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

(Mark one)                         FORM 10-Q

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

      For the quarterly period ended December 31, 1995

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF l934

      For the transition period from          to
                                    ----------  ----------

                         Commission File Number 0-16162

                    CHILDREN'S COMPREHENSIVE SERVICES, INC.
                    ---------------------------------------

             (Exact name of registrant as specified in its charter)

         Tennessee                                        62-1240866
-------------------------------                     ----------------------
(State or other jurisdiction of                        (I.R.S. Employer
incorporation or organization)                      Identification Number)

805 South Church Street, Murfreesboro, Tennessee            37130
------------------------------------------------    ----------------------
(Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code    (615) 896-3100
                                                    ----------------------

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 periods that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                                   Yes  X  No
                                      -----  -----

The number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.

Common Stock, $ .01 Par Value, outstanding at February 9, 1996 - 10,757,532
---------------------------------------------------------------------------
shares.
-------




                        Index to Exhibits is on Page 16

<PAGE>   2

                                     INDEX

                    CHILDREN'S COMPREHENSIVE SERVICES, INC.

<TABLE>
<CAPTION>
                                                                            Page
                                                                           Number
                                                                           ------
<S>                                                                          <C>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

    Consolidated Balance Sheets--December 31, 1995
    and March 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

    Consolidated Statements of Operations--
    Three months ended December 31, 1995 and 1994;
    Nine months ended December 31, 1995 and 1994. . . . . . . . . . . . . . . 5

    Consolidated Statements of Cash Flows--
    Nine months ended December 31, 1995 and 1994. . . . . . . . . . . . . . . 6

    Notes to Consolidated Financial Statements--
    December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Item 2. Management's Discussion and
    Analysis of Financial Condition and Results
    of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9


PART II. OTHER INFORMATION

Item 5. Other Information . . . . . . . . . . . . . . . . . . . . . . . . . .14

Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . .14



SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
</TABLE>

                                     -2-
<PAGE>   3
                         PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                    CHILDREN'S COMPREHENSIVE SERVICES, INC.

                    CONSOLIDATED BALANCE SHEETS (UNAUDITED)


<TABLE>
<CAPTION>
                                                   December 31,     March 31,
                                                       1995           1995
                                                   ------------     ---------
<S>                                                <C>            <C>
ASSETS

CURRENT ASSETS
   Cash                                            $  1,496,000   $    69,000
   Accounts receivable, net of allowance
       for doubtful accounts of $153,000 at
       December 31 and $133,000 at March 31           3,367,000     3,432,000
   Prepaid expenses                                     176,000       266,000
   Other current assets                                 254,000       134,000
                                                   ------------   -----------
                          TOTAL CURRENT ASSETS        5,293,000     3,901,000

PROPERTY AND EQUIPMENT, net of accumulated
   depreciation of $4,614,000 at December 31
   and $4,088,000 at March 31                        14,452,000    14,866,000
PROPERTY HELD FOR SALE                                      -0-       165,000
NOTE RECEIVABLE                                         217,000           -0-
NON-COMPETITION AGREEMENTS, net of accumulated
   amortization of $1,937,000 at December 31
   and $1,750,000 at March 31                            63,000       250,000
OTHER ASSETS AND DEFERRED CHARGES, at cost,
   net of accumulated amortization of
   $319,000 at December 31 and $259,000
   at March 31                                          161,000       267,000
                                                   ------------   -----------
                                  TOTAL ASSETS     $ 20,186,000   $19,449,000
                                                   ============   ===========
</TABLE>


                                     -3-
<PAGE>   4

                    CHILDREN'S COMPREHENSIVE SERVICES, INC.

              CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Continued)


<TABLE>
<CAPTION>
                                                   December 31,      March 31,
                                                       1995            1995
                                                   ------------      ---------
<S>                                                <C>             <C>
LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
   Accounts payable                                 $   287,000     $   658,000
   Current maturities--long term debt:
     Related party                                          -0-          59,000
     Other                                              193,000         177,000
   Accrued employee compensation                      1,001,000         716,000
   Income taxes payable                                 112,000          69,000
   Accrued other expenses                               665,000         673,000
   Deferred revenue                                     342,000         127,000
                                                    -----------     -----------
                       TOTAL CURRENT LIABILITIES      2,600,000       2,479,000

LONG TERM DEBT:
   Related party                                            -0-         672,000
   Other                                              6,107,000       6,252,000
DEFERRED TAXES PAYABLE                                  125,000         125,000
OTHER LIABILITIES                                       365,000         465,000
                                                    -----------     -----------
                               TOTAL LIABILITIES      9,197,000       9,993,000
                                                    -----------     -----------
STOCKHOLDERS' EQUITY
   Preferred stock, par value $1.00 per
     share--10,000,000 shares authorized                    -0-             -0-
   Common stock, par value $ .01 per share --
     20,000,000 shares authorized; issued and
     outstanding 10,757,532 shares at December 31
     and 10,711,782 shares at March 31                  108,000         107,000
   Additional paid-in capital                        25,372,000      25,317,000
   Accumulated (deficit)                            (14,491,000)    (15,968,000)
                                                    -----------     -----------
                      TOTAL STOCKHOLDERS' EQUITY     10,989,000       9,456,000
                                                    -----------     -----------
                           TOTAL LIABILITIES AND
                            STOCKHOLDERS' EQUITY    $20,186,000     $19,449,000
                                                    ===========     ===========

</TABLE>





                See notes to consolidated financial statements.



                                     -4-
<PAGE>   5
                    CHILDREN'S COMPREHENSIVE SERVICES, INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)


<TABLE>
<CAPTION>
                                        Three Months Ended            Nine Months Ended
                                            December 31,                 December 31,
                                     -------------------------     -------------------------
                                         1995          1994           l995           1994
                                     -----------   -----------     -----------   -----------
<S>                                  <C>           <C>             <C>           <C>
Revenues:
  Operating revenues                 $ 5,831,000   $ 4,960,000     $16,671,000   $14,789,000
  Management fee income                  373,000       116,000         727,000       196,000
  Other revenue                           10,000       151,000          13,000       166,000
                                     -----------   -----------     -----------   -----------
                    TOTAL REVENUES     6,214,000     5,227,000      17,411,000    15,151,000

Expenses:
  Employee compensation
    and benefits                       3,738,000     3,179,000      10,574,000     9,151,000
  Purchased services and
    other expenses                     1,166,000       900,000       3,465,000     2,825,000
  Depreciation and amortization          253,000       273,000         774,000       804,000
  Interest:
    Banks and other                      202,000       234,000         621,000       753,000
    Related parties                          -0-        38,000          49,000       185,000
  Provision for bad debts                 29,000        31,000          29,000        68,000
  Related party rent                      25,000        25,000          76,000        76,000
                                     -----------   -----------     -----------   -----------
                    TOTAL EXPENSES     5,413,000     4,680,000      15,588,000    13,862,000
                                     -----------   -----------     -----------   -----------
Income before income taxes and
  extraordinary item                     801,000       547,000       1,823,000     1,289,000
Provision for income taxes               133,000        19,000         292,000        44,000
                                     -----------   -----------     -----------   -----------
Income before extraordinary item         668,000       528,000       1,531,000     1,245,000
Extraordinary item:
  Loss on early extinguishment of
    debt, net of income tax benefit
    of $11,000                               -0-           -0-          54,000           -0-
                                     -----------   -----------     -----------   -----------
                        NET INCOME   $   668,000   $   528,000     $ 1,477,000   $ 1,245,000
                                     ===========   ===========     ===========   ===========
Earnings per common share:
  Income before extraordinary item   $       .06   $       .05     $       .14   $       .12
  Extraordinary item                         -0-           -0-            (.01)          -0-
                                     -----------   -----------     -----------   -----------
                        NET INCOME   $       .06   $       .05     $       .13   $       .12
                                     ===========   ===========     ===========   ===========
Earnings per common share--
  assuming full dilution:
  Income before extraordinary item   $       .06   $       .05     $       .14   $       .11
  Extraordinary item                         -0-           -0-            (.01)          -0-
                                     -----------   -----------     -----------   -----------
                        NET INCOME   $       .06   $       .05     $       .13   $       .11
                                     ===========   ===========     ===========   ===========
</TABLE>



                See notes to consolidated financial statements.



                                     -5-
<PAGE>   6
                    CHILDREN'S COMPREHENSIVE SERVICES, INC.

               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)


<TABLE>
<CAPTION>
                                                        Nine Months Ended
                                                           December 31,
                                                    --------------------------
                                                        1995           1994
                                                    -----------    -----------
<S>                                                 <C>            <C>
OPERATING ACTIVITIES
  Net income                                        $ 1,477,000    $ 1,245,000
  Adjustments to reconcile net income
     to net cash provided by operating
       activities:
     Depreciation                                       587,000        615,000
     Amortization                                       187,000        189,000
     Amortization of deferred loan costs                 60,000        139,000
     Provision for bad debts                             29,000            -0-
     Loss on early extinguishment of debt                65,000            -0-
     Other                                               19,000        (16,000)
  Changes in operating assets and liabilities:
     Decrease in accounts receivable                     36,000        333,000
     Decrease in prepaid expenses                        90,000         96,000
     (Increase) in other current assets                (120,000)      (383,000)
     (Decrease) in accounts payable                    (371,000)      (235,000)
     Increase (decrease) in accrued employee
       compensation                                     285,000       (274,000)
     (Decrease) in accrued expenses                      (8,000)      (369,000)
     Increase in deferred revenue                       159,000         25,000
     Increase in income taxes payable                    43,000         43,000
     Decrease in other liabilities                     (100,000)      (100,000)
                                                    -----------    -----------
                             NET CASH PROVIDED BY
                             OPERATING ACTIVITIES     2,438,000      1,308,000
                                                    -----------    -----------
INVESTING ACTIVITIES
  Purchase of property and equipment                   (209,000)      (311,000)
  Proceeds from sale of property and equipment           37,000         15,000
  (Increase) in other assets                            (19,000)      (233,000)
                                                    -----------    -----------
                               NET CASH (USED) BY
                             INVESTING ACTIVITIES   $  (191,000)   $  (529,000)
                                                    -----------    -----------
</TABLE>




 
                                     -6-
<PAGE>   7

                    CHILDREN'S COMPREHENSIVE SERVICES, INC.

         CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (Continued)



<TABLE>
<CAPTION>
                                                      Nine Months Ended
                                                          December 31,
                                                 ----------------------------
                                                     1995            1994
                                                 -----------      -----------
<S>                                              <C>              <C>
FINANCING ACTIVITIES
  Proceeds from revolving lines of credit
     and long-term borrowings                    $ 3,436,000      $12,465,000
  Principal payments on revolving lines of
     credit, long-term borrowings and
     capital lease obligations                    (3,565,000)     (12,716,000)
  Principal payments on notes payable
     and long-term borrowings--related parties      (731,000)        (928,000)
  Principal payments on mortgage notes
     payable                                             -0-       (1,300,000)
  Proceeds from issuance of Common Stock              63,000        1,858,000
  Stock issuance/registration costs                  (23,000)             -0-
                                                 -----------      -----------
                             NET CASH (USED) BY
                           FINANCING ACTIVITIES     (820,000)        (621,000)
                                                 -----------      -----------
INCREASE IN CASH AND CASH
  EQUIVALENTS                                      1,427,000          158,000
  Cash and cash equivalents at
     beginning of period                              69,000          178,000
                                                 -----------      -----------
                      CASH AND CASH EQUIVALENTS
                               AT END OF PERIOD  $ 1,496,000      $   336,000
                                                 ===========      ===========
SUPPLEMENTAL INFORMATION
  Income taxes paid                              $   239,000      $       -0-
  Interest paid                                      622,000          784,000
</TABLE>





                See notes to consolidated financial statements.




                                     -7-
<PAGE>   8

                    CHILDREN'S COMPREHENSIVE SERVICES, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                               December 31, 1995

NOTE A -- BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X.  Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.  In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included.  Operating results for the three and nine
month periods ended December 31, 1995 are not necessarily indicative of the
results that may be expected for the year ending March 31, 1996.  For further
information, refer to the financial statements and footnotes thereto for the
year ended March 31, 1995.

NOTE B -- EARNINGS PER COMMON SHARE

Net income per share has been computed on the basis of the weighted average
number of shares outstanding and common stock equivalents, consisting of
dilutive stock options and warrants.

NOTE C -- CONTINGENCIES

On October 27, 1995, a civil action was filed in the Circuit Court of Colbert
County, Alabama against the Company and certain of the Company's employees in
connection with the circumstances surrounding the alleged wrongful death of a
juvenile enrolled at the Company's wilderness program in Jasper, Alabama.  The
complaint, among other things, alleges negligence and civil rights violations
on the part of the Company and seeks an unspecified amount of damages.  The
action has been removed from the Circuit Court of Colbert County to the United
States District Court for the Northern District of Alabama, Northwestern
Division.  While management believes the allegations are without merit and
intends to defend the litigation vigorously, management is unable at this time
to estimate the effect of any settlement or adverse judgment on the results of
operations or financial condition of the Company.




                                     -8-

<PAGE>   9
        ITEM 2.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS

        The following table sets forth, for the periods indicated, operating
revenues from youth services and the amounts and percentage of certain items
relative to total revenues:



<TABLE>
<CAPTION>
                                         Three Months Ended                          Nine Months Ended
                                           December 31,                                 December 31,
                              -----------------------------------------   ------------------------------------------
                                     1995                 1994                  1995                   1994
                              -------------------   -------------------   -------------------   --------------------
<S>                           <C>          <C>      <C>          <C>      <C>          <C>      <C>          <C>
Operating revenues            $ 5,831,000   93.8%   $ 4,960,000   94.9%   $16,671,000   95.7%   $14,789,000   97.6%
Management fee income             373,000    6.0        116,000    2.2        727,000    4.2        196,000    1.3
Other revenues                     10,000    0.2        151,000    2.9         13,000    0.1        166,000    1.1
                              -----------  -----    -----------  -----    -----------  -----    -----------  -----
Total revenues                $ 6,214,000  100.0%   $ 5,227,000  100.0%   $17,411,000  100.0%   $15,151,000  100.0%
                              ===========  =====    ===========  =====    ===========  =====    ===========  =====
Employee compensation and
  benefits                    $ 3,738,000   60.2%   $ 3,179,000   60.8%   $10,574,000   60.7%   $ 9,151,000   60.4%
                              ===========  =====    ===========  =====    ===========  =====    ===========  =====
Purchased services and
  other expenses              $ 1,166,000   18.8%   $   900,000   17.2%   $ 3,465,000   19.9%   $ 2,825,000   18.6%
                              ===========  =====    ===========  =====    ===========  =====    ===========  =====
Depreciation and amortization $   253,000    4.1%   $   273,000    5.2%   $   774,000    4.4%   $   804,000    5.3%
                              ===========  =====    ===========  =====    ===========  =====    ===========  =====
Interest - banks and other    $   202,000    3.3%   $   272,000    5.2%   $   670,000    3.8%   $   938,000    6.2%
                              ===========  =====    ===========  =====    ===========  =====    ===========  =====
</TABLE>


      Results of Operations

      Three Months Ended December 31, 1995 and December 31, 1994

      Total operating revenues for the three months ended December 31, 1995
increased by $871,000 or 17.6% over the same period in the prior fiscal year.
The increase in operating revenues results primarily from the impact of
programs opened in Eutaw, Alabama, Jacksonville, Florida and Steele Canyon,
California, and from census increases at the Company's Chula Vista, California
campus.

      Management fee income under the Company's management contract with
Helicon, Inc. for the three months ended December 31, 1995 totaled $373,000, as
compared to $116,000 for the three months ended December 31, 1994.  Additional
management fee income of $160,000 for the three months ended December 31, 1994
was not recognized by the Company due to the inability of Helicon, Inc. to pay
these amounts.  Future payments, if any, of these amounts will be recognized by
the Company as income on the cash basis.

      Other revenue during the three months ended December 31, 1995 totaled
$10,000, as compared to $151,000 for the three months ended December 31, 1994.
Other revenue for the three months ended December 31, 1994 consisted primarily
of $150,000 received by the Company pursuant to a settlement of certain workers
compensation litigation.




                                     -9-
<PAGE>   10
    Employee compensation and benefits for the three months ended December 31,
1995 totaled $3,738,000, as compared to $3,179,000 for the three months ended
December 31, 1994, an increase of 17.6%.  When expressed as a percentage of
total revenues, employee compensation and benefits decreased from 60.8% for the
three months ended December 31, 1994 to 60.2% for the three months ended
December 31, 1995.  The increase in employee compensation and benefits over the
same period in the prior year results primarily from the opening of new
programs at Eutaw, Alabama, Jacksonville, Florida and Steele Canyon,
California, increased staffing requirements at certain other programs and an
increase in corporate personnel costs, principally incurred for operations and
business development.

    Purchased services and other expenses for the three months ended December
31, 1995 totaled $1,166,000, as compared to $900,000 for the three months ended
December 31, 1994, an increase of 29.6%.  When expressed as a percentage of
total revenues, purchased services and other expenses increased from 17.2% for
the three months ended December 31, 1994 to 18.8% for the three months ended
December 31, 1995.  The increase in purchased services and other expenses over
the same period in the prior year is attributed primarily to the opening of new
programs at Eutaw, Alabama, Jacksonville, Florida and Steele Canyon,
California, program expansion at the Company's Chula Vista, California campus,
and increases in consulting and marketing expenses, net of a reduction in audit
expense.

    Depreciation and amortization decreased from $273,000 for the three months
ended December 31, 1994 to $253,000 for the three months ended December 31,
1995, a decrease of 7.3%.

    Interest expense decreased from $272,000 for the three months ended
December 31, 1994 to $202,000 for the three months ended December 31, 1995, a
decrease of 25.7%.  The decrease in interest expense over the same period in
the prior year is attributed primarily to a reduction in the average balance of
debt outstanding and to a decrease in the amortization of deferred loan costs.

    Provision for income tax expense increased from $19,000 for the three
months ended December 31, 1994 to $133,000 for the three months ended December
31, 1995.  The Company's effective tax rate is significantly less than the
statutory tax rate because of the presence, at March 31, 1995, of tax loss
carryforwards of $7,030,000.  The increase in the Company's effective tax rate
over the same period in the prior year results from the presence of annual
limitations on the utilization of the net operating loss carryforwards pursuant
to Internal Revenue Code Section 382.

Nine Months Ended December 31, 1995 and December 31, 1994

    Total operating revenues for the nine months ended December 31, 1995
increased by $1,882,000 or 12.7% over the same period in the prior fiscal year.
The increase in operating revenues results primarily from the impact of
programs opened in Jasper and Eutaw, Alabama, Jacksonville, Florida and Steele
Canyon, California, and from census increases at the Company's Chula Vista and
Ramona, California and New Orleans, Louisiana campuses, net of a decrease at
the Company's San Bernardino, California campus due to a decrease in census.





                                     -10-
<PAGE>   11
    Management fee income under the Company's management contract with Helicon,
Inc. for the nine months ended December 31, 1995 totaled $727,000, as compared
to $196,000 for the nine months ended December 31, 1994.  Additional management
fee income of $217,000 for the nine months ended December 31, 1995 and $581,000
for the nine months ended December 31, 1994 was not recognized by the Company
due to the inability of Helicon, Inc. to pay these amounts.  Future payments,
if any, of these amounts will be recognized by the Company as income on the
cash basis.

    Other revenue during the nine months ended December 31, 1995 totaled
$13,000, as compared to $166,000 for the nine months ended December 31, 1994.
Other revenue for the nine months ended December 31, 1994 consisted primarily
of $150,000 received by the Company pursuant to a settlement of certain workers
compensation litigation.

    Employee compensation and benefits for the nine months ended December 31,
1995 totaled $10,574,000, as compared to $9,151,000 for the nine months ended
December 31, 1994, an increase of 15.6%.  When expressed as a percentage of
total revenues, employee compensation and benefits increased from 60.4% for the
nine months ended December 31, 1994 to 60.7% for the nine months ended December
31, 1995.  The increase in employee compensation and benefits over the same
period in the prior year results primarily from the opening of new programs at
Jasper and Eutaw, Alabama, Jacksonville, Florida and Steele Canyon, California,
increased staffing requirements at certain other programs and an increase in
corporate personnel costs, primarily incurred for operations and business
development.

    Purchased services and other expenses for the nine months ended December
31, 1995 totaled $3,465,000, as compared to $2,825,000 for the nine months
ended December 31, 1994, an increase of 22.7%.  When expressed as a percentage
of total revenues, purchased services and other expenses increased from 18.6%
for the nine months ended December 31, 1994 to 19.9% for the nine months ended
December 31, 1995.  The increase in purchased services and other expenses over
the same period in the prior year is attributed primarily to the opening of new
programs at Jasper and Eutaw, Alabama, Jacksonville, Florida and Steele Canyon,
California, program expansion at the Company's Chula Vista, California campus,
and increases in consulting, marketing, and legal expense, net of a reduction
in audit expense.

    Depreciation and amortization decreased from $804,000 for the nine months
ended December 31, 1994 to $774,000 for the nine months ended December 31,
1995, a decrease of 3.7%.

    Interest expense decreased from $938,000 for the nine months ended December
31, 1994 to $670,000 for the nine months ended December 31, 1995, a decrease of
28.6%.  The decrease in interest expense over the same period in the prior year
is attributed primarily to a reduction in the average balance of debt
outstanding and to a decrease in the amortization of deferred loan costs.




                                     -11-
<PAGE>   12
    Provision for income tax expense increased from $44,000 for the nine months
ended December 31, 1994 to $292,000 for the nine months ended December 31,
1995.  The Company's effective tax rate is significantly less than the
statutory tax rate because of the presence, at March 31, 1995, of tax loss
carryforwards of $7,030,000.  The increase in the Company's effective tax rate
over the same period in the prior year results from the presence of annual
limitations on the utilization of the net operating loss carryforwards pursuant
to Internal Revenue Code Section 382.

    The loss on the early extinguishment of debt of $65,000 before the related
income tax benefit of $11,000 resulted from the writeoff of deferred loan costs
associated with the Company's term loan with T. Rowe Price Strategic Partners
Fund II, L.P. (T. Rowe Price).  This writeoff was required due to the Company's
retirement of the remaining principal balance of $708,000 outstanding under the
Company's loan with T. Rowe Price.

Liquidity and Capital Resources

    Cash provided by operating activities increased from $1,308,000 for the
nine months ended December 31, 1994 on net income of $1,245,000 to $2,438,000
for the nine months ended December 31, 1995 on net income of $1,477,000.
Working capital at December 31, 1995 was $2,693,000, as compared to $1,422,000
at March 31, 1995.

     Cash used by investing activities decreased from $529,000 for the nine
months ended December 31, 1994 to $191,000 for the nine months ended December
31, 1995, due primarily to a reduction in cash outlays for the purchase of
property and equipment and for the incurrence of deferred loan fees.  Cash used
by financing activities increased from $621,000 for the nine months ended
December 31, 1994 to $820,000 for the nine months ended December 31, 1995.

     In September 1994, the Company executed agreements with National Health
Investors, Inc. ("NHI"), T. Rowe Price and First American National Bank
("FANB").  Under the terms of these agreements, the Company refinanced all of
its existing short-term obligations through five-year term loans from NHI and
T. Rowe Price for $6.5 million (at 11.5% per annum) and $1.0 million (at 12%
per annum), respectively.  During the period ended September 30, 1995, the
Company made unscheduled principal payments of approximately $708,000 towards
the T. Rowe Price term loan, resulting in the retirement of the remaining
obligation under that loan.  The Company wrote off deferred loan costs of
approximately $65,000 in connection with the early retirement of the T. Rowe
Price loan.

     The agreement with NHI gives NHI a 25% interest in any increases in the
equity of the Company's operations at the Helicon Youth Center in Riverside,
California and Grand Terrace School in Grand Terrace, California.  Any amounts
due NHI under the provisions of the equity participation agreement will not be
payable until the repayment of the loan.  At December 31, 1995, the amount due
under the equity participation agreement was $-0-.




                                     -12-
<PAGE>   13
     The agreement with NHI also required the Company to provide a debt service
reserve equal to six months payments of principal and interest, an amount which
totals approximately $460,000.  This reserve was established through the
execution of an irrevocable letter of credit through FANB.  The NHI agreement
is secured primarily by a first priority lien on substantially all of the
Company's real estate, improvements and equipment.

     The Company also obtained through FANB a $2.5 million one-year revolving
line of credit in September 1994.  This line of credit, which was renewed in
September 1995 for a term of one year, bears interest at prime + 3/4% (9.25% as
of December 31, 1995) and is secured primarily by a first priority lien on the
Company's accounts and notes receivable.  There were no borrowings outstanding
under the line of credit at December 31, 1995.  Availability under the line of
credit at December 31, 1995 was approximately $2,040,000, as the issuance of
the letter of credit of approximately $460,000 in favor of NHI for the debt
service reserve referred to above reduced the Company's available credit by a
like amount.

     The credit agreement with NHI and the FANB line of credit require the
Company to comply with certain restrictive covenants with respect to its
business and operations and to maintain certain financial ratios that become
more stringent over time.  The restrictive covenants under these agreements
prohibit the Company, without the prior consent of its lenders, from entering
into major corporate transactions, such as a merger, tender offer or sale of
its assets, incurring additional indebtedness, and, under the FANB line of
credit, declaring cash dividends.

     The Company is obligated under no significant commitments.  Capital
expenditures are expected to be minimal during fiscal 1996, limited to
replacement of existing capital assets as necessary.  Current obligations,
typically due within thirty days or less, are expected to be funded with cash
flow from operations and borrowings under the Company's working capital line of
credit.  Management believes that operations and amounts available under its
working capital line of credit will provide sufficient cash flow for the next
twelve months and that long-term liquidity requirements will be met from cash
flow from operations and outside financing sources.

Inflation

    Inflation has not had a significant impact on the Company's results of
operation since inception.  Certain of the Company's existing contracts provide
for annual price increases based upon changes in the Consumer Price Index.

Impact of Accounting Changes

    There are no pending accounting pronouncements that, when adopted, are
expected to have a material effect on the Company's results of operations or
its financial position.





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<PAGE>   14

PART II.  OTHER INFORMATION

Item 5.   Other Information

          The Board of Directors of the Company has approved, subject to
          shareholder approval, a proposal to approve an amendment to the
          Company's Restated Charter which will reduce the number of authorized
          shares of Common Stock from 20,000,000 to 10,000,000 shares (the
          "Charter Amendment") and concurrently to effect a one-for-two reverse
          stock split of the Common Stock (the "Reverse Stock Split").  Under
          the Charter Amendment, the par value of the Common Stock will remain
          $0.01 per share.

          Shareholder approval of the Charter Amendment and the Reverse Stock
          Split will be sought at a Special Meeting of Shareholders (the
          "Special Meeting") to be held on March 21, 1996.  All shareholders of
          record as of February 1, 1996, are entitled to notice of and to vote
          at the Special Meeting.

          If the Charter Amendment and the Reverse Stock Split are approved by
          the shareholders, each holder of record of Common Stock on the
          effective date of the Charter Amendment (the "Effective Date") will
          thereafter be deemed to hold one share of Common Stock for every two
          presently issued and outstanding shares of Common Stock held on the
          Effective Date.  No fractional shares will be issued and, in lieu of
          any fractional shares, shareholders who own shares which are not
          evenly divisible by two shall receive an amount of cash based on the
          closing sale price of the Common Stock as reported on the Nasdaq
          National Market on the Effective Date for each fractional share of
          Common Stock surrendered.

Item 6.   Exhibits and Reports on Form 8-K

          (a)     The following exhibits are included herein:
                  (11)  Statement re:  computation of earnings per share.
                  (27)  Financial Data Schedule (for SEC use only)

          (b)     Reports on Form 8-K:

          There were no reports on Form 8-K for the three months ended December
          31, 1995.




                                     -14-
<PAGE>   15
                                   SIGNATURES


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


                                   CHILDREN'S COMPREHENSIVE SERVICES, INC.
                                   ---------------------------------------
                                                (Registrant)


Date:  February 12, 1996           /s/WILLIAM J BALLARD
                                   ----------------------------------------
                                      William J Ballard
                                      Chairman, Chief Executive Officer and
                                      President (Principal Executive
                                      Officer)


Date:  February 12, 1996           /s/DONALD B. WHITFIELD
                                   ----------------------------------------
                                      Donald B. Whitfield
                                      Vice President of Finance, Secretary
                                      and Treasurer (Principal Financial
                                      and Accounting Officer)




                                     -15-
<PAGE>   16

                                 Exhibit Index

Exhibit No.                                                           

     11        Computation of Per Share Earnings                       

     27        Financial Data Schedule (SEC use only)




                                     -16-