10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2008

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: 0-24484

MPS GROUP, INC.

(Exact name of registrant as specified in its charter)

Florida	59-3116655
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1 Independent Drive, Jacksonville, FL	32202
(Address of principal executive offices)	(Zip Code)

(Registrant’s telephone number including area code): (904) 360-2000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer  x     Accelerated filer  ¨     Non-accelerated filer  ¨     Smaller reporting company  ¨

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

Indicate the number of shares outstanding of each of the issuer’s class of common stock as of October 24, 2008:

92,318,172 shares of $0.01 par value common stock

MPS Group, Inc. and Subsidiaries

Index

Part I	Financial Information
Item 1	Financial Statements
	Unaudited Condensed Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007	3
	Unaudited Condensed Consolidated Statements of Operations for the Three and Nine Months ended September  30, 2008 and 2007	4
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months ended September 30, 2008 and 2007	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4	Controls and Procedures	20
Part II	Other Information
Item 1A	Risk Factors	21
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 6	Exhibits	21
	Signatures	22

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Part I. Financial Information

Item 1. Financial Statements

MPS Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets (Unaudited)

(dollar amounts in thousands except share amounts)	September 30, 2008		December 31, 2007
ASSETS
Current assets:
Cash and cash equivalents	$	63,546	$	105,285
Short term investments		—		2,500
Accounts receivable, net of allowance of $18,663 and $20,102, respectively		343,763		323,804
Prepaid expenses		12,245		10,867
Deferred income taxes		2,527		3,785
Other		17,085		17,463
Total current assets		439,166		463,704
Furniture, equipment, and leasehold improvements, net		37,177		35,859
Goodwill, net		699,409		678,530
Other assets, net		28,488		31,558
Total assets	$	1,204,240	$	1,209,651
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	97,813	$	99,101
Accrued payroll and related taxes		98,663		88,439
Income taxes payable		2,333		11,014
Total current liabilities		198,809		198,554
Income taxes payable		7,835		7,303
Credit facility		9,023		—
Other		40,385		27,449
Total liabilities		256,052		233,306
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value; 10,000,000 shares authorized; no shares issued		—		—
Common stock, $.01 par value; 400,000,000 shares authorized; 92,655,852 and 96,789,586 shares issued, respectively		927		968
Additional contributed capital		449,013		504,969
Retained earnings		478,028		421,021
Accumulated other comprehensive income		20,220		49,387
Total stockholders’ equity		948,188		976,345
Total liabilities and stockholders’ equity	$	1,204,240	$	1,209,651

See accompanying notes to unaudited condensed consolidated financial statements.

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MPS Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations (Unaudited)

	Three Months Ended					Nine Months Ended
(dollar amounts in thousands except per share amounts)	September 30, 2008			September 30, 2007		September 30, 2008			September 30, 2007
Revenue	$	577,484		$	556,581	$	1,734,755		$	1,601,870
Cost of revenue		413,390			395,078		1,237,257			1,147,887
Gross profit		164,094			161,503		497,498			453,983
Operating expenses:
General and administrative		129,237			119,054		384,758			342,140
Depreciation and intangibles amortization		5,677			5,451		16,772			14,610
Total operating expenses		134,914			124,505		401,530			356,750
Income from operations		29,180			36,998		95,968			97,233
Other income (expense), net		(2,715	)		984		(4,259	)		5,919
Income before provision for income taxes		26,465			37,982		91,709			103,152
Provision for income taxes		9,257			14,813		34,702			39,615
Net income	$	17,208		$	23,169	$	57,007		$	63,537
Basic net income per common share	$	0.19		$	0.23	$	0.63		$	0.64
Average common shares outstanding, basic		88,459			99,071		90,159			99,951
Diluted net income per common share	$	0.19		$	0.23	$	0.62		$	0.62
Average common shares outstanding, diluted		90,315			100,802		91,738			102,246

See accompanying notes to unaudited condensed consolidated financial statements.

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MPS Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows (Unaudited)

	Nine months ended September 30,
(dollar amounts in thousands)	2008			2007
Cash flows from operating activities:
Net income	$	57,007		$	63,537
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes		15,399			18,975
Excess tax benefit from share-based awards		(320	)		(2,051	)
Share-based plans expense		8,483			5,922
Depreciation and intangibles amortization		16,772			14,610
Changes in certain assets and liabilities, net of acquisitions:
Accounts receivable		(20,426	)		(47,180	)
Prepaid expenses and other assets		(1,693	)		(2,296	)
Accounts payable and accrued expenses		(2,604	)		8,444
Accrued payroll and related taxes		11,667			21,864
Other, net		654			(1,596	)
Net cash provided by operating activities		84,939			80,229
Cash flows from investing activities:
Purchase of short term investments		—			(144,875	)
Proceeds from sale of short term investments		2,500			115,450
Purchase of furniture, equipment and leasehold improvements, net of disposals		(13,467	)		(15,917	)
Purchase of businesses, including additional consideration on acquisitions, net of cash acquired		(51,110	)		(80,553	)
Net cash used in investing activities		(62,077	)		(125,895	)
Cash flows from financing activities:
Excess tax benefit from share-based awards		320			2,051
Settlement of share-based awards		(1,855	)		(1,943	)
Repurchases of common stock		(64,407	)		(41,517	)
Payments on employee stock purchase plan, net of discount		(5	)		(28	)
Proceeds from stock options exercised		2,138			4,462
Borrowings on indebtedness		29,973			—
Repayments on indebtedness		(28,078	)		(3,073	)
Net cash used in financing activities		(61,914	)		(40,048	)
Effect of exchange rate changes on cash and cash equivalents		(2,687	)		2,469
Net decrease in cash and cash equivalents		(41,739	)		(83,245	)
Cash and cash equivalents, beginning of period		105,285			172,692
Cash and cash equivalents, end of period	$	63,546		$	89,447

See accompanying notes to unaudited condensed consolidated financial statements.

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MPS Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

(dollar amounts in thousands except per share amounts)

1. Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared by MPS Group, Inc. (“MPS”, “we”, “us”, or “our”) in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and footnote disclosures usually found in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The financial statements should be read in conjunction with the consolidated financial statements and related notes included in our Form 10-K for the year ended December 31, 2007.

The accompanying condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) which, in the opinion of management, are necessary to present fairly the financial position and results of operations for the interim periods presented. The results of operations for an interim period are not necessarily indicative of the results of operations for a full fiscal year.

New Accounting Pronouncements

In April 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. The provisions of FSP FAS 142-3 are effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application is prohibited. We do not expect the adoption of FSP FAS 142-3 to have a material effect on our consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards (“SFAS”) 141-R, Business Combinations. This statement is effective for us on January 1, 2009, and applies prospectively to business combinations for which the acquisition date is on or after January 1, 2009. SFAS 141-R significantly changes the accounting for acquisitions. Some of the major provisions are that acquisition related costs will generally be expensed as incurred, contingent consideration will be recorded at fair value on the acquisition date, with adjustments to certain forms of contingent liabilities impacting the results of operations. The impact that SFAS 141-R will have on our consolidated financial statements after adoption will depend on the nature, terms, and size of the acquisitions we consummate after adoption.

2. Share Repurchases

In the nine months ended September 30, 2008, we repurchased 5.9 million shares of our common stock on the open market for a total cost of $64.4 million. All repurchased shares were retired and accounted for using the cost method. The retirement of these shares was applied against “Additional contributed capital” on the Condensed Consolidated Balance Sheet as of September 30, 2008.

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MPS Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

(dollar amounts in thousands except per share amounts)

3. Net Income per Common Share

The calculation of basic net income per common share and diluted net income per common share is presented below:

	Three Months Ended				Nine Months Ended
(dollar amounts in thousands except per share amounts)	September 30, 2008		September 30, 2007		September 30, 2008		September 30, 2007
Basic net income per common share computation:
Net income	$	17,208	$	23,169	$	57,007	$	63,537
Basic average common shares outstanding		88,458		99,071		90,159		99,951
Incremental shares from assumed exercise of stock options and restricted stock awards		1,857		1,731		1,579		2,295
Diluted average common shares outstanding		90,315		100,802		91,738		102,246
Basic net income per common share	$	0.19	$	0.23	$	0.63	$	0.64
Diluted net income per common share	$	0.19	$	0.23	$	0.62	$	0.62

Options to purchase approximately 307,000 and 205,000 shares of common stock that were outstanding during the three months ended September 30, 2008 and 2007, respectively, were not included in the computation of diluted net income per share as the exercise prices of these options were greater than the average market price of the common shares for the respective periods. For the nine months ended September 30, 2008 and 2007, options to purchase approximately 335,000 and 149,000 shares of common stock, respectively, were not included in the computation of diluted net income per share for the aforementioned reason.

4. Commitments and Contingencies

We are a party to a number of lawsuits and claims arising out of the ordinary conduct of our business. In our opinion, based on the advice of in-house and external legal counsel, the lawsuits and claims pending are not likely to have a material adverse effect on us, our financial position, results of operations, or cash flows.

5. Segment Reporting

We disclose segment information in accordance with SFAS 131, Disclosure About Segments of an Enterprise and Related Information. We have four reportable segments: North American Professional Services, International Professional Services, North American IT Services, and International IT Services. Our reportable segments offer different services, have different client bases, experience differing economic characteristics, and are managed separately as each requires different resources and marketing strategies. Our segment results include the results from acquisitions discussed in Footnote 7, as well as in Footnote 3 to our Form 10-K for the year ended December 31, 2007. We evaluate segment performance based on revenues, gross profit, and income from continuing operations before provision for income taxes. We do not allocate income taxes, interest or unusual items to the segments. In addition, we do not report total assets by segment.

The accounting policies of the segments are consistent with those described in the summary of significant accounting policies in Footnote 2 to our Form 10-K for the year ended December 31, 2007, and all intersegment sales and transfers are eliminated. In addition, no one customer represents more than 5% of our overall revenue.

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MPS Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

(dollar amounts in thousands except per share amounts)

The following tables summarize performance, accounts receivable, net, and long-lived assets by segment, and revenue by geographic location:

	Three Months Ended						Nine Months Ended
(dollar amounts in thousands)	September 30, 2008			September 30, 2007			September 30, 2008			September 30, 2007
Revenue
North American Professional Services	$	192,185		$	176,120		$	557,453		$	512,802
International Professional Services		142,033			144,657			443,383			398,223
North American IT Services		154,765			158,919			471,854			467,546
International IT Services		88,501			76,885			262,065			223,299
Total revenue	$	577,484		$	556,581		$	1,734,755		$	1,601,870
Gross profit
North American Professional Services	$	58,380		$	56,750		$	171,296		$	162,069
International Professional Services		41,597			44,112			135,046			117,124
North American IT Services		47,797			47,033			145,525			136,100
International IT Services		16,320			13,608			45,631			38,690
Total gross profit	$	164,094		$	161,503		$	497,498		$	453,983
Income before provision for income taxes
North American Professional Services	$	17,104		$	18,467		$	51,645		$	51,215
International Professional Services		5,213			10,408			23,839			26,965
North American IT Services		10,367			12,298			33,326			33,302
International IT Services		4,009			3,551			9,879			7,973
		36,693			44,724			118,689			119,455
Corporate expenses (1)		(7,513	)		(7,726	)		(22,721	)		(22,222	)
Other income (expense), net		(2,715	)		984			(4,259	)		5,919
Total income before provision for income taxes	$	26,465		$	37,982		$	91,709		$	103,152
Geographic Areas
Revenue
North American	$	346,950		$	335,039		$	1,029,307		$	980,348
International		230,534			221,542			705,448			621,522
Total revenue	$	577,484		$	556,581		$	1,734,755		$	1,601,870

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MPS Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

(dollar amounts in thousands except per share amounts)

(dollar amounts in thousands)	September 30, 2008		December 31, 2007
Accounts receivable, net
North American Professional Services	$	110,043	$	95,758
International Professional Services		56,506		64,673
North American IT Services		117,849		115,575
International IT Services		59,365		47,798
Total accounts receivable, net	$	343,763	$	323,804
Long-lived assets
North American Professional Services	$	213,972	$	200,404
International Professional Services		168,498		184,011
North American IT Services		290,255		278,968
International IT Services		53,139		39,716
		725,864		703,099
Corporate		10,722		11,290
Total long-lived assets	$	736,586	$	714,389

(1) Corporate expenses include unallocated expenses not directly related to the segments’ operations.

6. Comprehensive Income

We disclose other comprehensive income in accordance with SFAS 130, Reporting Comprehensive Income. Comprehensive income includes unrealized gains and losses on foreign currency translation adjustments. A summary of comprehensive income for the three and nine months ended September 30, 2008 and 2007 is as follows:

	Three Months Ended					Nine Months Ended
(dollar amounts in thousands)	September 30, 2008			September 30, 2007		September 30, 2008			September 30, 2007
Net income	$	17,208		$	23,169	$	57,007		$	63,537
Unrealized gain on foreign currency translation adjustments (1)		(32,961	)		6,779		(29,167	)		15,252
Comprehensive income	$	(15,753	)	$	29,948	$	27,840		$	78,789

(1) The currency translation adjustments are not adjusted for income taxes as they relate to indefinite investments in non-U.S. subsidiaries.

7. Business Combinations

In the nine months ended September 30, 2008, we acquired a pharmacy staffing business, an IT staffing business, certain assets of a vendor management solutions business, and an IT solutions business. Purchase consideration totaled $50.3 million in cash, of which $47.9 million was paid at closing.

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MPS Group, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

(dollar amounts in thousands except per share amounts)

8. Goodwill and Other Identifiable Intangible Assets

The changes in the carrying amount of goodwill for 2008 are as follows:

	Professional Services						IT Services
(dollar amounts in thousands)	North American			International			North American			International			Total
Balance as of December 31, 2007	$	195,883		$	177,380		$	268,550		$	36,717		$	678,530
Acquisitions		(38	)		61			7,716			—			7,739
Effect of foreign currency exchange rates		—			920			(312	)		85			693
Balance as of March 31, 2008		195,845			178,361			275,954			36,802			686,962
Acquisitions		12,663			—			158			17,594			30,415
Effect of foreign currency exchange rates		—			1,278			107			130			1,515
Balance as of June 30, 2008		208,508			179,639			276,219			54,526			718,892
Acquisitions		11			—			2,771			924			3,706
Effect of foreign currency exchange rates		—			(17,805	)		(190	)		(5,194	)		(23,189	)
Balance as of September 30, 2008	$	208,519		$	161,834		$	278,800		$	50,256		$	699,409

We allocated the purchase price of acquisitions in accordance with SFAS 141, Business Combinations. At September 30, 2008 and December 31, 2007, there was $8.7 million and $10.0 million, respectively, of identifiable intangible assets on our Condensed Consolidated Balance Sheets relating to our acquisitions. Identifiable intangible assets relate primarily to the value of the acquired business’ customer relationships and trade names at the acquisition date.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

References to “we”, “our”, “us”, or “MPS” in this Quarterly Report on Form 10-Q refer to MPS Group, Inc. and its consolidated subsidiaries, unless the context requires otherwise.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that are subject to certain risks, uncertainties or assumptions and may be affected by certain factors, including but not limited to the specific factors discussed in our Form 10-K for the year ended December 31, 2007 in Part I, Item 1A under ‘Risk Factors,’ in Part II, Item 5 under ‘Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities’, and Part II, Item 7 under ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations.’ In some cases, you can identify forward-looking statements by terminology such as ‘may,’ ‘should,’ ‘could,’ ‘expects,’ ‘plans,’ ‘indicates,’ ‘projects,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘appears,’ ‘predicts,’ ‘probably,’ ‘potential,’ ‘continues,’ ‘can,’ ‘hopes,’ ‘perhaps,’ ‘would,’ ‘seek,’ or ‘become,’ or the negative of these terms or other comparable terminology. In addition, except for historical facts, all information provided in Part II, Item 7A of our Form 10-K for the year ended December 31, 2007, under ‘Quantitative and Qualitative Disclosures About Market Risk’ as referenced by Item 3 herein should be considered forward-looking statements. Should one or more of these risks, uncertainties or other factors materialize, or should underlying assumptions prove incorrect, actual results, performance or achievements of MPS may vary materially from any future results, performance or achievements expressed or implied by such forward-looking statements.

Forward-looking statements are based on beliefs and assumptions of our management and on information currently available to such management. Forward-looking statements speak only as of the date they are made, and MPS undertakes no obligation to publicly update any of them in light of new information or future events. Undue reliance should not be placed on such forward-looking statements, which are based on current expectations. Forward-looking statements are not guarantees of performance.

Executive Summary

We are a leading provider of business services with over 225 offices in the United States, Canada, the United Kingdom, continental Europe, Australia, and Asia. We deliver specialty staffing, consulting and business solutions to virtually all industries in the following disciplines, through the following primary brands:

Discipline	Brand(s)
Information Technology (IT) Services	Modis®
Accounting and Finance	Badenoch & Clark® , Accounting Principals®
Engineering	Entegee®
Legal	Special Counsel®
IT Solutions	Idea Integration®
Healthcare	Soliant Health®
Workforce Automation	Beeline®

We present the financial results of the above brands under our four reporting segments: North American Professional Services, International Professional Services, North American IT Services and International IT Services. The accounting policies of these segments are consistent with those described in Part II, Item 7 under ‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’ to our Form 10-K for the year ended December 31, 2007.

For the quarter ended September 30, 2008, our consolidated revenue increased 4% and our consolidated operating income decreased 21% compared to the third quarter of the prior year. Revenue grew in our North

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American Professional Services segment and our International IT Services segment and decreased in our North American IT Services segment and our International Professional Services segment compared to the third quarter of 2007. Looking ahead to the fourth quarter of 2008, we expect revenue and operating income to decrease in all four of our segments due to weakening economic conditions in the markets in which we do business.

The demand for our services is highly dependent upon the state of the economy and upon the staffing needs of our clients. Economic conditions worsened throughout the third quarter and into the fourth quarter of 2008, further reducing the demand for our services. This deterioration was more evident in our international segments than in our North American segments and more in our permanent placement business than in our staffing business. We expect permanent placement fees to weaken first as economic conditions worsen. This permanent placement weakening is evident in our third quarter results. In particular, permanent placement fees, which generate a higher gross margin, decreased 16% from the second quarter of 2008 to the third quarter of 2008. This decrease occurred primarily in our International Professional Services segment and to a lesser extent in our North American Professional Services segment. Staffing services in both our North American and international segments were not as impacted in the third quarter of 2008 by the worsening economic conditions. However, our staffing services revenue decreased during October 2008, as compared to September 2008. If economic conditions continue to deteriorate demand for both our permanent placement fees and staffing services will likely further decrease and our revenues and profits will decrease.

Our revenue and to a lesser extent profits, are impacted by fluctuations in foreign currency exchange rates. The British Pound, the main functional currency for our international segments, weakened against the United States Dollar throughout the third quarter. We continued to see this devaluation of the British Pound into October 2008. If this trend does not reverse for the remainder of the fourth quarter of 2008, our revenue for the fourth quarter will be significantly reduced.

We expect to realize a decrease in compensation expenses associated with decreases in revenue as many of our employees are compensated based on revenue production. As economic conditions weaken, we can take steps to improve our cost efficiency including slowing the hiring of new staff, reducing personnel through attrition and eliminating staff positions. If we do not undertake short-term steps to improve our cost efficiency, the revenue declines discussed above could have a greater negative impact on our operating income. However, we do not want to take actions that may impede our ability to grow revenue once the economic conditions strengthen.

In accordance with Statement of Financial Accounting Standards (“SFAS”) 142, Goodwill and Other Intangible Assets, we are required to annually review our goodwill for any indications of impairment utilizing a fair-value approach. We use an equally blended value of a discounted cash flow analysis and a market comparables analysis to arrive at fair value for SFAS No. 142. Since our adoption of this pronouncement in 2002, we have performed our annual impairment review during the fourth quarter of each fiscal year, and we are scheduled once more to perform this review during the fourth quarter of 2008. If economic conditions continue to weaken and reduce the fair value of our reporting units below their respective carrying values, combined with a recent decline in the valuations of our market comparable companies, we could recognize a goodwill impairment charge during the fourth quarter of 2008. Although a goodwill impairment charge impacts operating income, it is a non-cash charge.

The following detailed analysis of operations should be read in conjunction with the Condensed Consolidated Financial Statements and related notes thereto included in Part 1, Item 1 of this Quarterly Report on Form 10-Q and the 2007 Consolidated Financial Statements and related notes included in our Form 10-K for the year ended December 31, 2007.

Results Of Operations For The Three and Nine Months Ended September 30, 2008 and 2007—Consolidated

Consolidated revenue was $577.5 million and $556.6 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 3.8%. Consolidated revenue was $1,734.8 million and $1,601.9 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 8.3%.

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Revenue from our Professional Services division represented 58% of consolidated revenue in the three months ended September 30, 2008 and 2007. Revenue from our international segments represented 40% of consolidated revenue in the three months ended September 30, 2008 and 2007. Revenue from our international segments is directly impacted by changes in foreign currency exchange rates as we do not hedge our financial statement exposure to foreign currency exchange movements.

During 2007 and through September 30, 2008, we completed eleven acquisitions. We target potential acquisitions that will either increase the geographic presence of our businesses or provide complementary service offerings. Five acquisitions were completed within our North American Professional Services segment that expanded our geographic footprint and increased our market penetration in our legal and healthcare units, and increased our recruitment pipeline in our healthcare unit. We refer to these acquisitions herein as the North American Professional Acquisitions. Four acquisitions were completed in our North American IT Services segment that increased our service offerings and market penetration in our IT solutions and workforce solutions units. We refer to these acquisitions herein as the North American IT Acquisitions. One acquisition was completed in our International Professional Services segment that increased our service offerings and geographic footprint. We refer to this acquisition herein as the International Professional Acquisition. One acquisition was completed in our International IT Services segment that increased our geographic footprint. We refer to this acquisition herein as the International IT Acquisition.

Consolidated gross profit was $164.1 million and $161.5 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 1.6%. Consolidated gross margin was 28.4% and 29.0% in the three months ended September 30, 2008 and 2007, respectively. Consolidated gross profit was $497.5 million and $454.0 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 9.6%. Consolidated gross margin was 28.7% and 28.3% in the nine months ended September 30, 2008 and 2007, respectively.

We continue to look for opportunities to increase gross margin, which can be accomplished through better management of the bill and pay rate spread, acquiring companies with higher margins, and focusing more resources on permanent placement. In addition, we aim to leverage existing staff while investing in future growth opportunities and personnel. We were able to increase our staffing gross margin 30 basis points to 24.4% in the third quarter of 2008 from 24.1% in the year earlier period. The staffing gross margins increased in our North American and International IT Services segments, and decreased in our North American and International Professional Services segments. For the three months ended September 30, 2008, gross margin was negatively impacted by a decline in the percentage of revenue attributable to permanent placement fees, which has been decreasing in all four of our segments. Permanent placement fees represented 5.3% of revenue in the third quarter of 2008, down from 6.5% in the year earlier period.

Consolidated operating expenses were $134.9 million and $124.5 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 8.4%. General and administrative (“G&A”) expenses, which are included in operating expenses, were $129.2 million and $119.1 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 8.5%. Consolidated operating expenses were $401.5 million and $356.8 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 12.5%. G&A expenses were $384.8 million and $342.1 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 12.5%.

Unallocated corporate expenses, included in consolidated operating expenses, pertain to certain functions such as executive management, accounting, administration, tax, and treasury that are not directly attributable to our operating units. Unallocated corporate expense was $7.5 million and $7.7 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 2.6%. As a percentage of revenue, unallocated corporate expense was 1.3% and 1.4% for the three months ended September 30, 2008 and 2007,

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respectively. Unallocated corporate expense was $22.7 million and $22.2 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 2.3%. As a percentage of revenue, unallocated corporate expense was 1.3% and 1.4% for the nine months ended September 30, 2008 and 2007, respectively.

Consolidated operating income was $29.2 million and $37.0 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 21.1%. Operating income as a percentage of revenue was 5.1% and 6.6% for the three months ended September 30, 2008 and 2007, respectively. Consolidated operating income was $96.0 million and $97.2 million in the nine months ended September 30, 2008 and 2007, respectively, representing a decrease of 1.2%. Operating income as a percentage of revenue was 5.5% and 6.1% for the nine months ended September 30, 2008 and 2007, respectively.

Consolidated other expense, net, was $2.7 million and consolidated other income, net, was $1.0 million in the three months ended September 30, 2008 and 2007, respectively. Consolidated other expense, net, was $4.3 million and consolidated other income, net, was $5.9 million in the nine months ended September 30, 2008 and 2007, respectively. Included in the three and nine months ended September 30, 2007 was $1.0 million interest benefit from the settlement of a state income tax audit. Other income (expense), net, primarily includes changes in the cash surrender value of our company-owned life insurance, interest income related to our investments and cash on hand, net of interest expense related to notes issued in connection with acquisitions and fees and interest on our credit facility. The cash surrender value of our company-owned life insurance decreased by $2.6 million and $5.1 million from the three and nine months ended September 30, 2007 to the three and nine months ended September 30, 2008, respectively. The decrease in the cash surrender value of our company-owned life insurance was due to a decrease in the value of the equity mutual funds within our company-owned life insurance.

The consolidated income tax provision was $9.3 million and $14.8 million in the three months ended September 30, 2008 and 2007, respectively. The effective tax rate was 35.0% and 39.0% in the three months ended September 30, 2008 and 2007, respectively. The consolidated income tax provision was $34.7 million and $39.6 million in the nine months ended September 30, 2008 and 2007, respectively. The effective tax rate was 37.8% and 38.4% in the nine months ended September 30, 2008 and 2007, respectively. The decrease in the effective tax rate for the three and nine months ended September 30, 2008 was due to the recognition of certain tax credits. We expect an increased effective tax rate in the fourth quarter due primarily to decreased earnings from our international segments.

Consolidated net income was $17.2 million and $23.2 million in the three months ended September 30, 2008 and 2007, respectively. Consolidated net income was $57.0 million and $63.5 million in the nine months ended September 30, 2008 and 2007, respectively.

Results Of Operations For The Three and Nine Months Ended September 30, 2008 and 2007—By Business Segment

Professional Services Division

North American Professional Services Segment

Revenue in our North American Professional Services segment was $192.2 million and $176.1 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 9.1%. Revenue in our North American Professional Services segment was $557.5 million and $512.8 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 8.7%. North American Professional Acquisitions contributed $9.9 million and $20.7 million in revenue in the three and nine months ended September 30, 2008, respectively. The increase in revenue for the three months ended September 30, 2008 was due primarily to an acquisition in the segment’s Soliant Health business unit and internal growth in the Special Counsel business unit. The increase in revenue for the nine months ended September 30, 2008 was due primarily to revenue from internal growth and acquisitions in the segment’s Special Counsel business unit, and internal growth in the Entegee business unit.

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Revenue contribution from the North American Professional Services businesses for the three and nine months ended September 30, 2008 and 2007 were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Entegee	42.9	%	44.6	%	43.5	%	44.8	%
Special Counsel	25.8		24.2		26.4		23.1
Accounting Principals	13.0		16.6		13.6		16.4
Soliant Health	18.3		14.6		16.5		15.7

Gross profit in our North American Professional Services segment was $58.4 million and $56.8 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 2.8%. Gross profit in our North American Professional Services segment was $171.3 million and $162.1 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 5.7%. North American Professional Acquisitions contributed $3.0 million and $8.4 million in gross profit in the three and nine months ended September 30, 2008, respectively. Gross margin in our North American Professional Services segment was 30.4% and 32.3% in the three months ended September 30, 2008 and 2007, respectively, and 30.7% and 31.6% in the nine months ended September 30, 2008 and 2007, respectively. The decrease in gross margin in the three and nine months ended September 30, 2008 was due primarily to a decrease in the level of permanent placement fees as a percentage of total segment revenue, and a decrease in staffing margins in the Special Counsel business unit resulting from increased sales and delivery of document review projects, which typically generate a lower staffing margin. Permanent placement fees, which generate a higher margin, decreased to 5.5% of the segment’s revenue in the three months ended September 30, 2008, from 7.2% in the year earlier period, and decreased to 5.9% of the segment’s revenue in the nine months ended September 30, 2008, from 6.6% in the year earlier period.

G&A expenses in our North American Professional Services segment were $39.9 million and $36.8 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 8.4%. As a percentage of revenue, G&A expenses were 20.8% and 20.9% in the three months ended September 30, 2008 and 2007, respectively. G&A expenses in our North American Professional Services segment were $115.7 million and $106.8 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 8.3%. As a percentage of revenue, G&A expenses were 20.8% in the nine months ended September 30, 2008 and 2007. The increase in G&A expenses for the three and nine months ended September 30, 2008 was due primarily to additional G&A expenses from the North American Professional Acquisitions.

Operating income in our North American Professional Services segment was $17.1 million and $18.5 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 7.6%. Operating income as a percentage of revenue was 8.9% and 10.5% in the three months ended September 30, 2008 and 2007, respectively. Operating income in our North American Professional Services segment was $51.6 million and $51.2 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of .8%. Operating income as a percentage of revenue was 9.3% and 10.0% in the nine months ended September 30, 2008 and 2007, respectively.

International Professional Services Segment

Revenue in our International Professional Services segment was $142.0 million and $144.7 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 1.9%. Revenue in our International Professional Services segment was $443.4 million and $398.2 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 11.4%. Changes in foreign currency exchange rates decreased revenue by $8.1 million and $3.9 million from the three and nine months ended September 30, 2007 to the three and nine months ended September 30, 2008, respectively. International

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Professional Acquisitions contributed $4.0 million and $28.8 million in revenue in the three and nine months ended September 30, 2008, respectively. Apart from the effect of changes in foreign currency exchange rates and the execution of our acquisition strategy, the increase in revenue for the nine months ended September 30, 2008 was due to the increased demand for our services.

Gross profit in our International Professional Services segment was $41.6 million and $44.1 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 5.7%. Gross profit in our International Professional Services segment was $135.0 million and $117.1 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 15.3%. Changes in foreign currency exchange rates decreased gross profit by $2.0 million and $325,000 from the three and nine months ended September 30, 2007 to the three and nine months ended September 30, 2008, respectively. The International Professional Acquisition contributed $2.5 million and $18.3 million in gross profit in the three and nine months ended September 30, 2008. Gross margin in our International Professional Services segment was 29.3% and 30.5% in the three months ended September 30, 2008 and 2007, respectively, and 30.4% and 29.4% in the nine months ended September 30, 2008 and 2007, respectively. The decrease in gross margin for the three months ended September 30, 2008 was due primarily to a decrease in the level of permanent placement fees as a percentage of total segment revenue. The increase in gross margin in the nine months ended September 30, 2008 was due primarily to increased permanent placement fees contributed by the International Professional Acquisition, and to a lesser extent an increase in gross margins from the segment’s staffing services. Permanent placement fees decreased to 10.4% of the segment’s revenue for the three months ended September 30, 2008, from 11.9% in the year earlier period, and increased to 11.6% of the segment’s revenue for the nine months ended September 30, 2008, from 10.4% in the year earlier period.

G&A expenses in our International Professional Services segment were $34.9 million and $32.5 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 7.4%. As a percentage of revenue, G&A expenses were 24.6% and 22.5% in the three months ended September 30, 2008 and 2007, respectively. G&A expenses in our International Professional Services segment were $106.8 million and $87.2 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 22.5%. As a percentage of revenue, G&A expenses were 24.1% and 21.9% in the nine months ended September 30, 2008 and 2007, respectively. The increase in G&A expenses for the three months ended September 30, 2008, was due primarily to additional G&A expenses from the International Professional Acquisition. The increase in G&A expenses for the nine months ended September 30, 2008, was due primarily to additional G&A expenses from the International Professional Acquisition, and to a lesser extent, investments and restructuring efforts in our European operations.

Operating income in our International Professional Services segment was $5.2 million and $10.4 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 50.0%. Operating income as a percentage of revenue was 3.7% and 7.2% in the three months ended September 30, 2008 and 2007, respectively. Operating income in our International Professional Services segment was $23.8 million and $27.0 million in the nine months ended September 30, 2008 and 2007, respectively, representing a decrease of 11.9%. Operating income as a percentage of revenue was 5.4% and 6.8% in the nine months ended September 30, 2008 and 2007, respectively.

IT Services Division

North American IT Services Segment

Revenue in our North American IT Services segment was $154.8 million and $158.9 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 2.6%. Revenue in our North American IT Services segment was $471.9 million and $467.5 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 0.9%. Changes in foreign currency exchange rates increased revenue by $2.3 million from the nine months ended September 30, 2007 to the nine months ended September 30, 2008. North American IT Acquisitions contributed $3.1 million and $9.3 million in

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revenue in the three and nine months ended September 30, 2008, respectively. Apart from the execution of our acquisition strategy, the decrease in revenue for the three and nine months ended September 30, 2008 was due primarily to the wind down of certain lower-margin client contracts in the Modis business unit.

Revenue within the North American IT Services segment is generated primarily from Modis, as it generated 78.7% and 81.4% of the segment’s revenue for the three months ended September 30, 2008 and 2007, respectively. Idea Integration and Beeline are responsible for the remainder of this segment’s revenue.

Gross profit in our North American IT Services segment was $47.8 million and $47.0 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 1.7%. Gross profit in our North American IT Services segment was $145.5 million and $136.1 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 6.9%. Changes in foreign currency exchange rates increased gross profit by $428,000 from the nine months ended September 30, 2007 to the nine months ended September 30, 2008. North American IT Acquisitions contributed $2.3 million and $6.2 million in gross profit in the three and nine months ended September 30, 2008, respectively. Gross margin in our North American IT Services segment was 30.9% and 29.6% in the three months ended September 30, 2008 and 2007, respectively. Gross margin in our North American IT Services segment was 30.8% and 29.1% in the nine months ended September 30, 2008 and 2007, respectively. The increase in gross margin for the three and nine months ended September 30, 2008 was due to increased fees generated from our Beeline business unit, which generates higher margins than the other business units. Increased gross margins from the Modis business unit’s staffing services were offset by decreased permanent placement fees. Permanent placement fees decreased to 1.6% of the segment’s revenue for the three months ended September 30, 2008, from 2.2% in the year earlier period, and decreased to 1.7% of the segment’s revenue for the nine months ended September 30, 2008, from 1.8% in the year earlier period.

G&A expenses in our North American IT Services segment were $35.1 million and $32.7 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 7.3%. As a percentage of revenue, G&A expenses were 22.7% and 20.6% in the three months ended September 30, 2008 and 2007, respectively. G&A expenses in our North American IT Services segment were $105.4 million and $97.0 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 8.7%. As a percentage of revenue, G&A expenses were 22.3% and 20.7% in the nine months ended September 30, 2008 and 2007, respectively. The increase in the segment’s G&A expenses for the three and nine months ended September 30, 2008, was due to a combination of investments in our Beeline unit and additional G&A expenses from the North American IT Acquisitions.

Operating income in our North American IT Services segment was $10.4 million and $12.3 million in the three months ended September 30, 2008 and 2007, respectively, representing a decrease of 15.4%. Operating income as a percentage of revenue was 6.7% and 7.7% in the three months ended September 30, 2008 and 2007, respectively. Operating income in our North American IT Services segment was $33.3 million in the nine months ended September 30, 2008 and 2007. Operating income as a percentage of revenue was 7.1% in the nine months ended September 30, 2008 and 2007.

International IT Services Segment

Revenue in our International IT Services segment was $88.5 million and $76.9 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 15.1%. Revenue in our International IT Services segment was $262.1 million and $223.3 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 17.4%. Changes in foreign currency exchange rates decreased revenue by $5.6 million and $4.7 million from the three and nine months ended September 30, 2007 to the three and nine months ended September 30, 2008, respectively. The International IT Acquisition contributed $7.2 million and $13.6 million in revenue in the three and nine months ended September 30, 2008. Apart from the effect of the execution of our acquisition strategy, the increase in revenue for the three and nine months ended September 30, 2008 was due to the increased demand for our services.

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Gross profit in our International IT Services segment was $16.3 million and $13.6 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 19.9%. Gross profit in our International IT Services segment was $45.6 million and $38.7 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 17.8%. Changes in foreign currency exchange rates decreased gross profit by $1 million and $778,000 from the three and nine months ended September 30, 2007 to the three and nine months ended September 30, 2008, respectively. The International IT Acquisition contributed $1.9 million and $3.6 million in gross profit in the three and nine months ended September 30, 2008, respectively. Gross margin in our International IT Services segment was 18.4% and 17.7% in the three months ended September 30, 2008 and 2007, respectively, and 17.4% and 17.3% in the nine months ended September 30, 2008 and 2007, respectively. The increase in gross margin for the three and nine months ended September 30, 2008 was due to increased gross margins from the segment’s staffing services. Permanent placement fees as a percentage of revenue remained roughly flat for the three months ended September 30, 2008, as compared to the prior year period, and decreased slightly for the nine months ended September 30, 2008, as compared to the prior year period.

G&A expenses in our International IT Services segment were $11.9 million and $9.4 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 26.6%. As a percentage of revenue, G&A expenses were 13.4% and 12.2% in the three months ended September 30, 2008 and 2007, respectively. G&A expenses in our International IT Services segment were $34.1 million and $28.9 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 18.0%. As a percentage of revenue, G&A expenses were 13.0% and 12.9% in the nine months ended September 30, 2008 and 2007, respectively. Apart from the effect of increased G&A expenses from the International IT acquisition, the increase in G&A expenses for the three and nine months ended September 30, 2008 was due primarily to increases in sales and recruiting personnel and to a lesser extent increases in compensation expense related to the increases in the segment’s revenue. G&A expenses in the nine months ended September 30, 2007 included expenses associated with certain management restructuring activities, which contributed to the increased G&A expenses as a percentage of revenue in the nine months ended September 30, 2007.

Operating income in our International IT Services segment was $4.0 million and $3.6 million in the three months ended September 30, 2008 and 2007, respectively, representing an increase of 11.1%. Operating income as a percentage of revenue was 4.5% and 4.7% in the three months ended September 30, 2008 and 2007, respectively. Operating income in our International IT Services segment was $9.9 million and $8.0 million in the nine months ended September 30, 2008 and 2007, respectively, representing an increase of 23.8%. Operating income as a percentage of revenue was 3.8% and 3.6% in the nine months ended September 30, 2008 and 2007, respectively.

Liquidity and Capital Resources

Overview

We intend to generate stockholder value through strategic investments in our existing businesses, acquisitions, and stock repurchases, as appropriate. Changes to our liquidity have historically been due primarily to the net effect of: (i) funds generated by operations; and (ii) acquisitions, repurchases of common stock and capital expenditures. While there can be no assurances in this regard, we believe that funds provided by operations, our current cash balances, and borrowings available to us under our existing credit facility will be sufficient to meet our presently anticipated needs for working capital, capital expenditures, repurchases of common stock and acquisitions for at least the next 12 months.

In the nine months ended September 30, 2008, cash of $126.7 million used in investing and financing activities and the effect of changes in foreign currency exchange rates exceeded the $84.9 million of cash provided from operating activities. Our net decrease in cash in the nine months ended September 30, 2008 was due primarily to repurchases of our common stock and acquisitions. In the nine months ended September 30,

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2007, cash of $165.9 million used in investing and financing activities exceeded the $82.7 million of cash provided from operating activities and the effect of changes in foreign currency exchange rates. Our net decrease in cash in the nine months ended September 30, 2007 was due primarily to acquisitions, repurchases of our common stock, and our purchases of short term investments. The table below highlights working capital, cash and cash equivalents and short term investments as of September 30, 2008 and December 31, 2007, respectively:

(dollar amounts in millions)	September 30, 2008		December 31, 2007
Working capital	$	240.4	$	265.2
Cash and cash equivalents and short term investments	$	63.5	$	107.8

Operating cash flows

For the nine months ended September 30, 2008 and 2007, we generated $84.9 million and $80.2 million of cash flow from operations, respectively. The increase in cash flow from operations was due primarily to increased cash collections on trade receivables.

Investing cash flows

For the nine months ended September 30, 2008, we used $62.1 million of cash for investing activities, including $51.1 million for acquisitions, net of cash acquired, and $13.5 million for capital expenditures.

For the nine months ended September 30, 2007, we used $125.9 million of cash for investing activities, including $80.6 million for acquisitions, net of cash acquired, $29.4 million for short term investments, net of sale proceeds, and $15.9 million for capital expenditures.

We anticipate that capital expenditures for furniture and equipment, including improvements to our management information and operating systems, for the remainder of 2008 will be approximately $5.0 million.

Financing cash flows

For the nine months ended September 30, 2008, we used $61.9 million of cash for financing activities, consisting primarily of $64.4 million for the repurchase of common stock. For the nine months ended September 30, 2007, we used $40.0 million of cash for financing activities, consisting primarily of $41.5 million for the repurchase of common stock.

Our Board of Directors has authorized certain repurchases of our common stock. We repurchased $5.9 million shares at an aggregate cost of $64.4 million in the nine months ended September 30, 2008. From the third quarter of 2002 through October 24, 2008, we have repurchased and retired a total of 26.0 million shares at a cost of $284.2 million under these authorizations. We have approximately $33.3 million remaining under these authorizations as of October 24, 2008. There is no expiration date for these authorizations.

Indebtedness of the Company

We have a $250 million revolving credit facility which is syndicated to a group of leading financial institutions and contains certain financial and non-financial covenants relating to our operations, including maintaining certain financial ratios. Repayment of the credit facility is guaranteed by substantially all of our subsidiaries. The facility expires in November 2011. As of October 24, 2008, we have $7.9 million in borrowings outstanding under this facility, as well as $8.5 million of standby letters of credit for certain operational matters.

Seasonality

Our quarterly operating results are affected by the number of billing days in the quarter and the seasonality of our customers’ businesses. Demand for our services has historically been lower during the calendar year-end, as a result of holidays, through February of the following year, as our customers approve annual budgets.

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Extreme weather conditions may also adversely affect demand in the early part of the year as certain of our clients’ facilities are located in geographic areas subject to closure or reduced hours due to inclement weather. In addition, we experience an increase in our cost of sales and a corresponding decrease in gross profit and gross margin in the first fiscal quarter of each year, as a result of certain state and federal employment tax resets.

New Accounting Pronouncements

In April 2008, the Financial Accounting Standards Board (“FASB”) issued FASB Staff Position No. FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, Goodwill and Other Intangible Assets. The provisions of FSP FAS 142-3 are effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application is prohibited. We do not expect the adoption of FSP FAS 142-3 to have a material effect on our consolidated financial statements.

In December 2007, the FASB issued SFAS 141-R, Business Combinations. This statement is effective for us on January 1, 2009, and applies prospectively to business combinations for which the acquisition date is on or after January 1, 2009. SFAS 141-R significantly changes the accounting for acquisitions. Some of the major provisions are that acquisition related costs will generally be expensed as incurred, contingent consideration will be recorded at fair value on the acquisition date, with adjustments to certain forms of contingent liabilities impacting the results of operations. The impact that SFAS 141-R will have on our consolidated financial statements after adoption will depend on the nature, terms, and size of the acquisitions we consummate after adoption.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For information regarding our exposure to certain market risk, see “Quantitative and Qualitative Disclosures About Market Risk” in Part II, Item 7A to our Form 10-K for the year ended December 31, 2007. There were no material changes to our market risk for the three and nine months ended September 30, 2008.

Item 4. Controls and Procedures

We maintain a set of disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports filed by us under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that information required to be disclosed by us in the reports we file or submit under the Securities Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our management, with the supervision and participation of our Chief Executive Officer and our Chief Financial Officer, conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report.

There has been no change in our internal control over financial reporting (as defined in Securities Exchange Act Rule 13a-15(f)) that occurred during the last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

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Part II. Other Information

Item 1A. Risk Factors

In addition to the other information set forth in this Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A, “Risk Factors” in our Form 10-K for the year ended December 31, 2007, which could materially affect our business, financial condition or future results. The risks described in the Form 10-K are not the only risks facing MPS. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, or operating results.

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

Issuer Repurchases of Equity Securities

Our Board of Directors has authorized certain repurchases of our common stock, the last of which increased this authorization by an additional $75 million in January of 2008. The following table sets forth information about our common stock repurchases for the three months ended September 30, 2008. From the third quarter of 2002 through October 24, 2008, we have repurchased a total of 26.0 million shares at a cost of $284.2 million under these authorizations. We have approximately $33.3 million remaining under these authorizations as of October 24, 2008. There is no expiration date for these authorizations.

Period (1)	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number (or Approximate Dollar Value) of Shares That May Yet be Purchased Under the Plans or Programs
July 1, 2008 to July 31, 2008	419,425	$	10.46	419,425	$	41,069,821
August 1, 2008 to August 31, 2008	—		—	—		41,069,821
September 1, 2008 to September 30, 2008	452,500		11.81	452,500		35,727,763
Total	871,925	$	11.16	871,925	$	35,727,763

(1) Based on trade date, not settlement date.

Item 6. Exhibits

A. Exhibits Required by Item 601 of Regulation S-K:

See Index of Exhibits.

Exhibit No.	Description
31.1*	Certification of Timothy D. Payne pursuant to Rule 13a-14(a).
31.2*	Certification of Robert P. Crouch pursuant to Rule 13a-14(a).
32.1*	Certification of Timothy D. Payne pursuant to 18 U.S.C. Section 1350.
32.2*	Certification of Robert P. Crouch pursuant to 18 U.S.C. Section 1350.

* Copy of Exhibit is filed herewith.

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SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned there onto duly authorized

MPS GROUP, INC.
By:	/s/ Robert P. Crouch
	Robert P. Crouch Senior Vice President, Treasurer, and Chief Financial Officer (Principal Financial Officer and duly authorized signatory)

Date: November 5, 2008

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EX-31.1

Exhibit 31.1

MPS GROUP, INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Timothy D. Payne, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MPS Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2008

/s/ Timothy D. Payne

Timothy D. Payne

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

MPS GROUP, INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

I, Robert P. Crouch, certify that:

1. I have reviewed this quarterly report on Form 10-Q of MPS Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 5, 2008

/s/ Robert P. Crouch

Robert P. Crouch

Senior Vice President, Treasurer and
Chief Financial Officer

EX-32.1

Exhibit 32.1

MPS GROUP, INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2008 of MPS Group, Inc. (the “Form 10-Q”), I, Timothy D. Payne, President, Chief Executive Officer and Director of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Timothy D. Payne

Timothy D. Payne

President and Chief Executive Officer

November 5, 2008

EX-32.2

Exhibit 32.2

MPS GROUP, INC. AND SUBSIDIARIES

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the fiscal quarter ending September 30, 2008 of MPS Group, Inc. (the “Form 10-Q”), I, Robert P. Crouch, Senior Vice President, Treasurer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Form 10-Q fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Robert P. Crouch    

Robert P. Crouch

Senior Vice President, Treasurer and
Chief Financial Officer

November 5, 2008