<PAGE>   1
                                  UNITED STATES
                       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 September 28, 1997

                                       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: 21027

                           SOURCE SERVICES CORPORATION
             (Exact name of registrant as specified in its charter)

         DELAWARE                                               36-2690960
(State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                          Identification No.)

5580 LBJ FREEWAY
SUITE 300
DALLAS, TEXAS                                                     75240
(Address of principal executive offices)                        (zip-code)

       Registrant's telephone number, including area code: (972) 385-3002

                       -----------------------------------

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) had been subject to such filing
requirements in the past 90 days. YES X NO 
                                     ---  ----

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of September 28, 1997

                13,739,043 shares of $.02 par value Common Stock

<PAGE>   2

PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                           SOURCE SERVICES CORPORATION
                                  BALANCE SHEET
                             (AMOUNTS IN THOUSANDS)


<TABLE>
<CAPTION>

                                                              ASSETS

                                                                                                    SEPTEMBER 28,  DECEMBER 29,
                                                                                                        1997           1996
                                                                                                     ------------  ------------
                                                                                                      (UNAUDITED)
<S>                                                                                                   <C>            <C>    
Current assets:
     Cash and cash equivalents .................................................................      $ 21,247       $18,849
     Accounts receivable, less allowance for doubtful accounts
          and fee adjustments of $3,830 and $2,590 respectively ................................        47,192        37,018
     Deferred tax asset, net  ..................................................................         2,152         1,611
     Prepaid expenses and other ................................................................           422           268
                                                                                                      --------       -------
               Total current assets  ...........................................................        71,013        57,746
Property and equipment, net  ...................................................................         7,757         6,807
                                                                                                      --------       -------
               Total assets  ...................................................................      $ 78,770       $64,553
                                                                                                      ========       =======

                                               LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable and accrued expenses .....................................................      $  4,033       $ 3,796
     Accrued commissions and payroll ...........................................................        17,660        11,684
     Accrued 401 (k) plan contribution .........................................................           644           430
     Income taxes payable  .....................................................................           269           499
                                                                                                      --------       -------
               Total current liabilities  ......................................................        22,606        16,409
Other liabilities ..............................................................................           116           116
Deferred tax - long term .......................................................................           550            91
                                                                                                      --------       -------
               Total liabilities  ..............................................................        23,272        16,616
                                                                                                      --------       -------

Stockholders' equity:
     Preferred stock, $.01 par, 2,000 shares authorized, no
          shares issued and outstanding  .......................................................             0             0
     Common stock, $.02 par, 100,000 shares authorized,
          13,739*, and 10,730* shares outstanding (includes 927* shares issued
          in 1996 to the profit sharing plan and 7,026*shares issued in 1996 as
          a stock dividend),
          respectively* ........................................................................           274           274
     Capital in excess of par* .................................................................        25,964        25,615
     Retained earnings  ........................................................................        29,312        22,077
     Treasury stock ............................................................................            (8)           (8)
     Cumulative translation adjustment  ........................................................           (44)          (21)
                                                                                                      --------      --------
               Total stockholders' equity ......................................................        55,498        47,937
                                                                                                      --------      --------
               Total liabilities and stockholders' equity  .....................................      $ 78,770      $ 64,553
                                                                                                      ========      ========
</TABLE>

* Adjusted for 3-for-2 stock split effective November 15, 1997.

   The accompanying notes are an integral part of these financial statements.


                                       1
<PAGE>   3

                           SOURCE SERVICES CORPORATION
                       STATEMENT OF REVENUES AND EXPENSES
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED              NINE MONTHS ENDED
                                             ------------------------------------------------------------
                                             SEPTEMBER 28,  SEPTEMBER 29,  SEPTEMBER 28,    SEPTEMBER 29,
                                                 1997           1996           1997             1996
                                             -------------  -------------  -------------    ------------- 
<S>                                            <C>            <C>            <C>             <C>      
Net service revenue .....................      $ 76,411       $ 54,035       $ 212,772       $ 142,768
Cost of sales, flexible staffing ........        37,480         24,443         103,563          63,716
                                               --------       --------       ---------       ---------
       Gross profit .....................        38,931         29,592         109,209          79,052
                                               --------       --------       ---------       ---------
Operating expenses:
     Selling ............................        31,303         24,363          88,641          66,229
     General and administrative .........         2,740          1,918           8,142           5,670
                                               --------       --------       ---------       ---------
            Total operating expenses.....        34,043         26,281          96,783          71,899
                                               --------       --------       ---------       ---------
            Operating income ............         4,888          3,311          12,426           7,153
Other income (expense):
     Interest income ....................           310             92             838             114
     Interest expense ...................           (38)           (35)           (121)           (126)
     Other, net .........................           (40)           (64)           (266)           (259)
                                               --------       --------       ---------       ---------
            Income before income taxes...         5,120          3,304          12,877           6,882
                                               --------       --------       ---------       ---------
Income tax (expense) benefit:
    Current .............................        (2,339)        (1,528)         (5,724)         (2,753)
    Deferred ............................           173            165              83              46
                                               --------       --------       ---------       ---------
            Total income tax expense.....        (2,166)        (1,363)         (5,641)         (2,707)
                                               --------       --------       ---------       ---------
Net income ..............................      $  2,954       $  1,941       $   7,236       $   4,175
                                               ========       ========       =========       =========
Net income per share* ...................      $   0.21       $   0.15       $    0.52       $    0.37
                                               ========       ========       =========       =========
Weighted average shares outstanding* ....        14,079         12,711          13,976          11,390
                                               ========       ========       =========       =========
</TABLE>

* Adjusted for 3-for-2 stock split effective November 15, 1997.



   The accompanying notes are an integral part of these financial statements.


                                       2
<PAGE>   4

                           SOURCE SERVICES CORPORATION
                        STATEMENT OF STOCKHOLDERS' EQUITY
                             (AMOUNTS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                                                                
                                                Common    Stock    Capital           Cumulative  Treasury  Stock     Total      
                                                ---------------- in Excess  Retained Translation --------------  Stockholders'  
                                                Shares*  Amount*  of Par*   Earnings  Adjustment Shares   Cost       Equity
                                                -------  -------  -------   --------  ---------- ------  ------   ------------
<S>                                              <C>     <C>      <C>        <C>       <C>       <C>     <C>      <C>
December 29, 1996 .............................  13,701  $  274   $ 25,615   $ 22,077   $  (21)      1   $  (8)    $ 47,937    
  Net income ..................................                                 1,841                                 1,841    
  Foreign currency translation adjustment                                                  (28)                         (28)   
                                                -------  ------   --------   --------   ------   -----   -----     --------    
March 30, 1997 ................................  13,701  $  274   $ 25,615   $ 23,918   $  (49)      1   $  (8)    $ 49,750    
                                                -------  ------   --------   --------   ------   -----   -----     --------    
  Net income ..................................                                 2,440                                 2,440    
  Foreign currency translation adjustment                                                   33                           33    
                                                -------  ------   --------   --------   ------   -----   -----     --------    
June 29, 1997 .................................  13,701  $  274   $ 25,615   $ 26,358   $  (16)      1   $  (8)    $ 52,223    
  Net income                                                                    2,954                                 2,954    
  Foreign currency translation adjustment                                                  (28)                         (28)   
  Stock options exercised .....................      38                349                                              349    
                                                -------  ------   --------   --------   ------   -----   -----     --------    
September 28, 1997 ............................  13,739  $  274   $ 25,964   $ 29,312   $  (44)      1   $  (8)    $ 55,498    
                                                =======  ======   ========   ========   ======   =====   =====     ========    
</TABLE>

* Adjusted for 3-for-2 stock split effective November 15, 1997.



   The accompanying notes are an integral part of these financial statements.


                                       3
<PAGE>   5

                           SOURCE SERVICES CORPORATION
                             STATEMENT OF CASH FLOWS
                             (AMOUNTS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                             NINE MONTHS ENDED
                                                                        ----------------------------
                                                                        SEPTEMBER 28,  SEPTEMBER 29,
                                                                            1997           1996
                                                                        -------------  -------------
<S>                                                                       <C>            <C>     
Cash flows from operating activities:
     Net income ....................................................      $  7,236       $  4,175
     Adjustments to reconcile net income to net cash
        provided by operating activities:
          Depreciation and amortization ............................         1,855            759
          Profit Sharing Plan stock contributions ..................             0             12
          Deferred tax asset, net ..................................          (541)          (148)
          Deferred tax liability, net ..............................           459             77
          Loss on asset sales ......................................            66             13
     (Increase) in assets:
          Accounts receivable ......................................       (10,174)        (8,107)
          Income tax receivable ....................................             0           (641)
          Prepaid expense ..........................................          (154)            61
     Increase (decrease) in liabilities:
          Accounts payable and accrued expenses ....................           237           (959)
          Accrued commissions and payroll ..........................         5,976              4
          Accrued 401 (k) plan contribution ........................           214            872
          Accrued contribution to Profit Sharing Plan ..............             0             (6)
          Income taxes payable .....................................          (230)          (340)
          Other liabilities ........................................           (23)           (51)
                                                                          --------       --------
               Net cash provided by operating
                     activities ....................................         4,921         (4,279)
                                                                          --------       --------

Cash flows from investing activities:
     Expenditures for property and equipment .......................        (2,894)        (4,354)
     Proceeds from sales of property and equipment .................            22            327
                                                                          --------       --------
               Net cash (used in) investing activities .............        (2,872)        (4,027)
                                                                          --------       --------

Cash flows from financing activities:
     Borrowings from revolving line of credit ......................             0         44,437
     Repayments of revolving line of credit ........................             0        (44,437)
     Proceeds from exercise of stock options .......................           349             72
     Proceeds from Initial Public Offering .........................             0         20,356
     Costs associated with Initial Public Offering .................             0         (1,148)
     Exercise of underwriters' overallotment option ................             0          4,882
                                                                          --------       --------
               Net cash provided by financing
                    activities .....................................           349         24,162
                                                                          --------       --------

Net decrease in cash and cash equivalents ..........................         2,398         15,856
Cash and cash equivalents at beginning of period ...................        18,849          1,388
                                                                          --------       --------
Cash and cash equivalents at end of period .........................      $ 21,247       $ 17,244
                                                                          ========       ========

Supplemental Cash Flow Information Cash paid during the period for :
     Interest ......................................................      $    121       $     63
                                                                          ========       ========
     Income Taxes ..................................................      $    843       $  3,553
                                                                          ========       ========
</TABLE>


   The accompanying notes are an integral part of these financial statements.


                                       4
<PAGE>   6

                           SOURCE SERVICES CORPORATION
                          NOTES TO FINANCIAL STATEMENTS
                (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
                                   (UNAUDITED)

NOTE 1 --- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

   Nature of business

     Source Services Corporation (the Company), which operates in a single
business segment for generally accepted accounting principle reporting purposes,
places experienced personnel in the fields of information technology,
accounting, finance, engineering, law and health care through its divisions:
Source Edp, Source Finance, Source Engineering, Source Manufacturing, Source
Consulting, Accountant Source Temps, Source HealthCare Staffing and Source
Legal.

   Interim financial information

     The financial statements have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC") and, in
management's opinion, include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of results for such
interim periods. Certain information and note disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to SEC rules or
regulations. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Form 10-K for
the fiscal year ended December 29, 1996. Operating results for the three- and
nine-month periods ended September 28, 1997, are not necessarily indicative of
the results that may be expected for the fiscal year ended December 28, 1997.

   Management estimates

     The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

   Revenue recognition

     Revenue for the placement of personnel on a permanent basis is recognized
on the date the employer and individual mutually agree to an offer and
acceptance of employment. If the individual fails to continue employment for a
period of time as specified in the placement agreement, generally a thirty- to
ninety-day period, the Company is not entitled to collect the placement fee.
Revenue from permanent placements is shown on the Statement of Revenues and
Expenses net of amounts written off for adjustments due to placed candidates not
remaining in employment for the Company's guarantee period. Revenue derived from
flexible staffing is recognized as services are performed by the Company's
billable employees and contractors. Revenue from flexible staffing on the
Statement of Revenues and Expenses represents gross billings less amounts
written off. The Company maintains an allowance for potential fee adjustments
and uncollectible accounts.

   Cash and cash equivalents

     Cash and cash equivalents include cash on hand and in banks and overnight
investments. Overnight investments in Eurodollars were $13,900 and $4,500 at
September 28, 1997 and December 29, 1996, respectively.

   Treasury stock

     Treasury shares acquired are held for future reissuance. Treasury shares
are recorded at cost of acquisition. Reissued shares are relieved using the
average cost method.


                                       5
<PAGE>   7

   Property and equipment

     Furniture and equipment is stated at cost and is depreciated on a
straight-line basis over estimated useful lives, ranging from three to seven
years. Leasehold improvements are stated at cost and are amortized on a
straight-line basis over the shorter of the lease term or the estimated useful
life of the improvements.

   Self-insurance

     The Company offers an employee benefit program for which it is self-insured
for a portion of the cost. The Company is liable for claims up to $100 per
employee and aggregate claims up to a defined yearly payment limit. All
full-time employees and salaried consultants are eligible to participate in the
program. Self-insurance costs are accrued using actuarial estimates to
approximate the liability for reported claims and claims incurred but not
reported.

   Fair value of financial instruments

     Statement of Financial Accounting Standards (SFAS) No. 107, "Disclosure
About Fair Value of Financial Instruments," requires the disclosure, to the
extent practicable, of the fair value of financial instruments which are
recognized or unrecognized in the balance sheet. The carrying amounts of the
Company's financial instruments, primarily cash, investments, and short-term
trade receivables and payables, approximate fair value.

   Income taxes

     The Company accounts for income taxes under the principles of SFAS No. 109,
"Accounting for Income Taxes." SFAS No. 109 requires an asset and liability
approach to the recognition of deferred tax assets and liabilities for the
expected future tax consequences of differences between the carrying amounts and
the tax bases of other assets and liabilities.

   Foreign currency translation

     Foreign currency translation adjustments arise primarily from activities of
the Company's Canadian operations. Results of operations are translated using
the average exchange rates during the period, while assets and liabilities are
translated into U.S. dollars using current rates. Resulting foreign currency
translation adjustments are recorded in stockholders' equity.

   Earnings per share

     Earnings per share is computed by dividing net income by the weighted
average number of common stock and common stock equivalents outstanding during
the year. Common stock equivalents consist of stock options. Earnings per share
have been retroactively adjusted to give effect to the 3-for-2 stock split
declared on October 21, 1997, which will be distributed on or about November 15,
1997 (Note 5).

NOTE 2 --- EQUITY

     The Company issued 22,500 stock options on January 2, 1997. These stock
options were issued at an exercise price of $11.67, the closing market value on
the date of issuance. No compensation expense was recorded in connection with
the issuance of these stock options in accordance with generally accepted
accounting principles. These stock options vest over four years: 1/3 on January
3, 1999, 1/3 on January 3, 2000, and 1/3 on January 3, 2001.

     The Company issued 37,500 stock options on May 15, 1997. These stock
options were issued at an exercise price of $12.67, the closing market value on
the date of issuance. No compensation expense was recorded in connection with
the issuance of these stock options in accordance with generally accepted
accounting principles. Of these stock options, 13,875 are non-qualified stock
options which vest and are exerciseable over three years: 1/3 on July 26, 1998,
1/3 on July 26, 1999 and 1/3 on July 26, 2000. The remaining 23,625 are
qualified stock options which vest and are exerciseable over four years: 1/4 on
July 26, 1998, 1/4 on July 26, 1999, 1/4 on July 26, 2000 and 1/4 on July 26,
2001.


                                       6
<PAGE>   8

     The Company issued 36,000 stock options on May 28, 1997. These stock
options were issued at an exercise price of $13.83, the closing market value on
the date of issuance. No compensation expense was recorded in connection with
the issuance of these stock options in accordance with generally accepted
accounting principles. Of these stock options, 9,000 were issued under the 1996
Non-Employee Directors Stock Option Plan. They vest and are exerciseable within
six months of issuance. The remaining 27,000 stock options were issued under the
1997 Non-Employee Directors Stock Option Plan. They vest upon issuance, but are
exerciseable over a five year period: 20% at May 28, 1998, 20% at May 28, 1999,
20% at May 28, 2000, 20% at May 28, 2001 and 20% at May 28, 2002.

     The Company issued 7,500 stock options on June 30, 1997. These stock
options were issued at an exercise price of $17.92, the closing market value on
the date of issuance. No compensation expense was recorded in connection with
the issuance of these stock options in accordance with generally accepted
accounting principles. These stock options were issued under the 1996 Incentive
Stock Option Plan and vest over three years: 1/3 on August 2, 1998, 1/3 on
August 2, 1999, and 1/3 on August 2, 2000.

     The Company issued 18,750 stock options on September 2, 1997. These stock
options were issued at an exercise price of $19.33, the closing market value on
the date of issuance. No compensation expense was recorded in connection with
the issuance of these stock options in accordance with generally accepted
accounting principles. These stock options were issued under the 1996 Incentive
Stock Option Plan and vest over three years: 1/3 on September 3, 1999, 1/3 on
September 3, 2000, and 1/3 on September 3, 2001.

NOTE 3 --- NEW ACCOUNTING STANDARD

     In February 1997, SFAS No. 128 "Earnings Per Share" was issued effective
for interim and annual periods ending after December 15, 1997. SFAS No. 128
establishes new standards for computing and presenting earnings per share. If
the Company had computed earnings per share in accordance with SFAS No. 128, pro
forma basic earnings per share for the three month periods ended September 28,
1997 and September 29, 1996, would have been $0.22 and $0.16 respectively and
pro forma diluted earnings per share would have been $0.21 and $0.15,
respectively. For the nine month period ended September 28, 1997 and September
29, 1996, pro forma basic earnings per share would have been $0.53 and $0.37
respectively, and pro forma diluted earnings per share would have been $0.52 and
$0.37, respectively.

NOTE 4 --- PREFERRED STOCK PLAN

     On May 28, 1997, the Board of Directors of the Company adopted a
shareholder rights plan. Pursuant to such plan, a Series A Right is associated
with, and trades with, each share of common stock outstanding. The record date
for distribution of Series A Rights was June 18, 1997, and for so long as the
Series A Rights are associated with the common stock, each new share of common
stock issued by the Company will include one Series A Right. Each right entitles
holders of the Company's common stock to buy one-one hundredth of a share of a
new series of preferred stock at an exercise price of $90. The rights are
exerciseable if a person or group acquires 20% or more of the Company's common
stock or announces a tender offer to acquire 20% or more of the common stock.
The rights will expire in ten years unless earlier redeemed or terminated.


                                       7
<PAGE>   9

NOTE 5 --- SUBSEQUENT EVENT

     On October 21, 1997, the Company declared a 3-for-2 stock split of its
common stock. The stock split will be in the form of a 50% stock dividend which
will be distributed on or about November 15, 1997, to shareholders of record at
the close of business on November 3, 1997. All share and per share amounts have
been re-stated to reflect this stock split.

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

FORWARD-LOOKING STATEMENTS

     This Form 10-Q includes certain "forward looking" statements, within the
meaning of the Private Securities Litigation Reform Act of 1995, which reflect
the Company's current expectations regarding the future results of operations,
performance and achievements. Source Services Corporation has tried, wherever
possible, to identify these "forward looking" statements by using words such as
"anticipate," "believe," "estimate," "expect" and similar expressions. These
statements reflect the Company's current beliefs and are based on information
currently available to it. Accordingly, these statements are subject to risks
and uncertainties which could cause the Company's actual results, performance or
achievements to differ materially from those expressed in, or implied by these
statements. These risks and uncertainties include the following: economic
activity in the United States and in the regions of the country in which the
Company operates; the Company's ability to attract and retain qualified
personnel; the Company's ability to maintain and protect its information
processing systems and proprietary technology; the achievement and management of
growth by the Company through internal expansion in current markets; the
retention of key management personnel and qualified sales associates; exposure
to employment liability risk; competition in the Company's current and potential
target markets; and changes in legislative or regulatory requirements. Readers
are encouraged to review the Risk Factors Section of the Company's Form S-1
dated July 29, 1996 for a more complete description of these factors. The
Company is not obligated to update or revise these "forward looking" statements
to reflect new events or circumstances.

     The following discussion should be read in connection with the Company's
Financial Statements and the related Notes thereto included elsewhere in this
document.

RESULTS OF OPERATIONS

Three- and Nine-Month Periods Ended September 28, 1997, compared to the Three-
and Nine-Month Periods Ended September 29, 1996

     Net Service Revenue. Net service revenue for the three month period ended
September 28, 1997 increased 41.4% to $76.4 million, from $54.0 million for the
three month period ended September 29, 1996. Net service revenue for the nine
month period ended September 28, 1997 increased 49.0% to $212.8 million, from
$142.8 million for the nine month period ended September 29, 1996. The growth in
net service revenue was primarily attributable to the Company's continued focus
on expanding its flexible staffing service offerings in existing markets.

     Net service revenues from flexible staffing services grew 54.7% to $52.3
million for the three months ended September 28, 1997, from $33.8 million for
the three months ended September 29, 1996. Net service revenues from flexible
staffing services grew 62.2% to $143.4 million for the nine months ended
September 28, 1997, from $88.4 million for the nine month period ended September
29, 1996. The growth in flexible staffing net service revenue is primarily due
to an increase in the hours billed from adding additional markets and growth in
existing markets and, to a lesser extent, an increase in the average billing
rates.

     Permanent placement net service revenue increased 19.2% to $24.1 million
for the three months ended September 28, 1997, from $20.2 million for the three
months ended September 29, 1996. Permanent placement net service revenue
increased 27.7% to $69.4 million for the nine months ended September 28, 1997,
from $54.3 million for the nine months ended September 29, 1996. The growth in
permanent placement net service revenue is


                                       8
<PAGE>   10

primarily the result of an increase in the number of permanent placements and,
to a lesser extent, an increase in the average placement fees.

     Gross profit. Gross profit increased 31.6% to $38.9 million for the three
months ended September 28, 1997, from $29.6 million for the three months ended
September 29, 1996. Gross profit as a percentage of net service revenues
decreased slightly to 50.9% for the three months ended September 28, 1997, from
54.8% for the three months ended September 29, 1996. Gross profit increased
38.1% to $109.2 million for the nine months ended September 28, 1997, from $79.1
million for the nine months ended September 29, 1996. Gross profit as a
percentage of net service revenues decreased slightly to 51.3% for the nine
months ended September 28, 1997, from 55.4% for the nine months ended September
29, 1996. The decrease was primarily a result of a continued change in the mix
of the Company's net service revenue toward flexible staffing. 

     Operating expenses. Operating expenses increased 29.5% to $34.0 million for
the three months ended September 28, 1997, from $26.3 million for the three
months ended September 29, 1996. Operating expenses as a percentage of net
service revenues decreased slightly to 44.6% for the three months ended
September 28, 1997, from 48.6% for the three months ended September 29, 1996.
Operating expenses increased 34.6% to $96.8 million for the nine months ended
September 28, 1997, from $71.9 million for the nine months ended September 29,
1996. As a percentage of net service revenue, operating expenses decreased to
45.5% for the nine months ended September 28, 1997, as compared to 50.4% for the
nine months ended September 29, 1996. The increase was primarily a result of
hiring additional operations employees, increased expenses associated with the
expansion of the Company's business, and upgrades in the Company's management
information system.

     Operating Income. Operating income increased 47.6% to $4.9 million for the
three months ended September 28, 1997, from $3.3 million for the three months
ended September 29,1996. Operating income increased 73.7% to $12.4 million for
the nine months ended September 28, 1997, from $7.2 million for the nine months
ended September 29, 1996. The increase is primarily a result of the factors
described above.

     Other (income) expense. Other (income) expense was $0.2 million of income
for the three months ended September 28, 1997, compared to $0.007 million of
expense for the three months ended September 29, 1996. Other (income) expense
was $0.5 million of income for the nine months ended September 28, 1997,
compared to $0.3 million of expense for the nine months ended September 29,
1996.

     Income Taxes. The effective tax rate increased to 42.3% for the three
months ended September 28, 1997, and 43.8% for the nine months ended September
28, 1997, compared to 41.3% for the three months ended September 29, 1996 and
39.3% for the nine months ended September 29, 1996, respectively.

     Net Income. Net income increased to $3.0 million for the three months ended
September 28, 1997, and $7.2 million for the nine months ended September 28,
1997, from $1.9 million for the three months ended September 29, 1996, and $4.2
million for the nine months ended September 29, 1996. The increase was primarily
a result of the factors described above.

LIQUIDITY AND CAPITAL RESOURCES

     As of September 28, 1997, the Company's sources of liquidity included
approximately $48.4 million in net working capital. In addition, as of September
28, 1997, $10.0 million was available for borrowing under the Company's line of
credit.

     During the first nine months of 1997, cash flow provided by operations was
approximately $4.9 million, resulting primarily from net income and an increase
in accrued commissions and payroll, offset by an increase in accounts
receivable.

     During the first nine months of 1997, cash flow used by investing
activities was approximately $2.9 million, resulting primarily from expenditures
for computer equipment, office furniture and fixtures and telephone equipment.


                                       9
<PAGE>   11

     The Company believes its cash balance, short-term investments and available
line of credit borrowings will be sufficient to meet its anticipated cash
requirements for at least the next twelve months unless it uses a substantial
portion of its cash balances to fund additional acquisitions.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS
         None

ITEM 2.  CHANGES IN SECURITIES
         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES
         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
         None

ITEM 5.  OTHER INFORMATION
         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits
             (27) Financial Data Schedule

         (b) Reports on Form 8-K
             None


SIGNATURES

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

November 12, 1997

Source Services Corporation
(Registrant)

By:/s/ Richard Dupont
   ------------------------------------------------
       Richard Dupont, Chief Financial Officer
       and Secretary



                                       10
<PAGE>   12

                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT                               
NUMBER                        EXHIBIT
------                        -------
<S>               <C>                       
   27             Financial Data Schedule
</TABLE>