FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
-------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from TO
--------------- ---------------
Commission file number 1-5519
------
CDI CORP.
------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Pennsylvania 23-2394430
- ------------------------- -----------------------
(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification Number)
organization)
1717 Arch Street, 35th Floor, Philadelphia, PA 19103-2768
----------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (215) 569-2200
--------------
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
----- -----
Outstanding shares of each of the Registrant's classes of common
stock as of July 31, 1999 were:
Common stock, $.10 par value 19,052,799 shares
Class B common stock, $.10 par value None
<PAGE>
PART 1. FINANCIAL INFORMATION
CDI CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands)
June 30,
1999 December 31,
Assets (unaudited) 1998
- ------ --------- ------------
Current assets:
Cash $ 6,192 6,962
Accounts receivable, less allowance
for doubtful accounts of $5,237 -
June 30, 1999; $6,000 - December 31,
1998 346,589 307,261
Prepaid expenses 5,218 7,156
Deferred income taxes 5,286 6,038
Net assets of discontinued operations 1,418 5,352
------- -------
Total current assets 364,703 332,769
Fixed assets, at cost:
Computers and systems 66,344 55,156
Equipment and furniture 30,365 28,761
Leasehold improvements 8,922 8,421
------- -------
105,631 92,338
Accumulated depreciation 58,461 52,885
------- -------
Net fixed assets 47,170 39,453
Deferred income taxes 2,356 4,148
Goodwill and other intangible assets, net 64,050 48,844
Other assets 11,468 10,600
------- -------
$ 489,747 435,814
======= =======
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CDI CORP. AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
June 30,
1999 December 31,
Liabilities and Shareholders' Equity (unaudited) 1998
- ------------------------------------ --------- ------------
Current liabilities:
Obligations not liquidated because
of outstanding checks $ 13,579 21,428
Accounts payable 44,829 34,978
Withheld payroll taxes 4,505 3,734
Accrued expenses 102,566 80,118
Currently payable income taxes 7,998 5,346
------- -------
Total current liabilities 173,477 145,604
Long-term debt 33,475 35,059
Deferred compensation 11,561 11,258
Minority interests 3,458 2,804
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 19,973,300 shares - June 30,
1999; 19,951,300 shares - December 31,
1998 1,997 1,995
Class B common stock, $.10 par value -
authorized 3,174,891 shares; none
issued - -
Additional paid-in capital 16,084 15,534
Retained earnings 272,003 245,858
Unamortized value of restricted stock
issued (939) (1,117)
Less common stock in treasury, at cost -
924,501 shares - June 30, 1999; 917,458
shares - December 31, 1998 (21,369) (21,181)
------- -------
Total shareholders' equity 267,776 241,089
------- -------
$ 489,747 435,814
======= =======
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<PAGE>
CDI CORP. AND SUBSIDIARIES
Consolidated Statements of Earnings
(In thousands, except per share data; unaudited)
Quarter ended Six months ended
June 30, June 30,
---------------- ----------------
1999 1998 1999 1998
------- ------- ------- -------
Revenues $ 407,576 388,847 796,697 767,613
Cost of services 301,616 292,130 590,054 578,887
------- ------- ------- -------
Gross profit 105,960 96,717 206,643 188,726
Operating and administrative
costs 84,495 80,621 164,878 154,868
------- ------- ------- -------
Operating profit 21,465 16,096 41,765 33,858
Interest expense 440 425 867 431
------- ------- ------- -------
Earnings from continuing
operations before income
taxes and minority
interests 21,025 15,671 40,898 33,427
Income taxes 8,284 6,112 16,114 13,037
------- ------- ------- -------
Earnings from continuing
operations before minority
interests 12,741 9,559 24,784 20,390
Minority interests 344 190 654 312
------- ------- ------- -------
Earnings from continuing
operations 12,397 9,369 24,130 20,078
Discontinued operations 2,015 - 2,015 -
------- ------- ------- -------
Net earnings $ 14,412 9,369 26,145 20,078
======= ======= ======= =======
Basic earnings per share:
Earnings from continuing
operations $ .65 .47 1.26 1.01
Discontinued operations $ .11 - .11 -
Net earnings $ .75 .47 1.37 1.01
Diluted earnings per share:
Earnings from continuing
operations $ .65 .47 1.26 1.01
Discontinued operations $ .11 - .11 -
Net earnings $ .75 .47 1.37 1.01
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<PAGE>
CDI CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In thousands; unaudited)
Six months ended June 30,
-------------------------
1999 1998
------ ------
Continuing Operations
Operating activities:
Earnings from continuing operations $ 24,130 20,078
Minority interests 654 312
Depreciation 6,774 5,677
Amortization of intangible assets 1,943 1,057
Income tax provision greater than
tax payments 4,575 3,057
Change in assets and liabilities
net of effects from acquisitions:
Increase in accounts receivable (34,214) (57,186)
Increase in payables and accrued
expenses 31,621 28,624
Other 1,619 (1,169)
------ ------
37,102 450
------ ------
Investing activities:
Purchases of fixed assets (14,026) (7,555)
Acquisitions net of cash acquired (20,798) (20,248)
Other 108 (2,992)
------ ------
(34,716) (30,795)
------ ------
Financing activities:
Borrowings long-term debt 2,033 33,655
Payments long-term debt (3,637) (86)
Obligations not liquidated because
of outstanding checks (7,849) (1,453)
Other 348 24
------ ------
(9,105) 32,140
------ ------
Net cash flows (used by) from continuing
operations (6,719) 1,795
Net cash flows from discontinued operations 5,949 79
------ ------
(Decrease) increase in cash (770) 1,874
Cash at beginning of period 6,962 6,998
------ ------
Cash at end of period $ 6,192 8,872
====== ======
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<PAGE>
CDI CORP. AND SUBSIDIARIES
Comments to Financial Statements
Earnings used to calculate both basic and diluted earnings per share are
the reported earnings in the Company's consolidated statement of earnings.
Because of the Company's capital structure, all reported earnings pertain to
common shareholders and no other assumed adjustments are necessary. The number
of common shares used to calculate basic and diluted earnings per share for the
second quarter and six months ended June 30, 1999 and 1998 was determined as
follows:
Second quarter Six months
---------------------- ----------------------
1999 1998 1999 1998
---------- ---------- ---------- ----------
Basic
- -----
Average shares
outstanding 19,048,109 19,923,504 19,046,900 19,923,578
Restricted shares
issued not vested (33,640) (44,900) (37,084) (47,150)
---------- ---------- ---------- ----------
19,014,469 19,878,604 19,009,816 19,876,428
========== ========== ========== ==========
Diluted
- -------
Shares used for basic 19,014,469 19,878,604 19,009,816 19,876,428
Dilutive effect of
stock options 131,294 26,275 76,178 60,965
Dilutive effect of
restricted shares
issued not vested 3,208 850 2,281 2,493
Dilutive effect of
shares issuable
under Management
Stock Purchase Plan 20,479 - 20,479 -
---------- ---------- ---------- ----------
19,169,450 19,905,729 19,108,754 19,939,886
========== ========== ========== ==========
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<PAGE>
Revenues and operating profit attributable to the operating segments of
the Company for the second quarter and six months ended June 30, 1999 and 1998
follow ($000s):
Second quarter Six months
---------------- ----------------
1999 1998 1999 1998
------- ------- ------- -------
Revenues:
Technical Services $ 235,218 228,477 461,860 455,233
Information Technology Services 84,467 79,048 168,681 154,507
Management Recruiters 28,182 27,762 54,026 54,393
Todays Staffing 59,709 53,560 112,130 103,480
------- ------- ------- -------
$ 407,576 388,847 796,697 767,613
======= ======= ======= =======
Earnings from continuing
operations before income taxes
and minority interests:
Operating profit
Technical Services $ 10,872 5,691 21,946 14,632
Information Technology Services 5,295 4,961 10,906 9,674
Management Recruiters 5,804 5,876 10,215 11,055
Todays Staffing 3,811 3,323 7,020 5,863
Corporate expenses (4,317) (3,755) (8,322) (7,366)
------- ------- ------- -------
Operating profit 21,465 16,096 41,765 33,858
Interest expense (440) (425) (867) (431)
------- ------- ------- -------
Earnings from continuing
operations before income taxes
and minority interests $ 21,025 15,671 40,898 33,427
======= ======= ======= =======
Intersegment activity is not significant. Therefore, revenues reported
for each operating segment are substantially all generated from external
customers.
The Company's total assets increased approximately $54 million from
December 31, 1998 to June 30, 1999. Approximately $6 million of that increase
was in Information Technology Services, $25 million was in Technical Services,
$6 million was in Todays Staffing and $12 million in Management Recruiters.
During the six months ended June 30, 1999, the Company completed
acquisitions in which it invested $20.8 million. These acquisitions were
accounted for using the purchase method. Assets acquired totaled approximately
$21 million including $17 million of goodwill. These acquisitions did not have
a significant effect on the results of operations for the six months and
quarter ended June 30, 1999.
During the six months ended June 30, 1999, there were 22,000 shares of
common stock issued upon the exercise of stock options granted under the
Company's Non-Qualified Stock Option Plan. As a
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<PAGE>
result of the option exercises, common stock and additional paid-in capital
were increased by $2,000 and $356,000, respectively.
During the six months ended June 30, 1999, 3,612 shares of restricted
common stock issued in 1997 vested and 7,043 shares were forfeited. The
vesting of the shares resulted in additional paid-in capital decreasing by
$10,000 because of income tax effects related to the vesting. The forfeited
shares were put in treasury increasing treasury stock by $188,000 and
decreasing unamortized value of restricted stock issued by the same amount.
Also during the six month period ended June 30, 1999, additional paid-in
capital and unamortized value of restricted stock issued were each increased by
$204,000 for market price changes related to the shares that will vest based
upon performance. In addition, unamortized value of restricted stock issued
was decreased by $194,000 for charges to earnings associated with the
amortization of the value of the restricted shares.
During the quarter ended June 30, 1999, a number of events occurred that
resulted in the resolution of certain contingencies and contractual matters
related to the Company's discontinued operations. Secondly, the Company
recognized a gain of $3.1 million ($2.0 million after taxes). Net assets of
the discontinued operations as of June 30, 1999 were comprised of working
capital and deferred income taxes.
The financial statements included in this report are unaudited and reflect
all adjustments which, in the opinion of management, are necessary for a fair
statement of the results for the periods presented. All such adjustments are
of a normal recurring nature. Results for interim periods are not necessarily
indicative of results to be expected for the full year.
These comments contain only the information which is required by Form 10-Q.
Further reference should be made to the comprehensive disclosures contained in
the Company's Annual Report on Form 10-K for the year ended December 31, 1998.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
---------------------
Consolidated revenues for the six months and quarter ended June 30, 1999
were 3.8% and 4.8% higher, respectively, compared to the same periods a year
ago. Operating profit for the six months and second quarter of 1999 increased
by 23.4% and 33.4% from the comparable periods of 1998. The Company's operating
profit margin for the six months and second quarter in 1999 was 5.2% and 5.3%
of revenues, respectively, compared to 4.4% and 4.1% for the six months and
second quarter in 1998. During the second quarter of 1998, the Company
incurred $2.3 million of reorganization costs and other non-recurring charges
related to Technical Services. Excluding these charges in
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<PAGE>
1998, consolidated operating profit for the six and three month period ended
June 30, 1999 increased by 15.5% and 16.7%, in comparison to comparable periods
in 1998.
Technical Services' revenues for the six months and second quarter of 1999
increased 2% and 3%, respectively, from last year's comparable periods.
Technical Services operating profit for the six and three month periods ended
June 30, 1999 increased 50% and 91%, respectively, in relation to comparable
periods in 1998. Operating profit margins for the six months and second
quarter of 1999 were 4.8% and 4.6% of revenue, respectively, compared to 3.2%
and 2.5% for the six months and second quarter in 1998. Second quarter 1998
figures include reorganization costs and other non-recurring charges of $2.3
million. Excluding these charges in 1998, Technical Services' operating profit
for the six and three month periods ended June 30, 1999 increased by 29.6% and
36.1%, in comparison to comparable periods in 1998. The aforementioned
reorganization program is complete. The improvement in Technical Services
results reflects the higher margins associated with strength in managed
engineering services, increased contract selectivity and ongoing cost
containment efforts.
Information Technology Services' revenues were up 9% for the six months of
this year and up 7% compared to last year's second quarter. Operating profit
increased 13% and 7% during the six and three month periods ended June 30, 1999
versus comparable periods in 1998. Operating profit margins for the six months
and second quarter of 1999 were 6.5% and 6.3%, respectively, compared to 6.3%
for both periods in 1998. While 1999 operating results have improved in
relation to comparable results in 1998, Information Technology growth and
financial performance has been suppressed due to a shortage of qualified
candidates and lower than anticipated demand from several key customers.
These conditions are expected to continue during the second six months of 1999.
Additionally, the segment's administrative costs have increased during 1999
reflecting the need for continuing investment to support longer-term growth.
Todays Staffing revenues for the six months and second quarter of 1999
were 8% and 11% higher, respectively, compared to the same periods a year ago.
Operating profit for the six and three month periods ended June 30, 1999
increased 20% and 15%, respectively, in relation to comparable periods in 1998.
Operating profit margins for the six months and second quarter of 1999 were
6.3% and 6.4%, respectively, vs. 5.7% and 6.2%, respectively, for the same
periods in 1998. Demand for office/clerical services continued to be strong.
Management Recruiters' revenues were down 1% for the six months of this
year and up 2% compared to last year's second quarter. Operating profit for
the six and three month periods ended June 30, 1999 decreased 8% and 1%,
respectively, in relation to comparable periods in 1998. Operating profit
margins for the six months and second quarter of 1999 were 18.9% and 20.6%,
respectively, compared to 20.3% and 21.2%, respectively, for the same periods
in 1998. Management Recruiters' first quarter and year-to-date 1999 results
include $393,000 in after-tax operating profit related to the settlement of a
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<PAGE>
dispute with a franchisee. While the market has remained strong for
Management Recruiters' middle management search and recruiting services, the
segment's growth rates have been adversely impacted by a tight candidate pool
and slower than anticipated growth in large, national contracts during the
first half of 1999.
During the first half of 1999, the company capitalized $372,000 of
interest in connection with its implementation of an enterprise
information system. Interest incurred, net of capitalized amounts, during the
six and three month period ended June 30, 1999, was higher than comparable
periods in 1998 because of higher levels of debt outstanding.
During the second quarter 1999, the Company recorded a gain from
discontinued operations of $2 million, net of applicable income taxes. This
gain primarily reflects recovery of a disputed receivable which was fully
reserved.
Year 2000
---------
Many existing computer systems use two digits to identify a year with the
assumption that the first two digits of a year are "19." With the year 2000
approaching, computer systems that are not Year 2000 compliant may read the
year 2000 as 1900 and malfunction. The Company's program to assess the extent
of issues related to Year 2000 compliance and to develop and implement
solutions for those issues is being directed by senior management with the
Company's Chief Information Officer having primary responsibility for the
coordination, remediation and implementation efforts. Designated personnel at
the Company's headquarters and at each of the Company's operating locations
have been assigned Year 2000 compliance responsibilities.
The program is focused on internal information technology systems,
computer-aided design systems, non-IT systems (purchased systems with embedded
logic chips), facilities and the status of compliance by larger customers,
suppliers and other key third parties. The program involves the following
phases:
Inventory
Assessment and planning
Remediation or replacement and testing
Implementation
Contingency/transition planning
The internal IT systems compliance issues are most critical and relate to
the Company's financial systems, computer networks and communications systems
and personnel recruiting and human resource systems. Corporate level personnel
have responsibility to insure that these systems will be Year 2000 compliant as
well as determining the status of compliance by larger customers, suppliers and
other key third parties.
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<PAGE>
Year 2000 compliance related to internal financial systems is being
addressed in two ways. First, the Company is replacing its primary financial
system with a state-of-the-art integrated enterprise-wide system (ERP). The
new system will provide enhanced processing, control and reporting capabilities.
The new system will be Year 2000 compliant and is being implemented throughout
the majority of the enterprise. Remaining business units will continue to use
the remediated legacy systems (for which remediation has been completed and
testing is in progress) until converted to the new ERP.
A Company-wide expansion and upgrade of its computer networks and
communications systems has been underway since mid-1997. The roll out and
implementation of the new platform, which is Year 2000 compliant, is scheduled
to be substantially completed by year end, 1999.
Personnel recruiting and human resource systems are being replaced by new
systems which were developed prior to the end of 1997. These new systems are
Year 2000 compliant. This roll-out was substantially completed during the
second quarter of 1999 and is scheduled to be fully implemented by year end.
With respect to larger customers, suppliers and other key third parties,
surveys have been conducted for use in assessing their state of compliance in
order to develop plans in case of non-compliance. Customers with whom there is
electronic interchange of data are of primary focus to ensure that both the
Company and those customers are Year 2000 compliant with the standards
established for such interchange.
The approximate status for each of these areas follows:
Remediation Implementation
Assessment or and
and replacement projected
Inventory planning and testing completion
------------- ------------- ------------- --------------
Financial Substantially
systems Complete Complete complete Q4, 1999
Computer
networks
and
communi-
cations Substantially
systems Complete Complete complete Q4, 1999
Personnel
recruit-
ing and
human
resource
systems Complete Complete Complete Q4, 1999
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Remediation Implementation
Assessment or and
and replacement projected
Inventory planning and testing completion
------------- ------------- ------------- --------------
Larger Not
customers Complete Complete applicable Complete
Larger
suppliers
and Not
others Complete Complete applicable Complete
Each operating office is identifying, assessing compliance issues
and then implementing solutions for computer-aided design systems,
non-IT systems, facilities and the status of compliance by local
suppliers and third parties. Solutions for Year 2000 issues related to
computer-aided design systems, non-IT systems and facilities will, of
necessity, come from vendors and others providing the related services.
The Company, however, needs to identify compliance issues and insure
that remediation or replacement is accomplished. The Company has to
assess their state of compliance in order to develop plans in case of
non-compliance. The identification and assessment process was
completed during the second quarter, 1999, and all remediation efforts
will be completed before year end.
The cost of the Company's Year 2000 program is expected to be
approximately $2.3 million, all of which will be charged against
operations. This amount does not include costs associated with the new
financial system or the new personnel recruiting and human resource
systems discussed previously. These systems were already scheduled for
implementation and their implementation was not accelerated because of
Year 2000 issues.
As of June 30, 1999, approximately $1.8 million has been spent on
the Year 2000 program, most of which relates to the remediation effort
associated with the existing financial systems. Capital expenditures
through June 30, 1999 on the new financial system and the new personnel
recruiting and human resource systems were $19.3 million. It is
anticipated that an additional $3.2 million will be invested in these
new systems principally during the remainder of 1999. The base
functionality and features of these new systems will be further
expanded to decrease the Company's dependence on existing legacy
systems and better service internal and external customer requirements.
Relatedly, installation schedules have been adjusted to accelerate
certain large-scale implementations, including related development and
configuration in the United States, Canada and the United Kingdom.
The Company believes that its program to address Year 2000
compliance is on schedule for completion before the end of 1999.
However, there can be no assurance that there will be no material
impact as a result of Year 2000 issues, particularly considering the
dependence and interdependence that exists with third parties and that
resources for remediation and replacement may not be available in the
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time frame required. Since the Company has a greater level of control
over implementing solutions to Year 2000 issues relating to its
internal systems, it is more likely that adverse impacts on the Company
could originate with third parties rather than with the Company's
inability to have its internal systems Year 2000 compliant. If issues
related to internal systems or those related to third parties are not
resolved before the end of 1999, the consequences to the Company could
be material.
The Y2K Compliance Project Team is addressing contingency
planning. This effort involves the updating of the Company's risk
assessment, which considers current and projected project status and
its important third-party dependencies. Examples of potential
contingency plans may include targeted supply buy-aheads, consideration
of alternate suppliers and personnel deployment strategies in the event
of unforeseen facility disruption. These plans are scheduled for
completion before year end, 1999.
The Company is also developing formal "transition plans" which
will document procedures to be implemented immediately before, during
and after the turn of the millennium. Examples of transition plans may
include increased help desk staffing, expansion of systems (including
personal computers), back-up efforts and phased system shut downs and
startups immediately before and after the millennium change. These
transition plans are scheduled for completion within the third quarter,
1999.
Financial Condition
-------------------
The ratio of current assets to current liabilities was 2.1 to 1
as of June 30, 1999 and 2.3 to 1 as of December 31, 1998. The ratio of
long-term debt to total capital (long-term debt plus shareholders'
equity) was 11% as of June 30, 1999 and 13% as of December 31, 1998.
During the six months ended June 30, 1999, the Company made a
number of acquisitions in which it invested $20.8 million. These
acquisitions were accounted for using the purchase method. Assets
acquired totaled approximately $21 million including $17 million of
goodwill. These acquisitions did not have a significant effect on the
results of operations for the six months and quarter ended June 30,
1999.
The Company believes that capital resources available from
operations and financing arrangements are adequate to support the
Company's businesses.
New Accounting Standards
------------------------
In June, 1998, the Financial Accounting Standards Board issued
Statement No. 133, Accounting for Derivative Instruments and Hedging
Activities. Statement No. 133 establishes accounting and reporting
standards for derivative instruments and for hedging activities and is
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effective for fiscal quarters beginning after June 15, 2000. The
Company will determine the extent to which Statement No. 133 applies
and adopt the standards established as required. Currently, the
Company has no derivative or hedging activities.
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 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, changes in economic conditions, unforeseen
events associated with divestiture of discontinued operations and
delays or unexpected costs in making modifications to existing software
and converting to new software to resolve issues related to Year 2000
and failure of third parties to provide Year 2000 compliant products
and services. 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.
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On April 29, 1999, the Company held its annual meeting of share-
holders. The matters of business conducted at the meeting were 1) the
election of nine directors of the Company and 2) to act upon a
shareholder proposal recommending the sale of the Company's subsidiary,
Todays Staffing, Inc.
The name of each director elected at the meeting and a tabulation
of the voting by nominee follows:
Votes Votes
for withheld
---------- --------
Walter E. Blankley 17,140,676 123,280
John M. Coleman 17,064,660 199,296
Walter R. Garrison 16,725,426 538,530
Kay Hahn Harrell 17,062,969 200,987
Lawrence C. Karlson 16,724,779 539,177
Allen M. Levantin 17,142,526 121,430
Alan B. Miller 17,140,729 123,227
Mitchell Wienick 17,138,197 125,759
Barton J. Winokur 16,728,026 535,930
There were no abstentions and there were no broker non-votes.
The proposal to sell Todays Staffing, Inc. was rejected as
follows:
Votes Votes
for against Abstentions Broker non-votes
---------- ---------- ----------- ----------------
579,638 14,017,958 205,626 2,460,734
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) 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, 1997
(File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)
b. CDI Corp. 1998 Non-Qualified Stock Option Plan,
incorporated herein by reference to the EDGAR
filing made by the Registrant on April 3, 1998
in connection with the Registrant's definitive
Proxy Statement for its annual meeting of
shareholders held on May 5, 1998 (File No.
1-5519). (Constitutes a management contract
or compensatory plan or arrangement)
c. CDI Corp. Performance Share Plan, incorporated
herein by reference to the Registrant's report
on Form 10-Q for the quarter ended March 31,
1998 (File No. 1-5519). (Constitutes a manage-
ment contract or compensatory plan or arrangement)
d. CDI Corp. Management Stock Purchase Plan, incor-
porated herein by reference to the Registrant's
report on Form 10-Q for the quarter ended March
31, 1998 (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)
-16-
<PAGE>
f. Consulting Agreement dated as of April 7, 1997
by and between Registrant and Walter R. Garrison,
incorporated herein by reference to Registrant's
report on Form 10-Q for the quarter ended June
30, 1997 (File No. 1-5519). (Constitutes a
management contract or compensatory plan or
arrangement)
g. Employment Agreement dated March 11, 1997,
including Restricted Stock Agreement and Non-
Qualified Stock Option Agreement, by and between
Registrant and Mitchell Wienick, incorporated
herein by reference to the EDGAR filing made by
the Registrant on April 1, 1997 in connection
with the Registrant's definitive Proxy Statement
for its annual meeting of shareholders held on
April 28, 1997 (File No. 1-5519). (Constitutes
a management contract or compensatory plan or
arrangement)
h. Supplemental Retirement Agreement dated as of
April 7, 1997 by and between Registrant and
Mitchell Wienick, incorporated herein by
reference to the Registrant's report on Form
10-K for the year ended December 31, 1997
(File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)
i. Employment Agreement, Restricted Stock Agreement
and Non-Qualified Stock Option Agreement all
dated August 4, 1997, by and between Registrant
and Robert J. Mannarino, incorporated herein by
reference to the Registrant's report on Form 10-Q
for the quarter ended September 30, 1997 (File
No. 1-5519). (Constitutes a management contract
or compensatory plan or arrangement)
j. Supplemental Retirement Agreement dated as of
November 18, 1997 by and between Registrant and
Robert J. Mannarino, incorporated herein by
reference to the Registrant's report on Form
10-K for the year ended December 31, 1997
(File No. 1-55519). (Constitutes a management
contract or compensatory plan or arrangement)
k. Employment Agreement dated October 29, 1997,
Restricted Stock Agreement dated November 10,
1997 and Non-Qualified Stock Option Agreement
dated November 10, 1997 each by and between
Registrant and John D. Sanford, incorporated by
reference to the Registrant's report on Form
10-K for the year ended December 31, 1997
(File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)
-17-
<PAGE>
l. Supplemental Retirement Agreement dated as of
November 20, 1997 by and between Registrant and
John D. Sanford, incorporated herein by reference
to the Registrant's report on Form 10-K for the
year ended December 31, 1997 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
m. Employment Agreement dated July 8, 1997, including
Restricted Stock Agreement and Non-Qualified Stock
Option Agreement, by and between Registrant and
Brian J. Bohling, incorporated herein by reference
to the Registrant's report on Form 10-Q for the
quarter ended March 31, 1998 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
n. Supplemental Retirement Agreement dated November
18, 1997 by and between Registrant and Brian J.
Bohling, incorporated herein by reference to the
Registrant's report on Form 10-Q for the quarter
ended March 31, 1998 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
o. Employment Agreement effective January 1, 1998 by
and between Registrant and Joseph R. Seiders,
incorporated herein by reference to the
Registrant's report on Form 10-Q for the quarter
ended March 31, 1998 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
27. Financial Data Schedule.
(b) The Registrant has not filed a Form 8-K during the quarter
ended June 30, 1999.
-18-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
CDI CORP.
--------------------------------------
August 11, 1999 By: /s/ Edgar D. Landis
--------------------------------------
Chief Financial Officer
(Duly authorized officer and principal
financial officer of Registrant)
-19-
<PAGE>
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, 1997 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
b. CDI Corp. 1998 Non-Qualified Stock Option Plan,
incorporated herein by reference to the EDGAR filing
made by the Registrant on April 3, 1998 in connection
with the Registrant's definitive Proxy Statement for
its annual meeting of shareholders held on May 5,
1998 (File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)
c. CDI Corp. Performance Share Plan, incorporated herein
by reference to the Registrant's report on Form 10-Q
for the quarter ended March 31, 1998 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
d. CDI Corp. Management Stock Purchase Plan incorporated
herein by reference to the Registrant's report on
Form 10-Q for the quarter ended March 31, 1998 (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. Consulting Agreement dated as of April 7, 1997 by
and between Registrant and Walter R. Garrison,
incorporated herein by reference to Registrant's
report on Form 10-Q for the quarter ended June 30,
1997 (File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)
-20-
<PAGE>
INDEX TO EXHIBITS
Number Exhibit Page
- ------- -------------------------------------------------------- ----
g. Employment Agreement dated March 11, 1997, including
Restricted Stock Agreement and Non-Qualified Stock
Option Agreement, by and between Registrant and
Mitchell Wienick, incorporated herein by reference to
the EDGAR filing made by the Registrant on April 1,
1997 in connection with the Registrant's definitive
Proxy Statement for its annual meeting of shareholders
held on April 28, 1997 (File No. 1-5519). (Constitutes
a management contract or compensatory plan or
arrangement)
h. Supplemental Retirement Agreement dated as of April 7,
1997 by and between Registrant and Mitchell Wienick,
incorporated herein by reference to the Registrant's
report on Form 10-K for the year ended December 31,
1997 (File No. 1-5519). (Constitutes a management
contract or compensatory plan or arrangement)
i. Employment Agreement, Restricted Stock Agreement and
Non-Qualified Stock Option Agreement all dated August
4, 1997, by and between Registrant and Robert J.
Mannarino, incorporated herein by reference to the
Registrant's report on Form 10-Q for the quarter
ended September 30, 1997 (File No. 1-5519).
(Constitutes a management contract or compensatory
plan or arrangement)
j. Supplemental Retirement Agreement dated as of November
18, 1997 by and between Registrant and Robert J.
Mannarino, incorporated herein by reference to the
Registrant's report on Form 10-K for the year ended
December 31, 1997 (File No. 1-5519). (Constitutes a
management contract or compensatory plan or arrangement)
k. Employment Agreement dated October 29, 1997, Restricted
Stock Agreement dated November 10, 1997 and Non-Qualified
Stock Option Agreement dated November 10, 1997 each by
and between Registrant and John D. Sanford, incorporated
by reference to the Registrant's report on Form 10-K for
the year ended December 31, 1997 (File No. 1-5519).
(Constitutes a management contract or compensatory plan
or arrangement)
l. Supplemental Retirement Agreement dated as of November
20, 1997 by and between Registrant and John D. Sanford,
incorporated herein by reference to the Registrant's
report on Form 10-K for the year ended December 31, 1997
(File No. 1-5519). (Constitutes a management contract or
compensatory plan or arrangement)
INDEX TO EXHIBITS
Number Exhibit Page
- ------- -------------------------------------------------------- ----
m. Employment Agreement dated July 8, 1997, including
Restricted Stock Agreement and Non-Qualified Stock
Option Agreement, by and between Registrant and Brian
J. Bohling, incorporated herein by reference to the
Registrant's report on Form 10-Q for the quarter ended
March 31, 1998 (File No. 1-5519). (Constitutes a
management contract or compensatory plan or arrangement)
n. Supplemental Retirement Agreement dated November 18,
1997 by and between Registrant and Brian J. Bohling,
incorporated herein by reference to the Registrant's
report on Form 10-Q for the quarter ended March 31, 1998
(File No. 1-5519). (Constitutes a management contract
or compensatory plan or arrangement)
o. Employment Agreement effective January 1, 1998 by and
between Registrant and Joseph R. Seiders, incorporated
herein by reference to the Registrant's report on Form
10-Q for the quarter ended March 31, 1998 (File No.
1-5519). (Constitutes a management contract or
compensatory plan or arrangement)
27. Financial Data Schedule. 23
-23-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The schedule contains financial information extracted from the
consolidated financial statements of CDI Corp. and Subsidiaries and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 6,192
<SECURITIES> 0
<RECEIVABLES> 351,826
<ALLOWANCES> 5,237
<INVENTORY> 0
<CURRENT-ASSETS> 364,703
<PP&E> 105,631
<DEPRECIATION> 58,461
<TOTAL-ASSETS> 489,747
<CURRENT-LIABILITIES> 173,477
<BONDS> 33,475
0
0
<COMMON> 1,997
<OTHER-SE> 265,779
<TOTAL-LIABILITY-AND-EQUITY> 489,747
<SALES> 0
<TOTAL-REVENUES> 796,697
<CGS> 0
<TOTAL-COSTS> 590,054
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 867
<INCOME-PRETAX> 40,898
<INCOME-TAX> 16,114
<INCOME-CONTINUING> 24,130
<DISCONTINUED> 2,015
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 26,145
<EPS-BASIC> 1.37
<EPS-DILUTED> 1.37
</TABLE>
