<PAGE>   1
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q



        [X] Quarterly Report Pursuant to Section 13 or 15(d) of the 
            Securities Exchange Act of 1934

                For the quarterly period ended SEPTEMBER 29, 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 001-13956
                                               ---------

                        PERSONNEL GROUP OF AMERICA, INC.
                        --------------------------------
             (Exact name of registrant as specified in its charter)

                    DELAWARE                          56-1930691
          (State or other jurisdiction of           (IRS Employer
           incorporation or organization)         Identification No.)
                                                                 
    6302 FAIRVIEW ROAD, SUITE 201   CHARLOTTE, NORTH CAROLINA         28210
    -----------------------------------------------------------------------
          (Address of principal executive offices)                (Zip Code)

                                (704) 442-5100
                       ---------------------------------
               (Registrant's telephone number including area code)

                                     None
                    ----------------------------------------
        (Former name, former address and former fiscal year, if changed
                               since last report)

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.

                                 [X] Yes     [ ] No
            
    As of October 31, 1996 there were outstanding 12,031,310 shares of common
stock, par value $.01 per share.


<PAGE>   2


                        PERSONNEL GROUP OF AMERICA, INC.
                                TABLE OF CONTENTS



PART I - FINANCIAL INFORMATION

<TABLE>
<CAPTION>
                PAGE
<S>                                                                     <C>
Item 1.  Financial Statements (unaudited)
          Consolidated Statements of Income                             1
          Consolidated Balance Sheets                                   2
          Consolidated Statements of Cash Flows                         3
          Notes to Consolidated Financial Statements                    4
Item 2.  Management's Discussion and Analysis of
          Financial Condition and Results of Operations                 6

PART II - OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K                               11

SIGNATURES                                                              12
</TABLE>


<PAGE>   3

                        PERSONNEL GROUP OF AMERICA, INC.
                   UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)


<TABLE>
<CAPTION>
                                                   THREE MONTHS ENDED                  NINE MONTHS ENDED
                                               SEPTEMBER 29,    OCTOBER 1,        SEPTEMBER 29,     OCTOBER 1,
                                              ------------------------------     ------------------------------
                                                   1996             1995              1996             1995
                                              -------------    -------------     -------------    -------------
<S>                                           <C>              <C>               <C>              <C>          
Revenues:
    Commercial staffing services              $      51,885    $      36,784     $     136,288    $    $104,539
    Information technology services                  15,442           -                 16,863           -
    Health care services                             31,975           27,071            90,891           80,088
                                              --------------   --------------    -------------    -------------
       Total revenues                                99,302           63,855           244,042          184,627
                                              --------------   --------------    -------------    -------------

Expenses:
    Direct cost of services                          71,521           45,528           177,050          132,170
    Selling, general and administrative              18,174           12,758            45,408           38,254
    Depreciation and amortization                     1,521              913             3,498            2,777
    License fees                                      2,092            1,263             5,362            3,130
    Interest expense                                   (176)          -                     51           -
                                              -------------    -------------     -------------    -------------
       Total operating expenses                      93,132           60,462           231,369          176,331
                                              -------------    -------------     -------------    -------------


Income before income taxes                            6,170            3,393            12,673            8,296

Provision for income taxes                            2,595            1,396             5,358            3,534
                                              -------------    -------------     -------------    -------------

Net income                                    $       3,575    $       1,997     $       7,315    $       4,762
                                              =============    =============     =============    =============

Net income per share                          $        0.30    $       -         $        0.76    $       -
                                              =============    =============     =============    =============

Pro forma net income per share                $       -        $        0.25     $       -        $        0.60
                                              =============    =============     =============    =============

Weighted average number of shares
 outstanding                                         12,028            8,000             9,620            8,000
                                              =============    =============     =============    =============
</TABLE>


          See accompanying notes to consolidated financial statements.

                                       1
<PAGE>   4

                       PERSONNEL GROUP OF AMERICA, INC.
                    UNAUDITED CONSOLIDATED BALANCE SHEETS
                    (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                                 SEPTEMBER 29,         DECEMBER 31,
                                                                                     1996                 1995
                                                                               ---------------      ---------------
                            ASSETS

<S>                                                                            <C>                  <C>            
Current assets
   Cash and cash equivalents                                                   $        22,062      $         5,273
   Accounts receivable, net of allowance for doubtful accounts 
    of $528 and $514 in 1996 and 1995, respectively                                     53,216               36,727
   Prepaid expenses and other current assets                                             2,917                1,889
   Deferred income taxes                                                                 3,775                3,347
                                                                               ---------------      ---------------
         Total current assets                                                           81,970               47,236

 Property and equipment, net                                                             5,786                3,602
 Excess of cost over fair value of net assets acquired, net                            120,161               50,091
 Other intangibles, net                                                                  3,006                1,056
 Other assets                                                                           10,954                  638
                                                                               ---------------      ---------------
         Total assets                                                          $       221,877      $       102,623
                                                                               ===============      ===============
                  LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
   Accounts payable                                                            $         1,359      $           222
   Accrued liabilities                                                                  26,942               16,269
   Notes payable                                                                         4,189              -
   Income taxes payable                                                                -                      1,776
                                                                               ---------------      ---------------
         Total current liabilities                                                      32,490               18,267

Long term notes payable                                                                  2,216              -
Deferred income taxes                                                                    8,209                8,370
                                                                               ---------------      ---------------
         Total liabilities                                                              42,915               26,637
                                                                               ---------------      ---------------
Commitments and contingencies                                                          -                    -

Shareholders' equity:
   Preferred stock, $.01 par value; shares authorized 5,000;  
    no shares issued and outstanding                                                   -                    -
   Common stock $.01 par value; shares authorized 20,000;     
    12,028 shares issued and outstanding                                                   120                   80
   Additional paid-in capital                                                          169,180               73,559
   Retained earnings                                                                     9,662                2,347
                                                                               ---------------      ---------------
         Total shareholders' equity                                                    178,962               75,986
                                                                               ---------------      ---------------
         Total liabilities and shareholders' equity                            $       221,877      $       102,623
                                                                               ===============      ===============
</TABLE>



       See accompanying notes to these consolidated financial statements.

                                      2
<PAGE>   5

                       PERSONNEL GROUP OF AMERICA, INC.
               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                              NINE MONTHS ENDED
                                                                        SEPTEMBER 29,        OCTOBER 1,
                                                                      --------------       --------------
                                                                           1996                 1995
                                                                      --------------       --------------

<S>                                                                   <C>                  <C>          
Cash flows provided by (used in) operating activities:
   Net income                                                         $       7,315        $       4,762
   Adjustments to reconcile net income to net cash                 
    provided by (used in) operating activities                 
      Depreciation and amortization                                           3,498                2,777
      Deferred income taxes, net                                               (456)                (203)
      Changes in assets and liabilities:                         
         Accounts receivable                                                (11,253)              (1,385)
         Prepaid expenses and other current assets                             (797)                (575)
         Other assets                                                          (343)                  52
         Accounts payable and accrued liabilities                             6,263                4,954
         Income taxes payable                                                (1,776)              -
         Other                                                                  (82)              -
                                                                      -------------        -------------
            Net cash provided by operating activities                         2,369               10,382

Cash flows used in investing activities:
   Purchases of property and equipment, net                                  (2,937)                (566)
   Acquisitions of subsidiaries, net of cash acquired                       (77,545)              -
                                                                      -------------        -------------
            Net cash used in investing activities                           (80,482)                (566)
                                                                      -------------        -------------


Cash flows provided by (used in) financing activities
   Sale of common stock, net of expenses                                     95,661               -
   Repayments of notes payable to bank                                      (30,758)              -
   Borrowings of notes payable to bank                                       29,999               -
   Distributions to Adia, net                                                -                    (7,351)
                                                                      -------------        -------------
            Net cash provided by (used in) financing activities              94,902               (7,351)
                                                                      -------------        -------------

            Net increase (decrease) in cash and cash equivalents             16,789                2,465

Cash and cash equivalents at beginning of period                              5,273                2,931
                                                                      -------------        -------------

Cash and cash equivalents at end of period                            $      22,062        $       5,396
                                                                      =============        =============



Supplemental disclosures of cash flow information: 
   Cash payments during the period for:             
      Income taxes                                                    $       6,599        $      -
      Interest                                                        $         178        $      -
</TABLE>


       See accompanying notes to these consolidated financial statements.

                                      3
<PAGE>   6


                        Personnel Group of America, Inc.
                    Note to Consolidated Financial Statements
                                   (unaudited)
                 (In Thousands, except share and per share data)

(1) GENERAL

The unaudited consolidated financial statements included herein have been
prepared in accordance with the instructions to Form 10-Q and do not include all
the information and footnotes required by generally accepted accounting
principles; however, they do include all adjustments of a normal recurring
nature which, in the opinion of management, are necessary to present fairly the
results of operations of the Company for the interim periods presented. These
interim financial statements should be read in conjunction with the Company's
audited consolidated financial statements and related notes for the year ended
December 31, 1995 included in the Company's Annual Report on Form 10-K for the
year end December 31, 1995. The results of operations for the interim periods
presented are not necessarily indicative of the results to be expected for the
entire year.

In June 1996, the Company issued 4,025,000 shares of its common stock in an
underwritten public offering (the "Secondary Offering") which raised
approximately $96,000 for the Company. The proceeds from the Secondary Offering
were used to repay outstanding borrowings under the Company's Credit Facility
(See Note 3) and fund several of the Company's recent acquisitions (See Note 2).

The fiscal quarter ends on the Sunday nearest to September 30 or September 29 in
1996 and October 1 in 1995. Each fiscal quarter presented contained 13 weeks.

(2) ACQUISITIONS

During the nine months ended September 29, 1996, the following companies were
acquired:

COMPANY                                                DATE ACQUIRED
Profile Temporary Services ("Profile")                 March, 1996
Allegheny Personnel Services ("Allegheny")             March, 1996
Judith Fox Staffing Companies ("Fox")                  May, 1996
Computer Resource Group, Inc. ("CRG")                  June, 1996
Broughton Systems, Inc. ("Broughton")                  July, 1996
Denver Temporary Services ("Denver Temp")              July, 1996
Command Technologies ("Command")                       July, 1996

In addition, the Company converted six formerly franchised Nursefinders offices
in January, March, April and July (3) of 1996. These transactions as well as the
above transactions will be collectively referred to as the "Transactions" of the
"Acquired Companies."  Profile, Allegheny, Denver Temp and Fox provide personnel
staffing services to businesses, professional and governmental organizations.
CRG, Command and Broughton are information technology services companies which
provide a full range of computer consulting services. The Acquired Companies had
combined annual revenues in 1995 of approximately $100,000.

The purchase price for the Transactions aggregated approximately $80,000,
including direct acquisition costs but excluding certain contingent earnout
payments. The acquisitions of Profile, CRG, Denver Temp and Command provide for
additional purchase price consideration upon attainment of certain earnings
targets for various periods during the next three years. Any additional
consideration will be recorded as additional purchase price when paid and will
increase the amount of excess of cost over fair value of net assets acquired.
All of the Transactions have been accounted for using the purchase method of
accounting. Accordingly, the assets and liabilities of the entities acquired
were recorded at the estimated fair values at the dates of the acquisitions and
the results of operations of the Acquired Companies have been included in the
Company's consolidated results of operations from the date of the respective
acquisitions. The excess purchase price over the estimated fair value of the net
assets acquired was recorded and is being amortized on a straight-line basis
over forty years. All of the Transactions except the CRG, Broughton, Denver Temp
and Command acquisitions


                                       4
<PAGE>   7

were primarily funded through borrowings under the Credit Facility. The CRG,
Broughton and Denver acquisitions were funded through the use of net proceeds
from the Secondary Offering.

The following table presents the Company's pro forma consolidated results of
operations for the nine month periods ended September 29, 1996, and October 1,
1995, as if the Transactions had occurred on January 1, 1995:

                                             For the nine months ended
                                          September 29,      October 1,
                                              1996              1995
                                          --------------    -----------

           Revenues                             $285,713       $255,278
           Net income                              7,824          5,829
           Net Income per share                      .77            .73

Subsequent to September 29, 1996, the Company completed the acquisitions of
Software Service Corporation in Atlanta, Georgia ("SSC") and BEST Consulting in
Seattle, Washington ("BEST"). SSC and BEST are information technology services
companies. The combined revenues for SSC and BEST approximated $66,000 for the
year ended December 31, 1995. The Company purchased SSC and BEST in separate
transactions for an aggregate of $100,300, paying an aggregate $85,800 at
closing with the remaining $14,500 of this amount payable in installments over
three years after closing. BEST may also receive additional consideration upon
the attainment of certain earnings targets for the years ended December 31, 1996
and December 31, 1997 and for the 24-month period ended December 31, 1999. Any
additional consideration for BEST will be payable on the March 1 subsequent to
each period end. The Company funded the acquisitions of SSC and BEST primarily
through borrowings under the Credit Facility (See Note 3) and through the use of
net proceeds of the Secondary Offering.


(3) CREDIT FACILITY

On September 30, 1996, the Company entered into a three-year $100,000 revolving
line of credit (the "Credit Facility") from a bank which replaced the previous
$30,000 credit facility . In connection with the BEST and SSC acquisitions on
September 30, 1996 the Company borrowed $66,235 under the facility.  In
addition, approximately $2.5 million of the Credit Facility has been used for
the issuance of undrawn letters of credit to secure the Company's workers'
compensation program. Borrowings under the Credit Facility bear interest,
payable quarterly, at a rate equal to LIBOR plus a percentage corresponding to
the Company's consolidated leverage ratio, as defined, or the lender's base
rate, as defined, at the Company's option. The majority of the Company's
borrowing under this facility currently bears interest at a rate equal to LIBOR
plus 1.125%. The Credit Facility is secured by pledges of stock of the Company's
subsidiaries and contains customary covenants such as the maintenance of certain
financial ratios, minimum net worth and working capital requirements and a
restriction on the payment of cash dividends on common stock. The Credit
Facility also limits borrowing availability for acquisition-related purposes.


                                       5
<PAGE>   8


ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS 

INTRODUCTION AND OVERVIEW 

The following discussion and analysis should be read in conjunction with the
Company's unaudited consolidated financial statements and notes thereto included
elsewhere in this report. The Company's fiscal year ends on the Sunday nearest
to December 31 and the fiscal quarters end on the Sunday nearest to the end of
the respective calendar quarters. The current fiscal period ended on
September 29.

The Company provides personnel staffing services in selected markets throughout
the United States to businesses, professional and governmental organizations,
health care facilities, and individuals who require home health care and related
services. The Company operates within one industry segment, and is organized
into three divisions: the Commercial Staffing Division, which provides a wide
variety of staffing services, the Information Technology Staffing Division,
which provides personnel in a variety of computer-related disciplines, and the
Health Care Staffing Division, which through Company-operated, franchised and
licensed offices, provides home health care services and supplemental staffing
for health care facilities. At September 29, 1996, the Commercial Staffing
Division included 71 Company-operated offices doing business under 12
proprietary brands, the Information Technology Staffing Division operated 6
offices under 3 proprietary brands and the Health Care Staffing Division
included 50 Company-operated, 34 franchised, and 16 licensed offices doing
business under the Nursefinders brand.

The Company recognizes as revenues the amounts billed to clients of
Company-operated and licensed offices. In these cases, the temporary worker is
the Company's employee and all costs of employing the temporary worker are the
responsibility of the Company and are included in direct cost of services. The
Company remits monthly to licensees the gross profits of each licensed office
less 7% of gross revenues, uncollectible receivables and certain other expenses
of the licensed office. The Company also records a 5% royalty on gross revenues
of franchised offices.

RECENT ACQUISITIONS

Since January 1, 1996, the Company has acquired four commercial staffing
services companies and five information technology staffing services companies
in a series of eight separate transactions. The Company acquired Allegheny
Personnel Services ("Allegheny") and Profile Temporary Services ("Profile") in
March 1996, Judith Fox Staffing Companies ("Fox") in May 1996, Computer Resource
Group ("CRG") in June 1996, and Denver Temporary Services ("Denver Temp"),
Command Technologies ("Command") and Broughton Systems, Inc. ("Broughton") in
July 1996. Allegheny, Profile, Fox and Denver Temp are commercial staffing
companies and CRG, Command and Broughton are information technology staffing
companies. The combined revenues of these companies, excluding the Nursefinder
conversions discussed below, for fiscal 1995 were approximately $85 million and
the aggregate purchase price was approximately $70 million (including direct
acquisition costs and excluding certain contingent earnout payments).

Subsequent to September 29, 1996, the Company completed the acquisitions of
Software Service Corporation in Atlanta, Georgia ("SSC") and BEST Consulting in
Seattle, Washington ("BEST"). SSC and BEST are information technology services
companies which provide a full range of computer consulting services. With a
total of 12 offices, SSC and BEST had combined revenues of approximately $66,000
for the year ended December 31, 1995. The Company purchased SSC and BEST in
separate transactions for an aggregate of $100,300, paying an aggregate of
$85,800 at closing with the remaining $14,500 of this amount payable in
installments over three years after closing. BEST may also receive additional
consideration upon the attainment of certain earnings targets for the years
ended December 31, 1996 and December 31, 1997 and for the 24-month period ended
December 31, 1999. Any additional consideration for BEST will be payable on the
March 1 subsequent to each period end. The Company funded the acquisitions of
SSC and BEST primarily through borrowings under the Credit Facility and through
the use of net proceeds of the Secondary Offering.


                                       6
<PAGE>   9

Each of these acquisitions has been or will be accounted for using the purchase
method of accounting. The results of the operations for each of the companies
acquired have been included in the following discussion since the date of
acquisition. In the future, the Company's revenues and expenses may be
significantly affected by the number and timing of the opening or acquisition of
additional offices. The timing of such expansion activities also can affect
period-to-period comparisons.

FRANCHISE CONVERSIONS

During the nine months ended September 29, 1996, the Company converted six
former Nursefinders franchise offices to Company-operated offices by acquiring
the franchises from the franchises. The combined revenues of these six offices
for the year ended December 31, 1995, were approximately $18 million. The
Company recorded approximately $0.9 million in franchise fee revenue in 1995
relating to these offices.

RESULTS OF OPERATIONS

The staffing services business is subject to the seasonal impact of summer and
holiday employment trends. Typically the second six months of the calendar year
is more heavily affected as companies tend to increase their use of temporary
personnel during this period. The staffing industry is also cyclical, but the
Company believes that the broad geographic coverage of its operations and the
diversity of the services it provides generally mitigates the adverse effects of
economic cycles in a single industry or geographic region.

THREE MONTHS ENDED SEPTEMBER 29, 1996 VERSUS THREE MONTHS ENDED OCTOBER 1, 1995

         REVENUES

Total revenues for the three months ended September 29, 1996, increased 55.5% to
$99.3 million from $63.9 million for the three months ended October 1, 1995.
Commercial Staffing Division revenue grew 41.1%, of which 14.4% was primarily
due to increases in billable hours and average hourly billing rates at existing
operations as compared to the same period of the prior year. These changes were
primarily attributable to an improvement in economic conditions which led to a
higher demand for the Company's services, particularly the clerical and light
technical services. The remainder of the increase was due to $9.8 million of
revenues generated from this division's acquisitions during this period. The
Information Technology Staffing Division revenues for the three-month period
ended September 29, 1996 were $15.4 million, all of which were generated from
businesses acquired since May 1996. During this period, the Health Care Staffing
Division experienced a 18.1% increase in revenue (including franchise fees),
which was attributable to increases in home health care visits and billing rates
and approximately $4.5 million of revenue contributed from the conversion of six
franchised operations to Company-operated locations during 1996.

During the three-month period ended September 29, 1996, the Company's Commercial
Staffing Division added one office through its acquisition of Denver Temp and
the Information Technology Staffing Division added two offices through its
acquisitions of Command and Broughton. Through the Company's acquisitions of SSC
and BEST on September 30, this division added another 12 offices. Also during
the third quarter, the Health Care Staffing Division had a net increase of two
Company-operated offices, converted three franchised offices to Company-operated
offices and converted one Company-operated office to a franchised office.

         DIRECT COST OF SERVICES

Direct costs, consisting of payroll and related expenses of temporary workers,
increased 57.1% to $71.5 million for the three months ended September 29, 1996,
from $45.5 million for the three months ended October 1, 1995, primarily due
to increases in revenues during this period. Direct costs of services as a
percentage of revenues increased to 72.0% during the three months ended
September 29, 1996, from 71.3% during the same period of the prior year. This
increase reflects the reclassification of certain non-billable administrative
costs related to the Medicare program as direct costs of patient services in
1996. On a combined basis, direct cost of services and selling, general and
administrative expenses before license 



                                       7
<PAGE>   10

fees as a percentage of revenues decreased to 90.3% for the three months ended
September 29, 1996 from 91.3% for the same period of the prior year.

         OTHER OPERATING EXPENSES

Other operating expenses, consisting of selling, general and administrative
expenses, depreciation and amortization expense and license fees, increased
45.9% to $21.8 million for the three months ended September 29, 1996, from $14.9
million for the three months ended October 1, 1995. As a percentage of revenues,
selling, general and administrative expenses decreased to 18.3% for the three
months ended September 29, 1996 from 20.0% for the same period of the prior year
primarily due to the treatment of the non-billable administrative cost related
to the Medicare program as discussed above. Depreciation and amortization
expense recognized during the three months ended September 29, 1996, increased
to 1.5% of revenues from 1.4% of revenues for the same period of the prior year
due to the amortization related to acquisitions completed during 1996. License
fees increased by $0.8 million due to increased revenues from the licensed
offices and an increase in the number of licensed offices as compared to the
same period of the prior year.

         INCOME TAX EXPENSE

For the three months ended September 29, 1996, the effective tax rate increased
to 42.1% from 41.1% for the comparable period of the prior year. The increase is
primarily attributable to an increase in nondeductible intangible amortization
expense relative to pretax income for the period.

         NET INCOME

Net income increased 79.0% to $3.6 million, or 3.6% of revenue, for the three
months ended September 29, 1996 from $2.0 million, or 3.1% of revenue, for the
three months ended October 1, 1995, due to the factors discussed above.

NINE MONTHS ENDED SEPTEMBER 29, 1996 VERSUS NINE MONTHS ENDED OCTOBER 1, 1995

         REVENUES

Total revenues increased 32.2% to $244.0 million for the nine months ended
September 29, 1996, from $184.6 million for the nine months ended October 1,
1995. Commercial Staffing Division revenue grew 30.4%, of which 13.0% was
primarily due to increases in billable hours and average hourly billing rates at
existing operations as compared to the same period of the prior year. The
remainder was due to approximately $18.2 million of revenues generated by this
division's acquisitions during this period. The Information Technology Staffing
Division revenues for the nine-month period ended September 29, 1996 were $16.9
million, all of which were generated from businesses acquired during this
period. During this period, the Health Care Staffing Division experienced a
13.5% increase in revenues (including franchise fees), which was attributable to
increases in home health care visits and billing rates and the conversion of
six franchised offices to Company-operated locations.

         DIRECT COST OF SERVICES

Direct costs, consisting of payroll and related expenses of temporary workers,
increased 34.0% to $177.1 million for the nine months ended September 29, 1996,
from $132.2 million for the nine months ended October 1, 1995. Direct cost of
services as a percentage of revenue increased to 72.6% during the nine months
ended September 29, 1996, from 71.6% during the same period of the prior year.
This increase reflects the reclassification of certain non-billable
administrative costs related to the Medicare program as direct costs of patient
services in 1996. On a combined basis, direct cost of services and selling,
general and administrative expenses before license fees as a percentage of
revenues decreased to 91.2% for the nine months ended September 29, 1996 from
92.3% for the same period of the prior year.


                                       8
<PAGE>   11

         OTHER OPERATING EXPENSES

Other operating expenses, consisting of selling, general, and administrative
expenses, depreciation and amortization expenses and license fees, increased
22.9% to $54.3 million for the nine months ended September 29, 1996, from $44.2
million for the nine months ended October 1, 1995. As a percentage of revenues,
selling, general and administrative expenses decreased to 18.6% for the nine
months ended September 29, 1996, from 20.7% for the same period of the prior
year due primarily to the treatment of non-billable administrative cost related
to the Medicare program as discussed above. Depreciation and amortization
expense recognized during the nine months ended September 29, 1996, decreased to
1.4% of revenues from 1.5% of revenues for the same period of the prior year
primarily due to the completion of the amortization of certain intangibles early
in 1995 and increased revenues offset somewhat by acquisitions completed during
the first nine months of 1996. License fees increased by $2.2 million due to
increased revenues from existing licensed offices and an increase in the number
of licensed offices.

         INCOME TAX EXPENSE

For the nine months ended September 29, 1996, the effective tax rate decreased
slightly to 42.3% from 42.6% for the comparable period of the prior year. The
Company's effective tax rate is higher than the U. S. federal statutory rate of
35.0% primarily due to the amortization of certain goodwill that is not
deductible for tax purposes and state income taxes.

         NET INCOME

Net income increased 53.6% to $7.3 million, or 3.0% of revenue, for the nine
months ended September 29, 1996, from $4.8 million, or 2.6% of revenue, for the
nine months ended October 1, 1995, due to the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

The Company's principal uses of cash are to finance receivables and fund capital
expenditures and acquisitions. The Company pays wages to its employees on a
weekly basis and, in the Health Care Staffing Division, makes payments to
vendors under its SingleSource program on a monthly basis. However, receivables
for the Commercial Staffing Division, the Information Technology Staffing
Division and the Health Care Staffing Division remain outstanding an average of
43, 51 and 61 days, respectively, after billing. Health care receivables are
generally paid by insurance companies and governmental agencies and therefore
tend to be outstanding longer than commercial receivables. Due to these timing
differences, if home health care revenues as a percentage of total revenues
increase, average days receivable outstanding would increase accordingly. In the
aggregate, days sales outstanding were 50 at September 29, 1996, and 49 at
December 31, 1995.

Cash flows provided by operating activities amounted to $2.4 million for the
nine-months ended September 29, 1996, compared to $10.4 million for the nine
months ended October 1, 1995. Cash used for investing activities increased to
$80.5 million for the nine-months ended September 29, 1996, from $0.6 million
for the nine months ended October 1, 1995, reflecting the Company's acquisitions
completed through September 29, 1996 and additions to property and equipment.
Cash flows from financing activities during the same period approximated $94.9,
primarily reflecting the net proceeds from the issuance of 4,025,000 shares of
the Company's common stock in an underwritten public offering completed in June
1996. The Company made distributions to its former parent company of $7.4
million for the nine months ended October 1, 1995, in accordance with its normal
policies as a wholly owned subsidiary of that company. No such distributions
have been made with respect to revenues subsequent to the Company's initial
public offering in September 1995.

The Company's primary capital expenditure requirements relate to the acquisition
of staffing services businesses.  Since January 1, 1996, the Company has made
cash payments of approximately $166 million for acquisitions of staffing
services businesses.  The Company is also obligated under certain acquisition
agreements to repay during the next three years seller notes of approximately
$21 million and to make earnout payments to former stockholders of acquired
companies over the next three years which could aggregate as much as $6 million.
The Company



                                       9
<PAGE>   12

anticipates that the cash generated by the operations of the acquired companies
will provide a substantial part of the capital required to fund the seller notes
and earnout payments. The Company is actively seeking acquisition opportunities
and management believes that the Company will complete several acquisitions over
the next six months as attractive opportunities become available. The Company
intends to seek additional capital as necessary to fund other possible
acquisitions through one or more funding sources that may include borrowings
under the Credit Facility described below or offerings of debt or equity
securities of the Company. In addition, the Company regularly evaluates its
asset base and business mix and could elect to make changes in order to take
advantage of attractive acquisition opportunities. Cash flow from operations, to
the extent available, may also be used to fund a portion of these expenditures.

On September 30, 1996, the Company entered into a bank loan agreement for a
three-year, $100 million revolving line of credit (the "Credit Facility").
This facility replaces the previous $30 million credit facility. There were no
borrowings outstanding under the previous facility at September 29, 1996, but,
approximately $2.5 million of the previous facility had been used for the
issuance of undrawn letters of credit to secure the Company's workers'
compensation programs, and the same amount continues to be used for such purpose
under the Credit Facility.  On September 30, 1996, the Company completed the
acquisitions of SSC and BEST in separate transactions and borrowed $66.3 million
under the Credit Facility to consummate those transactions.  Borrowings under
the Credit Facility bear interest, payable quarterly, at a rate equal to LIBOR
plus a percentage corresponding to the Company's consolidated leverage ratio, as
defined, or the lender's base rate, as defined, at the Company's option. The
majority of the Company's borrowings under this facility currently bears
interest at a rate equal to LIBOR plus 1.125%. The Credit Facility is secured by
pledges of the stock of the Company's subsidiaries and contains customary
covenants such as the maintenance of certain financial ratios, minimum net worth
and working capital requirements and a restriction on the payment of cash
dividends on common stock. The Credit Facility also limits borrowing
availability for acquisition-related purposes.

During the remainder of 1996, the Company expects to open two offices in the
commercial staffing division. Start-up costs related to the opening of the new
branches vary, but are expected to approximate $100,000 per branch. Costs for
furniture, fixtures, and equipment are capitalized and depreciated, and other
start-up costs are expensed as incurred. New Company-operated and licensed
offices impose additional working capital requirements on the Company. In
addition to opening new branches, the Company is in the process of purchasing
and installing an accounting and financial information system and branch
operating and paybill systems, portions of which are complete. The Company
expects that its capital expenditures relating to these projects will aggregate
$1.5 million during the balance of 1996 and 1997.

The Company believes that cash flow from operations, the current borrowing
capacity under the existing Credit Facility and other available financing
alternatives will be adequate to meet its presently anticipated needs for
working capital, capital expenditures and acquisitions.

INFLATION

The effects of inflation on the Company's operation were not significant during
the nine months ended September 29, 1996.


                                       10
<PAGE>   13

PART II - OTHER INFORMATION

ITEM 6. - Exhibits and reports on Form 8-K

(a) Exhibits - The exhibits, which are filed with or incorporated by reference
into this form 10-Q are set forth in the Exhibit Index, which immediately
precedes the exhibits to this report.

(b) Reports on Form 8-K - On July 3, 1996, the Company filed a Current Report on
Form 8-K dated June 18, 1996 (the "Report") to report the closing of the
acquisition of Computer Resource Group, Inc. An Unaudited Pro Forma Balance
Sheet as of March 31, 1996 and notes thereto and Unaudited Pro Forma Statements
of Income for the year ended December 31, 1995 and the three-month period ended
March 31, 1996 and notes thereto were filed with the Report by incorporation by
reference of such financial statements from the Company's Registration Statement
on Form S-1 (SEC File No. 333-04573).

In addition, on October 15, 1996, the Company filed a Current Report on Form 8-K
dated September 30, 1996 to report the closing of the acquisition of Best
Consulting and to include the historical financial statements required to be
filed with such Report.  On November 12, 1996, the Company filed an amendment
to such Report on Form 8-K/A to include the pro forma financial information
required to be filed with the Report.


                                       11
<PAGE>   14


                                  SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                          PERSONNEL GROUP OF AMERICA, INC.
                                          (Registrant)



Date:    November 12, 1996                By: /s/ EDWARD P. DRUDGE Jr.
                                              ---------------------------------
                                                Edward P. Drudge Jr.
                                                Chief Executive Officer



Date:    November 12, 1996                By: /s/ MICHAEL P. BERNARD
                                              ---------------------------------
                                                Michael P. Bernard
                                                Chief Financial Officer and
                                                Treasurer





                                      12

<PAGE>   15
                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
                                                     Filed Herewith (*),
                                                     or Incorporated by
                                                       Reference from

                                                                                 Company
                                                          Previous               Reg. No.
Exhibit                                                    Exhibit                  or
Number              Description                            Number                 Report
------              -----------                           --------               -------
<S>       <C>                                               <C>              <C>
 3.1      Amended and Restated Certificate of                3.1                 33-95228
          Incorporation of the Company

 3.2      Amended and Restated Bylaws of the                 3.2                 33-95228
          Company

 4.0      Specimen Stock Certificate                         4.0                 33-95228

 4.1      Rights Agreement between the Company and           1                    0-27792
          The First National Bank of Boston

10.1      1995 Equity Participation Plan                    10.1             10-Q for quarter
                                                                              ended 9/30/95

10.2      Management Incentive Compensation Plan            10.2             10-Q for quarter
                                                                              ended 9/30/95

10.3#     Director and Officer Indemnification              10.3              10-K for year
          Agreement of James V. Napier                                        ended 12/31/95

10.4      License Agreement between Adia                    10.4             10-Q for quarter
          Services Inc., a California corporation                             ended 9/30/95
          ("Adia California") and StaffPLUS, Inc.

10.5      License Agreement between Adia                    10.5             10-Q for quarter
          Services, Inc., a Delaware corporation                              ended 9/30/95
          ("Adia Delaware") and Nursefinders, Inc.

10.6      Administrative Services Agreement between         10.6             10-Q for quarter
          the Company and Adia California                                     ended 9/30/95

10.7      Paybill Services Agreement between the            10.7             10-Q for quarter
          Company and Adia California                                         ended 9/30/95

10.8      Software License Agreement between the            10.8             10-Q for quarter
          Company and Adia California                                         ended 9/30/95

10.9      Employment Agreement between the                  10.9             10-Q for quarter
          Company and Edward P. Drudge, Jr.                                   ended 9/30/95

10.10     Employment Agreement between the                  10.10            10-Q for quarter
          Company and Michael P. Bernard.                                     ended 9/30/95

10.11     Employment Agreement between Adia                 10.13                33-95228
          Delaware, PFI Corp. and Richard L.                                  
          Peranton

10.12     Employment Agreement between Adia                 10.14                33-95228
          California and Gene C. Wilson                                       

10.13     Employment Agreement between the                  10.13              10-K for year
          Company and Rosemary Payne-Harris                                   ended 12/31/95

10.14     Indemnification Agreement between the             10.14            10-Q for quarter
          Company and Adia Delaware                                           ended 9/30/95

10.15     Tax-Sharing Agreement between the                 10.15            10-Q for quarter
          Company, Adia Delaware and Adia                                     ended 9/30/95
          California

10.16     Non-Qualified Profit-Sharing Plan                 10.16            10-K for year
                                                                             ended 12/31/95

10.17     Credit Agreement among the Company, the             *
          subsidiaries of the Company from time to
          time party thereto, the several Lenders
          from time to time party thereto and
          NationsBank, N.A., as Agent

10.18     Asset Purchase Agreement between the              10.19               333-04573
          Company and Judith Fox Staffing
          Companies

10.19     Asset Purchase Agreement between the              10.20               333-04573
          Company and Computer Resources Group,
          Inc.

10.20     Asset Purchase Agreement between the               2                  8-K dated
          Company and Business Enterprise Systems                                9/30/96
          and Technology, Inc. and the individuals
          named therein

</TABLE>


# This Exhibit is substantially identical to Director and Officer
  Indemnification Agreements of the same date between the Company and the
  following individuals:  Edward P. Drudge, Jr., Richard L. Peranton, Gene C.
  Wilson, Rosemary Payne-Harris, Michael P. Bernard, Kevin P. Egan, J. Roger
  King, Joyce G. Mazero (Retired Director) and William Simione, Jr.