<PAGE>   1



                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QA

(Mark One)

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

For the Quarterly Period Ended June 28, 1998

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:




                             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           No    X       
                              ----------   ----------     
Number of shares outstanding of each of the issuer's classes of common stock, as
of the latest practicable date.

                                                   Shares Outstanding at
            Class                                     August 11, 1998
---------------------------------             -------------------------------
  Common Stock, par value $.01                             95,004





<PAGE>   2





MSX INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>


                                                                                                  PAGES

<S>                                                                                                <C>
PART  I - FINANCIAL  INFORMATION


       ITEM 1 - FINANCIAL STATEMENTS


           Condensed Consolidated Balance Sheet as of June 28, 1998 and
                  December 28, 1997..................................................................2


           Condensed Consolidated Statement of Operations for the Fiscal Quarters and
                  Fiscal Six-Month Periods Ended June 28, 1998 and June 29, 1997.....................3


           Condensed Consolidated Statement of Cash Flows for the Fiscal Quarters and
                  Fiscal Six-Month Periods Ended June 28, 1998 and June 29, 1997.....................4


           Notes to Condensed Consolidated Financial Statements...................................5-17



       ITEM 2 - Management's Discussion and Analysis of Financial Condition and
                        Results of Operations....................................................18-21



PART II - Other Information and Signature........................................................22-23


EXHIBITS.........................................................................................24-25
</TABLE>



                                      1
<PAGE>   3

PART I - FINANCIAL INFORMATION
ITEM 1.  FINANCIAL STATEMENTS

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATED  BALANCE SHEET
as of June 28, 1998 and December 28, 1997

<TABLE>
<CAPTION>
                                                                                        JUNE 28,          DECEMBER 28,
                                                                                          1998                1997
                                                                                      -------------    -------------------
                                                                                            (dollars in thousands)
<S>                                                                                      <C>                   <C>     
ASSETS

Current assets:
   Cash and cash equivalents                                                             $   9,769               $ 11,575
   Receivables, net                                                                        169,090                178,938
   Inventory                                                                                 1,158                  1,239
   Prepaid expenses and other assets                                                         7,954                  5,638
   Deferred income taxes                                                                     2,001                  2,352
                                                                                         ---------              --------- 
       Total current assets                                                                189,972                199,742

Property and equipment, net of accumulated depreciation
   of $64,923 and $58,693, respectively                                                     31,628                 34,337
Goodwill, net of accumulated amortization of $1,418 and $892, respectively                  31,489                 31,934
Other assets                                                                                11,544                  8,783
Deferred income taxes                                                                       13,793                 12,380
                                                                                         ---------              --------- 
       Total assets                                                                      $ 278,426              $ 287,176
                                                                                         =========              =========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)

Current liabilities:
   Notes payable and current portion of long-term debt                                   $   7,000               $ 87,930
   Bank overdrafts                                                                          13,644                 21,908
   Accounts payable                                                                         54,124                 58,458
   Accrued payroll and benefits                                                             19,698                 16,984
   Accrued expenses                                                                         16,824                 20,907
   Deferred income taxes                                                                     2,080                    984
                                                                                         ---------              --------- 
       Total current liabilities                                                           113,370                207,171

Long-term debt                                                                             151,369                 65,000
Long-term capital lease obligations                                                            281                    316
Long-term deferred compensation liability and other                                          3,570                  5,053
                                                                                         ---------              --------- 
       Total liabilities                                                                   268,590                277,540
                                                                                         ---------              --------- 
                                                                                                                          
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, 95,004 shares                                                     1                      1
   Additional paid-in capital                                                              (22,251)               (22,251)
   Accumulated other comprehensive income/(loss)                                            (1,594)                (1,141)
   Accumulated deficit                                                                      (2,320)                (2,973)
                                                                                         ---------              --------- 
       Total shareholders' equity (deficit)                                                (26,164)               (26,364)
                                                                                         ---------              --------- 

       Total liabilities and shareholders' equity (deficit)                              $ 278,426              $ 287,176
                                                                                         =========              =========
</TABLE>


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



                                       2
<PAGE>   4


MSX  INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
for the fiscal quarters and fiscal six-month periods ended June 28, 1998 and 
June 29, 1997


<TABLE>
<CAPTION>

                                                                  FISCAL QUARTERS                  FISCAL SIX MONTHS
                                                             ---------------------------      -----------------------------
                                                                 1998          1997               1998           1997
                                                             -------------  ------------      -------------  --------------
                                                                                (dollars in thousands)

<S>                                                           <C>            <C>               <C>             <C>      
Net sales                                                       $ 255,310      $ 84,037          $ 510,366       $ 166,545
Cost of sales                                                    (235,074)      (73,104)          (471,793)       (147,360)
                                                                ---------      --------          ---------       --------- 

     Gross profit                                                  20,236        10,933             38,573          19,185

Selling, general and administrative expenses                      (13,921)       (6,878)           (26,425)        (13,836)
Michigan Single Business Tax                                         (971)         (715)            (1,743)         (1,415)
                                                                ---------      --------          ---------       --------- 

     Operating income                                               5,344         3,340             10,405           3,934
                                                                ---------      --------          ---------       --------- 

Other income (expense), net:
   Interest expense, net                                           (4,400)         (595)            (7,673)         (1,523)
   Interest expense, related parties                                    -        (2,401)            (1,040)         (4,275)
   Other income (expense), net                                          5           202                  5             422
                                                                ---------      --------          ---------       --------- 
                                                                   (4,395)       (2,794)            (8,708)         (5,376)
                                                                ---------      --------          ---------       --------- 

   Income (loss) before income taxes                                  949           546              1,697          (1,442)

Income tax provision (benefit)                                        674           111              1,044            (369)
                                                                ---------      --------          ---------       --------- 

   Net income (loss)                                            $     275      $    435          $     653       $  (1,073)
                                                                =========      ========          =========       ========= 

</TABLE>
The accompanying notes are an integral part of the condensed consolidated
financial statements.


                                       3
<PAGE>   5

MSX  INTERNATIONAL, INC.
CONDENSED CONSOLIDATED  STATEMENT OF CASH FLOWS
for the fiscal quarters and fiscal six-month periods ended June 28, 1998 and 
June 29, 1997

<TABLE>
<CAPTION>

                                                                  FISCAL QUARTERS               FISCAL SIX MONTHS
                                                             --------------------------     ---------------------------
                                                                1998          1997             1998           1997
                                                             ------------  ------------     ------------  -------------
                                                                              (dollars in thousands)
<S>                                                           <C>           <C>              <C>         <C>      
Cash from (used for) operating activities:
   Net income (loss)                                            $    275       $   435         $    653      $  (1,073)
   Adjustments to reconcile net income (loss)
     to net cash from (used for) operating activities:
     Depreciation                                                  3,194         1,786            6,681          3,159
     Amortization                                                    293           203              645            546
     Deferred  taxes                                                 (54)            -              (54)             -
     Sale of property and equipment                                  810             -              810              -
     (Increase) decrease in receivables, net                       8,846         5,971            9,848        (10,294)
     (Increase) decrease in inventory                                 17          (134)              81            644
     (Increase) decrease in prepaid expenses                      (3,194)       (2,694)          (2,316)        (1,472)
     Increase (decrease) in current liabilities                      588         6,554           (5,703)         3,046
     Other, net                                                     (497)          143             (575)         6,257
                                                                --------       -------         --------      ---------
        Net cash from (used for) operating activities             10,278        12,264           10,070            813
                                                                --------       -------         --------      ---------

Cash from (used for) investing activities:
    Capital expenditures                                          (3,035)       (5,592)          (4,798)        (8,238)
   Acquisition of business, net of cash received                       -             -                -       (132,361)
   Other, net                                                          -             -                -           (317)
                                                                --------       -------         --------      ---------
        Net cash from (used for )investing activities             (3,035)       (5,592)          (4,798)      (140,916)
                                                                --------       -------         --------      ---------

Cash from (used for) financing activities:
     Proceeds from long-term debt issues                           2,599           398           99,377         70,398
     Repayment of long-term debt                                  (5,029)            -          (75,029)             -
     Change in bank borrowings                                      (323)       (5,022)         (22,406)        40,592
     Change in cash overdraft                                    (10,103)          (13)          (8,264)        (4,037)
     Sale of Redeemable Preferred Stock                                -             -                -         36,000
     Sale of Common Stock                                              -            40                -          3,800
     Other, net                                                       21           263             (303)           (88)
                                                                --------       -------         --------      ---------
          Net cash from (used for) financing activities          (12,835)       (4,334)          (6,625)       146,665
                                                                --------       -------         --------      ---------

Effect of foreign exchange rate changes on cash                      323          (696)            (453)        (1,233)
                                                                --------       -------         --------      ---------

Cash:
    Increase (decrease) for the period                            (5,269)        1,642           (1,806)         5,329
    Balance, beginning of period                                  15,038         3,687           11,575              -
                                                                --------       -------         --------      ---------

    Balance, end of period                                      $  9,769       $ 5,329         $  9,769      $   5,329
                                                                ========       =======         ========      =========
</TABLE>

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


                                         4
<PAGE>   6
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"). Effective August 31, 1997, the
         Company acquired certain service-providing operations of Ford Motor
         Company ("Ford") through the acquisition of Geometric Results
         Incorporated ("GRI"), a wholly-owned subsidiary of Ford. The results of
         operations of GRI have been included in the results of the operations
         of the Company from September 1, 1997.

         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 utilizes a fiscal year which ends on the last Sunday in
         December.

         In the opinion of the Company, the accompanying unaudited consolidated
         condensed financial statements contain all adjustments which are normal
         and recurring in nature necessary to present fairly its financial
         position at June 28, 1998 and the results of operations and cash flows
         for the fiscal quarter and fiscal six-month periods ended June 28, 1998
         and June 29, 1997. The operating results for the fiscal quarter and
         fiscal six-month periods ended June 28, 1998 and June 29, 1997 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 Registration Statement on Form S-4 which was
         declared effective by the Securities and Exchange Commission on July
         22, 1998.

2.       RESTRUCTURING ACTIONS:

         As of December 28, 1997, accrued restructuring costs totaled $6.1
         million. Approximately $1.7 million and $2.4 million was charged to
         MSXI's accrual in the fiscal quarter and fiscal six-month period ended
         June 28, 1998, primarily for operating lease payments on unused
         facilities. Remaining accrued restructuring costs totaled $3.7 million
         as of June 28, 1998, of which $2.5 million is expected to be paid in
         1998.

3.       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 June 28, 1998, the Company had not
         declared any dividends. Accordingly, no dividends have been paid or
         accrued. Dividends accumulated but not declared aggregated
         approximately $6.8 million as of June 28, 1998.

                                      5
<PAGE>   7



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


4.       DEBT:

         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 "Notes"). Interest on
         the Notes is payable semiannually at 11 3/8% per annum commencing on
         July 15, 1998. The Notes may be redeemed subsequent to January 15, 2003
         at premiums which begin at 105.6875 percent 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
         percent of the original aggregate principal amount of the Notes with
         the proceeds of one or more public equity offerings at a redemption
         price of 111.375 percent plus accrued and unpaid interest, if any.
         Also, upon the occurrence of a change of control, as defined in the
         indenture (the "Indenture"), the 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 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 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.

         Concurrently with the private placement, the Company entered into a new
         credit facility with NBD Bank (the "New Credit Facility"), with a
         borrowing base of up to $100 million, as defined, to replace a prior
         NBD Credit Facility (the "Old Credit Facility"). Interest on the loans
         under the New Credit Facility is payable quarterly or, if earlier, at
         the end of each interest period and accrues at an annual rate equal to,
         at the option of the Company: (a) a floating rate, as defined or (b)
         the London Interbank Offered Rate plus an applicable margin, as
         defined.

         Each significant domestic subsidiary of the Company guarantees all
         obligations of the Company under the New Credit Facility. In addition,
         these obligations are secured by a pledge of the stock of such domestic
         subsidiaries and a first lien on substantially all assets of such
         domestic subsidiaries and a pledge of 65 percent of the stock of the
         significant foreign subsidiaries. The obligations of the Company under
         the New Credit Facility rank senior to all other indebtedness of the
         Company, including the Notes.


                                      6
<PAGE>   8



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


4.       DEBT: - (CONTINUED)

         The New Credit Facility contains certain reporting covenants and other
         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 New
         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.

         On April 14, 1998, the Company syndicated the New Credit Facility to
         three additional commercial lenders and amended the New Credit Facility
         to add a $30 million term loan portion. 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 New Credit Facility. As of June 28, 1998, $51.4 million was
         outstanding under the New Credit Facility.


5.       BANK OVERDRAFTS:

         Bank overdrafts represent outstanding 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.


6.       COMMITMENTS AND CONTINGENCIES:

         On December 27, 1997, Cambridge Industries, Inc. filed a complaint
         against the Company in Michigan State Court. The complaint alleges that
         the Company, by retaining approximately $1.1 million of funds paid into
         a lock-box account maintained by the Company, has converted such funds.
         Cambridge Industries is seeking whatever relief the court deems just,
         including treble damages. The Company believes it has meritorious
         defenses and counterclaims to this action and intends to defend itself
         vigorously against all of the allegations contained in the complaint.
         The Company does not believe that the ultimate outcome of this
         litigation will have a material effect on its consolidated financial
         condition, results of operations or cash flows.


                                      7
<PAGE>   9

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


7.       INCOME TAXES:

         For the fiscal six-month period ended June 28, 1998 and June 29, 1997,
         the effective income tax rate was 61.5% and (25.6%), respectively. The
         change in the effective income tax rate was due to operations of the
         acquired GRI business and a change in the projected mix of foreign
         earnings which were offset in part by losses from other foreign
         businesses and a related valuation allowance. The effect of the change
         in the projected mix of foreign earnings was $187,000 on the 1998
         year-to-date expense.


8.       ADOPTION OF STATEMENT OF FINANCIAL ACCOUNTING STANDARDS NO. 130
         "REPORTING COMPREHENSIVE INCOME":

         Effective December 29, 1997, the Company adopted Statement of Financial
         Accounting Standards (FASB) No. 130, "Reporting Comprehensive Income."
         This statement requires that all items recognized under accounting
         standards as components of comprehensive earnings be reported in an
         annual financial statement that is displayed with the same prominence
         as other annual financial statements. This Statement also requires that
         an entity classify items of other comprehensive earnings by their
         nature in an annual financial statement. Annual financial statements
         for prior periods will be reclassified, as required. The Company's
         total comprehensive earnings were as follows:


<TABLE>
<CAPTION>
                                                                  FISCAL QUARTER                 FISCAL SIX MONTHS
                                                            ---------------------------      --------------------------
                                                              JUNE 28,       JUNE 29,          JUNE 28,      JUNE 29,
                                                                1998           1997              1998          1997
                                                            ------------   ------------      ------------  ------------


<S>                                                             <C>            <C>               <C>        <C>      
          Net income/(loss)                                       $ 275         $  435             $ 653      $ (1,073)
          Other comprehensive income/(loss)                         323           (696)             (453)       (1,233)
                                                                  -----         ------             -----        ------ 

          Total comprehensive income/(loss)                       $ 598         $ (261)            $ 200      $ (2,306)
                                                                  =====         ======             =====      ======== 
</TABLE>




         Other comprehensive income (loss) is comprised of the change in the
         accumulated foreign currency translation adjustment.




                                       8
<PAGE>   10

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


9.       GUARANTOR AND NON-GUARANTOR SUBSIDIARIES:

         In connection with the Note Offering, the Guarantor Subsidiaries
         irrevocably and unconditionally guarantee the Company's performance
         under the Notes as primary obligors. The Guarantor Subsidiaries are
         direct or indirect wholly-owned subsidiaries of the Company. The
         remaining subsidiaries are direct or indirect subsidiaries of the
         Guarantor Subsidiaries.

         The following condensed consolidated financial data provides
         information regarding the financial position, results of operations and
         cash flows of the Guarantor Subsidiaries ("Condensed Consolidated
         Financial Data"). Separate financial statements of the Guarantor
         Subsidiaries are not presented because management has determined those
         would not be material to the holders of the notes.

         For purposes of the condensed consolidated financial data, the
         Guarantor Subsidiaries include substantially all domestic subsidiaries
         of the Company. 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>   11

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

9.   GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
as of June 28, 1998


<TABLE>
<CAPTION>
                                                               GUARANTOR     NON-GUARANTOR                       MSXI
                                                              SUBSIDIARIES   SUBSIDIARIES     ELIMINATIONS   CONSOLIDATED
                                                              ------------   --------------   ------------   --------------
<S>                                                            <C>             <C>            <C>             <C>    
ASSETS
Current assets:
   Cash and cash equivalents                                    $   1,111        $  8,658      $       -        $   9,769
   Receivables, net                                               118,277          50,813              -          169,090
   Inventory                                                        1,122              36              -            1,158
   Prepaid expenses and other assets                                3,516           4,438              -            7,954
   Deferred income taxes                                              863           1,138              -            2,001
                                                                ---------        --------      ---------        --------- 
      Total current assets                                        124,889          65,083              -          189,972

Property and equipment, net                                        21,180          10,448              -           31,628
Goodwill, net                                                      31,489               -              -           31,489
Other assets                                                       38,787           4,028        (31,271)          11,544
Deferred income taxes                                              12,234           1,559             -            13,793
                                                                ---------        --------      ---------        --------- 

      Total assets                                              $ 228,579        $ 81,118      $ (31,271)       $ 278,426
                                                                =========        ========      =========        =========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Notes payable and current portion of long-term debt          $       -        $  7,000      $       -        $   7,000
   Bank overdrafts                                                 13,644               -              -           13,644
   Accounts payable                                                43,507          10,617              -           54,124
   Accrued liabilities                                             29,964           6,590            (32)          36,522
   Deferred income taxes                                              853           1,227             -             2,080
                                                                ---------        --------      ---------        --------- 
        Total current liabilities                                  87,968          25,434            (32)         113,370

Long-term debt                                                    144,602           6,767              -          151,369
Intercompany accounts                                             (30,680)         30,680              -                -
Long-term capital lease obligations                                   281               -              -              281
Long-term deferred compensation liability and other                 3,570               -              -            3,570
                                                                ---------        --------      ---------        --------- 
        Total liabilities                                         205,741          62,881            (32)         268,590
                                                                ---------        --------      ---------        --------- 

Redeemable Series A preferred stock                                36,000              33            (33)          36,000
                                                                ---------        --------      ---------        --------- 
Shareholders' equity (deficit):
   Common stock                                                         1           2,950         (2,950)               1
   Additional paid-in capital                                      (9,442)         28,851        (41,660)         (22,251)
   Accumulated other comprehensive income/(loss)                   (1,393)         (4,025)         3,824           (1,594)
   Retained earnings (deficit)                                     (2,328)         (9,572)         9,580           (2,320)
                                                                ---------        --------      ---------        --------- 
       Total shareholders' equity (deficit)                       (13,162)         18,204        (31,206)         (26,164)
                                                                ---------        --------      ---------        --------- 

       Total liabilities and shareholders' equity (deficit)     $ 228,579        $ 81,118      $ (31,271)       $ 278,426
                                                                =========        ========      =========        =========

</TABLE>


                                       10
<PAGE>   12

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

9.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING BALANCE SHEET
as of December 28, 1997

<TABLE>
<CAPTION>
                                                               GUARANTOR    NON-GUARANTOR                       MSXI
                                                              SUBSIDIARIES  SUBSIDIARIES     ELIMINATIONS   CONSOLIDATED
                                                              ------------  --------------   ------------   --------------
<S>                                                             <C>             <C>           <C>              <C>     
ASSETS
Current assets:
   Cash and cash equivalents                                    $   2,449        $  9,126      $       -        $  11,575
   Receivables, net                                               130,404          48,534              -          178,938
   Inventory                                                        1,204              35              -            1,239
   Prepaid expenses and other assets                                2,106           3,532              -            5,638
   Deferred income taxes                                              863           1,489              -            2,352
                                                                ---------        --------      ---------        ---------
      Total current assets                                        137,026          62,716              -          199,742

Property and equipment, net                                        23,208          11,129              -           34,337
Goodwill, net                                                      31,934               -              -           31,934
Other assets                                                       28,877             489        (20,583)           8,783
Deferred income taxes                                              11,036           1,344              -           12,380
                                                                ---------        --------      ---------        ---------
      Total assets                                              $ 232,081        $ 75,678      $ (20,583)       $ 287,176
                                                                =========        ========      =========        =========

LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
   Notes payable and current portion of long-term debt          $  71,280        $ 16,650      $       -        $  87,930
   Bank overdrafts                                                 21,908               -              -           21,908
   Accounts payable                                                51,818           6,640              -           58,458
   Accrued liabilities                                             31,752           6,171            (32)          37,891
   Deferred income taxes                                               -              984              -              984
                                                                ---------        --------      ---------        ---------
        Total current liabilities                                 176,758          30,445            (32)         207,171

Long-term debt                                                     65,000               -              -           65,000
Intercompany accounts                                             (31,389)         31,389              -                -
Long-term capital lease obligations                                   316               -              -              316
Long-term deferred compensation liability and other                 4,654             399              -            5,053
                                                                ---------        --------      ---------        ---------
        Total liabilities                                         215,339          62,233            (32)         277,540
                                                                ---------        --------      ---------        ---------

Redeemable Series A preferred stock                                36,000              32            (32)          36,000
                                                                ---------        --------      ---------        ---------

Shareholders' equity (deficit):
   Common stock                                                         1           2,702         (2,702)               1
   Additional paid-in capital                                     (16,263)         19,154        (25,142)         (22,251)
   Accumulated other comprehensive income/(loss)                      (23)         (3,598)         2,480           (1,141)
   Retained earnings (deficit)                                     (2,973)         (4,845)         4,845           (2,973)
                                                                ---------        --------      ---------        ---------
       Total shareholders' equity (deficit)                       (19,258)         13,413        (20,519)         (26,364)
                                                                ---------        --------      ---------        ---------

       Total liabilities and shareholders' equity (deficit)     $ 232,081        $ 75,678      $ (20,583)       $ 287,176
                                                                =========        ========      =========        =========

</TABLE>


                                       11
<PAGE>   13

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

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

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS 
for the fiscal quarters ended June 28, 1998 and June 29, 1997

<TABLE>
<CAPTION>

                                                                                    1998
                                                          -----------------------------------------------------------
                                                           GUARANTOR    NON-GUARANTOR                      MSXI
                                                          SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS  CONSOLIDATED
                                                          ------------  ---------------  ------------  --------------

<S>                                                         <C>               <C>           <C>            <C>      
Net sales                                                   $ 217,574         $ 37,736      $      -       $ 255,310
Cost of sales                                                (203,052)         (32,022)            -        (235,074)
                                                            ---------         --------      --------       --------- 

       Gross profit                                            14,522            5,714             -          20,236

Selling, general and administrative expenses                   (9,360)          (4,561)            -         (13,921)
Michigan Single Business Tax                                     (971)               -             -            (971)
                                                            ---------         --------      --------       --------- 

       Operating income                                         4,191            1,153             -           5,344

Other expense, net                                             (3,574)            (821)            -          (4,395)
Equity in subsidiary earnings                                     (97)               -            97               -
                                                            ---------         --------      --------       --------- 
       Income before income taxes                                 520              332            97             949

Income tax provision (benefit)                                    245              429             -             674
                                                            ---------         --------      --------       --------- 
       Net income                                           $     275         $    (97)     $     97       $     275
                                                            =========         ========      ========       =========

                                                                                    1997
                                                          -----------------------------------------------------------

Net sales                                                   $  63,372         $ 20,665      $      -       $  84,037
Cost of sales                                                 (55,496)         (17,608)            -         (73,104)
                                                            ---------         --------      --------       --------- 

       Gross profit                                             7,876            3,057             -          10,933

Selling, general and administrative expenses                   (4,657)          (2,221)            -          (6,878)
Michigan Single Business Tax                                     (715)               -             -            (715)
                                                            ---------         --------      --------       --------- 

       Operating income (loss)                                  2,504              836             -           3,340

Other expense, net                                             (1,631)          (1,163)            -          (2,794)
Equity in subsidiary earnings (loss)                             (131)               -           131               -
                                                            ---------         --------      --------       --------- 
       Income before income taxes                                 742             (327)          131             546

Income tax provision (benefit)                                    307             (196)            -             111
                                                            ---------         --------      --------       --------- 

       Net income (loss)                                    $     435         $   (131)     $    131       $     435
                                                            =========         ========      ========       =========
</TABLE>



                                      12

<PAGE>   14

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

9.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED CONSOLIDATING  STATEMENT OF OPERATIONS
for the fiscal six-month periods ended June 28, 1998 and June 29, 1997



<TABLE>
<CAPTION>
                                                                                     1998
                                                          -----------------------------------------------------------
                                                           GUARANTOR    NON-GUARANTOR                      MSXI
                                                          SUBSIDIARIES   SUBSIDIARIES    ELIMINATIONS  CONSOLIDATED
                                                          ------------  ---------------  ------------  --------------

<S>                                                       <C>               <C>            <C>           <C>  
Net sales                                                   $ 435,540         $ 74,826       $     -       $ 510,366
Cost of sales                                                (408,352)         (63,441)            -        (471,793)
                                                            ---------         --------       -------       --------- 

       Gross profit                                            27,188           11,385             -          38,573

Selling, general and administrative expenses                  (17,998)          (8,427)            -         (26,425)
Michigan Single Business Tax                                   (1,743)               -             -          (1,743)
                                                            ---------         --------       -------       --------- 

       Operating income                                         7,447            2,958             -          10,405

Other expense, net                                             (6,954)          (1,754)            -          (8,708)
Equity in subsidiary earnings                                     353                -          (353)              -
                                                            ---------         --------       -------       --------- 
       Income before income taxes                                 846            1,204          (353)          1,697

Income tax provision (benefit)                                    193              851             -           1,044
                                                            ---------         --------       -------       --------- 
       Net income                                           $     653         $    353       $  (353)          $ 653
                                                            =========         ========       =======       =========

                                                                                       1997
                                                          -----------------------------------------------------------

Net sales                                                   $ 125,754         $ 40,791       $     -       $ 166,545
Cost of sales                                                (110,385)         (36,975)            -        (147,360)
                                                            ---------         --------       -------       --------- 

       Gross profit                                            15,369            3,816             -          19,185

Selling, general and administrative expenses                   (9,285)          (4,551)            -         (13,836)
Michigan Single Business Tax                                   (1,415)               -             -          (1,415)
                                                            ---------         --------       -------       --------- 

       Operating income (loss)                                  4,669             (735)            -           3,934

Other expense, net                                             (3,510)          (1,866)            -          (5,376)
Equity in subsidiary earnings (loss)                           (1,805)               -         1,805               -
                                                            ---------         --------       -------       --------- 
       Income before income taxes                                (646)          (2,601)        1,805          (1,442)

Income tax provision (benefit)                                    427             (796)            -            (369)
                                                            ---------         --------       -------       --------- 

       Net income (loss)                                    $   1,073         $ (1,805)      $ 1,805       $   1,073
                                                            =========         ========       =======       =========
</TABLE>




                                      13
<PAGE>   15

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

9.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES -(CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED COMBINING STATEMENT OF CASH FLOWS
for the fiscal quarters ended June 28, 1998

<TABLE>
<CAPTION>


                                                            GUARANTOR     NON-GUARANTOR                         MSXI
                                                           SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS    CONSOLIDATED
                                                           ------------   ---------------   -------------   -------------
<S>                                                         <C>               <C>               <C>           <C>  
Cash from (used for) operating activities:
   Net income (loss)                                          $    372          $    (97)        $     -        $    275
   Equity in earnings of subsidiaries                              (97)                -              97               -
   Adjustments to reconcile net income (loss) to net cash 
       from (used for) operating activities:
     Depreciation                                                1,833             1,361               -           3,194
     Amortization                                                  293                 -               -             293
     Deferred taxes                                               (344)              290               -             (54)
     Sale of property and equipment                                426               384               -             810
     (Increase) decrease in receivables                          3,078             5,768               -           8,846
     (Increase) decrease in inventory                               17                 -               -              17
     (Increase) decrease in prepaid expenses and
         other assets                                             (199)           (2,995)              -          (3,194)
     Increase (decrease) in current liabilities                  3,672            (3,084)              -             588
     Other, net                                                   (894)              305              92            (497)
                                                              --------          --------         -------        --------
     Net cash from (used for) operating activities               8,157             1,932             189          10,278
                                                              --------          --------         -------        --------

Cash from (used for) investing activities:
   Capital expenditures                                         (1,518)           (1,517)              -          (3,035)
   Acquisition of business, net                                      -                 -               -               -
   Investment in foreign activities                                  -                 -               -               -
   Other, net                                                        -                 -               -               -
                                                              --------          --------         -------        --------
     Net cash from (used for) investing activities              (1,518)           (1,517)              -          (3,035)
                                                              --------          --------         -------        --------

Cash from (used for) financing activities:
     Intercompany                                                2,272            (2,272)              -               -
     Investment in subsidiaries                                    812             4,539          (5,351)              -
     Equity in subsidiaries                                        (64)           (3,697)          3,761               -
     Proceeds from long-term debt issues                         2,599                 -               -           2,599
     Payment of long-term debt                                       -            (5,029)              -          (5,029)
     Change in bank borrowings                                       -              (323)              -            (323)
     Change in cash overdraft                                  (10,103)                -               -         (10,103)
     Sale of redeemable preferred stock                              -                 -               -               -
     Sale of common stock                                            -                 -               -               -
     Other, net                                                     21                 -               -              21
                                                              --------          --------         -------        --------
       Net cash from (used for) financing activities            (4,463)           (6,782)         (1,590)        (12,835)
                                                              --------          --------         -------        --------
Effect of foreign exchange rate changes on cash                 (1,341)              263           1,401             323
                                                              --------          --------         -------        --------
Cash:
    Increase for the period                                        835            (6,104)              -          (5,269)
    Balance, beginning of period                                   276            14,762               -          15,038
                                                              --------          --------         -------        --------
    Balance, end of period                                    $  1,111          $  8,658         $     -        $  9,769
                                                              ========          ========         =======        ========
</TABLE>

                                      14
<PAGE>   16

MSX INTERNATIONAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
(DOLLARS IN THOUSANDS UNLESS OTHERWISE NOTED)

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

MSX INTERNATIONAL, INC.
CONDENSED COMBINING STATEMENT OF CASH FLOWS
for the fiscal quarters ended June 29, 1997

<TABLE>
<CAPTION>


                                                        GUARANTOR      NON-GUARANTOR                      MSXI
                                                        SUBSIDIARIES   SUBSIDIARIES     ELIMINATIONS   CONSOLIDATED
                                                        -----------    -------------    -----------    ------------
<S>                                                      <C>              <C>              <C>           <C>  
Cash from (used for) operating activities:
   Net income (loss)                                       $   566          $  (131)         $   -         $   435
   Equity in earnings of subsidiaries                         (131)               -            131               -
   Adjustments to reconcile net income (loss) to net cash 
       from (used for) operating activities:
     Depreciation                                              973              813              -           1,786
     Amortization                                              203                -              -             203
     Deferred taxes                                              -                -              -               -
     (Increase) decrease in receivables                      2,917            3,054              -           5,971
     (Increase) decrease in inventory                          (98)             (36)             -            (134)
     (Increase) decrease in prepaid expenses
          and other assets                                  (3,077)             383              -          (2,694)
     Increase (decrease) in current liabilities              6,715             (161)             -           6,554
     Other, net                                             (1,028)           1,078             93             143
                                                           -------          -------           ----         -------
     Net cash from (used for) operating activities           7,040            5,000            224          12,264
                                                           -------          -------          -----         -------

Cash from (used for) investing activities:
   Capital expenditures                                     (3,995)          (1,597)             -          (5,592)
   Acquisition of business, net                                  -                -              -               -
   Investment in foreign subsidiaries                            -                -              -               -
   Other, net                                                    -                -              -               -
                                                                 -                -              -               -
                                                           -------          -------          -----         -------
     Net cash from (used for) investing activities          (3,995)          (1,597)             -          (5,592)
                                                           -------          -------          -----         -------

Cash from (used for) financing activities:
     Intercompany                                             (931)             931              -               -
     Investment in subsidiaries                                 20               54            (74)              -
     Equity in subsidiaries                                    132                -           (132)              -
     Proceeds from long-term debt issues                       408              (10)             -             398
     Change in bank borrowings                              (1,928)          (3,094)             -          (5,022)
     Change in cash overdraft                                  (13)               -              -             (13)
     Sale of redeemable preferred stock                          -                -              -               -
     Sale of common stock                                       40                -              -              40
     Other, net                                                263                -              -             263
                                                           -------          -------          -----         -------
       Net cash from (used for) financing activities        (2,009)          (2,119)          (206)         (4,334)
                                                           -------          -------          -----         -------

Effect of foreign exchange rate changes on cash                  -             (678)           (18)           (696)
                                                           -------          -------          -----         -------

Cash:
    Increase for the period                                  1,036              606              -           1,642
    Balance, beginning of period                               378            3,309              -           3,687
                                                           -------          -------          -----         -------

    Balance, end of period                                 $ 1,414          $ 3,915          $   -         $ 5,329
                                                           =======          =======          =====         =======
</TABLE>



                                      15
<PAGE>   17

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

9.     GUARANTOR AND NON-GUARANTOR SUBSIDIARIES - (CONTINUED)

MSX INTERNATIONAL, INC.
CONDENSED COMBINING STATEMENT OF CASH FLOWS
for the fiscal six-month period ended June 28, 1998

<TABLE>
<CAPTION>


                                                            GUARANTOR     NON-GUARANTOR                         MSXI
                                                           SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS    CONSOLIDATED
                                                           ------------   ---------------   -------------   -------------
<S>                                                          <C>                 <C>            <C>           <C>  
Cash from (used for) operating activities:
   Net income (loss)                                          $    300             $ 353         $     -        $    653
   Equity in earnings of subsidiaries                              353                 -            (353)              -
   Adjustments to reconcile net income (loss) to net cash 
       from (used for) operating activities:
     Depreciation                                                3,991             2,690               -           6,681
     Amortization                                                  645                 -               -             645
     Deferred taxes                                               (344)              290               -             (54)
     Sale of property and equipment                                426               384               -             810
     (Increase) decrease in receivables                         12,129            (2,281)              -           9,848
     (Increase) decrease in inventory                               81                 -               -              81
     (Increase) decrease in prepaid expenses and
         other assets                                           (1,497)             (819)              -          (2,316)
     Increase (decrease) in current liabilities                (10,099)            4,396               -          (5,703)
     Other, net                                                   (608)              (10)             43            (575)
                                                              --------           -------         -------        --------
     Net cash from (used for) operating activities               5,377             5,003            (310)         10,070
                                                              --------           -------         -------        --------

Cash from (used for) investing activities:
   Capital expenditures                                         (2,413)           (2,385)              -          (4,798)
   Acquisition of business, net                                      -                 -               -               -
   Investment in foreign activities                                  -                 -               -               -
   Other, net                                                        -                 -               -               -
                                                                     -                 -               -               -
                                                              --------           -------         -------        --------
     Net cash from (used for) investing activities              (2,413)           (2,385)              -          (4,798)
                                                              --------           -------         -------        --------

Cash from (used for) financing activities:
     Intercompany                                                  708              (708)              -               -
     Investment in subsidiaries                                    602             4,640          (5,242)              -
     Equity in subsidiaries                                       (514)           (3,697)          4,211               -
     Proceeds from long-term debt issues                        99,377                 -               -          99,377
     Payment of long-term debt                                 (70,000)           (5,029)              -         (75,029)
     Change in bank borrowings                                 (24,552)            2,146               -         (22,406)
     Change in cash overdraft                                   (8,264)                -               -          (8,264)
     Sale of redeemable preferred stock                              -                 -               -               -
     Sale of common stock                                            -                 -               -               -
     Other, net                                                   (300)               (3)              -            (303)
                                                              --------           -------         -------        --------
       Net cash from (used for) financing activities            (2,943)           (2,651)         (1,031)         (6,625)
                                                              --------           -------         -------        --------
Effect of foreign exchange rate changes on cash                 (1,359)             (435)          1,341            (453)
                                                              --------           -------         -------        --------
Cash:
    Increase for the period                                     (1,338)             (468)              -          (1,806)
    Balance, beginning of period                                 2,449             9,126               -          11,575
                                                              --------           -------         -------        --------
    Balance, end of period                                    $  1,111           $ 8,658         $     -        $  9,769
                                                              ========           =======         =======        ========
</TABLE>



                                      16
<PAGE>   18

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

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

MSX INTERNATIONAL, INC.
CONDENSED COMBINING STATEMENT OF CASH FLOWS
for the fiscal six-month period ended June 29, 1997

<TABLE>
<CAPTION>



                                                            GUARANTOR     NON-GUARANTOR                         MSXI
                                                           SUBSIDIARIES    SUBSIDIARIES     ELIMINATIONS    CONSOLIDATED
                                                           ------------   ---------------   -------------   -------------
<S>                                                         <C>               <C>              <C>           <C>      
Cash from (used for) operating activities:
   Net income (loss)                                         $     732          $ (1,805)        $     -       $  (1,073)
   Equity in earnings of subsidiaries                           (1,805)                -           1,805               -
   Adjustments to reconcile net income (loss) to net cash 
       from (used for) operating activities:
     Depreciation                                                1,705             1,454               -           3,159
     Amortization                                                  546                 -               -             546
     Deferred taxes                                                  -                 -               -               -
     (Increase) decrease in receivables                        (10,276)              (18)              -         (10,294)
     (Increase) decrease in inventory                              644                 -               -             644
     (Increase) decrease in prepaid expenses
          and other assets                                      (2,441)              969               -          (1,472)
     Increase (decrease) in current liabilities                  2,910               169             (33)          3,046
     Other, net                                                  5,937               319               1           6,257
                                                             ---------          --------         -------       ---------
     Net cash from (used for) operating activities              (2,048)            1,088           1,773             813
                                                             ---------          --------         -------       ---------

Cash from (used for) investing activities:
   Capital expenditures                                         (6,438)           (1,800)              -          (8,238)
   Acquisition of business, net                               (106,691)          (19,666)         (6,004)       (132,361)
   Investment in foreign subsidiaries                          (13,043)                -          13,043               -
   Other, net                                                     (317)                -              -             (317)
                                                             ---------          --------         -------       ---------
     Net cash from (used for) investing activities            (126,489)          (21,466)          7,039        (140,916)
                                                             ---------          --------         -------       ---------

Cash from (used for) financing activities:
     Intercompany                                              (22,182)           22,182               -               -
     Investment in subsidiaries                                     20             7,059          (7,079)              -
     Equity in subsidiaries                                      1,806                 -          (1,806)              -
     Proceeds from long-term debt issues                        70,408               (10)              -          70,398
     Change in bank borrowings                                  43,967            (3,375)              -          40,592
     Change in cash overdraft                                   (4,037)                -               -          (4,037)
     Sale of redeemable preferred stock                         36,000                 -               -          36,000
     Sale of common stock                                        3,800                 -               -           3,800
     Other, net                                                    169              (348)             91             (88)
                                                             ---------          --------         -------       ---------
       Net cash from (used for) financing activities           129,951            25,508          (8,794)        146,665
                                                             ---------          --------         -------       ---------

Effect of foreign exchange rate changes on cash                      -            (1,215)            (18)         (1,233)
                                                             ---------          --------         -------       ---------

Cash:
    Increase for the period                                      1,414             3,915               -           5,329
    Balance, beginning of period                                     -                 -               -               -
                                                             ---------          --------         -------       ---------

    Balance, end of period                                   $   1,414          $  3,915         $     -       $   5,329
                                                             =========          ========         =======       =========
</TABLE>


                                      17

<PAGE>   19





MSX INTERNATIONAL, INC.

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

RESULTS OF OPERATIONS

MSXI's net sales for the quarter ended June 28, 1998 increased $171.3 million
(203.8%) from $84.0 million to $255.3 million, as compared to the fiscal quarter
ended June 29, 1997. For the fiscal six months ended June 28, 1998, net sales
increased $343.8 million (206.4%) from $166.5 million to $510.4 million, as
compared to the fiscal six months ended June 29, 1997. These increases resulted
principally from the GRI acquisition. In addition, net sales for the quarter and
fiscal year to date 1998 increased approximately 10% from the comparable prior
periods throughout the balance of the business.

Operating income for the fiscal quarter ended June 28, 1998 increased $2.0
million (60%) from $3.3 million to $5.3 million, as compared to the fiscal
quarter ended June 29, 1997. As a percent of net sales operating income
decreased from 4.0% for the fiscal quarter ended June 29, 1997 to 2.1% for the
fiscal quarter ended June 28, 1998. For the fiscal six months ended June 28,
1998 operating income increased $6.5 million (164.5%) from $3.9 million to $10.4
million as compared to the fiscal six months ended June 29, 1997. As a percent
of net sales operating income decreased from 2.4% for the fiscal six months
ended June 29, 1997 to 2.0% for the fiscal six months ended June 28, 1998. The
changes in operating income and operating income as a percent of net sales for
the 1998 periods as compared to the 1997 periods are primarily due to the
inclusion of the GRI businesses, which operate at a lower gross profit margin on
a higher volume of net sales.

Net income for the fiscal quarter ended June 28, 1998 was $.3 million (.1% of
net sales) as compared to $.4 million (.5% of net sales) for the fiscal quarter
ended June 29, 1997. For the fiscal six months ended June 28, 1998 net income
was $.7 million (.1% of net sales) as compared to a net loss of $(1.1) million
(.6% of net sales) for the comparable prior period. For the fiscal quarter ended
June 28, 1998, income before taxes improved to $.9 million from $.5 million in
the prior year. However, net income was lower as a result of a change in
effective tax rates due to the projected mix of foreign earnings and
deductibility of foreign interest.

LIQUIDITY AND CAPITAL RESOURCES

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


                                       18

<PAGE>   20


MSX INTERNATIONAL, INC.

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


LIQUIDITY AND CAPITAL RESOURCES - (CONTINUED)

During the fiscal quarter ended June 28, 1998 net cash provided from operating
activities was $10.3 million which resulted primarily from improved accounts
receivable collections.

The Company's total indebtedness as of June 28, 1998 consists of Notes,
borrowings under the New Credit Facility, and borrowings under the Ford
Facility. On April 14, 1998, the Company amended and restated the New 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 bank balances under the revolving loan portion of the New
Credit Facility. The amount is classified as long-term debt as the Company has
both the ability and intent to refinance such amount under the New Credit
Facility.

OTHER MATTERS

The Company provides staffing procurement services to Ford pursuant to the Ford
Master Vendor Agreement. In exchange for such services, Ford pays certain
agreed-upon compensation to the Company. In the United States, this compensation
includes payment for personnel supplied to Ford, together with certain
agreed-upon fees. The fees were scheduled to be reduced by 20% on July 1, 1998
from fees in effect since September 1, 1997. On May 4, 1998, an advisory board
comprised of executives from both the Company and Ford agreed to suspend
implementation of this fee reduction.

During the fiscal quarter ended June 28, 1998, one of the Company's three
largest customers, General Motors ("GM"), experienced a labor dispute which
resulted in a significant disruption to GM's North American automotive
production ("GM Strike"). GM accounted for approximately 7% of the Company's
total net sales during the fiscal quarter, reflecting a slight increase in net
sales over the prior quarter. The GM Strike, which ended July 28, 1998, did not
significantly impact operating results in the fiscal quarter. Although the media
has reported on possible cost reduction programs at General Motors resulting
from the GM Strike, the Company is not aware of any specific actions that would
have a material affect on its financial condition, results of operations, or its
cash flow in subsequent quarters.




                                       19
<PAGE>   21





MSX INTERNATIONAL, INC.

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


SUBSEQUENT EVENTS

On July 22, 1998, the Company initiated an offer to exchange 11-3/8% Senior
Subordinated Notes which have been registered under the Securities Act of 1933
for any and all outstanding Notes. The exchange offer will expire at 5:00 P.M.
(EDT) on August 20, 1998 unless extended. Prior to beginning the exchange offer,
the Company filed a Registration Statement on Form S-4 with the Securities and
Exchange Commission.

On August 4, 1998, the Company acquired Gold Arrow Contract Services, Ltd.
("Gold Arrow"), a U.K. technical and information technology staffing services
company with sales of approximately $20 million. Initial funding for the
transaction was provided by borrowings under the New Credit Facility.

INFLATION

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



  
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<PAGE>   22











MSX INTERNATIONAL, INC.

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


FORWARD LOOKING STATEMENTS

This report on Form 10-Q contains statements which 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. They are hereby incorporated by reference from
the risk factors and other factors included in the Company's Registration
Statement on Form S-4.








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<PAGE>   23














MSX INTERNATIONAL, INC.


PART II.        OTHER INFORMATION


ITEM 1.         On December 27, 1997, Cambridge Industries, Inc. filed a
                complaint against the Company in Michigan State Court. The
                complaint alleges that the Company, by retaining approximately
                $1.1 million of funds paid into a lock-box account maintained by
                the Company, has converted such funds. Cambridge Industries is
                seeking whatever relief the court deems just, including treble
                damages. The Company believes it has meritorious defenses and
                counterclaims to this action and intends to defend itself
                vigorously against all of the allegations contained in the
                complaint. The Company does not believe that the ultimate
                outcome of this litigation will have a material effect on its
                consolidated financial condition, results of operations or cash
                flows.

ITEM 2.         Not applicable.

ITEM 3.         Not applicable.

ITEM 4.         Not applicable.

ITEM 5.         Not applicable.

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

                (a) Exhibits:
                    Exhibit 12 - Computation of Ratio of Earnings to Fixed 
                                 Changes
                    Exhibit 27 - Financial Data Schedule

                (b) Reports on Form 8-K:
                    None







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<PAGE>   24


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.


MSX INTERNATIONAL, INC.
(Registrant)



Date:    August 13, 1998



By: /s/ Frederick K. Minturn
        --------------------

Frederick K. Minturn
Executive Vice President and
Chief Financial Officer

(Chief accounting officer
and authorized signatory)









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<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                              25

Exhibit 27 - Financial Data Schedule                                                        
</TABLE>


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