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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-K

CDI Corp.

1717 Arch Street, 35th Floor, Philadelphia, PA 19103-2768

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

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. Indicate whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).

Yes [X]     No [  ]

The aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, on the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the New York Stock Exchange.

The outstanding shares of each of the Registrant’s classes of common stock as of February 22, 2004 were:

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant’s Proxy Statement to be filed with the Securities and Exchange Commission for the Registrant’s 2004 Annual Meeting are incorporated by reference in Part III.

TABLE OF CONTENTS

Forward-looking Information

Certain information in this report, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Certain forward-looking statements can be identified by the use of forward-looking terminology such as, “believes”, “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or the negative thereof or other comparable terminology, or by discussions of strategy, plans or intentions. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. These include risks and uncertainties such as the effects of, and changes in general economic conditions, competitive market pressures, material changes in demand from larger customers, availability of labor, the Company’s performance on contracts, changes in customers’ attitudes toward outsourcing, government policies or judicial decisions adverse to the staffing industry, and ability to successfully complete the implementation and integration of the Company’s vertical go-to-market strategy on a timely basis. 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 information. Certain other risk factors are discussed more fully under “Risk Factors” in Part I, Item 1 of this filing.

Item 1. BUSINESS

The Company — Overview

CDI Corp. (the “Company” or “CDI”) (NYSE: CDI) is a provider of engineering and information technology outsourcing solutions, professional services, specialized staffing and permanent placement services. CDI concentrates on several vertical markets, including aerospace, government services, information technology, life sciences, process and industrial and construction. The Company derives the majority of its revenues from Fortune 1000 companies serviced primarily in the United States. There was no single customer from whom the Company derived 10% or more of its consolidated revenues, during 2003, 2002 or 2001. All of the Company’s segments operate in highly competitive multi-billion dollar markets with no single competitor being dominant.

During 2003, the Company substantially completed its previously announced multi-phased plan to restructure and reorganize its operations, systems, and support infrastructure. The key elements of this Plan of Restructure (the “Plan”) included:

	•		Reducing staff headcount by approximately 33 percent and operating offices by approximately 25 percent;
	•		Reorganizing the business into four reporting segments: Professional Services (“PS”), Project Management (“PM”), Management Recruiters International (“MRI”) and Todays Staffing (“Todays”);
	•		Exiting under-performing contracts and businesses;
	•		Streamlining and simplifying core information systems; and
	•		Consolidating back-office services.

As a result of the foregoing restructuring and reorganization efforts, the Company was able to reduce its fixed operating costs. This reduction has significantly lowered CDI’s breakeven point and provides enhanced economies of scale. Further, the Company has generated significant cash flows and was able to pay a special dividend of $2.00 per share to its shareholders in 2003.

The ability to recruit talent is a core competency for the Company. In PS, PM and Todays and, to a limited extent, MRI, personnel are recruited by the Company and assigned to work for customers at either customer locations or in the Company’s own offices. Such recruited personnel are employees of CDI. In some cases, the Company may assume risk with respect to the performance of its services and the acceptability of its employees to its customers.

1

Market Opportunity and Growth Strategy

CDI’s primary services are intended to meet the engineering and information technology solutions and professional staffing needs of a broad spectrum of Fortune 1000 customers. The Company is well positioned to benefit from business trends favoring outsourcing of non-core, highly skilled functions and operations. CDI offers a broad range of services from high-value engineering, design, consulting, information technology staffing and project management solutions, in addition to traditional staffing and permanent placement services. With this broad level of service offerings, CDI can address demand in the marketplace for more cost effective, single-source providers of engineering and information technology solutions, and professional staffing.

CDI’s growth strategy is to capitalize on its market position and core competencies in six key vertical markets: aerospace (commercial and military), government services (defense and federal information technology), information technology services, life sciences (pharmaceutical and biotechnology), process and industrial (chemical, oil, gas, power generation, telecommunications) and the United Kingdom infrastructure market (construction). Key elements of CDI’s strategy are:

Capture market share in key verticals and permanent placement business.

The Company is implementing a new business development organization in vertical markets to capture new accounts, enhance cross-selling and incremental business opportunities and secure long-term customer relationships. In addition, CDI is executing initiatives to improve productivity in two key revenue generating areas: recruiter productivity and account management. MRI, the Company’s permanent placement business, is expanding into new international markets such as Japan.

Continue to execute vertical strategy and deliver tailored products to customers.

The Company will remain focused on its six key vertical markets and leverage the experience of its industry specialists to provide tailored products to customers – offering project specific expertise or a cost effective, single-source, provider to fulfill their multiple needs.

Continue to increase skill and scale to enhance core capabilities and expand existing range of services.

The Company intends to pursue strategic acquisitions, when prudent, to increase scale, skill and service offerings to key verticals.

2

Reporting Segments

The following table sets forth (in thousands) the revenues and pre-tax earnings from continuing operations of the reporting segments of the Company and its consolidated subsidiaries during the years indicated and the assets attributable to each segment as of the end of each year.

During the second half of 2003, the Company initiated a new growth and business integration plan to more closely align the Company with the key vertical markets it serves. This growth strategy and integration plan is designed to better serve the Company’s customers, generate higher revenues and achieve greater operating efficiencies. As a result of this plan, in January 2004, the Company made certain organization and reporting changes in support of its vertical go-to-market strategy. The new organizational structure will have four reporting segments: Business Solutions, AndersElite, Todays Staffing and MRI. Management has realigned its PS and PM segments to form a new segment called Business Solutions. Business Solutions will focus on specific vertical markets – aerospace, government services, information technology services, life sciences, and process and industrial. AndersElite, previously part of the PS reporting segment, is a major provider of building and construction professionals on a permanent and temporary basis in the United Kingdom. Todays and MRI segments remain unchanged. Refer to Notes 17 and 18 of the Consolidated Financial Statements for information concerning the Company’s segments and new reporting structure.

3

The following segment discussion reflects the reporting structure of the Company as it existed in 2003.

Professional Services (“PS”)

Markets

PS offers information technology, engineering and technical staffing solutions to customers in targeted vertical markets, including:

	•		Financial services,
	•		Pharmaceuticals,
	•		Industrials,
	•		Information services and
	•		Government.

The Company’s PS segment also includes AndersElite, a major provider of building and construction professionals on a permanent and temporary basis in the United Kingdom. Approximately 66 percent of the segment’s revenue is derived domestically with the balance coming from foreign operations.

Services

The segment’s service delivery is tailored to the unique needs of the customer. The most basic service is providing skilled professionals to work at a single customer location on a temporary or permanent basis. The segment’s highest value to customers is in the provision of customized managed staffing solutions, which may include serving as the lead recruiter among several vendors, the procurement of hundreds of professional employees across a broad geographic area, the provision of on-site management of staffing requirements and certain human resources functions and the utilization of web-based technology to support these functions.

In certain cases, the services of personnel (“supplier associates employees”) supplied by other staffing companies or contractors (“supplier associates”) are used to fulfill customer contract requirements. In these cases, the Company receives an administrative fee for arranging for, billing for and collecting the billings related to the supplier associates. Typically, the customer is responsible for assessing the work of the supplier associates, who have the responsibility for the performance acceptability of their personnel to the customer.

When providing staffing services the segment recruits and hires employees and provides these personnel to customers for assignments that domestically, on average, last approximately one year. The vast majority of these services are performed in the customers’ facilities (“in-customer”). Customers use the segment’s employees or supplier associates employees to meet peak period personnel needs, to fill in for employees who are ill or on vacation, to provide additional capabilities in times of expansion and change, and to work on projects requiring specialized skills.

When supplying staffing services the segment provides not only employees but may also manage all of the customer’s contract staffing needs, as well as certain human resource functions required to manage the customer’s contract workforce. When providing managed staffing services, the segment frequently establishes on-site offices at one or more of the customer’s facilities, staffs it with employees from the segment and ties that office into the segment’s business systems. Managed staffing services include the coordination of supplier associates employees assigned to the customer from other staffing companies. If desired, managed staff services utilizes web-based technology to help accelerate and streamline the procurement and management of contract employees and the coordination and supervision of supplier associates.

Customers

During the year ended December 31, 2003, PS provided services to approximately 3,600 customers worldwide. Historically, much of its business has been performed for large multi-national manufacturing, industrial and construction corporations, but the segment has continued to penetrate non-industrial fields such as financial services, pharmaceuticals, information services, and government. In 2003, one large industrial corporation comprised 10 percent of PS’ total revenues while the top 10 customers accounted for less than 27 percent of PS’s total revenues. Managed staffing services are concentrated among a small number of these customers, which tend to be among the largest U.S. and U.K. corporations.

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Pricing

Pricing under substantially all contracts between PS and its customers is based on mark-ups on contractual rates of pay and agreed-upon fees for permanent placements. Contracts generally do not obligate the customer to pay for any fixed number of hours. Segment revenues are recorded on a gross basis as services are performed and associated costs have been incurred. The segment records an administrative fee as revenue when supplier associates are used. Generally the customer has the right to terminate the contract, usually on short notice. PS maintains the right to terminate its staffing employees at will.

Marketing

PS operates through a network of approximately 42 sales and recruiting offices located in major markets throughout the United States and 15 international offices that are primarily located in the U.K. and Canada. Marketing activities are conducted by divisional and regional management to ascertain opportunities in specific geographical areas. Each office assists in identifying the potential markets for services in its geographic area, and develops that market through personal contact with prospective and existing customers. Customers typically invite several companies to bid for contracts, which are awarded primarily on the basis of price, value-added services and prior performance. Many times customers grant multi-vendor contracts.

Recruitment

The ability of PS to find and hire employees with the capabilities required by customers is critical to its operations. Such personnel usually have prior experience in their area of expertise. During periods of high demand for specific skills, it is not uncommon for PS 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. Similarly, wage rates typically decline in periods of lower demand for such skills. To assist in fulfilling its personnel needs, a computerized retrieval system facilitates the rapid selection of resumes on file so that customers’ requirements may be filled quickly.

Project Management (“PM”)

Markets

PM offers a wide range of project management, outsourcing services, and technical consulting services to customers in high technology and capital-intensive vertical markets such as:

	•		Aerospace technologies,
	•		Biotechnology,
	•		Pharmaceuticals,
	•		Chemical and specialty chemical,
	•		Manufacturing and industrial, and
	•		Government.

Substantially all of the segment’s revenue is derived from domestic operations.

Services

The segment provides high value-added engineering and consulting services and solutions to customers with contractual engagements that generally are more than a year in duration. These services include feasibility studies, turnaround management, validation services and technical publications. In addition, PM provides information technology outsourcing services such as infrastructure management, enterprise support services and technology advisory services.

PM’s services typically involve managing a discrete portion or portions of a customer’s capital project, including, but not limited to, preliminary or detailed plant design and construction management; validation and commissioning of a facility; and lifecycle support. To the extent such activities entail design and planning work, they are typically performed in-house. However, construction management, validation, commissioning and lifecycle support activities are generally performed on-site.

5

In providing information technology outsourcing services, this segment usually takes over a customer’s technical department, staffing the department with its employees, and managing the production of the department’s output. In most instances, the managed department is located on-site at the customer’s premises, but in some cases the customer may prefer an off-site location. In this case, this segment may need to maintain a stand-alone operation.

PM’s employees are on PM’s payroll and are subject to its administrative control. When services are performed in-house, PM generally provides supervision for employees, and may have increased responsibility for the performance of work that is generally monitored in conjunction with customer personnel. In addition, PM also provides technical staffing services on an in-customer basis. This segment is not reliant on supplier associates to any significant degree.

Customers

During the year ended December 31, 2003, PM provided services to approximately 220 customers. In 2003, one large multinational corporation comprised approximately 11% of PM’s total revenues. Customers and project locations are geographically dispersed.

Pricing

Pricing under the majority of contracts between PM and its customers is based on mark-ups on contractual hourly rates of pay, whereby revenues are recorded on a gross basis. Contracts generally do not obligate the customer to pay for any fixed number of hours. To a lesser extent, PM’s revenues are derived from fixed-price and outsourcing contracts. In these instances, the Company recognizes revenue using the percentage of completion method. Generally, the customer has the right to terminate the contract, usually on short notice. PM maintains the right to terminate its employees at will. Customers typically invite several companies to bid for contracts, which are awarded primarily on the basis of price, technological capability, value-added services, and prior performance.

Marketing

PM maintains approximately 25 offices across the United States and has 2 international offices. Marketing activities are conducted by divisional and regional management to ascertain opportunities for PM in specific vertical markets. Each office assists in identifying the potential markets and develops that market through personal contact with prospective and existing customers. Additionally, PM’s operating management stays abreast of emerging demand for services so that efforts can be expanded or redirected to take advantage of potential business in either established or new marketing areas.

Recruitment

The ability of PM to find and hire employees with the capabilities required by its customers is critical to its operations. Such personnel usually have prior experience in their field of expertise. During periods of high demand for specific skills, it is not uncommon for PM 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. Similarly, wage rates typically decline in periods of lower demand for such skills.

Other

In mid-2002, the Company sold the net operating assets of its Modern Engineering, Inc. (“Modern”) subsidiary that operated within the PM segment. Modern provided technical staffing services to the automotive industry. Refer to Note 11 to the Consolidated Financial Statements for information concerning this discontinued operation.

Todays Staffing (“Todays”)

Markets

Todays provides temporary and permanent administrative, clerical, and legal staffing as well as managed staffing services through company-owned offices and a small number of franchised offices. The segment recruits and hires employees and provides these personnel to the customer. In managed staffing, the segment not only provides the employees but also manages the customer’s entire contract staffing needs. Most of the segment’s revenue is derived from the United States with the balance coming from Canada.

6

Services

Services are performed in customers’ facilities by Todays employees who are hired to work on customers’ projects. The period of assignment depends on the need for the skills of the individual employee and can range from several days to several months. The average assignment duration is approximately five weeks. At the end of an assignment, an employee is either reassigned within the current customer, assigned to perform services with another customer, or employment is terminated. Todays’ personnel are on Todays’ payroll and are subject to its administrative control. The customer retains supervisory control and responsibility for the performance of the employee’s services.

Todays also supports franchised offices and employs all of the temporary personnel, including those recruited by the franchised offices, and also bears the responsibility for billing services to customers. Franchisees are responsible for selling services to customers, recruiting temporary personnel and for administrative costs. The franchisee receives a portion of the gross profit on the franchised accounts.

Customers

Customers retain Todays to meet peak manpower needs, to temporarily replace personnel on vacation and to staff special projects. During the year ended December 31, 2003, these services were provided to approximately 3,500 customers. This segment focuses on small to medium-sized customers including banks, mortgage and insurance companies, investment companies, utilities, hospitals, law firms and universities, as well as larger national accounts. In 2003, no one customer exceeded 6% of total segment revenue.

Pricing

Pricing is based on mark-ups on contractual rates of pay, and arrangements with the customer generally do not obligate the customer to pay for any fixed number of hours. Segment revenues are recorded on a gross basis. Generally the customer has the right to terminate services, usually on short notice. Todays maintains the right to terminate its staffing employees at will.

Marketing

Todays operates through a network of approximately 79 sales and recruiting offices, with 69 offices in the United States, of which 7 are franchised, and 10 offices in 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.

Recruitment

The ability of Todays to locate and hire personnel with customer-specific capabilities is critical to its operations.

Management Recruiters International (“MRI”)

Markets

MRI is a franchisor providing support services to its franchisees who engage in the search, recruitment and employment of management and sales personnel. MRI also provides temporary management and specialty staffing services.

Services/Customers/Pricing

Franchisees located in the U.S. pay an initial fee approximating $79,000 to acquire a franchise, while franchises located internationally pay an initial fee approximating $63,000. The fee is charged for establishing and bringing a new franchisee into the franchise system and for the franchisees participation in a comprehensive training program and providing office software and hardware. Franchisees also pay royalties based on a percentage of the franchisee’s placement fees. Franchisees benefit from MRI’s expertise in the business, from its Internet presence, national marketing and sales campaigns, public relations support and purchasing leverage. Franchisees also have the right to use MRI’s trade names, trademarks, the inter-office referral system, operating techniques, advertising materials, sales programs, video and live interactive training programs, computer programs, Internet and intranet systems, manuals and forms. MRI does not control the business operations of its franchisees.

7

Marketing

As of December 31, 2003, MRI had approximately 1,000 franchised offices providing services to both large and small employers in virtually all industries. There are approximately 800 offices located throughout the United States with approximately 200 offices located internationally. Support for MRI’s franchise network is provided by administrative offices in Cleveland, Ohio and Philadelphia, Pennsylvania for domestic operations, and in the U.K for international franchise operations. The broad geographic scope of operations enables franchisees to provide international recruiting and matching of employers with job candidates. The network utilizes an inter-office referral system on both national and regional levels, which enables offices to cooperate in fulfilling a customer’s requirements.

Recruitment

Employers commonly offer more than one company the opportunity to find qualified candidates for a position making competition for qualified individuals intense. Franchisees’ ability to obtain placements with employers is determined more on their ability to find qualified candidates than on their fee structure.

Other

In the latter part of 2001, management decided to divest MRI of its company-owned permanent placement offices. MRI exited a majority of such offices in 2002. In 2003, MRI signed a contract to exit the remaining company-owned offices. Refer to Note 15 to the Consolidated Financial Statements for information concerning these dispositions.

Other Information

Safeguards – Business, Disaster and Contingency Planning

CDI has a number of safeguards to protect the Company from various system-related risks. Given the significant amount of data generated in the Company’s key processes including recruiting, payroll and customer invoicing, CDI on a daily basis, has established redundant processing capability within the Company’s primary data center. This redundancy mitigates the risks related to hardware failure. Additionally, CDI has contracted with a third-party provider to restore its primary data center operations in the event of a disruption. Finally, the Company maintains site disaster plans for a majority of its operating offices as well as maintaining data back-up requirements throughout the Company.

Competition

All segments of the Company’s operations face competition in attracting both clients and high-quality specialized employment candidates. The temporary and permanent placement businesses are highly competitive, with limited barriers to entry. CDI competes in global, national and local markets with numerous temporary staffing and permanent placement companies. In many areas the local companies are the strongest competitors. In 2003, some of CDI’s largest competitors included Kelly Services, Inc., Adecco, S.A., Spherion Corporation, Volt Information Sciences, Inc., and Jacobs Engineering Group, Inc.

The most significant competitive factors in the temporary, project-based and permanent placement businesses are price and the reliability of service, both of which are often a function of the availability and quality of personnel. The Company believes it derives a competitive advantage from its long experience in and commitment to the specialized employment market, its national presence, and its various marketing activities.

Seasonality

The Company’s temporary, project-based and permanent staffing services operations are generally less active in the first and fourth quarters of a calendar year. This seasonality is due to customers’ plant closures, vacation and holiday schedules.

Employees

At December 31, 2003 the Company had approximately 16,600 employees. The Company believes that its relations with its employees are generally good.

8

Risk Factors

The Company’s business involves a number of risks, some of which are beyond its control. The risk and uncertainties described below are not the only ones the Company faces. Management believes that the most significant of these risks and uncertainties are as follows:

Economic Trends - The Company’s growth and earnings prospects are influenced by broad economic trends. The pace of customer capital spending programs, new product launches and similar activities have a direct impact on the need for temporary and permanent employees. The Company believes that its fiscal discipline and strategic focus on targeted vertical markets provides some insulation from adverse trends. However, further declines in the economy would adversely affect the Company’s operating performance and could result in the need for future cost reductions or changes in strategy.

Government Regulations - Changes in government regulations could result in prohibition or restriction of certain types of employment services or the imposition of new or additional benefits, licensing or tax requirements with respect to the provision of employment services that may reduce CDI’s future earnings. There can be no assurance that CDI would be able to increase the fees charged to its clients in a timely manner or in a sufficient amount to cover increased costs as a result of any of the foregoing.

Highly Competitive Business - The staffing services and outsourcing markets are highly competitive and have limited barriers to entry. CDI competes in global, national, regional and local markets with numerous temporary staffing and permanent placement companies. Price competition in the staffing industry is significant, particularly for the provision of office clerical and light industrial personnel, and pricing pressures from competitors and customers are increasing. In addition, there is increasing pressure on companies to outsource certain areas of their business to low cost offshore outsourcing firms. CDI expects that the level of competition will remain high in the future, which could limit CDI’s ability to maintain or increase its market share or profitability.

Dependence Upon Personnel - The Company’s operations depend on the continued efforts of its officers and executive management. The loss of key officers and members of executive management may cause a significant disruption to the Company’s business. CDI also depends on the performance and productivity of its local managers and field personnel. The Company’s ability to attract and retain new business is significantly affected by local relationships and the quality of service rendered. The loss of key managers and field personnel may also jeopardize existing client relationships with businesses that continue to use our services based upon past relationships with local managers and field personnel, which could cause future revenues to decline in that event.

Foreign Currency Fluctuations and Changes in Exchange Rates – The Company is exposed to risks associated with foreign currency fluctuations and changes in exchange rates. CDI’s exposure to foreign currency fluctuations relates to operations in foreign countries conducted through subsidiaries primarily in the United Kingdom and Canada. Exchange rate fluctuations impact the U.S. dollar value of reported earnings derived from these foreign operations as well as the carrying value of our investment in the net assets related to these operations. The Company generally does not engage in hedging activities with respect to foreign operations except for isolated situations involving inter-company payments that have not been material. The effects of foreign currency exchange fluctuations have been immaterial on CDI’s consolidated earnings.

Concentration of Stock Ownership – Certain of CDI’s Board of Directors, and trusts for which some of the Company’s directors serve as trustees, own, in the aggregate, a substantial portion of the Company’s outstanding common stock. By virtue of this stock ownership, such shareholders have the power to significantly influence CDI’s affairs and are able to influence the outcome of matters required to be submitted to shareholders for approval, including the election of members of the Board of Directors and the amendment of the Company’s Articles of Incorporation or Bylaws. Management cannot guarantee that such shareholders will not exercise influence over the Company in a manner detrimental to the interests of CDI’s other shareholders.

Integration of Acquisitions – The Company intends to seek acquisitions as an element of its growth strategy. The failure to successfully integrate any future acquisition may divert management’s attention from its core operations or could negatively affect the Company’s ability to timely meet the needs of its customers.

9

Data Center Capacity and Telecommunication Links - The Company’s ability to protect its data centers against damage from fire, power loss, telecommunications failure and other disasters is critical. In order to provide many of its services, CDI must be able to store, retrieve, process and manage large databases and periodically expand and upgrade its capabilities. Any damage to the Company’s data centers or any failure of the Company’s telecommunication links that interrupts its operations or results in an inadvertent loss of data could adversely affect CDI’s ability to meet its customers’ needs and their confidence in utilizing CDI for future services.

Access to Company Information

The Company electronically files its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports with the Securities and Exchange Commission (SEC). The public may read and copy any of the reports that are filed with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site (http://www.sec.gov) that contains reports, proxy, information statements, and other information regarding issuers that file electronically.

CDI makes available, free of charge, through its website or by responding to requests addressed to the Company’s Vice President of Corporate Communications, its Annual Report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed by the Company with the SEC pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act, as amended. This report is available as soon as reasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission. CDI’s website address is: “http://www.cdicorp.com”. CDI posts its audit committee, compensation committee, and governance and nominating committee charters, corporate governance guidelines, and code of ethics on the Company’s website. The information contained on the Company’s website, or on other websites linked to the Company’s website, is not part of this document.

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Item 2. PROPERTIES

The Company presently maintains its principal executive offices at 1717 Arch Street, Philadelphia, Pennsylvania 19103 in approximately 21,300 square feet of leased office space under a sublease expiring in 2005. The Company also maintains corporate offices at 1801 Market Street, Philadelphia, Pennsylvania 19103 in approximately 65,000 square feet of leased office space expiring in 2006. During 2003, CDI’s shared services center was transitioned from Philadelphia to Charleston, West Virginia.

The Company has closed or sold approximately 100 operating sites since 2001, primarily in the United States, as a result of its restructuring and cost reduction efforts. Many of these facilities are under non-cancelable operating leases. Accordingly, the Company has negotiated lease buy-outs or subleases to minimize the cash outflow requirements. In connection with the Company’s office closings, reserves were established to reflect the net estimated future cash outlays related to closed office leases. Actual future cash outlays could exceed these reserves in the event of sublease defaults. Refer to Note 14 to Consolidated Financial Statements for further information concerning operating lease obligations and related sublease arrangements.

As part of the Company’s restructuring and reorganization efforts, some of the Company’s offices accommodate more than one operating segment. In such cases, square-foot usage is allocated among the segments based on planned utilization.

Each reporting segment has numerous active facilities and locations under operating lease agreements. Most of the leased space is devoted to sales, marketing and administrative functions, in-house services, and back-office functions. These facilities are leased under terms generally extending up to five years.

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

Market information

CDI’s common shares are traded on the New York Stock Exchange (trading symbol “CDI”). The following table sets forth the high and low quarterly sales prices of the Company’s common shares during the two most recent years (all as reported by The Wall Street Journal).

Shareholders

Shareholders of record on February 23, 2004 numbered 483. This number counts each street name account as only one shareholder, when, in fact, such an account may represent multiple owners. Taking into account such multiple owners, the total number of shareholders on February 23, 2004 approximated 3,500.

Dividends

On August 19, 2003, the Company paid a special dividend of $2.00 per share and a dividend of $0.09 per share, with a total of $40.7 million being distributed to shareholders on that date. On November 18, 2003, the Company paid a dividend of $0.09 per share, with a total of $1.7 million being distributed to shareholders on that date. The declaration and payment of future dividends will be at the discretion of the Company’s Board of Directors and will depend upon many factors including the Company’s earnings, financial condition, capital requirements, and other factors.

Sales of unregistered securities

On October 1, 2001 and November 13, 2001, the Company issued a total of 40,000 restricted shares of the Company’s common stock to Roger H. Ballou, the Company’s Chief Executive Officer, as part of an arrangement made to induce Mr. Ballou to join the Company. These shares were issued in consideration for services performed or to be performed by the recipient. The issuance was made in reliance on the exemption from registration found in section 4(2) of the Securities Act of 1933.

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Item 6. SELECTED FINANCIAL DATA

The following is selected financial data derived from the Company’s audited Consolidated Financial Statements for each of the last five years. The data should be read in conjunction with the Company’s Consolidated Financial Statements (and related notes) appearing elsewhere in this report and with Item 7 of this report. The data presented below is in thousands, except for per share data.