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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

|  |  |                                             
|- |  | --------------------------------------------
|x |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR  
|  |  | 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 30, 2003

OR

|  |  |                                                                                         
|- |  | ----------------------------------------------------------------------------------------
|o |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to

Commission File Number: 333-49821

MSX International, Inc.
(Exact name of registrant as specified in its charter)

|                                                                                    |  |                                                
|----------------------------------------------------------------------------------- |  | -----------------------------------------------
|Delaware
(State or other jurisdiction
of incorporation or organization)             |  | 38-3323099
(I.R.S. Employer Identification No.)
|                                                                                    |  |                                                
|22355 W. Eleven Mile, Southfield, Michigan
(Address of principal executive offices) |  | 48034
(Zip Code)                               

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. Yes x No o

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12(b)-2 of the Securities and Exchange Act of 1934). Yes o
No x



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MSX INTERNATIONAL, INC.
 INDEX







TABLE OF CONTENTS



|                                      |                                                                                               |                                                                                                                   |  |  |  |  |  | 
|------------------------------------- | --------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION        
|                                      | ITEM 1. Financial Statements:                                                                
|                                      |                                                                                               | Consolidated Balance Sheets as of March 30, 2003 (Unaudited) and December 29, 2002                               
|                                      |                                                                                               | Consolidated Statements of Operations (Unaudited) for the Fiscal Quarters Ended March 30, 2003 and March 31, 2002
|                                      |                                                                                               | Consolidated Statements of Cash Flows (Unaudited) for the Fiscal Quarters Ended March 30, 2003 and March 31, 2002
|                                      |                                                                                               | Notes to Consolidated Financial Statements (Unaudited)                                                           
|                                      | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                      | ITEM 4. CONTROLS AND PROCEDURES                                                              
|PART II. OTHER INFORMATION           
|                                      | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURE                            
|CERTIFICATION                        
|Certification Pursuant to Section 906



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|                             |                                                                                              |                                                                                                                   |    |       |   | 
|---------------------------- | -------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------- | -- | ----- | - | 
|PART I.FINANCIAL INFORMATION |                                                                                              |                                                                                                                   |    |      
|                             |                                                                                              |                                                                                                                   |    |      
|                             | ITEM 1.Financial Statements:                                                                 |                                                                                                                   |    | Pages |  
|                             |                                                                                              |                                                                                                                   |    |      
|                             |                                                                                              | Consolidated Balance Sheets as of March 30, 2003 (Unaudited) and
December 29, 2002                                |    |       | 2 | 
|                             |                                                                                              |                                                                                                                   |    |      
|                             |                                                                                              | Consolidated Statements of Operations (Unaudited) for the Fiscal Quarters
Ended March 30, 2003 and March 31, 2002 |    |       | 3 | 
|                             |                                                                                              |                                                                                                                   |    |      
|                             |                                                                                              | Consolidated Statements of Cash Flows (Unaudited) for the Fiscal Quarters
Ended March 30, 2003 and March 31, 2002 |    |       | 4 | 
|                             |                                                                                              |                                                                                                                   |    |      
|                             |                                                                                              | Notes to Consolidated Financial Statements (Unaudited)                                                            |    |       | 5 | 
|                             |                                                                                              |                                                                                                                   |    |      
|                             | ITEM 2.Managements Discussion and Analysis of Financial Condition and
Results of Operations |                                                                                                                   |    | 15    |  
|                             |                                                                                              |                                                                                                                   |    |      
|                             | ITEM 4.Controls and Procedures                                                               |                                                                                                                   |    | 18    |  
|                             |                                                                                              |                                                                                                                   |    |      
|PART II.OTHER INFORMATION    |                                                                                              |                                                                                                                   |    |      
|                             |                                                                                              |                                                                                                                   |    |      
|                             | ITEM 6. Exhibits and Reports on Form 8-K                                                     |                                                                                                                   |    | 19    |  
|                             |                                                                                              |                                                                                                                   |    |      
|SIGNATURE                    |                                                                                              |                                                                                                                   | 20 |      
|                             |                                                                                              |                                                                                                                   |    |      
|CERTIFICATIONS               |                                                                                              |                                                                                                                   | 21 |      

1



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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

MSX INTERNATIONAL, INC.

CONSOLIDATED BALANCE SHEETSas of March 30, 2003 and December 29, 2002

|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |          |         |              |         |          |  
|-------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------- | ------------------------------------------- | ------- | ---------------------- | -------- | ------- | ------------ | ------- | -------- | -
|                                                         |                                                                                                                                                                             |                           |                                             |         | March 30,              |          |         |              |         |         
|                                                         |                                                                                                                                                                             |                           |                                             |         | 2003                   |          |         | December 29, |        
|                                                         |                                                                                                                                                                             |                           |                                             |         | (Unaudited)            |          |         | 2002         |        
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |          |         |              |        
|                                                         |                                                                                                                                                                             |                           |                                             |         | (dollars in thousands) |         
|ASSETS                                                   |                                                                                                                                                                             |                           |                                             |         |                        |          |         |             
|Current assets:                                          |                                                                                                                                                                             |                           |                                             |         |                        |          |         |             
|                                                         | Cash and cash equivalents                                                                                                                                                   |                           | $                                           | 3,886   |                        |          | $       | 10,935       |        
|                                                         | Accounts receivable, net (Note 5)                                                                                                                                           |                           |                                             | 219,587 |                        |          |         | 211,957      |        
|                                                         | Inventory                                                                                                                                                                   |                           |                                             | 4,188   |                        |          |         | 4,824        |        
|                                                         | Prepaid expenses and other assets                                                                                                                                           |                           |                                             | 9,233   |                        |          |         | 7,277        |        
|                                                         | Deferred income taxes, net                                                                                                                                                  |                           |                                             | 3,871   |                        |          |         | 6,557        |        
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|                                                         |                                                                                                                                                                             | Total current assets      |                                             |         | 240,765                |          |         |              | 241,550 |         
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|Property and equipment, net                              |                                                                                                                                                                             |                           | 36,784                                      |         |                        |          | 39,186  |             
|Goodwill, net (Note 3)                                   |                                                                                                                                                                             |                           | 128,544                                     |         |                        |          | 127,254 |             
|Other assets                                             |                                                                                                                                                                             |                           | 12,275                                      |         |                        |          | 11,732  |             
|Deferred income taxes, net                               |                                                                                                                                                                             |                           | 16,161                                      |         |                        |          | 12,820  |             
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |          |        
|                                                         |                                                                                                                                                                             | Total assets              |                                             | $       | 434,529                |          |         | $            | 432,542 |         
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|LIABILITIES AND SHAREHOLDERS DEFICIT                    |                                                                                                                                                                             |                           |                                             |         |                        |          |         |             
|Current liabilities:                                     |                                                                                                                                                                             |                           |                                             |         |                        |          |         |             
|                                                         | Notes payable and current portion of long-term debt (Note 6)                                                                                                                |                           | $                                           | 14,979  |                        |          | $       | 14,671       |        
|                                                         | Accounts payable and drafts                                                                                                                                                 |                           |                                             | 128,769 |                        |          |         | 132,358      |        
|                                                         | Accrued payroll and benefits                                                                                                                                                |                           |                                             | 30,722  |                        |          |         | 28,252       |        
|                                                         | Other accrued liabilities                                                                                                                                                   |                           |                                             | 51,096  |                        |          |         | 61,786       |        
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|                                                         |                                                                                                                                                                             | Total current liabilities |                                             |         | 225,566                |          |         |              | 237,067 |         
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|Long-term debt (Note 6)                                  |                                                                                                                                                                             |                           | 237,029                                     |         |                        |          | 220,003 |             
|Long-term deferred compensation and other liabilities    |                                                                                                                                                                             |                           | 10,170                                      |         |                        |          | 11,494  |             
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|                                                         |                                                                                                                                                                             | Total liabilities         |                                             |         | 472,765                |          |         |              | 468,564 |         
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|Minority interests                                       |                                                                                                                                                                             |                           | 114                                         |         |                        |          | 166     |             
|Mandatorily Redeemable Series A Preferred Stock (Note 7) |                                                                                                                                                                             |                           | 74,823                                      |         |                        |          | 72,629  |             
|Shareholders deficit:                                   |                                                                                                                                                                             |                           |                                             |         |                        |          |         |             
|                                                         | Common Stock, $.01 par value, 200,000,000 aggregate shares
of
Class A and Class B Common Stock authorized; 20,054,000
shares of Class A Common Stock issued and outstanding |                           |                                             | 201     |                        |          |         | 201          |        
|                                                         | Additional paid-in-capital                                                                                                                                                  |                           |                                             | (21,879 | )                      |          |         | (21,879      | )      
|                                                         | Note receivable from officer                                                                                                                                                |                           |                                             | (3,198  | )                      |          |         | (3,198       | )      
|                                                         | Accumulated other comprehensive loss                                                                                                                                        |                           |                                             | (7,905  | )                      |          |         | (9,303       | )      
|                                                         | Retained deficit                                                                                                                                                            |                           |                                             | (80,392 | )                      |          |         | (74,638      | )      
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         
|                                                         |                                                                                                                                                                             |                           | Total shareholders deficit                 |         |                        | (113,173 | )       |              |         | (108,817 | )
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |          |        
|                                                         |                                                                                                                                                                             |                           | Total liabilities and shareholders deficit |         | $                      | 434,529  |         |              | $       | 432,542  |  
|                                                         |                                                                                                                                                                             |                           |                                             |         |                        |         

The accompanying notes are an integral part of the consolidated financial statements

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MSX INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)for the fiscal quarters ended March 30, 2003 and March 31, 2002

|                                                                                                |                                                                                |   |                      |        |   |           |         |         |  
|----------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------ | - | -------------------- | ------ | - | --------- | ------- | ------- | -
|                                                                                                |                                                                                |   | Fiscal Quarter Ended |       
|                                                                                                |                                                                                |   |                      |       
|                                                                                                |                                                                                |   | March 30,            |        |   | March 31, |        
|                                                                                                |                                                                                |   | 2003                 |        |   | 2002      |        
|                                                                                                |                                                                                |   |                      |        |   |           |        
|                                                                                                |                                                                                |   | (in thousands)       |       
|Net sales                                                                                       |                                                                                | $ | 183,351              |        |   | $         | 205,473 |        
|Cost of sales                                                                                   |                                                                                |   | 163,174              |        |   |           | 178,820 |        
|                                                                                                |                                                                                |   |                      |        |   |          
|                                                                                                | Gross profit                                                                   |   |                      | 20,177 |   |           |         | 26,653  |  
|                                                                                                |                                                                                |   |                      |        |   |          
|Selling, general and administrative expenses                                                    |                                                                                |   | 15,704               |        |   |           | 19,865  |        
|Restructuring and severance costs (Note 4)                                                      |                                                                                |   | 1,431                |        |   |           | 278     |        
|                                                                                                |                                                                                |   |                      |        |   |          
|                                                                                                | Operating income                                                               |   |                      | 3,042  |   |           |         | 6,510   |  
|                                                                                                |                                                                                |   |                      |        |   |          
|Interest expense, net                                                                           |                                                                                |   | 6,675                |        |   |           | 6,261   |        
|                                                                                                |                                                                                |   |                      |        |   |          
|                                                                                                | Income (loss) before income taxes, minority interests and equity in
affiliates |   |                      | (3,633 | ) |           |         | 249     |  
|                                                                                                |                                                                                |   |                      |        |   |          
|Income tax provision                                                                            |                                                                                |   | 101                  |        |   |           | 101     |        
|Less minority interests and equity in affiliates, net of taxes                                  |                                                                                |   | (174                 | )      |   |           | 238     |        
|                                                                                                |                                                                                |   |                      |        |   |          
|                                                                                                | Loss before cumulative effect of accounting change for goodwill
impairment     |   |                      | (3,560 | ) |           |         | (90     | )
|                                                                                                |                                                                                |   |                      |        |   |          
|Cumulative effect of accounting change for goodwill impairment, net of
taxes of $9,745 (Note 3) |                                                                                |   |                     |        |   |           | (38,102 | )      
|                                                                                                |                                                                                |   |                      |        |   |          
|                                                                                                | Net loss                                                                       |   |                      | (3,560 | ) |           |         | (38,192 | )
|                                                                                                |                                                                                |   |                      |        |   |          
|Preferred stock dividends (Note 7)                                                              |                                                                                |   | (2,194               | )      |   |           | (1,905  | )      
|                                                                                                |                                                                                |   |                      |        |   |          
|                                                                                                | Net loss available to common shareholders                                      |   | $                    | (5,754 | ) |           | $       | (40,097 | )
|                                                                                                |                                                                                |   |                      |        |   |          

The accompanying notes are an integral part of the consolidated financial statements

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MSX INTERNATIONAL, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)for the fiscal quarters ended March 30, 2003 and March 31, 2002

|                                                                     |                                                                                            |                                                                |        |                      |        |   |           |         |        |  
|-------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | -------------------------------------------------------------- | ------ | -------------------- | ------ | - | --------- | ------- | ------ | -
|                                                                     |                                                                                            |                                                                |        | Fiscal Quarter Ended |       
|                                                                     |                                                                                            |                                                                |        |                      |       
|                                                                     |                                                                                            |                                                                |        | March 30,            |        |   | March 31, |        
|                                                                     |                                                                                            |                                                                |        | 2003                 |        |   | 2002      |        
|                                                                     |                                                                                            |                                                                |        |                      |        |   |           |        
|                                                                     |                                                                                            |                                                                |        | (in thousands)       |       
|Cash flows from operating activities:                                |                                                                                            |                                                                |        |                      |        |   |           |        
|                                                                     | Net loss                                                                                   |                                                                | $      | (3,560               | )      |   | $         | (38,192 | )     
|                                                                     | Adjustments to reconcile net loss
to net cash provided by (used for) operating activities: |                                                                |        |                      |        |   |           |         |       
|                                                                     |                                                                                            | Cumulative effect of accounting change for goodwill impairment |        |                      |       |   |           |         | 38,102 |  
|                                                                     |                                                                                            | Minority interests and equity in affiliates                    |        |                      | (174   | ) |           |         | 238    |  
|                                                                     |                                                                                            | Depreciation                                                   |        |                      | 4,759  |   |           |         | 4,517  |  
|                                                                     |                                                                                            | Amortization of debt issuance costs                            |        |                      | 513    |   |           |         | 382    |  
|                                                                     |                                                                                            | Deferred taxes                                                 |        |                      | (665   | ) |           |         | (790   | )
|                                                                     |                                                                                            | Loss on sale/disposal of property and equipment                |        |                      | 361    |   |           |         | 148    |  
|                                                                     |                                                                                            | (Increase) decrease in receivables, net                        |        |                      | (7,630 | ) |           |         | 5,351  |  
|                                                                     |                                                                                            | (Increase) decrease in inventory                               |        |                      | 637    |   |           |         | (2,089 | )
|                                                                     |                                                                                            | (Increase) decrease in prepaid expenses and other assets       |        |                      | (2,008 | ) |           |         | (2,421 | )
|                                                                     |                                                                                            | Increase (decrease) in current liabilities                     |        |                      | 2,058  |   |           |         | (3,354 | )
|                                                                     |                                                                                            | Other, net                                                     |        |                      | (1,181 | ) |           |         | (1,016 | )
|                                                                     |                                                                                            |                                                                |        |                      |        |   |          
|Net cash provided by (used for) operating activities                 |                                                                                            |                                                                | (6,890 | )                    |        |   | 876       |        
|                                                                     |                                                                                            |                                                                |        |                      |        |  
|Cash flows from investing activities:                                |                                                                                            |                                                                |        |                      |        |   |           |        
|                                                                     | Capital expenditures                                                                       |                                                                |        | (2,246               | )      |   |           | (2,030  | )     
|                                                                     | Acquisition of businesses, net of cash acquired                                            |                                                                |        |                     |        |   |           | (2,714  | )     
|                                                                     | Proceeds from sale/disposal of equipment                                                   |                                                                |        | 236                  |        |   |           | 61      |       
|                                                                     | Other, net                                                                                 |                                                                |        | (299                 | )      |   |           | 1,925   |       
|                                                                     |                                                                                            |                                                                |        |                      |        |  
|Net cash used for investing activities                               |                                                                                            |                                                                | (2,309 | )                    |        |   | (2,758    | )      
|                                                                     |                                                                                            |                                                                |        |                      |        |  
|Cash flows from financing activities:                                |                                                                                            |                                                                |        |                      |        |   |           |        
|                                                                     | Repayment of debt                                                                          |                                                                |        | (1,394               | )      |   |           | (3,003  | )     
|                                                                     | Debt issuance costs                                                                        |                                                                |        | (975                 | )      |   |           | (11     | )     
|                                                                     | Changes in revolving debt, net                                                             |                                                                |        | 18,719               |        |   |           | 14,108  |       
|                                                                     | Changes in book overdrafts, net                                                            |                                                                |        | (13,846              | )      |   |           | (8,152  | )     
|                                                                     | Repurchase of common and preferred stock                                                   |                                                                |        |                     |        |   |           | (209    | )     
|                                                                     |                                                                                            |                                                                |        |                      |        |   |          
|Net cash provided by financing activities                            |                                                                                            |                                                                | 2,504  |                      |        |   | 2,733     |        
|                                                                     |                                                                                            |                                                                |        |                      |        |  
|Effect of foreign exchange rate changes on cash and cash equivalents |                                                                                            |                                                                | (354   | )                    |        |   | (1,273    | )      
|                                                                     |                                                                                            |                                                                |        |                      |        |  
|Cash and cash equivalents:                                           |                                                                                            |                                                                |        |                      |        |   |           |        
|                                                                     | Decrease for the period                                                                    |                                                                |        | (7,049               | )      |   |           | (422    | )     
|                                                                     | Balance, beginning of period                                                               |                                                                |        | 10,935               |        |   |           | 4,924   |       
|                                                                     |                                                                                            |                                                                |        |                      |        |   |          
|                                                                     | Balance, end of period                                                                     |                                                                | $      | 3,886                |        |   | $         | 4,502   |       
|                                                                     |                                                                                            |                                                                |        |                      |        |  

The accompanying notes are an integral part of the consolidated financial statements

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MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)
(dollars in thousands unless otherwise stated)



|1. |  | Organization and Basis of Presentation:
|-- |  | ---------------------------------------

The accompanying financial statements present the consolidated assets and
liabilities and results of operations of MSX International, Inc. and its
majority owned subsidiaries (MSXI). MSXI is a holding company owned by
Citicorp and affiliates and certain members of management. We are principally
engaged in providing technical business services to automobile manufacturers
and suppliers and other industries primarily in North America and Europe. We
utilize a 52-53 week fiscal year, which ends on the Sunday nearest December 31.

All intercompany transactions and balances have been eliminated. In the
opinion of management, the accompanying unaudited consolidated financial
statements contain all adjustments, consisting of only normal recurring items,
which are necessary for a fair presentation. The operating results for the
fiscal quarters ended March 30, 2003 and March 31, 2002 are not necessarily
indicative of the results of operations for the entire year. Reference should
be made to the consolidated financial statements and notes thereto included in
our Annual Report on Form 10-K for the fiscal year ended December 29, 2002.
Certain prior year amounts have been reclassified to conform to the
presentation adopted during the current period.



|2. |  | Acquisitions of Businesses:
|-- |  | ---------------------------

The terms of certain of our prior acquisition agreements provided for
additional contingent consideration to be paid over a period of up to two years
if the acquired entitys future operating results exceed targeted levels.
Contingent consideration is earned when the acquired entitys financial
performance grows in excess of the targeted levels established at the time of
acquisition. Such additional consideration is recorded, when earned. No such
consideration was recorded or paid during the periods presented.

Effective in December 2002 we acquired the remaining 25% of the
outstanding common stock of Satiz Srl from Fiat SpA. The transaction had been
contemplated as part of the original acquisition of 75% of the outstanding
common stock of Satiz in December of 1999. The total purchase price was about
$3.5 million based on formulas established at the time of the original 75%
acquisition. The transaction was accounted for under the purchase method of
accounting resulting in additional goodwill of $2.4 million. Satiz specializes
in commercial and technical publishing in Europe and derives a significant
portion of its sales from Fiat and related subsidiaries.



|3. |  | Goodwill and Intangible Assets:
|-- |  | -------------------------------

Effective January 1, 2002, we adopted the provisions of Statement of
Financial Accounting Standards (SFAS) No. 142. Under the new standard,
goodwill is no longer amortized but is tested periodically for impairment.
Additionally, SFAS No. 142 changes the methodology of assessing goodwill
impairment. Under the new standard, goodwill is considered impaired if the
book value of an operating unit exceeds its estimated fair value. Upon
adoption of SFAS No. 142 we recorded a one-time, non-cash charge of about $47.8
million ($38.1 million net of taxes), to reduce the carrying value of goodwill.
The charge is reflected as a cumulative effect of an accounting change in our
consolidated results of operations, net of taxes. In calculating the
impairment charge, the fair value of the operating units underlying our
business was estimated using a discounted cash flow methodology.

The following summarizes the changes in our goodwill balances during the
three months ended March 30, 2003:

|                              |  |               |   |  |            |       |        |               |  |   |        |  |  |   |         | 
|----------------------------- |  | ------------- | - |  | ---------- | ----- | ------ | ------------- |  | - | ------ |  |  | - | ------- | 
|                              |  |               |   |  |            | Human |        |               |  |   |        |  |  |   |        
|                              |  | Collaborative |   |  | Capital    |       |        | Other         |  |   |        |  | 
|                              |  | Engineering   |   |  | Management |       |        | Collaborative |  |   |        |  | 
|                              |  | Management    |   |  | Services   |       |        | Services      |  |   | Total  | 
|                              |  |               |   |  |            |       |        |               |  |   |        | 
|Balance at December 29, 2002  |  | $             |  |  |            | $     | 97,603 |               |  | $ | 29,651 |  |  | $ | 127,254 | 
|Translation changes and other |  |               |  |  |            |       | 55     |               |  |   | 1,235  |  |  |   | 1,290   | 
|                              |  |               |   |  |            |       |        |               |  |   |        | 
|Balance at March 30, 2003     |  | $             |  |  |            | $     | 97,658 |               |  | $ | 30,886 |  |  | $ | 128,544 | 
|                              |  |               |   |  |            |       |        |               |  |   |        | 

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MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|4. |  | Restructuring and Severance:
|-- |  | ----------------------------

As of December 29, 2002, accrued restructuring and severance costs totaled
$4.5 million. Approximately $2.9 million was charged to the restructuring and
severance accrual during the first quarter of 2003, comprised of severance and
termination benefits associated with headcount reductions approved by
management during the fourth quarter of 2002. Additional charges of $1.4
million were recorded during the first quarter of 2003 primarily for additional
severance and termination benefits approved and communicated by management
prior to March 30, 2003. Remaining accrued severance costs totaled $3.0
million as of March 30, 2003 and are expected to be paid during 2003.



|5. |  | Accounts Receivable:
|-- |  | --------------------

Accounts receivable include the portion of our billings for certain master
vendor and supply chain management services attributable to services provided
by our vendors which are passed on to our customers. These amounts totaled
$44.8 million as of March 30, 2003 and $37.1 million as of December 29, 2002. A
corresponding liability to our vendors for these amounts is recorded in
accounts payable at the time the receivable is recognized.

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MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|6. |  | Debt:                              
|-- |  | -----------------------------------
|  
|   |  | Debt is comprised of the following:

|                                          |                                |  |                   |           |   |                |           |            |           |   |         |              |  |   |         |        | 
|----------------------------------------- | ------------------------------ |  | ----------------- | --------- | - | -------------- | --------- | ---------- | --------- | - | ------- | ------------ |  | - | ------- | ------ | 
|                                          |                                |  | Interest Rates at |           |   | Outstanding at |          
|                                          |                                |  |                   |           |   |                |          
|                                          |                                |  | March 30,         |           |   | December 29,   |           |            | March 30, |   |         | December 29, | 
|                                          |                                |  | 2003              |           |   | 2002           |           |            | 2003      |   |         | 2002         | 
|                                          |                                |  |                   |           |   |                |           |            |           |   |         |              | 
|Senior subordinated notes                 |                                |  | 11.375            | %         |   |                | 11.375    | %          |           | $ | 130,000 |              |  | $ | 130,000 |       
|Second secured term loan                  |                                |  | 10.00             | %         |   |                | 10.00     | %          |           |   | 16,516  |              |  |   | 16,109  |       
|Credit facility, as amended and restated: |                                |  |                   |           |   |                |           |            |           |   |         |              |  |   |         |       
|                                          | Revolving line of credit notes |  |                   | 4.77-6.38 | % |                |           | 4.42       | %         |   |         | 28,800       |  |   |         | 4,000  | 
|                                          | Swingline notes                |  |                   | 6.90-8.05 | % |                |           | 4.46-11.15 | %         |   |         | 607          |  |   |         | 8,559  | 
|                                          | Term notes                     |  |                   | 5.65-6.76 | % |                |           | 5.64-6.26  | %         |   |         | 65,798       |  |   |         | 65,798 | 
|                                          |                                |  |                   |           |   |                |           |            |           |   |         |              |  |  
|Satiz facility                            |                                |  | 5.14              | %         |   |                | 4.12      | %          |           |   | 5,574   |              |  |   | 4,954   |       
|Other                                     |                                |  | 7.00-9.00         | %         |   |                | 7.00-9.00 | %          |           |   | 4,713   |              |  |   | 5,254   |       
|                                          |                                |  |                   |           |   |                |           |            |           |   |         |              |  |  
|                                          |                                |  |                   |           |   |                |           |            |           |   | 252,008 |              |  |   | 234,674 |       
|Less current portion                      |                                |  |                   |           |   |                |           |            |           |   | 14,979  |              |  |   | 14,671  |       
|                                          |                                |  |                   |           |   |                |           |            |           |   |         |              |  |  
|Total long-term debt                      |                                |  |                   |           |   |                |           |            |           | $ | 237,029 |              |  | $ | 220,003 |       
|                                          |                                |  |                   |           |   |                |           |            |           |   |         |              |  |  

As of March 30, 2003, $29.4 million was outstanding under the revolving
credit portions of our credit facility and has been classified as long-term
debt as we have both the ability and intent to refinance such amounts under the
credit facility.



|7. |  | Mandatorily Redeemable Series A Preferred Stock:
|-- |  | ------------------------------------------------

As of December 29, 2002 and March 30, 2003 there are 359,448 shares of 12%
Series A Cumulative Mandatorily Redeemable Preferred Stock (the Preferred
Stock) outstanding with a stated value of $100 per share or about $36 million
in total. We are authorized to issue up to 1,500,000 shares of Preferred
Stock, divided into two classes: 500,000 shares of Redeemable Series A
Preferred Stock, par value $0.01, and 1,000,000 shares of New Preferred Stock,
par value $0.01. As of March 30, 2003, we have not declared or paid any
dividends. However, due to the mandatory redemption features of the preferred
stock, dividends accrued totaled $38.9 million as of March 30, 2003. We may
not declare or pay any dividends or other distribution with respect to any
common stock or other class or series of stock ranking junior to the Preferred
Stock without first complying with restrictions specified in the Amended and
Restated Stockholders Agreement. Our ability to pay cash dividends, and to
acquire or redeem the preferred stock, is subject to restrictions contained in
our credit agreements.

Prior results of operation reflect a change in the treatment of
accumulated dividends on the Preferred Stock. Accumulated dividends on
Preferred Stock, which had been disclosed in previous filings, have been
deducted from shareholders deficit and included with the related Preferred
Stock on the consolidated balance sheets. The change in treatment has no
impact cash flows for any of the periods presented.



|8. |  | Comprehensive Loss:        
|-- |  | ---------------------------
|  
|   |  | Our comprehensive loss was:

|                                    |                                          |   |                      |       |  |           |         |        |  
|----------------------------------- | ---------------------------------------- | - | -------------------- | ----- |  | --------- | ------- | ------ | -
|                                    |                                          |   | Fiscal Quarter Ended |      
|                                    |                                          |   |                      |      
|                                    |                                          |   | March 30,            |       |  | March 31, |        
|                                    |                                          |   | 2003                 |       |  | 2002      |        
|                                    |                                          |   |                      |       |  |           |        
|Net loss                            |                                          |   | (3,560               | )     |  | $         | (38,192 | )     
|Other comprehensive income (loss) - |                                          |   |                      |       |  |           |         |       
|                                    | Foreign currency translation
adjustments |   |                      | 1,398 |  |           |         | (1,726 | )
|                                    |                                          |   |                      |       |  |          
|Comprehensive loss                  |                                          | $ | (2,162               | )     |  | $         | (39,918 | )     
|                                    |                                          |   |                      |       |  |          

7



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|9. |  | Segment Information:
|-- |  | --------------------

MSXI is a global provider of technical business services to the automotive
and other industries. Our business includes: collaborative engineering
services, human capital management services, and other collaborative services.
Collaborative engineering offers a full range of total product, custom, or
single point engineering solutions. Human capital management services include
a full range of staffing solutions, including direct support of our engineering
and other collaborative services. Our other collaborative services include
solutions to quality, supply chain, and communication related customer needs.
Certain operations within each of our segments have been aggregated following
the provisions of SFAS No. 131 due to the similar characteristics of their
operations, including the nature of their service offerings, processes
supporting the delivery of the services, customers, and marketing and sales
processes.

The accounting policies of our segments are the same as those for MSXI
except that the financial results for each segment are presented using a
management approach. We evaluate performance based on earnings before
interest, taxes and amortization (EBITA), including the Michigan Single
Business Tax and other similar taxes. The results of each segment include
certain allocations for general, administrative, and other shared costs.
However, certain shared costs and termination and restructuring costs, included
in other below, are not allocated to the segments.

The following is a summary of selected data for each of our service lines:

|                             |                        |  |               |        |   |            |       |        |               |  |   |        |  |  |       |        |   |  |   |         | 
|---------------------------- | ---------------------- |  | ------------- | ------ | - | ---------- | ----- | ------ | ------------- |  | - | ------ |  |  | ----- | ------ | - |  | - | ------- | 
|                             |                        |  |               |        |   |            | Human |        |               |  |   |        |  |  |       |        |   |  |   |        
|                             |                        |  | Collaborative |        |   | Capital    |       |        | Other         |  |   |        |  |  |       |        |   | 
|                             |                        |  | Engineering   |        |   | Management |       |        | Collaborative |  |   |        |  |  |       |        |   | 
|                             |                        |  | Management    |        |   | Services   |       |        | Services      |  |   | Other  |  |  | Total |       
|                             |                        |  |               |        |   |            |       |        |               |  |   |        |  |  |       |       
|Quarter Ended March 30, 2003 |                        |  |               |        |   |            |       |        |               |  |   |        |  |  |       |        |   |  |   |        
|                             | Net sales  external   |  | $             | 50,768 |   |            | $     | 65,087 |               |  | $ | 67,496 |  |  | $     |       |   |  | $ | 183,351 | 
|                             | Net intercompany sales |  |               | 139    |   |            |       | 292    |               |  |   | 1,528  |  |  |       | (1,959 | ) |  |   |        | 
|                             | EBITA                  |  |               | (1,243 | ) |            |       | 3,801  |               |  |   | 4,032  |  |  |       | (2,673 | ) |  |   | 3,917   | 
|                             |                        |  |               |        |   |            |       |        |               |  |   |        |  |  |       |        |   |  |   |        
|Quarter Ended March 31, 2002 |                        |  |               |        |   |            |       |        |               |  |   |        |  |  |       |        |   |  |   |        
|                             | Net sales  external   |  | $             | 57,139 |   |            | $     | 84,858 |               |  | $ | 63,476 |  |  | $     |       |   |  | $ | 205,473 | 
|                             | Net intercompany sales |  |               | 968    |   |            |       | 380    |               |  |   | 1,815  |  |  |       | (3,163 | ) |  |   |        | 
|                             | EBITA                  |  |               | (42    | ) |            |       | 4,071  |               |  |   | 5,823  |  |  |       | (2,451 | ) |  |   | 7,401   | 

A reconciliation of consolidated EBITA to consolidated income (loss)
before income taxes, minority interests and equity in affiliates is as follows:

|                                                                                     |  |                      |        |   |           |   |        |  
|------------------------------------------------------------------------------------ |  | -------------------- | ------ | - | --------- | - | ------ | -
|                                                                                     |  | Fiscal Quarter Ended |       
|                                                                                     |  |                      |       
|                                                                                     |  | March 30,            |        |   | March 31, |  
|                                                                                     |  | 2003                 |        |   | 2002      |  
|                                                                                     |  |                      |        |   |           |  
|Total EBITA before minority interests and equity in
net losses of affiliates         |  | $                    | 3,917  |   |           | $ | 7,401  |  
|Interest expense                                                                     |  |                      | (6,675 | ) |           |   | (6,261 | )
|Michigan single business tax and other similar taxes                                 |  |                      | (875   | ) |           |   | (891   | )
|                                                                                     |  |                      |        |   |           |  
|Consolidated income (loss) before taxes, minority interests
and equity in affiliates |  | $                    | (3,633 | ) |           | $ | 249    |  
|                                                                                     |  |                      |        |   |           |  

8



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|10. |  | Guarantor and Non-Guarantor Subsidiaries:
|--- |  | -----------------------------------------

In connection with our $130 million of senior subordinated notes
outstanding, each of our significant domestic restricted subsidiaries, as
defined in the related bond indenture (the Guarantor Subsidiaries),
irrevocably and unconditionally guarantee MSXIs performance as primary
obligor. The following condensed consolidating financial data provides
information regarding the financial position, results of operations and cash
flows of the Guarantor Subsidiaries as set forth below. Separate financial
statements of the Guarantor Subsidiaries are not presented because management
has determined those would not be material to the holders of the senior
subordinated notes.

The Guarantor Subsidiaries account for their investments in the
non-guarantor subsidiaries, if any, on the equity method. The principal
elimination entries are to eliminate the investments in subsidiaries and
intercompany balances and transactions.

9



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|10. |  | Guarantor and Non-Guarantor Subsidiaries:  continued
|--- |  | -----------------------------------------------------

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING BALANCE SHEETas of March 30, 2003

|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |         |         | 
|----------------------------------------------------- | --------------------------------------------------- | ---------------------------------------------------- | -------- | -------- | ------- |  | ------------ | ------- | ------- | ------------ | ------ | ------- | ------------ |  | -------- | ------------ | -------- | - | -------- | ------- | ------- | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        | Non-    |              |  |          |              |          |   |          |         |        
|                                                      |                                                     |                                                      |          | MSXI     |         |  | Guarantor    |         |         | Guarantor    |        |         |              |  |          |              | MSXI     |  
|                                                      |                                                     |                                                      |          | (Issuer) |         |  | Subsidiaries |         |         | Subsidiaries |        |         | Eliminations |  |          | Consolidated |         
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |         
|ASSETS                                                |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |        
|Current assets:                                       |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |        
|                                                      | Cash and cash equivalents                           |                                                      | $        |         |         |  | $            | 131     |         |              | $      | 3,755   |              |  | $        |             |          |   | $        | 3,886   |        
|                                                      | Accounts receivable, net                            |                                                      |          | 187      |         |  |              | 114,670 |         |              |        | 104,730 |              |  |          |             |          |   |          | 219,587 |        
|                                                      | Inventory                                           |                                                      |          |         |         |  |              | 3,165   |         |              |        | 1,023   |              |  |          |             |          |   |          | 4,188   |        
|                                                      | Prepaid expenses and other assets                   |                                                      |          | (2       | )       |  |              | 5,089   |         |              |        | 4,146   |              |  |          |             |          |   |          | 9,233   |        
|                                                      | Deferred income taxes, net                          |                                                      |          |         |         |  |              | 2,152   |         |              |        | 1,719   |              |  |          |             |          |   |          | 3,871   |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total current assets                                 |          |          | 185     |  |              |         | 125,207 |              |        |         | 115,373      |  |          |              |         |   |          |         | 240,765 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|Property and equipment, net                           |                                                     |                                                      |         |          |         |  | 19,851       |         |         |              | 16,933 |         |              |  |         |              |          |   | 36,784   |        
|Goodwill, net                                         |                                                     |                                                      |         |          |         |  | 99,473       |         |         |              | 29,071 |         |              |  |         |              |          |   | 128,544  |        
|Investment in subsidiaries                            |                                                     |                                                      | 108,394  |          |         |  | 58,753       |         |         |              | 1,933  |         |              |  | (166,883 | )            |          |   | 2,197    |        
|Debt issuance costs, net                              |                                                     |                                                      | 6,359    |          |         |  |             |         |         |              |       |         |              |  |         |              |          |   | 6,359    |        
|Other assets                                          |                                                     |                                                      | 75       |          |         |  | 3,461        |         |         |              | 183    |         |              |  |         |              |          |   | 3,719    |        
|Deferred income taxes, net                            |                                                     |                                                      | 4,661    |          |         |  | 6,001        |         |         |              | 5,499  |         |              |  |         |              |          |   | 16,161   |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |             
|                                                      |                                                     | Total assets                                         |          | $        | 119,674 |  |              | $       | 312,746 |              |        | $       | 168,992      |  |          | $            | (166,883 | ) |          | $       | 434,529 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)       
|Current liabilities:                                  |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |        
|                                                      | Notes payable and current portion of
long-term debt |                                                      | $        | 6,769    |         |  | $            |        |         |              | $      | 8,210   |              |  | $        |             |          |   | $        | 14,979  |        
|                                                      | Accounts payable and drafts                         |                                                      |          |         |         |  |              | 76,671  |         |              |        | 52,098  |              |  |          |             |          |   |          | 128,769 |        
|                                                      | Accrued liabilities                                 |                                                      |          | (993     | )       |  |              | 47,120  |         |              |        | 35,691  |              |  |          |             |          |   |          | 81,818  |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total current liabilities                            |          |          | 5,776   |  |              |         | 123,791 |              |        |         | 95,999       |  |          |              |         |   |          |         | 225,566 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|Long-term debt                                        |                                                     |                                                      | 234,345  |          |         |  |             |         |         |              | 2,684  |         |              |  |         |              |          |   | 237,029  |        
|Intercompany accounts                                 |                                                     |                                                      | (82,097  | )        |         |  | 76,582       |         |         |              | 5,515  |         |              |  |         |              |          |   |         |        
|Long-term deferred compensation and other
liabilities |                                                     |                                                      |         |          |         |  | 2,818        |         |         |              | 7,352  |         |              |  |         |              |          |   | 10,170   |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total liabilities                                    |          |          | 158,024 |  |              |         | 203,191 |              |        |         | 111,550      |  |          |              |         |   |          |         | 472,765 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|Minority interests                                    |                                                     |                                                      |          |          |         |  |              |         |         |              | 114    |         |              |  |          |              |          |   | 114      |        
|Mandatorily Redeemable Series A Preferred Stock       |                                                     |                                                      | 74,823   |          |         |  |             |         |         |              |       |         |              |  |         |              |          |   | 74,823   |        
|Shareholders equity (deficit)                        |                                                     |                                                      | (113,173 | )        |         |  | 109,555      |         |         |              | 57,328 |         |              |  | (166,883 | )            |          |   | (113,173 | )      
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total liabilities and shareholders
equity (deficit) |          | $        | 119,674 |  |              | $       | 312,746 |              |        | $       | 168,992      |  |          | $            | (166,883 | ) |          | $       | 434,529 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         

10



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|10. |  | Guarantor and Non-Guarantor Subsidiaries:  continued
|--- |  | -----------------------------------------------------

MSX INTERNATIONAL, INC.

CONDENSED CONSOLIDATING BALANCE SHEETas of December 29, 2002

|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |         |         | 
|----------------------------------------------------- | --------------------------------------------------- | ---------------------------------------------------- | -------- | -------- | ------- |  | ------------ | ------- | ------- | ------------ | ------ | ------- | ------------ |  | -------- | ------------ | -------- | - | -------- | ------- | ------- | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        | Non-    |              |  |          |              |          |   |          |         |        
|                                                      |                                                     |                                                      |          | MSXI     |         |  | Guarantor    |         |         | Guarantor    |        |         |              |  |          |              | MSXI     |  
|                                                      |                                                     |                                                      |          | (Issuer) |         |  | Subsidiaries |         |         | Subsidiaries |        |         | Eliminations |  |          | Consolidated |         
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |         
|ASSETS                                                |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |        
|Current assets:                                       |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |        
|                                                      | Cash and cash equivalents                           |                                                      | $        |         |         |  | $            | 154     |         |              | $      | 10,781  |              |  | $        |             |          |   | $        | 10,935  |        
|                                                      | Accounts receivable, net                            |                                                      |          | 181      |         |  |              | 108,616 |         |              |        | 103,160 |              |  |          |             |          |   |          | 211,957 |        
|                                                      | Inventory                                           |                                                      |          |         |         |  |              | 3,405   |         |              |        | 1,419   |              |  |          |             |          |   |          | 4,824   |        
|                                                      | Prepaid expenses and other assets                   |                                                      |          | 7        |         |  |              | 3,469   |         |              |        | 3,801   |              |  |          |             |          |   |          | 7,277   |        
|                                                      | Deferred income taxes, net                          |                                                      |          |         |         |  |              | 2,152   |         |              |        | 4,405   |              |  |          |             |          |   |          | 6,557   |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total current assets                                 |          |          | 188     |  |              |         | 117,796 |              |        |         | 123,566      |  |          |              |         |   |          |         | 241,550 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|Property and equipment, net                           |                                                     |                                                      |         |          |         |  | 21,097       |         |         |              | 18,089 |         |              |  |         |              |          |   | 39,186   |        
|Goodwill, net                                         |                                                     |                                                      |         |          |         |  | 99,473       |         |         |              | 27,781 |         |              |  |         |              |          |   | 127,254  |        
|Investment in subsidiaries                            |                                                     |                                                      | 108,502  |          |         |  | 57,167       |         |         |              | 2,222  |         |              |  | (165,519 | )            |          |   | 2,372    |        
|Other assets                                          |                                                     |                                                      | 5,972    |          |         |  | 3,159        |         |         |              | 229    |         |              |  |         |              |          |   | 9,360    |        
|Deferred income taxes, net                            |                                                     |                                                      | 4,661    |          |         |  | 6,001        |         |         |              | 2,158  |         |              |  |         |              |          |   | 12,820   |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |         
|                                                      |                                                     | Total assets                                         |          | $        | 119,323 |  |              | $       | 304,693 |              |        | $       | 174,045      |  |          | $            | (165,519 | ) |          | $       | 432,542 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)       
|Current liabilities:                                  |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |          |              |          |   |          |        
|                                                      | Notes payable and current portion
of long-term debt |                                                      | $        | 6,461    |         |  | $            |        |         |              | $      | 8,210   |              |  | $        |             |          |   | $        | 14,671  |        
|                                                      | Accounts payable and drafts                         |                                                      |          |         |         |  |              | 78,965  |         |              |        | 53,393  |              |  |          |             |          |   |          | 132,358 |        
|                                                      | Accrued liabilities                                 |                                                      |          | 3,287    |         |  |              | 51,074  |         |              |        | 35,677  |              |  |          |             |          |   |          | 90,038  |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total current liabilities                            |          |          | 9,748   |  |              |         | 130,039 |              |        |         | 97,280       |  |          |              |         |   |          |         | 237,067 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|Long-term debt                                        |                                                     |                                                      | 217,445  |          |         |  |             |         |         |              | 2,558  |         |              |  |         |              |          |   | 220,003  |        
|Intercompany accounts                                 |                                                     |                                                      | (71,682  | )        |         |  | 61,729       |         |         |              | 9,953  |         |              |  |         |              |          |   |         |        
|Long-term deferred compensation and
other liabilities |                                                     |                                                      |         |          |         |  | 3,266        |         |         |              | 8,228  |         |              |  |         |              |          |   | 11,494   |        
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total liabilities                                    |          |          | 155,511 |  |              |         | 195,034 |              |        |         | 118,019      |  |          |              |         |   |          |         | 468,564 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|Minority interests                                    |                                                     |                                                      |         |          |         |  |             |         |         |              | 166    |         |              |  |         |              |          |   | 166      |        
|Redeemable Series A Preferred Stock                   |                                                     |                                                      | 72,629   |          |         |  |             |         |         |              |       |         |              |  |         |              |          |   | 72,629   |        
|Shareholders equity (deficit)                        |                                                     |                                                      | (108,817 | )        |         |  | 109,659      |         |         |              | 55,860 |         |              |  | (165,519 | )            |          |   | (108,817 | )      
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         
|                                                      |                                                     | Total liabilities and shareholders
equity (deficit) |          | $        | 119,323 |  |              | $       | 304,693 |              |        | $       | 174,045      |  |          | $            | (165,519 | ) |          | $       | 432,542 | 
|                                                      |                                                     |                                                      |          |          |         |  |              |         |         |              |        |         |              |  |         

11



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|10. |  | Guarantor and Non-Guarantor Subsidiaries:  continued
|--- |  | -----------------------------------------------------

MSX INTERNATIONAL, INC.

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONSFor the fiscal quarters ended March 30, 2003 and March 31, 2002

|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |              |        |  |   |         |         |  
|---------------------------------------------------------------------------- | ----------------------------------------------------------------------------------- | - | -------- | ------- | - | ------------ | ------- | ------- | ------------ | - | ------- | ------------ | - | - | ------------ | ------ |  | - | ------- | ------- | -
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   | Non-    |              |   |   |              |        |  |   |         |        
|                                                                             |                                                                                     |   | MSXI     |         |   | Guarantor    |         |         | Guarantor    |   |         |              |   |   |              | MSXI   | 
|                                                                             |                                                                                     |   | (Issuer) |         |   | Subsidiaries |         |         | Subsidiaries |   |         | Eliminations |   |   | Consolidated |       
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |              |       
|Fiscal Quarter Ended March 30, 2003:                                         |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |              |        |  |   |         |        
|Net sales                                                                    |                                                                                     | $ |         |         |   | $            | 103,039 |         |              | $ | 82,271  |              |   | $ | (1,959       | )      |  | $ | 183,351 |        
|Cost of sales                                                                |                                                                                     |   |         |         |   |              | 91,241  |         |              |   | 73,892  |              |   |   | (1,959       | )      |  |   | 163,174 |        
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Gross profit                                                                        |   |          |        |   |              |         | 11,798  |              |   |         | 8,379        |   |   |              |       |  |   |         | 20,177  |  
|Selling, general and administrative expenses                                 |                                                                                     |   |         |         |   |              | 9,454   |         |              |   | 6,250   |              |   |   |             |        |  |   | 15,704  |        
|Restructuring and severance costs                                            |                                                                                     |   |         |         |   |              | 1,012   |         |              |   | 419     |              |   |   |             |        |  |   | 1,431   |        
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Operating income                                                                    |   |          |        |   |              |         | 1,332   |              |   |         | 1,710        |   |   |              |       |  |   |         | 3,042   |  
|Interest income (expense), net                                               |                                                                                     |   | (3,349   | )       |   |              | (3,018  | )       |              |   | (308    | )            |   |   |             |        |  |   | (6,675  | )      
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Income (loss) before income taxes,
minority interests and equity in affiliates      |   |          | (3,349  | ) |              |         | (1,686  | )            |   |         | 1,402        |   |   |              |       |  |   |         | (3,633  | )
|Income tax provision (benefit)                                               |                                                                                     |   | (1,295   | )       |   |              | 399     |         |              |   | 997     |              |   |   |             |        |  |   | 101     |        
|Minority interests and equity in affiliates                                  |                                                                                     |   | (1,506   | )       |   |              | 184     |         |              |   | 59      |              |   |   | 1,437        |        |  |   | 174     |        
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Income (loss) before cumulative effect of accounting change for goodwill
impairment |   |          | (3,560  | ) |              |         | (1,901  | )            |   |         | 464          |   |   |              | 1,437  |  |   |         | (3,560  | )
|Cumulative effect of accounting change for goodwill impairment, net of taxes |                                                                                     |   |         |         |   |              |        |         |              |   |        |              |   |   |             |        |  |   |        |        
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Net loss                                                                            |   | $        | (3,560  | ) |              | $       | (1,901  | )            |   | $       | 464          |   |   | $            | 1,437  |  |   | $       | (3,560  | )
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|Fiscal Quarter Ended March 31, 2002:                                         |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |              |        |  |   |         |        
|Net sales                                                                    |                                                                                     | $ |         |         |   | $            | 114,481 |         |              | $ | 94,155  |              |   | $ | (3,163       | )      |  | $ | 205,473 |        
|Cost of sales                                                                |                                                                                     |   |         |         |   |              | 100,021 |         |              |   | 81,962  |              |   |   | (3,163       | )      |  |   | 178,820 |        
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Gross profit                                                                        |   |          |        |   |              |         | 14,460  |              |   |         | 12,193       |   |   |              |       |  |   |         | 26,653  |  
|Selling, general and administrative expenses                                 |                                                                                     |   |         |         |   |              | 11,461  |         |              |   | 8,404   |              |   |   |             |        |  |   | 19,865  |        
|Restructuring and severance costs                                            |                                                                                     |   |         |         |   |              | 235     |         |              |   | 43      |              |   |   |             |        |  |   | 278     |        
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Operating income                                                                    |   |          |        |   |              |         | 2,764   |              |   |         | 3,746        |   |   |              |       |  |   |         | 6,510   |  
|Interest income (expense), net                                               |                                                                                     |   | (3,120   | )       |   |              | (2,662  | )       |              |   | (479    | )            |   |   |             |        |  |   | (6,261  | )      
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Income (loss) before income taxes,
minority interests and equity in affiliates      |   |          | (3,120  | ) |              |         | 102     |              |   |         | 3,267        |   |   |              |       |  |   |         | 249     |  
|Income tax provision (benefit)                                               |                                                                                     |   | (1,279   | )       |   |              | 42      |         |              |   | 1,338   |              |   |   |             |        |  |   | 101     |        
|Minority interests and equity in affiliates                                  |                                                                                     |   | (36,351  | )       |   |              | (18,313 | )       |              |   | (100    | )            |   |   | 54,526       |        |  |   | (238    | )      
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Income (loss) before cumulative effect of
accounting change for goodwill impairment |   |          | (38,192 | ) |              |         | (18,253 | )            |   |         | 1,829        |   |   |              | 54,526 |  |   |         | (90     | )
|Cumulative effect of accounting change for goodwill
impairment, net of taxes |                                                                                     |   |         |         |   |              | (18,098 | )       |              |   | (20,004 | )            |   |   |             |        |  |   | (38,102 | )      
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             
|                                                                             | Net loss                                                                            |   | $        | (38,192 | ) |              | $       | (36,351 | )            |   | $       | (18,175      | ) |   | $            | 54,526 |  |   | $       | (38,192 | )
|                                                                             |                                                                                     |   |          |         |   |              |         |         |              |   |         |              |   |   |             

12



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|10. |  | Guarantor and Non-Guarantor Subsidiaries:  continued
|--- |  | -----------------------------------------------------

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSfor the fiscal quarter ended March 30, 2003

|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |        |   |        |         |        |  
|---------------------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------------------------------------- | ------ | -------- | ------ | - | ------------ | ------- | ------ | ------------ | ------ | ------ | ------------ | - | ----- | ------------ | ------ | - | ------ | ------- | ------ | -
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        | Non-   |              |   |       |              |        |   |        |         |       
|                                                     |                                                                                                     |                                                          |        | MSXI     |        |   | Guarantor    |         |        | Guarantor    |        |        |              |   |       |              | MSXI   |  
|                                                     |                                                                                                     |                                                          |        | (Issuer) |        |   | Subsidiaries |         |        | Subsidiaries |        |        | Eliminations |   |       | Consolidated |       
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |       
|Cash flows from operating activities:                |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |        |   |        |        
|                                                     | Net income (loss)                                                                                   |                                                          | $      | (3,560   | )      |   | $            | (1,506  | )      |              | $      | 69     |              |   | $     | 1,437        |        |   | $      | (3,560  | )     
|                                                     | Adjustments to reconcile net income (loss) to net
cash
provided by (used for) operating activities: |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |        |   |        |         |       
|                                                     |                                                                                                     | Equity in affiliates                                     |        |          | 1,506  |   |              |         | (184   | )            |        |        | (59          | ) |       |              | (1,437 | ) |        |         | (174   | )
|                                                     |                                                                                                     | Depreciation                                             |        |          |       |   |              |         | 2,375  |              |        |        | 2,384        |   |       |              |       |   |        |         | 4,759  |  
|                                                     |                                                                                                     | Amortization of debt issuance costs                      |        |          | 513    |   |              |         |       |              |        |        |             |   |       |              |       |   |        |         | 513    |  
|                                                     |                                                                                                     | Deferred taxes                                           |        |          |       |   |              |         |       |              |        |        | (665         | ) |       |              |       |   |        |         | (665   | )
|                                                     |                                                                                                     | Loss on sale/disposal of property and
equipment          |        |          |       |   |              |         | 60     |              |        |        | 301          |   |       |              |       |   |        |         | 361    |  
|                                                     |                                                                                                     | (Increase) decrease in receivables, net                  |        |          | (6     | ) |              |         | (6,054 | )            |        |        | (1,570       | ) |       |              |       |   |        |         | (7,630 | )
|                                                     |                                                                                                     | (Increase) decrease in inventory                         |        |          |       |   |              |         | 240    |              |        |        | 397          |   |       |              |       |   |        |         | 637    |  
|                                                     |                                                                                                     | (Increase) decrease in prepaid expenses
and other assets |        |          | 10     |   |              |         | (1,621 | )            |        |        | (397         | ) |       |              |       |   |        |         | (2,008 | )
|                                                     |                                                                                                     | Increase (decrease) in current liabilities               |        |          | (4,279 | ) |              |         | 9,222  |              |        |        | (2,885       | ) |       |              |       |   |        |         | 2,058  |  
|                                                     |                                                                                                     | Other, net                                               |        |          |       |   |              |         | (677   | )            |        |        | (504         | ) |       |              |       |   |        |         | (1,181 | )
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |             
|Net cash provided by (used for) operating activities |                                                                                                     |                                                          | (5,816 | )        |        |   | 1,855        |         |        |              | (2,929 | )      |              |   |      |              |        |   | (6,890 | )      
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      
|                                                     | Cash flows from investing activities:                                                               |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |        |   |        |         |       
|                                                     | Capital expenditures                                                                                |                                                          |        |         |        |   |              | (1,189  | )      |              |        | (1,057 | )            |   |       |             |        |   |        | (2,246  | )     
|                                                     | Proceeds from sale/disposal of equipment                                                            |                                                          |        |         |        |   |              | 236     |        |              |        |       |              |   |       |             |        |   |        | 236     |       
|                                                     | Other, net                                                                                          |                                                          |        |         |        |   |              | (299    | )      |              |        |       |              |   |       |             |        |   |        | (299    | )     
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      
|Net cash provided by (used for) investing activities |                                                                                                     |                                                          |       |          |        |   | (1,252       | )       |        |              | (1,057 | )      |              |   |      |              |        |   | (2,309 | )      
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      
|                                                     | Cash flows from financing activities:                                                               |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |        |   |        |         |       
|                                                     | Intercompany                                                                                        |                                                          |        | (7,390   | )      |   |              | 11,827  |        |              |        | (4,437 | )            |   |       |             |        |   |        |        |       
|                                                     | Transactions with subsidiaries                                                                      |                                                          |        | (4,429   | )      |   |              | 1,624   |        |              |        |       |              |   |       | 2,805        |        |   |        |        |       
|                                                     | Repayment of debt                                                                                   |                                                          |        | (1,385   | )      |   |              | (9      | )      |              |        |       |              |   |       |             |        |   |        | (1,394  | )     
|                                                     | Debt issuance costs                                                                                 |                                                          |        | (975     | )      |   |              |        |        |              |        |       |              |   |       |             |        |   |        | (975    | )     
|                                                     | Changes in revolving debt, net                                                                      |                                                          |        | 18,592   |        |   |              |        |        |              |        | 127    |              |   |       |             |        |   |        | 18,719  |       
|                                                     | Changes in book overdrafts, net                                                                     |                                                          |        |         |        |   |              | (15,470 | )      |              |        | 1,624  |              |   |       |             |        |   |        | (13,846 | )     
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      
|Net cash provided by (used for) financing activities |                                                                                                     |                                                          | 4,413  |          |        |   | (2,028       | )       |        |              | (2,686 | )      |              |   | 2,805 |              |        |   | 2,504  |        
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      
|                                                     | Effect of foreign exchange rate changes on cash and
Cash equivalents                                |                                                          |        | 1,403    |        |   |              | 1,402   |        |              |        | (354   | )            |   |       | (2,805       | )      |   |        | (354    | )     
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      
|Cash and cash equivalents:                           |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |              |        |   |        |        
|                                                     | Increase (decrease) for the period                                                                  |                                                          |        |         |        |   |              | (23     | )      |              |        | (7,026 | )            |   |       |             |        |   |        | (7,049  | )     
|                                                     | Balance, beginning of period                                                                        |                                                          |        |         |        |   |              | 154     |        |              |        | 10,781 |              |   |       |             |        |   |        | 10,935  |       
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |       |             
|                                                     | Balance, end of period                                                                              |                                                          | $      |         |        |   | $            | 131     |        |              | $      | 3,755  |              |   | $     |             |        |   | $      | 3,886   |       
|                                                     |                                                                                                     |                                                          |        |          |        |   |              |         |        |              |        |        |              |   |      

13



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##### Table of Contents



MSX International, Inc.
Notes to Consolidated Financial Statements (Unaudited)  continued
(dollars in thousands unless otherwise stated)



|10. |  | Guarantor and Non-Guarantor Subsidiaries:  continued
|--- |  | -----------------------------------------------------

MSX INTERNATIONAL, INC.

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWSfor the fiscal quarter ended March 31, 2002

|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |      |        |         |        |        |  
|-------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------- | -------------------------------------------------------------- | -------------------------------------------------------- | ------- | -------- | -- | ------ | ------------ | ------ | --- | ------------ | ------- | ------ | ------------ | ------ | ------ | ------------ | ---- | ------ | ------- | ------ | ------ | -
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         | Non-   |              |        |        |              |      |        |         |        |       
|                                                                     |                                                                                                     |                                                                |                                                          |         | MSXI     |    |        | Guarantor    |        |     | Guarantor    |         |        |              |        |        |              | MSXI |       
|                                                                     |                                                                                                     |                                                                |                                                          |         | (Issuer) |    |        | Subsidiaries |        |     | Subsidiaries |         |        | Eliminations |        |        | Consolidated |     
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |     
|Cash flows from operating activities:                                |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |      |        |        
|                                                                     | Net income (loss)                                                                                   |                                                                | $                                                        | (38,192 | )        |    | $      | (36,351      | )      |     | $            | (18,175 | )      |              | $      | 54,526 |              |      | $      | (38,192 | )     
|                                                                     | Adjustments to reconcile net income (loss) to
net cash
provided by (used for) operating activities: |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |      |        |         |       
|                                                                     |                                                                                                     | Cumulative effect of accounting change for
goodwill impairment |                                                          |         |         |    |        |              | 18,098 |     |              |         | 20,004 |              |        |        |             |      |        |         | 38,102 |       
|                                                                     |                                                                                                     | Equity in affiliates                                           |                                                          |         | 36,351   |    |        |              | 18,313 |     |              |         | 100    |              |        |        | (54,526      | )    |        |         | 238    |       
|                                                                     |                                                                                                     | Depreciation                                                   |                                                          |         |         |    |        |              | 2,144  |     |              |         | 2,373  |              |        |        |             |      |        |         | 4,517  |       
|                                                                     |                                                                                                     | Amortization, including goodwill                               |                                                          |         | 382      |    |        |              |       |     |              |         |       |              |        |        |             |      |        |         | 382    |       
|                                                                     |                                                                                                     | Deferred taxes                                                 |                                                          |         |         |    |        |              |       |     |              |         | (790   | )            |        |        |             |      |        |         | (790   | )     
|                                                                     |                                                                                                     | Loss on sale/disposal of property and
equipment                |                                                          |         |         |    |        |              | 8      |     |              |         | 140    |              |        |        |             |      |        |         | 148    |       
|                                                                     |                                                                                                     | (Increase) decrease in receivables, net                        |                                                          |         | (51      | )  |        |              | 877    |     |              |         | 4,525  |              |        |        |             |      |        |         | 5,351  |       
|                                                                     |                                                                                                     | (Increase) decrease in inventory                               |                                                          |         |         |    |        |              | (310   | )   |              |         | (1,779 | )            |        |        |             |      |        |         | (2,089 | )     
|                                                                     |                                                                                                     |                                                                | (Increase) decrease in prepaid expenses
and other assets |         |          | 32 |        |              |        | 841 |              |         |        | (3,294       | )      |        |              |     |        |         |        | (2,421 | )
|                                                                     |                                                                                                     | Increase (decrease) in current liabilities                     |                                                          |         | (5,590   | )  |        |              | (5,089 | )   |              |         | 7,325  |              |        |        |             |      |        |         | (3,354 | )     
|                                                                     |                                                                                                     | Other, net                                                     |                                                          |         |         |    |        |              | (784   | )   |              |         | (232   | )            |        |        |             |      |        |         | (1,016 | )     
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|Net cash provided by (used for) operating activities                 |                                                                                                     |                                                                | (7,068                                                   | )       |          |    | (2,253 | )            |        |     | 10,197       |         |        |              |       |        |              |      | 876    |        
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|                                                                     | Cash flows from investing activities:                                                               |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |      |        |         |       
|                                                                     | Capital expenditures                                                                                |                                                                |                                                          |        |          |    |        | (1,539       | )      |     |              | (491    | )      |              |        |       |              |      |        | (2,030  | )     
|                                                                     | Acquisition of businesses, net of cash acquired                                                     |                                                                |                                                          |        |          |    |        | (23          | )      |     |              | (2,691  | )      |              |        |       |              |      |        | (2,714  | )     
|                                                                     | Proceeds from sale/disposal of equipment                                                            |                                                                |                                                          |        |          |    |        | 29           |        |     |              | 32      |        |              |        |       |              |      |        | 61      |       
|                                                                     | Other, net                                                                                          |                                                                |                                                          |        |          |    |        | 1,925        |        |     |              |        |        |              |        |       |              |      |        | 1,925   |       
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|Net cash used for investing activities                               |                                                                                                     |                                                                |                                                         |         |          |    | 392    |              |        |     | (3,150       | )       |        |              |       |        |              |      | (2,758 | )      
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|                                                                     | Cash flows from financing activities:                                                               |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |      |        |         |       
|                                                                     | Intercompany                                                                                        |                                                                |                                                          | (5,962  | )        |    |        | 9,943        |        |     |              | (3,981  | )      |              |        |       |              |      |        |        |       
|                                                                     | Transactions with subsidiaries                                                                      |                                                                |                                                          | 1,726   |          |    |        | 1,418        |        |     |              | 291     |        |              |        | (3,435 | )            |      |        |        |       
|                                                                     | Repayment of debt                                                                                   |                                                                |                                                          | (3,000  | )        |    |        | (3           | )      |     |              |        |        |              |        |       |              |      |        | (3,003  | )     
|                                                                     | Debt issuance costs                                                                                 |                                                                |                                                          | (11     | )        |    |        |             |        |     |              |        |        |              |        |       |              |      |        | (11     | )     
|                                                                     | Changes in revolving debt, net                                                                      |                                                                |                                                          | 16,250  |          |    |        |             |        |     |              | (2,142  | )      |              |        |       |              |      |        | 14,108  |       
|                                                                     | Changes in book overdrafts, net                                                                     |                                                                |                                                          |        |          |    |        | (8,136       | )      |     |              | (16     | )      |              |        |       |              |      |        | (8,152  | )     
|                                                                     | Repurchase of common and preferred stock                                                            |                                                                |                                                          | (209    | )        |    |        |             |        |     |              |        |        |              |        |       |              |      |        | (209    | )     
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |       
|Net cash provided by (used for) financing activities                 |                                                                                                     |                                                                | 8,794                                                    |         |          |    | 3,222  |              |        |     | (5,848       | )       |        |              | (3,435 | )      |              |      | 2,733  |        
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|Effect of foreign exchange rate changes on cash and
cash equivalents |                                                                                                     |                                                                | (1,726                                                   | )       |          |    | (1,726 | )            |        |     | (1,256       | )       |        |              | 3,435  |        |              |      | (1,273 | )      
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|                                                                     | Cash and cash equivalents:                                                                          |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |        |        |              |      |        |         |       
|                                                                     | Decrease for the period                                                                             |                                                                |                                                          |        |          |    |        | (365         | )      |     |              | (57     | )      |              |        |       |              |      |        | (422    | )     
|                                                                     | Balance, beginning of period                                                                        |                                                                |                                                          |        |          |    |        | 638          |        |     |              | 4,286   |        |              |        |       |              |      |        | 4,924   |       
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       
|                                                                     | Balance, end of period                                                                              |                                                                | $                                                        |        |          |    | $      | 273          |        |     | $            | 4,229   |        |              | $      |       |              |      | $      | 4,502   |       
|                                                                     |                                                                                                     |                                                                |                                                          |         |          |    |        |              |        |     |              |         |        |              |       

14



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##### Table of Contents






ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Results of Operations

Outlook

Our first quarter operating results compared to the first quarter of 2002
reflect the challenges we have faced as a result of reduced demand for IT
staffing solutions, cost containment actions at our major customers, and
reduced product development initiatives in the automotive industry resulting
from economic uncertainties. While our results are unfavorable compared to the
first quarter of 2002, we achieved significant improvements in operating profit
versus the fourth quarter of 2002 despite flat demand. These results are
consistent with our overall expectation for the balance of 2003. The operating
improvements are a result of restructuring and cost reduction actions
implemented throughout the company, which are continuing on a targeted basis,
in response to the changes affecting our business. These actions included the
divestiture of non-strategic businesses, closure of certain unprofitable
operations, and work force reductions in targeted areas.

At the same time, we remain focused on bundling our customized services
into standardized and scalable product offerings. We believe that this
positioning of our services as integrated solutions will improve our value
proposition to existing and prospective customers. Our strategy is to sell
high value solutions by leveraging our global organization and existing
customer base. Although we cannot provide assurance about the future, our
actions are expected to improve profitability, increase operating efficiencies,
and expand our customer base, including growth in non-automotive markets.

Net Sales

Our sales by service line, net of intercompany sales, were as follows:

|                                     |                 |   |                      |         |  |           |                        |         |   |   |         |         |   |  |       |       |   
|------------------------------------ | --------------- | - | -------------------- | ------- |  | --------- | ---------------------- | ------- | - | - | ------- | ------- | - |  | ----- | ----- | --
|                                     |                 |   | Fiscal Quarter Ended |         |  |           |                        |         |   |   |         |        
|                                     |                 |   |                      |         |  | Change    |                       
|                                     |                 |   | March 30,            |         |  | March 31, |                        |         |   |  
|                                     |                 |   | 2003                 |         |  | 2002      |                        |         | $ |   |         | %       |  
|                                     |                 |   |                      |         |  |           |                        |         |   |   |         |         |  
|                                     |                 |   |                      |         |  |           | (dollars in thousands) |         |   |   |         |        
|Collaborative Engineering
Management |                 | $ | 50,768               |         |  | $         | 57,139                 |         |   | $ | (6,371  | )       |   |  | (11.2 | %)   
|Human Capital Management Services    |                 |   | 65,087               |         |  |           | 84,858                 |         |   |   | (19,771 | )       |   |  | (23.3 | %)   
|Other Collaborative Services         |                 |   | 67,496               |         |  |           | 63,476                 |         |   |   | 4,020   |         |   |  | 6.3   | %    
|                                     |                 |   |                      |         |  |           |                        |         |   |   |         |         |  
|                                     | Total net sales |   | $                    | 183,351 |  |           | $                      | 205,473 |   |   | $       | (22,122 | ) |  |       | (10.8 | %)
|                                     |                 |   |                      |         |  |           |                        |         |   |   |         |         |  

Overall, the decline in net sales versus the first quarter 2002 reflects
lower demand for automotive engineering and human capital management services.
Sales of collaborative engineering services reflect significant volume
reductions in our European operations resulting in a decrease of over $9
million versus the first quarter of 2002. Declines in European volumes were
partially offset by improved volumes in our North American operations and
favorable exchange rates versus 2002. Our European operations have been
challenged by cost reduction programs and delayed product development efforts
at our key customers. The decline in human capital management services
reflects reduced volumes in our engineering staffing in North America and
Europe and reduced volumes of IT staffing services in our North American
markets. The decrease in human capital management sales includes a $3.2
million reduction as a result of the closure/sale of certain unprofitable
operations as part of our 2002 cost reduction plan. In addition, our master
vendor programs were subject to price reductions negotiated with customers.
Sales of other collaborative services improved versus 2002 as a result of
improved exchange rates in our European operations. Excluding the impact of
foreign exchange rate changes, sales of other collaborative services decreased
about $5.8 million, or 9.1% versus 2002. The decrease reflects reduced demand
for custom communication services in Italy due to program delays by our
customers and lower volumes in North America.

15



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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Operating Profit

Our consolidated gross profit and operating income for the periods
presented were:

|                 |                |   |                      |      |   |           |                        |      |   |   |        |     |  |  |       |     | 
|---------------- | -------------- | - | -------------------- | ---- | - | --------- | ---------------------- | ---- | - | - | ------ | --- |  |  | ----- | --- | 
|                 |                |   | Fiscal Quarter Ended |      |   |           |                        |      |   |   |        |    
|                 |                |   |                      |      |   | Decrease  |                       
|                 |                |   | March 30,            |      |   | March 31, |                        |      |   |  
|                 |                |   | 2003                 |      |   | 2002      |                        |      | $ |   |        | %   | 
|                 |                |   |                      |      |   |           |                        |      |   |   |        |     | 
|                 |                |   |                      |      |   |           | (dollars in thousands) |      |   |   |        |    
|Gross profit     |                | $ | 20,177               |      |   | $         | 26,653                 |      |   | $ | (6,476 | )   |  |  | (24.3 | %) 
|                 | % of net sales |   |                      | 11.0 | % |           |                        | 13.0 | % |   |        | n/a |  |  |       | n/a | 
|Operating income |                | $ | 3,042                |      |   | $         | 6,510                  |      |   | $ | (3,468 | )   |  |  | (53.3 | %) 
|                 | % of net sales |   |                      | 1.7  | % |           |                        | 3.2  | % |   |        | n/a |  |  |       | n/a | 

Overall, gross profit declined year over year as a result of reduced
volumes and pricing pressures, primarily in our collaborative engineering and
human capital management services. Gross profit as a percentage of sales
decreased two percentage points due to such pricing pressures and unfavorable
absorption of fixed costs, including unutilized facilities. Our cost reduction
programs resulted in overall first quarter operational savings in excess of $2
million. Operating savings were achieved in direct and indirect labor, related
fringe and benefit costs, and other operating costs as well as from the
elimination of certain unprofitable operations. Savings from cost reduction
efforts were offset by the impact of declining volumes and price reductions
from customers versus the first quarter of 2002.

Selling, general and administrative expenses decreased $4.2 million
compared to the first quarter of 2002. Selling, general and administrative
expenses, as a percentage of net sales, were 8.6% during the first quarter of
fiscal 2003 compared to 9.7% in the comparable period of fiscal 2002. The
decrease resulted from cost reduction programs implemented across the company
in late 2001 and throughout 2002. These reductions are expected to result in
annualized savings of about $12 million during 2003. Cost savings achieved
were partially offset by additional restructuring costs totaling $1.4 million
during the first quarter of 2003. Restructuring costs include additional
severance for targeted areas in Europe and North America, primarily in our
engineering and supply chain management businesses.

Interest expense

Interest expense increased from $6.3 million during the first quarter 2002
to $6.7 million during the first quarter of 2003, a $0.4 million increase. The
impact of reductions in average bank borrowings outstanding were more than
offset by increased interest on our second secured term loan and additional
amortization of debt issuance costs associate with amendments to our bank
facility. Interest rates on bank debt were slightly higher than the first
quarter of 2002 primarily as a result of amendments to our bank facility during
the third quarter of 2002 and first quarter of 2003.

Income taxes and minority interest/equity losses

Income tax expense was $0.1 million during the first quarter of both 2002
and 2003. A tax provision was recorded on pre-tax losses during 2003 primarily
as a result of valuation allowances established against losses from certain
European and North American operations. The effect of valuation allowances,
combined with taxable income in other tax jurisdictions, resulted in a net
provision during 2003 despite an overall loss before taxes. Valuation
allowances were required for selected operations where, based on current facts
and circumstances, management determined that the likelihood of realizing
deferred tax assets, including net operating loss carryforwards, was not
sufficient to allow for recognition of the assets. Minority interests and
equity losses improved from an expense of $0.2 million during 2002 to income of
$0.2 million during 2003. Expense during 2002 included minority interest cost
of $0.2 million related to a 25% minority stake in Satiz and $0.1 million of
equity losses from our investment in MTE Groups LLC. We acquired the minority
interest in Satiz and wrote off our remaining investment in MTE during the
fourth quarter of 2002.

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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Cumulative effect of accounting change for goodwill impairment

During the first quarter of fiscal 2002 we adopted the provisions of SFAS
No. 142, Goodwill and Other Intangible Assets. SFAS No. 142 requires that
goodwill be evaluated for impairment charges based on a fair value approach
instead of amortizing such intangibles over specified periods. Effective
January 1, 2002, we evaluated the fair value of our operating units as of
December 30, 2001 based on a discounted cash flow methodology as prescribed by
the standard. The result of this analysis was a one-time, non-cash charge of
$47.8 million ($38.1 million after taxes). The impairment charge relates to
our collaborative engineering and human capital management service lines. Both
of these areas experienced significant downturns during 2001 due to reduced
demand for selected services and price reductions implemented by certain
customers. The impact of the declines had a significant impact on current
valuations when compared to prior performance levels and growth rates. While
we believe these lower valuations are temporary in nature, adoption of SFAS No.
142 requires that we record this charge during the first quarter of 2002 as a
cumulative adjustment from adoption of the new rules.

Determining fair values based on discounted cash flows requires management
to make significant estimates and assumptions including, but not limited to,
long term projections of cash flows, market conditions, and appropriate
discount rates. Management judgments are based on historical experience,
information from our customers, market and regional trends, and other
information. While we believe that the estimates and assumptions underlying
our valuation models are valid, different assumptions could result in a
different outcome.

Liquidity and Capital Resources

Cash Flows

General.Our principal capital requirements are for working capital,
product development initiatives, and capital expenditures for customer
programs. These requirements have been met through a combination of bank debt,
issuance of subordinated notes and cash from operations. Cash balances in
excess of amounts required to fund daily operations are used to pay down
amounts outstanding under the revolving credit portion of our credit facility.
We typically pay our employees on a weekly basis and receive payment from our
customers within invoicing terms, which is generally a 60-day period after the
invoice date. However, in connection with certain of our supply chain
management and master vendor services, we collect related receivables at
approximately the same time we make payment to suppliers.

Operating Activities. Net cash used by operating activities was $6.9
million for the first quarter of fiscal 2003 compared to net cash provided by
operations of $0.9 million during fiscal 2002. Cash from operations during 2003
reflect a $3.3 million decrease in cash earnings as described in our operating
results. The remaining decrease resulted from changes in our working capital
due primarily to the timing of regularly scheduled customer payments relative
to the close of the fiscal period on March 30, 2003.

Investing Activities.Net cash used for investing activities decreased
$0.5 million from $2.8 million for the first three months of 2002 to $2.3
million for the first three months of 2003. Capital expenditures during 2003
include $0.5 million for supply chain development costs committed to as part of
our 2002 development plan. Excluding the supply chain development cost,
capital expenditures decreased compared to 2003 consistent with the current
lower volumes in business. Cash used to acquire businesses during 2002
includes funding of the Draupner and Cadform acquisition transactions, which
were effective January 1, 2002. Other cash from investing activities during
the first quarter of 2002 primarily represents a return of funds that had been
escrowed to cover contingent purchase price for our investment in MTE Groups
LLC had MTE achieved certain earnings targets.

Financing Activities. Net cash provided by financing activities were $2.5
million for the first three months of 2003 compared to $2.7 million for the
first three months of 2002. Financing requirements remained constant during
2003 despite lower cash from operations due to the use of excess cash balances
established as of the end of fiscal 2002.

17



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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

Available Financing Sources

Our total indebtedness consists of senior subordinated notes, our second
secured term loan, borrowings under our credit facilities and borrowings under
various short-term arrangements. In addition to our total indebtedness, we
also have contingent commitments under letters of credit totaling about $4.7
million, without duplication, at March 30, 2003.

Available borrowings under the credit facility are subject to adequate
accounts receivable balance requirements. As of March 30, 2003 we have $55.6
million of unutilized capacity under the revolving credit portion of our credit
facility of which $30.7 million was available for immediate borrowing based on
eligible accounts receivable as determined in accordance with our credit
agreement, as amended.

Forward  Looking Statements

Certain of the statements made in this report on Form 10Q, including the
success of restructuring activities and other operational improvements,
constitute forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements may be identified by
the use of forward looking terminology such as believes, expects,
estimates, will, should, plans, anticipates or the negative thereof
or other variations thereon or comparable terminology, or by discussions of
strategy. Such forward-looking statements are based on current management
projections and expectations. They involve significant risks and
uncertainties. As such, they are not guarantees of future performance. MSX
International disclaims any intent or obligation to update such statements.

Actual results may vary materially from those in the forward-looking
statements as a result of any number of factors, many of which are beyond the
control of management. These important factors include: our leverage and
related exposure to changes in interest rates; our reliance on major customers
in the automotive industry and the timing of their product development and
other initiatives; the market demand for our technical business services in
general; our ability to recruit and place qualified personnel; delays or
unexpected costs associated with cost reduction efforts; risks associated with
operating internationally, including economic, political and currency risks;
and risks associated with our acquisition strategy. Additional information
concerning these and other factors are discussed in MSX Internationals
Registration Statement on Form S-4 (dated July 20, 1999) and in other filings
with the Securities and Exchange.




ITEM 4. CONTROLS AND PROCEDURES

Within the 90-day period prior to the date of filing this report, we
carried out an evaluation, under the supervision and with the participation of
MSX International, Inc.s Disclosure Committee and management, including the
Chief Executive Officer and the Chief Financial Officer, of the effectiveness
of the design and operation of our disclosure controls and procedures pursuant
to Exchange Act Rules 13a-14 and 15d-14. Based upon, and as of the date of,
this evaluation, the Chief Executive Officer and the Chief Financial Officer
concluded that our disclosure controls and procedures are effective to ensure
that information required to be disclosed in our periodic SEC reports is
recorded, processed, summarized, and reported as and when required. In
addition, they concluded that no significant deficiencies in the design or
operation of internal controls existed which could significantly affect our
ability to record, process, summarize and report financial data. Subsequent to
the date of evaluation, there have been no significant changes in our internal
controls or in other factors that could significantly affect internal controls.

18



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##### Table of Contents



ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS







PART II. OTHER INFORMATION

|        |  |                                 
|------- |  | --------------------------------
|ITEM 6. |  | EXHIBITS AND REPORTS ON FORM 8-K



| | (a) |  | Exhibits:
| | --- |  | ---------

|     |  |                                                                                                                       
|---- |  | ----------------------------------------------------------------------------------------------------------------------
|99.1 |  | Certification pursuant to 18 U.S.C. Section
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002



| | (b) |  | Reports on Form 8-K:                                                                                                                                                                                       
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |     |  | During the period covered by this report, a Form 8-K was filed on
February 24, 2003, reporting under Item 5. Other Events
completion of the third amendment to our amended and restated credit
agreement.

19



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##### Table of Contents






SIGNATURE

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.

Date: May 14, 2003

MSX INTERNATIONAL, INC.
(Registrant)

|    |  |                             
|--- |  | ----------------------------
|By: |  | /s/ Frederick K. Minturn    
|    |  | Frederick K. Minturn        
|    |  | Executive Vice President and
|    |  | Chief Financial Officer     

(Chief accounting officer
and authorized signatory)

20



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##### Table of Contents






CERTIFICATION

I, Frederick K. Minturn, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of MSX
International, Inc.;                                                                                                                                                                                                                                                
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                      

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of the registrants board of directors:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
|b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: May 14, 2003

/S/ FREDERICK K. MINTURN
Frederick K. Minturn
Executive Vice President and
Chief Financial Officer

21



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##### Table of Contents



CERTIFICATION

I, Thomas T. Stallkamp, certify that:



| | 1. |  | I have reviewed this quarterly report on Form 10-Q of MSX
International, Inc.;                                                                                                                                                                                                                                                
| | -- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | 2. |  | Based on my knowledge, this quarterly report does not contain
any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by this quarterly report;
|
| | 3. |  | Based on my knowledge, the financial statements, and other
financial information included in this quarterly report, fairly
present in all material respects the financial condition, results of
operations and cash flows of the registrant as of, and for, the
periods presented in this quarterly report;                   
|
| | 4. |  | The registrants other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and we have:                                                                                                      

|   |  |                                                                                                                                                                                                                                                                                                
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | designed such disclosure controls and procedures to
ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in
which this quarterly report is being prepared;
|b) |  | evaluated the effectiveness of the registrants
disclosure controls and procedures as of a date within 90 days
prior to the filing date of this quarterly report (the Evaluation
Date); and                                                                                                  
|c) |  | presented in this quarterly report our conclusions about
the effectiveness of the disclosure controls and procedures based
on our evaluation as of the Evaluation Date;                                                                                                                        



| | 5. |  | The registrants other certifying officer and I have disclosed,
based on our most recent evaluation, to the registrants auditors and
the audit committee of the registrants board of directors:
| | -- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|   |  |                                                                                                                                                                                                                                                                                               
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|a) |  | all significant deficiencies in the design or operation
of internal controls which could adversely affect the registrants
ability to record, process, summarize and report financial data
and have identified for the registrants auditors any material
weaknesses in internal controls; and
|b) |  | any fraud, whether or not material, that involves
management or other employees who have a significant role in the
registrants internal controls; and                                                                                                                                        



| | 6. |  | The registrants other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date of our
most recent evaluation, including any corrective actions with regard
to significant deficiencies and material weaknesses.
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Date: May 14, 2003

/S/ THOMAS T. STALLKAMP
Thomas T. Stallkamp
Vice Chairman and Chief
Executive Officer

22



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##### Table of Contents



10-Q EXHIBIT INDEX

|            |  |                                                                                                                        |  | 
|----------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | 
|EXHIBIT NO. |  | DESCRIPTION                                                                                                            | 
|            |  |                                                                                                                        | 
|EX-99.1     |  | Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906
of the Sarbanes-Oxley Act of 2002