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                                 UNITED STATES
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
                            ------------------------
(MARK ONE)
 
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
     EXCHANGE ACT OF 1934
 
                        FOR THE YEAR ENDED JULY 31, 1996
 
                                       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 0-27612
 
                     DATA PROCESSING RESOURCES CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
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                  CALIFORNIA                                    95-3931443
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)
     4400 MACARTHUR BOULEVARD, SUITE 610
          NEWPORT BEACH, CALIFORNIA                               92660
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                     (ZIP CODE)
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       Registrant's telephone number, including area code:  714-553-1102
 
       Securities registered pursuant to Section 12(b) of the Act:  None
 
           Securities registered pursuant to Section 12(g) of the Act:
 
                                  COMMON STOCK
                                (TITLE OF CLASS)
 
     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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  [  ].
 
     The aggregate market value of Common Stock of the Registrant held by
non-affiliates of the Registrant on October 23, 1996, based on the closing price
of the Common Stock on the Nasdaq National Market on such date, was $55,831,179.
The number of shares of the Registrant's Common Stock outstanding at October 23,
1996, was 7,492,321 shares.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
     Portions of the Proxy Statement to be filed with the Securities and
Exchange Commission in connection with the Annual Meeting of Shareholders to be
held December 17, 1996 are incorporated by reference into Part III hereof.
 
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                     DATA PROCESSING RESOURCES CORPORATION
 
                                   FORM 10-K
 
                    FOR THE FISCAL YEAR ENDED JULY 31, 1996
 
                                     INDEX
 
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                                             PART

Item 1.     Business....................................................................     1
Item 2.     Properties..................................................................    11
Item 3.     Legal Proceedings...........................................................    11
Item 4.     Submission of Matters to a Vote of Security Holders.........................    11


                                           PART II

Item 5.     Market for Registrant's Common Equity and Related Shareholder Matters.......    12
Item 6.     Selected Financial Data.....................................................    12
Item 7.     Management's Discussion and Analysis of Financial Condition and Results of
            Operations..................................................................    14
Item 8.     Financial Statements and Supplementary Data.................................    19
Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial
            Disclosure..................................................................    19


                                           PART III

Item 10.    Directors and Executive Officers of the Registrant..........................    19
Item 11.    Executive Compensation......................................................    19
Item 12.    Security Ownership of Certain Beneficial Owners and Management..............    19
Item 13.    Certain Relationships and Related Transactions..............................    19


                                           PART IV

Item 14.    Exhibits, Financial Statement Schedules and Reports on Form 8-K.............    19
Signatures..............................................................................    21
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                                     PART I
 
ITEM 1. BUSINESS
 
GENERAL
 
     DPRC is a provider of information technology specialty staffing services to
a diverse group of corporate clients. By drawing from its carefully screened
database of more than 24,000 highly qualified technical consultants (which
includes both hourly and full time salaried consultants), the Company is able to
offer integrated staffing solutions to meet its clients' enterprise-wide systems
applications development needs. The Company's technical consultants have
expertise on multiple hardware platforms utilizing a wide variety of software
applications and can provide services covering all aspects of the systems
applications development life cycle, including planning, design, building and
programming, implementation, maintenance and ongoing management. For the nine
months ended September 30 1996, the Company placed approximately 1,000
consultants on projects for approximately 210 clients. The Company currently
serves its clients through eight offices located in Newport Beach, Woodland
Hills and San Francisco, California; Denver, Colorado; Seattle, Washington;
Omaha, Nebraska; Kansas City, Kansas; and its recently opened Des Moines, Iowa
office.
 
INDUSTRY OVERVIEW
 
     In recent years, businesses have become increasingly dependent on the use
of computer information technology to manage operations more efficiently and
remain competitive. Important internal functions, ranging from financial
reporting to production and inventory management, have become automated through
the use of application software. In addition, as information systems have become
less expensive, more powerful and easier to use, the number and level of
employees who use and depend upon these systems has significantly increased.
 
     Due to the rapid development of computer information technology, many
companies' computer systems incorporate a variety of hardware and software
components which may span a number of technology generations. For example, a
company may operate concurrently on mainframe, midrange and client/server
hardware platforms running a variety of operating systems and relational
databases. Systems applications development has become much more important in
this environment as information technology departments strive to integrate a
company's information processing capabilities into a single system while
providing for ever-changing functionality. In addition, in order to facilitate
communications within organizations, there is a greater need for information
technology personnel with specific expertise in the rapidly evolving local and
wide area networking and communications technologies.
 
     The substantial increase in the use of sophisticated information
technologies has occurred at the same time as economic factors have led to
reductions in corporate workforces and a return by businesses to a focus on
their core competencies. Faced with the challenge of implementing and operating
more complex information systems without enlarging their corporate staffs,
businesses are increasingly using technical supplemental staffing companies to
augment their information technology operations. Utilizing outside information
technology consultants: (i) allows a company's management to focus on core
business operations; (ii) affords greater staffing flexibility in information
technology departments; (iii) increases the ability to adapt to and keep pace
with rapidly changing and increasingly complex technologies; (iv) provides
access to specialized technical skills on a project-by-project basis; (v) better
matches staffing levels to current needs, converting fixed labor costs into
variable costs; and (vi) reduces the cost of recruiting, training and
terminating employees as evolving technologies require new programming skill
sets.
 
     A significant change has also occurred in recent years within the
population of information services professionals. Technical professionals
increasingly are choosing to operate as independent consultants, motivated by a
desire for more flexible work schedules and an opportunity to work with emerging
and challenging technologies in a variety of industries and work environments.
In addition, such consultants
 
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generally are able to maintain compensation levels comparable to or higher than
that of similarly skilled, full-time employees.
 
     These factors have caused information technology services to be one of the
fastest growing segments of the supplemental staffing industry. According to
Staffing Industry Report, revenues from technical/computer temporary staffing
are estimated to have grown from $5.7 billion in 1993 to $9.2 billion in 1995,
representing a compound annual growth rate of approximately 25.0%. There can be
no assurance, however, that such growth will continue. The information
technology staffing services industry is also highly fragmented, with a large
number of small businesses, many of which operate in a single geographic market.
This fragmentation, combined with changing client demands and competitive
pressures, has resulted in a recent trend towards industry consolidation. Faced
with a desire to minimize the number of their vendors, clients have begun to
demand the services of large staffing companies capable of covering a broad
geographic area and offering a full range of information technology services.
This has been particularly important in fulfilling the needs of large regional
and national accounts. Within this more competitive environment, smaller
companies are having difficulties competing due to limited service offerings,
geographic concentration and the lack of sufficient working capital and
management resources. As a result, smaller staffing companies are becoming
increasingly receptive to acquisition proposals by larger firms. Consolidation
is occurring rapidly in the information technology services industry.
 
BUSINESS STRATEGY
 
     DPRC is dedicated to providing integrated staffing solutions to meet its
clients' systems applications development needs. The Company's business strategy
encompasses the following key elements, which management believes are necessary
to ensure high quality standards and to achieve consistently strong financial
performance:
 
     Emphasize a Relationship-Oriented Approach.  The Company's goal is to have
its clients view DPRC as an extension of their own internal information systems
operations and as a long-term partner to fulfill their information technology
staffing requirements. As a result, the Company emphasizes a
relationship-oriented approach to business, rather than the transaction- or
assignment-oriented approach used by many of its competitors. This emphasis
begins with the Company's Chief Executive Officer who spends the majority of her
time meeting with key clients, working with the Company's account managers and
communicating with the Company's technical consultants. To develop close client
relationships, the Company's regional managers and account managers regularly
meet with both existing and prospective clients to help design solutions for and
identify the resources needed to execute their clients' information technology
strategies. The Company's account managers also maintain close communications
with their clients during each project and on an ongoing basis after its
completion. The Company believes that this relationship-oriented approach
results in greater client satisfaction and reduced business development expense.
 
     Provide Comprehensive Solutions.  The Company offers responsive, timely and
comprehensive technical staffing solutions for all aspects of the systems
applications development life cycle. The Company believes that this ability to
provide staffing for the full range of such services provides an important
competitive advantage. By drawing on its database of more than 24,000 highly
qualified technical consultants, the Company provides a wide range of services,
including planning, design, building and programming, implementation,
maintenance and ongoing management. The Company also works to ensure that its
consultants have the technical expertise and skills needed to keep pace with
rapidly evolving information technologies. As an example of this effort, the
Company has co-sponsored a training program with one of its clients to train
both the client's employees and the Company's technical consultants in the
implementation of and support for a sophisticated new software application
program.
 
     Attract and Retain Qualified Technical Consultants.  A key element of the
Company's success is its ability to attract and retain qualified hourly and
salaried technical consultants. Management believes that it has been successful
in doing so by: (i) offering its technical consultants competitive wages and
ensuring that they are paid accurately and on time; (ii) consistently providing
high quality assignments; (iii) providing its technical consultants an
opportunity to purchase a comprehensive employee benefits package; and
 
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(iv) effectively and consistently communicating with its technical consultants.
In addition, because many of the Company's clients are leaders in adopting
emerging technologies, the Company can often offer its technical consultants the
opportunity to work on challenging projects using state-of-the-art technologies,
which management believes is a significant advantage in attracting and retaining
highly skilled technical consultants. Unlike many of its competitors which
advertise in newspapers and other periodicals and on computer bulletin boards,
the Company attracts new consultants in its established markets primarily
through referrals from other consultants. Management believes that this reflects
a high level of satisfaction of its technical consultants and results in a
turnover rate for technical consultants that is lower than that of its
competitors, thus permitting the Company to have lower recruiting and related
administrative costs than its competitors.
 
     Focus on Margins.  The Company constantly seeks opportunities to enhance
its profit margins by both offering services for which higher margins can be
obtained and reducing costs. For example, in recent years the Company has begun
to provide value-added technology practices, such as networking and
communications, internetworking, Year 2000 and help desk support, which
generally provide higher gross margins than traditional services. DPRC has also
performed some limited offsite applications development and testing applications
and systems. Although the limited offsite development was successful, the
Company anticipates that such projects will not be aggressively pursued in the
future, but instead, its strategy will focus on the higher margin value-added
technology practices. In addition, the Company has identified, targeted and
expanded to geographic markets which provide relatively greater profitability
than the highly competitive California market and the Company will continue to
identify and target similar markets. Finally, the Company focuses on enhancing
operating efficiencies and recently made a substantial investment in upgrading
its automated support systems in order to improve the efficiency of its
accounting, recruiting and marketing operations.
 
     Maintain Service-Oriented Corporate Culture.  The Company believes that its
service-oriented corporate culture has played an integral part in its success.
Consequently, maintaining this culture is of the highest priority to management.
Central to the Company's philosophy is the recognition that its success is
dependent on providing the highest levels of service to both its clients and its
technical consultants. This approach begins with the selective recruitment of
corporate level personnel who exhibit a high degree of integrity and enthusiasm
and who embrace the Company's commitment to service. This deeply ingrained
culture filters down to the Company's technical consultants through a rigorous
screening and recruiting process. The Company's controlled expansion program is
designed to enable it to replicate this culture and preserve the quality of its
service in its new markets.
 
GROWTH STRATEGY
 
     DPRC's growth strategy is to expand the geographic scope of the Company's
business, to broaden and diversify its client base in its existing markets and
to expand the scope of the services it provides to its clients. Through this
growth strategy, the Company seeks to emerge as a leading specialty staffing
company in the United States in the systems applications development, networking
and communications, and help desk support niches of the technical staffing
industry.
 
     Geographic Expansion.  In 1993, the Company began a geographic expansion
program in California by opening offices in San Francisco and Woodland Hills. In
late 1995, the Company continued to expand and opened its Denver office to serve
the Rocky Mountain region and in June 1996 opened its Pacific Northwest office
in Seattle. Also in 1996, the Company acquired the two branch facilities of the
Applications Design and Development division of ADD Consulting, Inc. ("ADD").
See "Acquisitions". The Company intends to continue to expand throughout the
United States. The Company believes that this expansion will enhance its ability
to market its services to regional and national clients, many of which are
seeking to work with a limited number of vendors capable of servicing multiple
locations. New geographic markets also may be less competitive and may present
greater opportunities for higher margins than the Company's core markets in
California. In addition, the Company believes that, through geographic
expansion, it will be better able to establish valuable strategic partnerships
with national accounting and consulting firms and large outsourcing vendors.
 
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     The Company believes that it can best expand the geographic scope of its
business through a series of branch offices clustered in networks around
regional hub offices. Strong hub offices will enable the Company to control its
growth, oversee regional operations without significant additional overhead in
each office, centralize administrative functions and ensure that each office
preserves the Company's service-oriented culture. The Company has selected
Newport Beach, Denver and Seattle to serve as its regional hubs serving the
California, Rocky Mountain and Pacific Northwest regions, respectively, and
future expansion into Dallas and Minneapolis is likely to serve as regional hubs
for the Texas and Midwest regions, respectively. The Company believes that these
strategically located cities will enable it to expand its presence quickly and
efficiently in the Western United States. The Newport Beach office, which
currently serves as the Company's headquarters, is the hub for the Company's
branches in Woodland Hills and San Francisco, the Denver hub office which opened
in November 1995 serves the Rocky Mountain region, the Seattle hub office which
opened in June 1996 serves the Pacific Northwest region and the Omaha hub office
which opened in July 1996 serves the ADD division.
 
     In order to maintain quality control and ensure that the Company's
relationship-oriented approach to client service is adopted by all new offices,
the Company has developed and intends to continue to develop most of its new hub
offices internally, rather than by acquisition. In selecting its hub offices,
the Company seeks cities with strong and growing economies, large populations of
skilled technical professionals and heavy concentrations of corporations with
sophisticated information technology needs. Once the hub office has demonstrated
its ability to meet the Company's quality standards, branch offices are expected
to be added around the hub either through acquisitions or by internal
development. Branches typically will be in smaller cities which have significant
numbers of middle market companies, healthy economies and potentially less
competitive environments. Although the Company is still in the preliminary
stages of analyzing potential branch office locations, the Company believes that
cities such as Sacramento, San Jose and San Diego would be candidates for
additional branch locations in California; Colorado Springs, Phoenix and Salt
Lake City would be candidates for branch locations in the Rocky Mountain region;
Portland, Boise and Spokane would be candidates for branch locations in the
Pacific Northwest; St. Louis and Minneapolis would be candidates for branch
locations in the Midwest; and Dallas, San Antonio, Houston, and Austin would be
candidates for branch locations in Texas.
 
     As part of its growth strategy, the Company is seeking acquisitions which
will serve as suitable hub or branch offices. Management believes that there are
significant acquisition opportunities within its targeted geographic regions. In
evaluating potential acquisition candidates for new branch offices, the Company
will pursue profitable information technology staffing companies with proven
management teams, core groups of highly qualified technical consultants,
reputations for quality, established client bases, cultural fit and strong
historical growth rates and financial results. The Company believes that it will
be an attractive acquirer of other technology services staffing companies due
to: (i) the benefits it offers as a strong regional company; (ii) the potential
for certain economies of scale and operating efficiencies; (iii) the Company's
financial strength and visibility as a public company; and (iv) the Company's
decentralized management strategy.
 
     Clients and Services in Existing Markets.  In addition to expanding the
geographic scope of its business, the Company is constantly seeking to add new
clients in the geographic markets it currently serves and to increase the range
of services it provides to its existing clients. The addition of new clients in
current markets enables the Company to utilize more profitably its existing
administrative and corporate infrastructure. New clients, particularly in new
industries, also permit the Company to diversify its client base and thus reduce
its exposure to fluctuations in industry business cycles. For example, the
Company's client base, which includes clients in both existing and new
locations, increased from approximately 60 clients in fiscal 1992 to
approximately 80 clients in fiscal 1993, approximately 110 clients in fiscal
1994, approximately 150 clients in fiscal 1995 and approximately 210 in fiscal
1996. The Company believes that the rapid adoption of client/server, networking
and communication and other emerging technologies by middle-market companies
creates a significant opportunity for the Company to expand into client/server,
networking and communications, which often provide higher gross margins.
 
     In recent years, the Company has broadened the range of services it
provides. Historically, the Company's technical consultants worked almost
exclusively in the mainframe and midrange computer
 
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environments. In response to changing technologies, the Company expanded its
database to include technical consultants capable of providing a broad range of
additional services, such as networking and communications, internetworking,
help desk support, documentation and training services and services for the
client/server environment.
 
     The Company also believes that there are significant growth opportunities
in pursuing strategic relationships with non-competing professional services
organizations, particularly national accounting and consulting firms and vendors
of related services, such as hardware outsourcing vendors and value-added
resellers. The value-added technology practices, in addition to applications
development services, are well suited to offerings that will be attractive to
national accounting and consulting firms and vendors of related services.
Although it has not historically had such strategic relationships, the Company
is currently serving as a partner, through subcontractor relationships, with
several large outsourcing and staffing companies, and national accounting and
consulting firms and is exploring several other such opportunities.
 
ACQUISITIONS
 
     As part of its growth strategy, the Company has developed extensive
criteria to assist in the evaluation of potential acquisition candidates. The
Company evaluates a number of factors, including: cultural fit of the
acquisition candidate, the continuity of an experienced and successful
management team, strong financial performance, loyal and diverse customer base
and a quality consultant base. The Company continually reviews potential
acquisitions and is currently in the preliminary stages of investigating several
acquisition candidates.
 
     On July 1, 1996, the Company acquired two branch facilities and
substantially all of the related assets of the Applications Design and
Development division of ADD Consulting, Inc., an Omaha-based corporation. The
acquisition was achieved pursuant to an Agreement of Purchase and Sale of Assets
dated July 1, 1996 ("Asset Purchase Agreement"), by and among DPRC, ADD and the
controlling shareholder of ADD, Gerald R. Ladd ("LADD").
 
     Under the terms of the Asset Purchase Agreement, the purchase price was
$12,850,000, consisting of $8,785,000 in cash, 152,121 shares of restricted DPRC
common stock, valued at $3,765,000 and a deferred payment of $300,000. Under the
Asset Purchase Agreement, ADD has certain registration rights with respect to
the 152,121 shares of DPRC common stock it received in the acquisition. ADD and
LADD have each entered into a covenant not-to-compete with DPRC in the
geographic areas in which ADD's business was conducted.
 
     DPRC used a portion of the proceeds obtained from its initial public
offering (the "Offering") of securities to pay the cash portion of the purchase
price. The Company has developed a plan for the integration of acquisitions into
existing operations. The Company believes to date that the integration of ADD
has successfully proceeded according to the plan.
 
     The Company continually reviews potential acquisitions and is currently in
the preliminary stages of investigating several acquisition candidates; however,
the Company has not entered into any understanding, commitment or agreement with
respect to any potential material acquisition which could be considered probable
of closing.
 
INFORMATION TECHNOLOGY SERVICES
 
     The information services organization of a typical Fortune 500 company is
divided into three general functions:
 
          Mission-Critical Applications Development.  Mission-critical
     applications development involves creating or enhancing a client's
     information and automation systems. Applications development projects may
     involve automating or enhancing warehouse operations, distribution systems,
     quality assurance controls, materials management, sales order processing,
     human resource and benefits administration, and accounting and control
     systems.
 
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          Networking and Communications.  Networking and communications involves
     developing connectivity solutions by configuring, installing and linking
     servers, minicomputer and mainframe systems, workstations and personal
     computers into complete, flexible networks. Networking and communications
     involves systems administration and help desk support.
 
          Help Desk Support.  Help desk support involves software support,
     remote diagnostics, dispatch control and technical updates.
 
          Data Center Operations.  Data center operations involve the input,
     processing and maintenance of large volumes of time-sensitive data such as
     payroll, billing and purchase orders to be subsequently distributed over a
     network management system to various end-users within the corporate
     enterprise.
 
     The Company focuses primarily on providing applications development,
networking and communications and help desk support for its clients' information
systems organizations. Historically, applications development projects have
provided substantially all of the Company's revenues. Management believes,
however, networking and communications and help desk support will generate an
increasingly larger percentage of the Company's revenues. The Company offers
fully integrated services which support the entire systems applications
development life cycle, from planning and design through building and
implementation to maintenance and support.
 
     In the course of a client's systems applications development project, the
Company's technical consultants may: prepare project plans; assist users in
defining high level functional specifications; perform systems analysis and
detailed design; select and configure hardware; create custom application
programs; develop migration plans to move to a new operating platform or system;
install and test the system; obtain user acceptance; draft user documentation;
train the client's employees to use the system; and support, maintain and
fine-tune the system on an ongoing basis. To offer such services, DPRC's
technical consultants are experienced in the full range of hardware platforms
including mainframe, minicomputer, midrange computer and client/server
environments. In addition, the Company's technical consultants support a wide
variety of operating systems, programming languages, software tools, database
management applications and data security packages. Client systems applications
development projects tend to be long-term in nature, typically lasting nine to
twelve months. The Company may perform services ranging from specific, minor
tasks of short duration to large, complex and integrated assignments which
require a number of consultants to be on assignment for several years.
 
     In response to changing client needs, the Company has recently been
offering services in networking and communications and help desk support. The
Company's networking and communications consultants are responsible for network
design, installation and performance enhancements. These assignments are
typically of shorter duration than applications development assignments,
generally lasting three to six months. Although billing rates for these projects
are generally lower than overall Company averages, they tend to provide the
Company with higher gross margins. Currently, networking and communications and
help desk support constitute the fastest growing segment of the Company's
business.
 
     During the fiscal year the Company evaluated the feasibility of performing
client applications development and testing offsite from client facilities. The
Company entered into multi-phase contracts with two carefully selected clients.
Whereas the Company's traditional services are billed on a time and materials
basis, outsourced software development services are generally provided under a
fixed-price arrangement in which the Company assumes overall responsibility for
project management and delivering a finished software application. Both of the
offsite projects were completed during the year. Although the Company may
perform selected contracts as a result of customer requests on this basis in the
future, the Company does not expect this type of assignment to become a material
component of its business.
 
THE DPRC OPERATING AND SALES APPROACH
 
     General.  The Company's overall operating approach is designed to ensure
the highest levels of client, employee and technical consultant satisfaction.
From its headquarters in Newport Beach, California, the Company provides its
branch offices with centralized administrative, marketing, finance, training and
legal
 
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support. To achieve operating efficiencies and facilitate the coordination
between the Company's headquarters and branch offices, the Company recently
purchased an integrated management information system with on-line access to
information on existing and prospective clients, technical consultants and the
status of ongoing assignments.
 
     Management recognizes that in order to motivate its employees, to ensure
that clients receive quick, responsive service and to adapt to local market
conditions, the Company must have strong regional management and operate each
branch office as an autonomous profit center. Local branch managers, who have a
valuable understanding of their respective markets and existing client
relationships, are empowered to make most of the day-to-day operating decisions
at each location and are accountable for the profitability and growth of their
office. The Company believes that its hub strategy will enable it to retain its
service-oriented corporate culture while operating under a decentralized,
entrepreneurial management structure.
 
     The Company emphasizes a team-oriented approach in order to provide high
quality customized solutions to meet its clients' information services needs.
The central role in this team-oriented approach is played by the Company's
account managers and resource managers, who work together to ensure a successful
relationship between the client and DPRC's technical consultants. Once the
account managers fully understand the client's information technology needs,
they work with the resource managers to select the best consultants to fulfill
these needs. Through formal weekly meetings and more frequent informal meetings,
account managers and resource managers share information on active and
prospective projects and clients, review the availability of technical
consultants and discuss general market conditions. Such forums enable both
account and resource managers to remain informed and knowledgeable on the latest
technologies and to identify business development opportunities as they emerge.
 
     Account Managers.  The Company's sales effort is led by account managers
whose goal is to become the client's partner in evaluating and meeting the
client's information technology needs. The account manager's primary
responsibilities include: building and nurturing client relationships;
understanding and identifying clients' information technology services needs;
working closely with resource managers to staff assignments appropriately;
setting billing rates for each assignment within corporate guidelines; and
monitoring ongoing assignments. Each account manager is responsible for between
four and fourteen active corporate accounts, some of which may involve several
projects with multiple operating units of a particular corporation. The account
manager cultivates and maintains relationships with not only the client's chief
information officer or chief financial officer but also numerous department and
project managers within the client's organization.
 
     The account manager has ultimate responsibility for staffing an assignment
on a timely basis. Upon receiving a new assignment, the account manager writes
up a proposal with assignment specifications and distributes the proposal to a
resource manager who is responsible for and has relationships with the technical
consultants who have the expertise required for the assignment. The account
manager reviews the recommended candidates, submits the resumes of qualified
technical consultants to the client and schedules client interviews of the
candidates. Typically, an assignment is staffed within five working days. For
certain clients with whom the Company has strong, long-term relationships,
account managers are given sole responsibility for staffing assignments with
little or no client involvement in the decision. Throughout the life of a
project, the account manager monitors the Company's relationship with the client
and the technical consultants to ensure that both constituencies are satisfied
with the success of the assignment.
 
     In addition to servicing existing clients, account managers spend a
significant amount of time developing new client relationships. The cultivation
of a new client relationship generally requires three to six months. New
relationships are primarily generated through referrals and cold calling.
Account managers also attend trade shows and are active in local community
events.
 
     As of July 31, 1996, the Company employed a total of twelve account
managers. Upon opening a new hub or branch, the Company will initially staff the
office with one account manager and will add new account managers as the office
grows. Account managers are compensated primarily on a commission basis, based
on a variety of commission programs, including hours billed by the technical
consultants they have staffed, the Company's gross margin on those billings and
on a percentage of revenue billed.
 
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     Resource Managers.  Resource managers are responsible for: recruiting and
assessing the Company's technical consultants; establishing long-term
relationships with the technical consultants and understanding their
capabilities, requirements and constraints; maintaining and updating the
Company's database; monitoring the consultants' preferences and availability;
and working with the account manager to staff assignments appropriately.
 
     Resource managers utilize a variety of methods to recruit technical
consultants. In markets such as Southern California where the Company has an
established presence, the resource manager obtains a majority of qualified
candidates through referrals from clients and other consultants. In less
established markets, the majority of new candidates are persons who have
responded to advertisements in local newspapers or furnished the Company a
resume via the Internet. Resource managers also recruit technical consultants by
attending meetings of local technology-specific user groups and trade shows,
making cold calls and advertising in the yellow pages.
 
     Once a resume is received, a resource manager conducts a telephonic
interview from which a qualification cover sheet is drafted. This sheet
summarizes general candidate information including industry expertise, travel
distance limitations, rates desired and general skill set data. The resource
manager uses the telephone interview to prescreen candidates to ensure that the
candidate is an experienced consultant. The Company does not generally place
entry-level consultants. The follow-up interview, which is conducted in person
at the Company's offices with a minimum of two resource managers, enables the
Company to assess technical and interpersonal skills, work ethic and overall
character. On average, a resource manager reviews approximately 50 resumes a
week and conducts 25 to 30 personal interviews. In addition to the interview, a
minimum of three references are obtained for each candidate interviewed and
additional background checks may be conducted. In some cases, the candidate is
also given a technical exam by one of several specialists retained by the
Company to assess more accurately the candidate's technical qualifications. If
the candidate meets the Company's standards, the candidate's profile is
finalized and entered into the Company's database as an available technical
consultant.
 
     In order to respond quickly to staffing needs, a resource manager must
understand the qualifications and skills of the technical consultants in the
database. The resource manager is in regular communication with the technical
consultants, particularly those on the Company's "availability roster." When
approached by an account manager with a staffing need, the resource manager
reviews the database to identify the best technical consultants for the position
as quickly as possible. Unlike some of its competitors who recommend a large
number of candidates, some of whom may be inappropriate, the Company generally
recommends only two or three carefully selected candidates for each available
position. Management believes that its clients value the selective screening
role played by the Company.
 
     As of July 31, 1996, the Company had thirteen full-time and one part-time
resource managers. Resource managers receive a base salary and commissions based
on the number of consultants that they have placed. To ensure communication
among the resource managers and cooperation on the staffing of assignments, in
most cases, commissions are pooled and divided equally among the resource
managers.
 
     Branch Managers.  Under the Company's decentralized management structure,
the Company's branch managers are given significant autonomy to make most
day-to-day operating decisions. Branch managers are responsible for: overall
guidance and supervision of the office; budgeting and forecasting for the
office; strategy with regard to market and account penetration; the hiring and
training of office staff; and promoting the DPRC culture within the branch
office.
 
     While a branch manager is responsible for most of the administrative
functions of running an office, the majority of a branch manager's time is
typically spent on sales and marketing. Branch managers typically initiate the
calling effort on new clients and work with the account managers to develop and
maintain client relationships. In addition, branch managers assist the resource
managers in interviewing and evaluating technical consultant candidates. As the
Company grows, each of the branch managers will report to a regional general
manager who will be responsible for oversight and strategic planning for one of
the Company's geographic regions. Within each hub, the regional general manager
will develop marketing strategies, identify
 
                                        8
<PAGE>   11
 
acquisition prospects, promote strategic partnering relationships and provide
overall operational guidance and mentoring to the branch managers.
 
     The Company currently has eight branch managers. To ensure that its branch
managers' goals are aligned with those of the Company, each branch manager's
compensation includes a combination of salary, commissions, bonuses based on
branch profitability and stock options.
 
     Regional Managers.  Under the Company's decentralized management structure,
the Company's regional managers are given significant autonomy to make most
day-to-day operating decisions over the hub or regions. Regional managers are
responsible for: overall guidance and supervision of the region; budgeting and
forecasting for the region; strategy with regard to market and account
penetration; the hiring and training of branch managers; and promoting the DPRC
culture within the region.
 
     As of July 31, 1996, the Company had two regional managers including the
President of the ADD division of DPRC and Vice President of Consulting Services
of the ADD division who are responsible for the regional administration of the
ADD division of DPRC.
 
     Technical Consultants.  Management believes that one of the primary factors
in the Company's success has been its ability to attract and retain qualified
hourly and salaried technical consultants. The Company's technical consultants
are primarily senior computer programmers and systems analysts who have
experience in a wide range of operating systems, programming languages, database
management systems and data security systems. Given the sophisticated nature of
most client assignments, the Company's policy is to utilize consultants with
substantial employment experience rather than entry-level or college
graduate-level consultants. For the nine months ended September 30, 1996, the
Company placed approximately 1,000 technical consultants with approximately 210
different clients. During the final week of fiscal 1996, approximately 750
consultants were on assignment at any one time. Substantially all of the
Company's revenues are derived from time billed by its technical consultants
while on assignments with clients. Hourly and salaried wage rates for the
services of consultants are dependent on the consultant's level of skill and
experience as well as local market conditions. The Company recently began hiring
more full time salaried consultants in certain branches where the local market
conditions favor the hiring of full time consultants over hourly consultants.
Full time consultants receive a broader range of company-paid benefits than
hourly consultants.
 
     The Company believes that it has been able to attract and retain qualified
hourly and salaried technical consultants by: (i) offering its technical
consultants competitive wages and ensuring that they are paid accurately and on
time; (ii) consistently providing high quality assignments; (iii) providing its
technical consultants an opportunity to purchase a comprehensive employee
benefits package; and (iv) effectively and consistently communicating with its
technical consultants. In addition, because many of the Company's clients are
leaders in adopting emerging technologies, the Company can often offer its
technical consultants the opportunity to work on challenging, state-of-the-art
projects, which management believes is a significant advantage in attracting and
retaining highly skilled technical consultants. Management believes that, as a
result of the satisfaction among DPRC's technical consultants, the Company
experiences a lower turnover rate than many of its competitors, resulting in
lower recruiting and related administrative costs. Although the Company's
clients from time to time hire DPRC's technical consultants as employees, this
does not occur frequently. The Company believes that this is in part due to the
technical consultants' preference to work as independent consultants on a
variety of assignments rather than as full-time employees for a single employer.
In the event a client hires one of the Company's technical consultants as an
employee, DPRC generally receives a one-time placement fee equal to a percentage
of the employee's annual salary.
 
CLIENTS
 
     The Company focuses its sales, service and support efforts primarily on
Fortune 500 and other large and mid-sized companies in various industries with
sophisticated information technology needs. Although the Company does not have
exclusive arrangements with any clients, it enjoys service arrangements with a
number of companies which qualify DPRC as an approved vendor as a prerequisite
for conducting business with these companies.
 
                                        9
<PAGE>   12
 
     During fiscal 1996, the Company served approximately 210 clients. The
Company's ten largest clients in fiscal 1996 accounted for 60.3% of the
Company's revenues, with Nissan Motor Corporation accounting for 10.2% of total
revenues. On a pro forma basis, had the acquisition of ADD occurred as of the
beginning of the fiscal year, the Company's ten largest customers would have
represented 49.5% of total pro forma revenues in fiscal 1996. Certain of these
clients, however, have several separate assignments ongoing at any one time
which are administered by separate divisions or subsidiaries. Technical services
are provided to all clients under contractual arrangements of varying lengths,
which are subject to extension, negotiation or cancellation at any time. Such
contracts may include a confidentiality agreement. In addition, all technical
hourly and salaried consultants are required to sign confidentiality agreements
with the Company. A typical engagement lasts from nine to twelve months.
 
     The following table sets forth a list of select clients in four industry
groups for which the Company provided services in fiscal 1996:
 
<TABLE>
    <S>                                                      <C>
    AUTOMOBILE MANUFACTURERS                                 ENTERTAINMENT & LEISURE
    American Honda Motor Company                             MCA, Inc.
    Nissan Motor Corporation USA                             Princess Cruise Lines
    Mazda Motor of America                                   The Walt Disney Company
    Mitsubishi Motor Sales of America                        Capital Records
    FINANCIAL SERVICES                                       HEALTHCARE
    The Capital Group                                        Apria Healthcare Group
    Coldwell Banker                                          FHP International Corporation
    Home Savings of America                                  Health Net
    Wells Fargo Bank                                         Pacificare
</TABLE>
 
     The Company believes the primary factors in attracting and retaining
clients are the ability to develop a strategic partnering relationship,
understand the specific requirements of a given project, provide qualified
technical consultants in a timely manner and provide quality services at
competitive prices. The Company constantly monitors the quality of the services
provided by its technical consultants and relies on feedback from its clients as
to their satisfaction with the services provided.
 
COMPETITION
 
     The specialty staffing industry is highly competitive. The Company competes
for both clients and qualified technical consultants with a variety of
companies, including other specialty staffing companies, national and regional
accounting and management consulting firms and independent contractors. Some
examples of these are CIBER, the Registry, Cotelligent Group and Analysts
International. Recently, several traditional staffing companies, including
AccuStaff Incorporated, COREStaff, Interim Services, Inc., and The Olsten
Corporation, which have historically emphasized the placement of clerical and
other less highly skilled personnel on short-term assignments, have begun to
provide services competitive with those provided by the Company. The Company
also competes for technical consultants with the information technology staffs
of its clients and potential clients. In addition, as part of the Company's
growth strategy the Company will compete for suitable acquisition candidates.
Increased competition for such acquisition candidates could have the effect of
increasing the price for acquisitions or reducing the number of suitable
candidates available for acquisition.
 
     Several of the Company's competitors are substantially larger than the
Company and have greater financial and other resources. Several of such
competitors have also been in business much longer than the Company and have
significantly greater name recognition throughout the United States, including
the geographic areas in which the Company operates and into which it intends to
expand. In addition, such companies are able to meet a broader range of a
client's temporary personnel needs and serve a broader geographic range than the
Company, which permits such companies to better serve national accounts.
 
     The Company believes that the primary competitive factors in obtaining and
retaining clients are the ability to provide comprehensive staffing solutions
for all aspects of a client's information technology needs, an understanding of
the client's specific job requirements, the ability to provide carefully
screened technical
 
                                       10
<PAGE>   13
 
consultants with the appropriate skills in a timely manner and price. The
primary competitive factors in attracting and retaining qualified candidates for
technical consultant positions are the ability to offer competitive wages, pay
such wages in a consistent and timely manner and provide a consistent flow of
high quality and varied assignments. While the Company believes that it can
compete favorably with its existing and future competitors, there can be no
assurance that the Company will be successful in doing so.
 
EMPLOYEES
 
     As of July 31, 1996, approximately 750 technical consultants (approximately
560 hourly and 190 salaried) were working on full-time assignments for the
Company's clients. The Company's corporate and branch staffs consist of 64
full-time employees and three part-time employees. The Company is not a party to
any collective bargaining agreements and considers its relationships with its
employees to be good.
 
     Approximately 90.9% of the technical consultants placed by the Company
during 1996 were treated as employees of the Company for federal and state tax
purposes. For such employees, the Company pays Social Security Taxes (FICA),
federal and state unemployment taxes, workers' compensation insurance premiums,
certain employees benefits and other employee costs. The remainder of the
technical consultants were treated as independent contractors for federal and
state tax purposes. The Company believes that these consultants meet the
requirements for such treatment under applicable law.
 
ITEM 2.  PROPERTIES
 
     The Company's leased offices are described in the following table:
 
<TABLE>
<CAPTION>
                                                              APPROXIMATE       DATE LEASE
    LOCATION DESCRIPTION                                      SQUARE FEET         EXPIRES
    --------------------                                      -----------     ---------------
    <S>                                                       <C>             <C>
    Newport Beach Executive and Branch Offices..............     10,000          January 2000
    Woodland Hills Branch Office............................      1,400          January 1998
    San Francisco Branch Office.............................      2,200            March 1997
    Denver Branch Office....................................      1,500            March 2001
    Seattle Branch Office...................................      1,800           August 1999
    Omaha Branch Office.....................................      3,000          January 1997
    Kansas City Branch Office...............................      1,400           August 1997
                                                                 ------
                                                                 21,300
                                                                 ======
</TABLE>
 
ITEM 3.  LEGAL AND ADMINISTRATIVE PROCEEDINGS
 
     The Company is involved in legal proceedings from time to time in the
ordinary course of its business. As of the date of the filing of this Form 10-K,
there are no material legal proceedings pending against the Company.
 
ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
     None.
 
                                       11
<PAGE>   14
 
                                    PART II
 
ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
 
                          PRICE RANGE OF COMMON STOCK
 
     The following table sets forth the reported high and low sales prices of
the Common Stock for the quarters indicated as reported on the NASDAQ National
Market. The Company commenced its Offering on March 5, 1996, at a price per
share of $14.00. The Common Stock is traded on the NASDAQ National Market under
the symbol "DPRC".
 
<TABLE>
<CAPTION>
                                                                       HIGH     LOW
                                                                       ----     ----
        <S>                                                            <C>      <C>
        FISCAL YEAR 1996
          Third Quarter (from March 6, 1996).........................  $28 1/4  $18 3/8
          Fourth Quarter.............................................  $29 1/2  $16
</TABLE>
 
As of September 30, 1996, there were approximately 39 holders of record of the
Company's Common Stock.
 
     The Company has never declared or paid any cash dividends on its capital
stock and does not anticipate paying cash dividends on its Common Stock in the
foreseeable future. The Company currently intends to retain future earrings to
finance its operations and fund the growth of its business. Any payment of
future dividends will be at the discretion of the Board of Directors of the
Company and will depend upon, among other things, the Company's earnings,
financial condition, capital requirements, level of indebtedness, contractual
restrictions in respect to the payment of dividend and other factors that the
Company's Board of Directors deems relevant.
 
ITEM 6.  SELECTED FINANCIAL DATA (IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The selected historical financial data set forth below as of and for the
fiscal years ended July 31, 1996, 1995, 1994, 1993 and 1992 have been derived
from the audited financial statements of the Company. The selected pro forma
financial data set forth below are for informational purposes only and may not
necessarily be indicative of results of operations of the Company as they may be
in the future. The following information should be read in conjunction with the
Financial Statements and Notes thereto and "Management's Discussion and Analysis
of Financial Condition and Results of Operations" included elsewhere in this
10-K.
 
                                       12
<PAGE>   15
 
<TABLE>
<CAPTION>
                                                             FISCAL YEAR ENDED JULY 31,
                                                   -----------------------------------------------
                                                    1996      1995      1994      1993      1992
                                                   -------   -------   -------   -------   -------
<S>                                                <C>       <C>       <C>       <C>       <C>
STATEMENT OF INCOME DATA:
  Revenues.......................................  $58,145   $49,558   $34,165   $23,163   $20,621
  Cost of Professional Services..................   45,918    40,082    28,047    19,397    17,927
                                                   -------   -------   -------   -------   -------
  Gross Margin...................................   12,227     9,476     6,118     3,766     2,694
  Selling, General and Administrative Expenses...    6,719     5,769     5,581     3,648     2,530
                                                   -------   -------   -------   -------   -------
  Operating Income...............................    5,508     3,707       537       118       164
  Interest Expense...............................     (541)     (764)     (401)     (113)     (128)
  Interest Income................................      379        --        --        --        --
                                                   -------   -------   -------   -------   -------
  Income Before Provision for Income Taxes.......    5,346     2,943       136         5        36
  Provision for Income Taxes.....................    2,096     1,205        56         4        11
                                                   -------   -------   -------   -------   -------
  Net Income.....................................  $ 3,250   $ 1,738   $    80   $     1   $    25
                                                   =======   =======   =======   =======   =======
  Net Income Per Share...........................  $  0.54
                                                   =======
  Weighted Average Common and Common Equivalent
     Shares......................................    6,039
                                                   =======
PRO FORMA STATEMENT OF INCOME DATA(1):
  Operating Income...............................  $ 5,508   $ 4,178
                                                   =======   =======
  Net Income.....................................  $ 3,336   $ 2,015
                                                   =======   =======
  Net Income Per Share...........................  $  0.55   $  0.41
                                                   =======   =======
  Shares Used in Computation(2)..................    6,039     4,926
                                                   =======   =======
</TABLE>
 
<TABLE>
<CAPTION>
                                                                      JULY 31,
                                                   -----------------------------------------------
                                                    1996      1995      1994      1993      1992
                                                   -------   -------   -------   -------   -------
<S>                                                <C>       <C>       <C>       <C>       <C>
BALANCE SHEET DATA:
  Working Capital................................  $26,901   $ 1,833   $   267   $   817   $   664
  Total Assets...................................   44,029     7,623     5,638     3,487     2,851
  Total Long-term Debt, Including Current
     Portion(3)..................................       --     4,305     6,185       750       600
  Series A Convertible Preferred Stock(4)........       --     1,485        --        --        --
  Shareholders' Equity (Deficit)(4)(5)...........   40,036    (2,878)   (4,524)      217       216
</TABLE>
 
---------------
(1) The Pro Forma Statement of Income Data eliminates that portion of the
    founder compensation for each period which exceeded the $450,000 maximum
    annual amount that Ms. Weaver, currently the Company's Chairman and Chief
    Executive Officer, can receive under her present agreement with the Company
    and the write-off of $86,000 in fiscal 1996 of the deferred financing fees
    (net of tax in the net income calculation).
 
(2) In fiscal 1995 and the portion of fiscal 1996 through the date of the
    Offering, gives effect to: (i) the conversion of the outstanding shares of
    Series A Convertible Preferred Stock immediately prior to the consummation
    of the Offering; and (ii) the assumed exercise of all outstanding stock
    options using the treasury method pursuant to Staff Accounting Bulletin
    4(D).
 
(3) Does not include working capital borrowings under the Company's revolving
    credit facility, which were $836,000, $2,370,000, $1,735,000 and $1,370,000
    as of July 31, 1995, 1994, 1993 and 1992, respectively.
 
(4) The outstanding shares of Series A Convertible Preferred Stock were subject
    to mandatory redemption by the Company at any time after March 2005 upon the
    request of the holders of a majority of such shares then outstanding.
    Consequently, such shares were not included in actual shareholders' equity
    (deficit) as of July 31, 1995. Such shares automatically converted into
    592,000 shares of Common Stock immediately prior to the consummation of the
    Offering.
 
(5) The Company recorded a charge to retained earnings of approximately $4.8
    million in February 1994 in connection with the redemption of all shares of
    Common Stock not owned by Ms. Weaver.
 
                                       13
<PAGE>   16
 
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS
 
     In addition to the historical information contained herein, the following
discussion in this Form 10-K includes forward-looking statements which involve
risk and uncertainties, including, but not limited to, risks inherent in the
Company's growth strategy, acquisition risks, dependence on certain clients,
dependence on availability of qualified technical consultants and other factors
discussed in this Form 10-K and in the Company's filings with the Securities and
Exchange Commission.
 
OVERVIEW
 
     The Company is a provider of information technology specialty staffing
services to a diverse group of corporate clients. The Company has offices in
Newport Beach (also its corporate headquarters), Woodland Hills, San Francisco,
Denver, Seattle, Omaha, Kansas City and its recently opened branch in Des
Moines. Two of the locations are the result of the Company's recent acquisition
of Applications Design and Development, a division of an Omaha-based corporation
on July 1, 1996.
 
     Substantially all of the Company's revenues are based on the hourly
billings of its technical consultants and are recognized as services are
provided. Billing rates are determined according to the skill level of the
technical consultant assigned to the client. Most of the Company's technical
consultants are highly skilled professionals for whom the Company bills between
$50 and $55 per hour for mainframe; between $60 and $65 per hour for
client/server; and between $25 and $35 per hour for networking and
communications and help desk support. The overall average billing rate is
approximately $53 per hour.
 
     Although the Company serves a large number of clients in a broad range of
industry groups, approximately 41.4% of the Company's revenues in fiscal 1996
were derived from six foreign automobile and motorcycle manufacturers with
operations in Southern California, with one such client representing 10.2% of
revenues and another representing 8.8% of revenues. On an unaudited pro forma
basis, had the acquisition of ADD occurred as of the beginning of fiscal 1996,
approximately 33.3% of the Company's pro forma revenues in fiscal 1996 would
have been derived from six foreign automobile and motorcycle manufacturers with
operations in Southern California, with one such client representing 8.2% of
revenues and another representing 7.0% of revenues. Approximately 60.3% of the
Company's fiscal 1996 revenues were derived from its ten largest clients. On an
unaudited pro forma basis, had the acquisition of ADD occurred as of the
beginning of fiscal 1996, approximately 49.5% of the Company's fiscal 1996 pro
forma revenues would have been derived from its ten largest clients. A
significant increase or decrease in demand by a large client could have a
substantial effect on the Company's revenues, and revenues from any one client
can vary materially from period to period.
 
     Early in fiscal 1994, the Company began to implement a growth strategy
which has had a significant impact on the Company's financial condition and
results of operations over the past three years. As part of this strategy, the
Company hired a new President and Chief Operating Officer and added other
personnel to strengthen the Company's financial marketing and operating
infrastructure. In addition, the Company opened two new branch offices. These
strategic initiatives contributed to an increase in the Company's total revenues
from $23.2 million in fiscal 1993 to $58.1 million in fiscal 1996.
 
     During this period, the Company has also taken a number of steps to
increase revenue growth, improve gross and operating margins and enhance overall
financial performance. The Company has expanded its service offerings to include
networking and communications, help desk support, internetworking and similar
services which, while generally requiring lesser skilled consultants, may
provide higher gross margins. The Company's strategy of geographic expansion is
designed to improve operating results by increasing revenues without a
proportional increase in general and administrative expenses, and by permitting
the Company to enter markets which may be less competitive than the markets
currently served by the Company.
 
                                       14
<PAGE>   17
 
RESULTS OF OPERATIONS
 
     The following table sets forth the percentages of revenues represented by
certain items in the Company's statement of income for the indicated periods.
The following table also presents selected pro forma statement of income data
which gives effect to the elimination of that portion of the founder
compensation for each period which exceeded the $450,000 maximum annual amount
that Ms. Weaver can receive under her present agreement with the Company and the
write-off of $86,000 in deferred financing fees, net of tax, associated with the
repayment of the long-term debt. All such adjustments have been computed using
the Company's effective tax rate for such period.
 
<TABLE>
<CAPTION>
                                                                        FISCAL YEARS
                                                                  -------------------------
                                                                  1996      1995      1994
                                                                  -----     -----     -----
    <S>                                                           <C>       <C>       <C>
    SELECTED STATEMENT OF INCOME DATA:
      Revenues..................................................  100.0%    100.0%    100.0%
      Cost of Professional Services.............................   79.0%     80.9%     82.1%
                                                                  -----     -----     -----
      Gross Margin..............................................   21.0%     19.1%     17.9%
      Selling, General and Administrative Expenses..............   11.5%     11.6%     16.3%
                                                                  -----     -----     -----
      Operating Income..........................................    9.5%      7.5%      1.6%
      Net Income................................................    5.6%      3.5%      0.2%
    SELECTED PRO FORMA STATEMENT OF INCOME DATA:
      Pro Forma Operating Income................................    9.5%      8.4%
      Pro Forma Net Income......................................    5.7%      4.1%
</TABLE>
 
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
 
     The following table presents certain unaudited quarterly financial
information for each of the Company's last eight fiscal quarters. In the opinion
of the Company's management, this quarterly information has been prepared on the
same basis as the audited financial statements appearing elsewhere in this 10-K
and includes all adjustments (consisting only of normal recurring adjustments)
necessary to present fairly the unaudited quarterly results set forth herein.
The Company's quarterly results have in the past been subject to fluctuations,
and thus, the operating results for any quarter are not necessarily indicative
of results for any future period. The following table also presents selected pro
forma statement of income data which gives effect to the elimination of that
portion of the founder compensation for each period which exceeded the $450,000
maximum annual amount that Ms. Weaver can receive under her present agreement
with the Company and the write-off of $86,000 in deferred financing fees, net of
tax, associated with the repayment of the long-term debt. All such adjustments
have been computed using the Company's effective tax rate for such period.
 
<TABLE>
<CAPTION>
                                                                        QUARTER ENDED
                                    -------------------------------------------------------------------------------------
                                    07/31/96   04/30/96   01/31/96   10/31/95   07/31/95   04/30/95   01/31/95   10/31/94
                                    --------   --------   --------   --------   --------   --------   --------   --------
                                                         (IN THOUSANDS, EXCEPT NET INCOME PER SHARE)
<S>                                 <C>        <C>        <C>        <C>        <C>        <C>        <C>        <C>
SELECTED STATEMENT OF INCOME DATA:
  Revenues........................  $16,130    $14,815    $13,246    $13,954    $14,305    $12,780    $11,360    $11,113
  Cost of Professional Services...   12,670     11,780     10,433     11,035     11,638     10,338      9,025      9,081
                                    -------    -------    -------    -------    -------    -------    -------    -------
  Gross Margin....................    3,460      3,035      2,813      2,919      2,667      2,442      2,335      2,032
  Selling, General and
    Administrative
    Expenses......................    1,878      1,606      1,744      1,491      1,641      1,434      1,403      1,291
                                    -------    -------    -------    -------    -------    -------    -------    -------
  Operating Income................  $ 1,582    $ 1,429    $ 1,069    $ 1,428    $ 1,026    $ 1,008    $   932    $   741
  Net Income......................  $ 1,132    $   823    $   542    $   753    $   514    $   478    $   429    $   317
SELECTED PRO FORMA STATEMENT
  OF INCOME DATA:
  Operating Income................  $ 1,582    $ 1,429    $ 1,069    $ 1,428    $ 1,060    $ 1,144    $ 1,032    $   942
  Net Income......................    1,132        909        542        753        533        557        488        437
  Net Income Per Share............  $  0.15    $  0.14    $  0.11    $  0.15    $  0.11    $  0.11    $  0.10    $  0.09
  Weighted Average Common Shares..    7,753      6,550      4,926      4,926      4,926      4,926      4,926      4,926
  Gross Margin percentage.........     21.5 %     20.5 %     21.2 %     20.9 %     18.6 %     19.1 %     20.6 %     18.3 %
  Operating Income percentage.....      9.8 %      9.6 %      8.1 %     10.2 %      7.4 %      9.0 %      9.1 %      8.5 %
</TABLE>
 
                                       15
<PAGE>   18
 
     Demand for the Company's services is generally lower in the quarter ending
January 31 due to reduced activity during the holiday season and a lower number
of working days for those clients which curtail operations between Christmas and
New Years Day. The Company anticipates that its business will continue to be
subject to such seasonal variations.
 
RESULTS OF OPERATIONS
 
FISCAL YEAR ENDED JULY 31, 1996 COMPARED TO FISCAL YEAR ENDED JULY 31, 1995
 
     Revenues.  Revenues increased $8.6 million, or 17.3%, to $58.1 million for
fiscal 1996 as compared to $49.6 million for fiscal 1995. This increase resulted
primarily from billings to new clients both in existing locations as well as the
new locations in Denver and Seattle, and from increased billings to the
Company's existing clients due to: (i) new information technology projects; (ii)
increased demand in the networking and communications market, (iii) a broadening
of the types of services being provided; and (iv) increased demand for the most
highly skilled consultants who are billed at higher hourly rates. To a lesser
extent the increase also resulted from one month of revenue from the Company's
acquisition of two branch facilities and substantially all of the related assets
of the Applications Design and Development division of ADD Consulting, Inc., an
Omaha-based corporation, on July 1, 1996. The above increases were offset by the
performance of the San Francisco branch which contributed $2.2 million to
revenues in fiscal 1996, down from $3.6 million in fiscal 1995.
 
     Gross Margin.  Gross margin increased $2.8 million, to $12.2 million, for
fiscal 1996 as compared to $9.5 million for fiscal 1995. As a percentage of
revenues, gross margin increased for fiscal 1996 to 21.0% as compared to 19.1%
for the prior year period. This improvement reflects the modest price increases
which the Company has been able to implement, a change in business mix, with an
increased component of higher margin client/server and networking and
communications services in the 1996 period.
 
     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased approximately $1.0 million, or 16.5%, to $6.7
million for fiscal 1996, as compared to $5.8 million for fiscal 1995. As a
percentage of revenues, selling, general and administrative expenses decreased
to 11.5% for fiscal 1996 as compared to 11.6% for fiscal 1995. This decrease as
a percentage of revenues primarily resulted from lower founder's and executive
incentive compensation offset by several factors, including: (i) higher
commissions as a percentage of revenues reflecting the higher commission rates
paid for higher margin billings; (ii) investment in additional management
personnel and corporate infrastructure required to support planned Company
growth; and (iii) costs associated with the opening of new branch locations in
Seattle and Denver.
 
     Operating Income.  Operating income increased $1.8 million, or 48.6% to
$5.5 million for fiscal 1996 from $3.7 million for the same period in 1995. As a
percentage of revenues, operating income increased on a pro forma basis to 9.5%
for fiscal 1996 as compared to 7.5% for fiscal 1995. This increase as a
percentage of revenues reflects the improvement in gross margin as a percentage
of revenues and lower founder's compensation and lower executive incentive
compensation.
 
     Interest Expense.  Interest expense decreased to $541,000 for fiscal 1996
from $764,000 for fiscal 1995. The decrease in interest expense reflects lower
borrowing costs resulting from the refinancing transactions in March 1995 and
reduction of interest expense due to the retirement of the long-term debt from
the proceeds of the Offering offset by a write-off of $86,000 of deferred
financing fees, net of tax, which arose from the retirement of the long-term
debt.
 
     Interest Income.  Interest income was $379,000 for fiscal 1996. The
increase in interest income reflects the interest income from the investment of
the proceeds of the Offering.
 
     Provision for Income Taxes.  The Company's effective tax rate decreased to
39.2% in fiscal 1996 from 40.9% in fiscal 1995. The decrease in the effective
tax rate is primarily due to the tax benefit associated with investment in
short-term tax exempt cash equivalents.
 
                                       16
<PAGE>   19
 
FISCAL YEAR ENDED JULY 31, 1995 COMPARED TO FISCAL YEAR ENDED JULY 31, 1994
 
     Revenues.  Revenues increased $15.4 million, or 45.1%, to $49.6 million for
fiscal 1995 as compared to $34.2 million for fiscal 1994. Approximately half of
such increase was attributable to higher billings to the Company's ten largest
customers, with approximately 23.9% of such increase coming from increased
billings to a single client. Higher demand was also experienced from several
smaller clients. In addition, the San Francisco branch, in its second full year
of operations, contributed approximately $3.6 million to revenues in fiscal 1995
as compared to approximately $1.1 million in fiscal 1994. Other factors which
contributed to the increase in revenues were an increase in the management fee,
price increases and increased demand for the most highly skilled consultants who
are billed at higher hourly rates.
 
     Gross Margin.  Gross margin increased $3.4 million, to $9.5 million for
fiscal 1995 as compared to $6.1 million for fiscal 1994. As a percentage of
revenues, gross margin increased for fiscal 1995 to 19.1% as compared to 17.9%
for fiscal 1994. This improvement reflects price increases and improved contract
administration as well as an improved business mix in fiscal 1995.
 
     Selling, General and Administrative Expenses.  Selling, general and
administrative expenses increased $200,000, or 3.4% to $5.8 million for fiscal
1995 as compared to $5.6 million for fiscal 1994. As a percentage of revenues,
selling, general and administrative expenses decreased to 11.6% for fiscal 1995
as compared to 16.3% for fiscal 1994. This decrease resulted from lower
founder's compensation, the elimination of the management fee paid to the other
founder's management company, a reduction in expense for outside professional
services, due in part to the addition of the Company President as a full time
employee in September 1994. Legal and accounting expenses were also unusually
high in fiscal 1994 due to the costs incurred in the February 1994 redemption of
certain shares of Common Stock. These increases were partially offset by higher
staff bonuses in fiscal 1995 and an increase in administrative and temporary
personnel needed in fiscal 1995 to support the growth in revenues.
 
     Operating Income.  Operating income increased approximately $3.2 million to
$3.7 million for fiscal 1995 as compared to $537,000 for fiscal 1994. As a
percentage of revenues, operating income increased to 7.5% for fiscal 1995 as
compared to 1.6% for fiscal 1994. This increase primarily reflects the
elimination of the management fee and the reduction in founder compensation for
fiscal 1995 and, to a lesser extent, an increase in gross margin as a percentage
of revenues offset in part by the increase in selling, general and
administrative expenses as a percentage of revenues.
 
     Interest Expense.  Interest expense increased to $764,000 for fiscal 1995
as compared to $401,000 for fiscal 1994 due to increased borrowings incurred in
connection with the February 1994 redemption of certain shares of Common Stock.
 
     Provision for Income Taxes.  The Company's effective tax rate decreased to
40.9% in fiscal 1995 from 41.2% in fiscal 1994.
 
RECENTLY ISSUED ACCOUNTING STANDARDS
 
     In March 1995, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 121, Accounting for
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of,
which becomes effective for fiscal years beginning after December 14, 1995. SFAS
No. 121 requires that long-lived assets and certain identifiable intangibles
held and used by an entity be reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company will adopt this Statement in fiscal 1997 as required,
and its adoption is not expected to have a significant effect on reported
earnings, financial condition or cash flows.
 
     In October 1995, the Financial Accounting Standards Board issued SFAS No.
123, Accounting for Stock-Based Compensation, which will be effective for the
Company for the year beginning August 1, 1996. SFAS No. 123 requires extended
disclosures of stock-based compensation arrangements with employees and
encourages (but does not require) compensation cost to be measured based on the
fair value of the equity instrument awarded. Companies are permitted, however,
to continue to apply Accounting Principles Board Opinion No. 25 (APB 25),
"Accounting for Stock Issued to Employees", which recognizes compensation cost
 
                                       17
<PAGE>   20
 
based on the intrinsic value of the equity instrument awarded. The Company will
continue to apply APB 25 to its stock-based compensation awards to employees and
will disclose the required pro forma effect on net income and earnings per share
beginning in fiscal 1997.
 
INFLATION
 
     The effects of inflation on the Company's operation were not significant
during the periods presented in the financial statements.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     Cash and cash equivalents and net working capital totaled $21.9 million and
$26.9 million, respectively, as of July 31, 1996. The primary sources of cash
generated from operations in fiscal 1996 were net income and a decrease in
receivables from affiliates, offset by payments of income taxes payable and an
increase in accounts receivable. The Company used $5.1 million in cash to pay
off all outstanding borrowings under the former credit arrangement and generated
cash from financing activities of $34.3 million in net proceeds from the
Offering completed early in March 1996.
 
     The former credit arrangement provided for a term loan and a revolving line
of credit totaling $9.25 million. The Company has repaid all outstanding
borrowings under the credit arrangement with a portion of the proceeds from the
Offering.
 
     Subsequent to year end the Company obtained a two-year, $20.0 million New
Credit Agreement ("New Credit Agreement") with a bank. The credit consists of a
revolving line of credit in the principal amount of $10.0 million, which bears
interest at the prime rate or LIBOR plus 1.0%, and a revolving loan in the
principal amount of $10.0 million, which bears interest at the prime rate or
LIBOR plus 1.25%. Both facilities are secured by accounts receivable and
equipment. Additional pricing options and alternatives are available depending
on certain financial conditions. The New Credit Agreement contains various
covenants, including the maintenance of defined financial ratios such as
liquidity and tangible net worth. As of July 31, 1996 the Company had no
outstanding borrowings under the New Credit Agreement.
 
     The Company anticipates that its primary uses of working capital in future
periods will be for acquisitions, the internal development of new branches and
the funding of increases in accounts receivable. Although the Company intends to
use its common stock to make acquisitions to the extent possible, potential
acquisition candidates may require that all or a significant portion of the
purchase price be paid in cash. The Company cannot predict to what extent new
branches will be added through acquisitions as compared to internal development.
The Company's ability to grow through acquisitions is dependent on the
availability of suitable acquisition candidates and the terms on which such
candidates may be acquired, which may be adversely affected by competition for
such acquisitions. The Company anticipates that the opening of new branches will
require an investment of approximately $150,000 to $200,000 per branch to
acquire equipment and supplies and to fund operating losses for the initial
nine- to twelve-month period of operations which management believes will
generally be required for a new branch to achieve profitability. The Company
expenses the costs of opening a new branch as incurred, except for the cost of
equipment and other capital assets, which are capitalized. Generally,
expenditures for such capital assets for a new branch will be less than $50,000.
There can be no assurance that future branches will achieve profitability within
a nine- to twelve-month period after opening, if at all.
 
     The Company anticipates making additional capital expenditures, including
hardware and software, in connection with the development of new branch
facilities in future periods and the improvement of its network and operating
system infrastructure and management reporting system. The Company believes that
the existing cash and cash equivalents, together with cash flow from operations
and available borrowings under the new credit facility, will be sufficient to
meet the Company's presently anticipated working capital needs for at least the
next 12 months although there can be no assurances in this regard.
 
                                       18
<PAGE>   21
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
     See "Item 14(a)".
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
     None.
 
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
 
     The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held December 17,
1996 to be filed with the Securities and Exchange Commission within 120 days
after July 31, 1996 and is incorporated herein by reference.
 
ITEM 11. EXECUTIVE COMPENSATION
 
     The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held December 17,
1996 to be filed with the Securities and Exchange Commission within 120 days
after July 31, 1996 and is incorporated herein by reference.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
     The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held December 17,
1996 to be filed with the Securities and Exchange Commission within 120 days
after July 31, 1996 and is incorporated herein by reference.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
     The information required by this item will be contained in the Company's
Proxy Statement for its Annual Meeting of Shareholders to be held December 17,
1996 to be filed with the Securities and Exchange Commission within 120 days
after July 31, 1996 and is incorporated herein by reference.
 
                                    PART IV
 
ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
 
(A) 1. INDEX TO FINANCIAL STATEMENTS FILED AS PART OF THIS REPORT:
 
<TABLE>
    <S>                                                                    <C>
    Independent Auditors' Report..........................................        F-1
    Balance Sheets as of July 31, 1996 and 1995...........................        F-2
    Statements of Income for the Years Ended July 31, 1996, 1995 and
      1994................................................................        F-3
    Statements of Shareholders' Equity (Deficit) for the Years Ended July
      31, 1996, 1995 and 1994.............................................        F-4
    Statements of Cash Flows for the Years Ended July 31, 1996, 1995 and
      1994................................................................        F-5
    Notes to Financial Statements for the Years Ended July 31, 1996, 1995
      and 1994 ........................................................... F-6 through F-12
</TABLE>
 
    2. FINANCIAL STATEMENT SCHEDULES
 
<TABLE>
    <S>            <C>                                                              <C>
    Schedule II.   Valuation and Qualifying Accounts for the Years Ended July 31,
                   1996, 1995 and 1994............................................   S-1
</TABLE>
 
                                       19
<PAGE>   22
 
    3. EXHIBITS
 
<TABLE>
<CAPTION>
    EXHIBIT NUMBER                                     DESCRIPTION
----------------------   ------------------------------------------------------------------------
<C>                      <S>
          2.1            Agreement of Purchase and Sale of Assets dated July 1, 1996, by and
                         among Data Processing Resources Corporation, ADD Consulting, Inc. and
                         Gerald R. Ladd(2)
          2.2            Registration Rights Agreement dated July 1, 1996, by and between Data
                         Processing Resources Corporation and ADD Consulting, Inc.(2)
          3.1            Restated Articles of Incorporation of the Company(1)
          3.2            Restated Bylaws of the Company(1)
          4.1            Investors' Rights Agreement dated as of March 2, 1995, by and among the
                         Company and the Holders who are signatories thereto, as amended by
                         Amendment No. 1(1)
          4.2            Specimen Common Stock certificate(1)
         10.1            Employment Agreement dated as of August 1, 1996 between the Company and
                         David M. Connell(1)*
         10.2            Employment Agreement dated as of August 1, 1995 between the Company and
                         Mary Ellen Weaver(1)*
         10.3            Employment Agreement dated September 15, 1994 between the Company and
                         Paulette J. Suiter(1)*
         10.4            Employment Agreement dated as of January 5, 1996 between the Company and
                         Michael A. Piraino(1)*
         10.5            1994 Stock Option Plan, as amended(1)*
         10.6            Form of Stock Option Agreement(1)*
         10.7            Management Services Agreement dated as of December, 1993 between the
                         Company and Information Technology Resources, Inc.(1)
         10.8            Covenant Not to Compete dated as of February 28, 1994 by and among the
                         Company and Thomas A. Ballantyne, III, Candice M. Ballantyne, and
                         Ballantyne Computer Service, Inc.(1)
         10.9            Form of Indemnification Agreement between the Company and each of its
                         directors and certain officers(1)*
         10.10           Employment Agreement dated as of March 1, 1996 between the Company and
                         Richard E. Earley(1)*
         10.11           Credit Agreement dated as of October 25, 1996 between Data Processing
                         Resources Corporation and Wells Fargo Bank, National Association.
         27.1            Financial Data Schedule
</TABLE>
 
---------------
(1) Incorporated by reference to Amendment No. 3 to the Company's Registration
    Statement on Form S-1 (No. 333-00098) as filed with the Securities and
    Exchange Commission on March 5, 1996
 
(2) Incorporated by reference to the Company's Current Report on Form 8-K dated
    July 1, 1996, as filed with the Securities and Exchange Commission on July
    16, 1996 and, as amended, on August 27, 1996
 
 *  Management contract or compensatory plan or arrangement required to be filed
    as an exhibit pursuant to applicable rules of the Securities and Exchange
    Commission.
 
(B) REPORTS ON FORM 8-K.
 
     The Registrant filed the following reports on Form 8-K with the Securities
and Exchange Commission during the fourth quarter of 1996:
 
        Current Report on Form 8-K dated July 1, 1996, describing under Item 2
        the acquisition of two branch facilities and substantially all of the
        related assets of the Applications Design and Development division of
        ADD Consulting, Inc., pursuant to a definitive Agreement of Purchase and
        Sale of Assets dated July 1, 1996, by and among Data Processing
        Resources Corporation, ADD Consulting, Inc. and Gerald R. Ladd. The
        Company filed an amendment to this report dated August 27, 1996,
        including therein financial statements relating to such acquisition.
 
                                       20
<PAGE>   23
 
                                   SIGNATURES
 
     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

 
                                      DATA PROCESSING RESOURCES CORPORATION
 
                                      By: /s/  MARY ELLEN WEAVER
                                         ---------------------------------
                                               Mary Ellen Weaver
                                               Chairman of the Board
                                               and Chief Executive Officer
 
Date: October 29, 1996
 
     Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.
 
<TABLE>
<CAPTION>

                SIGNATURE                                TITLE                      DATE
------------------------------------------    ----------------------------    -----------------
<C>                                           <S>                             <C>

       /s/  MARY ELLEN WEAVER                 Chairman of the Board, Chief     October 29, 1996
------------------------------------------    Executive Officer and
            Mary Ellen Weaver                 Director (Principal
                                              Executive Officer)


       /s/  DAVID M. CONNELL                  President, Chief Operating       October 29, 1996
------------------------------------------    Officer and Director
            David M. Connell


       /s/  MICHAEL A. PIRAINO                Senior Vice President and        October 29, 1996
------------------------------------------    Chief Financial Officer
            Michael A. Piraino                (Principal Financial and
                                              Accounting Officer)


       /s/  J. CHRISTOPHER LEWIS              Director                         October 29, 1996
------------------------------------------
            J. Christopher Lewis


       /s/  LI-SAN HWANG                      Director                         October 29, 1996
------------------------------------------
            Li-San Hwang


       /s/  JOANN WAGNER                      Director                         October 29, 1996
------------------------------------------
            JoAnn Wagner
</TABLE>
 
                                       21
<PAGE>   24
 
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Shareholders of Data Processing Resources
Corporation:
 
     We have audited the accompanying balance sheets of Data Processing
Resources Corporation as of July 31, 1996 and 1995, and the related statements
of income, shareholders' equity (deficit) and cash flows for each of the three
years ended in the period July 31, 1996. Our audits also included the financial
statement schedule listed in the index at Item 14. These financial statements
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
 
     We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
     In our opinion, such financial statements present fairly, in all material
respects, the financial position of Data Processing Resources Corporation at
July 31, 1996 and 1995, and the results of its operations and its cash flows for
each of the three years in the period ended July 31, 1996 in conformity with
generally accepted accounting principles. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic financial
statements taken as a whole, presents fairly in all material respects the
information set forth therein.
 
DELOITTE & TOUCHE LLP
 
Costa Mesa, California
September 19, 1996
(October 25, 1996 as to Note 12)
 
                                       F-1
<PAGE>   25
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                                 BALANCE SHEETS
                          AS OF JULY 31, 1996 AND 1995
 
<TABLE>
<CAPTION>
                                                                                1996            1995
                                                                             -----------     -----------
<S>                                                                          <C>             <C>
                                                 ASSETS
Current Assets:
  Cash and Cash Equivalents................................................  $21,855,000     $   248,000
  Accounts Receivable (net of allowance for doubtful accounts of $129,000
     and $63,000 as of July 31, 1996 and 1995, respectively)...............    8,436,000       6,256,000
  Receivables from Affiliates..............................................      128,000         343,000
  Prepaid Expenses and Other Current Assets................................      259,000          86,000
  Deferred Tax Asset.......................................................      216,000         263,000
                                                                             -----------     -----------
          Total Current Assets.............................................   30,894,000       7,196,000
Property:
  Furniture and Fixtures...................................................      209,000         120,000
  Equipment................................................................      896,000         333,000
  Leasehold Improvements...................................................       26,000              --
                                                                             -----------     -----------
                                                                               1,131,000         453,000
  Less Accumulated Depreciation............................................     (392,000)       (225,000)
                                                                             -----------     -----------
          Property, Net....................................................      739,000         228,000
Other Assets...............................................................       69,000         199,000
Intangible Assets..........................................................   12,327,000              --
                                                                             -----------     -----------
                                                                             $44,029,000     $ 7,623,000
                                                                             ===========     ===========
                             LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
  Accounts Payable and Accrued Liabilities.................................  $ 3,690,000     $ 2,464,000
  Income Taxes Payable.....................................................      303,000       1,411,000
  Line of Credit...........................................................           --         836,000
  Current Portion of Long-Term Debt........................................           --         652,000
                                                                             -----------     -----------
          Total Current Liabilities........................................    3,993,000       5,363,000
Long-Term Debt.............................................................           --       3,653,000
Commitments and Contingencies
Mandatorily Redeemable Stock:
  Series A Preferred Stock -- no par value; 1,480 shares authorized; 0 and
     1,480 shares issued and outstanding as of July 31, 1996 and July 31,
     1995, respectively (Liquidation preferences of $1,676,000 as of July
     31, 1995).............................................................           --       1,485,000
Shareholders' Equity (Deficit):
  Preferred Stock; 2,000,000 shares authorized; no shares issued and
     outstanding...........................................................           --              --
  Common Stock; 20,000,000 shares authorized; 7,492,321 and 4,000,000
     shares issued and outstanding as of July 31, 1996 and July 31, 1995,
     respectively..........................................................   38,125,000           2,000
  Additional Paid-in Capital...............................................    1,636,000              --
  Retained Earnings (Deficit)..............................................      275,000      (2,880,000)
                                                                             -----------     -----------
          Total Shareholders' Equity (Deficit).............................   40,036,000      (2,878,000)
                                                                             -----------     -----------
                                                                             $44,029,000     $ 7,623,000
                                                                             ===========     ===========
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       F-2
<PAGE>   26
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                              STATEMENTS OF INCOME
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                                         1996            1995            1994
                                                      -----------     -----------     -----------
<S>                                                   <C>             <C>             <C>
HISTORICAL
Revenues............................................  $58,145,000     $49,558,000     $34,165,000
Cost of Professional Services.......................   45,918,000      40,082,000      28,047,000
                                                      -----------     -----------     -----------
  Gross Margin......................................   12,227,000       9,476,000       6,118,000
Selling, General and Administrative Expenses........    6,719,000       5,769,000       5,581,000
                                                      -----------     -----------     -----------
Operating Income....................................    5,508,000       3,707,000         537,000
Interest Expense....................................     (541,000)       (764,000)       (401,000)
Interest Income.....................................      379,000              --              --
                                                      -----------     -----------     -----------
Income before Provision for Income Taxes............    5,346,000       2,943,000         136,000
Provision for Income Taxes..........................    2,096,000       1,205,000          56,000
                                                      -----------     -----------     -----------
Net Income..........................................  $ 3,250,000     $ 1,738,000     $    80,000
                                                      ===========     ===========     ===========
Net Income Per Share................................  $      0.54
                                                      ===========
Weighted Average Common and Common Equivalent
  Shares............................................    6,039,000
                                                      ===========
PRO FORMA
Historical Net Income...............................  $ 3,250,000     $ 1,738,000
Write-Off of Deferred Financing Fees (net of income
  tax)..............................................       86,000              --
Founder Compensation (net of income tax)............           --         277,000
                                                      -----------     -----------
Pro Forma Net Income................................  $ 3,336,000     $ 2,015,000
                                                      ===========     ===========
Pro Forma Net Income Per Share......................  $      0.55     $      0.41
                                                      ===========     ===========
Weighted Average Common and Common Equivalent
  Shares............................................    6,039,000       4,926,000
                                                      ===========     ===========
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       F-3
<PAGE>   27
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                  STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
<TABLE>
<CAPTION>
                                   COMMON STOCK            ADDITIONAL      RETAINED
                            --------------------------      PAID-IN        EARNINGS
                              SHARES         AMOUNT         CAPITAL        (DEFICIT)         TOTAL
                            ----------     -----------     ----------     -----------     -----------
<S>                         <C>            <C>             <C>            <C>             <C>
BALANCE, August 1, 1993...   8,000,000     $     3,000                    $   214,000     $   217,000
Net Income................          --              --             --          80,000          80,000
Repurchase of Common
  Stock...................  (4,000,000)         (1,000)            --      (4,820,000)     (4,821,000)
                            ----------      ----------     ----------      ----------     -----------
BALANCE, July 31, 1994....   4,000,000           2,000             --      (4,526,000)     (4,524,000)
Net Income................          --              --             --       1,738,000       1,738,000
Accretion to Redemption
  Value on Series A
  Preferred Stock.........          --              --             --         (92,000)        (92,000)
                            ----------      ----------     ----------      ----------     -----------
BALANCE, July 31, 1995....   4,000,000           2,000             --      (2,880,000)     (2,878,000)
Net Income................                                                  3,250,000       3,250,000
Exercise of Stock
  Options.................      22,200          29,000             --              --          29,000
Accretion to Redemption
  Value on Series A
  Preferred Stock.........          --              --             --         (95,000)        (95,000)
Conversion of Preferred
  Shares into Common
  Shares Concurrent with
  Initial Public
  Offering................     592,000              --      1,580,000              --       1,580,000
Issuance of Common Shares
  in Initial Public
  Offering, Net...........   2,726,000      34,329,000             --              --      34,329,000
Issuance of Common Shares
  in Acquisition..........     152,121       3,765,000             --              --       3,765,000
Tax Benefit Related to
  Exercise of Stock
  Options.................          --              --         56,000              --          56,000
                            ----------      ----------     ----------      ----------     -----------
BALANCE, JULY 31, 1996....   7,492,321     $38,125,000     $1,636,000     $   275,000     $40,036,000
                            ==========      ==========     ==========      ==========     ===========
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       F-4
<PAGE>   28
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                            STATEMENTS OF CASH FLOWS
                  FOR THE YEARS ENDED JULY 31, 1996, 1995 1994
 
<TABLE>
<CAPTION>
                                                             1996          1995          1994
                                                          -----------   -----------   -----------
<S>                                                       <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income..............................................  $ 3,250,000   $ 1,738,000   $    80,000
Adjustments to Reconcile Net Income to Net Cash Provided
  by (Used in) Operating Activities:
     Depreciation and Amortization......................      208,000        83,000        72,000
     Deferred Income Taxes..............................       47,000      (263,000)           --
  Changes in Operating Assets and Liabilities,
     Net of the Effect of Acquisition:
       Accounts Receivable..............................     (759,000)   (1,264,000)   (1,773,000)
       Receivables from Affiliates......................      215,000      (294,000)        1,000
       Prepaid Expenses and Other Assets................     (138,000)     (132,000)       (6,000)
       Accounts Payable and Accrued Liabilities.........       16,000       903,000       770,000
       Income Taxes Payable.............................   (1,052,000)    1,359,000        52,000
                                                          -----------   -----------   -----------
     Net Cash Provided by (Used in) Operating
       Activities.......................................    1,787,000     2,130,000      (804,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash Paid for Acquisition...............................   (8,785,000)           --            --
Purchase of Property....................................     (612,000)     (142,000)     (191,000)
Decrease (Increase) in Restricted Investment............           --       250,000      (250,000)
                                                          -----------   -----------   -----------
     Net Cash (Used in) Provided by Investing
       Activities.......................................   (9,397,000)      108,000      (441,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Initial Public Offering of Common Stock,
  Net...................................................   34,329,000            --            --
Proceeds from the Exercise of Stock Options.............       29,000            --            --
Proceeds from Line of Credit............................           --       836,000       635,000
Repayment of Line of Credit.............................     (836,000)   (2,370,000)           --
(Repayment of) Proceeds from Notes Payable to
  Shareholder...........................................           --    (1,350,000)      975,000
Proceeds from Notes Payable -- Other....................           --     4,250,000        83,000
Proceeds from Issuance of Preferred Stock, Net..........           --     1,393,000            --
Repayment of Notes Payable to Former Shareholders.......           --    (4,753,000)     (443,000)
Repayment of Notes Payable -- Other.....................   (4,305,000)      (21,000)       (7,000)
                                                          -----------   -----------   -----------
     Net Cash Provided by (Used in) Financing
       Activities.......................................   29,217,000    (2,015,000)    1,243,000
                                                          -----------   -----------   -----------
NET INCREASE (DECREASE) IN CASH.........................   21,607,000       223,000        (2,000)
Cash and Cash Equivalents, Beginning of Year............      248,000        25,000        27,000
                                                          -----------   -----------   -----------
Cash and Cash Equivalents, End of Year..................  $21,855,000   $   248,000   $    25,000
                                                          ===========   ===========   ===========
SUPPLEMENTAL INFORMATION -- CASH PAID FOR:
Interest................................................  $   424,000   $   725,000   $   402,000
                                                          ===========   ===========   ===========
Income Taxes............................................  $ 3,102,000   $   108,000   $     4,000
                                                          ===========   ===========   ===========
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING
  ACTIVITIES:
Repurchase of Common Stock..............................                              $ 4,822,000
Issuance of Notes Payable to Former Shareholders........                              $ 4,822,000
Conversion of Preferred Stock to Common Stock...........  $ 1,580,000
Tax Benefit of Stock Options Exercised..................  $    56,000
Detail of Business Acquired in Purchase Transactions:
  Fair Value of Assets Acquired.........................  $ 1,512,000
  Common Stock Issued in Acquisition....................  $ 3,765,000
  Cash Paid for Acquisition, Net of Cash Acquired.......  $ 8,785,000
  Liabilities Assumed or Created........................  $ 1,210,000
</TABLE>
 
                See accompanying notes to financial statements.
 
                                       F-5
<PAGE>   29
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
1.  GENERAL
 
     Business -- Data Processing Resources Corporation (the Company), which was
incorporated in California on August 15, 1984, is a leading specialty staffing
company providing information technology services to a diverse group of
corporate clients.
 
     Pro Forma Operating Income, Net Income and Net Income Per Share -- Net
income per share for the year ended July 31, 1994 is not presented because it is
not indicative of the ongoing entity. Pro forma net income has been presented
for years ended July 31, 1996 and 1995 to reflect the effect of the reduction of
founder compensation which exceeds the $450,000 maximum amount that can be
received under the founder's present agreement with the Company (net of tax in
the net income calculation) and the write-off of $86,000 in fiscal 1996 of the
deferred financing fees (net of tax in the pro forma net income calculation)
associated with the repayment of the long-term debt.
 
     Net income per share and pro forma net income per share have been computed
by dividing net income and pro forma net income by the weighted average number
of shares of common and common equivalent shares outstanding during the period.
Weighted average common and common equivalent shares included common shares,
stock options using the treasury stock method and the assumed conversion of all
outstanding shares of preferred stock into shares of common stock. Redeemable
preferred stock (Note 6) has been treated as common share equivalents in
calculating net income per share.
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
     Cash and Cash Equivalents -- The Company considers all highly-liquid
investments with an original maturity of three months or less to be cash
equivalents.
 
     Property -- The cost of furniture, fixtures and equipment is depreciated
using accelerated methods based on the estimated useful lives of the related
assets, generally five to seven years. Leasehold improvements are amortized over
the lesser of 5 years or the life of the lease.
 
     Intangible Assets -- Intangible assets include goodwill which represents
the excess of cost over fair value of net assets acquired and is amortized using
the straight-line method over 25 years.
 
     Revenue Recognition -- The Company recognizes revenue as services are
performed.
 
     Fair Value of Financial Instruments -- Management believes the carrying
amounts of cash and cash equivalents, accounts receivable and accounts payable
approximates fair value due to the short maturity of these financial
instruments.
 
     Income Taxes -- The Company provides for income taxes in accordance with
Statement of Financial Accounting Standards (SFAS) No. 109. SFAS No. 109 is an
asset and liability approach that requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that
have been recognized in the Company's financial statements or tax returns. In
estimating future tax consequences, the Company generally considers all expected
future events other than enactment's of changes in the tax law or rates.
 
     Reclassifications -- Certain items in the prior years' financial statements
may have been reclassified to conform to the current year's presentation.
 
     Use of Estimates -- The preparation of financial statements in conformity
with generally accepted accounting principles necessarily requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and related disclosure at the date of the financial statements and
the
 
                                       F-6
<PAGE>   30
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
reported amounts of revenues and expenses during the reporting years. Actual
results could differ from these estimates.
 
     Recent Accounting Pronouncements -- In March 1995, the Financial Accounting
Standards Board (FASB) issued SFAS No. 121, Accounting for Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed of, which becomes
effective for fiscal years beginning after December 14, 1995. SFAS No. 121
requires that long-lived assets and certain identifiable intangibles held and
used by an entity be reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. The Company will adopt this statement in fiscal 1997 as required,
and its adoption is not expected to have a significant effect on reported
earnings, financial condition or cash flows.
 
     In October 1995, the FASB issued SFAS No. 123, Accounting for Stock-Based
Compensation, which will be effective for the Company for the year beginning
August 1, 1996. SFAS No. 123 requires extended disclosures of stock-based
compensation arrangements with employees and encourages (but does not require)
compensation cost to be measured based on the fair value of the equity
instrument awarded. Companies are permitted, however, to continue to apply
Accounting Principles Board Opinion No. 25 (APB 25), "Accounting for Stock
Issued to Employees", which recognizes compensation cost based on the intrinsic
value of the equity instrument awarded. The Company will continue to apply APB
25 to its stock-based compensation awards to employees and will disclose the
required pro forma effect on net income and earnings per share beginning in
fiscal 1997.
 
3.  ACQUISITIONS
 
     On July 1, 1996, the Company acquired the information technology staffing
business, including two branch facilities and substantially all of the related
assets, of the Applications Design and Development, division of ADD Consulting,
Inc. ("ADD"), an Omaha-based company. The aggregate purchase price of the
acquisition was $12,850,000, consisting of $8,785,000 in cash, 152,121 shares of
restricted Company common stock valued at $3,765,000 and a deferred payment of
$300,000. This acquisition was accounted for as a purchase. The excess of cost
over fair value of net assets acquired was allocated to goodwill, which is
amortized using the straight-line method over 25 years. The preliminary
allocation of the purchase price and other purchase accounting adjustments were
recorded as follows:
 
<TABLE>
    <S>                                                                       <C>
    Total Purchase Price....................................................  $12,850,000
    Net Assets Acquired.....................................................     (801,000)
    Adjustments to Conform Accounting Policies..............................      199,000
    Acquisition Costs Related to ADD........................................      120,000
                                                                              -----------
    Excess of Purchase Price over Net Assets Acquired.......................  $12,368,000
                                                                              ===========
</TABLE>
 
     Unaudited pro forma combined results of operations for the years ended July
31, 1996 and 1995 would have been as follows had the acquisition occurred as of
the beginning of the respective periods:
 
<TABLE>
<CAPTION>
                                                                   1996            1995
                                                                -----------     -----------
    <S>                                                         <C>             <C>
    Revenues..................................................  $70,660,000     $59,975,000
    Pro Forma Net Income......................................  $ 3,534,000     $ 2,065,000
    Pro Forma Net Income Per Share............................  $      0.57     $      0.41
    Weighted Average Shares...................................    6,171,000       5,078,000
</TABLE>
 
                                       F-7
<PAGE>   31
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
3.  ACQUISITIONS (CONTINUED)
     Pro forma adjustments have been applied to reflect the purchase which
includes the elimination of expenses that are not expected to have a continuing
impact on the Company, such as certain redundant personnel costs, excess owner's
compensation and cost of line of business not acquired, and the addition of
amortization related to the intangible assets acquired.
 
4.  ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
 
     Accounts payable and accrued liabilities consist of the following:
 
<TABLE>
<CAPTION>
                                                                     1996           1995
                                                                  ----------     ----------
    <S>                                                           <C>            <C>
    Accounts Payable............................................  $  949,000     $  255,000
    Accrued Salaries, Bonuses and Related Benefits..............   2,379,000      1,917,000
    Commissions Payable.........................................     362,000        292,000
                                                                  ----------     ----------
                                                                  $3,690,000     $2,464,000
                                                                  ==========     ==========
</TABLE>
 
5.  DEBT
 
     Effective March 1995, the Company obtained a revolving line of credit and
term loan with a financial institution (the Credit Agreement). The revolving
line of credit, which permitted borrowing up to the lesser of $5,000,000 or 8.5%
of eligible accounts receivable, and term loan, which permitted indebtedness up
to $4,250,000, were collateralized by substantially all of the assets of the
Company. The outstanding principal balances of the revolving line of credit and
term loan bore interest at the prime rate plus 1.0% and 2.5%, respectively, and
was scheduled to expire on March 1, 2000. The Company has obtained a new
revolving line of credit and acquisition facility (the New Credit Agreement)
effective October 25, 1996.  See "Note 12".  All outstanding borrowings under
the Credit Agreement were repaid with the proceeds from the initial public
offering. See "Note 6".
 
     Long-term debt consisted of the following at July 31, 1995:
 
<TABLE>
    <S>                                                                        <C>
    Term loan due to financial institution, bearing interest at bank's prime
      rate plus 2.5%, principal and interest payable in monthly installments
      approximating $101,000, based on a set amortization schedule beginning 
      October 1, 1995 through March 1, 2000. Such loan was paid with proceeds 
      from the initial public offering.......................................  $4,250,000
    
    Equipment term loan with bank, interest payable monthly at bank's prime
      rate plus 2%, principal payable in monthly installments of $1,729 
      through March 15, 1998. Such loan was repaid in December 1995..........      55,000
                                                                               ----------
                                                                                4,305,000
      Less Current Portion...................................................    (652,000)
                                                                               ----------
              Total Long-Term Debt...........................................  $3,653,000
                                                                               ==========
</TABLE>
 
6.  SHAREHOLDERS' EQUITY
 
     Initial Public Offering -- In March 1996, the Company completed an initial
public offering (the "Offering") of 2,726,000 shares of its common stock at an
offering price of $14.00 per share for net proceeds of $34.3 million.
 
     Stock Split -- On January 8, 1996, the Company amended its Articles of
Incorporation to increase the number of authorized shares of common stock from
8,000,000 to 20,000,000, authorize 2,001,480 shares of
 
                                       F-8
<PAGE>   32
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
6.  SHAREHOLDERS' EQUITY (CONTINUED)
preferred stock (of which 1,480 were designated Series A Convertible Preferred
Stock) and effect a 400-for-one stock split of its common stock. All shares and
per share amounts included in the accompanying financial statements and
footnotes have been restated to reflect the stock split.
 
     Preferred Stock -- In March 1995, the Company issued 1,480 shares of Series
A preferred stock for $1,601,000, less costs of $208,000 associated with the
issuance. The Series A preferred stock had a liquidation preference of $1,082
per share, plus 8.0% interest per annum, compounded annually applied to such an
amount from the date of original issuance, less any dividends previously paid.
The stock was redeemable at an amount equal to the sum of $2,850 per share, plus
any declared and unpaid dividends, and was payable in twelve equal quarterly
installments. Holders of Series A Preferred Stock were entitled to receive
noncumulative cash dividends at an annual rate of $87 per share, payable in
preference and priority to any dividend on common stock when and as declared by
the Board of Directors. For the year ended July 31, 1996, no dividends were
declared.
 
     The Company had 2,001,480 authorized shares of Preferred Stock, of which
1,480 shares had been designated Series A Convertible Preferred Stock as of July
31, 1995. Immediately prior to the consummation of the Offering, the outstanding
shares of Series A Convertible Preferred Stock automatically converted into an
aggregate of 592,000 shares of common stock. The shares of Series A Convertible
Preferred Stock were canceled upon said conversion and ceased to be authorized.
 
     Dividends -- The Company's Credit Agreement prohibited the payment of
dividends without the prior written consent of the lender.
 
7.  STOCK OPTIONS AND EMPLOYEE BENEFIT PLANS
 
     Stock Option Plan -- In 1994, the Company adopted the 1994 Stock Plan (the
Stock Plan) under which incentive and non-statutory stock options to acquire
shares of the Company's common stock may be granted to officers, employees and
consultants of the Company. The Stock Plan is administered by the Board of
Directors and permits the issuance of options for up to 700,000 shares of the
Company's common stock. Incentive stock options must be issued at an exercise
price not less than the fair market value of the underlying shares on the date
of grant. Options granted under the Stock Plan are exercisable over a period of
time, not to exceed ten years, and are subject to other terms and conditions
specified in the individual employee option agreement. Of these options 136,000
were exercisable as of July 31, 1996. A summary of employee stock options is as
follows:
 
<TABLE>
<CAPTION>
                                                                               OPTION PRICE
                                                                NUMBER OF           PER
                                                                 SHARES            SHARE
                                                                ---------     ---------------
    <S>                                                         <C>           <C>
    Outstanding at August 1, 1994.............................        --            --
      Granted.................................................   284,400        $1.31 - $2.25
                                                                 -------       --------------
    Outstanding at July 31, 1995..............................   284,400        $1.31 - $2.25
      Granted.................................................   395,220       $2.25 - $27.25
      Exercised...............................................   (22,200)           $1.31
      Canceled................................................   (40,200)      $2.25 - $27.25
                                                                 -------       --------------
    OUTSTANDING AT JULY 31, 1996..............................   617,220       $1.31 - $27.25
                                                                 =======       ==============
</TABLE>
 
     Retirement Savings Plan -- The Company has a retirement savings plan (the
Plan) which qualifies under Section 401(k) of the Internal Revenue Code.
Eligible employees may contribute up to 20% of their annual compensation, as
defined by the Plan. Company contributions are fully discretionary, and no
company contributions have been made to the Plan during any year.
 
                                       F-9
<PAGE>   33
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
8.  INCOME TAXES
 
     The provision for income taxes includes the following:
 
<TABLE>
<CAPTION>
                                                          1996           1995         1994
                                                       ----------     ----------     -------
    <S>                                                <C>            <C>            <C>
    Current:
      Federal........................................  $1,563,000     $1,153,000     $40,000
      State..........................................     475,000        315,000      16,000
                                                       ----------     ----------     -------
                                                        2,038,000      1,468,000      56,000
    Deferred:
      Federal........................................      32,000       (227,000)         --
      State..........................................      26,000        (36,000)         --
                                                       ----------     ----------     -------
                                                           58,000       (263,000)         --
                                                       ----------     ----------     -------
    Provision for Income Taxes.......................  $2,096,000     $1,205,000     $56,000
                                                       ==========     ==========     =======
</TABLE>
 
     A reconciliation of the Company's effective tax rate compared to the
statutory federal tax rate is as follows at July 31:
 
<TABLE>
<CAPTION>
                                                                     1996     1995     1994
                                                                     ----     ----     ----
    <S>                                                              <C>      <C>      <C>
    Income Taxes at Statutory Federal Rate.........................  34.0%    34.0%    34.0%
    State Taxes, Net of Federal Benefit............................   6.2      6.3      7.7
    Meals and Entertainment........................................   0.2      0.7      3.5
    Tax Exempt Interest............................................  (2.3)      --       --
    Other..........................................................   1.1       --      3.0
    Benefit of Graduated Rates.....................................    --       --     (6.9)
                                                                     ----     ----     ----
              Total................................................  39.2%    41.0%    41.3%
                                                                     ====     ====     ====
</TABLE>
 
     The Company provides deferred income taxes for temporary differences
between assets and liabilities recognized for financial reporting and income tax
purposes. The income effects of these temporary differences representing
significant portions of deferred tax assets and deferred tax liabilities are as
follows at July 31:
 
<TABLE>
<CAPTION>
                                                                       1996         1995
                                                                     --------     --------
    <S>                                                              <C>          <C>
    State Income Taxes.............................................  $158,000     $ 95,000
    Bonus Accrual..................................................        --      129,000
    Bad Debt Reserve...............................................    42,000       27,000
    Vacation Accrual...............................................    16,000       12,000
                                                                     --------     --------
    Total Deferred Tax Asset.......................................  $216,000     $263,000
                                                                     ========     ========
</TABLE>
 
     During fiscal 1994, there were no significant temporary differences.
 
     The Company is currently under examination by the Internal Revenue Service
for the year ended July 31, 1991 and 1992. In the opinion of management,
settlements or adjustments that may result from this examination will not have a
material adverse effect on the Company's financial condition or results of
operations.
 
                                      F-10
<PAGE>   34
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
9.  COMMITMENTS AND CONTINGENCIES
 
     The Company leases its office facilities, certain equipment and vehicles
under lease agreements classified as operating leases. Future minimum lease
payments under such noncancelable operating leases are summarized as follows at
July 31, 1996:
 
<TABLE>
                <S>                                                 <C>
                Year ending July 31:
                  1997............................................  $343,000
                  1998............................................   269,000
                  1999............................................   252,000
                  2000............................................   107,000
                  2001............................................    22,000
                  Thereafter......................................        --
                                                                    --------
                Total Future Minimum Lease Payments...............  $993,000
                                                                    ========
</TABLE>
 
     Rent expense amounted to $227,000, $170,000 and $149,000 for the years
ended July 31, 1996, 1995, 1994, respectively, and has been included in selling,
general and administrative expenses in the accompanying statements of income.
 
10.  RELATED PARTY TRANSACTIONS
 
     In fiscal 1994, one of the Company's larger clients desired to outsource
its entire information systems department through an employee leasing
arrangement. Because the Company does not provide such employee leasing services
and was unable to provide a comparable employment benefit package to consultants
working for this company, Information Technology Resources, Inc. (ITR), was
formed by the founder of the Company and certain other persons, including
certain former employees of ITR's client, with the founder owning approximately
75.6% of the outstanding capital stock. As a result of this arrangement, the
Company provides certain management services to ITR to support its operations,
for which the Company receives a management fee pursuant to a management
services agreement. Management fees earned by the Company were $1,084,000 and
$934,000 and $482,000 for the years ended 1996, 1995 and 1994, respectively. ITR
also contracts with the Company for technical consultants to meet its staffing
needs. For the year ended July 31, 1996, 1995 and 1994, the Company recorded
revenues of $4,974,000, $3,678,000 and $1,028,000 from billing of ITR technical
consultants.
 
     Receivables from affiliates includes a receivable from ITR related to these
management services and amounted to $104,000 and $79,000 as of July 31, 1996 and
1995, respectively. The Company has trade accounts receivable for technical
consultants due from ITR of $133,000 and $397,000 as of July 31, 1996 and 1995,
respectively. The Company from time to time has made advances to ITR to assist
it with its working capital needs. These advances are provided on a short-term,
unsecured basis, do not bear interest and have a balance of $0 and $240,000 as
of July 31, 1996 and 1995, respectively.
 
11.  CONCENTRATIONS OF CREDIT RISK
 
     The Company's revenues are generated from credit sales to customers
primarily located in Southern California. The Company performs ongoing credit
evaluations of its customers and maintains reserves for potential credit lines
and generally does not require collateral. The Company maintains reserves for
potential credit losses, and such losses have been within management's
expectations. The Company's ten largest customers represented 60.3% of total
revenues in fiscal 1996, and as a result, the Company has a large proportion of
its receivables outstanding with these customers. Accounts receivable to the
Company's ten largest customers was $3,205,000 as of July 31, 1996.
 
                                      F-11
<PAGE>   35
 
                     DATA PROCESSING RESOURCES CORPORATION
 
                         NOTES TO FINANCIAL STATEMENTS
                FOR THE YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
11.  CONCENTRATIONS OF CREDIT RISK (CONTINUED)
     In each of fiscal 1996, 1995 and 1994, the Company had sales to a major
customer, not necessarily the same customer in each period of approximately
$5,794,000, $6,072,000 and $3,529,000, respectively. Given the significant
amount of revenues derived from these customers, the loss of any such customer
or the uncollectability of related receivables could have a material adverse
effect on the Company's financial condition and results of operations.
 
12.  SUBSEQUENT EVENTS
 
     On October 25, 1996, the Company has obtained a two-year, $20,000,000 New
Credit Agreement with a bank. The credit consists of a revolving line of credit
in the principal amount of $10,000,000, which bears interest at the prime rate
or LIBOR plus 1.0%, and a revolving loan in the principal amount of $10,000,000,
which bears interest at the prime rate or LIBOR plus 1.25%. Both facilities are
secured by accounts receivable and equipment. Additional pricing options and
alternatives are available depending on certain financial conditions. The New
Credit Agreement contains various covenants, including the maintenance of
defined financial ratios such as liquidity and tangible net worth. There are
currently no borrowings outstanding.
 
                                      F-12
<PAGE>   36
 
                                                                     SCHEDULE II
 
                     DATA PROCESSING RESOURCES CORPORATION
                       VALUATION AND QUALIFYING ACCOUNTS
                    YEARS ENDED JULY 31, 1996, 1995 AND 1994
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                              ADDITIONS
                                                       ------------------------
                                     BALANCE AT THE    CHARGES TO                                 BALANCE AT THE
                                      BEGINNING OF     BAD DEBTS                   DEDUCTIONS/      END OF THE
            DESCRIPTION                THE PERIOD       EXPENSE      RECOVERIES    WRITE-OFFS         PERIOD
-----------------------------------  --------------    ----------    ----------    -----------    --------------
<S>                                  <C>               <C>           <C>           <C>            <C>
1996
  Allowance For Doubtful
     Accounts......................       $ 63            $105          $ --          $ (39)           $129
1995
  Allowance For Doubtful
     Accounts......................       $ --            $ 97          $ --          $ (34)           $ 63
1994(1)
  Allowance For Doubtful
     Accounts......................       $ --            $ --          $ --          $  --            $ --
</TABLE>
 
---------------
(1) No allowance for the period indicated
 
                                       S-1