content: FORM 10-Q
  
                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
  (X)      QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15 (d) OF THE  SECURITIES
           EXCHANGE ACT OF 1934
  
           For the quarterly period ended     September 30, 1997
  
                                         OR
  
  ( )      TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15 (D) OF THE  SECURITIES
           AND EXCHANGE ACT OF 1934
  
           For the transition period from           to
  
  
                           Commission File Number 0-15539
  
                         RIGHT MANAGEMENT CONSULTANTS, INC.
               (Exact name of registrant as specified in its charter)
  
  
           Pennsylvania                                   23-2153729
  (State of other jurisdiction of                      (IRS Employer
   incorporation of organization)                       Identification No.)
  
  
      1818 Market Street, Philadelphia, Pennsylvania                19103
         (Address of principal executive offices)                 (Zip Code)
  
           Registrant's telephone number, including area code: (215) 988-1588
  
           Indicate by check mark whether the registrant: (1) has filed all
           reports required to be filed by Section 13 or 15(d) of the Securities
           Exchange Act of 1934 during the preceding 12 months (or for such
           shorter period that the registrant was required to file such reports),
           and (2) has been subject to such filing requirements for the past 90
           days.
  
                           Yes       X                        No
  
           Indicate the number of shares outstanding of each of the issuer's
           classes of common stock as of October 31, 1997:
  
           Common Stock, $0.01 par value                    6,651,526
           -----------------------------                 ---------------
                       Class                             Number of Shares
  <PAGE>
  
                         Right Management Consultants, Inc.
                        Condensed Consolidated Balance Sheets
                      (Amounts in Thousands Except Share Data)
  <TABLE>
  <CAPTION>
                                                                              September 30,     December 31,
                                                                                   1997              1996
                                                                               (Unaudited)
                                       Assets
  Current Assets:
  <S>                                                                            <C>              <C>     
  Cash and cash equivalents                                                      $  8,857         $ 18,055
  Accounts receivable, trade, net of allowance for doubtful accounts
      of $645 and $552 in 1997 and 1996, respectively                              22,086           18,878
  Royalties and fees receivable from Affiliates                                     3,063            3,505
  Other current assets                                                              2,203            2,270
                                                                                 --------         --------
         Total current assets                                                      36,209           42,708
  
  Property and equipment, net of accumulated depreciation of $15,845
     and $12,917 in 1997 and 1996, respectively                                    13,167            9,666
  
  Other Assets:
  Intangible assets, net of accumulated amortization of $10,046 and
      $8,525 in 1997 and 1996, respectively                                        29,219           18,724
  Other noncurrent assets                                                           3,034            2,837
                                                                                 --------         --------
         Total Assets                                                            $ 81,629         $ 73,935
                                                                                 ========         ========
  
  
                        Liabilities and Shareholders' Equity
  Current Liabilities:
  Current portion of long-term debt and other obligations                        $  3,749         $  1,011
  Accounts and commissions payable                                                  4,450            5,536
  Accrued expenses                                                                  5,688            6,951
  Deferred income                                                                   4,293            3,868
                                                                                 --------         --------
         Total current liabilities                                                 18,180           17,366
                                                                                 --------         --------
  
  Long-term debt and other obligations                                              9,639            6,904
                                                                                 --------         --------
  
  Deferred compensation                                                             1,622            1,864
                                                                                 --------         --------
  
  Minority interest in subsidiary                                                   1,416               --
                                                                                 --------         --------
  
  Shareholders' Equity:
  Preferred stock, no par value; 1,000,000 shares authorized; no
      shares issued or outstanding                                                     --               --
  Common stock, $.01 par value; 20,000,000 shares authorized; 7,021,349
      and 6,713,573 shares issued in 1997 and 1996, respectively                       70               67
  Additional paid-in capital                                                       13,956           11,956
  Retained earnings                                                                38,856           36,290
  Cumulative translation adjustment                                                  (214)               5
                                                                                 --------         --------
                                                                                   52,668           48,318
  Less treasury stock, at cost, 380,452 shares and 252,952 shares in 1997
      and 1996, respectively                                                       (1,896)            (517)
                                                                                 --------         --------
         Total shareholders' equity                                                50,772           47,801
                                                                                 --------         --------
         Total Liabilities and Shareholders' Equity                              $ 81,629         $ 73,935
                                                                                 ========         ========
  </TABLE>
  
     The accompanying notes are an integral part of these condensed consolidated
                                financial statements.
  
                                         2
  <PAGE>
  
                         Right Management Consultants, Inc.
                     Condensed Consolidated Statements of Income
          (Dollars and Shares in Thousands Except Earnings per Share Data)
                                     (Unaudited)
  
  <TABLE>
  <CAPTION>
                                                      Three Months Ended September 30,
                                                           1997              1996
  <S>                                                    <C>              <C>     
  Revenue:
  Company office revenue                                 $ 32,039         $ 26,741
  Affiliate royalties                                         785            1,323
                                                         --------         --------
  
  Total revenue                                            32,824           28,064
                                                         --------         --------
  
  Expenses:
  Consultants' compensation                                13,609           11,138
  Office sales and consulting support                       2,051            1,376
  Office administration                                    12,533            9,260
  General sales and administration                          3,079            2,600
                                                         --------         --------
  
  Total expenses                                           31,272           24,374
                                                         --------         --------
  
  Income from operations                                    1,552            3,690
  
  Other income (expense):
  
  Interest income                                             144              160
  Interest expense                                           (224)            (136)
                                                         --------         --------
  
                                                              (80)              24
                                                         --------         --------
  
  Income before income taxes                                1,472            3,714
  
  Provision for income taxes                                  618            1,545
  
  Minority interest in net income of subsidiary               209               --
                                                         --------         --------
  
  Net income                                             $    645         $  2,169
                                                         ========         ========
  
  Earnings per share                                     $   0.10         $   0.32
                                                         ========         ========
  
  Weighted average number of shares outstanding             6,745            6,877
                                                         ========         ========
  </TABLE>
  
           The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                         3
  <PAGE>
  
                         Right Management Consultants, Inc.
                     Condensed Consolidated Statements of Income
          (Dollars and Shares in Thousands Except Earnings per Share Data)
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                       Nine Months Ended September 30,
                                                            1997             1996
  <S>                                                    <C>              <C>     
  Revenue:
  Company office revenue                                 $ 91,086         $ 89,548
  Affiliate royalties                                       2,610            3,600
                                                         --------         --------
  
  Total revenue                                            93,696           93,148
                                                         --------         --------
  
  Expenses:
  Consultants' compensation                                38,917           35,137
  Office sales and consulting support                       5,164            3,924
  Office administration                                    34,931           31,352
  General sales and administration                          9,327           10,587
  Restructuring costs (Note B)                                630               --
                                                         --------         --------
  
  Total expenses                                           88,969           81,000
                                                         --------         --------
  
  Income from operations                                    4,727           12,148
  
  Other income (expense):
  
  Interest income                                             452              418
  Interest expense                                           (474)            (474)
                                                         --------         --------
  
                                                              (22)             (56)
                                                         --------         --------
  
  Income before income taxes                                4,705           12,092
  
  Provision for income taxes                                1,930            4,917
  
  Minority interest in net income of subsidiary               209               --
                                                         --------         --------
  
  Net income                                             $  2,566         $  7,175
                                                         ========         ========
  
  Earnings per share                                     $   0.38         $   1.07
                                                         ========         ========
  
  Weighted average number of shares outstanding             6,731            6,675
                                                         ========         ========
  </TABLE>
  
                                         4
  <PAGE>
  
                         Right Management Consultants, Inc.
                   Condensed Consolidated Statements of Cash Flows
                               (Dollars in Thousands)
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                    Nine Months Ended September 30,
                                                                        1997             1996
  <S>                                                                <C>              <C>     
  Operating Activities:
    Net income                                                       $  2,566         $  7,175
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                   4,591            3,597
        Restricted stock compensation                                    (658)             400
        Restructuring costs (Note B)                                      630               --
        Tax benefit from the exercise of stock options                    400            1,919
        Minority interest in net income of subsidiary                     209               --
        Other non-cash items                                             (461)            (169)
        Provision for doubtful accounts                                   225              225
        Changes in operating accounts:
            (Increase) decrease in operating assets                    (1,053)             961
            Decrease in operating liabilities                          (5,964)          (1,230)
                                                                     --------         --------
  
    Net cash provided by operating activities                             485           12,878
                                                                     --------         --------
  
  Investing Activities:
    Purchase of property and equipment                                 (3,657)          (3,243)
    Acquisitions, net of cash acquired and borrowings assumed          (4,268)            (740)
                                                                     --------         --------
  
    Net cash utilized for investing activities                         (7,925)          (3,983)
                                                                     --------         --------
  
  Financing Activities:
    Payment of long-term debt and other obligations                    (1,650)          (3,786)
    Repurchase of common stock                                         (1,379)              --
    Proceeds from stock issuances                                       1,271            1,321
                                                                     --------         --------
  
    Net cash utilized for financing activities                         (1,758)          (2,465)
                                                                     --------         --------
  
  (Decrease) increase in cash and cash equivalents                     (9,198)           6,430
  
  Cash and cash equivalents, beginning of period                       18,055            8,965
                                                                     --------         --------
  
  Cash and cash equivalents, end of period                           $  8,857         $ 15,395
                                                                     ========         ========
  
  Supplemental Disclosures of Cash Flow Information
    Cash paid for:
  
       Interest                                                      $    393         $    389
                                                                     ========         ========
  
       Income taxes                                                  $  2,097         $  3,231
                                                                     ========         ========
  </TABLE>
  
           The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                         5
  <PAGE>
                         RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Basis of Presentation
  
  The accompanying unaudited condensed consolidated financial statements have been
  prepared in accordance with generally accepted accounting principles for interim
  financial information and the instructions to Form 10-Q and Rule 10-01 of
  Regulation S-X. Accordingly, they do not include all of the information and
  footnote disclosures necessary for a fair presentation of consolidated financial
  position, results of operations and cash flows in conformity with generally
  accepted accounting principles. In the opinion of management, all adjustments
  (consisting of normal recurring adjustments) considered necessary for a fair
  presentation have been included. Operating results for the nine months ended
  September 30, 1997 are not necessarily indicative of the results that may be
  expected for the year ending December 31, 1997. For further information, refer
  to the financial statements and footnotes thereto included in the Company's
  Annual Report on Form 10-K for the year ended December 31, 1996.
  
  Principles of Consolidation
  
  The consolidated financial statements include the accounts of Right Management
  Consultants, Inc. and its majority-owned subsidiaries. All significant
  intercompany transactions and balances have been eliminated in consolidation.
  
  Reclassifications
  
  Certain 1996 amounts have been reclassified to conform to the 1997 presentation.
  
  NOTE B - RESTRUCTURING COSTS
  
  During the first quarter 1997, the Company announced a corporate restructuring.
  The restructuring charge of $630,000 ($380,000 or $0.06, net of taxes) was
  primarily for severance payments related to reductions in employees and lease
  termination costs for the closure of several small "satellite" offices with
  limited future economic benefit to the Company. The Company anticipates that all
  payments for severance and office closures will be completed in early 1998.
  
  
                                         6
  <PAGE>
                         RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE C - ACQUISITIONS
  
  Effective January 1, 1997, the Company acquired the assets and/or the
  outstanding stock of six career transition firms and one search firm for a
  combination of cash and future defined incentive payments. The six career
  transition firms included Nelson, O'Connor & Associates (Phoenix, Arizona),
  Corporate Resource Group (San Francisco, California), Cavendish Partners
  (London, England) and the former St. Louis, Missouri, Knoxville, Tennessee, and
  Richmond, Virginia Affiliates. The search firm acquired was Nelson, O'Connor Cox
  (Tucson, Arizona).
  
  Effective April 1, 1997, the Company acquired the outstanding stock of another
  career transition firm, Chapel Stowell, Inc. (Portland, Oregon).
  
  Effective July 1, 1997, the Company acquired 51% of the outstanding shares of
  the Australia based career management firm, Davidson & Associates, Pty., Ltd
  ("Davidson & Associates"). Davidson & Associates has operations in eleven
  locations throughout Australia, New Zealand, Singapore and Hong Kong. The
  purchase price of this acquisition approximated $6,935,000, including costs of
  acquisition, 85% of which was paid in cash (approximately $5,946,000) and the
  remaining 15% in shares of the Company's common stock (96,577 shares). The
  Company borrowed $5,500,000 from its revolving credit facility in order to
  complete this transaction. As a part of the purchase agreement, the minority
  shareholders of Davidson & Associates have agreed to provide the Company with
  options to acquire the remaining 49% of the outstanding shares of Davidson &
  Associates beginning on July 1, 2000. Additionally, the minority shareholders of
  Davidson & Associates have the right to require the Company to purchase in 10%
  increments the remaining 49% of the outstanding shares of Davidson & Associates
  beginning on July 1, 2000.
  
  Effective August 1, 1997, the Company acquired the business and certain assets
  of a Minneapolis, Minnesota career management firm, Career Dynamics, Inc. The
  purchase price of the acquisition approximated $2,000,000, including costs of
  acquisition, and was funded through borrowings under the Company's revolving
  credit facility. The acquisition also included future defined incentives
  contingent upon the results of the operations in Minnesota subsequent to the
  transaction.
  
  The acquisitions were accounted for under the purchase method. The accompanying
  consolidated financial statements reflect the year to date results from the
  effective date of acquisition for all of the above acquisitions. The aggregate
  purchase price for the acquisitions described above was approximately
  $13,608,000, including the costs of acquisitions. The purchase price exceeded
  the fair value of the assets acquired by $12,733,000.
  
  The pro-forma impact of these acquisitions on results of operations, if any one
  of the acquisitions had been consummated at the beginning of each period
  presented, is immaterial to the consolidated financial statements as a whole and
  has been omitted.
  
                                         7
  <PAGE>
  
                         RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE D - DEBT
  
  In order to reduce the impact of changes in interest rates on a portion of the
  Company's floating rate debt under its revolving credit facility, the Company
  has entered into three interest rate swap agreements with an aggregate notional
  principal at September 30, 1997 of $10,500,000 and quarterly maturities ranging
  from three to five years. The Company's fixed rates under these interest rate
  swaps range from 6.7% to 7.1%.
  
  The net cash paid or received on interest rate swap agreements is recognized as
  an adjustment to interest expense. The impact of the above interest rate swap
  agreements on interest expense has been immaterial to date.
  
  NOTE E -  SHAREHOLDERS' EQUITY
  
  In March 1997, the Board of Directors (the "Board") approved a stock repurchase
  program under which the Company is authorized to repurchase up to 10% of its
  currently outstanding common stock. Any shares repurchased will be held as
  treasury shares and be available to the Company for use in various benefit plans
  and, when authorized by the Board, for other general corporate purposes. The
  Board has authorized Company management to pursue the repurchase program in open
  market transactions from time-to-time, depending upon market conditions and
  other factors.
  
  As of September 30, 1997, the Company had repurchased 127,500 shares of common
  stock at an aggregate purchase price of $1,379,000.
  
  Stock option activity for the nine month period ended September 30, 1997 is
  summarized as follows:
  
                                                                         Wtd. Avg.
                                                                         Exercise
                                                         Shares            Price
  Outstanding at January 1, 1997                        1,238,295         $10.92
  Granted                                                 210,288          18.21
  Canceled or expired during the period                   (25,125)         13.89
  Exercised during the period                            (183,969)          5.31
                                                        ---------         ------
  Outstanding at September 30, 1997                     1,239,489         $12.93
                                                        =========         ======
  
  Exercise prices for options outstanding as of September 30, 1997 ranged from
  $4.22 to $24.33. The weighted average remaining contractual life of these
  options is approximately 6 years.
  
                                         8
  <PAGE>
  
                         RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE F - EARNINGS PER SHARE
  
  The Financial Accounting Standards Board has issued Statement of Financial
  Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS No. 128
  replaces the presentation of primary earnings per share ("EPS") with a
  presentation of basic EPS. Additionally, SFAS No. 128 requires a dual
  presentation of basic and diluted EPS within the consolidated income statement
  and a reconciliation of the numerator and denominator of the basic EPS
  computation to the numerator and denominator of the diluted EPS calculation.
  SFAS No. 128 is effective for financial statements for periods ending after
  December 15, 1997, with earlier adoption not permitted. Accordingly, the Company
  will adopt SFAS No. 128 for the year ending December 31, 1997.
  
  The following table details the pro forma amounts that would have been reported
  by the Company in both the current and prior year periods had SFAS No. 128 been
  adopted.
  <TABLE>
  <CAPTION>
                                                                Three Months              Nine Months
                                                               Ended Sept. 30,           Ended Sept. 30,
                                                              1997         1996        1997         1996
  <S>                                                       <C>          <C>         <C>          <C>   
               Primary EPS as reported                      $ 0.10       $ 0.32      $ 0.38       $ 1.07
               Effect of SFAS No. 128                           --         0.02        0.01         0.09
                                                            ------       ------      ------       ------
               Basic EPS as restated                        $ 0.10       $ 0.34      $ 0.39       $ 1.16
                                                            ======       ======      ======       ======
  
               Fully diluted EPS as reported                $ 0.10       $ 0.31      $ 0.38       $ 1.07
               Effect of SFAS No. 128                           --         0.01          --           --
                                                            ------       ------      ------       ------
               Diluted EPS as reported                      $ 0.10       $ 0.32      $ 0.38       $ 1.07
                                                            ======       ======      ======       ======
  </TABLE>
  
  
                                         9
  <PAGE>
  
                         RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE G - GEOGRAPHIC SEGMENTS
  
  Summarized operations of each of the Company's geographic segments in the
  aggregate as of September 30, 1997 and 1996 and for the nine month periods then
  ended are as follows:
  <TABLE>
  <CAPTION>
                                                    (U.S. Dollars in Thousands)
  1997                                U.S.       Canada      Europe    Asia-Pacific  Consolidated
  <S>                               <C>         <C>         <C>         <C>           <C>    
  Identifiable assets               $63,391     $ 6,708     $ 5,889     $   5,641     $81,629
                                    =======     =======     =======     =========     =======
  
  Revenue                           $73,361     $ 7,703     $ 8,882     $   3,750     $93,696
                                    =======     =======     =======     =========     =======
  
  Income from operations            $ 2,187     $ 1,080     $   738     $     722     $ 4,727
                                    =======     =======     =======     =========     =======
  
  Depreciation and amortization     $ 3,914     $   185     $   333     $     159     $ 4,591
                                    =======     =======     =======     =========     =======
  
  Capital expenditures              $ 2,683     $    94     $   678     $     202     $ 3,657
                                    =======     =======     =======     =========     =======
  
  1996
  Identifiable assets               $57,855     $ 6,260     $ 6,002     $      --     $70,117
                                    =======     =======     =======     =========     =======
  
  Revenue                           $78,638     $ 6,361     $ 8,149     $      --     $93,148
                                    =======     =======     =======     =========     =======
  
  Income from operations            $11,568     $    78     $   502     $      --     $12,148
                                    =======     =======     =======     =========     =======
  
  Depreciation and amortization     $ 2,901     $   359     $   337     $      --     $ 3,597
                                    =======     =======     =======     =========     =======
  
  Capital expenditures              $ 3,099     $    59     $    85     $      --     $ 3,243
                                    =======     =======     =======     =========     =======
  </TABLE>
  
  
                                         10
  <PAGE>
                                   PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
  
  
  Results of Operations
  
  For the three months ended September 30, 1997, revenue generated by Company
  offices increased by 20% or $5,298,000 from the corresponding quarter in 1996.
  This increase is due to $6,122,000 in incremental revenues from the acquisitions
  detailed in Note C to the Condensed Consolidated Financial Statements, partly
  offset by a same office revenue decrease of approximately 3% or $824,000. The
  Company's recent acquisition of Davidson & Associates contributed $3,750,000 of
  the incremental acquisition revenues. The same office revenue decrease was due
  to a seasonal slow down in both the North American and European career
  transition markets, as well as the continued strength of the U.S. economy.
  
  Total European revenues for the third quarter 1997 decreased by 4% or $100,000
  versus the corresponding quarter in 1996 due to a same office revenue decrease
  of 15% or $393,000, partly offset by incremental revenues from one acquisition.
  The strong U.S. dollar also contributed to the revenue decline for the quarter.
  On a constant dollar basis, total European revenues increased by 4%.
  
  On a sequential basis, the third quarter 1997 versus 1996 same office revenue
  decrease of 3% is an improvement from the 11% decrease reported in the second
  quarter 1997 versus 1996.
  
  For the nine months ended September 30, 1997, revenue generated by Company
  offices increased 2% or $1,538,000 from the corresponding period in 1996. This
  increase is due primarily to $10,035,000 in incremental revenues from the
  acquisitions detailed in Note C to the Condensed Consolidated Financial
  Statements, as well as revenue growth within the consulting line of business.
  Offsetting the incremental revenues from acquisitions and revenue growth within
  the consulting line of business was an approximate 10% same office revenue
  decrease. The previously mentioned slow down in the North American career
  transition market was the primary factor behind the year to date same office
  revenue decrease.
  
  For the nine months ended September 30, 1997, total European revenues increased
  by 9% or $736,000 versus the same period in 1996. This increase was due to
  incremental revenues from one acquisition, partly offset by a modest same office
  revenue decrease. As noted for the quarter's results, the strong U.S. dollar
  contributed to the revenue decline for the year to date. On a constant dollar
  basis, total European revenues increased by 15%.
  
                                         11
  <PAGE>
  
                                   PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                      CONTINUED
  
  For the three months ended September 30, 1997, Affiliate royalties decreased 41%
  or $538,000 from the corresponding quarter in 1996. For the nine months ended
  September 30, 1997, Affiliate royalties decreased 28% or $990,000 from the
  corresponding period in 1996. The decreases for the quarter and year-to-date
  1997 are attributable to the aforementioned decline in the North American career
  transition market, as well as the acquisitions of three former Affiliates in the
  first quarter 1997 (see Note C to the Condensed Consolidated Financial
  Statements). Affiliate royalties, on a same office basis, decreased 38% and 24%,
  respectively, from the corresponding periods in 1996.
  
  For the three months ended September 30, 1997, total Company office expenses
  increased 29% or $6,419,000 over the corresponding quarter in 1996. This
  increase is due primarily to approximately $5,914,000 in incremental costs from
  acquisitions. The remaining increase is due to a significant reduction of
  incentive compensation costs in the third quarter of 1996 resulting from a
  sequential drop off in the Company's revenues and operating results to levels
  below targets.
  
  On a sequential basis, same office costs for the third quarter 1997 decreased by
  approximately $685,000 from the second quarter 1997.
  
  For the nine months ended September 30, 1997, total Company office expenses,
  exclusive of restructuring costs (see Note B to the Condensed Consolidated
  Financial Statements), increased 12% or $8,599,000 over the corresponding period
  in 1996. This dollar increase is due to approximately $8,981,000 in incremental
  costs from acquisitions, offset by a reduction of costs in existing Company
  office locations.
  
  Aggregate Company office margins, exclusive of restructuring costs, were 12% and
  13% for the quarter and year-to-date 1997, respectively, versus 19% and 21% for
  both of the same respective periods in 1996. The decrease in margins is
  attributable primarily to the decline in career transition revenues, partly
  offset by improved margins in the consulting line of business, favorable results
  for Davidson & Associates and improved year-to-date results in the European
  operations. For the nine months ended September 30, 1997, European office
  margins approximated 8% versus 6% for the corresponding period in 1996.
  
  For the three months ended September 30, 1997, general sales and administration
  expenses increased by 18% or $479,000 over the corresponding period in 1996.
  This increase is due to a significant reduction of incentive compensation costs
  in the third quarter of 1996 as the Company did not meet internal operating
  targets. Despite the increase, general sales and administration expenses as a
  percentage of total revenues were approximately 9% for the third quarter of both
  years.
  
                                         12
  <PAGE>
  
                                   PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                      CONTINUED
  
  For the nine months ended September 30, 1997, general sales and administration
  expenses decreased by 12% or $1,260,000 from the corresponding period in 1996.
  Due to the Company's decreasing stock price during 1997 and the forfeiture of
  certain awards of common stock, total compensation expense related to restricted
  stock grants included within general sales and administration expenses was
  reduced by approximately $658,000 for the year-to-date 1997. The remaining
  decrease is generally a result of reduced incentive compensation costs as the
  Company's internal targets were not achieved.
  
  The Company's effective tax rate for the three months ended September 30, 1997
  and 1996 was approximately 42%. The Company's effective tax rate for the nine
  months ended September 30, 1997 and 1996 was approximately 41%.
  
  Capital Resources and Liquidity
  
  At September 30, 1997 and December 31, 1996, the Company had cash and cash
  equivalents of $8,857,000 and $18,055,000, respectively. The significant
  decrease in cash and cash equivalents is the result of lower net income, as well
  as payments made for acquisitions and 1996 incentive compensation (see Note C to
  the Condensed Consolidated Financial Statements).
  
  Net cash utilized for investing activities amounted to $7,925,000 and $3,983,000
  for the nine months ended September 30, 1997 and 1996, respectively. The Company
  continues to invest in equipment and technology to meet the needs of its
  operations and enhance operating efficiencies. Additionally, during the first
  nine months of 1997 the Company acquired ten career management firms for a
  combination of cash and future defined incentive payments (see Note C to the
  Condensed Consolidated Financial Statements). The $4,268,000 net cash paid for
  acquisitions on the Condensed Consolidated Statement of Cash Flows is net of
  $7,500,000 in borrowings from the Company's revolving credit facility, as well
  as $850,000 of cash acquired from acquisitions. Additionally, in connection with
  the Davidson & Associates acquisition (see Note C to the Condensed Consolidated
  Financial Statements), the net cash paid for acquisitions on the Condensed
  Consolidated Statement of Cash Flows excludes the value of the issuance of
  96,577 shares which is considered a non-cash investing activity.
  
  Net cash utilized for financing activities amounted to $1,758,000 and $2,465,000
  for the nine months ended September 30, 1997 and 1996, respectively. The net
  cash outlay for 1997 was the result of repayments on the Company's borrowings
  and defined incentives for acquisitions made in previous years, as well as the
  repurchase of common stock (see Note E to the Condensed Consolidated Financial
  Statements), in excess of proceeds from the issuance of stock.
  
                                         13
  <PAGE>
  
                                   PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                      CONTINUED
  
  During 1996, the Company increased its borrowing capacity to $40,000,000 from
  the previous $15,000,000 level through the execution of its revolving credit
  facility with its two primary lenders. The Company had approximately $27,600,000
  available under the revolving credit facility at September 30, 1997. The Company
  plans to utilize the revolving credit facility to assist in the financing of
  acquisitions as they arise and for other general corporate purposes.
  
  The Company anticipates that its cash and working capital will be sufficient to
  service its existing debt, outstanding commitments and to maintain Company
  operations at current levels for the foreseeable future. The Company will
  continue to consider acquisitions and other expansion opportunities as they
  arise, although the economics, strategic implications and other circumstances
  justifying the expansion will be key factors in determining the amount and type
  of resources the Company will commit.
  
  Forward Looking Statements
  
  This report includes certain forward-looking statements that involve risks and
  uncertainties that could cause actual results to differ materially from the
  results discussed herein. Recipients of this report are cautioned to consider
  these risks and uncertainties and to not place undue reliance on these
  forward-looking statements.
  
  PART II - OTHER INFORMATION
  
  Items 1, 2, 3, 4 and 5 were not applicable in the period ended September 30,
  1997.
  
  Item 6.   Exhibits and Reports on Form 8-K
  
              a.    Exhibits:
  
                    11      - Consolidated Earnings per Share Calculation
  
                    27      - Financial Data Schedule *
  
              b.    No reports on Form 8-K were filed during the period for which
                    this Report is filed.
  
  
           * - Filed in electronic form only.
  
                                         14
  <PAGE>
  
       SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
       Registrant has duly caused this Report to be signed on its behalf by the
       undersigned, thereunto duly authorized.
  
       RIGHT MANAGEMENT CONSULTANTS, INC.
  
  
       BY: /S/ G. Lee Bohs                               November 13, 1997
       ----------------------------                     -------------------
       G. Lee Bohs                                              Date
       Chief Financial Officer and
       Principal Accounting Officer (Dual
       signature as duly authorized officer and
       and principal financial officer)
  
                                         15
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 42123}]
metadata_filer: {"company-data": {"conformed-name": "RIGHT MANAGEMENT CONSULTANTS INC", "cik": "0000802806", "assigned-sic": "8742", "irs-number": "232153729", "state-of-incorporation": "PA", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-15539", "film-number": "97721261"}, "business-address": {"street1": "1818 MARKET ST", "street2": "14TH FL", "city": "PHILADELPHIA", "state": "PA", "zip": "19103", "phone": "2159881588"}, "mail-address": {"street1": "1818 MARKET STREET", "street2": "14TH FL", "city": "PHILADELPHIA", "state": "PA", "zip": "19103"}}
text: FORM 10-Q
  
                         SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
  
  (X)      QUARTERLY  REPORT  PURSUANT  TO SECTION 13 OR 15 (d) OF THE  SECURITIES
           EXCHANGE ACT OF 1934
  
           For the quarterly period ended     September 30, 1997
  
                                         OR
  
  ( )      TRANSITION  REPORT  PURSUANT TO SECTION 13 OR 15 (D) OF THE  SECURITIES
           AND EXCHANGE ACT OF 1934
  
           For the transition period from           to
  
                           Commission File Number 0-15539
  
                         RIGHT MANAGEMENT CONSULTANTS, INC.
               (Exact name of registrant as specified in its charter)
  
           Pennsylvania                                   23-2153729
  (State of other jurisdiction of                      (IRS Employer
   incorporation of organization)                       Identification No.)
  
      1818 Market Street, Philadelphia, Pennsylvania                19103
         (Address of principal executive offices)                 (Zip Code)
  
           Registrant's telephone number, including area code: (215) 988-1588
  
           Indicate by check mark whether the registrant: (1) has filed all
           reports required to be filed by Section 13 or 15(d) of the Securities
           Exchange Act of 1934 during the preceding 12 months (or for such
           shorter period that the registrant was required to file such reports),
           and (2) has been subject to such filing requirements for the past 90
           days.
  
                           Yes       X                        No
  
           Indicate the number of shares outstanding of each of the issuer's
           classes of common stock as of October 31, 1997:
  
           Common Stock, $0.01 par value                    6,651,526
           -----------------------------                 ---------------
                       Class                             Number of Shares
  Right Management Consultants, Inc.
                        Condensed Consolidated Balance Sheets
                      (Amounts in Thousands Except Share Data)
  September 30,     December 31,
                                                                                   1997              1996
                                                                               (Unaudited)
                                       Assets
  Current Assets:
  Cash and cash equivalents                                                      $  8,857         $ 18,055
  Accounts receivable, trade, net of allowance for doubtful accounts
      of $645 and $552 in 1997 and 1996, respectively                              22,086           18,878
  Royalties and fees receivable from Affiliates                                     3,063            3,505
  Other current assets                                                              2,203            2,270
                                                                                 --------         --------
         Total current assets                                                      36,209           42,708
  
  Property and equipment, net of accumulated depreciation of $15,845
     and $12,917 in 1997 and 1996, respectively                                    13,167            9,666
  
  Other Assets:
  Intangible assets, net of accumulated amortization of $10,046 and
      $8,525 in 1997 and 1996, respectively                                        29,219           18,724
  Other noncurrent assets                                                           3,034            2,837
                                                                                 --------         --------
         Total Assets                                                            $ 81,629         $ 73,935
                                                                                 ========         ========
  
                        Liabilities and Shareholders' Equity
  Current Liabilities:
  Current portion of long-term debt and other obligations                        $  3,749         $  1,011
  Accounts and commissions payable                                                  4,450            5,536
  Accrued expenses                                                                  5,688            6,951
  Deferred income                                                                   4,293            3,868
                                                                                 --------         --------
         Total current liabilities                                                 18,180           17,366
                                                                                 --------         --------
  
  Long-term debt and other obligations                                              9,639            6,904
                                                                                 --------         --------
  
  Deferred compensation                                                             1,622            1,864
                                                                                 --------         --------
  
  Minority interest in subsidiary                                                   1,416               --
                                                                                 --------         --------
  
  Shareholders' Equity:
  Preferred stock, no par value; 1,000,000 shares authorized; no
      shares issued or outstanding                                                     --               --
  Common stock, $.01 par value; 20,000,000 shares authorized; 7,021,349
      and 6,713,573 shares issued in 1997 and 1996, respectively                       70               67
  Additional paid-in capital                                                       13,956           11,956
  Retained earnings                                                                38,856           36,290
  Cumulative translation adjustment                                                  (214)               5
                                                                                 --------         --------
                                                                                   52,668           48,318
  Less treasury stock, at cost, 380,452 shares and 252,952 shares in 1997
      and 1996, respectively                                                       (1,896)            (517)
                                                                                 --------         --------
         Total shareholders' equity                                                50,772           47,801
                                                                                 --------         --------
         Total Liabilities and Shareholders' Equity                              $ 81,629         $ 73,935
                                                                                 ========         ========
  The accompanying notes are an integral part of these condensed consolidated
                                financial statements.
  
                                         2
  Right Management Consultants, Inc.
                     Condensed Consolidated Statements of Income
          (Dollars and Shares in Thousands Except Earnings per Share Data)
                                     (Unaudited)
  Three Months Ended September 30,
                                                           1997              1996
  Revenue:
  Company office revenue                                 $ 32,039         $ 26,741
  Affiliate royalties                                         785            1,323
                                                         --------         --------
  
  Total revenue                                            32,824           28,064
                                                         --------         --------
  
  Expenses:
  Consultants' compensation                                13,609           11,138
  Office sales and consulting support                       2,051            1,376
  Office administration                                    12,533            9,260
  General sales and administration                          3,079            2,600
                                                         --------         --------
  
  Total expenses                                           31,272           24,374
                                                         --------         --------
  
  Income from operations                                    1,552            3,690
  
  Other income (expense):
  
  Interest income                                             144              160
  Interest expense                                           (224)            (136)
                                                         --------         --------
  
                                                              (80)              24
                                                         --------         --------
  
  Income before income taxes                                1,472            3,714
  
  Provision for income taxes                                  618            1,545
  
  Minority interest in net income of subsidiary               209               --
                                                         --------         --------
  
  Net income                                             $    645         $  2,169
                                                         ========         ========
  
  Earnings per share                                     $   0.10         $   0.32
                                                         ========         ========
  
  Weighted average number of shares outstanding             6,745            6,877
                                                         ========         ========
  The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                         3
  Right Management Consultants, Inc.
                     Condensed Consolidated Statements of Income
          (Dollars and Shares in Thousands Except Earnings per Share Data)
                                     (Unaudited)
  Nine Months Ended September 30,
                                                            1997             1996
  Revenue:
  Company office revenue                                 $ 91,086         $ 89,548
  Affiliate royalties                                       2,610            3,600
                                                         --------         --------
  
  Total revenue                                            93,696           93,148
                                                         --------         --------
  
  Expenses:
  Consultants' compensation                                38,917           35,137
  Office sales and consulting support                       5,164            3,924
  Office administration                                    34,931           31,352
  General sales and administration                          9,327           10,587
  Restructuring costs (Note B)                                630               --
                                                         --------         --------
  
  Total expenses                                           88,969           81,000
                                                         --------         --------
  
  Income from operations                                    4,727           12,148
  
  Other income (expense):
  
  Interest income                                             452              418
  Interest expense                                           (474)            (474)
                                                         --------         --------
  
                                                              (22)             (56)
                                                         --------         --------
  
  Income before income taxes                                4,705           12,092
  
  Provision for income taxes                                1,930            4,917
  
  Minority interest in net income of subsidiary               209               --
                                                         --------         --------
  
  Net income                                             $  2,566         $  7,175
                                                         ========         ========
  
  Earnings per share                                     $   0.38         $   1.07
                                                         ========         ========
  
  Weighted average number of shares outstanding             6,731            6,675
                                                         ========         ========
  4
  Right Management Consultants, Inc.
                   Condensed Consolidated Statements of Cash Flows
                               (Dollars in Thousands)
                                     (Unaudited)
  Nine Months Ended September 30,
                                                                        1997             1996
  Operating Activities:
    Net income                                                       $  2,566         $  7,175
    Adjustments to reconcile net income to net cash
      provided by operating activities:
        Depreciation and amortization                                   4,591            3,597
        Restricted stock compensation                                    (658)             400
        Restructuring costs (Note B)                                      630               --
        Tax benefit from the exercise of stock options                    400            1,919
        Minority interest in net income of subsidiary                     209               --
        Other non-cash items                                             (461)            (169)
        Provision for doubtful accounts                                   225              225
        Changes in operating accounts:
            (Increase) decrease in operating assets                    (1,053)             961
            Decrease in operating liabilities                          (5,964)          (1,230)
                                                                     --------         --------
  
    Net cash provided by operating activities                             485           12,878
                                                                     --------         --------
  
  Investing Activities:
    Purchase of property and equipment                                 (3,657)          (3,243)
    Acquisitions, net of cash acquired and borrowings assumed          (4,268)            (740)
                                                                     --------         --------
  
    Net cash utilized for investing activities                         (7,925)          (3,983)
                                                                     --------         --------
  
  Financing Activities:
    Payment of long-term debt and other obligations                    (1,650)          (3,786)
    Repurchase of common stock                                         (1,379)              --
    Proceeds from stock issuances                                       1,271            1,321
                                                                     --------         --------
  
    Net cash utilized for financing activities                         (1,758)          (2,465)
                                                                     --------         --------
  
  (Decrease) increase in cash and cash equivalents                     (9,198)           6,430
  
  Cash and cash equivalents, beginning of period                       18,055            8,965
                                                                     --------         --------
  
  Cash and cash equivalents, end of period                           $  8,857         $ 15,395
                                                                     ========         ========
  
  Supplemental Disclosures of Cash Flow Information
    Cash paid for:
  
       Interest                                                      $    393         $    389
                                                                     ========         ========
  
       Income taxes                                                  $  2,097         $  3,231
                                                                     ========         ========
  The accompanying notes are an integral part of these condensed
                         consolidated financial statements.
  
                                         5
  RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  
  Basis of Presentation
  
  The accompanying unaudited condensed consolidated financial statements have been
  prepared in accordance with generally accepted accounting principles for interim
  financial information and the instructions to Form 10-Q and Rule 10-01 of
  Regulation S-X. Accordingly, they do not include all of the information and
  footnote disclosures necessary for a fair presentation of consolidated financial
  position, results of operations and cash flows in conformity with generally
  accepted accounting principles. In the opinion of management, all adjustments
  (consisting of normal recurring adjustments) considered necessary for a fair
  presentation have been included. Operating results for the nine months ended
  September 30, 1997 are not necessarily indicative of the results that may be
  expected for the year ending December 31, 1997. For further information, refer
  to the financial statements and footnotes thereto included in the Company's
  Annual Report on Form 10-K for the year ended December 31, 1996.
  
  Principles of Consolidation
  
  The consolidated financial statements include the accounts of Right Management
  Consultants, Inc. and its majority-owned subsidiaries. All significant
  intercompany transactions and balances have been eliminated in consolidation.
  
  Reclassifications
  
  Certain 1996 amounts have been reclassified to conform to the 1997 presentation.
  
  NOTE B - RESTRUCTURING COSTS
  
  During the first quarter 1997, the Company announced a corporate restructuring.
  The restructuring charge of $630,000 ($380,000 or $0.06, net of taxes) was
  primarily for severance payments related to reductions in employees and lease
  termination costs for the closure of several small "satellite" offices with
  limited future economic benefit to the Company. The Company anticipates that all
  payments for severance and office closures will be completed in early 1998.
  
                                         6
  RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE C - ACQUISITIONS
  
  Effective January 1, 1997, the Company acquired the assets and/or the
  outstanding stock of six career transition firms and one search firm for a
  combination of cash and future defined incentive payments. The six career
  transition firms included Nelson, O'Connor & Associates (Phoenix, Arizona),
  Corporate Resource Group (San Francisco, California), Cavendish Partners
  (London, England) and the former St. Louis, Missouri, Knoxville, Tennessee, and
  Richmond, Virginia Affiliates. The search firm acquired was Nelson, O'Connor Cox
  (Tucson, Arizona).
  
  Effective April 1, 1997, the Company acquired the outstanding stock of another
  career transition firm, Chapel Stowell, Inc. (Portland, Oregon).
  
  Effective July 1, 1997, the Company acquired 51% of the outstanding shares of
  the Australia based career management firm, Davidson & Associates, Pty., Ltd
  ("Davidson & Associates"). Davidson & Associates has operations in eleven
  locations throughout Australia, New Zealand, Singapore and Hong Kong. The
  purchase price of this acquisition approximated $6,935,000, including costs of
  acquisition, 85% of which was paid in cash (approximately $5,946,000) and the
  remaining 15% in shares of the Company's common stock (96,577 shares). The
  Company borrowed $5,500,000 from its revolving credit facility in order to
  complete this transaction. As a part of the purchase agreement, the minority
  shareholders of Davidson & Associates have agreed to provide the Company with
  options to acquire the remaining 49% of the outstanding shares of Davidson &
  Associates beginning on July 1, 2000. Additionally, the minority shareholders of
  Davidson & Associates have the right to require the Company to purchase in 10%
  increments the remaining 49% of the outstanding shares of Davidson & Associates
  beginning on July 1, 2000.
  
  Effective August 1, 1997, the Company acquired the business and certain assets
  of a Minneapolis, Minnesota career management firm, Career Dynamics, Inc. The
  purchase price of the acquisition approximated $2,000,000, including costs of
  acquisition, and was funded through borrowings under the Company's revolving
  credit facility. The acquisition also included future defined incentives
  contingent upon the results of the operations in Minnesota subsequent to the
  transaction.
  
  The acquisitions were accounted for under the purchase method. The accompanying
  consolidated financial statements reflect the year to date results from the
  effective date of acquisition for all of the above acquisitions. The aggregate
  purchase price for the acquisitions described above was approximately
  $13,608,000, including the costs of acquisitions. The purchase price exceeded
  the fair value of the assets acquired by $12,733,000.
  
  The pro-forma impact of these acquisitions on results of operations, if any one
  of the acquisitions had been consummated at the beginning of each period
  presented, is immaterial to the consolidated financial statements as a whole and
  has been omitted.
  
                                         7
  RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE D - DEBT
  
  In order to reduce the impact of changes in interest rates on a portion of the
  Company's floating rate debt under its revolving credit facility, the Company
  has entered into three interest rate swap agreements with an aggregate notional
  principal at September 30, 1997 of $10,500,000 and quarterly maturities ranging
  from three to five years. The Company's fixed rates under these interest rate
  swaps range from 6.7% to 7.1%.
  
  The net cash paid or received on interest rate swap agreements is recognized as
  an adjustment to interest expense. The impact of the above interest rate swap
  agreements on interest expense has been immaterial to date.
  
  NOTE E -  SHAREHOLDERS' EQUITY
  
  In March 1997, the Board of Directors (the "Board") approved a stock repurchase
  program under which the Company is authorized to repurchase up to 10% of its
  currently outstanding common stock. Any shares repurchased will be held as
  treasury shares and be available to the Company for use in various benefit plans
  and, when authorized by the Board, for other general corporate purposes. The
  Board has authorized Company management to pursue the repurchase program in open
  market transactions from time-to-time, depending upon market conditions and
  other factors.
  
  As of September 30, 1997, the Company had repurchased 127,500 shares of common
  stock at an aggregate purchase price of $1,379,000.
  
  Stock option activity for the nine month period ended September 30, 1997 is
  summarized as follows:
  
                                                                         Wtd. Avg.
                                                                         Exercise
                                                         Shares            Price
  Outstanding at January 1, 1997                        1,238,295         $10.92
  Granted                                                 210,288          18.21
  Canceled or expired during the period                   (25,125)         13.89
  Exercised during the period                            (183,969)          5.31
                                                        ---------         ------
  Outstanding at September 30, 1997                     1,239,489         $12.93
                                                        =========         ======
  
  Exercise prices for options outstanding as of September 30, 1997 ranged from
  $4.22 to $24.33. The weighted average remaining contractual life of these
  options is approximately 6 years.
  
                                         8
  RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE F - EARNINGS PER SHARE
  
  The Financial Accounting Standards Board has issued Statement of Financial
  Accounting Standards ("SFAS") No. 128, "Earnings per Share." SFAS No. 128
  replaces the presentation of primary earnings per share ("EPS") with a
  presentation of basic EPS. Additionally, SFAS No. 128 requires a dual
  presentation of basic and diluted EPS within the consolidated income statement
  and a reconciliation of the numerator and denominator of the basic EPS
  computation to the numerator and denominator of the diluted EPS calculation.
  SFAS No. 128 is effective for financial statements for periods ending after
  December 15, 1997, with earlier adoption not permitted. Accordingly, the Company
  will adopt SFAS No. 128 for the year ending December 31, 1997.
  
  The following table details the pro forma amounts that would have been reported
  by the Company in both the current and prior year periods had SFAS No. 128 been
  adopted.
  Three Months              Nine Months
                                                               Ended Sept. 30,           Ended Sept. 30,
                                                              1997         1996        1997         1996
  Primary EPS as reported                      $ 0.10       $ 0.32      $ 0.38       $ 1.07
               Effect of SFAS No. 128                           --         0.02        0.01         0.09
                                                            ------       ------      ------       ------
               Basic EPS as restated                        $ 0.10       $ 0.34      $ 0.39       $ 1.16
                                                            ======       ======      ======       ======
  
               Fully diluted EPS as reported                $ 0.10       $ 0.31      $ 0.38       $ 1.07
               Effect of SFAS No. 128                           --         0.01          --           --
                                                            ------       ------      ------       ------
               Diluted EPS as reported                      $ 0.10       $ 0.32      $ 0.38       $ 1.07
                                                            ======       ======      ======       ======
  9
  RIGHT MANAGEMENT CONSULTANTS, INC.
                NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                     (Unaudited)
  
  NOTE G - GEOGRAPHIC SEGMENTS
  
  Summarized operations of each of the Company's geographic segments in the
  aggregate as of September 30, 1997 and 1996 and for the nine month periods then
  ended are as follows:
  (U.S. Dollars in Thousands)
  1997                                U.S.       Canada      Europe    Asia-Pacific  Consolidated
  Identifiable assets               $63,391     $ 6,708     $ 5,889     $   5,641     $81,629
                                    =======     =======     =======     =========     =======
  
  Revenue                           $73,361     $ 7,703     $ 8,882     $   3,750     $93,696
                                    =======     =======     =======     =========     =======
  
  Income from operations            $ 2,187     $ 1,080     $   738     $     722     $ 4,727
                                    =======     =======     =======     =========     =======
  
  Depreciation and amortization     $ 3,914     $   185     $   333     $     159     $ 4,591
                                    =======     =======     =======     =========     =======
  
  Capital expenditures              $ 2,683     $    94     $   678     $     202     $ 3,657
                                    =======     =======     =======     =========     =======
  
  1996
  Identifiable assets               $57,855     $ 6,260     $ 6,002     $      --     $70,117
                                    =======     =======     =======     =========     =======
  
  Revenue                           $78,638     $ 6,361     $ 8,149     $      --     $93,148
                                    =======     =======     =======     =========     =======
  
  Income from operations            $11,568     $    78     $   502     $      --     $12,148
                                    =======     =======     =======     =========     =======
  
  Depreciation and amortization     $ 2,901     $   359     $   337     $      --     $ 3,597
                                    =======     =======     =======     =========     =======
  
  Capital expenditures              $ 3,099     $    59     $    85     $      --     $ 3,243
                                    =======     =======     =======     =========     =======
  10
  PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
  
  Results of Operations
  
  For the three months ended September 30, 1997, revenue generated by Company
  offices increased by 20% or $5,298,000 from the corresponding quarter in 1996.
  This increase is due to $6,122,000 in incremental revenues from the acquisitions
  detailed in Note C to the Condensed Consolidated Financial Statements, partly
  offset by a same office revenue decrease of approximately 3% or $824,000. The
  Company's recent acquisition of Davidson & Associates contributed $3,750,000 of
  the incremental acquisition revenues. The same office revenue decrease was due
  to a seasonal slow down in both the North American and European career
  transition markets, as well as the continued strength of the U.S. economy.
  
  Total European revenues for the third quarter 1997 decreased by 4% or $100,000
  versus the corresponding quarter in 1996 due to a same office revenue decrease
  of 15% or $393,000, partly offset by incremental revenues from one acquisition.
  The strong U.S. dollar also contributed to the revenue decline for the quarter.
  On a constant dollar basis, total European revenues increased by 4%.
  
  On a sequential basis, the third quarter 1997 versus 1996 same office revenue
  decrease of 3% is an improvement from the 11% decrease reported in the second
  quarter 1997 versus 1996.
  
  For the nine months ended September 30, 1997, revenue generated by Company
  offices increased 2% or $1,538,000 from the corresponding period in 1996. This
  increase is due primarily to $10,035,000 in incremental revenues from the
  acquisitions detailed in Note C to the Condensed Consolidated Financial
  Statements, as well as revenue growth within the consulting line of business.
  Offsetting the incremental revenues from acquisitions and revenue growth within
  the consulting line of business was an approximate 10% same office revenue
  decrease. The previously mentioned slow down in the North American career
  transition market was the primary factor behind the year to date same office
  revenue decrease.
  
  For the nine months ended September 30, 1997, total European revenues increased
  by 9% or $736,000 versus the same period in 1996. This increase was due to
  incremental revenues from one acquisition, partly offset by a modest same office
  revenue decrease. As noted for the quarter's results, the strong U.S. dollar
  contributed to the revenue decline for the year to date. On a constant dollar
  basis, total European revenues increased by 15%.
  
                                         11
  PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                      CONTINUED
  
  For the three months ended September 30, 1997, Affiliate royalties decreased 41%
  or $538,000 from the corresponding quarter in 1996. For the nine months ended
  September 30, 1997, Affiliate royalties decreased 28% or $990,000 from the
  corresponding period in 1996. The decreases for the quarter and year-to-date
  1997 are attributable to the aforementioned decline in the North American career
  transition market, as well as the acquisitions of three former Affiliates in the
  first quarter 1997 (see Note C to the Condensed Consolidated Financial
  Statements). Affiliate royalties, on a same office basis, decreased 38% and 24%,
  respectively, from the corresponding periods in 1996.
  
  For the three months ended September 30, 1997, total Company office expenses
  increased 29% or $6,419,000 over the corresponding quarter in 1996. This
  increase is due primarily to approximately $5,914,000 in incremental costs from
  acquisitions. The remaining increase is due to a significant reduction of
  incentive compensation costs in the third quarter of 1996 resulting from a
  sequential drop off in the Company's revenues and operating results to levels
  below targets.
  
  On a sequential basis, same office costs for the third quarter 1997 decreased by
  approximately $685,000 from the second quarter 1997.
  
  For the nine months ended September 30, 1997, total Company office expenses,
  exclusive of restructuring costs (see Note B to the Condensed Consolidated
  Financial Statements), increased 12% or $8,599,000 over the corresponding period
  in 1996. This dollar increase is due to approximately $8,981,000 in incremental
  costs from acquisitions, offset by a reduction of costs in existing Company
  office locations.
  
  Aggregate Company office margins, exclusive of restructuring costs, were 12% and
  13% for the quarter and year-to-date 1997, respectively, versus 19% and 21% for
  both of the same respective periods in 1996. The decrease in margins is
  attributable primarily to the decline in career transition revenues, partly
  offset by improved margins in the consulting line of business, favorable results
  for Davidson & Associates and improved year-to-date results in the European
  operations. For the nine months ended September 30, 1997, European office
  margins approximated 8% versus 6% for the corresponding period in 1996.
  
  For the three months ended September 30, 1997, general sales and administration
  expenses increased by 18% or $479,000 over the corresponding period in 1996.
  This increase is due to a significant reduction of incentive compensation costs
  in the third quarter of 1996 as the Company did not meet internal operating
  targets. Despite the increase, general sales and administration expenses as a
  percentage of total revenues were approximately 9% for the third quarter of both
  years.
  
                                         12
  PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                      CONTINUED
  
  For the nine months ended September 30, 1997, general sales and administration
  expenses decreased by 12% or $1,260,000 from the corresponding period in 1996.
  Due to the Company's decreasing stock price during 1997 and the forfeiture of
  certain awards of common stock, total compensation expense related to restricted
  stock grants included within general sales and administration expenses was
  reduced by approximately $658,000 for the year-to-date 1997. The remaining
  decrease is generally a result of reduced incentive compensation costs as the
  Company's internal targets were not achieved.
  
  The Company's effective tax rate for the three months ended September 30, 1997
  and 1996 was approximately 42%. The Company's effective tax rate for the nine
  months ended September 30, 1997 and 1996 was approximately 41%.
  
  Capital Resources and Liquidity
  
  At September 30, 1997 and December 31, 1996, the Company had cash and cash
  equivalents of $8,857,000 and $18,055,000, respectively. The significant
  decrease in cash and cash equivalents is the result of lower net income, as well
  as payments made for acquisitions and 1996 incentive compensation (see Note C to
  the Condensed Consolidated Financial Statements).
  
  Net cash utilized for investing activities amounted to $7,925,000 and $3,983,000
  for the nine months ended September 30, 1997 and 1996, respectively. The Company
  continues to invest in equipment and technology to meet the needs of its
  operations and enhance operating efficiencies. Additionally, during the first
  nine months of 1997 the Company acquired ten career management firms for a
  combination of cash and future defined incentive payments (see Note C to the
  Condensed Consolidated Financial Statements). The $4,268,000 net cash paid for
  acquisitions on the Condensed Consolidated Statement of Cash Flows is net of
  $7,500,000 in borrowings from the Company's revolving credit facility, as well
  as $850,000 of cash acquired from acquisitions. Additionally, in connection with
  the Davidson & Associates acquisition (see Note C to the Condensed Consolidated
  Financial Statements), the net cash paid for acquisitions on the Condensed
  Consolidated Statement of Cash Flows excludes the value of the issuance of
  96,577 shares which is considered a non-cash investing activity.
  
  Net cash utilized for financing activities amounted to $1,758,000 and $2,465,000
  for the nine months ended September 30, 1997 and 1996, respectively. The net
  cash outlay for 1997 was the result of repayments on the Company's borrowings
  and defined incentives for acquisitions made in previous years, as well as the
  repurchase of common stock (see Note E to the Condensed Consolidated Financial
  Statements), in excess of proceeds from the issuance of stock.
  
                                         13
  PART I - ITEM 2
                  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                         CONDITION AND RESULTS OF OPERATIONS
                                      CONTINUED
  
  During 1996, the Company increased its borrowing capacity to $40,000,000 from
  the previous $15,000,000 level through the execution of its revolving credit
  facility with its two primary lenders. The Company had approximately $27,600,000
  available under the revolving credit facility at September 30, 1997. The Company
  plans to utilize the revolving credit facility to assist in the financing of
  acquisitions as they arise and for other general corporate purposes.
  
  The Company anticipates that its cash and working capital will be sufficient to
  service its existing debt, outstanding commitments and to maintain Company
  operations at current levels for the foreseeable future. The Company will
  continue to consider acquisitions and other expansion opportunities as they
  arise, although the economics, strategic implications and other circumstances
  justifying the expansion will be key factors in determining the amount and type
  of resources the Company will commit.
  
  Forward Looking Statements
  
  This report includes certain forward-looking statements that involve risks and
  uncertainties that could cause actual results to differ materially from the
  results discussed herein. Recipients of this report are cautioned to consider
  these risks and uncertainties and to not place undue reliance on these
  forward-looking statements.
  
  PART II - OTHER INFORMATION
  
  Items 1, 2, 3, 4 and 5 were not applicable in the period ended September 30,
  1997.
  
  Item 6.   Exhibits and Reports on Form 8-K
  
              a.    Exhibits:
  
                    11      - Consolidated Earnings per Share Calculation
  
                    27      - Financial Data Schedule *
  
              b.    No reports on Form 8-K were filed during the period for which
                    this Report is filed.
  
           * - Filed in electronic form only.
  
                                         14
  SIGNATURES
  
       Pursuant to the requirements of the Securities Exchange Act of 1934, the
       Registrant has duly caused this Report to be signed on its behalf by the
       undersigned, thereunto duly authorized.
  
       RIGHT MANAGEMENT CONSULTANTS, INC.
  
       BY: /S/ G. Lee Bohs                               November 13, 1997
       ----------------------------                     -------------------
       G. Lee Bohs                                              Date
       Chief Financial Officer and
       Principal Accounting Officer (Dual
       signature as duly authorized officer and
       and principal financial officer)
  
                                         15