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                      SECURITIES AND EXCHANGE COMMISSION
 
                            WASHINGTON, D.C. 20549
 
                               ----------------
 
                                   FORM 10-K
 
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
                                    OF 1934
 
  FOR THE FISCAL YEAR ENDED: JUNE 28, 1997     COMMISSION FILE NUMBER 0-28192
                 
 
                              THE REGISTRY, INC.
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
            MASSACHUSETTS                              04-2920563
    (STATE OR OTHER JURISDICTION                    (I.R.S. EMPLOYER
   INCORPORATION OR ORGANIZATION)                  IDENTIFICATION NO.)
 
                               189 WELLS AVENUE
                          NEWTON, MASSACHUSETTS 02159
                                (617) 527-6886
   (ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
                 OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
                                     NONE
 
          SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
 
    COMMON STOCK, NO PAR VALUE                 NASDAQ NATIONAL MARKET
    ___________________________        ______________________________________
       (TITLE OF EACH CLASS)               (NAME OF EACH EXCHANGE ON WHICH
                                                     REGISTERED)
 
                               ----------------
 
  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
 
  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K, or any
amendment to this Form 10-K. [X]
 
  Based on the closing sales price of the registrant's Common Stock on the
Nasdaq National Market on September 25, 1997, the aggregate market value of
the Common Stock held by nonaffiliates of the registrant was $629,079,268.
 
  The number of shares of the registrant's Common Stock outstanding on
September 25, 1997 was 21,865,130.
 
                      DOCUMENTS INCORPORATED BY REFERENCE
 
 PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT FOR USE IN CONNECTION
   WITH ITS ANNUAL MEETING OF STOCKHOLDERS TO BE HELD NOVEMBER 20, 1997 ARE
                   INCORPORATED BY REFERENCE INTO PART III.
 
 
 
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<PAGE>
 
                                    PART I
 
ITEM 1: BUSINESS
 
FORWARD-LOOKING STATEMENTS
 
  This Annual Report on Form 10-K contains forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "expects," and
similar expressions are intended to identify forward-looking statements. The
important factors discussed in Item 7--"Management's Discussion and Analysis
of Financial Condition and Results of Operations" under the caption "Risk
Factors" among others, could cause actual results to differ materially from
those indicated by forward-looking statements made herein and presented
elsewhere by management from time to time.
 
INTRODUCTORY NOTE
 
  On July 31, 1997, The Registry, Inc. ("The Registry" or the "Company")
acquired Renaissance Solutions, Inc. ("Renaissance"). Based in Lincoln,
Massachusetts, Renaissance provides management consulting and client/server
integration services, primarily for large corporations. Notwithstanding the
fact that the acquisition of Renaissance by The Registry occurred after the
end of the Company's fiscal year end, this Annual Report on Form 10-K
describes certain aspects of the business of Renaissance relevant to an
understanding of the business of the Registrant. The Consolidated Financial
Statements for The Registry contained in Item 8 do not, however, reflect the
results of operations for Renaissance for any of the periods presented
therein.
 
THE REGISTRY, INC.
 
  The Registry provides information technology (IT) consultants on a contract
basis to organizations with complex IT operations. Revenue from The Registry's
IT consulting business is principally derived from supplemental IT staffing
services and, to a lesser extent, from management consulting services provided
through its specialized practices. As of June 28, 1997, The Registry had
approximately 3,100 IT consultants placed with its clients to assist them in
implementing solutions for systems and applications development in such areas
as distributed network design, database design and development and
client/server migration. These consultants, billed primarily on an hourly
basis, typically work on engagements lasting from six to twelve months under
the direction of the client. In 1997, The Registry provided IT consultants to
approximately 1,000 clients in a diverse range of industries. The Registry has
grown from six offices and $19.4 million in revenue in fiscal 1991 to 37
offices and $324.8 million in revenue for the fiscal year ended June 28, 1997.
 
RENAISSANCE SOLUTIONS, INC.
 
  Renaissance provides management consulting and client/server systems
integration services, primarily for large corporations. Renaissance's
offerings fall into three categories: strategic services, performance
innovation services and technology services. Strategic services consist
primarily of management consulting services using the "Balanced Scorecard"
concept described in three Harvard Business Review articles and in the book
The Balanced Scorecard, all of which were co-authored by one of Renaissance's
founders, and the design, development and implementation of software-based
executive information systems. Renaissance's strategic services are designed
to assist senior executives in strategy implementation. Renaissance's
performance innovation services consist primarily of consulting services
designed to assist companies in the design and implementation of key business
processes. Renaissance's technology services include the design, development
and implementation of desktop applications using client/server architecture to
support decision-making,
 
                                       1
<PAGE>
 
coordination, information sharing and skill development by knowledge workers.
These applications are designed for key business processes, including market
and product development, sales, order fulfillment and customer service.
Renaissance believes that by bridging management consulting and systems
integration capabilities it can help its customers effectively use technology
to satisfy their strategic objectives.
 
BUSINESS STRATEGY
 
 The Registry
 
  The Registry's goal is to be a leading nationwide provider of business and
IT consulting services for organizations with complex IT operations. The
Company's business strategy encompasses the following elements:
 
  .  Emphasize Resource Management. The Registry believes that its ability to
     provide the highest quality, most professional IT consultants is
     critical to its success. The Registry's Delivery Management System is
     designed to effectively identify, qualify, place and retain IT
     consultants. Most of The Registry's Resource Managers recruit in one of
     five specific technology sectors, enabling The Registry to more
     effectively match the skills of its IT consultants with the needs of its
     clients. To attract and retain IT consultants, The Registry offers them
     a comprehensive benefits package and actively re-markets them before
     their engagement ends.
 
  .  Focus on Application Development and Software Engineering. Many of The
     Registry's clients are leaders in adopting emerging computing
     technologies. The Registry provides IT consultants for application
     development and software engineering in areas such as networking and
     communications, migration from legacy systems, workgroup/desktop
     applications, database design and development and Internet. In addition
     to differentiating The Registry's service offerings from those of other
     IT service providers, this focus on application development and software
     engineering provides The Registry an opportunity to enhance margins by
     moving away from the commodity pricing more typical for IT consultants
     providing routine operations and maintenance services while enabling its
     IT consultants the opportunity to work on challenging projects.
 
  .  Build Client Relationships. The Registry seeks long-term relationships
     as a primary IT service provider for companies which have complex IT
     operations and for which IT development is a strategic tool. The
     Registry believes that this relationship-oriented approach results in
     greater client satisfaction and reduces business development expense. By
     helping its clients assess their future staffing needs in their IT
     planning process, The Registry is better able to anticipate
     opportunities to provide additional services.
 
  .  Maintain and Expand National Presence. The Registry believes that larger
     organizations with multiple locations prefer to deal with IT service
     providers that can provide consistent and high quality services on a
     nationwide basis. The Registry has focused from its inception on
     establishing a nationwide presence to take advantage of the enhanced
     delivery capabilities resulting from a nationwide resource pool as well
     as to focus on and serve national accounts. The Registry has offices
     across the country allowing national coverage for larger accounts and
     mobility for IT consultants. In the future, The Registry's decision to
     establish a new office or make an acquisition will be influenced, in
     part, by the extent to which establishing a new office or making an
     acquisition can help increase The Registry's national presence and
     assist in serving national accounts.
 
                                       2
<PAGE>
 
 Renaissance
 
  Renaissance's goal is to be a leading provider of management consulting and
client/server systems integration services to corporations seeking major
performance improvements. Renaissance is pursuing the following strategies to
achieve this goal.
 
  .  Employ a Multidisciplinary Approach. Renaissance believes that a key
     factor differentiating its service offerings is the combination of its
     expertise in management consulting and client/server systems
     integration. Renaissance believes that by bridging management consulting
     and systems integration capabilities it can help its customers
     effectively use technology to satisfy their strategic objectives.
 
  .  Provide Tailored Solutions Using Proprietary Methodologies and Reusable
     Software Components. Renaissance is investing in proprietary
     methodologies and reusable software components for all of its service
     offerings. Although Renaissance individually tailors solutions for each
     customer, it leverages its capabilities through the use of these
     proprietary methodologies and software components in order to take full
     advantage of its best practice and case experiences. Renaissance
     believes that this approach reduces development time and project costs,
     enhances project quality, permits rapid expansion of Renaissance's
     professional staff and differentiates its services from those of its
     competitors.
 
  .  Emphasize Cross-Selling Activities and Coordinated Account
     Development. Renaissance believes a key element of growth is the
     coordinated development of existing and new accounts. Renaissance
     focuses its marketing and business development activities on targeted
     new clients, improving services to existing clients and actively cross-
     selling its service offerings to extend the life of existing client
     relationships.
 
  .  Broaden Customer Base Through Targeted Industry Marketing, Geographic
     Expansion and Alliances. Renaissance plans to continue to expand its
     marketing initiatives and capabilities. Renaissance is expanding its
     professional staff through the addition of personnel with consulting
     expertise in targeted industry sectors and is increasing its sector-
     specific customer marketing efforts and practice initiatives, including
     publications and executive seminars. Renaissance is also seeking
     marketing alliances with consulting and technology providers who offer
     products or services that complement its service offerings.
 
  .  Diversify Service Offerings and Markets Through Internal Development and
     Acquisitions of Complementary Businesses. Renaissance's strategy
     includes the development and marketing of an integrated portfolio of
     service offerings that address the needs of senior executives in various
     industry sectors. Renaissance seeks to implement this goal through a
     combination of innovative internal development and strategic
     acquisitions designed to expand its service offerings and targeted
     markets.
 
GROWTH STRATEGY
 
  The Company believes that a balance of internal growth and selective
acquisitions will best position The Registry to capitalize on opportunities in
the integrated consulting services marketplace. The Company's growth strategy
consists of the following primary components:
 
  .  Acquire Complementary Businesses. The Registry expects to continue to
     seek to acquire companies, both nationally and internationally, in the
     business and IT consulting services industries to facilitate its
     expansion into new geographic areas or to acquire businesses that offer
     complementary services. Since the fiscal year end, The Registry has
     acquired four companies focusing on the management and strategic
     consulting areas of the IT industry. These acquisitions complement The
     Registry's network of professional services branches providing an
     integrated consulting organization to address the complex IT needs of
     its clients.
 
                                       3
<PAGE>
 
  .  Develop New Service Offerings. The Registry intends to continue its
     practice of developing and acquiring complementary services, such as the
     Enhanced Technical Communications Practice (formerly known as the
     Documentation Services Practice), the Help Desk Practice, and the
     Application Development Practice. These services can then be expanded on
     a national level after their viability and profitability is demonstrated
     at a local level.
 
  .  Concentrate on Existing Branch Development. The Registry believes that
     there are substantial opportunities for increasing revenue in existing
     branches, many of which have been open for less than five years. The
     Registry's strategy is to increase sales to existing clients by
     broadening the range of professional IT services available to them. As a
     result of its involvement in the IT planning process of many of its
     clients, The Registry is often afforded an opportunity to anticipate
     clients' needs for additional IT consultants and services.
 
  .  Expand National Accounts. The Registry is currently focusing on national
     account development and has identified certain systems integrators,
     computer manufacturers and telecommunications firms as potential
     national accounts. These accounts present an array of unique operational
     challenges, such as coordinating service delivery across divisional
     lines and providing centralized invoicing. The Registry believes that
     its national presence and national resource management capabilities will
     enable it to meet these challenges.
 
  .  Implement Satellite Branch Expansion. The Registry believes that
     opportunities exist for additional satellite expansion. From existing
     branch offices, The Registry has successfully developed satellite
     offices in certain regions. This method of developing opportunities in
     given geographic areas allows The Registry to expand its client and
     consultant base while leveraging existing infrastructure and reducing
     start-up costs. During fiscal 1997, The Registry opened an office in
     Tampa, Florida as a satellite office to its existing Ft. Lauderdale and
     Orlando offices. In the first quarter of fiscal 1998, The Registry
     expects to open an office in Bethesda, Maryland as a satellite to its
     McLean, Virginia office and a Las Colinas, Texas branch satellite office
     to its Dallas branch.
 
THE COMPANY'S SERVICES
 
  The Company offers integrated consulting services consisting of IT
professional services, strategic and management consulting services and
specialized practices.
 
 IT Professional Services
 
  The Registry provides IT professional services for application development
and software engineering. The vast majority of The Registry's IT consultants
work on a supplemental staffing basis to deliver IT implementation,
integration and development services. The Registry's IT consultants, billed
primarily on an hourly basis, typically work on engagements lasting from six
to twelve months under the direction of the client.
 
  The Registry organizes its IT professional services in five sectors:
workgroup/desktop; legacy systems; networks and communications; database
design and development; and Internet.
 
  .  Workgroup/Desktop. Workgroup/desktop engagements involve front-end
     graphical user interface (GUI) development, rapid application
     prototyping and development, object-oriented development; and workgroup
     application services.
 
  .  Legacy Systems. Legacy system engagements address challenges in the
     migration of legacy applications to a client/server environment, large
     systems development and general legacy (primarily IBM and Digital
     VAX/VMS) support.
 
                                       4
<PAGE>
 
  .  Networks and Communications. Networks and communications engagements
     generally involve distributed network design and implementation or
     optimization and connectivity services in both local area networks
     (LANs) and wide area networks (WANs).
 
  .  Database Design and Development. Database design and development
     assignments involve design, development and implementation of relational
     database applications and systems.
 
  .  Internet. Internet engagements include Web Page design, Internet
     security design issues and intranetworking systems development.
 
 Strategic and Management Consulting Services
 
  On July 31, 1997, the Company acquired Renaissance Solutions, Inc., a
leading provider of management consulting and client/server systems
integration services, serving primarily large corporations. With the merger of
Renaissance and three additional acquisitions subsequent to year end, the
Company has expanded its management and strategic consulting services
providing customers with access, under a single corporate umbrella, to The
Registry's and Renaissance's comprehensive expertise and services in strategy
consulting, business solutions and technology implementation. In addition, the
Company believes that the combination of The Registry and Renaissance will
provide enhanced career opportunities to its employees and consultants,
enabling the Company to continue to attract and retain the capable
professionals in the consulting field. Management consulting engagements
generally involve network strategy, systems architecture and implementation.
The Company generally assumes responsibility for project outcome in such
engagements.
 
  Renaissance provides management consulting and client/server systems
integration services, primarily for large corporations. Renaissance's
offerings fall into three categories, Strategic Services, Performance
Solutions Services and Technology Services, all of which can incorporate both
consulting services and technology implementation.
 
  Strategic Services consist primarily of management consulting services, and
include Renaissance's Strategic Management Systems practice and its Strategy
Development practice. The Strategic Management Systems practice is designed to
assist senior executives in strategy implementation, and includes management
consulting services using the "Balanced Scorecard" concept described in three
Harvard Business Review articles and in the book The Balanced Scorecard, and
the design, development and implementation of software-based executive
information systems. Strategy Development involves working directly with
executive level clients on industry analysis, strategy formulation and
strategic planning for the development and implementation of intermediate and
long-range competitive strategies.
 
  Performance Solutions Services consist primarily of consulting services
designed to assist companies in the design and implementation of key business
processes.
 
  Technology Services are provided by its Technology Services Group, and focus
on the design, development and implementation of desktop applications using
client/server architecture to support decision-making coordination,
information sharing and skill development.
 
 Practices
 
  Network Systems Consulting Practice (NSCP). Based in New England and
operating from locations in Hoboken, NJ, Chicago, IL, McLean, VA and San
Francisco, CA, the Network Systems Consulting Practice ("NSCP") is staffed by
50 salaried employees as of June 28, 1997. The NSCP provides an extensive
suite of management consulting services, addressing issues such as network
strategy, systems architecture and implementation. Most projects are performed
on a time and materials basis, with engagements generally lasting
approximately two to three months. The clients of the NSCP include systems
integrators, hardware manufacturers, telecommunications and pharmaceutical
companies.
 
                                       5
<PAGE>
 
  Enhanced Technical Communications Practice (ETCP). In 1994, The Registry
initiated its Enhanced Technical Communications Practice (formerly known as
the Documentation Services Practice) in its Chicago branch office. The ETCP
assists hardware and software vendors and other organizations in developing
documentation, instruction and accompanying related materials associated with
introducing new or upgrading existing products. As product development cycles
continue to shorten, these services, including documentation needs analysis,
design and development, project management, technical writing and graphic
design and illustrations, are designed to help clients produce high-quality,
cost-effective documentation under heightened scheduling constraints. In
addition, the ETCP provides systems documentation and process consulting
services to other organizations. As of June 28, 1997, the ETCP is composed of
44 professionals including project managers, technical writers, principal
consultants, a quality manager and a practice manager, of whom approximately
half are salaried employees and half are hourly IT consultants. Most projects
are performed on a time and materials basis, with engagements generally
lasting approximately three to four months.
 
  Help Desk Practice. The Registry is continuing to develop a Help Desk
Practice to assist clients in identifying their help desk requirements and
implementing and operating their help desk services. These services range from
providing consulting services to providing a complete outsourcing solution for
a client's help desk needs. On July 24, 1997, The Registry announced the
opening of its new 150 seat Response Alliance Center in Atlanta, Georgia
offering comprehensive IT support to a variety of new and existing clients.
This center was formed in response to the growing demand for outsourced help
desk support.
 
CLIENT BASE
 
  The Registry focuses its sales efforts primarily on organizations with
complex IT needs and during fiscal 1997 provided IT consultants to
approximately 1,000 clients. In the year ended June 28, 1997 approximately 32%
of The Registry's revenue was derived from its top 10 customers, none of which
accounted for more than 5% of revenue. The primary industries served by The
Registry are financial services, manufacturing, communications, systems
integration and pharmaceutical.
 
COMPETITION
 
  The market for IT professional services is intensely competitive on both
local and national levels. The market is served by numerous IT professional
services companies, many of which have greater financial, technical and other
resources than The Registry. Some of these competitors have a nationwide
presence equivalent to, or greater than, that of The Registry. Within any
given market, The Registry and its competitors frequently compete for the same
highly-skilled IT consultants and clients.
 
  The Registry competes for IT consultants with other IT professional services
providers, outsourcing and consulting companies, systems integrators,
temporary personnel agencies and client companies. IT consultants, including
those who work with The Registry, often seek assignments from more than one
staffing company. Primary competitive factors for recruiting and retaining
such professionals include: compensation, including timeliness of payment;
availability of benefits; consistent flow of high quality, varied assignments;
schedule flexibility; and an understanding of consultant skills and work
preferences.
 
  The Registry competes for clients with other IT professional services
providers, outsourcing and consulting companies, systems integrators and, to a
lesser extent, temporary personnel agencies. The Registry considers large
organizations with complex IT needs to be among its prime clients. Within a
given market, there are a limited number of such potential clients, some of
which have designated only certain IT professional services companies as
approved providers of IT professional services. Primary competitive factors
for obtaining and retaining clients include: careful matching of consultant
skills
 
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<PAGE>
 
with the client's requirements; selectivity in referral of consultant
candidates; nationwide presence; consultant technical expertise; price of
services; monitoring of client satisfaction during and after a placement; and
general responsiveness to client needs.
 
  The management consulting and client/server systems integration markets
(which include the markets for Renaissance's strategic, performance innovation
and technology solutions services) are comprised of a large number of
participants, are subject to rapid change and are highly competitive. Primary
competitors include general management consulting firms and the consulting
practices of the "Big Six" accounting firms; systems consulting and
integration firms; and the professional service groups of computer equipment
companies. In addition, customers may elect to increase their internal
strategic planning and information systems resources to satisfy their needs
for strategic and performance innovation solutions.
 
  Many participants in the management consulting and client/server systems
integration markets have significantly greater financial, technical and
marketing resources, greater name recognition and generate greater consulting
and systems integration revenues than does the Company. In addition, the
management consulting and client/server systems integration markets are highly
fragmented and served by numerous firms, many of which serve only their
respective local markets. The Company believes that the strong linkage between
its management consulting services and client/server systems integration
capabilities distinguishes it from its competitors.
 
  Although The Registry believes that it competes favorably both in recruiting
management and IT consultants and obtaining clients, there is no assurance
that it will continue to be successful in doing so.
 
EMPLOYEES
 
  As of June 28, 1997, The Registry had 1,416 employees, of which 819 were
staff IT consultants, 171 were Resource Managers, 136 were Account Managers,
76 were either Branch, Regional or corporate managers and 214 served in
various administrative, corporate support and accounting capacities. On that
date, there were also more than 3,100 IT consultants (including the 819 staff
IT consultants) working on full-time assignments for The Registry's clients.
The Registry is not a party to any collective bargaining agreements and
considers its relationships with its employees to be satisfactory.
 
  Approximately 83.6% of The Registry's IT consultants during fiscal 1997 were
treated as employees of The Registry for federal and state tax purposes. For
such employees, The Registry pays social security taxes (FICA), federal and
state unemployment taxes and workers' compensation insurance premiums. The
remainder of the IT consultants worked for The Registry on a subcontract
basis, and The Registry is not responsible for such taxes under these
arrangements. The Registry believes that such arrangements meet the
requirements of applicable law.
 
 
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<PAGE>
 
EXECUTIVE OFFICERS OF THE REGISTRANT
 
  The executive officers of The Registry are as follows:
 
<TABLE>
<CAPTION>
      NAME                  AGE                    POSITION
      ----                  ---                    --------
<S>                         <C> <C>
G. Drew Conway.............  40 President, Chief Executive Officer and Director
Robert E. Foley............  48 Chief Financial Officer and Treasurer
David Lubin................  47 Managing Director, Renaissance Solutions, Inc.
Richard L. Bugley..........  53 General Counsel
</TABLE>
 
  Mr. Conway is the founder of The Registry, and has served as President,
Chief Executive Officer and Director of The Registry since its incorporation
in May 1986 and as Treasurer from such date until March 1996. From 1983 until
1986, Mr. Conway was a founder and principal of The Experts, a technical
staffing company. Mr. Conway previously served as an Account Manager with EDP
Temps, a technical staffing company.
 
  Mr. Foley has served as Chief Financial Officer since joining The Registry
in July 1990 and as Treasurer since March 1996. Mr. Foley has more than 22
years of experience in finance and accounting and has served as an Adjunct
Professor of Finance at Northeastern University.
 
  Mr. Lubin is a founder of Renaissance and served as Treasurer and a director
of Renaissance since its inception in March 1992 and as its Co-Chairman since
December 1993. From December 1981 to December 1991 Mr. Lubin served as Vice
President and Co-Chairman of Spectrum Interactive, Inc., a multimedia
technology development company.
 
  Mr. Bugley has served as General Counsel of The Registry since May, 1996.
From September, 1993 until May, 1996 he was General Counsel and Secretary of
Banyan Systems, Inc., a manufacturer and supplier of network operating systems
and services. From September, 1992 until May, 1993 he was Vice President and
General Counsel of Loyalty Management Group, Inc., a consumer marketing
company. From August 1989 to September, 1992, Mr. Bugley was General Counsel
of IDEAssociates, Inc., a manufacturer and supplier of computer terminals,
networking products and computer services. From September 1983 until August
1989, he was employed by Apollo Computer, Inc., a manufacturer of computer
workstations as Senior Counsel and subsequently Associate General Counsel. Mr.
Bugley has been a member of the Massachusetts Bar since 1979.
 
  Each officer serves at the discretion of the Board of Directors. There are
no family relationships among any of the directors and executive officers of
The Registry.
 
ITEM 2. PROPERTIES
 
  The Registry's executive offices are located in Newton, Massachusetts, in
approximately 28,000 square feet of leased office space, under leases that
expire on September 30, 2010, from the 189 Wells Avenue Realty Trust (the
"Realty Trust"), of which G. Drew Conway is the sole beneficiary and an
executive officer of the Company is the sole trustee. See Note 9 to Item 6
"Selected Consolidated Financial Data," and Note 15 to Consolidated Financial
Statements. Renaissance's headquarters and principal administrative, sales and
marketing, and system development operations are located in approximately
40,000 square feet of leased space in Lincoln, Massachusetts. Renaissance
occupies these premises under a lease expiring in August 1999.
 
  The Company also maintains offices and leases office space in the various
locations in which it maintains branch offices. The Registry believes that its
facilities are adequate for its current operations.
 
                                       8
<PAGE>
 
ITEM 3. LEGAL PROCEEDINGS
 
  On April 21, 1995, Ralph Kirkley Associates, Inc. ("Kirkley"), an IT
services provider, filed suit against The Registry in the District Court of
Travis County, Texas, 353rd Judicial District, alleging that The Registry
breached a mixed oral and written contract with Kirkley to enter into an
agreement to purchase substantially all of the assets comprising Kirkley's
business. Kirkley's complaint seeks a declaratory judgment that a valid
contract existed between Kirkley and The Registry to enter into a purchase and
sale agreement for Kirkley's assets, as well as actual damages of not less
than $500,000, recovery of lost profits, exemplary damages of three times all
actual damages awarded and attorney's fees and costs. The Registry has filed a
general denial of Kirkley's complaint and a counterclaim seeking return of the
$100,000 deposit paid to Kirkley's escrow agent and other legal and equitable
relief. No further actions have been taken with respect to this suit. On May
31, 1995, Kirkley filed a voluntary petition for bankruptcy under Chapter 11
in the United States Bankruptcy Court for the Western District of Texas.
Decision Consultants, Inc. ("DCI") filed a Chapter 11 Plan of Reorganization
dated May 12, 1997 providing for the purchase by DCI of Kirkley for
approximately two million dollars ($2,000,000) in cash, subject to certain
terms and conditions. Such Plan was approved by the United States Bankruptcy
Court for the Western District of Texas, Austin Division on July 1, 1997. In
the event DCI, Kirkley or the trustee in bankruptcy proceeds with the case,
The Registry intends to defend vigorously. The Registry does not believe that
the resolution of this matter will have a material adverse effect on its
business, financial condition or results of operations.
 
  From time to time, The Registry is involved in litigation relating to claims
arising out of its operations in the normal course of business. The Registry
believes that it is not currently involved in any legal proceedings the
resolution of which, individually or in the aggregate, would have a material
adverse effect on The Registry's business, financial condition or results of
operations.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
 
  None.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
 
  The Registry's common stock is traded on the Nasdaq National Market under
the symbol "REGI". The following table sets forth the high and low sales
prices of The Registry's common stock for the periods indicated:
 
<TABLE>
<CAPTION>
                                                                 HIGH    LOW
                                                                ------- ------
   <S>                                                          <C>     <C>
   FISCAL 1996
   June 5, 1996 through June 29, 1996.......................... $ 36.75 $17.00*
   FISCAL 1997
     First Quarter............................................. $ 34.25 $24.50
     Second Quarter............................................ $ 53.25 $34.50
     Third Quarter............................................. $ 49.75 $35.50
     Fourth Quarter............................................ $ 57.00 $34.75
   FISCAL 1998
     First Quarter through September 25, 1997.................. $54.375 $39.125
</TABLE>
--------
*  Initial offering price
 
  The stock market has from time to time experienced extreme price and volume
fluctuations. These broad market fluctuations may adversely affect the market
price of The Registry's common stock.
 
HOLDERS OF RECORD
 
  On September 25, 1997, there were approximately 99 holders of record of The
Registry's common stock.
 
                                       9
<PAGE>
 
DIVIDENDS
 
  America's Registry, Inc., a wholly-owned subsidiary of The Registry
("America's Registry") paid cash dividends in the approximate aggregate amount
of $862,000 to Mr. Conway in December 1995, of which amount $645,000 was
immediately used to repay certain indebtedness of Mr. Conway to the Company.
Shamrock Computer Resources, Ltd. ("SCR"), which was an S corporation prior to
its acquisition by The Registry, paid cash dividends of approximately $1.4
million in fiscal 1996 and $515,000 in fiscal 1997 to its former stockholders.
In fiscal 1997, $25,000 was distributed from the Realty Trust to the President
and Chief Executive Officer of The Registry.
 
  The Registry currently intends to retain future earnings, if any, to fund
the development and growth of its business and does not anticipate paying any
cash dividends on its common stock in the foreseeable future. In addition, The
Registry's revolving line of credit with BNY Financial Corporation prohibits
the payment of dividends without consent of the lender. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."
 
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA
 
  The following table contains certain selected consolidated financial data
and is derived from the more detailed Consolidated Financial Statements and
Notes thereto included elsewhere in this report. The Consolidated Balance
Sheet Data at June 24, 1995, June 29, 1996 and June 28, 1997 and the
Consolidated Statement of Income Data for the years ended May 31, 1994, June
24, 1995, June 29, 1996 and June 28, 1997 has been derived from the
Consolidated Financial Statements of The Registry that have been audited by
Price Waterhouse LLP, independent accountants, except as to the financial
statements of Application Resources, Inc. ("ARI") and SCR as of and for the
years ended December 31, 1994 and 1995, that have been audited by other
independent accountants. The Consolidated Balance Sheet Data as of May 31,
1993 and 1994 and the Consolidated Statement of Income Data for the year ended
May 31, 1993 has been derived from The Registry's audited Consolidated
Financial Statements, together with the unaudited financial statements of SCR
as of and for the year ended December 31, 1993. The Selected Consolidated
Financial Data does not include any amounts related to the results of
operations or financial position of Renaissance. See Note 18 to Consolidated
Financial Statements. The selected consolidated financial data should be read
in conjunction with "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and The Registry's Consolidated Financial
Statements and Notes thereto included elsewhere in this Report.
 
                                      10
<PAGE>
 
<TABLE>
<CAPTION>
                              MAY 31,
                          ----------------    JUNE 24,        JUNE 29,         JUNE 28,
                          1993(1)  1994(1)  1995(1)(2)(3) 1996(1)(3)(9)(10) 1997(1)(3)(10)
                          -------  -------  ------------- ----------------- --------------
<S>                       <C>      <C>      <C>           <C>               <C>
STATEMENT OF INCOME DA-
 TA:
Revenue.................  $47,890  $82,376    $153,985        $216,878         $324,766
Cost of revenue.........   36,770   63,100     114,641         158,742          235,869
                          -------  -------    --------        --------         --------
Gross profit............   11,120   19,276      39,344          58,136           88,897
Selling, general and
 administrative
 expenses...............    9,659   16,933      33,544          46,144           69,972(4)
                          -------  -------    --------        --------         --------
Income from operations..    1,461    2,343       5,800          11,992           18,925
Interest and other
 income (expense), net..     (290)    (452)     (1,133)         (2,233)           1,602(5)
                          -------  -------    --------        --------         --------
Income before taxes.....    1,171    1,891       4,667           9,759           20,527
Provision for income
 taxes..................      281      473         875           3,127            9,627
                          -------  -------    --------        --------         --------
Net income..............  $   890  $ 1,418    $  3,792        $  6,632         $ 10,900
                          =======  =======    ========        ========         ========
Distributions to
 stockholder (6)........  $   206  $   530    $    696        $  2,958         $    540
                          =======  =======    ========        ========         ========
Income before taxes.....  $ 1,171  $ 1,891    $  4,667        $  9,759         $ 20,527
Pro forma provision for
 income taxes (7).......      593      889       2,014           4,222           10,555
                          -------  -------    --------        --------         --------
Pro forma net income
 (7)....................  $   578  $ 1,002    $  2,653        $  5,537         $  9,972
                          =======  =======    ========        ========         ========
Pro forma net income per
 share (7)..............                      $   0.24        $   0.50         $   0.71
                                              ========        ========         ========
Weighted average common
 and common equivalent
 shares outstanding
 (8)....................                        10,968          11,083           14,143
                                              ========        ========         ========
BALANCE SHEET DATA:
Cash and cash
 equivalents............  $   109  $ 1,283    $  1,804        $ 13,707         $  5,933
Working capital.........      677    3,213       5,006          39,723           81,698
Total assets............   10,833   23,188      39,278          65,190          131,836
Total debt..............    6,147    9,424      20,736           4,958            4,254
Stockholders' equity....    2,424    5,669       8,302          44,389          106,822
</TABLE>
--------
(1) Upon consummation of the acquisitions of ARI and SCR, ARI and SCR's
    December 31 year ends were conformed to The Registry's last Saturday in
    June year end for fiscal 1996. The Statement of Income and Balance Sheet
    Data above gives effect to the acquisitions by combining the results of
    operations and financial position of The Registry as of and for the year
    ended June 29, 1996 and June 28, 1997 with the results of operations and
    financial position of ARI and SCR as of and for the same periods. The
    Statement of Income and Balance Sheet Data also gives effect to the
    acquisitions by combining the results of operations and financial position
    of The Registry as of and for the years ended May 31, 1993, May 31, 1994
    and June 24, 1995 with the results of operations of ARI as of and for the
    three months ended December 31, 1994 and the year ended December 31, 1995,
    and with the results of operations and financial position of SCR as of and
    for the years ended December 31, 1993, December 31, 1994 and December 31,
    1995, respectively, on a pooling-of-interests basis. ARI commenced
    operations as a separate entity on October 1, 1994.
(2) The Registry changed its fiscal year end from May 31 to the last Saturday
    in June, effective with the fiscal year ended June 24, 1995. Accordingly,
    the June 1994 results are not included in the data presented above. See
    Note 2 to Consolidated Financial Statements.
(3) Statement of Income Data for the years ended June 24, 1995, June 29, 1996
    and June 28, 1997 are for 52, 53 and 52 weeks, respectively.
 
                                      11
<PAGE>
 
(4) In November 1996, The Registry completed the acquisitions of ARI and SCR,
    each of which has been accounted for as a pooling-of-interests.
    Transaction and other related costs have been expensed as incurred and
    totaled approximately $4.7 million in the year ended June 28, 1997.
(5) In August 1996, ARI received a settlement of $1.6 million from its
    insurance company for payment of defense costs and related expenses
    associated with certain litigation. This amount, less related expenses,
    has been included in interest and other income (expense), net, in the
    Statement of Income Data above.
(6) For the year ended June 29, 1996 includes $649,000 distributed by the
    Realty Trust to Mr. Conway upon refinancing of the Realty Trust's
    mortgage. See Note 9 below. For the year ended June 29, 1996, also
    includes $861,500 distributed to Mr. Conway in respect of the common stock
    of America's Registry. For the years ended May 31, 1993, May 31, 1994,
    June 24, 1995, June 29, 1996 and June 28, 1997, respectively, also
    includes $156,000, $530,000, $696,000, $1,447,000 and $515,000 in
    distributions from SCR to its former stockholders.
(7) On January 1, 1996, pursuant to a plan and agreement of merger entered
    into among The Registry, America's Registry and The Registry Newco, Inc.,
    a wholly-owned subsidiary of The Registry, The Registry Newco, Inc. merged
    with and into America's Registry (the "Reorganization"). In addition,
    effective November 26, 1996, the S corporation status of SCR was
    terminated in connection with the acquisition of SCR by The Registry. The
    pro forma data have been computed as if America's Registry and SCR, which
    were S corporations for federal and state income tax purposes since
    inception of their operations, were subject to federal and state corporate
    income taxes since inception based on the statutory tax rates and the tax
    laws then in effect. See Notes 2, 9 and 16 to Consolidated Financial
    Statements.
(8) Weighted average common and common equivalent shares outstanding consist
    of the weighted average number of shares of Common Stock outstanding,
    after giving effect to the Reorganization, Common Stock which may be
    issuable upon exercise of outstanding stock options using the treasury
    stock method and Common Stock issuable upon conversion of shares of
    preferred stock. For the year ended June 24, 1995 weighted average common
    and common equivalent shares also include 397,588 shares related to the
    dilution attributable to options granted in the twelve months prior to the
    closing of The Registry's initial public offering in June 1996 using the
    treasury stock method.
(9) In conjunction with the renegotiation of The Registry's lease with the
    Realty Trust, the accounts of the Realty Trust have been consolidated with
    those of The Registry, commencing September 19, 1995. See Note 15 to
    Consolidated Financial Statements.
(10) The Registry completed its initial public offering on June 10, 1996,
     selling 2,230,000 shares of Common Stock and receiving net proceeds of
     $34.5 million. The Registry used a portion of the proceeds to repay all
     outstanding indebtedness under The Registry's credit facility and certain
     term loans. The Registry completed a follow-on public offering on
     February 26, 1997, selling 1,234,166 shares of Registry Common Stock and
     receiving net proceeds of $48.3 million. The Registry used a portion of
     the proceeds from this offering to repay all outstanding indebtedness
     under The Registry's credit facility. See Note 10 to Consolidated
     Financial Statements.
 
                                      12
<PAGE>
 
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
 
OVERVIEW
 
  The Registry, Inc. provides information technology (IT) consultants on a
contract basis to organizations with complex IT operations. The Registry's
revenue is principally derived from supplemental IT staffing services and, to
a lesser extent, from management consulting services provided through its
specialized practices. The Registry's IT consultants, billed primarily on an
hourly basis, typically work on engagements lasting from six to twelve months
under the direction of the client. The Registry has grown from six offices and
$19.4 million of revenue in fiscal 1991 to 37 offices and $324.8 million of
revenue in fiscal 1997.
 
  Revenue growth is derived primarily from increases in the number of IT
consultants placed with existing clients and the addition of new clients. In
recent years, The Registry has also been able to increase the average billing
rates for its IT consultants as economic conditions have improved and the
demand for skilled and experienced professionals has increased. Revenue is
recognized as services are provided and clients are billed on a weekly or
monthly basis. In fiscal 1997, approximately 32% of The Registry's revenue was
derived from its top 10 clients, with no client accounting for more than 5%.
 
  At June 28, 1997, salaried IT consultants comprised 26% of the total number
of IT consultants employed by The Registry, a significant increase over fiscal
1996. The gross profit margins achieved by salaried IT consultants are
generally higher than those experienced by hourly IT consultants, however
gross margins are subject to greater variability from period to period as The
Registry continues to pay its salaried IT consultants during periods in which
they are not working on projects and generating revenue.
 
  Because The Registry only derives revenue when its consultants are actually
working, its operating results are adversely affected when client facilities
are closed due to holidays or inclement weather. In particular, The Registry
experiences a certain amount of seasonality in its second fiscal quarter
because of the number of holidays falling in such quarter. In addition, The
Registry generally experiences lower operating margins in its third fiscal
quarter due in part to the timing of unemployment tax accruals.
 
  Beginning in fiscal 1996, The Registry implemented tighter cost controls and
a compensation program based on operating profitability rather than revenue
growth. Further, The Registry has sought to improve profitability by
increasing the number of full-time, salaried staff consultants, who generally
produce higher margins than The Registry's hourly IT consultants. Apart from
its core IT professional services and in response to market opportunities, The
Registry has introduced additional service offerings, including the Network
Systems Consulting Practice (NSCP), the Enhanced Technical Communications
Practice and the Help Desk Practice. In November 1996, The Registry acquired
Sterling Information Group, Inc. which forms the basis for The Registry's
Application Development Practice. Since June 28, 1997, The Registry has
completed an additional four acquisitions expanding The Registry's service
offerings to include management and strategic consulting services. See
Subsequent Events--Acquisitions.
 
  Through December 31, 1995, America's Registry, and through November 26,
1996, SCR, were S corporations for federal and state income tax purposes and,
accordingly, was not subject to corporate income taxes. As a result, The
Registry believes that direct comparisons of historical provisions for income
taxes are not meaningful.
 
  In conjunction with the renegotiation of The Registry's leases with the
Realty Trust, the accounts of the Realty Trust have been consolidated with
those of The Registry, commencing September 19, 1995. The effect of this
consolidation was to increase fixed assets by approximately $1.7 million and
long-term debt by approximately $2.1 million at June 28, 1997. The
consolidation of the Realty Trust
 
                                      13
<PAGE>
 
did not have a significant effect on The Registry's results of operations, nor
is it expected to have a significant effect in the future. See Note 15 to
Consolidated Financial Statements.
 
RECENT ACQUISITIONS
 
  During fiscal 1997, The Registry completed seven acquisitions. Six of the
acquired companies--Morris Information Systems, Inc. ("MIS"), based in
Houston, Texas; Sun-Tek Consultants, Inc. ("Sun-Tek"), based in Orlando,
Florida; Application Resources, Inc., based in San Francisco, California;
Shamrock Computer Resources, Ltd., based in Bloomington, Minnesota; James
Duncan & Associates ("JDA"), based in Royal Tunbridge Wells, England; and
Connexus Consulting Group, Inc. ("Connexus"), based in Andover,
Massachusetts--provide information technology or management consulting
services similar to those of The Registry. One of the acquisitions--Sterling
Information Group, Inc. ("Sterling"), based in Austin, Texas--is an
independent provider of outsourced software application development services.
 
  The ARI and SCR acquisitions, in which an aggregate of 2,350,774 shares of
Registry Common Stock were issued, and $2.0 million in cash was used to
repurchase shares of capital stock from a stockholder of SCR who exercised
dissenter's rights, have been accounted for as poolings-of-interests.
Accordingly, The Registry's financial statements have been restated to reflect
those acquisitions on a historical basis. In connection with these
transactions, The Registry incurred transaction and integration costs of $4.7
million during the fiscal year ended June 28, 1997.
 
  In connection with the MIS, Sun-Tek, Sterling, JDA and Connexus
acquisitions, The Registry paid an aggregate of $16.8 million in cash, issued
2,736 shares of Registry Common Stock and agreed to pay $129,000 in deferred
consideration. In addition, The Registry may become obligated to pay up to
$1.2 million in contingent cash consideration. These acquisitions have been
accounted for as purchases and, accordingly, the purchase price has been
allocated to the assets acquired and liabilities assumed based upon their
estimated fair values as of the respective dates of acquisition. The excess of
the consideration paid over the estimated fair value of net assets acquired
has been recorded as goodwill. The results of operations for these
acquisitions have been included in The Registry's results from the respective
dates of acquisition.
 
FISCAL YEARS ENDED JUNE 28, 1997 AND JUNE 29, 1996
 
  Revenue. Revenue increased 49.7% to $324.8 million for fiscal 1997 from
$216.9 million in fiscal 1996. This increase was attributable primarily to an
increase in revenue from professional services and to a lesser extent from
additional service offerings provided by The Registry's practices. The
increase in revenue from professional services was primarily due to the growth
in sales within existing offices, the continued maturation of newer branch
offices, and the addition of new branches resulting from acquisitions
accounted for as purchases completed during the year resulting in a greater
number of IT consultants placed with The Registry's clients during the period.
To a lesser extent, the increase in revenue resulted from an increase in
average hourly billing rates charged for The Registry's IT consultants.
 
  Gross Profit. Gross profit increased 52.9% to $88.9 million for fiscal 1997
from $58.1 million for fiscal 1996. As a percentage of revenue, gross profit
increased to 27.4% in fiscal 1997 compared to 26.8% for the comparable prior
period. This increase was attributable primarily to increases in the number of
relatively higher margin projects and specialized practice engagements and the
increased utilization of the salaried consultants as compared with the prior
period. This increase was mitigated slightly by the addition of the relatively
lower margin sales of The Registry's European subsidiary, James Duncan and
Associates, acquired at the end of the second quarter of fiscal 1997.
 
                                      14
<PAGE>
 
  Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by 41.4% to $65.2 million, excluding one-
time acquisition-related expenses of $4.7 million for fiscal 1997 from $46.1
million in the comparable prior period. As a percentage of revenue, selling,
general and administrative expenses decreased to 20.1% for the period,
excluding these one-time charges, compared to 21.3% for the comparable prior
period. This decrease was attributable primarily to the growth in revenue
during a period in which, other than through acquisition, there was limited
branch expansion.
 
  Interest and Other Income(Expense), Net. Interest and other income
(expense), net, changed by $3.8 million to $1.6 million of income in fiscal
1997 from $2.2 million of expense in the comparable prior period. This
increase is attributable to the receipt by ARI of approximately $1.5 million
in net proceeds from the settlement of certain litigation during fiscal 1997.
In addition, amounts outstanding under The Registry's line of credit were
reduced upon receipt of the proceeds from The Registry's initial public
offering in June of 1996 and from its offering in February 1997. During 1996,
The Registry incurred interest expense on amounts outstanding under The
Registry's line of credit and other debt facilities.
 
FISCAL YEARS ENDED JUNE 29, 1996 AND JUNE 24, 1995
 
  Revenue. Revenue increased 40.8% to $216.9 million for fiscal 1996 from
$154.0 million in fiscal 1995. This increase was attributable primarily to an
increase in revenue from professional services and to a lesser extent from
additional service offerings provided by The Registry's practices. The
increase in revenue from professional services was primarily due to the growth
in sales within existing offices and the continued maturation of newer branch
offices resulting in a greater number of IT consultants placed with The
Registry's clients during the period. To a lesser extent, the increase in
revenue resulted from an increase in average hourly billing rates charged for
The Registry's IT consultants.
 
  Gross Profit. Gross profit increased 47.8% to $58.1 million for fiscal 1996
from $39.3 million for fiscal 1995. As a percentage of revenue, gross profit
increased to 26.8% in fiscal 1996 compared to 25.6% for the comparable prior
period. This increase was attributable primarily to a higher average hourly
billing rate charged for The Registry's IT consultants during this period. In
addition, the increase in gross profit as a percentage of revenue was
favorably impacted by the increased utilization of staff IT consultants and by
the growth in relatively higher margin new service offerings.
 
  Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased by 37.6% to $46.1 million for fiscal 1996
from $33.5 million in the comparable prior period. As a percentage of revenue,
selling, general and administrative expenses decreased to 21.3% for the period
compared to 21.8% for the comparable prior period. This decrease was
attributable primarily to the growth in revenue during a period in which there
was limited expansion into new markets. This decrease was offset in part by
additional investment in both corporate and branch staff at SCR and ARI.
 
  Interest and Other Income (Expense), Net. Interest and other income
(expense), net, increased to $(2.2) million during fiscal 1996 as compared to
$(1.1) million in the comparable prior period. This change was attributable
primarily to the increased borrowings under The Registry's line of credit
resulting from the increase in working capital requirements associated with
The Registry's sales growth.
 
QUARTERLY RESULTS
 
  The following table sets forth certain unaudited quarterly operating
information for each of the eight quarters ending with the quarter ended June
28, 1997, in thousands of dollars and as a percentage of revenue. This data
has been prepared on the same basis as the audited financial statements and in
the opinion of management, includes all adjustments, consisting only of normal
 
                                      15
<PAGE>
 
recurring adjustments, necessary for the fair presentation of the information
for the periods presented, when read in conjunction with The Registry's
Consolidated Financial Statements and related Notes thereto. Results for any
previous fiscal quarter are not necessarily indicative of results for the full
year or for any future quarter.
 
<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED
                          ---------------------------------------------------------------------------------------------
                          SEPT. 1995 DEC. 1995 MARCH 1996(1) JUNE 1996 SEPT. 1996 DEC. 1996(2)(3) MARCH  1997 JUNE 1997
                          ---------- --------- ------------- --------- ---------- --------------- ----------- ---------
                                                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                       <C>        <C>       <C>           <C>       <C>        <C>             <C>         <C>
STATEMENT OF INCOME
 DATA:
Revenue.................   $46,341    $48,191     $57,296     $65,050   $69,429       $75,091       $86,518    $93,728
Gross profit............    12,019     13,119      15,256      17,742    19,083        20,995        23,289     25,530
Income from operations..     2,560      2,598       2,910       3,924     4,739           576         6,399      7,211
Net income (loss).......     1,717      1,858         979       2,078     3,882        (1,207)        3,639      4,586
Pro forma net income
 (loss).................     1,166      1,222       1,340       1,809     3,521        (1,774)        3,639      4,586
Pro forma net income
 (loss) per share.......   $  0.11    $  0.11     $  0.12     $  0.16   $  0.26       $ (0.14)      $  0.26    $  0.30
AS A PERCENTAGE OF
 REVENUE:
Revenue.................     100.0%     100.0%      100.0%      100.0%    100.0%       100.0 %        100.0%     100.0%
Gross profit............      25.9%      27.2%       26.6%       27.3%     27.5%        28.0 %         26.9%      27.2%
Income from operations..       5.5%       5.4%        5.1%        6.0%      6.8%         0.8 %          7.4%       7.7%
Net income (loss).......       3.7%       3.9%        1.7%        3.2%      5.6%        (1.6)%          4.2%       4.9%
Pro forma net income
 (loss).................       2.5%       2.5%        2.3%        2.8%      5.1%        (2.4)%          4.2%       4.9%
</TABLE>
--------
(1) Includes a $642,000 charge associated with the conversion of America's
    Registry from an S corporation to a C corporation. See Note 9 to
    Consolidated Financial Statements.
(2) In November 1996, The Registry completed the acquisitions of ARI and SCR,
    each of which has been accounted for as a pooling-of-interests.
    Transaction and integration costs have been expensed as incurred and
    totaled $4.9 million in the quarter.
(3) Includes a $403,000 credit associated with the conversion of SCR from an S
    corporation to a C corporation. See Note 9 to Consolidated Financial
    Statements.
 
  The above quarterly data reflects the results of operations for 13 weeks,
except for the September 1995 quarter which includes 14 weeks. The March 1996
and 1997 revenue reflects in some part the seasonality of the business and the
impact of the additional employment taxes on profitability.
 
  During the October to December quarter, the number of holidays and vacation
days marginally reduces revenue. Some clients also close operations completely
during the last week of the year. The Registry also experiences a lower
operating profit margin in its third fiscal quarter, the January to March
quarter, in part as a result of higher unemployment tax accruals and, to a
lesser extent, FICA taxes which are expensed as incurred. During this quarter,
the unemployment tax, which is based on the first $7,000-$20,000 of wages for
each employee, depending on the state, is significantly higher than other
quarters.
 
LIQUIDITY AND CAPITAL RESOURCES
 
  On February 26, 1997, The Registry completed a public offering in which it
sold 1,234,166 shares of Registry Common Stock. The Registry received $48.3
million from the sale of the shares, net of the underwriting discount and
expenses associated with the offering. Net proceeds were used to repay all
outstanding indebtedness under The Registry's credit facility, approximately
$18.2 million. Approximately $2.5 million was used to finance the upgrade of
The Registry's IT infrastructure. The Registry intends to use the remaining
net proceeds for working capital and general corporate purposes. A portion of
the net proceeds may also be used for acquisitions of businesses that are
complementary to that of The Registry.
 
                                      16
<PAGE>
 
  As of February 29, 1996, The Registry entered into a $25 million revolving
advance facility with BNY Financial Corporation (the "Line of Credit"). This
facility allows The Registry to borrow the lesser of $25 million or 85% of
eligible receivables. The Line of Credit is secured by all of The Registry's
assets and contains certain restrictive covenants, including limitations on
amounts of loans The Registry may extend to officers and employees, the
incurrence of additional debt and the payment of dividends on The Registry's
common or preferred stock. Additionally, the agreement requires the
maintenance of certain financial ratios, including minimum tangible net worth
and a limit on the ratio of total liabilities to total tangible net worth. The
Registry was on June 28, 1997 and is currently in compliance with these
financial covenants.
 
  As of June 28, 1997, there was no amount outstanding under the Line of
Credit with availability of $25 million. The Line of Credit bears an interest
rate of LIBOR plus 2.5% or the Bank of New York alternate base rate plus 0.5%
at The Registry's option. In addition to cash and cash equivalents, at June
28, 1997, The Registry had invested $17.8 million in various municipal and
federal bonds bearing interest at a weighted average rate of 4.65%.
 
  In June 1997, The Registry entered into a line of credit agreement with a
foreign bank to provide an overdraft facility of 1,400,000 British Sterling to
the James Duncan subsidiary. This facility matures on January 31, 1998 and is
secured by a $2,000,000 standby letter of credit from a U.S. bank. There is
$1,485,000 drawn on this facility as of June 28, 1997.
 
  The Registry had negative cash flows from operations of $13.8 million for
the fiscal year ended June 28, 1997. The negative operating cash flows during
this period reflected a $27.6 million increase in net accounts receivable
during the period. This increase was attributable primarily to increased
revenues, however, The Registry also experienced a shift in certain clients'
invoicing requirements resulting in additional clients being invoiced on a
monthly basis as opposed to their previous weekly basis. The Registry's
operating cash flows and working capital requirements are significantly
affected by the timing of the payment of payroll and the receipt of payment
from the customer. The Registry pays its employees on either a weekly or bi-
weekly basis. Additionally, cash flows from operations were impacted by
fluctuations in accrual and payable balances between the periods and changes
in deferred taxes in the period.
 
  The Registry had negative cash flows from investing activities of $41.2
million for the fiscal year ended June 28, 1997. The primary use of cash for
investing activities in the fiscal year was $16.5 million for acquisitions
completed in this period and the investment of $17.8 million in marketable
securities in the last four months of the period related to the receipt of
proceeds from The Registry Common Stock offering. Capital expenditures totaled
$5.2 million for the fiscal year and were related primarily to the upgrade of
The Registry's IT infrastructure.
 
  The Registry had cash provided by financing activities of $47.2 million for
the fiscal year ended June 28, 1997. Historically, The Registry has funded its
capital requirements with borrowings against its Line of Credit and term loans
with a leasing company. In June 1996, The Registry completed its initial
public offering for the sale of 2,230,000 shares of Registry Common Stock from
which it received $34.5 million in proceeds, net of the underwriting discounts
and expenses associated with the offering. Net proceeds were used to repay all
outstanding indebtedness under The Registry's Line of Credit and certain term
loans. In February, 1997, The Registry completed a public offering for the
sale of 1,234,166 shares of Registry Common Stock for which it received $48.3
million in proceeds, net of the underwriting discounts and expenses associated
with the offering. In November of 1996, an additional $2.6 million in proceeds
from the sale of ARI stock was received. Proceeds from these offerings were
used to repay amounts outstanding under The Registry's line of credit and to
fund acquisitions made and working capital requirements.
 
                                      17
<PAGE>
 
  The Registry anticipates that its primary uses of working capital in future
periods will be for funding growth, either through acquisitions, the internal
development of existing branch offices or the development of new branch
offices and new service offerings. The Registry also anticipates making
approximately $5.0 million in capital expenditures in the next twelve months
principally to upgrade its computer system. In connection with certain of its
acquisitions, The Registry may be obligated to make certain contingent
payments during the next several years. The Registry does not believe that
such payments would have a material impact on The Registry's liquidity,
results of operations or capital requirements. The Registry's principal
capital requirement is working capital to support the accounts receivable
associated with its revenue growth. The Registry believes that the remaining
proceeds from the February 1997 public offering, together with cash flow from
operations and borrowings under the Line of Credit, will be sufficient to meet
The Registry's presently anticipated working capital needs for at least the
next 12 months.
 
  Foreign currency fluctuations and inflation did not have a significant
impact on The Registry in fiscal 1997 or any other period presented.
 
SUBSEQUENT EVENTS--ACQUISITIONS
 
 Merger with Renaissance Solutions, Inc.
 
  On July 31, 1997, pursuant to an Agreement and plan of Merger dated May 19,
1997, The Registry, through a wholly-owned subsidiary, acquired Renaissance
Solutions, Inc., a Delaware corporation. Renaissance provides management
consulting and client/server systems integration services, primarily for large
corporations. Pursuant to the agreement, each outstanding share of Renaissance
capital stock was converted into the right to receive 0.80 shares of The
Registry's common stock. The Registry also assumed outstanding options for the
purchase of Renaissance common stock at the same conversion ratio. Immediately
prior to the acquisition, there were 9,573,204 shares of Renaissance common
stock and options to purchase 1,364,895 shares of Renaissance common stock
outstanding.
 
  This transaction will be accounted for as a pooling-of-interests.
Accordingly, beginning with the Company's financial results for the quarter
ended September 27, 1997, the Company's financial statements will be restated
to reflect this acquisition on a historical basis.
 
  Historically, Renaissance's fiscal year ended with the calendar year end
and, accordingly, the results of operations for the year ended December 31,
1995 and December 31, 1996 will be combined with the results of operations for
The Registry's fiscal years ended June 24, 1995 and June 29, 1996. In order to
conform Renaissance's year end to TRI's fiscal year end, the consolidated
statement of income for fiscal 1997 will include six months (July to December
1996) for Renaissance which will also be included in the consolidated
statement of income for the fiscal year ended June 29, 1996. An adjustment
will be made to retained earnings in fiscal 1997 to eliminate the duplication
of net income of Renaissance for such six month period.
 
  No material adjustments to net assets or results of operations will be
necessary to conform the accounting practices of Renaissance to those of The
Registry. Certain reclassifications will be made to the financial statements
of Renaissance to conform to The Registry's classifications.
 
  Renaissance has experienced significant growth over the past several years
both organically and through acquisition. Renaissance's engagements are
primarily fixed price in nature and are of generally higher risk than The
Registry's time and materials business. The gross profit margins achieved on
Renaissance engagements are generally higher than those experienced by The
Registry due both to this increased risk and due to the fact that
Renaissance's consultant staff are employed on a full-time basis as compared
with The Registry's blend of contract and full time employees.
 
                                      18
<PAGE>
 
Renaissance's business is subject to greater variability in its gross profit
margin from period to period as Renaissance must continue to pay its employees
during periods which they are not working on projects and generating revenue.
 
  The Registry believes that, on a combined basis, it may be able to achieve a
nominally higher gross profit and operating income percentage than it has
historically reported, due to the addition of Renaissance, however, the
Registry will incur a significant amount of expenses over fiscal 1998 to
complete the integration of this merger. See Note 18 to Consolidated Financial
Statements.
 
 McClain Group, Inc.
 
  On July 16, 1997, The Registry, through a wholly-owned subsidiary, acquired
all of the outstanding stock of the McClain Group, Inc., a Virginia
corporation ("McClain"), for $15.4 million in cash. McClain is an information
technology management consulting firm based in Richmond, Virginia. McClain
will enhance The Registry's IT consulting and project management services and
will operate under Renaissance. The acquisition will be accounted for as a
purchase, and accordingly, the purchase price will be allocated to the assets
acquired and liabilities assumed based upon their estimated fair values as of
the date of acquisition. The excess of consideration paid over the estimated
fair value of net assets acquired will be recorded as goodwill and amortized
on a straight line basis over 30 years.
 
 Technomics Consultants International, Inc.
 
  On July 25, 1997, Renaissance, through a wholly-owned subsidiary, acquired
all of the outstanding stock of Technomics Consultants International Inc., an
Illinois corporation ("Technomics"), for $2.0 million in cash and up to $5.2
million in contingent consideration. Technomics is a management consulting
firm based in Chicago, Illinois with offices in London, England; Hong Kong;
Bombay, India; Tokyo, Japan; Ho Chi Minh City, Vietnam; Shanghai, PRC and
Singapore. The acquisition will be accounted for as a purchase, and
accordingly, the purchase price will be allocated to the assets acquired and
liabilities assumed based upon their estimated fair values as of the date of
acquisition. The excess of consideration paid over the estimated fair value of
net assets acquired will be recorded as goodwill and amortized on a straight
line basis over 30 years.
 
 Eligibility Management Systems, Inc.
 
  On August 27, 1997, The Registry, through a wholly-owned subsidiary,
acquired all of the outstanding stock of Eligibility Management Systems, Inc.,
a Florida corporation ("EMS"), for $17 million in cash, of which $15 million
was payable at the time of closing and $2.0 million is payable over the next
two years. An additional $4.0 million in consideration may be payable subject
to certain earnout arrangements. EMS is a management consulting firm currently
working on significant engagements located in Indianapolis, Indiana; Austin,
Texas; Denver, Colorado; Olympia, Washington; and Sacramento and Los Angeles,
California. The acquisition will be accounted for as a purchase, and
accordingly, the purchase price will be allocated to the assets acquired and
liabilities assumed based upon their estimated fair values as of the date of
acquisition. The excess of consideration paid over the estimated fair value of
net assets acquired will be recorded as goodwill and amortized on a straight
line basis over 30 years.
 
RECENTLY ENACTED ACCOUNTING STANDARDS
 
  In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). SFAS 128 specifies modifications to the calculation of earnings
per share from that currently used by The Registry. Under
 
                                      19
<PAGE>
 
SFAS 128, "basic earnings per share" will be calculated based upon the
weighted average number of common shares actually outstanding, and "diluted
earnings per share" will be calculated based upon the weighted average number
of common shares, common equivalent shares, and other convertible securities
outstanding. SFAS 128 is effective in The Registry's second quarter of fiscal
1998 and will be adopted at that time with retroactive restatement of all
previously reported amounts. Had The Registry been following the provisions of
SFAS 128 historically, the following pro forma amounts would have been
reported for basic earnings per share:
 
<TABLE>
<CAPTION>
                                      YEARS ENDED
            ----------------------------------------------------------------------------
            JUNE 24, 1995              JUNE 29, 1996                       JUNE 28, 1997
            -------------              -------------                       -------------
            <S>                        <C>                                 <C>
                $0.26                      $0.53                               $0.76
</TABLE>
 
  Diluted earnings per share, computed under the provisions of SFAS 128, would
not have differed materially from the pro forma net income per share amounts
previously reported by The Registry. The adoption of SFAS 128 will have no
effect on The Registry's financial position or cash flows.
 
  In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS 130"). This statement
establishes standards for the reporting of comprehensive income in a company's
full set of financial statements, and is effective for fiscal years beginning
after December 15, 1997.
 
  Comprehensive income is defined in SFAS 130 as the change in equity (net
assets) of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources. Comprehensive income reported
by an entity will disclose both net income and other comprehensive income.
Classifications within other comprehensive income could include foreign
currency items, minimum pension liability adjustments, and unrealized gains
and losses on certain investments in debt and equity securities. SFAS 130 will
affect The Registry's reporting of unrealized gains and losses on marketable
securities, as well as the reporting of translation adjustments resulting from
certain investments in foreign subsidiaries. Such disclosures of comprehensive
income will be in addition to existing reporting of net income. The Registry
will adopt this statement as required.
 
  In June 1997, the FASB issues Statement of Financial Accounting Standards
No. 131 "Disclosures about Segments of an Enterprise and Related Information",
("SFAS 131"). SFAS 131 is effective for fiscal years beginning after December
15, 1997 and requires restatement of disclosures for all periods presented.
 
  SFAS 131 requires that companies disclose information about operating
segments in annual and interim financial statements. SFAS 131 utilizes the
"management approach" in determining what constitutes an operating segment. An
operating segment is defined in SFAS 131 as a business component:
 
  .  which engages in business activities from which it may earn revenues and
     incur expenses;
 
  .  whose operating results are regularly reviewed by a chief operating
     decision maker to make decisions about resources to be allocated to the
     segment and assess its performance; and
 
  .  for which discrete financial information is available.
 
  SFAS 131 requires that a Company disclose information about operating
segments that meet any of the following thresholds:
 
  .  its reported revenue, including both customer and intersegment sales, is
     greater than or equal to 10% of combined revenue,
 
  .  the absolute amount of its reported profit or loss is greater than 10%
     or more of the absolute amount, of (1) the combined reported profit of
     all segments that did not report a loss or (2) the combined reported
     losses of all segments that did report a loss,
 
                                      20
<PAGE>
 
  .  its assets are greater than or equal to 10% or more of combined assets
     of all operating segments.
 
  The adoption of SFAS 131 will not impact The Registry's financial position,
results of operations or cash flows. Management is currently assessing which
operating segments of the Company will require disclosure, and the Company
will adopt the statement as required.
 
RISK FACTORS
 
  Dependence on Availability of Qualified IT Consultants. Substantially all of
The Registry's revenue is derived from providing IT consultants on a contract
basis. The Registry's success depends upon its ability to continue to attract
and retain IT consultants who possess the technical skills and experience
required to meet the staffing needs of its clients. The Registry must
continually update and add to its database of technical personnel in each
market in which it operates. The vast majority of the IT consultants in The
Registry's database are also included in one or more of the databases of The
Registry's competitors, and there can be no assurance that experienced
professionals currently working on projects for The Registry will not choose
to work on projects for competitors on their next assignment. Competition for
IT consultants is intense and demand for their services has, to date,
substantially exceeded their supply, and The Registry expects such competition
will continue to increase. There can be no assurance that qualified technical
personnel will continue to be available to The Registry in sufficient numbers,
and any failure to attract or retain qualified IT consultants in sufficient
numbers could have a material adverse effect on The Registry's business,
operating results and financial condition.
 
  Ability to Sustain and Manage Growth; Development of Additional
Services. The Registry's business has grown rapidly during the past four years
due to the increased number of branch offices and the increased demand for
services from existing clients. The Registry's continued growth is dependent
upon a number of factors, including: (i) the successful performance of new and
recently-opened offices; (ii) the continued identification and training of
corporate personnel to staff new and recently-opened branch offices; (iii) the
ability to identify and qualify IT consultants within both new and existing
markets; and (iv) The Registry's ability to develop additional business from
existing clients and to obtain new clients. There can be no assurance that
recently-opened offices will reach or maintain any level of profitability or
that The Registry's historical revenue growth will continue. Further, The
Registry's rapid growth and expansion has placed and could continue to place a
significant strain on The Registry's personnel and resources, and the failure
to manage growth effectively could have a material adverse effect on The
Registry's business, operating results and financial condition. In addition,
The Registry's ability to develop successful additional practices depends on
various factors, including identification of suitable practice areas in which
to invest resources and The Registry's ability to effectively integrate such
practices into its overall operating structure. There can be no assurance that
any additional practice developed by The Registry will perform according to
management's expectations. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations".
 
  Risks Associated with Acquisitions. The Registry has grown, and intends to
continue to grow, in part through the acquisition of other businesses. The
Registry's ability to expand through acquisition depends on many factors,
including the successful identification and acquisition of businesses and
management's ability to effectively integrate and operate the new businesses.
There is competition for acquisition opportunities in the industry, which may
intensify due to consolidation in the industry and increasing the costs of
capitalizing on such opportunities. The Registry competes for acquisition
opportunities with other companies that have significantly greater financial
and management resources than The Registry. Further, the anticipated benefits
from any acquisitions may not be achieved unless the operations of the
acquired business are successfully combined with those of The Registry in a
timely manner. The integration of The Registry's acquisitions requires
substantial attention from management, and any difficulties encountered in the
transition process, could have a material adverse effect on The Registry's
business, operating results and financial condition. In addition, the process
of integrating the various businesses could cause the interruption of or the
loss
 
                                      21
<PAGE>
 
of momentum in the activities of some or all of these businesses, which could
have a material adverse effect on The Registry's business, operating results
and financial condition. Further, acquired businesses may experience employee
turnover rates higher than have been experienced historically. Higher employee
turnover rates could adversely impact The Registry's efforts to integrate
these businesses. There can be no assurance that The Registry will be able to
identify suitable acquisition candidates on reasonable terms or integrate
acquired businesses successfully. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Liquidity and Capital
Resources"
 
  Dependence on Key Clients; Price Reduction Agreements; Terminability of
Client Arrangements. The Registry's top ten clients accounted for
approximately 35% of revenue in fiscal 1996 and approximately 32% of revenue
in fiscal 1997. The loss of a significant client could have a material adverse
effect on The Registry's business, operating results and financial condition.
The Registry provides certain large clients with reduced prices for its
services in order to retain the volume of business and/or to obtain a
preferred vendor status with such clients. There can be no assurance that The
Registry will be able to maintain desired pricing levels with these or other
clients. All of The Registry's arrangements with clients are terminable by the
client at will and without any penalty. There can be no assurance that
existing clients will continue to engage The Registry's services at historical
levels, if at all. In accordance with industry practice, nearly all of
Renaissance's contracts are terminable by either the customer or Renaissance
on short or no notice and without penalty. An unanticipated termination of a
major project could have a material adverse effect on the Company's business,
operating results and financial condition.
 
  Risk of International Operations. The success of The Registry's
international operations will depend greatly upon the continued development of
the technology infrastructure in Europe and The Registry's ability to manage
generally lower gross profit margins associated with European IT consulting
operations. There can be no assurance that The Registry's international
operations will be profitable or support The Registry's growth strategy. The
risks inherent in The Registry's international business activities include
unexpected changes in regulatory environments, foreign currency fluctuations,
tariffs and other trade barriers, difficulties in managing international
operations and potential foreign tax consequences, including repatriation of
earnings and the burden of complying with a wide variety of foreign laws and
regulations. The failure of The Registry to manager growth, attract and retain
personnel, manage major development efforts or profitable deliver services
could have a material adverse impact on The Registry's ability to successfully
develop its international operations and could have a material adverse effect
on The Registry's business, operating results and financial condition.
 
  Dependence on Key Personnel. The Registry depends to a significant extent on
key management, technical and other personnel. The Registry's continued growth
and success will depend in significant part on the continued service of its
founder, President and Chief Executive Officer, Mr. G. Drew Conway. The loss
of Mr. Conway or other key employees could have a material adverse effect on
The Registry's business, operating results and financial condition. The
Registry maintains a split dollar key man life insurance policy on Mr. Conway.
 
  Concentration of Ownership. As of September 17, 1997, The Registry's
President, Chief Executive Officer and principal stockholder, G. Drew Conway,
owns approximately 32% of the outstanding Registry Common Stock. As a result,
Mr. Conway is able to have a significant impact on matters requiring
stockholder approval. This concentration of ownership could have the effect of
making it difficult for a third party to acquire control of The Registry and
may discourage third parties from attempting to do so. Further, future sales
of substantial amounts of Common Stock by Mr. Conway, or the potential for
such sales, could adversely affect the prevailing market price of the Common
Stock.
 
                                      22
<PAGE>
 
  History of Marginal Profitability. Through fiscal 1995, The Registry grew
rapidly through the opening of new offices. Offices opened by The Registry
have generally experienced either losses or marginal profitability for a
period of approximately 12 to 18 months after opening. As these offices have
matured and The Registry has implemented certain cost control policies, The
Registry's profitability has improved; however, new office openings in the
future, among other factors, could adversely affect The Registry's business,
operating results, and financial condition. There can be no assurance that The
Registry can maintain profitability on a quarterly or annual basis in the
future. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
 
  Need to Develop New Offerings. Renaissance's future success will depend in
significant part on its ability to successfully develop and introduce new
service offerings and improved versions of existing service offerings. There
can be no assurance that Renaissance will be successful in developing,
introducing on a timely basis and marketing such service offerings or that any
service offerings will be accepted in the market. Moreover, services offered
by others may render Renaissance's services non-competitive or obsolete.
 
  Project Risks. Many of Renaissance's engagements involve projects which are
critical to the operations of its customers' businesses and which provide
benefits that may be difficult to quantify. Renaissance's failure or inability
to meet a customer's expectations in the performance of its services could
result in the incurrence by Renaissance of a financial loss and could damage
Renaissance's reputation and adversely affect its ability to attract new
business. In addition, an unanticipated difficulty in completing a project
could have an adverse effect on Renaissance's business and results of
operations. Fees for Renaissance's engagements typically are based on the
project schedule, Renaissance staffing requirements, the level of customer
involvement and the scope of the project as agreed upon with the customer at
the project's inception. Renaissance generally seeks to obtain an adjustment
in its fees in the event of any significant change in any of the assumptions
upon which the original estimate was based. However, there can be no assurance
that Renaissance will be successful in obtaining any such adjustment in the
future.
 
  Intellectual Property Rights. Renaissance's success is dependent in part
upon its management consulting and client/server systems integration
methodologies and other intellectual property, some of which is proprietary to
Renaissance. A significant portion of Renaissance's management consulting
services are based on the Balanced Scorecard concept described in three
Harvard Business Review articles and in the book The Balanced Scorecard, all
of which were co-authored by one of Renaissance's founders. Renaissance
believes that the Balanced Scorecard name is in the public domain. As a
result, third parties may provide services using the Balanced Scorecard name
which are competitive with the services offered by Renaissance.
 
  Renaissance relies upon a combination of trade secret, nondisclosure and
other contractual arrangements, and copyright and trademark laws to protect
its proprietary rights. Renaissance presently holds no patents or registered
copyrights or trademarks. Renaissance generally enters into confidentiality
agreements with its employees, consultants, customers and potential customers
and limits distribution of its proprietary information. There can be no
assurance that the steps taken by Renaissance in this regard will be adequate
to deter misappropriation of its proprietary information or that Renaissance
will be able to detect unauthorized use and take appropriate steps to enforce
its intellectual property rights. Although Renaissance believes that its
services and products do not infringe on the intellectual property rights of
others, there can be no assurance that such a claim will not be asserted
against Renaissance in the future.
 
  Government Regulation of Immigration. Certain of The Registry's IT
consultants are foreign nationals working in the United Stated under H-1B
permits. Accordingly, both The Registry and these foreign nationals must
comply with United States immigration laws. The inability of The Registry to
 
                                      23
<PAGE>
 
obtain H-1B permits for certain of its employees in sufficient quantities or
at a sufficient rate could have a material adverse effect on The Registry's
business, operating results and financial condition. Furthermore, Congress and
administrative agencies with jurisdiction over immigration matters have
periodically expressed concerns over the levels of legal and illegal
immigration into the U.S. These concerns have often resulted in proposed
legislation, rules and regulations aimed at reducing the number of work
permits that may be issued. Any changes in such laws making it more difficult
to hire foreign nationals or limiting the ability of The Registry to retain
foreign employees could require The Registry to incur additional unexpected
labor costs and expenses. Any such restrictions or limitations on The
Registry's hiring practices could have a material adverse effect on The
Registry's business, operating results and financial condition.
 
  Fluctuations in Operating Results; Seasonality. The Registry's operating
results have fluctuated in the past based on many factors, including the
opening of new branch offices. In view of The Registry's significant growth in
recent years, The Registry believes that period-to-period comparisons of its
financial results are not necessarily meaningful and should not be relied upon
as an indication of future performance. Because The Registry only derives
revenue when its consultants are actually working, its operating results are
adversely affected when client facilities close due to holidays or inclement
weather. In particular, The Registry generally experiences a certain amount of
seasonality in its second fiscal quarter due to the number of holidays in that
quarter. Further, The Registry generally experiences lower operating margins
in its third fiscal quarter due in part to the timing of unemployment tax
accruals.
 
  Fluctuations in the General Economy. Demand for IT professional services is
significantly affected by the general level of economic activity. When
economic activity slows, clients may delay or cancel plans that involve the
hiring of IT consultants. The Registry is unable to predict the level of
economic activity at any particular time, and fluctuations in the general
economy could adversely affect The Registry's business, operating results and
financial condition.
 
  Employment Liability Risks. Providers of IT professional services employ and
place individuals in the workplace of other businesses. Inherent risks of such
activity include possible claims of errors and omissions, misuse of client
proprietary information, misappropriation of funds, discrimination and
harassment, theft of client property, other criminal activity or torts and
other claims. Although historically The Registry has not experienced any
material claims of these types, there can be no assurance that The Registry
will not experience such claims in the future.
 
  Potential Effect of Anti-Takeover Provisions. The Registry's Board of
Directors has the authority without action by The Registry's stockholders to
fix the rights and preferences of and to issue shares of The Registry's
Preferred Stock, which may have the effect of delaying, deterring or
preventing a change in control of The Registry. The Registry has also imposed
various procedural and other requirements, such as supermajority voting
requirements for specified corporate actions, that could make it more
difficult for stockholders to effect certain corporate actions. In addition,
the classification of the Board of Directors of The Registry and certain
provisions of Massachusetts law could have the effect of delaying, deterring
or preventing a change in control of The Registry.
 
  Possible Volatility of Stock Price. The stock market historically has
experienced volatility which has affected the market price of securities of
many companies and which has sometimes been unrelated to the operating
performance of such companies. In addition, factors such as announcements of
new services or offices or strategic alliances by The Registry or its
competitors or third parties, as well as market conditions in the IT
professional services industry, may have a significant impact on the market
price of Registry Common Stock. The market price may also be affected by
movements in prices of stocks in general.
 
                                      24
<PAGE>
 
ITEM 8: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
 
            INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
 
<TABLE>
<CAPTION>
                                                                           PAGE
                                                                           ----
<S>                                                                        <C>
Report of Price Waterhouse LLP............................................  26
Report of Ernst & Young LLP...............................................  27
Report of Graves, McKenna, Lundeen & Almquist, P.L.L.P. ..................  28
Consolidated Balance Sheet as of June 29, 1996 and June 28, 1997..........  29
Consolidated Statement of Income for the Years Ended June 24, 1995, June
 29, 1996 and June 28, 1997...............................................  30
Consolidated Statement of Changes in Stockholders' Equity for the Years
 Ended June 24, 1995, June 29, 1996 and June 28, 1997.....................  31
Consolidated Statement of Cash Flows for the Years Ended June 24, 1995,
 June 29, 1996 and June 28, 1997..........................................  33
Notes to Consolidated Financial Statements................................  34
Financial Statement Schedule:
  For the Years ended June 24, 1995, June 29, 1996 and June 28, 1997
     II--Valuation and Qualifying Accounts................................  62
</TABLE>
 
  All other schedules are omitted because they are not applicable or the
required information is shown in the Consolidated Financial Statements or
Notes thereto.
 
  See selected quarterly financial data in Item 7 "Management's Discussion and
Analysis of Financial Condition and Results of Operations".
 
 
                                      25
<PAGE>
 
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Board of Directors
and Stockholders of The
Registry, Inc.
 
In our opinion, based upon our audits and the reports of other auditors, the
consolidated financial statements listed in the accompanying index present
fairly, in all material respects, the financial position of The Registry, Inc.
and its subsidiaries (the "Registry") at June 29, 1996 and June 28, 1997, and
the results of their operations and their cash flows for each of the three
years in the period ended June 28, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
The Registry's management; our responsibility is to express an opinion on
these financial statements based on our audits. We did not audit the financial
statements of Application Resources, Inc. and Shamrock Computer Resources,
Ltd., each a wholly-owned subsidiary, for the year ended December 31, 1995.
These statements reflect total revenues of $55,298,000 for the year ended
December 31, 1995 (which are included in the accompanying consolidated
statement of income for the year ended June 24, 1995). Those statements were
audited by other auditors whose reports thereon have been furnished to us, and
our opinion expressed herein, insofar as it relates to the amounts included
for Application Resources, Inc. and Shamrock Computer Resources, Ltd. for this
period, is based solely on the reports of the other auditors. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management,
and evaluating the overall financial statement presentation. We believe that
our audits and the reports of other auditors provide a reasonable basis for
the opinion expressed above.
 
As discussed in Note 18, effective July 31, 1997, The Registry acquired all of
the issued and outstanding stock of Renaissance Solutions, Inc. in a
transaction which is to be accounted for as a pooling-of-interests.
Accordingly, The Registry's financial statements will be retroactively
restated to reflect this merger on a historical basis. No adjustments have
been made to the accompanying consolidated financial statements to reflect the
effects of this merger.
 
Price Waterhouse LLP
 
Boston, Massachusetts
July 27, 1997, except as to Note 18 which is as of August 27, 1997
 
                                      26
<PAGE>
 
                        REPORT OF INDEPENDENT AUDITORS
 
The Board of Directors and
Shareholders Application Resources,
Inc.
 
We have audited the statements of income, shareholders' equity, and cash flows
of Application Resources, Inc. for the year ended December 31, 1995 (not
presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
 
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Application
Resources, Inc. for the year ended December 31, 1995 in conformity with
generally accepted accounting principles.
 
                                                  Ernst & Young LLP
 
San Francisco, California
January 24, 1997
 
                                      27
<PAGE>
 
                         INDEPENDENT AUDITORS' REPORT
 
To the Stockholders
Shamrock Computer Resources, Ltd.
Minneapolis, Minnesota
 
We have audited the statements of income, changes in stockholders' equity, and
cash flows of Shamrock Computer Resources, Ltd. for the year ended December
31, 1995 (not presented separately herein). These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.
 
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the results of operations and cash flows of Shamrock
Computer Resources, Ltd. for the year ended December 31, 1995 in conformity
with generally accepted accounting principles.
 
Graves, McKenna, Lundeen & Almquist, P.L.L.P
Certified Public Accountants
 
Minneapolis, Minnesota
December 13, 1996
 
                                      28
<PAGE>
 
                               THE REGISTRY, INC.
 
                           CONSOLIDATED BALANCE SHEET
                        (IN THOUSANDS EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                                                            JUNE 29,  JUNE 28,
                                                              1996      1997
                                                            --------  --------
<S>                                                         <C>       <C>
                          ASSETS
Current assets:
  Cash and cash equivalents...............................  $13,707   $  5,933
  Marketable securities...................................      --      17,846
  Accounts receivable, net of allowance for doubtful
   accounts of $513 and $996 at June 29, 1996 and June 28,
   1997, respectively.....................................   42,439     74,956
  Notes receivable........................................       82      1,663
  Deferred income taxes...................................       47      1,665
  Other current assets....................................      924      1,641
                                                            -------   --------
    Total current assets..................................   57,199    103,704
Fixed assets, net.........................................    6,979     10,975
Notes receivable from officers............................       60        147
Goodwill, net of accumulated amortization of $145 and $578
 at June 29, 1996 and June 28, 1997, respectively ........      773     16,424
Other assets..............................................      144        586
Deferred income taxes.....................................       35        --
                                                            -------   --------
                                                            $65,190   $131,836
                                                            =======   ========
           LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Line of credit..........................................  $ 1,885   $  1,485
  Current portion of capital lease obligations............       77         42
  Current portion of long-term debt.......................      344        473
  Accounts payable........................................    2,652      1,855
  Accrued salaries and wages..............................    4,946      6,559
  Other accrued expenses..................................    5,401      9,730
  Income taxes payable....................................    2,082      1,386
  Deferred income taxes...................................       89        476
                                                            -------   --------
    Total current liabilities.............................   17,476     22,006
Deferred income taxes.....................................      673        754
Capital lease obligations.................................       52          6
Long-term debt............................................    2,600      2,248
                                                            -------   --------
Commitments and contingencies (Notes 3 , 13 and 18)
Stockholders' equity:
  Preferred stock, no par value:
    Authorized--5,000,000 shares; issued and outstanding--
     2,448,000 at June 29, 1996 (liquidating preference
     $1,934) and 0 at June 28, 1997.......................    1,916        --
  Preferred stock, $.10 par value (Note 10)...............      --         --
  Common stock, no par value:
    Authorized 99,000,000 shares; issued and outstanding
     11,833,515 shares at June 29, 1996 and 14,150,903
     shares at June 28, 1997..............................      179      4,702
  Additional paid-in capital..............................   35,434     84,804
  Notes receivable from stockholders......................     (226)      (226)
  Deferred stock compensation.............................     (179)       --
  Retained earnings.......................................    7,265     17,545
  Cumulative translation adjustment.......................      --          (3)
                                                            -------   --------
    Total stockholders' equity............................   44,389    106,822
                                                            -------   --------
                                                            $65,190   $131,836
                                                            =======   ========
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                       29
<PAGE>
 
                               THE REGISTRY, INC.
 
                        CONSOLIDATED STATEMENT OF INCOME
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                                YEAR ENDED YEAR ENDED YEAR ENDED
                                                 JUNE 24,   JUNE 29,   JUNE 28,
                                                   1995       1996       1997
                                                ---------- ---------- ----------
<S>                                             <C>        <C>        <C>
Revenue.......................................   $153,985   $216,878   $324,766
Cost of revenue...............................    114,641    158,742    235,869
                                                 --------   --------   --------
                                                   39,344     58,136     88,897
Selling, general and administrative expenses..     33,544     46,144     65,228
Acquisition-related expenses..................        --         --       4,744
                                                 --------   --------   --------
Income from operations........................      5,800     11,992     18,925
Interest expense..............................     (1,223)    (2,125)      (677)
Interest and other income (expense), net......         90       (108)     2,279
                                                 --------   --------   --------
Income before taxes...........................      4,667      9,759     20,527
Income tax provision..........................        875      3,127      9,627
                                                 --------   --------   --------
Net income....................................   $  3,792   $  6,632   $ 10,900
                                                 ========   ========   ========
Unaudited pro forma information (Note 16):
  Income before taxes.........................   $  4,667   $  9,759   $ 20,527
  Pro forma income tax provision..............      2,014      4,222     10,555
                                                 --------   --------   --------
  Pro forma net income........................   $  2,653   $  5,537   $  9,972
                                                 ========   ========   ========
  Pro forma net income per share..............   $   0.24   $   0.50   $   0.71
                                                 ========   ========   ========
  Weighted average common and common
   equivalent shares..........................     10,968     11,083     14,143
                                                 ========   ========   ========
</TABLE>
 
 
   The accompanying notes are an integral part of these financial statements.
 
                                       30
<PAGE>
 
                               THE REGISTRY, INC.
 
           CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                        (IN THOUSANDS EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                   PREFERRED STOCK      COMMON STOCK      COMMON STOCK                          NOTES
                        NO PAR             NO PAR           $.01 PAR     ADDITIONAL           RECEIVABLE    DEFERRED
                   -----------------  -----------------  ---------------  PAID-IN   TREASURY     FROM        STOCK     RETAINED
                    SHARES    VALUE     SHARES    VALUE   SHARES   VALUE  CAPITAL    STOCK   STOCKHOLDERS COMPENSATION EARNINGS
                   ---------  ------  ----------  -----  --------  ----- ---------- -------- ------------ ------------ --------
<S>                <C>        <C>     <C>         <C>    <C>       <C>   <C>        <C>      <C>          <C>          <C>
Balance at June
25, 1994.........  2,790,000  $2,204   4,351,413  $205    200,000  $   2  $   918    $ --       $(226)       $(226)     $2,615
Stock issued upon
exercise of
options..........    123,000      14      33,754     1        --     --       --       --         --           --          --
Repurchase of
stock............   (465,000)   (302)   (127,609)  (30)       --     --       --       --         --           --          --
Amortization of
deferred stock
compensation.....        --      --          --    --         --     --       --       --         --            31        --
Distributions....        --      --          --    --         --     --       --       --         --           --         (696)
Net income for
the year.........        --      --          --    --         --     --       --       --         --           --        3,792
                   ---------  ------  ----------  ----   --------  -----  -------    -----      -----        -----      ------
Balance at June
24, 1995.........  2,448,000   1,916   4,257,558   176    200,000      2      918      --        (226)        (195)      5,711
Consolidation of
real estate trust
(Note 15)........        --      --          --    --         --     --      (111)     --         --           --          --
Acquisition of
America's
Registry by TRI
(Note 2).........        --      --    5,333,333   --    (200,000)   (2)        2      --         --           --          --
Amortization of
deferred stock
compensation.....        --      --          --    --         --     --       --       --                       31         --
Proceeds from
issuance of
Common Stock, net
of issuance
costs............        --      --    2,230,000   --         --     --    34,204      --         --           --          --
Stock issued upon
exercise of
options..........     23,000     --       18,935     3        --     --       --       --         --           --          --
Capital
contribution.....        --      --          --    --         --     --       421      --         --           --          --
Distributions....        --      --          --    --         --     --       --       --         --           --       (2,958)
Net income for
the year.........        --      --          --    --         --     --       --       --         --           --        6,632
Adjustment to
eliminate
duplication of
the six month
period ended
December 31, 1995
resulting from
the change in
fiscal year of
entities acquired
in poolings-of-
interests (Note
4):
 Net income......        --      --          --    --         --     --       --       --         --           --       (2,294)
 Distributions...        --      --          --    --         --     --       --       --         --           --          174
 Amortization of
 deferred stock
 compensation....        --      --          --    --         --     --       --       --         --           (15)        --
 Stock issued
 upon exercise of
 stock options...    (23,000)    --       (6,311)  --         --     --       --       --         --           --          --
                   ---------  ------  ----------  ----   --------  -----  -------    -----      -----        -----      ------
Balance at June
29, 1996.........  2,448,000  $1,916  11,833,515  $179        --   $ --   $35,434    $ --       $(226)       $(179)     $7,265
<CAPTION>
                   CUMULATIVE      TOTAL
                   TRANSLATION STOCKHOLDERS'
                   ADJUSTMENT     EQUITY
                   ----------- -------------
<S>                <C>         <C>
Balance at June
25, 1994.........     $--         $ 5,492
Stock issued upon
exercise of
options..........      --              15
Repurchase of
stock............      --            (332)
Amortization of
deferred stock
compensation.....      --              31
Distributions....      --            (696)
Net income for
the year.........      --           3,792
                   ----------- -------------
Balance at June
24, 1995.........      --           8,302
Consolidation of
real estate trust
(Note 15)........      --            (111)
Acquisition of
America's
Registry by TRI
(Note 2).........      --             --
Amortization of
deferred stock
compensation.....      --              31
Proceeds from
issuance of
Common Stock, net
of issuance
costs............      --          34,204
Stock issued upon
exercise of
options..........      --               3
Capital
contribution.....      --             421
Distributions....      --          (2,958)
Net income for
the year.........      --           6,632
Adjustment to
eliminate
duplication of
the six month
period ended
December 31, 1995
resulting from
the change in
fiscal year of
entities acquired
in poolings-of-
interests (Note
4):
 Net income......      --          (2,294)
 Distributions...      --             174
 Amortization of
 deferred stock
 compensation....      --             (15)
 Stock issued
 upon exercise of
 stock options...      --             --
                   ----------- -------------
Balance at June
29, 1996.........     $--         $44,389
</TABLE>
 
   The accompanying notes are an integral part of these financial statements.
 
                                       31
<PAGE>
 
                              THE REGISTRY, INC.
 
    CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY--(CONTINUED)
                       (IN THOUSANDS EXCEPT SHARE DATA)
 
<TABLE>
<CAPTION>
                   PREFERRED STOCK       COMMON STOCK     COMMON STOCK                         NOTES
                        NO PAR              NO PAR          $.01 PAR   ADDITIONAL            RECEIVABLE    DEFERRED
                  -------------------  ------------------ ------------  PAID-IN   TREASURY      FROM        STOCK     RETAINED
                    SHARES     VALUE     SHARES    VALUE  SHARES VALUE  CAPITAL    STOCK    STOCKHOLDERS COMPENSATION EARNINGS
                  ----------  -------  ----------  ------ ------ ----- ---------- --------  ------------ ------------ --------
<S>               <C>         <C>      <C>         <C>    <C>    <C>   <C>        <C>       <C>          <C>          <C>
Balance at June
29, 1996........   2,448,000  $ 1,916  11,833,515  $  179  --    $--    $35,434   $   --       $(226)       $(179)    $ 7,265
Repurchase of
stock...........         --       --      (48,143)    --   --     --        --     (2,000)       --           --          --
Proceeds from
issuance of
stock, net of
issuance costs..     165,000    1,564   1,264,353   1,043  --     --     46,420     2,000        --           --          (80)
Stock issued
upon exercise of
options.........         --       --      353,273     --   --     --      1,072       --         --           --          --
Stock issued for
acquisition.....         --       --        2,736     --   --     --        128       --         --           --          --
Tax benefit
associated with
exercise of
certain
options.........         --       --          --      --   --     --      1,344       --         --           --          --
Amortization of
deferred stock
compensation....         --       --          --      --   --     --        --        --         --           179         --
Conversion of
preferred
stock...........  (2,613,000)  (3,480)    717,080   3,480  --     --        --        --         --           --          --
Stock issued
through stock
purchase plan...         --       --       28,089     --   --     --        406       --         --           --          --
Distributions...         --       --          --      --   --     --        --        --         --           --         (540)
Net income for
the year........         --       --          --      --   --     --        --        --         --           --       10,900
Cumulative
translation
adjustment......         --       --          --      --   --     --        --        --         --           --          --
                  ----------  -------  ----------  ------  ---   ----   -------   -------      -----        -----     -------
Balance at June
28, 1997........         --   $   --   14,150,903  $4,702  --    $--    $84,804   $   --       $(226)       $ --      $17,545
                  ==========  =======  ==========  ======  ===   ====   =======   =======      =====        =====     =======
<CAPTION>
                  CUMULATIVE      TOTAL
                  TRANSLATION STOCKHOLDERS'
                  ADJUSTMENT     EQUITY
                  ----------- -------------
<S>               <C>         <C>
Balance at June
29, 1996........     $--        $ 44,389
Repurchase of
stock...........      --          (2,000)
Proceeds from
issuance of
stock, net of
issuance costs..      --          50,947
Stock issued
upon exercise of
options.........      --           1,072
Stock issued for
acquisition.....      --             128
Tax benefit
associated with
exercise of
certain
options.........      --           1,344
Amortization of
deferred stock
compensation....      --             179
Conversion of
preferred
stock...........      --             --
Stock issued
through stock
purchase plan...      --             406
Distributions...      --            (540)
Net income for
the year........      --          10,900
Cumulative
translation
adjustment......       (3)            (3)
                  ----------- -------------
Balance at June
28, 1997........     $ (3)      $106,822
                  =========== =============
</TABLE>
 
  The accompanying notes are an integral part of these financial statements.
 
                                       32
<PAGE>
 
                              THE REGISTRY, INC.
 
                     CONSOLIDATED STATEMENT OF CASH FLOWS
               INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                            (DOLLARS IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                YEAR ENDED YEAR ENDED YEAR ENDED
                                                 JUNE 24,   JUNE 29,   JUNE 28,
                                                   1995       1996       1997
                                                ---------- ---------- ----------
<S>                                             <C>        <C>        <C>
Cash flows from operating activities:
 Net income...................................   $  3,792   $  6,632   $ 10,900
 Adjustments to reconcile net income to net
  cash used for operating activities:
 Depreciation and amortization................        785      1,101      2,369
 Amortization of deferred stock compensation..         31         31        179
 Provision for losses on accounts receivable..        112        164        483
 Deferred income taxes........................       (275)      (763)    (1,106)
 Increase in accounts receivable..............    (11,634)   (13,687)   (27,572)
 Increase in other current assets.............       (185)      (346)      (492)
 (Increase) decrease in other assets..........       (195)        30       (442)
 Increase (decrease) in accounts payable......        698        239     (1,742)
 Increase in accrued expenses.................      1,248      3,145      3,754
 Increase in accrued salaries and wages.......        693      1,383         47
 Increase (decrease) in income taxes payable..       (100)     1,838       (148)
                                                 --------   --------   --------
  Net cash used for operating activities......     (5,030)      (233)   (13,770)
                                                 --------   --------   --------
Cash flows from investing activities:
 Cash disbursed for acquisitions, net of cash
  acquired....................................       (250)       --     (16,480)
 Increase in notes receivable from officers...       (406)      (709)       (90)
 Repayment of notes receivable from officers..        --       1,770          3
 Increase in notes receivable.................        --         --      (1,500)
 Increase in notes receivable from related
  parties.....................................        (57)       (25)       (64)
 Purchases of marketable securities...........        --         --     (21,360)
 Sales of marketable securities...............        --         --       3,514
 Purchases of fixed assets....................     (2,603)    (2,525)    (5,220)
                                                 --------   --------   --------
  Net cash used for investing activities......     (3,316)    (1,489)   (41,197)
                                                 --------   --------   --------
Cash flows from financing activities:
 Cash proceeds from issuance of common stock
  (Note 10)...................................        --      34,498     49,027
 Cash payments to repurchase common stock.....        (71)       --      (2,000)
 Proceeds from reissuance of treasury stock...        --         --       1,920
 Cash proceeds from exercise of stock
  options.....................................         15          3      1,072
 Cash proceeds from stock purchase plan.......        --         --         406
 Net borrowings (payments) on line of credit..      8,024    (16,053)      (676)
 Principal payments on long-term debt and
  capital lease obligations...................       (485)    (3,591)    (2,393)
 Proceeds from issuance of long-term debt.....      2,080      2,160        378
 Capital contribution.........................        --         421        --
 Distributions................................       (696)    (2,958)      (540)
                                                 --------   --------   --------
  Net cash provided by financing activities...      8,867     14,480     47,194
                                                 --------   --------   --------
  Effect of exchange rates on cash and cash
   equivalents................................        --         --         (1)
  Elimination of duplicated activity from July
   to December 1995 (Note 4)..................        --        (855)       --
                                                 --------   --------   --------
Net increase (decrease) in cash and cash
 equivalents..................................        521     11,903     (7,774)
Cash and cash equivalents, beginning of
 period.......................................      1,283      1,804     13,707
                                                 --------   --------   --------
Cash and cash equivalents, end of period......   $  1,804   $ 13,707   $  5,933
                                                 ========   ========   ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
 INFORMATION:
 Cash paid for interest.......................   $  1,215   $  2,049   $    584
 Cash paid for income taxes...................   $  1,250   $  2,052   $ 10,267
</TABLE>
 
   See additional disclosure of non-cash investing and financing activity in
                         Notes 3, 4, 5, 8, 10 and 15.
 
  The accompanying notes are an integral part of these financial statements.
 
                                      33
<PAGE>
 
                              THE REGISTRY, INC.
 
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
1. NATURE OF BUSINESS
 
  The Registry, Inc. ("TRI" or "The Registry") is an information technology
("IT") professional services firm providing IT consultants on a contract basis
to organizations nationwide with complex IT operations in a broad range of
industries. As of June 28, 1997, offices are maintained in 17 states and two
European locations.
 
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of Consolidation
 
  The accompanying financial statements include the accounts of TRI and
America's Registry, Inc. ("America's Registry") which, prior to January 1,
1996, were owned and controlled by a common sole stockholder who serves as an
officer of The Registry. Effective January 1, 1996, TRI, through a wholly-
owned subsidiary, acquired all of the outstanding shares of common stock of
America's Registry and the stockholder of America's Registry received an
additional 5,333,333 shares of the common stock of TRI. The accompanying
financial statements also include the accounts of several entities acquired in
purchase transactions, subsequent to their respective acquisition dates (see
Note 3), as well as the accounts of a real estate trust (the "Trust") which is
substantially controlled by The Registry, subsequent to the renegotiation of
certain lease terms on September 19, 1995 (see Note 15). On November 26 and
27, 1996, The Registry completed the acquisitions of Applications Resources,
Inc. ("ARI") and Shamrock Computer Resources, Ltd. ("SCR"), respectively.
These transactions have been accounted for as poolings-of-interests and,
therefore, the accompanying financial statements have been retroactively
restated to reflect the financial position and results of operations and cash
flows of The Registry, ARI and SCR for all periods presented (see Note 4). All
intercompany balances and transactions have been eliminated.
 
 Fiscal Year
 
  The Registry changed its fiscal year end from May 31 to the last Saturday in
June effective with the fiscal year ended June 24, 1995. Results of operations
and of cash flows for the years ended June 24, 1995, June 29, 1996 and July
28, 1997 are for 52 weeks, 53 weeks and 52 weeks, respectively.
 
  ARI and SCR previously utilized a December 31 year end. Upon acquisition,
ARI and SCR changed their fiscal year end to the last Saturday in June to
conform to The Registry's fiscal year (see Note 4).
 
 Cash Equivalents and Marketable Securities
 
  The Registry considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents. The
Registry's cash equivalents consist primarily of municipal bonds bearing
interest at a weighted average rate of approximately 3.87% at June 28, 1997
and short-term U.S. treasury bill investments earning interest at the short-
term Federal funds rate (5.167%) at June 29, 1996. Marketable securities at
June 28, 1997 consist of various municipal and federal agency bonds earning
interest at a weighted average rate of approximately 4.65%. All such
securities mature within one year. Accordingly, the investments are subject to
minimal credit and market risks. These investments are carried at cost plus
accrued interest which approximates market. The Registry considers such
securities to be classified as "available-for-sale". No realized or unrealized
gains or losses have been recognized on these securities.
 
 Revenue Recognition, Accounts Receivable and Concentration of Credit Risk
 
  Revenue is recognized as services are performed. Ongoing credit evaluations
of customers' financial condition are performed and collateral is not
required. Concentration of credit risk with
 
                                      34
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
respect to accounts receivable is limited due to the number and diversity of
customers comprising The Registry's customer base. One customer accounted for
12% of accounts receivable at June 28, 1997. No single customer accounted for
more than 10% of accounts receivable at June 29, 1996. The Registry maintains
reserves for potential credit losses and such losses, in the aggregate, have
not exceeded management's expectations. International revenue has not been
significant.
 
 Fixed Assets
 
  Fixed assets are stated at cost. Additions, renewals and betterments of
fixed assets are capitalized. Repair and maintenance expenditures for minor
items are generally expensed as incurred. Depreciation of fixed assets is
provided using the straight-line method over the following estimated useful
lives:
 
<TABLE>
   <S>                       <C>
   Building and
    improvements...........  31 1/2 years
   Computer equipment......  5 years
   Furniture and
    equipment..............  5 to 7 years
   Motor vehicles..........  5 years
   Leasehold improvements..  lesser of estimated useful life or remaining lease term
</TABLE>
 
 Advertising Costs
 
  Advertising costs are recorded as expense when incurred. There were no
advertising costs recorded as assets at June 29, 1996 or June 28, 1997. Total
advertising expenses for the years ended June 24, 1995, June 29, 1996 and June
28, 1997 were $725,000, $480,000 and $478,000, respectively.
 
 Income Taxes
 
  The Registry utilizes the asset and liability method of accounting for
income taxes, as set forth in Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires the
recognition of deferred tax assets and liabilities for the expected future tax
consequences of temporary differences between the financial statement and tax
bases of assets and liabilities, utilizing currently enacted tax rates. The
effect of any future change in tax rates is recognized in the period in which
the change occurs. Through May 31, 1994, TRI had used the cash method of
accounting for income tax reporting purposes. Effective June 1, 1994, TRI
converted to the accrual method of accounting for income tax reporting
purposes. Certain of TRI's subsidiaries have also converted from the cash
method to the accrual method of accounting for income tax reporting purposes
upon their acquisition by The Registry.
 
  As described in Note 9, America's Registry and SCR had both previously
elected to be treated as a small business corporation for income tax purposes
with income or loss and credits passed through to the stockholders. Concurrent
with the acquisition of America's Registry and SCR by TRI described above,
America's Registry and SCR's elections to be treated as an S Corporation
terminated (see Note 9). The companies have continued to file separate tax
returns.
 
 Use of Estimates
 
  The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingencies at June 29, 1996 and June 28, 1997, and the
reported amounts of revenues and expenses during the three years in the period
ended June 28, 1997. Actual results could differ from those estimates.
 
                                      35
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
 Goodwill
 
  As described in Note 3, The Registry amortizes goodwill arising from
purchase acquisitions on a straight-line basis over a period of 10 to 30
years. Goodwill is evaluated for consideration of potential impairment based
on the operating results and forecasted cash flows of the acquired entity.
 
 Reclassifications
 
  Certain amounts in the prior year financial statements have been
reclassified to conform to the current period presentation.
 
 Translation of Foreign Currencies
 
  The functional currency for The Registry's European subsidiary is the local
currency. Assets and liabilities are translated into U.S dollars at exchange
rates in effect at the balance sheet date; income and expense items and cash
flows are translated at average exchange rates for the period. Cumulative net
translation adjustments are included in stockholders' equity. Gains and losses
resulting from foreign currency transactions, not significant in amount, are
included in the results of operations as other income (expense). Total assets,
exclusive of goodwill, and total liabilities of The Registry's foreign
subsidiary were $3,442,000 and $3,066,000, respectively, at June 28, 1997.
 
 Recently Enacted Accounting Standards
 
  In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("SFAS 128"). SFAS 128 specifies modifications to the calculation of earnings
per share from that currently used by The Registry. Under SFAS 128, "basic
earnings per share" will be calculated based upon the weighted average number
of common shares actually outstanding, and "diluted earnings per share" will
be calculated based upon the weighted average number of common shares, common
equivalent shares, and other convertible securities outstanding. SFAS 128 is
effective in The Registry's second quarter of fiscal 1998 and will be adopted
at that time with retroactive restatement of all previously reported amounts.
Had The Registry been following the provisions of SFAS 128 historically, the
following pro forma amounts would have been reported for basic earnings per
share:
 
<TABLE>
<CAPTION>
                                    YEARS ENDED
        ----------------------------------------------------------------------------------
        JUNE 24, 1995                JUNE 29, 1996                           JUNE 28, 1997
        -------------                -------------                           -------------
        <S>                          <C>                                     <C>
            $0.26                        $0.53                                   $0.76
</TABLE>
 
  Diluted earnings per share, computed under the provisions of SFAS 128, would
not have differed materially from the pro forma net income per share amounts
previously reported by The Registry. The adoption of SFAS 128 will have no
effect on The Registry's financial position or cash flows.
 
  In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, "Reporting Comprehensive Income" ("SFAS 130"). This statement
establishes standards for the reporting of comprehensive income in a company's
full set of financial statements, and is effective for fiscal years beginning
after December 15, 1997.
 
  Comprehensive income is defined in SFAS 130 as the change in equity (net
assets) of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources. Comprehensive income reported
by an entity will include both net income and other comprehensive income.
Classifications within other comprehensive income could include foreign
 
                                      36
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
currency items, minimum pension liability adjustments, and unrealized gains
and losses on certain investments in debt and equity securities. SFAS 130 will
affect The Registry's reporting of unrealized gains and losses on marketable
securities, as well as the reporting of translation adjustments resulting from
certain investments in foreign subsidiaries. Such disclosures of comprehensive
income will be in addition to existing reporting of net income. The Registry
will adopt this statement as required.
 
  In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
("SFAS 131"). SFAS 131 is effective for fiscal years beginning after December
15, 1997 and requires restatement of disclosures for all periods presented.
 
  SFAS 131 requires that companies disclose information about operating
segments in annual and interim financial statements. SFAS 131 utilizes the
"management approach" in determining what constitutes an operating segment. An
operating segment is defined in SFAS 131 as a business component:
 
  .  which engages in business activities from which it may earn revenues and
     incur expenses;
 
  .  whose operating results are regularly reviewed by a chief operating
     decision maker to make decisions about resources to be allocated to the
     segment and assess its performance; and
 
  .  for which discrete financial information is available.
 
  SFAS 131 requires that a company disclose information about operating
segments that meet any of the following thresholds:
 
  .  its reported revenue, including both customer and intersegment sales, is
     greater than or equal to 10% of combined revenue,
 
  .  the absolute amount of its reported profit or loss is greater than 10%
     or more of the absolute amount, of (1) the combined reported profit of
     all segments that did not report a loss or (2) the combined reported
     losses of all segments that did report a loss,
 
  .  its assets are greater than or equal to 10% or more of combined assets
     of all operating segments.
 
  The adoption of SFAS 131 will not impact The Registry's financial position,
results of operations or cash flows. Management is currently assessing which
operating segments of The Registry will require disclosure, and The Registry
will adopt this statement as required.
 
3. ACQUISITIONS OF SUBSIDIARIES--PURCHASES
 
 The Registry, Inc. Network Systems Consulting Practice
 
  On November 30, 1994, TRI acquired all of the common stock of Axiom
Consulting Group, Inc., an information technology consulting firm providing
services similar to those of The Registry. The acquired entity retained its
separate corporate form and was subsequently renamed The Registry, Inc.
Network Consulting Practice ("NSCP"). The purchase price was $1,000,000, of
which $250,000 was paid in cash at the closing and $750,000 is in the form of
promissory notes which are being paid in installments through November 1998
(see Note 8).
 
  The acquisition has been accounted for as a purchase and, accordingly, the
purchase price, including an additional $12,000 of related costs which were
incurred by TRI, has been allocated to the assets acquired and the liabilities
assumed based on their estimated fair values at the date of acquisition.
 
                                      37
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  Goodwill of $918,000, representing the excess of the purchase price over the
fair value of the assets acquired and liabilities assumed, is included in
other assets in the accompanying balance sheet and is being amortized on a
straight-line basis over 10 years. Accumulated amortization at June 29, 1996
and June 28, 1997 was $145,000 and $270,000, respectively.
 
  The pro forma results of operations, assuming that the acquisition of NSCP
occurred at the beginning of the year ended June 24, 1995, would not
materially differ from TRI's reported results of operations.
 
  TRI is required to make additional payments up to $3,000,000 to the selling
stockholders of the former Axiom Consulting Group, Inc., contingent upon the
revenue and profits of the subsidiary for the four years subsequent to the
acquisition. Such payments are determined as a stated percentage of net income
of the subsidiary, as defined in the purchase agreement, with a provision that
all $3,000,000 would be payable to the selling stockholders in the event that
the subsidiary's revenue exceeds a stated amount in the twelve month period
ending November 30, 1998. Such amounts are recorded as additional purchase
price when paid or accrued. No amounts have been accrued for these contingent
payments at June 29, 1996. $241,000 has been paid during the year ended June
28, 1997 and $79,000 has been accrued for these payments at June 28, 1997.
 
 Morris Information Systems
 
  On August 16, 1996, The Registry, through a wholly owned subsidiary,
acquired all of the outstanding stock of Morris Information Systems ("MIS"),
an information technology consulting firm performing services similar to those
of The Registry. The purchase price was $2,500,000 in cash plus amounts up to
an aggregate of $700,000 contingent upon the operating results of MIS during
the two years following the acquisition. Such amounts, if paid, will be
recorded as additional purchase price. $262,000 has been accrued for these
payments at June 28, 1997. In addition, The Registry will pay a total of
$300,000 per year through August of 1998 to the former stockholder of MIS in
consideration for a consulting and noncompetition agreement.
 
  The acquisition has been accounted for as a purchase and, accordingly, the
purchase price has been allocated to the assets acquired and liabilities
assumed based upon their estimated fair values as of the date of acquisition.
Goodwill of $2,318,000, representing the excess of the purchase price over the
fair value of the assets acquired and liabilities assumed, is included in
other assets in the accompanying balance sheet and is being amortized on a
straight line basis over 30 years. Accumulated amortization at June 28, 1997
is $67,000.
 
 Sun-Tek Consultants, Inc.
 
  On November 1, 1996, the Registry, through a wholly-owned subsidiary,
acquired all of the outstanding stock of Sun-Tek Consultants, Inc., a Florida
Corporation ("Sun-Tek"), for $1,900,000 in cash. Sun-Tek is an information
technology consulting firm performing services similar to those of the
Registry. The acquisition has been accounted for as a purchase and,
accordingly, the purchase price has been allocated to the assets acquired and
liabilities assumed based upon their estimated fair values as of the date of
acquisition. The excess of consideration over the estimated fair value of net
assets acquired of $1,624,000 has been recorded as goodwill and is being
amortized on a straight-line basis over 30 years. Accumulated amortization as
of June 28, 1997 is $36,000.
 
 Sterling Information Group
 
  On November 27, 1996, the Registry, through a wholly-owned subsidiary,
acquired certain assets and liabilities of Sterling Information Group, Inc.
("Sterling"), a Texas corporation, for cash
 
                                      38
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
consideration of $7,500,000, plus amounts up to an aggregate of $500,000
contingent upon the operating results and expansion success of Sterling over
the next 7 months. Such amounts, if paid, will be recorded as additional
purchase price. $125,000 has been accrued for these payments at June 28, 1997.
Sterling is an independent provider of outsourced software application
development based in Austin, Texas. The acquisition has been accounted for as
a purchase and, accordingly, the purchase price has been allocated to the
assets acquired and liabilities assumed based upon their estimated fair values
as of the date of acquisition. The excess of the consideration paid over the
estimated fair value of net assets acquired of $6,705,000 has been recorded as
goodwill and is being amortized on a straight-line basis over 30 years.
Accumulated amortization as of June 28, 1997 is $132,000.
 
 James Duncan & Associates
 
  On December 24, 1996, the Registry, through a wholly-owned subsidiary,
acquired all of the outstanding share capital of AFC Holdings (Guernsey)
Limited, a Guernsey trust which holds all of the outstanding share capital of
James Duncan & Associates ("JDA"), a United Kingdom corporation, for
$4,176,000, payable in $3,921,000 in cash, 2,736 shares of The Registry's
Common Stock and $129,000 payable on or before December 24, 1997 in cash or
shares of The Registry's Common Stock, at the option of the selling
stockholders. JDA is an information technology consulting firm performing
services similar to those of the Registry. The acquisition has been accounted
for as a purchase and, accordingly, the purchase price has been allocated to
the assets acquired and liabilities assumed based upon their estimated fair
values as of the date of acquisition. The excess of the consideration paid
over the estimated fair value of net assets acquired of $4,256,000 has been
recorded as goodwill, and is being amortized on a straight-line basis over 30
years. Accumulated amortization as of June 28, 1997 is $66,000.
 
 Connexus Consulting Group, Inc.
 
  On January 24, 1997, the Registry, through a wholly-owned subsidiary,
acquired all of the outstanding shares of Connexus Consulting Group, Inc.
("Connexus"), a Delaware corporation, for cash consideration of $600,000.
Connexus is an information technology consulting firm based in Andover,
Massachusetts performing services similar to those of the Registry. The
acquisition has been accounted for as a purchase and, accordingly, the
purchase price has been allocated to the assets acquired and liabilities
assumed based upon their estimated fair values as of the date of acquisition.
The excess of the consideration paid over the estimated fair value of net
assets acquired of $474,000 has been recorded as goodwill and is being
amortized on a straight-line basis over 30 years. Accumulated amortization as
of June 28, 1997 is $7,000.
 
  The acquisitions of MIS, Sun-Tek, Sterling, JDA and Connexus are
collectively referred to as the "Fiscal 1997 Acquisitions". The aggregate
purchase price and related costs associated with the Fiscal 1997 Acquisitions
was $17,046,000, which has been allocated to the assets acquired and
liabilities assumed as follows:
 
<TABLE>
   <S>                                                              <C>
   Cash............................................................ $   550,000
   Accounts Receivable, net........................................ $ 5,428,000
   Fixed Assets, net............................................... $   529,000
   Other Assets, excluding goodwill................................ $   276,000
   Accounts Payable................................................ $   945,000
   Debt and Line of Credit......................................... $ 1,858,000
   Accrued Expenses and Other Liabilities.......................... $ 1,675,000
   Income Taxes Payable and Deferred Tax Liabilities............... $   636,000
</TABLE>
 
                                      39
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  The pro forma results of operations, assuming that the acquisition of the
Fiscal 1997 Acquisitions occurred at the beginning of the years ended June 29,
1996 or June 28, 1997, would not materially differ from TRI's reported results
of operations.
 
4. ACQUISITIONS OF SUBSIDIARIES--POOLINGS-OF-INTERESTS
 
  On November 26, 1996, pursuant to an Agreement and Plan of Merger dated
October 30, 1996, The Registry, through a wholly-owned subsidiary, acquired
Application Resources, Inc., a California corporation ("ARI"). ARI is an
information technology consulting firm performing services similar to those of
The Registry. Pursuant to the agreement, each outstanding share of ARI capital
stock was converted into the right to receive 0.274428 shares of The
Registry's Common Stock. The Registry also assumed outstanding options for the
purchase of ARI common stock at the same conversion ratio. Immediately prior
to the acquisition, there were 5,217,000 shares of ARI common stock and
options to purchase 794,000 shares of ARI common stock outstanding.
 
  On November 27, 1996, pursuant to an Agreement and Plan of Merger dated
November 26, 1996, The Registry, through a wholly-owned subsidiary, acquired
Shamrock Computer Resources, Ltd., an Iowa corporation ("SCR"). SCR is an
information technology consulting firm performing services similar to those of
The Registry. Pursuant to the agreement, each outstanding share of SCR capital
stock was converted into the right to receive 136.7695 shares of The
Registry's Common Stock. Immediately prior to the acquisition, there were
7,072 shares of SCR common stock outstanding. Pursuant to the provisions of
the Iowa Business Corporation Act (the "IBCA"), a stockholder of SCR holding
352 shares of SCR common stock perfected dissenters' rights under the IBCA and
was paid $2,000,000 in redemption of such shares.
 
  In total, 2,350,774 shares of TRI Common Stock were exchanged for all of the
outstanding common stock of ARI and SCR. In addition, outstanding stock
options to purchase ARI common stock were converted into options to purchase
217,895 shares of TRI's Common Stock. These transactions have been accounted
for as poolings-of-interests and, therefore, all prior period financial
statements presented have been restated as if the acquisitions took place at
the beginning of such periods.
 
  ARI and SCR each had a calendar year end and, accordingly, the results of
operations for ARI and SCR for the year ended December 31, 1995 have been
combined with the results of operations for The Registry's fiscal year ended
June 24, 1995. Additionally, the financial position of ARI and SCR as of
December 31, 1995 has been combined with TRI's financial position as of June
24, 1995. In order to conform ARI and SCR's year end to TRI's fiscal year end,
the consolidated statement of income for fiscal 1996 includes six months (July
to December 1995) for both companies which are also included in the
consolidated statement of income for the fiscal year ended June 24, 1995.
Accordingly, an adjustment has been made to retained earnings in fiscal 1996
to eliminate the duplication of net income of ARI and SCR of $682,000 and
$1,612,000, respectively, for such six month period, as well as for
distributions of $174,000 made by SCR during this six month period and
amortization of deferred stock compensation of $15,000 for SCR. Other results
of operations for such six month period of ARI included net revenue of
$15,972,000, costs and expenses of $14,744,000, income before taxes of
$1,228,000 and income tax provision of $548,000. Other results of operations
for such six month period of SCR included net revenue of $14,801,000 and costs
and expenses of $13,189,000. As an S corporation, SCR was not subject to
corporate income taxes.
 
  There were no material transactions between The Registry, ARI or SCR during
any of the periods presented. No material adjustments to net assets or results
of operations were necessary to
 
                                      40
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
conform the accounting practices of ARI and SCR to that of TRI. Certain
reclassifications have been made to the financial statements of ARI and SCR to
conform with TRI's classifications. All costs associated with the acquisitions
have been expensed as incurred.
 
  Separate results of operations for the periods prior to the acquisitions of
ARI and SCR by The Registry were as follows:
 
<TABLE>
<CAPTION>
                                                                  THREE MONTHS
                                          FISCAL YEAR FISCAL YEAR     ENDED
                                             ENDED       ENDED    SEPTEMBER 28,
                                           JUNE 24,    JUNE 29,       1996
                                             1995        1996      (UNAUDITED)
                                          ----------- ----------- -------------
                                                     (IN THOUSANDS)
   <S>                                    <C>         <C>         <C>
   Revenue
     The Registry, Inc. ................   $ 98,687    $145,588      $47,303
     Application Resources, Inc. .......     29,870      37,615       12,073
     Shamrock Computer Resources,
      Ltd. .............................     25,428      33,675       10,053
                                           --------    --------      -------
     Combined...........................   $153,985    $216,878      $69,429
                                           ========    ========      =======
   Net Income
     The Registry, Inc. ................   $    326    $  2,543      $ 1,624
     Application Resources, Inc. .......      1,273       1,228        1,376
     Shamrock Computer Resources,
      Ltd. .............................      2,193       2,861          882
                                           --------    --------      -------
     Combined...........................   $  3,792    $  6,632      $ 3,882
                                           ========    ========      =======
   Pro Forma Net Income (see Notes 9 and
    16)
     The Registry, Inc. ................   $     86    $  2,621      $ 1,624
     Application Resources, Inc. .......      1,273       1,228        1,376
     Shamrock Computer Resources,
      Ltd. .............................      1,294       1,688          521
                                           --------    --------      -------
     Combined...........................   $  2,653    $  5,537      $ 3,521
                                           ========    ========      =======
   Other Changes in Stockholders' Equity
     The Registry, Inc. ................   $      0    $ 33,003      $     0
     Application Resources, Inc. .......       (317)          3            0
     Shamrock Computer Resources,
      Ltd. .............................       (665)     (1,416)        (301)
                                           --------    --------      -------
     Combined...........................   $   (982)   $ 31,590      $  (301)
                                           ========    ========      =======
</TABLE>
 
5. COMBINED BALANCE SHEET DETAILS
 
<TABLE>
<CAPTION>
                                                          JUNE 29,   JUNE 28,
                                                            1996       1997
                                                         ---------- -----------
   <S>                                                   <C>        <C>
   Fixed Assets:
     Land............................................... $  360,000 $   360,000
     Building...........................................  1,439,000   1,439,000
     Computer equipment and software....................  4,690,000   8,503,000
     Furniture and equipment............................  2,242,000   4,054,000
     Motor vehicles.....................................     19,000     115,000
     Leasehold and building improvements................    823,000   1,004,000
                                                         ---------- -----------
       Total fixed assets...............................  9,573,000  15,475,000
     Less: accumulated depreciation and amortization....  2,594,000   4,500,000
                                                         ---------- -----------
                                                         $6,979,000 $10,975,000
                                                         ========== ===========
</TABLE>
 
                                      41
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
<TABLE>
<CAPTION>
                                                           JUNE 29,   JUNE 28,
                                                             1996       1997
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   Other Accrued Expenses:
     Accrued employee benefits........................... $2,079,000 $4,339,000
     Accrued commissions and bonuses.....................  1,648,000  1,798,000
     Other accrued expenses..............................  1,674,000  3,593,000
                                                          ---------- ----------
                                                          $5,401,000 $9,730,000
                                                          ========== ==========
</TABLE>
 
  Computer equipment recorded under capital leases amounted to approximately
$238,000 at June 29, 1996 and June 28, 1997. Total accumulated amortization
related to these assets is approximately $78,000 and $126,000 at June 29, 1996
and June 28, 1997, respectively. Amortization expense for the period is
included in depreciation and amortization in the accompanying consolidated
statement of cash flows.
 
6. NOTES RECEIVABLE AND RELATED PARTY TRANSACTIONS
 
  At June 29, 1996 and June 28, 1997, notes receivable include promissory
notes totaling $82,000 and $18,000, respectively, from certain of the former
stockholders of TRI's wholly-owned subsidiary (NSCP). These notes bear
interest at the prime rate published in The Wall Street Journal (8.25% at June
29, 1996 and 8.50% at June 28, 1997), and are payable in installments at
various dates through November 30, 1998. At June 28, 1997, notes receivable
also include promissory notes totaling $145,000 due from various employees of
The Registry.
 
  At June 28, 1997, notes receivable also includes $1,500,000 due on April 24,
1998 from an unrelated third party corporation. This note bears interest at
the LIBOR rate plus 2.5% (8.22 % at June 28, 1997), which is payable
quarterly. This note is secured by an interest in all of the assets of the
corporation subject to a prior security interest under the corporation's bank
debt and line of credit, and the personal guarantee of the corporation's
majority stockholder.
 
  Notes receivable from officers represents notes due from various senior
officers of The Registry and bear interest at the prime rate (8.25% at June
29, 1996 and 8.50% at June 28,1997).
 
  Notes receivable from stockholders of $226,000 at June 29, 1996 and June 28,
1997, which are included as a reduction of stockholders' equity in the
accompanying balance sheet, represent promissory notes from two of ARI's
officers for the exercise of stock options. The loans bear interest at a
variable rate based upon federal income tax requirements (approximately 6% at
June 29, 1996 and 6.5% at June 28, 1997).
 
  During the year ended June 28, 1997, The Registry entered into a contract
with an entity controlled by the president of TRI to utilize an airplane for
corporate travel purposes. The Registry pays for such usage on a per-flight-
hour basis at a rate which management believes approximates market prices.
Total amounts paid to this entity during the year ended June 28, 1997 was
$100,000.
 
7. LINE OF CREDIT
 
  On March 31, 1993, TRI and America's Registry combined their separate lines
of credit into a single line of credit with the bank; this agreement was
amended on June 7, 1995 to allow a maximum borrowing of $17,000,000 and again
on October 4, 1995 to allow a maximum borrowing of $18,000,000, payable on
demand. The agreement provided a borrowing base of 80% of eligible accounts
receivable,
 
                                      42
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
as defined, less the aggregate amount of issued and undrawn letters of credit.
The line of credit was collateralized by all the assets of The Registry and
the personal guarantee of The Registry's president and significant
stockholder. Interest was paid monthly in arrears at the bank's prime rate
plus 0.75% (9.75% at June 24, 1995). There were no letters of credit
outstanding at June 24, 1995.
 
  In March 1996, The Registry terminated its existing line of credit and
replaced it with a line of credit from a different bank. The new line of
credit provides a borrowing base of 85% of eligible accounts receivable, as
defined, up to a maximum borrowing of $25,000,000, payable on demand. Interest
is payable monthly in arrears at the bank's prime rate plus .5% (8.75% at June
29, 1996 and 9.0% at June 28, 1997) or the LIBOR rate plus 2.5% (8.00% at June
29, 1996 and 8.64% at June 28, 1997) at the option of The Registry. The new
line of credit is collateralized by all of the assets of The Registry,
contains certain restrictions, including limitations on the amount of
distributions which can be made to stockholders, purchases of fixed assets,
and loans which can be made to officers, and requires the maintenance of
certain financial covenants. The line of credit agreement expires in February
1999.
 
  ARI had a line of credit arrangement with a bank which allowed ARI to borrow
the lesser of $1,750,000 or 60% of eligible accounts receivable, as defined,
at an interest rate equal to the bank's prime rate plus .50% (8.75% at June
29, 1996). There were no amounts outstanding under this line at June 29, 1996.
The line of credit was secured by all of the assets of ARI, contained certain
restrictions, including limitations on the amount of distributions which could
be made to stockholders, purchases of fixed assets, and new indebtedness, and
required the maintenance of certain financial covenants. On November 26, 1996,
in conjunction with the acquisition of ARI by the Company (see Note 4), ARI
terminated its line of credit arrangement.
 
  SCR had a credit arrangement with a bank consisting of a committed line of
credit totaling $2,500,000, of which $625,000 was unused as of June 29, 1996,
and a discretionary equipment line of $500,000. The line of credit carried
interest at the bank's prime rate (8.25% at June 29, 1996) and was
collateralized by substantially all of the assets of SCR. The equipment line
carried an interest rate equal to the bank's prime rate plus .50% (8.75% at
June 29, 1996). The sum of the outstanding balances on the line of credit and
the equipment line could not exceed a borrowing base of 80% of eligible
accounts receivable, as defined, up to a maximum total borrowing of
$3,000,000. At June 29, 1996, $7,000 of the equipment line was used. Monthly
principal payments of $3,000, including interest, were due through August 1996
on this line. The equipment line was secured by a first priority security
interest in the related equipment purchased with the loan proceeds. Both
credit arrangements were guaranteed by SCR's former stockholders and required
a commitment fee of .25% per annum on the unused portion. Additionally, the
credit arrangements contained certain restrictions, including limitations on
new indebtedness, and required the maintenance of certain financial covenants.
On November 27, 1996, in connection with the acquisition of SCR by the Company
(see Note 4), SCR terminated its credit arrangements.
  In June 1997, The Registry entered into a line of credit agreement with a
foreign bank to provide an overdraft facility of 1,400,000 British Sterling to
its James Duncan subsidiary. This facility matures on January 31, 1998 and is
secured by a $2,000,000 standby letter of credit from a U.S. bank. There is
$1,485,000 drawn on this facility as of June 28, 1997. Interest is payable
quarterly at the bank's base rate plus 0.875% (7.35% at June 29, 1997) for
amounts up to 1,000,000 British Sterling and the bank's base rate plus 2.0%
for amounts over this level.
 
                                      43
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
8. LONG-TERM DEBT
 
  Long-term debt consists of the following:
 
<TABLE>
<CAPTION>
                                                           JUNE 29,   JUNE 28,
                                                             1996       1997
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   Note payable due August 31, 1996...................... $    7,000 $      --
   Note payable due December 24, 1997....................        --     129,000
   Notes payable due November 30, 1998...................    625,000    375,000
   Notes payable due June 30, 2000.......................    216,000    167,000
   9.375% term loan due August 27, 2010..................  1,406,000  1,387,000
   6.75% term loan due April 1, 2013.....................    690,000    663,000
                                                          ---------- ----------
                                                           2,944,000  2,721,000
   Less: current portion.................................    344,000    473,000
                                                          ---------- ----------
                                                          $2,600,000 $2,248,000
                                                          ========== ==========
</TABLE>
 
  The note payable due August 31, 1996 was payable to a bank, under the line
of credit described in Note 7, in monthly installments of $3,000, including
interest at the bank's prime rate plus .50% (8.75% at June 29, 1996).
 
  The note payable due December 24, 1997 resulted from TRI's acquisition of
James Duncan and Associates in December 1996 (see Note 3). The notes are
unsecured and non-interest bearing and are payable in cash or stock to the
principal employees of JDA in December 1997.
 
  The notes payable due November 30, 1998 resulted from TRI's acquisition of
the former Axiom Consulting Group, Inc. in November 1994 (see Note 3). The
notes are unsecured and are payable to the former stockholders of Axiom
Consulting Group, Inc. in semi-annual installments of $125,000, plus interest
at the prime rate published in The Wall Street Journal, beginning in May 1996.
 
  The notes payable due June 30, 2000 resulted from ARI's repurchase of
127,609 shares of common stock and 465,000 shares of preferred stock from
certain of its stockholders in June 1995 at a price of $.24 and $.65 per
share, respectively. These repurchased shares have been excluded from the
number of shares issued and outstanding on the accompanying consolidated
balance sheet. In conjunction with this transaction, ARI issued $261,000 in
promissory notes, recorded as long-term debt on the accompanying balance
sheet, due through June 30, 2000 in five equal installments of $63,000,
including interest of 6.83%, with the first payment due in June 1996. These
notes are unsecured.
 
  The term loan due August 27, 2010 is payable to a bank in monthly
installments of $12,000, including interest, and is collateralized by certain
property of the Trust and the personal guarantee of The Registry's president
and significant stockholder.
 
  The term loan due April 1, 2013 is payable in semi-annual installments of
$34,000, including interest, and is secured by a mortgage on the land and
building of the Trust and the assignment of a life insurance policy on The
Registry's president and majority stockholder.
 
                                      44
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  Aggregate maturities of long-term debt are as follows at June 28, 1997:
 
<TABLE>
   <S>                                                                <C>
   1998.............................................................. $  473,000
   1999..............................................................    226,000
   2000..............................................................    110,000
   2001..............................................................     53,000
   2002..............................................................     60,000
   Thereafter........................................................  1,799,000
                                                                      ----------
                                                                      $2,721,000
                                                                      ==========
</TABLE>
 
9. INCOME TAXES
 
  Prior to January 1, 1996 and November 27, 1996, America's Registry and SCR,
respectively, had each elected to be an S Corporation for federal income tax
purposes as provided in Section 1362(a) of the Internal Revenue Code. As such,
the corporate income or loss and credits were passed through to the
stockholders and reported on their personal tax returns.
 
  America's Registry's and SCR's election to be treated as an S Corporation
terminated in conjunction with the acquisition of all of the common stock of
America's Registry and SCR by TRI (see Notes 2 and 4), effective January 1,
1996 and November 27, 1996, respectively. As a result, the income or loss of
America's Registry commencing on January 1, 1996 and the income or loss of SCR
commencing on November 27, 1996 is subject to corporate income tax. The income
tax provision (benefit) described below for the years ended June 29, 1996 and
June 28, 1997 includes the income taxes related to America's Registry since
January 1, 1996 and the income tax provision (benefit) for the year ended June
28, 1997 includes the income taxes related to SCR since November 27, 1996. The
unaudited pro forma provision for income taxes and pro forma net income on the
accompanying consolidated statement of income (see Note 16) reflects the
estimated results of operations if America's Registry and SCR had been subject
to corporate income taxes during the years ended June 24, 1995, June 29, 1996,
and June 28, 1997.
 
  At the time of conversion of America's Registry from an S Corporation to a C
Corporation, a net deferred tax liability of $642,000 was recorded through the
income tax provision on January 1, 1996. This deferred tax liability was
comprised principally of the remaining effects of America's Registry
converting from the cash basis to the accrual basis for tax reporting purposes
on January 1, 1994, offset by deferred tax assets for certain accrued expenses
which are recognized in different periods for financial and tax reporting.
 
  At the time of conversion of SCR from an S corporation to a C corporation, a
net deferred tax asset of $403,000 was recorded through the income tax
provision on November 27, 1996. This deferred tax asset was comprised
principally of certain accrued expenses and allowances which are recognized in
different periods for financial and tax reporting.
 
                                      45
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  The components of the provision (benefit) for federal and state income taxes
are as follows:
 
<TABLE>
<CAPTION>
                                         YEAR ENDED  YEAR ENDED   YEAR ENDED
                                          JUNE 24,    JUNE 29,     JUNE 28,
                                            1995        1996         1997
                                         ----------  -----------  -----------
   <S>                                   <C>         <C>          <C>
   Current:
     Federal............................ $  875,000  $ 3,076,000  $ 8,595,000
     State..............................    275,000      814,000    2,087,000
     Foreign............................        --           --        51,000
                                         ----------  -----------  -----------
                                          1,150,000    3,890,000   10,733,000
   Deferred:
     Federal............................   (219,000)  (1,082,000)    (574,000)
     State..............................    (56,000)    (323,000)    (129,000)
                                         ----------  -----------  -----------
                                           (275,000)  (1,405,000)    (703,000)
   Change in tax status of America's
    Registry and SCR....................        --       642,000     (403,000)
                                         ----------  -----------  -----------
                                         $  875,000  $ 3,127,000  $ 9,627,000
                                         ==========  ===========  ===========
</TABLE>
 
  Foreign pre-tax income was not material.
 
  Deferred income taxes reflect the tax impact of temporary differences
between the amount of assets and liabilities for financial reporting purposes
and such amounts as measured by tax laws and regulations. Under SFAS 109, the
benefit associated with future deductible temporary differences and operating
loss or credit carryforwards is recognized if it is more likely than not that
a benefit will be realized. Deferred tax expense (benefit) represents the
change in the net deferred tax asset or liability balance. Deferred tax assets
and liabilities are comprised of the following at June 29, 1996 and June 28,
1997:
 
<TABLE>
<CAPTION>
                                                          JUNE 29,    JUNE 28,
                                                            1996        1997
                                                         ----------  ----------
   <S>                                                   <C>         <C>
   Deferred tax assets:
     Net operating loss and credit carry forwards....... $   53,000  $  165,000
     Allowance for doubtful accounts....................    135,000     484,000
     Accounts payable and accrued expenses..............    447,000     997,000
     Other..............................................     32,000      59,000
                                                         ----------  ----------
       Total gross deferred tax assets..................    667,000   1,705,000
                                                         ----------  ----------
   Deferred tax liabilities:
     Conversion from cash to accrual basis..............  1,041,000     781,000
     Prepaid expenses...................................     82,000      31,000
     Fixed assets.......................................    167,000     273,000
     Other..............................................     57,000     185,000
                                                         ----------  ----------
       Total gross deferred tax liabilities.............  1,347,000   1,270,000
                                                         ----------  ----------
       Net deferred tax asset (liability)............... $ (680,000) $  435,000
                                                         ==========  ==========
</TABLE>
 
                                      46
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  Income taxes computed using the federal statutory income tax rate differs
from The Registry's effective tax rate primarily due to the following:
 
<TABLE>
<CAPTION>
                                               YEAR ENDED YEAR ENDED YEAR ENDED
                                                JUNE 24,   JUNE 29,   JUNE 28,
                                                  1995       1996       1997
                                               ---------- ---------- ----------
   <S>                                         <C>        <C>        <C>
   Statutory U.S. federal tax rate...........    35.0 %     35.0 %     35.0 %
   State taxes, net of federal tax benefit...     3.1 %      3.4 %      6.2 %
   Income from America's Registry and SCR not
    taxable for corporate income tax
    purposes.................................   (19.3)%    (14.3)%     (2.2)%
   Non-deductible expenses...................     0.7 %      1.6 %      9.3 %
   Amortization of goodwill not deductible
    for corporate income tax purposes........     0.4 %      0.3 %      0.5 %
   Change in tax status of America's Regis-
    try/ SCR.................................       --       6.6 %     (2.0)%
   Other.....................................    (1.2)%     (0.6)%      0.1 %
                                                -------    -------     ------
   Effective tax rate........................    18.7 %     32.0 %     46.9 %
                                                =======    =======     ======
</TABLE>
 
  Non-deductible expenses during the year ended June 24, 1995, primarily
relate to meals and entertainment expenses. Non-deductible expenses during the
years ended June 29, 1996 and June 28, 1997 primarily relate to certain costs
incurred in connection with the acquisitions of ARI and SCR.
 
10. STOCKHOLDERS' EQUITY
 
 Preferred Stock, $.10 par value
 
  On April 10, 1996, The Registry's then sole stockholder authorized 1,000,000
shares of preferred stock, $.10 par value. Preferred stock may be issued in
one or more series at the discretion of the Board of Directors of The Registry
(without stockholder approval) with such designations, rights and preferences
as the Board of Directors may determine. The preferred stock may have
dividend, liquidation, redemption, conversion, voting or other rights which
may be more expansive than the rights of the holders of The Registry's common
stock.
 
 Preferred Stock, no par value
 
  The Registry's wholly-owned subsidiary, ARI, was authorized to issue
5,000,000 shares of preferred stock, of which 3,000,000 shares were designated
as Series A Preferred Stock (the "Series A Preferred Stock"). The remaining
preferred stock may have been issued from time to time in one or more
additional series at the discretion of the Board of Directors. Shares of
Series A Preferred Stock were non-redeemable and had a liquidation preference
of $.79 per share plus any declared but unpaid dividends.
 
  Each share of Series A Preferred Stock was convertible into the number of
shares of common stock that results from dividing the conversion price in
effect at the time of conversion into $.79 for each share of Series A
Preferred Stock being converted. The conversion price of the Series A
Preferred Stock was initially $.2168 per share, subject to adjustment for
stock splits, dividends, distributions and combinations. At June 29, 1996, all
shares of Series A Preferred Stock were convertible into .274428 shares of The
Registry's Common Stock based on a conversion price of $.2168 per share.
 
                                      47
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  On November 26, 1996, in conjunction with the acquisition of ARI by TRI (see
Note 4), all of the outstanding shares of Series A Preferred Stock were
converted into 717,080 shares of Common Stock.
 
 Stock Split and Authorized Shares
 
  On March 22, 1996, The Registry's then sole stockholder approved a
177.77778-for-1 stock split on the Common Stock of TRI. At that time, The
Registry's stockholder also approved an increase to 12,000,000 in the number
of authorized shares of the Common Stock of TRI, no par value. On April 10,
1996, The Registry's stockholder approved an additional increase to 29,000,000
in the number of authorized shares of the Common Stock of TRI. On November 21,
1996, The Registry's stockholders approved an additional increase to
49,000,000 in the number of authorized shares of Common Stock of TRI. On July
30, 1997, The Registry's stockholders approved an additional increase to
99,000,000 in the number of authorized shares of Common Stock of TRI.
 
  All shares and per share amounts included in the consolidated financial
statements have been adjusted to give retroactive effect to the stock split
for all periods presented.
 
 Sale of Common and Preferred Stock
 
  On November 19, 1996, ARI sold 55,000 units to an unrelated investor for net
proceeds of $2,607,000. Each unit consisted of shares of ARI's Series A
Preferred Stock and 0.5489 shares of The Registry's Common Stock, for a total
of 165,000 shares of Series A Preferred Stock and 30,187 shares of Common
Stock.
 
 Public Offering of Common Stock
 
  On June 10, 1996, The Registry completed its Initial Public Offering for the
sale of 2,230,000 shares of common stock, which included 330,000 shares in
respect of the underwriters' over-allotment option. The Registry received
$34,498,000 from the sale of the shares, net of the underwriting discounts and
expenses associated with the offering. Additionally, The Registry had
previously incurred $294,000 of costs related to the Initial Public Offering
that were deferred in previous years which were also charged against the
proceeds of the offering. Net proceeds were used to repay all outstanding
indebtedness under The Registry's credit facility and certain term loans.
 
  On February 26, 1997, The Registry completed a secondary public offering for
the sale of 1,234,166 shares of Common Stock, including reissuance of the
treasury shares acquired in conjunction with the acquisition of SCR (see Note
4). The Registry received approximately $48,340,000 from the sale of the
shares, net of the underwriting discounts and expenses associated with the
offering. The excess of the cost of the treasury stock over the net reissuance
price has been charged to retained earnings. Net proceeds were used to repay
all outstanding indebtedness under The Registry's credit facility.
 
11. STOCK PLANS
 
  In March 1996, The Registry's then sole stockholder approved the formation
of the 1996 Stock Plan, the 1996 Eligible Directors' Stock Plan and the 1996
Employee Stock Purchase Plan.
 
 1996 Stock Plan
 
  This plan authorizes the grant of incentive stock options, non-qualified
stock options, stock purchase authorizations or stock bonus awards to key
employees, including officers, employee
 
                                      48
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
directors and consultants, to purchase up to 1,600,000 shares of common stock.
In January 1997, The Registry's Board of Directors, subject to stockholder
approval which was received on July 30, 1997, voted to increase the number of
shares of Common Stock authorized under this plan to 3,600,000. In addition,
in May 1997, the Board of Directors authorized an additional 1,000,000 shares
of Common Stock available under this plan for non-qualified stock options to
be issued to employees of businesses that The Registry acquires. Incentive
stock options cannot be granted to consultants. For incentive options, the
purchase price is equal to the fair market value on the date of grant (110% of
fair market value for stockholders who hold greater than 10% of The Registry's
stock at the time of grant). For non-qualified options and stock purchase
authorizations, the purchase price is determined by the Board of Directors
within limits as set forth in the plan, but shall not be less than 85% of the
fair market value of the common stock on the date of grant. The periods over
which options are exercisable are determined by the Board of Directors. If
permitted by the Board of Directors, employees may use previously acquired
shares of The Registry's common stock (provided that such shares tendered have
been held for at least six months) or may borrow money from The Registry on a
recourse basis (for a period of time not to exceed five years) to pay the
exercise price of shares purchased. Options may expire up to ten years after
the date of grant (five years for incentive options granted to 10%
stockholders). The Board of Directors has the discretion to designate non-
qualified options as transferable. The plan will terminate in March 2006.
 
 1996 Eligible Directors' Stock Plan
 
  This plan authorizes the grant of an option to purchase 20,000 shares of
common stock to each non-employee director on the date of the director's
initial election to the Board of Directors. The exercise price of options
granted is 100% of the closing price per share of common stock on the date of
grant. Directors may use previously acquired shares of The Registry's common
stock to pay the exercise price of shares purchased, provided that such shares
tendered have been held for at least six months. An aggregate of 100,000
shares of common stock may be issued under the plan. Options are exercisable
in four equal annual installments commencing on the first anniversary date of
the grant. Options expire ten years after the date of grant. The plan will
terminate in March 2006.
 
  In April and May 1996, options to purchase 20,000 shares each of common
stock at an exercise price of $11.00 and $13.00 per share, respectively, were
granted to newly-elected directors.
 
  Transactions under the 1996 Stock Plan and the Eligible Directors' Stock
Plan are summarized as follows:
 
<TABLE>
<CAPTION>
                                         JUNE 28, 1997        JUNE 29, 1996
                                      -------------------- --------------------
                                                  WEIGHTED             WEIGHTED
                                                  AVERAGE              AVERAGE
                                        NUMBER    EXERCISE   NUMBER    EXERCISE
                                      OF OPTIONS   PRICE   OF OPTIONS   PRICE
                                      ----------  -------- ----------  --------
   <S>                                <C>         <C>      <C>         <C>
   Outstanding at beginning of
    year............................  1,195,000    $11.22        --        --
   Granted..........................  1,584,234    $39.02  1,210,750    $11.22
   Exercised........................    (87,509)   $11.66        --        --
   Canceled.........................   (118,700)   $34.69    (15,750)   $11.22
                                      ---------            ---------
   Outstanding at end of year.......  2,573,025    $27.24  1,195,000    $11.22
                                      =========            =========
   Exercisable at end of year.......    157,625    $11.70        --        --
   Weighted average fair value of
    options granted during the peri-
    od..............................               $22.88               $ 3.06
   Options available for future
    grant...........................  2,039,466              505,000
</TABLE>
 
                                      49
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  The following table summarizes information about stock options outstanding
at June 28, 1997:
 
<TABLE>
<CAPTION>
                                                     WEIGHTED     WEIGHTED                     WEIGHTED
                                   NUMBER            AVERAGE      AVERAGE        NUMBER        AVERAGE
      RANGE OF                   OUTSTANDING        REMAINING     EXERCISE     EXERCISABLE     EXERCISE
   EXERCISE PRICES           AS OF JUNE 28, 1997 CONTRACTUAL LIFE  PRICE   AS OF JUNE 28, 1997  PRICE
   ---------------           ------------------- ---------------- -------- ------------------- --------
    <S>                      <C>                 <C>              <C>      <C>                 <C>
    $11.00-$13.00...........      1,076,325            8.71        $11.15        153,725        $11.15
    $16.00-$27.00...........         19,200             9.0        $21.04          1,600        $16.00
    $35.00..................        848,750            9.76        $35.00            --         $  --
    $40.75-$42.00...........         59,750            9.80        $41.96            400        $40.75
    $44.13-$44.25...........        464,000            9.60        $44.25          1,400        $44.13
    $46.25-$48.13...........        102,500            9.64        $46.81            --         $  --
    $52.00..................          2,500            9.43        $52.00            500        $52.00
                                  ---------                                      -------
    $11.00-$52.00...........      2,573,025            9.28        $27.24        157,625        $11.70
                                  =========                                      =======
</TABLE>
 
  Options granted to date under these plans are exercisable ratably over a
period of four to five years.
 
 1996 Employee Stock Purchase Plan
 
  This plan, which is intended to qualify under Section 423 of the Internal
Revenue Code, authorizes the grant of options to eligible employees on a semi-
annual basis to purchase shares of The Registry's common stock. An aggregate
of 300,000 shares of common stock has been reserved for issuance under this
plan. The plan permits eligible employees to purchase up to 200 shares of
common stock in any six month offering period through the accumulation of
payroll deductions, which may not exceed 10% of the employee's compensation.
Employees are eligible to participate if they have been employed by The
Registry for at least eighteen months. Shares are purchased at 85% of the
lower of the fair market value of The Registry's common stock at the beginning
or end of each six month offering period. Employees may end their
participation in the offering at any time during the offering period, and
participation ends automatically on termination of employment. The first stock
offering period under the plan commenced on June 5, 1996, the effective date
of the registration statement covering The Registry's initial public offering.
28,089 shares of Common Stock were issued under this plan during the year
ended June 28, 1997 at an issuance price of $14.45 per share. The plan will
terminate in March 2006.
 
 SCR Option
 
  On April 1, 1993, SCR granted a non-qualifying stock option to a key
employee to purchase 48,143 shares of common stock at an exercise price of
$0.0073 per share. The option had a nine-year vesting period, subject to
acceleration for certain events (such as the sale, merger or liquidation of
SCR, or an initial public offering), and an expiration date of April 1, 2002.
Compensation expense of $281,000, which represented the excess of the
estimated fair value of the stock on the date of grant over the exercise
price, was being recognized over the nine-year vesting period. The
unrecognized portion of the compensation expense was recorded as a reduction
of stockholders' equity in the accompanying balance sheet. Effective November
27, 1996, the stock option was exercised in accordance with the acceleration
clause of the option agreement in connection with the acquisition of SCR by
The Registry as described in Note 4, and the remaining unamortized balance of
deferred stock compensation of $164,000 was recorded as expense at that time.
 
                                      50
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
 1994 ARI Stock Plan
 
  In 1994, ARI adopted the 1994 Stock Option Plan (the "1994 Plan"), under
which 411,642 shares of common stock were reserved for issuance to eligible
employees, directors and consultants upon the exercise of stock options. ARI
also had outstanding options to purchase 7,409 shares of common stock and
27,000 shares of Series A Preferred Stock which were granted prior to the
adoption of the 1994 Plan. Stock options were granted at prices determined by
ARI's former Board of Directors and generally may not be less than 100% and
85%, for incentive and nonstatutory options, respectively, of the estimated
fair value of the related shares on the date of grant. Options granted under
the 1994 Plan are for a period not to exceed ten years, are exercisable
beginning generally one year after the date of grant and vest ratably over a
maximum period of five years following the date of grant.
 
  Options which expire or are canceled shall become available for reissuance
under the 1994 Plan. The 1994 Plan provides for an unvested share repurchase
option on behalf of ARI. In the event an optionee ceases to be eligible under
the 1994 Plan for any reason, shares acquired through the exercise of an
option which have not yet vested may be repurchased by ARI at the higher of
the option exercise price or the value of the stock being purchased on the
date of termination. All stock options granted to ARI's former management
employees fully vested in the event of a change of control, as defined by the
Board of Directors.
 
  The Registry does not intend to grant any further options under the 1994
Plan.
 
  Transactions under the 1994 Plan are summarized as follows:
 
<TABLE>
<CAPTION>
                                JUNE 28, 1997       JUNE 29, 1996       JUNE 24, 1995
                             ------------------- ------------------- -------------------
                                        WEIGHTED            WEIGHTED            WEIGHTED
                                        AVERAGE             AVERAGE             AVERAGE
                               NUMBER   EXERCISE   NUMBER   EXERCISE   NUMBER   EXERCISE
                             OF OPTIONS  PRICE   OF OPTIONS  PRICE   OF OPTIONS  PRICE
                             ---------- -------- ---------- -------- ---------- --------
   <S>                       <C>        <C>      <C>        <C>      <C>        <C>
   Outstanding at beginning
    of year................    210,486   $0.23    188,258    $0.23    151,485    $0.16
   Elimination of
    duplicated activity
    from July to December..                           823    $0.24
   Granted.................        --      --      41,164    $0.24     98,794    $0.24
   Exercised...............   (217,621)  $0.27    (18,935)   $0.24    (33,754)   $0.05
   Canceled................        --      --        (824)   $0.24    (28,267)   $0.07
   Conversion of Series A
    Preferred Stock options
    to Common Stock
    options................      7,409   $1.32        --       --         --       --
                              --------            -------             -------
   Outstanding at end of
    year...................        274   $0.24    210,486    $0.23    188,258    $0.23
                              ========            =======             =======
   Options exercisable at
    end of year............        274   $0.24     47,049    $0.20     32,767    $0.20
   Weighted average fair
    value of options
    granted during the
    period.................                --                $0.01               $0.01
   Options available for
    future grant...........    195,942            195,942             237,106
</TABLE>
 
                                      51
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
 
<TABLE>
<CAPTION>
                                             WEIGHTED
                                 NUMBER       AVERAGE   WEIGHTED     NUMBER     WEIGHTED
                              OUTSTANDING    REMAINING  AVERAGE   EXERCISABLE   AVERAGE
      RANGE OF               AS OF JUNE 28, CONTRACTUAL EXERCISE AS OF JUNE 28, EXERCISE
   EXERCISE PRICES                1997         LIFE      PRICE        1997       PRICE
   ---------------           -------------- ----------- -------- -------------- --------
    <S>                      <C>            <C>         <C>      <C>            <C>
    $0.24...................      274          7.47      $0.24        274        $0.24
</TABLE>
 
  ARI also had options to purchase 27,000 shares of Series A Preferred Stock
outstanding at June 24, 1995 and June 29, 1996. On November 26, 1996, in
conjunction with the acquisition of ARI by TRI, all options to purchase Series
A Preferred Stock were converted into options to purchase 7,409 shares of
Common Stock. Additionally, all options outstanding under the 1994 Plan vested
upon the date of the acquisition.
 
 Shares Reserved for Future Issuance
 
  A total of 4,808,707 and 271,911 shares of Registry Common Stock has been
reserved for issuance under TRI's various stock option plans and employee
stock purchase plan, respectively, at June 28, 1997.
 
 Accounting Treatment
 
  The Registry applies Accounting Principles Board Opinion No. 25 and related
Interpretations in accounting for its stock option plans. Compensation is
recognized for the difference between the exercise price of options granted
and the estimated fair value of the related shares on the date of grant, and
is recorded over the vesting period. No compensation was recorded on grants
made in any of the three years in the period ended June 28, 1997. Amortization
of compensation expense totaled $31,000, $31,000 and $179,000 in the years
ended June 24, 1995, June 29, 1996 and June 28, 1997, respectively. The
benefit of tax deductions associated with the exercise of non-qualified stock
options or the disqualifying disposition of shares acquired through the
exercise of incentive stock options in excess of the amount of compensation
recorded for financial reporting purposes is recorded as a credit to
additional paid-in capital.
 
  In October 1995, the FASB issued Statement of Financial Accounting Standards
123 ("SFAS 123") "Accounting for Stock-Based Compensation." SFAS 123 is
effective for periods beginning after December 15, 1995. SFAS 123 requires
that companies either recognize compensation expense for grants of stock
options and other equity instruments based on fair value, or provide pro forma
disclosure of net income and earnings per share in the notes to the financial
statements. The Registry adopted the disclosure provisions only of SFAS 123 in
fiscal 1997. Had compensation cost for The Registry's stock-based compensation
plans been determined based on the fair value at the grant dates as calculated
in accordance with SFAS 123, The Registry's pro forma net income and earnings
per share for the years ended June 29, 1996 and June 28, 1997 would have been
reduced to the pro forma amounts indicated below:
 
<TABLE>
<CAPTION>
                                          YEAR ENDED            YEAR ENDED
                                         JUNE 29, 1996         JUNE 28, 1997
                                     --------------------- ---------------------
                                                 PRO FORMA             PRO FORMA
                                      PRO FORMA  EARNINGS   PRO FORMA  EARNINGS
                                     NET INCOME  PER SHARE NET INCOME  PER SHARE
                                     ----------- --------- ----------- ---------
   <S>                               <C>         <C>       <C>         <C>
   As Reported...................... $ 5,537,000   $0.50   $ 9,972,000   $0.71
   Pro Forma........................ $ 5,241,000   $0.47   $ 6,317,160   $0.45
</TABLE>
 
  Because options vest over several years and this pro forma disclosure only
reflects grants made in the last two fiscal years, the effects of applying
SFAS 123 in this pro forma disclosure are not likely to be representative of
the effects on reported net income for future years.
 
                                      52
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  The fair market value of each stock option granted during the year ended
June 29, 1996 was estimated using the Black-Scholes option-pricing model with
the following weighted-average assumptions: an expected life of 3.6 years,
expected volatility of 0% (as the options were granted prior to the Registry's
registration for its initial public offering), a dividend yield of 0% and
risk-free interest rates of 6%. The fair market value of each stock option
granted during the year ended June 28, 1997 was estimated using the Black-
Scholes option-pricing model with the following weighted-average assumptions:
an expected life of 4.6 years, expected volatility of 43.5%, a dividend yield
of 0% and risk-free interest rates of 6%.
 
  The fair market value of offerings under the Registry's stock purchase plan
was estimated on the date of grant using the Black-Scholes option-pricing
model with the following weighted-average assumptions: an expected life of .5
years, expected volatility of 43.5%, a dividend yield of 0% and risk-free
interest rates of 6% in the fiscal years ended June 29, 1996 and June 28,
1997.
 
12. EMPLOYEE SAVINGS PLAN
 
  The Registry provides an employee retirement savings plan under Section
401(k) of the Internal Revenue Code (the "Plan") which covers substantially
all employees. Under the terms of the Plan, employees may contribute a
percentage of their salary, up to a maximum of 15%, which is then invested in
one or more of several mutual funds selected by the employee. The Registry may
make contributions to the Plan at their discretion; such contributions totaled
$31,000, $50,000 and $81,000 during the years ended June 24, 1995, June 29,
1996 and June 28, 1997, respectively.
 
13. COMMITMENTS
 
  In addition to leasing computer equipment under various capital leases (Note
5), The Registry occupies premises under various noncancelable operating
leases which include terms requiring The Registry to pay a pro-rata portion of
increased operating expenses and real estate taxes. The leases expire on
various dates through 2007, and certain of the leases contain options for
renewal or purchase of the related equipment.
 
  In January 1993, TRI entered into a three year lease with a real estate
trust of which the president and significant shareholder of The Registry is
the sole beneficiary ("the Trust"), which required annual rental payments of
$120,000, payable in equal monthly installments of $10,000. This lease was
amended in January of 1994 upon expansion of the leased area to require annual
rental payments of $150,000, payable in equal monthly installments of $12,500.
This lease was further amended in September 1995 upon expansion of the leased
area to require annual payments of $357,000, payable in equal monthly
installments of $29,800. The term of the lease was also extended through
September 2010. During fiscal 1997, The Registry increased their rental space
in the building, resulting in an increase in the monthly rent to $41,700. In
conjunction with the amendment in September 1995, The Registry has begun to
consolidate the accounts of the Trust on a prospective basis (see Note 15).
 
  Rent expense for the years ended June 24, 1995, June 29, 1996 (excluding
amounts paid to the Trust after September 19, 1995) and June 28, 1997 was
$1,746,000, $2,090,000 and $2,242,000, respectively.
 
                                      53
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
  At June 28, 1997, future minimum rental payments under noncancelable lease
arrangements are as follows, excluding amounts payable to the Trust:
 
<TABLE>
<CAPTION>
                                               OPERATING LEASES CAPITAL LEASES
                                               ---------------- --------------
   <S>                                         <C>              <C>
   1998.......................................   $ 3,340,000       $45,000
   1999.......................................     3,278,000         9,000
   2000.......................................     2,674,000           --
   2001.......................................     2,341,000           --
   2002.......................................     1,666,000           --
   Thereafter.................................     2,245,000           --
                                                 -----------       -------
   Total minimum lease payments...............   $15,544,000        54,000
                                                 ===========
   Less--amount representing interest.........                       6,000
                                                                   -------
   Present value of obligations under capital
    leases....................................                     $48,000
                                                                   =======
</TABLE>
 
14. FINANCIAL INSTRUMENTS
 
  The Registry enters into various types of financial instruments in the
normal course of business. Fair values are estimated based on assumptions
concerning the amount and timing of estimated future cash flows and assumed
discount rates reflecting varying degrees of perceived risk. Accordingly, the
fair values may not represent actual values of the financial instruments that
could have been realized as of year end or that will be realized in the
future.
 
  The carrying amounts of The Registry's financial instruments, which include
marketable securities, accounts receivable, notes receivable, line of credit,
accounts payable, accrued salaries and wages, other accrued expenses, income
taxes payable and long-term debt approximate their fair values at June 29,
1996 and June 28, 1997.
 
15. CONSOLIDATION OF REAL ESTATE TRUST
 
  As described in Note 13, The Registry leases office space from a real estate
trust, of which the president and significant stockholder of The Registry is
the sole beneficiary and an officer of The Registry is the trustee. Effective
September 19, 1995, The Registry renegotiated its lease with the Trust in
conjunction with a refinancing of the Trust's mortgage. The modified lease
terms expanded the amount of space which The Registry occupies, committed The
Registry to rent the facility through the maturity date of the mortgage loan,
and granted The Registry a right of first refusal to lease any space in the
facility currently occupied by other tenants when the tenants' leases expire.
 
  Accordingly, as of this date, The Registry obtained significant control over
the operations of the Trust and assumed a significant portion of the Trust's
obligations. As a result, The Registry has consolidated the accounts of the
Trust as of September 19, 1995 on a prospective basis. As of September 19,
1995, the Trust reported the following assets and liabilities:
 
<TABLE>
   <S>                                                             <C>
   Fixed assets, net.............................................. $ 1,750,000
   Other current assets...........................................      49,000
   Security deposits and deferred income..........................     (84,000)
   Note payable to TRI............................................    (365,000)
   Mortgage loans payable.........................................  (1,461,000)
                                                                   -----------
                                                                   $  (111,000)
                                                                   ===========
</TABLE>
 
                                      54
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  In September 1995, one of the mortgage loans payable by the Trust was
refinanced with a new mortgage loan (see Note 8). At this time, a distribution
of $649,000 was made to the beneficiary of the Trust.
 
  Rental income from tenants during the period from September 19, 1995 through
June 29, 1996 and for the year ended June 28, 1997 was $137,000 and $114,000,
respectively, and is included in interest and other income in the accompanying
consolidated statement of income. As of September 1997, The Registry will
lease all of the remaining space in the building.
 
16. UNAUDITED PRO FORMA INCOME INFORMATION
 
  The following unaudited pro forma income tax information is presented as if
America's Registry and SCR each had been a C corporation subject to federal
and state income taxes throughout the periods presented.
 
<TABLE>
<CAPTION>
                                              YEAR ENDED YEAR ENDED YEAR ENDED
                                               JUNE 24,   JUNE 29,   JUNE 28,
                                                 1995       1996       1997
                                              ---------- ---------- -----------
   <S>                                        <C>        <C>        <C>
   Income before taxes....................... $4,667,000 $9,759,000 $20,527,000
   Pro forma income tax provision............  2,014,000  4,222,000  10,555,000
                                              ---------- ---------- -----------
   Pro forma net income...................... $2,653,000 $5,537,000 $ 9,972,000
                                              ========== ========== ===========
</TABLE>
 
 Net Income Per Share
 
  Pro forma net income per share has been computed by dividing pro forma net
income by the weighted average number of common and common equivalent shares
outstanding, after considering the events described in Notes 2, 4, 10 and 11.
Weighted average common and common equivalent shares include common shares and
common shares which may be issuable upon exercise of outstanding stock
options, computed using the treasury stock method. The weighted average number
of common and common equivalent shares outstanding also includes common shares
issuable upon conversion of ARI's preferred stock, using the exchange ratio of
0.274428 shares of TRI Common Stock for each share of ARI stock. Pursuant to
Securities and Exchange Commissions Staff Accounting Bulletin No. 83, stock
options granted during the twelve months prior to the date of the initial
filing of The Registry's Registration Statement on Form S-1 have been included
in the calculation of common equivalent shares using the treasury stock
method, as if they were outstanding for all periods through the initial public
offering.
 
17. LEGAL SETTLEMENT
 
  In August 1996, ARI received a settlement of $1,625,000 from its insurance
company for payment of defense costs and certain expenses associated with a
previous intellectual property rights matter. This amount, net of related
expenses, has been included in interest and other income in the accompanying
consolidated statement of income.
 
18. SUBSEQUENT EVENTS
 
 Merger with Renaissance Solutions, Inc.
 
  On July 31, 1997, pursuant to an Agreement and plan of Merger dated May 19,
1997, The Registry, through a wholly-owned subsidiary, acquired Renaissance
Solutions, Inc., a Delaware corporation
 
                                      55
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
("Renaissance"). Renaissance provides management consulting and client/server
systems integration services, primarily for large corporations. Pursuant to
the agreement, each outstanding share of Renaissance capital stock was
converted into the right to receive 0.80 shares of The Registry's common
stock. The Registry also assumed outstanding options for the purchase of
Renaissance common stock at the same conversion ratio. Immediately prior to
the acquisition, there were 9,573,204 shares of Renaissance common stock and
options to purchase 1,364,895 shares of Renaissance common stock outstanding.
 
  This transaction will be accounted for as a pooling-of-interests.
Accordingly, beginning with the Company's September 27, 1997 financial
results, the Company's financial statements will be restated to reflect this
acquisition on a historical basis.
 
  Renaissance had a calendar year end and, accordingly, the results of
operations for the year ended December 31, 1995 and December 31, 1996 will be
combined with the results of operations for The Registry's fiscal years ended
June 24, 1995 and June 29, 1996. In order to conform Renaissance's year end to
TRI's fiscal year end, the consolidated statement of income for fiscal 1997
will include six months (July to December 1996) for Renaissance which will
also be included in the consolidated statement of income for the fiscal year
ended June 29, 1996. An adjustment will be made to retained earnings in fiscal
1997 to eliminate the duplication of net income of Renaissance for such six
month period.
 
  During fiscal 1997, Renaissance billed The Registry $501,000 for consulting
services provided to The Registry. This revenue will be eliminated from the
results of operations of the combined entity. No material adjustments to net
assets or results of operations will be necessary to conform the accounting
practices of Renaissance to those of TRI. Certain reclassifications will be
made to the financial statements of Renaissance to conform to TRI's
classifications.
 
                                      56
<PAGE>
 
                               THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
  The following unaudited pro forma information reflects the combined financial
position and results of operations of The Registry and Renaissance as if the
merger had previously occurred.
 
                      (IN THOUSANDS EXCEPT PER SHARE DATA)
 
<TABLE>
<CAPTION>
                                               YEAR ENDED YEAR ENDED YEAR ENDED
                                                JUNE 24,   JUNE 29,   JUNE 28,
                                                  1995       1996       1997
                                               ---------- ---------- ----------
   <S>                                         <C>        <C>        <C>
   STATEMENT OF INCOME DATA:
   Revenue...................................   $189,521   $269,328   $389,043
   Cost of revenue...........................    137,625    192,520    277,499
                                                --------   --------   --------
                                                  51,896     76,808    111,544
   Selling, general and administrative ex-
    penses...................................     40,796     56,985     78,617
   Acquisition-related expenses..............        --       3,524      8,268
                                                --------   --------   --------
   Income from operations....................     11,100     16,299     24,659
   Interest and other income (expense), net..       (704)      (679)     3,892
                                                --------   --------   --------
   Income before taxes.......................     10,396     15,620     28,551
   Income tax provision......................      2,769      7,218     14,434
                                                --------   --------   --------
   Net income................................   $  7,627   $  8,402   $ 14,117
                                                ========   ========   ========
   Unaudited Pro Forma Information:
     Income before taxes.....................   $ 10,396   $ 15,620   $ 28,551
     Pro forma adjustment to officers' sala-
      ry.....................................        --       2,100      1,433
                                                --------   --------   --------
                                                  10,396     17,720     29,984
     Pro forma income tax provision..........      4,311      8,047     15,135
                                                --------   --------   --------
     Pro forma net income....................   $  6,085   $  9,673   $ 14,849
                                                ========   ========   ========
     Pro forma net income per share..........   $   0.36   $   0.53   $   0.68
                                                ========   ========   ========
     Weighted average common and common
      equivalent shares......................     16,746     18,126     21,739
                                                ========   ========   ========
   BALANCE SHEET DATA:
   Cash and cash equivalents.................   $  7,963   $ 63,122   $ 27,561
   Working capital...........................     23,712    107,927    129,363
   Total assets..............................     66,413    147,341    227,034
   Total debt................................     23,136      6,240      4,254
   Stockholders' equity......................     29,358    116,030    188,920
</TABLE>
 
 McClain Group, Inc.
 
  On July 16, 1997, The Registry, through a wholly-owned subsidiary, acquired
all of the outstanding stock of the McClain Group, Inc., a Virginia corporation
("McClain") for $15.4 million in cash. McClain is an information technology
management consulting firm based in Richmond, Virginia. McClain will enhance
The Registry's IT consulting and project management services and will operate
under its strategies consulting subsidiary, Renaissance Solutions, Inc. The
acquisition will be accounted for as a purchase, and accordingly, the purchase
price will be allocated to the assets acquired and liabilities assumed based
upon their estimated fair values as of the date of acquisition. The excess of
consideration paid over the estimated fair value of net assets acquired will be
recorded as goodwill and amortized on a straight line basis over 30 years.
 
                                       57
<PAGE>
 
                              THE REGISTRY, INC.
 
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
 
 
 Technomics Consultants International, Inc.
 
  On July 25, 1997, Renaissance, through a wholly-owned subsidiary, acquired
all of the outstanding stock of Technomics Consultants International, Inc., an
Illinois corporation ("Technomics") for $2.0 million in cash and up to $5.2
million in contingent consideration. Technomics is a management consulting
firm based in Chicago, Illinois with offices in London, England; Hong Kong;
Bombay, India; Tokyo, Japan; Ho Chi Minh City, Vietnam; Shanghai, PRC and
Singapore. The acquisition will be accounted for as a purchase, and
accordingly, the purchase price will be allocated to the assets acquired and
liabilities assumed based upon their estimated fair values as of the date of
acquisition. The excess of consideration paid over the estimated fair value of
net assets acquired will be recorded as goodwill and amortized on a straight
line basis over 30 years.
 
 Eligibility Management Systems, Inc.
 
  On August 27, 1997, The Registry, through a wholly-owned subsidiary,
acquired all of the outstanding stock of the Eligibility Management Systems,
Inc., a Florida corporation ("EMS") for $17 million in cash, of which $15
million was payable at the time of closing and $2 million is payable over the
next two years. An additional $4.0 million in consideration may be payable
subject to certain earnout arrangements. EMS is a management consulting firm
based in Indianapolis, Indiana with offices in Austin, Texas; Denver,
Colorado; Olympia, Washington; and Sacramento and Los Angeles, California. The
acquisition will be accounted for as a purchase, and accordingly, the purchase
price will be allocated to the assets acquired and liabilities assumed based
upon their estimated fair values as of the date of acquisition.
 
  The excess of consideration paid over the estimated fair value of net assets
acquired will be recorded as goodwill and amortized on a straight line basis
over 30 years.
 
                                      58
<PAGE>
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
 
  None.
 
                                   PART III
 
ITEM 10. DIRECTORS OF THE REGISTRANT
 
  The information required by this Item is included in Item I of this report
or will be included under the captions "Election of Class II Director--
Nominee," "Election of Class II Director--Other Directors," "Election of Class
II Director--Board Of Directors and Committees" and "Election of Class II
Director--Director Compensation" in the Proxy Statement, and is incorporated
herein by reference.
 
ITEM 11. EXECUTIVE COMPENSATION
 
  The information required by this Item will be included under the captions
"Executive Compensation--Summary Compensation Table," "Executive
Compensation--Option Grants Under the Stock Option Plan," "Executive
Compensation--Aggregated Option Exercises in the Last Fiscal Year and Fiscal
Year End Option Values" and "Executive Compensation--Employment Agreements" in
the Proxy Statement and is incorporated herein by reference.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
  The information required by this Item will be included under the caption
"Security Ownership of Certain Beneficial Owners and Management" in the Proxy
Statement and is incorporated herein by reference.
 
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
  The information required by this Item will be included under the caption
"Certain Relationships and Related Transactions" in the Proxy Statement and is
incorporated herein by reference.
 
                                    PART IV
 
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
 
  (a) The financial statements and financial statement schedules filed as part
of this Report are listed and indexed at page 25.
 
  Listed below are all Exhibits filed as part of this Report. Certain Exhibits
are incorporated herein by reference to The Registry's Registration Statement
on Form S-1 (File No. 333-3366), The Registry's Registration Statement on Form
S-4 (File No. 333-29755) and Renaissance's Registration Statement on Form S-1
(File No. 33-89524).
 
                                      59
<PAGE>
 
                                  SIGNATURES
 
  PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
 
                                          THE REGISTRY, INC.
 
Date: September 25, 1997
                                                    /s/ G. Drew Conway
                                          By: _________________________________
                                                      G. DREW CONWAY
                                            PRESIDENT, CHIEF EXECUTIVE OFFICER
                                               AND CHAIRMAN OF THE BOARD OF
                                                         DIRECTORS
 
  PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON
THE DATES INDICATED:
 
             SIGNATURES                      CAPACITY                DATE
 
         /s/ G. Drew Conway            President, Chief         September 25,
-------------------------------------   Executive Officer            1997
           G. DREW CONWAY               and Chairman of the
                                        Board of Directors
                                        (Principal
                                        Executive Officer
 
         /s/ Robert E. Foley           Chief Financial          September 25,
-------------------------------------   Officer and                  1997
           ROBERT E. FOLEY              Treasurer
                                        (Principal
                                        Financial and
                                        Accounting Officer)
 
        /s/ Robert P. Badavas          Director                 September 25,
-------------------------------------                                1997
          ROBERT P. BADAVAS
 
         /s/ Paul C. O'Brien           Director                 September 25,
-------------------------------------                                1997
           PAUL C. O'BRIEN
 
                                      60
<PAGE>
 
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT
 NUMBER                      DESCRIPTION OF DOCUMENT                       PAGE
 -------                     -----------------------                       ----
 <C>     <S>                                                               <C>
  2.1(1) Stock Purchase Agreement between the Registrant and Axiom
         Consulting Group, Inc., dated November 30, 1996.
  3.1(1) Articles of Organization of Registrant, as amended through
         April 11, 1996.
  3.2(1) Restated Articles of Organization of Registrant, as filed in
         Massachusetts on May 13, 1996.
  3.3(1) By-Laws of Registrant, as amended through April 11, 1996.
  3.4(1) By-Laws of Registrant, as amended and restated on May 13, 1996.
  4.1(1) Articles 3, 4, 5, and 6 of the Articles of Organization of
         Registrant (included in Exhibit 3.2).
  4.2(1) Specimen Stock Certificate.
 10.1(1) Leases dated September 19, 1995 between the 189 Wells Avenue
         Realty Trust and The Registry for premises located at the 189
         Wells Avenue, Newton, Massachusetts.
 10.2(1) Registrant's 1996 Stock Plan and related form of stock option
         agreement.
 10.3(1) Registrant's 1996 Employee Stock Purchase Plan and related form
         of subscription agreement.
 10.4(1) Registrant's 1996 Eligible Directors' Stock Plan and related
         form of stock option agreement.*
 10.5(1) Accounts Receivable Management and Security Agreement dated as
         of February 29, 1996 by and among BNY Financial Corporation and
         each of The Registry, Inc., America's Registry, Inc. and The
         Registry, Inc. Network Consulting Practice.
 10.6(1) Employment Agreement dated May 1996 between Registrant and G.
         Drew Conway.*
 10.7(1) Amended and Restated Promissory Note dated May 30, 1996,
         payable to Registrant by G. Drew Conway.
 10.8(1) Amended and Restated Promissory Note dated May 30, 1996,
         payable to Registrant by the 189 Wells Avenue Realty Trust.
 10.8(2) Lease Agreement by and between Ladylin Properties Limited
         Partnership and Renaissance Solutions, Inc., dated as of
         November 1, 1993, as amended.
 10.9(3) Registration Rights Agreement dated as of May 19, 1997 among
         David A. Lubin, Harry M. Lasker, O. Bruce Gupton and Melissa E.
         Norton.
 21      Subsidiaries of Registrant.
 23.1    Consent of Price Waterhouse LLP.
 23.2    Consent of Ernst & Young LLP.
 23.3    Consent of Graves, McKenna, Lundeen & Almquist, P.L.L.P.
 27      Financial Data Schedule.
</TABLE>
--------
 * Denotes management contract or compensation arrangements.
(1) Filed as an Exhibit to The Registry's Registration Statement on Form S-1
    (File No. 333-3363) and incorporated by reference herein.
(2) Filed as an Exhibit to Renaissance's Registration Statement on Form S-1
    (33-89524)
(3) Filed as an Exhibit to The Registry's Registration Statement on Form S-4
    (333-29755) and incorporated by reference herein.
 
                                      61
<PAGE>
 
                                                                    SCHEDULE II
 
                              THE REGISTRY, INC.
 
                       VALUATION AND QUALIFYING ACCOUNTS
                                (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                          ADDITIONS        DEDUCTIONS
                                    --------------------- -------------
                         BALANCE AT   CHARGED    CHARGED  WRITE-OFF OF   BALANCE
                         BEGINNING  TO COSTS AND TO OTHER UNCOLLECTIBLE AT END OF
                         OF PERIOD    EXPENSES   ACCOUNTS   ACCOUNTS     PERIOD
                         ---------- ------------ -------- ------------- ---------
<S>                      <C>        <C>          <C>      <C>           <C>
Allowance for doubtful
 accounts:
  Year ended June 24,
   1995(1)..............    $237        $261       $ 0        $149        $349
  Year ended June 29,
   1996.................     349         357         0         193         513
  Year ended June 28,
   1997.................     513         540         0          57         996
</TABLE>
 
                                      62