<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                             Washington, DC 20549

                                   FORM 10-Q

               Quarterly Report Pursuant to Section 13 or 15(d)
                    of the Securities Exchange Act of 1934

For the three months ended JUNE 30, 1998          Commission File Number 0-14371
----------------------------------------          ------------------------------

                            COMPUCOM SYSTEMS, INC.
--------------------------------------------------------------------------------
            (Exact name of Registrant as specified in its charter)
 

            DELAWARE                                       38-2363156
-------------------------------                      ----------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                       Identification Number)
 
    7171 FOREST LANE, DALLAS, TX                              75230
---------------------------------------                    ------------
(Address of principal executive offices)                    (Zip Code)
 
Registrant's telephone number, including area code:       (972) 856-3600
                                                          --------------
 

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes  X         No
   -----         -----



The number of shares of the Registrant's common stock outstanding as of August
11, 1998 was 46,284,820 shares.

--------------------------------------------------------------------------------
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES


                                     Index
 
 
PART I.    FINANCIAL INFORMATION                                            Page
-------    ---------------------                                            ----
 
Item 1.    Condensed Consolidated Balance Sheets
              June 30, 1998 and December 31, 1997 (unaudited)                  3
           
           Condensed Consolidated Statements of Operations
              Three and six months ended June 30, 1998 and 1997 
              (unaudited)                                                      4

           Condensed Consolidated Statements of Cash Flows
              Six months ended June 30, 1998 and 1997 (unaudited)              5
 
           Notes to Condensed Consolidated Financial Statements                6
 
Item 2.    Management's Discussion and Analysis of Financial Condition
              and Results of Operations                                        8
 
 
PART II.   OTHER INFORMATION
-------    -----------------
 
Item 4.    Submission of Matters to a Vote of Security Holders                14
 
Item 5.    Other Information                                                  14
 
Item 6.    Exhibits and Reports on Form 8-K                                   15
 

                                       2
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES 

                     Condensed Consolidated Balance Sheets
                                (In thousands)
                                  (unaudited)

                                             June 30,            December 31,
           Assets                              1998                  1997     
           ------                           ----------           -----------  
Current assets:                                                               
    Cash                                     $   4,447             $   4,456  
    Receivables                                297,698               177,141  
    Inventories                                204,479               197,958  
    Other                                        4,638                 2,880  
                                            ----------           -----------  
        Total current assets                   511,262               382,435  
                                                                              
Property and equipment, net                     72,752                63,359  
                                                                              
Cost in excess of fair value of tangible                                      
 net assets purchased, less accumulated                                       
 amortization                                   63,876                13,569  
Other                                            2,888                 3,227  
                                            ----------           -----------  
                                             $ 650,778             $ 462,590  
                                            ==========           ===========  
                                                                              
Liabilities and Shareholders' Equity                                          
------------------------------------                                          
Current liabilities:                                                          
    Accounts payable                         $ 234,495             $  72,475  
    Accrued liabilities                         67,691                71,791  
    Current portion of long-term debt            3,500                 3,000  
                                            ----------           -----------  
        Total current liabilities              305,686               147,266  
                                                                              
Long-term debt                                 119,432                97,400  
Deferred income taxes                            6,838                 7,198  
Other                                              781                   526  
                                                                              
Shareholders' equity:                                                         
    Preferred stock                             15,000                15,000  
    Common stock                                   462                   461  
    Additional paid-in capital                  65,923                65,762  
    Retained earnings                          136,656               128,977  
                                            ----------           -----------  
        Total shareholders'equity              218,041               210,200  
                                            ----------           -----------  
                                             $ 650,778             $ 462,590  
                                            ==========           ===========  

See accompanying notes to condensed consolidated financial statements.

                                       3
<PAGE>
 
                   COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES 

                Condensed Consolidated Statements of Operations
                   (In thousands, except per share amounts)
                                  (Unaudited)

                                Three months ended        Six months ended
                                     June 30,                  June 30,
                                1998         1997           1998        1997 
                              ---------    ---------     ---------   --------- 
                                                                             
Revenue                                                                      
    Product                   $ 530,495    $ 428,353     $ 907,273   $ 803,958
    Service                      63,127       59,715       120,253     113,443
    Other                         3,935        3,152         7,782       5,708
                              ---------    ---------     ---------   --------- 
       Total revenue            597,557      491,220     1,035,308     923,109
                              ---------    ---------     ---------   ---------
                                                                             
Cost of revenue                                                              
    Product                     479,967      387,254       812,864     723,927
    Service                      43,372       37,571        82,131      71,937
    Other                         2,064        1,433         3,994       2,805
                              ---------    ---------     ---------   ---------
       Total cost of revenue    525,403      426,258       898,989     798,669
                              ---------    ---------     ---------   ---------

          Gross margin           72,154       64,962       136,319     124,440
                                                                             
Operating expenses                                                           
    Selling                      28,318       19,055        49,448      39,513
    Service                      13,039       11,142        27,704      21,914
    General and                  
     administrative              15,698       15,388        30,578      29,680
    Depreciation and                                                          
     amortization                 3,696        2,652         7,026       5,243
                              ---------    ---------     ---------   ---------  
       Total operating           
        expenses                 60,751       48,237       114,756      96,350
                              ---------    ---------     ---------   ---------  
                                                                              
Earnings from operations         11,403       16,725        21,563      28,090
                                                                             
Financing expenses                4,260        3,425         8,015       6,670
                              ---------    ---------     ---------   ---------  
Earnings before income taxes      7,143       13,300        13,548      21,420
                                                                             
Income taxes                      2,857        5,320         5,419       8,568
                              ---------    ---------     ---------   ---------  
                                                                              
Net earnings                  $   4,286    $   7,980     $   8,129   $  12,852
                              =========    =========     =========   =========
                                                                             
Earnings per common share                                                    
      Basic                        $.09         $.17          $.17        $.27
      Diluted                      $.09         $.16          $.16        $.26
                                                                             
Average common shares                                                        
 outstanding                                                                 
      Basic                      46,150       45,554        46,141      45,441
      Diluted                    49,514       49,674        50,025      49,722



See accompanying notes to condensed consolidated financial statements.

                                       4
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

                Condensed Consolidated Statements of Cash Flows
                    Six months ended June 30, 1998 and 1997
                                (In thousands)
                                  (unaudited)

                                                           1998          1997
                                                         --------     --------- 
Cash flows from operating activities:
  Net earnings                                           $  8,129     $  12,852
  Adjustments to reconcile net earnings to net                                 
   cash provided by operating activities:                   
     Depreciation and amortization                          7,026         5,243
     Deferred income taxes                                   (360)           48
                                                                               
     Changes in assets and liabilities:                                        
       Receivables                                        (48,663)      173,009
       Inventories                                          3,046         7,369
       Other current assets                                   191          (141)
       Accounts payable                                    98,534       (70,494)
       Accrued liabilities and other                      (16,895)       (3,358)
                                                         --------     --------- 
           Net cash provided by operating activities*      51,008       124,528
                                                         --------     --------- 
Cash flows from investing activities:                                          
  Capital expenditures, net                                (8,855)      (12,091)
  Business acquisitions, net of cash acquired             (45,490)             
                                                         --------     --------- 
           Net cash provided by (used in) investing 
            activities                                    (54,345)      (12,091)
                                                         --------     --------- 
Cash flows from financing activities:                                          
  Net bank credit facility and other borrowings             3,616      (113,806)
  Issuance of common stock                                    162         1,749
      Preferred stock dividend                               (450)         (450)
                                                         --------     --------- 
           Net cash provided by (used in) financing 
            activities*                                     3,328      (112,507)
                                                         --------     --------- 

Net decrease in cash                                           (9)          (70)
Cash at beginning of period                                 4,456         4,320
                                                         --------     --------- 
Cash at end of period                                    $  4,447     $   4,250 
                                                         ========     =========


* In 1997, $100 million securitization was recorded as a cash inflow from
  operations and cash used in financing activities.

See accompanying notes to condensed consolidated financial statements.

                                       5
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

             Notes to Condensed Consolidated Financial Statements
                                 June 30, 1998

(1)   General

         These condensed interim consolidated financial statements should be
      read in conjunction with the consolidated financial statements and the
      summary of significant accounting policies and notes thereto included in
      the 1997 Annual Report on Form 10-K for CompuCom Systems, Inc. (the
      Company). The information furnished is unaudited but reflects all
      adjustments consisting only of normal recurring accruals which are, in the
      opinion of management, necessary to present a fair statement of the
      results for these interim periods. Interim results are not necessarily
      indicative of results expected for the full year.

(2)   Contingencies

         The Company is involved in various claims and legal actions arising in
      the ordinary course of business. In the opinion of management, the
      ultimate disposition of these matters will not have a material adverse
      effect on the Company's consolidated financial position and results of
      operations, taken as a whole.

(3)   Earnings per share

         In February 1997, the Financial Accounting Standards Board issued
      Statement of Financial Accounting Standards No. 128, Earnings Per Share
      ("Statement 128"). Statement 128 supersedes APB Opinion No. 15, Earnings
      Per Share and specifies the computation, presentation, and disclosure
      requirements for earnings per share ("EPS"). Basic earnings per common
      share is based on net earnings after preferred stock dividend
      requirements, if any, and the weighted-average number of common shares
      outstanding during each period. Diluted earnings per common share assumes
      conversion of dilutive convertible securities into common stock at the
      later of the beginning of the period or date of issuance and includes the
      add-back of related interest expense and/or dividends, as required. Prior
      period earnings per share have been restated to conform to Statement 128.
      SFAS No. 128 also requires a reconciliation of the numerators and
      denominators of the basic and diluted per share computations as follows
      (in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                 Three months ended June 30, 1998                Six months ended June 30, 1998           
                            --------------------------------------------   -------------------------------------------  
                                Income          Shares                       Income         Shares                      
                              (Numerator)    (Denominator)      EPS        (Numerator)    (Denominator)       EPS       
                            --------------  --------------  ------------   ------------  --------------  -------------  
<S>                         <C>             <C>             <C>            <C>           <C>             <C>             
Net earnings                    $4,286                                       $  8,129
Less:  Preferred stock            
 dividends                        (225)                                          (450) 
 
Basic EPS
Income available to common       4,061           46,150         $.09            7,679         46,141           $.17
 shareholders
 
Effect of dilutive securities
Stock options                                     1,148                                        1,280
Convertible preferred stock        225            2,216                           450          2,216
Convertible debt                     -                -                            46            388
                              --------         --------                      --------       --------    
 
Diluted EPS
Income available + assumed       
 conversions                     4,286           49,514         $.09            8,175         50,025           $.16 
                              ========         ========      =======         ========       ========       ========    
</TABLE>

                                                                                

                                       6
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

              Notes to Condensed Consolidated Financial Statements
                                 June 30, 1998

<TABLE>
<CAPTION>
                                 Three months ended June 30, 1997                Six months ended June 30, 1997          
                            --------------------------------------------   -------------------------------------------  
                                Income          Shares                       Income         Shares                      
                              (Numerator)    (Denominator)      EPS        (Numerator)    (Denominator)       EPS       
                            --------------  --------------  ------------   ------------  --------------  -------------  
<S>                         <C>             <C>             <C>            <C>           <C>             <C>             
Net earnings                    $7,980                                        $12,852
Less:  Preferred stock             
 dividends                        (225)                                          (450) 
 
Basic EPS
Income available to common        
 shareholders                    7,755           45,554         $.17           12,402         45,441           $.27 
 
Effect of dilutive 
 securities
Stock options                                     1,516                                        1,677
Convertible preferred              225            2,216                           450          2,216
 stock
Convertible debt                    23              388                            46            388
                              --------         --------                      --------       --------     
Diluted EPS
Income available + assumed        
 conversions                     8,003           49,674         $.16           12,898         49,722           $.26 
                              ========         ========      =======         ========       ========       ========    
</TABLE>

The Company has excluded 1,815,037 and 497,942 shares from its calculations of
diluted earnings per share for the three and six months ended June 30, 1998, and
has excluded 1,194,842 and 938,272 shares from its calculations of diluted
earnings per share for the three and six months ended June 30, 1997,
respectively, as they are considered anti-dilutive.

(4)  Business Combinations

     During the three months ended June 30, 1998, the Company consummated two 
business combinations. The total consideration given for these business 
combinations was approximately $41 million in cash. The business combinations 
were accounted for as purchases and accordingly the condensed consolidated 
financial statements reflect the operations of the acquired entities since the 
respective acquisition dates. The Company has not completed the allocation of 
the purchase price for these two acquisitions. Therefore, the amount of goodwill
recorded could be adjusted once the allocation is finalized.

                                       7
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

  Management's Discussion and Analysis of Financial Condition and Results of
                                  Operations
                                 June 30, 1998
                                        
Results of Operations

The following table shows the Company's total revenue, gross margin and gross
margin percentage by revenue source.  Operating expenses, financing expense,
income taxes and net earnings are shown as a percentage of total net revenue for
the three and six months ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>
                                    Three months ended      Six months ended
                                         June 30,               June 30,
                                     1998       1997       1998        1997
                                  ---------  ---------  ----------  --------- 
<S>                               <C>        <C>        <C>         <C> 
Revenue:                                               
     Product                       $530,495   $428,353  $  907,273   $803,958
     Service                         63,127     59,715     120,253    113,443
     Other                            3,935      3,152       7,782      5,708
                                  ---------  ---------  ----------  --------- 
           Total revenue            597,557    491,220   1,035,308    923,109
                                  ---------  ---------  ----------  --------- 
                                                       
Gross margin:                                          
     Product                         50,528     41,099      94,408     80,031
     Service                         19,755     22,144      38,123     41,506
     Other                            1,871      1,719       3,788      2,903
                                  ---------  ---------  ----------  --------- 
           Total gross margin        72,154     64,962     136,319    124,440
                                  ---------  ---------  ----------  --------- 
                                                       
Gross margin percentage:                               
     Product                            9.5%       9.6%       10.4%      10.0%
     Service                           31.3%      37.1%       31.7%      36.6%
     Other                             47.5%      54.5%       48.7%      50.9%
                                  ---------  ---------  ----------  ---------  
           Total gross margin          
           percentage                  12.1%      13.2%       13.2%      13.5%

Operating expenses:                                    
     Selling                            4.8%       3.9%        4.8%       4.3%
     Service                            2.2%       2.3%        2.7%       2.4%
     General and administrative         2.6%       3.1%        2.9%       3.2%
     Depreciation and                                                          
     amortization                       0.6%       0.5%        0.7%       0.6% 
                                  ---------  ---------  ----------  ---------  
           Total operating                                                     
           expenses                    10.2%       9.8%       11.1%      10.5% 
                                  ---------  ---------  ----------  ---------  
                                                       
Earnings from operations                1.9%       3.4%        2.1%       3.0%
                                                       
Financing expenses                      0.7%       0.7%        0.8%       0.7%
                                  ---------  ---------  ----------  ---------  
Earnings before income taxes            1.2%       2.7%        1.3%       2.3%
                                                       
Income taxes                            0.5%       1.1%        0.5%       0.9%
                                  ---------  ---------  ----------  ---------  
                                                       
Net earnings                            0.7%       1.6%        0.8%       1.4%
                                  =========  =========  ==========  =========  
</TABLE>
                                                                     (Continued)

                                       8
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations

COMPARISON OF THE QUARTER ENDED JUNE 30, 1998 TO THE QUARTER ENDED JUNE 30, 1997

   Product revenue, which is primarily derived from the sale of distributed
desktop computer products to corporate customers, increased 23.8% to $530.5
million in the second quarter of 1998 from $428.4 million in the second quarter
of 1997. Of the 23.8% increase, approximately 12.5% was from acquisitions and
11.3% was from internal growth. The growth from acquisitions was primarily due
to the Company's May 13, 1998 acquisition of Computer Integration Corporation
("CIC") which added approximately $51 million in product revenue. The Company
sold more desktop, laptop, and server units in the three months ended June 30,
1998 than in the same period of 1997. However, a decline in the average sales
price of these units lessened the impact of this unit growth on revenue. The
Company also completed the acquisition of Dataflex Corporation ("Dataflex") on
June 26, 1998; however, this acquisition did not have a material impact on the
Company's financial performance for the second quarter. Product gross margin as
a percentage of product revenue for the second quarter of 1998 was 9.5% compared
to 9.6% for the second quarter of 1997.

   Service revenue increased 5.7% to $63.1 million for the second quarter of
1998 from $59.7 million during the second quarter of 1997. Service revenue is
primarily derived from LAN/WAN projects, consulting, asset tracking, network
management, help desk, field engineering, procurement, configuration,
distribution, and software management. Service revenue reflects revenue
generated by the actual performance of specific services and does not include
product sales associated with service projects. The increase in service revenue
is due to increases in both configuration and field engineering, which
benefitted from the increase in product unit sales volume. Service gross margin
as a percentage of service net revenue for the three months ended June 30, 1998
was 31.3% compared to 37.1% for the same period in 1997. The decrease was
primarily due to lower billing per engineer for the Company's service
personnel, particularly in the systems engineering group.

   Operating expenses increased $12.5 million for the three months ended June
30, 1998 as compared to the same prior year period. As a percentage of net
revenue, operating expenses increased to 10.2% compared to 9.8% in 1997. The
percentage and dollar increases resulted primarily from increased selling
expenses.

   Selling expense increased in absolute dollars and as a percentage of net
revenues for the three months ended June 30, 1998 as compared to the same prior
year period. These increases resulted from the Company hiring additional sales
representatives during the first quarter of 1998, higher commission expense, and
an increase in the Company's sales force as a result of the CIC acquisition.
Service expense, as a percentage of net revenues, decreased slightly for the
second quarter of 1998 compared to the same prior year period due to the
increase in net revenues.

                                                     (Continued)

                                       9
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations

   General and administrative expense, as a percentage of net revenue, decreased
for the three months ended June 30, 1998 to 2.6% compared to 3.1% for the
comparable period of the prior year.  The decrease was primarily due to the
increase in net revenues, as general and administrative expense increased
slightly in absolute dollars when comparing the same periods. The increases in
absolute dollars were mainly the result of costs associated with the integration
of CIC as well as the Company's ongoing campus recruiting program. The campus
recruits complete training and certification programs before being added to the
Company's billable workforce. The Company's operating expenses are reported net
of reimbursements by certain manufacturers for specific training, promotional
and marketing programs. These reimbursements offset the expenses incurred by the
Company.

   Depreciation and amortization expense increased for the three months ended
June 30, 1998 in absolute dollars and as a percentage of net revenue when
compared to the same period in 1997. The increase in depreciation expense is
associated with upgrading the Company's hardware and software at the Company's
headquarters and branch locations, increased furniture and fixtures to support
headcount additions, and depreciation expense related to the Company's corporate
headquarters and operations campus, which was placed in service during the third
quarter of 1997. Increased amortization expense is the result of acquisitions
completed during the first half of 1998, primarily the CIC acquisition.
 
   Financing expense remained flat as a percentage of revenue, but increased in
absolute dollars for the three months ended June 30, 1998, as compared to the
same period in 1997.  The increase in absolute dollars was primarily the result
of higher borrowing levels due to the Company's acquisition of CIC in May.  The
Company's effective interest rate was 6.5% in the second quarter as compared to
6.8% in the same prior year period.

   As a result of the factors discussed above, net earnings decreased 46% for
the quarter ended June 30, 1998 to $4.3 million compared to the same period in
1997.
 
COMPARISON OF THE SIX MONTHS ENDED JUNE 30, 1998 TO THE SIX MONTHS ENDED JUNE
30, 1997

   Product revenue increased 12.8% to $907.3 million for the six months ended
June 30, 1998 from $804 million in the same period of 1997. Of the 12.8%
increase, approximately 6.7% was from acquisitions and 6.1% was from internal
growth. The growth from acquisitions was primarily from CIC which added
approximately $51 million in product revenue. The Company also completed the
acquisition of Dataflex on June 26, 1998; however, this did not have a material
impact on the Company's financial performance for the six months ended June 30,
1998. The Company sold more desktop, laptop and server units in the six months
ended June 30, 1998 than in the same period of 1997. However, a decline in the
average sales price of these units lessened the impact of this unit growth on
revenue. Product gross margin as a percentage of product revenue increased to
10.4% for the six months ended June 30, 1998 from 10% for the same period in
1997. The increased percentage is primarily due to an increase in the amount of
manufacturer sponsored incentives, which lowered the average cost of hardware
units sold.


                                                     (Continued)

                                       10
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

   Management's Discussion and Analysis of Financial Condition and Results of
                                   Operations


   Service revenue increased 6.0% to $120.3 million for the six months ended
June 30, 1998 from $113.4 million during the same period of 1997. The increase
in service revenue is due to increases in both configuration and field
engineering, which are typically driven in part by product unit sales volume.
Service gross margin as a percentage of service net revenue was 31.7% for the
first half of 1998 compared to 36.6% for the same period in 1997. The decrease
was primarily caused by lower billing per engineer for the Company's service
personnel, particularly in the systems engineering group.

   Operating expenses increased $18.4 million for the six months ended June 30,
1998 as compared to the same prior year period.  As a percentage of net revenue,
operating expenses increased to 11.1% compared to 10.5% in 1997.  The percentage
and dollar increases resulted primarily from increased selling expenses.

   Selling expense increased in absolute dollars and as a percentage of net 
revenues for the six months ended June 30, 1998 as compared to the same prior 
year period. These increases resulted from the Company hiring additional sales 
representatives during the first quarter of 1998, higher commission expense, and
an increase in the Company's sales force as a result of the CIC acquisition.
Service expense, as a percentage of net revenues, increased for the six months
ended June 30, 1998 compared to the same prior year period due primarily to
increased headcount in certain service support functions and increased spending
on training of the Company's engineer force.

   General and administrative expense, as a percentage of net revenue, decreased
for the six months ended June 30, 1998 to 2.9% compared to 3.2% for the
comparable period of the prior year.  The decrease was primarily due to the
increase in net revenues, as general and administrative expense increased
slightly in absolute dollars when comparing the same periods.  The increase in
absolute dollars was mainly the result of costs associated with the integration
of CIC during the second quarter of 1998 as well as costs related to the
Company's ongoing campus recruiting program. The campus recruits complete
training and certification programs before being added to the Company's billable
workforce. The Company's operating expenses are reported net of reimbursements
by certain manufacturers for specific training, promotional and marketing
programs. These reimbursements offset the expenses incurred by the Company.

   Depreciation and amortization expense increased for the six months ended June
30, 1998 in absolute dollars and as a percentage of net revenue when compared to
the same period in 1997.  The increase in depreciation expense is associated
with upgrading the Company's hardware and software at the Company's headquarters
and branch locations, increased furniture and fixtures to support headcount
additions, and depreciation expense related to the Company's corporate
headquarters and operations campus, which was placed in service during the third
quarter of 1997. Increased amortization expense is the result of acquisitions
completed during the first half of 1998, primarily the CIC acquisition.
 
   Financing expense remained relatively flat as a percentage of revenue but
increased in absolute dollars for the six months ended June 30, 1998, as
compared to the same period in 1997.  The increase in absolute dollars was
primarily the result of higher borrowing levels as the Company took advantage of
more early-pay discounts offered by its larger vendors than in the same prior 
year period, as well as the Company's acquisition of CIC in May. The Company's
effective interest rate was 6.5% for the six months ended June 30, 1998 as
compared to 6.7% in the same prior year period.



                                                  (Continued)

                                       11
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of
                                  Operations


   As a result of the factors discussed above, net earnings decreased 37% for
the six months ended June 30, 1998 to $8.1 million compared to the same period
in 1997. Some of the factors that may impact future profitability include the
following: the Company's ability to effectively manage inventory in response to
changes in its major suppliers price protection and return programs, the
Company's ability to effectively manage the utilization of service personnel,
the Company's control of operating expenses, demand for product, competition,
manufacturer product availability, effective utilization of vendor programs, the
Company's ability to successfully manage the implementation and operation of the
channel assembly programs of its major suppliers, and the Company's ability to
adequately integrate recent and potential future acquisitions.

Liquidity and Capital Resources

   Working capital at June 30, 1998 was $206 million compared to $235 million at
December 31, 1997.  The decrease is primarily due to an increase in accounts
payable, partially offset by an increase in accounts receivable. The Company's 
accounts payable balance fluctuates relative to the timing of the receipts of 
product and the mix of vendors. The increase in accounts receivable is
attributable to the CIC and Dataflex acquisitions completed during the second
quarter, as well as higher revenues in June 1998 versus December 1997.

   The Company's working capital requirements are generally funded through
financing arrangements and internally generated funds.  During the second
quarter of 1998, the Company negotiated an expansion of its working capital
facility ("Revolver") from $125 million to $165 million with no significant
changes to the existing Revolver terms and conditions.  The primary purpose of
the expansion was to provide financing for the acquisitions completed during the
second quarter.  As of June 30, 1998, the Company's financing arrangements
consisted of a $175 million Securitization Facility, the $165 million Revolver
and a $25 million real estate loan (collectively, the "Credit Agreements").  The
Company is currently evaluating other permanent financing options for the real
estate loan.

   The Company's business is not capital asset intensive, and capital
expenditures in any year normally would not be significant in relation to the
overall financial position of the Company. Excluding acquisitions, capital
expenditures were approximately $4.8 million and $8.9 million during the second
quarter of 1998 and for the six months ended June 30, 1998, as compared to $8.0
million and $12.0 million for the same periods in 1997. The majority of the 1998
capital expenditures were related to the upgrading of Company hardware and
software located at both headquarters and branch locations. The majority of the
$12.0 million in 1997 was for facility improvements to prepare the Company's
headquarters and operations campus for full occupancy.

   On April 10, 1998, the Company announced definitive agreements with CIC and
holders of approximately 55% of CIC's common stock under which CompuCom would
acquire CIC in a cash for stock transaction.  Under the terms of the agreements,
CompuCom paid a total of $17.25 million, of which $15.3 million was used to
purchase all of CIC's outstanding preferred stock and common stock.  Of the
$15.3 million, approximately $2.75 million (or $0.196 per share) was deposited
in an interest-bearing escrow fund.  Any amount remaining in the escrow fund
after the payment of certain potential post-closing adjustments will be paid to
CIC's common stockholders approximately one year after closing.  The acquisition
was completed on May 13, 1998.

                                                  (Continued)

                                       12
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

Management's Discussion and Analysis of Financial Condition and Results of
                                  Operations

   On April 10, 1998, the Company announced a definitive agreement with Dataflex
under which CompuCom would acquire Dataflex in a cash for stock transaction.
Under the terms of the agreement, CompuCom paid a total of $23,994,000 to
purchase all of Dataflex's outstanding common stock.  The acquisition was
completed on June 26, 1998.

   The statements contained in this document that are not historical facts,
including but not limited to, statements identified by the use of terms such as
"may", "will", "could", "potential", "would" or "expect" or other variations or
negatives of these terms, are "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 and involve a number of
risks and uncertainties.  The actual results of the future events described in
the forward-looking statements in this document could differ materially from
those stated in the forward-looking statements.  Among the factors that could
cause actual results to differ materially are:  competitive pricing and supply,
short-term interest rate fluctuations, general economic conditions, employee
turnover and possible future litigation, the Company's ability to effectively 
manage inventory in response to changes in its major suppliers price protection
and return programs, as well as the risks and uncertainties set forth from time
to time in the Company's other public reports and filings and public statements.
Recipients of this document are cautioned to consider these risks and
uncertainties and to not place undue reliance on these forward-looking
statements.

                                       13
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

                          PART II.  OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders

        The Company held its Annual Meeting of Shareholders on May 14, 1998. At
the meeting, the shareholders voted in favor of electing as directors the ten
nominees named in the Proxy Statement dated April 7, 1998, and for an amendment
to the Company's 1993 Stock Option Plan. The number of votes cast for, against
or withheld, as well as, the number of abstentions and broker nonvotes were as
follows:

Election of Directors:
                                  For                    Withheld
                               ----------                --------
Edward R. Anderson             52,858,663                 451,852
Daniel F. Brown                52,858,356                 452,159
Donald R. Caldwell             52,858,175                 452,340
Michael J. Emmi                52,871,275                 439,240
Richard F. Ford                52,872,165                 438,350
Delbert W. Johnson             52,858,175                 452,340
John D. Loewenberg             52,865,765                 444,750
John C. Maxwell III            52,856,995                 453,520
Warren V. Musser               52,851,197                 459,318
Edward N. Patrone              52,870,127                 440,388


Proposal to adopt an Employee Stock Purchase Plan:

          For             Against    Abstain    Broker Nonvotes
          ---             -------    -------    ---------------
           44,129,629       222,701    95,561                -



Item 5. Other Information.

        Stockholders intending to present proposals at the next Annual Meeting
of Shareholders to be held in 1999 must notify the Company of the proposal no
later than December 8, 1998 if they wish to include the proposal on the
Company's proxy card and, along with any supporting statement, in the Company's
proxy statement. As to any proposal presented by a stockholder at the Annual
Meeting of Stockholders that has not been included in the Proxy Statement, the
management proxies will be allowed to use their discretionary voting authority
unless notice of such proposal is received by the Company no later than February
21, 1999.

                                       14
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

                          PART II.  OTHER INFORMATION

Item 6.  Exhibits and Reports on Form 8-K

(a)      Exhibits
         --------

         Exhibit
           No.        Description
         --------     -----------
           10.1       Amendment #1 to Amended and Restated Credit Agreement,
                      dated as of June 26, 1998, among Compucom Systems, Inc.,
                      certain lenders party hereto, and NationsBank of Texas,
                      N.A., as administrative lender (exhibits omitted).
 
           27         Financial Data Schedule


(b)      Reports on Form 8-K

           No reports on Form 8-K have been filed by the Registrant during the
three months ended June 30, 1998.

                                       15
<PAGE>
 
                    COMPUCOM SYSTEMS, INC. AND SUBSIDIARIES

                                   Signatures


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



                                             COMPUCOM SYSTEMS, INC.
                                         -----------------------------
                                         (Registrant)



 
DATE:  August 14, 1998                   /s/ Edward Anderson
                                         -----------------------------
                                         Edward Anderson,
                                         President and Chief Executive Officer



DATE:  August 14, 1998                   /s/ M. Lazane Smith
                                         -----------------------------
                                         M. Lazane Smith,
                                         Senior Vice President, Finance and
                                         Chief Financial Officer

                                       16