##### 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 July 1, 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
    
    56-1930691(State or other jurisdiction 
of incorporation or organization)
    
    (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




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##### 



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
    
    
    28Item 4.
    
    Controls and Procedures
    
    
    29PART IIItem 1.
    
    Legal Proceedings
    
    
    30Item 1A.
    
    Risk Factors
    
    
    30Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3.
    
    Defaults upon Senior Securities
    
    
    30Item 4.
    
    Submission of Matters to a Vote of Securities Holders
    
    
    30Item 5.
    
    Other Information
    
    
    30Item 6.
    
    Exhibits
    
    
    31Signatures
    
    
    32EX-10.1EX-10.2EX-10.3EX-31.1EX-31.2EX-32




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##### Table of Contents



PART I
 
 ITEM 1. FINANCIAL STATEMENTS
 COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
 Three Months Ended
    
    Six Months EndedJuly 1,
    
    July 2,
    
    July 1,
    
    July 2,(In thousands, except per share amounts)
    
    2007
    
    2006
    
    2007
    
    2006Revenues from services
    
    $
    186,602
    
    
    $
    187,609
    
    
    $
    372,810
    
    
    $
    366,201Cost of services
    
    
    139,768
    
    
    
    141,736
    
    
    
    280,975
    
    
    
    278,256Gross profit
    
    
    46,834
    
    
    
    45,873
    
    
    
    91,835
    
    
    
    87,945Operating costs and expenses:Selling, general and administrative
    
    
    33,140
    
    
    
    34,283
    
    
    
    68,561
    
    
    
    68,521Depreciation and amortization
    
    
    1,589
    
    
    
    2,167
    
    
    
    3,047
    
    
    
    4,33934,729
    
    
    
    36,450
    
    
    
    71,608
    
    
    
    72,860Operating income
    
    
    12,105
    
    
    
    9,423
    
    
    
    20,227
    
    
    
    15,085Interest expense, net
    
    
    2,296
    
    
    
    3,573
    
    
    
    4,716
    
    
    
    7,530Other income, net
    
    
    (223
    )
    
    
    (170
    )
    
    
    (451
    )
    
    
    (294
    )Income before income taxes
    
    
    10,032
    
    
    
    6,020
    
    
    
    15,962
    
    
    
    7,849Income tax expense (benefit)
    
    
    460
    
    
    
    (5,342
    )
    
    
    908
    
    
    
    (5,192
    )Net income
    
    $
    9,572
    
    
    $
    11,362
    
    
    $
    15,054
    
    
    $
    13,041Basic earnings per common share
    
    $
    0.48
    
    
    $
    0.60
    
    
    $
    0.76
    
    
    $
    0.69Diluted earnings per common share
    
    $
    0.47
    
    
    $
    0.60
    
    
    $
    0.75
    
    
    $
    0.69Weighted average basic and diluted shares outstanding:Basic
    
    
    19,243
    
    
    
    18,562
    
    
    
    19,044
    
    
    
    18,556Diluted
    
    
    20,195
    
    
    
    18,920
    
    
    
    20,087
    
    
    
    18,862
 See notes to consolidated financial statements
 2




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##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
 Three Months Ended
    
    Six Months EndedJuly 1,
    
    July 2,
    
    July 1,
    
    July 2,(In thousands)
    
    2007
    
    2006
    
    2007
    
    2006Net income
    
    $
    9,572
    
    
    $
    11,362
    
    
    $
    15,054
    
    
    $
    13,041Foreign currency translation adjustments
    
    
    77
    
    
    
    52
    
    
    
    103
    
    
    
    58Total comprehensive income
    
    $
    9,649
    
    
    $
    11,414
    
    
    $
    15,157
    
    
    $
    13,099
 See notes to consolidated financial statements
 3




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##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Balance Sheets
 July 1,
    
    December 31,2007
    
    2006(In thousands, except share and par value amounts)
    
    (Unaudited)AssetsCurrent assets:Cash
    
    $
    1,773
    
    
    $
    1,605Accounts receivable, net of allowance of $2,497 and $3,474, respectively
    
    
    213,190
    
    
    
    189,610Prepaid expenses and other
    
    
    4,046
    
    
    
    3,741Total current assets
    
    
    219,009
    
    
    
    194,956Fixed assets, net
    
    
    12,567
    
    
    
    9,214Goodwill
    
    
    157,139
    
    
    
    154,984Other intangible assets, net
    
    
    11,251
    
    
    
    9,142Deferred financing costs, net
    
    
    2,584
    
    
    
    2,926Restricted cash
    
    
    2,799
    
    
    
    2,794Other assets
    
    
    1,597
    
    
    
    1,018Total assets
    
    $
    406,946
    
    
    $
    375,034Liabilities and stockholders equityCurrent liabilities:Accounts payable
    
    $
    138,354
    
    
    $
    131,535Payroll and related taxes
    
    
    29,015
    
    
    
    32,204Current maturities of long-term debt
    
    
    5,000
    
    
    
    5,000Interest payable
    
    
    439
    
    
    
    654Other current liabilities
    
    
    12,884
    
    
    
    13,506Total current liabilities
    
    
    185,692
    
    
    
    182,899Long-term debt
    
    
    93,401
    
    
    
    93,542Other noncurrent liabilities
    
    
    3,595
    
    
    
    3,823Total liabilities
    
    
    282,688
    
    
    
    280,264Commitments and contingenciesStockholders equity:Common stock, par value $.01; 95,000,000
shares authorized and 20,164,588 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)
    
    
    91
    
    
    
    (12
    )Additional paid-in capital
    
    
    221,061
    
    
    
    206,740Accumulated deficit
    
    
    (98,829
    )
    
    
    (113,883
    )Total stockholders equity
    
    
    124,258
    
    
    
    94,770Total liabilities and stockholders equity
    
    $
    406,946
    
    
    $
    375,034
 See notes to consolidated financial statements
 4




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##### Table of Contents



COMSYS IT Partners, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 Six Months EndedJuly 1,
    
    July 2,(In thousands)
    
    2007
    
    2006Cash flows from operating activitiesNet income
    
    $
    15,054
    
    
    $
    13,041Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    3,047
    
    
    
    4,339Provision for doubtful accounts
    
    
    (48
    )
    
    
    1,408Stock-based compensation
    
    
    2,749
    
    
    
    1,679Amortization of deferred financing costs
    
    
    437
    
    
    
    550Increase in fair value of derivative instruments
    
    
    
    
    
    
    (699
    )Other noncash loss (gain), net
    
    
    908
    
    
    
    (101
    )Changes in operating assets and liabilities, net of effects of acquisitions:Accounts receivable
    
    
    (22,668
    )
    
    
    (25,003
    )Prepaid expenses and other
    
    
    (299
    )
    
    
    863Accounts payable
    
    
    6,685
    
    
    
    6,461Payroll and related taxes
    
    
    (3,798
    )
    
    
    5,136Other
    
    
    (1,454
    )
    
    
    (335
    )Net cash provided by operating activities
    
    
    613
    
    
    
    7,339Cash flows from investing activitiesCapital expenditures
    
    
    (618
    )
    
    
    (2,057
    )Acquisitions, net of cash acquired
    
    
    (1,186
    )
    
    
    (1,250
    )Other noncurrent assets
    
    
    
    
    
    
    8Net cash used in investing activities
    
    
    (1,804
    )
    
    
    (3,299
    )Cash flows from financing activitiesPayments under revolving credit facility, net
    
    
    (141
    )
    
    
    (6,304
    )Exercise of stock options
    
    
    1,576
    
    
    
    624Stock issuance costs
    
    
    (19
    )
    
    
    (35
    )Cash paid for financing costs
    
    
    (100
    )
    
    
    Net cash provided by (used for) financing activities
    
    
    1,316
    
    
    
    (5,715
    )Effect of exchange rates on cash
    
    
    43
    
    
    
    87Net increase (decrease) in cash
    
    
    168
    
    
    
    (1,588
    )Cash, beginning of period
    
    
    1,605
    
    
    
    3,099Cash, end of period
    
    $
    1,773
    
    
    $
    1,511
 See notes to consolidated financial statements
 5




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##### 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 July 1, 2007
    
    
    445,000
    
    
    $
    9.01Exercisable at July 1, 2007
    
    
    378,340
    
    
    $
    9.09Available for issuance at July 1, 2007
    
    
    53,035
  Weighted-AverageNumber of Shares
    
    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
    
    
    (66,485
    )
    
    
    9.59Forfeited
    
    
    (14,166
    )
    
    
    9.61Outstanding at July 1, 2007
    
    
    354,933
    
    
    $
    10.03Exercisable at July 1, 2007
    
    
    113,778
    
    
    $
    9.73Available for issuance as stock options or restricted stock at July 1, 2007
    
    
    774,489
  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
    
    
    (80,500
    )
    
    
    17.36Forfeited
    
    
    (12,247
    )
    
    
    17.19Nonvested balance at July 1, 2007
    
    
    504,803
    
    
    $
    18.20
  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
    
    Six Months EndedJuly 1,
    
    July 2,
    
    July 1,
    
    July 2,2007
    
    2006
    
    2007
    
    2006Net income attributable to common stockholders  basic
    
    $
    9,218
    
    
    $
    11,126
    
    
    $
    14,524
    
    
    $
    12,770Net income attributable to unvested restricted stockholders
    
    
    239
    
    
    
    
    
    
    
    344
    
    
    
    Net income attributable to warrant holders
    
    
    115
    
    
    
    236
    
    
    
    186
    
    
    
    271Total net income
    
    $
    9,572
    
    
    $
    11,362
    
    
    $
    15,054
    
    
    $
    13,041Weighted average common shares outstanding  basic
    
    
    19,243
    
    
    
    18,562
    
    
    
    19,044
    
    
    
    18,556Add: dilutive restricted stock, stock options and warrants
    
    
    952
    
    
    
    358
    
    
    
    1,043
    
    
    
    306Diluted weighted average common shares outstanding
    
    
    20,195
    
    
    
    18,920
    
    
    
    20,087
    
    
    
    18,862Basic earnings per common share
    
    $
    0.48
    
    
    $
    0.60
    
    
    $
    0.76
    
    
    $
    0.69Diluted earnings per common share
    
    $
    0.47
    
    
    $
    0.60
    
    
    $
    0.75
    
    
    $
    0.69
  6. Long-Term Debt
  July 1,
    
    December 31,2007
    
    2006Debt outstanding under credit facilities:Senior credit facilityrevolver
    
    $
    90,901
    
    
    $
    88,542Senior credit facilitysenior term loan
    
    
    7,500
    
    
    
    10,00098,401
    
    
    
    98,542Less current maturities
    
    
    5,000
    
    
    
    5,000Long-term obligations, excluding current maturities
    
    $
    93,401
    
    
    $
    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 Second Quarter 2007 Results
     2007 Outlook
    17
    Table of Contents  Results of Operations
 Quarter Ended July 1, 2007, Versus Quarter Ended July 2, 2006
  Three Months Ended
    
    Percent of Revenues
    
    Percent ChangeJuly 1,
    
    July 2,
    
    July 1,
    
    July 2,
    
    2007 vs.2007
    
    2006
    
    2007
    
    2006
    
    2006Revenues from services
    
    $
    186,602
    
    
    $
    187,609
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    (0.5
    %)Cost of services
    
    
    139,768
    
    
    
    141,736
    
    
    
    74.9
    %
    
    
    75.6
    %
    
    
    (1.4
    %)Gross profit
    
    
    46,834
    
    
    
    45,873
    
    
    
    25.1
    %
    
    
    24.4
    %
    
    
    2.1
    %Operating costs and expenses:Selling, general and administrative
    
    
    33,140
    
    
    
    34,283
    
    
    
    17.8
    %
    
    
    18.3
    %
    
    
    (3.3
    %)Depreciation and amortization
    
    
    1,589
    
    
    
    2,167
    
    
    
    0.8
    %
    
    
    1.1
    %
    
    
    (26.7
    %)34,729
    
    
    
    36,450
    
    
    
    18.6
    %
    
    
    19.4
    %
    
    
    (4.7
    %)Operating income
    
    
    12,105
    
    
    
    9,423
    
    
    
    6.5
    %
    
    
    5.0
    %
    
    
    28.5
    %Interest expense, net
    
    
    2,296
    
    
    
    3,573
    
    
    
    1.2
    %
    
    
    1.9
    %
    
    
    (35.7
    %)Other income, net
    
    
    (223
    )
    
    
    (170
    )
    
    
    (0.1
    %)
    
    
    (0.1
    %)
    
    
    31.2
    %Income before income taxes
    
    
    10,032
    
    
    
    6,020
    
    
    
    5.4
    %
    
    
    3.2
    %
    
    
    66.6
    %Income tax expense (benefit)
    
    
    460
    
    
    
    (5,342
    )
    
    
    0.3
    %
    
    
    (2.9
    %)
    
    
    (108.6
    %)Net income
    
    $
    9,572
    
    
    $
    11,362
    
    
    
    5.1
    %
    
    
    6.1
    %
    
    
    (15.8
    %)Billable headcount at end of period
    
    
    4,996
    
    
    
    5,183
  Revenues.
 Cost of Services .
 Selling, General and Administrative Expenses . 18
    Table of Contents    Depreciation and Amortization .
 Interest Expense, Net.
 Provision for Income Taxes.
  Six Months Ended July 1, 2007, Versus Six Months Ended July 2, 2006
  Six Months Ended
    
    
    Percent of Revenues
    
    
    Percent ChangeJuly 1,
    
    
    July 2,
    
    
    July 1,
    
    
    July 2,
    
    
    2007 vs.2007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2006Revenues from services
    
    $
    372,810
    
    
    $
    366,201
    
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    1.8
    %Cost of services
    
    
    280,975
    
    
    
    278,256
    
    
    
    75.4
    %
    
    
    76.0
    %
    
    
    1.0
    %Gross profit
    
    
    91,835
    
    
    
    87,945
    
    
    
    24.6
    %
    
    
    24.0
    %
    
    
    4.4
    %Operating costs and expenses:Selling, general and administrative
    
    
    68,561
    
    
    
    68,521
    
    
    
    18.4
    %
    
    
    18.7
    %
    
    
    0.1
    %Depreciation and amortization
    
    
    3,047
    
    
    
    4,339
    
    
    
    0.8
    %
    
    
    1.2
    %
    
    
    (29.8
    %)71,608
    
    
    
    72,860
    
    
    
    19.2
    %
    
    
    19.9
    %
    
    
    (1.7
    %)Operating income
    
    
    20,227
    
    
    
    15,085
    
    
    
    5.4
    %
    
    
    4.1
    %
    
    
    34.1
    %Interest expense, net
    
    
    4,716
    
    
    
    7,530
    
    
    
    1.2
    %
    
    
    2.1
    %
    
    
    (37.4
    %)Other income, net
    
    
    (451
    )
    
    
    (294
    )
    
    
    (0.1
    %)
    
    
    (0.1
    %)
    
    
    53.4
    %Income before income taxes
    
    
    15,962
    
    
    
    7,849
    
    
    
    4.3
    %
    
    
    2.1
    %
    
    
    103.4
    %Income tax expense (benefit)
    
    
    908
    
    
    
    (5,192
    )
    
    
    0.3
    %
    
    
    (1.5
    %)
    
    
    (117.5
    %)Net income
    
    $
    15,054
    
    
    $
    13,041
    
    
    
    4.0
    %
    
    
    3.6
    %
    
    
    15.4
    %
 19    Table of Contents  Revenues.
 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
  Six Months EndedJuly 1,
    
    July 2,2007
    
    2006Net cash provided by operating activities
    
    $
    613
    
    
    $
    7,339Net cash used in investing activities
    
    
    (1,804
    )
    
    
    (3,299
    )Net cash provided by (used for) financing activities
    
    
    1,316
    
    
    
    (5,715
    )Effect of exchange rates on cash
    
    
    43
    
    
    
    87Net increase (decrease) in cash
    
    $
    168
    
    
    
    ($1,588
    )
     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  Revenue Recognition
     Recoverability of Goodwill and Other Intangible Assets
 Goodwill and Other Intangible Assets,
  Collectibility of Accounts Receivable
  25
    Table of Contents    Stock-Based Compensation
    Self-Insurance
  Accrued Bonuses
  26
    Table of Contents  Income Tax Assets and Liabilities
 Accounting for Income Taxes
    Accounting for
Uncertainty in Income Taxes  an interpretation of FASB Statement No. 109 Accounting for Income Taxes
 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;
 27
    Table of Contents  
    
    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.
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  Interest Rate Risks
  Foreign Currency Risks
  28
    Table of Contents  Equity Market Risks
  
 ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Controls over Financial Reporting
  29
    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
   Name of Nominee
    
    For
    
    WithheldLarry L. Enterline
    
    
    17,547,426
    
    
    
    87,443Frederick W. Eubank II
    
    
    17,492,443
    
    
    
    142,426Robert Fotsch
    
    
    17,547,443
    
    
    
    87,426Robert Z. Hensley
    
    
    17,547,443
    
    
    
    87,426Victor E. Mandel
    
    
    17,547,443
    
    
    
    87,426Courtney R. McCarthy
    
    
    17,492,348
    
    
    
    142,521Elias J. Sabo
    
    
    17,492,443
    
    
    
    142,426
  For
    
    Against
    
    Abstain15,395,843
    
    892,124
    
    2,797
  For
    
    Against
    
    Abstain17,597,616
    
    34,909
    
    2,344
 
 ITEM 5. OTHER INFORMATION
  30
    Table of Contents  ITEM 6. EXHIBITS
  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).10.1*
    
    Consent and Fifth Amendment to Credit Agreement, dated as of May 31, 2007, among COMSYS Services LLC, COMSYS Information Technology Services, Inc. and
Pure Solutions, Inc., as borrowers, COMSYS IT Partners, Inc., PFI LLC and COMSYS IT Canada, Inc., as guarantors, COMSYS Services LLC, acting in its
capacity as borrowing agent and funds administrator for the borrowers, Merrill Lynch Capital, as administrative agent, a lender, sole bookrunner and
sole lead arranger, ING Capital LLC, Allied Irish Banks PLC and BMO Capital Markets Financing, Inc., as co-documentation agents and as lenders, GMAC
Commercial Finance LLC, as syndication agent and as a lender, and the lenders from time to time party thereto.10.2+*
    
    First Amended and Restated Employment agreemend dated June 1, 2007, between COMSYS IT Partners, Inc. and Michael H. Barker.10.3+*
    
    First Amended and Restated Employment agreemend dated June 1, 2007, between COMSYS IT Partners, Inc. and David L. Kerr.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.
 31
    Table of Contents  SIGNATURES
  COMSYS IT PARTNERS, INC.Date: August 10, 2007
    
    By:
    
    /s/ Larry L. EnterlineName:
    
    Larry L. EnterlineTitle:
    
    Chief Executive OfficerDate: August 10, 2007
    
    By:
    
    /s/ Joseph C. Tusa, Jr.Name:
    
    Joseph C. Tusa, Jr.Title:
    
    Senior Vice President and Chief Financial Officer
 32
    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).10.1*
    
    Consent and Fifth Amendment to Credit Agreement, dated as of May 31, 2007, among COMSYS Services LLC, COMSYS Information Technology Services, Inc. and
Pure Solutions, Inc., as borrowers, COMSYS IT Partners, Inc., PFI LLC and COMSYS IT Canada, Inc., as guarantors, COMSYS Services LLC, acting in its
capacity as borrowing agent and funds administrator for the borrowers, Merrill Lynch Capital, as administrative agent, a lender, sole bookrunner and
sole lead arranger, ING Capital LLC, Allied Irish Banks PLC and BMO Capital Markets Financing, Inc., as co-documentation agents and as lenders, GMAC
Commercial Finance LLC, as syndication agent and as a lender, and the lenders from time to time party thereto.10.2+*
    
    First Amended and Restated Employment agreemend dated June 1, 2007, between COMSYS IT Partners, Inc. and Michael H. Barker.10.3+*
    
    First Amended and Restated Employment agreemend dated June 1, 2007, between COMSYS IT Partners, Inc. and David L. Kerr.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.
 33