<PAGE>   1
                       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 April 4, 1999

OR

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

For the transition period from       to

Commission File number:     333-49821




                             MSX INTERNATIONAL, INC.
             (Exact name of registrant as specified in its charter)



            DELAWARE                                     38-3323099
  (State or other jurisdiction of                     (I.R.S. Employer
  incorporation or organization)                      Identification No.)


     275 REX BOULEVARD AUBURN HILLS, MICHIGAN                48326
     (Address of principal executive offices)              (Zip Code)

                                 (248) 299-1000
              (Registrant's telephone number, including area 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
                                ------   ------










<PAGE>   2
MSX INTERNATIONAL, INC.
<TABLE>
<CAPTION>
INDEX                                                                                                              PAGES
                                                                                                                 
<S>                                                                                                                <C>   
PART  I - FINANCIAL  INFORMATION


       ITEM 1 - Financial Statements - (Unaudited)


           Condensed Consolidated Balance Sheets as of April 4, 1999 and
                  January 3, 1999.....................................................................................1

           Condensed Consolidated Statements of Operations for the Fiscal Quarters
                  Ended April 4, 1999 and March 29, 1998..............................................................2

           Condensed Consolidated Statements of Cash Flows for the Fiscal Quarters
                  Ended April 4, 1999 and March 29, 1998..............................................................3

           Condensed Consolidated Statement of Shareholders' Equity (Deficit)
                  For the Fiscal Quarter Ended April 4, 1999..........................................................4

           Notes to Condensed Consolidated Financial Statements....................................................5-14




       ITEM 2 - Management's Discussion and Analysis of Financial Condition and
                        Results of Operations.....................................................................15-19



PART II - OTHER INFORMATION AND SIGNATURE......................................................................   20-22



EXHIBITS........................................................................................................  23-25
</TABLE>

<PAGE>   3
MSX INTERNATIONAL, INC.

PART I - FINANCIAL INFORMATION
ITEM 1 -  FINANCIAL STATEMENTS

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
as of April 4, 1999 and January 3, 1999

<TABLE>
<CAPTION>
                                                                       APRIL 4,          JANUARY 3,
                                                                         1999              1999
                                                                      -----------        ----------
                                                                      (unaudited)

                                                                         (dollars in thousands)
<S>                                                                    <C>               <C>      
ASSETS                                                                    
Current assets:
   Cash and cash equivalents                                           $   3,642         $   4,248
   Receivables, net                                                      230,905           208,451
   Inventory                                                               1,435             2,362
   Prepaid expenses and other assets                                       7,951             5,559
   Deferred income taxes                                                     900               961
                                                                       ---------         ---------
       Total current assets                                              244,833           221,581

Property and equipment, net of accumulated depreciation
   of $54,513 and $51,863, respectively                                   35,500            35,265
Buildings held for sale                                                   15,000            15,000
Goodwill, net of accumulated amortization
 of $2,952 and $2,337, respectively                                       58,369            58,993
Other assets                                                              15,645            13,349
Deferred income taxes                                                     12,318            12,536
                                                                       ---------         ---------
       Total assets                                                    $ 381,665         $ 356,724
                                                                       =========         =========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
 Notes payable and current portion of long-term debt                   $   4,572         $   4,581
 Accounts payable                                                         98,967            89,886
 Accrued payroll and benefits                                             25,318            23,286
 Other accrued liabilities                                                21,733            26,825
 Contractual acquisition obligation                                       15,000            15,000
 Deferred income taxes                                                     1,736             2,192
                                                                       ---------         ---------
       Total current liabilities                                         167,326           161,770

Long-term debt                                                           198,754           180,356
Long-term deferred compensation liability and other                        4,394             4,703
                                                                       ---------         ---------
       Total liabilities                                                 370,474           346,829
                                                                       ---------         ---------
Redeemable Series A Preferred Stock, authorized 500,000 shares;
    issued and outstanding, 360,000 shares                                36,000            36,000
                                                                       ---------         ---------
Shareholders' equity (deficit):
   Common stock, $.01 par, authorized 2,000,000 shares; issued
       and outstanding 100,003 shares and 97,004 shares, respectively          l                 1
   Additional paid-in capital                                            (24,644)          (24,764)

   Accumulated other comprehensive income (loss)                          (2,414)           (1,140)

   Retained earnings (accumulated deficit)                                 2,248              (202)
                                                                       ---------         ---------
       Total shareholders' equity (deficit)                              (24,809)          (26,105)
                                                                       ---------         ---------
       Total liabilities and shareholders' equity (deficit)            $ 381,665         $ 356,724
                                                                       =========         =========
</TABLE>

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


                                       1
<PAGE>   4
MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 
for the fiscal quarters ended April 4, 1999 and March 29, 1998


<TABLE>
<CAPTION>
                                                         1999                1998
                                                       ---------           ---------
                                                           (dollars in thousands)
                                                               (unaudited)
<S>                                                   <C>                 <C>      
Net sales                                             $ 339,488           $ 255,056
Cost of sales                                          (315,184)           (236,719)
                                                      ---------           ---------
     Gross profit                                        24,304              18,337

Selling, general and administrative expenses            (14,151)            (12,504)
Michigan Single Business Tax                             (1,315)               (772)
                                                      ---------            --------
     Operating income                                     8,838               5,061
                                                      ---------           ---------
Interest expense, net                                    (4,659)             (3,755)
Interest expense, related parties                            --                (558)
                                                      ---------           ---------
                                                          4,659              (4,313)
                                                      ---------           ---------
     Income before income taxes                           4,179                 748

Income tax provision                                      1,729                 370
                                                      ---------           ---------
     Net income                                       $   2,450           $     378
                                                      =========           =========
</TABLE>

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


                                       2


<PAGE>   5

MSX  INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for the fiscal quarters ended April 4, 1999 and March 29, 1998
<TABLE>
<CAPTION>
                                                                  1999             1998
                                                               ----------       ----------
                                                                 (dollars in thousands)
                                                                       (unaudited)
Cash from (used for) operating activities:
<S>                                                             <C>              <C>     
   Net income                                                   $  2,450         $    378
   Adjustments to reconcile net income to net cash from 
   (used for) operating activities:
     Depreciation                                                  2,731            3,487
     Amortization                                                    775              352
     Deferred  taxes                                                (177)              --
     (Increase) decrease in receivables, net                     (22,454)           1,002
     (Increase) decrease in inventory                                927               64
     (Increase) decrease in prepaid expenses and other assets     (2,392)             966
     Increase (decrease) in current liabilities                    7,485           (6,292)
     Other, net                                                     (229)            (165)
                                                                --------         --------
        Net cash (used for) operating activities                 (10,884)            (208)
                                                                --------         --------
Cash from (used for) investing activities:
 Capital expenditures                                             (3,010)          (1,763)
 Acquisition of businesses, net of cash received                  (2,429)              --
 Proceeds from sale of property and equipment                         38               --
                                                                --------         --------
        Net cash (used for) investing activities                  (5,401)          (1,763)
                                                                --------         --------
Cash from (used for) financing activities:
     Proceeds from long-term debt issues                              --           96,778
     Payment of long-term debt                                        --          (70,000)
     Changes in revolving debt                                    18,503          (22,083)
     Changes in book overdraft                                    (1,463)           1,839
     Sale of Common Stock                                            120               --
     Other, net                                                     (207)            (324)
                                                                --------         --------
        Net cash from financing activities                        16,953            6,210
                                                                --------         --------
Effect of foreign exchange rate changes on cash                   (1,274)            (776)
                                                                --------         --------
Cash:
    Increase (decrease) for the period                              (606)           3,463
    Balance, beginning of period                                   4,248           11,575
                                                                --------         --------
    Balance, end of period                                      $  3,642         $ 15,038
                                                                ========         ========
</TABLE>

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


                                       3
<PAGE>   6

MSX  INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT) 
for the fiscal quarter ended April 4, 1999 
<TABLE> 
<CAPTION>

                                                                                   RETAINED
                                                                     OTHER         EARNINGS            TOTAL
                                         COMMON     ADDITIONAL    COMPREHENSIVE  (ACCUMULATED       SHAREHOLDERS'
                                         STOCK   PAID-IN CAPITAL  INCOME(LOSS)     DEFICIT)       EQUITY (DEFICIT)
                                         -----   --------------- -------------    -----------     ----------------
                                                              (dollars in thousands)
                                                                    (unaudited)
<S>                                   <C>         <C>              <C>            <C>              <C>       
Balance at January 3, 1999             $     1     $ (24,764)       $ (1,140)      $  (202)         $ (26,105)

Comprehensive income (loss)

   Net income                                                                        2,450              2,450

   Cumulative translation adjustment                                  (1,274)                          (1,274)
                                                                                                    ---------
Total comprehensive income (loss)                                                                       1,176

Sale of Common Stock                                     120                                              120
                                       -------     ---------        --------       -------          ---------
Balance at April 4, 1999               $     1     $ (24,644)       $ (2,414)      $ 2,248          $ (24,809)
                                       =======     =========        ========       =======          =========
</TABLE>


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





                                        4




<PAGE>   7


MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands unless otherwise stated)


1.       ORGANIZATION AND BASIS OF PRESENTATION:

         The accompanying financial statements represent the consolidated assets
and liabilities and operations of MSX International, Inc. and its subsidiaries
("MSXI" or the "Company"). The Company is principally engaged in the business
of providing technical support services, primarily to automobile manufacturers
and suppliers in the United States and Europe.

         The Company adopted a 52-53 week fiscal year which ends on the Sunday
nearest December 31.

         In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments which are normal and
recurring in nature necessary to present fairly its financial position at April
4, 1999, its shareholders' equity (deficit) as of April 4, 1999, its results of
operations for the fiscal quarters ended April 4, 1999 and March 29, 1998 and
its cash flows for the fiscal quarters ended April 4, 1999 and March 29, 1998.
The operating results for the fiscal quarters ended April 4, 1999 and March 29,
1998 are not necessarily indicative of the results of operations for the entire
year. Reference should be made to the consolidated financial statements included
in the Company's Annual Report on Form 10-K for the fiscal year ended January 3,
1999.

2.       REDEEMABLE SERIES A PREFERRED STOCK:

         Dividends on preferred stock are payable in cash at a rate per annum
equal to 12 percent of the stated value plus an amount equal to any accrued and
unpaid dividends. As of April 4, 1999, the Company had not declared any
dividends. Accordingly, no dividends have been paid or accrued. Dividends
accumulated but not declared aggregated approximately $10.8 million as of April
4, 1999.

3.       DEBT:

         Debt is comprised of the following:

<TABLE>
<CAPTION>

                                                             Interest Rate at                  Outstanding at
                                                   -----------------------------------------------------------------
                                                        April 4,           January 3,      April 4,      January 3,

                                                          1999                1999          1999           1999
                                                      --------------     --------------  -----------    -----------
<S>                                                         <C>                <C>        <C>            <C>      
Senior Subordinated Notes                                   11.375%            11.375%    $ 100,000      $ 100,000
Credit Facilities, as amended and restated:
   Revolving line of credit notes                      6.34 - 7.75%       7.03 - 7.75%       46,393         26,238
   Swingline notes                                     6.44 - 7.06%       6.75 - 7.81%       22,361         24,118
   Term notes                                                 6.69%              7.29%       30,000         30,000
Ford Motor Company Limited, line of credit                    7.34%              8.69%        4,572          4,581
                                                                                          ---------      ---------
                                                                                            203,326        184,937

Less current portion                                                                          4,572          4,581
                                                                                          ---------      ---------
Total long-term debt                                                                      $ 198,754      $ 180,356
                                                                                          =========      =========
</TABLE>




                                       5

<PAGE>   8

MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise stated)

3.       DEBT: - (CONTINUED)

Senior Subordinated Notes

         On January 22, 1998, the Company issued, in a private placement, $100
million aggregate principal amount of 11-3/8% unsecured senior subordinated
notes maturing January 15, 2008 (the "Series A Notes"). On August 20, 1998, the
Company consummated an offer to exchange 11-3/8% Senior Subordinated Notes which
had been registered under the Securities Act of 1933 for any and all outstanding
Series A Notes. The Company's Registration Statement on Form S-4 with the
Securities and Exchange Commission became effective on July 22, 1998. Interest
on the Series A Notes is payable semi-annually at 11-3/8% per annum. The Series
A Notes may be redeemed subsequent to January 15, 2003 at premiums, which begin
at 105.6875% and decline each year to face for redemptions taking place after
January 15, 2006. In addition, at any time prior to January 15, 2001, the
Company may redeem up to 35% of the original aggregate principal amount of the
Series A Notes with the proceeds of one or more public equity offerings at a
redemption price of 111.375% plus accrued and unpaid interest, if any. Also,
upon the occurrence of a Change of Control, as defined in the Indenture dated
January 15, 1998 (the "Indenture"), the Series A Notes may be redeemed at the
option of the Note holders at a premium of one percent, plus accrued and unpaid
interest, if any. The Series A Notes contain covenants which, among others,
limit the incurrence of additional indebtedness and restrict capital
transactions, distributions and asset dispositions of certain subsidiaries.

         In connection with the Series A Notes offering, each of the Company's
domestic restricted subsidiaries, as defined in the Indenture (the "Guarantor
Subsidiaries"), irrevocably and unconditionally guarantee the Company's
performance under the Notes as primary obligors.

Credit Facilities

         Concurrently with the private placement, the Company entered into a
credit facility with Bank One Corporation (the "Credit Facility"), with a
borrowing base of up to $100 million, as defined, to replace the prior Credit
Facility (the "Old Credit Facility"). On April 14, 1998, the Company syndicated
the Credit Facility to add additional commercial lenders and amended and
restated the Credit Facility to add a $30 million term loan portion. On the same
date, the Company borrowed the full amount available under the term loan and
used the funds to reduce outstanding balances under the revolving loan portion
of the Credit Facility as amended and restated. Term loan borrowings are subject
to satisfaction of the same borrowing base requirements and financial reporting
and operating covenants as are other borrowings under the Credit Facility. The
Credit Facility provides for borrowings as revolving credit loans, letters of
credit, swingline loans and term loans. This Facility expires January 22, 2003.
Revolving credit loans, swingline loans and letters of credit (collectively
"Revolving Debt") are payable on demand. The term loan was issued with a
five-year maturity. Interest on the loans under the Credit Facility is payable
quarterly or, if earlier, at the end of each interest period and accrues at an
annual rate equal to a floating rate, as defined, for swingline loans which
accrue at an annual rate equal to a fixed or floating rate as negotiated at the
time of each borrowing.

         Each significant domestic subsidiary of the Company guarantees all
obligations of the Company under the Credit Facility. In addition, the Company
has pledged the stock of such domestic subsidiaries and 65% of the stock of the
significant foreign subsidiaries. Additionally, a first lien exists on
substantially all assets of such domestic subsidiaries. The obligations of the
Company under the Credit Facility rank senior to all other indebtedness of the
Company.

                                       6
<PAGE>   9

MSX INTERNATIONAL, INC. 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise noted)


3.       DEBT: - (CONTINUED)

         The Credit Facility contains certain reporting covenants, customary
affirmative covenants and various negative covenants including, but not limited
to, certain limitations on mergers, sales of assets, acquisitions, liens,
investments, indebtedness, contingent obligations, dividends, subsidiaries'
ability to agree to dividend restrictions, affiliate transactions and changes of
business. The Credit Facility also contains certain covenants with respect to
employee benefit arrangements and environmental matters and certain financial
covenants including, but not limited to, a ratio of total debt to EBITDA, a
fixed charge coverage ratio and a minimum net worth requirement, each as
defined.

         The net proceeds from the issuance of Series A Notes and the Credit
Facility were used to retire the bridge loans with CVC and MascoTech, the
MascoTech Subordinated Notes and the outstanding amount under the Old Credit
Facility.

         As of April 4, 1999, $98.8 million was outstanding under the Credit
Facility and has been classified as long-term debt as the Company has both the
ability and intent to refinance such amounts under the Credit Facility.

4.       BOOK OVERDRAFTS:

         Book overdrafts represent checks drawn on zero balance accounts that
have not yet been presented to the Company's banks for funding. Such overdrafts
are funded when the related checks are presented and are not subject to finance
charges. Accordingly, there were negative book balances of $12.8 million and
$14.3 million at April 4, 1999 and January 3, 1999, respectively. Such balances
are included in Accounts Payable in the Condensed Consolidated Balance Sheets.

5.       INCOME TAXES:

         For the fiscal quarters ended April 4, 1999 and March 29, 1998, the
effective income tax rate was 41.4% and 49.5%, respectively. The decrease in the
Company's effective income tax rate resulted from the expected increased ratio 
of earnings to non-deductible expenses and a decrease in certain foreign 
statutory income tax rates.

6.       SEGMENT INFORMATION:

          The Company has two reportable segments: Purchasing Support Services 
and Outsourcing Services.

         In its Purchasing Support Services segment, the Company provides
administrative support to large companies for the purchase of various services.
The customers in this segment use the Company and its automated processes to
manage the procurement of staffing, training and other professional services.
Sales for this segment include the billings from sub-suppliers for their
services rendered, plus a small mark-up for management and processing.

                                       7
<PAGE>   10
MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise noted)

6.       SEGMENT INFORMATION: - (CONTINUED)

         In its Outsourcing Services segment, the Company provides technical
support services, including technical and professional contract staffing,
product development support and other business services. Sales in this segment
are based principally on fees charged for resources provided to support
customers' development, manufacturing and distribution of their products and
services.

     The segment data includes intersegment sales as well as charges allocating
corporate selling, general and administrative expenses to each of the operating
segments. The Company evaluates performance based on earnings before interest
and taxes (EBIT), including the Michigan Single Business Tax.


     Summarized below is the segment information for fiscal quarters ended April
4, 1999 and March 29, 1998:
<TABLE>
<CAPTION>

                     FISCAL QUARTER ENDED                    FISCAL QUARTER ENDED
                       APRIL 4, 1999                              MARCH 29, 1998
         -------------------------------------------------------------------------------------
              PURCHASING                             PURCHASING
               SUPPORT     OUTSOURCING                SUPPORT     OUTSOURCING
               SERVICES     SERVICES      TOTAL      SERVICES       SERVICES        TOTAL
         -------------------------------------------------------------------------------------
<S>         <C>            <C>         <C>          <C>            <C>          <C>      
Sales       $ 170,312      $178,375    $ 348,687    $ 145,240      $ 114,698    $ 259,938

EBIT        $   1,272      $  8,881    $  10,153    $     637      $   5,196    $   5,833

</TABLE>

         A reconciliation of total segment sales and EBIT to the Company's
consolidated sales and EBIT are as follows:

<TABLE>
<CAPTION>

                                       FISCAL QUARTER ENDED FISCAL QUARTER ENDED
                                          APRIL 4, 1999         MARCH 29, 1998
                                       -------------------  --------------------
<S>                                        <C>                   <C>
SALES
Total segment sales                        $ 348,687             $ 259,938
Elimination of intersegment sales             (9,199)               (4,882)
                                           ---------             ---------
Consolidated sales                         $ 339,488             $ 255,056
                                           =========             =========

<CAPTION>

                                       FISCAL QUARTER ENDED FISCAL QUARTER ENDED
                                           APRIL 4, 1999        MARCH 29, 1998
                                       -------------------  --------------------
<S>                                        <C>                   <C>  
EBIT
Total EBIT                                 $  10,153             $   5,833
Interest expense                              (4,659)               (4,313)
Michigan Single Business Tax                  (1,315)                 (772)
                                           ---------             ---------
Consolidated income before income taxes    $   4,179             $     748
                                           =========             =========
</TABLE>




                                       8

<PAGE>   11

MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise noted)

7.       SUBSEQUENT EVENTS:

         On May 18, 1999, the Company issued, in a private placement, $30
million aggregate principle amount of 11-3/8% unsecured senior subordinated
notes maturing January 15, 2008 (the "Series B Notes"). The Series B Notes were
issued, net of discount, at an aggregate amount of $29.4 million. These Series B
Notes are substantially identical to, and rank pari passu in right of payment
with, the Series A Notes issued by the Company on January 22, 1998. These Series
B Notes and the previously issued Series A Notes will trade as separate
securities prior to the consummation of an Exchange Offer (an "Exchange Offer").
It is anticipated that an Exchange Offer  will be consummated pursuant to an
effective registration statement within 210 days of the issuance of the Series B
Notes. The net proceeds received from the issuance of the notes were used to
repay outstanding indebtedness under the Company's Credit Facility.

          In early April 1999, the Company acquired Rice Cohen International, a
permanent placement staffing company based in Yardley, Pennsylvania with annual
sales of approximately $5 million.

8.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES:

         In connection with the Series A Notes offering on January 22, 1998,
each of the Company's domestic restricted subsidiaries, as defined in the
Indenture (the "Guarantor Subsidiaries"), irrevocably and unconditionally
guaranteed the Company's performance under the Series A Notes as primary
obligors. 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 Series A 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


<PAGE>   12

MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(dollars in thousands unless otherwise noted)


8.   GUARANTOR AND NON-GUARANTOR SUBSIDIARIES: - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
as of April 4, 1999
<TABLE>
<CAPTION>

                                                                     GUARANTOR  NON-GUARANTOR                 MSXI
                                                                   SUBSIDIARIES  SUBSIDIARIES ELIMINATIONS CONSOLIDATED
                                                                   --------------------------------------------------
                                                                                  (dollars in thousands)
                                                                                        (unaudited)
<S>                                                                 <C>          <C>          <C>          <C>    
ASSETS
Current assets:
   Cash and cash equivalents                                        $     480    $   3,162    $      --    $   3,642
   Receivables, net                                                   169,937       60,968           --      230,905
   Inventory                                                            1,390           45           --        1,435
   Prepaid expenses and other assets                                    5,498        2,453           --        7,951
   Deferred income taxes                                                  807           93           --          900
                                                                    ------------------------------------------------
      Total current assets                                            178,112       66,721           --      244,833

Property and equipment, net                                            22,666       12,834           --       35,500
Buildings held for sale                                                15,000           --           --       15,000
Goodwill, net                                                          54,794        3,575           --       58,369
Investment in subsidiaries                                             33,593        3,697      (37,290)          --
Other assets                                                           12,794        2,851           --       15,645
Deferred income taxes                                                   9,501        2,817           --       12,318
                                                                    ------------------------------------------------
      Total assets                                                  $ 326,460    $  92,495    $ (37,290)   $ 381,665
                                                                    ================================================
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Notes payable and current portion of long-term debt              $      --    $   4,572    $      --    $   4,572
   Accounts payable                                                    84,130       14,837           --       98,967
   Accrued liabilities                                                 38,256        8,827          (32)      47,051
   Contractual acquisition obligation                                  15,000           --           --       15,000
   Deferred income taxes                                                1,738           (2)          --        1,736
                                                                    ------------------------------------------------
        Total current liabilities                                     139,124       28,234          (32)     167,326

Long-term debt                                                        186,450       12,304           --      198,754
Intercompany accounts                                                 (28,465)      28,465           --           --
Long-term deferred compensation liability and other                     4,394           --           --        4,394
                                                                    ------------------------------------------------
        Total liabilities                                             301,503       69,003          (32)     370,474
                                                                    ------------------------------------------------

Redeemable Series A Preferred Stock                                    36,000           --           --       36,000
                                                                    ------------------------------------------------
Shareholders' equity (deficit)                                        (11,043)      23,492      (37,258)     (24,809)
                                                                    ------------------------------------------------

       Total liabilities and shareholders' equity (deficit)         $ 326,460    $  92,495    $ (37,290)   $ 381,665
                                                                    ================================================
</TABLE>




                                       10
<PAGE>   13
MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise noted)

8.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES: - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
as of January 3, 1999
<TABLE>
<CAPTION>
                                                               GUARANTOR      NON-GUARANTOR                        MSXI
                                                              SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS    CONSOLIDATED
                                                              ------------    ------------     ------------    ------------
                                                                               (dollars in thousands)
                                                                                     (unaudited)
<S>                                                            <C>               <C>            <C>              <C>    
ASSETS
Current assets:
   Cash and cash equivalents                                   $   1,690         $ 2,558        $     --         $   4,248
   Receivables, net                                              145,715          62,736              --           208,451
   Inventory                                                       2,315              47              --             2,362
   Prepaid expenses and other assets                               4,029           1,530              --             5,559
   Deferred income taxes                                              --             961              --               961
                                                               ---------         -------        --------         ---------
     Total current assets                                        153,749          67,832              --           221,581
Property and equipment, net                                       23,255          12,010              --            35,265
Buildings held for sale                                           15,000              --              --            15,000
Goodwill, net                                                     55,335           3,658              --            58,993
Investment in subsidiaries                                        33,703              --         (33,703)               --
Other assets                                                      12,990             359              --            13,349
Deferred income taxes                                              9,711           2,825              --            12,536
                                                               ---------         -------        --------         ---------
     Total assets                                              $ 303,743         $86,684        $(33,703)        $ 356,724
                                                               =========         =======        ========         =========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Notes payable and current portion
      of long-term debt                                        $      --         $ 4,581        $     --         $   4,581
   Accounts payable                                               74,705          15,181              --            89,886
   Accrued liabilities                                            41,057           9,086             (32)           50,111
   Contractual acquisition obligation                             15,000              --              --            15,000
   Deferred income taxes                                             930           1,262              --             2,192
                                                               ---------         -------        --------         ---------
     Total current liabilities                                   131,692          30,110             (32)          161,770
Long-term debt                                                   173,238           7,118              --           180,356
Intercompany accounts                                            (28,832)         28,832              --                --
Long-term deferred compensation liability and other                4,629              74              --             4,703
                                                               ---------         -------        --------         ---------
     Total liabilities                                           280,727          66,134             (32)          346,829
                                                               ---------         -------        --------         ---------

Redeemable Series A Preferred Stock                               36,000              --              --            36,000
                                                               ---------         -------        --------         ---------
Shareholders' equity (deficit)                                   (12,984)         20,550         (33,671)          (26,105)
                                                               ---------         -------        --------         ---------
    Total liabilities and shareholders' equity (deficit)       $ 303,743         $86,684        $(33,703)        $ 356,724
                                                               =========         =======        ========         =========
</TABLE>



                                       11
<PAGE>   14

MSX  INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise noted)

8.  GUARANTOR AND NON-GUARANTOR SUBSIDIARIES: - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS 
for the fiscal quarters ended April 4,1999 and March 29, 1998 

<TABLE> 
<CAPTION>

                                                                                       1999
                                                          --------------------------------------------------------------
                                                            GUARANTOR     NON-GUARANTOR                          MSXI
                                                          SUBSIDIARIES     SUBSIDIARIES   ELIMINATIONS      CONSOLIDATED
                                                          ------------     ------------   ------------      ------------
                                                                             (dollars in thousands)
                                                                                   (unaudited)

<S>                                                       <C>               <C>              <C>              <C>      
Net sales                                                 $ 287,855         $ 51,633         $     --         $ 339,488
Cost of sales                                              (271,204)         (43,980)              --          (315,184)
                                                          ---------         --------         --------         ---------

     Gross profit                                            16,651            7,653               --            24,304

Selling, general and administrative expense                  (9,045)          (5,106)              --           (14,151)
Michigan Single Business Tax                                 (1,315)              --               --            (1,315)
                                                          ---------         --------         --------         ---------
     Operating income                                         6,291            2,547               --             8,838

Interest expense, net                                        (4,060)            (599)              --            (4,659)
Equity in subsidiary earnings                                 1,246               --           (1,246)               --
                                                          ---------         --------         --------         ---------
     Income before income taxes                               3,477            1,948           (1,246)            4,179

Income tax provision                                          1,027              702               --             1,729
                                                          ---------         --------         --------         ---------
     Net income                                           $   2,450         $  1,246         $ (1,246)        $   2,450
                                                          =========         ========         ========         =========



<CAPTION>

                                                                                          1998
                                                          --------------------------------------------------------------
                                                          GUARANTOR      NON-GUARANTOR                           MSXI
                                                         SUBSIDIARIES    SUBSIDIARIES      ELIMINATIONS      CONSOLIDATED
                                                         ------------    ------------      ------------      ------------
                                                                             (dollars in thousands)
                                                                                   (unaudited)

<S>                                                       <C>               <C>              <C>              <C>      
Net sales                                                 $ 217,966         $ 37,090         $     --         $ 255,056
Cost of sales                                              (205,300)         (31,419)              --          (236,719)
                                                          ---------         --------         --------         ---------

     Gross profit                                            12,666            5,671               --            18,337

Selling, general and administrative expense                  (8,638)          (3,866)              --           (12,504)
Michigan Single Business Tax                                   (772)              --               --              (772)
                                                          ---------         --------         --------         ---------

      Operating income (loss)                                 3,256            1,805               --             5,061

Interest expense, net                                        (3,380)            (933)              --            (4,313)
Equity in subsidiary earnings                                   450               --             (450)               --
                                                          ---------         --------         --------         ---------
      Income before income taxes                                326              872             (450)              748

Income tax provision (benefit)                                  (52)             422               --               370
                                                          ---------         --------         --------         ---------
      Net income                                          $     378         $    450         $   (450)        $     378
                                                          =========         ========         ========         =========
</TABLE>

                                       12
<PAGE>   15



MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED) 
(dollars in thousands unless otherwise noted)

8.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES: - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS 
for the fiscal quarter ended April 4, 1999
<TABLE>
<CAPTION>
                                                                            GUARANTOR    NON-GUARANTOR                      MSXI
                                                                           SUBSIDIARIES   SUBSIDIARIES   ELIMINATIONS   CONSOLIDATED
                                                                           ------------   ------------   ------------   ------------
                                                                                            (dollars in thousands)
                                                                                                 (unaudited)
Cash from (used for) operating activities:
<S>                                                                   <C>               <C>              <C>               <C>     
   Net income                                                         $  1,204          $ 1,246          $     --          $  2,450
   Equity in earnings of subsidiaries                                    1,246               --            (1,246)               --
   Adjustments to reconcile net income to net cash from 
       (used for) operating activities:
     Depreciation                                                        2,218              513                --             2,731
     Amortization                                                          729               46                --               775
     Deferred taxes                                                        211             (388)               --              (177)
     (Increase) decrease in receivables, net                           (24,385)           1,931                --           (22,454)
     (Increase) decrease in inventory                                      926                1                --               927
     (Increase) decrease in prepaid expenses and other assets           (1,478)            (914)               --            (2,392)
     Increase (decrease) in current liabilities                          6,375            1,110                --             7,485
     Other, net                                                           (259)             176              (146)             (229)
                                                                      --------          -------          --------          --------
       Net cash from (used for) operating activities                   (13,213)           3,721            (1,392)          (10,884)
                                                                      --------          -------          --------          --------
Cash from (used for) investing activities:
   Capital expenditures                                                 (1,730)          (1,280)               --            (3,010)
   Acquisition of businesses, net of cash received                         (77)          (2,352)               --            (2,429)
   Proceeds from sale of property and equipment                             --               38                --                38
                                                                      --------          -------          --------          --------
      Net cash (used for) investing activities                          (1,807)          (3,594)               --            (5,401)
                                                                      --------          -------          --------          --------
Cash from (used for) financing activities:
     Intercompany                                                        1,407           (1,407)               --                --
     Investment in subsidiaries                                         (3,545)            (146)            3,691                --
     Equity in subsidiaries                                              3,406             (205)           (3,201)               --
     Changes in revolving debt                                          13,325            5,178                --            18,503
     Changes in book overdraft                                              (1)          (1,462)               --            (1,463)
     Sale of Common Stock                                                  120               --                --               120
     Other, net                                                             --             (207)               --              (207)
                                                                      --------          -------          --------          --------
       Net cash from financing activities                               14,712            1,751               490            16,953
                                                                      --------          -------          --------          --------
Effect of foreign exchange rate changes on cash                           (902)          (1,274)              902            (1,274)
                                                                      --------          -------          --------          --------
Cash:
    Increase (decrease) for the period                                  (1,210)             604                --              (606)
    Balance, beginning of period                                         1,690            2,558                --             4,248
                                                                      --------          -------          --------          --------
    Balance, end of period                                            $    480          $ 3,162          $     --          $  3,642
                                                                      ========          =======          ========          ========
</TABLE>






                                       13















<PAGE>   16
MSX  INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(dollars in thousands unless otherwise noted)

8.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES: - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
for the fiscal quarter ended  March 29, 1998

<TABLE>
<CAPTION>

                                                                              GUARANTOR    NON-GUARANTOR                    MSXI

                                                                             SUBSIDIARIES  SUBSIDIARIES   ELIMINATIONS  CONSOLIDATED
                                                                             ------------  ------------   ------------  ------------
                                                                                         (dollars in thousands)

                                                                                               (unaudited)
<S>                                                                          <C>           <C>            <C>           <C>    
Cash from (used for) operating activities:
  Net income (loss)                                                           $    (72)     $    450      $     --      $    378
  Equity in earnings of subsidiaries                                               450            --          (450)           --
  Adjustments to reconcile net income (loss) to net cash
    from (used for) operating activities:
  Depreciation                                                                   2,158         1,329            --         3,487
  Amortization                                                                     352            --            --           352
  (Increase) decrease in receivables                                             9,051        (8,049)           --         1,002
  (Increase) decrease in inventory                                                  64            --            --            64
  (Increase) decrease in prepaid expenses and other assets                      (1,210)        2,176            --           966
  Increase (decrease) in current liabilities                                   (13,772)        7,480            --        (6,292)
  Other, net                                                                       199          (315)          (49)         (165)
                                                                              --------      --------      --------      --------
    Net cash from (used for) operating activities                               (2,780)        3,071          (499)         (208)
                                                                              --------      --------      --------      --------
Cash from (used for) investing activities:
  Capital expenditures                                                            (895)         (868)           --        (1,763)
                                                                              --------      --------      --------      --------
    Net cash (used for) investing activities:                                     (895)         (868)           --        (1,763)
                                                                              --------      --------      --------      --------  
Cash from (used for) financing activities:
  Intercompany                                                                  (1,564)        1,564            --            --
  Investment in subsidiaries                                                      (210)          101           109            --
  Equity in subsidiaries                                                          (450)           --           450            --
  Proceeds from long-term debt issues                                           96,778            --            --        96,778
  Payment of long-term debt                                                    (70,000)           --            --       (70,000)
  Changes in revolving debt                                                    (24,552)        2,469            --       (22,083)
  Changes in book overdraft                                                      1,839            --            --         1,839
  Other, net                                                                      (321)           (3)           --          (324)
                                                                              --------      --------      --------      --------
    Net cash from financing activities                                           1,520         4,131           559         6,210
                                                                              --------      --------      --------      --------
Effect of foreign exchange rate changes on cash                                    (18)         (698)          (60)         (776)
                                                                              --------      --------      --------      --------

Cash:
  Increase (decrease) for the period                                            (2,173)        5,636            --         3,463
  Balance, beginning of period                                                   2,449         9,126            --        11,575
                                                                              --------      --------      --------      --------
  Balance, end of period                                                      $    276      $ 14,762      $     --      $ 15,038
                                                                              ========      ========      ========      ========
</TABLE>



                                       14
<PAGE>   17
MSX INTERNATIONAL, INC.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
              AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

         NET SALES

         The Company's net sales for the quarter ended April 4, 1999 increased
$84.4 million (33.1%) from $255.1 million to $339.5 million, as compared to the
quarter ended March 29, 1998. The increase in net sales resulted from internal
growth of $54.4 million and sales from acquired businesses of approximately
$30.0 million.

         Net sales of the Company's Purchasing Support Services segment for the
quarter ended April 4, 1999 was $170.3 million, an increase of $25.1 million
(17.3%), as compared to $145.2 million for the quarter ended March 29, 1998. The
increase in net sales resulted from greater demand for customer administrative
support services.

         Net sales of the Company's Outsourcing Services segment for the quarter
ended April 4, 1999 was $178.4 million, an increase of $63.7 million (55.5%), as
compared to $114.7 million for the quarter ended March 29, 1998. The increase in
net sales is comprised of increased volume and approximately $30.0 million of
net sales from acquired businesses. In addition to the Company's acquisitions,
increased sales related to the opening of new locations, customers'
consolidation of their supplier base and increased demand for automotive design
and engineering services both in the United States and the United Kingdom.

         GROSS PROFIT

         Gross profit for the quarter ended April 4, 1999 increased $6.0 million
(32.5%) from $18.3 million to $24.3 million, as compared to the quarter ended
March 29, 1998. This increase resulted from improved sales volume and the
acquisition of businesses.

         Gross profit as a percentage of net sales for the quarters ended April
4, 1999 and March 29, 1998 was 7.2% in each quarter. Improvements in the gross
profit margin from the Company's Outsourcing Services segment was offset from
increased sales volume in the Company's Purchasing Support Services segment that
are at lower gross profit margins.

         SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

         The Company's selling, general and administrative expenses for the
quarter ended April 4, 1999 increased $1.6 million (13.2%) from $12.5 million to
$14.1 million, as compared to the quarter ended March 29, 1998. Selling, general
and administrative expenses as a percentage of net sales for the quarter ended
April 4, 1999 was 4.2% as compared to 4.9% for the prior year quarter ended
March 29, 1998. The decline as a percentage of net sales principally related to
the continued consolidation of centralized administrative services and the
increase in net sales volume during the period.

         OPERATING INCOME

         Principally as a result of the foregoing, offset by an increase in
Michigan Single Business Tax of $0.5 million, the Company's operating income for
the quarter ended April 4, 1999 increased $3.7 million (74.6%) from $5.1 million
to $8.8 million, as compared to the quarter ended March 29, 1998. Operating
income as a percentage of net sales for the quarter ended April 4, 1999
increased from 2.0% to 2.6%, as compared to the quarter ended March 29, 1998.



                                       15
<PAGE>   18
MSX INTERNATIONAL, INC.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
              AND RESULTS OF OPERATIONS - (CONTINUED)

LIQUIDITY AND CAPITAL RESOURCES

         The Company's principal capital requirements are for the acquisition of
businesses, capital expenditures, and working capital to support growth. These
requirements have been met through a combination of bank debt, issuance of
subordinated notes and cash from operations.

         The Company typically pays its employees on a weekly basis and is
reimbursed by its customers within invoicing terms, which is generally a 60 day
period after it makes such payment. However, in connection with the Purchasing
Support Services segment, the Company collects related receivables at
approximately the same time it makes such payment to its suppliers.

         Net cash used for operating activities decreased $10.7 million from 
$ (0.2) million for the quarter ended March 29, 1998 as compared to $ (10.9)
million for the quarter ended April 4, 1999. This use of cash from operating
activities resulted from a change in receivables of $23.4 million during the
quarter ended April 4, 1999 as compared to the prior year quarter and other
items of $3.2 million offset by an increase in net income of $2.1 million and a
change in current liabilities of $13.8 million. The changes in receivables
relate to acquisition of businesses, increased sales volume and timing of
customer collections.

         Net cash used for investing activities increased $3.6 million from $1.8
million for the quarter ended March 29, 1998, to $5.4 million for the quarter
ended April 4, 1999. This change relates to capital expenditures and an
investment in Cadform.

         Net cash from financing activities increased $10.7 million from $6.2
million for the quarter ended March 29, 1998 to $16.9 for the quarter ended
April 4, 1999. Financing requirements during the quarter ended April 4, 1999
increased to support the net cash used for operating activities as noted above.

         On January 22, 1998, the Company issued, in a private placement, $100
million aggregate principal amount of 11-3/8% unsecured senior subordinated
notes maturing January 15, 2008. On August 20, 1998, the Company consummated an
offer to exchange 11-3/8% Senior Subordinated Notes ("Series A Notes") which had
been registered under the Securities Act of 1933 for any and all outstanding
notes. The Company's Registration Statement on Form S-4 with the Securities and
Exchange Commission became effective July 22, 1998.

         Concurrent with the private placement, the Company entered into a $100
million credit facility with Bank One Corporation (the "Credit Facility") to
replace a previous credit facility. On April 14, 1998, the Company syndicated
the Credit Facility to add additional commercial lenders and amended and
restated the Credit Facility to add a $30 million term loan portion. On the same
date, the Company borrowed the full amount available under the term loan and
used the funds to reduce outstanding balances under the revolving loan portion
of the Credit Facility. As of April 4, 1999, $98.7 million was outstanding under
the Credit Facility as amended and restated.

         The Company's total indebtedness consists of Series A Notes and Series
B Notes (collectively the "Notes"), borrowings under the Credit Facility and
borrowings under various short-term arrangements. Additional information
regarding theses obligations is set forth in the Notes to the Company's
Condensed Consolidated Financials Statements included in Item 1 of this report.
The ability of the Company to meet its debt service obligations will be
dependent upon the future performance of the Company, which will be impacted by
general economic conditions and other factors.



                                       16
<PAGE>   19


MSX INTERNATIONAL, INC.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
              AND RESULTS OF OPERATIONS - (CONTINUED)

OTHER MATTERS

         On January 8, 1999, the Company acquired an approximate 25% interest in
Cadform GmbH, a German company with sales of approximately $22 million that
provides product design and tooling services to the automotive industry. Based
in Homberg (Ohm), Germany, Cadform specializes in automotive interior systems
and cast aluminum products. Cadform plans to engage in joint projects with the
Company. As part of the investment, the Company obtained an option to acquire
additional interest in Cadform.

SUBSEQUENT EVENTS

         On May 18, 1999, the Company issued, in a private placement, $30
million aggregate principle amount of 11-3/8% unsecured subordinated notes
maturing January 15, 2008 (the "Series B Notes"). The Series B Notes were
issued, net of discount, at an aggregate amount of $29.4 million. These Series B
Notes are substantially identical to, and rank pari passu in right of payment
with, the $100 million aggregate principal amount of 11-3/8% unsecured
subordinated Series A Notes maturing January 15, 2008, issued by the Company on
January 22, 1998. These Series B Notes and the Series A Notes will trade as
separate securities prior to the consummation of an Exchange Offer relating to
the Series B Notes (an "Exchange Offer"). It is anticipated that an Exchange
Offer will be consummated pursuant to an effective registration statement within
210 days of the issuance of the Series B Notes. The net proceeds received from
the issuance of the Series B Notes were used to repay outstanding indebtedness
under the Company's Credit Facility.

          In early April 1999, the Company acquired Rice Cohen International, a
permanent placement staffing company based in Yardley, Pennsylvania with annual
sales of approximately $5 million.

INFLATION

         Although the Company cannot anticipate future inflation, it does not
believe that inflation has had, or is likely in the foreseeable future, to have
a material impact on its results of operations. While the Company's contracts
typically do not include inflation adjustments, the Company's Master Vendor
Agreement with Ford Motor Company does provide for inflation adjustments for
contract staffing services provided under the Master Vendor Program.

SEASONALITY

         The Company's quarterly operating results are affected primarily by the
number of billing days in the quarter and the seasonality of its customers'
businesses. Demand for services of the Company have historically been lower
during the year-end holidays.

YEAR 2000

         The Year 2000 issue ("Y2K") is the result of computer programs having
been written using two digits, rather than four, to define the applicable year.
Any of the computers, computer programs and manufacturing and administrative
equipment that have date sensitive software may recognize a date having "00" as
the year 1900 rather than the year 2000. If any of Company's systems or
equipment use only two digits, systems failures or miscalculations may result.
This may cause disruptions of operations including, among other things, a
temporary inability to process transactions or send and receive electronic data
with third parties, or to engage in similar normal business activities.


                                      17



<PAGE>   20
MSX INTERNATIONAL, INC.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
              AND RESULTS OF OPERATIONS - (CONTINUED)

YEAR 2000 - (CONTINUED)

         The Company, on a coordinated basis and with the assistance of
consultants, is addressing Y2K. The Company's Y2K methodology categorizes its
assets into four areas: applications, facility systems, PCs and peripherals, and
third party providers.

         Applications have been classified depending on the associated business
unit or corporate sponsor. Managers are in place with responsibility for
prioritization, assessment, remediation planning and implementation, and
testing. Five hundred applications have been identified, of which 88 are
considered critical. Substantially all critical applications are scheduled for
remediation and testing by June 30, 1999. Although there can be no assurances
that the Company will identify and correct every Y2K defect, the Company
believes it has in place a comprehensive program to identify, remediate and test
all applicable applications.

         The Company has inventoried all facility systems (e.g., HVAC, security,
telephones, etc.) worldwide. Non-compliance reports have been distributed to
individual business units. Less than five percent of all facility systems were
not Y2K compliant. Business units will replace, retire or repair facility
systems as necessary.

         PCs and peripherals have been inventoried worldwide. All PC's were
upgraded to ensure hardware and software compliance by the end of the first
fiscal quarter of 1999. Substantially all network operations hardware and
software have been upgraded and are compliant as of the date of this Offering
Memorandum.

         The majority of third party providers and key suppliers have been
contacted with a letter requesting Y2K status. Contingency planning has
commenced with the identification of critical facilities and systems. Specific
back-up systems plans were finalized by the end of the first fiscal quarter of
1999. The ability of key service providers, such as utility companies, to
facilitate the Company's need is of paramount importance. In some cases,
especially with respect to its utility vendors, alternative suppliers may not be
available.

         For its information technology, the Company currently uses a mid-range,
non-mainframe based computer environment which is complemented by a series of
local area networks ("LAN's") that are connected via a wide-area network
("WAN"). Enabled versions of the Company's financial, human resource and
business systems are in place. The Company incorporates limited use of embedded 
technology.

         The Company's most significant risks with respect to Y2K problems are
lost revenue and damaged relations with the Company's customers resulting from a
delay in the delivery of goods and services and the effect of shutting down
production or a customer's facility. The Company believes the risk may be
somewhat mitigated as the majority of the Company's revenue is generated from
the sale of business systems, systems technology and staffing services as
opposed to the delivery of manufactured product.

         The Company's cost for Y2K compliance preparation in 1998 was
approximately $500,000. Y2K remediation costs for 1999 are expected to reach
$2.0 million, which include upgrades, repairs and programming. As the Y2K
project continues, the Company may discover additional Y2K problems, may not be
able to develop, implement or test remediation or contingency plans, or may find
that the cost of these activities exceed current expectations. In many cases,
the Company must rely on assurances from suppliers that new and upgraded
information systems as well as key services will be Y2K compliant. While the
Company plans to validate supplier representations, it cannot be sure that its
tests will be adequate, or that, if problems are identified they will be
addressed in a timely and satisfactory manner. Even if the Company, in a timely
manner, completes all of its assessments, implements and tests all remediation
plans, and develops contingency plans, some problems may not be identified or
corrected in time to prevent material adverse consequences or business
interruptions to the Company.




                                       18
<PAGE>   21

MSX INTERNATIONAL, INC.

ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
              AND RESULTS OF OPERATIONS - (CONTINUED)

EUROCURRENCY

         On January 1, 1999, the member states of the European Economic and
Monetary Union agreed to adopt the Euro as their common legal currency. The
existing member state currencies are scheduled to remain legal tender as
denominations of the Euro until at least January 1, 2002, but not later than
July 1, 2002. During this transition period, monetary transactions may be
settled using either the Euro or the existing member state currencies.

         The Company has both operating divisions and customers located in
Europe. In 1998, combined revenues from these sources were approximately 14.8%
of total revenues. The Company has operations in substantially all European
Economic and Monetary Union participating countries, as well as in the United
Kingdom, which has elected not to participate in the Euro conversion at this
time. The affected operations plan to make the Euro the functional currency
sometime during the transition period, although certain of the Company's
European operations have already entered into Euro-based transactions, such as
bank borrowings and collection of accounts receivable.

         It is difficult to assess the competitive impact of the Euro conversion
on the Company's operations, both in Europe and in the United States. In markets
where sales are made in U.S. dollars, there may be pressure to denominate sales
in the Euro. However, exchange risks resulting from these transactions could be
mitigated through hedging. It is not anticipated that changes to information
technology and other systems which are necessary for the Euro conversion will be
material. The Company is currently assessing the impact the Euro conversion may
have on items such as taxation and other issues.

         The Company is in the process of implementing system software required
for the Euro currency conversion and does not anticipate the conversion to have
a significant impact on the operations, financial position or liquidity of its
European businesses.

FORWARD LOOKING STATEMENTS

         This report on Form 10-Q contains statements that constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "estimates,"
"will," "should," "plans" or "anticipates" or the negative thereof or other
variations thereon or comparable terminology, or by discussions of strategy.
Such forward-looking statements are not guarantees of future performance and
involve significant risks and uncertainties. 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 factors
include, but are not limited to, the Company's leverage, its reliance on major
customers in the automotive industry, the degree and nature of competition, the
Company's ability to recruit and place qualified personnel, risks associated
with its acquisition strategy, and employment liability risk.





                                       19

<PAGE>   22






MSX INTERNATIONAL, INC.


PART II.  OTHER INFORMATION



ITEM 1.   Legal Proceedings
          Not applicable.




ITEM 2.   Change in Securities

          On March 3, 1999, the Company issued 1,000 shares of Class A Common
          Stock to John Risk, President, Product Development Services Division,
          for an aggregate purchase price of $40,000.

          On March 23, 1999, the Company issued 1,999 shares of Class A Common
          Stock to Roger Fridholm, President, Business, Technology and Staffing
          Services Division, for an aggregate purchase price of $80,000.




ITEM 3.   Defaults Upon Senior Securities
          Not applicable.

ITEM 4.   Submission of Matters to a Vote of Security Holders
          Not applicable.


ITEM 5.   Other Information

          On May 18, 1999, the Company issued, in a private placement, $30
          million aggregate principle amount of 11-3/8% unsecured subordinated
          notes maturing January 15, 2008 (the "Series B Notes"). The Series B
          Notes were issued, net of discount, at an aggregate amount of $29.4
          million. These Series B Notes are substantially identical to, and rank
          pari passu in right of payment with, the $100 million aggregate
          principal amount of 11-3/8% unsecured subordinated notes (the "Series
          A Notes") maturing January 15, 2008, issued by the Company on January
          22, 1998. These Series B Notes and the Series A Notes will trade as
          separate securities prior to the consummation of an Exchange Offer
          relating to the Series B Notes (an "Exchange Offer"). It is
          anticipated that an Exchange Offer will be consummated pursuant to an
          effective registration statement within 210 days of the issuance of
          the notes. The net proceeds received from the issuance of the Series
          B Notes were used to repay outstanding indebtedness under the
          Company's Credit Facility.

          In early April 1999, the Company acquired Rice Cohen International, a
          permanent placement staffing company based in Yardley, Pennsylvania
          with annual sales of approximately $5 million.







                                       20

<PAGE>   23



MSX INTERNATIONAL, INC.


PART II.  OTHER INFORMATION - (CONTINUED)

ITEM 6.   Exhibits and Reports on Form 8-K

          (a)  Exhibits:

               Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges

               Exhibit 27 - Financial Data Schedule

          (b) Reports on Form 8-K


              (1)  A Current Report on Form 8-K was filed by MSX International, 
                   Inc. during the quarter ending April 4, 1999 reporting under 
                   Item 2, "Acquisition or Disposition of Assets", the 
                   acquisition of Lexstra International, Inc. and Lexus 
                   Temporaries, Inc. Included under Item 7 of such report were 
                   the following exhibits:

                   (i)   The audited financial statements of Lexstra
                         International, Inc. and Lexus Temporaries, Inc. as of
                         and for the ten-month period ended October 31, 1998.
                   (ii)  The audited financial statements of Lexstra
                         International, Inc. and Lexus Temporaries, Inc. as of
                         December 31, 1996 and 1997 and for each of the two
                         years in the period ended December 31, 1997.
                   (iii) MSX International, Inc. Pro Forma Consolidated
                         Statement of Operations for the fiscal nine-month
                         period ended September 27, 1998 (unaudited).
                   (iv)  MSX International, Inc. Pro Forma Consolidated
                         Statement of Operations for the fiscal year ended
                         December 28, 1997 (unaudited).
                   (v)   MSX International, Inc. Pro Forma Consolidated
                         Balance Sheet as of September 27, 1998 (unaudited).

              (2)  A Current Report on Form 8-K was filed by MSX International, 
                   Inc. during the quarter ending April 4, 1999 reporting under 
                   Item 5 "Other Events", the acquisition of Megatech 
                   Engineering, Inc. Included under Item 7 of such report was 
                   the following exhibit:

                   (i)  MSX International Press Release of December 23, 1998
                        announcing the acquisition of Megatech Engineering,
                        Inc.






                                       21

<PAGE>   24




MSX INTERNATIONAL, INC.


PART II.  OTHER INFORMATION - (CONTINUED)









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 19, 1999

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)










                                       22
<PAGE>   25


MSX INTERNATIONAL, INC.

                                  EXHIBIT INDEX


<TABLE>
<CAPTION>



Exhibit                                                                                 Sequential Page No.
-------                                                                                 -------------------
<S>                                                                                    <C>    
Exhibit 12  -     Computation of Ratio of Earnings to Fixed Charges                              24

Exhibit 27  -     Financial Data Schedule                                                        25
</TABLE>










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