TABLE OF CONTENTS




|                                                                                                                                                                    |  |  |  |  |  |  |  | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  |  |  |  |  | 
|COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES INDEX                                                                                                           
|COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES condensed consolidated balance sheets                                                                           
|COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES condensed consolidated statements of income                                                                     
|COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES condensed consolidated statements of cash flows                                                                 
|COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In thousands, except share and per share data) (Unaudited)
|SIGNATURES                                                                                                                                                         
|EXHIBIT INDEX                                                                                                                                                      



---









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION


WASHINGTON, D.C. 20549


FORM 10-Q



[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF



For the quarterly period ended September 30, 1999

OR

[   ]  TRANSITION REPORT PURSUANT TO SECTION
13 OR 15(d) OF



For the transition period from
                           to

Commission file number: 0-22141

COMPLETE BUSINESS SOLUTIONS, INC.




Michigan





38-2606945






32605 West Twelve Mile Road

Suite 250


Farmington Hills, Michigan 48334




Registrants telephone number, including area code: (248)
 488-2088

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 the number of shares outstanding of each of the
issuers classes of common stock, as of the latest
practicable date.

No Par Value



37,327,549












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##### Table of Contents








COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES


INDEX

|                              |  |                                                                                        |    |          |   | 
|----------------------------- |  | -------------------------------------------------------------------------------------- | -- | -------- | - | 
|                              |  |                                                                                        |    | Page No.
|                              |  |                                                                                        |    |         
|                             
|                             
|                             
|                             
|PART I. FINANCIAL INFORMATION |  |                                                                                        |    |         
|Item 1.                       |  | Financial Statements                                                                   |    |          |   | 
|                             
|                             
|                             
|                             
|                              |  | Condensed Consolidated Balance Sheets                                                  |    |          | 3 | 
|                             
|                             
|                             
|                             
|                              |  | Condensed Consolidated Statements of Income                                            |    |          | 4 | 
|                             
|                             
|                             
|                             
|                              |  | Condensed Consolidated Statements of Cash Flows                                        |    |          | 5 | 
|                             
|                             
|                             
|                             
|                              |  | Notes to Condensed Consolidated Financial Statements                                   |    |          | 6 | 
|                             
|                             
|                             
|                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial Condition
	and Results of Operations |    |          | 7 | 
|                             
|                             
|                             
|                             
|PART II. OTHER INFORMATION    |  |                                                                                        |    |         
|                             
|                             
|                             
|                             
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                       |    |          | 9 | 
|                             
|                             
|                             
|                             
|                             
|SIGNATURES                    |  |                                                                                        | 10 |         

2



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##### Table of Contents



PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements






COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED BALANCE SHEETS

|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |         |         | 
|------------------------------------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ------ | ------------ | ------- |  | ------ | ------- | ------- | 
|                                     |                                                                                                                                                                                    | September 30,                              |        |             
|                                     |                                                                                                                                                                                    | 1999                                       |        | December 31,
|                                     |                                                                                                                                                                                    | (Unaudited)                                |        | 1998        
|                                     |                                                                                                                                                                                    |                                            |        |             
|                                     |                                                                                                                                                                                    |                                           
|                                     |                                                                                                                                                                                    | (Dollars in thousands)                    
|                                    
|                                    
|                                    
|                                    
|ASSETS                               |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                    
|                                    
|                                    
|                                    
|Current assets:                      |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and cash equivalents                                                                                                                                                          |                                            | $      | 77,942       |         |  | $      | 60,732  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts receivable, net                                                                                                                                                           |                                            |        | 101,520      |         |  |        | 72,007  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Revenue earned in excess of billings, net                                                                                                                                          |                                            |        | 15,516       |         |  |        | 11,597  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred and refundable income taxes                                                                                                                                               |                                            |        | 11,921       |         |  |        | 8,459   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Prepaid expenses and other                                                                                                                                                         |                                            |        | 6,808        |         |  |        | 3,311   |        
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                     |                                                                                                                                                                                    | Total current assets                       |        |              | 213,707 |  |        |         | 156,106 | 
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|Property and equipment, net          |                                                                                                                                                                                    |                                            | 24,056 |              |         |  | 17,846 |        
|                                    
|                                    
|                                    
|                                    
|Goodwill, net                        |                                                                                                                                                                                    |                                            | 26,306 |              |         |  | 10,383 |        
|                                    
|                                    
|                                    
|                                    
|Other assets                         |                                                                                                                                                                                    |                                            | 12,695 |              |         |  | 6,710  |        
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                     |                                                                                                                                                                                    | Total assets                               |        | $            | 276,764 |  |        | $       | 191,045 | 
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|LIABILITIES AND SHAREHOLDERS EQUITY |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                    
|                                    
|                                    
|                                    
|Current liabilities:                 |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts payable                                                                                                                                                                   |                                            | $      | 7,696        |         |  | $      | 6,113   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Accrued payroll and related costs                                                                                                                                                  |                                            |        | 28,737       |         |  |        | 26,479  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred revenue                                                                                                                                                                   |                                            |        | 1,158        |         |  |        | 1,703   |        
|                                    
|                                    
|                                    
|                                    
|                                     | Other accrued liabilities                                                                                                                                                          |                                            |        | 4,314        |         |  |        | 12,954  |        
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                     |                                                                                                                                                                                    | Total current liabilities                  |        |              | 41,905  |  |        |         | 47,249  | 
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|Other liabilities                    |                                                                                                                                                                                    |                                            | 1,239  |              |         |  | 2,641  |        
|Commitments and contingencies        |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                    
|                                    
|                                    
|                                    
|Shareholders equity:                |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Preferred stock, no par value, 1,000,000 shares authorized, none
	issued                                                                                                           |                                            |        |             |         |  |        |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Common stock, no par value, 200,000,000 shares authorized,
	37,382,198 and 34,862,642 shares issued and outstanding as
	of September 30, 1999 and December 31, 1998,
	respectively |                                            |        |             |         |  |        |        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid-in capital                                                                                                                                                         |                                            |        | 183,266      |         |  |        | 117,590 |        
|                                    
|                                    
|                                    
|                                    
|                                     | Retained earnings                                                                                                                                                                  |                                            |        | 56,653       |         |  |        | 30,912  |        
|                                    
|                                    
|                                    
|                                    
|                                     | Stock subscriptions receivable                                                                                                                                                     |                                            |        | (4,805       | )       |  |        | (6,079  | )      
|                                    
|                                    
|                                    
|                                    
|                                     | Cumulative translation adjustment                                                                                                                                                  |                                            |        | (1,494       | )       |  |        | (1,268  | )      
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                     |                                                                                                                                                                                    | Total shareholders equity                 |        |              | 233,620 |  |        |         | 141,155 | 
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        
|                                     |                                                                                                                                                                                    | Total liabilities and shareholders equity |        | $            | 276,764 |  |        | $       | 191,045 | 
|                                     |                                                                                                                                                                                    |                                            |        |              |         |  |        |        

The accompanying notes are an integral part of these condensed
consolidated balance sheets.

3



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##### Table of Contents








COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF INCOME

|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |         |         |  
|------------------------------------------------------------------------ | ------------------------------------------- | ---------------------------------------- | ------- | ----------------- | ------ | ---- | ------ | ------ | ------ | - | ------- | ------- | ------- | - | ------- | ------- | ------- | -
|                                                                         |                                             |                                          |         |                  
|                                                                         |                                             | Three Months Ended                       |         | Nine Months Ended
|                                                                         |                                             | September 30,                            |         | September 30,    
|                                                                         |                                             |                                          |         |                  
|                                                                         |                                             | 1999                                     |         | 1998              |        | 1999 |        | 1998  
|                                                                         |                                             |                                         
|                                                                         |                                             | (In thousands, except per share data)   
|                                                                         |                                             | (Unaudited)                             
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Revenues                                                                 |                                             | $                                        | 119,207 |                   |        | $    | 98,688 |        |        | $ | 350,852 |         |         | $ | 272,554 |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Cost of revenues:                                                        |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Salaries, wages and employee benefits       |                                          |         | 66,471            |        |      |        | 50,839 |        |   |         | 190,922 |         |   |         | 140,462 |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Contractual services                        |                                          |         | 7,832             |        |      |        | 9,804  |        |   |         | 23,443  |         |   |         | 26,438  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Project travel and relocation               |                                          |         | 5,504             |        |      |        | 3,006  |        |   |         | 14,867  |         |   |         | 10,585  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Depreciation and amortization               |                                          |         | 1,095             |        |      |        | 984    |        |   |         | 3,028   |         |   |         | 3,018   |        
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         |                                             | Total cost of revenues                   |         |                   | 80,902 |      |        |        | 64,633 |   |         |         | 232,260 |   |         |         | 180,503 |  
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         |                                             | Gross profit                             |         |                   | 38,305 |      |        |        | 34,055 |   |         |         | 118,592 |   |         |         | 92,051  |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Selling, general and administrative expenses                             |                                             |                                          | 25,795  |                   |        |      | 21,769 |        |        |   | 76,082  |         |         |   | 62,922  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Merger costs and other                                                   |                                             |                                          |        |                   |        |      | 9,180  |        |        |   | 5,367   |         |         |   | 28,250  |        
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         |                                             | Income from operations                   |         |                   | 12,510 |      |        |        | 3,106  |   |         |         | 37,143  |   |         |         | 879     |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Interest expense (income)                                                |                                             |                                          | (787    | )                 |        |      | (821   | )      |        |   | (2,864  | )       |         |   | (2,110  | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         |                                             | Income before provision for income taxes |         |                   | 13,297 |      |        |        | 3,927  |   |         |         | 40,007  |   |         |         | 2,989   |  
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Provision for income taxes                                               |                                             |                                          | 5,053   |                   |        |      | 2,657  |        |        |   | 14,267  |         |         |   | 5,493   |        
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         |                                             | Net income (loss)                        |         | $                 | 8,244  |      |        | $      | 1,270  |   |         | $       | 25,740  |   |         | $       | (2,504  | )
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|Basic earnings (loss) per share 
	Weighted-average shares outstanding   |                                             |                                          | 37,593  |                   |        |      | 34,539 |        |        |   | 37,157  |         |         |   | 34,172  |        
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         | Basic earnings (loss) per share             |                                          | $       | 0.22              |        |      | $      | 0.04   |        |   | $       | 0.69    |         |   | $       | (0.07   | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|Diluted earnings (loss) per share 
	Weighted-average shares outstanding |                                             |                                          | 37,593  |                   |        |      | 34,539 |        |        |   | 37,157  |         |         |   | 34,172  |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|                                                                         | Diluted effect of stock options             |                                          |         | 576               |        |      |        | 1,758  |        |   |         | 994     |         |   |         |        |        
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         | Diluted weighted average shares outstanding |                                          |         | 38,169            |        |      |        | 36,297 |        |   |         | 38,151  |         |   |         | 34,172  |        
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         | Diluted earnings (loss) per share           |                                          | $       | 0.22              |        |      | $      | 0.03   |        |   | $       | 0.67    |         |   | $       | (0.07   | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|Pro Forma Information:                                                   |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Net income (loss) as reported                                            |                                             | $                                        | 8,244   |                   |        | $    | 1,270  |        |        | $ | 25,740  |         |         | $ | (2,504  | )      
|                                                                        
|                                                                        
|                                                                        
|                                                                        
|Pro forma incremental income tax benefit                                 |                                             |                                          |        |                   |        |      |       |        |        |   |        |         |         |   | (1,417  | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|Pro forma net income (loss)                                              |                                             | $                                        | 8,244   |                   |        | $    | 1,270  |        |        | $ | 25,740  |         |         | $ | (1,087  | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|Earnings (loss) per share 
	Pro forma basic earnings (loss) per share   |                                             | $                                        | 0.22    |                   |        | $    | 0.04   |        |        | $ | 0.69    |         |         | $ | (0.03   | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        
|                                                                         | Pro forma diluted earnings (loss) per share |                                          | $       | 0.22              |        |      | $      | 0.03   |        |   | $       | 0.67    |         |   | $       | (0.03   | )      
|                                                                         |                                             |                                          |         |                   |        |      |        |        |        |   |         |         |         |   |         |        

The accompanying notes are an integral part of these condensed
consolidated financial statements.

4



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##### Table of Contents








COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |        |         |        |  
|-------------------------------------------------- | --------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------- | --------------------------------------------------- | ------- | ------- | ------- | ------ | ------ | ------- | ------ | -
|                                                   |                                                                                                     |                                                                            
|                                                   |                                                                                                     | Nine Months Ended                                                          
|                                                   |                                                                                                     | September 30,                                                              
|                                                   |                                                                                                     |                                                                            
|                                                   |                                                                                                     | 1999                                                                        |                                                     | 1998   
|                                                   |                                                                                                     |                                                                            
|                                                   |                                                                                                     | (Dollars in thousands)                                                     
|                                                   |                                                                                                     | (Unaudited)                                                                
|                                                  
|                                                  
|                                                  
|                                                  
|Cash flows from operating activities:              |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Net income (loss)                                                                                   |                                                                             | $                                                   | 25,740  |         |         | $      | (2,504 | )      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Adjustments to reconcile net income (loss) to net cash provided
	by (used in) operating activities: |                                                                             |                                                     |         |         |         |        |        |        
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Depreciation and amortization                                               |                                                     |         | 7,747   |         |        |        | 6,587   |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Provision for doubtful accounts                                             |                                                     |         | 1,016   |         |        |        | 949     |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Writedown of other assets and other                                         |                                                     |         |        |         |        |        | 15,649  |       
|                                                   |                                                                                                     | Change in assets and liabilities, net                                      |                                                     |         |         |         |        |        |         |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Accounts receivable                                                         |                                                     |         | (26,309 | )       |        |        | (21,627 | )     
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Prepaid expenses and other assets                                           |                                                     |         | (2,919  | )       |        |        | (1,030  | )     
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Accounts payable, accrued payroll and related costs, and other
	liabilities |                                                     |         | (13,769 | )       |        |        | 15,489  |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Deferred revenue                                                            |                                                     |         | (1,972  | )       |        |        | 860     |       
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                   |                                                                                                     |                                                                             | Net cash provided by (used in) operating activities |         |         | (10,466 | )      |        |         | 14,373 |  
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|Cash flows from investing activities:              |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Investment in property and equipment, and other                                                     |                                                                             |                                                     | (13,389 | )       |         |        | (6,667 | )      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Investment in computer software                                                                     |                                                                             |                                                     | (4,804  | )       |         |        | (1,510 | )      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Payment for purchase of assets, net of cash acquired                                                |                                                                             |                                                     | (18,593 | )       |         |        |       |        
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                   |                                                                                                     |                                                                             | Net cash used in investing activities               |         |         | (36,786 | )      |        |         | (8,177 | )
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|Cash flows from financing activities:              |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Net payments on revolving credit facility and long-term debt                                        |                                                                             |                                                     |        |         |         |        | (4,471 | )      
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Net proceeds from issuance of common stock                                                          |                                                                             |                                                     | 64,603  |         |         |        | 2,978  |        
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Net proceeds from repayment of stock subscriptions receivable                                       |                                                                             |                                                     | 3,409   |         |         |        |       |        
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Repurchases of common stock                                                                         |                                                                             |                                                     | (3,536  | )       |         |        |       |        
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | S corporation distributions                                                                         |                                                                             |                                                     |        |         |         |        | (1,058 | )      
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                   |                                                                                                     |                                                                             | Net cash provided by (used in) financing activities |         |         | 64,476  |        |        |         | (2,551 | )
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|Effect of exchange rate changes on cash            |                                                                                                     |                                                                             | (14                                                 | )       |         |         | (47    | )     
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|Increase in cash and cash equivalents              |                                                                                                     |                                                                             | 17,210                                              |         |         |         | 3,598  |       
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|Cash and cash equivalents at beginning of period   |                                                                                                     |                                                                             | 60,732                                              |         |         |         | 61,861 |       
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|Cash and cash equivalents at end of period         |                                                                                                     | $                                                                           | 77,942                                              |         |         | $       | 65,459 |       
|                                                   |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                  
|Supplemental disclosures of cash flow information: |                                                                                                     |                                                                             |                                                     |         |         |         |        |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   | Cash paid during the period for:                                                                    |                                                                             |                                                     |         |         |         |        |        |        
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Interest                                                                    |                                                     | $       |        |         |        | $      | 128     |       
|                                                  
|                                                  
|                                                  
|                                                  
|                                                   |                                                                                                     | Income taxes                                                                |                                                     | $       | 16,798  |         |        | $      | 6,406   |       

The accompanying notes are an integral part of these condensed
consolidated financial statements.

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COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands, except share and per share data)


(Unaudited)


1. Basis of Presentation

The accompanying condensed consolidated financial statements have
 been prepared by management, without audit, pursuant to the
rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in
 financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of
management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments, consisting of
normal recurring adjustments, necessary to present fairly the
financial position of Complete Business Solutions, Inc. and
subsidiaries (CBSI) as of September 30, 1999, the results of
 its operations for the three and nine month periods ended
September 30, 1999 and 1998, and cash flows for the nine
month periods ended September 30, 1999 and 1998. These
financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included
in CBSIs 1998 Form 10-K.

The results of operations for the three month period ended
September 30, 1999 are not necessarily indicative of the
results to be expected in future quarters or for the full fiscal
year ending December 31, 1999.

2. Shareholders Equity

Common Stock Offering


In February 1999, CBSI completed a secondary offering of
5,400,000 shares of its Common Stock at a price of $31.00 per
share. This offering consisted of 2,135,000 shares of newly
issued Common Stock and 3,265,000 shares sold by selling
shareholders. After underwriting discounts, commissions and other
 issuance costs, net proceeds to CBSI from the sale of newly
issued shares in this offering were approximately $60,000.

Common Stock Repurchase

In August 1999, CBSI announced a plan to repurchase up to
2,000,000 shares of its Common Stock from time to time over a
24 month period. During the quarter ended September 30,
 1999, CBSI repurchased 240,000 shares of its Common Stock for
$3,536.

3. Income Taxes

In January 1998, CBSI merged with c.w. Costello &
Associates, inc. (Costello), an S corporation. As a result
of the merger, the S corporation status was terminated,
thereby subjecting future income of Costello to federal and state
 income taxes at the corporate level. Accordingly, the
application of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes (SFAS
No. 109) resulted in the recognition of deferred tax assets
and liabilities, and a corresponding benefit to the provision for
 income taxes of approximately $1,400 during the nine month
period ended September 30, 1998.

CBSI has provided federal and state income taxes in the condensed
 consolidated statements of income based on the anticipated
effective tax rate for fiscal years 1999 and 1998.

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##### Table of Contents



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

The following managements discussion and analysis of
financial condition and results of operations should be read in
conjunction with CBSIs condensed consolidated financial
statements and notes thereto included in this Form 10-Q.
With the exception of statements regarding historical matters and
 statements concerning our current status, certain matters
discussed in this Managements Discussion and Analysis
 of Financial Condition and Results of Operations are
forward-looking statements which involve substantial risks and
uncertainties. Forward-looking statements can be identified by
the words anticipate, believe,
estimate, expect, intend and
similar expressions. Our actual results, performance or
achievements could differ materially from these forward-looking
statements. Factors that could cause or contribute to such
material differences include our failure to recruit and retain IT
 professionals, risks related to our merger and acquisition
strategy, variability of our operating results, governmental
regulation of immigration, potential costs overruns on
fixed-price projects, increasing significance of non-U.S.
operations, increasing cost of IT professional workforce,
decreasing demand for Year 2000 services, exposure to
regulatory, political and economic conditions in India,
competition in the IT services industry and other risks as more
fully discussed in our 1998 Annual Report on Form 10-K.

Results of Operations

Revenues.  CBSIs revenues increased
approximately 20.8% to $119.2 million for the three month
period ended September 30, 1999 from $98.7 million for
the same period in 1998. Revenue increased approximately 28.7% to
 $350.9 million for the nine month period ended
September 30, 1999 from $272.6 million for the same
period in 1998. This growth in revenues is primarily attributable
 to increases in CBSIs IT professional workforce, increases
 in average billing rates and additional services provided to
existing clients. The completion of Y2K projects and the
Y2K-induced industry slowdown has and will continue to
temporarily decrease our growth rate and margins as we transition
 our offshore services to high-margin services. CBSIs IT
professional workforce increased approximately 17% and 19% for
the three and nine month periods ended September 30, 1999
from the comparable three and nine month periods in 1998. For the
 quarter ended September 30, 1999, approximately 86% of
CBSIs revenues were generated from existing clients.

Gross Profit.  Gross profit consists of revenues less
 cost of revenues. Cost of revenues consists primarily of
salaries (including nonbillable and training time), benefits,
travel and relocation for IT professionals. In addition, cost of
revenues includes depreciation and amortization, direct facility
costs and contractual services. Gross profit increased
approximately 12.5% to $38.3 million for the three month
period ended September 30, 1999 from $34.1 million for
the same period in 1998, and approximately 28.8% to $118.6
million for the nine month period ended September 30, 1999
from $92 million for the same period in 1998. These increases are
 primarily attributable to increases in CBSIs U.S. IT
professional workforce and average U.S. billing rates. Gross
profit as a percentage of revenues decreased to 32.1% for the
three month period ended September 30, 1999 from
approximately 34.5% for the same period in 1998. This decrease in
 gross profit as a percentage of revenue is primarily
attributable to a decrease in offshore utilization resulting from
 the continuing transition from Year 2000 related services to
Emerging Technology services, including E-business services. For
the nine month periods ended September 30, 1999 and 1998,
gross profit as a percentage of revenue was 33.8%.

Selling, General and Administrative.  Selling,
general and administrative expenses consist primarily of costs
associated with CBSIs direct selling and marketing efforts,
 human resources and recruiting departments, administration and
indirect facility costs. Selling, general and administrative
expenses increased approximately 18.5% to $25.8 million for
the three month period ended September 30, 1999 from $21.8
million for the same period in 1998 and approximately 20.9% to
$76.1 million for the nine month period ended
September 30, 1999 from $62.9 million for the same period in
 1998. This increase resulted from the continued expansion of
CBSIs direct selling and marketing effort, further
enhancement of the infrastructure, and other general overhead
cost increases necessary to support CBSIs continued revenue
 growth. As a percentage of revenues, selling, general and
administrative expenses decreased to 21.6% and 21.7% for the
three and nine month periods ended September 30, 1999,
respectively, from 22.1% and 23.1% for the same periods in 1998
as CBSI continued to leverage its existing infrastructure.

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Interest Income.  Interest income represents interest
 earned on cash equivalents, net of interest expense on
borrowings. Other income was $787 thousand for the three month
period ended September 30, 1999 as compared to $821 thousand
 for the same period in 1998.

Liquidity and Capital Resources

CBSI generally funds its operations and working capital needs
through internally generated funds, periodically supplemented by
borrowings under CBSIs revolving credit facilities with
commercial banks. CBSIs cash used in operations was $10.5
million for the nine month period ended September 30, 1999
compared to cash provided by operations of $14.4 million for the
nine month period ended September 30, 1998. The decrease in
cash provided by operations is primarily due to the payment of
amounts accrued in fiscal 1998 and acquisition costs, and an
increase in the accounts receivable days sales outstanding during
 the nine month period ended September 30, 1999 as compared
to the same period in 1998.

The principal use of cash for investing activities during the
nine month period ended September 30, 1999 was for the
purchase of assets in connection with CBSIs acquisition of
Impact Innovations Group, the purchase of property and equipment
primarily as part of the enhancement of CBSIs offshore
software development centers and the investment in computer
software.

Historically, borrowings and repayments under CBSIs
revolving credit facilities represented the most significant
components of cash provided or used by financing activities.
Under an arrangement with a commercial bank, CBSI may borrow an
amount not to exceed $21 million with interest at the banks
 prime interest rate, or the LIBOR rate plus 1 1/4%.
Borrowings under this facility are short-term, payable on demand
and are secured by trade accounts receivable and equipment of
CBSI. Net cash provided by financing activities for the nine
month period ended September 30, 1999 of $64.5 million was
primarily due to CBSI realizing net proceeds of approximately $60
 million from the issuance of common stock in February 1999
during the secondary common stock offering.

The offshore development centers operations of CBSI
accounted for approximately 6% of CBSIs total revenues
during the three month period ended September 30, 1999. Most
 of CBSIs revenues are billed in U.S. dollars. CBSI
recognizes transaction gains and losses in the period of
occurrence. Foreign currency fluctuations during the nine month
period ended September 30, 1999 did not have a material
impact on income from operations as currency fluctuations on
revenue denominated in a foreign currency were offset by currency
 fluctuations on expenses denominated in a foreign currency.
There were no material operating trends or effects on liquidity
as a result of fluctuations in the functional currency. CBSI does
 not generally use any types of derivatives to hedge against
foreign currency fluctuations, nor does it speculate in foreign
currency.

Inflation did not have a material impact on CBSIs revenues
or income from operations during the nine month period ended
September 30, 1999.

CBSI has evaluated its primary information technology
infrastructure for Year 2000 compliance. CBSI has upgraded its
critical systems to become Year 2000 compliant. CBSI does not
anticipate any material disruption in its operations as a result
of any failure to be in compliance. CBSI has received information
 from its critical suppliers and vendors, indicating that they do
 not anticipate any disruption in services or supplies to CBSI as
 a result of the Year 2000 compliance matters. In the event that
any of CBSIs significant suppliers or vendors, including
providers of electricity, gas, water, communication and telephone
 services, or customers do not successfully and timely achieve
Year 2000 compliance, CBSIs business or operations may be
adversely affected.

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PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)  Exhibits

|       |      |         |  |                                  
|------ | ---- | ------- |  | ---------------------------------
|Number |      | Exhibit
|       |      |        
|       | (11) |         |  | Computation of Earnings per share
|       | (27) |         |  | Financial Data Schedule          

(b)  Reports on Form 8-K

On July 7, 1999, CBSI filed a Form 8-K/A with the Securities and
Exchange Commission amending and restating Item 7 of its
report on Form 8-K dated April 20, 1999.

On August 19, 1999, CBSI filed a Form 8-K with the
Securities and Exchange Commission announcing that its Board of
Directors had approved a plan to repurchase up to 2,000,000
shares of its Common Stock from time to time over a 24 month
period. In addition, the CBSI Board of Directors accepted the
resignation of Jerry L. Stone and Charles W. Costello
from CBSIs Board of Directors.

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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.



| |                                  
| | ---------------------------------
| | COMPLETE BUSINESS SOLUTIONS, INC.



| |     |                          
| | --- | -------------------------
| | By: | /s/ RAJENDRA B. VATTIKUTI

| |                                                   
| | --------------------------------------------------
| |                                                   
| | Rajendra B. Vattikuti                             
| | President and Chief Executive Officer and Director
|
| | /s/ TIMOTHY S. MANNEY                             
| |                                                   
| | Timothy S. Manney                                 
| | Executive Vice President of Finance and           
| | Administration, Treasurer and Director            
| | (Principal Financial and                          
| | Accounting Officer)                               

Dated: November 15, 1999

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EXHIBIT INDEX


|       |      |         |  |                                  
|------ | ---- | ------- |  | ---------------------------------
|Number |      | Exhibit
|       |      |        
|       | (11) |         |  | Computation of Earnings per share
|       | (27) |         |  | Financial Data Schedule