SPR INC, S-1/A, 1997-02-10

SPR INC
S-1/A, 1997-02-10
COMPUTER PROGRAMMING, DATA PROCESSING, ETC.

Previous: GENERAL BEARING CORP, 424B1, 1997-02-10

Next: BAY VIEW SECURITIZATION CORP, 8-K, 1997-02-10

<PAGE> 1

As filed with the Securities and Exchange Commission on February 10, 1997

Registration No. 333-16421
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------

AMENDMENT NO. 3

TO
FORM S-1
REGISTRATION STATEMENT

under
THE SECURITIES ACT OF 1933
------------------
SPR INC.
(Exact name of registrant as specified in its charter)

<TABLE>
<C> <C> <C>
DELAWARE 7370 36-3932665
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code No.) No.)
</TABLE>

2015 SPRING ROAD, SUITE 750, OAK BROOK, ILLINOIS 60521 (630) 990-2040
- --------------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)

ROBERT M. FIGLIULO
PRESIDENT
SPR INC.
2015 SPRING ROAD, SUITE 750, OAK BROOK, ILLINOIS 60521 (630) 990-2040
- --------------------------------------------------------------------------------
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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

Copies to:

<TABLE>
<C> <C>
DONALD E. FIGLIULO CHARLES EVANS GERBER
JOHN E. MCGOVERN, JR. WILLIAM M. HOLZMAN
WILDMAN, HARROLD, ALLEN & DIXON NEAL, GERBER & EISENBERG
225 WEST WACKER DRIVE TWO NORTH LASALLE STREET
CHICAGO, ILLINOIS 60606-1229 CHICAGO, ILLINOIS 60602
(312) 201-2000 (312) 269-8000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE OF THE SECURITIES TO
THE PUBLIC: As soon as practicable after this Registration Statement becomes
effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration number of the earlier effective
registration statement for the same offering. [ ]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration number of the earlier effective registration statement for the same
offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED FEBRUARY 10, 1997

PROSPECTUS

2,700,000 SHARES

SPR LOGO

COMMON STOCK
------------------

Of the 2,700,000 shares of common stock, par value $.01 per share (the
"Common Stock"), offered hereby (the "Offering"), 1,666,666 shares are being
offered by SPR Inc. ("SPR" or the "Company") and 1,033,334 shares are being
offered by certain stockholders (the "Selling Stockholders"). See "Principal and
Selling Stockholders." The Company will not receive any of the proceeds from the
sale of shares of Common Stock by the Selling Stockholders.

Prior to the Offering, there has been no public market for the Common Stock
of the Company. It is currently estimated that the initial public offering price
will be between $13.00 and $15.00 per share. See "Underwriting" for information
relating to the factors to be considered in determining the initial public
offering price. The Common Stock has been approved for listing on the Nasdaq
National Market under the symbol "SPRI," subject to official notice of issuance.
------------------

SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) STOCKHOLDERS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share $ $ $ $
- ------------------------------------------------------------------------------------------------------------------
Total(3) $ $ $ $
- ------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) For information regarding indemnification of the Underwriters, see
"Underwriting."
(2) Before deducting expenses estimated at $800,000, all of which are payable by
the Company.
(3) Certain Selling Stockholders have granted the Underwriters a 30-day option
to purchase up to 405,000 additional shares of Common Stock solely to cover
over-allotments, if any. See "Underwriting." If such option is exercised in
full, the total Price to Public, Underwriting Discounts and Commissions,
Proceeds to Company and Proceeds to Selling Stockholders will be $ ,
$ , $ and $ , respectively. See "Underwriting" and "Principal
and Selling Stockholders."
------------------

The shares of Common Stock are being offered by the several Underwriters
named herein, subject to prior sale, when, as and if accepted by them and
subject to certain conditions. It is expected that certificates for the shares
of Common Stock offered hereby will be available for delivery on or about
March , 1997 at the office of Smith Barney Inc., 333 West 34th Street, New
York, New York 10001.

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

SMITH BARNEY INC. ROBERT W. BAIRD & CO.
INCORPORATED
, 1997
<PAGE> 3

INSIDE FRONT COVER OF PROSPECTUS

The inside front cover is a multicolor graphic and text layout. The following
text appears above the graphics:

"SPR SERVICES

SPR blends three levels of consulting support into five service offerings to
provide a comprehensive solution for maintaining, improving, and transitioning
existing systems. This blend of consulting support enables SPR to design a
customized solution, tailored to meet each client's individual needs."

[Graphics consist of a flow diagram depicting SPR's blend of three levels of
consulting support into five service offerings.]

The following text appears below the graphics:

"SPR delivers these customized solutions through a combination of experienced
people, using proprietary and commercially available tools, following an
established methodology. When applied with their service offerings, this
formula enables SPR to deliver high quality, innovative solutions designed to
help companies derive maximum value from their existing systems."

[The SPR logo inside a triangle containing the words "People," "Tools" and
"Methodology" appears in the lower left corner below a page curl.]

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK
OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN
THE OVER-THE-COUNTER MARKET, OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY
BE DISCONTINUED AT ANY TIME.

<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the financial statements
and related notes thereto appearing elsewhere in this Prospectus. SPR Inc.
("SPR" or the "Company") is a Delaware corporation recently organized in
connection with the mergers into it of SPR Chicago Inc., an Illinois corporation
("SPR Chicago"), Systems & Programming Resources of Tulsa, Inc., an Oklahoma
corporation ("SPR Tulsa"), SPR-Wisconsin, Inc., a Wisconsin corporation ("SPR
Wisconsin"), Systems and Programming Resources, Inc., an Illinois corporation
("Systems Inc."), and Consulting Acquisition, Inc., an Illinois corporation
("Data Flex"). Such mergers are each individually referred to in this Prospectus
as a "Merger" and collectively as the "Mergers." Unless indicated otherwise, the
information contained in this Prospectus: (i) gives retroactive effect to the
Mergers and (ii) assumes that the Underwriters' over-allotment option is not
exercised. Unless otherwise indicated, all references to "SPR" or the "Company"
refer to SPR Inc. after the Mergers or to the constituent corporations in the
Mergers or their respective predecessors, as appropriate. See "Certain
Transactions."

THE COMPANY

SPR has over 23 years of experience in providing information technology
("IT") services to clients in a variety of industries, including financial
services, healthcare, insurance, manufacturing, oil and gas, transportation and
utilities. The Company focuses its marketing efforts on Fortune 1000 companies
and other large organizations which have complex IT operations and significant
IT budgets. Over the past several years, the Company has shifted its focus from
contract programming to strategic planning and project management engagements.
SPR currently provides the following service offerings: (i) General Consulting,
(ii) Systems Re-engineering, (iii) Century Date Compliance, (iv) Systems
Maintenance and Support and (v) Information Delivery Services ("IDS"). Within
each of these service offerings, the Company provides three levels of consulting
support which are distinguished by the degree of responsibility the Company
assumes: strategic planning, project management and implementation. The Company
believes that this breadth of service and support fosters long-term client
relationships, promotes cross-selling opportunities and minimizes the Company's
dependence upon any particular service offering or client.

The Company's proprietary service methodologies, Renovation(SM) and
Renovation2000(SM), and its proprietary software analysis tool, CodeVu(SM),
provide SPR with a disciplined approach to fulfill its engagements.
Renovation(SM) and Renovation2000(SM) enable the Company to deliver its service
offerings through a tested and repeatable format. CodeVu(SM) quickly and
accurately provides information concerning client software portfolios. These
service methodologies coupled with this software analysis tool facilitate the
development of well-defined tasks and timetables for each phase of an engagement
from strategic planning through implementation.

Due to the complex nature of information technology, the rapidly changing
technological environment and the year 2000 problem (the software glitch that
will prevent computers from properly recognizing dates after the year 1999),
many organizations are outsourcing their IT needs. The Company believes this
outsourcing trend will continue to grow because: (i) organizations desire to
focus their energies on their core business functions; (ii) organizations must
address and resolve the year 2000 problem; (iii) IT solutions are becoming
increasingly complex; and (iv) organizations often lack the IT skills necessary
to address their IT needs.

Total expenditures for professional IT services in the United States were
estimated to be $54.1 billion in 1996. The professional IT services market,
consisting of consulting and education, systems integration and development and
systems management services, is expected to grow at a compound annual growth
rate of approximately 14% over the next three years, reaching $79.6 billion by
1999. Large organizations, which make up the Company's primary target market,
were expected to constitute approximately 46% of total expenditures in this
market in 1996. The estimated cost in the United States to correct the year 2000
problem associated with software and databases is expected to be approximately
$130 billion.
3
<PAGE> 5

The Company's objective is to become the leading IT service provider to
both new and existing clients. To achieve this objective, the Company has
pursued, and intends to continue to pursue, the following business and growth
strategies:

- Focus on Project Management. The Company will continue to focus on
increasing its mix of project management and strategic planning
engagements. The Company believes that by providing these value-added
services, it gains a competitive advantage in assessing its clients' needs
and anticipating opportunities to provide additional IT services.

- Attract, Develop and Retain Qualified Technical Consultants. The Company
has implemented a comprehensive entry-level training program for college
graduates to address the industry-wide shortage of qualified technical
consultants. In addition, the Company is developing several other training
programs to further enhance its consultants' careers and improve their
technical skills. SPR believes that these training programs and its
recently established stock option and stock purchase plans will help it to
attract, develop and retain consultants.

- Capitalize on Century Date Compliance Expertise. SPR was an early entrant
in the year 2000 segment of the market, completing its first Century Date
Compliance engagement in 1993. The Company believes that its expertise in
addressing the year 2000 problem will not only result in additional
engagements, but that such engagements also will provide SPR with insight
into its clients' IT environments, resulting in a competitive advantage in
cross-selling additional IT services.

- Deliver Unbiased Service Offerings. The Company uses Renovation(SM),
Renovation2000(SM) and CodeVu(SM) in conjunction with the best available
third-party application software and productivity tools without regard to
specific third-party vendor relationships. The ability to assess client
systems objectively enables the Company to provide its clients with
technologies that are best suited to their individual needs.

- Focus on Leading Technologies. The Company maintains and continues to
build expertise not only in mainframe applications but also in other high
demand technologies, such as Internet/intranet applications, open
computing systems, object oriented solutions and relational database
management systems. The Company's expertise in these areas, together with
its relationships with software product developers and research
institutions, allow SPR to remain on the leading edge of technological
development.

- Leverage Existing Client Base and Expand Client Services. The Company
intends to continue building long-term client relationships by developing
and expanding the services it provides to existing clients in response to
its clients changing IT service needs. For example, in 1995 the Company
began the development of its IDS service offering and in 1996 established
its first Virtual Insourcing Center, which enables the Company to provide
the full range of its service offerings in a Company facility rather than
at its clients' facilities.

SPR's growth strategies have allowed it to capitalize on the growing demand
for IT services. The Company's revenues have increased at a compound annual
growth rate of approximately 37% from 1992 through 1996. From 1995 to 1996, the
Company's revenues increased 42%. More than 70% of the Company's 1996 revenues
were attributable to 40 companies which have been clients for at least the prior
three consecutive years. During 1996, the Company made significant
infrastructure investments, which adversely affected the Company's gross profit
and operating income, in order to satisfy anticipated future demand for the
Company's service offerings. These investments included (i) the development and
implementation of the Company's entry-level training program, (ii) the hiring of
272 IT consultants, 20 project managers, a Chief Financial Officer, and a
General Manager to establish a Texas branch office, (iii) the establishment of,
and initial staffing to support, the IDS service offering, (iv) the leasing of
new office space in Chicago and Wisconsin and (v) the enhancement of the
Company's proprietary service methodologies and proprietary software analysis
tool.
4
<PAGE> 6

THE OFFERING

<TABLE>
<S> <C>
Common Stock Offered Hereby by:
The Company...................................... 1,666,666 shares
The Selling Stockholders......................... 1,033,334 shares
Common Stock to Be Outstanding After the
Offering......................................... 8,000,000 shares(1)
Use of Proceeds.................................... Pay dividends to enable the existing
stockholders to pay income taxes due on S
corporation income through the closing date of
the Offering, pay certain indebtedness, fund
build-out and equipping of an additional Virtual
Insourcing Center, open a Texas branch office,
expand the Company's entry-level recruiting and
training program and for general corporate
purposes. See "Use of Proceeds."
Nasdaq National Market Symbol...................... SPRI
</TABLE>

- -------------------------
(1) Excludes (i) 800,000 shares of Common Stock reserved for issuance upon
exercise of options granted and to be granted pursuant to the Company's
Combined Incentive and Non-statutory Stock Option Plan (of which options to
purchase 442,000 shares of Common Stock are outstanding at an exercise price
of $14.00 per share); and (ii) 500,000 shares reserved for issuance under
the Company's Employee Stock Purchase Plan. See "Management -- Stock Plans,"
"Description of Capital Stock" and Note 11 of Notes to Financial Statements.
5
<PAGE> 7

SUMMARY FINANCIAL DATA

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA(1):
Revenues......................................... $9,122 $11,731 $14,797 $ 22,908 $ 32,511
Gross profit..................................... 2,218 3,393 4,373 7,383 9,224
Selling expenses............................... 743 1,012 1,165 2,141 3,046
Recruiting expenses............................ 290 341 410 777 1,323
Stock-based compensation....................... -- -- 6,510 (2) 27,987 (2) 12,231 (2)
General and administrative expenses............ 1,015 1,230 1,334 1,642 3,742
------ ------- ------- -------- --------
Total costs and expenses......................... 2,048 2,583 9,419 32,547 20,342
------ ------- ------- -------- --------
Operating income (loss).......................... 170 810 (5,046)(2) (25,164)(2) (11,118)(2)
Other income (expense)........................... 27 6 (57) (109) (71)
------ ------- ------- -------- --------
Income (loss) before income
taxes.......................................... 197 816 (5,103)(2) (25,273)(2) (11,189)(2)
Provision for income taxes....................... 15 4 75 21 9
------ ------- ------- -------- --------
Net income (loss), as reported(3)................ $ 182 $ 812 $(5,178)(2) (25,294)(2) (11,198)(2)
====== ======= =======
Pro forma provision for income taxes(3).......... 1,065 408
-------- --------
Pro forma net (loss)(3).......................... $(26,359) $(11,606)
======== ========
Pro forma net (loss) per share(3)(4)............. $ (4.04) $ (1.78)
======== ========
Weighted average common shares outstanding(4).... 6,525,346 6,525,346
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31,
1996
------------
<S> <C>
BALANCE SHEET DATA(1):
Cash...................................................... $ 356
Working capital........................................... 1,194
Total assets.............................................. 7,131
Long-term debt, less current portion...................... 206
Total stockholders' equity................................ 2,507(2)
</TABLE>

- -------------------------
(1) In October 1996, Systems Inc., SPR Chicago, SPR Tulsa, SPR Wisconsin and
Data Flex merged into SPR and, in connection therewith, the stockholders of
such companies received an aggregate of 6,333,134 shares of Common Stock of
SPR. The financial data above has been restated to include the financial
position and results of operations of the respective companies for all
periods presented.

(2) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such 1994 transactions were among
family members within a control group, such transactions have been recorded
in the Company's financial statements as if the stockholders of SPR Chicago
and SPR Wisconsin received non-cash, stock-based compensation during 1994,
1995 and 1996 in an amount equal to the increase in the estimated value of
such companies since 1994. This expense is non-recurring subsequent to
October 31, 1996. Such compensation expense is recorded as stock-based
compensation with the corresponding credit included in additional paid-in
capital. Upon conversion of the Company to a C corporation upon closing of
the Offering, the retained deficit of the Company, which includes the
aggregate stock-based compensation expense, will be reclassified and netted
against additional paid-in capital. Excluding such compensation expense, net
income for 1995 and 1996 on a pro forma basis would have been $1.6 million
and $0.6 million, respectively. See "-- Summary Unaudited Pro Forma
Financial Data" and Note 10 of Notes to Financial Statements.

(3) Prior to the Offering, the Company was an S corporation and was not subject
to Federal and certain state corporate income taxes. The Statement of
Operations Data reflects a pro forma provision for income taxes as if the
Company had been subject to Federal and state corporate income taxes for
1995 and 1996. The pro forma provision for income taxes represents a
combined Federal and state effective tax rate of 40%. The pro forma
provision for income taxes is computed by multiplying the effective tax rate
times the (loss) before income taxes adjusted to eliminate the stock-based
compensation expense and subtracting income taxes previously recorded.

(4) Pro forma net (loss) per share information assumes that 192,012 of the
shares of Common Stock being offered by the Company hereby were outstanding
during the periods presented. This represents the approximate number of
shares of Common Stock which are being offered by the Company (assuming an
initial public offering price of $14.00 per share and after deducting
estimated underwriting discounts and commissions) to fund the payment of a
dividend to enable the stockholders of record prior to the Offering to pay
income taxes related to S corporation income through the closing date of the
Offering (the "Dividend"). The Company currently estimates that the Dividend
will be $2.5 million.
6
<PAGE> 8

SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA

The Summary Unaudited Pro Forma Financial Data are based on the historical
financial statements of the Company, giving effect to the Offering and to the
pro forma adjustments described in the accompanying notes as if the Offering
occurred as of January 1, 1995 in the case of the Statement of Operations Data
and December 31, 1996 in the case of the Balance Sheet Data. The Unaudited Pro
Forma Financial Data are neither necessarily indicative of the results of
operations which would have been achieved had the Offering occurred on January
1, 1995 nor are they necessarily indicative of the results of future operations.
The Unaudited Pro Forma Financial Data should be read in conjunction with the
financial statements of the Company included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
----------------------------
YEARS ENDED DECEMBER 31,
----------------------------
1995 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA) ---- ----
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues.................................................... $22,908 $32,511
Operating income............................................ 2,823(1) 1,113(1)
Net income.................................................. 1,628(2) 625(2)
Earnings per share.......................................... 0.20 .08
Weighted average number of shares outstanding............... 8,000 8,000
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------------
ACTUAL AS ADJUSTED(3)
------ --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash........................................................ $ 356(4) $16,664(4)
Working capital............................................. 1,194(4) 18,755(4)
Total assets................................................ 7,131 22,973
Long-term debt, less current portion........................ 206 35
Total stockholders' equity.................................. 2,507(4)(5) 19,879(4)(5)
</TABLE>

- -------------------------
(1) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such transactions were among family
members within a control group, such transactions have been recorded in the
Company's financial statements as if the stockholders of SPR Chicago and SPR
Wisconsin received non-cash, stock-based compensation during 1994, 1995 and
1996 in an amount equal to the increase in the estimated value of such
companies since 1994. This expense is non-recurring subsequent to October
31, 1996. The Summary Unaudited Pro Forma Financial Data eliminates such
expense from operating income for 1995 and 1996; accordingly, operating
income for such periods was increased by $28.0 million and $12.2 million,
respectively. See Note 10 of Notes to Financial Statements.

(2) Prior to the Offering, the Company was an S corporation and was not subject
to Federal and certain state corporate income taxes. The Statement of
Operations Data reflects a pro forma provision for income taxes as if the
Company had been subject to Federal and state corporate income taxes for all
periods. The pro forma provision for income taxes represents a combined
Federal and state effective tax rate of 40%.

(3) Adjusted to reflect the application of the estimated net proceeds from the
Offering, estimated to be $20.9 million (assuming an initial public offering
price of $14.00 per share). The proceeds from the Offering will be used to
pay the Dividend (see note 4), pay a stockholder note, borrowings under a
line of credit and a term note and for general corporate purposes.

(4) Immediately prior to consummation of the Offering, the Company intends to
declare the Dividend. The Company currently estimates that the Dividend will
be $2.5 million.

(5) Upon conversion of the Company to a C corporation at the closing of the
Offering, the Company will record $1.0 million in estimated deferred income
tax liabilities which will reduce retained earnings and increase
liabilities. Retained deficit of the Company (including the stock-based
compensation expense), after recording the estimated Dividend and deferred
income taxes, will be reclassified and netted against additional paid-in
capital.
7
<PAGE> 9

RISK FACTORS

Prospective purchasers of the Common Stock offered hereby should consider
carefully the risks associated with investing in the Common Stock, including the
principal risk factors set forth below, as well as other information set forth
in this Prospectus.

NEED TO ATTRACT AND RETAIN QUALIFIED TECHNICAL CONSULTANTS

The Company's business involves the delivery of professional services and
is very labor-intensive. The Company's success depends in large part upon its
ability to attract, develop, motivate and retain qualified technical
consultants, particularly project managers and other senior technical personnel.
Qualified technical consultants are in great demand and are likely to remain a
limited resource for the foreseeable future. This demand may enable qualified
technical consultants to command significantly greater compensation than is
currently paid by the Company. There can be no assurance that the Company will
be able to continue to attract and retain a sufficient number of qualified
technical consultants in the future. Historically, the Company has experienced
turnover rates which it believes are consistent with industry norms. As
competition for qualified technical consultants increases, there can be no
assurance that the turnover rate experienced by the Company will not increase.
The Company's inability to hire a sufficient number of qualified technical
consultants, or a significant increase in the Company's consultant turnover
rate, could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business -- Business Strategies."

MANAGEMENT OF GROWTH

The Company's rapid revenue and employee growth has placed, and could
continue to place, significant demands upon its management and other resources.
To manage its growth effectively, the Company will be required to continue to
develop and improve its operational, financial and other internal systems, as
well as its business development capabilities. In addition, the Company's future
success will depend in large part upon its ability to maintain high rates of
consultant utilization, maintain the quality of its services and integrate and
operate the branch offices that were merged into the Company in October 1996.
Moreover, none of the Company's senior management has any experience managing a
public company. The Company's inability to manage its growth and engagements
effectively could have a material adverse effect on the Company's business,
financial condition and results of operations. See "-- Need to Attract and
Retain Qualified Technical Consultants" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations."

RELIANCE ON CENTURY DATE COMPLIANCE ENGAGEMENTS

Over the next few years, the Company expects to derive a majority of its
revenues from Century Date Compliance engagements. Revenues derived by the
Company from Century Date Compliance engagements were approximately $0.6 million
and $9.0 million for 1995 and 1996, respectively. However, market demand for
Century Date Compliance services will likely decrease substantially, and
eventually cease, during and after the year 2000. In addition, the Company's
growth strategy is substantially dependent upon leveraging its Century Date
Compliance expertise to obtain other consulting engagements from its Century
Date Compliance clients. The Company's inability to consistently complete
Century Date Compliance engagements to its clients' satisfaction or to procure
additional consulting engagements from such clients could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

While several software programs have been developed to assist IT service
professionals in making existing systems year 2000-compliant, there is presently
no fully-automated solution (a "silver bullet") to the year 2000 problem. There
can be no assurance that a silver bullet will not be developed. Moreover,
certain companies may elect to replace their existing systems with year
2000-compliant hardware and software, rather than incur substantial cost in
making their existing systems year 2000-compliant. The development of a silver
bullet or decisions by a significant number of companies to replace their
existing systems with year

8
<PAGE> 10

2000-compliant hardware and software could have a material adverse effect on the
Company's business, financial condition and results of operations.

COMPETITION

The highly competitive market for IT services includes a large number of
competitors and is subject to rapid change. The Company believes its primary
competitors include "Big Six" accounting firms, systems consulting and
implementation firms, application software firms, service groups of computer
equipment companies, general management consulting firms and programming
companies. Many of these competitors have significantly greater financial,
technical and marketing resources and greater name recognition than the Company.
In addition, the Company competes with its clients' internal IT personnel. Such
competition may impose additional pricing pressures on the Company. There can be
no assurance that the Company can compete successfully with its existing
competitors or with any new competitors. See "Business -- Competition."

ENGAGEMENT AND CONTRACT RISKS

Many of the Company's engagements involve projects that are critical to the
operations of its clients' businesses. The Company's failure or inability to
complete engagements to its clients' satisfaction could have a material adverse
effect on its clients' operations and could consequently subject the Company to
litigation or damage the Company's reputation, which could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Substantially all of the Company's contracts are terminable by the client
on relatively short notice, with or without cause and without penalty. The
unexpected termination by a client of a significant contract could have a
material adverse effect on the Company's consultant utilization rate which, in
turn, could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company principally bills for its
services on a "time and materials basis;" however, some of the Company's
contracts contain a cap on the amount of fees the Company can charge. In
addition, the Company currently is performing services for several of its
significant clients pursuant to oral agreements or written contracts that are no
longer in effect. In the event of a dispute, the absence of a written and
binding agreement limiting the Company's liability to the client could have a
material adverse effect on the Company's business, financial condition and
results of operations. Some of the Company's contracts give its clients the
right in certain circumstances to hire consultants employed or retained by the
Company, and several clients have, in fact, hired Company consultants in the
past. The loss of one or more project managers or a significant number of
qualified technical consultants to the Company's clients could have a material
adverse effect on the Company's business, financial condition and results of
operations. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

CUSTOMER CONCENTRATION

The Company has derived, and believes that it will continue to derive, a
significant portion of its revenues from a limited number of large clients. In
1995 and 1996, the Company's largest client accounted for approximately 11% and
16% of its revenues, respectively, and its ten largest clients accounted for
approximately 51% and 52% of its revenues, respectively. The volume of work
performed for specific clients varies from year to year. There can be no
assurance that a large client in one year will continue to use the Company's
services in a subsequent year. Furthermore, the Company rarely is the exclusive
provider of IT consulting services to its clients. The loss of any large client
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business -- Client Base."

RISKS OF BRANCH EXPANSION

The Company anticipates future growth through branch expansion, which is
dependent upon a number of factors, including, but not limited to: (i) the
ability to cultivate additional business from existing clients and obtain new
clients; (ii) the ability to identify and hire qualified IT consultants within
both new and existing

9
<PAGE> 11

markets; and (iii) the continued hiring and training of corporate personnel to
open and staff additional branch offices. The Company has not opened a new
branch office since 1979; however, the Company has hired a general manager for
the Texas region and is planning to open a branch office in Texas in 1997. There
can be no assurance that new branch offices will be profitable. See "-- Need to
Attract and Retain Qualified Technical Consultants."

INTELLECTUAL PROPERTY RIGHTS

Software developed by SPR in connection with a client engagement typically
becomes the exclusive property of the client. Although the Company believes that
its services and the software it develops for its clients do not infringe upon
the intellectual property rights of others and that it has all rights necessary
to utilize the intellectual property employed in its business, the Company is
subject to the risk of litigation alleging infringement of third-party
intellectual property rights. The Company typically agrees to indemnify its
clients against such claims. Any such claims could require the Company to spend
significant sums in litigation, pay damages, develop non-infringing intellectual
property or acquire licenses to the intellectual property which is the subject
of asserted infringement.

The Company relies upon a combination of nondisclosure and other
contractual arrangements and trade secret, copyright and trademark laws to
protect its rights, the rights of third parties from whom the Company licenses
intellectual property and the proprietary rights of its clients. The Company
requires all consultants to sign confidentiality agreements and limits
distribution of proprietary information. There can be no assurance, however,
that the steps taken by the Company will be adequate to deter misappropriation
of proprietary information or that the Company will be able to detect
unauthorized use and take appropriate steps to enforce its intellectual property
rights. See "Business -- Intellectual Property Rights."

RELIANCE UPON EXECUTIVE OFFICERS AND KEY EMPLOYEES

The success of the Company is highly dependent upon the efforts and
abilities of its executive officers, particularly Mr. Robert Figliulo, the
Company's President. Although all of its executive officers and certain key
employees will enter into employment agreements with the Company which will
contain noncompetition, nondisclosure and nonsolicitation covenants, such
agreements do not guarantee that these individuals will continue their
employment with the Company. The loss of the services of any of these executive
officers or key employees for any reason could have a material adverse effect
upon the Company's business, financial condition and results of operations. See
"Management -- Employment Agreements."

CONTROL BY PRINCIPAL STOCKHOLDERS

After giving effect to the Offering, members of the Figliulo family, in the
aggregate, Michael Fletcher and Rene Potter will beneficially own approximately
50.5%, 8.1% and 7.7%, respectively, of the outstanding shares of Common Stock.
As a result, such persons collectively will be able to control the outcome of
matters requiring a stockholder vote, including the election of directors. Such
control could preclude any unsolicited acquisition of the Company and,
consequently, adversely affect the market price of the Common Stock. See
"Principal and Selling Stockholders" and "Description of Capital Stock --
Delaware Law and Certain Certificate of Incorporation and By-law Provisions;
Antitakeover Effects."

VARIABILITY OF QUARTERLY OPERATING RESULTS

The Company's revenues and earnings have fluctuated and, in the future, may
fluctuate from quarter to quarter based on such factors as the number, size and
scope of projects in which the Company is engaged, the contractual terms and
degree of completion of such engagements, any delays incurred in connection with
an engagement, consultant utilization rates, the adequacy of provisions for
losses, the accuracy of estimates of resources required to complete ongoing
engagements and general economic conditions. Unanticipated variations in the
number, or progress toward completion, of the Company's engagements or in
consultant utilization rates may cause significant variations in operating
results in any particular quarter and could result in losses for such quarter.
An unanticipated termination of a major engagement, a client's decision not to

10
<PAGE> 12

proceed to the stage of the engagement anticipated by the Company or the
completion during a quarter of several major client engagements could leave the
Company with underutilized consultants, which could have a material adverse
effect on the Company's business, financial condition and results of operations.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

EMPLOYMENT LIABILITY RISKS

The Company generally places its consultants in the workplaces of other
businesses. Risks of such placement include possible claims of errors and
omissions, misuse of client proprietary information, misappropriation of funds,
discrimination and harassment, theft of client property, other criminal activity
or torts and other claims. Although historically the Company has not experienced
any material claims of these types, there can be no assurance that the Company
will not experience such claims in the future. To reduce its exposure, the
Company maintains insurance covering general liability, workers' compensation
claims, errors and omissions and employer practices liability. There can be no
assurance, however, that the Company's insurance will cover all such claims, or
that such insurance coverage will continue to be available economically in
amounts adequate to cover any such liability or that such coverage will
adequately compensate the Company for such liabilities.

RISKS OF LICENSING CENTURY DATE COMPLIANCE METHODOLOGY

The Company has entered into a non-exclusive agreement to license its
Century Date Compliance methodology, Renovation2000(SM), and its proprietary
software analysis tool, CodeVu(SM), to an unaffiliated technical services
company operating in New York and other markets where the Company is not
currently doing business. The Company may in the future enter into similar
licensing agreements with other third parties in specific geographic regions in
which it does not presently conduct business. There can be no assurance that
such licensees will properly utilize the Company's methodology or software
analysis tool. The failure by licensees to adhere strictly to SPR's standards in
utilizing the Renovation2000(SM) methodology or CodeVu(SM) in Century Date
Compliance engagements could subject SPR to litigation and harm SPR's reputation
thereby resulting in a material adverse effect on the Company's business,
financial condition and results of operations.

ABSENCE OF PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to the Offering, there has not been a public market for the Common
Stock and there can be no assurance that an active trading market will develop
or be sustained after the Offering. The initial public offering price for the
Common Stock offered hereby will be determined by negotiations between the
Company and the representatives of the Underwriters, and may not be indicative
of the market price for the Common Stock after the Offering. See "Underwriting"
for a discussion of factors to be considered in determining the initial public
offering price. There can be no assurance that the market price of the Common
Stock will not decline below the initial public offering price. The Company
believes that variations in the Company's results of operations and other
factors, including general economic conditions, may cause the market price of
the Common Stock to fluctuate significantly. The market price for the Common
Stock may also be affected by the Company's ability to meet analysts'
expectations, and any failure to meet such expectations, even if minor, could
have a material adverse effect on the market price of the Common Stock. In
addition, from time to time in recent years, the securities markets have
experienced significant price and volume fluctuations that have often been
unrelated or disproportionate to the operating performance of particular
companies. Following the Offering, sales or the expectation of sales of
substantial amounts of Common Stock in the public market by the Company or its
stockholders also could adversely affect the prevailing market prices for the
Common Stock. See "Underwriting."

IMMEDIATE AND SUBSTANTIAL DILUTION

The assumed initial public offering price is substantially higher than the
pro forma net tangible book value per share of Common Stock. Investors
purchasing shares of Common Stock in the Offering will therefore incur immediate
and substantial dilution of $11.52 per share of Common Stock based on an assumed

11
<PAGE> 13

initial public offering price of $14.00 per share. To the extent outstanding
options to purchase Common Stock are exercised, there will be further dilution.
See "Dilution."

SIGNIFICANT UNALLOCATED NET PROCEEDS

The only specific allocations of the Company's anticipated net proceeds
from the Offering is the payment to existing stockholders of the Dividend;
repayment of certain indebtedness, including a note payable to Eugene Figliulo,
the founder of the Company's predecessor, and bank loans; funding of additional
consultant training; and costs associated with the development and expansion of
off-site service centers (the "Virtual Insourcing Centers"). See "Business --
Growth Strategies -- Further Develop Virtual Insourcing Centers." Accordingly, a
substantial majority of the Company's anticipated net proceeds of the Offering
has not been designated for specific uses. The Board of Directors of the Company
will have broad discretion with respect to the use of such unallocated net
proceeds. See "Use of Proceeds."

ANTI-TAKEOVER PROVISIONS

The Company's Certificate of Incorporation and By-laws and the Delaware
General Corporation Law contain certain provisions that could have the effect of
discouraging or making more difficult the acquisition of the Company by means of
a tender offer, a proxy contest or otherwise, even though such an acquisition
might be economically beneficial to the Company's stockholders. These include
provisions under which (i) only the Chairman of the Board or the President may
call meetings of stockholders, and (ii) stockholders must comply with certain
advance notice procedures to nominate candidates for election as directors of
the Company and to submit proposals for consideration at stockholders' meetings.
The ability of the Board of Directors to issue up to 3,000,000 shares of
preferred stock, in one or more classes or series, and with such powers,
designations, preferences and relative, participating, optional or special
rights, qualifications, limitations or restrictions as may be determined by the
Board of Directors of the Company, also could make an acquisition of the Company
more difficult. In addition, these provisions may make the removal of management
more difficult, even in cases where such removal would be favorable to the
interests of the Company's stockholders. See "-- Control by Principal
Stockholders," "Management -- Directors and Executive Officers" and "Description
of Capital Stock -- Delaware Law and Certain Certificate of Incorporation and
By-law Provisions; Anti-Takeover Effects."

BENEFITS TO EXISTING STOCKHOLDERS

The existing stockholders of the Company will realize substantial benefits
from the Offering, including the creation of a public market for the Common
Stock and an immediate increase in the net tangible book value of their shares
of Common Stock. Moreover, a portion of the Company's net proceeds from the
Offering will be paid to: (i) Eugene Figliulo to pay the outstanding balance due
on an outstanding stock redemption note; and (ii) the existing stockholders to
enable such stockholders to pay income taxes related to S corporation income
through the closing date of the Offering. In addition, all of the existing
stockholders of the Company (except for Robert Figliulo, David Figliulo and
Michael Fletcher) intend to sell an aggregate of 1,033,334 shares of Common
Stock in the Offering (1,438,334 shares if the underwriters' over-allotment
option is exercised in full). The proceeds of such proposed sales (net of
estimated underwriting discounts and commissions) based upon an assumed initial
public offering price of $14.00 per share will significantly exceed the amount
paid for such shares by the Selling Stockholders. Finally, the Company has
granted Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher an
unlimited number of demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock. See "Use of Proceeds," "Dilution,"
"Certain Transactions" and "Principal and Selling Stockholders."

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 8,000,000 shares of
Common Stock outstanding, of which the 2,700,000 shares sold pursuant to the
Offering will be freely transferable without restriction or further registration
under the Securities Act of 1933, as amended (the "Securities Act") (other than
by an "affiliate" of the Company, as defined in the Securities Act), and the
remaining 5,300,000 shares

12
<PAGE> 14

will be "restricted securities" under Rule 144 ("Rule 144") promulgated under
the Securities Act. Holders of the restricted shares will be eligible to sell
such shares pursuant to Rule 144 at prescribed times and subject to the manner
of sale, volume, notice and information restrictions of Rule 144. The Company
has granted Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher
an unlimited number of demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock. In addition, 800,000 shares of
Common Stock are reserved for issuance under the Company's Combined Incentive
and Non-statutory Stock Option Plan (the "Option Plan") and 500,000 shares of
Common Stock are reserved for issuance under the Company's Employee Stock
Purchase Plan. The Company intends to register under the Securities Act all of
the shares covered by the Option Plan and the Employee Stock Purchase Plan,
which shares upon issuance would become freely tradeable without restriction.
Each of (i) the Company, (ii) all of the Company's executive officers and
directors, and (iii) all stockholders of the Company owning Common Stock
immediately prior to the Offering have agreed not to offer, sell, contract to
sell or otherwise dispose of, any shares of Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock, or grant any
options or warrants to purchase Common Stock, except in certain circumstances,
for 180 days after the date of this Prospectus without the prior consent of
Smith Barney Inc., which agreements may be waived by Smith Barney Inc. in its
discretion. None of the 5,300,000 shares of Common Stock which are restricted
securities will be eligible for sale after the expiration of such lock-up
agreements until the applicable holding period under Rule 144 (currently two
years) has expired. Thereafter, all 5,300,000 shares of Common Stock which are
restricted securities will be eligible for sale subject to the provisions of
Rule 144. Following the Offering, sales or the expectation of sales of
substantial amounts of Common Stock in the public market could adversely affect
the prevailing market price for the Common Stock and the Company's ability to
raise additional capital at a price favorable to the Company. See "Shares
Eligible for Future Sale" and "Underwriting."

13
<PAGE> 15

THE COMPANY

The Company's business was founded in 1973 by Eugene Figliulo as Systems
Inc. During 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago, SPR Tulsa, and SPR Wisconsin, respectively. These entities were
organized as S corporations and owned by the executives primarily responsible
for the operations in each of these locations. SPR Chicago, SPR Tulsa, SPR
Wisconsin, Systems Inc. and Data Flex (an affiliated IT services company in a
complementary business) were merged into the Company upon the Company's
formation in October 1996. See "Certain Transactions."

The Company maintains its principal executive offices at 2015 Spring Road,
Oak Brook, Illinois 60521. Its telephone number is (630) 990-2040. The Company's
World Wide Web address is www.sprinc.com.

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 1,666,666 shares of
Common Stock offered by it hereby (after deducting estimated underwriting
discounts and commissions and estimated offering expenses) are estimated to be
approximately $20.9 million, based upon an assumed initial public offering price
of $14.00 per share of Common Stock.

The principal purposes of the Offering are to increase the Company's equity
capital and financial flexibility, create a public market for the Common Stock,
facilitate future access by the Company to the public equity markets, enhance
the Company's ability to use Common Stock as a means of attracting and retaining
key employees and technical staff, and provide working capital to fund the
Company's growth strategies. See "Business -- Growth Strategies" and "Business
- -- Recruiting and Training."

The Company intends to use a portion of its net proceeds from the Offering
to pay existing stockholders of the Company the Dividend in an aggregate amount
of $2.5 million to enable such stockholders to pay Federal and state income
taxes due on S corporation taxable income through the closing date of the
Offering. See "Certain Transactions." In addition, the Company intends to use
approximately $0.6 million of its net proceeds to pay outstanding indebtedness
to Eugene Figliulo and approximately $1.5 million of such proceeds to pay
outstanding indebtedness under a line of credit and term note. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Liquidity and Capital Resources" for information regarding interest rates,
maturities and use of proceeds of indebtedness.

Approximately $1.4 million of the net proceeds will be used to build-out
and equip an additional Virtual Insourcing Center and open a Texas branch
office. See "Business -- Growth Strategies -- Further Develop Virtual Insourcing
Centers" and "Business -- Growth Strategies -- Expand Geographic Presence." As
of December 31, 1996, the Company had not incurred, or made any commitments to
incur, significant capital expenditures with respect to either the additional
Virtual Insourcing Center or the Texas branch office.

The Company intends to use the remaining net proceeds for general corporate
purposes, including the expansion of its entry-level recruiting and training
program. Pending any of the foregoing uses, the Company intends to invest the
net proceeds in short-term, investment grade securities, certificates of deposit
or direct or guaranteed obligations of the United States government. The Company
will not receive any proceeds from shares of Common Stock sold by the Selling
Stockholders.

DIVIDEND POLICY

Except for distributions to stockholders to fund their payments of taxes
due on prior year S corporation income, the Company has not declared or paid any
cash dividends on the Common Stock. After the Offering, except for the Dividend,
the Company expects to retain any future earnings to finance the operation and
expansion of its business and does not anticipate paying any cash dividends on
its Common Stock in the foreseeable future. Any future determination as to the
payment of dividends will depend upon the results of operations, financial
condition, capital expenditure plans and other obligations of the Company and
will be at the sole discretion of the Company's Board of Directors.

14
<PAGE> 16

CAPITALIZATION

The following table sets forth the Company's long-term indebtedness and
capitalization as of December 31, 1996 and as adjusted to give effect to the
sale of 1,666,666 shares of Common Stock offered by the Company (at an assumed
initial public offering price of $14.00 per share) and the application of the
estimated net proceeds therefrom. The information set forth below should be read
in conjunction with the Financial Statements and related Notes thereto contained
elsewhere in this Prospectus and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
----------------------------
ACTUAL AS ADJUSTED
------ -----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
Current debt................................................ $ 2,050 $ 64
======== =======
Long-term debt, less current maturities..................... 206 35
-------- -------
Stockholders' equity:
Preferred Stock, $.01 par value; 3,000,000 shares
authorized; no shares issued and outstanding........... -- --
Common Stock, $.01 par value; 13,000,000 shares
authorized; 6,333,334 shares issued and outstanding
actual; 8,000,000 shares issued and outstanding as
adjusted............................................... 63(1) 80(1)
Additional paid-in capital.................................. 46,736 19,799(2)
Retained deficit............................................ (44,292) --(2)
-------- -------
Total stockholders' equity.................................. 2,507 19,879(2)
-------- -------
Total capitalization...................................... $ 2,713 $19,914
======== =======
</TABLE>

- -------------------------
(1) Excludes 800,000 shares of Common Stock reserved for issuance upon exercise
of options granted or to be granted pursuant to the Option Plan and 500,000
shares of Common Stock reserved for issuance pursuant to the Employee Stock
Purchase Plan. See "Management -- Stock Plans," "Description of Capital
Stock" and Note 11 of Notes to Financial Statements.

(2) Immediately prior to closing of the Offering, the Company intends to declare
the Dividend. The Company currently estimates that the Dividend will be $2.5
million. Upon conversion of the Company to a C corporation at the closing of
the Offering, the Company will record approximately $1.0 million in deferred
income taxes which will reduce retained earnings and increase liabilities.
Retained deficit of the Company (including the stock-based compensation
expense), after recording the estimated Dividend and deferred income tax
liabilities, will be reclassified and netted against additional paid-in
capital in connection with the termination of the Company's S corporation
election.

15
<PAGE> 17

DILUTION

As of December 31, 1996, the Company's net tangible book value was
$2,507,348 or $.40 per share of Common Stock. Net tangible book value per share
represents the Company's total net tangible assets less total liabilities
divided by the number of shares of Common Stock outstanding. Without taking into
account any other changes in net tangible book value after December 31, 1996,
other than to give effect to the Company's receipt of its portion of the
estimated net proceeds of the Offering, at an assumed initial public offering
price of $14.00 per share, the payment of the Dividend and the recording of
deferred taxes of approximately $1,028,000, the pro forma net tangible book
value of the Company on December 31, 1996 would have been $19,879,339 or $2.48
per share. This represents an immediate increase in net tangible book value to
the existing stockholders of approximately $2.64 per share and an immediate
dilution to purchasers of shares of Common Stock in the Offering of $11.52 per
share, as illustrated by the following:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $14.00
Net tangible book value per share as of December 31,
1996................................................... $ .40
Decrease per share attributable to the Dividend and
deferred taxes(1)...................................... (.56)
Increase per share attributable to new investors.......... 2.64
Pro forma net tangible book value per share after the
Offering(2)............................................... 2.48
------
Net tangible book value per share dilution to new
investors................................................. $11.52
======
</TABLE>

- -------------------------
(1) Includes the Dividend of $2.5 million and deferred taxes of $1.0 million to
be recorded upon conversion of the Company from an S corporation to a C
corporation.

(2) Does not reflect 800,000 shares of Common Stock reserved for issuance upon
exercise of options granted or to be granted in the future pursuant to the
Option Plan (of which options to purchase 442,000 shares of Common Stock are
currently outstanding at an exercise price of $14.00 per share).

The following table sets forth, at December 31, 1996, after giving effect
to the Offering, the differences between existing stockholders and new investors
who purchase Common Stock in the Offering at the assumed initial public offering
price of $14.00 per share, with respect to the number of shares purchased from
the Company, the total consideration paid and the average price per share paid:

<TABLE>
<CAPTION>
SHARES PURCHASED(1)(2) TOTAL CONSIDERATION
----------------------- ------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
------ ------- ------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders........... 6,333,334 79.2% $46,799,536(3) 66.7% $ 7.39(3)
New investors................... 1,666,666 20.8 23,333,324 33.3 14.00
--------- ----- ----------- ----
Total...................... 8,000,000 100.0% $70,132,860 100%
========= ===== =========== ====
</TABLE>

- -------------------------
(1) Excludes 800,000 shares of Common Stock reserved for issuance upon exercise
of options granted or to be granted pursuant to the Option Plan (of which
options to purchase 442,000 shares of Common Stock are currently outstanding
at an exercise price of $14.00 per share). To the extent such options are
exercised, there will be further dilution to new investors.

(2) The above table is based on ownership as of December 31, 1996. Sales by
Selling Stockholders in the Offering will reduce the number of shares held
by existing stockholders to 5,300,000 shares or 66.3% of the total number of
shares of Common Stock outstanding after the Offering (61.2% if the
Underwriters' over-allotment option is exercised in full), and will increase
the number of shares held by new investors to 2,700,000 shares or 33.7% of
the total number of shares of Common Stock outstanding after the Offering
(38.8% if the Underwriters' over-allotment option is exercised in full). See
"Principal and Selling Stockholders."

(3) Represents the sum of stated capital and additional paid-in capital, which
includes an aggregate of $46.7 million, or $7.38 per share, of non-cash,
stock-based compensation for 1994, 1995 and 1996.

16
<PAGE> 18

SELECTED FINANCIAL DATA

The following selected financial data should be read in conjunction with
the Financial Statements of the Company and notes thereto. The Statement of
Operations Data and Balance Sheet Data for, and as of, the end of each of the
years in the four year period ended December 31, 1996 are derived from the
audited Financial Statements of the Company. The Statement of Operations Data
and Balance Sheet Data for, and as of, the year ending December 31, 1992, have
been derived from the unaudited financial statements of the Company and in the
opinion of management include all adjustments (consisting of normal and
recurring adjustments) which are necessary to present fairly the results of
operations and financial position of the Company for the period and at the date
presented.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------
1992 1993 1994 1995 1996
---- ---- ---- ---- ----
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:(1)
Revenues........................................ $9,122 $11,731 $14,797 $ 22,908 $ 32,511
Cost of services................................ 6,904 8,338 10,424 15,525 23,287
------ ------- ------- -------- --------
Gross profit.................................... 2,218 3,393 4,373 7,383 9,224
Costs and expenses:
Selling....................................... 743 1,012 1,165 2,141 3,046
Recruiting.................................... 290 341 410 777 1,323
Stock-based compensation...................... -- -- 6,510 (2) 27,987 (2) 12,231 (2)
General and administrative.................... 1,015 1,230 1,334 1,642 3,742
------ ------- ------- -------- --------
Total costs and expenses........................ 2,048 2,583 9,419 32,547 20,342
------ ------- ------- -------- --------
Operating income (loss)......................... 170 810 (5,046)(2) (25,164)(2) (11,118)(2)
Other income (expense).......................... 27 6 (57) (109) (71)
------ ------- ------- -------- --------
Income (loss) before income taxes............... 197 816 (5,103)(2) (25,273)(2) (11,189)(2)
Provision for income taxes...................... 15 4 75 21 9
------ ------- ------- -------- --------
Net income (loss), as reported(3)............... $ 182 $ 812 $(5,178)(2) (25,294)(2) (11,198)(2)
====== ======= ======= ========
Pro forma provision for income taxes(3)......... 1,065 408
-------- --------
Pro forma net (loss)(3)......................... $(26,359) $(11,606)
======== ========
Pro forma net (loss) per share(3)(4)............ $ (4.04) $ (1.78)
======== ========
Weighted average common shares outstanding(4)... 6,525,346 6,525,346
BALANCE SHEET DATA (AT END OF PERIOD)(1):
Cash............................................ $ 298 $ 289 $ 1,083 $ 1,109 $ 356
Working capital................................. 1,098 1,771 1,674 2,370 1,194
Total assets.................................... 1,670 2,418 3,573 5,584 7,131
Long-term debt, less current portion............ -- -- 1,841 704 206
Total stockholders' equity...................... 1,149 1,954 326 2,275 2,507
</TABLE>

- ---------------
(1) In October 1996, Systems Inc., SPR Chicago, SPR Tulsa, SPR Wisconsin and
Data Flex merged into SPR and, in connection therewith, the stockholders of
such companies received an aggregate of 6,333,134 shares of Common Stock of
SPR. The financial data above has been restated to include the financial
position and results of operations of the respective companies for all
periods presented.

17
<PAGE> 19

includes the aggregate stock-based compensation expense, will be
reclassified and netted against additional paid-in capital. Excluding
such compensation expense, net income for 1995 and 1996 on a pro forma
basis would have been $1.6 million, and $0.6 million, respectively. See
"Prospectus Summary -- Summary Unaudited Pro Forma Financial Data" and
Note 10 of Notes to Financial Statements.

(4) Pro forma net (loss) per share information assumes that 192,012 of the
shares of Common Stock being offered by the Company hereby were outstanding
during the periods indicated. This represents the approximate number of
shares of Common Stock which are being offered by the Company (assuming an
initial public offering price of $14.00 per share and after deducting
estimated underwriting discounts and commissions) to fund the payment of the
Dividend. The Company currently estimates that the Dividend will be $2.5
million.

18
<PAGE> 20

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

INTRODUCTION

The following section of the Prospectus, Management's Discussion and
Analysis of Financial Condition and Results of Operations, contains certain
forward-looking statements that involve substantial risks and uncertainties.
"Expect" and similar expressions, as they relate to the Company or its
management, are intended to identify such forward-looking statements. The
Company's actual results, performance or achievements could differ materially
from the results, performance or achievements expressed in, or implied by, these
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed in "Risk Factors."

COMPANY OVERVIEW

The Company was founded in 1973 and derives its revenues from providing IT
consulting services. SPR principally bills its clients on a "time and materials
basis" and revenues are recognized as services are provided. Typically, the
Company bills for its services on a biweekly basis to monitor client
satisfaction and to manage its outstanding accounts receivable balances. The
Company's cost of services consists primarily of consultant compensation and
related expenses. Accordingly, the Company's financial performance is
substantially affected by billing margins (billable hourly rate less consultant
hourly cost) and consultant utilization rates (the ratio of hours billed to
total available hours).

Historically, SPR has maintained its billing margins by increasing its
hourly rates to offset increases in its consulting staff costs. The Company
manages its billing margins by establishing a target billing rate for each
consultant; however, actual billing rates may be higher or lower than the target
billing rates depending upon competitive pressures and market conditions. Hourly
billing rate increases are generally implemented by the Company based upon
market conditions, consultant skill levels and the terms of its engagements.

To date, the Company believes that it has effectively managed its
consultant utilization rates. Fluctuations in consultant utilization rates
result from variations in the amount of unassigned time, which historically has
consisted of training, vacation, sick and holiday time and time spent on
administrative support activities while between engagements. In order to reduce
unassigned time, the Company actively manages the terms of its engagements and
matches available consultants based upon client requirements. In addition, the
number of new consultant training programs and the amount of time it takes to
assign the newly trained consultants vary, thereby affecting the Company's
consultant utilization rates from period to period.

The Company believes that its business and growth strategies are primarily
dependent upon the availability of qualified technical consultants. To address
the shortage of qualified technical consultants, the Company has developed a
six- to eight-week training program targeted at college graduates with degrees
other than computer science. This program specifically focuses on Century Date
Compliance. Advanced course modules are under development and will concentrate
on the Company's other service offerings. The individuals enrolled in the
entry-level training program are paid a salary commensurate with the salary paid
to computer science graduates. Since the commencement of the entry-level
training program on February 15, 1996, 60 individuals have entered and
successfully completed entry-level training. As of January 31, 1997, 53
entry-level trainees had been assigned to client engagements and seven are
expected to be assigned in the near future. The Company incurred approximately
$1,300,000 in expenses attributable to the training program in 1996, all of
which have been expensed as incurred. These expenses, which adversely affected
gross profit and operating income in 1996, include approximately $321,000 of
salaries and benefits attributable to trainees during the period in which they
were enrolled in the training program, $450,000 of salaries and benefits
attributable to these individuals pending their assignment to billable
engagements, $445,000 of other training related expenses and $85,000 of
recruiting expenses. The Company intends to conduct additional training classes
on a regular basis in 1997. Since the costs of those consultants completing the
entry-level training program in 1996 have been fully expensed in 1996, the
Company believes its operating profit should improve, in part, as a result of
this investment. The delay between the time consultants complete the entry-level
training course and the time they are assigned to billable engagements is
expected to significantly decrease as the

19
<PAGE> 21

demand for Century Date Compliance services and the acceptance of entry-level
consultants by the Company's clients grow.

In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such 1994 transactions were among family
members within a control group, such transactions have been recorded in the
Company's financial statements as if the stockholders of SPR Chicago and SPR
Wisconsin received noncash, stock-based compensation during 1994, 1995 and 1996.
This compensation expense was allocated to each such period based upon the
increase in the estimated fair market value of SPR Chicago and SPR Wisconsin
during the respective periods. This expense is non-recurring subsequent to
October 31, 1996. The pro forma financial data eliminates such expense from
operating income for 1995 and 1996; accordingly, pro forma operating income
reflects additional income of $28.0 million and $12.2 million, respectively.
Upon the conversion of the Company to a C corporation at closing of the
Offering, the retained deficit of the Company, which includes the aggregate
stock-based compensation expense, will be reclassified and netted against
additional paid-in capital.

RESULTS OF OPERATIONS

The following table sets forth selected statements of operations data as a
percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Revenues.................................................... 100% 100% 100%
Cost of services............................................ 70 68 72
--- ---- ---
Gross profit........................................... 30 32 28
Costs and expenses:
Selling................................................... 8 9 9
Recruiting................................................ 3 3 4
Stock-based compensation.................................. 44(1) 122(1) 38(1)
General and administrative................................ 9 7 11
--- ---- ---
Total costs and expenses............................... 64 141 62
--- ---- ---
Operating income (loss)..................................... (34)(1) (109)(1) (34)(1)
Provision for income taxes.................................. 1 -- --
--- ---- ---
Net income (loss)........................................... (35)%(1) (109)%(1) (34)%(1)
=== ==== ===
</TABLE>

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

(1) In 1994, Systems Inc. transferred certain assets and liabilities to SPR
Chicago and SPR Wisconsin. Inasmuch as such transactions were among family
members within a control group, such transactions have been recorded in the
Company's financial statements as if the stockholders of SPR Chicago and SPR
Wisconsin received non-cash, stock-based compensation during 1994, 1995 and
1996, in an amount equal to the increase in the estimated value of such
companies since 1994. This expense is non-recurring subsequent to October
31, 1996. The Summary Unaudited Pro Forma Financial Data eliminates such
expense from operating income for the year ended December 31, 1995 and 1996;
accordingly, operating income for such periods was increased by $28.0
million, and $12.2 million, respectively. See Note 10 of Notes to Financial
Statements.

1996 COMPARED TO 1995

Revenues. Revenues increased 42% to $32.5 million in 1996 from $22.9
million in 1995. This increase was primarily the result of an increased number
of engagements for both new and existing clients. A higher proportion of these
engagements were for strategic planning and assessment for Century Date
Compliance engagements, which yield higher billing rates. Revenues from Century
Date Compliance engagements increased to $9.0 million in 1996 from $0.6 million
in 1995.

20
<PAGE> 22

Gross Profit. Gross profit consists of revenues less cost of services,
which includes consultant salaries, benefits and travel expenses. Gross profit
increased 25% to $9.2 million in 1996 from $7.4 million in 1995. Gross profit as
a percentage of revenues decreased to 28% in 1996 from 32% in 1995. The decrease
in gross margin was primarily attributable to salaries and benefits of trainees
enrolled in the entry-level training program, and the subsequent delay in the
assignment of these individuals to billable engagements. This resulted in an
increase in expenses of approximately $0.8 million without any increase in
revenues. In addition, the Company hired 20 project managers (an increase of
200% from 1995) to satisfy anticipated demand for the Company's services. The
Company's operating income for the year ended December 31, 1996 was adversely
affected by the large number of project managers hired during such period and
the amount of time these project managers devoted to enhancing the Company's
proprietary methodologies and performing marketing and administrative
activities. The Company believes that operating income should improve as these
project managers devote more time to billable engagements.

Selling Expenses. Selling expenses include the salaries, benefits,
commissions, bonuses, travel, entertainment and other direct costs associated
with the Company's direct sales force. Selling expenses increased 42% to $3.0
million in 1996 from $2.1 million in 1995. This increase was primarily the
result of increased commissions attributable to the 42% increase in sales over
1995. The Company's selling expenses, as a percentage of revenues, were 9% in
1996 and 1995.

Recruiting Expenses. Recruiting expenses consist of costs related to hiring
new personnel, which include the salaries, benefits, bonuses and other direct
costs of the in-house recruiters, consultant relocation fees, recruiters' travel
expenses and advertising costs. The Company hired 292 consultants during 1996
compared to 254 in 1995. Recruiting expenses increased 70% to $1.3 million in
1996 from $0.8 million in 1995. The Company employed on average 4 more
recruiters in 1996 than in 1995 to handle the increased hiring activity. As a
result of such additions, total recruiting costs per hire increased to
approximately $4,500 in 1996 from approximately $3,100 in 1995.

Stock-based Compensation Expense. Stock-based compensation expense consists
of non-cash expense resulting from the financial statement treatment of the 1994
transfers by Systems Inc. of certain of its assets and liabilities to SPR
Chicago and SPR Wisconsin. The stock-based compensation expense was allocated to
each period based upon the increase in the estimated fair market value of SPR
Chicago and SPR Wisconsin. The increase in the estimated fair market value of
SPR Chicago and SPR Wisconsin for the periods presented was based primarily upon
SPR Chicago's and SPR Wisconsin's revenue growth over such periods. The expense
is non-recurring subsequent to October 31, 1996. Stock-based compensation
expense allocated to 1996 was $12.2 million compared to $28.0 million allocated
to 1995.

General and Administrative Expenses. General and administrative expenses
include salaries and benefits of management and support staff, leased facilities
costs, training, travel expenses related to general and administrative matters,
outside professional fees, depreciation and all other corporate costs. General
and administrative expenses increased 128% to $3.7 million in 1996 from $1.6
million in 1995. This increase was primarily attributable to hiring eight
additional employees, including a Chief Financial Officer, a General Manager to
establish a Texas branch office, a Director of Human Resources, increased rent
relating to new office space in Chicago and Wisconsin, increased depreciation,
training costs associated primarily with outside instructors and initial
staffing of the IDS business unit, including the reclassification of certain
employee salaries from cost of services and selling expenses to reflect the
change in responsibilities of these employees.

1995 COMPARED TO 1994

Revenues. Revenues increased 55% to $22.9 million in 1995 from $14.8
million in 1994. The increase was primarily the result of an increased demand
for the Company's services from both new and existing clients and a continuing
shift from contract programming to project management engagements yielding
higher billing rates. Revenues from Century Date Compliance engagements
increased to $0.6 million in 1995 from an immaterial amount in 1994.

21
<PAGE> 23

Gross Profit. Gross profit increased 69% to $7.4 million in 1995 from $4.4
million in 1994 and, as a percentage of revenues, increased to 32% of revenues
in 1995 from 30% in 1994. This increase resulted from higher billing rates
without commensurate increases in consultant hourly costs resulting from the
shift from contract programming to project management and the completion of two
out-of-town engagements in 1994 in which per diem expenses were paid to
consultants but not passed through to clients. Out-of-town expenses, such as
travel expenses, generally are passed through to the Company's clients; however,
in the case of these two engagements, the Company agreed to bear such expenses
and recorded this expense as cost of services in 1994.

Selling Expenses. Selling expenses increased 84% to $2.1 million in 1995
from $1.2 million in 1994. This increase was primarily the result of increased
commissions due to a 55% increase in sales in 1995 over 1994. In addition, the
Company hired four additional salespersons in 1995.

Recruiting Expenses. Recruiting expenses increased 89% to $0.8 million in
1995 from $0.4 million in 1994. This increase was the result of hiring seven
additional recruiters to expand hiring activity required by the increased demand
for the Company's service offerings. The Company hired 254 consultants in 1995
compared to 168 in 1994. As a result of hiring the additional recruiters, total
recruiting costs per hire increased to approximately $3,100 in 1995 from
approximately $2,400 in 1994.

Stock-based Compensation Expense. Stock-based compensation expense
allocated to 1995 was $28.0 million compared to $6.5 million allocated to 1994.

General and Administrative Expenses. General and administrative expenses
increased 23% to $1.6 million in 1995 from $1.3 million in 1994. This increase
was primarily due to management salary and bonus increases, the hiring of a
Director of Human Resources, four general office staff employees and an increase
in depreciation. General and administrative expenses as a percentage of revenues
decreased to 7% in 1995 from 9% in 1994 as a result of the rapid growth in
revenues.

UNAUDITED QUARTERLY RESULTS

The following tables set forth certain unaudited quarterly data for the
periods shown:
<TABLE>
<CAPTION>
1994 QUARTER ENDED 1995 QUARTER ENDED
------------------------------------- -------------------------------------
MAR. 31 JUNE 30 SEP. 30 DEC. 31 MAR. 31 JUNE 30 SEP. 30 DEC. 31
------- ------- ------- ------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues............. $3,513 $3,733 $3,828 $3,723 $4,474 $5,341 $6,302 $6,791
Gross profit......... 990 1,090 1,225 1,068 1,390 1,678 2,104 2,211

<CAPTION>
1996 QUARTER ENDED
-------------------------------------
MAR. 31 JUNE 30 SEP. 30 DEC. 31
------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues............. $7,443 $7,644 $8,360 $9,064
Gross profit......... 2,273 2,159 2,603 2,189
</TABLE>

Operating results fluctuate based upon the timing of service offering
expansion activities, the hiring and training of consultants, the initiation and
completion of engagements, the timing of corporate expenditures and the number
of billable days in a quarter.

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its growth principally through cash flows from
operations. The Company's primary source of liquidity is the collection of its
accounts receivable. Accounts receivable have grown as the Company's operations
have grown. Receivables decreased to 43 days of revenues at December 31, 1996
from 45 days of revenues at December 31, 1995. The Company's ability to reduce
significantly the aging of its outstanding receivables is limited because of a
continuing general trend by clients to slow their payment of invoices.
Specifically, one significant client slowed its payments from approximately 10
days during 1995 to over 40 days in 1996. The Company established a revised
payment plan with this client, effective January 1997, providing for payment
within 10 days of the invoice date. The Company continues to work with other
clients to attempt to shorten receivable cycles on a case-by-case basis.

Cash flow provided by operating activities, primarily to fund the growth in
accounts receivable, totaled $0.7 million, $1.6 million and $1.3 million for the
years ended December 31, 1996, 1995, and 1994, respectively. Cash (used in) the
Company's investing activities, primarily to fund capital expenditures, totaled

22
<PAGE> 24

($0.9 million), ($0.1 million) and ($0.2 million) for the years ended December
31, 1996, 1995, and 1994, respectively. Net cash (used in) financing activities
consisting primarily of payments on a note payable to Eugene Figliulo and
dividend distributions to stockholders to fund their payment of taxes due on S
corporation income totaled ($0.5 million), ($1.5 million) and ($0.4 million) for
the years ended December 31, 1996, 1995 and 1994, respectively.

The Company periodically has supplemented cash generated by operations with
a term loan and short-term borrowings under lines of credit. The proceeds from
the Company's $0.3 million term loan funded furniture and equipment purchases
for the Company's Chicago facility. The note matures on December 31, 2000, bears
interest at 9% per annum, with principal and interest payable monthly, and is
secured by certain accounts receivable and other assets. As of December 31,
1996, the term note had an outstanding balance of $0.2 million. The Company
intends to pay the term note with part of the net proceeds from the Offering.

Due to the significant growth the Company has experienced, two lines of
credit were established in 1996. These lines of credit provide for maximum
borrowings of $2.5 million and are limited based upon a percentage of eligible
accounts receivable. On December 31, 1996 there was $1.3 million outstanding on
the lines. Interest rates on the lines of credit are at each of the respective
bank's prime rate and are collateralized by certain assets including accounts
receivable. One agreement, which provides for maximum borrowings of $2.0
million, expires in May 1997. The other agreement, which provides for maximum
borrowings of $0.5 million, has no expiration date.

The Company believes that cash flow from operations, the net proceeds of
the Offering and available borrowings will be sufficient to meet its operating
needs and capital expenditures for the foreseeable future.

23
<PAGE> 25

BUSINESS

COMPANY OVERVIEW

SPR has over 23 years of experience in providing IT services to clients in
a variety of industries, including financial services, healthcare, insurance,
manufacturing, oil and gas, transportation and utilities. The Company focuses
its marketing efforts on Fortune 1000 companies and other large organizations
which have complex IT operations and significant IT budgets. SPR's objective is
to become the leading IT services provider to both new and existing clients.
Over the past several years, the Company has shifted its focus from contract
programming to strategic planning and project management engagements. SPR
currently provides the following service offerings: (i) General Consulting, (ii)
Systems Re-engineering, (iii) Century Date Compliance, (iv) Systems Maintenance
and Support and (v) Information Delivery Services. Within each of these service
offerings, the Company provides three levels of consulting support which are
distinguished by the degree of responsibility the Company assumes: strategic
planning, project management and implementation. The Company believes that this
breadth of service and support fosters long-term client relationships, promotes
cross-selling opportunities and minimizes the Company's dependence upon any
particular service offering or client.

The Company currently has three branch offices located in Chicago,
Milwaukee and Tulsa and 405 IT consulting professionals, including 40 project
managers and 29 independent contractors. The number of consultants employed or
retained by the Company as of December 31, 1996 was 38% greater than at the end
of 1995. The Company has made, and intends to continue to make, significant
investments in its systems infrastructure, recruiting organization, training
programs and marketing initiatives in an effort to sustain growth. SPR intends
to leverage these investments, as well as its operating expertise, by opening
additional branch offices. The Company recently hired a General Manager to work
with clients in Texas, where it plans to open a branch office in 1997.

SPR has capitalized on the growing demand for IT services. The Company's
revenues have increased at a compound annual growth rate of approximately 37%
from 1992 through 1996. From 1995 to 1996, the Company's revenues increased 42%.
More than 70% of the Company's revenues in 1996 were attributable to 40
companies which have been clients for at least the prior three consecutive
years.

INDUSTRY OVERVIEW

Dataquest Incorporated estimated total expenditures for professional IT
services in the United States were $54.1 billion in 1996. The professional IT
services market, consisting of consulting and education, systems integration and
development and systems management services, is expected to grow at a compound
annual growth rate of approximately 14% over the next three years, reaching
$79.6 billion by 1999. According to International Data Corporation, large
organizations, which make up the Company's primary target market, were expected
to account for approximately 46% of total expenditures in this market in 1996.

The Company's experience is that many of these organizations are finding it
increasingly difficult and costly to internally maintain their existing systems.
Management believes that over 75% of existing mainframe and mid-range systems
will still be in operation seven to ten years from now as businesses will
continue to require massive data storage capabilities and tremendous processing
power, which are most efficiently provided by mainframe technology. As providers
of IT services focus more on the client/server segment of the market, however,
fewer professionals possess the skills necessary to support and maintain
existing mainframe and mid-range systems. The Company believes these factors
provide it with a substantial growth opportunity within the IT services
industry.

In addition, the Company believes that clients will continue to maintain
and improve their existing systems because: (i) existing systems represent an
enormous investment which may prove too risky and expensive to completely
replace; (ii) mainframe computing is increasingly being utilized in new ways as
Internet/intranet technologies develop; (iii) existing systems are critical to
the functioning of clients' businesses as they contain vital business
information needed to build replacement systems; and (iv) regardless

24
<PAGE> 26

of which front-end computing platform is utilized, clients still need to access
data resident in mainframe computers.

The Company also is capitalizing on the substantial growth opportunity
created by the year 2000 problem, the software glitch that will prevent
computers from properly recognizing dates after the year 1999. Coding 19YY as YY
eliminated two characters from each date reference thereby preserving
substantial amounts of disk storage and memory. A date shown as YY/MM/DD
provides many calculation options within a system, such as age, interest
computations, inventory, materials planning, shelf life, shipping dates and
billing. The problem with this programming format is that in the year 2000, when
YY=00, none of the calculations will work properly. If corrections are not made
prior to January 1, 2000, computer systems may fail which could cause businesses
to stop functioning properly. This abbreviated date-coding format is prevalent
in core, mission-critical systems, which comprise millions of lines of computer
code in existing systems. The data used and generated by these systems are
heavily integrated into multiple files and databases. This data integration
typically results in thousands of interfaces, each of which must be analyzed,
changed and tested to correct the problem, while minimizing the impact on
ongoing operations. Capers Jones estimates the cost in the United States to
correct the year 2000 problem associated with software and databases to be $130
billion. In addition, Gartner Group, Inc. projects that by the end of 1997 only
20% of all systems in the world will be year 2000-compliant, and only 50% of
such systems will be year 2000-compliant by the end of 1999.

BUSINESS STRATEGIES

FOCUS ON PROJECT MANAGEMENT TO DELIVER VALUE-ADDED IT SOLUTIONS. In recent
years, the Company has shifted its focus from contract programming to project
management and strategic planning engagements such as Century Date Compliance,
Systems Re-engineering and IDS. The Company believes that by providing such
value-added services it develops in-depth knowledge of its clients' existing
systems and gains a competitive advantage in assessing its clients' needs with
respect to emerging technologies and providing additional IT services.

ATTRACT, DEVELOP AND RETAIN QUALIFIED TECHNICAL CONSULTANTS. The Company
currently employs 15 full-time recruiters: six in Chicago, five in Tulsa and
four in Milwaukee. Over the past 23 years, the Company has developed and refined
an internal recruiting database which facilitates rapid identification of
consultant candidates based upon skill and geographic location. To address the
shortage of qualified technical consultants, the Company is developing a
three-year training program. This program, targeted at college graduates with
degrees other than computer science, begins with a six- to eight-week
entry-level course specifically focused on Century Date Compliance. In addition,
the Company is developing several other training programs to enable its
consultants to enhance their careers and to improve their technical skills. See
"-- Recruiting and Training." To help retain experienced consultants, the
Company has established comprehensive employee welfare plans and recently
implemented the Option Plan and the Employee Stock Purchase Plan. See
"Management -- Stock Plans."

DELIVER UNBIASED SERVICE OFFERINGS UTILIZING DISCIPLINED METHODOLOGIES. The
Company works closely with its clients' IT personnel from the strategic planning
phase through the completion of an engagement. To increase productivity and
efficiency, the Company has developed specific proprietary service
methodologies, Renovation(SM) and Renovation2000(SM), and a proprietary software
analysis tool, CodeVu(SM). See "--Proprietary Service Methodologies and Software
Analysis Tool." In implementing its methodologies, the Company utilizes the best
available third-party application software and productivity tools without regard
to specific third-party vendor relationships, thereby avoiding the bias
resulting from promoting third-party products. The Company is capable,
therefore, of offering its clients an objective assessment of the advantages and
disadvantages of the latest packaged software applications, platforms, operating
systems and productivity tools.

FOCUS ON LEADING TECHNOLOGIES. The Company maintains and continues to build
expertise not only in mainframe applications but also in other high demand
technologies, such as Internet/intranet applications,

25
<PAGE> 27

open computing systems, object oriented solutions and relational database
management systems. SPR has developed, and intends to continue developing,
relationships with software product developers and research institutions to
remain on the leading edge of technological development and to provide its
clients with technologies that are best suited to their individual needs.

GROWTH STRATEGIES

Historically, the Company has grown by developing new service offerings and
expanding its client base. The Company may also pursue growth through selected
geographic branch expansion and strategic acquisitions. Management believes that
its strategies have positioned the Company to achieve continued growth in
revenues and earnings. Key elements of the Company's growth strategies include
the following:

CAPITALIZE ON CENTURY DATE COMPLIANCE EXPERTISE. SPR was an early entrant
into the year 2000 segment of the market, completing its first Century Date
Compliance engagement in 1993. The Company has either completed or is in the
process of completing 25 Century Date Compliance assessments. Based upon such
assessments, the Company has been retained to implement 15 of its proposed
Century Date Compliance solutions and has successfully completed implementation
of five such solutions. The Company expects that its expertise in this industry
segment will result in additional Century Date Compliance engagements as the
year 2000 approaches. To date, the Company has found that many of its clients
request the Company not only to evaluate their Century Date Compliance needs,
but also to assess functional and technical quality in their application
portfolios and develop strategies for improvement. As a result of its Century
Date Compliance engagements, SPR expects to be strategically positioned to
provide additional IT services to clients who have already entrusted their core,
mission-critical systems to SPR.

LEVERAGE EXISTING CLIENT BASE. The Company intends to continue building
long-term client relationships. Its record of customer satisfaction and expanded
service offerings have contributed to the Company's ability to increase the
revenues generated from existing clients. The Company derived more than 70% of
its revenues in 1996 from 40 clients to which it had provided IT services in at
least the prior three consecutive years. The Company intends to further
penetrate its existing client base by providing additional service offerings.

DEVELOP AND EXPAND CLIENT SERVICES. The Company believes there are
substantial opportunities for increasing revenues by developing and expanding
services offered to existing and prospective clients. In response to client
needs, SPR implemented its IDS service offering in the third quarter of 1995 and
established its first Virtual Insourcing Center in the third quarter of 1996.
IDS was introduced to provide end-users access to data locked within existing
systems. By incorporating technologies such as data warehousing, on-line
analytical processing ("OLAP"), data mining and the Internet/intranet, IDS helps
bridge the gap between modern technologies and existing systems. The Company's
Virtual Insourcing Centers augment its Systems Maintenance and Support service
offering and are logical extensions of the Company's Systems Re-engineering,
Century Date Compliance and General Consulting service offerings. See "-- Growth
Strategies -- Further Develop Virtual Insourcing Centers" and "-- Service
Offerings."

EXPAND GEOGRAPHIC PRESENCE. Geographic expansion will be driven primarily
by the growing need to service existing clients' divisions or affiliates in new
geographic locations such as Texas. The Company has hired a General Manager for
the Texas region and anticipates opening a Texas branch in 1997. The Company
also may pursue strategic acquisitions either to expand its geographic presence
or to complement its existing service offerings.

FURTHER DEVELOP VIRTUAL INSOURCING CENTERS. In order to capitalize on the
corporate trend towards outsourcing, the Company intends to continue developing
Virtual Insourcing Centers. Equipped with a variety of computer hardware,
software and networking technologies and systems, these centers enable the
Company to provide the full range of its service offerings in a Company facility
rather than at its clients' facilities. The Virtual Insourcing Centers also
enable the Company to assume off-site project management responsibilities and to
complete Century Date Compliance and Systems Re-engineering and Systems
Maintenance and Support engagements without interrupting its clients'
businesses. In addition, Virtual Insourcing Centers allow the Company to
implement the testing phases of its Renovation(SM) and Renovation2000(SM)
methodologies seven days a week, rather than only on weekends when clients are
not utilizing their systems.

26
<PAGE> 28

SERVICE OFFERINGS

Since its inception, the Company has provided technical personnel to
augment its clients' internal IT departments. Over the past several years,
however, the Company has focused its efforts on providing higher-end service
offerings. The Company's current service offerings include: (i) General
Consulting; (ii) Systems Re-engineering; (iii) Century Date Compliance; (iv)
Systems Maintenance and Support; and (v) IDS. The Company offers each of its
five service offerings either independently or as part of a comprehensive
solution and performs these services on a "time and materials" basis. Within
each of its service offerings, the Company provides three levels of consulting
support which are distinguished by the degree of responsibility the Company
assumes: strategic planning, project management and implementation. The amount
of responsibility assumed by the Company generally depends upon a client's
in-house capabilities and desire to outsource IT functions. Based upon client
needs, SPR can provide strategic planning, project management or implementation
either at its clients' facilities or off-site at SPR's Virtual Insourcing
Centers. See "-- Growth Strategies -- Further Develop Virtual Insourcing
Centers." SPR employs proven proprietary service methodologies and software
analysis tools to deliver these services. See "-- Proprietary Service
Methodologies and Software Analysis Tool."

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Strategic Project
Planning Management Implementation
| | |
| | |
__________________________________________________________________

Service Offerings
__________________________________________________________________
| | | | |
| | | | |
__________________________________________________________________
Systems Information
General Systems Century Date Maintenance Delivery
Consulting Re-engineering Compliance and Support Services
__________________________________________________________________
</TABLE>

GENERAL CONSULTING. General Consulting consists of providing technical
personnel with expertise across numerous computing platforms to augment clients'
internal IT departments. These services are provided on an as-needed basis and
cover a broad range of assignments including contract programming,
client-managed software development and maintenance engagements.

SYSTEMS RE-ENGINEERING. Systems Re-engineering consists of software
portfolio analysis and assessment, code stabilization, code modularization,
language upgrades or conversions, business specification extraction and system
documentation. The Company re-engineers existing systems to create more
manageable and functional applications and transitions existing systems to
distributed client/server and networking systems. This service offering allows
the Company's clients to leverage their investments in existing systems through
analysis, improvement, redesign and reuse of applications.

CENTURY DATE COMPLIANCE. Century Date Compliance consists of retrofitting
existing systems to address the date-coding problem that will be caused by the
year 2000. Century Date Compliance services include high-level organizational
assessment of a client's software portfolio and organizational readiness,
engagement planning and management and implementation. See "-- Industry
Overview."

27
<PAGE> 29

SYSTEMS MAINTENANCE AND SUPPORT. Systems Maintenance and Support consists
of providing the management, systems maintenance and support of all or part of
clients' existing IT applications. Using proprietary and third-party service
methodologies and tools, the Company provides transition planning, engagement
management, program maintenance and testing, production support and system
improvements.

INFORMATION DELIVERY SERVICES. IDS consists of accessing, analyzing and
managing data which currently resides in existing systems. The Company uses its
expertise with existing systems and emerging technologies to provide its clients
with the ability to retrieve and utilize data resident in existing systems which
would otherwise be inaccessible. Services provided within IDS include
information harvesting, information analysis and information publishing, which
incorporate technologies such as OLAP and the Internet/intranet.

PROPRIETARY SERVICE METHODOLOGIES AND SOFTWARE ANALYSIS TOOL

The Company's proprietary service methodologies, Renovation(SM) and
Renovation2000(SM), and its proprietary software analysis tool, CodeVu(SM),
provide SPR with a disciplined approach to fulfill its engagements.
Renovation(SM) and Renovation2000(SM) enable the Company to deliver its service
offerings through a tested and repeatable format. CodeVu(SM) quickly and
accurately provides information concerning client software portfolios. These
service methodologies coupled with the software analysis tool facilitate the
development of well-defined tasks and timetables for each phase of an engagement
from strategic planning through implementation.

RENOVATION(SM). Renovation(SM) was first used by the Company in 1988 for
Systems Re-engineering engagements. The methodology employs a four phase
approach: assessment, improvement, transformation and preservation. In the
assessment phase, the system is analyzed for architectural deficiencies and a
strategy is developed for correcting these deficiencies and transforming the
existing architecture. In the improvement phase, commercially available tools
and internally developed techniques are applied to implement the strategy
developed in the assessment phase. In the transformation phase, the newly
re-engineered system is transformed into a new architectural paradigm. In the
preservation phase, quality assurance procedures are developed. These procedures
are designed to help prevent the degradation of the system after the Systems Re-
engineering process is complete, thereby protecting the client's investment in
its existing systems.

RENOVATION2000(SM). Renovation2000(SM) is SPR's methodology for Century
Date Compliance engagements. This methodology employs a repeatable process
which, in conjunction with the best available third-party application software
and productivity tools, analyzes, locates and retrofits all programs and data
affected by the absence of a century date field to permit processing of dates
after 1999. This methodology enables the Company to capture information allowing
the refinement of the process and the preparation of estimates and schedules
throughout the engagement.

CODEVU(SM). CodeVu(SM), which runs on mainframe and personal computing
platforms, analyzes source code and provides quantitative information at the
program and system level. CodeVu(SM) provides insight regarding the technical
quality of the source code, identifies programs that are the most costly to
maintain and represent the highest risk and identifies and locates potential
problems hidden within the code. This tool has been used successfully by the
Company in a large number of engagements including Systems Re-engineering,
Century Date Compliance and Systems Maintenance and Support. CodeVu(SM) is often
integrated into client environments to assist with the maintenance and
preservation of source code.

MARKETING AND SALES

SPR marketing representatives are assigned to a limited number of accounts
in order to develop an in-depth understanding of each client's individual needs
and to build long-term client relationships. These representatives are
responsible for providing highly responsive service and ensuring that the
Company's service offerings achieve client objectives. In many instances, a
portion of SPR's marketing activity is carried out by senior Company executives.

The Company employs a variety of business development and marketing
techniques to communicate directly with current and prospective clients,
including (i) various print and direct mail advertisements,

28
<PAGE> 30

(ii) participation in print and live interviews, roundtable discussions and
seminars, and (iii) a World Wide Web site (www.sprinc.com). In addition, the
Company believes that its President and Chairman is recognized as an expert
concerning the year 2000 problem. He has participated, often with other service
providers, research organizations and productivity tool and hardware companies,
in print, television and live interviews and seminars concerning this problem.
The Company believes these activities promote greater client awareness and
enhance the SPR brand name.

CLIENT BASE

The Company serves clients in a diverse range of industries thereby
mitigating cyclical effects of any one industry or market. The Company derives
an additional level of diversification from certain of its clients. Different
operating divisions of a given client may utilize any one or several services
offered by SPR, which helps mitigate the risk of customer concentration. During
1996, SPR's ten largest clients accounted for approximately 52% of the Company's
revenues and Allstate Insurance Company accounted for approximately 16% of its
revenues.

The following table shows selected clients, categorized by industry group,
for which the Company provided services in 1996. Revenues derived from any
particular client engagement vary from year to year. The Company derived an
aggregate of approximately $18.4 million of revenues in 1996 from the clients
listed below, representing approximately 57% of the Company's total revenues for
the year and 45% and 41% for 1995 and 1994, respectively.

FINANCIAL SERVICES
Comdisco, Inc.
First Data Corporation Oil Card Services
Firstar Information Services Corporation
Stein Roe & Farnham Incorporated
Trans Union

INSURANCE
Allstate Insurance Company
Blue Cross Blue Shield of the Rochester Area
CUNA Mutual Group
Kemper National Insurance
The Lincoln National Life Insurance Company
Viking Insurance Company of Wisconsin
Wausau Insurance

OIL & GAS
Chevron Information Technology Company
Citgo Petroleum Corporation
MAPCO
Oxy USA Inc.

HEALTHCARE
Baxter Healthcare Corporation
G E Medical Systems
G.D. Searle & Co.

MANUFACTURING
Case Corporation
Dowell Schlumberger Company
Nalco Chemical Company
Navistar International Transportation Corp.
The Williams Companies
Cessna Aircraft Company

TRANSPORTATION
Chicago Transit Authority
General Electric Railcar Services Corporation
Sabre Group Holdings, Inc.

OTHER INDUSTRIES
Kraft Foods
Land's End
Manpower International Incorporated
The Peoples Gas, Light and Coke Company
Sears, Roebuck and Co.
Spiegel, Inc.
State of Wisconsin
Sun Company Inc.
United Video, Inc.
WorldCom

29
<PAGE> 31

EMPLOYEES

As of December 31, 1996, the Company had 405 IT consulting professionals,
of whom 376 were employees and 29 were independent contractors. Of these IT
consulting professionals, 40 were project managers. As of such date, the Company
had 425 employees: 218, 127 and 80 in Chicago, Tulsa and Milwaukee,
respectively.

The Company has three categories of IT consultants: salaried employees,
associate employees and independent contractors. Salaried employees are
full-time employees of the Company and are eligible for all benefits offered by
the Company. Associate employees are eligible for the same benefits offered to
salaried employees but are paid on an hourly basis and, as such, are not
entitled to paid time off in the form of sick days, personal days or vacation.
Approximately 78% of the Company's IT consultants are salaried employees and 15%
are associate employees. Independent contractors are not employees of the
Company, but are paid on an hourly basis and are not entitled to any benefits
offered to Company employees. Approximately 7% of the Company's IT consultants
are independent contractors.

The Company is not a party to any collective bargaining agreements and
considers its relationships with its employees to be good.

RECRUITING AND TRAINING

The Company employs 15 full time recruiters, including three recruiting
managers, who are responsible for recruiting and establishing relationships with
qualified technical personnel. Technical personnel meeting the Company's
standards are added to a computerized database. Recruiting managers maintain
regular contact with technical personnel, monitor their availability and changes
in skill levels and update the database, which has been maintained for over 23
years. See "Risk Factors -- Need to Attract and Retain Qualified Technical
Consultants."

In the first quarter of 1996, the Company implemented an entry-level
training program to address the current shortage of available technical
consultants for its Century Date Compliance engagements. The Company actively
recruits college graduates with degrees other than computer science, such as
music, mathematics and philosophy. Based upon its recent experience with the
training program, the Company believes such individuals have the aptitude to
develop the requisite systems and programming skills. The Company enrolls these
individuals in an intensive six- to eight-week entry-level training course. Upon
completion of training, the Company places these individuals on Century Date
Compliance engagements, where they work under the supervision of experienced
consultants. The Company enters into employment agreements with these
individuals, whereby the consultants agree to reimburse the Company for some or
all of the cost of their training if they leave the Company within four years.
Since the commencement of this entry-level training program on February 15,
1996, 60 individuals have entered and successfully completed training. The
Company intends to conduct additional training classes on a regular basis
throughout 1997. Advanced course modules are under development and will
concentrate on the Company's other service offerings, such as Systems
Re-engineering and IDS.

COMPETITION

The market for IT professional services is intensely competitive on local
and national levels, and the Company competes frequently with a variety of
companies for both the same clients and qualified technical consultants. These
companies include: "Big Six" accounting firms, systems consulting and
implementation firms, application software firms, service groups of computer
equipment companies, general management consulting firms and programming
companies. The Company considers large organizations with complex IT needs to be
among its primary clients. Within a given market, there are a limited number of
such potential clients, some of which have designated only certain IT
professional services companies as approved providers of IT professional
services. Primary competitive factors for obtaining and retaining clients
include price, quality of services, technical expertise and responsiveness to
client needs. The primary competitive factors in attracting and retaining
qualified candidates as consultants are competitive compensation arrangements
and consistent exposure to high quality and varied engagements.

30
<PAGE> 32

Several of the Company's competitors are substantially larger than the
Company and have greater financial and other resources. Many of such competitors
have also been in business longer than the Company and have significantly
greater name recognition throughout the United States, including the geographic
areas in which the Company operates and into which it may expand. In addition,
such competitors are able to meet a broader range of a client's IT consulting
needs and serve a broader geographic range than the Company, which permits such
competitors to better serve national accounts. Although the Company believes
that it competes, and will continue to compete, favorably with existing and
future competitors, there can be no assurance that the Company will continue to
do so. See "Risk Factors -- Competition" and "Risk Factors -- Need to Attract
and Retain Qualified Technical Consultants."

INTELLECTUAL PROPERTY RIGHTS

Software developed by SPR in connection with a client engagement typically
becomes the exclusive property of the client. The Company relies upon a
combination of nondisclosure and other contractual arrangements and trade
secret, copyright and trademark laws to protect its proprietary rights, the
rights of third parties from whom the Company licenses intellectual property and
the proprietary rights of its clients. The Company enters into confidentiality
agreements with its consultants in an effort to prevent the distribution of
proprietary information. See "Risk Factors -- Intellectual Property Rights."

SPR(SM), Renovation(SM), Renovation2000(SM), CodeVu(SM) and the SPR logo
are service marks of the Company. The Company holds no patents or registered
copyrights, and has no present intention of registering any copyright or filing
any patent applications. See "-- Propriety Service Methodologies and Software
Analysis Tool."

PROPERTY

SPR leases its principal executive offices, which are located at 2015
Spring Road, Oak Brook, Illinois 60521, and also leases facilities in Tulsa,
Oklahoma and Milwaukee, Wisconsin. These leases expire on January 21, 2002,
December 31, 2000 and May 31, 2001, respectively. The Company's principal
executive offices contain a Virtual Insourcing Center. The Company also leases
space in Oak Brook, Illinois to house an additional Virtual Insourcing Center.
This lease expires on September 30, 2002. The Company believes it has adequate
space to conduct its current business. The Company anticipates, however, that
additional space will be required as business expands but believes that it will
be able to obtain suitable space as needed. See Note 5 of Notes to Financial
Statements.

LEGAL PROCEEDINGS

The Company is not involved in any material legal proceedings.

31
<PAGE> 33

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The directors, executive officers and managers of the Company, and their
ages and positions as of February 1, 1997, are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Executive Officers and Directors
Robert M. Figliulo................... 42 President and Chairman of the Board of
Directors
Michael J. Fletcher.................. 41 Executive Vice President, General Manager
--Tulsa and Director
David A. Figliulo.................... 36 Executive Vice President and Director
Stephen T. Gambill................... 46 Chief Financial Officer
Ronald L. Taylor(1).................. 53 Director
Sydnor W. Thrift, Jr.(2)............. 67 Director
David P. Yeager(1)(2)................ 43 Director
Managers
Rene M. Potter....................... 40 Marketing Manager
Patrick D. Sloan..................... 36 General Manager -- Milwaukee
Vincent Chapa III.................... 41 General Manager -- Texas
</TABLE>

- -------------------------
(1) Member of the Audit Committee of the Board of Directors.

(2) Member of the Compensation Committee of the Board of Directors.

Directors hold office for one year and until their successors are elected
and qualified. Executive officers of the Company are appointed by, and serve at
the direction of, the Board of Directors. The directors, executive officers and
managers listed below have held their positions with SPR listed in the above
table since October 31, 1996 and have held the positions described below with
the Company's predecessors for the periods indicated.

Robert M. Figliulo served as President of SPR Chicago since January 1994.
Since joining the Company in May 1976, Mr. Figliulo has held numerous positions,
including Programmer, Analyst, Account Manager, General Manager of both the
Tulsa and Chicago offices and Vice President of Marketing. Mr. Figliulo received
a Masters in Business Administration from the University of Chicago in 1987. Mr.
Figliulo is the brother of David Figliulo and the son of Eugene Figliulo.

Michael J. Fletcher served as President of SPR Tulsa since September 1994.
Mr. Fletcher joined SPR in 1986 as a Recruiter in the Chicago office and since
that time has held a variety of positions in both the Tulsa and Chicago offices
including Branch Manager of the Tulsa office, Field Support Representative and
Technical Manager. Prior to joining SPR, Mr. Fletcher worked in the staffing
support and personnel recruiting industry.

David A. Figliulo served as Vice President of SPR Chicago since January
1994. Since joining the Company in July 1989, Mr. Figliulo has served as an
Account Manager and as the Vice President of Sales in the Company's Chicago
office. Prior to joining the Company, Mr. Figliulo worked as an Account Manager
for Baxter Healthcare, an international pharmaceutical company, in the Oxygen
Systems Division and was recognized as the division's top salesman in the United
States in 1987, 1988 and 1989. Mr. Figliulo is the brother of Robert Figliulo
and the son of Eugene Figliulo.

Stephen T. Gambill served as Chief Financial Officer of SPR Chicago since
July 1996. From 1982 through July 1996, Mr. Gambill, a certified public
accountant, held various financial management positions within Natural Gas
Pipeline Company of America, a large natural gas pipeline, and most recently
served as its Director of Accounting. Prior to 1982, Mr. Gambill held various
auditing positions with the public accounting

32
<PAGE> 34

firms of Coopers and Lybrand and Deloitte, Haskins & Sells. Mr. Gambill received
a Masters in Business Administration degree from the University of Chicago in
1987.

Ronald L. Taylor has served since 1987 as a director, President and Chief
Operating Officer of DeVry, Inc., one of the largest publicly-owned,
degree-granting, higher education companies in North America. Mr. Taylor
co-founded Keller Graduate School of Management and was, from 1973 to 1987, its
President and Chief Operating Officer. Mr. Taylor received a Masters in Business
Administration degree from Stanford University in 1971.

Sydnor W. Thrift, Jr. has served as Director of Player Development for the
Baltimore Orioles professional baseball team since November 1994. From November
1991 through October 1994, Mr. Thrift served as the Assistant General Manager
for the Chicago Cubs professional baseball team. From January 1991 through
October 1991, Mr. Thrift served as a consultant to three professional baseball
teams: the San Francisco Giants, the Los Angeles Dodgers and the New York Mets.

David P. Yeager has served as Vice Chairman of the Board of Directors of
Hub Group, Inc., the largest intermodal marketing company in the United States,
since January 1992. Mr. Yeager has also served as Chief Executive Officer of Hub
Group, Inc. since March 1995 and was President of Hub Group, Inc. from October
1985 through December 1991. Mr. Yeager received a Masters in Business
Administration degree from the University of Chicago in 1987.

Rene M. Potter served as Vice President of SPR Tulsa since September 1994.
Since joining the Company in June 1985, Ms. Potter has held numerous positions,
including Recruiter, Marketing Manager and Account Manager in the Company's
Tulsa office. Prior to joining the Company, Ms. Potter worked as a Senior
Recruiter for Computer Dynamics, a technical recruiting company, and as a Senior
Technical Recruiter for Management Recruiters, a technical and management
recruiting company, and managed her own contingency search firm in Houston,
Texas.

Patrick D. Sloan served as General Manager of SPR Wisconsin since November
1996. Since joining the Company in February 1986, Mr. Sloan has held numerous
positions in both the Chicago and Milwaukee offices, including Field Support
Representative, Account Manager, Manager of Central Resources, Manager of
Technology Services and Director of Technical Resources. Prior to joining SPR,
Mr. Sloan served as Assistant Branch Manager for TEC, a Chicago-based data
processing placement firm.

Vincent Chapa III was hired in September 1996 to serve as the General
Manager of the Texas branch office which the Company plans to open in 1997. From
January 1995 through July 1996, Mr. Chapa served as Vice President of Sales for
Sterling Software, an international software development company. From October
1992 through January 1995, Mr. Chapa served as Manager of Latin American Sales
for Uniface Corporation, a software development company. From February 1990
through October 1992, Mr. Chapa served as Regional Manager for Legent
Corporation, an international software development company.

BOARD COMMITTEES

In October 1996, the Board of Directors established a Compensation
Committee consisting of Messrs. Thrift and Yeager and an Audit Committee
consisting of Messrs. Taylor and Yeager. The Compensation Committee makes
recommendations to the Board of Directors concerning compensation of the
Company's directors, officers and employees. The Compensation Committee also
oversees and administers the Employee Stock Purchase Plan and the Option Plan.
The Audit Committee reviews the results and scope of audits and other services
provided by the Company's independent auditors and monitors and reviews the
Company's financial policies and internal control procedures.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Prior to the Mergers, none of SPR Chicago, SPR Tulsa or SPR Wisconsin had a
compensation committee or any other committee of their respective boards of
directors performing similar functions.

33
<PAGE> 35

Decisions concerning compensation of executive officers were made by the boards
of directors of each of the respective companies, subject to certain
limitations, such as maximum compensation thresholds, imposed by Systems Inc.
See "Certain Transactions." Mr. Robert Figliulo and Mr. David Figliulo, former
executive officers and directors of SPR Chicago, determined their 1996
compensation. Mr. Fletcher and Ms. Potter, former executive officers and
directors of SPR Tulsa, determined their 1996 compensation. Mr. John Figliulo,
the sole officer and director of SPR Wisconsin, determined his 1996
compensation.

DIRECTOR COMPENSATION

Directors who are not employees of the Company receive $1,000 for each
board meeting attended and $500 for each committee meeting attended on a date
other than a date on which the board meets and are reimbursed for their
reasonable out-of-pocket expenses incurred in attending board and committee
meetings. These directors are also entitled to receive stock options under the
Option Plan for serving on the Board of Directors. See "Management -- Stock
Plans." Employee directors do not receive additional compensation for serving on
the Board of Directors.

EXECUTIVE COMPENSATION

Summary Compensation Table

The following table sets forth certain information with respect to the
annual and long-term compensation of the Company's President and the other two
executive officers who earned in excess of $100,000 in salary and bonus for the
year ended December 31, 1996 (the "Named Executive Officers").

<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------- ALL OTHER
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION
--------------------------- ------ ----- ------------
<S> <C> <C> <C>
Robert M. Figliulo.......................................... $140,000 $104,694 $6,121(1)
President and Chairman of the Board
of Directors
Michael J. Fletcher......................................... 108,039 93,273 6,164(2)
Executive Vice President, General Manager-Tulsa and
Director
David A. Figliulo........................................... 100,000 63,290 9,499(3)
Executive Vice President and Director
</TABLE>

- -------------------------
(1) Represents (i) $5,621 of automobile lease payments made by the Company and
(ii) $500 in matching payments under the Company's 401(k) plan.

(2) Represents (i) $5,664 of automobile lease payments made by the Company and
(ii) $500 in matching payments under the Company's 401(k) plan.

(3) Represents (i) $8,999 of automobile lease payments made by the Company and
(ii) $500 in matching payments under the Company's 401(k) plan.

Option Grants

On December 31, 1996, the Company granted stock options to purchase 442,000
shares of Common Stock to certain employees (other than the Named Executive
Officers) and outside directors at an exercise price of $14.00 per share, of
which options to purchase 30,000 shares of Common Stock are presently
exercisable.

EMPLOYMENT AGREEMENTS

Prior to the closing date of the Offering, the Company intends to enter
into substantially identical employment agreements with Robert Figliulo, David
Figliulo, Michael Fletcher, Rene Potter, Stephen Gambill, Pat Sloan and Vincent
Chapa. The agreements will provide that upon termination of employment by the
Company, other than for Cause (as defined in the agreements), death or
retirement, the Company shall

34
<PAGE> 36

pay the executive an amount equal to no more than the executive's annual base
compensation in effect at the time of termination. The agreements will also
provide that in the event of a Change in Control (as defined in the agreements)
and the occurrence of certain events, and to the extent deductible under then
applicable tax laws, the Company shall pay the executive a payment equal to the
sum of (i) the executive's most recent base annual compensation in effect at the
date of the Change in Control, plus (ii) the cash value of the insurance
protection (including dependent coverage) then in effect with respect to the
Company's health insurance plan, based upon the cost of such insurance to the
Company for a 12-month period following the Change in Control date. The
agreements will also contain noncompetition, nonsolicitation and nondisclosure
covenants.

STOCK PLANS

Employee Stock Purchase Plan. The Company has reserved an aggregate of
500,000 shares of Common Stock for issuance under the Company's Employee Stock
Purchase Plan (the "Purchase Plan"). The Purchase Plan is intended to qualify
under Section 423 of the Internal Revenue Code of 1986, as amended (the "Code"),
and will permit eligible employees of the Company to purchase Common Stock
through payroll deductions of up to 20% of their total cash compensation;
provided that employees may be prohibited from purchasing more than $25,000
worth of stock in any calendar year. The Purchase Plan has two six-month
offering periods, beginning on January 1 and July 1 of each year, with the first
offering period commencing on the date of this Prospectus. The purchase price of
Common Stock purchased under the Purchase Plan shall be the lesser of (i) 85% of
the fair market value of the Common Stock (as calculated pursuant to the
Purchase Plan) on the first day of an offering period or (ii) 85% of the fair
market value of the Common Stock on the last day of an offering period. The
Purchase Plan is administered by the Compensation Committee of the Board of
Directors. The Board of Directors is authorized to amend or terminate the
Purchase Plan at any time. However, the Board of Directors may not, without
stockholder approval, modify the Purchase Plan if stockholder approval of the
amendment is required for the Purchase Plan to continue to comply with the
requirements of Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), or Section 423 of the Code.

Combined Incentive and Non-statutory Stock Option Plan. The Company has
reserved an aggregate of 800,000 shares of Common Stock for issuance under the
Option Plan, which may be granted to employees, officers and directors of the
Company. The Option Plan is administered by the Compensation Committee of the
Board of Directors. The Compensation Committee provides for awards of
Non-statutory Stock Options ("NQSOs") and Incentive Stock Options ("ISOs") to
purchase shares of Common Stock and stock appreciation rights ("SARs"), provided
that any director who is not an employee of the Company may not be awarded an
ISO. The Option Plan limits the aggregate fair market value of the shares of
Common Stock with respect to which ISOs are exercisable for the first time in
any calendar year to $100,000. No such annual limitation applies to NQSO grants
under the Option Plan.

The exercise price for options and SARs may be paid: (i) in cash; (ii) by
surrendering shares already owned by the optionee; or (iii) if the Compensation
Committee so determines, by instructing a broker to sell enough of the
optionee's exercised shares to deliver to the Company sufficient sales proceeds
to pay the exercise price. The exercise price per share of Common Stock may not
be less than 85% (100% in the case of an ISO) of the fair market value of the
Common Stock (as calculated pursuant to the Option Plan) on the date the stock
option is granted. The base value of an SAR will equal not less than 85% of the
market value of a share of Common Stock on the grant date. Option agreements
covering options and SARs to be granted under the Option Plan will generally
provide that such options and SARs will be exercisable within fifteen years from
the date of grant (ten years in the case of ISOs) and will generally vest in
annual installments as determined by the Compensation Committee. In the case of
any eligible employee who owns or is deemed to own stock possessing more than
10% of the total combined voting power of all classes of stock of the Company,
the exercise price of any ISOs granted under the Option Plan may not be less
than 110% of the fair market value of the Common Stock on the date of grant and
the exercise period may not exceed five years from the date of grant.

The Board of Directors can terminate or amend the Option Plan at any time,
except that no such action generally will be able to adversely affect any right
or obligation regarding any awards previously made under the Option Plan without
the consent of the recipient. In addition, no amendment may be effective without
the prior approval of stockholders, if such approval is required for the Option
Plan to continue to comply with applicable regulations of the Code and the
Securities and Exchange Commission (the "Commission"). In the event of any

35
<PAGE> 37

changes in the capital structure of the Company, such as a stock dividend or
stock split, the Board of Directors must make equitable adjustments to
outstanding unexercised awards and to the provisions of the Option Plan to
reflect any increase or decrease in the number of issued shares of Common Stock.
If the Company becomes a party to a merger, reorganization, liquidation or
similar transaction, the Board of Directors may make such arrangements it deems
advisable regarding outstanding awards, such as substituting new awards for
outstanding awards, assuming outstanding awards or terminating or paying for
outstanding awards.

Options to purchase 442,000 shares of Common Stock at an exercise price of
$14.00 per share have been granted under the Option Plan, of which options to
purchase 30,000 shares of Common Stock are presently exercisable.

36
<PAGE> 38

CERTAIN TRANSACTIONS

The Company's business was started in 1973 by Systems Inc., which was
founded by Eugene Figliulo. By 1993, all the stock of Systems Inc. was owned by
Eugene Figliulo, his eight children and a nephew of Eugene Figliulo.

During 1994, 1995 and 1996, the Company made distributions of $80,955,
$744,559 and $800,663, respectively, to its stockholders to enable them to pay
income taxes attributable to S corporation income of the Company for such
periods.

In 1992 and 1993, Systems Inc. and Data Flex made loans to Eugene Figliulo
in the original principal amounts of $589,770 and $100,000, respectively. Such
loans are evidenced by separate unsecured promissory notes and bear interest at
6% per annum. As of December 31, 1996, the Systems Inc. note was paid in full
and the entire unpaid principal balance plus accrued interest due on the Data
Flex note was outstanding. The Data Flex note plus accrued interest is expected
to be paid with a portion of the proceeds of this Offering payable to Mr.
Figliulo.

In 1995 and 1996, SPR Chicago made two unsecured loans to Robert Figliulo
in the principal amounts of $39,500 and $4,385, respectively. These loans are
evidenced by separate demand promissory notes and bear interest at 7% per annum.
As of December 31, 1996, $44,745 including accrued interest was outstanding on
these notes. In 1997, the Company made an unsecured loan to Robert Figliulo in
the principal amount of $80,000. This loan is evidenced by a demand promissory
note and bears interest at 7% per annum. As of February 4, 1997, the entire
unpaid principal balance plus accrued interest is outstanding on this note.

During 1994, Systems Inc. transferred certain of its assets and liabilities
in Chicago, Tulsa and Milwaukee to three S corporations organized by the
executives primarily responsible for operations in each of those respective
locations. SPR Chicago, all of whose stock was owned by Robert Figliulo and
David Figliulo, acquired the Chicago operations. SPR Tulsa, all of whose stock
was owned by Michael Fletcher and Rene Potter (neither of whom is related to the
Figliulo family), acquired the Tulsa operations. SPR Wisconsin, all of whose
stock was owned by John Figliulo, acquired the Milwaukee operations. Systems
Inc. retained the trademark "SPR" and licensed it to each of these new
corporations for use in their respective geographic areas. Also in 1994, Systems
Inc. redeemed all of Eugene Figliulo's stock for an installment note in the
principal amount of $2,881,266, bearing interest at a rate of 6.75% per annum (
the "Redemption Note"). As of December 31, 1996, $641,266 was outstanding under
the Redemption Note, all of which is expected to be paid with a portion of the
net proceeds of the Offering received by the Company.

In connection with the transfers of assets and liabilities, SPR Chicago,
SPR Tulsa and SPR Wisconsin delivered to Systems Inc. notes in the principal
amounts of $1,350,133, $1,613,045 and $1,239,765, respectively (the "Acquisition
Notes"). Each such note was payable in monthly installments of principal and
interest. In addition, each corporation agreed to make an additional contingent
payment to Systems Inc. in the event certain "capital events" occurred prior to
the one year anniversary after the final payment is made on its respective note.
The loan agreements restricted borrowings, capital expenditures, amounts of
compensation payable to directors, officers and key employees, sales of assets,
mergers and certain other business transactions; and the notes were
collateralized by the stock of the respective company and substantially all its
assets. As of the effective date of the Mergers, an aggregate of $2,989,245 plus
accrued interest was outstanding on the Acquisition Notes. The Acquisition Notes
were cancelled by operation of law in the Mergers.

SPR Chicago was reincorporated as a Delaware corporation upon the formation
of SPR and the Merger of SPR Chicago into SPR in October 1996. In the Merger,
Robert Figliulo and David Figliulo each received 1,476,914 shares of Common
Stock. Also in October 1996: (i) SPR Tulsa was merged into SPR and Michael
Fletcher and Rene Potter each received 647,571 shares of Common Stock in the
Merger; (ii) SPR Wisconsin was merged into SPR and John Figliulo received
462,197 shares of Common Stock in the Merger; and (iii) Systems Inc. and Data
Flex were merged into SPR. Each stockholder of Systems Inc. and Data Flex

37
<PAGE> 39

received in the Mergers the aggregate number of shares of Common Stock set forth
opposite their respective names below:

<TABLE>
<CAPTION>
NAME SHARES
---- ------
<S> <C>
Eugene Figliulo............................................. 71,685
Robert Figliulo............................................. 182,386
David Figliulo.............................................. 182,386
John Figliulo............................................... 182,386
Stephen Figliulo............................................ 182,386
Donald Figliulo............................................. 182,386
Mark Figliulo............................................... 182,386
James Figliulo.............................................. 182,386
Jeanne Young................................................ 182,386
Michael Cymbala............................................. 91,194
---------
Total.................................................. 1,621,967
=========
</TABLE>

The following stockholders of the Company will receive cash from the net
proceeds of the Offering received by the Company as follows: Eugene Figliulo
will receive $641,266 in full payment of the Redemption Note. Each of the
Company's present stockholders will receive distributions to pay their Federal
and state income taxes attributable to taxable S corporation income prior to the
closing of the Offering. Such distributions are estimated to be as follows:

<TABLE>
<CAPTION>
NAME AMOUNT
---- ------
<S> <C>
Eugene Figliulo............................................. $ 309,230
Robert Figliulo............................................. 541,521
David Figliulo.............................................. 541,521
John Figliulo............................................... 308,389
Stephen Figliulo............................................ 80,655
Donald Figliulo............................................. 80,655
James Figliulo.............................................. 80,655
Mark Figliulo............................................... 80,655
Jeanne Young................................................ 80,655
Michael Cymbala............................................. 39,076
Michael Fletcher............................................ 178,494
Rene Potter................................................. 178,494
----------
Total.................................................. $2,500,000
==========
</TABLE>

Prior to the closing date of the Offering, the Company intends to enter
into a Registration Rights Agreement with Robert Figliulo, David Figliulo, John
Figliulo and Michael Fletcher covering an aggregate of 532,184 shares of Common
Stock. Such Registration Rights Agreement will provide these individuals with
unlimited piggyback registration rights and unlimited demand registration rights
which become exercisable one year after the closing of the Offering and continue
until all such shares have been sold. See "Description of Capital
Stock -- Registration Rights."

Prior to the closing date of the Offering, the Company intends to enter
into a tax indemnity agreement with each of its current stockholders which
provides, among other things, that the Company will indemnify such stockholders
against additional income taxes resulting from adjustments made (as a result of
a final determination made by a competent tax authority) to the taxable income
reported by the Company as an S corporation for periods prior to the Offering,
but only to the extent those adjustments result in a decrease in income taxes
otherwise payable by the Company as a C corporation for periods after the
Offering.

Prior to the closing date of the Offering, the Company intends to enter
into a noncompetition, nonsolicitation and confidentiality agreement with John
Figliulo precluding him from competing with the Company for a period of one year
after the closing date of the Offering.

38
<PAGE> 40

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth certain information regarding the beneficial
ownership of the Common Stock as of December 31, 1996, as adjusted to reflect
the sale of the shares offered hereby, by (i) each person known by the Company
to own beneficially more than 5% of the Common Stock, (ii) each of the Company's
Directors, (iii) each of the Named Executive Officers, (iv) each of the Selling
Stockholders, and (v) all Directors and Executive Officers of the Company as a
group. Each person or entity named below has an address in care of the Company's
principal executive offices. The Company believes that the beneficial owners of
the Common Stock listed below, based on information furnished by such owners,
have sole voting and investment power with respect to such shares.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING NUMBER OF AFTER OFFERING(1)
--------------------- SHARES OFFERED ---------------------
NAME SHARES PERCENT HEREBY SHARES PERCENT
---- ------ ------- -------------- ------ -------
<S> <C> <C> <C> <C> <C>
Robert M. Figliulo.......................... 1,659,400 26.2% 0 1,659,400 20.7%
David A. Figliulo........................... 1,659,400 26.2 0 1,659,400 20.7
Michael J. Fletcher......................... 647,571 10.2 0 647,571 8.1
Stephen T. Gambill.......................... 0 * 0 0 *
Ronald L. Taylor(2)......................... 10,000 * 0 10,000 *
Sydnor W. Thrift, Jr.(2).................... 10,000 * 0 10,000 *
David P. Yeager(2).......................... 10,000 * 0 10,000 *
John Figliulo(3)............................ 644,583 10.2 412,399 232,184 2.9
Rene M. Potter.............................. 647,571 10.2 35,000 612,571 7.7
James Figliulo.............................. 182,386 2.9 93,500 88,886 1.1
Stephen Figliulo............................ 182,386 2.9 93,500 88,886 1.1
Donald Figliulo............................. 182,386 2.9 93,500 88,886 1.1
Mark Figliulo............................... 182,386 2.9 93,500 88,886 1.1
Jeanne Young................................ 182,386 2.9 93,500 88,886 1.1
Michael Cymbala............................. 91,194 1.4 46,750 44,444 *
Eugene Figliulo............................. 71,685 1.1 71,685 0 *
All Directors and Executive Officers as a
Group (7 persons)(4)...................... 3,996,371 62.8 0 3,996,371 49.8
</TABLE>

- -------------------------
* Less than 1%.

(1) If the Underwriters' over-allotment option is exercised in full, the
following stockholders of the Company will sell pursuant to such option the
number of shares of Common Stock following their names and, after the
Offering, will beneficially own the number and percentage of shares of
Common Stock following their names:

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
AFTER OFFERING
--------------------
SHARES TO NUMBER OF
NAME BE SOLD SHARES PERCENT
---- --------- --------- -------
<S> <C> <C> <C>
Rene M. Potter.............................................. 288,334 324,237 4.1%
James Figliulo.............................................. 21,212 67,674 *
Stephen Figliulo............................................ 21,212 67,674 *
Donald Figliulo............................................. 21,212 67,674 *
Mark Figliulo............................................... 21,212 67,674 *
Jeanne Young................................................ 21,212 67,674 *
Michael Cymbala............................................. 10,606 33,838 *
</TABLE>

(2) Consists of shares subject to an option granted under the Option Plan that
is exercisable within 60 days.

(3) John Figliulo was the President, sole stockholder and sole director of SPR
Wisconsin prior to the Mergers.

(4) Includes 30,000 shares subject to options granted under the Option Plan that
are exercisable within 60 days.

39
<PAGE> 41

DESCRIPTION OF CAPITAL STOCK

GENERAL

The following brief description of the Company's capital stock does not
purport to be complete and is subject in all respects to applicable Delaware law
and to the provisions of the Certificate of Incorporation and By-laws, copies of
which have been filed as exhibits to the Registration Statement on Form S-1 of
which this Prospectus is a part and to which exhibits reference is hereby made.

The authorized capital stock of the Company consists of 13,000,000 shares
of Common Stock, $.01 par value per share, and 3,000,000 shares of Preferred
Stock, $.01 par value per share. Immediately following consummation of the
Offering, there will be 8,000,000 shares of Common Stock outstanding, no shares
of Preferred Stock outstanding and 442,000 shares of Common Stock will be
issuable upon exercise of outstanding options (30,000 of which are presently
exercisable).

COMMON STOCK

Holders of Common Stock are entitled to one vote per share on all matters
to be voted upon by stockholders, including the election of directors. There are
no cumulative voting rights for the election of directors.

Holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors out of funds legally
available therefor after payment of dividends required to be paid on outstanding
Preferred Stock, if any. See "Dividend Policy." Holders of Common Stock are
entitled to share ratably in the net assets of the Company upon liquidation
after payment or provision for all liabilities and any preferential liquidation
rights of any preferred stock then outstanding.

Holders of Common Stock have no preemptive rights to purchase shares of
capital stock of the Company. Shares of Common Stock are not subject to any
redemption provisions and are not convertible into any other securities of the
Company. All outstanding shares of Common Stock are, and the shares of Common
Stock to be issued pursuant to the Offering will be, upon payment therefor, duly
authorized, validly issued, fully paid and non-assessable.

Prior to the Offering, there has been no public market for the Common
Stock. The Common Stock has been approved for listing on the Nasdaq National
Market under the symbol "SPRI."

PREFERRED STOCK

The Board of Directors is authorized without stockholder action to adopt
resolutions to issue up to 3,000,000 shares of Preferred Stock, in one or more
series, with such powers, designations, preferences and relative, participating,
optional or other special rights, qualifications, limitations or restrictions as
will be set forth in such resolutions. The holders of Preferred Stock will have
no preemptive rights (unless otherwise provided in the applicable certificate of
designation). Such Preferred Stock may have voting or other rights which could
adversely affect the rights of holders of the Common Stock. In addition, the
issuance of Preferred Stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes, could, under certain
circumstances, make it more difficult for a third-party to gain control of the
Company, discourage bids for the Common Stock at a premium or otherwise
adversely affect the market price of the Common Stock. The Company has no
current plans to issue any shares of Preferred Stock.

DELAWARE LAW AND CERTAIN CERTIFICATE OF INCORPORATION AND BY-LAW PROVISIONS;
ANTI-TAKEOVER EFFECTS

The Company will be subject to the provisions of Section 203 of the
Delaware General Corporation Law (the "DGCL") upon consummation of this
Offering. Subject to certain exceptions, Section 203 prohibits a publicly held
Delaware corporation from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
interested stockholder attained such status with the approval of the Board of
Directors or the business combination is approved in a prescribed manner, or
certain other conditions are satisfied. A

40
<PAGE> 42

"business combination" includes mergers, asset sales and other transactions
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years did own, 15% or more of
the corporation's voting stock.

The Company's By-laws provide that for nominations for the Board of
Directors or for other business to be properly brought by a stockholder before
an annual meeting of stockholders, the stockholder must first have given timely
notice thereof in writing to the Secretary of the Company. To be timely, a
notice must be delivered not less than 60 days nor more than 90 days prior to
the first anniversary of the preceding year's annual meeting. The notice must
contain, among other things, certain information about the stockholder
delivering the notice and, as applicable, background information about each
nominee or a description of the proposed business to be brought before the
meeting. The Company's By-laws provide that any director may be removed only for
cause upon the affirmative vote of at least 66% of the shares entitled to vote
for the election of directors.

The Company's By-laws provide that special meetings of stockholders may be
called only by the Chairman of the Board of Directors or the President of the
Company. These provisions could have the effect of delaying until the next
annual stockholders meeting stockholder actions which are favored by the holders
of a majority of the outstanding voting securities of the Company.

The existence of unissued Preferred Stock enables the Board of Directors to
render more difficult or to discourage an attempt to obtain control of the
Company by means of a tender offer, proxy contest, merger or otherwise, thereby
protecting the continuity of the Company's management. The issuance of Preferred
Stock pursuant to the Board of Directors' authority described above may
adversely affect the rights of the holders of Common Stock. For example,
Preferred Stock issued by the Company may rank prior to the Common Stock as to
dividend rights, liquidation preference or both, may have full or limited voting
rights and may be convertible into shares of Common Stock. Accordingly, the
issuance of Preferred Stock may discourage bids for the Common Stock or may
otherwise adversely affect the market price of the Common Stock.

The foregoing provisions could have the effect of making it more difficult
for a third-party to acquire, or of discouraging a third-party from acquiring
control of the Company.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Company's Certificate of Incorporation contains certain provisions
permitted under the DGCL, relating to the liability of directors. These
provisions eliminate a director's personal liability for monetary damages
resulting from a breach of fiduciary duty, except in certain circumstances
involving certain wrongful acts, such as: (i) for any breach of the director's
duty of loyalty to the Company or its stockholders; (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) under Section 174 of the DGCL; or (iv) for any transaction from
which the director derives an improper personal benefit. These provisions do not
limit or eliminate the rights of the Company or any stockholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's fiduciary duty. These provisions will not alter a
director's liability under federal securities laws. The Company's Certificate of
Incorporation and By-laws also contain provisions indemnifying the directors and
officers of the Company to the fullest extent permitted by the DGCL. The Company
believes that these provisions will assist the Company in attracting and
retaining qualified individuals to serve as directors and officers.

REGISTRATION RIGHTS

Under the terms of a Registration Rights Agreement to be executed
immediately prior to the consummation of the Offering (the "Registration
Agreement"), Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher
will be granted certain demand and piggyback registration rights covering an
aggregate of 532,184 shares of Common Stock (the "Registrable Securities"). The
Registration Agreement will provide the holders of the Registrable Securities
with the right to require the Company to register any or all of the Registrable
Securities, subject to the conditions and limitations contained in the
Registration Agreement. Such registration rights become exercisable one year
subsequent to the closing of the Offering and continue

41
<PAGE> 43

until all shares of Registrable Securities are sold. In addition, if the Company
proposes to register under the Securities Act any of its securities for its own
account, such stockholders may require the Company to include in such
registration all or a part of such Registrable Securities. Pursuant to the
Registration Agreement and the conditions and limitations set forth therein, the
Company is required to: (i) pay all associated Registration Expenses (as defined
therein) in connection with certain registrations; (ii) use its best efforts to
effect such registrations; and (iii) indemnify Robert Figliulo, David Figliulo,
John Figliulo and Michael Fletcher and certain of their affiliates against
certain liabilities, including liabilities under the Securities Act, in
connection with the registration of their shares.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services, L.L.C.

42
<PAGE> 44

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering, the Company will have 8,000,000 shares of
Common Stock outstanding, assuming no exercise of options expected to be
outstanding and exercisable. The shares sold in the Offering will be freely
tradeable without restriction or limitation under the Securities Act, except for
any such shares acquired by "affiliates" of the Company, as such term is defined
under the Securities Act ("Affiliates"), which shares may generally only be sold
in compliance with the limitations of Rule 144 described below.

The remaining 5,300,000 shares of Common Stock (the "Restricted Shares")
constitute restricted securities under Rule 144 and were issued or sold by the
Company in private transactions and may be publicly sold only if registered
under the Securities Act or sold in accordance with an applicable exemption from
registration, such as Rule 144. The Company and all executive officers,
directors and stockholders of the Company have agreed with the Underwriters not
to offer, sell contract to sell or otherwise dispose, or contract to dispose, of
any shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, or grant any options or warrants to purchase
Common Stock, except in certain circumstances, for a period of 180 days after
the date of this Prospectus (the "Lock-up Period") without the prior written
consent of Smith Barney Inc. Upon the expiration of the Lock-up Period (or
earlier with the consent of Smith Barney Inc.), all of the Restricted Shares
will become eligible for sale subject to the restrictions of Rule 144.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) who has beneficially owned Restricted Shares for at
least two years, including a person who may be deemed an Affiliate of the
Company, is entitled to sell within any three-month period a number of shares of
Common Stock that does not exceed the greater of 1% of the then outstanding
shares of Common Stock (approximately 80,000 shares after giving effect to the
Offering) and the average weekly reported trading volume of the Common Stock as
reported through the Nasdaq National Market during the four calendar weeks
preceding the sale. Sales under Rule 144 are subject to certain restrictions
relating to manner of sale, notice and the availability of current public
information about the Company. In addition, under Rule 144(k), a person who has
not been an Affiliate of the Company at any time 90 days preceding a sale, and
who has beneficially owned shares for at least three years, would be entitled to
sell such shares immediately following the Offering without regard to the volume
limitations, manner of sale provisions or notice or other requirements of Rule
144.

Options to purchase a total of 442,000 shares of Common Stock at an
exercise price of $14.00 per share are presently outstanding, of which 30,000
are presently exercisable. An additional 358,000 shares of Common Stock will be
available for future options grants under the Option Plan. An additional 500,000
shares of Common Stock will be available for issuance under the Employee Stock
Purchase Plan. See "Management -- Stock Plans." Rule 701 under the Securities
Act provides that shares of Common Stock acquired on the exercise of outstanding
options may be resold by persons other than Affiliates, beginning 90 days after
the date of this Prospectus, subject only to the manner of sale provisions of
Rule 144, and by Affiliates beginning 90 days after the date of this Prospectus,
subject to all provisions of Rule 144 except its two-year minimum holding
period. The Company intends to register on a registration statement or
statements on Form S-8 the shares of Common Stock to be issued under the Option
Plan and the Purchase Plan.

Prior to the closing date of the Offering, the Company intends to grant
Robert Figliulo, David Figliulo, John Figliulo and Michael Fletcher demand and
piggyback registration rights covering an aggregate of 532,184 shares of Common
Stock. These registration rights will become exercisable one year subsequent to
the closing of the Offering and continue until all shares of Registrable
Securities are sold. To the extent these rights are exercised, additional shares
of Common Stock will become available for sale upon the effectiveness of a
registration statement filed pursuant to exercise of such rights. See
"Description of Capital Stock -- Registration Rights."

Prior to the Offering there has been no public market for the Common Stock
and any sale of substantial amounts of Common Stock in the open market may
adversely affect the market price of the Common Stock offered hereby.

43
<PAGE> 45

UNDERWRITING

Upon the terms and subject to the conditions contained in the Underwriting
Agreement dated the date hereof, each of the underwriters named below (the
"Underwriters"), for whom Smith Barney Inc. and Robert W. Baird & Co.
Incorporated are acting as representatives (the "Representatives"), has
severally agreed to purchase, and the Company and the Selling Stockholders have
agreed to sell to each such Underwriter, the number of shares of Common Stock
set forth opposite the name of such Underwriter.

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
----------- ---------
<S> <C>
Smith Barney Inc. ..........................................
Robert W. Baird & Co. Incorporated..........................
---------
Total..................................................... 2,700,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares are subject to
approval of certain legal matters by counsel and to certain other conditions.
The Underwriters are obligated to take and pay for all shares of Common Stock
offered hereby (other than those covered by the over-allotment option described
below) if any such shares are taken.

The Underwriters initially propose to offer a portion of the shares
directly to the public at the initial public offering price set forth on the
cover page of this Prospectus and a portion of the shares to certain dealers at
a price which represents a concession not in excess of $ per share below the
public offering price. The Underwriters may allow, and such dealers may reallow,
a concession not in excess of $ per share to certain other dealers. After
the initial public offering of the shares to the public, the public offering
price and such concessions may be changed by the Underwriters. The
Representatives of the Underwriters have advised the Company that the
Underwriters do not intend to confirm the sale of any shares to any accounts
over which they exercise discretionary authority.

Certain of the Selling Stockholders have granted the Underwriters an
option, exercisable for 30 calendar days from the date of this Prospectus, to
purchase up to 405,000 additional shares of Common Stock at the initial offering
price set forth on the cover page of this Prospectus, less the underwriting
discounts and commissions. The Underwriters may exercise such option solely for
the purpose of covering over-allotments, if any, in connection with the
Offering. To the extent such option is exercised, each Underwriter will be
obligated, subject to certain conditions, to purchase approximately the same
percentage of such additional shares as the number of shares set forth opposite
each Underwriter's name above bears to the total number of shares listed above.

The Underwriters have reserved up to 135,000 shares of the Common Stock
offered hereby for sale at the initial public offering price to certain
employees, consultants and other persons associated with the Company. The number
of shares of Common Stock available for sale to the general public will be
reduced to the extent such persons purchase such reserved shares. Any reserved
shares not so purchased will be offered by the Underwriters to the general
public on the same basis as the other shares offered hereby.

The Company and all of its directors, executive officers and stockholders
have agreed not to offer, sell, contract to sell or otherwise dispose, or
contract to dispose, of any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, or grant any options or
warrants to purchase Common Stock, except in certain circumstances, for a period
of 180 days after the date of this Prospectus without the prior written consent
of Smith Barney Inc.

Prior to the Offering, there has been no public market for the Common
Stock. The initial public offering price of the shares will be negotiated among
the Company, the Selling Stockholders and the Representatives. Among the factors
expected to be considered in determining the initial public offering price are
the history of and prospects for the Company's business and the industry in
which it competes, an assessment of the Company's management and the present
state of the Company's development, the Company's past and present revenues and
earnings, the prospects for growth of the Company's revenues and earnings, the
current state of the U.S. economy, the current level of economic activity in the
industry in which the Company

44
<PAGE> 46

competes and in related or comparable industries and currently prevailing
conditions in the securities markets, including current valuations of publicly
traded companies which are considered comparable to the Company.

The Company, the Selling Stockholders and the Underwriters have agreed to
indemnify each other against certain liabilities, including liabilities under
the Securities Act of 1933.

LEGAL MATTERS

The validity of the issuance of the shares of Common Stock offered hereby
will be passed upon for the Company by Wildman, Harrold, Allen & Dixon, Chicago,
Illinois. Donald E. Figliulo, the owner of shares of Common Stock and a Selling
Stockholder, is a partner of Wildman, Harrold, Allen & Dixon. Certain legal
matters will be passed upon for the Underwriters by Neal, Gerber & Eisenberg,
Chicago, Illinois.

EXPERTS

The Financial Statements and Schedule of the Company as of December 31,
1996 and 1995, and for each of the years in the three-year period ended December
31, 1996 included herein and elsewhere in the Registration Statement, have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report thereto, and are included in reliance upon the authority of said
firm as experts in accounting and auditing.

CHANGE IN ACCOUNTANTS

Prior to September 9, 1996 Arthur Andersen LLP served as independent public
accountants for SPR Wisconsin, SPR Tulsa, Data Flex and Systems Inc. and Ernst &
Young LLP served as independent public accountants for SPR Chicago. In
connection with the Offering, the Board of Directors of the Company on September
9, 1996 dismissed Ernst & Young LLP and selected Arthur Andersen LLP to serve as
independent public accountants for the Company and to render an opinion on the
financial statements included in this Prospectus, including the financial
statements of SPR Chicago. The Company informed Ernst & Young LLP of its
dismissal on September 9, 1996. The former auditors' report on SPR Chicago's
financial statements for the period from January 14, 1994 to December 31, 1994
and for the year ended December 31, 1995 is not included in this Prospectus.
During the period from January 14, 1994 to December 31, 1994 and for the year
ended December 31, 1995, Ernst & Young LLP's report on the financial statements
of SPR Chicago did not contain an adverse opinion, disclaimer of opinion,
qualification or modification as to uncertainty, audit scope or accounting
principles. There were no disagreements with Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures from January 14, 1994 through September 9, 1996 or with
respect to SPR Chicago's financial statements.

The Company has requested Ernst & Young LLP to furnish it a letter
addressed to the Commission stating whether it agrees with the above comments. A
copy of that letter dated January 7, 1997 is filed as an exhibit to the
Registration Statement of which this Prospectus is a part.

The Company consulted Arthur Andersen LLP and did not consult Ernst & Young
LLP regarding the application of the Commission's accounting principles to the
transactions described under "The Company" and the type of audit opinion that
would be rendered on the Company's financial statements included in this
Prospectus, which consultations were the subject of written and oral advice.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus, which is part of the Registration Statement, does not contain
all of the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the Common
Stock, reference is hereby made to the Registration Statement,

45
<PAGE> 47

including the exhibits and schedules thereto. Statements contained in this
Prospectus as to the contents of any contract, agreement or any other document
referred to are not necessarily complete, and in each instance reference is made
to the copy of such contract, agreement or other document filed as an exhibit to
the Registration Statement, each such statement being qualified in all respects
by such reference. The Registration Statement, including the exhibits and
schedules thereto, may be inspected without charge at the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at Seven World Trade Center, Suite 1300, New York,
New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such materials may be obtained from the public reference section of
the Commission at its Washington address upon payment of the prescribed fee. In
addition, the Commission maintains a World Wide Web site on the Internet at
www.sec.gov that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Commission.

The Company intends to furnish its stockholders with annual reports
containing audited financial statements and an opinion thereon expressed by
independent auditors and may furnish its stockholders with quarterly reports for
the first three quarters of each year containing unaudited summary financial
information.

46
<PAGE> 48

SPR INC.
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Report of Independent Public Accountants.................... F-2
Balance Sheets as of December 31, 1995 and 1996 and December
31, 1996 (unaudited pro forma)............................ F-3
Statements of Operations for the years ended December 31,
1994, 1995 and 1996....................................... F-4
Statements of Stockholders' Equity for the years ended
December 31, 1994, 1995 and 1996.......................... F-5
Statements of Cash Flows for the years ended December 31,
1994, 1995 and 1996....................................... F-6
Notes to Financial Statements............................... F-7
</TABLE>

F-1
<PAGE> 49

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Stockholders of SPR Inc.:

We have audited the accompanying balance sheets of SPR Inc. (a Delaware
corporation) as of December 31, 1995 and 1996 and the related statements of
operations, stockholders' equity and cash flows for each of the three years in
the period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of SPR Inc. as of December 31,
1995 and 1996, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 1996, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Chicago, Illinois
January 23, 1997

F-2
<PAGE> 50

SPR INC.

BALANCE SHEETS

<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, DECEMBER 31,
--------------------------- 1996
1995 1996 (NOTE 12)
---- ---- ------------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash........................................................ $ 1,108,506 $ 356,179 $ 356,179
Accounts receivable, net of allowance for doubtful accounts
of $31,900 and $74,399 at December 31, 1995 and 1996,
respectively.............................................. 3,096,220 4,272,655 4,272,655
Notes receivable -- related parties, current portion........ 325,981 181,245 181,245
Notes receivable -- other................................... 75,000 -- --
Prepaid expenses and other.................................. 369,024 801,661 801,661
------------ ------------ -----------
Total current assets.................................... 4,974,731 5,611,740 5,611,740
------------ ------------ -----------
Property and equipment:
Leasehold improvements...................................... 8,278 111,318 111,318
Computer equipment and software............................. 391,204 1,043,782 1,043,782
Office furniture and equipment.............................. 153,188 672,105 672,105
------------ ------------ -----------
552,670 1,827,205 1,827,205
Less -- accumulated depreciation and amortization......... (59,818) (308,046) (308,046)
------------ ------------ -----------
Property and equipment, net............................. 492,852 1,519,159 1,519,159
------------ ------------ -----------
Notes receivable -- related parties, net of current
portion................................................... 115,946 -- --
------------ ------------ -----------
Total assets............................................ $ 5,583,529 $ 7,130,899 $ 7,130,899
============ ============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit.............................................. $ -- $ 1,300,000 $ 1,300,000
Current portion of term note................................ -- 44,967 44,967
Current portion of note payable -- related party............ 1,200,000 641,266 641,266
Current portion of capital lease obligations................ 45,683 64,094 64,094
Accounts payable............................................ 402,626 959,492 959,492
Dividends payable........................................... -- -- 2,500,000
Accrued expenses:
Salaries, commissions, and withholding taxes.............. 554,796 982,885 982,885
Other..................................................... 401,882 424,620 424,620
Deferred income taxes....................................... -- -- 668,000
------------ ------------ -----------
Total current liabilities............................... 2,604,987 4,417,324 7,585,324
------------ ------------ -----------
Long-term liabilities:
Term note, net of current portion........................... -- 171,038 171,038
Note payable -- related party, net of current portion....... 641,266 -- --
Capital lease obligations, net of current portion........... 62,693 35,189 35,189
Deferred income taxes....................................... -- -- 360,000
------------ ------------ -----------
Total long-term liabilities............................. 703,959 206,227 566,227
------------ ------------ -----------
Stockholders' equity:
Common stock, $.01 par, 13,000,000 shares authorized,
6,333,334 shares issued and outstanding................... 63,333 63,333 63,333
Preferred stock, $.01 par, 3,000,000 shares authorized, no
shares issued and outstanding............................. -- -- --
Additional paid-in capital.................................. 34,505,118 46,736,203 (1,083,985)
Retained deficit............................................ (32,293,868) (44,292,188) --
------------ ------------ -----------
Total stockholders' equity.............................. 2,274,583 2,507,348 (1,020,652)
------------ ------------ -----------
Total liabilities and stockholders' equity.............. $ 5,583,529 $ 7,130,899 $ 7,130,899
============ ============ ===========
</TABLE>

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

F-3
<PAGE> 51

SPR INC.

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Revenues............................................ $14,797,259 $ 22,907,928 $ 32,510,743
Cost of services.................................... 10,424,690 15,525,198 23,287,234
----------- ------------ ------------
Gross profit........................................ 4,372,569 7,382,730 9,223,509
Costs and expenses:
Selling........................................... 1,165,141 2,141,374 3,046,045
Recruiting........................................ 409,938 776,651 1,323,105
Stock-based compensation.......................... 6,509,750 27,986,681 12,231,085
General and administrative expenses............... 1,334,175 1,642,112 3,741,574
----------- ------------ ------------
Total costs and expenses....................... 9,419,004 32,546,818 20,341,809
----------- ------------ ------------
Operating income (loss)............................. (5,046,435) (25,164,088) (11,118,300)
Other income (expense):
Interest expense.................................. (88,065) (160,484) (122,862)
Interest income................................... 55,520 51,477 39,329
Other, net........................................ (24,136) -- 13,176
----------- ------------ ------------
Total other income (expense)................... (56,681) (109,007) (70,357)
----------- ------------ ------------
Income (loss) before income taxes................... (5,103,116) (25,273,095) (11,188,657)
Income taxes........................................ 75,123 20,788 9,000
----------- ------------ ------------
Net income (loss)................................... $(5,178,239) $(25,293,883) $(11,197,657)
=========== ============ ============
Pro forma income data (unaudited):
Net (loss) as reported............................ $(25,293,883) $(11,197,657)
Pro forma adjustment to recognize "C" Corporation
provision for income taxes..................... 1,065,000 407,971
------------ ------------
Pro forma net (loss).............................. $(26,358,883) $(11,605,628)
============ ============
Pro forma net (loss) per share.................... $ (4.04) $ (1.78)
============ ============
Pro forma weighted average number of shares
outstanding.................................... 6,525,346 6,525,346
============ ============
</TABLE>

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

F-4
<PAGE> 52

SPR INC.

STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RETAINED TOTAL
------------------- PAID-IN EARNINGS STOCKHOLDERS'
SHARES AMOUNT CAPITAL (DEFICIT) EQUITY
--------- ------- ----------- ------------ -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993............ 6,733,334 $67,333 $ 41,917 $ 1,847,804 $ 1,957,054
Net loss.............................. -- -- -- (5,178,239) (5,178,239)
Distributions......................... -- -- -- (80,955) (80,955)
Stock purchased and cancelled......... (400,000) (4,000) (33,230) (2,844,036) (2,881,266)
Stock-based compensation.............. -- -- 6,509,750 -- 6,509,750
--------- ------- ----------- ------------ ------------
Balance at December 31, 1994............ 6,333,334 63,333 6,518,437 (6,255,426) 326,344
Net loss.............................. -- -- -- (25,293,883) (25,293,883)
Distributions......................... -- -- -- (744,559) (744,559)
Stock-based compensation.............. -- -- 27,986,681 -- 27,986,681
--------- ------- ----------- ------------ ------------
Balance at December 31, 1995............ 6,333,334 63,333 34,505,118 (32,293,868) 2,274,583
Net loss.............................. -- -- -- (11,197,657) (11,197,657)
Distributions......................... -- -- -- (800,663) (800,663)
Stock-based compensation.............. -- -- 12,231,085 -- 12,231,085
--------- ------- ----------- ------------ ------------
Balance at December 31, 1996............ 6,333,334 $63,333 $46,736,203 $(44,292,188) $ 2,507,348
========= ======= =========== ============ ============
</TABLE>

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

F-5
<PAGE> 53

SPR INC.

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-----------------------------------------
1994 1995 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) for the period.......................... $(5,178,239) $(25,293,883) $(11,197,657)
Adjustments to reconcile net income (loss) to net cash
provided by operating activities:
Depreciation and amortization........................... 20,810 51,259 252,215
Stock-based compensation................................ 6,509,750 27,986,681 12,231,085
Loss on sale of property and equipment.................. 27,409 -- --
Increase in accounts receivable......................... (106,315) (1,623,833) (1,176,435)
Increase in prepaid expenses and other.................. (69,429) (225,640) (432,637)
Increase in accounts payable............................ 5,022 300,537 556,866
Increase in accrued expenses............................ 137,729 373,047 450,827
----------- ------------ ------------
Net cash provided by operating
activities.............................................. 1,346,737 1,568,168 684,264
----------- ------------ ------------
Cash flows from investing activities:
Purchases of property and equipment....................... (62,467) (332,721) (1,238,595)
(Increase) decrease in notes receivable -- related
parties................................................. (89,035) 338,773 260,682
(Increase) decrease in notes receivable -- other.......... -- (75,000) 75,000
----------- ------------ ------------
Net cash provided by (used in) investing activities....... (151,502) (68,948) (902,913)
----------- ------------ ------------
Cash flows from financing activities:
Payments on note payable -- related party................. (320,000) (720,000) (1,200,000)
Distributions............................................. (80,955) (744,559) (800,663)
Payments on capital lease obligations..................... -- (9,183) (49,020)
Borrowings on term note payable........................... -- -- 250,000
Payments on term note payable............................. -- -- (33,995)
Net borrowings on line of credit.......................... -- -- 1,300,000
----------- ------------ ------------
Net cash used in financing activities..................... (400,955) (1,473,742) (533,678)
----------- ------------ ------------
Net increase (decrease) in cash........................... 794,280 25,478 (752,327)
Cash, beginning of period................................... 288,748 1,083,028 1,108,506
----------- ------------ ------------
Cash, end of period......................................... $ 1,083,028 $ 1,108,506 $ 356,179
=========== ============ ============
Supplemental disclosure of cash payments made for:
Interest.................................................. $ 68,677 $ 143,148 $ 135,792
Income taxes.............................................. 964 72,087 9,000
=========== ============ ============
Supplemental disclosure of noncash investing and financing
activities:
Investment in equipment through issuance of capitalized
lease obligations....................................... -- $ 117,559 $ 39,926
Stock purchased through issuance of note payable.......... 2,881,266 -- --
=========== ============ ============
</TABLE>

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

F-6
<PAGE> 54

SPR INC.

NOTES TO FINANCIAL STATEMENTS

NOTE 1 -- BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

(a) Business -- SPR Inc. (the Company) provides information technology
services to clients in a variety of industry groups including financial
services, healthcare, insurance, manufacturing, oil and gas, transportation and
utilities. The Company currently provides the following service offerings: (i)
general consulting, (ii) systems reengineering, (iii) century date compliance,
(iv) systems maintenance and support and (v) information delivery services.
Within each of these service offerings, the Company provides three levels of
consulting support which are distinguished by the degree of responsibility the
Company assumes: strategic planning, project management and implementation.

(b) Basis of Presentation -- SPR Inc. was formed on October 29, 1996.
During October, 1996, Systems and Programming Resources, Inc., Systems &
Programming Resources of Tulsa, Inc., SPR-Wisconsin, Inc., SPR Chicago Inc., and
Consulting Acquisition, Inc. (d.b.a. Data Flex) merged into SPR Inc. at which
time the stockholders of such companies received an aggregate of 6,333,134
shares of common stock of SPR Inc. Systems and Programming Resources, Inc.,
SPR-Wisconsin, Inc., SPR Chicago Inc., Consulting Acquisition, Inc. and SPR Inc.
are under common ownership and control and are accounted for at historical cost
as a reorganization of entities under common control (similar to the pooling of
interests method of accounting). The merger of Systems & Programing Resources of
Tulsa, Inc. into SPR Inc. was accounted for using the pooling of interests
method of accounting. All intercompany transactions and balances have been
eliminated. The accompanying financial statements of the Company have been
prepared to give retroactive effect to the merger.

(c) Accounts Receivable -- Accounts receivable include fees and expenses
for services rendered prior to year end which were billed subsequent to year
end. Amounts relating to such fees and expenses included in accounts receivable
are $613,722 and $919,956 at December 31, 1995 and 1996, respectively.

(d) Prepaid Expenses and Other -- Prepaid expenses and other includes
$477,653 in Initial Public Offering-related costs at December 31, 1996.

(e) Revenue Recognition -- Revenues are recognized as the related services
are performed. Clients are generally billed on a time and materials basis.

(f) Property and Equipment -- Property and equipment are stated at cost.
Expenditures for repair and maintenance are charged to expense as incurred.
Depreciation and amortization are computed using the straight-line method. The
estimated useful lives used in computing depreciation and amortization for
financial statement purposes are as follows:

<TABLE>
<CAPTION>
ASSET DESCRIPTION ASSET LIFE
----------------- ----------
<S> <C>
Leasehold improvements........................ Shorter of lease term or estimated
useful life of the asset
Computer equipment and software............... 5 years
Office furniture and equipment................ 5 to 7 years
</TABLE>

(g) Distributions -- Distributions are recorded when declared by the Board
of Directors.

(h) Use of 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.

(i) Income Taxes -- The Company elected to be taxed as an S corporation for
Federal and certain state income tax purposes. By this election, income of the
Company is taxable to the stockholders.

F-7
<PAGE> 55

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Upon completion of the Initial Public Offering (the Offering) and effective
termination of the S corporation election, deferred income tax liabilities and
income tax expense will be recorded for taxable temporary differences existing
at the time of change in tax status. Income for Federal income tax purposes was
recognized on the cash basis of accounting and, prior to the Offering, the
Company will change to the accrual basis of accounting. If the effective date of
the Offering had been December 31, 1996, deferred income tax liabilities and
income tax expenses of approximately $1,028,000 would have been recorded.
Deferred income taxes will be recorded under the asset and liability method of
accounting for income taxes which requires the recognition of deferred income
taxes based upon the tax consequences of "temporary differences" by applying
enacted statutory tax rates applicable to future years to differences between
the financial statements carrying amounts and the tax basis of existing assets
and liabilities. As of December 31, 1996, deferred income tax liabilities would
have consisted of the following:

<TABLE>
<S> <C>
Change in tax accounting methods (cash to accrual).......... $1,012,000
Fixed Assets................................................ 16,000
----------
Total deferred income tax liabilities.................. $1,028,000
==========
</TABLE>

Additional paid-in capital and retained earnings (deficit) will be adjusted
to reflect the capitalization of retained earnings (deficit) to additional
paid-in capital upon the conversion of the Company to a C corporation.

The Company intends to enter into a tax indemnity agreement with each of
its current stockholders which provides, among other things, that the Company
will indemnify such stockholders against additional income taxes resulting from
adjustments made (as a result of a final determination made by a competent tax
authority) to the taxable income reported by the Company as an S corporation for
periods prior to the Offering, but only to the extent those adjustments result
in a decrease in income taxes otherwise payable by the Company as a C
corporation for periods after the Offering.

(j) Pro forma net (loss) per share -- Pro forma net (loss) per share is
computed based upon the weighted average number of shares and common share
equivalents outstanding during each period. Pro forma per share information
assumes that 192,012 of the shares of Common Stock being offered by the Company
were outstanding during the periods indicated. This represents the approximate
number of shares of Common Stock which are being offered by the Company
(assuming an initial public offering price of $14.00 per share and after
deducting estimated underwriting discounts and commissions) to fund the payment
of the dividend to enable the stockholders of record prior to the Offering to
pay income taxes related to S corporation income through the closing date of the
Offering. The Company currently estimates that the dividend will be $2.5
million.

NOTE 2 -- CONCENTRATION OF CREDIT RISK

The Company's financial instruments that are exposed to concentrations of
credit risk consist of accounts receivable.

The Company's customers are predominantly in the Midwest, with the majority
of customers located in Chicago, Tulsa and Milwaukee. One customer in the
insurance industry accounted for approximately 11% and 16% of revenues in 1995
and 1996, respectively. The Company reviews a customer's credit history before
extending credit. In addition, the Company routinely assesses the financial
strength of its customers and, as a consequence, believes that its accounts
receivable credit risk is limited. The Company has no off balance sheet credit
risk.

F-8
<PAGE> 56

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 3 -- NOTES RECEIVABLE FROM RELATED PARTIES

Notes receivable consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31
-------------------
1995 1996
---- ----
<S> <C> <C>
Stockholder notes receivable, unsecured, payable on demand,
interest at 7%............................................ $ 42,233 $ 44,745
Stockholder notes receivable, unsecured, payable on demand,
interest at 6%............................................ 399,694 100,000
Stockholder note receivable, unsecured, payable on demand,
interest at prime plus 1%................................. -- 36,500
-------- --------
Total notes receivable from related parties................. 441,927 181,245
Less--current portion....................................... 325,981 181,245
-------- --------
$115,946 $ --
======== ========
</TABLE>

NOTE 4 -- LINES OF CREDIT AND LONG-TERM DEBT

The Company has line of credit agreements that allow for maximum borrowings
of $2,500,000 and are limited based upon a percentage of eligible accounts
receivable, as defined. Interest is at the applicable bank's prime rate.
Borrowings are collateralized by certain assets including accounts receivable.
One agreement provides for maximum borrowings of $2,000,000 and expires in May,
1997. Another line of credit agreement which provides for maximum borrowings of
$500,000 has no expiration date. There were no borrowings outstanding as of
December 31, 1995. At December 31, 1996, borrowings outstanding were $1,300,000.

Fair value of debt approximates book value at the balance sheet dates.

Long-term and related party debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1996
---- ----
<S> <C> <C>
Note payable to stockholder, unsecured, due August, 1997,
payable in monthly installments of $80,000 plus interest
at 6.75%.................................................. $1,841,266 $641,266
Term note payable, due December 31, 2000, payable in monthly
installments of $5,190, including interest at 9%,
collateralized by certain accounts receivable and other
assets.................................................... -- 216,005
Capital lease obligations, collateralized by certain
equipment, personally guaranteed by a stockholder,
interest rates ranging from 7.75% to 8%................... 108,376 99,283
---------- --------
Total long-term debt........................................ 1,949,642 956,554
Less--current maturities.................................... 1,245,683 750,327
---------- --------
$ 703,959 $206,227
========== ========
</TABLE>

The aggregate maturities for long-term and related party debt are as
follows:

<TABLE>
<S> <C>
1997........................................................ $750,327
1998........................................................ 75,468
1999........................................................ 62,032
2000........................................................ 68,727
2001........................................................ --
--------
Total long term-debt........................................ $956,554
========
</TABLE>

F-9
<PAGE> 57

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE 5 -- LEASE AGREEMENTS

The Company leases its office facilities under operating lease agreements
which expire at various times through 2002. In addition, the Company leases
certain equipment under operating lease agreements.

In addition to the minimum future rental payments, the Company is obligated
to pay certain operating expenses relating to leased properties which are
included in rent expense. Total rent expense under operating leases was
approximately $89,594, $135,167 and $383,746 for the years ended December 31,
1994, 1995 and 1996, respectively.

The following is a schedule of minimum future rental payments required
under the operating leases:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
- ------------------------
<S> <C>
1997................................................. $ 342,819
1998................................................. 374,123
1999................................................. 377,305
2000................................................. 341,930
2001................................................. 310,343
Thereafter........................................... 105,668
----------
Total minimum payments required............................. $1,852,188
==========
</TABLE>

NOTE 6 -- 401(K) PROFIT-SHARING PLAN

The Company has a contributory 401(k) profit-sharing plan (the Plan)
covering substantially all full-time employees with a service period greater
than 90 days. The Plan allows participants to contribute up to 15% of their
total compensation on a pretax basis, up to a specified amount. The Company is
required to contribute annually one-fourth of the first $2,000 of the
participants' contribution, up to a maximum of $500 per participant. The total
Company contribution was approximately $21,375, $27,202 and $66,865 for the
years ended December 31, 1994, 1995 and 1996, respectively.

NOTE 7 -- LICENSE AGREEMENT

In October, 1995, the Company entered into a nonexclusive agreement with an
unaffiliated technical services company operating in New York and other markets
where the Company is not currently doing business, whereby the Company licenses
its Century Date Compliance methodology, Renovation 2000(SM), and its software
analysis tool, Code Vu(SM). In contracts involving Century Date Compliance in
which the unaffiliated company is the prime contractor and the engagement is not
handled as a joint venture the unaffiliated company is obligated to pay SPR Inc.
a license fee ranging from 4% to 9% of revenues. For the year ended December 31,
1996, the Company has been paid approximately $18,000.

NOTE 8 -- COMMITMENTS AND CONTINGENCIES

Letter of Credit -- The Company has a letter of credit of $119,500 at
December 31, 1996 which is security for a lease agreement. The letter of credit
is renewable each year.

NOTE 9 -- BUSINESS COMBINATION

During October, 1996, SPR Inc. acquired by merger all the common stock of
Systems & Programming Resources of Tulsa, Inc. in exchange for 1,295,142 shares
of SPR Inc's common stock. These companies provide information technology
services to clients in a variety of industry groups. The transaction was
accounted for as a pooling of interests, and accordingly, the financial
statements for all periods presented have

F-10
<PAGE> 58

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

been restated to include the accounts of these companies. Revenues and net
income, net of intercompany eliminations of the separate companies for the
periods preceding the acquisition were:

<TABLE>
<CAPTION>
SPR INC. INCLUDING
SYSTEMS AND PROGRAMMING SYSTEMS &
RESOURCES, INC., SPR-WISCONSIN, INC., PROGRAMMING
SPR CHICAGO INC. AND DATA FLEX RESOURCES OF TULSA, INC.
------------------------------------- ------------------------
<S> <C> <C>
Ten months ended October 31, 1996
Revenues.................................... $ 18,447,117 $8,128,336
Net income (loss), net of intercompany
eliminations............................. (11,265,184) 541,651
Year ended December 31, 1995
Revenues.................................... 16,097,512 6,810,416
Net income (loss), net of intercompany
eliminations............................. (26,042,094) 748,211
Year ended December 31, 1994
Revenues.................................... 13,878,339 918,920
Net loss, net of intercompany
eliminations............................. (5,166,141) (12,098)
</TABLE>

NOTE 10 -- STOCK-BASED COMPENSATION

Systems and Programming Resources, Inc. entered into a series of
transactions with stockholders/ employees from January, 1994 through October,
1996. Certain assets and certain liabilities were transferred to SPR Chicago
Inc. and SPR-Wisconsin, Inc. during 1994 that were subsequently transferred to
SPR Inc. in 1996. Because the transactions were among family members within a
control group, the stockholders of SPR Chicago Inc. and SPR-Wisconsin, Inc. were
effectively granted a variable compensation arrangement that is measured by the
increase in the estimated value of these companies (as determined by management)
since 1994. Compensation expense was calculated as follows: 1) multiply the
number of shares of Common Stock owned by the former stockholders of SPR Chicago
Inc. and SPR-Wisconsin, Inc. by the estimated market value per share of the
Company (which was estimated at $15.00 per share in 1994 and 1995 and $14.00 per
share in 1996); 2) then subtract the payments made by SPR Chicago Inc. and
SPR-Wisconsin, Inc. to the Company on the original acquisition notes; 3) then
subtract the value of the shares received by the stockholders of SPR Chicago
Inc. and SPR-Wisconsin, Inc. attributable to such stockholders' interests in
Consulting Acquisition, Inc. and Systems and Programming Resources, Inc.
Compensation expense was allocated to each period presented based on the
increase in the estimated market values of SPR Chicago Inc. and SPR-Wisconsin,
Inc. which was determined primarily based on revenue growth of each of the
respective companies. The estimated increase in value of SPR-Wisconsin, Inc.
from 1994 to 1995 was 73.75% and from 1995 to 1996 was 26.25%. The estimated
increase in value of SPR Chicago Inc. during 1994 was 14.69%, from 1994 to 1995
was 52.55% and from 1995 to 1996 was 32.76%. The final measurement occurred when
the relative ownership interests in SPR Inc. were determined in October, 1996.
The ownership interests of the former stockholders of SPR Chicago Inc. and
SPR-Wisconsin, Inc. is collectively 62.6% of the Company. Compensation expense
relating to this arrangement is recorded in the accompanying statements of
operations as stock-based compensation with the corresponding credit included in
additional paid-in-capital.

NOTE 11 -- STOCK PLANS

DESCRIPTION

In November, 1996, the Company adopted an Employee Stock Purchase Plan and
a Combined Incentive and Non-statutory Stock Option Plan. 500,000 shares of
common stock are reserved for issuance under the Employee Stock Purchase Plan
and 800,000 shares of common stock are reserved for issuance under the

F-11
<PAGE> 59

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

Combined Incentive and Non-statutory Stock Option Plan. On December 31, 1996,
options to purchase an aggregate of 442,000 shares of common stock were granted
at an exercise price of $14.00 per share. Of these outstanding options, 30,000
are non-statutory stock options which are presently exercisable and 412,000 are
incentive stock options (ISOs) which vest over a five year period at the rate of
20% per year. The Employee Stock Purchase Plan will permit eligible employees
who have completed five full calendar months of service to purchase common stock
through payroll deductions of up to 20% of their total cash compensation
provided that no employee may purchase more than $25,000 worth of stock in any
calendar year. The purchase price shall be the lesser of 85% of the market value
of the common stock on the first or last day of the offering period, as defined.

The Combined Incentive and Non-statutory Stock Option Plan provides that
awards may be granted to employees, officers and directors of the Company.
Awards may consist of non-statutory stock options and incentive stock options to
purchase shares of common stock and stock appreciation rights (SARs). The
exercise price per share of common stock may not be less than 85% (100% in the
case of an ISO) of the fair market value of the common stock on the date the
option is granted. Options and SARs granted under the option plan must generally
be exercised within fifteen years from the date of grant (ten years in the case
of ISOs). In the case of any eligible employee who owns stock possessing more
than 10% of the voting power of stock, the exercise price of any ISOs granted
may not be less than 110% of the fair market value of the common stock on the
date of grant and the exercise period may not exceed five years from the date of
grant.

ACTIVITY

Stock option activity for the Company's Combined Incentive and
Non-statutory Stock Option Plan for the year ended December 31, 1996 is as
follows:

<TABLE>
<CAPTION>
INCENTIVE STOCK WEIGHTED NON-STATUTORY WEIGHTED
OPTIONS AVERAGE STOCK OPTIONS AVERAGE
---------------- EXERCISE --------------- EXERCISE
SHARES PRICE PRICE SHARES PRICE PRICE
------ ----- -------- ------ ----- --------
<S> <C> <C> <C> <C> <C> <C>
Outstanding as of December 31, 1995...... -- $ -- $ -- -- $ -- $ --
======= ======
Granted................................ 412,000 14.00 14.00 30,000 14.00 14.00
Exercised.............................. -- -- -- -- -- --
Cancelled.............................. -- -- -- -- -- --
------- ------ ------ ------ ------ ------
Outstanding as of December 31, 1996...... 412,000 14.00 14.00 30,000 14.00 14.00
======= ======
Stock options exercisable at December 31,
1996................................... -- 30,000
======= ======
</TABLE>

ACCOUNTING

The Company currently utilizes Accounting Principles Board Opinion No. 25
in its accounting for stock options. In October, 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 123
("Statement 123"), "Accounting for Stock-based Compensation." The accounting
method as provided in the pronouncement is not required to be adopted; however,
it is encouraged. The Company is not adopting the accounting provisions of
Statement 123. Had the Company accounted for its stock options in accordance
with Statement 123, pro forma net (loss) and pro forma net (loss) per share
would have been approximately ($11,672,048) and ($1.79) for the year ended
December 31, 1996. The pro forma disclosure is not likely to be indicative of
pro forma results which may be expected in future years because of the fact that
options vest over several years, compensation expense is recognized as the
options vest and additional awards may also be granted.

F-12
<PAGE> 60

SPR INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

For purposes of determining the pro forma effect of these options, the fair
value of each option is estimated on the date of grant based on the
Black-Scholes option pricing model assuming among other things, no dividend
yield, a risk free interest rate of 6.11%, and expected life of 5.0 years.

The weighted average fair value of options granted under the Company's
Combined Incentive and Non-Statutory Stock Option Plan for the period ended
December 31, 1996 was $3.69. As of December 31, 1996, the remaining contractual
life of all options was approximately ten to fifteen years.

NOTE 12 -- SUBSEQUENT EVENTS AND PRO FORMA FINANCIAL DATA (UNAUDITED)

The pro forma net income and net income per share includes a provision for
federal and state income taxes as if the Company had been a C corporation. The
effective income tax rate of 40% reflects the combined federal and state income
taxes.

The Company will convert to a C corporation in connection with the
completion of the Offering resulting in the recording of approximately
$1,028,000 in deferred income tax liabilities, as discussed in Note 1(i). Prior
to consummation of the Offering, the Company intends to declare a dividend (the
"Dividend"). The Company currently estimates that the Dividend will equal
approximately $2,500,000. Retained earnings (deficit) of the Company (which
includes the aggregate stock-based compensation expense), after recording the
estimated Dividend and deferred income taxes, will be reclassified to additional
paid-in capital in connection with the termination of the Company's S
corporation election. The unaudited pro forma Balance Sheet gives effect to
these items. No other contemplated transactions in connection with the Offering
are included in the unaudited pro forma Balance Sheet information.

F-13
<PAGE> 61

INSIDE BACK COVER OF PROSPECTUS

The inside back cover is a multicolor graphic and text layout. The following
text appears above the graphics:

"SPR OFFICES

SPR services the Midwest with offices located in:

Chicago, Illinois
Milwaukee, Wisconsin
Tulsa, Oklahoma

SPR plans to open an additional office in Dallas, Texas in early 1997."

[Graphics consist of map of the United States with spotlights emanating from
Chicago, Milwaukee and Tulsa, the three cities in which SPR offices are
currently located, and from Dallas, where a new SPR office is planned to open
in early 1997.]

The following text appears below the graphics:

"To view SPR online,
visit the SPR web site.
[Graphics depicting an excerpt from the SPR home page.]
www.sprinc.com"

[The Company's logo appears in the lower right corner of the page below a page
curl.]

<PAGE> 62

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

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY OF THE SELLING STOCKHOLDERS OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES
OTHER THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO BUY, THOSE TO WHICH IT RELATES IN ANY STATE TO ANY PERSON TO WHOM IT
IS NOT LAWFUL TO MAKE SUCH OFFER IN SUCH STATE. THE DELIVERY OF THIS PROSPECTUS
AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 8
The Company........................... 14
Use of Proceeds....................... 14
Dividend Policy....................... 14
Capitalization........................ 15
Dilution.............................. 16
Selected Financial Data............... 17
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 19
Business.............................. 24
Management............................ 32
Certain Transactions.................. 37
Principal and Selling Stockholders.... 39
Description of Capital Stock.......... 40
Shares Eligible for Future Sale....... 43
Underwriting.......................... 44
Legal Matters......................... 45
Experts............................... 45
Change in Accountants................. 45
Additional Information................ 45
Index to Financial Statements......... F-1
</TABLE>

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

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- ------------------------------------------------------
- ------------------------------------------------------

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

2,700,000 SHARES

SPR, INC.

COMMON STOCK

SPR LOGO
------------
PROSPECTUS
, 1997
------------

SMITH BARNEY INC.

ROBERT W. BAIRD & CO.
INCORPORATED

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

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the inclusion
in this Registration Statement on Form S-1 (Registration No. 333-16421) of our
reports dated January 23, 1997 on our audits of the financial statements of SPR
Inc. and on the Supplemental Schedule (Schedule II) and to all references to
our firm included in this Registration Statement.

/s/ ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP

Chicago, IL
February 10, 1997