<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

<TABLE>
<C>        <S>
   /X/     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000

                                  OR

            [TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                       FOR THE TRANSITION PERIOD FROM TO .]

                    COMMISSION FILE NUMBER 0-24667
</TABLE>

                       MARKETING SPECIALISTS CORPORATION
                      (F/K/A MERKERT AMERICAN CORPORATION)
             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                            <C>
               DELAWARE                                     04-3411833
    (State or other jurisdiction of                       (IRS Employer
    incorporation or organization)                     Identification No.)
</TABLE>

                       17855 N. DALLAS PARKWAY, SUITE 200
                              DALLAS, TEXAS 75287
                                 (972) 349-6200
   (Address, including zip code and telephone number, including area code of
                    Registrant's principal executive office)

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

                            FORMER NAME AND ADDRESS
                          MERKERT AMERICAN CORPORATION
                              490 TURNPIKE STREET
                          CANTON, MASSACHUSETTS 02021

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

          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

            SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:

                           COMMON STOCK, $0.01 PAR VALUE

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

    Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the Registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/  No / /

    The number of shares of the Registrant's Common Stock and Restricted Common
Stock outstanding as of September 30, 2000 was 25,912,809 and 72,736,
respectively.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                       MARKETING SPECIALISTS CORPORATION
                                     INDEX

<TABLE>
<CAPTION>
                                                                           PAGE NO.
                                                                           ---------
<S>          <C>                                                           <C>
                           PART I.  FINANCIAL INFORMATION

ITEM 1.      CONSOLIDATED FINANCIAL STATEMENTS

             Condensed Consolidated Balance Sheets, September 30, 2000
               (unaudited) and December 31, 1999.........................      3

             Condensed Consolidated Statements of Operations, Three
               months ended September 30, 2000 (unaudited) and
               September 30, 1999 (unaudited)............................      4

             Condensed Consolidated Statements of Operations, Nine months
               ended September 30, 2000 (unaudited) and September 30,
               1999 (unaudited)..........................................      5

             Condensed Consolidated Statements of Cash Flows, Nine months
               ended September 30, 2000 (unaudited) and September 30,
               1999 (unaudited)..........................................      6

             Notes to Condensed Consolidated Financial Statements
               (unaudited)...............................................      7

ITEM 2.      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
               AND RESULTS OF OPERATIONS.................................     18

ITEM 3.      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
               RISK......................................................     24

                            PART II.  OTHER INFORMATION

ITEM 1.      LEGAL PROCEEDINGS...........................................     25

ITEM 2.      CHANGES IN SECURITIES AND USE OF PROCEEDS...................     25

ITEM 3.      DEFAULTS UPON SENIOR SECURITIES.............................     25

ITEM 4.      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.........     26

ITEM 5.      OTHER INFORMATION...........................................     26

ITEM 6.      EXHIBITS AND REPORTS ON FORM 8-K............................     26

             SIGNATURES..................................................     28
</TABLE>

                                       2
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

                    (FORMERLY MERKERT AMERICAN CORPORATION)

                     CONDENSED CONSOLIDATED BALANCE SHEETS

                  (AMOUNTS IN THOUSANDS, EXCEPT SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                              SEPTEMBER 30,    DECEMBER 31,
                                                                   2000            1999
                                                              --------------   -------------
                                                               (UNAUDITED)
<S>                                                           <C>              <C>
                           ASSETS
Current Assets:
  Restricted cash...........................................     $    857        $  1,200
  Accounts receivable, net of allowance for doubtful
    accounts of $12,652 and $5,730, respectively............       46,218          53,579
  Inventory.................................................        1,286           1,221
  Properties held for sale..................................           --           7,312
  Prepaid expenses and other current assets.................        2,851           2,895
                                                                 --------        --------
Total current assets........................................       51,212          66,207

Property, plant and equipment, net..........................       32,732          35,204
Other long-term assets......................................       13,874           9,665
Intangibles, net............................................      362,518         338,540
                                                                 --------        --------
Total Assets................................................     $460,336        $449,616
                                                                 ========        ========
            LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
  Accounts payable..........................................     $ 26,221        $ 14,396
  Accrued expenses..........................................       31,673          33,664
  Current portion of long-term obligations..................       63,094          48,055
                                                                 --------        --------
Total current liabilities...................................      120,988          96,115

Long-term obligations, less current portion:
  Long-term debt and notes payable..........................      192,011         170,065
  Obligations under capital leases..........................          642             804
  Covenants not to compete..................................       17,374          21,041
  Acquisition-related deferred compensation liabilities.....       31,259          35,921
                                                                 --------        --------
                                                                  241,286         227,831

Other liabilities...........................................        2,707           7,428
Commitments and contingencies
Stockholders' Equity (Deficit):
  Common Stock, $0.01 par value:
    Authorized shares--54,000,000
    Issued and outstanding--25,985,545 and 14,173,844,
      respectively..........................................          260             142
  Additional paid-in capital................................      169,254         143,080
  Note for sale of common stock.............................       (1,500)         (1,500)
  Accumulated deficit.......................................      (72,212)        (23,033)
  Treasury stock, at cost--39,707 shares....................         (447)           (447)
                                                                 --------        --------
Total stockholders' equity..................................       95,355         118,242
                                                                 --------        --------
Total Liabilities and Stockholders' Equity..................     $460,336        $449,616
                                                                 ========        ========
</TABLE>

            See notes to condensed consolidated financial statements

                                       3
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

                    (FORMERLY MERKERT AMERICAN CORPORATION)

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

    (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                               THREE MONTHS     THREE MONTHS
                                                                  ENDED            ENDED
                                                              SEPTEMBER 30,    SEPTEMBER 30,
                                                                   2000             1999
                                                              --------------   --------------
<S>                                                           <C>              <C>
Revenues:
  Commissions...............................................    $    89,547      $    66,158
  Sales.....................................................          9,476           10,710
                                                                -----------      -----------
    Revenues................................................         99,023           76,868
Expenses:
  Cost of sales.............................................          8,245            9,391
  Selling expenses..........................................         73,849           44,458
  General and administrative expenses.......................         16,746           20,258
  Depreciation..............................................          2,151            1,107
  Amortization..............................................          4,965            2,056
  Restructuring and other nonrecurring charges..............         21,971           13,290
                                                                -----------      -----------
    Operating Expenses......................................        127,927           90,560
                                                                -----------      -----------

Operating loss..............................................        (28,904)         (13,692)

Other income (expenses):
  Interest expense..........................................         (8,919)          (4,158)
  Other expense.............................................            (21)              --
                                                                -----------      -----------
Loss before income taxes....................................        (37,844)         (17,850)
Income tax expense (benefit)................................             38             (760)
                                                                -----------      -----------
Net loss....................................................    $   (37,882)     $   (17,090)
                                                                ===========      ===========
Net loss per share--basic and diluted.......................    $     (1.68)     $     (1.61)
                                                                ===========      ===========
Weighted average shares outstanding--basic and diluted......     22,521,982       10,637,257
                                                                ===========      ===========
</TABLE>

            See notes to condensed consolidated financial statements

                                       4
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

                    (FORMERLY MERKERT AMERICAN CORPORATION)

                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

    (UNAUDITED AND AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                               NINE MONTHS      NINE MONTHS
                                                                  ENDED            ENDED
                                                              SEPTEMBER 30,    SEPTEMBER 30,
                                                                   2000             1999
                                                              --------------   --------------
<S>                                                           <C>              <C>
Revenues:
  Commissions...............................................   $   283,045       $  151,166
  Sales.....................................................        29,114           32,797
                                                               -----------       ----------
    Revenues................................................       312,159          183,963
Expenses:
  Cost of sales.............................................        25,556           29,235
  Selling expenses..........................................       218,969          100,132
  General and administrative expenses.......................        52,748           45,203
  Depreciation..............................................         5,510            1,957
  Amortization..............................................        14,335            4,214
  Restructuring and other nonrecurring charges..............        21,971           13,290
                                                               -----------       ----------
    Operating Expenses......................................       339,089          194,031
                                                               -----------       ----------

  Operating loss............................................       (26,930)         (10,068)

Other income (expenses):
  Interest expense..........................................       (22,309)          (8,104)
  Other income..............................................           132               --
                                                               -----------       ----------

Loss before income taxes....................................       (49,107)         (18,172)
Income tax expense..........................................            72               --
                                                               -----------       ----------
Net loss....................................................   $   (49,179)      $  (18,172)
                                                               ===========       ==========

Net loss per share--basic and diluted.......................   $     (2.54)      $    (2.12)
                                                               ===========       ==========

Weighted average shares outstanding--basic and diluted......    19,335,993        8,555,514
                                                               ===========       ==========
</TABLE>

            See notes to condensed consolidated financial statements

                                       5
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

                    (FORMERLY MERKERT AMERICAN CORPORATION)

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                      (UNAUDITED AND AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                               NINE MONTHS      NINE MONTHS
                                                                  ENDED            ENDED
                                                              SEPTEMBER 30,    SEPTEMBER 30,
                                                                   2000             1999
                                                              --------------   --------------
<S>                                                           <C>              <C>
Cash flows from operating activities:
Net loss....................................................     $(49,179)        $(18,172)
Adjustments to reconcile net loss to net cash used in
  operating activities:
  Depreciation..............................................        5,510            1,957
  Amortization..............................................       14,335            4,214
  Restructuring and other nonrecurring charges..............       21,971           13,290
  Other noncash operating costs.............................        3,008              485
  Changes in operating assets and liabilities:
    Restricted cash.........................................          343              580
    Accounts receivable.....................................      (10,338)           5,374
    Income taxes receivable.................................           --            2,521
    Prepaid expenses and other current assets...............           22             (271)
    Inventory...............................................          (65)             472
    Other long-term assets..................................          187              564
    Accounts payable........................................       10,413           (9,502)
    Accrued expenses........................................      (14,373)          (2,798)
                                                                 --------         --------
Net cash used in operating activities.......................      (18,166)          (1,286)
Cash flows from investing activities:
Purchases of property and equipment.........................         (917)          (1,151)
Proceeds from disposal of assets............................        6,537               --
Purchase of businesses, net of cash acquired................      (12,687)          (3,936)
                                                                 --------         --------
Net cash used in investing activities.......................       (7,067)          (5,087)
Cash flows from financing activities:
Restricted cash.............................................           --            1,685
Borrowings under credit facility............................       22,137           16,300
Proceeds from issuance of promissory notes..................        9,750               --
Proceeds from stock issuance, net of related fees...........       24,500            4,046
Fees related to the New Senior Credit Facility and pending
  tender offer..............................................       (5,386)            (254)
Principal payments on notes payable and other long-term
  obligations...............................................      (25,768)         (12,151)
                                                                 --------         --------
Net cash provided by financing activities...................       25,233            9,626
                                                                 --------         --------
Net change in cash..........................................           --            3,253
Cash at beginning of period.................................           --            1,185
                                                                 --------         --------
Cash at end of period.......................................     $     --         $  4,438
                                                                 ========         ========
Supplemental disclosures of:
Cash flows information--
  Cash payments for interest................................     $ 16,236         $  6,827
                                                                 ========         ========
  Cash payments for income taxes............................     $    329         $     27
                                                                 ========         ========
Non cash flows information--
  Purchase price financed with debt.........................     $ 16,185         $ 10,473
                                                                 ========         ========
  Purchase price financed with equity.......................     $     --         $ 63,431
                                                                 ========         ========
  Net liabilities assumed...................................     $  3,424         $128,884
                                                                 ========         ========
  Allocation of debt value to detachable warrants...........     $  1,700         $     --
                                                                 ========         ========
  Conversion of redeemable preferred stock to common
    stock...................................................     $  9,500         $     --
                                                                 ========         ========
</TABLE>

            See notes to condensed consolidated financial statements

                                       6
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.  PRESENTATION

    The accompanying unaudited condensed consolidated financial statements have
been prepared by Marketing Specialists Corporation (formerly Merkert American
Corporation, the "Company") in accordance with accounting principles generally
accepted in the United States for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements. In the opinion of management, all adjustments consisting of normal
recurring accruals considered necessary to present fairly the financial
position, results of operations and cash flows of the Company for the interim
periods presented have been made. The consolidated results of operations for the
interim periods in 2000 are not necessarily indicative of those that may be
expected for the year ended December 31, 2000.

    This financial information should be read in conjunction with the
consolidated financial statements and notes thereto for the period ended
December 31, 1999, included in the Annual Report on Form 10-K of Marketing
Specialists Corporation and Subsidiaries (formerly Merkert American
Corporation).

    Certain prior-year balances have been reclassified to conform to the
current-year presentation.

2.  OPERATIONS AND ACQUISITIONS

    THE MERGER

    On August 18, 1999, the Company merged with Dallas, Texas-based Richmont
Marketing Specialists Inc. ("RMSI"), one of the largest food brokers in the
United States (the "Merger"). The Company completed the Merger for an aggregate
purchase price of approximately $236.8 million, which included approximately
$3.4 million in cash payments for closing costs, no new debt, $170.0 million in
assumed debt, and $63.4 million in Common Stock and options. Under the terms of
the Merger, RMS1 stockholders received 6,705,551 shares of Common Stock. The
Company also granted certain RMSI stockholders and employees options to purchase
800,000 additional shares of Common Stock at a price equal to $13.50 per share.
In the current year, the Company reduced the option exercise price to $3.00 per
share. See Note 10 for additional information. For financial reporting purposes,
the Company was presented as the acquiring entity, since the Company's
stockholders owned the largest portion of the Common Stock of the combined
Company. Immediately following the Merger, the Company amended its certificate
of incorporation to change its corporate name to "Marketing Specialists
Corporation."

                                       7
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2.  OPERATIONS AND ACQUISITIONS (CONTINUED)
    The following pro forma combined statements of operations information gives
effect to the merger with RMSI as if it had occurred on January 1, 1999, and
excludes restructuring charges (unaudited and amounts in thousands, except share
and per share amounts):

<TABLE>
<CAPTION>
                                                                    PRO-FORMA
                                                                   NINE MONTHS
                                                 PRO-FORMA            ENDED
                                             THREE MONTHS ENDED   SEPTEMBER 30,
                                             SEPTEMBER 30, 1999        1999
                                             ------------------   --------------
<S>                                          <C>                  <C>
Commissions................................     $    93,551        $   284,150
Sales......................................          10,710             32,797
                                                -----------        -----------
Total Revenues.............................         104,261            316,947
EBITDA *...................................           5,078             15,674
Net loss...................................          (5,213)           (19,866)
Net loss per share:
  Basic and diluted........................     $     (0.37)       $     (1.40)
Shares used in computing net loss per
  share:
  Basic and diluted........................      14,194,139         14,186,673
</TABLE>

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

*   represents earnings before interest, income taxes, depreciation and
    amortization and excludes restructuring and other nonrecurring charges

                                       8
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

2.  OPERATIONS AND ACQUISITIONS (CONTINUED)
    OTHER ACQUISITIONS

    In January 2000, the Company acquired Johnson-Lieber, Inc.
("Johnson-Lieber"), a brokerage firm operating in the Seattle, Washington;
Spokane, Washington; Portland, Oregon; Billings, Montana; and Anchorage, Alaska
markets. The Company acquired Johnson-Lieber for an aggregate discounted
purchase price of approximately $10.2 million, which included approximately $3.1
million in cash payments and $7.1 million in new debt and other incentives.

    In April 2000, the Company acquired the Sales Force Companies, Inc. ("Sales
Force"), a full service brokerage firm operating in the Central Region of the
United States. The Company acquired Sales Force for an aggregate discounted
purchase price of approximately $26.8 million, which included approximately
$12.8 million in total estimated cash payments, $9.1 million in new debt, and
$4.9 million in assumed debt. The purchase price was allocated to the net assets
of Sales Force on a preliminary basis (subject to revision) based on their
estimated fair values. The Company has recorded the excess of the purchase price
as goodwill. The Company has engaged an independent outside accounting firm to
review and confirm the final adjusted price for this acquisition based on Sales
Force financial information prepared in accordance with the terms of the stock
purchase agreement.

3.  LOSS PER SHARE

    The following table sets forth the computation of basic and diluted loss per
share (unaudited and amounts in thousands, except share and per share amounts):

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED   THREE MONTHS ENDED
                                           SEPTEMBER 30, 2000   SEPTEMBER 30, 1999
                                           ------------------   ------------------
<S>                                        <C>                  <C>
Numerator:
  Net loss...............................     $   (37,882)         $   (17,090)
Denominator
  Weighted average shares--basic.........      22,521,982           10,637,257
  Dilutive stock options.................              --                   --
  Weighted average shares--assuming
    dilution.............................      22,521,982           10,637,257
  Number of options excluded as they
    would be Anti-dilutive...............       1,566,812            1,518,400
Net loss per share.......................
  Basic and diluted......................     $     (1.68)         $     (1.61)

<CAPTION>
                                           NINE MONTHS ENDED    NINE MONTHS ENDED
                                           SEPTEMBER 30, 2000   SEPTEMBER 30, 1999
                                           ------------------   ------------------
<S>                                        <C>                  <C>
Numerator:
  Net loss...............................     $   (49,179)         $   (18,172)
Denominator
  Weighted average shares--basic.........      19,335,993            8,555,514
  Dilutive stock options.................              --                   --
  Weighted average shares--assuming
    dilution.............................      19,335,993            8,555,514
  Number of options excluded as they
    would be Anti-dilutive...............       1,566,812            1,518,400
Net loss per share
  Basic and diluted......................     $     (2.54)         $     (2.12)
</TABLE>

                                       9
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4.  SEGMENT INFORMATION

    The Company operates in two principal segments: Food Brokerage and Private
Label in the United States. The Company provides outsourced sales and marketing
services to manufacturers of branded food and non-food products in the Food
Brokerage segment. The Private Label segment includes the Company's private
label division, which procures private label products on behalf of certain
retailers as well as the distribution of price marking equipment and other
ancillary products to retailers.

    Information on the Company's business segments is as follows (unaudited and
amounts in thousands):

<TABLE>
<CAPTION>
                                           THREE MONTHS ENDED   THREE MONTHS ENDED
                                           SEPTEMBER 30, 2000   SEPTEMBER 30, 1999
                                           ------------------   ------------------
<S>                                        <C>                  <C>
Revenues
  Food Brokerage.........................       $ 89,547             $ 66,158
  Private Label..........................          9,476               10,710
                                                --------             --------
                                                $ 99,023             $ 76,868
                                                ========             ========
Operating Profit (Loss)
  Food Brokerage.........................       $(10,252)            $  8,317
  Private Label..........................            567                1,320
  General Corporate Expenses.............        (19,219)             (23,329)
                                                --------             --------
                                                $(28,904)            $(13,692)
                                                ========             ========

<CAPTION>
                                           NINE MONTHS ENDED    NINE MONTHS ENDED
                                           SEPTEMBER 30, 2000   SEPTEMBER 30, 1999
                                           ------------------   ------------------
<S>                                        <C>                  <C>
Revenues
  Food Brokerage.........................       $283,045             $151,166
  Private Label..........................         29,114               32,797
                                                --------             --------
                                                $312,159             $183,963
                                                ========             ========
Operating Profit (Loss)
  Food Brokerage.........................       $ 24,380             $ 18,484
  Private Label..........................          1,545                3,562
  General Corporate Expenses.............        (52,855)             (32,114)
                                                --------             --------
                                                $(26,930)            $(10,068)
                                                ========             ========
Identifiable Assets at September 30,
  2000:
  Food Brokerage.........................       $ 40,815
  Private Label..........................          5,403
  General Corporate Assets...............        414,118
                                                --------
                                                $460,336
                                                ========
</TABLE>

                                       10
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5.  LONG-TERM OBLIGATIONS

    Long-term obligations consist of the following (amounts in thousands):

<TABLE>
<CAPTION>
                                              SEPTEMBER 30, 2000    DECEMBER 31, 1999
                                              -------------------   -----------------
                                                  (UNAUDITED)
<S>                                           <C>                   <C>
10.125% Senior Subordinated Notes, due
  December 15, 2007.........................       $100,000             $100,000
Credit Facility:
  Revolving Credit..........................         42,437               20,300
  Term Loan.................................         33,725               43,750
Covenants not to compete....................         20,990               24,762
Bank--mortgage loans........................         12,576               12,781
Loans from affiliates.......................          9,750                   --
Notes payable...............................         48,403               32,379
Acquisition-related deferred compensation...         35,406               40,660
Obligations under capital leases............          1,093                1,254
                                                   --------             --------
                                                    304,380              275,886
Less current maturities.....................        (63,094)             (48,055)
                                                   --------             --------
  Net long-term obligations.................       $241,286             $227,831
                                                   ========             ========
</TABLE>

    SENIOR SUBORDINATED NOTES

    In December 1997, concurrently with the sale by RMSI of $100.0 million of
10 1/8% Senior Subordinated Notes due 2007 (the "Issued Notes"), RMSI entered
into an Exchange and Registration Rights Agreement with the initial purchaser of
the Issued Notes. Under the terms of that agreement, RMSI agreed to file a
registration statement regarding the exchange of the Issued Notes for new notes
registered under the Securities Act of 1933, and to offer the holders of the
Issued Notes an opportunity to exchange their unregistered notes for registered
notes.

    On June 21, 1999, RMSI filed a Registration Statement on Form S-4 with the
Securities and Exchange Commission to register $100.0 million of new notes (the
"Registered Notes"). Subsequently, RMSI completed an exchange of the Issued
Notes for the Registered Notes. The Registered Notes are identical in all
material respects to the Issued Notes, except for transfer restrictions and
registration rights. The Company assumed this outstanding indebtedness in
connection with the Merger.

    The Registered Notes are unsecured and will be subordinated in right of
payment to all existing and future senior indebtedness of the Company. The
Registered Notes are fully and unconditionally guaranteed on an unsecured,
senior subordinated, joint and several basis by certain guarantor wholly-owned
subsidiaries of the Company as defined in the Registration Statement, which
comprise substantially all the direct and indirect subsidiaries of the Company.
The Company is a holding company with no assets or operations other than its
interests in its subsidiaries. Separate financials and other disclosures for
such subsidiaries have not been presented due to management determination that
such information is not material for investors.

    Interest on the Registered Notes is payable semiannually on June 15 and
December 15 of each year, commencing June 15, 1998. The principal on the
Registered Notes is payable on December 15, 2007, the maturity date. Except as
described below, the Company may not redeem the Registered Notes prior to

                                       11
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5.  LONG-TERM OBLIGATIONS (CONTINUED)
December 15, 2002. On or after such date, the Company may redeem the Registered
Notes, in whole or in part, at the following redemption prices: 2002--105.063%;
2003--103.375%; 2004--101.688%; 2005 or thereafter--100.000%, together with
accrued and unpaid interest, if any, to the date of redemption. The Registered
Notes are not subject to any sinking fund requirement. Upon a change of control,
as defined (not triggered by the merger with RMSI), each holder of the
Registered Notes will have the right to require the Company to make an offer to
repurchase such holder's notes at a price equal to 101% of the principal amount
thereof, together with accrued and unpaid interest, if any, to the date of
repurchase.

    INITIAL CREDIT FACILITY AND TERM LOAN

    The Initial Credit Facility was amended and restated on August 18, 1999,
among the Company and First Union National Bank, as agent. The Initial Credit
Facility, as amended, refinanced, in part, the Credit Agreement dated as of
October 14, 1997, as amended and restated, among RMSI and The Chase Manhattan
Bank, as agent (the "Former Chase Facility") at the effective time of the
Merger. The Former Chase Facility provided for a revolving credit facility with
a maximum borrowing capacity of $25.0 million. As of the effective time of the
Merger, the Initial Credit Facility had outstanding borrowings under the Initial
Revolving Credit of approximately $11.1 million, and the Former Chase Facility
had no outstanding borrowings. As of March 15, 2000, the Initial Credit Facility
had outstanding borrowings under the Initial Revolving Credit of approximately
$17.3 million, plus an outstanding letter of credit in the amount of
approximately $1.1 million. The letter of credit secures the Company's rental
payment obligations for its corporate headquarters in Dallas. In addition, the
outstanding balance of the Initial Term Loan was approximately $43.8 million.

    The borrowings of the Company under the Initial Credit Facility were secured
by a lien on substantially all of the Company's and its subsidiaries tangible
and intangible property. In addition, the Company's obligations under the
Initial Credit Facility were jointly and severally guaranteed by all of the
Company's operating subsidiaries.

    AMENDED TERM LOAN

    On March 30, 2000, the Company became a party to a Second Amended and
Restated Credit Agreement among the Company and First Union National Bank, as
agent (the "Amended Term Loan"). The Amended Term Loan consists of a 2-year,
secured $35.0 million term loan. Under the Amended Term Loan, the principal
amount of the term loan was reduced from approximately $43.8 million (as of
December 31, 1999) to $35.0 million.

    The Amended Term Loan is secured by a lien on substantially all of the
Company's and its subsidiaries' tangible and intangible property. In addition,
the Amended Term Loan will be jointly and severally guaranteed by all current
and future subsidiaries of the Company. Interest is payable on the Amended Term
Loan at a rate based on one of two customary interest rates plus an additional
interest margin of 375 or 500 basis points, as applicable.

    The Amended Term Loan requires the Company to comply with various
affirmative and negative covenants, including, among others: (i) the maintenance
of certain financial ratios, (ii) restrictions on additional indebtedness, (iii)
restrictions on liens, guarantees, dividends and the disposition of assets and
(iv) restrictions on certain mergers, consolidations, and acquisitions. The
Amended Term Loan contains customary events of default, including cross-default
provisions relating to the Registered Notes. The

                                       12
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5.  LONG-TERM OBLIGATIONS (CONTINUED)
Company was not in compliance with certain covenants related to the Amended Term
Loan as of September 30, 2000; however, the Company obtained a waiver of the
defaults. See Note 11 for additional information.

    In connection with the Amended Term Loan, the Company issued to an affiliate
of First Union National Bank detachable warrants to purchase up to 4.0% of the
Company's Common Stock on a diluted basis. The exercise price of the warrants
will be nominal, and the warrants will be exercisable at any time after the
second anniversary of the issuance of the warrants. The proceeds of the Amended
Term Loan were allocated between debt and warrants based on their respective
estimated fair market values.

    The letter of credit outstanding under the Initial Credit Facility was
replaced on March 29, 2000, by a $1.1 million letter of credit issued for the
account of Richmont Capital Partners I, L.P. ("RCPI"), an affiliate of MS
Acquisition Limited ("MS Acquisition"), the Company's largest shareholder. The
Company in turn issued to RCPI a reimbursement note subordinated in right of
payment to the Registered Notes, in the amount of the letter of credit. The
promissory note will become payable if the letter of credit is drawn.

    NEW REVOLVER

    On March 30, 2000, the Company also became a party to a Credit Agreement
among the Company, certain of its subsidiaries and The Chase Manhattan Bank, as
agent, and the lenders named therein (the "New Revolver", and together with the
Amended Term Loan, the "New Senior Credit Facility"). The New Revolver consists
of a 2-year, senior secured $50.0 million revolving line of credit, subject to a
borrowing base equal to a specified percentage of eligible receivables. Funds
advanced under the New Revolver were used by the Company to repay a portion of
outstanding amounts under the Initial Credit Facility, to partially finance the
acquisition of Sales Force, to finance the Company's working capital and capital
expenditure requirements in the ordinary course of business, and to pay fees and
expenses relating to the closing of the New Senior Credit Facility.

    The New Revolver is secured by a first priority security interest in cash
(excluding restricted cash), cash equivalents, accounts receivable and inventory
of the Company and its subsidiaries and proceeds thereof but not in assets that
are the proceeds of equipment, fixtures, real estate, intellectual property or
the stock of subsidiaries. In addition, Sales Force, Paul Inman
Associates, Inc. ("Inman"), Marketing Specialists Sales Company ("MSSC") and
Bromar, Inc. ("Bromar") are co-borrowers under the New Revolver, jointly and
severally liable for all borrowings and other related obligations thereunder.
Interest is payable on the New Revolver at a rate based on one of two customary
interest rates plus an additional interest margin ranging from 150 to 350 basis
points. The applicable margin is determined based on certain financial ratios of
the Company.

    The New Revolver requires the Company to comply with various affirmative and
negative covenants, including, among others: (i) the maintenance of certain
financial ratios, (ii) restrictions on additional indebtedness, (iii)
restrictions on liens, guarantees, dividends and the disposition of assets and
(iv) restrictions on certain mergers, consolidations, and acquisitions. The New
Revolver contains customary events of default, including cross-default
provisions relating to the Registered Notes. The Company was not in compliance
with certain covenants related to the New Revolver as of September 30, 2000;
however, the Company obtained a waiver of the defaults and negotiated certain
amendments to the New Revolver. See Note 11 for additional information.

                                       13
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

5.  LONG-TERM OBLIGATIONS (CONTINUED)
    Amounts borrowed under the New Revolver are guaranteed by RCPI, subject to a
maximum guaranty amount of $10.0 million. The RCPI guaranty will be released by
the lenders if the Company achieves $40.0 million of EBITDA for the 9-month
period ended December 31, 2000, or if the Company achieves $50.0 million of
EBITDA during any subsequent 12 month period.

    As of September 30, 2000, the Company capitalized approximately $5.1 million
in eligible costs related to obtaining the New Senior Credit Facility. The
Company plans to expense these costs over a 24-month period, the term of the New
Senior Credit Facility.

    LOANS FROM MS ACQUISITION

    On August 17, 2000, the Company issued a $4.75 million promissory note to MS
Acquisition. The Registered Notes and the New Senior Credit Facility are senior
to the $4.75 million promissory note. The $4.75 million promissory note bears
interest at a rate equal to the sum of an interest margin of 2.75% plus the
applicable prime rate on the last business day of the quarter for which interest
is payable. Interest is payable quarterly in arrears, commencing on
September 30, 2000, and will continue through the principal portion's maturity
date. The principal portion of the $4.75 million promissory note, and any unpaid
accrued interest, will be payable on August 17, 2002, or on demand, under
specified conditions.

    On August 30, 2000, the Company issued a $5.0 million promissory note to MS
Acquisition. The Registered Notes and the New Senior Credit Facility are senior
to the $5.0 million promissory note. The $5.0 million promissory note bears
interest at a rate equal to the sum of an interest margin of 2.75% plus the
applicable prime rate on the last business day of the quarter for which interest
is payable. Interest is payable quarterly in arrears, commencing on
November 20, 2000, and will continue every subsequent 90 days through the
principal portion's maturity date. The principal portion of the $5.0 million
promissory note, and any unpaid accrued interest, will be payable on August 30,
2002, or on demand, under specified conditions.

    The Company used the proceeds from both promissory notes for general
corporate purposes.

    The Company is not permitted to pay the principal and unpaid and accrued
interest on either promissory note on demand if the Company's borrowing base 30
days prior to a payment date is less than $10.0 million or 1/4th of the sum of
the Company's payroll for the last four consecutive pay periods, whichever is
greater. See Note 11 for additional information.

6.  INTANGIBLE ASSETS

    Intangible assets include goodwill, covenants not to compete, Manufacturer
relationships, and trained workforce. Goodwill represents the excess of the
purchase price over the fair value of the net assets of various businesses
acquired. The recorded goodwill is amortized over its estimated useful life,
which ranges from 20 to 40 years. Non-compete assets are recorded at fair value
and are amortized over the term of the related agreement, generally 3 to 10
years. Manufacturer relationships and trained workforce are recorded at
estimated fair value based on independent appraisals and are amortized over
periods ranging from 1 to 10 years.

    As a result of the Company's substantial operating losses through
September 30, 2000, the Company is re-evaluating the realizability of its
intangible assets. The Company currently believes that no impairment has
occurred.

                                       14
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

7.  RESTRUCTURING CHARGE AND OTHER NONRECURRING CHARGES

    RESTRUCTURING CHARGE RELATED TO FORMER PERSONNEL

    In the third quarter of 2000, the Company terminated approximately 180
employees, primarily at the operations management level, as part of its ongoing
efforts to consolidate its operations and centralize its corporate headquarters.
The Company accrued and expensed approximately $2.5 million in severance and
termination benefits associated with this change, which appear as a reduction in
the calculation of the Company's income from continuing operations.

    NONRECURRING CHARGE RELATED TO TRADE RECEIVABLES

    During the third quarter of 2000, the Company provided additional reserves
for certain trade receivables related to the continuing integration of business
processes into its corporate headquarters and adopted a more conservative policy
to fully reserve its trade receivables outstanding in excess of 120 days.
Management's change in the estimated realizable value of its receivables
resulted in the recognition of approximately $19.5 million in nonrecurring
charges, which appear as a reduction in the calculation of the Company's income
from continuing operations.

8.  INCOME TAXES

    The Company's income tax provision varies from the statutory rate primarily
because of the difference in book and tax treatment of intangible assets, the
non-deductibility of certain portions of meal and entertainment expenses and
officer's life insurance premiums, state income taxes imposed by the various
states on the Company's operations, and the valuation allowance provided for
deferred tax assets that may not be realizable in the future.

9.  ISSUANCE AND SUBSEQUENT CONVERSION OF REDEEMABLE CONVERTIBLE PREFERRED STOCK

    On June 23, 2000, the Board of Directors of the Company authorized and
provided for the issuance of up to 10,000 shares of 8.0% Convertible
Paid-In-Kind Preferred Stock, par value $0.01 per share, with a stated value of
$1,000 per share (the "Preferred Stock").

    Each share of Preferred Stock is convertible into that number of shares of
Common Stock equal to the result obtained by dividing the stated value of the
Preferred Stock by the conversion price in effect at the conversion date.

    All dividends on issued shares of the Preferred Stock are cumulative,
whether or not the dividends are earned or declared, on a daily basis from the
issue date and payable quarterly in arrears on each dividend payment date. Even
if not declared, all unpaid dividends will compound quarterly at an annual
dividend rate equal to 8.0%, or the applicable dividend rate.

    On June 22, 2010, the Company will be obligated to redeem, to the extent of
funds legally available, all outstanding shares of Preferred Stock at a
redemption price equal to 100% of the liquidation preference per share. The
liquidation preference per share will be equal to the greater of $1,000 per
share or the amount that the equivalent number of shares of Common Stock (based
on the conversion rate applicable at the liquidation date) would be entitled to
receive, plus any unpaid dividends.

    On June 23, 2000, the Company issued 5,000 shares of Preferred Stock to MS
Acquisition for an aggregate purchase price of $5.0 million pursuant to the
terms of a preferred stock purchase agreement.

                                       15
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

9.  ISSUANCE AND SUBSEQUENT CONVERSION OF REDEEMABLE CONVERTIBLE PREFERRED STOCK
    (CONTINUED)
On August 8, 2000, the Company issued an additional 4,500 shares of Preferred
Stock to MS Acquisition for an aggregate purchase price of $4.5 million pursuant
to the terms of a preferred stock purchase agreement. The cash proceeds were
used for general corporate purposes.

    On July 27, 2000, the Company received early termination of the waiting
period in connection with its Hart-Scott-Rodino Antitrust Improvement Act filing
thereafter allowing the conversion of the Preferred Stock to Common Stock of the
Company. On August 21, 2000, the 9,500 shares of Preferred Stock were converted
into 6,234,414 shares of Common Stock. Per the terms of the preferred stock
purchase agreements, each share of Preferred Stock was converted into
approximately 656.25 shares of Common Stock (i.e., the Preferred Stock's stated
value of $1,000 divided by the conversion price of $1.5238).

10.  STOCK OPTION PLAN

    The Company maintains the Merkert American Corporation 1998 Stock Option and
Incentive Plan (the "1998 Stock Plan," as amended). At the annual meeting of
stockholders held in June 2000, the Company's stockholders approved an increase
of the maximum number of shares of Common Stock available under the Company's
1998 Stock Plan. In January 2000, the Company granted options to purchase
approximately 1,300,000 shares of Common Stock to certain board members,
executives and key employees under the Stock Option. The options vest over 3
years from the grant date and are exercisable at $3.00 per share.
Simultaneously, the Company (with the consent of the affected individuals)
cancelled options to purchase approximately 980,000 shares of Common Stock at
exercise prices ranging from $3.00 to $15.00 per share. The newly issued stock
options will be treated as variable options for accounting purposes, and the
Company will record compensation expense over the vesting period to the extent
that the fair value of the Common Stock exceeds the option exercise price.

11.  SUBSEQUENT EVENTS

    PLEDGE OF ASSETS BY MS ACQUISITION

    On October 5, 2000, MS Acquisition entered into a Deposit Security Agreement
with The Chase Manhattan Bank ("Chase"), wherein MS Acquisition has pledged $9.0
million and transferred to Chase certificates of deposit in such amount to
assist the Company by providing it with additional borrowing availability under
the New Revolver. Chase currently holds a lien against the pledge by MS
Acquisition.

    PROPOSED SALE OF IMPROVED REAL PROPERTY IN CHARLOTTE, NORTH CAROLINA

    On October 26, 2000, the Company entered into a definitive agreement to sell
improved real property located in Charlotte, North Carolina, for approximately
$2.6 million, before applicable closing costs.

    ISSUANCE OF SERIES B CONVERTIBLE PAID-IN-KIND PREFERRED STOCK TO MS
     ACQUISITION

    On November 1, 2000, the Company issued 12,397 shares of Series B 8.0%
Convertible Paid-In-Kind Preferred Stock, $0.01 par value per share (the "Series
B Preferred Stock) to MS Acquisition for an aggregate purchase price of
approximately $12.4 million pursuant to the terms of a preferred stock purchase
agreement. The purchase price consisted of the cancellation of the $4.75 million
promissory note and the $5.0 million promissory note, including all accrued and
unpaid interest, plus an additional cash

                                       16
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

11.  SUBSEQUENT EVENTS (CONTINUED)
payment of approximately $2.5 million to the Company. The incremental proceeds
from the issuance of the Series B Preferred Stock were used for general
corporate purposes.

    ISSUANCE OF PROMISSORY NOTE TO MS ACQUISITION

    On November 9, 2000, the Company issued a $2.5 million promissory note. This
promissory note is subordinate to the senior debt of the Company. The proceeds
were used for general corporate purposes. The $2.5 million promissory note bears
interest at a rate equal to the sum of an interest margin of 2.75% plus the
applicable prime rate on the last business day of the quarter for which interest
is payable. Interest is payable quarterly in arrears, commencing on
December 31, 2000, and will continue through the principal portion's maturity
date. The principal portion of the $2.5 million promissory note and any unpaid
accrued interest, will be payable on November 9, 2002, or on demand, under
specified conditions. The Company is not permitted to repay the principal and
unpaid and accrued interest on the $2.5 million promissory note on demand if the
Company's borrowing base 30 days prior to a payment date is not greater than the
greater of (i) $10.0 million, or (ii) 1/4th of the sum of the Company's payroll
for the last four consecutive pay periods.

    AMENDED CREDIT AGREEMENT

    As discussed in Note 5, the Company was not in compliance with certain
covenants related to the New Revolver. On November 17, 2000, the Company became
party to an amendment to the Credit Agreement among the Company, certain of its
subsidiaries, The Chase Manhattan Bank, as the agent (the "Agent") and the
lenders parties thereto (the "Amended Credit Agreement"). The Amended Credit
Agreement provides for an increase in the maximum amount available under the New
Revolver from $50.0 million to a maximum commitment of $60.0 million (the
"Increase"), which is comprised of a $41.0 million variable commitment (the
"Tranche A Notes") and a subordinated $19.0 million fixed commitment (the
"Tranche B Notes"). MS Acquisition must purchase a 100% participation interest
in the Tranche B Notes.

    The Tranche A Notes provide for a $41.0 million revolving line of credit
(the "Amended Revolver"), which accrues interest at a rate equal to the Base
Rate (a reference rate based on the prime rate) plus 2.25%. The Amended Revolver
will revolve up to the lesser of $41.0 million or the Borrowing Base, which is a
function of the Company's eligible receivables and the Advance Percent
determined by the Agent. As part of the Amended Credit Agreement, the Agent has
decreased the Advance Percent, thereby decreasing the Borrowing Base (the
"Borrowing Base Amendment"). The Company must fulfill all payment obligations
under the Amended Revolver before making any interest payments on the Tranche B
Notes. The Tranche A Notes and any accrued and unpaid interest will mature on
March 30, 2002.

    The Company would be in default on the Tranche A Notes in December of 2000
if availability under the Borrowing Base, after the Company makes the required
December 15, 2000, interest payment on the Registered Notes, falls below
$5.0 million. The Company may avoid default on the Tranche A Notes if the
Company receives additional funds prior to the interest payment, in the form of
allowable new equity, that allow the Company to maintain availability under the
Borrowing Base of at least $5.0 million. MS Acquisition has agreed to fund this
amount to the extent required, and, as a result, the Company expects to remain
in compliance with the covenants related to the Tranche A Notes.

    The Tranche B Notes must be funded no later than December 15, 2000. MS
Acquisition has the option to fund the Tranche B Notes in two installments: one
in the amount of $14.0 million no later than

                                       17
<PAGE>
               MARKETING SPECIALISTS CORPORATION AND SUBSIDIARIES

  NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

11.  SUBSEQUENT EVENTS (CONTINUED)
November 21, 2000, and another in the amount of $5.0 million no later than
December 15, 2000. If MS Acquisition makes the first installment by
November 21, 2000, the maximum commitment under the Amended Credit Agreement
will remain at $55.0 million until MS Acquisition funds the second installment
by December 15, 2000. If MS Acquisition funds the second installment by
December 15, 2000, Chase will release its lien on the $9.0 million pledge by MS
Acquisition. The Tranche B Notes will bear interest at a rate equal to the Base
Rate plus 2.25%. The Tranche B Notes and any accrued and unpaid interest will
mature on March 30, 2002. The fixed commitment under the Tranche B Notes is not
subject to the Borrowing Base.

    AMENDMENT TO AMENDED TERM LOAN

    On November 17, 2000, the Company also became party to a First Amendment to
the Credit Agreement among the Company, certain of its subsidiaries as
guarantors, and First Union National Bank, as agent (the "First Union Amended
Credit Agreement"). The First Union Amended Credit Agreement amends the Amended
Term Loan and provides for the consent of First Union to the Increase, the
Borrowing Base Amendment, and the repayment of the $2.5 million promissory note
to MS Acquisition. The First Union Amended Credit Agreement also amends the
Amended Term Loan to reflect the terms of the Amended Credit Agreement.

    WAIVER OF COMPLIANCE WITH COVENANTS RELATED TO THE NEW SENIOR CREDIT
     FACILITY

    On November 17, 2000, the Company paid a fee of approximately $0.2 million
as consideration in obtaining a waiver of the defaults on the New Senior Credit
Facility.

                                       18
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

    This Report on Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. The words "believe,"
"expect," "anticipate," "intend," "estimate," "assume," and other similar
expressions, which are predictions of or indicate future events and trends that
do not relate solely to historical matters, identify forward-looking statements.
Reliance should not be placed on forward-looking statements because they involve
known and unknown risks, uncertainties and other factors, that in some cases are
beyond the control of the Company. These items may cause the actual results,
performance or achievements of the Company to differ materially from the
anticipated future results, performance or achievements expressed or implied by
such forward-looking statements.

INTRODUCTION

    The Company was incorporated on March 4, 1998, to create a leading national
food brokerage firm, providing outsourced sales, merchandising and marketing
services to manufacturers, suppliers and producers of food products and consumer
goods ("Manufacturers"). The Company acts as an independent sales and marketing
representative, selling grocery and consumer products on behalf of Manufacturers
and coordinating the execution of Manufacturers' marketing programs with
retailers, wholesalers, mass merchandisers, supercenters, membership warehouses,
drug stores and specialty food outlets ("Retailers"). The Company's principal
source of revenue is commissions it receives from Manufacturers. The Company's
other activities include managing private label programs on behalf of selected
Retailers.

ACQUISITION HISTORY

    The acquisitions noted below were accounted for using the purchase method of
accounting. The intangible assets resulting from each acquisition are being
amortized over their estimated useful lives. The operating results for each
acquisition have been included in the Company's operating results for all
periods subsequent to the acquisition date.

    In January 2000, the Company acquired Johnson-Lieber for an aggregate
discounted purchase price of approximately $10.2 million, which included
approximately $3.1 million in cash payments and $7.1 million in new debt and
other incentives.

    In April 2000, the Company acquired Sales Force for an aggregate discounted
purchase price of approximately $26.8 million, which included approximately
$12.8 million in total estimated cash payments, $9.1 million in new debt, and
$4.9 million in assumed debt.

RESULTS OF OPERATIONS

    The following defined terms are used in conjunction with the Company's
discussion of operating results.

    REVENUES.  Revenues are derived mainly from commissions earned from
Manufacturers based on the Manufacturers' invoices to Retailers for products
sold. Commissions are usually expressed as a percentage of the invoice as agreed
by contract between the Manufacturer and broker. Commission rates typically
range from 3% for full brokerage services to 1% for retail-only services. The
Company also derives revenues, referred to as "Sales," from the sale of products
including private label packaging materials and frozen products, such as fruits
and vegetables, to certain Retailers, and other products for certain
Manufacturers.

    COST OF SALES.  Cost of sales are primarily the direct cost of private label
products sold by the Company, such as the cost of packaging and frozen
vegetables purchased from suppliers.

                                       19
<PAGE>
    SELLING EXPENSES.  Selling expenses consist predominately of salaries,
employee benefits and incentives for personnel directly involved in providing
services to Manufacturers and Retailers. Other selling expenses include, among
other things, automobiles utilized by the sales personnel, promotional expenses,
and travel and entertainment.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
consist primarily of salaries and employee benefits for administrative and
corporate personnel, rent, occupancy and other office expenses, information
technology, communications and insurance.

    DEPRECIATION AND AMORTIZATION EXPENSES.  Depreciation and amortization
expenses relate to property, plant and equipment and intangible assets,
including goodwill and non-compete agreements.

RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2000 COMPARED TO QUARTER ENDED
  SEPTEMBER 30, 1999

    COMMISSIONS.  Commissions increased approximately $23.3 million, or 35.2%,
to $89.5 million for the quarter ended September 30, 2000, as compared to $66.2
million for the same period in 1999. This increase is primarily related to the
inclusion of a full quarter of commissions for RMSI in 2000, compared to
approximately 1.5 months for the same period in 1999. On a pro forma basis,
commissions decreased approximately $4.1 million, or (4.4)%, for the quarter
ended September 30, 2000, as compared to $93.6 million for the same period in
1999. This decrease represents the effects of Manufacturer conflicts associated
with the Merger.

    SALES AND GROSS PROFIT.  Sales decreased to approximately $9.5 million for
the quarter ended September 30, 2000, from $10.7 million for the quarter ended
September 30, 1999, due to a decreasing emphasis on private label business.
Gross profit on sales decreased to $1.2 million for the quarter ended
September 30, 2000, from $1.3 million for the same period in 1999.

    SELLING EXPENSES.  Selling expenses increased approximately $29.4 million,
or 66.2%, to $73.8 million for the quarter ended September 30, 2000, as compared
to $44.4 million for the same period in 1999. The increase is primarily related
to the inclusion of a full quarter of selling expenses for RMSI in 2000,
compared to approximately 1.5 months for the same period in 1999.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
decreased approximately $3.5 million, or (17.3)%, to $16.7 million for the
quarter ended September 30, 2000, as compared to $20.2 million for the same
period in 1999. General and administrative costs, as a percentage of revenues,
decreased to 16.9% for the quarter ended September 30, 2000, from 26.4% for the
same period in 1999, due to the cost saving measures initiated in 1999 relating
to the elimination of duplicative facilities resulting from the Merger.

    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expenses
increased approximately $4.0 million, or 129.0%, to $7.1 million for the quarter
ended September 30, 2000, as compared to $3.1 million for the same period in
1999. This increase is primarily the result of the effect of the goodwill and
other intangible assets associated with the Merger.

    RESTRUCTURING AND OTHER NONRECURRING CHARGES.  Restructuring and other
nonrecurring charges for the quarter ended September 30, 2000, included
approximately $2.5 million in restructuring charges related to severance and
other termination benefits given to former employees and approximately $19.5
million in additional reserves for certain trade receivables related to the
ongoing integration of business processes into the Company's corporate
headquarters and the adoption of a more conservative policy to fully reserve
trade receivables outstanding greater than 120 days. The $13.3 million in
nonrecurring charges for the same period in 1999 included restructuring charges
for vacated leased facilities and terminated employees.

                                       20
<PAGE>
    INTEREST EXPENSE.  Interest expense increased approximately $4.8 million, or
117.1%, to $8.9 million for the quarter ended September 30, 2000, as compared to
$4.1 million for the same period in 1999. The increase in 2000 is attributable
to increased borrowing on the New Senior Credit Facility and interest on the
Registered Notes.

    LOSS BEFORE INCOME TAXES.  As a result of the factors noted above, loss
before income taxes was approximately ($37.8) million for the quarter ended
September 30, 2000, as compared to a loss of ($17.9) million for the same period
in 1999.

    PROVISION FOR INCOME TAXES.  The Company has not recorded the full tax
benefit associated with historical losses since its future realizability is not
assured.

    NET LOSS.  As a result of the factors noted above, the Company's net loss
was approximately ($37.9) million for the quarter ended September 30, 2000, as
compared to a net loss of ($17.1) million for the same period in 1999.

    Earnings before interest, taxes, depreciation, amortization and
restructuring and nonrecurring charges decreased to approximately $0.2 million
for the quarter ended September 30, 2000, as compared to $2.8 million for the
same period in 1999, as a result of the factors noted above.

RESULTS FOR THE 9 MONTHS ENDED SEPTEMBER 30, 2000 COMPARED TO 9 MONTHS ENDED
  SEPTEMBER 30, 1999

    COMMISSIONS.  Commissions increased approximately $131.9 million, or 87.2%,
to $283.0 million for the 9 months ended September 30, 2000, as compared to
$151.1 million for the same period in 1999. This increase is primarily related
to the inclusion of a full 9 months of commissions for RMSI in 2000, compared to
approximately 1.5 months for the same period in 1999. On a pro forma basis,
commissions for the 9 months ended September 30, 2000, remained relatively flat
when compared to those for the same period in 1999.

    SALES AND GROSS PROFIT.  Sales decreased to approximately $29.1 million for
the 9 months ended September 30, 2000, from $32.8 million for the same period in
1999 due to a decreasing emphasis on private label business. Gross profit on
sales remained constant at $3.6 million for the 9 months ended September 30,
2000 and the same period in 1999.

    SELLING EXPENSES.  Selling expenses increased approximately $118.9 million,
or 118.8%, to $219.0 million for the 9 months ended September 30, 2000, as
compared to $100.1 million for the same period in 1999. The increase is
primarily related to the inclusion of a full 9 months of selling expenses for
RMSI in 2000, compared to approximately 1.5 months for the same period in 1999.

    GENERAL AND ADMINISTRATIVE EXPENSES.  General and administrative expenses
increased approximately $7.5 million, or 16.6%, to $52.7 million for the 9
months ended September 30, 2000, as compared to $45.2 million for the same
period in 1999. General and administrative costs, as a percentage of revenues,
decreased to 16.9% for the 9 months ended September 30, 2000, from 24.6% for the
same period in 1999, due to the cost saving measures initiated in 1999 related
to the elimination of duplicative facilities resulting from the Merger.

    DEPRECIATION AND AMORTIZATION.  Depreciation and amortization expenses
increased approximately $13.6 million, or 221.0%, to $19.8 million for the
9 months ended September 30, 2000, as compared to $6.2 million for the same
period in 1999. This increase is primarily the result of the effect of the
goodwill and other intangible assets associated with the Merger.

    RESTRUCTURING AND OTHER NONRECURRING CHARGES.  Restructuring and other
nonrecurring charges for the 9 months ended September 30, 2000, included
approximately $2.5 million in restructuring charges related to severance and
other termination benefits given to former employees and approximately
$19.5 million in

                                       21
<PAGE>
additional reserves for certain receivables related to the ongoing integration
of business processes into the Company's corporate headquarters and the adoption
of a more conservative policy to fully reserve trade receivables outstanding
greater than 120 days. The $13.3 million in nonrecurring charges for the same
period in 1999 included restructuring charges for vacated leased facilities and
terminated employees.

    INTEREST EXPENSE.  Interest expense increased approximately $14.2 million,
or 175.3%, to $22.3 million for the 9 months ended September 30, 2000, as
compared to $8.1 million for the same period in 1999. The increase is
attributable to increased borrowing on the New Senior Credit Facility and
interest on the Registered Notes.

    LOSS BEFORE INCOME TAXES.  As a result of the factors noted above, loss
before income taxes was approximately ($49.1) million for the 9 months ended
September 30, 2000, as compared to a loss of ($18.2) million for the same period
in 1999.

    PROVISION FOR INCOME TAXES.  The Company has not recorded the full tax
benefit associated with historical losses since its future realizability is not
assured.

    NET LOSS.  As a result of the factors noted above, the Company's net loss
was approximately ($49.2) million for the 9 months ended September 30, 2000, as
compared to a net loss of ($18.2) million for the same period in 1999.

    Earnings before interest, taxes, depreciation, amortization and
restructuring and nonrecurring charges increased to approximately $14.9 million
for the 9 months ended September 30, 2000, as compared to $9.4 million for the
same period in 1999, as a result of the factors noted above.

COMBINED INTEGRATION ACTIVITIES

    As part of the Merger, the Company further integrated many of its sales
offices and most of its administrative operations (including accounting,
treasury, payroll, human resources, and information technology). This process
resulted in the integration and consolidation of 37 facilities throughout the
Southeast and Mid-Atlantic regions of the country. As a result of its ongoing
integration activities, the Company recorded a restructuring charge during the
year ended December 31, 1999, of approximately $13.3 million. The charge
consisted of approximately $8.6 million relating to non-cancelable lease
obligations on vacated facilities and $4.7 million relating to severance and
other personnel-related amounts.

    During the quarter ended September 30, 2000, the Company terminated
approximately 180 employees, primarily at the operations management level, as
part of its ongoing efforts to consolidate its operations and centralize its
corporate headquarters. The Company accrued and expensed approximately
$2.5 million in severance and termination benefits associated with this change,
which appear as a reduction in the calculation of the Company's income from
continuing operations.

    During the quarter ended September 30, 2000, the Company provided additional
reserves for certain trade receivables as part of its continuing integration of
business processes into its corporate headquarters. The Company adopted a more
conservative policy to fully reserve its trade receivables outstanding in excess
of 120 days. Management's change in the estimated realizable value of its
receivables resulted in the recognition of approximately $19.5 million in
nonrecurring charges, which appear as a reduction in the calculation of the
Company's income from continuing operations.

    As part of its ongoing integration of its business processes, the Company
plans to redirect its resources to its core business processes and away from
activities associated with non-traditional business programs, such as the
private label programs.

                                       22
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES

    The Company incurred significant operating losses during the third quarter
and the 9 months ended September 30, 2000, of approximately ($28.9) million and
($26.9) million, respectively. The operating results for the third quarter,
excluding the non-cash effects of depreciation, amortization and restructuring
and nonrecurring charges, resulted in insufficient earnings to fund interest
costs and debt payments. The operating results for the 9 months ended
September 30, 2000, provided for approximately $14.9 million of the $22.3
million in interest costs; however, they were insufficient to fully support
interest and debt payments. During the third quarter, the Company utilized
substantially all of its availability under the New Revolver, which has required
MS Acquisition, our largest stockholder, to provide additional aggregate funds
of approximately $14.3 million during the third quarter to support our cash
operating needs.

    Since September 30, 2000, MS Acquisition has further provided $5.0 million
in additional funds directly to the Company to support the Company's operating
and financing needs. MS Acquisition has also pledged an additional $9.0 million
in assets to the Company's bank lenders to provide the Company with additional
borrowing availability under the New Revolver. As of September 30, 2000, the
Company was in violation of certain covenants under the New Senior Credit
Facility; however, the Company obtained a waiver of the defaults and negotiated
amendments to the New Revolver, providing for an increase of the maximum
commitment to $60.0 million. The Amended Credit Agreement, among other things,
may require additional funding, in certain circumstances, and MS Acquisition has
agreed to fund this commitment, if required. See Note 11 to the Condensed
Consolidated Financial Statements.

    As of September 30, 2000, the working capital deficit of the Company was
approximately ($70.0) million, which included the ($42.4) million balance of the
New Revolver. The Company believes that projected cash flows from operations for
the fourth quarter ending December 31, 2000, in combination with current
available resources under the Amended Credit Agreement dated November 17, 2000,
should be sufficient to meet working capital needs such as debt service, capital
expenditures and other operating costs for the term of the Amended Credit
Agreement. Achievement of projected cash flows from operations, however, will be
dependent upon the Company's attainment of revenues, improved operating costs
and trade support levels that are consistent with its financial plans. Such
operating performance will be subject to financial, economic and other factors
affecting the industry and operations of the Company, including factors beyond
its control, and there can be no assurance that the Company's plans will be
achieved. In addition, the Company borrows funds on a variable rate basis, and
continued compliance with loan covenants is partially dependent on relative
interest rate stability. If projected cash flows from operations are not
realized, or if there are significant increases in interest rates, then the
Company may have to explore various available alternatives, including obtaining
further modifications of its existing lending arrangements, renegotiating debt
payments associated with acquired companies, seeking additional contributions of
equity or loans from MS Acquisition or attempting to locate additional sources
of financing, all of which are beyond the Company's control and provide no
certainty of success.

    On January 7, 2000, the Company received an equity investment from its
largest stockholder, MS Acquisition. MS Acquisition increased its equity
position by purchasing 1,577,287 additional shares of Common Stock at an
aggregate purchase price of $5.0 million ($3.17 per share) pursuant to the terms
of a stock purchase agreement. On March 30, 2000, MS Acquisition purchased an
additional 4,000,000 shares of Common Stock for an aggregate purchase price of
$10.0 million ($2.50 per share) pursuant to the terms of a stock purchase
agreement. The funds served as an additional source of capital for the Company's
operations and provided the Company with additional short-term and long-term
liquidity. The offering, sale and issuance of these shares were exempt from
registration under the Securities Act of 1933, as amended, pursuant to a private
offering exemption under Section 4(2) promulgated thereunder.

    On June 23, 2000, the Board of Directors of the Company authorized and
provided for the issuance of up to 10,000 shares of 8.0% Convertible
Paid-In-Kind Preferred Stock, par value $0.01 per share, with a stated value of
$1,000 per share (the "Preferred Stock"). On June 23, 2000, the Company issued

                                       23
<PAGE>
5,000 shares of Preferred Stock to MS Acquisition for an aggregate purchase
price of $5.0 million pursuant to the terms of a preferred stock purchase
agreement. On August 8, 2000, the Company issued an additional 4,500 shares of
Preferred Stock to MS Acquisition for an aggregate purchase price of
$4.5 million pursuant to the terms of a preferred stock purchase agreement. The
cash proceeds were used for general corporate purposes. All issued shares were
subsequently converted into 6,234,414 shares of Common Stock in the third
quarter of 2000. See Note 8 to the Condensed Consolidated Financial Statements.

    On August 17, 2000, the Company issued a $4.75 million promissory note to MS
Acquisition. On August 30, 2000, the Company issued an additional $5.0 million
promissory note to MS Acquisition. The Registered Notes and the New Senior
Credit Facility are senior to both promissory notes. The Company used the
proceeds from the promissory notes for general corporate purposes. See Notes 5
and 11 to the Condensed Consolidated Financial Statements.

    Net cash used in operating activities for the 9 months ended September 30,
2000, was approximately ($18.2) million as compared to approximately ($1.3)
million for the same period in 1999. The Company's net loss of approximately
($49.2) million for the 2000 period included approximately $19.8 million in non-
cash depreciation and amortization expense primarily related to
acquisition-related intangible assets and $22.0 million in nonrecurring charges
related to trade receivables and severance and other benefits given to former
employees. Operating cash flows for the 2000 period also included approximately
$10.3 million in net increases to accounts receivable and approximately $4.0
million in net decreases related to accounts payable and accrued expenses. The
Company's net loss of approximately ($18.2) million for the 1999 period included
approximately $6.2 million in non-cash depreciation and amortization expense
primarily related to acquisition-related intangible assets and a $13.3 million
restructuring charge related to vacated leased facilities and terminated
employees. Operating cash flows for the 1999 period also included approximately
$12.3 million in decreases related to accounts payable and accrued expenses.

    Net cash used in investing activities for the 9 months ended September 30,
2000, was approximately ($7.1) million as compared to approximately ($5.1)
million for the same period in 1999. Investing cash flows for the 2000 period
included approximately $6.5 million in cash proceeds related to the sale of the
Company's Orange County, California and Phoenix, Arizona buildings in February
2000. Investing cash flows for this period also included approximately $12.7
million in cash payments primarily related to the purchases of Johnson-Leiber in
January 2000 and Sales Force in April 2000. Investing cash flows for the 1999
period included approximately $3.9 million in net cash payments primarily
related to the purchases of Sell, Inc. in January 1999, United Brokerage Company
in April 1999, and Richmont in August 1999.

    Net cash provided by financing activities for the 9 months ended
September 30, 2000, was approximately $25.2 million as compared to approximately
$9.6 million for the same period in 1999. Financing cash flows for the 2000
period included $15.0 million in proceeds from the sale of Common Stock to MS
Acquisition in the first quarter of 2000, $9.5 million in proceeds from the sale
of Preferred Stock to MS Acquisition in June and August 2000, and approximately
$9.8 million in proceeds from the issuance of promissory notes to MS Acquisition
in the third quarter of 2000. Investing cash flows for this period also included
$22.1 million in net borrowings on the New Revolver. These proceeds were offset
by approximately $25.8 million in principal payments in long-term obligations,
of which approximately $8.8 million were related to the Initial Term Loan, and
approximately $5.1 million in cash payments related to the acquisition of the
New Senior Credit Facility in 2000. Financing cash flows for the 1999 period
included approximately $4.0 million in proceeds from the sale of Common Stock
and $16.3 million in incremental borrowings on the Initial Credit Facility.
Financing cash flows for this period also included approximately $12.2 million
in principal payments on long-term obligations.

                                       24
<PAGE>
SEASONALITY; FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

    The Company has experienced and expects to continue to experience
fluctuations in quarterly revenues and operating results as a result of seasonal
patterns. The revenues of the Company have been stronger in the third and fourth
calendar quarters as a result of the historically strong sales associated with
consumer consumption during the holiday season and weaker in the first quarter
following such season. Results of operations for any particular quarter
therefore are not necessarily indicative of the results of operations for any
future period. Future seasonal and quarterly fluctuations could have a material
adverse effect on the Company's business, financial condition and results of
operations.

INFLATION

    The Company does not believe that its revenues have been materially affected
by inflation.

YEAR 2000 DISCLOSURE

    The Company dedicated internal resources and engaged external resources to
identify and resolve "Year 2000" compliance issues with respect to computer
systems and applications utilized by the Company.

    The Company experienced no significant Year 2000 issues in January 2000 or
since. No assurance can be given that Year 2000 compliance issues will not
materialize and be resolved without future disruption or that the Company will
not incur significant additional expense. In addition, the failure of certain of
the Company's significant suppliers, Manufacturers and Retailers to address the
Year 2000 compliance issues could have a material adverse effect on the Company.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

    The Company is exposed to market risk related to its New Revolver as
discussed in the notes to the Company's consolidated financial statements. The
interest on the New Revolver is subject to fluctuations in the market. The
Company does not believe that a change in the interest rate will have a material
effect on its financial position, results of operations or cash flows.

    The Company does not engage in trading market risk sensitive instruments and
does not purchase as investments, as hedges, or fur purposes "other than
trading," instruments that are likely to expose the Company to certain types of
market risk, including interest rate, commodity price or equity price risk. The
Company has not entered into any forward or futures contracts. The Company has
not purchased any options or entered into any swaps.

                                       25
<PAGE>
                           PART II: OTHER INFORMATION

ITEM 1:  LEGAL PROCEEDINGS

    A. As reported in the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 2000, L.C. Hicks, Jr. ("Hicks") filed suit against Merkert
American Co., Inc. ("MACI") on May 29, 1999. The case is pending in the United
States District Court for the Middle District of Florida, Tampa Division. Hicks
was the owner of Dopson-Hicks, Inc., which was acquired by Rogers-American
Company, Inc. ("Rogers-American") in 1995. Hicks entered into an employment
agreement contemporaneously with the sale of his business. Hicks claims that
MACI breached the contract by not providing him employee benefits that were
similar to what the President and CEO of Rogers-American received. A tentative
settlement has recently been reached between the parties.

ITEM 2:  CHANGES IN SECURITIES AND USE OF PROCEEDS

    As reported in the Company's Quarterly Report on Form 10-Q for the period
ended June 30, 2000, the Company sold (i) approximately 5,000 shares of
convertible, paid-in-kind, non-voting and 8% dividend preferred stock of the
Company, $0.01 par value per share (the "Preferred Stock"), to MS Acquisition
Limited, a Texas limited partnership ("MS"), for a purchase price of $1,000 per
share on June 23, 2000, and (ii) the Company sold an additional 4,500 shares of
the Preferred Stock to MS under the same terms on August 8, 2000. The issuance
of these securities were deemed to be exempt from registration under the
Securities Act of 1933, as amended, because they were sold to a limited group of
persons, which was classified as a sophisticated investor, which had a
pre-existing business or personal relationship with the Company and which was
purchasing for investment without a view to further distribution. The proceeds
from both sales are being used for general corporate purposes. Both issuances
were approved by the Board of Directors and a special committee of non-MS
related directors.

    On July 27, 2000, the Company received early termination of the waiting
period in connection with its Hart-Scott-Rodino Antitrust Improvement Act filing
thereafter allowing the conversion of the Preferred Stock to Common Stock of the
Company. On August 21, 2000, MS converted all 9,500 shares of the Preferred
Stock described above into 6,234,414 shares of Common Stock of the Company.
After the conversion, the number of shares of the Common Stock of the Company
which MS may be deemed beneficially to own under Rule 13d-3 of the Act is
19,321,005. This constitutes approximately 74.9% of the total outstanding shares
of Common Stock of the Company.

    As reported in the Company's Current Report on Form 8-K, dated November 2,
2000, and discussed in Note 11 to the Condensed Consolidated Financial
Statements, the Company issued approximately 12,397 shares of Series B 8.0
percent Convertible Paid-In-Kind Preferred Stock, par value $0.01 per share
("Series B Preferred Stock") of the Company to MS for a price of $1,000 per
share for an aggregate purchase price of approximately $12.4 million pursuant to
the terms of a Preferred Stock Purchase Agreement dated November 1, 2000. The
purchase price consisted of the cancellation of the $4.75 million promissory
note and the $5.0 million promissory note issued to MS (each described in
Part II, Item 5 herein), including all accrued and unpaid interest, plus an
additional payment of approximately $2.5 million to the Company. The Series B
Preferred Stock is convertible into Common Stock based on a conversion price
which shall be the greater of (i) $1.46 per share, or (ii) the per share price
paid by MS in the event a tender offer is consummated for all of the outstanding
Common Stock of the Company. The issuance of these securities were deemed to be
exempt from registration under the Securities Act of 1933, as amended, because
they were sold to a limited group of persons, which was classified as a
sophisticated investor, which had a pre-existing business or personal
relationship with the Company and which was purchasing for investment without a
view to further distribution. The proceeds from this sale is being used for
general corporate purposes. The issuance was approved by the Board of Directors
and a special committee of non-MS related directors.

                                       26
<PAGE>
ITEM 3:  DEFAULTS UPON SENIOR SECURITIES

    As of September 30, 2000, the Company was in violation of certain covenants
under the New Senior Credit Facility (see definition in Note 5 to the Condensed
Consolidated Financial Statements). As discussed in Note 11 to the Condensed
Consolidated Financial Statements, on November 17, 2000, the Company obtained a
waiver of the defaults and negotiated amendments to the New Revolver, increasing
the maximum commitment to $60.0 million.

ITEM 4:  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

    None

ITEM 5:  OTHER INFORMATION

    On August 17, 2000, the Company accepted a loan from its majority
stockholder, MS, evidenced by a promissory note in the amount of $4.75 million.
On August 30, 2000, the Company also accepted a loan from MS evidenced by a
promissory note in the amount of $5.0 million. Both loans bear interest at a
rate equal to the prime rate plus 2.75% as of the last business day of the
immediately preceding calendar quarter. Each loan was approved by the Board of
Directors and a special committee of non-MS Acquisition related directors. The
proceeds of both loans are to be used for general corporate purposes, as an
additional source of capital for the Company's ongoing operations, and to
enhance the Company's short-term and long-term liquidity. As noted in Item 2,
the obligations under the promissory notes, including accrued interest, were
converted into equivalent shares of the Series B Preferred Stock.

    As discussed in Note 11 to the Condensed Consolidated Financial Statements,
on October 5, 2000, MS entered into a Deposit Security Agreement with The Chase
Manhattan Bank ("Chase"), wherein MS pledged $9.0 million and transferred to
Chase certificates of deposits in such amount in order to assist the Company by
providing them with additional borrowing availability under the New Revolver.
The amount pledged can be included in the Company's borrowing base, thereby
increasing the borrowing base and, potentially, the borrowing availability.

    As discussed in Note 11 to the Condensed Consolidated Financial Statements,
on October 26, 2000, the Company entered into a definitive agreement to sell
improved real property located in Charlotte, North Carolina, for approximately
$2.6 million, before applicable closing costs.

    As discussed in Note 11 to the Condensed Consolidated Financial Statements,
on November 9, 2000, the Company issued a $2.5 million promissory note. This
promissory note is subordinate to the senior debt of the Company. The proceeds
were used for general corporate purposes. The $2.5 million promissory note bears
interest at a rate equal to the sum of an interest margin of 2.75% plus the
applicable prime rate on the last business day of the quarter for which interest
is payable. Interest is payable quarterly in arrears, commencing on
December 31, 2000, and will continue through the principal portion's maturity
date. The principal portion of the $2.5 million promissory note and any unpaid
accrued interest, will be payable on November 9, 2002, or on demand, under
specified conditions. The Company is not permitted to repay the principal and
unpaid and accrued interest on the $2.5 million promissory note on demand if the
Company's borrowing base 30 days prior to a payment date is not greater than the
greater of (i) $10.0 million, or (ii) 1/4th of the sum of the Company's payroll
for the last four consecutive pay periods.

    As discussed in detail in Notes 5 and 11 to the Condensed Consolidated
Financial Statement and in Part II, Item 3, the Company was not in compliance
with certain covenants related to the New Revolver, and on November 17, 2000,
the Company became a party to an Amendment to the Credit Agreement among the
Company, certain of its subsidiaries, Chase, as the Agent, and the lenders
parties thereto (the "Amended Credit Agreement"). In summary, the Amended Credit
Agreement provides for an increase in the maximum amount available under the New
Revolver from $50.0 million to a maximum commitment of $60.0 million (the
"Increase"), which is comprised of a $41.0 million variable commitment, and a
subordinated $19.0 million fixed commitment (the "Tranche B Notes"). MS must
purchase a 100% participation interest in the Tranche B Notes. Additionally, on
November 17, 2000, the Company also became a party to a First Amendment to the
Credit Agreement among the Company, certain of its

                                       27
<PAGE>
subsidiaries, as guarantors, and First Union National Bank, as agent (the "First
Union Amended Credit Agreement). The First Union Amended Credit Agreement amends
the Amended Term Loan (defined in Note 5 to the Condensed Consolidated Financial
Statements) and provides for the consent of the Increase, the Borrowing Base
(defined in Note 11 to the Condensed Consolidated Financial Statements), and the
repayment of the $2.5 million promissory note to MS. The First Union Amended
Credit Agreement also amends the Amended Term Loan to reflect the terms of the
Amended Credit Agreement.

ITEM 6:  EXHIBITS AND REPORTS ON FORM 8-K

    (a) Exhibits

        See Index to Exhibits (filed herewith)

    (b) Reports on Form 8-K

       (i) Current Report on Form 8-K, dated July 6, 2000, relating to the
           announcement of a lawsuit which was filed on June 8, 2000, in the
           Delaware Court of Chancery by William Brown, III on behalf of the
           public stockholders. The lawsuit alleges that the $2.50 offer price
           made in the proposal by RCPI to purchase all outstanding shares of
           the Company is inadequate. The plaintiff class asserts that the Board
           of Directors has violated its fiduciary duties to the Company
           stockholders, including the duty of fair dealing. The plaintiffs seek
           enjoinder of the tender offer by RCPI or the rescission of the
           contract if the offer is consummated and the awarding of rescission
           damages.

       (ii) Current Report on Form 8-K, dated July 6, 2000, relating to a
           Settlement Agreement and Mutual Release entered into by and between
           the Company and Monroe & Company, LLC.

       (iii) Current Report on Form 8-K, dated June 23, 2000, relating to the
           sale (i) on June 23, 2000, of approximately 5,000 shares of the
           Preferred Stock to MS for a purchase price of $1,000 per share, and
           (ii) on August 8, 2000, of approximately 4,500 shares of the
           Preferred Stock to MS for a purchase price of $1,000 per share.

       (iv) Current Report on Form 8-K, dated August 22, 2000, relating to the
           announcement of (i) the appointment of Terry L. Crump to the position
           of executive vice president and chief financial officer of the
           Company responsible for all finance, tax, accounting, SEC reporting,
           investor relations and financial planning functions, and (ii) the
           Company's second quarter financials, with revenues totaling
           approximately $108.2 million.

       (v) Current Report on Form 8-K, dated October 16, 2000, relating to the
           announcement of the Company's preliminary third quarter financials,
           with expected net revenues for the third quarter to be lower than
           anticipated.

       (vi) Current Report on Form 8-K, dated November 2, 2000, relating to the
           announcement that MS Acquisition purchased 12,397 shares of Series B
           Preferred Stock, of the Company on November 1, 2000 for a price of
           $1,000 per share. The Series B Preferred Stock is convertible into
           Common Stock of the Company based on a conversion price which shall
           be the greater of (i) $1.46 per share, or (ii) the per share price
           paid by RCPI in a tender offer for all of the outstanding Common
           Stock of the Company, if such tender offer is commenced by April 30,
           2001, and if all outstanding shares of Common Stock of the Company
           are purchased pursuant to such tender offer. In addition, the Company
           further announced that RCPI had reaffirmed its interest in purchasing
           all of the outstanding shares of the Company's Common Stock, as
           disclosed in its letter to the Company's Board of Directors dated
           June 2, 2000. Due to the increase in the number of the Company's
           shares of Common Stock outstanding from 19.8 million on June 2, 2000
           to 34.6 million today (assuming conversion of the Series B Preferred
           Stock at $1.46 per share), RCPI's proposal reflects a price per share
           of $1.46, which reflects an equity value of the Company of
           approximately $50 million, which is the same equity value upon which
           RCPI's June proposal was based.

                                       28
<PAGE>
                                   SIGNATURES

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

<TABLE>
<S>                                                    <C>  <C>
                                                       MARKETING SPECIALISTS CORPORATION
                                                            Registrant

                                                       By:               /s/ TERRY CRUMP
                                                            -----------------------------------------
                                                                           Terry Crump
                                                                     CHIEF FINANCIAL OFFICER

                                                       By:               /s/ JAY DINUCCI
                                                            -----------------------------------------
                                                                           Jay DiNucci
                                                                       CORPORATE CONTROLLER
</TABLE>

                                       29
<PAGE>
                               INDEX TO EXHIBITS

    The following is a complete list of exhibits filed or incorporated by
reference as part of this Quarterly Report on Form 10-Q:

    10.1 Promissory Note, dated August 17, 2000, of Marketing Specialists
         Corporation issued to Richmont Capital Partners I, L.P. in the
         principal amount of $4,750,000 (filed herewith).

    10.2 Promissory Note, dated August 30, 2000, of Marketing Specialists
         Corporation issued to Richmont Capital Partners I, L.P. in the
         principal amount of $4,999,999 (filed herewith).

    10.3 Deposit Security Agreement, dated as of October 5, 2000, by and between
         MS Acquisition Limited, a Delaware limited partnership, and The Chase
         Manhattan Bank, as agent for the Banks (as defined therein) in
         connection with the pledge by MS Acquisition Limited of cash and cash
         equivalents to increase the Company's borrowing availability (filed
         herewith).

    10.4 Preferred Stock Purchase Agreement, dated November 1, 2000, by and
         between Marketing Specialists Corporation and MS Acquisition Limited in
         connection with the issuance by the Company of 12,397 shares of Series
         B Convertible Paid-In-Kind Preferred Stock (filed herewith).

    10.5 Promissory Note, dated November 8, 2000, of Marketing Specialists
         Corporation issued to Richmont Capital Partners I, L.P. in the
         principal amount of $2,500,000 (filed herewith).

    10.6 First Amendment to Credit Agreement, dated November 17, 2000, by and
         among Marketing Specialists Corporation, certain lenders described
         therein, and First Union National Bank, as Agent and as sole Lender
         (filed herewith).

    10.7 Amended and Restated Intercreditor Agreement, dated November 17, 2000,
         between and among Marketing Specialists Corporation, certain of its
         subsidiaries, The Chase Manhattan Bank, as agent for the Revolver
         Lenders (as defined therein), First Union National Bank, as agent for
         the Term Lenders (as defined therein), MS Acquisition Limited, and
         Richmont Capital Partners I, L.P. (filed herewith).

    10.8 Second Amendment to Credit Agreement dated November 17, 2000, among
         Marketing Specialists Corporation, Marketing Specialists Sales Company,
         Paul Inman Associates, Inc., and The Sales Force Companies, Inc.,
         certain banks or other lending institutions named therein, and The
         Chase Manhattan Bank, individually as a bank and as agent for itself
         and the other banks or lending institutions named therein.

    10.9 Master Participation Agreement, dated November 17, 2000, by and among
         MS Acquisition Limited and various banks or other lending institutions
         named therein.

    27.1 Financial Data Schedule (filed herewith).