##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007.
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number 000-27792
 COMSYS IT PARTNERS, INC.
 (Exact name of Registrant as specified in its charter)
 
 Delaware
(State or other jurisdiction 
of incorporation or organization)
    
    56-1930691
(I.R.S. Employer
Identification Number)
 4400 Post Oak Parkway, Suite 1800
Houston, TX 77027
(Address, including zip code, of principal executive offices)
 (713) 386-1400
(Registrants telephone number, including area code)
 þ o
  o þ o
 o þ




---



##### 



TABLE OF CONTENTS
  
 PagePART IItem 1.
    
    Financial Statements
    
    
    2Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4.
    
    Controls and Procedures
    
    
    26PART IIItem 1.
    
    Legal Proceedings
    
    
    27Item 1A.
    
    Risk Factors
    
    
    27Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3.
    
    Defaults upon Senior Securities
    
    
    27Item 4.
    
    Submission of Matters to a Vote of Securities Holders
    
    
    27Item 5.
    
    Other Information
    
    
    27Item 6.
    
    Exhibits
    
    
    27Signatures
    
    
    29EX-31.1EX-31.2EX-32




---



##### Table of Contents



PART I
 
 ITEM 1. FINANCIAL STATEMENTS
 COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    October 1,
    
    September 30,
    
    October 1,(In thousands, except per share amounts)
    
    2007
    
    2006
    
    2007
    
    2006Revenues from services
    
    $
    187,195
    
    
    $
    185,734
    
    
    $
    560,005
    
    
    $
    551,935Cost of services
    
    
    139,945
    
    
    
    139,991
    
    
    
    420,920
    
    
    
    418,247Gross profit
    
    
    47,250
    
    
    
    45,743
    
    
    
    139,085
    
    
    
    133,688Operating costs and expenses:Selling, general and administrative
    
    
    33,064
    
    
    
    33,074
    
    
    
    101,625
    
    
    
    101,595Depreciation and amortization
    
    
    1,653
    
    
    
    2,198
    
    
    
    4,700
    
    
    
    6,53734,717
    
    
    
    35,272
    
    
    
    106,325
    
    
    
    108,132Operating income
    
    
    12,533
    
    
    
    10,471
    
    
    
    32,760
    
    
    
    25,556Interest expense, net
    
    
    1,993
    
    
    
    4,851
    
    
    
    6,709
    
    
    
    12,381Loss on early extinguishment of debt
    
    
    
    
    
    
    2,468
    
    
    
    
    
    
    
    2,468Other expense (income), net
    
    
    (18
    )
    
    
    22
    
    
    
    (469
    )
    
    
    (272
    )Income before income taxes
    
    
    10,558
    
    
    
    3,130
    
    
    
    26,520
    
    
    
    10,979Income tax expense (benefit)
    
    
    941
    
    
    
    274
    
    
    
    1,849
    
    
    
    (4,918
    )Net income
    
    $
    9,617
    
    
    $
    2,856
    
    
    $
    24,671
    
    
    $
    15,897Basic earnings per common share
    
    $
    0.48
    
    
    $
    0.15
    
    
    $
    1.24
    
    
    $
    0.84Diluted earnings per common share
    
    $
    0.48
    
    
    $
    0.15
    
    
    $
    1.23
    
    
    $
    0.84Weighted average basic and diluted
shares outstanding:Basic
    
    
    19,459
    
    
    
    18,698
    
    
    
    19,182
    
    
    
    18,604Diluted
    
    
    20,118
    
    
    
    19,299
    
    
    
    20,101
    
    
    
    19,026
 See notes to consolidated financial statements
 2




---



##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    October 1,
    
    September 30,
    
    October 1,(In thousands)
    
    2007
    
    2006
    
    2007
    
    2006Net income
    
    $
    9,617
    
    
    $
    2,856
    
    
    $
    24,671
    
    
    $
    15,897Foreign currency
translation adjustments
    
    
    (6
    )
    
    
    12
    
    
    
    97
    
    
    
    70Total comprehensive income
    
    $
    9,611
    
    
    $
    2,868
    
    
    $
    24,768
    
    
    $
    15,967
 See notes to consolidated financial statements
 3




---



##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Balance Sheets
 September 30,
    
    December 31,2007
    
    2006(In thousands, except share and par value amounts)
    
    (Unaudited)AssetsCurrent assets:Cash
    
    $
    1,533
    
    
    $
    1,605Accounts receivable, net of allowance of $2,338 and $3,474, respectively
    
    
    196,981
    
    
    
    189,610Prepaid expenses and other
    
    
    2,934
    
    
    
    3,741Total current assets
    
    
    201,448
    
    
    
    194,956Fixed assets, net
    
    
    11,962
    
    
    
    9,214Goodwill
    
    
    152,800
    
    
    
    154,984Other intangible assets, net
    
    
    10,618
    
    
    
    9,142Deferred financing costs, net
    
    
    2,361
    
    
    
    2,926Restricted cash
    
    
    2,821
    
    
    
    2,794Other assets
    
    
    1,571
    
    
    
    1,018Total assets
    
    $
    383,581
    
    
    $
    375,034Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    134,379
    
    
    $
    131,535Payroll and related taxes
    
    
    28,446
    
    
    
    32,204Current maturities of long-term debt
    
    
    5,000
    
    
    
    5,000Interest payable
    
    
    382
    
    
    
    654Other current liabilities
    
    
    9,549
    
    
    
    13,506Total current liabilities
    
    
    177,756
    
    
    
    182,899Long-term debt
    
    
    67,734
    
    
    
    93,542Other noncurrent liabilities
    
    
    3,027
    
    
    
    3,823Total liabilities
    
    
    248,517
    
    
    
    280,264Commitments and contingenciesStockholders equity:Common stock, par value $.01; 95,000,000 shares authorized and 20,167,260
shares outstanding;
95,000,000 shares authorized and 19,278,607 shares outstanding, respectively
    
    
    201
    
    
    
    191Common stock warrants
    
    
    1,734
    
    
    
    1,734Accumulated other comprehensive income (loss)
    
    
    85
    
    
    
    (12
    )Additional paid-in capital
    
    
    222,256
    
    
    
    206,740Accumulated deficit
    
    
    (89,212
    )
    
    
    (113,883
    )Total stockholders equity
    
    
    135,064
    
    
    
    94,770Total liabilities and stockholders equity
    
    $
    383,581
    
    
    $
    375,034
 See notes to consolidated financial statements
 4




---



##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 Nine Months EndedSeptember 30,
    
    October 1,(In thousands)
    
    2007
    
    2006Cash flows from operating activitiesNet income
    
    $
    24,671
    
    
    $
    15,897Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    4,700
    
    
    
    6,537Provision for doubtful accounts
    
    
    
    
    
    
    1,597Stock-based compensation
    
    
    3,791
    
    
    
    2,579Write-off of deferred financing costs
    
    
    
    
    
    
    1,083Amortization of deferred financing costs
    
    
    654
    
    
    
    821Decrease in fair value of derivative instruments
    
    
    
    
    
    
    (105
    )Other noncash loss (gain), net
    
    
    1,849
    
    
    
    (78
    )Changes in operating assets and liabilities, net of effects of acquisitions:Accounts receivable
    
    
    (6,288
    )
    
    
    (42,479
    )Prepaid expenses and other
    
    
    508
    
    
    
    1,370Accounts payable
    
    
    2,674
    
    
    
    27,694Payroll and related taxes
    
    
    (4,378
    )
    
    
    4,874Other
    
    
    (617
    )
    
    
    112Net cash provided by operating activities
    
    
    27,564
    
    
    
    19,902Cash flows from investing activitiesCapital expenditures
    
    
    (1,032
    )
    
    
    (2,479
    )Acquisitions, net of cash acquired
    
    
    (2,428
    )
    
    
    (1,250
    )Net cash used in investing activities
    
    
    (3,460
    )
    
    
    (3,729
    )Cash flows from financing activitiesPayments under revolving credit facility, net
    
    
    (25,808
    )
    
    
    (25,113
    )Proceeds from issuance of long-term debt
    
    
    
    
    
    
    7,944Exercise of stock options and warrants
    
    
    1,615
    
    
    
    1,341Stock issuance costs
    
    
    (113
    )
    
    
    (73
    )Cash paid for financing costs
    
    
    
    
    
    
    (476
    )Net cash used in financing activities
    
    
    (24,306
    )
    
    
    (16,377
    )Effect of exchange rates on cash
    
    
    130
    
    
    
    103Net decrease in cash
    
    
    (72
    )
    
    
    (101
    )Cash, beginning of period
    
    
    1,605
    
    
    
    3,099Cash, end of period
    
    $
    1,533
    
    
    $
    2,998
 See notes to consolidated financial statements
 5




---



##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
 Notes to Consolidated Financial Statements
 1. General
     Disclosures
About Segments of an Enterprise and Related Information
 2. Mergers and Acquisitions
    6




---



##### Table of Contents



3. Stock Compensation Plans
   7




---



##### Table of Contents



Weighted-AverageNumber of Shares
    
    Exercise PriceOutstanding at January 1, 2006
    
    
    643,400
    
    
    $
    8.96Granted
    
    
    Exercised
    
    
    (100,202
    )
    
    
    8.11Forfeited
    
    
    (3,000
    )
    
    
    8.88Outstanding at December 31, 2006
    
    
    540,198
    
    
    
    9.10Granted
    
    
    Exercised
    
    
    (95,198
    )
    
    
    9.51Forfeited
    
    
    Outstanding at September 30, 2007
    
    
    445,000
    
    
    $
    9.01Exercisable at September 30, 2007
    
    
    378,340
    
    
    $
    9.09Available for issuance at September 30, 2007
    
    
    53,035
  Number of
    
    Weighted-AverageShares
    
    Exercise PriceOutstanding at January 1, 2006
    
    
    334,507
    
    
    $
    8.54Granted
    
    
    256,000
    
    
    
    11.07Exercised
    
    
    (107,416
    )
    
    
    8.53Forfeited
    
    
    (47,507
    )
    
    
    9.29Outstanding at December 31, 2006
    
    
    435,584
    
    
    
    9.95Granted
    
    
    Exercised
    
    
    (70,817
    )
    
    
    9.56Forfeited
    
    
    (14,833
    )
    
    
    9.56Outstanding at September 30, 2007
    
    
    349,934
    
    
    $
    10.04Exercisable at September 30, 2007
    
    
    109,446
    
    
    $
    9.75Available for issuance as stock options or restricted stock at September 30, 2007
    
    
    780,647
  8




---



##### Table of Contents



2006
    
    2007Expected life (in years)
    
    
    6.0
    
    
    
    6.0Risk-free interest rate
    
    
    4.375
    %
    
    
    4.750
    %Expected volatility
    
    
    45.0
    %
    
    
    46.8
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %Weighted average fair value of options granted
    
    $
    5.47
    
    
    $
    17.29
     WeightedAverageGrant DateShares
    
    Fair ValueNonvested balance at January 1, 2006
    
    
    312,410
    
    
    $
    11.20Granted
    
    
    578,659
    
    
    
    10.44Vested
    
    
    (279,468
    )
    
    
    4.13Forfeited
    
    
    (258,051
    )
    
    
    4.64Nonvested balance at December 31, 2006
    
    
    353,550
    
    
    
    15.56Granted
    
    
    244,000
    
    
    
    21.70Vested
    
    
    (87,748
    )
    
    
    16.63Forfeited
    
    
    (17,167
    )
    
    
    12.26Nonvested balance at September 30, 2007
    
    
    492,635
    
    
    $
    18.35
  9




---



##### Table of Contents



Share-Based Payment
    10




---



##### Table of Contents



4. Income Taxes
     Accounting for Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 Accounting for
Income Taxes,
  5. Earnings Per Share
  11




---



##### Table of Contents



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    October 1,
    
    September 30,
    
    October 1,2007
    
    2006
    
    2007
    
    2006Net income attributable to common stockholders  basic
    
    $
    9,271
    
    
    $
    2,819
    
    
    $
    23,795
    
    
    $
    15,693Net income attributable to unvested restricted stockholders
    
    
    231
    
    
    
    
    
    
    
    574
    
    
    
    Net income attributable to warrant holders
    
    
    115
    
    
    
    37
    
    
    
    302
    
    
    
    204Total net income
    
    $
    9,617
    
    
    $
    2,856
    
    
    $
    24,671
    
    
    $
    15,897Weighted average common shares outstanding  basic
    
    
    19,459
    
    
    
    18,698
    
    
    
    19,182
    
    
    
    18,604Add: dilutive restricted stock, stock options and warrants
    
    
    659
    
    
    
    601
    
    
    
    919
    
    
    
    422Diluted weighted average common shares outstanding
    
    
    20,118
    
    
    
    19,299
    
    
    
    20,101
    
    
    
    19,026Basic earnings per common share
    
    $
    0.48
    
    
    $
    0.15
    
    
    $
    1.24
    
    
    $
    0.84Diluted earnings per common share
    
    $
    0.48
    
    
    $
    0.15
    
    
    $
    1.23
    
    
    $
    0.84
  6. Long-Term Debt
  September 30,
    
    December 31,2007
    
    2006Debt outstanding under credit facilities:Senior credit facilityrevolver
    
    $
    66,484
    
    
    $
    88,542Senior credit facilitysenior term loan
    
    
    6,250
    
    
    
    10,00072,734
    
    
    
    98,542Less current maturities
    
    
    5,000
    
    
    
    5,000Long-term obligations, excluding current maturities
    
    $
    67,734
    
    
    $
    93,542
  12




---



##### Table of Contents



13




---



##### Table of Contents



7. Commitments and Contingencies
      8. Executive Officer Resignations
  14




---



##### Table of Contents



9. Related Party Transactions
 Related Party Accounts Receivable
  Secondary Offering on Behalf of Selling Stockholders
  10. Recent Accounting Pronouncements
 Fair Value Measurements
 The Fair Value Option for Financial Assets and
Financial Liabilities
 15




---



##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 The following discussion and analysis should be read in conjunction with the unaudited
consolidated financial statements and related notes appearing elsewhere in this report, as well as
other reports we file with the Securities and Exchange Commission. This discussion contains
forward-looking statements reflecting our current expectations and estimates and assumptions
concerning events and financial trends that may affect our future operating results or financial
position. Actual results and the timing of events may differ materially from those contained in
these forward-looking statements due to a number of factors, including those discussed in the
section entitled Cautionary Note Regarding Forward-Looking Statements included elsewhere in this
report and in the section entitled Risk Factors included in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2006.
 Our Business
   
    
    rate of technological change;
    
    rate of growth in corporate IT budgets;
    
    penetration of IT staffing in the general workforce;
    
    outsourcing of the IT workforce; and
    
    consolidation of supplier bases.
     16




---



##### Table of Contents



Overview of Third Quarter 2007 Results
   2007 Outlook
    17




---



##### Table of Contents



Results of Operations
 Quarter Ended September 30, 2007, Versus Quarter Ended October 1, 2006
  Three Months Ended
    
    Percent of Revenues
    
    Percent ChangeSeptember 30,
    
    October 1,
    
    September 30,
    
    October 1,
    
    2007 vs.2007
    
    2006
    
    2007
    
    2006
    
    2006Revenues from services
    
    $
    187,195
    
    
    $
    185,734
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    0.8
    %Cost of services
    
    
    139,945
    
    
    
    139,991
    
    
    
    74.8
    %
    
    
    75.4
    %
    
    
    0.0
    %Gross profit
    
    
    47,250
    
    
    
    45,743
    
    
    
    25.2
    %
    
    
    24.6
    %
    
    
    3.3
    %Operating costs and expenses:Selling, general and administrative
    
    
    33,064
    
    
    
    33,074
    
    
    
    17.6
    %
    
    
    17.8
    %
    
    
    0.0
    %Depreciation and amortization
    
    
    1,653
    
    
    
    2,198
    
    
    
    0.9
    %
    
    
    1.2
    %
    
    
    (24.8
    %)34,717
    
    
    
    35,272
    
    
    
    18.5
    %
    
    
    19.0
    %
    
    
    (1.6
    %)Operating income
    
    
    12,533
    
    
    
    10,471
    
    
    
    6.7
    %
    
    
    5.6
    %
    
    
    19.7
    %Interest expense, net
    
    
    1,993
    
    
    
    4,851
    
    
    
    1.1
    %
    
    
    2.6
    %
    
    
    (58.9
    %)Loss on early extinguishment of debt
    
    
    
    
    
    
    2,468
    
    
    
    0.0
    %
    
    
    1.3
    %
    
    
    (100.0
    %)Other expense (income), net
    
    
    (18
    )
    
    
    22
    
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    (181.8
    %)Income before income taxes
    
    
    10,558
    
    
    
    3,130
    
    
    
    5.6
    %
    
    
    1.7
    %
    
    
    237.3
    %Income tax expense
    
    
    941
    
    
    
    274
    
    
    
    0.5
    %
    
    
    0.2
    %
    
    
    243.4
    %Net income
    
    $
    9,617
    
    
    $
    2,856
    
    
    
    5.1
    %
    
    
    1.5
    %
    
    
    236.7
    %Billable headcount at end of period
    
    
    4,982
    
    
    
    5,181
  Revenues.
 Cost of Services .
 Selling, General and Administrative Expenses .
 18




---



##### Table of Contents



Depreciation and Amortization .
 Interest Expense, Net.
 Provision for Income Taxes.
  Nine Months Ended September 30, 2007, Versus Nine Months Ended October 1, 2006
  Nine Months Ended
    
    Percent of Revenues
    
    Percent ChangeSeptember 30,
    
    October 1,
    
    September 30,
    
    October 1,
    
    2007 vs.2007
    
    2006
    
    2007
    
    2006
    
    2006Revenues from services
    
    $
    560,005
    
    
    $
    551,935
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    1.5
    %Cost of services
    
    
    420,920
    
    
    
    418,247
    
    
    
    75.2
    %
    
    
    75.8
    %
    
    
    0.6
    %Gross profit
    
    
    139,085
    
    
    
    133,688
    
    
    
    24.8
    %
    
    
    24.2
    %
    
    
    4.0
    %Operating costs and expenses:Selling, general and administrative
    
    
    101,625
    
    
    
    101,595
    
    
    
    18.1
    %
    
    
    18.4
    %
    
    
    0.0
    %Depreciation and amortization
    
    
    4,700
    
    
    
    6,537
    
    
    
    0.9
    %
    
    
    1.2
    %
    
    
    (28.1
    %)106,325
    
    
    
    108,132
    
    
    
    19.0
    %
    
    
    19.6
    %
    
    
    (1.7
    %)Operating income
    
    
    32,760
    
    
    
    25,556
    
    
    
    5.8
    %
    
    
    4.6
    %
    
    
    28.2
    %Interest expense, net
    
    
    6,709
    
    
    
    12,381
    
    
    
    1.2
    %
    
    
    2.2
    %
    
    
    (45.8
    %)Loss on early extinguishment of debt
    
    
    
    
    
    
    2,468
    
    
    
    0.0
    %
    
    
    0.4
    %
    
    
    (100.0
    %)Other income, net
    
    
    (469
    )
    
    
    (272
    )
    
    
    (0.1
    %)
    
    
    0.0
    %
    
    
    72.4
    %Income before income taxes
    
    
    26,520
    
    
    
    10,979
    
    
    
    4.7
    %
    
    
    2.0
    %
    
    
    141.6
    %Income tax expense (benefit)
    
    
    1,849
    
    
    
    (4,918
    )
    
    
    0.3
    %
    
    
    (0.9
    %)
    
    
    (137.6
    %)Net income
    
    $
    24,671
    
    
    $
    15,897
    
    
    
    4.4
    %
    
    
    2.9
    %
    
    
    55.2
    %
  Revenues.
 19




---



##### Table of Contents



Cost of Services .
 Selling, General and Administrative Expenses .
 Depreciation and Amortization .
 Interest Expense, Net.
 Provision for Income Taxes.
  20




---



##### Table of Contents



Liquidity and Capital Resources
 Overview
   Credit Agreements and Related Covenants
     21




---



##### Table of Contents



Debt Compliance
   22




---



##### Table of Contents



Interest Rate Swap and Cap
   Cash Flows
  Nine Months EndedSeptember 30,
    
    October 1,2007
    
    2006Net cash provided by operating activities
    
    $
    27,564
    
    
    $
    19,902Net cash used in investing activities
    
    
    (3,460
    )
    
    
    (3,729
    )Net cash used in financing activities
    
    
    (24,306
    )
    
    
    (16,377
    )Effect of exchange rates on cash
    
    
    130
    
    
    
    103Net decrease in cash
    
    
    ($72
    )
    
    
    ($101
    )
     23




---



##### Table of Contents



Off-Balance Sheet Arrangements
  Related Party Transactions
 Related Party Accounts Receivable
  Secondary Offering on Behalf of Selling Stockholders
  Contingencies and Indemnifications
  Critical Accounting Policies and Estimates
  24




---



##### Table of Contents



CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
   
    
    our success in attracting, training, retaining and motivating billable consultants
and key officers and employees;
    
    our ability to shift a larger percentage of our business mix into IT solutions and
project management and, if successful, our ability to manage those types of business
profitably;
    
    changes in levels of unemployment and other economic conditions in the United
States, or in particular regions or industries;
    
    weakness or reductions in corporate information technology spending levels;
    
    our ability to maintain existing client relationships and attract new clients in the
context of changing economic or competitive conditions;
    
    the impact of competitive pressures on our ability to maintain or improve our
operating margins, including any change in the demand for our services;
    
    the entry of new competitors into the U.S. staffing services market due to the
limited barriers to entry or the expansion of existing competitors in that market;
    
    increases in employment-related costs such as healthcare and unemployment taxes;
    
    the possibility of our incurring liability for the activities of our billable
consultants or for events impacting our billable consultants on clients premises;
    
    the risk that we may be subject to claims for indemnification under our customer
contracts;
    
    the risk in an uncertain economic environment of increased incidences of employment
disputes, employment litigation and workers compensation claims;
    
    the risk that further cost cutting or restructuring activities could cause an
adverse impact on certain of our operations;
    
    economic declines that affect our business, including our profitability, liquidity
or the ability to comply with our loan covenants;
    
    adverse changes in credit and capital markets conditions that may affect our ability
to obtain financing or refinancing on favorable terms;
    
    adverse changes to managements periodic estimates of future cash flows that may
affect our assessment of our ability to fully recover our goodwill; and
    
    whether governments will amend existing regulations or impose additional regulations
or licensing requirements in such a manner as to increase our costs of doing business.
  25




---



##### Table of Contents



ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risks
  Foreign Currency Risks
  Equity Market Risks
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Controls over Financial Reporting
  26




---



##### Table of Contents



PART II
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
  27




---



##### Table of Contents



ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation of COMSYS IT
Partners, Inc. (incorporated by reference to Exhibit 3.1 to the
Form 8-K filed with the SEC on October 4, 2004).3.2
    
    Amended and Restated Bylaws of COMSYS IT Partners, Inc.
(incorporated by reference to Exhibit 3.2 to the Form 8-K filed
with the SEC on October 4, 2004).3.3
    
    First Amendment to the Amended and Restated Bylaws of COMSYS IT
Partners, Inc. (incorporated by reference to Exhibit 3.1 to the
Form 8-K filed with the SEC on May 4, 2005).4.1
    
    Registration Rights Agreement, dated as of September 30, 2004,
between COMSYS IT Partners, Inc. and certain of the old COMSYS
Holdings stockholders party thereto (incorporated by reference to
Exhibit 4.2 to the Form 8-A/A filed with the SEC on November 2,
2004).4.2
    
    Amendment No. 1 to Registration Rights Agreement dated April 1,
2005 between COMSYS IT Partners, Inc., and certain of the old
COMSYS Holdings stockholders party thereto (incorporated by
reference to Exhibit 4.2 to the Form 10-Q filed with the SEC on
May 6, 2005).4.3
    
    Amended and Restated Registration Rights Agreement, dated as of
September 30, 2004, between COMSYS IT Partners, Inc. and certain
of the old Venturi stockholders party thereto (incorporated by
reference to Exhibit 4.3 to the Form 8-A/A filed with the SEC on
November 2, 2004).4.4
    
    Amendment No. 1 to Amended and Restated Registration Rights
Agreement dated April 1, 2005 between COMSYS IT Partners, Inc.,
and certain of the old Venturi stockholders party thereto
(incorporated by reference to Exhibit 4.4 to the Form 10-Q filed
with the SEC on May 6, 2005).4.5
    
    Voting Agreement, dated as of September 30, 2004, by and among the
Registrant and the stockholders party thereto (incorporated by
reference to Exhibit 2.4 to the Form 8-K filed with the SEC on
October 4, 2004).4.6
    
    Voting Agreement, dated as of September 30, 2004, between the
Registrant and MatlinPatterson Global Opportunities Partners, L.P.
(incorporated by reference to Exhibit 2.5 to the Form 8-K filed
with the SEC on October 4, 2004).4.7#
    
    Common Stock Purchase Warrant dated as of April 14, 2003, issued
by the Company in favor of BNP Paribas (incorporated by reference
to Exhibit 99.16 to the Form 8-K filed with the SEC on April 25,
2003).4.8
    
    Specimen Certificate for Shares of Common Stock (incorporated by
reference to Exhibit 4.6 to the Form 10-K filed with the SEC on
April 1, 2005).31.1*
    
    Certification of Chief Executive Officer of the Company pursuant
to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended.31.2*
    
    Certification of Chief Financial Officer of the Company pursuant
to Rule 13a-14(a) promulgated under the Securities Exchange Act of
1934, as amended.32*
    
    Certification of Chief Executive Officer and Chief Financial
Officer of the Company pursuant to Rule 13a-14(b) promulgated
under the Securities Exchange Act of 1934, as amended, and Section
1350 of Chapter 63 of Title 18 of the United States Code.
 28




---



##### Table of Contents



SIGNATURES
  COMSYS IT PARTNERS, INC.Date: November 9, 2007
    
    By:
    
    /s/ Larry L. EnterlineName:
    
    Larry L. EnterlineTitle:
    
    Chief Executive OfficerDate: November 9, 2007
    
    By:
    
    /s/ Joseph C. Tusa, Jr.Name:
    
    Joseph C. Tusa, Jr.Title:
    
    Senior Vice President and Chief Financial Officer
 29




---



##### Table of Contents



EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Amended and Restated Certificate of Incorporation of COMSYS IT Partners, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed
with the SEC on October 4, 2004).3.2
    
    Amended and Restated Bylaws of COMSYS IT Partners, Inc. (incorporated by reference to Exhibit 3.2 to the Form 8-K filed with the SEC on October
4, 2004).3.3
    
    First Amendment to the Amended and Restated Bylaws of COMSYS IT Partners, Inc. (incorporated by reference to Exhibit 3.1 to the Form 8-K filed
with the SEC on May 4, 2005).4.1
    
    Registration Rights Agreement, dated as of September 30, 2004, between COMSYS IT Partners, Inc. and certain of the old COMSYS Holdings
stockholders party thereto (incorporated by reference to Exhibit 4.2 to the Form 8-A/A filed with the SEC on November 2, 2004).4.2
    
    Amendment No. 1 to Registration Rights Agreement dated April 1, 2005 between COMSYS IT Partners, Inc., and certain of the old COMSYS Holdings
stockholders party thereto (incorporated by reference to Exhibit 4.2 to the Form 10-Q filed with the SEC on May 6, 2005).4.3
    
    Amended and Restated Registration Rights Agreement, dated as of September 30, 2004, between COMSYS IT Partners, Inc. and certain of the old
Venturi stockholders party thereto (incorporated by reference to Exhibit 4.3 to the Form 8-A/A filed with the SEC on November 2, 2004).4.4
    
    Amendment No. 1 to Amended and Restated Registration Rights Agreement dated April 1, 2005 between COMSYS IT Partners, Inc., and certain of the
old Venturi stockholders party thereto (incorporated by reference to Exhibit 4.4 to the Form 10-Q filed with the SEC on May 6, 2005).4.5
    
    Voting Agreement, dated as of September 30, 2004, by and among the Registrant and the stockholders party thereto (incorporated by reference to
Exhibit 2.4 to the Form 8-K filed with the SEC on October 4, 2004).4.6
    
    Voting Agreement, dated as of September 30, 2004, between the Registrant and MatlinPatterson Global Opportunities Partners, L.P. (incorporated
by reference to Exhibit 2.5 to the Form 8-K filed with the SEC on October 4, 2004).4.7#
    
    Common Stock Purchase Warrant dated as of April 14, 2003, issued by the Company in favor of BNP Paribas (incorporated by reference to Exhibit
99.16 to the Form 8-K filed with the SEC on April 25, 2003).4.8
    
    Specimen Certificate for Shares of Common Stock (incorporated by reference to Exhibit 4.6 to the Form 10-K filed with the SEC on April 1, 2005).31.1*
    
    Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
amended.31.2*
    
    Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as
amended.32*
    
    Certification of Chief Executive Officer and Chief Financial Officer of the Company pursuant to Rule 13a-14(b) promulgated under the Securities
Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
 30