
dividends during the year ending December 31, 1996.

Shareholders of record on February 21, 1996 numbered 655. The 655
counts each street name account as one shareholder, when, in fact, such
an account may represent multiple owners. Taking into account such
multiple owners, the total number of shareholders approximated 3,500.

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Item 6. SELECTED FINANCIAL DATA.

Following is Selected Financial Data for the years ended December
31, 1995, 1994, 1993, 1992 and 1991. This data, where appropriate, has
been restated to give effect to the Company s plan to discontinue the
operations of the manufacturing technology division of a subsidiary
which serves the automotive market (see footnote to financial
statements for Discontinued Operations). The data presented is in
thousands, except per share data.

1995 1994 1993 1992 1991
--------- --------- ------- ------- -------
Earnings Data
- -------------
Revenues $ 1,270,453 1,012,775 856,974 804,063 719,513

Earnings (loss) from
continuing operations $ 30,663 18,173 10,039 6,159 (5,241)
Discontinued operations (25,524) 4,198 (2,209) (2,712) (2,376)
--------- --------- ------- ------- -------
Net earnings (loss) $ 5,139 22,371 7,830 3,447 (7,617)
========= ========= ======= ======= =======

Earnings per share:
Earnings (loss)
from continuing
operations $ 1.55 .92 .51 .31 (.27)
Discontinued
operations $ (1.29) .21 (.11) (.14) (.12)
Net earnings (loss) $ .26 1.13 .40 .17 (.39)

Cash dividends $ - - - - -

Balance Sheet Data
- ------------------
Total assets $ 328,776 285,859 258,971 241,499 225,740
Long-term debt $ 67,865 58,798 62,021 72,190 67,117
Shareholders' equity $ 145,369 138,877 116,503 108,668 105,132

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Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS.

Discontinued Operations
- -----------------------
At the end of 1995 the Company adopted a plan to sell the
manufacturing technology division of a subsidiary which serves the
automotive market. That division had been a separate line of business
within the Technical Services segment and, accordingly, it has been
classified as a discontinued operation in the Company s reported
results of operations for each of the years reported upon. See the
footnote for Discontinued Operations to the financial statements for a
summary of these operations.

Results of Operations, year ended December 31, 1995 vs. year ended
December 31, 1994
- ------------------------------------------------------------------
Consolidated revenues from continuing operations advanced 25% over
the prior year, and operating profit margins from continuing operations
improved to 4.4% from 3.3% in 1994.

Technical Services revenues from continuing operations, which in
1995 represented 84% of the Company s consolidated revenues from
continuing operations, grew 27% over the prior year. The segment s
non-automotive revenues, which accounted for over 80% of the segments
revenues, advanced 31% over 1994. Among the non-automotive industry
categories served by the segment, telecommunications revenues were up
more than 60% in 1995 over 1994. Aircraft/aerospace, electronics and
chemicals/petrochemicals each grew 30% or more. Automotive revenues
from continuing operations advanced 8%. The segment s profit margins
from continuing operations were 4.3% in 1995 compared with margins from
continuing operations of 3.3% in 1994. Non-automotive activities
contributed to the improvement in margins. Excessive overhead hampered
the profitability of the continuing automotive activities, especially
in the last half of the year.

The segment s strong rate of growth of revenues in many of its
markets in 1995 was due to higher demand oftentimes driven by
outsourcing. In response to this demand, the segment has been
broadening its offerings to include managed staffing, managed computer-
aided-design services and information systems staffing services. Under
the managed staffing and managed computer-aided-design concepts, the
customer turns over responsibility to the segment to provide technical
staffing or to manage an entire technical department. In 1995 managed
staffing and managed computer-aided-design services provided revenues
of over $200 million, up from approximately $100 million in 1994.
Information systems services revenues were approximately $100 million
in 1995, up from approximately $50 million in 1994.

Each of the Technical Services segment s many contracts is
individually price negotiated, and as a result the price-to-direct cost
mix is constantly changing. Its cost structure is generally variable.
In periods of substantial increases in revenues, such as in 1995 and

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1994, operating profit margins can widen because the segment can take
advantage of certain economies of scale in its support cost structure.
Conversely, in periods of decline in demand, operating results can
deteriorate quickly because realization of cost savings typically lags
implementation of downsizing and cost reduction programs. The segment
will continue to invest in computer-aided-design as well as business
computer systems.

The Company s Temporary Services segment operates under the name
of Todays Temporary. The segment s revenues, which in 1995 represented
11% of the Company s consolidated revenues, grew 17% over the prior
year. Operating profit margins for Temporary Services were 5.1% in
1995 compared with 4.1% in 1994. Several managed staffing contracts
helped boost Temporary Services revenues in 1995. The Temporary
Services segment is not capital intensive.

Management Recruiters revenues, which in 1995 represented 5% of
consolidated revenues, grew 27% over the prior year. Operating profit
margins for Management Recruiters were 15.0% in 1995 compared with
13.8% in 1994. Management Recruiters participated in the outsourcing
trend with new broad-based contracts with several of its long-time
customers. The segment is generally not price sensitive and it is not
capital intensive.

The Company is in the process of terminating operations of a small
portion of the discontinued business and is discussing the sale of the
remainder of the discontinued business with several potential buyers.
Third quarter 1995 losses from discontinued operations included a
receivables reserve of approximately $3 million. This reserve
represented reductions in anticipated values of certain unbilled
receivables and did not relate to customers inability to pay. Fourth
quarter 1995 losses from discontinued operations included a reserve of
$23 million ($16 million after taxes) for estimated losses on
terminating and selling the discontinued business and for estimated
losses from operations of the discontinued business from the beginning
of 1996 until the estimated dates of final termination or sale.

Results of Operations, year ended December 31, 1994 vs. year ended
December 31, 1993
- ------------------------------------------------------------------
Consolidated revenues from continuing operations advanced 18% over
the prior year, and operating profit margins on revenues improved to
3.3% from 2.2% in 1993.

Technical Services segment revenues, which in 1994 represented 83%
of the Company's consolidated revenues, grew 18% over the prior year.
Operating profit margins for Technical Services were 3.3% in 1994
compared with 2.6% in 1993. The growth of revenues was due to strong
demand in most of the industrial markets served by the segment.
Revenues in the automotive and telecommunications markets were well
ahead of a year ago, as were aircraft/aerospace, electronics and
power/energy. Demand in the chemical/petrochemicals markets, however,
fell somewhat short of a year ago. An important impetus for growth in
Technical Services was a continued rise in and acceptance of the
concept of outsourcing.

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Temporary Services segment revenues, which in 1994 represented 12%
of the Company's consolidated revenues, grew 8% over the prior year.
Operating profit margins for Temporary Services were 4.1% in 1994
compared with 1.8% in 1993. The segment improved its performance with
better margins and cost containment following the integration of the
old CDI Temporary Services branches into the Todays operations network.

Management Recruiters' revenues, which in 1994 represented 5% of
consolidated revenues, grew 58% over the prior year. Operating profit
margins for Management Recruiters were 13.8% in 1994 compared with
11.6% in 1993. Management Recruiters' new product offerings, including
a temporary middle manager service and a temporary office/clerical
service, gave this segment a boost in revenues over and above
improvements in its traditional middle management search business.

Inflation
- ---------
The Technical Services and Temporary Services business segments'
services are priced generally in close relationship with direct labor
costs. Management Recruiters' middle management search services are
priced as a function of salary levels of job candidates. In recent
years inflation has not been a meaningful factor.

Liquidity and Capital Resources
- -------------------------------
Expansions and contractions in the levels at which the Company's
businesses operate directly affect consolidated working capital, which
in turn has a direct relationship to total capital employed because of
the high concentration of total assets represented by current assets.
Working capital increased in 1995 primarily because of the higher
levels of business at which the Company was operating. The ratio of
current assets to current liabilities was 2.5 to 1 as of December 31,
1995 and 1994 and 2.4 to 1 as of December 31, 1993.

The Company's main sources of liquidity have been from operations
and from borrowings, including a revolving credit agreement and
short-term lines of credit with banks. The revolving credit agreement
provides for borrowings of up to $100 million. Long-term borrowings
outstanding under all agreements at December 31, 1995 were $68 million.
Considering the most restrictive of the limitations placed on bank
borrowings by the agreements, the available borrowing capacity to the
Company under the revolving credit agreement (using borrowings
outstanding as of December 31, 1995) was $54 million. These sources
have been adequate to support growth opportunities in the Company's
businesses. The consolidated ratio of long-term debt to total capital
(long-term debt plus shareholders' equity) was 32% as of December 31,
1995 compared with 30% as of December 31, 1994 and 35% as of December
31, 1993.

Current assets represent a high portion of consolidated total
assets. An important source of liquidity is the Company's large
current asset position with its concentration of highly liquid
receivables. This source could be tapped voluntarily by reducing the
volume of business accepted, thereby turning a portion of working

15

capital into cash. Similarly, when the Company's business levels
contract, such as during periods of economic decline, a portion of
working capital is turned into cash. The Company believes that the
public and private debt and equity markets would be currently available
as sources of additional capital.

During 1996, as it phases out and disposes of its discontinued
operations, the Company expects to realize net proceeds of
approximately $18 million. To the extent that proceeds are realized in
cash, the Company intends to use such proceeds to pay down long-term
debt.

New Accounting Standards
- ------------------------
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be
Disposed Of ( Statement 121"), which requires companies to review long-
lived assets and certain identifiable intangibles to be held, used or
disposed of, for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
The Company has adopted Statement 121, which had no significant effect
on the financial statements.

In October 1995, the Financial Accounting Standards Board issued
Statement No. 123, Accounting for Stock-Based Compensation, which is
effective beginning in 1996. This statement encourages the fair value
based method of accounting for stock options and similar equity
instruments granted to employees. This method requires that the fair
value of equity instruments granted to employees be recorded as
compensation expense. However, the statement allows companies to
continue to use the intrinsic value based method which, in most cases,
does not result in a charge to earnings. The Company will not adopt
the fair value based method of accounting for stock options. However,
if the fair value based method of accounting were applied to grants of
stock options in 1995, the effect would not be material.

16

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

CDI CORP. AND SUBSIDIARIES
Consolidated Statements of Earnings
Years ended December 31, 1995, 1994 and 1993
(In thousands, except per share data)

1995 1994 1993
--------- --------- -------
Revenues $ 1,270,453 1,012,775 856,974

Cost of operations 1,166,064 936,573 800,356
--------- --------- -------
Gross profit 104,389 76,202 56,618

General and administrative expenses 48,552 42,945 38,007
--------- --------- -------
Operating profit 55,837 33,257 18,611

Interest expense 4,454 3,107 2,945
--------- --------- -------
Earnings from continuing operations
before income taxes and minority
interests 51,383 30,150 15,666

Income taxes 20,600 11,946 5,620
--------- --------- -------
Earnings from continuing operations
before minority interests 30,783 18,204 10,046

Minority interests 120 31 7
--------- --------- -------
Earnings from continuing operations 30,663 18,173 10,039

Discontinued operations (25,524) 4,198 (2,209)
--------- --------- -------
Net earnings $ 5,139 22,371 7,830
========= ========= =======

Earnings per share:
Earnings from continuing
operations $ 1.55 .92 .51
Discontinued operations $ (1.29) .21 (.11)
Net earnings $ .26 1.13 .40

See accompanying notes to financial statements.

17

CDI CORP. AND SUBSIDIARIES
Consolidated Statements of Retained Earnings
Years ended December 31, 1995, 1994 and 1993
(In thousands)

1995 1994 1993
------- ------- -------
Balance at beginning of year $ 126,132 103,761 95,931

Net earnings 5,139 22,371 7,830
------- ------- -------
Balance at end of year $ 131,271 126,132 103,761
======= ======= =======

See accompanying notes to financial statements.

18

CDI CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1995 and 1994
(In thousands, except share data)

Assets 1995 1994
- ------ ------- -------
Current assets:
Cash $ 4,490 5,155
Accounts receivable, less allowance for
doubtful accounts of $4,059-1995;
$2,966-1994 235,445 171,053
Prepaid expenses 4,587 3,987
Deferred income taxes 9,280 378
Net assets of discontinued operations 18,011 32,027
------- -------
Total current assets 271,813 212,600

Fixed assets, at cost:
Land 764 807
Buildings 3,846 3,834
Computers 53,016 45,434
Equipment and furniture 31,444 31,005
Leasehold improvements 12,211 11,355
------- -------
101,281 92,435
Accumulated depreciation 70,804 67,659
------- -------
Net fixed assets 30,477 24,776

Net assets of discontinued operations - 21,085
Deferred income taxes 4,418 3,118
Goodwill and other intangible assets 16,605 18,255
Other assets 5,463 6,025
------- -------
$ 328,776 285,859
======= =======

19

CDI CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
December 31, 1995 and 1994
(In thousands, except share data)

Liabilities and Shareholders' Equity 1995 1994
- ------------------------------------ ------- -------
Current liabilities:
Obligations not liquidated because of
outstanding checks $ 9,644 6,733
Accounts payable 8,179 7,112
Withheld payroll taxes 1,569 5,565
Accrued compensation and related costs 52,102 42,360
Other accrued expenses 17,167 12,548
Currently payable income taxes 21,417 10,033
------- -------
Total current liabilities 110,078 84,351

Long-term debt 67,865 58,798
Deferred compensation 5,039 3,528
Minority interests 425 305

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 19,845,483 shares - 1995;
19,739,983 shares - 1994 1,985 1,974
Class B common stock, $.10 par value -
authorized 3,174,891 shares; none
issued - -
Additional paid-in capital 12,703 11,361
Retained earnings 131,271 126,132
Less common stock in treasury, at cost -
25,055 shares (590) (590)
------- -------
Total shareholders' equity 145,369 138,877
------- -------
$ 328,776 285,859
======= =======

See accompanying notes to financial statements.

20

CDI CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended December 31, 1995, 1994 and 1993
(In thousands)

1995 1994 1993
------ ------ ------
Continuing Operations
Operating activities:
Earnings from continuing operations $ 30,663 18,173 10,039
Minority interests 120 31 7
Depreciation 10,600 9,064 9,670
Amortization of intangible assets 1,835 1,997 2,664
Income tax provision greater (less)
than tax payments 1,182 1,828 (323)
Change in assets and liabilities
net of effects from acquisitions:
(Increase) in accounts receivable (64,392) (33,038) (4,211)
Increase in payables and accrued
expenses 11,432 17,823 468
Other (159) 373 848
------ ------ ------
(8,719) 16,251 19,162
------ ------ ------
Investing activities:
Purchases of fixed assets (16,690) (10,041) (9,028)
Acquisitions net of cash acquired (103) (198) (4,070)
Other 1,924 1,817 (2,168)
------ ------ ------
(14,869) (8,422) (15,266)
------ ------ ------
Financing activities:
Borrowings long-term debt 9,136 - 16,128
Payments long-term debt (69) (19,223) (11,324)
Obligations not liquidated
because of outstanding checks 2,911 2,695 243
Exercises of stock options 1,353 - -
------ ------ ------
13,331 (16,528) 5,047
------ ------ ------
Net cash flows from continuing
operations (10,257) (8,699) 8,943
Net cash flows from discontinued
operations 9,592 (6,502) 5,175
------ ------ ------
Increase (decrease) in cash (665) (15,201) 14,118
Cash at beginning of year 5,155 20,356 6,238
------ ------ ------
Cash at end of year $ 4,490 5,155 20,356
====== ====== ======

See accompanying notes to financial statements.

21

CDI CORP. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

Significant Accounting Policies
- -------------------------------
Principles of Consolidation - The consolidated financial statements
include the accounts of the Company and all majority-owned subsidiaries
after elimination of intercompany balances and transactions.

Discontinued Operations - As disclosed in the footnote for Discontinued
Operations, the Company adopted a plan to dispose of the manufacturing
technology division of a subsidiary. As a result, all financial
information has been restated to reflect these discontinued operations.

Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Fixed Assets - Depreciation of fixed assets is provided generally on
the straight-line method at rates calculated to provide for retirement
of assets at the end of their estimated useful lives. The annual rates
generally used are 3-1/3% for buildings, 25% for computers, 10% to 25%
for equipment and furniture and the lesser of the life of the lease or
asset for leasehold improvements.

Goodwill and Other Intangible Assets - The net assets of subsidiaries
acquired, which were accounted for as purchases, have been reflected at
their fair values at dates of acquisition. The excess of acquisition
costs over such net assets is reflected in the consolidated balance
sheets as goodwill - $13,634,000 at December 31, 1995 and $14,240,000
at December 31, 1994. Goodwill of $10,861,000 at December 31, 1995 and
$11,467,000 at December 31, 1994 is being amortized on the straight-
line method over two to forty years. Amortization for goodwill in 1995
and 1994 was $697,000 and $703,000, respectively, resulting in
accumulated amortization of $4,467,000 as of December 31, 1995 and
$3,758,000 as of December 31, 1994.

Other intangible assets, primarily arising in conjunction with
acquisitions, include agreements with individuals not to enter into
competing businesses with the Company, the value for an established
customer base and the value for acquired temporary services franchise
arrangements. Other intangible assets of $2,971,000 and $4,015,000
were recorded at December 31, 1995 and 1994, respectively, and are
being amortized on the straight-line method over two to twelve years.
Amortization for other intangible assets in 1995 and 1994 was
$1,138,000 and $1,294,000, respectively, resulting in accumulated
amortization of $4,208,000 as of December 31, 1995 and $3,308,000 as of
December 31, 1994.

22

Obligations Not Liquidated Because of Outstanding Checks - The Company
manages its levels of cash in banks to minimize its cash balances.
Cash balances as reflected by banks are always higher than the
Company's book balances because of checks in float throughout the
banking system. Cash is generally not provided to accounts until
checks are presented for payment. The differences in balances created
by this float result in negative cash balances in the Company's
records. These negative balances are reflected in current liabilities
as Obligations Not Liquidated Because of Outstanding Checks.

Income Taxes - The Company and its wholly-owned U.S. subsidiaries file
a consolidated federal income tax return. Deferred income taxes are
recorded for taxes estimated to be payable in future years based upon
differences between the financial reporting and tax bases of assets and
liabilities and for operating loss carryforwards. Deferred tax assets
and liabilities are determined using enacted tax rates expected to
apply to taxable income in the years the temporary differences are
expected to be recovered or settled.

Fair Value of Financial Instruments - The carrying value of financial
instruments approximates fair value. The Company's financial
instruments are accounts receivable, accounts payable and long-term
debt. The Company does not have any off-balance sheet financial
instruments or derivatives.

Per Share Data - For the years ended December 31, 1995, 1994 and 1993,
earnings per share of common stock are based on the weighted average
number of shares of common stock and dilutive common share equivalents
(which arise from stock options) outstanding during the years. No
further dilution resulted from a computation of fully diluted earnings
per share. The number of shares used to compute earnings per share was
19,830,850, 19,778,980 and 19,728,401 for the years ended December 31,
1995, 1994 and 1993, respectively.

New Accounting Standards - In March 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No.
121, Accounting for the Impairment of Long-Lived Assets and for Long-
Lived Assets to Be Disposed Of ( Statement 121"), which requires
companies to review long-lived assets and certain identifiable
intangibles to be held, used or disposed of, for impairment whenever
events or changes in circumstances indicate that the carrying amount of
an asset may not be recoverable. The Company has adopted Statement 121
which had no significant effect on the financial statements.

In October 1995, the Financial Accounting Standards Board issued
Statement No. 123, Accounting for Stock-Based Compensation, which is
effective beginning in 1996. This statement encourages the fair value
based method of accounting for stock options and similar equity
instruments granted to employees. This method requires that the fair
value of equity instruments granted to employees be recorded as
compensation expense. However, the statement allows companies to
continue to use the intrinsic value based method which, in most cases,
does not result in a charge to earnings. The Company will not adopt
the fair value based method of accounting for stock options. However,
if the fair value based method of accounting were applied to grants of
stock options in 1995, the effect would not be material.

23

Acquisitions
- ------------
During the year ended December 31, 1995 the Company invested
$103,000 to acquire an operation in Technical Services. Goodwill equal
to the investment is being amortized on the straight-line method over
two years.

During the year ended December 31, 1994 there were investments
totalling $198,000 that relate to an acquisition in a prior year and to
the acquisition of the minority interests in a subsidiary. Goodwill
relating to these subsidiaries increased by $198,000.

During the year ended December 31, 1993 the Company made an
acquisition in Technical Services. Cash aggregating $4,070,000 was
invested. The acquisition was accounted for using the purchase method.
Assets (including goodwill of $1,182,000) of $7,133,000 were acquired
along with liabilities of $3,063,000. Goodwill is being amortized on
the straight-line method over twenty years. The consolidated
statements of earnings include the results of operations for the
acquired company from date of acquisition. The acquisition did not
have a significant effect upon reported earnings for the year ended
December 31, 1993 and earnings for 1993 would not have been
significantly different than reported had the acquisition occurred
January 1, 1993.

Accounts Receivable
- -------------------
The Company's principal asset is accounts receivable. Receivables
arise from services provided pursuant to contracts or agreements with
customers for such services. Historically, losses due to customers'
inability to comply with the payment terms of their contracts or
agreements with the Company have not been significant. The primary
users of the Company's services are large U.S. based industrial and
commercial concerns, many of which are Fortune 500 companies, and the
U.S. Government.

Accounts receivable as of December 31, 1995 for Technical
Services, Temporary Services and Management Recruiters were
$210,780,000, $18,310,000 and $6,082,000, respectively, and as of
December 31, 1994 were $153,330,000, $13,283,000 and $4,440,000,
respectively. Receivables from the automotive industry comprised
approximately 25% of consolidated receivables as of December 31, 1995
and approximately 35% as of December 31, 1994. Additionally,
receivables from the aircraft/aerospace, chemicals/petrochemicals,
electronics and telecommunications industries each comprised
approximately 15% of consolidated receivables as of December 31, 1995
and each approximately 10% as of December 31, 1994. It is not Company
or industry practice to require collateral or other security because of
the nature of the customer base involved.

24

Long-term Debt
- --------------
Long-term debt at December 31, 1995 and 1994 was as follows
($000s):

1995 1994
------ ------
Notes payable to banks under revolving
credit agreement with interest at
6-1/8%-1995; 6-3/8%-1994 $ 46,000 48,000
Notes payable to banks under short-term
lines of credit with interest at 6-1/8%-
1995; 6-5/8%-1994 20,000 10,000
Other 1,865 798
------ ------
$ 67,865 58,798
====== ======

A revolving credit agreement with a syndicate of banks provides
for borrowings up to $100 million. Borrowings outstanding at March 31,
1998 may be converted into term debt which would mature in quarterly
installments payable over four years. There was an initial one-time
fee paid equal to 1/8% of the banks' commitments and there is an annual
facility fee equal to 3/10% of the banks' commitments. Interest rate
alternatives are available whereby the Company can elect to have
interest be at either (i) rates quoted competitively by the syndicate
banks on a transactional basis with borrowings awarded to the lowest
bidder(s), (ii) rates quoted on the Interbank Eurodollar Market
("LIBOR") (adjusted for reserve requirements) plus a LIBOR margin that
can range from 1/2% to 1-1/2% depending upon the ratio of all of the
Company's borrowings to its cash flow, or (iii) rates determined by the
greater of either (a) the prime rate or (b) the overnight Federal Funds
rate plus 1/2%. The ratio for the LIBOR margin is determined each
quarter using borrowings outstanding at the end of the quarter and cash
flow for the four quarters then ended. The resulting ratio is used to
determine the applicable LIBOR Margin for the ensuing quarter.

Uncommitted short-term lines of credit with five banks are also
available under which interest rates are quoted on a transactional
basis and are related to the banks' costs of funds.

All borrowings at December 31, 1995 are classified long-term
because the Company intends to finance maturities as they become due
with borrowings under the revolving credit agreement. As of December
31, 1995 borrowings scheduled to mature in 1996 were $21,822,000, with
$16,000 due in 1997, $8,637,000 due in 1998, $11,512,000 due in 1999
and $11,503,000 due in 2000.

The revolving credit agreement places limitations on certain
transactions that include acquisition by the Company of its securities,
payment of cash dividends and investments in other businesses. In
addition, the credit agreement includes certain other requirements. A
consolidated current ratio of at least 1.5 is to be maintained.
Consolidated tangible net worth (total shareholders' equity less

25

goodwill and other intangible assets) shall be at least $70 million
plus 35% of consolidated net earnings after December 31, 1992
($82,369,000 as of December 31, 1995). If interest coverage (ratio of
operating profit to interest expense using the most recent four
quarters) is less than 1 to 1, the tangible net worth requirement is
increased by $5 million. The ratio of consolidated indebtedness for
borrowings to total capital (sum of consolidated current and long-term
debt, non-current deferred income taxes, minority interests and
tangible net worth) shall not exceed .60. The Company was in
compliance with the terms of the credit agreement through December 31,
1995.

Capital Stock
- -------------
Common stock and Class B common stock have equal rights except that
dividends, other than stock dividends, may be declared and paid on
common stock in excess of amounts declared and paid on Class B common
stock. The Class B common stock is convertible on a share-for-share
basis into common stock and Class B shares so converted shall be
cancelled.

At December 31, 1995, 983,250 shares of common stock were reserved
for issuance under the non-qualified stock option and stock appreciation
rights plan.

During the year ended December 31, 1995, 105,500 shares of common
stock were issued pursuant to the exercise of stock options under the
Company s non-qualified stock option and stock appreciation rights plan.
The issuance of these shares increased common stock by $11,000 and
additional paid-in capital by $1,342,000.

During the years ended December 31, 1994 and 1993, 100 shares and
200 shares, respectively, of common stock held in treasury were
reissued. These shares had a cost of $3,000 and $5,000, respectively.

Stock Plan
- ----------
Under the terms of a non-qualified stock option and stock
appreciation rights plan, options and stock appreciation rights to
purchase an aggregate of 983,250 shares of common stock may be granted
separately or in tandem to salaried employees, consultants and
directors. Stock appreciation rights may also be granted with respect
to outstanding options. Grants under the plan, except for grants to
certain directors who are not full-time employees and whose retainer
fees are paid in whole or in part via stock options, are determined by a
stock option committee appointed by the board of directors. Stock
options granted to directors in lieu of payment of fees in cash are not
significant. The price at which options or stock appreciation rights
may be exercised shall not be less than 50% of the market value per
share of the Company's common stock on the date of grant and, unless
otherwise determined by the committee, options or rights granted under
the plan shall not be exercised after five years from date of grant.

26

The plan permits optionees to purchase stock via cash payment, the
delivery of shares of the Company's common stock in lieu of cash, or a
combination of both. Upon the exercise of stock appreciation rights,
the recipient of such rights will receive an amount equal to the excess
of the then market price of the shares subject to the rights over the
exercise price of the rights. The amount of such excess is payable
one-half in cash and one-half in shares of the common stock of the
Company, valued at the then market price. The exercise of one
alternative by a holder of a tandem grant also reduces the number of
shares then exercisable with respect to the other alternative.

During the years ended December 31, 1995, 1994 and 1993 options
were granted to purchase 36,700 shares, 107,000 shares and 200,000
shares, respectively, at average option prices per share of $19.04,
$15.06 and $10.38, respectively. All such options granted have option
prices equal to the per share market price of the Company s common on
the dates of grant. Therefore, no compensation cost was recognized for
any of these options granted. No stock appreciation rights were granted
during any of these years.

During the year ended December 31, 1995, stock options were
exercised for 105,500 shares at an average option price of $9.70. No
options were exercised during the years ended December 31, 1994 and
1993. No stock appreciation rights were exercised during the years
ended December 31, 1995, 1994 and 1993.

During the years ended December 31, 1995, 1994 and 1993 stock
options lapsed or were forfeited for 128,000 shares, 8,000 shares and
8,000 shares, respectively, which had average option prices per share of
$10.58, $6.75 and $6.75, respectively.

At December 31, 1995, 1994, 1993 and 1992 options were outstanding
to purchase 154,200, 351,000, 252,000 and 60,000 shares of common stock,
respectively, at average prices of $14.88, $11.32, $9.59 and $6.58 per
share, respectively. Options to purchase 40,250 shares, 113,333 shares
and 106,667 shares were exercisable at December 31, 1995, 1994 and 1993,
respectively, at average prices of $11.60, $9.12 and $9.30,
respectively. No stock appreciation rights were outstanding as of
December 31, 1995, 1994 or 1993.

27

Income Taxes
- ------------
The provision for income taxes relating to continuing operations
for the years ended December 31, 1995, 1994 and 1993 was comprised of
the following ($000s):

Total Federal State Foreign
------- ------- ------ -------
1995
- ----
Current $ 30,478 25,745 4,279 454
Deferred (10,207) (8,795) (1,413) 1
Benefits for stock option
exercises credited to
additional paid-in
capital 329 327 2 -
------ ------ ----- -----
$ 20,600 17,277 2,868 455
====== ====== ===== =====
1994
- ----
Current $ 12,749 10,791 1,475 483
Deferred (803) (377) (422) (4)
------ ------ ----- -----
$ 11,946 10,414 1,053 479
====== ====== ===== =====
1993
- ----
Current $ 10,538 9,492 980 66
Deferred (4,918) (4,383) (515) (20)
------ ------ ----- -----
$ 5,620 5,109 465 46
====== ====== ===== =====

The tax effects of the principal components creating net deferred
income tax assets as of December 31, 1995 and 1994 were as follows
($000s):
1995 1994
------ ------
Components creating deferred tax liabilities
Deferral of revenues and accounts receivable $ 4,312 10,698
Other 1,489 1,238
------ ------
5,801 11,936
Components creating deferred tax assets
Expenses accrued not currently deductible (16,474) (12,651)
Intangible assets amortization (1,640) (1,300)
Basis differences for fixed assets (925) (643)
Other (221) (316)
Carryforwards, primarily operating losses (438) (1,041)
------ ------
(19,698) (15,951)
Valuation allowances 199 519
------ ------
$(13,698) (3,496)
====== ======

28

The net change in the valuation allowances for the years ended
December 31, 1995 and 1994 was a decrease of $320,000 and $420,000,
respectively.

The effective income tax rates relating to continuing operations
for the years ended December 31, 1995, 1994 and 1993 differed from the
federal rate as follows:

1995 1994 1993
---- ---- ----
Federal rate 35% 35% 34%
State income taxes 4% 2% 2%
Expenses permanently nondeductible
for tax purposes 1% 2% 1%
Other - 1% (1%)
--- --- ---
Effective income tax rate 40% 40% 36%
=== === ===

Certain subsidiaries have operating loss carryforwards for tax
purposes the realization of which is dependent upon the respective
subsidiaries having sufficient taxable income in future years to use the
carryforwards. At December 31, 1995 for federal income tax purposes,
these carryforwards aggregated approximately $400,000 and expire in
varying amounts from 2002 through 2008. The tax benefits of
approximately $100,000 of these carryforwards reduce goodwill and have
been recognized for financial reporting purposes. Tax benefit relating
to the remaining $300,000 have been recognized for financial reporting
purposes.

At December 31, 1995 for state income tax purposes, there were
operating loss carryforwards aggregating approximately $3,800,000
expiring in varying amounts from 1996 through 2009. Benefits relating
to approximately $1,400,000 have been recognized for financial reporting
purposes. Benefits for the remaining $2,400,000 have not been
recognized and are included in the valuation allowance as of December
31, 1995.

Retirement Plans
- ----------------
Trusteed contributory and non-contributory defined contribution
retirement plans have been established for the benefit of eligible
employees. Costs of the plans are charged to earnings and are based on
either a formula using a percentage of compensation or an amount
determined by the board of directors of a company limited to the amount
allowable for Federal income tax purposes. Costs are funded as accrued.
Charges to earnings for contributions to these retirement plans for the
years ended December 31, 1995, 1994 and 1993 were $2,337,000, $1,813,000
and $1,637,000, respectively.

Except for retirement plans, the Company provides no other
postretirement benefits. Further, the Company does not provide
postemployment benefits.

29

Leases
- ------
Offices used for sales, recruiting and administrative functions and
facilities used for in-house engineering, design and drafting are
occupied under numerous leases which expire through 2010. In addition,
there are leases for computers and office equipment. Rentals under all
leases for the years ended December 31, 1995, 1994 and 1993 were
$18,875,000, $16,812,000 and $16,735,000, respectively.

For periods after December 31, 1995, approximate minimum annual
rentals under non-cancellable leases aggregate $47,130,000 with rentals
of $15,173,000 due in 1996, $10,297,000 due in 1997, $6,054,000 due in
1998, $4,554,000 due in 1999 and $2,901,000 due in 2000.

Business Segments
- -----------------
Business segment data for the years ended December 31, 1995, 1994
and 1993 follows ($000s):

Technical Services - This segment provides principally technical
staffing supplying supplemental engineering, technical and information
services personnel to a broad range of customers.

Temporary Services - This segment provides temporary office,
clerical and support personnel services to a broad range of commercial
customers.

Management Recruiters - This segment provides principally a search
and recruiting service for permanent employment of management,
technical, sales and clerical personnel and a range of management
staffing services through several specialized divisions.

1995 1994 1993
--------- --------- -------
Revenues
- --------
Technical Services $ 1,062,045 839,245 712,128
Temporary Services 141,779 121,180 111,739
Management Recruiters 66,629 52,350 33,107
--------- --------- -------
$ 1,270,453 1,012,775 856,974
========= ========= =======
Operating profit
- ----------------
Technical Services $ 45,322 27,764 18,459
Temporary Services 7,174 5,002 2,015
Management Recruiters 9,993 7,240 3,856
Corporate expenses (6,652) (6,749) (5,719)
--------- --------- -------
$ 55,837 33,257 18,611
========= ========= =======

30

1995 1994 1993
--------- --------- -------
Identifiable assets
- -------------------
Technical Services $ 263,974 195,677 165,418
Temporary Services 30,418 22,924 23,033
Management Recruiters 11,961 8,390 5,585
Corporate 4,412 5,756 21,936
--------- --------- -------
310,765 232,747 215,972
Net assets of discontinued
operations 18,011 53,112 42,999
--------- --------- -------
$ 328,776 285,859 258,971
========= ========= =======
Capital additions
- -----------------
Technical Services $ 12,834 8,677 7,919
Temporary Services 3,065 557 457
Management Recruiters 696 733 434
Corporate 95 74 218
--------- --------- -------
$ 16,690 10,041 9,028
========= ========= =======
Depreciation expense
- --------------------
Technical Services $ 9,221 7,876 8,544
Temporary Services 784 582 548
Management Recruiters 512 483 505
Corporate 83 123 73
--------- --------- -------
$ 10,600 9,064 9,670
========= ========= =======

For the year ended December 31, 1993 Technical Services had a
customer that provided revenues equal to 10% of consolidated revenues.

Discontinued Operations
- -----------------------
On December 28, 1995 the Company adopted a plan to sell the
manufacturing technology division of a subsidiary which serves the
automotive market. The division had been a separate line of business
within the Company s Technical Services segment and now has been
classified as a discontinued operation in the Company s reported results
for the current as well as prior periods.

The Company is in the process of terminating operations of a small
portion of the discontinued business and is discussing the sale of the
remainder of the business with several potential buyers. All activities
related to the discontinuance are expected to be concluded within a year
from the adoption of the plan to discontinue.

31

Summary results of the discontinued operation for the years ended
December 31, 1995, 1994 and 1993 are as follows ($000s):

1995 1994 1993
------ ------ ------
Revenues $ 65,588 84,824 64,318

Operating profit (loss) $(13,525) 7,669 (2,257)
Interest expense 1,007 1,004 782
------ ------ ------
Earnings (loss) before
income taxes (14,532) 6,665 (3,039)
Income taxes (4,966) 2,467 (830)
------ ------ ------
Earnings (loss) before
provisions for estimated
operating losses during
phase-out period and
estimated losses on
disposal of operation (9,566) 4,198 (2,209)
Estimated losses during phase-
out period, net of income
tax benefit of $(1,991) (3,698) - -
Estimated losses on disposal
of operation, net of income
tax
benefit of $(4,696) (12,260) - -
------ ------ ------
Earnings (loss) discontinued
operations $(25,524) 4,198 (2,209)
====== ====== ======

The assets held as of December 31, 1995 have been written down by
$12.3 million after taxes to estimated net realizable value and
provisions have been made for estimated losses of $3.7 million after tax
during the phase-out period, for a total of $16.0 million. The after-
tax effect of these losses and provisions relates to working capital
($8.1 million), fixed assets ($4.4 million) and goodwill ($3.5 million).
Further, as a result of a significant reduction in the level of
activities of the discontinued operation during the second half of 1995,
independent of the adoption of the plan at the end of 1995 to
discontinue, a substantial amount of working capital was liquidated in
the ordinary course of business. Summary balance sheet accounts of the
discontinued operation as of December 31, 1995 and 1994 are as follows
($000s):
1995 1994
------ ------

Working capital $ 4,236 32,027
Net fixed assets 12,382 18,277
Goodwill - 3,793
Other assets 9 9
Deferred taxes relating
to fixed assets 1,384 (994)
------ ------
$ 18,011 53,112
====== ======

32

Interest expense was allocated to the discontinued operation based
upon its proportionate share of consolidated net assets during each of
the years.

Contracts with customers for the discontinued operation were
primarily fixed price based. Accordingly, revenues were recognized
using the percentage of completion method of accounting.

Effective income tax rates for the discontinued operation differed
from the federal statutory rate because of expenses permanently non-
deductible for tax purposes.

Legal Proceedings and Claims
- ----------------------------
There are litigation and other claims pending which arise in the
ordinary course of business. There are substantive defenses and/or
insurance available such that the outcome of these items should not have
a material adverse effect on the financial condition or results of
operations of the Company.

33

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders of CDI Corp.:

We have audited the accompanying consolidated balance sheets of CDI
Corp. and subsidiaries as of December 31, 1995 and 1994 and the related
consolidated statements of earnings, retained earnings and cash flows
for each of the years in the three-year period ended December 31, 1995.
In connection with our audits of the consolidated financial statements,
we also have audited the related financial statement schedule listed
under the heading "Financial statement schedules" on page 35. These
consolidated financial statements and financial statement schedule are
the responsibility of the Company's management. Our responsibility is
to express an opinion on these financial statements and financial
statement schedule based on our audits.

We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of CDI Corp. and subsidiaries as of December 31, 1995 and 1994 and the
results of their operations and their cash flows for each of the years
in the three-year period ended December 31, 1995, in conformity with
generally accepted accounting principles. Also in our opinion, the
related financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.

February 26, 1996 /s/ KPMG PEAT MARWICK LLP
1600 Market Street ---------------------------------
Philadelphia, PA 19103 KPMG Peat Marwick LLP

34

CDI CORP. AND SUBSIDIARIES
Quarterly Earnings
Years ended December 31, 1995 and 1994
(In thousands, except per share data)

First Second Third Fourth
Quarter Quarter Quarter Quarter Year
------- ------- ------- ------- ---------
1995
- ----
Revenues $ 292,439 312,526 331,485 334,003 1,270,453
Gross profit 23,106 26,440 28,359 26,484 104,389
Operating profit 11,688 14,527 16,240 13,382 55,837
Interest expense 1,073 1,272 1,059 1,050 4,454
Earnings from
continuing
operations 6,329 7,847 8,872 7,615 30,663
Discontinued
operations 811 (86) (5,732) (20,517) (25,524)
Net earnings $ 7,140 7,761 3,140 (12,902) 5,139

Per share:
Earnings from
continuing
operations $ .32 .40 .45 .38 1.55
Discontinued
operations $ .04 - (.29) (1.03) (1.29)
Net earnings $ .36 .39 .16 (.65) .26

1994
- ----
Revenues $ 229,254 244,835 265,940 272,746 1,012,775
Gross profit 16,143 17,421 21,301 21,337 76,202
Operating profit 6,105 6,566 10,211 10,375 33,257
Interest expense 738 674 807 888 3,107
Earnings from
continuing
operations 3,159 3,404 5,502 6,108 18,173
Discontinued
operations 785 1,057 1,130 1,226 4,198
Net earnings $ 3,944 4,461 6,632 7,334 22,371

Per share:
Earnings from
continuing
operations $ .16 .17 .28 .31 .92
Discontinued
operations $ .04 .05 .06 .06 .21
Net earnings $ .20 .23 .34 .37 1.13

35

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE.

Not applicable.

PART III

Part III of this form is omitted by the Registrant since it will
file with the Commission a definitive proxy statement pursuant to
Regulation 14A involving the election of directors not later than 120
days after the close of the fiscal year.

PART IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.

(a) Documents filed as part of this report

Financial statements
The consolidated balance sheets of the Registrant as of
December 31, 1995 and 1994, the related consolidated
statements of earnings, retained earnings and cash flows
for each of the years ended December 31, 1995, 1994 and
1993, the footnotes thereto and the report of KPMG Peat
Marwick LLP, independent auditors, are filed herein.

Financial statement schedules
Schedule submitted for the years ended December 31, 1995,
1994 and 1993.
II - Valuation and Qualifying Accounts

36

(b) Registrant has not filed a Form 8-K during the quarter ended
December 31, 1995.

(c) Exhibits

3.(i) Articles of incorporation of the Registrant,
incorporated herein by reference to the
Registrant's report on Form 10-Q for the quarter
ended June 30, 1990 (File No. 1-5519).

(ii) Bylaws of the Registrant, incorporated herein by
reference to the Registrant's report on Form 10-Q
for the quarter ended June 30, 1990 (File No.
1-5519).

10.a. CDI Corp. Non-Qualified Stock Option and Stock
Appreciation Rights Plan, incorporated herein
by reference to the Registrant s report on Form
10-Q for the quarter ended June 30, 1995 (File
No. 1-5519). (Constitutes a management contract
or compensatory plan or arrangement)

b. Employment Agreement dated May 1, 1973 by and
between Comprehensive Designers, Inc. and Walter
R. Garrison, incorporated herein by reference to
Exhibit 10.e. to Registrant's registration state-
ment on Form 8-B (File No. 1-5519). (Constitutes
a management contract or compensatory plan or
arrangement)

c. Employment Agreement dated April 1, 1963, as
amended and restated effective May 1, 1986, by
and between Registrant and Christian M. Hoechst,
incorporated herein by reference to Registrant's
report on Form 10-K for the year ended April 30,
1987 (File No. 1-5519). (Constitutes a manage-
ment contract or compensatory plan or
arrangement)

d. Employment Agreement dated April 30, 1973 by and
between Comprehensive Designers, Inc. and Edgar
D. Landis, incorporated herein by reference to
Exhibit 10.g. to Registrant's registration state-
ment on Form 8-B (File No. 1-5519). (Constitutes
a management contract or compensatory plan or
arrangement)

e. Supplemental Pension Agreement dated April 11,
1978 between CDI Corporation and Walter R.
Garrison, incorporated herein by reference to
the Registrant's report on Form 10-K for the
year ended December 31, 1989 (File No. 1-5519).
(Constitutes a management contract or
compensatory plan or arrangement)

37

f. Non-competition and Consulting Agreement by and
between Registrant and Christian M. Hoechst dated
October 17, 1995. (Constitutes a management
contract or compensatory plan or arrangement)

11. Statement re computation of per share earnings.
21. Subsidiaries of the Registrant.
23. Consents of experts and counsel.
27. Financial Data Schedule.

38

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
- -------------------------------------

By: /s/ Walter R. Garrison
- -------------------------------------
Walter R. Garrison, President

Date: February 27, 1996
- -------------------------------------

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the Registrant and in the capacities and on the dates
indicated.

By: /s/ Walter R. Garrison
- -------------------------------------
Walter R. Garrison
President and Director
(Principal Executive Officer)

Date: February 27, 1996
- -------------------------------------

By: /s/ Edgar D. Landis
- -------------------------------------
Edgar D. Landis
Executive Vice President,
Finance and Director
(Principal Financial and
Accounting Officer)

Date: February 26, 1996
- -------------------------------------

By: /s/ Walter E. Blankley
- -------------------------------------
Walter E. Blankley
Director

Date: February 26, 1996
- -------------------------------------

39

By: /s/ Christian M. Hoechst
- -------------------------------------
Christian M. Hoechst
Director

Date: February 28, 1996
- -------------------------------------

By: /s/ Lawrence C. Karlson
- -------------------------------------
Lawrence C. Karlson
Director

Date: February 26, 1996
- -------------------------------------

By: /s/ Allen M. Levantin
- -------------------------------------
Allen M. Levantin
Director

Date: February 26, 1996
- -------------------------------------

By: /s/ Alan B. Miller
- -------------------------------------
Alan B. Miller
Director

Date: February 26, 1996
- -------------------------------------

By: /s/ John W. Pope
- -------------------------------------
John W. Pope
Director

Date: February 27, 1996
- -------------------------------------

By: /s/ Barton J. Winokur
- -------------------------------------
Barton J. Winokur
Director

Date: February 26, 1996
- -------------------------------------

40

Schedule II
-----------

CDI CORP. AND SUBSIDIARIES

Valuation and Qualifying Accounts
(Allowance for Uncollectible Receivables)

Years ended December 31, 1995, 1994 and 1993

Uncollectible
Additions receivables
Balance at charged written off, Balance
beginning to net of Other at end
of year earnings recoveries changes of year
---------- --------- ------------- ---------- ---------
December 31, 1995 $ 2,966,000 2,833,000 1,740,000 - 4,059,000

December 31, 1994 $ 1,682,000 2,081,000 797,000 - 2,966,000

December 31, 1993 $ 1,489,000 599,000 477,000 71,000(a) 1,682,000

(a) Allowance for uncollectible receivables at dates of acquisition of
subsidiaries purchased during the year.

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

CDI CORP.

EXHIBITS

to

Annual Report

FORM 10-K

Year ended December 31, 1995

Under

SECURITIES EXCHANGE ACT OF 1934

41

INDEX TO EXHIBITS

Number Exhibit Page
- ------- ------------------------------------------------------- ----
3.(i) Articles of incorporation of the Registrant,
incorporated herein by reference to the Registrant's
report on Form 10-Q for the quarter ended June 30,
1990 (File No. 1-5519).

(ii) Bylaws of the Registrant, incorporated herein by
reference to the Registrant's report on Form 10-Q for
the quarter ended June 30, 1990 (File No. 1-5519).

10.a. CDI Corp. Non-Qualified Stock Option and Stock
Appreciation Rights Plan, incorporated herein by
reference to the Registrant s report on Form 10-Q for
the quarter ended June 30, 1995 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)

b. Employment Agreement dated May 1, 1973 by and between
Comprehensive Designers, Inc. and Walter R. Garrison,
incorporated herein by reference to Exhibit 10.e. to
Registrant's registration statement on Form 8-B (File
No. 1-5519). (Constitutes a management contract or
compensatory plan or arrangement)

c. Employment Agreement dated April 1, 1963, as amended
and restated effective May 1, 1986, by and between
Registrant and Christian M. Hoechst, incorporated
herein by reference to Registrant's report on Form 10-K
for the year ended April 30, 1987 (File No. 1-5519).
(Constitutes a management contract or compensatory plan
or arrangement)

d. Employment Agreement dated April 30, 1973 by and
between Comprehensive Designers, Inc. and Edgar D.
Landis, incorporated herein by reference to Exhibit
10.g. to Registrant's registration statement on Form
8-B (File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)

e. Supplemental Pension Agreement dated April 11, 1978
between CDI Corporation and Walter R. Garrison,
incorporated herein by reference to the Registrant's
report on Form 10-K for the year ended December 31,
1989 (File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)

f. Non-competition and Consulting Agreement by and between 43
Registrant and Christian M. Hoechst dated October 17,
1995. (Constitutes a management contract or compensa-
tory plan or arrangement)

42

Number Exhibit Page
- ------ ------------------------------------------------------- ----
11. Statement re computation of per share earnings. 52

21. Subsidiaries of the Registrant. 53

23. Consents of experts and counsel. 55

27. Financial Data Schedule. 56